THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war

Introduction 9 And the same is true with respect to the Social Europe that is so desirable. In reports of past years produced by the Friedrich Ebert Foundation (FES) and Fundación Alternativas, we have insisted on arguing for the need for a European minimum salary, decent European pensions and a European health system to effectively address issues such as ageing populations or chronic illnesses. Indeed, this has been one of the defining features of these institutions’ reports on the State of the European Union. And now we can see a route to a Social Europe: a Europe whose necessity was already apparent and which has been further highlighted by the war; a Europe which we must make a reality once the war is over. The social policy directive proposed by the Commission for approval by the Council and the European Parliament does not attempt to unify minimum wages. That would be impossible. But it does propose a range in proportion to the average salaries in each country. This represents clear progress towards a social pillar within the EU, something which is not covered in the Treaties, which leave this issue in the hands of Member States. And it is vital that we continue to insist on a Europe that protects the well-being of its citizens. This is something we do once again in this Report. Migration and asylum policy must also form part of a Social Europe.A migration and asylum pact has been a key demand for decades, but one that has been impossible to achieve because the treaties require unanimity to adopt decisions at EU level. The emi- gration of hundreds of thousands of Ukrainian families, who have been accommodated without limits in every country of the EU, has broken the barrier to immigration erected by some Member States. It is time to move towards a genuine migration and asylum pact on a continent that needs immigration to sustain its welfare states. It is not enough to attract immigrants.We have to ensure that they remain in the EU. This is a structural phenomenon.The International Organization for Migration estimates that there are 272 million migrants in the world (3.5% of the global population). Of them, 41.3 million are refugees (figures from prior to the Ukraine war). We need to es- tablish inclusive legislation. Because the levels of immigration in Europe are falling, and this is a serious threat given the population declines in countries such as Italy and Spain. Alongside migration and asylum, the other major initiative – mentioned by Chancel- lor Olaf Scholz in his recent speech in Prague – is fiscal reform. Any ambitious policy on investment, social support, intervention in the gas market, industrialization, or defence and security, can only be funded through taxes. But this is another sphere in which a unanimous vote is required in the Council of the European Union. In light of the war and its impact, nothing less is to be expected. And there should now be a consensus in the EU regarding windfall taxes on energy companies and a minimum corporation tax rate of 15%. However, none of the above is likely to be possible without the most difficult – and most necessary – EU reform of all. This, of course, is institutional reform: specifically, treaty reform to legally enable all the political reforms that are covered in the chapters of this Report on the State of the European Union.