French Push Evasion To Top Of EU Agenda

Paris still reeling from revelations the budget minister charged with tackling tax evasion held €600,000 in a secret Swiss bank account, the French finance minister foisted the issue on to the EU’s agenda on Saturday, calling on his counterparts to share more data on accounts held by foreigners in their domestic banks. Pierre Moscovici, speaking at a high-profile meeting of EU finance ministers in Dublin, said European bank secrecy rules were outdated and that Europe should help set new international standards that are currently being negotiated on a bilateral basis with the US. “At the present time, the situation calls for a more efficient, for a stronger, for a faster reply,” Mr Moscovici said at a hastily-called press conference the night before Saturday’s meeting. “Political will is strong in France and we are more resolute than ever.” The rushed nature of the initiative was highlighted by the unexpected appearance of Algirdas Semeta, the EU tax commissioner, who flew to Dublin at the 11th hour to help broker a deal on EU anti-tax evasion legislation that has been awaiting action for nearly five years. “It’s a bit of a surprise, but a very nice one, to be here in Dublin today,” Mr Semeta told reporters. EU officials estimate countries lose about €1tn every year in tax revenues due to evasion. Mr Moscovici and his German, British, Italian and Spanish counterparts agreed last week to begin a “pilot” project to share information on foreign EU nationals with accounts in their country based on the same kinds of exchanges recently agreed with the US as part of Washington’s new Foreign Account Tax Compliance Act. Five other countries agreed to participate in the scheme at the Dublin meeting, including Poland, the Netherlands and Belgium. But an EU-wide deal to widen its regime along US lines was held up by Austria, which has refused to sign up to the long-delayed proposal by the European Commission, arguing it would infringe on the country’s data protection laws. Luxembourg, the only other holdout, agreed to participate last week. “We will fight for bank secrecy. We are no tax haven,” said Maria Fekter, the Austrian finance minister. Earlier, Ms Fekter lashed out at the UK, saying that persistent use of the Channel Islands as well as overseas territories like the Cayman Islands and the British Virgin Islands as tax havens should be part of the discussion, calling Britain “the island of the blessed for tax evasion and money laundering”. George Osborne, the British finance minister, said the Channel Islands recently signed agreements to provide information on account holders as part of the US negotiations and said London was in “advanced discussions” with the overseas territories on similar exchanges. The extent to which the French scandal – in which Jérome Cahuzac, a junior finance minister, was forced to resign after acknowledging he had lied for months about the existence of his secret Swiss bank account – has moved tax evasion to the top of the EU agenda was made clear Friday, when Herman Van Rompuy, the European Council president, unexpectedly announced the topic would discussed at next month’s EU summit. In an interview, Poland’s Jacek Rostowski, who was the first finance minister in Dublin to join the five big EU countries in the “pilot” project, insisted the recent momentum was not about the French scandal and instead about ensuring fairness at a time taxpayers in many EU countries are suffering through tough austerity and reform efforts. “I must say the thought never even crossed my mind,” Mr Rostowski said of the French controversy. Approval ratings for François Hollande, the French president, have plummeted to historical lows in the wake of the scandal, prompting him to call for the eradication of tax havens and launch a campaign against fraud. Despite the Austrian objections, Mr Semeta said he expected an EU-wide agreement “within weeks”, putting pressure on Irish officials, who as holders of the EU’s rotating presidency must now attempt to find a compromise between all 27 EU members before next month’s summit.

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