France Against Bank Taxes Feeding Resolution Fund
07.09.10, 15:47 Uhr
BRUSSELS -(Dow Jones)- French finance minister Christine Lagarde said Tuesday that France supports a tax on European banks, but reiterated that it doesn't want the proceeds to go to a resolution fund to deal with failing banks.
Lagarde's comments followed a meeting of European Union finance ministers, where no consensus was found on taxing banks.
"We don't want to put the bank tax into a resolution fund, but would prefer it to contribute to the budget of the state, which, in the financial crises, was the resort for the whole system," Lagarde said. The Netherlands and the U.K. also back the French position on the bank tax, she added.
Germany is imposing a levy on banks and intends to use it to finance a resolution fund.
Lagarde said that France is concerned that such a fund would encourage banks to take risks and exonerate themselves of their responsibilities.
She said that France wants the European Commission to deepen its work on a financial transactions tax, another issue on which finance ministers were divided Tuesday.
In July, France and Germany wrote a joint letter to the Belgian presidency of the EU saying they will push for the introduction of a financial transaction tax in Europe.
"It is technically feasible, practically difficult, politically desirable and financially unpredictable," Lagarde said.
Some countries are very much against a tax on financial transactions, while others are in favor, including Germany, Austria, and Greece, Lagarde said.
"Other countries say it will not work. Let's make sure that it will not work before we just set it aside for good," Lagarde said.
Before the meeting Tuesday, Swedish finance minister Anders Borg said he opposed the introduction of a transactions tax in the EU.
"We don't want to put the bank tax into a resolution fund, but would prefer it to contribute to the budget of the state, which, in the financial crises, was the resort for the whole system," Lagarde said. The Netherlands and the U.K. also back the French position on the bank tax, she added.
Germany is imposing a levy on banks and intends to use it to finance a resolution fund.
Lagarde said that France is concerned that such a fund would encourage banks to take risks and exonerate themselves of their responsibilities.
She said that France wants the European Commission to deepen its work on a financial transactions tax, another issue on which finance ministers were divided Tuesday.
In July, France and Germany wrote a joint letter to the Belgian presidency of the EU saying they will push for the introduction of a financial transaction tax in Europe.
"It is technically feasible, practically difficult, politically desirable and financially unpredictable," Lagarde said.
Some countries are very much against a tax on financial transactions, while others are in favor, including Germany, Austria, and Greece, Lagarde said.
"Other countries say it will not work. Let's make sure that it will not work before we just set it aside for good," Lagarde said.
Before the meeting Tuesday, Swedish finance minister Anders Borg said he opposed the introduction of a transactions tax in the EU.
DJG/isj
