• Katainen says `best thing' in Panama Papers issue is the leak
  • ECB action puts onus on nations to aid economies, he says

Revelations that some of the world’s richest people are using Panama-based lawyers to channel funds through off-shore accounts show that authorities need to step up efforts to stamp out tax avoidance, European Commission Vice President Jyrki Katainen said.

“I’m furious,” Katainen said on Tuesday in Brussels. “The best thing in this issue is the leak. So it’s not necessarily illegal to have a bank account in a tax haven, but if you are avoiding taxes, then it’s totally unacceptable.”

Katainen was responding to the so-called Panama Papers, a report by a group of media outlets on Sunday that some of the world’s wealthiest people, including politicians and business figures, had channeled billions through offshore accounts. Katainen said using such methods to evade taxes goes against the bedrock of a fair-market economy and called for stepped-up action to stamp out such practices.

“I do hope we get more tools also to our hands, to tackle and address this cancer,” Katainen said at a breakfast sponsored by Politico in Brussels.

Breathing Room

Euro-area nations also should take advantage of breathing room provided by monetary policy by improving how their economies work, Katainen said. For example, Italy is taking necessary steps to make its labor markets work better for young job-seekers, while other nations might need to take action in areas like education, research, pensions or opening hours allowed for stores.

European Central Bank President Mario Draghi is right to say that when the ECB is doing its job, national governments need to step up in return and make the structural reforms needed to make their economies more externally competitive, Katainen said. He said the European Union needs to step up its focus on economic reforms, which in the past have been less strictly enforced than the bloc’s budget rules.

“You can only earn enough money to run a welfare society if you are competitive enough,” Katainen said.

Katainen said measures proposed by French Economy Minister Emmanuel Macron would be an economic boon if they were adopted. “Minister Macron knows exactly what must be done in France,” he said.

At one point in the event, Katainen was asked to give short responses to short phrases. Offered "Donald Trump," he replied "new normal."

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