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End EU subsidies for asocial corporations

28 January 2018

End EU subsidies for asocial corporations

One of the themes of the negotiations on the new multi-annual budget, due to start this year, will be to determine the conditions under which the European Commission will decide which companies EU subsidies will be given to. When it comes to subsidies paid to the member states, qualification depends on 'good economic behaviour'. How such behaviour is defined is determined, moreover, entirely by the Commission via the recommendations to member states in the framework of economic governance. For the most part that comes down to austerity policies and demolition of public services. So it's odd that in relation to subsidies to big corporations the Commission suddenly becomes more reticent, though I do have a few ideas on this. What we should certainly not be doing is extending subsidies to firms which behave in a thoroughly asocial fashion, of which there are rather a lot of examples.

Many of the subsidies paid to major corporations concern research and innovation, but why should the Commission subsidise, for example, firms guilty of tax avoidance? Such corporations could easily pay for their research programmes out of the money they hang on to in paying so little in taxes. Subsidies could also be tied to sustainability, whether inside the EU or in their global subsidiaries. And lastly, return of subsidies paid could be demanded if the branch of the multinational which has received them suddenly closes down, not because it's loss-making but because higher profits can be made elsewhere. This is what Siemens did recently in both the Netherlands and in Germany.

I'm curious to see whether the Commission, in presenting its ideas on the multi-annual budget, will also seek to address these issues. I fear the worst, because the Commission is often much more friendly when it comes to major corporations than it is to the member states, let alone the general public. But should the Commission itself not come up with the goods, we can in any case address the matter in the European Parliament. This is something I'm looking forward to, because the asocial behaviour of multinationals should not be rewarded.

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