EU fight against tax-evasion and money laundering blocked by Britain

Maria Fekter, Austrian Federal Minister of Finance. (EC Audiovisual Services).

Maria Fekter, Austrian Federal Minister of Finance. (EC Audiovisual Services).

The informal Ecofin and Eurogroup councils that took place in the Dublin Castle this weekend had only one victim; the bank depositors. Tax evaders got away, with Algirdas Šemeta the EU Commissioner responsible for Taxation and Anti-Fraud, running after them brandishing only his “appetite for progress and action”.  In reality no real progress or action against tax-evaders was visible in the Irish horizon, despite the perfect view from the Dublin Castle. Let’s follow the facts.

This weekend’s informal Ecofin and Eurogroup councils, which regroup the ministers of Finance of the 27 EU member states and the 17 euro-area countries respectively, had two major tasks to accomplish. Contain tax evasion and decide over bank rescues. While the first one is the newest ‘baby’ in Brussels, the second one is already almost entirely shaped.

In confronting tax evasion the 27 ministers had to start with the construction of the tools needed for this giant operation. In this direction the first step was the very ambitious creation of a mechanism, which would open automatically the bank accounts of all citizens in all 27 member states, at the request of any tax or judiciary authority of the Union.

The tax-haven islands

This could have been a major breakthrough in fighting tax-evasion, if it was for real. Actually it looked as pragmatic until this weekend. It seemed like an honest effort, because the issue got a lot of publicity during this past week, with Germany exerting a lot of pressure on Luxemburg, an allegedly major EU centre, where tax evaders could hide their money. The pressure bore fruits and Luxemburg’s Prime Minister Jean-Claude Juncker said his country will relax its bank secrecy laws. Then everybody turned against Austria, another EU country with very strict legislation protecting bank accounts. Until this weekend the entire Europe was pressing Austria to join the rest 26 EU countries, which allegedly were ready to open all bank accounts held in their territory by EU citizens on the demand of any EU tax authority.

In view of this and given that Britain was supposedly between those 26 countries ready to open their banks accounts, some Brussels insiders not believing their ears, had been asking themselves if London knew about all that? As things turned out they were right, because Britain by joining the anti-tax evasion club didn’t mean to touch its money laundering and tax evasion paradises in the ‘independent’ Channel Islands. A look in Wikipedia’s List of the banks with a large presence in the Jersey Islands and the Isle of Man, will convince the non-believers that London is the largest and most effective and reliable money laundry and tax paradise in the world.

Obviously all that is common knowledge and the direct financial connections of the Channel Islands with the London markets don’t need any special proof. In contrast Austria provides protection to bank accounts, but not of the “numbered” anonymous kind, as Britain offers in the Channel Islands. For all those reasons Austria’s minister of Finance, Maria Fekter (plus her explosive character) couldn’t swallow this hypocrisy, watching London accuse Vienna of, God forbid, protecting tax evaders and offering money laundering.

Fekter on her way to Dublin promised to her compatriots to “fight like a lioness” to protect her country and its banking industry. Before that however Fekter all along last week had been very loudly accusing Britain of being the largest island money laundry and tax evader protector of the world. She actually lamented over poor little Cyprus being punished for something that Britain does by the trillions. As a matter of fact the whole world was informed by Fekter how good a money laundry and tax evaders’ haven is London and Britain. Clearly these facts are not all secret but the whole of Europe and the rest of the world to be loudly ‘reassured’ about that by an Austrian minister, was too much.

The result was that Fekter won the game. Returning home from Dublin yesterday night she proclaimed victory in the fight of Austria against all the other 26 EU countries. Who could resist her screams in the Ecofin and the Eurogroup councils, demanding honesty to prevail and English hypocrisy to be condemned? Understandably nobody wanted to protect Britain on that account and that is why there was no decision taken.

For the same reason the stony faced Commissioner Šemeta had nothing concrete to say afterwards, apart that as he put it, “a highly engaging discussion we had on tax evasion”. It was obvious that Britain had initially tried to ‘hide’ the Channel Islands form this discussion, but when it became clear that this was not possible, London blocked the whole affair. On tax matters EU decisions have to be unanimous. In any case it will be very interesting to see how this story will develop. For one thing the drive against tax evasion seems real in many countries, due to the large fiscal deficits. Some more taxes would be a great help, especially coming from tax evasion.

Bank rescues

The second important issue Ecofin and Eurogroup councils had to confront was Europe’s failing banks. Speaking after the meeting on the procedure to be followed about the rescue or the resolution of failing banks or about to fail banks Commissioner Michel Barnier very clearly confirmed what was already known. That is failing or about to fail European banks will be bailed-in by their deposits above the secured benchmark of the €100,000, exactly as it happened in Cyprus.

In detail the line of the assets to be used in the bail-in will be first the shares, then the uncovered bonds and thirdly the unsecured deposits. If all that prove not enough, then the national government will be called to contribute. Only then the European Stability Mechanism will be called to intervene in order to accomplish the rescue or the resolution of the bank in question.    

