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22 February, 2008 - Published 12:18 GMT
Germany, Liechtenstein in tax row
The German Chancellor Angela Merkel has urged Liechtenstein to take rapid action to introduce measures aimed at creating greater transparency in its banking sector. Angela Merkel said she expected Liechtenstein to sign up to the EU directive on money laundering. This report from Tristana Moore:
Amid a growing diplomatic row, Chancellor Merkel was fairly blunt after she held talks with the prime minister of Liechtenstein, Otmar Hasler. At a news conference, the German Chancellor called for more transparency and she put pressure on Liechtenstein to crack down on fraud and co-operate with tax authorities in other countries.
German prosecutors have been searching offices and banks across the country, as part of their investigation into hundreds of Germans suspected of dodging taxes by channelling money into Liechtenstein. It all started last week when Klaus Zumwinkel resigned as chief executive of Germany's postal group after police raided his home. Liechtenstein's secretive banks and foundations have come under intense scrutiny.
Speaking in Berlin, the prime minister, Otmar Hasler, was keen to point out his government had stepped up efforts to bring criminals to justice and, he said, Liechtenstein would reform the laws governing the controversial foundations.
German politicians claim Liechtenstein's secretive banking laws have encouraged tax dodgers to take refuge there. As prosecutors continue their investigation, this affair is far from over.
Tristana Moore, BBC News, Berlin
called for more transparency
to crack down on fraud
channelling money into Liechtenstein
come under intense scrutiny
stepped up efforts
to take refuge
is far from over