Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #802 The Luxembourg Connection (What the Hell Does Dave Emory Mean by “Underground Reich?” Part 2)

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

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Side 1  Side 2

Intro­duc­tion: This broad­cast illus­trates the deep polit­i­cal rela­tion­ships that are shap­ing Europe. Evolved from the Third Reich’s for­mal mil­i­tary occu­pa­tion of Europe, these polit­i­cal and eco­nom­ic rela­tion­ships are inex­tri­ca­bly linked with the remark­able and dead­ly Bor­mann cap­i­tal net­work that forms the basis of much of Mr. Emory’s ana­lyt­i­cal par­a­digm. Tak­en in con­cert, they help to illus­trate what Mr. Emory means by “Under­ground Reich.”

They also illus­trate Pruss­ian mil­i­tary the­o­reti­cian Carl von Clause­witz’s prin­ci­ples stress­ing the con­tin­u­um between war and pol­i­tics, with eco­nom­ics as a gov­ern­ing con­sid­er­a­tion.

(For detailed infor­ma­tion on the selec­tion process by which Merkel shoe­horned in Jean-Claude Junck­er, see Pter­rafractyl’s offer­ing on Merkel’s increas­ing­ly auto­crat­ic posi­tion with­in the EU.)

Angela Merkel’s selec­tion of Jean-Claude Junck­er as Pres­i­dent of the Euro­pean Union Com­mis­sion will see a long-time Ger­man ally and son of a Wehrma­cht com­bat­ant ascend to the pin­na­cle of EU gov­er­nor­ship. Junck­er is a staunch advo­cate of the very aus­ter­i­ty that is already crush­ing much of the con­ti­nent. (As not­ed in FTR #155, The Bor­mann net­work is com­posed to a sig­nif­i­cant extent of the descen­dants of Third Reich alum­ni.)

A pro­tege of Hel­mut Kohl, Junck­er con­tin­ues a pro­found con­nec­tion between Ger­many, Lux­em­bourg and the Third Reich that will be dis­cussed below. Ger­mans also dom­i­nate many of the oth­er key EU gov­ern­ing posi­tions.

Junck­er’s avail­abil­i­ty as EU Com­mis­sion Pres­i­dent derives from his forced res­ig­na­tion as Prime Min­is­ter of Lux­em­bourg, in a scan­dal that derived from a series of bomb­ings in Lux­em­bourg linked to Oper­a­tion Gladio/Stay Behind.

The Ital­ian “Strat­e­gy of Ten­sion”Glad­io– was revealed as part of a NATO pro­gram called “Stay  Behind,” through which secu­ri­ty ser­vices used fas­cist cadres to imple­ment the ter­ror. (The cadres were osten­si­bly designed to fos­ter gueril­la-style resis­tance in case of a suc­cess­ful Sovi­et inva­sion or com­mu­nist takeover in those coun­tries.)

In FTR #44, we ana­lyzed Stay Behind/Gladio’s ori­gins with Nazi/BND spy chief Rein­hard Gehlen and the ODESSA post­war SS net­work.

Junck­er was forced to resign, due to a scan­dal in which Mar­co Mille, that coun­try’s intel­li­gence chief, secret­ly record­ed a con­ver­sa­tion with Junck­er about Stay Behind/Gladio. Impli­cat­ing the Grand Ducal fam­i­ly of Lux­em­bourg in the scan­dal, Mille was him­self a par­tic­i­pant in Gladio/Stay Behind. One won­ders about the pos­si­bil­i­ty of delib­er­ate blackmail/manipulation in order to steer the Lux­em­bourg­ers in the direc­tion desired by Ger­man pow­er struc­ture.

The deep pol­i­tics and eco­nom­ic con­nec­tions dom­i­nat­ing the back­ground and char­ac­ter of the Ger­manophile Junck­er track back to the Nazi occu­pa­tion of Lux­em­bourg dur­ing World War II and the car­tel con­nec­tions that facil­i­tat­ed the Third Reich’s amoe­ba-like absorp­tion of the Euro­pean econ­o­my.


Dur­ing the Nazi occu­pa­tion, Lux­em­bourg’s econ­o­my was fold­ed into “Europa Ger­man­i­ca,” with Gus­tav Koenigs, Chair­man of the Bush-Fam­i­ly linked Ham­burg-Ameri­ka Line and Sec­re­tary of State of the Third Reich over­see­ing the steel car­tel ARBED and much of Lux­em­bourg’s oth­er busi­ness.

After the war, Lux­em­bourg became part of the remark­able and dead­ly Bor­mann cap­i­tal orga­ni­za­tion, with the Grand Ducal fam­i­ly front and cen­ter in the con­tin­u­a­tion of the Ger­man-Lux­em­bourg con­nec­tion. Note, again, that the con­ver­sa­tions secret­ly record­ed by Mar­co Mille impli­cat­ed the Grand Ducal fam­i­ly in the Glad­io bomb­ings.

Illus­trat­ing the deep polit­i­cal con­ti­nu­ity that has enabled the per­pet­u­a­tion of the Under­ground Reich and its EU/EMU dom­i­na­tion of the con­ti­nent, the pro­gram con­cludes with an exam­i­na­tion of the career of for­mer French Pres­i­dent Fran­cois Mit­terand, fre­quent­ly cred­it­ed with hav­ing “fathered the Euro.”

A fol­low­er of French fas­cist orga­ni­za­tions like the Cagoule and the Croix de Feu, Mit­terand “idol­ized” Mar­shall Petain, head of the Vichy col­lab­o­ra­tionist gov­ern­ment. Evi­dence sug­gests that his he was an under­ground agent of the Third Reich and appears to have per­pet­u­at­ed that rela­tion­ship into the post­war peri­od.

For those who might dis­miss all of this as state­craft and/or cor­po­rate maneu­ver­ing, we con­clude the broad­cast by not­ing that Udo Voigt of Ger­many’s NPD–its top neo-Nazi party–has been appoint­ed to the Euro­pean Par­lia­men­t’s Civ­il Rights Com­mit­tee!

Pro­gram High­lights Include: For­mer Lux­em­bourg intel­li­gence chief Mar­co Mille’s res­ig­na­tion to become head of secu­ri­ty for Siemens; review of Gus­tav Koenigs’ advo­ca­cy of what was to become the Euro­pean Mon­e­tary Union; the rela­tion­ship of Ber­tels­mann AG vet­er­an Mar­tin Sel­mayr and his “pup­pet,” Lux­em­bourg EU com­mis­sion­er Viviane Red­ing; Sel­mayr’s pro­jec­tion as Junck­er’s cab­i­net chief [he was Junck­er’s cam­paign direc­tor dur­ing the lat­ter’s bid to become EU Com­mis­sion Pres­i­dent]; the piv­otal and deci­sive role of EU Com­mis­sion­ers’ cab­i­net chiefs in the for­mu­la­tion of pol­i­cy; review of the EMU as the real­iza­tion of the plans for Euro­pean and world dom­i­na­tion envi­sioned by Friedrich List in the 19th cen­tu­ry; review of the Bush fam­i­ly’s links with the Ham­burg-Ameri­ka Line; Fran­cois Mit­terand’s rela­tion­ship with French Gestapo col­lab­o­ra­tor and “Final Solu­tion” par­tic­i­pant Rene Bous­quet; Bous­quet’s post­war financ­ing of the career of Mit­terand and oth­er key French politi­cians.

1. Angela Merkel’s selec­tion of Jean-Claude Junck­er as Pres­i­dent of the Euro­pean Union Com­mis­sion will see a long-time Ger­man ally and son of a Wehrma­cht com­bat­ant ascend to the pin­na­cle of EU gov­er­nor­ship. Junck­er is a staunch advo­cate of the very aus­ter­i­ty that is already crush­ing much of the con­ti­nent. (As not­ed in FTR #155, The Bor­mann net­work is com­posed to a sig­nif­i­cant extent of the descen­dants of Third Reich alum­ni.)

A pro­tege of Hel­mut Kohl, Junck­er con­tin­ues a pro­found con­nec­tion between Ger­many, Lux­em­bourg and the Third Reich that will be dis­cussed below.

Of great sig­nif­i­cance as well, is the con­trol­ling rela­tion­ship of Ber­tels­mann AG vet­er­an Mar­tin Sel­mayr, the for­mer cab­i­net chief for Lux­em­bourg EU Com­mis­sion­er Viviane Red­ing and Junck­er’s cam­paign direc­tor dur­ing his run to become Pres­i­dent of the EU Com­mis­sion. The EU Com­mis­sion­er of Jus­tice, she appears to have been effec­tive­ly con­trolled by Sel­mayr.

Sel­mayr is also pro­ject­ed to be the chief of Junck­er’s cab­i­net. Note­wor­thy in this con­text, is the fact that EU Com­mis­sion­ers’ cab­i­net chiefs can exer­cise deci­sive and unim­peach­able polit­i­cal influ­ence in EU gov­er­nance.

Ger­mans also dom­i­nate many of the oth­er key EU gov­ern­ing posi­tions.

“Par­tic­u­lar­ly Close to Ger­many”; german-foreign-policy.com; 6/30/2014.

With Jean-Claude Junck­er, Ger­many will have a politi­cian as Pres­i­dent of the EU Com­mis­sion, who has always been a close ally. Junck­er says that “since his ear­li­est youth,” he has “always felt par­tic­u­lar­ly close” to Ger­many, an affin­i­ty that “grew even stronger” in lat­er years. The for­mer prime min­is­ter of Lux­em­burg is seen as for­mer Ger­man Chan­cel­lor Hel­mut Kohl’s pro­tégé and as the “medi­a­tor” in Ger­many’s inter­ests, where­in he had also won France over to accept Ger­many’s stand­point on an eco­nom­ic and mon­e­tary union. The tran­si­tion from the Bar­roso cab­i­net to that of Junck­er will be coor­di­nat­ed by the Ger­man nation­al, Mar­tin Sel­mayr, who had pre­vi­ous­ly been employed as cab­i­net direc­tor of the EU Com­mis­sion­er for Jus­tice, Viviane Red­ing, (Lux­em­burg) and was con­sid­ered to “actu­al­ly be the Com­mis­sion­er of Jus­tice.” He is also con­sid­ered to become cab­i­net direc­tor of Junck­er’s office as Pres­i­dent of the Com­mis­sion. Ger­mans are at deci­sive posts on the Coun­cil of Min­is­ters as well as in the Euro­pean Par­lia­ment, for exam­ple as par­lia­men­tary group whips, and the Ger­man nation­al, Mar­tin Schulz is being con­sid­ered for the next pres­i­den­cy of the par­lia­ment. An influ­en­tial Ger­man jour­nal com­ment­ed on the con­cen­tra­tion of Ger­mans at the lead­er­ship lev­el of the EU’s bureau­cra­cy with “The EU speaks Ger­man.”

