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Dear Readers,
Today, as an exception, we have some news of our own. For years, our aim has been to navigate you through the maze of European laws and directives. With traffic light analyses, studies, inputs, adhocs, dossiers, not to mention this Newsletter, the Centrum für Europäische Politik is your trusty guide.
And starting next week, there will be something new: our website, Common Ground of Europe, will be a digital showcase for Europe. Together with experts from the worlds of academia, politics and business, we will set out in search of what makes Europe tick - its values, strengths and successes, its opportunities, solutions and inimitable nature.
In short: We are searching for what unites Europe, what makes it distinctive and thus resilient in a rapidly changing and not always friendly world. With that in mind, we will be gathering essays, interviews and other contributions worthy of your attention. To kick things off, we will be hearing from, among others, EU Commissioner for Economic Affairs Paolo Gentiloni, FDP defence expert Marie-Agnes Strack-Zimmermann and UniCredit CEO Pier Carlo Padoan.
Our teams in Berlin, Freiburg, Rome and Paris are convinced that this is going to be Europe's decade, despite all the global threats, crises and imponderables. Our continent is going to shed its skin, as it has done so many times in its turbulent history. It will reinvent itself whilst preserving the tried and tested; it will defend freedom, human dignity and peace, and on this foundation build a weatherproof house.
The challenges are many and varied. They range from digitalisation and other new technologies to geopolitics and defence, from the energy transition to the fight against climate change, from monetary policy to health policy and consumer protection.
Why not take a look? You will find our new showcase on Europe at www.commongroundeurope.eu. We will also be delighted to receive your suggestions and contributions and very much look forward to hearing from you.
In this Newsletter we will also be looking at tougher EU-7 emissions standards, cyber defence and the so-called right to repair, among many other topics.
We wish you an enjoyable read. Stay tuned!
Best wishes
Dr. Jörg Köpke
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"Why Europe!": In the face of numerous global threats, only Europe itself can open the door to the future and defy all doubters.
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Latest EU Proposals in Focus
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Vehicles: Tougher Euro 7 Emission Standards
On 9 November 2022, as part of its Sustainable Mobility Strategy [COM(2020) 789; see cepPolicyBrief 9/2021] and its Zero Pollution Action Plan [COM(2021) 400; see cepPolicyBrief 20/2021] the European Commission will propose stricter Euro 7 emission standards for air pollutants from all cars and light commercial vehicles [Regulation (EC) No. 715/2007] and from lorries and buses [Regulation (EC) No. 595/2009]. Emission limits will be tightened in order to ensure that, in future, vehicles are more environmentally friendly. In addition, EU rules will take account of new vehicle technologies and ensure that emissions are measured under real-life conditions.
Circular Economy I: Reduction of Packaging Waste
On 30 November 2022, as part of its Action Plan for a Circular Economy [COM(2020) 98; see cepPolicyBrief 5/2020], the Commission will propose amendments to the Packaging and Packaging Waste Directive [94/62/EC]. The new EU rules aim to make packaging more reusable and recyclable, increase the proportion of recycled materials in packaging, avoid excessive use of packaging and reduce the overall amount of packaging waste.
Circular Economy II: Bio-based, Biodegradable and Compostable Plastics
On 30 November 2022, as part of its Action Plan for a Circular Economy [COM(2020) 98; see cepPolicyBrief 5/2020], the Commission will present a Communication on the EU-wide management of bio-based, biodegradable and compostable plastics [see cepStudy Circular Plastics Economy (2020)]. The aim is to make EU policies more consistent, improve environmental protection, prevent consumer misinformation, increase investment security within the internal market and encourage competitiveness and innovation.
Products and Services: Proof of Environmental Impact
On 30 November 2022, the Commission will propose a new Regulation on the environmental impact of products and services. Companies will be obliged to prove their information on the environmental impacts of their products and services ("ecological footprint") using standardised quantification methods. The information should be reliable, comparable and verifiable throughout the EU in order to prevent "greenwashing" - i.e. giving a false impression of the actual environmental impact. This aims to increase consumer confidence in eco-labels and environmentally relevant information, as well as help commercial customers and investors make more sustainable choices.
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Carbon Removals Certification of Measures
On 30 November 2022, the Commission intends to propose a new Regulation with EU rules on the certification of measures to remove carbon from the atmosphere. These will serve to develop additional EU provisions for monitoring, reporting and verifying the authenticity of such measures. The aim is to promote carbon removals and provide incentives for using innovative technologies for Carbon Capture Utilization and Storage, CCU/CCS; see cepPolicyBrief 5/2014) in agriculture, forestry [see cepPolicyBrief 9/2022] and industry.
