BERLIN Nov 18 Finance Minister Wolfgang
Schaeuble will offer Germany's federal states a financial
incentive to try to stop opposition parties blocking a tax
evasion deal with Switzerland in a vote in the upper house this
week, a German magazine reported.
The opposition Social Democrats (SPD) have vowed to block
the deal, which would net Germany billions in tax revenues, in
Friday's vote. The party says it is too soft on tax dodgers.
A defeat would be an embarrassment for conservative
Chancellor Angela Merkel who has already had to amend a previous
deal due to SPD demands. Tortuous negotiations with Switzerland
have dragged on for years.
Der Spiegel reported that Schaeuble, at Merkel's behest,
will effectively offer the Germany's states about 3 billion more
in tax revenues by saying the federal government will forego the
amount it had earmarked for itself. It cited no sources.
If the bill goes through, Germany expects Switzerland to pay
Germany about 10 billion euros in compensation for lost taxes.
Originally the central government was to take about 30 percent
of that with the states receiving 70 percent.
"We want to make clear that the deal should not fail because
of money," Spiegel quote a chancellery source as saying.
A finance ministry spokeswoman rejected the report as
Germans hold an estimated 150 billion euros in undeclared
money in Swiss accounts. The agreement would require Swiss banks
to levy a punitive charge and to tax future income, with the
proceeds passed on to Germany.
However, the identity of account holders would remain
secret, a point the SPD opposes. It also argues that the bill
allows people to move their money from Switzerland before the
deal takes effect.
The Bundestag lower house has already approved the bill but
it has to go through the upper house, where Merkel's
centre-right coalition lacks a majority.
Germany's states, including North Rhine-Westphalia which is
ruled by the SPD and Greens, have sought to catch tax dodgers by
buying from whistleblowers CDs with details about Germans who
have stashed cash in secret Swiss bank accounts.
Last week, German state prosecutors began a search of the
premises of clients of Swiss bank UBS suspected of
tax evasion. It is just one of several banks, also including
Credit Suisse, caught up in investigations into
personal tax evasion in the United States and Europe.
(Additional reporting by Thomas Seythal; Writing by Madeline
Chambers; Editing by David Cowell)