BERN -(Dow Jones)- Swiss President and Finance Minister Kaspar Villiger said Monday he was astonished at German Finance Minister Hans Eichel's recent harsh criticism of Switzerland and warned that intense pressure from the European Union could be counterproductive and affect ongoing negotiations. Friday, Eichel said Switzerland was isolating itself more and more by its resistance to the introduction of the automatic exchange of information in relation to savings tax. Eichel made the comments on the sidelines of an E.U. summit in Seville.
The E.U. and Switzerland launched a second round of bilateral talks on topics including the taxation of non-resident savings earlier this year.
Villiger said Monday Switzerland had suggested an equally effective and generous system for the taxation of savings as the one favored by the E.U. minister.
"I don't know of any sovereign state that would suggest such a solution to its neighbor," Villiger said.
Villiger added that accusations that Switzerland is not interested in a solution and is trying to block negotiations are not true.
He also said it was improper to create a relationship between Sept. 11, the financing of "terrorism" and banking secrecy. Eichel had also urged Switzerland to drop banking secrecy laws at the E.U. summit.
Villiger said that while preliminary negotiations are about establishing one's position, he was surprised at the language of the criticism.
If the criticism continued in a similar tone, he said, it could create a Swiss backlash.
-By Carey Sargent, Dow Jones Newswires; +41 1 211 6637; carey.sargent@ dowjones.com
(This story was originally published by Dow Jones Newswires)
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