Swiss President Hans-Rudolf Merz says he has halted negotiations on a double taxation accord with Italy over Rome's raids on Swiss banks.
On October 27 Italian police stormed branches of Swiss banks as part of an Italian tax amnesty, which caused an outcry in Switzerland. Italy has said that it was an internal affair and not meant to be an unfriendly move towards the Swiss.
"The accord was ready for ratification from our side. But now the negotiations are being suspended until further notice," Merz, who also holds the finance portfolio, told the SonntagsBlick newspaper on Sunday.
The deal was meant to ease the sharing of relevant data for tax enforcement between the two countries. Switzerland has already signed 12 such accords and has now been removed from the Organisation for Economic Co-operation and Development's "grey list" of tax havens.
Rome has launched a tax amnesty to recover billions of euros it says are illegally held in foreign tax havens. It stepped up the pressure last Tuesday by ordering the raids on the Swiss banks.
Merz said this action had "criminalised" the Swiss legal system and what was happening was "clearly of discriminatory character".
"We do not accept being spied on by foreigners. We have show Rome that this is not acceptable," Merz said.
Negotiating a double taxation accord under these circumstances was out of the question, underlined the president, adding that he wanted to know what was going on first and was waiting for a reaction from the Italian finance minister.
Merz said he did not want to escalate the situation, but that potential measures were being prepared, without giving further details. When the tax deal talks will be resumed remains open.
swissinfo.ch and agencies