Newsletter n.8/2020 - Coronavirus in Italy: the extraordinary intervention of Europe

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To save itself, Europe must plan (and implement) a gradual federalist revolution
European Movement initiatives
Key documents
Charter of EU fundamental rights
The rights in Europe
Reading tips
Weekly agenda
Information campaign on Europe


 

To save itself, Europe must plan (and implement) a gradual federalist revolution
First step: the pre-federal budget

Today the attention of governments, European institutions and public opinion focuses anxiously on the daily problems caused by COVID 19.

Few remind that the third of the seventeen Sustainable Development Goals of 2015 concerns health and the action needed to combat epidemics caused by communicable diseases.

The short-term approach translates into a negative policy, unable to address and resolve the root causes of the problems to root them out and to create mechanisms capable of predicting and reducing the devastating impact of emergencies.

This is an approach that recalls George Bernard Shaw's warning: "For every complex problem there is a simple solution. Which is wrong". At the beginning of a week which will be largely dedicated to the economic solutions caused by COVID 19, we would like to draw attention to the apparently concrete and realistic nature of the set of measures that, frantically, the European institutions and national governments have elaborated*.

The ECB has decided - by majority - to create a European shield with the Pandemic Emergency Purchase Program (PEPP), which adds € 750 billion to the € 120 already planned and to the Quantitative Easing (QE) for the purchase of public and private bonds "in a flexible way ”over time and in relation with the quotas of the Member States (capital key).

The European Commission has proposed a 25 billion Coronavirus Response Investment Fund, the suspension of the Stability and Growth Pact with the activation of the safeguard clause and has rapidly approved a temporary framework for a flexible approach on State aid, divided into direct grants, tax breaks, guarantees for bank loans to companies, subsidized public loans to SMEs, safeguard for banks, export credit insurance, innovating with respect to a rigid ideology that had not suffered exceptions from the treaties of Rome onwards.

To these proposals and decisions, there are hypotheses of other more targeted measures, such as the allocation of slots at European airports ,or financial assistance to the Member States and countries that are negotiating accession, or the decision to leave Italy, the use of EUR 11 billion of uncommitted regional funds which we should have repaid at the end of the year, either the action of the EIB, or the endless debate on the role of the European Stability Mechanism (ESM), or the introduction of EUROBOND - or CORONAVIRUS BOND - on the example of those issued by China in early February.

Some of these proposals are immediately operational, but most of them will have to be approved by qualified majority or unanimously by the Council of Ministers of Economy and Finance or by the General Affairs Council and then by the European Parliament, meeting together in conference call and the second on the basis of an unpublished and questionable parliamentary voting procedure by email, or they will have to pass through the caudine gallows of the European Council (think of the EUROBOND hypothesis).

Some basic questions remain opened, such as the fate or interpretation of the whole system created after the crisis of 2008-2009 and founded on the Fiscal Compact, the Six Pack, the Two Pack and the European semester which now covers the whole financial year.

Some recall the method of the Marshall Plan (European Recovery Plan), which provided for a reconstruction period of Europe devastated by war, followed by structural interventions with a two-step action, for a total duration of four years and aids for 14 billion dollars. The plan had unnecessarily accompanied the US urge to use funding not to deal with emergencies, but to start a process of the European countries economy structural transformation.

COVID 19, which is already causing devastating effects of an economic and social nature, does not allow to act in two stages, favoring first the health action and postponing the start of an economic and social recovery program to the end of the emergency. Monetary measures alone are not effective unless they are accompanied by adequate fiscal and budgetary policies.

The recovery of sustainable growth passes, of necessity, through a fundamental reorientation of the EU and the Member States economic policies, in the framework of a project that explicitly defines the long-term objectives of economic, social and environmental evolution EU.

At the center of this project, the Multiannual Financial Framework (MFF) that the European Parliament requires for a double five-year term (5 + 5) must be placed to reach 2030 with a schedule that should have been consistent with the 2030 Agenda and the European Green Deal and which must now be linked to a new European Social and Health Deal.

