G20 legislative leaders call for less profiteering, more co-operation on food security

13:08, September 05, 2010      

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Delegates to a conference of G20 parliamentary chairs appear to have reached consensus that commodity speculation and unregulated financial markets threaten the food security of more than a billion of the world' s people.

Two days of meetings of upper-tier legislative experts ended here on Saturday with pleas by delegates to take steps to end the stranglehold that money markets have imposed on many governments. Several called for more transparency in the derivative markets, arguing that fear that unregulated speculation in commodities is resulting in manipulation of food prices to the detriment of developing countries.

Socialist Greek politician Stavros Lambrinidis, vice-president of the European parliament, blamed foreign money markets for trying to pressure Europe into cutting its social programs. He said Europe has reacted by coming together to try to fend off assaults by currency speculators and bond raters.

"In a time of crisis, it is more integration, rather than less integration, that can bring solutions," he told the delegates. "Globalization has created a tremendous amount of power but it is concentrated in a few hands, he said.

He pointed to the London and New York-based financial markets, but added that the concentration of media power in a few Western hands is also a threat to independent action by governments.

He also pushed for a crackdown on tax havens, acknowledging that some of the worst are in Europe. "A tax haven is a guarantee for unfair growth...Major companies and individuals can use those loopholes to avoid helping pay the cost of building schools, building hospitals, building the social network."

And he mocked the neo-conservative argument that markets are rational. "In fact, what we saw was the exact opposite. In 2008, we saw irrational euphoria that led to a bubble, and, in 2009, irrational fear."

In Europe, that fear was stoked by bond rating agencies that demanded national governments crack down on spending, then cut credit ratings of countries like Greece and Spain because spending cuts reduced economic growth.

"To play with the livelihoods of hundreds of millions of citizens of countries is much different from rating companies," he said.

Lambrinidis advocates the "Tobin Tax" , a levy on international financial transaction tax of 0.05 percent. He said the transaction tax would yield 300 billion euros a year that could be used to develop food security.

Countries would essentially tax "the markets which threw our economies into a tailspin in the first place," he said.

Park Hee Tae, speaker of National assembly of the Republic of Korea, which will be hosting November' s G20 meeting, said his government will consider a similar meeting of legislators when G20 countries meet in Seoul November 10 and 11, 2010.



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