The European Commission on Wednesday proposed a financial transaction tax expected to take effect from 2014 and raise about 57 billion euros ($78 billion) a year.

The plan will set minimum tax rates for financial transactions in the 27 member states of the European Union, the European Commission said in a statement.

"The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU. The exchange of shares and bonds would be taxed at a rate of 0.1% and derivative contracts, at a rate of 0.01%," the statement said.

The tax is expected to raise approximately 57 billion euros every year, part of which would be used to prop up the EU budget, the statement said.

The new tax would make the EU financial sector contribute to economic recovery and discourage risky financial transactions throughout the European Union, the statement said.

RIA Novosti