Associated Press has reported:
Heads of government and finance ministers from Europe's largest economies joined German Chancellor Angela Merkel in Berlin to lay the groundwork for a common European position on economic reforms before an April 2 summit of the Group of 20 nations in London.
It said:
Other key points agreed to [on] Sunday included adopting a "sanctions mechanism" to penalize tax havens and urging banks to keep larger reserves of capital.
"A new system of regulation without sanctions would not have any meaning," said Sarkozy.
He said European countries should jointly draw up a list of tax havens, as well as sanctions they might face for continuing reckless financial activity.
As Forbes has noted - getting Obama to deliver his part is now key.
But have no doubt that this means we're rolling. Not fast enough yet. But we're rolling. As the EU Observer notes, I'm not alone in thinking this:
Nicolas Sarkozy, the president of France, said that European leaders were agreed in wanting to see an overhaul of the system. It was important that there were sanctions, he said. Recalling that at the previous G20 summit in Washington in November it had been hard to get any mention of tax havens, he applauded the EU's agreement on a crackdown and on the need for greater regulation of hedge funds and of rewards in the banking sector.
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It seems so hypocritical to me.
The two largest frauds in a long time have been conducted from within non-haven jurisdictions. Some of the offshore jurisdictions are so well regulated these days that the non-havens look sloppy.
Unless we achieve tax harmonisation across the board, there will always be tax competition and therefore there will always be a “tax haven”. If you get rid of the small offshore centres all together, the current non-havens will be in competition with each other and some will become havens themselves.
I totally agree that a crackdown on the poorly regulated secretive jurisdictions is a worthwhile project. But there is a very strong argument that the already transparent well regulated tax efficient jurisdictions are good for business generally and good for attracting strong foreign investment into non-haven jurisdictions. I just hope the politicians look at this issue from all angles and not simply rush through restrictive legislation on the back of potentially misinformed public opinion that all tax havens are good for is theft and creating instability.
But what else are they good for? In all the talk about this no-one has said what they are good for apart from the two things you mention, GB.
The tax side with these havens is that economic activity is apparently located there, but as everyone knows, nothing much is really going on in these places apart from moving bits of paper around. The actual economic activity is going on in the real countries where people are living, working making things and buying them.
The key thing is to locate the tax liability where the real economic activity takes place. then the tax competition will merely be a small part of the broader real economic competition.
You hit the nail on the head GB well done. 😎