News

The Week Ahead 17 – 23 May 2021 | EU Parliament Press

 

Plenary session and committee meetings


COVID-19 certificate.
Parliament, Council and Commission negotiators will meet to try to conclude a deal aimed at establishing, on time for the summer tourist season, an EU certificate attesting that a person has been vaccinated against COVID-19, has a negative test result or recovered from the sickness. This should allow for smooth and safe travel within the EU from the end of June. (Tuesday)


COVID-19 vaccine patents.
On Wednesday morning, MEPs will debate a proposal to the WTO to waive intellectual property rights for COVID-19 vaccines, a move backed by the US administration. A resolution will be put to the vote during the 7-10 June session.


EU strategy towards Israel-Palestine.
On Tuesday afternoon, MEPs will discuss the recent unrest and violence between Israel and Palestine The last days have been witness to some of the worst clashes between the Israeli and Palestinian sides in years.


Erasmus+/Creative Europe/Solidarity Corps Programmes
. Parliament is set to adopt three 2021-2027 EU programmes: the Erasmus education, training, youth and sports programme, worth 28 billion euro; the Creative Europe programme, the biggest ever commitment to support EU cultural and creative sectors (2.2 billion euro); and the European Solidarity Corps volunteering programme for young people in Europe and beyond (one billion euro). (debates Tuesday)


Just Transition Fund
. MEPs are set to adopt the €17.5 billion Just Transition Fund that will help EU countries address the social and economic impact of the transition to climate neutrality. The fund will focus on least developed regions, outermost territories and islands. Committing to climate neutrality by 2050 will be a condition for financial support; investments linked to waste incineration and fossil fuels will be excluded from grants. (debate Monday vote Tuesday)


Ecocide/Environmental liability.
Parliament will debate and vote on a report that demands existing EU rules on environmental liability of companies be strengthened to better prevent and remedy environmental damage, and ensure victims of environmental damage are better supported. The draft text calls on the Commission to examine how “ecocide” can be recognised under EU law. (debate Wednesday, vote result Thursday)


Turkey/Enlargement prospects
. MEPs will discuss recent developments in Turkey and Montenegro’s EU accession negotiations. In two resolutions to be put to the vote, MEPs are expected to criticise the Turkish government for distancing itself from European values and standards, and to support Montenegro’s path towards the EU. (debates Tuesday, vote results Wednesday)


President’s Diary.
On Tuesday, EP President Sassoli will have a meeting with the Speaker of the Georgian Parliament, Kakha Kuchava. On Friday, he will participate remotely in the Global Health Summit.


Press briefing.
On Monday at 15.30, spokespersons from Parliament and political groups will hold a press briefing on next week’s plenary session.

Full agenda

Spring 2021 Economic Forecast: Rolling up sleeves | EU Commission Press

The Spring 2021 Economic Forecast projects that the EU economy will expand by 4.2% in 2021 and by 4.4% in 2022. The euro area economy is forecast to grow by 4.3% this year and 4.4% next year. This represents a significant upgrade of the growth outlook compared to the Winter 2021 Economic Forecast which the Commission presented in February. Growth rates will continue to vary across the EU, but all Member States should see their economies return to pre-crisis levels by the end of 2022.

Economic growth resumes as vaccination rates increase and containment measures ease

The coronavirus pandemic represents a shock of historic proportions for Europe’s economies. The EU economy contracted by 6.1% and the euro area economy by 6.6% in 2020. Although in general, businesses and consumers have adapted to cope better with containment measures, some sectors – such as tourism and in-person services – continue to suffer.

The rebound in Europe’s economy that began last summer stalled in the fourth quarter of 2020 and in the first quarter of 2021, as fresh public health measures were introduced to contain the rise in the number of COVID-19 cases. However, the EU and euro area economies are expected to rebound strongly as vaccination rates increase and restrictions are eased. This growth will be driven by private consumption, investment, and a rising demand for EU exports from a strengthening global economy.

Public investment, as a proportion of GDP, is set to reach its highest level in more than a decade in 2022. This will be driven by the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU.