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Crypto Assets: Strengthening Tax Transparency
On 16 November, the Commission will present a proposal to strengthen tax transparency for crypto assets. In recent years, digitalisation has also made its way into the financial sector and new digital assets have emerged in the form of crypto assets (e.g. Bitcoin). According to the Commission, crypto assets not only offer opportunities but also pose numerous risks, such as with regard to consumer and investor protection, money laundering and tax evasion. While the protection of consumers and investors, and the safeguarding of financial market stability have already been addressed under the Regulation on markets in crypto assets (see cepPolicyBrief), the issue of taxation has not yet been adequately dealt with. According to the Commission, national tax administrations regularly have difficulty in obtaining information on the use of crypto assets, which can lead to tax losses. The fact that crypto assets are used for both payment and investment purposes and are subject to massive price fluctuations is also a headache for administrations. Information deficits also stem from the fact that crypto-assets and participating intermediaries are not subject to reporting obligations vis-à-vis the tax authorities and so far no exchange of information has been prescribed between the Member States. The forthcoming proposal for a revision of Council Directive 2011/16/EU on administrative cooperation in the field of taxation should therefore contain measures to improve tax transparency in order to ensure appropriate taxation and prevent tax evasion.
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Cyber Defence: Revision of the EU Cyber Defence Policy Framework (CDPF)
On 9 November, the Commission, together with the High Representative of the Union for Foreign Affairs and Security Policy, will present a revision of the Cyber Defence Policy Framework (CDPF). This framework supports Member States in developing cyber defence capabilities. It will also strengthen the cyber protection of European security and defence infrastructure. In the course of the revision, coordination between relevant actors - e.g. EU Military Staff (EUMS), European Security and Defence College (ESDC), Commission and European Defence Agency (EDA) - will be further improved. In addition, cybersecurity and defence should be more closely integrated into the EU's overall security and defence agenda.
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Right to Repair: Proposed Legislation Will Not Come until 2023
The Commission is planning a so-called right to repair. This should lead to products being easier to repair and consumers using these products for longer overall. The aim is therefore to extend the life or useful life of products, and thereby above all to consume fewer resources (see cepInput 5/2022). The Commission had originally intended to present a concrete legislative proposal this month. However, a veto by the so-called Regulatory Scrutiny Committee means that the so far unpublished draft law has to be revised by the Commission. Only after improvements have been made can the proposal be officially presented - probably in March 2023.
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The Commission, the Council and the European Parliament regularly negotiate in the so-called trilogue on EU legislative proposals in order to find a common position. We have put together a summary of the most important trilogue decisions since the last Newsletter.
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Trilogue Agreement on the European Standardisation Regulation
On 12 October, a provisional political agreement was reached on the amendment of the European Standardisation Regulation. The aim of the amendment is to increase the influence of the Member States’ standardisation bodies on the preparation of European standards and to reduce the influence of third countries on European standards.
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Trilogue Agreement on CO2 Emission Standards for New Passenger Cars and Vans
On 27 October, a provisional political agreement was reached on the regulation on CO2 emission standards for new passenger cars and vans (see cepPolicyBrief 6/2022). According to the agreement, by 2030 CO2 emissions from new passenger cars must be reduced by 55 percent and from new vans by 50 percent compared to 2021. From 2035 onwards, cars and vans may no longer emit any CO2 at all, which represents a de facto ban on the internal combustion engine. In this respect, the new EU regulations themselves do not provide for any exceptions, such as the possibility of operating combustion engines with synthetic fuels after 2035. The legally non-binding recitals merely state the Commission's intention to present a proposal for the post-2035 approval of vehicles that run exclusively on CO2-neutral fuels after consulting stakeholders. The Commission has to publish a progress report by the end of 2025, which should deal with measures to support and retrain employees in view of the expected job losses in the automotive industry. However, the regulation itself that has now been adopted does not yet provide any funds for this.
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European Long-Term Investment Funds: Agreement on New Legal Framework
On 19 November 2022, a provisional political agreement was reached on a new legal framework for European Long-Term Investment Funds (ELTIFs). ELTIFs are a category of investment fund established with the aim of channelling long-term capital from professional and retail investors into infrastructure projects, real estate and unlisted companies. So far, however, only a few such funds have been launched. This is attributed to the fact that the existing legal framework [Regulation (EU) 2015/760, see cepPolicyBrief 51/2013] has numerous weaknesses. On the one hand, there are constraints on the distribution process (demand side) and, on the other, there are strict rules on the ELTIF's permitted investments, portfolio diversification and cash borrowing (supply side). These are now being relaxed with the agreement on a new set of rules. For example, it will be easier for retail investors to invest in ELTIFs and the range of eligible assets in which ELTIFs may invest will be expanded. The Council and the European Parliament must now officially approve the agreement in the coming weeks.
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The EU Commission asks decision-makers and interested parties from civil society for their opinion on European policy proposals. Here is our short-list of the most important consultations:
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Food Safety: New Rules for Food Contact Materials Planned
The Commission wants to revise the legislation on food contact materials, such as food packaging, kitchen utensils and tableware. The background to this is that they may allow e.g. hazardous chemical substances to get into food. The aim is to ensure food safety and thus also a high level of health protection. This will be achieved primarily by reducing the use of certain chemicals in this area. The new legislation also aims to encourage the use of more reusable and recyclable packaging solutions.
The submission period for opinions ends on 11 January 2023.
