10 Jan 2013

Inquiry into French budget minister finances

6:10 am on 10 January 2013

against budget minister Jerome Cahuzac. He denies the allegations.

Prosecutors in France have opened a preliminary enquiry into accusations of tax evasion

against budget minister Jerome Cahuzac.

French media reported last year that Mr Cahuzac held a bank account in Switzerland for more than 20 years.

Mr Cahuzac is the minister leading the government's efforts to fight tax evasion.

He denies the allegations and is suing for defamation. The BBC reports he has welcomed the investigation which he said would prove his innocence.

The story has dominated French media over Christmas and the New Year.

Mr Cahuzac told parliament in December: "I don't have, I never have had, accounts abroad."

France's budget deficit is running at close to 5% of GDP. The BBC reports one measure to plug the gap is the imposition of a new 75% top rate of tax on those who earn more than 1 million euros per year.