# Official Journal C 275/18 J

| | ISSN 1977-091X |
| --- | --- |
| Official Journal
  of the European Union | C 275 |
| | |
| English edition | Information and Notices | Volume 6518 July 2022 |

ISSN 1977-091X

Official Journal

of the European Union

C 275

English edition

Information and Notices

Volume 6518 July 2022

---

| Contents | page |
| --- | --- |
| | I   Resolutions, recommendations and opinions |
| | OPINIONS |
| | European Economic and Social Committee |
| | 567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022 |
| 2022/C 275/01 | Opinion of the European Economic and Social Committee on tourism and transport – Follow-up (Own-initiative opinion) | 1 |
| 2022/C 275/02 | Opinion of the European Economic and Social Committee on The impact of COVID-19 on fundamental rights and the rule of law across the EU and the future of democracy (own-initiative opinion) | 11 |
| 2022/C 275/03 | Opinion of the European Economic and Social Committee on The social challenges of greening maritime and inland waterway transport (Own-initiative opinion) | 18 |

Contents

page

I   Resolutions, recommendations and opinions

OPINIONS

European Economic and Social Committee

567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022

2022/C 275/01

Opinion of the European Economic and Social Committee on tourism and transport – Follow-up (Own-initiative opinion)

1

2022/C 275/02

Opinion of the European Economic and Social Committee on The impact of COVID-19 on fundamental rights and the rule of law across the EU and the future of democracy (own-initiative opinion)

11

2022/C 275/03

Opinion of the European Economic and Social Committee on The social challenges of greening maritime and inland waterway transport (Own-initiative opinion)

18

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| | III   Preparatory acts |
| --- | --- |
| | European Economic and Social Committee |
| | 567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022 |
| 2022/C 275/04 | Opinion of the European Economic and Social Committee on Proposal for a Council recommendation on a Pact for Research and Innovation in Europe (COM(2021) 407 final – final 2021/230 (NLE)) | 24 |
| 2022/C 275/05 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Missions (COM(2021) 609 final) | 30 |
| 2022/C 275/06 | Opinion of the European Economic and Social Committee on Proposal for a Directive of the European Parliament and of the Council amending Directives 2001/20/EC and 2001/83/EC as regards derogations from certain obligations concerning certain medicinal products for human use made available in the United Kingdom in respect of Northern Ireland, as well as in Cyprus, Ireland and Malta [COM(2021) 997 final — 2021/0431 (COD)] Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 536/2014 as regards a derogation from certain obligations concerning investigational medicinal products made available in the United Kingdom with respect to Northern Ireland as well as in Cyprus, Ireland and Malta [COM(2021) 998 final — 2021/0432 (COD)] | 36 |
| 2022/C 275/07 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament and the Council Business Taxation for the 21st Century (COM(2021) 251 final) | 40 |
| 2022/C 275/08 | Opinion of the European Economic and Social Committee on Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision (COM(2021) 581 final – 2021/0295 (COD)) Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012 (COM(2021) 582 final – 2021/0296 (COD)) | 45 |
| 2022/C 275/09 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank – Annual Sustainable Growth Survey 2022 [COM(2021) 740 final] | 50 |
| 2022/C 275/10 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – Introducing HERA, the European Health Emergency Preparedness and Response Authority (COM(2021) 576 final) | 58 |
| 2022/C 275/11 | Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the statute and funding of European political parties and European political foundations (recast) (COM(2021) 734 final – 2021/0375 (COD)) Proposal for a Regulation of the European Parliament and of the Council on the transparency and targeting of political advertising (COM(2021) 731 final – 2021/0381 (COD)) | 66 |
| 2022/C 275/12 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – New European Bauhaus: Beautiful, Sustainable, Together (COM(2021) 573 final) | 73 |
| 2022/C 275/13 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Tackling rising energy prices: a toolbox for action and support (COM(2021) 660 final) | 80 |
| 2022/C 275/14 | Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 (COM(2021) 706 final – 2021/0366(COD)) | 88 |
| 2022/C 275/15 | Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) 2020/1056 (COM(2021) 709 final – 2021/0367 (COD)) | 95 |
| 2022/C 275/16 | Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Fit for 55: delivering the EU’s 2030 Climate Target on the way to climate neutrality [COM(2021) 550 final] | 101 |
| 2022/C 275/17 | Opinion of the European Economic and Social Committee on Proposal for a Council Directive amending Directive 2008/118/EC and Directive (EU) 2020/262 (recast) as regards tax-free shops situated in the French terminal of the Channel Tunnel [COM(2021) 817 final — 2021/0418 (CNS)] | 108 |
| 2022/C 275/18 | Opinion — European Economic and Social Committee — Proposal for a Directive of the European Parliament and of the Council laying down for certain road vehicles circulating within the Union the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic (codification) [COM(2021) 769 final – 2021/0400 (COD)] | 109 |

III   Preparatory acts

European Economic and Social Committee

567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022

2022/C 275/04

Opinion of the European Economic and Social Committee on Proposal for a Council recommendation on a Pact for Research and Innovation in Europe (COM(2021) 407 final – final 2021/230 (NLE))

(COM(2021) 407 final – final 2021/230 (NLE))

24

2022/C 275/05

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Missions (COM(2021) 609 final)

(COM(2021) 609 final)

30

2022/C 275/06

Opinion of the European Economic and Social Committee on Proposal for a Directive of the European Parliament and of the Council amending Directives 2001/20/EC and 2001/83/EC as regards derogations from certain obligations concerning certain medicinal products for human use made available in the United Kingdom in respect of Northern Ireland, as well as in Cyprus, Ireland and Malta [COM(2021) 997 final — 2021/0431 (COD)] Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 536/2014 as regards a derogation from certain obligations concerning investigational medicinal products made available in the United Kingdom with respect to Northern Ireland as well as in Cyprus, Ireland and Malta [COM(2021) 998 final — 2021/0432 (COD)]

[COM(2021) 997 final — 2021/0431 (COD)]

[COM(2021) 998 final — 2021/0432 (COD)]

36

2022/C 275/07

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament and the Council Business Taxation for the 21st Century (COM(2021) 251 final)

(COM(2021) 251 final)

40

2022/C 275/08

Opinion of the European Economic and Social Committee on Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision (COM(2021) 581 final – 2021/0295 (COD)) Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012 (COM(2021) 582 final – 2021/0296 (COD))

(COM(2021) 581 final – 2021/0295 (COD))

(COM(2021) 582 final – 2021/0296 (COD))

45

2022/C 275/09

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank – Annual Sustainable Growth Survey 2022 [COM(2021) 740 final]

[COM(2021) 740 final]

50

2022/C 275/10

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – Introducing HERA, the European Health Emergency Preparedness and Response Authority (COM(2021) 576 final)

(COM(2021) 576 final)

58

2022/C 275/11

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the statute and funding of European political parties and European political foundations (recast) (COM(2021) 734 final – 2021/0375 (COD)) Proposal for a Regulation of the European Parliament and of the Council on the transparency and targeting of political advertising (COM(2021) 731 final – 2021/0381 (COD))

(COM(2021) 734 final – 2021/0375 (COD))

(COM(2021) 731 final – 2021/0381 (COD))

66

2022/C 275/12

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – New European Bauhaus: Beautiful, Sustainable, Together (COM(2021) 573 final)

(COM(2021) 573 final)

73

2022/C 275/13

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Tackling rising energy prices: a toolbox for action and support (COM(2021) 660 final)

(COM(2021) 660 final)

80

2022/C 275/14

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010 (COM(2021) 706 final – 2021/0366(COD))

(COM(2021) 706 final – 2021/0366(COD))

88

2022/C 275/15

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) 2020/1056 (COM(2021) 709 final – 2021/0367 (COD))

(COM(2021) 709 final – 2021/0367 (COD))

95

2022/C 275/16

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Fit for 55: delivering the EU’s 2030 Climate Target on the way to climate neutrality [COM(2021) 550 final]

[COM(2021) 550 final]

101

2022/C 275/17

Opinion of the European Economic and Social Committee on Proposal for a Council Directive amending Directive 2008/118/EC and Directive (EU) 2020/262 (recast) as regards tax-free shops situated in the French terminal of the Channel Tunnel [COM(2021) 817 final — 2021/0418 (CNS)]

[COM(2021) 817 final — 2021/0418 (CNS)]

108

2022/C 275/18

Opinion — European Economic and Social Committee — Proposal for a Directive of the European Parliament and of the Council laying down for certain road vehicles circulating within the Union the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic (codification) [COM(2021) 769 final – 2021/0400 (COD)]

[COM(2021) 769 final – 2021/0400 (COD)]

109

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| EN | |
| --- | --- |

EN

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I Resolutions, recommendations and opinions

OPINIONS

European Economic and Social Committee

567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022

| 18.7.2022 | EN | Official Journal of the European Union | C 275/1 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/1

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Opinion of the European Economic and Social Committee on tourism and transport – Follow-up

(Own-initiative opinion)

(2022/C 275/01)

| Rapporteur: | Panagiotis GKOFAS |
| --- | --- |

Rapporteur:

Panagiotis GKOFAS

| Plenary Assembly decision | 25.3.2021 |
| --- | --- |
| Legal basis | Rule 32(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 3.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 185/2/7 |

Plenary Assembly decision

25.3.2021

Legal basis

Rule 32(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

Single Market, Production and Consumption

Adopted in section

3.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

185/2/7

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) praises the EU institutions’ extraordinary joint efforts in 2021, with their policy proposals and measures geared towards helping businesses recover and securing jobs in the European tourism, transport and travel sectors, which are the ecosystems that have been most affected by the COVID-19 pandemic (1). However, the impact of the pandemic and the consequences for the economy and society are not yet fully apparent. Significant efforts must be made to ensure that a coordinated EU approach continues to be taken in the coming months, with clear support for SMEs in terms of credit and finance, as well as information on vaccination, and safety measures to ensure safe tourism, travel and transport and gradually restore tourist flows (by implementing the European Tourism Indicator System (ETIS) and safety for tourism (2)). |
| --- | --- |

1.1.

| 1.2. | Tourism will not return to its pre-pandemic level: global interdependency, and greener and more digital tendencies in consumer behaviour will determine new business models. The EESC considers that the short-, medium- and long-term measures needed at EU and Member State/regional level are: |
| --- | --- |

1.2.

| 1.2.1. | Short term:






  — | Ensuring that the EU’s and the Member States’ Recovery Plans properly consider the hotel, restaurant and catering (HORECA) sector and micro SMEs, across the tourism spectrum, especially restaurants, in order to ensure their survival. The EU and national governments need to fully support urgent financial support measures, direct-finance initiatives and the State Aid Temporary Framework beyond 2022. |
| --- | --- | --- |

1.2.1.

—

Ensuring that the EU’s and the Member States’ Recovery Plans properly consider the hotel, restaurant and catering (HORECA) sector and micro SMEs, across the tourism spectrum, especially restaurants, in order to ensure their survival. The EU and national governments need to fully support urgent financial support measures, direct-finance initiatives and the State Aid Temporary Framework beyond 2022.

| — | Safeguarding financial support measures for micro SMEs, in particular those in the HORECA sector, extending EU and national funding for as long as necessary and beyond December 2022 and not underestimating the impact that the current staffing crisis will have on the pace of the recovery. |
| --- | --- |

—

Safeguarding financial support measures for micro SMEs, in particular those in the HORECA sector, extending EU and national funding for as long as necessary and beyond December 2022 and not underestimating the impact that the current staffing crisis will have on the pace of the recovery.

| — | Extending the SURE programme for 2022 and postponing all tax liabilities towards authorities, including those generated during the pandemic, especially for HORECA micro SMEs. |
| --- | --- |

—

Extending the SURE programme for 2022 and postponing all tax liabilities towards authorities, including those generated during the pandemic, especially for HORECA micro SMEs.

| — | Establishing a specific tourism budget in the multiannual financial framework (MFF) and improving conditions and harmonised procedures for accessing funds under National Recovery and Resilience Plans (NRRPs): e.g. digitalising and transforming infrastructure in a more sustainable way, applying the ‘think small first’ and ‘once-only’ principles, including in practice micro businesses with low bureaucracy procedures, and introducing transparent calls for tenders for tourism businesses and local tourist authorities (3). |
| --- | --- |

—

Establishing a specific tourism budget in the multiannual financial framework (MFF) and improving conditions and harmonised procedures for accessing funds under National Recovery and Resilience Plans (NRRPs): e.g. digitalising and transforming infrastructure in a more sustainable way, applying the ‘think small first’ and ‘once-only’ principles, including in practice micro businesses with low bureaucracy procedures, and introducing transparent calls for tenders for tourism businesses and local tourist authorities (3).

| — | Implementing prerequisites for the integration of tourism and transport micro SMEs into the banking system and financing sector through EU guarantee schemes from the EU and the ECB. |
| --- | --- |

—

Implementing prerequisites for the integration of tourism and transport micro SMEs into the banking system and financing sector through EU guarantee schemes from the EU and the ECB.

| — | Improving coordination throughout Europe, better harmonising (SME-friendly) health and safety protocols, facilitating travel for the public and EU businesses in non-EU countries, keeping borders open, minimising restrictions for travellers and increasing the number of coordination strategies and plans among EU and national governments, to restore international tourism flows and foreign direct investments. |
| --- | --- |

—

Improving coordination throughout Europe, better harmonising (SME-friendly) health and safety protocols, facilitating travel for the public and EU businesses in non-EU countries, keeping borders open, minimising restrictions for travellers and increasing the number of coordination strategies and plans among EU and national governments, to restore international tourism flows and foreign direct investments.

| — | Encouraging all EU institutions, social partners, civil society organisations, and research and academic bodies to contribute to holding a ‘Year of Sustainable Tourism’ in 2022 and to promoting a network of EU exhibitions and fairs on sustainable tourism and transport in international markets. |
| --- | --- |

—

Encouraging all EU institutions, social partners, civil society organisations, and research and academic bodies to contribute to holding a ‘Year of Sustainable Tourism’ in 2022 and to promoting a network of EU exhibitions and fairs on sustainable tourism and transport in international markets.

| — | Introducing a ‘tourism’ line in all TEN-T projects — European transport corridors. |
| --- | --- |

—

Introducing a ‘tourism’ line in all TEN-T projects — European transport corridors.

| — | Introducing a harmonised reduced VAT rate system for the entire hospitality and tourism sector, which must be SME-friendly and have transparent procedures, funding access tools and procedures (one-stop shop, online tools, twinning programmes with representative SME organisations) and a specific budget line for micro SMEs in particular. |
| --- | --- |

—

Introducing a harmonised reduced VAT rate system for the entire hospitality and tourism sector, which must be SME-friendly and have transparent procedures, funding access tools and procedures (one-stop shop, online tools, twinning programmes with representative SME organisations) and a specific budget line for micro SMEs in particular.

| — | Setting up an ombudsman/authority to supervise the implementation of the EU recovery measures, and access to liquidity, in particular for micro and small businesses in the tourism and transportation sector, and other specific duties. (4) |
| --- | --- |

—

Setting up an ombudsman/authority to supervise the implementation of the EU recovery measures, and access to liquidity, in particular for micro and small businesses in the tourism and transportation sector, and other specific duties. (4)

| — | Developing an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027). |
| --- | --- |

—

Developing an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027).

| 1.2.2. | Medium term:






  — | Avoiding over-indebtedness and the loss of businesses’ creditworthiness (5). |
| --- | --- | --- |

1.2.2.

—

Avoiding over-indebtedness and the loss of businesses’ creditworthiness (5).

| — | Authorising a task force to supervise the implementation and impact of the recovery measures, in particular those directed at micro and small businesses in the tourism and transportation sector. |
| --- | --- |

—

Authorising a task force to supervise the implementation and impact of the recovery measures, in particular those directed at micro and small businesses in the tourism and transportation sector.

| — | Monitoring Member States’ NRRPs, making sure tourism-related reforms have been included. |
| --- | --- |

—

Monitoring Member States’ NRRPs, making sure tourism-related reforms have been included.

| — | Creating an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027). |
| --- | --- |

—

Creating an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027).

| — | Establishing a specific EU budget line for tourism, reflecting both the importance of this ecosystem and its needs in the aftermath of the COVID-19 crisis. |
| --- | --- |

—

Establishing a specific EU budget line for tourism, reflecting both the importance of this ecosystem and its needs in the aftermath of the COVID-19 crisis.

| — | Creating a strong ‘European Tourism Alliance’ to pool initiatives and optimise funding. The EESC must be meaningfully involved in this alliance. |
| --- | --- |

—

Creating a strong ‘European Tourism Alliance’ to pool initiatives and optimise funding. The EESC must be meaningfully involved in this alliance.

| 1.2.3. | Long term:






  — | Developing a long-term EU tourism strategic plan: accelerating the transition towards a resilient and more sustainable tourism business model, e.g. SME inclusion in public/private partnerships. |
| --- | --- | --- |

1.2.3.

—

Developing a long-term EU tourism strategic plan: accelerating the transition towards a resilient and more sustainable tourism business model, e.g. SME inclusion in public/private partnerships.

| — | Prioritising vocational and educational training for SMEs at national/regional level while enhancing apprenticeship mobility programmes in the tourism and transportation sectors, focusing on digital and sustainability skills (6), in particular in new destinations and remote areas. |
| --- | --- |

—

Prioritising vocational and educational training for SMEs at national/regional level while enhancing apprenticeship mobility programmes in the tourism and transportation sectors, focusing on digital and sustainability skills (6), in particular in new destinations and remote areas.

| — | Formulating ‘Next Generation’ EU tourism and transport policies that can ensure predictability and generate confidence for a sustainable recovery. |
| --- | --- |

—

Formulating ‘Next Generation’ EU tourism and transport policies that can ensure predictability and generate confidence for a sustainable recovery.

| — | Developing new forms of financing for micro businesses, in particular HORECA and women-led businesses, addressing contemporary challenges (7) and recovering from the impact of the COVID-19 pandemic, and examining how best to support these businesses, as proposed by HM Queen Máxima of the Netherlands and by the GPFI (8). |
| --- | --- |

—

Developing new forms of financing for micro businesses, in particular HORECA and women-led businesses, addressing contemporary challenges (7) and recovering from the impact of the COVID-19 pandemic, and examining how best to support these businesses, as proposed by HM Queen Máxima of the Netherlands and by the GPFI (8).

| 1.3. | The EESC considers that most of the recommendations set out in its opinion of 18 September 2020 on Tourism and transport in 2020 and beyond (9) are still coherent and relevant and that they were not sufficiently taken into consideration by the European Commission in its plans and consultations. |
| --- | --- |

1.3.

| 1.4. | The EESC asks EU/Member State/regional institutions, social partners and wider civil society organisations if they are committed to relaunching investments in the long term by taking a comprehensive approach in order to support the construction of a blue economy framework and a joint tourist agenda for 2030/2050, identify appropriate funding pathways and extend credit, since there will be no cash flow for tourism SMEs after the pandemic. Under these conditions, it is impossible for SMEs to invest in the blue economy until they have recovered and can pay their liabilities. |
| --- | --- |

1.4.

| 1.5. | It is critical that new policies be introduced, allocating sufficient financial resources to save the sector, and that a long-term sustainable, smart and responsible European tourism policy be developed. Moreover, the EESC stresses the importance of having a specific EU budget line for tourism and ensuring proper governance in order to implement strategic policy actions, including creating a European Tourism Agency to carry out the following activities:






  — | create a European common data area to make more data available for use; |
| --- | --- | --- |

1.5.

—

create a European common data area to make more data available for use;

| — | implement a European statistical programme gathering metrics to properly track tourism policies, and promote an exchange of EU good practices and curricula in sustainable tourism (e.g. an EU SME Sustainable Tourism Academy); |
| --- | --- |

—

implement a European statistical programme gathering metrics to properly track tourism policies, and promote an exchange of EU good practices and curricula in sustainable tourism (e.g. an EU SME Sustainable Tourism Academy);

| — | relaunch EU international collaboration with the UN World Tourism Organization (UNWTO), the OECD and the G20 Tourism Working Group, with the creation of an EU tourism academy specifically for SMEs and ‘train the trainers’ programmes, in line with the standards of the aforementioned organisations. |
| --- | --- |

—

relaunch EU international collaboration with the UN World Tourism Organization (UNWTO), the OECD and the G20 Tourism Working Group, with the creation of an EU tourism academy specifically for SMEs and ‘train the trainers’ programmes, in line with the standards of the aforementioned organisations.

| 1.6. | The EESC is in favour of taking a more comprehensive policy approach and seeking sustainable solutions to safeguard the future of tourism and transport based on the following three main requirements and opportunities:






  — | restore confidence and enable recovery to facilitate a gradual re-opening of travel and common transport connectivity within the EU as well as with non-EU countries; |
| --- | --- | --- |

1.6.

—

restore confidence and enable recovery to facilitate a gradual re-opening of travel and common transport connectivity within the EU as well as with non-EU countries;

| — | learn from the experience of the pandemic and the practices introduced, adopt a specific set of (SME-friendly) indicators, and harmonise data on both the pandemic’s impact on the tourism and transport sector and the pandemic-related trends in this sector at EU, regional and international level; |
| --- | --- |

—

learn from the experience of the pandemic and the practices introduced, adopt a specific set of (SME-friendly) indicators, and harmonise data on both the pandemic’s impact on the tourism and transport sector and the pandemic-related trends in this sector at EU, regional and international level;

| — | prioritise a sustainable development agenda to provide long-term guidance for future EU/international tourism. |
| --- | --- |

—

prioritise a sustainable development agenda to provide long-term guidance for future EU/international tourism.

| 1.7. | The EESC proposes setting up a permanent EU or national high-level expert ‘Micro and Small Business Liquidity and Investment Task Force’, including the tourism and transportation ecosystems, that could facilitate and support the implementation of the recovery measures and act as an EU monitoring mechanism with the necessary independent and transparent data on micro SME liquidity flows and their access to funds. |
| --- | --- |

1.7.

| 1.8. | The EESC encourages the EU institutions, Member States, regions and EU/national social partners to have a major rethink, to deploy joint quality programmes and more effective rescEU and disaster risk reduction policy tools, and to exchange best practices on involving civil society in crisis management and in preventing human and economic losses (10). |
| --- | --- |

1.8.

| 1.9. | The EESC believes that, without consumers’ trust, the tourism and travel industry will lag behind the overall economic revival trend. A key factor in regaining this trust and confidence is ensuring strong protection of consumer rights under the Directive on package travel and linked travel arrangements (PTD) (11), the review of which should focus on removing weaknesses in EU legislation on travellers’ rights, as the pandemic demonstrated. |
| --- | --- |

1.9.

| 1.10. | Despite EU travel laws giving travellers the right to a monetary refund, numerous Member States have implemented national emergency measures in direct contradiction of this right by forcing consumers to accept vouchers and/or by lengthening the statutory deadlines for refunds. It is essential that EU law be both observed and enforced. The pandemic, after almost two years, has had a direct and disastrous financial effect on tourism businesses too, particularly micro SMEs. |
| --- | --- |

1.10.

| 1.11. | The EESC therefore calls on the Commission to explore the feasibility of a proposal to adapt the Directive in such a way that in future cases of force majeure/act of God situations like the pandemic, collective guarantee funds are put in place by Member States in order to take better account of tourism businesses’ survival interests while fully ensuring that consumers are properly compensated. |
| --- | --- |

1.11.

2.   Introduction and general comments

| 2.1. | EU and global tourism will not return to its pre-pandemic level. The impact of the pandemic and its consequences for societies and the economy are not yet fully apparent. Before COVID-19, tourism directly or indirectly accounted for nearly 10 % of the EU’s GDP, provided about 22,6 million jobs and made the EU the world’s leading tourism destination, with 563 million international arrivals and 30 % of global profits in 2018. With 30 % of international arrivals in 2018, the EU was the most popular tourist destination in the world. There were more than 600 000 tourist establishments in the EU-27 in 2018 and bookings for overnight accommodation totalled 1 326 049 994 nights. |
| --- | --- |

2.1.

| 2.2. | The European Commission’s Joint Research Centre (JRC) estimated that tourism industries are responsible for more than 6 % of total EU employment. Furthermore, tourism contributes much more to employment in some regions and is often the only form of employment for low-skilled workers. For example, in Crete (Greece), Jadranska Hrvatska (Croatia), Valle d’Aosta (Italy) and the Canary Islands (Spain), tourism accounts for more than 30 % of total regional employment. |
| --- | --- |

2.2.

| 2.3. | After various post-pandemic waves in 2020 and 2021, we can now see the magnitude of COVID-19’s impact on employment and the devastating social consequences in the tourism and transport sectors: a lack of international tourism, insufficient and fragile demand for tourism-related goods/services (due to consumption models and behavioural changes in tourism in times of COVID-19), a growing number of business failures and growing indebtedness (which is not just limited to tourism companies), difficulties accessing liquidity measures and ineffective responses from public administrations. The so-called stop-and-go reopening measures, the misuse of green pass restriction measures and the inability of independent authorities to guarantee homogeneous tourist/traveller and business rights, the complexity and often lack of reliable information on the actual local health and safety situation for tourists, and the complex bureaucratic procedures for intra-mobility within the EU’s internal borders are also not helping to restore cross-border mobility and stimulate economic recovery. |
| --- | --- |

2.3.

| 2.4. | It is worth mentioning that, according to the recent European Parliamentary Research Service (EPRS) report (12), the impact of the COVID-19 pandemic on various tourism destinations in the European Union is ‘asymmetrical and highly localised’. |
| --- | --- |

2.4.

| 2.5. | As seen from EPRS report Figures 1 and 2, during the pandemic, tourism’s contribution to employment and GDP reduced considerably. In Italy, for example, tourism’s contribution to GDP halved in 2020 (compared with 2019), dropping from 13,1 % to 7 %, and 337 000 jobs were lost. Compared with the United States, several EU Member States (e.g. Germany, Italy and France) saw a bigger loss in terms of GDP but suffered less in terms of employment. |
| --- | --- |

2.5.

| 2.6. | Twenty-one months after the pandemic began in Europe, global tourism and transportation ecosystems are still all facing an unprecedented crisis (13). |
| --- | --- |

2.6.

| 2.7. | In the EU, we have also seen ‘new’ commuting and shopping patterns in urban areas, adapted to government-imposed travel restrictions, such as increased walking, cycling, car travel and online shopping, at the expense of travelling by public transport. In many EU countries, as a result of COVID-19 restrictions, older people in particular have not been able to feed demand for seasonal tourism and transport. |
| --- | --- |

2.7.

| 2.8. | Travel by rail, cruise liner, passenger ship and aeroplane have suffered, in line with a 70 % drop in international tourism demand, leading to revenue and job losses in both sectors and the sectors that depend on them (e.g. industrial and retail sectors). Although the impact on freight transport have thus far been modest, the sector is expected to shrink in the coming years, especially if the economy is in recession. Therefore, these sectors should receive appropriate consideration in the EU’s and the Member States’ recovery plans. |
| --- | --- |

2.8.

| 2.9. | As well as these phenomena, the recent fires in southern Europe and flooding in northern Europe also showed — beyond the tragic human and economic losses — how conventional policies and the existing fragile rescEU mechanism are not delivering the expected results and have proven to be unfit for long-term sustainable development models. |
| --- | --- |

2.9.

3.   For ‘Next Generation’ EU tourism and transport policies

| 3.1. | A new ‘Next Generation’ approach is required, one that is more harmonised and based on European and national policy options for short-, medium- and long-term resilience and the full recovery of tourism and transport. Key shared principles should be at the centre of a new EU political, social and economic agenda to:






  — | restore confidence in the EU’s tourism and transportation ecosystems (which are mainly made up of micro SMEs and self-employed people) among workers, members of the public, tourists/travellers, and EU/global private and public investors; |
| --- | --- | --- |

3.1.

—

restore confidence in the EU’s tourism and transportation ecosystems (which are mainly made up of micro SMEs and self-employed people) among workers, members of the public, tourists/travellers, and EU/global private and public investors;

| — | help to rethink the existing EU tourism and transport industry ecosystems to promote resilience and recovery towards a ‘triple transition’ (health, digital, green); |
| --- | --- |

—

help to rethink the existing EU tourism and transport industry ecosystems to promote resilience and recovery towards a ‘triple transition’ (health, digital, green);

| — | get back to pre-COVID-19 levels of demand, and promote new investments that are affordable for SMEs in sustainable and long-term growth in the sectors beyond 2021-2027. |
| --- | --- |

—

get back to pre-COVID-19 levels of demand, and promote new investments that are affordable for SMEs in sustainable and long-term growth in the sectors beyond 2021-2027.

| 3.2. | The European Commission’s recent Fit for 55 package enables the EU to achieve the continent’s greenhouse gas emission reduction targets enshrined in the European Climate Law. The package’s proposals also affect European transport and tourism ecosystems. Unless these measures are designed with the right policy in mind, the proposals will not lead to ‘Next Generation’ EU tourism and transport policies. On the contrary, the proposed measures could lead to significant regulatory cost increases for EU businesses, both large and small, and could harm their competitiveness vis-à-vis non-EU transportation and tourism companies located around EU borders, thereby putting EU jobs in these sectors at risk. EU regions highly dependent on tourism would consequently be particularly hard hit. A new ‘Next Generation’ approach should therefore pay attention to the cost impact of this legislative package for European transport and tourism ecosystems and ensure that their (international) competitiveness will not be harmed. Only in this way can European employment and competitiveness be safeguarded, carbon leakage be avoided and the success of the new ‘Next Generation’ approach be guaranteed. |
| --- | --- |

3.2.

4.   A good start: a new EU awareness

| 4.1. | Full use of the flexibility of the State Aid Temporary Framework should be guaranteed until the end of 2022 and the important unemployment programme SURE should be operational for the same period. Nevertheless, social actors and SME organisations should be more involved so that the package meets expectations with regard to impact and effectiveness. |
| --- | --- |

4.1.

| 4.2. | Having said that, the liquidity, financial and recapitalisation schemes available for small businesses and HORECA SMEs still urgently require a policy intervention extending these measures and programmes to the end of 2022–2023. |
| --- | --- |

4.2.

| 4.3. | Together, the submitted NRRPs and the new Multiannual Financial Framework (2021–2027) require a reinforced and harmonised system of common methodologies and policy practice exchanges (including the European Semester) in order to guarantee the necessary symmetrical EU economic recovery, fair competition among public and private actors, in particular restaurants and HORECA SMEs, at national/regional/local level, social convergence and inclusion. |
| --- | --- |

4.3.

| 4.4. | The NRRPs will determine how the funds will be allocated and spent within existing deadlines. Depending on the EU country, tourism is covered by either tourism-specific measures that modernise the sector or horizontal measures that are relevant to all sectors. For these reasons, we have developed a short- to medium-/long-term framework with four main policy pillars on which we will base our final conclusion and recommendations: |
| --- | --- |

4.4.

4.5.   PILLAR I: Liquidity, employment recovery and restoring business confidence

| 4.5.1. | Since there is no clear and up-to-date information about the expected impact of the financial support allocated by the European Commission’s recovery programme under the European Investment Fund (EIF) on micro and SMEs, the EESC expresses its concern and proposes:






  — | setting up a task force to supervise the implementation of the recovery measures, in particular those directed at micro and small businesses in the tourism and transportation sector; |
| --- | --- | --- |

4.5.1.

—

setting up a task force to supervise the implementation of the recovery measures, in particular those directed at micro and small businesses in the tourism and transportation sector;

| — | monitoring the Member States’ NRRPs to assess whether tourism-related reforms have been included; |
| --- | --- |

—

monitoring the Member States’ NRRPs to assess whether tourism-related reforms have been included;

| — | creating an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027); |
| --- | --- |

—

creating an EU mechanism to monitor the provision of support to micro enterprises and SMEs under the current Multiannual Financial Framework (2021–2027);

| — | establishing a specific budget line for tourism, reflecting both the importance of this ecosystem and its needs in the aftermath of the COVID-19 crisis; |
| --- | --- |

—

establishing a specific budget line for tourism, reflecting both the importance of this ecosystem and its needs in the aftermath of the COVID-19 crisis;

| — | implementing second chance and early warning schemes for tourism and small transportation businesses and a new easy-to-use solvency programme for SMEs; |
| --- | --- |

—

implementing second chance and early warning schemes for tourism and small transportation businesses and a new easy-to-use solvency programme for SMEs;

| — | these various initiatives and proposals should be pooled in a ‘European Tourism Alliance’, allowing better targeting of problems, solutions and funding. The EESC will contribute by being involved in this alliance’s discussions and work. |
| --- | --- |

—

these various initiatives and proposals should be pooled in a ‘European Tourism Alliance’, allowing better targeting of problems, solutions and funding. The EESC will contribute by being involved in this alliance’s discussions and work.

4.6.   PILLAR II: Data knowledge networks and preparedness, health and safety, risk mitigation

| 4.6.1. | Tourism has an impact on the economy, the natural and built environment, the local population at the places visited and on the visitors themselves. Policies to make tourism more sustainable, and to fulfil its potential to contribute to the achievement of the Sustainable Development Goals, are hampered by a lack of statistics on the sustainability of tourism. If sustainability in tourism is a priority, we must also make measuring it a priority. |
| --- | --- |

4.6.1.

| 4.6.2. | The World Tourism Organization (UNWTO), in collaboration with the United Nations Statistics Division (UNSD), is helping leading countries and institutions to develop a Statistical Framework for Measuring the Sustainability of Tourism. International agencies underline the growing need to measure the sustainability of tourism in all its dimensions — economic, social and environmental — and the EU could contribute with its national experiences and could set harmonised standard in this regard. |
| --- | --- |

4.6.2.

4.7.   PILLAR III: Medium-/long-term transition pathways:

| 4.7.1. | The EU industrial strategy needs to further accelerate the green and digital transitions and increase the resilience of EU industrial ecosystems, of which micro and SMEs are an essential component, particularly in the tourism and transport sectors. The co-creation of ‘transition pathways’ for tourism with civil society organisations, social partners, all public authorities and regulators should be accompanied by a comprehensive approach, which is required to compare sustainable scenarios and to rethink tourism, HORECA and transport policy solutions at EU, national and regional level. |
| --- | --- |

4.7.1.

| 4.8. | PILLAR IV: Governance and resources: the role of civil society organisations in the ‘Next Generation’ sustainable tourism and transport policies (NRRPs). |
| --- | --- |

4.8.

| 4.9. | The European Commission has set out seven flagship initiatives, for which it encourages EU countries to put forward investments and reforms. Several of these flagships, such as those listed below, may lead to tourism investments:






  — | renovate: renovating tourism infrastructure to improve its energy performance (nearly zero-energy buildings), accessibility and resource management, and to develop circular business models (e.g. for food and waste management) and sustainable foreign/EU direct investments; |
| --- | --- | --- |

4.9.

—

renovate: renovating tourism infrastructure to improve its energy performance (nearly zero-energy buildings), accessibility and resource management, and to develop circular business models (e.g. for food and waste management) and sustainable foreign/EU direct investments;

| — | reskill and upskill: providing training to tourism entrepreneurs, particularly micro SMEs, workers and destination managers, in support of the green and digital transition; |
| --- | --- |

—

reskill and upskill: providing training to tourism entrepreneurs, particularly micro SMEs, workers and destination managers, in support of the green and digital transition;

| — | modernise: supporting the digitalisation of the public administrations responsible for tourism policy an promoting data-sharing between public administrations, destination managers and businesses; |
| --- | --- |

—

modernise: supporting the digitalisation of the public administrations responsible for tourism policy an promoting data-sharing between public administrations, destination managers and businesses;

| — | recharge and refuel: investing in clean mobility and improving connectivity to tourism destinations, especially tourism hotspots (e.g. waterborne transport, buses, public transport); |
| --- | --- |

—

recharge and refuel: investing in clean mobility and improving connectivity to tourism destinations, especially tourism hotspots (e.g. waterborne transport, buses, public transport);

| — | the introduction of a specific ‘Tourism’ line in TEN-T projects (European transport corridors) will allow its specificities to be taken into account. |
| --- | --- |

—

the introduction of a specific ‘Tourism’ line in TEN-T projects (European transport corridors) will allow its specificities to be taken into account.

| 4.10. | The Member States and the EU institutions will need a strong partnership framework with European/national/regional and social partners (social dialogue). EU/national and civil society organisations and other stakeholders will be asked to play a proactive and value-added role at all levels (beyond being fully involved in the European Semester, market surveillance, etc.), with some common long-term objectives, common timeframes and a new economic convergence ensuring social inclusion. There is an urgent need to plan ahead and take action through a thorough re-evaluation, a concrete joint policy agenda and national commitments in order to develop a more sustainable, attractive and interconnected tourism and transport business model that will be suitable for the new global market demand and changed lifestyles. |
| --- | --- |

4.10.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  The Commission Communication Europe’s moment: Repair and Prepare for the Next Generation COM(2020) 456 final, cohesion policy support for 2021–2027, and a package of health and safety measures such as the vaccination policy, the EU Digital COVID Certificate, the European Tourism COVID-19 Safety Seal minimum standard and others.

1

Europe’s moment: Repair and Prepare for the Next Generation

(2)  https://s3platform.jrc.ec.europa.eu/digitalisation-and-safety-for-tourism?p_l_back_url=%2Fsearch%3Fq%3Dtourism

2

(3)  The main areas of interest in the ‘tourism transition’ for micro SME organisations and wider stakeholders are: greener tourism (circular tourism, accessible tourism for all, carbon-neutral mobility, sustainability knowledge, sustainable consumption), digitalisation (data analytics and real-time experience management, digital never-ending tourism and virtual experiences, technology-empowered destinations, the transformation of value co-creation, digital empowerment and knowledge of tourism providers and consumers) and resilience (adaptive capacity of the changing world of tourism, upskilling and the safeguarding of high-quality work in tourism, destination governance to support well-being for all, equity support, accessibility and the social impact of tourism on climate change, ageing and the digital divide).

3

(4)  Further duties to be performed by the ombudsman/authority: to monitor Member States’ activities in relation to their NRRPs to assess whether tourism-related reforms have been coherently implemented, to monitor ‘second chance’ and ‘early warning schemes’ for tourism and small transportation businesses and a new easy-to-use solvency programme for SMEs and to create the conditions for a specific budget line for tourism, reflecting both the importance of this ecosystem and its needs in the aftermath of the COVID-19 crisis.

4

(5)  Actions: restructuring debt capital, strengthening micro businesses’ aggregation and cluster capacities, promoting equity capital and providing tax incentives for private investors, and supporting early warning mechanisms for small businesses at risk of insolvency.

5

(6)  Council Recommendation of 15 March 2018 on a European Framework for Quality and Effective Apprenticeships (OJ C 153, 2.5.2018, p. 1).

6

(7)  HM Queen Máxima, in her capacity as the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), delivered a speech at the G20 Summit in Rome on 31 October 2021, www.unsgsa.org

7

(8)  The Global Partnership for Financial Inclusion is an inclusive platform for all G20 countries.

8

(9)  OJ C 429, 11.12.2020, p. 219.

9

(10)  UN Sendai Framework for Disaster Risk Reduction 2015–2030; SME knowledge network and preparedness demonstrative centres, https://www.europeansmeacademy.eu/news/improving-preparednes-response-to-eu-natural-and-man-made-disasters/

10

(11)  Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements (OJ L 326, 11.12.2015, p. 1).

11

(12)  European Parliament Think Tank, Relaunching transport and tourism in the EU after COVID-19, February 2021.

12

(13)  This has most severely affected small businesses and self-employed people in the respective value and supply chains, as well as workers and societies and their resilience capacities.

13

---

ANNEX

The following section opinion texts were adopted and the amendments rejected by the Assembly but obtained at least a quarter of the votes cast:

AMENDMENT 3

INT/949

Tourism and transport/Follow-up

Point 2.1

Amend as follows:

| Section opinion | Amendment |
| --- | --- |
| 2.1. | EU and global tourism will not return to its pre-pandemic level. The impact of the pandemic and its consequences for societies and the economy are not yet fully apparent. Before COVID-19, tourism directly or indirectly accounted for nearly 10 % of the EU’s GDP, provided about 22,6  million jobs and made the EU the world’s leading tourism destination, with 563 million international arrivals and 30 % of global profits in 2018. With 30 % of international arrivals in 2018, the EU was the most popular tourist destination in the world. There were more than 600 000 tourist establishments in the EU-27 in 2018 and bookings for overnight accommodation totalled 1 326 049 994 nights. |

Section opinion

Amendment

2.1.

EU and global tourism will not return to its pre-pandemic level. The impact of the pandemic and its consequences for societies and the economy are not yet fully apparent. Before COVID-19, tourism directly or indirectly accounted for nearly 10 % of the EU’s GDP, provided about 22,6  million jobs and made the EU the world’s leading tourism destination, with 563 million international arrivals and 30 % of global profits in 2018. With 30 % of international arrivals in 2018, the EU was the most popular tourist destination in the world. There were more than 600 000 tourist establishments in the EU-27 in 2018 and bookings for overnight accommodation totalled 1 326 049 994 nights.

| 2.1. | EU and global tourism will not return
  immediately
  to its pre-pandemic level. The impact of the pandemic and its consequences for societies and the economy are not yet fully apparent. Before COVID-19, tourism directly or indirectly accounted for nearly 10 % of the EU’s GDP, provided about 22,6  million jobs and made the EU the world’s leading tourism destination, with 563 million international arrivals and 30 % of global profits in 2018. With 30 % of international arrivals in 2018, the EU was the most popular tourist destination in the world. There were more than 600 000 tourist establishments in the EU-27 in 2018 and bookings for overnight accommodation totalled 1 326 049 994 nights. |
| --- | --- |

2.1.

EU and global tourism will not return
  immediately
  to its pre-pandemic level. The impact of the pandemic and its consequences for societies and the economy are not yet fully apparent. Before COVID-19, tourism directly or indirectly accounted for nearly 10 % of the EU’s GDP, provided about 22,6  million jobs and made the EU the world’s leading tourism destination, with 563 million international arrivals and 30 % of global profits in 2018. With 30 % of international arrivals in 2018, the EU was the most popular tourist destination in the world. There were more than 600 000 tourist establishments in the EU-27 in 2018 and bookings for overnight accommodation totalled 1 326 049 994 nights.

Outcome of the vote:

| For: | 72 |
| --- | --- |
| Against: | 84 |
| Abstentions: | 21 |

For:

72

Against:

84

Abstentions:

21

AMENDMENT 1

INT/949

Tourism and transport/Follow-up

Point 1.2

Amend as follows:

| Section opinion | Amendment |
| --- | --- |
| Tourism
  will
  not return to its pre-pandemic level: global interdependency, and greener and more digital tendencies in consumer behaviour will determine new business models. The EESC considers that the short, medium and long-term measures needed at EU and Member State/regional level are: | Tourism
  , despite the positive prospects, is
  not
  expected to
  return to its pre-pandemic level: global interdependency, and greener and more digital tendencies in consumer behaviour will determine new business models. The EESC considers that the short, medium and long-term measures needed at EU and Member State/regional level are: |

Section opinion

Amendment

Tourism
  will
  not return to its pre-pandemic level: global interdependency, and greener and more digital tendencies in consumer behaviour will determine new business models. The EESC considers that the short, medium and long-term measures needed at EU and Member State/regional level are:

Tourism
  , despite the positive prospects, is
  not
  expected to
  return to its pre-pandemic level: global interdependency, and greener and more digital tendencies in consumer behaviour will determine new business models. The EESC considers that the short, medium and long-term measures needed at EU and Member State/regional level are:

Outcome of the vote:

| For: | 77 |
| --- | --- |
| Against: | 91 |
| Abstentions: | 20 |

For:

77

Against:

91

Abstentions:

20

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/11 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/11

---

Opinion of the European Economic and Social Committee on ‘The impact of COVID-19 on fundamental rights and the rule of law across the EU and the future of democracy’

(own-initiative opinion)

(2022/C 275/02)

| Rapporteur: | José Antonio MORENO DÍAZ |
| --- | --- |
| Rapporteur: | Cristian PÎRVULESCU |

Rapporteur:

José Antonio MORENO DÍAZ

Rapporteur:

Cristian PÎRVULESCU

| Plenary Assembly decision | 25.3.2021 |
| --- | --- |
| Legal basis | Rule 32(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | Employment, Social Affairs and Citizenship |
| Adopted in section | 10.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 205/7/5 |

Plenary Assembly decision

25.3.2021

Legal basis

Rule 32(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

Employment, Social Affairs and Citizenship

Adopted in section

10.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

205/7/5

1.   Conclusions and recommendations

| 1.1. | The EESC expresses its deep concern regarding the way COVID-19 is impacting the life, safety, welfare and dignity of all of the people living in the EU. It is also very concerned about the impact of COVID-19 on individuals and communities worldwide, especially in the countries lacking the proper health, social and educational infrastructure to deal with the pandemic. |
| --- | --- |

1.1.

| 1.2. | The response of the EU and the Member States must address the systemic vulnerabilities of Europe’s health infrastructure in the face of increased mobility and increased probability of dangerous zoonotic diseases. Moreover, efforts to combat the pandemic should go hand in hand with putting in place a proper social and economic support system to alleviate its disruptive effects. |
| --- | --- |

1.2.

| 1.3. | As the EESC has previously stated, the European Union is based on common European values which are non-negotiable under any circumstances: respect for human dignity and human rights, freedom, democracy, equality and the rule of law (1). These values cannot be forgotten when the EU and its Member States face an emergency and its fallout in terms of economic, social and educational challenges. While the response to the current crisis needs to be swift and warrants certain exceptional and time-limited measures, these cannot go against the rule of law and cannot endanger democracy, the separation of powers and the fundamental rights of European inhabitants (2). |
| --- | --- |

1.3.

| 1.4. | The EU should align its policies, strategies and programmes to pursue a fair and comprehensive recovery from the crisis, with a view to achieving upward convergence in medical, social, economic and democratic standards. In the context of the efforts made through the NextGenerationEU instrument to repair the immediate economic and social damage brought about by the coronavirus pandemic, the EESC reiterates its support for the Commission’s proposal for a regulation creating a new tool that would allow for economic corrective measures with regard to Member States that commit serious and persistent violations of the values listed in Article 2 (3). Moreover, we need a broader notion of the rule of law, that encompasses the protection of fundamental rights and guarantees the safeguarding of pluralist democracy. The rule of law exists in an interdependent, inseparable, triangular relationship with fundamental rights and democracy. |
| --- | --- |

1.4.

| 1.5. | The EU institutions and Member State governments should use the existing social and civic dialogue institutions to fully engage civil society organisations and the social partners in creating a pluralistic democratic space in which different visions and critiques are welcomed, with safeguards to limit the proliferation of fake news as well as unjustified and unjustifiable anti-human rights, conspiracy-driven, extremist discourse. |
| --- | --- |

1.5.

| 1.6. | Governments should clearly identify the legal basis for their measures. Any reform of existing health emergency laws and related rules or introduction of new ones, including in preparation for future pandemics, should set explicit limits and conditions and make explicit provision for the parliamentary scrutiny and judicial review of the proportionality of the measures and their compliance with domestic and international human rights standards. |
| --- | --- |

1.6.

| 1.7. | Rules and policies related to COVID-19 should be clear, coherent and consistent insofar as is possible, with the provision of information about them in a timely manner; the involvement and consultation of civil society, including social partners, with a view of developing rules and policies; and the inclusion of an evidence-based rationale. This principle of clarity should also guide the setting up of predictable mechanisms — entailing all of the necessary democratic substantive and procedural safeguards — so as to be prepared to respond in an orderly way to potential future pandemics, health crises or natural disasters. Rules, policies and any relevant information related to them should be accessible to all sections of society, including minority language groups. Where changes in policy need to be made, these should be announced sufficiently in advance through a variety of official and public channels, to give people time to prepare and adapt their behaviour accordingly. |
| --- | --- |

1.7.

| 1.8. | Regular reporting to parliament by government ministers charged with introducing pandemic measures should be required. Member States’ parliaments should establish committees, commissions or groups to scrutinise COVID-19 measures and provide regular reports to parliaments and local and regional representative assemblies. Parliamentary debate on these reports and responses by the government should also be a requirement to ensure oversight of government action. States should ensure access to justice by guaranteeing an independent judiciary and enabling online and remote work by the courts in addition to providing support for vulnerable litigants, witnesses or those subject to criminal or civil proceedings. |
| --- | --- |

1.8.

| 1.9. | Fundamental rights, the rule of law and respect for democracy are laid down in the EU Treaty, the European Charter of Fundamental Rights, and in international law commitments entered into on a sovereign basis by all EU Member States. Under international law, every State has the obligation to respect, protect and uphold human rights. These values are foundational, interdependent and mutually reinforcing. These are matters of international obligations, not ideology. Therefore, while debates on the procedures for the best implementation of human rights is a rational exercise, the principle of their respect should not be the subject of political debate. In the same way, responding to public health crises is an obligation for authorities. Authorities must ensure that the responses they offer are subject to proper democratic debate, public consultation and parliamentary oversight, which also includes the need to address fake news, including where this stems from the intention of undermining a political opponent, which can serve to undermine an effective response to a pandemic emergency. |
| --- | --- |

1.9.

| 1.10. | The EESC emphasises that despite the best intentions behind the NextGenerationEU instrument and the national recovery and resilience plans, and the openness of the European Commission to having civil society organisations, social partners and stakeholders involved, the level of actual participation is still largely insufficient and the processes have not allowed CSO views to have enough of an impact (4). The risk is that, even if successfully implemented, the plan will advance the green and digital transition, spurring growth in the medium and long term, but will not improve the difficult situation in which people find themselves today, in facing unemployment, a loss of income, and deteriorating health, living and working conditions, and increasing inequality. The Resilience Plans should be immediately subjected to distributional impact assessments and the results should be discussed with CSOs, social partners and stakeholders at national and EU level. |
| --- | --- |

1.10.

| 1.11. | The EESC underlines the connection between protecting democracy, the rule of law and fundamental rights and developing and implementing the European Pillar of Social Rights (EPSR). As previously stated, the wellbeing and fundamental rights of citizens should be built around a common and consistent social model, flexible enough to accommodate different national traditions and experiences in line with the values, principles and goals of the Treaty, the Pillar and its renewed and forward-looking consensus (5). The monitoring of the implementation of the EPSR Action Plan should take into consideration the wide-ranging disruptive effects of the pandemic. |
| --- | --- |

1.11.

| 1.12. | The pandemic has been a global crisis that will certainly have lasting but unequal consequences on various fringes of the population. Supporting vulnerable populations should be a priority, in line with the principle of ‘leaving no one behind’, and particular attention should be paid to vulnerable workers and the fulfilment of Principle 14 of the EPSR on minimum income. Support for businesses affected by the pandemic should also be stepped up, especially for the ones that were disproportionately affected and those that are having difficulties remaining operational, for example SMEs. The effects on social economy enterprises, severely impacted by the crisis, should also be addressed (6). |
| --- | --- |

1.12.

| 1.13. | The EESC believes that the European Democracy Action Plan should include a large-scale initiative to foster education on democracy and fundamental rights, which is instrumental for safeguarding democratic values and active citizenship. The initiative should be inclusive and addressed to all citizens, with a special focus on young people. |
| --- | --- |

1.13.

