EU big guns gain ground in battle over tax-evasion
Austria defies mounting pressure to end bank secrecy
It would raise particular problems for Britain, where eurosceptics have argued that the country should quit the bloc.
Schaeuble has long had reservations about banking union, which would be a step towards allowing the euro zone’s rescue fund to directly assist banks, a move Germany fears might leave it facing the bill for reckless lending by foreign banks.
Schaeuble said the country of a bank in financial difficulty must first inject fresh capital before direct support from the European Stability Mechanism (ESM) is possible.
Spain’s Finance Minister Luis de Guindos said member states would pay a minimum 4.5 percent of capital for troubled banks.
“From that point, there would be a burden sharing to converge towards 10 percent paid by the member state,” de Guindos said. “This means the ESM will pay for around 90 percent and the member state for 10 percent.”
Schaeuble also emphasised German opposition to the creation of a joint deposit guarantee scheme. DUBLIN, April 13, (Agencies): Europe’s biggest countries gained ground Saturday in their bid to recover some of the one trillion euros lost each year to tax fraud and money laundering, despite hold-out Austria railing against government “snooping” into bank accounts.
After a first day of talks among finance ministers focused on eurozone bailout issues, European Union Tax Commissioner Algirdas Semeta said he expected a breakthrough on the automatic sharing of customer bank data across borders “within weeks.”
Cash-strapped governments want to claw back much-needed revenues at a time of recession and high unemployment, with the issue to top a May 22 summit of EU leaders.
Semeta said the first fruits should be agreement on a legal update covering savings taxation that has been stalled since 2008, plus a mandate to negotiate with Switzerland and other third parties on the exchange of bank account information.
German Finance Minister Wolfgang Schaeuble echoed those remarks after the talks ended, stressing his belief that “all member states will participate in the automatic exchange of information” before too long.
Schaeuble had appeared late Friday alongside his counterparts from Britain, France, Italy, Poland and Spain, each arguing that citizens demand “fairness” when it comes to tax, especially in tough times.
The EU has been tightening up on tax evasion and money laundering since the 2008 global financial crisis highlighted the problem alongside the reckless speculative fever that drove banks and countries into a ditch.
Luxembourg had held out with Austria, repeatedly blocking legislative changes, but last week it indicated a readiness to lift some barriers in 2015.
Privacy
Austrian Finance Minister Maria Fekter insisted in Dublin that individual privacy is paramount, although her chancellor, a political rival ahead of September polls, took a softer stance earlier in the week to suggest there was at least some room for negotiation.
Changing tax law across the EU requires all member states to give their approval, without exception.
Fekter said the drive was simply governments “snooping,” arguing that the automatic exchange of information with EU peers was “not necessary” because of a withholding tax Austria implements and which is subject to tax treaty controls with dozens of countries including the EU’s biggest.
Vienna passes taxes taken at source on to foreign governments — although anonymously — which Fekter argued, delivers “more money, and faster.”
She vowed: “We will fight (to retain) banking secrecy. I owe that to the Austrians.”
Backers of the plan, wanting to match the United States, said they aim to push the cause next week at meetings of the World Bank, the International Monetary Fund and the Group of 20 major economies.
“This fight, this is not only national, a European fight — but a fight at the global level,” French Finance Minister Pierre Moscovici said late Friday.
“Our message to those who try to evade taxes is this: places where you can hide are getting smaller and smaller,” his British counterpart George Osborne said.
Austria defied growing pressure to follow Luxembourg in ending bank secrecy, after a group led by Europe’s six biggest countries pledged to work together to tackle tax havens.