European economic policies create uncertainty and penalise resilience

A stable, prosperous European Union (EU) requires better democratic governance, completion of Banking Union to deepen Economic and Monetary Union (EMU), greater resources and sustainable finance. It is essential both in order to fight tax fraud and fake news and to harmonise taxation and attract investment in order to increase the EU’s resilience to potential crises in the near future. These are some of the main conclusions of a round table on The European economy: reality and challenges for the future held on 5 February at the European Commission Representation in Madrid.

The round table, organised by the European Economic and Social Committee (EESC) and the Commission Representation, is the first of three days when both the Committee’s proposals and diverse views on the European situation and the future of the EU are discussed with qualified representatives of Spanish civil society, with a view to encouraging participation in the European elections in May.

In her opening speech at the event, Isabel Caño, EESC vice-president, pointed to the need to overcome the uncertainty about the future experienced by many EU citizens. To this end, the vice-president said that better democratic governance and greater resources were necessary.

Hervé Falciani, founder of the Tactical Whistleblower association, pointed out that VAT fraud benefits 200 Mafiosi and a chain of distributors and suppliers of goods and services, many of them driven by false economic competition, and is therefore another major problem in the EU. Reliable data is — in his opinion — essential to combat accounting and political misinformation and one of the main aims of his work.

In this context, the issue of so-called “sustainable finance” was also discussed. Carlos Trias, EESC member representing the Spanish Consumers' and Users' Council, stressed the European Parliament’s and EESC’s support for the Commission’s action plan on the subject and concluded: The action plan will make businesses publish reliable, relevant environmental, social and corporate governance information and make rating agencies review the way they assess risk. Investment advisers and managers will be required to interact with clients to reflect their sustainability preferences when putting together investment portfolios and to explain the resulting impact on a regular basis.

The debate on the state and economic policies of the EU reflected the speakers’ concern at the lack of reforms and progress in building EMU. They all regretted the inability to overcome difficulties in developing a common reform project and were concerned about the possibility of a new debt crisis in the EU. At the moment, the EU would not be ready to face such a challenge.

Miguel Otero, researcher at the Elcano Royal Institute, expected fresh impetus from the French and Germans. From his point of view, the initial French proposals for EMU reform would be a good starting point. Otero called for the Eurogroup to be anchored in the institutions and for the Community method, not the intergovernmental method, to be adopted to govern institutions such as the European Stability Mechanism.

Although the Spanish economy is growing faster than the euro area average and it would be possible to reduce Spain’s GDP deficit to 1.3%, Isabel Colina, Deputy Director-General for Economic and Financial Affairs at the Ministry of Foreign Affairs and Cooperation, stressed the need for Banking Union to be complemented by a common Deposit Insurance Scheme and for the revenue from the coming EU Budgets to come to a greater extent from the EU’s own resources and not the contributions allocated among the Member States.

The event also reflected on economic policies during the crisis and the current economic policies. Javier Doz, EESC member representing the Spanish Workers’ Commissions trade union Comisiones Obreras, firmly believed that “extreme austerity” policies, with their social and political consequences, had a negative effect on the ability of European economies to recover. Javier Doz said that the EESC would call for an economic policy of investment, better financing of businesses, quality employment and pay improvements and fighting tax fraud and tax harmonisation.

Finally, the participants at the event welcomed the reincorporation of industrial policy into European debates. Andrés Barceló, EESC member representing the Union of Steel Producers (UNESID), said that the main thing was to make Europe an attractive region for industrial investment and ended by highlighting the importance of training and of young people in Spain studying more engineering, physics, chemistry and mathematics.

The next event organised by the EESC and the Commission Representation in Madrid will be held on 4 and 29 March and will once again be open to all areas of Spanish society. The respective topics will be European policies in a world in transition and The political situation and upholding democratic values in the EU.