Tuesday, June 15, 2010

Bank tax redux

Interesting development as the G20 approaches: "Bank tax must go ahead, say Merkel and Sarkozy." The resolution of the G20 finance ministers on this issue, that each nation could go its own way on bank taxes doesn't seem to have taken with France and Germany. They seem to be newly resolved to talk it up. And you know, this might prove an inconvenient wrinkle for a certain someone's big G20 summit agenda...
German Chancellor Angela Merkel and French President Nicolas Sarkozy have renewed calls for a global bank levy and a financial transaction tax.

The two leaders said they would call for the measures in a joint letter to the president of the G20 ahead of a summit later this month.

G20 finance ministers had distanced themselves from bank taxes at a meeting earlier this month.
That president of the G20 would be Harper. They must have missed the part about the big win by PM Harper on this issue and his putting the kibosh on it as a G20 group thing. The Soudas spin must not be capable of traversing the Atlantic, go figure.

The EU is behind them:
According to the Reuters news agency, European Union leaders will agree in principle on Thursday to introduce a levy on financial institutions, after which the details will be worked out by the European Commission.

"The European Council agrees that a levy on financial institutions should be introduced to ensure that they contribute to the cost of crises," draft conclusions of a council meeting said, Reuters reported.
And this guy thinks it could lead to renewed interest among other nations:
Still, an alliance of continental Europe’s two biggest economies will test Canada’s sway with other members of the G20. So far, Mr. Flaherty’s argument that a tax is an unfair punishment of countries that stayed out of trouble has been enough to muster a posse that includes countries such as Australia, Japan and Russia. But French and German support for a financial transactions tax changes the debate a little. In theory, it could be applied to the kinds of risky trades that the G20 is committed to stopping. In reality, it might not work, but would certainly raise considerable revenue. At a time when deficits are bulging and environmental and aid programs are going unfunded, a financial transactions tax could entice some governments -- especially if a couple of the world’s biggest economies are doing it.
Looks to be shaping up as an interesting test of Harper's leadership, whether the one note he's been sounding will hold now that it looks like key nations are serving notice that they intend to push on regardless and as an advocacy matter within the G20. Developing, as they say.