European Union

DRAFT OPINION on the proposal for a regulation of the European Parliament and of the Council on the use of the Schengen Information System for the return of illegally staying third-country nationals
Committee on Foreign Affairs
Hilde Vautmans

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Source : © European Union, 2017 - EP

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Argentina has a long tradition of European immigration which has led to strong economic, social and cultural transatlantic links with the European Union. The Framework Trade and Economic Co-operation Agreement between the EU and Argentina entered into force in 1990. It includes as fundamental principles two recurrent cornerstones of our cooperation policy: the strengthening of democracy and human rights, as well as regional integration.

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Lounes
Citizenship of the Union
According to Advocate General Bot, a non-EU national may benefit from a right of residence in the Member State in which his EU citizen family member resided before acquiring the nationality of that Member State and developing a family life there

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Across the world, in the wake of massive disruptions in demography, technology and the economy, large numbers of citizens are struggling to adapt and popular pressure is building on governments to deliver solutions. From Lebanon and Malaysia to Guatemala and Romania, there are demands for real reforms and to address real problems: to counter corruption and generate decent jobs; to provide access to health and education; to modernize infrastructure and to collect the rubbish.

Much popular dissatisfaction today is driven by the failure of governing elites to respond to the wants and needs of the people. In a connected world, this gap between government and the people has become perilous. To respond to rising pressure, governments must put citizens’ needs and preferences at the centre of decision-making, and ensure that the people’s voice is heard.

In some places, such pressure is dismissed as ‘populism’, in the face of unruly and prejudiced street movements. Elites have been too quick to dismiss this popular backlash without trying to understand the underlying issues. While some people’s participation in populist movements can be explained by racist or xenophobic thinking, the majority are those who see their jobs disappearing and feel uncertainty about their futures.

The movements are in large part about whether governments are responsive to citizens, who are now expressing their distrust of an establishment that they see as self-serving and unresponsive to their needs and demands. They believe that the policies advanced in the halls of power and bureaucratic offices don’t adequately address their problems and fears.

Very often, they’re right. Decisions are taken at too high a level in bureaucracies that seem far removed from people’s daily lives. Policymakers have, in some cases, advanced an agenda that appeals to urban and moneyed elites, but ignored the industrial heartlands. Globalisation hasn’t delivered on the promises made to working class constituencies. The Naples and Seattle protests against the World Trade Organization in the 1990s were a precursor to the Occupy movement a decade later; a foretaste of danger to come. Real wages have not risen in the United States for 15 years. And in the wake of the 2008-9 financial and fiscal crisis, the wealthy had their bailouts, but regular people did not.

If, in response to popular discontent, political parties continue to dig in their heels, the populist agenda will become more and more divisive. The better approach is for political leaders and parties on both the left and right to take the public’s concerns seriously and seek to identify a common and coherent agenda around which both sides can rally. Ensuring that governments are responsive to the needs and desires of their people, both in what they provide, and in how they provide it – allowing citizens to participate in decision-making – will be essential.

“We must recognise that governments are in place to serve their citizens, not to service the needs of the bureaucracy”

Courses of action will of course vary by country, by region and by city. But these should be based on a set of six core principles.

First, recognise that governments are in place to serve their citizens, not to service the needs of the bureaucracy. Political parties must do a better job at setting policy agendas that focus on responsive governance for all citizens and not just vocal interest groups or the portion of the country that voted them into power. Governing agendas must address citizens’ basic needs: healthcare, education, infrastructure, skills and quality jobs.

Second, understand the importance of the way government policy is implemented. Vast networks of lobbying companies, big consulting firms and government budget insiders cut sweetheart deals with each other and capture policy for special interests. Officials often use a ‘revolving door’ to switch from government to company, and vice-versa. Pressure groups consciously or unwittingly block the forces of positive disruption that would shock governments into adapting to today’s world. This flow of influence, budgets and contracts does not serve the broader public.

