# Official Journal C 443/22 N

| | ISSN 1977-091X |
| --- | --- |
| Official Journal
  of the European Union | C 443 |
| | |
| English edition | Information and Notices | Volume 6522 November 2022 |

ISSN 1977-091X

Official Journal

of the European Union

C 443

English edition

Information and Notices

Volume 6522 November 2022

---

| Contents | page |
| --- | --- |
| | I   Resolutions, recommendations and opinions |
| | RESOLUTIONS |
| | European Economic and Social Committee |
| | 571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022 |
| 2022/C 443/01 | Resolution of the European Economic and Social Committee: Contribution to the 2023 European Commission’s work programme | 1 |
| | OPINIONS |
| | European Economic and Social Committee |
| | 571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022 |
| 2022/C 443/02 | Opinion of the European Economic and Social Committee on taxation of cross-border teleworkers and their employers (own-initiative opinion) | 15 |
| 2022/C 443/03 | Opinion of the European Economic and Social Committee on digital identity, data sovereignty and the path to a just digital transition for citizens living in the information society (own-initiative opinion) | 22 |
| 2022/C 443/04 | Opinion of the European Economic and Social Committee: analysis of the role of organised civil society in the new EU-Organisation of African, Caribbean and Pacific States (OACPS) Agreement, including the situation of the EPAs in this framework (own-initiative opinion) | 29 |
| 2022/C 443/05 | Opinion of the European Economic and Social Committee on the new EU-US Trade and Technology Council in action: priorities for business, workers and consumers and necessary safeguards (own-initiative opinion) | 37 |
| 2022/C 443/06 | Opinion of the European Economic and Social Committee on Youth Policy in the Western Balkans, as part of the Innovation Agenda for the Western Balkans (own-initiative opinion) | 44 |
| 2022/C 443/07 | Opinion of the European Economic and Social Committee on the cost of non-Europe — the benefits of the single market (exploratory opinion) | 51 |
| 2022/C 443/08 | Opinion of the European Economic and Social Committee on digital taxation (exploratory opinion requested by the Czech presidency) | 58 |
| 2022/C 443/09 | Opinion of the European Economic and Social Committee on gender equality (Exploratory opinion at the request of the Czech Presidency) | 63 |

Contents

page

I   Resolutions, recommendations and opinions

RESOLUTIONS

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

2022/C 443/01

Resolution of the European Economic and Social Committee: Contribution to the 2023 European Commission’s work programme

1

OPINIONS

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

2022/C 443/02

Opinion of the European Economic and Social Committee on taxation of cross-border teleworkers and their employers (own-initiative opinion)

15

2022/C 443/03

Opinion of the European Economic and Social Committee on digital identity, data sovereignty and the path to a just digital transition for citizens living in the information society (own-initiative opinion)

22

2022/C 443/04

Opinion of the European Economic and Social Committee: analysis of the role of organised civil society in the new EU-Organisation of African, Caribbean and Pacific States (OACPS) Agreement, including the situation of the EPAs in this framework (own-initiative opinion)

29

2022/C 443/05

Opinion of the European Economic and Social Committee on the new EU-US Trade and Technology Council in action: priorities for business, workers and consumers and necessary safeguards (own-initiative opinion)

37

2022/C 443/06

Opinion of the European Economic and Social Committee on Youth Policy in the Western Balkans, as part of the Innovation Agenda for the Western Balkans (own-initiative opinion)

44

2022/C 443/07

Opinion of the European Economic and Social Committee on the cost of non-Europe — the benefits of the single market (exploratory opinion)

51

2022/C 443/08

Opinion of the European Economic and Social Committee on digital taxation (exploratory opinion requested by the Czech presidency)

58

2022/C 443/09

Opinion of the European Economic and Social Committee on gender equality (Exploratory opinion at the request of the Czech Presidency)

63

---

| | III   Preparatory acts |
| --- | --- |
| | European Economic and Social Committee |
| | 571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022 |
| 2022/C 443/10 | Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information (COM(2022) 143 final — 2022/0092 (COD)) | 75 |
| 2022/C 443/11 | Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability, Due Diligence and amending Directive (EU) 2019/1937 (COM(2022) 71 final) | 81 |
| 2022/C 443/12 | Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 909/2014 as regards settlement discipline, cross-border provision of services, supervisory cooperation, provision of banking-type ancillary services and requirements for third-country central securities depositories (COM(2022) 120 final — 2022/0074 (COD)) | 87 |
| 2022/C 443/13 | Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on combating violence against women and domestic violence (COM(2022) 105 final) | 93 |
| 2022/C 443/14 | Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: COVID-19 — Sustaining EU Preparedness and Response: Looking ahead (COM(2022) 190 final) | 101 |
| 2022/C 443/15 | Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU Strategy for Sustainable and Circular Textiles (COM(2022) 141 final) | 106 |
| 2022/C 443/16 | Opinion of the European Economic and Social Committee on the roadmap on security and defence technologies (COM(2022) 61 final) | 112 |
| 2022/C 443/17 | Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council on European Union geographical indications for wine, spirit drinks and agricultural products, and quality schemes for agricultural products, amending Regulations (EU) No 1308/2013, (EU) 2017/1001 and (EU) 2019/787 and repealing Regulation (EU) No 1151/2012 (COM(2022) 134 final — 2022/0089 (COD)) | 116 |
| 2022/C 443/18 | Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: On making sustainable products the norm (COM(2022) 140 final) and on the proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC (COM(2022) 142 final — 2022/0095(COD)) | 123 |
| 2022/C 443/19 | Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) and Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (COM(2022) 156 final — 2022/0104 (COD)) and on the proposal for a Regulation of the European Parliament and of the Council on reporting of environmental data from industrial installations and establishing an Industrial Emissions Portal (COM(2022) 157 final — 2022/0105 (COD)) | 130 |
| 2022/C 443/20 | Opinion of the European Economic and Social Committee on the 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: Security of supply and affordable energy prices: Options for immediate measures and preparing for next winter (COM(2022) 138 final) | 140 |
| 2022/C 443/21 | Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council laying down specific and temporary measures, in view of Russia’s invasion of Ukraine, concerning driver documents issued by Ukraine in accordance with its legislation (COM(2022) 313 final — 2022/0204 (COD)) | 144 |
| 2022/C 443/22 | Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources, Directive 2010/31/EU on the energy performance of buildings and Directive 2012/27/EU on energy efficiency (COM(2022) 222 final) | 145 |

III   Preparatory acts

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

2022/C 443/10

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information (COM(2022) 143 final — 2022/0092 (COD))

(COM(2022) 143 final — 2022/0092 (COD))

75

2022/C 443/11

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability, Due Diligence and amending Directive (EU) 2019/1937 (COM(2022) 71 final)

(COM(2022) 71 final)

81

2022/C 443/12

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 909/2014 as regards settlement discipline, cross-border provision of services, supervisory cooperation, provision of banking-type ancillary services and requirements for third-country central securities depositories (COM(2022) 120 final — 2022/0074 (COD))

(COM(2022) 120 final — 2022/0074 (COD))

87

2022/C 443/13

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on combating violence against women and domestic violence (COM(2022) 105 final)

(COM(2022) 105 final)

93

2022/C 443/14

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: COVID-19 — Sustaining EU Preparedness and Response: Looking ahead (COM(2022) 190 final)

(COM(2022) 190 final)

101

2022/C 443/15

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU Strategy for Sustainable and Circular Textiles (COM(2022) 141 final)

(COM(2022) 141 final)

106

2022/C 443/16

Opinion of the European Economic and Social Committee on the roadmap on security and defence technologies (COM(2022) 61 final)

(COM(2022) 61 final)

112

2022/C 443/17

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council on European Union geographical indications for wine, spirit drinks and agricultural products, and quality schemes for agricultural products, amending Regulations (EU) No 1308/2013, (EU) 2017/1001 and (EU) 2019/787 and repealing Regulation (EU) No 1151/2012 (COM(2022) 134 final — 2022/0089 (COD))

(COM(2022) 134 final — 2022/0089 (COD))

116

2022/C 443/18

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: On making sustainable products the norm (COM(2022) 140 final) and on the proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC (COM(2022) 142 final — 2022/0095(COD))

(COM(2022) 140 final)

(COM(2022) 142 final — 2022/0095(COD))

123

2022/C 443/19

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) and Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (COM(2022) 156 final — 2022/0104 (COD)) and on the proposal for a Regulation of the European Parliament and of the Council on reporting of environmental data from industrial installations and establishing an Industrial Emissions Portal (COM(2022) 157 final — 2022/0105 (COD))

(COM(2022) 156 final — 2022/0104 (COD))

(COM(2022) 157 final — 2022/0105 (COD))

130

2022/C 443/20

Opinion of the European Economic and Social Committee on the 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: Security of supply and affordable energy prices: Options for immediate measures and preparing for next winter (COM(2022) 138 final)

(COM(2022) 138 final)

140

2022/C 443/21

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council laying down specific and temporary measures, in view of Russia’s invasion of Ukraine, concerning driver documents issued by Ukraine in accordance with its legislation (COM(2022) 313 final — 2022/0204 (COD))

(COM(2022) 313 final — 2022/0204 (COD))

144

2022/C 443/22

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources, Directive 2010/31/EU on the energy performance of buildings and Directive 2012/27/EU on energy efficiency (COM(2022) 222 final)

(COM(2022) 222 final)

145

---

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

EN

---

I Resolutions, recommendations and opinions

RESOLUTIONS

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

| 22.11.2022 | EN | Official Journal of the European Union | C 443/1 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/1

---

Resolution of the European Economic and Social Committee: Contribution to the 2023 European Commission’s work programme

(2022/C 443/01)

| Rapporteurs: | Mariya MINCHEVA


  Stefano PALMIERI


  Kinga JOÓ |
| --- | --- |

Rapporteurs:

Mariya MINCHEVA

Stefano PALMIERI

Kinga JOÓ

| Legal basis | Rule 52(4) of the Rules of Procedure |
| --- | --- |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 196/0/0 |

Legal basis

Rule 52(4) of the Rules of Procedure

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

196/0/0

1.   Introduction

| 1.1. | Both the pandemic and the war in Ukraine have shown that it is crucial for the EU to be well prepared for unexpected developments. This highlights the role of foresight activities in identifying any weak signals and outlining various scenarios and thus laying ground for EU policymakers, social partners, and other civil society actors to improve resilience, tackle risks and seize opportunities. The European Economic and Social Committee (EESC) urges that the strategic foresight activities take the geopolitical developments much more prominently into focus, not only in Europe but also beyond (1), including their implications on security, trade, refugees and their integration in the receiving societies. |
| --- | --- |

1.1.

| 1.2. | The pandemic and the war also shed light again on the power and the importance of civil society and their institutions in combatting the consequences of the crises and helping people. The EESC therefore urges the Commission to acknowledge more the importance of civil society and their institutions by providing a prominent place to them in EU policy. |
| --- | --- |

1.2.

| 1.3. | The EU’s global strength derives from its common values, based on democracy, rule of law and its economic and social model. Successive shocks show the importance of building a more resilient European economy and cushion the secondary effects of different crises (inflation, energy and raw material price increases and supply shortages, supply-chain disruptions). Europe needs to reduce dependencies and exposure to unreliable suppliers but at the same time also to build coalitions with like-minded partners and diversify its sources of supply. |
| --- | --- |

1.3.

| 1.4. | Besides energy, Russia and Ukraine have a significant weight in EU imports of metals, which are critical for several strategic industries (2). Both countries are significant exporters of several agricultural products, such as grain and oilseeds. The disruption of exports from these countries has already led to huge global increases in the prices of agricultural commodities. The consequences are felt especially in the world’s poorest countries and the poorest people are the ones who will suffer the most. In this respect, the EESC reiterates its call to accelerate the development of a strategic and technological autonomy for Europe and the need of limiting our dependencies in energy, critical raw materials and food (3). |
| --- | --- |

1.4.

| 1.5. | To avoid drastic economic and social consequences, EU energy policy must be realistic and help to build Energy Union and achieve the climate goals without putting an extra burden on vulnerable consumers and on workers, and without undermining the competitiveness of European businesses. The EU has to work towards its ambitious climate objectives, while ensuring the stability and security of energy supply at a cost that is affordable to businesses and citizens. |
| --- | --- |

1.5.

| 1.6. | European societies were already severely hit by the pandemic, and this crisis is yet another massive shock mostly felt by the most vulnerable in our societies. Solidarity and social convergence must also be guiding lines in the coming EU policies: the response to war in Ukraine will come at a price for everyone, and we must make sure these burdens are shared in a fair manner. EC could pursue further discussions with Member States on possible long-term tools, i.e. Unemployment Reinsurance Schemes, to address systemic problems only worsened by the ongoing crisis. The effects and possible further use of the SURE Mechanism should be explored and discussed also with social partners. |
| --- | --- |

1.6.

| 1.7. | The EESC invites the EC to keep better regulation as a priority and calls on the Commission and the EU legislators to consistently deepen and advance the EU better regulation system in all its aspects and systematically use the tools and guidelines for better regulation in their work. To that end, the EESC encourages the Commission to continue to promote the principles and tools of better regulation across all its services. |
| --- | --- |

1.7.

| 1.8. | The approach of sustainable development should be adopted as an overarching and integral objective of all policies, programs and measures. To boost recovery from the crises, the Commission and Member States should identify and strive for policies and initiatives that bring about economic, social and environmental benefits simultaneously, i.e. strengthen the business environment, improve working and living conditions, and facilitate the transition towards a climate-neutral and circular economy. |
| --- | --- |

1.8.

| 1.9. | The EU’s recovery and resilience with respect to crises is intrinsically dependent on sustainable growth, social convergence, a favourable business environment and positive development of employment and employment conditions, in line with the European Green Deal, the European Pillar of Social Rights and its Action Plan and the Sustainable Development Goals. Any policy measures taken must strive to foster sustainable business, entrepreneurship and job creation, as well as improved working and living conditions. |
| --- | --- |

1.9.

| 1.10. | Despite urgent problems, it is vital not to lose sight of the EU’s fundamentals such as effective implementation of the single market, nor of long-term needs, such as climate neutrality by 2050, and combating poverty and social exclusion to ensure a successful future for citizens and businesses. The Commission should therefore continue facilitating and encouraging investment in research and innovation, with due account of increasing needs to find solutions and improve resilience against geo-economic, societal, health and environmental risks. |
| --- | --- |

1.10.

| 1.11. | On top of strengthening the internal market and decreasing critical dependencies, achieving a stronger position in the world also requires success of exports. The Commission should explore how to increase the competitiveness of European businesses in general and, in particular, facilitate a stronger position of EU companies in the global markets of technologies, products and solutions responding to global megatrends and challenges such as climate change. It must also strengthen the capacity of its health sector, in terms of improved research and methodologies to manage the increasing demands of care as well as possible future pandemics. This must include supporting the development and the international promotion of standards by European businesses and innovators, because standards create markets. |
| --- | --- |

1.11.

| 1.12. | Reaching a stronger global role for the EU requires solid unity and joint efforts of the Member States. The Commission should build on the unity achieved during the crises and find ways of enhancing the EU’s recovery and longer-term competitiveness and the wellbeing of citizens in a way that increasingly relies on innovation and skills, rather than on state aid or barriers on trade and cooperation. In its relations with the wider world, the Union should continue to contribute to the eradication of poverty and the protection of human rights. |
| --- | --- |

1.12.

2.   The European Green Deal

| 2.1. | The EESC has supported the implementation of the European Green Deal (EGD) and pointed out that it needs to take place in a socially fair way, under the conditions of ensuring a European food security as well as security of energy supply at affordable price. This applies, among others, to the Fit for 55 package, which will unevenly impact sectors, businesses, regions, communities, and individuals across Europe. The EESC insists that the active involvement of social partners and relevant civil society organisations is important both in the planning and in the implementation phases. It is vital to support citizens and stakeholder groups in their mobilisation to participate actively in the transition to a low-carbon society. |
| --- | --- |

2.1.

| 2.2. | The EESC notes that initiatives relating to the EGD must be complementary and mutually reinforcing across the areas of climate, energy, transport, buildings, industry, forestry and food systems, to reach a competitive, fair, climate-neutral and circular EU economy. The EESC also calls for an improved complementarity between the green and digital transitions. |
| --- | --- |

2.2.

| 2.3. | To monitor the progress in the transition to economically, socially, and environmentally sustainable growth in line with the EGD, the EESC calls for the development of a set of proper indicators ‘beyond GDP’. A concise ‘Beyond GDP’ scoreboard should be designed and incorporated into the EGD scoreboard and the European economic governance process. It must also inform policy development, improve communication and promote target setting. |
| --- | --- |

2.3.

| 2.4. | The EESC supports the aim of the European Taxonomy for Sustainable Activities (‘EU taxonomy’) to direct investments towards sustainable projects and activities. To this end, the Commission has drawn up a set of rules to determine what can be called environmentally (green) investments. The EESC calls for developing the taxonomy in a way that take into account societal needs such as the security of supply of energy and essential raw materials and commodities, and also focus more on social sustainability aspects such as labour and human rights, while respecting Member States’ competences and various industrial relations systems and the feasibility of an objective assessment in the context of access to finance. From the start, the EESC has argued that the Green Deal can and will only be successful if it is also a social deal. Regarding the social aspects of taxonomy, the EESC is currently working on an own-initiative opinion on ‘Social taxonomy — challenges and opportunities’. The taxonomy should also be used in the context of the EU Green Bond standard. The EESC finds it important to align taxonomies internationally in the framework of the International Platform on Sustainable Finance. |
| --- | --- |

2.4.

| 2.5. | To address the social and labour concerns of the EGD, the EESC calls for the Commission to propose additional policy measures to strengthen the social and labour dimension of the EGD, matching it with ambitious social goals, in line with the Porto Declaration, the European Pillar of Social Rights and the ILO guidelines for a Just Transition. In particular, the EESC calls on the EU institutions for a mapping and analysis of the impacts the green transition will have on employment and skills in different countries, regions and sectors, including the subcontractors and downstream value chains. The EESC also calls for ensuring that National Energy and Climate Plans contain just transition strategies. Moreover, it is important to anticipate and manage changes in the world of work, including through targeted support as, e.g., enhancing the necessary skills, ensuring social protection, and involving the whole society concerned in shaping the transition, as well as additional proposals to mobilise massive public and private investments to support the transitions, and increase the size and scope of the Just Transition Fund significantly to match the challenges. |
| --- | --- |

2.5.

| 2.6. | The EESC calls for ensuring that the EU regulatory framework will enable EU businesses, including SMEs, to become frontrunners in green business, while preventing the risk of displacing production and protecting against imports with greater negative environmental impact. This applies especially to energy intensive industries. The EESC also calls on support for SMEs to better understand and manage the increasing climate and environmental requirements targeted to them directly and indirectly. |
| --- | --- |

2.6.

| 2.7. | The EESC calls for strong innovation support to industries to develop and deploy green technologies, materials, products, production processes, and business models, by facilitating, for example, programs on hydrogen, batteries, semiconductors, carbon capture and usage, and circular economy practices in various fields such as in packaging. |
| --- | --- |

2.7.

| 2.8. | To enhance the EU’s global impact in climate change mitigation, the EU should provide EU industries with competitive conditions to seize the export opportunities provided by the global demand of climate technologies and solutions and thus increase the carbon ‘handprint’ of the EU. |
| --- | --- |

2.8.

| 2.9. | Industrial alliances are proving a successful method for developing large-scale and cross-border industrial projects in strategic fields. These industrial alliances, together with Important Projects of Common European Interest (IPCEIs), are crucial for the recovery and promoting European standards and key technologies, in particular in areas where the market alone cannot deliver or is being distorted. |
| --- | --- |

2.9.

| 2.10. | Progress towards a real Energy Union should be strengthened to ensure the energy transition towards an affordable, safe, competitive, secure and sustainable energy system. Considering the current challenges caused by the Russian-Ukrainian war, the Commission should focus on measures that bring about the biggest benefits in terms of the entirety of the objectives of the Energy Union and contribute to the acute challenges and the longer-term goals simultaneously. |
| --- | --- |

2.10.

| 2.11. | The situation in Ukraine has led to the REPowerEU Communication (4) which, at the request of the European Council, was followed by the REPowerEU Plan with proposals (5) which, if properly implemented, can significantly accelerate both energy independence and sustainability of the European Union. The goal of becoming independent of Russian gas and other fossil fuels requires both urgent diversification of suppliers and energy sources, enhanced solidarity and longer-term measures that promote the transition towards carbon-neutrality, taking into consideration the characteristics of different Member States and regions and the available alternative sources. However, to ensure the success of the process, sufficient private and public investment must be mobilised, making full use of the RRF and cohesion policy funds, among others. As already pointed out (6), the reduction of the demand for Russian gas by two thirds by the end of 2022 is a challenging task and would mean diversification, on the one hand, and primarily in the short term via LNG and biomethane, and on the other hand via energy efficiency and the expansion of renewables. Infrastructural lock-ons that create future limitations on realistic alternatives should be avoided and investments should be focused as much as possible on renewables and supporting infrastructures. Social partners and civil society must be closely involved in these policy proposals to ensure their social acceptance, sustainability and success. Moreover, to increase the level of response to external crises, a permanent coordination structure at the Council of the European Union would be needed. |
| --- | --- |

2.11.

| 2.12. | Further integration of the EU energy market will play an important part in enhancing the affordability and the security of energy supply. For this purpose sufficient interconnection capacity (7) is necessary and correspondent infrastructure must be deployed, particularly in energy ‘islands’ (such as the Iberian Peninsula (8)). To promote a competitive advantage of the EU in renewable energy and to ensure that renewables deployment does not endanger the security of supply, a realistic roadmap for the development and deployment of an efficient renewable energy infrastructure should be drawn up, including storage capacities and sufficient transmission interconnection that make it possible to export the exceeding production to other Member States. In order to deploy quickly the clean energy infrastructure, Member states need to speed up permit-granting. |
| --- | --- |

2.12.

| 2.13. | To enhance a level playing field, the EU should promote global carbon pricing. Carbon taxation should be developed and streamlined to reflect the climate impact in a symmetric way and take into account measures to sequester carbon from the atmosphere. Furthermore, the EESC should pursue its goal to phase out subsidies on energy sources that are harmful to climate and environment, while ensuring that the transition towards a climate-neutral economy happens in a just manner. |
| --- | --- |

2.13.

| 2.14. | The current hike in energy prices presents a great threat both in terms of increasing energy poverty and in competitiveness loss for energy-using companies. The EESC calls for actions successfully mitigating the impact of increased energy prices and preventing energy poverty, including among EU households. Temporary and well-targeted measures for limiting the impact of the spike in energy prices are also necessary to help SMEs and energy-intensive industries to survive the crisis. |
| --- | --- |

2.14.

| 2.15. | As part of a long term consideration of how the energy market is responding to shocks, it is important to address the root causes of the energy price increases (currently the price of gas), as suggested by the Agency for the Cooperation of Energy Regulators (ACER), based on its recent assessment (9) of the current electricity market design and pricing system. Moreover, a review could be considered with regard to markets where concentration of energy supply is high, and thus normal operation can be distorted. |
| --- | --- |

2.15.

| 2.16. | Citizens and consumers should be at the centre of energy transition, through the support of community energy and local ownership and the transformation of energy consumers to prosumers. The EESC calls for transparent information, consultation, and education campaigns to encourage citizens’ commitment to energy transition. |
| --- | --- |

2.16.

| 2.17. | The EESC also calls for more attention to transition problems on the road to a carbon neutral society, in particular with respect to industries that for various technical and/or financial reasons need time to adapt to maintain competitiveness on the market. |
| --- | --- |

2.17.

| 2.18. | The EESC has welcomed the updating of the TEN-T Regulation to better respond to topical objectives and needs. Special attention needs to be paid to identifying priorities and defining a network connecting all capitals, major cities, ports, airports, and terminals of Member States, based on European Corridors. Corridors should include, as appropriate, ‘sea bridges’ or high density regular ro-ro sea links between corridor ports. With respect to territorial cohesion, the EESC considers that Core Network Corridors must be better linked to the regional, urban, and local dimensions. Gaps between technical TEN-T requirements and military mobility requirements also need to be identified to implement a dual use of transport infrastructure. |
| --- | --- |

2.18.

| 2.19. | Given the rather long lead time of the TEN-T projects, the EESC supports a European framework of regulation and financing to provide medium- and long-term stability in terms of corridors and projects until the completion of the European Network. The EESC also calls for urgent national plans for ordinary and extraordinary funding for the maintenance of TEN-T infrastructures and a Core Network monitoring plan at the European level. |
| --- | --- |

2.19.

| 2.20. | Considering the essential role of aviation for the EU, the EESC calls for a comprehensive and effective approach to promote the recovery and growth of sustainable aviation. |
| --- | --- |

2.20.

| 2.21. | To contribute to the efforts of decreasing emissions from road transport, the EESC calls for favourable regulatory conditions for the use of larger and heavier goods transport vehicles and vehicle combinations within and between Member States concerned. The European Commission should consider the future and specific challenges of freight transport, and the foreseen scarcity of lorry drivers in the coming years, both in terms of lack of generational renewal and in terms of difficult working conditions. In this context, development of multimodal freight is important to enhance the attractiveness of rail freight as part of a complete logistics chain, together with improvement of working conditions of transport workers. |
| --- | --- |

2.21.

| 2.22. | The EESC welcomes the development of the EU urban mobility framework and calls for making urban transport, especially public transport, more inclusive, thus promoting equal opportunities for citizens. |
| --- | --- |

2.22.

| 2.23. | To enhance sustainable and smart mobility, the EESC pleads for a strong initiative by the Commission to launch large-scale digital projects on transport, which is key e.g. to efficient multimodality and optimising capacity use. |
| --- | --- |

2.23.

| 2.24. | As energy, transport and digital systems are ever more connected, there is a need for Transport, Digital and Energy Integrated Networks. To improve synergies and increase the resilience of the overall infrastructures, the EESC calls for a review on the major bottlenecks and vulnerabilities regarding the interlinkages of these systems from both current and longer-term perspectives. |
| --- | --- |

2.24.

| 2.25. | The EESC also calls for increasing the resilience of the energy, transport and digital network to climate change, natural hazards and human-made disasters, to generate and maintain long-lasting value of infrastructure. All in all, the EESC calls for measures to enhance adaptation to climate change and its impacts. |
| --- | --- |

2.25.

| 2.26. | To safeguard the sustainability of food systems and the competitiveness of European producers, the EESC calls for fostering an open strategic autonomy, including improved protein autonomy, ensuring reciprocity of trade standards (economic, social, environmental), promoting research, enhancing digitalisation, developing innovative technologies and seeds, and promoting fair prices that include higher input costs and costs for increased sustainability. |
| --- | --- |

2.26.

| 2.27. | The Common Agricultural Policy and Common Fisheries Policies should make a significant contribution to more sustainable and resilient food systems. Structured and broad civil society participation in the implementation of the Farm to Fork strategy must be ensured. The proposal for a legislative framework for sustainable food systems should include clear targets, indicators and a robust monitoring mechanism and scoreboard. |
| --- | --- |

2.27.

3.   A Europe fit for the digital age

| 3.1. | The pandemic and the war in Ukraine have highlighted the critical importance of digital technologies and the need for the EU to increase its digital sovereignty. The EESC has welcomed the Digital Compass and the Path to the Digital Decade and calls for an efficient introduction of the governance mechanism and facilitation of swift implementation of the targets. The pandemic also highlighted the challenges that the digital transition may pose and the EESC calls to strengthen social dialogue at European, national and industry levels to ensure this transition is also a just one. |
| --- | --- |

3.1.

| 3.2. | The EESC finds cooperation between the Commission and Member States crucial in evaluating progress and assessing necessary measures to achieve the targets, including through multi-country projects. The EESC also calls on the report on the State of the Digital Decade to contribute to sharing knowledge and good practices between Member States. |
| --- | --- |

3.2.

| 3.3. | The EESC has stressed the need for the digital transformation to take place in a sustainable, human-centred, and inclusive way which works for all, without further deepening the existing digital divide or creating new inequalities, ensuring working conditions, work-life balance and health and safety of workers To this end, it is also important to anticipate and manage changes in the world of work, making use of social dialogue at various levels and enhancing the necessary skills and proper working conditions, including in teleworking and platform work, pursuing an EU level evaluation of the so-called ‘right to disconnect’. |
| --- | --- |

3.3.

| 3.4. | Investment in digital infrastructure ensuring better accessibility and the development of the single market in data are essential and necessary enablers of proper digital development in all regions of the EU. The EESC calls for efficient implementation of measures enhancing the free movement of data, while ensuring proper protection of data, privacy and intellectual property. |
| --- | --- |

3.4.

| 3.5. | The EU should continue progress towards the establishment of a secure and autonomous space-based connectivity system for the provision of guaranteed and resilient satellite communication services, which will increase the availability of high-speed broadband and seamless connectivity throughout Europe. |
| --- | --- |

3.5.

| 3.6. | The EESC finds it important to continue the development of intelligent transport systems towards a Common European Mobility Data Space, meaning improved efficiency and prerequisites for improved working conditions, as well as for seamless multimodality. |
| --- | --- |

3.6.

| 3.7. | The EESC finds it reasonable to rely on strong European market participants to implement digital financial services. The EESC considers that action is urgently needed to make the crypto sector transparent and to protect the end-users of digital finance, safeguard financial stability, protect the integrity of the EU’s financial sector, and ensure a level-playing field among the different operators in the economic and financial system, as well as to steer the crypto sector towards a more sustainable and less energy-intensive operation mechanisms. |
| --- | --- |

3.7.

| 3.8. | As skills and competences are essential enablers of the digital transformation, the EESC calls for continuous development of ways of both increasing high-level talent and enhancing citizens and workers’ skills and competences to better seize the opportunities provided by digitalisation and to manage risks related to it. |
| --- | --- |

3.8.

| 3.9. | To boost the EU’s excellence in digitalisation, European companies need favourable conditions for innovation, investment, and operation, compared to foreign competitors. Considering that cooperatives are particularly suited for supporting inclusive participation in the governance of digital platforms, the EESC urges to provide initiatives promoting the development of digital cooperative platforms. |
| --- | --- |

3.9.

| 3.10. | While promoting innovative businesses, it must be ensured that all businesses, including micro-, small- and medium-sized enterprises and social economy enterprises, are able to become involved in and benefit from progress. The EESC finds it important to enhance the uptake of AI and other advanced technologies, but it must also be recognised that a great deal of SMEs have challenges in adopting even basic digital technologies. |
| --- | --- |

3.10.

| 3.11. | It is increasingly important for all actors, including along whole value chains, to pay due attention to cybersecurity, and the crises have ever more emphasised its importance to ensure the proper functioning of the economy and society and to maintain international connections. This calls for strengthened action by Member States, including cooperation facilitated by the Commission. It is also ever more important to fight disinformation, while ensuring that it is not used as a pretext for limiting public freedoms, in particular freedom of expression. |
| --- | --- |

3.11.

| 3.12. | The EESC calls for the mobilisation of both public and private financing to facilitate investment in research and innovation, education and training and technical infrastructure. The regulatory framework is another general factor shaping digital development. The EESC deems it important to ensure that evolving regulation encourages innovation and investment and a level playing field, in alignment with human rights and environmental and climate objectives. |
| --- | --- |

3.12.

| 3.13. | As digitalisation continues to be an important driver for global economic growth, the EESC believes that policies related to taxation of the digitalised economy should seek to promote, not hinder, economic growth and cross-border trade and investment. |
| --- | --- |

3.13.

| 3.14. | A rule-based and level-playing field for digital activities is important at international level as well, and the single market is a stepping stone for the EU to be an influential and powerful global actor. The EESC calls for making use of a wide range of tools, from diplomatic action to innovation cooperation and trade agreements, to promote the human-centric approach and the trustworthiness of digital technologies. Being a global standard-setter also requires global competitiveness, relying on solid cooperation between Member States. |
| --- | --- |

3.14.

4.   An economy that works for people

| 4.1. | Current socio-economic development is accompanied by a high level of uncertainty associated with the still ongoing COVID-19 pandemic and is further exacerbated by the war in Ukraine and the growing geopolitical tensions with Russia. It is crucial that Member States efficiently strengthen and coordinate their economic, health and social policies, effectively address macroeconomic imbalances and ensure sound public finances. At the same time, they must also improve the quality and composition of their public investments to make available the necessary financial resources, including by encouraging private investment, in order to support the socio-ecological transformation of the economy, aiming at promotion of a high level of employment, high-quality jobs, well-being, securing adequate income, whilst ensuring it does not reduce the motivation of people to be active on the labour market. |
| --- | --- |

4.1.

| 4.2. | The EU should focus on a competitive edge for EU industry and jobs as keys for prosperity as well as on the fight against inequality and poverty in the recovery process. The European Pillar of Social Rights (EPSR) as the guiding instrument for EU social policy should also be at the centre of the recovery strategy to ensure that economic and social recovery will go hand in hand. The EU should pay particular attention to supporting vulnerable groups through active and inclusive policies accompanied by essential and enabling social services. |
| --- | --- |

4.2.

| 4.2.1 | Based on their conjunctural success, both the Next Generation EU and Recovery and Resilience Facility must be assessed as effective tools to respond to the crisis triggered now by the war, which is likely to cause dramatic consequences for the European economy. These tools complement the existing structural mechanisms to foster economic growth and upward convergence, protect living conditions, and ensure social peace and stability within the EU. |
| --- | --- |

4.2.1

| 4.3. | The EU and national governments should take measures to mitigate the impact of the war in Ukraine both in order to minimise the increase of prices and energy costs for families and enterprises and to support the economy and employment with the adjustment of existing emergency measures. To help enterprises to cope with the crises and be able to create and retain jobs, the Commission should continuously monitor the impacts of the pandemic and the war on EU businesses of all sizes and be prepared for necessary, temporary support measures, while ensuring fair conditions for competition. |
| --- | --- |

4.3.

| 4.4. | The EESC strongly supports the objective of redirecting investments in such a way that they contribute to the EU’s transition to a sustainable economy. In doing so, it is necessary to be alert to misleading ‘green or sustainability washing.’ The Committee expects that the Commission will actively involve the social partners and civil society in the design and implementation of sustainable financing. |
| --- | --- |

4.4.

| 4.5. | The EU Member States must have appropriate fiscal space to counter the negative economic and social impacts of the war in Ukraine. This further reinforces the need for the revision of the EU economic governance framework. However, Member States must consolidate their public finances during periods of good growth enabling a response during recessions. Also against this background, the EESC reiterates its warning against the premature deactivation of the general escape clause. |
| --- | --- |

4.5.

| 4.5.1 | Moreover, the EESC calls for a revised and rebalanced, prosperity-oriented economic governance framework, which gives equal weight to a range of key policy objectives, such as sustainable and inclusive growth, full employment and decent work, a competitive social market economy and stable public finances. A competitive European economy that is also socially and environmentally sustainable is a pre-requisite for enhancing prosperity of all Europeans. |
| --- | --- |

4.5.1

| 4.5.2 | Furthermore, economies in which national fiscal policies recognise the need to build revenue reserves in times of growth, while still ensuring the investment necessary for future prosperity, will be more resilient in combatting the adverse impacts of an economic downturn. |
| --- | --- |

4.5.2

| 4.5.3 | Proper enforcement of the Stability and Growth Pact, revised following the conclusion of the ongoing review, preferably with simplified rules and reduced pro-cyclicality and reflecting the post-pandemic context, will be essential to help Member States put their public finances on a sustainable footing and strengthening investment confidence. Any future fiscal framework needs to: a) promote sustainable public finances allowing for increased public investments; b) allow for more anti-cyclical policy, and c) permit greater flexibility and country-specific differentiation as far as debt adjustment paths are concerned, while at the same time guaranteeing fiscal sustainability. More specifically, one of the EESC’s main proposals for the revision of the fiscal framework is to introduce a golden rule for public investments, without jeopardising medium-term fiscal and financial stability and the value of the euro, in combination with an expenditure rule. |
| --- | --- |

4.5.3

| 4.5.4 | Both national parliaments and the European Parliament need to maintain their prominent role in the future EU economic governance framework to strengthen the democratic accountability of the Union. The EESC took note of the idea to establish an Unemployment Scheme, originally included in the political priorities of the European Commission. In the light of the effects of the COVID crisis and the current war in Ukraine, the EC could pursue further discussions with Member States and the social partners on possible long-term tools, i.e. Unemployment Reinsurance Schemes, to address systemic problems. |
| --- | --- |

4.5.4

| 4.6. | The SURE (10) mechanism has played a fundamental role in cushioning the blow of the pandemic, and has proved an effective tool. Learning from this, the EESC calls for assessing the possibility for further use of this mechanism. |
| --- | --- |

4.6.

| 4.7. | Deepening Economic and Monetary Union goes hand in hand with strengthening economic governance, including completing the banking and capital markets union and reinforcing the European Semester’s role in increasing growth, cohesion, inclusiveness, competitiveness and convergence. |
| --- | --- |

4.7.

| 4.8. | The EESC considers that, given the challenges posed by the war, and in particular the growing need for both defence and energy expenditure, new own resources mechanisms could be established by the European Union. |
| --- | --- |

4.8.

| 4.9. | The fragmentation of capital markets in the Member States does not create sufficient scope for easier access for businesses to financial resources in the single capital. Therefore, further progress in the completion of the Capital Markets Union is needed. 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. |
| --- | --- |

4.9.

| 4.10. | All stakeholders should be involved in the development and implementation of measures to improve financial literacy, the efficiency of protection rules and the reduction of information asymmetries between financial services providers and citizens. |
| --- | --- |

4.10.

| 4.11. | The European Single Market should achieve its full potential. Economic gains could be secured by better and more effective application and enforcement of existing legislation and by deepening it. Further removal of barriers to the free movement of goods and services brings benefits for everyone — customers, workers and businesses. The proper functioning of the Single Market also depends on the safety and quality of goods and services. |
| --- | --- |

4.11.

| 4.12. | The EESC is concerned about the existence of unfair tax competition within the EU, which promotes tax avoidance. The Committee believes that an effective monetary union requires a coherent fiscal policy and consistency between the fiscal rules of its members. The EESC has also proposed launching a European pact to effectively combat tax fraud, evasion and avoidance and money laundering. |
| --- | --- |

4.12.

| 4.13. | Excessive bureaucracy creates unnecessary costs for the economy and society. The EU of the future should not focus on micromanagement, but should be guided by the principle of better regulation. However, this should not be done at the expense of high standards of consumer, social, labour and environmental protection that are inherent in the social market economy. At European level, the problem-solving capacity of social partners, for example to balance different interests, could be increased. |
| --- | --- |

4.13.

| 4.14. | Entrepreneurship represents a key competence for improving competitiveness, innovation and well-being and the development of a social and green economy, even more so in the context of the post-pandemic recovery. Encouraging entrepreneurship education to develop entrepreneurial skills could be a way to reduce unemployment, especially among young people. Entrepreneurship in all its forms and sectors (including tourism, industry, platform economy, social economy, liberal professions) is essential for economic growth, innovation, employment and social inclusion. It is important to identify and respond to the difficulties faced by SMEs (especially very small businesses often with a family character) when accessing the Single Market, particularly in the context of the green and digital transitions. The EESC invites the Commission to undertake the concrete actions in its Work programme to address the barriers to the Single market already identified (11). |
| --- | --- |

4.14.

| 4.15. | The EESC supports the adoption of a combination of economic policies that make effective use of available domestic resources, both public and private, including the financial resources created within the framework of the Next Generation EU and the Recovery and Resilience Facility. The identified lack of involvement of civil society organisations has been and is a matter of concern for the EESC. Organised civil society asks for more formal procedures that facilitate real exchanges in the implementation and evaluation of the National Recovery and Resilience Plans. The partnership principle should serve as a blueprint for an effective mechanism of civil society involvement. |
| --- | --- |

4.15.

| 4.16. | The EESC supports the Commission’s legislative proposals in the area of company taxation and praises their coordination with the global discussions carried out at the OECD/Inclusive Framework level in order to achieve a global consensus. |
| --- | --- |

4.16.

| 4.17. | The Committee backs any effort aimed at reducing compliance costs for European companies and tax authorities when devising the new tax system. European businesses must not be brought to a competitive disadvantage. The full implementation of Pillar 2 of the Global tax agreement will be complex and is going to require a long time and significant effort, both by companies and tax authorities. A uniform adoption and implementation in the EU and other trading blocs at the same time of internationally agreed rules are of paramount interest to the EU and its Member States. |
| --- | --- |

4.17.

| 4.18. | Social entrepreneurship deserves particular attention in view of the role this form of entrepreneurship can play in overcoming the crisis. The implementation of the action plan for the social economy will play a key role in strengthening this sector. The definition of a specific social economy ecosystem in the new industrial strategy must lead to concrete actions to make the social economy green, digital and resilient. |
| --- | --- |

4.18.

| 4.19. | After the pandemic there is an increased need for fostering quality learning mobility for all and recognition of its learning outcomes, therefore the EESC promotes building a true European Education Area by 2025 for a learning Europe. This is achieved through funding and, above all, through cross-sectoral cooperation in the field of education. |
| --- | --- |

4.19.

| 4.20. | A modern consumer policy must ensure that consumers have the rights and protection they need. The Single Market makes it easier for EU consumers and businesses to buy and sell goods and services across borders, both online and offline. This requires trust and confidence in the market, targeted legislation and effective enforcement. Consumer information and training must also help them to make more responsible choices. |
| --- | --- |

4.20.

| 4.21. | The access to volunteer involvement needs to be improved and increased in scope and quality. The potential for volunteer engagement of people of all ages and backgrounds should be explored and implemented within innovative and flexible frameworks unlocking new possibilities. 2025 should be declared by the EU as the European Year of Volunteers. This would be a fitting tribute to the efforts and impact of volunteers during the COVID crisis and the war in Ukraine. It would highlight their importance to health and well-being in Europe and their role in the recovery and the future of Europe. |
| --- | --- |

4.21.

| 4.22. | Liberal professions are a key social and economic factor in all Member States and responsible for important public services in areas such as health, justice, security, language and art. It is therefore necessary that a specific impact assessment on the consequences of legislative proposals on liberal professions is carried out before and after European legislation is adopted. In this regard the European legislator shall especially take into account the negative effects of bureaucratic burden on liberal professions. |
| --- | --- |

4.22.

