Several sources in regional associations contacted by EUROPE gave a very cool reception to the proposal made by French President Emmanuel Macron that would make access to European cohesion funding conditional on fiscal convergence, including on corporation tax rates.
In a marathon speech on Tuesday 26 September, Macron set out his vision for the future of the EU (see EUROPE 11870). Among his many proposals, one attracted the attention of the regions: that access to cohesion funding should be made subject to compliance with a degree of fiscal convergence in Europe.
“In the European Union, we cannot have such disparity in the rates of corporation tax”, he stated, arguing that “this fiscal divergence … nurtures a sort of dis-union, fragments our own models and weakens Europe”.
Given this, Macron said that, in the next multiannual financial framework, he wanted “a range of rates” to be defined (though not giving any detail) to which member states would be committed. He added: “Access to European cohesion funding would be dependent on remaining within this range, because one cannot enjoy the benefits of European solidarity and play against the others”.
No official position has been given but several sources involved in cohesion policy seemed reluctant to embrace the idea. A source in the Committee of the Regions (CoR) pointed out that members opposed any form of conditionality, unless it is ex-ante, and that this stance is consistent with the demands of the Alliance for Cohesion (see EUROPE 11793) and with the opinion drafted by CoR member Michael Schneider (EPP, Germany) (see EUROPE 11738).
In the view of a source in the Conference of Peripheral Maritime Regions (CPMR), the French president’s comments on adhering to the range confirms the direction that the European budget “as a whole” is taking: less an investment budget and more a budget that allows the EU to push the member states on various issues as part of the European semester budgetary process, for example, respect for democracy, taking in migrants, etc.
From the Council of European Municipalities and Regions (CEMR) the response was the same: “The CEMR is against any form of conditionality”, making the point that regional and local authorities have to face many restrictions on investment and “cannot cope with further constraints”.
Regions continue to worry about future of cohesion policy. The French president’s remarks could not, then, be to the liking of local authorities, already alarmed by the proposals of the German federal government (see EUROPE 11800) which would certainly work to the detriment of the less developed regions.
In a debate with Regional Policy Commissioner Corina Crețu and Budget and Human Resources Commissioner Günther Oettinger at a meeting of the CoR’s commission for territorial cohesion policy and EU budget (COTER) on Wednesday 27 September, the regions reiterated their fears for the future of cohesion policy, notably following the presentation of the reflection paper on the future of EU finances (see EUROPE 11820). CEMR spokesperson Carola Gunnarsson stated that the consequence of reducing the cohesion policy budget would be to “remove local governments from the European project” and thus from the priorities of the EU, including managing migration. (Original version in French by Pascal Hansens)