|
|
|
Dear Readers,
There is a rift running through Europe; a rift that divides more keenly than any language barriers, cultural differences or religious tensions. A new Iron Curtain has fallen, only this time invisible, without anti-tank barriers and self-propelled grenades - but no less explosive.
Europe is becoming increasingly divided between small islands of prosperity and vast swathes of economic, infrastructural and social wasteland. In Italy, the prosperous north scorns the economically isolated south. In France, the Île-de-France is thriving with Paris as its pulsating centre, while a so-called diagonale of those left behind stretches across the country. In Poland, a digital-savvy latte-macchiato-drinking elite is forming in the big cities in stark contrast to hopelessly backward rural areas. And all these neglected regions have the same things in common: no doctors, no schools, no buses, no internet.
More than 30 years after the fall of the Berlin Wall, Germany has still not overcome the imbalance between East and West. The big money is still being earned in the old federal states, while the land East of the Elbe at best serves as an extended workbench - which, by the way, is much the same situation as before reunification. The Federal Republic owes its economic miracle in part to its brothers and sisters in the former East Germany (GDR), who produced at ridiculously low prices for West German corporations and thus guaranteed fantastic returns as a result of cheap wages.
Now, it may be true that these differences have always existed but, combined with failures of democratic institutions and parties, they produce a toxic mix. And this is precisely what is driving more and more people to the radical fringes. It is not only economic frustration that increases the share of votes for ultra-nationalist, fascist or right-wing populist movements; it is also a combination of feeling abandoned and politically powerless, and the impression of not being heard.
The results of this failure of policy are frightening. In Germany’s eastern federal states, the far-right AfD is sprinting from one election success to the next. In Poland, the nationalist ruling party PiS is undermining individual freedoms and the separation of powers thanks to its loyal rural electorate. In France, the right-wing populist Marine Le Pen is preparing to become the next president. And Italy is already ruled by the fascist Giorgia Meloni.
If Europe does not succeed in overcoming this division, the future looks bleak. But the old continent has often shown itself capable of transformation when its back is against the wall. It would be worth it.
Stay tuned!
Yours
Dr. Jörg Köpke
|
|
|
|---|
|
|
|
|
|
Decaying infrastructure: Disconnected regions in Europe increase the danger of extreme margins.
|
|
|
|---|
|
|
|
|
|
Latest EU Proposals in Focus
|
|
|
|---|
|
|
|
|
|
GDPR: Selective Amendments to Improve Cross-border Enforcement
The extent to which disagreement among EU data protection authorities delays the enforcement of the General Data Protection Regulation (GDPR) was once again demonstrated by the decision of the Irish data protection supervisory authority in the Meta case in May. In order to ensure that the GDPR mechanism for cooperation and dispute resolution between authorities works more smoothly in the future, the Commission wants to harmonise certain aspects of the administrative procedure used by national data protection authorities in cross-border cases. It will now present its proposal, initially planned for the second quarter of 2023, in July. Among other things, the Commission wants to set deadlines for cooperation, clarify questions on the exchange of information and facilitate consensus building. This is not, however, intended to be a comprehensive reform of the GDPR.
Metaverse: Commission Calls for Openness and Interoperability
On 11 May, the Commission will present an initiative on so-called "virtual worlds" - often referred to as the metaverse. In the metaverse, people in the form of so-called avatars can interact with each other socially, culturally, politically and economically, in real time and with haptic perception. Although virtual worlds are still in the early stages of their technical development, they are already predicted to provide immense opportunities for growth, and huge potential, for example in the fields of medicine, manufacturing and smart cities. The Commission's initiative is not intended to lead directly to a new law, but aims instead to lay the foundations for trust, security, innovation and competition - and thus a sustainable metaverse ecosystem in the EU. Among other things, the Commission wants to facilitate access to finance for start-ups and SMEs, and in this regard promote the EU's cultural and creative sectors. In addition, the initiative is aiming to ensure that the EU adopts a global leadership role in the development and standardisation of the metaverse and prevents the emergence of gatekeepers.
|
|
|
|---|
|
|
|
|
|
|
|
|
Soil Health: Indicators and Requirements
On 5 July, as part of the "Food and Biodiversity” package, the Commission will propose, among other things, a "Soil Health Act", as announced in its EU Soil Strategy 2030 [COM(2021) 699]. Around 12.7% of soils in Europe are currently affected by moderate to high erosion. In addition, desertification is increasing throughout the EU. The Soil Health Act aims to establish soil health indicators and requirements for the sustainable use of soils.
