Quels sont les principaux défis de la présidence belge de l’Union européenne? Cet article – en anglais – évoque la transition vers une économie faiblement émettrice en carbone, la promotion des services d’intérêt général ou encore le renforcement de la gouvernance économique européenne.
While the EU is struggling to formulate a credible response to the financial crisis and to its effects on public finances, Belgium plunged again into a political stalemate : the country stumbled on the issue of the infamous Brussels-Halle-Vilvoorde district, a controversial voting constituency crossing the regions of Brussels and the Flanders. The latest escalation triggered an early election, meaning that a caretaker government will lead the EU at a moment when it most needs strong leadership. This situation is bound to last at least until the end of the summer, as the negotiations towards a new government will run simultaneously with those aiming at providing the country with a new political structure.
What are the key challenges facing the Belgian presidency?
On the industrial front, the transition to a “low carbon, resource-efficient and climate-resilient economy” (Gonzalez Report, May 2010) that must lie at the heart of the EU2020 strategy adopted at the June simmit must be supported by a massive investment plan in order for Europe to take a leadership role in the adaptation and mitigation to climate change. Europeans should not underestimate China, the US, South Korea and Japan whose recovery programmes substantially targeted renewables, clean vehicles; Europe cannot afford to be left behind. Besides the strategic reorientation of financial means, this transformation has to be underpinned by a paradigm shift. It implies concretely that the Commission fulfills its commitment of last August to develop and promote on the international stage indicators beyond GDP to reflect the standard of living, the resource efficiency, etc. It should be kept in mind that a previous attempt to do so during the last Belgian presidency failed, as a handful of such indicators was agreed but quickly were abandoned by a rekindled focus on GDP when the EU plunged into a recession in 2002.
As they employe a large part of the workforce and are pivotal in the transition towards a resource- and energy efficient economy, services of general interest deserve a special attention. Belgium who has always pleaded to provide SGIs with a strong legal framework, distinct from standard competition and internal market rules, should urge the Commission “to present to Parliament a comprehensive analysis of the effects of « liberalisation » to date” as it announced in a communication released in November 2007. It is not useless to request it since fiscal consolidation could have collateral effects on the financing, efficiency and inclusiveness of SGI. Such a review could properly pave the way for the next steps : the forthcoming revision of the state aid framework and the implementation of the new Protocol on SGI annexed to the Lisbon Treaty in a way that they become a springboard to an innovative economy with a weaker ecological footprint, including also through public procurement.
In this view, it is striking that the former Commissioner Mario Monti stated in its farsighted report on the Relaunch of the Single Market (May 2010) that « reduction of huge public debt will require in several countries not only expenditure cuts and fiscal discipline but also tax increases. It is also realistic to imagine that consolidation efforts will entail a shift from income taxation towards indirect taxation and a greater emphasis on less growth distorting taxes, notably environmental taxes. Under these conditions, coordination of tax policies could be an important component of a fiscal consolidation strategy at EU level and improve the effectiveness of national action. »
This leads us to the economic governance issue. Already back in 2001, Belgium committed to strengthen the coordination of national economic policies. Yet, the crisis that broke out at the end of 2008 and the Greek tragedy emphasised that imbalances within the euro area have dangerously swelled and hurt the public finances of our Member States. During the Convention on the Future of Europe chaired by Valery Giscard d’Estaing, no real headway could be achieved because of national red lines. The Commission got some more leeway but it was not enough to ensure an appropriate economic governance. Will the proposal submitted by the Commission on 12th of May and the recommendations of the high level group chaired by Herman Van Rompuy expected for the October European Council again bow to narrow-minded national interests? As things stand before the summer, everything seems to revolve around budget surveillance (read : expenditure cuts) rather than around a balanced approach combining fiscal responsibility and tax cooperation in order for Governments and the EU to be able to carry out their missions. Even worrying is the focus on an inter-governmental approach, which is not the best way to ensure that the common European interest is preserved.
The fifth G20 summit which will meet in Seoul this autumn will provide a perfect opportunity to accelerate decisions on key initiatives at global level. Belgium is not as such part of the G20 but will be the spokesperson for the EU. It should seize the opportunity to enable progress on key issues such as establishing a tax on financial transactions and a special contribution from the banking sector (bank levy), a fair and efficient taxation of corporate profits, the fight against tax evasion and the implementation of a carbon tax. In those areas, a global approach should always be the first choice, but the EU should be prepared to proceed alone if no agreement can be found. Following the commitment taken by the G20 in London to “stand ready to deploy sanctions to protect our public finances and financial systems” with regard to non-cooperative jurisdictions such as tax havens, those countries should now take actions since fiscal fraud costs the EU 200-300 billion euro per year which is about 2 times the European budget !
The Belgian presidency will also be faced with the responsibility to bring the Council and the Parliament to an agreement on the first building blocks of the regulation of the financial sector. As these lines are written, the Parliament has achieved a broad-based, multi-partisan agreement on the supervisory structure and on the regulation of alternative investment fund managers. These have thus far been stonewalled by the Council, which remains favourable to a mostly national approach to the issues of regulatory structure. It is of the essence that an agreement be found soon in order for those agencies to become operational on Jan.1, 2011.
As far as the EU’s own resources are concerned, Belgium will enjoy the privilege of opening the debate on the future of the pluriannual EU budget on the basis of a contribution submitted by the Commission. This in-depth review was requested by the European Council in 2006 that decided that it is time to overhaul both the expenditure side (including the long-standing debate on the size of CAP relative to R&D) as well as the revenue side, given that the own resources amount to only a quarter of the budget (contrary to the spirit of the Treaty).
Finally, after the failure of the Copenhagen Summit, Belgium will have to be a presidency as successful as it was in 2001 when it managed to hammer out at the Bonn Conference the political deal that allowed the Kyoto Protocol to come into force. Before the last-ditch meeting in Cancun, Belgium should on the one hand convince its European partners to move the target to a 30% emission cut by 2020 after the Commission showing that the costs were negligible (+0,2 % GDP per annum compared to a 20% cut) and to speak with one voice during the negotiations and on the other hand, ensure that Developing Countries will support an ambitious and binding approach.
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