Debate about EU summit: growth, tax evasion and Schengen

The need to tackle tax evasion at a time when the EU shows signs of turning the corner on the debt crisis was highlighted during Tuesday's Plenary debate on the EU summit of 1-2 March. The debate, in the presence of European Council and Commission presidents Herman Van Rompuy and José Manuel Barroso, also focussed on the situation in Greece and recent French comments on a possible renegotiation of the Schengen agreement on passport free travel.

Council President Herman Van Rompuy called  the last EU summit meeting a positive step forward towards further fiscal consolidation and economic stability. Although the biggest fiscal stimulus since the 1930s had been an efficient tool for short term recovery, overcoming the crisis would require creating trust in the long-term structure of the European economy. "That's why the rules agreed in the new treaty of Stability Coordination and Governance signed at this European Council are so important," he said. Mr Van Rompuy also stressed the importance of investing.

EC President  José Manuel Barroso said the EU was not yet out of the crisis but may be on a path towards renewed stability and growth. He added that the €1 trillion lost to tax evasion in the EU each year could have solved many problems. On Greece, Mr Barroso announced that the Commission would soon present a plan on growth and jobs for that country. He aksi said austerity needed to be complemented by growth and called on governments to implement the EU 2020 strategy: "Member states must close the gap between declarations and policies."

Joseph Daul, the French chair of the Christian-Democrat group, said that although signing the new fiscal treaty was an achievement, it would be more important to actually apply it. The new fiscal treaty, six pack and two pack are useful tools, but some member states have been slow to apply the rules they have signed up to. "Citizens today need jobs, young people need jobs, our economy needs growth not just now but all the way to the future," he said.

Hannes Swoboda, the Austrian chair of the Social-Democrat group, concentrated on Schengen, saying: "I would like to have some words about what president Sarkozy said about temporally suspending  the EU's document-free travel agreement. Should we have to show our passports to visit Strasbourg? Is this the way that things have to be? Surely, it is not." He also commented on the crisis: "We react too late to youth unemployment. It is scandalous that we have people emigrating to Argentina. It is a scandalous too that we have citizens working for a one thousand euros or less."

Guy Verhofstadt, the Belgian chair of the Liberal-Democrat group,  was sceptical about whether the recent summit was a turning point of the crisis in Europe. "Do you really believe that the fiscal compact will put an end to the mess," he said. Mr Verhofstadt also criticised European Central Bank president Mario Draghi for "printing new money", which he described as an "insufficient solution to the crisis" and called for a redemption fund mutualising debt over 60% of GDP, which he considered as the only true long-term measure to stabilise the economy.

Combating tax evasion and tax havens by forcing banks to declare all deposits by EU citizens if they are to operate in the EU, as the US has done, was proposed by the French Green co-chair Daniel Cohn-Bendit. He also called for a "triple golden rule" in the EU that will cover not only budgetary discipline but will also be "a social and environmental golden rule".

Martin Callanan, the British chair of the European Conservatives and Reformists Group, disputed that  the worst of the crisis was over. "Europe is not ok, the economic weakness is the problem and the new (fiscal) treaty is simply irrelevant." He also talked of a "collapse in living standards and levels of unemployment unseen in Europe since the 1930s. Measures are required so that Greece can organise an orderly default and leave the euro."  

Paul Murphy, Irish member of the Confederal Group of the European United Left - Nordic Green Left, said:  "Trying to meet fiscal deficit targets means €5.7 billion in extra cuts and taxes in Ireland and more than ten billion across the euro zone. It doesn’t mean growth, it means more unemployed, more crisis, worse public services and worse work conditions."

Nigel Farage, co-chair of the Europe of the freedom and democracy Group, said he was shocked by talk about how positive the last Council meeting was. "You are determined but delusional, to keep the euro propped up". When commenting on Greece and talk of a potential third bailout, he said: "It is going to crucify Greece."