Italy's foreign minister said on Thursday it would be counter-productive for Switzerland to retaliate after Italian police raided local branches of Swiss banks, amid an escalating tax row between the two neighbours. Switzerland on Wednesday summoned the Italian ambassador to demand an explanation of the checks by hundreds of police and tax inspectors on 76 bank branches in north Italy and around the tiny enclave of San Marino.
Italy said the operation was aimed at ensuring all relevant data was being provided to tax authorities to assist a crackdown on widespread tax evasion. "I don't think the path of measure and counter-measure is the correct one," Italian Foreign Minister Franco Frattini told journalists in Brussels, where he was attending an EU summit. "Counter-measures certainly do not help."
Relations between the two countries have soured since Italy unveiled plans for a generous tax amnesty aimed at recovering billions of euros illicitly stashed by Italians in Switzerland and other foreign tax havens. Italy's conservative government published a list this month of 36 countries - deemed to be co-operating with tax authorities by providing information - where funds can be declared and a one-off penalty paid without having to repatriate them.
Switzerland, concerned the generous amnesty could drain large sums from its banks as they seek to emerge from the credit crunch, was not included in the list. Italy's tax authorities estimate Italians have 125 billion euros in Switzerland. Swiss bank UBS confirmed its offices in Italy were visited by tax police on Wednesday. Credit Suisse declined to comment. The global financial crisis has prompted governments world-wide to crackdown on tax havens or declare amnesties in their efforts to uncover extra funds for flagging budgets.
The raids were carried out on the day Switzerland's president and finance minister, Hans Rudolf Merz, said his country was ready to cooperate with Italy on tax matters. Switzerland came to an agreement with US authorities earlier this year in a dispute over taxation which pierced its banking secrecy.
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