21st Oct 2016

Austria attacks UK, as EU finance talks get ugly

  • Fekter - Austria is looking increasingly isolated on bank secrecy after Luxembourg capitulated (Photo:

Austria has accused the UK of being a haven for money launderers ahead of an EU meeting in Dublin, with Cyprus, Ireland, Portugal and Slovenia's (potential) bailout needs also on the agenda.

The Austrian finance minister, Maria Fekter, described Britain as "the island of the blessed for tax evasion and money laundering" in an interview with her country's Kurier newspaper on Thursday (11 April).

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

Comparing the UK and its "protectorates" - micro-states subject to British law - to Cyprus in terms of hosting secretive foundations and trusts, she noted: "Just as we urged the abolition of sealed foundations in the Cyprus rescue to drain the money laundering swamp, we must demand the same of the United Kingdom."

She added: "We want a trust registry for the Channel Islands, but also for countries where British law applies, such as the Cayman Islands, the [British] Virgin Islands or Gibraltar … These are all areas that are havens for tax evaders."

She repeated her message in a second interview with the Die Presse newspaper, saying: "What we demand of Cyprus, a small island, we also demand of the UK."

Fekter spoke on the eve of an informal meeting of EU finance ministers in Dublin on Friday and Saturday set to discuss a joint initiative by the UK, as well as France, Germany, Italy and Spain, to introduce "automatic exchange" of information on foreigners' bank accounts.

Luxembourg earlier in the week caved in by promising to abolish bank secrecy in 2015, leaving Austria isolated on the subject.

Fekter is not throwing in the towel just yet, however.

"This [automatic exchange] is a massive invasion of privacy, which we do not want … Austria is not a haven for tax evaders, we are a high tax country," she told Kurier.

Despite the prominence of the tax haven debate - fuelled by a massive leak of secret bank data to US-based journalists and by revelations of tax-dodging by a French minister - EU officials told press in Brussels on Thursday that "in political terms, probably the most important agenda item" will be Cyprus.

Ministers are to seal a political agreement on the Cypriot bailout model, negotiated in March, with formal approval to follow in April and with the first payments expected in early May.

Leaked documents from the troika of international lenders - the European Commission, the European Central Bank and the International Monetary Fund - earlier this week show the financial situation on the island remains unstable.

The March bailout model spoke of a €10 billion troika loan and a €7 billion contribution from Cyprus. But the latest blueprint says Cyprus will need to find €13 billion from its own pocket, with "final touches" still being added to the deal.

Another troika paper obtained by the FT on Thursday recommended that eurozone countries give Ireland and Portugal a seven-year extension on the repayment of their bailout loans.

The two countries had asked for a 15-year extension to help lower the price of borrowing on bond markets.

But the troika paper noted: "An extension of the average maturity by seven years would provide a balanced compromise between the lender and creditor constrains."

The paper said the decision should be announced "early" and implemented "quickly" because of the "current volatility in the markets."

An EU official noted on Thursday the talks on easing Portugal's terms will be "more exciting" after its constitutional court struck down €1.3 billion worth of austerity measures needed to meet lenders' demands.

"We await a report from Portuguese finance minister on this. Implementation [of the bailout] by the Irish authorities continues to be exemplary," the EU source noted.

Meanwhile, Slovenian news agency STA has reported that Ljubljana's finance chief, Uros Cufer, will meet officials from the commission, the IMF and the EU's Luxembourg-based bailout fund, the ESM, on Friday in the margins of the Dublin event.

The news fuelled speculation that Slovenia might ask for EU help with its own failing banks - a notion vigorously denied by its top politicians.

The EU official said there is "need for significant reforms in the Slovenian banking sector" and that Cufer, who is making his EU debut as part of Slovenia's new government, "will give a presentation of policy plans."

The official added there is "no intention of Slovenia applying for ... a [bank rescue] programme."

He also said the Cypriot bailout - the first one in the history of the crisis to seize money from savers in wobbly banks - is "not a template."

With Austria, Luxembourg, Malta and Slovenia struggling to avoid comparisons with Cyprus in terms of bank secrecy, non-performing bank loans or imbalance in the banking-sector-to-GDP ratio, the EU official noted: "You will find no other banking sector [in the EU] that is even vaguely similar [to Cyprus]."


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

News in Brief

  1. Juncker hopes for Canada accord in 'next few days'
  2. Romania drops opposition to Ceta
  3. Difficulties remain on Ceta deal, says Walloon leader
  4. Brexit could lead to 'some civil unrest' in Northern Ireland
  5. ECB holds rates and continues quantitive easing programme
  6. Support for Danish People's Party drops, poll
  7. Spain's highest court overturns Catalan ban on bullfighting
  8. Tusk: 'Concrete' migration proposals in December summit

Stakeholders' Highlights

  1. EFADraft Bill for a 2nd Scottish Independence Referendum
  2. UNICEFCalls on European Council to Address Plight of Refugee and Migrant Children
  3. ECTAJoin us on 9-10 November in Brussels and Discover the new EU Digital Landscape
  4. Access NowCan you Hear me now? Verizon’s Opportunity to Stand for Global Users
  5. Belgrade Security ForumMeaningful Dialogue Missing Not Only in the Balkans, but Throughout Europe
  6. EASPDJoin the Trip! 20 Years on the Road. Conference & Photo Exhibition on 19-21 October
  7. EuropecheEU Fishing Sector Celebrates Sustainably Sourced Seafood in EU Parliament
  8. World VisionWomen and Girls Urge EU Leadership to Help end Gender-based Violence
  9. Dialogue PlatformIs Jihadism Blind Spot of Western Intellectuals ? Wednesday 26 October
  10. Belgrade Security ForumGet the Latest News and Updates on the Belgrade Security Forum @BelSecForum
  11. Crowdsourcing Week EuropeMaster Crowdsourcing, Crowdfunding and Innovation! Conference 21 November - 10% Discount Code CSWEU16
  12. EJCEU Parliament's Roadmap for Relations with Iran a Massive Missed Opportunity

Latest News

  1. Wallonia still refuses to buy the Ceta "cat in a bag"
  2. Women shake Poland's pillars of power
  3. Malta, Latvia, and Hungary top EU obesity charts
  4. British PM asserts her role in EU 'nest of doves'
  5. Italy shields Russia from EU sanctions threat
  6. EU and Wallonia still stuck on Canada accord
  7. Dieselgate isn't my fault, says German transport minister
  8. Scotland plans independence vote before Brexit