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Prof. Joseph E. Stiglitz , former advisor for the Panama government and Nobel Prize-winning economist, was invited to speak in front of the Panama papers inquiry committee set up by the European Parliament.  

It's vital Europe takes up the leadership in the fight against tax evasion, Nobel Prize-winning economist Joseph E. Stiglitz told Parliament's inquiry committee investigating the Panama papers on 16 November. Stiglitz, who served as an advisor to the Panama government following the revelations, said the US was unlikely to be effective in tackling the issue: "When your [future] president is evader-in-chief, it’s hard to have confidence in where we are going to go."

Appearing before Parliament’s Panama papers committee Stiglitz reminded MEPs that the law firm from where the leaks came - Mossack Fonseca - was only one of the four major law firms in Panama. “It’s even viewed as one of the smaller of the four law firms. So you can imagine what’s going on in these secrecy havens.”

Danish S&D member Jeppe Kofod, one of two MEPs responsible for writing up the committee's final report with recommendations, asked the economist about the possibility of a global summit to tackle all the secrecy. Stiglitz responded: “I think the idea of having a global summit is a very good one.” He added: “There has to be a comprehensive global approach with zero tolerance for secrecy. That means secrecy has to be attacked globally. I believe that Europe alone can have a very significant impact.”

Czech ALDE member Petr Ježek, the other MEP responsible for writing the committee's final report, asked how the recent US elections and the UK's Brexit referendum would influence the situation:  “How can these changes affect our fight against tax avoidance and evasion on the international scene?” Stiglitz pointed out that  “secrecy havens” were just not offshore: “They are also on shore, they are in Europe, they are in United States.”

However, he was not very optimistic about the US's chances to tackle tax evasion:  "In a response to the Panama Papers, the US government has begun to do something and they have done something on beneficial ownership. I’m not hopeful that this will continue under our new administration because [Donald Trump] is a tax evader. When your president is evader-in-chief, it’s hard to have confidence in where we are going to go. That’s why it’s even more important for Europe to take up the leadership on this issue."

Stiglitz's role as advisor for the Panama government

After the leaks from Mossack Fonseca, the Panama government set up a committee to come up with recommendations to ensure transparency of the country’s financial and legal system. Stiglitz was a member of this committee but resigned because the government did not intend to make the recommendation public.

Parliament's investigation into tax evasion

Set up after the Mossack Fonseca leaks, Parliament’s Panama papers inquiry committee is assessing how the European Commission and member states are fighting money laundering and tax evasion.