Acrimony dents chances of Swiss-German tax deal

ZURICH Sun Aug 19, 2012 9:43am EDT

ZURICH (Reuters) - The chances of any swift Swiss-German deal to counter tax evasion looked slim on Sunday after politicians traded criticism over efforts to limit the traditional secrecy of Swiss banks.

Swiss defense minister Ueli Maurer hit back at the leader of Germany's main opposition party SPD, Sigmar Gabriel, who said last Sunday that there had been "organized crime in Swiss banks" helping Germans avoid taxation.

"It is improper for a state to attack Switzerland or the Swiss banks in such a way," Maurer, the sole representative of Switzerland's far right SVP in the coalition government, told Swiss newspaper Sonntag.

Switzerland struck a deal with Germany in April to levy taxes on German assets in Swiss accounts, but the agreement could easily unravel.

German Chancellor Angela Merkel's government says a tax deal could net Berlin huge sums if and when it takes effect. Germans hold an estimated 150 billion euros ($184 billion) in Swiss accounts.

Prosecutors in Germany's biggest state, North Rhine-Westphalia (NRW), said last week they were pursuing tax evaders after obtaining new Swiss bank data from a presumed whistleblower, believed to come from within UBS. However, the bank said it has not yet found any evidence of a UBS source.

Germany's main opposition Social Democrats party (SPD), which governs in coalition with the Greens in NRW, has since promised to veto the tax deal in its current form while Switzerland has said there will be no renegotiations. The German government needs SPD backing for the deal in the upper house.

Andrea Nahles, the SDP's deputy party leader, said federal states in which her party ruled or was part of a ruling coalition would not agree to the deal: "The tax agreement with Switzerland is dead," she told Germany's Spiegel magazine on Sunday.

One of the SPD's main criticisms has been that the deal allows people to take their money out of Switzerland before it comes into effect.

An article due to appear in popular German tabloid Bild on Monday quotes NRW federal state premier Hannelore Kraft as saying there is evidence that Swiss banks have systematically given customers tips on how to move their money to Asia from Switzerland before the agreement comes into effect.

She was also quoted as saying that it was legal to buy data and NRW therefore wanted to continue making such purchases.

Both the German and the Swiss governments insist that Swiss bank data should not be purchased by German authorities once the tax agreement comes into force.

German weekly magazine Focus reported on Saturday that Switzerland may allow German authorities to make back-dated inquiries about Germans who stashed cash in secret Swiss accounts and who they suspect of moving money out of Switzerland before the deal comes into force.

Switzerland's State Secretariat for International Financial Matters, which is responsible for questions related to the Swiss-German tax deal, was not available for comment.

Support for the position of the German SPD came from its sister party in Switzerland. "This is not an attack on Switzerland. It is a criticism of our banks," Swiss Social Democratic Party president Christian Levrat told Sonntag.

($1 = 0.8132 euros)

(Reporting by Andrew Thompson; Additional reporting by Michelle Martin; Editing by Ruth Pitchford)

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