Paradise Papers revelations push EU Finance Ministers to discuss tax evasion at EcoFin meeting

The European press, especially in France and Germany, granted wide coverage to the publication of the Paradise Papers. Le Monde Director Jérôme Fenoglio writes in the newspaper’s editorial that a new inquiry by the International Consortium of Investigative Journalists, which includes Le Monde, has revealed the tax optimisation secrets of multinationals and the very rich.

Newspapers, such as Estonia’s Postimees, Hungary’s Népszava, Italy’s Il Messaggero, The Netherlands’ Algemeen Dagblad and Romania’s Adevărul, publish the names of the people involved in the Papers’ revelations, such as Queen Elizabeth II, US Secretary of State Rex Tillerson, US Secretary of Trade Ross and people close to Russian President Putin. Moreover, more than 100 large companies, including Apple, Facebook and Twitter, appear in the papers.

The Guardian reports that politicians and tax authorities from around the world reacted angrily to the details of the Paradise Papers, with some pledging to use details of any press reports as the basis for investigations.

Several outlets, such as Il Sole 24 Ore, The Malta Times, Politis and Le Figaro, report that after this revelation, the EU Finance ministers have decided to add the issue of tax havens and tax evasion to the agenda of their monthly meeting; just as they did after the publication of the Panama Papers and the Luxleaks.

The Maltese newspaper notes that they will discuss the setting up of a blacklist of worldwide tax havens while Le Figaro recalls that the EU-28 have been struggling for two years to establish a common blacklist of tax havens.

France Info reports that, while arriving at the Eurogroup meeting yesterday, Commissioner Moscovici stressed that “these scandals have shocked public opinion. They show that there are still wealthy companies and individuals who are ready to do a lot, if not everything, to avoid paying the taxes they have to pay.” He added that the scandal is “good news because it helps raise awareness, notably within the EU member states, of the need to progress in the fight against tax fraud and tax evasion.”

Quoted by Le Figaro, Commissioner Moscovici also considers that “the opportunity to fight tax evasion has been presented to us on a platter by the Paradise Papers” and that “if we do not act now, this opportunity may be lost.” The EcoFin Commissioner is also quoted, for instance, in the Belgian and Bulgarian press.

The Guardian, Avghi, TSF Radio and ARD quote Vice-President Dombrovskis saying that the revelations “put renewed emphasis on the work to fight tax avoidance”.

Some outlets, such as Le Figaro and ARD, point out that the EU is trapped in a dilemma, as several EU Member States, which are classified as tax havens, are blocking EU reforms in the matter.

In related news, Denmark’s Information notes that Commissioner Vestager has worked to get big companies, including Apple, to pay taxes while Greece’s Avghi says that Commissioner Vestager congratulated and thanked the journalists who investigated the case, stressing that the relevant investigation contributes to the transparency and facilitates the tackling of tax evasion.

According to the European Commission’s estimates, corporate tax evasion alone amounts to €50-70 billion annually, adds the Greek outlet. Kleine Zeitung reports that Austrian Finance Minister Schelling called for sanctions against countries that refuse to accept the automatic exchange of data between the EU and the OECD. Eurogroup President Jeroen Dijsselbloem hopes for even more initiatives in the fight against tax evasion, also notes Kleine Zeitung.

Meanwhile, NRC Next reports that European countries are also negotiating with the European Parliament about the creation of a public register with names of stakeholders of companies. Next week, there will be a new round of negotiations. “The fact that the Paradise Papers are revealed now is very useful to me”, welcomes MEP Judith Sargentini (GroenLinks); quoted by the Dutch daily.

Among today’s reactions, Milena Hrdinková from the Czech Finance Ministry in Daily Mladá fronta DNES mentions the common list of non-cooperative jurisdictions in the tax area currently being prepared by the EU, highlighting that EU Member States should approve it. According to her, there is great political pressure to reform corporate taxaxtion and this is why the European Commission is looking into the matter.

Teresa Küchler critically writes, in an analysis article for Svenska Dagbladet, that while the European Commission attempts to impose new regulations for companies and funds, tax havens such as Malta, Luxembourg and Cyprus are hindering their attempts. Too many European countries benefit from tax evaders and they have no intention of changing. While the European Parliament wants to open company registries to reveal tax evasion, the Council of Ministers views this as a violation of integrity.

EU representatives can sing a song of complaint at first, but tax evasion continues as usual, laments Ms Küchler. Eric Bonse and Ingo Arzt highlight, in a Tageszeitung article, that more than 120 politicians from nearly 50 countries appear in the Paradise Papers. Measures taken by the OECD so far have proven ineffective because they are constantly watered down and never enforced, the authors argue. The EU is criticised for its “half-hearted” attempts to rectify this situation, they add.

In an opinion piece for Jornal de Notícias, MP Mariana Mortágua writes about the Paradise Papers, considering that the European Commission’s position is hypocritical. Ms Mortágua recalls that, when he was Luxembourg’s Prime Minister, President Juncker stood against a European tax reform and offered secret tax deals to multinationals. Ms Mortágua also recalls that countries such as Luxembourg, the Netherlands and Malta, are planning centres of tax evasion. Ms Mortágua claims that there are no good or bad offshores despite their transparency.