French Minister: ‘There is a long way to go’ on eurozone budget

France wants to make access to European funds conditional on the European minimum wage and respect for the rule of law, the state secretary for Europe, Amélie de Montchalin, told EURACTIV Slovakia in an interview.

Amélie de Montchalin has been the state secretary to the minister for Europe and foreign affairs since 31 March 2019.

Are the abolition of the Spitzenkandidaten procedure and the choice of the German Ursula von der Leyen for the president of the European Commission, two gestures that are highly criticised in the European Parliament, in favour of European democracy?

We must remember what these posts are for – the presidents of the Commission, the Council, the European Parliament… We need courageous and competent people who can weigh up against Chinese, American and world leaders. We need a strong Europe in international competition.

Wouldn’t it have been possible with the Spitzenkandidaten?

We would have agreed with the Spitzenkandidaten if the lists had been transnational. There are many countries that project a national reality on the European Parliament. But it doesn’t work at all the same. The Treaties do not say that the European Union is a parliamentary system.

According to the Treaties, the European Council is obliged to take into account the result of the European elections.

It took it into account. We tried a lot of things. Council President Donald Tusk was asked to consult with political families. And we worked on a very large number of scenarios, including the possibility that Frans Timmermans could take over the leadership of the Commission. This was not possible.

Because of the resistance of the Visegrad Group (Hungary, Poland, Czech and Slovak Republics)?

In particular, but also from other leaders of the Council. So we started from scratch: Which candidate can get a majority in Parliament and the Council? We chose someone from the EPP, a woman, rather at the centre-right of the German political spectrum, and we managed to create a consensus. There were no big hidden plans. The French president did not get his candidates. He hoped that the joint project, gender parity and a form of geographical balance would be respected.

Key EU positions went to people from the EU’s founding countries and Spain. Even if the Visegrad Group voted for the final choice, is it not a mistake that no posts have been allocated to Central and Eastern Europe?

Europe should not be seen as an association of regional blocs. WIthin the 20 or 30 scenarios that existed, France proposed and introduced personalities from member states that had joined since 2004. In the end, a “package” was needed.

It is up to Mrs von der Leyen and your government to organise things, but it seems interesting to us that the Slovak Maros Šefčovič could have a leading position. But today we have to work for the citizens. We will work together on many policies, including innovation, social, competitiveness and industry, which are very beneficial for the citizens of the countries that have arrived since 2004.

According to the sources of your political group, France would be interested in the Commissioner for Climate, Economic Affairs or Social Affairs. Can you specify that?

We have four priorities: protecting citizens – asylum and Schengen reform – then climate, then economic, social and industrial, and finally external relations, so that Europe can once again become a power. But the president of the republic is not a general who defines a field and puts a flag on it.

The European Commission and Parliament, as well as France, support the idea of conditioning European funds on respect for the rule of law and democratic values. But this idea is criticised, especially in the East. Do you believe in its success?

The rule of law is a fundamental process according to Article 2 of the EU Treaty. If you are in the EU, respect for democratic values, independent justice, the rule of law – that things are predictable and not arbitrary – is essential to mutual trust. Then it’s a legal issue. We must get away from the perception that our actions are a political discussion in the wrong sense of the word.

Conditionality may very well be based on decisions of the EU Court of Justice, the Venice Commission, the OSCE, legitimate, strong, serious and government-recognised bodies. It is not a question of punishing a country or its citizens. In addition, many countries joined the EU in 2004 because they wanted to have space where democratic values would be protected.

The Finnish Presidency in the Council of the EU wishes to move forward with Article 7 against Hungary. Does France support this approach?

We argue that we should reach the end of the process with the Finnish Presidency. We know the strengths and weaknesses of Article 7. And because we will have learned together, we then want to build something more solid.

Does France support the idea of Germany and Belgium on the peer review of the rule of law carried out by them?

The peer review is a good exercise if it is based on the opinions of legal and solid institutions without weakening the Commission. It would be prevention, the answer to the question: What can we do before we enter the sanctions phase?

Is the budget of the eurozone in its current form the final point of French ambitions or the first step towards a budget with the stabilising function as initially desired by Emmanuel Macron?

This is a very important first step. We could have a budgetary tool on the governance of the 19 (eurozone members), not 28 (EU members). In terms of size and stabilization objective, we still have a long way to go. Slovakia can help us a lot. In the eurozone, there are asymmetric movements. Since you do not have exactly the same model as Spain, Latvia or France, you may find yourself in a gap with the average.

Monetary policy is not necessarily appropriate. The stabilisation function is not there to put everyone exactly on the line. It must ensure that if we have asymmetric shocks, particularly on unemployment, we have the capacity to show solidarity. We share a currency, but also constraints. For us, it is important – now that the eurozone is solid and monetary policy credible – that we build our economic, social and fiscal convergence with other tools.

Convergence cannot be decreed, it is a process of reform as we have adopted in France. France is making very ambitious reforms on unemployment insurance and pensions. They are very expensive, which explains, in part, why our public deficit in the next 18 months is not as small as we would like.

It will even be above the 3%  ceiling in 2019.

