Luxleaks: An impact on Juncker as the EC head?

New head of the EC is under some pressure as Juncker’s Luxembourg was helping companies to avoid taxes. He did not address the questions so far. This is probably not something what could lead to his downfall, but would you say it might somehow influence the Juncker’s position as the EC President? Read few comments.

Doreen AllerkampAssistant Lecturer/Researcher, Faculty of Social Sciences, University of Mannheim

I don’t think it need be critical for Juncker, if he handles it well – after all, the whole “issue” is somewhat hypocritical. Every head of government will act in the national interest, it is what is expected of them. It is their default mode of operation, if you will. There is nothing wrong with that at all, even inside the European Council: even though, broadly speaking, this institution was once conceived to deliberate the grand questions of European integration in private statesmanlike fireside chats among heads of state and government and to provide “vision” for Europe, and even though it is not formally part of the EU’s legislative process, it has long since effectively become the EU’s highest and last instance of political decision making, of course.

So – nothing wrong per se with heads of government pursuing the national interest, in Luxembourg’s case including the benefits they reap from special tax incentives – after all, Luxembourg does not have as many options as bigger countries do. Indeed, in this context, it could be interpreted to be to Juncker’s credit that on top of all this, he repeatedly demanded concern for the European or common interest, as well – which is not any single head of government’s job inside the European Council (nor of their ministers at the lower Council levels), but that of the Commission, which is represented inside the Councils for that purpose, and – I would argue – to some extent that of the Council Presidency (rotating or not). So in this sense, his earlier advocacy of the European interest would serve to heighten his credentials for the European Commission Presidency, rather than being an indication of hypocrisy. This reading of the situation is facilitated by the fact that most of the time, Luxembourg’s national interest – like that of other smaller member states – would tend to be in line with the common interest. So it would not have been hard for Juncker, as the head of a small member state, to defend the common interest.

Now that the tax issue presents a situation where this overlap is not given, i.e., Luxembourg’s and the EU’s interest diverge, rather than converge, Juncker is in the interesting position of having to act against Luxembourg. And that is perfectly legitimate, too – it is *now* his job to do just that, and if he does it well, more credit to him. Indeed, once again it could be argued that it is to the Commission’s advantage to have somebody in charge who knows the case so intimately – again, if he does it well. That means, should a conflict of interest arise – because past wrong-doings are suspected – he must withdraw himself from the handling of “the case”, as it were. If he does it, and does not seek to interfere or protect old friends or indeed himself, he can emerge from the whole thing stronger than before. However, trying or even being seen to be trying to muddle the waters, as it were, might indeed undermine his current position. But I daresay there are few EU politicians who would emerge from such a level of scrutiny with a clean sheet, especially at the head of government level (and arguably, even the oh-so-appalled man on the street may have a clean sheet only because of a lack of opportunities where it comes to tax dodging). Hence the hypocrisy.

It is not surprising that voices inside the EP and elsewhere are critical – EU politics is highly politicised, Juncker is a Conservative politician with strong federalist leanings, and so everyone holding different views on one or the other of these dimensions will seek to exploit the situation politically.

Pavlos EfthymiouPhD Candidate in Politics and International Studies, St. Edmund’s College, University of Cambridge

It is true that Juncker is under tremendous pressure. But from what we have seen so far, it seems that what the companies were doing was unethical rather than illegal. Hence, we could agree that this is damaging to the image of the new EC President, but not catastrophic. It is manageable, but very unfortunate. But this shows, simultaneously the urgent need for deepening in the EU & the Eurozone to deal with issues such as tax avoidance more efficiently.

Alex Warleigh-Lack, Professor, The School of Politics, University of Surrey

I think this could be a devastating blow to Jean-Claude Juncker, if he’s found to have acted in breach of EU law. But I imagine that will be a long way off, if it happens. At the moment he can take shelter in the fact that other EU heads of government have been just as ready to pimp themselves out to multinational corporations, so he’s not on his own. Also, he can expect to be immune to attack from London, given our Prime Minister has recently spoken of his ‘moral duty’ to lower taxes. I think the thing to watch will be its impact on Juncker’s reputation and what that might to do the new legitimacy he has as Commission President after emerging from the Spitzenkandidaten process. Everyone knows he’s the consummate political insider, but these revelations could damage his appeal to the electorate, especially if the austerity measures continue.


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