By Tommy Hansen
COPENHAGEN
A bid to win support for a vote of no-confidence against European Commission President Jean-Claude Juncker over reports corporate tax deals conducted in Luxembourg under his leadership has failed to win support among Members of the European Parliament.
Danish MEP Rina Ronja Kari, from the Danish anti-EU party People's Movement told the Anadolu Agency on Friday that she was looking to win support for a no-confidence motion against Juncker, who was Prime Minister and Finance Minister in Luxembourg during the years when deals to help large multinational corporations avoid tax were conducted.
The revelations published across European media outlets a day before by the International Consortium of Investigative Journalists (ICIJ) highlighted cases involving big name corporations like Pepsi, IKEA and FedEx having secured secret deals with Luxembourg which saved them billions of dollars in global taxes.
Observers and politicians said the massive leak of internal documents from PricewaterhouseCoopers, one of the world's largest accounting firms, may evolve to threaten the position of the newly appointed EC president.
Although the initiative to pose a no-confidence motion against Juncker had some support, many political leaders from Europe appeared to direct their criticism against the State of Luxembourg.
'A lot to do'
Danish MEP Jeppe Kofod demanded guarantees that Jean-Claude Juncker had no knowledge of wrongdoing during his time as Finance Minister and Prime Minister of Luxembourg, but added he found it premature to go for a no-confidence motion.
Wolfgang Schäuble, Germany’s Finance Minister, made an official statement saying that the revelations about Luxembourg’s secret tax deals showed that the Luxembourg had “a lot to do” to meet global standards and that the need of action was obvious.
Finance minister of the Netherlands Jeroen Dijsselbloem, also chair of the Eurogroup of all 18 finance ministers in the euro zone, told the British daily The Guardian that Luxembourg was breaching international tax standards.
“Many countries make agreements with companies to provide security. But these agreements need to comply with international standards. We still have some work here," he said.
French Finance Minister Michel Sapin told the newspaper the modus operandi of the tiny EU state “no longer acceptable for any country," and added: “I wish that, in a few years, we never have to talk about something like this again.”
The newly appointed EU Competition Commissioner, Margrete Vestager, also avoided criticism of Juncker in a brief statement, saying: “We have at this stage not yet formed an opinion about these rulings and a possible formal follow-up by the Commission."
'Detestable practices'
But in France, president of the Front National (FN) Marine Le Pen urged the European Commission President to resign, saying: "This practice sheds light on the detestable practices led for 18 years by the man who is now president of the European Commission, Jean-Claude Juncker, in this tax haven [Luxembourg] at the heart of Europe."
Margaret Hodge, chair of the British Government's Public Accounts Committee told The Guardian: “[Juncker has] just taken over the European commission, [yet] he’s presided over the biggest exploitation of European nations in his own little country for decades.”
Jean-Claude Juncker has not commented, but a spokesman told the international press at a meeting on Thursday that Juncker was "very serene", saying: “If he was a teenager, he would be described as "cool"."
A spokesman for the European Commission, Margaritis Schinas, said Juncker was “determined to enforce the rules” of the European Union in each of the bloc’s 28 member states.
At a press conference at the European Commission, Martin Schulz, President of the European Parliament, said that he was confident that the Commission would react if EU law had been breached.
He added: "What worries me most is the fact that the reported practices were manifestly legally possible in some countries. This reality means that we need to urge the Member States to work with us to end systematic tax evasion practices in Europe."
There was support from Juncker’s own group, the centre-right EPP:
Manfred Weber MEP, the Chairman of the EPP Group in the European Parliament, said: "“The EPP Group fully trusts and fully supports the European Commission in the ongoing investigation on schemes in Luxembourg and other member states opened by Commissioner Almunia and which Competition Commissioner Vestager will now be taking over."
Drastic tax cuts
According to the ICIJ, the leaked documents reveal how hundreds of companies arranged specially-designed structures with the Luxembourg tax authorities from 2002 to 2010.
Companies such as vacuum cleaner firm Dyson and Danish television company TDC worked with the Luxembourg tax authorities on arrangements which resulted in billions of dollars' worth of savings for the companies and a similar loss of taxes in the respective countries where they were based.
The legal – but secret - deals featured complex financial structures designed to create drastic tax reductions.
The companies allegedly involved names such as Pepsi, Ikea, AIG, Amazon, Accenture, Burberry, Procter & Gamble, Heinz, JP Morgan, Deutsche Bank and FedEx.
Documents from buyout firms Blackstone and Carlyle were also listed.
The EU Commission has opened investigations against other companies using similar tax arrangements in Luxembourg.
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