“SMES MUST BE THE MAIN ACTORS IN ECONOMIC RECOVERY” INTERVIEW WITH MEP PABLO ZALBA

 http://blog.unitee.eu/interviews/1468

Pablo Zalba Bidegáin is a Spanish MEP who is a member of the Group of the European Peoples Party. As Vice-Chair of Economic and Monetary Affairs, he speaks to UNITEE about the importance of entrepreneurship, the role of SMEs and ways to improve the status of youth unemployment rates in EU countries like Spain.

Why did you decide to enter politics and why did you choose European politics?

The Partido Popular and Unión del Pueblo Navarro used to conform a successful alliance in my Autonomous Community, in Navarra. When this alliance broke, given that I had always felt close to Partido Popular, I decided to support the Party in a difficult moment. Once the EU elections got closer, they realised they needed someone with business expertise, and they asked me to enter politics.

I had never thought to enter but, to be honest, I had always been passionate about European politics. It was a moment which, it was already clear, was going to be crucial, as we were living in the months previous to the entry into force of the Lisbon Treaty, and we were all aware of the importance the Eurochamber was going to have. Additionally, we were experiencing an economic crisis in which many EU-level reforms were going to be needed. Then, I decided to step in.

In your opinion, what will be the EU citizens’ greatest concerns addressed in the upcoming European Parliament elections and how can the EPP respond to them?

We now live in a transcendental moment for Europe. I think that we are not fully aware of the important advancements we have achieved during this last term towards a greater economic integration and, ultimately, political integration.

In my opinion, during the oncoming months and years, we will face two main challenges: keep on advancing towards the very much desired and needed economic and political unity and, secondly, to provide the new process of governance we are immersed in with political legitimacy.

Whether it advances in one or another direction depends, to a great extent, on the result of the upcoming European elections. Therefore, these elections are extremely important.

What changes would you, personally, like to see at the European level?

I would like to keep on working on the economic and political union, I would like to see the third pillar of the banking union soon: a common fund of deposit guarantees. I would like to see a Europe with more democratic legitimacy, it is key to it that the European Parliament plays a more active role in the political control of the Commission.

I would also like to see that the basis for Eurobonds are settled: provide the Eurozone with some Eurobonds that, in spite of being the end of a whole process, are more necessary than ever.

Spain is one of the countries in the European Union with the highest unemployment rate, especially amongst the young population. Which European economic policies can help tackling such a situation as in Spain and, also, in other EU Member States?

There are several ways to address this issue. First, an important tool, but not sufficient at all, is the Youth Guarantee the European Commission has launched. It counts on  6 billion euros, out of which almost  2 billion are for Spain. It is very, very important that those funds arrive to the countries as soon as possible.

Obviously, this will not be the solution to unemployment. The solution to unemployment will come, in my opinion, by facilitating and incentivising companies to hire workers. And, also, by making it easier for those who want to create a new company; this is, entrepreneurs: facilitating the process for them as much as possible so that they can reach their objective.

In my opinion, the main problem that we are facing in order to achieve these two goals is the lack of credit. How can we make credit arrive to SMEs, enterprises in general and families? In the medium and long term, the banking union will, no doubt, help to resolve the problem, and will help to incentivise growth too, but that is not enough.

We have to confront the problem from a short-term point of view, we need to act now and for the short term so that the credit arrives to SMEs, families and enterprises in general. In a context in which inflation is very much under the objective fixed by the European Central Bank, the action of the ECB, which can and must do more about it, is more necessary than ever.

I have been advocating for this for months, and, during the past weeks, the IMF and the European Commission are also insisting in this same direction.

UNITEE is a business confederation that represents more than 12,000 SMEs and 3,500 business professionals. You are Vice-Chair of the Committee on Economic and Monetary Affairs, as well as substitute at the Committee on International Trade. According to you, how can SMEs and entrepreneurship stimulate economic growth in the European Union?

