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Radicova: EU Crisis Mechanism Has Nothing to Do With Taxing Banks
Saturday 30 Octtber 2010 Zoom in | Print page
(Slovak Radio, October 30, Sobotne dialogy)
European Union's permanent crisis mechanism that should minimise the risk of emerging further financial crises will include rules for participation of the banking sector in the cost for potential problems. The issue of special taxation of banks has nothing to do with this, however, Prime Minister Iveta Radicova (SDKU-DS) emphasised on Slovak Radio discussion programme 'Sobotne Dialogy' (Saturday Dialogues) on Saturday.
"The issue of bank taxation is about improving the financial situation of eurozone countries. It's still open, no discussion is taking place, while Ecofin has been commissioned to prepare some proposals. It has no bearing on what the EU adopted [at the summit earlier this week]," said Radicova.
At the summit, EU leaders reached an agreement to create a permanent crisis mechanism aimed at preventing eurozone states from slipping back to financial meltdown. The mechanism is set to replace the current €750-billion European Financial Stability Facility (EFSF) as of 2013. Meanwhile, European Council President Herman van Rompuy should hammer out the details in co-operation with the European Commission by the next EU summit slated for December 16.
The mechanism set to replace the current safety net takes into account Slovakia's claims, said Radicova. "As an unequivocal decision was met that both state bankruptcy and responsibility of financial institutions will be part of this mechanism, Slovakia has no problem in supporting such a mechanism," she said.
With respect to tightening up the European budgetary rules, the prime minister appreciated the agreement on accounting for the cost of pension overhaul in debt and deficit calculations. Radicova noted that the cost for the private pension pillar won't be allowed to be simply written off from the public deficit, but will be taken into account if European institutions consider imposing sanctions against the given state for failing to meet the budgetary rules.
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