Pubaffairs news & debates

SAVE THE DATE | Digital Farming: How can the EU turn ambitions into a reality? (November 10)

We are delighted to invite you to an event which will be held on Tuesday, 10th of November 2020 at 18.00.

The event will consist of a evening discussion on how to make the EU ambitions towards digital farming a reality.

Although speakers and event details will be announced in the coming days, we are publishing this event now to make sure you save the date.

Given the current developments regarding the Covid-19 outbreak, this event will be held in streaming

This event is kindly sponsored

 

About the debate

Strengthening the Single Market and adapting it to the digital age is a key cornerstone for Europe’s recovery from the corona crisis. Digitalisation of farming is one of the most prominent features of the European Green Deal, more specifically digital and precision farming is highlighted in the Farm to Fork strategy as a key technology to help achieve the targets and deliver on sustainability goals set forth. Indeed, Europe’s green growth strategy aims at enhancing resource efficiency and global competitiveness by turning ever-pressing climate, biodiversity and environmental challenges into sustainable growth opportunities. While this comprehensive approach has been applied to all sectors of the EU economy, agriculture has emerged as a strategic sector given both food security evolving as a key issue following the Corona crisis,  and its impact on the environment and natural resources. Accordingly, greater farming digitalisation has been pointed out by several commentators as a crucial innovation domain which is poised to allow all European farmers not only to better understand field and crop conditions on a far more granular level, but also to improve crop management and timing of decisions on inputs such as crop protection, water, fertilisers and/or energy consumption, so that the optimal amounts of resources are used only when needed.

In addition, the debate on the digital farming revolution has also highlighted that digital farming is ready for a swift rollout in Europe in the aftermath of the Corona crisis, given its capacity to help the EU farming sector improve its sustainability and recover from the outbreak’s impact. Nevertheless, the analyses on the ongoing evolution of the farming sector has also raised several questions as to the extent to which Europe will be able to put farmers in the position of achieving the full potential of digital technologies and make investments more attractive. Indeed, the public policy debate on agriculture in Europe has raised some concerns as to how the EU will find its way to innovation and digitalisation in the farming sector, given the already existing barriers which may slow farmers’ access to new production systems. Certainly, costs, return on investment, access to the digital infrastructures and regulations which do not fully account for the capabilities of digital farming tools have been highlighted as potential obstacles to the market fully taking off.

From an Europe-wide perspective, the policy framework has been set by the European Green Deal and the Farm to Fork strategy, whereas the traditional EU governance model of agriculture through the Common Agriculture Policy (CAP), notably based on rules established at EU level, will incorporate a more flexible system to decide how best to meet the common objectives, while responding to the specific needs of both farmers and rural communities. However, the potential of the new EU-wide policy stances to achieve the ambitious EU climate and environmental goal will depend on the way new EU policy approaches will be shaped and implemented, as well as on how the EU agricultural sector as a whole will be able to shift towards a sustainable model. How can the EU turn ambitions into a reality?

This event will be held under the Chatham House Rule

The event will commence at 18.00 and it will be held in streaming

The audience will be able to ask questions during both the discussion and the Q&A session through sli.do #DigitalFarming

Please specify, whenever possible, to which speaker you wish to address the question. Questions without this specification will be intended as to be addressed to the panel as a whole.

#DigitalFarming

#SmartFarming

#SustainableFarming

#FutureofCAP

#CAPreform

We look forward to hosting you at 18.00 on the 10th of November 2020

 

INVITATION | Opening the gate: Why and how to regulate large platforms acting as gatekeepers? (November 10)

We are delighted to invite you to an event which will be held on Tuesday, 10th of November 2020 at 15.00.

