EU institution news

Council adopts recommendations on the updated stability and convergence programmes | EU Council Press

The Council today adopted recommendations on the updated stability and convergence programmes. The programmes reflect the continuation of the general escape clause and address the budgetary stances of member states in qualitative terms.

The Council adopted 27 recommendations on the updated stability and convergence programmes as part of the European Semester 2021 cycle. The cycle was launched in September 2020, when the Commission published its Annual Sustainable Growth Strategy. The strategy establishes a link between the European Semester and the recovery and resilience plans and states that member states’ plans should aim to address the challenges included in the country-specific recommendations.

Member states submitted their stability and convergence programmes to the Commission, which assessed them taking into account the spring 2021 forecast and the general escape clause. The clause was activated in March 2020 due to the economic fallout from the COVID‑19 pandemic. It allows member states more budgetary flexibility to fight the crisis.

On 2 June 2021 the Commission adopted the recommendations for Council recommendations on the programmes. The Council introduced a small modification of one of the recommendations that applies to 26 member states. According to the rules, the Council must follow the Commission’s recommendation or explain its position publicly. The explanation is referred to as a ‘comply or explain’ note. The Council today adopted the ‘comply or explain’ note together with the 27 recommendations.

Background

The European Semester coordinates the member states’ economic, fiscal, labour and social policies. It was the EU’s response to the financial crisis, which emphasised the need for better policy coordination and surveillance at the EU level. Each year in spring, the Commission assesses the member states’ convergence and stability programmes and issues recommendations to be adopted by the Council.

Single European Sky: MEPs ready to start negotiations | EU Parliament Press

  • Streamline European airspace management
  • Greener flights: 10% reduction in climate-impacting emissions
  • Open up the market for air traffic navigation services

European airspace management should be fine-tuned to optimise flight routes, reduce flight delays and cut CO2 emissions, said the Transport and Tourism Committee.

The negotiating mandate on the reform of the Single European Sky rules, adopted by the Transport and Tourism Committee on Thursday by 39 votes to 7 and 2 abstentions, proposes ways to modernise the management of European airspace in order to reduce flight delays, optimise flight routes, cut costs and CO2 emissions in the aviation sector.

Streamline European airspace management

Transport Committee MEPs want to reduce fragmentation in European airspace management and optimise flight routes, i.e. have more direct flights. They support streamlining the European airspace management system by setting up independent national supervisory authorities (NSAs), responsible for issuing air navigation service providers and airport operators with economic licences to operate, as well as implementing airspace management performance plans, to be set by the new Performance Review Body, operating under the auspices of EU Safety Aviation Agency (EASA).

The rules on expanding EASA’s mandate was adopted by 38 votes to 7 and 3 abstentions. The committee also voted in favour to give a mandate for the start of inter-institutional talks by 41 vote to 5 and 2 abstentions.

Greener flights

MEPs on the Transport and Tourism Committee stress that the Single European Sky should follow the Green Deal and contribute to the goal of climate neutrality with up to a 10% reduction in climate-impacting emissions

The Commission shall adopt the EU performance targets on capacity, cost efficiency, climate change and environmental protection for air navigation services, MEPs say. They also suggest that charges levied on airspace users (airlines or private planes operators) for the provision of air navigation services should encourage them to be more environmentally friendly, for example, by promoting alternative clean propulsion technologies.

Open up the market

As MEPs want more competition between air-traffic controllers, they suggest that one or a group of member states should choose air-traffic service providers through a competitive tender, unless it would result in cost inefficiency, operational, climate or environmental loss, or inferior working conditions. The same logic would apply when choosing other air navigation services, such as communication, meteorological or aeronautical information services.

Rapporteurs’ quotes

EP rapporteur Marian-Jean Marinescu (EPP, RO) said: “Europe’s current airspace architecture is built according to national borders. This aviation nationalism means longer flights, more delays, extra costs for passengers, higher emissions, and more pollution. With a truly Single European Sky and a unified European air management system, we would create a new airspace architecture based not on borders but on efficiency. Unfortunately, the position adopted recently by the Council is based on national concerns. Therefore we urge Member States to fly high, so we can finally address the problems of cost, fragmentation and emissions plaguing European aviation”.

