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EU Moves For Global Tax, Mandatory Bank Reserve Funds …

  • June 21st, 2010
  • Posted by EUEditor

berlaymont-resize-1502.jpgHeads of Government of the European Union want a global bank levy and financial transactions tax, and will be arguing for those changes at the G-20 economic summit in Toronto this week (26-27.6.10).


TAXPAYERS SHOULD NOT FOOT THE BILL

The Europeasn summit at Brussels, 17.6.10, endorsed a proposal made last month (26.5.10) by its executive Commission , for the European Union to itself set up a network of bank resolution funds; as it said, “to ensure that future bank failures are not at the cost of the taxpayer or destabilise the financial system.”

The European Commission  said:  “Such funds would form part of a broader framework aimed at preventing a future financial crisis and strengthening the financial system.

“The Commission believes that a way to achieve this is by introducing requirement for Member States to establish funds according to common rules into which banks are required to pay a levy.

“The funds would not be used for bailing out or rescuing banks, but only to ensure that a bank’s failure is managed in an orderly way and does not destabilise the financial system.”

COMMITMENT BY GOVERNMENT HEADS

In Brussels last week, meeting as the European Council, the government leaders issued a declaration, reading in part that the gathering:

•    Reaffirmed the EU’s collective determination to ensure fiscal sustainability, including by accelerating plans for fiscal consolidation where warranted;

•    Confirmed the EU’s commitment to ensuring financial stability by addressing the gaps in regulation and supervision of financial markets, both at the level of the EU and at the G20. The EU agreed to rapidly advance key legislative measures so that the new supervisory bodies can start work from the beginning of next year and set an ambitious position for the EU to take at the Toronto Summit;

•    Collectively agreed on the urgent need to reinforce the coordination of economic policies. Heads of State or Government agreed on first orientations as regards the Stability and Growth Pact and budgetary surveillance as well as broader macroeconomic surveillance, and look forward to the final report of the Task Force in October.

That set of measures, together with funds assembled to support borrowing by Greece, and then other government borrowing among the 17 countries so far in the Euro monetary union, summed up initiatives developed by the EU since the onset of the global financial crisis in 2007.

“The bank levy will be discussed next week with our global partners, as an EU proposal at the G20 Summit in Toronto.

“In the G20, we will also propose to explore and develop the introduction of a global financial transaction tax”, said
Herman Van Rompuy, President of the European Council.

Reference

European Commission, Brussels, “Commission sets out vision for bank resolution funds”, IP/10/510, 26.5.10.

European Coucnil, Brussels, 17.6.10, Brussels. EUCO 13/10. COEUR 9, CONCL 2.


Picture  European Commission building, Brussels.