2.   The rule of law

| 2.1. | There are clear criteria for assessing the conformity of any state action with the principles of the rule of law, and it is essential that these principles are respected during ordinary times, and even more so during emergencies. These criteria are legality, legal certainty, the prohibition of arbitrary use of executive powers, and the accountability of governments to the law which is guaranteed by judicial and parliamentary control (7). The use of emergency powers must be necessary, proportionate and temporary, and must always be subject not only to the limits of the country’s constitutional law, but also to the standards set by European and international law. |
| --- | --- |

2.1.

| 2.2. | The COVID-19 pandemic has presented complex challenges to the legal, political, social, health and educational systems of all Member States. In such a challenging environment, maintaining a high degree of compliance with the rule of law can appear unachievable. However, emerging evidence within Europe and beyond indicates that those states that have maintained a policy and legislative process that respects the rule of law have correlated with more positive management of the health emergency with lower mortality and infection rates, but also with high levels of public trust in government, which is essential to the most effective response to crisis (8). The principles of the rule of law should guide any democratic government in responding legitimately and effectively to the current health crisis and possibly to similar ones in the future. |
| --- | --- |

2.2.

| 2.3. | With regard to Member States’ pandemic responses, concerns have materialised in relation to three key principles at the heart of the rule of law: (1) the principle of legality; (2) the principle of legal certainty; and (3) the principle of accountability to the law (9). |
| --- | --- |

2.3.

| 2.4. | In terms of legality, a number of issues with governmental responses, at national and subnational level, have been identified, including: action undertaken without legal basis or legislative authorisation; the establishment and/or extension of a ‘state of emergency’ in apparent violation of national constitutional frameworks; the use of legal bases by the executive in a manner not intended to be used; and fundamental rights restrictions adopted in apparent violation of constitutional or international human rights provisions. |
| --- | --- |

2.4.

| 2.5. | In terms of legal certainty, national measures that are problematic in this respect include the introduction of restrictive measures with unclear interpretation; contradictions between government policy and underlying legal measures; and such frequent changes to the law as to make it exceptionally difficult for ordinary citizens to understand what they may and may not do. In an emergency situation, risk and uncertainty are heightened, and the public looks to the government — and public authorities more generally — for clear guidance on what they can and cannot legally do. |
| --- | --- |

2.5.

| 2.6. | With regard to accountability to the law, problems with parliamentary and judicial oversight of government action related to COVID-19 can be seen in the marginalisation of parliaments. Before February 2021, less than half of the EU Member States had set up specialised parliamentary committees, published reports or scheduled regular debates on COVID-19-related measures, and in less than a third of cases government measures had been scrutinised (e.g. by a debate or vote in parliament) or amended by parliaments (10). Judicial review is the process by which courts ensure that governments act lawfully, and is particularly important in times of crisis, when fundamental rights may be severely restricted. A number of concerns have been raised across the EU as to the effectiveness of judicial review and access to justice in the context of COVID-19 measures (11). The closure of courts, or the restriction of access to courts to only certain types of proceedings negatively affected citizens’ capacity to resolve their disputes, and undermined access to justice particularly where the most vulnerable members of society have been disproportionately affected by measures introduced in response to the pandemic. Judicial systems in most Members States were ill-prepared for the crisis because of their low level of digitalisation and because some parts of society, notably vulnerable groups, lacked sufficient information on how the judiciary works, thereby lacking access to it. |
| --- | --- |

2.6.

| 2.7. | It may ultimately be concluded that the rule of law can guide the most effective action in response to public health emergencies (12), and is an essential value, not only in ordinary times, but also, and perhaps even more so, in times of crisis. In the context of the efforts made through the NextGenerationEU instrument to repair the immediate economic and social damage brought about by the coronavirus pandemic, the EESC reiterates its support for the Commission’s proposal for a regulation creating a new tool that would allow for economic corrective measures with regard to Member States that commit serious and persistent violations of the values listed in Article 2 (13). |
| --- | --- |

2.7.

3.   Fundamental rights

| 3.1. | The COVID-19 pandemic has put tremendous pressure on all the institutions and infrastructures that support and protect fundamental rights in the EU. The quickly deteriorating medical services and the large-scale socioeconomic crisis threatened the life, health and wellbeing of the majority of people on the continent and increased risks of poverty. This especially hit specific groups affected by a concrete and continuous disruption of social services resulting from their long-term underfunding and the lack of preparedness of the system to face crises. In this regard, the EESC reiterates its call for a binding European framework for a decent minimum income in Europe (14). |
| --- | --- |

3.1.

| 3.2. | The EU and its Member States should engage in a deep societal reflection on the origins of the crisis and the reasons why most European health systems were pushed to the verge of collapse because of the pandemic. Years of austerity policies have led to a general trend of disinvestment in the health sector and other key social services (assistance to dependent and vulnerable persons, nursing homes, etc.), creating a time bomb that exploded in the face of a major health challenge. As the Conference on the Future of Europe unfolds, all involved should be encouraged to draw lessons from this crisis in order to lay the ground for the reconstruction of the welfare state. Resilience is an empty word if all efforts are not put towards the construction of a regenerated European societal model that puts people at the centre. The EU must be prepared for future crises in terms of decision-making, transparent procedures, policies and financial resources. |
| --- | --- |

3.2.

| 3.3. | The protection of rights enshrined in the Charter of Fundamental Rights was challenged by the unfolding of the crisis and the policy responses, especially those related to provision of healthcare, non-discrimination, gender equality, the rights of the child, the rights of the elderly and the rights of persons with disabilities, as well as fair working conditions and social security and social assistance. Unfortunately, in the area of gender equality, women were under-represented in ad hoc decision making structures set up to tackle COVID-19 and a gender-specific focus was lacking in many impact assessments. There is also a need for explicit recognition of the disproportionate impact of the pandemic and related measures in terms of gender. |
| --- | --- |

3.3.

| 3.4. | Children’s rights, especially relating to access to education and social support, are of high concern to the Committee. As already proposed by the EESC, special attention should be given to the impact of COVID-19 on the rights, welfare and intellectual and emotional development of children (15). |
| --- | --- |

3.4.

| 3.5. | The EESC reiterates the recommendation it made in its opinion on the New Strategy for the Implementation of the Charter of Fundamental Rights that the Commission should focus the 2022 report on the effects of COVID-19 on fundamental rights, especially those relating to socioeconomic wellbeing (16). |
| --- | --- |

3.5.

| 3.6. | The EU has a major responsibility to promote and protect human rights worldwide. In the context of the COVID-19 pandemic, the EESC also believes that the EU could do more to help the world tackle the COVID-19 pandemic. The EESC welcomes and supports EU efforts in the emergency response to humanitarian needs, strengthening health, water and sanitation systems and mitigating the social and economic consequences of the pandemic. |
| --- | --- |

3.6.

| 3.7. | In the short term, more resources should be put into ensuring wide and fair access to vaccines. The 100 million vaccines pledged by the EU are not nearly enough for the pressing needs of most of the globe (17). As the main exporter of vaccines in the world, the EU must be ready to change its approach. The vaccines must be produced on a larger scale and in greater numbers with the aim of allowing non-EU countries to achieve safe vaccination levels. As part of the aforementioned need to construct a new European economic and social model, all European players should engage in a deep reflection on the ultimate objectives of the single market and related policies. This reflection should be human-centred and should consider the notions of public goods, collective health, and alternative ways of measuring wealth, including based on the proposals made by the social partners (18). |
| --- | --- |

3.7.

| 3.8. | More should be done to promote and protect fundamental social rights, as a direct and effective way to address the negative health, social, economic and educational effects of the pandemic. The European Pillar of Social Rights should be considered a natural policy development of the protection of fundamental social rights. |
| --- | --- |

3.8.

| 3.9. | The mandate of the Fundamental Rights Agency and the scope of the EC Reports on the Rule of Law should be extended to fully cover and allow adequate monitoring of the respect of these fundamental social rights. |
| --- | --- |

3.9.

| 3.10. | The EESC underlines the connection between protecting democracy, rule of law and fundamental rights, and developing and implementing the European Pillar of Social Rights (EPSR). As previously stated, the wellbeing and fundamental rights of citizens should be built around a common and consistent social model, and flexible enough to accommodate different national traditions and experiences in line with the values, principles and goals of the Treaty, the Pillar, and its renewed and forward-looking consensus (19). The monitoring of the implementation of the EPSR Action Plan should take into consideration the wide-ranging disruptive effects of the pandemic. |
| --- | --- |

3.10.

4.   The future of democracy

| 4.1. | The pandemic is a global phenomenon and so are its political and democratic consequences. According to a recent study, the impact on the state of democracy are very serious and include: the number of countries moving in an authoritarian dimension exceeding that of countries moving in a democratic direction; democratic backsliding taking place in some of the largest countries; electoral integrity questioned in several countries; democratic backsliding often enjoying popular support; authoritarianism deepening in non-democratic regimes; and the prolonged health crisis tending to normalize restrictions on basic freedoms (20). The EU should take into consideration these global trends which impact its own global and regional policies and set a democratic example worldwide. |
| --- | --- |

4.1.

| 4.2. | The future of democracy and the future of the EU are intertwined. The EU was built as an instrument of peace and cooperation and very importantly, an instrument of democracy, in all of its stages. We have to make sure that all the challenges and tensions stemming from the pandemic do not affect the quality and performance of our democratic systems, and, equally importantly, the commitment to build an integrated, democratic, social and prosperous Union. This implies, among other things, that European legislation should take precedence over national legislation in agreement with the Treaties. |
| --- | --- |

4.2.

| 4.3. | Since early 2020, when COVID-19 arrived in Europe with devastating consequences, a range of policy instruments have been used in combating the pandemic. In most cases the medical, emergency and administrative measures were deployed under various emergency regimes, differing in content and duration. |
| --- | --- |

4.3.

| 4.4. | In several EU countries, serious concerns about the motives and effects of these emergency regimes were raised. They have involved the side-lining of parliamentary and local/regional assemblies, a lack of oversight on executive action, limits on public information, a lack of transparency, social dialogue and participation, unchecked spending and inadequate support for the most affected persons, including medical staff. In the countries with already significant democratic vulnerabilities, the emergency regimes have acted as accelerators of previous trends (21). In the countries with stable democratic systems, they have brought questions of adaptability to new circumstances and effectiveness of measures taken. |
| --- | --- |

4.4.

| 4.5. | The policy responses also brought about an unprecedented level of misinformation and opposition to the health measures, from lockdown to treatments and vaccines. While the EU was generally successful in its efforts to support research into, procurement and distribution of vaccines, its failure to communicate this clearly to the whole European population helped fuel the spread of fake news, in particular by anti-vaccine groups. The narratives became so powerful in social media that they affected public trust in the health system and its professionals and fuelled discontent against researchers, politicians, academics and civil society leaders who advocated the WHO-sanctioned response strategy. They typically were a combination of conspiracy theory beliefs and strong mistrust in medical science and technology, especially vaccines. Overall, the OECD found that the COVID-19 crisis has accelerated a general declining trend in public trust in institutions, which has given rise to disinformation, polarisation and unwillingness to comply with public policies. |
| --- | --- |

4.5.

| 4.6. | In several countries, these attitudes have helped radical right-wing and Eurosceptic parties and organisations to further build their political constituencies. As the medical and socioeconomic crises continue, their mobilisation and influence will be further enhanced (22). |
| --- | --- |

4.6.

| 4.7. | In all countries, the tensions of the health and economic crisis have significant potential to cause divisions between various groups and social categories. According to a recent study, the pandemic and its consequences affected in a different way: young and old; people who report that they have been economically affected and those who see COVID-19 mainly as a public health crisis, and those who see the state as a protector and those who see it as an oppressor (23). |
| --- | --- |

4.7.

| 4.8. | The EU and the Member States should become aware of the risks a prolonged crisis will generate. The main challenge facing the EU institutions and the Member State governments is to be able to strengthen democracy, the rule of law and fundamental rights during the pandemic, in the face of questioning and criticism. The aim of a democratic strategy would not be the legitimisation of political and governmental elites, but maintaining the effectiveness of the responses while promoting democratic pluralism, proper checks and balances, and rational, constructive and civic critiques. |
| --- | --- |

4.8.

| 4.9. | In this respect, the EU institutions and Member State governments should use the existing social and civic dialogue institutions to fully and transparently engage civil society organisations, social partners, and stakeholders in creating a pluralistic democratic space in which different visions and critiques are welcomed. The EESC emphasises that despite the best intentions behind the NextGenerationEU instrument and the national recovery and resilience plans, and the European Commission’s willingness to involve civil society organisations, social partners and stakeholders, the level of actual participation is still largely insufficient and the processes in place have not allowed their views to have enough of an impact. |
| --- | --- |

4.9.

| 4.10. | As recommended in its opinion on the European Democracy Action Plan (EDAP), in addition to the areas already included, the promotion of European democracy should involve fostering democratic participation at EU, national, regional and local levels; it should involve civil society and cover democracy in all its facets and areas, including labour democracy, among others. The EESC also believes that greater emphasis should be placed on civil dialogue, which is a key prerequisite for the highest quality decision-making and ownership in any democracy, showing due regard for Article 11 TEU (24). |
| --- | --- |

4.10.

| 4.11. | The EESC believes that the European Democracy Action Plan should include a large-scale initiative to foster education on democracy and fundamental rights, which is instrumental for safeguarding democratic values and active citizenship. The initiative should be inclusive and addressed to all citizens, with a special focus on young people. |
| --- | --- |

4.11.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Article 2 of the Treaty on European Union; Statement by Luca Jahier, president of the European Economic and Social Committee, and José Antonio Moreno Díaz, president of the Group on Fundamental Rights and the Rule of Law (FRRL), 15 April 2020.

1

(2)  Declaration by the European Economic and Social Committee, The EU's response to the COVID-19 outbreak and the need for unprecedented solidarity amongst Member States, 6 April 2020.

2

(3)  OJ C 62, 15.2.2019, p. 173.

3

(4)  EESC Resolution on the Involvement of Organised Civil Society in the National Recovery and Resilience Plans — What works and what does not?, 25.2.2021 (OJ C 155, 30.4.2021, p. 1).

4

Involvement of Organised Civil Society in the National Recovery and Resilience Plans — What works and what does not?

(5)  OJ C 374, 16.9.2021, p. 38.

5

(6)  Social Economy Europe, The Impact of COVID-19 on Social Economy Enterprises, June 2020.

6

(7)  Council of Europe, European Commission for Democracy through Law (Venice Commission), Respect for Democracy, Human Rights and the Rule of Law during States of Emergency: Reflections, Strasbourg, 19 June 2020, CDL-AD(2020)014.

7

Respect for Democracy, Human Rights and the Rule of Law during States of Emergency: Reflections

(8)  See for example the global comparative studies and databases: CompCoRe with summation in Jasanoff, Sheila, Hilgartner, Stephen ‘A Stress Test for Politics: Insights from the Comparative Covid Response Project (CompCoRe) 2020’, Verfassungsblog, 11 May 2021, and ‘Power and the COVID-19 Pandemic’, Verfassungsblog Symposium, with summation in J Grogan, ‘Power, Law and the COVID-19 Pandemic: Part I’ and ‘Part II’ concluding the Power and the COVID-19 Pandemic
  Verfassungsblog Symposium (2021).

8

Verfassungsblog Symposium

Power and the COVID-19 Pandemic

Verfassungsblog Symposium

(9)  J. Grogan, Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis (Democracy Reporting International, May 2021).

9

Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis

(10)  J. Grogan, Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis (Democracy Reporting International, May 2021).

10

Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis

(11)  J. Grogan, Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis (Democracy Reporting International, May 2021).

11

Extraordinary or extralegal responses? The rule of law and the COVID-19 crisis

(12)  J. Grogan and N. Weinberg, Principles to Uphold the Rule of Law and Good Governance in Public Health Emergencies (RECONNECT Policy Brief, August 2020): https://reconnect-europe.eu/wp-content/uploads/2020/08/RECONNECTPB_082020B.pdf

12

Principles to Uphold the Rule of Law and Good Governance in Public Health Emergencies

(13)  OJ C 62, 15.2.2019, p. 173.

13

(14)  OJ C 190, 5.6.2019, p. 1. This EESC opinion received a counter opinion that was rejected but received at least a quarter of the votes cast.

14

(15)  OJ C 341, 24.8.2021, p. 50.

15

(16)  OJ C 341, 24.8.2021, p. 50.

16

(17)  European Council Conclusions on COVID-19, 25 May 2021.

17

(18)  Supplementing GDP as a welfare measure: proposed joint list by the European social partners, 3 March 2021.

18

(19)  OJ C 374, 16.9.2021, p. 38.

19

(20)  International Institute for Democracy and Electoral Assistance (International IDEA), The Global State of Democracy Report 2021.

20

(21)  See Petra Guasti, The Impact of the COVID-19 Pandemic in Central and Eastern Europe. The Rise of Autocracy and Democratic Resilience, Democratic Theory, Volume 7, Issue 2, Winter 2020: p. 47.

21

Democratic Theory

(22)  See for example José Javier Olivas Osuna and José Rama, COVID-19: A Political Virus? VOX’s Populist Discourse in Times of Crisis, Frontiers in Political Science, 18 June 2021.

22

Frontiers in Political Science

(23)  Ivan Krastev and Mark Leonard, Europe’s Invisible Divides: How COVID-19 is Polarizing European Politics, ECFR Policy Brief, September 2021.

23

Europe’s Invisible Divides: How COVID-19 is Polarizing European Politics

(24)  OJ C 341, 24.8.2021, p. 56.

24

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/18 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/18

---

Opinion of the European Economic and Social Committee on The social challenges of greening maritime and inland waterway transport

(Own-initiative opinion)

(2022/C 275/03)

| Rapporteur: | Pierre Jean COULON |
| --- | --- |

Rapporteur:

Pierre Jean COULON

| Plenary Assembly decision | 25.3.2021 |
| --- | --- |
| Legal basis | Rule 32(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | Transport, Energy, Infrastructure and the Information Society |
| Adopted in section | 2.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 207/1/2 |

Plenary Assembly decision

25.3.2021

Legal basis

Rule 32(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

Transport, Energy, Infrastructure and the Information Society

Adopted in section

2.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

207/1/2

1.   Conclusions and recommendations

| 1.1. | The EESC reiterates its support for the conclusions and recommendations of the opinions on FuelEU Maritime (1) and NAIADES III (2). |
| --- | --- |

1.1.

| 1.1.1. | In these fields, ‘close cooperation with all stakeholders in the maritime cluster and supply chain is necessary to ultimately reach this goal’. |
| --- | --- |

1.1.1.

| 1.1.2. | The same applies for the necessary ‘interest in creating intermodal terminals’, allowing for ‘the development of inland waterway transport in cities, contributing to a better quality of life’. |
| --- | --- |

1.1.2.

| 1.2. | The EESC believes that maritime and inland waterway transport greening must take into account the health and quality of life of those living in the vicinity of navigation channels and ports. |
| --- | --- |

1.2.

| 1.3. | Consequently, the port authorities, local and regional authorities, and transport stakeholders must work together to rethink the links between cities, ports, and transport stakeholders. |
| --- | --- |

1.3.

| 1.4. | The greening transition can only happen once adequate training aimed at employees has been put in place. |
| --- | --- |

1.4.

| 1.5. | These recommendations are integral for the future enhancement of the blue economy. |
| --- | --- |

1.5.

2.   Introduction

| 2.1. | The European Commission Communication on NAIADES III, published on 24 June 2021 on the modernisation of inland navigation in Europe, and the proposal for a Regulation of the European Parliament and of the Council on the use of renewable fuels in maritime transport, published on 14 July 2021 and known as FuelEU Maritime, are providing impetus to decarbonise these sectors. |
| --- | --- |

2.1.

| 2.2. | The NAIADES III action plan aims to promote inland waterway transport through 35 points of action based on a simple observation made by Commissioner for Transport, Adina Vălean: ‘As one of the most CO2-efficient modes of transport available, inland waterways have the potential to play a central role in decarbonising our transport system’. However, our canals and rivers carry just 6 % of EU freight, despite the EU inland waterway network spanning 41 000 kilometres. |
| --- | --- |

2.2.

| 2.3. | The goals laid down in the communication are to shift more freight transport to European rivers and canals, and to facilitate the transition to zero-emission vessels by 2050. |
| --- | --- |

2.3.

| 2.4. | The Commission therefore proposes a revision of the Combined Transport Directive of 1992 (3) — the only legal instrument in the EU which explicitly supports the shift from road freight to low-emission modes of transport (navigable inland waterways, maritime and rail transport), but whose effect has been hindered by inadequate transposition in the Member States. One main reason behind this deficient transposition stems from conflicting parts of the Mobility package of 2018, between the objective of achieving fair competition between road transport companies and employees in the internal market (by limiting cabotage to and from intermodal terminals), and the shift from modal to intermodal transport by lowering the cost. |
| --- | --- |

2.4.

| 2.5. | The proposal for a regulation on maritime traffic is part of the political and legislative package Fit for 55, which aims to reduce greenhouse gas emissions by 55 % by 2030. It is primarily focused on reducing emissions, and requires transporters to declare the vessel types and fuels they use. It is therefore rather loose. This is due to the fact that, according to the European Commission, maritime transport in general is the root of only 10 % of emissions linked to transport in the EU. |
| --- | --- |

2.5.

| 2.6. | The EESC can only endorse the European Commission’s policy of greening maritime and inland waterway transport. |
| --- | --- |

2.6.

| 2.7. | It has done so in the recently adopted opinions on FuelEU Maritime (4) and NAIADES III (5). The EESC would also like to take this opportunity to present some reflections on the societal challenges posed by the greening of maritime and inland waterway transport, and draw civil society’s attention to the fact that maritime and inland waterway transport greening also involves maritime spatial planning, to allow for transport to be adapted to climate change in the interest of a ‘blue economy’ (6). |
| --- | --- |

2.7.

3.   General comments

| 3.1. | This own-initiative opinion comprises two parts on different topics: the first essentially addresses the nature of inland waterway transport and ports, while the second covers social issues concerning maritime and inland waterway transport employees. The EESC stresses that maritime transport constitutes a sector-specific market, from local ferry transport servicing cities and archipelagos via rivers and short sea routes, to long-distance ferry, bulk carrier and container ship transport routes, as well as cruise ships.
  This opinion does not address all these sectors, but concerns the societal dimension linked to local and regional transport issues. |
| --- | --- |

3.1.

This opinion does not address all these sectors, but concerns the societal dimension linked to local and regional transport issues.

| 3.2. | Greening maritime and inland waterway transport requires an integrated approach, as future transport infrastructure would also need to take into account concerns relating to the health of residents and workers in the vicinity. |
| --- | --- |

3.2.

| 3.3. | In this own-initiative opinion on the societal challenges of maritime and inland waterway transport greening, the EESC considers it essential that the Commission make use of sound studies on the health repercussions of river and seaport activities. These studies should focus on analysing environmental management systems on a large scale, and contain recommendations for using river and sea ports while taking into account health-related concerns. |
| --- | --- |

3.3.

| 3.4. | Maritime cabotage plays an essential role in economic, social and territorial cohesion, especially for islands. It supports a low-carbon policy, reduces the environmental impact, and promotes the principle of multimodality. |
| --- | --- |

3.4.

| 3.5. | Improving air quality in ports and the effects it has on the health of local residents is a sensitive subject. The EESC considers it important to further develop power supply systems to the berths in inland and sea ports, as has been done in the Rotterdam port so that vessels, no matter their size, can cut their engines when they are docked, thus contributing toward preserving local resident and workers’ health. This also includes cruise ships, which are often docked in central port areas. |
| --- | --- |

3.5.

| 3.6. | Noise pollution produced by maritime port activities should not be ignored, as it pertains to both the quality of life of local residents and to the health of workers. The same applies to the residents of the hinterland area of navigable inland waterways. Improving the performance of inland waterway transport goes hand in hand with the socioeconomic development of the hinterland; however, this development cannot come at the expense of the residents’ quality of life, despite inland waterway transport creating less nuisance than road transport. |
| --- | --- |

3.6.

| 3.7. | Greening maritime and inland waterway transport cannot be achieved without addressing concerns regarding personnel training, employment prospects, and the unequal treatment between men and women in these sectors, or without taking into account societal challenges related to the profound changes brought on by job digitalisation and automation. |
| --- | --- |

3.7.

| 3.8. | Renewing the fleet is indispensable in order to reduce inland waterway transport’s dependence on fossil fuels. This sector is primarily composed of small-scale skippers and SMEs who are currently suffering economic hardships, such as a loss of turnover of around EUR 2,7 billion, and a 70 % reduction in passenger transport. Social acceptance of the necessary fleet renewal requires support from skippers, which can only be assured by gaining their trust through investments and long-term financial support. |
| --- | --- |

3.8.

| 3.9. | The transition toward zero-emission inland waterway transport requires not only financial support for existing skippers, but also increased efforts to train present and future crew. Greening maritime and inland waterway transport also depends on the sector’s capacity to manage the transformation of work and skills. |
| --- | --- |

3.9.

4.   Specific comments

Ports

| 4.1. | In maritime transport, the greening policy leads us to rethink the links between cities and ports. Development projects based on an all-oil economy, and worldwide super-containerisation in the second half of the 20th century led to ports leaving cities, which had become overcrowded, to create industrial port areas in the outskirts. However, large port and urban projects require more or less unanimous acceptance, which means taking into account a complex list of parameters linked to public and individual interests. These civic and societal demands are relatively new in the long-standing relationship between a city and its port. |
| --- | --- |

4.1.

| 4.2. | Port authorities and municipalities can play on the same team or completely oppose each other when it comes to societal and environmental dimensions that can no longer be overlooked (7). In port cities — where vessels, local residents, industries, businesses and tourist activities coexist — the quality of the environment and sources of nuisance have been factors in mobilising residents. For example, boats run their engines day and night, and air pollution has become a daily plague for local residents of numerous European ports. |
| --- | --- |

4.2.

| 4.3. | Passenger-cargo vessels and ferries on numerous routes release gas and fine particles into the air. The noise from their engines is also an unbearable nuisance as it is constant and amplified at night. |
| --- | --- |

4.3.

| 4.4. | The problem stems from the fact that only some of the reception berths at ports are equipped with an on-shore power supply. Consequently, certain vessels are forced to run their own generators. |
| --- | --- |

4.4.

| 4.5. | Improving air quality in ports and the effects it has on the health of local residents is a sensitive subject. The community is becoming more and more vocal in its demands for preventative and corrective measures for air quality in the port surrounding areas — most notably on social media. |
| --- | --- |

4.5.

| 4.6. | The same applies to noise pollution generated by port activities. In the EESC’s view, greening maritime and inland waterway transport requires taking stock of and diagnosing environmental impacts of the ports, in particular in the areas between the city and the port. This preparatory step should be taken before adopting any measures, and would allow an intelligent environmental management of the city to port area, to which the development of inland waterway ports could contribute. |
| --- | --- |

4.6.

| 4.7. | Indeed, maritime and inland waterway transport greening cannot go ahead without a prior assessment of the impact of the dispersion of gas emissions (even low-carbon), the vessels, the topographical profile of the port area, the population distribution in the areas of port activity influence, the existence of meteorological stations (as the weather influences whether gas in the air disperses or accumulates), and the sensors that measure pollution and noise levels. |
| --- | --- |

4.7.

Maritime sector employees

| 4.8. | Employment and training for new jobs for seafarers is another major societal challenge that cannot be ignored. Despite the lack of available, precise and comparable data on seafarers, it is commonly accepted that the maritime sector suffers from a skills shortage, which makes it difficult to fill posts and retain seafarers. |
| --- | --- |

4.8.

| 4.9. | The lack of attractiveness of this occupational sector comes from, among other things, the fact that seafaring is no longer considered a great way to see the world. In fact, travel has become cheaper and easier. According to an independent study prepared for the European Commission, the sector is also perceived to be incompatible with a ‘normal’ social and family life, and offers poor working conditions and poor prospects for career progression, despite the Maritime Labour Convention of 2006 (MLC 2006), establishing minimum working and living standards for the world merchant fleet seafarers (8). |
| --- | --- |

4.9.

| 4.10. | Nevertheless, some data from a report by the European Community Shipowners’ Associations shows that in certain parts of society, maritime navigation is seen as prestigious and respectable, most notably thanks to public information campaigns and study grants, among other things. |
| --- | --- |

4.10.

Representation of women in the field of transport

| 4.11. | The number of women in the maritime transport sector is still relatively low and under-represented, with few expectations that this will improve over time. With the exception of certain Nordic countries and the Netherlands, women occupy posts of inferior status which offer lower pay than those of men. |
| --- | --- |

4.11.

| 4.12. | The EESC is a stakeholder in the EU Platform for Change which aims to integrate and recognise women in all transport professions, including maritime and inland waterway transport. An online survey run by the European Transport Workers’ Federation from 7 October to 29 November 2019 found that women make up only 22 % of the transport industry’s overall workforce (9). This study reveals that numerous obstacles stemming from gender inequality and stereotypes persist in the sector. Maritime transport has always been a male-dominated industry, and the EESC believes that this must change in order to address the societal challenges that women face in this sector. |
| --- | --- |

4.12.

| 4.13. | Greening the maritime transport sector could be the opportunity do so. The EESC believes that the evolution of technology brought on by this greening should drive job creation in the maritime transport sector, and change perceptions of it in a way that would see traditional jobs at sea evolving towards high-added-value jobs on land, allowing for the recruitment of more women. |
| --- | --- |

4.13.

| 4.14. | Duly qualified seafarers are essential in ensuring navigation that is both safe and respectful of the environment. The viability of this dynamic sector depends on the capacity to continue to attract a sufficient number of quality new arrivals and to retain experienced seafarers, including women and other under-represented groups. |
| --- | --- |

4.14.

| 4.15. | The EESC believes that it is necessary to involve all stakeholders, including social partners, in order to find both significant and viable solutions in the field of maritime transport greening (10). |
| --- | --- |

4.15.

Seafarers

| 4.16. | Nevertheless, vessel automation could consequently lead to the reduction of crew and equipment, lowering the demand for seafarers and increasing the workload and responsibilities of existing personnel at the same time. Society is unlikely to accept prospective lay-offs and re-classing. |
| --- | --- |

4.16.

| 4.17. | Additionally, digitalisation and automation are likely to improve working conditions for crew members who are highly qualified and skilled in IT and electrical engineering. Digitalisation and automation could also reduce the administrative burden, often cited as a source of fatigue for crew members, and allow the development of quasi-autonomous operating systems, which would have a considerable impact in terms of working hours and the attractiveness of seafaring. |
| --- | --- |

4.17.

| 4.18. | Digitalisation and automation involved in maritime transport greening will profoundly change the sector. This is not envisaged in the short-term, as shipowners are not yet fully prepared. Instead, these new technologies will be adapted to existing vessels. The cost involved in renewing the fleet also plays a role in this reluctance. |
| --- | --- |

4.18.

| 4.19. | Another risk that cannot be ignored is the risk that changing skills needs could be detrimental to employment by excluding certain sailors, or by not correctly training prospective sailors. This poses a sizeable challenge to naval training schools, which is only addressed by those with close ties to the maritime industry, in order to adapt to the needs of the latter. |
| --- | --- |

4.19.

| 4.20. | Moreover, continued training of seafarers is indispensable in keeping their skills up to date and facilitating the transition between sea-based and land-based jobs which would probably result from maritime transport greening. This aspect is essential for generating positive effects on society as a whole. |
| --- | --- |

4.20.

| 4.21. | To have more skilled personnel implies an increase in operating costs, and a risk of social dumping to the detriment of less skilled personnel and of unfair competition in the labour market, which highlights the need to protect European sailor jobs. In this regard, see the 2018 study Seafarers and digital disruption (11). European sailors appear to be decreasing in number, while their average age is increasing, leading one to question whether they can compete with non-European seafarers. This is an entirely separate issue, but this own-initiative opinion wishes to raise it nonetheless. |
| --- | --- |

4.21.

| 4.22. | Social partners therefore play an essential role in ensuring that labour standards are respected and even raised in maritime transport. Nonetheless, collective bargaining could be jeopardised by the disparity in labour rights applicable on board, and complicated by the enforcement of labour rights in cross-border areas, and a lack of communication, cooperation and coordination between the various authorities in charge of labour conditions. |
| --- | --- |

4.22.

Inland waterway transport

| 4.23. | A number of these considerations regarding maritime transport employees could occasionally be extrapolated to inland waterway transport, except that the labour market in internal navigation is mostly comprised of independent and ageing operators due to a combination of social, economic and cultural factors (12). Ageing has also been a noted problem within the group of employees, as young people favour land-based jobs with regular working hours and the possibility to spend the weekends at home. This factor is highly relevant, for example in Western Europe, where around 80 % of inland waterway freight companies are independent owner-operators, whose working hours cannot be restricted to a regular schedule. This leads to a labour shortage in inland navigation — a concern for both the passenger and freight inland navigation market, which can, in particular, be observed for qualified personnel at management level and qualified boatmasters in the liquid cargo segment. |
| --- | --- |

4.23.

| 4.24. | The EESC notes that this shortage can also be attributed to technical factors, such as crew member jobs becoming increasingly more technical, and inland waterway transport companies seeking technical worker profiles, which are difficult to find. |
| --- | --- |

4.24.

| 4.25. | Increasing the attractiveness of the sector for the younger generation involves adopting fundamental measures, in particular measures of a socio-cultural and societal nature, such as developing cooperatives to better align with economic necessities (efficiency, profitability, high workload) with social, cultural and societal aspects (private and social life, family, etc.). |
| --- | --- |

4.25.

| 4.26. | Lastly, the EESC notes that the effects of the COVID-19 crisis that have already been felt will be quantifiable in the coming years, and all the more so as the inland waterway navigation labour market continues to change due to greening the sector. |
| --- | --- |

4.26.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  EESC opinion on FuelEU Maritime (OJ C 152, 6.4.2022, p. 145)

1

FuelEU Maritime

(2)  EESC opinion on NAIADES III (OJ C 194, 12.5.2022, p. 102).

2

NAIADES III

(3)  Council Directive 92/106/EEC of 7 December 1992 on the establishment of common rules for certain types of combined transport of goods between Member States (OJ L 368, 17.12.1992, p. 38).

3

(4)  EESC opinion on FuelEU Maritime (OJ C 152, 6.4.2022, p. 145).

4

FuelEU Maritime

(5)  EESC opinion on NAIADES III (OJ C 194, 12.5.2022, p. 102).

5

NAIADES III

(6)  EESC opinion on the New approach for a sustainable blue economy in the EU, rapporteur Simo Tiainen (OJ C 517, 22.12.2021, p. 108); and EESC opinion on Innovation in the Blue Economy, rapporteur Séamus Boland (OJ C 12, 15.1.2015, p. 93).

6

New approach for a sustainable blue economy in the EU

Innovation in the Blue Economy

(7)  Daudet, B., and Alix, Y., ‘Gouvernance des territoires ville-port: empreintes locales, concurrences régionales et enjeux globaux’, Organisations et Territoires, 2012.

7

Organisations et Territoires

(8)  Coffey, ‘Study on social aspects within the maritime transport sector’, Consultores em Transportes Inovacāo e Sistemas, Oxford Research and World Maritime University, Publications Office of the European Union, 2020.

8

Consultores em Transportes Inovacāo e Sistemas

(9)  https://www.etf-europe.org/make-transport-fit-for-women-to-work-in-etf-sounds-alarm-over-industrys-growing-gender-divide/

9

(10)  https://www.ecsa.eu/index.php/etf-ecsa-declaration-enhanced-participation-women-european-shipping

10

(11)  https://www.ics-shipping.org/wp-content/uploads/2018/10/ics-study-on-seafarers-and-digital-disruption.pdf.

11

(12)  Central Commission for the Navigation of the Rhine, Thematic report on the European inland navigation sector labour market, February 2021.

12

Thematic report on the European inland navigation sector labour market

---

III Preparatory acts

European Economic and Social Committee

567th plenary session of the European Economic and Social Committee — Interactio, 23.2.2022-24.2.2022

| 18.7.2022 | EN | Official Journal of the European Union | C 275/24 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/24

---

Opinion of the European Economic and Social Committee on Proposal for a Council recommendation on a Pact for Research and Innovation in Europe

(COM(2021) 407 final – final 2021/230 (NLE))

(2022/C 275/04)

| Rapporteur: | Paul RÜBIG |
| --- | --- |
| Co-rapporteur: | Panagiotis GKOFAS |

Rapporteur:

Paul RÜBIG

Co-rapporteur:

Panagiotis GKOFAS

| Referral | European Commission, 2.5.2022 |
| --- | --- |
| Legal basis | Article 182 of the Treaty on the Functioning of the European Union |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 3.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 219/0/2 |

Referral

European Commission, 2.5.2022

Legal basis

Article 182 of the Treaty on the Functioning of the European Union

Section responsible

Single Market, Production and Consumption

Adopted in section

3.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

219/0/2

1.   Conclusions and recommendations

| 1.1. | The EESC welcomes the fact that the Pact for Research and Innovation in Europe sets out commonly agreed values and principles for R&I and identifies, on a global, general level, the areas where Member States will jointly develop priority actions. The Pact thus supports the new European Research Area (ERA) while bearing in mind that research and innovation are largely national competences. |
| --- | --- |

1.1.

| 1.2. | The Council recommendation is divided into major parts, which are addressed in the following sections:






  1. | Values and principles; |
| --- | --- | --- |

1.2.

1.

Values and principles;

| 2. | Priority areas for joint action; |
| --- | --- |

2.

Priority areas for joint action;

| 3. | Prioritising investments in R&D; |
| --- | --- |

3.

Prioritising investments in R&D;

| 4. | Policy coordination and monitoring and reporting. |
| --- | --- |

4.

Policy coordination and monitoring and reporting.

| 1.3. | In the future, Europe should make value creation, business and quality jobs out of Europe’s R&D-results. One very important tool for making business, profit and jobs for Europe out of Europe’s R&D-results is Intellectual Property Rights (IPR). The great importance of IPR and patents should be added to the paragraph on Value Creation and a clear IPR strategy for Europe should be developed in the framework of the Pact for the New ERA. This active and passive EU patent policy and patent strategy should be accompanied by an active and passive license strategy and a transparent monitoring system for the net global patent and license balance. |
| --- | --- |

1.3.

| 1.4. | The EESC welcomes the Pact’s clear call to deepen the ERA, i.e. to move from coordinating national policies to deeper integration of these policies, and its call to accelerate the twin green and digital transitions. Thus far, R&I in the EU 27 has still mainly been conducted in parallel working silos. These silos now have to be connected by massive ‘communication pipes’, which the EESC believes must be one of the Pact’s major objectives. |
| --- | --- |

1.4.

| 1.5. | The EESC feels that, in view of the massive investments in Research, Technology, Innovation (RTI) in Asia (China, South Korea etc.), the EU has to substantially speed up its efforts in R&I, especially regarding the fast transformation of R&D results into innovative products and services, since Europe is lagging behind in this area, as clearly pointed out in COM(2020) 628. |
| --- | --- |

1.5.

| 1.6. | The EESC would like to point out that R&I have to be speeded up in the EU and the digital transition achieved fast. A recently published EC report, the 2021 EU Industrial R&D Investment Scoreboard, shows that China has increased its R&D investments from 2020 to 2021 by 18,1 %, the USA has increased its R&D investments from 2020 to 2021 by 9,1 %, whereas the EU 27 have decreased their R&D investments by 2,2 %. These transition processes have to be fair and just, not leaving behind any group of civil society, especially vulnerable citizens, European citizens living in remote regions or the social partners. |
| --- | --- |

1.6.

| 1.7. | As pointed out in the new ERA, as well as in the Pact, the EU really needs a new vision, i.e. a New Deal for the EU’s ERA. With just ‘more of the same’ as its old RTI strategy, the EU will continue to fall behind the US and Asia (China, Korea, etc.) in R&I. |
| --- | --- |

1.7.

| 1.8. | To date only a limited share of the EU population (the ‘usual suspects for R&I’ only) have been engaged in the EU’s R&I policies. However, modern socioeconomic research highlights the great importance of the Science-Technology-Society (STS) for strong performers in R&I. To contribute concretely with the objective of a stronger EU in the world, the EESC asks to include, in appropriate form, civil society organisations, social and economic partners (notably organisations representing MSMEs) at EU and national level in the European Commission’s monitoring of the actions already deployed in 2022 by the new ERA Forum and related initiatives like the new European Citizens’ Panels within the Conference on the Future of Europe. The so-called knowledge triangle (Higher Education, Basic and Applied Research, Commercialisation of new technology by Industry), which we are glad to see referenced in the Commission’s Pact for R&I, too, is an important concept for boosting R&I. Within this concept of participation of EU civil society, it is important, too, to make sure that the workers on the shop floor — as well as vulnerable EU citizens — are included. |
| --- | --- |

1.8.

| 1.9. | Within the new Pact for R&I Europe must prepare the soil for a more entrepreneurial culture such that risk-taking, innovative businesses are encouraged — MSMEs as well as start-ups. The well-known slogan ‘No risk, no fun’ translates in innovation into ‘No risk, no new business, no new quality jobs’. |
| --- | --- |

1.9.

| 1.10. | There are many Commission documents and programmes on R&I. Thus, the EESC would appreciate the Commission clarifying the interlinkages between all its documents on R&I, including the Pact for R&I, the New Era, the European Missions, the EU Recovery and Resilience Plan and Horizon Europe in general. |
| --- | --- |

1.10.

| 1.11. | Last but not least, the EESC wishes to point out that the EU’s Pact for R&I and its new ERA should be designed and implemented in agreement with the United Nations’ 17 Sustainable Development Goals (SDGs), which aim to achieve decent lives for all on a healthy planet by 2030. |
| --- | --- |

1.11.

2.   General comments

| 2.1. | The core Commission document, on which the Pact is based and to which the Pact refers, is COM(2020) 628 — A new ERA for Research and Innovation. |
| --- | --- |

2.1.

| 2.2. | In March 2021, the EESC published an opinion (1) on A new ERA for Research and Innovation (2). Many of the conclusions, recommendations and general comments contained in that EESC opinion are also valid for the Pact; some of them are reproduced in this document. |
| --- | --- |

2.2.

| 2.3. | Bringing these R&I elements together in a single legal act will reaffirm Member States’ political commitment to mobilise their R&I policies to tackle the challenges that Europe faces today, which are:






  a. | The twin transition (digital transition and green deal) |
| --- | --- | --- |

2.3.

a.

The twin transition (digital transition and green deal)

| b. | The post-pandemic recovery |
| --- | --- |

b.

The post-pandemic recovery

| c. | The ever-fiercer global competition in RTI, especially from Asia (China, Korea, etc.). |
| --- | --- |

c.

