Jagland fends off tax critics

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Last week, the former Labour Party boss Thorbjørn Jagland was leading the Nobel Peace Prize ceremonies and basking in the glow of Peace Prize winner Barack Obama. This week the staunch social democrat found himself having to defend the attractive pay and benefits package he’s received as new secretary general of the Council of Europe — and not least the fact that he no longer pays tax either to Norway or his new home country of France.

Former Labour Party boss Thorbjørn Jagland, a social democrat, finds himself having to defend the attractive pay and benefits package he's received as new secretary general of the Council of Europe.

Jagland showed up on the cover of another major Norwegian newspaper over the weekend, VG, but this time the story had little to do with his role as chairman of the Norwegian Nobel Committee. Instead, VG reported that Jagland, who long has portrayed himself as a staunch social democrat, was earning NOK 2.2 million (nearly USD 400,000, a high salary in Norway) and paying no income taxes on it.

VG noted that Jagland’s compensation also includes a mansion in Strasbourg, home of the Council of Europe, where he and his wife can live rent-free with four servants and a chauffeur.Norwegian Broadcasting (NRK) confronted Jagland at the airport. The former Labour prime minister defended his tax exemption, “because we (he and other Council of Europe employees) get no social benefits either in Norway or where we live.”

Jagland said he must, for example, pay for his own health insurance and earns no pension benefits during his term at the Council of Europe. He said his salary was based on that granted to the secretary general, and took into account the fact that his wife no longer is working while they’re in France.

Asked how he, as someone who has long advocated that everyone must pay tax, can justify his new tax exemption, Jagland said: “What are we talking about here? Shall I have a special tax arrangement (unlike that of his Council of Europe colleagues)?”

Some Norwegian politicians think so. One Member of Parliament from the Progress Party said he thought Jagland should have taken the initiative to pay some tax. Jagland still stands to receive a generous state pension from Norway, based in his earlier years as a career politician.

Finance Minister Sigbjørn Johnsen, from Jagland’s own Labour Party, told NRK he’d be reviewing Jagland’s tax exemptions and vowed no such new policies would be allowed. The one Jagland now enjoys has been in force for years.

Newspaper Aftenposten , meanwhile, reported Monday that the Norwegian state’s financial contribution to the Council of Europe’s budget has risen 27 percent this year alone, more than its contributions to the UN or the WTO. The state is paying NOK 38 million to cover its share of pay, travel and other expenses incurred by the Council of Europe in Strasbourg, money that a foreign ministry spokesperson said will also help pay for reforms at the 60-year-old organization.

While some politicians said the tax exemptions allowed for officials working at major international organizations set a bad example, some said Jagland shouldn’t be blamed for the system that exists. “This is a problem that the government should address, along with other countries,” said Jan Tore Sanner of the Conservatives.