5.   A stronger Europe in the world

| 5.1. | The EESC calls for an open, fair, inclusive and predictable international trading environment that throw its weight behind democracy and the rule of law, peace and stability, social and environmental sustainability, and an open, fair and rules-based world trade order. Europe needs to protect global trade rules, ensure a level-playing field and strike the balance between strategic autonomy and openness to international trade by promoting a strong industrial base and resilient international supply chains. |
| --- | --- |

5.1.

| 5.2. | However, both the developments in China in recent years and the ongoing Russian aggression make it clear that increasing international trade does not necessarily help strengthen democratic processes. The EU has to therefore promote its fundamental values, such as respect for human rights, rule of law and media freedom in its trade policy. |
| --- | --- |

5.2.

| 5.3. | The EESC finds it important to continue addressing critical dependencies of the EU on third countries. This applies especially to energy, raw-materials, food, health products, infrastructure, and technologies. It also applies to the industrial dimension of the security, defence and space policies. The EU must in particular review its lack of industrial capacity and dependence on unreliable partners. |
| --- | --- |

5.3.

| 5.4. | At the same time, strengthening the EU’s open strategic autonomy and stronger global role requires cooperation with partners in various fields, including trade. The EESC calls for concluding negotiations on bilateral trade agreements and the development of multilateral cooperation within WTO. A boost in the relations with the Latin American partners, based on modernised agreements, would also be a topical opportunity for the EU to strengthen its position. |
| --- | --- |

5.4.

| 5.5. | The EESC highlights the crucial role of civil society in trade and stresses the need to boost cooperation with civil society from shaping to monitoring trade tools and agreements (Free Trade Agreements, Economic Partnership Agreements and Investment Agreements). This would help deliver on the objectives of the EU’s new trade strategy, ensuring that the trade agreements concluded will contribute to economically, socially and environmentally sustainable development for both the EU and the partner countries to the negotiations. |
| --- | --- |

5.5.

| 5.6. | It is also necessary to cooperate in the fields of transport, digital and energy, which has opened new opportunities e.g., for EU-US cooperation. The Core Network Corridors need to be better interconnected with the rest of the world for goods and passengers. The EESC calls for establishing a forum to facilitate the integration of the TEN-T network with the rest of the world, including neighbouring countries. |
| --- | --- |

5.6.

| 5.7. | The EESC considers that the EU needs a more proactive and effective approach to take care of the interests of European industries through establishing a competitive level playing field and tackling unfair trade practices, by means of existing trade laws, especially anti-dumping, and anti-subsidy laws. |
| --- | --- |

5.7.

| 5.8. | The Committee considers the need to strengthen the international role of the euro as an important tool for enhancing Europe’s global position and calls for a stronger focus on the reasons for the euro’s weakening international role, and for the completion of the Economic and Monetary Union. |
| --- | --- |

5.8.

| 5.9. | The EESC invites the Commission to enhance efforts to bring the EU approach to trade and sustainable development of both labour and environmental commitments into the WTO. This should also include further reflections on the structured involvement of all the components of civil society in WTO processes, as there can be no genuine sustainability without civil society engagement. |
| --- | --- |

5.9.

| 5.10. | The Union Civil Protection Mechanism is no longer sufficiently capable nor wide enough to respond to disasters linked to climate change and multiple risks occurring inside and outside the Union’s territory. Beyond its well-established activity as regards natural disasters, the Mechanism is called upon to tackle such risks as pandemics, major industrial risks, large-scale maritime pollution, consequences of cyber-attacks on electricity or drinking water networks and all essential infrastructures, or management of humanitarian crises linked to immigration. |
| --- | --- |

5.10.

| 5.11. | The link between short-term civil protection and long-term management of humanitarian aid needs to be better addressed and coordinated. To this end, the EESC considers that the need to set up a European agency for civil protection and humanitarian aid should be examined, as a practical mechanism for stronger foreign policy actions. |
| --- | --- |

5.11.

| 5.12. | The EESC notes that in many partner countries inclusive and participatory dialogue and policymaking is still missing and the space of civil and social dialogue is progressively reduced, despite the support provided by the Commission. The EESC proposes that the Commission establish, in cooperation with the EESC, a pilot project ‘Civic space scoreboard’ for some partner countries to measure on a yearly basis the state of civic and social dialogue, starting with the Western Balkan countries or the EUROMED countries. |
| --- | --- |

5.12.

6.   Promoting our European way of life

| 6.1. | Health systems in almost every European country need to be strengthened, focusing on prevention and guaranteeing access for all to quality public health structures, basic health services including vaccines and long-term care. Mental health issues need an urgent strategic response. |
| --- | --- |

6.1.

| 6.2. | The EESC recalls that it is crucial to support a strong and coordinated European healthcare ecosystem so as to contribute to the EU’s industrial strategic autonomy, technological sovereignty and a better quality of life for EU citizens. Bottom-up mapping and analysis should be carried out in order to assess the exact nature of the dependencies identified and tackle vulnerabilities and shortages of strategic materials. |
| --- | --- |

6.2.

| 6.3. | Migration continues to be a priority issue due to its impact on the EU’s demographics, economy and policies (employment, social affairs, labour market, integration policies, border control, fight against racism, xenophobia, populism and discrimination). The EU’s Pact for Migration and Asylum and the Common European Asylum System will have to be given final shape based on a real balance between solidarity and responsibility, and the obligations of the EU and Member States under international law. |
| --- | --- |

6.3.

| 6.4. | The refugee crisis unfolding as a consequence of the war on Ukraine underlines the crucial importance of this area and represents the correct way to respond by EU: in addition to give immediate protection to refugees, and the introduction of temporary residence and work permits, urgent measures must be taken for integration into Member States’ societies and labour markets and appropriate funding to both governments and civil society organisations acting on the ground must be made available. |
| --- | --- |

6.4.

| 6.5. | 2022 is the European Year of Youth, designed to acknowledge young people’s sacrifices and challenges faced during the COVID-19 pandemic that they have made and continue to make, providing them with opportunities at all levels to participate with a particular focus on green issues, inclusion, digital and the mainstreaming of youth across all policies in the EU. It is crucial that there is a concrete legacy for the year and that indeed every year young people are the focus of initiatives at EU level. The Commission should therefore continue their work on the follow up of the Year in 2023 and beyond. |
| --- | --- |

6.5.

7.   A new push for European democracy

| 7.1. | Measures are needed to improve civil dialogue with and among stakeholders and groups in society giving them ownership of and true participation in policies that directly affect them, promoting the role of citizens in building the future of Europe. |
| --- | --- |

7.1.

| 7.2. | There are a few existing channels that play an important role in citizen engagement on European level, such as the European Citizens’ Initiative. However, these channels are not sufficient for a meaningful involvement of EU citizens and there is a need for participation tools (including e-participation) to be more inclusive, used in a structured way, accessible for everyone, and especially more impactful. |
| --- | --- |

7.2.

| 7.3. | Within this idea, the EESC’s institutional role should be enhanced and empowered as the established representative of organised civil society in advising EU policymaking, but also as facilitator and guarantor of participatory democracy activities like structured dialogue with civil society organisations and Citizens’ panels. A lively civil society is crucial for the democratic life of the European Union. |
| --- | --- |

7.3.

| 7.4. | We recommend for EU policy makers to establish coherent (internal and external) European Union civil society strategies, including policies based on: better recognition of the sector and civil dialogue, including through a dedicated pillar in the European Democracy Action plan, the annual Rule of Law assessment and a European Civil Society Strategy; enabling legal frameworks and creation of a European level playing field; access to public funding; monitoring and protection mechanisms at EU level. |
| --- | --- |

7.4.

| 7.5. | It is essential to focus on the follow-up to the CoFoE’s proposals in order to deliver on the citizens’ demands. The EESC expects every European institution to commit with a constructive and ambitious approach, in accordance with its role and competences, in every step of the follow-up, including with legislative proposals. The EESC stands ready to play its role and ensure a proper follow-up of the Conference’s outcome and if a Convention is organised the EESC must play a prominent role. |
| --- | --- |

7.5.

| 7.6. | To rebuild confidence in enlargement and strengthen the ways in which the EU reaches out to its natural allies in the region, the EESC is convinced that the EU should clearly include the Western Balkans in the activities meant to implement the results of the CoFoE. |
| --- | --- |

7.6.

| 7.7. | The war in Ukraine has pushed European common action and integration in key sectors such as defence and foreign policy, to extents that were hard to imagine a few months ago. The EESC welcomes the commitment expressed in the Versailles Declaration to increase the use of the European Peace Facility instrument and stresses that the EU should move towards a stronger political integration, which could support a common foreign policy. We call on the Member States to immediately start working on implementing a genuinely common and effective defence system that would significantly strengthen Europe’s ability to defend itself (12). Decision taken at EU level related to this should involve the European Parliament as the direct representative of the people in accordance with the Treaties. |
| --- | --- |

7.7.

| 7.8. | The European Parliament, as well as the EESC, social partners and civil society organisations, must be involved in the contingency plans to counter the economic consequences of the war. In particular, in the design of the different items within the Repower EU strategy. |
| --- | --- |

7.8.

| 7.9. | The EESC emphasises the need to meet the challenges related to the active involvement of young people in society and policy and decision-making processes, considering that children and young people are the generation that will have to pay the huge public debt that countries are now creating to deal with the consequences of the pandemic and live with the consequences of the steps taken now to address climate change and the new security situation in Europe. Also, a coordinated European approach based on strong policy and legal frameworks is needed in order to break the intergenerational cycle of disadvantage. Reaching the ambitious target set to lift as many children and youth as possible out of poverty should be closely monitored. |
| --- | --- |

7.9.

| 7.10. | The EESC stresses that gender equality and gender mainstreaming should be addressed in all facets of EU law making and implementation, especially because the pandemic and the downturn it created have exacerbated gender imbalances. |
| --- | --- |

7.10.

| 7.11. | Any responses to exceptional conditions must not go against the rule of law nor endanger democracy, the separation of powers and the fundamental rights of European citizens. The new EU instruments to protect and promote fundamental rights and the rule of law (FRRL), for instance the Rule of Law Review Cycle and the mechanism for making EU funding conditional on respect for FRRL, need to be implemented. This must be taken into consideration particularly in sensitive temporary decisions, such as banning certain broadcasters, limiting the free mobility of people, or any other decision taken during both the pandemic and the war. |
| --- | --- |

7.11.

| 7.12. | The EESC has recommended the adoption of a Europe-wide Charter of rural/urban rights and responsibilities and calls for the creation of a governance model for the Rural Pact that includes local governments as well as local businesses, both private and non-for-profit, working with local democratic and social partner structure to ensure that local voices are heard and that the long-term vision can be successfully implemented. |
| --- | --- |

7.12.

| 7.13. | Regarding the European Green Deal, the EESC calls for putting in place strong governance structures to include all stakeholders in the design of EGD measures, including:






  — | creating a European Climate Pact Stakeholder Platform, composed of climate actors at all levels; |
| --- | --- | --- |

7.13.

—

creating a European Climate Pact Stakeholder Platform, composed of climate actors at all levels;

| — | setting up an EU Climate Finance Forum to facilitate access to finance and remove barriers; |
| --- | --- |

—

setting up an EU Climate Finance Forum to facilitate access to finance and remove barriers;

| — | guaranteeing proper involvement of existing European social dialogue structures; |
| --- | --- |

—

guaranteeing proper involvement of existing European social dialogue structures;

| — | encouraging Member States to involve regional authorities, social partners, and civil society organisations in preparing national and regional just transition plans; |
| --- | --- |

—

encouraging Member States to involve regional authorities, social partners, and civil society organisations in preparing national and regional just transition plans;

| — | engaging youth more structurally in the decision-making process on sustainability and including a youth delegate in the official EU delegation to COP meetings; |
| --- | --- |

—

engaging youth more structurally in the decision-making process on sustainability and including a youth delegate in the official EU delegation to COP meetings;

| — | structurally linking the ‘Fit for 55’ package to the UN Sustainable Development Goals; |
| --- | --- |

—

structurally linking the ‘Fit for 55’ package to the UN Sustainable Development Goals;

| — | continuing to build on the success of joint EC/EESC work on the European Circular Economy Stakeholder Platform. |
| --- | --- |

—

continuing to build on the success of joint EC/EESC work on the European Circular Economy Stakeholder Platform.

| 7.14. | EU institutions should also recognise the fundamental role of civil society in disseminating a culture of FRRL and promote their participation in facilitating adequate communication of EU values and principles. Accordingly, the role of civil society in the Rule of Law Review Cycle must be strengthened, including with a stakeholder forum. |
| --- | --- |

7.14.

| 7.15. | Moreover, the EESC deems it crucial to guarantee the involvement of civil society representatives, including the social partners, consumers’ organisations and other concerned stakeholders, in shaping, implementing, and monitoring the Digital Decade policy programme and related national roadmaps. |
| --- | --- |

7.15.

| 7.16. | The EESC invites the EC to keep better regulation as a priority and calls on the Commission, including all its services, and the EU legislators to constantly deepen and advance the EU better regulation system in all its aspects and systematically use the tools and guidelines for better regulation in their work. |
| --- | --- |

7.16.

| 7.17. | The EESC stresses that, by default, the Commission should substantiate every legislative proposal with a fully developed impact assessment. The Commission should carry out proper impact assessments on any upcoming strategies too, so as to identify the impacts in an early stage and to better anticipate the joint effects of individual initiatives. |
| --- | --- |

7.17.

| 7.18. | The EESC stresses that the better regulation instruments must remain policy-neutral and clearly separated from political decision-making, which is to be left to the designated and legitimate political bodies.
  In the public consultation procedures related to the EC proposals, care must be taken to ensure and balance the input from various stakeholders. This requires reviewing the methodology to better reach civil society organisations at the EU and national levels. The EESC emphasises that online procedures need to be complemented by a structured dialogue with civil society organisations in all phases of policymaking, including the implementation and evaluation phase. |
| --- | --- |

7.18.

In the public consultation procedures related to the EC proposals, care must be taken to ensure and balance the input from various stakeholders. This requires reviewing the methodology to better reach civil society organisations at the EU and national levels. The EESC emphasises that online procedures need to be complemented by a structured dialogue with civil society organisations in all phases of policymaking, including the implementation and evaluation phase.

| 7.19. | The EESC calls on the Commission and especially the Joint Research Centre to involve the EESC fully in its foresight cycle and support it in screening existing foresight activities carried out by civil society organisations, trade unions and business associations. |
| --- | --- |

7.19.

| 7.20. | The Committee also calls for continuous strengthening of cooperation in the ex-post evaluation work on various initiatives. |
| --- | --- |

7.20.

| 7.21. | Both the pandemic and the current war in Ukraine have demonstrated the urgency of the need for further action at national and European level, to protect free and pluralistic media and quality independent journalism. |
| --- | --- |

7.21.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ C 290, 29.7.2022, p. 35.

1

(2)  EESC Resolution ‘The war in Ukraine and its economic, social and environmental impact’ (OJ C 290, 29.7.2022, p. 1).

2

(3)  EESC Resolution ‘The war in Ukraine and its economic, social and environmental impact’ (OJ C 290, 29.7.2022, p. 1).

3

(4)  https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1511

4

(5)  https://ec.europa.eu/info/publications/key-documents-repowereu_en

5

(6)  EESC opinion ‘REPowerEU: Joint European Action for more affordable, secure and sustainable energy’ (OJ C 323, 26.8.2022, p. 123).

6

(7)  Interconnection is already a target of the EU (at least 15 % by 2030, but some countries are far below): https://energy.ec.europa.eu/topics/infrastructure/electricity-interconnection-targets_en

7

(8)  Commission document on ‘Energy Islands’: https://ec.europa.eu/commission/presscorner/detail/de/MEMO_18_4622

8

(9)  ACER’s Final Assessment of the EU Wholesale Electricity Market Design

9

(10)  European instrument for Temporary Support to mitigate Unemployment Risks in an Emergency (SURE).

10

(11)  See for example ‘Business Journey on the Single Market: Practical Obstacles and Barriers’ (SWD(2020) 54 final), Brussels, 10.3.2020.

11

(12)  OJ C 290, 29.7.2022, p. 1.

12

---

OPINIONS

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

| 22.11.2022 | EN | Official Journal of the European Union | C 443/15 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/15

---

Opinion of the European Economic and Social Committee on taxation of cross-border teleworkers and their employers

(own-initiative opinion)

(2022/C 443/02)

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

Rapporteur:

Krister ANDERSSON

| Plenary Assembly decision | 20.1.2022 |
| --- | --- |
| Legal basis | Rule 52(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | Economic and Monetary Union and Economic and Social Cohesion |
| Adopted in section | 1.7.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 195/0/2 |

Plenary Assembly decision

20.1.2022

Legal basis

Rule 52(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

Economic and Monetary Union and Economic and Social Cohesion

Adopted in section

1.7.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

195/0/2

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) recognises the particular challenges that the rise of cross-border teleworking pose to the international taxation systems of today. This concerns in particular the taxation of wages and the taxation of company profits. |
| --- | --- |

1.1.

| 1.2. | The EESC agrees with the European Commission (EC) that a cross-border teleworking employee could be faced with double taxation on their income, resulting in lengthy and costly disputes between an employee and Member States' tax authorities. Dependent on a country's tax treatment of foreign income, an employee could also be obligated to comply with two separate tax declarations, possibly at different times due to differences between tax filing deadlines between Member States. The compliance burdens constitute obstacles to an efficient single market. Member States should pay due attention to the obstacles when bilateral tax agreements are signed. |
| --- | --- |

1.2.

| 1.3. | In terms of the taxation of company profits, international teleworkers may run the risk of inadvertently creating a permanent establishment (PE) for the company in a country other than its own. If a PE were established in another country, the company would be forced to accurately divide its corporate income between the two locations, and thus be subject to different filing obligations and tax liabilities. |
| --- | --- |

1.3.

| 1.4. | The EESC welcomes the temporary tax measures Member States took during the height of the pandemic and the guidance issued by the OECD during the pandemic. These measures allowed cross-border employees and employers to carry on with business activities, and ensure both were not faced with double taxation, allowing businesses to continue supporting the EU economy and workers at an important time. |
| --- | --- |

1.4.

| 1.5. | The EESC underlines how important it is that the taxation systems are updated further to answer the needs of today's work environment. The international corporate tax framework has recently been overhauled through an agreement on an OECD/G20 Inclusive Framework Tax Package consisting of two pillars. If employees increasingly engage in employment through teleworking, there might be a need to also review international taxation rules for individuals. In particular, rules must be easy to comply with. |
| --- | --- |

1.5.

| 1.6. | The EESC considers it essential that taxation rules regarding cross-border teleworking ensure that there is no double taxation or unintended non-taxation for both employees and employers. In ensuring that companies of all sizes can offer teleworking opportunities, it is important that any administrative obligations related to the taxation of cross-border teleworkers are eliminated or at least minimised. |
| --- | --- |

1.6.

| 1.7. | Whilst EESC recognises that countries have the right to decide on whether and at what rate they should levy taxes in their countries, taxation principles for cross-border teleworking should preferably be agreed at the global level. However, considering the inherent intra-EU mobility under the freedom of movement within the Single Market, there are reasons to address the issue at EU level before a global solution is found. While different approaches are possible, it is important that a high degree of coordination is achieved in the EU. |
| --- | --- |

1.7.

| 1.8. | The EESC stresses that the rules should be easy for both employees and employers. One possibility would be for Member States to agree to only tax the employee if the number of working days in the country exceeds 96 days per calendar year. The EESC notes that in the OECD/IF tax work, a Multi Lateral Instrument (MLI) has been used as a tool to facilitate a timely implementation of new tax rules. |
| --- | --- |

1.8.

| 1.9. | The EESC encourages the EC to consider whether a one-stop shop, like we have in the VAT area, could be a possibility. It would require the employer to report for cross-border teleworkers the number of days teleworkers worked in their country of residence and in the country where the employer is located. With this information, tax authorities would be able to assess in which country income would be taxable, or what part of the income would be taxable in each country. |
| --- | --- |

1.9.

| 1.10. | A one-stop shop system developed for cross-border teleworkers may serve as a first step to having an infrastructure allowing employees and employers to reduce tax disputes between Member States and at the same time ensuring that taxes are levied correctly without requiring the individual to file in multiple countries. |
| --- | --- |

1.10.

2.   Background

| 2.1. | The COVID-19 pandemic has changed the lives of workers and businesses in unprecedented ways. One of the most striking trends during the COVID-19 pandemic, with travel restrictions in place and governmental limitations on the number of employees present in offices in order to reduce transmission of the COVID-19 virus, has been the rise of teleworking (1). Businesses and employees made major efforts to digitalise their daily activities (e.g. online meeting tools) in order to facilitate employees working from home. In this way, businesses could still continue delivering (necessary) goods and services to customers and thus support the EU economy, jobs, trade and economic growth. |
| --- | --- |

2.1.

| 2.2. | By reducing travel commuting time, teleworking is associated with greater flexibility which may decrease stress for the employee, allowing for an improved work/life balance (2). In addition, the rise of teleworking can benefit the EU's objective of carbon neutrality. With a large share of EU emissions arising from transportation, a rise in teleworking could lead to a lower amount of carbon emissions and less traffic congestion (3). By moving to teleworking, the need for office space is likely to decrease, thus lowering emission costs of office buildings (e.g. heating and cooling). |
| --- | --- |

2.2.

| 2.3. | As we are moving towards a ‘post-COVID-19’ era with high vaccination rates across the EU, while we expect that some employees will return to their offices, it is unlikely that the rising trend of teleworking will be fully reversed. In a Eurofound survey of March 2021, 46 % of EU employees expressed a preference to continue to work ‘daily’ or ‘several times a week’ from home when the pandemic ends (4). As a result, teleworking is also expected to become part of our working culture. |
| --- | --- |

2.3.

| 2.4. | The rise of cross-border teleworking poses challenges to the taxation systems of today. While the phenomenon of cross-border working is not new, the ability for an employee to telework from their home in another country raises issues with international tax rules, in particular if the employee works a substantial share of working days in their country of residence or in a third country, rather than the traditional place of activity. This concerns in particular the taxation of wages and the taxation of company profits. Such cases can arise particularly in certain ‘hotspot regions’ which lie geographically close to other Member States, but the growth and development of teleconferencing tools is likely to increase such cases on a wider basis. |
| --- | --- |

2.4.

| 2.5. | In terms of the taxation of wages, workers residing in one Member State (residence jurisdiction), but working for a company located in another (source jurisdiction) can be subject to double taxation, with both jurisdictions taxing the income. In order to avoid such a scenario, countries have concluded bilateral double taxation agreements, often following the OECD Model Tax Convention (OECD-MTC) on Income and on Capital. The OECD MTC lays down as a general principle that income from employment should be taxed only in the residence jurisdiction. However, if work is carried out in another country (i.e. the source state), the source state may tax the income attributable to the days worked in this state, provided that the employee stays at least 183 days in the source state in a year, or the remuneration is paid by an employer in the source state, or if the remuneration is borne by a PE of the employer in the source state. |
| --- | --- |

2.5.

| 2.6. | In accordance with the OECD-MTC, an employee resident in a country other than their country of usual work activity will be faced on day one with a division of taxing rights on work income between the residence jurisdiction and the source jurisdiction on a pro-rata basis. |
| --- | --- |

2.6.

| 2.7. | To avoid an immediate apportionment of income for cross-border working, and as the OECD Model is a template which Member States are not obligated to follow, some countries have installed different rules, such as de-minimis structures. In this case, the employee's income is taxed exclusively in the residence country, provided that the employee does not exceed a certain number of days where they are not present in the usual place of activity (5). |
| --- | --- |

2.7.

| 2.8. | Due to measures taken during the pandemic, such as the implementation of strict quarantine requirements and restricting cross-border travel, many workers, in particular frontier workers, were forced to telework in their residence country rather than their usual country of activity. As a result of the COVID-19 pandemic, numerous Member States took temporary measures to avoid source jurisdictions losing their entire taxing right. Member States agreed on ‘memoranda of understanding’ whereby all the days worked in a home office would be deemed as activity in the Member State where work activity normally takes place. This would only apply to workers subject to the exceptional situation of COVID-19, and not cross-border workers who were already teleworking before the pandemic. These temporary measures have presumably not been prolonged after 30 June 2022, and countries will return to the general OECD-MTC or de-minimis structures. Similarly, the OECD also issued guidance concerning the taxation of the income of ‘stranded workers’ (employees stranded in a source jurisdiction for a long period of time due to COVID-19 related travel restrictions, quarantining rules, etc.) (6). |
| --- | --- |

2.8.

| 2.9. | According to the EC (7), a cross-border teleworking employee could be faced with double taxation on their income, resulting in (lengthy, costly) disputes between an employee and Member States. Dependent on a country's tax treatment of foreign income, an employee could also be obligated to comply with two separate tax declarations, possibly at different times due to differences between tax filing deadlines between Member States. In addition, complexities could arise where certain tax expenses necessary for the generation of income would need to be accurately divided between the two Member States. A cross-border teleworking employee may also lose out on tax benefits or credits. |
| --- | --- |

2.9.

| 2.10. | Non-resident taxpayers with income from two or more Member States, such as mobile workers, seasonal workers, sportsmen, artists and pensioners are in general not eligible for the taking into account of personal and family circumstances in the same ways as for resident taxpayers. According to the Schumacker-ruling (8), Member States have to grant such tax benefits to non-residents, if the taxpayers earn ‘all or almost all’ their income in this Member State. Some Member States apply a threshold of 90 % of the total income to be earned in that Member State for granting such tax benefits. This can represent an obstacle to the free movement as any income above a 10 % share of the total income in other Member States will result in at least a partial loss of such tax benefits, as the threshold for the full granting of such tax benefits will not any longer be attained. Member States should allow the taking into account of personal and family circumstances, if non-residents earn 75 % of the taxpayer's income in the source state. |
| --- | --- |

2.10.

| 2.11. | The compliance burdens constitute obstacles to an efficient single market. Member States should pay due attention to the obstacles when bilateral tax agreements are signed. |
| --- | --- |

2.11.

| 2.12. | In terms of the taxation of company profits, international teleworkers may run the risk of inadvertently creating a PE for the company in a country other than its own. If a PE were established in another country, the company would be forced to accurately divide its corporate income between the two locations, and thus be subject to different filing obligations and tax liabilities. |
| --- | --- |

2.12.

| 2.13. | Many companies, in particular SMEs without an international structure, may not be aware that having staff working from another country may give them functions and substance and thereby make them liable to profit allocation and requirements to adhere to transfer pricing rules as well as reporting requirements. SMEs may not have a tax department or access to advisors and their compliance costs are already very high. Companies in the EU and the UK are, according to a study by the EC, estimated to spend an annual total amount estimated around EUR 204 billion to comply with obligations related to CIT, VAT, wage related taxes and contributions, property and real estate taxes and local taxes. The average enterprise incurs an annual cost in meeting its tax compliance obligations amounting to 1,9 % of its turnover (9). Any further increase may jeopardise the viability of the company. |
| --- | --- |

2.13.

| 2.14. | Due to concerns arising from the possible creation of PEs as a result of cross-border telework, the OECD issued guidance on the topic (10) in April 2020 and March 2021. The OECD considered that ‘the exceptional and temporary change’ of the place of location where employees work, ‘should not create new PEs for the employer’ (11). In general, the OECD argued that ‘even though part of the business of an enterprise may be carried out at a location such as an individual's home office, that should not lead to the conclusion that that location is at the disposal of that enterprise simply because that location is used by an individual (e.g. an employee) who works for the enterprise’, arguing that an employee being forced to work from home due to the COVID-19 pandemic and public health measures ‘lacks a sufficient degree of permanency or continuity’ in order to consider its home as a PE for the employer. |
| --- | --- |

2.14.

| 2.15. | The OECD, whilst underlining the exceptional nature of the COVID-19, did note that if employees continued to work from home after the COVID-19 pandemic, thus delivering a certain degree of ‘permanence or continuity’ to their home office, it would ‘not necessarily result in (...) a business PE’. Such situations would require further examination of the specific facts and circumstances, according to the OECD. For persons in decision-making positions, tax authorities have often challenged whether a PE may have been established. |
| --- | --- |

2.15.

3.   General comments

| 3.1. | The EESC strongly welcomes the efforts made by companies and workers during the COVID-19 pandemic to continue business operations through the use of digital tools. The unprecedented circumstances of the COVID-19 pandemic, and the resulting public health measures, forced companies and workers to adapt their work environment in order to continue business operations and deliver goods and services, thus supporting the EU economy, jobs and growth. |
| --- | --- |

3.1.

| 3.2. | As greater advancements in online office tools (e.g. online meeting software) will allow some employees more and more to perform work activities from their home with more or equal efficiency, we expect to see the number of (cross-border) teleworkers rise in the EU. Lawmakers need to adjust existing rules to a new reality. |
| --- | --- |

3.2.

| 3.3. | While the possibility of teleworking can vary according to sector and job role, the EESC considers that the rise of teleworking should be welcomed and encouraged where possible. Next to more flexibility for employees, it can also provide benefits to the EU's wider Green Deal agenda, with fewer people travelling to work, and thus decreases in transport emissions and air pollution. The EESC recognises the particular relevance of the topic to the EU and the freedom of movement of workers in the Single Market. |
| --- | --- |

3.3.

| 3.4. | The EESC recognises the particular challenges the rise in cross-border teleworking pose to the international tax system. The EESC notes the obstacles employees reported in cross-border working situations even prior to the pandemic (12). The EESC welcomes the temporary tax measures Member States took during the height of the pandemic and the guidance issued by the OECD during the pandemic. These measures allowed cross-border employees and employers to carry on with business activities, and ensure both were not faced with double taxation, allowing businesses to continue supporting the EU economy and workers at an important time. |
| --- | --- |

3.4.

| 3.5. | The EESC underlines however how important it is that the taxation systems are updated further to answer the needs of today's work environment. In particular, it is important that employers, when installing teleworking arrangements, are not disincentivised to hire employees from outside the employer's jurisdiction because of taxation obstacles. Similarly, taxation rules should not be an obstacle for employees when applying for jobs in a cross-border situation. |
| --- | --- |

3.5.

| 3.6. | The EESC considers it essential that taxation rules regarding cross-border teleworking ensure that there is no double taxation or unintended non-taxation for both employees and employers. In ensuring that companies of all sizes can offer teleworking opportunities, it is important that any administrative obligations related to the taxation of cross-border teleworkers are eliminated or at least minimised (13). |
| --- | --- |

3.6.

| 3.7. | The international corporate tax framework has recently been overhauled through an agreement on an OECD/Inclusive Framework Tax Package consisting of two pillars. If employees increasingly engage in employment through teleworking, there might be a need to also review international taxation rules for individuals. In particular, rules must be easy to comply with. |
| --- | --- |

3.7.

| 3.8. | The EESC welcomes the discussions launched by the EC on this topic in order to update tax systems in order to reflect today's work environment based on increased teleworking, both with Member States and with stakeholders of the Platform for Tax Good Governance. The EESC refers to previous discussions that were made on this matter as part of the communication ‘Removing cross-border tax obstacles for EU citizens’ and the EC expert group report on ‘Ways to Tackle Cross-Border Tax Obstacles Facing Individuals in the EU’ (14). |
| --- | --- |

3.8.

4.   Specific comments

| 4.1. | Whilst recognising that countries have the right to decide on whether and at what rate they should levy taxes in their countries, taxation principles for cross-border teleworking should preferably be agreed at the global level. However, considering the inherent intra-EU mobility under the freedom of movement within the Single Market, there are reasons to address the issue at EU level before a global solution is found. While different approaches are possible, it is important that a high degree of coordination be achieved between EU Member States, and where possible with third-countries (United Kingdom, Switzerland, ...). |
| --- | --- |

4.1.

| 4.2. | The rules should be easy for both employees and employers. One possibility would be for Member States to agree to only tax the employee if the number of working days in the country exceeds 96 days per calendar year. The EESC notes that in the OECD/IF tax work, a Multi Lateral Instrument (MLI) has been used as a tool to facilitate a timely implementation of new tax rules. |
| --- | --- |

4.2.

| 4.3. | It seems to be warranted to have ambitious rules allowing for cross-border teleworking. If the rule of 183 days were applied, employees would gain more flexibility and environmental objectives would be more likely to be achieved. As the number of days is increased, the need for some kind of standardised reporting system also increases, and the establishing of some kind of compensatory mechanism for transferring tax revenues among countries may be required (15). |
| --- | --- |

4.3.

| 4.4. | The EESC asks the EC to consider whether a one-stop shop, like we have in the VAT area (16), could be a possibility. It would require the employer to report for cross-border teleworkers the number of days teleworkers worked in their country of residence and in the country where the employer is located. With this information, tax authorities would be able to assess in which country income would be taxable, or what part of the income would be taxable in each country. Such a recommendation was supported by the EC expert group in their report on ‘Ways to tackle cross border tax obstacles facing individuals in the EU’ (17). A tax revenue compensatory scheme among countries could be linked to the information reported in the one-stop shop. The taxpayer should face only one tax administration. |
| --- | --- |

4.4.

| 4.5. | The employer typically has to withhold taxes on the employee's wages and salaries. Furthermore, social security contributions to public pensions schemes and other social benefits for the employee are often paid separately but based on the income of the employee (18). It would considerably reduce the administrative burden if such levies could be paid by the employer for the employee in such a way that the one-stop shop would allocate the funds to the appropriate recipient country. Such a system would require close cooperation between tax authorities and electronic filing. |
| --- | --- |

4.5.

| 4.6. | The EESC has repeatedly asked for closer cooperation between Member States' tax authorities. Such cooperation would make life simpler for ordinary citizens and businesses and it would increase the possibilities to combat fraud and tax evasion more efficiently. To combat evasion, it is paramount that compliance be made easy. |
| --- | --- |

4.6.

| 4.7. | A one-stop shop system developed for cross-border teleworkers may serve as a first step to having an infrastructure allowing employees and employers to reduce tax disputes between Member States and at the same time ensuring that taxes are levied correctly without requiring the individual to file in multiple countries. |
| --- | --- |

4.7.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  While recognising the importance of employment contracts, social security contributions, pension rights, (physical and mental) health and safety concerns, impact on labour market organisations, competitiveness etc., the focus in this opinion is on the direct taxation of employees and employers in a situation where the employee is employed in a business in one country while performing a limited part of the work time from abroad by using teleworking tools. The opinion does not address posted workers, frontier workers as defined in bilateral agreements or self-employed workers engaged in cross-border sales.

1

(2)  The impact of teleworking and digital work on workers and society.

2

(3)  The impact of teleworking and digital work on workers and society.

3

(4)  Eurofound: ‘Labour market change: Teleworkability and the COVID-19 crisis: a new digital divide?’. Working Paper WPEF20020.

4

(5)  These structures cover teleworking, but also training and missions.

5

(6)  ‘Updated guidance on tax treaties and the impact of the COVID-19 pandemic’, OECD.

6

(7)  ‘Tax in an Increasingly Mobile Working Environment: Challenges and Opportunities’, by Commission Expert Group ‘Platform for Tax Good Governance’

7

(8)  See Judgment of European Court of Justice of 14 February 1995 in Case C-279/93 Schumacker.

8

Schumacker

(9)  ‘Tax compliance costs for SMEs: An update and a complement: final report’, 2022.

9

(10)  ‘Updated guidance on tax treaties and the impact of the COVID-19 pandemic’‘OECD Secretariat analysis of tax treaties and the impact of the COVID-19 crisis’.

10

(11)  ‘OECD Secretariat analysis of tax treaties and the impact of the COVID-19 crisis’.

11

(12)  See Commission Communication on Removing cross-border tax obstacles for EU citizens (COM(2010) 769 final), page 4: ‘EU citizens who move abroad to work temporarily or permanently or cross borders every day to go to work complain above all about difficulties in obtaining allowances, tax reliefs and deductions from foreign tax authorities. They also complain frequently about higher progressive tax rates applied to non-residents and higher taxation of foreign income. Double taxation problems also feature prominently, arising from conflicts in tax residence, limitations in the amount of credit available under bilateral double taxation treaties and even the lack of such treaties in certain cases.’

12

(13)  Workers who, following the pandemic, live permanently in another EU country other than where the firm is located and working remotely will be faced with many questions: Which social security system will be applicable; which tax authority will the employer have to pay taxes on their income; will the employer be able to continue to do the withholding tax; will the employment relationship have to be registered with the competent employment offices in the worker's new country of residence; what labour legislation should apply to the employment relationship etc.

13

(14)  ‘Ways to tackle cross-border tax obstacles facing individuals within the EU’.

14

(15)  The compensatory scheme developed for international corporate taxation is to allocate a portion of the profit in highly profitable companies to the country of sales (Amount A in Pillar 1). It is important that any compensatory scheme between countries due to cross-border teleworking is as simple as possible. The number of days and earned income should be the key parameters to consider.

15

(16)  The VAT One-Stop-Shop (MOSS) was put in place by the EU to ease the burden on businesses selling to consumers in other EU Member States. One Stop Shops permit businesses to submit a single VAT return declaring sales in multiple EU Member States, rather than having to register for VAT in each country.

16

(17)  ‘Ways to tackle cross-border tax obstacles facing individuals within the EU’.

17

(18)  The EESC recognises the need to also address the effect on benefits like pensions etc. if social security contributions are divided between countries. This may be the subject of future work by the EESC.

18

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/22 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/22

---

Opinion of the European Economic and Social Committee on digital identity, data sovereignty and the path to a just digital transition for citizens living in the information society

(own-initiative opinion)

(2022/C 443/03)

| Rapporteur: | Dumitru FORNEA |
| --- | --- |

Rapporteur:

Dumitru FORNEA

| Legal basis | Rule 52(2) of the Rules of Procedure
  Own-initiative opinion |
| --- | --- |
| Plenary Assembly decision | 20.1.2022 |
| Section responsible | Transport, Energy, Infrastructure and the Information Society |
| Adopted in section | 21.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 179/1/3 |

Legal basis

Rule 52(2) of the Rules of Procedure

Own-initiative opinion

Plenary Assembly decision

20.1.2022

Section responsible

Transport, Energy, Infrastructure and the Information Society

Adopted in section

21.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

179/1/3

1.   Conclusions and recommendations

| 1.1. | Technological progress and the evolution of digital technologies, biotechnologies and electronic communications systems have created important opportunities to consolidate economically prosperous, more inclusive and just societies. At the same time, a number of dangerous threats to humanity have developed. |
| --- | --- |

1.1.

| 1.2. | In order to maintain the security of humankind and the social fabric necessary for every individual to live a fulfilling life on this planet, we must ensure that the new tools of governance that are imposed with the digital and industrial revolution are not oppressive and do not make the daily lives of individuals conditional on compulsory incorporation in digital technological systems controlled in an undemocratic way. |
| --- | --- |

1.2.

| 1.3. | Public institutions are vulnerable to non-state actors with direct access to knowledge, patents, technologies and investment funds. The European Economic and Social Committee (EESC) believes that European technological sovereignty must be included in all future policy developments and the legislation must be supplemented with explicit and fully applicable regulations and common standards across all Member States. |
| --- | --- |

1.3.

| 1.4. | Technological developments affect many citizens' rights and freedoms. The Committee requires that all sectors that use personal data and biodata should be regulated in a clear manner and in full compliance with fundamental human rights, and calls for the GDPR to be updated accordingly. |
| --- | --- |

1.4.

| 1.5. | The EESC is convinced that digital identity, digital means of payment and incorporation into virtual and augmented reality platforms should remain tools that only complement the physical existence that we knew before the adoption of these technologies and should not completely and abusively replace other existential patterns that have been developed and perfected by humans over thousands of years of existence. |
| --- | --- |

1.5.

| 1.6. | The EESC calls for clear anti-discrimination provisions in all future legislative proposals on digital identity and is totally against the introduction of a system that keeps close tabs on European citizens, tracks them and/or monitors their activities and behaviour. Furthermore, the Committee deems it necessary that organised civil society be thoroughly involved in the implementation process. |
| --- | --- |

1.6.

| 1.7. | The EESC has come to the conclusion that any initiative to integrate citizens into the European digital identity system should be based on impact studies and comprehensive sociological surveys. The final decision should only be made with the citizen's informed and freely expressed consent. |
| --- | --- |

1.7.

| 1.8. | The EESC believes that in order to move democratically towards a fair digital society that is accepted by EU citizens, the European Commission must carry out impact assessments on:






  — | The enormous and 24/7 need for energy to maintain the global technological infrastructure to support uninterrupted and secure access to a digital system aimed at transferring the critical and strategic functionalities of human society; |
| --- | --- | --- |

1.8.

—

The enormous and 24/7 need for energy to maintain the global technological infrastructure to support uninterrupted and secure access to a digital system aimed at transferring the critical and strategic functionalities of human society;

| — | The impact of digitisation and automation of human interaction on quality of life and working conditions, especially in terms of human relations, increasing the prevalence of loneliness, mental health issues, declining cognitive and emotional intelligence and increased risk of social alienation; |
| --- | --- |

—

The impact of digitisation and automation of human interaction on quality of life and working conditions, especially in terms of human relations, increasing the prevalence of loneliness, mental health issues, declining cognitive and emotional intelligence and increased risk of social alienation;

| — | The political, economic and social measures needed to adapt society to the dramatic quantitative changes in the labour market; |
| --- | --- |

—

The political, economic and social measures needed to adapt society to the dramatic quantitative changes in the labour market;

| — | Cyber security, in the context of which the diversity and complexity of hackers' activities has increased and regarding the conditions of the accelerated development of the Internet of Things which make access protocols vulnerable and permeable. |
| --- | --- |

—

Cyber security, in the context of which the diversity and complexity of hackers' activities has increased and regarding the conditions of the accelerated development of the Internet of Things which make access protocols vulnerable and permeable.

| 1.9. | The EESC concludes that data security should be non-negotiable and is disappointed that the security of the future digital European wallet is not the top priority in the Commission's legislative proposal. |
| --- | --- |

1.9.

| 1.10. | The EESC considers that full accountability for possible malfunctions must be clearly provided for in all the EU legislative proposals on artificial intelligence. The right balance must be struck between not disclosing commercial secrets and ensuring transparent and traceable developments. |
| --- | --- |

1.10.

| 1.11. | The Committee was the first European institution to call for a ‘human in command’ approach and reiterates the need for several layers of control to ensure that. |
| --- | --- |

1.11.

| 1.12. | The EESC is totally against private facial recognition databases except for crime purposes and any type of social scoring system, as these violate EU fundamental values and rights. |
| --- | --- |

1.12.

| 1.13. | The Committee believes that the data produced in the EU should be stored on EU soil and should be protected from any extra-territorial access. Furthermore, the EESC believes that informed consent on data use must be implemented for both personal and non-personal data and calls once again for the GDPR to be upgraded in this regard. |
| --- | --- |

1.13.

| 1.14. | The EESC is worried about the growing disparities between Member States and the lack of protection of vulnerable groups and calls again for an EU that embraces digital inclusion where no one is left behind. Special attention should be paid to the older generation. |
| --- | --- |

1.14.

| 1.15. | The Committee calls for a strong European digital education system that can prepare the workforce for technological challenges and help them acquire high quality jobs. Digital literacy programmes must be implemented in all Member States, together with lifelong digital learning programmes, vocabulary tutorials and practical training. |
| --- | --- |

1.15.

| 1.16. | The Committee considers engaging employees in the digital transition to be vital so they can understand the future risks and opportunities so that knowledge can be transferred and new skills can be acquired. |
| --- | --- |

1.16.

