OPINION
VICTORIAHATTERSLEY
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A bumpy start Jean-Claude Juncker and the art of staying cool.
IT
would be fair to say that the new president of the European Commission, Jean-Claude Juncker, has not had an easy first week on the job. Facing, as he does, opposition from recalcitrant Brits – not to mention the furore surrounding the recent tax surcharges and controversy relating to his former position as prime minister of Luxembourg. The news that Brussels has ordered the UK, Italy, the Netherlands, Greece and Cyprus to pay extra surcharges to the EU budget within weeks has already caused foot-stamping manifestations of outrage from British prime minister David Cameron. Britain’s own surcharge amounts to an extra £1.7 billion, apparently owing to its relative prosperity. (Even if said prosperity comes partly from factoring in illegal activities like drug trafficking and prostitution). “If people think I am paying that bill on 1 December, they have another think coming,” he stormed terrifyingly to an assembled crowd of reporters in Brussels – who we can only imagine were quaking. It is perhaps understandable that he feels under pressure to put on a good show of defiance – especially given his recent humiliation over his largely ignored opposition to Juncker’s appointment – but I would suspect that nobody really envisaged that the UK would be paying the full sum in December anyway. And so, indeed, would appear to be the case. The UK has ostensibly been rescued by none other than Chancellor of the Exchequer George Osborne. He rode in to Brussels like a white knight and returned bringing peace with honour. He had, he said, agreed to hand over just £850 million to the EU. Furthermore, the bill will be paid in two separate transactions in 2015, giving the UK government 12 more months to stump up the cash. But how did he manage to arrange for the bill to be halved? Or, more to the point, has he in fact halved it at all? Some of the
more uncharitable souls were immediately sceptical of Osborne’s assertion. And rightly so, as it turns out. Treasury aides have now conceded that Britain will in fact pay the £850 million whilst also returning the rebate cheque to Brussels. In other words, the full £1.7 billion will still be paid, just not immediately. Put in this light, Osborne’s negotiating skills are something of a chimera. And of course the UK is not the only country to have had its feathers ruffled by the surcharge. The Netherlands, Italy, Greece and Cyprus have also been on the receiving end of some eye-watering bills. So not only has Juncker been obliged to square up to David Cameron over the issue, he has also faced the wrath of other leaders including Italian prime minister Matteo Renzi. He recently insisted to Mr Renzi that “I am not the leader of a gang of bureaucrats,” to which Mr Renzi replied, “I insist on respect.” Already being referred to by wags in Brussels as ‘The Godfather response’. It is a little ironic, then, that during his campaign for the Commission presidency, Juncker declared his intention to be a ‘compromise machine’ – whatever that might mean. In fact, of course, he has been far blunter than we have come to expect from Commission presidents. His predecessor Jose Manuel Barroso was much more given to comments such as, “There is no stability without solidarity and no solidarity without stability.” Wars of words weren’t really for him – “Usually I don’t comment on the comments of others.” So far Juncker, on the other hand, is deliberately setting himself up as a man who is not to be intimidated. To David’s Cameron’s “I will not pay,” he countered: “I am not the type who trembles, in front of prime ministers or at any other time.” (Who is?) Even the mighty rage of Cameron did not, it appears, unsettle him. Neither have the wearyingly predictable slurs from the British tabloids about his ‘Nazi father-in-law’.
Thorny issue Perhaps it is the controversy surrounding Juncker from his days as the longserving prime minister of Luxembourg that has prompted him to put on a display of strength early in his presidency. The past week has seen French, German and Dutch finance ministers attack Luxembourg for allowing multinational companies to create complicated structures in order to avoid billions of dollars of tax. The calls for Luxembourg to put an end to the practice of arranging special deals to help corporations avoid tax came after a huge cache of 28,000 leaked tax papers from the tiny Grand Duchy revealed the country had been rubber-stamping tax avoidance on a well-nigh industrial scale. There is, therefore, a question mark over whether there is a conflict of interest between the EU’s investigations into Luxembourg and Juncker’s previous position. Sven Giegold, finance spokesman for the Greens in the European Parliament, insisted that “These revelations are a major blow to the credibility of new Commission president Juncker and his capacity to act for the public interest.” He went on to say that Juncker was “Directly complicit in this mass corporate tax avoidance. The Commission must now set out a comprehensive action plan against tax dumping. Only by doing so can Juncker begin the path to redemption and try to dispel the doubts about his conflict of interest.” Juncker himself has been conspicuously silent but apparently serene about the matter. His official spokesman was on hand to say that he did not feel under any pressure to explain how he oversaw changes to Luxembourg’s tax laws. Indeed, he said, “If he was a teenager I’d say he was cool.” Cool. Just like The Fonz. It remains to be seen whether Mr Juncker will continue to maintain this cool in the n months to come. Industry Europe 3
