Veteran Luxembourg PM Juncker resigns in spy scandal

Luxembourg Prime Minister Jean-Claude Juncker, Europe's longest-serving leader, was expected to call for early elections Thursday after his coalition collapsed in a scandal over misconduct within the tiny nation's secret service. In a rare moment of political drama in usually uneventful Luxembourg, Juncker told parliament on Wednesday he was stepping down after his junior coalition partners, the Socialists, introduced a motion calling for early elections. "I am calling a cabinet meeting at 10am local (0800 GMT) tomorrow and I will then head for the palace to propose to the Grand Duke to hold new elections," Juncker said after a highly emotional seven-hour debate. He was expected to meet Grand Duke Henri, the head of state, at around 1230 GMT with analysts forecasting snap elections on October 20, or seven months ahead of schedule. Asked before he headed for the royal palace whether he would run for re-election, Juncker said: "It will depend on my party but I do have some indications that it will want me to run." "I would never have imagined this after 25 years of collaboration," he said. His Christian Social People's Party, which bar a 1974 poll has won every single election since its establishment in 1944, is to hold an extraordinary meeting Thursday evening after being disavowed by the Socialists, over Juncker's response to the secret service scandal. Though aged only 58, Juncker has been in office for 18 years and in government for 30. He is best known in Europe for his recent tumultuous eight-year stint as head of the eurozone finance ministers group, which ended in January. Opponents said he had been too busy steering the single currency through the crisis to do his job properly at home.  The drama was triggered by a parliamentary committee report alleging a series of misdemeanours by the country's SREL secret service, which the premier is supposed to oversee. Misconduct from 2003 to 2009 included illegal phone-taps, corruption, and even a dodgy trade in luxury cars for private gain. "The intelligence service was not my top priority," Juncker told parliament. "Moreover I hope Luxembourg will never have a prime minister who sees SREL as (his or her) priority." Socialist leader Alex Bodry said he "must assume his responsibilities, not because he was dishonest or incompetent but because he made the wrong choices." "There were serious dysfunctions. The prime minister's responsibility is at stake." An inquiry into the intelligence service was ordered in 2012 after it transpired that it had secretly taped a conversation in 2007 between Juncker and the then head of SREL, Marco Mille. According to a transcript of that conversation, Mille said his staff had secretly taped a conversation with Luxembourg's Grand Duke and that the sovereign was in regular contact with Britain's MI6. The inquiry set up in the furore that ensued uncovered more dirt: the existence of 13,000 secret files on people and businesses and illegal wire-taps on business leaders. It found too that a 2007 counter-terror operation in fact was a front to help a Russian oligarch pay 10 million dollars to a Spanish spy -- against a commission of 10 percent. Juncker had ordered the operation closed but had not sanctioned those responsible, the report said. It also complained that the premier failed to alert the judiciary on a 150-million-dollar deposit in 2006 by former Congo leader Pascal Lissouba. And it said SREL staff purchased luxury German cars at a 30-percent discount and resold them for their own personal gain. "The commission of inquiry concludes that the prime minister, as head of the intelligence service, not only had no control over his service but also too often omitted to inform the parliamentary control committee or the judiciary of its irregularities, aberrations and illegalities," the report said. Juncker hit back, saying the committee had failed to exercise its own supervisory powers over the secret service. "It could've controlled it ... It did not."