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Calls for EU LuxLeaks inquiry rejected despite support

The push for a LuxLeaks inquiry committee has been blocked by the leaders of the European Parliament.

European Parliament's leaders have rejected calls for a full inquiry into Luxembourg's tax practices. Photo: <a href="">Shutterstock</a>

The push for a LuxLeaks inquiry committee was blocked today by the leaders of European Parliament’s political groups, who opted instead for a “special committee,” with less investigative power.

The committee will look into tax avoidance in Luxembourg, following the LuxLeaks revelations published by ICIJ and its media partners in November.

The story, published by ICIJ and its media partners only days after Jean-Claude Juncker’s mandate at the head of the European Commission began, disclosed that more than 300 companies had secured secret deals from Luxembourg that drastically reduced tax bills.

A petition calling for an investigation into the LuxLeaks scandal had gathered support from a quarter of the European Parliament members last month. 

“Apart from its ability to maximize political attention and pressure, an inquiry committee provides the strongest basis for gaining access to official documents from national authorities, a key provision as taxation matters remain in member states' hands,” said Sven Giegold, spokesman for the European Green party, which called for the inquiry. 

Philippe Lamberts, Co-President of the parliamentary group of the Greens, said he did not want a witch-hunt against Juncker, who personally signed those deals as prime minister of Luxembourg. “Our objective is the play the ball, not the man,” he told EU Reporter, “Let’s keep someone as head of the European Commission who has something to prove.”

Officially, the Conference of the Presidents followed advice from Parliament's legal service, which warned that the proposed full-scale inquiry was too vague. The legal opinion, signed by senior EU official Freddy Drexler, stated that the proposition “[failed] to specify the subject of the inquiry” and did not “clearly identify the alleged ‘contraventions’ or ‘maladministration',” as was reported by the Bureau of Investigative Journalism. But some MEPs claim the decision to deny a full inquiry was political.

“EU Parliament president [Martin] Schulz and the leaders of the EP's bigger political groups have taken a decision to block the proposed inquiry committee based on politics alone,” Lamberts said in statement. “There are no legal or procedural obstacles, which could not be easily solved.”

He deplored the downgrading of the European Parliament’s response, but acknowledged that this was the second best option. 

The setback was not a surprise. European Parliamentary inquiries are extremely rare, and they can only be set up for investigative breaches or misapplication of EU law. There have only been three cases in the 35 years of the Parliament’s history, the last one being in 2006. 

In parallel to the work of the European Parliament, the Commission will keep investigating the tax regimes of certain EU states. An investigation was launched a little less than a year ago into the taxes paid by multinationals such as Apple and Starbucks in Ireland, the Netherlands and Luxembourg.

Earlier this week increased scrutiny fell upon Belgium. The Commission announced it would investigate whether the country participates in aggressive tax planning, allowing multinationals to deduct as much as 90% from their tax bills.

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