Proposals for the Cohesion Policy 2014-2020

The Commission has published its proposals which will frame cohesion policy for 2014-2020. The first part of the proposal sets out common rules governing the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development (EAFRD), and the European Maritime and Fisheries Fund (EMFF). The second part sets out common rules governing the three main funds delivering the objectives of cohesion policy: the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund (CF).

When adopted, the legislation package will establish a common strategic framework for the ERDF, ESF, CF, the EAFRD and EMFF. A Partnership Contract will be agreed between the Commission and each EU Member State, bringing together all the country’s commitments to delivering European objectives and targets. Before funds are paid out, authorities will have to demonstrate that satisfactory strategic, regulatory and institutional frameworks are in place to ensure the funds are used effectively. The release of additional funds will be dependent on performance. Deficiencies in macroeconomic policy (excessive budget deficits, etc.) will lead to suspension of the cohesion financing. Procedures will be simplified and computerised where possible. Eligibility rules for EU funding instruments will be harmonised.

 

 

Commission Proposal for the New Multiannual Financial Framework 2014-2020

The Commission has put forward its proposal for the new Multiannual Financial Framework of the European Union for the period 2014-2020. The Multiannual Financial Framework is the main budgeting document of the EU for the seven-year period, and little can be changed once it is adopted. The proposal has to be approved by the Member States and the Parliament.

The main innovations:

1. Expenses

• A new fund for financing infrastructure, the Connecting Europe Facility that includes a preliminary list of transport, energy and ICT projects;
• Stronger link of cohesion financing with the Europe 2020 objectives;
• New category of ‘transition regions’;
• New conditionality provisions;
• Partnership contracts with each Member State to ensure mutual reinforcement of national and EU funding;
• An integrated programme of €15.2 billion for education, training and youth, with a clear focus on developing skills and mobility;
• A common EU strategy called “Horizon 2020” for investment in research and innovation worth 80 billion €;
• 30% of direct support to farmers will be conditional on “greening” their businesses;
• €4.1 billion for the fight against crime and terrorism and €3.4 billion for migration and asylum policies.

2. Revenues

• New own resources for financing the budget- a financial transaction tax (Tobin tax) and a new modernized VAT;
• Simplification of the existing correction mechanisms.

You can also read the critical assessment of the proposal by Charlemagne. Real Time Brussels looks at the fierce political battles that will likely emerge in the process of adoption of the Multiannual Financial Framework.

 

Two Important Strategies for the Sustainable Development of the European Union

The European Commission has published in the recent days two communications that touch on important aspects of the sustainable economic development of the EU.

The first is a communication on renewable energy and the progress towards the 2020 targets. The communication presents an overview of the renewable energy industry in Europe, its prospects to 2020 and addresses the outstanding challenges for the development of the sector. The Commission points out that renewable energy constituting 62% of 2009 energy generation investments in the EU. Member States projections show that renewable energy will grow at a faster pace in the years up to 2020 than in the past. Combined Member States expect to more than double their total renewable energy consumption from 103 Mtoe in 2005 to 217 Mtoe in 2020. If all the production forecasts are fulfilled, the overall share of renewable energy in the EU will exceed the 20% target in 2020. The Commission suggests that whilst annual capital investment in renewable energy today averages €35bn, this would need to rapidly double to €70bn to ensure the EU achieves its goals.

The second is a communication on the commodity markets and raw materials. This communication was delayed due to the French request to include measures to improve the transparency of financial and commodity markets. The document makes an overview of developments on physical markets of oil, gas, electricity, agricultural commodities and raw materials. The Commission outlines the growing interdependency of financial and commodity markets and then outlines policy measures for the separate physical markets. The communication then outlines the Raw Materials Initiative and describes the 14 critical raw materials – those who have a particularly high risk of supply shortage and are particularly important for the value chain.

 

 

EU Flagship Initiative on Resource Efficiency Launched

The European Commission has launched a very important flagship initiative on resource efficiency under the Europe 2020 Strategy. The Commission believes that increasing resource efficiency will be key to securing growth and jobs for Europe. It will bring major economic opportunities, improve productivity, drive down costs and boost competitiveness.

The most important medium-term policy measures are:

• An energy efficiency plan with a time horizon of 2020 which will identify measures to achieve energy savings of 20% across all sectors, and which will be followed by legislation to ensure energy efficiency and savings;

• Proposals to reform the Common Agricultural Policy, the Common Fisheries Policy, Cohesion Policy, energy infrastructure and trans-European networks for transport in the context of the next EU budget to align these areas with the requirements of a resource-efficient, low-carbon economy;

• A new EU biodiversity strategy for 2020 to halt further loss to and restore biodiversity and ecosystem services in the light of pressures on ecosystems;

• Measures to tackle the challenges in commodity markets and on raw materials which will, amongst others, periodically assess critical raw materials and define a trade policy to ensure sustainable supplies of raw materials from global markets. These measures will promote extraction, recycling, research, innovation and substitution inside the EU;

• A strategy to make the EU a ‘circular economy’, based on a recycling society with the aim of reducing waste generation and using waste as a resource;

• Early action on adaptation to climate change to minimise threats to ecosystems and human health, support economic development and help adjust our infrastructures to cope with unavoidable climate change;

• A water policy that makes water saving measures and increasing water efficiency a priority, in order to ensure that water is available in sufficient quantities, is of appropriate quality, is used sustainably and with minimum resource input, and is ultimately returned to the environment with acceptable quality.

