The Government’s intention to make permanent the banking tax that was born as temporary has received a harsh response from the sector. The AEB and the CECA, the industry’s main employers’ associations, have warned about the bill that will be passed on to the economy and employment, estimating the reduction in financing capacity at 50,000 million. Beyond the direct damage, the sector also puts on the table that clashes with the recommendations of the European Central Bank (ECB) and the International Monetary Fund (IMF) and goes against the current of the projects of greater financial integration that are being distilled in Europe.
If it succeeds, as the Executive is pursuing, seeking the formulation that will allow it to obtain the support of Junts and the PNV, it would make the Spanish bank the the only one in the European Union that supports taxation like this. It would be a competitive disadvantage for financial entities that compete domestically and abroad with traditional foreign banks and the fierce and growing neobanks and fintechs.
And transcending economic and strategic effects for national banks, whose impact is unavoidable to ponder, the measure collides with Europe. The European Commission protected extraordinary taxes to address the problems caused by Russia’s invasion of Ukraine, but In a regulation it was made clear that these figures must be temporary in nature in a context of a specific economic situation, as was the case of inflation run amok by the war, censuring its prolonged or perpetual use. To date and according to a report by the American non-profit organization Tax Foundation, Spain is the only large economy in the European Union (EU) that retains such a tax – neither France, Italy nor Germany apply it.
The ECB in turn judged it undesirable to impose taxes on banks “for general budgetary purposes” as is now planned to be imposed, when analyzing a similar tax that Lithuania planned to coin in order to issue its opinion. For its part, the IMF, as the ECB and the Bank of Spain have also done, advocates leaving within the balance sheet of the entities any such surcharge and reinforce their capital to strengthen the capacity to grant creditsin line with the tribute set in Italy. Moncloa’s intention also goes against the grain of other initiatives moving in Europe.
Germany, France and Italy have recently urged the European Union to show restraint in the making of financial standards and focus on boosting the competitiveness of its banking sector. The three largest economies in the EU have formulated their request in a joint letter addressed to the Director General of Financial Services of the European Commission collected by Bloombergwith the ultimate goal of alleviating the regulatory burden borne by continental banking so that it competes on “equal conditions” with other major jurisdictions. Its motivation is to improve the regulatory framework so that banking gains competitiveness and, by extension, contributes better to economic growth.
The initiative assembled with the conclusions of the so-called Enrico Letta Report, where the former Italian Prime Minister and president of the Jacques Delors Institute urges the integration of the financial, energy and telecommunications sectors. In the study, commissioned by the European Council to identify the obstacles to the proper functioning of the single market, it concludes that it was a It is a mistake to leave these sectors in the hands of the national dimension because today there is not a single marketbut 27, with companies in each area without the scale of the Chinese or American champions.
Banks still see greater integration via transnational mergers as a long way off because the common Deposit Guarantee Fund is missing, but above all they come up against as many regulations of all kinds as there are jurisdictions, the same thing that happens in tax matters. The extension of the tax also faces the difficult justification that it taxes an extraordinary benefit from the increase in rates if we want to avoid assuming that a sector is simply penalized, financial sources explain. When the tax came into effect the Euribor was close to 3.3% by the rate scale of the European Central Bank (ECB). The price of money rose from 0 to 4.5%; now they are at 3.25% and the The market expects the Euribor to drop 2.25% next year.
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