European Union

MEPs have fought for and obtained better support for unemployed youngsters and additional funds to boost key initiatives supporting SMEs, transport infrastructure projects, research and Erasmus+ student mobility. The provisional deal on the EU Budget 2017 with the Council was reached in the early hours of Thursday. After Budget MEPs and Council have formally endorsed the agreement, the new EU budget will be voted in plenary in December.
Committee on Budgets

Source : © European Union, 2016 - EP

On 17 November 2016, the Council and European Parliament reached agreement on a 2017 EU budget which strongly reflects the EU's main policy priorities. Total commitments are set at €157.88 billion and payments at €134.49 billion.  

"The strength of the 2017 EU budget lies in its focus on priority measures such as addressing migration, including by tackling its root causes, and encouraging investment as a way to help stimulate growth and create jobs. This maximises the budget's impact to the benefit of EU taxpayers, European citizens and companies. And it respects member states' continued efforts to consolidate their public finance", said Ivan Lesay, state secretary for finance of Slovakia and President of the Council.  

More money for migration and security 

Agreed commitments of almost €6 billion mean that around 11.3% more money will be available for tackling the migration crisis and reinforcing security than in 2016. The money will be used to help member states in the resettlement of refugees, the creation of reception centres, the support for integration measures and the returns of those who have no right to stay. It will also help to enhance border protection, crime prevention, counter terrorism activities and protect critical infrastructure. 

Investing in growth and jobs 

Commitments of €21.3 billion were agreed to boost economic growth and create new jobs under sub-heading 1a (competitiveness for growth and jobs). This is an increase of around 12% compared to 2016. This part of the budget covers instruments such as Erasmus + which increases by 19% to €2.1 billion and the European fund for strategic investments which raises by 25% to €2.7 billion. The 2017 EU budget also includes €500.00 million in commitments for the youth employment initiative to help young people to find a job. Further €500.00 million were agreed for supporting milk and other livestock farmers with additional support measures announced in July. 

With a view to matching member states' consolidation efforts at national level the Council and the Parliament reminded all EU institutions to complete the 5% staff reduction by 2017 as agreed in 2013.   

  Headings2017 EU budget (in mln €)  CommitmentsPayments 1. Smart and inclusive growth74,89856,522 - 1a. Competitiveness for growth and jobs21,31219,321 - 1b. Economic, social and territorial cohesion53,58737,201 2. Sustainable growth58,58454,914 3. Security and citizenship4,2843,787 4. Global Europe10,1879,483 5. Administration9,3959,395 Special instruments534390 TOTAL157,883134,490Next steps 

The 2017 EU budget is expected to be formally adopted by the Council on 29 November and the Parliament on 1 December.

On 17 October 2016, the Council adopted Council Decision (CFSP) 2016/1839[1] amending Decision 2010/638/CFSP. 

The Council Decision renews existing measures until 27 October 2017. 

The Candidate Countries the former Yugoslav Republic of Macedonia*, Montenegro*, Serbia* and Albania*, the country of the Stabilisation and Association Process and potential candidate Bosnia and Herzegovina, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as the Republic of Moldova, Armenia and Georgia align themselves with this Council Decision. 

They will ensure that their national policies conform to this Council Decision. 

The European Union takes note of this commitment and welcomes it. 

[1] Published on 18.10.2016 in the Official Journal of the European Union no. L 280, p. 32. 

* - The former Yugoslav Republic of Macedonia, Montenegro, Serbia and Albania continue to be part of the Stabilisation and Association Process.

On 20 September 2016, the Council adopted Council Implementing Decision (CFSP) 2016/1694[1] implementing Council Decision (CFSP) 2015/1333. 

The Council Decision removes one person from the list of persons as set out in Section A of Annexes II and IV to Decision (CFSP) 2015/1333. 

On 30 September 2016, the Council adopted Council Decision (CFSP) 2016/1755[2] amending Council Decision (CFSP) 2015/1333. 

The Council Decision renews the existing measures for three persons for a further period of six months and amends the statements of reasons relating to these persons. 

The Candidate Countries the former Yugoslav Republic of Macedonia*, Montenegro*, Serbia* and Albania*, the country of the Stabilisation and Association Process and potential candidate Bosnia and Herzegovina, and the EFTA countries Iceland, Liechtenstein and Norway, members of the European Economic Area, as well as the Republic of Moldova and Armenia align themselves with this Council Decision. 

They will ensure that their national policies conform to this Council Decision.

The European Union takes note of this commitment and welcomes it.

[1] Published on 21.9.2016 in the Official Journal of the European Union no. L 255, p. 33.
[2] Published on 1.10.2016 in the Official Journal of the European Union no. L 268, p. 85. 

* - The former Yugoslav Republic of Macedonia, Montenegro, Serbia and Albania continue to be part of the Stabilisation and Association Process.