Only a strong and credible budget can make it possible to guarantee European public goods that the States, devastated by the crisis, will not be able to guarantee for their citizens. To be strong and credible, the European budget must reach 2.5% of Europe's global GDP within five years - as was suggested in 1977 by the MacDougall Report - and, by 2030, 5% recommended by MacDougall himself and Emma Bonino and Marco De Andreis in their Federation Lite and on the basis of an autonomous tax capacity of the European Union.

According to the art. 311 of the Treaty on the Functioning of the European Union (TFEU), "the budget, without prejudice to other revenues, is financed entirely from own resources" and the Council with a decision adopted unanimously "lays down the provisions relating to the system of own resources" o it can "establish new categories of resources" after consulting the European Parliament and the European Council can decide unanimously ("passerelle clause") to authorize the Council to vote by qualified majority.

From 1970 to 1988, the European budget was financed by "own" resources - even if coming mainly from national budgets - which were then largely insufficient and paving the way for national contributions, which now cover most of the income and which prompted governments to erroneously judge the budget on the basis of the "fair return" principle.

On several occasions, the Commission first ("Communication on the financing of the Communities' budget" of 1978), then the European Parliament (in the Spinelli reports of 1981, Pfennig of 1984, Lamassoure of 2007, Deprez and Lewandowski of 2017) and finally the Group of work chaired by Mario Monti, have put forward proposals to reform the system of own resources and introduce real European taxes, all starting - with the exception of the Monti Group - from the principle that both can be adopted without changing the treaties, while in the European Convention on the future of Europe it was proposed to abolish the obligation of ratification by national parliaments.

EUROBONDs issued by the European Commission must be linked to the European budget and not to the ESM - just as in the States public debt securities are issued by the national treasury - and guaranteed by secure flows of future tax revenues (the Union's own resources) and from infrastructures financed by European loans, because the EUROBOND, unlike the project bonds or E-Bonds imagined by Giulio Tremonti and Jean Claude Juncker in 2010 to finance part of the national public debts and therefore current expenses, will have to serve to stimulate long lasting European investments.

To plan the first phase of the federalist revolution, the European Parliament must request the Von der Leyen Commission to withdraw the now useless and outdated Multiannual Financial Framework presented by Jean-Claude Juncker on 2 May 2018 and replace it with a new budget proposal, on the basis of art. 312 of the Treaty on the Functioning of the Union, which contains a European program of expenditure and revenue for socially sustainable growth by 2030 and an interinstitutional agreement to recognize the European Parliament's power of codecision on own resources.

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*All these measures and more are published on the website www.movimentoeuropeo.it


 

European Movement initiatives

European Union is facing an unprecedented moment of difficulty, as the regards health protection. There is no worse fear that the feeling than having to respond to the crisis on your own. If Europe does not intervene, as required by the treaties, by applying the principles of solidarity and by protecting the health of its citizens in a high way, the risk is that populist forces will increase their consensus. The European Movement in Italy has therefore joined the philosophers Roberto Castaldi and Daniel Innerarity appeal for "A European answer to the coronavirus threat" and of the Link Campus University entitled "The existence of Europe".

Numerous were the activities of the European Movement during the week. In the context of organization and future planning, the current crisis scenario reopens a very broad debate on the future of Europe and its institutional configuration. The current attention to the issue of health protection is accompanied - as stated by the member of the Presidency Council of the Movement, prof. Alberto Majocchi - the need to orient future policies in the sense of a "European social deal". To deal in detail with the reforms necessary for Europe, a renewed democratic participation, a rediscovery of the solidarity and cooperative value that led to the idea of uniting the European States, during the week Thursday 19, Friday 20 and Saturday 21 March some interesting meetings were held, with the partiticipation of the President, Pier Virgilio Dastoli.

