Valéry Giscard d'Estaing, born in Koblenz, Germany in 1926, entered the French National Assembly in 1956, served as Secretary of State for Finance from 1959 to 1962, and was appointed Minister of Finance by then-French President Charles de Gaulle from 1962 to 1966, leading France to achieve its first budget balance in nearly three decades. In 1966, he founded the National Federation of Independent Republicans ("Independent Republican Party") and became its first party president. From 1969 to 1974, he was appointed Minister of Finance by then French President Georges Pompidou. He was the third President of the French Fifth Republic from 1974 to 1981. In 1980, Destin visited China for the first time as President of France. During his tenure, he made positive contributions to the development of Franco-Chinese relations.
French President Emmanuel Macron mourned Destin's death on December 3, saying that D'Estaine's seven years in power had "changed France," and former French President Nicolas Sarkozy posted on Twitter to pay tribute to Destin, praising his lifelong efforts to strengthen ties between European countries and "bringing honor to France." After stepping down as President of France, Destin presided over the formulation of the Eu Constitutional Treaty at the beginning of this century, known as the "father of the EU Constitution". Destin wrote the Eu Constitutional Treaty in a clear and persuasive style, known as the "Maupassantian language", and was selected for the French Academy, realizing the cross-border from politics to literature.
During his lifetime, Destin always paid attention to the development of the European Union and played an important role in the process of European integration. In this year's book Europa Project: European Rescue Action, he reviews European integration from the perspective of a historical witness, while also critically analyzing the current situation of the EU, pointing out the factors behind the current impasse in the EU: when the Treaty of Rome was signed in 1957, there were only 6 member states, and now the EU has 28 member states. The sharp increase in the number of member states has not been accompanied by corresponding institutional and institutional adjustments. Accordingly, he argues in the book that if the EU is to emerge from the current dead end, it should restart the process of gradual integration, relying on a small number of member states that go hand in hand with a small number of member states, with the long-term goal of "generating a strong economy through the economic and monetary integration of the Europa member states".
The following is an excerpt from Europa Project: European Rescue Project with permission from Shanghai Translation Publishing House, with some deletions. The title is added by the excerpter.
The original author | [french] Valery Giscard Destin
Excerpt from | Liu Yaguang
The Europa Project: European Rescue Operation, by Valery Giscard Destin, translated by Shi Lu, Shanghai Translation Press, April 2020.
Economic crisis and crisis of confidence: the current dilemma facing the EU
After a long period of straight forward and the chaotic and tortuous forward era after that, what is the current situation of the EU?
The European Union does exist: it has twenty-eight member states and a total population of 505 million people. The GDP of the European Union reached $16.95 billion in 2013, compared with $16.72 billion in the United States and $9.33 billion in China in the same year. The total amount of foreign trade in the EU (exports plus imports) ranks first in the world. Its currency, the euro, was on a solid note, starting at $1.17 against the dollar, or about $1.36 at this time.
The EU does exist, but it faces trouble. It suffered a severe economic crisis. EU institutions did not anticipate the crisis, the response to the crisis lagged behind, and the analysis of the situation, including in the currency sector, was inaccurate. The unemployment rate is as high as 12%, ranking first among developed countries. High unemployment has caused Europeans to lose confidence in the functioning of complex and inefficient EU institutions. Nationalist tendencies are on the rise in various countries. During the campaign, the candidates always told the people that all the suffering they are currently experiencing is caused by the European Union. But in reality, these problems stem from the mistakes and incompetence of the member states' own governments.
If one looks at the level of voting participation in the European parliamentary elections, the alienation of the people from the EU is perceivable, and regardless of the number of member states, the data has always been on a downward trend, and this trend may continue until after 2014.
This dilemma has led to a negative view of the EU as a "sick man on earth". And the big media in English-speaking countries have also continued to devalue the euro to nothing, which has exacerbated this impression.
In fact, every signatory to the Maastricht Treaty knows it, and countless commentators have scrambled to point out that the use of a common currency requires the economic policies of its members to be coherent. Some idealists even claim that such coordination can be achieved naturally with the foresight of the leaders of member states. The EU will then naturally evolve into an economic and financial community. Given that public spending (which also includes local government expenditures and expenditures of other government agencies) accounts for about 40 per cent of the GDP of eu eu-member states and as high as 50 per cent in France, the effort to promote coordination among member states must begin with public spending. Some skeptics of the EU clamor that it means interfering with the specific budgets of member states. This assertion is false. In fact, this coordination focuses on aggregates and deficits to ensure that the overall level of national economies matches the euro.
