Jul 04 2011

A lovely little detail from Switzerland

Posted by: Nick Shaxson in: Thoughts

I hope David Malone at Golem XIV doesn’t mind my reproducing one of his blogs, in full:

Sometimes its the little details that tell the story. Here’s one such small detail that makes me think that I’m not the only person in Europe who thinks this crisis isn’t over.

A friend of mine in the financial world in Switzerland, told me today that the Swiss banks have very nearly run out of bank deposit box space.

The last few weeks have seen such a torrent of wealthy Europeans wanting to get their ‘assets’ out of Europe and in to a Swiss bank that if you want a bank box in Zurich today, they will require that you have a minum of half a million swiss francs on deposit in the bank, before they will even consider you. That is how short of space they are.

Capital flight anyone?

What do you bet that a great many of those seeking deposit boxes are Greek, Italian and Spanish? We’re all in this together? Of course we are.

A lovely little detail? Perhaps that headline should have read ‘A nasty little detail from Switzerland.”

6 comments so far

AlienEdouard 7th July, 2011 12.19 pm

What makes you think that these deposits are not totally legal and legitimate?

Nick Shaxson 7th July, 2011 11.24 am

Er, well, let’s say for example reports from Swiss banking or research institutions such as Helvea which estimate that 99% of Greek and Italian deposits are tax-evading (though a somewhat lesser percentage for German and UK), statements from top Swiss bankers to this effect, and so on. You know, that kind of stuff.

AlienEdouard 7th July, 2011 1.12 pm

Seriously, do you have any credible source for that or publication you could link to?

Nick Shaxson 7th July, 2011 3.27 pm

It’s called Swiss banking secrecy and taxation: Paradise Lost? Helvea, May 2009. You’ll find it here http://www.safehaven.at/wordpress_cms/wp-content/uploads/2010/03/Helvea-Studie.pdf and the Italian and Greek figures are on p13. The overall figure for all EU countries was recorded at 84% undeclared. Seriously.

AlienEdouard 7th July, 2011 2.44 pm

A few comments:

1. Those figures refer to legacy deposits, not to the current outflows from Southern Europe into Switzerland. There is considerable evidence that Swiss banks have become far more reluctant to accept undeclared capital.

2. The figures clearly demonstrate the correlation between high taxes/poor government and tax evasion. It is not a co-incidence if the highest rates of evasion are from Italy and Greece.

3. These countries need to urgently address this problem and have two obvious avenues to do this: (i) a tax amnesty like the successive Italian “scudo”, or (ii) a deal with Switzerland along the lines of the what the Germans are currently negotiating.

Nick Shaxson 7th July, 2011 10.02 am

So after asking me if ‘seriously’ there was data to back up my assertions you accept that I have it. Good. Your proposals for a solution come from a worldview that I discussed in my other comment on the Art Uncut post, which is profoundly anti-social and subversive of political community. Take the money and run, and screw everyone else. Overlook crime and fraud. Let them get on with it. Surrender. I take a different approach. http://bit.ly/oeZOfm

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