News / Economy

    Austria Slams US, UK 'Tax Havens'

    Safe deposit boxes are pictured in a bank in the western Austrian city of Hall in Tirol, April 8, 2013. Safe deposit boxes are pictured in a bank in the western Austrian city of Hall in Tirol, April 8, 2013.
    x
    Safe deposit boxes are pictured in a bank in the western Austrian city of Hall in Tirol, April 8, 2013.
    Safe deposit boxes are pictured in a bank in the western Austrian city of Hall in Tirol, April 8, 2013.
    Reuters
    Austria hit back at critics of its banking secrecy on Thursday by urging Britain and the United States to crack down on money laundering and tax havens in their own backyards, as EU ministers prepared to debate the issue in Dublin.

    Isolated in the European Union following Luxembourg's move this week to share foreigners' bank data to foil tax cheats, Austria's finance minister said she could discuss such a change of tack - but insisted it could not be a "one-way street" and accused London and Washington of failing to close international tax loopholes in the likes of Delaware and the Channel Islands.

    "Delaware and Nevada are tax havens and money-laundering centers that have to be laid bare just as much,'' Fekter told Die Presse newspaper and adding that Britain was "the island of the blessed for tax evasion and money-laundering.''

    Last month's $13 billion EU and IMF bailout of Cyprus, which raised questions over the way the island's crippled banks had ballooned with money from Russia and elsewhere, has given new prominence to efforts within the EU and between Europe and the United States to make it harder for citizens to shelter savings from tax in secret accounts in other countries.
           
    The Irish hosts said the EU's 27 finance ministers will discuss a pilot project being pursued by the bloc's five largest economies to deepen cooperation on tackling tax evasion during two days of talks in Dublin that start on Friday.

    There could be some frank talking as Vienna defends a long tradition of banking secrecy, of a kind the likes of non-EU member Switzerland, and now Luxembourg, have agreed to curtail.

    France's budget minister, whose predecessor was forced out last month in a scandal over a secret Swiss bank account, warned Austria on Thursday that it risked being blacklisted for financial transactions if it did not agree to reveal to their governments which foreign EU citizens had accounts in its banks.

    "It's not normal that a country like Austria for example doesn't communicate the information it has concerning EU citizens who hold accounts there,'' Bernard Cazeneuve said.

    "If these countries don't cooperate, if there isn't an agreement for an information exchange that allows for total transparency at the heart of the European Union, these countries expose themselves to the risk of appearing on the list of non-cooperating states and territories,'' he told France-Info radio.

    Austria's Defense
           
    For her part, Fekter said Britain, and notably associated territories like the Channel Islands, should be bound by rules that EU governments now required of Cyprus to prevent people controlling companies and trusts anonymously.

    "What we demand of Cyprus, a small island, we also demand of the [United] Kingdom,'' Fekter, a conservative member of Austria's governing coalition, told Die Presse.

    She told Kurier newspaper: "We want a trust registry for the Channel Islands but also for countries where British law applies such as the Cayman Islands, Virgin Islands or Gibraltar ... These are all areas that are havens for those fleeing taxes.''

    Luxembourg, the only other EU country that had refused to swap personal data on savers in its banks, said on Wednesday it would so by 2015, heaping pressure on Vienna to follow suit.

    Chancellor Werner Faymann, a Social Democrat, said this week that Austria was ready to negotiate with Brussels as long as bank secrecy remained intact for Austrian citizens. But his conservative junior coalition partners have taken a harder line.

    The European Commission warned Austria on Monday that its banking secrecy would put it in a "lonely and unsustainable position'' if it did not adopt the same rules as other countries in sharing data on foreign depositors.

    The United States is also after citizens that stash wealth abroad, and is set to start talks with Austria soon.

    EU officials have threatened to sue Austria if it gives the United States information about its citizens' bank accounts here but refused to do the same for other EU members.

    Austria now withholds tax on EU citizens' interest income and sends the money anonymously to their home countries. Austrian bankers have played down the potential impact of sharing information on foreign depositors.

    Cyprus Bailout

    Fallout from the Cyprus bailout will top the agenda of the EU finance ministers meeting, with focus also on growing German reluctance over eurozone banking reform.

    Unease surrounding the rescue package for Cyprus grew on Wednesday after Reuters and other news organizations obtained documents detailing how the bailout will be financed and how much of the total Cyprus is now expected to contribute.

    Cyprus was originally meant to come up with seven billion euros, and the EU and IMF would provide 10 billion, but the documents show the total package will now cost 23 billion euros, with Cyprus providing 13 billion of that. There is likely to be intense debate over whether the deal was successfully handled.

    The Dublin meeting, an informal gathering at which no decisions are expected, will also examine the deepening problems in Slovenia and debate how to press ahead with a fully fledged "banking union'' across the eurozone countries and wider EU.

    In the long-run, it is the banking union debate that is most critical since it touches on issues such as how to resolve bad banks, how to put in place a single deposit-guarantee scheme and how to establish a single resolution fund.