Location : ASP A3G3Further information
Final programme
Source : © European Union, 2016 - EP

THE COUNCIL OF THE EUROPEAN UNION: 

(1)     RECALLS its conclusions of 19 November 2014 on the Sixth report on economic, social and territorial cohesion: investment for jobs and growth[1], of 23 June 2015 on the implementation challenges of the cohesion policy 2014-2020[2], of 18 November 2015 on Simplification: Priorities and expectations of Member States with respect to European Structural and Investment Funds[3], of 15 March 2016 "Investing in jobs and growth - maximising the contribution of European Structural and Investment Funds"[4] and of 24 June 2016 on "A more R&I friendly, smart and simple cohesion Policy and the European Structural and Investment Funds more generally"[5]; 

(2)     RECALLS that the EU shall develop and pursue actions to strengthen the economic, social and territorial cohesion of the Union and that the specific mission of cohesion policy is to reduce disparities between the levels of development of the various regions as set out in Article 174 of Treaty on the Functioning of the European Union; 

(3)     RECOGNISES that cohesion policy is the main investment policy at the EU level to achieve the objectives as set out in the Europe 2020 strategy; and UNDERLINES the added value of cohesion policy and the European Structural and Investment Funds (ESI Funds), in particular:  

a)      in providing a stable long-term EU framework and financial means for investment in jobs and growth and the delivery of structural reforms, through integrated interventions tailored to Member States and the various regions of the EU; 

b)      in mobilising and coordinating national and subnational actors under the shared management mode by directly engaging them, based on the partnership principle, in delivering EU priorities through co-financed projects; 

c)           in pioneering an evidence-based and result-oriented approach to EU investments; 

d)      in providing positive incentives for many Member States and subnational actors to implement structural reforms, strengthen their strategic planning, administrative capacity, and cooperation. 

I.          Evaluation of the cohesion policy programmes 2007-2013

 (4)     WELCOMES the Commission Staff Working Document 'Ex post evaluation of the ERDF and Cohesion Fund 2007-2013'[6], which provides evidence that during the 2007-2013 programming period, cohesion policy has made a major contribution to growth, employment and social inclusion opportunities throughout the different types of EU regions, objectives defined in EU strategies, as well as to the reduction of regional disparities between Member States; 

(5)     HIGHLIGHTS that the results set out in the Ex-post evaluation of the European Regional Development Fund (ERDF) and the Cohesion Fund were achieved in a context of economic and social challenges, including the deep global economic and financial crisis, the need to build up the economy, infrastructure and administrative capacity, in particular of 13 Member States joining the EU as from 2004, as well as shifting strategic political priorities and newly emerging challenges at EU level;  

(6)     UNDERLINES in particular the following findings of the Ex-post evaluation of the ERDF and the Cohesion Fund: 

a)      The economic modelling performed by the Commission estimates that EUR 270 bn invested from the ERDF and Cohesion Fund during the period 2007-2013, together with national co-financing, will have generated EUR 1 trillion in additional GDP across all Member States by 2023; 

b)      The data reported by managing authorities of the Member States shows that the ERDF and Cohesion Fund will have led to the creation of nearly 1 million jobs, which represents a significant contribution to the net total of 3 million jobs created in the EU economy over the period; 

c)      Financial support under the ERDF programmes helped 400 000 SMEs to withstand the effects of the economic and financial crisis and increase their competitiveness and exports through innovation; 

d)      Cohesion policy contributed to a closer integration of the EU internal market, in particular through improving transport links (in particular TEN-T corridors), to improving energy efficiency, water and waste water treatment as well as waste management, to modernising education and healthcare infrastructure, as well as to strengthening research and innovation; 

e)       Funding available under European Territorial Cooperation programmes (Interreg) enhanced cooperation between neighbouring regions of different Member States, between Member States across the EU, as well as between Member States and non-EU countries,  and also contributed to wider effects, notably in terms of alleviating specific barriers to cooperation across different sectors and of better economic, social and environmental integration, thus representing a prominent example of EU added value;  

(7)     Notwithstanding the positive results of cohesion policy in the 2007-2013 period, NOTES some shortfalls during this period, in particular: 

• Weaknesses in terms of relevance, monitoring, effectiveness and coherence of the actions undertaken, showing that the focus on result-orientation had not been strong enough; and
• The need to enhance administrative capacity at the management level of programmes and to decrease the administrative burden and costs;

 (8)     NOTES that the underlying evaluations of the Staff Working Document capture the situation at the end of 2014 when programmes could not yet have reported in full on the achievement of objectives and targets; 

(9)     NOTES that the Commission has also undertaken an ex-post evaluation for the European Social Fund (the ESF) and LOOKS FORWARD to the presentation of results in the related Staff Working Document; INVITES the Commission to present the outcomes of future evaluations for the ESI Funds in a coordinated manner to facilitate a complete assessment, while paying special attention, where appropriate, to the place-based approach; 

(10)   UNDERLINES that cohesion policy, being accompanied by a thorough set of rigorous evaluations, represents best practice of evidence-based policy-making, and can serve as an example for other EU policies financed from the EU budget; 

(11)   CALLS ON the Commission and Member States, in cooperation with all relevant stakeholders, to widely disseminate to the public the results and benefits of cohesion policy which are supported by available evaluations.  

