In light of growing international opposition, the EU, it was announced yesterday, is to revise – although ‘rein in’ would be a more appropriate way of putting it – its plans for the highly controversial, and potentially hugelydamaging, Financial Transactions Tax (FTT).

With officials from the European Commission, who proposed the FTT, (a tax scheduled to be implemented from 1st January 2014 and which will levy 0.1 per cent on transactions between financial institutions if just one of the institutions is based in a EU country) saying that they will now overhaul the plans by reducing the level of tax and significantly scaling back its scope, the move is being hailed as a victory by those in the City and financial industry across Europe.  And indeed it is a marginal one.

It is now expected that the levy will initially only apply to share trades and at a rate of 0.01 per cent – a tenth of what was originally proposed.

This climbdown is certainly a step in the right direction as the FTT wouldunquestionably hit investors and savers, reduce market activity – thereby severely compromising the real economy – and generate nowhere near the tax revenue that its proponents claim.

However, unlike some within the world of finance, I will not be celebrating just yet.

Although the revised proposals should be welcomed, the lobbying for the FTT to be scrapped altogether must continue –or even be stepped-up.

The new plans are still worse than the current system. They will still adversely affect over-taxed, debt laden economies.  They will still make it more expensive for firms to raise capital, and they will still slash market liquidity, reduce the value of pensions, and hit savers hard.

But the optimist in me feels that we can secure a complete u-turn on this issue; we can apply enough pressure that the EU ditches the FTT completely.  But, this will, of course, take a little longer to achieve as the bureaucrats in Europe will need to scrap it in stages in order to save face, as so much time and money have been invested in this fatally flawed project.

And if / when this happens, their spokespeople will say, as they so often say,that they have ‘listened to the concerns’ of the industry.