Labour markets improve slowly

Labour market conditions are slowly improving after the initial impact of the pandemic. Employment rose in the second half of 2020 and unemployment rates have decreased from their peaks in most Member States.

Public support schemes, including those supported by the EU through the SURE instrument, have prevented unemployment rates from rising dramatically. However, labour markets will need time to fully recover as there is scope for working hours to increase before companies need to hire more workers.

The unemployment rate in the EU is forecast at 7.6% in 2021 and 7% in 2022. In the euro area, the unemployment rate is forecast at 8.4% in 2021 and 7.8% in 2022. These rates remain higher than pre-crisis levels.   

Inflation

Inflation rose sharply early this year, due to the rise in energy prices and a number of temporary, technical factors, such as the annual adjustment to the weightings given to goods and services in the consumption basket used to calculate inflation. The reversal of a VAT cut and the introduction of a carbon tax in Germany also had a noticeable effect.

Inflation will vary significantly over the course of this year as the assumed energy prices and changes in the VAT rates generate noticeable fluctuations in the level of prices compared to the same period last year. 

Inflation in the EU is now forecast at 1.9% in 2021 and 1.5% in 2022. For the euro area, inflation is forecast at 1.7% in 2021 and 1.3% in 2022.*

Public debt to peak in 2021

Public support for households and businesses has played a vital role in mitigating the impact of the pandemic on the economy, but has resulted in Member States increasing their levels of debt.

The aggregate general government deficit is set to rise by about half a percentage point to 7.5% of GDP in the EU this year and by about three quarters of a percentage point to 8% of GDP in the euro area. All Member States, except for Denmark and Luxembourg, are forecast to run a deficit of more than 3% of GDP in 2021.

By 2022, however, the aggregate budget deficit is forecast to halve to just below 4% in both the EU and the euro area. The number of Member States running a deficit of more than 3% of GDP is forecast to fall significantly.

In the EU, the ratio of public debt to GDP is forecast to peak at 94% this year before decreasing slightly to 93% in 2022. The euro area debt-to-GDP ratio is forecast to follow the same trend, rising to 102% this year and then falling slightly to 101% in 2022.

The risks to the outlook remain high but are now broadly balanced

The risks surrounding the outlook are high and will remain so as long as the shadow of the COVID-19 pandemic hangs over the economy.

Developments in the epidemiological situation and the efficiency and effectiveness of vaccination programmes could turn out better or worse than assumed in the central scenario of this forecast.

This forecast may underestimate the propensity of households to spend or it may underestimate consumers’ desire to maintain high levels of precautionary savings.

Another factor is the timing of policy support withdrawal, which if premature, could jeopardise the recovery. On the other hand, a delayed withdrawal could lead to the creation of market distortions and barriers to exit of unviable firms.

The impact of corporate distress on the labour market and the financial sector could prove worse than anticipated.

Stronger global growth, particularly in the US, could have a more positive impact on the European economy than expected. Stronger US growth, however, could push up US sovereign bond yields, which could cause disorderly adjustments in financial markets that would hit highly indebted emerging market economies with high foreign currency debts particularly hard.

Members of the College said:

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People said: “While we are not yet out of the woods, Europe’s economic prospects are looking a lot brighter. As vaccination rates rise, restrictions ease and people’s lives slowly return to normal, we have upgraded forecasts for the EU and euro area economies for this year and next. The Recovery and Resilience Facility will help the recovery and will be a real game changer in 2022, when it will ramp up public investments to the highest level in over a decade. Much hard work still lies ahead, and many risks will hang over us as long as the pandemic does.  Until we reach solid ground, we will continue to do all it takes to protect people and keep businesses afloat.”

Paolo Gentiloni, Commissioner for Economy said: “The shadow of COVID-19 is beginning to lift from Europe’s economy. After a weak start to the year, we project strong growth in both 2021 and 2022. Unprecedented fiscal support has been – and remains – essential in helping Europe’s workers and companies to weather the storm. The corresponding increase in deficits and debt is set to peak this year before beginning to decline. The impact of NextGenerationEU will begin to be felt this year and next, but we have much hard work ahead – in Brussels and national capitals – to make the most of this historic opportunity. And of course, maintaining the now strong pace of vaccinations in the EU will be crucial – for the health of our citizens as well as our economies. So let’s all roll up our sleeves.”

