The movement to move the EU forward and back to relevance on the international economic and geopolitical stage is gathering momentum.
The speech German Chancellor Olaf Scholz made last month in Prague, the May speech by French President Emmanuel Macron and the 2019 speech by the Dutch Prime Minister Mark Rutter all call unequivocally for the elimination of the existing treaty right of vetoing EU decision-making in a number of areas of sole national competence, including foreign affairs, defence and taxation.
They all call for a programme of replacing the veto right with a system of qualified majority voting in the not-so-distant future. In fact, they are all connecting this change to the treaties with the forthcoming enlargement waves that will bring the EU to 36 or 40 members.
The recent invasion of Ukraine by Russia and the energy crisis caused by the history of having become too dependent on Russian and Chinese raw materials, industrial parts and products as well as oil, energy and mineral raw materials have shown that the EU needs to act in a more determined and decisive manner in areas of defence, foreign policy, taxation and trade than it does today.
Defence, foreign policy and trade make immediate sense but how does the need to coordinate and unify taxation fit into the picture? Well, rising inflation, COVID and the costs attached thereto, as well as the increase in defence spending because of the Russian refusal to abide by international law, all put strains upon the EU member states’ budgets.
One way to ensure that there are enough revenue streams to cover these costs and to ensure the quality of life and standard of living of their citizens is to collect a fairer level of taxation across the board and to ensure that there is no tax evasion outside or within the EU itself.
The international order led at the OECD by some EU countries and the US has been reviewed to raise taxation on multinationals to a common level across the globe wherever they may decide to place their HQs and whatever format they give to their internal manipulation of asset values, nomenclatures and elaborate systems of internal capital and revenue streams aimed at avoiding tax.
The EU has, however, because of its veto system, been the slowest to come in line with these agreements and that cannot continue if Europe wants to be respected.
As Rutter said, soft power, which has, until now, been the EU tool to pressure China and Russia as well as the US to adhere to social, environmental and taxation common rules, has failed. It is now time for the EU to show its teeth and to act as one with force. For this reason, elimination of the veto becomes, for the EU, a matter of relevance or irrelevance.
Of course, the veto has a historical origin when the founding fathers set up the EU in 1957. Many readers of this article were not born then and cannot understand that the fiercely independent nations that had been fighting cruel and mass murdering wars for centuries would suddenly begin to work as one without safeguards.
So, certain areas were left to sole national competence to create a gentle move from independence, through the transfer of sovereignty to Brussels, in order to create a common economic market. The aim was, however, to gradually but decisively move towards political union too. From there, the next step was a common currency and a common foreign policy moving inexorably towards a political union. Later, defence became more and more essential and there too countries had to work together.
The veto is very useful for countries that put their national interests ahead of the pan-European one.
It is now time for the EU to show its teeth and to act as one with force- John Vassallo
Without a successful EU role in the global economic and geopolitical arena, there will be no national interest to safeguard for small countries like ours. If the global market crashes or if Europe breaks into national units once more, a world crisis like the pandemic, the global warming crisis or the Ukraine war would lead to several smaller EU countries not managing on their own.
Therefore, the call to eliminate the veto is in all our national as well as European interests. Countries like Hungary, Ireland, Malta or Cyprus should not be allowed to block a common interest action if the majority of countries and populations so decide, even if such an act can seem damaging to national interests.
Sometimes, a national interest is one that breaches the common European principles of solidarity, rule of law, tax fairness and equality before the law and for such national interests no veto should exist anyway. It is like telling a thief or a murderer who commits a crime in their own economic or family interests and then is allowed a veto to stop the police or the courts from administering justice.
Malta only wants the veto to continue with its sales of passports, with the politicisation of institutions such as the AG, courts, the police and the army and with its tax-evasion taxation system that allows companies and individuals to use Malta as a base to avoid paying tax in their countries.
Ireland does the same and is also prepared to use the veto to protect its heavily criticised tax regime for multinationals. Hungary, on the other hand, uses the veto to protect Vladimir Putin or to stop sharing the immigrant influx into their country. These are all wrong reasons to retain their veto.
In my opinion, those countries that choose to retain the veto should use the absolute veto, like the UK did, and leave the EU family to those who really share the common European values and the common European interest and who believe in representative democracy where the majority rules.
We all have majority rule in our countries with an election every five years. Imagine if the PN would have a veto on every law that the government proposes in Malta.
That is what the veto looks like to us who have the EU values at heart and who know that, without the protection of the EU, our economy and, in the future, our defence would not be safeguarded against China and Russia.
John Vassallo is a former ambassador to the EU.