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In a speech to the German Parliament today, Chancellor Angela Merkel urged the EU to introduce a new tax on financial markets. She said the EU would move ahead if the G20 failed to do so at its meeting in June.

Merkel clearly supported the idea of a financial transaction tax, as opposed to a financial activity tax, which would be levied on purchases or sales of shares or other financial products. Handelsblatt quotes government sources saying that Finance Minister Wolfgang Schäuble is ready to move forward with proposals now, rather than wait until the autumn, as EU Commissioner Michel Barnier is planning. Die Welt notes that the FDP has now given up his opposition to the proposal and the CSU is the driver behind it.

La Tribune reports that the two main political groups within the European Parliament have drafted a joint report also recommending the introduction of a financial transaction tax, and suggesting that any monies raised from it be used to fund the EU budget, giving it an autonomous income supply. French MEP Alain Lamassoure, co-rapporteur for the EPP group, is quoted saying: “On May 9 we drew together our borrowing capabilities. Let’s take a further step. Let’s join our budgetary means…Why not introduce a European tax to fund the European budget?” The draft report will now be submitted to the EP’s ad hoc Committee on the Financial Crisis.

Source: Open Europe, Welt, Handelsblatt, La Tribune

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