This is mentioned in article 104, paragraph C, of the Maastricht Treaty. The original text reads: "Member States should avoid excessive public deficits. The European Commission monitors the progress of member states' budgets and the amount of public debt in order to detect serious problems in a timely manner. ”
A protocol signed by the eu member States sets out the specific criteria for article 104, paragraph C, that the expected public deficit or the actual public deficit does not exceed 3 per cent of the GROSS domestic product at market prices and that public debt does not exceed 60 per cent of the gross domestic product at market prices. The Protocol also adds to its Article 3 that "Member States need to report to the European Commission quickly, in a timely and regular manner their expected and actual public deficits and levels of public debt." "This makes it clear that the level of public finance in member states should be kept within the limits of the regulations that match the application of the euro."
Unfortunately, neither the European Commission nor most of the member states have complied with these regulations.
This content is gorgeously referred to as the "stability contract". In 2003, however, both Germany and France went against its content, both to retain considerable flexibility in their profound social reforms and not to hinder public spending, which had been rising rapidly since 1981. In the face of this situation, the European Commission is powerless to issue a little warning.
Public opinion began to question the functioning of the EU and even the capabilities of EU institutions such as the European Council and the European Commission (outside the European Parliament). Despite the "ad hoc summits" that have been held one after another, they have had little effect, such as bringing together non-eurozone countries to participate in meetings to discuss the euro , which refuse to lend a helping hand , or the failure to explicitly propose a solution such as Brexit for EU countries that are unable to deliver on their commitments, which have tarnished the IMAGE of the EU.
Instead of paying sufficient attention to the serious loopholes in the fiscal management of individual member states and the serious consequences of speculation by financial institutions, people have blindly placed the blame on the euro. In fact, the euro has remained stable and has maintained price growth below the level of the United States. After a long and arduous process, although speculative institutions refused to participate in the rescue of the euro area, leaving taxpayers to bear everything, the euro ultimately succeeded in reducing the possibility of international speculative capital speculating on the sovereign debt of those countries with the most serious debt problems.
The highly speculative nature of the crisis thus emerged: between 2011 and 2012, the most vulnerable countries such as Italy and Spain had to issue 10-year government bonds with interest rates above 6%! By December 2013, despite an increase in public debt (except Ireland) in all eurozone member states, the interest rate on the French 10-year treasury remained essentially at 2.4 percent, and Spain and Italy were just over 4 percent. Speaking of the euro, despite repeated denigration in the media of English-speaking countries, and even a few Nobel Prize-winning economists have come out to make some rhetoric, the euro has always maintained its position as the second largest international currency, and even appreciated relative to the US dollar - for export companies, this value-added is even a little too much.
The topic of fiscal solidarity in the EU has begun to be discussed. However, the topic was mainly initiated by countries that had benefited from the management errors of the weaker member states, and the discussion was conducted in order to protect their investments and avoid sharing the latter's losses themselves, but this loss was actually derived from their original decision , as if they had forgotten the benefits they had received. This creates a strange situation in which countries that had managed their finances well would have to pay for the mistakes made by others. Instead of promoting EU unity, these discussions, sparked by the fiscal lobby, have created discord among member states.
It was indeed a difficult time, with slow economic development and high unemployment. Consistent opponents of the EU have had a good time to attack the EU, and nationalism has risen in various countries. Especially when the ruling parties in various countries do nothing or are slow to act, they blame the EU for the bad situation, which is also the reason for the situation mentioned earlier.
Valéry Giscard d'Estaing
In this case, it is not difficult to understand that people's feelings for the EU are gradually cold. But surprisingly, this coldness did not widen further! In France, for example, only 30% of the population supports the government's actions, while the data released by the EU poll in July 2014 is more encouraging: although 47% of The French believe that the EU has a pessimistic outlook, 60% of the French feel that the most difficult moment of the crisis has not yet arrived, 89% of the French believe that the French economy is poor, but there are still 63% of The French who say they are "EU citizens", which is only one percentage point lower than the average of EU member states, of course, sixteen percentage points lower than Germany! Although the crisis is still ongoing, and although the prospects are still unclear, people have maintained a stable sense of EU belonging since 2010!
If we search carefully through the numerous polls, we are pleasantly surprised to find that when asked: Do you support a unified monetary economic community using the euro, a single currency? 68% of French people answer Oui (French, yes. 75% of Germans answer (Ja German, yes. (Translation)!
Danger of disintegration
If concrete and feasible European integration goals are not put in front of the public, the current EU system is likely to fall apart. This is not to scare the faint of heart, because the odds of this happening are quite high.
The threat of the eu's disintegration sends several signals. I will mention four of them here.
