Wednesday

1st Mar 2017

Europe to take bank levy proposal to G20

  • EU leaders will attempt to convince other G20 members next week (Photo: Council)

EU leaders meeting in Brussels on Thursday (17 June) reached a broad agreement to push ahead with a system of national bank levies, one week before the topic is up for debate at a G20 leaders' meeting in Toronto.

"We have a common position of all the European countries, and we are determined to defend it in Toronto," European Council President Herman Van Rompuy told journalists after the one-day summit came to an end.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

However final conclusions indicate that the Czech Republic "reserves the right not to introduce these measures." It is understood that Prague wants to see the exact details of what is going to be taxed before signing up to the scheme, and also harbours concerns that the tax will merely be passed on to customers.

European representatives at the global agenda-setting meeting may also have a tough time convincing countries such as Brazil and China, which were not forced to bail out failing banks, on the merits of the bank levy scheme.

Exact details of the system intended to "ensure burden-sharing and to set incentives to contain systemic risk" still need to be worked out, leaders indicated in the meeting's final conclusions.

Analysts have previously warned that any system that forces banks to put money aside for future bail-outs may actually prove an incentive for risky behaviour.

In another bid to restore confidence in the union's financial system, member states agreed that the results of ongoing stress tests on the region's top banks should be made public.

The tests "must be demanding", Spanish Prime Minister José Luis Rodríguez Zapatero said as Madrid prepares to wrap up its six-month rotating presidency. "We need to look at the most stringent tests possible because it will provide the most credibility."

The embattled Spanish leader who defended his government's unpopular package of labour market reforms, announced on Wednesday, said talk of Madrid calling on the eurozone's financial support mechanism was "just rumours", adding that a meeting with IMF director Dominique Strauss-Kahn on Friday was simply to explain the recent reforms.

France and Germany failed to win enough support for their financial transaction tax proposal. "Some in the council are not totally enthusiastic about it," French President Nicolas Sarkozy told a briefing afterwards, adding that the two countries were "ready to put it in place, even if other European governments have problems with it."

Cameron

In his first visit to Brussels as UK Prime Minister, Conservative leader David Cameron rammed home the message that tougher penalties for countries that breach the EU's budgetary rules should not apply to non-eurozone states.

"Our bottom line is that I do not support a transfer of power to Brussels," said the Tory leader, adding that single currency members were free to instate any reforms they felt necessary. "We want a strong eurozone to be a good customer for UK exports," he told journalists.

Plans for a 'peer review' of member state budgets before national parliaments "take account of national budgetary procedures", say final conclusions, another move to appease British concerns.

Language on increased scrutiny of member state debt levels leaves open the possibility of factoring in private sector debt into the equation, a key Italian demand.

In a clear indication that the commission is determined not to cede its right of initiative to an increasingly forceful European Council under Mr Van Rompuy, commission chief Jose Manuel Barroso said the body would come forward with further details on increased budgetary discipline on 30 June.

This will be followed up with a first set of legislative proposals in September, one month before Mr Van Rompuy's taskforce on economic governance produces its report. "There is a community process we have to move forward," one EU official told this website.

EU leaders also signed off on the bloc's 10-year strategy for sustainable growth, known as Europe 2020, prompting Mr Barroso to express his complete satisfaction, despite the plans frequently criticised lack of strong implementation tools.

MEPs demand stronger rules against tax evasion

MEPs in the civil liberties and economic committees voted in favour of toughening up EU wide rules on tax evasion, as they gear up for institutional talks in March on the EU's anti-money laundering directive.

Greece and creditors break bailout deadlock

Athens agreed on budget cuts worth up to €3.6 billion and extracted some concessions from creditors, but the IMF warned the package might not be enough.

EU ready to challenge US border tax

The EU is willing to fight any attempt by the Trump administration to impose border tax on imports, says jobs commissioner Jyrki Katainen.

Stakeholders' Highlights

  1. Malta EU 20172018 European Year of Cultural Heritage Will Celebrate European History and Values
  2. UNICEFA Deadly Journey for Children: The Migration Route From North Africa to Europe
  3. International Partnership for Human RightsFreedom of Association and Expression Under Threat in Kazakhstan
  4. QS World MBA TourMeet with Leading International Business Schools in Brussels on March 6th
  5. EURORDISJoin Rare Disease Day and Help Advocate for More Research on Rare Diseases
  6. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  7. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  8. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  9. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  10. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  11. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow. Join Us on 23 March
  12. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen