Tag Archives: Member States

Corrupted Politicians, Beware! EU is Watching You!

The Commission has proposed a set of measures to address the harm that corruption causes to European societies. The Commission is setting up a new mechanism, the EU Anti-Corruption Report, to monitor and assess Member States’ efforts against corruption and encourage more political engagement. Supported by an expert group and a network of research correspondents, and the necessary EU budget, the Report will be managed by the Commission and published every two years, starting in 2013. It will identify trends and weaknesses that need to be addressed, as well as stimulate peer learning and exchange of best practices.

How effective will the report be? It’s a very good sign that the EU will have a more focused approach towards diagnosing serious corruption in Member states. But it’s far from certain that ample treatment will follow the diagnosis. If we consider the experience with the reports under the Cooperation and Verification Mechanism for Bulgaria and Romania, it appears that the Commission reports stir a lot of emotions and produce fewer practical results.

Any effort to independently monitor corruption levels in any Member state should be commended. The Commission should also consider benefiting from the existing monitoring mechanisms set up by Transparency International and OECD.

 

 

Commission Proposal for a Common Consolidated Corporate Tax Base

UPDATE: There is a good analysis by four economists in VOX on the impact of the proposed reform. They conclude that it is unlikely that the introduction of the Consolidated Corporate Tax Base would bring significant benefits to the EU in aggregate in terms of employment, GDP or efficiency.

The plans for a common consolidated corporate tax base are not new. However, the Commission has now stepped forward to formally propose the text of a new directive that should introduce a common corporate tax base in the EU. This is one of the measures recently identified in the Pact for the Euro.

The proposal will allow companies that have business activities in different Member States to consolidate their financial results, and to offset the profits in one country against the losses in another, and pay taxes on the net amount only. This is supposed to decrease compliance costs especially for SMEs. However, a recent report by Earnest&Young shows that there will be an average increase of 13% in compliance costs. The report also showed that the impact of the CCCTB apportionment factors was to move taxable profit into Member States with higher tax rates, thus increasing the total tax burden. Some Member States are also opposed to the idea. Unanimity is needed in the Council for adopting such legislation.

Whither Independence of the Commission?

A new trend in the institutional dynamic of the European Commission is evident: its independence, enshrined in the Treaties (art. 17, para 3 TEU; art. 245 TFEU) is waning. The EUobserver reports:

“A group of EU commissioners from smaller Member States is growing increasingly angry with a number of their larger-state colleagues, perceiving their actions as being driven by national interests rather than the greater European good.”

This is a really worrying sign. True, the Commission has often been suspected in the past of succumbing to pressure from larger Member States. And the very procedure of election of commissioners is, after all, subject to compromise by the governments of the Member States themselves. But the independence of the Commission is not a joke, and the repercussions can be very harmful.

But why do we need an independent Commission in the first place? Well, the independence of the Commission is at the heart of the integration method (called, at least until now, the “Community method”). The independence of the Commission guarantees a more objective approach to the integration process that is removed from the political concerns of the separate Member States. That is why the Commission is entitled with exclusive right of legislative initiative. It also implements EU legislation at the Community level and monitors the implementation of EU law at national level by Member States. In other words, the independence of the Commission guarantees that Member States will not be able to bend the integration process in the direction of their own, singular interests.

Now, if some commissioners start to defend the singular interests of the Member States that they come from, we are in trouble. Once the suspicion spreads (as it is spreading right now), all Member States will try to project their interests to the Commission by pressuring their own commissioners. This will destroy the credibility of the Commission, and is also illegal.

In fact at least one author – Jean-Paul Jacqué, has warned that there is a danger of the Commission becoming an intergovernmental institution which is in competition with the Council. One of the checks against this danger has been the empowerment of the European Parliament, but it cannot be expected to mend the problem. The Commission President should work hard to dispel suspicions of wrongdoing, and if necessary – to request the resignations of certain commissioners. Member States should also refrain from unduly pressuring the Commission as in the case of the Roma expulsions from France.

The alleged breach of the principle of independence of the Commission is the most dangerous challenge to the European integration in recent times. Keeping in mind that the European Union is to get new powers of economic governance, such a suspicion can indeed derail the whole integration process once the really tough disputes start.

2009 Report on Monitoring the Application of EU Law

The Commission has published its 2009 Report on Monitoring the Application of EU Law. The report outlines the main trends in the implementation and application of EU law during 2009.

At the end of 2009, the Commission was handling around 2900 complaints and infringement files. Around 77 % of complaints were closed before the first formal step in an infringement proceeding; around a further 12 % of the total were closed before the reasoned opinion and around a further 7 % before a ruling from the ECJ. The average time taken to process infringements, from opening the file to sending the application to the ECJ under Article 258 TFEU, fell from around 27 to 24 months.

According to the Commission late transposition and late reporting continue to constitute a widespread, systematic problem, affecting both technical updating of measures important to EU industry, priority EU policies and measures of interest to individual citizens.

The Commission underscores the use of correlation tables and expert groups for improving its cooperation with Member states on the monitoring of the application of EU law.

The Commission plans a review of its general policy on the registration of complaints and relations with complainants in the light of experience of the new methods now being tested. According to the Commission horizontal instruments, such as SOLVIT and EU Pilot, continue to develop and prove their worth, quickly resolving problems faced by citizens and enterprises.

The Commission also intends to step up the use of inspections in areas such as transport safety and security, where they can play a strong role in confirming the interpretation of the law and ensuring its correct application.

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.

The e-Justice Portal of the European Union is Launched

A new web site dedicated to providing legal information for the Member States and the European Union has been launched. The first version of the European e-Justice portal provides information and links on laws and practices in all Member States. It is intended for use by citizens, businesses, lawyers, notaries and judges. New information, tools and functions will be added to the portal in the next few years.

The portal is a good entry-level point of reference for legal information in the European Union. Much more than that is needed, though, in order to make Member States’ legal systems really transparent.

Sign of the Times

I read in the European Voice that the US and the EU member states are prepared to grant members of the European Parliament more powers of oversight if it approves an interim EU-US data-sharing deal.

This is remarkable, and a sign of the times. Little by little people realize what the Treaty of Lisbon actually means.