Towards A Good Samaritan World

Thursday, November 18, 2004

WHILE I'M ON THE SUBJECT

The Swiss have just signed an agreement for passport-free movement with Europe. But the catch is that they have to surrender information about Europeans' holdings in Swiss bank accounts, thus undermining their status as a tax haven. What's disturbing here is the means the EU used to get their way:

And so the EU decided to tighten the screws on the land-locked Helvetian Republic. In March 2004, Germany imposed stringent checks on her border with Switzerland, effectively bringing traffic between the two countries to a halt. That was a departure from the casual way in which the Germans treated Swiss traffic in the past. The German border authorities claimed ignorance, but the Swiss knew the real reasons behind the border blockade. As Jacques Strahm, who headed border authorities in the French-speaking cantons, opined, "I think it's a way of applying pressure on Switzerland.... It could be linked to bilateral treaties." German Socialist Finance Minister Hans Eichel, who recently made the news by attempting to bully the new members of the EU into raising their corporate taxes, confirmed the political nature of the measure. According to Eichel, "I assume that no country in Europe wants to make its living in part by making itself into a hideout for tax-evaders from other countries.... I assume this is also [true] of Switzerland."

As a consequence, Switzerland has been forced to allow the governments of the EU member states access to information about EU citizens' Swiss bank account deposits. Under the euphemism of "information sharing," Swiss banks will be required to inform on the amount of money the EU citizens hold in Swiss bank accounts, or else will have to assess a 35 percent tax on the EU citizens' savings, 75 percent of which will be repatriated to the appropriate EU governments. In exchange, German police will no longer harass Swiss traders and travellers-at least for now.

It's interesting that while conquest is no longer tolerated, the EU has pioneered a new form of expansionism. Peaceful expansion, yes, even democratic, and after the fall of communism the eastern European countries welcomed the opportunity for EU membership, to make a clean break with the communist legacy. In EU expansion into eastern Europe there was an element of altruism, considering that the wealthy countries of western Europe provide "structural aid" to poorer newcomers, and suffer from competition with their low-wage, low-tax environments. Mostly it's a good thing, then, (like Iraq) but there's something colonial, too, about forcing the eastern European nations to adopt thousands of pages of EU law. (Actually, colonialism often had an element of altruism, and of consent.) And now this bullying of Switzerland. What will the EU model develop into?

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