The EU's Danish presidency said finance ministers are still holding out for the exchange of banking information with Switzerland.
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"We are sticking to our position that an exchange of information is the final position we are aiming at," Danish finance minister Mr Thor Pedersen said after his Swiss counterpart hit out at the EU for threatening sanctions.
Swiss finance minister Mr Kaspar Villiger said the EU's warning is "not justified" and that Switzerland's offer to impose a withholding tax on EU residents' bank accounts is in line with what certain member states are themselves adopting.
Some EU countries, including Luxembourg, are refusing to adopt a Europe-wide savings tax until third countries such as Switzerland and the US agree to equivalent measures.
Mr Pedersen conceded "political astuteness" will be required if the EU is to be able to adopt the proposal by the end of the year, as scheduled.
EU taxation commissioner Mr Frits Bolkestein warned that EU countries should not expect Switzerland to agree to harsher measures than they are adopting themselves.
Mr Bolkestein also said he has no negotiating mandate to seek the automatic exchange of information with Switzerland.
PA