23/10/2016 Talking Business

ailing banks set to pull out of the UK due to the Brexit Road. -- Brexit

vote. Now it is talking business. Welcome to Brussels. It is the

so-called heart of Europe. The EU mission for ever closer union. A

series of crises now stand to threaten that ambition. In this

week's talking business, we examine the future of the European Union.

Welcome to the European Parliament in Brussels. I am Tanya Beckett.

After nearly six decades of expansion, the European project

appears to have stalled. In June the UK voted to leave the European

Union, the first member to do so. A wave of anti-EU sentiment is

sweeping across the region from Paris to Athens. One of the people

at the heart of the European Project for a generation was John cod tree

she. He was an architect of the euro and as the European Central Bank

president he steered economic and monetary policy across the euro zone

and the rest of the EU and much of the world as a pivotal time in our

history. He believes the answer to the current problems is greater

integration. What we need is to apply all the pillars of governance

that I have in mind. It remains very important for the European Union.

The imbalance procedure remains important. We do not have a

political federation, we need governance in the euro area and we

need also strong governance in the domain of the structural reform and

in the domain of all which can complete and achieve the single

market. I was the first to call for a minister of finance for the euro

area and a Ministry of Finance for the euro area to run the governance

I have already mentioned, fiscal, economic and financial. On the other

hand, we need more democratic accountability at the level of

Europe and at the level of the euro area, which means you have a very

important decision to take, where the country concerned, say Greece,

is not in agreement with the recommendations which are made by

the commission and the Council, then you ask the Parliament in a format

which would be the format of the euro area to have the last word.

Because in such cases it seems to me it is not only legitimate, but

indispensable to ask the representative of the people to have

the last say. The representative of all people of the euro area because

the entirety of the euro area would be at stake. Within Europe, economic

growth is quite prior. Relatively. Our economy is too inflexible and

speaking of Europe as a whole, too inflexible, there are big

differences from country to country. In a world which is changing so

rapidly, you have to adapt very rapidly and we are less rapid, less

mobile, less agile than the United States of America and this is one of

the main problem is that we have to cope with. We summed up saying we

need a lot of structural reforms. It is a big world, if I may. A lot of

things inside. One of the most important concept is to be as agile

as possible in a world which, because of India, China, Indonesia,

Mexico is changing extraordinarily rapidly. Does the structure of the

EU whole country is back from pursuing their own path and pursuing

growth? I don't think they are. There are no elements which would

hamper structural reforms. Most of the structural reforms are coming

through national decisions, decisions of governments, decisions

of Parliament. Decisions in many countries of social partners

themselves. Of course, that makes things not that easy. If we had a

single place where you would decide everything it would simplify the

structural reform implementation. That is not the case. Structural

reforms are national decisions. The UK has voted to leave the European

Union and some debate now as to what it should take. What part do you

think it should take? All decision-makers, in my

understanding, in the UK, in Europe and in the rest of the world and

many decisions are taken in the rest of the world, not only in Europe or

the UK. Does decision-makers have to know where they go. Reducing or

eliminating uncertainty as rapidly as possible is, of course, they must

from that standpoint. It is better to say we activate article 50 at the

end of March than to say we were activated at the end of the year

were after the German election. The sooner the better. To reduce

uncertainty. The fact that Britain has decided to leave the European

Union is, of course, a loss for the remaining countries. Is there a

message there that Brussels needs to be receiving? Don't forget that even

without the UK, the 27 are the biggest trade partner of the world.

Even without the UK the euro area has a number of citizens which is

superior to the United States of America. We are big. Even without

the UK. I am joined now by a panel of guests from business, politics

and research. The director of the think tank, Brueghel. Catherine is a

Socialist MEP here in Belgium and sits on the industry, energy and

research committee. Ben Butters is policy director of an organisation

representing 20 million businesses across Europe. Let's start with you.

When we talk about greater integration of Europe, from an

economic perspective, what are we talking about? A lot of very

intelligent people start talking about changing the institutions,

installing an EU finance minister. They are all very interesting ideas

but I think we need to do something else. We are at the crosspoint.

