Eurozone wants to tax banks: report

18th July 2011, Comments 0 comments

The 17 Eurozone countries want to impose a tax on banks to involve the private sector in paying for the rescue of indebted Greece, according to German daily Die Welt.

The tax would target even banks "not directly involved in Greece", the newspaper wrote Monday, citing highly-placed diplomatic sources involved in the talks.

The plan also envisages that the private banking sector will "contribute to the repurchase of Greek bonds," it wrote, without giving further details.

Eurozone countries are set to meet in Brussels Thursday for an emergency summit to stop Greece toppling into default and dragging bigger euro economies into deeper trouble.

But Die Welt said influential individuals at the International Monetary Fund were against the institution's participation in a new Greek bailout.

"Many people at the IMF have had enough" and seriously doubt that Greece can pull off the economic reforms required for long-term stability, the newspaper quotes European diplomats as saying.

Die Welt recalled that Germany was to slap a tax on banking profits later this year to boost a fund meant to prop up financial institutions in case of a new economic crisis.

The tax on German banks was expected to raise about a billion euros ($1.4 billion) per year towards the fund expected to total 70 billion euros.

The EU and IMF bailed out Greece in May 2010 with a package worth 110 billion euros in exchange for a series of unpopular austerity measures to stabilise its public finances.

The country is still in serious difficulty and needs another bailout worth about the same amount. Its debt has exploded and market hostility has kept it from raising fresh loans.

© 2011 AFP

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