Kohl’s Pro­tégé

Accord­ing to both his own admis­sions and the views of his detrac­tors, Jean-Claude Junck­er has, from the very begin­ning, been — both per­son­al­ly as well as polit­i­cal­ly — Ger­many’s close ally. “I have always felt par­tic­u­lar­ly close to Ger­many — since my ear­li­est youth,” he said in Novem­ber 2013. “That has remained so, and even, in fact, grown stronger.” Junck­er traces this affin­i­ty back to the fact that his father, who served in the Ger­man Wehrma­cht dur­ing the Sec­ond World War, had raised him to be “pro-Ger­man.” That had been “one of his life accom­plish­ments.” “Not every­one could achieve that after the Sec­ond World War.”[1] Polit­i­cal­ly, the EU Com­mis­sion’s pres­i­dent-elect is con­sid­ered to have been for­mer Ger­man Chan­cel­lor Hel­mut Kohl’s pro­tégé. In the 1980s, the Prime Min­is­ter of Lux­em­burg, Jacques San­ter, “intro­duced” his employ­ee, Junck­er, “to Euro­pean pol­i­tics,” accord­ing to a crit­i­cal ret­ro­spec­tion on his polit­i­cal biog­ra­phy. Kohl then trans­formed him “into a Euro­pean polit­i­cal author­i­ty.” “I owe my influ­ence in Europe to him,” Junck­er admit­ted in Octo­ber 2012.[2] Already in 1988 — at the unusu­al­ly ear­ly age of 33 — Junck­er was award­ed Ger­many’s “Fed­er­al Cross of Mer­it”. “You have more than lived up to the hopes placed in you in 1988,” praised Chan­cel­lor Angela Merkel, Novem­ber 8, 2013, as she award­ed him the sec­ond high­est nation­al award — the “Grand Cross of the Order of Mer­it”.

Open­ing Doors

Merkel must have also been think­ing of Junck­er’s sig­nif­i­cance for the — large­ly suc­cess­ful — efforts to impose Ger­man posi­tions over those of France with­in the EU. “Not only are the Lux­em­bourg­er accus­tomed to the lan­guages, the per­cep­tions, the cul­tures of both coun­tries — France and Ger­many, they also know how to effec­tive­ly rec­on­cile one with the oth­er,” observed Merkel in Novem­ber 2013, in ref­er­ence to Lux­em­burg’s his­tor­i­cal expe­ri­ence of vac­il­lat­ing between the major pow­ers, Ger­many and France. That facil­i­tates “open­ing doors in Europe that were thought to have been locked.”[3] Crit­ics explain this allu­sion to polit­i­cal pol­i­cy with the exam­ple of a Ger­man-French dis­pute in 1996: “Dur­ing nego­ti­a­tions on the essen­tial cri­te­ria to be ful­filled by a coun­try to join the eco­nom­ic and mon­e­tary union, Kohl sent the Lux­em­bourg­er to sound out the French. Togeth­er with Ger­many’s Min­is­ter of Finance, Theo Waigel, Junck­er was able to win the French gov­ern­men­t’s sup­port for an inde­pen­dent Euro­pean Cen­tral Bank, pat­terned upon the Ger­man model.”[4]

Bal­ance No Longer Nec­es­sary

The fact that the Ger­man Chan­cel­lor has now imposed Junck­ers nom­i­na­tion, in par­tic­u­lar against Great Britain’s strong resis­tance, is a reflec­tion of Ger­many’s uncon­test­ed hege­mon­ic pow­er over the EU. In 2004, Lon­don with­drew Chris Pat­ten, its — major­i­ty favored — can­di­date, because Paris was opposed to his can­di­da­ture. Back in those days, a cer­tain bal­ance in the inter­ests of the EU’s main pow­ers was still seen as more or less indis­pens­able. Today, this is no longer the case, in any case, as far as Berlin is con­cerned. In Great Britain, Junck­er has been met with absolute rejec­tion, regard­less of par­ty affil­i­a­tion. Even the Ger­man press has had to admit that in Great Britain “almost no one” con­sid­ers him “an appro­pri­ate choice.”[5] The idea of begin­ning to search for a more con­sen­su­al com­pro­mise can­di­date — as had been rou­tine pro­ce­dure, in such cas­es in the past — was smug­ly dis­missed in Berlin. “Since Prime Min­is­ter Cameron was unwill­ing to give in on the con­tro­ver­sy over Junck­er” he had to be out­vot­ed accord­ing to the media. “The major­i­ty deci­sion ... had become inevitable.”[6]

Actu­al­ly the Com­mis­sion­er

Junck­er owes his new post to not only the Ger­man Chan­cel­lor, but to the head of his elec­tion cam­paign team, the Ger­man nation­al, Mar­tin Sel­mayr. Sel­mayr, had head­ed — from 2001 to 2004 — Ger­many’s Ber­tels­mann AG’s EU Mis­sion, to then begin work as speak­er of the Lux­em­bourg­er EU Com­mis­sion­er, Viviane Red­ing, where, in 2010, he was pro­mot­ed to become her cab­i­net direc­tor, when she began pre­sid­ing over the com­mis­sion’s jus­tice depart­ment. Red­ing allowed him “so much lee­way in the plan­ning and elab­o­ra­tion of new pro­pos­als” that “some in Brus­sels began to see her as the doll, and Sel­mayr as the ven­tril­o­quist,” accord­ing to one report. More than a few peo­ple began to con­sid­er him “to actu­al­ly be the com­mis­sion­er.” Begin­ning this week, Sel­mayr will take charge of coor­di­nat­ing the tran­si­tion from Bar­roso’s cab­i­net to Juncker’s.[7] Some observers are spec­u­lat­ing that even­tu­al­ly, he may be called to head Junck­er’s cab­i­net. The head of Com­mis­sion Pres­i­dent José Manuel Bar­roso’s cab­i­net — Junck­er’s pre­de­ces­sor — was Johannes Lait­en­berg­er, also a Ger­man nation­al. In Brus­sels, this post is seen as extreme­ly impor­tant. The head of the cab­i­net directs the bureau­cra­cy’s dai­ly func­tion­ing and can, as is the case of state sec­re­taries in Ger­man min­istries, exer­cise a deci­sive influ­ence over polit­i­cal pri­or­i­ties and their imple­men­ta­tion — usu­al­ly obscured from pub­lic atten­tion and beyond any con­straints of demo­c­ra­t­ic legit­i­ma­tion.

Gen­er­al Sec­re­taries

Ger­man offi­cials hold top posi­tions in oth­er cen­tral EU insti­tu­tions. For exam­ple, since mid-2011, the Gen­er­al Sec­re­tary of the Coun­cil of Min­is­ters — with a staff of about 2,500 — is a Ger­man nation­al. Gen­er­al Sec­re­tary Uwe Corsepius pre­vi­ous­ly head­ed the Europe Sec­tion of the Ger­man Chan­cellery. The head of the Euro­pean Sta­bil­i­ty Mech­a­nism (ESM) is Klaus Regling, who already from 2001 to 2008 had been in a lead­ing posi­tion in Brus­sels, as the Direc­tor Gen­er­al of the Euro­pean Com­mis­sion’s Eco­nom­ic and Finan­cial Affairs direc­torate. Pre­vi­ous to his appoint­ment in Brus­sels, Regling had served as Direc­tor-Gen­er­al for Euro­pean and Inter­na­tion­al Finan­cial Rela­tions in the Ger­man Min­istry of Finance.[8] Klaus Welle, anoth­er Ger­man, is the Gen­er­al Sec­re­tary of the Euro­pean Par­lia­ment — the par­lia­men­t’s high­est rank­ing offi­cial. Welle is accred­it­ed with the idea of hav­ing one of the top can­di­dates of the Euro­pean elec­tions become Pres­i­dent of the EU Com­mis­sion. Junck­er, who has ben­e­fit­ted from this, has promised to work more close­ly in the future with the par­lia­ment.

Ger­man Led

Aside from its Ger­man Gen­er­al Sec­re­tary, the par­lia­ment is, itself exposed to a pre­dom­i­nat­ing Ger­man influ­ence. Of its 751 par­lia­men­tar­i­ans, 96 are from Ger­many — more than an eighth of the par­lia­men­tar­i­ans — one-fourth more than the sec­ond in line, France, with 74 par­lia­men­tar­i­ans. Since Jan­u­ary 2012, the Euro­pean Par­lia­men­t’s pres­i­dent has been Mar­tin Schulz, of the Ger­man SPD, who, June 18, was elect­ed — pro­vi­sion­al­ly — chair of the Social Demo­c­ra­t­ic par­lia­men­tary group, but intends to assume this post, also in the future. The con­ser­v­a­tive Euro­pean Peo­ple’s Par­ty (EPP) par­lia­men­tary group is presided over by Man­fred Weber of the Ger­man CSU Par­ty; one of the two co-Chairs of the Green Par­lia­men­tary Group is Rebec­ca Harms, also of the Ger­man Greens. The mem­ber of the Ger­man Left Par­ty, Gabi Zim­mer, was con­firmed on June 19 as chair of the Euro­pean Unit­ed Left/Nordic Green Left (GUE/NGL). She had suc­ceed­ed Lothar Bisky (Ger­man Left Par­ty) in March 2012. Four of the sev­en EU par­lia­men­tary groups are under Ger­man lead­er­ship.

[1] Bun­deskan­z­lerin Angela Merkel und Pre­mier­min­is­ter Jean-Claude Junck­er zur Über­gabe des Ver­di­en­stkreuzes an Junck­er. Mese­berg, 8. Novem­ber 2013.
[2] Lau­rent Schmit, Jür­gen Stoldt, Bernard Thomas: Der Mann ohne Eigen­schaften. Jean-Claude Junck­er zu seinem dreißig­sten Regierungsju­biläum. forum 324 (2012).
[3] Bun­deskan­z­lerin Angela Merkel und Pre­mier­min­is­ter Jean-Claude Junck­er zur Über­gabe des Ver­di­en­stkreuzes an Junck­er. Mese­berg, 8. Novem­ber 2013.
[4] Lau­rent Schmit, Jür­gen Stoldt, Bernard Thomas: Der Mann ohne Eigen­schaften. Jean-Claude Junck­er zu seinem dreißig­sten Regierungsju­biläum. forum 324 (2012).
[5] Jochen Buch­stein­er: Don Cameron. Frank­furter All­ge­meine Zeitung 27.06.2014.
[6] Jean-Claude Junck­er als EU-Kom­mis­sion­spräsi­dent nominiert. Frank­furter All­ge­meine Zeitung 28.06.2014.
[7], [8] Hen­drick Kaf­sack, Wern­er Mus­sler: Die EU spricht deutsch. www.faz.net 26.06.2014. See In Brüs­sel stark vertreten.

2. For decades, we’ve spo­ken of the “Strat­e­gy of Tension”–the pro­gram of ter­ror­ism designed to dis­cred­it and crim­i­nal­ize oppo­si­tion polit­i­cal forces and jus­ti­fy the impo­si­tion of anti-demo­c­ra­t­ic statutes.

Even­tu­al­ly, the Ital­ian “Strat­e­gy of Ten­sion”Glad­io– was revealed as part of a NATO pro­gram called “Stay  Behind,” through which secu­ri­ty ser­vices used fas­cist cadres to imple­ment the ter­ror. (The cadres were osten­si­bly designed to fos­ter gueril­la-style resis­tance in case of a suc­cess­ful Sovi­et inva­sion or com­mu­nist takeover in those coun­tries.)

In FTR #44, we ana­lyzed Stay Behind/Gladio’s ori­gins with Nazi/BND spy chief Rein­hard Gehlen and the ODESSA post­war SS net­work.

Merkel’s choice to be Pres­i­dent of the Euro­pean Com­mis­sion, Lux­em­bourg’s for­mer prime min­is­ter Jean-Claude Junck­er, was forced to resign because of a scan­dal in which Mar­co Mille, that coun­try’s intel­li­gence chief, secret­ly record­ed a con­ver­sa­tion with Junck­er about Stay Behind/Gladio. Mille was him­self a par­tic­i­pant in Gladio/Stay Behind.

