European Union

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The Informal Economic and Financial Affairs Council takes place on 22 and 23 April in Amsterdam.

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Eurozone Ministers meet on 22 April 2016, in Amsterdam, to discuss the next steps and the timeline for the completion of the first review of Greece's economic adjustment programme, following a presentation on the state of play by the institutions.

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“Digitising industry” should be more than wishful thinking and a catch phrase for eurocrats as “Europe’s pride” – traditional manufacturing and production methods have not proved immune to digital transformation; and this is for the best. Over the past year, private sector executives and decision makers from Davos to Washington D.C. have been using their brain power and time to discuss the impact of new technologies for the development of products and the future of the manufacturing sector at global level.

With the EU focusing on growth and jobs in order to maintain its competitiveness, Commission officials are no strangers to the concept of the digitisation of the European Industry. This new space, nonetheless, holds both challenges and opportunities; this is where the “Digitising European Industry Package” comes in.

In case you missed it, the Package, which was published on 19 April, is made up of four non-legislative communications and three accompanying staff working documents covering issues such as Cloud Computing, standardization, internet of things, and funding.

Making Europe strong again

In line with the Commission’s priorities and the pressure from global competitors two trends run through the documents. Firstly, the Commission identifies ‘areas where progress is to be made’ in European digital services and explains that urgent EU-level support is needed to ‘coordinate national and regional initiatives to digitise industry’. Interestingly as well, while European technology companies are trying to take over the world, there is an underlying protectionist sentiment in the texts. The Commission refers to a need to ‘open the door for new competitors’ in some data and web platforms as European businesses are concerned about being locked in with a ‘few suppliers or platform owners. An earlier draft of the package went even further, saying that European digital services had ‘major weaknesses compared to major competitors in the US’ which is why EU-level support is needed for Europe to ‘stay in and win the digital industrial race’.’

Is there space for engagement?

As with every Commission non-legislative proposal, there is an opportunity for the manufacturing sector to engage on some issues that will have a long term strategic and business impact.

Development of common standards and interoperable solutions: This is one of the Commission’s priorities and will be key for the development of the Internet of Things (IoT). New standards will cover areas such as 5G, Cloud Computing, IoT, Data technologies, and Cybersecurity; harmonised standardisation will complement internal market mechanisms and could enable European manufacturers to make their products more competitive. eHealth, smart energy, intelligent transport systems and connected and automated vehicles, including trains, advanced manufacturing, smart homes and cities, and smart farming could be some of the sectors that will benefit in the short to medium term. However, the Commission also acknowledges that standards should continue to be industry-led, voluntary and consensus-driven. This leaves space for prompt engagement, both at EU and national level.

Data protection – The Commission will propose a legislative initiative in 2016 to remove or prevent unjustified localisation requirements introduced by national legislation. Data ownership, access and re-use rules, particularly in relation to data generated by sensors and other collecting devices will be at the centre of the proposal. These are elements that are key for producers of smart devices, especially in the energy sector.  The Commission also highlights possible obstacles to data flow, such as uncertainty regarding the distinction between personal and non-personal data and obstacles regarding data interoperability and reliability.

 Promoting innovation – The Commission acknowledges that innovation will drive growth. For this reason it encourages new innovative research services, such as data mining, and breakthroughs in supercomputing and secure networking through the European Open Science Cloud and the use of quantum technologies. Alongside the European Data Infrastructure, the Commission believes this will contribute to the digitalisation of industry. With the manufacturing sector driving European excellence, smart cities, smart living environments, driverless cars, wearables, and mobile health will be some of the sectors that are expected to grow thanks to digitisation. Dedicated zones will be set up across Europe to test new technologies, free from some of the regulatory burdens that these sectors face when scaling up projects. As for those complaining about the lack of financial resources, the Communication mentions a number of areas where the Commission will invest Horizon 2020 funds. For example, these include €500 million focused on digital innovation hubs. This will give a boost to companies, mainly SMEs operating in these technology spheres.

Is more coming up?

Digitising the European Industry will be the gift that keeps on giving for the next few months. The next peak in activity will take place at the end of the year when the Commission will publish its initiative on the ‘free flow of data’ which could impact companies using private or public data. The Commission also makes sure that industry stakeholders stay on the bench as observers. The time to start thinking about cybersecurity implications for your firm is now, as the deadline for industry stakeholders to draw up ‘practical guidelines’ on cybersecurity in ICT standards has been set for the end of the year.

The new industrial revolution is happening now and the Commission is aiming to have the manufacturing sector at its side in order to improve the environment in which “traditional” European companies operate. Smart value chains will be at the heart of this revolution, embracing a much higher level of both automation and digitisation. While cybersecurity and data protection concerns could leave executives skeptical on the added value for the industry, the future of European manufacturing is fortunately at the mercy of tech geeks. So better start to talking to DG CONNECT in order to harness the opportunities digitisation brings along.

