Let’s Be France
Facing political scandals, a stagnant economy, and angry public reaction to investigative reports of offshore accounts, the President of France, Francois Hollande has created a position of a special prosecutor to focus on tax fraud and corruption and to get rid of tax havens. Among those tax havens is Luxembourg and it has succumbed to pressures from other European allies that made them supply information about foreign clients to their home governments. While Luxembourg has a population of only half a million people, it has a banking sector more than twenty times the size of its GDP.
This announcement from Luxembourg came after five of the biggest European countries: Britain, France, Germany, Italy and Spain agreed to exchange banking and create a tax information exchange system, modeled on the Foreign Account Tax Compliance Act, which was passed in 2010 to track assets of Americans who might be trying to avoid taxes. The European government said that this information exchange is an effort to deter tax evaders and serve as a future mold or template for future multinational agreements.
Written by Kevin Zhang
Jolly, Steven Erlanger And David. “Hollande Creates a French Prosecutor for Fraud and Vows to End Tax Havens.” The New York Times. The New York Times, 10 Apr. 2013. Web. 10 Apr. 2013. <http://www.nytimes.com/2013/04/11/business/global/european-countries-move-to-toughen-stance-on-tax-evasion.html>.