We note sev­er­al things in con­nec­tion with this scan­dal:

  • After resign­ing as the head of Lux­em­bourg’s intel­li­gence ser­vice, Mar­co Mille became chief of secu­ri­ty for Siemens, one of Ger­many’s core cor­po­ra­tions and an enti­ty inex­tri­ca­bly linked with the BND and the Under­ground Reich. 
  • The con­ver­sa­tion taped by Mar­co Mille appar­ent­ly impli­cat­ed the Grand Ducal fam­i­ly of Lux­em­bourg, who have a long-stand­ing rela­tion­ship with Ger­many and the Bor­mann cap­i­tal net­work, as will be exam­ined below.
  • Hav­ing helped to imple­ment the estab­lish­ment of the Euro, Junck­er is now a cham­pi­on of the Ger­man-man­dat­ed aus­ter­i­ty doc­trine that is crush­ing much of Europe.
  • We won­der if the Mar­co Mille gam­bit may have been intend­ed to maneu­ver Junck­er into the posi­tion of Euro­pean Com­mis­sion Pres­i­dent?

“Good­bye Mr. Euro? Jean-Claude Junck­er May Be Back Soon” by Hans-Jür­gen Schlamp; Der Spiegel; 7/11/2013.

Jean-Claude Junck­er, prime min­is­ter of Lux­em­bourg and Europe’s longest-serv­ing leader, stepped down on Wednes­day over his impli­ca­tion in a spy­ing scan­dal. But both his friends and his adver­saries believe a come­back is like­ly. . . .

. . . . He helped found the Euro­pean Union and cre­ate the com­mon Euro­pean cur­ren­cy. He is some­times known as “Mr. Euro.”

. . . . In the 1980s, Lux­em­bourg spies were involved in a puz­zling series of bomb­ings, the cir­cum­stances of which remain unclear today. Togeth­er with mil­i­tary and intel­li­gence agents from mul­ti­ple Euro­pean coun­tries, they were part of Oper­a­tion Glad­io, a clan­des­tine ille­gal para­mil­i­tary orga­ni­za­tion. They worked as a par­al­lel police force with­in the coun­try that did what they liked and spied on whomev­er they want­ed, when­ev­er they want­ed. Even the prime min­is­ter, their con­sti­tu­tion­al­ly defined boss, could not rein them in.

Accord­ing to the par­lia­men­tary report, intel­li­gence chief Mar­co Mille report­ed to Junck­er in Jan­u­ary 2007 wear­ing a spe­cial high-tech wrist­watch. It record­ed the entire talk. The mat­ter was extreme­ly tricky because the con­ver­sa­tion allud­ed to the pos­si­ble involve­ment of the Grand Ducal fam­i­ly. But Junck­er did­n’t bring it to their atten­tion until the end of 2008. Even then he did­n’t take dras­tic mea­sures. Mille remained in office until 2010, when he became head of secu­ri­ty for Siemens. . . .

3. After the Third Reich’s con­quest of Europe, Lux­em­bourg’s econ­o­my was fold­ed into “Europa Ger­man­i­ca,” with Gus­tav Koenigs, Chair­man of the Bush-Fam­i­ly linked Ham­burg-Ameri­ka Line and Sec­re­tary of State of the Third Reich over­see­ing the steel car­tel ARBED, as well as much of the rest of Lux­em­bourg’s oth­er busi­ness.

Mar­tin Bor­mann: Nazi in Exile by Paul Man­ning; Copy­right 1981 by Paul Man­ning; Lyle Stu­art [HC]; ISBN 0–8184-0309–8; pp. 79–80.

. . . . A sim­i­lar pat­tern was devel­oped for Lux­em­bourg, a coun­try small­er than Rhode Island, whose prin­ci­pal indus­try is iron and steel. The Ger­mans annexed Lux­em­bourg, as they did Alsace-Lor­raine, and it became an admin­is­tered ter­ri­to­ry, like Poland, Bel­gium, and Hol­land, where local nation­als did not serve as gov­ern­ment. Gus­tav Koenigs, chair­man of Ham­burg-Ameri­ka ship­ping line and a direc­tor of many com­pa­nies, was appoint­ed Reich trustee of ARBED, an impor­tant Lux­em­bourg steel car­tel, by the Ger­man Min­istry of Eco­nom­ics. There were in ARBED 250,000 shares out­stand­ing, the major­i­ty held by Lux­em­bourg­ers, Bel­gians, and French, in that order. Ger­man share­hold­ers, large­ly through their banks, account­ed for 54,747 shares. Some were held by British and Amer­i­cans through their secret accounts in Swiss banks. A shift in con­trol was made when Gus­tav Koenigs, as Reich trustee, also became trustee of the Bel­gian- and French-held shares. On April 19, 1943, a share­hold­ers’ meet­ing was held in Lux­em­bourg city, and the cap­i­tal of the com­pa­ny was con­vert­ed from francs into Reichs­marks.

ARBED was recap­i­tal­ized at 300 mil­lion Reich­marks ($120 mil­lion), and under Ger­man direc­tion the car­tel became the third largest iron and steel com­pa­ny in Europe, rank­ing behind only Germany’s Vere­inigte Stahlw­erke [lat­er re-named Thyssen A.G., anoth­er Bush-fam­i­ly linked business–D.E.] and the Goer­ing Steel Works. A sales com­pa­ny was then formed under the name of Lux­em­bourg Iron & Steel Com­pa­ny to mar­ket all ARBED prod­ucts through­out Europe. It was cap­i­tal­ized at RM 1.5 mil­lion. To fur­ther tight­en Ger­man con­trol over the iron and steel out­put of this small, moun­tain­ous coun­try, all of the iron mines in Lux­em­bourg were com­bined and amal­ga­mat­ed into one uni­fied asso­ci­a­tion under Ger­man direc­tion. This asso­ci­a­tion was named “Luet­zel­lurg,” and its advi­so­ry board was appoint­ed by the chief of the Ger­man civ­il admin­is­tra­tion. Gus­tav Koenigs, as Reich trustee of ARBED, served as pres­i­dent of Luet­zel­lurg. The two prin­ci­pal Ger­man banks, Deutsche Bank and Dres­d­ner Bank, had assumed 73 per­cent own­er­ship of the Banque Générale de Lux­em­bourg and the Banque Inter­na­tion­al de Lux­em­bourg in May 1940. They bought major­i­ty shares of the two Lux­em­bourg banks from the Bel­gian and French banks, where they had increased their share­hold­ings to a con­trol­ling inter­est. Both Com­merzbank and the Deutschen Arbeit banks estab­lished branch­es in Lux­em­bourg. . . . .

4. After the war, Lux­em­bourg was fold­ed into the remark­able and dead­ly Bor­mann cap­i­tal orga­ni­za­tion, with the Grand Ducal fam­i­ly front and cen­ter in the con­tin­u­a­tion of the Ger­man-Lux­em­bourg con­nec­tion. Note that the con­ver­sa­tions secret­ly record­ed by Mar­co Mille impli­cat­ed the Grand Ducal fam­i­ly in the Glad­io bomb­ings.

The Under­ground Reich hand in the Lux­em­bourg eco­nom­ic glove has its res­o­nance in the rela­tion­ships between Kohl, Merkel  and Mar­tin Sel­mayr and Junck­er and Viviane Red­ing

Mar­tin Bor­mann: Nazi in Exile by Paul Man­ning; Copy­right 1981 by Paul Man­ning; Lyle Stu­art [HC]; ISBN 0–8184-0309–8; pp. 155–156.

. . . . Even Grand Duchess Char­lotte of Lux­em­bourg had her own ideas, and they didn’t jibe with those of the U.S. inves­tiga­tive team dis­patched to her tiny coun­try to set things right. Upon her return from exile in Lon­don and Mon­tre­al, she prompt­ly dis­missed the U.S. inves­tiga­tive mis­sion, which had been attempt­ing to uncov­er secrets of the Ger­man-Lux­em­bourg steel car­tel. Elbert D. Thomas of Utah, when he was chair­man of the U.S. Sen­ate sub­com­mit­tee on mil­i­tary affairs, com­ment­ed in Wash­ing­ton on June 26, 1945: “We had a mis­sion in Lux­em­bourg which was obtain­ing quite a bit of infor­ma­tion on the steel car­tel until the Grand Duchess returned. Infor­ma­tion was then blocked off from us and the mis­sion had to retire with what infor­ma­tion they had already col­lect­ed. There was much to learn about the way in which small states like Lux­em­bourg had been used by the car­tels. The episode sug­gests that some rulers, whom we have befriend­ed, may be expect­ed to assist the cartelists in their post­war efforts to regain dom­i­nance.”

What the grand duchess learned from her finance min­is­ter on her return to Lux­em­bourg was sim­ple: “Don’t tam­per with the mon­ey machine. We made record prof­its dur­ing the Ger­man era, and there is every indi­ca­tion we will be going into an even greater peri­od of pros­per­i­ty, once Ger­many recov­ers. They will then con­tin­ue to be our biggest cus­tomer. All that is required now is a read­just­ment in stock own­er­ship to please Bel­gian, French, British, and Amer­i­can share­hold­ers, which will be done.” Open Ger­man stock own­er­ship was reduced to its for­mer posi­tion of about 20 per­cent in Lux­em­bourg indus­try and the Ger­man trustee was elim­i­nat­ed. But at board meet­ings, Bel­gian and French banks vot­ed as blocs on behalf of stock­hold­ers in Ger­many. The Ger­man voice in the wings was still there, and as time went on in Lux­em­bourg, increas­ing­ly the voice could be heard loud and clear-the cus­tomer speak­ing to the sell­er, the equal­iz­er of the mar­ket­place. Grand Duchess Char­lotte, who was to retire dur­ing the six­ties to be suc­ceed­ed by her son, Grand Duke Jean, always believed that the new pros­per­i­ty of Lux­em­bourg after the war was tes­ti­mo­ny to her deci­sion in 1945 not to per­mit inter­fer­ence with the Ger­man finan­cial and indus­tri­al appa­ra­tus. The Ger­man banks, Deutsche and Dres­d­ner, remained in posi­tion and the Lux­em­bourg finan­cial com­mu­ni­ty con­tin­ued to look to Frank­furt rather than to Zurich, Lon­don, and New York for finan­cial guid­ance. ARBED (its sales orga­ni­za­tion in New York City is Amer­lux Prod­ucts) con­tin­ues as a pow­er­ful and pros­per­ous steel car­tel close­ly tied to its Ger­man men­tors.

By 1980 Lux­em­bourg was to become a new cen­ter for gold buy­ing in Europe, with West Ger­man banks sell­ing the equiv­a­lent of $1.4 bil­lion in gold to hold­ers in Lux­em­bourg. The chief attrac­tion was the lack of a val­ue-added tax, a form of sales tax. . . . .

5. In addi­tion to his role as the head of the Ham­burg-Ameri­ka Line and the lynch­pin of the Nazi/Luxembourg eco­nom­ic con­nec­tion, Gus­tav Koenigs was Sec­re­tary of State of the Third Reich. He artic­u­lat­ed the vision of what was to become the Euro­pean Mon­e­tary Union at a 1942 con­fer­ence about the Euro­pean Eco­nom­ic Com­mu­ni­ty.

