Spanish government open to modifying tax on banks By Reuters

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MADRID (Reuters) – The Spanish government is open to modifying a proposed bill on a windfall tax on banks to assure that it does not have a negative impact on financial stability, Economy Minister Nadia Calvino said on Thursday.

The bill “will obviously incorporate those improvements that will allow us to have an adequate tax with an adequate collection capacity to be able to finance all the measures to support citizens and the middle and working classes,” she said during a business event called Nueva Economia Forum.

In July, Spain’s leftist ruling coalition introduced a bill in parliament to create a temporary levy on banks and large energy companies, aiming to raise 7 billion euros by 2024 to ease cost of living pressures.

On Tuesday, the lower house accepted the bill for debate. The ruling coalition wants the legislation approved before year-end.

“We have to make sure that it does not have any negative impact from the point of view of financial stability, that is obvious,” Calvino said.

Spanish bank shares were the top performers of the IBEX-25 blue-chip index, with Caixabank up 4.7%, Bankinter up 4.3%, Santander (BME:) up 3% and BBVA (BME:) up 2.1%.

Local media reported earlier on Thursday the government was open to modifying the tax to avoid conflicts with the European Central Bank.

Some bankers have cautioned against such a tax and Bank of Spain’s Governor Pablo Hernandez de Cos has already hinted that the ECB could even issue a negative opinion on the tax.

On Monday, European Central Bank Vice President Luis de Guindos warned against any tax that may increase costs for borrowers and jeopardise the solvency of banks.

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