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8th Aug 2020

Greens get cross-party support for LuxLeaks inquiry

  • Juncker's time as Luxembourg PM overseeing the tax regime keeps haunting him (Photo: consilium.europa.eu)

The Greens in the European Parliament on Wednesday (14 January) managed to gather enough signatures to formally ask for an inquiry committee into tax evasion and tax avoidance in the wake of the LuxLeaks scandal - a series of leaked Luxembourg tax rulings exposing how big corporations paid as little as under one percent tax.

The big groups in the European Parliament - the centre-right European People's Party and the Socialists - had so far shielded former Luxembourg PM and current EU commission chief Jean-Claude Juncker from such an inquiry.

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Juncker last year sailed through a confidence vote in the European Parliament on the matter and promised to close tax loopholes and bring about more tax harmonisation.

But the mood has shifted and several MEPs from the big groups, 31 from the Socialists and 20 from the EPP - the political family behind Juncker - signed the Greens' request. Liberals, Conservatives, the left-wing GUE group and Italy's Five Star Movement also signed the request.

A spokesman for Juncker was not available for comment on Wednesday.

German Green MEP Sven Giegold said it was "not easy" to gather the necessary signatures - 180 signatures or a quarter of the European Parliament - because they did not want to have members of the eurosceptic UK Independence Party or France's nationalist Front National on board.

"The fact that it is the pro-European forces in the Parliament that have supported the inquiry committee, and not the far right or UKIP, underlines that this is not an exercise in Europe- or Juncker-bashing but an attempt to ensure a credible EU response," Giegold said.

He noted that Juncker "obviously was for a long time finance minister and then prime minister of one of the key countries which are part of the tax evasion and tax avoidance scheme. Of course his role has to be looked at. But so should the roles of other ministers - for instance from the Netherlands or Ireland."

One of the German EPP members who signed the request, Markus Ferber, told this website that he does not consider this to be a sign that Juncker is losing support within his own political family.

"This is not about naming and shaming Mr Juncker, or Luxembourg alone. What Ireland and Netherlands did with their tax arrangements is even more severe," Ferber said.

He said he hopes the committee will be appointed, as it still needs the approval of European Parliament group leaders and the parliament as a whole.

"This is about creating pressure on member states, since laws in this area are agreed by unanimity. We have to make the problems public, we have to press for fair rules for everyone, for tax justice," Ferber said.

Socialist leader Gianni Pitella said the "best way" to tackle unfair competition would be a legislative report in the economics committee, but was ambivalent on whether an inquiry committee should or should not be created.

"An inquiry committee can only look at past law-breaking. We want to prevent possible new Luxleaks cases in the future. Therefore, we are confident that the inquiry committee will work cooperatively with the economic affairs committee," Pitella said in an emailed statement.

EPP group leader Manfred Weber also tweeted an ambiguous statement: "We all share the same goal: we want more transparency and clarification on tax avoidance in the member states."

The EPP group "respects the right of a minority in the EP calling for an inquiry committee. We keep on working in a constructive manner," Weber added.

Liberals in the European Parliament, who last year had asked for an inquiry committee but then backed down from it and accepted the compromise of two special reports, half-heartedly supported the Greens' initiative.

"Alde has no problem with transforming the enquiry report into an enquiry committee. But on one condition: we should also continue our work on the report with legislative proposals in order to find a European solution against tax evasion and tax fraud. European citizens expect us to deliver results by changing tax practices in Europe," Liberal group chief Guy Verhofstadt said.

Magazine

LuxLeaks: An opportunity?

European Commission President Jean-Claude Juncker was buffeted by the LuxLeaks revelations just days after he came to office. Yet the longterm effect may be beneficial.

Juncker seeks to bypass vetoes on tax reform

EU commission chief Juncker has indicated he will try to bypass member states’ veto powers over fiscal issues when he proposes new laws to clamp down on tax avoidance.

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