The Coronavirus crisis has prompted savers in Spain to move their money to banks in Luxembourg in fear that it will be confiscated by the Spanish government and used to plug the holes made on the economy by the pandemic.
Banking officials in the popular tax haven of Luxembourg have detected that thousands of Spaniards have opened bank accounts in the last few weeks and started relocating their wealth to the Grand Duchy’s banks.
It is believed that the transference started to increase at the end of March when the country’s Deputy Prime Minister Pablo Iglesias tweeted that “all the wealth of the country” is subordinate to the “general interest”.
It is thought that Iglesias was merely referring to article 128 of the Spanish Constitution, however, the statement only served to panic savers who took it literally and that Iglesias was referring to planned confiscatory measures.
Minister of Labour, Yolanda Díaz didn’t help the situation when on the same day she assured Spanish citizens that the government would prioritise “the general interest over that of the individual”.
A banking source in Luxembourg said, “We are up to work. The number of accounts opened by Spanish citizens has tripled. The trend started before the Tweet was sent, but has exploded since then”.
“We are having requests from clients to move the money away for fear of the Spanish political climate,” said the head of an international bank that asks for anonymity due to confidentiality.
Banking officials in Luxembourg say that the reason Spaniards are moving their money is to obtain the assurance that their savings will be protected by countries that provide guarantees.
Some of the private banks which have been receiving an increase in funds from Spain including Lombard Odier, Pictet, Julius Baer, Mirabaud, Quintet Private Bank and Andbank.
Furthermore, Luxembourg is not the only country money is being moved to. Switzerland has also received a substantial increase in money being transferred from Spain and other countries due to its location outside of the European Union.
It’s also not just regular savers who have been spooked by the comments. A president of one of the country’s largest textile companies in Catalonia has also relocated part of their wealth to the territories.