21 February, 2008

Liechtenstein isolated!

According to the FT, Chancellor Merkel of Germany has threatened Liechtenstein with isolation in Europe unless it changes its banking secrecy laws. German prosecutors suspect 1,000 people of using special trusts in Liechtenstein to hide hundreds of millions of euros from tax authorities. Merkel said Liechtenstein must act fast: “The clock is ticking.”

Prince Alois of Liechtenstein accused Germany of acting in the affair like an “overpowering state”.

So: Germany wants high public expenditure and high taxes which some of its citizens try to evade. This is entirely a German problem and yet Merkel tries to blame it on tiny Liechtenstein, saying that despite the fact that it is not part of Germany and not even in the EU, it should not have the right to set a taxation system which does not please Germany.

I wonder if Mrs Merkel is so insensitive as not to realise this behaviour might bring back memories for some people. The whole affair is an utter disgrace and I hope the brave Prince Alois will give her a properly Saxon response.

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