Thursday and Friday, Eumans, with Marco Cappato among the main exponents, held the first online meeting of the Council of Participatory Democracy: two days full of ideas to understand the future prospects of the European democratic dimension, the reforms to be carried out to bridge the gap between a federation's dream and the current configuration. With regard to this, this first meeting was an occasion to discuss the petition that Eumans intends to present to the European institutions. President Dastoli - who analyzed various aspects on the carpet, also confronting the speakers - intervened several times during the debate. Here is a summary of the answers he provided to the various points: “We should focus on the economic aspects and the EU budget. There is a sort of deadlock on the board, regarding the 2021 Mutiannual financial framework, against which there is no agreement at the moment. We need to focus on a specific question for the European Parliament and its powers relating to the financial framework. Indeed, the Council can decide only after the assent of the EP, which should ask the Commission to withdraw the text proposed by the Juncker commission and ask the Von der Leyen Commission to present a new financial framework. In the previous one, the European green deal was not included; in addition, the coronavirus emergency and the fact that the ECB's initiative alone is not sufficient will now have to be taken into account. Therefore, a federal budget based on own resources is needed, which assures EU citizens public goods that cannot be ensured at national level. We must discuss the fact that the Conference on the future of Europe is an organ without democratic accountability and the ability to deliver results; it can only be initiated if an interinstitutional agreement exists. If the emergency doesn't end, the conference will most likely not start the 9th of May. In any case, we must develop a sort of "Cahiers de doleances" to address to the EU institutions, to identify what the CoFoE will have to discuss, what competences to give to the EU. We have to prepare proposals to change the EU.

As regards the rule of law in the EU, we must also include, in the petition: the protection of solidarity and minorities, the responses to the coronavirus crisis.
After the emergency, the governments will retain the use of exceptional procedures as the ones to combat the emergency. It's a risk. We have to change our proposal on the rule of law, taking into account the new system adopted by governments to ensure that it does not remain so configured ”.

A further reference was made to the EU's competences in the field of health: ”The draft Spinelli treaty contained a proposal to give the EU the ability to organize a "chain of command" to fight epidemics and ensure health protection of citizens. Healthcare skills had to be in the hands of the EU, not the Member States. Now, the European Commission should have used the tools provided by the treaties, such as articles 168, 196, 222 to deal with the coronavirus epidemic", ie implementing the principle of solidarity, that of cooperation, that of joint action against the 'emergency.

Lastly, on Saturday, the virtual debate organized by the Luca Coscioni Association took place. It was entitled "Coronavirus, science and rights: addressing emergencies, preparing for the future". Also in this case, it was possible to witness a comparison between experts from numerous disciplinary sectors, from the medical to the legal field, from that of associations to political and sociological fields. President Dastoli, here, claimed to be "in agreement with the idea of reflecting on a democratic system that goes beyond the emergency. The risk is that, once the worst is over, this state of emergency becomes perennial and it is necessary to reflect on this. Another point: there was no homogeneous communication in the European context. And there are doubts that the EP will meet online next week. The European Parliament should have organized a transparent and open debate on the fight against coronavirus. We also know that European health competences are mild, but Article 168 speaks of a concurrent competence in the area of security, in the face of an health emergency. Next week should be used to explain to the public how to cope with the emergency and the European Parliament should take this opportunity, for a finally European debate, which has not been through the Council decisions. Currently there is a block on future economic choices, with regard to the multiyear balance sheet and, compared to this, there is the risk of a considerable and devastating economic and social emergency after the health one. Therefore, the European Parliament should ask the Commission to take a step back from the Juncker Commission budget proposals of 2 May 2018. We need a different budget, for example Eurobonds are only possible if linked to a strong budget. The new project should be five years and not seven years and to have adequate resources of its own at a slightly higher level than the current one".

We close by reporting the statement launched by the International European Movement, on the COVID 19 crisis:

“Let's care for each other.
The world today finds itself before a crisis that threatens our
health, our economy and the very fabric of our society.
The spread of the virus COVID 19 has left us all feeling a deep sense
of uncertainty and insecurity.
At times of such physical, mental and emotional strain, when people
feel alone and scared, the best remedy is solidarity.
To combat a disease that knows no borders or nationality, race or
religion, we need to pool our resources and work together.
In Europe, we have the structures in place to put forward a common
response to a challenge that is bigger than the mightiest of states.
Over the past 7 decades we have learned to co-exist and co-operate in
peace and harmony, in pursuit of our common interests.

