The tax is expected to be scaled back from an original plan to
introduce it from January to raise 35 billion euros ($48 billion)
annually to make banks pay back some of the money received in the
2007-09 financial crisis.
The idea of a transaction tax failed to win backing globally due to
U.S. opposition, and a pan-European Union tax or even one covering
all 18 euro zone countries also found no support. Britain, Ireland,
the Netherlands and Sweden are among countries that have opposed it
on grounds that it would encourage banks and finance firms to
relocate trading activities.
Although the levy is likely to end up being a shadow of the original
proposal, its introduction in some form would allow Germany and
France to claim a victory.
The latest plan for the tax is expected to be on the agenda when
Germany and France meet in Paris on Wednesday.
Soundings among all the 11 countries will first be taken on the
sidelines of the regular monthly meeting of the EU finance ministers
in Brussels on Monday.
"I hope that we take a step forward on that," Wolfgang Schaeuble,
Germany's finance minister said when arriving in Brussels ahead of
the planned talks.
"We may possibly have to move ahead step by step," he told
journalists, in an apparent reference to a phased introduction of
An EU diplomat said finance ministers from the 11 countries taking
part will meet on Tuesday morning, adding that no definitive
decisions are expected this week.
A phase-in starting with stocks and then later adding bonds, and
perhaps derivatives in a reduced way, now looks likely rather than
the "big bang" introduction originally foreseen, officials and
financial lobbyists in Brussels said.
The basis of the tax could also be changed to avoid trying to force
countries outside the 11 taking part from having to collect the
What is now seen as an inevitable scaling back has raised concerns
among the socialists in the European Parliament, which goes to the
polls in May, who urged the French and German finance ministers to
be more ambitious.
[to top of second column]
"Dear ministers, we count on you to reject the special pleading of
vested interests and to do what is right for our citizens and the
sustainability of a robust financial sector," the socialists' letter
seen by Reuters on Monday.
The bloc's tax commissioner, Algirdas Semeta, who drafted the
original proposal, has urged the 11 countries not to dilute the plan
and instead implement it more gradually.
He welcomed this week's meetings to revive the project.
"We would hope that the result will be a political push forward on
the financial transaction tax that we've been pressing for," his
Britain, the EU's biggest financial center, is not among the 11
countries, but is nevertheless challenging the plan in the bloc's
top court, saying it impinges on its firms.
The original proposal to tax stocks, bonds and derivatives hit the
rocks after it was deemed illegal in parts by lawyers for the member
Exemptions to the tax are already under discussion, including some
categories of derivatives.
France is keen to scale back the tax's impact on derivatives as
French banks such as Societe Generale <SOGN.PA> and BNP Paribas <BNPP.PA>
are big players in the market.
Securitized debt and repurchase agreements or repos may also need
exemptions to avoid harming what is hoped will be an important
source of funding for companies, documents seen by Reuters have
Government and corporate bonds may also be exempt and some countries
are also keen to avoid hitting end investors and pension funds.
($1 = 0.7307 euros)
(Additional reporting by Gernot Heller
in Berlin, and Tom Koerkemeier and John O'Donnell in Brussels;
editing by Jane Merriman)
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