    In June last year, EU leaders agreed that establishing a banking union was an essential next step in breaking the "doom loop'' between big, problem banks and indebted sovereign governments, so as to avoid one dragging the other down.

    But momentum towards banking union has slackened, especially among some German officials, as the complexities and potential difficulties of the plan have come into clearer focus.

    Although no formal decisions will be taken at the meeting, ministers are expected to give their endorsement to extending by seven years the time that Ireland and Portugal get to repay loans they have already received from the bailout funds.

    This would be a significant concession to Ireland, helping to seal its return to normal borrowing on markets, as well a boost to Portugal as it struggles to push through spending cuts.

    You May Like

    Video Somali, AU Forces Face Resurgent Al-Shabab

    Somalia’s Western backers frustrated over country’s slow progress in establishing its armed forces to bring security after 25 years of chaos

    Israel Makes Push for Gaza Strip Recovery

    After years of economic blockade and attempts to disable Hamas, Israeli leaders eventually realized that Hamas’ downfall could lead to chaos or the rise of a more radical Jihadist group

    Slump in Chinese Tourists Hitting Hong Kong Retail

    Mainland Chinese account for up to three-quarters of visitors to Hong Kong, but that number is falling, and shopping centers are struggling to 'shift gears' and maintain sales

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Somali, African Union Forces Face Resurgent Al-Shababi
    X
    Henry Ridgwell
    April 28, 2016 4:20 PM
    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Bangladesh Targeted Killings Spark Wave of Fear

    People in Bangladesh’s capital are expressing deep concern over the brutal attacks that have killed secular blogger, and most recently a gay rights activist and an employee of the U.S. embassy. Xulhaz Mannan, an embassy protocol officer and the editor of the country’s only gay and transgender magazine Roopban; and his friend Mehboob Rabbi Tanoy, a gay rights activist, were hacked to death by five attackers in Mannan’s Dhaka home earlier this month.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.
    Video

    Video West Urges Unity in Libya as Migrant Numbers Soar

    The Italian government says a NATO-led mission aimed at stemming the flow of migrants from Libya to Europe could be up and running by July. There are concerns that the number of migrants could soar as the route through Greece and the Balkans remains blocked. Western powers say the political chaos in Libya is being exploited by people smugglers — and they are pressuring rival groups to come together under the new unity government. VOA's Henry Ridgwell reports.
    Video

    Video Russia’s TV Rain Swims Against Tide in Sea of Kremlin Propaganda

    Russia’s media freedoms have been gradually eroded under President Vladimir Putin as his government has increased state ownership, influence, and restrictions on critical reporting. Television, where most Russians get their news, has been the main target and is now almost completely state controlled. But in the Russian capital, TV Rain stands out as an island in a sea of Kremlin propaganda.
    Video

    Video Kurdish Town Receives Refugees but Lacks Resources

    A wave of refugees is pouring into the Kurdish town of Afrin in northern Syria as a result of fighting between rebel forces and Islamic State militants. VOA’s Amina Misto went to the town and reports local authorities are finding it difficult to cope with this influx of internally displaced people. Bronwyn Benito narrates her report.
    Video

    Video Scientists Build Human Tissue on Animal Matrix

    The question has always been, if a gecko can grow back its tail, why can't we regenerate our lost body parts? Well, maybe we can, someday. Scientists are moving towards the ability to rebuild fully functioning organs, and have made significant progress replacing muscles and other tissue.
    Video

    Video Containing Chernobyl Radiation Continues 30 Years After Explosion

    April 26 marks the 30th anniversary of the Chernobyl nuclear disaster. Hundreds were killed following the explosion and it's estimated that thousands more have died from cancers caused by the radiation. Henry Ridgwell traveled to Chernobyl and reports for VOA on the continuing efforts to decommission the site -- and on the fledgling plans for a new future in the vast exclusion zone.
    Video

    Video Frustration Builds Among Refugees Trapped at Macedonian Border

    On the Greek border with Macedonia, 12,000 refugees continue to wait. Since the route to the rest of Europe was closed last month, the makeshift camp at Idomeni has seen protests and tear gas. But while those here wait, their frustration grows — as do reports of people attempting to find new ways of continuing their journey. John Owens reports from Idomeni.
    Video

    Video Researchers: Bees Help Kenyan Farmers Fend Off Elephants

    Elephant crop-raiding continues to be a major source of human-wildlife conflict in Kenya, so one elephant researcher is helping to alleviate the problem near Tsavo East National Park with beehive fences, which use elephants’ natural aversion to bees to deter them from farms. VOA’s Jill Craig visited the area ahead of this month's Giants Club Summit, which will bring together dignitaries at Mount Kenya to find solutions to combat poaching, the No. 1 threat to elephants.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8804
    JPY
    USD
    108.15
    GBP
    USD
    0.6853
    CAD
    USD
    1.2556
    INR
    USD
    66.500

    Rates may not be current.