Juncker 'won't apologise' over Luxembourg tax deals

Commission president Jean-Claude Juncker was booed in parliament as he faced MEPs following the 'Luxleaks' revelations.

By Julie Levy-Abegnoli

12 Nov 2014

Telling his audience that he was "not speaking as prime minister of Luxembourg, but as the president of the commission and former prime minister of Luxembourg", he was adamant that "no illegal practices took place".

He claimed that the tax rulings which he has been criticised for were "not a particular characteristic of Luxembourg, [but rather] something we find almost everywhere in Europe".

According to Juncker, "we are facing the consequences of non-harmonisation of taxes in Europe". He said that this was something his country tried to work on during its stints at the head of the council, with the implementation of harmonised VAT laws in 1991.

The commission president said "it is urgent that we act [against] unfair tax practices for companies [as] these practices are not sufficiently tackled in Europe". He added he was "making a commitment […] to act on this".

Juncker promised that the commission would "make a proposal for a directive and […] will do everything [it] can to encourage the council to adopt this directive", in order for all member states to "have the same basis of tax receipts".

"[The commission must] come up with a clear, broad definition of tax havens [and] revoke banking licenses of institutions guilty of tax evasion" - Gianni Pittella

He also vowed to "ensure that we have an automatic information exchange for tax rulings" and that he would work with Pierre Moscovici, the commissioner for economics and financial affairs, taxation and customs, on a global information exchange at the upcoming G20 meeting in Brisbane.

Juncker stressed that "the commissioner for competition [Margrethe Vestager] has a large amount of independence" and that he would not interfere in her investigation, pointing out that if he did, he would "lose all authority within the commission".

He underlined that he has "a duty to ensure that [this investigation] goes forward, but in order to do this [he needs] to have [MEPs'] trust".

MEPs take the stand

Following Juncker's speech, members of parliament were able to take the stand and speak directly to the commission president.

Manfred Weber, chair of parliament's EPP group, reminded his colleagues that "before the European elections [they] discussed at length how to deal with tax justice" and that this was not a new topic.

The German deputy views "tax powers as being a sovereign issue for member states" according to the Lisbon treaty and that therefore, "we are not talking about a breach of law".

He said he was "confident that Juncker can solve the problems" at hand.

Weber blamed member states for failing to take action against tax evasion, pointing out that it took "decades" for European finance ministers to tackle the issue of tax evasion on the part of private individuals.

The MEP added that he hopes Europe "will be able to deal with [this issue] more speedily and take initiatives to put a stop to tax evasion".

Gianni Pittella, chair of parliament's S&D group, praised Jean-Claude Juncker for his "sensitive and responsible" decision to face MEPs.

He said he felt "indignation for people who see that these companies aren't paying taxes in the country where they have been making profits […] and governments that are complicit with them".

"[We need] a special committee in the European parliament [so as to find] common ground between all the groups" - Guy Verhofstadt

He described the issue as "a world phenomenon" and urged European officials to put an end to these tax deals, as "in most cases multinationals aren't actually breaking the law".

Pittella urged the commission to "come up with a clear, broad definition of tax havens" and to "revoke banking licenses of institutions guilty of tax evasion".

The Italian MEP insisted that the S&D group would "support Juncker's commission if they try to implement these ideas, but member states are responsible too".

He added that a "weakening of Juncker's role would be a gift to Euroscepticism and Europhobia, and a call for inaction".

Kay Swinburne, a member of parliament's committee on economic and monetary affairs, urged her colleagues to "await the outcomes of [Vestager's] investigation before holding a witch hunt", saying "we should base our actions and debates not on leaks and not on part of the picture […] but on an investigation that reveals all the facts".

Swinburne believes "tax is a member state issue and for the EU to play a role it does not require further EU legislation".

Guy Verhofstadt, chair of parliament's ALDE group, called for the investigation to be "about [European tax] practices in general" rather than focused on specific countries.

He also requested the creation of "a special committee in the European parliament [so as to find] common ground between all the groups".

Gabi Zimmer, chair of the GUE/NGL, urged Juncker to "explain and make it fathomable why [he] availed [himself] of all opportunities to allow tax advantages for [his country] to be used".

"I'm not in charge of Luxembourg anymore and I won't apologise for what I've done for my country" - Jean-Claude Juncker

Philippe Lamberts, co-chair of the Greens/EFA group, said that he "wasn't surprised but […] still disgusted" with the 'Luxleaks' revelations, and that the alleged tax deals were "a fundamental violation of the social contract of Europe".

He stressed that "the crucial issue is harmonisation, it’s high time that member states stop their tax wars".

Juncker strikes back

Topping off the session with MEPs, Juncker insisted that he is "not in charge of Luxembourg anymore and won't apologise for what [he has] done for [his country]", adding that he had "never given illegal tax instructions".

He highlighted that he was "not doing this to escape responsibility" and that "clearly [he is] politically responsible" for the purported tax agreements.

He underlined his "complete confidence in Vestager" and his commission's commitment to "fight against tax evasion and tax havens".

Jean-Claude Juncker concluded by saying he was "in favour of an in-depth investigation in all countries".


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