Could the inquiry committee on the Panama Papers force Juncker to step down? Inquiry committees are normally a powerful tools for parliaments to control executive bodies. The European Parliament however lacks significant powers to make effecive use of its right of inquiry. The Commission has no reason to worry.
PANA Committee invites Juncker
Committees of investigations are a powerful tool for parliaments when it comes to control the executive. In Germany, inquiry committees can force witnesses to come and impose a fine or even imprisonment if someone refuses to come. In the US, an inquiry committee can exert considerable pressure on the government and even press the president to step down. This happened when the Select Committee on Presidential Campaign Activities – also known as the ‚Watergate committee‘ – led to the resignation of President Richard Nixon in 1974.
The European Parliament has also started carrying out its investigations and uses them to put pressure on the European Commission. Very recently, the PANA Committee, which was set up to investigate into the Panama Papers and how they revealed that EU law was breached or insufficiently implemented, invited Jean-Claude Juncker, the President of the European Commission. A leak had revealed that Juncker repeatedly blocked reforms on tax avoidance, while he was still Prime Minister of Luxembourg. Fabio De Masi, vice-chair of the PANA committee, even demanded Juncker to step down when the leak came out.
All this sounds quite sensational. But you shouldn’t overestimate the power of the European Parliament. The mandate of a committee of inquiry says that it should investigate into possible breaches or maladministration of EU law by one of the EU institutions, EU bodies or the Member States. Besides this, the main role of a committee of inquiry is to put an issue high on the political agenda of the EU. It has to attract a lot of public attention in order to create pressure on the politicians who are supposed to find an answer to the issue.
The PANA committee, for instance, endeavours to highlight that tax evasion, tax avoidance and money laundering is an issue. It organises hearings, missions to countries such as the UK, Malta or Luxembourg, looks at relevant documents and orders studies in order to find out where EU law and its enforcement have to be improved. More importantly, it aims at attracting public attention on the issue to make the European Commission and the Member States act. This is why the PANA committee tries to be controversial sometimes, as for instance, when it organises a mission to Malta in politically sensitve circumstances or by inviting Juncker.
Committees of inquiry are a good opportunity to show to the citizens that MEPs take their concerns serious and that they are ‚doing something‘. Looking at it this way, inquiries are a very good PR exercise for the Parliament to polish its public image.
The limited powers of the European Parliament
The powers of inquiry committees in the European Parliament are however limited. These committees cannot force anyone to come, they cannot issue sanctions if someone refuses to testify or doesn’t tell the truth, they have only a limited access to documents and their mandate is very narrow.
When you compare this to national parliaments such as the US Congress, the European Parliament looks rather weak. The US Congress can issue what is called ’subpoenas‘. This means that it can request anyone to come and testify before a committee. If this person refuses, it can face sanctions such as fines or even imprisonment. Moreover, committees in the US Congress can demand documents from private and public entities to consult them and even publish them in their final report.
Compare this to PANA: It repeatedly failed to invite relevant actors such as the CEO of Berenberg Bank, the Maltese Finance Minister Scicluna, the managing partners of Nexia BT, Mossack Fonseca, and others. Moreover, it has requested many documents from the Commission and Member States to look into how EU law was implemented. These documents, which would only be accessible in a very restrictive way – in a ’secure reading room‘ to which only MEPs and some policy advisors have access and where they are not allowed to make copies –, have not all arrived yet, even though they were requested seven months ago (sic!).
What can be achieved?
It would not be surprising if Juncker refuses to come. (It would be a much bigger surprise if he came). And if he did, he could easily avoid sensitive questions and leave the PANA committee just as clueless as he found it. Are inquiry committees therefore in vain?
The answer is no. The recent inquiry committee on emission measurements in the automotive sector (EMIS), which was set up after the VW scandal, was actually quite succesful. It managed to get all speakers to its hearings, including representatives of car constructors from across the globe. The reason is maybe because EMIS dealt with an environment and transport issue, which is within the competences of the Parliament. Taxation, by contrast, is not, and the European Parliament has only a consultative function in the field of taxation (it cannot make changes to legislation).
Another reason is maybe that the chair of EMIS, Kathleen van Brempt, maintained a good relation with the former President of the Parliament Martin Schulz, both socialdemocrats, who helped her exert pressure on invited speakers. Some speakers – such as the French Minister for Environment, Ségolène Royal – would actually refuse to come, but gave in to the pressure by van Brempt and Schulz who both repeatedly insisted, calling them on the phone and making public press statements.
A possible reform (soon?)
There is a chance that things will change soon. The European Parliament is currently negotiating a new rule on its right of inquiry with the Commission and the Council. This means that the European Parliament can now ask for powers which it doesn’t have, such as the power to issue sanctions and better access to documents. It is unlikely that the Member States will grant the European Parliament all these rights. A main obstacle is that not all national parliaments in the EU have the right to carry out investigations. It is unconceivable that Member States would grant the European Parliament more rights than their own parliaments have.
However, small changes could already make a big difference. There have been suggestions that the European Parliament could cooperate with powerful national parliaments, for instance, and ‚borrow‘ their powers – such as the power to force people to come. Another idea would be to create a permanent committee of investigation, in which MEPs and the secretariat would specialise on investigating and would be better prepared to adapt to new inquiries.
Currently, inquiry committees seem to be rather weak and ineffective. At best, they serve as a good PR exercise for the European Parliament to show that it is doing something about the concerns of citizens. More effective committees of inquiry, where even Juncker would be obliged to come and testify, would definitely improve the democratic control of EU institutions.