BRUSSELS (MNI) – European finance ministers discussed the
implementation of a banking levy and a financial transaction tax at
their meeting on Tuesday, but didn’t draw any firm conclusions.

The two subjects will be the main topics of discussion at an
informal meeting of finance ministers and central bankers taking place
in Brussels on September 30 and October 1. The Belgian delegation, which
currently holds the presidency of the European Union, hopes those issues
can be advanced then.

“I must confess there is no unanimity at the moment on the
details,” said Belgian Finance Minister Didier Reynders, who chaired the
meeting.

Reynders told reporters there was no unanimity on the idea of a
financial transaction tax but that there was general agreement on the
idea of a bank levy to raise funds for future crises.

The bank levy idea is popular among finance ministers, who are keen
to ensure that taxpayers don’t foot the bill for another round of
banking sector bailouts.

But the ministers are divided over how best to raise the tax and
what do do with the money once it’s been raised.

European Commissioner for Internal Markets, Michel Barnier, wants
the national levies to be used to set up resolution funds which would be
set aside for use in times of crisis.

Others say they should be allowed to offset the cash accumulated
against their national budgets.

“We’re very clear,” UK Chancellor George Osborne told reporters
after the meeting. “It is up to national governments to decide what
should happen to those revenues.”

He said he had made it clear in the meeting that the UK doesn’t
support an EU-wide resolution fund, something the Commission was pushing
for earlier this year.

On the separate idea of a financial transaction tax, Reynders said
there was “no unanimity” among the finance ministers.

Osborne told reporters that he thought it would be difficult to
make such an idea work in practice and that he thought the discussion,
which has been running for some time, would be ongoing for many decades
to come.

“Capital can move very quickly outside the EU,” he warned.

The Belgian Presidency of the EU is keen to get a consensus on a
transaction tax of some sort, and European Commissioner for Taxation
Algirdas Semeta is preparing a proposal on it for October, to give the
finance ministers a better idea of the risks involved and the options
available, he said.

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

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