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Hollande pledges to 'eradicate' tax havens

French president, grappling with tax-fraud scandal, wants new transparency requirement extended to banks across EU.

Last Modified: 10 Apr 2013 17:10
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Hollande's party is struggling over a tax-fraud scandal involving Cahuzac, right, former budget minister [Reuters]

Francois Hollande, France's president, has pledged to "eradicate" tax havens, increase checks on officials' finances and crack down on tax cheats as he grapples with a scandal over an ex-minister's secret Swiss bank account.

The measures laid out on Wednesday, a week after his former budget minister Jerome Cahuzac was charged with tax fraud, were part of what Hollande promised would be "a relentless battle against the excesses of money, greed and secret finance."

The new "moralisation" drive will include steps to limit the use of tax havens by forcing banks to expose their foreign activities, Hollande told a post-cabinet press conference.

"Tax havens must be eradicated in Europe and the world," Hollande said.

"French banks will be required every year to make public the list of all their subsidiaries everywhere in the world, country by country," and will be required to "declare the nature of their activities," he said.

Hollande said he wanted the requirement extended to banks across the European Union and eventually to major corporations.

New authority

Hollande also announced initiatives to restore confidence in public officials and boost the fight against tax evasion, with a new law to be presented by April 24.

A new "completely independent" government authority will be created to monitor the assets and potential conflicts of interests of ministers, parliamentarians and other senior elected officials, he said.

The government has already ordered ministers to declare their assets publicly by Monday and other officials will face the same requirement once the law is adopted.

A special prosecutor's office will also be created to lead the fight against corruption and tax evasion, and punishments for fiscal crimes will be increased, Hollande said.

Restoring confidence

Hollande's Socialist government is scrambling to contain the scandal surrounding Cahuzac, who was charged with tax fraud after admitting to having an undeclared foreign bank account containing some $770,000.

Critics have called for a cabinet reshuffle over the scandal and said on Wednesday the new measures did not go far enough to restore confidence in the government.

"We're still as much in the dark," said the head of the main opposition right-wing UMP party, Jean-Francois Cope. "None of the measures proposed would have prevented the Cahuzac scandal."

"The attempts at distraction continue. The president has still not taken the full measure of the scandal, of what's happening with Cahuzac," said Christian Jacob, the head of the UMP faction in the lower house National Assembly.

But the head of Hollande's Socialist Party, which expelled Cahuzac over the scandal, welcomed the measures and said they should be implemented as quickly as possible.

"The president today displayed an unwavering political will to strengthen the control and transparency of political life," Harlem Desir said in a statement.

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