The rapporteur on EASA rules, Bogusław Liberadzki (S&D, PL), added: “We strongly believe that the Single European Sky should be quickly implemented to bring more common European standards and procedures between member states. After the COVID-19 crisis, we are ready to boost economic and environmental efficiency in European aviation.”

Next steps

This vote on the Single European Sky rules constitutes the update of Parliament’s negotiating position adopted back in 2014 and therefore reconfirms MEPs’ readiness to start inter-institutional talks with EU Council shortly. The negotiations on the EU Aviation Safety Agency (EASA) rules are expected to start in parallel, after the result of the committee vote is announced in plenary, possibly during the June II or July session.

Fiscal sustainability: Conclusions on challenges arising from an ageing population | EU Council Press

The Council today approved conclusions on the fiscal sustainability challenges arising from an ageing population. The conclusions draw on the main findings of the 2021 ageing report and call on member states to address the economic and budgetary consequences of ageing.  

The conclusions stress that ageing populations pose a significant challenge for the long-term sustainability of public finances. The Council notes that government debt levels have risen due to the COVID-19 crisis and that they are expected to stay high for some time. At the same time, it underlines that premature withdrawal of fiscal support should be avoided to preserve longer-term fiscal sustainability.

The Council takes note of the 2021 ageing report, which highlights the decline in the working-age population. According to the report, by 2070 there will be less than two working-age persons for every person aged over 65, while currently there are three. That means that, in the long term, GDP will only be able to grow based on labour productivity.

The report projects an increase in age-related public expenditure (pensions, healthcare and long-term care), with numbers varying depending on productivity growth, demographic developments and the macroeconomic situation.

In this context, the Council calls on member states to address age-related spending by raising employment rates and productivity, tackling the gender gap in the labour market, and adapting pension, healthcare and long-term care systems.

It also welcomes the positive impact the national pension system reforms carried out in most countries have had on public expenditure and reaffirms the importance of taking advantage of the reform and investment opportunities offered by the Recovery and Resilience Facility and the other components of Next Generation EU.

Council adopts conclusions on role of Intellectual Property in tackling Covid-19 pandemic | EU Council Press

The Council today approved conclusions on Intellectual Property (IP) policy. With these conclusions, ministers recall that IP is a major driver for innovation, competitiveness, economic growth and sustainable development, and a key enabler for knowledge and tech-transfer.

The conclusions address the role of IP in helping to tackle the COVID-19 pandemic and outline the importance of IP for SMEs and their economic recovery, as well as for green and digital transitions. In the case of IP infringements, ministers encourage further actions in particular against counterfeiting and piracy.

The text calls for strengthening the support for European SMEs and the protection and valorisation of SMEs’ IP rights and trade secrets as an essential factor for their competitiveness, innovation, value-generation and sustainability.

Ministers consider close cooperation among all relevant public and private actors crucial for rapidly increasing production capacities and worldwide supply of COVID-19 vaccines. Relying on voluntary solutions for the sharing of IP, know-how and data is seen as a promising way to ensure worldwide access to critical products for diagnosing, treating and preventing COVID-19.

The Council stresses the need for increased global support, particularly through the COVAX facility, to achieve worldwide supply of COVID-19 vaccines. It calls on all vaccine producing countries to actively contribute to the global efforts to increase supply worldwide.

With these conclusions, ministers recall the EU’s active engagement in the ongoing dialogue in the context of the WTO to explore effective and pragmatic approaches for a robust, rapid and universal response to the pandemic and best ways to support affordable and equitable access to COVID-19 diagnostics, vaccines and treatments, such as patent pooling, licensing initiatives and knowledge/vaccine sharing platforms. The conclusions recall that the EU stands ready to also discuss other tools, including the flexibilities provided for in the TRIPS Agreement.

Ministers welcome the Commission’s IP action plan of 25 November 2020 and call for the timely presentation of the legislative initiatives it announced, in particular the package reviewing the legal framework on industrial design protection, rendering it more accessible for SMEs.

Finally, the Council recalls that it stands ready to consider a system of sui generis Geographical Indications protection system of non-agricultural products, based on a thorough impact assessment of its potential costs and benefits.

