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Thoughts at the Turn of the Year

Member of European Parliament – Sven Giegold – looks back at 2015 and some of the key Green political fights on the European scene. He sheds light on what he thinks will be the 2016 key battlefields for the Greens and for Europe to survive nationalisms and populisms.

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This article was originally published on the website of Sven Giegold here.

As the New Year begins, the European project has good reason to be worried. It is clear that European governments are unwilling to deliver common policies to tackle social division in Europe, the instability of the Euro, the impending climate collapse, the refugee crisis and terrorism. The European institutions are working in overdrive.

This allows populists to give common European endeavours a worse name than they deserve, and to praise the false solution of national sovereignty. A new type of nationalism is on the rise. It will not convince opponents of European unity to scream “now more than ever”. Simply pointing out that nation states are no longer able to deliver solutions to big political problems will also not suffice.

Far-right, right-wing populist and eurosceptic parties are experiencing a worrying growth in France, Austria, Finland, the United Kingdom, Sweden, the Netherlands and Poland. At the same time we are also witnessing a renewal of “left-wing” parties arguing for national sovereignty, like Podemos in Spain, the 5 Star Movement in Italy, the Socialists in the Netherlands and even partly Syriza in Greece. They all promise the illusory: social security, democracy and control over economic power, achieved by weakening the EU and focusing on the nation state. They also offer an identity which we pro-Europeans currently do not radiate.

Many centre-right and centre-left governments promoting European unity lose their Euro-political courage when faced with these challenges and the growth of populist parties. They dither on Europe and muddle through as technocrats rather than tackling problems using common European policy, which would make European unity look good again to citizens. Because of weak common European action they are not able to deliver the most effective solution to the nationalist offers of identity: a credible call for a European identity based not on supposed national unity, but on diversity, civil and social rights for all, democracy; standing for human rights and peace. Europe has done a lot of work to these ends and this is worth protecting and continuing to develop. To combat European disillusionment we need more than forcefully arguing for the identity of the European Project – we need successful common action.

Pure win-win solutions are rare in Europe. To solve problems on the European level, national governments must often be willing to accept short-term costs. Eurozone countries, for instance, could benefit from economic stability brought about by a common economic and financial policy. However, this would mean Germany would have to realise that a common Eurozone financial and economic policy would lead to a drop in its high export surplus – because export surpluses for some mean others are left over-indebted. Higher investment and wages in Germany would certainly be in the best interests of the vast majority of people in the country. On the other hand, policies from the French Socialists do little to create trust, as Germany’s most important Euro partner country, in their ability to reform. Europe needs greater competencies to ensure that economic and financial policy is compatible with the Union cohesion.

Many voters for right-wing populist parties come from regions which cannot profit from economic globalisation – regions in which Europe must invest in environmental and social jobs of the future. Countries like Greece and Portugal cannot afford to finance these investments themselves right now, so Europe should finance these Community projects out of solidarity, as an investment in our common future. These transfers are good for social and economic cohesion and are urgently needed. In regions faced with development problems, Europe should finance investments in the future such as renewable energy, sustainable tourism, education, etc. These could work as an antidote to the ideologies of the Front National and other nationalists. Aggressive investment is also needed to achieve ecological modernisation of our economy and our consumption. But the current German grand coalition government does not trust itself to use its large majority to promote a strong European policy in Germany. Reversely, Germany needs European solidarity to find a humane way out of the refugee crisis. Other countries do have a responsibility taking in an appropriate number of refugees, and Europe must ensure that those seeking protection are treated well everywhere. To effectively combat the causes of flight, Europe needs a common foreign and development policy. Until now, with 28 EU Member States working in parallel – and all too often against one another – with their limited resources, Europe will be punching well below its weight in terms of peacefully mediating conflicts or helping in the economic development of poorer countries.