This year we are visually at 3.2 or 3.3%. There is the technical effect of the tax credit and competitiveness that becomes a temporary measure. The real deficit is 2.3 or 2.4%. One reason for this deficit is reforms. When the system is reformed, things will be more efficient. In the short term, reforms cost us money; that is why we would like a tool for stabilisation or convergence and competitiveness to support them.

Today, the eurozone budget does not have a stabilisation function and is very small. Didn’t Emmanuel Marcon lose this battle?

It’s a battle that’s moving forward. At first, we were alone. Then Germany joined us. Then we created the budget for the eurozone and found governance. Now we have to think about size – own resources – and objectives. Today it accompanies convergence – from above.

As far as the eurozone budget is concerned, we are only talking about 20 to 30 billion euros.

For the moment. But we’ll discuss it, we have to. The budget of the eurozone  is no longer an anecdotal subject that we discuss if we have time. For countries like Slovakia, it is an extremely important tool. Italy, Spain, Greece, a number of the countries with the euro have had great years, except that this situation has created imbalances. And since we did not have these kinds of tools, the correction was extremely brutal: the crisis, unemployment, soaring property prices, entire sectors stopped. Being aware of the risks and preparing is our political responsibility.

During the European elections, your party promised in its programme: “Implement a minimum wage adapted to each European country to limit competition by low wages and guarantee a decent living income. Access to European funds will depend on the establishment of these salaries.” Is this measure still under consideration?

If some countries play the social dumping card, we will not achieve convergence. Our proposal is simple: every European who works full time must not earn less than the poverty line. Economically it represents 50% of the median salary. This is a condition for a social Europe. We want to have a lot of discussion within the EU so that everyone understands what this means. It should not be voted on right away, it can be discussed and known.

Do you really want to make access to the European funds conditional on this?

If you are a country with productive manufacturing industry, you are pocketing European funds and keeping workers at a level where they do not have enough to live on, it is dumping and not a cooperative game. People are sometimes Eurosceptic because they are given speeches about social Europe, while in their daily lives they see no change. Why in France, there are the most European funds per capita in the regions that vote the most Eurosceptic? Because if people have little income, they have more European funds and often they are more desperate to see that Europe does nothing for them.

The European spirit, convergence cannot be bought. There is a feeling of being respected and protected. These aspects have nothing to do with European funds. If you do not have a stimulus for these policies and if Europe is just a cash drawer, the European spirit does not progress.

If, for example, in Slovakia a citizen sees Europe giving money to the town hall and the Ministry of Transport, he sees that there is infrastructure. But does that make him feel protected and respected? Convergence is not only about money, but also about access to rights. And these rights must be built.

How soon do you plan to implement this measure?

In France, we are determined. And realistic. We must start working on it quickly.

Another promise of the LREM programme: “Finalize the fight against social dumping with an act II of the reform of posted work. For equal work, equal pay and equal labour costs: social security contributions will be aligned with the highest level.” The recent reform of the Directive took several years. How do you intend to convince other states?

This is an essential subject for convergence. If a Slovak worker comes to work in France for four or six months, he already earns the same salary as his French neighbour. There is no reason why it should cost much less than the French worker. It will therefore cost the same price. But the social security contributions attached to the posted worker go to his country of origin. This allows all social services in his country to converge. If Slovakia were to receive the difference in social security contributions for all Slovak workers in France, your government would be very happy. In host countries, this prevents internal competition in the labour market.

To be European for me means that we do not wage war on everyone against everyone. Healthy competition pushes people up. Then there is the negative competition, typically on social security contributions. This is in the interest of both host countries and countries of origin. For Slovakia this would be a very good deal, not only financially, but for the population. So that she can say: Europe is just with us. People go to work elsewhere, but it allows us to develop and then they have less need to leave. The goal of convergence, for Slovakia too, is to have a healthy, balanced, prosperous, sustainable economic life and development.

What are France’s other priorities in terms of European social policy for the next five years?

There are also things to look at in terms of the mobility package, the coordination of social security systems and unemployment insurance in particular. If it goes as well as we would like, we will have other ideas.

Your predecessor Nathalie Loiseau told EURACTIV two years ago that “the countries of Central Europe… have been neglected by French officials for too long.” Since then, we have seen several clashes, in particular between Emmanuel Macron and Viktor Orban, or rapprochements, such as the one between Paris and Bratislava on the posted workers directive. In which areas can France reach an agreement with the V4?

I am telling you this because it is shared by your government: we do not work enough with the Visegrad Group. We are delighted when they invite us. But what we want is to work project by project in the interest of the citizens. There are many things Slovakia is helping us with. It is a pivotal country that links the euro area with its neighbours outside the euro area. We are in strong agreement on agricultural policy, the need for research and competitiveness in industry, innovation and education policy, many things. And fortunately. Working in rigid blocks can damage the European spirit.

I see the V4 as a group of countries that talk to each other and that we meet regularly. Do we negotiate in Brussels with groups, blocs? No. It would be terrible if the V4 countries started voting together on everything when it would not be in their interest.

Was this the case at the last European Council? Did they find themselves without nominations for European leadership because of their own fault for saying no too often?

We are not following a logic of punishment. What you are saying is one of the games that took place on the night of Sunday (June 30): heads of state who come to settle their partisan, personal scores, from domestic politics at the Council table. The next day, everyone became aware that we had a responsibility towards our citizens and the outside world.