new EU rule that would bring greater transparency to tax arrangements, like the ones used for Fiat and Amazon. It will require finance ministries to exchange their corporate tax arrangements with each other from the start of 2017. “The EU is leading the way,” said Luxembourg’s finance minister, Pierre Gramegna, as he unveiled the agreement in October. “This is a decisive step towards greater transparency in tax matters.” But the infor mation exchange will exclude one authority: Vestager, the commissioner responsible for holding the country to account over state aid matters.
Her exclusion has left EU lawmakers disappointed, to the extent that the European Parliament criticised the new rule as “a missed opportunity to create more transparency in taxation” in a non-binding opinion. “You need to have an arbitrator,” said French conservative MEP Alain Lamassoure, who heads a special committee on tax rulings. “Simply having a mutual exchange [between EU governments] does not guarantee that illegal practices won’t happen again,” he said. Reported by JEAN COMTE and BJARKE SMITH-MEYER
WHO STILL LOVES SCHENGEN? Tired commuters could po- Mellouet, an economist with the Idea tentially slow down Luxem- Foundat ion, t he Lu xembourg bourg’s economy. Chamber of Commerce’s think-tank.
Will Bakker (CC BY-SA 2.0)
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f the road and weather were clear, this trip would take 45 minutes. We leave Bonnevoie at 6:45 p.m. During the workweek there’s always a traffic jam headed south, but now there are even more bumps in the road. In the wake of the 13 November Paris terror attacks, France introduced “border checks”. They are meant to be temporary, however European politicians from the 2017 French presidential election frontrunner to the current prime minister of Hungary have called for the permanent abolition of the Schengen passport-free travel area. What would ongoing border controls cost the Grand Duchy? It is “hard quantifying” the potential impact on Luxembourg’s economy, as no studies have been done on that specific question, notes Sarah
Yet the stakes are high. 7:45 p.m.: totally stuck on the A3 motorway. Back-to-back parked lorries line the emergency band. Nearly half of this country’s labour force are cross-border commuters, and French residents represent 23% of all active workers here, according to Statec, the national statistics bureau. On average commuters spend 17% of their gross income inside Luxembourg, about €925m each year, reports the Luxembourg Central Bank. Plus 45% of all tourists in Luxembourg are inhabitants of the three neighbouring countries, says Statec. About 90% of French commuters travel by car, Mellouet points out. (Extra train service was laid on that can carry about 3% of total French commuters.) She predicts that, “if controls were to be held on a daily basis, it would have a real impact” on the economy, simply because staff would be increasingly tired and stressed out, not to mention continually late to the office. Following the
attacks, there was a spike in sick leave, for example. We creep past the frontier around 8:45 p.m. and pass the first motorway exit inside of France (the one that leads to Cattenom) at 9 p.m. Others downplay the threat, saying workers will adapt. Due to lost work time, there could “be a decrease in product ion,” says Statec’s chief economist, Ferdy Adam. But then there could be “a, slight, increase in hourly product iv it y ” (a s c of fe e br e a k s a r e skipped, presumably). If the checks continue, “I think one can assume that it could have a measurable impact on quarterly GDP, but would it be big, or larger than normal f luctuations? I would rather think that it would disappear in the normal fluctuations.” Two lanes slowly merge into one. Finally at 9:25 p.m. we drive past a pair of police officers watching traffic drive by. We whiz by Thionville a few minutes later. “For many of the cross-border commuters,” reckons Darren Robinson, managing director of the recruitment firm Badenoch & Clark in Luxembourg, “there are no other options for them than to continue to commute or relocate to Luxembourg or another city”. Arrival in the centre of Metz: 9:45 p.m. Reported by AARON GRUNWALD Winter 2016