Europais­che Wirtschafts Gemein­schaft (Euro­pean Eco­nom­ic Community–translation).

. . . At the moment the so-called “Euro­pean Eco­nom­ic Com­mu­ni­ty” is not yet fact; there is no pact, no organ­i­sa­tion, no coun­cil and no Gen­er­al Sec­re­tary. How­ev­er, it is not just a part of our imag­i­na­tion or some dream by a politi­cian — it is very real. . . .

. . .  Its roots are in the eco­nom­ic co-oper­a­tion of the Euro­pean nations and it will devel­op after the war into a per­ma­nent Euro­pean eco­nom­ic com­mu­ni­ty. . . .

6. “Mr. Euro”–Jean-Claude Junck­er was not the only cham­pi­on of the Euro among Euro­pean heads of state.

As the Euro­zone debt cri­sis con­tin­ues, it may be use­ful to pon­der a lit­tle known aspect of the back­ground of for­mer French pres­i­dent Fran­cois Mit­terand, the man who [offi­cial­ly] insist­ed on the for­ma­tion of the com­mon Euro­pean cur­ren­cy.

As dis­cussed in Mis­cel­la­neous Archive Show M61Mit­terand had a his­to­ry of par­tic­i­pa­tion in, and col­lab­o­ra­tion with, the French fas­cists who desta­bi­lized French democ­ra­cy in the years before World War II and active­ly sub­vert­ed the French mil­i­tary resis­tance to the Ger­man inva­sion of 1940. (The infor­ma­tion about Mit­terand is on side 1c.)

Mit­terand idol­ized Marechal Petain, the head of the Vichy col­lab­o­ra­tionist gov­ern­ment in France.

Mit­terand was asso­ci­at­ed with the Cagoule and Croix de Feu, French fas­cist orga­ni­za­tions that attempt­ed to over­throw the French gov­ern­ment in 1938, much as U.S. fas­cists attempt­ed to elim­i­nate Roo­sevelt in 1934. Under­min­ing the French defens­es, these same ele­ments real­ized their goal when the invad­ing Ger­mans cre­at­ed the col­lab­o­ra­tionist Vichy gov­ern­ment.

Mit­terand’s asso­ci­a­tion with French fas­cist Rene Bous­quet extend­ed decades into the post­war peri­od. Bous­quet helped finance Mit­terand’s post­war polit­i­cal career. Details of Bous­quet’s polit­i­cal career and Mit­terand’s asso­ci­a­tion with him are cov­ered in detail below.

A num­ber of con­sid­er­a­tions sug­gest them­selves in this regard:

  • Was Mit­terand actu­al­ly a dou­ble for the Axis dur­ing the war?
  • Was Mit­terand’s “escape” from a POW camp dur­ing the war a cov­er for his sub­se­quent infil­tra­tion of the French Resis­tance on behalf of the Ger­mans and Vichy?
  • Was Mit­terand a deep-cov­er oper­a­tive for the Under­ground Reich in the post­war peri­od?
  • Was he a will­ing, con­scious fas­cist through­out, or [per­haps] sub­ject to polit­i­cal black­mail, manip­u­lat­ed by the threat of reveal­ing his pre­war and wartime activ­i­ties?
  • Was Mit­terand’s insis­tence on a com­mon Euro­pean cur­ren­cy because of his fear of a re-uni­fied Ger­many or because he was actu­al­ly aid­ing in the real­iza­tion of the strat­a­gem of Friedrich List, as envis­aged by the Third Reich? (For more detailed dis­cus­sion of this, see–among oth­er pro­grams–FTR #746.)
  • In light of the con­tin­ued post­war Ger­man dom­i­na­tion of the  French econ­o­my, we might see Mit­terand’s behav­ior as ful­fill­ment of pol­i­cy embraced by the French pow­er elite–junior part­ners with their busi­ness asso­ciates in the Fed­er­al Repub­lic. (This is dis­cussed at some length in sec­tions 28 through 31 in FTR #305. There is an excel­lent pre­sen­ta­tion of the inter­lock­ing of French and Ger­man cor­po­rate inter­ests in the steel indus­try and the posi­tion they mutu­al­ly occu­pied in the Inter­na­tion­al Steel Car­tel on pages 34–37 of James Stew­art Mar­t­in’s All Hon­or­able Men.)
  • In addi­tion to reflect­ing on Mit­terand’s past, we will also high­light the endeav­ors of Robert Zoel­lick in the con­text of Ger­man reuni­fi­ca­tion. Zoel­lick recent­ly con­firmed that Mit­terand insist­ed on the estab­lish­ment of a com­mon cur­ren­cy as pre-con­di­tion for Ger­man  reuni­fi­ca­tion. Zoel­lick was a prin­ci­pal archi­tect of that reuni­fi­ca­tion, as well as a prob­a­ble oper­a­tive on behalf of the Under­ground Reich.
  • We should not lose sight of the fact that it is large­ly the advent of the euro itself that has brought about the finan­cial cri­sis  in Greece, Italy, Por­tu­gal and Spain.

“A Euro Pow­er Play that Back­fired” by Oliv­er Mark Hartwich; Busi­ness Spec­ta­tor; 8/17/2011.

To ful­ly appre­ci­ate the sub­tle ironies of the euro cri­sis it takes a sense for his­to­ry. Europe’s com­mon cur­ren­cy has prac­ti­cal­ly achieved the very oppo­site of what its cre­ators orig­i­nal­ly intend­ed. Instead of fram­ing the Ger­mans in Europe, the cri­sis has ele­vat­ed Ger­many to the continent’s new, albeit reluc­tant, hege­mon. For­mer French Pres­i­dent François Mit­ter­rand must be spin­ning in his grave.

Last Sun­day, the Asia Soci­ety host­ed a din­ner for World Bank Pres­i­dent Robert Zoel­lick in Syd­ney. His warn­ings about a fur­ther esca­la­tion of the debt cri­sis were wide­ly report­ed, and the high-cal­i­bre audi­ence cer­tain­ly appre­ci­at­ed his views on the state of emerg­ing mar­kets. How­ev­er, Zoel­lick also gave a fas­ci­nat­ing insight into the ear­ly his­to­ry of Euro­pean mon­e­tary union.

After the fall of the Berlin Wall in Novem­ber 1989, Zoel­lick was the lead US offi­cial in the ‘two-plus-four’ nego­ti­a­tions that pre­pared Germany’s re-uni­fi­ca­tion in Octo­ber 1990 (so named after the two Ger­man states and the four allied forces – Britain, France, the Sovi­et Union and the US). He was thus inti­mate­ly involved in the diplo­mat­ic bal­anc­ing act of uni­fy­ing Ger­many while reas­sur­ing the British and the French that they had noth­ing to fear from this new and big­ger coun­try in the heart of Europe. For his achieve­ments, Zoel­lick was even made a Knight Com­man­der of the Ger­man order of mer­it, a very high award for a for­eign nation­al[Ital­ics are mine–D.E.]

British Prime Min­is­ter Mar­garet Thatch­er was hor­ri­fied about the prospect of a unit­ed Ger­many. “We beat the Ger­mans twice, and now they’re back,” she alleged­ly told a meet­ing of Euro­pean lead­ers at the time. Thatch­er even invit­ed his­to­ri­ans to a sem­i­nar at Che­quers to dis­cuss the ques­tion of how dan­ger­ous the Ger­mans real­ly were. Her trade min­is­ter, Nicholas Rid­ley, was forced to resign after he had com­pared Ger­man chan­cel­lor Hel­mut Kohl to Adolf Hitler in an inter­view with The Spec­ta­tor. . . .

. . . There had always been rumours that in the two-plus-four nego­ti­a­tions the French had demand­ed Ger­many to give up its beloved Deutschmark in return for a French ‘oui’ on uni­fi­ca­tion. More than once the dom­i­nance of the über-sol­id Deutschmark had caused the French and oth­er Euro­pean nations pain. Forc­ing the Ger­mans to aban­don their cur­ren­cy would sure­ly be an appro­pri­ate way to weak­en them so they could not become a threat to oth­er nations, the French prob­a­bly thought.

The only prob­lem with this account of his­to­ry is that there is no sol­id evi­dence for it. When Der Spiegel news mag­a­zine report­ed these rumours once again last year, rep­re­sen­ta­tives of the old Kohl gov­ern­ment were quick to dis­pute that there had been any secret deals at the time. “There nev­er was an agree­ment,” Ger­man trea­sur­er Wolf­gang Schäu­ble (who was home sec­re­tary at the time) bold­ly claimed. His pre­de­ces­sor Theo Waigel flat­ly denied any link between uni­fi­ca­tion and the euro.

Such pre­vi­ous denials made Robert Zoellick’s remarks at the Syd­ney din­ner all the more remark­able. Almost in pass­ing, and as if it was the most obvi­ous thing in the world, he explained his under­stand­ing of how Europe got its com­mon cur­ren­cy. And his account con­firmed the rumours that it had a lot to do with Ger­man uni­fi­ca­tion.

As Zoel­lick told his audi­ence (that was prob­a­bly unaware of how con­tro­ver­sial these issues still are in Europe) it was very clear that Euro­pean mon­e­tary union result­ed from French-Ger­man ten­sions before uni­fi­ca­tion and was meant to calm Mitterrand’s fears of an all-too-pow­er­ful Ger­many. Accord­ing to Zoel­lick, the euro cur­ren­cy is a by-prod­uct of Ger­man uni­fi­ca­tion. As one of the key insid­ers in the two-plus-four nego­ti­a­tions, trust­ed and high­ly dec­o­rat­ed by the Ger­mans, nobody would be bet­ter qual­i­fied to know the real sto­ry behind Euro­pean Mon­e­tary Union. Despite all offi­cial denials com­ing from the Ger­man gov­ern­ment until the present day, there are no good rea­sons not to believe Zoellick’s account of the events.

The great his­tor­i­cal irony of this sto­ry is, of course, that if the French had real­ly planned to weak­en the pow­ers of new­ly reunit­ed Ger­many through mon­e­tary union, this attempt has now com­plete­ly back­fired. Sure, the Ger­mans will pay mas­sive­ly for the sake of keep­ing the euro project alive (if they don’t pull out of mon­e­tary union once they realise this). But in strate­gic terms, Germany’s influ­ence has nev­er been greater. As the con­ti­nent wants to bank on Germany’s AAA rat­ing, Berlin can now effec­tive­ly dic­tate fis­cal pol­i­cy to Athens, Lis­bon and Rome – per­haps in the future to Paris, too. . .

. . . As it turns out, the euro is not only an unwork­able cur­ren­cy. It actu­al­ly start­ed as a French insur­ance pol­i­cy against Ger­man pow­er. But even as an insur­ance pol­i­cy it has failed. Against their will, it has turned the Ger­mans into the new rulers of Europe. And it has con­signed France to be the weak­er part­ner in the Fran­co-Ger­man rela­tion­ship.

If Mit­ter­rand had known all this in advance, he would have insist­ed on Ger­many keep­ing the Deutschmark as the price for Ger­man uni­fi­ca­tion. . . .

7. In addi­tion to infor­ma­tion pre­sent­ed in Mis­cel­la­neous Archive Show M61, Mit­terand’s rela­tion­ship with Rene Bous­quet is of great impor­tance in appre­ci­at­ing “the real Mit­terand.” Note that Gestapo col­lab­o­ra­tor and Final Solu­tion par­tic­i­pant Rene Bosquet helped finance much of France’s polit­i­cal left, includ­ing Mit­terand, in the post­war peri­od.