The ever-fiercer global competition in RTI, especially from Asia (China, Korea, etc.).

All these challenges have to be tackled in a fair and just way, leaving no one behind, especially not vulnerable EU citizens.

| 2.4. | Global RTI rankings and studies show that, in terms of global competition, the EU 27 are lagging behind the USA and Asia, especially China and Korea, where RTI is concerned, especially in terms of Key Enabling Technologies (KETs) (e.g. Artificial Intelligence, Machine Learning, Robotics, Digital Business Models, etc.). Challenges a) and b) are to be found in Commission communication COM(2021) 407. Challenge c) ‘global competition in RTI especially from Asia (China, Korea, etc.)’ has been added intentionally by the EESC, because it feels that if the EU does not address this challenge successfully the EU will lose millions of qualified jobs to Asia and will thus lose wealth and quality of life for Europeans. RTI is the major generator of future quality jobs. If technological leadership in many industries moves to Asia, quality jobs will also move to Asia. |
| --- | --- |

2.4.

| 2.5. | The European Research Council (ERC), too, has already issued an opinion on the Pact and the new ERA. The ERC, too, stresses very clearly that the EU is falling behind in comparison to Asia, especially China, regarding RTI, stating that ‘The pact for R&I may be the EU's last chance to finally meet the goals of the original ERA to cement Europe’s position as a leader in research and innovation’ (3). |
| --- | --- |

2.5.

| 2.6. | China has not only overtaken the EU regarding output in R&D and output in patents but, for around five years, has also very aggressively taken the global lead in setting technological industry standards. For many decades, the US and Europe had monopolised the setting of industry standards. Setting the technology industry’s standards has a very powerful role in global RTI, meaning that the nation that sets these standards has a competitive advantage. The EESC therefore strongly recommends that the Commission set out clear measures in the Pact, to uphold Europe’s strong position in setting global technology industry standards. |
| --- | --- |

2.6.

| 2.7. | The EESC feels that, in view of the massive investments in RTI in Asia (China, South Korea etc.), the EU has to substantially speed up its efforts in R&I, especially regarding the fast transformation of R&D results into innovative products and services. A recently published EC report, the 2021 EU Industrial R&D Investment Scoreboard, shows that China has increased its R&D investments from 2020 to 2021 by 18,1 %, the USA has increased its R&D investments from 2020 to 2021 by 9,1 %, whereas the EU 27 have decreased their R&D investments by 2,2 %. The EU’s measures to speed up R&I have to address multinationals headquartered in the EU, as well as MSMEs, since MSMEs, too, are threatened by competition from Asia and since most of the employment growth in Europe stems from MSMEs and start-ups, not from large enterprises. |
| --- | --- |

2.7.

| 2.8. | The EESC welcomes the clear call made in the Pact for a deepening of the ERA, i.e. moving from the coordination of national policies to the deeper integration of these policies, as well as the call to accelerate the green and digital transition. Until now, R&I in the EU 27 has still mainly been conducted in parallel working silos. These silos now have to be connected by massive ‘communication pipes’ which, in the EESC’s view, must be one of the Pact’s major objectives. Communication and cooperation are key driving forces for R&I. |
| --- | --- |

2.8.

| 2.9. | As pointed out in the new ERA, as well as in the Pact, the EU really needs a new vision, i.e. a New Deal for the EU’s ERA. With just ‘more of the same’ as its old RTI strategy, the EU will continue to fall behind the US and Asia (China, Korea, etc.) in R&I. |
| --- | --- |

2.9.

| 2.10. | Many studies conclude, that knowledge transfer in R&I works primarily via heads, i.e. via job rotation between R&I organisations, as well as between EU Member States on a massive scale. The EESC recommends massively increasing knowledge transfer via heads, i.e. job rotations and researcher mobility programmes within the EU 27 on a huge scale. Knowledge transfer in R&I does not work via large documents: one cannot transfer the knowledge of five years’ R&D work of any researcher by means of a 500-page R&D report. |
| --- | --- |

2.10.

| 2.11. | The Pact refers to the ERA technology roadmaps. To the current knowledge of the EESC, an ERA roadmap for 2015-2020 is available, but the EESC is not aware of any ERA technology roadmap going beyond 2020. Technology strategies have to be planned for the long term, since a new technology does not happen overnight. Technology roadmaps need a lead time of at least 10 years. The EESC therefore encourages the Commission to develop mid-term (2020-2030) and long-term (2020-2050) technology roadmaps following the publication of the new ERA. |
| --- | --- |

2.11.

| 2.12. | The EESC welcomes the reference to the great importance of the so-called ‘knowledge triangle’ (Higher Education, Basic and Applied Research, Commercialisation of new tech by Industry) (4). |
| --- | --- |

2.12.

| 2.13. | The EESC believes that, while it is true that research and (higher) education are key drivers of knowledge creation, they are not the key driver for innovation. Innovation — by definition — means the conversion of R&D results into innovative products and business. It is not the task of universities or of research institutes to develop innovative products and business. In this paragraph, enterprises, especially start-ups and entrepreneurs, are missing and their important role in the innovation process has to be added here. The European Innovation Council (EIC), the European Institute of Innovation and Technology Knowledge and Innovation Communities (EIT KIC) and other innovation schemes play an important role in this context. |
| --- | --- |

2.13.

| 2.14. | According to the famous diagram of Professor Ansoff, only a small share of R&D projects (less than approx. 25 %) eventually yield successful technical products on the market. Thus, one major focus within the EU’s R&I pact and strategy has to be the effectiveness and efficiency of R&I. If, with intelligent means to ensure the effectiveness and efficiency of R&I, its rate of success can be increased from 25 % to e.g. 28 %, this would be an enormous success for Europe. The effectiveness and efficiency of R&I, while maintaining the EU’s strong claim for excellence in research, could also substantially speed up Europe’s R&I, which is desperately needed. |
| --- | --- |

2.14.

| 2.15. | Regarding ‘Values and Principles’, the EESC agrees that the values stated in this chapter are important, but to stop the EU falling behind the USA and Asia in the global R&I competition, additional principles are needed. It is stipulated the new ERA that the EU must speed up the conversion of R&D results into innovative products and services for the global markets. This urgently needed speeding-up requires, among other values and competences, entrepreneurship. Many global studies suggest that the EU is lagging behind substantially compared to the USA and Asia regarding entrepreneurship (e.g. regarding innovative digital business models). |
| --- | --- |

2.15.

| 2.16. | Regarding ‘Value Creation’, the EESC fully agrees on the very high importance of transforming ‘knowledge’ (i.e. R&D-results) into innovative, sustainable products and services. The pact refers to the important role of basic research regarding generating breakthrough discoveries and knowledge. However, creating ‘value for Europe’ needs more than generating breakthrough discoveries: There are — unfortunately — numerous examples in which European researchers have been generating breakthrough discoveries, but entrepreneurs and innovative companies from USA and Asia have been making business and profit out of Europe’s R&D results and the jobs went from Europe to USA and Asia. Europe should not let happen this again. |
| --- | --- |

2.16.

| 2.17. | Europe should in the future make value, business and quality jobs out of Europe’s own R&D-results. One very important tool for making business, profit and jobs for Europe out of Europe’s R&D-results is patents. The great importance of IPR (Intellectual Property Rights) should be added to the paragraph on Value Creation and a clear IPR strategy for Europe should be developed in the framework of the Pact for the new ERA. This active and passive EU patent policy and patent strategy should be accompanied by an active and passive license strategy and a transparent monitoring system for the net global patent and license balance. |
| --- | --- |

2.17.

| 2.18. | In point 2 of the Proposal for a Council Recommendation (5), the priority areas for the EU’s R&I are given. The following priority areas for R&I topics are also given in COM(2020) 628:






  — | Artificial intelligence |
| --- | --- | --- |

2.18.

—

Artificial intelligence

| — | Microelectronics |
| --- | --- |

—

Microelectronics

| — | Quantum Computing |
| --- | --- |

—

Quantum Computing

| — | 5G |
| --- | --- |

—

5G

| — | Renewable energy |
| --- | --- |

—

Renewable energy

| — | Hydrogen technologies |
| --- | --- |

—

Hydrogen technologies

| — | Zero emission and smart mobility |
| --- | --- |

—

Zero emission and smart mobility

| 2.19. | The EESC wishes to reiterate that, while it agrees that these seven priority areas (6) are very important, the following key technologies and sectors should be added:






  — | Space technologies; |
| --- | --- | --- |

2.19.

—

Space technologies;

| — | Clean water and sanitation, |
| --- | --- |

—

Clean water and sanitation,

| — | New, high-tech materials with high future potential for the EU, e.g. Graphene |
| --- | --- |

—

New, high-tech materials with high future potential for the EU, e.g. Graphene

| — | Technologies for manufacturing goods and food; |
| --- | --- |

—

Technologies for manufacturing goods and food;

| — | The clinical research, pharmaceutical and bio-technological sectors; |
| --- | --- |

—

The clinical research, pharmaceutical and bio-technological sectors;

| — | Digital business models in general; |
| --- | --- |

—

Digital business models in general;

| — | Technologies (hardware and software) for emergency preparedness (blackouts, disruption of digital communications e.g. by cyber crime etc.). |
| --- | --- |

—

Technologies (hardware and software) for emergency preparedness (blackouts, disruption of digital communications e.g. by cyber crime etc.).

| 2.20. | The EU 27 — unfortunately — have a significant brain drain of excellent researchers to the USA and increasingly to Asia, too. This brain drain has to be stopped and should be converted into a brain gain. Among others, the following principles are very important for an excellent, globally leading, fast RTI performance:






  — | Recognition and fair remuneration of excellent researchers in the EU 27, in particular excellent female researchers (see poor gender balance in RTI in the EU 27). |
| --- | --- | --- |

2.20.

—

Recognition and fair remuneration of excellent researchers in the EU 27, in particular excellent female researchers (see poor gender balance in RTI in the EU 27).

| — | Efficient Communication, Collaboration and Cooperation (the three important ‘Cs’ of innovation!) |
| --- | --- |

—

Efficient Communication, Collaboration and Cooperation (the three important ‘Cs’ of innovation!)

| — | Increasing EU and national funding for research centres and universities, based on competitive bidding processes, thus insuring that the ‘best-of-the-best’ researchers get the money (not funding by a ‘watering can’ to all research centres). |
| --- | --- |

—

Increasing EU and national funding for research centres and universities, based on competitive bidding processes, thus insuring that the ‘best-of-the-best’ researchers get the money (not funding by a ‘watering can’ to all research centres).

| 2.21. | One major goal of the EU’s new ERA is value creation. Thus, the EESC feels that the paragraph ‘Knowledge Valorisation’ is very important. In this paragraph, the importance of cooperation and interlinkages between all R&I actors is highlighted. This is important, but not enough for ‘Knowledge Valorisation’. |
| --- | --- |

2.21.

| 2.22. | Issues that are equally important for value creation for Europe are:






  — | a commitment to rapid conversion of R&D results into innovative products, services and ultimately into values, business and quality jobs. This requires, inter alia, a much more entrepreneurial culture in Europe as well as a positive attitude to taking risks: fast launch of innovative products always incurs risks too.
  The well-known slogan ‘No risk, no fun’ translates innovation into ‘No risk, no business, no new jobs’; |
| --- | --- | --- |

2.22.

—

a commitment to rapid conversion of R&D results into innovative products, services and ultimately into values, business and quality jobs. This requires, inter alia, a much more entrepreneurial culture in Europe as well as a positive attitude to taking risks: fast launch of innovative products always incurs risks too.

The well-known slogan ‘No risk, no fun’ translates innovation into ‘No risk, no business, no new jobs’;

| — | a clear technology roadmap, especially regarding KETs and FETs (Key Enabling Technologies); |
| --- | --- |

—

a clear technology roadmap, especially regarding KETs and FETs (Key Enabling Technologies);

| — | a clear IPR strategy for the new ERA. |
| --- | --- |

—

a clear IPR strategy for the new ERA.

| 2.23. | Regarding ‘Deepening a truly functioning internal market for knowledge’, knowledge — without any doubt — is very important, since the 21st century is the century of knowledge. However, it is also very important to give a new boost to production of all hardware in Europe. 20 years ago, the EU thought that the production of goods could be moved to Asia, while keeping production-related R&D in Europe. This turned out to be a mistake. R&D always follows production, sooner or later. Thus, to bring back at least a portion of production and its related jobs from Asia to Europe, the EU needs to make great efforts. This would also go a long way towards solving the problem of unemployment, which is a particularly big problem in some countries in Southern Europe. |
| --- | --- |

2.23.

| 2.24. | A lesson which Europe, too, has learned from the corona pandemic: The production of almost all basic medications and vaccines has moved from Europe to Asia in the last 20 or 30 years. Europe has lost its sovereignty in many important products and medicines. Microchips are another example where European industry, especially the car industry, is suffering massively at the moment. Other examples where Europe — unfortunately — is almost fully dependent on Asia are batteries for electric vehicles, hydrogen technologies. (While European car producers still are experimenting with prototypes of hydrogen powered cars, Toyota, Honda and Hyundai already mass produce them and sell them regularly). Asia also is by far the leader in optical technologies, 5G communication technologies, artificial intelligence, machine learning, robotics and many others KETs and FETs (Key Enabling and Future Technologies). In the Pact for R&I Europe must make regaining sovereignty in key technologies a clear priority. |
| --- | --- |

2.24.

| 2.25. | Europe is on the one hand facing the challenge of high unemployment among young people, especially in some countries in Southern Europe and, on the other, the challenge of a shortage of highly qualified STEM (Science, Technology, Engineering, Mathematics) graduates, especially a severe shortage of engineers in all fields of ICT and digitalisation, e-mobility and in technologies for renewable energies. It is often forgotten that it is primarily engineers that convert R&D results achieved by researchers into technical products. Due to demographic changes (our ageing society) and due to the fact that most countries in Europe are failing to attract more women students to engineering studies, this problem will increase in the near future. Of course, measures to attract more women students to engineering studies have to be increased in the EU on a huge scale. In addition, smart programmes for attracting highly-qualified engineers from non-EU Member States have to be generated by the Pact for R&I. The global RTI-competition will increasingly become a global talent war, and up to now, the EU has performed badly in this global talent war for talents compared to the US, for example. |
| --- | --- |

2.25.

| 2.26. | Last but not least, the EESC wishes to point out that EU’s Pact for R&I and its new ERA should be designed and implemented in agreement with the United Nations’ 17 Sustainable Development Goals, which aim to achieve decent lives for all on a healthy planet by 2030. |
| --- | --- |

2.26.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  EESC opinion on A new European Research Area (ERA) for Research and Innovation (OJ C 220, 9.6.2021, p. 79).

1

A new European Research Area (ERA) for Research and Innovation

(2)  COM(2020) 628.

2

(3)  Source: https://erc.europa.eu/news/pact-research-innovation-foundations-european-research-area-still-valid-and-unavoidable

3

(4)  As highlighted in point 2(h) of the Proposal for a Council Recommendation (COM(2021) 407). Paragraph (h) reads: ‘Research and innovation and (higher) education are key drivers of innovation, knowledge creation, diffusion and use.’

4

(5)  COM(2021) 407.

5

(6)  As given in COM(2020) 628.

6

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/30 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/30

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on European Missions

(COM(2021) 609 final)

(2022/C 275/05)

| Rapporteur: | Paul RÜBIG |
| --- | --- |
| Co-rapporteur: | Małgorzata Anna BOGUSZ |

Rapporteur:

Paul RÜBIG

Co-rapporteur:

Małgorzata Anna BOGUSZ

| Referral | European Commission, 1.12.2021 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 3.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 214/1/3 |

Referral

European Commission, 1.12.2021

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Single Market, Production and Consumption

Adopted in section

3.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

214/1/3

1.   Conclusions and recommendations

| 1.1. | While the EESC feels that the five missions presented in the communication are high priorities for the EU, the EESC also considers the five challenges and objectives listed below to be very important for Europe. |
| --- | --- |

1.1.

Develop and pursue missions and measures to:

| 1. | keep up with the USA and Asia in global competition in the areas of research, technology and innovation (RTI); |
| --- | --- |

1.

keep up with the USA and Asia in global competition in the areas of research, technology and innovation (RTI);

| 2. | cope with the challenges linked to the EU’s ageing society; |
| --- | --- |

2.

cope with the challenges linked to the EU’s ageing society;

| 3. | define strategies for the successful integration of the high number of migrants coming into the EU; |
| --- | --- |

3.

define strategies for the successful integration of the high number of migrants coming into the EU;

| 4. | improve emergency preparedness; |
| --- | --- |

4.

improve emergency preparedness;

| 5. | cope with the needs of patients with non-communicable diseases (NCD) impacted by the COVID-19 pandemic, especially those who suffer from cardio-vascular disease. |
| --- | --- |

5.

cope with the needs of patients with non-communicable diseases (NCD) impacted by the COVID-19 pandemic, especially those who suffer from cardio-vascular disease.

| 1.2. | The communication lists and addresses five priority EU Missions:






  1. | Adaptation to climate change; |
| --- | --- | --- |

1.2.

1.

Adaptation to climate change;

| 2. | Cancer; |
| --- | --- |

2.

Cancer;

| 3. | Restore our ocean and waters by 2030, including sanitation; |
| --- | --- |

3.

Restore our ocean and waters by 2030, including sanitation;

| 4. | 100 climate-neutral and smart cities by 2030, including smart villages; |
| --- | --- |

4.

100 climate-neutral and smart cities by 2030, including smart villages;

| 5. | A soil deal for Europe. |
| --- | --- |

5.

A soil deal for Europe.

| 1.3. | The EESC strongly supports the idea of empowering 150 climate benchmark regions throughout Europe. However, this will require a huge R&D budget. The EESC therefore strongly recommends increasing the portion of the EU regional budgets earmarked for R&D from the current figure of 5 % to a minimum of 10 %. |
| --- | --- |

1.3.

| 1.4. | The EESC welcomes the fact that the EU is focusing on fighting cancer as one of the most important health issues, and wishes to encourage the EU institutions to undertake similar steps with respect to cardio-vascular diseases — the number one killer of European citizens and around the world. |
| --- | --- |

1.4.

2.   General comments

| 2.1. | EU Missions will deliver results through a new role for research and innovation under the Horizon Europe programme, combined with a coordinated, all-in approach, and a new relationship with citizens. They will fully mobilise and engage with public and private actors, such as EU Member States, regional and local authorities, research institutes, entrepreneurs, and public and private investors, all to create real and lasting impact. |
| --- | --- |

2.1.

| 2.2. | The EESC would like to highlight that the competitiveness of Europe’s industry is very important in order to achieve the EU’s Missions. The EESC therefore welcomes the reference to the new industrial competitiveness agenda. At the same time, the EESC underlines the importance of considering the impact on EU citizens and encourages the Commission to strongly link activities to social policies and the European Pillar of Social Rights, taking in particular into account the special needs of elderly and vulnerable EU citizens. |
| --- | --- |

2.2.

| 2.3. | The EESC wishes to highlight that, while the major focus of the European Missions is delivering impact for the EU through a new and greater role for research and innovation, the economic dimension (global competition, high quality jobs etc.) as well as the social dimension also have to play a major role within these European Missions. As far as the social dimension is concerned, the EESC would like to emphasise that besides the importance of social rights and the safe-guarding of the social security and fair working conditions for all employees, special attention has to be paid to the special needs of vulnerable groups in the EU (elderly people, sick people etc.) |
| --- | --- |

2.3.

| 2.4. | The EESC very much welcomes the fact that R&I is clearly seen as the core issue of the EU Missions document. The EESC is convinced that complex challenges lying ahead of the EU can be addressed primarily through R&I. |
| --- | --- |

2.4.

| 2.5. | The EESC adopted its opinion on A new ERA for Research and Innovation in March 2021 (1), an opinion on the Pact for Research and Innovation in Europe, in February 2022 (2), and an opinion on An intellectual property action plan to support the EU's recovery and resilience (3). The present opinion should be seen in close conjunction with these three recent EESC opinions. |
| --- | --- |

2.5.

| 2.6. | The EESC fully agrees that, due to the current challenges, ‘continuing with the status quo is not an option’. Europe needs ‘a new kind of research and innovation policy’: if the EU continues with more of the same of its ‘old’ R&I policy, it will not be able to tackle the huge challenges facing it, namely fierce competition from Asia. The EESC pointed this out very clearly in its opinion on A new ERA for Research and Innovation. |
| --- | --- |

2.6.

| 2.7. | Regarding enterprises, the communication states that the European Missions will fully mobilise and engage with public and private stakeholders, such as the EU Member States, regional and local authorities, research institutes, entrepreneurs and public and private investors, EU citizens and civil society, all to create real and lasting impact, taking into account industry and businesses, particularly MSMEs. |
| --- | --- |

2.7.

| 2.8. | The competitiveness of the EU’s industry regarding technologies for the decarbonisation of electricity generation as well as of other CO2 intensive industries is a decisive factor in achieving the EU’s Mission 1 — ‘Adaptation to climate change’. If the EU does not succeed, it will lose millions of job in these industries. |
| --- | --- |

2.8.

| 2.9. | The EESC also fully agrees that the EU Missions must be fully consistent with the United Nations sustainable development goals (SDGs). |
| --- | --- |

2.9.

| 2.10. | While the EESC feels that the five missions are high priorities for the EU, it considers the additional five challenges and missions listed in chapter 4 to also be very important for Europe. |
| --- | --- |

2.10.

| 2.11. | The EESC recommends that the European Commission also prioritise missions and measures that generate new, high-quality jobs, business, income, wealth and a high quality of living for EU citizens, such as maintaining the competitiveness of Europe’s technological products against increasingly fierce global competition (especially with China, South Korea, etc.). |
| --- | --- |

2.11.

| 2.12. | A substantial amount of Europe’s jobs and wealth stems from exports of Europe’s technological products (cars, machinery, materials, etc.). Another important source of new jobs in Europe are MSMEs, innovative start-ups, scale-ups and higher education. |
| --- | --- |

2.12.

3.   Specific comments

3.1.   Mission 1 — Adaptation to Climate Change

| 3.1.1. | Climate change is one of the biggest challenges for humanity in the 21st century. Policy makers will need to anticipate the changes ahead in order to protect the sectors and groups most at risk, also considering employment. |
| --- | --- |

3.1.1.

| 3.1.2. | With almost all Green Deal measures, prices for electricity, fuel, domestic heating etc. increase for EU citizens. These price increases have a particularly high impact on the hundreds of millions of people within the EU Member States with low and medium incomes and vulnerable people in general, which often are low-income EU citizens. This means that all Green Deal measures have a significant social impact and must be handled carefully. They must increase prosperity instead of sidelining those who need support to tackle the change. |
| --- | --- |

3.1.2.

| 3.1.3. | Examples of new technologies that will certainly play a very important role in reducing CO2 emissions include:






  — | decarbonisation of electricity generation; |
| --- | --- | --- |

3.1.3.

—

decarbonisation of electricity generation;

| — | decarbonisation of CO2-emitting industries, e.g. the steel industry, the cement industry, etc.; |
| --- | --- |

—

decarbonisation of CO2-emitting industries, e.g. the steel industry, the cement industry, etc.;

| — | carbon capture and storage (CCS) and, for example, sewage treatment plants; |
| --- | --- |

—

carbon capture and storage (CCS) and, for example, sewage treatment plants;

| — | storage of electric power on a very large scale for low specific costs; |
| --- | --- |

—

storage of electric power on a very large scale for low specific costs;

| — | e-mobility; |
| --- | --- |

—

e-mobility;

| — | smart grids and high-voltage power grids; |
| --- | --- |

—

smart grids and high-voltage power grids;

| — | smart cities, etc. |
| --- | --- |

—

smart cities, etc.

| 3.1.4. | These technologies are easy to list on paper, but implementing them is undoubtedly a huge challenge, given the scale needed for all 27 EU Member States as well as globally. |
| --- | --- |

3.1.4.

| 3.1.5. | One key issue in this global competition regarding new technologies will be the availability of a high number of researchers and engineers. This is definitely a huge challenge for Europe. Countries in Asia, have increased the number of students in physics, ICT and engineering massively over the last 20 years, whereas numbers have been more or less stagnant in Europe. The European Missions should not only promote an increase in the number of these students, but the EU should promote a change in the current ‘brain drain’ of highly qualified people into a ‘brain gain’ for the EU. |
| --- | --- |

3.1.5.

| 3.1.6. | The EESC strongly recommends that the Commission define measures to substantially improve basic skills as well as increase the number of students in physics, ICT and engineering, and also in medicine and pharmacology in Europe in the next 20 years. Without this engineering brain trust, Europe will continue to fall behind in all technologies needed to fight climate change. |
| --- | --- |

3.1.6.

3.2.   Mission 2 — Cancer

| 3.2.1. | The EU 27 is witnessing steadily increasing numbers of cancer cases. The EU 27 must work together on improving diagnosis, therapy, access to personalised medicines, treatment and prevention — as was already emphasised in the EESC’s opinion on Europe’s Beating Cancer Plan in June 2021 (4). Therefore, the EESC welcomes the fact that research for cancer prevention and cure has been indicated as one of the five EU Missions |
| --- | --- |

3.2.1.

| 3.2.2. | The EESC wants to clearly emphasise that one of the toughest challenges will be to level out the disparities in access to cancer treatment between individual countries. The EESC advises that a special focus has to be put on vulnerable groups within the EU. |
| --- | --- |

3.2.2.

| 3.2.3. | As was already described in the EESC opinion on Europe’s Beating Cancer Plan, access to the most innovative therapies and the introduction of vaccination campaigns that will enable us to reduce the number of cancers caused by viral infections play a unique role here. |
| --- | --- |

3.2.3.

| 3.2.4. | The EESC wants to emphasise the need of a more active approach towards prevention of occupational cancer. As it was stressed in the opinion Europe’s Beating Cancer Plan, the EESC calls for more research into occupational exposure to carcinogens, mutagens and endocrine disruptors and the causes of occupational cancers. |
| --- | --- |

3.2.4.

| 3.2.5. | The EESC wants to stress that social partners, patient advocacy groups and civil society organisations have an indispensable role to play by disseminating best practices and providing relevant information — about the causes of cancer and about special issues relating to, for example, gender or vulnerable groups, |
| --- | --- |

3.2.5.

3.3.   Mission 3 –Restore our Ocean and Waters by 2030

| 3.3.1. | Clean water is of major importance for EU citizens, agriculture and for its fishing industry. Again, research and clean water technologies, including waste water mining, sanitation and sewage treatment are key for this mission. |
| --- | --- |

3.3.1.

| 3.3.2. | Furthermore, access to clean water still is an issue for many citizens. The EESC encourages the Commission to legally implement the human rights to water and sanitation. |
| --- | --- |

3.3.2.

3.4.   Mission 4 — 100 Climate-Neutral and Smart Cities by 2030

| 3.4.1. | More than 65 % of the global population lives in large cities, and this percentage is growing. These large cities impose growing challenges in terms of infrastructure (water supply and sewage, transport, energy supply, etc.) and quality of life. Many of the challenges can only be solved by research and high-tech solutions. Much more highly-skilled engineers will be needed in the future to plan these high-tech smart cities and villages. |
| --- | --- |

3.4.1.

| 3.4.2. | The proportion of older people in cities is growing fast (‘ageing society’). Older people and vulnerable people have needs differing from young people: they need more medical care, social care, etc. Due to the demographic shift in society, there will not be enough young people to provide all these services in the near future, which mean that some of these services for older people will have to be taken over by smart solutions (e.g. robots). |
| --- | --- |

3.4.2.

| 3.4.3. | Many emergencies within recent years have shown that modern societies are relatively vulnerable, thus increasing ‘emergency preparedness’ through R&D is very important:






  — | disasters in the nuclear power plants in Fukushima, Chernobyl, Three Mile Island etc.; |
| --- | --- | --- |

3.4.3.

—

disasters in the nuclear power plants in Fukushima, Chernobyl, Three Mile Island etc.;

| — | electricity blackouts and communication blackouts; |
| --- | --- |

—

electricity blackouts and communication blackouts;

| — | shortages of and steep price increases in all energy sources, including natural gas; |
| --- | --- |

—

shortages of and steep price increases in all energy sources, including natural gas;

| — | thunderstorms and massive floods, with many hundreds of people killed; |
| --- | --- |

—

thunderstorms and massive floods, with many hundreds of people killed;

| — | pandemics, such as the COVID-19 pandemic, Zika and future pandemics; |
| --- | --- |

—

pandemics, such as the COVID-19 pandemic, Zika and future pandemics;

| — | cyber-attacks (with the massively growing digitalisation of everything in public life, private life and business, the threat of cyber-attacks is growing rapidly). |
| --- | --- |

—

cyber-attacks (with the massively growing digitalisation of everything in public life, private life and business, the threat of cyber-attacks is growing rapidly).

| 3.4.4. | Eastern and southern Europe barely escaped a huge power blackout on 8 January 2021. The root cause for the increasing vulnerability of Europe’s power supply is the increasing share of unpredictable and unplannable renewable electric power, such as wind turbines and solar power. Europe is not very well prepared for blackouts: in the event of a blackout, the energy supply to private households and industry breaks down immediately, communication breaks down within minutes or hours, the supply of drinking water breaks down within a short time etc. Recovering from a major electricity blackout is not an easy task. |
| --- | --- |

3.4.4.

3.5.   Mission 5 — A Soil Deal for Europe

| 3.5.1. | Along with clean water, as mentioned above, healthy soil to grow the basic ingredients for food is one of the most important resources for all living creatures, including humans and animals. The global population is growing: by the end of the century we will need to feed approximately 10 billion people on a sustainable basis. Conventional food and farming are one of the major sources of the greenhouse gases CO2 and methane. This means that a large amount of R&D is needed to research and develop climate neutral agriculture for the sustainable production of food for the 10 billion people living on the globe. Currently, approximately 10 % of the EU’s budget for agriculture and farming is spent on R&D; the EESC recommends increasing this figure to a minimum of 20 % to increase R&D for new, sustainable farming technologies, including in particular robotics in farming technologies and food. |
| --- | --- |

3.5.1.

4.   Five additional missions

| 4.1. | While the EESC considers the five missions listed in the communication to be high priorities for the EU, it feels that the 5 challenges and missions described below are also of high importance. |
| --- | --- |

4.1.

4.2.   Additional EU Mission 1 — Keeping up with the USA and Asia in the global competition in RTI

| 4.2.1. | It is important to define and pursue missions and measures to prevent the EU falling behind Asia in research, technology, innovation (RTI) and patents, especially in comparison with China and South Korea. It is a fact that the EU has been falling behind China and South Korea regarding RTI at an increasing pace since approximately 2000 (5). |
| --- | --- |

4.2.1.

| 4.2.2. | If the EU continues to fall behind the USA and Asia in RTI, Europe will lose millions of jobs and considerable wealth in the long run (20 to 50 years). The shortfall of the EU27 really is critical, especially in key enabling technologies (KETs) and future emerging technologies (FETs), such as artificial intelligence, machine learning, deep learning, robotics, genetic engineering, communication technologies (e.g. 5G), computer chip manufacturing, manufacturing of key components for e-mobility (e.g. batteries, fuel cells and hydrogen), etc. New materials have always been and will always be a driver for innovation: for example, graphene innovation and its industrial upscaling has substantial potential for research and innovation for Europe. |
| --- | --- |

4.2.2.

4.3.   Additional EU Mission 2 — Coping with the challenges of the EU’s ageing society

| 4.3.1. | EU society is ageing fast, and this will create several new challenges for all EU Member States. |
| --- | --- |

4.3.1.

| 4.3.2. | Older people and vulnerable people have different needs from young people: they need more and new medicine (for dementia, Alzheimer’s disease, etc.), more medical care, more social care, and special training and education, especially designed for older and vulnerable people, etc. |
| --- | --- |

4.3.2.

| 4.3.3. | Research and innovation (in medicine, pharmaceuticals, social sciences, engineering sciences, special training courses etc.) will undoubtedly play a major role in helping cope with the EU’s ageing society. |
| --- | --- |

4.3.3.

| 4.3.4. | Society as a whole needs an ambitious European care strategy. |
| --- | --- |

4.3.4.

4.4.   Additional EU Mission 3 — Strategies for the successful integration of the high number of migrants coming into the EU

| 4.4.1. | The EU needs to develop missions and measures for the integration of this high number of migrants into the EU Member States. Since the EU is a rapidly ageing society, it needs more young, well-educated people. Thus, innovative concepts for educating and training migrants are needed. Socioeconomic research can help develop a better understanding of what is needed for the successful integration of these millions of people. |
| --- | --- |

4.4.1.

4.5.   Additional EU Mission 4 — Emergency Preparedness

| 4.5.1. | Emergency preparedness involves developing and pursuing missions and measures to safeguard a stable energy supply and to avoid electricity blackouts, while decarbonising the EU’s energy system. In this regard, see point 3.4.4, which addresses the issue of emergency preparedness, especially the challenge of electricity blackouts and communication blackouts. Again, research and innovation, primarily in the engineering sciences, is the key to addressing these challenges. |
| --- | --- |

4.5.1.

| 4.5.2. | Other emergency challenges include floods, droughts, pandemics, but also economic emergency situations, e. g. the blocking of global supply chains (e.g. the blocking of the Suez Canal in 2021, etc.) |
| --- | --- |

4.5.2.

4.6.   Additional EU Mission 5 — Coping with the needs of patients with non-communicable diseases (NCD) impacted by the COVID-19 pandemic, especially those suffering from cardio-vascular disease — the number one cause of death of European citizens and globally.

| 4.6.1. | After the pandemic, more focus is needed on non-communicable diseases (NCD). In the EU there are 60 million people living with cardio-vascular diseases (CVD) — it is the number one killer of European citizens. In non-COVID-19 years, CVD is the most common cause of preventable deaths in the EU. During the pandemic, many of these patients have been diagnosed too late or did not have a chance to be diagnosed at all. |
| --- | --- |

4.6.1.

| 4.6.2. | We should look into the health equity dimension in the EU, thus supporting the reduction of health inequalities, including aspects of gender medicine. While focusing on promotion and prevention, this initiative should also support better knowledge and data, screening and early detection, diagnosis and treatment management, and patient quality of life. Another objective should be helping EU countries to transfer best practices, develop guidelines, and roll out innovative approaches, etc. This also means that the EU should name another European mission — to build healthcare systems that are more resilient to pandemics when it comes to cardio-vascular disease, in line with the efforts of the cancer mission, ultimately addressing the two NCDs with the highest burden on the European population. We also see a need to address other diseases, especially those which heavily impact European GDP — e.g. musculoskeletal conditions. |
| --- | --- |

4.6.2.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ C 220, 9.6.2021, p. 79.

1

(2)  Opinion of the European Economic and Social Committee on Council recommendation on a Pact for Research and Innovation in Europe (COM(2021) 407 final — final 2021/230 (NLE)) (OJ C 275, 18.7.2022, p. 24).

2

(COM(2021) 407 final — final 2021/230 (NLE))

(3)  OJ C 286, 16.7.2021, p. 59.

3

(4)  OJ C 341, 24.8.2021, p. 76.

4

(5)  Details can be read e.g. in the OECD STI-Reports 2015 and 2017.

5

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/36 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/36

---

Opinion of the European Economic and Social Committee on

Proposal for a Directive of the European Parliament and of the Council amending Directives 2001/20/EC and 2001/83/EC as regards derogations from certain obligations concerning certain medicinal products for human use made available in the United Kingdom in respect of Northern Ireland, as well as in Cyprus, Ireland and Malta

[COM(2021) 997 final — 2021/0431 (COD)]

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 536/2014 as regards a derogation from certain obligations concerning investigational medicinal products made available in the United Kingdom with respect to Northern Ireland as well as in Cyprus, Ireland and Malta

[COM(2021) 998 final — 2021/0432 (COD)]

(2022/C 275/06)

| Rapporteur: | Martin SCHAFFENRATH |
| --- | --- |

Rapporteur:

Martin SCHAFFENRATH

| Referral | a) | European Parliament, 20.1.2022 |
| --- | --- | --- |

Referral

a)

European Parliament, 20.1.2022

| b) | Council, 3.2.2022 |
| --- | --- |

b)

Council, 3.2.2022

Legal basis

| a) | Article 114 of the Treaty on the Functioning of the European Union |
| --- | --- |

a)

Article 114 of the Treaty on the Functioning of the European Union

| b) | Articles 114 and 168(4)(c) of the Treaty on the Functioning of the European Union |
| --- | --- |

b)

Articles 114 and 168(4)(c) of the Treaty on the Functioning of the European Union

Section responsible

Single Market, Production and Consumption

Adopted in section

3.2.2022

Date adopted in plenary

24.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

180/0/4

1.   Conclusions and recommendations

| 1.1. | The continued supply of high-quality, effective and safe medicinal products for human use is key to ensuring access to healthcare for patients. The European Economic and Social Committee (EESC) therefore welcomes the package of measures presented by the European Commission on 17 December 2021 aimed, on the one hand, at ensuring the long-term uninterrupted supply of medicinal products from the UK to Northern Ireland and, on the other hand, at addressing in a timely manner the remaining supply shortages in Cyprus, Ireland and Malta resulting in part from the UK’s withdrawal from the European Union. |
| --- | --- |

1.1.

| 1.2. | The EESC recognises that the smaller EU Member States of Cyprus, Ireland and Malta in particular are historically heavily dependent on the supply of medicinal products and investigational medicinal products from the UK. |
| --- | --- |

1.2.

| 1.3. | The EESC believes that the amendments in the package of measures introducing derogations from certain obligations concerning medicinal products and investigational medicinal products made available in the UK in respect of Northern Ireland, as well as in Cyprus, Ireland and Malta, are appropriate due to the UK’s withdrawal from the EU and the related framework conditions, and the EESC therefore fully supports them. |
| --- | --- |

1.3.

| 1.4. | The EESC stresses in particular the central role of a functioning, fair and efficient single market. The top priority must be compliance with EU legislation relevant to medicinal products and investigational medicinal products, in particular with regard to the quality and safety of the products concerned. At the same time, the EESC also welcomes the packaging requirements for UK products included in the package, in order to avoid additional repackaging, which could lead to the withdrawal of medicines from the Northern Ireland market due to the additional costs entailed and the complexity of the process. |
| --- | --- |

1.4.

| 1.5. | However, with regard to the temporary derogations for Cyprus, Ireland and Malta, the EESC draws attention to the need for a timely and sustainable solution, which should be developed within the framework of the Pharmaceutical Strategy for Europe, in order to ensure the long-term supply of medicinal products authorised in the EU to patients in the aforementioned Member States. |
| --- | --- |

1.5.

2.   Context of the Commission’s proposals

| 2.1. | In accordance with the Protocol on Ireland/Northern Ireland to the UK Withdrawal Agreement (1), medicinal products placed on the market in Northern Ireland must hold a valid marketing authorisation granted by the Commission (EU marketing authorisations) or the UK for Northern Ireland. These national authorisations must comply with EU legislation on medicinal products. The importation of investigational medicinal products from third countries into the EU or Northern Ireland is also subject to the possession of a manufacturing and import licence. These must comply with the requirements of established EU law on clinical trials. |
| --- | --- |

2.1.

| 2.2. | Cyprus, Ireland, Malta and Northern Ireland have always depended on the supply of medicinal products, including investigational medicinal products, from or through parts of the UK other than Northern Ireland, and the supply chains for these markets have not yet been fully aligned with EU law and the altered situation following the UK’s withdrawal from the European Union. |
| --- | --- |

2.2.

| 2.3. | The Commission Notice of 25 January 2021 (2) provides for a grace period of one year (until the end of December 2021) for the maintenance of batch testing and manufacturing/logistics in parts of the UK other than Northern Ireland, in order to ensure the uninterrupted supply of medicinal products to Northern Ireland, Cyprus, Ireland and Malta. This Notice also applies to import requirements for investigational medicinal products, in order to ensure their uninterrupted supply to Northern Ireland, Cyprus, Ireland and Malta. |
| --- | --- |

2.3.

| 2.4. | Despite the transition period, it is still very difficult for certain economic operators currently established in parts of the UK other than Northern Ireland to adapt to the requirements of the Protocol. The main reasons for this are the high costs of such adaptation relative to the small size of the Northern Ireland market, which represents 3 % of the total UK market, and the complex logistics, for which no viable alternative logistical hubs have been identified in Northern Ireland. |
| --- | --- |

2.4.

| 2.5. | The aim of these proposals is, firstly, to solve the problems regarding medicinal products for human use, to avoid shortages of medicinal products and to ensure adequate protection of public health in Northern Ireland, Cyprus, Ireland and Malta. In addition, the problems relating to investigational medicinal products also need to be addressed in order to prevent an adverse impact on their supply and, as a result, on the carrying out of clinical trials authorised under Regulation (EU) No 536/2014 (3) in Northern Ireland, Cyprus, Ireland and Malta. |
| --- | --- |

2.5.

3.   General comments

| 3.1. | The EESC therefore welcomes this package of measures. Ensuring the supply of medicines and protecting public health are fundamental concerns of the Committee. |
| --- | --- |

3.1.

| 3.2. | The EESC considers the UK’s withdrawal from the EU to be a very complex and difficult exercise. It is true that the EU-UK Trade and Cooperation Agreement (4) and its Protocol on Ireland/Northern Ireland (5) govern most of the future relationship between the two parties. As the one-year transition period provided for has proved insufficient to adapt to the new requirements in order to ensure the uninterrupted supply of medicinal products and investigational medicinal products to Northern Ireland, Cyprus, Ireland and Malta, swift and targeted action is now needed in order to mitigate the economic and health impacts. |
| --- | --- |

3.2.

| 3.3. | The EESC believes that the following key elements of the package should be highlighted in particular:






  — | uninterrupted supply of medicinal products from the UK to Northern Ireland, provided they comply with EU legislation; |
| --- | --- | --- |

3.3.

—

uninterrupted supply of medicinal products from the UK to Northern Ireland, provided they comply with EU legislation;

| — | further recognition of batch testing by a qualified person who is established in a part of the UK other than Northern Ireland and is responsible for batch testing and pharmacovigilance, in order to avoid duplication of work in the future; |
| --- | --- |

—

further recognition of batch testing by a qualified person who is established in a part of the UK other than Northern Ireland and is responsible for batch testing and pharmacovigilance, in order to avoid duplication of work in the future;

| — | maintaining the possibility of retaining packaging for Northern Ireland and the UK and at the same time being able to apply for a marketing authorisation through the decentralised or national authorisation procedure; |
| --- | --- |

—

maintaining the possibility of retaining packaging for Northern Ireland and the UK and at the same time being able to apply for a marketing authorisation through the decentralised or national authorisation procedure;

| — | appropriate measures to adapt the requirements of Directive 2011/62/EU (‘Falsified Medicines Directive’) (6) to further ensure the safety of medicinal products in Northern Ireland and to prevent them being distributed to the rest of the EU. |
| --- | --- |

—

appropriate measures to adapt the requirements of Directive 2011/62/EU (‘Falsified Medicines Directive’) (6) to further ensure the safety of medicinal products in Northern Ireland and to prevent them being distributed to the rest of the EU.

| 3.4. | In the context of the EU single market, the EESC stresses that, when implementing the package of measures, it must in all circumstances be ensured that the relevant medicinal products and investigational medicinal products from the UK remain in Northern Ireland and are not marketed in other parts of the single market, unless they have been authorised by a national competent authority in accordance with EU legislation. The same applies for the transitional period of three years for Cyprus, Ireland and Malta. The overriding principle here must be that these medicinal products and investigational medicinal products serve only to supply patients resident in those countries. |
| --- | --- |

3.4.

| 3.5. | In this connection, the EESC also particularly welcomes the principle of transparency through the requirement for the competent authorities in Northern Ireland and the EU Member States concerned to draw up and publish a list of relevant medicinal products and investigational medicinal products, in order to ensure the protection of health in the EU and to prevent those medicinal products from entering other Member States. |
| --- | --- |

3.5.

| 3.6. | The EESC also supports in particular the proposed derogations from Directive 2011/62/EU (‘Falsified Medicines Directive’), which aim to allow manufacturers to maintain the unique identifiers required for the EU for medicinal products, even if they are imported into Northern Ireland by other EU Member States via the UK, and for a period of three years into Cyprus, Ireland and Malta. The EESC also supports the proposed mechanism whereby pharmacists and hospitals in the EU (except Northern Ireland, Cyprus, Ireland and Malta) are informed via the European Medicines Verification System as soon as a medicinal product authorised in the UK for Northern Ireland is scanned. This will clearly indicate to end-users that such a package of medicinal products may not be intended for supply in the EU. |
| --- | --- |

3.6.

| 3.7. | With regard to possible transitional solutions to ensure that patients in Northern Ireland are on the same footing as those in the rest of the UK, the EESC also welcomes the proposed derogation for the temporary importation of new patented medicinal products authorised in the UK until the EU has also granted a marketing authorisation. |
| --- | --- |

3.7.

4.   Specific comments

| 4.1. | In the EESC’s view, all concerns of the affected stakeholders have been fully taken into account with a view to ensuring the uninterrupted supply of medicinal products and investigational medicinal products to Northern Ireland and other smaller, similarly affected Member States. However, the EESC proposes a few clarifications below, which could be included in the accompanying guidelines. |
| --- | --- |

4.1.

| 4.2. | Of particular note is recital 7 of the proposal for a Directive, which provides an important clarification regarding the retention of the regulatory requirements for batch testing and pharmacovigilance in the UK for exports to Northern Ireland. It is important to clarify that any regulatory function carried out in a part of the UK other than Northern Ireland in the context of authorisation for marketing in the UK in Northern Ireland can be used for both current and future national marketing authorisations and for marketing authorisations via the decentralised procedure and/or the mutual recognition procedure. This must be firmly embedded both in the proposal for a Directive and in the corresponding guidelines. |
| --- | --- |

4.2.

| 4.3. | The EESC draws particular attention to Article 2 of the proposal for a Directive (introducing an Article 5a into Directive 2001/83/EC), as proposed by the European Commission, concerning exemptions from certain obligations for certain medicinal products for human use made available in the UK. In all circumstances, it must be ensured that affected medicines exported from the UK to Northern Ireland (and for the three-year transition period to Cyprus, Ireland and Malta) remain in these markets and do not end up on the market in other parts of the single market. |
| --- | --- |

4.3.

| 4.4. | The EESC considers that further clarification is needed as regards the quality control testing provided for in Article 2(4) of the proposal for a Directive (amendment of Article 20 of Directive 2001/83/EC) for medicinal products authorised through the EU’s centralised procedure but manufactured in the UK (other than in Northern Ireland) instead of in an EU Member State and from there imported directly into Northern Ireland. |
| --- | --- |

4.4.

| 4.5. | The EESC also recommends further clarification with regard to Article 2(5) of the proposal for a Directive (amendment of Article 40 of Directive 2001/83/EC) concerning the need for an undertaking established in a part of the UK other than Northern Ireland to have a wholesale distribution authorisation in order to export/import to Northern Ireland. It should be noted that it should continue to be possible to import medicinal products from a facility in the UK to Northern Ireland with a wholesale distribution authorisation issued by a UK authority. |
| --- | --- |

4.5.

| 4.6. | The Committee also supports Article 2(9), which makes it possible for the qualified person responsible for batch testing and pharmacovigilance in a company to continue to be located in parts of the UK other than Northern Ireland. However, the EESC calls for further clarification, where appropriate in appended guidelines, on the actual implementation of this rule in practice. |
| --- | --- |

4.6.

| 4.7. | Finally, the EESC stresses that it is particularly important to make a clear distinction between the Commission Notice of 25 January 2021 (7), which temporarily allows the economic operators concerned to continue to supply medicinal products and investigational medicinal products in Northern Ireland, and the provisions of this package of measures. The EU is requested to ensure a high level of legal certainty for marketing authorisation holders, wholesalers and pharmacists during this transition period between the aforementioned derogation and the adoption and implementation of the amendments through the proposal for a Directive and the proposal for a Regulation. |
| --- | --- |

4.7.

Brussels, 24 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ L 29, 31.1.2020, p. 7.

1

(2)  Commission Notice — Application of the Union’s pharmaceutical acquis in markets historically dependent on medicines supply from or through Great Britain after the end of the transition period (OJ C 27, 25.1.2021, p. 11).

2

acquis

(3)  Regulation (EU) No 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use, and repealing Directive 2001/20/EC (OJ L 158, 27.5.2014, p. 1).

3

(4)  Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the One Part, and the United Kingdom of Great Britain and Northern Ireland, of the Other Part (OJ L 444, 31.12.2020, p. 14).

4

(5)  OJ L 29, 31.1.2020, p. 7.

5

(6)  OJ L 174, 1.7.2011, p. 74.

6

(7)  Commission Notice — Application of the Union’s pharmaceutical acquis in markets historically dependent on medicines supply from or through Great Britain after the end of the transition period (OJ C 27, 25.1.2021, p. 11).

7

acquis

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/40 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/40

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament and the Council Business Taxation for the 21st Century

(COM(2021) 251 final)

(2022/C 275/07)

| Rapporteur: | Krister ANDERSSON |
| --- | --- |

Rapporteur:

Krister ANDERSSON

| Referral | European Commission, 01/07/2021 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Bureau decision | 8.6.2021 |
| Section responsible | Economic and Monetary Union and Economic and Social Cohesion |
| Adopted in section | 8.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 216/00/07 |

Referral

European Commission, 01/07/2021

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Bureau decision

8.6.2021

Section responsible

Economic and Monetary Union and Economic and Social Cohesion

Adopted in section

8.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

216/00/07

1.   Conclusions and recommendations

| 1.1. | The EESC welcomes the long-awaited Commission initiative for the strategy on business taxation in the 21st century. The EESC strongly supports and appreciates the fact that the Commission is aligning its work with the international discussions and agreements. |
| --- | --- |

1.1.

| 1.2. | The EESC underlines the need to facilitate cross-border investments and to reduce compliance costs for businesses, while making the European economy greener and more digitalised. |
| --- | --- |

1.2.

| 1.3. | The EESC encourages the Commission to pursue its Action Plan for Fair and Simple Taxation Supporting the Recovery Strategy (1), taking into consideration the EESC opinion Package for fair and simple taxation (2). |
| --- | --- |

1.3.

| 1.4. | The EESC welcomes the G20 Finance Ministers’ endorsement of the agreement signed on 8 October 2021 by 136 out of 140 countries in the Inclusive Framework to reach a global and consensus-based package solution on how to allocate taxation rights among countries. At the same time, the EESC underlines the effects of the complexity of such ambitious objectives, calling for uniform and globally concerted and coordinated implementation of Pillars 1 and 2 (the package). |
| --- | --- |

1.4.

| 1.5. | The EESC emphasises the need for implementation of the tax package both in the EU and, at the same time, in major trading partner countries. If Pillar 1 is not implemented in the US and other major trading partners at the same time, European businesses may be at a competitive disadvantage. |
| --- | --- |

1.5.

| 1.6. | The EESC underlines the importance of having exactly the same rules in Europe concerning Pillar 2 and the effective corporate minimum tax, as the agreed complex rules worked out in the global agreement. Member States should therefore allow sufficient time for a final agreed text to be available before adopting a directive. |
| --- | --- |

1.6.

| 1.7. | The calculation of the effective tax rate (ETR) is intended to determine whether the ETR of a given MNE Group is above or below the minimum tax rate with regard to the jurisdiction considered. The EESC underlines that requirements to calculate effective tax rates must follow the agreed global approach, so that administrative costs are not increased. |
| --- | --- |

1.7.

| 1.8. | The EESC supports the initiative taken by the Commission to issue a recommendation to Member States to allow for losses to be offset via a carry-back. |
| --- | --- |

1.8.

| 1.9. | The EESC backs the Commission in fighting the abusive use of shell entities aimed at money laundering, aggressive tax planning by individuals and corporations and tax evasion. The EESC looks forward to expressing its views on a concrete proposal addressing the abusive use of shell entities. |
| --- | --- |

1.9.

| 1.10. | The EESC welcomes the initiative of the Commission to create a Debt Equity Bias Reduction Allowance (DEBRA). Investments in new greener technology are connected with a high risk for the investor. In such situations, equity financing is particularly important and the inherent bias against equity financing built into the tax systems needs to be addressed. |
| --- | --- |

1.10.

| 1.11. | The EESC welcomes the Business in Europe Framework for Income Taxation (BEFIT) with a single corporate tax rulebook and looks forward to being able to examine a detailed proposal. |
| --- | --- |

1.11.

| 1.12. | The EESC encourages the Commission to address cross-border remote working situations as an integral part of the business taxation strategy. |
| --- | --- |

1.12.

| 1.13. | Another area which needs to be reviewed is the coverage of VAT. Exclusions and loopholes create complexity and result in an uneven playing field, as well as in foregone tax revenue. The EESC encourages the Commission to review the coverage of the VAT system. |
| --- | --- |

1.13.

2.   Commission proposal

| 2.1. | The Commission Communication on Business Taxation for the 21st century aims to address several major challenges, which have developed over the years, along with the COVID-19 outbreak. |
| --- | --- |

2.1.

| 2.2. | The EU needs a robust, efficient and fair tax framework that meets public financing needs, while supporting the recovery, and the green and digital transition, by creating an environment conducive to fair, sustainable and inclusive growth, as well as for investments so that employment opportunities can materialise. |
| --- | --- |

2.2.

| 2.3. | Taxation is expected to contribute to wider EU policies, such as the European Green Deal, the Commission’s Digital Agenda, the New Industrial Strategy for Europe, and the Capital Markets Union. Taxation will also need to facilitate the digital transition by providing an environment where digital businesses can thrive. |
| --- | --- |

2.3.

| 2.4. | The Commission Communication takes into adequate consideration the outcomes of the BEPS project and addresses the reform of the international corporate tax framework, led by the OECD and mandated by the G20. The reform package consists of two pillars. Pillar 1 aims to adapt the international tax rules to the new business models, which enable companies to do business without a physical presence (3). |
| --- | --- |

2.4.

| 2.5. | Pillar 2, in turn, will reduce tax competition by setting a minimum effective corporate tax rate of 15 percent (4). |
| --- | --- |

2.5.

| 2.6. | Once agreed upon within a multilateral convention, the application of the package will be made mandatory and the Commission will propose a directive for its implementation in the EU. |
| --- | --- |

2.6.

| 2.7. | The Commission will also put forward a new proposal for the annual publication of the effective corporate tax rate of large companies, which are resident in the EU and fall within the scope of Pillar 2, using the methodology agreed for the Pillar 2 calculations. |
| --- | --- |

2.7.

| 2.8. | The EU will, as part of its transparency agenda, also further tackle the abusive use of shell entities for tax purposes — i.e. companies with no or minimal substantial presence and real economic activity — through a new legislative initiative aimed at preventing aggressive tax planning, tax evasion or money laundering by individuals and corporations. |
| --- | --- |

2.8.

| 2.9. | The Commission strategy will also address the debt/equity bias in corporate taxation by making equity financed investments less disfavoured via an allowance system (DEBRA) for financing with new equity. |
| --- | --- |

2.9.

| 2.10. | The Commission is due to withdraw its pending proposals for a Common Consolidated Corporate Tax Base (CCCTB) (5), once a new proposal to strengthen the internal market is presented. It will be a new framework for income taxation for businesses in Europe, called BEFIT (Business in Europe: Framework for Income Taxation). |
| --- | --- |

2.10.

| 2.11. | The BEFIT proposal will build on Pillar 1 and Pillar 2. The Commission will work closely with Member States in drawing up this proposal, also taking into account the views of the European Parliament and in consultation with the business sector and civil society groups. |
| --- | --- |

2.11.

| 2.12. | The Commission strategy includes a recommendation to Member States to allow for offsetting losses via a carry-back, with the aim of improving a level playing field for companies across the Union. The recommendation applies to fiscal years 2020 and 2021. |
| --- | --- |

2.12.

3.   General comments

| 3.1. | The EESC welcomes the long-awaited Commission initiative for the strategy on business taxation in the 21st century. The EESC strongly supports and appreciates the fact that the Commission is aligning its work with the international discussions and agreements. |
| --- | --- |

3.1.

| 3.2. | The EESC supports the Commission’s objective of making the tax agenda contribute to the overall objective of enabling fair and sustainable growth by supporting wider EU policies, such as the European Green Deal, the Commission’s Digital Agenda, the Industrial Strategy for Europe and the Capital Markets Union. |
| --- | --- |

3.2.

| 3.3. | The EESC underlines the need to facilitate cross-border investments and to reduce compliance costs for businesses, while making the European economy greener and more digitalised. |
| --- | --- |

3.3.

| 3.4. | The EESC is concerned about the tax gap, despite the fact that corporate tax revenues in relation to GDP, have on average been stable or even increasing during the last decade in the EU and in the OECD countries. |
| --- | --- |

3.4.

| 3.5. | The EESC shares the Commission’s view that governments have engaged in adopting a patchwork of anti-tax avoidance and evasion measures and that the measures have added further complexity to existing complexity. The EESC calls for a robust, efficient and fair tax framework which addresses underlying incentives to engage in base erosion and profit shifting behaviours. |
| --- | --- |

3.5.

| 3.6. | The EESC calls on the European Commission to assess the impact of the series of anti-tax avoidance legislation implemented in the last six years. |
| --- | --- |

3.6.

| 3.7. | The EESC encourages the Commission to pursue its Action Plan for Fair Simple Taxation Supporting the Recovery Strategy (6), taking into consideration EESC Opinion Package for fair and simple taxation (7). The EESC considers it important to improve the productivity of the European economy to at least the level of competitor economies. Tax is only one of the factors impacting productivity but it is an important one (8). |
| --- | --- |

3.7.

4.   Specific comments

| 4.1. | The EESC welcomes the G20 Finance Ministers’ endorsement of the agreement signed on 8 October 2021 by 136 out of 140 countries in the Inclusive Framework to reach a global and consensus-based package solution on how to allocate taxation rights among countries (9). At the same time, the EESC underlines the effects of the complexity related to such ambitious objectives, calling for a uniform and globally concerted and coordinated implementation of Pillars 1 and 2. In this context, the EU proposals need to take into account the specificities of EU law requirements such as freedom of establishment and non-discrimination. |
| --- | --- |

4.1.

| 4.2. | The EESC notes that much more work is required for a detailed agreement to be reached. It is of paramount interest that agreements are made on many technical aspects. When rules are implemented at EU-level, companies headquartered in the EU must not be at a competitive disadvantage vis-à-vis their equivalent competitors based in other major jurisdictions (10). |
| --- | --- |

4.2.

| 4.3. | The EESC emphasises the need for implementation of the tax package not only in the EU but, at the same time, in major trading partner countries. If Pillar 1 is not implemented in the US and in other major trading partners simultaneously, European businesses may be at a competitive disadvantage. It is therefore necessary to coordinate with trading partners both the implementation and the use of the multilateral convention. |
| --- | --- |

4.3.

| 4.4. | The EESC underlines the importance of transposition and having exactly the same rules for a Pillar 2 directive and the effective corporate minimum tax as the agreed complex rules worked out in the global agreement. Member States should therefore allow for sufficient time for a final agreed text to be available before adopting a directive (11). |
| --- | --- |

4.4.

| 4.5. | The EESC supports the initiative taken by the Commission to issue a recommendation to Member States to allow for offsetting via a carry-back. Such rules are, however, important not only in a pandemic situation, but also under normal circumstances. The net profit of a company over time should be liable to corporate tax. |
| --- | --- |

4.5.

| 4.6. | The EESC backs the Commission fight against the abusive use of shell entities aimed at money laundering, aggressive tax planning by individuals and corporations and tax evasion. The EESC looks forward to expressing its views on a concrete proposal addressing the abusive use of shell entities. |
| --- | --- |

4.6.

| 4.7. | The EESC welcomes the initiative of the Commission to create a Debt Equity Bias Reduction Allowance. Investments in new greener technology are connected with a high risk for the investor. In such situations, equity financing is particularly important and the inherent bias against equity financing built into the tax systems needs to be addressed (12). |
| --- | --- |

4.7.

| 4.8. | The EESC notes that equity financing could be made less disfavoured both at corporate level and at shareholder level. It is important that the tax treatment does not trigger incentives to channel funds from one level to another. |
| --- | --- |

4.8.

| 4.9. | In addition, it is worth observing that if statutory corporate tax rates increase, the value of interest deduction goes up and it becomes economically more suitable for a company to invest through loans. A higher inflation rate and/or interest rates would have a similar effect, thereby enhancing the current debt bias (13). Since such a development cannot be excluded, the importance of the forthcoming Commission initiative is all the more welcome and important. |
| --- | --- |

4.9.

| 4.10. | The EESC welcomes the BEFIT objectives and looks forward to being able to examine a detailed proposal. The proposal should take into consideration the specific legal regimes applicable to certain types of cooperatives and mutual societies historically adopted by different Member States. The EESC encourages the Commission to include stakeholders and civil society in the deliberations so that progress and acceptance can be achieved. |
| --- | --- |

4.10.

5.   Some additional areas that need to be addressed for the 21st century tax policy

| 5.1. | The EESC believes that the pandemic may have changed the workplace for many in such a way that teleworking will be more frequent in the years to come. The tax consequences of cross-border teleworking (or remote working) give rise to tax questions both for the firms and for individuals. For a company, an unintended permanent establishment, with its tax consequences, may arise. The individual may face taxation claims from multiple countries, while as social benefits and protection may be adversely affected. Pension rights may also be affected. |
| --- | --- |

5.1.

| 5.2. | The EESC encourages the Commission to address cross-border working situations as an integral part of the business taxation strategy. |
| --- | --- |

5.2.

| 5.3. | Another area which needs to be reviewed is the coverage of VAT. Exclusions and loopholes create complexity and result in an uneven playing field as well as in foregone tax revenues. The EESC encourages the Commission to review the coverage of the VAT system. |
| --- | --- |

5.3.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  COM(2020) 312 final.

1

(2)  OJ C 155, 30.4.2021, p. 8.

2

(3)  In-scope companies are the multinational enterprises (MNEs) with global turnover above 20 billion euros and profitability above 10 % (i.e. profit before tax/revenue) calculated using an averaging mechanism with the turnover threshold to be reduced to 10 billion euros, contingent on successful implementation including of tax certainty, with the relevant review beginning 7 years after the agreement comes into force, and the review being completed in no more than one year. Extractives and Regulated Financial Services are excluded. https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf

3

(4)  Pillar Two consists of: a) two interlocking domestic rules (together the Global anti-Base Erosion Rules (GloBE) rules): (i) an Income Inclusion Rule (IIR), which imposes top-up tax on a parent entity in respect of the low taxed income of a constituent entity; and (ii) an Undertaxed Payment Rule (UTPR), which denies deductions or requires an equivalent adjustment to the extent the low tax income of a constituent entity is not subject to tax under an IIR; and b) a treaty-based rule (the Subject to Tax Rule (STTR)) that allows source jurisdictions to impose limited source taxation on certain related party payments subject to tax below a minimum rate. The STTR will be creditable as a covered tax under the GloBE rules. The GloBE rules will apply to MNEs that meet the 750 million euro threshold as determined under BEPS Action 13 (country by country reporting). Countries are free to apply the IIR to MNEs with headquarters in their country even if they do not meet the threshold. The minimum tax rate used for the purposes of the IIR and UTPR will be 15 %. https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf

4

(5)  COM(2016) 685 final and COM(2016) 683 final.

5

(6)  COM(2020) 312 final.

6

(7)  OJ C 155, 30.4.2021, p. 8.

7

(8)  There are many reports that conclude that the impact on growth and productivity of corporate taxes is particularly harmful. This is a conclusion the OECD has drawn many times, see e.g. Tax and Economic Growth, OECD Economics Department Working Paper No. 620 or Tax Policy Reform and Economic Growth, OECD (2010). The shifting of the corporate tax onto workers, in particular onto low-skilled workers, as well as a negative effect on investments, are important factors for the conclusion. Also other taxes, like taxes on labour income, may depress growth and productivity developments.

8

or

(9)  The tax rules apply to all companies over a threshold level, irrespective of the sectors they are active in. It is not only for so-called digital business models or consumer-facing businesses.

9

(10)  In the absence of an UTPR rule and if the IIR does not apply to domestic situations, we would have a situation in which foreign MNE groups, including US groups, would only impose the minimum ETR to cross-border situations. The effect would be that they would keep their domestic subsidiaries protected from the minimum effective tax rate: in this context, the low-taxed domestic subsidiaries of a US/foreign headquarter would continue to benefit for instance from tax credits for R & D and pay tax at a rate below the agreed minimum whereas an EU headquarter and its domestic subsidiaries would have their R & D tax credits neutralised via the top-up tax if they reduce their own domestic ETR below the agreed minimum.

10

(11)  If all the rules in the OECD/Inclusive Framework agreement are not known at the time when Member States agree on a directive, a process of changing the directive must be initiated to achieve a transposition of the global agreement into an EU agreement. Some Member States may oppose such a change to the directive. To achieve a proper and complete transposition, the global agreement must be fully developed and known before agreeing on a directive.

11

(12)  See EESC opinion on The role of corporate taxes on corporate governance (OJ C 152, 6.4.2022, p. 13).

12

The role of corporate taxes on corporate governance

(13)  See The Taxation of Income from Capital, Mervyn King and Don Fullerton, The University of Chicago Press and NBER (1984).

13

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/45 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/45

---

Opinion of the European Economic and Social Committee on Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision

(COM(2021) 581 final – 2021/0295 (COD))

Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of insurance and reinsurance undertakings and amending Directives 2002/47/EC, 2004/25/EC, 2009/138/EC, (EU) 2017/1132 and Regulations (EU) No 1094/2010 and (EU) No 648/2012

(COM(2021) 582 final – 2021/0296 (COD))

(2022/C 275/08)

| Rapporteur: | Jörg Freiherr FRANK VON FÜRSTENWERTH |
| --- | --- |
| Co-rapporteur: | Christophe LEFÈVRE |

Rapporteur:

Jörg Freiherr FRANK VON FÜRSTENWERTH

Co-rapporteur:

Christophe LEFÈVRE

| Referral | European Parliament, 22.11.2021
  Council of the European Union, 26.11.2021 |
| --- | --- |
| Legal basis | Articles 114 and 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Economic and Monetary Union and Economic and Social Cohesion |
| Adopted in section | 8.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 169/0/2 |

Referral

European Parliament, 22.11.2021

Council of the European Union, 26.11.2021

Legal basis

Articles 114 and 304 of the Treaty on the Functioning of the European Union

Section responsible

Economic and Monetary Union and Economic and Social Cohesion

Adopted in section

8.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

169/0/2

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) agrees with the European Commission that the Solvency II rules, which are based on three pillars (quantitative capital requirements; organisational structure, supervision; reporting, transparency), have proved their worth. However, the experience of the sovereign debt crisis, the low interest rate policy, the initial impact of the COVID-19 pandemic, which is by no means over, and the knowledge that other crises will occur, mean that the regulatory framework should be adapted. |
| --- | --- |

1.1.

| 1.2. | The EESC strongly welcomes the fact that the European Commission is addressing the issue of systemic risks in the insurance sector. The risk profile of insurers is changing. In view of the climate crisis, the insurance sector plays a particularly important role when it comes to insurance against the impact of climate change and new environmental risks (such as biodiversity). Insurers also face higher risks in their role as investors. In particular, material, liability and transition risks relating to climate change are not properly assessed. |
| --- | --- |

1.2.

| 1.3. | The EESC supports the European Commission's objective of creating a regulatory framework in which the insurance sector plays an even greater role as an investor in financing the transition to a sustainable economy and in tackling the impact of COVID-19 and climate change. At the same time, the EESC stresses the considerable interest of civil society in ensuring the stability of the financial sector and calls for sound capital requirements and risk preparedness in the insurance sector. Instability in the insurance sector would significantly set back efforts to tackle the climate crisis and overcome the pandemic. |
| --- | --- |

1.3.

2.   General comments

2.1.   The European Commission's approach

| 2.1.1. | The EESC agrees with the European Commission that the Solvency II rules, which are based on three pillars (quantitative capital requirements; organisational structure, supervision; reporting, transparency), have proved their worth. They have seen Europe's insurance sector through the turmoil of the sovereign debt crisis, the ongoing low interest rate policy and the initial impact of the COVID-19 pandemic, which is by no means over. The EESC considers it useful and necessary to draw the appropriate conclusions from the experience gained from applying the rules, particularly regarding proportionality issues and the capital and risk-preparedness requirements. It is these last points that are decisive for undertakings' capital needs and, therefore, for the role that insurance undertakings can play as product providers and investors in the economy. |
| --- | --- |

2.1.1.

2.2.   Consistency with other EU policies

| 2.2.1. | Implementing the European Green Deal and overcoming the consequences of the COVID-19 pandemic are top-priority policies, the implementation of which requires large sums of public and private capital. Europe's insurance sector, as a long-term investor with an investment portfolio of over EUR 10 trillion in 2020, could contribute much more than it currently does to funding the transition to a climate-neutral economy as well as infrastructure projects and affordable housing. Its ability to do so is largely determined by the capital and risk-preparedness requirements in the Solvency II system. |
| --- | --- |

2.2.1.

| 2.2.2. | The EESC supports the European Commission's objective of creating a regulatory framework in which the insurance sector plays an even greater role as an investor in financing the transition to a sustainable economy and in combatting the impact of COVID-19. At the same time, the EESC stresses the importance of not jeopardising the protection objectives of the Solvency II system, namely the protection of insured persons and beneficiaries and the preservation of financial stability. However, this could be threatened if, in order to support the European Green Deal, the strict risk assessment of insurers' investments is not firmly adhered to. The consumer protection rules of the Solvency II system should cover the insurance industry's investments and activities in sectors where insurers invest on the basis of requests by the authorities or government. These investments can then be rewarded or sanctioned accordingly. In any case, any investment under the European Green Deal or NextGenerationEU, for example, must be subject to the same risk assessment as any other investment. Sustainable insurance supervision requires a fact-based risk assessment and a calculation of capital based on that. The EESC fully backs the European Commission's approach of reviewing the existing rules on capital requirements to determine where they have led to inadequate requirements (excessive or insufficient). The European Commission's proposals show how much leeway can be created from this alone. However, where capital requirements are too low (for example, risks relating to climate change), they need to be increased to ensure the stability of the sector. |
| --- | --- |

2.2.2.

| 2.2.3. | The EESC supports the European Commission's efforts to make another substantial contribution to the implementation of the Capital Markets Union. Building the internal market would make it easier to both finance ways out of the COVID-19 pandemic and fund the European Green Deal simply because consumers could see further progress towards creating a genuine single market in financial markets, although there are still many legal and real obstacles to establishing the Capital Markets Union. |
| --- | --- |

2.2.3.

| 2.2.4. | The EESC welcomes the idea that the insurance sector should play a stronger role in financing the green transition. The insurance sector should also seek to mitigate all adverse environmental and social impacts of its investments and insurance activities. A link to the EU taxonomy is useful. The EESC calls for social sustainability objectives to be systematically taken into account. After all, failure to respect workers' and human rights can also lead to increased risk. |
| --- | --- |

2.2.4.

| 2.2.5. | The proposals provide for streamlining of the complex Solvency II system in several places. This is to be welcomed. The idea that users of internal models now also have to submit reports — as if they were using the standard formula — does not make sense and should be rejected. Double reporting must be ruled out. |
| --- | --- |

2.2.5.

2.3.   Delegated acts

| 2.3.1. | The EESC is aware that the European Commission is entitled to adopt certain rules, in particular technical rules, by means of delegated acts. The Commission announces many proposals that it would like to implement through delegated acts. These proposals carry great weight and are of significant economic importance. Examples include volatility adjustment, matching adjustment and extrapolation, as well as the very political decision as to the extent to which Green Deal funding should be facilitated and the limitations that should apply to investment risk assessments in this regard. Both here and elsewhere, the EESC calls for important economic matters to be dealt with in an ordinary legislative procedure involving the Parliament and consulting civil society, rather than through delegated acts. Before the adoption of the Solvency II package, the European Parliament, the European Commission and the EESC should have a clear picture of the content and impact of delegated acts. |
| --- | --- |

2.3.1.

2.4.   Evaluation of adjustments — Impact Assessments: Competitiveness

| 2.4.1. | The EESC proposes that a full evaluation of the thinking behind the Solvency II framework be carried out in the coming years. In the meantime, the framework conditions have changed in many ways and will continue to change, making evaluation absolutely essential. In this context, a competition check might be useful to determine the impact of the amended rules on the competitiveness of the European insurance sector on a world market basis. |
| --- | --- |

2.4.1.

3.   Specific comments

3.1.   Proportionality and thresholds

| 3.1.1. | The EESC welcomes the European Commission's intention to strengthen the proportionality principle. Simplifying the very complex and burdensome regulatory framework is particularly important for smaller and less risk-exposed insurers, which are an important part of regional diversity. It is true that the Solvency II risk-management and reporting requirements should be reviewed and adjusted on the basis of rules. However, it is regrettable that it is still only the size of an undertaking that matters and that no comparison is made between the scope of the prudential requirements and an insurer's actual risks based on its business model. |
| --- | --- |

3.1.1.

| 3.1.2. | A major strength of the European insurance market is the diversity of large and small insurers, of those that are active internationally and those that are strong at regional level, as well as the diversity of legal forms such as joint stock companies or cooperatives. This diversity should not be put at risk by overburdening insurers with excessive red tape. |
| --- | --- |

3.1.2.

3.2.   Long-term guarantee measures

| 3.2.1. | The EESC supports the European Commission's intention to enable the insurance sector to become more involved in financing the implementation of the European Green Deal, combatting climate change and its impact and tackling the consequences of the COVID-19 pandemic through more appropriate capital requirements. The implementation of the European Green Deal must not founder on the financing of the transition to a sustainable economy, and sustainability goals must not be jeopardised by insufficient capital requirements that artificially turn highly polluting activities into profitable investments. The revision of the rules on the necessary capital requirements will be the key to addressing these issues. The EESC thinks it essential to only modify the Solvency II rules to the extent that the prudential objectives of protecting insured persons and beneficiaries and the objective of financial stability are not jeopardised. The aim must be to strike the right balance between incentives for insurers to invest in activities focused on social and environmental objectives, on the one hand, and prudential requirements, on the other. This has not yet been ensured. |
| --- | --- |

3.2.1.

| 3.2.2. | The EESC supports the Commission's proposals to reduce volatility from long-term investments through the proposed volatility adjustment. At the same time, however, it is increasing volatility by switching to relative risk correction (percental deduction from spreads). This is counterproductive. It is not clear why the current risk correction should not be maintained. |
| --- | --- |

3.2.2.

| 3.2.3. | The European Commission's proposals to modify the risk margin (for example, cost of capital rate of 5 % and the non-consideration of the liquidity factor), the interest rate risk and the correlation between spread risk and interest rate risk are appropriate, without jeopardising Solvency II's protection objectives. However, particular attention must be paid to the level 2 texts, as the proposals leading to an overall improvement may also have detrimental effects on the investment portfolios of small and medium-sized insurers. |
| --- | --- |

3.2.3.

| 3.2.4. | In principle, the EESC welcomes the European Commission's proposals to revise the eligibility criteria for long-term equity investments while at the same time ensuring financial stability. This will make it easier for insurance undertakings to benefit from preferential capital treatment when they provide long-term capital to the economy, provided that this capital is invested in line with social and environmental objectives. Overly complex rules must be avoided. Once again, a final assessment can only be made if the level 2 proposals are known. |
| --- | --- |

3.2.4.

| 3.2.5. | The European Commission sets out its intention to present a new extrapolation method. Extrapolation is a calculation method that makes it possible to establish provisions for insurance policies whose terms run further into the future than reliable capital market information on risk-free interest rates. This method is a key factor in assessing provisions and therefore the need for own funds. Extrapolation is particularly important for life insurance, but not only in that case. The European Commission itself acknowledges in its Communication COM(2021) 580 final that the proposal that it will subsequently flesh out in a delegated act ‘will have a significant impact on insurers' capital resources in several markets’. This significant impact will entail an additional capital requirement of more than 10 % for non-life insurers compared to previous projections, thus completely counteracting the potential effects of releasing insurers' capital. The EESC believes that such far-reaching interventions should be decided in an ordinary legislative procedure. |
| --- | --- |

3.2.5.

3.3.   Climate scenario analysis and mandate to EIOPA (1)
  regarding sustainability risks

| 3.3.1. | The EESC fully supports the need for insurers to identify any material exposure to climate change risks and to assess the medium and long-term impact on their business. The EESC recommends extending this scenario analysis to all environmental risks and applying the concept of double materiality to these requirements. Insurers should also be required to assess and, where appropriate, mitigate the impact of their activities on climate change and the wider environment. |
| --- | --- |

3.3.1.

| 3.3.2. | The EESC welcomes the European Commission's proposal to mandate EIOPA to propose — after consulting the European Systemic Risk Board — possible adjustments to the capital requirements with regard to sustainability risks in a report by 28 June 2023. It is right to discuss such wide-ranging issues on an empirical basis. However, the EESC thinks that the deadline for submitting the report is not ambitious enough. Mitigating the effects of climate change requires swift action. The EESC would already like to point out that the lessons drawn from these proposals will affect fundamental issues relating to the financing of the European Green Deal. They will therefore be of a political rather than a technical nature and, in the EESC's view, must be dealt with in an ordinary legislative procedure involving the European Parliament. |
| --- | --- |

3.3.2.

3.4.   Group supervision

| 3.4.1. | Regulatory weaknesses have been revealed in group supervision in practice. The EESC supports the European Commission's proposals to bring insurance holding companies and mixed financial holding companies directly into the scope of the EU prudential framework. From the consumer's point of view, it is important to ensure that the external presentation of a group is transparent with regard to its liabilities. |
| --- | --- |

3.4.1.

3.5.   Role of insurance during pandemics and other large-scale disruptive events

| 3.5.1. | The EESC agrees with the European Commission's assessment that the pandemic has highlighted the need for clearer and simpler information on the terms of insurance cover and guarantees offered to consumers, especially as regards business interruption and travel insurance, and the need to constantly verify that insurance products continue to be in line with consumer needs. It is equally important that consumers be able to enforce their rights. Current product oversight has evidently not worked well enough. The EESC urges the Commission to ask EIOPA to put forward concrete proposals on how to solve the problem, which has already been known about for a long time. |
| --- | --- |

3.5.1.

| 3.5.2. | The pandemic, the impact of climate change, which we are experiencing in Europe in the form of forest fires, drought, forest decline, heavy rainfall and flooding of unprecedented severity, as well as major new threats such as cyber risks, raise the question of the availability of insurance cover for such events, which will not continue to be one-off occurrences. The EESC strongly supports the European Commission's plan to set up a Climate Resilience Dialogue by 2022, bringing together insurers, reinsurers, public authorities and other relevant stakeholders. The EESC suggests involving civil society representatives in this dialogue from the outset. |
| --- | --- |

3.5.2.

3.6.   Insurance guarantee schemes (IGSs), recovery and resolution and new supervisory measures

| 3.6.1. | The European Commission does not present a proposal to harmonise the patchwork of IGSs in Europe. It omits this, even though IGSs provide significant last-resort protection to insured persons and beneficiaries. A Europe-wide system of IGSs, which at the same time takes account of the type of products and thus consumers' entitlement to protection, would significantly increase confidence in a single European insurance market. As EIOPA suggests, the EESC thinks there is an urgent need to at least harmonise a set of minimum principles for the IGSs. On the other hand, as the European Commission points out, the EESC also believes that this would impose a significant financial burden on insurance markets in some Member States that do not yet have IGS systems, which they think is unreasonable at this stage of the recovery from the COVID-19 crisis. As a first step, the EESC calls on the European Commission to swiftly put forward a proposal for a minimum framework for IGSs to address the issue, with an appropriate transitional period, without overburdening the markets. |
| --- | --- |

3.6.1.

| 3.6.2. | With its recovery and resolution proposal (2), the European Commission is expanding the supervisory tools which should enable supervisory authorities to act more quickly and more efficiently in the event of an economic crisis and, in particular, an emerging crisis. These tools also include measures such as pre-emptive recovery and resolution planning, including at group level. Resolution tools and powers are established. However, there is not a clear distinction between these and the existing Solvency II supervisory measures. In general, the tried and tested ‘intervention ladder’ is called into question in many places as the new powers of intervention are intended to apply even before the Solvency Capital Requirement (SCR) is breached. The EESC considers it essential that the proposed measures be consistent with the rules of the intervention ladder. The resolution rules should facilitate a harmonised approach at group level, particularly in the case of mixed financial groups. |
| --- | --- |

3.6.2.

| 3.6.3. | A counterargument against the proposals is that the COVID-19 pandemic, and in particular the low interest rate, has shown that the Solvency II toolbox has been good enough to cope with difficult situations. Even though this has largely been the case, the EESC does not agree with this line of reasoning. Based on experience from past financial crises, the EESC thinks there is an urgent need to begin taking phased crisis intervention measures at company level even before a failure to meet the minimum capital requirements, as long as there are clear signs the situation has worsened. The EESC points out that, when devising and implementing the rules in practice, it will be very important to clearly define and set the limits of EIOPA's and the national supervisory authorities' tasks. |
| --- | --- |

3.6.3.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  European Insurance and Occupational Pensions Authority (EIOPA).

1

(2)  COM(2021) 582 final.

2

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/50 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/50

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank – Annual Sustainable Growth Survey 2022

[COM(2021) 740 final]

(2022/C 275/09)

| Rapporteur: | Judith VORBACH |
| --- | --- |

Rapporteur:

Judith VORBACH

| Referral | European Commission, 21.1.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Economic and Monetary Union and Economic and Social Cohesion |
| Adopted in section | 8.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 140/5/38 |

Referral

European Commission, 21.1.2022

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Economic and Monetary Union and Economic and Social Cohesion

Adopted in section

8.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

140/5/38

1.   Conclusions and recommendations

| 1.1. | The EU faced adverse developments and crises long before the outbreak of the COVID-19 pandemic. In 2020, the EU entered the deepest economic recession in its history, while existing challenges were still far from being solved. Unprecedented supportive actions were taken by the EU to soften the blow and stave off an unstable situation. However, the pandemic can only be tackled transnationally and the EESC calls for a foresightful cooperation on the EU's health policy, a boost to vaccination levels and the adoption of a global approach, in order to have an open debate at EU level on a temporary and voluntary TRIPS waiver. |
| --- | --- |

1.1.

| 1.2. | The EESC advocates a prosperity-focused policy and supports the EU’s ‘competitive sustainability’ agenda. Its four dimensions — environmental sustainability, productivity, fairness and macroeconomic stability — as well as competitiveness, should be placed on an equal footing in order to achieve the intended reinforcing effects and successful transformation. For example, fairness and social sustainability are crucial elements of competitiveness and vice versa. The weaker the involvement of parliaments, the social partners and other civil society organisations, the more likely it is that disparities will increase and acceptance decrease, especially with regard to the transformation of the economy to achieve climate neutrality. |
| --- | --- |

1.2.

| 1.3. | One of our challenges is to decouple economic prosperity as far as possible from environmental degradation. Again, what is needed is a holistic approach that takes on board environmental damage of all types. Commitments to safeguarding social well-being must not end up as empty slogans. It is crucial to ensure a fair distribution of the efforts and gains of the transition. The EESC highlights the importance of a sound business climate and of keeping strong industrial value chains in Europe, and calls for European industrial leadership to strive for sustainability. The carbon border adjustment mechanism must be designed in an effective way and state aid measures should be linked to the creation of quality jobs and to respect for workers’ rights and fiscal obligations. Finally, the EESC stresses that any shift towards environmental taxation should not entail regressive distributional effects or energy poverty. |
| --- | --- |

1.3.

| 1.4. | The EESC welcomes the Commission’s proposals concerning reforms and investment and promoting a fair single market in order to ensure a strong economic basis. Steps to promote the single market and improve the business environment are crucial for fostering innovation and productivity. Moreover, a fair productivity approach constitutes a critical driver for competitiveness and upward convergence in the long run. However, social and labour rights are fundamental but are not part of the constitutionally protected freedoms of the internal market. The EESC calls for appropriate proposals on how to guarantee non-treaty protected national rules. The EESC recommends mitigating the adverse effects of surging energy prices on production and distribution and welcomes closer monitoring of financial market risks arising from the climate crisis. Deepening the Capital Markets Union and the Banking Union should consolidate funding channels, promote investment efforts and increase resilience. |
| --- | --- |

1.4.

| 1.5. | The EESC highlights that striving at the same time for a fair and just green and digital transition, which requires sustainable social conditions, will constitute a base for future prosperity and resilience. Well-designed labour market policies and social protection systems are the basis for resilience and inclusive growth. The EESC fully agrees that Member States should intensify efforts to improve learning outcomes across their education and training systems and that access to life-long learning should be ensured. The EESC calls on the Commission to scrutinise the distributional effects of pay-outs under the Multiannual Financial Framework (MFF) and NextGenerationEU (NGEU) and to secure their contribution to the development of a greener and digitalised economy, as well as to upward social convergence. |
| --- | --- |

1.5.

| 1.6. | Economic recovery and stable inclusive growth are pre-conditions for sustainable public budgets. Policy needs to remain supportive and ready to respond to sustained turbulence. The EESC welcomes the continuation of the general escape clause. Whenever it is lifted, levels of economic activity, employment and poverty compared to pre-crisis levels will have to be considered. Moreover, the EESC calls on the Commission to put forward guidelines for a transition period before a modernised framework comes into force. The EESC warns against promoting policies that curtail current expenditures relating to social, educational and health expenses and calls for fair revenue policies. Moreover, while surveillance under the macroeconomic imbalance procedure (MIP) has insufficiently taken account of interactions between new emerging economic challenges, the EESC also calls for social imbalances to be monitored. |
| --- | --- |

1.6.

| 1.7. | The EESC perceives that we are entering a new phase of economic policy and the evolving 2022 European Semester is a chance to enhance economic, environmental and social sustainability. The balanced approach of the competitive sustainability agenda should be reflected in the upcoming country-specific recommendations (CSRs), and greater involvement of the social partners and organised civil society is long overdue. By making compliance with announced reforms a condition for the disbursement of RRF grants, country-specific recommendations gain more political weight. While the reinforced focus on the principles of the European Pillar of Social Rights is welcome, the extent to which it will actually be reflected in the CSRs and the Recovery and Resilience Plans (RRPs) remains unclear. Economic governance needs to be integrated into the European Semester process in such a way as to ensure the democratic involvement of the parliaments, the social partners and organised civil society. |
| --- | --- |

1.7.

2.   General comments

| 2.1. | The EU faced adverse economic and social developments and crises even before the outbreak of the COVID-19 pandemic. Following a long period of economic downturn after the financial market crisis in 2008, the EU economy finally picked up in 2014 and then enjoyed a period of growth and rising employment rates. However, public investment had dropped below levels needed to keep the stock of public capital stable as a share of GDP. While the EU as a whole is relatively prosperous by global standards, divergences between countries and regions as well as inequalities and the gender gap amid our societies persisted. The threat of the climate crisis and the challenges due to technological change were already apparent. |
| --- | --- |

2.1.

| 2.2. | In March 2020, the COVID-19 pandemic and the measures taken to contain it dramatically changed the situation. The EU entered ‘the deepest economic recession in its history’ (1), while existing challenges were far from being solved. But not only were the pandemic and its impacts unprecedented — the EU also took an unprecedented range of actions of solidarity to cushion the distress, including the activation of the general escape clause and the SURE instrument (2). In particular, the EESC appreciates the fact that the EU managed to draw up and adopt such a wide-ranging initiative as the NGEU amidst such a severe crisis. This initiative should not only help to overcome the crisis but also — quite rightly — to tackle the transition process. The confidence-boosting effect of the overall supportive and cohesive policy approach was successful in cushioning the socioeconomic fallout from the crisis, which otherwise may have resulted in economic and political destabilisation. |
| --- | --- |

2.2.

| 2.3. | The close link between the economy and the pandemic also became apparent from the economic rebounding triggered by the improving epidemiological situation in mid-2021. The 2021 autumn forecast predicts a move from recovery to expansion and a growth rate of 4,3 % in 2022, while job creation is expected to follow this boost (3). Against the background of the renewed surge of the pandemic and the Omicron variant, this positive outlook may unfortunately not come to pass. The EESC points to the high level of uncertainty and to the significant impact of the pandemic on economic activity. |
| --- | --- |

2.3.

| 2.4. | Tackling the pandemic and preventing new variants of the virus cannot be achieved on a national level alone. Instead, a transnational approach is needed. The EESC calls for a close and foresightful cooperation on the EU’s health policy, which will not only help to overcome the health crisis but also to cushion its impact on the economy. The EESC recommends that increasing vaccination levels continue to be a top priority and calls for a global approach, not least because the globally sufficient supply of vaccines is also in the EU’s own interest. Therefore, the EESC asks the Commission to lead an open debate at EU level on a temporary and voluntary TRIPS waiver that would apply to COVID-19 vaccines, treatments and tests (4). |
| --- | --- |

2.4.

| 2.5. | The EESC welcomes the multidimensional approach of the ‘competitive sustainability’ agenda outlined in the Sustainable Growth Survey. This is in line with a prosperity-focused policy approach, advocated by the EESC in previous opinions, calling for consideration of a number of objectives: environmental and social sustainability, sustainable and inclusive growth, full employment and high-quality work, fair distribution, health and quality of life, financial market stability, price stability, balanced trade based on a fair and competitive industrial and economic structure, and stable public finances. These objectives are also consistent with the objectives set out in Article 3 of the Treaty on European Union and are closely interconnected. For example, a sustainable growth approach that goes beyond the sole objective of GDP growth is crucial for the achievement of a climate-neutral economy in 2050. |
| --- | --- |

2.5.

| 2.6. | Moreover, the four dimensions of the competitive sustainability agenda — environmental sustainability, productivity, fairness and macroeconomic stability — are closely interlinked and of equal importance. They are all pieces of a single puzzle, and one cannot exist without the others, such that none of them is subordinate to another. The Commission quite rightly stresses that these dimensions should be mutually reinforcing. The EESC welcomes this, but also points to the danger of contractionary effects. The weaker the involvement of parliaments, the social partners and other civil society organisations, the more likely it is that there will be disparities between these four dimensions. |
| --- | --- |

2.6.

| 2.7. | The EESC also points out that not only are the four dimensions interconnected — but competitiveness is also closely interlinked with them and of equal importance to them, together with balanced trade, which is one of the key economic objectives. For example, fairness and social sustainability are crucial elements of competitiveness and vice versa. The European social model and, in particular, the European pillar of social rights are pivotal parts of the EU’s competitiveness. Likewise, the other way around, balanced trade based on a fair, competitive industrial and economic structure is an important prerequisite for the EU's inclusive growth, fairness and social sustainability. |
| --- | --- |

2.7.

3.   Specific comments

3.1.   Environmental sustainability

| 3.1.1. | One of the main challenges of this century is to decouple economic prosperity as far as possible from the endangering or destruction of the environment. The EESC fully agrees with the Commission that climate change and environmental degradation call for immediate action. While the EESC fully supports the goal of combating the climate crisis, it calls for a holistic approach that takes on board equally environmental damage of all types, such as threats to biodiversity, water and soil, air pollution and nuclear and other kinds of toxic waste. |
| --- | --- |

3.1.1.

| 3.1.2. | Quite correctly, the Commission points to the social and economic dimensions of this transition and stresses the importance of safeguarding prosperity and well-being. The EESC stresses that it is of the utmost importance that these proclamations do not end up as empty slogans and calls on the Commission to provide granular mapping and analysis of the impact the transition will have on employment and skills (5). It is also crucial to ensure a fair distribution of the efforts and gains of the transition. In order to achieve that, the EESC underlines the crucial role of social dialogue, full respect for the autonomy of social partners, the reinforcement of collective bargaining, sound corporate governance with worker participation (6) and the involvement of the social partners and organised civil society in policy-making. This will not only ensure ownership, but — all above — is imperative to securing a balanced and inclusive transition process. |
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3.1.2.

| 3.1.3. | Such involvement particularly needs to be stepped up in the Fit for 55 package, which contains a large number of far-reaching policy proposals. The EESC highlights the importance of keeping strong industrial value chains in Europe, and calls for European industrial leadership in striving for environmental sustainability. The proposal for a ‘carbon border adjustment mechanism’ has the potential to make employment in climate-friendly transformed companies more robust and is therefore key and must be designed in an effective way. In the context of any shift towards environmental taxation, such as levying taxes on polluting activities, it is imperative to prevent regressive distributional effects and energy poverty. The tax burden on labour should be addressed in this connection. |
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3.1.3.

| 3.1.4. | The Commission points out that delivering the EU’s ambitious Green Deal agenda will require significant investments amounting to about EUR 520 billion per year. Further investments will be needed to accompany labour market transitions. In that context, the EESC points to additional investment needs due to the digital transition, as well as in healthcare, education and training, social protection and research and development. The EESC underlines that, in order to ensure a sufficient level of investment, it is vital to both redirect and step up private investment and public investment. However, the achievement of environmental sustainability represents a public good that incurs the risk of market failure. |
| --- | --- |

3.1.4.

| 3.1.5. | Private investment plays a crucial role in the economic circle in order to promote economic development and job creation. Private sector investment and innovation in particular are needed to achieve the goal of environmental sustainability, for example in the areas of new batteries for cars and zero CO2 steel production. The EESC highlights the need for a sound business climate and welcomes the endeavours to channel private funding towards climate resilience and environmental sustainability, as intended by the new sustainable finance strategy (7). The EESC also supports the public sector’s role — in particular InvestEU and the respective NGEU measures — in endorsing private investment by providing targeted support by fully respecting Art. 107 TFEU. However, the EESC calls for state aid measures to be linked to the creation of quality jobs and to the respect of workers’ rights, environmental standards and fiscal obligations. |
| --- | --- |

3.1.5.

