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Brussels sues Britain over tax breaks in Gibraltar

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Brussels is suing the UK at the European Court of Justice over tax breaks in Gibraltar, in a sign of the EU’s determination to persist with pursuing disputes dating back to Britain’s membership of the bloc. 

The European Commission announced on Friday that Britain had failed to fully recover €100m of illegal state aid relating to tax breaks given to companies in Gibraltar. 

The origins of the case date back to a Spanish complaint in 2012, but Brussels said on Friday that the long-running saga was still not over, claiming Gibraltarian authorities had failed to claw back all the money more than two years after an EU order to do so. 

Margrethe Vestager, the EU’s competition commissioner, said the illegal state aid, which took the form of a “corporate tax exemption for passive interest and royalties” gave an “unfair advantage” to some multinational companies. 

“The UK and the government of Gibraltar are working closely together and with the commission on the case,” said a UK government spokesperson. 

“The government of Gibraltar has already recovered some of the aid, and continues to work to recover the outstanding aid in compliance with the commission decision, and to bring this case to a satisfactory conclusion as soon as possible.”

The case is the first time the commission has hauled the UK before the ECJ since Britain’s post-Brexit transition period ended on January 1. Despite the UK having now completed Brexit, its divorce deal with the bloc allows Brussels to continue pursuing old disputes to do with the correct application of EU rules. 

The commission can bring cases before the ECJ for another four years, so long as the complaints concern alleged British breaches of EU law or failures to comply with Brussels’ “administrative” decisions on issues such as state aid disputes that occurred before the Brexit transition ended.

Separately to the wrangle over tax in Gibraltar, the commission still has 94 pre-Brexit infringement proceedings pending against the UK for failure to comply with specific EU laws covering an array of issues, including some relating to energy supplies.

In the Gibraltar state-aid case, the territory’s officials said they were fully co-operating with Brussels but pointed out that some of their efforts to retrieve the funds have been tied up in the courts.

“I have no doubt that we will recover the aid and that we will do so at the very earliest opportunity when it is legally possible,” said Fabian Picardo, Gibraltar chief minister. “Our tax and legal officers . . . are pursuing all options for recovery and with all due alacrity.”

While the commission’s action comes at a time of heightened tensions between Brussels and London, relations between Gibraltar and Spain have markedly improved since the UK voted in favour of Brexit in 2016.

This month a new tax accord took effect: the first UK-Spanish treaty on Gibraltar for over 300 years. It hugely reduced scope for tax competition by establishing that Spanish nationals and companies that move to Gibraltar from Spain in the future will continue to pay tax in Spain.



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Gastronomes look beyond pandemic to a revolution in French fine-dining

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Chef Yannick Alléno used to serve a €395 menu featuring langoustines and foie gras at his three-starred Michelin restaurant near the Champs-Elysées.

But as France prepares to allow restaurants to reopen for outdoor service next week after six months of closure, he will instead be serving up burgers at his wine bar for a fraction of the price. 

That a superstar chef such as Alléno, whose stable of high-end restaurants from Courchevel to Marrakesh hold more than a dozen Michelin stars, is changing strategy underscores the difficulties facing France’s grands restaurants as they seek to recover from the ravages of the coronavirus pandemic

“We have to inspire people to come here by sparking their curiosity,” he said of the Pavillon Ledoyen, the neoclassical building that houses several of his restaurants, including the three-starred Alléno Paris.

Such temples to French gastronomy have long catered to wealthy foreign tourists, who will happily pay more than €1,000 for a meal for two as long as they experience l’art de vivre à la française. But with international travel severely curtailed by the pandemic, such customers are not expected back for some time. 

Chef Yannick Alléno
Yannick Alléno operates high-end restaurants from Paris to Courchevel and Marrakesh that hold a dozen Michelin stars combined © Francois Durand/Getty

Attracting locals is the new challenge, as well as retaining employees, many of whom have left the sector and its notoriously challenging working conditions. Many restaurants are also saddled with large debts after taking state-guaranteed loans to ride out the crisis.

“I have three years of struggle ahead,” said Alléno, adding that half the group’s €4m in cash reserves had been spent. “For three-star restaurants, there will be many casualties.” 

His flagship restaurant used to generate more than three-quarters of revenue from foreign diners, mostly from Asia and the US. As there is little point reopening without them, the doors will remain shut until September. Alléno will for now experiment in the less-formal location as he plots an overhaul that seeks to drag fine-dining into the 21st century.

