Merkel tries to calm tempers in Swiss tax dispute

By Reuters Staff
February 8, 2010
Wanted in Switzerland

Wanted in Switzerland

By Madeline Chambers

BERLIN, Feb 8 (Reuters) – German Chancellor Angela Merkel and Switzerland’s president have agreed that a dispute over stolen Swiss bank account data which Germany wants to buy should not harm ties between the neighbours, her spokesman said on Monday.

Merkel, who spoke to President Doris Leuthard on Saturday in an effort to calm tempers, also recieved assurances Switzerland would continue talks on a double taxation deal that would bring Switzerland into line with OECD standards.

Switzerland’s large private banking industry has been shaken in the last week by German politicians saying they would pay for data on clients of Swiss banks who may have been evading German taxes even if the information was obtained illegally.

“(Merkel and Leuthard) agreed that good neighbourly relations should not be damaged by this ongoing issue,” Merkel’s spokesman Ulrich Wilhelm told a news conference.

German media have reported the data could lead authorities to a 400 million euro tax windfall but the row has also raised the possibility of a diplomatic spat. Swiss politicians have attacked Germany’s plans, one even likening it to bank robbery.

Germany is Switzlerland’s main trading partner and home to a large client base for Swiss private banks.

DOUBLE-TAX DEAL TALKS

Concluding a deal on double taxation would mean tax information could be exchanged according to OECD standards so a row like this one would not be repeated in future, said Wilhelm.

“The chancellor welcomed the constructive attitude of Switzerland on this subject and viewed it as a contribution to an objective debate,” he told reporters.

A finance ministry spokesman said the next round of talks between German and Swiss officials would take place in March.

Switzerland bowed to international pressure last year and relaxed some bank secrecy rules but is wary of agreeing to the automatic exchange of tax information with foreign authorities which they fear could be a fatal blow to its cherished laws.

Switzerland manages an estimated $6 trillion of wealth with potentially nearly a third of it undeclared, analysts have said.

Germany has paid for stolen data before. In 2008 it purchased information taken from Liechtenstein’s top bank LGT, forcing the tiny principality to give up bank secrecy rules.

However, it is up to individual German states, not the federal government, to decide on whether to purchase the data.

Germany’s most populous state, North Rhine-Westphalia said last week it planned to acquire the stolen bank data after checks had concluded that would not be illegal.

Other states, including southern Baden-Wuerttemberg and Bavaria are also considering buying the information but there is some opposition from Merkel’s junior coalition partner, the Free Democrats (FDP). Some FDP members see purchasing stolen bank data as a possible breach of privacy.

((madeline.chambers@reuters.com; +49 30 2888 5230; Reuters Messaging: ann.chambers.reuters.net@reuters.com))

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