Nor is it surprising to see, as the leaders of these countries put it in a letter to Commissioner Algirdas emeta yesterday, that they envisage the agreement as “a template as to the wider multilateral agreement we hope to see in due course”.
Tax evasion/tax avoidance, clearly, is the topic here.
While not surprising, perhaps, this new "EU FATCA" agreement raises a few questions – as well as a lot of reasons for concern – among European intermediaries and their clients.
Who, for example, will pay the cost of the extravagant additional administrative burden that will be placed on the financial services industry? The public? At a time where our economy is in such a bad state?
And what is likely to be the ultimate cost of this agreement for Europe’s economy, as wealth pours out of Europe and into the banks and depositaries of such jurisdictions as Singapore, Hong Kong, Dubai or Montevideo, if they choose not to sign up to this latest tax information exchange agreement?
Then there’s the generally poor standard of public affairs management typical of most European governments. Assuming €1trn in unpaid tax actually were to be collected, what would become of it? Would it pay down Europe’s debt, or merely be wasted in EU bureaucracy, and/or some inefficient state-controlled projects?
Generally speaking, the people of Europe have little or no trust, nor confidence, in the capability of their government leaders to run their countries, due to the high levels of political corruption of the so-called political elite widely believed to exist. So another question would be: what would be the political cost of an additional intrusion in the private life of European citizens?
Finally, once this “EU FATCA” were in place, would there be any semblance of privacy and data protection left in Europe?
Here at FECIF, we are deeply concerned that the plan unveiled by the EU G5 countries yesterday will push foreign money, and the very rich, to an unprecedented withdrawal of wealth from Europe – for the sole benefit of Singapore, Hong Kong, Dubai and other more friendly places.
This would be a very severe blow for the European economy, and at a time when it can scarcely afford it.
Vincent Derudder is chairman of the Fédération Européenne des Conseils et Intermédiaires Financiers, a Brussels-based association which represents some 300,000 European financial intermediaries through their national associations.
