NEW YORK (AFX) - German chancellor Gerhard Schroeder has called for Germany and France to lead a debate on speculative international capital flows, the Financial Times reported in its interactive edition.
Such a move would put one of the main demands of the anti-globalisation movement on the European political agenda. Addressing an international economic conference organised by his Social Democratic party on the eve of an informal dinner in Berlin with French president Jacques Chirac and Premier Lionel Jospin, Schroeder said there is a need to recognise "weak spots" in the international financial system, such as offshore centres, hedge funds and derivatives.
"So I want to discuss with our European and especially French partners how we can react to these relatively autonomous speculative financial flows," he said.
The chancellor stopped short of supporting Jospin's recent espousal of the so-called "Tobin tax". The tax, proposed by James Tobin, the American economic Nobel laureate, would put a levy on turnover in currency markets. The anti-globalisation movement has suggested the proceeds of such a tax could be used for global poverty relief. , Schroeder noted serious shortcomings with the Tobin tax. "For example, how do you distinguish speculative financial flows from those related to genuine trade finance?" he asked.
But the chancellor's comments, ahead of a meeting of EU finance ministers in Belgium and a separate gathering of Social Democratic leaders in Sweden this month, marked an important shift in Germany's willingness to recognise the objections of the anti-globalisation movement.
Describing the Tobin tax as one of many instruments which could be used, the Chancellor said such issues needed to be discussed by Europe's finance ministers "with all clarity".