Under the title Helvetian Swan Song? Dr Marian L. Tupy, Assistant Director of the Project on Global Economic Liberty at the Cato Institute, examines the implications of the Switzerland’s recent accession to the Schengen Treaty.
Tupy points out that the passport-free movement across the EU, which the Swiss should have had without any difficulty, was granted in return for the Swiss surrendering their cherished banking independence. No, this had nothing to do with money laundering or even those elusive Nazi accounts. Quite simply, Germany was desperate to prevent haemorrhage of money out of its own high-tax economy. So, pressure was put on the Swiss and, in order to be able to travel round the continent, they had to comply.
Swiss banks will be required to inform on the account of money the EU citizens hold in Swiss bank acoounts, or else will have to assess a 35 per cent tax on the EU citizens’ savings, 75 per cent of which will be repatriated to the appropriate EU governments. In exchange, German police will no longer harass Swiss traders and travellers – at least for now.Dr Tupy, who, in the past, has displayed inexplicable optimism about the EU's capacity to reform, is now deeeply pessimistic. He foresees and end to Switzerland’s independence and an ever-extending and ever-tightening grip by the EU.
The likelihood is that the money will, in the first place, go somewhere else where the German government and the EU can have no power. Secondarily, one suspects that the Swiss will think of a way of circumventing an agreement that so seriously undermines their economy. And Germany and the others will go on haemorrhaging money. The only answer is to reform its tax system but that seems beyond most continental governments (or the British one, for that matter).