“Fiscal capacity is becoming a taboo. In Europe we need a fund to support the investmentThe call was made by Margarida Marques, MEP elected by the PS, on Tuesday in Brussels, at the conference “A Very European Puzzle: Balancing budgets and promote growth” organized by the Francisco Manuel dos Santos Foundation (FFMS).
Speaking at what was the first conference of its kind organized by the FFMS outside the country, the Portuguese MEP, who spoke on the afternoon’s first panel (entitled, in Portuguese, “How can Europe move from fiscal Faeröste to a new budget order?”), he also defended that this investment would allow the European Union (EU) and its member states to raise funds to invest in “priorities such as defence, energy transition or digitalisation”.
In addition to Philippe Martin (former economic adviser to French President Emmanuel Macron and currently a professor at the French University of Sciences Po) and Lucio Pench (former Director of Macroeconomic Policy at the European Commission from 2011 to 2023), Margarida Marques – who also Vice-President of the Committee on Budgets, in the European Parliament – also referred to that “it is necessary to reconcile sustainability with investment”. “Since 2010 we have made some progress, for example with the creation of NextGen EU. There was a clear European response and it was very positive, especially to get economies going again in the post-covid period. But we must use these lessons for the future. We must give Member States the capacity to invest”. In doing so, we always take into account the sustainability of public accounts and finances, as Philippe Martin pointed out. “We must guarantee this sustainability. After all, this is the main – if not the only – reason for the existence of tax rules. Reflection started with covid-19 and it is necessary to continue to do so,” he reflected.
The conference, held in the ACE Events room, right next to the Berlaymont building (headquarters of the European Commission), included a speech by Gonçalo Saraiva Matias, President of FFMS, and an interview with the Belgian Minister of Finance, Vincent van Peteghem . In his speech, the official noted that “one cannot look at the short-term evolution of the deficit”. “That would be irresponsible. It is necessary to make people’s lives predictable,” he stressed. In the Belgian case, he explained, the issue mainly concerns a reform of the VAT system, which he considered “a major challenge”. “If you look at the OECD data, we are the champions in certain taxes. The difference between those who work and those who don’t is huge. We need to be more savvy about the way people live and tinkering with VAT could be an important step. However, it needs to be negotiated in the government [composto por sete partidos diferentes] and reach consensus,” he concluded.
The final panel focused more on macroeconomic policy. Another Portuguese was also there: Ricardo Reis, economist and professor at the London School of Economics, who was reserved about current events. “We are going through a series of structural changes in the economy. There is a massive increase in government spending. The IRA [lei que reduz a inflação] of the Biden administration focuses on employment rather than promoting competitiveness and productivity.” This, he says, creates two problems: “Inefficient job creation and protecting existing jobs rather than creating new ones.”
DN traveled at the invitation of the Francisco Manuel dos Santos Foundation
Source: DN
