The survival of a hard-won European Union deal on taxation of savings hangs on a meeting of EU ambassadors tomorrow, to be chaired by the Irish presidency.
At stake is one of the most controversial agreements concluded between EU states which would oblige states to disclose to each other the income gained from investments made by someone resident in another EU state.
The finance minister, Charlie McCreevy, said yesterday after chairing a meeting of his counterparts from the other EU states that they were still determined to reach agreement with non-EU countries to introduce equivalent measures.
This is deemed a pre-requisite if the new rules are to enter into force in January next year because otherwise, it is feared, money currently invested in EU banks would be shifted invested outside the EU.
To keep the deal alive, the EU has to reach an agreement with Switzerland.
Although the terms of a deal on taxation were agreed between the EU and the Swiss last year, the Swiss have been holding out to win concessions in other negotiations.
They particularly want a deal to permit them to join the Schengen travel area, but are not happy with the terms being offered by the EU.
At yesterday's meeting of finance ministers, Luxembourg's Mr Jean-Claude Juncker, who is both finance minister and prime minister of the grand duchy, set out his objections to a deal with the Swiss on Schengen.
Of all the EU states, Luxembourg has long been the least enthusiastic about the tax package, aware that the new tax regime would reduce the attractiveness of Luxembourg banks to German and Belgian investors.
The finance ministers decided yesterday to put off until July a decision on whether to issue a warning to Italy about the risk of its budget deficit exceeding the 3% of GDP ceiling laid down in the EU's Stability and Growth Pact.
The European Commission had proposed issuing an "early warning" but the Italian finance minister, Mr Giulio Tremonti assured the council he was taking steps to keep the deficit below 3%. Mr McCreevy said there was "broad consensus" to postpone a decision until July 5th.
