Tax on financial transactions illegal, say EU lawyers

A plan to tax financial transactions in 11 European Union member states from 2014 is illegal, the bloc’s lawyers have concluded, dealing what could be a final blow to the measure as proposed.

The opinion is not binding and Germany which backs the tax aimed at making banks pay governments about €35bn a year after receiving taxpayer aid during the 2007-09 financial crisis, said it still wants swift introduction of the levy.

But the conclusions of the 14-page legal opinion will make it harder to push the measure through in its current form, particularly as it is already fiercely opposed by several EU members including Britain, the bloc’s largest financial centre.