The event will consist of an open discussion on the upcoming Digital Services Act package and how to regulate large platforms acting as gatekeepers with our distinguished speakers Mr Werner Stengg, Cabinet Member, EVP Margrethe Vestager, European Commission, Ms Stéphanie Yon-Courtin MEP (Renew/FR), ECON Vice-Chair and IMCO Member, European Parliament, Mr Robert Dehm, Digital Policy and Telecommunication Counsellor, German Presidency of the Council of the European Union, Mr Carel Maske, Director, Competition, Microsoft and Mr Fadhel Lakhoua, Director, Regulatory Affairs, Orange.

The debate will be moderated by Philippe Defraigne, Director, Cullen International.

Given the current developments regarding the Covid-19 outbreak, this event will be held in streaming

This is a public event, the Chatham House Rule will not apply

This event is kindly sponsored by

 

About the debate

Under the second priority of the President von der Leyen-led European Commission’s ‘A Europe fit for the digital age’, at the beginning of this year, the EU executive body has started the elaboration of a new legislative action with the principal aims of reinforcing the EU single market for digital services, fostering innovation and enhancing competitiveness of the European online environment. Described as Europe’s first large overhaul of the approach to regulating the European online space for two decades, the Digital Services Act package is largely focused on online services, such as search engines, social media and e-commerce platforms. Those platforms have emerged as crucial actors of the digital transition, not only in terms of innovation and economic growth, but also for their societal effects and impacts on the European rule of law and democracy.

Some of them have developed a gatekeeping role over the years which can question consumers’ choice, or EU innovation and competitiveness and which raises the issue about how can we ensure that the digital economy remains fair and contestable. While competition law can address some of the concerns as shown by past decisions, there is a growing trend arguing in favour of imposing additional specific rules to efficiently tackle structural competition problems exerted by large digital platforms acting as gatekeepers. While such an issue is structuring for the future of the internal market it also is complex: there is a need for new rules but for who, on what and how?

These are the questions addressed by the Digital Services Act and by the New Competition Tool Commission initiative. The European Parliament is adopting its reports on the very matters paving the way for a better framing of the responsibilities of gatekeepers. Similarly the European Council in its 1 and 2 October meeting conclusions called for an update of competition law and for exploring the possibility of adopting rules on the systemic role and responsibilities of online platforms with significant network effects. Finally, numerous stakeholders answered the Commission’s consultations, including platforms and telecom operators. Among them, Orange has emphasised that it is essential to ensure that the online world remains competitive and contestable.

The reform of the EU rules applicable to European online space, with special regard to large platforms acting as gatekeepers, will have to take into consideration the current state of play of the digital single market and its possible evolutions. It should also take into consideration the impacts of any new rules on the various actors of the digital economy, and, as a result, to what extent Europe will be able to strengthen its competitiveness and digital sovereignty and set both internal and global standards on such a structuring initiative.

This is a public event, hence the Chatham House Rule will not apply.

 

The event will commence at 15.00 and it will be held in streaming

The audience will be able to ask questions during both the discussion and the Q&A session through sli.do #Gatekeepers

Please specify, whenever possible, to which speaker you wish to address the question. Questions without this specification will be intended as to be addressed to the panel as a whole.

#Gatekeepers

#DigitalServicesAct

We look forward to hosting you at 15.00 on the 10th of November 2020

Policy Insight | Sovereign debt management in the euro area as a common action problem | CEPS

This Policy Insight discusses sovereign debt management in the euro area, where the Covid-19 crisis has caused a huge increase in such debts. Our two main conclusions are that sovereign debt externalities remain important in the euro area, even in the new environment of permanently lowered interest rates, and that these externalities justify common euro area policies to deal with excessive sovereign debt accumulation and the attendant risks to the euro area’s financial stability.

Our proposal is that a substantial part of the sovereigns purchased by the European System of Central Banks (ESBC) – in the order of 20% of euro area GDP – could gradually be transferred to the European Stability Mechanism (ESM), without any transfer of default risks, which would continue to fall on national central banks.

