Finance ministers meeting in Brussels today (14 May) will attempt to approve the Savings Tax Directive, which has provoked political infighting in Austria, one of the last countries to hold out against implementing the directive.
EU finance ministers meeting in Dublin on 13 April paved the way for greater information-sharing to counter tax evasion by isolating Austria for its refusal to share information on bank deposits.
The issue returns to the agenda of the ministers today, when the directive will be discussed again alongside proposals to mandate the EU to strike similar deals with Switzerland and other non-EU countries.
These have been delayed because Austria and Luxembourg refused to accept the mandate, but Vienna is now isolated on the issue after Luxembourg changed tack last month.
>> Read: Austria isolated on banking secrecy
Faymann pressures finance minister
In Dublin, Austrian Finance Minister Maria Fekter said "Austria is sticking to bank secrecy," adding she would defend the position “like a lioness”.
However, Austrian Chancellor Werner Faymann said on 27 April that the country aimed to agree “within weeks” to give other EU countries access to foreigners' bank account details, allowing the bloc to begin talks over bank secrecy with non-EU states such as Switzerland.
This weekend he put more pressure on Fekter, claiming that if she failed to sign up to the directive today, he would step in.
“If this agreement to automatic information exchange does not happen at the finance ministers meeting on 14 May, it will be agreed a week later at the heads of state summit, when I am there,” he told Austrian tabloid Kronen Zeitung on 11 May.
The Social-Democrat chancellor also made a veiled swipe at his centre-right colleague Fekter, saying he believed that Austria has missed an opportunity to deal with the issue some time ago.
Austrian banks at times use secrecy as a marketing tool, but foreign deposits do not play as much of a role as they do in major offshore centres such as Cyprus and Luxembourg. EU citizens have about €35 billion in Austrian deposits, 10% of the total, while foreigners have €53 billion in deposits, the central bank says.
Ministers to discuss bank resolution proposals
Fekter’s position is in line with her stronger anti-EU stance, a popular means of shoring support in advance of national elections in October.
Other than the Savings Directive, and the mandate to agree tax reciprocity issues with third countries, ministers will discuss ongoing EU plans to introduce a more comprehensive information-sharing regime on tax (see background).
Long discussions are also expected on proposals – expected to be issued by the Commission in June – for a new directive on bank recovery and resolution.
The new rules aim to prevent repeats of the taxpayer assisted bank bailouts stemming from the 2008 financial meltdown, but there is a range of opinion over the extent to which bank creditors should share the burden when institutions collapse, and how much discretion should remain with national regulators.