Up to €55.2bn has been lost to tax fraud by the EU’s top banks, it has been claimed in a new report. Styled “the biggest tax robbery in European history”, it included some of the EU’s largest banks such as Deutsche, Barclays, JPMorgan, UBS and Santander.
The fraud was executed via the “cum-ex” purchases of bonds and shared, a method by which banks can hide the identities of their clients. The clients are then able to claim multiple tax breaks on the trades. It is estimated to have costs taxpayers in Germany alone €31.8bn between 2001 and 2016.
The findings are the result of a massive cross-border investigation involving 12 countries and 19 media outlets, compiling over 180,000 pages of documents, all of which was published on October 18.
It was only recently that Denmark’s biggest lender, Danske bank, was discovered to have engaged in the biggest money laundering scam in European history, channelling €200bn of Russian money via Estonia. Deutsche Bank has already admitted handling some of the funds.
And yet, remarkably, the EU is still pressing on with its banking union plans. Integration always comes first. At a recent summit in Brussels the plans were agreed to move forward, with leaders claiming it would provide a more stable environment.
The existing levels of information exchange within the EU, as demonstrated by the cum-ex scandal, did nothing to stop such widespread fraud taking place.
As usual, the overwhelming political desire to increase integration is pushing the project faster than its structures and states can cope with. The ‘integrate then fix’ model doesn’t work, as shown by the severity of the eurozone crisis. The EU needs to start recognising this.