Portugal and Ireland

Last but not least the Ecofin and the Eurogroup reached an agreement to extend Portugal’s and Ireland’s EFSF and ESM loans by an average of seven years. Presiding in the Ecofin council the Irish minister of Finance Michael Noonan said, “The agreement reached to adjust the maturities on Ireland’s and Portugal’s loans by a maximum average of seven years is a significant step on Ireland’s and Portugal’s journey to a full and sustainable return to the markets.”

 

 

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

MEPs spell out their priorities for the Digital Services Act

What is carbon offsetting?

Turkish and Greek Cypriot leaders ready for talks with UN chief on improved relations

How to build a paradise for women. A lesson from Iceland

UN forum to bring ‘big space data’ benefits to disaster response in Africa

Iraq: UN mission urges ‘maximum restraint’ following deadly attack on foreign troops

Statement by Cecilia Malmström, Member of the EC in charge of Trade, on the successful conclusion of the final discussions on the EU-Japan Economic Partnership Agreement (EPA) – Brussels, 08 Dec 2017. (Copyright: European Union; Source: EC - Audiovisual Service; Photo: Georges Boulougouris)

The EU and Japan seal free trade pact that will cover 30% of global GDP

Malta: investigation risks being compromised while Prime Minister is in office

Parliament condemns all forms of racism, hate and violence and calls for action

‘No justification’ for attacks against civilians, UN envoy says on mounting cross-border violence in Gaza

Free and secure access needed in DR Congo conflict zone to tackle Ebola – WHO

Long-term EU budget: The Union’s ambitions must be matched with sufficient reliable funding

State aid: Commission approves market conform asset protection scheme for banks in Greece

Indonesia’s imams are joining the fight against plastic bags

Brexit uncertainty keeps shaking the world’s financial markets

Big oil’s climate pledges will fail without workforce equality

EFSF/ESM boss tells half truths about Troika’s doings

Protecting the Treaties in the interest of all Europeans: the College takes solemn oath to serve the EU

The financial future of Eurozone on the agenda of Friday’s ECOFIN council

The Council unblocks all EU budgets

New identity cards deliver recognition and protection for Rohingya refugees in Bangladesh

UN court increases sentence of former Bosnian-Serb leader to life imprisonment

The secret weapon in the fight for sustainability? The humble barcode

ECB steadily continues monetary easing policy as EU economy gains momentum

WHO working to save lives following powerful earthquake in Albania

One Health approach to combating Antimicrobial Resistance – how can professionals from different backgrounds unite in this common fight?

West Bank: ‘imminent’ demolition of Palestinian village could be ‘war crime’ – ICC Prosecutor

Silicon Valley can do more to achieve the #GlobalGoals

Food safety: more transparency, better risk prevention

COP21 Breaking News_03 December: UNFCCC Secretariat Launches Forest Information Hub

EU voters not interested in the European Parliament elections. What’s behind this European Titanic?

More women than ever are working in Hollywood, but men still dominate key roles

Cape Town’s crisis shows us the real cost of water

EU-UK Statement following the High Level Meeting on 15 June

Vegans in France are using extreme tactics to stop people eating meat

Russia and the West to partition Ukraine?

Commission publishes EU Code of Conduct on countering illegal hate speech online continues to deliver results

How digital remittances can help drive sustainable development

European Semester 2019 Spring Package: Commission issues recommendations for Member States to advance sustainable and inclusive economic growth

Who cares about the unity of Ukraine?

Yemen: Tackling the world’s largest humanitarian crisis

The technological revolution has changed the way of saving lives

UK Labour Party leader Corbyn readies to change Brexit political backdrop

Greek-Turkish border: MEPs reject Turkey’s pressure, demand common asylum rules

Eurozone plans return to growth

Internet Forum: Prioritize technologies most needed for sustainable development

EU budget: Commission proposes €1.26 billion to reinforce the European Solidarity Corps

The Ecofin Council creates officially the clan of ‘undead’ banks

LGBTQI+ and medicine

UN health agency to gauge global threat, as China confirms coronavirus transmission between humans

Elections results: Austerity’s black to prevail in the new multicolored German government

Fears for food security and the future of farming families, as Fall Armyworm spreads to Asia

Why vaccines are not just for children

“The Arctic climate matters: to what degree?”, a Sting Exclusive co-authored by UN Environment’s Jan Dusik and Slava Fetisov

3 ways to make the 2020s the decade we close the gender gap

Liaison Officer – 2020

GSMA Announces Speakers for Mobile 360 – Russia & CIS 2018

The world needs a circular economy. Help us make it happen

In Washington D.C., Guterres signs pact with World Bank, meets US President Trump

UN chief expresses ‘full confidence’ in top Somalia official following Government expulsion

More Stings?

Advertising

Speak your Mind Here

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

WordPress.com Logo

You are commenting using your WordPress.com 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