Chancellor Angela Merkel urged the European Union to speed up financial market supervision and introduce a new tax on them, saying Berlin was ready to act alone on a ban on activities which some leaders blame for much of the euro zone debt crisis. Speaking to parliament after the ban came into force at midnight on Tuesday, Merkel said EU leaders had to ensure markets could not “extort” the state anymore and the bloc would introduce its own financial transaction tax or levy if the Group of 20 nations failed to reach a deal in June. “I’ll boil it down to its core: The euro is the foundation for growth and prosperity, along with the common market -- also for Germany. The euro is in danger,” she told parliament.
Her comment heaped fresh pressure on the euro which had already tumbled on the back of Germany’s plan to ban naked short-selling of shares in the top 10 German financial institutions, euro government bonds and on related transactions in credit default swaps (CDS).
Short selling is a trade that bets a price will fall. Naked short selling is when a trader sells a financial instrument without first borrowing the instrument or ensuring that it can be borrowed, as would be done in a conventional short sale.
