EU Matters - Issue 3/2015

EUROPEAN COMMISSION NEWS

The Commission has announced its plans for Energy Union which aims to remove barriers in the EUs internal market for energy and include a target for 10% interconnection of electricity grids across borders by 2020. 12 member states remain below the 10% target including the UK and Ireland. The EU imports 53% of its energy at an annual cost of €400bn. Energy Union will cut across a number of sectors - energy, transport, research and innovation, regional and neighbourhood policy, trade and agriculture. Vice President Maroš Šefčovič will steer the plans.

Commissioner for Climate Action and Energy Miguel Caňete has confirmed that Energy Union will be partly created through private finance guaranteed by public money. Energy Union comprises 5 pillars – energy security; renewables; energy efficiency; internal energy market; and research and innovation. 2 new financial instruments, the Private Finance for Energy Efficiency and Natural Capital Financing Facility, combine EIB loans with financing under the EU LIFE Programme for Environment and Climate Action

The Commission has launched its green paper consultation on Capital Markets Union which aims to make it easier for firms to raise money from the stock and bonds markets rather than relying on banks. The venture capital market in the US is around 5 times larger than that of the EU where businesses rely on banks for around 80% of their finance. The consultation will run until May 2015 and will be followed by an action plan and possible legislation.

Commissioner for Trade Cecilia Malmström has confirmed that the NHS will not be affected by the Transatlantic Trade & Investment Partnership (TTIP ) as the US has not sought to include public services in the negotiations.

The Commission has introduced aid for pigmeat from 9 March where the Commission will pay for part of the costs of storing pigmeat for 3-5 months. The aid is intended to stabilise the market in order to support pig farmers affected by the Russian import ban.

EUROPEAN PARLIAMENT NEWS

The Parliament has backed the introduction of a cap on the fees which retailers pay to process card transactions, with new fees limited to 0.2% for debit cards and 0.3% for credit cards. There are currently 760m cards in use in the EU and the Commission estimates the potential savings to be €6bn a year for retailers and €730m a year for consumers.

The Committee on Environment agreed that traditional biofuels made from food crops should be capped at a maximum of 6% of energy use in transport amid concerns on increasing food prices and emissions. The Committee on Transport & Tourism voted on legislation which aims to facilitate the use of more energy efficient HGV vehicles. The Committee on Civil Liberties, Justice & Home Affairs debated the proposed Passenger Name Record legislation.

GREEK BAILOUT

Greece reached an agreement with Eurozone partners to extend the bailout programme by four months. As part of the deal, Greece submitted a list of reforms it will commit to such as tackling tax evasion and corruption, streamlining pensions and reforming public sector wages.

The Greek government has tabled its first bill – to offer free electricity, food vouchers and rent allowances to low income households at an estimated cost of €200million. There are unconfirmed reports of Commission opposition to the bill as being inconsistent with the reforms required from Greece.

FLEXIBILITY IN EU BUDGET RULES

Under the EU's Stability and Growth Pact, eurozone countries must consolidate public finances until they reach balance or surplus. The Commission has granted France, which has missed its budget targets, a third extension and has also decided not to take disciplinary action against Italy where public debt is rising. Ireland is now also seeking flexibility in application of the rules in order to allow an increase in public spending.

VISIT BY AGRI COMMISSIONER HOGAN

The Committee for Agriculture and Rural Development will hold a meeting with the European Commissioner for Agriculture and Rural Development Phil Hogan on 27 March 2015 to discuss a range of EU issues. The meeting is part of the Commissioner’s visit to Northern Ireland where he will also meet with the DARD Minister Michelle O’Neill, MEPs and other stakeholders as well attend the annual UFU dinner.

JUNCKER INVESTMENT PLAN & UK

A report by ratings agency Standard & Poors has estimated that the UK will benefit almost twice as much as other large EU countries from the €315bn Juncker investment plan. The report states that for every €1.40 spent on the public sector an additional €1.40 would be added to GDP over 2015-17. The multiplier however for the UK would be on a scale of 2.5 compared to 1.2 for Germany and 1.3 for France.

