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Olaf Scholz: To­geth­er for Eu­rope’s re­cov­ery

In different European newspapers – Le Figaro, La Repubblica, El Pais, Ta Nea, Expresso, Gazeta Wyborcza, Le Soir and Die Welt – Federal Minister of Finance Olaf Scholz outlined the main challenges and most important tasks of Germany’s Presidency of the Council of the European Union.

Olaf Scholz: Together for Europe’s recovery
Source:  © Bundesministerium der Finanzen
  • Date 8 July 2020

Germany’s European Council Presidency began a few days ago under the headline “Together for Europe’s recovery” (Gemeinsam. Europa wieder stark machen./Tous ensemble pour relancer l’Europe). These are not “normal” times: The world is experiencing the twenty-first century’s first global health crisis. In Europe alone, over 140,000 people have died of the virus, or while infected with it. The economic and social fallout from the pandemic will affect each and every one of us.


Crises can make or break a community. But being there for each other in times of need is at the heart of the principle of solidarity that is the foundation of the European Union. If crises put communities to the test, then Europe has passed this test: In the EU, more mutual assistance was provided between its members than in any other region in the world. Hundreds of critically ill patients were flown to EUneighbours for treatment, while thousands of tonnes of medical supplies were shared among EU members. And when the first effects of the crisis hit the financial markets, we finance ministers responded forcefully and in record time, deploying a threefold safety net worth over half a trillion euro to protect employees, businesses and households. This meant that, very early on, we were able to avert another financial crisis that could have had the potential to divide us both politically and economically.
But while we may have surmounted the immediate crisis together, the real test is yet to come: Europe is now experiencing the worst recession since the end of World War II. The economic foundation of our prosperity is the internal market, which in turn relies on the political foundation that all member states must benefit from the internal market. If we want to keep it this way, the member states hardest hit by the pandemic must also put the economic crisis behind them. A lasting economic division would also have consequences for political cohesion in Europe.


This is why, a few weeks ago, Germany teamed up with France to propose an unprecedented European recovery fund worth 500 billion euro. The European Commission has fleshed out this proposal and drafted a comprehensive recovery plan. Our goal is to finish the work necessary to reach final agreement on this plan under Germany’s Presidency and for funds to be available by the start of 2021. Germany is prepared to do its part to smooth the way. At the same time, we are counting on the willingness of all member states to compromise and take bold political steps. Everyone will have to call their ‘red lines’ into question. But we will win popular acceptance throughout the EUonly if we use these funds to invest in measures that will make our economies more competitive, more resilient and more environmentally sustainable. Having jointly identified the reforms that are necessary in every single one of our countries, we must tackle those reforms as partners. This also includes modernising the EUbudget, which in future will have to play a greater role in promoting the digital, climate-friendly transformation of our economies.


Furthermore, we will have to plan beyond crisis management and identify where Europe needs to become more resilient and independent. We must think about ways to tie up some of the loose ends that have faded into the background somewhat while we have been focusing on the Covid-19 epidemic. These include: completing the Banking Union, with uniform rules for the European financial sector; making further progress on the Capital Markets Union in order to enable genuine European cross-border financial transactions; and implementing long-discussed reforms to the European Stability Mechanism in order to strengthen its effectiveness and impact. This also includes creating a secure environment for using digital technology more widely in the financial sector, building a competitive financial market for cryptocurrency-based financial services and putting an effective EUsupervisory structure in place to monitor money laundering. All of these are additional important components of a fiscal union.


Over the coming six months, we will be discussing how to handle the pandemic’s effects on national budgets in a way that is fair and responsible. This makes the issue of ensuring the fair, effective taxation of international companies all the more urgent. The pandemic has shown particularly starkly how important it is to have a robust welfare state. This is why we cannot allow such companies to avoid their tax obligations. We want to reach an international compromise in negotiations to reform the principles of international taxation. This includes reaching a compromise on an effective minimum tax.


We will be tackling all of these issues in the spirit of European solidarity and sovereignty. Our goal is a strong Europe. Let us emerge from this crisis more politically united than when it started.