2.   Background

| 2.1. | European citizens are interested in developments in implementing digital technology solutions to simplify the administrative procedures necessary for dealing with authorities or in everyday life in society. This opinion aims to raise awareness among national and European decision-makers about the concerns of organised civil society related to the potential adverse societal effects associated with the accelerated deployment of digital technologies. |
| --- | --- |

2.1.

| 2.2. | The COVID-19 pandemic has speeded up the digital transformation of societies and forced citizens to embrace new technologies for work, study and other daily activities. It has provided opportunities for businesses and citizens to upgrade digitally and progress. |
| --- | --- |

2.2.

| 2.3. | The benefits of the widespread implementation of a digital identity are widely explained in various documents of the European institutions and global international organisations. In this respect, the most recent document is the Proposal for a Regulation as regards establishing a framework for European Digital Identity (1), published on 3 June 2021. |
| --- | --- |

2.3.

| 2.4. | The European Commission aims to provide a European digital identity framework based on the revision of the current framework, so that at least 80 % of citizens have an electronic identification solution to access essential public services by 2030 (2). Public authorities must be equipped with the necessary human and financial resources to be able to include and control digital technological developments. |
| --- | --- |

2.4.

| 2.5. | As evidence of this, it should be noted that the Digital Economy and Society Index (DESI) (3) published by the European Commission in 2021 shows that, in 2020, the percentage of people with at least basic digital skills was 56 %. However, a large part of the EU population does not yet have basic digital skills, even though most jobs require them. Many citizens claim to have digital skills, but on closer inspection, these are no more than the ability to make basic use of the opportunities offered by the internet (browsing and social networking) and the software packages offered by Microsoft Office or Mac OS. |
| --- | --- |

2.5.

| 2.6. | Regarding artificial intelligence, a recent study released by the European Investment Bank (4) shows that Europe is still lagging behind other economic world powers. It mentions that the US and China together account for more than 80 % of the EUR 25 billion in annual equity investments in AI and blockchain technologies. The EU only accounts for 7 %, and the total investment gap is between EUR 5 and 10 billion per year. |
| --- | --- |

2.6.

| 2.7. | The Commission has proposed to close this gap and provide EUR 1 billion investment per year in AI, which should be supplemented by private investment and Member States' own resources. The target is to reach EUR 20 billion in investment per year over the coming decade (5). |
| --- | --- |

2.7.

3.   General comments

| 3.1. | Technological progress in general and the evolution of digital technologies, biotechnologies and electronic communications systems over the last two decades have created enormous opportunities globally to consolidate economically prosperous, more inclusive and just societies. |
| --- | --- |

3.1.

| 3.2. | At the same time, without a new social contract and a regulatory framework adapted to these new technologies with disruptive impact, a number of dangerous threats to humanity have developed (like job loss due to automation advancements and deployment, privacy violations, algorithmic bias caused by bad data, market volatility, etc.), especially given the constant attempts of global tech giants to impose their products and services, by-passing the existing body of legislation at international and national level that guarantees fundamental human rights. |
| --- | --- |

3.2.

| 3.3. | International and national government institutions are vulnerable to non-state actors with direct access to knowledge, patents, technologies and investment funds, as often the staff of these institutions fail to grasp the full societal impact of new technologies on the rights of citizens and consumers. The Committee is convinced that EU technological sovereignty considerations must be included in all future policy developments. |
| --- | --- |

3.3.

| 3.4. | The EESC calls for the legislation to be clarified and supplemented with explicit and fully applicable regulations and common standards across all Member States, including related responsibilities, regarding the fact that digital identity-related technologies are largely managed by computer algorithms and artificial intelligence, which cannot be held responsible for the mistakes they make. |
| --- | --- |

3.4.

| 3.5. | There are already many documented situations, which have been studied in detail, in which people are affected and unjustly condemned for the wrong decisions of computer algorithms and artificial intelligence. For example, decision-makers in the security and police forces are misled by the incorrect results of computer algorithms such as ‘artificial intelligence’, ‘facial recognition’, ‘machine learning’, ‘data analysis and forecasting’, ‘timesheets and scores’, etc. As a result, many citizens' rights and freedoms are affected. |
| --- | --- |

3.5.

| 3.6. | Therefore, the legal rules that will be developed to cover the field of digital identity and its related technologies must be based primarily on full transparency, correct and complete information of users and free informed consent, and must ensure full protection that caters for all the cyber vulnerabilities of mobile communication networks and their devices, etc. For these reasons, the EESC requires that all sectors that use personal data and biodata, such as digital identity or the 5G mobile communications networks, artificial intelligence and so forth must be regulated in a distinct, clear manner and in full compliance with fundamental human rights. |
| --- | --- |

3.6.

4.   Specific comments

Digital identity

| 4.1. | When it comes to digital ID implementation in Europe, data management is vital to ensure citizen's protection and safeguard their privacy. Full compliance with General Data Protection Regulation (GDPR) must be ensured. |
| --- | --- |

4.1.

| 4.2. | European citizens are at the centre of any programmes and policies implemented in the EU. The EESC appreciates and supports the release of the Commission Proposal on Digital Identity for all Europeans (6), which specifies that the choice of whether or not to use a digital ID must lie with the individual. Still, the Committee considers that the impact of the exclusion of certain citizens who will not opt for a digital ID has been downplayed and insists that the right to be forgotten and right to disconnect be clearly implemented in the EU legislation. |
| --- | --- |

4.2.

| 4.3. | The EESC calls for clear anti-discrimination provisions in all future legislative proposals on the subject. Whatever the reason why any citizen might decide not to use such a feature, be it for data protection or anonymity reasons or other, they must not be placed at a disadvantage compared to active users or marginalised. Individual data should always remain the property of the respective individual while protection of human rights must underpin the implementation of digital ID. In order to guarantee data protection and security, as well as respect for private life, the Committee proposes that the digital identity of EU citizens be managed, in each Member State, by a public service body, under the authority of the State and subject to democratic control by national parliaments. |
| --- | --- |

4.3.

| 4.4. | The introduction of a digital ID in Europe should have the purpose of enabling secure and easy connectivity for consumers. It must provide, among other things, improved data and public service delivery, enhanced targeted government programmes and greater credit market efficiency. The EESC is in favour of such a scenario. However, the Committee notes that the implementation of the digital ID entails a series of risks in terms of privacy and data protection and is totally against the introduction of a system that keeps close tabs on European citizens, tracks them and/or monitors their activities and behaviour. |
| --- | --- |

4.4.

| 4.5. | Cybersecurity is an important aspect of the implementation, with the risk of hacking important personal and financial data being high. The EESC is looking forward to the final version of the proposed legislation and the agreement between Member States on the standards, technical specifications and interoperability aspects, which should be in place by October 2022. The EESC considers that organised civil society, including social partners, NGOs and academia, must be thoroughly involved in the implementation process. |
| --- | --- |

4.5.

| 4.6. | Fraud remains one of the greatest risks connected to the implementation of the digital ID. Phishing messages that we all receive today will be multiplied and targeted at the most vulnerable groups in Europe. The EESC considers that the security issues around this matter have not been thoroughly quantified and is disappointed that the security of the future digital wallet is not the most important issue in the EC proposal establishing a framework for a European Digital Identity. Synthetic ID fraud has happened in other parts of the world where similar systems are implemented and the EU should familiarise itself with and tackle these issues before implementation. Therefore, the Committee considers that data security should be non-negotiable. |
| --- | --- |

4.6.

AI — Artificial intelligence

| 4.7. | The digital single market needs AI to evolve and progress. Artificial intelligence is based on algorithms that require huge amounts of private data and metadata. Society needs to benefit from technological developments and algorithm-based applied science. However, when implementing AI technologies it must be ensured that the historically marginalised communities are able to cope with the programmes and that the existing social disparities are not exacerbated. |
| --- | --- |

4.7.

| 4.8. | The EESC was the first European institution to call for a human in command approach when dealing with AI systems (7). The EESC reaffirms that it is paramount that humans have the last say and are in full control of decision-making processes when it comes to machine developments. |
| --- | --- |

4.8.

| 4.9. | Intellectual property protection can be used as an argument for non-transparent AI developments. The EESC considers that the right balance must be struck between not disclosing commercial secrets and ensuring transparent and traceable developments. Furthermore, accountability for possible malfunctions must be clearly provided for in all the EU legislative proposals on artificial intelligence and liability should be placed on the developers, coders, AI designers and rightful owners. |
| --- | --- |

4.9.

| 4.10. | The Committee feels that AI technologies must be implemented in a socially sustainable way, taking into consideration human rights, European values, gender equality, cultural diversity, the interests of disadvantaged groups and intellectual property rights. |
| --- | --- |

4.10.

| 4.11. | Further progress is needed on the GDPR regulation in order to make sure that algorithms are in full compliance with and respect European law and the Committee requests the development of common ethical rules that ensure free access to the source codes of algorithms. |
| --- | --- |

4.11.

| 4.12. | AI has the potential to contribute to reaching the climate and environmental goals, but one must take into consideration the huge amount of energy that is used for running these digital systems, as well as other challenges related to internalising the external costs. The EESC proposes enhanced monitoring of this aspect and calls for the digital companies to make progress on carbon emission reduction. |
| --- | --- |

4.12.

| 4.13. | In key areas like defence or cybersecurity, control of humans over robots must be guaranteed and the EESC calls for a very specific framework at EU level that ensures this, and that human intervention must always be possible to repair the errors of any automated decision-making system. |
| --- | --- |

4.13.

| 4.14. | The EESC is wholly against private facial recognition databases, except for crime purposes, and any type of social scoring system, as these violate EU fundamental values and rights. |
| --- | --- |

4.14.

| 4.15. | With regard to the social aspects, the EESC is worried that AI developments will have a huge impact on the labour markets, potentially causing an unemployment crisis. Furthermore, they could impact on human behaviour and lead to laziness and superficiality. |
| --- | --- |

4.15.

Big data

| 4.16. | The EESC welcomes the Data Act (8) issued by the European Commission in February 2022 and considers it an ethical framework for the transparent processing of personal data, with the citizens and businesses that generate them in full control. It also makes it possible for data to be used by a larger number of stakeholders and citizens, with extended benefits for consumers, businesses and public authorities, leading therefore to a fair data-driven economy. |
| --- | --- |

4.16.

| 4.17. | Large amounts of data are now available to public authorities and a handful of big tech giants such as Google, Facebook (Meta), TikTok or Amazon. Unfortunately, only a limited number of stakeholders benefit today from it and the EESC is worried that the data produced in the EU is stored, processed and produces value outside Europe (9). The Committee considers that EU digital sovereignty will be hard to achieve without its own EU digital tech giants, without storing European data on EU soil and without protection of these data from any extra-territorial access. |
| --- | --- |

4.17.

| 4.18. | Big data management must always respect human rights as enshrined in Article 21 of the Charter of Fundamental Rights of the European Union (10), especially when algorithms are used in the decision-making process. EU-based cloud providers hold only a small part of the international market, which is largely dominated by US companies. This puts the EU at disadvantage and is limiting investment possibilities in the data processing market. It is also hindering the competitiveness of large companies and their possibility to grow and gain markets, and prevents SMEs from scaling up. The Committee salutes the EC Communication on A competition policy fit for new challenges (11) and the importance placed on digital transformation when reshaping the future EU competition framework. |
| --- | --- |

4.18.

| 4.19. | The Committee considers that informed consent on data use must be implemented for both personal and non-personal data. The EESC calls once again for the GDPR to be upgraded in this regard. |
| --- | --- |

4.19.

Just digital transition and digital literacy in the EU

| 4.20. | The Committee notes a changing labour market with more and more sectors of the economy complaining of the lack of a skilled and qualified labour force. It also notes a decline in qualifications and lack of specific know-how and expertise. |
| --- | --- |

4.20.

| 4.21. | The EESC has called in previous opinions for a Union that embraces digital inclusion where no one is left behind. Years later, disparities between Member States are growing and vulnerable groups are still unprotected, especially the older population, which is the most exposed. |
| --- | --- |

4.21.

| 4.22. | The Committee is worried about the existing digital divide in the EU and calls for digital literacy programmes to be implemented in all Member States in a coordinated manner and calls for lifelong digital learning, including open-source solutions as free alternatives to commercial ones, to become a reality in the EU. Creating digital skills begins with vocabulary tutorials and finishes with practical training. |
| --- | --- |

4.22.

| 4.23. | Engaging employees in the digital transition is vital so they can understand the future risks and opportunities at the same time. Changing workplace environments require knowledge to be transferred and new skills to be acquired, but also improved working conditions for people working through digital labour platforms. |
| --- | --- |

4.23.

| 4.24. | The EESC calls for a strong European digital education system that can prepare the workforce for technological challenges and help them acquire high quality jobs, and recalls in this regard the European Social Partners Framework Agreement on Digitalisation. |
| --- | --- |

4.24.

| 4.25. | The Committee has already called for the need for STEM solid competences in science, technology, engineering and mathematics to be further improved (12). |
| --- | --- |

4.25.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 910/2014 as regards establishing a framework for a European Digital Identity (COM(2021) 281 final).

1

(2)  Digital Identity for all Europeans.

2

(3)  https://digital-strategy.ec.europa.eu/en/policies/desi

3

(4)  EIB study: Artificial intelligence, blockchain and the future of Europe: How disruptive technologies create opportunities for a green and digital economy.

4

(5)  European Commission — A European approach to artificial intelligence.

5

(6)  Digital Identity for all Europeans, COM(2021) 281 final.

6

(7)  OJ C 288, 31.8.2017, p. 1.

7

(8)  European Commission — Data Act.

8

(9)  Eurostat reports that only 36 % of EU enterprises used cloud services in 2020 and most of them for email and storage, with only 19 % of cloud companies used.

9

(10)  OJ C 326, 26.10.2012, p. 391.

10

(11)  EC Communication — A competition policy fit for new challenges (COM(2021) 713 final).

11

(12)  OJ C 14, 15.1.2020, p. 46, OJ C 10, 11.1.2021, p. 40, OJ C 228, 5.7.2019, p. 16, OJ C 75, 10.3.2017, p. 6, OJ C 374 16.9.2021, p. 11.

12

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/29 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/29

---

Opinion of the European Economic and Social Committee: analysis of the role of organised civil society in the new EU-Organisation of African, Caribbean and Pacific States (OACPS) Agreement, including the situation of the EPAs in this framework

(own-initiative opinion)

(2022/C 443/04)

| Rapporteur: | Carlos TRINDADE |
| --- | --- |

Rapporteur:

Carlos TRINDADE

| Plenary assembly decision | 21.10.2021 |
| --- | --- |
| Legal basis | Rule 52(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | External Relations |
| Adoption in section | 9.6.2022 |
| Adoption at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 170/0/1 |

Plenary assembly decision

21.10.2021

Legal basis

Rule 52(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

External Relations

Adoption in section

9.6.2022

Adoption at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

170/0/1

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) notes that the European Union (EU) has long established a framework of values and objectives governing its relations with the African, Caribbean and Pacific (ACP) States, specifically: democracy, good governance, human rights, inclusive sustainable growth and decent work, turning mobility and migration into opportunities, human development, the environment and ‘join[ing] forces in the global arena on areas of common interests’. In view of relations with neighbouring third countries, security is to be added to these objectives. |
| --- | --- |

1.1.

| 1.2. | The EESC endorses this framework of values and objectives, set in a range of international agreements with the ACP States since 1960, and with which the EU has conducted its trade and development cooperation relations. |
| --- | --- |

1.2.

| 1.3. | The EESC broadly supports the new Agreement and hopes that it can be signed swiftly by the parties, whom it commends for their great efforts and the significant commitments made using the United Nations Sustainable Development Goals (SDGs) as a reference framework. |
| --- | --- |

1.3.

| 1.4. | In particular, the EESC strongly proposes to the Commission that the development cooperation architecture underpinning the new Agreement and the Economic Partnership Agreements (EPAs) should be the subject of in-depth reflection and new decisions, taking into account the experience of COVID-19 (which raises the issue of critical health infrastructure) and the geopolitical consequences of the Ukraine war (including food security, energy prices and threats to democracy). The EESC underlines that these two key global events, which have profoundly changed the global landscape, have created the need for more complex and urgent responses in the ACP States, requiring a form of international cooperation that is quite different to the current one. |
| --- | --- |

1.4.

| 1.5. | The EESC is pleased that the new Agreement has recognised the importance of the role played by civil society organisations and the social partners and welcomes the acceptance of this recognition by the signatory parties. |
| --- | --- |

1.5.

| 1.6. | The EESC takes a very positive view of the fact that the new Agreement, both in the common foundation and in each of the regional protocols, repeatedly refers (albeit with different wording) to the importance of having institutional mechanisms for the participation, information, hearing and structured consultation of civil society (institutional mechanisms). |
| --- | --- |

1.6.

| 1.7. | The EESC points out that civil society organisations/the social partners have their own institutional mechanisms, where they formally express their opinions, proposals and criticisms. It is essential to have legally regulated institutional mechanisms carrying out formal activities, in which civil society organisations (practising civil dialogue) and the social partners (conducting civil dialogue) participate, regardless of what they are called (economic, social and cultural committees, consultative councils, forums, platforms, CSO networks, standing conferences or other types), in order to contribute to public and democratic debate. Formalising these institutional mechanisms makes society more resilient because it boosts citizenship and drives democratic life. |
| --- | --- |

1.7.

| 1.8. | The EESC notes that in the EU and in the ACP states, the reality for civil society organisations and the social partners and institutional mechanisms is very different, due to economic, social, cultural and political differences between regions, sub-regions and countries. In the ACP States, informality is an undeniable reality and must be taken into account in the activities of civil society organisations and the social partners and in the implementation and operation of institutional mechanisms. If this is not done, the general public will not benefit from the results of the new Agreement. The EESC takes the view that it is absolutely necessary to create solutions that overcome existing difficulties, in particular, those concerning technical capacity and financial support for civil society organisations and the social partners. The EESC believes that there is a body of good practice within the EU- OACPS that needs to be identified and replicated in other countries. The EU-ACP Follow-up Committee is one such example and is capable of carrying out this task. |
| --- | --- |

1.8.

| 1.9. | The EESC sets an objective for its involvement in this process: the implementation of institutional mechanisms and promoting and supporting civil society organisations and the social partners in the ACP states, thus recognising their role as driving forces behind sustainable development, particularly in light of the UN SDG 17. |
| --- | --- |

1.9.

| 1.10. | The EESC proposes that the Commission, while respecting the structure of the new Agreement, set as an objective the establishment of four institutional mechanisms, namely: the first one, between the EU and the OACPS, supported by the common foundation; the second, between the EU and Africa, supported by the EU-Africa Regional Protocol; the third, between the EU and the Caribbean, supported by the EU-Caribbean Regional Protocol and, the fourth, between the EU and the Pacific, supported by the EU-Pacific Regional Protocol. |
| --- | --- |

1.10.

| 1.11. | The EESC also proposes to the Commission that consultative committees be created in the EPAs. The EESC affirms that the role of civil society organisations/social partners in EPAs is irreplaceable and should be strengthened. The EESC therefore endorses the recommendations made in the opinion REX/536, which should be implemented in current and future EPAs, and considers the Cariforum Consultative Committee to be an excellent example of good practice, which should be disseminated and replicated. |
| --- | --- |

1.11.

| 1.12. | The EESC strongly proposes to the Commission that in future the various institutional mechanisms to be operated within the EU-OACPS (common foundation + regional protocols + EPAs) should be properly organised so as to create synergies and optimise resources, especially financial resources. The institutional mechanisms, if they focus on their mission closely and rigorously, operating as a network and working together as a single and structured system, will thus demonstrate their importance to the resilience of societies, economic growth and people's wellbeing. |
| --- | --- |

1.12.

| 1.13. | The EESC strongly advocates that the Commission put financial instruments in place to support programmes and study and foresight projects focusing on the situation for civil society organisations/social partners in the ACP states, taking into account their needs in terms of empowering leaders, their technical robustness, and the implementation of the planned institutional mechanisms. The EESC stresses that the aim is to contribute in this way to strengthening the existence of democratic civil society organisations/social partners under the new Agreement, with competent action and active involvement from their members. |
| --- | --- |

1.13.

| 1.14. | The EESC strongly urges the Commission to support the work of the EESC's EU-ACP Follow-up Committee, which is the only institutional mechanism that currently exists under the new EU-OACPS Agreement and which will have an enhanced role in this process, particularly through structured dialogue, in order to: (i) provide the institutions with relevant reports, projects and opinions; (ii) encourage the involvement of stakeholders from the ACP states (iii) contribute to the establishment of planned institutional mechanisms. |
| --- | --- |

1.14.

2.   General comments on the historical context and strategic objectives

| 2.1. | In 2016, the EU approved a set of priorities for common interests in the renewed partnership with the countries of the Organisation of African, Caribbean and Pacific States (OACPS), which were reaffirmed in subsequent documents and consist of: democracy, good governance, human rights, inclusive sustainable growth and decent work, turning mobility and migration into opportunities, human development, the environment and ‘join[ing] forces in the global arena on areas of common interests’ (1). Security issues can be added to this list, to take account of countries' relations with their closest neighbours. This categorisation consolidates previous EU objectives in this field. |
| --- | --- |

2.1.

| 2.2. | The EU has formalised these objectives through international agreements, first through the Yaoundé Convention, then with the Lomé Agreements, subsequently with the Cotonou Agreement and now through the negotiation of the post-Cotonou Agreement. At the same time, the EU has concluded Economic Partnership Agreements with a number of ACP States or groups of States. |
| --- | --- |

2.2.

| 2.3. | The EPAs are the most general economic instrument for putting this strategy into practice. They set out its objective of smoothly and gradually integrating the ACP States into the world economy and of eradicating poverty, while stressing that the differences between levels of development of the Parties and the specific economic, social and environmental features of each economy and, in particular, the degree of informality in each state or sub-region needs to be taken into account in the negotiations. |
| --- | --- |

2.3.

| 2.4. | The EESC is of the view that the lessons learned from the pandemic, namely, the difficulties faced by health systems, the harmful consequences for the economy, the increase in social inequalities and poverty, structural problems in relation to accessing or producing medicines and vaccines, the validity of digital tools, threats to human rights and democracy, the enormous economic dependency, inter alia, have highlighted the need to rethink development cooperation architecture. This should be considered in the implementation and redesign of EU-OACPS strategies. |
| --- | --- |

2.4.

3.   Specific comments on the post-Cotonou Agreement

| 3.1. | A 15-year evaluation of the Cotonou Agreement was carried out in 2015, identifying its successes and weaknesses. |
| --- | --- |

3.1.

| 3.2. | The Cotonou Agreement was due to end in February 2020. However, discussions on sensitive topics and the pandemic made it impossible to renew the agreement on the date scheduled and it was only in April 2021 that the text of the renewed partnership agreement, commonly known as the ‘post-Cotonou Agreement’ was initialled by the EU and the OACPS. |
| --- | --- |

3.2.

| 3.3. | In order to take account of the diversity of the signatory countries and focus on the specific application in each region, the new Agreement includes a common foundation accompanied by three binding regional protocols (Africa, Caribbean, Pacific). The complexity of this structure will require the EU-ACP Follow-up Committee to be more proactive in the future. |
| --- | --- |

3.3.

| 3.4. | The priorities in the new Agreement demonstrate the commitment by the Parties to achieving the UN Sustainable Development Goals (SDGs) and are organised into six areas: (i) human rights, democracy and governance; (ii) peace and security; (iii) human development (which includes health, education, sanitation, food security, social cohesion, culture and gender equality, as well as development cooperation commitments); (iv) economic growth and inclusive and sustainable development (including an EPA approach); (v) environmental sustainability and climate change; (vi) migration and mobility. These priorities are of paramount importance for civil society organisations and the social partners. |
| --- | --- |

3.4.

| 3.5. | Tackling the effects of the COVID-19 pandemic in the EU and ACP states should be added to these priorities, both with regard to the risks of shrinking democracy and economic and social recovery, due to the low prospects for recovery in the ACP States and the resulting increase in poverty and inequality. |
| --- | --- |

3.5.

| 3.6. | In particular, the EESC stresses that the issue of critical infrastructure in ACP countries remains as important as ever, as the pandemic has shown. Sustainable development is intrinsically linked to resilient infrastructure that promotes and supports economic activity and social progress and it is instrumental in achieving the SDGs — Agenda 2030 and the African Agenda 2063. The EESC stresses that development cooperation continues to be a necessary condition for its success, although it is not sufficient, and underlines the importance of strengthening it in the ACP countries. |
| --- | --- |

3.6.

| 3.7. | In this context, the EESC stresses, in particular, the importance of critical health infrastructure. The existence of a universal, easily accessible and generally free health service in the ACP States is essential for the well-being of the population and for sustainable development. In particular, rapid access to vaccines (patents and technical capacity for local production) will give ACP societies the resilience they need in the event of any pandemics that might occur in future. The EESC notes that this important matter is not included in the new Agreement and calls on the EU and the OACPS to take it into consideration when the agreement is implemented. |
| --- | --- |

3.7.

| 3.8. | The EESC considers that the new Agreement must take into account the impact of the current European and global geopolitical situation, in particular with regard to the consequences of the war in Ukraine (including food security, energy prices and threats to democracy) on development cooperation in general and on the EPAs in particular. The EESC draws attention to the fact that the current situation has led to an increase in competition for influence with the ACP states and calls on the EU to boost its capacity for cooperation with these countries, particularly in economic, social and cultural terms. |
| --- | --- |

3.8.

| 3.9. | With regard to formal mechanisms for participation, information, hearing and structured consultation of civil society, (‘institutional mechanisms’), the EESC very much welcomes the following statements in the Agreement: firstly, that the Parties shall set up ‘open and transparent mechanisms for structured consultation with stakeholders’ (2); the Parties ‘shall set up mechanisms for [...] consultation’ (3); ‘the Parties shall establish and develop consultation and dialogue mechanisms’ (4), or finally, that the Parties ‘shall foresee consultation and dialogue mechanisms’ (5). |
| --- | --- |

3.9.

4.   Specific comments on the Economic Partnership Agreements (EPAs) between the EU and African, Caribbean and Pacific countries

| 4.1. | The negotiations on nine EPAs have led to seven regional agreements entering into force, with 32 out of 79 ACP countries (14 Caribbean, 14 African and four Pacific countries). Five of these seven agreements are being applied provisionally, as they have not yet been ratified by all EU members. The remaining two, with West and East Africa, are not yet being applied provisionally due to delays in signature and ratification by African countries. A further 21 states have concluded the EPA negotiations that are still to be implemented. |
| --- | --- |

4.1.

| 4.2. | The EESC points out that EPAs entail both opportunities and risks. It is crucial to ensure a partnership of equals that not only delivers economic growth but also guarantees well-being and social justice. The action of civil society organisations/social partners is key to achieving these objectives. |
| --- | --- |

4.2.

| 4.3. | However, civil society organisations and the social partners in the EU and partner states have criticised the EPAs. |
| --- | --- |

4.3.

| 4.4. | This criticism concerns the design of EPAs and the possible limiting effect on productive growth in ACP countries, even though protection of national industries, such as agri-food industries, among others, has been made possible. Free trade between the EU and OACPS is an advantage of the EPAs, but in several cases it has had the adverse effect of decreasing customs revenues, in particular, reducing taxes on external trade. In addition, it can undermine micro-, small- and medium-sized enterprises or cooperatives, the basis of the family economy, given the difference between the economic levels of the EU and the ACP States, as several civil society organisations and the social partners have vigorously pointed out. |
| --- | --- |

4.4.

| 4.5. | The role of civil society is included in the EPAs in several ways. It takes different forms and grants civil society organisations different levels of influence when discussing and monitoring these agreements. For example, the EPA with Côte d'Ivoire led to the establishment of the Ivorian Civil Society Convention (CSCI), which set up a project (6) to monitor the effects of the EPA on the family economy. In addition, as internal meetings focus on ‘sustainable development’, civil society's influence is limited on other topics. |
| --- | --- |

4.5.

| 4.6. | Some EPAs provide for additional bodies such as a Joint Parliamentary Committee, as is the case for Cariforum and the West Africa EPA. |
| --- | --- |

4.6.

| 4.7. | Since the EPAs explicitly mention that they are included in the priorities of the Cotonou Agreement, the new Agreement gives the signatory Parties the opportunity to cultivate the involvement of civil society organisations and the social partners in a wider, more harmonised and more institutionalised way and full advantage should be taken of this. Not least because, as can be seen from the assessment of its implementation by the EU in September 2021, the process has been slow in this area. The most effective way to implement the institutional mechanisms provided for in the EPAs is for public institutions to inform civil society organisations/social partners on the process in a timely and detailed manner and to invite them to participate in a structured way and to undertake studies and reasoned proposals. |
| --- | --- |

4.7.

5.   Specific comments on the concept, representativeness, action and institutional mechanisms of civil society and the social partners

| 5.1. | The EESC positions itself as the ‘House of European Civil Society’. The EESC is a consultative body of the European Union set up under Article 13 of the Treaty on European Union. It is composed of 329 members representing employers (Group I), workers (Group II) and civil society organisations (Group III). It is the European institutional mechanism through which these interests express their views on topical EU issues as part of a structured dialogue. |
| --- | --- |

5.1.

| 5.2. | The EESC points out that civil society organisations include associations with a wide range of objectives. They represent members who are registered and carry out roles within society, including, inter alia: taking action to promote people's welling, taking action to promote social inclusion and tackle exclusion, protecting the social, economic, cultural and professional rights and interests of communities and/or groups of citizens, protecting the environment and tackling climate change, standing up for human rights, whistleblowing (vigilance), warning and putting pressure on state bodies, in order to protect the interests of their members and to uphold their societal values. |
| --- | --- |

5.2.

| 5.3. | The economic, social and political realities of society, which is home to a broad and varied range of organisations, determine the shape of these organisations. This should lead us to avoid considering them as the key player in promoting sustainable development, despite their important and commendable role. |
| --- | --- |

5.3.

| 5.4. | The EESC underlines that within this multifaceted reality, the high level of economic and social informality that generally exist in the ACP states and which heavily characterise and determine social organisational and institutional relations, must be duly taken into account. In this context, civil society organisations and the social partners tend to experience great difficulties in setting up, organising and operating institutions, economic support and formal activities. These civil society organisations/social partners should receive exceptional financial support. Otherwise, they will be unable to contribute, through their involvement and action, to the sustained development, exercise of citizenship and democratic resilience of their country. |
| --- | --- |

5.4.

| 5.5. | The activities undertaken by civil society organisations depend on the social role they want to have (more civic or political), their size, the social importance that their members and their society grants them, the leadership they achieve, the funding they need for their objectives and in this regard, any constraints imposed by their financial backers. |
| --- | --- |

5.5.

| 5.6. | In general, the weaknesses of civil society organisations lead them to compete for funding, sometimes not only amongst themselves but also with public bodies. These weaknesses make their activity and participation in national and/or international institutional mechanisms problematic. Moreover, they may create dependencies on their financial backers and/or state authorities. |
| --- | --- |

5.6.

| 5.7. | Trade unions and business associations, referred to as the social partners, are considered to be civil society organisations but, because of their unique nature, they have their own identity that is distinct from the latter. The social partners represent and take action to protect their members, particularly economic members, either before state bodies, through specific consultation and collective bargaining mechanisms, or by interacting with each other, particularly during negotiations and collective bargaining. The social partners have a consistent structure, represent clear interests, have an undeniable longevity and a recognised historical acquis, they have an established and well-defined area of activity and interaction, and in general, they possess the ability to self-finance. |
| --- | --- |

5.7.

6.   Specific comments on the post-Cotonou Agreement and civil society and the social partners

6.1.   Civil society and the social partners in the post-Cotonou agreement

| 6.1.1. | The new Agreement, both in its common foundation and in each of the three regional protocols, provides for an active role for civil society. However, this role is not formalised, as the agreement leaves it to the signatory Parties (OACPS-EU) to define the institutional framework for their participation, including the establishment of institutional mechanisms. This raises the critical question of how to ensure civil society organisations/the social partners participate both at national and transnational level. |
| --- | --- |

6.1.1.

| 6.1.2. | Including key organisational arrangements, such as their legal constitution, representativeness, the selection of their representatives, and minimum requirements for the frequency of meetings, will create dynamics that will strengthen the role of civil society organisations/the social partners, who are the stakeholders in this process. |
| --- | --- |

6.1.2.

| 6.1.3. | These stakeholders have a specific role due to their own interests, which should not be confused with the role that political parties play in society. The involvement of civil society organisations/the social partners should be promoted via specific activities and go beyond general discussions. With their studies, opinions and proposals to the institutions, they will provide input for debates and decisions. Establishing institutional mechanisms that actively involve stakeholders in the process, are self-managed and are based on well-established rules of procedure, which facilitate the dissemination of information and interactions with each other through consultation and structured dialogue, is the best way that civil society organisations/the social partners can contribute to the existence of open government (7). |
| --- | --- |

6.1.3.

| 6.1.4. | The question of financing is particularly important. Without adequate, selective and transparent funding, the participation of civil society organisations/the social partners will not be guaranteed, either in meetings or, above all, in the prior applied research work, which consists of data collection and the drafting of studies and opinions. |
| --- | --- |

6.1.4.

6.2.   The current reality in the EU and ACP states for civil society and social partners

6.2.1.   Europe

As far as Europe is concerned, there are many thousands of associations, organisations, federations, confederations, platforms, forums, at national and European level. They come from civil society organisations, the business sector (private, micro- and small enterprises, both public and social) and the trade union sector, and there is some organisational alignment.

6.2.2.   Africa, Caribbean and the Pacific

| 6.2.2.1. | Where the ACP States are concerned, the economic, social, political and historical situation of each region, sub-region and state results in a wide range of organisational diversity between civil society organisations/the social partners and, in some cases, a lack of interaction between them. There are both numerous examples of good practice and many difficulties and shortcomings. |
| --- | --- |

6.2.2.1.

| 6.2.2.2. | There are also the difficulties with or even the complete absence of general or specific information for civil society organisations/social partners about the new Agreement or the EPAs (where they exist) as well as the general lack of forums for participation and structured discussion with public institutions. |
| --- | --- |

6.2.2.2.

| 6.2.2.3. | In the light of this mixed reality, both aspects should be studied on the ground, with a view to disseminating examples of good practice, while also overcoming difficulties and shortcomings in order to boost the status of civil society organisations/the social partners and to promote their role. Through this approach, it will be possible to -support existing institutional mechanisms and to promote- the creation of new ones. |
| --- | --- |

6.2.2.3.

6.2.3.   EU-ACP Follow-up Committee

Currently, under the framework for EU-ACP relations, the civil society organisations/social partners have the EU-ACP Follow-up Committee, which is part of the EESC and composed of 12 members from the EU/EESC and 12 members nominated by civil society organisations and the social partners from the ACP countries (currently 8 from Africa, 2 from the Caribbean and 2 from the Pacific), who are appointed by organised civil society from each of the regions and with respect for the balance of interests.

7.   Specific comments on how to promote and support civil society organisations and social partners as drivers of sustainable development

| 7.1. | The EESC considers it of paramount importance to formalise the planned institutional mechanisms and indicates that this is its main objective in this area. |
| --- | --- |

7.1.

| 7.2. | The EESC strongly recommends that the Commission, following the final signature of the new Agreement, take the initiative to propose the creation of political, organisational and financial conditions for the implementation of these institutional mechanisms to the OACPS and the respective countries. |
| --- | --- |

7.2.

| 7.3. | The EESC strongly urges the ACP to be equally committed to this process. |
| --- | --- |

7.3.

| 7.4. | The EESC notes that the structure of the new Agreement provides for the establishment of an institutional mechanism linked to the common foundation and which includes representatives of the EU and the OACPS. At the same time, the regional protocols allow for the establishment in each region (Africa, the Caribbean and the Pacific) of an institutional mechanism involving representatives of that region and of the European Union. We will therefore have a system of 1 + 3 institutional mechanisms, which will cover the whole of the new Agreement. |
| --- | --- |

7.4.

| 7.5. | The EESC notes that institutional mechanisms, the consultative committees, are also envisaged within the framework of the EPAs, as is the case with the agreements concluded with Cariforum, West Africa and East Africa. |
| --- | --- |

7.5.

| 7.6. | The EESC points out in particular that the whole set of institutional mechanisms will require a major organisational and networking effort, as a single and structured system, in order to create synergies, avoid the duplication of efforts and to roll out resources and optimise their use, in particular the financial resources. |
| --- | --- |

7.6.

| 7.7. | The EESC proposes that the Commission encourage the EU delegations in OACPS to support projects of civil society organisations and the social partners, particularly those focused on raising awareness among their members and leaders, training and empowering them, strengthening their technical capacity and boosting the establishment of institutional mechanisms. The EESC recommends to the Commission that, while considering their respective merits, the applications of civil society organisations and the social partners from ACP countries should be given priority over other applications. |
| --- | --- |

7.7.

| 7.8. | The EESC proposes that the Commission set up programmes to make it possible, when implementing institutional mechanisms, to study the reality on the ground. This includes the opportunities and difficulties for civil society organisations/social partners and the various existing structures (platforms, forums, etc.). The aim would be to collect examples of good practice (which already exist in the context of EU-OACP relations) to be shared. The EESC recommends that civil society organisations/social partners from ACP countries be key players in this study, in terms of their quantitative and qualitative contribution. |
| --- | --- |

7.8.

| 7.9. | The EESC emphasises that the ACP-EU Follow-up Committee will strengthen its organisation with more resources, members and delegates so that it can better contribute to this process and fulfil its mission. |
| --- | --- |

7.9.

| 7.10. | The EESC strongly recommends that the Commission include the funding of this process in the current financial instruments. The EESC draws particular attention to the fact that the activities of civil society organisations/social partners require funding, as self-financing is insufficient. The EESC recalls that, due to the geographical dimension of the new Agreement, institutional mechanisms and the involvement of civil society organisations/social partners requires the availability of funds that they do not have. Even using rigorous management control techniques and modern digital technologies, financial support to civil society organisations/social partners is crucial. The EESC firmly calls on the EU, the OACPS and the Member-States to adopt specific support programmes for the work of civil society organisations/social partners, as well as for the operation of institutional mechanisms. |
| --- | --- |

7.10.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Joint communication to the European Parliament and the Council — A renewed partnership with the countries of Africa, the Caribbean and the Pacific, 2016, pp .5-6.

1

(2)  Common Foundation of the Agreement, Article 95.

2

(3)  Regional Protocol for Africa, Article 5.

3

(4)  Regional Protocol for the Caribbean, Article 7.

4

(5)  Regional Protocol for the Pacific, Article 7.

5

(6)  Support for strengthening the operational capacity of Ivorian civil society organisations, to support citizen monitoring of the interim Economic Partnership Agreement with Côte d’Ivoire.

6

(7)  Principle as defined by the OECD.

7

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/37 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/37

---

Opinion of the European Economic and Social Committee on the new EU-US Trade and Technology Council in action: priorities for business, workers and consumers and necessary safeguards

(own-initiative opinion)

(2022/C 443/05)

| Rapporteur: | Timo VUORI |
| --- | --- |
| Co-rapporteur: | Tanja BUZEK |

Rapporteur:

Timo VUORI

Co-rapporteur:

Tanja BUZEK

| Plenary Assembly decision | 21.10.2021 |
| --- | --- |
| Legal basis | Rule 52(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | External Relations |
| Adopted in section | 9.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 173/0/4 |

Plenary Assembly decision

21.10.2021

Legal basis

Rule 52(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

External Relations

Adopted in section

9.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

173/0/4

1.   Conclusions and recommendations

| 1.1. | Building a positive transatlantic agenda. The EU-US Trade and Technology Council (TTC) can form the core of an agenda to reboot our partnership with trusted channels of cooperation. In spite of our transatlantic economies accounting for about half of worldwide GDP and a major part of the world's trade and investment flows, our relations still encounter obstacles to trade, to investment, to work, to travel and to study on the both sides of the Atlantic. |
| --- | --- |

1.1.

| 1.2. | Taking the lead to protect our values and rules-based trade. In turbulent geopolitical times, there is a great responsibility for the world's leading economies, the EU and the US, together with other like-minded partners, to push forward a modern cooperation framework for trade and technology, which supports an open and sustainable economy, free and fair trade and respects democratic values, decent work and human rights. |
| --- | --- |

1.2.

| 1.3. | The need to respond to market disruption. Following a multitude of ongoing crises, the transatlantic partners must quickly find ways to strengthen the resilience of our open democratic societies, including by ensuring our global value and supply chains and energy security, in particular, with a view to the urgent need to replace Russian energy and raw material supplies. Furthermore, the EU and the US must invest greater efforts in strengthening multilateralism and in tackling challenges related to climate change, to ensuring that free and fair trade is not undermined and to market disruption by authoritarian states. |
| --- | --- |

1.3.

| 1.4. | Building trust based on mutual and stable cooperation. Both parties must engage in building a permanent dialogue structure for the TTC, in order to achieve concrete results in the short and long run, beyond political election cycles and changes of administrations. Furthermore, under the TTC, the EU and the US must aim for a more strategic and horizontal approach on trade and technology issues. The ten Working Groups under the TTC should seek a holistic and effectively coordinated approach to cooperation that does not create any unnecessary silos. |
| --- | --- |

1.4.

| 1.5. | Strengthening stakeholder engagement. In order to avoid failures seen in previous ambitious trade negotiations, transparency and strong stakeholder engagement on both sides of the Atlantic is the only way for the TTC to reach its targets. Therefore, the European Economic and Social Committee (EESC) will engage actively within the TTC structures and seeks to be involved as a unique civil society stakeholder in the TTC ministerial meetings. In this context, the EESC once more expresses its regret that the expert group on trade agreements was not renewed and no comparable permanent structure for stakeholder consultation was put in place. |
| --- | --- |

1.5.

| 1.6. | Specific Transatlantic Labour Dialogue. The EESC has in the past expressed support for the Transatlantic Dialogues for Business and for Consumers and therefore welcomes the recent Paris Ministerial announcement to establish a tripartite Trade and Labour Dialogue, creating a formal channel for social partners on both sides of the Atlantic to inform the TTC process and shape transatlantic trade and investment relations. In this context, the EESC urges the EU Commission to address the imbalance of labour democracy due to the non-ratification of six ILO fundamental Conventions and its impact on the level playing field in trade. |
| --- | --- |

1.6.

