France threatens Switzerland on tax evasion

He named and shamed Liechtenstein and Switzerland as being on an OECD list of 11 countries which do the least on tax co-operation.

The OECD, a Paris-based club of wealthy nations, earlier on Wednesday gave the full roll-call. The other nine are: Antigua and Barbuda, Barbados, Brunei, Botswana, Panama, Seychelles, Trinidad and Tobago, Uruguay and Vanuatu.

The Cannes summit saw G20 countries which had not already done so sign up to an OECD convention on cleaning up the sector. Its joint communique also threatened "countermeasures" against the 11 if they do not mend their ways.

OECD official Jeffrey Owens told EUobserver the G20 is making "significant progress." He said its initiatives have in recent years led to recovery of €14 billion in extra tax revenue.

One anti-tax-evasion NGO hailed Sarkozy's tough rhetoric.

"It may be a welcome step for the EU if France is prepared to use its political muscle against Switzerland," Markus Meinzer, from the Berlin office of the Tax Justice Network said.

He explained that EU finance ministers are currently negotiating a robust new law on tax evasion, the so-called revised Savings Taxation Directive. But Austria, Luxembourg and Italy are threatening to block the bill unless it covers Switzerland and UK overseas territories like the British Virgin Islands (BVI).

For his part, Nick Shaxson, the author of Treasure Islands, a book on how tax havens precipitated the financial crisis, said OECD-type lists do more harm than good.

"It's always been a mystery why some jurisdictions make the lists and others don't. In some ways, they are worse than useless because countries can point to them and say: 'Look at us. We're clean. We're not on the list," he told this website.

Shaxson noted the BVI is not on the list even though "vast numbers of corrupt, sleazy structures are run through the BVI."

G20 member the UK is also not included despite being one of the last countries in the world to tolerate "bearer shares" - a legal trick to hide the real owner of a company by saying that whoever holds the physical share documents in his hands at any given time is responsible.

Shaxson added that Greece is currently in talks with Switzerland on a tax repatriation deal on the model of a UK-Swiss deal signed this year.

Rich Greeks have reportedly stashed €200 billion in Switzerland. But Shaxson said that if the Greek deal contains the same loopholes as the British one, "the Greeks will be lucky if they get any more than €300 million out of it" in unpaid tax.