* Britain digs in heels as France, Germany push for tax
* Nine countries urge acceleration of debate
* Germany, France want ministers to tackle issue in March
By John O'Donnell and Huw Jones
BRUSSELS/ LONDON, Feb 14 European Union
countries may be asked next month to back an EU tax on financial
transactions or to block it, a move by finance ministers that
could clear the way for a smaller group of countries to
introduce a levy themselves.
The British government has promised to stop any such
pan-European tax, fearing it would damage the City of London,
and the European Central Bank has warned that a transactions tax
is impractical if introduced in Europe alone.
Having failed to win support for the measure from the United
States and other members of the Group of 20 global economies,
Germany and France are now making a push to end more than two
years of debate on the issue in Europe.
EU finance ministers meet on March 13 in Brussels, offering
an opportunity to discuss the European Commission's blueprint on
a tax that could raise up to 57 billion euros, with much of it
coming from London, the region's biggest trading centre.
A decision by ministers could draw a final dividing line
between those countries that oppose the tax and those that back
it, leaving those that chose to do so free to set up their own
Political leaders in Germany, which have national elections
next year, and France, where voting will take place in April and
May to appoint a new president, believe the tax will please
voters who hold banking responsible for the economic crash.
German Chancellor Angela Merkel has repeatedly signalled
that she wants to see a result by March, saying in January that
efforts would be made until then to get an agreement among all
27 EU countries, a goal that has always looked ambitious.
"We can't afford to wait for months to have clarification on
this issue," said one German official, speaking on condition of
anonymity. "We like the (European) Commission proposal and we
want to see how many countries would support it in March."
Francois Baroin, France's finance minister, has also
appealed to EU countries to make up their minds before April,
saying ministers will discuss it in March.
"We have asked for additional preparatory meetings and the
issue could now be put on the agenda on March 13," said one
France is set to introduce its own tax, which closely
resembles Britain's stamp duty on the trading of shares, before
The next move is now up to Denmark, which holds the rotating
presidency of the EU until July and is responsible for setting
the agenda for the March meeting.
"There is a desire from France, Germany and others to push
ahead with this issue," said one Danish diplomat.
"If some member states think it would be a good idea to put
it on the agenda in March, we will. But there has not yet been
an official request to do so."
"It would be tight to do the technical preparations in time
for March. We would also have to define the purpose of such a
Earlier this month, nine countries, including Germany,
France, Belgium, Italy and Austria wrote to Denmark urging it to
"accelerate the analysis and negotiation process" on the issue.
These nine countries would be sufficient in number to launch
their own tax through a procedure known as enhanced cooperation.
Last year, the European Commission proposed a scheme to tax
stock, bond and derivatives trades from 2014 across the EU.
It would work in a similar way to Britain's current stamp
duty of 0.5 percent on trading shares, which raised almost 3
billion pounds in the financial year to April 2011.
Even were Britain to opt out, trades that happen in the City
of London could nonetheless be affected.
As the proposal now stands, it is the location of the
individual or bank buying or selling the asset that triggers the
tax. So a bank established in Germany, for example, buying
shares in New York would be obliged to pay.
If there is any link to the EU, either through the buyer or
seller, then the tax will fall due. That means that a U.S. bank
selling to a buyer in the EU will also have to pay.
Any pan-European plan needs the backing of all 27 member
states to become law although a smaller scheme is possible.
Under the current proposal, stock and bond trades would be
taxed at the rate of 0.1 percent, and derivatives trades at 0.01
Later this week, the European Commission's top tax official,
Algirdas Semeta, will visit London to attend a hearing in the
House of Lords about his contested proposal. He will not see a
British minister during his visit.
"He will go with the message that the Commission wants
Britain on board and believes it would benefit," said one
official, talking on condition of anonymity. "He hopes to put
fears about the impact of the tax to rest."
Chris Cummings, chief executive of TheCityUK, which promotes
London's financial district, meets Semeta on Thursday to outline
his concerns that any transaction tax in the euro zone should
not harm the UK.
He does not expect a pan-EU tax to be agreed.
"But you can never take your eyes off these things. Our
message is that a transaction tax is not going to be conducive
to growth and jobs in the euro zone," Cummings said.
A spokesman for the British treasury reiterated Britain's
opposition to a pan-EU transaction tax.