Switzerland has come under intense scutiny so far this week, with EU Internal Market Commissioner Frits Bolkestein condemning the jurisdiction on Monday for its lack of cooperation with regard to resolving the savings tax dispute. However, it appears that Luxembourg, for one, has had enough.

The tiny country - which played host to Tuesday's Ecofin meeting of EU finance Ministers - has announced that it will not agree to information exchange on non-residents savings income unless third countries such as Switzerland and the United States also agree. However, the jurisdiction's government has spoken up on behalf of the Swiss before, and has stated several times that it favours a return to the 'co-existence model' of 1997, whereby a withholding tax was imposed on the savings of non-residents as an alternative to automatic information exchange.

Speaking to delegates, Luxembourg's Prime Minister, Jean-Claude Juncker argued that: 'The way in which some of my colleagues are trying to negotiate with the Swiss is not acceptable. They are treating Switzerland like an Alpine Iraq. I won't stand for it.'

Caio Koch-Weser, Germany's deputy Finance Minister, on the other hand, expressed an opposing position in his speech.

'Switzerland has to decide what it wants, as far as Europe is concerned,' he maintained. 'Switzerland also has some things that it wants from Europe and we discuss many things in which we both have an interest.'

The two men also expressed differing views regarding the likelihood of the United States signing up to the information exchange agreement.

Mr Koch-Weser announced that he had 'no doubt' that the US will agree to the EU's proposals, whilst Prime Minister Juncker told those attending the conference that US officials have indicated that they are 'not 100%' in favour of information exchange during talks with Luxembourg on the issue.