Brussels, 22/05/2014 (Agence Europe) - Two days ahead of the final outcome of the European elections, this newsletter has taken a survey of the various European political parties and looks today at the economic question. All parties aim to boost jobs and growth but differ in their views on how they can be achieved. In tomorrow's newsletter, EUROPE will explain their views on immigration, foreign affairs (enlargement and neighbourhood policy), energy and women's rights.
European Peoples' Party (EPP). The EPP currently has 273 MEPs but recent polls suggest it will lose several dozen in the elections. It is focussing on reforms to stimulate growth, saying that the EU has enormous potential to become a world leader as long as sustainable, targeted investment is carried out. Unlike the Socialists, the Christian Democrats explain in their manifesto that they do not want to use borrowing or redistribution to create new growth. Instead, they want to introduce an environment that will favour the growth of small and family businesses, start-ups and entrepreneurship. They want to stimulate the financing of R&D, along with private investment and making it easier to get access to lending. They say that investing in education, research and technology will be vital to create a competitive, innovative and digital Europe.
In its manifesto, the EPP (the head of whose list is former Luxembourg prime minister Jean-Claude Juncker) says it is planning to reform the financial markets so that all banks follow the same rules.
Juncker has detailed priorities for economic and monetary union (EMU): restoring balance between the world of politics and the ECB in daily management of the eurozone. He says the ECB cannot and does not want to govern the eurozone, which should be managed by the European Commission and the Eurogroup, which should be headed by a permanent chair. The Eurogroup's responsibility also covers the single currency's exchange rate, any rise in which will cause problems for the green shoots of recovery. The EPP says the way conditional aid for the financial stability of struggling eurozone countries needs to be adjusted so that, in the future, any aid and reform programmes are not examined solely in terms of financial viability but also in terms of their social impact. The Christian Democrats say the social consequences of structural reforms should be discussed in public. They are critical of the fact that a suggestion made by the European Commission in 1998 for common eurozone representation at the International Monetary Fund has never been followed up.
European Socialist Party. The Socialists currently have 196 MEPs. They say the economy will be revived through innovation, research, training and the introduction of an up-to-the-minute re-industrialisation policy to ensure the extraordinary progress achieved in labs and universities can be turned into jobs for European workers. This will require greater room for manoeuvre for investments from national government to help make the economy stronger rather than weaker, explains the PES manifesto unveiled in Rome on 1 March. The Socialists say that a pooling of rights and responsibilities is needed in the eurozone for EMU and say they will reduce deficits in a fair and sustainable way, using new tools to manage public debt in Europe.
The troika of European Commission, European Central Bank and International Monetary Fund that is used to decide on aid for eurozone nations needs to change. A different, democratic, socially responsible and credible model should be introduced under existing EU treaties, argues the PES. Great attention will be paid to tackling fraud, tax evasion and shopping around for the lowest tax system. The Socialists aim to cut tax evasion by half by 2020.
On job creation, the Socialists' strategy is based on full implementation of the European Youth Guarantee. In order to ensure effectiveness, the budget for this needs to be expanded and the scheme extended to any European passport-holder under the age of 30. They say an ambitious European industrial policy will also be needed, along with support for the social economy and small and medium-sized enterprises.
The PES is determined to restore financing of the real economy. The European Socialists' leader, Martin Schulz (of Germany), who is standing in the race to become the next president of the European Commission, wants a standard minimum company tax in Europe to prevent “fiscal dumping”. He also wants a clear definition of tax evasion and a full list of tax havens around the world.
ALDE. The European Liberals and Democrats (ALDE) have 83 MEPs. They are calling for a new type of economic integration through a new stage in the process of introducing a single market in key areas like energy, banking, capital, transport, telecoms and healthcare. Greater integration of this nature will necessarily lead to more jobs as companies expand to take advantage of it, explained the ALDE head of list, who is standing to become the president of the European Commission, Guy Verhofstadt of Belgium.
