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Neighbours take the gloves off

Steinbrück!! He's surrounding us!! Cartoon in the Berliner Zeitung, 20.3.09

German-Swiss relations have cooled in recent months over tax evasion and banking secrecy but there is nothing cool about the tone of the insults being traded.

swissinfo spoke to Berlin-based Swiss journalist Paola Carega to discover how the Germans are reacting to the latest flare-up, triggered by remarks made by German Finance Minister Peer Steinbrück about Switzerland's recent change of policy over sharing bank data.

Steinbrück likened the Swiss to Indians running scared at the mere threat of the US cavalry after the government – giving in to strong international pressure – announced two weeks ago that it was prepared to exchange information with foreign tax authorities in cases of suspected tax evasion.

The German ambassador to Bern was summoned to the foreign ministry to hear Switzerland's official reaction to what Foreign Minister Micheline Calmy-Rey described as Steinbrück's "contemptuous and aggressive" comments.

The Swiss public and politicians alike have been waxing indignant. One member of parliament even went so far as to say Steinbrück's style reminded him of the Nazis. Readers' letters in newspapers have sprung to the defence not only of the Swiss, but also of Native Americans.

Indeed, a Native American chief from Arizona told the German-language Sonntag newspaper that Steinbrück had "insulted" all the native peoples of America.

Steinbrück for his part told a German newspaper that he was getting hate mail from Switzerland, repeating the Nazi accusation. He described this as "completely unacceptable".

Swiss finance minister, Hans-Rudolph Merz, who also holds the rotating presidency, called for calm on Thursday, saying that problems cannot be solved by insults. Steinbrück said on Friday he was ready to meet Merz.

The 225,000 Germans who live in Switzerland - the fastest growing immigration group in the country – will probably be relieved. But as Carega told swissinfo, ordinary Germans, although they are aware of the issue, are not taking it as seriously as the Swiss are.

swissinfo: Has Switzerland's image suffered at all because of the tax evasion and banking-secrecy debate? Have you as a Swiss been taken to task?

Paola Carega: No, thankfully not. Switzerland still stands high in German affections and that's not something that's just going to disappear. Among journalist friends there's something of a consensus that understands Switzerland's position and how hard it is for it to ease its secrecy laws.

But what they can't really understand is why so little has been done so far and why Switzerland is dragging its feet. That hurts Switzerland's reputation. I've been asked about that. But there's no question of having to defend myself because I come from Switzerland.

swissinfo: In Switzerland, politicians, the media and public are outraged over Steinbrück's comments. Are people in Germany aware of this?

P.C.: Yes, indeed. On Friday there were some nice political cartoons in at least three newspapers showing Steinbrück and the Swiss.

That suggests people are aware of it, but they think it something to smile at, not to worry about. And I haven't seen anything about the comparison between Steinbrück and the Nazis.

swissinfo: So the media are aware of how the Swiss feel. But ordinary people, your German friends and acquaintances – do they know how hot under the collar the Swiss have got about it?

P.C.: No, either they don't know, or if they do, they are amazed. Steinbrück is well liked. He is one of the country's most popular politicians, so that's obviously one of the reasons why people didn't get too flustered over his abrasive comments about Switzerland.

For the opposition, though, this is a good chance to take shots at him because elections are coming up in autumn here.

swissinfo: And Steinbrück himself, who's a Social Democrat: is he in fact electioneering, or is tax evasion actually important to him?

P.C.: I think he's very serious about it. Tax evasion has been an issue for him for years. And he knows that this is just the right opportunity. On April 2 there's the G20 summit and he needs to strike while the iron is hot.

swissinfo: He has been criticised by other German politicians, like the economics minister. Is it only his "cowboy style" being criticised or is it more about the substance?

P.C.: I think it's only his style. I have spoken to Radical Party representatives and basically they agree with his policy. They too are saying very clearly that Switzerland should relax its banking secrecy and cooperate better with the German authorities.

swissinfo: Would you say the Germans are much more relaxed about the whole business than the Swiss?

P.C.: Definitely. The Germans haven't really focussed on this debate. Switzerland is a small neighbour, and there are more important issues for Germany at the moment.

swissinfo-interview: Jean-Michel Berthoud

Pressure on Switzerland

Switzerland has agreed to ease its bank secrecy laws after coming under pressure from a number of governments.

It has been accused – among others by Peer Steinbrück – of helping foreign nationals avoid tax in their own countries.

Switzerland was one of several countries that was threatened with blacklisting if it failed to agree to provide information in cases of suspected tax evasion.

Czech Prime Minister Mirek Topolanek (whose country holds the rotating EU presidency) said on Thursday that states which have agreed to apply international standards to their banking laws would not be blacklisted.

A meeting of the G20 group of the world's major economic powers is due to meet at the beginning of April, and will discuss the issue of tax havens.

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Germans and Swiss

At the end of August 2008 there were more than 1.6 million foreigners living in Switzerland, more than 21% of the population.

About 225,000, some 14% of them, were German nationals.

The Germans are the second largest group of foreigners after the Italians.

In recent years Switzerland has become the top choice for Germans who emigrate.

Many of the Germans living in Switzerland are highly qualified workers, managers or academics.

About 75,500 Swiss live in Germany.

Switzerland is Germany's ninth biggest trading partner, while Germany is Switzerland's largest trading partner.

Switzerland is the sixth biggest direct investor in Germany.

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