Austria set to impose US-style bank tax
(VIENNA) - Austria plans to introduce a tax on banks, similar to a highly disputed scheme in the United States, in a bid to fix broken public finances, Chancellor Werner Faymann said Monday.
"We are going to introduce a bank levy," Faymann told a joint news conference with his Vice Chancellor Josef Proell and Austrian central bank chief Ewald Nowotny.
Faymann's idea of charging banks 0.7-1.0 percent of their total assets as a "solidarity levy" -- along the same lines as a proposal by US President Barack Obama -- has run into fierce opposition in the financial sector.
But "it's up to the government to decide and it's up to the parliament to decide on a bank tax. It's not up the banking chiefs," Faymann said after meeting with the heads of Austria's biggest banks.
The banks were invited to attend the meeting, "not to ask for their approval... but for them to participate in the discussion over what effects" such a tax might have, Faymann said.
"For us, it's clear that for reasons of fairness, banks and the financial sector must contribute to the consolidation of state budget," said Vice Chancellor Proell.
But the details still had to be worked out, including the exact amount and the timetable, and a working group would be set up to do hammer out these aspects of the plan, Faymann and Proell said.
So far, it has been suggested the tax would bring around 500 million euros (680 million dollars) into the state coffers and would be introduced in 2011.
"The sooner the better," Faymann said.
Austria would not wait for the EU to act first, the chancellor said.
An EU-wide solution "is always better than in a single country," he added.
"But if no solution is reached at an EU level, even though we will do our best to achieve that, then we will not sit back do nothing in our own country," he continued.
The idea of a bank tax is on the agenda of an informal meeting of EU finance ministers in Madrid in April.
Governments want banks to pay for the impact that financial sector rescue measures have had on public finances.
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