France: The issue of Europe

Series on the debates of the French presidential campaign – No. 11 Europe is an important topic for debate in France’s presidential campaign. In this Flash we focus on the functioning of the European economy. First, we need to look into Europe’s dysfunctions: Disappearance of capital mobility between the countries and misallocation of savings; Growing heterogeneity and diverging living standards between the countries; Tax and cost competition between the countries. Proposals to correct these dysfunctions should therefore be at the heart of debate: How to restore capital mobility between the countries? By restoring confidence in governments and in the quality of investment projects? Through the formation of large pan-European banks? How to stop living standards from diverging? By turning the European recovery plan into a permanent investment plan? By pooling some components of social welfare? Through greater fiscal flexibility? How to prevent inefficient competition? By making fiscal and tax decisions by qualified majority? By returning to subsidiarity and coordinating what generates externalities for other countries? Through minimum social standards (minimum wage, social welfare, etc.)?