Third, government services should take advantage of the digital age and be reinvented as platforms for service delivery. Critically, these platforms must be seen as public utilities. We must resist the temptation to let them be privatised and monopolised by corporations – a recipe for neo-feudalism and exclusion. And services must become cheaper: the (inflation-adjusted) costs of core services such as healthcare, education and social services have risen dramatically over the last 50 years. People are paying more but receiving less. An embrace of cost-effective digital delivery can enable faster decision-making cycles and allow for greater responsiveness to citizens’ concerns.

Fourth, understand that the voice and participation of citizens is essential. People have felt ignored, neglected, looked down upon. The desire to make themselves counted – sometimes quite literally as one of many at a protest – is in part a consequence of being excluded from decision-making. In most countries, channels for public participation exist – sitting on a school board, lobbying an elected representative, or taking part in a consultation – but these do not necessarily meet the needs of today’s citizens. The American political philosopher John Dewey, writing in the 1920s, argued that the state is just a mechanism that should do what citizens want it to do in any moment in time; the challenge is how to find the right mechanisms to produce a public consensus on the role and functions of the state. For citizens, good governance means being heard.

This requires mechanisms for governments and the media to listen to people and to understand the specific drivers of disaffection and malaise. Instead of dismissing vast constituencies, these centres of power must try to understand the root causes of their distrust of the elite by really hearing what those communities have to say, and then put forward constructive policy measures to address the issues raised.

“We must guard against nationalism but preserve a common sense of nationhood”

Fifth, recognise that a common identity for a political community is healthy. Identifying on the basis of membership in a nation state has great advantages. We must guard against nationalism – meaning rejection of the ‘outsider’ or the supremacy of the state over the individual (rather than the state being the servant of the people). But to preserve the sense of common political community that underpins our democratic system, it is important to have a common sense of nationhood, and a common identity based on a location – whether a city, province, state or nation – in the form of civic nationalism. This can also balance the current trend towards identity politics.

Sixth, anticipate the future. The countries that are adapting to our new century well are those that are thinking ahead and using foresight tools and policy planning to craft industrial and post-industrial strategies. As new technologies and economic realities continue to disrupt the landscape there will be a measure of adapting to the inevitable, but there is still vast scope to shape the policy environment to the needs of people.

What would these principles mean for different parts of the world today? In the Middle East, six years on from the false dawn of the Arab Spring, people are still protesting in the streets and agitating online, refusing to give up the search for more responsive government. In countries that have experienced decades of authoritarian rule, the social contract between citizen and state has been fractured, and must be rebuilt. In the United States, a new common agenda is needed to link the middle of the country and its coastal regions, based on core common interests – decent work; opportunity; cost-effective education and healthcare; revived infrastructure.

In Europe, it means rethinking the European idea so that it puts the needs, interests and desires of its citizens at the centre, and gives real meaning to the principle of subsidiarity, allowing nation states to set their own agenda and continuing to allow local regions to find the right policy mix for their circumstances. Across these regions, we must recognise that cities, states and districts are where the bulk of decisions are made – and that the question is usually not a stark choice between centralisation and decentralisation but figuring out at which level each function should be provided.

Citizens are on the march. If the governing elites do not respond, in the form of more responsive government and more accountable leadership, the voices will only get louder. But if governments get ahead of the trends, there is a pathway to renew the social contract and reinvent government for the 21st century.

IMAGE CREDIT: chris cintron/Bigstock

The post Do you hear me? appeared first on Europe’s World.

The aim of the workshop was to provide an overview of the EU arms export control system as well as options for improvement. The main speaker, Dr Sibylle Bauer, Director of the Dual-Use and Arms Trade Control Programme at the Stockholm International Peace Research Institute (SIPRI), provided a brief overview of the main elements of the EU Common Position 2008/944/CFSP and then focused on aspects related to strengthening implementation of the eight criteria of the Common Position, the enhancement of compliance with the reporting obligation by Member States, possible ways to increase the transparency and public scrutiny of the export control framework and the development of the EU’s institutional framework in this context. Her presentation was followed by a debate involving members of the Security and Defence Committee of the European Parliament, the outcome of which may feed into the EP Annual Report on Arms Export.
Source : © European Union, 2017 - EP

On 28 May 2017, European Council President Donald Tusk participated in a panel debate called "European (Dis)Union?"  during the Globsec forum in Bratislava with Robert Fico, the Prime Minister of Slovakia, and Bohuslav Sobotka, the Prime Minister of the Czech Republic.

