German Finance Minister Wolfgang Schaeuble (pictured left) said in a newspaper interview that Germany will buy stolen information on Swiss bank accounts, backed by a poll showing voter support for the move if it helps fight tax fraud. The Swiss case is similar legally to a tax probe begun two years ago, when German authorities bought client data in Liechtenstein and used the information to pursue tax evaders, the southern German Augsburger Allgemeine newspaper cited Schaeuble as saying today in an interview. "For this reason we could hardly decide otherwise," Schaeuble was cited as saying. The decision has already been taken "in principle." A Finance Ministry spokeswoman wasn't immediately able to confirm his comments. A majority of Germans, 57 percent, said they support using information on tax violations even if it was illegally obtained, a Forsa poll of 1,000 people for Stern magazine showed. Forty-three percent said they oppose such a move, the poll showed. – Bloomberg
Dominant Social Theme: Tax evasion will not stand.
Free-Market Analysis: On the face of it, the Swiss business of banking secrecy seems to be under severe attack. But let's peer beneath the surface, shall we? The EU, right now is under tremendous pressure having to do with governmental over-spending in numerous states. Is it possible that EU difficulties are driving some of the attacks?
The unraveling of Greece might be exhibit A for this sort of hypothesis. Simply put, the Greek government spends too much, mostly on social programs, and if its spending cannot be reined in, either the EU will have to expel Greece or offer Greece euros to bridge the gap between outflow and inflow. We figure there will be some initial violence – that's already in the works – and then the EU will bow to the inevitable and find a way to declare Greece solvent even though it is not.
But what about Spain, Portugal, perhaps Ireland and a host of other countries? When one speaks of an EU bailout, one is actually referring to Germany, by far the biggest economy in Europe and easily the healthiest – though that's not saying much when considering what's actually happening. Throughout the middle 2000s the fiat-money boom papered over the problems of the EU's fiscal construction. But now the bill has come due. Shakier economies that purchased civil quietude through government largesse are now, like Greece, facing soaring deficits.
Even the strongest EU economy, Germany, has some of the same problems as Greece. It is strong unionism, and equally strong government pension guarantees, that are mostly responsible for the fix EU economies are in. The cradle-to-grave security that European countries, and now the EU, has promised to citizens, is sure to be seen eventually as a defunct civil contract.
And thus it is that the EU itself and its grasping vassal states are faced with a dilemma. They may wish to stave off a day of reckoning – especially seeing what Greece is going through – but the long-term prospects are not good. And as a result, they scratch for any revenue they can get. Enter Switzerland.
Here is a glittering prize, a tiny nation of six million controlling trillions in assets (via its private banking system), a goodly portion of the world's wealth. Switzerland, with its emphasis on free-market practicality, a republican style of government and general non-socialist environment must serve as both a temptation and reprimand to Europe's lamentable political class. In contrast to the failed and failing states of Europe, stands a country and a people (Swiss-German mostly) that succeeds by following the old-fashioned verities of classical liberalism. Every day, European socialists cast their eyes over the Alps and are angered and embarrassed by what they see.
Is this blow-up over Swiss banking secrecy driven by the inevitableness of pan-socialism? Or is a last-gasp striking-out of sinking countries – nations that are sinking alongside the EU itself? We're tempted to support the latter hypothesis as logic seems to fail when applied to the former. The EU model, in our opinion, is a failing model. The Swiss model is a successful one. Every day that the Swiss survive in their present condition is an affront to its collapsing, corrupt neighbors. France with its rabid public unions and Germany with its truculent private ones. Italy with its general impoverishing incompetence and Spain, an incipient bankrupt.
Meanwhile, the Swiss are still run from the bottom up, with conclaves of landowners gathering regularly to figure out what they want the national government to do. Swiss farms still glitter. Swiss trains run on time, and watches are deservedly expensive. How you do anything is how you do everything and the Swiss are known for attention to quality and detail and maintaining very high standards. However, the Swiss in our estimation are fighting a series of rear-guard actions to preserve their way of life while waiting for the EU to fully implode.
The Swiss model is such a successful one that we wonder why more countries and leaders don't emulate. The conclusion so far as the EU is concerned is to tear down Switzerland rather than adopt the features of Switzerland that makes it such an attractive and successful country. In fact, to accommodate this sort of negativism – in a kind of strange race toward the bottom — the Swiss gave up their precious gold-linked money in 2000 and they've also made it easier for EU citizens to live and work in Switzerland.
NOTED: Undermining al Qaeda in Yemen – should the US outsource its security to a war criminal? … The global reach of al Qaeda in Yemen became clear when a Nigerian disciple of the murder cult nearly blew up an airliner over Detroit. In response, the Obama administration is strengthening its support for Yemeni President Ali Abdullah Saleh (pictured left), one of the regions longest serving dictators and one of the most corrupt. … The hypocrisy is stunning. The US administration is well aware that Saleh's government is committing atrocities against civilians that rise to the level of war crimes. In a Darfur-like conflict in Sa'ada, northern Yemen, collective punishment of Shiite civilians includes indiscriminate bombing and intentional starvation. A former recruiter for Osama bin Laden leads the military with the help of tribal militias, former Iraqi army officers and foreign jihaddists. Over 200,000 are homeless from the war and largely deprived of aid. When Oxfam warned of a "humanitarian catastrophe of terrifying proportions," the Yemeni Health Minister threatened to expel the organization. – Jawa Report (Ed Note: Seems like the military situation in Yemen is a bit more complex than has been reported. The Bell will return to this issue in the near future.)
But the bottom line reality of Switzerland has not changed. It remains a republic, dedicated to the republican values that have made it a successful nation state. Switzerland is the world's oldest republic. It managed to survive World War II, which was an even more trying time than this one, and it will likely survive the EU as well. And survive with most of its trillions in banking deposits intact. Switzerland or the EU? We'll take Switzerland, odds on.