In this year's State of the Union address, the Socialists and Democrats in the European Parliament are calling on Ursula von der Leyen (Ursula von der Leyen) to come forward with solutions to prevent an emergency situation.
If we fail to protect Europeans from this staggering tsunami of the cost of living, it threatens to destroy our citizens' trust in our democratic institutions. While Ukrainians are preparing for three decisive months in the fight for their country, we should prepare for three important months to address the social and economic consequences of the war. In racing to contain soaring price shocks and prepare for the deeply worrying winter ahead, Europe must prepare a comprehensive plan that includes social, fiscal, economic, employment and investment measures. The extensive plans recently unveiled by social-democratic governments in various European countries are a good example of what should be done at the European level. Recent crises, such as the financial collapse following the Lehman Brothers crash in 2008 and the COVID-19 pandemic, as well as Europe's lack of response to migration pressure in 2015, have shown that the lack of decisive action by Europe's leading political forces fuels extremist activities.
However, the European Commission is acting too slowly. For months there has been a struggle to pay for food and energy, and European citizens had to wait for the State of the Union report to learn about most of the proposals.
On 14 September, the citizens of the European Union finally heard this report
The European Commission's long-awaited arsenal of proposals mainly consists of solutions that the Social Democrats suggested several months ago. In the spring, we insisted on a European Parliament resolution on the social and economic impact of the war, which included several specific ideas. We set out more details in a letter that our leader, Iratxe García Pérez, addressed to the Commission in July as our contribution to the debate on the State of the Union. Now is the time to turn our attention back to these solutions and remind us all that extraordinary times call for extraordinary measures.
Windfall tax
As early as May, our proposals included a call to introduce a windfall tax and a bold package of social resilience measures. It is simply unacceptable that poor people cannot afford to heat their homes while wealthy companies make astronomical profits. The revenue from this tax should be used to protect Europe from the tsunami that has hit our society. European institutions must show a firm commitment to building a socially just Europe, starting with organising a new social summit, accelerating the implementation of an adequate minimum wage across the EU and setting coordinated goals and measures for poverty reduction, adapted to the current situation and the war in Ukraine. We must regulate the energy market to ensure it is free of speculation, set price caps for electricity and gas, and limit the revenue that Vladimir Putin gains from speculation.
Energy investment and the green transition
While protecting the most vulnerable Europeans from the shocks caused by the war, the European Union should also accelerate the transition to energy and the green economy. This is the only way to sustainably break the dependence on Russian fossil fuels. More than ever, we need investment in affordable renewable energy sources, socially balanced climate measures and a truly holistic approach to overcome devastating natural disasters. The last few summers with extreme drought, fires and floods in many countries reminded us that we have no time to lose.
Reform fiscal rules
To be able to cope with social and economic shocks, Europe must also reform its outdated economic governance, including fiscal rules. It should build on its successful temporary solutions to tackle the aftermath of the COVID-19 pandemic, such as the SURE scheme for job protection, as well as the historic recovery and resilience fund NextGenerationEU. These should be adapted to the new reality and transformed into a permanent fiscal capacity as a standing crisis management tool.
Support for Ukraine
It goes without saying that the European Union must continue to support Ukraine, including through sanctions against the Putin regime. We also call on the Commission to work on a strategy for the reconstruction of Ukraine after the war. These investments must go hand in hand with reforms and be in line with Ukraine's European path.
Overcome the paralysing unanimity voting in foreign affairs and tax matters
Europe's response to Russia's war against Ukraine has sometimes shown flaws in our decision-making process in both foreign affairs and tax matters. The European Union must find other ways – for example, a move to qualified majority voting – to overcome the national veto rights and the paralysing effect of unanimity voting, which prevents us from being an effective player on the global stage.