“Mit­terand and the Far Right”; Wikipedia.

. . . The most damming of all charges against Mit­ter­rand and his right wing con­nec­tions is prob­a­bly his long last­ing friend­ship with René Bous­quet, ex secré­taire général of the Vichy police. Charles de Gaulle said of Mit­ter­rand and Bous­quet “they are ghosts who come from the deep­est depths of the col­lab­o­ra­tion.”[24] Georges-Marc Ben­amou quotes Mit­ter­rand as say­ing of Bous­quet “his career shat­tered at the age of 35, it was dread­ful... Bous­quet suf­fered bad­ly. Imag­ine the break, the career shot to pieces”[25] which shows Mit­ter­rand felt that Bous­quet was unde­served­ly bad­ly treat­ed. In 1974, René Bous­quet gave finan­cial help to François Mit­ter­rand for his pres­i­den­tial cam­paign against Valéry Gis­card d’Es­taing. In an inter­view with Pierre Favier et Michel Mar­tin-Roland Mit­ter­rand claimed that he was not the only left wing politi­cian to ben­e­fit from Bous­quet’s mon­ey, as René Bous­quet helped finance all the prin­ci­pal left wing politi­cians from the 1950s to the begin­ning of the 1970s, includ­ing Pierre Mendès France. Worse still after Mit­ter­rand’s 1981 win René Bous­quet was received at the Élysée palace “to talk pol­i­tics”. In an inter­view with Pas­cale Fro­ment (René Bous­quet’s biog­ra­ph­er) Mit­ter­rand declared “I lis­tened to him as a polit­i­cal com­men­ta­tor. He saw me as a con­tin­u­a­tion of his halt­ed career.”[26] Only in 1986, when media crit­i­cism of Bous­quet began to gain in vol­ume, did Mit­ter­rand stop see­ing him and he did not com­ment on the mat­ter until the 1994 inter­view with Jean-Pierre Elkabach.[27] Lionel Jospin com­ment­ed that he was lit­tle impressed by the Pres­i­den­t’s expla­na­tion say­ing “One would have liked a sim­pler and more trans­par­ent rise to pow­er for the leader of the French left dur­ing the 70s and 80s. What I can’t under­stand is the con­tin­u­ing rela­tion­ship into the 80’s with the likes of Bous­quet who orga­nized the mass arrests of Jews”[28] and Charles Fiter­man also felt let down: “these rev­e­la­tions leave the uncom­fort­able impres­sion of hav­ing been deceived by the man. 50 years lat­er we see no trace of regret nor crit­i­cal analy­sis, but a con­tin­u­a­tion of a com­pro­mis­ing rela­tion­ship which casts new light on events such as putting flow­ers on Pétain’s tomb. This seems to show a con­ti­nu­ity in the choic­es of a leader call­ing in favors from a net­work of friends.”[29] Pierre Moscovi­ci, com­ment­ing on Pierre Péan’s book said ” What shocked me is his rub­bing shoul­ders with some­one who was instru­men­tal in state anti­semitism and the ‘final solu­tion’. We can’t tol­er­ate such tol­er­ance of evil, and for me René Bous­quet was absolute evil”[30] and the his­to­ri­an Pierre Miquel com­ment­ing on the TV inter­view said “the com­ments... of the Pres­i­dent of the Repub­lic are part of a dis­course from the right... on the sub­ject of the occupation”[31] . . .

8. In light of Mit­terand’s long-stand­ing, pro­found rela­tion­ship with Bous­quet, more detail about Bous­quet’s wartime activ­i­ties is instruc­tive.

“Rene Bous­quet”; Wikipedia.

. . . . On 2 July 1942, Bous­quet and Carl Oberg pre­pared the arrests known as the Vel’ d’Hiv Roundup (Rafle du Vel’ d’Hiv). Bous­quet per­son­al­ly can­celed orders pro­tect­ing some cat­e­gories of peo­ple from arrests, notably chil­dren under 18 and par­ents with chil­dren under 5. After the arrests, some bish­ops and car­di­nals protest­ed; Bous­quet threat­ened to can­cel tax priv­i­leges for Catholic schools.

Under the pre­text of not sep­a­rat­ing fam­i­lies, Pierre Laval ordered that Jew­ish chil­dren under 16 be includ­ed in depor­ta­tion con­voys, thus sur­pass­ing the require­ments of the Nazis. Bous­quet oblig­ed, per­son­al­ly set­tling that chil­dren under 2 years also be includ­ed. Chil­dren were actu­al­ly deport­ed sep­a­rate­ly from their par­ents.

In Jan­u­ary 1943, he organ­ised with Carl Oberg a mas­sive raid in Mar­seille, known as the Bat­tle of Mar­seille. Dur­ing this repres­sive oper­a­tion, the French police assist­ed the Ger­man police, in par­tic­u­lar in the expul­sion of 30,000 peo­ple from the Old Port, and the sub­se­quent destruc­tion of this neigh­bor­hood, con­sid­ered as too dan­ger­ous and as a “ter­ror­ist nest” by the Ger­man police, because of its wind­ing, small streets. Bous­quet eager­ly offered his ser­vices dur­ing this oper­a­tion. The French police con­trolled the iden­ti­ty of 40,000 peo­ple, and the oper­a­tion suc­ceed­ed in send­ing 2,000 Mar­seillese to the exter­mi­na­tion camps. The oper­a­tion also encom­passed the expul­sion of an entire neigh­bor­hood (30,000 per­sons) before its destruc­tion. For this occa­sion, SS Carl Oberg, in charge of the Ger­man Police in France, made the trip from Paris, and trans­mit­ted to Bous­quet orders direct­ly received from Himm­ler. It is a notable case of the French police’s will­ing col­lab­o­ra­tion with the Nazis.[1]

In April 1943, Bous­quet met with Hein­rich Himm­ler. Himm­ler declared him­self “impressed by Bous­quet’s per­son­al­i­ty”, men­tion­ing him as a “pre­cious col­lab­o­ra­tor in the frame­work of police col­lab­o­ra­tion”. . . .

9. Udo Voigt of Ger­many’s NPD (the Fed­er­al Repub­lic’s largest neo-Nazi par­ty) was appoint­ed to the Euro­pean Par­lia­men­t’s Civ­il Rights Com­mit­tee. In FTR #674, we not­ed that Voigt, the head of the NPD and a Bun­deswehr reservist, was dis­missed from the Ger­man Mil­i­tary Asso­ci­a­tion for racist com­ments about a mem­ber of Ger­many’s World Cup soc­cer team.

“Neo-Nazi Holo­caust Denier Joins EU Par­lia­ment Civ­il Rights Com­mit­tee” by Caitlin Mac­Neal; TPM Livewire; 7/8/2014.

 A neo-Nazi from Germany’s ultra-con­ser­v­a­tive Nation­al Demo­c­ra­tic Par­ty joined the Euro­pean Union’s par­lia­ment in May and on Mon­day took a seat on the body’s Civ­il Rights Com­mit­tee, accord­ing to Jew­ish World News.

Udo Voigt has praised Adolf Hitler as “a great Ger­man states­man” and once claimed that “no more than 340,000″ Jews died in the Holo­caust, as opposed to the 6 mil­lion fig­ure agreed on by his­to­ri­ans, accord­ing to the Guardian.

Voigt led the NDP from 1996 to 2011, and dur­ing that time he led the par­ty in an increas­ingly nation­al­ist direc­tion. In 2009, he was con­victed of glo­ri­fy­ing the Waf­fen SS. The Ger­man court unsuc­cess­fully attempt­ed to out­law the par­ty in 2006, and anoth­er attempt is cur­rently under­way.

Voigt in 2007 con­sid­ered nom­i­nat­ing Rudolf Hess, Hitler’s deputy, for a Nobel Peace Prize. The Guardian has an exten­sive account of his incred­i­bly con­tro­ver­sial actions and state­ments here.

Fol­low­ing out­rage over Voigt’s assign­ment to the Civ­il Rights Com­mit­tee, EU Pres­i­dent Mar­tin Schulz denounced Voigt’s beliefs.


A spokesman for the Euro­pean Jew­ish Con­gress called for mem­bers of the EU par­lia­ment to keep Voigt from gain­ing pub­lic­ity for his views.

“It does the Euro­pean Par­lia­ment no cred­it to have peo­ple sit­ting on its civ­il lib­er­ties com­mit­tee who have obvi­ously not only shown no com­mit­ment to civ­il lib­er­ties, but have sought to under­mine them and to pur­vey a racist and intol­er­ant agen­da through­out their polit­i­cal career,” a spokesman told EurAc­tiv.



3 comments for “FTR #802 The Luxembourg Connection (What the Hell Does Dave Emory Mean by “Underground Reich?” Part 2)”

  1. Here’s an arti­cle about “Mr. Euro” Jean-Claude Junck­er that’s a reminder that his pro-aus­ter­i­ty stances don’t just include endors­ing the EU’s overt aus­ter­i­ty poli­cies of bud­get cuts and tax hikes. There’s also the soft, unof­fi­cial aus­ter­i­ty imposed on nation­al bud­gets that results from turn­ing Lux­em­bourg into an inter­na­tion­al tax-haven:

    The Guardian
    The Observ­er
    Jean-Claude Junck­er’s real scan­dal is his tax-haven home­land of Lux­em­bourg
    The favoured can­di­date for the pres­i­den­cy of the Euro­pean Com­mis­sion has ded­i­cat­ed him­self to mak­ing soci­ety less fair

    Nick Cohen
    The Observ­er, Sat­ur­day 12 July 2014 13.30 EDT

    Com­rades! Allow me to intro­duce to you the Pro­gres­sive Alliance of Social­ists and Democ­rats at the Euro­pean par­lia­men­t’s favoured can­di­date in this week’s elec­tion for the next pres­i­dent of the Euro­pean Com­mis­sion. Fra­ter­nal greet­ings please for Jean-Claude Junck­er.

    I admit that Jean-Claude does not appear at first glance to be the man most like­ly to pro­mote the Euro­pean social­ists’ goal of “ensur­ing that our soci­eties become fair­er”. Nor at a sec­ond, third or fourth glance either. Junck­er has ded­i­cat­ed his career to ensur­ing that soci­ety becomes less fair; that wealthy insti­tu­tions and indi­vid­u­als can avoid the tax­es lit­tle peo­ple and small busi­ness­es must pay. “Every­where do I per­ceive a cer­tain con­spir­a­cy of rich men seek­ing their own advan­tage,” wrote Sir Thomas More in 1516. He might have been describ­ing Mr Junck­er.

    The Grand Duchy of Lux­em­bourg’s Ruri­tan­ian title car­ries a whiff of archa­ic glam­our. But it is noth­ing more than a pirat­i­cal state. The only dif­fer­ence between pirates old and new is that instead of using mus­kets and can­nons to seize oth­er peo­ple’s mon­ey, Lux­em­bourg uses accoun­tants.

    We don’t see it because the EU turns the British upside down. Con­ser­v­a­tives deplore Europe because it threat­ens nation­al sov­er­eign­ty, even though the euro is bring­ing cuts to wel­fare states and wages con­ser­v­a­tives approve of in oth­er cir­cum­stances. The lib­er­al-left thinks of itself as inter­na­tion­al­ist and there­fore bites its tongue and mum­bles its words when the EU pro­motes poli­cies it would con­demn if they came from West­min­ster.

