What should the EU be doing to improve the global competitiveness of Europe’s financial services and banking sector?
The EU’s first step to improve the global competitiveness of the financial sector must be to complete the internal market for financial services, with measures to encourage market integration matched by new efforts to protect consumer rights. The industry needs to develop more pan-European financial products to meet the demands of the EU’s increasingly mobile citizens. And the EU needs to create an adequate framework of supervision to ensure that these products are portable and recognised by all relevant regulators. Harmonisation on consumer protection must, however, respect the diversity of member states’ traditions and their varied legal systems.
The EU should also eradicate fiscal barriers to cross-border economic activity and prevent tax competition which creates obstacles to cross-border financial services. Further harmonisation of the tax base and more fiscal convergence would be a massive step forward in this regard. The EU’s competitiveness on global financial markets also depends critically on stronger transatlantic dialogue, although cooperation cannot increase at the expense of Europe’s tough regulatory goals, including high prudential standards, transparency and consumer rights.
Certain issues demand urgent attention, notably transparency for investors, markets and regulators, valuation standards and risk management in the financial sector. The EU, therefore, needs to bring forward specific regulatory proposals on hedge funds and private equity groups, rating agencies and supervision. And, in light of recent financial market turbulence, there should be an in-depth review of the problems on the inter-bank money markets and other related credit crises. We need to learn all the necessary lessons and lay the foundations for a more stable and secure EU financial market in future.
The EU has often been criticised for being too distant from its citizens. What would be your plan to bring the EU closer to its citizens?
The low turnout in the recent Romanian elections for the European Parliament – at just 29% of the voters - underlined how important it is to involve people in EU affairs. The EU is big, diverse and complex, which makes pan-European communications a tough nut to crack. All the different EU partners - politicians, governments and the Commission – need to do more to explain how the EU makes a difference to people’s daily lives. Commissioner Margot Wallström recently made an excellent start in improving EU communications with her Plan D − for debate, dialogue and democracy. We also have to find ways to make sure that Europe’s leaders and politicians listen to the people. And we have to stop the endless “blame game” between Brussels and national governments as it confuses everyone.
Many inter-institutional initiatives are underway to help the EU communicate better, which are all welcome. However, dialogue in Europe cannot become a set of institutional arrangements. Communications must be citizen-centred, empowering people and providing them with the information they need to vote meaningfully. MEPs have a critical role in this respect. It is up to each of us to translate the EU into something relevant to the day-to-day experience of our constituents. Here in the Socialist group, we are developing our website (www.socialistgroup.eu) to tell people about our work and to provide an interactive space for them to reach us. We also support the Party of European Socialists’ initiative to consult voters - for the first time ever - about the content of the European election manifesto (www.pes.org).
The EU is the biggest development and humanitarian aid donor in the world. What should Europe be doing to emphasise this?
As you say, the EU is the world's biggest spender on humanitarian and development aid. If you add together the resources provided by the EU and its 27 member states, the sums of money are very large indeed. A genuine common foreign policy would make this contribution even more valuable as well as more recognisable, and an EU High Representative could bring all this humanitarian and development support together into one effective policy.
With 2008 being the European Year of Intercultural Dialogue, what should its concrete aims be and how could they be achieved?
One of the most serious risks to the world right now is the idea that a “clash of civilisations” is inevitable and that the world's big religions and cultures cannot live together. It’s an argument that is being pushed by fundamentalists in the Islamic world and in the west. This kind of claim leads to armed conflict – even though it simply isn’t true. In fact, the opposite is correct. You enrich your own culture by learning from other people's cultures. In order to learn from others, you first have to learn about your own culture and be confident about your own identity. You also have to keep an open mind about other cultures, and be prepared to respect their values, rather than seeing them as a threat. That is the idea behind intercultural dialogue; it is a dialogue that brings peace and enrichment. It is the idea behind our unique European project and it’s an idea that’s worth exporting.
What timeframe do you see for EU enlargement in the Western Balkans? What are the main stumbling blocks and how should they be resolved?
The EU's presence in the western Balkans is significant and is, in part, a military presence. I would prefer not to need to have soldiers there. If Bosnia-Herzegovina, Macedonia and Serbia follow the path to EU integration, then we can start to replace those soldiers with construction workers. It is only a matter of time before countries in the western Balkans join the Union. Individual countries will decide for themselves about the pace of this process and each country’s application will be judged by the EU on its own merits. Croatia is already very close to joining, although at this stage nobody has a firm date. We need to offer all of the former Yugoslavia states the prospect of membership; indeed, the potential for accession has already had a stabilising effect throughout the region. However, it would be highly speculative to discuss a specific time-frame for this at the moment. And, in any case, the existing EU member states need to ratify the Treaty of Lisbon as the Union cannot take in any more new members under the present treaties. We have wasted enough time on institutional reform already.
Martin Schulz was interviewed for Europe’s World by journalist Simon Taylor. This section is supported by the Socialist Group (http://www.socialistgroup.eu)