* Group of European countries agree on transactions tax from
* Key questions such as level of tax, how to levy it still
* Pledge comes ahead of elections but critics say plan is
(Adds minister comments, detail from meeting)
By John O'Donnell and Robin Emmott
BRUSSELS, May 6 France and Germany led a group
of countries on Tuesday in calling for a tax on financial
trading, but their failure to agree central elements of the plan
means it will fall far short of its original ambitions.
The tax was promised in 2011 by German Chancellor Angela
Merkel and then French president Nicolas Sarkozy as a means of
getting banks to contribute more towards solving a crisis that
had by then bankrupted Greece and Ireland.
Finance ministers from ten euro zone states made a further
pledge on Tuesday to phase in the tax on the trading of shares
and some derivatives from January 2016, two years later than the
original start date.
But they left unanswered crucial questions such as how high
the tax - opposed by a second group of European states including
finance industry heavyweight Britain - should be and how it will
"We have ...a political agreement to go on with this,"
Germany's Finance Minister Wolfgang Schaeuble told peers in part
of the meeting broadcast to journalists.
His French counterpart Michel Sapin hailed the pact as
evidence that Europe was able to respond to the crisis, saying
the levy would raise roughly 6 billion euros ($8 billion)
annually from taxes on shares alone. This is nonetheless a
fraction of the 35 billion euros originally expected.
The European Green party's candidate in EU elections, Ska
Keller, who has also campaigned for the tax, dismissed Tuesday's
agreement as unambitious. "It's simply window dressing," she
The tax resurrects an idea first conceived by U.S. economist
James Tobin more than 40 years ago. Its supporters view it as
symbolically important in showing that politicians, many of whom
have been accused of fumbling their way through the crisis, were
tackling the banks blamed for causing it.
Ten countries - Austria, Belgium, Estonia, France, Germany,
Greece, Italy, Portugal, Slovakia and Spain - signed Tuesday's
statement underscoring their commitment to the phasing in of the
But the alliance is fragile.
Slovenia, which also supports the project but whose
government has collapsed, was unable to sign. European Union law
requires nine countries to take part in order for the scheme to
"This is just a political statement," Michael Spindelegger,
Austria's finance minister told peers of the plan. "We have
found common ground. Not much common ground."
As ministers met in Brussels, activists in favour of a levy
that has also been dubbed the 'Robin Hood' tax - after the
legendary English outlaw who robbed from the rich to give to the
poor - acted out a boxing match to symbolise the fight over the
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.
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 their
plans, in the face of stiff opposition, to just the euro zone.
They had to make do with a shaky alliance of countries, some
of which reluctantly signed up to keep Germany happy. Divisions
remain within the group over how the tax should work, including
between Paris and Berlin.
The tax's sketchy one-page blueprint, passed around the
table of 28 ministers from the European Union, prompted a fiery
debate, with Britain's George Osborne accusing the Franco-German
group of devising a scheme that would punish pensioners.
He said he would challenge it legally if it hurt Britain.
"The financial transactions tax is not a tax on bankers. It
is a tax on jobs, on people's pensions and on pensioners," said
Osborne, drawing a rebuke from Schaeuble that he was playing to
the crowd of watching journalists.
But Osborne had support from Anders Borg, the Swedish
finance minister and long-term critic of the project, who
dismissed the plans for a "very inefficient and costly tax".
It has been clear from early last year that the final plan
will be scaled back. Under a re-drafted model described then to
Reuters, 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.
($1 = 0.7205 Euros)
(Additional reporting by Annika Breidthardt and Francesco
Guarascio; Editing by Jeremy Gaunt and John Stonestreet)