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France’s European project
Council of Ministers Communication – 6 May 2015
Address by Mr Manuel Valls, Prime Minister
President of the Republic,
Ladies and Gentlemen,
In three days’ time, on 9 May, all the countries of Europe will be celebrating the anniversary of the Schuman declaration which, 65 years ago, set the European adventure in motion. That beautiful project, born from the ashes of the Second World War, seemed obvious at the time.
Yet today, that is no longer the case. All too often, Europe is seen as distant and technocratic. Here and there, the peoples doubt. Dangerous populist policies, such as re-establishing national borders, leaving the euro and breaking free of the Common Agricultural Policy (CAP) are prospering, yet they would lead our countries to ruin.
The new European Commission seems to have understood the situation, standing as the “Last Chance Commission”.
Its role, our own and that of all Member States is to address the concerns and new issues that arise today, such as how to preserve the freedom of movement while toughening the security of our common space; how the eurozone can be deepened; and the role of Europe on the international stage.
In this context, it is in France’s interest to speak out.
That is what we have been doing since 2012, at the initiative of the President of the French Republic, to change Europe’s path. Where it was once question only of fiscal surveillance and discipline, we have brought the stakes of growth and investment back to the centre of the European agenda, we have put finance under supervision, and we have reshaped priorities.
We will continue our work in this direction, clearly reaffirming our ambition: that of a Europe that provides its citizens with protection and security; a Europe that also promotes its values and its cultural and social model;
and, of course, a Europe of investment, sustainable growth, and therefore of jobs. That is our top priority and I will start there.
1. A Europe of growth
We have already achieved change in this area. Europe’s macroeconomic policy has been deeply reoriented in the last ten months.
First, the European Central Bank (ECB) implemented a pro-recovery monetary policy. Last year, I highlighted the problem of the euro being too strong. Now, it has dropped 20% compared to the dollar, and interest rates have never been so low: the French government now borrows at 0.60% over 10 years.
Europe’s economic strategy is also now more balanced, thanks to the initiative of the European Commission. The Europe of growth that we are building is founded, as we requested, on three pillars:
The first pillar is stimulating investment. Since 2012, we have called for that to be a priority in Europe, and Jean-Claude Juncker has made it one of the symbols of his Presidency, thanks in particular to his stimulus plan of €315 billion. That plan now needs to be implemented as quickly as possible, and it should finance sectors that promise growth, such as the digital field and the technologies of the energy transition. Dozens of French projects have already been submitted to receive this funding, and a project was even signed in late April.
So Europe has begun shifting its priorities towards growth.
And it needs to go even further. The Minister of the Economy constantly promotes the idea that new common borrowings need to be issued to support European investments. We need to continue advocating this approach to our partners.
The second pillar is that of fiscal consolidation. Consolidating our public finances to maintain the quality of France’s reputation on the markets is vital. Without that, no sovereignty can be possible. We are therefore taking the necessary steps to bring our deficit below the 3% bar by 2017 – but without doing anything that could halt growth. I said that clearly to the Commission when I visited Brussels in March. The public forecasts released yesterday confirm the relevance of this strategy.
The third pillar is that of structural reforms. They are necessary to make the economy more competitive and agile. I have in mind the reduction in compulsory contributions on low salaries, the exceptional fiscal measure that just took effect to stimulate investment, and the cut in income tax. We have also rationalized our territorial organization and undertaken a major simplification campaign. Our agenda of reforms will, moreover, be updated this afternoon.
We have come so far, since my general policy speech a year ago! Back then, I questioned European policy, which seemed to me to boil down to a euro that was too strong and a fiscal discipline policy implemented brutally, with no consideration for the eurozone’s economic situation. On all these subjects, France’s voice has been heard and the situation has changed greatly.
We now need to consider a genuine coordination of our economic policies within the eurozone. This comprehensive vision is required to better encourage growth and jobs.
That is the meaning of the ongoing work into the deepening of the Economic and Monetary Union. In the coming weeks, we will be advocating to fully take into account the economic analysis of the eurozone as a whole, while we currently focus on the individual situation of each country. That concerns fiscal policy, but also structural policies and tax and social issues. Competitiveness policies also need to be coordinated to avoid a race to the bottom, with lower compulsory contributions and lower salaries, in which everyone would be a loser.
We also need to consider the creation of a European exchange rate policy, respecting, of course, the ECB’s independence. The eurozone must not become an adjustment area of the exchange rate policies of the other major monetary zones.
Lastly, we need to take action to ensure the convergence of the economic situations of all the Member States, whereas unemployment rates can today sometimes be five times higher in one country than in another.
All in all, five million young Europeans are currently unemployed. That is a failure that we cannot accept. That is why European initiatives aimed at enabling all people under 25 to find a training course or a job need to be deployed fully.
That is why we also need to continue expanding the Erasmus programme, which is one of the EU’s greatest successes but remains too elitist. We therefore support the idea of an enhanced European civic service, a vocational Erasmus that would allow the creation of a status of European apprentice, and a European student card, offering young people simplified access to certain rights and services such as libraries, housing and university catering. I have asked the Minister of State for European Affairs to steer these different projects, along with the Minister of National Education, the Minister of Youth and the Minister of Labour.
Ladies and gentlemen, Ministers, I am deeply convinced that stimulating growth, and therefore employment, is vital for citizens to believe in Europe once more.
And to bring back hope, Europe also needs to be at the forefront as regards the energy transition. We need to better take into account the fight against climate change in our development model. And Europe needs to speak in a single voice during the 2015 Paris Climate Conference: that is vital to achieve an ambitious global agreement. It is a unifying project and an engine for growth – and the planet is at stake.
