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It wasn’t so much what she said, it was how she said it. On Monday, Margrethe Vestager, the European Commission’s feared competition chief, announced her latest in a series of cases cracking down on sweetheart tax deals offered to multinationals by ordering Belgium to claw back €700m in illegal tax breaks to at least 35 companies.

The decision itself had been flagged up a month ago by Belgium’s finance minister, Johan Van Overtveldt, so it wasn’t really a surprise. But in announcing the decision, Ms Vestager went out of her way to highlight a common trait of those able to avoid taxes through the Belgian scheme (about €500m of the €700m). “Most of the companies benefiting are European; it is also European companies that avoided the majority of the taxes under the scheme, which they now have to pay,” she said at a midday news conference.

The statement stood out because it comes after American officials have privately raised concerns over the fact that three of the four initial cases in her corporate tax crackdown targeted US companies: Apple, Amazon and Starbucks. Last month, she expanded the list to include McDonald’s. The private grumbling became public in September when Robert Stack, the US Treasury’s man in charge of international tax policy, broke cover to complain about how the investigation would affect American corporate tax revenues, and Ms Vestager acknowledged that she had flagged up European companies in the Belgian scheme to emphasise her services’ impartiality.

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The revelations that Volkswagen was rigging emissions tests have left a trail of destruction in their wake: a once proud European champion has seen its reputation dragged through the mud, millions of owners of “clean diesel” cars have found out they were hoodwinked and – most importantly for Brussels – the EU’s current system for policing auto manufacturers has been exposed as deeply flawed.

EU officials and politicians now regularly lament that it was the US’s powerful Environmental Protection Agency, rather than any European authority, that revealed the company’s use of illegal defeat devices to cheat in emissions tests – even though the practice was going on right under everyone’s noses on both sides of the Atlantic.

Although most of the power to test and certify vehicles falls to national regulators, the European Commission has come in for its share of the blame in failing to better enforce rules in this area. As we reported last week, it is preparing plans for overhauling the EU’s moribund car approval system. But will they go far enough?

A draft of the measures, obtained by Brussels Blog and posted here, makes it clear that the commission views the VW scandal as a game changer. Prior to the revelations, the commission was planning a limited overhaul of EU requirements; much more far reaching options are now on the table.

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For Brits with an interest in public policy and the UK’s place in the world, 2016 will inevitably be overshadowed by the forthcoming referendum on the UK’s membership of the EU. Whilst the political debate in the UK is currently dominated by issues of migration and benefits, it’s worth taking a step back and considering the potential impact of a ‘Brexit’ in specific industry and policy areas, beyond the wider issue of the UK’s access to the single European market.

EU and UK energy and climate policy are currently locked together

Energy and climate policy in particular poses some interesting questions in the case of a Brexit. Not least because of the domestic climate legislation that binds the UK to a similar emissions reductions trajectory to the EU, and the gas and electricity interconnectors that physically connect the UK to the EU single energy market. Considering the broad swathe of energy and climate policy that binds the UK to the EU, it is far from clear in the case of a Brexit which of these policies, or parts thereof, the UK would not continue to be heavily involved in.

Climate policy – domestic policy first and foremost?

Looking at climate policy, the real changes that leaving the EU would mean for the UK seem fairly limited. As noted above, the UK’s own Climate Change Act means that British governments are bound domestically to cut emissions in at least a similar trajectory to the EU’s 2020 and 2030 GHG targets. Even in the case of a Brexit, it’s difficult to see how the UK would not wish to utilise an emissions trading system (ETS) – whether it’s the EU ETS, or a separate UK system that would likely be linked to the EU one. Putting aside the impact on hard policy, there is of course the question of influence. A UK outside of the EU would conceivably have lower levels of influence on wider international climate negotiations.

Energy policy – an area that seems obvious for cross-border co-operation

Concerning energy policy, it is difficult to find areas where post-Brexit, the UK would not want to co-operate with its neighbours. Take the example of Gas security of supply. Following the 2009 gas crisis, the EU constructed a set of rules to govern emergency situations, by ensuring that countries work with their neighbours to develop emergency and preventative action plans. Presumably, this is an area that a British government outside of the EU would still wish to engage in with its neighbours in Ireland, Belgium, France and the Netherlands. Of course they could try to do so outside of the EU framework, but the plans they would seek to agree with their neighbours would still be constructed under the EU mechanisms, so in all likelihood – for ease of implementation – so would the UK’s.

