February 24, 2014 / 8:32 AM / 4 years ago

Transaction tax deal possible by May -euro commissioner in paper

VIENNA, Feb 24 (Reuters) - A deal for 11 euro zone countries to introduce levies on financial transactions could happen by May, European Commissioner Algirdas Semeta told an Austrian newspaper.

The tax aims to make banks pay back some of the money they received from taxpayers in the 2007-09 financial crisis.

It has been watered down since it was first proposed, facing opposition from the financial sector and failing to gain broad support from euro zone governments.

It eventually won the backing of an uneasy coalition of 11 states, led by the euro zone’s top two economies Germany and France.

The pair have said they will push for an agreement on details of the tax by the European Parliament elections in May, a tight deadline given that it has taken years to get this far.

“Based on the latest German-French initiative there could be an initial accord before the EU elections in May,” Semeta, who is in charge of tax at the European Commission matters, told Wirtschaftsblatt in an interview published on Monday.

He declined to speculate on whether the agreement could cover imposing levies on more than just stock trading, saying only there could be a “step by step” rollout. He denied the talks had gone back to the starting point.

“We are in the final phase of negotiations. The focus is primarily on the technical implementation. But we have to clear this up for all 11 countries, including Austria, that want to introduce the (tax),” he said.

Paris and Berlin also agreed last week that the tax should cover all derivatives products, a source close to French Finance Minister Pierre Moscovici said.

Asked whether Austrian Finance Minister Michael Spindelegger was correct that the tax will start producing revenue only in 2016, Semeta said: “Austria expects income from then from the financial market tax. I hope this works out.”

Officials in Brussels had first expected the tax to raise up to 35 billion euros ($48.1 billion) a year. The redesigned levy is expected to raise only a fraction of that.

$1 = 0.7275 euros Reporting by Michael Shields; Editing by John Stonestreet

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