Nicolas Dufourcq, chief executive of the French public investment bank (BPI), made a notable appearance in Brussels on Wednesday 10 June at an event organised by the European Long-Term Investors Association, or ‘ELTI’. Asked to give his views on the content of the post-2027 Multiannual Financial Framework (MFF), the Mr Dufourcq gave a more general, and somewhat worried, assessment of the EU’s budgetary situation. In his view, taxing US digital companies is part of the solution.
“I think that the European budget, in the difficult times we are going through, must show that the European institutions have understood that the world has completely changed. So, if you give the impression of putting together much the same budget as in the past, plus €170 billion to repay the debt, politically that will not work”, he warned from the outset.
In Mr Dufourcq’s eyes, the weight of the EU countries’ welfare states, exacerbated by ageing populations, is “literally devouring us alive as regards our room for manoeuvre to finance public policies in Europe. That is particularly true for France (...)”.
Faced with this phenomenon, “we cannot remain in denial, claiming that we are in the 1990s (...)”, further warned the man who has headed BPI since 2013. “If we want to be able to mobilise resources when faced with China and the Americans, we need to make savings. Europe cannot simply, for instance, ask France for €10 billion more than its previous contribution. But where would that come from? (...) From debt? That does not stand up”, he said, referring to France’s record debt burden.
According to Nicolas Dufourcq, part of the solution will have to come from taxing digital activities in Europe, the “taxable base of modern times”, which “we do not control” – the sector’s giants, such as Google or Microsoft, being US firms. On this subject, “confronting” Washington will therefore be “inevitable”, stressed the former Capgemini executive.
While the European Parliament and France are notably pushing for such taxation of the sector at European level, the European Commission and several Member States are above all worried about angering the US President. (Original version in French by Clément Solal)