EU Matters - Issue 5/2015

Synopsis:

EUROPEAN COMMISSION NEWS

The Digital Single Market strategy was launched on 6 May and as reported previously includes 3 pillars – better access for consumers and businesses to digital goods and services across the EU; creating the right conditions and a level playing field for digital networks and innovative services to flourish; and maximising the growth potential of the digital economy. The Commission estimates that a fully functional digital single market could contribute €415bn per year to the economy and create hundreds of thousands of new jobs. The strategy contains 16 key actions to be completed by the end of 2016. Legislative proposals for EU copyright are expected by the end of this year.

On 19 May, First Vice President Frans Timmermans announced plans on ‘better regulation’ - the Commission’s drive to improve the quality and efficiency of EU law and cut bureaucracy. Key aspects include a new legislative board - the Regulatory Scrutiny Board (RSB) - to assess the quality of the impact assessments which the Commission produces on its draft legislative proposals. The RSB will be able to carry out retrospective evaluations as well as scrutinise legislation which is still in development and will then issue advice to the Commission which it will also publish.

A new ‘REFIT Platform’ will also be established to focus on the Regulatory and Fitness Performance Programme (REFIT) – the Commission’s initiative to cut red tape and simplify EU law. The Platform will focus on the administrative burden EU laws place on SMEs as well as the measures implemented by each member state to comply with EU law. The body will seek to collect comments and feedback on EU regulation and a new website ‘Lighten the Load – Have Your Say’ – will allow the public to comment on EU legislation. These measures are seen as a key component of President Juncker’s stated priority of cutting red tape for small businesses.

EUROPEAN PARLIAMENT NEWS

The Parliament agreed a resolution that a new EU Alcohol Strategy should include plans for including the calorie content of alcoholic beverages on labels and also called on the Commission to submit a legislative proposal on the issue by the end of 2016. The previous EU Alcohol Strategy expired in 2013 and has not been replaced. The Commission is due to publish its report on alcohol labelling by the end of this year.

Negotiations continue on the European Commission’s proposal on novel foods. As reported previously, Jim Nicholson MEP is the rapporteur, drafting the report for the Parliament’s Committee on the Environment, Public Health and Food Safety, and leading on seeking agreement on the Parliament’s position.

JUNCKER PLAN INVESTMENT

An Irish project to build 14 primary care centres is one of the first projects announced under the EFSI - the European Fund for Strategic Investments. The European Investment Bank and the European Investment Fund will fund €70million of the construction costs and the long term low interest loan will be a partnership between private investors and the Department of Health. The entire project is expected to cost €142 million. The other projects included in this first tranche of funds from EFSI are investment in healthcare research in Spain; expansion of a key airport in Croatia; and backing for industrial innovation in Italy.

EUROPEAN SEMESTER 2015

The European Commission has published the 2015 reports on the European Semester, the annual cycle of economic policy guidance and surveillance in which the Commission analyses the fiscal and structural reform polices of each Member State, provides recommendations and monitors implementation. Recommendations for the UK for 2015/16 include correcting the deficit, in particular by prioritising capital expenditure; boosting the supply of housing; and addressing the skills mismatch - by increasing use of apprenticeships, reducing the number of young people with low skills and improving availability of affordable childcare.

The UK has been subject to the Excessive Deficit Procedure (EDP), the corrective arm of the European Stability and Growth Pact, since 2008. The EDP sets limits of maximum 3% of deficit to GDP and 60% of debt to GDP. The Commission’s report for 2015 finds that the UK has not taken sufficient action to correct its excessive deficit which stood at 5.2% for 2014-15. The Commission will now give the UK two years to bring its excessive deficit situation under control, with a target of 4.1% in 2015-16 and 2.7% in 2016-17.

ECONOMIC CRISIS IN GREECE

In the continuing economic crisis in Greece, the government is moving ahead with plans to sell a key public asset, its biggest port Piraeus, in a concession to its international creditors. Greek banks have repeatedly drawn down emergency funds from the European Central Bank through its Emergency Liquidity Assistance fund but this has proved controversial given that Eurozone rules prevent the ECB from directly bailing out member states. Recently published GDP figures have revealed that the Greek economy has returned to recession but separate figures show that Greece had a primary budget surplus (excluding its debt repayments) in the first 4 months of 2015.