The internal energy market

Perhaps the major issue of course is the internal energy market where the UK has been instrumental in pushing for an increasingly liberalised energy market, greater competition and cross-border trading. An increasing proportion of the UK’s electricity capacity will be reliant on the electricity interconnectors going under the Channel and North Sea. These interconnectors will at least partially be controlled by the EU’s Third Internal market package where they are located in an EU member state, and are likely to have an increasingly important contribution to the UK’s overall capacity and security of supply. Even if the UK left the EU completely (the WTO-only option), something like 10% of our overall electricity capacity by 2020 would effectively be under the control of EU market rules. In the short-term there might be a limited impact – the interconnectors and the market would continue to function – but over a longer-period, there would be nothing to prevent a divergence of policy between the UK and the EU, potentially impacting on the functioning and the commercial viability of the interconnectors. In this scenario, a UK outside of the EU would have no control over the outcome of such policy developments.

Bearing in mind the influence of the UK in developing the single energy market so far (plus the influence of actors such as Ofgem and National Grid at an EU-level), a future EU energy market without the UK could look very different to the one developing now. As Amber Rudd, the UK’s Secretary of State for energy and climate change noted in early January on the issue of Brexit and the possibility of the UK leaving the EU, “We are probably the largest influencer in terms of setting out the plan and delivering on the energy market. So we can’t help shape it – shape it in the best way for the UK consumer and UK businesses. That would be a loss because you would be going into an area of uncertainty.”

It would also remove the UK’s voice from discussions where historically it has been very strong – a good example of this being the 2012 Offshore Drilling Safety directive, proposed following the Macondo accident. The Commission originally proposed a directly applicable regulation which could have had significant impacts on the post-Piper Alpha North Sea safety standards – which were widely viewed as the global gold standard. The UK, working with allies in the Netherlands and Denmark, ensured that instead, a directive was agreed that would enable those Member States with an effective system already to continue on that basis, avoiding unnecessary costs and disruption in the North Sea.

Renewable energy targets

Of course, there is the question of renewable energy targets. It would be difficult to argue that technology specific targets are particularly popular with any British policymakers – but given the UK’s success in 2014 in working to move the 2030 target system away from any binding national targets for renewables and energy efficiency, the UK has already achieved its aim in changing the system to a much more flexible one, so would have little to gain from being outside the 2030 system.

Policymaker to policy taker?

Either way, when thinking about Brexit and energy and climate policy there are real questions to be answered – both in terms of what the UK would seek to leave, and where the benefits would be. In both a WTO-only situation or a Swiss/Norway style solution, the UK could move from being (one of the most important) policymakers to the policy taker. Other alternative models that would allow the UK to access and influence the internal energy market whilst not being in the EU, are yet to be elaborated upon and raise serious questions of viability.

 

Published by Matt Hinde

New measures to strengthen and boost funding for an EU scheme to provide fruit, vegetables and milk products in schools were backed by the agriculture committee on Monday. They put more emphasis on educating children in healthy eating, increase the budget and merge into one the current separate schemes for milk and fruit in schools.
Committee on Agriculture and Rural Development

Source : © European Union, 2016 - EP

New measures to strengthen and boost funding for an EU scheme to provide fruit, vegetables and milk products in schools were backed by the agriculture committee on Monday. They put more emphasis on educating children in healthy eating, increase the budget and merge into one the current separate schemes for milk and fruit in schools.
Committee on Agriculture and Rural Development

Source : © European Union, 2016 - EP

General : European Parliament President Martin Schulz was in Portugal on Friday 8 January, where he joined the event marking the 30th anniversary of the country's 1986 accession to the EU, then called the European Economic Community. “Thirty years later, we can honestly say that Portugal's EU membership has been an enormous success,” he said at the ceremony in Lisbon.

