* EU finance ministers meet in Luxembourg to discuss levy
* Greece joins group of countries ready to back the tax
* Nine countries needed to meet threshold to push ahead
By John O'Donnell and Leigh Thomas
LUXEMBOURG, Oct 9 Germany and France will step
up a diplomatic drive on Tuesday to convince more EU countries
to join them in setting up a financial transactions tax, but
they remain stubbornly short of the nine needed to push ahead
with the plan.
Greece, Portugal, Austria, Slovenia and Belgium have agreed
to join Berlin and Paris in the endeavour, and Estonia is
expected to sign up on Tuesday, but one more is required to
reach the threshold to put the initiative into action.
Italy and Spain have toyed with the idea, but appear
unlikely to throw their hats into the ring, leaving Germany
bidding to attract a country outside the euro zone, which could
complicate the process of establishing the contested tax.
Poland is one potential candidate to join, but officials
indicated it was trying to get too much in return for its
support and Germany might not accept the terms, despite its
long-held determination to introduce a tax on market activity.
The European Commission, the EU executive that initiates
legislation, said it will do "everything it can to facilitate
quick progress" on the tax once the threshold is reached, but
there is little it can do before then.
"An EU Financial Transactions Tax would not just be a good
source of revenue," said Algirdas Semeta, the commissioner in
charge of taxation policy. "It would also ensure that the
financial sector pays its fair share."
But there are many naysayers in the EU who believe that
while a tax on financial transactions might be good in principle
and could help pay for the errors of the financial community, it
is unworkable unless it is universal, or at least pan-European.
Sweden, which tried its own levy in the mid 1980s, has
warned against the move, saying it will do little more than
drive trading elsewhere. It lost a large portion of its trading
to London and still smarts at the experience.
Imposing the charge on financial deals is symbolically
important, however, as Germany prepares for national elections.
Pierre Moscovici, France's finance minister, told reporters
on Monday ahead of a meeting of euro zone ministers that he and
German peer Wolfgang Schaeuble had written to "counterparts"
about the tax. "I think that it is possible," he said.
PUBLIC DISTRUST OF BANKS
Much of the momentum for the debate comes from public
distrust of banks and similar groups after the financial crisis.
But gathering support among the 27 members of the European
Union has been difficult, with Italy and Spain hoping to win
concessions for support, while Poland, the biggest economic
power in eastern Europe, would want something in return.
"Poland would consider supporting the Financial Transactions
Tax if it would find understanding on issues important for
Warsaw such as the EU's long-term budget and a voice in the new
banking supervision framework," an EU diplomat said.
Even supporters are apprehensive. The Greek finance ministry
said it wanted "an evaluation which will look into the possible
economic consequences from the introduction of the ... tax."
So far, the debate has focused on a blueprint written by the
European Commission for a tax on stocks, bonds and derivatives
trades from 2014 that the EU's executive arm said could raise up
to 57 billion euros a year.
The Commission's proposal is to tax stock and bond trades at
the rate of 0.1 percent and derivatives trades at 0.01 percent.
Britain, home to the region's biggest trading centre, has a
stamp duty of 0.5 percent on share trades, raising almost 3
billion pounds in the financial year to April 2011. It will not
join the scheme.
Separately, lawmakers in the European Parliament are set to
vote for measures to jail traders found guilty of rigging
financial market benchmarks such as the London interbank offered