Now more than ever those interests are completely aligned.
There is no better way, there is no other way, than to seek
multilateral, coordinated and joint actions to stop the advance of the
virus and tackle the financial fallout that is affecting the European
economy.
To shield employers and employees alike, we need to take concerted
fiscal and monetary measures at the European as well as national level.
This is no time to retreat to narrow-minded, short-sighted,
nationalistic, knee-jerk reactions. Ignoring scientific advice, disrupting
our common market, depriving our neighbours of assistance will only worsen
our own condition.
If nothing else, this virus is a reminder that we are as strong as the
person next to us.
Let's care for each other”.

The European Movement International


 

Key documents

 


 

Charter of EU fundamental rights

Art 36

 In the last few days, facing to the persistence of a crisis that is shaking Europe and Italy in a very serious way, the time to attribute the responsibilities has begun. In fact, with respect to this emergency, only after 45 days since the first case in Italy a European intervention mechanism has been activated. It was a really too long period, in relation to which a federal community, as has been said, would immediately take action at a central level prior over that of the federated states. This slowness of reflexes is even more striking if one considers that, in any case, both the treaties and the Charter of Fundamental Rights establish some common principles to be respected. Article 36 of the Charter, in fact, mentions the right of access to services of general economic interest. Where is the link with the health sector? It exists, although indirect. In fact, pursuant to this article, the European Union intervenes in the economic sector to ensure that, in compliance with the economic parameters by the Member States - for example that relating to the deficit - GDP ratio - it is possible to create a network of services of general interest. This is to ensure the economic and social cohesion, and the needs of well-being and social protection. And the health protection, as is unfortunately emerging in the context of the answers to be found to the COVID-19 virus crisis, can have very important economic and social consequences. Therefore, citizens not only has the right to take care of themselves, but they also have the duty to protect the health of the people around them. So, this process can only be implemented thanks to a rapid and timely institutional intervention, which undoubtedly also involves the the European Union, considering its many breathlessness, too.


 

The rights in Europe

On March 5th, the European Union Court of Justice issued a sentence that - we believe - is interesting, considered the topic of the week. In fact, it concerns the interpretation of Directive 2006/112 /EC, related to the common system of value added tax. According to the art. 132, par. 1 of the directive, “Member States exempt (from the payment of taxes, editorial note) […] hospitalization and medical treatment, as well as the operations strictly connected to them, insured by public law bodies or, under social conditions similar to those in force for the same, by hospitals, medical and diagnostic centers and other duly recognized institutions of the same nature".

But let's get to the facts. In February 2014, a limited liability company, governed by German law, provided telephone consultations on various health issues, on behalf of the public health funds, and conducted accompanying programs, by telephone, for patients with chronic or long-lasting diseases. These benefits were provided by nurses and health care assistants, most of whom also had so-called "health educator" trained. In more than a third of cases, a doctor also intervened, who took charge of the consultation or, in the event of a request for clarifications, provided indications or a second opinion. As part of these activities, this company has asked for the tax exemption benefit. Nonetheless, the financial administration considered that the benefits concerned were taxable. The company appealed to the competent court but, at first instance, this was dismissed. It then filed an appeal in cassation to the Bundesfinanzhof (Federal Tax Court, Germany). In turn, this Court invoked the EU Court of Justice for clarification regarding both the possibility of admitting the tax exemption and the fact whether it was sufficient that the telephone advice was carried out by "health educators" and that, in about a third of cases, a doctor intervened. With respect to this, pursuant to Directive 2006/112 / EC, the Court has held that "services provided by phone, consisting of giving advice relating to the health and disease, may fall within the exemption expected by this disposal, provided that they pursue a therapeutic purpose, a circumstance which is for the referring court to verify". Furthermore, according to the Court, the aforementioned directive “does not require that, due to the fact that medical services are provided by telephone, nurses and healthcare assistants offering such services are subject to additional professional qualification requirements, so that these services can benefit from the exemption expected by this disposal, provided that they can be considered as having a level of quality equivalent to that of the services supplied by other providers, using the same means of communication, a circumstance which it is for the referring court to verify”.