Small and medium enterprises must be the main characters in economic recovery and job creation, I have no doubt about it. Just an example: in Europe, there are 25 million unemployed people and 23 million SMEs. Just if each one of the EU SMEs hired one single worker, the unemployment problem would be solved.

How can we help SMEs? I think there are three keys:

Internal market: strengthening the single market in the EU and, especially, the digital market.

Second, internationalisation. It is key to SMEs’ job creation that they have an easier access to international markets. This term has been a success in this respect, as free trade agreements with South Korea, Colombia, Central America an Peru have entered into force, and we are working in this direction.

There are currently agreements under negotiation with Japan and United States, among others. The agreement with the US, known as TTIP, “Transatlantic Trade and Investment Premises”, is a crucial tool for growth and job creation in the future.

If this is important for the private sector, more so in the case of SMEs, because this agreement is not only about costume reduction; it is, overall, a mutual recognition of regularisation in order to harmonise the different standards between the US and the EU. At the moment, if a big company wants to grow and sell their products to the US, it is much easier for it to homologise its products there than it is for an SME, for which it implies, due to obvious reasons, a much costly price.

I believe that these are the three guidelines: internal market, growth and international agreements; especially, the TTIP.

Euro-scepticism and anti-immigration parties are rising, we have seen this trend in multiple countries in Europe. UNITEErepresents entrepreneurs and business professionals with a migrant background; New Europeans, as we call them. Do you think that immigrant entrepreneurship should be fostered? How?

Entrepreneurship needs to be fostered in all stratums of society: youth, old people, urban citizens, rural citizens, immigrants in a legal status… I believe this is a priority objective.

How could entrepreneurship be fostered amongst this last group, New Europeans?

I believe they are the same as us and, therefore, it must be fostered in the same way as it is done with people who have been born and lived in the EU for all their life. I would not make any distinction in this respect.

How can the European Union in general, and the EPP in particular, increase the public opinion’s awareness on the positive contributions of diversity to the EU?

With a lot of pedagogy. This is something that gets easier and easier to do as, in the EU, we are more aware of the importance of diversity. What has helped the most to, somehow, unite the EU is the Erasmus programme. I think that it is something we should look up to as an example of what needs to be done.

You recently released a report on the benefits of card payment ceilings. Can you tell us more about this report and about the work of the EU in this field?

It is good news. This is going to mean saving to the consumers, to make card payments easier, to make the anti-fraud fight more agile and to bring more transparency. When consumers pay with credit card, they will know what for and why they are paying at any time.

This is an extra reason for citizens to perceive the importance of Europe and of these elections. I hope that, with measures like this one, we achieve to convince the citizenship about the importance of Europe.

Last but not least, how can your Party convince the citizens about the importance of Europe? What can it provide them with in the upcoming European elections?

We need to explain what we have done in this first term and what we are going to do in the next ones; to explain that this is a transcendental moment for the EU. And I believe that citizens are intelligent and will understand the importance of these elections.

Spain gears up for European election battle

http://www.euractiv.com/sections/eu-elections-2014/spain-gears-european-election-battle-301625

Spain's ruling party, the Partido Popular (PP), has finally published its candidates list for the European elections. EurActiv Spain reports.

Almost half of the candidates from PP (23 of Spain's 54) are currently MEPs. The Spanish Socialists, for its part, have chosen a formula which alternates between men and women, preferring “renewal and rejuvenation”. Thus, 60% of the Socialists candidates are new, and their age is lower compared to the median of 2009 (48 versus 56).

The Partido Popular has decided to refresh only three of the first ten candidates on its list. Number one is for the Minister of Agriculture, Miguel Arias Cañete, who is likely to be the Commissioner. Asked about this issue, Cañete says that his objective is “to win the candidacy”, although afterwards, he can “aspire to anything”.

Esteban González Pons is the second candidate of the PP and, predictably, the Head of the Spanish Popular delegation, if Arias Cañete goes to the European Commission. Jaime Mayor Oreja, the current Head of the list (for two terms in a row), decided to leave his European career for the moment, although his future position in Spain is still a mystery.

The following positions in the PP’s list are filled by current MEPs, including  Teresa Jiménez Becerril, Luis de Grandes Pascual and Pilar del Castillo Vera. The sixth position is for the former President of Murcia, and President of the Committee of the Regions, Ramón Luis Valcárcel. He is followed by well-known MEPs such as Rosa Estarás, Francisco Millán and Pablo Zalba.

According to the most recent survey by Metroscopia, the Partido Popular will win 16 seats in the European Parliament, 2 less than the Socialists.

The decision will be taken by 36.5 million Spanish Citizens who can vote next 25 May. The biggest fear is abstention, which reached 54% in 2009 and 2004.

Socialists and other political parties

The survey doesn’t give a chance to MEP Alejo Vidal-Quadras, Vice President of the European Parliament, to gain a seat. He has decided to leave the PP, in order to lead a new political group VOX, which aims to offer an alternative to Spain's two main parties, the Partido Popular, and the Socialists. VOX was founded by former MEP Santiago Abascal, and José Antonio Ortega Lara.

The Socialists (PSOE), for its part, are led by Elena Valenciano, the Vice Secretary General of the group. 60% of the names on its list are new. However, it also includes veterans like Ramón Jáuregui and Fernando López Aguilar.

Raül Romeva, will campaign with the French Greens.

After the Socialists and the PP, surveys say that the Left party will gain 9 seats, followed by UPyD (5), CEU (the Catalan CiU, the Basque PNV, the Canarian CC, the Valencian BNV, the Majorcan UM, UMe y PA) with 3, the Catalan ERC with 2 and Ciutadans with 1.

What Is Draghi Waiting For?

http://www.huffingtonpost.com/pablo-zalba/what-is-draghi-waiting-fo_b_5161195.html

Inflation in the euro area has fallen below one percent in recent months. Even Spain entered deflation in the last month. This fall in inflation, coupled with slow growth, has made many remember that this crisis can end as "Japanese style," referring to the many years in which Japan has experienced a low growth rate and a very low inflation.

In this situation, it seems clear that the European Central Bank should act. Since interest rates are already at record low, all expect the ECB to announce unconventional measures like the American style QE, which could increase inflation and give a small boost to the economy. However, recent history has shown us why Mario Draghi has not acted and why he will probably act, and act forcefully in the coming months.

First, he has always been cautious in his decisions. This issue has drawn criticism from many, because it seems as if he always wants to reach the limit, as he did with that famous phrase "we will do whatever it takes to save the euro" in 2012 he could have spoken before, saving a few months of maximum voltage, or not. I have no doubt that he acted when he was sure that all the other players involved were fully committed to save the Euro.

Secondly, he does not want Member States to relax. This has always been his obsession, and it seems as it is going to continue. In virtually all meetings he always reminds Member States that the ECB has to watch inflation, and that they cannot expect him to do what States don't do. Aggressive monetary policy which creates economic growth could relax the States, and they would stop structural reforms, given the high political cost of these reforms.

In addition, a key issue that Draghi always seems to be careful with is unanimity in decisions. And here it looks as if things have changed. If in recent months it seems that German opposition to unconventional measures was clear, now taking a look at the situation, some may argue their opposition has ceased, however, not enough. Currently there is unanimity to carry out some unconventional measures such as stop sterilizing debt operations, but this is not the case for other more ambitious measures which will likely have a greater impact in restoring credit to SMEs and families. I'm sure Draghi wants to be ambitious, as he was in the summer of 2012. Let's hope this is the case.

The EU overregulation of Interchange Fees hurts the average card holder and consumers in Europe

http://propertyrightsalliance.org/eu-overregulation-interchange-fees-hurts-average-a3042

Once again the EU Parliament has lost an opportunity to vote in defense of the European consumers. Last week the MEPs voted in favor of credit card payment fee caps, best known as interchange fees.This proposal had been previously endorsed, last February, by MEPs Pablo Zalba Bidegain (Vice-Chair of Committee on Economic and Monetary Affairs) and Diogo Feio both from the European People Party (EPP).

