video transcript

Europe looks set for a new financial transaction tax. At a meeting of European Finance ministers in Brussels, 11 countries agreed the new measure, among them France and Germany. Under the plan a small levy would by imposed on any trade of shares or bonds, and financial derivative contracts. The countries backing the move hope it'll tackle high-frequency speculative trades which are blamed for unsettling markets. European Union tax chief Algirdas Semeta. SOUNDBITE: EU COMMISSIONER FOR TAXATION AND CUSTOMS UNION, AUDIT AND ANTI-FRAUD ALGIRDAS SEMETA SAYING (English): "It is a milestone for the EU tax policy as it paves the way for more ambitious member states to progress on a tax file even when unanimity could not be achieved." Critics say such the tax cannot work properly unless applied world-wide or at least Europe-wide. Swedish finance minister Anders Borg. SOUNDBITE: SWEDISH FINANCE MINISTER ANDERS BORG SAYING (English): "We believe that the transaction tax is a proposal that has negative impact on growth. It will increase the borrowing costs for governments for cooperation and obviously for households." One EU official said the tax could be worth as much as 35 billion euros a year, and some countries are already banking on the extra income. But it's feared the cost of the tax won't be shouldered by the banks, but passed onto customers instead. London is Europe's biggest financial centre, and although the UK is not participating it won't escape the tax. Under the proposed rules if either the buyer or the seller is based in one of the countries imposing the tax it must be paid regardless of where the transaction takes place. The European Commission will now move to formally draft its plan.