3.2.   Productivity

| 3.2.1. | Productivity is about the efficiency of economic production and is basically defined by the ratio of output to input. Productivity growth in a fair and sustainable way contributes to competitiveness, prosperity and upward convergence in the long run. However, striving for productivity in an unfair, unsustainable way could end up putting more pressure on employees and employers, impairing environmental sustainability, distorting competition, increasing inequality and hampering the transition process. Given the above, the EESC welcomes the Commission’s approach of enhancing productivity in a prosperity-orientated way by promoting advanced technologies and innovation, reinforcing people’s skills, stepping up training and education, strengthening the transfer and valorisation of knowledge and promoting resource efficiency. The EESC highlights in particular the fact that social sustainability is also an important element of a fair productivity approach. |
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3.2.1.

| 3.2.2. | The EESC emphasises the need for new investments in general and in particular in the digital sector and explicitly supports the Commission’s call for RRPs to also focus on building and deploying cutting-edge digital capacities. Indeed, the RRF can and should help Member States to undertake investments and reforms that — amongst other things — enable artificial intelligence, high performance computing, cybersecurity, microelectronic and electronic components and secure connectivity. In addition to boosting digital skills at all levels, this will provide a solid ground for enhancing productivity and competitiveness and therefore promote a strong economic basis and prosperity in the long run. |
| --- | --- |

3.2.2.

| 3.2.3. | A fair and well-functioning single market promotes sustainable and inclusive growth and employment. The EESC agrees with the Commission that respect for the rule of law, quality and efficient justice systems, effective anti-corruption structures, efficient administration including tax administration, and anti-money laundering and antifraud frameworks are important factors for improving the business environment and safeguarding fair competition between companies. Unfortunately, there is still an imbalance between economic freedoms and social and labour market rights. Social and labour rights are fundamental but not part of the constitutionally protected freedoms of the internal market. National protection rights in favour of employees are sometimes classified as administrative barriers to the market. As a consequence, many workers perceive the internal market as a threat. The EESC calls for appropriate proposals on how to redress that imbalance and to guarantee non-treaty protected national rules. Moreover, the EESC strongly recommends consistently pursuing efforts in the ‘beyond GDP initiative’ (8). |
| --- | --- |

3.2.3.

| 3.2.4. | The EESC highly recommends addressing the adverse economic and distributional effects of surging energy prices. This spike in prices may be due to the strong resumption of economic activity and supply-side disruptions and may even itself out when economic development becomes more stable. However, it puts an immediate burden on the production side and competitiveness of industry. Moreover, high wholesale energy prices are likely to affect retail prices, thus placing a further burden on food prices. Even if these effects are transitory, they may create downward pressures on the purchasing power of wages, so that lower-income households could be exposed to poverty. The EESC supports the endeavours to counteract these developments. |
| --- | --- |

3.2.4.

3.3.   Fairness

| 3.3.1. | Long before the COVID-19 crisis, weak social protection, imbalances and inequalities constituted a problem. With well over 20 % of EU citizens at risk of poverty and social exclusion, the ECB concluded in 2016 that the distribution of net wealth is ‘heavily skewed’ (9). According to the World Bank’s World Poverty Report (2018) (10), just over a billion people had been lifted out of absolute poverty over the previous three decades, largely due to the reduction of poverty in China. The pandemic slowed down this positive trend. However, wealth is still concentrated at the very top and the very rich have actually acquired more wealth over the last 25 years (11). The Commission rightly points to rising inequalities due to the pandemic. Inequality is not only a problem in itself, but also curbs economic development by dampening private demand and serving as breeding ground for social tension. Thus, the enhancement of quality jobs, sound payment and working conditions, employment for disadvantaged groups and the right to collective bargaining are key. The EESC stresses the importance of respecting national industrial relations and the autonomy of the social partners when promoting such policies. |
| --- | --- |

3.3.1.

| 3.3.2. | The EESC appreciates the Commission’s assertion that fairness needs to be at the heart of the recovery. In the face of problematic inequality, worrisome poverty figures and political tensions, social sustainability, gender equality, equal opportunities, non-discrimination and fair distribution are important goals in themselves. Consequently, the EESC highly recommends focusing not only on the green and digital, the so called twin transition, but also striving for social sustainability alongside this. The EESC highlights that striving at the same time for a fairness and just green and digital transition which requires sustainable social conditions will constitute a base for future prosperity and resilience. |
| --- | --- |

3.3.2.

| 3.3.3. | Well-designed active labour market policies, public employment services and social protection systems, that help people to preserve their living standards in times of economic turbulence and also in the case of an individual need, are the basis for resilience and inclusive growth. The implementation of job-retention measures, such as short-time work schemes, decisively helped to tackle the negative impacts of the crisis on labour markets. But although income support and social safety nets prevented a large fall in incomes, the COVID-19 pandemic has also exposed gaps in access to social protection. The EESC calls for upward social convergence that contributes to the EU’s overall resilience to crises. |
| --- | --- |

3.3.3.

| 3.3.4. | Particular attention must also be paid to the social impact of the digital transition, not least because the pandemic has accelerated this process. The EESC welcomes the fact that the Commission points — among other things — to the uneven access to online learning, which may have long-term consequences, including low levels of basic skills, and therefore may exacerbate inequalities in education. The EESC fully agrees that Member States should intensify their efforts to improve learning outcomes across their education and training systems. In order to address skill mismatches and to prevent growing social divides, the right to life-long learning has to be recognised and access to it ensured. This must be supported by public funding in order to help responsible enterprises to carry out quality life-long training. In order to narrow the digital gap, close attention should be paid to accessibility to digital services for persons with disabilities and for the elderly. |
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3.3.4.

| 3.3.5. | The new Multiannual Financial Framework (MFF) and Next Generation EU (NGEU), and in particular the Recovery and Resilience Facility (RFF), amount to EUR 1,824 trillion, which will support the Member States in addressing the current challenges. The EESC calls on the Commission to scrutinise that the proclaimed policy measures are properly implemented, so that the objectives of the green and digital transition are tangibly promoted by the allocation of the funds. Above all, already planned expenditures should not be accepted as part of the National Recovery and Resilience Plans. This would also help avoid the need to increase national contributions or to cut spending from the EU budget. |
| --- | --- |

3.3.5.

| 3.3.6. | Moreover, the distributional effects of the pay-outs of the funds and their social impact also have to be monitored carefully in order to ensure their contribution to upward social convergence. The Commission duly points to the various aspects of the asymmetric impact of the crisis on different population groups, sectors and regions. The EESC therefore calls for particular efforts to protect low- and middle-income households and vulnerable people, who are the most affected by any crisis and transition process. Investments should be financed under the condition that they lead to net job creation and respects workers' rights. All in all, it is important that future generations get their money's worth from today's expenditures. |
| --- | --- |

3.3.6.

3.4.   Macroeconomic stability

| 3.4.1. | The pandemic shock has not only increased pre-existing vulnerabilities and led to a setback in the reduction of imbalances between Member States but has also created greater uncertainty. Therefore, economy and monetary policy not only needs to remain supportive but also needs to be agile and ready to react to any turbulence or shocks and ensure the EU’s resilience. Hence, the EESC welcomes the continuation of the general escape clause. Whenever it is lifted, the level of economic activity as well as employment and poverty figures compared to pre-crisis levels will have to be considered. Moreover, fiscal policies at national and EU level as well as monetary policies should be coordinated in a prudent way in order to mutually reinforce the intended supportive and stabilising effects. |
| --- | --- |

3.4.1.

| 3.4.2. | The EESC calls for a shift towards prosperity-focused economic governance to be engineered, as outlined in various opinions (12). Therefore, after having being brought to a halt because of the pandemic, the relaunch of the review of the economic governance framework was overdue in order to promote appropriate fiscal policies in good as well as bad times. The deficiencies of the current fiscal framework were already obvious in 2020, and the crisis poses even more serious challenges. An analysis suggests that the deficit criterion will not be fulfilled by 23 Member States and the debt criterion by 13 Member States. |
| --- | --- |

3.4.2.

| 3.4.3. | The EESC agrees with the Commission on the need to abstain from opening an excessive deficit procedure against any Member State and on its recommendation that Member States should continue to provide fiscal support whilst safeguarding fiscal sustainability in the medium term when economic conditions allow. This is in line with the EESC’s claim to support sustainable growth, thereby enabling public finances to be strengthened (13). However, the EESC also calls for acknowledgement that there is an urgent need to step up investment in order to tackle the transition process. Moreover, before the revised framework comes into force, the Commission should put forward guidelines for a transition period, during which time the excessive deficit procedure should not be triggered, and with the possibility to use the ‘unusual event clause’ on a country-specific basis (14). |
| --- | --- |

3.4.3.

| 3.4.4. | The EESC agrees with the Commission that the surveillance under the macroeconomic imbalance procedure (MIP) may have insufficiently taken account of interactions between new emerging economic challenges, notably environmental pressures (15). Moreover, social imbalances need to be monitored in order to offset the predominance of fiscal and macroeconomic requirements (16). As social and employment imbalances can have detrimental cross-border effects, it is important that they be detected and corrected at an early stage. Finally, the EESC welcomes the Commission's work on green budgeting. |
| --- | --- |

3.4.4.

| 3.4.5. | Economic recovery and stable inclusive growth are pre-conditions for sustainable public budgets and the formation of fiscal buffers. As nationally-financed public investment will continue to play a key role, applying the ‘golden rule’, without jeopardising medium-term fiscal sustainability and the value of the euro, is vital if the transition process is to be successful. But against the background of a high level of uncertainty, the EESC also warns against curtailing current expenditures relating to social, educational and health expenses. Well-functioning automatic stabilisers are key for preventing social hardship, stabilising demand and resilience against any crisis. On the other hand, unfair tax policies with tax fraud and aggressive tax planning jeopardise the fiscal leeway needed to react to shocks and tackle the transition process. Therefore, the Commission’s observations regarding the revenue side are welcome. This is also true for proposed reforms in the context of the RRF, as regards increased tax administration efficiency with a view to improving tax collection and reducing compliance costs for businesses and individuals. |
| --- | --- |

3.4.5.

| 3.4.6. | An important aspect of macroeconomic stability is the stability of the financial markets. Deepening the Capital Markets Union and the Banking Union should focus on strengthening funding channels and promoting the private sector’s contribution to the investment efforts. In doing so, the EESC calls for the right balance to be struck between risk-sharing and risk reduction and, in particular, welcomes the endeavours to strengthen the monitoring of systemic risks arising from the climate crisis. Moreover, it is also important to pay heed to social sustainability risks, which are jeopardising social cohesion as a result of widening distribution gaps. Financial market regulation should also prioritise efficiency over complexity and provide a high level of consumer protection. |
| --- | --- |

3.4.6.

3.5.   The European Semester evolves

| 3.5.1. | The EESC highlights that with NGEU the EU reaches a new phase of economic policy and makes a decisive step forward towards solidarity. The evolving 2022 European Semester is a chance to enhance economic, environmental and social sustainability. The EESC calls for a commitment to promoting sustainable and inclusive growth, full employment and the creation of quality jobs and stepping up decisively its democratic stance. Moreover, greater involvement of the social partners and organised civil society in the semester process is long overdue. |
| --- | --- |

3.5.1.

| 3.5.2. | Processing the RRF through the Semester makes the semester process more meaningful. Also, linking compliance to reforms — set out in the national recovery and resilience plans (NRRPs) and heavily based on the CSRs — and the disbursement of tranches gives the CSRs more political weight. This makes closer involvement of the social partners and organised civil society in the development and implementation of the NRRPs mandatory. The EESC calls for minimum standards to be laid down for such consultation (17). Cohesion policy’s strict rules on stakeholder consultation and the partnership principle in particular should be taken, at the very least, as a blueprint for RRF procedures (18). |
| --- | --- |

3.5.2.

| 3.5.3. | A variety of empirical studies emphasise that the bulk of the country-specific recommendations have focused on boosting competitiveness and consolidating public budgets. The EESC calls on the Commission to pass on the balanced approach of the competitive sustainability agenda in particular to the upcoming CSRs. Special focus should be placed on recommending reforms such as active and inclusive labour market policies and lifelong learning schemes, including programmes for reskilling and offering career change support, also for disadvantaged groups such as people with disabilities and the elderly. |
| --- | --- |

3.5.3.

| 3.5.4. | In particular, the EESC welcomes the outcome of the Porto Social Summit, namely that the revised Social Scoreboard should help monitor progress towards implementation of the principles of the European Pillar of Social Rights and embed this monitoring in the European Semester process. Therefore, the increased focus of the 2022 Joint Employment Report on the Pillar’s principles, together with the fact that it incorporates the 2030 headline targets and the headline indicators of the revised Social Scoreboard in its analysis, is welcome. However, the extent to which these conclusions will be reflected in the CSRs and the Recovery and Resilience Plans remains unclear. In addition, the Sustainable Development Goals should serve as reference points. |
| --- | --- |

3.5.4.

| 3.5.5. | The EESC also calls for reforms that guarantee that EU funds are absorbed effectively, for example by building up technical capacities in public administrations to manage investment projects, for public procurement systems based on the principle of the most economically advantageous instead of the cheapest tender, thus taking into account labour, social and environmental aspects, and finally for reforms to remove other non-monetary barriers to an effective investment policy. In particular, the EESC also calls on the Commission to prevent any misuse of funds and corruption. |
| --- | --- |

3.5.5.

| 3.5.6. | Economic governance and in particular the rules of the fiscal policy framework need to be integrated into the European Semester process in such a way that the democratic involvement of the European Parliament, the national parliaments, the social partners and organised civil society are ensured. Moreover, it should also be reformed with the aim of fostering a multilateral and democratic dialogue on macroeconomic, social and environmental challenges and of supporting policy coordination. |
| --- | --- |

3.5.6.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  European Commission's Spring 2020 Economic Forecast.

1

(2)  European instrument for temporary Support to mitigate Unemployment Risks in an Emergency.

2

(3)  Autumn Forecast 2021.

3

(4)  EESC opinion on Emerging stronger from the pandemic: acting on the early lessons learnt (OJ C 152, 6.4.2022, p. 116).

4

Emerging stronger from the pandemic: acting on the early lessons learnt

(5)  EESC opinion on Fit for 55: Delivering the EU's 2030 Climate Target on the way to climate neutrality (OJ C 275, 18.7.2022, p. 101).

5

Fit for 55: Delivering the EU's 2030 Climate Target on the way to climate neutrality

(6)  EESC opinion on Social dialogue as an important pillar of economic sustainability (OJ C 10, 11.1.2021, p. 14).

6

Social dialogue as an important pillar of economic sustainability

(7)  EESC opinion on Renewed sustainable finance strategy (OJ C 152, 6.4.2022, p. 97).

7

Renewed sustainable finance strategy

(8)  Background — Beyond GDP, European Commission.

8

(9)  European Central Bank, The Household Finance and Consumption Survey: results from the second wave, No 18 / December 2016.

9

The Household Finance and Consumption Survey: results from the second wave

(10)  World Bank Group: Poverty and shared prosperity 2018. Piecing together the poverty puzzle. Overview, Figure 01; p. 2

10

Poverty and shared prosperity 2018. Piecing together the poverty puzzle. Overview,

(11)  The World Inequality Report 2022 presents the most up-to-date and complete data on inequality worldwide.

11

(12)  EESC opinions on Economic Governance Review 2020 (OJ C 429, 11.12.2020, p. 227), and Reshaping the EU fiscal framework
  for a sustainable recovery and a just transition, (OJ C 105, 4.3.2022, p. 11).

12

Economic Governance Review 2020

Reshaping the EU fiscal framework

for a sustainable recovery and a just transition

(13)  EESC opinion on Economic Governance Review 2020 (OJ C 429, 11.12.2020, p. 227).

13

Economic Governance Review 2020

(14)  EESC opinion on Reshaping the EU fiscal framework for a sustainable recovery and a just transition (OJ C 105, 4.3.2022, p. 11).

14

Reshaping the EU fiscal framework for a sustainable recovery and a just transition

(15)  COM(2021) 662 final.

15

(16)  EESC opinion on European Pillar of Social Rights (OJ C 286, 16.7.2021, p. 13).

16

European Pillar of Social Rights

(17)  EESC Resolution on Involvement of Organised Civil Society in the National Recovery and Resilience Plans (OJ C 155, 30.4.2021, p.1).

17

Involvement of Organised Civil Society in the National Recovery and Resilience Plans

(18)  EESC opinion on Cohesion policy in combatting inequalities — complementarities/overlaps with the RRF (OJ C 517, 22.12.2021, p. 1).

18

Cohesion policy in combatting inequalities — complementarities/overlaps with the RRF

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/58 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/58

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions – Introducing HERA, the European Health Emergency Preparedness and Response Authority

(COM(2021) 576 final)

(2022/C 275/10)

| Rapporteur: | Ioannis VARDAKASTANIS |
| --- | --- |

Rapporteur:

Ioannis VARDAKASTANIS

| Referral | European Commission, 28.10.2021 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Employment, Social Affairs and Citizenship |
| Adopted in section | 10.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 230/3/2 |

Referral

European Commission, 28.10.2021

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Employment, Social Affairs and Citizenship

Adopted in section

10.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

230/3/2

1.   Conclusions and recommendations

| 1.1. | The COVID-19 pandemic has demonstrated the need for better coordination of the European Union (EU) and its Member States in order to tackle public health crises, before, during and after they happen. Gaps in preparedness and response to the pandemic have been observed by people living in Europe at EU, national, regional, and local levels. When the pandemic spread across Europe, the EU institutions and bodies were not equipped to adequately coordinate actions with Member States and quickly and efficiently deploy measures to protect the lives of the population. |
| --- | --- |

1.1.

| 1.2. | Through the creation of the European Health Emergency Preparedness and Response Authority (HERA) and by putting public health and equity at the centre of its decisions, the EU and its Member States will be able to achieve better preparedness and responses to existing and future cross-border health threat emergencies. |
| --- | --- |

1.2.

| 1.3. | The European Economic and Social Committee (EESC) commends the European Commission’s swift creation of HERA, building up on the work launched by the biodefence preparedness plan set up in February 2021 as the HERA Incubator (1). Quick action was necessary to respond to the spread and impact of the COVID-19 pandemic, including the many waves of infections and hospitalisation faced by all Member States, which remain a reality today. |
| --- | --- |

1.3.

| 1.4. | However, swift measures should not be to the detriment of democracy and health equity. The creation of a new, permanent EU structure of such importance, operating with a substantial public budget, should not be based on exceptional clauses reserved for acute crises. The EESC is particularly concerned by the very limited role given by HERA to the European Parliament, regional authorities, health insurance bodies and civil society organisations, including social partners, such as trade unions representing workers in the health sectors, as well as public health, patient and equality organisations, service providers and not-for-profit infrastructure and non-commercial research institutions. The EESC believes that these stakeholders must be given an active role in the work of HERA. In particular, the EESC points to the crucial role played by frontline workers, especially those working in the healthcare sectors and volunteers, in the response to the COVID-19 pandemic. |
| --- | --- |

1.4.

| 1.5. | While the EESC recognises the importance of the industry in tackling health emergencies, a fair balance must be guaranteed to ensure that public health and the interests of vulnerable groups are at the core of the EU’s preparedness and response. The EESC asks the Commission to ensure that the European Parliament, social partners and civil society organisations are involved in HERA’s Board and Advisory Forum in a meaningful way. The EESC calls for the creation of a subgroup of the Advisory Forum on an equal footing with the joint industrial cooperation forum. The EESC and the Committee of the Regions should have a seat in this subgroup. |
| --- | --- |

1.5.

| 1.6. | The EESC is particularly concerned by the lack of transparency and openness in the current set-up of HERA. While the Commission formalises ad hoc measures introduced during the pandemic, it falls short of bringing greater transparency to its decision-making process. Transparent governance of public funding and of cooperation with private partners is essential to build trust and confidence in managing health emergencies. The EESC recommends that more attention be paid to ensuring full transparency with regard to the funds allocated and spent by and through HERA, open contracting and the possibility for civil society to be involved in the oversight of the financial aspects of the authority. |
| --- | --- |

1.6.

| 1.7. | Other measures are also significant in ensuring that preparedness and response measures, including the deployment of medical countermeasures, are successful in Member States. The EESC feels that HERA should ensure better coordination of communication campaigns related to prevention and response to public health emergencies, including by targeting people who are the most at risk, and by working with local authorities, including in relation to education and training on science and vaccination. |
| --- | --- |

1.7.

| 1.8. | The international dimension of cross-border health threats must also be addressed. The EESC considers that HERA must play an important role in global action against cross-border health threats and pandemics, in particular through COVAX as well as new candidate drugs and therapies, and by strengthening and supporting the global health security architecture. HERA should commit to working with global actors, including with the World Health Organisation, to share intelligence and to support global access to vaccines and other medical countermeasures. The EESC asks the Commission to lead an open debate at European level on a temporary TRIPS voluntary waiver, which would apply to COVID-19 vaccines, treatments and tests, in order to enable global vaccine production to be ramped up and costs reduced to ensure access for people across the world. |
| --- | --- |

1.8.

| 1.9. | HERA has been presented as a flexible structure that will be adapted as required, with an in-depth review scheduled for 2025. It is crucial that the concerns raised about the structure, functioning and scrutiny of HERA be addressed as soon as possible, and that the impact of the measures taken by the authority is regularly monitored in light of the current pandemic. The EESC recommends that, during the 2025 review, the Commission consider transforming HERA into an independent public authority outside the Commission, through a legislative procedure involving the European Parliament as co-legislator, and after consultations with civil society organisations, including social partners. |
| --- | --- |

1.9.

| 1.10. | Finally, the EESC asks the Commission to ensure that the financial efforts made to finance HERA do not lead to lower investment in other objectives of the EU4Health programme, in particular the Cancer Plan. After years of austerity, health policies and health systems continue to require major investment. |
| --- | --- |

1.10.

2.   General comments

| 2.1. | The EESC supports the commitment and initiatives of the European institutions, including those of the Commission, aimed at building a European Union of health and ensuring the sustainable well-being of its citizens. A population-based, cross-sectoral, holistic approach to health is a key dimension for the implementation of the European Pillar of Social Rights and its Action Plan, the Action Plan for the Social Economy and the Conference on the Future of Europe. |
| --- | --- |

2.1.

| 2.2. | The EESC welcomes the swift creation and operationalisation of HERA by the Commission. The new HERA is set up with the objective of strengthening Europe’s ability to prevent, detect and rapidly respond to cross-border health emergencies, emphasising the development, manufacturing, procurement and analogical distribution of key medical and medicinal countermeasures. |
| --- | --- |

2.2.

| 2.3. | The COVID-19 pandemic and its successive waves have highlighted the need to strengthen Europe’s ability to prevent, detect, and rapidly respond to cross-border health emergencies, emphasising the development, manufacturing, procurement, and equitable and analogical distribution of key medical and medicinal countermeasures. The EESC notes that besides the immediately visible effects of the pandemic, there are additional silent pandemics, notably the postponement of care for non-communicable diseases (among others, cancer), the exacerbation of social inequalities in health, the deterioration of mental health and the connection of health and the environment in an ecosystemic vision (‘one health’ approach). |
| --- | --- |

2.3.

| 2.4. | The EESC observes that millions of lives have been lost since the beginning of the COVID-19 pandemic and that other millions are still affected. It recognises the important role played by frontline workers, in particular healthcare workers and volunteers, regional and local authorities, health insurance bodies and civil society organisations, including social partners, service providers and equality organisations, in ensuring swift responses and health equality. |
| --- | --- |

2.4.

| 2.5. | HERA is one of the mechanisms for consolidated and increased European and international cooperation, coordination and solidarity. It must be integrated into a multi-stakeholder and multi-level governance framework. Sustainable and resilient cooperation on HERA can only be achieved by cooperation of Member States at Union-level aimed at preventing future pandemics with swift decision-making and the activation of emergency measures. At the same time, a variety of actors need to be involved, including the European Parliament, regional authorities, health insurance bodies and organised civil society, including social partners such as trade unions representing workers in the health sectors, public health, patients and equality organisations, service providers and non-for-profit infrastructure and non-commercial research institutions. |
| --- | --- |

2.5.

| 2.6. | The EESC has previously expressed its opinion and recommendations on the creation of a future health emergency response authority in an opinion on Building a European Health Union adopted in April 2021 (2). The EESC calls for follow-up to the Conclusions adopted by the European Council at its meeting on Thursday 16 December 2021 on the work to strengthen collective preparedness, response and resilience to future crises, which is a major cross-cutting political priority for the Union. The Council advocated ‘strengthening the EU’s crisis response and preparedness in an all-hazards approach’ and ‘building and monitoring resilience and addressing areas where we are exposed’ (3). |
| --- | --- |

2.6.

3.   Review of the institutional and operational frameworks of HERA

| 3.1. | In September 2021, the Commission announced the creation and immediate start of operation of HERA. The new authority has been established as a structure within the Commission with three core missions: (a) to strengthen health security coordination within the EU during preparedness and crisis response times, and bringing together the Member States, industry and the relevant stakeholders in a common effort; (b) to address vulnerabilities and strategic dependencies within the EU related to the development, production, procurement, stockpiling and distribution of medical countermeasures; and (c) to contribute to reinforcing the global health emergency preparedness and response architecture. |
| --- | --- |

3.1.

| 3.2. | The EESC stresses that the Commission’s decision, motivated by urgency, to opt for an ‘Authority’, as an internal structure within the Commission, rather than an ‘Agency’ should not exclude a possible review and evolution towards an independent authority or even a European agency. The annual evaluations and the in-depth evaluation in 2025 should be focused on this. |
| --- | --- |

3.2.

| 3.3. | One of the dimensions of HERA is the different roles it will play during preparedness and crisis phases. In the ‘preparedness phase’, it will steer investments and actions in strengthening prevention, preparedness and readiness for new public health emergencies. In the ‘crisis phase’, it will draw on stronger powers for swift decision-making and implementation of emergency measures. Its actions in both phases will be aimed at ensuring swift access to safe and effective medical countermeasures at the scale needed. Preparedness and pandemic programmes should be initiated with the Member States since this is a collective endeavour and will be essential for HERA to fully fulfil its mission. |
| --- | --- |

3.3.

| 3.4. | While it was urgent for the EU to create and operationalise a health emergency preparedness and response authority to immediately support the response to COVID-19, which is still spreading across Europe and the world, there is a need to guarantee that HERA has been equipped to efficiently strengthen coordination of preparedness and response efforts and adequately protect the health and lives of people living in the EU in case of public health emergencies. To that end, it must be ensured that the structure and functioning of HERA are transparent and can be scrutinised, including to monitor the impact on public health. Transparent governance and decision-making processes are essential to allow for public scrutiny, to build trust and confidence in the R&D system and ensure accountability. |
| --- | --- |

3.4.

| 3.5. | The EESC notes that one of the guidelines that we must promote in the exchanges between the European and national committees and the Conference on the Future of Europe is health democracy. In view of the complex issues raised by health emergencies and by the resilience of health systems, the EESC recommends that a compulsory consultation mechanism be introduced as a prerequisite for decision-making. The aim is to involve all stakeholders as closely as possible in the decision-making process in the health sector. |
| --- | --- |

3.5.

| 3.6. | The EESC stresses the importance that the work undertaken by HERA strengthen and complete the actions carried out by other EU bodies such as the European Medical Agency (EMA) and the European Centre for Disease Prevention and Control (ECDC) and the European Environment Agency (EEA). |
| --- | --- |

3.6.

4.   The mandate of HERA and arrangements for its implementation

| 4.1. | The EESC particularly welcomes the coordination role HERA will play in order to ensure the development, production, procurement, stockpiling and equitable distribution of medical countermeasures. In that sense, HERA will fill an important gap in the EU framework on health. Development and production of medical countermeasures will require substantial investments. Stockpiling will require adequate planning and a high level of expertise to ensure the future protection of EU citizens and economic sustainability. There is always a risk of wastage, which would have a clear negative economic outcome. It is also important to define a list of active substances necessary for the manufacture of medicines which should be manufactured in the EU to ensure drug safety and independence. |
| --- | --- |

4.1.

| 4.2. | The EESC points to the Commission Communication on ‘Drawing the early lessons from the COVID-19 pandemic’ (4), with a view to stepping up action at EU and national level, as a publication that should be expanded and systematised twice a year under the umbrella of HERA. In terms of enlargement, upstream multi-stakeholder consultations need to be carried out with a view to a complete overview. |
| --- | --- |

4.2.

| 4.3. | The EESC considers that the current mandate of HERA lacks ambition. Under the current framework, HERA misses the opportunity to truly defend the public interest and ensure equity during preparedness and crisis response times. While the Commission announced that HERA will have capacities for data collection, analysis and sharing mechanisms, no commitment was made to ensure collection of better disaggregated data on vulnerable groups. Such data is a prerequisite for fighting health inequalities and is currently not gathered by the ECDC. HERA also does not commit to ensuring non-discrimination and equality in the distribution of medical countermeasures. In its opinion on Building a European Health Union, the EESC already highlighted the importance of focusing on non-discrimination in the EU’s response to future pandemics and the role HERA could play in that regard (5). |
| --- | --- |

4.3.

| 4.4. | The EESC believes that HERA must take additional measures to ensure that its work contribute to equality during health emergencies, including cross-border health emergencies. Considering the lack of coordinated and accessible communication campaigns during the COVID-19 pandemic, HERA could also play a role in ensuring better coordination of communication campaigns related to prevention and response to cross-border health crises, specifically targeting people the most at risk and vulnerable groups. HERA should also address access to cross-border healthcare during pandemics and other cross-border health emergencies. Freedom of movement is a fundamental principle of the Union and should be guaranteed for patients, including in order to ensure greater health equity. |
| --- | --- |

4.4.

| 4.5. | Further action should also be considered in relation to the international dimension of HERA to contribute to reinforcing the global health emergency preparedness and response architecture. The communication on HERA fails to include a requirement to share know how, data and technologies created with the help of public research funding, as well as a reasonable pricing clause. The international dimension of HERA is particularly important, from preparedness to response to cross-border health threats. The current COVID crisis proves that cross-border health crises cannot be solved without ensuring rapid and efficient international response, including access to personal protective equipment and vaccination. HERA should also commit to working with global actors, share intelligence and support global access to vaccines and other medical countermeasures. |
| --- | --- |

4.5.

| 4.6. | Provided HERA focuses on improving health security and is subject to checks and balances, Member States can significantly increase the resilience of their health systems and their capacity to respond to health crises. National governments and the Commission should therefore seek to strengthen HERA’s structure and expand its scope in the future. |
| --- | --- |

4.6.

| 4.7. | The EESC remains concerned about potential overlaps with the work of other bodies including the EMA and ECDC. In some areas such as crisis preparedness, research, data and coordinated distribution of medicines and medical devices the added value remains unclear in light of the proposals to extend the mandate of the ECDC and EMA, and the Regulation on serious cross-border threats to health. As an example, in its opinion on Building a European Health Union (6), the EESC questioned whether the recommendations coming from the HERA would have precedence over those coming from the EMA in the case of the declaration of an epidemic affecting the EU. Therefore, the significance of coordination is evident to avoid overlapping and at the same time to reflect European values by embedding collaboration guided by the principles of transparency, accountability and integrity. |
| --- | --- |

4.7.

| 4.8. | The HERA Board will have the mandate to ‘make sure to avoid overlaps with other key structures, such as the Health Security Committee, the Vaccine Steering Board and relevant committees involved in the management of EU programmes, with close contacts needed’ (7). The EESC doubts that this commitment will be enough to avoid overlap in the work of the different EU structures. |
| --- | --- |

4.8.

| 4.9. | The EESC also calls for clarification of HERA’s remit in relation to antimicrobial resistance (AMR) as a threat to global health, which continues to worsen, despite the emerging awareness of the seriousness and scale of the problem. Although AMR is a complex and cross-sectoral issue, unclear mandates threaten to blur responsibilities and policy initiatives. AMR is a key issue for a ‘One Health’ approach. |
| --- | --- |

4.9.

5.   The functioning and scrutiny of HERA

| 5.1. | The EESC is concerned by the structure and the lack of independence of HERA. The Authority was initially inspired by the example of the US BARDA (Biomedical Advanced Research and Development Authority) (8) and designed as an independent and autonomous agency. Instead, HERA has been established as a structure under the remit of the Commission. HERA appears to be primarily a technical authority and still lacks a strategic, forward-looking (foresight) component for addressing the determinants of cross-border threats. |
| --- | --- |

5.1.

| 5.2. | The EESC questions the lack of consultation and involvement of the European Parliament before and during the establishment of HERA. It is also concerned that in its current structure, the role of the European Parliament is reduced to a simple vote on the budget and an observer role on HERA’s Board. While the Commission commits to regular exchanges with the European Parliament about HERA’s work, this is not a requirement and no further specifications were given in the Commission communication. The EESC recalls that democratic scrutiny is essential in the development of public health policies, and it cannot happen without the European Parliament playing an active role in the work of HERA. |
| --- | --- |

5.2.

| 5.3. | Civil society organisations, social partners and especially trade unions representing the workforce in the sectors concerned, as well as public health, patients and equality organisations and service providers, play an important role in ensuring that the public interest is at the core of public health policies and measures taken by the EU and its Member States in relation to crisis prevention and response. In particular, civil society can provide feedback on the acceptability of public health measures and information on the needs of vulnerable groups. The EESC is particularly concerned by the lack of inclusion of organised civil society, including social partners, in the structure and functioning of HERA. Under the present structure, organised civil society may only contribute to the work of the HERA Advisory Forum with other external stakeholders, including industry and academia. For example, civil society has not been allocated any role in the HERA Board and the Health Crisis Board that will coordinate urgent actions during a crisis phase. |
| --- | --- |

5.3.

| 5.4. | In comparison, HERA gives a more predominant role to the industry. The Commission communication on HERA provides for enhanced collaboration with industry in relation to threat detection and reinforcing industrial resilience within and outside the EU. It also announced the creation of a Joint Industrial Cooperation Forum as a subgroup of the Advisory Forum, which will include industry representatives. While the EESC recognises the importance of industry in tackling health emergencies, it is concerned that the current structure of HERA could fail to ensure that public health and the interests of vulnerable groups are at the core of the EU’s preparedness and response, instead favouring industrial policy. In any case a sustainable industrial policy must be in line with the objectives of HERA and must proactively involve all relevant stakeholders. The Joint Industrial Cooperation Forum needs therefore, to involve not only industry representatives but also trade unions to enhance worker participation (9). |
| --- | --- |

5.4.

| 5.5. | The EESC recommends creating of a subgroup of the Advisory Forum on an equal footing with the joint industrial cooperation forum. The subgroup should include civil society organisations such as patient and public health organisations, health insurance bodies, social partners — including trade unions from the health sector — and not-for-profit infrastructure and non-commercial research institutions. The EESC and the Committee of the Regions should also have a seat in this subgroup. |
| --- | --- |

5.5.

| 5.6. | Transparency is another concern under the current set-up of HERA. For example, there is not enough openness regarding the allocation of public financing or about purchasing agreements, the details of contracts or the beneficiary enterprises, including, for example, vaccine prices. Transparent governance of public funding and of cooperation with private partners is essential to build trust and confidence in managing health emergencies. The EESC recommends that more attention be paid to ensuring full transparency of the funds allocated and spent by and through HERA, open contracting and the possibility for civil society to be involved in the oversight of the financial aspects of the authority (10). |
| --- | --- |

5.6.

| 5.7. | While the EESC welcomes the allocation of a budget of EUR 6 billion up to 2027 from the Multiannual Financial Framework and NextGenerationEU and EUR 24 billion invested by other EU programmes such as the Recovery and Resilience Facility, REACT-EU and cooperation instruments, the EESC is of the opinion that greater scrutiny and democracy are necessary to make this investment worthwhile. |
| --- | --- |

5.7.

| 5.8. | The EESC calls for this financial effort for HERA not to be made to the detriment of the other objectives of the EU4Health programme, in particular the cancer plan. The recommendations made by the EESC in its opinion on the EU4Health Programme remain relevant. After years of austerity, health policies and health systems require major investment. |
| --- | --- |

5.8.

6.   The future of HERA

| 6.1. | HERA has been designed to be a flexible structure that will be adapted as required. A review of its implementation and operation, including structure and governance, is foreseen in 2025. |
| --- | --- |

6.1.

| 6.2. | The EESC is of the opinion that the governance of HERA should be reviewed as soon as possible to ensure better scrutiny and representation. In particular, it should:






  — | Ensure a stronger role of the European Parliament; |
| --- | --- | --- |

6.2.

—

Ensure a stronger role of the European Parliament;

| — | Increase the role of, and cooperation with, civil society organisations, including social partners; |
| --- | --- |

—

Increase the role of, and cooperation with, civil society organisations, including social partners;

| — | Ensure the role of industry is well-balanced and scrutinised. |
| --- | --- |

—

Ensure the role of industry is well-balanced and scrutinised.

| 6.3. | The EESC recommends that the Commission consider transforming HERA into an independent public authority outside of the Commission (11), through a legislative procedure involving the European Parliament as co-legislator. It is also essential that organised civil society is involved in any future discussion on the structure and mandate of HERA and during its in-depth review in 2025. |
| --- | --- |

6.3.

| 6.4. | The revised HERA must put a stronger focus on public health and preparedness and crisis response at the service of EU citizens. The EESC considers that HERA must play a role to address health inequalities in cross-border health emergencies and the future impact that health emergencies have on high-risk social groups, as well as on health and care workers. This could be achieved by: |
| --- | --- |

6.4.

| 6.4.1. | Guaranteeing better inclusion of civil society: the structure of HERA must be revised to include civil society organisations representing public health organisations, patients, equality organisations, and employees and their trade unions, in relevant decision-making bodies and processes. For example, in addition to the proposal for a subgroup of the Advisory Forum, HERA could set up a specific Task Force focusing specifically on populations at risk and vulnerable groups. |
| --- | --- |

6.4.1.

| 6.4.2. | Collecting disaggregated data: as ensuring the collection of better disaggregated data in vulnerable groups and the number of healthcare workers is a prerequisite for fighting health inequalities and achieving adequate needs-based staffing levels, the EESC is of the opinion that HERA should invest in data collection and disaggregation. |
| --- | --- |

6.4.2.

| 6.4.3. | Coordinating communication campaigns during cross-border health emergencies: the EESC reiterates its proposal that HERA coordinate communication campaigns during health emergencies to ensure people have a better level of understanding of how to protect themselves, what adaptations they need to make sure their daily activities remain safe and, if and when treatments are available, how to have access to them. In the preparedness phase, HERA could also ensure communication about prevention of a pandemic and prepare EU citizens for future health threats. |
| --- | --- |

6.4.3.

| 6.4.4. | Developing reliable, verified, semi-specialised information for awareness-raising and education of the population through the Member States’ health authorities and health actors (civil society, social economy, including mutual societies), in trusting science and being more adaptive to accepting vaccination not only in a pandemic crisis but also in endemics. HERA should also consider a specific EU training programme to be offered to public health officers and health professionals in order to promote and support the overall EU culture in building science and facing current and future health threats. |
| --- | --- |

6.4.4.

| 6.4.5. | Organising upstream multi-stakeholder consultations with a view to drafting twice-yearly European reports and annual national reports. |
| --- | --- |

6.4.5.

| 6.5. | Small and medium-sized enterprises (SMEs) specialising in medical and medicinal products have to play an essential role in future pandemics and certain incentives and protocols should be established under HERA to give them the tools and funding necessary to cover all aspects of fighting future pandemics and endemics that could become pandemics. |
| --- | --- |

6.5.

| 6.6. | A real economic incentive for SMEs would be to encourage their participation in the Strategic Plan 2020-2024 and specially the InvestEU programme (2021-2027) which aims to give an additional boost to sustainable investment, innovation, digital transformation and job creation in Europe. |
| --- | --- |

6.6.

| 6.7. | The production of over 1,3 billion vaccines was enough to vaccinate more than 75 % of the adult population (12) and export half of the production to fight the global pandemic (13). However, ensuring access to vaccination to the 25 % of the population currently unvaccinated remains vital for saving lives. HERA should continue to lead global action against cross-border health threats and pandemics, including ensuring global vaccine equity. The EESC believes that the EU should continue to respond to the crisis in a consistent and global manner, in particular through COVAX as well as new candidate drugs and therapies, and to strengthen and support the global health security architecture. This must also strengthen the EU’s role in the World Health Organization. In this context, in order to respond to the urgent needs of developing countries in particular, the EESC continues to ask the Commission to lead an open debate at European level on a temporary TRIPS voluntary waiver that would apply to COVID-19 vaccines, treatments and tests, in order to enable global vaccine production to be ramped up and the costs lowered to ensure access for people across the world (14). |
| --- | --- |

6.7.

| 6.8. | Effective mechanisms to ensure global access to vaccines and therapies developed with public funds are and will be crucial to avoid the current inequalities in vaccines around the world — where around 60 % of people living in high income countries have received at least one dose, compared to only 24 % in middle income countries and less than 2 % in low income countries. The EU must take into account the — scientifically evidenced — mantra that ‘No one is safe until everyone is safe’. |
| --- | --- |

6.8.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  COM(2021) 78 final, 12 February 2021.

1

(2)  OJ C 286, 16.7.2021, p. 109.

2

(3)  https://www.consilium.europa.eu/media/53575/20211216-euco-conclusions-en.pdf

3

(4)  https://ec.europa.eu/info/sites/default/files/communication150621.pdf

4

(5)  OJ C 286, 16.7.2021, p. 109.

5

(6)  OJ C 286, 16.7.2021, p. 109.

6

(7)  https://ec.europa.eu/health/sites/default/files/preparedness_response/docs/hera_2021_comm_en.pdf

7

(8)  https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_20_1655

8

(9)  See, for example, the EPSR Action Plan where the Commission promotes greater worker participation.

9

(10)  The EESC had stressed in its opinion on Reshaping the EU fiscal framework for a sustainable recovery and a just transition that ‘transparency of revenue and spending, open contracting and the constant involvement of civil society in the oversight of public financial management are also necessary to ensure sustainable public finances.’ (OJ C 105, 4.3.2022, p. 11).

10

(11)  OJ C 286, 16.7.2021, p. 109.

11

(12)  https://ec.europa.eu/info/live-work-travel-eu/coronavirus-response/safe-covid-19-vaccines-europeans_en

12

(13)  https://ec.europa.eu/info/live-work-travel-eu/coronavirus-response/safe-covid-19-vaccines-europeans/global-response-coronavirus_en#covax

13

(14)  EESC opinion on Emerging stronger from the pandemic (OJ C 152, 6.4.2022, p. 116).

14

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/66 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/66

---

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the statute and funding of European political parties and European political foundations (recast)

(COM(2021) 734 final – 2021/0375 (COD))

Proposal for a Regulation of the European Parliament and of the Council on the transparency and targeting of political advertising

(COM(2021) 731 final – 2021/0381 (COD))

(2022/C 275/11)

| Rapporteur: | Andris GOBIŅŠ |
| --- | --- |
| Co-rapporteur: | Carlos Manuel TRINDADE |

Rapporteur:

Andris GOBIŅŠ

Co-rapporteur:

Carlos Manuel TRINDADE

| Referral | European Parliament, 13.12.2021
  Council of the European Union, 15.12.2021 and 21.1.2022 |
| --- | --- |
| Legal basis | Article 114 and 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Employment, Social Affairs and Citizenship |
| Adopted in section | 10.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 222/4/5 |

Referral

European Parliament, 13.12.2021

Council of the European Union, 15.12.2021 and 21.1.2022

Legal basis

Article 114 and 304 of the Treaty on the Functioning of the European Union

Section responsible

Employment, Social Affairs and Citizenship

Adopted in section

10.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

222/4/5

1.   Conclusions and recommendations

| 1.1 | The EESC welcomes the aims and motivation of the European election package. Being aware of the big challenges and dangers for democratic processes, the EESC suggests being more ambitious in the Regulations and putting them into action as soon as possible. |
| --- | --- |

1.1

| 1.2 | Enabling and promoting conscious political participation by citizens is critical, as are ensuring transparent, accessible and honest political activities and a clear and active role for civil society. This opinion proposes several amendments to the Regulations and some additional actions in this respect. |
| --- | --- |

1.2

| 1.3 | The EESC supports including all aspects linked to political campaigning in the election package. A stronger focus is needed on countering disinformation, as the latter has an increasing impact on elections and transparency. Fact checking and media literacy cannot address either the barrage of divisive and misleading content that citizens are exposed to, or what attracts some citizens to such content in the first place. |
| --- | --- |

1.3

1.4   
  On the transparency and targeting of political advertising, the EESC suggests specific proposals for improvement (see part 3.1.):

| i. | using a broad but clear definition of political advertising that goes beyond officially remunerated activities, including impacts via so-called ‘bots’ and ‘trolls’ and/or manipulative information; |
| --- | --- |

i.

using a broad but clear definition of political advertising that goes beyond officially remunerated activities, including impacts via so-called ‘bots’ and ‘trolls’ and/or manipulative information;

| ii. | broadening the scope of penalties for wrongdoings; |
| --- | --- |

ii.

broadening the scope of penalties for wrongdoings;

| iii. | broadening the legal base to cover all legal and physical persons; |
| --- | --- |

iii.

broadening the legal base to cover all legal and physical persons;

| iv. | limiting possibilities for non-EU players to exert influence; |
| --- | --- |

iv.

limiting possibilities for non-EU players to exert influence;

| v. | providing directly visible information (not links) on key transparency issues; |
| --- | --- |

v.

providing directly visible information (not links) on key transparency issues;

| vi. | making information available and transparent; |
| --- | --- |

vi.

making information available and transparent;

| vii. | having the same rules for everyone; |
| --- | --- |

vii.

having the same rules for everyone;

| viii. | creating the possibility of complaining directly to competent national authorities, not only to the relevant online platform; |
| --- | --- |

viii.

creating the possibility of complaining directly to competent national authorities, not only to the relevant online platform;

| ix. | making information accessible to every citizen without limitations; |
| --- | --- |

ix.

making information accessible to every citizen without limitations;

| x. | prohibiting targeted political advertising based on pervasive tracking and processing of information concerning an individual's on- or offline behaviour; |
| --- | --- |

x.

prohibiting targeted political advertising based on pervasive tracking and processing of information concerning an individual's on- or offline behaviour;

| xi. | limiting or stopping targeting and amplification techniques in political advertising that involve the processing of personal data, due to risks linked to limited provision of consent; |
| --- | --- |

xi.

limiting or stopping targeting and amplification techniques in political advertising that involve the processing of personal data, due to risks linked to limited provision of consent;

| xii. | completely prohibiting targeting based on special categories of sensitive personal data; |
| --- | --- |

xii.

completely prohibiting targeting based on special categories of sensitive personal data;

| xiii. | providing full transparency on targeting techniques, even when not directly linked to a certain campaign; |
| --- | --- |

xiii.

providing full transparency on targeting techniques, even when not directly linked to a certain campaign;

| xiv. | considering special regulations for countries where the independence of public media is not properly ensured. |
| --- | --- |

xiv.

considering special regulations for countries where the independence of public media is not properly ensured.

