* Finance ministers gather in Dublin after chaotic Cyprus
* Austria's Fekter rejects bank data exchange as offence to
* Ministers set to give Ireland, Portugal longer to repay EU
By John O'Donnell and Jan Strupczewski
DUBLIN, April 12 Austria vowed on Friday to
stick to its bank secrecy laws, defying renewed pressure to
follow Luxembourg in revealing information on European Union
depositors with governments to clamp down on tax evasion.
The issue of tax havens and bank secrecy was a last-minute
addition to the agenda of informal talks of European Union
finance ministers in Dublin. Cyprus's bailout and extending loan
repayments for Portugal and Ireland are also under discussion.
Austria is a minority of one in defending its right to keep
"Austria is sticking to bank secrecy," the country's finance
minister, Maria Fekter, told reporters before the first day of
talks. She said she did not believe an automatic exchange of
information was needed, as is accepted in other EU countries,
and that such a step would be an invasion of privacy rights.
Ministers are set to agree 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
likely to be 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 attending are also to give 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
While the 13 billion is more than the initially envisaged 7
billion, the difference comes mainly from the agreement to close
the country's second biggest Laiki, or Popular, bank and
restructure its biggest bank, the Bank of Cyprus.
The agreement between international lenders and Cyprus
spells where Nicosia will get its part of the money
Among the plans, Cyprus will sell 400 million euros' worth
of gold reserves, and will have to raise corporate tax and
capital gains tax rates at a time when its economy is forecast
to shrink more than 12 percent in the next two years.
The ministers will not discuss any emergency measures to
help Slovenia, where a large portfolio of bad loans has raised
concern the country may need EU help, like Cyprus.
DIGGING IN HEELS
The ministers' meeting 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.
This discussion 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. Here the state sniffs
around deep into the private affairs of account holders," Fekter
said on Friday.
She criticised others including the United States and
Britain for permitting tax havens.
"Great Britain has many money laundering centres and tax
havens in its immediate legal remit - the Channel Islands,
Gibraltar, the Cayman Islands, Virgin Islands," Fekter said,
repeating earlier accusations.
"These are all hot spots for tax evasion and money
laundering," she said, adding the standard imposed on Cyprus
should be applied across Europe in the fight against tax havens.
The Dublin meeting is a so-called informal gathering -
firstly of finance ministers for the euro zone countries, then
for the full EU 27 - and no decisions are expected.
It will also debate how to press ahead with setting up a
"banking union" across the euro zone and Irish Finance Minister
Michael Noonan said he expected ministers to address last-minute
German concerns about the legal basis for allowing the European
Central Bank to supervise banks.
Banking union is considered 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.
Michel Barnier, the European commissioner in charge of
regulation, said he hoped ministers would "redouble" efforts on
banking union and tackling tax havens.
Part of this debate concerns possible direct
recapitalisation of banks by the euro zone's ESM bailout fund -
a step meant to break the vicious circle between indebted
governments and shaky banks.
Ireland, which hopes to exit its bailout programme this
year, fears this promise, made by euro zone leaders, may never
Noonan said in a newspaper interview on Friday that ESM
direct help to banks may have to wait until not only there is
single supervision in the euro zone, but also a bank resolution
mechanism -- further delaying the prospect.