If we put joking aside for a moment, the truth is that the debate about tax havens and banking secrecy is turning sinister. And it doesn’t concern just the rich anymore. The international get together was a prime example of what has turned into a modern day witch-hunt in Europe, led by people like the Finnish Minister of Finance.
Let’s have a closer look at last week’s conference and start with the list of participants. It was concerning tax havens so surely there must have been a banker or two there, or some offshore entity professionals? Well no there wasn’t. Not one single representative from the banking or finance sector.
By any civilised standard of discourse and debate you would have both sides represented. Even in dictatorial show trials you actually had some poor patsy as the accused. Not in Finland apparently.
Then we come to the minister’s speech. Here is the link. The use of the English language is diabolical and one would expect that austerity wouldn’t have gotten so bad in AAA-rated Finland that the Finnish Finance Minister would actually have someone on her staff who could write English properly, but let us overlook that for now.
Let’s look at the content. In her speech the minister said:
“EU countries lose one thousand billion a year when money is being hidden through various channels in tax havens.”
What is this figure based upon? Is there any validity to it? I don’t know what hat she pulled this figure out of, but I’m willing to bet it was some NGO, which was set up to fight tax havens.
What is in the best interests of an NGO set up to fight tax havens? I would guess having the problem as big as possible would be in their interests: The bigger the problem the more ”legitimate” their mandate, hence the better their funding.
The thing for politicians is that they can throw around any spurious figures without any fear of actually being held accountable. If it turns out (as it will) that her figures are complete pie in the sky, what then? Nothing, nada, that’s what. Fair and just it certainly isn’t.
“We can turn it into action against tax havens, tax evasion and aggressive tax planning.”
Wait a minute! What’s that? Tax havens as bad entities. Okay I buy that there are issues that need to be dealt with regarding tax havens. Tax evasion. Okay I get that too. As a crime tax evasion definitely needs to be dealt with. Tax planning? Tax planning? Tax planning is now equivalent to a crime!!?? What the minister is doing is painting a completely legitimate activity as criminal.
“In order to be effective, we also need naming and shaming.”
Naming and shaming! Perhaps the minister should be made aware of the Universal Declaration of Human Rights, which states in Article 12.
“No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks.”
Notice that she didn't make any mention of any right to due process? However, this is fully in line since it is clear from the list of participants that the minister does not want those accused to have a voice.
Oh and there’s more:
“I hope that EU Finance Ministers in our May meeting will say with one voice to the tax havens: “We want our money back”.”
As mentioned earlier, the speech is written in extremely poor English, so perhaps she could be forgiven for meaning something else. But as it stands, that sentence does not speak for the people of Europe. It states very clearly that the finance ministers want "their" money back. Look at what happened in Cyprus. Do you really think this it's the rich peoples money alone that they will go after?
One more thing about Finland (a matter for the economic historians this). Upon demands of the Finnish Minister of Finance, Finland made a unique (no other EU country wanted to be part of it) collateral agreement regarding the Greek bailout. In total disregard for openness and democracy this collateral agreement was made secret. Joseph Cotterill of FT Alphaville (registration required) did a great job in trying to get to the bottom of it, but since the details of the agreement were secret no one actually knows clearly what was agreed and what banks were involved and what kind of transactions.
One thing is public though: The deal will have involved banks, it will have involved corporate entities and it will have involved member states. Remember that: Banks, corporations and member states, because this is what she said in her speech last week:
“I would like to raise three concerns we need to tackle: bank secrecy, corporate secrecy as well as the secrecy between states.”
The sheer arrogance is mind boggling, do you not agree? She demands openness from all but when she creates something. Well that had better be kept secret.
George Orwell’s Animal Farm just jumps out at you, does it not? Some really are more equal than others.
To finish (pardon the pun) off, let’s have a quick recap:
- Conferences in which a group is accused, yet not given a chance to be heard.
- Use of false and unsubstantiated “facts” to make your case
- Denial of human rights
- Having different rules for yourself than others.
- Claiming the property of others as your own.
That does sound familiar from history does it not? I’m old enough to remember and to have visited a regime which lived by those standards. And it was this.
On a final note. For those of you who haven’t seen the Finnish Finance Minister Jutta Urpilainen in action. Here she is going at it with gusto in English.