EU Commission reacts to Panama Papers

The EU's proposals go in the right direction but won't take things far enough, the Catholic daily Avvenire warns:

“Contrary to all appearances the Panama Papers and the international scandal over VIPs stashing away their ample earnings in tax havens are good news: the world has become too small for such behaviour to remain hidden, and the international institutions, the individual states and the public are no longer willing to tolerate this phenomenon. … One concrete initiative is aimed at enforcing the country-by-country reporting rule. The EU recently decided to adopt this course, but with a measure that in our opinion is entirely inadequate. It is questionable that the EU really wants to take action here. Its stance encourages suspicions that it is being influenced by lobbies. The 750 million euro turnover limit above which the rule is to apply would already exempt most businesses from compliance with the regulation.”

As laudable as a post-Panama-Papers, tax-havenless world may seem, it is completely unrealistic, the liberal daily Večer believes:

“The key reason is that abolishing the tax havens would mean decapitating the financial industry and the multinationals that dominate the global economy. And it would force from office all the dishonest and incompetent politicians who were put in their posts by this industry - in the largest and most successful as well as in the poorest countries. That is modern capitalism, which is anything but brave and new for most people. Nevertheless this majority won't be able to send this capitalism packing. This majority is too divided, too alienated, too content with its own little tricks for defrauding the state. And what's more, the shelves are well-stocked with cheap goods.”

German Finance Minister Wolfgang Schäuble plans to present a ten-point plan for fighting tax evasion and money laundering at the IMF's spring meeting. Only an internationally coordinated course of action has any chance of success, the public broadcaster Deutschlandfunk argues:

“Why, for example, is the government in London happy to be present when the topic is popular initiatives against tax evasion and other measures, while hundreds of thousands of letterbox companies still exist in British Overseas Territories? Why does the US like to put the screws on other states when they are suspected of providing shelters for US citizens engaged in shady dealings while at the same time no action is being taken against the hugely popular letterbox companies in Delaware, for example? ... All the tax and criminal investigators who go after economic criminals on a daily basis believe that Schäuble's proposals don't go far enough.”

The option of establishing offshore companies is hugely important for international trade, the conservative paper The Daily Telegraph writes in defence of offshore practices:

“Much offshore financial activity is legitimate and, in many cases, vital to the smooth operation of global business. ... Offshore centres facilitate the movement of capital and lower barriers to trade and investment. … The problem of tax avoidance, as President Obama said on Tuesday, is that 'the laws are so poorly designed'. They were designed for an age before globalisation. So fix the laws and punish those who break them. Don’t go after people whose only crime is to be wealthy.”

To put an end to offshore practices all that is needed is a reform of the business laws, writes Edward Lucas in a commentary published by news agency BNS:

“As of next year every transaction that entails the transfer of a million dollars or more should only be legally valid if the recipient is named. If you want to rent a house in London, sell a casino in Monaco or buy an oil tanker in Novorossiysk, you would have to state who you are. And who you are doing business with. Otherwise no court would recognise any rights. … Such restrictions wouldn't bother anyone who is obeying the law. But they would be very inconvenient for those who do their business through smart law firms based in exotic countries.”

The publication of the Panama Papers shows that it's not enough to appeal to people's morals, the Christian daily Kristeligt Dagblad concludes:

“In November Pascal Saint-Amans, Director of the Center for Tax Policy and Administration at the OECD, was able to get the US, the EU, India, China, Russia and Brazil to take first steps toward harmonising their tax laws and administrative structures. Consequently it must also be possible to put pressure on small tax shelters to stop them from giving safe haven to hidden wealth. That is a difficult process, and until now people's greed has led to extremely creative solutions when it comes to saving taxes. Legislation is the only solution. Appeals to morals are inadequate because people's propensity to sin so often gets the better of their consciences.”

Regardless of who was responsible for the publication of the Panama Papers the revelations will have a positive impact, the centre-left business daily Cinco Días believes:

“A hero or a villain? We don't yet know who published the data, but we can imagine the consequences it will have. … The tax burden should be commensurate to the economic capacity of the contributors, in accordance with a fair and progressive tax system. If the dynamic of thinking that it's always the same people who end up picking up the tab is broken that's a good thing. Hero or villain, it doesn't matter who opened the doors for a new fiscal spring.”

Nothing will change following the publication of the Panama Papers, the liberal daily Večer is convinced:

“In tax havens the 'left' and the 'right', politics and capital, coexist. ... This is a strong coalition, one that ensures that tax havens are preserved even when the politicians have repeatedly stated that they will abolish them, or at least subject them to stringent regulation. In view of this holy alliance in the tax heavens, how can we believe that anything will change after the Panama Papers? ... And if something does happen perhaps it will only be in Iceland, where people demonstrated outside parliament last night.”

Tax havens will not be eliminated any time soon, investment expert Christophe Servan explains in the right-wing online magazine Boulevard Voltaire:

“The strangest thing about the whole thing is that the money that is smuggled past the tax authorities is for the most part invested in financing public debts. Here the cat is biting itself in the tail. ... Those who hope that the publication of the Panama Papers hails the end of tax evasion are fooling themselves. Because the accused Panamanian law firm Mossack Fonseca is just one among a dozen others. Above all - and this is the pivotal point - tax evasion has now taken on such proportions that measures to combat it could upset the entire international financial system.”

The liberal business paper Wirtschaftsblatt, on the other hand, argues that the publication of the Panama Papers has already paid off:

“The sheer size of the Panama Papers leak is impressive. At the same time we already know that the investigations into countless sensational cases will peter out without any results. The national authorities are already making their apologies for lagging behind. However, the revelations have already made their biggest impact: as has happened every time such dealings have been made public in the past, the number of voluntary disclosures will rise. And those who shift money around unlawfully will at least be doing it with the knowledge that the next whistleblower is waiting just around the corner.”