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Antitrust: Commission sends Statement of Objections to Insurance Ireland for restricting access to a data sharing platform | EU Commission Press

The Commission has informed Insurance Ireland, an association of Irish insurers, of its preliminary view that it breached EU antitrust rules by restricting competition in the Irish motor vehicle insurance market. The Commission takes issue with certain conditions of access to the Insurance Link platform, a data sharing system, which Insurance Ireland administers. The Commission considers that Insurance Ireland arbitrarily delayed or de facto denied access to the system to companies that had a legitimate interest in joining it, and that hurdles remain in place that might affect companies seeking to enter the Irish motor insurance market.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Motor insurance is a significant cost in the budget of every family and business. Access to data is key for insurers to evaluate the risk they take and to offer competitive contract conditions to customers. We have concerns that certain insurers and their agents were put at a competitive disadvantage because Insurance Ireland denied or delayed access to its data sharing system, compiling valuable information on insurance claims. This prevented competitive entry of new players and thus reduced Irish drivers’ choice of motor insurance policies at competitive prices. Non-discriminatory access to data sharing systems is important to foster competition in markets relying on data.”

Statement of Objections in relation to Insurance Ireland’s conditions of access to Insurance Link

Insurance Ireland is an association of companies active in the insurance sector in Ireland and covers over 90% of the Irish motor vehicle insurance market. Insurance Ireland administers and sets the conditions of access to Insurance Link, which comprises a non-life insurance claims data pool and a facility for Insurance Link users to request certain  data about such claims. Insurance Link enables its users – companies offering motor vehicle insurance – to better assess risk and to detect and defend themselves against potential fraud.

The Commission’s preliminary findings show that Insurance Ireland arbitrarily delayed or de facto denied the access of certain insurers and their agents to Insurance Link. Since at least 2009 and until today, access has been linked to membership in the association. Thus, applicants have to first be eligible for membership, meet membership criteria and go through an unpredictable application process. For several years, certain types of insurers and their agents were not eligible for membership and were therefore effectively denied access. The obligatory membership criteria delayed access for some companies for several years.

The Commission’s preliminary view, outlined in its Statement of Objections, is that lack of access to Insurance Link has the effect of placing companies at a competitive disadvantage on the Irish motor vehicle insurance market in comparison to companies that have access to the database. This affects negatively costs, quality of service and pricing. It also acts as a barrier to entry and thus reduces the possibility of more competitive prices and choice of suppliers. Lack of access to the relevant data contained in Insurance Link also has an effect on cross border trade between Member States, resulting in the potential partitioning of the Single Market.

If confirmed, this would infringe Article 101 of the Treaty on the Functioning of the European Union (TFEU). The sending of a Statement of Objections does not prejudge the outcome of an investigation.

Background on data pooling and data sharing arrangements

Depending on their design, data sharing arrangements may contribute to the efficient functioning of insurance markets. In the era of digitalisation and data reliance, data pooling and data sharing arrangements may contribute to effective competition in other sectors too. Ensuring that such arrangements, including their access conditions, are compliant with competition rules is thus of importance. The European data strategy reflects these principles. In the roadmap for the impact assessment of the revision of the Guidelines on the applicability of Article 101 TFEU to horizontal cooperation agreements, the Commission recently announced that it intends to include guidance that would assist stakeholders in the self-assessment of data pooling and data sharing arrangements.

Background on procedure

Article 101 TFEU prohibits anticompetitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s Single Market. The implementation of this provision is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.

The Commission opened the in-depth investigation into Insurance Ireland’s data sharing system on 14 May 2019.

A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned, in writing, of the objections raised against them. The addresses can examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Opening a formal antitrust investigation and sending a Statement of Objections does not prejudge the outcome of the investigations.

There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

More information on the investigation is available on the Commission’s competition website, in the public case register under the case number AT.40511. A periodic compilation of antitrust and cartel news is available in the Competition Weekly e-News.

The Council gives its consent to the revised statute of the Ombudsman to further guarantee its independence | EU Council Press

The Council has agreed to give its consent to the revised statute of the European Ombudsman, which will update the regulations and general conditions governing the performance of the Ombudsman’s duties, replacing the current framework following the entry into force of the Lisbon Treaty.

The aim of the Ombudsman is to help to uncover maladministration in the activities of the Union institutions, bodies, offices and agencies, with the exception of the Court of Justice of the European Union acting in its judicial role.