According to a press release by EU Parliament “The service or “interchange” fees that banks charge for processing transactions under schemes such as Visa and MasterCard, would be capped at 0.3% of the transaction value for credit card transactions and 7 euro cents, or 0.2% of the transaction value (whichever is lower), for debit card ones.” Now the proposal will be tabled to the Council of the European Union in order decide whether or not to adopt said legislation.

For those who are unaware of what interchange fees are, interchange fees are primarily transaction costs charged to card accepting merchants by companies (acquirers) that process card transactions. The recent trend by regulators has been to clamp down on interchange fees because they have been perceived to inflate costs for consumers. Therefore, in countries like Spain and Australia for instance, regulations were put in place to cap interchange fees in an effort to reduce costs for consumers. However, such regulatory reforms have instead overwhelmingly hurt consumers, especially card holders. Instead of seeing the prices at stores decrease (due to lower interchange fees), stores are predictably capitalizing on their increased profit margins. In fact, merchants in Australia are lobbying to further reduce interchange fees in order to further boost their profits.

As a result of regulations reducing interchange fees, card issuing banks have seen their profits diminish substantially and such profit losses are understandably coming at the expense of the card holders. Today, the consumers of Spain and Australia are seeing higher card holder fees, with decreased benefits (rewards). Neither of these outcomes benefits consumers. Additionally, banks and credit card companies often compete in order to attract individuals by offering benefits (or rewards for using the card). By inhibiting techniques that cardholder can employ to attract cardholders, regulators are interfering in the markets, distorting costs and hurting the very people that such overzealous regulations are meant to protect, the everyday consumer.

While in theory it would make sense that merchants pass on savings to consumers, as Evans, Chang and Joyce show in their study, this is rarely occurs in reality because it requires “perfect competition with constant unit costs.” Furthermore, Chang, Evans, and Joyce point out that because banks can decide how to distribute their costs, in a variety of fashions when they lose money due to lower interchange fees, banks can respond in a number of ways including reduced services, lower interest rates, etc.  Looking at data provided by CRA International, Banking fees in Australia reflect the adverse effects of the Reserve Bank of Australia’s interchange fee regulations of 2003. For example, after interchange fee regulations, annual fees increased for standard rewards cards by 77 percent between 2001 and 2004, and by an 39 percent between 2002 and 2004. Additionally, over-limit-fees increased by 367 percent in between 2001 and 2004, and 115 percent between 2002 and 2004.

A 2013 study conducted by Europe Economics in collaboration with Professor Sheri Markose found that if the European Commission’s proposals on restricting interchange fees, it would have multiple adverse effects on the UK economy. For instance, if the UK were subjected to the Commission’s current proposals, card issuers would lose revenues up to £1 billion, cardholders fees would rise up to £.33 for debit cards and £17 for credit cards despite there being no reduction in prices for consumers at the store.

Simply put, the way to protect consumers is to let the free market correct itself. Merchants are free to decide whether or not to accept credit and debit cards. While some businesses choose to not accept credit cards (as is their right), merchants more often than not choose to accept credit and debit cards because it is more advantageous for their business. Accepting cards as a form of payment allows the merchants to increase the likelihood that consumers will purchase in their store (or purchase more). Therefore, merchants, despite the interchange fees, come out benefiting.

With little more then a month until the EU elections, scheduled between May 22^nd and 25^th of 2014, it is the hope of the Property Rights Alliance that such a poorly crafted proposal will be not adopted by the Council of European Union and modified by the new, hopefully more pro-free market, elected MEPs that will take office in July 2014.

2014 European Elections: the vote is yours!

https://www.youtube.com/watch?v=mV1zeC36G4s

Jasper de Boer, a member of Europe-Yes team interviewed MEPs in Brussels. He asked them what they think about the elections in May, why this elections are different and why should people vote.