EU Matters - Issue 8/2015

EUROPEAN COMMISSION NEWS

The Commission has published its Work Programme for 2016 entitled ‘No time for business as usual’. The programme is based on the 10 priorities outlined by President Juncker for the Commission’s 5 year mandate. Among the 23 key initiatives are a circular economy package; European bank deposit insurance, a digital skills agenda; modernisation of social rights; overhaul of the Dublin asylum system and creation of an EU border and coastguard, and a corporate tax package. There are 20 intended withdrawals or modifications of pending proposals and 40 REFIT actions to review existing EU legislation.

The Commission’s autumn economic forecast predicts that the Eurozone economy will grow by 1.6% in 2015 thanks to low oil prices, a weaker euro and the European Central Bank’s stimulus policy. Growth of 1.8% in 2016 and 1.9% in 2017 is forecast. Growth of the 28 member state EU economy is projected to be 2% in 2016 and 2.1% in 2017.

EUROPEAN PARLIAMENT NEWS

The Parliament rejected draft legislation which would enable a member state to restrict or prohibit the sale and use of GMO food or feed on its territory . MEPs said the proposal was unworkable and could lead to reintroduction of border checks between pro and anti GMO countries, in contravention of the principle of the single market. The proposed legislation will now be discussed at the Council. As reported previously, new legislation allowing such flexibility for member states regarding cultivation of GMOs came into force in April 2015.

The Parliament voted in favour of new regulations on novel foods which would make it easier to get them approved. Jim Nicholson MEP was rapporteur on the proposal. Novel food is either newly developed food or food which has been produced using new technologies including products such as insects, nanomaterials, fungi, algae and new colorants. It can also include food which is regularly consumed in other parts of the world but never traditionally eaten before in the EU. Novel foods will be subject to safety evaluation and authorisation at EU level. The proposal will now be considered at the Council.

REFUGEE CRISIS

According to figures from the UN refugee agency, 218,394 people journeyed across the Mediterranean to Europe in October 2015 – compared to 219,000 in the whole of 2014. All but 8,000 of these refugees landed in Greece, where 502,000 arrivals have been registered so far this year. More than 744,000 have made the journey so far in 2015. 3,440 have died or gone missing trying to make the journey. Currently it is estimated that there are around 40,000 people on the Western Balkans route travelling from Greece through Macedonia, Serbia, Croatia and Slovenia. According to the UNHCR, around 64% of asylum seekers are Syrians, 22% are Afghans and 7% are Iraqi.

European Council President Donald Tusk has called the fifth EU summit of 2015 on the migrant crisis which will be held in Valletta 11-12 November, the day after an EU-Africa summit on migration. The launch of the Africa Trust Fund of €1.8 billion aimed at dealing with the root causes of the refugee crisis is expected as well as finalisation of an agreement to pay Turkey in exchange for its cooperation in stemming the flow of refugees coming through its territory.

The European Commission amendments to the budget mean that it will spend €9.2 billion on the refugee crisis in 2015 and 2016. Member states committed to deploying national funding to match. The European Commission estimates that 3 million people will come to Europe by 2017, leading to a 0.4% increase in the EU population once unsuccessful asylum claims are subtracted. It predicts 1 million arrivals in 2015, 1.5 million in 2016 and 0.5million in 2017.

The European Asylum Support Office estimated it would take at least one year to process the outstanding 778,800 asylum cases if there were no new applications. 1/3 of the backlog involves people waiting at least 6 months for a decision.

BAILOUT FUNDS FOR GREECE

Agreement hasn’t yet been reached between the Greek government and its creditors on the first set of reform milestones needed to unlock the next tranche of €2 billion bailout funds. Differences remain between Greece and its creditors (the EU, the European Central Bank, the European Stability Mechanism and the International Monetary Fund) on foreclosures and non-performing loans – that is the level under which owners who do not pay their loans will have their house seized. The Eurogroup of Eurozone finance ministers has given Greece a week to reach an agreement with its creditors.

STABILITY & GROWTH PACT

Italy, Austria and Ireland have all formally requested budgetary flexibility under the Stability and Growth Pact due to the ‘exceptional circumstances’ they face with the rise in refugees. Under the Pact, Eurozone countries must consolidate public finances until they reach balance or surplus. The Pact contains flexibility clauses designed to grant Member States fiscal leeway to stimulate economic recovery, for example in relation to public investment. The Commission issued a communication on making use of the flexibility but some Member States regard that fiscal discipline should be strictly regulated.