First, in the last EU election, turnout was only 43 percent, and one in five voters voted against Europe. This move by the people is not to exclude the EU, but because they are dissatisfied with the functioning of EU institutions and the fact that the EU has failed to achieve anything in the five years of the crisis.
The second signal came from the EU lobby in Brussels, which advocated enlargement of the EU. The EU institutions were initially created only to meet the needs of the six founding countries and did not undertake the necessary reforms to meet the needs of the twenty-eight member states. A part of the self-righteous majority pursues EU enlargement. Despite the protests of the EU's two largest member states, France's recent ambiguous bid to hold a referendum means that a treaty on accession to the EU is possible! The EU accession negotiations with Turkey have been quietly going on! The pursuit of EU enlargement has made the entire system more difficult to control, and as cultural differences have widened, countries have also pursued a return to their own culture.
The third signal is the most worrying, the disillusionment of the EU myth. Since the end of the Second World War, the EU myth has been seen as an ode to peace, but in the last referendum, no one mentioned it at all. The last EU survey analysed the voting participation of young people in France, and the abstention rate of young people under the age of thirty-five was as high as 73%! With EU myths forgotten and unemployment high, Europe's thriving generation threatens to abandon its plans.
Moreover, for some reason, most European media outlets have no interest in covering major events in the EU system.
As the two largest countries on the European continent, Franco-German close cooperation is the cornerstone of European integration, but with the uneven economic development, the differences between France and Germany are also increasing. We should not forget that from the inception of European integration to the circulation of the euro in 1999, it was the leaders of France and Germany who jointly promoted every progress of integration. The reason for the gap between the two countries today is not so much that Germany is ahead of France because of the appropriate reform measures, but that France has fallen behind Germany because it has not implemented the necessary reforms.
On the surface, the two countries appear to be intimate, but in fact the differences of opinion hidden behind the surface pose a threat to the stability within the EU. These worrying signals could despondinate plans for eu reunification.
Unfortunately, the latest EU elections did not bring answers to the EU's deeper questions, but only made some superficial efforts to disguise the current predicament – the election of the European Commission 's president – a move seen as a step forward in EU democracy.
Stills from the movie Brexit: The Unreasonable Battle.
Looking to the future: the Plan to Save Europe
New advances in Europa integration must meet the needs of the current era: since the second half of the twentieth century, global population development has had a huge impact on the world, the rise of highly competitive emerging countries, China's re-emergence on the historical stage, and the impact on traditional culture, spirit and social values originating in Europe. In the nineteenth and twentieth centuries, the West thought they could spread these values to the world. Against the backdrop of such a daunting era, europa aims to create an economy on European soil strong enough to compete with other great powers, maintain employment rates, and continue to transmit its own cultural and social values.
This means that Europe must take to a new level in the process of integration. Because even the largest EU member states cannot accomplish this historic mission alone. Moving further towards federal governance in the EU is also in line with the original intention of establishing the European Community.
The Europa Plan aimed to create a union of unified currency, budget, and taxation throughout the territory, and ultimately to create a common treasury and a mechanism for mutual financial assistance. The goal set out to the European people was to establish a zone on European territory in which any individual and business could move, work, produce and invest freely, using a unified currency and following a uniform budget and business and income tax policies. In this way, a balanced region of economic creativity can be formed, with fragmentation aside, regional differences reduced, and Young Europeans can make the most of their abilities in an environment where creativity, development and employment have been restored.
Some readers may be surprised to see our proposal to deepen economic integration in the eurozone, while ignoring the need for political integration in the region. This is true for two reasons.
The first reason is that there are many proposals for the construction of Europe, but there are few that really bear fruit, so the european people have begun to get bored with it. So we'll just make some practical recommendations. At present, it seems unlikely that the political integration of the eurozone will be decided in the short term. Neither the people nor the leaders of the member states will accept such a proposal. Therefore, making such a proposal is likely to have a negative effect.
The second reason is that our proposal is really like what Jean Monet advocated from the beginning: to start with a limited range of initiatives, and as these measures develop, it will be necessary and convincing to introduce them into other new areas. His initial proposal was for the integration of the coal and steel sectors. A few years later the plan expanded to all areas of trade, retaining the organizational form of the original three institutions and forming the "common market" referred to in the Treaty of Rome.
Proposals to integrate money, budgets, and taxes, and eventually to establish a common eurozone treasury, will not encounter insurmountable obstacles at this time. At the same time, with the development of institutional operations, it has left room for future political integration.
We propose the establishment of a Eurozone Executive Committee, which meets regularly on a monthly basis, with the participation of heads of State and Government. Representatives of the European People's Congress will play a liaise with parliaments. In the process, there may be an opportunity to promote deeper political integration among EU member states.
