German Chancellor attacks Liechtenstein banking secrecy
25-Feb-2008German Chancellor Angela Merkel attacked Liechtenstein's traditional banking secrecy and demanded an information sharing accord similar to that in place with the US under the Qualified Intermediaries scheme.
Her comments followed talks with Liechtenstein's Prime Minister Otmar Hasler in Berlin on 20 February.
"What is possible with the US should be possible with the European Union," Merkel told reporters.
The Chancellor also insisted Liechtenstein sign up to EU protocols on money-laundering and "waste no time" in heeding calls from the OECD for greater banking transparency and a clear commitment on fighting fraud.
Hasler said "an agreement on fighting fraud" that his country is negotiating with the EU "goes in the direction" of German demands.
Prior to the meeting, Liechtenstein pledged to tighten tax laws but denied the step was linked to the unfolding scandal in which investigators are targeting some 1,000 Germans suspected of hiding assets in its banks.
The German government admitted that it had paid an informant €4.2 million for a CD containing Liechtenstein bank data on over 1,000 tax evasion suspects. It also said that the BND, Germany's intelligence service, had been involved.
The information obtained led to a full-scale investigation into tax evasion which is expected to reap several hundred million euros, said a Finance Ministry spokesman.
The investigation provoked a strong reaction from the Liechtenstein royal family, which owns LGT Bank - the bank identified as the source of the informant.
Liechtenstein state prosecutor Robert Wallner said the man was a former employee at LGT, who worked at the bank between April 2001 and November 2001, and "abused his position of trust to compile information about clients".
At a press conference aired on German television, acting head of state Crown Prince Alois accused Germany of using "draconian methods that defy the rule of law" and failing to respect his country's sovereignty.
"Germany has clearly failed to understand how one behaves towards a friendly state," he said. "We are a small country and we want good relations with our neighbours but we are also a sovereign state."
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