FEN Network: Fair taxation and economic governance are essential for a real EU recovery

27/01/2021

PES FEN meeting by videoconference

PES FEN meeting by videoconference

An in-depth reassessment of European taxation and economic governance is essential for the EU’s recovery from the devastating economic and social consequences of the COVID-19 pandemic, the PES Financial and Economic Network said today.

Convening by videoconference, MEPs, MPs and representatives of NGOs met to discuss tax justice and fair economic governance.

PES Financial and Economic Network Chair and President of FEPS, Maria Joao Rodrigues, said:

“Europe urgently needs ambitious and creative taxation systems which strengthen our welfare states, so they can meet citizens’ needs now and in the future. Social inequalities are already too high, economic projections are dire, citizens fear more than ever for their future. It is our duty as a political family to defend them and make sure that their hope and trust in society is reinstated. New approaches are badly needed. Policies must catch up with the transitions our planet and our societies are experiencing, and fairness and equality must become the foundation of all national tax systems. COVID-19 has put national budgets under a lot of stress. Taxation is not the answer to recovery, but it can be the bedrock for a sustainable recovery based on fair, reciprocal societies.”

On economic governance, Maria Joao Rodrigues added:

“To flourish, the economy requires fair economic governance, not austerity. We are not talking about rewriting fiscal rules, we are focused on strengthening them, so they reflect the short term and long-term economic circumstances, monetary trends, and societal needs. As always, investment has a key role to play, but to make the most of it investment needs to be coupled with bold fiscal and social policy to ensure sustainability, equality and wellbeing for all.

“I thank President of the PES Group in the Committee of the Regions, Christophe Rouillon, for the work the PES has been doing to highlight the need for fair economic governance at this vital moment. I would also like to thank S&D MEP Margarida Marques for sharing her thoughts and ideas on the revision of the fiscal rules and her upcoming work on the file. Once again, socialists and democrats are leading the charge for a fair and sustainable recovery.”

While the COVID-19 vaccine has brought hope, a return to pre-pandemic life does not mean an immediate return to business as usual. It will be a process that will take time. The catastrophic effects of the virus underline why a well-functioning welfare state - funded by a just tax system – is so important. Europe’s socialists and democrats believe everyone must pay their fair share. The Network discussed progressive tax policies including wealth, environmental, digital, corporate and data taxes.

At the EU level, Commissioner for Economy Paolo Gentiloni continues to push for fair digital taxation and for strong action against aggressive tax planning, and Commission Executive Vice-President Frans Timmermans has backed taxes on pollution as a way to meet our green objectives.

The Network also discussed Europe’s economic governance and policies for a sustainable recovery. While lockdowns persist, the financial burden on the real economy, SMEs and citizens intensifies. The Network reiterated the need to prioritise investment, the UN Sustainable Development Goals, and put the needs of those most affected first.

The PES is currently consolidating the position of the socialist and democratic family into a brochure on tax justice which will be published later this year.