BEIJING (MNI) – Some European officials are proposing a tax on
eurozone banks to pay a portion of the financial rescue package for
Greece, the Financial Times reported Wednesday.
The plan, which is seen raising some E30 billion, is expected to be
discussed at the emergency European summit on Thursday.
Advocates of the plan say it would help satisfy German and Dutch
demands that private holders of Greek bonds contribute to the new E115
billion rescue plan. Such a contribution could also avoid a formal
default on Greek debt, they argue.
Banking groups indicated opposition to the plan, which they say
scape-goats banks for Greece’s troubles. Moreover, critics argued that
the plan was unworkable because it would require all eurozone countries
to pass new tax legislation.
Both Germany and the Netherlands are still insisting that other
options for private bondholder participation — including a
government-funded bond buy-back program, a German-backed plan for bond
swaps, and a French plan for bond rollovers — also be considered at the
summit, the FT reported.
On Tuesday, German Chancellor Angela Merkel warned against
expectations that the Eurozone leaders at their summit on Thursday will
be able to fully solve the sovereign debt crisis.
Speaking at a joint press conference with Russian President Dmitry
Medvedev in Berlin, Merkel said there is now a desire to end the debt
crisis with a single large step.
“But those who really assume political responsibility … know that
there won’t be such a spectacular single step, also not on Thursday,”
the chancellor reasoned.
“It is solely about creating a controlled and managed process of
consecutive steps and measures,” she explained. “A process which serves
only one outstanding goal, namely to get to the root of the problem,
which means dealing with the reduction of debt and increasing
competitiveness.”
beijing@marketnews.com
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