Where appropriate, the Ombudsman can make recommendations, proposals for solutions and suggestions for improvement.

The European Ombudsman plays an important part in our EU institutional framework, notably to ensure the trust from our citizens by promoting good administration by our institutions. The new Statute allows the European Ombudsman to exercise his or her duties under a strong and clear mandate. Many of the provisions have been clarified, allowing the European Ombudsman to act in a renewed, reinvigorated manner, for the benefit of the citizens of Europe.

Ana Paula Zacarias – Secretary of State for European Affairs of Portugal

Main changes introduced by the new rules

  • Adaptation of the existing framework to the Lisbon Treaty, which entered into force in 2009.
  • Clarification on the access to EU information: The rules give the Ombudsman the right to demand access to classified EU information in the course of an inquiry. Member state authorities may also be asked to share information.
  • Definition of the conditions under which the Ombudsman can conduct own initiative inquiries, in particular in systemic or serious cases of maladministration by EU.
  • The European Ombudsman is elected by the European Parliament at the start of each legislative term. In future, candidates must not have been members of the European Parliament, the European Council, the European Commission or national government in the previous two years.

Background

On 12 February 2019, the European Parliament adopted a proposal for a draft Regulation on the performance of the Ombudsman’s duties, which was transmitted to the Council on 25 March.

Following informal consultations between Parliament and Council, on 9 June 2021 the Parliament endorsed a revised proposal. The new Regulation will repeal Decision 94/262/ECSC, EC, Euratom.

Next steps

The Parliament will now adopt the new legal framework at its plenary of 23 June. Then the Regulation will enter into force on the first day of the month following that of its publication in the Official Journal of the European Union.

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

The Commission has today received an official recovery and resilience plan from Estonia. This plan sets out the reforms and public investment projects that Estonia 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 Estonian authorities over the past number of months. The Commission will now assess Estonia’s plan based on the eleven criteria set out in the Regulation and translate their contents into legally binding acts. The Commission has now received 24 recovery and resilience plans from Belgium, Czechia, Denmark, Germany, Estonia, Greece, Spain, France, Croatia, Italy, Ireland, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, and Sweden. It will continue to engage intensively with the remaining Member States to help them deliver high quality plans. A press release and a Q&A are available online.

Moving forward with EU4Health: first annual work programme worth €312 million adopted | EU Commission Press

As of todayEU4Health will fund more modern and resilient health systems, interventions to shore up our preparedness against health crises and more decisive EU action in the fight against cancer. The first annual work programme of EU4Health will provide €312 million for crisis preparedness, disease prevention, health systems and the healthcare workforce, and digitalisation. Funded projects will cover disease surveillance, preventing shortages of medicines, prevention, early detection, diagnosis and treatment of cancer, stronger European Reference Networks for rare diseases, testing the resilience of health systems, and preparing a European Health Data Space, amongst others. Stella Kyriakides, Commissioner for Health and Food Safety, said: “Today, we start an unprecedented investment programme for health in the EU. The first-ever EU4Health work programme starts paving the way towards a strong European Health Union. We will address the lessons learnt during the COVID-19 pandemic by investing in crisis preparedness. We will rebuild better, stronger and more resilient health systems that are more digital and have a trained and skilled workforce. And we will work to reduce the impact of cancer by investing in actions presented in Europe’s Beating Cancer Plan.”  The programme will be managed by the European Commission and the Health and Digital Executive Agency (HaDEA). 

Excessive deficit procedure: Council adopts recommendation for Romania | EU Council Press

The Council today adopted the recommendation under the excessive deficit procedure for Romania. The recommendation establishes that Romania should put an end to the excessive deficit situation by 2024 at the latest.

The Council found that an extension to the current deadline for Romania to correct its public deficit would be important in order not to compromise the economic recovery after the COVID-19 pandemic. The new deadline for correcting the excessive deficit allows for a more gradual effort and a balance between fiscal consolidation and the economic recovery.

The recommendation indicates that, in order to meet this new deadline, Romania would need to achieve a general government deficit target of 8.0% of GDP in 2021, 6.2% of GDP in 2022, 4.4% of GDP in 2023, and 2.9% of GDP in 2024, which is in line with the Romanian government’s objectives.

