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| European Commission presents financial transaction tax | European Commission presents financial transaction tax |
| (40 minutes later) | |
| The European Commission has formally proposed a financial transaction tax on all EU member states. | The European Commission has formally proposed a financial transaction tax on all EU member states. |
| The tax would raise about 57bn euros ($78bn; £50bn) a year and would come into effect at the start of 2014. | |
| Commission president Jose Manuel Barroso said banks must "make a contribution" as Europe faced its "greatest challenge". | Commission president Jose Manuel Barroso said banks must "make a contribution" as Europe faced its "greatest challenge". |
| However, the UK said it would resist any financial tax that was not introduced globally. | |
| Any such tax would need the approval of the UK in order to be implemented. | |
| The announcement comes as officials prepare to review Greece's progress in cutting its debt levels. | The announcement comes as officials prepare to review Greece's progress in cutting its debt levels. |
| 'Fair contribution' | |
| The financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%. | The financial tax would be levied at a rate of 0.1% on all transactions between institutions when at least one party is based in the EU. Derivative contracts would be taxed at a rate of 0.01%. |
| The commission said the tax was "to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the member states". | The commission said the tax was "to ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the member states". |
| It said financial firms had played a role in the current "economic crisis" and was "under-taxed" compared with other sectors. | |
| The "significant additional revenue" raised would contribute to public finances, it added. | |
| A spokesperson for the UK Treasury said it would "absolutely resist" any tax that was not introduced globally. | |
| "We would not do anything that is not in the UK's interests," he told the BBC. | |
| City of London officials have said that about 80% of any Europe-wide financial tax would come from London. | |
| 'Ensure discipline' | |
| Earlier, in his annual State of the Union address in Strasbourg, Mr Barroso called not only for the transaction tax but for eurozone members to issue debt collectively. | |
| "Once the euro area is fully equipped with the instruments necessary to ensure both integration and discipline, the issuance of joint debt will be seen as a natural and advantageous step for all," he said. | |
| Mr Barroso also dismissed speculation that Greece may be forced to leave the euro if it defaulted on its debts. | |
| "Greece is, and Greece will remain, a member of the euro area," he said. | |
| Further austerity | |
| Officials from the commission, along with those from the European Central Bank and International Monetary Fund, are due to begin reviewing Greece's attempts to reduce its debt levels on Thursday. | |
| They will then decide whether to release about 8bn euros from a 110bn bailout package agreed last summer, money the Greek government badly needs in order to pay its bills. | |
| A key obstacle to the payment was removed on Tuesday when the Greek parliament passed a controversial new property tax bill that aims to boost revenues. | |
| The tax is one of a number of austerity measures Athens is introducing, measures that saw Greece's budget deficit fall by more than 5 percentage points in 2010, Mr Papandreou said in a speech to German business leaders on Tuesday. | |
| The debt review comes amid reports of a split among eurozone members about further support for Greece. | |
| Citing "senior European officials", the Financial Times said a number of the bloc's 17 members want private investors to take a bigger hit in the proposed restructuring of Greece's debts. | |
| Eurozone members are in the process of ratifying proposals put forward in July, one of which would see private lenders writing off about 20% of their loans to Greece. | |
| The proposals also included expanding the powers of the eurozone bailout fund. Germany will vote on the plan on Thursday. | |
| Greek write-off | |
| There has been renewed optimism this week that eurozone leaders may finally be ready to take decisive action to tackle the debt crisis. | |
| G20 leaders met over the weekend to discuss the best way forward, but EU officials stressed that no grand plan of action had been agreed. | |
| A number of ideas were reportedly discussed, including a 50% write-down of Greece's government debts. | |
| Other proposals included strengthening big European banks that could be hit by any defaults by highly indebted governments, and boosting the size of the eurozone bailout fund. | |
| These helped to boost investor sentiment, with stock markets rising sharply on Tuesday. | |
| The Dow Jones in New York closed up 1.3%, while France's Cac index ended up 5.7%, Germany's Dax 5.3% and the UK's FTSE 4%. | |
| Asian and European markets were largely flat on Wednesday. | |
| However, markets remain highly volatile, with investors remaining sceptical of policymakers' ability to solve the crisis quickly. | |
| "Every time the market gets its hopes up that a solution to the eurozone crisis is near, the rug gets pulled from under it," said Ben Potter at IG Markets. | |
| "Only when we see firm action being taken, rather than hollow promises, will confidence and sentiment begin to improve." |