Eurozone Leaders Try to Tackle Tax Evasion

on May 23 2013 7:57 AM
Euro
The euro will likely fall against the U.S. dollar, to $1.10 by the end of 2012, from its current level of $1.27. Reuters

The euro slipped to $1.2838 on Thursday morning following Federal Reserve Chairman Ben Bernanke's testimony to Congress and the release of the bank's latest policy meeting minutes. Bernanke told Congress that the Fed would consider easing back on its bond buying stimulus if the country's economic improvement continued. His comments boosted the dollar and sent the euro downward as a result.

At a summit in Brussels, eurozone leaders met to discuss the region's economic decline. Tax evasion and its negative consequences on the cash strapped nations was a major topic as the regions discussed how to fight it without discouraging foreign investment and remaining competitive in the global market.

According to the Wall Street Journal, Luxembourg and Austria have expressed willingness to make their bank's deposits more transparent and allow other countries a better view of the funds their citizens may be depositing there. Should bank secrecy laws be softened, it could provide a powerful precedent for the rest of the blocs banks and lead to information sharing between tax authorities.

Tax fraud has been a widely debated issue throughout the eurozone, with many blaming corporations' tax avoidance and individual tax evasion for part of the bloc's financial crisis. Many multinational corporations like Google and Apple declare most of their revenue in Ireland, where legal loopholes allow the companies to pay lower tax rates.

Moving forward, leaders from all of the eurozone nations have promised to reform tax laws and eliminate loopholes to streamline the process and generate more revenue. However, no concrete statements have been made about how to implement such changes.

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