Europe weak in the face of economic blackmail

Europe weak in the face of economic blackmail

Just days after the anniversary of the D-Day landings of June 6, 1944, France’s present-day American allies continued their recent habit of making a mockery of multilateralism.

President Donald Trump has slapped Europe in the face and flouted his disregard for the G-7 countries and our international institutions. One tweet, a little 280-character message, was enough to turn the G-7 summit, which had just ended in Canada, into a failure, leaving a bitter aftertaste and an impression of relegation.

This was yet another slight by the US, which strives to impose economic dominance over Europe. Just a few days ago, I was questioning the French government, specifically the Minister for the Economy and Finance, Bruno Le Maire, about the measures he intended to take to protect our companies from the extraterritoriality of American law.

The answer was pathetic. This topic of extraterritorial US laws has plagued France and Europe in general for decades. Between 2014 and 2016, French companies had to pay 20 billion euros ($23.6 billion) in fines. BNP Paribas won the high score and paid a fine of 8 billion euros, an unprecedented sum, in 2014.

Simply using the dollar for transactions, or even having an email address whose server is located in the US, is enough to warrant investigation by the Americans.

France is, of course, not the only European country affected. Germany, for example with Siemens and Volkswagen, has not been spared from the extraterritoriality of American law.

Today this form of blackmail affects our companies in Iran, but tomorrow the whims of an unpredictable president will perhaps target a different country. Total and other French companies are preparing to leave Iran, while their Chinese and Japanese counterparts will stay.

Our companies capitulate to blackmail, as SNCF did when it was found guilty in the eyes of American contractors of having been an accomplice to the Holocaust. They were excluded from bidding on American territory until the signing of an agreement and a payout of $60 million to the US families of Holocaust victims.

A true “Swiss Army knife” at the service of its hegemony, the US has a formidable weapon in the Department of Justice. With 113,000 employees and a budget of $29 billion (64 percent of which comes from fines imposed on companies and foreigners), it has the ability to expel any company from the US market, as it threatened to do to BNP Paribas simply by removing its banking status in the US.

Europe is diplomatically and economically submissive; just look at the relocation of the American Embassy to Jerusalem. There is no other way around it, American power is fact. Any national solution is not sufficient, the response must be European.

Nathalie Goulet

This unscrupulous extraterritoriality of US laws is also proliferated through the unsubtle application of the Foreign Corrupt Practices Act of 1977, which allows the US to track corporate malfeasance anywhere in the world. As long as transactions pass through the US financial circuit, the use of the dollar is enough to warrant investigation and action.

The Department of Justice cooperates equally with the National Security Agency — this clever concoction of protectionism and the extraterritoriality of the dollar quite naturally aids American companies through the timely weakening of foreign competitors from countries that are unable to retaliate.

So not only are France and Europe unable to protect their businesses, but they are weak and divided against economic strong-arming. Admittedly, the French law known as “Sapin II,” which was inspired by the FCPA and came into force in June 2017, attempted to promote the extraterritoriality of French law; yet its real-world effect seems considerably uncertain.

So what is Europe’s economic counter-attack? The European Commission would undoubtedly be the major player, not through revenge, but through law. In 2016, it condemned Apple with a fine of 13 billion euros for illegal tax benefits in Ireland, and imposed a fine of more than 2.4 billion euros on Google for its abuse of market dominance.

However, Europe remains divided and weak, subject to Brexit, selfishness and multiple protectionisms, while unable to adequately enforce rules of fairness or reciprocity.

Europe is diplomatically and economically submissive; just look at the relocation of the American Embassy to Jerusalem. There is no other way around it, American power is fact. Any national solution is not sufficient, the response must be European.

Being prey to the most dangerous nationalism and an unprecedented migration crisis, Europe is focused on security issues and the fight against terrorism, and is unable to sufficiently react.

This diplomatic bullying is unlikely to die down soon, but France will charge forward, continuing the debate over the taxation of the tech giants known as GAFAM — Google, Apple, Facebook, Amazon and Microsoft — and regulation to tackle fake news.

I believe a solution may lie in a speech I heard at the recent Lennart Meri Conference held in Tallinn. In a highly persuasive speech, journalist Nik Gowing invited us to “think the unthinkable.” He said we should break out of our usual way of thinking, leave behind our naivety, refuse to be passive and invigorate our collective response.

So let us think the unthinkable: A strong Europe, not through its regulations, but through its actions. We must think the unthinkable of European solidarity, united in order to make the American president listen to a response adapted to the contempt he has shown us.

 

Nathalie Goulet is a member of the Senate of France, representing the Orne department (Normandy). Twitter: @senateur61

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