A new European growth model, energy autonomy, public and private investment financing and international tax reform were the main themes of the speech by French Finance Minister Bruno Le Maire, who presented the economic and financial priorities of the French Presidency of the Council of the European Union on Tuesday 25 January in the European Parliament.
Mr Le Maire recalled that an extraordinary European summit on 10 and 11 March will attempt to lay the foundations for a new “European economic model”, which he said should be sustainable, fair and innovative (see EUROPE 12870/10). To be sovereign, our continent will have to be innovative, but that will not be the case if we use Chinese 5G technology, American space launchers and Russian satellites, he said.
Responding to Stéphanie Yon-Courtin (Renew Europe, France), he called for massive public and private investments to finance the ecological and digital transitions in Europe. According to him, public funding should be able to act as a lever to attract private investment in a ratio of “1 to 3”. “States will not be able to do it alone”, he said.
The EU taxonomy will help attract private funding (see EUROPE 12875/9). On this point, the Minister reiterated his position that the draft text submitted by the Commission, which provides for a transitional role for nuclear energy, was “balanced”. Investing in Europe in nuclear power, renewable energies and, in the future, in “green hydrogen” would help strengthen the EU’s “energy independence”, he added, referring to Russia’s ability to put pressure on the EU, which is 40% dependent on Russian gas.
In parallel, the EU Finance Ministers will discuss the reform of the fiscal rules at their informal meeting on 26-27 February. This discussion could lead to a legislative proposal from the European Commission next summer (see EUROPE 12871/3).
We will see if a majority of Member States call for regulatory changes, said Mr Le Maire, in response to a question from Markus Ferber (EPP, Germany). He considered it “preferable” for the Ecofin Council to define “a general framework” for the envisaged reform “so that the details can be worked out in the second half of the year”.
Mr Le Maire also reminded Hélène Laporte (Identity and Democracy, France) that France’s objective was to gradually reduce its public deficit, which had been increased by the fight against the Covid-19 pandemic, so as to come back below 3% of the national GDP in 2027. This is not austerity, as “we are going cautiously where other Member States are going faster ”, he contradicted Manon Aubry (The Left, France).
Franco-French stand-off over taxation
French MEPs Claude Gruffat (Greens/EFA), Manon Aubry and Aurore Lalucq (S&D) criticised the French authorities’ action on taxation, the first criticising opaque links with private interest groups and the other two a minima agreement at the OECD on international tax reform.
In April 2021, an unsigned French document was circulated within the EU institutions during negotiations onpublic country-by-country reporting (CBCR). It would have been largely inspired by a position of the French employers’ association (see EUROPE 12705/13). Aurore Lalucq called this episode “a shame for us as French people”.
Mr Le Maire denied that the French authorities were colluding with private lobbies, calling these “veiled accusations” “unacceptable, inappropriate and regrettable”. He criticised MEPs for asking only “French political questions”.
Claude Gruffat and Manon Aubry also felt that the OECD agreement on international taxation (see EUROPE 12871/2) was not ambitious enough. Providing for a minimum tax rate of 15%, it “coincidentally meets Ireland’s criteria”, Mr Gruffat insinuated.
“A more ambitious agreement is simply no agreement at all. My ambition is to remove the last obstacles”, replied the French Minister, reiterating the French Presidency’s desire to reach a unanimous agreement in the Council on the directive integrating pillar II of the OECD agreement during the first half of the year. Faced with Manon Aubry’s invective, he replied that an agreement “implies a spirit of compromise, which you totally lack, and not radicalism”.
Finally, Mr Le Maire supported the improvement of the Code of Conduct on Harmful Tax Practices (see EUROPE 12848/9) as well as the amendment of Article 116 TFEU to allow for a shift to qualified majority voting by Member States on tax decisions. (Original version in French by Mathieu Bion and Anne Damiani)