EUROPEAN COMMITTEE CHAIRS MEET

The Northern Ireland Assembly will host the next meeting of the Chairs of European Committees of the House of Commons, House of Lords, Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly on 27 November 2015. Chairperson of the Committee for the Office of the First Minister and deputy First Minister, Mike Nesbitt MLA will represent the NI Assembly at the meeting where EU issues of mutual interest to the committees will be discussed.

HOUSE OF LORDS EU REFORM INQUIRY

The Committee for OFMDFM will meet with the House of Lords EU Committee on 26 November 2015 as part of its inquiry into the visions of EU reform . The House of Lords Committee inquiry is exploring the vision f or the future of the EU that the UK Government is seeking to realise through its current reform proposals, ahead of the referendum on UK membership of the EU to be held by the end of 2017. The Committee is assessing the extent to which there is consensus on the long-term direction of the EU within the UK, the EU institutions and across the 28 EU Member States. The Committee took evidence at the end of October from the Ambassadors of Denmark, Ireland and Poland on their views of the vision of EU reform.

END OF ROAMING CHARGES IN 2017

The European Parliament passed legislation on roaming charges at the end of October 2015. The current maximum roaming charges will fall from April 2016 – from €0.19 to €0.05 per minute for outgoing calls, €0.06 to €0.02 per text and €0.20 to €0.05 per MB of data. Roaming charges for calls, texts and mobile internet will be completely banned from 15 June 2017.

TTIP CHAPTER ON LABOUR RIGHTS?

In the 11 th round of negotiations between the EU and US on the Transatlantic Trade and Investment Partnership, the EU has proposed a chapter on labour rights and environmental protection which would aim to uphold the EU’s standards of labour and environmental protection. Commissioner for Trade Cecilia Malmström said “both sides would commit not to relax our labour and environmental protection laws as a means to attract trade and investments." The 12 th round of negotiations is expected in early 2016.

3.2 million people have signed the ‘Stop TTIP’ petition against TTIP and CETA (the EU-Canada free trade agreement). The organisers of the petition are seeking to be recognised as a ‘European Citizens’ Initiative’ - an instrument intended to provide an opportunity for EU citizens to ask the European Commission to take action on an issue. The Commission previously rejected the application stating that free trade agreements are not legal acts and therefore it cannot ‘make negative ratification proposals’. Stop TTIP handed over their petition to Martin Schulz, President of the European Parliament on 9 November, urging him to call a parliamentary hearing on the issue.

RULING ON APPLE’S TAX DEAL EXPECTED

Irish Finance Minister Michael Noonan has indicated that the European Commission’s ruling on whether Apple’s tax arrangements in Ireland were illegal is expected before the end of 2015. Margrethe Vestager, Commissioner for Competition, has said she does not yet have a date for the decision. Recent rulings by the European Commission’s antitrust regulators concluded that Starbucks and Fiat benefitted from illegal state aid in the Netherlands and Luxembourg and must repay millions of euro to the respective national budgets.

EU CRIMINAL RECORDS DATABASE

MPs will vote by the end of December on whether the UK should opt in to joining the EU criminal records database known as the Pr ü m system and the Government has published an assessment of the impact of joining the system. UK police forces would gain access to fingerprint, DNA and car registration records held across Europe in order to track foreign national suspects. Currently, the UK has to follow a process between the National Crime Agency and Interpol to get data from other police forces. There are concerns that joining the database could create a high volume of work for UK police forces and prosecution services if there was a high volume of demands from other forces for information and there are also concerns that other countries use lower quality DNA matching criteria.

JUNCKER PLAN - FIRST UK PROJECT

The European Investment Bank will provide £225 million for the construction of Galloper Wind Farm Ltd. off the coast of Suffolk. The EIB is supporting the project along with a consortium of 12 commercial banks. This is the first UK project to be backed by the European Fund for Strategic Investment and once operational will be capable of supplying energy to up to 336,000 homes. The £1.5 billion project is set to create over 700 jobs during construction and nearly 100 once operational.

FINANCE FOR MICRO BUSINESSES

The European Investment Fund (EIF) has signed guarantees with six finance organisations to open up access to finance for micro enterprises. The guarantees are part of the European Programme for Employment and Social Innovation (EaSI) and will mobilise €237 million of loans to 20,000 micro businesses. The EIF manages the programme on behalf of the European Commission which has contributed €17 million to the guarantees. One of the guarantees is with Microfinance Ireland. The EaSI guarantee of €96 million is expected to leverage €500 million in loans over 2014-20 in order to promote jobs and growth.

NEW DEAL ON SME ACCESS TO FINANCE

The European Investment Fund has signed a deal with Bank of Ireland to allow the bank to enter into new loan agreements with SMEs and small midcaps for a total of €100 million over the next 2 years. The loans to finance innovation activities will be guaranteed up to 50% by the EIF under the ‘InnovFin SME Guarantee Facility’ which targets early and development stage companies. InnovFin is one of the financial instruments developed under Horizon 2020 to help innovative firms access finance more easily.

