Borg arrived at Brussels talks with European Union peers seeking to impose a bloc-wide levy he says will “pay for the impact the rescue measures have had on our public finances.”
Slamming a Greek debt mountain and economic misreporting as “fraudulent” and “a cost for the whole of Europe,” Borg insisted that the EU can no longer “accept the situation where the banks are running away from the bill.”
“This is something that has been introduced in the United States, and we already have a similar system in Sweden.
“This is a tax, a fee that could bring substantial revenues for dealing with the public finance situation but also to take care of future banking crises.”
Borg said that a tax on final balance sheets — different from a tax on individual transactions as mooted since the 1970s — would get round the problem of banks moving to more favourable locations.
“You can’t move your balance sheet out of the country so it’s a much more logical model,” he insisted, claiming “support among several of my colleagues for this idea.”
In a letter to fellow ministers, Borg said “the financial system should pay for the actual cost it incurs on society” in a move he said would legitimize bailout action among public opinion.
He said the Swedish model, introduced in 2009, comes in at 0.036 percent of final balance sheets, and is already equal to 1.0 percent of Swedish gross domestic product, with a target value of 2.5 percent of GDP in 15 years.
“The advantages are obvious,” he insisted compared to a transaction or turnover tax. “Smaller liabilities are encouraged as they incur a lower actual fee.”
Britain’s Chancellor Alistair Darling told The Scotsman newspaper at the weekend that London would not match President Barack Obama’s plans to recover “every single dime” taxpayers shelled out to rescue Wall Street.
The head of the 16-country eurozone, Jean-Claude Juncker, has also warned that it would be “difficult to adopt a common approach because tax matters are reserved for national decision-making” across the EU.