German governing parties call for market tax

BERLIN (AP) - Germany's governing parties called Tuesday for the introduction of a tax in Europe and beyond on financial markets, though they left details of the plan open.

The call came before the German parliament on Wednesday starts considering the euro750 billion ($1 trillion) rescue package to help eurozone nations avoid default.

As with the separate rescue package for Greece, which was unpopular among Germans, Berlin will be the biggest contributor among European countries.

Lawmakers from Chancellor Angela Merkel's center-right coalition are now urging the government to push for "a financial transaction or finance activity tax" in Europe and elsewhere, said Volker Kauder, the parliamentary leader of Merkel's conservative bloc.

"We want the stabilization of the euro," he said after a meeting of the coalition's top lawmakers. "But we also want the financial markets to be involved in this stabilization."

The lawmakers also called for quick legislation at home on measures such as a ban on naked short-selling, when a trader sells shares or investments he doesn't own.

Details of how a financial market tax might work were fuzzy. Birgit Homburger, Kauder's counterpart from the pro-business Free Democrats, the junior coalition partner, spoke only of "financial market taxation."

A transaction tax would involve a small levy on individual transactions. The Free Democrats have been unenthusiastic about the idea.

It wasn't immediately clear where any extra tax revenue in Germany might go, though the government recently has made curbing the budget deficit a priority.

The main opposition party, the center-left Social Democrats, have pushed for the government to commit itself to a transaction tax as it pushes through the rescue packages, and abstained in this month's vote on the Greek package after the parties failed to reach an agreement on that.

The government has a comfortable parliamentary majority of its own, but had sought opposition votes as well.