Controversial proposals for a financial transaction tax in parts of Europe are back on the table, after France and Germany reignited plans to introduce the levy.

Last week, the French and German finance ministers sent a joint letter to the European Commission and their European Union colleagues seeking an ‘enhanced co-operation’ accord to allow the tax to go ahead. It is believed that Austria, Belgium, Portugal and Slovenia have now also sent similar letters to the Commission.

“We strongly believe in the need for a fair contribution from the financial sector to cover the costs of the financial crisis,” Pierre Moscovici of France and Wolfgang Schäuble of Germany wrote in the letter. “We would be very grateful if you were to show your willingness to go forward with this issue and participate in this matter. The request should be submitted as soon as possible.”

At the earliest, there could be an agreement next month to move ahead with the plans. Under an enhanced co-operation, nine or more member states need to agree on a proposal to pursue their own initiative. So far, six have signed up. Once nine are on board, a formal request will be sent to all 27 member states, where it would then need to be approved by a qualified majority, before the legislation could begin to take shape for the smaller group.

EU officials say that any tax, which would generate billions in revenue for the European Commission, is unlikely to be in operation until the second half of 2013. An EU-wide financial transaction tax, which would have needed unanimous support from the 27-nation bloc, was kicked into touch in June after the U.K., Sweden and several other member states rejected a European Commission proposal. Negotiations have been ongoing since then to secure the nine needed for enhance co-operation.

Some nations who are seriously considering joining up with European heavyweights France and Germany over the introduction of the levy are worried that other countries that don’t may unfairly benefit from opting out.

“The risk to Finnish jobs and Finnish economic growth is extremely great if Finland signs up and our neighbors don’t,” said Finland’s prime minister Jyrki Katainen in a television interview last week, in reference to near-neighbors Sweden. “So, altogether this could be a good idea if it is broad-based enough.”

The European Commission is proposing a 0.1% tax on all share and bond transactions and a 0.01% levy on derivatives trades, with a potential exemption for pension funds.

The introduction of a financial transaction tax, which is aimed at making the financial services sector pay for the global financial crisis, could have severe implications for capital markets, though.

High-frequency traders—who perform millions of rapid trades, each yielding a tiny profit— and proprietary trading firms would likely be hit hardest by any levy as their profits would diminish and liquidity would potentially vanish from the markets. Market structure could break down or participants could locate to other jurisdictions. Many buy-side institutions are also against such a tax as they fear wider spreads, higher transaction fees and a dramatic drop-off in volumes.

Earlier this year, Edouard Carmignac, chairman of French firm Carmignac, one of Europe’s largest fund managers, said that any financial transaction tax is “not as fair as it may seem”.

“This tax will have to be trickled down from the buyers, to the sellers, to the intermediaries and the savers,” he said. “This will affect pensions and there will be economic growth consequences.”

Meanwhile, in August, France introduced its own version of the financial transaction tax, although it is more along the lines of the U.K.’s own stamp duty reserve tax of 0.5% on share transfers, which raises in the region of £3 billion each year for the Chancellor of the Exchequer.

The French plan, which is being championed by socialist president Francois Hollande in a bid to tax the nation’s wealthier individuals, is a 0.2% tax on equity securities and equity instruments issued by companies with a capitalization of more than €1 billion. There are also levies imposed on high-frequency trading and a tax on naked sovereign credit default swaps.

“The U.K. government is standing firm in its opposition to the Robin Hood Tax, though in fact the French FTT is modeled on the U.K.’s own 0.5% financial transaction tax on shares—the stamp duty,” said the Robin Hood Tax campaign, a lobby group that is firmly against the FTT. “Curiously, the UK government rarely mentions the stamp duty—perhaps as it undermines their arguments against the financial transaction tax.”