EU leaders slammed on anti-tax evasion inaction and expensive energy

From left to right: Herman Van Rompuy, President of the European Council, greets cheerfully Angela Merkel, German Federal Chancellor and Francois Hollande, President of France. (Council of the European Union photographic library, 22/05/2013).

Only days after the 27 EU leaders gathered in Brussels on 22 May and decided that, “The supply of affordable and sustainable energy to our economies is crucial”, Eurostat, the EU’s statistical service, announced that, “in the second half of 2012 household electricity prices in the EU27 rose by 6.6% and gas prices by 10.3%”. Unfortunately, the 27 leaders had another peculiar idea at that meeting. They thought they had also taken effective measures against tax evasion of wealthy companies and individuals, at a time when working people duly pay taxes and social contributions when employed and starve when unemployed.

In case the 27 prime ministers and heads of states thought for a moment that they had really confronted tax evasion of the wealthy or  they had set the base for cheaper energy, the European Parliamentarians rushed to denounce them on both accounts. A press release issued yesterday by the Economic and monetary affairs Committee of the European Parliament reads like this: “MEPs were broadly critical of the outcome of last week’s EU summit on tax evasion and energy, as reported by Commission President José Manuel Barroso and European Council President Herman Van Rompuy on Tuesday. Some political group representatives felt the summit’s conclusions were “too little, too late”. Others said it had failed to address the real problems or to set any real deadlines for achieving stated aims”. Not one legislator had anything positive to say about the 22 May EU Summit.

In short the legislators accused the executive politicians for the inability to set the right rules for two very crucial issues, energy cost and tax evasion. Both those policy areas are directly related to overall competitiveness of the entire EU economy and also define the financial health of all state budgets. It was really a quite disappointing spectacle to watch the entire political leadership of the European Union to let down 500 million of European citizens.

Tax evasion untouched

Before the last meeting of the European Council, the European Economic and Social Committee, the consultative body of the European Union that gives representatives of Europe’s socio-occupational interest groups, and others, a formal platform to express their points of views on EU issues, implored the 27 leaders to take decisive action against tax evasion. The EESC memo reads as it follows: “The EESC is urging the Council to send out the right signal to the European public and to prove that Europe is able to tackle this fundamental issue. Tax evasion costs €1 trillion a year – €2 000 for each and every one of Europe’s 500 million citizens”.

Of course political leaders are not touched by such emotional statements from the citizens they are supposed to serve 24 hours a day. The 27 heads of governments and states were happy to reply to this demand that, “The European Council agreed to accelerate work in the fight against tax fraud, tax evasion and aggressive tax planning”. Nothing concrete whatsoever in it not even a hint to an effective policy plan to make that happen.

This is almost a mockery in the face of 500 million people. Only a small part of that €1 trillion annually could take Eurozone and the EU out of the present fiscal crisis and set the base for sustainable growth. But no, our leaders don’t prefer the easy solutions to growth and jobs. They want to see all of us sweat for €3.5 an hour.

Energy

The other burning issue, which was on the table of our political elite, energy, is also about growth and jobs. According to Eurostat, “In the EU27, household electricity prices rose by 6.6% between the second half of 2011 and the second half of 2012, after an increase of 6.3% between the second half of 2010 and 2011. Household gas prices increased by 10.3% in the EU27 between the second half of 2011 and 2012, after a rise of 12.6% between the second half of 2010 and 2011”. Those are facts and cannot be refuted.

Those 27 leading politicians had nothing to say about electricity prices that climb more than 6% every year and gas prices increasing more than 10% annually. Incidentally, crude oil prices peaked in May 2011 with $113 a barrel and after that they fall continuously, having reached even $79 in June 2012. Consequently the steadily increasing prices of energy cannot be attributed to the prices of prime energy sources. They are obviously the outcome of bad policies. In reality, our leaders due to incompetency, or deliberately, they take the wrong policy decisions for us all, but right for the energy merchants.

It is true then, beyond reasonable doubt, that during the last two years the Europeans citizens were forced to pass an increasing part of their labour remuneration to the distributors of energy products in the European market. Despite that, our leaders had the ‘courage’ to lie once more and tell us that, “The supply of affordable and sustainable energy to our economies is crucial”. If they really cared about us, they wouldn’t have let the energy merchants to exploit us all.