GENEVA Switzerland's aim of preserving banking secrecy has been cast in doubt after the finance minister suggested all options are open, reopening the debate over a pillar of the country's economy.
Switzerland became a tax pariah after data leaks established what many had long suspected - that many billions of dollars had been stashed in Swiss banks to escape taxation elsewhere.
The Swiss government has pledged its commitment to European tax deals allowing EU citizens to pay tax on secret Swiss accounts without revealing their identity, even after German politicians sank that country's deal this month.
But more recent comments from Swiss Finance Minister Eveline Widmer-Schlumpf raised the ire of politicians in Switzerland, even as they were welcomed by some neighbors.
"Of course we will enter a dialogue with the EU Commission on possible information and what we are prepared to discuss and what we would want for it in return," she told a December 20 news conference.
The remark sparked a flurry of opposition in Switzerland after some politicians interpreted it as an attack on the country's banking sector, since it implied an automatic exchange of data with the EU could be an option, which would mark a U-turn in Switzerland's stance.
"Her comments annoyed me greatly," Philipp Mueller, leader of Switzerland's Free Democrats (FDP), told the Tages-Anzeiger newspaper on Saturday.
"She's betraying her Cabinet colleagues and (chief finance diplomat) Michael Ambuehl by changing her mind only a day after the government rejects an automatic exchange of information, and she's weakening Switzerland's negotiating position."
He said that tax negotiations should be moved from the Finance Ministry to the Foreign Ministry as a result.
Widmer-Schlumpf's spokesman Roland Meier said her comments were meant to open a domestic debate about how Switzerland exchanges information, given unrelenting pressure on secrecy amid a raft of new accords the Swiss government has agreed to.
However there could not be any taboos in the domestic debate on how Switzerland could or should exchange information in future, he said.
Meier stressed that she had not referred to an automated exchange of information and that she continued to back the government's recently introduced "clean money strategy" which aims to stop the flow of untaxed money.
Lorenz Hess, a senior member of Widmer-Schlumpf's BDP party, also hit back in the mass-market Blick newspaper, accusing the FDP's Mueller of playing party politics and his party colleague Ruedi Noser of being a lobbyist for certain banks.
Despite the efforts to soothe political jitters, Widmer-Schlumpf's remarks have reopened the secrecy debate, with foreign officials seizing on her remarks as evidence Switzerland is considering making further concessions on secrecy.
EU Ambassador Richard Jones welcomed her comments and told the NZZ am Sonntag newspaper that they came as no surprise because international developments showed the world was moving towards such automatic exchanges of information.
Norbert Walter-Borjans, finance minister of North-Rhine Westphalia in Germany, said her remarks vindicated his opposition to a withholding tax pact, which his party successfully brought to collapse.
(Additional reporting by Katharina Bart and Paul Arnold in Zurich and Madeline Chambers in Berlin; editing by Ron Askew)