Austria, Luxembourg frustrate EU plans to fight tax evasion

(BRUSSELS) - Austria and Luxembourg on Tuesday frustrated European Union plans to claw back unpaid tax on earnings lying in offshore banking havens, prompting an angry rebuke from Brussels.

"Tackling tax evasion is a growth-friendly way of boosting national budgets. How can any member state possibly justify blocking progress in this area," said tax commissioner Algirdas Semeta after talks between finance ministers broke down at EU headquarters.

Citing "extreme frustration" on a bid to open negotiations to reclaim lost taxes from accounts in Switzerland and other territories, Semeta said "the positions Austria and Luxembourg adopted are unfair."

A row centred on whether EU governments would have to automatically share information on deposits.

"I leave it to [the two governments] to explain to citizens across Europe why they can support tax hikes and spending cuts for ordinary people, but won't allow us to step up our fight against tax evaders," Semeta said.

He said the countries, known for secretive banking traditions, had shown an "unjustified resistance to merely opening discussions."

The Danish chairwoman of the finance ministers' meeting must report back to EU leaders ahead of a summit at the end of June before the next steps can be decided.

3167th ECONOMIC and FINANCIAL AFFAIRS Council meeting (provisional version) - Brussels, 15 May 2012