Everybody acknowledges that. Either we go backwards, we stopped

integrating more and more, we start disintegrating a little bit, or we

go forward. Standing still is not an option, let's be clear on that. It

is the populists who want us to go backwards. That is not my point of

view. We have to move forward. Kathleen is talking about moving

forward or backwards but you're in situ talks about moving sideways. We

have to have different speeds in the European Union. We have to have a

stronger core and we have to have a circle outside that is economically

quite integrated but less politically integrated and the

United Kingdom, with its decision to leave could be the first member of

this outer circle. An integrated economic area with less political

integration and less political influence on the lawmaking and

everything that constitute the basis of that integration. That seems a

very practical solution, some want more integration, others don't,

others want to sit on the sidelines. For business and doing trade within

the EU, I am assuming that would not be your first choice? It is all a

bit abstract to our members. They want it to work and much of it

doesn't from the point of view of a small business. The single market is

a concept for many of them but it doesn't deliver in real terms for

many businesses. They cannot sell their services and their products as

easily in the European Union as they can in other countries. That has to

be made to work. That is going backwards. They need to make rules

that are already in place work properly. Then we can think about

the possibilities for the future. Is it realistic to have a one size fits

all approach? It doesn't seem to be realistic. As we were discussing,

there are many member states who are not playing ball, they are not

delivering. Perhaps we need to reflect on whether an alternative

model is possible. I think first of all we need a proper inventory of

what is on the inventory for businesses and work out what is

going wrong. Then the commission in its role as guardian of the treaty

needs to put pressure on member states and make them do what they

are supposed to be doing. We have to really focus on the rooms where they

are important for everybody. It is absolutely central at the same rules

on services or on consumer protection were on state aid are

applied in the same way across the entire economic area. If you don't

do that, you cause major distortions. Some businesses in

France or in Belgium would benefit at the expense, or in Ireland, would

benefit at the expense of small businesses elsewhere. We need the

same application of rules so the level playing field is there as

regards business. Do we really need to charity political objectives? I

don't think so. We do need to do it in the Eurozone. The Eurozone needs

to move ahead. There we are on this page. Thank you all for now. Later

we will look at the way the EU balances its pursuit of price

stability against it need to promote growth and prosperity. We will also

look at the relationship with the rest of the world as it faces a

backlash against the Transatlantic Trade and Investment Partnership.

First, our comedy consultant looks at the EU dilemma from Ireland.

Let's get real about challenges. There is no doubt the EU is facing

many challenges as it considers its future. Are any of those challenges

as challenging as getting around Dublin city centre at the moment

while a new tram link is being forced through the narrow city

streets? Forget about Brexit or Eurozone uncertainty, this is what I

call real disruption. There was a time when if you mentioned the EU in

Ireland it was synonymous with building badly needed new roads,

motorways between our main cities. It was wonderful. We were grateful

but now it is more complicated than that. It is more complicated than

that. The fiscal adjustment is something Ireland has had to pursuit

by virtue of being a member of the single currency and Eurozone.

Ireland has had to obey rules. In order to remain a member of the

single currency they have had to proceed fiscal policies which are

considered necessary from an european perspective but in many

ways they are economically irresponsible because it is

undermining large parts of the Irish economy. The building behind me is a

perfect emblem of that attitudinal shift. It is the brand new

headquarters of the Irish Central bank. If you years ago it was a

tragic husk because it was the former headquarters of Anglo Irish

bank. The poster boy for Irish economic collapse. Is there a

lingering resentment as a result of what happened all those years ago?

