Tuesday

5th Dec 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.

Opinion

Can Green Deal survive the 2024 European election?

Six months ahead of the EU elections, knocking an 'elitist' climate agenda is looking like a vote-winner to some. Saving the Green Deal and the EU's climate ambitions starts with listening to Europeans who are struggling to make ends meet.

Latest News

  1. EU nears deal to fingerprint six year-old asylum seekers
  2. Orbán's Ukraine-veto threat escalates ahead of EU summit
  3. Can Green Deal survive the 2024 European election?
  4. Protecting workers' rights throughout the AI revolution
  5. Russia, the West, and the geopolitical 'touch-move rule'
  6. Afghanistan is a 'forever emergency,' says UN head
  7. EU public procurement reform 'ineffective', find auditors
  8. COP28 warned over-relying on carbon capture costs €27 trillion

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  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

Join EUobserver

Support quality EU news

Join us