Bank tax must go ahead, say Merkel and Sarkozy

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The two leaders said they would raise the issue with the G20's president

German Chancellor Angela Merkel and French President Nicolas Sarkozy have renewed calls for a global bank levy and a financial transaction tax.

The two leaders said they would call for the measures in a joint letter to the president of the G20 ahead of a summit later this month.

G20 finance ministers had distanced themselves from bank taxes at a meeting earlier this month.

A bank tax would protect taxpayers from having to bail-out banks in the future.

Proceeds from the taxes would go into a fund that could be accessed during any future financial crises.

A number of countries have been calling for taxes on banks since governments spent billions of dollars bailing out banks across the world following the financial crisis that began in 2008.

However, so far there has been no agreement.

'Not satisfied'

Many governments are concerned that if they unilaterally impose a tax, banks will simply move to countries that have not introduced such measures.

Following a meeting of finance ministers earlier this month, many commentators thought the resolve for bank taxes was weakening.

The French and German leaders are looking to strengthen this resolve once again ahead of the next G20 meeting in Toronto on 26-27 June.

"We are not yet satisfied with what's been achieved since the first G20 and we think we need to forge ahead on regulation," said Mrs Merkel.

According to the Reuters news agency, European Union leaders will agree in principle on Thursday to introduce a levy on financial institutions, after which the details will be worked out by the European Commission.

"The European Council agrees that a levy on financial institutions should be introduced to ensure that they contribute to the cost of crises," draft conclusions of a council meeting said, Reuters reported.