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A Push Against Tax Havens Gains Support in Europe Support Grows for European Effort to Fight Tax Havens
(about 17 hours later)
DUBLIN — Europe’s efforts to crack down on tax havens gained momentum on Saturday as finance ministers from nine countries agreed to share more bank information. Ministers from Belgium, the Netherlands and Romania joined their French counterpart in a push for more automatic exchanges of bank records that already had the backing of Germany, Britain, Italy, Poland and Spain. For France, the issue has taken on greater urgency since Jérôme Cahuzac, the former budget minister, quit after he acknowledged having foreign holdings in Switzerland that he previously denied. DUBLIN — Europe’s effort to crack down on tax havens gained momentum during the weekend as the number of countries agreeing to share more bank information doubled.
“The surge in member states’ appetite for progress and action in the fight against evasion is extremely welcome,” Algirdas Semeta, the European Union commissioner for taxation, said at a news conference on Saturday after two days of meetings where ministers discussed adoption of Europe-wide laws modeled on the Foreign Account Tax Compliance Act, a United States initiative to find hidden accounts overseas. Miroslav Kalousek, the Czech finance minister, pledged to join the push for more automatic exchanges of bank records that already had the backing of Britain, France, Germany, Italy and Spain, a spokesman for the Czech representation to the European Union said Sunday.
“The tools are already on the table, waiting to be seized,” said Mr. Semeta, referring to plans in Europe to provide greater exchanges of information on interest earned on savings, including from trusts and foundations. The spokesman said the Czech minister made his overture on Saturday during a two-day meeting of European finance ministers where Poland, followed by Belgium, the Netherlands and Romania, also signed up, bringing the number of countries supporting the initiative to 10. The campaign is being strongly backed by the French finance minister, Pierre Moscovici.
Mr. Semeta said that the European crackdown against tax evasion could eventually extend to dividends, capital gains and royalties, significantly expanding the revenue earned by national treasuries. He also encouraged countries to bring forward a date, currently foreseen for 2017, when those revenues are meant to fall under the microscope. Europe is also being pushed toward greater transparency by the recent release of an investigative report on thousands of offshore bank accounts and shell companies, and by the prospect of a meeting of finance ministers from the Group of 20 leading economies next Thursday in Washington, where tax transparency is expected to be discussed. For France, the issue has taken on greater urgency since Jérôme Cahuzac resigned as budget minister after acknowledging he had foreign holdings in Switzerland that he had previously denied.
In the French case, the Socialist government of François Hollande was deeply embarrassed by the revelations at a time of economic hardship for many citizens, and the French finance minister, Pierre Moscovici, led the calls for reforms at a hastily assembled news conference on Friday evening. “The surge in member states’ appetite for progress and action in the fight against evasion is extremely welcome,” Algirdas Semeta, the Union’s commissioner for taxation, said Saturday after two days of meetings in which ministers discussed adoption of Europe-wide laws modeled on the Foreign Account Tax Compliance Act, a U.S. initiative to find hidden accounts overseas.
Taking leadership over the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” said Mr. Moscovici, who was flanked by Wolfgang Schäuble, the German finance minister, and George Osborne, Britain’s chancellor of the Exchequer, and by ministers from Poland, Spain and Italy. “The tools are already on the table, waiting to be seized,” Mr. Semeta said, referring to plans in Europe to provide greater exchanges of information on interest earned on savings, including from trusts and foundations.
The initiative should eventually cover “all kinds of revenues,” and would be similar to the American tax compliance act, Mr. Moscovici said. Mr. Semeta said that the European crackdown against tax evasion could eventually extend to dividends, capital gains and royalties, significantly expanding the revenue earned by national treasuries. He also encouraged countries to set an earlier date — it is currently foreseen as 2017 — for when those revenues are meant to fall under the microscope.
Europe is also being pushed toward greater transparency by the recent release of an investigative report on thousands of offshore bank accounts and shell companies, and by the prospect of a meeting of finance ministers from the Group of 20 leading economies on Thursday in Washington, where tax transparency is expected to be discussed.
In the French case, the Socialist government of François Hollande was deeply embarrassed by the revelations that Mr. Cahuzac had foreign holdings at a time of economic hardship for many citizens, and Mr. Moscovici led the calls for reforms at a hastily assembled news conference on Friday evening.
