It appears that intense lobbying by the financial sector in Brussels has paid off as European Union member states are now looking at watered down alternatives to a full-scale financial transaction tax.

During the latest meeting of EU finance ministers in Copenhagen last week, Germany’s Wolfgang Schäbule put forward an alternative graduated proposal, starting with a tax imposed only on the stocks and shares of companies listed on exchanges.

“We said we wouldn’t say there could only be one solution but we’re making an effort to find common positions and we’ll see how we can advance that in the next weeks,” said the German finance minister.

“This would not be the end of negotiations on the broader and more ambitious financial transaction tax sought by the Commission, which also covers bonds and derivatives, but the continuation of the negotiations should not impede the rapid implementation of a tax on shares.

“While this first step is put in place, we have to work to extend taxation to other instruments so that we can achieve the comprehensive taxation of financial transactions as proposed by the Commission.”

By proposing a tax on shares, Schäbule is reaching out to get the UK on board to then secure a consensus at EU level. British prime minister David Cameron is a harsh critic of the original financial transaction tax proposals. In the UK, a stamp duty reserve tax of 0.5% has operated for many years and raises in the region of £5 billion each year for the Chancellor of the Exchequer.

In September last year, the European Commission released details about plans to introduce a continent-wide financial transaction tax—envisaged to come into effect in January 2014—with a 0.1% tax on all share transactions and 0.01% levy on derivatives trades that could generate up to €57 billion annually.

However, it seems that opposition from the UK, the Netherlands, Sweden, the Czech Republic, Ireland, Malta and Luxembourg, as well as intense lobbying from the financial services sector, has scuppered plans for its introduction. The Swedish finance minister Anders Borg called for the original proposals to be taken off the table at Copenhagen last week but wants to participate in Schäbule’s share tax plan as it is “preferable to abandon the European Commission’s proposal to find a pragmatic solution”. It does appear that Denmark, the current holder of the EU presidency, has an uphill task to have even a compromise proposal in place by June, as intended.

One non-profit research and campaign group, Corporate Europe Observatory, believes that scaremongering by the financial industry has led to this current impasse.

“Banks, hedge funds and traders have pulled out all the stops to try and prevent the Robin Hood tax being introduced in Europe or the eurozone,” said Ester Araúzo, a researcher at Corporate Europe Observatory. “And their friends in government in the UK, Ireland and elsewhere seem to have killed off the idea. The eurozone is divided and now France and Germany, who have expressed support for the idea, are scrabbling around in the sand trying to come up with a watered-down alternative.”

France, meanwhile, intends to push ahead with plans introduce its own tax in August, akin to the stamp duty tax currently imposed by London on stock market transactions.