Trans-Europe Express: European hypocrisy on tax havens

Sent out every Friday at noon, Trans-Europe Express gives you an insider's view of the most important coverage from across the EURACTIV media network, its media partners and much more.

EU national governments say harbouring dodgy money is wrong – unless you’re European.

After months of intense negotiations, the 28 EU finance ministers finally published their much-awaited blacklist of tax havens this week. And it landed like a damp squib.

Out of the 17 countries on the list, not a single one is European. They include Panama, Barbados, South Korea,  Mongolia, United Arab Emirates, Tunisia, Palau, Bahrain and two US territories – American Samoa and Guam.

The list drew howls of protest from transparency advocates, who questioned why countries like Luxembourg, Ireland and Malta, and British territories like Bermuda, Jersey and the Isle of Man, were not on the list. All of them have had questionable tax and banking arrangements.

“The list cannot be limited to third countries but must include some European jurisdictions,” Markus Ferber, vice president of the European Parliament’s Economic Committee, said.

Elena Gaita from Transparency International noted that there is no clear answer to the question because the selection criteria was secret. “For this blacklist to be effective, the EU Council needs to be transparent about the selection process by disclosing how it screened jurisdictions,” she said.

Valdis Dombrovskis, vice president of the Commission, also expressed disappointment that the measure had been so watered down from what was envisioned one year ago, when the EU took the decision to draw up the list following the multiple scandals of Luxleaks and Panama papers.

Member states countered that a separate “grey list” of 47 countries who have been given a ‘warning’ does include the British territories of Bermuda, the Cayman Islands, Guernsey, Jersey and the Isle of Man. But all of these territories are technically outside the EU.

The lack of Europeans on the list gives the EU little moral authority, something which the government of Panama has pointed out in launching a strong objection to being included. The country may even impose diplomatic or financial penalties on the EU in retaliation. The EU, they complained, is not being a neutral arbiter.

A more neutral list of tax havens was published last week by anti-poverty campaign group Oxfam. The list of 35 countries includes four EU member states – Ireland, Luxembourg, Malta and the Netherlands – and four EU hopefuls from the Western Balkans.

National governments will have the chance to get it right when they revisit the list in 2018. “It is not a one-off initiative”, said Estonian Minister of Finance Toomas Tõniste.

Maybe. But let’s hope the EU didn’t have only one chance to do it credibly.

Inside Track

Summit acid test. Newly appointed Czech PM Andrej Babiš heads to his first EU summit next week, planning to defend his country’s stand on migration and promote a more ambitious reformist agenda.

Catalan take-over. Thousands of Catalans took the streets of Brussels in the cities’ largest protest since decades to support their ousted leader Carles Puigdemont and demand the release of others who remain in prison.

Election run-up. Catalan parties will officially started campaigning for a regional parliamentary election on 21 December, while Supreme Court judges decided to keep pro-independence Catalan leaders in prison.

Liberal U-turn? After coalition talks collapsed in Berlin, the German liberals jockey for position as FDP deputy leader Wolfgang Kubicki does not rule out a restart of the Jamaica talks, in contrast to party leader Christian Lindner.

Brexit re-vote? A recent poll finds that half of Britons support a second vote on whether to leave the EU and a majority thinks the government may be paying too much money to open the way to trade talks.

Mr. Erasmus dies. Spanish socialist politician Manuel Marín, longtime member of the Commission seen as ‘father’ of the EU’s popular Erasmus student exchange scheme that connected generations cross borders, died at age of 68.

Energy agreement. Cyprus, Greece, Israel and Italy this week signed a memorandum of understanding to build the world’s longest underwater natural gas pipeline to supply Europe.

Euro-Jackpot. Portuguese Finance Minister Mário Centeno became the new president of the Eurogroup, with a promise to bring consensus across the aisle to strengthen the eurozone.

Out of the darkness? Greece and its eurozone creditors reached a preliminary deal on reforms Athens needs to roll out under its bailout programme, a move that could pave the way for the country to leave the aid plan in August 2018.

Innovative approach needed. The EU should apply a pragmatic approach to the Eastern Partnership, but cannot gamble with its own basic values and principles, writes analyst Pavel Havlíček.

Where did the money go? Two centre-left lawmakers published a report revealing severe cases of corruption on Bulgaria’s border with Turkey and called on Sofia to take immediate action.

Good shape, bad shape. As Western Balkan countries prosper, EU should open accession talks with them as soon possible or risk seeing them wooed by Russia, China or radical Islam, the Albania’s PM warned in Brussels.

The Kosovo dissonance – The visit of three Bosnian presidency members to Belgrade achieved few results as it highlighted once again disagreements over Serbia’s former province of Kosovo.

Marshal plan. Commissioner Cretu looks at post-World War II funding plan as inspiration for cohesion policy.

EU’s witch hunt in Hungary. According to Zoltán Kovács, the spokesperson of the Hungarian government, Budapest is convinced that the EU institutions are on the wrong side of history in the context of the migration crisis.

Continued cooperation. The Venice Commission still awaits the response of the Polish government regarding its draft opinions on the reform of the judiciary and the country to confirm participation in the next plenary session.

Arrests made. Maltese police have arrested ten suspects in the murder of anti-corruption blogger Daphne Caruana Galizia after an EU delegation left the island last week saying there were serious concerns about the rule of law there.

Protecting Greenland’s seals. Seal hunting has been associated with images of animal cruelty, Brigitte Bardot hugging a seal pup, and environmental groups asking for it to be banned, which the EU eventually did.

Serbia Behind Schedule.The European Commission’s non-paper on the rule of law, said that Serbia was late establishing an efficient judiciary, and it still faced major challenges related to free press.

Chapter by chapter. The EU will open two new chapters in Serbia’s bid to join the EU (on external relations and company law). Serbia wants  three or more at the intergovernmental conference in Brussels next week.

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