Swiss furious at German finance minister over tax haven remarks

RELATIONS BETWEEN Berlin and Berne have reached a new low after remarks by German finance minister Peer Steinbrück worsened an ongoing row over tax evasion and banking secrecy.

Berne’s decision to loosen bank secrecy laws in cases of suspected tax evasion prompted Mr Steinbrück to compare the Swiss to Indians scared of the US cavalry.

He said that the perspective of Switzerland landing on an OECD list of countries viewed as non-co-operative on tax evasion matters “is like having the seventh cavalry in Fort Yuma that can be ordered to ride out, but doesn’t have to”.

“The important thing is that the Indians know it exists,” said Mr Steinbrück.

Swiss foreign minister Micheline Calmy-Rey hauled in the German ambassador to complain about what she termed Mr Steinbrück’s “contemptuous and aggressive” remarks.

One of her cabinet colleagues has already swapped his official Mercedes for a Renault in protest, while a Swiss parliamentarian compared Mr Steinbrück to a member of the Gestapo, “uncompromising, disrespectful and haughty”.

“He reminds me of the old generation of Germans, who 60 years ago went through the streets with leather coats, boots and armbands,” said Swiss MP Thomas Müller in parliament last week.

Mr Steinbrück, notorious for his sharp tongue, has said he sees no reason to apologise and has described as “completely unacceptable” hate mail he has received from Switzerland describing him as a “Nazi henchman”. Last autumn he said someone needed to “take the whip” to the Swiss to bring their banking secrecy laws in line with the rest of Europe.

Much has happened since then: Swiss banking giant UBS last month agreed to pay a record $780 million (€574 million) fine for helping US citizens hide $20 billion in assets. It is facing a second civil suit in the US and a demand to name 52,000 US customers suspected of evading tax with its assistance.

Last week Swiss authorities said they would loosen the country’s secrecy laws, but Mr Steinbrück’s remarks have stirred up deep-seated Swiss fears of aggression from their larger neighbour.

“How much longer will it be before Switzerland officially punches Steinbrück in the mouth?” demanded one newspaper letter-writer.

With no sign of an apology from Mr Steinbrück, Christian Democrat (CDU) politicians in Germany have attacked his “unacceptable choice of words against the Swiss”.