International Monetary System

Speech by Chris Huhne MEP delivered to the European Parliament on Mon 22nd Oct 2001

Mr President, I would like to congratulate the rapporteur on this report. We, in the Liberal Group, welcome the thrust of the report, because it grapples with the real issues and it avoids the sort of populist solutions which, I am afraid, are on offer in many of the amendments before this House. I am particularly thinking of the Tobin tax. It is, of course, the case that nobody, particularly liberals in favour of free inquiry, could object to the Commission's study on this subject. But I frankly believe that this is a false promise which really offers very little practical benefit to the countries that we are all, I hope, trying to help.

Instead, the report quite correctly identifies as a potential model, the Chilean deposit system, which introduces an incentive for investors to invest long-term in an emerging market rather than going for short term paper because that involves a longer-term investment for depositors. That is the right way to go, and therefore I very much congratulate the rapporteur and hope that we will not support the amendments to an excellent report.