Ilektra Tsakalidou, Catherine Armitage, with the help of Crispin Maenpaa

Image by Malte Helligsøe

Saturday 23 April 2016
Visit to Gaziantep (Turkey) together with Federal Chancellor of Germany Angela Merkel and EU Commission First Vice-President Frans Timmermans.
17.40 Visit to Nizip temporary protection centre
19.15 Visit to Gazientep Child protection support centre
20.50 Joint press conference by President Tusk, Chancellor Merkel, First Vice President Timmermans and Prime Minister Davutoğlu
21.50 Leaders' meeting

Tuesday 26 April 2016
13.00 Meeting with European Commission President Jean-Claude Juncker and European Parliament President Martin Schulz (Berlaymont)

Wednesday 27 April 2016
11.30 Meeting with President of Albania Bujar Nishani (photo opportunity - press statements ±12.00)

AMENDMENTS 71 - 372 - Draft opinion on the proposal for a regulation on the European border and coast guard
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

Good afternoon. Welcome everyone, welcome to Amsterdam. Let me debrief you on the Eurogroup meeting. Many of us were already in Washington at the IMF spring meetings, discussing the state of play in the global economy, rising risks on the basis of the advice and analysis of the IMF. The good news, however, for major economies, this also goes for the Eurozone economy, is that our economies have weathered global events quite well. I believe we are still on the right track with economic growth that is broad-based, stronger supervision of banks and signs that investment is starting to pick up throughout the Eurozone.

Greece

Having said that, and on that positive note, let's first turn to Greece, which took up a major part of our time today. We discussed the state of play of the first review of the ESM programme and next steps to be taken.

Cooperation between the institutions and the Greek authorities has been strong and productive, but the institutions will say more about that. We believe that substantial progress has been made, reducing the number of open issues, and getting close to an agreement on a number of key areas such as pension reform, income tax reform, the NPL strategy and the establishment of the privatisation fund. On some issues more work will have to be done to fully conclude that, but we are very close.

Today we also looked at and clarified the way to go forward to bridge the issue which is about insecurity of a forecast and confidence that we can have in the implementation of what has been agreed.

We came to the conclusion that the policy package should include a contingent package of additional measures that would be implemented only if necessary to reach the primary surplus target for 2018. The contingency mechanism needs to be credible, legislated upfront, automatic and be based on objective factors which would trigger these contingent measures.

That needs further work: the design of that, how it would work, what kind of measures there would be and what would trigger it. I'm happy to say that with the commitment of the Greek minister to work on that constructively and as quickly as possible, the institutions have said that they stand ready to work as quickly as possible, in the coming days, on this contingency mechanism. On that basis, if we have the package which needs to be done and delivered upfront, and if we have the contingency package and the mechanism to support that, we can have a further Eurogroup next Thursday. This is not for sure yet, but we are aiming for a meeting next Thursday which would then come to positive conclusions on those two elements, on the upfront package and the contingency package, and have a serious discussion on debt sustainability. As you know we have a long standing promise which was reaffirmed during the summer agreement, that if necessary and on condition that the Greek government fully delivers on what has been agreed in the programme, if necessary, we stand ready to consider more measures to assure debt sustainability.

Ministers today have given us a mandate to work on that, to make the analysis, and to prepare possibilities within, of course, some limitations. To mention two main ones: there is no support in the Eurogroup for nominal haircuts on the debt, and what we will design and propose needs to stay within the agreement of last summer. So we will look at possibilities of re-profiling and if necessary possible additional measures, looking at maturities and grace periods as outlined in the agreement last summer. And hopefully we will meet again next Thursday to bring those elements all together and come to a political agreement which would be very important for Greece and for the Eurozone.

Insolvency frameworks

Secondly, let me go on in our agenda. Second item was work we are doing on insolvency frameworks. This is very important for strengthening our economies, dealing with our banks, and opening space for new investments throughout the Eurozone. It is of course also an issue for the EU 28, so the follow up that we will give on the issue will also be on the agenda in Ecofin for some months. We have asked the Commission to do further work on that, to improve the quality of the data that we have and to develop an approach aimed at improving the effectiveness of national frameworks, trying to reach convergence at a higher level, in speed, affordability and predictability of insolvency procedures.

So on work that has been done so far, the Commission will do more on improving the quality of data, and developing a method of benchmarking on insolvency frameworks.

SSM

Finally, on the SSM. We welcomed Danièle Nouy, the chair of the Single Supervisory Mechanism to the Eurogroup. She regularly joins the Eurogroup to present to us the state of play in the SSM. Today she presented the annual report. She informed us about the execution of the supervisory tasks of the SSM. She spoke specifically on the many options and national discretions that are still in our banks and in our bank legislation and regulations. She is making a lot of progress from the SSM. Work also needs to be done by legislators. The Commission will work on that and put forward proposals to improve our level playing field for our banking union.

