Tuesday

26th Sep 2023

EU parliament downgrades 'LuxLeaks' probe

The leaders of the largest political groups in the European Parliament on Thursday (5 February) downgraded a proposal to set up an inquiry committee on tax avoidance and fraud by multinationals.

The original plan, put forward by the Greens and backed by over 190 MEPs in January, proposed setting up an inquiry to investigate tax rulings in member states.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Lamberts: 'EU Parliament president Schulz and the leaders of the EP's bigger political groups have taken a decision to block the proposed inquiry committee based on politics alone' (Photo: © European Union 2015 - EP)

The rulings - which, in the case of Luxembourg, were put in place while European Commission president Jean-Claude Juncker was its prime minister and which came to be known as "LuxLeaks" - allow large firms to pay very little tax and in some cases less than one percent.

Party leaders in the EP’s “conference of presidents” met to discuss the merits of the proposal, which required their backing before it goes to vote in the plenary next week.

But the centre-right EPP group, centre-left Socialists, the liberal Alde faction, and the conservative ECR group opted for a weaker “special committee”.

The decision was based, in part, on a non-binding negative recommendation from the parliament’s legal services, which deemed the original proposal legally unsound.

"What is more important, this special committee will be in a position to propose legislative solutions," said Italian MEP Gianni Pittella, leader of the centre-left socialist group.

Liberal group chief Guy Verhofstadt said the special committee means "the parliament will be better able to enquire and propose solid solutions."

The Greens say a special committee is less obtrusive than an inquiry because it has no right to demand tax documents from national governments.

Access to the national documents are seen as crucial for investigators who want to hold finance ministers and others to account for rerouting billions of euros of tax revenue away from national coffers in times of economic crisis.

Belgian Green co-president Phillipe Lamberts accused the opposing party leaders of staging a coup.

“They had prepared their coup and their coup was a special committee,” he told reporters.

A draft technical note dated 30 January on the conference of president meeting already spoke of setting up a special committee.

“It may be an administrative lapse, but probably the person who wrote the technical notes had special prescient skills where they could, five days before the legal advice of the European parliament, come to the conclusion that the legal advice would conclude negatively,” he noted.

Lamberts said there is no legal or procedural obstacles that could not be resolved, noting that it is a matter of political will.

The Greens proposed a revised mandate to counter the points from the parliament’s legal services. But it too was shot down.

German Green economic and finance spokesperson Sven Giegold described the conference of presidents’ procedure as an “assault on European democracy.”

Giegold said he was furious that a minority of MEPs was denied an enquiry by party leaders. The decision, he said, should have been taken at the plenary instead.

Fewer tools

“We have less tools now with this special committee because we will not get the same visibility and we will not get the same access to documents,” said Giegold.

Giegold, along with German far-left MEP Fabio De Masi, are now threatening to take the case to the Luxembourg-based European Court of Justice.

The plan is to challenge the conference of president decision on denying the inquiry at the top EU court.

The special committee will produce an own initiative report and a legislative report.

The enquiry report will examine the member state fiscal practices and the legislative report will table a proposal to the commission on tax evasion and tax avoidance.

Court charges Luxleaks reporter over leaked documents

The French journalist who broke the Luxleaks corporate tax avoidance scandal has been charged with leaking documents held by accounting firm Pricewaterhouse Coopers by a court in Luxembourg.

Agenda

Spain's EU-language bid and UN summit This WEEK

While the heads of EU institutions are in New York for the UN high level meeting, Spain's EU presidency will try to convince ministers to make Catalan, Basque, and Galician official EU languages.

Latest News

  1. EU trade chief in Beijing warns China of only 'two paths' forward
  2. Why should taxpayers pay for private fishing fleets in third countries?
  3. Women at risk from shoddy EU laws on domestic workers
  4. EU poised to agree on weakened emission rules
  5. China trade tension and migration deal This WEEK
  6. Europe's energy strategy: A tale of competing priorities
  7. Why Greek state workers are protesting new labour law
  8. Gloves off, as Polish ruling party fights for power

Stakeholders' Highlights

  1. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  2. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  3. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  4. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us