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Friday 20 October 2017

Pierre Moscovici: “We must achieve a compromise between European cultures – and it won’t be easy”

The association Tribunes, partner of the International and European Institute, had the pleasure of welcoming Pierre Moscovici, European Commissioner for Economic and Financial Affairs. During the debate, he spoke about two challenges facing Europe in the 21st century: the compromise between cultures and fiscal harmonisation. 

Who is Pierre Moscovici? Son of a father born in Romania and a mother of Polish origin, he is European both by birth and by conviction: appointed national secretary of the French Socialist Party at 33 in 1990, he became an MEP in 1994, then Minister for Economic Affairs and Finance under Lionel Jospin before being appointed European Commissioner for Economic and Financial Affairs in November 2014, thus crowning his longstanding commitment to Europe.

“We must achieve a compromise between European cultures”

After the fall of the Soviet Union, opening the “European House” to the former eastern bloc seemed essential, if not obvious, explained Moscovici. 

Today, faced with the many differences dividing east and west, north and south, European identity remains a major issue: “We have got bigger without managing to create a common story or a common culture.” Despite economic and political union, “the cultural factors specific to the European nation-states continue to hinder integration and cohesion”, said Moscovici. These contradictions are behind many of the anti-European movements that have emerged in several of the countries that make up the continent, a phenomenon that Moscovici judges to be “extremely worrying”. 

According to Moscovici, achieving a compromise is a genuine challenge for the future of the EU, because each nation-state has its own characteristics: for example, there is the traditional opposition between extravagant, expansive France and disciplined Germany, in favour of budgetary austerity. A middle ground is possible between these two extremes: “France must show itself to be more serious from the budgetary point of view, without falling into the austerity trap”, said Moscovici.

In addition to this cultural aspect, the decision-making process in the Eurozone suffers from a lack of democracy: “Decisions taken in an undemocratic way are often suboptimal”, because they lack legitimacy. “To deal with this problem”, suggested the European Commissioner, “a more representative executive body should be set up, which could take the form of a Eurozone Finance Ministry, overseen by the European Parliament”. 

In Moscovici’s opinion, the current context provides an unprecedented opportunity to open up the debate on the future of Europe: “Now is the time to revitalise Europe”. 

Creating a 21st-century tax system

In July 2017, the Google Group won its case against France, which had accused it of illegal tax avoidance. When asked his opinion, Pierre Moscovici said that he considers that tax privileges given to big companies are “unacceptable”, while admitting that the question is a real headache for public decision-makers: “The challenge for today’s tax system is to adapt to a new type of virtual, decentralised economy”. It is important to have a unified response to this challenge: in October 2016, the European Commission proposed to set up the CCCTB (Common Consolidated Corporate Tax Base), a harmonised fiscal framework for all European Union companies whose objective is to fight tax evasion. But this might not be the final solution, because the European Commission is continuing to explore all the avenues that would enable it to establish a modern, equitable corporate tax system.

It should, however, be noted that over the last three years, the Commission has made considerable progress in the fight against tax fraud and evasion. In particular it has reached agreements with a number of countries outside the European Union (Switzerland, Liechtenstein, Monaco, Andorra) over the automatic exchange of information about bank accounts. “In practice, this means that bank confidentiality no longer exists”, explained Moscovici. The Commission has also had two directives adopted to fight against tax fraud and evasion, and is in the process of drawing up the European Union’s first blacklist of tax havens. Finally, if it is adopted, another directive could serve to lift the veil of secrecy over the activities of intermediaries (banks, legal advisers, etc.).

But might this diligent quest for transparency not threaten the competitiveness of European companies? “Companies have nothing to fear from this legislation”, Moscovici reassured his audience. “There is no contradiction between competitiveness and transparency”. 

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