For a fiscal and budgetary union in the EU

Given a scenario of public investment decline and growing unemployment, it is essential to set structured and systematic solutions in order to address an endemic crisis in the European Union, particularly regarding the eurozone. In order to avoid a further depression we demand radical political and institutional measures. These structural changes should aim at restoring confidence and bringing stability in the functioning of financial markets, as well as to ensure social and territorial cohesion throughout the EU.

 

In a context of extremely high volatility in financial markets and States suffering solvency problems, governments have been unable to apply economic recovery schemes. So far answer has been limited to the setting of highly restrictive policies, with the burden of social cost in terms of unemployment and low growth.
We support a more ambitious political reaction by heads of government and European leaders, who should not just focus on a tight monetary policy, restrictive policies or mutual surveillance.

 

We support a European Treasury with power to tax and the strengthening of economic governance. Moreover, the ECB should be capable of issuing Eurobonds as supportive financial instruments that would allow easier financing to weaker countries with no restrictions, so far as market uncertainty is making some States falling behind in the eurozone context, with no much room for political action, whereas imposing high costs on the citizenship.
Experience shows that monitoring is not enough, because even the criteria of the Stability and Growth Pact have been failed by almost all Member States of the euro area in the last decade. This takes us to the need to reform the treaties in order to punish infractions in debt and deficit limits, though, from our point of view, restoring the European economies requires mucho more than restrictive policies. We believe that the threat of automatic sanctions is not the most effective measure to improve the economical situation of the EU.

 

Deeper institutional and regulatory changes are needed, and especially a strong supranational legal capacity. Strengthening the economic governance clearly demands the creation of a fiscal union and a complementary budgetary tool. In a highly intertwined context where preferences are becoming homogeneous and political responsibility increasingly shared, we demand for a common policy to be set.

 

The EU budget should be conceived as an instrument for achieving the objectives of the Union. It should not only ensure a perfect functioning of the single market, but it must get the full potential for pooling resources and foster strategic decision making for investment across the EU. Furthermore, to ensure consistency between political action and structural actions, decisions must be taken at supranational level, both strategically and in the development of investment capacity.
In a context of shared priorities there is no point in resources and policies not being shared. This is why focus should be set on increasing the capacity of own resources in order to give greater manoeuvring ability to the supranational level of government.

 

We support a European Treasury with collecting capacities and the power to tax EU citizens in favour of accountability and transparency.

 

This would mean putting solidarity into practice, for Member States would transfer collection and expenses to the EU level, eliminating the concept of fair return, which currently prevails in the budget negotiations.

 

The budget instrument must be strongly linked to the objectives of the EU, focused on prosperity and cohesion. The European Union should have an autonomous capacity to finance common policies. We propose new direct resources (financial transactions tax, tax based on CO2, etc.) and the harmonization of VAT. In addition we ask to harmonize the corporate taxation across the EU to increase the direct tax capacity of the Institutions.

 

This will ensure greater impact of European policies and especially will display the value added of EU political action, which depends on the benefits offered by such coordination, legal certainty and greater efficiency in investment, by pooling common services and shared resources. This sharing of resources means a clearer benefit for scale economies and also the ability to finance public goods that Member States can no longer afford.
Simultaneously, the role of the EU Institutions should be strengthened to fight fraud and tax evasion and isolate tax havens that exist in European territory.
In conclusion, we believe that all these measures would allow to keep a good level of public investment in the European Union in a context of strong national austerity, ensuring the functioning of the welfare state and improving social and territorial cohesion across the European Union.