II.         Assessment of certain new elements of cohesion policy and the ESI Funds 2014-2020

(12)   HIGHLIGHTS that compared to the 2007-2013 programming period, a number of new elements were introduced into the legislative framework for the 2014-2020 period aimed at strengthening the effectiveness, result orientation and EU added value of the ESI Funds. First concrete experiences with certain new elements, in particular with the performance framework, thematic concentration, ex-ante conditionalities and the link to the EU economic governance, were made in Member States during the elaboration of their Partnership Agreements and programmes. The practical application of new elements required careful preparation in terms of time and resources to ensure that the necessary conditions for effective spending, including new management and control systems, are in place. At the same time, new instruments of the legal framework such as joint action plans, integrated territorial investments or community led local development strategies provide new opportunities for Member States; 

(13)   NOTES that the comprehensive programming exercise, in combination with the late adoption of the legal acts, parallel preparation for the closure of the 2007-2013 period, and longer than expected designation of authorities, has delayed the implementation phase in the 2014-2020 period; EXPECTS, however, that the efforts made by Member States and the Commission during the programming process will pay off in the years to come through a more effective implementation of high quality programmes, and the possibility to build in the future on the improvements made in the current period; CALLS on the Member States and the Commission to take the necessary steps to speed up the implementation and reporting on the progress of the current programmes;  

(14)   RECALLS that the Youth Employment Initiative (YEI) provides a targeted support to tackle youth unemployment, accompanying the traditional actions supported by the ESF, and complementing national strategic frameworks including through the implementation of the Youth Guarantee; and TAKES NOTE of the recent Commission Communication[7] setting out the implementation results of the Youth Guarantee and YEI since 2013; 

(15)   CALLS on the Commission to submit the legislative proposals for the next programming period of the ESI Funds as soon as possible in 2018, with a view to allowing the co-legislators to reach a timely agreement, and providing a basis for early start of the programming process; 

(16)   CALLS on the Commission to consider using new elements of the ESI Funds as an example for other EU policies financed from the EU budget in the context of its "EU Budget focused on Results" initiative[8] launched in 2015; 

Performance framework

(17)   RECALLS that the ESI Funds were the first EU funding instruments to introduce a performance framework based on measurable indicators, and a review with a performance reserve to be allocated during 2019 to only those priorities of Member States programmes for which the milestones set out in the performance framework of the programmes have been achieved; 

(18)   RECOGNISES the efforts made and resources dedicated by Member States and the Commission to develop intervention logic and performance framework for the ESI Funds programmes (especially to define robust indicators, their baseline and target values); NOTES that this process has triggered useful reflections and discussions on the setting of objectives, monitoring of progress, and contributed to changing the mind-set towards an increased focus on results and performance within Member States and the Commission; 

Thematic concentration

(19)   RECALLS that the ESI Funds are subject to legal requirements for thematic concentration which leads to a higher concentration of financial support on fewer areas contributing the most to reaching the targets of the Europe 2020 Strategy, and is expected to produce better results; 

(20)   WELCOMES the fact that in the Member States' programmes under the ERDF and the ESF, thematic concentration has been achieved and, in many cases exceeded the minimal requirements; CONSIDERS, however, that a balance must be maintained between the predefined requirements for concentration on a limited number of thematic areas and the needs of Member States, including the flexibility to respond during the programming period to specific national and regional development challenges; 

Ex-ante conditionalities

(21)   RECALLS that ex-ante conditionalities were introduced in the 2014-2020 period to ensure that the conditions necessary for an effective use of funds were in place in Member States before the investment under the ESI Funds is made; 

(22)   CONSIDERS that while the fulfilment of ex-ante conditionalities sometimes requires significant time and resources to implement legislative changes or complex reforms, they have a positive effect on the overall investment environment, the strengthening of administrative capacity and good governance in many Member States; WELCOMES the facilitating role of ex-ante conditionalities in the preparation of project pipelines, strategic documents such as smart specialisation strategies, as well as in a faster implementation of the EU acquis; 

Link to EU economic governance

(23)   RECALLS that in the legislative framework for the 2014-2020 period, measures were introduced to ensure that multi-annual investments of the ESI Funds address relevant country-specific recommendations. As a result of the programming exercise, the current ESI Funds programmes are designed to support structural reforms in line with EU priorities defined through the European Semester process; 

(24)   CONSIDERS that investments that address relevant country-specific recommendations contribute to delivering structural reforms and improving the overall macro-economic situation of the Member State concerned; 

(25)   CONSIDERS that more consistency should be sought in the future between various measures linking the effectiveness of the ESI Funds to economic governance, building on the first positive experience with the introduction of ex-ante conditionalities, and taking into account the need to accommodate social, economic and territorial challenges, as well as the continuity and stability of multi-annual programmes; 

Simplification

(26)   REGRETS that the full potential of the efficiency and the result orientation of the ESI Funds legislative framework is hampered by over-regulation and the existence of too many layers of rules and controls (EU, national and regional level); RECALLS that trust between all actors is essential for an effective functioning of the shared management mode, and should be further strengthened by making the ESI Funds simpler, more accessible and more understandable to citizens, businesses and administrations; REITERATES in this regard the importance of early warning mechanisms and of reinforcing the preventive role of audit at EU and national level; 

