Bern, Luxembourg, Vienna and Ouagadougou German Finance Minister Groups EU States with African Country

Unloved in much of Europe for his outspoken views on stimulus and tax havens, Germany's finance minister strikes again. In response to criticism of the OECD's gray list of countries that are tax havens, Peer Steinbrück has compared Switzerland, Austria and Liechtenstein to the poor African country of Burkina Faso.

German Finance Minister Peer Steinbrück has made few friends in a handful of European countries in recent months with his aggressive campaign  to stamp out tax havens -- both here and abroad. On Tuesday, he set the tone a notch shriller, comparing Switzerland, Luxembourg and Austria with the developing African nation Burkina Faso, where per capita annual income is just $430.

In remarks made at the European Union finance ministers' meeting in Brussels, he defended a decision by the G-20 and the Organization for Economic Cooperation and Development to include Luxembourg, Austria and Belgium on a "gray" list of countries that have been uncooperative with foreign tax authorties and are tax havens worthy of repudiation. Last autumn, the OECD created a black list for the worst offenders and a gray list for the eight countries that, in the international organization's opinion, do not do enough to combat tax evasion by foreigners who take advantage of their bank secrecy laws.

During a meeting with journalists, Steinbrück criticized Switzerland, Liechtenstein, Austria and Luxembourg for their failure to attend an international conference on tax havens in Paris last September. "They could have attended," he said. "I make no bones about the fact that I think this list, which is incomplete and might contain errors, is right," Steinbrück said, adding that he would invite "Luxembourg, Liechtenstein, Switzerland, Austria and Ouagadougou," the capital of Burkina Faso, to a follow-up meeting in Berlin in June.

With his comments, Steinbrück directly challenged the chairman of the group of EU finance ministers, Luxembourg Prime Minister Jean-Claude Juncker. On Monday, Juncker once again criticized the gray list. He said it violated an EU decision in March "that no European country would be included on the list." He accused the largest European economic powers -- Germany, France, Britain and Italy -- of forcing the issue through at the G-20 summit in London.

But Steinbrück refused to apologize to the Luxembourg leader. "We have nothing to apologize for," he said, noting that the German treasury was losing a lot of money through tax evasion and that "honest taxpayers in Germany are left looking stupid."

"Feelings Luxembourgers Would Prefer to Forget"

Steinbrück even seems to have exhausted the patience of his allies. Luxembourg Foreign Minister Jean Asselborn, a personal friend and party colleague of Steinbrück, told SPIEGEL ONLINE on Wednesday that Steinbrück's rhetoric had descended to the level of bar room banter and that his statements smack of "a rarely exceeded level of arrogance."

"No Socialist, no supporter and no voter of our party appreciates, let alone accepts, these belittling comments," said Asselborn. "Every Luxembourger remembers with horror a time in which Germany, initially through word and speech, poured humiliation and fear into their lives. The slightest hint of arrogance coming from a German high official rekindles the kind of feelings that Luxembourgers would prefer to forget."

Steinbrück's comments come on the heels of a diplomatic brouhaha in March, in which Steinbrück compared the Swiss to Wild-West  "Indians" cowering under the influence of the financial industry's cavalry. That in turn had led a Swiss member of parliament to describe Steinbrück as a "Nazi henchman," which sparked outrage in Germany. Swiss tabloids also depicted the finance minister as an "ugly German."

Last October, Steinbrück called for Switzerland to be included on the OECD's blacklist of tax havens, saying that the country's banking industry helped Germans avoid paying taxes. So far, though, the OECD has yet to place a single country on the black list  -- and only 12 countries are on its gray list.

svs -- with wire reports
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