The EU believes up to a trillion euros are lost each year because of tax evasion. Much of that money is believed to be hidden in non-EU member Switzerland. It is still clinging to its long tradition of banking secrecy.
For two centuries, Geneva has been one of the world's leading centers for looking after wealth. The streets are lined with banks. Money, and the discreet, confidential management of it, has made the city successful.
But that long tradition of banking secrecy, which began simply as a way to protect a client's privacy, has, Switzerland's neighbors say, become a tool to siphon billions in foreign tax revenue into Swiss bank accounts.
"Every year around one trillion euros is lost in EU member states because of tax evasion and tax avoidance," said Herman Van Rompuy, the president of the European Council, "one hundred times more than the loan that was recently agreed on for Cyprus."
Most of Switzerland's EU neighbors are angry that everyone with money to hide - from French politicians to German football managers - seems to find a safe bolt-hole in a Swiss bank. The European Union and the United States are demanding automatic exchange of bank information - the complete antithesis to banking secrecy.
Punishment for success?
There is dismay in the Swiss parliament. "Wherever I go in the world, it's very fashionable today to say some nasty words about the Swiss and their banks," said Yves Nidegger of the right-wing Swiss People's Party. He believes his country is being punished for its success. "The fact that the Swiss banks have been taking care of one fourth of the private equity in the world was too much for a small country. And London, New York, and Brussels, they declared a war on that."
The US also want Switzerland to share information
Geneva's bankers also see it as a war and feel under siege. "Certainly we cannot be at war with our neighbors on these issues, that is very clear," Michel Derobert, head of the Swiss Association of Private Bankers, told DW. "We will have to solve that problem; I'm fairly sure about that." Personally, he added, he believes Switzerland should find a solution with the European Union.
But how to solve it? Should Switzerland surrender, and abandon banking secrecy? A recent opinion poll caused headlines when it revealed that almost half of Swiss voters would do so. "Banking secrecy is dying," law professor Philippe Mastronardi agrees.
He told DW he believes it is inevitable for Switzerland to give it up sooner or later. "It's really turning round very fast now, Switzerland is moving week by week, month by month towards automatic exchange of information." Since Switzerland is a small nation, the legal expert added, it had no power to enforce its interests upon other countries.
A country divided in two
But the other half of Swiss want to keep it. The political debate has become heated. Member of Parliament Yves Nidegger is not ready to give in. According to him, Switzerland still has some bargaining positions - such as guaranteeing the Greek debt. "We are the only ones able to do that. The Greek bank would be Triple A, would be sellable, and the guarantee would be maintained as long as our banking secrecy is respected." That way, argued Nidegger, Switzerland could prove it's not just selfishly trying to do its own games and not help. "We are ready to co-operate, we just want to be respected."
Switzerland may have the money to guarantee Greece's debt, but it's unlikely to do so in return for keeping banking secrecy. The Swiss money men are after all, in the face of all the pressure, beginning to accept what was once unthinkable. "We see the world, the whole world, moving towards a single standard," Swiss banker Derobert told DW. "Obviously we will have to adjust to that standard. We understand that if a world standard comes to the surface, we understand that it will be difficult to remain outside the civilized world."
Geneva's banks, and Zurich's, and indeed all the Swiss banks, are therefore going to have to find a new, more open way of doing business. It seems the numbered accounts are outdated, and the days of banking secrecy are numbered.