* Deals to tax undeclared funds in secret Swiss accounts
* Germany must still ratify pact; opposition in Berlin strong
* Swiss may have referendum on bi-lateral agreements
By Andrew Thompson and Catherine Bosley
ZURICH, May 30 (Reuters) - Switzerland’s parliament gave the green light for tax pacts with Germany, Britain and Austria aimed at preventing tax cheats from stashing money in secret accounts, a decision that could pour billions of extra euros into strained state coffers.
Lawmakers in parliament’s lower house on Wednesday voted 108 to 81 in favour of the agreement with Germany, which will levy a retroactive tax of up to 41 percent. The deal, set to take effect in early 2013, has already been approved by the upper house.
For several years, Switzerland has been at loggerheads with the United States, Germany, Britain and other countries over wealthy individuals who have parked money in secret accounts to avoid taxes.
Banking secrecy is crucial to Switzerland’s $2 trillion offshore wealth management industry, and the Alpine state has refused an automatic exchange of information and is pursuing the strategy of a withholding tax to preserve secrecy.
“No longer can bank secrecy can’t be misused as a way for cheating on taxes,” Finance Minister Eveline Widmer-Schlumpf told parliamentarians.
Germany, whose citizens hold an estimated 150 billion euros in Swiss accounts, stands to net billions via the agreement.
But the pact has faced sharp criticism from Germany’s opposition Social Democrats (SPD), who say it is too soft on tax evaders, and it is still up for ratification in Berlin.
“REASON GETS UPPER HAND”
In passing the deals, parliamentarians in Berne took a pragmatic approach despite reservations the agreements could prompt people to move their wealth to rival financial centres.
German officials have also stoked tension with Switzerland by paying for stolen bank account data on CD and Swiss banks, among them Julius Baer had their offices in Germany searched.
“The displeasure may be great, but reason gets the upper hand,” said Lucrezia Meier-Schatz, a member of the centre-right Christian Democrats (CVP).
MPs approved the agreement with Britain by a margin of 109 to 81, while the pact with Austria was backed by 138 to 51.
In Berlin, Chancellor Angela Merkel government needs parliament’s upper house, which represents the states and where it lacks a majority, to agree to the law.
A spokesman for the German finance ministry said on Wednesday the ratification process could take until November.
In Switzerland, the bilateral deals could still be derailed by a referendum.
Christoph Blocher, MP and mastermind of the right-wing Swiss People’s Party (SVP) has been one of the most acerbic critics of the agreements. “It’s a further capitulation in a very transparent economic war,” he said during the debates.
Members of both the SVP and leftist Young Socialists said they want a referendum, Swiss television reported. That means they have now up to one hundred days to collect the 50,000 signatures needed for a plebiscite.
Despite passing international agreements, by a margin of 89 to 85 with five abstentions, the lower house voted against a bill that would have laid the groundwork for the withholding tax domestically. The upper house already passed that law, and the two houses will start a consultation process in coming days.
The outcome does not affect the bi-lateral accords.
Ultimately the fate of the Swiss-German tax deal will depend on the opposition parties in Germany. German states run by the Social Democrats (SPD) and represented in the Bundesrat have said they want to block the deal, which lets Switzerland preserve most client confidentiality, saying it is too soft on tax evaders. (Reporting by Andrew Thompson; editing by Ron Askew)