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EU finance ministers debate finance tax

GABRIELE STEINHAUSER

Published: Saturday, Sept. 17 2011 2:55 a.m. MDT

Eurogroup president Jean-Claude Juncker, right, and German Finance Minister Wolfgang Schaeuble speak after a group photo session during an informal meeting of the Economic and Financial Affairs Council (ECOFIN) in Wroclaw, Poland on Friday, Sept. 16, 2011. Rescue partners will decide in October on a crucial payout of bailout loan money to bankruptcy-threatened Greece. Juncker and other eurozone finance ministers were discussing Europe's financial crisis at an informal meeting in Wroclaw.

Czarek Sokolowski, Associated Press

WROCLAW, Poland — European Union finance ministers are debating a tax on financial transactions that could raise money for the EU and make banks share bailout burdens with taxpayers.

The tax would take a tiny fraction from a wide range of financial dealings and the EU wants use the money to relieve states' membership contributions to the institution.

It could also help repay governments for some of the billions of euros in taxpayer money they had to pour into banks that needed to be bailed out out during the 2007-2009 financial crisis because they had made risky investments that went sour. Some also argue it could reduce volatility on financial markets.

The EU has been pushing the idea since it came up during global summits held in 2009 to combat the financial crisis. France and Germany support the idea but Britain is opposed because London is a major financial center. The U.S. also opposes such a tax, and many say it won't work unless imposed globally because banks will simply move transactions to jurisdictions where there is no tax.

Belgian Finance Minister Didier Reynders said ahead of Saturday's meeting of finance ministers in Wroclaw, Poland, that if a tax can't be imposed in all 27 EU member countries, then it could be discussed for 17 that use the euro. That group doesn't include Britain.

"We are having a discussion about stabilization in the eurozone and the world, and I am sure we need to put on the table the financial transaction tax," he said. "It's important not only to finance the budget but to stabilize the flows on the capital markets."

"Yes, it's better to organize something of the financial transaction at the world wide level but if it's impossible maybe we will do it in the European Union, if it's impossible for the entire European Union in the eurozone."

The European Commission says it will have a concrete proposal next month that would then have to find approval among member governments and pass the European Parliament.

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