 

Reading tips

Studi sullintegrazioneThis week, considered the attention focused on European economic aid to Italy and its possible future implications, we suggest to read an essay in "Studies on European integration: four-monthly review of European Union law n. 3/2013". It is signed by Andrea Cannone, full professor of International Law at the University of Bari "Aldo Moro", and is entitled "On some recent jurisdictional clauses relating to the Court of Justice of the European Union" [pp. 469 - 485].

Prof. Cannone explains how the controversies of interpretation regarding the Treaty establishing the ESM, signed in Brussels on 2 February 2012, are resolved; for those who want to reconstruct these aspects of the European Stability Mechanism, this text seemed to us a good way to start.

 


 

Weekly agenda

 

Monday 23 March

Foreign Affairs Council. On the agenda: a discussion on current affairs with the aim of reviewing pressing issues on the international agenda.

The European Commissioner for Crisis Management, Janez Lenarcic, calls Filippo Grandi, High Commissioner of UNHCR, the UN Refugee Agency.

The European Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, will meet with Valentin Inzko, High Representative for Bosnia and Herzegovina, and Mr. Nassif Hitti, Lebanon Minister of Foreign Affairs.

 

Monday 23 March – Tuesday 24 March

Stakeholder engagement meeting (webinar). The EIB is engaging on the EIB Group’s Climate Bank Roadmap 2021-2025 through a series of 4 webinars. It will be an opportunity for interested stakeholders to voice their opinions and share their expertise with the EIB’s experts leading this transition. The EIB’s climate, environment and social experts will also answer questions sent in by the audience.

 

Tuesday 24 March

General Affairs Council. Ministers will discuss Enlargement and Stabilisation and Association Process, with particular attention to Albania and North Macedonia. The European Semester, and the rule of law situation in Poland and Hungary will also be addressed.

The European Commissioner for Neighbourhood and Enlargement Olivér Várhelyi will receive OSCE High Commissioner on National Minorities, Lamberto Zannier.

 

Tuesday 24 March – Wednesday 25 March

Outermost regions Forum 2020. The event brings together the Presidents of the outermost regions, Ministers from their Member States, the Commissioner for Cohesion and Reforms and other members of the Commission, stakeholders, and experts interested in learning from the experience of these special EU regions. The Forum will review progress made under the 2017 Communication on a renewed strategic partnership with the EU’s outermost regions. In addition, the Forum will address three major themes for the outermost regions: climate change and biodiversity, circular economy and blue economy.

 

Wednesday 25 March

College meeting.  Commissioners will discuss 2020 Action Plan on Human Rights and Democracy. EC Vice- President Borrell will be responsible for the meeting.

The European Commissioner for Crisis Management,  Janez Lenarčič will hold a video call with Ms. Henrietta Fore, Executive Director of UNICEF on Wednesday.

 

Thursday 26 march

Brussels Plenary session. The European Parliament will hold an extraordinary plenary session to debate and vote on the first three proposals from the European Commission to tackle the effects of the COVID-19 pandemic in EU member states. On the agenda: the Coronavirus Response Investment Initiative, a legislative proposal to extend the scope of the EU Solidarity Fund to cover public health emergencies, a Commission proposal to stop the so-called ghost flights caused by the COVID-19 outbreak. The plenary session will be the first to use a long-distance voting system.

Video conference on the COVID-19 outbreak. The members of the European Council will follow up, by video conference, on the EU’s response to the COVID-19 outbreak. The heads of states and governments will focus on: limiting the spread of the virus, providing medical equipment, promoting research, including research into a vaccine, tackling socio-economic consequences, and helping citizens stranded in third countries.

The European Economy Commissioner Paolo Gentiloni holds a videoconference with Ana Botin, Executive Chairman of the Santander Group.


 

Information campaign on Europe 

  Infografica 1

 Infografica 2

 


 

The European Movement newsletter restarts weekly; new, richer in ideas and content, to closely follow the Conference on the future of Europe. We want to ensure continuity and attention to the smallest details and we ask you for your contribution.

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Responsible: Massimiliano Nespola, giornalista
Editorial office: Sabrina Lupi

 

 

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