At a meeting of European finance ministers on 22 January, the European Council gave the green light to a financial transaction tax which will cover inter-bank trading in shares, bonds and derivatives. It is estimated the tax will raise 37 billion euros a year when introduced in 2014.
Anti-poverty campaigners have hailed the decision as a major victory in the battle for a more equitable banking system.
The financial transaction tax will be based on the 2011 proposal submitted by the European Commission, comprising a 0.1 per cent tax on shares and bond transactions and a 0.01 per cent tax on derivatives trades.
Although the UK government has refused to introduce the tax, the qualified majority in favour within the European Council means it can now go ahead via the enhanced cooperation procedure which has the agreement of Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Estonia, Slovakia and Slovenia.
The European Parliament voted overwhelmingly in favour of the tax in December 2012.