| | Dear Readers,
One figure caused a stir recently: 190,000. That is the number of small and medium-sized businesses that are going to disappear from the market in Germany by the end of 2026 because they cannot find a successor. Valuable knowledge will be lost forever - and with it a noticeable amount of added value.
Not surprising therefore that the land of inventors and engineers is losing its ingenuity. China (19,041) could soon overtake Germany (24,684) when it comes to the number of patents being filed in Europe. While China saw a gain of 15% in 2022, new German registrations fell by 4.7%. Patents are seen as an indicator of how technologically advanced a country is.
Not all, but a lot of this is linked to demographic change, which has long since turned the German population pyramid into an upside-down Christmas tree. There are currently two tax payers for every pensioner in Germany - in the early 1960s, there were six.
For Generation Z, born between 1997 and 2012, this turn of events is both a blessing and a curse. A blessing because, even with poor final grades, which are hardly ever awarded these days, they will find a secure job. A curse, because they are likely to have a very long working life ahead of them, during which they will have to finance the pensions of the large number of older people.
This has led Generation Dropout to draw fatalistic conclusions - work is no longer paramount. Employers, on the other hand, are already being forced to move their production abroad because, with calls for a four-day week and a more relaxed three-shift system, they can no longer make profitable use of costly machines. Skilled migration into the labour market could be a solution but so far this has been met with a tangle of bureaucracy.
It is time for politics to solve the problems - and not just name them.
Yours
Dr. Jörg Köpke |
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| | | | | | Latest EU proposals in focus |
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| | Digital Economy| Trade| Single Market | Competition |
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| | Digital education: Commission pursues easier access On 18 April, the Commission will publish a proposal for a Council Recommendation on the key factors for successful digital education. The proposal, which is part of the Digital Education Action Plan 2021-2027 (DEAP), will focus on access conditions for high quality and inclusive digital education and training. The aim is to reduce the "digital divide" that has emerged in the wake of the pandemic. The key factors to be identified by the Commission will include tackling connectivity and equipment gaps and digital teaching skills. Acquiring digital skills will be essential in a world where teaching increasingly takes place online. |
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| | | | | | Health | Consumers | Internal Market |
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| | EU patent law: Comprehensive Commission proposal expected in April The Commission intends to present a comprehensive reform of EU patent law at the end of April. The overall aim is to create a more uniform patent system in Europe. The patent package will include changes to the rules on compulsory licensing, standard essential patents and supplementary protection certificates (SPCs). SPCs extend patent protection for medicines to compensate patent holders for the period in which a patent already applies but the corresponding medicine has not yet been authorised for sale. This is necessary because there can often be more than eight years between patent application and market approval (see cepPolicyBrief 25/2018). SPCs are currently granted by patent offices in the different Member States and are handled differently. As a result, even the period of validity of SPCs may differ in some cases. According to the Commission, this leads to higher costs and makes it more difficult for EU citizens to access novel and affordable medicines. The Commission has also noted that so-called standard essential patents are also being interpreted and handled differently in the Member States. Standards facilitate compatibility between products from different manufacturers. In the mobile communications industry, the standards are currently 4G or 5G. Standard essential patents are patents which protect technologies required for such standards. Finally, compulsory licences are also to be re-regulated. These allow third parties to use a patented technology or manufacture a patented product without the consent of the patent holder. Different compulsory licensing systems exist in the Member States. According to the Commission, this leads to considerable legal uncertainty and hinders efficient crisis response, especially when Member States impose national compulsory licensing in EU-wide crises, such as health, environmental or industrial emergencies. |
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| | | | | | | Revision of EU pharmaceuticals legislation: Commission proposal postponed again
The Commission had announced that it would present a comprehensive revision of general pharmaceuticals legislation at the end of March. This was to be presented alongside revised provisions on paediatric medicines and medicines to combat rare diseases, as well as a Council Recommendation on combating antimicrobial resistance (see cepInput 2/2023). It is now apparent that the corresponding Commission proposals are being postponed yet again. The provisionally new date for the release is the end of April. |
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| | | | | | | Cyber-solidarity: Improved detection of cyber-threats and cyber-incidents
On 18 April, the Commission will present an initiative on cyber-solidarity (Cyber Solidarity Act). The project focuses on establishing an EU infrastructure of Security Operation Centres (SOCs). This infrastructure is intended to detect cyber threats and cyber incidents at an early stage and identify threat situations more quickly. The infrastructure will be financed from national funds and through the EU's Digital Europe Programme, which will be adapted accordingly. The SOCs should mean that authorities, in particular, can be warned of threats at an early stage allowing them to react quickly. The second focus of the initiative is to audit critical infrastructure operators for potential vulnerabilities using EU risk assessments. This aims to strengthen their preparedness and ability to react in dangerous situations. Finally, a "cyber reserve" is to be created under the Cyber Solidarity Act. This group of selected and trusted private companies will be able to support the Member States in combating serious cross-border security incidents. A certification procedure will be established, if necessary, to assess the trustworthiness of these companies.
