PARIS — U.S. President Barack Obama’s proposal for a direct tax on banks to pay for future bailouts is gathering momentum in Europe, with Germany set to move ahead with its own levy and Britain expected to endorse a similar measure ahead of the Group of 20 meeting next month.
Angela Merkel, the German chancellor, at a meeting of party leaders and delegates in Berlin on Monday. Ms. Merkel's governing coalition has agreed to introduce a levy on lenders as "a kind of insurance," to help fund future bank bailouts.
The developments leave France as one of the few major Western economies yet to endorse the idea of such a levy.
But while Mr. Obama and Chancellor Angela Merkel’s government seem determined to press ahead, analysts and officials cautioned that a globally coordinated approach would be preferable to deter banks from shifting operations to countries without the extra tax, potentially offsetting its effectiveness.
They also stressed that U.S. lawmakers could yet block Washington’s plans to tax banks directly.
A spokeswoman for the German Finance Ministry said Monday that Berlin is still hoping for a “common framework” to be agreed on future financial rescues at the European and global level.
But at weekend meetings, Ms. Merkel’s governing coalition agreed to introduce a levy on lenders as “a kind of insurance,” to help fund future bank bailouts, according to the spokeswoman, who declined to be quoted by name in line with government policy.
More money would be levied on banks with high-risk business, she said, to ensure that the policy worked to counter speculative activity by banks.
The Cabinet is working on details and aims to fix the size of the tax and other details at a meeting on March 31, she said, adding that Germany is willing to proceed with its own plans even if a global agreement is not forthcoming.
In Britain, Alistair Darling, the chancellor of the Exchequer, was expected to endorse a similar tax in his budget proposals being unveiled on Wednesday, according to a person with direct knowledge of the plan.
A spokesman for the British Treasury noted that Prime Minister Gordon Brown was an early proponent of such a tax. But he added, “Any proposal needs to be implemented by all responsible financial centers to be effective.”
The leader of the opposition Conservatives, who hold a slight edge in polls just weeks before a general election, came out even stronger over the weekend.
“We had the biggest bank bail-out in the world, we can’t just carry on as if nothing happened,” David Cameron said in a speech. “A Conservative government will introduce a new bank levy to pay back taxpayers for the support they gave and to protect them in the future.”
“It won't be popular in every part of the City,” he said, referring to the London financial district. “But I believe it's fair and it's necessary.”
During the financial crisis, German taxpayers rescued the lenders IKB and Hypo Real Estate with billions of euros in capital and guarantees. Berlin also took a 25 percent stake in Commerzbank, bolstering its capital. Britain nationalized the giant lender Royal Bank of Scotland and supported other banks including Lloyds.
France helped to rescue Dexia, which lends mainly to municipalities, with a capital injection and engineered a merger between two savings banks, Banque Populaire and the Caisse d’Épargne.
But in general, its banks came out of the crisis in better shape than many of their peers.
A French official, who was not permitted to speak publicly, said that while Paris agrees that private banks “need to put their hands in their pockets to help save themselves,” the government has no imminent plans for legislation on the matter and will first consult with international partners. The French economy minister plans to attend the German cabinet meeting at which the bank levy will be discussed on March 31.
At the request of the G-20, the International Monetary Fund is working on proposals for a levy on banks and it plans to deliver a report to G-20 ministers in April, when they meet in Washington. The ministers will meet again in Busan, South Korea, in June.
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