Aurore Lalucq (S&D, French), the new chair of the European Parliament’s Committee on Economic and Monetary Affairs (ECON), wants to maintain the European Union’s status as a global economic power (see EUROPE 13459/18). During her second term, she wants to defend the EU’s economic interests by changing the political logic (Interview by Bernard Denuit & Anne Damiani).
How do you see the chairmanship of the ECON Committee, given that the European Parliament is not the same as it was when you arrived five years ago?
The European Parliament has changed politically. I hope that we will succeed - and this is my objective - in ensuring that the ECON Committee is a strong committee. The previous term was very much focused on environmental issues - it was the term of the ‘Green Deal’ - and geopolitical issues. This term will be about reaffirming Europe as an economic power. It begins symbolically with the publication of the Draghi report.
Let’s not be alarmist: Europe remains an extremely strong global economic power. Nevertheless, 60% of the green technology value chain is in China. There’s also the United States, which has implemented stimulus plan after stimulus plan, which are investment plans for the ecological transition. I don’t want the EU, the continent of the Industrial Revolution, to miss the boat. Putting the ‘Green Deal’ on hold is not saving the economy, it’s giving up on the Industrial Revolution. Especially as we know that there are threshold effects in industry. When you have industries that have already developed elsewhere, particularly in China and the United States, it’s then very difficult to compete with them.
This term will be eminently economic and industrial. The ECON Committee will therefore have a central role to play in enabling the EU to meet the major challenges ahead: financing defence and the green and digital industries, ensuring Europe’s strategic autonomy and banking and financial stability.
The ECON Committee has also changed. It is 72% male, with 30 women and 77 men, compared with 60% previously. How do you explain this change in parity?
I think that political currents do not have the same rules in terms of parity. I have always said that I didn’t want the economy to be the preserve of men and for us to end up in a situation where ‘serious’ subjects are reserved for them, while social affairs are more the preserve of women. I would like to see women more present and actively involved in economic, monetary and financial issues in particular.
Do you agree with the findings of Mario Draghi’s report on competitiveness (see EUROPE 13478/17)? Are you in favour of his recommendations to stimulate investment?
This report provides a good diagnosis. Basically, he’s telling us that the world has changed, that it’s no longer a time of happy globalisation. The blocs never completely disappeared, but it’s clear now that they have transformed. The EU needs to wake up to this fact and move away from a guilty naivety for Europeans. We need to get away from a kind of dogmatism and look at reality as it is, if we don’t want to be overtaken by our competitors on industrial issues.
Mr Draghi also places great emphasis on digital technology. How is it that all the talent we had in Europe, particularly in France, ended up in the United States? It’s terrible, it’s our industries that are over there. We promoted the ‘start-up nation’ vision, but at a time when we need to increase the size of businesses, that’s where the problem lies and where investment is lacking. I think he’s right about joint borrowing. But this raises a number of questions: firstly, how will previous debt be repaid? In addition, are we always going to borrow or are we going to do things differently? The reality is that we have massive investment needs. Some are forecasting 2 to 3% of Europe’s GDP. Personally, I think we’re looking at 5% at least. I understand that this can be a distressing observation, but the good news is that we have an extremely homogeneous market, infrastructure that is still going strong, and skills. Europe is not obsolete. However, we need to act now. We need to change the approach of not starting from what we have, but choosing an objective and giving ourselves the means to achieve it. We lack a systemic doctrine.
Mario Draghi believes that prudential rules in the financial services sector are limiting the financing of innovation. Should these rules be relaxed in order to deepen the Capital Markets Union (CMU) (see EUROPE 13478/17)?
Relaxing prudential rules is a no. We are already struggling to implement Basel [agreements] (see EUROPE 13473/3). I do not share the view of the lobbies that these rules are damaging our competitiveness or that applying them would lead to difficulties with the United States. Let’s not forget the crisis that occurred a year and a half ago in the United States: these same people recognised the importance of these rules in such a context (see EUROPE 13145/18). But once the crisis was over, they were once again asking for relief on the pretext of competitiveness. If some banks find the Basel rules restrictive, it is because they are suffering from a general problem of competitiveness. Banking and financial stability must not suffer as a result.
Even if the CMU could finance around a third of EU projects, it could not replace the use of public money: these two types of funding are based on different approaches. Public investment will continue to be absolutely essential to finance projects that are not immediately profitable, particularly in the area of climate adaptation. What’s more, setting up the CMU is not straightforward. It would require a single supervisor, for example, but there is currently no consensus on this issue. We also need to harmonise bankruptcy law and bring clearing back to Europe... The CMU could be useful, but it will not be the miracle solution to our financing problems. I am concerned about a ‘pick and choose’ approach to the Draghi report, where aspects such as the revival of securitisation would be pushed to the forefront, without guaranteeing consistency with banking and financial stability.
The revised Stability Pact will be in force from January 2025. Several countries, including France, have asked for more time to present their multiannual budget plans. What advice would you give to the Barnier government?
Stop being arrogant and take things seriously, because France needs to regain its credibility. I’ve never been keen on the Stability and Growth Pact. In fact, I voted against it. However, public debt is still public money and it must be used carefully. For months, indeed years, the IMF has been warning about France’s budget trajectory, pointing out that the forecasts are unrealistic. When it comes to tax expenditure, the EU is just as clear: you are reducing revenue by cutting social security contributions and production taxes, but this is neither consistent nor sufficient to boost growth. This tax policy is very expensive and must be seriously re-evaluated by the Barnier government, without ideology.