BRUSSELS (MNI) – European Union finance ministers will discuss new
ways of raising revenue – including financial sector levies and carbon
taxes – to plug their budget deficits when they meeting informally in
Madrid April 15-17, the European Commission said Tuesday.

The ministers will discuss a working document, prepared by the EU’s
executive arm, which outlines several new ways of raising revenue, the
Commission said.

Governments increased spending during the financial crisis to try
and ward off the worst of the recession. Tax income also fell during
that period, leaving most EU countries with large budget deficits which
have been the subject of increasing concern in recent months,
particularly in light of the Greek debt crisis.

The Commission said its analysis “shows that there are some
instruments, notably certain forms of contributions from the financial
system and the pricing of carbon emissions, with which a significant
‘double dividend’ of both raising revenues and improving market
efficiency and stability could be reaped.”

It said that “schemes aimed at pricing leverage and risk-taking in
the financial sector could raise substantial revenues while limiting
undesirable behaviour by financial institutions and could be
administered at a reasonable cost.”

“The idea is to get some common ideas, common guidelines at the
European level,” ahead of the Group of 20 meeting, Commission
spokesperson Amelia Torres said. She said the International Monetary
Fund was working on similar ideas and would also produce a paper.

The Commission document said the schemes it was proposing “would
benefit from an internationally coordinated approach, in particular
within the G-20,” but that an EU solution could be explored if that
wasn’t possible.

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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