Henri Malosse, President of the EESC: For me the bureaucracy is the main obstacle to the use of the EU funds
Close-up: Henri Malosse is President of the European Economic and Social Committee since 18 April 2013. He became a French member of the EESC in 1995 and in 2006 was elected as President of the Employers’ Group, also having been Co-president of the EU-Bulgaria Joint Consultative Committee. He is the author of over fifty reports, including a highly critical analysis of the Bolkestein Directive. Mr. Malosse graduated from IEP, International Relations Section in Paris in 1976. He has Bachelor DEA of Eastern and Central European studies and diplomas from the Universities of Munich and Warsaw. He speaks German, English, Polish and Russian.
- Mr. Malosse, you recently said that there is one year to make sure that 25 May 2014 does not mark the final divorce between Europeans and Europe. What is the possible way to avoid this scenario?
- The way according to me is that the European Union changes its priority and puts very concrete question concerning the European citizens as top priority and not the question on the level of the euro or the reactions of the financial markets. We hope that the European Council at the end of June will adopt an agenda for growth, jobs and investments for Europe. We show concern about three very concrete questions – how to restart the growth in Europe, how to restart the investments, how to create more jobs mainly for the young people. If we begin soon very concrete action there could be a hope that on 25 May 2014, when the European elections will be held, the European citizens could understand that the EU is the solution and not the problem. But today we think that it is the problem.
- How in your view can the European construction be re-launched?
- It could be done by concrete actions and by putting citizens in the driver’s seat. I think the European citizens do not need a strategy for 2020. When you are jobless, you are not interested to know that in 7 years you could get maybe a better situation, you do not want to wait and want to have a job now. I always remind the ideas of one of the founding fathers of the European Union – Jean Monnet, to build upon concrete action. People need concrete steps. The EESC is now working on very concrete projects, for example, one concerning unemployment among the young people. I do not think that the Youth guarantee is enough. It’s just a political slogan. We need to focus, in the next financial framework programme, on the young people and help them to get a job or an apprenticeship in a company. Today the main concern is access to first jobs. We should focus all social funds and not distribute to municipalities to please one or another but concentrate the funds for youth employment. In Europe we have more than 20 million companies and we have 6 million young people without a job. Theoretically, if one third of these companies hire one apprentice it will solve the problem of youth unemployment. I think if the entrepreneurs get some very concrete signals from the EU, from their national governments – concerning tax reduction, flat tax rate, less bureaucracy, support to hire young people as apprentice, trainee or as new employee, they will do that. In July, we will propose to the European Commission very concrete actions for youth employment. The EESC will propose the move toward minimum income in all European countries. Another proposal that we will put on the table is on entrepreneurship: to decrease the taxation on companies – mainly on SMEs – and to support their access to finance. The next proposal will be on using the European funds to improve the quality of life. We would like to see the EU funds used in two main aspects – youth unemployment and rural areas. For example, in Bulgaria you have a dramatic situation. Apart from Sofia, Varna, Plovdiv, Burgas, it is a desert. We want to focus on these few items. It will take time, but we need to start. We will urge the Commission to meet with the social partners at the European level as we have one year to start giving positive signals that we think about the citizens, not to just make theoretical strategies and macroeconomic balances. It is time to act and to see the results. In the US two years ago, which was approximately in the same situation as in Europe, they gave more impulses in some areas, they developed some programmes for SMEs, they gave tax incentives for job creation; and that is what we should do at the European and national level.
- Can Europe accomplish its ambitions till the end of the decade with a reduced budget?
- First of all, we have no choice. I am very critical to the Commission and I think it should withdraw this budget but let us see what the European Parliament will decide. I personally deeply regret that the EU Council reduced this budget but we have to be pragmatic and have to live with that. We have to concentrate this budget, even if it is reduced, and start to focus on clear priorities. For example, Bulgaria can concentrate all EU funds on youth unemployment and on the issue of ‘desertification’ of rural areas and countryside, and not to please anybody – mayors, or political parties… Secondly, we should have more complementary action between the national and local funds. Today there is duplication and nobody knows who is doing what. The repartition of funding should be clearer. I do not think it is a good idea that all the actors take part in the budget of each project. In our view it will be much better to have a divide, showing “the EU is doing this, the state is doing that.” This will give clear responsibilities. Last point is of course to have better governance of the funds. Now it takes so much time, there is possibility of corruption, the bureaucracy is huge and it doesn’t work. If you are a small entrepreneur, my advice is always to not ask for EU funding because you are to get anything – it will take two years and a half, and you need a 50-page application. It is a nightmare. It is necessary to make a clear repartition of funds and to include private partners in favour of PPPs. There is a very good PPP proposal if you look at the Danube Strategy – a project for building a new bridge between Bulgaria and Romania. Today there are just two bridges and huge traffic. There are a lot of investors that could be interested in financing this bridge but against them they have three bureaucracies – the European, the Romanian and the Bulgarian. So, instead of having a project that could start now, it will start in 10 years. For me bureaucracy is the main obstacle to the use of EU funds. It is not the amount of money; we have what we have, but we have to use it in a smarter way.
