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Austria' Pröll: Bank Tax Possible Under Strict Conditions

Tuesday, February 23, 2010

Austria’s Finance Minister Josef Pröll has confirmed that the introduction of a bank tax in Austria may now be possible, albeit under strict conditions.

At the forthcoming “banking summit” in the Chancellery, Austria’s Chancellor Werner Faymann is to put forward his proposals for a bank tax, notably a levy imposed on the balance and thought to generate in the region of EUR500m a year.

Although the Social Democratic Party of Austria (SPÖ) are determined to introduce such a tax, Finance Minister Pröll of the Austrian People’s Party (ÖVP) has revealed that he is only willing to consider the idea “under strict conditions”. Indeed, according to Pröll, the fiscal burden must neither be borne by savers nor borrowers, nor must the competitiveness of Austria within Europe be affected. Concrete solutions must first be found, he explained.

Eager to highlight the need to “proceed carefully” with the banks, Pröll nevertheless announced that, in a display of solidarity, the government, banks and taxpayers all had a role to play in overcoming the country’s debt. Taxpayers must also contribute to the recovery of the health and pensions system, Pröll added.

Determined to consolidate the budget primarily through reform of administration and to avoid tax rises, Pröll announced that the consolidation package will be one that has never before been seen by Austria.