The statue of Euro outside the European Parliament in Brussels, Belgium

This is my first “digital diary” on being a student leader after the initiation of the EU-funded citizenship project Message to Europeans 3.0 in Warsaw. Enjoy!

Money talks.

During the EU Monetary Policies class last week, we had pitches and voting about our opinions on further centralization and efficiency of the economic governance by the EU, namely the establishment of a EU-wide corporate taxation, EU tax system, fiscal transfer system, doubling EU budget, membership of European Monetary Union, Banking Union, Asset Purchase Programme, Eurobonds, the establishment of Eurozone institutions and independent Fiscal Board.

Given that the majority of our classmates are Estonians, the class overwhelmingly voted for further centralization of monetary policies of the EU in order to create income equality through redistributing the capital among the EU countries. On the other hand, the class was split regarding the establishment of an efficient system for economic governance.

It often comes to the point of frustration when European youths talk about European politics from an institutionalized point of view since the functioning of the European Union as a whole is far too complex for ordinary citizens who are not well-informed about what really happens inside the European institutions in Brussels. Yet, the mandatory presentations in the class somehow reflected the opinions of a particular group of Estonian students who attended the class. Thus, this article aims at describing Estonian students’ attitudes towards further economic integration among the EU countries in terms of federalization, sovereignty, and democratic accountability.

There was a general consensus that by setting up a EU-wide system on corporate taxation, the fairness of competition among EU countries will be ensured due to harmonization of corporate tax system. Business companies will not invest in EU countries with lower corporate tax because of the standardization. The shortcoming will be, though, that national governments will have less control over business activities since the competence will be given to the EU institutions and less developed economies with the EU won’t be able to catch up with the advanced economies in other EU countries since they will lose the advantage of low corporate tax in order to attract business activities in respective countries. The same logic goes with the establishment of a EU tax system.

During the pitches, there were several presenters pinpointing the loss of sovereignty if all EU countries will eventually become part of the European Monetary Union (EMU) and Banking Union. It’s a hasty generalization to state that a country’s sovereignty will be lost if it joins the EMU which gives competence to the EU to administrate monetary policies and Banking Union which regulates European Banks. Currently, while Denmark and the UK have the opt-out from joining the EMU, all the EU countries have to join the Eurozone and EMU once they have fulfilled the Maastricht convergence criteria enshrined in the EU Treaties. For the membership of the Banking Union, 19 EU members from the Eurozone countries along with 5 non-Euro area countries are part of the Banking Union, meaning that there are only 3 EU member states which don’t belong to the Banking Union. The argument of “sovereignty” is a mere misconception which isn’t applicable to the current situation of the economic integration among EU countries.

Democratic accountability
It comes to a paradoxical situation which criticisms are surrounding the EU regarding democratic deficit in European economic governance but more than half of the class didn’t agree to set up a separate “Eurozone parliament” which can establish check-and-balance with the Eurogroup leaders who decide public spending cuts in particular EU members whose financial situations are at stake. The paradox is, though, if there is such EU institution within the Eurozone, the European citizens’ concerns will be brought to the Eurozone parliament which affects the unpopular decisions such as austerity measures; on the other hand, it could further confuse the European citizens who don’t understand the organizational structure of the EU, thereby undermining the legitimacy of the decision-making process.

To sum up, it’s never an easy job for us to promote the understanding economic policies of the EU since there are times when populist politicians misinform the public and point fingers at the EU when it comes to economic downturn, so that they can archive personal goals such as getting more seats in the local parliament with more votes from the public. For far too often, we’d forget about the fine balance between simplifying how the EU works exactly and detailing the operations of this European project because of the degree of technocracy which creates a distance between the European citizens and the Eurocrats in Brussels.