The European Commission has advocated a €50bn tax on eurozone banks to help fund a new Greek rescue, according to a proposal sent to European Union officials. Proceeds from the tax would be used to buy back and retire 20 per cent of Greece’s outstanding debt, which now totals €350bn.
The proposal includes €71bn in new bail-out loans from the European Union and the International Monetary Fund, while private owners of Greek debt maturing over the next eight years would be encouraged to swap their holdings for new 30-year bonds. The swap, which would include credit sweeteners to encourage participation, could reduce the present value of Greek debt by another €90bn.
According to officials who have been briefed on the plan, it was circulated late on Wednesday by the Commission ahead of an emergency summit today in Brussels.