Merkel leads calls for global financial tax as markets continue to slide

David Charter
The Times [UK]
20 May 2010

Angela Merkel led calls for an international financial tax today as a “signal of strength” as stock markets continued to slump from a lack of confidence in the euro.

The German Chancellor, whose apocalyptic warnings about the single currency yesterday started the latest slide in European shares, insisted that new regulations would demonstrate that politicians had a grip on the febrile financial markets.

After touching 5,000.76 points today — a new low for the year – the FTSE 100 rallied to close down 85 points, or 1.65 per cent, at 5,073.13, while Europe experienced bigger falls of 2.5 per cent in Berlin and 2.9 per cent in Paris. The Dow Jones Industrial Average lost 2.41 per cent while the S&P 500 dropped 1.77 per cent.

Ms Merkel was speaking before talks involving EU finance ministers in Brussels tomorrow. They will discuss measures to shore up the euro and preparations for the G20 summit next month, in which Germany and France want to deliver on promises of tough regulation…

…The German Chancellor told a conference in Berlin that, at the height of the global financial crisis in 2008 when governments had to plough billions into propping up banks and other financial institutions, the G20 nations agreed that “every product, every actor and every financial centre must be regulated — we promised people that”.

She added: “Now, after one-and-a-half or two years, people are saying: ‘what came of that?’. At some point we have to provide the proof and say ‘come here, we’ve done it’. This point shouldn’t be too far away.

“My appeal is: let us send a common signal of strength at the G20 summit.”

Wolfgang Schäuble, the German Finance Minister, warned that if countries such as Australia or Japan resisted a global financial tax then Europe must be prepared to go it alone. He also threw down the gauntlet to the new British Government if it tried to stand in the way.

“If we can get that through on the global level, then good. That would be ideal,” he told a German parliamentary committee…

The article continues at The Times.

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