Background

The Spring 2021 Economic Forecast is based on a set of technical assumptions concerning exchange rates, interest rates and commodity prices, with a cut-off date of 28 April 2021. For all other incoming data, including assumptions about government policies, this forecast takes into consideration information up until and including 30 April. Unless policies are credibly announced and specified in adequate detail, the projections assume no policy changes.

Following the final adoption of the RRF regulation and significant progress on the preparation of the recovery and resilience plans, the Spring Forecast incorporates the reform and investment measures set out in draft RRPs for all Member States. However, at the time of the cut-off date, details of some plans were still under discussion in a number of Member States. In such cases, simplified working assumptions have been used for the recording of RRF-related transactions, specifically regarding the time profile of expenditure (assumed to be linear over the RRF lifetime) and its composition (assumed to be split between public investment and capital transfers.)

For More Information

Full document: Spring 2021 Economic Forecast

Follow Vice-President Dombrovskis on Twitter: @VDombrovskis

Follow Commissioner Gentiloni on Twitter: @PaoloGentiloni

Follow DG ECFIN on Twitter: @ecfin

*Updated on 12-05-2021 at 11:00

Europe’s Digital Decade: Commission launches consultation and discussion on EU digital principles | EU Commission Press

Today, as a follow-up to its Digital Decade Communication of 9 March, the Commission is launching a public consultation on the formulation of a set of principles to promote and uphold EU values in the digital space. The consultation, open until 2 September, seeks to open a wide societal debate and gather views from citizens, non-governmental and civil society organisations, businesses, administrations and all interested parties. These principles will guide the EU and Member States in designing digital rules and regulations that deliver the benefits of digitalisation for all citizens.

Margrethe Vestager, Executive Vice-President for a Europe fit for the Digital Age, said: “A fair and secure digital environment that offers opportunities for all. That is our commitment. The digital principles will guide this European human-centred approach to digital and should be the reference for future action in all areas. That’s why we want to hear from EU citizens.”

Commissioner for Internal Market, Thierry Breton, said: “This is Europe’s Digital Decade and everyone should be empowered to benefit from digital solutions to connect, explore, work and fulfil one’s ambitions, online as offline. We want to set together the digital principles on which a resilient digital economy and society will be built.”

On 9 March, the Commission laid out its vision for Europe’s digital transformation by 2030 in its Communication “Digital Compass: the European way for the Digital Decade“, and proposed to compile a set of digital principles. This covers areas such as access to internet services, to a secure and trusted online environment, to digital health services and to human-centric digital public services and administration. All interested people and parties can also share their view on digital education and skills necessary for people to take an active part in society and in democratic processes, ethical principles for human centric algorithms, the protection and empowerment of children and young people in the online space or digital systems and devices that respect the environment. They are also invited to propose alternative formulations or elaborate on other possible principles.

These principles will complement existing rights that already protect and empower Europeans online such as the protection of their personal data and privacy, freedom of expression, freedom to set up and conduct a business online or the protection of their intellectual creations.

This approach goes also hand-in-hand with the recent proposal on Artificial Intelligence whereby the Commission aims to ensure the use of this technology in the EU is trustworthy and human-centric.

Next steps

The contributions to the public consultation will feed into a proposal from the Commission for a joint inter-institutional declaration on Digital Principles of the European Parliament, the Council, and the Commission. The proposal is expected by the end of 2021.

