We have decided to split this part of the economic program into two modules.
Module 1 – Economic growth
Our economic program aims to support long-term 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. Such measures must capture the development of long-term economic opportunities, well-being, environmental and social sustainability, and successful collaboration across the whole EU.
Justification by Bastian:
Unlimited growth in a materially limited world - it has been clear to economists since the 1970s that this is not possible. Why do we nevertheless fanatically cling to the dogma of economic growth?
It’s not that the economy is fundamentally bad. It’s just that the idea of growth has now degenerated from a means to an end in itself, to which we subordinate everything else. According to Welzer, this is due to the following three historical mistakes:
We underestimated what the ecological consequences of exploiting natural resources would be in the long run. This, in turn, is due to the fact that the global effects of the use of fossil raw materials were not yet foreseeable when industrialization got underway. Thus, for over a century, the new economic power could be seen as a savior in the fight against poverty and social injustice.
We have linked the financing of the welfare state to the economy. The state budget is financed to a considerable extent by taxing employment. This leads to an unfavorable linkage: when the economy goes into crisis and jobs are lost, the state loses revenue, which in turn destabilizes society as a whole. In this way, politics has harnessed itself to the cart of the private sector.
Economic growth has become a dogma that gives corporations too much power. The large corporations have the longer leverage. They can simply threaten governments with layoffs, plant closures or relocation if, for example, tax laws or environmental protection requirements don’t suit them.
The consequences of this entanglement are a danger to the environment and to democracy. Politics has become the extended arm of the economy. The state is walking a dangerous tightrope, balancing between social responsibility and economic coercion. By bailing out risk-taking banks and ailing corporations, it is interfering with the private sector and neglecting its obligation to its citizens to ensure a fair and sustainable distribution of wealth.
What we need is enlightened capitalism! The economy must be tamed so that it actually serves the common good. We must finally start thinking beyond the day-to-day business of realpolitik. We need to break away from the primacy of growth, which is pushing the environment and people ever further to the limits of their resilience. We need new models for a sustainable and equitable economy that no longer primarily serves the interests of small, privileged groups.
Module 2 – Economic Program
Competitive Economic Environment
The environment of all economic activity needs to facilitate resilience and competition, and to stimulate and enforce transparency. This incentivises social progress in a sustainable, fair, and democratic way. Pirates aim to protect individuals, preserve opportunities, promote individual autonomy and well-being by dispersing and de-concentrating public and private power. Competitive markets provide a fertile ground for entrepreneurship. Competition policy should aim to prevent excessive market concentration and monopolistic practices which pose barriers for new businesses to enter markets. Facilitating opportunities for entrepreneurship, including SMEs (Small and medium-sized enterprises) and Start-ups, leads to job creation, innovation, and economic dynamism, contributing to overall prosperity. An effective competition standard should look beyond consumer welfare, and be science-based. Rather than needing to sanction the abuse of a dominant position, competition policy should focus more on prevention of market power. Competition enforcement agencies should be adequately resourced, get institutional support, and a legal mandate. Ideally the competition authority must be independent and shielded from direct political interference.
Pirates believe that trade and cooperation is a way towards development and shared wealth. However, we see a lot of challenges in the current trade environment. At the same time, trade agreements have been abused in the past to empower private entities at the expense of public courts, exploit communities and promote nepotism and cronysm.
We propose basic principles that we will uphold regarding international trade. Considering trade treaties, the European Parliament must ratify the treaty and the treaty must be negotiated as transparently as possible, including public hearings and comprehensive access to information. Trade should be enlarging our markets and allowing more competition, therefore trade agreements should not give out more or less hidden special favours. The ultimate goal of international trade agreements is the positive development of all involved parties. Therefore, we need to always ask for at least the most basic working standards to be upheld by our trade partners and enforce paying up for common externalities damaging us all through carbon border adjustment mechanism and similar tools.
Trade is also an economical and political tool. We support economic sanctions against authoritarian regimes, especially the regimes that are actively undermining European security and commiting crimes against humanity. These sanctions should be precisely targeted to damage the wealth of the governemnt elites, hinder the offensive and persecuting capacities of those regimes and to avoid suffering of the common citizens as much as possible. We should not supply weapons and surveillance technologies to authoritarian regimes.
Last years have also seen a surge in protectionism and closing of free trade in critical technological areas like microchips or renewable energy technologies. We do believe that Europe should attain highest possible level of strategic autonomy concerning these and the need to reduce our overdependence on authoritarian regimes. Way to get that autonomy and prosperity is through trade with new partners, research, technological excellence and cooperation. Trade wars have repeatedly proven themselves detrimental.
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. To facilitate this, tax harmonization across European jurisdictions should be further developed. This should include targeting strategic capital allocation for tax avoidance, and intentional obscuring of corporate structure (incl. public entities). We should focus 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). We will support global coordination on taxation, particularly in questions of international corporations.
An addendum as module 3a & 3b in case this section is not included in the CEEP trade program :
3A.: Tax on Kerosine to ensure fair competition between means of transportation.
3B.: Tax on stock buybacks. Current income tax avoidance tool.
Financial Markets and Multinational Corporations
Regulation, supervision, and taxation of the financial markets should encourage investment into long-term development strategies which are environmentally and socially sustainable. The environment should deter financial dominance, capital concentration, and for-profit short-term reallocation (e.g., buy-backs). Speculative investments should bear heighten disincentives and should be more transparent.
European Budgetary Rules
Budgetary policy is an essential tool of economic policy. The current budgetary rules are targeted on preventing budgetary deficits and prevent members states to react in times of crisis.
We propose to discard and replace them with long term budget sustainability assessments, and to prevent excessive budgetary imbalances.
This will allow member states to implement investment policies in spite of the defense, environmental and social challenges of our time, as well as encourage the balancing of their savings and consumption which will foster a dynamic internal market.
European Economic Integration
The next steps of European economic integration should 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.
We as Pirates see the potential of crypto assets and that they may have a positive role in economic development. We want to protect cash for its anonymity including digital cash.
Additional justification for using cryptocurrencies by Bastian:
Leaving your money in your account or savings book is not a good idea either. Legally, the money in your account does not belong to you, but to the bank. In principle, you are giving the bank a free loan. Only when you withdraw the money are you officially the owner.
Moreover, both the bank and the state can easily access the money in your account. Even if your bank were to go bust, you would quickly be rid of the money in your account. What’s the alternative? Put your money in a crypto wallet, there it is your property. Even in an emergency, the bank is not allowed to access it.