2.   General comments — the growing need for a closer EU-US-partnership

| 2.1. | The EESC in transatlantic dialogue: for years, the EESC has followed transatlantic political and trade issues and formulated EU organised civil society's positions. Furthermore, the EESC maintains a regular dialogue both with the EU institutions and with the US administration and, in particular, with civil society across the Atlantic. The launch of a new EU-US Trade and Technology Council (TTC), with ten working groups and regular hearings, requires the EESC to update its position on TTC priorities. |
| --- | --- |

2.1.

| 2.2. | Responsibility of the world's leading economies: the EESC underlines that the EU and the US still have the largest bilateral trade and investment relationship and enjoy the most integrated economic relationship in the world. Although overtaken by China as the largest EU import source for goods in 2021, the US remains the EU's largest trade and investment partner by far. The transatlantic relationship defines the global economy, in a challenged multilateral trade system that has been impacted by a WTO in crises, two years of the ongoing COVID-19 pandemic and now the war in Ukraine. Either the EU or the US is the largest trade and investment partner of almost every other country in the global economy. The transatlantic partnership is no goal in itself but has to build on common values, interests and a common responsibility. The EU and the US should be an anchor for democracy, peace and security around the world, the rule of law and human rights for all (1). |
| --- | --- |

2.2.

| 2.3. | Momentum for a closer, strategic EU-US-partnership: the EESC notes that as an unexpected multitude of crises is now shaking the world, it is a critical moment for the world's leading economies — the EU and the US together with other like-minded democratic states with open and rules-based market economies — to deepen their political and economic cooperation in order to protect our universal values and strengthen prosperity, democracy and rule of law, security and human rights. Of them all, peace has emerged as an imperative priority in leading international policy. At the same time, we should no longer tolerate any state actions against the international order, or free-riders in international trade. |
| --- | --- |

2.3.

| 2.4. | Key role of trade and technology in geopolitics: the EESC repeats that trade and technology are not just about regulatory issues but essential tools to protect and promote these universal values worldwide. The EU and the US must deepen their cooperation and achieve concrete results at multilateral and bilateral level. The TTC provides a unique opportunity for such high-level strategic cooperation on trade and technology that surpasses current ad hoc cooperation arrangements and goes beyond EU and US elections and institutional changes of administrations. |
| --- | --- |

2.4.

| 2.5. | Platform for dialogue and cooperation: the TTC is not and should not be seen as a rerun of the Transatlantic Trade and Investment Partnership (TTIP), though some useful lessons can be learnt from that failed negotiation. TTC objectives and procedures must not call into question EU institutions and decision-making processes, while stakeholder involvement must be enhanced. EU standards that reflect our values must not be brought into question, in particular, the precautionary principle is central to the EU's approach to standard setting. The EESC shares the view that cooperation on standards is also linked to different legal frameworks and requires in-depth analyses of technical issues, as well as an assessment of economic, social and environmental impacts, which should all be performed on a case-by-case basis. For example, the new framework agreement in principle on data flows shows that the EU and US can work towards consensus on sensitive issues. |
| --- | --- |

2.5.

| 2.6. | Strong stakeholder support: the EESC notes that business and other civil society stakeholders, both in the EU and the US, have already expressed general support for the TTC and the identified topics under the ten working groups. Transatlantic partners seem to see the added value of a strategic transatlantic partnership and closer regulatory cooperation. There are still unnecessary barriers to trade, to invest and to work. Furthermore, the transatlantic partners could together strengthen their global competitiveness on the global market, which goes hand in hand with the goals of sustainable development, social justice, respect for human rights, high labour standards and high environmental standards. However, in order to gain results both sides need to be aware of each other's objectives, approaches and means in order to develop a common new framework for trade. |
| --- | --- |

2.6.

| 2.7. | Better stakeholder engagement after failed EU-US civil society dialogues: the EESC emphasises that strengthened civil society dialogue is a vital component in the transatlantic context, including in the TTC. The need for joint dialogue on citizens' rights, resilience to disinformation, media freedom, climate action, social rights and consumer protection, and on supporting democracy, is particularly important in this connection (2). The transatlantic partnership can give way to even closer transatlantic integration in our economies including a common framework for trade, technology and investments. |
| --- | --- |

2.7.

3.   Specific comments — key priorities for business, workers and consumers

| 3.1. | The EESC finds that the TTC demonstrates the interconnectedness of the two largest economies in the world, as well as serving as a unique forum for building greater cooperation on trade policy and market regulatory issues across the Atlantic. Therefore, the EESC believes that the TTC should focus on certain key priorities from the perspective of business, workers and consumers. |
| --- | --- |

3.1.

| 3.2. | Modern rules-based multilateral trade: the EU and the US must show joint responsibility and leadership in the World Trade Organisation (WTO) and advocate an effective multilateral model, with a progressive trade policy that takes into account environmental and social aspects (3). Both the EU and the US face challenges from market distorting practices by non-market economies, including unfair and discriminatory action related to state-owned enterprises, state subsidies, levies and taxes. |
| --- | --- |

3.2.

| 3.3. | Leading the WTO reform: the TTC should focus on ways to improve the multilateral trading system of the WTO and its Dispute Settlement Mechanism, given its central role in delivering an effective multilateral matrix for a progressive trade agenda with environmental and social issues. The EU and US must lead an ambitious WTO reform and promote a modern WTO agenda, breaking down taboos (i.e. social aspects of trade) and addressing current and upcoming sustainability challenges. To do so, the EESC calls on the EU and the US to form strategic cooperation arrangements with key trading partners on priority multilateral issues (4). |
| --- | --- |

3.3.

| 3.4. | Decent work in international trade (5): the EESC urges the EU and US to promote closer cooperation between the WTO and the International Labour Organisation (ILO) with a view to promoting decent work and labour standards through trade instruments. The recent election of new directors general in both organisations should help to provide new impetus in this area. Ensuring respect for international labour standards, as set and monitored by the ILO, should form part of an EU and US lead WTO reform debate. As a positive example and an opportunity to strengthen this ambitious re-thinking, the EESC welcomes the US proposal to address the global problem of forced labour on fishing vessels in ongoing WTO fisheries subsidies negotiations (6). Transatlantic partners should further use their cooperation to work towards a stronger legal foundation for the inclusion of ILO fundamental labour rights in the WTO (7). Bilateral labour issues of common interest should include comparative approaches to trade and sustainable development (TSD) chapters and their effective enforceability in Free Trade Agreements (FTAs) (8). The EESC has long called for a revamped sanctionable enforcement approach for TSD chapters and welcomed innovative enforcement instruments in the US-Mexico-Canada Agreement (USMCA) (9). |
| --- | --- |

3.4.

| 3.5. | Working together in international fora: the TTC could provide a forum for preparing reinforced cooperation on labour and employment matters in international fora, particularly at the ILO and the Organisation for Economic Cooperation and Development (OECD). This reinforced cooperation should include the promotion and enforcement of due diligence. The TTC should encourage joint capacity building, notably for the promotion of occupational safety and health (OSH) worldwide, and develop joint projects, for example on resourcing labour inspection in third countries. The expected inclusion of OSH Conventions among the ILO Core Labour Standards would provide a fertile area for cooperation. Forced labour is an issue of deep common concern and the EU and US approaches, notably with regard to the importation of goods produced through such practices in China, should be coordinated. The spread of new forms of employment worldwide, notably platform work, led by US and EU companies should be discussed in the relevant TTC Working Groups, including input from the labour side. |
| --- | --- |

3.5.

| 3.6. | Resilience and sustainability in global supply chains: the TTC should develop strategies for greater resilience by securing the sustainability of global supply chains and ensuring that they can function properly. The EU and US should identify common vulnerabilities and work together, for example, in the field of availability of critical raw materials and products such as semiconductors. Transatlantic partners should also draw immediate attention to a standardised approach to the security of energy supply that is fully aligned with an ambitious sustainability agenda like the European Green Deal. Furthermore, they should consider common action to improve relevant production capacity, investments and logistics. The TTC should work for common mandatory due diligence in supply chains, based on best practice, in order to set up a model for global sustainability requirements in value chains. |
| --- | --- |

3.6.

| 3.7. | Supporting the green economy: the TTC should focus on cooperation on climate and green technologies and just transition policies. The EU and the US should promote an international framework and standards for climate mitigation, circular economy, sustainable finance, energy saving technology, green and social standards in public procurement, eco-labelling and sustainability reporting. Furthermore, transatlantic partners should work for a multilateral framework on trade liberalization of environmental goods under current initiatives, namely the Environmental Goods Agreement (EGA), the Trade and Environmental Sustainability Structured Discussions (TESSD) and the Informal Dialogue on Plastics Pollution (IDP). The TTC should focus on effective and coordinated Carbon Border Adjustment Mechanisms (CBAM) in order to set up a model for a global framework and to avoid trade conflicts between the EU and the US. |
| --- | --- |

3.7.

| 3.8. | Digitalisation and new economies: the TTC should focus on cooperation on technology standards, research and policies in the field of Artificial Intelligence (AI), the Internet of Things, 6G, battery, quantum and block chain technologies. The framework should foster innovation and standardisation but must incorporate vital underlying policy considerations. New technology areas such as AI often also have a workplace dimension that requires robust AI and data strategies, first providing for a European legal and empowering framework based on human rights, and therefore including ethical rules, labour and trade union rights. While having exactly the same rules on both sides is not possible, interoperability of frameworks should be a goal. Furthermore, there is a need to clarify common regulatory requirements for climate-neutral technologies, biotechnology and health technology. The EU and the US should promote value-based principles for international standards in order to maintain global leadership in these new economies. The TTC should also strengthen the resilience of our democratic societies, with a view to preventing targeted AI-led disinformation campaigns, and through better Information and Communications Technology (ICT) security to counter state-backed cyberattacks. |
| --- | --- |

3.8.

| 3.9. | Data and privacy: the TTC should focus on cooperation to make sure that in the future sharing digital technology and data between the US and the EU will allow an open, international ecosystem for research, development and innovation of the most advanced technology to serve customers and citizens globally, whilst protecting their fundamental right to data privacy and preserving the policy space for public data access and control and the ability to regulate digital multinational companies. Furthermore, the EU and the US should rapidly conclude a new framework for data transfers, addressing the problems which led to the invalidation of the Privacy Shield, and uphold shared common values of privacy and security. |
| --- | --- |

3.9.

| 3.10. | Export controls: the TTC should work on emerging and foundational technologies ensuring the key role of multilateral export control regimes because these are very relevant for both the EU and US in order to promote democracy, human rights and an open society with a market economy. For example, effective trade sanctions require effective export control against states that are misusing trade and technology and undermining peace, security and human rights. The EU and the US should work together on building alliances with like-minded partners to tackle challenges and to ensure a level playing field. |
| --- | --- |

3.10.

| 3.11. | Standardisation: the TTC should focus on cooperation between the standardisation bodies, as well as the limited mutual acceptance principles. The US and EU standardisation systems are different from one another. In particular, the principle ‘one product, one standard, accepted everywhere’ that represents a pillar of the EU single market is not found in the US. In Europe, when a new standard is adopted, conflicting national standards are withdrawn; in the US, different standards coexist on the market making it difficult for SMEs to understand which one would best suit their product lines. These are often small companies with limited resources but with a high level of specialisation in a niche market that is the basis of their competitiveness. |
| --- | --- |

3.11.

| 3.12. | SMEs: regulatory cooperation under the TTC could play an important role in facilitating trade and investment, as well as improving the competitiveness of small firms in particular. Small and medium-sized enterprises (SMEs), in particular, expect new opportunities to open up, given that they do not possess the resources to navigate in different regulatory environments on both sides of the Atlantic, unlike large firms. At the same time, greater compatibility of regulatory regimes would create opportunities for large enterprises to take advantage of economies of scale between the EU and the US (10). |
| --- | --- |

3.12.

| 3.13. | Food and agriculture: in the EESC's view it is important that besides the TTC's work, the EU and the US have set up the new transatlantic collaboration platform on agriculture, designed to take on the global challenges of sustainability, climate change and food security. International collaboration to confront climate change and foster sustainability is paramount to mitigating the harsh and difficult future that awaits us as a global society. The war in Ukraine and its immediate impact on the global food supply added to this challenge. Climate change is already affecting the livelihoods of farmers in deep and profound ways, from extreme weather volatility to severe drought, from flooding to wildfires, and other catastrophic events that threaten our towns, cities and communities. The EU and the US must rise to the challenge. |
| --- | --- |

3.13.

| 3.14. | Consumers: as part of the TTC's work it is important to put safeguards in place to ensure that the process of regulatory cooperation is not used to undermine social, labour, consumer and environmental standards. It should rather aim to harmonise and to improve them. If those conditions are met, the benefits will not only be economic, they might also facilitate the regulators' task by achieving public policy objectives. Furthermore, transatlantic cooperation can be developed by sharing analysis, early warning systems against dangerous products and services from third countries and dialogue on improved enforcement of laws. In shifting away from mandatory convergence, which was formally pursued by the TTIP, the EU and the US need to get this new voluntary cooperation agenda right to help their citizens face the new challenges of this critical time. |
| --- | --- |

3.14.

4.   Addressing concerns and necessary safeguards

| 4.1. | The TTC presents the best opportunity to show that the EU and the US can take concrete steps towards real cooperation on trade and tech and demonstrate that their relationship is based on a meaningful partnership. However, there are certain critical issues the TTC must tackle to achieve success:






  — | a strong strategic commitment by the leadership of both the EU and the US; |
| --- | --- | --- |

4.1.

—

a strong strategic commitment by the leadership of both the EU and the US;

| — | a clear shared vision for the TTC objectives and processes; |
| --- | --- |

—

a clear shared vision for the TTC objectives and processes;

| — | the need to create added value through cooperation, by achieving positive, concrete results; |
| --- | --- |

—

the need to create added value through cooperation, by achieving positive, concrete results;

| — | the need to launch a few efforts designed to develop joint approaches towards joint standards; |
| --- | --- |

—

the need to launch a few efforts designed to develop joint approaches towards joint standards;

| — | the need to establish a clear process on resolving detailed technical issues; |
| --- | --- |

—

the need to establish a clear process on resolving detailed technical issues;

| — | building effective political decision-making outreach mechanisms both in the EU and the US; |
| --- | --- |

—

building effective political decision-making outreach mechanisms both in the EU and the US;

| — | building an active and structured stakeholder engagement process with business, trade unions and other civil society stakeholders; |
| --- | --- |

—

building an active and structured stakeholder engagement process with business, trade unions and other civil society stakeholders;

| — | building fluent coordination, consistency and a holistic approach to the whole work process; building on lessons learnt from the TTIP negotiations and previous bilateral activities on process, transparency and public outreach; |
| --- | --- |

—

building fluent coordination, consistency and a holistic approach to the whole work process; building on lessons learnt from the TTIP negotiations and previous bilateral activities on process, transparency and public outreach;

| — | responsibility for civil society across the Atlantic to accompany this process in an informed manner. |
| --- | --- |

—

responsibility for civil society across the Atlantic to accompany this process in an informed manner.

| 4.2. | Safeguarding the EU's high levels of public interests in transatlantic regulatory cooperation has always been fundamental for the EESC. It strongly reaffirms that safeguarding existing high standards is a fundamental requirement. Besides the aim of enhancing trade opportunities, regulatory cooperation should also improve safety, health and the economic and social wellbeing of citizens on both sides of the Atlantic. The EESC calls for further reassurances that, for example, EU food legislation will not be changed and that the EU will keep its restrictions on hormones, growth promoters and genetically modified organisms (11). |
| --- | --- |

4.2.

| 4.3. | The EESC urges the EU Commission to address, within the framework of the TTC, the imbalance of labour democracy and its impact on the level playing field in trade. The EESC repeats that the US has only ratified two out of the eight ILO core labour conventions, missing in particular key enabling Conventions 87 on Freedom of Association and 98 on Right to Collective Bargaining (12). |
| --- | --- |

4.3.

5.   Meaningful stakeholder involvement following the lessons of the TTIP process

| 5.1. | The EESC underlines that the TTC process should be transparent, accountable and involve public interest groups in a meaningful way. It should go hand in hand with an improved and active communication policy about the nature of the TTC. Most importantly, the cooperation agenda must remain a platform to inform and exchange good practices, not an automatic tool to influence each other's legislative and decision-making processes or deter each other from improving protections. |
| --- | --- |

5.1.

| 5.2. | Interested stakeholders need to be able to provide input to all ten of the working groups to avoid a siloed approach. Whilst the working group on global trade challenges is of a more cross-cutting nature and provides the main forum for labour discussions, related concerns arise within the remit of a number of other working groups, notably in relation to supply chain issues, AI and other emerging technologies, and data protection. |
| --- | --- |

5.2.

| 5.3. | The EESC finds consumer protection and welfare to be overarching objectives of this cooperation. Different TTC dialogues must be transparent for stakeholders. Relevant regulators and sector specialists must be in a leading role to develop regulatory cooperation. |
| --- | --- |

5.3.

| 5.4. | Beyond targeted civil society dialogue meetings, stakeholder preparatory meetings and debriefings should be planned before and after each TTC Council meeting. The former TTIP Advisory Group set up by DG Trade provided a valuable example of stakeholder consultation, in which the EESC should have been included. It was also a forum where member organisations could better understand the challenges and opportunities of trade for the different interests that others represented. It contributed to building bridges between the different organisations. |
| --- | --- |

5.4.

| 5.5. | In this context, the EESC once more expresses its regret that the expert group on trade agreements was not renewed. It was a very positive step in the Commission's strategy to improve engagement with civil society on trade policy and to increase transparency. It was also the logical continuity of the TTIP Advisory Group. |
| --- | --- |

5.5.

| 5.6. | The EESC has in the past expressed support for the Transatlantic Dialogues for Business and Consumers and called for an equivalent transatlantic Labour Dialogue to be recognised. |
| --- | --- |

5.6.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ C 152, 6.4.2022, p. 56.

1

(2)  OJ C 152, 6.4.2022, p. 56.

2

(3)  OJ C 152, 6.4.2022, p. 56.

3

(4)  OJ C 374, 16.9.2021, p. 73.

4

(5)  The EESC provided concrete recommendations in OJ C 429, 11.12.2020, p. 197; ongoing work in SOC/727: Decent work worldwide, rapporteur Maria del Carmen Barrera Chamorro, due to be adopted in September 2022.

5

Decent work worldwide

(6)  OJ C 374, 16.9.2021, p. 73.

6

(7)  Possible ways forward could consider an interpretive statement under Article IX:2 of the WTO Agreement, affirming an interpretation of the ‘public morals’ exception (Article XX of GATT 1994 and Article XIV of GATS), to be inclusive of ILO fundamental labour rights and outline the possible role of ILO determinations in any legal proceedings on the issue.

7

(8)  A good example to build on is the EU commissioned Comparative Analysis of Trade and Sustainable Development Provisions in Free Trade Agreements, LSE, February 2022, notably with regard to the Rapid Response Mechanism of the US-Mexico-Canada Agreement (USMCA), https://www.lse.ac.uk/business/consulting/assets/documents/TSD-Final-Report-Feb-2022.pdf

8

Comparative Analysis of Trade and Sustainable Development Provisions in Free Trade Agreements

(9)  OJ C 105, 4.3.2022, p. 40.

9

(10)  OJ C 487, 28.12.2016, p. 30.

10

(11)  OJ C 487, 28.12.2016, p. 30.

11

(12)  C29 on Forced Labour, C100 on Equal Remuneration, C111 on Discrimination (Employment and Occupation) and C138 on Minimum Age, complete the list of unratified Core Labour Conventions.

12

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/44 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/44

---

Opinion of the European Economic and Social Committee on ‘Youth Policy in the Western Balkans, as part of the Innovation Agenda for the Western Balkans’

(own-initiative opinion)

(2022/C 443/06)

| Rapporteur: | Ionuţ SIBIAN |
| --- | --- |
| Co-rapporteur: | Andrej ZORKO |

Rapporteur:

Ionuţ SIBIAN

Co-rapporteur:

Andrej ZORKO

| Plenary Assembly decision | 20.1.2022 |
| --- | --- |
| Legal basis | Rule 52(2) of the Rules of Procedure |
| | Own-initiative opinion |
| Section responsible | External Relations |
| Adopted in section | 9.6.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 165/2/1 |

Plenary Assembly decision

20.1.2022

Legal basis

Rule 52(2) of the Rules of Procedure

Own-initiative opinion

Section responsible

External Relations

Adopted in section

9.6.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

165/2/1

1.   Conclusions and recommendations

| 1.1. | Acknowledging the progress in developing sound youth policy frameworks, the European Economic and Social Committee (EESC) invites Governments of the Western Balkan partners to further invest in evidence-based youth policies addressing youth development challenges. In order to ensure successful sustainable development in local communities, the EESC believes it is crucial that institutional, programme and policy developments are grounded in young people's views on human development. Furthermore, the EESC is convinced that sufficient and transparent budget allocations for youth policy development are a prerequisite for facilitating positive changes and improving the situation of young people. |
| --- | --- |

1.1.

| 1.2. | The EESC invites Western Balkans national governments to follow key youth policy documents of the European Union (EU), to further develop national youth policies and to enable young people to participate in the design of policies. |
| --- | --- |

1.2.

| 1.3. | The EESC believes that systematically collected high-quality youth sensitive data are a prerequisite for informed policies and support measures for young people, especially vulnerable groups of young people. In particular, the system for collecting and processing data related to the social dimension of youth participation needs to be significantly improved (1). |
| --- | --- |

1.3.

| 1.4. | In addressing the fight against poverty and improving the quality of education, the EESC is of the view that it is key to involve social partners and civil society organisations (CSOs) in order to deliver a broader reform to improve social rights and the prospects of young people. Social partners and other CSOs should have a greater role in the dialogue on social and economic reforms. Direct support from the EU should ensure the views of social partners and CSOs are taken into account. |
| --- | --- |

1.4.

| 1.5. | The EESC calls for the reinforcing of EU programmes and regional structures, with the aim of reaching more young people in the Western Balkans by providing them with the opportunities for education, mobility, volunteering and employment. |
| --- | --- |

1.5.

| 1.6. | The EESC calls for a stronger focus on vocational education and training, by combining apprenticeship schemes with academic learning at secondary and tertiary level. The Committee believes that close collaboration between education and training policy and the business community must be enhanced and focus should be placed more on competences than qualifications. |
| --- | --- |

1.6.

| 1.7. | The EESC welcomes the Economic and Investment Plan (EIP) for the Western Balkans, calling for the improvement of labour market participation, especially of young people and women, disadvantaged groups and minorities, in particular Roma. The implementation of the EIP should maximise the benefit for young people. |
| --- | --- |

1.7.

| 1.8. | The EESC calls for the Youth Guarantee in the Western Balkans to be implemented following the Council recommendations on a reinforced Youth Guarantee (2). |
| --- | --- |

1.8.

| 1.9. | In order to implement a Youth Guarantee in the Western Balkans, the EESC calls for increasing the capacities of the public employment services (PES) and their staff in the countries of the region. |
| --- | --- |

1.9.

| 1.10. | The EESC draws attention to the importance of cooperation between various partners to address the issue of youth unemployment. Partnerships should be established across all levels of government, between Youth Guarantee providers and relevant stakeholders, such as social partners, educational and training institutions, youth organisations and other CSOs. |
| --- | --- |

1.10.

| 1.11. | The EESC believes that attention and support should be given to the capacity building of social partners and the development of social dialogue and collective bargaining in order to mitigate precarious working conditions and improve the quality of jobs. The EESC also calls on the social partners of the Western Balkans, at national and sectoral level, to actively involve young people in all their activities, including collective bargaining. |
| --- | --- |

1.11.

| 1.12. | Taking into account the possibilities of the European Year of Youth proclaimed for 2022, the EESC is convinced that addressing the challenges facing young people and bringing Europe closer to young people should be an approach not limited only to young people living in the EU; it should also apply to young people from all Western Balkans partners. |
| --- | --- |

1.12.

| 1.13. | The EESC encourages the EU and our partners from the Western Balkans, in line with the EU Youth Strategy, to introduce a youth impact assessment tool, so-called Youth Test. This Youth Test would ensure that young people are considered during policy-making processes, it would enable to create better targeted policies and to identify any mitigation measures necessary to avoid negative impact on young people. |
| --- | --- |

1.13.

| 1.14. | The EESC believes that efforts are required from the Governments of Western Balkan partners in setting regional cooperation as a policy priority. In supporting this transformation and advancing regional cooperation as a policy priority, the EU should support the Western Balkans in identifying key areas and avenues which could foster changes for citizens of all Western Balkans, especially for young people. |
| --- | --- |

1.14.

| 1.15. | The Conclusions of the 2021 Western Balkans Summit in Berlin of the Berlin Process (3) underline the need for strengthening youth organisations and networks. The EESC invites the European Commission to further examine ways to support relevant youth structures e.g. national youth councils and youth umbrella organisations in the Western Balkans, on a regional level, allowing for regional youth policy dialogue. |
| --- | --- |

1.15.

| 1.16. | The EESC believes that further efforts to strengthen the political education and representation of young people are needed, both through mainstream politics and through youth structures e.g. national youth councils, local or municipal councils. The EESC therefore invites the institutions of the EU to further support the Western Balkans in improving youth participation. |
| --- | --- |

1.16.

| 1.17. | The EESC welcomes the fact that the Innovation Agenda for the Western Balkans envisages further actions to support their involvement in all EU's programmes covering research, innovation, education, culture, youth and sport. Taking into account the positive correlation of educational or training mobility with the civic and political engagement of young people, further efforts in this regard may lead to the advancement of youth participation and engagement. |
| --- | --- |

1.17.

| 1.18. | The EESC reiterates the importance of young people for the future of the Western Balkans and therefore the importance of taking concrete measures to turn the region into a place with future prospects and opportunities for young people, enabling them to stay and prosper (4). Timely involvement of young people in the design and implementation of social and political changes is extremely important. |
| --- | --- |

1.18.

2.   Introduction

| 2.1. | According to Eurostat (5), the total youth population in the Western Balkans is around 3,6 million, which makes up approximately 21 % of the total population. Kosovo (*1) has the highest share of youth in the total population (26,29 %), followed by Albania (23,4 %), Bosnia and Herzegovina (20,37 %) and North Macedonia (20,32 %), Montenegro (19,49 %) and Serbia (16,8 %). The ratio of men and women in the youth population is similar in all Western Balkan partners, with the male youth population being slightly larger — 51,16 % of the youth population are men and 48,84 % are women in the Western Balkans (6). |
| --- | --- |

2.1.

| 2.2. | Western Balkan partners have made considerable progress in terms of further establishing and consolidating their youth policy framework, by adopting relevant laws, strategies, and action plans. However, a fully functional youth system that ensures effective youth empowerment, engagement and participation in decision-making has yet to be developed. There are various weaknesses ranging from wider political issues and a lack of willingness to prioritise youth as an inter-institutional and cross-sectorial policy, to very specific types of difficulties in the systematic monitoring and evaluation of youth policy development and implementation, data collection, and publication (7). |
| --- | --- |

2.2.

| 2.3. | With the aim of promoting the well-being of young people, attention should also be given to upholding the rights of the child. Sustainable policy actions in this regard boost the well-being of children and further support the quality transition into adolescence and young adulthood. |
| --- | --- |

2.3.

3.   Human capital development

| 3.1. | The level and relevance of education is key to young people's employment prospects, career development, and social inclusion in the region. Nevertheless, the education systems still reveal shortcomings as regards catering for all students and equipping young graduates with relevant skills. Insufficient or inefficient links with other policy strands such as employment, economy, social services and social protection leave many children and young people at risk of dropping out of school early, social exclusion and poverty (8). |
| --- | --- |

3.1.

| 3.2. | In order to build a dynamic economy, the Western Balkans need to invest in knowledge and developing young people's skills. Reforms to the education system are crucial for advancing development efforts (9). The Western Balkans still need to improve their performance and ensure young people acquire foundational skills, and they need to lower the gap in performance with the EU. |
| --- | --- |

3.2.

| 3.3. | Emigration from the Western Balkans has been a long-standing problem caused by economic, social and institutional issues, threatening the development prospects of the region. Emigration is likely to continue in most of the region for the foreseeable future but this should not inhibit the adoption of appropriate policies to keep young people in the region. People choose to leave for various reasons, but these often centre on the difficulties of achieving a high quality of life for themselves and their families should they remain in the region. Brain drain is reducing the regions' human capital, which is necessary for economic growth, while existing social infrastructure is failing to improve the living conditions of those who stay behind. Appropriate measures on the national level must also be taken to redirect the ‘brain drain’ to ‘brain circulation’. |
| --- | --- |

3.3.

| 3.4. | The outflow of people remains a central concern for most Western Balkan countries, as it impacts the economic, social, and political prospects of a region still economically lagging behind the EU. The total number of people who have left the region is difficult to capture accurately. Data shows (10) that people are continuing to leave the region. Between 2012 and 2018, on average, annually, 155 000 people left the region for an Organisation for Economic Co-operation and Development (OECD) country; in 2018 alone, that number stood at 175 000 people (11). |
| --- | --- |

3.4.

| 3.5. | In addition to better economic prospects abroad, studies have also highlighted the important role that quality and trustworthy public institutions play as a motivating factor for emigration. An IMF analysis (12) (2016) showed that, while all types of migrants seek better economic opportunities abroad, higher-skilled individuals were also motivated to move due to institutional quality at home (corruption and nepotism to obtain employment), and lower-skilled individuals were also drawn to the larger and more reliable social benefit systems abroad (13). A high level of corruption in the region is a key determinant of migrant outflows, which is exacerbated by the fact that 63 % of individuals in the region do not trust the judiciary or legislative branches (14). |
| --- | --- |

3.5.

| 3.6. | Young people in the region have a strong desire to move abroad to attain better opportunities, contributing to a highly skewed proportion of young people in the total emigration numbers. For example, in Bosnia and Herzegovina, North Macedonia, and Albania, over 50 % of young people desire to live and work abroad for a period longer than 20 years, signalling a potentially significant long-term loss to the demographic and economic future of the region (15). The high level of youth migration from the Western Balkans stems, in particular, from young people's inability to access quality education (and the limited economic opportunities once a degree is obtained), compelling many to seek education opportunities abroad. In 2018, 6 % of university age students in the region undertook their studies in a foreign country (the EU average was 3 %). |
| --- | --- |

3.6.

| 3.7. | The Western Balkans social infrastructure does not sufficiently support the region's ability to develop and maintain a robust human capital base, particularly in the context of the outflow of human capital via brain drain. Most countries' education sectors face funding and resource shortages that result in sub-optimal education access and outcomes. Insufficient education outcomes, in turn, fail to provide the necessary skills that future generations need to meet the requirements of existing businesses and to help develop new ones. |
| --- | --- |

3.7.

| 3.8. | Maximising the value of human capital is vital to increasing competitiveness and to tackling unemployment. Today's workforce needs to be equipped with a range of transferable skills, a capacity to adapt, and an entrepreneurial attitude while ensuring adequate social security. |
| --- | --- |

3.8.

| 3.9. | Current educational systems and curricula need to reform and strengthen employability amongst the younger generations by promoting vocational education and training (VET), digital education and entrepreneurship subjects. |
| --- | --- |

3.9.

| 3.10. | Entrepreneurial capacities of young people should be encouraged and promoted. Policy makers need to ensure a favourable environment for young people to start their own business and become entrepreneurs and support and provide easier access to finance for start-ups. |
| --- | --- |

3.10.

| 3.11. | In today's fast developing world, the fight against climate change, new business models, research and innovation capacity and the development of new technological solutions for the green transition are essential. To that end it is important to increase the number of young people, particularly young women, with STEM (science, technology, engineering, and mathematics) capabilities and digital skills. |
| --- | --- |

3.11.

| 3.12. | The green transition is transforming existing jobs, destroying some, and creating new jobs requiring new green and digital skills. The education and training system has to adapt to the growing demand for new skills. Education and training programmes should align with evolving business needs and the twin green/digital transition. |
| --- | --- |

3.12.

4.   Youth employment challenges in the Western Balkans

| 4.1. | The main challenges facing youth employment policy in the region are in: coordinating stakeholders at different levels of government and in different policy fields (employment, education, housing health services); weaknesses in the quality of the education systems and shortcomings in the teaching of skills demanded by the labour market; inefficiencies in the job search process leading to skills mismatches and lengthy transitions from school and university to work; the prevalence of precarious employment in some economies; the scarcity of available jobs for young people; a shortage of child-care facilities to support women returning to work and the high level of informality. |
| --- | --- |

4.1.

| 4.2. | Young people in the Western Balkans have an unfavourable position on the region's labour markets. In 2020, the youth employment rate for the 15-24 age group was below 27 % across the whole Western Balkans Region, while the youth unemployment rate for the 15-24 age group was above 26 % (compared to just 16,8 % in the EU-27, for the 15-24 age group), reaching almost 50 % in Kosovo (16). |
| --- | --- |

4.2.

| 4.3. | The proportion of young people not in employment, education or training (NEET) for the 15-24 age group averages 23,7 % in the Western Balkans, ranging from 15,9 % in Serbia to 37,4 % in Kosovo, compared to just 11,1 % in the EU for the 15-24 age group (17). |
| --- | --- |

4.3.

| 4.4. | Long-term unemployment affects almost two-thirds of young unemployed people in North Macedonia, Bosnia and Herzegovina, and Kosovo, and two thirds of unemployed young women in Montenegro. |
| --- | --- |

4.4.

| 4.5. | The youth labour force participation rate (activity rate) was also lower than in the EU and there is a large gender gap in labour force participation, partly reflecting a shortage of childcare facilities for young mothers who wish to join the labour market. The gender gap is also reflected in female youth employment rates, which are below the male youth employment rates everywhere in the region. Where youth unemployment rates are highest (Bosnia and Herzegovina, Kosovo, North Macedonia, Serbia) the female youth unemployment rate exceeds the male rate. In contrast, in Albania and Montenegro the female youth unemployment rate is below the male rate, as is the case in the EU. |
| --- | --- |

4.5.

| 4.6. | Young people face a precarious position on the labour markets. Young people in all economies in the region have a higher share of temporary contracts than in the EU, especially in Kosovo and Montenegro where more than three quarters of employed young people hold this type of contract, while in Serbia more than half do. Precarious employment of this type can adversely affect individual well-being and the productivity of the economies. |
| --- | --- |

4.6.

| 4.7. | Addressing the needs of the young population should become a priority, not least given the high number of NEETs. The need for measures based on the example of the EU Youth Guarantee must be highlighted, even more so in times of crisis. This will help to provide young people with an offer of employment, further education, an apprenticeship or a traineeship, thereby also offering solutions and prospects for young people and contributing to tackling brain drain. |
| --- | --- |

4.7.

5.   Young people in the Western Balkans as an important force in regional cooperation and promoting European integration

| 5.1. | The prosperity and convergence with the EU should be based on the principles of inclusivity, trust and cooperation. The EESC points out that in pursuing EU-driven reforms and implementing investment plans, the Western Balkans governments committed themselves to the core European values of democracy, the rule of law and fundamental rights, as well as reconciliation (18). |
| --- | --- |

5.1.

| 5.2. | The EESC agrees that regional cooperation in the Western Balkans is essential for the enlargement process, and should be further strengthened in order to drive transformation. A credible accession perspective is the key incentive for and driver of transformation in the region. It is a key tool for promoting democracy, the rule of law and respect for fundamental rights, which are also the main engines of economic integration and the essential anchor for fostering regional reconciliation and stability (19). |
| --- | --- |

5.2.

| 5.3. | The EESC acknowledges that several key European and regional initiatives have been launched during the last few years, especially for the Western Balkans Region, in order to bring it closer to the EU, but also to strengthen cooperation among young people. The EU remains the main strategic partner of the region, providing funds and support through various programmes (IPA, Erasmus+, etc.). Furthermore, building upon the successful example of the Franco-German Youth Office, the Regional Youth Cooperation Office (RYCO) was launched in 2016 in order to promote a spirit of reconciliation and cooperation between the young people in the region by means of youth exchange programmes. |
| --- | --- |

5.3.

| 5.4. | The RYCO has an important role in enhancing cooperation and reconciliation among young people in the Western Balkans. The support of the EU in streamlining regional youth cooperation, as an essential element in reaching peace and stability in the region, has been vital. The role of young people in advancing the prospects of the region should not only be reinforced through the efforts of the RYCO. |
| --- | --- |

5.4.

| 5.5. | The European Youth Capital is a title awarded by the European Youth Forum. It is designed to empower young people, boost youth participation and strengthen European identity in cities. In 2022, the European Youth Capital is Tirana. Operating under the slogan ‘Activate Youth’, the main aim of the title is to encourage active participation focusing on the needs of young people, today and tomorrow. The programme features activities aimed at promoting volunteerism, empowering youth organisations, and creating networks and synergies among young people from all over Europe. |
| --- | --- |

5.5.

| 5.6. | Stronger cooperation and mutual learning activities organised jointly by EU institutions and Western Balkans youth policy stakeholders should further support the successful implementation of the Innovation Agenda for the Western Balkans. |
| --- | --- |

5.6.

| 5.7. | Efforts made to involve the Western Balkans in EU youth programmes should be coordinated with the ongoing programmes offered by the RYCO. The EESC invites the European Commission to assist the Western Balkans in pursuing ways to establish new intraregional mobility schemes. |
| --- | --- |

5.7.

6.   Amplifying the voice of young people from the Western Balkans

| 6.1. | The political agenda of the EU with regard to the Innovation Agenda for the Western Balkans is to facilitate evidence-informed policymaking (20). Having reliable and transparent statistics is a major request from the EU to all the countries in the pre-accession phase (21). |
| --- | --- |

6.1.

| 6.2. | The EU Youth Strategy 2019-2027 aims to encourage and promote the inclusive democratic participation of all young people in democratic processes and society, to actively engage them, support youth representation at local, regional and national level and explore and promote the use of innovative and alternative forms of democratic participation e.g. digital democracy tools (22). |
| --- | --- |

6.2.

| 6.3. | The EU Youth Dialogue is a well-established dialogue mechanism between young people and decision-makers. The EESC welcomes the Commission's proposals to build on this mechanism and introduce it in the Western Balkans regional cooperation framework, ensuring the views and needs of young people and youth organisations are taken into account when defining youth policy priorities. Furthermore, existing participatory processes and mechanisms in the Western Balkans where youth are involved should be encouraged and promoted. |
| --- | --- |

6.3.

| 6.4. | According to the Youth Participation Index (23), young people in the Western Balkans are still vastly under-represented in political life. Recent data shows that a vast majority (78 %) believe that young people should have a greater say in politics (24). |
| --- | --- |

6.4.

| 6.5. | The EESC strongly supports the involvement of young people in decision-making processes on issues that affect them. In addition to individual participation, the role of youth organisations is vital in advancing the position of young people in the political, economic and social arenas. Therefore, as emphasised by the Regulation on IPA III and the Enlargement Methodology, it is necessary to note the significance of funding and support to CSOs in order to cater to the needs of young people. |
| --- | --- |

6.5.

| 6.6. | Socioeconomic status and educational attainment are considered to be important predictors of individuals' propensity to vote or take part in other types of political engagement. Statistical analysis at regional level paints a consistent picture of socioeconomic inequalities inherent in young people's engagement in the Western Balkans Region (25). |
| --- | --- |

6.6.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Youth Participation Index for 2020, Ana and Vlade Divac Foundation, page 31.

1

(2)  Council Recommendation of 30 October 2020 on A Bridge to Jobs — Reinforcing the Youth Guarantee and replacing the Council Recommendation of 22 April 2013 on establishing a Youth Guarantee (OJ C 372, 4.11.2020, p. 1).

2

(3)  Western Balkans Summit of the Berlin Process, Berlin Summit 2021, chair's Conclusion.

3

(4)  Final Declaration of the 8th Western Balkans Civil Society Forum.

4

(5)  Basic figures on Western Balkans and Turkey, Factsheets, 2022 edition.

5

(*1)  This designation is without prejudice to positions on status and is in line with UN Security Council resolution 1244 and the International Court of Justice Opinion on the Kosovo declaration of independence.

*1

(6)  Regional Cooperation Council, Mapping of Youth Policies and Identification of Existing Support and Gaps in Financing of Youth Actions in the Western Balkans
  – Comparative report, January 2021, page 4.

6

Mapping of Youth Policies and Identification of Existing Support and Gaps in Financing of Youth Actions in the Western Balkans

– Comparative report,

(7)  Regional Cooperation Council, Mapping of Youth Policies and Identification of Existing Support and Gaps in Financing of Youth Actions in the Western Balkans — Comparative report, January 2021, page 4.

7

Mapping of Youth Policies and Identification of Existing Support and Gaps in Financing of Youth Actions in the Western Balkans

Comparative report,

(8)  European Training Foundation (ETF), Unlocking youth potential in South Eastern Europe and Turkey: Skills development for labour market and social inclusion, 2020.

8

Unlocking youth potential in South Eastern Europe and Turkey: Skills development for labour market and social inclusion

(9)  The results of the OECD's Programme for International Student Assessment (PISA) for 2018 show high levels of underachievement (students who are failing Level 2 on the PISA scale in reading, mathematics and science) in key competences in nearly all of the Western Balkans.

9

(10)  Council of Europe Development Bank: Social Infrastructure in the Western Balkans- Increasing the region’s economic resilience, enhancing human capital and counteracting the effects of brain drain, November 2021.

10

(11)  The accuracy of migratory figures for the Western Balkan Region is plagued by various issues that limit the scope for comprehensive cross-country comparisons.

11

(12)  Emigration and Its Economic Impact on Eastern Europe, 2016.

12

(13)  Social benefits in the Western Balkans can be spotty in coverage and benefit transfers can be delayed.

13

(14)  Regional Cooperation Council, Balkan Barometer: Public Opinion Survey.

14

(15)  Lavric, Tomanovic, & Jusic, FES Youth Study Southeast Europe 2018/19.

15

Youth Study Southeast Europe

(16)  Regional Cooperation Council, Study on Youth Employment in the Western Balkans 2021.

16

Study on Youth Employment in the Western Balkans

(17)  Regional Cooperation Council, Study on Youth Employment in the Western Balkans 2021.

17

Study on Youth Employment in the Western Balkans

(18)  REX/184 — Final Declaration of the 8th Western Balkans Civil Society Forum, p. 3.

18

(19)  OJ C 220, 9.6.2021, p. 88.

19

(20)  Western Balkans Agenda on Innovation, Research, Education, Culture, Youth and Sport.

20

(21)  European Commission — Chapters of the acquis/negotiating chapters.

21

(22)  Engaging, Connecting and Empowering young people: a new EU Youth Strategy (COM(2018) 269 final).

22

(23)  Youth Participation Index for 2020, Ana and Vlade Divac Foundation.

23

(24)  FES (2019), Jusic, Political alienation of a precarious generation, p. 5.

24

Political alienation of a precarious generation,

(25)  FES (2019), Jusic, Political alienation of a precarious generation, p. 5.

