Published April 12, 2013
DUBLIN – Austria dismissed calls on Friday to follow Luxembourg in ending bank secrecy but pressure grew as a group of Europe's biggest countries prepared to outline plans to tackle tax evasion.
It is said to deprives EU governments of 1 trillion euros annually.
In blunt remarks on the sidelines of a meeting of European ministers, Austria's finance minister described any exchange of information about account holders as an invasion of privacy and criticized other countries for failing to tackle what she called the real "hot spots" of money laundering.
"Austria is sticking to bank secrecy," Maria Fekter told reporters in typically combative form, putting her country in a minority of one at a meeting of 27 EU ministers.
She attacked the Group of 20 top economies for not taking "any step to close the money laundering in all the islands like Cayman Islands, Virgin Islands or ... in Delaware".
But Fekter's case was looking increasingly hopeless as ministers from Germany, France, Spain, Italy and Britain prepared to outline their vision for cooperating to tackle tax evasion on Friday.
EU leaders will also discuss how to combat the issue when they meet at a summit next month, said the president of the European Council.
"We must seize the increased political momentum to address this critical problem," Herman Van Rompuy, who chairs meetings of EU leaders, said in a broadcast statement.
ALL BAR ONE
The meeting of EU finance ministers in Dublin follows Luxembourg's decision this week to share foreign bank account details with EU governments from 2015, bringing it into line with all other countries in the bloc bar one - Austria.
The discussion, which is set to continue on Saturday, could see some frank exchanges between Germany, whose finance minister Wolfgang Schaeuble campaigned against bank secrecy, and Fekter, who has promised to fight "like a lion" to keep it.
"Automatic exchange of information involves a massive interference in people's privacy rights," Fekter said on Friday. "Here the state sniffs around deep into the private affairs of account holders."
Confidentiality is so cherished in Austria that banking secrecy is anchored in the constitution. It has deep traditional roots.
Fekter faces a difficult fight. France, in particular, wants to underscore its determination to tackle tax fraud, one official said.
France's former budget minister Jerome Cahuzac is under investigation for fraud after admitting lying about having a Swiss bank account, an affair that has prompted criticism of French President Francois Hollande.
It is unclear if Fekter will have her way even in Austria, with some voices pushing for a more moderate approach, including the country's chancellor, Werner Faymann.
He has said it would be possible for Austria to share information on foreigners' accounts without violating banking secrecy.
Separately at the Dublin meeting, EU ministers agreed to give Ireland and Portugal seven more years to repay bailout loans from the European Union.
Their support for extending loan maturities for Portugal is conditional on Lisbon finding new ways to meet its 2013 budget targets, thrown into doubt by the constitutional court's ruling that rejected some earlier planned measures.
Euro zone ministers also gave their backing to a 10 billion euro bailout plan for Cyprus, under which Nicosia will have to come up with 13 billion euros of its own money to cover its needs over the next three years and the cost of restructuring of its banking sector which was halved in the bailout.
Ministers also debated setting up a "banking union" across the euro zone. Irish Finance Minister Michael Noonan said he expected ministers to address German concerns about the legal basis for allowing the European Central Bank to supervise banks.
Banking union is a critical long-term reform since it addresses how to cope with future crises, touching on issues such as shutting down or salvaging bad banks, pan-European deposit protection and establishing a resolution fund to pay for the clean-up.
But momentum has slackened in part because of German concerns, as the euro zone's biggest economy, that it could be left on the hook for banks across the bloc.
(Additional reporting by Conor Humphries, Padraic Halpin and Annika Breidthardt; Editing by Jeremy Gaunt)