Sunday, February 07, 2010

The "Merkel put" on secret bank data is legitimate - FT

Following our blogs about the ethical issues involved in Germany buying secret bank data, the Financial Times has now weighed in, along the lines of what we were saying:

"It is surely legitimate to offer inducements for informers to testify. And it is in the public interest for tax cheats to be identified and forced to pay their dues."

Quite right too. And the FT notes how effective this tactic may be:

"Berlin may not be commissioning acts of larceny, but the “Merkel put” is a standing inducement for bank staff to breach their contracts. This is a potent threat to the private banking model. Even the possibility of leaks is damaging. If you were a German tax evader, you would not want to wait around to test the loyalty of the staff at your offshore bank."

Hopefully others won't be deterred by the Swiss (and other) smokescreens, and duly follow suit.

Germany's Finance Minister Wolfgang Schäuble is quoted in Swissinfo:

"He assured the paper that filling the state coffers is not the “central motive” in buying the information. “Our deficits are so high, that these purchases will not make much difference,” he said.

“What is important for me is that people in Germany should feel that despite all the divisions in society, they are treated fairly. If people who are not socially disadvantaged do not pay their taxes, and on a scale that they can’t not have known about it, a state where the rule of law is paramount cannot look the other way.”


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