The Council has taken into account the changes in the Romanian fiscal situation, budgetary developments in 2020 and the new budgetary strategy put in place and calls for reforms, including in the management of public finances. In this context, the Recovery and Resilience Facility can provide an opportunity for Romania to improve its fiscal situation while still supporting growth and job creation.

Background and next steps

In April 2020, the Council adopted a recommendation to Romania with a view to ending the excessive deficit by 2022. Due to the uncertainty caused by the COVID-19 pandemic, the Commission did not put forward a recommendation for Romania in November 2020.

The 2021 spring forecast does not indicate that Romania will correct its excessive deficit by the deadline of 2022 established in the Council recommendation from April 2020. Economic fallout from the COVID-19 crisis has led to significant deviation from the economic assumptions on which that recommendation was based and it no longer provides a relevant basis for fiscal policy guidance.

The recommendation adopted today takes into consideration the recent developments and sets the new deadline for the correction of Romania’s excessive deficit as 2024. Romania is expected to report to the Council by 15 October 2021 on the consolidation strategy to achieve the targets set in the recommendation.

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Deal reached on EU fund to help regions and businesses adapt to Brexit | EU Parliament Press

  • Support focused on countries, regions and sectors worst affected by Brexit
  • Funds will cover investments made from 1 January 2020 to 31 December 2023
  • Specific commitment to help fisheries and local and regional coastal communities

EU legislators reached a political agreement on Thursday on the 5 billion euro Brexit Adjustment Reserve, paving the way for a first payment by December.

With a budget of 5 billion euro (in 2018 prices – 5.4 billion euro in current prices), the Brexit Adjustment Reserve (BAR) will focus on countries and sectors worst affected by the UK’s withdrawal from the EU.

A first instalment of 1.6 billion euro in pre-financing will be available by December 2021. Two other pre-financing tranches of 1.6 billion euro will be paid at the beginning of 2022 and 2023. The remaining 1 billion euro will be paid in 2025.

Allocation method

According to the provisional agreement, three factors will be used to calculate how much money each EU country will receive from the BAR: the importance of trade with the UK, the importance of fisheries in the UK exclusive economic zone and the population living in maritime regions bordering the UK.

Ireland will be by far the largest beneficiary in absolute terms, followed by the Netherlands, France, Germany and Belgium.

Member states that depend significantly on fisheries will have to direct a specific percentage of their national allocation to small-scale coastal fisheries and local and regional communities dependent on fishing activities.

Eligibility of funds

Parliament agreed with Council on an extension of the eligibility period to cover expenditure incurred between 1 January 2020 and 31 December 2023 for measures specifically taken to mitigate the expected negative effects of Brexit. The Commission’s proposal limited this period to between 1 July 2020 and 31 December 2022.

Measures supported by the BAR have to be specifically set up in relation to the UK’s withdrawal from the EU. These may include:

– support to businesses (especially SMEs), the self-employed and local communities;

– investments in job creation and reintegration in the labour market, including short-term work programmes, retraining and training courses;

– support to help citizens returning from the UK as a consequence of Brexit to reintegrate;

– support to the functioning of border, customs, health, phytosanitary and security controls, fisheries controls, certification and licensing schemes.

Quotes

“The European Parliament has kept its promise. We wanted a quick European response and swift assistance to regions and businesses suffering from the negative effects of Brexit. That is what we have managed to do with today’s agreement. We set out clear criteria for the allocation of the reserve, so that funding goes where it is actually needed. And we made sure the assistance can already be allocated from the end of this year”, said lead MEP Pascal Arimont (EPP, BE).

Regional Development Committee Chair, Younous Omarjee (The Left, FR), said: “We needed to urgently respond to the multifaceted Brexit crisis, which we have done within an extremely short timeframe with the Brexit Adjustment Reserve. The BAR will be flexible and will help citizens, businesses and the sectors most affected. The requirements of the green pact are taken into account in the text, a minimum envelope dedicated to the fishing sector has been agreed, the regions and local authorities can be better involved, and we excluded financial services from receiving support from the fund”.

Next steps

Parliament will vote on the provisional agreement in September.

Background

On 25 December 2020, the Commission presented its proposal for the Brexit Adjustment Reserve, which will be set up as a special instrument outside of the 2021-2027 Multiannual Financial Framework (MFF) budget ceilings.