The intervention by US Treasury Secretary, Tim Geithner, led to a row at an already tense meeting dominated by the Greek debt crisis. Polish Finance Minister Jacek Rostowski said there had been “very considerable divisions” during the discussions.
However, despite the opposition of Mr Geithner and Chancellor George Osborne, who remains publicly supportive only of a global tax on financial transactions, claiming an
EU tax would damage London’s financial services sector, European countries have vowed to go ahead with the proposal.
Draft legislation for a tax in the EU is expected to reach the European Parliament and European Council
ahead of the next G20 summit on October 13.
According to a leaked working document, the European Commission is planning the tax to deal with a wide range of financial products, with a tax rate of 0.1 per cent on stocks and bonds and 0.01 per cent for derivatives.
It is understood that the remaining issues of contention concern how the tax revenues would be collected and how they would be used.
While Commission President José Manuel Barosso argued in the summer that the tax should be used to fund the EU budget, opinion is divided on whether revenues should be earmarked for development spending, domestic budgets or EU rescue funds.
Meanwhile, opposition to the tax among EU finance ministers is declining following a co-ordinated move by the German Finance Minister, Wolfgang Schauble, and the French Minister for the Economy and Finance, François Baroin, urging its introduction.
The British, Dutch and Swedish governments remain its main opponents within the EU, with the Dutch government currently offering support for a financial transactions tax only if Britain signs up to it.
The campaign in favour of the tax at EU level was led by the Party of European Socialists and has drawn together NGOs and politicians from all sides of the political divide.