EU SMALL BUSINESS ACT REVIEW

Findings from the European Commission’s consultation on the new Small Business Act show that the top concern is the administrative and legislative burden. The difficulties of accessing finance and tackling a lack of skills in SMEs were also highlighted.

DIGITAL AGENDA FOR EUROPE

The European Commission’s Digital Economy & Society Index (DESI) summarises indicators on Europe’s digital performance and includes progress by country. The scoreboard for the UK shows that while broadband prices are lowest in the EU as a proportion of income and use of online public services has risen, the demand for skilled ICT professionals outstrips supply. The scoreboard for Ireland shows that take-up of broadband in Ireland is lower than the EU average and in contrast to the UK; prices for fixed broadband are almost double the EU average when measured as a proportion of income, and have become more expensive over the last year. Irish SMEs have taken to eCommerce relatively more readily than those in most other EU Member States.

ENERGY INFRASTRUCTURE FUNDING

As part of plans under Energy Union, the Commission has opened the annual call for proposals under the Connecting Europe Facility to help finance key trans-European energy infrastructure projects. €100 million will be made available for projects aimed at ending energy isolation, eliminating energy bottlenecks and to complete the European energy market. With a total of €650 million for grants foreseen in 2015, this is the first of two calls planned for 2015.

RISE OF CROWDFUNDING FINANCE

Research has found that use of alternative online sources of finance such as crowdfunding and peer-to-peer loans is on the increase and predicted to reach €7billiion across the EU in 2015. Estimates are that almost 10,000 small businesses have used these alternative sources of finance in the last 3 years, with UK firms topping the list, accounting for €2.34billion in 2014, followed by France and Germany on €154million and €140million respectively. The European Commission has established an expert group on crowdfunding to explore its potential as a source of finance and consider the legal framework.

LATVIAN PRESIDENCY VISIT

The Chairs of the Committee for Agriculture & Rural Development, Committee for Culture, Arts & Leisure and Committee for Enterprise, Trade and Investment held a meeting with HE Andris Teikmanis, Ambassador of the Republic of Latvia to the UK to mark Latvia’s Presidency of the Council of the EU. Topics discussed included trade, support for business, agriculture, and the digital agenda. The Speaker also hosted a reception and concert with Latvian musicians.

ROAMING CHARGES & 5G

European Commissioners responsible for digital affairs are pushing for agreement on roaming fees and coordination of European spectrum which is vital for a telecom single market and development of 5G mobile communications. The European Parliament voted in 2014 to end roaming fees within the EU by December 2015 but the EU Council agreed a text which would allow companies to maintain roaming charges after 2016. Negotiations between the Commission, Parliament and Council will begin later this month. The Commission is due to present a European Digital Single Market strategy in May 2015.

EUROPEAN SEMESTER 2015

The Commission has released the latest country reports in the European Semester – the annual cycle of economic policy coordination for Member States. The latest report for the UK highlights progress in a number of areas including provision of infrastructure, access to finance for SMEs and tackling youth unemployment but highlights lack of progress in reducing child poverty, availability of childcare and supply of housing.

E-CIGARETTES TO BE TAXED?

Reports suggest that the European Commission is considering taxing e-cigarettes. Tax policy makers have been asked to consider the ‘ best way to achieve fiscal equal treatment’ between e-cigarettes and normal tobacco products. Currently the EU demands all member countries impose a minimum of a 57% excise duty on every packet of cigarettes purchased in EU. By contrast, in most EU countries e-cigarettes are only subject to VAT. Separately, a cross-party selection of MEPs has set up a group to tackle tobacco lobbying and its influence on policy-making.

