European Union

Conclusions adopted by the Council on developing media literacy and critical thinking through education and training acknowledge the many benefits and opportunities that the Internet and social media can bring, but also highlight the potential threats and dangers they can present. The conclusions stress the fundamental role of education and training in helping young people to become media-literate and responsible citizens of the future.

Read the full text of the Council conclusion on developing media literacy and critical thinking through education and training

General : Plans to set up an EU Border and Coast Guard are to be put to a vote in Parliament's civil liberties committee this week. MEPs also vote on proposals to introduce a standard European travel document for non-EU nationals and to expand the exchange of criminal records between member states. At a hearing in the human rights subcommittee members discuss the plight of minority groups caught up in Syria's civil war and in ISIS atrocities. Preparations also take place for next week's plenary session.

Source : © European Union, 2016 - EP

General : Plans to set up an EU Border and Coast Guard are to be put to a vote in Parliament's civil liberties committee this week. MEPs also vote on proposals to introduce a standard European travel document for non-EU nationals and to expand the exchange of criminal records between member states. At a hearing in the human rights subcommittee members discuss the plight of minority groups caught up in Syria's civil war and in ISIS atrocities. Preparations also take place for next week's plenary session.

Source : © European Union, 2016 - EP

The International Organization of Securities Commissions (IOSCO) was born 33 years ago, when 11 regulators from North and South America got together as markets were beginning to look global.  Today, there are 126 securities regulators from across all continents, who are members of IOSCO. IOSCO’s raison d’etre is to set global standards for securities regulation. It meets every year to review priorities; however, the annual AGM in Lima, Peru, earlier this month, was a bit different.

 New Leadership

Ex-US FINRA Paul Andrews had just succeeded long standing EU Commission servant David Wright as Secretary General, Hong Kong SFC Ashley Alder was elected as new chair of the IOSCO Board, replacing Australia’s ASSIC’s chair Greg Medcraft, and JP Servais provided the dose of Europe in the new IOSCO leadership, coming in as Vice-Chair.

New Agenda

While much of the focus was on market liquidity and the opportunities and threats of FinTech on securities markets, there were also some new items on the agenda:

• New powers granted to IOSCO members to more effectively deter cross-border misconduct and fraud in markets;
• New mandates relating to retail investors: to review industry practices on investor vulnerability; to apply insights from behavioral economics to investor initiatives; and to run a pilot world investor week in 2017;
• New working group on infrastructure finance;
• New mechanisms for securities regulators to gather and share information on cyber risk/security issues; and
• New ways for the financing of SMEs

New Challenges & Opportunities

• Award-winning costume designer Ed Stevenson once said: “Standards only move in one direction. At the beginning of the world, standards were established and they’ve been slipping ever since.”By contrast , IOSCO’s standards have got better and better over the years. Witness the recent EU negotiations on Benchmarks regulation, where the majority of public and private sector actors involved praised IOSCO’s work in that space (i.e its Principles for Financial Benchmarks and for Price Reporting Agencies). Will this be the new “benchmark” by which IOSCO standards are judged going forward?

• Not only does the EU Benchmarks legislation, adopted last month, reproduce (word for word at times) most of the IOSCO principles, it also places, for the first time in EU Regulation history, compliance with such principles at the heart of the Third-Country regime (i.e the ability for non-EU benchmarks to be used in the EU). Will IOSCO seek to promote this precedent in other areas? And could the fact that IOSCO standards increasingly gain the force of law through national/regional copy and pasting impact the dynamics within IOSCO?

• Certain provisions of the Benchmarks legislation were markedly influenced by central banks, given the potential financial stability implications of a benchmark (in particular a critical one) ceasing to exist. Central banks are also driving the global initiative to improve conduct in FX trading, which one might have expected to be classic securities regulators’ territory. It is of course, but it is also seen as a source of systemic risk. And so is market liquidity, the rise of electronic and algorithmic trading, bond funds redemptions, and many other traditional securities regulators’ topics. This year’s motto for the IOSCO AGM in Lima was “Strengthening global bridges for financial development”. Could next year’s be “Strengthening global bridges with central bankers?”.

