France and Germany agreed that a planned pan-European tax on financial transactions should cover all derivatives products, a source close to French Finance Minister Pierre Moscovici said yesterday.

President Francois Hollande and Chancellor Angela Merkel said after a joint meeting of their two Cabinets in Paris that they wanted other EU partners to agree on such a levy by European Parliament elections in May.

France and its banks have in the past warned that imposing a transactions tax across the board of financial products could damage Europe’s financial sector.

But Germany has in recent days suggested a compromise under which different components of the tax could be phased in over time. “France and Germany agreed on the principle of a financial transactions tax covering all derivatives, not just equity derivatives,” the source said.

While Hollande and Merkel signalled their will for the 11 countries who back the tax to conclude a deal on it by the European elections, it was still not clear how high the final tax would be and when it would be applied to specific products.

Asked whether he favoured a phase-in of the tax as suggested by German Finance Minister Wolfgang Schaeuble, Hollande said such ­details would be worked out in minister-level discussions.

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