Go to Consultation
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Enforcement of Consumer Rights: Strengthened Cooperation Announced
Despite largely harmonised consumer protection rules in the EU, enforcement of consumer law is very uneven, according to the Commission, as it falls under the competence of the Member States. Non-compliant business practices in increasingly digitalised markets are, however, by their very nature, cross-border. The Commission therefore wants to strengthen EU-wide cooperation between consumer protection authorities. For example, the current legal situation does not allow for simultaneous actions against several companies that are violating the same consumer rights. Flexible, dissuasive, cost-effective and, above all, rapid action is necessary, however, when unfair business practices are widespread or affect entire sectors of the economy.
The submission period for opinions ends on 21 December 2022.
Go to Consultation
Out-of-court Dispute Resolution: Adapting to Digital Markets
The Commission wants to strengthen consumer rights in digital markets by adapting the legislation on out-of-court dispute resolution. Firstly, consumers do not generally bring court proceedings to assert their rights in low-value disputes. Secondly, consumer disputes are increasingly cross-border in nature and therefore often complex - when online platforms are involved, for example. The Commission sees a danger here that companies will increasingly use private redress systems that cannot guarantee compliance with existing consumer rights. Therefore, faster and simpler legal protection mechanisms are to be established.
The submission period for opinions ends on 21 December 2022.
Go to Consultation
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Meeting of the Eurogroup. This will concern, among other things, budgetary measures to mitigate the impact of high energy prices.
Judgements of the ECJ in Cases C-885/19 P (Fiat Chrysler Finance Europe v Commission) and C-898/19 P (Ireland v Commission). The question is whether and to what extent tax relief can constitute prohibited state aid.
Meeting of Economic and Financial Affairs Council (Ecofin). Meeting of the Economic and Financial Affairs Council (Ecofin). This will concern, among other things, current financial services legislative proposals.
Online webinar on climate change and health. The climate crisis will increasingly affect people's health and well-being. The webinar will include the presentation of a report focussing on the link between heat and infectious diseases.
9 - 10 November 2022
Session of the European Parliament. This will concern (1) foreign subsidies that distort the internal market (see cepPolicyBrief 3/2022) (2) the Directive on Sustainability Reporting (see cepPolicyBrief 21/2021), on (3) the Directive on measures for a high common level of cyber security in the Union (see cepAdhoc 9/2022), and on (4) the Regulation on the digital operational stability of financial undertakings (see cepPolicyBrief 11/2021).
11 November 2022
Meeting of the Economic and Financial Affairs Council (Ecofin). This will concern the 2023 budget.21- 24 November 2022Strasbourg
Session of the European Parliament.*
22 November 2022
Meeting of the General Affairs Council (GAC).*
1 December 2022
Meeting of the Competitiveness Council (Internal market and industry).*
5 December 2022
Meeting of the Eurogroup.*
6 December 2022
Meeting of the Economic and Financial Affairs Council (Ecofin).*
*The precise agenda was not yet available at the time of going to press.
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cepInput: Strategic Reserves of Critical Metals
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Lithium, cobalt, rare earths: The energy transition and electromobility require substantial quantities of critical metals. The prerequisite is a new European risk management in business and politics. Until now, many raw materials have come from autocratic states – especially China. The Centrum für Europäische Politik (cep) has developed a multi-stage strategy plan. It envisages diversifying sources of supply and specifically promoting the recycling of critical metals.
Go to cepInput 14/2022
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cepPolicyBrief: Ecodesign for Products
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Whether refrigerators, lamps, televisions or textiles: The Commission wants to be able to set so-called ecodesign requirements for almost all products in the EU. The goal is to reduce energy and resource consumption in the production, usage and disposal of these products. This should accelerate the transition from a "linear throwaway society" to a circular economy. The cep is concerned that too rigid and small-scale requirements will lead to trade-offs - and eventually even negative effects on sustainability.
Go to cepPolicyBrief 10/2022
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cepAdhoc: NIS 2 Directive: New EU rules on Cybersecurity
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Hybrid warfare, hacker attacks, cyber-attacks: Parliament and the Council have agreed on new cybersecurity rules in Brussels. According to the so-called NIS 2 Directive, around 160,000 European companies and public authorities will in future be subject to uniform EU requirements for managing cyber risks and reporting cyber incidents. The cep considers some regulations too broad and calls for stronger focus.
Go to cepPolicyBrief 9/2022
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cepInput: France in a New Political Era
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France in a new political era: the French government should look for a robust parliamentary majority to preserve political stability in times of unprecedented crises. The Centre de Politique Européenne (cep) Paris has analysed the political situation in France and its recommendation to the government is to keep on looking for a long-term commitment with the conservative LR party to avoid political and economic instability.
Go to cepInput 13/2022
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Dear Readers,
Spoken in 1943, Willy Brandt's words are more valid now than ever: "The day will come when the hatred, that in wartime seems unavoidable, will be overcome. One day, the Europe in which Europeans can live must become a reality." The Centrum für Europäische Politik firmly believes in this.
Yours
Dr. Jörg Köpke
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