DENMARK & BANKING UNION

Denmark is to consider joining the EU’s banking union, a set of common rules for banking to prevent further financial crises. A report by the Danish Ministry for Justice concludes that Denmark won’t be giving up sovereignty by joining the banking union and therefore a referendum won’t be necessary. Denmark opted out of 4 EU policy areas in the Maastricht Treaty - Monetary Union (EMU), Common Security and Defence Policy (CSDP), Justice and Home Affairs (JHA) and the Citizenship of the European Union – which means that new EU initiatives often require a national referendum. The Danish government is in favour of joining banking union.

MIGRANT QUOTA PROPOSAL

The migrant crisis in the Mediterranean has prompted calls from Germany for a quota system for distribution of migrants among the 28 member states. Last year, Germany fielded about one-third of the 626,000 claims for asylum in the EU. Proportionate to population, this was less than Sweden, but higher in number than any other EU country. Between them Germany and Sweden deal with 45% of all asylum claims in the EU. Volume of immigration is not a competence of the EU and is determined by each member state itself. The Commission has now issued such a proposal for a migrant quota, however Donald Tusk, President of the European Council of heads of member states indicated that the issue was ‘difficult and sensitive’. Spain, France, Poland, Czech Republic, Estonia, Hungary, Latvia, Lithuania and Slovakia have all said they will not accept quotas. The proposal is due to be discussed at the EU Council meeting on 25 June. The UK has an opt-out of justice and home affairs policy and has already indicated it would not participate in any quota system. Ireland and Denmark also have similar opt-out arrangements.

Separately, there are differences of opinion on the success of Operation Triton, the EU’s operation which focuses on border surveillance. Triton was introduced to replace Mare Nostrum, the EU search and rescue mission, which was abandoned last year. Triton had a budget of about a third of that for Mare Nostrum but an extraordinary summit of the EU Council at the end of April agreed to treble the annual funding to €120million.

COMMISSION VICE PRESIDENT VISIT

European Commission Vice President Jyrki Katainen in charge of the Jobs, Growth, Investment and Competitiveness portfolio brings the EU Investment Plan roadshow to Dublin and Belfast on 21 and 22 May 2015. VP Katainen is taking the roadshow around member states to highlight President Juncker’s Investment Plan for Europe and discussing the mobilisation of investment finance; the new project pipeline of viable projects; and regulatory reforms. As part of his visit, Vice President Katainen will speak at a conference in Dublin on ‘Investing in Europe’s future: Digital Opportunities for Ireland’.

It is expected that Commissioner for Regional Policy, Corina Creţu will visit Northern Ireland on 29-30 June.

INVESTOR-STATE DISPUTE SETTLEMENT

In an effort to resolve the controversial issue of investor state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership negotiations between the EU and the US, Commissioner for Trade Cecilia Malström has announced plans for a global court to rule on disputes between investors and governments. Opponents of ISDS argue that secret arbitration on trade disputes facilitates businesses in suing governments for passing social protection legislation that can harm their business interests. The Commissioner briefed the Parliament’s Committee on International Trade on the proposals however the US negotiation team has since rejected the proposal for an investment court and wants to retain the ISDS mechanism.

EMISSIONS TRADING STABILITY RESERVE

Negotiations between the European Parliament and EU Council have reached a deal on a market stability reserve for carbon credits which will be effective from January 2019. The Emissions Trading System (ETS) requires EU companies from sectors such as power/heat generation, steel and cement to have permits for every tonne of carbon dioxide emitted each year. These can be traded but a surplus of allowances has reduced the cost of emissions to under €8 per tonne of CO 2 and thus is not an incentive to reduce emissions. The Commission proposed a market stability reserve and negotiations have been ongoing between countries on a start date for the reserve. The deal has yet to be formally agreed by the Council and the Parliament and the Commission plans to propose reform on the ETS before the end of the year.

ECJ PLANS FOR MORE JUDGES

The European Court of Justice has proposed reform which would see a doubling of the number of judges to 2 from each member state, at an estimated cost of €23m per year. The proposals from ECJ president Vassilios Skouris are aimed at clearing a backlog of cases but the changes are opposed by the judges themselves who would rather see a smaller increase in the number of judges and a greater increase in numbers of legal assistants. The European Parliament’s Committee on Legal Affairs took evidence on the plans in a closed session.

