* Group of European countries to commit to transactions tax
* Key questions such as level of tax, how to levy it open
* Pledge comes ahead of elections, campaigners support it
By John O'Donnell and Robin Emmott
BRUSSELS, May 6 France and Germany led a group
of countries on Tuesday in pushing for a tax on financial
trading although the levy is set to fall far short of what was
pledged at the height of the financial crisis and may be pared
Promised in 2011 by German Chancellor Angela Merkel and the
then French president, Nicolas Sarkozy, as a means of getting
banks to pay for a financial crisis that had then bankrupted
Greece and Ireland, the tax was contested from the outset.
Finance ministers from a group of 11 euro zone countries
that back the tax made a further pledge on Tuesday to introduce
it by January 2016 at the latest. Crucial questions such as how
high the tax should be and how it will be charged remain open.
"I believe we will reach a political agreement on a
financial transactions tax, all ministers are ready," Luis de
Guindos, Spain's economy minister, told reporters ahead of a
gathering of EU ministers. "I hope we will reach agreement on
the assets to be included, mainly shares and some derivatives,"
he said, sharing a view supported in particular by Italy.
"We want the rules agreement this year so it can come into
force next year," he said. "We still need to decide the level of
the tax and how it will be levied."
Resurrecting an idea first conceived by U.S. economist James
Tobin more than 40 years ago is symbolically important in
showing that politicians, many of whom have been accused of
fumbled their way through the crisis, were tackling the banks
blamed for causing it.
As ministers met in Brussels, activists in favour of a
'Robin Hood tax' - after the British "outlaw" who was said to
rob the rich to give to the poor - acted out a boxing match to
symbolise the fight over the levy.
In one corner, an activist dressed in green and wearing a
quiver of arrows pretended to knock out his opponent who was
dressed as a banker in a suit.
"This is a fight between bankers and Robin Hood," said
Natalia Alonso, a campaigner at Oxfam. "We are saying that the
money raised with this tax should go to fighting poverty."
Reaffirming a commitment to the tax is also important ahead
of European elections that are expected to see a rise in support
for populist eurosceptic parties. Many experts, however, expect
the scheme to be quietly shelved afterwards because it is
difficult to implement.
"TAX ON JOBS, PENSIONS"
Ignoring warnings from the European Central Bank that the
levy would backfire, Merkel and Sarkozy had initially sought to
win support across the European Union before scaling back plans,
in the face of stiff opposition, to just the euro zone.
Ultimately they had to make do with an shaky alliance of 11
countries, some of whom diplomats said reluctantly signed up to
keep Germany happy. Divisions remain within the group over how
the tax should work, including between Paris and Berlin.
Anders Borg, the Swedish finance minister and long-term
critic of the project, reiterated his opposition to what he
called a "very inefficient and costly tax".
"The lack of information on the (11 countries') proposal is
a real problem," he said.
Britain's finance minister George Osborne told ministers
said it was "a tax on jobs ... a tax on people's pensions", in
remarks broadcast to reporters.
Moreover, it has been clear from early last year that the
final plan will be scaled back, initially imposing a tiny charge
on share deals only and taking much longer than originally
intended to achieve a full roll-out.
Officials have told Reuters that the redesigned levy would
raise only about one tenth of what was once targeted. Officials
in Brussels had expected the financial transactions tax (FTT) to
raise up to 35 billion euros ($49 billion) a year.
Under a re-drafted model, the standard rate for trading
bonds and shares could drop to just 0.01 percent of the value of
a deal, from 0.1 percent in the original blueprint.
That would cut income to roughly 3.5 billion euros, or
perhaps even less, said one senior EU official. The tax may now
also be introduced more gradually.
($1 = 0.7205 Euros)
(Additional reporting by Francesco Guarascio Editing by Jeremy