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European Union

EU unveils transaction tax details

The European Commission has disclosed details on what its planned financial transaction tax will look like. It's a levy that's scheduled to come into force in 11 states, after a pan-EU deal has failed to materialize.

The EU executive on Thursday unveiled details of a financial transaction tax (FTT), that the European Commission wants to see implemented in 11 member states by 2014.

It said the tax would initially apply in the eurozone's four biggest economies, Germany, France, Italy and Spain, plus Austria, Belgium, Estonia, Greece, Portugal, Slovakia and Slovenia.

The 11 states to sign up to the levy would be able to impose a tax of at least 0.1 percent on bonds and shares, and 0.01 percent on derivatives with an economic link to the nations in question.

Fundraising

The group of 11 had agreed to proceed unilaterally, after fierce opposition from Britain and Sweden made it clear a pan-EU deal would never come about. Critics said taxing the markets could drive away much needed investment from Europe.

To avoid the risk of companies relocating to dodge the levy, the Commission proposed that transactions be taxed if any party was established in an FTT member state, irrespective of where in the world the transaction took place.

Brussels said the tax would raise between 30 billion euros ($40 billion) and 35 billion euros annually. It added some of those resources could be put towards member states' contributions to the EU budget.

hg/jr (dpa, AFP)