Below you can find some of President Tusk's main quotes from the debate. At the bottom is also a link to the full recording of the debate.

On the G7 Summit and transatlantic relations

"I think that our meeting in Taormina as G7 is the best evidence that rumours about the decline of the west is a clear exaggeration. "

"I feel more optimistic now after the G7 meeting than I had personally  expected, and this optimism includes relations with our new partners around the table and I mean especially with President Trump."

"My impression after this meeting is that cooperation among G7 members, including the transatlantic cooperation between Europe and the United States, can be easier than what we expected immediately after the elections in the United States."

On multi-speed Europe

"There is nothing new and nothing extravagant in talking about specific and different political or legal formats in the EU. First of all, the possibility of enhanced cooperation among a group of member states is foreseen by the treaties and the most spectacular examples of this enhanced cooperation could be the Eurozone or Schengen. It is quite natural for such a very complex political system like the EU to have differences and different levels of integration.  We also have different political clubs like the Visegrad group, the Weimar triangle, the Benelux or the Nordic countries.  My previous experience as PM is that they were and are very useful in the process when we are looking for a compromise."

"In fact, the real threat to the European Union today is not the different speeds, being two or multi-speeds, or the different levels of integration - this is already our political reality,  it was always our reality and it will remains our reality in the EU. The real threat is the different destinations or different directions. For me the biggest problem in Europe is that we today have some political parties, some governments, politicians, media etc. who are questioning the essence of the EU, the essence of Europe. By essence, I mean the values of liberal democracy, freedom, tolerance, freedom of speech."

On the migration crisis and terrorism

"Europe is still the most open continent or the most open place in the world for refugees and migrants. We have thousands and thousands of people, organisations, and institutions deeply engaged in humanitarian assistance. Europe, of course, is not perfect but is still the best example in the world when it comes to the readiness to sacrifice something, not only money but also our time and emotions."

"When it comes to the Muslim minority, I see a very visible risk that some political elites and political groups are ready to claim that in fact Islam is the synonym of terrorism. We can't agree with this kind of simplification."

"On the other hand, we should understand also the emotions especially after such an event like Manchester or other attacks in Europe. My advice or rather suggestion is that we have to start a genuine discussion with the Muslim minorities representatives on how we can cooperate together to exclude Islamic radicals from our societies. I think it is not enough today to show Muslim solidarity after the attacks. Without a deep engagement from the Muslim communities in our countries, we have no chance to eliminate this radical part of the Islam world."

On leaks from meetings

"As you know, I am not here to be part of this new culture of permanent leaks. From time to time we also need some discretion and personal encounters."

Link to full video of the debate

Source : © European Union, 2017 - EP

In the western Mediterranean we encounter a paradox: there is the reality of the strength of relations formed between Europe and the Maghreb countries of North Africa (Algeria, Libya, Mauritania, Morocco and Tunisia); then there is the perception of a growing gap between the two sides. To bridge this gap and achieve greater harmony, we need to change our perspective. We need to replace Eurocentric ideas of ‘cultural integration’, and instead focus on ‘cultural convergence’.

This will not be easy: the religious fault line between the Judeo-Christian northern Mediterranean and the majority Islamic southern Mediterranean is particularly acute, not least against the backdrop of multiple inequalities in the region, the post-9/11 security deterioration (the escalation of conflicts in the Middle East, and the rise of extremist groups ‘reclaiming’ Islam), and the rise in anti-Muslim populism in Europe.

The poor results of political and economic partnerships have also contributed to the perception of a widening gap. The Euromed partnership – also known as the Barcelona process – is more than two decades old. But the dream of the transformation of Arab societies, democracy and open economies, all to be achieved with structural support from Europe, has faded with the Arab Spring uprisings, which were perceived as evidence of the failure of Europe’s policies to support the region. Now Euromed is often condemned – especially from the European side – as having produced mediocre results or even having ground to a halt.

