Euro Will Force Bermuda Into Independence (Not!)

by Jeremy Hetherington-Gore, Tax-News.com, London

08 January 2002

Speculation is mounting in Britain's offshore dependent territories, including the Isle of Man, Bermuda and the BVI, that Tony Blair's single-minded pursuit of eurespectability will result not only in the death of the pound, but will bring in its train independence for the dependencies.

Bermuda's Royal Gazette quotes a United Press International report entitled "Euro enthusiasm marred by tax worries", presumably placed by Colbertian diehards in Brussels, which highlights the impact of the euro on regions considered offshore tax havens. The article said that while it was anticipated that the logistical side of the introduction of the euro would be a smooth one, the wider economic and financial implications after it is over seem to be a bigger headache for EU leaders.

The article said: "Not least is the continuance of Great Britain's long association with offshore banking. The Channel Islands, long seen by European Revenue services as a loophole, are but one black hole for tax dodgers. They form part of a British chain including the Isle of Man, the British Virgin Islands and the Turks and Caicos Islands, and Bermuda in the Caribbean." Yawn.

"The Isle of Man is only loosely tied to the British Crown and a leading banker told United Press International last week it was expected among the Island's financial community that British acceptance of the euro would eventually lead to Independence," the article said. So?

A leading lawyer in Bermuda who refused to be named told the Gazette's reporter: "Although Bermuda has opted to remain a Crown colony, there is a feeling that we are coming under such intense pressure from the European Union through the British Government to end our traditional banking advantages that there is a growing demand for complete independence."

It was to be expected the EU's Fiscal Tendency would use the introduction of the euro to have another tilt at tax competition; but it is worth noting that Monaco has adopted the euro, since its monetary policy is governed in tandem with France, but that this will have no impact on its tax regime. Rolling Stones, Italian opera singers, and Formula I racing drivers can continue to sleep safely in their silk sheets.

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