2. A Europe of protection
We also need to build a Europe that protects and that guarantees everyone’s security.
The geostrategic context has been profoundly shaken in recent years, with the pressure of a bellicose Russia to the East of Europe, the destabilization of certain Arab countries and the rise of religious fundamentalism on the EU’s doorstep – and within it.
The terrorist threat is greater than ever, and Europe needs to stand united against it. That is why it is essential to create a European database of air transport passengers – known as a Passenger Name Record (PNR) – to enable the security services to better identify potential terrorists. It is also why we need to reform Schengen, to make systematic controls at external borders compulsory. Combating terrorists also means hitting their wallets and combating the smuggling of weapons, as well as working more closely with online operators. That is the roadmap France presented during the European Council meeting of 12 February this year, where it was adopted. A first assessment of its results will be carried out by the European Council in June. And we need to achieve results fast. That is necessary to ensure the survival of the Schengen agreements.
Next, we need to continue the creation of a Defence Europe. The connection between internal security and external security is now clear: when France takes action in the Sahel region, it combats the development of terrorism; in doing so, it serves all Europeans. France has always shouldered its responsibilities and continues to – but it cannot do so alone. Our partners also need to assume their responsibilities and we need the support of the EU.
That will be the subject of the European Council meeting in June. The aims are clear: we need to restore defence budgets in the EU, strengthen European military capabilities – including drones – and consolidate the European Defence Technological and Industrial Base. We also need to strengthen Europe’s ability to intervene in crisis theatres and ensure we have the means to act in support of our allies and partners, including in Africa. With that in mind, we are looking forward to the proposals that the High Representative will make this year to strengthen the EU’s security strategy.
Lastly, we need to come up with an ambitious migration policy. That is urgent! The number of migrants in the Mediterranean is growing constantly, and the European Union needs to make a strong response. The European Council meeting of 23 April provided the first elements, tripling the resources allocated to FRONTEX operations in the Mediterranean, toughening the fight against human traffickers, and opening the way for a potential Common Security and Defence Policy (CSDP) operation. That meeting also recalled that asylum must be given to those who are in danger in their country, but that a return policy needs to be organized for illegal migrants.
We need to go further by considering, there too, an overall European policy – but we aren’t there yet. That requires tackling the fundamental roots of migrations and effectively monitoring external borders, by considering greater resources for FRONTEX in the long term and its evolution towards becoming a true European border guards system. We also need to enhance the solidarity between the Member States by enabling the countries most concerned by immigration to shoulder their external border obligations and better sharing reception of refugees.
3. A Europe assuming its interests and values
Lastly, we need to build a Europe that assumes its interests and values.
Europe is not a mere market. It is also, and above all, a community of values. Notwithstanding their differences, the Europeans share most things: freedom, pluralism, tolerance, gender equality, role of culture, social norms, and human dignity. And indeed, Europe is the only place in the world to have totally abolished capital punishment; recent events have shown that this is not an issue of the past, but a combat we need to continue.
Europe was built on a foundation of values, which give it considerable strength. We need to continue drawing on those values.
Our creative industries, which represent 4% of our GDP, also need to make Europe a cultural power with global reach. That is why it is fundamental to protect copyright, establish suitable taxation and regulate digital platforms.
More generally, trade negotiations need to be conducted with a spirit of openness, reciprocity and playing by the rules. Europe, which is often seen by its citizens as disarming in the face of the rest of the world, needs on the contrary to assume its offensive interests. I particularly have in mind our policy of open public procurement and the negotiations for the Transatlantic Trade and Investment Partnership (TTIP). We need to continue defending our social, health and environmental standards, our food model, and our cultural exception.
And, to be credible on the international stage, Europe needs first and foremost to ensure its values are respected at home. The internal market and the rules of free movement of labour need to meet the principles of fair competition. That involves combating all forms of social and tax dumping – unfair practices that endanger businesses and undermine employee security.
In the social sector, we therefore need to continue regulating posted workers and extending the responsibility of contractors to all economic sectors. We also, as the President of the French Republic said, need to work on creating a minimum wage within the EU, or at least within the eurozone, of course taking into account differences in the cost of living. To begin with, we need to work with Germany, before bringing in the other countries.
In the tax sector, it is essential to combat all abusive forms of tax optimization and against non-transparent tax practices. That is what is behind the request that the Minister of Finance, along with his German and Italian colleagues, brought to the Commission. We need to ensure compliance with a simple principle: businesses should be taxed in Europe where they make their profits. We look forward to receiving the proposals the Commission should make soon.
Ladies and gentlemen,
I would like to finish by mentioning our method: none of the aims I have discussed here can be achieved unless Europe is run differently. That is a demand from our fellow citizens who find Europe too complicated, and not sufficiently clear. I have in mind our farmers, who are currently concerned about the implementation of the Common Agricultural Policy (CAP), as well as our researchers and our regions. Simplification has to become our priority. The President of the Republic emphasized this point following the 2014 European elections.
Running Europe differently is a matter for everyone, including both the European institutions and the Member States. That responsibility is incumbent upon every one of us. We need to change our approach to Europe, discussing it more, communicating about its achievements for our citizens, and advocating our ideas throughout the European Union.
With the agreement of the President of the Republic, I therefore ask every member of the Government to participate systematically in all EU Council meetings, to ensure a more consistent presence at the European Parliament – I myself will soon be making my first visit as Prime Minister – and to visit European countries more regularly. We also need a greater presence in the foreign media.
At national level, we can consider involving our Parliament more closely in European decision-making processes, or making more regular updates at the Council of Ministers concerning the main ongoing negotiations, for example.
That was the aim of today’s Communication: opening the way for reflection.
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