Merkel calls taxing bankers’ bonuses a ‘charming’ idea

Merkel calls taxing bankers' bonuses a 'charming' idea
Coming soon to Frankfurt? Photo: DPA
German Chancellor Angela Merkel said on Thursday that plans to tax the bonuses of London bankers was a "very charming idea" but did not say whether Berlin was prepared to heed a Franco-British call to adopt the policy.

“I find that the idea in particular of introducing, if I have correctly understood, a one-off tax in the City of London, is a very charming idea that could provide a lesson or two,” she told reporters with a smile on the sidelines of a meeting of the centre-right European People’s Party.

She added that it should not be taxpayers who shoulder the burden of the financial crisis but “banks and their employees.”

In a joint opinion piece in Thursday’s Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy urged other leaders to impose a tax on bonuses.

“We agree that a one-off tax in relation to bonuses should be considered a priority due to the fact that bonuses for 2009 have arisen partly because of government support for the banking system,” wrote the leaders.

Britain announced Wednesday it was slapping a one-off 50-percent tax rate on bonuses above £25,000 ($40,700) to recoup cash spent saving the financial sector during the crisis.

According to reports in the French press, Paris is also poised to impose a 50-percent tax on bonuses above €27,000 ($39,800), although officials stressed that the exact format has not yet been decided.

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