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Leaked tax deals damage Juncker’s moral authority to demand cuts

News item

Thursday 6 Nov 2014

‘Yesterday’s revelations that hundreds of multinationals secured secret tax deals with the government of Luxembourg deny Commission President Juncker any moral authority to lecture Member States on budgetary discipline’, Independent Dublin MEP Nessa Childers said today.

Ms. Childers was commenting on the revelations emerging from almost 30,000 leaked pages, documenting how big multinational companies saved billions of dollars in taxes by channelling revenues through Luxembourg.

Ms. Childers said:

“As Prime-Minister of Luxembourg over the past two decades, Mr. Juncker has presided over a taxation system that prides itself on its competitive nature, offering hundreds of ‘comfort letters’ to massive business conglomerates with favourable tax treatment.

“Yet, as chairman of the group of Eurozone finance ministers throughout the crisis, no comfort was offered to taxpayers. Working people were saddled with the bill for the financial train crash that was made possible by this kind of policy making, and accused of living beyond their means while having their pockets raided.

“Indeed, so competitive is his tax jurisdiction that some of these companies have had effective tax rates of less than 1 percent on profits declared in Luxembourg. One of them paid only an abysmal 0.25% on non-dividend income.

“As we suffer the consequences of austerity, terms such as Luxembourg Structure, Dutch Sandwich or Double Irish have gone from a bad joke to an outrage.

“As corporate heads laugh all the way to the banks we saved, they are joined by their political allies in power in a chorus that keeps on lecturing us about deficits, budgetary discipline and structural reform, which are all costing us in public services and welfare protection.

“We are urged to coordinate our budgetary cuts with our EU partners, and undermine our social models, while tax competition is hailed as a virtue in a twisted notion of national interest that actually benefits the interests of its advocates alone.

“Those of us who are not too big to fail or too big to tax are left with the bill, squeezed in a race to the bottom and accused of living beyond our means on top of all that.

“I will make sure to remind Mr. Juncker of this glaring hypocrisy every time he comes to Parliament to talk about budgetary discipline, and I expect the new Competition Commissioner to make full use of the leaked documents and vigorously pursue unfair tax treatment by any Member State involved.”


For more information contact:

Mario De Sa 00-32-474 08 80 19 (Brussels Office)

Bronwen Maher 087-784 1937