EU reaches accord on disputed financial transaction tax

The EU finance ministers backing a controversial financial markettax, agreed on Tuesday it would come into effect in 2016 at the latest, despite strongopposition by some countries, officials said.The 11 member states which support the Financial Transaction Tax, led by Franceand Germany, had reached a consensus that "it should be a step by step approach, astart to tax shares and some derivatives," Austrian FinanceMinisterMichaelSpindelegger said."Each step towards full implementation (will be) decided in a manner that takes intoconsideration" the economic impact and the concerns of other countires whooppose it, Spindelegger told his colleagues.Britain, home to one of world's biggest financial markets in London, hasconsistently attacked the tax as harmful to business and counterproductive in thatinvestors will go elsewhere to avoid paying.Chancellor of the Exchequer George Osborne said that if the tax impacted otherEuropean Union countries who have decided not to take part, such as Britain, thenthey had the right to challenge it and would do so.Another opponent, Sweden was blunt in its opposition."We think the FTT is a very inefficient and costly tax (which) will have a detrimentalimpact on investment," Finance Minister Anders Borg said as he arrived for themeeting."The lack of information on the proposal is a real problem .. we will be very criticalof both the process" and the content, he said.France and Germany won support from nine other EU member states for the FTTwhich they champion as a way of making banks and investment houses pay for theexcesses which led to the 2008 financial crash and the debt crisis. However, negotiations between the 11 countries have been difficult, making littleprogress up to now in the face of intense lobbying against the tax.The FTT would apply to any transaction, anywhere in the world, carried out by a financial entity which is based in one of the 11 EU states.It could bring in 30-35 billion euros annually, according to European Commissionestimates.The levy is to be introduced under what is known as 'enhanced cooperation,' an EUprocedure which allows a minority to go ahead with a proposal if it cannot winmajority support.