Strong common policy as a reaction to the deep crises are not illusory in Europe. Time and again, this is how Europe has progressed. I see the Greens’ role as pushing for future-oriented European policy, instead of myopically and timidly shying away from problems. We have to confront opponents of European unity with European hope. As a key pro-Europe party in Germany, that is our job there too, as the rise of the eurosceptic Alternative for Germany party has shown that Germany is not immune to Euroscepticism and xenophobic populism.

Banking Union: A Success Story

This is the attitude we Greens must have when making policy across Europe, and it is what I seek to do in the European Parliament’s Economic and Monetary Affairs Committee[1]. As a reaction to the financial crisis, legislation around the financial sector was comprehensively strengthened, ending a long period of deregulation on the financial markets. Despite the measures taken not being as centred on consumers and stability as I would have liked, the financial market reforms were still a formidable example for common European action. On 01/01/2016, the Bank Recovery and Resolution directive came into effect, meaning that now, everywhere in Europe – a few irritating but limited exceptions aside – states are barred from saving banks in crisis with tax payers’ money. This is the end of an era for those parts of the banking sector which have been pampered with subsidies. It is key that now Europe and its Member States must comply with current legislation and honour their promises. Banks must now be allowed to go bust, just like any other business.

Tired of Reforming Financial Markets

On the whole, though, when it comes to reforming the financial markets in Europe fatigue has set in. It is astonishing that almost nobody seems worried about the financial crisis escalating again now. The combination of weak investments in Europe, ongoing low-interest-rate policies from the European Central Bank and unequal income distribution are leading to a surplus of savings over investments. I feel obliged to warn against new speculation-fuelled bad investments and the risks to insurance companies, classical banking, and private and workplace pension schemes. Lop-sided reforms to improve competitiveness are not enough – policymakers cannot stand by and watch as a new financial bubble develops. Rather, Europe needs a comprehensive Green New Deal policy to steer excess capital towards long-term investments – ecologically modernising the economy, education, health, and other future sectors. Until now, Europe has not done enough in this area. When I talk to managers from banks, insurance companies and funds, they see the dramatic state of the markets because of low interest rates and limited demand for capital. Even in a booming city like Düsseldorf, banks in the area do not know what to do with all the liquidity of their savers. I find myself shaking my head at how few “financial experts” are calling for a comprehensive policy for sustainable investments even though they would ultimately benefit from one.

The Fight for Tax Justice in Europe

One key to more investment-focused policy is available to Europe in the form of collaborative taxation policy. Tax rates on top incomes, assets and corporate profit have been in a crazy, divisive race to the bottom for over twenty years. The very people who have profited from globalisation are taxed less and less. A common policy against international tax evasion and tax dumping could kill three poor birds with one stone: firstly, in terms of European politics, it would show eurosceptics that Europe is best placed to uphold its principles in a globalised world acting together. Secondly, on a social level, as European co-operation can help those who have lost out through globalisation by effectively taxing those who have gained from it. Thirdly, economically, by directing the capital of the wealthy into useful investments for the future. International negotiations on tax co-operation have been going on since as far back as the 1920s, with limited success. But the empty coffers of many states, caused by the costs of the financial crisis and various tax scandals have kicked European policy into action. Banking secrecy – a sacred cow for many states, including Germany – is now history internationally. For private individuals, that makes tax evasion far more difficult. But transnational corporations still have a long list of ways to unabashedly dump tax. It is well known that companies like Amazon, Google and Starbucks do not pay the taxes they should pay, but this has never lead to any serious political pressure, because the political will to act against these practices has been limited, as too many wealthy individuals and corporations take advantage of European tax competition. There is no way to take action against large companies’ tax dumping without slaughtering another, bigger sacred cow: European tax competition in favour of the well-off.