For more information

Public consultation EU digital principles

Have your say EU digital principles

Communication on the 2030 Digital Compass: the European Way for the Digital Decade

Europe’s Digital Decade – Questions and Answers

Europe’s Digital Decade – Facts page

Europe’s Digital Compass – Policy page

Shaping Europe’s Digital Future

EU Cohesion policy: €133.4 million for Bulgaria and Sweden to tackle the social and economic impact of the coronavirus crisis | EU Commission Press

The Commission has approved the modification of three operational programmes (OPs) under REACT-EU to provide €75.9 million to Bulgaria and €57.5 million to Sweden to help tackle the effects of the pandemic. Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “The coronavirus has put our social fabric to the test and has hit the most vulnerable people the hardest. The EU is showing solidarity by supporting the provision of aid in these difficult times and promoting social inclusion.” Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “The decisions approved today are the result of good policy measures. They will provide much needed investment resources for the post-coronavirus crisis move to a green and digital recovery.” The Bulgarian programme for the Fund for European Aid to the Most Deprived (FEAD) will receive an extra €19.9 million in 2021 to provide daily warm meals to 50,000 people from vulnerable groups living in poverty. This is the first amendment of a FEAD OP under REACT-EU. In addition, the Bulgarian programme ‘Science and Education for Smart Growth’, co-financed by the European Social Fund (ESF) and the European Regional Development Fund (ERDF), will be topped up with €56 million to support distance learning. At least 10% of students and teachers will receive laptops or tablets and 30% of teachers will receive training in online teaching. In Sweden, the Commission has approved the modification of an OP that will increase the funding available for investments by nearly €57.5 million. The amendment of the national OP co-financed by the ERDF will support the sustainable green and digital transition of the Swedish SMEs that were most negatively impacted by the crisis, such as from the tourism and hospitality sectors. REACT-EU is part of NextGenerationEU and provides €50.5 billion additional funding over the course of 2021 and 2022 to programmes under the ERDF, the ESF and the FEAD.

Recovery and Resilience Facility: Hungary submits official recovery and resilience plan | EU Commission Press

The Commission has received an official recovery and resilience plan from Hungary. This plan sets out the reforms and investment projects that Hungary plans to implement with the support of the Recovery and Resilience Facility (RRF).

The RRF is the key instrument at the heart of NextGenerationEU, the EU’s plan for emerging stronger from the COVID-19 pandemic. It will provide up to €672.5 billion to support investments and reforms (in 2018 prices). This breaks down into grants worth a total of €312.5 billion and €360 billion in loans. The RRF will play a crucial role in helping Europe emerge stronger from the crisis, and securing the green and digital transitions.

The presentation of the plan follows intensive dialogue between the Commission and the Hungarian national authorities over the past months.

Hungary’s recovery and resilience plan 

Hungary has requested a total of €7.2 billion in grants under the RRF.

The Hungarian plan is structured around the key policy areas of green transition, healthcare, research, digital, cohesion and public administration. The plan includes measures in sustainable transport, energy transition and the circular economy. Projects in the plan cover the entire lifetime of the RRF until 2026. The plan proposes projects in five of the seven European flagship areas.

Next steps

The Commission will assess the Hungarian plan within the next two months based on the eleven criteria set out in the Regulation and translate its content into legally binding acts. This assessment will notably include a review of whether the plan contributes to effectively addressing all or a significant subset of challenges identified in the relevant country-specific recommendations issued in the context of the European Semester. The Commission will also assess whether the plan dedicates at least 37% of expenditure to investments and reforms that support climate objectives, and 20% to the digital transition. Based on a proposal by the Commission, the Council will have as a rule four weeks to adopt the Commission proposal.

The Council’s approval of the plan would pave the way for the disbursement of a 13% pre-financing to Hungary. This is subject to the entry into force of the Own Resources Decision, which must first be approved by all Member States.

The Commission has now received a total of 15 recovery and resilience plans, from Belgium, Denmark, Germany, Greece, Spain, France, Italy, Latvia, Luxembourg, Hungary, Austria, Poland, Portugal, Slovenia, and Slovakia. It will continue to engage intensively with the remaining Member States to help them deliver high quality plans.

For More Information

Recovery and Resilience Facility: Questions and Answers

Factsheet on the Recovery and Resilience Facility

Recovery and Resilience Facility: Grants allocation

Recovery and Resilience Facility Regulation

Recovery and Resilience Facility website

RECOVER team website

DG ECFIN website

Enlargement: new enlargement methodology will be applied to Montenegro and Serbia | EU Council Press

The Council agreed on the application of the revised enlargement methodology to the accession negotiations with Montenegro and Serbia, after both candidate countries expressed their acceptance of the new methodology. The changes will be accommodated within the existing negotiating frameworks with Montenegro and Serbia during the next Intergovernmental Conferences.

