France Exaggerating Austrian Bank Secrecy: Raiffeisen CEO
The CEO of one of Austria's largest banks has hit back at France's budget minister who called for the country to be less opaque and reveal names of account holders.
Responding to a warning by the French budget minister that Austria risks being blacklisted, Herbert Stepic, CEO of Austria's Raiffeisen Bank, said that the threat was overstated.
"I would say he shouldn't exaggerate," he told CNBC Thursday. "I would say the present rules and regulations allow a very close cooperation between foreign tax institutions or whatever...so I think this is a slight exaggeration."
Bernard Cazeneuve, France's budget minister, whose predecessor was forced out last month in a scandal over a secret Swiss bank account, warned Austria on Thursday that it risked being blacklisted for financial transactions if it did not agree to reveal names of EU citizens that had accounts in its banks.
(Read More: Ranch House Near Reno is a Thriving Tax Haven)
"It's not normal that a country like Austria for example doesn't communicate the information it has concerning EU citizens who hold accounts there," Cazeneuve said.
"If these countries don't cooperate, if there isn't an agreement for an information exchange that allows for total transparency at the heart of the European Union, these countries expose themselves to the risk of appearing on the list of non-cooperating states and territories," he told France-Info radio.
The topic is believed to feature high on the agenda for Friday's meeting of the 27 finance minsters of the European Union, being held in Dublin. A pilot project is being pursued by the bloc's five largest economies to deepen cooperation on tackling tax evasion during the two days of talks.
Last month's $13-billion EU and IMF bailout of Cyprus, raised questions over the way the island's crippled banks had ballooned with money from Russia and elsewhere. It has also given new prominence to efforts within the EU and between Europe and the United States to make it harder for citizens to avoid paying taxes by using secret accounts in other countries.
Luxembourg the only other EU country that had refused to swap personal data on savers in its banks, said on Wednesday it would so by 2015, heaping pressure on Vienna to follow suit.
Austria's Finance Minister Maria Fekter told Die Presse newspaper that she could discuss such a change of tack - but insisted it could not be a "one-way street" and accused London and Washington of failing to close international tax loopholes in places like the U.S. state of Delaware and Britain's Channel Islands.
(Read More: America's Top Tax Havens)
"People have nothing against putting in rules and regulation and controlling mechanisms to avoid tax avoidance or any sort of murky business. The fear of the great part of the citizens… is to be a too transparent individual and I have some sympathy for that," Raiffeisen CEO Stepic told CNBC, adding that bank privacy was a "holy cow" for Austrians.
Austria's Chancellor Werner Faymann, a Social Democrat, said this week that the country was ready to negotiate with Brussels as long as bank secrecy remained intact for Austrian citizens. But his conservative junior coalition partners have taken a harder line.
(Read More: France Faces 'Devastating Scandal' as Economy Stalls)
The European Commission warned Austria on Monday that its banking secrecy would put it in a "lonely and unsustainable position" if it did not adopt the same rules as other countries in sharing data on foreign depositors.
The United States is also after citizens that stash wealth abroad, and is set to start talks with Austria soon. EU officials have threatened to sue Austria if it gives the United States information about its citizens' bank accounts but refuses to do the same for other EU members.
Austria now withholds tax on EU citizens' interest income and sends the money anonymously to their home countries. Austrian bankers have played down the potential impact of sharing information on foreign depositors.
Reuters contributed reporting to this story.