Juncker on defensive in censure motion over Luxembourg tax schemes

If you want me to go, I will, says European commission head as far-right MEPs denounce his record on corporate tax avoidance

Jean-Claude Juncker’s fitness to head the EU’s executive for the next five years came under lacerating attack in the European parliament on Monday evening, with British, French and Italian far-right and populist leaders denouncing his record in facilitating massive corporate tax avoidance when governing Luxembourg for almost two decades.

Juncker became president of the European commission at the beginning of the month only to disappear for a week after disclosures in the Guardian and other newspapers on Luxembourg’s record in enabling multinationals to minimise their tax exposure while earning billions in profit elsewhere in the EU.

The entire new European commission was obliged to attend last night’s session in Strasbourg for the unusual censure motion, at which Juncker sought to defend himself by declaring he was “no friend of big capital”.

“Mr Juncker, you are the worst image of this Europe. If you had a crumb of dignity you would resign,” said Marco Zanni, an MEP from Beppe Grillo’s Five Star movement, which organised the motion, backed by a tenth of the parliament including Ukip and France’s Front National.

Juncker said the “problem is not peculiarly Luxembourg, it is Europe” and blamed the scandal of multinational tax avoidance on the reluctance of national governments to harmonise corporate tax rates.

The details of Luxembourg’s record as a centre for tax avoidance came in leaks of more than 28,000 documents that revealed how the authorities, headed by Juncker, reached agreements with more than 300 global companies allowing them to minimise their liabilities.

Juncker voiced resentment that his entire team of 28 commissioners was being put on the spot by the censure motion, throwing down the gauntlet to the far right. “If you want me to go, say so and I will leave,” he threatened.

Despite the damage to Juncker’s credibility the leaders of the biggest caucuses in the parliament, the Christian and social democrats, made plain that they supported him and sought to use the debate to turn their fire on the anti-EU far right.

“There will be an overwhelming majority for Juncker,” said Manfred Weber, the German Christian democrat who heads the biggest party group, the European People’s party.

Gianni Pittella, leader of the social democrats, warned that bringing down Juncker would cost Europe months of wasted time and deepen the economic and unemployment crisis.

Gabi Zimmer of Germany’s hard-left Die Linke said 22 of 28 EU countries operated tax avoidance schemes similar to Luxembourg’s, if not on the same scale. But she blamed the commission chief for encouraging the practices: “It’s the Juncker system, that’s the problem.”

Rebecca Harms, the German co-leader of the European Greens, made clear that they would not make common political cause with the populist far right, but said it was up to Juncker to deal with his own credibility issues. “Dark skies are looming … This entire commission will be damned.”

Marine Le Pen, France’s presidential hopeful and leader of the National Front, complained that ordinary working French people were paying higher taxes because of the avoidance schemes next door in Luxembourg.

“Everyone in Luxembourg is laughing all the way to the bank,” she said. “Luxembourg’s wealth is due to the impoverishment of other EU countries … No one believes you are going to undo what you did in the past,” she told Juncker.

Juncker strained to maintain his calm.

“May I ask you to stop insulting me,” he complained. “I would rather get on with my job.”

The censure motion, to be put to a vote on Thursday, is highly unlikely to get the two-thirds support it would need to pass.

The Strasbourg debate came as PwC confirmed that Luxembourg’s prime minister, Xavier Bettel, was attending the official opening of the firm’s new 30,000 sq m office building, Crystal Park, in Gasperich, the southern part of Luxembourg City.

The finance minister, Pierre Gramegna, had been due to attend but a spokesman would not confirm his presence. Journalists were initially invited to the ceremony, where Crown Prince Guillaume had been due to be guest of honour, but PwC said the event was now a private occasion.

A spokesman confirmed that Prince Guillaume was no longer expected to attend. “It’s a private evening,” he said. “We are not answering any [further] press inquiries for that event.”

In the aftermath of the tax leaks scandal Gramegna has been on the defensive, telling a meeting of European finance ministers: “We are a country that wants to combat abuse … If we want to find solutions to this issue we have to tackle it together.”

He has also described the affair as “the worst attack Luxembourg has experienced in its history”.

Meanwhile, Luc Dockendorf, a Luxembourg diplomat with the United Nations, emerged as one of the few figures within the Grand Duchy establishment to voice criticism of the country’s record on taxing multinationals.

Writing in the Luxembourger Wort, a paper traditionally supportive of Juncker, he and Benoît Majerus, a historian at the University of Luxembourg, said: “We’ve been living at the expense of others. Not just other states, but other people, like ourselves, who have been paying their taxes, while corporations in their own countries have been dodging them. It is no longer possible to pretend that the Luxembourgish model has no negative consequences for other countries.”

Reflecting on the lack of coverage critical of Luxembourg’s record in the country’s domestic media, Majerus and Dockendorf wrote: “In the words of American author Upton Sinclair, written 80 years ago: ‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it!’”

• This article was amended on 24 November 2014. An editing error seemingly attributed quotes critical of the Grand Duchy’s tax policies to Pierre Gramegna, Luxembourg’s current finance minister, when they were instead made in a newspaper comment piece by Luc Dockendorf and Benoît Majerus.


Ian Traynor in Brussels and Simon Bowers

The GuardianTramp

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