“Everything must change,” he said, quoting the title of the book he co-wrote during lockdown. In it, he called for a revamp of everything from the style of service (warmer, more personalised) to staffing (more flexible and family-friendly).

French haute gastronomie traces its roots back to visionary 19th-century chefs such as Auguste Escoffier and Marie-Antoine Carême, who created a cuisine based on rich sauces and meticulous — often theatrical — service. For decades it was considered the world’s best and became a key part of French identity.

But its popularity has faded in recent decades thanks to competition first from the flashiness of molecular gastronomy and then the pared-back Nordic style. As French haute cuisine lost ground, it became much more expensive, putting it out of the reach of many.

“The pandemic has exposed that the business model of high-end restaurants in France simply doesn’t function without tourists,” said Joerg Zipprick, co-founder of La Liste group, which ranks the world’s best restaurants.

“This is a relatively new development. It used to be that . . . a local doctor or manager would come to these places to celebrate a special occasion. No longer.”

Zipprick said that for the top chefs, many of whom had spent the past year experimenting with takeouts and meal kits, success depended on their willingness to adapt.

A customer picks up his order from Baieta in Paris
Baieta restaurant in Paris. Many top chefs have experimented with takeouts and meal kits during the past year © Franck Fife/Getty

Diners would not want fussy and experimental dishes on their return, he predicted, but would instead want to eat good food at a nice restaurant in the company of friends and family.

“No more technical stuff or food that requires a long explanation from the waiter about the fermentation process. People don’t want their meal to be a work of art,” Zipprick said.

The last time French cuisine reinvented itself was in the 1970s when chefs such as Paul Bocuse and the Troisgros brothers created nouvelle cuisine. The movement, less opulent and calorific than the fine-dining that preceded it, put fresh and high-quality ingredients to the fore and service became less formal. 

Alléno believes top restaurants must aim to tailor experiences by talking to clients beforehand about the occasion for their dinner, the guests and their tastes.

This “concierge service” approach would allow menus to be better planned, improving the customer experience and the economics for the restaurant.

“If I know I only have three people who’ll eat langoustine on a given night then I don’t need to order six kilos just in case,” he said. “It really changes things for the kitchen.” 

Others are being even more radical. Daniel Humm’s three-starred Eleven Madison Park in New York will no longer serve meat and seafood when it reopens next month, as the Swiss chef seeks to show that sustainable and environmentally conscious eating can be compatible with luxury.

However, Éric Fréchon, the three-Michelin-starred chef behind restaurant Epicure at the five-star Le Bristol Paris hotel, played down expectations of radical change.

“Things will return much as they were before,” Fréchon said, noting that the hotel’s restaurants had a significant local client base. “People have missed the experience of haute gastronomie for so long they’ll be eager to come back.”

Fréchon said he would retain some coronavirus-era innovations, including the €1,390 “gastronomy and to bed” package that is marketed as a one-night staycation for locals that includes dinner in their suite or hotel room.

“For New Year’s Eve we had 60 servers running back and forth to rooms, it was really difficult,” he said. “But it allowed us to reach new clients who perhaps would not have dared to come to a three-star restaurant. Now we have to keep them.”

Additional reporting by Domitille Alain in Paris



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Ireland’s healthcare system taken down by cyber attack

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Ireland has shut down most of the major IT systems running its national healthcare service, leaving doctors unable to access patient records and people unsure of whether they should show up for appointments, following a “very sophisticated” cyber attack.

Paul Reid, chief executive of Ireland’s Health Service Executive, told a morning radio show that the decision to shut down the systems was a “precautionary” measure after a cyber attack that impacted national and local systems “involved in all of our core services”.

Some elements of the Irish health service remain operational, such as clinical systems and its Covid-19 vaccination programme, which is powered by separate infrastructure. Covid tests already booked are also going ahead.

However the system for processing referrals from GPs and of close contacts is down, the HSE tweeted, adding that those in need of testing should go to walk-in centres which would prioritise symptomatic cases.

“This is having a severe impact on our health and social care services today, but individual services and hospital groups are impacted in different ways. Emergency services continue, as does the @AmbulanceNAS [National Ambulance Service],” health minister Stephen Donnelly wrote on Twitter.

No group has yet claimed responsibility for the attack. Speaking on Friday morning, Reid said the HSE had also not yet been served with a ransom demand. “We are at the very early stages of fully understanding the threat, the impact and trying to contain it,” he said, adding that it was receiving assistance from the Irish police force, defence forces and third-party cyber support teams.