Source : © European Union, 2016 - EP

General : European Parliament President Martin Schulz was in Portugal on Friday 8 January, where he joined the event marking the 30th anniversary of the country's 1986 accession to the EU, then called the European Economic Community. “Thirty years later, we can honestly say that Portugal's EU membership has been an enormous success,” he said at the ceremony in Lisbon.

Source : © European Union, 2016 - EP

General : Measures to tackle the migration and refugee crisis are to be discussed by the civil liberties committee on Thursday. MEPs also vote on the first EU-wide cybersecurity rules and on the protection of undisclosed business information against unlawful acquisition and use. MEPs are to discuss the programme of the new Council presidency with the relevant Dutch ministers while political groups prepare for next week's plenary session in Strasbourg.

Source : © European Union, 2016 - EP

General : Measures to tackle the migration and refugee crisis are to be discussed by the civil liberties committee on Thursday. MEPs also vote on the first EU-wide cybersecurity rules and on the protection of undisclosed business information against unlawful acquisition and use. MEPs are to discuss the programme of the new Council presidency with the relevant Dutch ministers while political groups prepare for next week's plenary session in Strasbourg.

Source : © European Union, 2016 - EP

DRAFT REPORT on The EU in a changing global environment - a more connected, contested and complex world
Committee on Foreign Affairs
Sandra Kalniete

Source : © European Union, 2015 - EP

AMENDMENTS 1 - 190 - Draft motion for a resolution 2015 Report on Serbia
Committee on Foreign Affairs

Source : © European Union, 2016 - EP

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Mr Mas congratulates Mr Puigdemont after Sunday night's election in Barcelona

It’s been three weeks since Spain’s inconclusive national elections left the country in an uncharacteristic political stalemate. As one of the last remaining EU countries dominated by two centrist parties – and a two-party system where leaders have some of the strongest tools anywhere to impose strict discipline on backbenchers – it has normally been clear on election day whether the centre-right Popular party or centre-left Socialists had a majority in the 350 congress of deputies. But for the first time since it returned to democracy, neither of the country’s two largest parties secured more than 30 per cent of the vote in the December 20 contest, and the second-place Socialists (who polled 22 per cent) have repeatedly refused to join a grand coalition with the Popular party (28.7 per cent) of Prime Minister Mariano Rajoy.

That might all change this week because of some fast-moving developments in Catalonia which, until now, looked headed towards a re-run of regional elections in March. First, Catalonian independence leader Artur Mas, whose Junts pel Si coalition won the regional elections in September, unexpectedly stepped down as leader on Saturday, a week after the far-left pro-independence CUP party vowed not to join in a coalition with Mr Mas to govern the region. Mr Mas’ resignation cleared the way for his less controversial ally Carles Puigdemont to take over Junts pel Si, and on Sunday Mr Puigdemont was voted leader of Catalonia in a special session of the regional parliament.

That decision could set off two more unprecedented moves that are likely to dominate Spanish political debate this week: the Socialists may now think again about joining Mr Rajoy – if not in a grand coalition at least in support of a Rajoy-led minority government – as a way to create an anti-independence united front in Madrid. And the Catalonian government is likely to move more quickly towards creating all the trappings of independence, including a central bank and tax authority. Last night, Mr Rajoy warned darkly that he had “given instructions” to prevent any illegal act from going into law in Catalonia. “I am going to defend democracy in all of Spain,” he said.

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Tuesday 12 January 2016
11.00 New Year's reception at the Royal Palace (Brussels)
17.00 Meeting with the Greens/EFA group in the European Parliament  (EP)
18.00 Meeting with the S&D group in the European Parliament  (EP)

The Polish government has sent a punchy defence of its media reforms to Brussels, accusing the EU of getting its facts wrong and warning of the “undesirable effects” any crackdown on Warsaw will bring.

The letter to the European Commission’s first vice president Frans Timmermans, which can be read in full here, lays out Poland’s defence of its decision to sack senior management at state media outlets.

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Location : Brussels JAN 2Q2
Further information
Programme
Poster
Source : © European Union, 2016 - EP