Cyber-skills: Initiative to increase the number of skilled workers
On 18 April, the Commission will present an initiative for a Cybersecurity Skills Academy. The project aims to attract more professionals in the field of cyber defence as there is a clear lack of expertise in this area in the EU. The idea is to pool existing initiatives in order to strengthen cybersecurity capabilities, enhance joint communication on the subject and improve coordination efforts to combat the skills shortage. |
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| | | | | | | Banking Crisis and Deposit Insurance: Adapting the Rulebooks to deal with Bank Failures
On 18 April 2023, the Commission intends to present a package to revise the regulatory framework for the management of banking crises and deposit insurance. This is a reaction to the recent turbulences on the financial markets, especially in the USA and Switzerland. These had also raised doubts about the viability and credibility of EU legislation on the orderly resolution of banks that was established in the aftermath of the financial crisis. The Commission had only taken the proposals off its agenda shortly before the bankruptcy of Silicon Valley Bank (SVB). Now it is taking them out of the drawer again.
Within the framework of the package, the Bank Recovery and Resolution Directive (BRRD, see cepPolicyBrief 10/2013 and cepPolicyBrief 11/2013), the Deposit Guarantee Schemes Directive (DGSD, see cepPolicyBrief) and the Single Resolution Mechanism Regulation (SRMR, see cepPolicyBrief 42/2013) are expected to be revised.The three legal acts mentioned were adopted in response to the financial crisis in order to increase the stability of the European financial system, strengthen depositor confidence and reduce the burden on taxpayers in the event of bank failures. Together with the centralisation of banking supervision at the ECB (SSM, see cepPolicyBrief 47/2012), they are important pillars of the EU project "Banking Union". Part of this project is actually also the much discussed establishment of a European deposit insurance system (EDIS, see cepPolicyBrief 5/2016). However, the EU legislators have not yet been able to agree on such a system. However, a debate on this issue has now flared up again.
