Swiss Private Bankers Threaten Referendum Over Savings Tax Talks

by Ulrika Lomas, Tax-News.com, Brussels

20 January 2003

It emerged last week that the Swiss Private Bankers Association has threatened to call for a referendum if the Swiss negotiating team makes any more concessions to the European Union over savings tax at tomorrow's meeting.

Speaking to the Swissinfo news service on Friday, Ivan Pictet, partner at the Geneva-based Pictet Bank warned that a nationwide poll could derail crucial negotiations over the second set of bilateral treaties currently under discussion between the EU and Switzerland.

'The government knows that if it goes beyond what is acceptable for the financial sector or threatens it, there will be a referendum,' he observed. 'Obviously it also knows that 72% of the population voted against entering the EU as it is now.'

Although the Swiss government has so far stuck to its guns, offering to impose a 35% withholding tax in lieu of automatic information exchange on non-resident savings interest, bankers in Switzerland fear that it may offer more concessions to the European bloc in order to secure agreements on other aspects of the bilateral treaties.

'I'm not quite sure that the government has much flexibility in a direct democracy like Switzerland to go beyond what the population really wants,' Mr Pictet warned.

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