1.5   
  On the statute and funding of European political parties and European political foundations (recast), the EESC suggests specific proposals to (see part 3.2.):

| i. | strengthen standards concerning gender balance; |
| --- | --- |

i.

strengthen standards concerning gender balance;

| ii. | tackle discrimination and promote human rights; |
| --- | --- |

ii.

tackle discrimination and promote human rights;

| iii. | limit donations to parties from countries outside the EU; |
| --- | --- |

iii.

limit donations to parties from countries outside the EU;

| iv. | set a universal ceiling for citizen donations of EUR 18 000 per year; |
| --- | --- |

iv.

set a universal ceiling for citizen donations of EUR 18 000 per year;

| v. | regulate external service providers; |
| --- | --- |

v.

regulate external service providers;

| vi. | limit the involvement of EU parties in national referendum campaigns; |
| --- | --- |

vi.

limit the involvement of EU parties in national referendum campaigns;

| vii. | lower the cap of anonymous donations to EUR 1 000; |
| --- | --- |

vii.

lower the cap of anonymous donations to EUR 1 000;

| viii. | continue the co-financing system for European political parties. |
| --- | --- |

viii.

continue the co-financing system for European political parties.

1.6   
  On resilience and strengthening the role of civil society in electoral processes (developed in part 3.3.):

| i. | give citizens a meaningful say in shaping the EU's future beyond/between elections; |
| --- | --- |

i.

give citizens a meaningful say in shaping the EU's future beyond/between elections;

| ii. | hold an annual event to share best practices and draw up an annual plan to strengthen democracy, participation and civic dialogue and the implementation of Article 11 TEU; |
| --- | --- |

ii.

hold an annual event to share best practices and draw up an annual plan to strengthen democracy, participation and civic dialogue and the implementation of Article 11 TEU;

| iii. | create a financial instrument for conducting impartial and inclusive ‘get out to vote’ campaigns; |
| --- | --- |

iii.

create a financial instrument for conducting impartial and inclusive ‘get out to vote’ campaigns;

| iv. | create a funding programme for journalists, researchers, fact-checkers and watchdog organisations; |
| --- | --- |

iv.

create a funding programme for journalists, researchers, fact-checkers and watchdog organisations;

| v. | support expert cooperation and work on campaign finance, online forensics, countering disinformation, and cybersecurity; |
| --- | --- |

v.

support expert cooperation and work on campaign finance, online forensics, countering disinformation, and cybersecurity;

| vi. | remove remaining barriers and ensure inclusive participation in elections; |
| --- | --- |

vi.

remove remaining barriers and ensure inclusive participation in elections;

| vii. | Support mobile citizens; |
| --- | --- |

vii.

Support mobile citizens;

| viii. | ensure barrier-free elections for EU citizens with disabilities; |
| --- | --- |

viii.

ensure barrier-free elections for EU citizens with disabilities;

| ix. | encourage individuals to become members of all European political parties; |
| --- | --- |

ix.

encourage individuals to become members of all European political parties;

| x. | ensure citizens have the right to know which political parties at national level have or plan links to European parties; |
| --- | --- |

x.

ensure citizens have the right to know which political parties at national level have or plan links to European parties;

| xi. | harmonise legislation relating to European Parliament election conditions (voting age, election date, requirements for electoral districts, candidates, and political parties and their financing) and promote the importance of education. |
| --- | --- |

xi.

harmonise legislation relating to European Parliament election conditions (voting age, election date, requirements for electoral districts, candidates, and political parties and their financing) and promote the importance of education.

2.   Background and general comments

2.1   
  Background to the opinion, including the legislative proposal concerned

| 2.1.1 | The Reinforcing democracy and integrity of elections package was issued by the European Commission on 25 November 2021. It had previously been announced in the political guidelines of the European Commission president, Ursula von der Leyen, and in the European Democracy Action Plan, adopted in December 2020. The package contains the following, of which the EESC was only asked to address points i and ii in its opinion:






  i. | the revision of the Regulation on the statute and funding of European political parties and European political foundations; |
| --- | --- | --- |

2.1.1

i.

the revision of the Regulation on the statute and funding of European political parties and European political foundations;

| ii. | a proposal for a Regulation on greater transparency in paid political advertising; |
| --- | --- |

ii.

a proposal for a Regulation on greater transparency in paid political advertising;

| iii. | the revision of two Directives on the right to vote by ‘mobile EU citizens’ (citizens of the EU residing in a Member State of which they are not nationals); |
| --- | --- |

iii.

the revision of two Directives on the right to vote by ‘mobile EU citizens’ (citizens of the EU residing in a Member State of which they are not nationals);

| iv. | a proposed joint mechanism for electoral resilience. |
| --- | --- |

iv.

a proposed joint mechanism for electoral resilience.

2.2   
  General comments

| 2.2.1 | The EESC highlights the following:






  i. | The EESC welcomes the updates to the 2018 elections package (1). |
| --- | --- | --- |

2.2.1

i.

The EESC welcomes the updates to the 2018 elections package (1).

| ii. | The EESC stresses the importance of action at EU level to promote democratic debate. |
| --- | --- |

ii.

The EESC stresses the importance of action at EU level to promote democratic debate.

| iii. | The EESC agrees with the Commission's statement that ‘[it] must be clear for citizens that they are receiving political content and from whom. There should be meaningful transparency to allow for public scrutiny and accountability of relevant actors and reflect the inclusiveness and diversity of our societies.’ (2) |
| --- | --- |

iii.

The EESC agrees with the Commission's statement that ‘[it] must be clear for citizens that they are receiving political content and from whom. There should be meaningful transparency to allow for public scrutiny and accountability of relevant actors and reflect the inclusiveness and diversity of our societies.’ (2)

| iv. | In particular, aspects relating to enabling citizen participation and the inclusiveness and diversity of our societies need more and better proposals and joint EU action. Several points in this regard are included in the EESC opinion on the Democracy Action Plan (3). |
| --- | --- |

iv.

In particular, aspects relating to enabling citizen participation and the inclusiveness and diversity of our societies need more and better proposals and joint EU action. Several points in this regard are included in the EESC opinion on the Democracy Action Plan (3).

| v. | The EESC highlights the dangers that disinformation poses to democracy in the European Union, and stresses that a strong and decisive response is needed to prevent a situation in which the objectivity of elections and civic participation are being undermined. |
| --- | --- |

v.

The EESC highlights the dangers that disinformation poses to democracy in the European Union, and stresses that a strong and decisive response is needed to prevent a situation in which the objectivity of elections and civic participation are being undermined.

| vi. | The digital revolution has transformed democratic politics. Online tools, consisting of a wide range of instruments, play a key role in political campaigns. Some of these campaigns aim to provoke distrust and frustration, and to distort thinking and understanding. The EESC agrees with the Commission that, as a result of this, the digitalisation of political campaigning, despite offering unprecedented means of reaching out to people, may have adverse impacts on democracy. In fact, according to Eurobarometer, half of Europeans say that while using the internet they have been exposed to disinformation and divisive online content. Furthermore, one third of those Europeans were exposed to content and could not identify whether or not it was a political advertisement (4). |
| --- | --- |

vi.

The digital revolution has transformed democratic politics. Online tools, consisting of a wide range of instruments, play a key role in political campaigns. Some of these campaigns aim to provoke distrust and frustration, and to distort thinking and understanding. The EESC agrees with the Commission that, as a result of this, the digitalisation of political campaigning, despite offering unprecedented means of reaching out to people, may have adverse impacts on democracy. In fact, according to Eurobarometer, half of Europeans say that while using the internet they have been exposed to disinformation and divisive online content. Furthermore, one third of those Europeans were exposed to content and could not identify whether or not it was a political advertisement (4).

| vii. | The EESC supports the vision that the EU's role in strengthening democracy should be considered at a global level, namely through external EU action by the EU, as stated in COM(2021) 730. |
| --- | --- |

vii.

The EESC supports the vision that the EU's role in strengthening democracy should be considered at a global level, namely through external EU action by the EU, as stated in COM(2021) 730.

3.   Specific comments

3.1   
  Suggested amendments to the proposal for a Regulation on the transparency and targeting of political advertising

| 3.1.1 | The EESC supports a broad but clear definition of political advertising, and suggests including appropriate actions on diverse means of campaigning/paying to exert influence on political processes, including impacts via so-called ‘bots’ and ‘trolls’ and/or manipulative information. Problems can occur if an unclear definition results in excessive leeway or differences in implementation on the various platforms. |
| --- | --- |

3.1.1

| 3.1.2 | The EESC considers that the current list of possible sanctions is very limited and suggests adding a new point in Article 15(5) which should read as follows: ‘d. Act with the objective of applying criminal penalties e.g. for large scale fraud’. Furthermore, the EESC calls for European common criteria for penalties at national level. |
| --- | --- |

3.1.2

| 3.1.3 | At the moment, the legal base chosen is too narrow, which means that the Regulation primarily concerns services that are provided by economic actors and are paid for. The legal base should be expanded and rules on political advertising must apply to all legal and physical persons that de facto create and publish political advertising. Rules on physical persons should be clarified so that they do not apply to people who share their political opinions in a purely private capacity. Negative side effects on civil society and their engagement and participation in decision making should be addressed through an in-depth dialogue with the relevant organisations. |
| --- | --- |

3.1.3

| 3.1.4 | Point 14 of the preamble indicates that advertising ‘entirely prepared, placed or published by service providers established outside the Union but disseminated to individuals in the Union’ falls under the scope of the Regulation and thus is, in principle, permissible. However, the risk of foreign interference in elections is too serious a threat for democracy in the EU. A set of special provisions must be developed with the aim of preventing the dissemination in the EU of political advertisements or other campaign activities directly or indirectly financed by entities outside the EU. |
| --- | --- |

3.1.4

| 3.1.5 | For greater transparency, point 1(c) of Article 7 of the draft Regulation should be amended as follows: ‘a transparency notice to enable the wider context of the political advertisement and its aims to be understood’, deleting the following part of the text: ‘, or a clear indication of where it can be easily retrieved’. Point 40 of the preamble should be changed accordingly. |
| --- | --- |

3.1.5

| 3.1.6 | For greater transparency, Article 7 of the draft Regulation should also provide for the publication of the amount spent on the advertisement and the related campaign. Existing best practice in Member States demanding pre-election transparency on advertisement and service prices which apply to all political forces equally should be supported and included in the Regulation. A system for monitoring this should be established. |
| --- | --- |

3.1.6

| 3.1.7 | The right of citizens to receive transparent information about political advertising should prevail over the administrative burdens imposed on service providers by the reporting requirements. Accordingly, Article 8 of the draft Regulation (Periodic reporting on political advertising services) must apply to all advertising publishers, including those classified as micro, small and medium-sized enterprises. To this end, part 2 of Article 8 (‘Paragraph 1 shall not apply to undertakings qualifying under Article 3(3) of Directive 2013/34/EU.’) should be deleted. |
| --- | --- |

3.1.7

| 3.1.8 | Article 9 of the draft Regulation (Indicating possibly unlawful political advertisements) should be amended. Instead of leaving advertising publishers to deal with individuals' complaints that an advertisement they have published does not comply with the Regulation, there must also be the possibility to complain directly to competent national authorities. Otherwise, this may lead to a conflict of interest, whereby an advertising publisher may not wish to interrupt a certain advertising campaign for fear of losing revenue. |
| --- | --- |

3.1.8

| 3.1.9 | Information on political advertising must be available to all interested entities at no cost. To this end, we believe that narrowing down the categories of persons that may request information from providers of political advertising services, as discussed in point 2 of Article 11 of the draft Regulation, is unjustified. Moreover, parts 4 to 7 of this article should be deleted. The information should be easily accessible and usable. |
| --- | --- |

3.1.9

| 3.1.10 | The EESC strongly recommends prohibiting targeted political advertising based on pervasive tracking and processing of information concerning an individual's on- or offline behaviour. It is important to remember that that personal data that is not sensitive in and of itself can, in combination with other non-personal or personal non-sensitive data, by proxy provide the very same sensitive insights the Commission is trying to protect against. A separate point should be included on this issue in the Regulation. |
| --- | --- |

3.1.10

| 3.1.11 | The draft regulation allows for the use of targeting and amplification techniques in political advertising that involve the processing of sensitive personal data ‘on the basis of the explicit consent of the data subject or in the course of their legitimate activities with appropriate safeguards by a foundation, association or any other not-for-profit body with a political, philosophical or religious or trade union aim’. However, the notion of ‘explicit consent’ is highly problematic in this context, as there are no ways to ensure or verify, with a high degree of reliability, that the individuals who are targets of targeting and amplification techniques actually do take time to get acquainted with these techniques, fully understand the risk involved, and provide truly informed consent. Given the high degree of risk posed to EU democracy by the use of targeting and amplification techniques in political advertising, targeting and amplification techniques based on sensitive data should be completely prohibited. |
| --- | --- |

3.1.11

| 3.1.12 | Transparency on targeting technics should also be visible and clear on information not directly linked to a certain campaign. The information on why someone sees a certain advertisement has to be visible and easy to use, with a quick option to withdraw potential consent for being targeted this way. |
| --- | --- |

3.1.12

| 3.1.13 | Special regulations should be considered in countries where the independence of public media is not properly ensured. Furthermore, the loopholes and problems caused by the absence of regulation of issues-based advertising should be tackled. |
| --- | --- |

3.1.13

3.2   
  Suggested amendments to the proposal on the statute and funding of European political parties and European political foundations (recast)

| 3.2.1 | Point 1(j) of Article 4 of the draft Regulation (‘its internal rules regarding gender balance’) must be strengthened by setting out minimum standards concerning gender balance, such as quotas for gender representation in overall membership and in positions of responsibility, and demanding adherence to these. |
| --- | --- |

3.2.1

| 3.2.2 | Point 2 of Article 4 should be amended to provide that the statutes of a European political party also include provisions on the party's approach to tackling discrimination and promoting human rights in line with the EU norms. |
| --- | --- |

3.2.2

| 3.2.3 | The EESC believes that potential contributions or donations from countries outside the EU which benefit EU political parties or foundations may pose an excessive risk to the independence of the recipients, and thus also to the democratic system. To this end, points 9 and 10 of Article 23 of the draft Regulation should be amended, in order to strictly ensure that only contributions from political parties from Council of Europe countries that do not impose limitations on common EU values, and where these values can be freely promoted, are allowed. Another amendment concerns significantly lowering the permitted amounts of contributions and donations. This should also include possible loans and other commitments of a financial nature. |
| --- | --- |

3.2.3

| 3.2.4 | In the interests of transparency, point 11 of Article 23 of the draft Regulation should be amended, crossing out the statement that ‘[t]he ceiling laid down in the first subparagraph shall not apply where the member concerned is also an elected member of the European Parliament, of a national parliament or of a regional parliament or regional assembly’. Thus, the universal ceiling for citizen donations will be EUR 18 000 per year and per member. |
| --- | --- |

3.2.4

| 3.2.5 | In line with what has been said above, rules on political advertisements should fully apply to all instances in which European political parties engage in political advertising, and not only in cases where these rely on external service providers. Article 5 of the draft Regulation should be amended to reflect this. |
| --- | --- |

3.2.5

| 3.2.6 | The provisions of Article 24 on possible financing by European political parties and European political foundations of national referendum campaigns can create problematic situations due to possible misuse by populists or radical forces, and may give rise to allegations of ‘foreign interference’. These risks are especially high in smaller EU Member States, where impactful campaigns can be carried out with relatively little funding and over short periods, while proceedings concerning the legality of funding from European political parties or foundations may take a long time. This proposal should be implemented only in coordination with referenda regulations at national level that mitigate the risks identified. Public debates with politicians from other EU Member States are in any case valuable. |
| --- | --- |

3.2.6

| 3.2.7 | In the interests of transparency, Article 36 should be amended to include stricter rules on publishing donations from natural persons. The maximum amount of any donation for which the name of the donor does not have to be published should be capped at EUR 1 000. This amount will be more proportionate to the relatively lower levels of income in certain EU Member States. |
| --- | --- |

3.2.7

| 3.2.8 | The Commission proposes amending Article 20(4) to reduce the co-financing rate from 10 % to 5 % for European political parties and to 0 % in the year of the elections to the European Parliament. The EESC does not support this proposal because even a low level of co-financing shows the commitment of the parties to the policies they advocate. In addition, the EESC points out that all money flows between national and European parties have to be transparent. |
| --- | --- |

3.2.8

3.3   
  Resilience and special aspects for strengthening the role of civil society in electoral processes

| 3.3.1 | With populist and nationalist parties and networks gaining ground in Europe, with internal and external help, the EESC believes that fostering citizen participation in the European democratic process, as stated in its opinion on the Democracy Action Plan (DAP), has become more crucial than ever and should be addressed together with the regulation of electoral processes. Citizens need to be given a meaningful say in shaping the EU's future with regard to elections e.g. as stated below, and beyond/between elections (as stated in the EESC opinion on the DAP and in the Roadmap on the implementation of Article 11 TEU and its action plan (5)). |
| --- | --- |

3.3.1

| 3.3.2 | The EESC stresses its suggestion that an annual event should be launched that brings together the highest level representatives of the EU institutions and civil society organisations/associations, as well as the social partners and representatives of sectoral dialogues and local, regional, national and macro-regional (transnational and neighbourhood policy) dialogues, in order to share best practices and draw up an annual plan to strengthen democracy, participation and civic dialogue and the implementation of Article 11 TEU. This event might also create synergies with the elections package. The Commission and the EESC should play a leading role in this process as organisers. |
| --- | --- |

3.3.2

| 3.3.3 | The European Commission must provide a dedicated financial instrument for conducting impartial and inclusive ‘get out to vote’ campaigns carried out by civil society and independent mass media, aimed at increasing participation in elections, especially in the great majority of EU Member States where participation in elections is not mandatory. Such campaigns should, in particular, focus on engaging underprivileged groups such as minorities and groups that are at a disadvantage due to their social or economic status, etc. |
| --- | --- |

3.3.3

| 3.3.4 | A funding programme for journalists, researchers, fact-checkers and watchdog organisations, as well as for monitoring and actions to counter the spread of disinformation, should be established on all aspects of the Reinforcing democracy and integrity of elections package. Adequate funding should be provided for developing and improving people's e-skills and bursting populist/radical ‘bubbles’, including those created through disinformation and other techniques employed by domestic political actors. |
| --- | --- |

3.3.4

| 3.3.5 | The planned joint mechanism for electoral resilience should provide for finances, support and the provision of tools for expert cooperation and work on campaign finance. Online forensics, countering disinformation, and the cybersecurity of elections are also key. |
| --- | --- |

3.3.5

| 3.3.6 | Further efforts should be made to remove the remaining barriers and ensure inclusive participation in elections. In particular, stronger efforts to improve the democratic participation of women, citizens with disabilities, younger citizens and other groups should be made. Barriers to voting for mobile EU citizens in certain Member States should be removed. Voting in one's country of residence or, where possible under national and EU law, in one's country of origin, should be facilitated and should result in higher participation rates for mobile EU citizens. It should not be forgotten that about 13,5 million EU citizens do not live in their own Member States. |
| --- | --- |

3.3.6

| 3.3.7 | The EESC notes that for people who have moved to another EU Member State, voting registration should be simplified and streamlined e.g. through a joint/shared voting registration platform (where necessary) available in all EU official languages. Voting rights for EU citizens should also be provided at regional level, and a helpdesk for cross-border voting should be established. |
| --- | --- |

3.3.7

| 3.3.8 | The EESC stresses that there is still no real right to vote for millions of EU citizens. The EESC information report Real rights of persons with disabilities to vote in European Parliament elections presents the many legal or technical barriers faced by EU citizens with disabilities in individual Member States who, despite the fact that they really want to vote, are unable to do so. The EESC reiterates its call, made in its opinion of 2 December 2020 on The need to guarantee real rights for persons with disabilities to vote in European Parliament elections, to urgently implement legal changes that will guarantee the real right to vote for all EU citizens during the elections to the European Parliament in 2024. |
| --- | --- |

3.3.8

| 3.3.9 | Encouraging individuals to become members of all European political parties would give them a chance to directly influence and contribute to debates at EU level. |
| --- | --- |

3.3.9

| 3.3.10 | Citizens should be able to clearly understand which political parties at national level have or plan links to European parties. This is of special importance prior to elections. |
| --- | --- |

3.3.10

| 3.3.11 | The EESC supports several proposals expressed by the second Citizens' Panel of the Conference on the Future of Europe working on European democracy and values, rights, the rule of law and security (6), such as the suggestion to harmonise European Parliament electoral conditions (voting age, election date, requirements for electoral districts, candidates, political parties and their financing) and placing a stronger focus on education and competences e.g. data protection, democracy, and identifying and countering populism. |
| --- | --- |

3.3.11

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  COM(2021) 730 final, Protecting election integrity and promoting democratic participation.

1

(2)  COM(2021) 730 final, Protecting election integrity and promoting democratic participation.

2

(3)  EESC opinion on the Democracy Action Plan.

3

(4)  Special Eurobarometer 507: Democracy in the EU.

4

(5)  Action plan for the implementation of Article 11.

5

(6)  Panel 2 — European Citizens' Panels — Conference on the Future of Europe.

6

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/73 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/73

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – New European Bauhaus: Beautiful, Sustainable, Together

(COM(2021) 573 final)

(2022/C 275/12)

| Rapporteur: | Pierre Jean COULON |
| --- | --- |
| Co-rapporteur: | Rudolf KOLBE |

Rapporteur:

Pierre Jean COULON

Co-rapporteur:

Rudolf KOLBE

| Referral | European Commission, 28.10.2021 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Transport, Energy, Infrastructure and the Information Society |
| Adopted in section | 2.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 202/0/3 |

Referral

European Commission, 28.10.2021

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Transport, Energy, Infrastructure and the Information Society

Adopted in section

2.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

202/0/3

1.   Conclusions and recommendations

| 1.1. | The EESC welcomes the adoption by the European Commission of the communication introducing the concept of a New European Bauhaus (NEB) with the aim of ‘creating beautiful, sustainable, and inclusive places [...] and ways of living’ that are accessible and affordable for all, in particular in response to the climate crisis. |
| --- | --- |

1.1.

| 1.2. | The EESC fully supports the Commission’s recommended holistic and interdisciplinary approach that entails building a greener and fairer future for Europe together. It also supports the promotion of this ‘new lifestyle’ combining ‘sustainability and style’, while accelerating the green transition in several areas of Europeans’ daily lives, their regions, places of living, work, mobility and environments. This is a participatory project in the spirit of the historical Bauhaus created in 1919, and of the global cultural movement it gave rise to. |
| --- | --- |

1.2.

| 1.3. | The EESC welcomes in particular the cultural dimension of the New European Bauhaus, ‘a project of hope and perspectives’, and its creative dimension at the heart of the European Green Deal and its building renovation wave, which provides a crucial basis for the green transition. The aim of this cultural movement is to provide all citizens with access to goods that are circular and less carbon-intensive in their places of living, work, public buildings and housing through practical experiences that should be promoted as close to citizens as possible, at the level of the urban and rural areas and neighbourhoods where they live. |
| --- | --- |

1.3.

| 1.4. | The EESC shares the Commission’s analysis with regard to the key dimension of the issue of innovative, nature-based, sustainably produced and low carbon materials, as well as the ‘three core inseparable values’: sustainability, aesthetics and inclusion in the sense of ‘equality for all, accessibility and affordability’ (1). |
| --- | --- |

1.4.

| 1.5. | The EESC welcomes the Commission’s innovative approach of having launched a preliminary ‘co-design’ phase by mobilising a ‘community’ of individuals and organisations acting as ‘official partners’, and civil society organisations and stakeholders from very different backgrounds and sectors; this is a new, participatory co-design phase which has allowed for the co-definition of the draft concept for the New European Bauhaus, and proposals on the next steps for its implementation. It welcomes in particular the Commission’s intention to maintain and deepen this participatory approach through methods such as the New European Bauhaus Lab (NEB Lab) to prepare policy actions. The EESC believes that the sustainability of the process needs to be ensured beyond the institutional cycle. |
| --- | --- |

1.5.

| 1.6. | The EESC welcomes especially the global dimension acquired by the New European Bauhaus since the launch of its co-design phase and the success of the global discussion held in April 2021, bringing together some 8 000 participants by videoconference, as well as the success of the first edition of the New European Bauhaus prize and the distribution of the dedicated newsletter. |
| --- | --- |

1.6.

| 1.7. | The EESC supports the Commission’s proposal to link existing EU initiatives to a series of new actions and funding for the NEB, in order to test the policies and tools for ‘building a better everyday life’ as close as possible to local areas, European citizens and their homes. It stresses that for wide access to financing, it would be important to also provide easy to access, small-scale crowdfunding-style funding opportunities and special support measures for those who do not have the means to apply for funding themselves, in particular small businesses, craftspeople and associations, which must be involved in the process. |
| --- | --- |

1.7.

| 1.8. | The EESC intends to get actively involved in the participatory approach promoted by the Commission and in the implementation of a New European Bauhaus movement, in order to maintain dialogue with citizens and civil society, so as to provide solutions for their daily problems and improve their quality of life. The EESC will engage with this participatory project by organising a conference on the New European Bauhaus as part of the annual festival proposed by the Commission, and by setting up a civil society platform to provide proposals and support. |
| --- | --- |

1.8.

| 1.9. | The EESC considers, above all, that this concept of a New European Bauhaus should help to bring the EU closer to citizens and local urban and rural areas through appropriate communication, local initiatives and actions to be implemented, and through experiments in daily living and work places. |
| --- | --- |

1.9.

| 1.10. | The EESC shares the three fundamental principles that emerged during the co-design process: combining the global and local dimensions, participation and transdisciplinarity. These principles require a place-based approach to projects and initiatives in neighbourhoods, villages and towns, connecting towns and cities and their outskirts and rethinking the city from a global and territorial perspective, while taking into account the global dimension of climate change and the green transition. |
| --- | --- |

1.10.

| 1.11. | The EESC calls for genuine synergies between the New European Bauhaus movement and future legislative developments concerning the implementation of the European Green Deal through a ‘favourable framework’, which would be a prerequisite for any legislative proposal on the European Green Deal and its implementation. |
| --- | --- |

1.11.

| 1.12. | The EESC underlines that the search for sustainable, inclusive and ethical solutions for the built environment will largely depend on ensuring a legal framework for public procurement that is based on quality, and calls on the Commission to take this into account in the upcoming revision of directives on public procurement. An ‘NEB label’ will need to be defined, established and implemented, both for public procurement and for State aid. |
| --- | --- |

1.12.

| 1.13. | The EESC stresses the need for the New European Bauhaus to actively contribute to the promotion of long-term investments in local and social infrastructure, particularly in the context of the new European Semester and of the effective implementation of the European Pillar of Social Rights. |
| --- | --- |

1.13.

| 1.14. | The EESC recommends that interdisciplinary vocational training for new jobs on offer in the local area should also be promoted and funded under the New European Bauhaus, so that the concept of decent work can be properly implemented. |
| --- | --- |

1.14.

2.   Summary

| 2.1. | The New European Bauhaus expresses the EU’s ambition of creating beautiful, sustainable and inclusive places, products and ways of living. It highlights a new way of living where sustainability matches lifestyle, thus accelerating the green transition, not only in various sectors of our economy such as construction, furniture and fashion, but also in our societies and in other areas of our daily life. The aim is to provide everyone with access to goods that are circular and less carbon-intensive, that support the regeneration of nature and protect biodiversity. |
| --- | --- |

2.1.

| 2.1.1. | The NEB is a project of hope and perspectives; it brings a cultural and creative dimension to the European Green Deal with a view to enhancing sustainable innovation, technology and economy. It highlights the strengths of the environmental transition through tangible experiences at the local level, and improves our everyday life. |
| --- | --- |

2.1.1.

| 2.1.2. | For its implementation, the Commission combines relevant EU initiatives and proposes a set of new actions and funding possibilities. These cover, for example:






  — | the creation of the ‘NEB Lab’ to grow the community and prepare policy actions; |
| --- | --- | --- |

2.1.2.

—

the creation of the ‘NEB Lab’ to grow the community and prepare policy actions;

| — | seed funding for transformative NEB projects; |
| --- | --- |

—

seed funding for transformative NEB projects;

| — | funding for social housing projects that follow the New European Bauhaus values; |
| --- | --- |

—

funding for social housing projects that follow the New European Bauhaus values;

| — | a new approach to the Commission’s own building strategy; |
| --- | --- |

—

a new approach to the Commission’s own building strategy;

| — | the co-creation of green transition pathways for the construction and the textiles ecosystems; |
| --- | --- |

—

the co-creation of green transition pathways for the construction and the textiles ecosystems;

| — | calls for Start Ups and citizen initiatives; |
| --- | --- |

—

calls for Start Ups and citizen initiatives;

| — | a yearly New European Bauhaus Festival and Prize; |
| --- | --- |

—

a yearly New European Bauhaus Festival and Prize;

| — | eTwinning and DiscoverEU 2022 on the topic of the New European Bauhaus. |
| --- | --- |

—

eTwinning and DiscoverEU 2022 on the topic of the New European Bauhaus.

| 2.1.3. | The New European Bauhaus will create the space to explore and test policy, funding and other tools for designing and building a better everyday life for all generations. |
| --- | --- |

2.1.3.

2.2.   Based on co-design: a transformational project by all of us for all of us

| 2.2.1. | The co-design process relied on individuals, organisations, political institutions and companies to organise events, conversations and workshops. The first New European Bauhaus prize was launched as part of the co-design phase to put the spotlight on inspirational examples and ideas by young talents. |
| --- | --- |

2.2.1.

2.3.   The shape of the New European Bauhaus

| 2.3.1. | From the historical movement to the New European Bauhaus: three core values:






  — | sustainability, from climate goals to circularity, zero pollution, and biodiversity; |
| --- | --- | --- |

2.3.1.

—

sustainability, from climate goals to circularity, zero pollution, and biodiversity;

| — | aesthetics, quality of experience and style, beyond functionality; |
| --- | --- |

—

aesthetics, quality of experience and style, beyond functionality;

| — | inclusion, valorising diversity, equality for all, accessibility and affordability. |
| --- | --- |

—

inclusion, valorising diversity, equality for all, accessibility and affordability.

| 2.3.2. | Three key principles emerging from the co-creation process were taken up by the Commission and should guide the New European Bauhaus:






  — | a multilevel approach — from global to local; |
| --- | --- | --- |

2.3.2.

—

a multilevel approach — from global to local;

| — | a participatory approach; |
| --- | --- |

—

a participatory approach;

| — | a transdisciplinary approach. |
| --- | --- |

—

a transdisciplinary approach.

| 2.3.3. | Thematic axes of the transformative path:






  — | reconnecting with nature; |
| --- | --- | --- |

2.3.3.

—

reconnecting with nature;

| — | regaining a sense of belonging; |
| --- | --- |

—

regaining a sense of belonging;

| — | prioritising the places and people that need it the most; |
| --- | --- |

—

prioritising the places and people that need it the most;

| — | the need for life-cycle thinking in the industrial ecosystem. |
| --- | --- |

—

the need for life-cycle thinking in the industrial ecosystem.

2.4.   Delivering the New European Bauhaus

Creating an enabling framework for the New European Bauhaus:

| 2.4.1. | Working with the New European Bauhaus community: the NEB Lab






  — | labelling strategy; |
| --- | --- | --- |

2.4.1.

—

labelling strategy;

| — | innovative funding; |
| --- | --- |

—

innovative funding;

| — | regulatory analysis and experimentation; |
| --- | --- |

—

regulatory analysis and experimentation;

| — | key performance indicators. |
| --- | --- |

—

key performance indicators.

| 2.4.2. | A threefold transformation — three levers of support and financing instruments:






  — | making change happen in specific places on the ground; |
| --- | --- | --- |

2.4.2.

—

making change happen in specific places on the ground;

| — | the need for doing things differently in making innovation happen, including by improving our skills and methods; |
| --- | --- |

—

the need for doing things differently in making innovation happen, including by improving our skills and methods;

| — | the need for adapting the intentions and the way of thinking that is behind our actions. |
| --- | --- |

—

the need for adapting the intentions and the way of thinking that is behind our actions.

| 2.4.3. | The Commission will convene a ‘New European Bauhaus Festival’ for the first time in spring 2022:






  — | transformation of places on the ground; |
| --- | --- | --- |

2.4.3.

—

transformation of places on the ground;

| — | transformation of the enabling environment for innovation; |
| --- | --- |

—

transformation of the enabling environment for innovation;

| — | diffusion of new meanings. |
| --- | --- |

—

diffusion of new meanings.

2.5.   Next steps

| — | mobilisation of European actors and beyond; |
| --- | --- |

—

mobilisation of European actors and beyond;

| — | cooperation between the European Parliament, the Committee of the Regions (CoR) and the European Economic and Social Committee (EESC) to raise awareness and promote the debate in their constituencies in order to mobilise citizens; |
| --- | --- |

—

cooperation between the European Parliament, the Committee of the Regions (CoR) and the European Economic and Social Committee (EESC) to raise awareness and promote the debate in their constituencies in order to mobilise citizens;

| — | the cooperation of Member States and of the public authorities at international, national, regional and local levels, including participation of civil society; |
| --- | --- |

—

the cooperation of Member States and of the public authorities at international, national, regional and local levels, including participation of civil society;

| — | as a starting point, Member States will be invited to entrust an entity as a contact point for the New European Bauhaus initiative to connect and coordinate efforts in their respective country and participate in an EU wide informal network for exchange of information; |
| --- | --- |

—

as a starting point, Member States will be invited to entrust an entity as a contact point for the New European Bauhaus initiative to connect and coordinate efforts in their respective country and participate in an EU wide informal network for exchange of information;

| — | the European Commission will report on the progress of the initiative in 2022. |
| --- | --- |

—

the European Commission will report on the progress of the initiative in 2022.

3.   General comments

| 3.1. | The EESC stresses that in working with the New European Bauhaus community, the NEB Lab is a very important approach that continues and deepens the participatory approach of the NEB initiative. |
| --- | --- |

3.1.

| 3.2. | The EESC welcomes the fact that regulatory analysis and experimentation are a priority of the NEB and highlights that adjustments to the regulatory system are essential for improving the implementation of the NEB objectives. |
| --- | --- |

3.2.

| 3.3. | The EESC points out that sustainable, inclusive and aesthetic solutions for the built environment will largely depend on ensuring a suitable legal framework for public procurement that is based on quality. The reform of the public procurement framework should therefore be at the core of the Lab. In this context, the role of incentives in the development of climate-friendly architecture and the role of ‘Baukultur’ in a new culture of renovation through open competitions and the awarding of prizes and subsidies should be discussed, for the private sector as well. |
| --- | --- |

3.3.

| 3.4. | The EESC believes that the regulatory analysis should also focus on the standardisation system. Innovation in all areas (technical and scientific) requires a capacity to respond to latest developments, not merely by using a standard that in any case is often outdated due to rapid technological development, but also through ‘alternative equivalent solutions’. The use of alternative equivalent solutions, and therefore failing to comply with a standard, may lead to serious liability issues in legal proceedings; it is still very difficult to prove in court that ‘alternative solutions’ are equivalent (or often better). In addition, for harmonised standards, particularly for construction materials, it is very important to consider ways to better support innovative alternative solutions. |
| --- | --- |

3.4.

| 3.5. | The EESC considers new funding opportunities to be of crucial importance in supporting the implementation of the Bauhaus objectives and in keeping the momentum of the initiative and the enthusiasm of the different stakeholders. Given that access to the EU’s funding system is extremely difficult — due to complicated funding and award criteria, and numerous other requirements (including pre-financing) — and that the funding rate reached is relatively low, there is a risk that these actions will only reach the ‘usual suspects’ who have experience in submitting European projects, and not the much wider target groups. This problem not only affects the New European Bauhaus but, in this context, it is extremely important to go further and also provide small-scale, easy to access funding opportunities and special financing measures to those without the means to apply for funding. Reaching this target requires close cooperation between the EU Member States, the European Commission, chambers of commerce and of professions, education institutions and other relevant interest groups. It must be ensured that the funding options for the New European Bauhaus at national level are also based on the above principles and that they are available in all Member States. |
| --- | --- |

3.5.

| 3.6. | The EESC underlines that it is important to implement a dedicated interdisciplinary training programme, with initial and continuing training, for sustainable and inclusive planning in universities and other tertiary education institutions, and to put in place regular training modules in professional organisations. In particular, it must be possible to put the concept of decent work into practice by means of reskilling and upskilling. |
| --- | --- |

3.6.

3.7.   Observations on the thematic axes of the transformative path:

| 3.7.1. | The EESC welcomes the focus placed on sustainable, inclusive and aesthetic urban and rural development, and on urban planning in the broadest sense, since it is an important tool for meeting the priorities of the New European Bauhaus. It stresses the need to focus on:






  — | reinforced commitment to spatial planning, land management and associated policy to reduce soil sealing, land use and land use change, in full transparency through stakeholder involvement; |
| --- | --- | --- |

3.7.1.

—

reinforced commitment to spatial planning, land management and associated policy to reduce soil sealing, land use and land use change, in full transparency through stakeholder involvement;

| — | consistent promotion, at EU and national level, of the internal development (re-use of abandoned areas depending on quality) of cities, small towns and villages to develop a comprehensive campaign for development planning; |
| --- | --- |

—

consistent promotion, at EU and national level, of the internal development (re-use of abandoned areas depending on quality) of cities, small towns and villages to develop a comprehensive campaign for development planning;

| — | the sustainable modernisation of urban and village structures, in response to rising climate change, the post-oil society and the information era; |
| --- | --- |

—

the sustainable modernisation of urban and village structures, in response to rising climate change, the post-oil society and the information era;

| — | the preservation and revitalisation of building stock as a crucial contribution to the circular economy and the conservation of cultural heritage, with priority given in particular to social housing, workers’ neighbourhoods and public buildings, and improving understanding of the various interactions between buildings and social spaces, as well as technical and green infrastructures, as a planning task that can be achieved through equal cooperation between the different specialised branches. |
| --- | --- |

—

the preservation and revitalisation of building stock as a crucial contribution to the circular economy and the conservation of cultural heritage, with priority given in particular to social housing, workers’ neighbourhoods and public buildings, and improving understanding of the various interactions between buildings and social spaces, as well as technical and green infrastructures, as a planning task that can be achieved through equal cooperation between the different specialised branches.

| 3.7.2. | The EESC welcomes the emphasis placed on the co-creation of a green transition pathway for the construction sector and its high CO2 emissions. The development of new construction products and processes in cooperation with planners, manufacturers of construction products and the construction industry by developing new models of cooperation (lifespan, recyclability, reduced environmental impact, renewable energies, etc.) will be an important factor for the success of this transition, and it needs to be supported by rethinking the current standardisation system. The renovation wave is a crucial part of the Green Deal, since a focus on building maintenance will be required. It will even be the most important measure for saving resources and avoiding construction waste. New techniques and processes must be developed in order to recycle construction waste, but also to re-use these items or introduce new, better quality materials (upcycling). |
| --- | --- |

3.7.2.

| 3.7.3. | The EESC welcomes the adoption by the Commission of the communication introducing the concept of the New European Bauhaus, with the aim of ‘creating beautiful, sustainable, and inclusive places, products and ways of living’ for all European citizens, in response to the climate crisis. |
| --- | --- |

3.7.3.

| 3.7.4. | The EESC supports the approach proposed by the Commission to build a greener and fairer future for Europe together, to promote this new lifestyle combining sustainability and style, while accelerating the green transition in several areas of Europeans’ daily lives, their places of living, work, mobility and environments. This is a participatory project in the spirit of the historical Bauhaus created in 1919, and of the global cultural movement it gave rise to. |
| --- | --- |

3.7.4.

| 3.7.5. | The EESC welcomes in particular the cultural dimension of the New European Bauhaus, ‘a project of hope and perspectives’, and its creative dimension at the heart of the European Green Deal and its building renovation wave (2). This cultural movement should aim to provide all citizens with access to goods that are circular and less carbon-intensive in their places of living, work, public buildings and housing, thanks to practical experiences that should be promoted as close to citizens as possible, at the level of the area and neighbourhood where they live. |
| --- | --- |

3.7.5.

| 3.7.6. | The EESC shares the Commission’s analysis with regard to the key dimension of the issue of innovative, nature-based, sustainably produced and low carbon materials, as well as the ‘three core inseparable values’: sustainability, aesthetics and inclusion in the sense of ‘equality for all, accessibility and affordability’. |
| --- | --- |

3.7.6.

| 3.7.7. | The EESC welcomes the Commission’s innovative approach of having launched a preliminary ‘co-design’ phase by mobilising a ‘community’ of individuals and organisations acting as ‘official partners’, and civil society organisations and stakeholders from very different backgrounds and sectors; this is a new, participatory co-design phase which has allowed for the co-definition of the draft concept for the New European Bauhaus, and proposals on the next steps for its implementation. |
| --- | --- |

3.7.7.

| 3.7.8. | The EESC welcomes especially the global dimension acquired by the New European Bauhaus since the launch of its co-design phase and the success of the global discussion held in April 2021, bringing together some 8 000 participants by videoconference, as well as the success of the first edition of the New European Bauhaus prize and the distribution of the dedicated newsletter (3). |
| --- | --- |

3.7.8.

| 3.7.9. | The EESC considers that this concept of a New European Bauhaus should help to bring the EU closer to its citizens and their territories, through appropriate communication, local initiatives and actions to be implemented and through experiments in daily living and work places. |
| --- | --- |

3.7.9.

| 3.7.10. | The EESC notes with interest the launch of a call for proposals on social, affordable and sustainable housing district demonstrators as a first stage, then as part of the European Urban Initiative under the 2021-2027 cohesion policy and the introduction of an urban development financial instrument. |
| --- | --- |

3.7.10.

4.   Specific observations

| 4.1. | The EESC supports the Commission’s proposal to link existing EU initiatives to a series of new actions and funding for the New European Bauhaus, in order to test the policies and tools for ‘building a better everyday life’ as close as possible to local areas, European citizens, the places they live and accessible, affordable homes for all. Mobility issues should be taken into account on an ongoing basis. |
| --- | --- |

4.1.

| 4.2. | These measures and new EU funding measures earmarked for the New European Bauhaus must be simplified in terms of how they are explained and how they work, so that they can be used in the same spirit of co-design and as close as possible to European citizens and the area where they live by local associations and communities. NEB crowdfunding must be developed, and it must be ensured that local stakeholders can access this funding, by means of an NEB one-stop shop in each Member State. |
| --- | --- |

4.2.

| 4.3. | An active role should be played in the Commission’s participatory approach and in the implementation of a New European Bauhaus movement in order to maintain dialogue with citizens and civil society, with the aim of solving their daily problems and improving their quality of life. |
| --- | --- |

4.3.

| 4.4. | It is important to be actively involved in this participatory project and movement by organising an annual EESC conference on the New European Bauhaus and civil society — a civil society that it represents as part of the ‘annual festival’ of the New European Bauhaus proposed by the Commission — and by establishing a civil society NEB platform. |
| --- | --- |

4.4.

| 4.5. | The EESC recommends sharing the three fundamental principles that emerged during the co-design process, combining the global and local dimensions, including disadvantaged groups and transdisciplinarity, through a place-based approach for projects and initiatives in neighbourhoods, villages and towns, while taking into account the global dimension of climate change and the green transition. |
| --- | --- |

4.5.

| 4.6. | The EESC believes that the thematic axes that emerged during the co-design phase should also be shared, namely, reconnecting to nature, bringing back a feeling of belonging, giving priority to those most in need through affordable and accessible solutions, particularly in relation to housing, and long-term thinking on the lifecycle of the industrial ecosystem and on the lifespan of buildings and housing. |
| --- | --- |

4.6.

| 4.7. | The EESC intends to call for genuine synergies between the New European Bauhaus movement and future legislative developments concerning the implementation of the European Green Deal, to ensure that this movement takes place and to meet the requirement of having a ‘favourable framework’, in particular as regards public procurement and State aid. The EESC suggests creating an ‘NEB label’. |
| --- | --- |

4.7.

| 4.8. | The EESC believes that long-term investment in the local and social infrastructure needed for the proper implementation of the New European Bauhaus should be given dedicated attention in the context of the European Semester and of the effective implementation of the European Pillar of Social Rights. |
| --- | --- |

4.8.

| 4.9. | The EESC also considers that interdisciplinary initial and continuing training for the new professions to be developed in local areas must be promoted by the New European Bauhaus within the framework of European actions and programmes. |
| --- | --- |

4.9.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ C 429, 11.12.2020, p. 93.

1

(2)  OJ C 155, 30.4.2021, p. 73.

