Europe stuck in neutral

"Fight against tax fraud: Europe stalls," headlines Belgian daily Le Soir. In its May 15 edition, the newspaper reports that the Brussels meeting of the European Union Finance Ministers council (ECOFIN) failed to reinforce regulations to fight tax fraud, as requested by European authorities, and in particular the Commission.

The goal of the meeting, which was held in preparation for a summit on this issue scheduled for next week, was to extend the current tax agreement on savings to other sources of revenue such as investment portfolios, and to discuss the automatic exchange of data. But ECOFIN stumbled over opposition from Austria and Luxembourg, both of which are hoping to delay the lifting of banking secrecy laws. Le Soir further reports that —

During a joint press conference, the two countries explained that they could not accept the automatic exchange of data if other countries located outside of the European Union did not also play the game as well. Their target is, obviously, Switzerland.

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Austria and Luxembourg did however agree to mandate the Commission to negotiate with Switzerland, Andorra, Monaco, Saint Marin and Liechtenstein — a move that has been awaited in Brussels for several years.

For German weekly Stern, the EU has "taken a step forward in its fight against undeclared revenues and tax evasion". The magazine recalls the extent of "the complexity of the situation in which EU ministers found themselves" until now —

… on the one hand they spent years lambasting international tax havens and threatening to drain their resources. At the same time, within their own ranks, Austria and Luxembourg acted hardly any better than these much maligned countries by categorically refusing to share data on revenues generated by capital belonging to people suspected of tax evasion. Now an exit strategy seems possible.