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07/12/2016

Pierre Moscovici rejects economic sanctions for member states

Euro & Finance

Pierre Moscovici rejects economic sanctions for member states

Economic Affairs commissioner, Pierre Moscovici, said that he is "open for dialogue" with Madrid and Lisbon.

[EU Council Eurozone/Flickr]

Days before the publication of the European Commission’s review of the 2015 budgets, the new Commissioner for Economic Affairs has said that “sanctions are always a failure”. EurActiv.fr reports.

Pierre Moscovici announced at a press conference in Paris on Monday (10 November) that the Commission would delay the publication of its opinions on the member states’ 2015 budgets, expected today (12 November).

The 28 member states presented their budget proposals for next year to the European Commission in mid-October.

“The reason for this delay is obvious. The new Commission took up office a week ago, and we need some time for discussion,” the Economic Affairs Commissioner said.

The French Commissioner’s position may become complicated, as France has not respected European rules regarding public deficit and debt. The French deficit will grow to 4.6% of GDP in 2015, and the public debt to 98%, while the limits set by the EU are 3% and 60% respectively.

“Sanctions are always a failure”

For France, such sanctions would mean an excessive deficit fine of at least 4 billion euros.

“Sanctions are always a failure. My aim will be to avoid sanctions,” the French Commissioner said.

>> Read: Excessive deficit fine looms over France

Moscovici is not the only one within the College of Commissioners whose voice will count on the matter. His position falls under the leadership of Vice-President Jyrki Katainen, in charge of Jobs, Growth, Investment and Competitiveness.

Juncker knows that Luxembourg’s fiscal practices belong to the past

The Commissioner defended Jean-Claude Juncker against questions on Luxembourg’s secret tax deals, saying his place was at the head of the Commission.

“The President of the Commission, like all of us, is aware that these practices belong to the past,” he said. “Banking secrecy will soon be a thing of the past”.

Pierre Moscovici also condemned recent rounds of French-bashing, pointing out that France was still the EU’s second largest economy. “Brussels is not external policy, it is essential. Either we can be critical and marginalise ourselves, or we can move towards the centre by being an intellectual authority, but we can’t change anything from the outside.”

>> Read: EU watchdog targets Amazon’s Luxembourg tax deals

Politics a priority

The French Commissioner highlighted the need for the European Commission to become more political.

He also indicated that he hoped to change certain practices within the two Directorates General he heads.

“In France, it is the Insee (National Institute of Statistics and Economic Studies) that presents these predictions. I do not see why the Commissioners should be the “anchormen” of the Directorates General. Last week I presented them four times, to the press, the College of Commissioners, the Eurogroup and Ecofin. Our role as Commissioners should be to draw political lessons from these statistics.”

Background

The French Commissioner Pierre Moscovici has been named as Commissioner for Economic and Financial Affairs, Taxation and Customs by Jean-Claude Juncker. Moscovici is in charge of two Directorates-General: Economic and Financial Affairs, and Taxation and Customs Union.

Timeline

  • Late November 2014: publication of the European Commission's opinion on the 2015 budgets, country by country.

Further Reading