Private instead of state investment is an adventurous approach
Mr Schirdewan, what are the financial and economic policy priorities that the EU Parliament will be dealing with over the next five years?
We will undoubtedly argue about how the necessary infrastructure for the digital and green transition can be financed. After all, this is the basis for the future viability of society and the competitiveness of industry.
And what exactly will you be arguing about in the Econ Committee?
The first significant issue of contention will be the fiscal rules. I find it utterly unsatisfactory that these rules have now been reinstated. The conditions set for national budgets are heavy. We, therefore, need at least one further reform of the fiscal rules to enable investment in future growth. The second issue of contention is Capital Markets Union – and, with it, Banking Union.
A large number of MEPs are in favour of finally making concrete progress on CMU, in order to mobilise more private capital?
I have a decidedly different opinion on this. The flight from public investment to private investment caused by the strict debt rules entails huge risks – which we saw in 2008. The effects were a whole series of severe crises.
Does that mean that you are also against regulatory relief intended to revive the securitisation market?
The debate about reviving high-risk capital market products, such as mortgage backed securities, which were the trigger for the financial crisis, seems crazy to me. „Private instead of state“ is an adventurous approach, especially in view of the failure of markets over many years. The focus must be on reducing the risk of these instruments.
You mentioned the buzz phrase Banking Union: How does Die Linke (The Left) Party want to strengthen Europe's banking market?
We must consider how we can strengthen regional economic cycles, and Mittelstand companies in particular. The business models of savings banks and cooperative banks must be defended – for example, in connection with the planned rules on Crisis Management and Deposit Insurance. We will pay close attention to ensuring that the structure of regional banks can survive the trials and tribulations of the coming period. And we also need to think about how we can separate investment banking and retail banking within the institutions.
The EU legislators have already tried this once before– and the bill failed in the EU Parliament of all places.
Yes, I was even involved in the deliberations as a shadow rapporteur at the time. I can see, of course, that given the composition of the Econ, it will be challenging to gain a majority for a new attempt at separate banks. But it will play a role in our discussions about Banking Union and Capital Markets Union. And on these points the Left will introduce appropriate amendments to push the issue of a secure banking system.
Are there other issues that particularly concern you?
Yes, I am following the political debate about exceptions for the arms industry. I find it absurd to label armaments as sustainable. This requires just as much imagination as the equally incomprehensible categorisation of nuclear and gas as clean, sustainable energy sources.
One more word on ESG: How do you rate the preparatory work for a social taxonomy? Would it be helpful at all in your view?
I found the idea of the taxonomy very interesting at first, because it is essential to create incentives to support transformation. The problem was the exceptions, and the draft that was finally presented. The idea was reduced to absurdity. As far as the social taxonomy is concerned: investments in social infrastructure and the expansion of public services do not belong in private hands. This is where political perspectives differ. I do not support the further privatisation of public tasks.
––Martin Schirdewan recently announced his resignation as Federal Co-Chair of Die Linke. This will allow him to concentrate even more on his work in the Econ Committee of the EU Parliament.
