EU calls on Austria and Luxembourg to abandon bank secrecy regime

EU calls on Austria and Luxembourg to abandon bank secrecy regime
Austria is under pressure from the European Commission over its banking secrecy policy and risks being left alone in an "unsustainable position" as the EU gears up for a drive to curb tax evasion.

The Commission has called on Austria to free up information on foreign depositors in its banking sector on Monday and follow the transparency rules other EU members follow.

The move comes as Germany steps up efforts to force all offshore banking centers in Europe to abandon banking secrecy regimes and apply uniform rules on exchanging account holders' data. Austria and Luxembourg have been under particular pressure as the two are the only EU member states currently holding out.

Cyprus's drama with its burdensome bailout served to focus on European regulations regarding foreigners holding large deposits in offshore havens within the eurozone and toughen up the jurisdictions across the bloc.

To show support with the line Germany is pushing forward, Luxembourg says it may ease its secrecy regime.

"We no longer strictly reject this, in contrast to before," Luc Frieden said, speaking about international trend towards greater banking transparency with Germany's Frankfurter Allgemeine Sonntagszeitung.

Luxembourg's banking system holds deposits equivalent to about 10 times the tiny country's economy, while Austria's banking sector is 135.3% of the country's GDP according to the World Bank data as of 2011.