2

(3)  https://ec.europa.eu/newsroom/neb/newsletter-archives/view/service/2137

3

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/80 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/80

---

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Tackling rising energy prices: a toolbox for action and support

(COM(2021) 660 final)

(2022/C 275/13)

| Rapporteurs: | Thomas KATTNIG, Alena MASTANTUONO, Lutz RIBBE |
| --- | --- |

Rapporteurs:

Thomas KATTNIG, Alena MASTANTUONO, Lutz RIBBE

| Referral | European Commission, 1.12.2021 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Transport, Energy, Infrastructure and the Information Society |
| Adopted in section | 2.2.2022 |
| Adopted at plenary | 24.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 193/10/7 |

Referral

European Commission, 1.12.2021

Legal basis

Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Transport, Energy, Infrastructure and the Information Society

Adopted in section

2.2.2022

Adopted at plenary

24.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

193/10/7

1.   Conclusions and recommendations

| 1.1. | The analysis by the Commission shows that the most intensive impact on the energy price rally comes from the sharp global increase in the demand for gas and was further pushed by the upward economic recovery, tightened supplies to the EU, lack of investment because of austerity policy after the financial market and economic crises and delayed infrastructure maintenance because of the pandemic. In addition, electricity prices also increased because of seasonal weather conditions (low water and wind over summer) which resulted in lower production of renewables in Europe. The contribution of the price increase to the Emission Trading System (ETS) was only limited. |
| --- | --- |

1.1.

| 1.2. | The EU is on its way to deliver the 2030 climate targets that will lead us to the climate neutral economy by 2050. Besides the huge investments required by the transition, it also requires an adaptation of the whole energy ecosystem. With the push for an exit from fossil and — in some Member States — nuclear energy, the situation narrows the availability of other sources and strengthens dependence on those few that remain. This renders the European energy system more vulnerable, mainly in terms of volatility in prices, and needs a quick reaction in order to ensure a stable and predictable energy price environment. |
| --- | --- |

1.2.

| 1.3. | The current energy price crisis would not hit European citizens and companies so hard if Europe was not so highly dependent on imports of fossil fuels. Certain countries exploit this dependency for geopolitical purposes. As a result, European businesses and consumers suffer. Most Members States have still not succeeded in reducing this dependency although the Commission defines this goal, amongst others such as putting the consumer at the centre of the energy system, as one of the strategic objectives for the Energy Union. In both regards, European energy policy is lagging far behind its own ambitions. |
| --- | --- |

1.3.

| 1.4. | Because of growing electrification needs, generally accepted as a key vehicle for delivering on Europe's decarbonisation objectives, Europe needs significant investment in sustainable zero and low-carbon energy sources. This underlines the need to maximise efforts to increase the share of renewable energy, which could have a price-depressing effect and will certainly increase the EU’s energy autonomy (less dependent on regimes that use energy sources as a geopolitical leverage). |
| --- | --- |

1.4.

| 1.5. | National regulators need to play an active role in addressing consumer concerns of all kinds, and proactively inform consumers of their rights in the current high-price phase. Likewise, when setting tariffs, suppliers must be prompted to ensure that stable tariffs continue to be available to consumers and not only so-called ‘floater’ tariffs, which reflect developments on the exchanges. |
| --- | --- |

1.5.

| 1.6. | The EESC agrees with the Commission that measures to be taken in relation to rising energy prices may not undermine climate policy efforts. Therefore, those who are affected by price increases should definitely be supported, for example by enabling them to realise energy-saving measures, to participate in the generation and use of renewable energies on their own or in communities, and thus to benefit from lower prices of low and zero-emission energy sources. |
| --- | --- |

1.6.

| 1.7. | The EESC appreciates the direct financial support, as well as the tax-based instruments, as the most effective and immediately disposable measure, helping vulnerable entities. At the same time, it supports a creation of specific Member State solutions, in response to the actual conditions in individual countries e.g., preventing the disconnection of energy supply during the cold season, long term instalment plans and using different tax policy instruments in them. |
| --- | --- |

1.7.

| 1.8. | The EESC not only supports emergency measures to avoid drastic social consequences, but it is strongly in favour of market evaluations which test the behaviour of actors on the energy market. At the same time, the EESC points to the Union’s shared values regarding services of general economic interest within the meaning of Article 14 of the Treaty on the Functioning of the European Union (TFEU), as set out in Protocol No 26 on services of general interest annexed to the Treaty on European Union (TEU). It could lead to more efficiency and the elimination of market failures. More effective market control by authorities is needed. In this context, the option for EU Member States to buy gas and oil jointly is worth considering, especially in light of recent events in Ukraine which have highlighted the need for the EU to enhance its ability in securing energy supplies when faced with a geopolitical crisis. |
| --- | --- |

1.8.

| 1.9. | Also, improvements in the transmission grid system through the expansion of interconnectors and a better developed storage infrastructure are needed. |
| --- | --- |

1.9.

| 1.10. | Incentives are needed to motivate households and businesses to acquire energy saving products and technologies, and produce the energy themselves. Direct assistance to those in need must be ‘targeted’ and not ‘across the board’. It must reflect the social dimension and not hinder the realisation of green transformation. A time-limited grant (e.g., for the first 300 kWh of electricity per person and household) up to an income limit to be defined, could be considered. Direct assistance should also be granted, below a revenue ceiling to be defined, provided that no affordable alternative solution is available in the respective situation. |
| --- | --- |

1.10.

| 1.11. | The current price crisis also provides opportunities. It makes investment in European renewable sourcing and energy saving measures more attractive. However, many citizens cannot afford these investments. Specifically designed support programmes on a Union, Member State, and regional/municipal level are needed to enable citizens to fulfil their role as active consumers as provided in the Clean Energy Package, and benefit from decreasing renewable energy costs. |
| --- | --- |

1.11.

| 1.12. | The EESC stresses the important role of energy providers as key players concerning the availability of services of general interest, and states that the change in the energy market design in the last 20 years has left Member States with fewer political instruments to tackle rising energy costs. The current energy market design seems to have shortcomings in reacting to price volatility and in offering benefits to small renewable energy producers and all consumers. The EESC therefore asks the European Commission to come up with a proposal that will offer an effective response to these shortcomings and fit the green transition. |
| --- | --- |

1.12.

2.   Background, facts and context (as given in the Communication by the Commission)

| 2.1. | The European Commission released its communication on how to tackle the increase in energy prices. The reason for its publication, which takes the form of a toolbox, is the sharp short-term increase in energy prices, which have a negative impact on the post-COVID recovery and the EU population’s wellbeing. |
| --- | --- |

2.1.

| 2.2. | The communication on energy prices offers a set of measures on how the EU and the Member States should react in this difficult period of time. It includes a set of immediate, short-term and medium-term measures. These include both emergency and compensating tools, as well as investments and institutional and procedural changes; the key target groups are households and small and medium sized enterprises. The toolbox provides a coordinated approach to protect those most at risk. |
| --- | --- |

2.2.

| 2.3. | From 2019 to September 2021, the increase in wholesale gas and electricity prices amounted to 429 %, or 230 %, respectively as an EU average. The retail price jump has so far been much more moderate (14 %, or 7 % respectively), however, the short-term prediction for this winter shows that they could follow wholesale prices as well. This development would mean a robust shock for household budgets and firm cash flow, and requires legitimate policy action, despite the fact that predictions say the market should stabilise by around April 2022 for gas and 2023 for electricity. |
| --- | --- |

2.3.

| 2.4. | However, the large price differences are, to a large extent, the result of the market. This is also partly true for the ETS where we have seen similar price jumps. In the period of January 2020 to November 2021, the price of EUA allowances has increased from circa 20 EUR/tonne to circa 75 EUR/tonne. |
| --- | --- |

2.4.

| 2.5. | The analysis by the Commission shows that the most intensive impact on the price rally comes from the sharp global increase in the demand for gas, and the price increase is only to a small extent due to EU ETS development. The increased demand for gas was pushed by the upward economic recovery, tightened supplies to the EU and delayed infrastructure maintenance because of the pandemic. In addition, electricity prices also increased because of seasonal weather conditions (low water and wind over summer) which resulted in lower production of renewables in Europe. |
| --- | --- |

2.5.

| 2.6. | The Commission writes of ‘temporary’ energy price increases and provides a good analysis supporting this point. The Commission also notes that the trend is completely different for renewables compared to fossil fuels, because costs have been falling continuously for years. |
| --- | --- |

2.6.

| 2.7. | There is no one-size-fits-all solution. Energy prices vary widely across the EU. This is due, among other things, to the fact that the Member States intervene in the markets very differently today, e.g., with taxes and duties, exemptions or burdens that often only affect some consumers. In some Member States, most households’ energy prices are based on exchange prices for electricity and natural gas (floating-prices). |
| --- | --- |

2.7.

| 2.8. | The high dependence on fossil fuels imports is also a threat for supply security in Europe, as we can currently see. Supply levels forced the emptying of gas storage facilities and gas storage in Europe has dropped to historically low levels. The European Commission should take measures to use its strong negotiating position as a large, and for Russia strategically important, bulk buyer. |
| --- | --- |

2.8.

3.   General comments

| 3.1. | The EU is on its way to deliver the 2030 climate targets that will lead us to the climate neutral economy by 2050. Besides the huge investments required by the transition, it also requires an adaptation of the whole energy ecosystem. With the push for an exit from fossil and — in some Member States — nuclear energy, the situation narrows the availability of other sources and strengthens dependence on those few that remain. This renders the European energy system more vulnerable, mainly in terms of volatility in prices, and needs a quick reaction in order to ensure a stable and predictable energy price environment. In this regard, the EESC welcomes the fast reaction by the European Commission to the energy price increase and agrees with its content and mostly with the proposed instruments. The EESC calls on the Member States to make rapid use of these instruments in order to mitigate the negative effects of price rises on the most vulnerable groups. |
| --- | --- |

3.1.

| 3.2. | The EESC understands that the immediate measures proposed are more focused on eliminating the negative consequences of the energy market development, and the mid-term measures are targeted to the solution of the causes. |
| --- | --- |

3.2.

| 3.3. | The EESC supports the set of immediate measures and their nature, focused on the most vulnerable groups. Energy poor and low and lower-middle-income households are most impacted because they spend significantly higher shares of their income on energy. However, it also has a major impact on businesses, namely SMEs and energy intensive industries. The impact of high energy prices is felt unevenly across sectors and contributes significantly to the increase in inflation. |
| --- | --- |

3.3.

| 3.4. | It should also be mentioned that wholesale gas prices in 2021 were not significantly higher than in 2008 or 2012; it is a very volatile market. However, the large price differences are to a large extent the result of the market. The analysis by the Commission shows that the most intensive impact on the energy price rally comes from the sharp global increase in the demand for gas and was further pushed by the upward economic recovery, tightened supplies to the EU, lack of investment because of austerity policy after the financial market and economic crises and because of seasonal weather conditions (low water and wind over summer) which resulted in lower production of renewables in Europe. |
| --- | --- |

3.4.

| 3.5. | The EESC deems that society should be motivated via incentives, financial support, especially for low-income households and other vulnerable groups, and independent advice to switch from fossil fuels to renewables, which are not only characterised by relatively high starting investment costs, but also low production costs and low operating costs. |
| --- | --- |

3.5.

| 3.6. | Another important stimulus is the phasing out of subsidies for fossil energy. Between 2015 and 2019, fossil fuel subsidies rose in the EU by 4 % and decreased measurably in 2020. They fell by 10 % in the energy sector and by 4 % in industry, while in transport they rose by 25 % and by 13 % for households who benefit from subsidies on heating oil and natural gas consumption (1). Subsidies play an important role in the social area, as they ensure that the transition towards a climate-neutral economy happens in a just manner. |
| --- | --- |

3.6.

| 3.7. | The EESC has always favoured a position that energy prices need to express the truth, which means that all externalities should be covered within the prices. In this sense, it is reasonable to expect that higher prices for fossil fuels will provide market-driven incentives for saving energy and the switch to renewables. In addition, ending environmentally harmful subsidies for fossil energies will contribute to increasing prices. Nevertheless, the social and economic impact of rising energy prices needs to be carefully analysed. |
| --- | --- |

3.7.

| 3.8. | Because of growing electrification needs, generally accepted as a key vehicle for delivering on Europe's decarbonisation objectives, Europe needs significant investment in sustainable zero and low-carbon energy sources. Support to R&D and innovation in energy fields, for instance energy storage solutions, needs to be accelerated. The EESC also stresses the need to support energy production through the so-called Energy Communities, so that energy is consumed where it is produced, and that the stability of supplies to certain areas is ensured. Energy sharing through Energy Communities makes it possible for members, including vulnerable energy consumers or SMEs that cannot invest in RES themselves, can benefit from the advantages of decreasing RES costs. |
| --- | --- |

3.8.

| 3.9. | Reducing Europe’s high dependency on imports would also contribute to reduced energy prices. Some countries outside the EU exploit this dependency for geopolitical purposes. As a result, European businesses and consumers suffer. It is therefore correct that, the Commission has already made reducing imports of energy resources a strategic goal years ago, e.g. within the strategic framework of the Energy Union. However, announcing goals is not enough; the successes to date are more than modest (see TEN 724). Concrete actions are required, and these are lacking. |
| --- | --- |

3.9.

| 3.10. | With regard to future energy carriers such as hydrogen, there is a risk that import dependency is even increasing, as many voices argue for supposedly ‘cheap’ H2 imports, ignoring the fact that this would make Europe even more vulnerable to price manipulations by non-European countries with geopolitical interests, leading to consumers footing the bill. This is a well known problem dating back to the First Oil Crisis in 1973. Since then, almost nothing has been changed in the right direction, despite all promises given in the strategic framework of the Energy Union, for example. |
| --- | --- |

3.10.

| 3.11. | The EESC deems that society should be motivated via incentives, financial support and independent advice to switch from fossil fuels to renewables, which are not only characterised by relatively high starting investment costs, but also low production costs and low operating costs. Regrettably, some renewables are not a stable source, pointing to a need for storage technology and, in a transitional phase, sources such as gas and safe and sustainable zero and low-carbon sources in order to secure energy supply. With this in mind, the European Commission should start a campaign to better explain the benefits of clean energy. The EESC should contribute to such a campaign and provide its expertise. |
| --- | --- |

3.11.

| 3.12. | For end-consumers, there are two ways to immediately relieve themselves of the energy bill: a) save energy and b) use locally renewable energies. The problem: initial investments are necessary for both (e.g. in thermal insulation, more economical new devices, PV systems etc.). Those who suffer most from high energy prices cannot usually afford these investments. State run contracting could provide a remedy: the state finances such investments in advance, and consumers settle, from part of their savings in their electricity and heating bills, the interest and repayment. They can keep the rest of the savings. This model has proven itself in developing countries. It could easily be transferred to Europe. It is important to comply with minimum consumer law standards such as transparent accounting and termination options. Another option is direct investment grants. |
| --- | --- |

3.12.

| 3.13. | The compensatory measures must be ‘targeted’ and not ‘across the board’; they must reflect the social dimension and not hinder the realisation of green transformation. A time-limited grant (e.g. for the first 300 kWh of electricity per person in a household) up to an income limit to be defined, could be considered. A subsidy granted to vulnerable groups, provided no affordable alternative solution for heating or transport is available in their situation, seems essential |
| --- | --- |

3.13.

| 3.14. | The EESC calls on the Member States to remove technical obstacles to the deployment of renewables such as long planning permissions for wind turbine installations. The EESC also calls on the Members States to consider, as much as possible, the use of 5G for the green transition to optimise energy consumption and savings. In this regard, the EESC welcomes the Commission’s intention to address this issue in 2022. |
| --- | --- |

3.14.

| 3.15. | The EESC calls for more autonomy in energy sources, as the high dependency on imports has an impact on energy prices. The European Commission has made reducing imports of energy resources a strategic goal. Concrete actions are required, and import dependency must be avoided for future energy carriers such as hydrogen. |
| --- | --- |

3.15.

| 3.16. | The EESC not only supports the emergency measures to avoid drastic social consequences, but it is strongly in favour of market evaluations, which test the behaviour of actors on the energy market. At the same time, the EESC points to the Union’s shared values regarding services of general economic interest within the meaning of Article 14 of the Treaty on the Functioning of the European Union (TFEU), as set out in Protocol No 26 on services of general interest annexed to the Treaty on European Union (TEU). It could lead to its improvement, efficiency and the elimination of market failures. More effective market control by authorities is needed. |
| --- | --- |

3.16.

| 3.17. | The EESC calls upon the European Commission to permanently monitor the extraordinary energy market situation, to evaluate the results on a daily basis and to adjust the intensity of adopted measures to the developing situation. |
| --- | --- |

3.17.

| 3.18. | While the EESC has always expressed the opinion that we need a strong ETS for pricing negative externalities, it needs to be considered that enterprises requiring allowances compete with financial institutions and intermediaries, as they emit CO2 in the production process. Emission trading is an instrument used to price externalities such as climate damage, but should not become a marketplace for financial speculation. The European Commission should analyse what options the European Union has to design market structures that prevent such developments that are extremely unhealthy for consumers, supply companies and investors. |
| --- | --- |

3.18.

| 3.19. | The EESC stresses the important role of energy providers as key players concerning the availability of services of general interest and states that the change in the energy market design in the last 20 years has left Member States with fewer political instruments to tackle rising energy costs. The current energy market design seems to have shortcomings in reacting to price volatility and in offering benefits to small renewable energy producers and to all consumers. The EESC therefore asks the European Commission to come up with a proposal that will offer an effective response to these shortcomings and fit the green transition. |
| --- | --- |

3.19.

| 3.20. | The EESC underlines that it is substantial to proceed with the mid-term measures supporting the resilience and sustainability of the EU energy market and its products at affordable prices. It is especially important to increase the volume of investments into renewable sources (as many of the current conventional capacities will soon be unavailable), and therefore support the supply side of the market. At the same time, it is equally important to develop the connectivity and security of energy deliveries throughout the EU, and to push public investments in the grid infrastructure. Otherwise, the European Commission’s conviction that the best remedy for energy price stability and sustainability is the installation of new renewable sources, will not work. |
| --- | --- |

3.20.

4.   Specific comments

| 4.1. | The EESC is convinced that new, more precise and stricter regulatory rules should be adopted for energy supply companies offering commodities to final consumers. The EESC is of the opinion that some of these supply companies have not been acting competently. In other words, the suppliers should be able to withstand price fluctuations in the market and not have to terminate contracts with consumers immediately. That is, for example, that they have a sufficient capital reserve or meet certain conditions. The EESC deems that the role of national regulators should also consist in a regular in-depth analysis of accountability of market operators. |
| --- | --- |

4.1.

| 4.2. | National regulators need to play an active role in addressing consumer concerns of all kinds, and proactively inform consumers of their rights in the current high-price phase. This includes the provision of information on supplier changes and cancellation options or independent comparison portals where different tariffs and their conditions can be compared, but also support in disputes and the implementation of arbitration procedures. Likewise, when setting tariffs, suppliers must be prompted to ensure that stable tariffs continue to be available to consumers and not only so-called ‘floater’ tariffs, which reflect developments on the exchanges. |
| --- | --- |

4.2.

| 4.3. | The EESC proposes a more proactive consumer protection policy aimed at informing consumers and a better crisis preparedness of supply companies, including an obligation to hedge against rising wholesale market prices as problem. |
| --- | --- |

4.3.

| 4.4. | Consumers need better protection, transparent contractual conditions, effective price control, independent advice and simple legal enforcement possibilities, most of all in the field of heating and cooling supply. There is a need for demarcation between energy savings contracting and facilities contracting. It should be legally framed that tenants should pay only ‘real’ operating costs for the energy supply. In the case of heat generation in the building, these are only the costs of the energy source used, plus reasonable costs for the maintenance and support of the heating system. Contractual and financial risks from contracting agreements should be borne by those who conclude such basic agreements, e.g., property developers and landlords. |
| --- | --- |

4.4.

| 4.5. | The EESC appreciates the direct financial support, as well as the tax-based instruments, as the most effective and immediately disposable measure, helping vulnerable entities. At the same time, it supports a creation of specific Member States solution, reacting to the actual conditions in individual countries e.g., preventing the disconnection of energy supply during the cold season, long term instalment plans and using different tax policy instruments in them. Member States must also implement specific instruments and programmes that help particularly low-income households to implement energy efficiency measures. |
| --- | --- |

4.5.

| 4.6. | With regard to taxation, in its toolbox, the Commission recommends reducing energy-related taxes to the minimum tax rates set by the directives (Energy Tax Directive, VAT Directive). In order to promote access to green energy, especially renewable electricity, a tax rate that differentiates between the environmental impact of energy sources is needed, as proposed by the Commission in the amendment to the Energy Taxation Directive (COM 2021 (563)). |
| --- | --- |

4.6.

| 4.7. | In order to support energy-poor households, the EESC points out the important role of local and regional authorities or actors in supporting these households. Often, specific bundles of measures, for example in Austria the heating subsidies to support the financial affordability of heating and hot water, are the responsibility of the federal states (regions) and municipalities. These support services should be listed in the National Energy and Climate Plans in order to enable comparability between the Member States and, based on this, mutual learning. |
| --- | --- |

4.7.

| 4.8. | The access to affordable energy is a central prerequisite for social participation and dignified living conditions, since energy is what makes the supply of light, heat, mobility and communication possible in the first place. People who are affected by energy poverty cannot make use of this kind of provision without worry, which is why they are massively restricted in their everyday lives. This must be resolutely countered and energy poverty must be fought sustainably. |
| --- | --- |

4.8.

Brussels, 24 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

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(1)  COM(2021) 950 final.

1

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ANNEX

The following amendment, which received at least a quarter of the votes cast, was rejected during the discussion:

Point 3.12

Amend this point:

| Section opinion | Amendment |
| --- | --- |
| For end-consumers, there are two ways to immediately relieve themselves of the energy bill: a) save energy and b) use locally renewable energies. The problem: initial investments are necessary for both (e.g. in thermal insulation, more economical new devices, PV systems etc.). Those who suffer most from high energy prices cannot usually afford these investments.
  State run contracting could provide a remedy: the state finances such investments in advance, and consumers settle, from part of their savings in their electricity and heating bills, the interest and repayment. They can keep the rest of the savings. This model has proven itself in developing countries. It could easily be transferred to Europe. It is important to comply with minimum consumer law standards such as transparent accounting and termination options. Another option is direct investment grants. | For end-consumers, there are two ways to immediately relieve themselves of the energy bill: a) save energy and b) use locally renewable energies. The problem: initial investments are necessary for both (e.g. in thermal insulation, more economical new devices, PV systems etc.). Those who suffer most from high energy prices cannot usually afford these investments. |

Section opinion

Amendment

For end-consumers, there are two ways to immediately relieve themselves of the energy bill: a) save energy and b) use locally renewable energies. The problem: initial investments are necessary for both (e.g. in thermal insulation, more economical new devices, PV systems etc.). Those who suffer most from high energy prices cannot usually afford these investments.
  State run contracting could provide a remedy: the state finances such investments in advance, and consumers settle, from part of their savings in their electricity and heating bills, the interest and repayment. They can keep the rest of the savings. This model has proven itself in developing countries. It could easily be transferred to Europe. It is important to comply with minimum consumer law standards such as transparent accounting and termination options. Another option is direct investment grants.

For end-consumers, there are two ways to immediately relieve themselves of the energy bill: a) save energy and b) use locally renewable energies. The problem: initial investments are necessary for both (e.g. in thermal insulation, more economical new devices, PV systems etc.). Those who suffer most from high energy prices cannot usually afford these investments.

Reason

Delete, as it is incomprehensible and the proposed solution is unclear and it is not correct to propose transferring solutions from developing countries to Europe without thorough verification.

Outcome of the vote on the amendment:

| Votes in favour: | 44 |
| --- | --- |
| Votes against: | 120 |
| Abstentions: | 51 |

Votes in favour:

44

Votes against:

120

Abstentions:

51

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/88 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/88

---

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010

(COM(2021) 706 final – 2021/0366(COD))

(2022/C 275/14)

| Rapporteur: | Arnold PUECH d’ALISSAC |
| --- | --- |
| Co-rapporteur: | Florian MARIN |

Rapporteur:

Arnold PUECH d’ALISSAC

Co-rapporteur:

Florian MARIN

| Referral | European Parliament referral 17.1.2022
  European Council referral 17.1.2022 |
| --- | --- |
| Legal basis | Article 192(1) and Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Agriculture, Rural Development and the Environment |
| Adopted in section | 9.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 225/3/2 |

Referral

European Parliament referral 17.1.2022

European Council referral 17.1.2022

Legal basis

Article 192(1) and Article 304 of the Treaty on the Functioning of the European Union

Section responsible

Section for Agriculture, Rural Development and the Environment

Adopted in section

9.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

225/3/2

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee welcomes the Commission’s proposal for a regulation. The Commission’s legislative initiative is timely and highly relevant. |
| --- | --- |

1.1.

| 1.2. | While understanding that the European Commission seeks to strike a balance between ease of implementation and efficiency, the Committee finds that the scope of the regulation should be broadened:






  — | The regulation should not only cover deforestation and forest degradation. Products and commodities, the production of which has led to the destruction of other high-value conservation ecosystems such as savannahs, wetlands, peatlands, mangroves or riparian buffers, should also be covered by a prohibition that prevents them from being placed on the European market. |
| --- | --- | --- |

1.2.

—

The regulation should not only cover deforestation and forest degradation. Products and commodities, the production of which has led to the destruction of other high-value conservation ecosystems such as savannahs, wetlands, peatlands, mangroves or riparian buffers, should also be covered by a prohibition that prevents them from being placed on the European market.

| — | Important forest risk commodities such as maize, sugar and rubber should be included in the scope of the regulation as of its entry into force. Further, the list of derived products should be broadened, and the regulation should cover products from animals fed with forest risk commodities to avoid leakage and unfair competition. |
| --- | --- |

—

Important forest risk commodities such as maize, sugar and rubber should be included in the scope of the regulation as of its entry into force. Further, the list of derived products should be broadened, and the regulation should cover products from animals fed with forest risk commodities to avoid leakage and unfair competition.

| — | The regulation must address other very important social and environmental issues associated with the production of the products covered, in addition to deforestation and forest degradation. This is all the more important for human rights issues, fair treatment of workers and workers’ rights issues. Demanding legality only in the producing country, as stipulated in the proposal, is not sufficient for the exact same reasons that it is not sufficient for avoiding deforestation. |
| --- | --- |

—

The regulation must address other very important social and environmental issues associated with the production of the products covered, in addition to deforestation and forest degradation. This is all the more important for human rights issues, fair treatment of workers and workers’ rights issues. Demanding legality only in the producing country, as stipulated in the proposal, is not sufficient for the exact same reasons that it is not sufficient for avoiding deforestation.

| 1.3. | The efficiency and effectiveness of the proposed legislation depends on the priority it is given in Member States and on the operational capacity of competent authorities in each Member State. High priority must be given to making sure that all Member States carry out an efficient and effective control, that the necessary funds are dedicated to the initiative, and that systems are in place in all Member States before the entry into force of the regulation. |
| --- | --- |

1.3.

| 1.4. | In the case of many commodities, Europe is far from the largest buyer. For these commodities the effect on deforestation of isolated European demand-side measures could be limited. Political cooperation and alignment on demand-side initiatives with other major importing countries should be a top priority. |
| --- | --- |

1.4.

| 1.5. | Meeting European demands for documentation will be challenging for producer countries and regions, not least for farmers and smallholders. The EESC considers that the cost of the proposed regulation should not be transferred to small-scale farmers who are barely earning a living income.
  Europe must engage with producer countries and offer its assistance and cooperation in the implementation of measures necessary to meet European requirements. The Commission should recognise the potential role of smallholders including women as agents of change, and should ensure the effective, free, meaningful, and informed participation of smallholders. Producers in poor countries should be given enough time to adapt.
  The role of certification and the impact of the proposed regulation on farmers, including smallholders and local communities, must be assessed ex-ante and the conclusions from these assessments must be integrated in the regulation before its entry into force. |
| --- | --- |

1.5.

Europe must engage with producer countries and offer its assistance and cooperation in the implementation of measures necessary to meet European requirements. The Commission should recognise the potential role of smallholders including women as agents of change, and should ensure the effective, free, meaningful, and informed participation of smallholders. Producers in poor countries should be given enough time to adapt.

The role of certification and the impact of the proposed regulation on farmers, including smallholders and local communities, must be assessed ex-ante and the conclusions from these assessments must be integrated in the regulation before its entry into force.

| 1.6. | Penalties should be dissuasive. At the same time, penalties and zero-tolerance should not lead to risk avoidance. If buyers for the European market avoid areas with non-negligible deforestation risk altogether, then farmers and smallholders in remote areas risk being left behind. Furthermore, Europe risks losing its opportunity to assist in the transformation towards more sustainable production patterns in the areas where it matters the most. |
| --- | --- |

1.6.

| 1.7. | Europe has a structural protein deficiency, which is currently covered by imported protein-rich feed, some of this coming from deforestation risk regions.
  Europe must increase its degree of self-sufficiency in plant protein. The European Union should also develop a dedicated strategy — linked to Horizon Europe and the EU innovation fund — for developing scaling up production of and making marketable new protein sources. This could include environmentally friendly biorefining of perennial grasses and large-scale production of proteins by methane-fed micro-algae. |
| --- | --- |

1.7.

Europe must increase its degree of self-sufficiency in plant protein. The European Union should also develop a dedicated strategy — linked to Horizon Europe and the EU innovation fund — for developing scaling up production of and making marketable new protein sources. This could include environmentally friendly biorefining of perennial grasses and large-scale production of proteins by methane-fed micro-algae.

| 1.8. | SME exemptions and simplified due diligence under the country benchmarking system should not create loopholes that could render the regulation ineffective. At the same time, the regulation should not create unnecessary administrative burdens and costs. The Commission should carefully evaluate whether provisions for geo-localisation down to individual plots in low-risk countries and certain evidential requirements are proportional or necessary. |
| --- | --- |

1.8.

| 1.9. | The EESC considers that social partners and civil society should play a tangible role in monitoring the effectiveness of reducing deforestation. The European Economic and Social Committee and the European Committee of the Regions –should become members of the EU Commission multi-stakeholder platform. The platform should be given a central role in overseeing the implementation of the legislation. Support using satellite data should be provided for stakeholders of the platform and ownership of data should be taken into account. A common approach needs to be taken by Member States to identify the health and state of forests. |
| --- | --- |

1.9.

| 1.10. | The regulation must be consistent with the agreements that the EU has with its trading partners. Being both the major importer and the biggest exporter, the EU has a keen interest in maintaining a well-functioning, fair and sustainable international trade system. |
| --- | --- |

1.10.

2.   Background

| 2.1. | On 17 November 2021 the European Commission published its Proposal for a regulation of the European Parliament and of the Council on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010. |
| --- | --- |

2.1.

| 2.2. | The initiative is mentioned in the Commission Communication on stepping up EU Action to Protect and restore the world’s forests, published in July 2019. The proposal is part of the European Green Deal, the EU Biodiversity Strategy and the Farm to Fork Strategy. The proposal also reflects some important elements of the European Parliament resolution of 22 October 2020 with recommendations to the Commission on an EU legal framework to halt and reverse EU-driven global deforestation. |
| --- | --- |

2.2.

| 2.3. | The objective of the regulation is to curb deforestation and forest degradation that is provoked by EU consumption and production. This, in turn, is expected to reduce CHG emissions and global biodiversity loss. The initiative aims to minimise consumption of products coming from supply chains associated with deforestation or forest degradation occurring after 31 December 2020 — and increase EU demand for trade in legal and ‘deforestation-free’ commodities and products. |
| --- | --- |

2.3.

| 2.4. | The proposed regulation sets out the definitions ‘forest’, ‘deforestation’, ‘planted forest’ and ‘plantation forest’, which draw on the FAO definitions of these terms, but with some important changes. The definition of ‘forest degradation’ deviates substantially from the equivalent FAO definition. Relevant commodities and products may be placed or made available on the Union market, or exported only if all the following conditions are met:






  — | the products or commodities are deforestation-free |
| --- | --- | --- |

2.4.

—

the products or commodities are deforestation-free

| — | they have been produced in accordance with the relevant legislation of the country of production; and |
| --- | --- |

—

they have been produced in accordance with the relevant legislation of the country of production; and

| — | they are covered by a due diligence statement. |
| --- | --- |

—

they are covered by a due diligence statement.

| 2.5. | The ‘relevant’ commodities and products — the scope of the regulation — are listed in Article 1: cattle, cocoa, coffee, oil palm, soy and wood. In addition, Annex 1 designates certain ‘relevant products’ that contain, have been fed with, or have been made using the relevant commodities, with reference to the product’s HS Code.
  The scope of the regulation was decided by assessing which parameters would enable it to most effectively reduce the Union’s contribution to commodity — and product — driven deforestation and forest degradation, and the Commission’s (lack of) capacity to investigate the potential impact of applying the regulation to all derived products.
  The scope of derived products listed in Annex I will be reviewed no later than two years after entry into force of the regulation. The Commission may adopt delegated acts to include additional ‘relevant products’. |
| --- | --- |

2.5.

The scope of the regulation was decided by assessing which parameters would enable it to most effectively reduce the Union’s contribution to commodity — and product — driven deforestation and forest degradation, and the Commission’s (lack of) capacity to investigate the potential impact of applying the regulation to all derived products.

The scope of derived products listed in Annex I will be reviewed no later than two years after entry into force of the regulation. The Commission may adopt delegated acts to include additional ‘relevant products’.

| 2.6. | Due diligence for operators includes gathering information, documents and data, along with risk assessment measures and risk mitigation measures. The information necessary to fulfil the requirements of the regulation includes supplier information, identification of country of production and geo-localisation coordinates of all plots of land where the relevant commodities and products are produced, as well as date and time range of production. SME traders will be subject to lighter due diligence obligations. |
| --- | --- |

2.6.

| 2.7. | The due diligence system is results-based and contains an obligation for operators to ascertain that there is either no risk or only a ‘negligible risk’ that commodities and products are not legal and/or deforestation-free. If operators fail to fulfil this obligation, they are prohibited from placing the relevant commodities and products on, or exporting them from, the EU market. |
| --- | --- |

2.7.

| 2.8. | The proposed regulation introduces a country benchmarking system that will allow the Commission to categorise countries or sub-national regions according to deforestation patterns linked to the relevant products covered. There will be three categories of risk: — low, standard and high. The obligations for operators and Member States’ authorities will vary according to the level of risk of the country or region of production, with ‘simplified due diligence’ for low-risk countries or regions and enhanced scrutiny requirements for the competent authorities with regard to imports from high-risk countries. |
| --- | --- |

2.8.

| 2.9. | The regulation includes obligations for Member States to ensure effective checks of commodities and products through their competent authorities, including establishing a plan taking a risk-based approach. Likewise, the competent authorities have to carry out checks on operators. Member States have to ensure that the competent authorities have adequate powers and resources to carry out its obligations. |
| --- | --- |

2.9.

| 2.10. | The EESC’s opinion on the proposal for a regulation aims to provide a civil society perspective on the regulation. |
| --- | --- |

2.10.

3.   General comments

| 3.1. | The Committee welcomes the Commission’s proposal for a regulation. A major part of global deforestation is associated with expansion of agricultural land and demand for commodities such as beef, wood, palm oil and soy. The EU is a major consumer of these products, some of which are produced unsustainably, causing deforestation. The legislative initiative by the Commission is therefore timely and highly relevant. |
| --- | --- |

3.1.

| 3.2. | The Committee expects an EU regulation to send a strong signal to the market and to provide a strong incentive for supply chains where the EU is a major international buyer to transform and document deforestation free production. Further, common EU rules will make for a level playing field on the EU internal market. |
| --- | --- |

3.2.

| 3.3. | For some commodities, Europe is far from being the largest importer and have less leverage to influence the organisation and logistics of supply chains in producer countries. A clear differentiation should be made between small and big companies in terms of deforestation. The influence of the big companies in the supply chain is huge.
  Political cooperation and alignment on deforestation-free demand-side initiatives with other major importing countries should be a major priority. The upcoming COP27 could be an opportunity for entering into a political agreement. |
| --- | --- |

3.3.

Political cooperation and alignment on deforestation-free demand-side initiatives with other major importing countries should be a major priority. The upcoming COP27 could be an opportunity for entering into a political agreement.

| 3.4. | Cooperation with producer countries is even more important, to support them in addressing the root causes of deforestation. Reducing poverty, offering and boosting opportunities to access a decent and dignified livelihood including quality jobs and investment in the development of rural areas will have a direct impact on deforestation. Reducing deforestation must take into account the cultural importance of the forest especially for the rural and forest communities. With regard to timber extraction, the EU should endeavour to help implement sustainable forest management. |
| --- | --- |

3.4.

| 3.5. | Some deforestation in some countries is caused by farmers and rural communities who rely on using wood for fuel and heating or who are clearing small plots of land for farming and grazing. However, the vast majority of deforestation is caused by the conversion of forests to commercial agriculture operations. The proposed regulation would not apply to instances of local communities clearing forests they own or occupy to support their own livelihoods if it does not result in products grown on that land being placed on the EU market. However, support mechanisms including financial support and cooperation that involve these groups will also be important in further reducing deforestation. The EESC considers that the cost of the present regulation should not be transferred to small-scale farmers — whether their produce is exported or not — who are barely earning a living income. |
| --- | --- |

3.5.

| 3.6. | Eliminating — in particular large-scale practices or the practices of a large number of small and middle-sized operators where the forest is being cut down for commercial agriculture or other industrial purposes (such as mining, natural resource exploitation or related infrastructure) should be a priority. Raising awareness in the EU and in producer countries concerning the role and importance of forests in tackling climate change and carbon sequestration is important: EU financial support should be provided for this. Transfer of best practices, building thematic bridges and one-stop shops on online platforms worldwide are necessary. Education, training and a skilled labour force are crucial for reducing deforestation in long term. Technical support programmes to help increase productivity should be considered as an alternative to taking in more land for agriculture. |
| --- | --- |

3.6.

| 3.7. | The EESC calls for an urgent response mechanism to support people and civil society who are protecting forests inside and outside the EU. Forest and environmental protection, landslides and habitats are high risks for local and indigenous communities, where people are being killed for protecting and defending them, both outside the EU and in some EU Member States. |
| --- | --- |

3.7.

| 3.8. | The vast majority of farmers and smallholders do not engage in illegal practices or deforestation, and a growing number of farmers and smallholders are engaged with local, European and international counterparts in documenting responsible practices under certification schemes or landscape initiatives.
  These people should not be left behind. Europe must engage with producer countries and offer its cooperation in the implementation of measures necessary to meet the proposed supply chain traceability requirements and develop national commodity traceability systems where they are currently lacking. Producer countries should be given the time necessary to adapt. |
| --- | --- |

3.8.

These people should not be left behind. Europe must engage with producer countries and offer its cooperation in the implementation of measures necessary to meet the proposed supply chain traceability requirements and develop national commodity traceability systems where they are currently lacking. Producer countries should be given the time necessary to adapt.

| 3.9. | The proposed regulation should not lead only to ‘greening’ EU supply chains while underlying drivers of deforestation go unaddressed. A potential consequence of the proposed legislation is that some European operators may choose to source their products/commodities from ‘safer’ countries (where possible) to avoid risks of deforestation or illegality. If so, the size of EU trade in forest-risk commodities in particularly risky countries may decrease, potentially reducing the opportunities for the EU to influence forest governance in those countries. Europe should avoid losing its opportunity to assist in the transformation to more sustainable production patterns in the areas where it matters most if buyers for the European market avoid areas with non-negligible deforestation risk altogether. |
| --- | --- |

3.9.

| 3.10. | The obligations under the regulation should further extend to the financial sector. This is in order to ensure that financial services and investments associated with the production, processing, trade or market placement of relevant commodities and products are not linked to deforestation, forest degradation, or the violation of national laws and international human rights standards. |
| --- | --- |

3.10.

| 3.11. | The European Green Deal, the common agricultural policy and the Farm to Fork strategy could cause agricultural production to fall in the EU in the future (1). The greening of Europe, however, should not lead to outsourcing of the environmental impact of production. Europe must invest in agricultural production that can continue at the same rate or increase, while at the same time becoming greener and more sustainable. The non-productive area of CAP 2023 will increase production needs in the world and increase the risk of deforestation. |
| --- | --- |

3.11.

| 3.12. | Europe has a structural protein deficiency which is currently covered by imported protein-rich feed, some of this coming from deforestation risk regions.
  A growing world population and an increasing global middle class mean an even higher global demand. Europe must increase not only its degree of self-sufficiency in plant protein and protein for feed but should also invest in technologies that will enable us to produce more protein without taking up more land for production.
  The EU should develop a dedicated strategy — possibly linked to Horizon Europe and the EU innovation fund — for scaling up production and making marketable new alternative sources of proteins. This could include biorefining of perennial grasses and large-scale production of proteins by methane-fed micro-algae. |
| --- | --- |

3.12.

A growing world population and an increasing global middle class mean an even higher global demand. Europe must increase not only its degree of self-sufficiency in plant protein and protein for feed but should also invest in technologies that will enable us to produce more protein without taking up more land for production.

The EU should develop a dedicated strategy — possibly linked to Horizon Europe and the EU innovation fund — for scaling up production and making marketable new alternative sources of proteins. This could include biorefining of perennial grasses and large-scale production of proteins by methane-fed micro-algae.

| 3.13. | The farming sector in Europe is facing rapidly-rising resource prices, which are likely to lead to higher food prices. This comes on top of the currently high energy prices affecting budgets for European citizens. Care should be taken in the choice of measures and timing of the implementation of the regulation so to give the supply chains time to adapt in order to avoid sharp price increases. |
| --- | --- |

3.13.

| 3.14. | The demand for forest-risk products is expected to increase as the global population and a global middle class grow. Consumers should be informed about the importance of sustainable, healthy, and balanced consumption patterns as indicated in the opinion NAT/755 (2). |
| --- | --- |

3.14.

| 3.15. | The regulation must be consistent with the agreements that the EU has with its trading partners. Being both the major importer, but also the first exporter, the EU has a keen interest in a well-functioning and fair and sustainable international trade system. For reasons of administrative economy, compliance with the requirements for products covered by the present regulation should be checked when they are introduced into the EU. Once products have been authorised, they should be able to circulate freely in the EU without the need for additional controls. |
| --- | --- |

3.15.

4.   Specific comments

| 4.1. | Other ecosystems such as savannahs, wetlands, peatlands, mangroves or riparian buffers have high conservation value, and many are at risk of degradation. These high-value conservation areas should be included in the regulation. The EU and the Member States should consider safeguarding primary forests by including them in Unesco protection. |
| --- | --- |

4.1.

| 4.2. | Certain important forest risk commodities such as maize, sugar and rubber are missing from the scope of the regulation. The list of derived products is limited to just a few, which reduces the impact of the regulation. To ensure its effectiveness, all products related to deforestation, forest degradation and loss of high-value conservation areas must be within the scope of the regulation. A special focus must be placed on rubber, maize, bananas, sugar cane, and all meat from animals fed with soy (such as pork and poultry). The EESC strongly calls for a wood mass inventory at EU level. This issue should be solved in the near future. Key definitions within this regulation (e.g. ‘deforestation-free’ or ‘forest degradation’) should be in line with FAO definitions. Adapted definitions or definitions that are only partly based on FAO definitions just create scope for different interpretations and could therefore lead to legal uncertainty for economic operators. |
| --- | --- |

4.2.

| 4.3. | Enforcement of the regulation will be in the hands of the Member States’ competent authorities. The efficiency of the proposed legislation thus depends on the priority it is given and the operational capacity of public authorities in each Member State. Making sure that the necessary funds are dedicated, and systems in place in all Member States must be a high priority. Dedicated investments in IT infrastructure, human resources and increased operational capacity for public authorities in each Member State for effective and adequate monitoring, benchmarks and risk assessment are important. Artificial intelligence should be used in this regard. A transparent monitoring system (including publications of the due diligence reports in a form that does not compromise confidential business information)– should be implemented by the entities to which the regulation applies. The cut-off date must be a date in the past to avoid encouraging further deforestation. |
| --- | --- |

4.3.

| 4.4. | The regulation focuses on deforestation and forest degradation linked to production and consumption in Europe of selected commodities and products. However, it fails to address other very important social and environmental issues associated with the production of the products covered. In particular, the chosen approach to human rights protection relies exclusively on the laws applicable under national legal frameworks. This leaves major gaps in terms of safeguarding the land rights of indigenous peoples and local communities and other international human rights standards. |
| --- | --- |

4.4.

The Committee encourages the Commission to consider supplementing its proposal with guidelines for undertaking due diligence and risk assessments on supply chains in each commodity sector. The guidelines should include potential sources of information that the relevant responsible operators could consult, such as certification schemes that meet certain minimum standards. The aim should be to establish a coherent scheme for responsible and deforestation-free supply chains, building on some of the important work that have been done in a number of existing certification schemes.

| 4.5. | No later than five years after the regulation enters into force, the Commission will carry out an assessment of the impact on farmers, in particular smallholders, indigenous peoples and local communities and the possible need for additional support. The proposal also provides for an evaluation of the need and feasibility of additional trade facilitation tools to support the achievement of the objectives of the regulation through recognition of certification schemes.
  The Committee finds, however, that the role of certification and the impact on farmers, including smallholders and local communities, are essential to the functioning and impact of the proposed regulation, both intended and unintended. They must be covered by ex-ante assessments and the conclusions stemming from these assessments must be integrated in the regulation before its entry into force. |
| --- | --- |

4.5.

The Committee finds, however, that the role of certification and the impact on farmers, including smallholders and local communities, are essential to the functioning and impact of the proposed regulation, both intended and unintended. They must be covered by ex-ante assessments and the conclusions stemming from these assessments must be integrated in the regulation before its entry into force.

| 4.6. | SME exemptions and simplified due diligence under the country benchmarking system should not create loopholes that could render the regulation ineffective. At the same time, the regulation should not create unnecessary administrative burdens and costs. A public EU Rating Agency (3) for human and environmental rights in the business context can help SME’s carry out their obligations. The Commission should carefully evaluate whether the proposed provisions for geo-localisation down to individual plots in low-risk countries and evidential requirements are proportional or necessary. Some requirements would not only lead to conflicts in the EU with respect to the subsidiarity principle vis-à-vis the Member States, but above all would also impose a disproportionate burden on small producers, who provide a significant share of supply in the EU. For the sake of transparency, the exact criteria of the classification must be made public. Small forest owners inside and outside the EU have to be supported to improve sustainable forest management, access sustainable finance and offer sustainable forest products. |
| --- | --- |

4.6.

| 4.7. | Articles 22 and 24 include provisions for withdrawal from the market and possible destruction of commodities or products that do not comply with the regulation. This would in most cases be in conflict with other important EU policy principles and goals, including on preventing food waste. The EESC therefore recommends that the Commission reconsiders these provisions to avoid destruction of valuable resources. According to the draft regulation (Article 3) timber from lawful (authorised) clearing of forests for the purpose of creating agricultural land should not be placed on the market. It would be appropriate to clarify that timber from certain authorised forest clearing processes, in which a societal need for the change in land use has been determined, is not automatically covered by the marketing ban. Such provisions should be based upon provisions known from forest legislation of many Member States, where conversion is permitted in exceptional circumstances based upon criteria such as forestation rates, forest management and compensation by new planting. |
| --- | --- |

4.7.

| 4.8. | The EESC considers that a common approach by Member States based on EU guidance concerning financial or non-financial penalties is needed, alongside the criminal penalties for the most serious violation of law. Transparent criteria for determining the penalties must also be established and promoted. In addition to administrative fines and penalties, the regulation should provide that operators can be held liable under national law for non-compliance with the regulation’s provisions. |
| --- | --- |

4.8.

| 4.9. | The notion of legality mentioned in the Commission’s material is too soft for tackling the human rights situation. The EESC considers that more powerful instruments in this legislation, like civil liability and assurance, are needed. EU imports should include verification criteria regarding working conditions, freedom of association and fair treatment of workers. Workers’ rights, health and safety, gender, career predictability, access to a fair pension system and quality jobs for workers in the wood industry and forest communities and indigenous peoples have to be taken into account alongside the sustainable forest management criteria and deforestation. Fair land tenure and access to land should be priorities. Internationally recognised human rights should be part of due diligence procedures, market placement requirements and benchmarking criteria, and forced and child labour should be carefully monitored and eliminated. Article 3(b) should, besides the national legislation, also consider internationally relevant social clauses and human rights criteria based on ILO core conventions, especially C169 — Indigenous and Tribal Peoples Convention, 1989 (No 169) and C184 — Safety and Health in Agriculture Convention, 2001 (No 184) and other international human rights instruments (4). This should also be reflected in article 10.2 of the proposal. |
| --- | --- |

4.9.

| 4.10. | The EESC considers that social partners and civil society should play a tangible role in monitoring the effectiveness of reducing deforestation. The European Economic and Social Committee and the European Committee of the Regions should be members of the EU-Commission multi-stakeholder platform, that should be given a central role in overseeing the implementation of the legislation. Support using satellite data should be provided for stakeholders of the platform and ownership of data should be taken into account. A common approach by Member States to identifying the health and state of forests is needed. |
| --- | --- |

4.10.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

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(1)  https://publications.jrc.ec.europa.eu/repository/handle/JRC121368

1

(2)  EESC own-initiative opinion on Promoting healthy and sustainable diets in the EU (OJ C 190, 5.6.2019, p. 9).

