European crisis may bring opportunities for Channel Islands

Mr Williams said there would be positives and negatives for the islands

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The current economic crisis in Europe will bring opportunities as well as threats, according to the Channel Islands director of European affairs.

Steve Williams said: "It is very unpredictable how it will play out over the next few weeks and months."

He warned the islands could be impacted as European countries look to close any loopholes to maximise their tax takes.

However, Mr Williams said the islands could continue to offer high value services for wealthy people.

He said the European Union had 500m consumers and a combined Gross Domestic Product (GDP) of 12 trillion euros and it was a "market in which the Channel Islands economies are already well integrated".

Mr Williams said: "Some of the areas which are being focussed on for generating growth in years to come, like the digital agenda are at the high value added part of the chain, which is playing to the strengths of the Channel Islands economies."

He said: "In the taxation field we have to accept that in a time of recession all governments across the world, but particularly in Europe, are needing to maximise their tax revenues.

"So they will be looking at plugging gaps and that will include looking at how their tax regimes interface with regimes in third countries, so obviously that aspect of it will need watching carefully."

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