BRUSSELS - The EU commissioner trying to stop tax cheats from hiding money in Switzerland is puzzled why Austria and Luxembourg are standing in his way.
Algirdas Semeta told EUobserver that bank secrecy makes it impossible to say how much potential tax income is being lost even as EU countries cut wages and public services amid the financial crisis.
But it is likely to be big bucks: Switzerland currently hands over €330 million a year in tax payments to EU countries, while its banks manage €1.5 trillion of private wealth.
If it goes through, Semeta's bill - the so-called "amended savings tax directive" - would dynamite the status quo.
It would expand the definition of "interest" payments, making it hard to hide behind complex financial products. It would bring in a "paying agent upon receipt" rule, obliging trust funds and other shady structures to say who really owns what. And it would lead to "automatic" exchange of information on how much people have stashed away in Switzerland, as well as Andorra, Liechtenstein and San Marino.
So far, Austria and Luxembourg have stopped the Danish EU presidency from holding talks on the law.
They declined to tell EUobserver why. They tell Semeta it is because other EU countries - including Germany, Greece and the UK - are working on bilateral tax deals with Switzerland which are softer than the EU bill and which would make Swiss banks "more competitive" than Austrian and Luxembourgish ones in terms of hiding loot.
Semeta says Germany and the UK have promised him to change the bilateral pacts in order to tackle the problem.
He believes the real reason is linked to "the long history and traditions of banking secrecy" in Austria and Luxembourg.
"Taking into account the current economic situation it is very timely to find an additional source of revenue ... For instance, there are significant amounts of [Greek] savings which are put in Swiss banks and Greece deserves to collect those taxes. Sometimes, I do not understand why we were unable to reach this agreement already at the beginning of the crisis," he said.
It remains to be seen if Germany and the UK will live up to their word, however.
Their finance ministries declined to give details of what they are actually changing in their Swiss pacts. Martin Kotthaus, a German spokesman said only that it concerns a "a rather technical provision" - a comment which does not sound like the large-scale "carving out" of softeners spoken of by Semeta.
Germany has also asked the Danish EU presidency not to start talks on Semeta's bill just yet.
It says the German parliament should first ratify the tweaked version of its Swiss deal in order to give confidence to Austria and Luxembourg - a continuation of the merry-go-round in which EU countries blame each other for delays.
Meanwhile, when Denmark in July hands over the EU chairmanship to Cyprus, the dossier will fall into the lap of a country which is itself a tax haven, as well as a favoured destination for money launderers.
'Trust me, I'm Swiss'
For its part, Switzerland - which will also have to get on board if Semeta's law is to have any meaning and which risks losing business to the Bahamas, Hong Kong and Singapore - is not making encouraging noises.
Mario Tour, a spokesman for the Swiss finance ministry, told this website: "We do not want to have undeclared or criminal money in Switzerland."
But when asked why it drew up the loophole-riddled bilateral pacts with Germany and the UK in the first place, he said: "We think they're quite an effective way to tax outside income."
When asked what he thinks about automatic exchange of information, he answered: "It gives you so much data that it is difficult to handle. With such an amount of data, it's difficult to find people who don't pay their taxes ... We want to deliver tax money, not data."
Tour noted that people do not believe him when he says Switzerland will expose cheats by itself.
"That's one of our difficulties - to prove that we really mean it. People say: 'The Swiss have always been cheats, so this is just a drive to hide money.' Maybe it's understandable. But we will put [our promises] into force," he added.