November 20, 2012 / 12:05 PM / 6 years ago

Germany's Schaeuble warns opposition on Swiss tax deal veto

BERLIN, Nov 20 (Reuters) - German Finance Minister Wolfgang Schaeuble has warned opposition parties against blocking a deal to tax assets stashed by German citizens in Swiss bank accounts ahead of a vote in parliament’s upper house on Friday.

German states run by the Social Democrats (SPD) and Greens have vowed to veto the agreement between Berlin and Berne, saying it lets tax evaders off too easily.

“Given the meagre revenues in the German states and municipalities, I find it completely unacceptable for the Bundesrat to reject the tax deal with Switzerland,” Schaeuble said on Tuesday in a speech to the Bundestag lower house.

“There is no rational, comprehensible argument” against the deal, he added. “If you feel responsible for the revenues of Germany and its states, then give up your politically-motivated blockade.”

Schaeuble has been the leading advocate of a deal that would require Swiss banks to levy a punitive charge of some 150 billion euros on undeclared funds held by Germans and tax future income. The proceeds would be passed on to Germany without the identity of the account holders being revealed.

With less than a year to go until Germany holds an election, the SPD are describing the deal as an example of Chancellor Angela Merkel’s soft approach on financial crimes committed by the wealthy.

They are vowing to put their rejection of the deal at the centre of an election campaign focused on “social justice”. That campaign is being led by Peer Steinbrueck, a former finance minister who cracked down ruthlessly on bank secrecy, famously referring to the Swiss as Indians running scared from the cavalry.

If the deal is rejected in the Bundesrat upper house on Friday, it could still be salvaged in a mediation procedure that seeks to resolve differences between the Bundestag and Bundesrat, but the chances of that happening are slim.

Switzerland has already done similar deals with Britain and Austria, and hopes countries like Greece and Italy will follow suit. On Monday, a judicial source said the former head of UBS’s French arm had been placed under investigation as part of a probe into whether the Swiss bank helped clients evade taxes. (Reporting by Noah Barkin; Editing by Catherine Evans)

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