Vienna Eyes Banking Secrecy Deal with EU by May 22

Austria hopes to reach a deal with the European Union next month that would preserve banking secrecy for Austrians but open accounts held by foreigners to scrutiny, Chancellor Werner Faymann said Saturday.

Faymann told public Radio Oe1 that the May 22 EU summit "should signal a fresh start... We want to reach a result on the issue of data sharing in the interest of the fight against fraud in Europe."

As the EU cracks down on tax cheats, Austria has come under fire as the bloc's last country to hold onto banking secrecy after Luxembourg announced it was prepared to lift its own regulations on the matter.

In a joint statement on Friday, the Social Democrat chancellor and conservative vice-chancellor Michael Spindelegger agreed to join European negotiations on the automatic exchange of banking data.

"We want the international fight against tax fraud to work and we want to play a committed role in it," the coalition partners said.

"We don't want to give the impression internationally that Austria is a protector of tax dodgers."

Three conditions had to be met however, including respecting Austria's bilateral tax agreements with Switzerland and Liechtenstein, and a requirement that authorities identify the financial owners of shell corporations and trusts.

Faymann and Spindelegger's statement also reiterated that "Austrian banking secrecy for resident tax-payers must not be affected."

"Whether we agree to the expanded guidelines on taxation will depend on whether it is really suitable for preventing tax evasion and fraud," they added.

The Alpine republic, especially its vocal Finance Minister Maria Fekter, has repeatedly called for closer investigations of "the real tax havens", citing British-dependent territories such as the Channel Islands, Gibraltar or the Cayman Islands.