Luxembourg lawmakers protest German tax haven jibe

(LUXEMBOURG) - Luxembourg lawmakers unanimously backed a resolution on Wednesday protesting the German finance minister's attacks on banking secrecy, which they said hurt relations between the two countries.

Germany's outspoken finance minister, Peer Steinbrueck, made a new jibe on Tuesday against Luxembourg and other European finance centres, likening them to the poor African nation of Burkina Faso, in a tax haven row.

The remarks "damage the exemplary nature of relations that have developed between the Federal Republic of Germany and Luxembourg since the end of World War II," the resolution says.

The lawmakers also condemned "the total lack of consideration he has shown for Burkina Faso."

Steinbrueck told journalists in Brussels on Tuesday that he regretted that Switzerland, Luxembourg, Liechtenstein and Austria had not bothered to attend an international conference on tax havens in Paris last October.

"Of course, I am going to invite them for a follow-up conference in June in Berlin," he said, adding ironically: "Luxembourg, Liechtenstein, Switzerland, Austria and Ouagadougou," the capital of Burkina Faso.

Luxembourg Foreign Minister Jean Asselborn told German magazine Der Spiegel's online edition that Steinbrueck had plumbed new depths with the comment, which he said showed an "arrogance that is difficult to surpass."

Steinbrueck has repeatedly ruffled feathers in Luxembourg, Liechtenstein, Switzerland and Austria as he has spearheaded a campaign along with France to crack down on countries that do not cooperate with foreign tax authorities.

His drive nearly triggered a major diplomatic standoff with Switzerland earlier this year when he used a Wild West analogy interpreted in the country as likening the Swiss to "Indians."

This led to one Swiss MP saying that Steinbrueck "reminds me of the old generation of Germans, who 60 years ago went through the streets with leather coats, boots and armbands," a Nazi analogy that caused outrage in Germany.

However, the international push to crack down on perceived tax havens has paid off as the four countries have agreed to cooperate with foreign tax authorities, in effect limiting their banking secrecy rules.

Steinbrueck refused on Tuesday to apologise for lobbying for Luxembourg to be included on an international list of tax havens, which left the fellow EU country feeling betrayed by its bigger neighbour.

Austria, Belgium and Luxembourg are the only EU countries that have bank secrecy rules, although they have recently promised to cooperate with foreign tax authorities.