Gonzi insists on ‘no’ to transaction tax, EU leaders discuss Greece, Spain crisis

Prime Minister Lawrence Gonzi has met with new French President Francois Hollande in Brussels as European Union leaders discussed broad measures to control the fallout from a winding up or restructuring of bad banks.

Prime Minister Lawrence Gonzi (right) with French President Francois Hollande shake hands during the informal European Summit in Brussels.
Prime Minister Lawrence Gonzi (right) with French President Francois Hollande shake hands during the informal European Summit in Brussels.

Prime Minister Lawrence Gonzi has reiterated Malta's opposition to the introduction of a blanket transaction tax by Europe, which would jeopardise the island's competitiveness in the financial services sector.

British Prime Minister David Cameron has also confirmed the United Kingdom's opposition to the tax.

At the heart of tonight's informal EU summit in Brussels, EU leaders discussed proposals from the European Commission for a legal framework to wind up or reorganise insolvent banks, so as to avoid a repeat of the multi-trillion-euro taxpayer bailouts during the financial crisis.

The issue of bank resolution has risen to the top of the agenda as concerns grow about the impact if Greece were to leave the currency zone, and as problems deepen in Spain's large banking sector, which is laden with bad property debts.

Leaders were close to agreeing on the setting up of a task force - possibly to be headed by EU Commission President Jose' Manuel Durrao Barroso - which would look in more detail about bank resolution issues, and to examine related steps such as what legislation and fiscal steps would be necessary to lay the ground for euro zone bonds.

EU leaders will formally decide on this proposal next month as they meet again, while diplomatic sources say that alot of work will be needed until then to convince German Chancellor Angela Merkel on the need for the Task Force.

Meanwhile, the European Central Bank wants the proposals to include a pan-euro-zone resolution fund for larger, systemically important banks, with ECB President Mario Draghi calling for a debt agency for euro bonds.

Some EU leaders have asked to make it possible for the euro zone's bailout funds to directly recapitalise banks, rather than having to lend to the sovereign which then lends to the banking sector.

The proposal for a central euro-zone fund to neutralise any knock-on effects from the closure or overhaul of a struggling bank is one of the most contested issues in the debate about winding up lenders.

Any such fund would also require giving further powers of enforcement to European authorities such as EU regulator, the European Banking Authority, or the European Central Bank.

 

 

More in National
avatar
Would the regular dyed-in-the-wool PN apologists (or any other bright spark for that matter) please explain what is happening? We were promised €100M a year incoming, not multiple millions outgoing. Ahoy there! Anyone on board? Or are they all drunk from the EU's very good life?
avatar
In the picture, PM is explaining what he said last Sunday against Socialism!!!!!!!!!
avatar
Did he tell Francios Hollande that he has no majority in the Maltese Parliament may I ask ?. It is very interesting to know.
avatar
Dalwaqt jibda jikkopja li Hollande issa li ma jistax jikkopja lil Sarkozy; nahseb li qed itih parir kif ghandu jibni Parlament minghajr ma jkollok flus ghalih!
avatar
Minn jaf kif kien imwerwer Dr.Gonzi fil prezenza tas SOCJALIST Hollande:) Gimgha ilu ibezza lin nies mis-socjalizmu u illum jiekol il 'kirxa' maghhom.
avatar
Tiftakru meta ghax Dr. Joseph Muscat kien qal, li jekk ikun hemm bzonn gvarn laburista jkun lest li juza l-veto fl-UE jekk l.interess nazzjonali jkun jirrekjedi dan ? Kemm kienu ghajruh li b'hekk jizola lill-pajjizna !Issa Gonzi qieghed jghid (issa naraw x'jaghmel !) l-istess haga ! Mid-dehra induna li dak li qal Joseph Muscat HUWA S-SEWWA !!!!!!!!!!!!!!!!!!!
avatar
Joseph MELI
All the posturing and "insisting" in the world wont prevent the school-ground bullies (that are the unelected and undemocratic EU hierachy) from getting their own way and ultimately, after this dog and pony show, Gonzi and Fenech will simply roll over,pander and kowtow to whatever they want.
avatar
Prime Minister Lawrence Gonzi has met with new French President Francois Hollande in Brussels -- hekk qed jghid ir-rapport taghkom hawn fuq ... imma jien nghid il-verita ma tantx nemminkom li gonzipn iltaqa' ma' francois hollande .... dak socjalist, dak mhux ta' min jiccappas mieghu, dak mill-aghar, dak ma jaf xejn, dak jista' jimpestak, dak ma ghandu ebda vizjoni, dak iwasslek ghall-bahh, dak .... sieheb joseph muscat!!!!

Get access to the real stories first with the digital edition

Subscribe