EU ministers bid to end row over banking taxes

* Finance ministers meet to negotiate financial reform

* Austria’s Proell: questions remain over transaction tax

* Sweden warns on tax on deals after own scheme backfired

By John O’Donnell

BRUSSELS, Sept 7 (BestGrowthStock) – European Union finance
ministers made a fresh attempt on Tuesday to settle their
differences over taxation of banks and trading as they prepared
to approve the creation of new financial watchdogs.

Three years after the start of a banking and economic
crisis, Europe is still grappling with the reform of its
financial sector, and it remains unclear how it will govern its
banks and financial markets.

On Tuesday, finance ministers from around the region are
expected to wave through the creation of three new watchdogs to
monitor banks, insurers and financial markets, a more
far-reaching change than any being considered in Washington.
[ID:nLDE6821GU]

But they remain bogged down over how to impose levies on
banks. Although many politicians want to tax banks more, they
disagree chiefly over what should be done with the money.

European leaders are also divided over whether to start
imposing a tax on financial transactions such as the buying and
selling of shares. [ID:nLDE6851E4]

These divisions, coupled with a reluctance internationally
to follow suit, could scupper any agreement on such a tax.

On Tuesday, Austria’s finance minister pledged support for
both a bank levy and a tax on financial deals, but acknowledged
there was disagreement on the matter.

“There are a lot of questions to be cleared up,” Josef
Proell said regarding the idea of a transaction tax. “It is
important that as many countries — if possible all — in Europe
take part.”

Sweden, whose own attempt to tax financial deals backfired
when trading moved abroad, warned at the meeting against
repeating that mistake.

“We don’t want to see a new transaction tax,” Finance
Minister Anders Borg told reporters. “The banking levy is more
suitable as it would bring us revenue to deal with future
crises.”

To read a Q+A on how EU watchdogs will change the policing
of banks, double click on [ID:nLDE6821GU]

To read a Q+A on whether the EU will agree on taxing banks
more after the crisis, double click on [ID:nLDE6851E4]

EU ministers bid to end row over banking taxes