Thomas Piketty: evaluation

Transcript context

…First of all, I have been involved in writing this manifesto for the democratization of Europe. We have made a very large group of scholars from all over Europe — lawyers, political scientists, economists. We have been proposing concrete changes in the treaties that organize the European Union. We are making very concrete proposals on improving the working of the European Union. Indeed, I am a European federalist. I am a European, what I call, social federalist in the sense that I want federalism to be able to deliver more social justice, to deliver more popular support to Europe, which today is not exactly the case. If you look at the Brexit vote, the lower-income groups voted to exit. Upper-income groups and upper-education groups voted to stay. I think there’s something wrong going on. I think we need a different kind of Europe which brings more social justice, fiscal justice. One of the solutions — certainly not the only one — is to be able to make a majority-rule decision-making over taxation. The problem today is that, if Luxembourg wants to put their veto on taxation of multinationals or taxation of billionaires in Europe, then you cannot do anything together, in spite of the fact that Luxembourg, with 300,000 inhabitants, is less than 0.1 percent of the population of the European Union, which is 500 million. It’s even less than the nobility in France in 1789, where the nobility was about 1 percent of the population, and they had veto power about taxation. I’m saying this cannot continue for very long. In the proposal we’ve been making, it’s not . . . what I want to say regarding your question is that it’s not open only to large countries. It’s also open to every country in the European Union, or even outside the European Union which may want to join at some point. I’m just saying that if you take Germany, France, Italy, Spain — these four countries make almost 80 percent of the population and GDP of the eurozone. If these four countries are ready to go, I think they should go. They should try to convince as many other countries as possible. I think the current arrangement where, officially, we have the unanimity rule for all fiscal and budgetary matters . . . Remember what happened last year with the post-COVID recovery plan. In effect, France and Germany put so much pressure on the Netherlands, Sweden, et cetera, that in the end there was unanimity to have common borrowing and a recovery plan. But in a way, this was a fake unanimity. There’s a risk that in the end, you make everybody unhappy because people are forced to agree. In effect, what happened is that France and Germany told Netherlands and Sweden, “If you don’t want to come in, we’re going to have a separate arrangement between us, and we will do it without you.” So they said, “Okay, we will do it with you.” I don’t think this is the right way to organize political decisions. I think we should have majority-rule decision-making, and not based on country against country. id, “Okay, we will do it with you.” I don’t think this is the right way to organize political decisions. I think we should have majority-rule decision-making, and not based on country against country. That’s why the proposal we are making in the manifesto for the democratization of Europe is to have a European assembly, where members of national parliament will come and be in front of each other. They will be there in proportion to the population of each country and in proportion to the size of each political group in each country, so that it’s not just country against country. When you have the head of state of Germany, the head of state of France, the head of state of Sweden, or the minister of finance of Germany, France, and Sweden — when you have only one individual to represent the supposed interest of 18 million Germans or 65 million French, it’s a machinery to make national interests against national interests. Whereas, in fact, within Germany or within France or within the Netherlands, people disagree, obviously. They have different political leanings. I think the current European parliament is not enough because in the end, it’s really the national parliament — the German Bundestag, the French Assemblée nationale — who have the political legitimacy to make their taxpayer pay more or less tax and to take budgetary decisions. Today, we are in this strange situation where each national parliament has, in effect, a veto power on all budgetary and fiscal decisions. Indeed, I think, one way to go beyond that is to actually put these national parliament members together, maybe one week per month, in the European assembly, to vote over budgetary decisions. What will come out of this, I don’t know, but I trust democracy. I think it could bring more social justice and fiscal justice. If I just take one example, which is corporate taxation, remember that the US, until Trump, had a federal corporate tax rate of 35 percent in addition to the state corporate tax rate. Whereas in Europe, corporate tax competition had led corporate tax rate to grow to 20 [percent], 10 [percent], et cetera — which is very paradoxical in a way, the fact that Europe has led the movement towards more tax competition and corporate taxation, because Europe has a bigger welfare state to pay for than the US. I think this shows that political institution — the fact that you have federal corporate tax and income tax in the US but not in Europe — makes a difference. Anyway, we could talk a lot more about this, but that’s basically my view. If we really want to limit wealth inequality, why shouldn’t the European Union let in — as immigrants — many, many more non-Europeans? Won’t that just limit wealth inequality almost overnight? Is that a good idea? I don’t think you endorse it in your book, but that seems to me, by far, the easiest and most direct way to limit wealth inequality.…

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