(27)   WELCOMES the findings and recommendations issued to date by the High Level Group on monitoring simplification for beneficiaries of the ESI Funds established by the Commission and LOOKS FORWARD to its future work regarding the preparation of the post-2020 programming period; 

(28)   TAKES NOTE of the legislative proposal aimed at the simplification of the ESI Funds for the current programming period, submitted by the Commission to the Council in September 2016, and REMAINS COMMITTED to its rapid adoption; CALLS on the Commission and Member States to make best use of all options in the legal framework (including early preparation of delegated acts) which help to simplify the implementation of the current ESI Funds programmes; 

(29)   IS COMMITTED to a substantial simplification, balancing the need for stability and continuation with a significant reduction of the administrative burden and costs in the post-2020 period; CONSIDERS that the following directions and new avenues should be carefully explored without prejudice to future decisions: 

a)      A simple, clear and light set of rules for the ESI Funds with a stronger emphasis on an integrated approach (e.g. multi-fund programmes and common rules for all ESI Funds), while ensuring that each ESI Fund can deliver effectively and efficiently on its Fund-specific missions, and that preference is given to the simplest solution available; 

b)      The ESI Funds rules and the rules applicable to other EU funds, as well as other EU policies having an impact on the implementation of the ESI Funds (in particular state aid rules), should be further mutually aligned in order to simplify the implementation of EU funds for beneficiaries, facilitate synergies and complementarity between different programmes and blending of various sources, as well as to allow for comparability of effectiveness and efficiency across EU funding instruments; 

c)      Further facilitation of the take-up and efficient use of the full range of simplified cost options, accompanied by clear requirements for their control and audit; 

d)      A simpler and streamlined shared management model based on performance rather than compliance, in order to further enhance the result-orientation of the ESI Funds, while taking into account the importance of prevention, proportionality and value-for-money; 

e)      An assessment of whether lessons to be drawn from delivery mechanisms used in other EU policy areas could contribute to improving the effectiveness of cohesion policy and the ESI Funds; 

f)       Broader application of proportionality and the introduction of differentiation into the implementation of the ESI Funds programmes based on objective criteria and positive incentives for programmes; 

(30)   REMAINS COMMITTED that a regular political debate takes place among relevant ministers in the General Affairs Council to discuss the implementation and the results of cohesion policy and the ESI Funds, as well as to support the preparation of the policy framework for the post-2020 period. 

[1]            Doc. 15802/14.
[2]            Doc. 9622/1/15 REV 1.
[3]            Doc. 14266/1/15 REV 1.
[4]            Doc. 7075/16.
[5]           Doc. 10668/16.
[6]           Doc. 12371/16.
[7]            Doc. 12749/16 + ADD 1-3.
[8]            http://ec.europa.eu/budget/budget4results/index_en.cfm

 

Monday 21 November 2016 - Youth and Education

Place:        Justus Lipsius building, Brussels
Chair:       Peter Plavčan, Slovak minister for Education, Science, Research and Sport

All times are approximate and subject to change

Youth

+/- 08.00
Arrivals

+/- 08.15
Doorstep by minister Plavčan

+/- 08.30
Breakfast: structured dialogue Youth

+/- 10.00
Beginning of Council meeting
Adoption of the agenda
Approval of legislative A items (public session tbc)
Approval of non-legislative A items

+/- 10.30
Promoting new approaches in youth work (conclusions)

+/- 10.45
Young Europeans at the centre of a modern Europe (public session)

+/- 12.30
Any other business

Education

+/- 15.00
Beginning of Council meeting

+/- 15.15
Resolution on a New Skills Agenda (adoption)

+/- 15.30
Recommendation on a Skills Guarantee (political agreement)

+/- 15.45
Prevention of radicalisation leading to violent extremism (conclusions)

+/- 16.00
Fostering and developing talent: (public session)

+/- 17.45
Any other business

+/- 18.00
Press conference (live streaming)

Tuesday 22 November 2016 - Culture and Sport

Place:        Justus Lipsius building, Brussels
Chair:       Marek Maďarič, Slovak minister for Culture

All times are approximate and subject to change

Culture

+/- 08.00
Arrivals

+/- 08.45
Doorstep by Minister Maďarič

+/- 09.30
Beginning of Council meeting

+/- 09.45
Public deliberations (public session)
Audiovisual Media Services Directive (progress report)

+/-10.00
Decision on the European Year of Cultural Heritage (2018) (general approach

+/-10.15
Decision on the European Capitals of Culture 2020-2033 (general approach)

+/-10.30
Towards an EU strategy for international cultural relations (debate)

+/- 12.15
Any other business

+/- 13.00
Lunch: structured dialogue Sport

+/- 14.30
Press conference (live streaming)

Sport

+/- 15.00
Beginning of Council meeting

+/- 15.15
Sport diplomacy (conclusions)

+/- 15.30
The impact of sport on personal development (public session)

+/- 17.20
Any other business

https://tvnewsroom.consilium.europa.eu/uploads/council-images/thumbs/uploads/council-images/remote/http_c96321.r21.cf3.rackcdn.com/450px-Flag_of_the_Central_African_Republic.svg_129_97shar_c1.png

The EU strategy is based on a flexible approach linking relief, rehabilitation and development (LRRD). The consolidation of peace, security and sustainable stabilisation are central to EU-CAR relations.

