Oct. 15 (Bloomberg) -- German Chancellor Angela Merkel criticized governments including President Barack Obama’s administration for refusing to make the financial sector pay for the global financial crisis, and vowed to push for a financial transaction tax until it applies at least in Europe.
“It’s not acceptable that especially those outside the euro region, who are time and again pushing us to take broad- based action to manage the debt crisis, are at the same time flatly refusing to impose a financial transactions tax,” Merkel said at a labor union congress in the city of Karlsruhe yesterday. “I think this is not okay. We want, and we have to make, financial market participants contribute to the costs of crisis management.”
Merkel said she will continue to push for a levy because “reasonable regulation” is needed for economic confidence to return. Trust in the reliability and competence of many financial market participants has been damaged, she said. Her comments were published by the government press office.
A European Commission proposal for a financial transactions tax, set to take effect in 2014 and raise about 57 billion euros ($79.1 billion) a year, would set minimum tax rates for financial transactions throughout the 27-nation the European Union, the commission said on Sept. 28. European Central Bank President Jean-Claude Trichet has said a levy on financial transactions should be global.
Leaders from the world’s 20 biggest economies will meet in Cannes, France on Nov. 3-4 to discuss the tax and other topics. Canadian Finance Minister Jim Flaherty before a preparatory meeting in Paris on Oct. 13 renewed his country’s refusal to back a global transactions tax.
“We will talk intensively about financial market regulation,” German Finance Minister Wolfgang Schaeuble said yesterday, also before the Paris meeting. “We have to fight the causes of this crisis, and the main reasons of the crisis are a lack of financial market regulation and an abundance of government deficits and debt.”
Obama and Merkel spoke yesterday about the “evolving financial situation in the euro zone,” White House press secretary Jay Carney said. U.S. Treasury Secretary Timothy Geithner flew to Wroclaw, Poland, for an unprecedented 10-hour visit to warn against “catastrophic risks” from the bloc’s debt crisis.
--With assistance from Theophilos Argitis in Paris. Editors: Matthew Brockett, Kim McLaughlin
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