The European Union and its Member States have consistently expressed their unequivocal support for the European perspective of the Western Balkans. This firm, merit-based prospect of full EU membership for the Western Balkans is in the Union’s own political, security and economic interests.

A credible accession perspective is the key driver of transformation in the region and enhancing the opportunities for our collective security and prosperity. It is a key tool to promote democracy, rule of law and the respect for fundamental rights, which are also the main engines of economic development, social integration and the essential anchor for fostering regional reconciliation and stability. Maintaining and enhancing this policy is indispensable for the EU’s credibility, for the EU’s success and for the EU’s influence in the region and beyond.

Ana Paula Zacarias, State Secretary for European Affairs of Portugal

The enhancement of the accession process of Montenegro and Serbia focuses on the following elements:

  • A stronger focus on fundamental reforms: it is essential and also in the candidate countries’ own interest that they keep delivering on reform commitments and produce tangible results in their implementation. This is key to realising their European perspective. This requires a stronger focus throughout the accession process on the rule of law, fundamental rights, the functioning of democratic institutions and public administration reform, as well as on economic criteria.
  • A stronger political steer: a key element for enhancing the enlargement process, regular Intergovernmental Conferences at ministeriallevel, together with the Stabilisation and Association Councils, will strengthen the dialogue with the candidate countries and help focus efforts on key reforms that should allow for further progress.
  • An increased dynamism: a clustering of the negotiating chapters should help candidate countries to accelerate their preparations by cross-fertilisation of efforts across individual chapters, and put a stronger focus on core sectors and the most important and urgent reforms. It should also help with identifying accelerated integration measures.
  • Improving the predictability of the process, based on objective criteria and rigorous positive and negative conditionality.

Background

On 25 March 2020, the Council endorsed the Commission communication on ‘Enhancing the accession process – A credible EU perspective for the Western Balkans’ of 5 February 2020, aiming to reinvigorate the accession process by making it more predictable, more credible, more dynamic and subject to stronger political steering. The new process is based on objective criteria, rigorous positive and negative conditionality, and reversibility. Its credibility is reinforced through an even stronger focus on fundamental reforms, starting with the rule of law, the functioning of democratic institutions and public administration as well as the economies of the candidate countries.

Montenegro’s accession negotiations started in June 2012, when the negotiating framework with Montenegro was presented at the first meeting of the accession conference at ministerial level, on 29 June 2012.

Serbia’s accession negotiations started in January 2014, when the negotiating framework with Serbia was presented at the first meeting of the accession conference at ministerial level, on 21 January 2014.

Next steps

The elements of the revised enlargement methodology will be presented to each of the two candidate countries at the next meeting of the respective intergovernmental accession conference at ministerial level.

Coronavirus: EU helps Nepal to tackle infections surge | EU Commission Press

Nepal has requested EU assistance to help contain the explosion in COVID-19 cases. In response, the EU has mobilised an initial €2 million in humanitarian funding, which will support monitoring of all home isolated cases through tele-health / tele-medicine services and rapid referral to hospitals; national emergency medical teams deployment and international emergency medical teams mobilisation facilitation; procure COVID-19 equipment and supplies in Nepal. Key equipment and supplies will include oxygen equipment including oxygen gas cylinders, oxygen concentrators, home care kits, diagnostics including antigen test kits; personal protection equipment. Nepal has also activated the EU Civil Protection Mechanism. Finland is the first Member State to offer more than 2 million surgical facemasks, 350,000 FFP2 masks, 52,500 pairs of vinyl gloves and 30,000 isolation gowns. Commissioner for Crisis Management, Janez Lenarčič, said: “The COVID-19 surge in Nepal is claiming more lives every minute as it spreads across the country. We stand in full solidarity with Nepal in its fight against the pandemic. We are quickly mobilising emergency support with initial €2 million funding. I am very thankful to Finland for their quick offers of assistance via our Civil Protection Mechanism. We stand ready to provide further assistance.” The European Union’s 24/7 Emergency Response Coordination Centre is in regular contact with the Nepalese authorities to closely monitor the situation and channel the EU assistance.

