French President Emmanuel Macron has laid out his vision for reform of the European Union and the Eurozone. In his speech, he called for Europe to strengthen its efforts in the fields of defence policy, common border management and development aid. Furthermore, Macron emphasised the need to harmonise tax and social policies and to shift competencies to the EU in these fields. As expected, he proposed once again to introduce a common budget for the Eurozone and a European finance minister. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, comments on Macron's speech.

“Macron is setting the right priorities for the EU budget. It is clear that defence policy, development aid, asylum policyand digitalisation are common European tasks, for which the EU budget has so far been lacking resources. In this regard, it is likely for French policy-makers and the new German government to quickly find common ground.

Macron’s plan to finance these tasks through common European taxes is, however, less convincing. It is unlikely that the European financial transaction tax proposed by Macron will provide the financial resources needed to implement these reforms. His plans to harmonize corporate tax rates across Europe do not have any prospect of success either. Macron also remained too vague in his statements concerning much-needed reform of the Common Agricultural Policy, a topic German policy-makers should go further into since cuts in agricultural subsidies could in fact mobilise considerable financial resources for the really important European tasks.

Overall, Macron’s speech on the future of Europe provides a solid basis for constructive reform debates with partners in Germany and other countries. And since he has remained rather vague with regard to his visions of a ‘European finance minister’ or a ‘joint Eurozone budget’, there is still plenty of room for negotiations in the future.”

For further information please contact

Prof. Dr. Friedrich Heinemann, Phone +49 (0)621/1235-149, E-mail friedrich.heinemann@zew.de

Date

26.09.2017

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