EU blessing for core nations" transaction tax Eleven eurozone countries on Tuesday won EU blessing to impose a co-ordinated levy on financial transactions, paving the way to a tax that could cream billions of revenues from trades taking place in London. At a gathering in Brussels, a majority of EU finance ministers gave approval for the creation of a vanguard transaction tax bloc, which is expected to include the eurozone's four biggest economies: Germany, France, Italy and Spain. The decision to endorse so-called "enhanced co-operation" between the small subset of countries sounds the death knell for an EU-wide regime but also means opponents of the levy - including Britain, Sweden and Luxembourg - give up their right to vote on what is actually implemented. The European Commission will soon propose details of the tax, which will start months or potentially years of negotiations on the exact rate and design. Some countries are pressing for the tax to be in place as soon as next year. The Brussels plan will be closely based on its original Commission blueprint for the entire EU, where stock and bond trades were covered by a 0.1 per cent levy and derivatives trades at 0.01 per cent tax. Algirdas Semeta, the EU tax commissioner, described the decision as a "major milestone" and signalled that it will be imposed on any trade involving a buyer or seller based in the tax bloc. This means offshoots of banks headquartered in the tax area - such as Deutsche Bank or BNP Paribas - as well as any trades undertaken on behalf of clients based in the 11 countries will be hit by the levy, even if they are trading in the City of London. Those based outside the tax zone - such as Barclays or Goldman Sachs - cannot be forced to pay the tax. But if their counterparty is liable, the full levy will be paid to eurozone states" coffers, if necessary by the eurozone trading party alone. Officials said in practice, buyers and sellers would have to indicate whether they were liable for the tax when they agreed a transaction, as well as whether they had agreed to share the cost. Under the Commission plan, transactions executed by a British bank in London trading on behalf of a French company, or a US bank trading with a UK branch of a German bank, would be liable. It is unclear whether all trades of by UK subsidiaries of banks headquartered in the transaction tax area would be covered. Complex rules are likely to be required distinguishing when the subsidiary is trading on its own behalf or acting on behalf of its eurozone parent bank. Richard Middleton of the Association for Financial Markets in Europe said the decision was "regrettable" and "likely to serve as another brake on economic growth." Britain, which abstained on the vote to endorse enhanced co-operation, is likely to press hard in coming months to ensure the tax does not apply to currency transactions and avoids overreach. In its original proposal, the Commission admitted the tax would discourage some forms of high-frequency trading and push derivatives business outside the tax area. "The financial sector should share the burden of costs of the financial crisis in an appropriate way," said Wolfgang Schäuble, Germany's finance minister, speaking in Berlin. We have come a good way closer to this goal. Those countries that have expressed interest in a transaction tax include Belgium, Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia and Slovakia.