Investing in the Future of Europe

Speech by the Ambassador of France to Ireland Stéphane Crouzat

European Movement Ireland

Dublin, 30th November 2017

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Do you know what these three pictures have in common? They represent three emblematic infrastructural projects in France. And in all of these three projects, EIB funding has been, or will be, associated.

On many aspects, Europe’s actions remain too little known to the public. And yet, the EIB provides, as you can see, a concrete example of what the EU is doing for its member states in terms of tangible and useful action.

The “Juncker Plan” has allowed the EIB to support more, and in a better way, public and private investments across Europe. Since its inception, a hundred operations have been approved in France, representing around 7.5 billion € of EIB funding. Thanks to the leverage effect, this has made 35 billion € of funding available across the French territory.

A wide range of sectors have benefitted from the “Juncker Plan” and more broadly from the EIB. We can cite, for example, the deployment of renewable energies, energy efficiency in the French housing stock, social housing, innovation in pharmaceutical and automobile sectors, steel industry, dairy sector, aeronautics, Fintech, sustainable transports, deployment of high speed broadband in rural areas or development of SMEs in Nord-Pas-de-Calais and la Réunion.

More broadly, France is delighted that the Juncker Plan has allowed to diversify the beneficiaries of EIB funding –as around 2/3 of clients benefiting from the Juncker Plan are new clients. It has also led the EIB to reduce its average funding by a third (to 90 Million € down from 130 Million € for its traditional activities), to diversify the type of financing products it offers and to increase the EIB’s risk-taking.

I am glad that French and European actors have seized this opportunity so well. The upcoming expansion of the Juncker Plan –from a target of 315 billion € in investment generated across the EU by mid-2018 to 500 billion € by 2020– is therefore excellent news.

Throughout the years, the EIB has played a central role in building up a competitive Europe, integrating new Member States and embodying the European financial assistance to third countries. Increasing the resources of the EU – and of the EIB– is a very important objective, but it will not be enough to address the huge challenges that the EU is now facing. Above all, we need a new vision for Europe.

The future of EU

President Macron has put a new European ambition high on his agenda. He expressed it with vigour, first in Athens, then in his speech at the Sorbonne on 26 September. He affirmed two convictions that have guided his actions since the beginning of his presidency.

In an unstable world, only Europe will allow us to exercise our sovereignty and be fully in control of our destiny. Sharing our sovereignty is in fact enhancing our sovereignty.

The European project can only succeed if we bridge the gap that has grown over the years between peoples and European institutions.
I would like to highlight six areas from President Macron’s speech.

Defense

We need to create a Europe which better protects its citizens. In a rapidly-changing world, the widespread perception of insecurity from our fellow citizens has to be addressed. And it has to be addressed by the EU itself. France therefore supports the creation of an autonomous defense capacity in Europe. As peace is a common value of the Member States, it does not make sense anymore to have 27 uncoordinated defense policies. It is a waste of resources. In this respect, France welcomes the first step taken a few weeks ago with the setup of PESCO, along with 22 other member states, and we encourage the remaining member states to join us. It is also our view that the EIB can play an important role in building up an integrated European defense system.

Migrations

A Europe which protects is also a Europe which protects its borders and values. In this regard, the migration crisis is probably the biggest challenge Europe has faced in recent times. We cannot be spectators of a humanitarian crisis. We need to create common asylum and migration policies; we need to create a European Asylum Office that will speed up and harmonize our procedures; we need to establish interconnected databases and secure biometric identification documents; we need to gradually establish a European border police force that ensures rigorous management of borders; and we need to finance a large-scale European programme to train and integrate refugees.

Foreign policy

A Europe looking to Africa and the Mediterranean. We are very satisfied that the Taoiseach and minister Coveney have emphasized the need for Europe to engage more in Africa. Official development aid needs to be increased (France has committed to increase it to 0,55% of GDP by 2022). We propose to relaunch the project for a new European tax on financial transactions to finance this policy: all its receipts would go to official development aid.

Sustainable development

Europe has also to address the most pressing global transformation, the ecological transition, which is revolutionizing the way we produce, redistribute and behave. And we face a simple choice: do we want to continue producing as we did in the past in an attempt to preserve our short-term competitiveness? Or do we embrace the only reasonable longer-term view, become the frontrunners of a sustainable production model and set the global standards for tomorrow?

France has made its choice: we deeply believe that Europe must be a pioneer of an effective and equitable ecological transition. We need to foster investment in transport, housing, industry, agriculture to prepare this transition. In this regard, setting an efficient minimum price for carbon within the EU and implementing a carbon tax at the borders are essential to ensure a level playing field between the European producers and their competitors.

Further economic integration

Europe must also draw lessons from the financial crisis. It has made clear that the architecture of the Eurozone was incomplete. The recovery could lead some to wonder if it really is the right moment to invest political capital in the completion of the Monetary Union. We think that waiting is something we cannot afford. We cannot wait for a new downturn. We need to act now.

We need to make the Eurozone the heart of Europe’s global economic power. This requires national reforms, but not only. The Banking Union is already a reality thanks to the Single Supervisory Mechanism and the Single Resolution Fund. We must now implement a European Deposit Insurance Scheme. In parallel, we must initiate the indispensable complement to the Banking Union, the Capital Market Union. We need a Eurozone budget, allowing to fund common investments and to ensure stabilisation in the event of economic shocks. France believes that such a budget should be placed under the strong political guidance of a common minister and be subject to strict parliamentary control at the European level.

Digital economy

The world is changing toward an increasing digitalization. Europe cannot be a passive actor of this transformation, it needs to embrace it, to lead it. We need to create “European digital champions” and Europe needs to become an area of innovation. Along with Ireland, France is convinced that the integration of the digital single market is a unique opportunity and should be a priority.

But opening and integrating markets is not enough. The “euro-crisis” showed us the risks and weaknesses of an incomplete integration: we cannot repeat the same mistake twice. Digital economy is a total game changer, reshaping the traditional functioning of our economic models far beyond the mere digital sector. Therefore, the integration of the digital market must be accompanied with appropriate regulations. We need to make sure individual freedoms and confidentiality are protected, as well as our companies’ data. And we need to make sure we create an appropriate tax system which fits this new market.

Taxation is a debate we must have, we cannot put it aside, and it cannot be a taboo. France firmly supports the project of a Consolidated Common Corporate Tax Base (CCCTB). France has also proposed, along with Germany, Italy and Spain, that an equalization tax be set up on a temporary basis, to ensure fair tax contribution from tech multinationals. The EU is due to adopt new conclusions on this matter at the next European Council, in December.

How do we go about implementing all this? We need to invest in further democratizing Europe.

In order to strengthen the European Parliament, we propose using the quota of seats of departing British MEPs, to create transnational lists which would allow Europeans to vote for a coherent, common project. We strongly welcome the warm support we already received from the Irish government on this proposal.

Europe’s overhaul cannot be achieved away from the people. We need, and cannot be afraid of, a debate on that question. We have been very inspired by the Irish experience on citizen dialogue about the future of Europe, and we propose to launch democratic conventions in 2018, whereby national and local debates will be organized in all EU countries that volunteer, on the basis of common questions.

We are not naïve. We know it will not be reached easily and that many compromises will need to be found. Investing in such a project will require a lot of time, a lot of energy and a lot of ambition. But France is convinced that the return on that investment will be far greater than the original bet, and we count on Ireland to be part of this lively debate.

Thank you./.

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Published on 30/11/2017

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