BERLIN, June 11 (Reuters) – Roughly 1.5 billion euros in lost revenues could be recovered in Germany from 20,000 tax evaders who have so far come clean about their Swiss bank accounts, the DSTG financial authorities trade union said.

This week the German government said it and the state of Lower Saxony had bought a second CD of stolen Swiss bank data believed to be rich in detail about undisclosed holdings.

According to a survey of state finance ministries conducted by Reuters this week, more than 20,000 Germans have reported themselves to authorities since the start of February.

“From 20,000 I assume we’ll get around 70,000 to 75,000 euros on average, which would make for roughly 1.5 billion euros in additional tax revenues,” DSTG head Dieter Ondracek told Reuters. “That will be noticeable in the coffers.”

The money would be booked this year, he added, noting that Germany’s decision to purchase the Swiss data had been vindicated.

“It definitely paid off, because the publicity it generated made people take a different view of the risk of being caught.”

Chancellor Angela Merkel’s government has taken a tough line on tax evasion since the financial crisis broke, leading to a series of angry exchanges with neighbours like Switzerland and Liechtenstein over banking secrecy.

BERLIN (Reuters) – Turkey and Brazil made a “big mistake” by voting against the latest round of U.N. sanctions against Iran since this may have encouraged Tehran to think it was not isolated, a senior German legislator said on Thursday.

Ruprecht Polenz, who chairs the foreign policy committee in the Bundestag (lower house), told Reuters the “no” votes by Brazil and Turkey had blunted the impact of a fourth round of sanctions passed by the U.N. Security Council on Wednesday.

“Iran doesn’t want to be isolated,” Polenz, a senior member of Chancellor Angela Merkel’s conservative Christian Democrats (CDU), said in an interview.

“Therefore it was a big mistake that Brazil and Turkey weakened the joint message of the Security Council by voting against,” he said, adding that Lebanon’s decision to abstain was understandable due to domestic pressure.

Twelve members of the 15-nation council voted in favour of the resolution to extend punitive measures against Iran over its protracted refusal to suspend sensitive uranium enrichment activity and open up to U.N. nuclear inspectors.

The resolution received the least support of four meted out against Iran since 2006.

Iran defiantly responded that it would press ahead with enrichment no matter what and President Mahmoud Ahmadinejad said the measure should be tossed “in the waste bin”.

BERLIN (Reuters) – The European Commission welcomed German and French calls for speedy measures to clamp down on speculators in government debt on Wednesday, though the likelihood of a bloc-wide ban still appears remote.

In a display of solidarity that may ease concerns over recent policy splits between the euro zone’s top two economies, Berlin and Paris urged the Commission to consider an EU-wide ban on short selling of shares and sovereign bonds.

EU Internal Market Commissioner Michel Barnier has already said he will propose measures to curb short selling, such as greater transparency requirements, while national regulators have called for banning powers in times of extreme market volatility.

A Commission spokeswoman welcomed the “sense of urgency” expressed in the Franco-German letter but stopped short of promising to copy a unilateral ban on short selling of sovereign bonds and related derivatives that Germany implemented last month.

“We do welcome the support reflected in the letter for our ideas,” the spokeswoman said, adding that concrete proposals would be made during the summer.

The premium investors demand to hold 10-year Italian and other euro zone government bonds rather than German debt fell as investors sought to avoid being caught short if a ban were to be imposed on some sales of credit default swaps.

French Economy Minister Christine Lagarde told reporters in Paris on Wednesday that financial regulation was “an imperative response to restore confidence in the markets.”

BERLIN (Reuters) – The European Commission welcomed German and French calls for new measures to clamp down on speculators in government debt on Wednesday but the likelihood of a bloc-wide ban still appears remote.

Berlin and Paris urged the Commission to consider an EU-wide ban on short selling of shares and sovereign bonds in a display of solidarity that may ease concerns over recent Franco-German policy splits.

EU Internal Market Commissioner Michel Barnier has already said he will propose measures to curb shortselling, such as greater transparency requirements. National regulators have called for banning powers in times of extreme market volatility.

