It’s a very embarrassing position for Juncker, because he only took office as the president of the European Commission a few days ago, and he’ll take some perhaps well-deserved political heat for the matter, and it probably reduces his credibility on tax reform matters.
Everyone has, in the back of their minds, the example of the Santer Commission, which resigned en masse in 1999 over corruption. For now, the revelations do not appear to implicate Juncker in anything more than the kind of aggressive steps that state leaders sometimes take to attract foreign development and investment. If, for example, Juncker was found to have taken personal kickbacks in exchange for favorable treatment, it would be a much more serious allegation for himself, for the Commission, and for confidence in Luxembourg’s institutions. But there’s no evidence of that.
Meanwhile, the Commission is a professional regulatory body, and any investigations into Amazon or other companies that received state aid in potential violation of European law will be conducted by Denmark’s Margrethe Vestager, the EU commissioner for competition, who is a former minister of economic affairs and deputy prime minister. It’s helpful, from an ideological perspective, that Vestager comes from the Danish Social Liberal Party, which should give some comfort to the European Parliament’s leftists. Ultimately, this is less a ‘scandal’ than a valid policy issue, insofar as Luxembourg and other countries have long pushed the envelope in making their jurisdictions extremely favorable to international companies. Note the Irish government’s decision last month to revise the ‘double Irish’ structure so common in the taxation of intellectual property assets. So as the Commission and other EU (and even international) institutions look into these decisions, it will help clarify the line between permissible and impermissible in the future.
Marine Le Pen is hardly the best critic on the matter, because her party has long been in favor of lowering taxes and promoting the kind of economic nationalist steps that Luxembourg’s officials may have taken with many international companies. Her call for Juncker’s resignation isn’t credible, but it’s very important for her to maximize support among the eurosceptic French right if she’s going to have any credible shot at winning the French presidency in 2017, a task made much more difficult by the return of former president Nicolas Sarkozy.
My latest for Americas Quarterly argues that the hand-wringing over the advantages of incumbency in Latin America is overwrought, and that term limits may actually hinder the development of sustained policy gains.
In particular, Colombia’s Juan Manuel Santos, Bolivia’s Evo Morales and Brazil’s Dilma Rousseff each won their respective presidential contests since June. But two of those three elections were incredibly competitive:
Incumbent victories in Brazil and Colombia, the two largest economies of South America today, are also much more fragile than they appear. Rousseff only narrowly defeated challenger Aécio Neves, and her margin of victory was the smallest of any presidential election since the end of Brazil’s military dictatorship in 1985.
Santos actually lost Colombia’s first-round vote in May to the more conservative Óscar Iván Zuluaga, who had threatened to shut down talks between the Santos government and the leftist Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia—FARC) that have destabilized the country for a half-century. More notably, the country’s March parliamentary elections transformed the Colombian Congress from a rubber-stamp chamber into a much stronger check on presidential power.
In both countries, democratic competition is on the rise. Even in countries lacking truly fair elections, such as in Venezuela, Henrique Capriles nearly defeated President Nicolás Maduro in April 2013, despite the widespread institutional advantages from which Maduro benefitted after over a decade of chavismo.
Read it all here.