25

Political alienation of a precarious generation,

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/51 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/51

---

Opinion of the European Economic and Social Committee on the cost of non-Europe — the benefits of the single market

(exploratory opinion)

(2022/C 443/07)

| Rapporteur: | Philip VON BROCKDORFF |
| --- | --- |
| Co-rapporteur: | Émilie PROUZET |

Rapporteur:

Philip VON BROCKDORFF

Co-rapporteur:

Émilie PROUZET

| Referral | Presidency of the Council of the European Union, 26.1.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 27.6.2022 |
| Outcome of vote
  (for/against/abstentions) | 63/1/1 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 194/0/3 |

Referral

Presidency of the Council of the European Union, 26.1.2022

Legal basis

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

Section responsible

Single Market, Production and Consumption

Adopted in section

27.6.2022

Outcome of vote

(for/against/abstentions)

63/1/1

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

194/0/3

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) believes that the single market is about improving welfare through social and economic convergence aimed at reducing inequalities and ensuring that worsening social imbalances do not end up becoming serious obstacles to European integration. |
| --- | --- |

1.1.

| 1.2. | The EESC is of the view that national legal texts potentially hindering the internal market must be notified to the European Commission (EC) and must be commented upon and evaluated. Without this, these procedures remain ineffective creating unnecessary obstacles. |
| --- | --- |

1.2.

| 1.3. | In regard to national certification, the EESC recommends that Member States commit themselves towards less restrictive national measures via the ‘reinforced cooperation’ route. |
| --- | --- |

1.3.

| 1.4. | The EESC also calls for an effective implementation and enforcement of directives already negotiated and voted upon, such as the Better Regulation package. |
| --- | --- |

1.4.

| 1.5. | The EESC believes that the Digital Services Act (DSA) (1) and the Digital Markets Act (DMA) (2) are a crucial step in achieving a level playing field across operators in digital markets. Also, maximum harmonisation in the scope of the DMA should be a priority. |
| --- | --- |

1.5.

| 1.6. | Equally, the free flow of data is vital for European innovation, for the growth of businesses and in support of the Digital Single Market. |
| --- | --- |

1.6.

| 1.7. | The EESC underlines that territorial supply constraints (TSCs) are hampering the development of the single market and calls on the EC to address the anti-competitive effect of TSCs. |
| --- | --- |

1.7.

| 1.8. | The EESC recommends a coordinated approach between Member States on the marketing of products affected by the crisis in Ukraine. The crisis caused by Russia's aggression has created formidable supply restrictions. |
| --- | --- |

1.8.

| 1.9. | The EESC recommends more effective national policy measures and providing mobility incentives with an emphasis on active labour market policies such as in-work benefits for EU workers. |
| --- | --- |

1.9.

| 1.10. | Whilst acknowledging that the capital markets union (CMU) is a complex project, the EESC notes that the EU still has 27 capital and financial markets which do not work as one, thereby limiting the single market's potential. |
| --- | --- |

1.10.

| 1.11. | At this time of great uncertainty, it is necessary to ensure a competition policy that is particularly geared towards delivering the transitions that the EU has committed to. Moreover, any form of commercial, social, regulatory, fiscal or environmental dumping that distorts competition must not be allowed. |
| --- | --- |

1.11.

| 1.12. | Finally, the EESC is of the view that ‘open strategic autonomy’ should be adopted, especially in key sectors, to help build resilience, diversification and an ambitious agenda for commerce. |
| --- | --- |

1.12.

2.   Background

2.1.   Objective of the single market

| 2.1.1. | The objective of the EU single market was the removal of barriers to movements in goods, services, capital and people in an effort to enhance productivity and competitiveness across the EU. |
| --- | --- |

2.1.1.

2.2.   Shared responsibility of the single market

| 2.2.1. | The functioning of the single market is a shared responsibility between the EU and the Member States. However as things stand, there are still many differences in interpretation and application of EU law. In many instances, such differences can be deemed to be unjustified or disproportionate and in any event pose an obstacle to the free movement of people, goods and services. |
| --- | --- |

2.2.1.

2.3.   Responsibility of Member States

| 2.3.1. | Objectively, there might be valid grounds for divergence among Member States but such justifications are not always provided and at times Members States do not attempt to balance justification at national level against possible negative impacts on the single market. As a consequence of this, there are still many regulatory and non-regulatory barriers within the EU that make the single market ‘incomplete’ and fragmented such as:






  — | National legislation justified on the assumption that the principle of subsidiarity is being applied; |
| --- | --- | --- |

2.3.1.

—

National legislation justified on the assumption that the principle of subsidiarity is being applied;

| — | The non-recognition of the supposedly mutual recognition principle; |
| --- | --- |

—

The non-recognition of the supposedly mutual recognition principle;

| — | A proliferation of over transpositions otherwise known as gold plating and non-compliance transpositions with national governments and parliaments over transposing EU legal texts that were agreed at EU level. In effect, a number of barriers impacting the single market derive from incorrect or incomplete application of EU legislation, and Member States applying national rules that run counter to the objectives of the single market. Hence inaccurate or incorrect implementation by Member States and lack of enforcement by the Commission have damaging consequences both at EU and at national level for citizens and businesses alike; |
| --- | --- |

—

A proliferation of over transpositions otherwise known as gold plating and non-compliance transpositions with national governments and parliaments over transposing EU legal texts that were agreed at EU level. In effect, a number of barriers impacting the single market derive from incorrect or incomplete application of EU legislation, and Member States applying national rules that run counter to the objectives of the single market. Hence inaccurate or incorrect implementation by Member States and lack of enforcement by the Commission have damaging consequences both at EU and at national level for citizens and businesses alike;

| — | Applications at national level of forthcoming European measures with governments and parliaments attempting to anticipate the application of EU policies by placing national interests first despite the EU policies still being developed by the Commission. An example of this being the EU policy on circular economy. |
| --- | --- |

—

Applications at national level of forthcoming European measures with governments and parliaments attempting to anticipate the application of EU policies by placing national interests first despite the EU policies still being developed by the Commission. An example of this being the EU policy on circular economy.

| — | National interests prevailing on matters of strategic European ecosystems. |
| --- | --- |

—

National interests prevailing on matters of strategic European ecosystems.

2.4.   Economic cost of restrictions to single market

| 2.4.1. | The examples referred to above illustrate the main costs of non-Europe and several studies have in fact highlighted the huge economic gains from a ‘complete’ single market. The overview report from the European Parliament has shown that these range from between EUR 650 billion and EUR 1,1 trillion per year, the equivalent of between 5 and 8,6 % of the EU's GDP (3). |
| --- | --- |

2.4.1.

| 2.4.2. | The same RAND Europe study for the European Parliament investigated the economic impact of lower trade barriers on the single market. According to the study, the impact of improved trade flows, economic growth and job creation due to lower trade barriers would lead to economic benefits of between EUR 183 and EUR 269 billion per year (4). |
| --- | --- |

2.4.2.

| 2.4.3. | Also relevant in terms of lost potential benefits is the EC's estimation of a fully integrated EU digital single market. The EC states that it would promote innovation, contribute EUR 415 billion to the EU economy each year and create hundreds of thousands of new jobs (5). |
| --- | --- |

2.4.3.

| 2.4.4. | All this points to the significant potential economic benefits (and associated welfare benefits) that would have been provided by a more complete single market. Put differently, this represents the total economic cost or lost added value and collective public good of non-Europe. |
| --- | --- |

2.4.4.

| 2.4.5. | Despite limitations, the internal market has so far helped preserve and foster the economic prosperity of the EU. However, the competitiveness and resilience of the EU economy needs to be strengthened through further single market reforms as well as by addressing strategic dependencies. An entrepreneurial culture in the EU also needs to be promoted, where innovative businesses of all sizes, and in particular micro-, small and medium-sized enterprises (MSMEs), as well as start-ups are provided with more effective support and can thrive in order to contribute to more resilient and cohesive societies. Just as important, a well-functioning single market will facilitate the vision for a more social Europe: one that places the well-being of citizens at the top of the political agenda, and helps to avoid downward social levelling. |
| --- | --- |

2.4.5.

3.   Restrictions

| 3.1. | Existing restrictions include those associated with regulation, national law issues, tax issues, logistics and supply issues, and other more nuanced differences across EU Member States which make trade across the EU still challenging. |
| --- | --- |

3.1.

| 3.2. | Restrictions are also holding back key economic sectors such as services, which remain fragmented along national lines, as shown hereunder:






  — | Historically restrictive national rules often justified by the subsidiarity principle; |
| --- | --- | --- |

3.2.

—

Historically restrictive national rules often justified by the subsidiarity principle;

| — | Flawed implementation and application of the Services Directive that hinders the freedom of establishment, the free movement of services and the freedom to provide a service; |
| --- | --- |

—

Flawed implementation and application of the Services Directive that hinders the freedom of establishment, the free movement of services and the freedom to provide a service;

| — | National trade laws that hinder business in the way they do business. Often these laws hamper competitiveness of the sector, are protectionist and undermine investment by trustworthy and legitimate business in other Member States; |
| --- | --- |

—

National trade laws that hinder business in the way they do business. Often these laws hamper competitiveness of the sector, are protectionist and undermine investment by trustworthy and legitimate business in other Member States;

| — | National requirements that hinder the free movement of goods. Often Member States do not notify new national technical requirements according to the procedure laid down in Directive (EU) 2015/1535 of the European Parliament and of the Council (6), and do not apply the principle of mutual recognition in non-harmonised activities, as in gold plate directives, etc. |
| --- | --- |

—

National requirements that hinder the free movement of goods. Often Member States do not notify new national technical requirements according to the procedure laid down in Directive (EU) 2015/1535 of the European Parliament and of the Council (6), and do not apply the principle of mutual recognition in non-harmonised activities, as in gold plate directives, etc.

| 3.3. | The EESC points out that infringement procedures are lengthy, expensive and the outcome is uncertain. For businesses, this constitutes too high a cost and discourages them from expanding their business or investing elsewhere within the EU. Moreover, these restrictions deprive consumers of more choice, improved service and lower prices. The EESC also calls for stronger action on the part of the Commission in applying infringement procedures. |
| --- | --- |

3.3.

| 3.4. | This cost affects the wider economy, limiting competitiveness, growth potential, and the further development of the market system economy. |
| --- | --- |

3.4.

| 3.5. | As in any economy, the EU is impacted by external shocks but the response to these shocks and how markets react are essentially determined by individual Member State policies at home and the measures taken to stimulate economic behaviour. The war in Ukraine has exposed the EU's dependence on global value chains. The unfolding crisis is likely to affect sectors differently but there is no doubt that chinks in the single market armour have been exposed, particularly, the restrictions on the free movement of goods and services, and essential commodities. |
| --- | --- |

3.5.

| 3.6. | Finally, it should be noted that around 82 % of products traded in the single market are subject to harmonised rules and some 18 % of intra-EU trade in goods fall under mutual recognition. However, there are still new cases of national technical rules that appear to run counter to EU law. Besides, in many Member States, there has also been a recent surge in national labelling requirements for food and beverage products justified by consumers' protection and environment. At the same time, the principle of mutual recognition is not functioning smoothly. Evidence of this is that 71 % of SMEs that applied for the existing mutual recognition system for non-harmonised goods received a market access denial decision. |
| --- | --- |

3.6.

4.   Addressing the restrictions

| 4.1. | The measures referred to below would help unlock some of the potential economic gains derived from the single market. |
| --- | --- |

4.1.

4.2.   Using existing tools more effectively

| 4.2.1. | The EESC is of the view that draft national texts potentially hindering the internal market must be notified to the EC and must be commented upon and evaluated. Without a commitment from the Member States to notify and comment/evaluate, these procedures remain ineffective. Hence, more effective surveillance in support of the harmonisation of product market regulation across EU Member States is required. As an example, the retail sector has recently experienced a surge in national restrictions through authorisations and local content requirements. This runs counter to Articles 28 and 30 of the Treaty with national re-testing often applied on purchases of products, already lawfully placed on the single market. On services, the EESC is also of the view that the notification procedure under the Services Directive is not functioning as well as expected. Regarding the freedom of establishment, the EESC regrets to note that Member States have not reached a compromise on the proposal for a so-called Notification Directive. This text would have strengthened the obligation for Member States to notify the Commission of draft laws or regulations on authorisation schemes for services (and therefore for town planning) (7). The EESC also urges the EC and Members States to provide more detailed information on the justification and proportionality applied when Member States notify technical rules. It is also important to ensure that notified requirements receive the appropriate scrutiny regardless of which notification procedure is used (8). In order to address the problem at its core, the EESC believes a further legislative shift from minimum harmonisation towards maximum harmonisation would be needed. |
| --- | --- |

4.2.1.

| 4.2.2. | Another area of concern is the application of measures which pre-empt planned EU regulation, such as national certification, applied with the express aim of providing some level of protection, particularly in the agrifood sector. In the EESC's view, such restrictions are outright protectionist, but when they are brought to light, the process leading to their withdrawal is often slow and burdensome, thus keeping such restrictions for retailers in place for far too long. To prevent this, the EESC believes that Member States could instead commit themselves towards less restrictive national measures via the ‘reinforced cooperation’ route, authorised by the Treaty. Also, the EESC refers to the Pan-European Personal Pension product as a standard framework to support the single market that could be applied in other areas. |
| --- | --- |

4.2.2.

| 4.2.3. | The EESC is also of the view that the European Semester could be an effective tool to tackle such issues, notably via proportionate action on the part of the Commission if commitments to country specific recommendations (CSRs) are not adhered to, including potential suspension of EU funds. This is in line with the EC guide to Member States on the recovery and resilience plans, which emphasises the removal of regulatory and non-regulatory barriers to the internal market, as well as the conditions under which Member States must meet the requirements of the European Semester. |
| --- | --- |

4.2.3.

| 4.2.4. | Finally, the EESC calls for an effective implementation and enforcement of directives already negotiated and voted upon. In this connection, the EC and Member States should commit themselves to implementing the Better Regulation package subject to high quality impact assessments. |
| --- | --- |

4.2.4.

4.3.   Unlocking the potential of the digital single market

| 4.3.1. | The EESC believes that the growing digital economy in Europe provides opportunities for economic growth, with the potential economic gains being realised through a greater integration of digital services across Member States. |
| --- | --- |

4.3.1.

| 4.3.2. | In this light, the EESC believes that the Digital Services Act (DSA) and the Digital Markets Act (DMA) are a crucial step in achieving a level playing field across operators in digital markets. By focusing on specific services regardless of the location of the service provider or the law applicable to the provision of the service, the DSA and DMA address the issue of equal treatment between European and global online operators in a meaningful way. Furthermore, an absolute priority for the EESC is to prevent the multiplication of national legislation from further fragmenting the internal market. |
| --- | --- |

4.3.2.

| 4.3.3. | Significant financial gains could also be made by increasing the use of online services and improving digital infrastructure within the EU. In this context, the EC recommends moving towards a fully functional e-procurement regime and e-invoicing. Impressively, estimates suggest that a full transition to e-procurement could generate EUR 50 to EUR 75 billion a year (9). |
| --- | --- |

4.3.3.

| 4.3.4. | Finally, the EESC is of the view that free flow of data is vital for European innovation, for the growth of businesses of all sizes, for job creation, and for achieving a digital single market. The legislation in support of the free flow of data is already in place. However, any unjustified data localisation requirements should be avoided. |
| --- | --- |

4.3.4.

4.4.   Unblocking supply constraints

| 4.4.1. | The EESC notes that the 2018 Geo-blocking Regulations have helped facilitate commerce within the EU. However, European consumers are still subjected to geo-blocking of goods and services. In fact, the EESC highlights the existence of persistent TSCs which can materialise through different practices such as refusing to supply or threatening to stop supplying a particular distributor, limiting the quantities available for sale by Member States; inexplicable differences in product ranges and prices between Member States; or limiting language options for product packaging. The EESC underlines that TSCs are hampering the development of the single market and its potential benefits to consumers and calls on the Commission to address the anti-competitive effect of TSCs with a view to achieving a fully functioning single market. |
| --- | --- |

4.4.1.

| 4.4.2. | The Russian invasion of Ukraine has brought to light formidable energy and food security risks requiring a unified strategic approach on the part of the EU. The EESC believes that a well-functioning single market can support this strategy as well as ease some of the pressures on prices that are rapidly eroding purchasing power across the EU. In this connection, the EESC welcomes efforts at EU level for cooperation on the joint purchase of gas (on a voluntary basis) in a bid to ease pressures on energy prices. |
| --- | --- |

4.4.2.

| 4.4.3. | However, the EESC regrets that no coordinated approach between Member States has been attempted so far for other products affected by the crisis in Ukraine. |
| --- | --- |

4.4.3.

4.5.   Enhancing cross-border mobility of workers and professionals

| 4.5.1. | Cross-border mobility of workers and professionals across the EU remains a challenge limiting supply and causing mismatches in sectors such as IT and high tech industry notwithstanding EU policies aimed at facilitating free movement of persons. European and national data suggest that the level of mobility both between and within countries remains low also by international comparison. |
| --- | --- |

4.5.1.

| 4.5.2. | Specifically, the EESC recommends more effective national policy measures providing mobility incentives with an emphasis on active labour market policies such as in-work benefits for EU and third country workers with refugee status. In this connection, the EESC believes that host countries offering jobseekers financial incentives to take up a job in another Member State or another region would further encourage mobility. In addition, further efforts to improve information regarding jobs in other EU countries as well as relocation assistance to support the logistics involved in moving country — e.g. finding accommodation, registering for tax purposes, finding a school for your children, possibly assistance in finding a job for partners, etc. The EESC cautions, however, that labour mobility in the EU has been the victim of the piecemeal approach adopted so far. Further disjointed policies particularly at national level need to be avoided. |
| --- | --- |

4.5.2.

| 4.5.3. | The recognition of diplomas and qualifications, which is essential to fill vacancies where labour shortages persist, remains an issue across the EU. The EESC is of the view that the existing system still relies too heavily on individual governments, with Member States free to apply their own rules. The Commission should ensure that a more harmonised approach to recognising diplomas and other qualifications is applied across Member States. |
| --- | --- |

4.5.3.

| 4.5.4. | Finally, enhancing the mobility of EU workers and professionals can only happen if there is better enforcement of existing provisions, access to information and cooperation between Member States. The EESC notes that individual Member States may be reticent about more single market reforms because of the fear this might lead to potential short-term job losses and sectoral losses, particularly in those countries that are already lagging behind, as well as low-productivity countries/sectors. In theory, the free movement of labour would help address this issue, but from a national perspective this could lead to a loss of resources and potential brain/skills drain in the interim. |
| --- | --- |

4.5.4.

4.6.   Enhancing capital flows and financial services across the EU

| 4.6.1. | The same argument holds in the case of the EU's capital markets. The EESC acknowledges that the Capital Markets Union (CMU) is a complex project which aims to deepen and further integrate the capital markets of EU Member States. It requires the adoption of measures and regulatory amendments in a wide variety of areas and entails responsibilities not only at the EU level, but also at the level of each Member State. The EESC notes that completing the CMU is still a distant goal in 2022. Despite some progress, particularly with the EU Capital Markets Recovery Package, the EU still has 27 capital markets which do not work as one. European finance is still sharply segmented along national lines, with savers and investors depending heavily on national environments. This also true for financial services in general, including retail financial services and domestic savings. |
| --- | --- |

4.6.1.

| 4.6.2. | This, the EESC believes, is limiting both economic recovery and the smooth functioning of the single market. The economic benefits of CMU are clear, but completing the CMU requires both political buy-in from individual Member States, as well as effective adoption of EC-led initiatives including those aimed at strengthening the international role of the Euro. Furthermore, the role of digitalisation in facilitating the CMU cannot be understated. |
| --- | --- |

4.6.2.

4.7.   A much stronger political will to remove single market restrictions

| 4.7.1. | At this time of great uncertainty, the EESC would like to see a competition policy that is particularly geared towards delivering the transitions embarked on by the EU itself. These transitions will require ambitious trade and investment policies, extraordinary public and private investments, innovation, further social, economic and environmental progress, and a well-functioning single market. All this needs to be supported by a legal and financial framework that ensures a level playing field in the market for all stakeholders, all regions and citizens across the EU. The integrity of our internal market and its non-fragmentation are crucial here. A well-functioning single market and competition policy that enable businesses and consumers to access a vast market competition on a level playing field are paramount, thereby stimulating efficiency and innovation, and providing an environment in which successful business can grow. |
| --- | --- |

4.7.1.

| 4.7.2. | In our view, harmonisation and the removal of obstacles to free movement on the territory allow for the development of competition, innovation and productivity gains. Any form of commercial, social, regulatory, fiscal or environmental dumping that distorts competition must not be allowed. The EESC expects all Member States to respect this and demand that our external partners respect our core fundamental values and rights, be they in the social, business and environmental fields. |
| --- | --- |

4.7.2.

| 4.7.3. | The EESC cautions that the single market should no longer be regarded as a glorified version of a global trade agreement whose properties could be adjusted in negotiation. The single market is much more than that. It is also about improving welfare through social and economic convergence aimed at reducing inequality and ensuring that worsening social imbalances and the general increase in poverty do not end up becoming serious obstacles to European integration. To this end, the EESC emphasises the fundamental social and worker rights to decent wages and working conditions, not only in their interaction with economic freedoms, but also in relation to the internal and labour market, competition and any other Union policy measure, including but not limited to fields such as economic governance, trade, digitalisation and the environment. It also aims to safeguard and strengthen the autonomy of social partners, establishing a clear link with the respect and promotion of collective social rights. Ensuring that fundamental rights are fully protected and safeguarded in the Treaties is also key. |
| --- | --- |

4.7.3.

| 4.7.4. | The EESC acknowledges that the single market needs to respond continuously to changes in technology, globalisation, developments in education, labour and capital markets, and not least global crisis and conflicts. As things stand, there is no space for business-as-usual proposals — the current crisis situation and the changed circumstances must be factored in when proposing legislation. |
| --- | --- |

4.7.4.

| 4.7.5. | The EESC is also of the view that ‘open strategic autonomy’ should be adopted, especially in key sectors. This would help build resilience through openness, an ambitious trade agenda, cooperation with like-minded partners, diversification, and the avoidance of protectionism. |
| --- | --- |

4.7.5.

| 4.7.6. | Finally, the EESC regrets to note that on the eve of the 30th anniversary of the European single market, the internal market remains incomplete. |
| --- | --- |

4.7.6.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  COM(2020) 825 final (OJ C 286, 16.7.2021, p. 70).

1

(2)  COM(2020) 842 final (OJ C 286, 16.7.2021, p. 64).

2

(3)  https://www.rand.org/blog/2017/11/why-the-eu-single-market-has-still-not-reached-its.html

3

(4)  https://www.rand.org/blog/2017/11/why-the-eu-single-market-has-still-not-reached-its.html

4

(5)  https://www.rand.org/blog/2017/11/why-the-eu-single-market-has-still-not-reached-its.html

5

(6)  Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (OJ L 241, 17.9.2015, p. 1).

6

(7)  2016/0398(COD); https://eur-lex.europa.eu/procedure/FR/2016_398

7

(8)  Study on the proportionality assessment by the Member States when adopting the retail establishment related requirements pursuant to Directive 2006/123/EC.

8

(9)  https://www.rand.org/blog/2017/11/why-the-eu-single-market-has-still-not-reached-its.html

9

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/58 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/58

---

Opinion of the European Economic and Social Committee on digital taxation

(exploratory opinion requested by the Czech presidency)

(2022/C 443/08)

| Rapporteur: | Benjamin RIZZO |
| --- | --- |
| Co-rapporteur: | Petru Sorin DANDEA |

Rapporteur:

Benjamin RIZZO

Co-rapporteur:

Petru Sorin DANDEA

| Referral | 26.1.2022, letter from Mikuláš BEK, Minister for European Affairs |
| --- | --- |
| 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 | 1.7.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 200/0/1 |

Referral

26.1.2022, letter from Mikuláš BEK, Minister for European Affairs

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

1.7.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

200/0/1

1.   Conclusions and recommendations

| 1.1. | Developing adequate principles and rules on the taxation of the digital economy has become a fundamental task for both the European Union and other international regulators, in order to modernise fiscal policies and adapt them to current and future needs. |
| --- | --- |

1.1.

| 1.2. | The European Economic and Social Committee (EESC) suggests that, once an international agreement is reached on Pillar 1 of the OECD/G20 Inclusive Framework regarding the reallocation of taxing rights, the corresponding rules are swiftly implemented in the EU in coordination and simultaneous initiative with other major trading partners. |
| --- | --- |

1.2.

| 1.3. | The EESC deems that the EU can play a leading role with regard to the taxation of the digital economy. However, such a role should be played within an international agreement reached by the OECD/G20, as already happened for Pillar 2 with regard to the anti-base erosion mechanism. |
| --- | --- |

1.3.

| 1.4. | The EESC deems it crucial for both Pillar 1 and Pillar 2 to be implemented within the EU as soon as it is feasible, achieving a high degree of consistency with the international agreement that will be negotiated within the OECD/G20 venue. Pillars 1 and 2 should be seen as a comprehensive and mutually integrated regulatory package. |
| --- | --- |

1.4.

| 1.5. | The EESC notes that a European legislative initiative on taxing the digital economy could greatly benefit the internal market, undoubtedly resulting in a more efficient framework when compared with separate national initiatives. The introduction of uncoordinated and separate rules by the Member States would increase fragmentation across the EU, generating tax uncertainty and hindering competitiveness. |
| --- | --- |

1.5.

| 1.6. | The EESC encourages an international agreement on Pillar 1 aimed at achieving an effective taxation system, respectful of the neutrality and equal treatment principles, as well as able to preserve the potential of innovation enshrined in the digital economy, on the one side, and to ensure that highly digitalised businesses contribute their fair share to national budgets, on the other side. |
| --- | --- |

1.6.

| 1.7. | The EESC calls for an international agreement on Pillar 1 that refrains, as far as possible, from overly complex rules and is aimed at achieving transparency, predictability and administrative simplification, keeping compliance costs low. An overcomplicated system could indeed create opportunities to circumvent the newly agreed rules, reducing their effectiveness. |
| --- | --- |

1.7.

| 1.8. | The EESC underlines that properly devised international tax laws on digital businesses are instrumental in preventing tax evasion and tax avoidance practices, as well as in designing a fair, stable and progressive taxation system. A level playing field in the area of corporate profit taxation is key since, in recent years, companies have been able to make use of specific tax rules in some Member States, substantially reducing their effective tax rate. |
| --- | --- |

1.8.

| 1.9. | The EESC believes that a proper regulatory framework for taxing the digital economy should consider the heavy reliance on intangible assets brought about by digitalisation. These assets have greatly increased the ability of companies to develop relevant business activities in a jurisdiction without a physically presence there. |
| --- | --- |

1.9.

| 1.10. | The EESC points out that digital businesses often exploits users’ data to generate value. Such a method of generating value is not captured by current tax systems, producing a mismatch between value creation and taxation. This specific matter should be duly addressed within Pillar 1. |
| --- | --- |

1.10.

| 1.11. | The EESC reiterates that it remains crucial to embrace an approach that will avoid the risks of double taxation, as well as unintended non-taxation in any jurisdiction, minimising compliance costs for European companies. In this respect, the agreement on Pillar 1 and the rules aimed at its transposition should harmonise the different initiatives already undertaken by Member States, avoiding discrepancies and loopholes. |
| --- | --- |

1.11.

| 1.12. | The EESC sincerely hopes that a viable agreement on Pillar 1 might be achieved as soon as possible both at the international and the EU level, regretting the constraints still preventing the finalisation of such a fundamental agreement. |
| --- | --- |

1.12.

2.   Essential context

| 2.1. | The current international corporate tax rules are based on principles developed in the early 20th century and partially adapted over time. They are no longer fit for purpose in today’s context and are not suited to a globalised and digitalised economy. This means that tax revenues are not being allocated to countries in a fair way and harmful tax practices are allowed to continue, to the detriment of public finances and fair competition. |
| --- | --- |

2.1.

| 2.2. | Hence, developing adequate principles and rules on the taxation of the digital economy has become a fundamental task for both the European Union and other regulators around the world, in order to modernise fiscal policies and adapt them to current and future needs. |
| --- | --- |

2.2.

| 2.3. | The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (IF) is built on a two-pillar solution to address the tax challenges arising from an increasingly digitalised and globalised economy. |
| --- | --- |

2.3.

| 2.4. | Pillar 1 will aim to ensure a fairer distribution of profits and taxing rights among countries concerning the largest Multinational Enterprises (MNEs) and especially digital companies. Pillar 1 is mainly going to require multinational businesses to pay some of their income taxes where their consumers and users are located, creating a connection between profits and the places where the corresponding users and consumers are located. |
| --- | --- |

2.4.

| 2.5. | The agreement to re-allocate profit under Pillar 1 includes the removal and standstill of Digital Services Taxes (DST) and other relevant, similar measures, bringing an end to trade tensions resulting from the instability of the international tax system. |
| --- | --- |

2.5.

| 2.6. | Pillar 2 aims at ensuring that large multinationals, especially digitalised ones, pay a minimum effective corporate tax rate of 15 per cent, setting a regulatory framework that is able to discourage profit shifting and fit to prevent a detrimental tax competition among jurisdictions. Thus, a limitation on competition over corporate income tax might be effectively lifted, achieving a global minimum corporate tax rate, utilised by countries to protect their tax bases. The EESC urges all Member States to swiftly find a political agreement on these rules, regretting that a final consensus has not yet been achieved. |
| --- | --- |

2.6.

| 2.7. | An international agreement on Pillar 2 and the inclusive Framework has been reached within the OECD/G20 forum and their transposition has been duly undertaken by the EU institutions via a Directive proposal, currently under discussion in the Council (1). |
| --- | --- |

2.7.

| 2.8. | A shared international consensus in this respect is still being built within the OECD/G20, as confirmed by the recent OECD consultation on Pillar 1 which is collecting public feedback on the draft rules, even though such rules ‘do not reflect consensus regarding the substance of the document’ (2). |
| --- | --- |

2.8.

| 2.9. | The European Commission published a legislative proposal on the taxation of the digital economy back in 2018, which has not been pushed forward mainly due to the lack of an international, widely shared consensus on the rules to be implemented under Pillar 1. |
| --- | --- |

2.9.

| 2.10. | In the meantime, the EU institutions have approved the Digital Markets Act (DMA) aimed at regulating the competitive structure of digital markets. In this respect, the EU has adopted an original and comprehensive regulatory approach, which differs from the ones embraced by other major trading blocks, such as the USA, China and other emerging countries. |
| --- | --- |

2.10.

| 2.11. | The EESC deems that, following the example of the DMA, the EU can play a leading role also with regard to the taxation of the digital economy. However, such a role should be played within an international agreement reached by the OECD/G20, as already happened for Pillar 2. |
| --- | --- |

2.11.

3.   General remarks

| 3.1. | The EESC strongly believes that, in the context of the digitalisation of the economy, any change to the rules on the distribution of taxation rights on profits among countries must be coordinated globally in order to better harness the benefits of globalisation, with proper and effective global governance and rules. The concrete solutions devised must therefore be the consequence of a broad international agreement including as many tax jurisdictions as possible. Besides, the different impacts and implications of the new rules on small Member States, on the one hand, and bigger Member States, on the other hand, should be duly considered. |
| --- | --- |

3.1.

| 3.2. | The EESC appreciates the significant evolution of the economy triggered by digitalisation and its positive effects on our society, as well as the great potential of digitalisation in empowering tax administrations, serving as a tool to deliver better services to national budgets and citizens. The EU will be required to help and coordinate the tax authorities of Member States to cope with the new regime and a fast-changing economic context. |
| --- | --- |

3.2.

| 3.3. | The EESC agrees with the finding of the OECD/G20 base erosion and profit shifting (BEPS) Action 1 — 2015 Final Report, observing that the digital economy is increasingly becoming the ‘economy itself’. The digitalisation of many businesses over the years has been impressive and this process sped up during the recent COVID-19 lockdowns. Such a tendency often triggers a separation between the vast profits earned by digital platforms and the physical places where the related paying users and consumers are located. In the future, this phenomenon might also be addressed with regard to social security obligations. |
| --- | --- |

3.3.

| 3.4. | Once an international agreement is reached on Pillar 1 of the OECD/G20 Inclusive Framework, striking a balance between the several positions expressed so far, the EESC suggests that Pillar 1 — just like Pillar 2 previously — may also be swiftly implemented in the EU, in coordination with other major trading partners, thereby consolidating the internal market in line with Articles 113-115 of the Treaty. |
| --- | --- |

3.4.

| 3.5. | The EESC deems it crucial for both Pillar 1 and Pillar 2 to be implemented within the EU as soon as it is feasible and with a high degree of consistency with the international agreement negotiated within the OECD/G20 venue. Pillars 1 and 2 should be seen as a comprehensive and mutually integrated regulatory package to be swiftly deployed across the EU. |
| --- | --- |

3.5.

| 3.6. | The EESC notes that a European legislative initiative on taxing the digital economy could greatly benefit the internal market, undoubtedly resulting in a more efficient framework when compared with separate national initiatives. The introduction of uncoordinated and separate rules by the Member States, following different taxation principles and criteria, would increase fragmentation across the EU, generating tax uncertainty and hindering competitiveness. The EESC encourages a dispute resolution mechanism aimed at allowing Member States to solve issues that might arise. |
| --- | --- |

3.6.

| 3.7. | The international agreement on Pillar 1 should be aimed at achieving an effective taxation system, respectful of the neutrality and equal treatment principles able to: (i) preserve the potential of innovation enshrined in the digital economy, on the one side; and on the other side (ii) ensure that highly digitalised businesses contribute their fair share to national budgets and society. |
| --- | --- |

3.7.

| 3.8. | The EESC calls for an international agreement on Pillar 1 that refrains, as far as possible, from overly complex rules and is aimed at achieving transparency, predictability and administrative simplification, keeping compliance costs low. An overcomplicated system could indeed create opportunities to circumvent the newly agreed rules, reducing their effectiveness. |
| --- | --- |

3.8.

| 3.9. | The EESC underlines that properly devised international tax laws on digital businesses are functional in preventing tax evasion and tax avoidance practices, as well as in designing a fair, progressive, stable and efficient tax system. |
| --- | --- |

3.9.

| 3.10. | The EESC underlines that Pillar 2, in turn, will effectively introduce the two domestic rules to be imposed, and more specifically:






  A. | interlocking domestic rules (Global Anti-Base Erosion Rules) featuring: (i) an Income Inclusion Rule (IIR), which imposes a top-up tax on a parent entity in respect of the low taxed income of a constituent entity; (ii) an Undertaxed Payment Rule (UTPR), which denies deductions or requires an equivalent adjustment to the extent that the low tax income of a constituent entity is not subject to tax under an IIR; |
| --- | --- | --- |

3.10.

A.

interlocking domestic rules (Global Anti-Base Erosion Rules) featuring: (i) an Income Inclusion Rule (IIR), which imposes a top-up tax on a parent entity in respect of the low taxed income of a constituent entity; (ii) an Undertaxed Payment Rule (UTPR), which denies deductions or requires an equivalent adjustment to the extent that the low tax income of a constituent entity is not subject to tax under an IIR;

| 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. |
| --- | --- |

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.

4.   Specific remarks

| 4.1. | The EESC highlights that a level playing field in the area of corporate profit taxation is key. In recent years, some companies have been able to make use of specific tax rules in some Member States, reducing their effective tax rate. A lack of transparency has contributed to such an outcome and several sensitive cases have involved multinationals active in the area of digital services. |
| --- | --- |

4.1.

| 4.2. | The EESC believes that a proper regulatory framework for taxing the digital economy should consider the heavy reliance on intangible assets brought about by digitalisation. These assets have greatly increased the ability of companies to develop significant business activities in a jurisdiction without being physically present there. The current international tax rules and principles should be adapted to this new economic context. |
| --- | --- |

4.2.

| 4.3. | The EESC points out that digital businesses are heavily reliant on intangible assets for content creation, in particular using and exploiting users' data to generate value. This method of generating value is not captured by current tax systems, producing a mismatch between value creation and taxation. This specific matter should be duly addressed within Pillar 1. |
| --- | --- |

4.3.

| 4.4. | The EESC reiterates that it is of paramount importance to embrace an approach that will avoid the risks of double taxation, as well as unintended non-taxation in any jurisdiction, and will minimise compliance costs for European companies. In this respect, the agreement on Pillar 1 and the rules aimed at its transposition should harmonise the different initiatives already undertaken by Member States as these differences could trigger discrepancies and loopholes. |
| --- | --- |

4.4.

| 4.5. | The EESC recalls that one of the key factors sustaining and motivating the complex attempt to achieve a global consensus on the OECD’s Pillar 1 proposal is the proliferation of unilateral digital taxes and the connected potential for multiple jurisdictions to claim taxing rights in a variety of different and sometimes overlapping ways over the same profits. |
| --- | --- |

4.5.

| 4.6. | Therefore, Pillar 1 should guarantee the removal of national digital service taxes and other similar measures on companies. That is crucial to ensure the consensus of several major jurisdictions on Pillar 1 and to avoid the new rules that might, in the future, be challenged as ‘discriminatory’ under World Trade Organization (WTO) rules, with unintended consequences from an international trade perspective. |
| --- | --- |

4.6.

| 4.7. | The EESC sincerely hopes that a viable international agreement on Pillar 1 might be achieved as soon as possible and regrets the enduring constraints which are preventing the finalisation of such an agreement. |
| --- | --- |

4.7.

| 4.8. | The EESC deems that, once Pillars 1 and 2 are implemented, services provided through platforms used by European consumers should be fully incorporated in the VAT system, as an essential component in addressing the tax issues concerning the digital economy. It should be noted that digital communication services and social network customers access these services at no apparent charge, which raises the question as to how VAT could reasonably be applied. VAT revenues represent an own resource in the EU budget and the EESC considers it important to also include digital services in the tax base. |
| --- | --- |

4.8.

| 4.9. | The EESC considers it necessary to strike a reasonable balance between the re-allocation of corporate profit taxes among net-exporting countries and net-importing countries, as well as among producers’ and consumers’ countries, so as not to jeopardise the possibility of countries to meet, amongst others, their social and environmental objectives. |
| --- | --- |

4.9.

| 4.10. | The EESC notes that digitalisation is not only challenging, but also creates opportunities for tax authorities. Large amounts of third-party data available to tax authorities allow more reporting to be automated, saving both sides time and money. Data collection can also be used to tackle underreporting, evasion or fraud. The software solutions used by several tax administrations to record sales data at the time of a transaction — and can be submitted directly to tax authorities — have already increased some countries’ VAT revenues significantly. |
| --- | --- |

4.10.

| 4.11. | Lastly, for further and more detailed insights into specific matters, the EESC draws attention to its Anti-money Laundering Legislative Package opinion (3), as well as to both its opinions concerning the fight against tax avoidance: Business Taxation for the 21st Century (4) and Fight the use of shell entities (5). |
| --- | --- |

4.11.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  See the EESC opinion Minimum effective taxation of companies (OJ C 290, 29.7.2022, p. 52).

1

(2)  OECD Consultation on the Draft Rules for Nexus and Revenues Sourcing Under Pillar 1 — Amount A, 4 February 2022.

2

(3)  EESC opinion on Anti-money Laundering Legislative Package (OJ C 152, 6.4.2022, p. 89).

3

Anti-money Laundering Legislative Package

(4)  EESC opinion on Business Taxation for the 21st Century (OJ C 275, 18.7.2022, p. 40).

4

(5)  EESC opinion on Fight the use of shell entities (OJ C 290, 29.7.2022, p. 45).

5

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/63 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/63

---

Opinion of the European Economic and Social Committee on gender equality

(Exploratory opinion at the request of the Czech Presidency)

(2022/C 443/09)

| Rapporteur: | Milena ANGELOVA |
| --- | --- |

Rapporteur:

Milena ANGELOVA

| Request by the Czech Presidency of the Council | 26.1.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Employment, Social Affairs and Citizenship |
| Adopted in section | 22.6.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 194/13/13 |

Request by the Czech Presidency of the Council

26.1.2022

Legal basis

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

Section responsible

Section for Employment, Social Affairs and Citizenship

Adopted in section

22.6.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

194/13/13

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) underlines that success in enhancing gender equality in a sustainable way lies in nurturing a life-long gender equality culture (LLGEC) that goes through the whole life cycle and provides measures tailored to the specific characteristics and needs of every stage of life. Being a matter of culture, it cannot be brought about only by means of single policies and measures but requires recognition, ownership and constant commitment by all actors of society. |
| --- | --- |

1.1.

| 1.2. | An LLGEC must be cultivated starting from early childhood by setting an example for children in the family, and continuing through nursery and throughout all school stages. The EESC calls on Member States, through their education policy, to enhance gender-neutral teaching with respect to both knowledge and social skills, as well as learning contexts free from gender stereotypes. |
| --- | --- |

1.2.

| 1.3. | To sustain LLGEC further, gender equality needs to be fostered in all economic and societal activities, including businesses, public services and political life. The EESC believes that keeping gender equality up systematically in various contexts is a necessary means of moving things forward. |
| --- | --- |

1.3.

| 1.4. | The EESC recommends that Member States, supported by the Commission and the EESC, together with social partners and relevant civil society organisations, launch a wide-ranging awareness-raising and information campaign to promote LLGEC. Special attention should be paid to the central role of both traditional and social media as platforms for shaping attitudes. |
| --- | --- |

1.4.

| 1.5. | The campaign should draw decision-makers' attention to the state and progress of gender equality in the MS in question and encourage MSs to seek inspiration from each other and share good practices. Political actors, decision-makers and public organisations should also lead by example in enhancing gender equality in their own activities. |
| --- | --- |

1.5.

| 1.6. | Gender equality in terms of participation in political decision-making at national, regional and municipal levels is crucial, considering the remarkable impact of political decisions on citizens' lives. Increasing the share of female politicians at all levels requires strengthening the awareness of voters, as well as of parties nominating candidates and fostering a culture that encourages and enables women to take an active part in political life. |
| --- | --- |

1.6.

| 1.7. | As the improvement of gender equality requires measures to be introduced in several policy fields, the EESC reiterates its call to policymakers at all levels to follow the principle of gender mainstreaming and include the gender equality aspect in all decisions, including those on budgeting, investment and funding, including public procurement. |
| --- | --- |

1.7.

| 1.8. | Considering the challenges caused by an ageing population and the need to secure a skilled workforce, the inclusiveness of labour markets is ever more important. The removal of any obstacles and provision of incentives for the overall participation of women in labour markets, irrespective of profession, task or age, is thus crucial. For example, flexible working arrangements, parental leaves, and taxation, and other kinds of incentives play a role in enhancing gender equality. In addition to legislative frameworks, the practical modalities should be laid down using the possibilities of collective bargaining between the social partners. |
| --- | --- |

1.8.

| 1.9. | As the post-pandemic recovery needs to take place in line with the green and digital transition, STEM competences are ever more essential. From the point of view of gender equality and prevention of segregation, it is important to attract girls to study more STEM subjects, while also attracting more boys to study and apply for care and education professions. These aspects should be embedded in career guidance and staff retention measures. |
| --- | --- |

1.9.

| 1.10. | The EESC finds it vital to promote women's leadership in businesses, public organisations and in social partner's organisations. It calls on MSs, business organisations and social partners to launch training and mentoring programmes targeted at female leaders and candidates for directors in public organisations or for board and senior executive positions in businesses, trade unions and private organisations. It also welcomes the political agreement reached recently between the European Parliament and the Council on the Directive on improving the gender balance among non-executive directors of listed companies, and invites the EU institutions to proceed swiftly with putting it into effect in a prompt and efficient manner. |
| --- | --- |

1.10.

| 1.11. | Any obstacles to female entrepreneurship must also be removed. As access to finance is a prerequisite for entrepreneurship, equal access by women to both private financing and public funding must be ensured. The EESC also calls on MSs to direct appropriate public investment in projects that enhance gender equality, including in digital and care infrastructure. |
| --- | --- |

1.11.

| 1.12. | The EESC calls for proper attention to be paid to gender equality when addressing the issue of Ukrainian refugees. This applies to support for children to access care and schooling, integration of women in labour markets via quality employment, and access to sexual and reproductive health services. |
| --- | --- |

1.12.

