Avoided “act of vandalism” or “missed opportunity”? Two alternative accounts of the European Financial Transactions Tax proposal

After the seeming exhaustion of the Tobin tax debates in the early 2000s, the idea of levying a tax on financial transactions has recently resurfaced at the centre stage of European politics. This has been prompted by a concatenation of events which includes the persistence of the current economic crisis and the paucity of the responses to it, the initial European Commission proposal to tax all types of financial instruments, all financial markets and all financial institutions and, ultimately, the subsequent progressive dilution of the application of such prospects in practice. Given such backdrop, this paper reviews closely two distinct accounts of financial transaction taxes in general and of the European Commission proposal in particular: Grahl and Lysandrou’s argument against them (together with their preference for financial activities taxes instead), and Gabor’s alternative account of their rationale. Such a review aims to constitute a preliminary assessment of these two distinct accounts of the material socio-economic relations, processes and structures underpinning the prospects for global financial reform, which is then offered as a base to relate such perspectives to broader issues and debates about financialisation.