To build an economy, there must be a specific timetable: reduce the tax gap between member states from the first year and complete the process in fifteen years. In this way, the entire plan can be realized in 2030.
What about the five elements of the EU: money, budget, taxation, public debt, and mutual financial assistance?
Monetary unification has been achieved. The Maastricht Treaty sets out the rules of its operation. The former two ECB presidents, Jean-Claude Trichet and Mario Draghi, managed them well and independently during their tenure. The ECB's mandate is strictly limited to the monetary sphere. Major macroeconomic choices remain the function of the member Governments, the Council of Europe. One thing to note is that extra caution must be exercised when recruiting new members. The current crisis shows the dangers that can be caused by a rash decision to join. Lithuania will join in 2015 and Poland will be more than halfway through the process of joining the eurozone, with no new members to join in the next decade except for these two countries. A candidate's decision to join the eurozone must go through a referendum in advance and obtain a valid majority, such as two-thirds of the votes. This will make people aware of the possible consequences of making these changes.
The regulation of the ECB's issuance of money must also be accompanied by strict regulation of the banking activities of eurozone countries, avoiding the drawbacks of lack of control and the harm of global financial speculation – actions that can only deal a blow to economic creativity and employment, diverting resources to the financial sector and ignoring the special needs of small businesses. The ECB plays the role of financial regulation, and the plan it is currently adopting is also hoping to do.
The tax issue will be more complex, but it is a top priority. The unified tax may be the most personally perceived change for the people of Europa, or it may be the measure they are most willing to accept: a unified currency, a unified tax! Once this is achieved, the public will never be happy to see history go backwards.
The issue of a unified tax is huge and is sure to provoke a series of criticisms, with some accusing the idea of being impractical and unattainable! The media will be filled with critical and dismissive voices. However, in many of the world's largest countries in the world today, this is a common occurrence. Whether in the United States, China or Brazil, national taxes are consistent across regions. People living in New York or Los Angeles pay the same taxes, as do people living in Beijing or Shanghai. Residents of Rio de Janeiro pay the same tax as residents of São Paulo. So why do people in Berlin, Madrid or Naples have to pay different taxes? Be prepared to go back and forth to accusations of uniform tax measures.
Stills from the movie Brexit: The Unreasonable War.
One of the main voices of opposition comes from the idea that some people, out of reflex or prejudice, believe that the tax field falls within the sovereign jurisdiction of each country, because the parliament was created, and even its original function was to vote on the tax issue! In theory, this makes sense, but practice is far from this simple idea. In modern society, tax proposals are made within the tax authorities in isolation from the population and the outside world. While the few lawmakers in the halls of parliament discuss taxation, the involvement of lobbies representing small interests complicates the work. Ultimately, parliament's veto power over amendments can solve the problem. To insist that this is a matter of national sovereignty seems more like an excuse than a valid argument. In addition, an IFOP poll conducted in November 2013 showed that 66% of French people favored the creation of the position of Eurozone Finance Minister.
Because taxation is seen as so-called "national sovereignty," there are irrational tax rates in several member countries, including France, and the resulting long-term uncertainties hinder economic development.
Even if the "principle of sovereignty" is observed, member governments are free to choose to implement their tax policies to achieve certain objectives. What are the goals? As we have suggested, the goal is for the consolidated eurozone to pay exactly the same amount of tax in each country, regardless of country or region. This principle has led to the following questions: What taxes are involved? Who manages it? Who decides?
What are the taxes? Equality — tax equality in geographical distribution — involves all taxes other than regional and local taxes, relating to income and property: income tax, value-added tax, corporate tax, "solidarity" tax and inheritance tax. The aim is not to eliminate these taxes, but to make all taxpayers, regardless of which country or region within the eurozone they are in, pay the same amount of tax. This will require continuous adjustments to tax rates and tax bases in order to achieve uniform taxation. This is done by first identifying a unified list of tax types to ensure that their tax bases are consistent, and then by determining the final "target tax rate".
Tax equality can be achieved in two phases: the "upfront" period will take ten years until 2025, during which countries will reduce the tax rate gap between countries in phases and equally according to the target tax rate. The "late period" takes five years and ends in 2030, when countries adjust their national tax rates to THE EU rate.
There is also a need to harmonize taxation conditions and deal with tax disputes within the eurozone. This work will continue to be carried out by national tax authorities. Of course, the way countries collect taxes and tax cultures are very different. During the transition period, the tax authorities of various countries will strengthen the exchange of tax work through lectures, internships, training, etc., so as to achieve the necessary adjustments in tax practice.
