In an effort to highlight tax evasion in Europe, the French Green Party is organising a guided tour of tax evasion hotspots in Paris (May 20). The Green Party criticises the Financial Transaction Tax, advocates for greater financial transparency, and claims Pierre Moscovici would make a bad commissioner. EurActiv France reports.
“My adversary is the world of finance” declared François Hollande during his presidential campaign in 2012.
Two years later, “the results are disappointing” according to Pascal Canfin, who resigned as France’s Minister for Development two months ago. The Green Party has organised a guided tour of Parisian tax evasion hotspots as part of their EU election campaign on Tuesday (May 20). The media stunt aims to highlight tax evasion and tax havens as a key issue for the next European Parliament. During his time at the European Parliament, Pascal Canfin fought hard to set up Finance Watch, and therefore feels personally connected to the issue.
“Led by Commissioner Michel Barnier, the EU Commission recently put in place a surveillance system for large banks within the framework of the Banking Union. This is good. It is a step towards federalism. But we must go further still,” said Eva Joly, outgoing French MEP for the Green Party.
Common tax base
As the guided tour makes its way past Amazon’s French headquarters, Julien Bayou tells the participants that the e-commerce giant only pays 0.1% tax in France. It does this by taking payment from a subsidiary based in the low tax jurisdiction of Luxembourg. Europe has been trying to tackle this problem for years.
“I believe that if we were to focus on one thing, it should be to establish a common tax base for all European countries: member states should not be in competition with each other and economic activity should be taxed wherever it happens,” said Pascal Canfin.
The Commission has already released a proposal for a council directive on tax harmonisation. However, due to a lack of political will, member states never agreed on it.
Transparency could be better
A key part of the Green Party’s guided tour centres on ‘la Défense’, Paris’s business district where companies like Total and Areva have their headquarters. “Most extraction companies want to preserve tax evasion mechanisms because they are advantageous. A lack of transparency is to blame”, said Eva Joly. She argues that companies should be required to publish their results in each country so that they can be quoted on the stock exchange and react to public markets. “We must not fool ourselves. Without this, rules will not be applied,” she said.
Not everything has been bad. The Green Party is satisfied with some progress, such as the amendment that was voted on and adopted by the Anti-Money Laundering Directive. Under it, information on individuals who own a company or benefit from a trust will be disclosed to the public authorities of member states. It will come into force in 2015.
Alstom, victim of tax havens?
“Tax havens are doing well. Money coming in increases all the time. It is estimated that up to $26,000 billion is held in tax havens today. Companies are accountable for 2/3 of it. This affects competition rules”, said Joly, making reference to the ongoing Alstom deal. The French company is currently in talks to sell its energy sector to Siemens or General Electric. General Electric has €120 billion deposited in tax havens across the world. This is why it wants to buy foreign companies, which gives it a competitive advantage over its German counterpart, Siemens. “It disrupts competition. If General Electric repatriates its funding, it would be taxed in the US, but if they spend it elsewhere, it will not be subject to taxation!” Eva Joly continued.
In France, French funds that are hidden away in tax havens are estimated to be at around €600 billion, €185 billion of which is in Switzerland. Most of this money goes through the Reyl Bank, a bank with strong ties to the Champs-Élysées and which sparked controversy when the French Junior Minister for the Budget, Jérôme Cahuzac, put his money in its coffers.
A political programme to govern Europe
The Greens are enthusiastic about the Lisbon Treaty and its institutional reforms regarding the election of the Commission president. “For the first time, if the left can form a coalition to lead the Commission, there will be a political programme to build on. This is a great occasion for the Greens, especially given that we are the oldest and most coherent political group in the European Parliament,” said Pascal Canfin.
If this is true, financial issues could be put centre stage in the next mandate. Finalising the Financial Transaction Tax (FTT) will be one of their main goals.
“We cannot class the Commission as an anti-globalisation NGO! However, the Commission proposed an ambitious tax on financial transactions across the EU. The member states are working to reduce the scope of such a tax!” claimed Canfin.
It was initially expected to amount to €60 billion of revenue per year. However, FTTs have been greatly reduced by the European Council; the current agreement is likely to amount to just a few billion per year.
The Greens blame France and Germany for limiting the scope of FTTs in an attempt to protect the profitability of their banks.
Pierre Moscovici deemed bad commissioner
Eva Joly claimed that Pascal Canfin would make a good commissioner for France.
“In any case, one thing is certain: Pierre Moscovici was convinced by the banks to pass a ridiculous banking law, which will never fully differentiate between investment and deposit banking, and to whittle down FTTs. He is not the right candidate to fight against tax evasion,” said Eva Joly.
The French Green Party won 16% of votes in the 2009 European elections. Polls forecast a poor result for the upcoming elections, possibly a drop to 8%. According to Julieu Bayou, the spokesperson for the French Green Party, "a big part of the Green Party's electorate decides at the last moment, so everything is still to play for in the last few days."
France’s permanent representation to the EU ?