EU Waste Framework Directive: Textiles and Food Waste
On 5 July, as part of the "Food and Biodiversity" package, the Commission will propose, among other things, a revision of the EU Waste Framework Directive [2008/98/EC; see cepStudy p. 19 ff.]. Most notably, the aim is to further reduce the amount of waste, including food, as well as increase the reuse of textiles and achieve high-quality recycling.
|
|
|
|---|
|
|
|
|
|
|
|
|
International Freight Transport: Rail, Road and Inland Waterways
On 11 July, the Commission will present its “Greening Transport Package”. This will include proposals to increase the proportion of rail traffic in international transport, amend the Directive on weights and measures for freight transport [96/53/EC; see cepPolicyBrief 32/2013] and make a new attempt to amend the Combined Transport Directive [92/106/EEC; see cepPolicyBrief 5/2018]. Following the Fit for 55 climate package to reduce carbon emissions arising from air, sea and road transport [see cepPolicyBrief 17/2022, cepPolicyBrief 6/2022], this is now intended to increase the efficiency of international freight transport by rail, road and inland waterways.
|
|
|
|---|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|---|
|
|
|
|
Trilogue Agreement on Digital Visa Procedures
On 13 June, the Council and the European Parliament reached a provisional agreement on rules to digitalise the visa procedure. The Commission had presented a proposal for full digitalisation of the EU Schengen visa system in April 2022, in order to make the application procedure more efficient and increase internal security [COM (2022) 658]. In future, under the agreement, applicants - with a few exceptions - will be able to apply and pay for their visa via an online platform, which will simplify the administrative procedure. In addition, the current visa sticker will be replaced by a digital visa, which should reduce the risk of forgery and theft. Given the current challenges in the areas of migration and security, and the backlog in processing applications due to the COVID 19 pandemic, the digitalisation of EU visa policy promises significant efficiency gains for citizens and businesses.
|
|
|
|---|
|
|
|
|
|
|
Trilogue Agreement on Asbestos Regulations for Better Protection of Workers
On 27 June, a political agreement was reached on new asbestos regulations. Asbestos is a highly dangerous and carcinogenic substance that has been banned since 2005 but can still be found in previously constructed buildings. Asbestos poses a particular risk to workers exposed to this substance due to renovation work. Among other things, the new regulations provide for a lower maximum asbestos level to which workers may be exposed and a new method, called electron microscopy, for measuring asbestos. Furthermore, employers are to make efforts to identify in advance materials in which asbestos might be present.
|
|
|
|---|
|
|
|
|
|
Financial Markets |Consumer
|
|
|
|---|
|
|
Financial Services: New Consumer Protection Requirements for Distance Selling
On 6 June 2023, the Council and the European Parliament provisionally agreed on a revision of the Directive on financial services contracts concluded at a distance. The Commission initiated a review of the Directive in May 2022 [COM(2022) 204, see cepPolicyBrief 12/2022]. The background to this is the observation that distance selling of financial services has changed markedly in recent years and is increasingly taking place online. Most notably, the agreement means that there will now be new requirements for the protection of consumers. In future, consumers will have the right to require human intervention if "online tools" - e.g. chatbots, robo-advice - are used in the purchase of a financial service. Consumers will also be better protected against misleading user interfaces ("dark pattern"). And, in addition, providers of financial services, as well as providers of other consumer contracts concluded at a distance, will be obliged to include a "withdrawal function" on their user interfaces, for example in the form of a withdrawal button. The agreement must now be formally adopted by the Council and the European Parliament before the new Directive can enter into force and replace the earlier Distance Selling Directive.
