Taxed to the limits?

The parliamentary floor leader of the pro-business Free Democrats, Rainer Brüderle, told public broadcaster ZDF on Thursday that the failure to enact a Swiss-German tax agreement harmed Germany's political reputation.

Brüderle spoke of the opposition's obstructionist policies, saying their behavior could by no means be called "cooperative federalism."

The German government on Wednesday failed to salvage a bilateral deal that aimed to end a dispute with Switzerland over German tax dodgers hiding money in Swiss banks. A special committee mediating between the German houses of parliament decided against the ratification of the draft agreement, following an earlier negative vote by the upper house, where the government lacks a majority.

Deal couldn't be any deader

The deal would have allowed Germans with undeclared assets in Switzerland to escape punishment by making a one-time payment of between 21 and 41 percent of the value of their assets in Swiss banks. But Germany's opposition argued the deal was too soft on tax evaders and opposed it.

The mediating committee called on Berlin to prepare fresh talks with Switzerland with a view to reaching an improved deal that would be acceptable to all mainstream forces in Germany.

Swiss Finance Minister Eveline Widmer-Schlumpf said she regretted the committee's decision, ruling out any direct renegotiations with German leaders. The Swiss Association of Bankers said that a big chance had been missed to reach a fair and sustainable solution for all sides concerned.

hg/msh (dpa, AP, Reuters)