The revelations that Luxembourg – with Jean Claude Juncker as prime minister – has been offering companies lucrative tax-deals made Parliament demand a debate with the commission president. He answered with a press briefing and by coming to Parliament.
With the phrase “we should step up our efforts to combat tax evasion and tax fraud”, the president of the European Commission Jean Claude Juncker promised exactly what the European Parliament expected and wanted when he started creating a new commission for the coming years.
His agenda – also including green energy, a stronger digital market and a more effective bureaucracy – proved to be just what Parliament wished, and they ended up accepting his commission with only the normal amount of controversy, just under a month ago. But since then, things have changed.
Lux-leaks, 28,000 documents proving that the Luxembourgish authorities with Juncker at the helm have been offering very generous tax-deals to multinational companies, have caused an uproar from Parliament. Some demanded that Juncker resigns and almost everyone in Parliament asked for a meeting with him over the revelations:
“We believe it is imperative that President Juncker takes part in this week’s European Parliament debate on the ‘Luxembourg Leaks’ revelations and addresses the EU-level implications,” as the co-president of the Greens in Parliament, Philippe Lamberts, said in a press release earlier this week.
Juncker fights back
Yesterday Juncker came forth for the first time to defend himself from the accusations that he was guilty of wrongdoing in his time as financial – or prime minister in Luxembourg. On the day of the Parliament demanded a debate, he used the weekly meeting with his commission to defend himself:
“In the course of my life I have sought greater tax harmonisation in Europe, for an example in 1991 under the Luxembourgish presidency when we were looking at VAT-rates, and I sought to have adopted have adopted the principle that the members of the EU would have an automatic exchange of information,” he said and made it clear, that the Commission still stood for a firm fight against tax-evasion.
Critics have called it a problem, that a member of his commission, the Danish commissioner for competition Margrethe Vestager, will be responsible for investigating the tax-deals in Luxembourg. But according to Juncker, that investigation is now between Luxembourg and her:
“There is no conflict of interest, when the commission launches investigations on state aid which relates to Luxembourg. I don’t really understand why the press is producing headlines such as Juncker vs. Juncker,” he said.
After his press briefing Juncker went on to repeat some of the same messages in the European Parliament, at the special session they had requested him to join. This appeared to prove somewhat enough to satisfy disgruntled Parliamentary members.
While the Social Democrats abstained from any personal attacks, the chair of the European People’s Party, Junckers own political group in the Parliament, was quick to exhonorate the commission president completely.
“I voted in favour of Jean Claude Juncker with full confidence, because I am confident that he can solve the problems that are on the table and I would like to say on the behalf of my whole group; we trust Mr. Juncker to be able to resolve the problems[of tax avoidance],” their leader, Manfred Weber, said.
But not all members of Parliament shared the forgiving feelings towards Mr. Juncker. the left winged group talked about Mr. Juncker making it “difficult” for them, the Greens called it a “fundamental violation of the social contract in Europe,” and the eurosceptic group EFD went as far as calling Mr. Juncker’s position the “definition of hypocrisy.”
Perhaps the most significant attack came from the liberal group ALDE’s chair Guy Verhofstadt. His group voted for the Juncker commision, but he made it very clear that his group’s confidence in Mr. Juncker was lower after Lux-leaks.
“If it [the tax-scheme used in Luxembourg] is in accordance with EU legislation then okay. If it is not in accordance with EU legislation then you know mr. Juncker, that you have a problem, and we will have to discuss it together and take the consequences of it,” he said and added that the investigation must be swift:
“It is impossible that this European Union continue with a shadow hanging over this European Commission for six months now. We already have a lame duck in Washington, it is not necessary to make a lame duck here,” he said and requested the investigation to be completed this year.
As it stands now however, Margrethe Vestager has not reported any plans to make the investigation on Mr. Junckers Luxembourg a fast one.
In this article, InEurope’s Coen van de Ven looks further into how countries need to fight tax-evasion.