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Vienna, 08 November 2011 Fekter: Introduction of a tax on financial transactions at EU level at least

When asked following the ECOFIN Council meeting on 8 November 2011 about the tax on financial transactions, Austrian Finance Minister Dr. Maria Fekter made it clear that she is definitely in favour of introducing such a tax, provided it was harmonised throughout the EU. “We have already stated on multiple occasions that we are in favour of the tax on financial transactions and we will continue to push for it, at least within the Euro zone.” This will, she says, send a clear signal to the markets, as well. “The markets are causing us problems, so they themselves should be required to contribute towards stabilisation.” Fekter did not give much weight to the argument that a tax on financial transactions would choke off growth and make the debts of the Austrian Länder more expensive when it came time to refinance. Rather, Finance Minister Fekter made clear that, in her view, the CO2 tax (likewise a topic of discussion at the Council meeting) was a significantly greater inhibitor of economic growth.

In connection with the EFSF leveraging, Fekter said the EU group had held a thorough discussion on technical implementation but that the final details of this had yet to be hammered out; the specifics would probably be the subject of a report. As to the question of whether it would be necessary to enlist the participation of non-EU countries, Fekter said: “We shall see. The EFSF is working on that very issue at the moment.” She stated further that she was generally happy to see anything that would lead to greater stability within the Euro zone.

As regards the situation with Greece, Fekter confirmed in very clear terms that, in the absence of a written undertaking to continue the austerity programme, the sixth tranche of aid would not be disbursed. “Greece must act decisively in moving forward with these reforms. They have to do their homework. We can’t wait until a new government is in office, because in theory that could take until March,” Fekter added.

In concluding, Austrian Finance Minister Fekter stated with regards to bank recapitalisation that EU Internal Market Commissioner Michel Barnier would be submitting a report containing a core capital ratio of 9% and providing for rapid implementation. “The banks know that they will have to get themselves into shape in coming months in order to be prepared. If the economic winds start to get rougher, the banks need to be ready for it”, Fekter concluded.