Banking tax plan dropped from Greek package -sources

BRUSSELS, July 21 (Reuters) - A tax on the banking sector will not be part of a second bailout package for Greece, European Union sources said on Thursday.

The decision follows talks between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Wednesday, when they said they had struck a deal on a new package for Greece but did not release any details.

"You should assume that there will not be a banking tax," one source told Reuters, adding that European Central Bank President Jean-Claude Trichet also agreed with that position.

Another source involved in preparatory meetings for the summit of euro zone leaders on Thursday said the banking tax proposal, raised last week, had been dropped.

(Writing by Luke Baker, editing by Rex Merrifield)