Joaquín Almunia, European Commissioner for Economic and Monetary Policy, Slovenian Finance Minister and the President of the Council, Andrej Bajuk, and László Kovács, European Commissioner responsible for Taxation and Customs Union at the press conference after the ECOFIN meeting on March 04, 2008.

Germany won the support of most member countries of the European Union on Tuesday for a clampdown on tax havens.

At the March meeting of Ecofin, comprising the 27 EU finance ministers, the majority of countries supported a proposal  to request the European Commission to bring forward a review of three-year-old legislation that has limited the opportunities for tax evasion.

The German proposal was prompted by the revelation last month that Germany's intelligence service had paid a former employee of Liechtenstein's biggest bank, €4.2 million for a DVD containing details on 1,400 apparent tax evaders with almost half of them resident in Germany.  

Peer Steinbrück, the German Finance Minister, said that the revelation that hundreds of Germans were hiding large amounts of money in the Alpine tax haven, offered "spectacular cases of tax fraud" that were not merely a scam but "a social and moral issue".

The European Commission has been looking at ways to clamp down on tax evasion in non-EU territories such as Hong Kong and Macao but the European tax havens of Andorra, Liechtenstein and Monaco have moved to centre stage in recent weeks.

The Commission is expected to put forward proposals for amending the 2005 directive, with a view to closing loopholes that have remained open.

It has been suggested that the EU rules could be expanded to cover not only interest payments on cash savings but capital gains, dividends and other returns on assets. László Kovács, EU tax commissioner, has also suggested that the rules cover investment vehicles such as trusts, which some national tax authorities say are being exploited for tax evasion purposes.

 Only Austria and Luxembourg, which obtained special arrangements when an EU savings tax directive came into effect in 2005, were lukewarm about the Ecofin proposal on Tuesday.

 "We need clear pressure on Liechtenstein to provide more information to make sure people are not acting illegally to evade their tax obligations,"said a UK Treasury spokesman was reported as saying.

“I’m looking forward to many years of fascinating and fundamental discussions,” diplomats quoted Jean-Claude Juncker, Prime Minister of Luxembourg as saying. The Duchy has an international financial centre.

Austrian officials also defended the status quo, saying their country did not practice banking secrecy when it came to criminal matters.