Yet, after journalists brought the scandal of tax rulings in Luxembourg to light, the opportunity arose to increase pressure from the European Parliament for tax co-operation. Despite resistance from the leadership of the European People’s Party and Socialists and Democrats groupings, we worked together with the Left and succeeded in establishing a special committee to investigate tax scandals. This was difficult, as we were suddenly working against current or former national Finance Ministers and EU Commissioners from big parties who had stood idly by for years during the tax scandals, including the Christian Democrat Jean-Claude Juncker and Social Democrat Jeroen Dijsselbloem. In the end though, thanks to numerous “rebels” from the Christian Democratic Union/Christian Social Union as well as Social Democrats from various countries, we gained enough support. After a full six months, the committee delivered some good work. Loopholes in European tax law being used by international corporations to avoid taxation were uncovered. The committee’s final report contains a long list of stringent measures against corporate tax dumping which was approved by a broad pro-European majority of Christian Democrats, Social Democrats, Liberals and Greens in the European Parliament Plenary[2] . Now it is time to hold Member States’ and the European Commission’s feet to the fire to make sure they implement these requirements in practice.

The committee did, though, fail to find out which politicians made the tax scandal possible in the first place, either actively or through years of inaction, as Member States and the EU institutions denied the European Parliament access to almost all sensitive documents. Despite that, the two big parties wanted to shelve the special committee’s work. It was only when I gave journalists from Der Spiegel and Le Monde a glimpse of a record from the Council Code of Conduct (Business Tax) Working Group that the situation changed: the journalists were able to find out how the Luxembourgish, Belgian and Dutch governments under Finance Ministers Juncker, Reynders and Dijsselbloem impeded tax co-operation over a period of years at EU Committee meetings behind closed doors. The big Der Spiegel, Le Monde and Spiegel-Online articles[3] drastically changed the Committee’s situation: even the Christian Democrat and Socialist co-ordinators were now in favour of extending the Special Committee’s mandate so it could complete its work. Then the matter was in the hands of the leadership of the Christian Democrats and Social Democrats which were entirely opposed to extending the work. President of the European Parliament Martin Schulz tried to use legal trickery to overturn the existing, unfinished mandate and the Socialist leadership tried instead to push through a new Special Committee. This new Special Committee’s mandate to investigate the scandal would then have been radically weakened. This lead to so much controversy in the media and in Parliament that the old committee’s coordinators were tasked again to agree on the mandate of the new committee. And, within an hour, Peter Simon (Social Democrat), Burkhard Balz (Christian Democrat) and other Liberal and Left coordinators had agreed on a new mandate text that included investigative powers, which was then approved by a very large majority in the Plenary session of the European Parliament. We could have been spared weeks of back-and-forth if everyone had focused on clearing up from the very beginning, but tax policy affects distribution and is therefore a question of power – which naturally causes hard fights. Be that as it may, we now have the opportunity to spend many more months digging into the reasons for non-co-operation between Member States when it comes to taxing international corporations. This work will surely create new pressures so that decisions can be taken on effective tax co-operation between Member States, for the good of Europe, social cohesion and fair competition.

Strengthening the European Public and Civil Society

In many areas of policy it is not just a lack of pro-European political will from the Member States holding back meaningful common action. The public in Europe has, until now, been comparatively weak, while mass media barely ever address even scandals and the most important news from the European institutions, even though EU authorities are actually more transparent and open than most national state institutions. However, the balance of power between various interest groups in Europe are certainly less favourable than they are on a national or regional level. Critical civil society, churches and trade unions are far less able to act on a Europe-wide basis than they are on the national level, making it easier for governments to wait out problems or offer sticking-plaster solutions. If we want a Greener Europe – a more ecological, more social, and more democratic Europe – then we must work to strengthen the European public and create a European civil society which is able to act[4], for without co-operation form civil society and forward-looking sectors of the economy we cannot reach our Green goals.

 

More Transparency and Democracy in Europe!