• One final new challenge, coming from Europe at least, is the growing call for “democratic accountability”. Recall French ALDE MEP Sylvie Goulard’s recent own-initiative report on the EU in international fora, calling all global standard setters to be more transparent and establish a transparency register similar to what Brussels has, but also now taken on by Paris and Dublin. If Europe’s flexibility to develop its own rules is diminished as a result of an increased recognition of global standards agreed “upstairs”, is this a sacrifice worth making for international standard setters, and might this impact the future quality of their standards?

Ed Stevenson’s numerous film and television credits included Citizen Kane (1942), which is often cited as being among the greatest films of all time. FleihmanHillard is honoured to host Citizen Andrews, new IOSCO Secretary General, at a Roundtable in Brussels on 31st May, where we will hear Paul’s thoughts on some of the issues and questions listed above, as well as his priorities and broader vision for IOSCO going forward.

By Bertrand Huet, Senior Vice President & Partner.

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The Informal meeting of EU Ministers for Urban Matters takes place on 30 May 2016 in Amsterdam.

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The text of the conclusions stresses the invaluable contribution that youth work, voluntary and cultural activities and sport can make in reaching out to young people who might otherwise be more vulnerable to radicalisation.

Read the full text of the Council conclusions on the role of the youth sector in an integrated and cross-sectoral approach to preventing and combating violent radicalisation of young people

On 30 May 2016, the Council adopted a regulation extending an exemption for commodity dealers under EU bank capital requirements. 

Regulation 575/2013 exempts commodity dealers from large exposure requirements and from own funds requirements until 31 December 2017. It also requires the Commission to prepare, by 31 December 2015, reports on the prudential supervision of commodity dealers and of investment firms in general. That review is still underway, and it is likely that new legislation that may be required as a consequence would only be adopted after 31 December 2017. 

It has therefore been decided to extend the exemption until 31 December 2020, in order to save commodity dealers from an unstable regulatory environment in the short term. Applying large exposure requirements and own funds requirements to commodity dealers should not come as the result of a lapsed exemption, but on the basis of a thoroughly reasoned decision. 

The regulation extending the deadline was adopted without discussion at a meeting of the Education, Youth, Culture and Sport Council. The European Parliament approved it on 11 May 2016.

The exemption applies to a broad spectrum of dealers in energy and commodity markets. Some trade exclusively in commodity derivative contracts and resemble investment firms in terms of functions and risks, whereas others trade commodity derivatives purely as an ancillary activity to commodities production.

“Taking back control” from an anti-democratic EU is a central theme of the “leave campaign”. Even some of those advocating “stay” concede the EU needed to “reform” to become more democratic and accountable.

This response is puzzling given the existing opportunities to influence EU as well as critics’ vagueness and disagreement about how a more democratic EU should look like. The focus on allegedly undemocratic Brussels institutions misses that most of the problems as well as solutions to democracy can be found closer to home.

The most obvious way in which citizens can influence the EU is through the election of the Westminster parliament. Any transfer or sharing of new competences with the EU had to be agreed by national parliaments and the House of Commons has ratified each Treaty change since 1973 with solid majorities. Supranational law and its interpretation to the European Court of Justice only takes effect because this is what the people’s elected representatives legislated for.

Major changes to the EU such as Enlargement have been strongly advocated by successive British governments, whilst they have also blocked in the past more wide-ranging proposals for direct democracy fearing that more legitimacy for EU bodies will give them also greater power. National ministers appointed through general elections wield significant power over day-to-day legislation in the Council of Ministers and, for strategic direction, the European Council.

The UK retains exclusive competence in the areas most sensitive to UK citizens such as taxation, pensions, health, policing and remains exempt from legislation associated with the Schengen free-border or the Eurozone. The UK has consolidated its status as Eurozone outsider with guarantees that it will not be discriminated against, does not need to contribute to any bailouts and can keep its own financial supervision.

