Brussels - A simmering row between Germany and Luxembourg
over tax havens moved closer to boiling point Tuesday as European
Union finance ministers met to discuss how best to respond to the
bloc's worst recession in decades.
Speaking to reporters after the talks in Brussels, German Finance
Minister Peer Steinbrueck defended a decision by the Group of 20
(G20) and the Organization for Economic Co-operation and Development
(OCED) to include Luxembourg, Austria and Belgium in their list of
uncooperative tax jurisdictions.
'I think this list, which is incomplete and may contain errors, is
right,' Steinbrueck said.
The minister also said Germany would 'continue to push on this
issue, since the German tax authorities are losing money.'
The comments came less than a day after Luxembourg Prime Minister
Jean-Claude Juncker reiterated his opposition to the list, noting
that EU leaders had previously promised not to target any of the
bloc's member states.
With Germany enjoying the backing of another EU heavyweight,
France, Juncker's position as the influential chairman of the
eurogroup of countries that share the euro looks increasingly under
threat.
Juncker, who is the EU's longest-serving prime minister, was first
designated president of the group in 2005. His mandate was renewed by
his eurozone colleagues only last year.
But in an apparent acknowledgement that his days may now be
numbered, Juncker pointed out in recent comments that his tenure
would depend on the outcome of national elections due to take place
next month.
'I face national elections on June 7, and everything depends on
the results of those elections,' Juncker said ahead of Monday
evening's eurozone meeting.
Showing obvious disdain for Juncker's position, Steinbrueck on
Tuesday grouped his country and other European tax havens with the
likes of Burkina Faso.
'I will certainly invite Luxembourg, Lichtenstein, Switzerland,
Austria and Ouagadougou to a follow up conference (on tax havens) in
June in Berlin,' Steinbrueck said.
Rushing to Luxembourg's defence was the Czech presidency of the
EU, whose finance minister, Miroslav Kalousek, said the G20 was wrong
to include EU nations in its tax havens list.
'Personally, I feel it necessary to say sorry to Luxembourg,
Austria and Belgium. In no case are they non-cooperating
jurisdictions or tax havens,' said Kalousek, whose outgoing
government formally steps down this week.
The row in Brussels came just hours after US President Barack
Obama unveiled a new proposal to rein in tax loopholes and target
companies that store revenue in offshore bank accounts to avoid
paying taxes.
Kalousek said it was too early to comment on Obama's plans, saying
only that he generally favoured common international action on
indirect, rather than direct taxation.
At their meeting in Brussels, EU finance ministers formally
endorsed an earlier decision by EU leaders to double to 50 billion
euros (67 billion dollars) the total amount of EU lending available
to member states that run into financial difficulty as a result of
the global credit squeeze.
Ministers also agreed to throw a 5-billion-euro lifeline to
Romania, the third EU country to seek outside help after Hungary and
Latvia.
Meanwhile, ministers failed to agree to plans to raise the
minimum level of taxes that are applied by member states on
cigarettes and other tobacco products.
Faced with ballooning budget deficits as the recession bites and
the population continues to age, ministers also discussed the need to
reform Europe's generous pension system.
According to estimates, public pension expenditure alone is
projected to increase by 2.4 percentage points of the EU's gross
domestic product between now and 2060.
Member states are set to discuss the bloc's employment and welfare
policies at a meeting due to take place in Prague on Thursday.
USA
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