The master of Dublin’s Rotunda Maternity Hospital said it was advising patients who were less than 36 weeks pregnant not to present for appointments on Friday. In a statement, Cork University Hospital said patients should present for outpatient appointments, chemotherapy and surgery “unless you are contacted to cancel”, but that X-ray and radiotherapy appointments for Friday were cancelled.

Professor Donal O’Shea, consultant endocrinologist at St Vincent’s Hospital in Dublin, told RTE radio that there could be implications for patient care. “Clinical systems haven’t been targeted, but if you can’t access your computer, then getting results is impossible . . . so before long, there are going to be clinical implications,” he said. In its statement, Cork University Hospital said “only emergency bloods” would be processed at this time.

Reid said that patients nationally “should still come forward until they hear something different” and that an update should be available later on Friday. A spokeswoman for the HSE was unable to provide a further update on patient care by mid-morning. “We apologise for the inconvenience to the public and will give further information as it becomes available,” she added.

Healthcare workers told the FT they were told to turn off their laptops, leaving staff at home offline and those working in hospitals reverting to pen and paper to manage patients’ information.

In a statement on its website, Ireland’s child and family agency Tusla said that its emails, internal systems and portal for child protection referrals was also offline because it was hosted by the HSE’s network.

The attack comes as actions by cyber criminals to disrupt public services have increased during the pandemic. Earlier this month, hackers believed to be from eastern Europe breached the IT systems of the Colonial Pipeline, a major fuel conduit that supplies much of the eastern US.

“Opportunistic cyber attackers targeting flooded healthcare organisations has been a common theme throughout the course of the pandemic,” said Charlie Smith, consulting solutions engineer at Barracuda Networks. “These scammers are aware of the huge significance of health services’ IT systems at this time, and so will stop at nothing to disrupt said systems or steal valuable data in exchange for ransom.”





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Watchdog turns on Polish government over coronavirus election

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Poland’s supreme audit office has accused prime minister Mateusz Morawiecki of exceeding his powers, as it unveiled a highly critical report into the government’s attempt to hold last year’s presidential election by post because of the pandemic.

The salvo by the supreme audit office (NIK) is the latest in a series of disputes over last year’s election, which was meant to be held in May, but was eventually postponed until June as coronavirus swept through Europe.

It is also the latest in a series of clashes between the ruling Law and Justice party and Marian Banaś, a former finance minister who was put in charge of the NIK in 2019 thanks to the support of politicians from the ruling camp, but has since become a thorn in the government’s side.

Representatives of NIK, which is responsible for auditing government spending, on Thursday said the attempt to hold the presidential election by post in May — which was ultimately abandoned after disagreements in the ruling camp — had cost at least 76m zloty ($20.2m).

They also said that there had been no legal basis for the prime minister to give any orders to two state-controlled entities, the Polish Post and the Polish Security Printing Works (PWPW), in relation to holding the election, such as the printing of voting cards.

“The only body entitled to organise elections was the State Election Commission,” Banaś said during a press conference. “Organising the elections on the basis of an administrative decision should not have happened and was without legal basis.”

He said the NIK had informed prosecutors of possible crimes committed by the boards of the Polish Post and PWPW, which were involved in the preparations for the postal ballot.

The Polish Post said “categorically” that “all its actions taken to implement the prime minister’s decision of April 16 2020 were founded on legal provisions”. PWPW said it considered NIK’s move “unjustified” and “baseless”.

Banaś added that the NIK was analysing whether to notify prosecutors of concerns relating to the actions of other parties involved in the preparations for the election.

The government said that “all decisions on beginning technical preparations for postal voting in the presidential elections were in accordance with the law”.

“All the actions [of the prime minister and the head of the chancellery of the prime minister] were aimed at holding elections by the constitutional deadline,” the government’s information office said in a statement.

“The prime minister never called for presidential elections or for postal voting. The goal of the actions taken was to allow the participation in the elections of those who were entitled to vote, but whose life and health were at risk as a result of the pandemic.”

Jacek Sasin, minister for state assets, took a similar line, and told Polish state radio that the NIK report was “a certain element in the fight between the government and . . . Marian Banaś”.

Banaś has been under pressure to step down from his post since media reports emerged alleging that a building he owns was used as a brothel. In an interview with Politico, he dismissed the allegations as a “smear campaign” aimed at ousting him.

He concluded his press conference by drawing attention to the fact that the NIK was one of a series of institutions targeted by fake bomb threats earlier this week, and to an email sent to the NIK this morning falsely claiming that Banaś’s son was going to commit suicide.

“I ask you yourselves for a comment on this,” he said to the assembled journalists.



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