Top five EU states push for tax transparency

The initiative is open to other member states and is based on a recently adopted law in the US - the Foreign Account Tax Compliance Act - that requires US citizens to declare their bank accounts held abroad and foreign banks to notify US tax authorities about their American clients.

A similar EU-wide law has so far been held up by Austria and Luxembourg, both keen on preserving bank secrecy for domestic and foreign clients.

The five finance ministers "call on all EU member states to agree without delay" on the bill, so that "Europe can take a lead in promoting a global system of automatic information exchange, removing the hiding places for those who would seek to evade paying their taxes."

The collapse of the Cyprus banking system - which like Luxembourg's was much larger than the country's GDP - and a series of revelations about the offshore banking model have increased pressure on Austria and Luxembourg to change their position.

Luxembourg has already signalled "openness" to discuss bank secrecy. And on Tuesday, Austrian Chancellor Werner Faymann told the Kleine Zeitung his country was "ready for talks on a more intensive exchange of information on international investors."

But added that bank secrecy will remain in place for domestic customers and said it would be "absurd" for an Austrian grandmother to have to show her savings accounts to the Austrian finance minister.

The comments came after a spokesman for EU tax commissioner Algirdas Semeta said it was "unacceptable" that Austria was refusing to reform its banking secrecy laws.

Semeta also welcomed the initiative of EU's five largest countries and said in a statement this it may "speed up" the EU efforts. "

"Transparency is the key when it comes to fighting tax evasion and the global environment today leaves little room for those who resist it," Semeta said.