Reforming this directive is a fight for justice and social convergence in Europe. In this respect, I applaud JeanClaude Juncker’s proposal to create a European Labour Authority to ensure that rules are enforced. Such an authority is necessary, but we must go further and establish genuine tax and social convergence.
To do this, I have two concrete proposals. The first is corporate taxation. Efforts are already under way, but we must work faster to harmonize the tax base. And France and Germany should be able to finalize plans within the next four years. We have the opportunity of a clear mandate — let’s move forward with this. However, it goes deeper than this: we cannot have such disparate corporation tax rates in the European Union. This tax divergence fuels discord, destroys our own models and weakens all of Europe.
This is why I would like to see a binding rate range that member states must commit to ahead of the next European budget in 2020. Compliance with this corridor would determine access to the European Cohesion Fund, because members cannot enjoy European solidarity and play against the others at the same time. I commend the European Commission’s recent initiatives in this regard and, through the efforts of Margrethe Vestager and Pierre Moscovici, its push for certain players and countries to make changes. We must go further: we cannot have lower corporation taxes financed by our structural funds. Doing so is to take Europe backwards, to encourage division.
My second proposal is to develop true social convergence and gradually bring our social models closer together. Doing so is entirely compatible with our global competitiveness. I don’t see any contradiction between these ambitions. Because we must see the world as it is. A few years ago, some people would say “you know, a panEuropean ambition is a bad idea; competitiveness is our priority.” Those who tried lost their people’s trust. What did the British people say ahead of the Brexit vote? The British middle class said “your competitiveness is all good and well, but it is not for me. The attractiveness of London’s financial centre is not for me.” When you listen closely, what were the American people really saying? “This open America, this competitiveness that you have sold us, isn’t made for us, the middle classes.” Isolationism is gaining ground, wherever democracies have taken this no-holds-barred approach to competition as far as it can go.
So in Europe, we need a revamped social model: not one stuck in the twentieth century, and not that of a catchup economy. We need to set out the terms at European level, as this is the right scale for this battle. I would like to begin talks as early as November to define the common minimum European social standards, and to build that floor I would also like to build rules for convergence. We should establish a minimum wage that takes into account the economic realities of each country, while gradually moving towards convergence.
Our social contributions are too disparate today, and when workers are posted to other countries, the main source of inequality among inequality today is these contributions. This is why, above and beyond the reforms on posted workers I would like to see by the end of the year, I propose that the higher rate of social contributions should be paid, but to the home country. This money would go into a solidarity fund for the less wealthy countries to support their convergence.
