March 2005March 2005
.We submit the following proposals for discussion as our contribution to the formation of the final proposal for the replacement of the Stability Pact by a new European Agreement for sustainable development, social protection and full employment.
A gradual increase of the EU Budget to 5% of the Gross National Product (GNP) of the EU. The primary aim of this proposal is to fund economic and social convergence of the country-members, taking into account the new needs that have been brought about by the EU’s enlargement.
EU monetary policy to be formed by the Council of Economics Ministers in co-operation with the European Central Bank, with the primary aim of promotion of development and full employment in the EU and not just to combat inflation.
The formation of a European Programme of public investment, which will be financed on favourable terms by the European Investment Bank, equal to at least 1% of the European Union GNP. The primary target of this programme should be the promotion of development in the EU, the improvement of infrastructure and the ecological reformation of various sectors of the European economy, including the energy sector.
The gradual establishment of a minimum level of social services, labour rights, and income covering the whole of Europe, adjusted to each member - country’s GNP in relation to the EU average. It is, of course, understood that in countries where the existing social, labour and income safeguards are higher than the minimum ones they will be strictly observed and improved. The target of this effort is to avoid the practice of “social dumping” which is followed today, to combat social inequalities and poverty and to gradually converge the levels of social services, labour rights and incomes to a higher basis than the one existing today, parallel to economic and social convergence.
The gradual establishment of a common, relatively high, level of tax on the profits of corporations throughout Europe (e.g. above 40%), which could be brought about by negotiation. For member - countries with a GNP that is lower than 75% of the EU average, this level of tax could be at most 10% below the common European tax level. This measure aims at avoiding the existing “tax dumping” in favour of corporations profits, the strengthening of State income so that it can carry out its social policies and the gradual harmonization of the corporations tax denominator to a higher level than it stands today throughout Europe, parallel to the social and economic convergence. At the same time, we propose strict measures for the abolition of the corporations’ ability to pay fewer taxes by taking advantage of offshore companies. This move should be taken together with strict measures against “money laundering” through the same companies.
Establishment of a special tax of 0.1% (Tobin tax) on speculative, non-productive capital movement to and from the EU. The resulting income could be used to increase the EU resources and be put to good use for the enhancement of social policies, ecological protection within the EU and humanitarian aid to the third world.
The obligation of the EU member countries to contribute 0.7% of their GNP as aid to the third world should be strictly monitored. Gradual increase of this aid to 1% of the member countries’ GNP. We propose that we should establish a similar percentage to be paid by countries worldwide. This of course would apply for countries with a certain minimum GNP.
The establishment and strict monitoring of the 35hour working week, without a reduction in salaries or an increase in employment flexibility, in all EU member countries, in the prospect of a further reduction of the working hours without a reduction in income. Parallel with the establishment of the 35hour working week it is necessary to take measures all over Europe to combat the precarious and flexible forms of employment.
The abolition of the arbitrary limits of 3% on the deficit and 60% on public debt, which is imposed by the Stability Pact as it is today. The possible deficit of one of the countries should be monitored by the Council of the Ministers of Economics, without arbitrary limits and after the proposal of a certain number of member countries. This control should be carried out on the basis of a variety of criteria which will deal with the GNP in relation to the EU average, the levels of social protection, employment, public sector investments, , growth rates, economic and social convergence, etc., which can come about as the result of meaningful negotiations on a new basis.