Taking leadership on the issue of tax havens “is very important for ensuring that citizens can trust the efficiency and fairness of our tax systems,” Mr. Moscovici said, flanked by Wolfgang Schäuble, the German finance minister, and George Osborne, Britain’s chancellor of the Exchequer, and by ministers from Poland, Spain and Italy.
The initiative should eventually cover “all kinds of revenues” and would be similar to the American tax compliance act, Mr. Moscovici said.
One European tax haven, Luxembourg, bowed to such pressure on Wednesday and said it would begin forwarding the details of its foreign clients to their home governments.One European tax haven, Luxembourg, bowed to such pressure on Wednesday and said it would begin forwarding the details of its foreign clients to their home governments.
Standing in the way is Austria, which has resisted agreeing to an automatic exchange of banking information between European Union countries. Standing in the way is Austria, which has resisted agreeing to an automatic exchange of banking information between E.U. countries.
Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they expected Austria eventually would offer concessions. But the country’s finance minister, Maria Fekter, has showed no signs of backing down. Chancellor Werner Faymann of Austria recently suggested that talks were possible, and European officials said they thought that Austria eventually would offer concessions. But the country’s finance minister, Maria Fekter, has showed no signs of backing down.
“We will fight for bank secrecy,” Ms. Fekter said on Saturday. “We are no tax haven,” she said. A day earlier she sought to portray Britain as one of the European Union’s biggest tax havens. “We will fight for bank secrecy,” Ms. Fekter said on Saturday. “We are no tax haven,” she said. A day earlier she sought to portray Britain as one of the Union’s biggest tax havens.
Mr. Osborne said at the news conference on Friday evening that he was pushing for more transparency from the Cayman Islands and British Virgin Islands. Mr. Osborne said on Friday that he was pushing for more transparency from the Cayman Islands and British Virgin Islands.
“The places that you can hide are getting smaller and smaller and fewer and fewer,” Mr. Osborne said. “We are in advanced stages of discussions with them,” he said of talks with the two territories. “But I think they are in no doubt about what we expect of them,” he said.
More European countries are expected to join the campaign in coming weeks after Herman Van Rompuy, the president of the European Council, said on Friday that the bloc’s 27 leaders would discuss the issue at a summit meeting of leaders next month in Brussels.More European countries are expected to join the campaign in coming weeks after Herman Van Rompuy, the president of the European Council, said on Friday that the bloc’s 27 leaders would discuss the issue at a summit meeting of leaders next month in Brussels.

David Jolly contributed reporting from Paris.

Another focus of the meetings in Dublin was the bundle of initiatives known under the umbrella name banking union — intended to break the vicious circle involving indebted sovereign governments and shaky banks that helped unleash a string of crises repeatedly threatening to sink the euro over the last three years.
Ministers made some progress by overcoming disagreements with Germany, which had raised demands for a change in the Union’s treaty to ensure that the cornerstone of the project — placing the European Central Bank in charge of regulating the biggest lenders — would not lead to a blurring of lines between monetary policy and banking supervision.
The single supervisor must be in place before other elements of a banking union can be put in force including a system for euro area countries to share some of the burden of shutting down failing banks that would have a clearly defined hierarchy of creditors, including shareholders, bondholders, uninsured depositors and funds contributed by banks and governments.
During the finance ministers’ meeting, the Germans conceded that supervision by the central bank could go forward during 2014 without the change, but they won agreement that there should be steps to lock in the separation of the two areas of responsibility the next time that the union’s treaties are revised.
But Mr. Schäuble, the German finance minister, insisted during a news conference on Saturday that setting up European institutions to share the burden of restructuring and closing banks “will need a treaty change.”
Requiring a change in the treaties has alarmed some European officials, who fear such a step at a time when Britain’s calls for significant changes to the pact have irritated other member states. They also are concerned that the prospect of a treaty alteration would jeopardize the legal basis of the banking supervision system once it goes into force next year.
Mr. Schäuble also laid out conditions for the European Stability Mechanism to be tapped to recapitalize struggling banks, saying on Saturday that the country of a bank in financial difficulty must first inject fresh capital before receiving direct support from the bailout fund.