Sound The Trumpet : EU to Call for Global Financial Levy

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“EU to Call for Global Financial Levy”
by AOIFE WHITE The Associated Press
December 11th, 2009

BRUSSELS - European Union leaders will call for a global financial transaction levy in the hopes it could help buffer against future market crises, according to a draft statement published Friday.

British Prime Minister Gordon Brown said there was "growing support" for such a levy as well as Britain's plans for a one-off tax of 50 percent for all bonuses of more than more than 25,000 pounds ($40,800.)

France says it will follow suit-and called on others to join them. French President Nicolas Sarkozy said, "We want and expect others to do the same because we are in a globalized world."

"It would be very difficult for Gordon Brown to say he was the only one to do it. It would have been impossible to say I was the only one to do it, so we do it together," Sarkozy told reporters.

Sarkozy's warm words of support for Brown are a striking contrast to recent comments where he claimed victory for France over Anglo-Saxon economics in nabbing a key EU financial services post for a Frenchman, Michel Barnier.

In a draft statement, the EU's 27 leaders backed limits on bankers' pay, saying that the financial sector should "immediately implement sound compensation practices" and that governments should consider "short-term options"-such as a bonus tax.

They also said a global tax on financial transactions should be one of several options that the International Monetary Fund should investigate when it puts forward plans on how the world should respond to the financial crisis.

In the statement they will finalize later Friday, they say it is important for financial institutions to make a contribution to "the society they serve" and to make sure the public "benefits in good times and is protected from risk."

Brown last month called on the Group of 20 rich and emerging nations to consider a tax on financial transactions that would pay for a global fund to rescue banks in future. France has talked about using such a tax to help poor countries fight climate change.

U.S. Treasury Secretary Tim Geithner was quick to shoot the idea down, saying the United States was not keen to support such a levy even as it sought ways to shield taxpayers from bailing out the financial system again.

Supporters of measures such as a so-called Tobin tax-a flat tax on currency transactions named after Nobel Prize laureate James Tobin-say the money would protect countries from spillovers of financial crises. Critics argue the tax would simply dry up world financial flows.

EU officials such as European Central Bank President Jean-Claude Trichet and the EU's economy commissioner Joaquin Almunia are skeptical about how such a tax would work-because businesses could flee Europe if it were only charged here.

But Sarkozy and German Chancellor Angela Merkel say they support the concept.

In the draft statement, EU leaders are also suggesting that the IMF should look into insurance fees, resolution funds and contingent capital requirements.

Art's Commentary....This is the beginning of World Government.

Looking for His glorious appearing! Titus 2:13