The representatives of the regions and the cities know better what the EU needs on migration, trade, poverty and taxation

‘RegioStars’ Awards ceremony 2015. The RegioStars awards honor Europe’s most inspirational and innovative regional projects supported by EU Cohesion Policy Funds. An independent RegioStars Awards Jury, chaired by Lambert Van Nistelrooij, Member of the EP, selected 17 finalists from 143 entries and four winners. From left to right: Lambert van Nistelrooij, Jakub Adamowicz, Spokesperson of the European Commission, Corina Creţu, Member of the EC in charge of Regional Policy and Giulia Veneziano, Italian winner of RegioStars 2015 in the category 3: Inclusive Growth – Diritti a scuola. (EC Audiovisual Services, 13/10/2015, Location: Brussels – Palais des Beaux-Arts. © European Union, 2015 / Source: EC – Audiovisual Service ,Shimera / Photo: Jacquemart Jennifer).

The 115th plenary of the European Committee of the Regions (CoR) was convened on 3 and 4 December and discussed a number of burning issues, which have been haunting the European Union during the last difficult years. The CoR is the voice of regions and cities of the European Union. Its 350 members are the regionally and locally elected representatives from the 28 EU countries. In their last plenary, among other things, they touched on the hot topics of refugee relocation and border controls, the multilateral Trade in Services Agreement (TiSA), the social inequalities and in-work poverty and the ‘sharing economy’.

The CoR genuinely represents the peoples of the regions and cities of the 28 EU member states and the Committee’s opinions carry a special political weight in the process of formulating the EU policies, as the Treaties foresee it. Obviously, the 350 elected representatives of the Committee are closely involved in the everyday life of the local and regional societies and in this capacity they constitute a direct receiver-transmitter of the real problems of people. This became apparent in the case of the immigration topic.

The immigration and refugee issue

Starting from the currently No 1 predicament of Europe, the immigration and refugee issue, the CoR had a long deliberation on it before formulating an opinion. Actually, Dimitris Avramopoulos, European Commissioner for Migration, Home Affairs and Citizenship, was present and participated in this discussion. According to the CoR Press release the plenary gave “broad political backing to the European Commission’s European Agenda for Migration”. However the feeling from the debate was a bit different.

A number of representatives stressed that the crucial role of Europe’s local and regional authorities in addressing the immediate and long-term challenges posed by the arrival of large numbers of refugees and migrants needs to be more fully reflected in EU policies. The mood in the plenary was that the local and the regional authorities, which are currently confronted on the spot with the waves of immigrants and refugees (as in Lesbos), have not been adequately supported neither seriously consulted about the tactical action and the strategy to be followed on national and European levels.

The CoR rapporteur, François Decoster, was adamant: “Inevitably, we have had long, sometimes heated debates in the CoR about what policies the EU’s institutions should pursue. But the process has also produced a very clear political consensus that the EU needs to be more involved in managing and responding to migration, and that we must establish a robust migration system that is fair to all. Across Europe, local and regional governments are given too little political say, too little funding and too little backing. That must change.” Then the plenary had to tackle another key topic, the “Trade in Services Agreement”.

The “Trade in Services Agreement”

Now, concerning this topic, the European Committee of the Regions’ plenary session adopted on 4th December a groundbreaking opinion on the local and regional perspective of the multilateral Trade in Services Agreement (TiSA), which aims at liberalizing services such as banking, healthcare and transport. Given the thorny character of this issue, the CoR plenary appeared reserved. The local leaders called for “more transparency in the negotiations, for a better safeguard of their right to regulate public services and for the preservation of EU social protection standards”.

Helmuth Markov (DE/PES), Minister for Justice, Europe and Consumer Protection of Brandenburg, the rapporteur, who formulated the CoR opinion argued that “a legitimate outcome of the negotiations on the TiSA can only be achieved if all stakeholders are involved”. In this way Markov authentically expressed the strong reservations of his colleagues.

The local and regional leaders are evidently skeptical about the fact that the negotiations about TiSA are conducted centrally by Brussels. That’s why they feel that the negotiators may underestimate the possible negative effects of TiSA on the everyday life of Europeans and could even interfere in the way the European city and regional service sectors are functioning. Finance and Transports may be important cases of that. The CoR concluded that transparency is needed in the negotiations and demanded that the regional and local government must have a say in the talks.

Fair wages and poverty in work

On 3 December the CoRs’ plenary also expressed concern about the underestimation of the growth and competitiveness potential that a fair level of wages may have in the economy. A number of leading economists and commentators have confirmed that the incomes inequality and poverty in work which currently prevail, have strong negative effects on economic growth. The representatives of CoR joined this line of thinking and concluded that a fair level of wages for all workers in the European Union can fight poverty, stabilize the economy and boost competitiveness and growth.

The rapporteur on this issue was Mick Antoniw, Member of the Welsh Assembly for Pontypridd. He concluded that “…the CoR recommends to the member states to adopt an indicative fair wage, geared towards the use of 60% of median wage as a benchmark and based on reference budgets, which are a package of goods and services an individual needs to live at a decent level”.

Corporate tax avoidance

The CoR plenary touched on the hot topic of corporate tax avoidance as well. The local and regional leaders called for a fair and efficient corporate tax system in the European Union. They criticized the complexity of the corporate taxation systems, which disadvantage the small businesses. They called for a common consolidated corporate tax base in Europe, to fight tax fraud, tax avoidance and harmful ‘tax competition’ amongst member states and regions. It’s a matter of fact that many EU member states and regions offer tax incentives to investors. If this tendency is left unchecked everybody would end up in a worse position as far as tax collection is concerned.

The opinion of the CoR plenary was drafted by Jean-Luc Vanraes (BE/ALDE), member of Uccle Municipal Council. He observed that ”OECD studies show that multinational companies are using strategies that enable them to pay not more than 5% in corporate tax while smaller companies are paying more than 30%. This leads to an estimated annual loss of €1000 billion potential tax receipts in the European Union because of tax avoidance, tax fraud and aggressive tax planning, and harms public finances at all political levels”.

All in all, the opinions adopted by the last CoR plenary on the above issues portray a deep awareness of what is happening in the everyday economic and social life in the regions and the cities of the EU. Through the CoR, its participating representatives, the 350 elected local leaders, are generously passing on this knowledge to the decision making bodies of the EU. Unfortunately, it seems that the EU decision makers seem constrained by other, sometimes slightly gray determinants, and the CoR 50 opinions produced yearly are grossly sidestepped.