By rolling over these securities, rather than seeking reimbursement from the issuers, the ESM would make them equivalent to irredeemable bonds. These purchases would be funded by the ESM by issuing its own securities in capital markets. In addition to the national central bank de facto guarantees, these liabilities would be guaranteed by the ESM large (callable) capital and by the existing member states’ guarantee, and the ESM Triple A standing would not, therefore, be endangered. A European ‘safe’ asset would thus be created without the drawbacks of various other proposed schemes. By bringing a large supply of new high-quality assets to the market, the scheme is likely to relieve the downward pressure on interest rates in the bond markets of low sovereign-debt euro area countries. Financial fragmentation would likely be much reduced, though it is not likely to disappear as long as the European Monetary Union (EMU) architecture remains incomplete.

Follow this link to download the full publication

Photo Album | LIVE STREAMING | Partnering for emissions-free mobility in Europe

Policy Insight | Cross-border data access in criminal proceedings and the future of digital justice | CEPS

When investigating and prosecuting crime, a wide range of law enforcement and criminal justice actors increasingly seek to obtain electronic data held by service providers that are subject to another jurisdiction. Yet the processing of cross-border requests for cross-border electronic information raises several legal and practical dilemmas related to basic rule of law and fundamental rights safeguards.

This report examines the ways in which data can currently be requested, disclosed and exchanged, in full respect of the multilayered web of legally binding criminal justice, privacy and human-rights standards that apply within the EU, and in cooperation with third countries. It presents the result of discussions between members of a Task Force set up jointly by CEPS and the Global Policy Institute at Queen Mary University of London. Members of this Task Force included EU and national policymakers, providers of internet and telecommunication services, prosecutors, criminal lawyers, civil society actors and academic experts.

The report initially reviews the set of EU constitutional principles and legal instruments that uphold the existing framework for judicial cooperation in cross-border data gathering. It then looks at initiatives promoted by third countries and at the international level to establish various forms of cross-border public-private cooperation, before examining the e-evidence proposals currently discussed at the EU level.

Based on the inputs of the Task Force members, the report identifies a set of policy, normative and technical solutions that can facilitate rule of law-based and fundamental rights-compliant judicial cooperation for the purpose of cross-border gathering and transfer of data in criminal proceedings.

Follow this link to download the full report

INVITATION | Partnering for emissions-free mobility in Europe (October 14)

We are most pleased to invite you to participate in an evening of discussion on how public and private stakeholders can cooperate in order to achieve an emission-free mobility model in Europe with our distinguished speakers Deputy Director General Matthew Baldwin, DG MOVE, Dr Olivia Gippner, Policy Assistant, Office of the Deputy DG Clara de la Torre, DG CLIMA, Ms Julia Poliscanova, Senior Director, Vehicles and Emobility, Transport & Environment and Ms Joanne Kubba, Senior Director EMEA Public Policy, Uber.

Director General Henrik Hololei, DG MOVE will hold a keynote speech.

The discussion will be moderated by Ms Karen Vancluysen, Secretary General of Polis, Cities and Regions for Transport and Innovation.

Given the current developments regarding the Covid-19 outbreak, this event will be held in streaming

This event was co-organised with

&

 

About the debate

Before the outbreak of the pandemic, cities in Europe and all over the world were in the midst of a “mobility renaissance”. New shared modes of mobility were increasingly embraced by users, offering convenient, eco-friendly alternatives for commuting and urban travel. However, mobility patterns changed with the Corona crisis, as people sought individual means of transport to reduce safety risks, including by returning to personal cars. Public transport had to reshape its operations and digital mobility providers had to adapt their services, introducing new safety measures.

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Photo Album | LIVE STREAMING | Open source and an open world: What are the EU prospects on global multilateral governance after the coronavirus pandemic?

Policy Insight | EU Trade and Investment Policy since the Treaty of Lisbon | CEPS

This paper analyses the most salient developments in the EU’s trade and investment policy since the entry into force of the Treaty of Lisbon, and sketches the key trade challenges and priorities for the current Commission. In particular, it analyses how the EU institutions applied their newly conferred competences within a new institutional set-up in order to address the various internal and external challenges facing EU trade policy.