Euromed’s objectives were ambitious, but the strategies and funding were inadequate and the process unbalanced: for example, a free trade area where almost anything can move except people from Maghreb countries is not a partnership of equals. The new European Neighbourhood Policy – essentially a strategy to secure the frontiers of ‘wider Europe’ – seems to mark the end of perceptions of the Mediterranean as an autonomous geopolitical entity. The policy – including its post-2011 amendments – is based on a pre-Arab revolts mindset and puts in doubt Europe’s stated aim of democratisation of the southern Mediterranean.

“The growing frustration of young people makes them easy prey for radical preachers and extremist propaganda”

Working with its Maghreb partners, Europe must learn lessons from Euromed to create a long-term strategic vision and an improved, more equal partnership. We can achieve greater cultural convergence; reduce disparities; establish a better dialogue. This important work can start by taking four steps.

First, we must counter negative perceptions. Swallowing the narrative of extreme-right parties, many Europeans see Islam as an enemy and immigrants as the source of all problems. These are ideas that have now taken root in the collective European consciousness, fuelled by unprecedented numbers of refugees and terrorist attacks. For Maghreb societies, the European model has lost its appeal, with a breakdown in integration and perceived hostility to Islam and Arabs. In searching for a different modernity, Maghreb societies seek to challenge the dominant paradigm, whereby modernity equals Westernisation.

At the same time Maghreb societies are undergoing a period of great change and increasing polarisation. Political one-upmanship has helped widen existing divides between conservatives and progressives, and between Islamists and ‘secular infidels’. Arguments and controversies radicalise positions and threaten social cohesion, without producing any real constructive debate.

Second, it is vital to improve the situation for ordinary people on the ground. The Arab uprisings, which began in Tunisia, were a call to all countries in the region to pursue aspirations for economic improvement, social justice and political participation. Morocco is moving towards democracy and modernisation, a process that is far from complete. Aided by its strong leadership and clear vision, the Kingdom has consolidated, extended and implemented reforms. As the Maghreb’s main partner, the EU must offer support for such reforms, including regional integration that could boost gross domestic product by two percentage points.

Education is the basis of socio-economic development and open-mindsets. Both Europe and the Maghreb agree that the growing frustration of young people makes them easy prey for radical preachers and extremist propaganda. In Morocco, educational reform constitutes a central axis of its global strategy to fight against extremism and to promote moderate Islam.

In short, we need to give people a real stake in their own societies. Women, in particular, must be involved and valued equally (Morocco changed its constitution to ensure gender equality in 2011). But so too, in Europe, must young people with immigrant backgrounds benefit from equal treatment. Reducing their feelings of being second-class citizens would help prevent delinquency and radicalisation.

“We can build a sustainable, structured and equal Europe-Maghreb partnership that benefits everyone”

Third, we need to rebalance the cultural scales. There is currently great asymmetry in the cultural exchanges between North and South, partly due to the size of western intellectual and artistic output and its powers of outreach and communication. Reducing this asymmetry is vital in breaking down negative perceptions. Islam is a religion of peace, but that message is inaudible to a European public that remains reluctant, scared, or even hostile.

Erudite European specialists on the Arab and Muslim worlds remain silent, wheeled out by the media only to comment on terrorist attacks, where they are given a couple of minutes to explain a hyper-complex part of the world. And few European countries have had the courage to ‘decolonise’ their educational outlook and revise their history textbooks. Here, the cultural services and ambassadors of Maghreb countries must play their own role, increasing their efforts and inventiveness.

The Maghreb diaspora in Europe has the potential to serve as a bridge, but is hamstrung by its limited influence over policy and, in some cases, the absence of voting rights. And, naturally, the cultural gap must be spanned online and on social networks.

