Next week we expect Jean-Claude Juncker, the former long-standing prime minister of Luxembourg, to be nominated to the powerful role of President of the European Commission. The man who for many years defended one of Europe’s nastiest and biggest secrecy jurisdictions (or tax havens) now faces an important question.
Will he continue discreetly to find ways to represent the interests of Luxembourg against the ordinary citizens of Europe? Time will tell. For now, the Financial Times investigates a recent European investigation into the tax arrangements of various large multinationals, including practices of individual tax rulings by Luxembourg which are profoundly corrupting of markets and the business environment. The European Commission (EC) has asked Luxembourg to provide information it needs to complete its probe; Luxembourg, recalcitrant as ever, is refusing to co-operate. The EC has launched legal proceedings against the little tax haven to get the information. As the FT puts it:
“Foot-dragging by Luxembourg over an EU probe into questionable tax deals for multinational corporations has created a potential conflict of interest for the Grand Duchy’s former premier who is set to head the EU’s executive branch. . . . If Luxembourg refuses to comply, Mr Juncker could be faced with the embarrassment of continuing with infringement proceedings against his own country over tax rules introduced during his premiership.
This particular probe is going to be very awkward for him, as an EU official explains. But this is just one angle in what is potentially one hefty great long-running conflict of interest.