    Please put your prej­u­dices aside, if you can, and con­cen­trate instead on why Lux­em­bourg mat­ters.

    What heavy indus­try the duchy had was van­ish­ing by the ear­ly 1990s. Dur­ing Junck­er’s reign as Lux­em­bourg’s prime min­is­ter from 1995 to 2013, the duchy rein­vent­ed itself as Europe’s largest tax haven: a land fit for Bernie Mad­off to trade through. It allowed con­glom­er­ates to avoid tax through inter­me­di­ate hold­ing com­pa­nies sole­ly.

    BBC’s Panora­ma uncov­ered doc­u­ments that neat­ly illus­trat­ed how the com­pa­nies redis­trib­ute wealth. The UK head­quar­ters of Glax­o­SmithK­line estab­lished a Lux­em­bourg branch in 2009. The sub­sidiary lent £6.34bn to GSK in the UK. The UK com­pa­ny paid near­ly £124m in inter­est back to the Lux­em­bourg sub­sidiary. The rev­enue could not tax the inter­est at the then UK lev­el of 28% and col­lect £34m. Instead, the Lux­em­bourg tax author­i­ties levied a tax of 0.5%, or £300,000. The deal was pin mon­ey by Lux­em­bourg’s stan­dards.

    Vir­tu­al­ly every large British com­pa­ny has moved cap­i­tal through Lux­em­bourg includ­ing, it appears, my man­agers here at the Guardian and Observ­er, though they say such a struc­ture was not about sav­ing the group “any UK cor­po­ra­tion tax when com­pared with an onshore struc­ture”.

    The rev­enue endured the great­est scan­dal in its his­to­ry when it allowed Voda­fone to pay just £1.25bn of an alleged £6bn tax bill from a takeover organ­ised in Lux­em­bourg. The Finan­cial Times esti­mates that Lux­em­bourg’s finan­cial sec­tor has grown from vir­tu­al­ly noth­ing in the 1980s to €3tn today.

    Richard Brooks, the author of The Great Tax Rob­bery, tells me Lux­em­bourg is a far greater men­ace than the Caribbean laun­dro­mats. It ben­e­fits from the Euro­pean Union’s free move­ment of cap­i­tal, while the Cay­man Islands, say, can­not. More dan­ger­ous­ly, it inspires the Nether­lands, Ire­land and oth­er EU states fol­low­ing beg­gar-thy-neigh­bour tax poli­cies to join it in a race to the bot­tom.

    If your ser­vices are being cut or tax­es are going up, if you run a small busi­ness that can­not com­pete with Ama­zon or anoth­er large enti­ty, the odds are that Jean-Claude Junck­er’s Lux­em­bourg has made your life hard­er.

    The basic stan­dards of hon­est gov­ern­ment ought to dis­bar him from the pres­i­den­cy. The Euro­pean Com­mis­sion he pre­sumes to lead is inves­ti­gat­ing the Lux­em­bourg he cre­at­ed. It wants to know how Ama­zon could put £11bn through its Lux­em­bourg-based sub­sidiary in 2013, while pay­ing only £4m in UK cor­po­ra­tion tax on goods sold to British cus­tomers, pack­aged in British ware­hous­es and moved on British roads. Ire­land and the Nether­lands are co-oper­at­ing with the inquiry into illic­it tax advan­tages. Lux­em­bourg, how­ev­er, has com­pelled the com­mis­sion to go to court to secure the rel­e­vant doc­u­ments.

    Junck­er is ask­ing to be put in charge of a Euro­pean Com­mis­sion that is engaged in legal action against his tax regime. He will be super­vis­ing an inves­ti­ga­tion into deals he insist­ed as prime min­is­ter of Lux­em­bourg should remain hid­den. I do not see how he can be trust­ed with such pow­er, not least because the EU’s lax rules place no oblig­a­tion on Junck­er to declare a con­flict of inter­est.


    Posted by Pterrafractyl | July 14, 2014, 5:26 pm
  2. “A spokesman for the Euro­pean Com­mis­sion, Mar­gari­tis Schi­nas, said Mr. Junck­er was “deter­mined to enforce the rules” of the Euro­pean Union in each of the bloc’s 28 mem­ber states. But he added that Mr. Junck­er would not recuse him­self from any even­tu­al deci­sions to be tak­en by the com­mis­sion in cas­es involv­ing Luxembourg’s tax affairs. Mr. Junck­er “can­not abstain” because he pre­sides over the com­mis­sion, Mr. Schi­nas said”. This seems like it’s going to be a prob­lem:

    The New York Times
    Jean-Claude Junck­er, Head of Euro­pean Com­mis­sion, Under Pres­sure Over Lux­em­bourg Tax Rev­e­la­tions


    BRUSSELS — Less than a week after tak­ing over as head of the Euro­pean Union’s exec­u­tive arm, Jean-Claude Junck­er, the for­mer long­time leader of Lux­em­bourg, was buf­fet­ed Thurs­day by a flood of leaked doc­u­ments detail­ing his home country’s role as a haven for hun­dreds of com­pa­nies seek­ing to dras­ti­cal­ly reduce their tax bills.

    While Luxembourg’s finance min­is­ter denounced as ille­gal the unau­tho­rized release of the embar­rass­ing tax doc­u­ments, pres­sure mount­ed on Mr. Junck­er, who was Luxembourg’s prime min­is­ter from 1995 until last year, to clar­i­fy his involve­ment in tax avoid­ance schemes.

    “It is ridicu­lous to claim this was going on unbe­knownst to Junck­er — he was in charge,” Egide Thein, a for­mer direc­tor of the Lux­em­bourg Eco­nom­ic Devel­op­ment Bureau, a gov­ern­ment body, said in a tele­phone inter­view. “Tax eva­sion was a will­ful pol­i­cy of the Lux­em­bourg gov­ern­ment, which always jus­ti­fied this by say­ing it was not its job to act as a tax man for for­eign coun­tries.”

    The doc­u­ments also raised ques­tions about whether Mr. Juncker’s tenure in Lux­em­bourg, a coun­try that the Tax Jus­tice Net­work, a research group in Lon­don, once brand­ed the “death star” of finan­cial secre­cy in Europe, now con­flict­ed with his cur­rent duties, which include enforc­ing fair com­pe­ti­tion between Euro­pean Union coun­tries.

    Tax avoid­ance, as legal ways of slash­ing or even elim­i­nat­ing tax bills are known, has become a high­ly sen­si­tive polit­i­cal issue across Europe. The pub­lic has lit­tle patience for cor­po­rate wel­fare at a time when gov­ern­ments, strug­gling with low eco­nom­ic growth and high unem­ploy­ment, have trimmed their bud­gets, often under pres­sure from the Euro­pean Com­mis­sion.

    The resent­ment has fed grow­ing dis­en­chant­ment with the Euro­pean Union — a malaise that Mr. Junck­er has said he hoped to cure — and, on occa­sion, vio­lent protests. In Brus­sels, the head­quar­ters of the bloc’s admin­is­tra­tive appa­ra­tus, riot police clashed with pro­test­ers on Thurs­day dur­ing a large demon­stra­tion against spend­ing cuts pro­posed by the new Bel­gian gov­ern­ment.

    The leaked tax doc­u­ments, released Wednes­day by the Inter­na­tion­al Con­sor­tium of Inves­tiga­tive Jour­nal­ists, relate to the tax affairs of glob­al com­pa­nies like Pep­si­Co, Ikea and FedEx, and shined a bright light on prac­tices in Lux­em­bourg, a tiny coun­try with less than 550,000 peo­ple that allowed hun­dreds of big com­pa­nies to pay lit­tle tax in the coun­tries where they do much of their busi­ness.

    Mr. Junck­er, who took over as the head of the Euro­pean Com­mis­sion last week­end after divi­sive jock­ey­ing among mem­ber states, did not answer ques­tions on Thurs­day and can­celed a sched­uled pub­lic appear­ance at an event in Brus­sels.

    Sven Giegold, the spokesman on eco­nom­ic and finan­cial pol­i­cy for the Green group in the Euro­pean Par­lia­ment, voiced out­rage over Luxembourg’s poli­cies and ques­tioned Mr. Juncker’s abil­i­ty to act as even­hand­ed arbiter.

    “These rev­e­la­tions are a major blow to the cred­i­bil­i­ty of new com­mis­sion pres­i­dent Junck­er and his capac­i­ty to act for the pub­lic inter­est,” Mr. Giegold said in a state­ment. “The fact that E.U. com­mis­sion pres­i­dent Junck­er served as Luxembourg’s finance and prime min­is­ter through­out this peri­od makes him direct­ly com­plic­it in this mass cor­po­rate tax avoid­ance.”

    Mr. Junck­er dom­i­nat­ed Luxembourg’s eco­nom­ic pol­i­cy for more than two decades, a time when the coun­try was trans­formed into one of the world’s lead­ing bank­ing cen­ters and a low-tax hub. But he also took some steps to change his country’s ways.

    After years of fierce­ly defend­ing bank­ing secre­cy as a nec­es­sary pil­lar of Luxembourg’s pros­per­i­ty, Mr. Junck­er last year bowed to pres­sure from big­ger Euro­pean coun­tries and began a slow retreat that cul­mi­nat­ed recent­ly in a new pol­i­cy allow­ing banks to share infor­ma­tion about for­eign­ers hold­ing accounts with their home coun­tries.

    But Lux­em­bourg, both under Mr. Junck­er and under Xavier Bet­tel, his suc­ces­sor as prime min­is­ter, left in place tax avoid­ance schemes for cor­po­ra­tions that oper­ate there, often out of small offices staffed with accoun­tants and lawyers but doing lit­tle real busi­ness.

    The Euro­pean Com­mis­sion, now led by Mr. Junck­er, does not have the author­i­ty to deter­mine the tax laws of mem­ber states, which zeal­ous­ly guard their sov­er­eign­ty over such mat­ters. But it has begun far-reach­ing inves­ti­ga­tions of whether coun­tries have giv­en ille­gal “state aid” to com­pa­nies by offer­ing them sweet­heart tax deals that cre­at­ed unfair com­pe­ti­tion. Mr. Juncker’s suit­abil­i­ty to over­see such inves­ti­ga­tions fair­ly is now a cen­tral issue.

    A spokesman for the Euro­pean Com­mis­sion, Mar­gari­tis Schi­nas, said Mr. Junck­er was “deter­mined to enforce the rules” of the Euro­pean Union in each of the bloc’s 28 mem­ber states. But he added that Mr. Junck­er would not recuse him­self from any even­tu­al deci­sions to be tak­en by the com­mis­sion in cas­es involv­ing Luxembourg’s tax affairs. Mr. Junck­er “can­not abstain” because he pre­sides over the com­mis­sion, Mr. Schi­nas said.

    The com­ments sug­gest­ed that Mr. Junck­er would fight hard to avoid any curbs on his author­i­ty at such an ear­ly stage in his five-year man­date.

    As head of the com­mis­sion, Mr. Junck­er pre­sides over so-called com­mis­sion­ers, each with a spe­cif­ic pol­i­cy area, includ­ing ones respon­si­ble for tax pol­i­cy and for lead­ing inves­ti­ga­tions into pos­si­ble vio­la­tions of com­pe­ti­tion rules.

