EU news focus

What has Europe done for you? 24-30 March 2014

EU News Focus

We now stand less than two months before the next elections. Keep informed about the EU with us! In this week’s edition, you will particularly read about how the EU institutions act in favour of more transparency in the TTIP negotiations, better infrastructure for clean fuel and transport, more respect for tax systems, and more!

European Parliament

A study reveals that more integration could add up to €800 billion to EU’s GDP

The European Parliament has published a study on the costs of insufficient European integration. These could reach the impressive amount of €800 billion, i.e., 6% of the current total EU GDP. The main area for progress is the single market: establishing the digital single market and totally completing the existing rules in other economic sectors would bring benefits of nearly €500 billion. You may even add a further €50 billion if energy markets are integrated thanks to improved infrastructure. Reforms in the financial sector (completing financial markets, the banking union, common deposit guarantee scheme, improved coordination of fiscal policies) would yield around €160 billion. The TTIP could boost EU’s GDP by €60 billion. Finally, social issues (equal pay, common minimum unemployment insurance scheme in the Eurozone, addressing violence against women and improving information and consultation of workers) would generate over €35 billion, while an upgraded Common Security and Defence Policy would allow for efficiency gains of up to €26 billion.

The whole study is available here.

If you want to read more about the European Parliament’s activity each week, click here.

European Commission

An online public consultation on investor protection in the TTIP

The Commission has launched an online consultation “on investor protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP).” This issue has indeed given rise to public fears that Member States’ right to adopt regulation would be reduced by the investors’ possibility to sue a country. The Commission’s purpose is to more generally clarify the rules on investors’ protection and ISDS in this and future free-trade agreement signed by the EU. ISDS should also become “more transparent and accountable than current practice.” In addition, contrary to the fears stirred up by some opponents to the TTIP, the ISDS would guarantee “the right of governments to legislate in the public interest.”

The consultation will cover “12 key issues of interest, including the right to regulate, fair and equitable treatment for investors, and transparency of the ISDS system.” An explanation will accompany each question to facilitate the participation of every citizen. The questionnaire is already available in English and will be translated in the other official EU languages. It will until the end of a period of 90 days after the last linguistic version has been published.

The negotiations with the USA are led by the Commission on the basis of a mandate unanimously granted by Member States. The European Parliament and the Council oversee the negotiations to ensure democratic accountability and will vote on the proposal of agreement.

You can access the consultation by clicking here. Other documents of interest are a factsheet and a Memo on investment protection and ISDS in EU agreements.

A “roadmap to meet the long-term financing needs of the European economy”

The Europe 2020 strategy and the 2030 climate and energy package will require massive investments, in particular in infrastructure, innovation and R&D, in sectors like transport, energy and telecommunications. Networks of EU importance alone could require €1 trillion between now and 2020. However, the crisis has left marks: because banks aim at sounder balance sheets and need to meet new capital requirements, they are lending much less to economic operators in the real economy. The Commission wants institutional investors to restore lending to the real economy, in particular SMEs who often suffer from credit shortages. The Commission also wants to diversify financing sources. The EU and national budgets shall also contribute to easing the lack of available funds.

Apart from the communication on the long-term financing of the economy, the package includes “a proposal to revise the rules for occupational pension funds” (revision of Directive 2003/41/EC) and “a communication on crowdfunding to offer alternative financing options for SMEs.” The package relies on six main pillars: 1) “mobilising private sources [including those of occupational pension funds] on long term financing”; 2) “making better use of public funding”, including promotional banks and export credit schemes; 3) “developing European capital markets”, in particular with a view to facilitating SME’s access to this form of financing; 4) improving SME’s access to financing”, including through the development and monitoring of crowdfunding; 5) “attracting private finance to infrastructure to deliver on Europe 2020;” and 6) “enhancing the wider framework for sustainable finance” (this pillar includes issues regarding corporate governance).

If you want to know more about the Commission’s action, click here.

Council / European Council

Rules on infrastructure for alternative (clean) fuel

If the EU wants to develop the demand for clean cars (those powered with electricity, hydrogen or natural gas), one hurdle to overcome is the lack of infrastructure for refuelling. Developing clean fuel would not only benefit the environment but would also reduce the European oil bill. So, under the directive adopted this week by the Council, the Commission would be in charge of coordinating “national policy frameworks” on the development of clean fuel infrastructure. The text also sets a number of minimum targets and deadlines for Member States, e.g., regarding electricity for cars, there should be by the end of 2020 1 recharge point for +/- 10 electric cars at least in cities and suburban areas. Other targets deal with electricity for ships, hydrogen, LNG (liquefied natural gas) for ships, LNG for trucks and compressed natural gas. Furthermore, technical standards would be common to all Member States to facilitate interoperability. In addition, users should be better informed about their refuelling opportunities. Finally, the Council expects most infrastructures to be financed by private investments, but public money may provide some support (respecting State aid rules). To enter into force, the text will have to be approved by both the EP and the Council.

A reform of the directive on the taxation of savings income (2003/48/EC)

Luxembourg and Austria had refused automatic exchange of information for years, because they did not want to be treated worse than Switzerland and other small European States heavily relying on financial activities. After having obtained guarantees in this regard, they dropped their objection. The reform of this week enlarges the scope of the Savings Directive to cover “new types of savings income and products that generate interest or equivalent income,” including life insurance contracts. Tax authorities should also make more efforts to identify the people ultimately benefiting from an interest payment. This reform forms part of several moves to tackle tax fraud, tax evasion and money laundering.

More information about the Council’s work can be found here; for the European Council, click here).

Court of Justice of the European Union

Combining freedom to conduct a business, freedom of information of Internet users and protection of intellectual property (case C-314/12, UPC Telekabel Wien)

Two companies realised that the rights they were holding to several films were made available on a website without their consent. At their request, Austrian courts prohibited UPC Telekabel Wien (hereafter UPC), “an internet service provider (‘ISP’) established in Austria, from providing its customers with access to that site.” UPC challenged these decisions on the grounds that “it did not have any business relationship with the operators of and it was never established that its own customers acted unlawfully.” Moreover, the compliance costs would be excessive and the measures could anyway be technically circumvented.

The CJEU was asked to determine whether the Copyrights Directive (2001/29/EC) applied to the case. The Court answered that UPC was “an intermediary whose services are used to infringe a copyright”, and that the directive “does not require a specific relationship between the person infringing copyright and the intermediary against whom an injunction may be issued.” The absence of proof that UPC’s clients had accessed the website was irrelevant as well for the purpose of applying the directive.

Moreover, the CJEU was also asked whether the Austrian courts’ decisions were compatible with fundamental rights guaranteed by the EU, when these decisions do not “specify the measures which the ISP must take and when that ISP can avoid incurring coercive penalties for breach of the injunction by showing that it has taken all reasonable measures.” The Court noted that these decisions, aimed at protecting intellectual property rights, could interfere with the freedom to conduct a business and the freedom of information. The Court then went on saying that flexibility left to UPC to determine the adequate measures to implement the Austrian court’s judgment ensured that “the very substance” of the freedom to conduct a business was not infringed. The Court concludes that fundamental rights are not infringed provided that an injunction to block access to a website respects the following two conditions: “: (i) that the measures taken by the ISP do not unnecessarily deprive users of the possibility of lawfully accessing the information available and (ii) that those measures have the effect of preventing unauthorised access to the protected subject-matter or, at least, of making it difficult to achieve and of seriously discouraging users from accessing the subject-matter that has been made available to them in breach of the intellectual property right.”

If you are interested in learning about more European Court’s judgments, click here.

Pierre-Antoine KLETHI

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