Europe needs progressive taxation to put an end to “greedflation”

PES Financial and Economy Network Chair and President of FEPS Maria João Rodrigues (right) and MEP Paul Tang at the PES FEN today.

PES Financial and Economy Network Chair and President of FEPS Maria João Rodrigues (right) and MEP Paul Tang at the PES FEN today.

Europe needs new measures at EU and national level to curb rocketing corporate profits and bring inflation under control. This is the conclusion of the Financial and Economic Network (FEN) of the Party of European Socialists (PES).

Meeting today in hybrid format, representatives of PES member parties and organisations, MEPs and trade unions convened to discuss the ongoing revision of the EU’s economic governance framework, the inflation challenge caused by corporate profits and the introduction of new own resources for the EU budget.

PES FEN Chair and President of the Foundation for European Progressive Studies (FEPS), Maria João Rodrigues, said:

“Even as energy prices begin to return to pre-war levels, Europeans continue to face prices that are rising much faster than their wages. Analysis from the European Central Bank clearly shows that two-thirds of price increases can be attributed to growing corporate profits, yet workers fighting for better wages are the ones being blamed for inflation. If firms will not redistribute the value created, governments will have to intervene.

“Progressive taxation has an essential role to play in redistributing the value created by our economies. Coordinating taxes on wealth, capital gains, share buybacks and financial transactions must be back on the table.

“We need funding for the vital investments we need to make in the green transition. The reform of the fiscal rules and the next package of new own resources must create the space for these investments in the just transition, at national and EU level.”

As part of the mid-term review of the Multiannual Financial Framework, the European Commission is due to present an additional package of new own resources for the EU budget. These will serve to reimburse the Next Generation EU recovery plan and fund new priorities.

Thanks to the work of Executive Vice President Frans Timmermans, Commissioner Paolo Gentiloni, socialist and social-democratic ministers and the S&D Group, we have already secured a share of the new emissions trading system and the carbon border adjustment mechanism for the EU budget. These will endow the Social Climate Fund, designed to support poorer households in the transition.

The PES FEN also took stock of progress on the Economic Governance Review, commending Commissioner Paolo Gentiloni for his leadership. The publication of the proposals and the start of the legislative process present our political family with the opportunity to strengthen the social and environmental objectives of the new framework, and make sure it works as a stabilising force during economic downturns.

PES FEN participants meeting online.
PES FEN participants meeting at the PES headquarters.