Luxembourg to relax bank secrecy from 2015

Luxembourg has announced it would ease the secrecy surrounding its banks by implementing rules on the automatic exchange of bank account information with its European Union partners from 2015.

PM Jean-Claude Juncker said Luxembourg would introduce the reforms in two years, in line with the EU Savings Directive.

The rules of the Directive are aimed at creating greater transparency and minimizing tax evasion.

Calls for a crackdown on bank secrecy have been increasing, as governments seek to raise more taxes to support their finances.

“We can introduce [the rules] without any danger from January 2015,” Jean-Claude Juncker said.

Luxembourg is a country of only 500,000 people, but its banks and other financial institutions have assets worth more than 20 times the country’s economic output.

Luxembourg’s foreign minister, Luc Frieden, said at the weekend that he wanted to “strengthen co-operation with foreign tax authorities”.

Last week, Germany signed a tax evasion treaty with Switzerland – another European banking centre known for its secrecy.

The treaty is designed to give the German tax authorities the ability to claw back taxes from their citizens who may be hiding money in Swiss banks.

Luxembourg’s announcement leaves Austria as the only European Union country not signed up to the EU Savings Directive.

Austria’s finance minister, Maria Fekter, said recently that she would “fight like a lion” to defend the country’s banking secrecy regime.

However, Austrian Chancellor Werner Faymann indicated on Tuesday that change may have to come.