Swiss “Rubik” secrecy deal – let’s make sure those nails stay in that coffin

Image credit: Davidd, via Flickr. Creative Commons

A nice article from the UK’s Independent newspaper:

“On Tuesday I had breakfast with a top team from the Swiss Bankers Association, who talked about what had happened since the signing of an agreement with Britain
. . .

This was the deal the [UK] Chancellor [George Osborne] had said a few months earlier would bring in between £4bn and £7bn of hitherto unpaid taxes.
. . .
the eventual outcome could possibly be as low as £700m. Such a figure would be a mere 10 per cent of the maximum sum that Mr Osborne had confidently told us could be out there.”

Now our detailed analysis we conducted back in October 2011 predicted that the deal would raise

“an absolute maximum of £800 million – £1 billion.”

Right on the money, then. We did send our analysis to The Independent at the time – not to mention the UK tax authorities, several private tax advisers, the Swiss tax authorities, the Swiss Bankers’ association, and several others – but none of them, bar a few honourable exceptions, paid any attention. All aboard the gravy train!

This isn’t the first time we’ve pointed to the failure of the Rubik deal. But there’s one more thing to say. As we’ve noted before, this deal was designed by Swiss bankers as a mechanism for sabotaging an emerging European transparency project.

Their great hope had always been to get Germany to bite hard on this baited hook – and in fact Germany’s government did, for a while, try to sign up until pressure from saner voices inside the governing coalition killed it. There had been some hopes in Switzerland that the new coalition government in Germany, with its Swiss-schmoozing Finance Minister Wolfgang Schäuble, would be able to resuscitate it, zombie-like, from its current quiescent state. If this were to happen, European transparency efforts would be effectively dead, politically speaking.

But we are heartened by recent news, including this new analysis by Bloomberg entitled Swiss Tax Deal Seen Buried After Prominent German Cases Revealed:

“Antje Tillmann, the finance-policy spokeswoman for Merkel’s Christian Democratic-led bloc. . . . acknowledged that the outlook for an accord with Switzerland was as good as dead, saying in an interview that she sees “no chance to breathe new life into the tax-exchange deal with Switzerland in this coalition.”

The zombie is firmly closed up in its coffin. That’s excellent news for ordinary taxpayers in Europe and elsewhere (as the European project is just part of an interlocking emerging international architecture.) Let’s make sure that those nails stay firmly in place.