It is very easy to nationalise our successes and European eyes are

failures and I think that is something that is quite common

across the entire EU. I think Ireland remains committed to the EU

as we saw with our independent poll. Over 90% of those surveyed want

Ireland to remain part of the European Union, notwithstanding the

UK decision to vote to leave and with 87% of Irish people feeling we

have benefited from our membership of the EU. I think Irish people have

a very positive view towards the EU, notwithstanding the challenges and

difficulties that relationship has got. Within a year or so, trams will

be running smoothly across this approach and the construction chaos

of the last while Will be a thing of distant memory. Maybe it is the same

with the EU. Instead of worrying about whether Brexit will

precipitate the catastrophic failure of the EU, maybe we should look at

it as a stage in its natural evolution as the EU works out what

shape it has, what function that has one all the bridges and roads have

been built. Our take on the EU future and, remember, you can see

more of his short films on our website. Our guests. But come to you

on the issue of economic growth, or the lack of it. Is one of the issues

which is undermining sentiment in the EU and the Eurozone at the

moment. There is a global slowdown in trade. We have seen the numbers

being revised downward. We have a global issue here. We have a

specific Eurozone issue and the Eurozone has performed much worse

than international comparisons suggest. It should have performed,

if you compare it with the United States, the Eurozone has done much

worse. We have been slow in resolving issues. The banking

problems are festering in parts of the continent. We have been slow

with monetary policy response. There is a mistake to raise the rates,

that was a major mistake. We have been too much on the austerity site,

especially in the 2011-13 period. There were mistakes but now most of

those policy mistakes have been corrected and we should seek

gradually a recovery. It is too slow and people feeling. There is not

enough job creation. We need a more vigorous response from the stronger

countries, including from Germany and we need a real bus on single

market productivity and structural reforms are difficult. I think we

need to be very focused, leave the austerity behind us, but not just

start investing in anything. Invest in changing our economy to a

sustainable economy. That goes hand in hand with a fairer taxation

system. It is people who are paying for these austerity measures. Our

businesses, multinationals, are not saying that you are paying their

fair taxes. Combating tax avoidance, making sure everybody pays their

part of the tax, that will rebalance the growing gap between people who

work, you lose a lot of money. They see their wages go down and people

enjoy getting the money from companies. Would you see corporate

taxation as central to the wealth disparity issue? If you do get the

big companies, the Apple case is the most obvious one. Corporate taxation

has been appallingly low. That reinforces a sense of unfairness of

the system. Effective tax rates throughout the union on capital have

been rather weak. I think there is certainly a case in reducing tax

rates for low income households. In the countries that have the physical

space, Germany, they could give a little bit of space on low income

tax and help boost the economy. They could trigger some investment,

trigger some command. That is where I would act on the corporate

taxation said. The discussion is stopped. We need some harmonisation

or at least some consolidated tax bases and these proposals get stuck

because they need unanimity. Let's ask the question about the EU

relationship with the rest of the world. Drink Brexit, the point was

made at the EU has failed to strike some key trade deals. It has perhaps

become too introspective. Would you agree? No and I think it is

premature to say they haven't succeeded. They are still

negotiating with the US. It may seem like a long time, but looking at the

track record for most free trade agreement discussions, that is

pretty early in the process. This whole narrative about the deal being

dead. TTIP being the trade partnership with the United States.

It is premature to talk about it as that in the water. We need to

perhaps recalibrated. It is still early in the process, but the EU

needs to fundamentally be involved in these negotiations. Globalisation

is here to stay and the EU needs to be one of the forerunners. They

cannot afford it and if they let others define the parameters for

international multilateral agreements problems will be greater

for the European Union the long run. Globalisation has been sighted and

we see this in the run-up to the presidential election in the US, for

a recent for the disparity between rich and programming. The music that

is the case or should we forge ahead in the EU with agreements such as

TTIP? I don't think we need... I think TTIP is dead. A lot of

politicians got to that conclusion. Not just people in this Parliament,

but leading politicians in Germany. That doesn't mean any trade

agreement is dead, that doesn't mean any trade agreement with the United

States is impossible. I would be very much in favour if we could get

the trade agreement with the states that said global standards in the

world on environment, on social issues, but high standards. The

problem with TTIP is that is lacking. They are doing it the other

way, they are lowering standards on environmental issues and social

issues. People are fed up with that, to be frank. We need another sort of

trade. The trip we are dealing with today. Many people look at the

position from a macro perspective and say it is good for economies.

Economic figures would support that view but it is true there are

individuals, sectors, communities who lose out. How can you afford

that? You are pointing to the right problem. There are always winners

and losers when you integrate trade and you have to think about the

losers. The message that people are giving out the EU but also in the

United States is you are thinking enough about us. To my mind, social

standards are fundamental, environmental standards are

fundamental. We need good trade agreement, not bad trade agreements.

In the EU we have had a giant internal market, a giant trade

agreement and we have trade agreements, we have said social

standards. We have certain social standards toss-up there is a

discussion on posted workers, working Time directive is and so on.

These standards are there and the EU should leverage on that and it

should actually use that as a selling point. Is there such a thing

as a bad trade agreement for business? Can you distinguish

between a good agreement and the bad one? There are good and bad

agreements. I don't quite agree with the analogy between the single

market and a trade agreement. There is a big difference between creating

a market and striking a multilateral trade agreement. Of course, it has

taken decades to build a single market. We are not Syncrude

agreements should be agreed just for the fun of it. The need to be

effective, they need to be robust and they need to factor in many

elements. 90% of growth will come from outside the EU within the next

ten or 15 years and Europe needs to be framing that process and being

part of the benefits of that, but waiting for others to do it for

them. Thank you very much to all of you. That is it from Brussels. Join

us again next week. We will ask whether there is still more that

unites Brix nations than divides them?

We're looking at a colder start to the day, feeling certainly

Some mist and fog patches around and a fine sunrise

Thanks to weather watcher Joanna M for sending us that picture

Just like yesterday, it's not going to be dry everywhere.