I’ve been seeing little hysterical bubbles popping all over the British press all week and finally, here’s what’s going on:

Telegraph – Liechtenstein and Europe’s taxmen, by Harry de Quetteville

Liechtenstein has lovingly carved out its reputation for secrecy since the Second World War. Its financiers are now fabled for their sorcery in keeping riches from the prying eyes of the taxman, and its banking industry has propelled it from near destitution to the affluence of today.

Recent news, however, makes grim reading for one of the continent’s richest nations. In the past few weeks, 10 countries have opened wide-ranging investigations into citizens whom they suspect of illegally sheltering assets from home taxes through the use of “foundations” in Vaduz, the Liechtenstein capital. It is a list that grows daily.

Britain is among them, with 100 people under suspicion of tax evasion. Given that the data on them was acquired for £100,000, and the high likelihood that they have squirrelled away an average of more than £1,000,000 each in undeclared income, this seems like an excellent piece of business for Her Majesty’s Customs and Revenue.

How is it Liechtenstein’s problem is Britons are breaking the law?

Having negotiated safe passage through the collapse of the Holy Roman Empire, eluded the clutches of Austria and Switzerland to remain independent, and been rebuilt after a wartime of carefully cultivated neutrality, Liechtenstein residents must have thought their worst days were in the past.

Far from it. Of all its travails, the ongoing tax scandal poses perhaps the most significant challenge to its existence. Willem Buiter, a professor of economics and former head of the European Bank for Reconstruction and Development, has proposed that “Liechtenstein should be given the choice of ending bank secrecy or facing annexation”.

Nice. At least we make ultimatums like that with murderous terrorist regimes. This is a bunch of European bankers. And we don’t annex them. “Deliver to United States authorities all the leaders of al Qaeda who hide in your land or share in their fate” sounds a bit better than “End your bank secrecy or face annexation.”

It took just one man, a single renegade, to throw the principality’s future into such jeopardy. Heinrich Kieber is thought to be watching the carnage he has wreaked from afar – possibly Australia.

Bathing in both the millions and the new identity that Germany’s spies were kind enough to hand him in exchange for the data he swiped from the Liechtenstein bank where he worked, he is now sitting extremely comfortably – unlike the wealthy Australians whose tax affairs he has exposed.

A computer specialist who was implicated in a fraudulent Spanish property deal in 1996, he makes an unlikely hero. Too unlikely for the Danes, whose tax minister, Kristian Jensen, yesterday described the affair as an “advanced form of handling stolen goods”.

“I think it’s a moral problem to reward a criminal for some information that he stole,” he said. “I don’t like this and I don’t think this ethic is the best way to ensure that taxes are paid correctly.” Like it or not, however, Mr Kieber’s revelations are having a huge impact.

Ah, bless those Danes.