Boosting the economy and job creation will be aided by the free-trade treaty currently being negotiated with the United States, which could generate more than €100 billion a year, along with other deals of this nature that the ALDE wants to promote with other regions around the world.
The Liberals and Democrats say that it must be made easier for small businesses to get loans because they are the engines of growth and jobs. New rules are needed to make investment easier, innovative companies and start-ups must be helped, and so must young entrepreneurs. Taxation should be adjusted to suit new innovative start-ups. The EU's budget needs to change to match the new priorities and focus on the best ways to create jobs (innovation, R&D, education and so on).
The ALDE will fight for the restoration of healthy public finance and, like the EPP, does not want to give countries any longer to achieve their target of a public deficit of under 3% of GDP. The ALDE says it wants a European Union where the stability and growth pact rules are respected by the EU and its member states alike. The budget discipline is vital and should become stronger.
Other priorities are rapidly introducing banking union in the eurozone, better control mechanisms and applying a common mechanism to prevent bust banks being a burden for the taxpayer.
The eurozone and the EU28 should be dealt with in the same way. There should be no discrimination against non-euro countries, which should be fully involved in economic decisions. The ALDE says that fiscal competition is healthy and more should be done to tackle tax evasion.
The Greens/EFA. The Greens and European Free Alliance have 57 MEPs. They talk of the urgent need for tax convergence and call for minimum rates of company and inheritance tax. They want the income generated by the new financial transactions tax to be put into the European budget. They see this as significant symbolically because it would be the first European tax. They say the time has come to end anonymous bank accounts.
The Greens want common management of the debt “that we have inherited” through the creation of a redemption fund as a way of pooling debt and also by the issuing of eurobonds. Budget discipline rules for this debt management should be clearly defined and realistic. The Greens want an increase in the EU's budget mostly from own resources. They call for the creation of solidarity tools to help finance the way out of crisis. The Greens' criticisms of public spending focus on spending that is both a waste of money and damaging to the environment, like subsidies for fossil fuels and nuclear energy. The Greens call for a separation of retail banking from speculation and for a common savings guarantee system.
European Left. The European Left (far left) has 35 MEPs at the moment. It is fighting the elections on the issue of austerity. It not only wants the end of austerity programmes but the European Left is calling for the scrapping of the stability treaty, coordination, governance, the “Six-Pack” and all similar measures in the budget surveillance system introduced at the European Commission.
The far Left's campaign is being headed by the talismanic Alexis Tsipras of Greece, a country which is suffering after years of budget austerity. The election campaign is based on opposition to the debt burden and the fact that austerity programmes “lead to higher unemployment and deeper recession and therefore to higher public debt”. The European Left is demanding a conference on the question of debt, a write-off of some debt, a freezing of debt repayments and the introduction of a “growth clause” for the remainder of the debt.
The party is mooting a number of ways that the European Central Bank's role could be changed. The ECB should become a genuine lender of last resort. It attacks the idea of strings being attached to aid from other eurozone countries, strings that were attached in order to avoid moral hazard that could be caused by the receipt of aid. Not only should the ECB lend at low - or zero - interest rates but there should not be any political or economic conditions attached to the loans. The European Left says that a monetary policy of this nature would have the benefit of “immediately” ending all speculation on the back of public debt. If bank recapitalisation is necessary, it should be placed under democratic control.
The far Left is calling for a genuine separation of retail banking from investment banking.
They say the ECB should use its money printing powers to finance projects that can create jobs. The party says that alongside the European stability mechanism, the eurozone's permanent bailout fund, a public European development bank should be set up to focus on solidarity and social insertion. It would issue loans based on social and environmental criteria, financed partly by the ECB, partly by the EU's budget and party from the income generated by the financial transactions tax. The European Left recommends a harmonising of company tax as a way to prevent “fiscal dumping”. (SP/EL)