Borders in Europe will threaten internal market
EU Commission First Vice President FRANS TIMMERMANS tells Kevin Schembri Orland that the creation of borders in Europe will mean problems for the internal market. “If we begin creating borders in Europe, Schengen will not survive. As a result of that, th
What are the main challenges Malta will face during the EU Council Presidency?
In my experience with presidencies, there are three things that matter: what items are still on the agenda, what you want to add to the agenda, and events.
Fifty per cent of it is dominated by events and, in the world we live in, such events are unpredictable. As such you need to be flexible enough to react to them. I am absolutely convinced that the Maltese government will be able to do that due to the Prime Minister’s experience and because he is highly regarded by his colleagues in the EU Council.
Looking at what is on the table, migration will be a big issue, and so will Brexit. As far as we understand the British Prime Minister, Brexit is bound to start during the Maltese Presidency. Aside from these, both internal and external security, investment, and the priorities discussed in Bratislava will also be on the table.
As for Malta’s priorities, these will most probably have to do with migration and specific issues like the Mediterranean and the maritime economy. I also assume that Africa will be very important for Malta as well.
Do we foresee any economic effects for the EU once Britain triggers Article 50?
What investors don’t like is insecurity, and so as long as we don’t clarify the issues, investors will be careful. I believe the best thing we can do for our economy is to clarify what the Europeans and what the British want.
The economic effects would depend on what kind of relationship the UK wants with the EU. There will not, however, be any de-linking of the internal market with freedom of movement. So if you want to be in the internal market, you have to respect the four freedoms, including freedom of movement.
EU countries seem to be failing in their agreement regarding the relocation of refugees from Greece and Italy. What needs to be done?
The issue is worrying, not just as it needs to be resolved as an issue in its own right, but also because migration will be with us for at least a generation, perhaps two. If we don’t stick together we will not be able to resolve or control this. We need to ensure that relocation works.
It’s been slow to start, and we know of the controversies surrounding some member states who don’t want to be a part of it, but it’s picking up now. If we show results, the momentum will gather pace as people will see it helps with getting the issue under control. To me, it is unacceptable to abandon Greece and Italy and not relocate people from those countries who have a right to be relocated.
Turning to the rise of xenophobia and far-right parties due to migration and terrorism, what basically needs to be done to quell these worries?
The issue is much deeper than just insecurity due to the migration crisis. There’s terrorism, of course, but we are also on the verge of the fourth industrial revolution. People feel this change coming and they are insecure. Will I have a job, will my children have jobs? It’s also linked to the economy after the banking crisis.
If you look at the numbers, inequalities have grown. To really tackle the issue you need to tackle jobs and transform the economy into a sustainable one. This is the challenge. The level of governance you need to combine all these things is huge. People do not yet see Europe performing and so they are wary of giving us that responsibility.
There are a number of countries and parties who have expressed unfavourable ideas towards open borders. You have to admit, their fears are valid.
Of course, to some extent all the fears are valid. But to translate those fears into hatred towards someone who is different is a fundamentally wrong response. It’s not a response we haven’t seen before in European history, but it remains the wrong response. That doesn’t mean the fears are not justified. The world is changing fast and the question is: what is my position in that world?
Coming back to borders, we speak about flexible solidarity. That means showing solidarity on the basis of where you are and on what your political priorities are. It also means that one shows solidarity on all the issues that are part of the problem. Flexible solidarity is not an excuse to avoid taking refugees, but rather is a means of creating the right balance in what you can and want to do so that everyone pulls their weight in this common European problem. It’s not a la carte solidarity, you can’t pick and choose. You need to show solidarity on all fronts but the balance whereby you do one thing or the other can be different between one member state and the next.
Let me be clear: if we begin creating borders in Europe, Schengen will not survive. As a result of that, the internal market will not be able to function and the economic price we will face will be huge. Everyone advocating internal borders, fences and walls should be very aware of the consequences – and for them as well if the internal market is the final victim of this operation.
What kind of regulations and rules could be changed in Europe following the Panama Papers?
Two phenomena that have plagued us over the past decade are the risk of social and fiscal dumping. On both, the EU should correct excesses. I’m not against fiscal competition, but it should be possible to agree on a corporate tax base to allow member states to have competition but to introduce a common threshold, below which one could not go as that would be pure fiscal dumping.
It’s the Commission’s position that we can come to an agreement on this. If you do better, if your infrastructure is better, if you have lower taxes, that can all be fine. But there should be an agreement between EU countries to limit how low one can go with those levels, and agreeing on a corporate tax base is a starting point for that.
In terms of social dumping, you must ensure that you don’t compete on wages if you have the same people in the same place doing the same job. It’s absolutely fair that two people working on a scaffold, working in the same place doing the same job also get paid the same, and we need to correct injustices there.
Coming back to taxation, if one has low taxation, fine, but then one needs to apply low taxation to all firms in the same situation. Right now you can go into any EU city, with a huge international coffee chain near a local coffee shop, with the local shop paying regular taxes and the international chain not. That is unfair.
The Commission is not against competition on tax that has to do with wider issues of competition. But we are against tax dumping, as this undermines the very taxation base on which social states depend. If you have
Looking at what is on the table, migration will be a big issue, and so will Brexit. As far as we understand the British Prime Minister, Brexit is bound to start during the Maltese Presidency This is our challenge.
It’s the Commission’s position that we can come to an agreement on this. If you do better, if your infrastructure is better, if you have lower taxes, that can all be fine
endless competition on tax, then at the end of the day state revenues will be so low that you will have problems with the educational system, the healthcare system, pensions, etc. We need to underscore this and we need fair competition.
One of Malta’s Ministers was mentioned in the Panama Papers. Does the Commission have any views on this, given that Malta will hold the Presidency, and have there been any talks between the Commission and the Maltese government on this, or any pressure from your side?
I’m aware of the Panama Papers, but I’m not aware of any specific issue pertaining to specific ministers or politicians in member states.
Recently, tensions between Russia and the USA seem to be deteriorating. Do you foresee any consequences for the EU?
The consequences are clear, just look at the atrocities in Aleppo. We have become realistic in our expectations of what President Putin does, but even he surprises us when you see the level of atrocities the Russians are prepared to go to in Syria right now. It deeply saddens us to see the civilian population relentlessly bombed. Those consequences are first felt in Europe, before they are felt in Russia or the USA, as it is happening in our neighbourhood.
There is an arc of insecurity going all the way from the Barents Sea next to Europe, to the West Coast of Africa. All across this arc there are challenges to our way of life and threats to European stability – sometimes ideological, sometimes economic. Russia is part of this European continent, so we will have to come to terms with it sooner or later, but let’s not be naïve about what is happening in Russia.
I’m all for dialogue and looking for common solutions, but from a position of strength. We need to see that there is a fundamental ideological difference in how Mr Putin sees society and how EU nations see society. EU nations, I hope, will all continue to choose for open, democratic societies where the rule of law and separation of powers prevails, where the President is not almighty but someone to whom the rules also apply.