Brussels, 02/10/2014 (Agence Europe) - On Thursday 2 October, the commissioner-designate for economic and monetary affairs, taxation and customs, Pierre Moscovici of France, spared no effort to prove to the MEPs of the EPP and ALDE Groups that he has the credibility to apply the European budgetary rules fairly and impartially, even as regards France.
“I am French, a Social Democrat, I make no bones about this. But in my position, I will not be the ambassador of a country or political party. I will be a commissioner acting impartially and independently of national private interests” (our translation), said Moscovici, who spoke mostly in French, but also showed his command of the English language. Stating that his political career had always been marked by European engagement, particularly when he served as a member of the European Parliament, he warned against the disenchantment of European citizens, particularly among “ordinary citizens and workers”, who no longer feel that Europe is a given, because “Europe has been unable to protect them”. “We are last-chance Europe”, he said, firmly believing that the incoming Juncker Commission has an obligation to get results. And an obligation to be available to the MEPs, although he had to justify and express his regret over the four missed meetings with the economic and monetary affairs committee, when he was the French minister for finance.
Growth. This obligation to get results includes relaunching growth. “We should not accept a zero growth scenario for next year”, Moscovici said in English. “Meeting the challenge represented by the threat of the decline of our economies” has to be done at European level, with the €300 billion investment plan pledged by the future president of the Commission, Jean-Claude Juncker. “Investing is preparing the future”, he said, pointing out that current investment levels in Europe are “17%” lower than pre-crisis. He argued that this fledgling plan should be “targeted” to sectors of the future and strike a balance between private investment “as much as possible” and public investment “when necessary”.
As for the economic mix, the former MEP said that it was possible to act on budgetary consolidation and growth “at the same time”. “There can be no reduction in the deficit without growth and there can be no growth without indebtedness”, he said, adding that every euro spent servicing debt was a euro “lost to the economy and education”.
Stability and growth pact. A number of MEPs of the EPP Group - his fellow Frenchman Alain Lamassoure, Poland's Dariusz Rosati, Esther de Lange of the Netherlands - flagged up the problem of credibility they believe Moscovici faces. Your problem is the difference between what you promise to do as commissioner responsible for overseeing national budgetary policies and what you did as finance minister, said Othmar Karas (EPP, Austria).
The French Socialist stressed on several occasions that “I never strayed from the rules”. He pointed out that all of the French budgets under his authority had been accepted, as forecasts and in execution, by the European Commission and the Council and had helped to bring the deficits down from 5.5% of GDP in 2011 to 4.1% by the end of 2013, at the price of structural efforts of 0.9% in 2011, 1.2% in 2012 and 1.3% in 2013. In response to questions put by Cora van Nieuwenhuizen (ALDE, Netherlands), he defended the structural reforms (employment market, professional training, responsibility pact entered into with businesses) which he brought about in France. This “takes time”, as it took Germany ten years in the 2000s to become the strongest economy in the eurozone, he pointed out, but acknowledged that he could have done better.
Moscovici promised to act “without complacency” and “without excessive rigour”. Count on me to be an “impartial judge” and to treat each country - “including France” - exactly the same, he stressed. His “compass” will be the European budgetary rules, “nothing but the rules, but all the rules”, which are “not stupid”, as they take account of the specific situation of each state.
When pressed for his position on the draft French budget for 2015, which defers the plan for coming below 3% for the public deficit until 2017 (see EUROPE 11167), he sidestepped the question: the current commissioner, Jyrki Katainen, is dealing with this, a decision will be taken “in October or November” and my solidarity with this decision will be “total”. “If the country fails to take the effective actions required, then I will pursue that country without fail”, he said. He nonetheless stressed that it would be up to the Commission alone to decide on any grace period to comply with the public deficit objective. He went on to express doubts as to the existence of “exceptional circumstances” which could justify this extra time, if these circumstances apply to the whole of the eurozone.
Flexibility. When asked by Pervenche Berès (S&D, France) about his take on the flexibility of the stability fact, Moscovici argued against any changes to the pact. Flexibility is “not a woolly interpretation of the rules and it is a well-shorn person who is telling you this!” he joked. Even so, he added that “the system is not rigid”, because it takes account of the specific situations of the state and, in particular, focuses its analysis on the “structural effort”, in other words, without the effects of the economic climate.
EMU. Although there is no longer any risk that the eurozone will fall apart, economic and monetary union (EMU) needs to be consolidated. Moscovici argued in favour of an “ambitious, political, social and budgetary” EMU. “We have to reinforce the social dimension of the eurozone”, and budgetary convergence should not be interpreted as a “downward flight”. The revision of the “2 pack” and “6 pack” budgetary rules should be put to good use to this end. The French commissioner-designate went on to call for the appointment of a “permanent president of the Eurogroup”. On the question of the euro-bonds, raised by Werner Langen (EPP, Germany), he was categorical: the subject will “not be current under this mandate”. As for the management of the financial bailouts in the eurozone, Moscovici described the work of the troika as “necessary”, although the way it works should evolve to reinforce its “democratic legitimacy” and to take account of the social impact of the measures taken.
Taxation. On the tax dossier, Moscovici said that the EU's problem was linked to the paralysis born of the “unanimity rule”, a problem which was recently raised by the outgoing commissioner, Algirdas Semeta. For this reason, enhanced cooperation on the financial transactions tax (FTT) “needs to be a success”, said Moscovici, who believes that a breakthrough on the FTT could serve as a “fulcrum for further enhanced cooperation” in the field of tax. “Where there's a will, we can make progress”, even on tax issues, he said, referring to the directive on taxation on savings, which was taken off ice in March of this year when Luxembourg and Austria lifted their reservations.
Moscovici also confirmed that he had familiarised himself with the taxation plank of his portfolio on the very day Juncker announced the composition of the future Commission. Bringing together economic affairs and taxation is “coherent”, he said. He believes that, although taxation is largely a national matter, there are harmful distortions at European level which need to be remedied. “Employment is taxed too much and energy not enough”, he explained, adding that this was the reason the Commission should call on governments to undertake reforms in this area. “We should talk about taxation more in the framework of the European semester”, he said, calling for harmonisation as far as possible. The debate on the tax burden on employment has already been launched and has given rise to principles which will aim to steer the transition of some of this burden to consumption (see EUROPE 11154). (MB and EL)