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EU finance ministers tackle tax-fraud

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(Globalpost/GlobalPost)

European Union finance ministers tackle tax fraud and money-laundering as they wrap up two days of talks on Saturday.

After a first day in Dublin focused on eurozone bailout issues -- tougher terms for Cyprus, easier repayments for Ireland and Portugal -- ministers want to flesh out a banking union that sets down the pecking order for creditor losses in future Nicosia-style private-sector "bail-ins".

But the issue the big six EU states want to resolve is how to claw back a hoped-for trillion euros each year in unpaid taxes by cutting off escape holes and sharing customer bank data across borders.

The finance ministers of Britain, France, Germany, Italy, Poland and Spain staged a joint press conference late on Friday to press the case for uniform tax and bank information rules across the EU to ensure that governments get their revenue.

The EU has been tightening up progressively on tax evasion and money laundering as the debt crisis forces governments to look for every penny in revenue.

Most member states appear ready to go along but Austria in particular is holding out, insisting that individual privacy is paramount -- including especially bank account details.

Changing tax law across the European Union requires all member countries to give their approval, without exception.

But holdout Austria says the drive is simply "government snooping".

The six countries, wanting to match the United States, said they want to push the cause at the International Monetary Fund, the G20 and OECD as a government fightback against money-laundering and fraud.

"This fight, this is not only national, a European fight -- but a fight at the global level," French Finance Minister Pierre Moscovici said.

"Our message to those who try to evade taxes is this: places where you can hide are getting smaller and smaller," added Britain's George Osborne.

France has threatened to blacklist Austria.

Vienna in turn has pointed an accusing finger at British Crown Dependency tax havens such as the Cayman Islands.

Austrian Finance Minister Maria Fekter said Vienna would "stick to" a constitutionally-guaranteed protection of privacy for deposit-holders.

Automatic sharing of account data "is a massive intrusion of privacy", and the result would be governments "snooping in the affairs of depositors", Fekter warned.

Inspired by a 2010 US law requiring automatic reporting of bank account information, the group of six have written to the executive European Commission seeking an EU-level take-up.

The issue is shooting up the agenda and will top a May 22 EU leaders summit.

Austria is now seen as the last EU holdout after Luxembourg -- the other EU banking haven that blocked legislation in this area for years -- indicated a readiness to lift some barriers in 2015.

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http://www.globalpost.com/dispatch/news/afp/130412/eu-finance-ministers-tackle-tax-fraud