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There needs to be a “comprehensive global approach” against secret tax structures, says the Nobel Prize-winning economist, Joseph Stiglitz, who called for “zero tolerance”. Speaking to Parliament’s Panama Committee on Wednesday, the former advisor to the Panamanian government suggested that secrecy in tax affairs should be treated like a disease which needs to be isolated.
Committee of Inquiry to investigate alleged contraventions and maladministration in the application of Union law in relation to money laundering, tax avoidance and tax evasion

Source : © European Union, 2016 - EP

There needs to be a “comprehensive global approach” against secret tax structures, says the Nobel Prize-winning economist, Joseph Stiglitz, who called for “zero tolerance”. Speaking to Parliament’s Panama Committee on Wednesday, the former advisor to the Panamanian government suggested that secrecy in tax affairs should be treated like a disease which needs to be isolated.
Committee of Inquiry to investigate alleged contraventions and maladministration in the application of Union law in relation to money laundering, tax avoidance and tax evasion

Source : © European Union, 2016 - EP

The Slovak Presidency of the European Council declared in the summer that the end of 2016 is still a feasible deadline for the finalisation of the Transatlantic Trade and Investment Partnership (TTIP). But this deal – and several others – are under threat.

Despite all previous declarations, the Commission took the unprecedented political decision to subject the Comprehensive Economic and Trade Agreement with Canada (CETA) to approval by national parliaments in addition to the European Parliament. That’s at least 36 parliaments, both national and provincial, who need to approve the deal. It could mean four or five years before
the agreement takes effect.

The Commission is striving to react to criticism. It has come up with a new model of investment protection, the investor-state dispute settlement model (ISDS). It has substantially increased negotiation transparency. It publishes reports on the potential benefits of successfully-concluded trade deals. But this isn’t enough to reach out to those across the EU who are hostile to free trade. Member states remain under intense pressure from strong lobbies and civil society.

The EU is growing more protectionist, and has been since well before Britain voted to leave. It’s true that discontent with globalisation and suspicion of the EU’s trade – and other – policies were prominent in the debate leading up to the British EU referendum. But the EU itself reacted to the Brexit vote with a protectionist stance. Some EU capitals were keen to punish London for fear that other countries would follow Britain out of the EU but with favourable access to the single market. Pursuing this strategy would be damaging for both sides, so a more sensible and “depoliticised” approach needs to be found. Taking into account the significant trade deficit the UK has with the rest of Europe, currently at a record high level, one could even argue that the EU needs the British market more than Britain needs the EU single market.

Widespread public concern over free trade agreements is understandable. We are negotiating a new generation of trade deals that go beyond the elimination of tariff barriers and include discussions on food safety, international standards and consumer protection. In the case of TTIP, it even has geopolitical and strategic importance. Citizens want to know whether these deals will help growth to be restored and new jobs to be created. They want higher, not lower standards of health, labour and environmental protection. Opposition is often based on the perception that deals are negotiated in secret, for the benefit of multinational companies and at the expense of ordinary people.

If we are serious about fighting protectionism, we have to make a more convincing case about the benefits of trade liberalisation. Trade increases spending power, especially for those on low incomes, and enlarges the variety of goods and services people are able to buy. We must also be clear about the scope of trade agreements. The Commission has already made considerable
efforts in terms of transparency, but more has to be done. It’s clear that the benefits aren’t evenly shared across the EU or inside countries. We have to (re)define the responsibility institutions,
both at the EU and at national level, have towards those who may be affected. We must prevent crisis situations and be more pro-active.

Rejecting free trade means we are on the defensive. It’s an admission we aren’t competitive enough to progress on the global stage. Protectionism is very much a European and American problem; it’s not by any means a general global trend. We have to understand that the future of global trade doesn’t depend on our participation anymore. Canada, China, Australia and others are actively negotiating trade and investment agreements. We can either take the lead, conclude deals and set new models and standards, or we can stand by and let others set conditions for us. We face enormous challenges: chronically slow economic growth (especially in the eurozone), persistently high unemployment, and energy insecurity. We have to make clear to our citizens that open trade is a crucial instrument for growth and a way out of these difficult situations. Free trade was one of the engines of the prosperous decades following the Second World War in Europe, America and beyond. We should have the courage and political will to champion it.

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The post Time for an end to EU protectionism appeared first on Europe’s World.