    In a state­ment on Thurs­day, Mar­grethe Vestager, the bloc’s com­pe­ti­tion com­mis­sion­er, who is lead­ing inves­ti­ga­tions into tax breaks for Apple, Star­bucks and Ama­zon, avoid­ed any crit­i­cism of Mr. Junck­er, her boss. She said she had not had time to assess the leaked doc­u­ments, which include so-called com­fort let­ters — effec­tive­ly pri­vate tax rul­ings — pro­vid­ed to more than 300 com­pa­nies in Lux­em­bourg.

    The commission’s spokesman, Mr. Schi­nas, announced Mr. Juncker‘s can­cel­ing of his par­tic­i­pa­tion in a con­fer­ence on Thurs­day, imply­ing it had noth­ing to do with the furor over tax avoid­ance. He said Mr. Junck­er had dropped out of “Good Morn­ing Europe,” an event orga­nized by French and Bel­gian news media, because anoth­er pan­elist, Jacques Delors, a for­mer head of the Euro­pean Com­mis­sion, was too ill to attend.


    Posted by Pterrafractyl | November 7, 2014, 8:26 am
  3. So it turns out one of the EU’s top tax-dodg­ing enablers is now the head of the EU Com­mis­sion dur­ing a time when bud­get cuts and aus­ter­i­ty rule the day and ruin lives. That’s not going to awk­ward or any­thing...

    The New York Times
    Jean-Claude Junck­er Breaks Silence Over Lux­em­bourg Tax Issues

    By JAMES KANTERNOV. 12, 2014

    BRUSSELS — Jean-Claude Junck­er, head of the Euro­pean Union’s exec­u­tive arm, took respon­si­bil­i­ty on Wednes­day for the way Lux­em­bourg was run dur­ing his time in charge, break­ing his silence after a flood of embar­rass­ing rev­e­la­tions about his home country’s role as a glob­al tax haven.

    Mr. Junck­er, who was var­i­ous­ly or simul­ta­ne­ous­ly finance min­is­ter, trea­sury min­is­ter and prime min­is­ter of Lux­em­bourg from 1989 to 2013, also crit­i­cized prac­tices in oth­er Euro­pean coun­tries that allowed com­pa­nies to ben­e­fit from unfair­ly low tax rates.

    But there was noth­ing in his past to sug­gest that his “ambi­tion was to orga­nize tax eva­sion in Europe,” Mr. Junck­er said at an unsched­uled appear­ance at a dai­ly news con­fer­ence at the head­quar­ters of the Euro­pean Com­mis­sion, which he now leads.

    Mr. Junck­er has faced a grow­ing furor since Nov. 5, when the Inter­na­tion­al Con­sor­tium of Inves­tiga­tive Jour­nal­ists pub­lished its find­ings after review­ing near­ly 28,000 pages of con­fi­den­tial doc­u­ments. The consortium’s report accused more than 300 com­pa­nies, includ­ing the Pep­si Bot­tling Group, Ikea and FedEx, of ben­e­fit­ing from pref­er­en­tial tax deals with the gov­ern­ment of Lux­em­bourg.

    The leaked doc­u­ments reviewed by the con­sor­tium, which have led to calls for Mr. Juncker’s res­ig­na­tion, includ­ed 548 pri­vate tax rul­ings — some­times known as “com­fort let­ters” — that the con­sor­tium said Lux­em­bourg had pro­vid­ed to cor­po­ra­tions seek­ing favor­able tax treat­ment.

    On Wednes­day, Mr. Junck­er accept­ed that he was “polit­i­cal­ly respon­si­ble for what hap­pened in each and every cor­ner and quar­ter of that coun­try” when he was run­ning Lux­em­bourg.

    But Mr. Junck­er also said, appar­ent­ly refer­ring to the tax sys­tem in his home coun­try, that he was “not the archi­tect of what you could call the Lux­em­bour­gish mod­el, because this Lux­em­bour­gish mod­el doesn’t exist in a full-fledged way.”

    He also said that com­pa­nies that ben­e­fit­ed from rul­ings offer­ing very low or no tax­es were tak­ing advan­tage of “the inter­ac­tion between diver­gent nation­al” laws, which was not the fault of Lux­em­bourg or its admin­is­tra­tion.

    If those dif­fer­ences in tax regimes between coun­tries were “lead­ing to a sit­u­a­tion of non­tax­a­tion, then I would regret that,” he said. He also acknowl­edged mak­ing “a mis­take” by tak­ing a week to respond to the rev­e­la­tions.

    Lat­er on Wednes­day Mr. Junck­er addressed the Euro­pean Par­lia­ment, where some law­mak­ers under­scored that the rev­e­la­tions would fur­ther stoke the anger of ordi­nary cit­i­zens who are reel­ing from the effects of aus­ter­i­ty mea­sures.

    “My first feel­ing, read­ing about the clever tricks played by multi­na­tion­als — even when one is aware of the fact that these things are being done — is indig­na­tion,” said Gian­ni Pit­tel­la, the leader of the Social­ists and Democ­rats group in the Par­lia­ment.

    “Some states, includ­ing Greece, are being put through the mill in the name of aus­ter­i­ty” Mr. Pit­tel­la said. “In oth­er parts of Europe, multi­na­tion­als that should be pay­ing mil­lions of euros, or bil­lions of euros, into pub­lic cof­fers aren’t pay­ing their tax­es.”

    Even so, Mr. Pit­tel­la said that ask­ing Mr. Junck­er to step down would only strength­en the hand of groups seek­ing to weak­en Euro­pean Union insti­tu­tions like the com­mis­sion.

    In his ear­li­er news con­fer­ence, Mr. Junck­er point­ed out that Euro­pean gov­ern­ments had so far failed to cre­ate a so-called com­mon con­sol­i­dat­ed cor­po­rate tax base — a sin­gle set of rules that com­pa­nies oper­at­ing in the Euro­pean Union could use to cal­cu­late tax­able income — as pro­posed by the Euro­pean Com­mis­sion in 2011.

    Mr. Junck­er also announced his back­ing for a leg­isla­tive ini­tia­tive that would require the 28 mem­ber states of the Euro­pean Union to com­mit to auto­mat­i­cal­ly exchang­ing infor­ma­tion on the kinds of tax rul­ings that have drawn crit­i­cism in the past week. That leg­is­la­tion was “an idea I have been toy­ing with for some time,” he said.

    Solv­ing cor­po­rate tax avoid­ance “can’t be a Lux­em­bour­gish answer — it has to be a Euro­pean answer,” he said.

    Some have also voiced con­cern that Mr. Junck­er has con­flicts of inter­est. As pres­i­dent of the Euro­pean Com­mis­sion, he now over­sees the offi­cials inves­ti­gat­ing the tax incen­tives Lux­em­bourg offered to Ama­zon and to a unit of Fiat. Those inves­ti­ga­tions, con­cern­ing so-called state aid, also focus on Apple in Ire­land and Star­bucks in the Nether­lands.

    On Wednes­day, Mr. Junck­er flat­ly refused to recuse him­self from tak­ing part in the final deci­sion in those inves­ti­ga­tions but pledged to allow them to pro­ceed unim­ped­ed.

    “If I were to be seen as exert­ing undue influ­ence, the result of that would be a mas­sive loss of my author­i­ty as pres­i­dent of the com­mis­sion,” he said.

    Asked what would hap­pen if he were to become the sub­ject of the tax inquiries and if he faced ques­tion­ing about his per­son­al role in tax rul­ings in Lux­em­bourg, Mr. Junck­er respond­ed that he would make him­self answer­able to Mar­grethe Vestager, the Euro­pean Union’s com­pe­ti­tion com­mis­sion­er.

    Mr. Junck­er also pledged that his deputy, Frans Tim­mer­mans, a for­mer for­eign min­is­ter of the Nether­lands, would not inter­fere in Ms. Vestager’s inves­ti­ga­tion of the tax affairs of Star­bucks in that coun­try.


    It looks like a defi­ant Junck­er is what’s in store for the EU as the aus­ter­i­ty regime con­tin­ues to grind away at the pop­u­lace. And that means lots of cute respons­es like this are in store for the EU too:

    On Wednes­day, Mr. Junck­er accept­ed that he was “polit­i­cal­ly respon­si­ble for what hap­pened in each and every cor­ner and quar­ter of that coun­try” when he was run­ning Lux­em­bourg.

    But Mr. Junck­er also said, appar­ent­ly refer­ring to the tax sys­tem in his home coun­try, that he was “not the archi­tect of what you could call the Lux­em­bour­gish mod­el, because this Lux­em­bour­gish mod­el doesn’t exist in a full-fledged way.”

    He also said that com­pa­nies that ben­e­fit­ed from rul­ings offer­ing very low or no tax­es were tak­ing advan­tage of “the inter­ac­tion between diver­gent nation­al” laws, which was not the fault of Lux­em­bourg or its admin­is­tra­tion.

    So, yes, Junck­er was “polit­i­cal­ly respon­si­ble for what hap­pened in each and every cor­ner and quar­ter of that coun­try” when he was run­ning Lux­em­bourg, but it was­n’t a true “Lux­em­bour­gish mod­el” sys­tem of tax shel­ter­ing so every­thing is ok. Europe is going to love Junck­er.

    And let’s hope Junck­er was­n’t jok­ing when he pledge that his deputy, Frans Tim­mer­mans of the Nether­lands, would not be inter­fer­ing with the inves­ti­ga­tions of Star­buck­s’s use of the coun­try as a tax shel­ter. That would be the kind of move that runs the risk of cre­at­ing a rather unsa­vory theme for the Junck­er admin­is­tra­tion:

    The New York Times
    Europe Takes Aim at Deals Cre­at­ed to Escape Tax­es
    The Tax Attrac­tion Between Star­bucks and the Nether­lands

    By DANNY HAKIMNOV. 14, 2014

    LONDON — Amer­i­can com­pa­nies have plowed more mon­ey into the Nether­lands than any oth­er coun­try in the world — for five years run­ning.

    This does not reflect a new fas­ci­na­tion with pot or pan­cakes. It is about the tax­es, or lack of them.

    The laws in Nether­lands shield a vari­ety of prof­its from tax­a­tion, mak­ing it attrac­tive for big multi­na­tion­al com­pa­nies like Star­bucks, Google and IBM to set up offices. Even rock stars like the Rolling Stones and U2 have tak­en advan­tage of Dutch tax shel­ters.

    The same goes for Lux­em­bourg, Bermu­da, Ire­land and the British Caribbean coun­tries like the Cay­man Islands. Along with the Nether­lands, those places rank among the top des­ti­na­tions for for­eign direct invest­ment from the Unit­ed States, accord­ing to a review of data col­lect­ed by the Bureau of Eco­nom­ic Analy­sis that shows how entrenched tax avoid­ance strate­gies have become.

    Glob­al author­i­ties are now aim­ing to close the loop­holes that have let such locales flour­ish and have allowed multi­na­tion­al cor­po­ra­tions to legal­ly avoid pay­ing bil­lions of dol­lars in tax­es. On Fri­day, Euro­pean Union author­i­ties pub­licly accused the Nether­lands of mak­ing a spe­cial deal with Star­bucks that helped the cof­fee com­pa­ny low­er its tax­es, see­ing it as poten­tial­ly ille­gal state aid.