NEW TASK FORCE ON AGRI MARKETS

The European Commission is establishing a new Agricultural Markets Task Force which will look at the position of farmers in the food supply chain and issues of collective bargaining and fair distribution of profit along the food supply chain. The Commission has issued a call for experts from across the EU to make up the Task Force which will meet throughout 2016 and will provide advice to the Commission’s Directorate General for Agriculture & Rural Development.

UK DEMANDS ON EU REFORM

Prime Minister David Cameron set out his demands for EU reform in a speech on 10 November 2015. The speech highlighted the content of his letter to President of the European Council Donald Tusk which will provide the basis for the negotiations with EU leaders. The aim is to conclude negotiations in time for the European Council meeting on 17-18 December 2015. The key demands are:

Protection of the single market for Britain and other non-euro countries through a set a binding principles
Boosting competitiveness for businesses and reducing the regulatory burden
Exempting Britain from ‘ever closer union’ and bolstering the role of national parliaments in EU law making
Tackling abuses of the right to free movement and restriction on EU migrants’ access to in-work benefits

In an initial response to Mr Cameron’s letter, a European Commission spokesperson said “We see a number of elements which appear to be feasible, like finding ways to increase the role of national parliaments; some issues that are difficult, like ever-closer union and the relationship between euro Ins and Outs; and some things which are highly problematic as they touch upon the fundamental freedoms of our internal market. Direct discrimination between EU citizens clearly falls into this last category.”

A spokesperson for European Parliament President Martin Schulz said “It’s good that now the UK’s requests are set out officially. We have strong doubts about the legality of a four year ban on access to welfare benefits for EU citizens but let’s see what specific ideas the UK government will come up with in the end in this area.”

SCOTLAND & EU MEMBERSHIP

The Scottish Parliament Information Centre has published a briefing paper on the impact of EU membership in Scotland as part of the European and External Relations Committee inquiry into ‘EU reform and the EU referendum: implications for Scotland’.

CHURCH BLOG ON EU REFERENDUM

The Church of England and Church of Scotland have launched ‘Reimagining Europe’ a blog on ‘Christian Reflections on the EU Referendum’. The blog has two streams – firstly a conversation on current themes with experts from different theological and political backgrounds; and secondly a ‘Postcard from…’ series of one-off contributions. The blog was launched by the Archbishop of Canterbury in October 2015.

HOUSE OF COMMONS EUROPEAN SCRUTINY COMMITTEE (ESCOM)

At its meeting of 28 October 2015 , the Committee recommended for debate documents on the Capital Markets Union; EU Military Operation in the Southern Central Mediterranean; and the European Agenda on Migration. The Committee retained under scrutiny documents on Europol; the proposed Data Protection package; and the proposed Equal Treatment Directive.

Ongoing inquiries:

HOUSE OF LORDS EU COMMITTEE

As previously reported the Committee’s inquiry on ‘Visions of EU reform’ is ongoing. Recently published reports include The EU Action Plan against migrant smuggling; The referendum on UK membership of the EU: assessing the reform process ; and the UK opt-in to the proposed Council Decision on the relocation of migrants within the EU.

Ongoing inquiries:

Visions of EU reform

UPCOMING EVENTS

13 November 2015 – European Parliament Office: Meet Your MEP – Martina Anderson , MAC Belfast

13 November 2015 – Committee of the Regions & Association of European Border Regions: Future of cross border cooperation in Europe , Brussels

16 November 2015 – EU Debate NI: official launch , Queen’s University Belfast

16 November 2015 – NI Assembly & Business Trust: Brexit – how could it affect trade, agriculture and investment? , Parliament Buildings

18 November 2015 – Centre for Cross Border Studies: Public Policy briefing including implications of a UK withdrawal from the EU , Parliament Buildings

26 November 2015 – UK National Agency for Erasmus+: Erasmus+ Information session , MAC Belfast

26-27 November 2015 – European Commission: European Cultural Forum , Ixelles

2 December 2015 – Rethink: Farm Modernisation and Rural Resilience , Brussels

9 December 2015 – Committee of the Regions & Eurochambres: Putting SME internationalisation into practice – tools available to regions and cities , Brussels

11 December 2015 – European Parliament Office: Meet Your MEP – Diane Dodds , MAC Belfast

18-19 February 2016 – Centre for Cross Border Studies: Bordering Between Unions – What does the UK referendum on Europe mean for us? , Dundalk