European Union finance ministers have cleared the way for 11 members of the eurozone to introduce a tax on trading aimed at raising billions in euros from the financial services industry and deterring speculation.
The countries planning to introduce the tax include the eurozone's top four economies, Germany, France, Italy and Spain. Austria, Estonia, Belgium, Greece, Portugal, Slovakia and Slovenia are also on board. The group of states decided to move ahead after attempts to adopt a trading tax at the EU and eurozone-wide level failed in 2011.
The United Kingdom, Europe's leading financial center, will not adopt the new levy and abstained during the vote, along with Luxembourg, the Czech Republic and Malta.
Many eurozone governments are desperate to identify new sources of revenue to plug holes in their budgets, made larger by the recession, without placing further burden on individuals. They also face popular pressure to ensure the banking industry pays a bigger share of the cost of dealing with the economic fallout of the financial crisis.
The tax could raise more than €37 billion, and up to €57 billion if applied across the EU as a whole. Such levies are often dubbed "Tobin taxes" after Nobel Prize winning economist James Tobin, who proposed taxing foreign exchange transactions in the 1970s to curb speculation.
But some nations are worried that the tax will drive investors away and act as a brake on economic growth. It also risks opening up new divisions in the EU just as the eurozone looks to cooperate more closely in fiscal, monetary and banking policy to build stronger foundations for the euro currency.
Officials at the European Commission will now come up with ways of implementing the tax, based on a 2011 proposal that called for a minimum levy of 0.1% on trading in all financial instruments, except derivatives which would incur a rate of 0.01%.
"Those who want to move ahead, and who appreciate the merits of working more closely on taxation at EU-level, can do so," said European tax commissioner Algirdas Semeta. "This is a highly significant and very welcome advance."
Semeta hailed the first adoption of a financial transaction tax at a regional level.
But it also marks the first time the EU has pushed ahead with a tax measure without the support of all its members. States can cooperate on legislation provided at least nine member states participate, the measure gains the support of a majority of states and others can join at a later date.