If the relative weakness of critical civil society is one side of the coin, the influence of well-organised economic lobbies is the other. They are extremely influential in European politics and take advantage of back-room meetings that lack transparency. Member States in Brussels are often working in “their” businesses’ interests. Well-organised business associations and business representatives influence the EU institutions. This is not a eurosceptic conspiracy theory, it is the reality of daily life in the institutions. To shift the focus of European politics to the common good and towards less well-organised interests, we need new democratic rules in Europe; a point I have raised time and again during political debates on the regulation of financial markets. It is not a betrayal of the European idea to speak of this openly – actually, pro-Europeans cannot allow faults in European politics and policies to become the sole domain of those opposed to European unity. New enthusiasm for the European idea needs more than successful common action; it also needs new trust in the European institutions by way of more democracy and greater transparency. I was therefore happy to be nominated as an alternate (substitute member) to the committee for constitutional affairs to the rapporteur for “Transparency, Accountability and Integrity of the EU institutions”. Because of the European Commission’s refusal to work on drafting legislation on financial market regulation I have now more time and therefore the opportunity to deal with transparency and democracy in Europe more generally. After a long participatory process in Parliament and with civil society, I presented my report on greater transparency, accountability and integrity of the EU institutions in November 2015[5]. The proposals include complete transparency of all organised lobbying activities, with a comprehensive lobbying transparency register and a “legislative footprint,” in which all involvement of lobbyists in the legislative process would have to be documented, alongside more stringent and independent checks on conflicts of interest and waiting periods between going from a job in the European Commission or Parliament to being a lobbyist. We want the composition of so-called Expert Groups in the European Commission to be balanced. “Trialogues” at which informal negotiation on EU legislation takes place between the European Parliament, the European Commission and the Council of the European Union should also become as transparent as the European Parliament already is. The entirety of EU trade policy, as well as the Eurogroup of Eurozone finance ministers, should finally also be made fully transparent. Whistle-blowers, too, need legal protection across Europe. These proposals will bring Europe closer to its citizens, but above all will help to tip the balance of power away from powerful lobby organisations and in favour of civil society. In short, they will lead to greater transparency and more democracy in Europe – both of which are needed if we are to successfully oppose Euroscepticism and create a bolder Europe. To be able to push through these demands, we Greens will need a lot of support from citizens and civil society over the next few months. We cannot afford to be naïve – we are dealing with powerful interest groups that will not give up easily.

The planned free trade agreements with over 30 countries are the antithesis of the push for more democracy in Europe. TTIP, the EU-Canada agreement CETA, the treaty with Singapore, and the international Trade in Services Agreement (TiSA) all have one thing in common: they will limit European democracy. In exchange for a small boost in economic growth, opportunities to make the European Single Market social, ecological and consumer-oriented will be limited, breaking the promise that Europe would help create a social market economy even in a globalised age. TTIP and the other deals are not just a classical free trade agreement; they are an impediment to democracy[6]. For all these reasons, a key goal in 2016 is to stop TTIP, stop CETA and stop TiSA. For a new beginning in European trade policy!

 

 

[1] http://www.sven-giegold.de/2014/bilanz-5-jahre-europaparlament-persoenliche-bitte-zur-wahl

[2] http://www.sven-giegold.de/2015/taxe-sonderausschuss-ii-starkes-mandat-fuer-uneingeschraenkte-aufklaerung/

[3] http://www.sven-giegold.de/2015/luxemburg-und-die-niederlande-haben-jahrelang-massnahmen-gegen-steuerdumping-blockiert/

[4] The group, called WeMove.eu, organises pan-European campaigns for a democratic, social and ecological Europe: http://wemove.eu
European Christian Convention, organised jointly by Christians from across Europe. A newsletter about the project’s status comes out roughly every other month: https://listen.jpberlin.de/mailman/listinfo/ecc-info

[5] You can find the 48 proposals here: http://www.sven-giegold.de/2015/48-proposals-how-to-separate-economic-and-political-power-in-europe/

[6] http://www.sven-giegold.de/2015/ttip-ceta-co-die-demokratiebremse

Date Published

11/01/2016

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  1. […] Warm thanks for all the help with the translation to the Green European Foundation: http://www.greeneuropeanjournal.eu/7729-2/ […]

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