Wednesday, July 08, 2009

President Obama attacks Swiss sovereingty.

Barack Obama campaigned for president in 2008 partly on a platform of trying to restore America's "respect in the world." Voters were told that America would reach out and try harder to show our friendship with those in Europe, in particular.

So how is Obama proving his friendship with Europe?

By trashing the sovereingty of Switzerland. The United States is demanding that certain tax related data from clients by Swiss-based UBS be turned over to the Internal Revenue Service. If UBS does so, it would undermine Swiss's bank secrecy laws, and thus, their entire banking system. When a customer places money in a Swiss account, there is the implicit assumption that their data will not be turned over under any circumstances to authorities in other jurisdictions. If customers no longer believe that their banking related information is kept secret in Switzerland, customers will find other jurisdictions that are able to maintain such secrecy. As a result, a lot of Swiss's banks will have fewer deposits, more will fail, unemployment will rise, and the economy will suffer. What does Obama have against Switzerland?

Interestingly, Switzerland is considering passing a law preventing UBS from complying with the IRS mandates. As Reuters reports, this case is "souring diplomatic ties."

So much for the broken promise of Barack Obama trying to repair relations with the rest of the world.

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