Juncker survives Parliament’s tax hot seat

Commission president unfazed as MEPs attacked him for Luxembourg’s policies under his rule.

A relaxed European Commission President Jean-Claude Juncker calmly dismissed allegations that he helped foster corporate tax avoidance in Luxembourg, during a hearing before MEPs in Brussels on Tuesday.

He instead proclaimed his ignorance over the Grand Duchy’s suspect tax dealings with corporations as he deflected critical questioning in the European Parliament’s committee of inquiry into money laundering, tax avoidance and tax evasion (PANA).

“I never talked to individual companies,” said Juncker, whose term as Luxembourg’s finance and prime ministers spanned from 1989 to 2013. “I wasn’t responsible for financial and business issues … I never discussed fiscal measures with a company.”

Parliamentarians in the committee had eagerly awaited Juncker’s hearing as an opportunity to interrogate the Commission president over his government’s “dodgy” tax policies. But Juncker remained unflappable throughout the exchange, occasionally cracking jokes in his responses to MEP questions.

His cool defense triggered a fierce response from the PANA committee’s Vice Chair Fabio De Masi, a German MEP of the United European Left, who insisted that Juncker had an “exceptional situation under your control” during his tenure in Luxembourg when it came to tax dealings with global corporations.

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Juncker remained unfazed. “You are talking about events in the past,” he said, adding that he was rarely informed on all corporate tax arrangements as finance minister. “Tax rulings are negotiated with tax authorities and not the ministers.”

He then pointed the finger at accountants, lawyers and bankers as the main culprits for promoting tax-dodging strategies for global companies.

This was the second time Juncker addressed the Parliament on the Commission’s fight against tax avoidance. MEPs first quizzed the newly elected Commission president three years ago in the wake of the LuxLeaks scandal, which revealed to what extent companies have gone to avoid paying their taxes in Luxembourg.

“[I’m] not the architect of the system,” he said during his 2014 hearing. “But I am politically responsible.”

Juncker sounded a similar note on Tuesday, acknowledging that the EU “was not always fair” when it came to corporate tax policies. “I believe in tax competition … but I’m focusing my attention on fair tax competition.”

The Commission president also firmly drew a line between the current climate of antipathy towards corporate tax avoidance and the attitudes of the past when “the world was very different” in his words.

Juncker even went on the offensive by highlighting a dozen initiatives that his Commission has proposed over the past three years — with more to come.

“We want to go further,” he said. “We will make further proposals on tax evasion, money laundering, and tax beneficiaries.”

In the end, Juncker’s performance left him unscathed, leaving behind frustrated MEPs as he exited the building.

“It is disappointing that Juncker has refused to accept responsibility for past mistakes or admit the error of his ways,” said the Greens’ Sven Giegold, who nonetheless saw some progress. “Juncker may be blind to the past, but he’s now made some concrete commitments for the future.”