Or, let them send bailout funds.
Instead of the thorough banking sector rescue which some commenters have been advocating – it looks like the European Commission could be considering the exact opposite.
Namely, taxing the banks to help boost Europe’s upcoming bailout funds.
From Reuters on Wednesday:
Jan 12 (Reuters) – A tax on banks to raise 50 billion euros could fund the new European Stability Mechanism (ESM) to protect countries in financial trouble, according to an internal report from the EU’s executive for euro zone countries.
And the reasoning:
Flagging the need for a “critical mass of paid-in capital”, officials suggest that the financial sector be called on to fund this stockpile, because the sector benefits from the fund’s existence.
“It is in the interest of the financial sector to contribute to the existence of an ultimate safety net, which protects capacity of public authorities to rescue them,” officials write in the report.
A one-off 0.2 per cent tax on the eurozone’s banking assets would apparently raise some €50bn of capital, according to the report. Which means (if you’re trying to keep track) the flow of European bail-out funds would look something like this:
European countries –> Bailed-out banks –> European countries –> ...
Circular much?