European Union finance ministers meet in Brussels today amid signs that the slowdown in the euro zone could be bottoming out. The Reuters euro-zone purchasing managers' index rose to 49.5 in November from 49.1 the month before, but it remained below the crucial level of 50, which denotes expansion in a sector.

The ministers will seek to resolve a dispute over proposals to clamp down on EU citizens who try to avoid paying tax by holding savings accounts in foreign countries.

EU member-states agreed two years ago that they would exchange information on cross-border savers so tax authorities in a depositor's homeland can levy taxes on any interest earned on the savings. But Luxembourg, Austria and Belgium insisted that, if they were to loosen their own bank secrecy laws, non-EU countries like Switzerland and the United States would have to agree on similar measures.

Switzerland has rejected the EU's demand for an automatic information exchange and has insisted on preserving its tradition of bank secrecy.

The Swiss have made some concessions, offering to levy a 35 per cent tax on the interest EU citizens earn on their savings in Swiss accounts and to pay part of the money directly to EU nations without revealing the account holder's identity.

The Swiss have also offered to exchange information with EU authorities where there is evidence of serious wrongdoing such as money-laundering or fraud. The country's financial sector has warned it could lose 20,000 jobs - 10 per cent of the total the sector employs - if it's forced to forfeit the competitive edge provided by secrecy.

But EU countries - led by Luxembourg and Britain - fear their own important financial services centres will be hit hard unless the Swiss adopt similar laws on information exchange.

Until now, Britain had argued for automatic exchange of information. At last month's ministerial meeting, Britain's finance minister, Mr Gordon Brown, said the "ultimate objective out to be the automatic exchange of information".

The UK Treasury said yesterday it had not changed its position. However, EU diplomats said Britain, which was instrumental in drawing up the current EU proposal, would not block a deal along the lines proposed by the Commission.

EU officials have hinted at possible sanctions against Switzerland - such as breaking off negotiations on other areas like immigration, or restricting capital flows - if there is no agreement.