The parties’ election agendas/ 5: The Green Deal amid change agendas, investment races, and taxes on the wealthiest

Brussels – Economy, jobs, taxes. A topic as sensitive as it is central to the actions of any government and any political force campaigning for votes and consensus. The green economy and, more specifically, the European Green Deal bring everyone together in the debate accompanying the vote in early June. From right to left of the political spectrum, the sustainability agenda is the starting point for the next legislature. Some propose an EMS to finance the sustainable transition, others new Eurobonds or farmer-friendly changes. However, what stands out is the change of course within the EPP.

The EPP between reviewing the Green Deal and new industrial strategies

The main ingredient of the European People’s Party’s economic recipe is remodeling the Green Deal. In its Manifesto for the 2024 European elections, the EPP emphasizes the “need for a policy that is not clouded by misguided ideology, but rather rests on solid factual grounds and social responsibility.” In other words, “we must balance the different interests in our economy, society, and environment, recognizing the challenges of the global economy, climate change, and the changing demographic realities of our continent.” The party that supported Ursula von der Leyen as president of the EU Commission these past five years is the same that is campaigning against her as a candidate for a second term.

The economic program of what should be confirmed as the first party in the EU includes a business-supportive tax policy, even though there are no specifics. A “tax-friendly and business-supportive Europe” could take several forms, left to the post-vote in early June. Then, there is the promise to improve and revitalize Europe’s single market since “Europe’s economic performance depends on its success.”  The Competitiveness Strategy for Europe and the Investment Plan for Quality Jobs are at the core of the EPP’s commitment. The former aims to revitalize the entrepreneurial spirit in Europe, the latter to invest in research and development. For the former, the intention is to establish a system for vetting legislative proposals before they are submitted, and for the latter, to convince governments to combine public-private investments amounting to 4 percent of GDP. The real crux, however, is reorganizing the College of Commissioners with a specific one for SMEs and less bureaucracy.

PES: ‘No’ to austerity, ‘yes’ to taxing big business

Socialists (PES) are clear and concise in their Manifesto. “We say no to austerity,” the document reads. “We say yes to protecting workers from crises, to regulating the financial markets, to combating speculation.” All this results in the proposal for a permanent European unemployment support mechanism along the lines of the SURE anti-pandemic program that bore its fruits. The commitment is far from the lines of the EPP of Ursula von der Leyen, EU Commission President and candidate, who rejected the launch of a similar ‘job-saving’ mechanism.

 The Green Deal is not on the table. However, the green agenda aligns social policies with green policies, primarily meaning combating energy poverty and high utility bills, energy supply to the most vulnerable, and a commitment to an energy market reform to ensure price stability and affordability. 

Finally, the socialists intend to play the role of the contemporary Robin Hood by taxing the rich and protecting the less well-off for a tax justice functional to social equity. “Large corporations, big polluters, and the ultra-rich must pay their fair share in Europe and around the world through effective taxes on corporations, windfall profits, capital, financial transactions and the wealthiest individuals,” the Manifesto says.

Renew Europe, watchword: investment

European Liberals (RE, Renew Europe) build their campaign on the economy and economic agenda on investments to revive Europe’s economic engine. “The next Commission must be an ‘Investment Commission‘” is the passage and the key pledge of the party program. It means attention to spending on research, development, innovation, and human capital formation, but it also means creating the right conditions to attract private investment. The key to renewed competitiveness comes through talent attraction and quality jobs. 

Looking at the primary sector, the liberals wink at farmers by promising an overhaul of the Green Deal in a way that is more tailored to the needs of industry players. These include reducing excise taxes on renewable fuels, such as biogas, and increasing the ‘de minimis’ threshold for state aid to agriculture. For the medium- to long-term, on the other hand, voting Renew in the next election would mean having those who will push to have the next Commission present a cost-benefit analysis of the cumulative requirements for the EU agricultural sector deriving from environmental and health legislation, in addition to developing “a major financial plan” for the transition to a sustainable and competitive agriculture and food system, identifying funding gaps and mobilizing the necessary public and private funding.

Greens: away with old Maastricht parameters, room for more European green bonds

Green, because the Green Deal cannot  be touched. But also red because the basic reference of the common budgetary rules are obsolete and need to be changed. The European Greens present citizen-voters with a Manifesto that pushes even more explicitly to the left than the Socialists. “We will revise the arbitrary limits of the Maastricht Criteria and the Stability and Growth Pact,” the Manifesto says.A pledge that gives a shove to the EPP that, based on that criteria, built the reform of the Pact and to the PES, which failed to change it.

 The Maastricht criteria set government spending limits, with the deficit that cannot exceed 3 percent of GDP and debt 60% of GDP. The promise of the Greens is one that can gain consensus, but at the same time one that is difficult to achieve, since the parameters in question are embedded in the Treaties on the functioning of the EU, the amendment of which requires unanimity of the member states and a long and tortuous path.

 The Greens propose a new macroeconomic governance “that prioritizes quality investment in public goods and the green transition over the outdated growth-at-any-cost paradigm to avoid further crises and their social consequences.” It also gives space to the green economy. Here, the Greens will push for a Green and Social Transition Fund equivalent to at least 1 percent of EU GDP annually, financed primarily by joint borrowing at the Union level. It givers room to European green bonds and the completion of the banking union. Greens push for the launch of a deposit guarantee scheme, which has stalled for years.

ECR:  fiscal sovereignty and the revitalization of the ‘Made in’

The European Conservatives (ECR) are not hiding: “We stand firm in our belief that the internal combustion engine, a testament to the power of European creativity and ingenuity, can remain commercially viable for years to come by embracing cutting-edge technology and investing in ground-breaking research on alternative low-emission fuels” An excerpt from the party’s Manifesto which far from a Green Deal that is to be revised in the name of at least one particular industrial sector. It seeks a European pact with industry, to which it promises that the ECR “will support research and technological innovation and propose strategies in agreement with companies and not against them.”

More broadly, the ECR’s primary goal in the economic sphere is to “revitalize industrial policy” through a greater focus on small and medium-sized enterprises and more attention to the technology (artificial intelligence) and the telecommunications (5G and 6G networks) sectors. All this through “freedom of enterprise for every citizen, while preserving the fiscal autonomy of member states and non-interference in taxation matters.”

Last but not least, the national model cannot but defend ‘Made in’. Recites the ECR Manifesto, “We also want to safeguard and advance our unique identity in a globalized world by preserving and promoting traditional artisanal skills and methods.

The Left for a Permanent Recovery and the ESM in Support of the Green Deal

The economic program of The Left party proposes using the European Stability Mechanism (ESM) to finance housing renovation and energy efficiency measures in compliance with the Green Deal goals, to relieve households from the costs. Speaking of burdens, it also proposes to abolish the Stability Pact with its austerity, for a new ‘social and environmental restructuring pact. Another central point: the Recovery Fund should become a permanent mechanism to stimulate growth and investment.

 In the party Manifesto there is a very clear, and very left-wing tax program. It proposes the introduction of a withholding tax on the profits of multinational corporations and banks, and resuming work on a financial transaction tax. It also calls for a simultaneous double measure against web giants and politics, by proposing a progressive ‘cloud tax’ on digital platform revenues, covering corporate and political party spending on social media.

That’s not all: the program pushes for a directive that introduces mandatory minimum income that would “cover the basic needs for a decent life” such as food, housing, energy, welfare, access to culture, emergency funds. Also in the area of labor policies, it calls for a reduction in working hours and the inclusion of immigrants “on equal terms” in wages and labor. While on spending, it calls to allocate 7 percent of GDP for education and a 2 percent of GDP for culture.