(adds text agreed by 10 finmins, quotes)
By Francesco Guarascio
LUXEMBOURG Oct 11 The European Commission has
been given a mandate to draft a law on a financial transaction
tax, but work still needs to be done on the proposal by the 10
countries supporting it, EU officials said on Tuesday.
The proposed tax on transactions between financial
institutions, put forward by Germany and France in 2012, is seen
as a political symbol as much as an effort to correct the
excesses blamed for the world's worst financial crisis for
"On the basis of the Austrian proposals we have reached an
agreement in principle," German Finance Minister Wolfgang
Schaeuble said on Tuesday, referring to a text prepared by
Austrian finance minister Hans Joerg Schelling.
But the tax, intended for transactions involving shares and
derivatives, has been debated ever since, with countries still
disagreeing on how to levy it and at what rate.
Late on Monday the finance ministers of the 10 countries
considering adopting the financial transaction tax, or FTT, held
a meeting in Luxembourg on the sidelines of a regular gathering
of euro zone ministers.
They supported the text prepared by Schelling, who also
chairs the group.
That text, seen by Reuters, set out general principles.
Initially, only shares originated from the participating
countries would be taxed but after a transitional period a
common tax would be applied to all shares - an idea that may not
go down well in Britain, which fears the impact on trades in the
City of London.
All derivatives transactions would be taxed except repos,
reverse repos and the transactions of public debt managers, the
The text indicates no common tax rates and still misses out
important technical details on how to apply the levy, which will
all need to be clarified in later talks.
Schaeuble's French counterpart, Michel Sapin, shared his
view that a deal now looked closer than ever.
The Commission will draft in the coming weeks a legislative
proposal based on the political deal, with the aim of reaching a
final agreement by the end of the year, ministers said.
Several deadlines have been missed over the years regarding
the controversial tax, however.
Pierre Moscovici, the EU economics and taxation
commissioner, said a deal was near but added: "There is still
some analysis to be done."
The tax was originally proposed for the whole of the
European Union, but only Germany, France, Italy, Austria,
Belgium, Greece, Portugal, Slovakia, Slovenia and Spain are
still considering applying it.
(Additional reporting by Frank Siebelt in Luxembourg; Editing
by Hugh Lawson)