Home News Luxembourg dents EU hopes of deal to end banking secrecy

Luxembourg dents EU hopes of deal to end banking secrecy

Published on 14/11/2013

Luxembourg warned Thursday that EU finance ministers will be wasting their time on a bid to secure a deal for an early end to banking secrecy at two-day EU talks.

Finance ministers from the 28 European Union member states will be asked Friday to give their unanimous consent to the automatic exchange of information on personal savings accounts by the end of 2013.

However, a Luxembourg government statement insisted that “any step towards more exchange of information had to be accompanied by an enhanced ‘level playing field’” with third countries, in particular non-EU neighbour Switzerland.

Luxembourg has said it will accept the automatic exchange of bank account information within the EU by 2015.

However, European Commission negotiations with non-EU countries “have not yet yielded results that would suffice” to move now.

Luxembourg, which along with Austria has long blocked or slowed progress on a measure seen as a key step in curbing tax evasion, argues that the EU could thus hand its closest rivals a competitive edge.

It says the same standards must be applied “by all the major financial centres in order to avoid a flight of capital out of the EU and preserve the EU’s capacity to invest in order to bolster the economy and growth.”

Oxfam has estimated that more than $12 trillion (9.0 trillion euros) is hidden in EU-anchored tax havens — with Britain and its dependencies alone, from Guernsey to Grand Cayman, accounting for more than half.

At a May summit of EU leaders that set the year-end deadline, French President Francois Hollande claimed that the tougher rules would enter force regardless of progress on parallel negotiations with Switzerland, Monaco and other financial centres.

Liechtenstein said on Thursday that it would sign this month an international agreement on fighting tax evasion brokered by the Organisation for Economic Co-operation and Development.