Switzerland’s President Hans-Rudolf Merz has put on hold a tax deal with Italy further worsening a banking dispute between the two countries.

The move follows a series of raids by Italian police on Swiss banks across Italy last week. Swiss authorities have responded angrily at being singled out. A Swiss local government leader Filipppo Lombardi said: ‘‘We want Italy and other countries which are tempted to follow Italy’s example to know that Switzerland will not be walked over. Now, we will have to send a note to the European Commission to say Switzerland wants to negotiate with other EU member states, but these countries must behave correctly towards Switzerland.’‘ Italy suspects billions of illegally held euros, as much as 125 billion, are being held by Italians in Swiss banks to evade tax. But Switzerland has criticised Rome’s tough stance, which has included border police carrying out spot checks on business people crossing into Switzerland. On Tuesday, Italy’s ambassador to Switzerland was summoned to explain the police raids. In March, the Swiss government gave in to international pressure to moderate its banking secrecy rules in the global fight against tax evasion.More about: Banking, Italy, Switzerland

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