Juncker tax scandal fails to gain heat in European Parliament

Luxembourg's then-Prime Minister Jean-Claude Juncker testifies before the European Parliament's Committee on Economic and Monetary Affairs in Brussels in this 10 January 2013 Image copyright Reuters

You might call it Jean Claude Juncker's "put up or shut up" moment. Addressing his critics in the censure debate brought against him in the European Parliament on Monday, the president of the European Commission, threw down his challenge: "If you want me to go, say so and I will leave."

Only it wasn't quite as dramatic as it sounds.

The trouble with this scandal is that it hasn't caught fire. It's not going to force Mr Juncker out of office. And it doesn't look like that's going to change, without some new twist that ties the former Luxembourg prime minister more directly to something illegal or immoral.

The details that have emerged in the so-called Luxleaks documents have put Mr Juncker in an uncomfortable position.

As Steven Woolfe, a European Parliament member from the UK Independence Party (UKIP), put it in the censure debate: "This is an ugly tax scandal that will not go away. Mr Juncker... while you were leader of Luxembourg, you permitted 240 multinationals to enter in aggressive tax avoidance."

The trouble is that's not quite enough to force Mr Juncker out.

'Cynical political game'

Mr Juncker's defence, when he finally made it public two weeks ago, rested on several points.

First, nothing that happened in Luxembourg was illegal; second, the problem arose because other countries had higher tax regimes not simply because Luxembourg had a low-tax one; third that, in his new job, he now wants to make it harder to play the system, he wants European nations to swap more information about what tax companies are paying in different jurisdictions.

Marine Le Pen, the leader of France's Front National Party (FN), which helped UKIP bring the censure motion, was deeply sceptical.

"Mr Juncker, nobody could really believe you are going to work hard to undo what you've been working on for years," she told the parliament.

Image copyright AFP
Image caption French far-right leader Marine Le Pen's National Front party is backing the no confidence motion

"It would be like appointing Al Capone as head of the ethics committee! You are a very good example of the monster the EU has become! You have become the symbol of the Europe of fraud and greed, that ensures the poor suffer to the advantage of the rich," she added.

European debates can be colourful. But the eurosceptics in UKIP's EFDD grouping and the FN who have brought this censure motion are hobbled by the fact they do not have much broader support in the parliament.

Guy Verhofstadt, of the Alliance of Liberals and Democrats, observed acidly that "this is nothing more than a silly and cynical political game being played by Mrs Le Pen and Mr [Nigel] Farage".

Mr Verhofstadt said the temporary coalition with the FN to bring this censure motion was a sign of UKIP's true nature.

"This is proof of the fact that UKIP is a hideous, racist, xenophobic, Islamophobic party. These are not my words, but the words of the founder of UKIP, Mr Alan Sked himself," said Mr Verhofstadt.

Image copyright AFP
Image caption Belgium's Guy Verhofstadt described the censure vote as a "little game" played out by UKIP and the FN

"Your group is not at all interested in solving international tax avoidance," he added.

"...Let's go back to work, and let's vote against this stupid motion!"

In fact just 76 MEPs out of 751 supported bringing the motion. When it's finally put to a vote on Thursday, the censure has no chance of succeeding.

Instead what Mr Juncker will rely on is the fact that before then, on Wednesday, he is unveiling his 300bn-euro plan to kick-start investment, growth and jobs in Europe.

The majority of MEPs in the parliament agree with Mr Juncker in seeing this task as the priority.

They believe the sponsors of the censure only want to damage the EU, not tackle tax avoidance. So the majority have no desire to bring down Mr Juncker less than a month after voting him and his team into office.