German opposition says Swiss tax pact doomed in current form

BERLIN (Reuters) - A leader of Germany's opposition Social Democrats (SPD) said on Saturday a deal between the German and Swiss governments to levy taxes on German assets in Swiss bank accounts wasn't worth the paper it was written on and should be scrapped.

Andrea Nahles, SPD general secretary and the party's number two, told Die Welt newspaper that in her view Finance Minister Wolfgang Schaeuble negotiated poorly with Switzerland.

"Schaeuble did a poor job in the negotiations and in this form the agreement won't make it," she said. "Because until the agreement Schaeuble negotiated takes effect, the unreported assets can be safely moved to another country."

She added: "..the agreement isn't even worth the paper it was printed on" because evidence obtained in new bank data from whistleblowers indicated assets belonging to Germans were already being moved out of Switzerland to other countries.

On Thursday, state prosecutors in North Rhine-Westphalia said they were pursuing tax evaders who secretly stashed cash in Switzerland after seeing new data from a presumed whistleblower.

The move put new strains on ties between Germany and Switzerland, which has sharply criticized previous purchases of leaked bank data by officials in the state.

In a newspaper interview on Saturday, Swiss Finance Minister Eveline Widmer-Schlumpf said there were no signs of a mass exodus of German money from Swiss accounts.

"We have little indication until now that German clients are withdrawing their assets in a major way," she said.

In part to prevent data purchases, Switzerland and Germany struck the tax deal in April, but it could easily unravel. The SPD has promised to veto the deal in its current form, while a spokesman for the Swiss government said on Thursday it would not be renegotiated.

Chancellor Angela Merkel's government says the deal will enable Berlin to net huge sums if and when it takes effect. Germans hold an estimated 150 billion euros in Swiss accounts.

But she may have to offer the SPD, who say the deal lets tax dodgers off too easily, more concessions to get the pact through parliament where vote is tentatively planned this autumn.

Banking secrecy is crucial to Switzerland's $2 trillion offshore wealth management industry, and the country has refused to agree to an automatic exchange of information.

The Swiss have reacted angrily to the data purchases and even issued arrest warrants earlier this year for three German tax investigators they accused of buying secret tax data.

(Additional reporting by Katharina Bart in Zurich; Editing by Rosalind Russell)

Source: http://news.yahoo.com/german-opposition-says-swiss-tax-pact-doomed-current-144949598--finance.html

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