Fourth, we need a permanent and constructive dialogue between equal partners and a method to achieve cultural convergence. We need to encourage the growth of research platforms, of think-tanks (such as EuroMeSCo), and of spaces to facilitate understanding and solidarity. The Anna Lindh Foundation, which aims to bring people together from across the Mediterranean to improve mutual respect between cultures and to support civil society, needs much better funding to renew intercultural dialogue, making it an everyday reality. We should make more of the cultural and artistic boom being experienced in the countries of the Maghreb: seminars, forums, festivals, fairs, exhibitions and concerts abound, vying for public and private sponsorship. But above all we need mobility: freedom of movement between countries north and south of the Mediterranean is a must.

By taking these four steps, we can start to build a new bridge across the Mediterranean. We can realise that both sides have much in common, ending what Freud called ‘the narcissism of minor differences’. And we can build a sustainable, structured and equal Europe-Maghreb partnership that benefits everyone.

IMAGE CREDIT: saiko3p/Bigstock

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On 30 May 2017, the presidency reached agreement with European Parliament representatives on proposals aimed at facilitating the development of a securitisation market in Europe. 

A framework for securitisation is one of the main elements of the EU's 2015 plan to develop a fully functioning capital markets union by the end of 2019. Developing a securitisation market will help create new investment possibilities and provide an additional source of finance, particularly for SMEs and start-ups. 

“This initiative will encourage financial market integration in Europe and make it easier to lend to households and businesses", said Edward Scicluna, minister for finance of Malta, which currently holds the Council presidency. "Tonight's agreement with MEPs will allow us to relaunch the securitisation market, defining a model for simple, transparent and standardised securitisations."

The agreement will be submitted to EU ambassadors for endorsement on behalf of the Council, following technical finalisation of the text. Parliament and Council will then be called on to adopt the proposed regulation at first reading.

Securitisation is the process by which a lender - typically a bank - refinances a set of loans or assets, such as mortgages, automobile leases, consumer loans or credit card accounts, by converting them into securities. The repackaged loans are divided into different risk categories, tailored to the risk/reward appetite of investors. 

Following the US subprime cirisis of 2007-08, public authorities took steps to make securitisation transactions safer and simpler, and to ensure that incentives are in place to manage risk. As a result of these reforms, all securitisations in the EU are now strictly regulated. However, in contrast to the United States where markets have recovered, European securitisation markets have remained subdued. This despite the fact that EU securitisation markets withstood the crisis relatively well. 

Building on what has been put into place to address risk, the proposals differentiate simple, transparent and standardised (STS) products. The concept of 'simple, transparent and standardised' refers not to the underlying quality of the assets involved, but to the process by which the securitisation is structured. 

Issues resolved 

One of the main political issues resolved relates to a so-called risk retention requirement. This refers to the interest in the securitisation that originators, sponsors or original lenders of securitisations need to retain themselves. The requirement will ensure that securitised products are not created solely for the purpose of distribution to investors. 

The negotiators agreed to set the risk retention requirement at 5%, in accordance with existing international standards and in line with the Council's negotiating position. 

Other elements agreed with the Parliament include: 

• the creation of a data repository system for securitisation transactions, which will increase market transparency;
• a light-touch authorisation process for third parties that assist in verifying compliance with STS securitisation requirements. The aim is to prevent conflicts of interest. The text makes clear that, even when a third party is involved in the STS certification process, liability for compliance with the rules remains completely with originators, sponsors, original lenders and securitisation special purpose entities.

Two regulations 

The agreement with the Parliament covers two draft regulations: 

• one setting rules on securitisations and establishing criteria to define STS securitisation;
• the other amending regulation 575/2013 on bank capital requirements. 

The first brings together rules that apply to all securitisations, including STS securitisation, that are currently scatttered amongst different legal acts. It thus ensures consistency and convergence across sectors (such as banking, asset management and insurance), and streamlines and simplifies existing rules. It also establishes a general and cross-sector regime to define STS securitisation. 

The text amending regulation 575/2013 sets out capital requirements for positions in securitisation. It provides for a more risk-sensitive regulatory treatment for STS securitisations.

