IRISH VIEW:TAOISEACH BRIAN Cowen indicated that he was leaning in favour of the Government receiving revenue from new levies on the Irish banks as he backed EU plans to impose charges on the financial sector to insure against any future bailouts.
As the EU summit finished last evening in Brussels, the Taoiseach said he was reassured by what he heard about the Spanish economy from prime minister José Luís Zapatero and supported plans to publish the results of financial stress-tests on European banks.
Although Irish officials had expressed reservations about the cumulative impact of new regulatory measures on bank capital and any resulting need for more capital, Mr Cowen was forthright in support of new charges on the bank sector. He did not say, however, whether he favoured a levy on bank profits, balance sheets or on transactions.
“I think is important, given that taxpayers in every country have had to involve themselves in recapitalising the banks, that obviously there has to be procedures put in place whereby banks would make a contribution back to the wider economy and to national exchequers in due course.”
The Taoiseach’s suggestion that proceeds from such taxes should go into national coffers aligns him with British premier David Cameron and French president Nicolas Sarkozy, who are resisting an EU Commission plan to channel the proceeds of the levies into a tailored European fund.
“That idea of a contribution from banks is something that all governments are anxious to see,” said Mr Cowen. Such a contribution should be consistent with the “proper running” of the economy, he added.
“Based on the guarantee that we put in place, we’ve been earning up to the guts of a billion euros as a charge . . . by the end of September of this year on the banks, so that’s a similar mechanism, if you like, to the question of banking levies and taxes or systems of banking levies or taxes.”
On bank stress-test results, Mr Cowen said publication in the US fostered confidence and reassurance to financial institutions.
“I believe a similar exercise euro-wide will be of assistance in making sure that there is a proper understanding and comprehension by the markets based on the accurate information that would flow.” Asked if aggregated results from the top 15 institutions would be published, he said: “The stress testing will be more wide than that because we want to provide to the fullest extent possible reassurance to the markets as to the factual position.
“That will assist in making sure that a lot of this volatility is eliminated as quickly as possible.”
While three European newspapers have reported that the Spanish authorities are preparing to apply for special financial aid from the EU, Mr Cowen said there had been no such application and little talk at the summit about Spain’s position. “I’d refer everyone to the Spanish government, setting out their position . . . I’m very reassured by what prime minister Zapatero had to say.”
