Germany’s coalition government on Tuesday agreed to push for the introduction of an international financial transaction tax at an upcoming round of G20 and G8 meetings next month, officials said.
Top figures from Chancellor Angela Merkel’s centre—right coalition of Christian Democrats (CDU and CSU) and Free Democrats (FDP) met on Tuesday in Berlin to agree upon a stance.
Meanwhile, the opposition Social Democrats (SPD) said they planned to join forces with like—minded parties across Europe to seek an EU— wide referendum on a financial transaction tax. The G20 group of industrialized and emerging economies, plus the G8 developed nations’ group, is due to meet in Canada in June, where financial reform in the wake of the two—year—old world financial crisis will be high on the agenda.
In addition to the transaction tax, the German government will throw its weight behind International Monetary Fund proposals for a so—called financial activity tax, which is intended to tax profits and salaries of banks.
Ms. Merkel has previously said she considered the introduction of a transaction tax to be unworkable, and the liberal FDP had rejected the idea outright.
However, the government is under pressure from the opposition to back such a tax, at the same time that it wants to push German approval of the 750—billion—euro (928 billion dollars) rescue package through parliament by the end of the week.
A referendum on the subject would be possible if the EU commission received a petition signed by at least one million people from nine EU states. This would be the first application of the right to hold an EU—wide referendum, introduced under the Lisbon treaty.