ERASMUS+ KNOWLEDGE ALLIANCE

Louth County Council is leading a project to strengthen collaborative innovation partnerships between higher education institutions, SMEs and innovation support organisations. The 2 year ‘Innovation Alliance’ initiative was 1 of only 6 successful projects selected out of 240 bids for Erasmus+ funding. In the project 4 ‘territorial innovation alliances’ one being a cross-border venture between Louth and Newry & Mourne, will be devised.

STATE AID FOR NUCLEAR POWER PLANT

One of Germany’s largest energy cooperatives Greenpeace Energy, is taking legal action against the European Commission for approving £16billion in state aid for the building of Hinkley Point nuclear power plant by the French energy utility EDF. Hinkley will take 10 years to build and has a 35 year operating contract which pays a guaranteed price for power produced. This subsidy will be paid out of household energy bills. Greenpeace Energy claims that this subsidy will distort European competitiveness.

WELSH EU FUNDING AMBASSADORS

The Welsh Government has created a panel of EU Funding Ambassadors to promote and maximise opportunities presented by EU funding programmes 2014–2020. The appointments of Dr Grahame Guilford, Dr Hywel Ceri Jones, and Gaynor Richards MBE follow recommendations in inquiries by the Welsh Assembly Constitutional and Legislative Affairs Committee and the Enterprise and Business Committee.

VICTIMS RIGHTS DIRECTIVE

A new Directive, which updates a 2001 Framework Decision, provides minimum standards for the support and protection of victims of crime across the EU. Member States have until November 2015 to implement the requirements into national law.

UCAS TO INCLUDE EU UNIVERSITIES

UK students will now be able to apply to other EU universities through the UCAS system, formerly only for UK universities. There are currently 30,000 UK students studying in other EU states and the numbers are expected to rise given that tuition fees in the UK can reach £9,000 compared to £1,500 in the Netherlands.

IMPORTANCE OF CIRCULAR ECONOMY

The European Environment State & Outlook 2015 report, written by the European Environment Agency (EEA) has highlighted the importance of the circular economy and resource efficiency for well-being and competitiveness. The report follows the Commission’s controversial withdrawal of the proposed package of legislation on waste, packaging and landfill. The Commission has indicated that a replacement package of measures will be re-tabled before the end of 2015.

END OF MILK QUOTAS IN APRIL 2015

1 April 2015 marks the end of 31 years of production quotas for milk in the EU. Every member state produces milk and it accounts for 15% of agricultural output across the EU. The EU hopes that ending quotas will increase access to markets in South America and Asia which are currently supplied by the USA and New Zealand. Ireland’s plans to boost its milk production by 50% by 2020 are the most ambitious of all EU countries with forecasted growth across the EU as a whole predicted to be in single figures.

EUROPEAN CITIZENS’ INITIATIVE

Introduced to improve participative democracy, the ECI has been criticised as being overly complex and inefficient. The Initiative allows EU citizens to call on the European Commission to make a legislative proposal and requires one million signatures from seven member states. The Commission will publish a review of the initiative in April. To date, only 49 initiatives have been submitted to the European Commission. Only two – on the public right to water and on not funding research using human embryos – completed the entire process.

BIOMETRIC DRAGNET AT 6 EU AIRPORTS

In a pilot test of the EUs ‘smart borders’ package, non-EU nationals entering the EU will be asked to have their faces and fingerprints scanned at 6 EU airports. The scanning is voluntary but there may be plans to make it obligatory in future. The 6 test airports are in Sweden, France, Germany, Spain, Portugal and the Netherlands.

INTERREG & PEACE WORKSHOPS

In advance of the launch of the 2014-2020 INTERREG and PEACE programmes, the Special EU Programmes Body has organised a series of pre-application development workshops for potential beneficiaries.

HOUSE OF LORDS EU COMMITTEE

The EU Select Committee has announced an inquiry into the Government’s Review of the Balance of Competences between the UK and the EU and recently took evidence from Rt Hon David Lidington MP, Minister for Europe. The Committee will consider what the impact of the Review may be and aims to report by the end of March 2015.

