UK must also tackle tax havens, says Juncker
ANDREW WILLIS
19.03.2009 @ 09:18 CET
Luxembourg's prime minister, Jean-Claude Juncker, will insist at a meeting of EU leaders on Thursday (19 March) that the British government also be forced to tackle tax havens under its jurisdiction after a number of European countries recently made concessions in the area.
"I aim, during the European summit, to demand action. It is essential that the British dependent territories in turn accept exchange of information," he told Swiss daily newspaper Le Temps earlier this week.
Despite its small size, Luxembourg is one of the major financial hubs of the European Union (Photo: EUobserver.com)
"I hope that those who search a quarrel with us react just as vehemently to British trusts or the tax legislation of some US states," he continued.
In the same interview, Mr Juncker also accused France and Germany of "arrogance" in their continued attempts to force reform of banking secrecy laws in the small European state sandwiched between their two borders.
However, that pressure appeared to bear fruit last week when Luxembourg agreed to sign up to an Organisation for Economic Co-operation and Development list of banking standards regarding the sharing of information with tax authorities from other countries.
The UK's channel islands of Guernsey and Jersey and also the Isle of Man in the middle of the Irish Sea have seen a huge influx of foreign wealth in recent decades due to their low tax rates and high levels of banking secrecy.
On Wednesday however, French finance minister Christine Lagarde announced that France would soon sign a new agreement with the Isle of Man in a sign that France intends to clamp down on lost revenues to the islands.
"Last week, I signed an accord concerning Jersey and [budget minister] Eric Woerth will soon sign an accord concerning the Isle of Man," Lagarde said in the French parliament, reports Dow Jones, without going into the details of the agreements.
Britain, France and Germany have been the main European proponents behind a global witch-hunt on tax havens since the financial crisis and economic downturn brought severely reduced tax returns to exchequers around the world.
Switzerland, Austria, Liechtenstein, Andorra and Monaco also made concessions on banking secrecy last week in an apparent bid to head off a more severe response by the G20 leaders meeting in London on 2 April, where tax havens are firmly on the agenda.
However, Mr Juncker said that recent French and German comments were characterised by "exaggeration" and a "disturbing arrogance and condescension."
"Such an offhand manner from political officials, in Paris as well as in Berlin, is inspired by a mediocre form of populism," he added.
