The German finance minister, Peer Steinbrück, said Tuesday that Switzerland should be placed on an international list of tax havens, this without even laughing, as his country moves from one cock-up to another.
Speaking to reporters in Paris after a conference on measures to combat tax avoidance, Steinbrück said Switzerland deserved to be on the list being drawn up by the Organization for Economic Cooperation and Development because Swiss investment conditions encouraged some German taxpayers to commit fraud.
Delphine Jaccard, a spokeswoman for the Swiss Finance Ministry, said in a statement, "Switzerland has taken account of the results of the conference and presently sees no reason to react." Switzerland, she said, "has already made agreements with several states, including Germany" relating to "the exchange of information for the implementation of domestic law of contractual states in cases of tax fraud."
"Switzerland is only prepared to cooperate with us if there is tax evasion," Steinbrück added. "But to prove this tax evasion we need the exact information that Switzerland has, but it will not deliver it. That is the problem."
Now I don't mean to go on a rant...but I will.
The Germans, once again, are vomiting forward the opinions on Switzerland’s whole financial system not just its taxation procedures. The whole idea that Switzerland should be forced into Europe by marginalising it is a typical bully boy tactic of a crumbling alliance.
I would have thought that the Germans should take a look at their own system first and show the rest of us their shining example in fiscal management.
For example Herr Steinbruck, take a look at the fine way your regulatory and market organisations have managed the VW/Porsche farce.
Porsche said on Monday that it had 43pc of VW's shares, and options relating to a further 32pc. That sowed panic among hedge funds who had sold the stock short. As they desperately tried to buy shares to cover their positions, the price shot up as high as 1000 Euros or 20 times the target of most analysts.
The squeeze leaves many with red faces. Start with the short sellers. They may have reckoned Porsche would pause on its buying campaign once it hit 51pc, leaving the shares to deflate for a while. But VW’s limited free float made that a risky bet – akin to picking up pennies in front of a steamroller.
German market overseers also look inept. Porsche doesn’t have to disclose its activities in the options market, even if those options would in practice enable it to lay its hands on the underlying shares. That leaves other investors largely in the dark.
German Index tracking funds were forced to buy VW shares to keep in line with the index weighting in what amounts to guaranteed losses for million of Germans. During all this time the market regulators sat on the fence and did nothing. No suspending of trading, no limits, nothing. Finally the Dax announced that all would end on Monday. I guess this waiting game is so the Herr Steinbruck can find a way of blaming their totally inept handling of the affair on someone else, the evil Swiss perhaps.
I am reminded of the chant when England beat Germany at football 5-1. "Let's all laugh at Germany."
Of course the Swiss banks, mainly UBS have smarted from losses and bad moves, but we have kept the bail outs in-house. If Europe is such a great idea then I would have expected to have Hungary (an EU member state) bailed out by its European 'partners' not so, the IMF did that.
By the way Herr Steinbruck, my house prices has not gone down 30%, and there are no foreclosure signs in my village.
I would suggest that before the European community starts being tough guys with Switzerland they get themselves into a position where corruption is routed out of the EU Commission, that the EU actually creates a regulatory system that works rather than just fleecing its members, that politicians stop taking money from the banks they are supposed to oversee and that governments create a workable tax system that doesn't tax the life out of its citizens, perhaps then they will not seek out 'tax havens'.
The whole EU community should take a long hard look at the way Switzerland runs its affairs. We have true democracy here with referendum on pretty much everything, we have a firm but fair regulatory system that protects against systemic risk.
The EU may also want to consider the rule here that if a lender is found to have not done sufficient investigation into the ability of the borrower to repay the loan, then the lender becomes liable.
This simple ruling adopted by the loud mouthed politicians in the EU scrambling to blame everyone else, would have killed this current crisis before it even started.
When Houdini was performing his tricks he said the essence of magic was misdirection, get your 'mark' to concentrate on something else while you performed your 'magic'. This is a classic case of misdirection. Blame the tax havens for your problems so they won't notice you trying to shovel away the excrement you have left on your own doorstep.
Thanks Herr Steinbruck, for your opinions, but next time we want them we will ask... just don't hold your breath.