Germany appeals to EU neighbours to back bank levy

Merkel made her pitch ahead of a meeting of EU leaders to discuss tightening controls on spending by the bloc’s 27 countries and how charges against the banking industry should be structured.

“We will prepare for the G20 and G8 meeting so that we can go with as united a European position as possible that also covers a bank levy and taxation of financial markets,” said Merkel.

“Germany and France … are in favour of calling more on those who caused the crisis to pay up.”

But doubts persist as to whether Europe can agree a code for a levy.

Britain, which will introduce its own bank charge, is opposed to pan-European rules, and Ireland is nervous that an extra charge on its banks could exacerbate their difficulties.

“I want to push it through on a European level but there are many countries that do not think this,” Austrian chancellor Werner Faymann said of a levy.

Early in June, finance ministers from the Group of 20 countries ditched plans for a global bank levy in the face of opposition from Japan, Canada and Brazil, whose lenders came through the credit storm relatively unscathed.

This throws down the gauntlet to the EU to go it alone. “It is fair to say that a fairly substantial majority would be in favour but there are many, many issues to be resolved,” said one diplomat.

Britain and France would use the money raised for public spending, while Germany wants it ring-fenced for future crises.

A financial transaction tax, recently introduced to the debate by Germany, is even more controversial because many believe such curbs in Europe would drive trading to other continents. Britain is opposed to the measure.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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