    It is the lat­est case to focus on favor­able and often secre­tive tax arrange­ments between big multi­na­tion­als and tax author­i­ties — deals struck between Apple and Ire­land, and Ama­zon and Fiat with Lux­em­bourg. Euro­pean author­i­ties have also asked coun­tries about arrange­ments made with a num­ber of oth­er com­pa­nies, includ­ing Microsoft.

    But reg­u­la­tors, if they even make a tru­ly deter­mined effort, face an uphill bat­tle in chang­ing the sys­tem.

    Com­pa­nies, for one, are doing their best to min­i­mize the fall­out.

    Star­bucks hired RLM Fins­bury, a cri­sis com­mu­ni­ca­tions firm, as oppo­si­tion to the company’s tax prac­tices began build­ing in Britain, its largest Euro­pean mar­ket. This year, Star­bucks decid­ed to move its region­al head­quar­ters to Lon­don from Ams­ter­dam as protests grew.

    Apple recent­ly tapped Fipra, a promi­nent lob­by­ing firm with exper­tise in com­pe­ti­tion pol­i­cy and an affil­i­ate of RLM Fins­bury, to bol­ster its defens­es in Europe. Apple also hired a top lawyer from the branch of the Euro­pean Com­mis­sion inves­ti­gat­ing it in the tax case.

    The finan­cial bite from the Euro­pean inves­ti­ga­tions may be lim­it­ed. Amer­i­can cor­po­ra­tions could poten­tial­ly get cred­it on their tax bills back home even if they lose their cas­es, experts said, because the com­pa­nies are like­ly to pay back tax­es rather than face a fine.

    Peter Cus­sons, a part­ner at Price­wa­ter­house­C­oop­ers in Lon­don, said any funds “in prin­ci­ple should be eli­gi­ble for U.S. for­eign tax cred­it relief, sub­ject to the usu­al rules.”

    In some ways, author­i­ties are per­form­ing a futile task: As offi­cials move to close cer­tain loop­holes, oth­ers are like­ly to pop up in their place.

    Last month, Ire­land said it would phase out a loop­hole that Apple helped pio­neer and is cur­rent­ly used by many oth­er com­pa­nies, known as the Dou­ble Irish. The maneu­ver allows com­pa­nies to pay roy­al­ties from one Irish sub­sidiary to a sec­ond sub­sidiary incor­po­rat­ed in Ire­land and domi­ciled in anoth­er coun­try with low or no cor­po­rate tax. The strat­e­gy is often paired with a Nether­lands sub­sidiary and known as Dou­ble Irish with a Dutch Sand­wich.

    But Ireland’s move seems intend­ed to cush­ion the blow for multi­na­tion­als. Not only will there be a long phase-out peri­od, but the coun­try is set­ting up a so-called patent box.

    A sim­i­lar mech­a­nism in Britain allows a com­pa­ny to pay low­er tax­es for “its patent­ed inven­tions and cer­tain oth­er inno­va­tions.” Here too, Euro­pean reg­u­la­tors are tak­ing a clos­er look, view­ing it as a poten­tial­ly unfair trade prac­tice.


    For­eign invest­ment fig­ures offer some­thing of a road map to tax shel­ter­ing.

    Con­sid­er that 15.5 per­cent of Amer­i­can for­eign direct invest­ment goes to the Nether­lands, and four-fifths of that goes into Dutch hold­ing com­pa­nies. Com­pa­nies like Star­bucks often have a num­ber of sub­sidiaries with vary­ing struc­tures in the Nether­lands, in Starbucks’s case with names like Rain City and Emer­ald City.

    Luxembourg’s prac­tices have drawn par­tic­u­lar scruti­ny, putting its for­mer prime min­is­ter, Jean-Claude Junck­er, the new head of the Euro­pean Com­mis­sion, on the defen­sive. The coun­try had inward for­eign direct invest­ment of $2.4 tril­lion in 2012, exceed­ing the com­bined intake of Ger­many and France, the eurozone’s two largest economies, accord­ing to Inter­na­tion­al Mon­e­tary Fund data.

    To put that in per­spec­tive, Lux­em­bourg has a pop­u­la­tion of just over 500,000 peo­ple. Ger­many and France have a com­bined pop­u­la­tion of 146 mil­lion peo­ple.

    About 91 per­cent of the for­eign direct invest­ment com­ing into Lux­em­bourg is through spe­cial-pur­pose enti­ties. Such vehi­cles are often set up by multi­na­tion­al cor­po­ra­tions for account­ing pur­pos­es, accord­ing to the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment, a club of devel­oped coun­tries.

    Ire­land has become par­tic­u­lar­ly pop­u­lar as a way sta­tion for man­ag­ing tax­es. A Unit­ed States Sen­ate report last year found that from 2009 to 2012, Apple trans­ferred “$74 bil­lion in world­wide sales income away from the Unit­ed States to Ire­land where Apple has nego­ti­at­ed a tax rate of less than 2 per­cent.” Anoth­er Sen­ate report found that Microsoft trans­ferred “rights to the intel­lec­tu­al prop­er­ty devel­oped by Amer­i­can engi­neers” to a small Dublin office with less than 400 employ­ees, then report­ed an annu­al prof­it of $4.3 bil­lion, which was taxed at 7.2 per­cent.

    Com­pa­nies defend their tax prac­tices.

    Apple has said, “Our suc­cess in Europe and around the world is the result of hard work and inno­va­tion by our employ­ees, not any spe­cial arrange­ments with the gov­ern­ment.”

    Ama­zon has said that it received no spe­cial treat­ment. Fiat said it stood by the “legit­i­ma­cy” of its tax prac­tices. Star­bucks said that it had nev­er “sought unfair tax incen­tives” and com­plied with all rel­e­vant rules.


    Will oth­er coun­tries take any steps on their own?

    Not the Nether­lands. “Uni­lat­er­al mea­sures may actu­al­ly increase mis­match­es and oth­er dif­fer­ences between sys­tems, instead of remov­ing them,” the finance min­istry said in a state­ment. The Lux­em­bourg gov­ern­ment recent­ly sub­mit­ted leg­is­la­tion to make its tax rul­ings more trans­par­ent. Mr. Junck­er said last week that address­ing cor­po­rate tax avoid­ance “can’t be a Lux­em­bour­gish answer — it has to be a Euro­pean answer.”

    Yeah, Junck­er had real­ly bet­ter fig­ure out soon how to avoid look­ing like the EU’s tax-dodger-in-chief. And yet it’s very unclear how he’ll do so giv­en the cen­tral role tax-shel­ter­ing plays in Lux­em­bourg’s econ­o­my. And, iron­i­cal­ly, hav­ing a fla­grant tax-dodger-in-chief as the head of the EU just might be one of the best things that could hap­pen to Europe at this point because if there’s one thing that is doom­ing Europe right now it’s an irra­tional adher­ence to pro-aus­ter­i­ty eco­nom­ic the­o­ries. When Europe’s tax shel­ters are still open for busi­ness and the heads of state of those tax shel­ters are lead­ing the pro-aus­ter­i­ty charge, col­lec­tive reflec­tions on the fair­ness of aus­ter­i­ty poli­cies are far more like­ly. Espe­cial­ly since Junck­er’s big plan for turn­ing around the EU economies cen­ter around a pub­lic-pri­vate infra­struc­ture invest­ment pack­age but the EU gov­ern­ments appar­ent­ly can’t find the pub­lic funds to finance Junck­er’s plan at the moment. Instead, the pub­lic-side of the stim­u­lus pack­age is to be financed by tak­ing funds from else­where in the bud­get (a deficit-neu­tral stim­u­lus). And the EU is also now forced to entice pri­vate invest­ments even more in order to make up for the lim­it­ed pub­lic funds. Who knows, maybe those incen­tives could even involve some tax cuts on those pri­vate invest­ments. It would cer­tain­ly be in keep­ing with the emerg­ing theme:

    The $375 bil­lion Europe wants to invest but does­n’t have

    By Jan Strupczews­ki

    BRUSSELS Sun Nov 16, 2014 9:07am EST

    (Reuters) — New Euro­pean Com­mis­sion Pres­i­dent Jean-Claude Junck­er is prepar­ing a 300 bil­lion euro ($375 bil­lion) invest­ment plan he will present as a cor­ner­stone of efforts to revive an ail­ing econ­o­my.

    But his­to­ry sug­gests the pro­gram risks becom­ing an exer­cise in finan­cial engi­neer­ing rather than a con­duit for the new mon­ey the region needs to help boost out­put and cre­ate jobs.

    A flag­ship project of the new Euro­pean Union exec­u­tive, the invest­ment scheme is due to be unveiled before Christ­mas. It is still being finalised and few details have been made pub­lic.

    If all the mon­ey it promis­es is raised and spent, it could pro­vide the 28-nation EU with rough­ly an addi­tion­al 0.7 per­cent of GDP in invest­ment per year over three years.

    “It is sig­nif­i­cant,” said Carsten Brzes­ki, econ­o­mist at ING bank in Frank­furt. “You would expect some kind of a mul­ti­pli­er effect from invest­ment on jobs and pur­chas­ing pow­er and it would increase the growth poten­tial. The down­side is that pub­lic invest­ment can take years before it gets start­ed.”

    But even more than “when?”, the big ques­tion hang­ing over the plan is “how much?”.

    The 300 bil­lion euros is an over­all tar­get for both the pub­lic and pri­vate mon­ey that the Com­mis­sion hopes to mobi­lize.

    The Com­mis­sion itself does not have any mon­ey and is fund­ed through annu­al EU bud­gets that must be bal­anced.

    Of the region’s 28 gov­ern­ments, only Ger­many seems to have pub­lic finances strong enough to sig­nif­i­cant­ly increase invest­ment. But in its dri­ve to have a bal­anced bud­get, Berlin is not keen to spend more.

    So the Com­mis­sion plans to use what lit­tle pub­lic mon­ey is avail­able to lure big­ger pri­vate funds into projects that would oth­er­wise seem too risky or with too low a rate of return.

    “Our aim is to ‘crowd in’ pri­vate mon­ey for big infra­struc­ture projects in the ener­gy sec­tor, trans­port, broad­band or research and devel­op­ment. The pri­vate sec­tor can­not take all the risks,” Com­mis­sion Vice Pres­i­dent Jyr­ki Katainen told Reuters.


    Poten­tial investors will want to know how much the EU will pro­vide, and whether it will be new funds or re-labeled mon­ey already account­ed for in var­i­ous EU spend­ing schemes.

    “If it is addi­tion­al mon­ey, it would be OK, but I fear that it will be funds tak­en from oth­er places in the EU bud­get,” said Christoph Weil, econ­o­mist at Com­merzbank.

    Very lit­tle new mon­ey end­ed up in the 120 bil­lion euro “growth and jobs” com­pact that EU lead­ers approved at the start of 2012, which failed to pre­vent a reces­sion and was fol­lowed by two years of falling invest­ment.

    It was made up of exist­ing EU struc­tur­al funds and a 10 bil­lion euros cap­i­tal boost for the Euro­pean Invest­ment Bank so that it could poten­tial­ly lend 60 bil­lion more over three years.

    The new scheme looks like­ly to uti­lize sim­i­lar ideas.

    Yes, more aus­ter­i­ty some­where in the EU bud­get is going to be required to finance Jean-Claude Junck­er’s big, bold stim­u­lus pack­age. Because the EU gov­ern­ments can’t find the mon­ey them­selves.

    Posted by Pterrafractyl | November 16, 2014, 7:54 pm

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