European leaders targeted Wednesday setting a year-end deadline to do away with banking secrecy, hoping to recoup a trillion euros in lost tax each year in a time of record recession and unemployment.

“Tax fraud and the hindrance of a real exchange of information ― that has to end,” said German Chancellor Angela Merkel on arrival for a one-day European Union summit.

Leaders also aim to produce a joined-up energy policy, hoping to boost the European economy’s competitive edge.

The ambitious goal of making the sharing of bank records automatic across the EU is contingent, however, on the same deal being negotiated first with non-EU financial center Switzerland and other tax havens on the bloc’s doorstep.

Otherwise, the holdouts in five years of trying to break down barriers ― Luxembourg and Austria ― will have room to delay implementation.

At this stage, the information exchange regime is intended to cover only savings accounts ― a much more restricted measure than that brokered by the United States with foreign countries since 2010.

Some leaders, notably British Prime Minister and current G8 chair David Cameron, backed by French President Francois Hollande, want the drive extended to corporate taxation at a time when major companies, among them technology giant Apple in Ireland, have come under fire for paying only very low tax rates.

In final draft conclusions seen by AFP on Wednesday, leaders were to call for the rules covering automatic information sharing on savings accounts, first agreed in 2008, to be adopted “before the end of the year.”

One of the first to arrive at the EU’s Brussels HQ, veteran Luxembourg Prime Minister Jean-Claude Juncker, stressed that his country will only move in line with a broader deal.

“We are going to abandon banking secrecy and move towards the automatic exchange of information we want to bring in for Jan. 1, 2015,” Juncker insisted.

However, this “necessitates negotiations with third countries, notably Switzerland, so we are in a position that does not skew competition,” he warned.

Austrian counterpart Werner Faymann made the same point. “We want data exchange with third countries.”

Oxfam estimates that more than $12 trillion is hidden in EU-related tax havens ― with the U.K. and its dependencies alone, from Guernsey to Grand Cayman, accounting for more than half. 

(AFP)