|
|
|
|---|
|
|
|
|
|
|
Anti-money Laundering: Law Enforcement Authorities Gain Access to Bank Statements
On 6 June 2023, the Council and the European Parliament reached a provisional agreement on access to financial information by national authorities. Under a new Directive to revise the Money Laundering Directive, currently being negotiated at EU level [COM(2021) 429], Member States will have to provide access to information in central bank account registers via a European Single Access Point (ESAP) for company data. The technical infrastructure for the ESAP will be provided by the European Securities and Markets Authority (ESMA) by the end of 2024. According to the Directive, only financial intelligence units (FIUs) in the Member States can access information on suspicious financial activities via the ESAP. In order to speed up and facilitate access to financial information by law enforcement authorities, the Council and Parliament have now agreed to give law enforcement authorities the same access to such data. The simplified access aims to help financial investigations to detect illicit money flows more quickly and seize and confiscate the proceeds of crime more swiftly.
Basel III: Banking Reforms Nearing Completion
In the early hours of June 27, 2023, the Council and the European Parliament (EP) tentatively agreed on a revision of the Capital Requirements Regulation [(EU) No. 575/2013] and the Capital Requirements Directive [2013/36/EU]. The revision of the two legal acts brings to a conclusion the EU's effort to implement the international Basel III agreements. A so-called "output floor" rule is intended to limit the variability of capital levels calculated by banks using internal models. Furthermore, the negotiators agreed on new rules for dealing with credit, market and operational risks. There will also be new minimum requirements for branches of third-country banks, as well as new rules on how banks should deal with environmental, social and governance (ESG) risks. In addition, the Council and EP agreed to strengthen the independence of banking supervisors and to create a temporary prudential regime for crypto assets. The preliminary trialogue agreement must now be formally adopted by the Council and the EP before the new rules can enter into force.
Central Securities Depositories: Agreement on New Rules on Securities Settlement and Delivery
On June 27, 2023, the Council and the European Parliament (EP) provisionally agreed on a revision of the Regulation on improving securities settlement in the EU and on central securities depositories (CSDs) [(EU) No. 909/2014, see cepPolicyBrief 45/2012]. CSDs are entities that, as core services, operate securities settlement systems, maintain central securities accounts and perform initial recording of securities in a book-entry system. The revision is intended to make it easier for CSDs to offer their services across borders within the EU. To this end, the existing passporting rules are to be simplified. The supervision of CSDs is also to be improved through better cooperation between the relevant authorities. In addition, new provisions have been agreed to ensure that securities are actually settled at the scheduled time, thereby improving settlement efficiency. This includes, for example, the imposition of fines if the parties to a securities transaction fail to deliver or pay for the security on time. The preliminary agreement still needs to be officially adopted by the Council and the EP before the new Regulation can enter into force.
MiFID/MiFIR: EU Strengthens Market Transparency and Bans "Payment for Order Flow" Practice
On June 29, 2023, the Council and the European Parliament (EP) provisionally agreed on a revision of the Markets in Financial Instruments Directive [MiFID, 2014/65/EU] and the Markets in Financial Instruments Regulation [MiFIR, (EU) No. 600/2014]. The EU Commission had already initiated the revision of the two legal acts in November 2021 [COM(2021) 726 and COM(2021) 727]. At the heart of the agreement is the increase in transparency of trading data. As this data has so far been scattered among stock exchanges and investment banks, making it difficult for investors to access and compare it, so-called "consolidated tapes" are to be created. These are to bundle information on the prices and volumes of financial instruments from numerous execution venues. Furthermore, in order to avoid conflicts of interest, the practice of brokers forwarding their clients' orders to certain trading venues in return for payment of a fee ("payment for order flow, PFOF") is to be prohibited. This practice has been widely used by some neobrokers - e.g. Trade Republic. The ban is to apply from the end of June 2026. In addition, the revisions will adjust some rules on transparency for non-equity instruments - e.g., bonds and derivatives - and provisions for dealing with commodity derivatives. The preliminary agreement still needs to be formally adopted by the Council and the EP before the revised MiFID and MIFIR legal acts can enter into force.
