Ministers bury Robin Hood tax, splinter version possible

During the discussions, more than ten countries spoke in favour of a so-called enhanced co-operation which would allow a minimum of nine states to go forward with legislation when there is no consensus at 27. But less than nine were definitely onboard the splinter group, while the others, including the UK, said they had nothing against enhanced co-operation as long as it does not affect the internal market.

As outlined by Hubert Legal, the head of the Council of ministers' legal service, five steps need to happen in order for enhanced co-operation to come into force.

Acknowledging there is no consensus for an EU-wide law is only the first step. At least nine countries then need to write a letter to the EU commission detailing the scope and objectives of what they want.

At this stage there could already be problems. There are legal uncertainties linked to the internal market and a broader question of principle for some. The Irish finance minister noted that this is the first time enhanced cooperation would be used on a major economic dossier "setting a precedent over taxation, a sovereign matter."

The legal advisor also noted that small groups cannot forge ahead on areas of exclusive competences - meaning that money raised from the tax could not be used to fund the EU budget, which is in the sole power of the commission.

After the commission tables a proposal on the enhanced co-operation, a majority of 27 ministers have to agree on allowing the splinter group to go ahead. The legal proposal following this procedure then has to be negotiated with the European Parliament, which has to approve it or reject it.

"Well, it is not for tomorrow then," Vestager quipped at the end of the legal analysis, handing over the dossier to the Cypriot EU presidency which starts on 1 July.

"Today ministers gave a thousand knife stabs to the FTT, which is seriously bleeding," one EU diplomat commented on the outcome of the discussions.

Austrian minister Maria Fekter meanwhile stressed it was important for her parliament to get a signal that enhanced co-operation on the financial transactions tax was possible, otherwise it would not ratify the treaty establishing the European Stability Mechanism, the permanent bail-out fund.

Following a meeting with his Italian, German and Spanish counterparts in Rome, French president Francois Hollande pledged to get the FTT off the ground as soon as possible.