Sunday, August 14

Spain to Present Bank Tax Bill for Lenders to Share War Burden


Spain will present a draft law as soon as next week for its planned tax on banks aimed at helping to pay for steps to blunt the impact of the war in Ukraine and soaring inflation on households.

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(Bloomberg) — Spain will present a draft law as soon as next week for its planned tax on banks aimed at helping to pay for steps to blunt the impact of the war in Ukraine and soaring inflation on households.

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“Banks can and must contribute,” Economy Minister Nadia Calvino said in a news conference in Madrid Friday after a meeting with executives from major banks also attended by Bank of Spain Governor Pablo Hernandez de Cos.

Prime Minister Pedro Sanchez stunned bank executives on July 12 when he unveiled plans to hit lenders with a new tax to raise 3 billion euros ($3 billion) over two years to help his government soften the blow from soaring inflation.

The planned levy, along with a windfall charge on energy firms, has raised tensions between Sanchez and big business, highlighting the race by European governments to secure funds to offset a cost-of-living crisis and economic fallout from Russia’s invasion of Ukraine.

A tax on lenders would hit banks just as they’re gearing up to benefit from a boost to loan margins as interest rates rise. Spanish domestic lenders including CaixaBank SA and Bankinter SA jumped yesterday on news of the European Central Bank’s bigger-than-expected rate hike.



financialpost.com

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