The European Movement has sent an open letter to European leaders ahead of the EU Council scheduled for 23 April. The letter was signed by some of the most important Italian and European economists.
Within the document some of the most important actions to be implemented in order to react to the economic downturn due to the coronavirus pandemic which has affected all the countries of the Union. An emergency to which Europe must respond united, with common and effective measures.
The Movement promotes the use of debt instruments “issued by European institutions”, the so-called Eurobonds, and considers the responses given to date by Brussels to be "insufficient", namely the Mes credit lines intended for health spending, the interventions of the ECB and the EIB and the Sure unemployment fund.
What is needed then? The European Movement proposes a joint medium-term reconstruction plan to be implemented within a multiannual financial framework and endowed with two trillion euros. A project capable of responding to four principles: allowing the EU to guarantee common goods to all European citizens; increase tax revenue; overcome the tax avoidance of multinationals that exploit the preferential tax regimes guaranteed by some nations; introduce a web tax and a carbon tax.
We suggest below the full text of the letter sent to EU leaders by the European Movement:
The agreement in the Eurogroup of 9 April opened the door for the European Commission and its will to restart negotiations on the Multiannual Financial Framework (MFF) between the Council of the Union and the European Parliament.
These negotiations had reached a deadlock in the European Council of 26 February due to the exacerbated conflict between the so-called "frugal countries" and the "friends of cohesion" after almost two years of dialogue of the deaf in a futile intergovernmental negotiation.
After the health emergency, Europeans will have to face not only the economic emergency that will have to be resolved, but even more the need for a pact for a social and sustainable multi-year development throughout the European Union.
The EU urgently needs debt instruments to effectively promote public and private investment and a better balance between national economies: the epidemic symmetry will certainly be replaced by an unsustainable asymmetry between states, between regions and between social classes.
These debt instruments must be issued by the European institutions to raise funds on the markets on the basis and for the benefit of all member states.
These debt instruments must not come from a group of states, because a limited initiative can create a deep and dangerous division in the Eurozone, paving the way for market intervention against the stability of the Euro.
Investors will be willing to buy them even more if the tools to repay them will not come from voluntary contributions from the Member States but from a strong European budget financed by regular flows, i.e. from European resources that give adequate credibility to this extraordinary measure of sustainable development.
The four instruments currently implemented at European level (the ESM credit lines with conditionality specifically limited to health expenditure decided by the Eurogroup, the ECB, the EIB and the SURE fund) are not sufficient because they will cover the needs of Europeans at short term and because, being based on loans, national debts will increase.
A reconstruction fund is needed to support common European policies for welfare, for sustainable development and for the energy transition, for the agro-food distribution and processing industry, for the planning of interventions for internal areas, for the activities of SMEs.
A medium-term European reconstruction plan within the MFF covering a five-year (and not seven-year) periodicity is needed to be consistent with the political and democratic cycle.
The new MFF must be based on a total amount of two trillion EUR to ensure the production of common goods for the benefit of European citizens on the basis of real own resources instead of Member States' contributions.
In this framework, the new MFF must create a guarantee for a European public debt, the configuration of which could be inspired by the European Financial Stabilization Mechanism (MFES) taking the name of "European Financial Fund for Reconstruction (FEFR)", capable of issuing hundreds of billions of common debt.
We ask the European Council of 23 April – acting if necessary by qualified majority – and the European Parliament to give a clear political mandate to the European Commission by asking it to propose a new MFF on 29 April which responds to the following principles:
– allow the EU to secure common goods for Europeans that cannot be secured by states each on their own
– increase revenue with fresh resources, essential for the new European political agenda after the coronavirus and which is consistent with the priorities related to the European Green Pact, employment and social rights policies, digital transformation, the production system and economic and social crisis that will result from the health emergency
– overcome the tax avoidance of multinational companies that embezzle hundreds of billions a year by exploiting the opportunities offered by the disharmony of national tax systems together with the recovery of confiscated assets through national laws against organized crime
– introduce taxes on profits on the web and on carbon production also through a border carbon adjustment.
We are convinced that, by doing so, Europeans will be able to overcome the COVID-19 crisis more efficiently and quickly, taking an important step in the process of European integration.
Berlin, Brussels, Den Haag, Lisbon, Madrid, Paris, Rome, Wien, Zagreb. 16th April 2020
