Also available in the following languages:
Despite the crisis, the world of European finance has vast wealth at its disposal. What would be more natural than to impose a tax on it, in order to free up resources for economic recovery and to face the challenges of the future?
Is it possible to imagine a happier time than spring of 2015? Everywhere one looks, the economic world has good news to share. The United States and the United Kingdom, traditionally ahead of the curve she it comes to recovery, are returning to form with full employment. The eurozone is basking in the euphoria of the quantitative easing of the European Central Bank (ECB) and of low interest rates. Stock-exchange valuations are soaring on all the markets. Europe’s top 300 capitalisations (Eurofirst 300) are going to deliver nearly €200bn in dividends this year.
In this wash of cash and easy money, revisions of economic growth rates are on the rise, in almost all regions, including the eurozone and France (+1.3 per cent and +0.9 per cent, respectively). Chinese and US capital have begun to flow into the European Union: buyouts are accelerating the pace of mergers and acquisitions in the global market. It would be crazy not to rejoice and make the most of such a wonderful economic situation.
But it appears as a mirage, hovering above the real world. Consider Greece, first of all. One would have to pinch oneself to believe that in a time of such abundance, economic powers from Washington to Berlin and Brussels are ready to let this country of 11 million inhabitants, next to Turkey and close to the sphere influence of Russia, fall into bankruptcy or leave the euro, which would amount to the same thing.
Such is the reality today: for European banks, the risk represented by Greece — valued at €42bn — is now manageable, thanks namely to the manoeuvres of the ECB. This was not the case in 2008, when €175bn were exposed to risk. Can the ardour of European political union be reduced to its banks’ exposure to a risk country?
Greece’s own responsibility for its current problems can certainly not be ignored, as the country has suffered from the corruption and amateurism of much of its elite and administration, a nationalist and socialist political culture, an economic logic favouring unearned income, an overprotective welfare state and a stifling of individual initiative, risk-taking and growth.
“An example has to be made of Greece, obliging it to pay its debts. If not, all countries of the South will ask for a haircut.” This is what can be heard around Brussels today: from abroad, the desire to humiliate a people that was under foreign rule from the 15th to 19th centuries and that passed most of the 20th century at war or under dictatorship, and not to have it any other way.
In the modern economic history of the West, has there ever been a gap as wide as that between the current short-term economic and financial euphoria and the deep deterioration of social and political equilibrium? And a situation in which more people were affected than in today’s Europe and its periphery?
It will take more than a few quarters of 1.5 per cent growth of exogenous factors (ECB, oil) to help the 18 million jobless in the eurozone, particularly those under 25 years of age. The situation demands an iron political will, an ambitious and coordinated effort between member states, to launch a massive investment program aimed at improving dilapidated infrastructure in the European Union – in particular the German infrastructure – as well as its defence capabilities.
The existential challenges European societies face from within and on their immediate periphery are becoming clearer every day: the movement of Russian tanks in Ukraine, the destabilisation of a growing number of countries in Eastern Europe and North Africa, the reinforcement of the Italian coast guard in response to clear threats from the Islamic State, and the holocaust of the Christians in the Middle East, from Libya to Iraq.
Faced with such challenges, has the reality of the European response been adequately measured? That is to say, the humiliation of one of its members and the accumulation of wealth that has barely been distributed on the continent? “No taxation without representation”: if we reverse the slogan of the American Revolution in the mid-18th century, it can serve as inspiration for a necessary European revolution today. What good are the European Parliament and the bloated policies of the European institutions if we are unable to establish a European tax in order to share a minimum of resources to face these existential challenges?
There can be no European political union without fiscal union. In this time of financial abundance and European fragmentation, the moment has come to plan and implement a direct and effective tax that does not add to but replace some of the existing national deductions. It would provide jobs and give a vision for future generations; maintain unity, including with Greece; protect our common identity and values, which are not those of Islamism; and be able to respond to the challenges at our borders, by military means if necessary.
Believing that the return to economic growth and the “invisible hand” of the market are in themselves the only solutions reveals a confusing naivety.
Translated from the French by Mike Woods