Undermining sovereignty
According to certain political elites, Europe’s economy is facing a “state of emergency” due to sanctions against the Russian Federation, energy crisis, the trade war with China and the United States, Trump’s tariffs rhetoric – not to forget the ongoing debt crisis in many of the Member States. This is why they call for “a strong sign of unity” within the EU. As to these elites, the creation of a Capital Markets Union and a 28th
regime, a single set of rules for companies, should be such a strong sign of unity.
The President of the European Commission as well as many lobbyists and economic experts agree that completing the single market could overcome the current fragmentation; and that simplified regulation could lead to a significant increase in investment.
However, it has to be stressed, that the close interaction between the ECB and the Commission, as can be observed in this case again, has been highly problematic for years: the Commission’s competences are constantly being exceeded, for example in the areas of monetary and fiscal policy, in foreign or energy policy. This is justified by “emergencies”; for example, the emergency clause has been systematically abused by the Commission in the area of energy policy in order to undermine the Member States’ reservations regarding sovereignty in the area of energy policy. In practice, more and more competences are thus being transferred to the executive, the Commission.
De facto, the Commission’s approach is – again – tantamount to an attempted coup – if the Member States were functioning, they could put a stop to it immediately by tabling a motion of censure against the Commission.
Conclusion
The Commission’s plan for a 28th regime will harm Europe and its economy in two ways: on the one hand, it will weaken the Member States (especially those that do not belong to the Eurozone) because their tax and monetary competences are undermined; on the other hand, it will become even easier to buy European companies or acquire a majority stake in them.
The BRICS are leading the way for Europe by gradually making themselves independent of the dollar and the US-controlled SWIFT system. However, the approach being pushed now by the Commission is exactly the opposite: it damages Europe and its economy through this 28th regime because Europe will remain dependent on the dollar and the SWIFT system!
How will Europe be able to compete with the US if this form of financial integration continues? The US rejects any form of uniform taxation of global corporations – Donald Trump has made this immediately and unequivocally clear. So, if the US lowers corporate taxes for competitive reasons, Europe has no choice but to do the same.
The more pressure there is on the dollar as a reserve currency and on the SWIFT system, the more aggressive the US reaction will be – especially when it comes to Europe. This should be clear to all Member States, when discussing whether or not support the 28th regime.
The Valdai Discussion Club was established in 2004. It is named after Lake Valdai, which is located close to Veliky Novgorod, where the Club’s first meeting took place.
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