Place: Justus Lipsius building, Brussels
Chair: Robert Kaliňák, Deputy Prime Minister and Minister for the Interior 

All times are approximate and subject to change 

Home affairs issues 

+/- 08.00
Arrivals (live streaming) 

+/- 08.15
Doorstep by Minister Kaliňák 

+/- 10.00
Beginning of Mixed Committee meeting (roundtable)
Adoption of the agenda
European Travel Information and Authorisation System
Information Exchange and Interoperability (evolution of the Schengen Information System - SIS)  

+/- 11.10
Beginning of Home Affairs Council meeting
Adoption of the agenda
Adoption of non-legislative A Items
Information Exchange and Interoperability

+/- 12.50
Joint Action Days
European Travel Information and Authorisation System (public session)
Any other business 

+/- 13.15
Working lunch

+/- 15.00
Fight against Terrorism
EU Internet Forum
EU-Passenger Name Record
Any other business 

+/- 17.15
Press conference (live streaming) 

We politicians, our people, but also investors, bankers, live in uncertain times, ever since the outcome of the British referendum, the UK and the continent have regarded each other with some suspicion.

Coming from the Netherlands, I strongly regret the outcome of the referendum, but we have to respect and accept the choice of the British people. In my mind, it is a lose-lose situation, which we must manage as well as possible. It is now in the interest of both the UK and the rest of Europe to come to a fair and clear arrangement for our future relation. A new settlement with clarity on how the British government sees the role for itself in the Europe of the future, on how to proceed with our trade and international affairs and to limit the economic damage to the UK and the European Union.

Many things are uncertain, but we do know that whatever the future will look like, we'd better face it with a strong foundation. And that's what we are focusing on. Because the eurozone economy is now in a better shape and it needs to improve further. Since the crisis, we have taken important steps to secure our recovery. We are better prepared for possible shocks in the future. Thanks to the decisive steps we took, all European economies are growing again in the third quarter, unemployment is falling and deficits have been reduced. The average government deficit in the euro area in 2009 was over six percent, and will fall below two percent this year.

We have added safeguards to strengthen our shock absorption capacity so our economies can keep growing in the future, our people can find jobs again and investors are willing to invest in our countries and companies. But this doesn't mean we're there yet.

We've come a long way

First, look at how far we have come. In 2008 and 2009 our economies were hit by a huge financial crisis. In the US, the UK and all over continental Europe banks had to be saved by taxpayers' money in order to prevent chaotic defaults. But by preventing the collapse, government debt increased and investors became concerned about the prospects of repayment of government debt. This affected the banks' health, as they hold large amounts of sovereign debt. And so the vicious link between banks and sovereigns was born.

This is the reason we have taken unprecedented steps over the last couple of years. We have created a banking union, which aims to protect 340 million European taxpayers from future financial crises. The banking union was set up in only three years.

What are the results of the project so far? I see five key elements, which I will discuss in more detail in a minute: First, stricter and harmonized capital requirements. Second, enhanced supervision at European level. Third, making bail-in the new norm: if a bank gets into trouble, its investors must foot the bill. Fourth, resolution of failing banks at European level and setting up of a single resolution fund. Fifth and finally, we are determined to create a European deposit insurance scheme once remaining risks have been sufficiently reduced in the coming years.

These important steps will make banks and governments better prepared for possible shocks in the future.

Where are we now?

The European financial sector is in a much better shape than before. Thanks to the first two key elements of the banking union - stricter common rules and the single supervision mechanism - problems in bank balance sheets have become transparent in a uniform way. This is good news, because although this transparency shows that challenges remain, it also ensures that banks take their responsibility and take steps to become more resilient.

So banks can contribute to the recovery of the real economy and further reduce the negative feedback loop between sovereigns and banks.

As I said, we aren't there yet. A number of banks throughout the eurozone still suffer from a high stock of non-performing loans. These loans are putting pressure on bank's profitability and their ability to provide new credit. This is slowing down the economic recovery in a number of our countries. The gross carrying amount of these loans in the EU amounts to over a trillion euros. Insolvency laws in some countries have recently been modernized. But In practice there are also obstacles like the capacity of the courts. Therefore out-of-courts settlements are badly needed. The European Commission will propose legislation very soon.

But banks cannot afford to simply sit on their hands and wait. Without timely and adequate provisioning and write-offs of loans, their long term profitability and viability are at risk. While this might be painful in the short run, banks need to be ambitious, and raise additional capital if necessary, to survive in the long run.

Also, some banks still have a lot of scope for improving cost efficiency. Bold measures are needed to cut costs further. In addition, many banks have been hit by large fines due to unethical behavior. And I hope to say: unethical behavior in the past. These fines have been a drag on the recovery of some institutions. Here, prevention is better than cure. To survive in the long run, banks should always view things from the perspective of their clients and do what is right for them.

Earlier I mentioned five elements of the Banking Union. The third element, bail-in, is crucial. I am well aware, that some say bail-in is too painful, risky, and hard to apply. But it ensures that we won't have to save banks with taxpayers' money anymore. It is a sound economic principle and deals with losses in a fair way. Some may worry about stability, but I firmly believe that bail-in will ultimately safeguard stability and strengthen bank's resilience. And it gives markets an incentive to price risks as accurately as possible.

