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Luxembourg, Austria Maintain Opposition to Savings Tax

Dec. 20 (Bloomberg) -- Luxembourg and Austria maintained their opposition to an extended savings-tax deal, one of the European Union’s proposed tools to speed up its fight against tax evasion.

Luxembourg Prime Minister Xavier Bettel, attending his first EU summit, said European leaders today gave in to the demands by his government and that of Austrian Chancellor Werner Faymann that a deal can only happen after the European Commission reports on talks with countries outside the 28-nation bloc, including Switzerland, Liechtenstein, Andorra, San Marino and Monaco.

“Negotiations haven’t even started yet,” Bettel told reporters after a two-day summit in Brussels. “We don’t want to block this by playing cat-and-mouse. What we want is that the negotiations with these five countries start and that we are being informed in March that they go in this direction.”

Bettel said Luxembourg and Austria managed to maintain the original accord, that the negotiations with the five countries have to happen, that the commission will submit a report and “once that report has been discussed with us in March, Austria and Luxembourg will go in the agreed direction.” He said the EU leaders will hold their next meeting in March.

Negotiations with Switzerland and the other four nations “should not be about going for a cup of coffee,” Bettel said. “The goal is that these five countries go in this direction.”

Proposed Agreement

The proposed agreement aims to set standards for how countries can collect information on income that their residents earn from savings held in other nations. The updated accord plans to close loopholes in the previous pact by including savings income from trusts, foundations, funds and other financial products. It will also require all EU nations to take part in information exchanges after a transition period.

Austria is most concerned about Switzerland and Liechtenstein, Faymann said before the second day of the summit.

“It’s justified to say that we want it for the five,” said Faymann. “But it can’t lead to a blockade with nothing coming out of it.”

Faymann said he has confidence in Michael Spindelegger, his new finance minister, to negotiate a deal.

To contact the reporter on this story: Stephanie Bodoni in Brussels at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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