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$1 TRILLION TAX EVASION

EU's 'big six' agree to fight tax havens

Dublin, April 13, 2013

 

The European Union's six biggest countries have agreed to cooperate in the fight against tax havens, piling pressure on Austria to follow Luxembourg in ending bank secrecy.
 
The finance ministers of Germany, France, Britain, Italy, Spain and Poland announced their plans to push for more bank transparency within Europe and beyond.
 
Tax evasion deprives EU governments of roughly 1 trillion euros ($1.3 trillion) annually. France, in particular, wants to underscore its determination to tackle tax fraud.
 
"Nobody can deny that bank secrecy is outdated, that we need an efficient system to tackle evasion strategies," French Finance Minister Pierre Moscovici told reporters, flanked by his counterparts from the other countries. "Our mission is to create momentum. When these six major capitals of Europe move together, it creates a strong signal which nobody can resist."
 
George Osborne, Britain's finance minister, said he was pushing for more transparency from the UK overseas territories of the Cayman Islands and British Virgin Islands.
 
"The places that you can hide are getting smaller and smaller," he said. "We are in advanced stages of discussions," he said of talks with the two territories. "They are in no doubt about what we expect."
 
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The announcement adds to pressure on Vienna to sign up to EU rules for the automatic exchange of information on bank depositors. It follows Luxembourg's decision this week to share foreign bank account details with EU governments from 2015, bringing it into line with all other member states bar one - Austria.
 
Earlier, however, Austrian Finance Minister Maria Fekter dismissed exchanges of information as an invasion of privacy and criticised other countries for failing to tackle what she called the real "hot spots" of money laundering.
 
"Austria is sticking to bank secrecy," Fekter told reporters, placing her country in a minority of one when discussions on the issue among 27 EU ministers get fully under way on Saturday.
 
She attacked the Group of 20 top economies for not taking "any step to close the money laundering in all the islands like Cayman Islands, Virgin Islands or ... in Delaware".
 
Fekter faces a difficult fight. 
 
France's former budget minister Jerome Cahuzac is under investigation for fraud after admitting lying about having a Swiss bank account, an affair that has prompted criticism of French President Francois Hollande.
 
It is unclear if Fekter will have her way even in Austria, with some voices pushing for a more moderate approach, including Chancellor Werner Faymann. He has said it would be possible for Austria to share information on foreigners' accounts without violating banking secrecy.
 
EU leaders will also discuss how to combat the tax haven issue when they meet next month, said the president of the European Council Herman Van Rompuy.
 
"We must seize the increased political momentum to address this critical problem," Van Rompuy, who chairs meetings of EU leaders, said in a broadcast statement.
 
Saturday's discussion could see some frank exchanges between Germany, whose finance minister Wolfgang Schaeuble has campaigned against bank secrecy, and Fekter, who has promised to fight "like a lion" to keep it.
 
"Every country is independent in its own tax policy but this also means they should abstain from preventing other countries to legally tax their own citizens," Schaeuble told journalists.
 
Confidentiality is so cherished in Austria that banking secrecy is anchored in the constitution. It has deep traditional roots.
 
"Automatic exchange of information involves a massive interference in people's privacy rights," Fekter said on Friday. "Here the state sniffs around deep into the private affairs of account holders."  -Reuters



Tags: EU | Austria | tax evasion |

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