Those were the key issues.

The Eurogroup is fully committed to supporting economic growth and jobs and holds regular thematic discussions to explore and define common policy ambitions to this end. The Council recommendation on the economic policy of the euro area in the context of the European Semester clearly indicates the areas where reform is the most pressing.

Since the beginning of the year, we have discussed twice the recommendation to improve national insolvency frameworks, an area explicitly addressed in the Council recommendation to the euro area for 2015 and 2016 as well as in the individual 2015 Country-Specific Recommendations for several euro area Member States.

Private sector debt remains high in a number of euro area countries and contributes to holding back the recovery in investment and consumption. In particular, the high level of non-performing loans in banks' balance sheets constrains the supply of credit, thereby hampering the monetary transmission mechanism, and reduces the efficiency of capital allocation. Having effective and efficient insolvency frameworks in place is key to ensuring a smooth deleveraging process, thereby facilitating adjustment processes within the euro area, while improving the business environment and supporting private investment. It would also support deeper financial integration within the euro area, which will be beneficial for the strengthening of the Banking Union, fostering growth and resilience to asymmetric shocks. It would also contribute to building the Capital Markets Union, recognising that this work takes place in the EU-28 setting.

While a number of euro area Member States have carried out significant reforms in the recent past, the Eurogroup is conscious that more efforts are needed. Today we agreed on a number of core common principles that could serve as guidance for improving the efficiency of national regimes in dealing with insolvency. While we aim to converge to a high level of efficiency and transparency of national insolvency rules and practices within the euro area, we recognise that when applying these common principles, country-specific circumstances - in particular national legal frameworks - need to be taken into account.

Speed, cost and predictability are of the essence for efficient national insolvency regimes, together with clear rules on cross-border insolvency. In order to promote speedy and cost-effective insolvency procedures, debt distress should be identified at an early stage. Early restructuring procedures with limited court involvement - in particular out-of-court settlement - should be developed further as a priority and resorted to where appropriate. Insolvency procedures should be easily accessible and affordable for both debtors and creditors. Honest distressed debtors should also be given a second chance after a certain period of time. Moreover, insolvency frameworks should be governed by predictability. In particular, creditor claims in secured lending should be enforced in an effective manner. Finally, clear rules on cross-border insolvency are of paramount importance in order to encourage cross-border investment. At EU level a Regulation and a Recommendation are in place and a legislative proposal is being developed by the end of 2016.

The Eurogroup also discussed the need for adequate flanking policies. In particular, enhancing the institutional framework for insolvency was recognised as critical to ensure an effective implementation of the insolvency legislation. Supervisory measures can contribute to support an accelerated process of banks' balance sheet clean up.

The Eurogroup intends to regularly take stock of the progress made by euro area Member States in reforming their insolvency regimes in line with these common principles and in coherence with parallel work streams led by EU institutions in the framework of the Commission's Action Plan on building a Capital Markets Union. We underlined the importance of benchmarking our common ambitions. We support the Commission's work to improve data availability and quality and we mandate the EWG to engage with this work as a matter of priority. We agreed to revert to the matter in autumn of this year.

This is Friday’s edition of our daily Brussels Briefing. To receive it every morning in your email in-box, sign up here.

Barack Obama arrived last night in the British capital, where he is expected to give his full-throated support for the UK to remain in the EU – an intervention that is as highly anticipated as it is fraught with political danger. There is no set-piece speech the White House has engineered; instead, the US president has offered up an op-ed in today’s Daily Telegraph, and administration officials say he will speak “as a friend” if he is asked about the issue during his two-day stay. Which is something of a foregone conclusion, particularly with a Downing Street press conference set for this afternoon.

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Ireland v Commission
State aid
The General Court confirms the decision of the Commission ordering the repayment of the tax exemptions granted by France, Ireland and Italy for alumina production

Ireland v Commission
State aid
The General Court confirms the decision of the Commission ordering the repayment of the tax exemptions granted by France, Ireland and Italy for alumina production

Ireland v Commission
State aid
The General Court confirms the decision of the Commission ordering the repayment of the tax exemptions granted by France, Ireland and Italy for alumina production

Wolfgang Schäuble’s destiny is to be a man who keeps having to listen to people talking about things he doesn’t want to hear about.

Germany’s finance minister, together with his counterparts from around Europe, will gather in Amsterdam on Friday to discuss, among other things, the future of the Banking Union — the major policy push undertaken by the euro area over the last few years to centralIze how it oversees its banks.

But like a band with growing musical differences, ministers can’t agree on what the next steps of the project should be, with Mr Schäuble playing the role of the blues purist who wants the group to move away from grand concepts and get back to basics.

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Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP

Source : © European Union, 2016 - EP