EU zal overredingskracht nodig hebben om bankentaks erdoor te krijgen op G20 (en)
EUOBSERVER / BRUSSELS - EU officials have conceded that Europe still has considerable work to do before persuading other G20 i members on the need for a global bank levy and fiscal consolidation.
At the same time, officials working in Brussels in preparation for the G20 leaders's meeting Toronto later this week (26-27 June) said China's recent decision to allow a gradual appreciation of the renminbi has helped to stave off a currency scrap at the gathering.
EU leaders meeting last week reached broad agreement on the need for a bank levy in order to reduce the costs of future bank bail-outs, but nations such as Canada, China, and Brazil, whose banks suffered less during the global crisis, have so far resisted the move.
"We are not not denying that there is a persuasive job to be done," said one senior EU official on condition of anonymity on Monday. "It depends how big the levy is. If it's a swingeing levy of 20 basis points" then it will be difficult to persuade others, said the official, suggesting that the EU would be looking for a much smaller tax.
"If we are just talking about a few basis points here and there we are not going to distort capital markets," they added.
The European Union, represented by European Commission President Jose Manuel Barroso i and European Council President Herman Van Rompuy i, together with leaders from larger European economies, will also have its work cut out in persuading states such as the US that budgetary consolidation should start sooner rather than later.
While most in Europe feel the region's debt crisis highlights the need for fiscal discipline, Washington is concerned that an over-zealous clampdown on spending could stifle global economic recovery.
"On fiscal consolidation Europe is ahead of the curve," said one official in reference to the multitude of austerity packages recently announced by European governments. "But the G20 [as a whole] has been behind the curve," added the official, an indication of the flavour of the debate to come this weekend.
However China's announcement on Saturday that it will gradually allow the renminbi to rise, a long-time European and American demand, could avert harsh words on at least one subject, although implementation will be key.
"Without this [Chinese announcement] the risk of acrimonious debate at the G20 was likely," said one EU official.
"The fact that the Chinese move comes just before the G20 leaders' meeting shows that it has become the primary forum for global economic co-ordination."