Controversial EU President Jean Claude Juncker is facing calls to resign amid allegations he presided over tax tourism when he was Prime Minister of Luxembourg.
Leaked documents seem to indicate that potentially illegal tax breaks were given to multinational corporations in order that they base themselves in the Grand Duchy.
The financial newswire Bloomberg has written an editorial entitled “Jean-Claude Juncker needs to go” which describes the Luxembourg politician as “a bad choice for the job” who has been “foisted” on member states by a power hungry European Parliament who know Juncker’s “ever further Union” will be the best chance for MEPs to be granted more power.
“Juncker was the prime minister of Luxembourg, a tiny nation with a population 1/17th the size of London’s, for almost two decades. In that time, he oversaw the growth of a financial industry that became a tax center for at least 340 major global companies, not to mention investment funds with almost 3 trillion euros ($3.7 trillion) in net assets — second only to the U.S…
“It’s telling that these arrangements have long been shrouded in secrecy. (Only last month did Luxembourg’s government drop its opposition to new EU rules on banking transparency.) Juncker, you could say, made his country rich by picking the pockets of other countries, including those of the European Union he is now mandated to serve.”
They add it is now “becoming clear now just how poor a decision” the appointment of Mr Juncker was.
The British Prime Minister risked problems with EU-British relationships when he was vocal in his disapproval of Juncker as President. His determination to stop the arch federalist from becoming the Head of the European Commission has left a sour taste in the mouth of Mr Juncker who has tried to disparage Mr Cameron publicly.
Margaret Hodge, the chair of the public accounts committee has said Mr Juncker should “come clean” and “certainly try to explain” the fiscal situation.
“How can we know he’s working in the interest of Europe when as prime minister in Luxembourg he has exploited populations in every European country and elsewhere for decades?” she told the Telegraph.
Germany’s finance Minister Wolfgang Schäuble, said the scandal showed that Luxembourg had “a lot to do” to meet global standards. He was supported by the French finance minister Michel Sapin who said the ‘comfort letters’ were “no longer acceptable for any country.”
“The union is struggling to emerge from the financial crisis and is increasingly seen as elitist, meddling and incapable of producing either fairness or growth. It cannot help this effort to have it overseen by a man who spent his career as a quintessential backroom dealer while building and running an international tax haven at other European countries’ expense” the editors write.
UKIP MEP Steven Woolfe echoed the calls of Bloomberg.
“Juncker made sure companies such as Pepsi, Ikea, Procter & Gamble, Heinz, JP Morgan and FedEx could enjoy the fantasy life of the Grand Duchy of tax avoidance. Meanwhile, the rest of the unelected Brussels have loaded austerity onto working people and small and medium businesses across the EU.
“It is no surprise these are some of the multinationals which insist Britain must stay in the EU. They see the protection of their gilded tax breaks in Luxembourg as one of the benefits of supporting their friends at the top of the EU.”