The effects are already becoming visible. Major rating agencies have downgraded their expectations about public support to much lower levels in eurozone countries. And several studies show that investors are responding accordingly. For example, we see an increase in the difference between banks' CDS spreads and the spreads of their sovereigns, which means that investors believe in the principle of bail-in.

The newly established Single Resolution Board, the fourth key element I mentioned, has not yet had to deal with a failing bank. This might sound a bit odd, but it makes sense, because bail-in also has a very strong  preventive effect. The threat of bail-in has caused banks to increase their buffers  by raising private capital, issuing shares or merging with other banks. In Greece, for example, the threat of bail-in late last year significantly increased private participation in the recapitalisation process of some Greek banks, thereby reducing the public burden. The same can now be seen in Italy. Private solutions are once again preferred.

What do we, the governments, do?

Let me reassure you: it's not all up to you.It's also up to governments. This brings me to the fifth element of the banking union: creating a European deposit insurance scheme once the remaining risks have been sufficiently addressed. I think we politicians should do two things in this respect:

First, we need to finish what we've started.

The banking union is a work in progress and we - the legislators - have to complete it so we have the right framework in place to deal with future crises.

One of the most important next steps is to start working on the Commission's legislative proposals that are expected before the end of the year. They should focus on reducing the risks that still exist. For example:

• They should clarify the quality and quantity of bail-in-able buffers for banks by ensuring that bail-in is possible without material risk of litigation. To achieve this, the creditor hierarchy in Europe needs to be further clarified and harmonised.
• The proposals should also create a level playing field by harmonizing further capital rules for banks by removing the remaining options and discretions.
• The final Basel 3 reforms should be put into practice, especially regarding the leverage ratio. 
• Insolvency laws and practices should be harmonised and strengthened to address banks' problems with non-performing loans, which I have already mentioned.

Another important element in reducing risks in bank balance sheets is the prudential treatment of sovereign exposures to banks. We're still waiting for the Basel Committee's findings, but we'll return to this issue in the future and consider the way forward in Europe, as this will also help to break the vicious circle.

The sooner we achieve these reforms, the sooner we'll be able to work on further steps to share risks. For example by creating a common backstop for the single resolution fund and introducing a European deposit insurance scheme.

The second thing we politicians need to do is stick to what we have agreed.

Over the last few years, we have all learned that saving a continent from financial ruin isn't easy and isn't always popular with voters. So I understand that my colleagues and myself  find it hard to keep doing what's necessary. I understand that it takes determination. But we have to stick to our plan. The road to populism is paved with paralyzed politicians.

European banking supervision and stricter prudential regulation will ensure we address the legacy problems in banks, and prevent the build-up of future risks. Bail-in limits the bank-sovereign nexus and helps set investors' incentives right. That's what we agreed to do. And it's important that we all remain committed. This brings clarity and stability. And that's how we contribute to further economic recovery throughout the eurozone.

Let me conclude. Brexit, globalisation, low interest rates, rising populism: we live in uncertain times. We have a strong common interest is to maintain financial stability and if possible political stability. In order to create opportunities and provide security. That's what people expect. That's what we should deliver.

Thank you.

In the wake of populist successes in the UK and the US, Viviane Gravey examines the prospects for a Front National victory in the upcoming 2017 French presidential election. She argues that, while the institutional structure of French politics would limit the room for manoeuvre of Marine Le Pen, it is ultimately the responsibility of other political actors to provide convincing alternative leadership, rather than solely rely on the checking power of institutions.

République française, lisecher, CC-BY-NC-2.0

After the double shocks of Brexit and Trump’s election, people are wondering when and where the next electoral shock will come. Will it be on 4 December, with the rerun of the Austrian presidential election and the Italian constitutional referendum? Will it come later, in early 2017 with the French presidential election, or in late 2017 with the German General Election? As we ponder where this populist wave will strike next, one key element is often left out of the discussion: the role of political institutions, of constitutional arrangements. Behind the catch-all label of ‘Western democracies’ lies a great diversity of institutional rules, which may limit the success of populist candidates.

This article investigates the role of institutions in stemming (or reinforcing) this populist wave by focusing on France and Marine Le Pen. The leader of the French Front National was propelled further in the media last week – first to discuss Trump’s election on France 2 on Wednesday, second by being invited on the BBC’s Andrew Marr Show on Sunday. But is her election in May 2017 inevitable? And what power would she wield as French President?

French elections are run on a two-round system: the first round of 2017 Presidential election will be on 23 April, with the second round on 7 May (if no candidate receives an absolute majority in the first round, which is unlikely to happen). Only the two candidates with most votes advance to the second round. This system allows for a plurality of views to be aired in the first half of the campaign – in the 2002 Presidential election 16 candidates ran in the first round – and gives voters the opportunity to gather behind their favoured (or least worse of the two) candidate in the second round. There are thus two major differences compared to US presidential elections: a window of 14 days to reconsider; and small parties influencing not the vote share differences between the ‘big two’, but who qualifies for the second round.