The regulations require a qualified majority for adoption by the Council, in agreement with the European Parliament. (Legal basis: article 114 of the Treaty on the Functioning of the European Union.)

EU rules on venture capital and social enterprises are to be adjusted with the aim of boosting investment in start-ups and innovation.

On 30 May 2017, representatives of the Council and the European Parliament agreed on amendments to rules governing investment funds in this sector.

The proposed regulation is part of the EU's plan to develop a fully functioning capital markets union, diversifying funding sources for Europe's businesses and long-term projects. It is also linked to the EU's investment plan for Europe.

"If European SMEs are to grow and develop, it is indispensable that financing - both bank and capital market financing - is readily available",said Edward Scicluna, minister for finance of Malta, which currently holds the Council presidency. "This regulation will help stimulate market financing and thereby boost economic growth."

The EU has been falling behind the United States in this sector. According to the Commission, an extra €90 billion would have been available between 2009 and 2014 for financing European companies if venture capital markets had been as developed as in the US.

The proposal adjusts rules adopted in 2013 to encourage investment in European venture capital funds (Euveca) and European social entrepreneurship funds (Eusef).

Amending regulations 345/2013 and 346/2013, it makes those funds available to fund managers of all sizes and expands the range of companies that the funds can invest in. It also makes the cross-border marketing of such funds cheaper and easier.

Regulations 345/2013 and 346/2013 lay down requirements for investment in Euveca and Eusef funds, which relate respectively to:

• young and innovative companies;
• enterprises whose aim is to achieve a positive social impact.

Presidency and Parliament representatives agreed on the following amendments:

• larger fund managers, i.e. those with assets under management of more than €500 million, will henceforth be able to market and manage Euveca and Eusef funds;
• the range of companies in which Euveca funds can invest is expanded to include unlisted companies with up to 499 employees (small mid-caps) and SMEs listed on SME growth markets.

Next steps

The agreement will be submitted to EU ambassadors in the coming days for endorsement on behalf of the Council. The Parliament and the Council will then be called on to adopt the regulation without further discussion.

The regulation will start to apply three months after its entry into force.

The Council held a debate on space policy and adopted conclusions on a space strategy for Europe.

The Maltese presidency today reached an informal agreement with the European Parliament on an EU-sponsored scheme, 'WiFi4EU', to promote free internet in town halls, hospitals, parks and other public places. An easily recognisable, multilingual WiFi4EU portal will provide users with a free, secure high-speed internet connection. The local municipality or other public body offering the connection can use the portal to provide easy access to their digital services. 

"WiFi4EU will make fast internet available to many citizens who otherwise might not have the chance to experience high-quality connectivity," said Emmanuel Mallia, the Maltese Minister for Competitiveness and Digital, Maritime and Services Economy. "It will encourage the use of digital services and reduce the digital divide, including in places with limited internet access." 

Today's agreement defines what the scheme will look like, but its budget will be finalised following the ongoing mid-term review of the EU's multiannual financial framework. 

Under the scheme, municipalities, libraries, hospitals and other public bodies will be able to apply for funding for the installation of local wireless access points using simple administrative procedures. The public body itself will be responsible for maintaining the connection for at least three years. Simple funding tools such as vouchers will be provided to cover up to 100% of the eligible costs. 

The funding will be allocated in a geographically balanced manner across the EU countries and, in principle, on a first-come, first-served basis. Some prioritisation for applicants from countries with low participation rates will be possible. 

To ensure that the financial assistance does not distort competition or deter private investment, only projects which do not duplicate existing private or public internet connections are eligible. 

The objective is to have the scheme's budget agreed and the technical work finalised in time to have the scheme in place by the end of 2017.

The presidency will submit the outcome of today's talks for approval by member states in the coming weeks, so that the project could kick off as planned.

The Council agreed on general approaches on two proposals of the "Services Package" to make the internal market more effective:

- a draft directive laying down rules on notification for authorisation requirements in the services sector, and

- a draft directive aimed at carrying out a proportionality test before adoption of new regulation of professions.

