Germany’s Wolfgang Schäuble has said he will use his second term as minister for finance to push for a new fiscal balance between the EU and member states, and close loopholes allowing legal tax avoidance by corporations.

Dr Schäuble told the Bundestag yesterday that Germany was determined to "apply existing tax entitlements with greater consequence", though he admitted it was increasingly difficult for governments to squeeze global companies for tax revenue.

“The tax avoidance possibilities globalisation allows make it easy for finance markets to use optimally the different tax rules that exist.”

But he said Berlin would push for agreement on global tax rules at OECD and G20 level, and that he was hopeful the automatic exchange of data between European tax authorities would be agreed in the coming legislative period.

'Illusionary expectations'
"We have to be wary of illusionary expectations that cannot be met because, of course, the creativity to avoid [tax] is always great," he said. "But everyone agrees that the acceptance of our democratic systems depends on applying existing tax entitlements."

Greater co-operation on fiscal matters was key to continued acceptance of the European project and shared currency, Dr Schäuble added, calling for continued debate on striking the “right balance” between EU solidarity and “the freedom of every member state to set its own tax rates to drive competition”.

“We don’t yet have the right balance . . . but we are working on it,” he said.