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Luxembourg to end decades of banking secrecy

Wednesday, April 10, 2013 - 01:46

April 10 - Luxembourg plans to lift its bank secrecy rules for European citizens who have savings based in the country. The sharp shift in policy will take effect from 2015, bringing Luxembourg into line with all other EU countries expect Austria. Joanna Partridge reports

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Decades of bank secrecy have made the tiny country of Luxembourg rich - and one of the biggest financial centres in Europe. Now it's lifting those rules for EU citizens who have savings based in the country. The sharp change of policy will take effect at the start of 2015 and follows lobbying by Germany and the European Commission. Jean-Claude Juncker is Luxembourg's Prime Minister. SOUNDBITE: Jean-Claude Juncker, Luxembourg Prime Minister, saying (Luxembourgish): "If the government changed its position on this issue, it is not due to European pressure. Nevertheless, pressure did exist, as 25 of the 27 Member States are in favour of an automatic exchange of information." The announcement brings landlocked Luxembourg, bordered by France, Belgium and Germany, into line with all other EU countries expect Austria. Michael Hewson is from CMC Markets. SOUNDBITE: Michael Hewson, CMC Markets, saying (English): "You saw what happened in respect to Cyprus, the fact that the EU is saying there's going to be no more tax havens. Well Luxembourg is one of the biggest and its banking sector more than outweighs the size of its economy and I think other EU jurisdictions are going to come into focus once Cyprus has been put to bed. It certainly makes sense for Luxembourg to come under the microscope along with other principalities like Lichtenstein and possibly Malta to a lesser extent as well." Luxembourg's decision is also expected to put pressure on Vienna to fall into line and share information about its bank account holders. Advocates say the EU Savings Directive will help the fight against tax evasion. Austria says it will join talks on the subject.

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Luxembourg to end decades of banking secrecy

Wednesday, April 10, 2013 - 01:46