Gates: Don’t use FTT to bail out Greece
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Gates: Don’t use FTT to bail out Greece

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Bill Gates has urged politicians to use the proceeds from a financial transaction tax to fight poverty and disease

European governments planning to impose a tax on financial transactions must use the revenues to help tackle poverty and disease, rather than paying the costs of the Greek bailout, computer billionaire Bill Gates said yesterday.

French president Nicolas Sarkozy gave strong backing to proposals for a financial transactions tax (FTT) in Cannes last night. Speaking at a press briefing he said that such a tax was “technically possible, financially indispensable and morally essential.”

In a much anticipated report presented to Sarkozy and the other G20 leaders yesterday, Gates said that the FTT has been “widely advocated” as a good way of raising additional resources for development and noted that the G20 will “continue” to discuss it.

But he added: “For those that choose to adopt it, I urge you not to use all of the proceeds as general revenue. It is critical that a portion of the money raised be reserved for investments in development.”

Charity groups welcomed his report and said that it should increase the pressure on the G20 to meet the pledges to increase development spending this year that the group’s chair, French president Nicolas Sarkozy, set out in January.

“The report [did not signal as strong support for the FTT] as some of the statements that Gates has been making in the news,” said Sam Worthington, chief executive of the US NGO InterAction.

“But Mr Gates was proposing multiple ways to finance development, of which the FTT was just one. The idea is that different governments need to find different tools to finance development.”

Oxfam said that Gates was “specifically pressurizing” the Europeans to ensure their FTT was used to tackle development issues. “We hope [German Chancellor] Angela Merkel is listening,” said Luc Lamprière, director general of Oxfam France.

Adrian Lovett, European director of ONE, an anti-poverty NGO, told Emerging Markets that action groups would hold Sarkozy to his promise to increase development resources when the G20 publishes its communiqué today.

“If the FTT goes ahead and they do not use it for that, then he has not met that promise,” he said. “I think he will, but he has a lot of work to do to ensure he will generate these resources over the next couple of years.

Gates used his report to urge leaders to commit to increasing the pool of resources dedicated to development or risk causing irreparable damage to the livelihoods of millions of the poorest people.

He stressed the need for rich countries to continue their generosity and meet their foreign aid commitments – which are generally between 1-2% of government’s budgets – while ensuring that aid is spent effectively in areas such as health and agriculture.

“If the countries that have made promises stick to them, it will generate an additional $80 billion annually starting in 2015,” Gates said. “Well-designed aid reduces poverty right now and accelerates poor countries’ progress toward the moment when they no longer need it.”

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