EU ministers to discuss plans to crack down on tax havens 03/03/2008 00:00

The European Union's finance ministers were expected to discuss Germany's wish to clamp down on European tax havens such as Liechtenstein on Monday and Tuesday.

3 March 2008

BRUSSELS - The European Union's finance ministers were expected to discuss Germany's wish to clamp down on European tax havens such as Liechtenstein on Monday and Tuesday.

Officials in Berlin confirmed earlier reports that German Finance Minister Peer Steinbruck planned to raise the issue during the two- day meeting in Brussels.

Ministers were expected to discuss calls for countries with similarly secretive banking rules, such as Andorra, Monaco and Switzerland, to cooperate more closely with their neighbours on taxation issues.

German prosecutors have launched a major tax evasion probe which has targeted hundreds of German nationals who have opened accounts in the secretive and tiny Alpine state.

The investigation has uncovered millions of euros worth of tax evasion and has inspired similar probes in other European countries, including Finland, Sweden, Norway, the Netherlands, Britain, France, Italy and Spain.

Prosecutors in the United States, Australia and New Zealand have also joined the hunt for tax dodgers who have deposited money in Liechtenstein.

The European Union executive, the commission, has said it is ready to revise its Savings Tax Directive, which regulates such matters.

A spokeswoman for the EU's taxation and customs union commissioner, Laszlo Kovacs, said the executive was ready to speed up its work and close any loopholes in the Savings Tax directive.

But the spokeswoman also pointed out that tax-related measures need the unanimous backing of all 27 member states.

Tuesday's Ecofin meeting was taking place against a backdrop of deteriorating economic conditions within the bloc.

That meeting was being preceded by a meeting late on Monday restricted to finance ministers from the 15 countries that share the euro, the bloc's common currency.

Eurozone gross domestic product is forecast to grow by just 1.8% in 2008, compared with 2.7% in 2007, while inflation has remained stable at 3.2% over the last two months due to high energy and food prices.

The inflation figure is way above the European Central Bank's 2.0% target.