Page last updated at 10:16 GMT, Thursday, 7 May 2009 11:16 UK

German minister angers Luxembourg

German Finance Minister Peer Steinbrueck
Mr Steinbrueck's blunt language has riled other neighbours too

A diplomatic row has erupted between Germany and Luxembourg after a German minister compared Luxembourg's banking secrecy to practices in Burkina Faso.

The Luxembourg parliament passed a unanimous resolution on Wednesday condemning the remarks by German Finance Minister Peer Steinbrueck.

In March he offended Swiss politicians by comparing the campaign against tax havens to a Wild West cavalry charge.

Burkina Faso, in West Africa, is not listed among the world's tax havens.

Speaking in Brussels on Tuesday, Mr Steinbrueck referred to a Berlin conference on tax havens planned for next month, saying: "Naturally I'll invite them to the follow-up conference in Berlin: Luxembourg, Liechtenstein, Switzerland, Austria, Ouagadougou."

The conference is under the auspices of the Organisation for Economic Co-operation and Development (OECD).

Burkina Faso hits back

Ouagadougou is the capital of Burkina Faso, whose ambassador to Germany, Xavier Niodogo, has also condemned Mr Steinbrueck's remarks.

The Sueddeutsche Zeitung news website quoted Mr Niodogo as saying "our rules fully conform to international standards".

"We object to Burkina Faso being named alongside alleged tax havens. We'll ask Mr Steinbrueck to explain why he mentioned Burkina Faso in this connection - and if necessary demand an apology," he said.

Luxembourg's Foreign Minister Jean Asselborn said Mr Steinbrueck "really seems to have descended to the level of the beer hall".

The parliament resolution called Mr Steinbrueck's words "an attack on the exemplary character of relations" between Germany and Luxembourg since World War II.

For more than a year Germany has been especially outspoken about banking secrecy in some neighbouring countries - notably Liechtenstein, Luxembourg and Switzerland.

The German government holds banks in such "tax havens" partly responsible for a shortfall in federal tax revenue, because they are used by some wealthy Germans.

The economic crisis has fuelled Berlin's concern to replenish state coffers, amid a sharp rise in unemployment and expenditure on welfare benefits.

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