A "charming" tax

German chancellor Angela Merkel has hailed plans to tax the bonuses of London bankers as a "charming idea."

However, she did not comment upon a call from Paris and London for other nations to follow suit with the one-off tax.

Speaking at a meeting of Europe's conservative parties in Bonn, she called it "a very charming idea which would perhaps have certain educational effect." She said that "banks and their employees "should shoulder the burden of the financial crisis rather than the taxpayer."

Although Merkel did not say that she would impose the tax, one of her political supporters said he saw the remarks as a "clear signal." Juergen Ruettgers, premier of the North Rhine Westphalia state, added that money spent on state bailouts of the banking sector should not be converted into bonuses.

Growing debate on excess

The taxing of bank bonuses in Britain comes at the same time as growing public debate about excessive payments in the banking sector.

In Thursday's Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy urged other leaders to impose a bonus tax.

"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," they said.

Clawing back state cash

Britain said on Wednesday that it would introduce a windfall 50-percent tax rate on banking bonuses above 25,000 pounds (27,600 euros) to claw back cash spent on the sector.

The country's finance minister Alistair Darling said he hoped to raise more than half a million pounds of state money with the measure, with revenue used to help the unemployed.

Paris is also preparing to introduce a similar policy, according to reports in the French press.

rc/dpa/AFP/AP
Editor: Ranty Islam