The paper demonstrates that since the entry into force of the Treaty of Lisbon more than a decade ago, the EU institutions have had to constantly use their newly conferred competences within a new institutional set-up to address the various internal and external challenges. Moreover, it argues that a more assertive trade policy under the ‘geopolitical’ von der Leyen Commission will be consolidated and further reinforced in the ongoing trade review of the EU’s trade policy, which will aim to contribute to the EU’s post-Covid 19 recovery in line with the EU’s new ‘Open Strategic Autonomy’ model.

Follow this link to download the publication

INVITATION | Open source and an open world: What are the EU prospects on global multilateral governance after the coronavirus pandemic? (13th October)

We are delighted to invite you to an event which will be held on Tuesday, 13th of October 2020 at 18.00.

The event will consist of an open and interactive discussion on the EU prospects regarding multilateral governance after the coronavirus pandemic with our distinguished speakers Ms Maria Soraya Rodriguez-Ramos MEP, Chair of the Delegation for relations with the Pan-African Parliament and AFET Committee Member, Professor Andrea Renda, Head of Global Governance, Regulation, Innovation and the Digital Economy (GRID), CEPS, Mr Andy Purdy, Chief Security Officer, Huawei USA and Mr Henry Llewellyn, Ad interim Chair, Brussels New Generation of young leaders.

Mr Fabio Massimo Castaldo MEP, Vice-President of the European Parliament will hold the introductory remarks through a video message.

The event will be hosted by Jennifer Baker, senior journalist on tech policy and digital rights.

Given the current developments regarding the Covid-19 outbreak, this event was held in streaming

This was a public event, the Chatham House Rule did not apply

This event was sponsored by

About the debate

As highlighted in the international public debate that followed the 75th anniversary of the United Nations, the coronavirus pandemic has shaken Europe and the world to its core, testing healthcare and welfare systems, economies, societies and way of living and working together across countries. To respond to the crisis, Europe has come together and put forward the Next Generation EU” not only to deal with the dire impacts of the heath emergency, but also to prepare the ground to a more sustainable and prosperous future and build the next generation of European leaders that tomorrow needs. Every generation has been defined by some historical events that have spread uncertainty or fear. However, these types of events have also given room for a change in the way citizens from all over the globe perceived the world they are living in and the way in which they made individual and collective decisions. Several authoritative commentators therefore stated that now is a defining moment in history as regards international diplomatic and economic relations, as well as the future of a fully connected, intelligent world.

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Assessing Next Generation EU | Europp – LSE Blog

The unprecedented fiscal package adopted by the European Council this summer – dubbed Next Generation EU – is vital for the recovery of the euro area, write Lorenzo Codogno and Paul van den Noord. However, they estimate that the creation of a Eurobond and permanent fiscal capacity at the centre would have been a more powerful means to mitigate the impact of the crisis.

Featured Image Credit: European Council

The magnitude of the Covid-19 shock to economic activity in the Eurozone and elsewhere is unprecedented in post war history. The OECD, for instance, currently expects the Eurozone economy to shrink by 7.9% in 2020, almost twice the contraction in 2009. Yet the macroeconomic policy responses have been equally unprecedented, both at the national and pan-European levels. Most significantly, the Covid-19 pandemic finally broke the taboo on a pan-European fiscal policy, dubbed ‘Next Generation EU’.

Although the programme is not yet finalised, it is set to contain the following elements. The bulk of the fiscal expansion is provided in the form of grants and loans to member states by the Recovery and Resiliency Facility (RRF) amounting to €312.5 and €360 billion, respectively, summing up to roughly 5% of EU GDP. While the exact formulas are still under discussion, the intention is to spread out the transfers over the years 2021 to 2025, with the onus of the support on those countries that have been hit the most by the crisis. Alongside the RRF, member states would receive €77.5 billion under a range of other programmes, such as ‘ReactEU’ and the Just Transition Fund.

