November 11, 2017
Welcome back to our weekly News Brief!
This week, we will look at the release of the Paradise papers and ripples caused in the waters of different European capitals. In our Populist watch section we will have a look at the impact of Austria’s elections on Europe.
Paradise Lost: Tax Havens Exposed
A leak of more than 13 million confidential documents concerning tax evasion has sent shock waves throughout Europe and the United States. These so-called Paradise Papers reveal that many leading figures and companies are using offshore constructions. Among those whose activities have been exposed are those of Queen Elizabeth II and members of the Trump administration, as well as the universities of Oxford and Cambridge and many multinational companies.
Not surprisingly, many eyebrows were raised in several European capitals. The Dutch and Belgium government especially have received heavy criticism, these countries being seen as key players in tax evasion schemes. It was revealed, for example, how the Dutch ministry of finance closed agreements specifying individual tax breaks with big companies. In a similar fashion, many companies used Dutch shell companies – corporate entities that just exist on paper – in order to lower their tax burdens, a prime example being Nike.
In any case, one could say that these revelations come very timely for the EU. This week, the EU finance ministers discussed the creation of a blacklist of worldwide tax havens in an attempt to combat tax evasion. This item was on the agenda for quite some time, but the Paradise Papers have put the issue of tax havens in the centre of the public agenda, meaning that discussions could move forward quickly. Pierre Moscovici, commissioner of Economic and Financial Affairs, expressed the hope that the blacklist could be published before the end of the year.
The Paradise Papers are less timely for Theresa May, as her government already has plenty of troubles on her platter. May is still dealing with the harassment scandals in Westminster. Tragically, Welsh MP Carl Sargeant has committed suicide after allegations were raised against him and he was sacked from the Welsh cabinet. Earlier, Defence secretary Michael Fallon resigned after being accused of sexual harassment. In another blow for the government, a second cabinet Minister had to step down, after it became known that she had unauthorized meetings with the Israeli Prime Minister. Last but not least, in a move to ease Brexiteers, May has announced the setting of the Brexit date in stone, putting further pressure on the Brexit negotiations. For May, the current political climate is anywhere but paradise.
Want to know more about the Paradise Papers? Everything can found on the website of the International Consortium of investigative journalism.
Europe’s week in links
- Brexit negotiations reach critical phase: if no agreement is reached now, little room will be left to discuss future trade deals.
- Controversial weedkiller not weeded out: EU countries have failed to reach agreement about the future of Glyphosate.
- Belgium caught up in Catalonian Crisis: different stands on the question how to handle the presence of the Charles Puidgemont and his ministers create tensions within the Belgium government.
- NATO moving forward? NATO members have agreed to upscale NATO’s command structure, with an eye to the potential Russian threat.
Populsim Watch: Austria’s turn to the Right
“I disagree with him even more than I think I disagree with President Trump.” These words came from none other than the Canadian Prime Minister Justin Trudeau and they were aimed against Sebastian Kurz, the incoming chancellor of Austria. Less than a month ago, Kurz and his conservative People’s Party (ÖVP) won the Austrian elections with more than 30% of the votes, and has invited the far right-wing populist Freedom Party (FPÖ) to form a coalition. While the talks about this “black-blue” coalition are ongoing, it might be the right time to ask who Sebastian Kurz is, what he stands for, and how his leadership might impact Europe.
At an age of 31 Sebastian Kurz is destined to become Austria’s youngest chancellor ever. He began his political career at an early age as member of the Vienna’s city council. In 2011, he prematurely ended his law studies in order to become a full time politician. He became State secretary of integration and later was elected in the Austrian Parliament. Aged 27, he became the youngest foreign minister ever. It is no wonder why Austrian tabloids nicknamed him wunderwuzzi (wonder kid).
Kurz took over the conservative party leadership in July and since then he has rebranded the party in a Macron-like style. Profiling himself as an outsider, he created a movement-like party by overturning the traditional selection process, bringing in candidates from outside. On the one hand, he aims to revitalize the Austrian economy, which has been struggling the past years. On the other hand, and more importantly, he has taken a very hard stance on immigration, consistently reminding the electorate that he closed down the Balkan Route and introduced a nation-wide ban on headscarfs.
Since his victory, Kurz has both been hailed as a saviour and criticised as a political opportunist. Some see him as the man who prevented the Populist Party from obtaining power. During the European refugee crisis, the Austrian political landscape has shifted to the right. The Populist Freedom Party was even leading the polls before Kurz stepped in. By adopting a hard stance on immigration and integration, Kurz has taken the wind out of the populism’s sails. He was even accused of parroting their programme. For critics, this rather proves he is a political opportunist who in the normalisation of populist viewpoints will damage Austria in the long run.
Before the start of the coalition talks, Kurz has emphasised that the ‘Pro-Europe’ stance of the Austrian government is non negotiable, indicating that the Freedom Party – which is very Eurosceptic – will have to compromise on this point. He has argued for more cooperation in the field of Foreign affairs, security and defence policy and border protection. One should, however, not expect him to uphold the ‘status quo’. His campaign was based on a call for change, and he has repeatedly emphasised the need for more subsidiarity and room for diversity within the Union. In any case, he will be a factor to keep an eye on as negotiations over EU reform commence.
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