2.   General comments

| 2.1. | This opinion is a response to the request by the Czech Presidency to look into the progress on gender equality, and tools and measures to enhance it from several points of view, such as post-pandemic, recovery and employment, empowerment of young people, education and skills, entrepreneurship and corporate leadership, work-life balance, as well as the issue of migration and refugees, including due to the war in Ukraine. These issues have previously been addressed in existing EESC opinions and many other gender equality aspects are also being addressed in other EESC opinions (1), covering issues related to e.g. working conditions and payment, care infrastructure, poverty and energy poverty, and gender-based violence. |
| --- | --- |

2.1.

| 2.2. | Endemic discrimination, including gender discrimination, is a major cause of people being left behind. The EESC underlines that gender equality is rooted in the EU values (2) and eliminating inequalities and promoting equality between men and women requires a holistic and horizontal approach. Success in enhancing gender equality in a sustainable way lies in nourishing a life-long gender equality culture that goes through the whole life cycle and provides measures tailored to the specific characteristics and needs of every stage of life. |
| --- | --- |

2.2.

| 2.3. | An LLGEC must be cultivated starting from early childhood by setting an example for children in the family, safeguarding the equal rights and obligations of each family member, showing tolerant behaviour as the norm, and respecting everyone's private space and time. All prejudice regarding division of activities, tasks and work in the family to ‘feminine’ and ‘masculine’ should be avoided, as well as showing and teaching any other types of an unequal behaviour. It shall come on learning by doing basis and be started as early as taking care in equal share and turns for babies and infants by both parents — in a supportive manner so that they can both keep their respective rights to privacy, work and rest. The EESC calls upon the EC and MS to make every effort to support both parents to combine their private and professional lives and providing families with appropriate choices. Effective implementation of the Work-Life Balance Directive and securing accessible and affordable early childhood education and care is of outmost importance here. |
| --- | --- |

2.3.

| 2.4. | Children's integration into society starts as soon as they start going to crèche and then nursery school. Therefore, these types of care facilities have to develop strong LLEGC teaching and training. The simple fact that many of these facilities employ mostly female staff reinforces the stereotype or belief that raising children and taking care of them is a female task. |
| --- | --- |

2.4.

| 2.5. | The next key step is providing young people with gender neutral teaching, and learning contexts free from gender stereotypes throughout the school years. The importance of this is underestimated in many Member States. For example, nurturing children's interest in STEM subjects based on how their brains are responding, not on their gender, is key to ensure that their talent and potential are fully stimulated, developed and tapped into for the benefit of the later stages of their life. In addition to the knowledge aspect, it is equally important to ensure that children and young people obtain social and other necessary skills and develop emotional intelligence in a gender-neutral manner, without imposing any pigeonholing or prejudices. This also applies to breaking away from appearance-related gender stereotypes. |
| --- | --- |

2.5.

| 2.6. | Fostering the self-esteem and self-confidence of children and young people is an essential driver of LLGEC, which can, at its best, generate a positive outlook that lays the ground for the perception and realisation of equality for the rest of their life. |
| --- | --- |

2.6.

| 2.7. | Providing career guidance that respects gender equality plays an important role in enhancing gender equality, helping career development and job retention and preventing segregation with respect to studies and professions. While it is important to attract girls to study STEM subjects, it is also important to attract more boys to study and apply for education and care professions, especially in view of the increasing care needs of the ageing population (3). |
| --- | --- |

2.7.

| 2.8. | To sustain LLGEC throughout the whole adult stage, gender equality needs to be fostered both in family life, and in any economic and societal activities, including businesses, public services and political life. Being a matter of culture, it cannot be brought about with single policies and measures but requires recognition, ownership and constant commitment by all actors of society. The Swedish approach, where the government ‘has declared itself a feminist government’ is one example of ensuring that the knowledge and experience of both men and women is used to promote progress in all aspects of society (4). |
| --- | --- |

2.8.

| 2.9. | The EESC believes that keeping gender equality up systematically in various contexts, while ensuring the appropriate legal and policy framework, is a necessary means of moving things forward. The EESC recommends that Member States, supported by the Commission, the European Economic and Social Committee and together with social partners and relevant civil society organisations, launch a wide-ranging awareness-raising and information campaign to promote LLGEC. Special attention should be paid to the central role of both traditional and social media as platforms for shaping attitudes, e.g. through advertising. |
| --- | --- |

2.9.

| 2.10. | The campaign should draw decision-makers' attention to the state and progress of gender equality in the MS in question, measured by the Gender Equality Index, for example. It should also encourage MSs to seek inspiration from each other and share good practices. Public administration and organisations should lead by example in enhancing gender equality in their own activities. As a good practice, the EESC recommends that these actors — as well as trade unions, , employers' and civil society organisations — make public the gender balance in their management and supervisory boards. To get the positive perception across to the whole of society, the campaign should especially address men and boys with convincing messages about the benefits of gender equality. |
| --- | --- |

2.10.

| 2.11. | Gender equality in terms of participation in political decision-making at national, regional and municipal levels is crucial, considering the remarkable impact of political decisions on citizens' lives. Increasing the share of female politicians requires strengthening the awareness of voters, as well as of parties nominating candidates. |
| --- | --- |

2.11.

| 2.12. | As the improvement of gender equality requires measures to be introduced in several policy fields, the EESC reiterates its call to policymakers at appropriate levels to follow the principle of mainstreaming and include the gender equality aspect in all decisions, including decisions on budgeting, investment and funding, as well as in public procurement. Gender mainstreaming also needs to be properly monitored and evaluated. Moreover, a holistic approach to gender equality is needed with a special focus on where gender intersects with other characteristics e.g. disability, ethnic origin, single parenthood, socio-economic status, age or sexual orientation. |
| --- | --- |

2.12.

| 2.13. | The EESC encourages all EU institutions, Member States and stakeholders to make active use of the valuable work done by EIGE, for instance when it comes to gender disaggregated data and statistics. The EESC also wants to underline the importance of active inclusion of the social partners when it comes to promoting gender equality, since it is in many ways directly linked to the labour market and working conditions. Collective bargaining is a key instrument to achieve gender equality in the world of work. It is also important to utilise the EESC as an active platform for work on fostering the life-long gender equality culture. |
| --- | --- |

2.13.

3.   Specific comments — employment in post-pandemic recovery

| 3.1. | While the COVID-19 pandemic affected both women and men, the impacts have been different and the effects of the crisis risk jeopardising the progress achieved in the past decade in terms on the reduction of gender inequalities in the MS. Besides affecting the work-life balance, the pandemic has hit women harder through job losses or temporary unemployment, as sectors dominated by female workers were particularly affected (5). Women entrepreneurs have also been much more likely than men to report closing a business due to the pandemic. The largest gender gap was reported in Europe and North America, where women were 50 % more likely to report closures than men (6). |
| --- | --- |

3.1.

| 3.2. | From the point of view of gender equality and diversity, a key challenge in the post-pandemic recovery is to ensure that national recovery and resilience plans are gender-sensitive and include targeted actions to improve gender equality on the labour market. Measures should also create the right conditions for entrepreneurship and doing business, including a supportive fiscal framework and removing obstacles to female entrepreneurship. |
| --- | --- |

3.2.

| 3.3. | The need to remove obstacles and provide incentives applies to the overall participation of women in labour markets, irrespective of profession and task. It also applies to women of all ages. While it is crucial to engage young people in the labour markets through the provision of quality job opportunities, it is also important to provide opportunities for elderly people to give their contribution in a proper way (7). Considering the challenges caused by an ageing population and the worsening lack of a skilled workforce in some sectors, the inclusiveness of labour markets is ever more important also from the macro-economic point of view. |
| --- | --- |

3.3.

| 3.4. | The EESC stresses the need for an ambitious and effective transpositions of the Work-Life Balance Directive. The practical modalities to promote and facilitate better work-life balance for parents shall be laid down in the process of collective bargaining — which is the right instrument to ensure the best solutions and practices taking into account the interests of workers and businesses. Together with flexible working arrangements and flexible paid parental leaves, taxation and other incentives for women to stay on the labour market play a role in enhancing gender equality. Appropriate pay for paternity leave, especially in the first months, would encourage fathers to take longer leave, helping them to develop a closer relationship with the baby and help the mother to recover, while enhancing her work-life balance. Separate income taxation of spouses contributes to encouraging both parents to be active on the labour market. It must also be recognised that measures that enable and encourage working, also contribute to more decent pensions. |
| --- | --- |

3.4.

| 3.5. | While the participation of women in labour markets has increased in the last decade, there is still a clear gender segregation (8). Inequalities in access to education and economic opportunities for women persist, although Europe has the lowest rates of inequality — with some differences between Western and Eastern Europe — compared to other parts of the world (9). The EESC has also called for prompt measures to eradicate the gender pay and pension gaps in all areas and sectors, notably through binding pay transparency measures (10), and stresses that the former aggravates the latter, to which women are particularly vulnerable. |
| --- | --- |

3.5.

Moreover, cultural context and traditional stereotypes affect women's occupational choices. Far more women than men work, for example, in education, care, health, and social sectors, while men dominate sectors such as construction and heavy industries.

| 3.6. | In promoting gender equality as part of an inclusive and sustainable industrial development agenda, efforts need to be directed not only at strengthening the competitiveness of economic sectors where women already work in significant numbers, but also at enabling them to participate in new sectors and roles. The inclusion of women in new sectors and occupations they were previously excluded from will in turn allow emerging sectors to thrive by making full use of richer and more diverse skill sets. Offering quality jobs is a requisite to ensure that existing gender inequalities are not perpetuated in these new sectors. |
| --- | --- |

3.6.

| 3.7. | Gender segregation is also visible in education. While women graduate from tertiary education and participate in life-long learning, they prefer other subjects over science, technology, engineering and mathematics. Considering that the post-pandemic recovery needs to take place in line with the green and digital transition, STEM competences play an ever more essential role. Additionally, the importance of emotional skills (i.e. personal and social) alongside functional competences is essential as this forms the basis for enabling resilience, mental strength, conflict management, collaboration and factual communication. The focus of the future definitely needs to be on rational and emotional intelligence. LLGEC needs to include emotional education, as the World Economic Forum 2021 states that the top seven human skills include creativity, emotional intelligence and complex problem solving (11). |
| --- | --- |

3.7.

| 3.8. | With respect to the digital transformation, clear gender segregation in education and labour markets can be seen in terms of the distribution of ICT graduates, ICT specialists, and scientists and engineers in high-technology sectors. |
| --- | --- |

3.8.

| 3.9. | Encouraging girls' interest in STEM is crucial for their successful inclusion in the professions of the future. On top of that, targeted measures and development programmes are needed to help attract and retain them in STEM-related careers. In 10 years, 9 out of 10 jobs will require digital skills (12). The future of work will see a shift in demand towards technology professionals such as computer engineers and ICT specialists. Women comprise 65 % of European employees but account for only 17 % of the European ICT workforce, while by 2026, 57 % of the jobs set to be displaced by technology would have belonged to women (13). |
| --- | --- |

3.9.

| 3.10. | Involvement of women in the development of AI is also essential in order to avoid algorithms that are based on biased data on reality and thus provide biased results. An intersectional approach is also necessary in this area. Moreover, as access to high-speed connectivity and digital skills form the necessary basis for a successful digital transformation, they should be available and accessible to all, irrespective of gender, age, disability, socio-economic background, or geographic location. |
| --- | --- |

3.10.

| 3.11. | The underrepresentation of women in the fields of technology is problematic also from the green transition point of view, as tackling climate change and environmental problems requires development and introduction of many kinds of technological solutions. |
| --- | --- |

3.11.

| 3.12. | While both digital and green skills must be considered an integral part of every profession, they have the potential to attract young people more than older workers. On the other hand, there is clearly a difference between work-related ICT skills, which include data management and desktop publishing, and the digital literacy commonly associated with young people, such as messaging and recreational Internet use. |
| --- | --- |

3.12.

| 3.13. | Besides STEM competences, it is also important to encourage girls to study economics and management subjects, so as to prepare them for leadership positions. Moreover, it is important to guide them to learn entrepreneurial and risk management skills and to strengthen their self-confidence to avoid and tackle the impostor syndrome (14). Looking at the stress typology of women, there seems to be a tendency towards more introvert, as opposed to extrovert, personalities in stress situations. This results in women not seeking out exposed positions due to fear of negative comments from others, which are taken personally, not feeling qualified if they do not (over)fulfil all specifications in a job description, and not wanting to be a ‘quota woman’. This is often related back to (unconscious) beliefs and fears. While the enhancement of skills and competences require practical measures at the level of teaching and learning methods and of career guidance, these objectives should also be connected to the general awareness-raising programme on LLGEC. |
| --- | --- |

3.13.

| 3.14. | One specific aspect to be addressed is the gender bias in healthcare, due to a lack of research, male-centric education, misdiagnosis and undertreatment. Ignorance of sex- and gender-based differences across medical disciplines easily leads to incorrect diagnosis or medication, because female symptoms differ from male symptoms, or because drug dosages are based on clinical trials which are mainly conducted on men. There is also a lack of research on female-specific conditions, such as endometriosis and menopause, and of gender-disaggregated data in research making it difficult to understand the mechanisms behind health issues and hampering attempts to find an appropriate response to e.g. a higher risk of females developing long COVID. |
| --- | --- |

3.14.

| 3.15. | To avoid the negative impact of biased medicine on women's participation in the labour market, the EESC stresses that in all European health and pharmaceutical strategies, gender bias and sex- and gender-based differences must be taken into account and addressed. Moreover, the right of women to make autonomous decisions about their own body needs to be fully respected. |
| --- | --- |

3.15.

4.   Specific comments — work-life balance

| 4.1. | Gender equality in terms of work-life balance is highly important for the economy and society as it is closely related to well-being, overall employment and participation in labour markets, as well as to careers and positions in both the public and private sectors. This applies to various tasks and responsibilities in businesses, administration and political decision-making. |
| --- | --- |

4.1.

| 4.2. | Work-life balance poses a bigger challenge for women than for men because women account for a larger share of unpaid housework and caring responsibilities. According to the Gender Equality Index (15) (16), the EU's score has dropped since 2010 in the domain of time, which measures the distribution of housework and caring responsibilities. The significant variations between Member States reflect differences in national systems and family cultures. |
| --- | --- |

4.2.

| 4.3. | The pandemic has increased the pressure on families in terms of work-life balance. This applies especially to women and single mothers, while with regard to childcare, there are indications of a narrower gender gap due to both parents teleworking (17). Teleworking can provide many opportunities to contribute to gender equality and a better coordination can add value. However the EESC has also warned of the need to prevent teleworking from further widening the unequal division of work at home between women and men (18). The pandemic has affected the work-life balance of women in various positions, including entrepreneurs, managers, and employees. It is not to be forgotten that women often have a different feeling of accountability and responsibility when it comes to ‘caring for others’. |
| --- | --- |

4.3.

| 4.4. | Many factors related to gender equality are dependent on the national social infrastructure, which plays an important role in gaining higher participation in labour markets and a better work-life balance. The most obvious systems cover the care system, parental leave, the school system, and employment measures. |
| --- | --- |

4.4.

| 4.5. | Reiterating its previous suggestions (19), the EESC finds it important for Member States to implement the Work-life Balance Directive in an ambitious, efficient and timely manner, to provide families with appropriate and more equal choices, including promoting better paid parental leave for both parents. At the same time, implementation of the Directive must also take into consideration the needs of businesses, in particular SMEs. |
| --- | --- |

4.5.

| 4.6. | The EESC emphasises the need for the Member States to invest in diverse care infrastructures, including childcare, after-school care, elderly care, and care for people with disabilities, so ensure accessibility and affordability for all. The EESC invites the Member States, together with social partners, to elaborate appropriate instruments, that will help families to have easy and effective access to supporting and care services. |
| --- | --- |

4.6.

| 4.7. | Furthermore, a new kind of mindset is needed at all levels to improve gender equality with respect to work-life balance. Reducing and breaking stereotypical thinking in terms of family roles is key here, as well as employment practices which encourage work-life balance for both women and men. |
| --- | --- |

4.7.

5.   Specific comments — leadership

| 5.1. | While gender equality and non-discrimination at work are ensured by legislation, equal participation of women and men in business leadership is supported, not only by the provision of equal opportunities, but also by the wider economic and societal benefits it brings through its contribution to broader perspectives, creativity, and competitiveness (20). It is in the interests of companies to make use of women's higher education and talents by supporting their presence on boards and in other leadership positions. This requires that the benefits of diversity are well understood, as well as the negative impact for the individuals and society of not promoting diversity in all areas. |
| --- | --- |

5.1.

| 5.2. | While there is still much room for improvement, the biggest progress in the EU's score in the Gender Equality Index since 2010 has been in the domain of power, which measures progress in political and economic decision-making. The most notable improvement was women's increased presence on the boards of the largest listed companies. This explains most of the overall increase in the Index score (21). |
| --- | --- |

5.2.

| 5.3. | The means of enhancing gender diversity on company boards vary between Member States (22) and there are clear differences in terms of the current situation and the progress made over time. Some Member States have adopted mandatory national quotas for large, listed companies, with quotas ranging from 25 to 40 % (23). On the other hand, a number of Member States exceed the EU average or have made substantial progress without having quotas, relying on self-regulation. In France, where legislation was introduced in 2011, more than 40 % of board members are women, and eight countries have exceeded the level of one third. At the same time, there are some Member States with less than a 10 % share. The average share in the EU is around 30 %. |
| --- | --- |

5.3.

| 5.4. | The differences also relate to individual companies. While top companies have shown considerable progress, less change can be seen at the bottom end of the company ranking (24). It is also worth noting that although board members are often executive leaders, the countries that perform best in terms of the share of women holding CEO positions in large companies seem not to be the same as those countries which perform best in terms of company board members (25). |
| --- | --- |

5.4.

| 5.5. | Thus, there does not seem to be one explanation alone for the differences between Member States. This is to be expected, since differences in national traditions and cultures play a significant role in the development of gender equality. Supporting positive development, sharing of best practices and learning from others' experiences is of utmost importance. |
| --- | --- |

5.5.

| 5.6. | The EESC also reiterates its conclusions and recommendations on the matter (26), and welcomes the political agreement reached recently between the European Parliament and the Council on the Directive on improving the gender balance among non-executive directors of listed companies, proposed by the Commission in 2012. The Committee invites the EU institutions to proceed swiftly with putting it into effect in a prompt and efficient manner. Member States, in consultation with social partners, are in the best position to decide on the best and most appropriate practical measures to increase the share of women on boards, bearing in mind that it is the owners of a company who determine the board's composition. |
| --- | --- |

5.6.

| 5.7. | The EESC finds it important to promote women's leadership by means of common programmes for female leaders and candidates for board and senior executive positions, and through individual training and mentoring (27). It encourages companies to invest in such programmes which could also be supported by EU funding. Women's promotion to leading corporate positions should also be accompanied by equal payment with men holding the same positions, following the principle of equal pay for equal job done, which the EESC fully endorses. |
| --- | --- |

5.7.

6.   Specific comments — entrepreneurship

| 6.1. | In promoting entrepreneurship, the full potential of female creativity and capabilities must be tapped into. Women entrepreneurs have also shown themselves to be strong and resilient in the face of crisis and chaos (28). |
| --- | --- |

6.1.

| 6.2. | Women entrepreneurs were also severely impacted by the pandemic, and having to bear a disproportionate share in caring responsibilities, aggravated by a lack of childcare services and lockdown. Yet, many women entrepreneurs managed to turn the new business context to their advantage and to inspire others, especially other women, to also become entrepreneurs and start more businesses. This produces positive effects such as job creation and consequent well-being. |
| --- | --- |

6.2.

| 6.3. | Europe has some of the lowest rates of female entrepreneurship compared to women in other parts of the world (5,7 %, compared with a world average of 11 %). One explanation is that women in European countries have more other job options, compared to other parts of the world. Nonetheless, job scarcity was still the most common reason cited for business start-ups, more so by women than men (29). |
| --- | --- |

6.3.

| 6.4. | Access to finance is a prerequisite for entrepreneurship, and equal access must be ensured in terms of both private financing and public funding. The EESC calls for the evaluation of the criteria of relevant funding, such as the Recovery and Resilience Facility, to promote equality in entrepreneurship, as well as to encourage investment in projects that enhance gender equality, including in digital and care infrastructure. |
| --- | --- |

6.4.

| 6.5. | Women in Europe are much more likely to have fewer employees (between 1 and 5) if they run an enterprise, or to be self-employed. Women in older age groups are more likely to lead enterprises. While women consider entrepreneurship an attractive option and although they are highly educated on average, they report a low sense of entrepreneurship, in terms of seeing new business opportunities, having the skills to start a business and being undeterred by fear of failure (30). |
| --- | --- |

6.5.

| 6.6. | Together with cultural reasons, the problems of combining the demands of work and family may generate this kind of perception. Consequently, women entrepreneurs may stick to certain sectors and be reluctant to grow their business. To encourage female entrepreneurship, women need to be supported in overcoming these perceptions and restricting factors (31). In line with the Better Regulation agenda, the top level EU strategy to ensure that EU legislation in general delivers on its objectives in the most effective and efficient way, further incentives can be provided by measures that simplify administrative procedures and reduce compliance costs, without undermining the level of protection of the relevant legislation (32). |
| --- | --- |

6.6.

7.   Specific comments — Ukrainian refugees

| 7.1. | The Russian invasion of Ukraine caused an unprecedented humanitarian crisis, including the arrival of hundreds of thousands of asylum-seeking refugees — mainly women and children — in the EU MSs. All MSs, supported by civil society, are doing their utmost to take care of and accommodate the refugees and integrate them into the labour markets, but there are many challenges that call for better coordinated solutions (33). |
| --- | --- |

7.1.

| 7.2. | As most of the refugees are women with children, access to social care services, crèches, nurseries and schools is a critical bottleneck that prevents the women from being integrated into the labour market. Moreover, overcoming the language barrier, recognition of the education and qualifications of refugees and swift re- and up-skilling are central elements of integration. Securing the necessary means for distance working, such as internet connectivity and devices, are also among the tools needed to tackle this issue. |
| --- | --- |

7.2.

| 7.3. | The EESC calls for a more coordinated approach between the MSs when they put into practice the Policy guidance on supporting the inclusion of Ukrainian refugees in education: considerations, key principles and practices (34). The EESC also invites the EC to activate all potential funding possibilities, especially for MS receiving huge numbers of refugees. |
| --- | --- |

7.3.

| 7.4. | Women during war and fleeing from conflict are more vulnerable to sexual exploitation and sexual abuse. Rape is often used as a weapon in war. For Ukrainian women refugees, and in particular for rape victims, it is crucial to have access to Sexual and Reproductive Health Services, including contraception, emergency contraception, safe abortion care and psychological trauma care. Women should never be forced into proceeding with an unwanted pregnancy. The absence of these services in Member States should never be a reason to stop them from leaving an unsafe country. All Member States must ensure access to these services for all refugees. In general, trauma care for every refugee needs to be offered proactively, otherwise this is the perfect breeding ground for later conflicts and negative emotions costing states enormously! In this area, low-threshold, hybrid offers of support are needed desperately and funding of such start-ups needs to be supported consistently. |
| --- | --- |

7.4.

| 7.5. | One more issue to be tackled is the vaccination status of the refugees — especially children. As the EU has well developed vaccination programmes for children, many dangerous diseases are eliminated — such as poliomyelitis, smallpox, some types of hepatitis, etc. To preserve this achievement, the MSs must mobilise their health care systems, and guidelines at EU level will be of great help in this process. Additional complications arise from the fact that in many MSs access to social care, e.g. kindergarten or school, is subject to a completed vaccination status. |
| --- | --- |

7.5.

| 7.6. | Later on, the reconstruction of Ukraine should be an opportunity to enhance gender equality among Ukrainians, by building up education, health care, social and digital infrastructure, among other things. |
| --- | --- |

7.6.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  SOC/723 (not yet published in the Official Journal), OJ C 364, 28.10.2020, p. 77, OJ C 240, 16.7.2019, p. 3, OJ C 228, 5.7.2019, 103.

1

(2)  See for example, Articles 2 and 3(3) of the Treaty on European Union, Article 21 of the Charter of Fundamental Rights, Article 8 of the Treaty on the Functioning of the European Union.

2

(3)  OJ C 194, 12.5.2022, p. 19.

3

(4)  https://sweden.se/life/equality/gender-equality

4

(5)  OJ C 220, 9.6.2021, p. 13.

5

(6)  Global Entrepreneurship Monitor.

6

(7)  For further gender-related aspects in connection to ageing, see also OJ C 194, 12.5.2022, p. 19.

7

(8)  EIGE.

8

(9)  Gender Gap Index.

9

(10)  OJ C 341, 24.8.2021, p. 84.

10

(11)  The digital, female-founded start-up UP'N'CHANGE (www.upnchange.com) has found ways to translate deep expertise in psychology and coaching into simple digital tools to help people develop personal, social and creative skills. The vision of UP'N'CHANGE is to unleash the potential of employees and teams with digital tools to enable organisations to achieve sustainable success. Because the right skillset means effective collaboration. Effective collaboration means innovation. And innovation means growth for everyone.

11

(12)  World Economic Forum Annual Meeting, 2020.

12

(13)  Ibid.

13

(14)  The impostor phenomenon e.g., in which one is affected by self-doubt regarding own abilities and capabilities, can hinder applying for leadership- or exposed positions. Especially very reflective people, who tend to withdraw under stressful circumstances, have difficulties in dealing with people who project strong self-confidence.

14

(15)  EIGE, https://eige.europa.eu/publications/gender-equality-index-2020-report/progress-gender-equality-most-notable-company-boards

15

(16)  Eurofound.

16

(17)  Sevilla and Smith 2020.

17

(18)  OJ C 220, 9.6.2021, p. 13.

18

(19)  OJ C 129, 11.4.2018, p. 44.

19

(20)  See also OJ C 318, 23.12.2009, p. 15 and OJ C 341, 21.11.2013, p. 6.

20

(21)  EIGE Statistical brief: gender balance in corporate boards 2020.

21

(22)  EIGE.

22

(23)  https://eige.europa.eu/news/countries-legislated-quotas-could-achieve-gender-balance-parliaments-2026-those-without-may-take-close-twenty-years

23

(24)  European Women on Boards, https://europeanwomenonboards.eu/wp-content/uploads/2021/01/EWoB-Gender-Diversity-Index-2020.pdf

24

(25)  Different sources combined by FI Chamber of Commerce, https://naisjohtajat.fi/wp-content/uploads/sites/28/2019/01/women-directors-and-executives-report-2018.pdf

25

(26)  OJ C 133, 9.5.2013, p. 68.

26

(27)  One excellent example are the training and support programmes, offered by WKÖ, https://www.wko.at/service/Women_in_Business.html

27

(28)  Women's Entrepreneurship 2020/21: Thriving Through Crisis. Published by the Global Entrepreneurship Research Association, London Business School, ISBN: 978-1-9160178-8-7.

28

Women's Entrepreneurship 2020/21: Thriving Through Crisis

(29)  Ibid.

29

(30)  Global Entrepreneurship Monitor.

30

(31)  See also OJ C 299, 4.10.2012, p. 24.

31

(32)  SME focus — Long-term strategy for the European industrial future. Policy department for Economic, Scientific and Quality of Life Policies, Directorate-General for Internal Policies of the European Parliament. Author: Stephanus Johannes SMIT, PE 648.776 — April 2020.

32

SME focus — Long-term strategy for the European industrial future

(33)  Building on the suggestions of OJ C 242, 23.7.2015, p. 9.

33

(34)  https://www.schooleducationgateway.eu/en/pub/resources/publications/policy-guidance-on-refugees.htm

34

---

ANNEX

The following amendment, which received at least a quarter of the votes cast, was rejected during the discussion (Rule 43(2) of the Rules of Procedure):

AMENDMENT 1

Tabled by:

ANGELOVA Milena

BLIJLEVENS René

KONTKANEN Mira-Maria

MINCHEVA Mariya

PILAWSKI Lech

VADÁSZ Borbála

SOC/731 — Gender equality

Point 3.5

Amend as follows:

| Section opinion | Amendment |
| --- | --- |
| While the participation of women in labour markets has increased in the last decade, there is still a clear gender segregation (1). Inequalities in access to education and economic opportunities for women persist, although Europe has the lowest rates of inequality — with some differences between Western and Eastern Europe — compared to other parts of the world (2). The EESC has also called for prompt measures to eradicate the gender pay and pension gaps in all areas and sectors, notably through
  binding
  pay transparency measures (3), and stresses that the former aggravates the latter, to which women are particularly vulnerable.
  Moreover, cultural context and traditional stereotypes affect women's occupational choices. Far more women than men work, for example, in education, care, health, and social sectors, while men dominate sectors such as construction and heavy industries. | While the participation of women in labour markets has increased in the last decade, there is still a clear gender segregation (1). Inequalities in access to education and economic opportunities for women persist, although Europe has the lowest rates of inequality — with some differences between Western and Eastern Europe — compared to other parts of the world (2). The EESC has also called for prompt measures to eradicate the gender pay and pension gaps in all areas and sectors, notably through
  promoting
  pay transparency measures (3), and stresses that the former aggravates the latter, to which women are particularly vulnerable.
  Moreover, cultural context and traditional stereotypes affect women's occupational choices. Far more women than men work, for example, in education, care, health, and social sectors, while men dominate sectors such as construction and heavy industries. |

Section opinion

Amendment

While the participation of women in labour markets has increased in the last decade, there is still a clear gender segregation (1). Inequalities in access to education and economic opportunities for women persist, although Europe has the lowest rates of inequality — with some differences between Western and Eastern Europe — compared to other parts of the world (2). The EESC has also called for prompt measures to eradicate the gender pay and pension gaps in all areas and sectors, notably through
  binding
  pay transparency measures (3), and stresses that the former aggravates the latter, to which women are particularly vulnerable.

Moreover, cultural context and traditional stereotypes affect women's occupational choices. Far more women than men work, for example, in education, care, health, and social sectors, while men dominate sectors such as construction and heavy industries.

While the participation of women in labour markets has increased in the last decade, there is still a clear gender segregation (1). Inequalities in access to education and economic opportunities for women persist, although Europe has the lowest rates of inequality — with some differences between Western and Eastern Europe — compared to other parts of the world (2). The EESC has also called for prompt measures to eradicate the gender pay and pension gaps in all areas and sectors, notably through
  promoting
  pay transparency measures (3), and stresses that the former aggravates the latter, to which women are particularly vulnerable.

Moreover, cultural context and traditional stereotypes affect women's occupational choices. Far more women than men work, for example, in education, care, health, and social sectors, while men dominate sectors such as construction and heavy industries.

Outcome of the vote:

| In favour: | 93 |
| --- | --- |
| Against: | 114 |
| Abstention: | 12 |

In favour:

93

Against:

114

Abstention:

12

---

(1)  EIGE.

(2)  Gender Gap Index.

(3)  SOC/678.

(1)  EIGE.

(2)  Gender Gap Index.

(3)  SOC/678.

---

III Preparatory acts

European Economic and Social Committee

571st plenary session of the European Economic and Social Committee – Fully in-person plenary session, 13.7.2022-14.7.2022

| 22.11.2022 | EN | Official Journal of the European Union | C 443/75 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/75

---

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information

(COM(2022) 143 final — 2022/0092 (COD))

(2022/C 443/10)

| Rapporteur: | Thierry LIBAERT |
| --- | --- |
| Co-rapporteur: | Gonçalo LOBO XAVIER |

Rapporteur:

Thierry LIBAERT

Co-rapporteur:

Gonçalo LOBO XAVIER

| | Council of the European Union, 12.4.2022 |
| --- | --- |
| | European Parliament, 7.4.2022 |
| Legal basis | Article 114 of the Treaty on the Functioning of the European Union |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 27.6.2022 |
| Outcome of vote
  (for/against/abstentions) | 82/0/3 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 209/0/1 |

Council of the European Union, 12.4.2022

European Parliament, 7.4.2022

Legal basis

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

Section responsible

Single Market, Production and Consumption

Adopted in section

27.6.2022

Outcome of vote

(for/against/abstentions)

82/0/3

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

209/0/1

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) supports the European Commission (EC)'s proposals to empower consumers to act in support of the green transition. The Committee calls on the EC to maintain a high level of ambition, as this is a project with a positive economic, social and environmental impact. |
| --- | --- |

1.1.

| 1.2. | The EESC stresses the need to make every effort to ensure that the information concerned is systematically made available to consumers, in particular the information on spare parts and repair manuals, as well as on planned software updates. |
| --- | --- |

1.2.

| 1.3. | The EESC urges the EC to be ambitious by putting into practice the principle of a reparability score for brown and white goods. This score's level of ambition must meet consumer expectations on both the variety of products covered and the criteria taken into account. |
| --- | --- |

1.3.

| 1.4. | In addition to the reparability of these products, the EESC believes that the EC should push forward with the principle of simple and common labelling showing the durability of products in the coming years. |
| --- | --- |

1.4.

| 1.5. | Training new repairers and upgrading the skills of current operators should also be encouraged, as this is essential to develop repairing, which is a major source of jobs for our continent. The EESC also calls on Europe to reduce its dependence on raw materials in order to boost its ability to repair and equip itself with spare parts. Similarly, Europe needs a serious and effective reindustrialisation policy. The recent crises have revealed weaknesses that should be seen as opportunities for recovery. |
| --- | --- |

1.5.

| 1.6. | In addition to the need to enforce displaying the length of the legal guarantee, consumers must be better protected against confusion between legal and commercial guarantees. In terms of guarantees, the primacy of repair over replacement with a new product should also be promoted but without limiting the consumer's free choice of remedy. |
| --- | --- |

1.6.

| 1.7. | In order to encourage longer product lifespans, the EESC supports the addition of new commercial practices to the list of actions considered misleading. However, on three points, the EESC calls on the EC to go further than the obligation to provide:






  — | the techniques introduced to shorten the lifespan of a product: the EESC considers that these practices should be included as misleading commercial practices, in addition to the mere absence of information; |
| --- | --- | --- |

1.7.

—

the techniques introduced to shorten the lifespan of a product: the EESC considers that these practices should be included as misleading commercial practices, in addition to the mere absence of information;

| — | the irreparability of certain goods: here too, intentional barriers to repair, and not merely the lack of information on the matter, could be regarded as misleading commercial practices; |
| --- | --- |

—

the irreparability of certain goods: here too, intentional barriers to repair, and not merely the lack of information on the matter, could be regarded as misleading commercial practices;

| — | updates likely to cause malfunctions: it should be a requirement to make updates reversible. |
| --- | --- |

—

updates likely to cause malfunctions: it should be a requirement to make updates reversible.

| 1.8. | These moves to empower consumers must go hand in hand with better protection against misleading advertising. In this regard, the legal framework for advertising must better integrate the aims of sustainable development. |
| --- | --- |

1.8.

| 1.9. | Advertising must prohibit any unsubstantiated claim, such as those often seen in relation to carbon neutrality, and any mention or representation of behaviour contrary to the protection of the environment and the preservation of natural resources. Greater powers to verify environmental claims are also needed. |
| --- | --- |

1.9.

| 1.10. | In order to avoid confusion and in view of the proliferation of environmental labels that are often self-proclaimed, the European Commission must put greater emphasis on the European eco-label and the need for certification procedures for labelling. |
| --- | --- |

1.10.

| 1.11. | The EESC calls on the EU to strengthen protection for whistleblowers on the environmental characteristics of products, in order to raise the alarm over misleading commercial practices. |
| --- | --- |

1.11.

| 1.12. | Finally, the EESC calls on the Commission to promote strong consumer awareness of the issues related to responsible consumption. |
| --- | --- |

1.12.

2.   Gist of the Commission document

| 2.1. | This proposal for a directive aims to strengthen consumer rights by amending two directives that protect consumers' interests at EU level: Directive 2005/29/EC of the European Parliament and of the Council (1) on unfair commercial practices and Directive 2011/83/EU of the European Parliament and of the Council (2) on consumer rights. The proposal aims to contribute to a circular, clean and green EU economy by enabling consumers to take informed purchasing decisions and therefore contribute to more sustainable consumption. It also targets unfair commercial practices that mislead consumers away from sustainable consumption choices. |
| --- | --- |

2.1.

| 2.2. | The proposal was one of the initiatives set out in the New Consumer Agenda (3) and the Circular Economy Action Plan (4) and follows up on the European Green Deal (5). |
| --- | --- |

2.2.

| 2.3. | The proposal includes a whole series of measures to update existing consumer law to ensure consumers are protected and can actively contribute to the green transition. The Consumer Rights Directive currently requires traders to provide consumers with information on the main characteristics of goods or services. |
| --- | --- |

2.3.

| 2.4. | However, as there is no requirement to provide information on the absence of commercial guarantees of durability, the directive does not provide sufficient incentive for producers to provide such guarantees to consumers. Research shows that where consumer products are offered with a commercial guarantee, the information on such commercial guarantees and the way that consumers are being charged is often unclear, imprecise or incomplete, making it difficult for consumers to compare between products and to distinguish the commercial guarantee from the (compulsory) legal guarantee (6). |
| --- | --- |

2.4.

| 2.5. | Furthermore, the directive does not contain specific requirements to provide information to consumers on the reparability of goods. This information, which would encourage the repair of goods and would therefore be particularly valuable in helping consumers contribute to a circular economy, is largely missing at the point of sale. Recent studies show that up to 80 % of EU consumers claim to have difficulty in finding information on how easy it is to repair a product (7). |
| --- | --- |

2.5.

3.   General comments

| 3.1. | Currently, most European consumers complain that there is a lack of information on the environmental impacts of consumption. This was confirmed by the public consultation organised by the EC. In 2012, the Eurobarometer on European consumers' behaviour and attitudes towards green products showed that 92 % of European respondents were in favour of information being provided on the lifespan of products. |
| --- | --- |

3.1.

| 3.2. | This lack of information is harmful because clear and comprehensible information is conducive to behavioural change. This has been confirmed by the EESC, in a study it carried out involving 3 000 European consumers. This involved a simulation whereby information was provided on the lifespan of everyday consumer products on an online shopping site. The study found that providing this information would see a 56 % increase in sales for products with a long lifespan. |
| --- | --- |

3.2.

| 3.3. | This lack of consumer information is of major social significance. The current difficulties surrounding purchasing power make it even more important to support the middle classes and the disadvantaged in moving towards repair and more responsible consumption. Improving consumer information by taking simple steps is therefore one way of helping to put responsible consumption within the grasp of the most vulnerable. |
| --- | --- |

3.3.

| 3.4. | Improving consumer information will help to strengthen the business model of European businesses. Given the risks of dumping with imports of cheap products, micro-enterprises and SMEs, as well as their clients, are likely to gain a higher profile among consumers, enabling them to promote the quality of products designed in Europe. |
| --- | --- |

3.4.

| 3.5. | Bricks-and-mortar retailers in the EU can also take a positive view of these upcoming legislative developments, as these changes are likely to increase their comparative advantage over online outlets. On top of the advice provided by the sales assistant, the consumer will also have access to this new information. Such developments are conducive to strengthening employment in the EU. To do this, Europe needs the right human resources: the EESC calls on the Commission to support businesses, in particular SMEs, in providing training. |
| --- | --- |

3.5.

| 3.6. | While appropriate environmental information needs to be provided, it is important to ensure that all environmental impacts are taken into account. Climate impacts, measured in the form of greenhouse gas emissions, are central to the public debate, but they constitute only one part of the environmental impact. Product life cycle analyses show that the bulk of the environmental impact for most consumer goods comes from the extraction of resources and the manufacturing of the products. It must therefore be an environmental priority to extend the lifespan of products. |
| --- | --- |

3.6.

| 3.7. | However, in all these aspects, the average European's consumption is not environmentally sustainable. For example, ecological footprint calculations have shown that the way of life of an average European is now equivalent to 2,8 planets. |
| --- | --- |

3.7.

| 3.8. | In many cases, the way a product is designed shortens its lifespan, be it through technical processes, barriers to repair or software techniques. The resulting premature obsolescence is one of the main issues that fuels consumer dissatisfaction, as they are disadvantaged by considerable information asymmetry. |
| --- | --- |

3.8.

| 3.9. | Finally, the EESC notes that the war in Ukraine makes it even more imperative to strengthen Europe's strategic autonomy. From this point of view, initiatives that contribute to a better product lifespan, in particular those relating to strategic metals, should be encouraged. |
| --- | --- |

3.9.

