FRANCE sought Tuesday to break the deadlock over plans among 11 EU countries for a tax on financial transactions with a proposal to levy a fee on trading shares in their companies’ according to where brokers are based.

    The countries involved are struggling to agree the scope of the tax, designed to make banks pay for the public aid they received in the 2007-09 financial crisis, and how it will be applied before a Dec. 31 deadline for a deal.

    Finance ministers are due to discuss the tax Friday in Brussels. Failure to get a deal by the year-end deadline would be a political embarrassment for France and Germany, the tax’s main backers from the start.

    The countries planning to apply the tax are divided between those wanting a levy on companies’ shares based on where the firm is based, and those wanting it applied according to where the bank dealing in the shares is based, French Finance Minister Michel Sapin said in a contribution published in Les Echos newspaper in France and Handelsblatt in Germany.

    Some smaller countries have been concerned that a levy only based on where a company is based would yield little revenue since they generally have fewer listed firms.

    Sapin said the tax should apply to listed companies based in the 11 countries but that the revenues received should go to the country hosting the bank that handled the transaction.

    “Thus, in the case of a share in a French company bought by a Portuguese bank, the revenue would go to Portugal,” Sapin wrote, describing his proposal as a “compromise.”

    “If the same share were bought by a French bank or a bank residing outside the 11 countries (applying the tax), the revenue would go to France,” he added.

    Turning to the equally tricky issue of what financial derivatives to cover, Sapin said all credit default swaps that are not handled by clearing houses should be targeted from the get-go.(SD-Agencies)