EU bank tax plans unveiled under 'polluter pays' principle
Blueprints for European Union-wide tax on banks to help combat future crises unveiled in Brussels
Wednesday, 26, May 2010 12:01
By Matthew Champion.
Blueprints for a European Union-wide tax on banks in order to help combat future financial crises have been unveiled in Brussels.
The European Commission wants to impose a levy on leading banks to remove the need for taxpayer bailouts in the event of another crash in the sector.
The EU's internal market commissioner Michel Barnier, who is leading an investigation into reform of the continent's financial services, said he believed in the "polluter pays" principle.
"We need to build a system which ensures that the financial sector will pay the cost of banking crises in the future," Mr Barnier said.
Under the plans an EU-wide system for imposing a levy on a bank's assets, liabilities or profits would be in place by 2011.
But there is already disagreement between the largest EU economies on how the tax should be managed, with Brussels preferring national governments to collect the levy but then allow it to be centrally distributed.
France and the UK also want the fund to be used to tackle national deficits, although Germany intends it to be ring-fenced for any eventual crises.
The proposals will be debated at the G20 leaders' summit in Toronto next month.
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