|
|
|
|---|
|
|
|
|
|
Financial Markets |Digital Economy
|
|
|
|---|
|
|
Data Act: EU Creates Legal Framework for Increased Exchange of Data
On June 27, 2023, the Council and the European Parliament (EP) provisionally agreed on a Data Act. The EU Commission had already presented the Data Act in February 2022 [COM(2022) 68, see cepPolicyBrief 11/2022]. Among other things, the Data Act is intended to establish a uniform, cross-sector framework for data access and use. In particular, it aims to improve access to data generated by the use of connected products - for example, a smart household appliance or a smart industrial machine. Furthermore, basic rules are to be established for the fulfillment of legal data provision obligations and companies are to be protected from abusive contractual clauses. In addition, public authorities are to be given easier access to company data in exceptional circumstances. This applies in particular to public emergencies - e.g. floods or certain tasks in the public interest. And last but not least, the Data Act establishes additional obligations for cloud computing providers to make it easier for their customers to switch to other providers. The preliminary agreement still needs to be officially adopted by the Council and the EP before the new Regulation can enter into force.
Trilogue Agreement on EUid Regulation
On June 29, a preliminary political agreement on the EUid Regulation [COM(2021) 281; cepPolicyBrief 25/2021] was reached. It is intended to give citizens the possibility to digitally - e.g. by means of a smartphone app - their identity or credentials and certificates such as a driver's licence or a university degree. The so-called digital wallets needed for this are to be introduced by the Member States to introduce the so-called digital wallets. Their authorities and selected private actors, e.g. in regulated sectors such as banks, are to be obliged to in these digital wallets.
|
|
|
|---|
|
|
|
|
|
|
|
|
Justice: EU to Strengthen Digitization and Enhance Cross-border Cooperation
On June 28, 2023, the Council and the European Parliament (EP) tentatively agreed on a new Regulation on the digitization of judicial cooperation and access to justice in cross-border civil, commercial and criminal matters and a Directive on the digitization of judicial cooperation. The Commission had presented the proposal for the Regulation [COM(2021) 759] and the Directive [COM(2021) 760] in December 2021. A key element of the agreement is the establishment of a European electronic access point point through which citizens and businesses can exchange information on civil, commercial and criminal matters with the competent authorities, but also among the authorities themselves. Citizens and companies should also be able to file claims via the access point. The aim is to make the European EU judicial systems more digital, more accessible to citizens and companies, and to simplify cross-border court proceedings. The agreement must now be formally adopted before it can enter into force.
|
|
|
|---|
|
|
|
|
|
|
|
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:
|
|
|
|---|
|
|
|
|
Carbon Border Adjustment Mechanism (CBAM): Implementing Regulation
The Commission is seeking feedback on its draft CBAM Implementing Regulation to govern the transition period from 1 October 2023 to 31 December 2025: EU importers of goods subject to the CBAM will initially only have to report on their carbon emissions, they will not yet have to pay a carbon offset. The draft contains details on reporting obligations as well as specifications for the method of calculating the carbon emissions released during the manufacturing process of CBAM goods.
The submission period for opinions ends on 11 July 2023.
Go to Consultation
Climate Neutrality: Carbon Capture, Storage and Utilisation in Industry
The EU wants to reduce greenhouse gas (GHG) emissions to net zero by 2050 ("climate neutrality"). In certain industries where it is difficult to reduce GHG emissions, the goal of climate neutrality will also be achieved through carbon capture and storage ("CCS") and carbon capture and utilisation ("CCU"). The Commission is using the Consultation to obtain feedback on how CCS and CCU technologies can best contribute to achieving climate neutrality.
The submission period for opinions ends on 31 August 2023.
Go to Consultation
|
|
|
|---|
|
|
|
|
|
|
Electrical and Electronic Equipment: Examination of WEEE Rules
The WEEE Directive [2012/19/EC, see cepPolicyBrief] aims to prevent or reduce the harmful effects of waste from electrical and electronic equipment (WEEE) on the environment and human health. The Commission is using the Consultation to gather evidence on how well the WEEE Directive contributes to achieving other EU goals, such as those of the "European Green Deal". For example, the Commission wants to examine to what extent the WEEE Directive is suitable for intensifying the recycling of critical raw materials found in waste from electrical and electronic equipment.