4.   Specific comments

4.1.   Providing additional consumer information on the durability of goods

| 4.1.1 | Given the importance of product lifespan issues, consumer information should be improved. In this regard, the Commission's proposal is welcome as it aims to mainstream the provision of information on the availability of spare parts, on user manuals and on the period covered by software updates. |
| --- | --- |

4.1.1

| 4.1.2 | It should be noted that while a lack of information is harmful, excessive or overly technical information is almost just as bad. |
| --- | --- |

4.1.2

| 4.1.3 | The EESC warns the European Commission about the potential drawbacks of providing new information through e-labels or QR codes. As well as the additional environmental impact of the digital technology involved in these methods, it is worth bearing in mind that any extra steps (needing to take out a smartphone, clicking, scanning etc.) are a further barrier to responsible consumption. |
| --- | --- |

4.1.3

| 4.1.4 | The Commission's proposal is a step in the right direction, as it links the communication issues with those of early product obsolescence. As a first step in the process of improving consumer information, a reparability score should be introduced for as many products as possible, as has been done in France since 2021. Reparability is one of the most easily measurable aspects of product durability. |
| --- | --- |

4.1.4

| 4.1.5 | To meet the challenges, the reparability score must be designed ambitiously, on at least two fronts: On the one hand, it must cover as many electrical and electronic products and household appliances as possible. Secondly, all aspects of reparability must be incorporated, including by taking into account the repair costs (cost of spare parts), the availability of replacement parts and the conditions of software support. |
| --- | --- |

4.1.5

| 4.1.6 | In the EESC's view, an ambitious consumer information policy should not stop at reparability. Consumers' expectations are mainly concerned with whether products last over time, not whether they are repairable. The EESC has already commented on this point (8). The EU needs to have a simple product durability index, which incorporates reparability, but also the product's robustness and its potential to be upgraded, which will indirectly support reindustrialisation in Europe. This principle must be included in the Commission's proposals, to avoid neglecting a key consumer expectation, although its implementation must be gradual and its implementing provisions agreed with stakeholders. |
| --- | --- |

4.1.6

| 4.1.7 | Further work on guarantees is needed to improve consumer information. First of all, the EC must reaffirm a simple principle: the existence and the duration of the guarantee of conformity (Directive (EU) 2019/771 of the European Parliament and of the Council (9)) must be displayed everywhere, in both bricks-and-mortar shops and online sales outlets, for all goods concerned. The priority must be to enforce the existing law, before adding new rights. |
| --- | --- |

4.1.7

| 4.1.8 | The EESC welcomes the fact that account has been taken of the difficulties that consumers may encounter in distinguishing between commercial guarantees and legal guarantees. It is therefore positive that the EC is seeking to ensure that these commercial guarantees do not create confusion. |
| --- | --- |

4.1.8

| 4.1.9 | In order to boost its positive effects on environmental protection, the guarantee could promote a repair of the product, and not replacement with a new product. The EU could promote the concept of giving repair priority over replacement, in the event the product breaks down, by making repair easier, quicker and more convenient choice for consumers. |
| --- | --- |

4.1.9

| 4.1.10 | In conjunction with these provisions, raising awareness among citizens could contribute to an even greater extent to this shift in consumption. Campaigns on good responsible consumption habits to adopt (information, second hand, repair, product maintenance) must be promoted or even initiated by the EU, especially with the support of organised civil society, which could play a critical role in this proposal. |
| --- | --- |

4.1.10

4.2.   Strengthening the provisions by going beyond the obligation to inform

| 4.2.1 | By only penalising a lack of information, the EU would pave the way for the legalisation of certain practices that are not compatible with consumer and environmental protection. The EU cannot settle for prohibiting a lack of information on a technique aimed at limiting the lifespan of a product, it must ban this practice itself. In simple terms, it would not make sense for the EU to send the message that planned obsolescence is allowed as long as it is accompanied by consumer information. The provision must give a clear signal to manufacturers that, in Europe, products cannot be designed to break down prematurely. |
| --- | --- |

4.2.1

| 4.2.2 | Similarly, other wordings in the directive risk failing to provide sufficient protection for consumers. It is not enough to require the manufacturer to inform the consumer that goods are not repairable. The actual practice of intentionally making products that cannot be repaired must be banned in its own right. |
| --- | --- |

4.2.2

| 4.2.3 | As the EESC and the EC know, software updates often come from memory- and energy-intensive software that reduces the lifespan of connected equipment. The legislation should not solely require the manufacturer to inform the consumer about the adverse effects of an update. Once again, it is easy to imagine how this information could be buried in the middle of a flood of positive information on the update, leading the consumer to accept it. |
| --- | --- |

4.2.3

4.3.   Regulating and penalising practices that disempower consumers

| 4.3.1 | As the Commission rightly points out, greenwashing practices are one of the main obstacles to consumer information in support of the green transition. The draft directive rightly points out the need to penalise unsubstantiated generic environmental claims that are not verifiable. |
| --- | --- |

4.3.1

| 4.3.2 | The EESC welcomes the ban on displaying sustainability labels which are not based on a certification scheme. The gradual and coordinated development of a European index, as proposed in this opinion, would address this issue. |
| --- | --- |

4.3.2

| 4.3.3 | Other environmental claims frequently undermine good consumer information. It is right to ban giving particular emphasis to an aspect of environmental performance when it only concerns one aspect of the product or when it merely concerns the implementation of legal obligations or is actually a common practice. |
| --- | --- |

4.3.3

| 4.3.4 | Encouraging responsible consumption also involves improving labelling systems that certify genuine environmental measures. In this regard, the European Ecolabel is still underused today, despite the progress it has seen. Consideration should be given to providing support to make this label more accessible, and to rolling out a suitable communication campaign. |
| --- | --- |

4.3.4

| 4.3.5 | In keeping with these points, the legal framework on advertising must better incorporate the principles of sustainable development, including by robustly regulating the advertising of the most polluting products — in line with the EESC's position in its recent opinion on this issue (10). |
| --- | --- |

4.3.5

| 4.3.6 | In the same vein, while advertising must avoid applying environmental claims to the whole product when they only concern certain aspects of the product, it must also ban all unsubstantiated claims, such as those too often seen in relation to carbon neutrality, and any mention or representation of behaviour contrary to the protection of the environment and the preservation of natural resources. In addition, advertising must prohibit any representation likely to trivialise or promote practices or ideas contrary to the Sustainable Development Goals. |
| --- | --- |

4.3.6

| 4.3.7 | In order to provide early warnings about misleading marketing practices, information is often needed from those placing products on the market themselves. However, today, few whistleblowers in this area come forward, for fear of reprisals. It must be possible to apply the whistleblowing procedure referred to in Directive (EU) 2019/1937 of the European Parliament and of the Council (11) to those blowing the whistle in such cases. |
| --- | --- |

4.3.7

All of these provisions will only be fully effective if they are coordinated with the economic stakeholders representing both large and small and medium-sized enterprises, as well as with the social partners, consumer associations and civil society more broadly. The EESC considers this to be a key policy, as it underpins a competitive market model that is adapted to environmental issues, is consumer-friendly and mindful of the competitiveness of European economic operators, and is compatible with the issues of Europe's strategic autonomy.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) (OJ L 149, 11.6.2005, p. 22).

1

(2)  Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, p. 64).

2

(3)  COM(2020) 696 final, 13 November 2020.

3

(4)  COM(2020) 98 final, 11 March 2020.

4

(5)  COM(2019) 640 final, 11 December 2019.

5

(6)  European Commission, Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU, 2015. Impact Assessment supporting study: Study on Empowering Consumers Towards the Green Transition, July 2021. Commercial warranties: are they worth the money? ECC-Net, April 2019.

6

Consumer market study on the functioning of Legal and Commercial Guarantees for consumers in the EU

Study on Empowering Consumers Towards the Green Transition

Commercial warranties: are they worth the money

(7)  European Commission, Behavioural study on Consumers' engagement in the circular economy, 2018, p. 81.

7

Behavioural study on Consumers' engagement in the circular economy

(8)  OJ C 67, 6.3.2014, p. 23.

8

(9)  Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC (OJ L 136, 22.5.2019, p. 28).

9

(10)  OJ C 105, 4.3.2022, p. 6.

10

(11)  Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17).

11

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/81 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/81

---

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability, Due Diligence and amending Directive (EU) 2019/1937

(COM(2022) 71 final)

(2022/C 443/11)

| Rapporteur: | Antje GERSTEIN |
| --- | --- |

Rapporteur:

Antje GERSTEIN

| Referral | European Parliament, 4.4.2022
  Council of the European Union, 5.4.2022 |
| --- | --- |
| Legal basis | Article 50(1) and (2)(g) and Article 114 of the Treaty on the Functioning of the European Union |
| Section responsible | Single Market, Production and Consumption |
| Adopted in section | 27.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 179/6/14 |

Referral

European Parliament, 4.4.2022

Council of the European Union, 5.4.2022

Legal basis

Article 50(1) and (2)(g) and Article 114 of the Treaty on the Functioning of the European Union

Section responsible

Single Market, Production and Consumption

Adopted in section

27.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

179/6/14

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) welcomes the proposal as an important step in setting up a coherent legislative EU framework on sustainable corporate governance and due diligence which promotes the respect of human rights as a duty for businesses and directors. The goal should be to achieve legal certainty for companies, employees and all of their other stakeholders. |
| --- | --- |

1.1.

| 1.2. | Therefore, the EESC calls on co-legislators to keep the idea of a level playing field in mind and envisage at least key provisions being fully harmonised to avoid distortive discrepancies emerging between Member States' transposition laws. |
| --- | --- |

1.2.

| 1.3. | The EESC underlines the great importance of the UN Guiding Principles on Business and Human Rights (UNGPs). It is the benchmark that clearly outlines the duties and responsibilities of all actors (states, business, civil society, trade unions and workers' representatives) with its three-pillar model of ‘protect, respect and remedy’ to improve the human rights situation along the supply and value chains worldwide. States' international human rights law obligations require that they respect, protect and fulfil the human rights of individuals within their territory and/or jurisdiction. |
| --- | --- |

1.3.

| 1.4. | Systemic and sustainable change on the ground can only be achieved through supporting countries in enabling them to better fulfil their duty to protect human rights. Companies have a clear responsibility to respect human rights, but they cannot replace the critical role and proper functioning of the State. In this context, the EESC welcomes the Commission's announced legislative initiative which will specifically address forced labour. |
| --- | --- |

1.4.

| 1.5. | The EESC calls for the directive to clearly differentiate between adverse impacts that are either caused or influenced by an enterprise and impacts that are not caused or influenced by an enterprise, but directly linked to its operations, products or services through a business relationship. It needs to recognise that due diligence requires a risk-based approach and can involve prioritisation based on the risk-assessment. |
| --- | --- |

1.5.

| 1.6. | The EESC would like to point out that, policymakers need to keep the challenging MSMEs' position in mind and ensure that support tools are ready at the European and national levels once the due diligence legislation enters into force. |
| --- | --- |

1.6.

| 1.7. | Exercising corporate due diligence is an ongoing process, in which the involvement of trade unions and workers' representatives is a success factor. The EESC calls for considering the further development of the EU framework on sustainable CG. In this context, the existing involvement of organised and elected workers' representatives, for example based on the work of European Works Councils (EWCs) or on IFAs (International Framework Agreements) and in company boardrooms, where applicable, offers guidance and support. |
| --- | --- |

1.7.

| 1.8. | The EESC is concerned that the Commission proposal contains numerous unclear legal concepts that are open to interpretation, and thus considers it necessary to better define terms like ‘established business relationship’, ‘downstream value chain’ and ‘appropriate measures’ as they define/influence/determine not only the scope of the directive, but also the related due diligence requirements, sanctions and liabilities. |
| --- | --- |

1.8.

| 1.9. | The EESC calls for the proposal to be more clear regarding groups and due diligence obligations. Instead of referring to ‘company’ (Article 3(a)) the EESC considers a reference to a ‘company group’ more appropriate and more coherent when it comes to disclosure mechanisms, reporting procedures, handling of reports/complaints and educational efforts within a company. |
| --- | --- |

1.9.

2.   Context of the Commission proposal

| 2.1. | Human rights are a key concern for the European Union, its Member States, European businesses, workers and civil society. The Union's transition to a climate-neutral and green economy and its ambitious plan to deliver on the UN Sustainable Development Goals (1) are drivers for the EU's deep engagement in the business and human rights agenda. Fully endorsing the existing international standards and their broad achievements, namely the United Nations Guiding Principles on Business and Human Rights (UNGPs) (2) and the OECD Guidelines for Multinational Enterprises (3), the EESC puts great emphasis on policy coherence with these instruments. The ILO Tripartite Declaration of Principles concerning MNEs and Social Policy also contains a comprehensive set of rights relating to multinational enterprises and labour, referring in particular to the conventions and recommendations on health and safety at work, and should therefore be considered. The EESC also calls for coherence between national policies and European legislation that is currently being drafted and covers similar areas or also includes due diligence rules. Examples of such legislation are: the Corporate Sustainability Reporting Directive (CSRD) (4), the proposal for a Regulation on Deforestation-Free Products (5), the proposal for a new Batteries Regulation (6), the Sustainable Products Initiative (SPI) (7), EU Taxonomy for sustainable investments (8) and the Commission's forthcoming legislative initiative to effectively prohibit the placing on the EU market of products made by forced labour (marketing prohibition) (9). |
| --- | --- |

2.1.

| 2.2. | After some Member States (10) issued national corporate due diligence legislation, a growing desire emerged to create a European level playing field for companies within the Union and avoid fragmentation. Against this background, the European Commission set out this proposal for a horizontal framework to encourage businesses to do their bit to respect human rights and the environment. |
| --- | --- |

2.2.

3.   General comments

| 3.1. | Russia's unprecedented attack on Ukraine is changing geopolitics profoundly and has triggered a fundamental reassessment of economic relations and dependencies in our globalised economy, accelerating Europe's pursuit of more independence in key strategic areas. The consequent wide-ranging readjustment of our supply chains will require a reflection on the relationship between due diligence and the duty to follow politically decided sanctions which limit the scope of business. Therefore, the EESC calls for an approach that is practical, takes new business realities into account and is supportive in providing the urgently needed advice. |
| --- | --- |

3.1.

| 3.2. | In view of the high complexity of today's supply chains, thoroughness must take precedence over speed — the detailed design of this directive requires a sense of proportion. In addition to the full respect of international human rights standards and instruments, the starting point should always be how the well-established elements of the UNGPs and the OECD Guidelines for Multinational Enterprises can be integrated in a practical and effective manner alongside a careful evaluation of the consequences/impact of this directive on different types of European companies (e.g. MSMEs, internationally operating holding structures). |
| --- | --- |

3.2.

| 3.3. | The EESC stresses that the proposed directive is just one element of a much more comprehensive EU agenda to promote environmental sustainability, decent work and human rights worldwide. Systemic and sustainable change on the ground can only be achieved through supporting countries in enabling them to better fulfil their duty to protect human rights. Companies have a clear responsibility to respect human rights, but they cannot replace the critical role and proper functioning of the State, particularly the State duty to protect against human rights abuse within their territory and jurisdiction by taking appropriate steps to prevent, investigate, punish and redress human rights abuses through effective policies, legislation, regulations and adjudication. |
| --- | --- |

3.3.

| 3.4. | Companies are obliged to comply with applicable laws and have a responsibility to respect human rights in line with the UNGPs. They need to implement a functioning due diligence process to ensure respect for human rights along the value chains. States and their governments have a duty to prosecute human rights violations. They are the addressees of human rights and the corresponding international conventions. States rightly have many enforcement powers that companies do not have and should never have. These include inspecting workplaces, issuing fines, seizing assets, revoking business licences, arresting suspects, charging alleged abusers and imprisoning those convicted. |
| --- | --- |

3.4.

| 3.5. | The EESC underlines the continued need to prioritise the green transformation alongside social protection and safeguarding of human, including trade union and workers' rights. Civil society organisations must also play a key role in creating reliable transparency regarding the violation of human and environmental rights, as well as in supervising the requirement under the EU taxonomy for investments to meet the do-no-significant-harm (DNSH) requirement and minimum safeguards (11). |
| --- | --- |

3.5.

| 3.6. | Trade unions and workers' representatives are well aware of where possible misconduct may occur. Hence, the EESC points out the importance of involving workers' representatives and trade unions in the process of setting up (risk mapping) due diligence processes, as well as in monitoring it (implementation) and reporting breaches (alert mechanisms). Only with a fruitful social partnership can the transformation towards a more social and ecological sustainable economy be managed. |
| --- | --- |

3.6.

| 3.7. | The EESC notes that the list of international human rights on which the directive should be based must be clearly defined to give the enterprises the legal certainty they need in international business life. The EESC believes that corporate due diligence should extend to the examination of human rights standards recognised in the UNGPs (12), consisting of the principles relating to the ILO core labour standards (no forced labour, child labour and discrimination, and freedom of association), the Universal Declaration of Human Rights (UDHR) (13) and the International Covenants on Civil and Political Rights (14) and on Economic, Social and Cultural Rights (15). In addition, the EU-Charter of Fundamental Rights of the European Union (16) as well as the Council of Europe European Convention on Human Rights (17) and European Social Charter (18) and the ILO's Tripartite Declaration of Principles concerning MNEs and Social Policy (19), set out rights, values and principles which serve as guiding compass for the EU as a whole. |
| --- | --- |

3.7.

| 3.8. | The EESC is of the opinion that the directive has to be clearly improved with a view to greater harmonisation, legal clarity and certainty. A mandatory due diligence framework would be achieved by applying an agreed standard that is enforced by proportionate, effective and dissuasive sanctions, whereas liability would have to be based on the violation of a clearly defined set of human rights. |
| --- | --- |

3.8.

4.   Specific comments

| 4.1. | The EESC is concerned that the Commission proposal contains numerous unclear legal concepts that are open to interpretation and may be applied differently by national authorities and courts. In particular, the EESC considers it necessary to better define the term ‘established business relationship’, as it defines not only the scope of the directive, but also the due diligence requirements, sanctions and liabilities for damages. The concept of a ‘downstream value chain’ also requires a more robust definition. It is not up to a company to control and take responsibility for their clients` action (20). The ‘appropriate measures’ that companies are expected to have taken in order to be exempt from liability need to be better defined and backed up with examples. Last but not least, the proposed obligations for directors to take into account the contribution of ‘stakeholders’ is unclear. |
| --- | --- |

4.1.

| 4.2. | The value chain, as proposed in the draft Directive, includes not only direct and indirect suppliers, i.e. ‘upstream’ activities, but also the use and, where appropriate, disposal of a product or service, i.e. ‘downstream’ or end-of-life activities. In fact, the tracing of ‘downstream’ activities leads to a variety of very practical problems. In particular, keeping track of a product after it has been placed on the market is likely to be even more difficult than tracking the procurement of raw materials and components. This is particularly the case for recycled products, where traceability might often be impossible. |
| --- | --- |

4.2.

| 4.3. | Businesses should be expected to design their human rights due diligence processes in a way that is risk-based and proportionate to their potential and actual impacts. Therefore, the EESC considers it necessary to shape the scope accordingly, either to direct contractual partners or to indirect partners; in the event of the latter, only if it is reasonable under the circumstances of the case, to expect that adequate action is taken to prevent, mitigate, bring an end to or minimise the extent of the adverse impact, for example in cases of a high degree of vertical integration. This tried and tested method of responsibility can already be found in existing legislation, for example on traceability, as regulated by the EU Basic Regulation (Regulation (EC) No 178/2002 of the European Parliament and of the Council (21)). This essentially requires a company to set up systems and procedures, based on the principle of ‘one step back, one step forward’, to determine who is the direct supplier and the direct purchaser (excluding the final consumer) of its products. The well-established approach is appropriate because each individual party in the value chain can clearly be held responsible for processes that it can actually influence. |
| --- | --- |

4.3.

| 4.4. | A risk-based approach can also include a sectoral method: The EESC welcomes the fact that the proposed directive acknowledges that there are sector specificities in due diligence policies that need to be taken into account. The EESC calls on co-legislators to take into account the important multistakeholder initiatives and standards that have been developed in particularly vulnerable areas (such as cocoa, bananas and palm oil). |
| --- | --- |

4.4.

| 4.5. | The EESC recalls that the UNGP Nos 15 and 22 require remedies in cases where the enterprise itself has caused or contributed to human rights violations. However, the UNGPs do not require a company to provide remedies when the adverse impact is caused by another company in the supply chain. These provisions thereby reflect the basic legal premise that liability should only be imposed where a clear and foreseeable link exists between the victim's harm and the business responsible for the harm. Similarly, the OECD Guidelines for Multinational Enterprises also stress that seeking to prevent adverse impact in supply chains does not shift responsibility from the entity causing an adverse impact on the enterprise with which it has a business relationship. In order to be coherent, the EESC is of the opinion that under the EU directive too, companies should only be held liable under civil law if they themselves have directly caused or contributed to (i.e. caused in part) a violation of human rights. |
| --- | --- |

4.5.

| 4.6. | The EESC agrees with the Commission's approach that national authorities must be equipped with sanctions that are ‘effective, proportionate and dissuasive’. In cases of negligence and intent, the authority should be able to set appropriate fines. However, the scope of sanctions should be defined at European level. |
| --- | --- |

4.6.

| 4.7. | The EESC calls for the proposal to be more clear regarding groups and due diligence obligations. The current text, in particular the definition of ‘company’ (Article 3(a)) seems to indicate that the requirements of the directive apply to individual companies rather than company groups. This would imply that a company from a Member State with subsidiaries within the scope operating in other Member States has to follow the decisions of several different supervisory authorities, which is practically difficult and more cumbersome. A group solution presents multiple advantages such as more coherence when it comes to disclosure mechanisms, reporting procedures, handling of reports/complaints and training and awareness within a company. This is acknowledged in the Corporate Sustainability Reporting Directive (CSRD) proposal which provides for an exemption for subsidiaries if there is reporting at group level. A group solution is better placed to deal with differences in national legislation which are likely to occur during the transposition of this directive across all 27 Member States and can serve to align or even go beyond the highest denominator. For these reasons the EESC considers that a group solution for due diligence should be favoured. |
| --- | --- |

4.7.

| 4.8. | Despite the primary due diligence obligation of large companies, MSMEs will be indirectly affected as companies which fall within the scope of the directive will increase their demands on suppliers with regard to their implementation of the UNGPs, their non-financial reporting and their own supply chain management. The considerable effort is easier for large companies than for smaller companies, that have not yet been included in the scope of this kind of legislation. The latter have particularly less leverage to address human rights risks in their supply chain, and much fewer resources for conducting comprehensive risks assessments. The EESC proposes that the European Commission establishes a Help Desk that provides easily accessible information on human rights risks in countries and regions. It should be possible for stakeholders to engage with such a helpdesk and for partner countries or regions to collaborate with it. This helpdesk should also support the human rights capacity building of suppliers in third countries and the strengthening of their environmental performance. The EESC additionally calls on Member States to provide assistance, particularly to MSMEs, in a manner that is practical, specific and efficient, framed in a structural cooperation with the representative organisations concerned. The EESC considers it of utmost importance that the scope of companies addressed with this directive is in accordance with other relevant EU-legislation mentioned under paragraph 2.1. |
| --- | --- |

4.8.

| 4.9. | The EESC notes that the Commission explicitly includes the financial sector in its proposal. Sustainable finance includes respecting human rights and is an important element of transforming the economy to make it more green and social. However, the proposal remains vague with regard to verification procedures for lending or financing, and it is to be feared that the provisions of the directive, which– does not explicitly include MSMEs, will indirectly be extended de facto. MSMEs will be indirectly affected as suppliers in the supply chain and will thus face massive challenges. |
| --- | --- |

4.9.

| 4.10. | The EESC recognises that Sustainable Corporate Governance is linked to clear, credible commitment of directors, including to setting up a robust and functioning due diligence process in a company. It serves to the accountability of companies for their impacts of their operations. The EESC refers to the Shareholder Rights Directive which clarifies how the performance of companies and directors is linked to ESG matters (22). The EESC notes that directors duties have to include reliable due diligence obligations based on a system of sanctions for cases where companies fail to respect them. Achieving ecological, social and economic sustainability should be the goal for all stakeholders of a company, not only shareholders. In a number of EU member states a mandatory say by representatives of workers in boardrooms applies. Such national legislations and rules should be respected. |
| --- | --- |

4.10.

| 4.11. | The EESC has taken notice of the Commission's own Regulatory Scrutiny Board which questioned elements going beyond due diligence by stating, inter alia, that it ‘is not clear [...] why it is necessary to regulate directors' duties on top of due diligence requirements’ and that there is a need to ‘better explain and assess the value-added of regulating directors' duties, considering that the due diligence option already requires risk management and engagement with stakeholders' interests’ (23). Against this background, the EESC sees a need for further development and better alignment of director's duties with the Green Deal objectives. |
| --- | --- |

4.11.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  A/RES/70/1.

1

(2)  The UNGPs were endorsed by the UN Human Rights Council in its resolution 17/4 of 16 June 2011 (A/HRC/RES/17/4).

2

(3)  OECD (2011), OECD Guidelines for Multinational Enterprises, OECD Publishing, http://dx.doi.org/10.1787/9789264115415-en

3

(4)  COM(2021) 189 final; OJ C 517, 22.12.2021, p. 51.

4

(5)  COM(2021) 706 final.

5

(6)  COM(2020) 798 final.

6

(7)  COM(2022) 142 final.

7

(8)  OJ L 198, 22.6.2020, p. 13.

8

(9)  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/13480-Effectively-banning-products-produced-extracted-or-harvested-with-forced-labour_en

9

(10)  France (Loi relative au devoir de vigilance, 2017), Germany (Sorgfaltspflichtengesetz, 2021), Netherlands (Wet zorgplicht kinderarbeid 2019).

10

Loi relative au devoir de vigilance, 2017)

Sorgfaltspflichtengesetz, 2021)

Wet zorgplicht kinderarbeid 2019)

(11)  OJ C 152, 6.4.2022, p. 105.

11

(12)  UN Guiding Principle 12 (Commentary, paragraph 2).

12

(13)  A/RES/217(III).

13

(14)  A/RES/2200A (XXI).

14

(15)  A/RES/2200A(XXI).

15

(16)  OJ C 326, 26.10.2012, p. 391.

16

(17)  https://www.echr.coe.int/documents/convention_eng.pdf

17

(18)  https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=090000168048b059

18

(19)  OJ C 429, 11.12.2020, p. 136.

19

(20)  Relevant rules can be found in EU law on downstream operations, i.e. in terms of export control of sensitive materials (dual-use goods and military goods).

20

(21)  Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety (OJ L 31, 1.2.2002, p. 1).

21

(22)  https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017L0828&from=EN; Article 9a.

22

(23)  https://ec.europa.eu/transparency/documents-register/detail?ref=SEC(2022)95&lang=en

23

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/87 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/87

---

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 909/2014 as regards settlement discipline, cross-border provision of services, supervisory cooperation, provision of banking-type ancillary services and requirements for third-country central securities depositories

(COM(2022) 120 final — 2022/0074 (COD))

(2022/C 443/12)

| Rapporteur: | Kęstutis KUPŠYS |
| --- | --- |
| Co-rapporteur: | Christophe LEFÈVRE |

Rapporteur:

Kęstutis KUPŠYS

Co-rapporteur:

Christophe LEFÈVRE

| Referrals | Council of the European Union, 12.4.2022
  European Parliament, 4.4.2022 |
| --- | --- |
| 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 | 1.7.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 185/0/1// |

Referrals

Council of the European Union, 12.4.2022

European Parliament, 4.4.2022

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

1.7.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

185/0/1//

1.   Conclusions and recommendations

| 1.1. | The Committee finds the solutions proposed by the Commission to the five main issues identified during the Central Securities Depositories Regulation (CSDR) review process to be, in general, sufficient and effective. With more efficient EU settlement procedures, the capital markets will become more attractive to both issuers and investors, and we will be one step closer to achieving the Capital Markets Union (CMU). |
| --- | --- |

1.1.

| 1.2. | The European Economic and Social Committee (EESC) welcomes the Commission's proportionate initiatives to replace existing passporting requirements with a notification, as well as a proposal for better supervisory cooperation by establishing appropriate, but not duplicate, supervisory colleges. |
| --- | --- |

1.2.

| 1.3. | Concerning the provision of banking-type ancillary services, the Committee sees further opportunities in solutions based on settlement in central bank money. To further decrease a range of different risks, greater use should be made of the existing TARGET2-Securities (T2S) multicurrency central bank money securities settlement platform. |
| --- | --- |

1.3.

| 1.4. | The EESC sees to the benefit of supplementing the existing Commission proposal with the provisions on recognition of T2S's central role for the European securities settlement infrastructure, while also solving, albeit partially, the issue of the underdevelopment of banking-type ancillary services among Central Securities Depositories (CSDs). |
| --- | --- |

1.4.

| 1.5. | The EESC notes that the most controversial part of the proposal — the ‘two-step’ approach to the potential imposition of mandatory buy-ins (MBIs) — remains a well-balanced option. MBIs should not be considered until underlying reasons for settlement failures are examined in detail and clarity is obtained on whether other measures to reduce settlement failures will achieve satisfactory results. |
| --- | --- |

1.5.

| 1.6. | The Committee is fully aware that the Distributed Ledger Technology (DLT) Pilot Regime forms an important part of the legislative context of the CSDR review, while warning that the creation of a ‘regulatory sandbox’ must not set a precedent for lowering existing standards of market conduct and investor protection. CSDs should play a key role in managing the DLT networks, defined in a way that reduces counterparty risk. Furthermore, the EESC advocates for stronger supervisory regulation for enforcing sanctions, suggesting that the CSDR should require CSDs, their issuers, and their participants to set up a viable, permanent mechanism to exchange and share data relevant to the application of common European sanctions. |
| --- | --- |

1.6.

2.   Background

| 2.1. | CSDs are entities that hold and administer securities and enable securities transactions to be processed by book entry (1). CSDs operate the infrastructure which ensures that securities transactions can be completed. This main service of CSDs is usually referred to as ‘settlement’. In the EU, existing CSDs (2) settle transactions worth well over EUR 1 000 trillion per year (more than 70 times the gross domestic product of the EU (3) or 17 times more than the outstanding value of all securities held on CSDs accounts (4)). CSDs also provide other core services, such as (i) notary service, i.e. keeping track of newly issued securities, and (ii) central maintenance service, i.e. recording each change in the holding of those securities. For CSDs operating within national borders, well-tested and efficient procedures had existed for decades, but as markets became more interconnected and due to the increase in cross-border transactions in Europe, the need for harmonisation of cross-border settlement and other services became clear. |
| --- | --- |

2.1.

| 2.2. | The 2014 Regulation, introduced after the 2008 financial crisis, entered into force on 17 September 2014, with a phased implementation (5). This brought substantial improvements in the post-trading environment, including setting a standardised settlement period, improving cross-border settlement discipline, introducing consistent rules for CSDs in the EU (e.g. licencing, authorisation, supervision), and ensuring freedom for an issuer of securities to choose its CSD. |
| --- | --- |

2.2.

| 2.3. | One of the main advances made in the Regulation concerned the settlement discipline — measures to prevent settlement failures and to address such failures, should they occur. However, as further assessment showed, these measures were not sufficient, as the EU settlement failure indicators remained considerably worse than those in other financial centres, even taking into account the highly fragmented nature of the EU capital markets compared with extremely homogenous markets elsewhere (6). |
| --- | --- |

2.3.

| 2.4. | Another major improvement aimed at facilitating cross-border capital flows — the freedom to provide services in another Member State (or ‘passporting’, similar to the well-functioning pan-EU framework for banking) — was also enshrined in the Regulation, providing impetus for CSDs to expand their activities across national borders. The provision of banking-type ancillary services (services that support securities settlement) by CSDs, while strictly complying with the specific prudential requirements for the credit risks related to those services, was also defined in the Regulation. However, the legal framework did not lead to the desired level of integration of the EU settlement services system, with CSDs reluctant to take on ancillary services or engage in a costly passporting procedure. |
| --- | --- |

2.4.

| 2.5. | In March 2022, the Commission, acting in line with Article 75 of the Regulation that mandated a review, introduced a proposal reviewing the 2014 Regulation (hereafter referred to as the CSDR Review, or Review). This deals with the following five main issues:






  (i) | the burdensome requirements of passporting; |
| --- | --- | --- |

2.5.

(i)

the burdensome requirements of passporting;

| (ii) | weak supervisory cooperation; |
| --- | --- |

(ii)

weak supervisory cooperation;

| (iii) | disproportionate requirements for providing banking-type ancillary services; |
| --- | --- |

(iii)

disproportionate requirements for providing banking-type ancillary services;

| (iv) | shortcomings leading to failed settlements; |
| --- | --- |

(iv)

shortcomings leading to failed settlements;

| (v) | insufficient information on activities provided by third-country CSDs in the EU. |
| --- | --- |

(v)

insufficient information on activities provided by third-country CSDs in the EU.

| 2.6. | Almost simultaneously with the entry into force of the CSDR, but as a separate development, on 22 June 2015, T2S was launched as the first multicurrency central bank money securities settlement platform (7). For clients (usually banks) of CSDs that are connected to the T2S platform, this means the ability to choose between Euro settlement in commercial bank money and/or in central bank money. By settling securities in central bank money via T2S, CSDs can offer their clients access to the single liquidity pool of the Eurosystem's TARGET Services for collateral, payments and securities settlement. Hence, the liquidity that is needed to settle transactions across Europe has been greatly reduced. However, this has had no impact on costs for a variety of reasons, but primarily because there is still market fragmentation across currency lines: in 2019, T2S fees went from 15 eurocents per ‘Delivery-versus-Payment’ transaction to 23,5 eurocents (8). T2S remains outside the scope of the Commission's March 2022 CSDR Review proposal. |
| --- | --- |

2.6.

3.   General comments

| 3.1. | As stated in the EESC opinion ‘A Capital Markets Union for people and businesses (new action plan)’ (9), the Committee welcomes the Commission's initiatives to achieve the ambitious vision of the CMU, which is to enable capital to flow across the EU to the benefit of consumers, investors and companies. Of the 16 measures outlined in the CMU Action Plan, one of the most important is the improvement of cross-border settlement services (Action 13), as the shortcomings of the existing regulation are evident and swift legislative action is believed to push the CMU forward. |
| --- | --- |

3.1.

| 3.2. | As to the five main issues identified by the Commission, leading to the Review, the Committee finds the proposed way forward to be sufficient and effective. |
| --- | --- |

3.2.

| 3.3. | The proposal to replace existing passporting requirements, which are considered either unclear or burdensome, with a notification (meaning that Member States cannot refuse a CSD's application), is a major step towards a more harmonious and interconnected settlement system that will lead to a reduction in costs for CSDs willing to provide cross-border services. It remains to be seen, however, how these supportive measures will translate into cost savings for issuers and investors. Particular attention should be given to ensuring that supervisory authorities in host countries retain oversight of the market. |
| --- | --- |

3.3.

| 3.4. | The need to reduce costs while improving supervisory cooperation led to the Commission proposal to establish supervisory colleges, which the EESC strongly supports as an appropriate, well-balanced measure. The Committee welcomes the introduction of only one college for the CSD rather than two separate colleges, to ensure the CSD is not subject to the ‘passporting college’ and the ‘group-level college’ at the same time. This should save costs and help to achieve considerable supervisory synergies. |
| --- | --- |

3.4.

| 3.5. | One of the main improvements to the framework of provision of banking-type ancillary services relates to the amendment of Article 54(4) of the Regulation, which the Committee strongly supports, as it allows CSDs to seek the provision of the aforementioned services, not only from designated credit institutions, but also from other CSDs. |
| --- | --- |

3.5.

| 3.5.1. | However, the EESC recognises that this move could potentially increase financial stability risks. While the EESC sees merit in the objective of improving the provision of cross-border services as a result of lower barriers for the provision of banking-type ancillary services, and shares that aspiration, the Committee sees opportunities in solutions based on settlement in central bank money, which is inherently safer. Admittedly, this would need to be addressed largely outside of the CSDR — e.g. the expansion of T2S, the development of wholesale central bank digital currencies, the removal of legal barriers, etc. |
| --- | --- |

3.5.1.

| 3.5.2. | It is, however, unclear whether the path chosen by the Commission to give a mandate to the European Banking Authority (EBA) to develop draft regulatory technical standards to define a threshold below which those banking-type ancillary services can be provided by credit institutions, is the appropriate one. On the positive side, the calibration of a threshold could be best performed by this Authority, and the Commission has greater room for manoeuvre if needed. Notwithstanding the above, the EESC has on various occasions (10) raised the issue of co-legislators being deprived of the power to decide on significant matters in the debated legislative act. The EESC therefore calls for important economic matters to be dealt with in an ordinary legislative procedure (11). |
| --- | --- |

3.5.2.

| 3.6. | Steps to improve settlement discipline are extremely welcome. The Committee also supports the provision of clarifications and exceptions in multiple instances in the Review, related to the issue of settlement discipline. Of particular importance is the Commission's decision to avoid introducing MBIs immediately; these buy-ins could become applicable if and when the penalties regime alone does not improve settlement failures in the European Union. The introduction of pass-on mechanisms, which would prevent a cascade of mandatory buy-ins, seems to mitigate the underlying weaknesses (or the fear of sub-optimal application) of the proposed MBI regime. The Committee considers a ‘two-step’ approach to MBIs a prudent one and believes that this way the European capital markets will become more attractive to both issuers and investors in the long run. |
| --- | --- |

3.6.

| 3.7. | Provisions related to third-country CSDs are particularly important in the context of the EU's quest for open strategic autonomy. The EESC welcomes the requirement introduced in the amended Article 25 of the CSDR, which states that CSDs intending to provide settlement services under the law of a Member State should notify the European Securities and Markets Authority (ESMA). The Committee also supports the measures introduced by the Review which regulate other aspects of third-country CSDs' operations in the EU, thus leading to a level playing field and an environment of better competition. |
| --- | --- |

3.7.

4.   Specific comments

Role of T2S

| 4.1. | Given the considerable importance of T2S, the EESC is of the view that a coherent supervisory and oversight framework should be arranged in relation to this platform's role in the overall settlement system. Current voluntary agreements between the European Central Bank (ECB), the ESMA, national competent authorities (NCAs) of the CSDs participating in the T2S and the central banks overseeing the CSDs should be upgraded to ensure that the new legislative framework provides clear roles for all participating authorities: NCAs, the central banks and the ECB as lead overseers and ESMA as the supervisor. This enhanced framework could take the form of a college of supervisors. |
| --- | --- |

4.1.

| 4.2. | Therefore, the EESC calls on the co-legislators to include the T2S systemic settlement platform in the scope of the CSDR and create the conditions for the widespread adoption of settlement via the T2S tool in the EU (12). This is necessary to make this multicurrency system finally work to its full capacity, despite the understandable reservations of the central banks and CSDs in non-Euro countries. T2S's role in harmonising data and information flows — a crucial aspect for the effective provision of services by CSDs — should also be recognised and included in the legislative proposal. |
| --- | --- |

4.2.

| 4.3. | Currently, T2S is monitored on the basis of a number of Principles for Financial Market Infrastructure included in the ECB oversight Framework — a ‘light’ approach that recognises the systemic importance of this platform for the European Economic Area. The Committee sees no regulatory conflicts affecting undisputed ECB independence because T2S can be considered an infrastructure tool for financial market participants which, for a number of reasons, is better developed under the ECB's ‘roof’ and not elsewhere. Moreover, the ECB's involvement in securities settlement via the platform is a step away from classic central bank functions, clearly leading to the need to include T2S in the CSDR to make a regulatory framework both coherent and effective. |
| --- | --- |

4.3.

Settlement discipline monitoring

| 4.4. | The EESC notes that the most controversial part of the proposal — possible enforcement of mandatory buy-ins, carried out in a ‘two-step’ approach — remains a well-balanced option to consider until clarity is obtained on whether other measures to reduce settlement failures will achieve satisfactory results. |
| --- | --- |

4.4.

| 4.5. | The Committee believes, however, that addressing the issue sooner rather than later would lead to a better and deeper understanding of the reasons for settlement failure. The EESC therefore calls for the introduction of a set due date for the assessment of progress on settlement failure indicators and of the underlying reasons for failure, in the form of a public report drafted by the competent authority, ideally within a 12-monts period after the entry into force of the penalties regime. |
| --- | --- |

4.5.

| 4.6. | While some advocate the outright removal of the MBI obligation, the EESC is more cautious, in the light of unacceptably high (also in comparison to other major financial jurisdictions) settlement failure occurrences. The removal of a significant policy option from the Commission's toolbox would not make things better in this regard. The adoption of an implementing act appears to be a suitable option in this particular case. |
| --- | --- |

4.6.

| 4.7. | The Committee acknowledges that there is a highly effective way of achieving swift decline in settlement failure figures — an increase in existing penalties until the right equilibrium is reached. Special attention should be paid to settlement failures involving ‘short selling’ practices. MBIs could become a last-resort option, ready to be implemented extremely cautiously after appropriate consultations with market participants if everything else fails. |
| --- | --- |

4.7.

| 4.8. | Before taking any action, particular attention should be given to measures aimed at shortening chains of intermediaries. Reasons for widespread use of the ‘pre-matching’ technique require thorough examination. As many (technical) failures occur due to delays in long settlement chains, MBIs cannot be imposed without taking this factor into account and before implementing appropriate measures to encourage shortening of settlement ‘command chains’. |
| --- | --- |

4.8.

Settlement in ‘digital assets’ within a CSD's settlement system

| 4.9. | The rise in ‘digital assets’ has highlighted the functional interconnectedness of trading and settlement services in a given asset. The adoption of DLT, in the financial sector and elsewhere, offers huge potential. If trading and settlement in ‘traditional’ assets is to remain competitive with trading and settlement in ‘digital assets’, CSDs should be allowed to easily establish their own trading facilities for the instruments they settle the trades in. The Committee is fully aware that the DLT Pilot Regime forms an important part of the legislative context of the CSDR review. The Committee supports any change to the CSDR aimed at realising the full potential of DLT being postponed until the Commission proposal for the aforementioned pilot regime is adopted. However, as an interim measure, the Committee suggests the possibility of establishing a multilateral trading facility (MTF) for instruments that are settled within a CSD's settlement system. Maintaining an MTF should be considered an ancillary service within the meaning of Section B, part 1 of the CSDR's Annex. |
| --- | --- |

4.9.

| 4.10. | The Committee warns that the creation of a ‘regulatory sandbox’ must not set a precedent for lowering existing standards of market conduct and investor protection. Moving settlement processes entirely to DLT-enabled networks improves efficiency because it decreases the associated transaction costs and reduces involved risk when shortening the over-extended chain of intermediaries. Nevertheless, counterparty risk does not become obsolete just by leveraging DLT networks. It is crucial to ensure that the requirements for participation in these networks are defined in a way that reduces counterparty risk. CSDs should play a key role in managing the infrastructure. |
| --- | --- |

4.10.

Enforcement of sanctions

| 4.11. | The CSDR Review comes at an extremely challenging time — in the midst of Russia's war against Ukraine. European financial market infrastructure was designed to be able to overcome shocks such as these; furthermore, the (systemically) important part of it — the network of CSDs — is now instrumental in ensuring that Western sanctions on Russia are properly implemented at the operational level. The EESC calls on the Commission to provide the necessary guidance in cases where actions related to sanctions enter ‘uncharted territories’, leading to uncertainty among market actors. Certain provisions of such ‘quick fix’ guidance may also be considered for use in further improving the Review proposal, making it more fit for future challenges. |
| --- | --- |

4.11.

| 4.12. | Against the backdrop of international developments, the EESC suggests that the CSDR should require CSDs, their issuers, and their participants to set up a viable, permanent mechanism to exchange and share data relevant to the application of common European sanctions. The situation should not arise in which an action is omitted only because the different participants are not able to reach a conclusion that should otherwise be straightforward or at least achievable (i.e. if considered jointly). Whether the CSDR should be seen as an appropriate legal instrument for that is a valid question; nevertheless, the Committee advocates for stronger supervisory regulation for enforcing sanctions. |
| --- | --- |

4.12.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Securities can be held in physical or dematerialised form.

1

(2)  There are 26 CSDs, plus two International CSDs. Source: ESMA Register.

2

Source:

(3)  Based on 2021 Eurostat GDP data, i.e. EUR 14,4 trillion.

3

(4)  At the end of 2020, there were over EUR 56 trillion worth of securities held in EU Securities Settlement Systems. Data generated through the ECB's Securities Trading, Clearing and Settlement Statistics Database. Accessed on 4 May 2022.

4

(5)  OJ C 299, 4.10.2012, p.76.

5

(6)  Settlement fails in equities, calculated as a percentage of the total number of transactions, fell to 3 % before the COVID-19 market turmoil, but have since increased again to 4,5 %. As a percentage of value, the ratio increased to 9 % in January 2021 from 6 % before March 2020. Source: Impact Assessment Report. However, market experience shows that majority of ‘fails’ occur because the settlement instruction reaches the settlement system through the chain of intermediaries after the day designated by the end parties as ‘intended settlement day’.

