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BackThere are hardly any areas where the competencies of the European Commission are as comprehensive as with regard to competition policy. The Directorate-General for Competition of the Commission is regarded as one of the most powerful weapons in the arsenal of European policy. Each year, the Commission publishes its so-called “Competitiveness Report”, in which it presents the most significant developments of the past year. The Commission published this report in June last year, and this week the European Parliament adopted its opinion on this report with a very broad majority during its plenary session in Strasbourg.
From the point of view of employees, the opinion of the German rapporteur Werner Langen contains a number of remarkable demands. He points out, for example, that competition policy has a significant role to play if combatting social dumping to the detriment of employees and consumers is at issue. By also pointing out that competition policy is not exclusively aimed at lower prices, but should also promote higher labour and environmental standards and put particular emphasis on social effects, this is a very welcome departure from a “stinginess is cool culture”, which only too often comes at the expense of employees.
The demand, which is also included in the report, that European competition policy should give thought to the issue as to how European companies and therefore employees could be supported to meet the challenges of global competition, is a welcome change from the usual dogma, which is solely based on rock-bottom prices. Also interesting is the demand by Langen and Co. on the Commission to examine whether there is a connection between the fact that a particularly high number of politicians and ex-ministers are represented on the boards of energy companies and the particularly oligopolistic structures of the energy markets in some Member States. In addition, to be welcomed is the reference to the paramount importance of net neutrality with regard to fair competition on data highways. Moreover, the demand on the Commission, to ensure at last at European and international level that European airlines and jobs in the aviation industry are not going to rack and ruin because of unfair subsidies competition of non-European airlines, can only be expressly emphasized.
However, the report is particularly interesting with regard to a field of action, only recently discovered by the Commission, namely combatting unfair tax competition in an unholy alliance between large international corporations and national states, keyword “Luxleaks”. For years, this has been resulting in serious undesirable developments, which, just as the disastrous effects of wage and social dumping, compromise the entire European project. These are deals struck behind closed doors between national treasuries and large corporations, where some selected companies are promised massive tax breaks under the pledge of secrecy. This practice does not only undermine the budgets of all Member States, but also favours large corporations, which are powerful in any case, over smaller companies, which do not enjoy this special treatment.
Following years of turning a blind eye, now, not least because of a media outcry, European policy and competition policy have begun to take an interest in the issue. The new Danish Competition Commissioner Margrethe Vestager and her team, also supported by an active participation by the AK, courageously took steps to crack down on some of the most blatant deals. The report of MEP Langen expressly supports this new policy of the Commission as one of several fields of action at European level. Particularly spectacular in this context is a demand, included in the report, which deals with the question, who should receive the fines when the Commission uncovers illegal tax breaks.
As the law stands, the Commission demands that the Member State affected, which has granted certain companies unfair tax advantages, recovers these funds from the companies in question. Most recent example: the Commission decided on 11 January 2016 that a tax break by Belgium granted to selected corporations is unlawful. 35 large corporations were able to benefit from this regulation, introduced by Belgium in 2004. The Commission now demands that Belgium recovers about 700 million EUR from these companies. However, according to reports by the Belgian media, the problem is that the Member States, which came up with these tax deals in the first place, are not particularly motivated or in a hurry to recover the money from these companies. Here, Langen and Co. come up with an interesting new idea: any fines shall not be made available to the Member State, which introduced such tax practices, but instead to all other aggrieved Member States or flow into the EU budget.
It has to be pointed out once again that with 500-yes votes to 137 no-votes and 73 abstentions, the report by Werner Langen was adopted by an overwhelming majority across party lines by the European Parliament.
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