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Philippe Douste-Blazy Headshot

To Create a Financial Transactions Tax

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Mr. President François Hollande,

Since May 6th, you have had a solid majority to conduct reforms and move your agenda through the French National Assembly.

International matters are your daily worries; you are keenly aware that French people demand global responses to global issues, such as the economic crisis, unemployment, the environment, international solidarity and development.

The national political agenda can no more be separated from the international one. To help the French people, you simply must be at the forefront of the emergence of a better global world, and soon that occasion will be granted to you: the opportunity to build global solidarity via the creation of a global Tax on Financial Transactions.

It will be as much a symbolic gesture as a vital and efficient one.

Even though the Mexican Presidency of G20 did not allow for any progress on this topic, there exists a historical opportunity, starting right now here in France. A first draft of this tax exists here, voted by your predecessor. After years of haggling, it is a great occasion to put finance at the service of solidarity. You can become the first Head of State to decide it, showing the way to the world.

The exact basis and effective rate of this Financial Transactions Tax (FTT) can be fine-tuned infinitely; it is nevertheless possible, with a very small rate and a wide basis to raise in excess of 100 billion euros per annum in the EU only; 10 billion in France alone. The existing project only calls for 1 billion a year; with a very small rate applied on an even narrower basis.

But that is not the most important; what is essential is to use the proceeds of this tax to a large extent to further the cause of international solidarity and development; and not to yield to the obvious temptation of every bureaucrat to apply the proceeds entirely to debt reduction, when it should go to fund growth, care, health and education and combat illnesses where most needed.

1000 economists, the entire African Union, most members of the European Union have all called for this choice , and here is why:

First, we must proclaim that we respect human dignity. 1, 5 billion people earn less than 1.25 dollars per day and have no access to world goods, such as water, food, health, education, or sanitation. Every three seconds, a child dies of a disease that we know either how to avoid, or to cure. We in this part of the world must raise together and say "no" to this situation, it cannot continue as is; and you, Mr. President, can be at the forefront of this movement.

France, the country of human rights, has always respected the sacred character of the human being and shown to the world the path of freedom, generosity, and enlightenment, and it can do so again right now.

Second, there exists now a mechanism for efficient aid, as opposed to the past, when aid mechanisms were criticized and left many doubtful; too much was lost between amounts raised and actual amounts spent. UNITAID, an International Organization hosted by the United Nations to collect and allocate the levy on airplane tickets, has proven the efficiency of its model. We have collected 2.4 billion dollars in 6 years, administered by a Board of Directors including donors and beneficiary Governments, Bill Gates, and representatives of civil society. The money collected, in full transparency, has been allocated to cure aids, tuberculosis, and malaria. Today, 8 out of 10 children treated against these are treated thanks to UNITAID, as are 500,000 pregnant women touched by this disease so as to prevent it from spreading. Likewise, this small tax levied on plane tickets allows world travelers, without even knowing it, to save 3 children from malaria each time they fly.

UNITAID is an efficient laboratory of innovative financing for solidarity; and it must be an example of how to channel aid directly from the international funds to the people who need aid without going through the States; how to be a source of stable and reliable aid independently of the vagaries of western economic conjecture, of how to meet the challenges of development of the South.

Third, a FTT for development is a unique opportunity to prove multilateralism as a modern and necessary political tool.

And fourth, of course, a global FTT for development is a universal message of hope and strength: the world is one, global, digitalized and numerical, yes; but it also has adopted a mechanism for global solidarity: a painless FTT efficiently redistributed directly to the needy. This is why I ask that France commits to devote directly 50% of the amount collected on the FTT voted here last March to finance development, to fight against pandemics, to give access to drinking water, to fight against hunger and to develop agriculture.

This can be done with supporting UNITAID and helping it show global leadership in Innovative Financing. The core idea is simple: the globalization of the economy must be met by the globalization of solidarity. To do so, a minuscule part of the north's wealth must be collected and redistributed efficiently. Hence UNITAID and Innovative Financing, such as the FFT.

Mr. President, if under your leadership France takes the lead, many countries will follow. If you take such an initiative in the United Nations in September, you will be backed by the many nations that are ready to come forth and commit, and backed also by international opinion and the entire associative world -- all the NGOs want this!

You will quite certainly give new scope and political strength to French diplomacy and world influence, but more, much more than that, you will blow a fresh, new and strong wind of hope among all citizens of the world, and you will meet the faith so many put in us.

The time is now.