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Luxembourg heads for early polls, Juncker to run again

Luxembourg on Friday appeared set for a snap October election, after Prime Minister Jean-Claude Juncker’s coalition collapsed in a scandal over misconduct within the tiny European nation’s secret service.

Despite the furore, Juncker’s Christian Social People’s Party (CSV) quickly backed him to run again for the prime minister’s post.

A statement from the royal palace on Thursday said the Grand Duke Henri will “take time to reflect and will hold consultations” after Juncker headed there to propose that the duke call early elections.

The finance ministry, however, said that parliament would continue work until October 8 with elections on October 20, seven months ahead of schedule. The cabinet will meet as usual each week.

Asked earlier Thursday about a re-election bid, Juncker said: “It will depend on my party but I do have some indications that it will want me to run.”

The CSV held a meeting Thursday evening, after which it announced that it would back him to run again.

Juncker, Europe’s longest-serving leader, acted after his junior coalition partners, the Socialists, broke ranks in a rare moment of high political drama over Luxembourg’s dysfunctional intelligence service, disavowing the government over the premier’s response to the scandal.

The drama was triggered by a parliamentary committee report alleging a series of misdemeanours by the country’s SREL secret service, which the premier is supposed to oversee.

Misconduct from 2003 to 2009 included illegal phone-taps, corruption, and even a dodgy trade in luxury cars for private gain.

Though aged only 58, Juncker has been in office for 18 years and in government for 30.

He is best known in Europe for his tumultuous eight-year stint as head of the eurozone finance ministers Eurogroup, which ended in January.

His opponents said he had been too busy steering the single currency through its crisis to do his job properly at home.

“The intelligence service was not my top priority,” Juncker told parliament.

“Moreover I hope Luxembourg will never have a prime minister who sees SREL as (his or her) priority.”

Socialist leader Alex Bodry said: “There were serious dysfunctions. The prime minister’s responsibility is at stake.”

An inquiry into the intelligence service was ordered in 2012 after it transpired that it had secretly taped a conversation in 2007 between Juncker and then-head of SREL, Marco Mille.

According to a transcript of that conversation, Mille said his staff had secretly taped a conversation with Luxembourg’s Grand Duke and that the sovereign was in regular contact with Britain’s MI6.

The inquiry set up in the furore that ensued uncovered more dirt: the existence of 13,000 secret files on people and businesses, and illegal wire-taps on business leaders.

It found too that an apparent 2007 counter-terror operation was in fact a front to help a Russian oligarch pay 10 million US dollars to a Spanish spy — against a commission of 10 percent.

Juncker had ordered the operation closed but had not sanctioned those responsible, the report said.

It also complained that Juncker failed to alert the judiciary to a 150-million-US-dollar deposit in 2006 by former Congo leader Pascal Lissouba.

And it said SREL staff purchased luxury German cars at a 30 percent discount and resold them for their own personal gain.

“The commission of inquiry concludes that the prime minister, as head of the intelligence service, not only had no control over his service but also too often omitted to inform the parliamentary control committee or the judiciary of its irregularities, aberrations and illegalities,” the report said.

The CSV has won every single election in Luxembourg since its establishment in 1944, except one poll in 1974.

It won 38 percent of the vote during 2009 elections, securing 26 of the parliament’s 60 seats, against 13 for the Socialists and nine for the opposition Liberals.

The CSV could try to form a coalition with the liberals, as it did from 1999 to 2004 — unless the Liberals, Socialists and Greens agree a three-way entente to overcome Juncker.