Using conservative assumptions on the multiplier effects, we estimate the impact on Eurozone economic growth to be a cumulative 1.5% by 2023 and 3.0% by 2027 (Figure 1). Most of this will benefit the Eurozone periphery, where the cumulative effect could be as large as 4% by 2023 and well over 8% in 2027.1 While impressive enough, this is excluding the impact of a range of other – national and supranational – policy initiatives that need to be taken into consideration as well. This will tell us whether or not Next Generation EU is indeed the game-changer it is intended to be, or not.

We use a stylised macroeconomic model developed in a recent paper that is aimed at capturing the cumulative impact of policy change over the medium run. We proceed in two steps, broadly reflecting the chronology of events. First, we look at both the national and pan-European fiscal responses (e.g. SURE) which were primarily shaped during the initial stages of the outbreak and the associated lockdowns in the spring, as well as the ECB’s monetary policy response. Next, we add in the impact of Next Generation EU.

Figure 1: Next Generation EU – estimated cumulative impact on real GDP

Source: European Commission, European Council, authors’ own calculations.

Finally, we compare these policy responses to a hypothetical case in which an alternative macroeconomic policy and governance framework is assumed along the lines of our paper. Specifically, we assume (i) a single Eurobond to replace national bonds on banks’ balance sheets so as to break the link between banking and sovereign distress, (ii) Eurozone fiscal capacity, including automatic stabilisers and discretionary (but rules-based) policy, and (iii) a new quantitative easing (QE) scheme that mandates the ECB to purchase Eurobonds (while national sovereigns lose QE eligibility and those still on the ECB’s balance sheet are swapped for Eurobonds as well).

All simulations assume that the core and the periphery are hit by an adverse demand shock of respectively -10% and -15% of GDP and an adverse supply shock of respectively -5% and -7.5% of GDP. This is obviously a very crude gauge of the Covid-19 shock, and views are bound to evolve as information flows in. Also, we assume a favourable risk premium shock of -200 bps in the core – and hence an equivalent shock to the spread – due to a flight to safety (this is aside from the endogenous change in the spread in response to the changes in debt positions).

Actual policy

Table 1 reports the computed changes in main aggregates and policy variables in the core, periphery and euro area at large. The first column, labelled ‘I’, shows the combined impact of:

1. Monetary policy stimulus consisting of a sustained 25bp cut in the policy rate2 and asset purchases amounting to 12.3% of GDP per annum sustained for two years.3 We also assume an exogenous cut in the periphery yield by 200 bps over and above the impact of the ECB’s asset purchases to reflect the availability of a new ESM credit line (though this may never be used for various reasons).

2. Fiscal stimulus amounting to 5.2% of GDP in the core and 3.2% of GDP in the periphery.4 Besides, we factor in a range of pan-EU measures adopted in the spring, such as React EU, that involve fiscal stimulus of the order 0.4% of GDP in the core and 0.8% in the periphery.

Table 1: Shock-responses

Note: Scenarios refer to: I = National fiscal responses + SURE + ESM credit line + monetary policy, II = I + ‘Next Generation EU’, III = Safe asset + permanent fiscal capacity.

Column II of the table reports the computed outcomes of the actual policy, including the impact of Next Generation EU. Specifically, while leaving all other assumptions unchanged, it is assumed additionally that:

1. Grants are allocated under the Recovery and Resilience Facility to the tune of 1.0% of local GDP in the core and 4.5% of local GDP in the periphery. As a result, the increase in the primary deficit at the centre would average around 3.5% of euro area GDP.

2. Loans are allocated to the tune of 0.4% of local GDP in the core and 6.7% of local GDP in the periphery. This leaves the primary deficit at the centre unaffected (loans are below the line). Still, it does have an impact on EU-debt (and a corresponding issuance of common bonds) of an additional 3.5% of Eurozone GDP.

3. About 20% of the above Next Generation EU package is assumed to be used for funding of existing national measures, which therefore would reduce the national fiscal stimulus accordingly.

