27 September 2017

InFacts: What Macron’s speech means for Brexit

French President Emmanuel Macron set out sweeping ambitions for much closer European integration after Brexit and said he hoped the UK would eventually find its own place in “a refounded Europe”.

EU leaders cannot afford to stand still and watch Euroscepticism and nationalism gain ground but must seize back the initiative with bold steps to strengthen unity.

Here are five takeaways from the French leader’s 100-minute speech that are relevant to Britain’s relationship with the EU – whether it quits, as planned, or ultimately finds some way of staying in the club.

Eurozone as vanguard

Macron doubled down on his call for a finance minister and a common budget for the 19-nation eurozone, which he said should be funded by new European digital and environmental taxes and a harmonized Europe-wide corporation tax. The proceeds would fund joint investments and act as a shock-absorber in crises. He rejected criticism that a more integrated eurozone would leave EU countries that are not in the monetary union as second-class members, saying all would eventually benefit when they joined the single currency.

Social and tax harmonisation

Denouncing a “race to the bottom” in labour costs and taxation that had caused a public backlash, he said the EU should set minimum and maximum rates for corporation tax on a harmonised base. Ireland and the UK have long opposed this and favoured tax competition. Any country that did not apply the minimum rate should be excluded from receiving EU structural funds for economic development in the next long-term budget after 2020. To combat “social dumping”, posted workers from other EU states should have to pay social security charges at the rate of their host country, but the proceeds would revert to their home country. That would remove a key cost incentive to employ posted workers from cheap-labour eastern countries.

European defence

Macron proposed creating a multinational European intervention force to fight terrorism, with a common defence budget and a common military doctrine by the start of the next decade, saying Europe needed its autonomous military capabilities complementary with NATO in the light of what he called the “gradual and inevitable disengagement of the United States”. He also called for a European academy to train intelligence agents and promote cooperation among EU countries’ security services.

Trade protection

In the most Gallic part of his speech, Macron called for a carbon tax on imports into the EU to level the playing field between high European environmental standards and lower standards in producer countries. He also called for the creating of a European trade prosecutor to investigate whether third countries respected the principle of reciprocity in agreements with the EU.

Don’t mention Brexit

Macron said he had deliberately not mentioned Brexit in his ambitious speech but he hoped that the UK would eventually “find its place” in a multispeed Europe in a few years’ time. He made clear he expected that place to be outside the current EU, proposing that Britain’s 73 seats in the European Parliament should be used in 2019 to elect transnational European lists of candidates, rather than redistributing them among the 27 remaining member states.

Full article on InFacts

Related articles:

EurActiv: Macron relaunches financial transaction tax project, including the UK

EurActiv: The time is right for a stronger monetary union – with everyone on board

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