Wednesday, 31 March 2010

German government decided on bank levy

The German government decided today to introduce a bank levy. During a period of 10 years an amount of approximately €1.2bn shall be raised per year. All banks - i.e. also savings and cooperative banks - will have to pay the fee. However, the bulk of the amount (900bn) should come from the systemically relevant big banks. The revenues would go into a special fund. The fee should not be tax deductable. The government also decided rules which allow for breaking up banks which are "too big to fail" and new rules on the liability for managers.

The French minister of finance, Christine Lagarde, participated in the meeting of the German cabinet and said that France would introduce a similar levy. However, the revenues would not go into a special fund but into the current budget.

The civil society alliance for the Financial Transaction Tax came up with strong critique on the decision:
* The revenue is too small.
* It is only for future crises and not for paying for the burden of the present crisis.
* It has no regulatory effect.

Thus, the reasons for introducing the FTT continue to exist. Therefore the alliance will continue to pressure for the FTT. All three opposition parties in the Bundestag reject the decision.

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