"No to a United States of Europe", says President of German Parliament
2017 faded away with still another major
disagreement, in Germany and in the European Union! Germany’s Parliamentary
President, and former Eurozone gatekeeper, Wolfgang Schäuble blasted Martin Schulz, leader of the country’s Social
Democratic Party (‘SPD’) for his campaign to promote a ‘United States of
Europe’, a project that should become constitutionally binding on all EU member states and to be in place by 2025.
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| Schlz's muscled approach to reforming the European Union. |
Schäuble, a member of Angela Merkel’s
Christian Democratic Union (‘CDU’) and former minister of finance, was
categorical in his rejection. But his missive was not meant at Schulz alone. He
was, in fact, addressing all Socialists of the EU, and French President
Emmanuel Macron, officially a centrist like himself, who was elected thanks to French
socialist votes, but whose policies so far are favouring capitalism. No
surprise, though: he is a financial
investment banker, who worked for Rothschild & Cie until he joined in 2012 the circle
of former French President François Hollande, as the deputy secretary-general
of his staff.
Macron
troubled in September 2017 most EU leaders when, at a keynote speech at
Sorbonne University, Paris, he outlined his vision for Europe. Capitalising on
the uncertainties presented by the forthcoming Brexit, he expressed his
commitment to:
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Expanding the Eurozone to all member states of the Union and introducing
Euro-based financial instruments accessible to all—a proposal that Germany
rejected off-hand. Schulz is, however, in favour of this objective.
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Reducing inequalities by introducing a set of new taxes, including high tech, energy and financial transaction taxes, and harmonising upwards tax-rates across the
Union—a measure very unpopular among smaller states, like Bulgaria, Cyprus,
Hungary, Ireland, Luxembourg, Malta, the Netherlands, who attract Foreign
Direct Investment (‘FDI’) thanks to their advantageous income imposition. It is
worthwhile noting that the worldwide trend in corporate taxation has in the
past 37 years been to reduce rates. The average unweighted statutory corporate
tax-rate was 38.68% in 1980, but 22.96% in 2017, an actual reduction of 41%
during this period, according to consulting firm PwC. With the U.S. and the UK preparing to join
soon the bandwagon of tax-friendly nations, the French proposal is likely to
deter, rather than attract, FDI from third countries.
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Applying guaranteed minimum wage and payroll charges in all 27 member states.
This may also become a deterrent to FDI, as companies take into account social
charges when they seek venues to establish subsidiaries and to employ local
workers.
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Creating and deploying a European ‘rapid action defence force’ and a central intelligence
organisation, or ‘academy’, to fight internal and external threats. It sounds reasonable. However,
some member states have already opted out of NATO membership, so it is not
certain they will support such development.
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Establishing a common migration policy for receiving and integrating refugees.
Here also disagreements among member states are persisting since the 2015
crisis, and it is not certain that even nations not directly affected by such
unsolicited immigration would sign up.
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Revising the EU’s Common Agricultural Policy (‘CAP’) in order to avoid
disparities among member states. French farmers have, however, benefitted the
most from CAP, and their lobby is politically very powerful in France, Brussels
and Strasbourg. If they become truly challenged, their reaction may shake the
walls of the presidential palace in Paris!
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Reconfiguring the European Parliament, after Britain’s exit, by letting the
latter’s seats be allocated to MEPs elected on a new, transnational
method. There are supporters among European socialists for this idea. It is,
however, not clear what will happen with the EP’s total configuration, if and
when the EU accepts new member states.
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Halting the organic expansion of the Commission, by limiting its members to 15,
instead of the current 'one member state-one commissioner' approach. Most heads
of government or state at the European Council should favour such measure,
considering their preference for an intergovernmental Union and their aversion
for supranationalism!
- Promoting
aggressively ‘radical’ digital innovation to compete
internationally. Europe definitely needs
to take ‘the bull by the horns’ in this issue, as she is already overtaken by
its major, and even minor, competitors. But the intention is inconsistent with
the new vertical and horizontal taxation measures contemplated above. The most
likely scenario is that, under such circumstances and in spite of any
EU-fabricated incentives, innovative companies and competent individuals in
high technologies will migrate to more welcoming lands.
- Unifying and integrating the cultures of the
Europeans. This is probably where the trigger of the ‘United States of Europe’
can be placed. A laudable vision—but what does it really mean? And how can this
be materialised? Moreover, it is naïve to believe that even the United States
of America has an optimally integrated culture shared by all of its citizens. In times of crisis, as the one
in which we have lived for the past nine years, people pull the blanket of
culture to their own side, and cultural divisions become more pronounced.
- Creating European universities and ensuring that by
2024 (the year of the Summer Paris Olympics!) every European speaks at least
two European languages. From the reactions registered since last September, it
seems that every EU leader agrees on this point. How different, or better, than
incumbent higher education institutions will a ‘European University’ be? No
details, and probably no plan either.
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| Dr. Wolfgang Scäuble, Parliamentary President of Germany: "No to US of Europe" Photo: Courtesy of CDU |
Let's return to the dispute between Schäuble and Schulz. The former is a conservative
European, loyal to Germany’s pro-business political philosophy and sceptical
about adventurist reforms, which can divide, rather than unite a fragile
Continent. The latter has thrown a big stone in the placid waters of the
Euro-pond. Will the EU consolidate, as Macron envisions, or will it be broken
down into two, or even three
spheres of governance?
The
discussion will go on in 2018, and probably beyond, as Brexit and the EP
elections will in 2019 provide a platform for re-examining the purpose and
future nature of the European Union. Meanwhile, the Europeans are indulging themselves in
the warm comfort and happiness of the last hours of the Holidays. Hope is better
than politics.
