Updated - Germany, France and nine other euro zone countries got a go-ahead today to implement a tax on trading, despite the reservations of financial centres such as London and Luxembourg (as well as Malta) that are worried it could drive business out of Europe.

EU finance ministers gave their approval at a meeting in Brussels, allowing 11 states to pursue a financial transactions tax. The 11 are: Germany, France, Italy, Spain, Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia.

The levy, based on an idea proposed by U.S. economist James Tobin more than 40 years ago, is symbolically important in showing that politicians, who have fumbled their way through five years of financial crisis, are getting to grips with the banks blamed for causing it.

The tax could be introduced within months.

Although critics say such a tax cannot work properly unless applied world-wide or at least Europe-wide, some countries are already banking on the extra income from next year, which one EU official said could be as much as 35 billion euros annually.

Under EU rules, a minimum of nine countries can cooperate on legislation using a process called enhanced cooperation as long as a majority of the EU's 27 countries give their permission.

Malta is staying out because it fears the tax will harm the competitiveness of its financial services centre.

Germany and France decided to push ahead with a smaller group after efforts to impose a tax across the whole EU and later among just the 17 euro zone states foundered.

Sweden, which tried and abandoned its own such tax, has repeatedly cautioned that the levy would push trading elsewhere.

"COURSE OF LEECHES"

Critics say the levy could open another rift in Europe, where the 17 states using the euro are deepening ties in order to underpin the currency, and there is the growing risk that Britain could even leave the European Union.

Britain, which has its own duty on the trading of shares, has criticised the tax, and will not adopt it.

In today's vote, Britain, Malta and the other countries which have expressed concern about the impact on states that do not join the scheme abstained.

While the levy will hit banks and trading firms, the likelihood is that the cost will be passed on to clients and consumers.

But proponents of the scheme, including German Finance Minister Wolfgang Schaeuble, believe it can tackle activity some deem speculative, such as high-frequency trading, by imposing a charge on every split-second, computer-driven deal.

But Nicolas Veron, a financial market expert at Brussels think-tank Bruegel, said the tax is misguided.

"There are so many things that we don't understand about the financial system, in much the same way that 17th-century doctors could understand a couple of things about the human body but not the whole picture," he said.

"Using a tax on financial transactions to tackle the ills of finance such as high-frequency trading could turn out to the equivalent to a 17th-century course of leeches."

Some countries are already counting on the new income, a welcome windfall for countries where shrinking economies and rising unemployment are sapping other tax income.

As soon as ministers give the 11-nation plan the go-ahead, the next step is for the European Commission to draft its plans for the tax.

It is likely to suggest taxing stock and bond trades at the rate of 0.1 percent and derivatives trades at 0.01 percent.

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