EMP Elly Schlein

An interview on tax avoidance, immigration and European elections

Elly Schlein a European point of view
by Massimo Predieri

Leggi in italiano

We met in Rome Elly Schlein, Member of the European Parliament, for an interview on her vision from Brussels on political topics.

it: Finance, budget, deficit, debt and spreads are in the foreground. You have engaged in the European Parliament against tax evasion and avoidance, which steals resources from government budgets. Can you explain to our readers the difference between evasion and avoidance? What results have been obtained in these years?

Elly Schlein: tax avoidance and evasion, especially of multinationals and large groups, is a real scourge at the European level. The difference is that avoidance does not violate specific regulations. It consists in complex elusive schemes that at European level derive from the possibility for multinational companies to take advantage of the differences that exist between 28 different tax systems. You do not even need to break the law to make tax avoidance. 

The estimates made by Professor Richard Murphy report of 1000 billion euros lost in Europe each year, including tax evasion and avoidance. A figure equal to three times the Juncker plans for investments  mentioned in recent years. First of all, it would be important to recover part of that amount. We often hear people say that not enough resources for services to citizens are available, resulting by cuts in welfare, etc. Instead, with adequate policies and European and national tools to fight these phenomena, the resources would be there.

One of the many ways in which tax avoidance is carried out at the European level is the so-called tax ruling. A few years ago the so-called LuxLeacks scandal emerged, which showed how many multinationals, over 200, made agreements (to pay fewer taxes), in this case with the Luxembourg government. There are many European governments who play this ruthless tax competition that makes all of us losers, because we get to rates that, as in the case of Luxembourg, are below 1% of the corporate tax rate, which is almost like not paying taxes at all.

Another example was the so-called Double Irish. The European Commission's decision to ask Ireland to repay € 13 billion of taxes not paid by Apple to the Irish tax authorities has caused a lot of discussions. Note that the 13 billion are not only taxes not paid in Ireland, but taxes not paid in all the other countries of the European community. Another example: a multinational group can deposit intellectual property rights in a country, where it has obtained a reduced rate, and in this way avoids paying taxes in the countries where the profits are actually collected. Transparency is the tool for overcoming tax avoidance.

We have made several steps ahead on this issue in the European Parliament, also because of public pressure following these scandals. Besides the LuxLeaks there have been the Panama Papers and the Paradise Papers, after which we set up committees of inquiry within the European Parliament. We ask for transparency, we ask for automatic exchange of information because it is absurd that in Europe there is still no automatic exchange of tax information between the competent authorities in the various member states. We ask state-by-state public reporting, requesting all multinationals holdings to declare how much profits they make, how many taxes they pay, and a number of other relevant information in all the countries where they operate, inside and outside Europe, because we do not forget that the countries that suffer the most from tax evasion and tax avoidance are the developing countries and therefore the poorest countries on the planet.

it: Is there a risk that the progressive left is perceived as a protector of immigrants, while the populist right is successfully trimming the role of defender of Italian and European citizens?

This risk is clearly opposed by focussing on the true issue of us and them, which is not given by the colour of the skin or nationality, but by the inequalities that are terribly increased throughout this crisis. This is an issue that affects the whole society, and that deserves adequate answers. This war between the poor is easily fuelled by a rhetoric that wants to point the finger at the last arrived as the cause of all social problems. It is obviously a wrong and simplistic reading.

The phenomenon of immigration must be tackled with policies that are farsighted and effective at all levels, the local one, the national and the European. The left has very concrete proposals, we have put forward a European proposal that was approved by two thirds of the European Parliament: the revision of the Dublin regulation, the one with the greatest responsibilities on reception, on the countries on the hot borders of the EU, asking to overcome this hypocritical criterion of the first country of access and to replace it with a fair redistribution in the responsibility of the reception of all asylum seekers arriving in the European Union. In short, asking all governments to do their part, this is a battle we have made and that we have won in the European Parliament with a strong majority.

At the national and local level the same approach must apply: a widespread reception in the territory, a welcome like the one that unfortunately the newly approved Italian decree is attacking at the root, is the only reception that allows social inclusion and can bring, as it has already done in many Italian municipalities, important opportunities for local young people. It is not only the story of Riace, which has been widely discussed, but also the rest of the solidarity common network, the #Welcome municipalities where a good reception management, with the involvement of local authorities, with adequate controls, with the experience on reporting, has also allowed to create opportunities for local people who have found employment in the management of a done well reception.

This is a whole Italian story that we hear very little about, unfortunately, because those that raise barricades against hosting 10 or 15 unaccompanied minors makes more noise. We favour this kind of experiences and concrete answers, which reject the interpretation of us and them against the foreigner, but that give answers to everyone on the territory trying to reduce those deep social inequalities that have increased with crises.

it: Yanis Varoufakis, professor of economics and former minister of finance in the Greek government, has founded a pan-European party called DiEM25e and proposes that citizens of all states vote for the same lists of candidates in the European elections. Utopia or vision of a future European democracy?

Elly Schlein: It is a correct intuition. We too, in the European Parliament, have tried to pass the idea of transnational lists. Unfortunately, the parliament has not approved for a very political reason: in the background there was the clash between Macron and Merkel. The parliament has lost a historic opportunity to get through what we really need.

National selfishness has increased during these years of crisis, and have prevented to put in place those common European solutions required by the now all European and global challenges: migration, fiscal cooperation, but there is also the climate change, the social dimension and the foreign policy. On all these important topics we need more European answers to challenge national egotism. The only way is to have more European parties, more European movements, that fight these battles at the right level to win them.

We have seen it, for example, with the battle of Polish women against a medieval law that was about to pass in that country: it became a real European battle and we managed to stop that law. As with many other major issues, I think, for example, of the international trade.

The Europeanization of the debate is certainly a necessary step, to have a common approach to find those answers, that have been lacking in recent years, but which will be decisive above all for what I mentioned earlier: the fight against inequalities is not just about our country, it's all about Europe, unfortunately, because the data on youth unemployment are too high across whole Europe. With European branded tools we could already do a great deal to tackle the poverty and inequality.

Honourable Elly Schlein, thank you for this interview.


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