Message to François Hollande and Mario Draghi - here's a simple solution to the Eurozone's problems

Here's a suggestion for something that the French government could campaign for at the European level as a way to break the current stalemate.

1. Force the European Central Bank to impose a flat-rate Financial Transaction Tax on all Euro-denominated electronic transactions, wherever they occur in the world.

2. Redistribute the revenue from the tax in two ways

• Some of the money should be redistibuted to the 18 Eurozone governments according to each country's population size
• The rest should be provided diretly to Eurozone citizen's in the form of a basic unconditional income, paid directly to their bank accounts.

This is a simple scheme, but it has a number of interesting features.

First, note that I don't make any specific suggestions for the initial amounts. The important thing to start with is to get the mechanism in place.

Obviously, once the mechanism is in place, it would then become easy to gradually increase the FTT rate and thus allow more money to be transfered from the financial sector (which currently creates the money that we use) to the Eurozone's citizens and governments. I suspect that, once people can see that the mechanism works, there will be a lot of public pressure on the ECB to increase the rate of transfer.

Second, the proposal leaves some leeway to the ECB to choose the best ratio between payments to governments and direct unconditional payments to citizens. Obviously, making payments to governments leaves a lot more options in the hands of politicians. As Positive Money has pointed out, it would be up to the elected government in each country to decide what to do with the extra resources. They can (a) reduce taxes, (b) increase spending on infrastructure and public services, (c) provide money directly to citizens, or (d) pay off debt. The difference between option c) and the option of making direct payments from the ECB is that in the second case, it is guaranteed that the money will end up in the real economy. It might be that an intelligently managed ECB might choose to push a substantial amount of funds directly into the economy via citizen's payments.