German finance minister: group of EU countries to reach deal on financial transaction tax soon

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BRUSSELS – A group of 11 European Union nations will reach an agreement soon on introducing a financial transaction tax, Germany’s finance minister said Monday.

Officials in Europe started pushing for the tax following the 2008-09 financial crisis to curb speculation and claw back revenues after the massive government bailouts of banks.

German Finance Minister Wolfgang Schaeuble said ahead of a meeting of finance ministers from the 11 countries seeking the levy that an agreement on “limited taxation of stock and derivatives” trading could be reached by day’s end, with hopes of finishing legal issues on it by the end of the year.

The levy’s scope won’t be as broad as its supporters initially hoped for but the EU nations behind it — including economic heavyweights Germany, France and Italy — say it’s better to start with an imperfect solution than having no tax at all.

The EU estimates a financial transaction tax encompassing all asset classes could yield some 30 billion euros ($42 billion) in additional tax revenue annually.

Austria’s finance minister, who has played a key role in the negotiations on the tax, struck a more cautious tone but also expressed hope that a political agreement was within reach.

“I want a political commitment that we jointly want this financial transaction tax and which time frame we envision for it,” said Austria’s Michael Spindelegger. “Whether we will achieve that, we’ll see.”

Following the talks, no minister commented on the meeting’s outcome.

Because of legal constraints, the 11 nations must first brief the finance ministers of the remaining 17 EU countries that won’t go along with the tax, diplomats said. The issue is already on the schedule for a meeting of the EU’s 28 finance ministers Tuesday in Brussels.

Britain, which is home to the EU’s biggest financial hub, the City of London, has fiercely resisted the introduction of a financial transaction tax for fear of jeopardizing its banks’ global competitiveness. Decisions on taxes for the whole EU require unanimity among the 28, and Britain’s veto was one of the reasons that 11 other eurozone countries began to seek a tax for a smaller group.

The EU’s top court last week dismissed a British challenge to the introduction of the tax as premature since the tax has yet to be established. Britain argued it is illegal under EU law since it would affect even countries who don’t sign up to it.

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