Without making any genuinely breakthrough proposals, the Luxembourg Prime Minister, Xavier Bettel, defended his country’s traditional position in favour of a political integration of the European Union, during a debate on the future of the EU on Wednesday 30 May, against the backdrop of the Italian political crisis.
Let us speed up our move to becoming a stronger, freer EU that protects our sovereignty more than ever in a globalised world, Bettel said. A staunchly pro-European member of the Erasmus generation, he stressed the need to act together to find common solutions to the major challenges of the moment, such as tackling migration and climate change, defending European rights in the trade dispute between the EU and the United States and increased controls over weapons of mass destruction. In the external field, he made the case for maintaining cooperation aid, always the first budgetary post to be cut, and defended the virtues of multilateralism.
On migration (see other article), the Luxembourg leader warned against attempting to introduce a concept of flexible solidarity, as this will lead to a “reciprocal lack of solidarity”. He regretted the refusal of certain member states to take their share of solidarity in hosting asylum seekers.
Bettel came under fire several times over his country’s attractive tax policy, notably from Belgium’s Philippe Lamberts, who accused Luxembourg of holding up the public country-by-country reporting dossier and the harmonisation of the corporate tax base (CCCTB).
The Luxembourg Liberal took exception to the idea that Luxembourg is now a tax haven, quoting various European Commission and OECD reports. For instance, he does not oppose digital platforms such as the GAFA paying their fair share of tax in Europe, where their profits are made. However, this must be on the condition that the measures taken do not harm European competitiveness to the benefit of the United Kingdom, once it is a third country again, or Asia, and that the digital single market properly emerges.
Describing the Commission’s proposal on the multiannual financial framework post-2020 as a “good basis for discussions” (see EUROPE 12013), Bettel said that he believes in the added value of the cohesion funds of the EU. However, he called for more transparency in their management and said that any mechanism linking European funding to compliance with the rule of law in the beneficiary country should not hit the wrong target by penalising Erasmus students or companies adversely affected by government actions that may run counter to the fundamental values of the EU.
Welcoming Parliament's vote on the ‘posted workers’ directive the day before (see EUROPE 12029), Bettel, whose country has the highest GDP per head of population in the EU, also argued in favour of more upward social convergence. He also spoke in favour of enlarging and deepening the Eurozone, but without being in too much of a hurry to do so, and avoiding excessive macro-economic imbalances within Economic and Monetary Union (EMU).
Allowing the Italians to decide on their future
The political crisis in Italy over problems in forming a government that represents the election results was mentioned during the debate, in the wake of statements by the Commissioner for the Budget, Günther Oettinger, that provoked outrage among the populist parties who were victorious in the Italian elections leading to some unaccustomed back pedalling from the Commission.
Condemning the Italian electorate for their vote or the British for the results of the Brexit referendum would be a “mistake”, Bettel said, adding that for European leaders, the Commission or MEPs, to tell them that they were wrong or what they should do would be tantamount to “pushing them even further into the corner, when we should be trying to get them back into the middle”.
However, Bettel admitted that since coming to power, he had had four Italian counterparts in five years.
On behalf of the S&D group, Portugal’s Maria João Rodrigues said that the Italian crisis shows the “fragility and serious weaknesses” of the European edifice. She considers that Italy is prey to a “feeling of suffocation”. It cannot be hit so hard by an impossible dilemma in which, on one hand, it should accept Europe as it is and which is not working well or, on the other, agree to take a step towards the cliff edge that would be leaving the Eurozone and the EU.
“Can we count on you to be up to the situation?”, she asked, calling for an EMU with a budgetary pillar supporting investments and socio-economic convergence.
In the same vein, the leader of the ALDE group, Belgium’s Guy Verhofstadt, observed that every political crisis in a major Eurozone state turns into a crisis for the entire Eurozone. “The EMU is incomplete, let us say it! The euro is the only currency in the world with the monetary authority but no political budgetary authority”, he stressed.
For Hans-Olaf Henkel (ECR, Germany), there is an entirely different interpretation. “The patient, Europe, is sick (…). Not having heard a diagnosis, I fear that the cure is the wrong one”, he said. He considers that “there is no country in Europe that suffers from the single currency as much as Italy”, which is bogged down in mass youth unemployment and stratospheric government indebtedness, because the euro is too strong for Italian businesses, whilst the German industry is making trade surpluses due to a currency that is too weak for it.
This may not be the case in Luxembourg, but many member states are seeing the gulf widen between the haves and the rest, said Dennis De Jong (GUE/NGL, the Netherlands), expressing disappointment at Bettel’s “super-Liberal” speech.
Italian MEP Laura Agea of the Movimento 5 Stelle, which won the Italian general elections, had some very tough words for the European leaders. She criticised what she described as a “well-orchestrated parliamentary manoeuvre with the complicity of power brokers and financiers” to prevent the formation of a government supported by the parties voted into power by 20 million Italians (see EUROPE 12027). “Is that democracy? It happened with the EU’s complicity”, she said, speaking out against Commissioner Oettinger’s statements.
Agea went on to stress that she and her movement are “not the gravediggers of Europe” and that they do “not wish to destroy either the EU or the euro”. The future of the EU is in danger, but “this is the fault of the situation that you have created”. “Where are the euro bonds, the tax transfers between countries in surplus and countries in difficulty? Why are there still tax havens in Europe”, she asked, pledging a future that respects the will of the people to change the present. (Original version in French by Mathieu Bion)