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Merkel still hoping for financial transactions tax

Merkel still hoping for financial transactions tax
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Germany and Austria have said they want all the members of the euro zone to back a tax on financial transactions.

The money raised would be used in any future financial crises rather than taxpayer cash going to bailout banks.

However many countries using the euro do not like the idea, even though German Chancellor Angela Merkel and her Austrian counterpart Werner Faymann pushed it as part of what is needed to stabilise the common currency.

After the two leaders met in Berlin, Merkel said: “We have, of course, also discussed ways of improving the Stability and Growth Pact. And we both totally agree that this has to be implemented rapidly.”

After the idea of a financial transactions tax was not welcomed globally and a recent G20 gathering and Germany has focused its efforts on implementation on a European level, noting it would not introduce one at a level smaller than the euro zone.

Faymann had previously said Berlin needed to throw more of its weight behind the tax. “The tax is a question of justice,” he told reporters on Wednesday. “It is morally right and financial right to bring transaction tax into life.”

A few hours before Merkel and Faymann spoke the German cabinet approved a proposal for a levy on German banks to be used specifically to fund future bailouts.

Depending on the bank’s circumstances, it would be up to 15 percent of its full-year profit. The plan still requires parliamentary approval.