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Papers say data theft highlights Swiss weakness

Is Hans-Rudolf Merz ready to make more concessions?


The government’s conciliatory tone toward Germany’s plan to use stolen Swiss bank data to find tax cheats shows just how problematic Swiss banking has become, newspapers say.

Commentators wrote that Finance Minister Hans-Rudolf Merz and the Swiss cabinet have little room to negotiate with the country’s largest single trading partner.

German Chancellor Angela Merkel said earlier this week that Germany would do what it could to fight tax evasion. An unknown informant has offered to sell data on some 1,500 bank clients with money in Swiss accounts for €2.5 million (SFr 3.7 million). Investigators estimate the information could net €100 million in undeclared tax money.

From a law-abiding point of view it is “shocking” that the German government wants to buy the stolen goods, writes commentator Patrick Feuz in Bern’s Der Bund newspaper.

But “Switzerland is in no position to be outraged”, he continues. “For many the decades-long business of Swiss banking has been indignant”.

The rightwing Swiss People’s Party disagreed in a 20 Minuten report and put its disgust at the cabinet’s willingness to continue tax treaty talks with Germany more bluntly: “The government has no balls.”

U turns

Other newspapers pointed to the U-turn that the Swiss government, particularly Finance Minister Hans-Ruldolf Merz, has taken.

When French authorities said they planned to use stolen data in a similar manner, the Swiss government set out to suspend negotiations on double taxation accords. Now Merz has “abandoned his fighting words” with Germany, the Blick newspaper wrote. “This time it’s all friendly.”

“Merz recently said banking secrecy was not up for negotiation,” the paper continued. “Then yesterday he said, ‘We have no interest in foreign tax-evader money'. A 180-degree turn.”

Switzerland is paying the price for shortsightedness, wrote the Bund. Those on the centre right allowed financial centres to exhaust banking secrecy as a “competitive advantage” up until the last minute. Only the left has dared to say that such a model has a shelf life, it said.

Of course the Swiss government over the past year has eased banking secrecy laws while under foreign pressure but, the paper argued, “Finance Minister Merz is naïve if he now believes that the framework of a new accord will solve the problem of existing black money accounts.”

Plan B

“So what’s next?” asked the Blick.

The Geneva-based Le Temps said the only thing to do now is to say “loud and clear” that the time of stashing away grey money is over.

“It’s not about giving up without negotiating but about leaving the holdout where too many bankers and elite are still walled up,” the paper said.

It added that the Swiss have a “historical responsibility” to find a solution for taxpayers who used Swiss institutions to protect their capital from practices that would confiscate their money.

Many papers said it is high time that the Swiss purge once and for all the “accumulation of dangerous waste” that has built up in their vaults over the year.

The European Union is demanding an automatic exchange of banking information, which the Swiss are understandably worried about, Blick wrote.

“But if Switzerland doesn’t want to be steamrollered, the cabinet ministers and bankers must this time come up with an emergency plan B,” Der Bund answered.

Whatever that plan B may be, other countries are already lining up to get their hands on the data, too. Austria has expressed its interest.

In the meantime, Le Temps says Hans-Rudolf Merz has “condemned” the use of the stolen data but that no one is really worried about that.

“He wants to calm things down but it’s been a long time, too long, since he lost his authority to negotiate—and he’s taken Switzerland along with him.”

Tim Neville,

More comments

St Galler Tagblatt: The government has made a thoughtful, intelligent decision. It would be tempting for ministers to collect populist points by revolting William Tell style. This would have probably accomplished little. After all, those who threaten must be able to bluff credibly or be prepared to follow through. Switzerland mustn’t get into power games with Germany.

Blick: Switzerland has landed on the floor of reality. Only by going on the offensive can Switzerland get out of this mess.

Le Temps: We’ve given up on the distinction between tax evasion and fraud but the past is back again and we are afraid that daylight will shine on the practice of actively assisting others evade their taxes.

Der Bund: Of course the data theft is condemned but negotiations over a new tax agreement are not suspended and relationships with the most important trading partner should not be burdened.

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