An Alternative Proposal of the CEEP Chapter on Economy & Finances

I would like to propose an alternative chapter for “Finances”. I wrote this in collaboration with participants of the Jitsi meeting on “Finances” (mind you that the coordinator of this chapter was not present so it is a bit of a rogue proposal). When writing this, I have scrapped this chat of ideas as well as various European pirate parties’ economy & finance campaign programs and added some of mine.
I would appreciate it if you considered it, helped to further develop it or just told me your opinion (sometimes it might seem a bit repetitive so I am open to improvements).

Alternative Proposal: CEEP 2024 Economy & Finance Program

Our economic program aims to support sustainable economic growth focused on long-term development, broad improvements in quality of life, and fostering a competitive, fair, and inventive economic environment. In this regard, we believe it is necessary to consider a broader set of economic metrics besides mere immediate gross productivity (GDP). Such measures must capture the development of long-term economic opportunities, well-being, environmental and social sustainability, and successful collaboration across the whole EU.

The tax mix should be based on establishing an environment of fully internalized externalities of economic activities to cultivate an entrepreneurial environment and a long-term well-developing society. To achieve this, we propose the following points: Moving a larger part of the tax burden from labour to capital with a particular focus on a higher levy on short-term investment and fast capital reallocations (especially across borders). To facilitate this, tax harmonization across European jurisdictions should be further developed. This should include targeting strategic capital allocation for tax optimization, tax evasion, and intentional obscuring of corporate structure, and business models of companies. There should be a larger application of the principle of subsidiarity in taxations focusing on empowering local communities’ decision-making and interests regarding their local tax structure together with establishing an all-European harmonization framework (yet not unification of tax rates or tax base definitions, only framework of the shared approach).

Competitive Economic Environment
A transparent, fair, and harmonized economic environment is the core of a healthy developing economy. The economic environment should ensure the prohibition of a high concentration of market power and instead focus on SME development. An example of a policy supporting SMEs is a minimal untaxed revenue for every business.
Economic policies must support entrepreneurship with a particular focus on true start-up ventures and innovative investments. True start-ups encouragement needs a supportive environment, accommodative tax framework, institutionalized help with legal requirements, and appropriate support of knowledge sharing (via antitrust laws, supportive patent laws and similar).
Economic policies should discourage long chaining of production transferring value-added into the final destinations and thus not leaving profits there where the value was created. Leaving resources there where the value is created will support local communities and reinvestment for further long-term economic development.

Financial Markets and Multinational Corporations
Regulation, supervision, and taxation of the financial markets should focus on investment into long-term development strategies with local reinvestment of profits and further creation of local opportunities (profits should be invested there where they are made at each stage of production). The environment should deter financial dominance, capital concentration, and for-profit short-term reallocation. For immediate profit, short-term and speculative investments should bear heighten disincentives and be under stronger expectations on transparency of motivation (against for-profit tax optimization), business models, and risk management.

National and Local Government Debt
We should help to progressively move away from debt financing of governmental expenditures beyond long-term investment projects. Ultimately, issuing government debt should be allowed only with a direct connection to a particular investment project including a direct repayment strategy of the debt in connection to the concrete project.

European Economic Integration
The next steps of European economic integration should focus on nationally adjusted European minimum labour wage to support labour mobility, equality, and broad economic development of all European regions. Further, there should be continued support for the economic development of physical and institutional infrastructure, particularly of cross-border regions.

Principles of International Trade (mostly unchanged from the previous proposal)
Pirates stipulate that in all negotiations of the European Union on trade agreements the following conditions must be met: The European Parliament must ratify the treaty and the treaty must be negotiated to uphold the following principles. The ultimate goal of international trade agreements is the positive development of all involved parties. There is comprehensive access to information and public hearings during the negotiating process. The proposed treaty includes respect for freedom of the Internet, social and civil rights, and sustainable social and economic development. The interests of small and medium-sized enterprises must be considered.

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I feel like it revolves a lot around tackling fiscal optimization and evasion, and that large areas are ommited, including but not limited to :

  • European fiscal rules
  • Carbon market & tax & carbon border tax
  • Banking regulation (Implement Basel 3 fully and go beyond)
  • Taxonomy of electricity power plants investments
  • Industrial Policy (Competition is good but nurturing sectors is great to build comparative advantages + need smth on ressource extractions and refining to support the transition and a dedicated defense sector program?)
  • Electricity market reform (CfD, App…)
  • Immigration?
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Thanks for your suggestions. I am definitely open to expanding it (in collaboration at best).

As to your points:
Banking Regulation
As far as I know, Basel III has been pretty much fully implemented at this point (tell me what you think I am missing), the work is now on the update (Basel IV, mainly on the stuff around Pillar 3). In my opinion, the next changes will come out of the recent experience (Credit Suisse, SVB…) and so focusing on analyses of the interplay between business models & balance sheet structure (about time, in my opinion) rather than just focusing on balance sheet ratios, basic risk modelling and information sharing as it is now (besides of the interest rate risk exposure that was missed but that’ll be a relatively more straightforward fix I’d say). I tried to hint at it in my proposal while trying to avoid being too specific. What ideas do you have in mind? And in what level of detail on this topic do you think the program should go?

European fiscal rules
It depends if we define “fiscal” in the same way, I tried to refer to some taxation issues & national debts (budget rules). I didn’t go much into specifics on the expenditure sides, you’re right. I am not entirely sure where we’d like to draw the line for the European perspective on that but we can have a stand on it. Open to debating it, for sure.

Industrial Policy (or Industrial Organization)
I am more of a rule-based than a subventions-oriented person (it is difficult to ensure efficient use, let alone the level of misusing it for non-investment purposes) but I agree, we can discuss particular sectors. The reason why I didn’t go into it was that I expect we might have a hard time deciding on which sectors to single out & how (out of my experience, this debate turns into “national” preferences very quickly and that is bad but I am sure we can manage to avoid it :slight_smile: ).
Resources politics/economy, for sure, is a big topic. Let’s do it. Honestly, I didn’t want to overlap too much into the chapter “Environment, Climate, and Energy” (similarly for Carbon Market and Electricity Market Reform but if we align our chapters then we shall have a section on it for sure).
That’s for me a tricky and very sensitive topic (I used to work in an immigration office). First, I admit I feel that having a position towards immigration based on labour market needs (and pensions systems etc.) is a bit too cynical and not long-term strategic. Also, immigration has to be aligned with other chapters. Is that what you were thinking about, tackling it as a part of the labour market strategy?

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I checked and there is no Industrial policy team, so maybe we can do a thing about it and projects of common European interest

Need to review the electricity market stuff by the environment group

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The new version from Strasburg is in a new post under Economy and Finances Chapter (official version from the joint collaboration).

I invite you to join our discussion there.

Thanks for all your work so far!