2

(3)  See point 1.15 in EESC own-initiative opinion on Binding UN treaty on business and human rights (OJ C 97, 24.3.2020, p. 9).

3

Binding UN treaty on business and human rights

(4)  e.g. Universal Declaration of Human Rights, European Social Charter, Charter of Fundamental Rights of the European Union, Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security.

4

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/95 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/95

---

Opinion of the European Economic and Social Committee on Proposal for a Regulation of the European Parliament and of the Council on shipments of waste and amending Regulations (EU) No 1257/2013 and (EU) 2020/1056

(COM(2021) 709 final – 2021/0367 (COD))

(2022/C 275/15)

| Rapporteur: | Anastasis YIAPANIS |
| --- | --- |

Rapporteur:

Anastasis YIAPANIS

| Referral | European Parliament, 22.11.2021
  Council, 1.12.2021 |
| --- | --- |
| Legal basis | Article 192 and article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Agriculture, Rural Development and the Environment |
| Adopted in section | 9.2.2022 |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 160/2/0 |

Referral

European Parliament, 22.11.2021

Council, 1.12.2021

Legal basis

Article 192 and article 304 of the Treaty on the Functioning of the European Union

Section responsible

Section for Agriculture, Rural Development and the Environment

Adopted in section

9.2.2022

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

160/2/0

1.   Conclusions and recommendations

| 1.1. | The EESC welcomes the Commission’s Proposal for a new Regulation, and the accompanying Communication, and considers the protection of human health and the environment to be a top EU priority. When technically possible, waste produced in the Union should be recycled within the Union, in an environmentally, economically and socially sound manner. |
| --- | --- |

1.1.

| 1.2. | The EESC calls on the Member States to adopt the Electronic Data Interchange system (EDI) as soon as possible, agree on adopting harmonised criteria for pre-consent procedures, and empower the Commission to adopt delegating acts for common waste classification. Funds and technical assistance for increasing operational capacity should be immediately provided. |
| --- | --- |

1.2.

| 1.3. | A transition towards new business models that give back to the planet more than what they take is urgently needed. Health and safety and working conditions must be well protected and monitored. The EESC calls for investments in training for workers through a specific allocation under the ESF+. |
| --- | --- |

1.3.

| 1.4. | The EESC calls for enhanced funding opportunities for establishing and/or modernising the EU’s recycling facilities and discovering innovative technologies for the reuse and recycling of waste. Boosting recycling capacity inside the EU’s borders will contribute to reducing carbon and environmental footprints and lead to increased employment in this sector. |
| --- | --- |

1.4.

| 1.5. | The EESC believes that a harmonised financial guarantee calculation should clearly cover all the risks arising from waste shipments, but must not overburden companies, especially SMEs. |
| --- | --- |

1.5.

| 1.6. | The EESC welcomes the Commission proposal for third-party audits led by EU established or authorized auditor by EU notified bodies, with relevant qualification on both facility and country level and considers the social partners and relevant NGOs should be observing procedures. A monitoring, complaint and sanctions mechanism should be reinforced. |
| --- | --- |

1.6.

| 1.7. | The EESC calls for a maximum two-year transition period after the Regulation is adopted. Furthermore, the time limit for the competent authorities of transit to raise valid objections for a planned shipment for recovery, should be reduced to 10 days and objections to the same shipment should be possible only once. |
| --- | --- |

1.7.

| 1.8. | The Committee calls for the extension of the EDI system to all waste shipments destined for export, import and transit. The system should be operational as soon as possible, even before the two-year deadline proposed by the European Commission. Adequate human and technical resources are therefore needed. |
| --- | --- |

1.8.

| 1.9. | The EESC considers that exports of high-quality recyclable waste, and especially waste exports with a high content of critical raw materials, are detrimental to EU sustainability and undermine its global competitiveness. Investment in waste management infrastructure is needed, especially in the countries where infringement procedures are opened. A baseline assessment of export volumes of waste should be conducted in order to detect changes in waste shipment and thus protect the EU and support reaching the EU goals described in the Green Deal and the Circular Economy Action Plan. |
| --- | --- |

1.9.

| 1.10. | All OECD and non-OECD member countries should meet the same strict criteria regarding environmental commitments as are set in the EU, and proof of evidence should be provided that all the receiving countries are already managing their own domestic waste in an environmentally sound manner similar to EU standards, as well as ILO core conventions and labour standards. |
| --- | --- |

1.10.

| 1.11. | The EESC supports the enforcement of the inspection and investigation procedures and calls for full cooperation between Member States and with the Union, as well as for a harmonised penalty system that is effective and proportionate to the infringement. Non-confidential data should be made publicly available to all interested parties, including social partners, non-governmental organisations, municipalities and citizens. |
| --- | --- |

1.11.

| 1.12. | Manufacturing companies have to be incentivised to design their products in such a way that they are fit for reuse and recycling. National and European strategies that involve the social partners, SME representatives and civil society organisations are needed and have to be promoted through collaborative platforms. The European Circular Economy Stakeholder Platform (1) is an excellent example in this regard. |
| --- | --- |

1.12.

| 1.13. | The EESC invites the European Commission to assess the possibility of establishing a Market Observatory for secondary raw materials, with a consultative role for the European Commission, that can analyse and recommend sectoral development policies and ways to eliminate the existing bottlenecks, and retain valuable secondary raw materials within the EU. |
| --- | --- |

1.13.

| 1.14. | Finally, the Committee calls for a thorough impact assessment of the implementation of the Regulation five years after its entry into force. |
| --- | --- |

1.14.

2.   Introduction and General Comments

| 2.1. | The consumption of materials such as metals, minerals, biomass and fossil fuels is expected to double by 2060 (2), which in turn will naturally lead to an increase in annual waste generation by 70 % by 2050 (3). High income countries are the top exporters of waste globally, while developing countries are the top importers (4). |
| --- | --- |

2.1.

| 2.2. | Manufacturing companies spend approximately 40 % of the total production cost on raw materials. Today, only 12 % of material resources used in EU industry come from recycled products and recovered materials (5). The biggest obstacle for the uptake of secondary raw materials is their high price, compared to virgin raw materials. |
| --- | --- |

2.2.

| 2.3. | On 17 November 2021, the European Commission published the Proposal for a Regulation on shipments of waste and amending Regulations (EU) No 1257/2013 (6) and (EU) 2020/1056 (7) (Regulation). It shall replace the 15 year-old Waste Shipment Regulation (EC) No 1013/2006 (8), following calls to revise it from the European Parliament (9) and the European Economic and Social Committee (10), and builds on the ambitions announced in the European Green Deal (11) and the Circular Economy Action Plan (12). |
| --- | --- |

2.3.

| 2.4. | Growing waste quantities and economic development have led to increased exports of waste from the EU to third countries, which has in turn led to some negative environmental and health effects in the countries of destination. The Regulation intends to facilitate easier and quicker procedures for intra-EU shipments for reuse and recycling, introduces some clear rules for exports, imports and transit of waste and enforces the current EU framework for counteracting illegal shipments. |
| --- | --- |

2.4.

| 2.5. | The EESC welcomes the Commission’s Proposal for a new Regulation and the accompanying Communication and considers the protection of human health and the environment to be a top EU priority. The EU, as the frontrunner in the fight against climate change, should be able deal with the waste produced in its territory, rather than export it to other countries. A transition towards new business models that give back to the planet more than what they take is urgently needed, complemented by sustainable behaviour by all stakeholders involved. Investment in waste management infrastructures that are friendly with the environment should remain a priority, especially in the countries where infringement procedures are opened. |
| --- | --- |

2.5.

| 2.6. | On the economic side, waste can have an important value in terms of the recovery of secondary raw materials, contributing to the EU circular economy, reducing the dependence on certain primary raw materials, while cutting down the energy consumption needed to produce primary raw materials in Europe and decreasing CO2 emissions. Furthermore, the EESC considers that exports of high-quality recyclable waste, and especially waste exports with a high content of critical raw materials, are detrimental to EU sustainability and undermine its global competitiveness by providing valuable resources to external competitors. |
| --- | --- |

2.6.

3.   Intra-EU waste shipments

| 3.1. | The stakeholder consultation conducted by the Commission has revealed the need for:






  — | the digitalisation of the notification procedures; |
| --- | --- | --- |

3.1.

—

the digitalisation of the notification procedures;

| — | an update of the fast-track system; |
| --- | --- |

—

an update of the fast-track system;

| — | common and transparent rules for the classification of waste and the calculation of financial guarantees; |
| --- | --- |

—

common and transparent rules for the classification of waste and the calculation of financial guarantees;

| — | alignment with the proximity principle and the waste hierarchy. |
| --- | --- |

—

alignment with the proximity principle and the waste hierarchy.

| 3.2. | A fragmented implementation of the 2006 Regulation across the EU has led to lengthy procedures for intra-EU waste shipments and continuous red tape. This is causing delays and financial losses for economic operators, which are discouraged from shipping waste for material recovery within the EU. |
| --- | --- |

3.2.

| 3.3. | The EESC considers that, when technically possible, waste produced in the Union should be recycled within the Union, in an environmentally, economically and socially sound manner, while always respecting environmental, health and safety standards. A greater volume of internally shipped waste and speedier procedures will lead to an enhanced circular economy in the Union, contribute to EU competitiveness and strategic autonomy and create the basis for new jobs. |
| --- | --- |

3.3.

| 3.4. | Boosting recycling capacity inside the EU’s borders is of the utmost importance and will help reduce carbon and environmental footprints. It could also lead to increased employment in this sector; the figures advanced by the European Commission that between 9 000 and 23 000 new jobs will be created in the recycling and reuse sectors are promising, and could be even higher if the proper boost for recycling capacity is introduced. |
| --- | --- |

3.4.

| 3.5. | The Committee finds it totally unacceptable that some Member States still rely on paper-based procedures and that, sometimes, even regions from the same Member State have different interpretations of the enforcement procedures. Therefore, the EESC calls on Member States to embrace as soon as possible the digital solutions proposed by the European Commission and ensure a smooth transfer to a harmonised and transparent European framework, agree on adopting harmonised criteria for pre-consent procedures and empower the Commission to adopt delegating acts for common waste classification. Funds and technical assistance for increasing operational capacity should be immediately provided. |
| --- | --- |

3.5.

| 3.6. | The Commission is proposing to harmonise the calculation procedure for the waste shipments financial guarantee. The EESC welcomes the fact that this will lead to increased predictability for businesses, but calls for proportionate calculation of these amounts in such a way that would not represent an extra burden on economic operators. The EESC believes that the financial guarantee should clearly cover all the risks arising from waste shipments, but must not overburden companies, especially since there are many SMEs involved in the process, with limited available liquidity. |
| --- | --- |

3.6.

| 3.7. | Finally, the EESC calls for enhanced funding opportunities from the European Union and the Member States for establishing and/or modernising the EU recycling facilities and discovering innovative technologies for the reuse and recycling of waste. End markets for Raw Materials from Recycling have to be developed without delay in order to create a fully functioning secondary raw materials market, transforming end-of-life products into new raw material for production. The EU should also increase the availability and quality of recyclates, focusing on the ability of a material to retain its inherent properties after recycling, and its ability to replace primary raw materials in future applications. This shall lead to increased processing capacity within the Union, new high quality and green jobs, and the opportunity to identify the type of raw materials that generate no-value waste, and eliminate or replace them in the long term. |
| --- | --- |

3.7.

4.   Exports, imports and in transit waste shipments

| 4.1. | In the past 17 years, the volume of waste exported to third countries has increased by 75 % to approximately 33 million tonnes/year (13), very often with little or no consideration of how the destination facilities function and treat waste. Waste imported in the EU amounts to 16 million tonnes/year, while 70 million tonnes of waste is traded within the EU. |
| --- | --- |

4.1.

| 4.2. | The EU is part of more than 80 free trade agreements (FTAs), with around 40 pending or being negotiated. The EESC finds it deeply inappropriate that only two of them explicitly mention circular economy (14) and calls for an extended focus on strengthening the sustainable development chapters in all existing and future FTAs and ensuring their effective implementation. |
| --- | --- |

4.2.

| 4.3. | The relatively recent plastic waste trade restrictions imposed by China, India, Thailand, Vietnam and Malaysia have brought to light the overdependence of the EU on foreign waste treatment. The unacceptable reliance on waste exports makes the EU economy vulnerable to disruptions in supply chains. |
| --- | --- |

4.3.

| 4.4. | Exports of waste should respect full transparency rules and provide publicly available information on the environmentally sound management standards in the country of destination. The EESC welcomes the Commission proposal for third-party audits on external waste facilities and considers that they should include detailed provisions about the environmental footprint and working conditions. For items shipped for reuse, the polluter pays principle should be maintained and the Extended Producer Responsibility fees should follow the product, as they have been paid by consumers to cover the waste stage, independently of where it takes place. Furthermore, the social partners and relevant NGOs should be part of the audit procedures while open data infrastructures must be financed and made available. Complaint mechanisms should be reinforced for NGOs and other relevant stakeholders. |
| --- | --- |

4.4.

| 4.5. | The EESC encourages EU established or authorized auditor (by EU notified bodies, with relevant qualification) to perform audit procedures at facility and country level to ensure that human health, environmental and social standards of EU country are met within waste destination country. More detailed audit procedures are needed to be described as well as monitoring criteria, complaint and sanctions. It is also necessary to describe inputs (volume based and risk based) that can trigger audits. |
| --- | --- |

4.5.

| 4.6. | The Committee encourages SMEs to perform audit procedures for facilities in third countries through Producer Responsibility Organisations (PRO), as it should lower the financial burden for such operations. Health and safety and working conditions must be well protected and monitored. Investments in training and know-how for workers should be covered by a specific allocation under the ESF+. |
| --- | --- |

4.6.

| 4.7. | The EESC acknowledges that authorities and economic operators need some adjustment time to apply and comply with the new rules. However, the EESC considers that the proposed 3-year deadline after the entry into force of the Regulation is lacking ambition and would like to call for a maximum two-year transition period. |
| --- | --- |

4.7.

| 4.8. | The European Commission has proposed a 30-day time limit for the competent authorities of transit to raise valid objections for a planned shipment for recovery. The EESC considers that the deadline should be reduced to 10 days in order to ensure operability and avoid unnecessary delays. Furthermore, the EESC calls for a clear restriction on these authorities to prevent them from objecting to the same shipment more than once. |
| --- | --- |

4.8.

| 4.9. | The Committee calls for the extension of the EDI system to all waste shipments destined for export, import and transit. It is the only way to ensure the traceability and transparency of these processes, in such a way that they follow the same rules as for internal shipments. The Commission and Member States have to make every effort to have this system in place as soon as possible, even before the two-year deadline proposed. For that, the EESC calls for adequate human and technical resources. |
| --- | --- |

4.9.

| 4.10. | The fact that certain destination countries may be exempt from having to demonstrate the extent to which they meet key human health and environmental conditions, just because they are members of the OECD, is contrary to the spirit of the reform and could undermine the whole system. The EESC requests that, for waste export purposes, OECD and non-OECD member countries should meet the same strict criteria regarding environmental commitments as are set in the EU. Furthermore, the EESC calls for proof of evidence that all the receiving countries are already managing their own domestic waste in an environmentally sound manner that is similar to the EU practice and respecting the ILO core conventions and labour standards. |
| --- | --- |

4.10.

5.   Illegal waste trafficking

| 5.1. | The different enforcement procedures of the 2006 Regulation across Member States have led to an increase in illegal waste shipments activities. The figures are difficult to quantify but it is believed that 30 % of all waste shipments in Europe are illicit and worth some EUR 9,5 billion annually (15). |
| --- | --- |

5.1.

| 5.2. | The stakeholder consultation has revealed strong support for the reinforcement of the procedures to combat illegal shipment of waste. Strengthened control of waste exports, imports and in transit is necessary for combating environmental crime and fighting illegal trafficking. The EESC welcomes and supports the enforcement of the inspection and investigation procedures and calls for full cooperation between Member States and with the Union, in line with the new EU Strategy to tackle Organised Crime 2021-2025 (16). The involvement of OLAF can make up for the human resources deficit in some Member States and ensure a more effective collaboration framework. |
| --- | --- |

5.2.

| 5.3. | Waste trafficking remains one of most serious environmental crimes and is considered a high-profit and low-risk activity, with devastating consequences for human health and the environment. The European Court of Auditors has noted that the detection of illegal cases of identified waste trafficking remains low and that the prosecution rate is below other types of crime, while the sanctions applied are not proportional and dissuasive (17). This is mainly because the waste shipment chains are very complex and proving that those involved were aware about the illegal activity is difficult, especially since waste can change owners and countries several times before it is illegally disposed. |
| --- | --- |

5.3.

| 5.4. | Industrial stakeholders and NGOs have the capacity to follow and report on possible illegal waste shipments, once they have access to data. The EESC therefore calls for non-confidential data to be made available to all interested parties, including social partners, non-governmental organisations, municipalities and citizens. The EESC believes that comprehensive collection of data and enhanced transparency will lead to enhanced control and a reduction in illegal waste shipments. |
| --- | --- |

5.4.

| 5.5. | However, the EESC considers that there should be a clear distinction between the identified illegal traffickers and the operators which have been found guilty of a human documentation error, especially relating to Annex VII (18), as it was the case in the past. The EESC calls for a harmonised penalty system that is effective and proportionate to the infringement. |
| --- | --- |

5.5.

6.   Final Remarks

| 6.1. | It should be clear to all now that we are producing too much waste, which is complemented by the lack of new natural resources. The EESC calls for a regulatory framework that incentivises the use of recycled materials, which in turn will contribute to lower carbon emissions and prevent valuable waste from ending up in landfills. Using waste as a resource is at the core of the Circular Economy Action Plan and the EESC has already stated that ‘in order to decouple economic development from the consumption of natural resources and environmental impacts, the EU needs to set itself more ambitious targets’ (19). |
| --- | --- |

6.1.

| 6.2. | In line with the circular economy principles, the Committee calls for legislative proposals to incentivise manufacturing companies to design their products in such a way that they are fit for reuse and recycling and embrace the development of circular business models. European and national strategies and legislative frameworks that incentivise this transition, and fight premature obsolescence of the products, have to be designed, involving the social partners, SME representatives and civil society organisations. Circular economy transition means, on the one hand, keeping the value of the products in the economy for longer and, on the other, increasing the use of secondary raw materials. Therefore, facilitating access to innovative solutions for transforming waste into secondary raw materials is of paramount importance and must be promoted through online platforms (such as the European Circular Economy Stakeholder Platform) and best practice sharing. |
| --- | --- |

6.2.

| 6.3. | The EESC considers that the introduction of the EDI is entirely necessary and in line with the EU Digital Strategy (20) and calls for swift implementation, as it can reduce economic losses for companies, ensure more rapid procedures and quality monitoring. The EESC also believes that the electronic system will add transparency and increase efficiency, ensure better data traceability, provide the framework for intense cooperation between Member States and encourage the development of robust waste markets. It further suggests the use of modern technologies for transport monitoring (IoT and satellites) and blockchain technology for data security purposes. |
| --- | --- |

6.3.

| 6.4. | A clear distinction must be made between waste shipments for reuse and recycling and shipments for lower forms of recovery, like incineration. It is absolutely essential to have, from the start, the right tools to investigate and clear criteria that prohibit waste shipments under false pretexts. |
| --- | --- |

6.4.

| 6.5. | The Committee invites the European Commission to assess the possibility of establishing a Market Observatory for secondary raw materials that can analyse and recommend sectoral development policies and ways to eliminate the existing bottlenecks. The Observatory should include all relevant European stakeholders and have a consultative role for the Commission. |
| --- | --- |

6.5.

| 6.6. | Finally, the EESC considers that the European Commission should perform a thorough impact assessment of the implementation of the Regulation five years after its entry into force. |
| --- | --- |

6.6.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

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(1)  https://circulareconomy.europa.eu/platform/en

1

(2)  OECD (2018), Global Material Resources Outlook to 2060.

2

(3)  World Bank: A Global Snapshot of Solid Waste Management to 2050.

3

(4)  The Institute for European Environmental policy: EU circular economy and trade.

4

(5)  Eurostat — Circular Economy in the EU.

5

(6)  OJ L 330, 10.12.2013, p. 1.

6

(7)  OJ L 249, 31.7.2020, p. 33.

7

(8)  OJ L 190, 12.7.2006, p. 1.

8

(9)  European Parliament: Waste Shipment Regulation Revision of Regulation (EC) No 1013/2006 on shipments of waste.

9

(10)  EESC Opinion on Critical Raw Materials Resilience (OJ C 220, 9.6.2021, p. 118).

10

(11)  COM/2019/640 final.

11

(12)  COM/2020/98 final.

12

(13)  Communication: Our waste, our responsibility.

13

(14)  The FTAs with Mexico and New Zealand.

14

(15)  Questions and Answers on new EU rules on waste shipments.

15

(16)  EU Strategy to tackle Organised Crime 2021-2025.

16

(17)  Review No 4/2020: EU action to tackle the issue of plastic waste.

17

(18)  Annex VII — Information accompanying shipments of waste.

18

(19)  EESC opinion on Implementation of EU environmental legislation: air quality, water and waste (OJ C 110, 22.3.2019).

19

(20)  The European Digital Strategy — Shaping Europe's digital future.

20

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/101 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/101

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Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: ‘Fit for 55’: delivering the EU’s 2030 Climate Target on the way to climate neutrality

[COM(2021) 550 final]

(2022/C 275/16)

| Rapporteurs: | Cillian LOHAN and Stefano MALLIA |
| --- | --- |

Rapporteurs:

Cillian LOHAN and Stefano MALLIA

| Referral | European Commission, 13.9.2021 |
| --- | --- |
| Legal basis | Articles 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Agriculture, Rural Development and the Environment |
| Adopted in section | 9.2.2022 |
| Adopted at plenary | 24.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 198/2/6 |

Referral

European Commission, 13.9.2021

Legal basis

Articles 304 of the Treaty on the Functioning of the European Union

Section responsible

Section for Agriculture, Rural Development and the Environment

Adopted in section

9.2.2022

Adopted at plenary

24.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

198/2/6

1.   Conclusions and recommendations

| 1.1. | In transiting towards a climate neutral society, we need to embark on a model that results in a thriving economy. If we want the EU to be a frontrunner and be emulated by the rest of the world, we should aim at shaping the most successful model — one that is just and sustainable from an economic, social and environmental viewpoint. Adopting a model which does not lead to growth based on Sustainable Development, would only isolate us in the international area, paving the way for other global competitors to take leadership. EU climate diplomacy will play an important role in promoting the European approach and in ensuring fair competition between the EU and competing continents. |
| --- | --- |

1.1.

| 1.2. | Reaching the revised 2030 targets, as proposed in the Fit for 55 package, will unevenly impact sectors, regions, communities and individual people across Europe. To address those concerns, the EESC recommends that the European Commission should undertake a granular mapping and analysis of the impacts the transition will have on employment and skills in the different countries, regions and sectors, including on subcontractors and the downstream value chains. There is no one-size-fits-all, therefore measures aimed at driving the transition will have to be tailor-made reflecting the different realities across Europe, bearing in mind the need for a level-playing field and the different starting points of Member States. |
| --- | --- |

1.2.

| 1.3. | The EU Institutions should develop additional proposals to mobilise massive public and private investments at European and national levels to support the transition in those sectors and regions that will need to be radically transformed to reduce their GHG emissions. In this regard the EESC is of the firm view that the size and scope of the Just Transition Fund should be significantly increased to match the challenges at stake. |
| --- | --- |

1.3.

| 1.4. | The EESC calls on the EU Institutions and Member States to propose a new governance framework to anticipate and manage changes related to the green transition in the world of work. It should also encourage Member States to create tripartite ‘Just Transition Commissions’ to allow regional authorities, social partners and civil society organisations to participate in the implementation of the national and regional Just Transition plans. |
| --- | --- |

1.4.

| 1.5. | The EESC is of the opinion that the EU should work towards the objective of climate neutrality (net-zero greenhouse gas emissions), while ensuring competitiveness and security of energy supply at affordable cost for businesses and citizens. Ensuring European competitiveness should go hand in hand with ensuring that EU competitors adhere to the highest environmental and social standards. Strengthening carbon leakage protection against third country imports is essential to ensure environmental integrity as well as social acceptance of EU climate policy. |
| --- | --- |

1.5.

| 1.6. | The EU regulatory framework needs to ensure that the most competitive businesses in the coming decades will be the frontrunners in sustainable and low carbon business models. The EESC is therefore of the firm opinion that regulations should pave the way for the development and market uptake of new technologies, including demand-side measures to create lead markets and incentivise consumption of low carbon products. Furthermore, all legislative proposals put forward within the framework of Fit for 55 should undergo a competitiveness check in line with SDG principles so that the full implications on enterprise are well understood. |
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1.6.

| 1.7. | The EESC firmly believes that specific attention must be given to the economic sectors where there is a strong participation of MSMEs. MSMEs have the potential to accelerate innovation in products and solutions to decarbonise the European economy. |
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1.7.

| 1.8. | There is a strong need for policy coherence, recognising the interlinked nature of the climate and biodiversity crises. Reductions in energy and material consumption, as per Circular Economy, will complement new technologies. Sectoral strategies and funding models should reflect Fit for 55, for example ensuring landowners/land managers/farmers are compensated for natural carbon storage in soils and that environmentally damaging subsidies are stopped. |
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1.8.

| 1.9. | It is essential to clearly and honestly communicate the costs and the benefits for taking the drastic and extensive actions needed to reach climate neutrality for 2050. These changes will affect all sectors and regions and the benefits may not be immediately felt. Ensuring broad support will require an unprecedented level of understanding and engagement from all members of society. |
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1.9.

2.   Reason for and structure of this opinion

| 2.1. | The objective of this opinion is to provide the EESC’s overall perspective on the Fit for 55 package proposed by the Commission on 14 December. It stresses the need for the package to deliver a socially fair, competitive and green transition. The EESC will provide specific opinions for all relevant legislative proposals of the package. |
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2.1.

| 2.2. | The EESC insists that the Fit for 55 package needs to be linked to the UN 2030 Agenda and the Sustainable Development Goals that the EESC has supported in earlier opinions. The SDGs are especially useful as they are global and cover not only the pressing climate issue behind the Commission package but also other necessary goals for economic and social sustainability that have to be fulfilled for the package to be successful. The opinion below is therefore presented along the lines of the three main aims of the UN SDGs. |
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2.2.

3.   Core principles — Specific views of the EESC on the Commission document

A socially fair transition

| 3.1. | In its resolution on the Conference on the Future of Europe, the EESC proposed ‘a new narrative for Europe that ties Europe’s distant and recent past to the present, and provides a vision for the future built on cooperation across borders, strengthening the links between the people of Europe, and rooted in values of solidarity, social justice, inter-generational cooperation, gender equality, sustainable prosperity, and just green and digital transitions. It is imperative to leverage public support for these values, in order to re-think our growth and governance models towards sustainability, build a more equal society and place civil society organisations at the centre of this reconstruction and recovery’ (1). The EESC strongly believes that a well-designed implementation of the Fit for 55 package will contribute to making this new narrative a reality. |
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3.1.

| 3.2. | The EESC has also stated that focus is needed on a fair and sustainable recovery from the COVID-19 crisis that paves the way to a more inclusive society, builds long-term competitiveness and creates an environment of collaboration, taking full account of the intertwined social, economic, democratic, demographic and climate crises in EU Member States, the necessity for green and digital transitions, as well as the longer term structural changes being triggered by the pandemic (2). The ultimate goal of the EU must be to strengthen our social market economic model, where a sustainable, competitive economy and well developed social policies go hand in hand. Following from this, achieving the European Green Deal — that the EESC has welcomed since its very beginning — is the way forward. The Green Deal is the new European growth strategy, with prosperity, sustainability and social justice at its heart. Delivering a just transition to a climate neutral way of life, fostering quality jobs and promoting sustainable entrepreneurship and innovation, including the circular economy and social economy, will be key for a prospering Europe (3). |
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3.2.

| 3.3. | The Fit for 55 package is a stepping stone towards a net-zero European economy by 2050. Such a transition will require a thorough reassessment of the way we live, work and behave. Bearing in mind that there is no one size that fits all, measures to drive the transition will have to be tailor-made reflecting different realities across Europe, bearing in mind the need for a level playing field and the different starting points of Member States. |
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3.3.

| 3.4. | Reaching the revised 2030 targets, as proposed in the Fit for 55 package, will unevenly impact sectors, regions, communities and individual people across Europe. It is indeed clear that the rapid shift towards a decarbonised economy will entail massive challenges for citizens, workers, companies and regions, especially those that are the most reliant on carbon-intensive sectors and industries. It is also worth noting that Member States at the periphery also face significant challenges in the transition away from carbon. If those challenges are not sufficiently addressed, this could result in increased inequalities and lead to massive restructuring processes, unemployment and deindustrialisation of territories, lands and environments. This could create a lack of social acceptance and political backlash from EU citizens against the European Green Deal agenda. |
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3.4.

| 3.5. | To address those concerns, the EESC calls on the European Commission to propose additional policy measures to strengthen the social and labour dimension of the European Green Deal. At the moment, the Commission’s legislative proposals are indeed designed with the ambition of achieving the 2030 climate target — which is absolutely needed — but fall short of sufficient measures to ensure a just transition for European workers and low-income households. To be socially acceptable, the climate ambition proposed in the package should be matched by an equivalent social ambition, in line with the recent Porto Declarations made by the EU Council, the European Pillar of Social Rights and the ILO Guidelines for a Just Transition. |
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3.5.

| 3.6. | More concretely, to reinforce the social dimension of the package, the EESC calls on EU Institutions to: |
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3.6.

| 3.6.1. | Make a granular mapping and analysis of the impacts the transition will have on employment and skills in the different countries, regions and sectors, including on subcontractors and the downstream value chains. An analysis of the impact on public finances, trade flows and consumers is also required. Such granular mapping would complement the overall perspective of previous impact assessments made by the Commission and would provide the necessary knowledge to develop adequate employment, social and territorial policies. |
| --- | --- |

3.6.1.

| 3.6.2. | Develop additional proposals to mobilise massive public and private investments at European and national levels to support the transition in those sectors and regions that will need to be radically transformed to reduce their GHG emissions. When advocating for such investments one should also keep in mind Member States with unfavourable economies of scale, connectivity challenges and low emission mitigation potential. In that regard, the size and scope of the Just Transition Fund should be significantly increased to match the challenge at stake. |
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3.6.2.

| 3.6.3. | Ensure that National Energy and Climate Plans contain just transition strategies. In the 2023 update of their National Energy and Climate Plans (NECP), Member States should be required to systematically identify the social challenges expected from the Fit for 55 package as well as the detailed measures and resources that will be necessary to manage them. Such just transition strategies will be needed to accompany workers in their transition, to ensure adequate training, reskilling and upskilling as well as to assist in the creation of alternative quality jobs in the same regions. When developing skills strategies and active labour market strategies, social partners and civil society organisations should be properly involved through social dialogue and civil society platforms. |
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3.6.3.

| 3.6.4. | Propose a new governance framework to anticipate and manage changes related to the green transition in the world of work. Such a framework should guarantee workers’ right to information and consultation when it comes to the development of just transition plans in their workplaces and regions. Based on the enforcement of existing rights, the framework should also strengthen social dialogue as well as the wider dialogue with civil society. |
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3.6.4.

| 3.6.5. | Guarantee the proper involvement of existing European social dialogue structures — such as the Tripartite Social Summit, Sectoral Social Dialogue Committees or European Works Councils — in the development and monitoring of European Green Deal policies and the development of transition pathways for industrial ecosystems and recovery plans. |
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3.6.5.

| 3.6.6. | Encourage Member States to create tripartite Just Transition Commissions to allow regional authorities, social partners and civil society organisations to provide recommendations and to negotiate national and regional just transition plans. The input of the Member States, regions, social partners and civil society is vital to ensure an adequate response and to give credibility to the commitment that no one should be left behind. |
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3.6.6.

| 3.7. | All citizens will be severely impacted by future climate policies, especially when it comes to carbon pricing mechanisms. It is clear that meeting the 2030 targets will come at a cost, especially those with the lowest income. Such costs will have to be properly explained. Special/social measures will have to be put in place to protect and support the most vulnerable citizens, as they will be the most exposed to the impact of additional costs. Such measures will be key to ensuring the buy-in from citizens necessary for an orderly transition. |
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3.7.

| 3.8. | The EESC has prepared a separate opinion where it welcomed the establishment of the proposed Social Climate Fund in order to mitigate the negative social and economic impacts of the new carbon pricing and in order to provide funds to Member States to support their measures addressing the social impact of this emissions trading on financially weaker households, micro-enterprises and transport users. As indicated in that opinion (TEN/759), the EESC calls on Member States to exploit the synergies of the Social Climate Fund with other available financial resources and to use it in the most efficient way (4). |
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3.8.

| 3.9. | At the same time, the EESC notes that market-based mechanisms are capable of setting the Union firmly on the path to long-term sustainable change assuring economic development while balancing social and environmental needs at the time of transition. These will need to be accompanied by cultural and behavioural changes and systemic changes in sectoral practices, and environmentally damaging subsidies must stop (5). |
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3.9.

| 3.10. | The EESC also recalls that the major challenges we all face and the profound transitions in our economy, in how we deal with nature and the environment, and in our own lives, which are necessary for a truly sustainable world, will only succeed if citizens, workers and their organisations are actively involved (6). |
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3.10.

A competitive transition

| 3.11. | The business community fully embraces the challenge of climate change and is ready to undertake the required steps towards achieving the 55 % reduction target. The private sector is ready to do its part, to invest massively in the required infrastructure and technologies and create the good quality jobs. All this however requires predictable regulatory investment framework. All legislative proposals put forward within the framework of Fit for 55 should undergo a competitiveness check in line with SDG principles so that the full implications on enterprise are well understood. |
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3.11.

| 3.12. | The Green Deal provides us with a unique opportunity to build a stronger and more sustainable future and Europe’s enterprises must be an integral part of all solutions moving forward. The EU should work towards the objective of climate neutrality (net-zero greenhouse gas emissions), while ensuring competitiveness and security of energy supply at an affordable cost for businesses and citizens. |
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3.12.

| 3.13. | Ensuring European competitiveness should go hand in hand with ensuring that competitors both inside and outside of the EU adhere to the highest environmental and social standards. This should also be reflected in trade deals between the EU and third countries. The regulatory framework needs to ensure that the most competitive businesses in the coming decades will be the frontrunners in sustainable and low carbon business models. Ensuring competitiveness should not be misinterpreted as an excuse for operating at the lowest common denominator in terms of green standards, in a global market. Indeed, a coherent strategy for increasing the export of low carbon goods and services from within the EU to third countries is important. |
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3.13.

| 3.14. | Yet, in the short term, low carbon technologies require massive capital investment and, in most cases, entail higher financial operating costs and technological risks than traditional ones. The early adopters of the new business models should be supported in order to ensure their innovation does not come at a competitive disadvantage. Support must respect the principles of equitable access to SME finance tools and should be based solely on climate objectives. |
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3.14.

| 3.15. | To facilitate the required massive investment in zero-carbon electricity there is a need for visibility vis-à-vis long-term market signals and instruments. One of the biggest bottlenecks to the deployment of renewable energy projects is the lengthy and complex permitting procedures. The EESC strongly supports the Commission’s efforts in this direction. |
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3.15.

| 3.16. | Investment decisions to meet the 2030 targets will have to be made in the very imminent future, at a time where the European economy is still recovering from the economic crisis induced by the COVID-19 pandemic. It is therefore essential that the EU finds the right equilibrium between the Green Deal and the Recovery and Resilience Fund to drive investments in future-oriented technology and practices. EU policy makers should also make sure that the Fit for 55 package and NextGenerationEU are used to create new quality jobs and tap into the employment potential of the strategic sectors of the green transition. |
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3.16.

| 3.17. | The legislative proposals need to ensure that GHG emission reductions are achieved by stimulating transformational investments in Europe. This would strengthen European leadership in international negotiations on climate change. |
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3.17.

| 3.18. | The EU and national industrial policies should address the challenges linked to the decarbonisation effort. We need to assist industry and workers in the low-carbon transition, particularly in the so-called hard to abate sectors exposed to international competition, such as energy-intensive industries or agriculture. Measures should therefore be put in place to effectively prevent the risk of displacing production and importing carbon-intensive goods. In the absence of equivalent commitments from third countries, higher EU climate ambition requires strengthened carbon leakage protection, not only to preserve industrial competitiveness and fight against unfair competition, but also to ensure environmental integrity as well as the social acceptance of EU climate policy. |
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3.18.

| 3.19. | As stated earlier, just transition strategies should be developed — through social dialogue — to ensure adequate reskilling of the workers in impacted sectors as well as job-to-job transitions. During that process, it will be essential to guarantee adequate social protection and well-functioning public services to support and accompany workers in transition. |
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3.19.

| 3.20. | Specific attention should also be given to the economic sectors where there is a strong participation of SMEs. SMEs have the potential to accelerate innovation in products and solutions to decarbonise the European economy. At the same time, they need support in accessing technologies to decarbonise their production, processing, remanufacturing and distribution processes. |
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3.20.

| 3.21. | Although the EU is responsible for 8 % of all emissions, it has rightly taken the lead in undertaking action to achieve a climate-neutral economy by 2050. In doing this, we must ensure that the model that is developed is a successful one which allows companies to grow and create quality jobs, society to prosper and the environment to recover. A successful model will guarantee a global leadership role for the EU whilst a partially successful model will mean that we would have to follow the lead of others such as the USA or China. The EESC strongly believes that the EU has considerable technical expertise which allows Europe to take the industrial leadership in the Green Economy. External EU action or climate diplomacy will play an important role in promoting high environmental standards in the world market. |
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3.21.

| 3.22. | Europe needs to capitalise on its current position as front-runner on climate change by acting as an innovation catalyser. Even greater efforts and resources should be placed in supporting research, development and deployment programmes both at European and at national level without picking winners at a too early stage as the range of technologies and energy sources to support the low-carbon transition is broad. To this end, it would be reasonable to analyse the current system of education and research funding to propose solutions that would allow Europe to compete more effectively with America and Asia. |
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3.22.

| 3.23. | Access to low-carbon energy sources such as electricity and hydrogen at globally competitive prices is essential for the successful transformation of manufacturing industry. This needs a supportive legal framework and a timely development of adequate infrastructure. |
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3.23.

| 3.24. | As pointed out by the International Energy Agency, most of the global reductions in CO2 emissions through 2030 come from technologies readily available today. But in 2050, almost half the reductions would have to come from technologies that are currently at the demonstration or prototype phase. In heavy industry and long-distance transport, the share of emissions reductions from technologies that are still under development today is even higher. Therefore, it is crucial that regulations pave the way for the development and market uptake of new technologies. |
| --- | --- |

3.24.

| 3.25. | At least in the initial phase of the transition, demand-side measures will also be necessary to create lead markets and incentivise consumption of low-carbon products, since they are usually less cost competitive than traditional ones. |
| --- | --- |

3.25.

| 3.26. | The EESC underlines that the green transition can only succeed if the EU has the skilled workforce it needs to stay competitive. At the same time the EESC is calling on the Commission to update the Fit for 55 impact assessments already carried out to ensure they contain the most recent and relevant data and provide the most accurate picture possible of the impacts involved. |
| --- | --- |

3.26.

A green transition

| 3.27. | The twin crises of climate and biodiversity must be tackled together. Climate solutions that negatively impact biodiversity and habitats are not acceptable as part of a package that is designed to achieve emissions reductions. The Fit for 55 package needs to be linked to the UN Sustainable Development Goals and coherent with the already agreed commitments in Agenda 2030 and with the European Pillar of Social Rights. |
| --- | --- |

3.27.

| 3.28. | The nine planetary boundaries (7) identified by scientists must be a guiding principle in monitoring the impact of human activity, economic policies, and climate actions. |
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3.28.

| 3.29. | Restoring nature and assisting the urgent recovery of biodiversity must form part of the legislative aquis to ensure a green transition and be at the centre of the forthcoming EU Nature Restoration Law. Protection and maintenance of existing biodiversity rich habitats should not be overlooked. |
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3.29.

| 3.30. | The use of natural ecosystems to capture and store carbon should be coupled with appropriate public finance in the form of subsidies as well as new green business models and it is important that the appropriate landowner/land manager/farmer is the recipient of these funds. Carbon storage, and biodiversity protection and recovery are public goods. This principle needs to be reflected in the forthcoming Carbon Farming Initiative. |
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3.30.

A Soil Directive proposal should follow urgently from the publication of a New Soil Strategy. A focus on soil is critical for biodiversity and natural carbon storage.

Ensuring the transition is achieved with mechanisms that promote broad acceptance and support by the general public

| 3.31. | It is vital that citizens and stakeholder groups are supported in being mobilised to be an active part of the transition to a low carbon society. The fears and concerns around the challenges of transitioning can be alleviated through engaging with stakeholders of all kinds. A coordinated Climate Diplomacy Initiative should be launched, to include a Civil Society Climate Diplomacy Network. |
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3.31.

| 3.32. | National, Member State-specific distributional mechanisms for the Social Climate Fund should be clearly identified, with a consultation process, to ensure the costs of transitioning are evenly distributed, and financial supports reach those who most need them. The EESC, with its network of approximately 100 million citizens, could play a role in facilitating the design of these mechanisms. |
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3.32.

| 3.33. | Clear messaging around the benefits of reducing dependency on imported fossil fuels, and the multi-faceted benefits of a net-zero carbon society should be coherently communicated to combat false narratives that aggravate populist agendas. |
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3.33.

| 3.34. | Implementation of Fit for 55 requires strong governance structures to include all stakeholders in the design of adaptation measures. It must be recognised as an intergenerational challenge, and must be taken as an opportunity to address gender imbalances in the workplace, in earnings, and in opportunities. |
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3.34.

| 3.35. | Clear direction on the distribution of targets is important. The strict commitments such as those bound in Climate Law should identify who has to do what, a sector-by-sector binding target set at national level. |
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3.35.

| 3.36. | A go-to space should be created that streamlines and identifies funding streams for industry and SMEs to facilitate the mobilisation of funding. |
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3.36.

Brussels, 24 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

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(1)  A New Narrative for Europe — The EESC resolution on the Conference on the Future of Europe, point 2.1 (OJ C 286, 16.7.2021, p. 1).

1

(2)  A New Narrative for Europe — The EESC resolution on the Conference on the Future of Europe, point 2.1 (OJ C 286, 16.7.2021, p. 1).

2

(3)  A New Narrative for Europe — The EESC resolution on the Conference on the Future of Europe, point 2.4 (OJ C 286, 16.7.2021, p. 1).

3

(4)  TEN/759 Social Climate Fund, EESC opinion adopted in the EESC Plenary of 8-9 December 2021, points 1.1 and 1.2 (OJ C 152, 6.4.2022, p. 158).

4

(5)  The International Monetary Fund has made a calculation on direct and indirect fossil fuel subsidies worldwide (published in September 2021), which is approximately USD 6 trillion each year.

5

(6)  Resolution — European Economic and Social Committee’s contribution to the 2022 European Commission’s work programme based on the work of the Ad hoc group on the ‘EESC contribution to the European Commission’s 2022 work programme’, point 1.5 (OJ C 341, 24.8.2021, p. 1).

6

Resolution — European Economic and Social Committee’s contribution to the 2022 European Commission’s work programme

(7)  https://www.stockholmresilience.org/research/planetary-boundaries/the-nine-planetary-boundaries.html.

7

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| 18.7.2022 | EN | Official Journal of the European Union | C 275/108 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/108

---

Opinion of the European Economic and Social Committee on Proposal for a Council Directive amending Directive 2008/118/EC and Directive (EU) 2020/262 (recast) as regards tax-free shops situated in the French terminal of the Channel Tunnel

[COM(2021) 817 final — 2021/0418 (CNS)]

(2022/C 275/17)

| Referral | Council of the European Union, 20.1.2022 |
| --- | --- |
| Legal basis | Article 113 of the Treaty on the Functioning of the European Union |
| Section responsible | Economic and Monetary Union and Economic and Social Cohesion |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 214/0/8 |

Referral

Council of the European Union, 20.1.2022

Legal basis

Article 113 of the Treaty on the Functioning of the European Union

Section responsible

Economic and Monetary Union and Economic and Social Cohesion

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

214/0/8

Since the Committee endorses the content of the proposal for a Council Directive amending Directive 2008/118/EC and Directive (EU) 2020/262 (recast) as regards tax-free shops situated in the French terminal of the Channel Tunnel and feels that it requires no comment on its part, it decided, at its 567th plenary session of 23 and 24 February 2022, (meeting of 23 February), by 214 votes with 8 abstentions, to issue an opinion endorsing the proposed text.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

| 18.7.2022 | EN | Official Journal of the European Union | C 275/109 |
| --- | --- | --- | --- |

18.7.2022

EN

Official Journal of the European Union

C 275/109

---

Opinion — European Economic and Social Committee — Proposal for a Directive of the European Parliament and of the Council laying down for certain road vehicles circulating within the Union the maximum authorised dimensions in national and international traffic and the maximum authorised weights in international traffic (codification)

[COM(2021) 769 final – 2021/0400 (COD)]

(2022/C 275/18)

| Referral | European Parliament, 13.12.2021
  Council of the European Union, 17.12.2021 |
| --- | --- |
| Legal basis | Articles 91 and 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Transport, Energy, Infrastructure and the Information Society |
| Adopted at plenary | 23.2.2022 |
| Plenary session No | 567 |
| Outcome of vote
  (for/against/abstentions) | 214/1/6 |

Referral

European Parliament, 13.12.2021

Council of the European Union, 17.12.2021

Legal basis

Articles 91 and 304 of the Treaty on the Functioning of the European Union

Section responsible

Transport, Energy, Infrastructure and the Information Society

Adopted at plenary

23.2.2022

Plenary session No

567

Outcome of vote

(for/against/abstentions)

214/1/6

Since the Committee unreservedly endorses the content of the proposal and feels that it requires no comment on its part, it decided, at its 567th plenary session of 23 and 24 February 2022 (meeting of 23 February), by 214 votes to 1 with 6 abstentions, to issue an opinion endorsing the proposed text.

Brussels, 23 February 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

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