Who could have imagined, just three years ago, that some of our partners, like Germany, would establish a minimum wage?
Who could have imagined, just three years ago, that we would have abolished banking secrecy in Europe and that we would be faced with a flood of calls for regulation in such a short space of time?
Who could have imagined that we would have reached an agreement to combat unfair competition on social protection?
If there's anything to be learned from recent years, it is that, in fact, and contrary to what is bandied about, Europe is moving ahead much faster than we think.
Six years of economic crisis has turned things around, often in irreversible ways, and we can expect even more progress in the coming months. Let me give three examples.
First and foremost, stronger leadership of the Eurozone. In areas where, only recently, we seemed to be operating on a different plane, the discussions taking place over the past months have shown that European leaders are adopting a new approach, one that takes greater account of growth and employment concerns. France has been a strong advocate of this development, which needs to be taken further.
Europe can no longer be content with a separate, country by country approach to reviewing the application of its fiscal rules. What is needed is in fact a regular and comprehensive analysis of the Eurozone's economic strategy that takes into account all the public policy instruments at our disposal (exchange rate, fiscal, and tax policies). Simply put, what we need is to move towards a more collective and strategic vision for managing economic and monetary union.
A second example is the struggle against unfair competition between Member States. Here again, there are elements that are no longer acceptable. The crisis has demonstrated that Europe can come together in the face of a common challenge. After so many efforts to save the euro, can we accept unbridled competition between partners within the same economic and social ecosystem, particularly when it is most often for the benefit of multinational corporations rather than people? Of course not!
It is no longer acceptable for some to take advantage of our differences and benefit from freedoms ensured by treaties in order to sidestep efforts that our businesses and our citizens have agreed to shoulder.
My German and Italian counterparts and I have written to the European Commission, calling for a joint effort with respect to transparency and the fight against aggressive tax planning. As a result, proposals are now on the table.
This is true for transparency in the automatic exchange of advance cross-border tax rulings. A directive on the topic has been drafted and I sincerely hope that it will be quickly voted into law.
It is also the case with the fight against aggressive tax planning. We believe that profits should be taxed at least once - regardless of where in Europe - but at least once, and effectively. Let's be clear: although corporate tax rates are acceptable, effective taxation of 1, 2 or even 5% is not, in my view, effective taxation.
In the 1990s, Europe adopted directives to eliminate double taxation. We now have the criteria to determine which Member State has the right to levy taxes. But it might be that the State in question does not want to impose a tax or reach a settlement. It has the right to do so, but in these sorts of cases, European law forbids another Member State from recovering the right to do so.
Our last example involves the financial sector.
Since 2012, we have made major progress with the Banking Union, which has just come into force. Too little has been done to highlight what a big step this represents. Thanks to the Banking Union, we have severed the previous link between bank risk and sovereigns; we have made it possible for that risk to be assumed going forward by the banks themselves. The days when losses and the threat of bank failures almost automatically triggered calls for government rescue are over. All that, you could say, belongs to a bygone area.
But in the future, financing for the real economy as well will come to a large extent from the capital markets. The once exclusive role played by banks is on the way out. This is a major change, particularly for the Eurozone. For the ECB's monetary policy to be effective, the banking system must work smoothly, and we have done what was needed with the Banking Union. But the capital markets must also work smoothly.
To make sure that businesses can raise capital in those markets with the utmost security and transparency, we have to learn from the mistakes of the past. Slipping back into the US financial sector's bad habits prior to 2008 is simply out of the question. Europe needs stricter rules, and therefore uniform supervisory mechanisms to ensure that they are followed. That is the only way to avoid having financial centres get caught up in a race to the bottom through differential application of EU rules.
Eventually, the laws themselves will have to be harmonised in a number of areas. (For example, we could make changes to the laws on bankruptcy or on financial information for citizens with savings. How can a German fund that collects the savings of German households invest in Spanish SMEs in need of funding if it has no assurance as to how sound those companies are or how it will be treated as an investor?) In some areas, we will need a single supervisory authority of the kind we have established for banks.
On all these counts, we have made what is by now irreversible progress. We have pushed back a number of boundaries, and we expect our efforts to pay off in short order. These short-term advances obviously do not detract from our long-term goals, which are integration, harmonisation and solidarity. In fact, they bring us closer to achieving them. The challenge in the months and years ahead is therefore to step up our efforts, to expand their scope and to make sure that we take advantage of this unique opportunity to give fresh impetus to Europe. That, in a word, is France's role, and it is on that front that our acts are awaited.
Michel Sapin is France's Minister of Finance
This piece was originally published on the Huffington Post France (Le HuffPost) and was translated into EnglishSuggest a correction