The government in Luxemburg has announced that it will begin conducting data exchanges with the other countries in the European Union (UE) concerning the accounts owned in its banks by European citizens, thus changing its policy on banking secrecy. Prime-minister Jean-Claude Juncker made the announcement on Wednesday night, during a speech on the state of the nation, the Wall Street Journal reports.
The decision represents a first step through which Luxemburg is distancing itself from the tradition of banking secrecy, which has helped it become one of the most important world financial centers.
According to the European Central Bank, (ECB), the assets of the banks in Luxemburg are 22 times bigger than the country's GDP.
The impact of the decision is still uncertain, because the new desecretization policy concerns interest payments for funds owned by EU individuals, not for the money held by investment funds or companies incorporated in Luxemburg. Also, the operations of foreign companies conducted through the financial center of Luxemburg will not be affected.
The Banking Association of Luxemburg estimates that over half of the customers that have deposits in the country come from the European Union.
Germany, France, Great Britain, Italy and Spain have agreed on Tuesday to develop a system for exchanging information which would make it easier to identify the persons or companies that are avoiding the payment of taxes by moving the money abroad. The five governments have announced the European Union that they hope the system will become a template for a similar initiative in the EU, then on a global level.
"We can, without suffering any major damages, introduce a system which would allow the automated exchange of information, starting with January 1st, 2015", Jean-Claude Juncker, said. "If this is a change in our position, it is not