HORIZON 2020 SME INSTRUMENT

161 companies from 23 countries have been selected under the latest round of Horizon 2020 SME instrument phase 1 funding – a success rate of 60.1%. The companies will receive €50,000 for feasibility studies and can also avail of 3 days of business coaching. Spain had the most success with 34 funding beneficiaries, followed by Italy with 25 and the UK with 18. No Northern Ireland companies are included in this latest round of funding. As reported in a previous EU Matters, Belfast based ProAx-SIS is the sole Northern Ireland beneficiary to date.

Since the launch of the programme in January 2014, 816 SMEs have been selected under Phase 1 of the SME Instrument. The top 3 countries in terms of success rate in 2014 were Iceland, Ireland and Sweden. A map of the beneficiaries is here.

INFRINGEMENT: DRIVING LICENCES

The Commission has asked the UK to fully transpose a Directive on driving licences. The Directive prohibits the possession of more than one licence and also requires that drivers of lorries and buses are checked for minimum health requirements upon renewal of their licence, rather than relying on self-assessment. The UK now has 2 months to respond.

GENETICALLY MODIFIED ORGANISMS

As a result of its review into the decision making process for authorisation of genetically modified organisms used in food and animal feed , the European Commission is proposing legislation to give member states greater power to control the growth of GMOs in their territory. When a GMO is approved at EU level, member states will have the option to opt out of from allowing its use. US negotiators on the TTIP have expressed their disappointment.

AIR QUALITY RULING

The UK Supreme Court has ruled that the Government must produce new plans to reduce air pollution by the end of 2015 in order to comply with the EU Air Quality Directive. As reported in a previous EU Matters, the case was brought by environmental NGO ClientEarth who sought to compel the Government to take action to reduce nitrogen dioxide levels. The Government had previously argued that the drawing up of plans was sufficient to meet its obligations under the Directive.

EU URBAN AGENDA

On 2 June the European Commission will reveal the results of the public consultation on the EU Urban Agenda and will also discuss the steps to implement the agenda. The consultation focused on the urban dimension of EU policy making and the role of cities in rolling out EU and national policies.

EU SCIENTIST PANEL TO BE APPOINTED

Following the controversial abolition of the role of EU Chief Scientific Advisor (CSA) last year, the European Commission has announced that it will appoint a panel of scientific experts to provide independent advice to the Commission. Scottish biologist Prof. Anne Glover formerly held the role of CSA. Commissioner for Research, Science and Innovation Carlos Moedas will recruit a panel of seven experts to be in place by autumn 2015 to give independent and transparent advice to the Commission to assist in the development of evidence based policy.

UK REFERENDUM ON EU MEMBERSHIP

A UK referendum on EU membership could be held in 2016, rather than 2017. Prime Minister David Cameron had pledged that the referendum would be held by the end of 2017. Given that elections are scheduled for spring 2017 in France, and September 2017 in Germany, a 2016 date may be set. The UK will also hold the Presidency of the Council of the EU in the second half of 2017 and an earlier referendum could avoid any conflict between the Presidency holder’s role as an ‘honest broker’ in chairing meetings of the EU Council and the UK’s renegotiation efforts.

The referendum will require legislation; expected to be introduced to the House of Commons shortly after the Queen’s speech on 27 May. The bill could pass through the House of Commons and House of Lords by June 2016, paving the way for a referendum in July or in autumn 2016 after the parliamentary summer recess. A referendum will be preceded by UK negotiations with the EU and it is expected that the Prime Minister will outline his proposals at the European Council meeting on 25 June 2015.

‘EUROPE FOR CITIZENS’ FUNDING

The Northern Ireland European Regional Forum held a Masterclass on the ‘Europe for Citizens’ funding programme on 24 April 2015. This programme funds projects focusing on remembrance; democratic engagement and civic participation. European Commission official Bruno Denis from DG Home provided details on the types of projects which could be funded and highlighted that the UK has previously been underrepresented in securing funds from this programme. Pat Mulvenna from the North East Partnership also highlighted the experience of securing funds from the programme for the ‘EUPLETT’ project which twinned Ballymena with four other EU towns in sharing practice in the creation and development of vibrant small town centres.

ENVIRONMENTAL PROJECT FUNDING

Northern Ireland Environment Link held an event focusing on European environmental funding opportunities on 1 May 2015. The event included presentations on opportunities for funding under INTERREG VA, VB & VC; the LIFE programme and Horizon 2020. NIEL plans to facilitate additional detailed sessions on specific EU programmes and measures which provide support for environmental actions. Organisations wishing to participate should contact NIEL.