Tuesday 13. April 2021

What can the EU do?

- What can the EU do? -


Economic coordination of the national policies at EU level goes back to the very beginning of the European project in 1957, when the European Economic Community was created . Since then, eighteen Member States have pushed this coordination even further by adopting the euro as their currency. As a response to the current financial crisis, the EU has been trying to step up coordination efforts and to adopt a framework for strengthened fiscal and economic surveillance mechanisms (e.g. two pack, six pack, banking union, ESM) to ensure financial stability.


The responsibility for direct taxes lies however with the Member States. Yet, the EU can act in matters concerning the regulation of mostly indirect taxes, such as VAT, that may affect fair competition across the EU and the proper functioning of the single market. The latter - as one of the key features of the Union - enables people, goods, services, companies and money to move within the EU as freely as they do within a single country. The fight against tax evasion and tax fraud is one of the top priorities of the EU Commission. In June 2015, the Commission unveiled a series of initiatives to tackle tax avoidance, secure sustainable tax revenues and strengthen the Single Market for businesses. The proposed measures are part of the Commission’s Action Plan for fair and effective taxation.


However, it should be noted that the European integration project does not only comprise economic objectives. It also has a a social dimension that requires the EU to promote a high level of employment, social protection and inclusion. In September 2015, the Commission President Juncker announced the establishment of a "European Pillar of Social Rights" which should be a self-standing reference document, of a legal nature, setting out key principles and values shared at EU level.


Accordingly, the EU shares with the Member States the responsibility for policy in the fields of employment, working conditions, social affairs as well as fostering equality between men and women. In line with the Europe 2020 growth strategy, the European employment strategy seeks to create more jobs and to better coordinate national employment strategies. 


With one of its flagship initiatives, Europe 2020 also pursues the objective to fight against poverty and social exclusion delivering actions across the whole policy spectrum: from the labour market and minimum income support to healthcare, education and housing.


In addition to funding for job-creation and social protection, the EU also supports measures aiming at reduction of the disparities between the various levels of development of particular regions in order to enhance territorial cohesion.