Switzerland's media have expressed dismay at Italian raids on branches of Swiss banks but said they are proof the country remains under extreme pressure on taxes.
Some 100 financial police agents on Tuesday targeted 76 offices including Italian branches of Swiss banks, Italian banks with Swiss links and San Marino-linked banks.
"Yesterday the tone between the 'Boot' and the confederation reached a new low that was hard to imagine just a few months ago," Fribourg's La Liberté newspaper wrote on Wednesday.
"We thought we had seen everything in Italian assaults on the Swiss financial centre. Wrong."
Italy is in the midst of its third tax amnesty in nine years and Italian Finance Minister Giulio Tremonti has talked of "bleeding Lugano's banking sector dry". Lugano, Switzerland's largest Italian-speaking city, is a hub for cross-border banking.
In an editorial, Zurich's Tages-Anzeiger accused Italy's banks of encouraging Tremonti to take "sweet revenge". They are "peeved" that they receive only a small amount of legal assets, the newspaper said.
According to the Tages-Anzeiger, Italy's financial institutions are keeping quiet about how the nation's wealthy, who do not trust their own banks, prefer to deposit their money in Switzerland or elsewhere abroad.
Olive branch or iron fist?
For two parliamentarians from the southern canton Ticino, the raids were nothing short of war-mongering.
"While Switzerland offered Italy an olive branch, Italy has carried out new aggressive tactics that are hard to understand," Giovanni Merlini, the head of the cantonal branch of the centre-right Radicals, told La Liberté.
"It is a genuine war," Fulvio Pelli, the party's leader, told the newspaper.
Authorities in Ticino previously wrote to the federal government saying they were "very worried" about the impact of the crackdown.
The French-language Le Temps described the raids as a "dramatic gesture" to follow its more "discreet" action to counter tax evasion, such as the use of border cameras. Italy says Switzerland encourages its citizens to evade taxes. The Swiss in turn have called the surveillance "spying".
But Bern was in no position to argue with Italy's actions, Le Temps argued. "The Italian government was within its rights to launch a tax amnesty and it alone is capable of deciding which methods to use to uncover [offenders]."
"The problem with Italy is that it seems to have teetered into hostility towards Switzerland that is irrational and unparalleled. That is demonstrated by bilateral relations that are harsher than ever, but also in Brussels where Rome is engaged in one-upmanship against Switzerland in the dispute we are facing in the European Union over business taxes."
Around the time Italian police were raiding the banks, Italians flipping through the business newspaper Il Sole 24 Ore would have come across an interview with Swiss President Hans-Rudolf Merz.
Merz told the broadsheet Switzerland wanted dialogue with Italy over tax.
A Swiss finance ministry spokesman added they had "nothing to say" about the raids, as the banks operate in Italy and are under Italian supervision.
The Blick tabloid said "what started as sabre-rattling and has come to raids on Swiss banks is proof that Switzerland remains under extreme pressure on the tax front".
"Let's be honest," Blick added. "The Italians are right. Switzerland should sympathise with Italy's decision to track down tax evaders – even if it is damaging to Ticino."
The Neue Zürcher Zeitung commented that the latest tax evasion affair shows that Switzerland's euphoria was premature when it was taken off the grey list of tax havens drafted by the Organization for Economic Co-operation and Development.
The paper said it is time for Switzerland to reform its financial sector so the country is no longer reliant on a few large institutions.
"It is unpleasant to come to the conclusion," the NZZ said, "that this could have a negative economic impact. If Switzerland's affluence is to be maintained, there must be a change of focus to new areas of economic activity. What's needed is more creativity. There's not much time left."
Jessica Dacey and Dale Bechtel, swissinfo.ch
Italian tax amnesty
Italy's parliament voted for a third tax amnesty in nine years on October 2. It will run until December 15.
Tax dodgers who come forward anonymously will receive the relatively light one-off tax rate of 5%.
Italians with accounts within the European Union, along with other countries such as the US, Japan, Mexico and Australia, can keep their funds at those banks. But clients of Swiss banks have been told they must return their assets to Italy.
Amnesties in 2001 and 2003 raised an estimated €2.1 billion for the national coffers.
This time, Italy hopes to raise some €5 billion in revenues and repatriate many more billions of undeclared assets.
The United States and Britain are among other countries that are operating, or have recently staged, tax amnesties.