The Commission now wants to further develop the EU laws on bank resolution and deposit insurance. Among other things, the provisions on the application of resolution tools in the event of a crisis, on the Public Interest Assessment (PIA) of a resolution as well as on supervisory measures with regard to failing banks are to be addressed. In doing so, the Commission aims to increase efficiency and overall coherence in the management of banking crises in the EU and to strengthen the level of depositor protection. In particular, it aims to improve the resolvability of small and medium-sized banks and minimise the use of public funds in bank failures. |
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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 Regulation to protect against economic coercion by third countries
On 28 March 2023, a provisional agreement was reached on the Regulation on the protection of the Union and its Member States from economic coercion by third countries. The Regulation aims to deter third countries from using coercive economic measures to pressurise the EU and its Member States into taking certain actions or measures. In order to achieve this, it authorises the Commission to impose trade restrictions on these countries, such as increased customs duties, import licences or restrictions on access to procurement procedures. |
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| | | | | Trilogue agreement on energy efficiency
On 10 March, a provisional agreement on a revised Energy Efficiency Directive [2012/27/EU; see cepInput 5/2018] was reached. This provides that Member States must collectively reduce final energy consumption by at least 11.7% by 2030 compared to the 2020 estimate. That figure corresponds to a maximum EU final energy consumption of 763 million tonnes of oil equivalent and will require Member States to set indicative national contributions and trajectories. If these combined contributions are not sufficient to reach the 11.7% savings target, the Commission will adjust them according to a predefined formula. Member States must save 1.3% of final energy consumption each year until 2025 - rising thereafter to 1.9% by the end of 2030. Measures used for the energy performance of buildings [see cepPolicyBrief 14/2022)] and under the two emissions trading systems, as well as emergency measures in the energy sector, can be taken into account. Every year, 3% of the floor area of public building stock must be renovated to make it more energy efficient, and the public sector must achieve final energy savings of 1.9%. |
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| | | | | Trilogue agreement on alternative marine fuels
On 23 March, a provisional agreement was reached on a new Regulation on alternative marine fuels [FuelEUMaritime, see cepPolicyBrief 17/2022]. This provides that ship operators will gradually have to reduce the greenhouse gas intensity of the fuels they use, compared to 2020 levels: by 2% from 2025, by 6% from 2030, by 14.5% from 2035, by 31% from 2040, by 62% from 2045 and by 80% from 2050. From 2034, there will also be a 2% mandatory minimum quota for e-fuels. The targets apply to all fuel consumed by ships with a gross tonnage of 5000 and above when travelling between or calling at EU ports. For journeys to or from a port outside the EU, only half of the fuel consumption is covered by the rules. |
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| | | | Technology and Infrastructure |
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| Security of supply: Critical Raw Materials Act
On 16 March 2023, the Commission presented a draft Regulation that aims to promote a new approach to mineral raw materials such as rare earths and lithium, which are crucial for key future technologies. These raw materials are currently almost exclusively mined and processed outside Europe, with a strong geographical concentration in individual countries, above all China (see cepInput 11/2022). In order to reduce current supply risks in the medium term, the Commission is proposing a broad package of measures to diversify sources of supply. This will include the promotion of domestic mining and smelting projects as well as increased cooperation with third countries (see cepInput 4/2023), the coordination of national raw material reserves (see cepInput 14/2022) and the development of a circular economy for critical mineral raw materials in Europe. At the heart of the proposal is a focus on so-called strategic projects. These will be given priority in approval procedures and when it comes to accessing public funding sources. Clear capacity targets for the different sources of supply, and the establishment of a risk monitoring system, are planned for the purpose of governance. Furthermore, the proposal also contains a number of additional information requirements for various private actors in the supply chains, which could prove to be a bureaucratic stumbling block for a European raw materials strategy. |
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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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| | | Circular economy: Ship recycling
As outlined in its Strategy for Sustainable and Intelligent Mobility [see cepPolicyBrief 9/2021], the EU Commission wants to assess the Ship Recycling Regulation [(EU) 1257/2013] as to how far it contributes to the overall policy objectives of the European Green Deal and the Circular Economy Action Plan [see cepPolicyBrief 5/2020]. It is particularly keen to find out about the Regulation’s application to date and any deficiencies in its enforcement.
The submission period for opinions ends on 7 June 2023.
Go to Consultation |
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| | | | | Up to 14 April 2023
Brussels
The European Data Protection Board makes the final binding decision on the admissibility of Meta's (formerly Facebook's) data transfers to the US, in the consistency procedure under the GDPR. The Irish data protection supervisory authority, which is the lead competent authority, initiated an additional investigation ex officio in this regard, after the Schrems II ruling in 2020. A transfer ban could jeopardise the continued provision of services such as Facebook and Instagram in the EU. 17 - 20 April 2023
Strasbourg
Session of the European Parliament. This concerns, among other things, "Fit for 55" (see cepPolicyBrief 9/2022). 18 April 2023
Strasbourg Session of the European Parliament. This concerns, among other things, the final vote on the Regulation on Markets in Crypto-Assets (see cepInput No. 6/2021 and cepInput No. 7/2021). In addition, the plenary will take the final vote on the Regulation on information accompanying transfers of funds and transfers of certain crypto assets. 20 April 2023
Luxembourg The ECJ will deliver its judgement in case no. C-348/22, in which it has to decide, inter alia, on the validity of the Services Directive (Directive 2006/123/EC) and its direct effect. The purpose of the Services Directive is to facilitate the cross-border provision of services in the EU, inter alia by simplifying procedures.
