Vatican Official Backs Call for Transaction Tax

Says It Would Be One Way to Return Finance to Its Real Vocation

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ROME, JAN. 26, 2012 ( Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace, has declared his support for a tax on financial transactions. His statement comes just before a special European Union summit on the crisis in the Eurozone area, which will be held Monday.

The cardinal voiced his support during his address to the annual board of directors meeting of the International Cooperation for Development and Solidarity (CIDSE). The organization, based in Brussels, in an international alliance of Catholic development agencies.

CIDSE has long advocated such a tax, it noted in a press release today that contained the text of Cardinal Turkson’s statement.

«One way of bringing economics and finance back within the boundaries of their real vocation, including their social function, would be through taxation measures on financial transactions,» he told the directors. 

«These should be applied with fair rates, modulated in proportion to the complexity of operations, especially those made on the ‘secondary’ market,» the Vatican official added.

This tax, he said, «would be very useful in promoting global development and sustainability according to the principles of social justice and solidarity.» Moreover, «it could also contribute to the creation of a world reserve fund to support the economies of the countries hit by crisis, as well as the recovery of their monetary and financial systems.»

John Arnold, auxiliary bishop of Westminster, present at the CIDSE meeting, also supported the tax.

«Human beings are both the source and the purpose of all economic activity, we have got to reform financial markets so that they can serve human well-being and society,» he said.

«Speculative activities have been proven to generate economic fluctuations that have a destabilizing impact on the economy,» Bishop Arnold noted. «Economic instability, in turn, increases inequality as amply demonstrated by the current situation of many European societies.»

According to CIDSE’s president, Chris Bain, adopting such a tax would raise funds needed to finance development and would foster justice and equity.

«Skeptics must realize that a tax on financial transactions could go a long way towards stabilizing financial systems,» he said, «while tackling poverty in some of the most vulnerable countries in the world.»

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