Arriving for the meeting on Tuesday, Steinbrueck said: "The European commission should bring out a proposal to extend the savings directive sooner than expected."
 
Banking secrecy

The commission, the EU's executive arm, is supposed to produce a review of the  directive's working in October or November, but it has indicated that it could do so sooner if ministers wanted.

In its present form, the savings tax directive requires EU members to share tax information with each other about interest income kept by account holders from other EU countries.

However, it was only agreed after special arrangements were made for Austria, Belgium and Liechtenstein, who were eager to protect banking secrecy in their countries.

Under the directive, the three states do not have to exchange tax information with fellow EU countries but instead have to charge foreign account holders a witholding tax on interest income.

The EU has similar bilateral agreements with a clutch of other countries and territories known for their banking secrecy laws, including Switzerland and Liechtenstein.

The current savings directive has been criticised since it allows considerable scope for people to set up foundations in order to get around the rules.

It also fails to cover such revenues as dividend income or capital gains.

'Loopholes'

Maria Assimakopoulou, European commission spokeswoman for tax issues, said: "What we have seen from the ongoing review is that there are loopholes. There are loopholes also because the directive doesn't apply to other structures and only to individuals."

Any tightening of the rules is likely to take considerable time as the current directive took many years to negotiate, with Luxembourg especially worried about losing the benefits its banking secrecy offers.

However, Jean-Claude Juncker, Luxembourg's prime minister, said that "the function of European financial centres cannot be to get rich at the expense of their neighbours.

"A stock taking needs to be done (of the current directive) to see if it works correctly or if it is defective. After the stock taking, it has to be seen whether the directive needs to be completed or not."

Even if the EU is able to eventually agree on tightening the rules, critics warn that tax dodgers will only go further afield to hide their savings.