Furore over plan to buy stolen tax data

Chancellor Angela Merkel faced a blistering political row with Switzerland and her own Christian Democrats yesterday over a plan to buy stolen Swiss bank data naming hundreds of German tax evaders who have millions of euros in secret accounts.

A CD identifying some 1,500 Germans who have illicit Swiss accounts was procured by a former employee at the Geneva branch of HSBC bank. The disc, which could return an estimated €200m (£175m) in lost revenue, was offered to the German government for the sum of €2.5m at the weekend.

Ms Merkel and her Finance Minister, Wolfgang Schäuble, initially greeted the offer as a welcome means of bringing tax evaders to book. "Like everyone else, I think that tax evaders need to be uncovered," Ms Merkel said.

Yesterday, however, it became clear that Germany's apparent readiness to buy stolen bank data had plunged Ms Merkel into a row with Switzerland and her own conservative Christian Democratic Union. Leading members of the party described the plan to buy the CD as immoral.

Hans-Rudolf Merz, the Swiss Finance Minister, suggested that relations between the two countries would suffer. "What Germany is doing is punishable by law in Switzerland. The use of stolen bank data for tax purposes is simply illegal," he said. And Adrian Amstutz, a leading member of the right-wing Swiss People's Party, said Ms Merkel's announcement meant that relations between Switzerland and Germany would "sink to a level not seen since the era of Hitler", and demanded that she revoke her plan.

Leading members of Ms Merkel's Christian Democrats agreed. "We are signalling to these data thieves: we will buy what you steal," warned Kurt Lauk, president of the business council of the CDU. "The state should be trying to arrest this man."

However Ms Merkel's stance has been fully backed by Germany's Social Democrats, the Green Party and the police. German tax evaders are estimated to have some €175bn concealed in Swiss bank accounts. An opinion poll published yesterday showed that 57 per cent of Germans supported the government plan to buy the CD; 43 per cent were against. Siegfried Kauder, a Christian Democrat legal expert, said the data was "unusable" in court.

But Ms Merkel and her Finance Minister argued yesterday that the whistleblowing tax CD was no different from a similar case in 2008 when Germany paid €4.2m for stolen bank data procured by a former employee at a Liechtenstein bank. The information was used to identify some 600 tax evaders, including former Deutsche Post boss Klaus Zumwinkel. He was fined €1m for tax evasion and given a two-year suspended jail term.

The former HSBC employee cited as having offered the stolen data to Germany has been identified as Hervé Falciani, a French citizen who was also alleged to have offered secret bank data to the French authorities last year.