Greek-Swiss tax deal remains elusive

By Harry Papachristou

Greece and Switzerland remain divided on how to resolve the problem of untaxed money stashed away by Greeks in Swiss banks, the countries' finance ministers said on Tuesday, more than two years after talks between their governments began.

Debt-laden Athens, desperate for revenue to plug fiscal holes, is seeking a tax deal of the kind Switzerland had signed in 2011 with Britain, which imposed a one-off levy on secret account holders to settle their tax liabilities.

The Swiss had also signed a similar deal with Germany but Germany's upper house threw it out in November 2012.

But Swiss Finance Minister Eveline Widmer-Schlumpf said in Athens that Switzerland does not do such deals any more, focusing instead on automatic information exchange between tax authorities, currently negotiated at international level.

"Models we had earlier considered and discussed to prevent untaxed money in Swiss banks are partly outdated," Widmer-Schlumpf said after meeting Greece's Yannis Stournaras.

Stournaras, however, insisted on a deal like the one struck with Britain, under which existing funds held by British taxpayers were subject to a one-off deduction of 19-34 percent.

"We continue talks, we insist on our view, we want the British model to apply to us," he said in a joint news conference with Widmer-Schlumpf.

Widmer-Schlumpf said the Swiss had proposed a roadmap to continue the talks, but refused to give details.

"Dragging out talks is a well-known Swiss negotiating tactic," a Greek official told reporters after the meeting, speaking of condition of anonymity.

Swiss banks are under intense pressure by countries such as the United States and Germany to reveal bank accounts held by their citizens there to avoid taxes.

But Greece lacks the leverage these countries have to squeeze Switzerland. Swiss banks do not have any large activity in Greece that Athens might block to force their hand. Greek authorities have also not purchased data on secret Swiss bank accounts from whistleblowers, like Germany did.

On the contrary, Greek authorities bungled its handling of the only CD with secret Swiss bank accounts it obtained in 2010. Confidentially given to them by French authorities, the original CD was lost and they have yet to track down any tax cheats.

Giorgos Papaconstantinou, the finance minister who obtained the so-called "Lagarde list," is to face an ad hoc court trying former ministers, accused of having tampered with it to delete the names of relatives.

Papaconstantinou, a US- and British-educated economist, has denied tampering with the list, and says he is the victim of an attempt to incriminate him. No date has been set for the trial.

No official numbers exist on how much money Greeks keep in Swiss banks, with unofficial estimates ranging between 30 and 60 billion euros ($40-80 billion).

But Greek officials have warned that not all of these deposits would be subject to Greek tax. They might, for instance, be holding money owned by shipowners who are not residing or doing business in Greece. [Reuters]