Germany and France Put Financial Transaction Tax Back on Table

Eurozone powerhouses France and Germany are gearing up for a fresh bid to introduce a financial transaction tax in the handful of European Union states who have agreed to the controversial levy.

Just 11 of 28 EU member states, all of them eurozone countries, are in favour of introducing a new tax on certain financial transactions, which is claimed could raise as much as €35bn ($47.9bn, £28.6bn) a year.

There is little support for the FTT from governments across the world. The revised plans will likely be watered down from the first set of proposals to bring in a levy on financial transactions involving stocks, bonds and derivatives.

It is also likely the tax would be introduced in phases and efforts made to avoid countries outside of the 11 having to collect the levy on their behalf.

Wolfgang Schauble, Germany's finance minister, said in Brussels that he hopes to "take a step forward" on the FTT.

"We may possibly have to move ahead step by step," he said ahead of a meeting with fellow finance ministers from the 11 pro-transaction tax states.

The UK has mounted a legal challenge to an EU FTT. One of the UK's central arguments is that it would impede national sovereignty by forcing it to collect tax for other member states.

It also argues the UK would be disproportionately affected because of London's dominance as a global finance hub.

Under the original FTT plans, shares and bonds transactions would be taxed at 0.1% and derivatives at 0.01%.

Algirdas Semetas, the EU tax commissioner and father of the FTT proposals, does not want the tax plans to be weakened, instead favouring a slow introduction of the policy.

"We would hope that the result will be a political push forward on the financial transaction tax that we've been pressing for," his spokeswoman told Reuters.