European perspectives on global health: a policy glossary

3. Europe must assert its role in global health governance
issues and list other options like global taxes, for
example : on currency transactions, carbon emissions,
airline tickets, weapon sales or profits of Transnational
Corporations ( TNCs ), voluntary contributions ( e.
g. a global lottery, donations ) or further debt relief.
They state that these possible financing mechanisms
should be additional to existing financing ( and point
to the danger of a crowding out of traditional ODA
spending on health ), that it is necessary to balance
between conditionality on the one hand and the need
for sustainable and predictable financial flows on
the other hand, that issues of donor harmonisation,
governance and participation of southern actors
should be addressed, and that possible new
mechanisms should be discussed in the context of
debt relief and trade reform.
Among the most prominent of these suggestions is
the so-called Tobin Tax or currency transaction tax
( CTT ), a global tax on currency transactions. The
idea behind this tax is twofold : to reduce speculation
and volatility in currency markets, and to generate
revenues that could be used for global development
purposes. It is estimated that a universal currency
transaction tax of 0.1 % could yield $132 billion per
year and a pure <strong>European</strong> tax ( given the political
resistance especially of the US and Japan ) would still
generate revenues of $16 billion per year. If a two-tier
system were to be introduced, with a second, muchhigher
rate applying when price movements exceed
a pre-established limit, revenues could even triple.
Until now only Belgium and France have adopted
legislation on a CTT ; however, this will not come into
force without the participation of other EU states.
Another promising option is a tax on airline
tickets. At the UN Millennium+5 Summit in
September 2005, the “Lula group” persuaded 66
countries to support such a proposal and to sign
the “Declaration on Innovative Sources of Financing
for Development”. The <strong>European</strong> Commission also
released a staff working paper that analyses how
a contribution on airline tickets might be used by
EU Member States as a source of development aid.
Depending on how many EU states participate and
whether governments make the tax voluntary or
compulsory for passengers, it could raise between 568
and 2,763 million euros annually. So far 13 countries
have either proclaimed their intention or taken
corresponding decisions, among them 4 <strong>European</strong>
countries ( France, Norway, Cyprus and Luxembourg ).
One new mechanism that was introduced recently
is the International Finance Facility for
Immunisation ( IFFIm ), a pilot scheme in support of
the GAVI. The idea behind it is to leverage additional
money from the international capital markets
by issuing bonds, based on legally-binding longterm
donor commitments. This pilot project should
demonstrate that it would also be possible to realise
a larger IFF that could raise up to $50 billion per year.
The support for that initiative, however, is limited
so far as the principle of frontloading ODA through
capital markets is perceived increasingly critically by
governments and NGOs.
Another new mechanism to add to global health
financing is Public-Private Partnerships. They can
promote cooperation between state and non-state
actors both from the national and international level
and contribute to the funding of global public goods
and the development of a “new public finance”.
While most of the money for GPPPs comes from public
sources, private foundations play an increasing role.
The Bill & Melinda Gates Foundation has committed
more than $6 billion in global health grants to
organisations worldwide, with a large share going to
GPPPs. Recent studies estimate that GPPPs currently
contribute to 2.2 % of all ODA ( with a growth from
$1.41 billion in 2000 to $2.47 billion in 2003 ) and
that they make up for nearly 14 % of all international
funding in some developing countries. GPPPs’
commitments in many African countries exceed
1 % of GDP and 5 % of government consumption
expenditure. Thus the consequences of GPPPs for
macroeconomic stability and the question of the
added value of these funds have to be discussed.
Among the most prominent GPPPs is the Global
Fund to Fight AIDS, Tuberculosis and Malaria ( GF ),
which became operational in January 2002. By
February 2006 it had approved $4.9 billion to
support programmes in 131 countries and received
pledges of more then $8.6 billion up to 2008. The GF
is the leading financing mechanism in the case of
tuberculosis and malaria, where it contributes 66 %
and 45 % of all international funding, respectively. In
the case of HIV / AIDS, the GF strongly interacts with
other financing institutions like the World Bank and
42 <strong>European</strong> Foundation Centre – <strong>European</strong> Partnership for Global Health