Friday, 13 March 2009

Attac and Tax Haven Protestors Target Banks in Austria and Luxembourg

With the G20 summit nearly upon us, in Austria and Luxembourg, tax protestors took to the streets with banners and targeted the banks, and bank staff were advised to use public entrances.

While not on the OECD blacklist, EU members Austria and Luxembourg do not share information on savings account holders from other European countries with their tax authorities. But while Belgium is prepared to lift its banking secrecy rules, Luxembourg and Austria remain determined to keep theirs despite growing international pressure. "Banking secrecy is not the same thing as a tax haven," Luxembourg Prime Minister Jean-Claude Juncker told journalists in Prague. "Unilaterally lifting banking secrecy will not contribute to transparency, but will only divert financial flows and prejudice the Austrian economy," said Austrian finance ministry spokesman Harald Waiglein said in Vienna.

Well, the first paragraph is a fiction concocted by me, the rest is from genuine news stories. There has been a dearth of protests in Austria or Luxembourg, which might even lead some people like me to harbour suspicions that the recent protests have been against "soft targets", and there is an element of hypocrisy involved.

Is it any wonder Swiss banking expert Professor Teodoro Cocca believes that European leaders have moved the battleground to the G20 to neatly sidestep dissenters from within the European Union, such as Austria and Luxembourg?

Attac itself realises that the lack of pressure here is setting a bad example:

The "Savings Directive" of the EU has to be extended to all capital incomes (at present only interest payments), to legal persons (at present only natural persons) and the automatic exchange of information mechanism to Austria, Belgium and Luxembourg (at present 24 countries). The closure of these loopholes is a condition to exercise credible pressure on other tax heavens like Switzerland or Liechtenstein to give up their bank secrecy and cooperate in an international information exchange.

But have there been any protests? None that I can find, despite the fact that Attac Austria was founded over six years ago.

Over in Jersey, the protestors decided to go to work on Comic Relief's Red Nose day, bringing a halt to the local bank employees (especially counter staff) at the St Helier branch of Lloyds TSB  who work to raise money for Comic Relief.
And in a greater act of ineptitude, the UK main office of Christian Aid cheerfully didn't liaise with the local branch before attending and giving a presentation against Jersey as a tax haven; apparently Andy Thewlis, the local branch officer, has had his phone red hot with people ringing up. Losing local support is really going to benefit third world countries, isn't it?

I think that Attac's case may well have a good deal of merit, although as a mathematician, I am annoyed at the way that "invisible figures" are conjured up out of a statistical void on "missing millions". It is what statisticians call "dark figures", and that kind of methodologically suspect knowledge is one of my pet hates. A real figure is Sir Fred Goodwin's pension per annum. How much toxic debt the banks still have is a "dark figure", because until properly audited,   no one knows; it is largely guesswork, which is why the stock exchanges are in turmoil. The "missing millions" in banks in offshore - which for these purposes includes Delaware - take note President Obama, Austria and Luxembourg, as well as Jersey and other jurisdictions, is unknown. Some may be legitimate money, other may not be, and how much of it is taxable we can only guess.

Methods of estimating often have a way of reflecting the assumptions of the estimator, as the "dark figures" on crime show. As one commentator notes:

the dark figures of crime unknown to the police is variously estimated. To base criminological theory, or social policy for that matter, on the majority of official figures is an exercise in "guesstimates", and tealeaf gazing. Meanwhile, various groups with special pleadings regularly, and understandably, parade their 'statistics' to show that their section of the community needs resources or their agency has had such and such a success rate

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