Italy and Swiss ministers clash over failure to reach tax accord

(Reuters) – Italian and Swiss ministers clashed on Monday over the failure to reach an agreement aimed at fighting tax evasion that foresees Switzerland opening up its bank databases to Italian tax authorities.

Both Italian Economy Minister Pier Carlo Padoan and Swiss Finance Minister Eveline Widmer-Schlumpf said they spoke on the sidelines of the International Monetary Fund meeting in Washington this week, but they disagreed about what was said.

“I told Padoan that my patience has a limit, and I reminded him of the number of finance ministers with whom I had to restart negotiations afresh, answering the same questions,” Widmer-Schlumpf said in comments broadcast by Swiss radio RSI.

Padoan hit back in an official statement later in the day, saying he was “astonished” by her comments, which “do not reflect the content of the very brief exchange of views we had on the margins of the IMF meeting in Washington.”

The two ministers are at a loggerheads over negotiations that began in 2012, making Padoan the third economy minister to carry on the talks. Switzerland has already struck deals to tax assets of British and Austrian nationals, and is seeking to add Italy to the list.

Italy has long suffered rampant tax evasion, with money often carried across its northern border to Switzerland to be deposited in Swiss banks. The economy ministry estimates tax evasion costs the country around 91 billion euros a year.

Successive governments have pledged crackdowns with the aim of reducing the fiscal burden on ordinary Italians and relieving the strain on public finances – with debts of about 2 trillion euros – amid chronically sluggish growth.

Widmer-Schlumpf said on Monday that she has set a deadline of next spring to finish negotiations because “a solution must be found”.

Padoan responded that Italy’s position has always been coherent but that he had “found the position of the Swiss delegation to have wavered over the past few months, and every step forward came with a few steps back”.

Padoan said that there was “strong dissatisfaction” on Italy’s part for failing to find an accord, inviting Widmer-Schlumpf to write down “in black and white” the Swiss position on the still-unresolved questions “so we can finally close this negotiation”.