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Thursday, September 8, 2011France: Transaction Tax Could Boost Bailout Fund
Paris, Euro-zone countries could generate between €20 billion and €40 billion ($28.19billion to $56.39 billion) to support their bailout fund by introducing a tax on financial transactions, a French government minister said Thursday.
The European Union plans to press the case for a tax on trading shares and bonds at a summit of the Group of 20 leading economies in November. France and Germany, the euro zone's two largest economies, have already backed the idea. But there is no agreement yet on how to spend the revenues generated. The European Commission—the EU's executive arm, says they should be earmarked for the EU budget.
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Jean Leonetti, France's European affairs minister, said the money could benefit the European Financial Stability Facility, the fund used to keep Ireland and Portugal afloat and now being tapped for a second debt-relief package for Greece.
He said the tax would enable the fund to take preventive action to prop up struggling countries, as has been proposed under a new plan for containing the euro-zone debt crisis. But the base should be as wide and the rate as low as possible, he said.
"We wouldn't weaken European markets and we would bring in between €20 billion and €40 billion," Mr. Leonetti said in an interview airing Saturday on French television channel France 24.
It would be better for all G-20 countries to adopt a financial-transaction tax, but if that doesn't happen, the euro zone should go it alone, he said.
European Central Bank President Jean-Claude Trichet has said such a tax wouldn't work unless it is applied globally. Britain, where London is the region's biggest financial hub, is opposed to the EU going it alone.
On another proposal for ending the crisis, Mr. Leonetti said creating common euro-zone bonds would be premature as debt levels in the currency area are too divergent. But he didn't rule it out in the long term.
Paris, Euro-zone countries could generate between €20 billion and €40 billion ($28.19billion to $56.39 billion) to support their bailout fund by introducing a tax on financial transactions, a French government minister said Thursday.
The European Union plans to press the case for a tax on trading shares and bonds at a summit of the Group of 20 leading economies in November. France and Germany, the euro zone's two largest economies, have already backed the idea. But there is no agreement yet on how to spend the revenues generated. The European Commission—the EU's executive arm, says they should be earmarked for the EU budget.
Continues
Jean Leonetti, France's European affairs minister, said the money could benefit the European Financial Stability Facility, the fund used to keep Ireland and Portugal afloat and now being tapped for a second debt-relief package for Greece.
He said the tax would enable the fund to take preventive action to prop up struggling countries, as has been proposed under a new plan for containing the euro-zone debt crisis. But the base should be as wide and the rate as low as possible, he said.
"We wouldn't weaken European markets and we would bring in between €20 billion and €40 billion," Mr. Leonetti said in an interview airing Saturday on French television channel France 24.
It would be better for all G-20 countries to adopt a financial-transaction tax, but if that doesn't happen, the euro zone should go it alone, he said.
European Central Bank President Jean-Claude Trichet has said such a tax wouldn't work unless it is applied globally. Britain, where London is the region's biggest financial hub, is opposed to the EU going it alone.
On another proposal for ending the crisis, Mr. Leonetti said creating common euro-zone bonds would be premature as debt levels in the currency area are too divergent. But he didn't rule it out in the long term.
