Time to talk politics, time to talk tax.
The current economic meltdown should give a new momentum to the fading dream of a Social Europe. Growing demand for state protection and the obvious need to coordinate national responses to the crisis should bring grist to the mill of the proponents of a genuineSocial Europe, if the EU and EMU are to survive the current crisis. This should be sweet music to the ears of the French Left, who have long believed that the only way to achieve a truly Social Europe was through a more political Europe. At the launch of the euro, Prime Minister Lionel Jospin had hoped that the single currency could protect and promote the European Social Model by making iteasier to “regulate global capitalism…through common European action, in a Europe fired by social-democratic ideals”.
Many however expressed doubts about European countries’ willingness or ability to impose a common political will on the markets, as Social and Labour legislation as well as taxation remain under control of national states, in the name of the subsidiarity principle. It remainedto be seen whether in these fields “European Governments could choose to cooperate rather than compete with a view to agreeing on a social model worth defending”. It is quite clear now that political and economic events put paid to that ambition. The fall from grace of most European social-democratic governments and their replacement by liberal or social-liberal administrations, in combinationwith EU enlargement, changed the socio-economic aim of the European Union.
Led by Tony Blair, most EU governments were no longer concerned with shaping globalisation, but with adapting their national Social models to its relentless force. Their business-driven agenda sought to “modernise” national social welfare systems through a mixture of competition, bench-marking, peer pressure andguidelines set by the right of centre Commission under the umbrella of the Lisbon Agenda. This meant that, in order to compete with the likes of China and India, workers were told that Europe could no longer afford the luxury of strong labour legislation and good welfare benefits and that governments had to cut welfare spending and taxation and ease worker protection and business regulation.
This raceto the bottom, promoting tax and social dumping, explains why citizens began to lose confidence in the European integration process and why the French, as well as the Dutch rejected the European Constitution. All surveys show that the French are the most anti-globalisation and anti-capitalists people in the OECD and that they are deeply attached to the values of equality, solidarity, communityand social cohesion. It is therefore not surprising that a clear majority of French socialist sympathizers felt strongly that “the old social democratic or Christian-democratic vision of Europe was giving way to the British-led vision, espoused by new members and backed by a technocratic and dogmatic neo-liberal Commission. They rejected a Europe intent on promoting “pure and perfect competition”as the linchpin of economy and society, which distrusts anything that is public (contrary to French tradition) and praises private business”. The Bolkenstein directive, proposing that workers could work anywhere in Europe under the conditions of a firm’s national tax and social legislation had further convinced them that, far from attempting to protect its workers from the downside of financialglobalisation, the EU, which took pride in having the most stringent competition policy and on being the most open economic bloc in the world, had swallowed the neo-liberal agenda hook, line and sinker and.
Never one to ignore the Zeitgeist, Nicolas Sarkozy often condemned in his campaign a Europe “which frightens rather than reassures”. That is why, when helping to negotiate the new treaty,...