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THE STATE OF THE EUROPEAN UNION
46
out of sovereign debt established in the Treaties
and the legal systems of certain member states
– instead of weaving the ESM into the Union’s
institutional fabric, it was created by means of
an intergovernmental treaty. This state of affairs
notwithstanding, the Five President’s Report
suggests that it continues to be a prime candi-
date for conversion into a treasury accountable
at the European level at some future point.
Unsurprisingly, proposals to reform the ECB’s
mandate and make the ESM a European treas-
ury or monetary fund with the capacity to issue
eurobonds have been part of the agendas of
European progressives and Europeanists for
many years.
At the end of the day, Europe needs a com-
mon economic policy that takes the euro into
account and resolves the economic asymmetries
aggravated by the crisis, which would not have
occurred had the right community instruments
been in place. A community budget for Europe-
an-wide policies conceived to stimulate demand
and productivity through investment and im-
prove and expand educational and R&D pro-
grammes where needed would have made a big
difference, not to mention a budget for the eu-
rozone, and a mechanism for managing major
investment in growth and competitiveness and
financing countercyclical policies. Looking for-
ward, public debt must be mutualised and guar-
anteed collectively.
Employment policy challenges in Europe
Beyond fostering growth, employment policy
could also contribute towards a fuller realisation
of monetary union. European-level support for
training and reinsertion should be provided as a
complement to unemployment benefits per-
ceived in the countries worse hit by the crisis.
Additional support on the part of the Euro-
pean Social Fund (ESF) for long-term employed
and unemployed workers over the age of 55
must be a priority. Fund expenditure, which cur-
rently represents a mere 0.07 % of European
GDP, is insignificant compared to that of other
compensation mechanisms.
The EU must do more to improve the quality
of employment in Europe, reverse the trend of
growing employment instability, reduce the
numbers of the European working poor and
guarantee that all European workers have an
opportunity to earn a decent living. This will en-
tail formulating a minimum interprofessional
wage index that takes into account each mem-
ber state’s relative level of development, cost of
living and median wage.
Towards a real tax union: the fight against
tax avoidance
The euro crisis has exposed the underlying
weaknesses in the manner in which the EMU
was constructed, one was which was the deci-
sion to create a monetary zone without the
benefit of full fiscal union. Under the Treaties on
which the EU is based, member states are al-
most completely free to structure their tax re-
gimes as they see fit. The intensification of the
movement of capital, goods and people within
the EU subsequent to the creation of a single
market coupled with a lack of coordination on
tax policy has provoked major imbalances.
Economic governance initiatives undertaken
in the wake of the crisis have however focused
almost exclusively on expenditure control at the
national level, and tax union
4
has been left sim-
4
The EU’s principal expenditure control measures are the
Two-Pack, Six-Pack and the Fiscal Compact.