The main results of the simulation can be summarised as follows:

1. The contraction of output is considerably smaller (-1.5%) with much less divergence between the core and periphery. The widening yield spread would be neutralised as well, while bank credit would not shrink. So, the package would be quite effective according to our stylised model.

2. On the fiscal side, we see the primary deficits at the national level still increasing substantially by 6% of GDP in the core and 3.5% of GDP in the periphery. Yet, especially in the periphery, this is a much smaller increase than in scenario I, helped by the more favourable macroeconomic environment, the less prevalent automatic fiscal stabilisers and the use of transfers from the centre to fund national programmes. The same holds for the public debt position.

Policy response with a safe asset and fiscal capacity

Scenario III reported in Table 1 is based on the following assumptions:

1. We maintain all national policy measures as well as the creation of the ESM credit line as assumed in scenarios I and II. We also assume the supranational fiscal stimulus (both loans and grants) on aggregate to be the same as in scenario II, but instead with the fiscal stimulus used to fund pan-European (as opposed to national) programmes and projects. The rationale for this choice is to avoid the crowding out of national spending programmes. We also slash the asset purchases by the ECB by half.

2. Alongside discretionary fiscal expansion at the centre, we assume supranational automatic fiscal stabilisers to cater for some horizontal redistribution. This could be the result of a centralised unemployment insurance or re-insurance scheme or the creation of a rules-based European buffer fund, for example. Specifically, we assume that for every 1 percentage point contraction in national GDP, an automatic transfer of 0.2 percentage points of national GDP would occur. This transfer replaces equivalent national automatic stabilisers to provide genuine fiscal relief.

3. We assume that a safe asset (the same common bond that is issued to raise money for fiscal stimulus at the centre) is created before the pandemic and swapped for national sovereigns on banks’ balance sheets to remove the bank-sovereign doom loop. We also assume that only the safe asset has been made eligible for purchases by the ECB. Hence all asset purchases carried out by the ECB in this scenario refer to purchases of the safe asset (in the secondary market).

The main results can be summarised as follows:

1. The aggregate stabilisation is more potent than in scenario II, though this is entirely attributable to the stabilisation of output in the core. This is not surprising given the absence of (discretionary) fiscal transfers. Yet the periphery is not (much) worse off relative to scenario II. Even so, the yield spread widens somewhat relative to scenario II, reflecting the absence of sovereign debt purchases by the ECB, but without affecting bank lending as the doom loop is broken.

2. The fiscal-monetary policy mix has shifted towards the former, with the aggregate fiscal deficit at the centre widening more than in scenario II – as the supranational automatic stabilisers kick in – and the asset purchases halved. Since the ECB would purchase the common bond only, its yield is now disconnected from the national yields and falls relative to them.

All in all, with a safe asset and a (partly rules-based) fiscal capacity, more of the pandemic shock would have been absorbed, with less quantitative easing needed. Moreover, the asset purchases would be directed to the safe asset rather than national sovereigns and hence avoid the political conflict this could entail and the need to keep the purchases in check with the capital key. The current policy response could be seen as a second-best, i.e. a less efficient way to respond to an economic shock, although still powerful, if not vital. This exercise shows that it would be worthwhile considering a more permanent macroeconomic stabilisation mechanism in the future.

Notes

1. The ‘core’ includes Belgium, Germany, France, Netherlands, Austria, Finland, Luxembourg, and, for the purpose of this exercise also Estonia and Ireland. All other Eurozone countries are included in the periphery.

2. This refers to the PELTROs which are available at a rate 25 bps below the REFI of -0.5%.

3. This comprises the additional envelope of the Asset Purchase Programme (APP) of €120 billion adopted in March 2020 and the Pandemic Emergency Purchase Programme (PEPP) with an envelope of €1,350 billion adopted in June 2020 (including an initial envelope of €750 billion adopted in March). Both are assumed to be extended by another year to a total of €2,940 billion or 24.6% of 2019 GDP.

4. Estimates based on data from Bruegel with some modifications.