Bank tax could pay for new euro stability fund-EU report

BRUSSELS, Jan 12 (BestGrowthStock) – A tax on banks to raise 50
billion euros could fund the new European Stability Mechanism
(ESM) to protect countries in financial trouble, according to an
internal report from the EU’s executive for euro zone countries.

In the European Commission’s internal report seen by Reuters
on Wednesday, officials recommend different ways of paying for a
new stability mechanism to replace the current European
Financial Stability Facility (EFSF) in 2013.

Flagging the need for a “critical mass of paid-in capital”,
officials suggest that the financial sector be called on to fund
this stockpile, because the sector benefits from the fund’s
existence.

“It is in the interest of the financial sector to contribute
to the existence of an ultimate safety net, which protects
capacity of public authorities to rescue them,” officials write
in the report.

“A one-off tax of 0.2 percent on euro area bank assets would
allow +/- 50 billion euros to be raised,” they say in the
document, which was presented to euro zone deputy finance
ministers at a preparatory meeting on Monday, ahead of the
Eurogroup gathering of finance ministers next Monday.