The 2002 French election is a case in point. French PM Lionel Jospin’s failure to reach the second round in 2002 was in part explained by left-wing voters choosing to support smaller left-wing parties in the first round. But Jean Marie Le Pen’s failure in the subsequent second round against incumbent French President Jacques Chirac was born out of a mass demonstration against him, and a rise in voter turnout. In the UK and in the US, Brexit and Trump’s election have led to demonstrations – pro-EU, anti-Trump. The French electoral system allows for these demonstrations to take place before the final vote and to galvanise opposition to populist parties.

Let us imagine that these demonstrations are not enough, that tactical voting in the first and second round fails and that Marine Le Pen is elected President in May 2017. What then? The French semi-presidential political system has a strong president (1) as long as the president can work with a government of the same side and (2) under the limits on his/her power set out by the French Constitution and enforced by the French Constitutional Court, the Conseil constitutionnel.

A month after the presidential election, French voters will cast ballots in parliamentary elections for the Assemblée nationale. These are also run in two rounds, and this electoral system has not been kind to the Front National in the past. In 2012, the Front National received 13.6 per cent in the first round (a drop from 17.9 per cent for Marine Le Pen in the first round of the presidential election), but obtained only 2 MPs in the second round.

In contrast to the presidential election, more than two parties can stand in the second round: you can stand as long as you gained more than 12.5 per cent of the popular vote. In many ‘triangular’ second rounds with the Left, Right and Extreme Right, either the Left or Right have stepped aside to allow a clear path to victory against the Extreme Right. In some ways, the Front National’s difficulties in parliamentary elections echoes UKIP’s woes in the 2015 UK General Election.

For the Front National to win a majority and be able to form a government, it would need to win an additional 287 MPs – a very unlikely outcome. No parties have ever agreed to enter into a coalition with the Front National to form a government. The most likely outcome of a Marine Le Pen win in the presidential election would be a cohabitation between a President from one party and a Government from another. This has happened three times since the foundation of the Fifth Republic: in 1986-1988, 1993-1995 and 1997-2002. In this situation, the president’s powers are limited to his/her constitutional prerogatives in the realms of defence and foreign affairs, with very limited influence on day-to-day politics.

Would Le Pen be powerless then, even if President? Not necessarily. As we see in the UK, you have MPs and ministers who voted for ‘Remain’ who are still working to deliver Brexit. With a Le Pen presidency, it may be tempting for a French Government to embrace some of her policies, or at least a watered-down version of them.

Even in this situation, only 60 members of the Assemblée nationale or of the Sénat are needed to refer a law, before it enters into force, to the Conseil constitutionnel. Its 12 members will have to judge whether it respects the constitution. This is key, as not only does the 1958 French Constitution have clear statements on the separation of powers, but the Conseil constitutionnel considers its preamble to have equal constitutional value.

This preamble refers to the 1789 Declaration of the Rights of Man and of the Citizen, the preamble to the 1946 French Constitution (which includes gender equality, asylum rights, rights to unionise…) and even the 2004 Environmental Charter (with the precautionary and polluter pays principle) – which will make it extremely difficult for a Le Pen presidency to contravene human rights; and, conversely, easy for opposition parliamentarians to seriously hamper the implementation of her policies.

In conclusion: institution matters! The global populist wave will impact different countries differently, in part due to their varying institutional and constitutional make-ups. France may well elect Marine Le Pen, but its two-round system makes it much more difficult. Its semi-presidential system, with a strong constitutional watchdog, would clip her wings once in power. But institutions cannot sustainably stem the rise of populism on their own: not only could Le Pen, if President, use her constitutional powers to increase her political power (eg by dissolving the assembly), but a popular party such as Front National repeatedly kept out of power could undermine people’s trust in their institutions. Thus, while institutions offer a safety valve, it is up to civil society, and to the other political parties, to offer compelling alternatives to citizens and make sure that populism does not override them.

Please note that this article represents the views of the author(s) and not those of the UACES Student Forum or UACES.

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Viviane Gravey | @VGravey
Queen’s University Belfast

Dr Viviane Gravey is Lecturer in European Politics at Queen’s University Belfast and co-author of Environmental Europe? She is Chair of the UACES Student Forum and Co-Editor of Crossroads Europe.

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The post Brexit, Trump, Le Pen? How France’s Institutions Will Make It Difficult for Le Pen to Win the Election and Govern appeared first on Ideas on Europe.

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EU Ministers of Foreign and European Affairs meet in Brussels on 16 November 2016 to address cohesion policy by taking stock of the modifications on the common provision regulation and adopting conclusions on results and new elements of the cohesion policy and the European structural and investment funds.

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Source : © European Union, 2016 - EP

An agreement on the EU money market funds regulation has been struck by the European Parliament, Council and Commission, after lengthy negotiations, more than three years after the Commission published the original proposal.
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Source : © European Union, 2016 - EP

An agreement on the EU money market funds regulation has been struck by the European Parliament, Council and Commission, after lengthy negotiations, more than three years after the Commission published the original proposal.
Committee on Economic and Monetary Affairs

Source : © European Union, 2016 - EP