Merkel says will campaign for market tax at G20

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Chancellor Angela Merkel said on Thursday she would lead a campaign for a tax on financial markets at the next summit of the Group of 20 major economies in June and called for international support.

Speaking at a conference on financial regulation here, Merkel said: "We have now stated that we will campaign for a tax on the financial markets and we will campaign for that at our (G20) summit in Canada."

Hinting at likely difficult negotiations on such a controversial topic, she quipped: "This is something that won't find agreement at our first dinner ... but I do not think it would ruin markets if we had international taxation."

With the focus firmly on the stability of the euro area, Merkel called on the international community to back this idea "even if your countries have not been all that affected" by the recent crisis.

Merkel was speaking at a conference to discuss financial regulation, bringing together ministers and central bank officials from around the world and experts from bodies such as the International Monetary Fund.

In a wide-ranging speech on financial regulation, Merkel also stressed the importance of tightening the fiscal rules governing the euro area, the breech of which has contributed to the current crisis.

"If you have a currency like the euro ... then you need stricter rules than other governments that just decide for their own currency," she said.

"We need to tighten up the Stability and Growth Pact," she insisted, ahead of a meeting of EU finance ministers and the EU president Herman van Rompuy to discuss the pact Friday in Brussels.

She also called for a European version of the rating agencies which have been accused of exacerbating the crisis.

"I would be in favour of introducing a European rating agency which would act as a competitor to other rating agencies on a level playing field," she said.

© 2010 AFP

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