Tourism: Commission helps the tourism ecosystem with a user-friendly guide on EU funding | EU Commission Press

The Commission will today publish a Guide on EU funding for tourism, which collects information on the EU funds that are available to people and companies working in the tourism sector. The user-friendly guide contains links to the relevant EU programmes’ websites where the reader can find the call for proposals and information on each funding programme. It also includes examples of good projects co-funded by EU funds in the past. Commissioner for the Internal Market, Thierry Breton, said: “The Tourism ecosystem is among the worst hit by the pandemic. With this new guide, the Commission aims to help people working in the tourism sector, including SMEs to navigate and access the available EU financing. These EU funds will contribute to the tourism industry’s recovery and sustainable and digital transition.” The online guide presents new EU programmes included in the EU budget for 2021 -2021, moving towards a more sustainable, digital EU economy and gathers information on sources of EU funding with the highest potential to support investments in tourism. It will be available online here at 13:00 CET.

Commissioners Schmit, Breton and Sinkevičius hosted Pact for Skills roundtable with renewable energy stakeholders | EU Commission Press

Yesterday, Commissioners Schmit, Breton and Sinkevičius hosted a high-level roundtable of the Pact for Skills with renewable energy stakeholders, among which those from the offshore, wind, and solar sectors. This is part of a series of sectoral roundtables to encourage stakeholder involvement under the Pact for Skills. The objective of the Pact is to mobilise all relevant actors – industrial, social, regional and education partners – to assist people in developing the right skill-set for a sustainable, social and resilient recovery from the coronavirus pandemic. Partnerships established under the Pact will benefit from Commission support such as a partnership platform and information on EU funding options. Renewable energy has been identified as an important industrial ecosystem in Europe for recovery, ripe enough to sustain partnerships under the Pact due to the strong engagement of energy stakeholders and industrial players, the existence of an ongoing maritime technology Blueprint for Sectoral Cooperation on Skills that will look into an offshore renewables Skilling Strategy, as well as the great potential of the sector to be a driver for the twin, digital and green, transitions ahead. Skilled personnel, equipped with the necessary digital skills alongside technical/engineering competences in assisting and facilitating the transformation of energy systems is of particular interest. The Renewable energy ecosystem will create new opportunities for industry, generate green jobs across the continent, and strengthen the EU’s global leadership in renewable energy technologies. Clean energy is crucial to meeting the EU’s goal of climate neutrality by 2050, as set out in the European Green Deal. The meeting confirmed the significant growth opportunities in this ecosystem, and the crucial need to reskill and upskill workers, including from more traditional industries, to ensure a just transition while avoiding potential skills shortages. Attracting talents and especially women is central to be successful in this endeavour. Announced under the European Skills Agenda in July, the Pact for Skills was launched on 10 November.

Competition: The Multilateral Working Group on pharmaceutical mergers launches a joint public consultation | EU Commission Press

The Working Group on pharmaceutical mergers, created in March 2021 by the European Commission and several other authorities launched a joint public consultation in the field of pharmaceutical mergers. The Working Group consists of the European Commission’s Directorate-General for Competition, the U.S. Federal Trade Commission (‘FTC’), the Canadian Competition Bureau, the UK’s Competition and Markets Authority (‘CMA’), the U.S. Department of Justice (‘DOJ’) and three Offices of Attorneys General. The objective of the Working Group is to share experiences on the assessment of the effects of mergers in the pharmaceutical sector and to identify concrete and actionable steps to enhance the analysis of pharmaceutical mergers. The purpose of the consultation is to gather ideas and views from all interested parties in the field, including health services, doctors, academia, industry, patient groups, consumer organisations and competition experts. These contributions will then feed into a workshop that will be organised later this year. Interested parties can respond to the consultation until 25 June 2021. The FTC will collect and publish all contributions and comments on behalf of and in close co-operation with all members of the Working Group. You will find the public consultation here.