'With respect to the current tax policy questions that are broadly and controversially debated in Europe, we want to play our part in finding a reasonable agreement,' Mr Hasler said in a statement.

'Our aim is to achieve a successful conclusion of the comprehensive tax fraud agreement that is currently under negotiation,' he said. 'These negotiations are already well advanced. This anti-fraud agreement will apply both to Liechtenstein and to the EU and all its member states.'

Germany two weeks ago launched a probe of rich citizens suspected of stashing billions of euros in secret trusts in Liechtenstein to evade taxes and has shared this information with other nations.

Investigators in the United States, Britain, Australia, Italy, France, Sweden, Canada, New Zealand, Greece and Spain are among other countries now hunting for taxpayers hiding their money in Liechtenstein.

The tiny Alpine state, lying between Switzerland and Austria, is considered a tax haven by the Organisation for Economic Cooperation and Development, similar to Andorra and Monaco.

German Interior Minister Wolfgang Schaueble, at a meeting with his EU counterparts in Brussels attended by Hasler, said tax havens 'are not compatible with European integration.' He also made a veiled threat about an EU accord reached on Thursday on Liechtenstein's future entry into Europe's open borders area, which was sealed 'without any debate' at the meeting, according to one official.

The exact date of Liechtenstein's entry into the Schengen area - which allows passport-free travel between members - has not been set but has been closely tied to the adhesion of Switzerland, which is hoping to join in November.

Before that can happen, the other Schengen members must ratify the move.

'When we sign an accord, we basically have the intention of ratifying it,' Mr Schaueble said, but 'naturally the promise of Liechtenstein's head of government (on taxes) must be turned into action.' The tax fraud agreement being negotiated in parallel with the EU is seen as a counterweight to Liechtenstein's joining the open-borders zone.

'We open the borders with Liechtenstein but at the same time we boost cooperation on tax fraud to avoid any abuses,' one EU diplomat said. -- AFP