Millennium Development Goals Essay

Submitted By luisacerca
Words: 943
Pages: 4

The Netherlands: Position Paper
Topic A: Regulation and reforms for the global financial system in combating tax avoidance and corruption
The Netherlands was heavily affected by the financial crisis: its three largest banks (Fortis, ING and ABN Amro) were bailed out by the government. To deal with the proposals for regulatory reform, the De Wit Committee was established. In the past two years, the regulatory landscape in the Netherlands has seen some important changes: by January 1st, 2013, Basel III became fully enforced. Additionally, the Intervention Act passed in Parliament in February of last year makes it possible to intervene in a bank’s organisational structure if its financial situation demands so. There is even the option of the government splitting a bank. Consequently, with the combination of these two policies, the Dutch financial system is not in need of a Volcker rule that would split the investment and retail banking systems. The reasons for this are the differences between the Netherlands and the other countries in need of its implementation: the amount of proprietary trading in the country is too low to justify the costs such a rule would demand and there is a ‘retail funding gap’ (savings and demand for credit are imbalanced). Retail banks are not necessarily safe, and many empirical data prove this. In 2007, total indebtedness of households in the Netherlands was around 120% of GDP (in comparison to 64% for Germany or 49% for France). Additionally, Dutch corporations are also relatively dependent on bank loans: 83% of the GDP in 2007 accounted for these loans (much higher than in other European countries).
With regards to the financial transactions tax many countries wish to implement, the Netherlands does not consider it to be effective in correcting market failures such as volatility or asset price bubbles. On the other hand, the country believes the Tobin Tax would generate significantly less revenue than its advocates project and they would be paid by charitable trusts, retirement savings and non-financial businesses, among others, rather than by the banks. The Dutch Central Bank believes that the FTT would cost the nation’s lenders, pension funds and insurers about 4 billion euros and it would hurt economic growth. 42% of this would be borne by pensions.
Finally, in respect to corruption and tax evasion, the Dutch government has identified this as a problem and is currently considering a nationwide approach to combating illegal money in the Netherlands: involving plans to confiscate the proceeds of crime and to close existing opportunities to violate tax rules, as well as to tighten existing regulations and to intensify surveillance to limit opportunities for violating rules. In 2011, the government confiscated around 4.5 billion euros in illegal money. Hence, to ensure that effective action is implemented at a national level, a coherent approach combined with an intensified exchange of information is needed. As a result, the Criminal and Unaccountable Assets Infobox (iCOV) is currently being developed within this framework, due to be operational during 2013. Its aim is to establish a partnership between the tax authorities, the Fiscal Intelligence and Investigation Service (FIOD), the Public Prosecution Service (OM), the police and the Financial Intelligence Unit (FIU) to share information in order to identify money laundering and fraud, and to trace and to subsequently confiscate assets, thereby reducing tax evasion.

Topic B: The Global Development Agenda post-2015
The Netherlands considers the Millennium Development Goals as a major guideline for its development policy. It is important for this country to achieve results in development cooperation and it is focusing its efforts in the field of education, HIV/AIDS, reproductive rights, the environment and water. In 2010, the Netherlands even appointed an Ambassador for the MDGs and