A Commission spokeswoman welcomed the “sense of urgency” expressed in the Franco-German letter but stopped short of promising to copy Germany’s ban on short-selling of sovereign bonds and related derivatives.

“We do welcome the support reflected in the letter for our ideas,” the spokeswoman said.

French Economy Minister Christine Lagarde told reporters in Paris on Wednesday that financial regulation was “an imperative response to restore confidence in the markets.”

In a joint letter published by Berlin on Wednesday, Chancellor Angela Merkel and French President Nicolas Sarkozy told European Commission President Jose Manuel Barroso the EU executive needed to accelerate the pace of financial reform.

BERLIN, June 7 (Reuters) – German Chancellor Angela Merkel’s coalition agreed a package of budget cuts and taxes on Monday to bring the structural deficit of Europe’s biggest economy within EU limits by 2013 and revive her political fortunes.

The measures, touted as Germany’s biggest austerity drive since World War Two, should save 11.1 billion euros ($13.25 billion) next year and lower a deficit set to exceed 5 percent of gross domestic product this year.

Planned savings will rise to 17.1 billion euros in 2012, 25.7 billion euros in 2013 and 32.4 billion the following year, said Guido Westerwelle, head of Merkel’s coalition partners, the Free Democrats (FDP). This is expected to reduce the deficit to below the EU limit of 3 percent of GDP.

“We must save about 80 billion euros by 2014 so that our finances can stand on their own two feet in the future,” Merkel told a joint news conference with Westerwelle, presenting the results of a two-day budget conclave.

“The last few months have shown, together with Greece and other euro states, how important it is to have solid finances,” said Merkel, who must get the savings package approved in order to boost her standing, which is flagging in opinion polls.

While confirming there would be there would be no tax cuts in this legislature, the centre-right government avoided raising income tax or eliminating any discounted VAT rates.

RECOVERY AND REPUTATION AT STAKE

BERLIN, June 1 (Reuters) – A key ally of German Chancellor Angela Merkel raised doubts about the future of her government at the weekend, underlining tension in the ruling coalition, which has been hit by an electoral setback and policy disputes.

Europe’s largest economy suffered its worst recession since World War Two in 2009, though it has now grown for four straight quarters, and forward-looking indicators suggest the manufacturing sector is recovering fast from the global slump.

Unemployment has remained subdued, thanks in great part to the government’s decision to extend subsidies that encourage firms to put staff on reduced hours rather than fire them – though this has come at a cost.

Germany’s budget deficit is expected to swell to more than five percent of gross domestic product (GDP) this year, and the government has begun discussing measures to consolidate public finances to reassure investors about the health of the euro.

However, the discussions are proving contentious amid popular discontent about the billions of euros Germany has pledged to a financial safety net for fellow euro zone members.

Following are some of the key factors to watch:

OPPOSITION RECOVERY

BERLIN, May 29 (Reuters) – German Finance Minister Wolfgang Schaeuble hinted that taxes may have to rise to consolidate Germany’s finances one day after coalition sources said the government may scrap a discounted sales tax on some products.

“The real task lies in saving as much on spending as possible,” Schaeuble told newspaper Bild am Sonntag, in remarks released on Saturday, one day before the paper is published.

“But if you abolish tax breaks some will say that’s a tax increase. At the end of the day it’s about having a sensible and balanced policy. And let’s bear in mind that cuts on social spending hit those in the country with less money.”

“I’m not discussing any individual measures at the moment, but I’m not ruling them out either,” he added.

Chancellor Angela Merkel’s centre-right government is now considering raising value-added-tax (VAT) to the full rate of 19 percent on certain items that currently benefit from a lower rate of 7 percent, the coalition sources told Reuters on Friday.

Though Germany’s budget deficit is not expected to be as big as those in many euro zone countries this year, it is still seen exceeding five percent of gross domestic product in 2010, significantly above the European Union’s cap of three percent.

A string of EU nations including Greece, Spain, Italy and Britain have recently unveiled budgetary consolidation measures aimed at putting public finances on a more sustainable footing.