Current inquiries being undertaken by the House of Lords EU Committee and its Sub Committees:

• Balance of Competences Review
• Capital Markets Union
• The UK’s Opt-In and International Agreements

Recently published:

• The North Sea under pressure: is regional marine co-operation the answer?
• A new EU Alcohol Strategy?
• Civil use of drones in the EU
• The EU & Russia: before and beyond the crisis in Ukraine

HOUSE OF COMMONS EUROPEAN SCRUTINY COMMITTEE (ESCOM)

ESCOM has announced an inquiry into the Transatlantic Trade and Investment Partnership (TTIP). The Committee took evidence from Mr David Gauke MP, Financial Secretary to the Treasury, on EU financial matters, including the EU Budget and the Investment Plan for Europe.

Other EU documents reported on by ESCOM include:

Business, Innovation and Skills: Protection of trade secrets; Single-member private limited liability companies; Earth observation satellite data;

Energy and Climate Change: Emissions Trading System and market stability reserve;

Environment, Food and Rural Affairs: Animal health law

Health: Regulation of medical devices;

Home Office: UK participation in the Schengen Information System; Europol;

Justice: Data protection in the EU;

Transport: Vehicle registration;

Treasury: European Global Adjustment Fund; Value added taxation.

UPCOMING EVENTS

24-25 March 2015 – Regen: Urban Regeneration conference, Liverpool

30 March 2015 – European Commission in Ireland: European Economic Policy - What’s in it for Ireland? , Dublin

31 March 2015 – Forum for the Future of Agriculture: Future of Agriculture Conference, Brussels

8 April 2015 – Creative Europe Desk UK: Creative Europe breakfast – cultural funding opportunities, London

15 April 2015 – Committee of the Regions: An Investment Plan for Europe: joining forces, Brussels

24 April 2015 – Northern Ireland European Regional Forum: Master Class – Europe for Citizens programme, Belfast

27-28 April 2015 – DG Regio: Clusters in regional economic development, Brussels

11-13 May 2015 – Latvian Presidency of the Council of the EU: E-Health Week, Riga

25 June 2015 – Environmental Protection Agency: networking event on Horizon 2020 Societal Challenge 5, Dublin

30 Sept – 2 Oct 2015 – European Network of Outdoor Sports: 3rd Nature and Sports Euro’meet, Newcastle, Co. Down

CURRENT EUROPEAN COMMISSION CONSULTATIONS

The list below shows a selection of open consultations. The full list of open Commission consultations is here.

Banking and finance
18.02.2015 – 13.05.2015 Building a Capital Markets Union 
18.02.2015 – 13.05.2015 Review of the Prospectus Directive 
18.02.2015 – 13.05.2015 An EU framework for simple, transparent and standardised securitisation

Communications Networks, Content & Technology
12.01.2015 – 12.04.2015 Public consultation on the Lamy Report: the future use of the UHF TV broadcasting band

Competition
17.12.2014 – 25.03.2015 Public consultation on proposed modifications to Regulation 773/2004 & Notices on Access to the File, Leniency, Settlements and Cooperation with national courts

15.01.2015 – 05.05.2015 Guidelines on the application of the specific rules set out in Articles 169, 170 and 171 of the CMO Regulation for the olive oil, beef and veal and arable crops sectors

Employment and Social Affairs:
19.02.2015 – 15.05.2015 Public consultation on service provision to long-term unemployed

Energy:
05.03.2015 – 15.04.2015 Consultation on the list of proposed Projects of Common Interest in the field of Smart Grids

Maritime Affairs and Fisheries:
09.02.2015 – 04.05.2015 Multi-annual plan for the North Sea demersal fisheries

Research and Technology:
23.02.2015 – 22.05.2015 Public online stakeholder consultation on the ex-post evaluation of the 7th Framework Programme

Transport:
28.12.2014 - 22.04.2015 Mid Term Review of the EU Maritime Transport Strategy 
10.03.2015 - 02.06.2015 Mid-term review of the 2011 White Paper on transport