The previous government’s extensive audit of EU’s competences involving business and civil society was broadly supportive of the current distribution. It is true that the UK does not always have its way, but as my LSE colleagues have shown, British governments have voted in 97 percent of cases with the majority in the period 2004-2009 and 87 percent in 2009-2015 in the Council.

Hence, it is somewhat meaningless to measure which proportion of UK laws emanate from the EU. The widely cited study of the House of Common’s library arrived at figures of 6.8% for primary legislation and 14.1% for secondary legislation. Even these figures overestimate EU influence as the ‘degree of involvement varied from passing reference to explicit implementation’.

The second democratic channels are the elections to the European Parliament (EP). Not only has the EP acquired real power to block or change legislation in most policy areas, for instance, its rejection of the controversial Anti-Counterfeiting Trade Agreement (ACTA).

The EP has also increasing powers over the European Commission as a hybrid body combining the powers of a regulator with more political functions of proposing new legislation. The first function relies on having appropriate expertise and is typically-shielded from undue political influence in most countries. The second function no doubt requires political accountability and democratic responsiveness and the primary body to do this is the European Parliament.

In 1999, the EP brought about the resignation of the Santer-Commission after a transnational network of investigative journalists exposed cases of corruption and wrong-doing. This case also illustrated vividly that national-based media can hold supranational institutions to account and that pan-European debates are possible.

At the 2014 elections, the major European party groupings, Socialists and Democrats and the European People’s Party (EPP) campaigned with lead candidates for Commission president after a change in the Lisbon Treaty allowed for this personalisation. When the EPP emerged as the winner on a decent turnout of 42.6 percent, its candidate Jean-Claude Juncker became President against the opposition of the UK and Hungary.

The reason why this outcome appeared as a surprise to British voters in contrast to those of other countries was because Labour and Conservatives had pretended that the Treaty change was meaningless and most British media uncritically bought this line and thus gave the candidates hardly any publicity in contrast to, for instance, Germany as the LSE’s Simon Hix showed. Given this precedent, it is likely that next time more citizens will vote in European elections according to the candidates and policies on offer, not the popularity of the domestic government.

The last avenue of influence is the Citizens Initiative which obliges the European Commission to consider new legislation on a particular issue as long as it is backed by at least one million EU citizens, coming from at least 7 out of the 28 member states. Even though if it does not force the Commission to actually legislate, it is a powerful tool to put issues on the agenda.

Given the diversity of national systems and cultures, there is no ready-made blue-print available for democracy above the nation-state. The greatest potential lies not in protracted constitutional reforms involving governments with little interests to cede power, but in changing everyday democratic practice within and across member states.

There needs to be greater scrutiny of ministers’ actions in Brussels by the media to prevent them getting away with ‘saying one thing in Brussels, and another thing to the domestic audience’ (Boris Johnson). It has been argued that the House of Common’s scrutiny of European affairs has been weak and many MPs have lacked the motivation to invest time in this role as they feel this was not going be sufficiently visible in the media and appreciated by constituencies.

The media should also report more extensively and accurately about who takes what decisions with which consequences in the EU. And civil society organisations and citizens could use more fully the existing opportunities to influence the direction of the EU and campaign for the changes they want, both at home, and with citizens in other countries. A more democratic EU starts at home, but cannot stop there.

Christoph Meyer is Professor of European & International Politics, King’s College London

The post A More Democratic EU Starts at Home appeared first on Ideas on Europe.

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President Tusk runs the 20km of Brussels taking place on 29 May 2016.

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DRAFT OPINION on the proposal for a regulation of the European Parliament and of the Council concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No 994/2010
Committee on Foreign Affairs
Jacek Saryusz-Wolski

Source : © European Union, 2016 - EP

The protest against France's planned labour market reform continue to spread. Tens of thousands demonstrated on Thursday, while rail, airport and nuclear power plant strikes have paralysed the country. Commentators in neighbouring countries praise both the rebellious population and the unrelenting president.