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Juncker says no ‘conflict of interest’ over Luxembourg tax breaks

European Commission head Jean-Claude Juncker said Wednesday he faced no conflict of interest in his new post over investigations into huge tax breaks agreed with top international firms when he was Luxembourg premier.

“I have said that the Commission would fight tax evasion and fiscal fraud,” an under-fire Juncker said in a surprise press appearance.

“I want everyone to know that those are not just words but really reflect the Commission’s aim,” he said amid a barrage of questions about his role in arranging such sweetheart tax deals during his 19 years as Luxembourg prime minister.

“There is no conflict of interest when the Commission launches probes” into such arrangements, he said, adding he could not understand why the issue should be portrayed in that way.

Reports about the tax breaks surfaced last week, putting Juncker, who only took office on November 1, immediately in the firing line given the European Union’s headline commitment to fighting tax fraud.

Leaked documents showed the tiny duchy of Luxembourg gave hundreds of global firms huge tax breaks, among them household names such as Pepsi, IKEA and Deutsche Bank.

The Commission has launched a series of investigations into tax arrangements in Ireland, the Netherlands and Luxembourg on the grounds they might infringe state aid rules by unfairly favouring some companies over others.

The “Luxleaks” documents showed that billions were funnelled through Luxembourg thanks to complex financial structures that allowed companies to slash their tax liabilities, depriving hard-up governments of revenue.

EU Competition Commissioner Margrethe Vestager has promised to press on with the probes and Juncker earlier said he would let the process take its course, as it should.

However, questions about his role in deals which are technically legal but go against the grain at a time of austerity, refuse to go away.

On Wednesday, Juncker turned up at the Commission’s midday press conference unannounced, only for journalists to question his credibility and suitability as head of the EU’s key executive arm.

“I’m as suitable as you are,” Juncker replied to one journalist.

Juncker said that as head of the Commission he could no longer comment on Luxembourg’s affairs.

Some 22 of the 28 EU states had similar tax arrangements, he said, and the issue was to ensure that they did not violate state aid rules.