Switzerland must be ready for G20

6th March 2009, Comments 0 comments

Finance Minister Merz considers bank secrecy options in response to blacklist threat.

GENEVA - Switzerland needs to be ready to negotiate over its bank secrecy laws before the Group of 20 summit in London in April, Swiss Finance Minister Hans-Rudolf Merz said Thursday.

"Before 2 April, we should have a response... a basis to negotiate politically," Merz told reporters.

France and Germany are proposing a tax haven blacklist be developed for the G20 meeting on managing the global slowdown, which many believe was partly caused by secrecy in the financial system.

Bank secrecy, the pillar of Switzerland's financial services industry, was targeted as a cause because it makes it difficult to track money and judge risk.

British Prime Minister Gordon Brown, the host of the G20 summit, also advocated for reform.

Merz said Switzerland had three possible options on managing banking secrecy: maintaining the status quo, abolishing the practice, or developing the concept "dynamically."

"The third possibility is that Switzerland dynamically develops banking secrecy as it has done with the European Union in the area of taxes on interest arising on savings," he said.

"Personally, I favour the third way. I cannot imagine abolishing banking secrecy. It is part of the social attitude of our country," he said.

Citing the example of an accord with the EU, Merz said the bloc asked Switzerland to either offer complete information on European citizens' banking data or to impose taxes on interest from deposits.

"Switzerland has picked taxes on interest ... Why not expand it to non-EU countries, if they are willing to negotiate with us?" Merz suggested.

France and Germany want to develop a blacklist of tax havens that would punish uncooperative countries by breaking off fiscal agreements with them.

Asked after an EU summit in Brussels in late February whether Switzerland could find itself on the blacklist, French President Nicolas Sarkozy replied, "That depends on their response but as things stand ... the answer is probably, yes."

AFP / Expatica

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