A Council general approach allows starting negotiations with the European Parliament.

“Businesses and professionals are still confronted with disproportionate regulation to provide services across borders. The Services Package is an essential tool to facilitate the movement of people and services. Companies, professionals and consumers will benefit greatly from better access to different professional activities and services”, said Chris Cardona, Minister for the Economy, Investment and Small Business of Malta.

Notification procedure in the services sector

The draft directive seeks to ensure that new national measures approved in member states fulfil the necessary conditions to facilitate the competitiveness and integration of the single market in the services sector.

More specifically, it aims at improving the current notification procedure of the Services Directive (2006/123/EC). This procedure provides that member states must notify to the Commission new or changed authorisation schemes or requirements falling under the scope of the Services Directive in order to guarantee its correct implementation.

The Council's text takes into account the need to enhance the existing notification procedure and the need to respect the principles of proportionality and of subsidiarity, in particular the prerogatives of national parliaments and administrative authorities.

The objective of the Services Directive is to remove barriers to the establishment of service providers and the temporary provision of cross-border services.

Professions: tests before adoption of new national rules

The draft directive seeks to improve transparency on the way certain professions are regulated in the member states.

More specifically, it aims at ensuring that national measures are proportionate and do not unduly restrict access to professions or create unjustified burdens in the internal market.

When regulating professions, member states will have to make an assessment as to whether the new or amended rules are justified so as to appreciate their effect on stakeholders and businesses. The future directive will therefore harmonise the way in which these proportionality tests are carried out and the criteria that have to be applied, in accordance with the European Court of Justice rulings.

The obligation to carry out a proportionality test before introducing new regulation of professions will supplement provisions of the Professional Qualifications Directive (2013/55/EU).

The Services Package

The "Services Package", released on 10 January 2017, contains the following legislative proposals:

• Proposal for a services e-card
• Proposal for a services notification procedure
• Proposal for a proportionality test before adoption of new regulation of professions

It also includes guidance on reform recommendations for regulation in professional services.

Promoting the competitiveness of services markets is essential for the creation of jobs and growth in the EU, with the services sector accounting for around 70% of the EU's GDP.

On 29 May 2017, the Council adopted a decision authorising the signing of an agreement with the United States on insurance and reinsurance. 

The agreement will provide legal certainty for EU and US insurers and reinsurers in the application of regulatory frameworks. It will enable improved protection for policyholders and other consumers through cooperation between supervisors and the exchange of information. 

The text was negotiated by the Commission on the basis of a mandate approved by the Council in April 2015. It includes provisions on reinsurance, group supervision and the exchange of information. A joint committee will oversee its implementation. 

The Council's decision provides for provisional application of some of the agreement's provisions, pending the completion of the procedures necessary for its conclusion. The Council also requested the consent of the European Parliament for conclusion of the agreement.

The decision was adopted at a meeting of the Competitiveness Council, without discussion.

The Council agreed on a general approach to reform the system of type-approval and market surveillance for motor vehicles.

This major reform will modernise the current system, adapt it to new technologies available on the market and improve control tests on car emissions data.

"Public health, air quality and innovation are at the core of this agreement. The only way to restore and increase trust in the European automobile industry is to help to develop clean and safety technologies. Reliable control tests for cars will be established so that emission irregularities that happened in the past cannot reappear in the future”, said Chris Cardona, Chair of the Council and Minister for the Economy, Investment and Small Business of Malta.

The aim of the reform is to achieve a high level of safety and environmental performance of motor vehicles and to address the main shortcomings identified in the existing type-approval system.

The Council general approach will have to be negotiated with the European Parliament before becoming law. The Parliament voted its position on 4 April.

Important changes will be introduced in three areas by strengthening:

• the quality of testing that allows a car to be placed on the market through improved technical services
• market surveillance to control the conformity of cars already available on the market, with the possibility for member states and the Commission to carry out spot-checks on vehicles in order to detect failures at an early stage
• the oversight of the type-approval process, in particular through the establishment of a Forum for the exchange of information on enforcement, made up of representatives of national approval and market surveillance authorities

All member states agreed to improve the harmonised implementation of the rules across the EU so as to reduce the possible differences in interpretation and application by national type-approval authorities and technical services. They also agreed that more effective market surveillance rules should apply to better detect non-compliance at an early stage.