The ultimate goal needs to be reiterated: to ensure that people pay the same amount of tax, regardless of the country or region within the eurozone, in any industry, with the exception of regional or local taxes. Just like in the great powers of the world, whether federal or centralized, people pay the same taxes despite being in different regions. In this way, people will feel new freedom to start a business, create and produce more freely.
At the same time, the harmonization of public finances in the euro area will naturally involve the issue of public debt of member states. Different interest rates and different conditions for issuing bonds between countries have largely contributed to the financial crisis between 2009 and 2012. The ECB, led by Mario Draghi, was very wise to buy government bonds, which served as a stabilizer of the market and made no chance for speculators who wanted to make a fortune in the short term. But eurozone debt continued to rise in 2013, with Greece's debt reaching 160.5% of GDP, Italy as high as 130%, and even France as high as 91.9%! Despite the continued increase in the debt ratio, the interest rate on the 10-year Treasury note has declined, with interest rates on French government bonds at around 2.4% in December 2013 and 4.4% in Italy and Spain, indicating that confidence has begun to be restored and speculation has also relented!
In the midst of this fiscal turmoil, an outdated and ridiculous proposal was made: let member countries immediately share the debt, and high-interest rate countries should borrow together with low-interest countries. Who ultimately pays interest on these debts? Compared with traditional bonds, what kind of confidence can such joint bonds bring to investors? Fortunately, this ill-timed suggestion was not adopted.
At the same time, another more sensible idea has gradually taken shape: if the level of public debt in eurozone countries is closer to the demand for bond issuance, it is possible to issue joint bonds in the euro area, which not only integrates the needs of member countries under normal fiscal conditions, but also can bring financial support to these needs. This means a new step in the fiscal integration of the euro area: the creation of a common treasury of Europa members to manage the debt needs of euro area members.
At the end of the eighteenth century, under the impetus of Alexander Hamilton, the United States stabilized the state finances in a similar way.
Issuing eurozone joint bonds and creating a common treasury of Europa member states require careful planning. Young European financial talents with outstanding achievements in global financial markets can contribute their strength. To determine how much public debt needs to be issued, the upper limit is the deficit limit passed during the budget approval process, the issuance schedule is established, and the measures related to interest payment are established. The heads of the national treasuries of the eurozone member states will prepare the plan by means of a valid majority vote (in some cases, unanimous votes).
In the process of achieving an economic, fiscal and tax union, we should also think about how to introduce a mechanism of fiscal solidarity among the member states, as stipulated in the German Basic Law of 1949.
There are wealth disparities among eurozone members, just as there are wealth disparities between provinces in large countries like the United States or China. These differences are not due to differences in the degree of hard work of people from country to country, or to the mismanagement of local industrial policies and regional social welfare policies. Its root cause lies in the differences in national conditions, development potential, land fertility, distribution of natural resources, accessibility to transportation, altitude, education level and social welfare level. Even with the same tax measures, government tax revenues will vary. In this case, a modest apportionment of income can be made. At that time, the German Basic Law proposed "achieving a balanced standard of living within the federal government", which also wanted to share tax revenues.
Such measures cannot be carried out immediately in the eurozone, which is not yet federal in nature, and the management of economic policies in each country is still the way in which the governments of the eighteen member states and their local governments go their separate ways. But it is not impossible to take some initial measures.
With the harmonization of taxes, that is, the harmonization of tax rates with the tax base, each member state will generate different tax revenues: "rich" countries will collect more taxes than "poor" countries. Tax revenues can be transferred between these countries so that countries with lower incomes can also receive at least 75 per cent of the tax revenues that might be obtained if their tax revenues are proportional to the size of their population.
This measure of fiscal solidarity must be cautious and cautious, but it embodies the meaning of economic and monetary union. The alternative solution adopted by the federal state is that the central government is responsible for public expenditure in areas such as education, transportation infrastructure, and medical facilities. In this way, it is also possible to balance tax revenues between rich and poor provinces.
Introduction section reference links:
https://www.sohu.com/a/435989469_115362
https://www.xinhuanet.com/world/2020-12/03/c_1126817148.htm
https://zh.wikipedia.org/wiki/%E7%93%A6%E8%8E%B1%E9%87%8C%C2%B7%E5%90%89%E6%96%AF%E5%8D%A1%E5%B0%94%C2%B7%E5%BE%B7%E6%96%AF%E5%9D%A6
The original author | [french] Valery Giscard Destin
Excerpt from | Liu Yaguang
Edited | Luodong
The introduction part of the proofreading | Li Shihui
Source: Beijing News