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Spain’s finance minister says decision on bank tax is “taken and fair”

MADRID – Spain’s finance minister said on Friday it was fair to impose a three billion euros ($3.05 billion) tax on banks to help those struggling with the soaring cost of living because lenders were bailed out in the financial crisis and will benefit from rising interest rates.

Economy minister Nadia Calvino was speaking before meeting bank chiefs along with the Bank of Spain Governor for the first time since the tax was announced by Prime Minister Pedro Sanchez in a state of the nation speech last week.

“The decision has been taken. The vast majority of Spanish citizens understand it and support it because it is the right thing to do,” she said in an interview broadcast on Spain’s TVE.

She declined to comment on whether further details of the tax would be shared at the meeting, saying there would be “an exchange of views”.

A source from her department said the details were still being finalised by the Budget Ministry.

Last week, two sources with knowledge of the matter said the government was readying a levy of just below 5% on net interest income and banking commissions as part of the implementation of the tax.

Calvino said the impact of the Russian invasion of Ukraine had to be addressed. “It has to start with those sectors that are making extraordinary profits that have to contribute to financing this response to the war,” she said.

On Thursday the European Central Bank raised interest rates by 50 basis points. Calvino said that would inevitably boost income for lenders.

Another tax, on energy companies’ windfall profits, is expected to raise four billion euros.

Senior bankers have told Reuters that higher borrowing costs should not be considered extraordinary gains since negative interest rates have weighed on banks for several years.

On Thursday, Spanish lender Bankinter chiefs said a new tax would hurt economic growth and dent investor confidence in the sector. ECB Vice President Luis de Guindos cautioned against any tax that risked damaging the solvency of the industry.

($1 = 0.9844 euros)

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