Franco-German accord on taxing the banks

Germany and France have agreed on a new bank tax to help pay for all the public money the industry has received in bail-out funds.

The accord came in Berlin where the French Finance Minister Christine Lagarde became the first member of a foreign government to take part in a German cabinet meeting.

Both countries want to see the new bank levy introduced worldwide.

Germany’s Finance Minister Wolfgang Schäuble said: “The new measures on financial market regulation that the government adopted today are embedded in a whole package of measures that we have agreed on the international, G-20, European, and national level.”

Lagarde said that a bank tax does not necessarily rule out a broader charge on all financial transactions – a measure already rejected by America and Canada.

But she said: “I think we’re agreed that the amount and type of tax must be determined according to the risk posed by the individual financial institutions.”

The new found Franco-German untity – after several difficult weeks discussing aid for Greece – raises the possibility that the G-20 could agree a similar bank levy at their summit in June.

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