The Wall Street Journal and Bloomberg reported on Friday that Austria and Luxembourg are threatening to block a European Union proposal to curtail bank secrecy and tax evasion. The two countries are pushing for 5 non-EU tax havens – Switzerland, Liechtenstein, Monaco, Andorra and San Marino – to join any tax deal before they agree to sign up.
The Luxembourg coverage on the site wort.lu seems to be mostly picked up from international press agencies. One of the articles notes that “Luxembourg, with an economy heavily dependent on financial facilities for foreigners, argued that the EU should first nail down equivalent deals with several neighbouring tax havens.”
An article in Switzerland’s Tages Anzeiger clarifies that when the Luxembourg and Austrian finance ministers say “third parties” they mostly mean Switzerland. It also notes that “The EU Commission is under time pressure, as the Directive should be in place by the end of the year”.
A Tages Anzeiger column in May this year went into detail about the challenges faced by Switzerland: it has several open negotiation fronts with the EU at the same time and is also under pressure from the G20. In this context, Switzerland’s traditional “cow-trading” style of negotiating with the EU is too risky, and the Anzeiger argues that Switzerland should join forces with Brussels within the OECD to push for a global information exchange system.