The submission period for opinions ends on 22 September 2023.
Go to Consultation
|
|
|
|---|
|
|
|
|
|
|
Sustainability Reporting: First Drafts of EU Standards
The new Directive (EU) 2022/2464 on corporate sustainability reporting (Corporate Sustainability Reporting Directive, CSRD, cf. cepPolicyBrief 21/2021 and cepAdhoc 2/2023) has now been in force since 5 January 2023. It obliges most notably large companies and listed small and medium-sized enterprises (SMEs) to include sustainability-related information in their management reports. The CSRD stipulates that the Commission, taking account of preparatory work by the European Financial Reporting Advisory Group (EFRAG), must adopt several delegated acts to specify the content and structure of sustainability reporting. The Commission is to adopt a first set of non-sectoral reporting standards by 30 June 2023. They will apply to all companies that fall within the scope of the CSRD, regardless of the sectors in which the respective companies operate. On 9 June 2023, the Commission launched a Consultation on a first set of reporting standards which contains two cross-cutting standards and a total of ten standards on environmental, social and governance aspects. The Commission now wants feedback from stakeholders on these reporting standards.
The submission period for opinions ends on 7 July 2023.
Go to Consultation
ESG Ratings: New Legal Framework Submitted
On 13 June 2023, the Commission submitted a proposal for a Regulation to strengthen the transparency and integrity of environmental, social and governance (ESG) ratings [COM(2023) 314]. Such ratings are used to form opinions about a company's or an entity's exposure to environmental, social and/or governance related factors and their impact on society. Under the proposal, providers of such ESG ratings will in future have to undergo an authorisation process with the European Securities and Markets Authority (ESMA). Furthermore, they will not be allowed either to provide advisory services or prepare credit ratings for investors and companies at the same time as preparing an ESG rating for them. In addition, the analysts and staff of such providers must have the necessary expertise to issue ESG ratings. And, importantly, providers must inform the public and their clients about the methods and models they use to produce the ratings. Following submission of the Proposal, stakeholders can now comment on the Regulation and, in parallel, the European Parliament and the Council will also have their say. First, they each have to finalise their positions on the proposed Regulation before the trilogue negotiations can begin.
The submission period for opinions ends on 20 August 2023.
Go to Consultation
Digital Euro: Commission Sets Guardrails for the ECB
On June 28, 2023, the Commission presented a legal framework for the establishment of the digital euro. This consists of a proposal for a Regulation on the establishment of the digital euro [COM(2023) 369], a proposal for a Regulation on the provision of digital euro services by payment service providers located in Member States whose currency is not the euro [COM(2023) 368] and a proposal for a Regulation on the status of cash as legal tender [COM(2023) 364]. The Commission is thus setting some guard rails for the European Central Bank (ECB). The ECB is currently considering the introduction of the digital euro in 2026, which the Commission wants to establish as legal tender. Up to now, only banknotes and coins have been considered as such. Apart from a few exceptions for micro-enterprises and natural persons, all economic actors are to be obliged to accept it. The digital euro is to be issued by the ECB, but then distributed by banks and other payment service providers. It is not intended to replace cash as the traditional central bank money, but only to supplement it. For financial stability reasons, the ECB is to ensure that each user may only hold a limited amount of digital euros. It is not to be used as a store of value, but primarily for payment purposes. Basic services related to the digital euro are to be free of charge for natural persons. For privacy reasons, payments are also to be made possible offline. Now that the proposals have been published, stakeholders can comment on the draft Regulations.
The submission period for opinions ends on 28 August 2023.
Go to Consultation on the Regulation on a framework for access to financial data (FDAR), on the Regulation on payment services in the internal market (PSR I) here and on the Directive on payment services and e-money services in the internal market (PSD III) here.
