Is France soft on its own little tax haven?

There is often a symbiotic relationship between small secrecy jurisdictions (or tax havens, if you must) and wealthy élites in larger economies. Germany is surrounded by Switzerland, Liechtenstein, Luxembourg and Austria; Portugal has Madeira; the United States has a string of options in the Caribbean; and Britain has cast a whole spider's web around the world, not least in the Channel Islands and the Caribbean. Monaco, of course, is France's special secrecy jurisdiction.

A new story from Wealth Bulletin notes the France-Monaco relationship is a bit like the one between, say, Britain and the Cayman Islands.

"The principality, which benefits from zero income and inheritance tax, shares a central bank with France. Paris also picks its chief of police and its financial regulator chief, who are always French nationals."

And it notices that for all of French President Nicolas Sarkozy's words against tax havens, he seems to have been mysteriously reluctant to get tough with France's own little haven for dirty money, with Monaco wealth managers having covered some $130 billion away with their veil of secrecy.

"For the French crackdown to be taken more seriously the country is likely to be forced to take a tougher stance against offshore centre Monaco, which effectively enjoys many privileges because of its links with its big neighbour."

Quite right. Take a look at your own back yard, Sarkozy, and crack down.