How much longer can we tolerate this system? The Left in the European Parliament demands a committee of inquiry.

Again, a leak from the offshore world. Again anonymous shell companies, shifted funds, hidden accounts and many secrets. 

Heads of state, the super-rich, politicians, criminals and celebrities hiding their money in tax havens while public coffers go into debt and citizens face cuts to public services? Does all this sound familiar? It’s because it is. The more you read about the immoral practices of the powerful, the angrier you become. They are not only shirking their tax obligations, they are directly stealing or hiding money that belongs to the public. Trillions are therefore missing in the social systems, in hospitals and schools, in universities. 

Why do they still do it if they are already multimillionaires? The answer is because they can. 

Which leads to the real question: WHY can they do this?

Money can only be hidden if there are places to hide. Tax havens must therefore be banned. However, there is honor amongst thieves. The latest leak contains more politicians than ever before: 35 current or former heads of state and government and more than 330 high-ranking officials and politicians from almost 100 countries. Could it be that the offshore system works so well because so many politicians use it? 

Since the “offshore leaks” in 2013, and several other leaks including the Panama Papers, Lux Leaks and the Paradise Papers, the EU has done very, very little. Instead of intensifying the fight against tax dodging, the national tax authorities in member states have been systematically downsized. Between 2008 and 2018, almost 100,000 jobs were lost in tax offices in 28 European countries. This corresponds to a decrease of 14.3%, or the loss of about one in seven jobs. 

The already short EU tax haven blacklist was even shortened after the publication of the Pandora Papers, with the Seychelles, among others, being removed from it. The EU finance ministers could not show more clearly that they do not take the fight against tax havens seriously. Governments seem to have very little ambition to close the loopholes in the legal texts. 

The Left in the European Parliament requested for a Committee of Inquiry on the Pandora Papers. A committee of inquiry into successive tax scandals is a way to investigate EU responsibilities, especially as high EU policy makers are involved.. The other political groups in the European Parliament should back our demand because a Committee of Inquiry will increase public pressure for tougher laws against money laundering, corruption, terror financing and aggressive tax planning by the super-rich and corporations. 

However, the EU Commission and the Council would be well advised to cooperate with the Committee of inquiry this time. In the past, the Council and the Commission had made cooperation difficult and cast doubt on the legitimacy of the Committee of Inquiry. 

With every leak, politicians in positions of responsibility make themselves more untrustworthy. This not only damages the public purse, but also democracy. In times of Covid-19, the words Nobel laureate Joseph Stiglitz from 2016 ring true: “We know what to do with dangerous contagious diseases: quarantine. And so too for the secrecy-havens. They should be cut off from the global financial and economic system.” The world’s rulers should confront tax dodging with the same determination as Covid-19. Otherwise, it is way past the time to lift their immunity.