20 - 21 April 2023
Stockholm Meeting of experts. This concerns fighting loneliness and strengthening mental health in the EU. 21 April 2023
Online
Stakeholders Webinar The Commission is collecting ideas from stakeholders in order to develop a comprehensive approach to mental health. 28 April 2023
Stockholm
Meeting of the Eurogroup. * 28 - 29. April 2023
Stockholm
Informal meeting of economic and financial affairs ministers. Topics include among other things the financing of Europes's future growth.
*The precise agenda was not available at the time of going to press |
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| | | | | | cepInput: Strategic Partnerships |
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| | | Rare earths, renewable energies, knowledge: In the global competition for secure supply chains, critical resources are increasingly coming into focus. The Centrum für Europäische Politik (cep) recommends that the European Union establishes strategic partnerships with resource-rich third countries. This is preferable compared to subsidy-based policies like the U.S. IRA, which distort global trade.
Go to cepInput 4/2023 |
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| | | | cepStudy: Ban on Comission in Financial Services Markets |
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| | | The Commission of the European Union assesses commission bans for financial products and intends to submit a proposal on 3 May. Supporters of the ban hope for higher transparency, better quality and lower costs. The cep considers inducement bans, e.g. those already in force in the Netherlands and Great Britain, as a break of the established business models and pleads for other solutions.
Go to cepStudy |
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| | | | cepAdhoc: More Competetiveness, Resilience and Sovereignty for the EU |
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| | | The EU is under pressure both geopolitically and in terms of its industrial policy, and is in danger of being left behind by the USA and China. Last week, therefore, the Commission presented three draft laws and a communication which aim to strengthen European sovereignty, competitiveness and resilience. The cep finds the proposals fragmented and overly bureaucratic.
Go to cepAdhoc 3/2023 |
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| | | | Study: Part 3: Regulatory and Financial Burdens of EU-legislation in four Member States |
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| | | European family businesses are groaning under bureaucratic burdens that leads to inefficiencies - first, by the requirements of the European Union itself and second, by the impractical implementation and operation on the national level. Moreover, different rules in individual member states complicate the process.
You can find the study on the Website of the Foundation for Family Businesses |
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| | | | cepPolicyBrief: Packaging and Packaging Waste |
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| | | With a new packaging regulation the Commission wants to strengthen environmental protection and market opportunities for recycled material. The cep sees great potential in an EU-wide circular economy. However, Brussels is only halfway there. Member states may continue to impair the single market with too many national regulations.
Go to cepPolicyBrief 3/2023 |
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| | | | | | The new international website "Common Ground of Europe" is an initiative of the Centres for European Policy Network (cep). On the commongroundeurope.eu website, cep collects mainly English-language contributions, articles and interviews from decision-makers and experts in politics, business and science. We cordially invite you to take a look through our window on Europe. Here are some examples from the past month. |
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| ChatGPT Requires Greater Digital Literacy
Generative AI language systems like ChatGPT are on everyone’s lips nowadays and have great economic potential. But the disruptive technology requires greater society-wide digital maturity as only informed usage will benefit consumers. Without a considered regulatory framework, there is a risk of political polarisation and social inequality.
Go to article |
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| | | Health Goes Europe
Research, policy making, personalised medicine, official statistics or regulatory activity: A common European Health Data Space (EHDS) offers a wide variety of opportunities. It will be a huge step towards a common digital health policy. But, nevertheless, there should be a way of protecting individual’s freedom of choice.
Go to article |
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| | | | | Dear Readers,
Salvador Dali once quipped that: "The problem with the youth of today is that one is no longer part of it." The younger generation has largely refuted the fears of its elders - with courage, ideas and a sense of responsibility. I am sure that together we will find the strength to make a new intergenerational contract. Time is pressing.
Yours
Dr. Jörg Köpke |
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