Finance Tax in Europe..a viable source.?

 European Union finance ministers are debating a tax on financial transactions that could raise money for the EU and make banks share bailout burdens with taxpayers.

The tax would take a tiny fraction from a wide range of financial dealings and the EU wants use the money to relieve states' membership contributions to the institution.

It could also help repay governments for some of the billions of euros in taxpayer money they had to pour into banks that needed to be bailed out out during the 2007-2009 financial crisis because they had made risky investments that went sour. Some also argue it could reduce volatility on financial markets.

The EU has been pushing the idea since it came up during global summits held in 2009 to combat the financial crisis. France and Germany support the idea but Britain is opposed because London is a major financial center. The U.S. also opposes such a tax, and many say it won't work unless imposed globally because banks will simply move transactions to jurisdictions where there is no tax.

Belgian Finance Minister Didier Reynders said ahead of Saturday's meeting of finance ministers in Wroclaw, Poland, that if a tax can't be imposed in all 27 EU member countries, then it could be discussed for 17 that use the euro. That group doesn't include Britain.

"We are having a discussion about stabilization in the eurozone and the world, and I am sure we need to put on the table the financial transaction tax," he said. "It's important not only to finance the budget but to stabilize the flows on the capital markets."

"Yes, it's better to organize something of the financial transaction at the world wide level but if it's impossible maybe we will do it in the European Union, if it's impossible for the entire European Union in the eurozone."

The European Commission says it will have a concrete proposal next month that would then have to find approval among member governments and pass the European Parliament.

Finnish F. M. Jutta Urpilainen, demands collateral from Greece

Finland's finance minister said she doesn't expect the eurozone to resolve a dispute over her country's demand for collateral for loans to Greece at a meeting Friday — adding to concerns over the currency union's ability to stamp out its crippling debt crisis.

U.S. Treasury Secretary Timothy Geithner joined the meeting in Wroclaw, Poland — the first time that a U.S. finance chief has attended such a gathering — in a sign of how the U.S. is getting increasingly concerned over the global impact of the eurozone debt crisis.

Geithner has been pushing his European counterparts to finally find a lasting solution to its debt troubles, which have dragged on for almost two years.

But hopes for some tangible progress were quickly thwarted, when Finnish Finance Minister Jutta Urpilainen said that there was still no solution to her country's demand for guarantees to back its contribution to a second, euro109 billion rescue package for Greece.

The small Nordic country's demand has triggered similar requests from several other states, including Austria and the Netherlands.

If the requests were fulfilled, providing the collateral could shave off hundreds of millions of euros from the overall bailout sum.

"Unfortunately I don't see that we can find a solution tonight," Urpilainen said as she arrived for a meeting with her eurozone counterparts in Wroclaw, Poland.

The dispute has unsettled markets, as it is another sign of divisions between the 17 countries that use the euro over whether they can actually save Greece, which has been relying on emergency loans from other eurozone countries and the International Monetary Fund for more than a year.

The rescue faces several other challenges. Greece's international debt inspectors interrupted their most recent review mission two weeks ago after they discovered that Athens was set to miss its budget targets. Since then, Greece has announced a special property tax, which the government says should cover the revenue shortfall.

Meeting strict budget, privatization and reform targets set out in Greece's deal for a first euro110 billion rescue package is a prerequisite for receiving the next aid installment, which is due by the end of the month.

Without the euro8 billion ($11 billion) tranche, the country would run out of money by mid-October and potentially defaulting on its debts.

However, Austria's Finance Minister Maria Fekter, traditionally a hard-liner when it comes to sticking to the bailout conditions, said she was "very optimistic that the next tranche can be paid out to Greece."

She warned against a Greek default, which she said would be "very costly."

However, she did not rule it out as a possibility in the future.

"Should a situation arise, where this way (of providing rescue loans) suddenly becomes more expensive than the alternative, we will have to think about the alternative," Fekter said. "But at the moment this is not yet the case."

Referring to the debate about collateral, Fekter said she had proposed a model where guarantees would be available for everyone that wants them.

