EU summit: No energy against tax evasion and fraud

From left to right: Enrico Letta, Italian Prime Minister; David Cameron, UK Prime Minister. Yesterday in Brussels everybody wanted to meet with the new Italian Prime Minister. (European Council photographic library).

From left to right: Enrico Letta, Italian Prime Minister, David Cameron, UK Prime Minister. Yesterday in Brussels everybody wanted to meet with the new Italian Prime Minister. (European Council photographic library).

As the European Sting predicted early yesterday morning, the European Council meeting of 22 May, which regrouped once more the 27 EU leaders, turned out poor results on both subjects that occupied its agenda, namely ‘energy’ and ‘taxation’. Sting writer Maria Milouv wrote, “the European Council of the 27 EU leaders has only ‘energy’ and ‘taxation’ in its agenda today, with poor results expected on both accounts”. Reading carefully the account, produced after the meeting  by Manuel Barroso, the President of the Commission, about what happened yesterday in the Council, is very enlightening. But let’s take one thing at a time.

Before enterprising to understand what the 27 EU leaders truly decided yesterday on energy and taxation, and having this Barroso account as a guide for that, one should keep in mind that the Commission President would have never denounced an EU leaders’ gathering as a waste of time and money. Nor would have he accepted openly that the so many and widely diverging interests, kept this Council impotent and incapable of taking any ground breaking decision.

No energy surplus

Now turning to Barroso’s report about what the 27 leaders decided yesterday over ‘energy’, he starts with the usual self reassuring comments about Commission’s ‘excellent’ work and his own contribution, when he “presented at the beginning of the meeting different scenarios and policy recommendations”. However right in the next sentence of his press release Barroso accepts that, “The reality is that the global energy landscape is changing very quickly and not in Europe’s favour. But we should not be resigned to that”.

Reading the last few words one should understand that the EU is now practically ‘resigned’, because there are so many things happening in the world in the energy sector, which leave Europe at least stupefied if not paralytic. These comments coming from the President of the Commission after yesterday’s European Council are at least alarming. It is a clear statement that Europe as a whole is not able to take course changing decisions, because it is paralysed by the contradicting interest of its core member states.

Actually what could possibly have in common, Britain and Germany for example, in this crucial sector? In order to make sure that the 27 leaders didn’t take any serious and concrete investment promoting decision yesterday, one may also read the account of Wall Street Journal about that. The writer of WSJ didn’t try to figure what was the real meaning of the lengthy European Council conclusions text. Instead, the prestigious newspaper must have asked the “chief executives of eight leading energy utilities” what do they make out of this EU Council. All of them replied that they are disillusioned with the EU‘s fragmented energy markets and criticised the 27 leaders for not introducing any concrete investment favouring measure.

No doubt then that the 27 EU leading politicians did nothing to change the deteriorating situation of the EU’s energy sector. As a matter of fact this is not true for all member states, because most of them have made diverging strategic choices. Germany for example has long decided to cling to the Russian gas, while Britain’s options are open to the seas and France supports nuclear energy. Given that It is really impossible to find a solid common ground, in order to build a real EU common energy policy. Consequently the 27 leaders couldn’t decide anything important yesterday.

More tax evasion

Now what about the fight against tax evasion and fraud? Let’s follow once more Manuel Barroso. His disappointment is more obvious in this domain, and this is detectable even from the first sentences of his account. After observing that the fight against tax evasion is the least the European political leadership could do to restore some traces of ‘fairness’ in the old continent, he is obliged to recognise that. “This discussion didn’t start today. In fact, as the President of the European Council said, some of these issues are already on that table. Five years ago the Commission has put forward proposals for instance in terms of saving, the Tax Savings Directive. The reality is that until now these discussions have been more or less blocked”.

Not a word that those issues were unblocked yesterday, quite the contrary. Logically, if the President of the Commission is obliged to accept that this issue has been blocked by the politicians who rule the Union, the reality must have been much worse. For example Britain may have said it prefer to altogether abandon the European Union, than accepting to shut down its offshore tax havens in the Channel Islands, the Island of Man and many more other islands all over the world. If those money paradises stop feeding the London City’s money machine, Britain would be in a really desperate position. For this country the reality is that the world’s tax evasion and other kinds of black money generating activities are life blood.

In any case Barroso was obliged to find something in yesterday’s gathering of EU leaders, to justify it and be happy about. In view of that he wrote, “Indeed there was a reference to a principle that I believe it is critically important – the principle of automatic exchange of (tax) information at European Union level”. This is also an old story and goes like that. The European Commission is trying for a long time now to create a system of automatic and mandatory exchange of information between the 27 tax authorities, including information about bank accounts of EU citizens. With the pretext that Austria and Luxembourg deny it, the issue remains frozen. Barroso very carefully observes that “there was a reference”, over that. This is far from an agreement, if words still keep their meaning.

In short yesterday’s meeting of the 27 EU leaders was a sheer waste of time and money. Unless the leaders found the opportunity to discuss other burning issues, outside the official meeting room. Probably the creation of the European Banking Union was one of them. Surely the Italian Prime Minister, Enrico Letta, must have devoted all his energy to that.

the sting Milestone

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Comments

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