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Europe should tax banks whatever G20 decides: commissioner

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Europe should tax its banks in order to build up an emergency bail-out fund whatever other major economies decide at this weekend’s G20 summit, EU finance commissioner Michel Barnier said on Tuesday.

Europe and the United States are pushing for a levy on banks to raise funds to support collapsing institutions and prevent a repeat of recent financial disasters, but other economic powers are opposed to the idea.

“We should put it in place whatever happens, whatever the others decide,” Barnier told reporters in Paris, adding that European governments were already united behind the principle of some kind of tax.

Barnier said proceeds should not be used to help states pay down their own deficits — as ministers in some countries, notably his native France, have argued — but put aside as an insurance against future bank failures.

France, Britain, Germany and the United States have publicly urged their G20 partners to adopt a tax, but Russia, China, India, Australia and summit hosts Canada oppose this and no decision is expected this week.

Paris, June 22, 2010 (AFP)