Swiss aim for speedy deal to tax offshore Greek assets

ZURICH Wed Nov 7, 2012 7:28am EST

ZURICH (Reuters) - Switzerland is ready to enter into formal negotiations with Greece over a deal to tax the assets wealthy Greeks have stashed in secret Swiss bank accounts.

The Swiss government said on Wednesday it had adopted a mandate for negotiations after consulting parliamentary committees. The two governments have been holding initial discussions on the matter for several months already.

"Bern and Athens are striving towards the swift conclusion of an agreement, similar to the agreements with Germany, Britain and Austria," the government said in a statement.

A Greek journalist made headlines last month by publishing the names of more than 2,000 of his compatriots who held Swiss bank accounts.

The "Lagarde List" - so named for Christine Lagarde, head of the International Monetary Fund - touched a nerve in near-bankrupt Greece, where rampant tax evasion is undermining a struggle to cut public spending and raise revenue.

Lagarde handed information on tax dodgers to authorities in several European Union states in 2010 when she was French finance minister.

Any agreement with Switzerland could help fill some of the gaping holes in Greece's budget by imposing a punitive levy on existing account balances and a withholding tax on future gains.

The Swiss government has sought such tax deals as an alternative to the automatic exchange of bank information, in a bid to defend the secrecy it sees as crucial to its $2 trillion offshore wealth management industry.

News of the alleged tax cheats on the "Lagarde List" enraged many who are already furious over consecutive Greek governments' failure to crack down on the rich while years of recession have wiped out a fifth of economic output and hammered middle-class living standards.

According to an EU report published last year, Greece has about 60 billion euros in unpaid taxes, an amount equal to roughly a quarter of its economy and over a sixth of its debt.

But how much money Athens stands to recoup via a withholding tax deal is not clear.

Greeks held an estimated 24 billion Swiss francs ($25.43 billion)in undeclared assets in Switzerland, according to a 2009 study by Helvea. That amount is likely to have risen as the economic situation in Greece has worsened.

The Swiss have already signed withholding tax deals with Britain, Austria and Germany, and are in talks with Italy.

However, the fate of the German deal now rests with the Bundesrat, the upper house of the German parliament, where Chancellor Angela Merkel's government lacks a majority. The opposition Social Democrats have threatened to block the agreement, saying it is too lenient on tax evaders. ($1 = 0.9437 Swiss francs) (Reporting by Catherine Bosley; Editing by Catherine Evans)

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