Pressure increases on Juncker over Luxembourg tax revelations

Several European parliament groups have called for an urgent response to the revelations that Luxembourg has been assisting in large-scale corporate tax avoidance.

By Desmond Hinton-Beales

12 Nov 2014

Parliament's Alde group has argued for the formation of a temporary committee of enquiry to "investigate the issue of tax avoidance and tax evasion within the European Union".

In a meeting of parliament's economic and monetary affairs committee on Tuesday, Alde deputy Michael Theurer said, "In view of the recently published Luxembourg leaks, we have the duty to investigate the legality and the legitimacy of tax avoidance."

"If a cooperation between governments and big enterprises leads to tax avoidance, this has to be addressed in a broader context which goes beyond just Luxembourg" - Michael Theurer

The leak of around 28,000 pages of tax agreements and other sensitive documentation, which have been scrutinised by investigative journalists, has led to accusations of Luxembourg facilitating corporate tax avoidance on a massive scale.

The revelations have been particularly troubling for new commission president Jean-Claude Juncker, who has had stints as finance minister and prime minister of the Grand Duchy of Luxembourg during the time these tax deals were reportedly agreed.

Theurer added, "If a cooperation between governments and big enterprises leads to tax avoidance, this has to be addressed in a broader context which goes beyond just Luxembourg."

Fellow Alde deputy Cora van Nieuwenhuizen also added her voice to Theurer's, saying, "Just like small and medium-sized enterprises, multinationals have to pay their taxes."

"The behaviour of the Luxembourg government is an expression of what the internal market is really about: competition between the member states for the richest corporations at the expense of the majority of EU citizens" - Gabi Zimmer

Parliament's GUE/NGL group is collecting signatures for a "motion of censure" for Juncker's commission, saying the 'Luxleaks' scandal showed the Luxembourgish official's "involvement in widespread aggressive tax evasion while he was finance minister".

The motion of censure, outlined in rule 119 of the parliament's code of conduct, allows parliament to call on the commission to resign during its period in office.

The rule provides for a debate and vote to take place "at the latest, during the part-session following the submission of the motion", but not until at least 24 hours after the announcement of receipt of the motion, with the vote coming no earlier than 48 hours after the commencement of the debate.

GUE/NGL president Gabi Zimmer said, "This motion of censure is about holding Juncker to promises he has previously made: in his guidelines for the new commission he stated that efforts should be stepped up to combat tax evasion and tax fraud, and little under a few months ago he said he would try to put some ethics and morality back into the European tax landscape.

"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" - Philippe Lamberts

The 52-strong GUE/NGL group needs a total of 76 signatures from MEPs to pass the motion, requiring them to seek support from parliament's other political groupings. However, they have made it clear they will not be accepting support from the far-right.

"This issue is not just about Juncker," stressed Zimmer. "The behaviour of the Luxembourg government is an expression of what the internal market is really about: competition between the member states for the richest corporations at the expense of the majority of EU citizens.

"This is a result of excessive deregulation and non-control of capital flows - core components of the Lisbon treaty. We must move away from these policies immediately. The 'Luxleaks' scandal is just one very clear example of EU governments' acceptance of 'legal' tax evasion and fraud."

Meanwhile, parliament's Greens/EFA group has urged Juncker to take part in a debate on the EU's response to the 'Luxleaks' revelations during this week's mini plenary session.

Greens/EFA co-president Philippe Lamberts said, "With the credibility of the European commission president and the EU itself on the crucial issue of tax evasion at stake, circling the wagons would be the totally wrong response.

"Juncker will choose the moment himself to say what he has to say, either at the G20 [summit on 15-16 November] or at some other time" - Margaritis Schinas

"There has never been such concrete evidence of the extent multinational corporations go to avoid their tax responsibility but also the role of state actors in facilitating this. The response from the EU must now be swift and consequent.

"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.

"We are also calling for the parliament to adopt a resolution at this week's plenary session, clearly setting out the next steps to be taken. If the bigger political groups fail to support these proposals, as is rumoured, this would be a serious blow to the credibility of the EU institutions."

The commission president has yet to comment on the revelations - beyond denying a conflict of interest - with his spokesperson Margaritis Schinas saying that, "Juncker will choose the moment himself to say what he has to say, either at the G20 [summit on 15-16 November] or at some other time."

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