A minimum number of cars to be checked

The new market surveillance obligations agreed by the Council would require every country to conduct a minimum number of checks on cars each year. This minimum number of checks will be 1 in every 50,000 new vehicles registered in that country the previous year.

The checks will include verification of emissions under real driving conditions.

The general approach foresees an obligation for member states to finance market surveillance activities. The fees for type-approval activities would be levied on manufacturers who have applied for type-approval.

Those countries with fewer resources to carry out the required tests will be able to ask other countries to carry out the tests on their behalf.

More robust oversight to detect failures

The Commission will be empowered to carry out tests and inspections of vehicles to verify compliance and react to irregularities immediately. This will increase the independence and quality of the EU type-approval system.

The Commission could also impose fines for infringements on manufacturers and importers of up to €30 000 per non-compliant vehicle.

An audit system based on peer reviews will be established. The type-approval authorities would be peer-reviewed by two type-approval authorities of other member states at least once every five years. The Commission will be able to participate in peer evaluation teams and should draw up a summary of the outcomes of peer evaluations and make them public.

Type-approval authorities however would not be subject to peer evaluation when they designate all their technical services on the basis of accreditation of internationally recognised standards.

Furthermore, an advisory Forum for exchange of information on enforcement measures would be established with the purpose to harmonise different interpretations and practises among the member states. This Forum should also examine the outcomes of peer evaluations.

In addition, the national authorities will have to submit each year to the Forum a comprehensive overview of their planned market surveillance checks.

As far as technical services are concerned, the Council text proposes the involvement of the national accreditation bodies in the assessment of the technical services and the establishment of joint assessment teams.

The position of technical services vis-à-vis manufacturers will be strengthened, and will include the right and duty to carry out unannounced factory inspections and to conduct physical or laboratory tests.

The technical services will carry out the tests for type-approval under the responsibility of type-approval authorities. The proper functioning of technical services is crucial for ensuring a high level of safety and environmental protection and so maintain consumer confidence in the system.

Background

The draft regulation to modernise the type-approval system of motor vehicles was presented by the Commission on 27 January 2016. It will replace the EU's current legal framework which is set out in directive 2007/46/EC.

It preserves the general purpose of directive 2007/46/EC to facilitate the free movement of motor vehicles in the internal market and apply the principle of mutual recognition by laying down harmonised type-approval requirements.

A fundamental overhaul of the existing system, which was designed ten years ago, was already foreseen in the EU's work programme.

However, irregularities discovered on the use of illegal defeat devices by certain car manufacturers have made public opinion, authorities and economic operators aware of the need to implement robust provisions on type-approval, as well as to improve testing methods with respect to pollutant emissions from vehicles, to prevent similar cases in the future.

The EU has taken a further step to prevent corporate tax avoidance, adopting rules to close down 'hybrid mismatches' with the tax systems of third countries. 

On 29 May 2017, the Council adopted a directive to prevent corporate groups from exploiting the disparities between two or more tax jurisdictions to reduce their overall tax liability. 

“Our aim here is to tackle one of the main practices that multinational companies have devised to reduce their tax bills”, said Edward Scicluna, minister for finance of Malta, which currently holds the Council presidency. “The directive adds to the rules we adopted last year to tackle the most common forms of tax avoidance. It will also ensure implementation of the OECD's recommendations.” 

The directive was adopted at a meeting of the Competitiveness Council, without discussion. This follows an agreement at a meeting on 21 February 2017. The European Parliament gave its opinion on 27 April 2017.

Member states will have until 1 January 2020 to transpose the directive into national laws and regulations (1 January 2022 for one specific provision).

In Taormina, at the 2017 G7 summit, leaders adopted the final communiqué, the roadmap on gender equity and they agreed an action plan on innovation, skills and labour.