Member States Criticize Proposal on GMO

The Member States have criticized and in fact rejected a proposal by the European Commission on a new type of regulation on genetically modified organisms (GMOs). According to EUobserver both pro-GMO and anti-GMO Member States have objected the newly proposed regime. The Commission proposal provides that the general approval of the GMO will still be made on EU level under current rules, but once GMOs are approved, Member States will be able to decide whether to allow the introduction of the GMOs on their territory or not.

This reaction is not surprising, but the current discord on GMOs must be managed somehow. So the Commission proposal at least provides a starting point for negotiations. Member States should also keep in mind that they need the approval of the European Parliament, where reaching a consensus will also be difficult.

Is the Emissions Trading Scheme Working? Report Says No

The European Emissions Trading Scheme (ETS) is the flagship initiative for curbing carbon emissions in the European Union. A new report says that the ETS is in danger not only of failing the objective for which it was set up – to secure reductions in emissions, but that it could become an environmental hindrance.

The environmental campaigning organization, Sandbag, claims that Phase II of the ETS will result in only 0,3% of reduced carbon emissions. The report blames the poor results on the free awarding of a billion surplus permits to industry and to combustion plant involved in manufacturing. According to the report the largest share of the industrial surpluses accrued to the cement and steel industries, the two sectors which have lobbied most aggressively to weaken the ambition of the scheme and to be afforded special protections from carbon prices which might harm their competitiveness. The report claims that there were distortions of competition on sectoral level: Heidelberg Cement has had a fivefold allocation advantage over its European competitors in the cement industry, while Salzgitter has had fourfold advantage against its European steel competitors. The most important recommendation of the report is to adjust Phase III caps to reflect historic emissions and to avoid contaminating the next phase with the over-allocation of the current one.

Criteria for Good Environmental Status of Sea Waters

The European Commission has adopted a decision outlining the criteria necessary to achieve good environmental status for Europe’s seas. The decision on the criteria for Good Environmental Status of marine waters focuses on different aspects of marine ecosystems including biological diversity, fish population, eutrophication, contaminants, litter and noise.

Member States now have to develop marine strategies which serve as action plans for applying an ecosystem-based approach to the management of human activities.

Do We Need an EU Disaster Response Force?

UPDATE (16.08.2010): French President Nicolas Sarkozy has officially proposed to the European Commission to “build a real EU reaction force … that draws on the resources of the member states”.

The French junior minister for EU affairs, Pierre Lellouche,  calls for a European disaster response force in the context of Russia’s wildfires.

The question is – do we really need such a common EU force? We already have the Community Mechanism for Civil Protection which should coordinate the disaster response of Member States. But I suppose Mr. Lellouche’s point is that current coordination is not enough. Take for example the EU Strategy for Supporting Disaster Risk Reduction in Developing Countries. It is a very important document, and contains a lot of good ideas on creating a strategic framework to guide EU’s disaster risk reduction support to developing countries. However, the Implementation Plan for the strategy is still not published. The Implementation Plan should clarify the key actions, responsibilities, main instruments and the sequencing of implementation for the strategy priorities, and it was due in 2009. The delay is a clear signal that not all is well in EU cooperation on disaster response, and that probably some Member States are reluctant to step further. So even if a disaster response force is necessary, it may not be possible at the moment.

That being said, the future demand for disaster risk reduction and response services will probably grow. The EU must recognize its own important role in providing such services as an effort affecting not only humanitarian, but security issues as well. Further fragmentation of disaster response efforts will be detrimental to the common foreign and security policy objectives of the European Union.

Finally: a New Regime for GMO Approval

The Commission has finally made a proposal on a new regime for the approval of genetically modified organisms (GMO). The Commission proposes to confer to Member States the freedom to allow, restrict or ban the cultivation of Genetically Modified Organisms (GMOs) on part or all of their territory. The general approval of the GMO will still be made on EU level under current rules, but once GMOs are approved, Member States will be able to decide whether to allow the introduction of the GMOs on their territory or not.

After almost 10 years after the adoption of Directive 2001/18/EC the Commission has made a positive step forward for the resolution of this very serious problem. The stalled comitology procedure for the approval of GMOs has been a rare example of systemic institutional failure of the EU (see also the excellent book by Mark Pollack and Gregory Shaffer: When cooperation fails: the international law and politics of genetically modified foods). Now, hopefully, this will change.

Given the fact that both the biotech industry and the environmentalists criticize the proposal, there may be a grain of salt to it.

Commission Decision on Carbon Emission Allowances for 2013

This is important. The Commission has stepped forward to determine the absolute Community-wide quantity of carbon emission allowances for 2013. This means that the total aggregate number of emission allowances issued by all Member States in 2013 should not exceed this number – 1 926 876 368. The Commission has the obligation under Article 9 of Directive 2003/87/EC to publish the absolute Community-wide quantity of allowances for 2013 based on the total quantities of allowances in accordance with the Commission Decisions on the national allocation plans (NAPs) of the Member States for the period from 2008 to 2012.

Now, the problem is that not all NAPs have been approved. In a few cases the Commission has rejected the NAPs, but Member states have contested those decisions before the General Court. Two of the Commission decisions (of Estonia and Poland) have already been repealed by the General Court, and four more – for Latvia, Lithuania, Romania and Bulgaria, are pending at the General Court. Poland has submitted a new NAP that was approved by the Commission, but that leaves five NAPs still not approved.

In that respect the Commission says that changes to the National Allocation Plans as a result of legal proceedings, may be reflected in future adjustments to the Community-wide quantity of allowances for 2013. I am skeptical. I don’t see how this Commission decision can be valid given the absolute procedural requirement for valid and approved NAPs for determining the total quantity of emission allowances for 2013. In other words I have serious doubts about the legality of that Commission decision.