BERLIN (Reuters) – Remarks by Germany’s president justifying military action to back the country’s commercial interests have sparked accusations of “gunboat diplomacy”, putting the government on the defensive.

Germany’s defence minister on Friday distanced himself from the comments by President Horst Koehler, a former head of the International Monetary Fund, who was asked in a weekend radio interview how he viewed the country’s deployment in Afghanistan.

A country like Germany with a heavy reliance on foreign trade, Koehler said, must know that “in emergencies military intervention is necessary to uphold our interests, like for example free trade routes, for example to prevent regional instabilities which could have a negative impact on our chances in terms of trade, jobs and income”.

Koehler’s office said the comments to Deutschlandradio Kultur referred to deployments like the current European anti-piracy mission to secure shipping lanes in the Gulf of Aden, but the interviewer clearly referred to Afghanistan.

The excerpt of the interview has been replayed frequently on news broadcasts, prompting harsh criticism from many quarters.

Sensitivity about the military remains high in Germany due to the collective memory of Nazi destruction in World War Two. Politicians from Chancellor Angela Merkel’s ruling coalition said Koehler’s choice of words had been unfortunate.

“Economic interests are not the justification for the Afghan deployment,” Defence Minister Karl-Theodor zu Guttenberg told ARD television. He added, however, that protecting shipping lanes was justifiable from a German commercial perspective.

BERLIN (Reuters) – A deal struck by a German private security firm with a Somali politician to provide soldiers for hire has raised uncomfortable questions about whether Germany can send mercenaries into combat 65 years after World War Two.

The firm’s managing director said it would only send its staff — which include former German soldiers — to Somalia once Abdinur Ahmed Darman, a self-styled president who media describe as a warlord, had been recognised by the United Nations.

But reports that Asgaard German Security Group had agreed to send armed personnel to back Darman has sparked protests from lawmakers across the political spectrum, given the grim record of German forces abroad during the Nazi era.

Both opposition politicians and legislators from Chancellor Angela Merkel’s centre-right coalition have criticised the agreement which would see former members of the Bundeswehr (German army) bear arms in the war-torn, East African country.

Somalia, in the Horn of Africa, has been mired in violence and lacked effective central government since the overthrow of a dictator in 1991. Islamist fighters have waged a three year insurgency that has killed more than 21,000 people.

Asgaard had agreed to offer advice on security to Darman as well as the protection of “people, objects and convoys”, managing director Thomas Kaltegaertner told Reuters on Wednesday. He said German rules on how private security firms should operate were not clear.

“Basically there aren’t any,” said Kaltegaertner, who also heads a local branch of the Bundeswehr reserve, which receives public funding. “It’s time we had a discussion about it.”

BERLIN/ROME (Reuters) – Germany may widen its ban on speculative financial trades to cover all shares, a government document showed on Tuesday, as fears about the euro zone’s debt crisis sent stocks and the euro plunging further.

The Finance Ministry draft said measures to stabilise financial markets would include a “ban on naked short selling of shares, including derivatives referring thereto.” One government source, speaking on condition of anonymity, said this would cover all German shares.

Berlin stunned markets last week and drew criticism from its partners including close ally France by unilaterally suspending naked short selling in euro sovereign bonds and credit default swaps as well as stocks in some financial companies.

Only Austria followed suit and since most such trading in Europe takes place in London, the German measure is largely symbolic. Naked short selling involves selling securities without owning or borrowing the underlying assets in the hope of turning a quick profit by buying them back at a lower price.

Investor worries that the euro zone debt crisis may turn into a banking crisis drove world stocks and the euro sharply down on Tuesday while safe-haven German bonds hit a record high and U.S. Treasuries rallied.

Highly indebted Italy was the latest euro zone country set to announce an austerity plan, worth 26 billion euros ($32 billion) over two years, despite concern that Europe-wide retrenchment may crimp global economic recovery.

The Italian cuts will hit public sector pay and recruitment, health spending and road building, and mean later retirement for some state workers and less funding for local government.