Sunday

28th May 2023

Franco-German 'growth' plan looks to EU funds and taxes

A six-point plan drafted by France and Germany has suggested corporate tax "co-ordination," an EU financial transactions tax and the re-deployment of EU funds in troubled countries as ways to spur growth and jobs.

Following Standard & Poor's recent downgrade of nine euro-countries, including France, in which the ratings agency warned that austerity and budget cuts are not the way out of recession, Paris and Berlin have teamed up once more and drafted a six-page paper called "Ways out of the crisis - strengthen growth now!"

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The paper - seen by EUobserver - is supposed to be discussed at the EU summits on 30 January and 1-2 March, the latter being a meeting especially dedicated to growth and jobs.

The financial transactions tax - a pet project of French President Nicolas Sarkozy ahead of his re-election bid in April - features among the six proposals under "efforts to reinforce the framework of financial market." On Monday, hours before meeting their colleagues from the other 25 member states in Brussels, the German and French finance ministers will gather in Paris to thrash out a common position on the so-called Tobin tax, named after the Nobel prize laureate James Tobin who initially conceived it.

Britain, Sweden, Denmark, Malta and the Czech Republic oppose the tax, saying it is counter-productive in the absence of a global deal which would stop firms from fleeing to tax havens in Switzerland or the Caribbean.

Even more controversial are plans for "tax co-ordination" and another Franco-German proposal to be put forward by end of February on the "convergence of their corporate tax."

"European institutions and member states should accelerate the process of tax coordination in order to foster growth, removing obstacles to the functioning of the single market and preventing tax abuse and harmful tax practices," the paper says.

Apart from the Tobin tax, both leaders want to speed up EU legislation on an energy tax and a "common consolidated corporate tax base."

The latter would introduce a common European formula for calculating a tax on the profits of multinational firms, a taboo topic for Ireland, for instance, where corporate tax is only 12.5 percent.

Another controversial proposal would have 25 percent of unspent EU regional funds in countries under a bail-out program or under serious economic difficulties redirected to a special "fund for growth and competitiveness." The money would no longer be managed by the national authorities, but by the EU commission "in liaison with the European Investment Bank." Projects financed by this fund should have "clear targets" that can be implemented in 2012, for instance loans to small and medium enterprises or research institutes.

The two leaders also want existing national programs under which people and companies can apply for EU funding to be revised "in order to improve their impact on growth and competitiveness."

Late payments to the beneficiaries of EU funding should also be reduced by lowering the ceiling to one month, the paper suggests.

As for employment-boosting measures, one of Sarkozy's make-or-break campaign themes, the document asks governments to instruct employment agencies to make an offer to every unemployed person - be it for a job, an apprenticeship or further training.

The EU commission is invited to make a comparative study to how short-term jobs and trainings are being used in member states during economic slumps. Labour taxes should be lowered throughout Europe, cross-border employment spurred. And a "social forum" should be held in the first half of this year.

Merkel to back Sarkozy's re-election bid

The battle for the French presidency has taken a new turn after German Chancellor Angela Merkel announced she would help campaign for French President Nicolas Sarkozy.

PFAS 'forever chemicals' cost society €16 trillion a year

Researchers found that global societal costs of the so-called forever chemicals or PFAS amount to €16 trillion per year. Meanwhile, the bigger producers of these chemicals are also among the ones spending the most to lobby EU policies.

EU: national energy price-spike measures should end this year

"If energy prices increase again and support cannot be fully discontinued, targeted policies to support vulnerable households and companies — rather than wide and less effective support policies — will remain crucial," the commission said in its assessment.

Opinion

EU export credits insure decades of fossil-fuel in Mozambique

European governments are phasing out fossil fuels at home, but continuing their financial support for fossil mega-projects abroad. This is despite the EU agreeing last year to decarbonise export credits — insurance on risky non-EU projects provided with public money.

Latest News

  1. How the EU's money for waste went to waste in Lebanon
  2. EU criminal complicity in Libya needs recognition, says expert
  3. Europe's missing mails
  4. MEPs to urge block on Hungary taking EU presidency in 2024
  5. PFAS 'forever chemicals' cost society €16 trillion a year
  6. EU will 'react as appropriate' to Russian nukes in Belarus
  7. The EU needs to foster tech — not just regulate it
  8. EU: national energy price-spike measures should end this year

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us