EU ready to relinquish its internal tax havens

Press conference by Algirdas Šemeta, Member of the European Commission, on a comprehensive package to strengthen the fight against tax evasion and aggressive tax planning in the EU. (EC Audiovisual Services).

Press conference by Algirdas Šemeta, Member of the European Commission, on a comprehensive package to strengthen the fight against tax evasion and aggressive tax planning in the EU. (EC Audiovisual Services).

The upcoming Ecofin and Eurogroup meetings in Dublin on 12 and 13 April may be informal but they are expected to introduce a ground breaking policy initiative. The new idea is that the 27 European Union countries should mutually abolish their banking secrecy rules and practices vis-à-vis the tax authorities of all member states. In short the EU is about to relinquish its internal tax havens.

According to the new plan detailed information about citizens’ bank accounts should be mutually and automatically supplied on judicial or tax authority requests, amongst the 27 EU member states. The initiative may look like being of German origin but it has the backing of all the major capitals of Europe, including London and Paris. Wolfgang Schauble, the German Federal Minister for Finance, asked last week that this theme must be introduced in the agenda of both meetings.

The issue touches on two very sensitive subjects which have been tormenting the European Union of the 27 members states and more so the Eurozone of the seventeen countries. It’s about the internal ‘tax havens’ which reputedly exist in Cyprus, Malta, Estonia, Luxembourg and probably in Austria, Slovenia and elsewhere in the European Union. The timing of this new policy initiative is obviously related also to the creation of the European Banking Union and the problems of failing banks in certain member states with overgrown financial sectors, which usually exist in tax havens. In the cases of Malta, Cyprus and Ireland the assets of the banking sector surpass by eight times the GDP of the country, while in Luxembourg this ratio skyrocketed in the double-digit region.

Obviously the central EU powers, that is Germany, France and Britain would love to see much of the business now conducted by all those small peripheral EU financial centres, to be diverted to London, Frankfurt and Paris. It’s not only that however. In the case of Germany and France there is also a strong interest to avoid more unpleasant surprises from this built-in unknown factor in Eurozone’s financial markets. Related to this it’s the taxpayers’ cost of rescue operations of banks and countries alike, as in the cases of Ireland, Spain and Cyprus. Italy will probably be the next entry in this list.

Vienna’s fortification

The strongest opposition however to this new EU action against tax evasion came from unexpected quarters. It was not Luxembourg or Malta but Austria the country that said decisively no to the opening of its bank accounts for the legal and tax authorities of the other 26 member states to watch. The Austrian government is the only one to resist this. Luxembourg’s Prime Minister Jean-Claude Juncker said that the Grand Duchy will materially relax its bank secrecy laws vis-à-vis the authorities of the other EU member states, arousing though internal political reactions from opposition parties.

As the issue develops Vienna is now the only EU capital insisting in keeping impenetrable fortifications around its banking industry. According to a yesterday’s statement by Algirdas Šemeta, the EU Commissioner responsible for taxation, customs, statistics, audit and anti-fraud, “over the past few days, many of the Member States have reviewed where they stand on these issues and intensified their political will to act. Now it is time to put words into action. I hope to see rapid adoption of our proposals for a stronger EU stance against tax fraud and evasion”.

After Vienna’s negative announcement Šemeta came back and issued a strong reaction naming directly at Vienna’s fortifications. He said that the Austrian attitude is non-sustainable because all the other 26 capital have already agreed to mutually open their gates to tax authorities. The last act on this will be played in Dublin this Friday.




the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Antitrust: Commission fines Valve and five publishers of PC video games € 7.8 million for “geo-blocking” practices

European Youth Forum welcomes steps towards raising awareness of youth rights by EU ministers

FROM THE FIELD: Stopping aquatic hitchhikers to safeguard environments at sea

Changing world of work needs new jobs strategy

This company grows crops inside, stacked on top of one another

Further reforms in France can drive growth, improve public finances and boost social cohesion

Benefits of rural migration effect often overlooked, new UN report suggests

The essence of care is cosmopolitan

Access to healthcare: what do we lack?

Security Council: UN welcomes efforts to de-escalate crisis in northeast Syria

Libya stands at a ‘critical juncture’, UN mission head tells Security Council

Brands can be a force for good and for growth. Here’s how

Coronavirus in Brazil: mental health in tragedy

‘At risk’ Mediterranean forests make ‘vital contributions’ to development

EU to give more power to national antitrust authorities in a bid to secure regulatory fines

Gender parity has a huge role to play in the fight to save our oceans

Long-term EU budget: It is not possible to do more with less, say MEPs

Coldplay stop touring to save the world: is pop music going sustainable?

Where are the charities in the great Artificial Intelligence debate?

Canada has created an Arctic conservation zone almost as big as Germany

In a state of war: COVID-19 and psychiatric support

In tech-driven 21st century, achieving global development goals requires closing digital gender divide

How to talk about climate change: 5 tips from the front lines

Europe split in confronting the US sanctions on Iran, Washington isolated

UN rights chief welcomes new text to protect rights of peasants and other rural workers

COP25: Italy and Mexico pave the way on climate education

Climate changes and the imminent public health crises

Botswana has decriminalized gay sex. But, it’s still illegal in 70 countries

On Youth Education: “Just a normal day in the life of a medical student”

MWC 2016 LIVE: Getty chief says one in four new images from phones

This is what emerging technologies mean for the future of infrastructure

Stakeholder capitalism is urgently needed – and the COVID-19 crisis shows us why

EU will have stronger powers in trade disputes

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

5 droughts that changed human history

Driving structural change through global value chains integration

Women Win in the West

Promoting rule of law and fundamental rights in the EU

Mobile technology saving lives: Changing healthcare systems with simple technological solutions

Young translators at EU schools – Commission opens registration for 2020 translation contest

Satellites and data are going to help us phase out fossil fuels. Here’s how

‘The best-selling brand today is fear’: UN chief highlights urgent need to address global ‘deficit of trust’

The opportunity of studying Medicine abroad

Chart of the day: These countries have the highest share of electric vehicles

Towards a European Republic

Doing the right thing at the worst time: this is why protecting human rights protects businesses

Industry 4.0: Championing Europe’s fourth industrial revolution

These Harvard scientists think we’ll have to socially distance until 2022

To prevent coronavirus don’t touch your face – but how can you avoid it?

Strengthen inclusion, participation of people with autism to ‘achieve their full potential’ says UN chief

More than 90% of the world’s children are breathing toxic air

Fleeing Venezuela: MEPs to probe humanitarian conditions in Colombia and Brazil

‘Green economy’ pioneer Pavan Sukhdev wins 2020 Tyler Prize for Environmental Achievement

Ebola situation worsening in DR Congo, amidst growing ‘funding gap’ UN health agency warns

Gender minority and health sector: promoting mental health with better medical education

Countries are piling on record amounts of debt amid COVID-19. Here’s what that means

Why David Cameron’s large victory in UK elections will not pursue a ‘Brexit’

Benjamin Franklin was wrong: Amazon can tax evade

AI can help with the COVID-19 crisis – but the right human input is key

EU Commission retracts on the Chinese solar panel case

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s