Eurozone may adopt finance tax without EU backing

2011-10-31 18:23:35

Eurozone members could introduce a financial transaction tax even if other EU countries were opposed, German Finance Minister Wolfgang Schaeuble told the Financial Times in an interview published Monday.

Schaeuble said he backed using the 17-member eurozone as a testing ground for the levy, which is designed to restrict speculative trading, even though Britain and its vast financial sector are firmly against it.

Schaeuble said he respected the arguments of Britain, a member of the European Union but not of the eurozone.

He hoped it would be convinced to adopt the tax if it proved to be a success within the eurozone.

Schaeuble hoped an agreement could be reached at this week's G20 meeting in Cannes, France, before the proposal was presented to EU finance ministers on November 8.

The minister also said that the current debt crisis was an opportunity to push for closer fiscal union within the eurozone.

Schaeuble told the FT that the bloc needed "stronger institutions to oversee the implementation of a commonly agreed finance policy.

"That is what I call fiscal union," he added. "We need to take big steps to get that done."

Britain is also worried about closer fiscal union within the zone, fearing it may be left out of key policy-making decisions.

Despite last week's deal to rescue the eurozone from immediate danger, many economists fear that the sovereign debt crisis may have some distance to run, with Italy's situation a major cause for concern.

Schauble urged Italy's leaders to live up to their own responsibilities and solve its own problems.

Creditors last week agreed to take a 50-percent hit on outstanding Greek debt.

But in an interview with the BBC aired on Monday European Central Bank chief Jean-Claude Trichet has warned other European countries in financial difficulties not expect such generous terms in the event of a bailout.

"Greece was Greece and everybody recognises that it is a special case," he said.