Open Finance: EU Commission Wants to Facilitate Access to Financial Data
On June 28, 2023, the EU Commission presented a legal framework on the European payment markets. This consists of a proposal for a Regulation on a framework for Financial Data Access [COM(2023) 360], a proposal for a regulation on payment services in the internal market [COM(2023) 367], and a proposal for a directive on payment services and e-money services [PSD III, COM(2023) 366] to replace the existing 2nd Payment Services Directive (PSD II) and the E-money Directive (EMD). Part of the package are measures to combat and curb payment fraud, such as allowing payment service providers to exchange information on payment fraud. Furthermore, consumer rights are to be strengthened, for example by means of stricter transparency requirements regarding fees for cash withdrawals. In addition, payment service providers are to be given the right to open a bank account if they are not banks. This is intended to promote competition between banks and non-banks. As a further step, the Commission wants to enable retailers to hand out cash to consumers even if they do not make any purchases there. This is intended to ensure that consumers will continue to be able to obtain cash easily in the future. In addition, customers of financial institutions are to be given easier access to their financial data in the future and given the opportunity to pass it on to third parties. Now that the proposals have been presented, stakeholders can comment on the draft regulations.
The submission period for opinions ends on 28 August 2023.
Go to Consultation on the Regulation on the legal tender of euro banknotes and coins here and on the Regulation on the establishment of the digital euro here.
|
|
|
|---|
|
|
|
|
|
|
4 July 2023
Luxembourg
The European Court of Justice (CJEU) will deliver its judgement in Case C-252/21 (Meta Platforms). This relates to a decision by the Federal Cartel Office to restrict Meta from linking user data from various services such as Instagram and WhatsApp with Facebook accounts. In particular, the CJEU has to decide whether national competition authorities can review compliance with the GDPR.
10 July 2023
Brussels
Meeting of the General Affairs Council.
10-13 July 2023
Strasbourg
Session of the European Parliament. This will consider, among other things, EMA fees and the Chips Act.
13 July 2023
Brussels
Meeting of the Eurogroup.
14 July 2023
Brussels
Meeting of the Economic and Financial Affairs Council (Ecofin).
24-25 July 2023
Bilbao
Informal meeting of competitiveness ministers (Internal market and industry).
27-28 July 2023
Las Palmas de Gran Canaria
Informal meeting of health ministers.*
*The agenda was not yet available at the time of going to press.
|
|
|
|---|
|
|
|
|
|
|
|
cepStudy: Regulatory and Financial Burdens of EU Legislation in Four Member States - a Comparative Study Part 4
|
|
|
|---|
|
|
|
|
German family businesses are suffering as a result of the consequences of the General Data Protection Regulation (GDPR). It creates unnecessary costs and confusion because the same rules do not apply everywhere in the EU. This is the conclusion of an empirical study conducted by the Centres for European Policy Network (cep) and Prognos AG on behalf of the Stiftung Familienunternehmen.
Go to cepStudy
|
|
|
|---|
|
|
|
|
|
cepPolicyBrief: Critical Raw Materials
|
|
|
|---|
|
|
|
|
Cobalt, lithium, rare earths: Europe wants to reduce its dependence on supplier countries like China for its critical raw materials. The Centrum für Europäische Politik (cep) praises the Commission for wanting to improve security of supply. However, its current proposal is too bureaucratic and anti-business.
Go to cepPolicyBrief
|
|
|
|---|
|
|
|
|
|
cepPolicyBrief: Prospectus and Market Abuse Rules
|
|
|
|---|
|
|
|
|
The Commission wants to give small and medium-sized enterprises (SMEs) better access to capital markets by cutting red tape. The Centrum für Europäische Politik (cep) views the proposal on the so-called Listing Act as largely positive.
Go to cepPolicyBrief
|
|
|
|---|
|
|
|
|
|
|
|
Dear Readers,
Charles Darwin once said: "Nothing in the history of life is more constant than change." Let us hope that Europe will change for the good.
Yours Dr. Jörg Köpke
|
|
|
|---|
|
|
|
|
Recommend our newsletter to others or sign up!
|
|
|
|
|
|---|
|
|
|
|
|
|
|
|
