Eurogroup chief calls for alternative to finance tax

(BRUSSELS) - Luxembourg's prime minister, who heads the group of eurozone finance ministers, voiced reservations on Tuesday over a French drive to impose an EU-wide tax on financial transactions.

Jean-Claude Juncker suggested that the European Union should pursue an alternative to the financial transactions tax, which is staunchly opposed by Britain.

"I am strongly in favour of holding the financial sector accountable in a broader way in the financial consequences of the crisis," Juncker said at a conference on the economic crisis in Brussels.

"Is this tax the answer?" he said, noting that a European Commission proposal for a cross-border tax "is not supported by various governments, including in the eurozone."

He added: "My suggestion is to keep the same goal and to look for a different instrument."

Although Berlin has previously voiced support for the French-led initiative, German Finance Minister Wolfgang Schaeuble said last week that he would seek alternatives to the financial transactions tax (FTT).

"Instead, I will now back equal alternatives, such as extended stock market tax and one which has the broadest possible backing," Schaeuble said.

Britain, home to 80 percent of Europe's finance industry, has warned that it would prompt investors to flee the 27-nation bloc.

Former European Central Bank chief Jean-Claude Trichet, who spoke at the same conference as Juncker, stressed that such a tax would only be effective if implemented worldwide.

"If it is done at a global level, at a level playing field, it could be imaginable," Trichet said. "But if it's not a global move, it's shooting your own feet."