- How excited are the Europeans about their new right to participate in the policy-making that the European Citizens’ Initiative is giving?
- I think the ECI is an excellent project and I personally support it. I was proud to be the first to sign two of them and soon probably I will sign another one. The initiative ‘One single tariff,’ it is about banning the roaming fees. The other is on gender issues to support women’s employment and I will be the first to sign it, because we have to put into legislation a way to avoid discrimination against women in business and to support more women on corporate boards, as it was proposed by the EC Vice President Reding. The Commission was asked to prepare a legislation to support the citizens’ initiative because it is not showing a really positive attitude towards this initiative, and is creating more and more regulations, complications and so on. They should promote these initiatives and not try to restrict them.
- What is most alarming now concerning the tax havens and tax evasion? The EESC published a month ago its opinion on this topic.
- The most alarming is that ECOFIN Council in May didn’t find an agreement on the proposal made by Commissioner Semeta on automatic exchange of information between the countries inside of the EU due to the negative approach of two countries – Austria and Luxembourg. And at the last European Council the decision was postponed for the end of the year. I think this gave a very negative signal to the citizens. Tax evasion will always exist, ethically it is like corruption, but we have to try to limit it. Tax evasion inside the EU, due to the fact that some Member States are tax havens for their neighbour countries, is scandalous. How can we have an EU where people can use the freedom of movement of capitals from one country to another to avoid paying taxes? Tax evasion costs each European citizen €2,000 a year, and the whole annual amount is the same as the EU budget for the next 7 years. The automatic exchange of information will not completely end tax evasion but it will make it more difficult. In our EESC opinion we proposed to have a black list of frequent fraudsters companies like, for example, Apple and Starbucks. I asked the Commission for more courage in this respect.
- According to Oxfam’s latest data, two-thirds of the global offshore wealth, more than $12 trillion, is hidden in EU-related tax havens. Does this seem real?
- I cannot verify these figures. Maybe not such a high amount, but the fact is that many countries are tax havens for their neighbours, for example France and Belgium. That is why we urge for black lists of countries and companies, and for tax harmonisation. We will never avoid tax evasion inside the EU if we do not go to harmonisation of company tax, of course not at the highest tax level, but on the flat tax rates. The Commission now has a mandate to negotiate with Liechtenstein, Monaco, Andora and other countries and I think we will succeed. We have to control more accurately the banks because sometimes the European banks develop these tax havens – this does not come from the citizens of the Cayman Islands.
- What policies at the EU level can boost entrepreneurship among the young people?
- First of all, we must create a climate of more confidence. We will prepare a proposal for entrepreneurship and it is important that we work on education as well. Today in schools and universities they never teach you to be an entrepreneur, to take risk. We urge entrepreneurs to visit schools and colleges and explain to students their experience, saying “look – this is how I succeeded to become an entrepreneur; not because my family was wealthy, but because I had an idea and I really wanted it.” Access to finance is also an obstacle for the young people to create a business, and of course bureaucracy. In France, even before you start a business you have to pay this and this, they ask you to fulfil all the obligations so at the end you are really a sort of “kamikaze”, because everything is done to prevent you from creating a business.
- What should be done for reviving European industry?
- Primarily, it is necessary to make EU policies coherent. The competition policy should be adapted to today’s situation. We can have a very tough competition policy in a situation of growth, but in the difficulties that we have today, what the Commission is doing does not help business. In a lot of cases we need more cooperation between the European industries as for example the steel and car industries. To be frank, if today we had to rebuild the industry led by Airbus, probably Commission Vice-President Almunia would block it and the result would be that Boeing would be number one in the world. State aid policy should be more open and flexible in the time of crisis. The second policy that has to be changed is trade policy. I do not like the fact that the same day when Mr. Tajani, Vice President of the Commission, was in the UK visiting a car manufacturer and explained that we need a strategy in Europe for the car industries to make them work closer, the Trade Commissioner Mr. De Gucht signed a free trade agreement with South Korea. It will destroy something like one fourth of the jobs in the European car industry. I am not a protectionist but I think we should fight for our own interests. Today we are losing thousands of jobs just because the Commission has an ideology of free trade. So the way forward is to promote industrial cooperation in Europe on various sectors between the European entrepreneurs. Moreover, we should be much more pragmatic concerning free trade. Free trade should be based on reciprocity and respect, on both sides, and social and economic conditions.