Friday's meeting comes after several turbulent weeks on global financial markets, triggered by fears over the impact of a potential Greek default as well as mounting evidence of a slowdown of the world economy. Some eurozone banks have been facing difficulties to obtain short-term funding in U.S. dollars as other lenders worry about their exposure of the debt of struggling countries like Greece, Spain or Italy.

Those funding issues pushed the European Central Bank, the U.S. Federal Reserve and three other major central banks to give banks easier access to dollars on Thursday, in the hope they can stop credit from seizing up like it did after the collapse of U.S. investment bank Lehman Brothers three years ago.

Greek Finance Minister Evangelos Venizelos, meanwhile, defended his country's efforts, and called on the other eurozone states to clear up the remaining issues that have delayed the new bailout and quickly implement changes to the region's bailout fund that were also agreed at the July summit.

"We are on track to implement the (bailout) program," Venizelos said. "And we believe that the implementation of the decision of the 21 July is the unique way to go ahead. Not only for Greece but for the eurozone as a whole."

European Union defers Greece for October, differences simmer

Eurogroup president Jean-Claude Juncker, left, and European Central Bank governor Jean-Claude Trichet speak at a press conference during an informal meeting of the Economic and Financial Affairs Council (ECOFIN) in in Wroclaw , Poland on Friday, Sept. 16, 2011. Rescue partners will decide in October on a crucial payout of bailout loan money to bankruptcy-threatened Greece. Juncker and other eurozone finance ministers were discussing Europe's financial crisis at an informal meeting in Wroclaw


U.S. Treasury Secretary Timothy Geithner steps out of an informal meeting of European Union finance ministers who are discussing euro zone crisis and rescue plan for Greece, facing bankruptcy in Wroclaw, Poland, Friday, Sept. 16, 2011. It was the first time that a U.S. finance chief has attended a meeting of his European counterparts. He has been pressing the ministers to find a lasting solution to the euro zone debt crisis. 

EU Economic Commissioner Olli Rehn,from left, Eurogroup president Jean-Claude Juncker, European Central Bank governor Jean-Claude Trichet and Klaus Regling, CEO of the European Financial Stability Facility, attend an informal meeting of the Economic and Financial Affairs Council (ECOFIN) in Wroclaw , Poland on Friday, Sept. 16, 2011.
 Rescue partners will decide in October on a crucial payout of bailout loan money to bankruptcy-threatened Greece. Juncker and other eurozone finance ministers were discussing Europe's financial crisis at an informal meeting in Wroclaw

Head of Eurozone finance ministers' group, Jean-Claude Juncker, addresses the media during a news conference in Wroclaw , Poland on Friday, Sept. 16, 2011 RThe hescue partners will decide in October on a crucial payout of bailout loan money to bankruptcy-threatened Greece. Juncker and other eurozone finance ministers were discussing Europe's financial crisis at an informal meeting in Wroclaw

European Parliament hard vibes on defaulting Euro Nations : Poland Stick

Poland's finance minister said Friday that after a yearlong dispute his European Union counterparts have signed off on tougher budget rules that punish overspending governments.

Jacek Rostowski said that the 27 ministers approved at their meeting in Wroclaw, Poland, a compromise that Polish officials had worked out with the European Parliament earlier this week.

Under the new rules, it will be easier to put sanctions on governments that breach the EU's limits on debts and deficits. Governments who ignore warnings that they risk breaking debt rules can also be punished.

For years European countries — including Germany and France — have broken the EU rule requiring deficits to be kept below 3 percent of gross domestic product. Experts say that the lack of accountability has helped cause the rise in government debt that is currently afflicting the region.

The eurozone ministers are under intense pressure to find solutions to the debt crisis that has hobbled their 17-nation currency union for almost two years.

U.S. Treasury Timothy Geithner's presence at the informal meeting — the first time for an American Treasury chief — was an indication of the international pressure building on European officials to fix their crisis and keep it from hurting the global economic recovery.