Wednesday, May 16, 2012

Luxembourg Austria hold Europe hostage on secrecy

Two of Europe's dirtiest tax havens, Luxembourg and Austria, have been behaving true to form, opposing efforts by European nation states to improve transparency. As the Wall St. Journal reports:
"The European Commission's head of tax slammed Austria and Luxembourg's refusal to let it negotiate new tax deals with non-European Union countries, saying they were stopping the rest of the regional bloc from raising much-needed revenue.

EU tax commissioner Algirdas Semeta said the failure to settle the issue prevents the EU's executive from striking revised tax deals with Switzerland and other non-EU countries on the taxing of savings accounts which the Commission estimates could reap extra revenues worth billion of euros a year."
In an interview earlier with Europolitics, Semeta described Austria's and Luxembourg's position as "incomprehensible."
"Savings taxation is not just the business of Luxembourg and Austria alone. Take Greece, for example, which is in serious financial difficulty: it is losing a lot of money because of this stalemate. We are asking taxpayers to make major financial efforts to reduce the impact of the crisis and at the same time states are not being permitted to increase their revenues by recovering part of the funds deposited in certain countries like Switzerland. It’s absurd."
Quite so. This is a very dirty game being played on behalf of criminals by the leaders of these countries: Austria and Luxembourg inside the Eurozone allied to Switzerland and the United Kingdom on the outside. Most people are aware of Switzerland's role in promoting financial secrecy, and many people overlook the fact that Luxembourg is a particularly pernicious jurisdiction in this respect too.

More on the complex political chess game involved soon; the WSJ and Europolitics articles contains some additional bacground on this, and for a more technical view see this, but for now we will repeat what we have said several times before: the leaders of these countries, and the financial actors who are directing or influencing their actions, should be deeply ashamed of themselves.

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