German tax fire

18 February 2008 By William Echikson

The Deutsche Post boss’s resignation for evading taxes is the latest in a series of scandals that suggest something is rotten in the state of German corporatism. The country needs to modernise its business practices and lower personal tax rates. At least heads are rolling now.

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Germany's tax scandal widened on Monday, with the finance ministry acknowledging a payment of at least E4bn for the information that led to the arrest of Deutsche Post Klaus Zumwinkel.

The data paid to a former employee of LGT, Liechtenstein's biggest bank contained a list of up to 1000 German nationals who may now face tax evasion charges. LGT is owned by the Liechtenstein principality's ruling family. Otmar Hasler, Liechtenstein's prime minister, visits Berlin tomorrow and Wednesday, meeting Angela Merkel, the German chancellor, and Peer Steinbrück, the finance minister.

Both right and leftwing leaders denounced the Deutsche Post leader, calling for tougher sentences for tax fraud. Business leaders must "be aware of their function as a model for society, said Economy Minister Michael Glos, in an interview with the newspaper Bild am Sonntag. Otherwise our social market economy will no longer be credible."

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