Economic affairs, tax & the EU budget

Economic affairs, tax & the EU budget

We can offer a real alternative, putting Europe back on track for sustainable growth, while achieving greater social and tax justice. Practical policies to promote jobs, growth and public and private investment must go together with balanced budgets

The toughest lesson to learn from the eurozone crisis is that sharing a currency without sharing economic and social goals leads to instability and goes against Europe's shared values. Our vision is to build a stronger union to tackle these imbalances and to complete the economic and monetary union (EMU) – with social justice at its heart. 

We are also working hard to get ambitious action to fight tax fraud, tax avoidance and tax havens so Europeans can finally get tax justice.

Europe needs a strong and progressive budget so the EU has the resources to respond to the many challenges Europe faces. Investments such as research and innovation or cross-border infrastructure can create growth and jobs, and many issues – from migration to youth unemployment – need a European response and the right funding to make it happen.

The €315 billion investment plan launched in 2015 is one of the key achievements for the S&D Group since the 2014 elections. We insisted Juncker committed to this investment plan before the S&Ds would agree to support his Commission team. At the heart of the plan is the European fund for strategic investment (EFSI).

The Socialists and Democrats will continue to work hard to ensure it is successfully implemented, including the financing of riskier projects. We also need to ensure there is transparency, democratic accountability and compliance with the investment guidelines. EFSI must also find ways of reducing social and regional inequalities. The S&D Group will keep up the pressure for a more comprehensive European investment strategy.

Flaws in the initial design of the eurozone have made the effects of the global economic crisis deeper and longer, resulting in huge economic costs, real suffering for ordinary citizens and political tensions within and between EU member states.

Without major reform to complete the economic and monetary union (EMU), the EU won’t get over the financial crisis properly or achieve a successful model of democratic, sustainable, cohesive and competitive growth. To guarantee the EMU's long-term sustainability, EMU reforms also need to involve relaunching a dynamic process to bring the economic structures of each EU country and region closer together within an inclusive and competitive single market.

We want:

  • to complete the banking union with a European deposit-guarantee scheme
  • to work on the fiscal capacity (the ability for the EU raise its own revenues) for the eurozone
  • to reform the economic and monetary union (EMU) to help reduce inequalities.
  • to fully integrate the European semester (the framework for co-ordinating economic policies between member states) and to review the Europe 2020 strategy as it reaches midway through its work.
  • to strengthen the democratic accountability of the eurozone through the European Parliament
  • to ensure the EMU is also built on social justice (see our Social Rights campaign).

We stand for root-and-branch reform of the financial sector, with effective regulation of banks, hedge funds and financial organisations.

These banks and companies brought the world to the brink of disaster in 2008 and provoked a recession that has cost millions of jobs and cut living standards across much of Europe.

We will back the plans for a capital markets union which:

  • prevents systemic risks through adequate legislation
  • ensures strong supervisory mechanisms
  • defends a high level of protection for small and medium-sized enterprises (SMEs) and citizens
  • ensures capital-market financing complements – not replaces – bank lending.

With the revelations from LuxLeaks in 2014, then SwissLeaks and the Panama Papers in 2016, the huge scale of tax dodging in Europe has been laid bare. While ordinary citizens face cuts and rising bills, big multinationals make huge profits by exploiting legal loopholes, shopping around for the most favourable jurisdictions and hiding money in tax havens to evade tax.

We stand for a fair tax system in Europe where everyone pays their fair share. We want to close the loopholes and eradicate tax havens to bring in billions of euros to spend on jobs, innovation, public services and balancing budgets.

The S&Ds have long campaigned on these issues and we'll keep fighting until we can make Europe's tax system fair for everyone. Find out more about our #TaxJustice campaign.

We want:

  • an ambitious package of EU legislation to create a fair and efficient taxation system
  • compulsory country-by-country reporting on profits so they can be fairly taxed
  • European tax identification numbers
  • an EU definition of tax havens and a blacklist of countries that allow these practices
  • a common consolidated corporate tax base (a single set of rules for multinational companies to calculate their taxable profits in the EU)
  • the launch of the financial transaction tax (FTT) agreed between several EU countries under enhanced co-operation
  • the Commission to make full use of EU competition law by publishing state-aid guidelines for company taxation.

We want an EU budget that has the capacity and flexibility needed to meet the many challenges Europe faces.

EU spending is agreed as a yearly budget. However, the rules and guidelines for the annual budget are organised as part of a longer-term plan: the multi-annual financial framework. The current framework runs 2014-2020, with a review midway through.

We cannot face global challenges as individual countries. Only by working together can we deal with challenges such as the economic or refugee crises. The S&D Group believes an EU budget with the necessary resources is essential if we are serious about this and both the financial framework and the yearly budget need to be better used to meet citizens’ aspirations.

We want to see a more transparent and fair system for financing the EU budget. We want the EU to have its own resources – direct means of raising revenues – rather than it coming from national budgets.

We want a budget that focuses on creating jobs and growth, with more money going to areas such as research and development, innovation, training and jobs, so we can boost employment and growth across the continent.

It is also essential that the EU budget is well managed. If we want to regain the trust of European taxpayers, we need to flush out any corruption and show that every euro is spent effectively.