Thursday

20th Jul 2017

French leader promises anti-tax-cheat crusade

French leader Francois Hollande has promised to "eradicate" tax havens in the EU and in the wider world, after his approval rating fell to 26 percent following a tax evasion scandal.

Speaking on national TV on Wednesday (10 April), he said the "sad" Cahuzac affair has "altered the image of the [French] Republic, of our country and of our political life."

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Jerome Cahuzac, his former budget minister, is currently changing where he sleeps every two days in a bid to avoid the French press pack after it came out in March he hid €600,000 in a secret account in Switzerland.

"Tax havens must be eradicated in Europe and around the world," Hollande told the French nation.

He said his cabinet will discuss three new laws on 24 April before posting them to parliament. He also said his ministers will next Monday publish details of their financial interests.

One of the laws will create a "High Authority" to scrutinise ministers' declarations, as well as future disclosures to be made by MPs, top local councillors and top civil servants.

The second one will create a special anti-corruption prosecutor, to take over existing powers from the interior ministry and the finance ministry.

The final measure will force French banks to publish details of their subsidiaries around the world and will create a French blacklist, to be updated each year, of foreign tax havens.

"It will be established on the basis, not only of signatures of conventions with other countries, but on reality, on the effectiveness of the information given. I will not hesitate to condemn tax havens," Hollande noted.

He called for the bank transparency rules to be applied at EU level.

He also called on all EU states to back "automatic exchange of information" on EU citizens' bank accounts in tax havens closer to home, such as Austria, Luxembourg or Malta.

Luxembourg itself also on Wednesday promised to end bank secrecy on 1 January 2015 in a radical move which risks seeing capital flee its banks, which are worth 22 times the size of the micro-state's economy.

"We are following a global movement ... we are not caving in to German pressure," Luxembourg leader Jean-Claude Juncker noted in his state-of-the-nation speech.

Cahuzac aside, the pro-transparency gallop in the EU is being spurred by daily disclosures of tax-dodging by VIPs after the International Federation of Journalists in Washington got hold of details of accounts in tax havens in a development dubbed "Offshoreleaks."

It is also being spurred by last month's Cypriot bailout, in which Germany dictated terms to punish the island for stashing away billions in shady Russian money.

German finance minister Wolfgang Schaeuble on Thursday also proposed the creation of a new "Federal Central Tax Office" to hunt out cheats in Germany's semi-autonomous regions.

His spokesman, Martin Kotthaus, praised Juncker, saying: "It is surely not an easy step for Luxembourg. Something is moving there and we take note of that with great respect and recognition."

Luxembourg's move - in the words of EU anti-fraud commissioner Algirdas Semeta in an email to the Reuters news agency - puts Austria "in a lonely and unsustainable position" of becoming the last EU country to block his directive on tax transparency.

But the Austrian government, which faces elections in September, shows no sign go budging.

"I am a hunter of tax cheats but also the protector of honest savers. It is unjustified to open all the savings accounts of those who have done nothing wrong. That is why I am fighting like a lion for banking secrecy," its finance minister, Maria Fekter told the Oesterreich daily on Monday.

Jean-Francois Cope, the leader of the French centre-right opposition party, the UMP, made the same point in a series of press statements following Hollande's speech.

He said the obligation for MPs and officials to disclose financial interests - which is already normal in many European countries - is a "Pandora's box … voyeurism" that risks invading honest people's privacy.

He also lambasted Hollande for "hypocrisy … a show of genuine political, intellectual and moral imposture … loss of credibility … divorce form reality" over his handling of Cahuzac.

According to an Ipsos poll published this week by Le Point magazine, Hollande's approval rating has fallen to 26 percent, the lowest ever score since Ipsos began its surveys in 1996.

The Cahuzac furore has prompted several of Hollande's top men to already reveal details of their financial lives to French media.

On Wednesday, finance minister Pierre Moscovici said he rents his flat in Paris and owns a modest €200,000 apartment in Doubs, in eastern France.

Marisol Touraine, housing minister, said she has €1.4 million, mostly in real estate.

Arnaud Montebourg, industry minister, said he co-owns flats with his mother, has an underground parking space in Dijon, in eastern France, and a €4,000 chair by designer Charles Eames.

Aurelie Filipetti, culture minister said she has a 70-square-metre flat in paris and an old t-shirt used by football star David Beckham.

On the opposition side, Cecile Duflot, Green party shadow housing minister has an old Renault 4 and a Twingo.

Centre-right former PM, Francois Fillon: a home in Sarthe, in western France, worth around €650,000, less than €100,000 in savings and two more-than-10-year-old cars.

For his part, Christian Bourquin, a local politician and a centre-left senator, wrote on his blog that his bank account is usually on zero at the end of each month and that his only worldly possession is "an eight-month-old Catalan donkey."

Greek taxmen may be dodging taxes, too

Tax inspectors in Greece are underpaid, work in poor conditions and 130 of them have bank accounts abroad - possibly for tax evasion, a report by the IMF and EU says.

France in turmoil over tax-dodging minister

The scandal over France's tax-evading budget minister is threatening to engulf Hollande's government, which had promised an "irreproachable republic."

Top five EU states push for tax transparency

France, Germany, Italy, Spain and the UK have agreed new measures to fight tax fraud, putting pressure on Austria and Luxembourg to stop blocking an EU-level law.

Austria attacks UK, as EU finance talks get ugly

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.

Investigation

Mafia money pollutes the EU economy

Huge amounts of money from criminal activities are funnelled into the legitimate European economy. But little is being done about it at EU or national level.

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