6

Source:

(7)  TARGET2-Securities system. Currently 19 CSDs from 20 European countries are connected to T2S. The Danish krone has been available for settlement in T2S since October 2018.

7

(8)  Pricing of TARGET2-Securities system.

8

(9)  OJ C 155, 30.4.2021, p. 20.

9

(10)  Most recently, in EESC opinion on the Solvency II review, adopted in February 2022, see point 2.3 (OJ C 275, 18.7.2022, p. 45).

10

(11)  EESC opinion on the Solvency II review (OJ C 275, 18.7.2022, p. 45).

11

(12)  Except for the Danish krone, no other non-Euro currency settlement can be carried out via the T2S system, as relevant actors outside of the Eurozone settlement are hesitant to join, and are adopting a ‘wait and see’ approach.

12

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/93 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/93

---

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council on combating violence against women and domestic violence

(COM(2022) 105 final)

(2022/C 443/13)

| Rapporteur: | José Antonio MORENO DÍAZ |
| --- | --- |
| Co-rapporteur: | Ody NEISINGH |

Rapporteur:

José Antonio MORENO DÍAZ

Co-rapporteur:

Ody NEISINGH

| Referral | European Commission, 2.5.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Employment, Social Affairs and Citizenship |
| Adopted in section | 22.6.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 200/7/7 |

Referral

European Commission, 2.5.2022

Legal basis

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

Section responsible

Section for Employment, Social Affairs and Citizenship

Adopted in section

22.6.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

200/7/7

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) applauds the regulatory innovation of a Directive on combating violence against women from an intersectional perspective. Such a Directive is much sought-after by society. |
| --- | --- |

1.1.

| 1.2. | In addition, given the range and extent of the different forms of violence suffered by women, the policies that aim to counter them must not be neutral but must be drawn up based on a clear and unequivocal gender perspective, presented in such a way as to make it easier to understand their importance and effectiveness. |
| --- | --- |

1.2.

| 1.3. | The EESC wishes to add that it considers it essential and urgent for the ILO's Violence and Harassment Convention (No 190) and the Istanbul Convention to be ratified by all Member States that have not yet done so, and by the EU itself. |
| --- | --- |

1.3.

| 1.4. | The EESC believes the Directive must cover all forms of violence against women, including amongst others: institutional violence, sexual and reproductive exploitation, harassment at work, gender-based violence occurring in the family, chemical submission, street harassment, gender and/or sex-based sexual harassment and forced sterilisation of women with disabilities. |
| --- | --- |

1.4.

| 1.5. | The EESC considers that violence against women should be included in the list of EU crimes in Article 83(1) of the TFEU. |
| --- | --- |

1.5.

| 1.6. | The EESC is of the view that specific measures should be included within the framework of social dialogue and collective negotiation to ensure that victims of violence against women can retain their jobs and to ensure the integration of unemployed victims into the labour market. |
| --- | --- |

1.6.

| 1.7. | Based on the line taken by the EP and the CEDAW, the EESC believes that the term ‘women in prostitution’ should replace ‘sex workers’. |
| --- | --- |

1.7.

| 1.8. | The Committee considers that aspects such as previous threats made to the victim or their loved ones or family, and profit, should be considered aggravating circumstances. |
| --- | --- |

1.8.

| 1.9. | Special attention should also be given to women and girls from ethnic and/or cultural minorities — such as the Roma — to migrant women, especially if their administrative situation is irregular, and to refugee women and girls fleeing war. |
| --- | --- |

1.9.

| 1.10. | The EESC calls for specific attention to also be given to women with disabilities, as they are more exposed to gender-based violence because of their disability. |
| --- | --- |

1.10.

| 1.11. | The EESC believes that lack of consent and public exposure should, in and of themselves, constitute cyber harassment. |
| --- | --- |

1.11.

| 1.12. | The EESC believes that victims must be referred to support services not just in a timely and coordinated manner but also as a matter of priority and urgency. |
| --- | --- |

1.12.

| 1.13. | The EESC calls on the European Commission to include healthcare services, including sexual and reproductive health services, in the list of essential support services for victims and to press for all EU Member States to urgently remove any barriers that make it difficult to access emergency contraception and induced abortion services following a rape. |
| --- | --- |

1.13.

| 1.14. | The Committee firmly believes that emergency restraining and protection orders aimed at safeguarding the physical and mental well-being of victims must incorporate measures that prevent the aggressor from harassing or physically approaching the victim. |
| --- | --- |

1.14.

| 1.15. | The EESC believes that all mechanisms and measures for supporting victims of sexual violence should be expressly easy to access and free of charge. |
| --- | --- |

1.15.

| 1.16. | The Committee draws attention to the limitation of exclusively external counselling and care services offered in cases of sexual harassment at work, and the fact that there is no reference to the importance of social dialogue and collective negotiation as well as the necessary participation and negotiation with social partners. |
| --- | --- |

1.16.

| 1.17. | Given the part that education plays in shaping gender roles and stereotypes, its preventive role should extend across all education stages — especially in the form of comprehensive sexuality education — and the education community, civil society organisations (especially feminist associations), social partners and impacted communities should be an explicit part of institutional cooperation. |
| --- | --- |

1.17.

| 1.18. | The Committee believes that the welfare of the child should take precedence over rights of access, where there is reasonable doubt concerning safe contact from both a physical and emotional point of view. |
| --- | --- |

1.18.

| 1.19. | The Committee is pleased that the Directive specifies female genital mutilation as an offence. |
| --- | --- |

1.19.

| 1.20. | The EESC believes that broader violations of health and sexual and reproductive rights such as gynaecological and obstetric violence, forced pregnancy and denial of abortion care, should also be combated as forms of violence against women. Furthermore, the EESC notes with concern that the definition of violence against women does not include existing restrictions on induced abortion undergone freely and safely or the harassment suffered — mainly in the vicinity of the clinics where abortions take place — by women who freely choose this option. |
| --- | --- |

1.20.

| 1.21. | The Committee also notes with concern that the enjoyment of a free, equal and full life for children who have lost their mother because she was a victim of violence against women, is not provided for. |
| --- | --- |

1.21.

| 1.22. | The EESC is deeply concerned that the extreme right has made it its goal to oppose proposals of gender equality. It is especially concerned about the systematic denial of structural violence against women, i.e. violence suffered simply for being a woman. Not only does this denial undermine equal coexistence between men and women, it also constitutes an attack on the values and principles enshrined in Article 2 of the TEU. |
| --- | --- |

1.22.

| 1.23. | The Committee recommends that the Directive provide for a financial memorandum to ensure sufficient public funding for the measures adopted to be effectively implemented. |
| --- | --- |

1.23.

2.   General comments

| 2.1. | Violence against women is the ultimate expression of discrimination against women. It represents a control mechanism that stems from inequality between women and men while at the same time reinforcing and perpetuating this inequality. |
| --- | --- |

2.1.

| 2.2. | The EESC is deeply concerned that the extreme right has made it its goal to oppose proposals of gender equality. It is especially concerned about the systematic denial of structural violence against women, i.e. violence suffered simply for being a woman. Not only does this denial undermine equal coexistence between men and women, it also constitutes an attack on the values and principles enshrined in Article 2 of the TEU. |
| --- | --- |

2.2.

| 2.3. | One of the key objectives of the EU Gender Equality Strategy 2020-2025 is to put an end to gender-based violence. Its other objectives include combating gender stereotypes, eliminating the gender pay gap in employment and care, achieving equal participation across different sectors of the economy and ensuring gender balance in decision-making and politics. |
| --- | --- |

2.3.

| 2.4. | Violence against women and girls is one of the most relentless forms of gender discrimination and constitutes a human rights violation. Half of women in the EU (53 %) avoid certain areas or situations for fear of falling victim to physical or sexual aggression (1) while a third say they have been victims of physical or sexual violence (33 %). |
| --- | --- |

2.4.

| 2.5. | Given the range and extent of the different forms of violence suffered by women, the policies that aim to counter them must not be neutral but must have a clear and unequivocal gender perspective, presented in such a way as to make it easier to understand their importance and effectiveness. |
| --- | --- |

2.5.

| 2.6. | Every day women risk experiencing violence at work, especially those working in the transport sector (63 % of them say they have been subjected to at least one act of violence recently) (2) and in services and sales (3). |
| --- | --- |

2.6.

| 2.7. | There has also been a rise in domestic violence due to the lockdown measures introduced to ease the health crisis caused by the COVID-19 pandemic (4). |
| --- | --- |

2.7.

| 2.8. | The EESC welcomes the fact that the proposal for a Directive aims to prevent and combat violence against women and domestic violence to ensure a high level of security and the full enjoyment of fundamental rights, including the right to equal treatment and non-discrimination. While we believe that combating violence against women must be a matter of criminal law, it must also be accompanied by a holistic and comprehensive approach to prevent, combat and eradicate male violence against women. |
| --- | --- |

2.8.

3.   Specific comments

| 3.1. | The EESC applauds the regulatory innovation of a Directive on combating violence against women from an intersectional perspective. However, it points to the need to establish protocols and awareness and qualification campaigns for professionals, to prevent institutional violence such as victim-blaming based on external factors that are not linked to the act of violence. These factors include the victim's appearance, attitude, status, origin or any other attribute or situation. |
| --- | --- |

3.1.

| 3.2. | In this respect, while the EESC welcomes the clarification the Directive provides in terms of concepts and criminal proceedings by including definitions of some forms of violence against women, it is essential that the proposal covers all forms of gender-based violence against women and includes a general definition of gender-based violence such as the one provided in Articles 1 and 2 of the 1993 UN Declaration on the Elimination of Violence against Women and in Article 3 of the Istanbul Convention. |
| --- | --- |

3.2.

| 3.3. | The EESC considers that violence against women should have been included in the list of EU crimes in Article 83(1) of the TFEU. |
| --- | --- |

3.3.

| 3.4. | The EESC welcomes the criminalisation of rape based on lack of consent alone, without the prerequisite of force or threats for charges to be brought against an offender. This legal definition incorporates the specific crime in line with the Istanbul Convention: rape as a concept should also apply to new forms of rape such as chemical submission. |
| --- | --- |

3.4.

| 3.5. | The Committee recognises the importance of incorporating specific measures for the protection of victims of gender-based violence occurring in the family and their access to justice. However, it calls for this form of violence to be included among the offences set out in the Directive, establishing a common framework for penalties, aggravating circumstances, jurisdiction and limitation periods. |
| --- | --- |

3.5.

| 3.6. | More than half of European women claim to have fallen victim to sexual harassment at some point (55 %) (5). Therefore, the EESC believes that the Directive cannot ignore this form of violence against women, neither in its proposed definitions nor in its provisions on penalties, aggravating circumstances, jurisdiction and limitation periods (6). |
| --- | --- |

3.6.

| 3.7. | A third of women who have suffered sexual harassment have experienced it at work (7). The EESC, therefore, considers it necessary for the Directive to include provisions on this form of violence as well as on the implementation and updating of specific measures by employers to combat sexual and sex-based harassment at work, including cyber violence and cyber harassment (8). The EESC, therefore, calls for the Directive to include harassment at work. |
| --- | --- |

3.7.

| 3.8. | Vicarious violence — i.e. the kind suffered by women as a result of violence committed against their loved ones or family with the intention of emotionally abusing the women in question — is committed mainly against women's children. The EESC believes that the welfare of the child should take precedence over rights of access, where there is reasonable doubt concerning safe contact with the child from both a physical and emotional point of view. |
| --- | --- |

3.8.

| 3.9. | Bearing in mind that financial independence is crucial to the sense of empowerment and to the recovery of victims of violence occurring within the family, the EESC notes with concern the lack of specific measures, within the framework of social dialogue and collective negotiations, to ensure that victims can retain their jobs and to ensure the integration of unemployed victims into the labour market. |
| --- | --- |

3.9.

| 3.10. | Having seen the results of the European Parliament Report on sexual exploitation and prostitution and its impact on gender equality (9), the EESC believes that it would be proper for these women to be referred to as ‘women in prostitution’ not ‘sex workers’, based on Article 6 of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) and on General Recommendation No 38 of the Committee on the Elimination of Discrimination against Women on trafficking in women and girls in the context of global migration, of 6 November 2020. |
| --- | --- |

3.10.

| 3.11. | Directive 2011/36/EU of the European Parliament and of the Council (10) considers the consent of the victim to be invalid when it is obtained by means of a threat, the use of force, coercion, abuse of power or of a position of vulnerability, or the giving or receiving of payments or benefits. The EESC considers that procuring or profit derived from the sexual exploitation of another person should be included among the penalties under Chapter 2 of the Directive, on offences concerning sexual exploitation. |
| --- | --- |

3.11.

| 3.12. | The EESC shares the concern of the Special Rapporteur of the UN Human Rights Council (11) regarding the increase in surrogate pregnancy. Like the European Parliament (12), the EESC views surrogate pregnancy as a form of reproductive exploitation that undermines women's dignity. It thus believes that this practice — when it is a legal transaction involving profit or benefits for any of the parties, including publicity — should be considered a form of violence against women and be treated as sexual exploitation (including it in Chapter 2 and Article 1). |
| --- | --- |

3.12.

| 3.13. | Violence against women is the most widespread form of human rights violation in the EU but it is most prevalent among women and girls in vulnerable situations, with women and girls from ethnic and/or cultural minorities, such as the Roma, requiring special attention. |
| --- | --- |

3.13.

| 3.14. | The EESC supports all appropriate legislative measures aimed at protecting women with disabilities from all forms of exploitation, violence and abuse, including sex-based aspects. It also supports suitable preventive measures, in particular appropriate forms of assistance and support that take into account gender issues for women with disabilities. To this end, the EESC supports the proper supervision by independent authorities of all facilities and programmes designed to help women with disabilities. |
| --- | --- |

3.14.

| 3.15. | The EESC also supports all appropriate measures aimed at promoting the physical, mental and psychological recovery, rehabilitation and social reintegration of women with disabilities who have suffered any form of violence or abuse, including by offering them protection. The Committee calls for special attention to be given to women with disabilities, as they are more exposed to gender-based violence because of their disability (forced sterilisation, legal incapacitation declared by members of the family). |
| --- | --- |

3.15.

| 3.16. | Migrant women, especially if their administrative status is irregular, must be protected by being immediately issued with an autonomous and provisional residence permit when they file a complaint (13). Likewise, if during proceedings this legal documentation is found to be missing, the competent migration authorities should not be informed. |
| --- | --- |

3.16.

| 3.17. | The EESC very much appreciates the inclusion of cyber harassment and the non-consensual sharing of intimate or manipulated material as forms of violence against women and girls. However, it is concerned about the requirement for material to have been made accessible to a ‘multitude of end-users’ in order for the act to be considered an offence. This requirement is ambiguous, vague and highly open to interpretation, and does not deal with the real reputational harm which is sometimes greater if the material is shared only with people from the victim's close social, family or work circles. The Committee believes that lack of consent and public exposure should constitute cyber harassment in and of themselves without the need to assess whether material has been shared with a multitude of users or whether it was actually just shared with many or a fair number of users (Article 7(a) and (b), Article 8(c) and Article 9(a)). |
| --- | --- |

3.17.

| 3.18. | Widespread use of the web and social media is fostering an increasingly frequent non-consensual exchange of material with sexual content, which is having a stronger impact and causing victims more harm. The Committee is concerned about this widespread practice and believes that the penalties and the limitation period for it (Article 7) should be equivalent to those for cyber stalking under Articles 12 and 15 (Article 8). |
| --- | --- |

3.18.

| 3.19. | The EESC welcomes the requirement for specific training to be given to the authorities competent for receiving and handling complaints relating to the offences provided for in the Directive. However, it believes that there should also be specific measures for monitoring and evaluating the effectiveness of the system as well as a provision on specific penalties in the event that the competent authorities fail to comply with the due diligence principle (Article 37(6)). |
| --- | --- |

3.19.

| 3.20. | The Committee welcomes the need for people, units and services that investigate and prosecute acts of violence against women and girls — in particular legal actors, authorities and court staff, judges, prosecutors, lawyers, victim support workers and restorative justice services, care professionals, social and educational services and other relevant staff that might come into contact with vulnerable groups or with the victims — to possess ‘sufficient’ experience. However, the EESC warns about the potentially subjective interpretation of the sufficiency or insufficiency of the experience. Bearing in mind that one of the main mistakes in related interventions is precisely the lack of training and awareness among the actors involved, the EESC recommends that specific training be required not just for professionals handling complaints or who are in contact with victims but also for those involved in the investigation or prosecution process provided for under Chapter 3 (Article 17(1)). |
| --- | --- |

3.20.

| 3.21. | The speed at which victims are assisted is key to their proper recompense, rehabilitation and recuperation. Therefore, the EESC believes that victims must be referred to support services not just in a timely and coordinated manner but also as a priority and a matter of urgency (Article 20(2)). |
| --- | --- |

3.21.

| 3.22. | The EESC is pleased that measures have been proposed to ensure victims have access to holistic, tailored, general and specialised support services that meet their specific needs. However, it regrets that the list of specialist support services which Member States are required to provide victims with (Article 27(1)) only refers to the support provided during the legal proceedings or during the investigation and the court case but does not mention access to healthcare services, including sexual and reproductive health services, as something essential for victims. The EESC also notes with great concern that there is no specific reference to sexual and reproductive health services, including emergency contraception and abortion, as support services that are not only essential but urgently needed and to which victims of sexual violence must have access (Article 28). According to the UN and the European Court of Human Rights, the obligation to see a pregnancy through when it results from rape can constitute a cruel, inhuman and degrading form of violence, which is a serious matter. The EESC calls on the European Commission to include healthcare services, including sexual and reproductive health services, in the list of essential support services for victims and to press for all EU Member States to urgently remove any barriers that make it difficult to access emergency contraception and induced abortion services following a rape. |
| --- | --- |

3.22.

| 3.23. | Women who are displaced and fleeing conflict are at greater risk of suffering gender-based violence. Sexual violence is often used as a weapon of war and women and girls are at greater risk of falling prey to human trafficking and sexual exploitation. The EESC stresses that support, protection and access to essential health services such as the treatment of psychological trauma and access to sexual and reproductive services, including emergency contraception and abortion care, are of utmost importance and should be provided in all European countries. |
| --- | --- |

3.23.

| 3.24. | The Committee firmly believes that emergency restraining and protection orders aimed at safeguarding the physical and mental well-being of victims must incorporate measures that prevent the aggressor from harassing or physically approaching the victim. This should not only apply to restricting or prohibiting access to the victim's residence or workplace (Article 21(1)) but also to the public space in general, taking into consideration potential cases in which proximity between the victim and their aggressor could be considered as dangerous behaviour by the offender or suspect (Article 21(2)). |
| --- | --- |

3.24.

| 3.25. | The EESC is pleased that the victims helplines and the specialist support offered at the sexual violence crisis referral centres for victims are accessible every day of the week and free of charge. However, it considers that all mechanisms and measures for supporting victims of sexual violence should be expressly easy to access and free of charge, as should the information on preventive measures and the rights of victims and the redress and compensation procedures. |
| --- | --- |

3.25.

| 3.26. | The Committee welcomes the inclusion of specialist support in cases of sexual harassment at work and the requirement for preventive national policies to be put in place. However, it draws attention to the limitation of exclusively external counselling and care services (Article 30) and the fact that there is no reference to the importance of social dialogue, collective negotiation and the necessary participation and negotiation with social partners, especially with the trade unions as legitimate representatives of workers' interests and rights. It is also concerned about and surprised at the suggestion of ‘mediation’ in cases involving this type of violence against women. |
| --- | --- |

3.26.

| 3.27. | In view of this, the EESC believes it is essential and urgent for the ILO's Violence and Harassment Convention (No 190) and the Istanbul Convention to be ratified by all Member States that have not yet done so, and by the EU itself. |
| --- | --- |

3.27.

| 3.28. | The Committee is delighted to see that the proposal includes preventive measures against gender-based violence in educational settings, including the reinforcement of comprehensive sexuality education. However, given the role that education plays in shaping gender roles and stereotypes, this provision should apply to all education stages, and the education community, civil society organisations (especially feminist associations), social partners and impacted communities should be an explicit part of institutional cooperation (Article 36(2)). |
| --- | --- |

3.28.

| 3.29. | The EESC strongly welcomes the cooperation and coordination between Member States to gather data and investigate the causes, prevalence and effects of violence against women. However, it questions how strong a commitment can be elicited with the phrase ‘shall support’ (Article 44(7)) which simply invites Member States to take action. The Committee believes that it would be much more effective and ambitious to adopt a commitment making it compulsory to adopt specific and meaningful measures establishing a set time frame (Article 44(7)). |
| --- | --- |

3.29.

| 3.30. | The migrant diasporas hosted by various EU countries make it necessary to take into consideration forms of violence against women and girls that constitute part of the cultural norms of their communities of origin. The Committee is therefore pleased that the Directive specifies female genital mutilation as an offence. However, it warns about the need to be especially careful in ensuring that awareness and prevention campaigns avoid stigmatising women belonging to these communities and that the requirement to show cultural sensitivity when identifying the consequences of female genital mutilation (Article 37(2)) also applies to prevention campaigns. In this respect, the Committee believes that it is key to work with and from within the communities in question so as to prevent and neutralise the cultural significance of the practice (Article 36(6)) (14). |
| --- | --- |

3.30.

| 3.31. | The EESC is pleased that forced abortion and sterilisation have been recognised as specific forms of violence. However, broader violations of health and sexual and reproductive rights such as gynaecological and obstetric violence, forced pregnancy and denial of abortion care, should also be combated as forms of violence against women. The EESC notes with concern that the definition of violence against women does not include existing restrictions on induced abortion undergone freely and safely or the harassment suffered — mainly in the vicinity of the clinics where abortions take place — by women who freely choose this option. |
| --- | --- |

3.31.

| 3.32. | The Committee also notes with concern that the enjoyment of a free, equal and full life for children who have lost their mother because she was a victim of violence against women, is not provided for. To be able to live such a life they must be able to overcome the particularly vulnerable situation they are in as a result of the violence they have suffered — made even worse if their mother has been murdered — and to receive some form of compensation. In the latter case, it is essential to make it easier for these children to access the civil damages they are entitled to for the offences committed against them. It is also essential to speed up the inheritance process following the offence, to make it possible for them to access their assets and inheritance rights without delay (15). |
| --- | --- |

3.32.

| 3.33. | The Committee regrets that this Directive is not accompanied by a financial memorandum and that, therefore, public funding of the Directive and the services and measures it proposes is not guaranteed. |
| --- | --- |

3.33.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  FRA (2014), Violence against women: an EU-wide survey.

1

(2)  ETF (2019), Time's Up for Violence Against Women!

2

(3)  Eurofound (2017), 6th European Working Conditions Survey.

3

(4)  European Union (2021), 2021 report on gender equality in the EU.

4

(5)  Survey based on interviews with 42 000 women. Source: Violence against women: an EU-wide survey, European Union Agency for Fundamental Rights, 2014.

5

Source:

(6)  Following through on the commitments made at the Me Too event held by the European Parliament in February 2019, where candidates in the May elections were called upon to make a firm commitment to combating sexual harassment specifically.

6

(7)  Survey based on interviews with 42 000 women. Source: Violence against women: an EU-wide survey, European Union Agency for Fundamental Rights, 2014.

7

Source:

(8)  In this regard, the EESC points to Article 48 of Organic Law 3/2007 of 22 March as constituting best practice in Spain in terms of substantive gender equality.

8

(9)  European Parliament Report on sexual exploitation and prostitution and its impact on gender equality (2013/2103(INI)). Committee on Women's Rights and Gender Equality. Rapporteur: Mary Honeyball. A7-0071/2014. 3.2.2014. See also European Parliament resolution of 10 February 2021 on the implementation of Directive 2011/36/EU on preventing and combating trafficking in human beings and protecting its victims (2020/2029(INI)).

9

(10)  Directive 2011/36/EU of the European Parliament and of the Council of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims, and replacing Council Framework Decision 2002/629/JHA (OJ L 101, 15.4.2011, p. 1).

10

(11)  United Nations. Human Rights Council. Report of the Special Rapporteur on the Sale and Sexual Exploitation of Children, including Child Prostitution, Child Pornography and Other Child Sexual Abuse Material. A/HRC/37/60. Human Rights Council. 37th session. 26 February to 23 March 2018.

11

(12)  As stated in the European Parliament resolution of 17 December 2015 on the Annual Report on Human Rights and Democracy in the World and the European Union's policy on the matter (2015/2229(INI)), which condemns gestational surrogacy because it ‘undermines the human dignity of the woman since her body and its reproductive functions are used as a commodity’, the EESC demands an urgent assessment of the legality of this practice, in light of the various human rights instruments available, and calls for the prohibition of a practice ‘which involves reproductive exploitation and use of the human body for financial or other gain, in particular in the case of vulnerable women in developing countries’.

12

(13)  In this context, Spain's immigration law constitutes best practice (Article 31a of Organic Law 4/2000).

13

(14)  The Multisectorial Academic Program to prevent and combat female Genital Mutilation (FGM/C). European Commission 2016-2018.

14

(15)  In this regard, the Committee considers Organic Law 2/2022 of 21 March on improving protection for orphan victims of gender-based violence to be good practice in Spain.

15

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/101 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/101

---

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: COVID-19 — Sustaining EU Preparedness and Response: Looking ahead

(COM(2022) 190 final)

(2022/C 443/14)

| Rapporteur-general: | Sára FELSZEGHI |
| --- | --- |

Rapporteur-general:

Sára FELSZEGHI

| Referral | European Commission, 28.6.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Employment, Social Affairs and Citizenship |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 199/0/4 |

Referral

European Commission, 28.6.2022

Legal basis

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

Section responsible

Section for Employment, Social Affairs and Citizenship

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

199/0/4

1.   Conclusions and recommendations

| 1.1. | The COVID-19 pandemic has caused damage to people's daily lives, the health sector, national economies and societies. Experience and the lessons learned from it, as well as related research, will enable the EESC to propose long-term solutions that will make the EU better prepared to sustainably manage health threats caused not only by COVID-19 but also other communicable diseases, and to strengthen and improve the response and coordination between Member States and at global level. |
| --- | --- |

1.1.

| 1.2. | To this end, the European Economic and Social Committee (EESC) believes that the EU needs to develop an immediate response capability, involving/using existing instruments, to be prepared to respond immediately in the event of further variants or other pandemics. We propose that a strategy should be drawn up which — after integrating the national specificities of each Member State and converging the different efforts and intentions — would give us a complex toolbox that includes all elements of prevention (vaccination, epidemiological measures, education, communication, etc.), treatment (medicinal products, patient care, medical rehabilitation, care, etc.), rehabilitation (at the workplace, school) and long-term care (focusing on those suffering from long COVID), as well as the provision of existing and additional economic resources. |
| --- | --- |

1.2.

| 1.3. | Vaccination is one of the pillars of prevention. It blocks two important links in the epidemiological chain (comprising the source of infection, the transmission route and the susceptible organism) at the same time (the source of infection and the susceptible organism); it is therefore essential to implement this strategy while continuously analysing it and incorporating new innovations. By now, both the EU and most Member States have overcome the initial difficulties and have a vaccination strategy. Thanks to the EU vaccines strategy, a sufficient supply of safe and efficient vaccines is available for all. However, vaccination coverage rates are stagnating and/or are suboptimal in several EU Member States (1). The risk is further increased by the fact that the vaccine is less effective for people who have not yet received a booster dose (including around nine million people aged 60 or older) (2). |
| --- | --- |

1.3.

| 1.4. | The EESC believes that this is due, inter alia, to a decrease in vigilance, inefficient information and education, and the presence of disinformation. We therefore propose strengthening communication both by the EU and the Member States, detecting disinformation early and take countermeasures, and ensuring the development and procurement of newly developed complex vaccines that together can protect against both new variants and complex infections (e.g. COVID-19 + influenza). |
| --- | --- |

1.4.

| 1.5. | As the pandemic is global, we should look beyond the EU Member States when considering vaccination measures. Thus, we strongly support the efforts of the EU and some Member States following the principle of solidarity ('Team Europe) to support partner countries (3) in the African Union (as set out at the February 2022 summit), not only concerning vaccination, but also to address the health and socio-economic impact of the pandemic. |
| --- | --- |

1.5.

| 1.6. | Another important epidemiological measure is the identification and implementation of public health tasks by individual Member States, as part of the community mitigation measures. The EESC believes that the EU institutions should play an important coordination and technical guidance role, with a view to strengthening the implementation and the efficacy of public health tasks and ensuring a resilient protection system. |
| --- | --- |

1.6.

| 1.7. | With the intensity of the epidemic risk waning, each country has modified its testing strategy. The only people tested are those showing COVID symptoms and their direct contacts, people at risk of serious illness, and people in regular contact with vulnerable population groups (e.g. health and social care workers). As this reduces the number of people tested, it is likely that it will be more difficult to interpret epidemiological data. It is thus crucial to ensure both the reliability of the tests and representativeness in epidemiological terms, in order to provide useful reference points about epidemiological trends for a rapid response. |
| --- | --- |

1.7.

| 1.8. | Individual Member States use rapid antigen tests to further strengthen their overall testing capacity, in particular when PCR capacities are limited or where clinical needs require shorter lead times. The Health Security Committee set up a dedicated technical working group to regularly review and update the common EU list of rapid antigen tests meeting the specific performance criteria for SARS-CoV-2 detection (4). This may guarantee, on the one hand, a decrease in the number of false positive/false negative test results (which is important for obtaining a realistic picture of the epidemiological situation, and for increasing the efficacy of epidemiological measures) and, on the other hand, the ability to reliably detect infections caused by new mutations. |
| --- | --- |

1.8.

| 1.9. | In the context of other epidemiological measures, particular emphasis should be placed on the importance of ventilation. The importance of frequent natural ventilation cannot be stressed enough; it simply requires attention and is easy to do. Mechanical ventilation is a different matter. If the ventilation system cannot be efficiently disinfected, or if ventilation is insufficient, the transmission of SARS-CoV-2 takes place mainly indoors (e.g. office buildings, workplaces, schools, shopping centres, etc.). Therefore, Member States should consider the use of devices equipped with high-quality filters (5), in particular in the spaces mentioned above. This requires additional (technical innovation, financial) efforts by the Member States. With the epidemic losing momentum, most Member States have removed the obligation on mask-wearing (except in health care institutions). Nevertheless, the EESC recommends, in particular for vulnerable groups (aged 60+, people with chronic illnesses, unvaccinated people, etc.), continued mask-wearing in highly frequented and poorly ventilated rooms, on public transport, etc., social distancing, and use of hand disinfectants, because these measures also help reduce the risk of infection and the likelihood of a resurgence of the epidemic. |
| --- | --- |

1.9.

| 1.10. | The EESC endorses and supports the professional position that the objective of epidemiological surveillance should no longer be based on the identification and reporting of all cases, but rather on reliable estimates of infection intensity in the community, the impact of serious illness and the efficacy of vaccines. Taking advantage of the digitalisation of health data, Member States should develop strategies to restore sentinel surveillance systems (6) based on primary and secondary treatment of acute respiratory infections, and complement this by strengthening other monitoring systems such as wastewater monitoring. In order to interpret these, it is essential to develop the criteria for a single reporting system as soon as possible, as a shared responsibility of the EU and the Member States. |
| --- | --- |

1.10.

| 1.11. | If we want citizens of the Member States to accept and actively participate in the necessary epidemiological measures, it is important to understand the causal links. The EESC recommends setting up an education system which covers the health network, school-based education, workplace education and the media. Apart from the Member States, the EU and the WHO should also be responsible for preparing the necessary educational material. This could significantly increase vaccination coverage and the population's cooperation in epidemic prevention, and reduce the spread and effect of fake news. |
| --- | --- |

1.11.

| 1.12. | Certain actors exploited the pandemic by means of interference and manipulating information, including disinformation, to amplify and benefit from citizens' uncertainties, fears and real concerns, putting lives at risk and, not least, jeopardising an efficient pandemic response and public trust in the institutions dealing with the COVID-19 pandemic. Beyond the measures taken so far by the EU and the Member States, the EESC recommends that the Member States set up a monitoring and rating system which, in addition to detecting fake news, would ‘label’ information certified by experts, proving its authenticity and veracity. Strong communication is needed about this so that citizens of the Member States can learn about this information in their mother tongue. |
| --- | --- |

1.12.

| 1.13. | Curing COVID-19 is a complex task; in addition to medication, it comprises patient care, medical/occupational rehabilitation and longer-term care. The EESC recommends preparing a guideline which covers all tasks related to treatment, which is regularly updated and available online (in all the official languages of the Member States). |
| --- | --- |

1.13.

| 1.14. | Among these tasks, beyond medical treatment, rehabilitation is of great importance and is key to the health and well-being of young people and workers. A successful occupational/school rehabilitation is ensured by the occupational health service/school health service, because they offer a tailored path based on workload/physical demand, significantly reducing numbers of sick leave days/absenteeism, speeding up the rehabilitation process and facilitating reintegration. Therefore, the EESC recommends that, following the patient's institutional rehabilitation, their further rehabilitation be assigned to the occupational/school health system, creating at the level of each Member State the legal and financial background for a successful rehabilitation achieved through cooperation between the employer (creating the necessary working conditions), the occupational/school health service (providing a tailored professional background for rehabilitation) and the employee (as an active participant). This leads to significant public health and economic benefits, both for the Member States and for the EU. |
| --- | --- |

1.14.

| 1.15. | COVID-19 is a complex disease with a direct and indirect health impact. Although we are not yet aware of all its effects, we know that it is a disease causing inflammation in and affecting almost all organs (heart, lungs, kidney, locomotive and digestive organs, mental abilities, etc.), where patients continue to experience symptoms for weeks and months after the acute phase of the disease, a phenomenon known as ‘long COVID’. These people need specialised care and rehabilitation. The EESC recommends that, alongside (technical and economic) EU support, the Member States should facilitate occupational health to provide preventive mental health services easily accessible to workers (mental health professionals or psychologists according to the legislation of the Member State), to help rehabilitate people suffering from mental disorders (deterioration of cognitive abilities, reduced learning capacity, different degrees of depression). This is all the more important because mental disorders are not only specific to long COVID patients: the circumstances brought about by the pandemic (confinement, insecurity, fear, loneliness, etc.) may also cause depression, which in many cases may lead to addictive diseases or in serious cases even to suicide, with major public health, economic and societal consequences. |
| --- | --- |

1.15.

| 1.16. | EU Member States do not have an equal level of economic resources. In order to ensure efficacy, coordination and sustainability both in health/public health systems and in the health industry, the EESC recommends that the EU assign dedicated financial resources (complementing those already available) to the technical strategy, enabling the Member States to build efficient, sustainable, resilient protection systems of the same level. |
| --- | --- |

1.16.

2.   Summary of the position adopted

The COVID-19 pandemic has had a diverse and far-reaching impact on public health, our health systems, our economies and our entire way of life. Our proposals under Conclusions and recommendations — as part of the community mitigation measures — represent continuity, and will continue to serve the sustainability, efficacy and resilience of the system. We believe that the de-escalation of the pandemic is only temporary, and while alleviating the mitigation measures will be of great help, especially for citizens, health systems and economic operators, we need to be prepared for a possible rebound of the pandemic; continued efforts are therefore essential. The EESC hopes that the adoption of its proposals will further strengthen the EU's and Member States' capacity to prevent, prepare for and respond to health crises, to sustainably address health threats due not only to COVID-19, but also to other communicable diseases, and to strengthen and improve the response and coordination between Member States and at global level.

3.   Proposed changes

| 3.1. | In order to complement/extend the existing strategy, it is important that the EU institutions draw up a complex strategy which — after integrating the national specificities of each Member State and converging the different efforts and intentions — would give us a complex toolbox that includes all elements of prevention (vaccination, epidemiological measures, education, communication, etc.), treatment (medicinal products, patient care, medical rehabilitation, long-term care, etc.), rehabilitation (at the workplace, school) and long-term care (focusing on those suffering from long COVID), as well as the provision of existing and future economic resources. |
| --- | --- |

3.1.

| 3.2. | We propose strengthening communication and the media both by the EU and the Member States, detecting disinformation early and taking countermeasures, and ensuring the development and procurement of newly developed complex vaccines that together can protect against both new variants and complex infections (e.g. COVID-19 + influenza). |
| --- | --- |

3.2.

| 3.3. | In order to prevent disinformation, a monitoring and rating system should be put in place which, in addition to detecting fake news, would ‘label’ information certified by experts, proving its authenticity and veracity for all EU citizens. |
| --- | --- |

3.3.

| 3.4. | The EU institutions and the EESC should play an important coordination role, give technical guidance and at the same time adequately inform civil society, thereby helping the process of strengthening the implementation and the efficacy of public health tasks and ensuring a resilient protection system. |
| --- | --- |

3.4.

| 3.5. | The provision of dedicated financial resources (increasing existing ones) to eliminate the economic imbalances in terms of protection. |
| --- | --- |

3.5.

| 3.6. | The EESC recommends introducing in all Member States an education system covering the health network, school-based education, workplace education and the media. Besides the Member States, the EU and the WHO should be involved in preparing the necessary educational material. |
| --- | --- |

3.6.

| 3.7. | Following their institutional rehabilitation, the further rehabilitation of patients recovered from COVID-19 should be assigned to the occupational/school health system, creating the legal and financial background (in line with national specificities) for a successful rehabilitation achieved through cooperation between the employer (creating the necessary working conditions), the occupational/school health service (providing a tailored professional background for rehabilitation) and the employee (as an active participant). |
| --- | --- |

3.7.

4.   General comments

| 4.1. | We consider that the European Commission's strategy (7), which aims to ensure that the EU's overall political objectives are developed jointly by the EU institutions together with the Member States and in line with national legislation, is essential. These include the European Commission's coronavirus response (8) and the European Commission's recovery plan (9). The largest stimulus package ever financed in Europe is made up of the EU's long-term budget coupled with NextGenerationEU, the temporary instrument designed to boost the recovery. |
| --- | --- |

4.1.

| 4.2. | The importance of the proposals under discussion is also reflected by the fact that in parallel with the present opinion, a draft own-initiative opinion (INT/989) on Emergency preparedness is also in the pipeline. With this one, the EESC aims to contribute to the discussions and future actions on emergency preparedness, focusing on the impact on businesses in terms of the single market, production and consumption. |
| --- | --- |

4.2.

| 4.3. | In one opinion (10), the EESC presents its position on the European Commission's proposal on the creation of the European Health Emergency Preparedness and Response Authority (HERA), whose mission is to prevent, detect and rapidly respond to cross-border health emergencies. The EESC welcomes this initiative, but is concerned by the very limited role given by HERA to the European Parliament, regional authorities, health insurance bodies and civil society organisations, and recommends that greater transparency be ensured by adjusting HERA's structure and with regard to the funds spent by and through HERA. |
| --- | --- |

4.3.

| 4.4. | The EESC's opinion (11) states that the ‘Digital Green Certificate’ should minimise complexity for travelling passengers and facilitates their movement during the COVID-19 pandemic; however, it underlines that the possession of the Green Certificate should not exempt travellers from complying with other risk reduction measures, but should be considered a transition strategy for countries that demand a permanent mechanism for constant re-evaluation after its adoption. |
| --- | --- |

4.4.

| 4.5. | We welcome the fact that the EESC has recently drawn up a number of opinions whose aim is directly linked to preparing for the COVID-19 emergency. One of these is SOC/665 (12), whose main points include that the EU and the Member States should ensure that everyone has equal access to quality health and social services, the necessity to take appropriate measures to improve the working conditions, health and safety of healthcare workers, that access to the vaccination should remain a public good, and that medical innovations and responses should be accessible to all, regardless of their income, Member State or region of residence. In light of the renewed mandate of the European Centre for Disease Prevention and Control, the EESC underlines the importance of making the reduction of health inequalities in the EU central to the Centres work, and also of including non-communicable diseases. When it comes to the reinforced role for the European Medicines Agency (EMA), the EESC urges that the Medicines and Medical Devices Steering Groups include and meaningfully consult civil society and social partners. |
| --- | --- |

4.5.

| 4.6. | In its opinion (13), the EESC proposed that a European mechanism for coordination and rapid intervention should be deployed as soon as possible. A task force of experts should be set up immediately to act as a knowledge and resource coordinator to create a network of the best virology and epidemiology centres and the best diagnostic capacities. The EESC believes that the health programme can only achieve real results by adopting an inclusive approach that involves international organisations (including the World Health Organisation), the Convention on the Rights of Persons with Disabilities, and those health sector stakeholders most familiar with people's situations on the ground, not to mention regularly assessing the objectives. |
| --- | --- |

4.6.

| 4.7. | The EESC's opinion (14) welcomes the intention to ensure the supply of safe, high quality and affordable medicines and the financial sustainability of Member States' health systems through the new Pharmaceutical Strategy, alongside promoting the competitiveness of the pharmaceutical industry; and stresses the central role of a functioning, fair and efficient internal market, which, on the one hand, promotes and rewards genuine medical innovation with real added value for healthcare and, on the other, strengthens competition for fair and affordable access to medicines. |
| --- | --- |

4.7.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  https://www.ecdc.europa.eu/en/news-events

1

(2)  ECDC, Monitoring COVID-19 vaccination, https://ec.europa.eu/health/health-security-and-infectious-diseases/crisis-management_en

2

(3)  https://ec.europa.eu/commission/presscorner/detail/en/fs_22_870

3

(4)  Technical Working Group on COVID-19 diagnostic tests, https://ec.europa.eu/health/health-security-and-infectious-diseases/crisis-management_en#technical-working-group-on-covid-19-diagnostic-tests

4

(5)  For example, stand-alone air cleaning devices equipped with HEPA (high-efficiency particulate) filters or filters of similar efficacy, and ultraviolet germicidal irradiation (UVGI); devices in the ducts of heating, ventilation and air conditioning systems; or devices located at a sufficient height in rooms (UVGI equipment installed near the ceiling).

5

(6)  Sentinel surveillance means the monitoring of the prevalence of certain diseases/conditions through a voluntary network of doctors, laboratories and public health services to assess the stability of the health status of the population or any change in it.

6

(7)  https://ec.europa.eu/info/strategy_en

7

(8)  https://ec.europa.eu/info/live-work-travel-eu/coronavirus-response_en

8

(9)  https://ec.europa.eu/info/strategy/recovery-plan-europe_en

9

(10)  OJ C 275, 18.7.2022, p. 58.

10

(11)  OJ C 286, 16.7.2021, p. 146.

11

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

12

(13)  OJ C 429, 11.12.2020, p. 251.

13

(14)  OJ C 286, 16.7.2021, p. 53.

14

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/106 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/106

---

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: EU Strategy for Sustainable and Circular Textiles

(COM(2022) 141 final)

(2022/C 443/15)

| Rapporteur: | Florian MARIN |
| --- | --- |
| Co-rapporteur: | Antonello PEZZINI |

Rapporteur:

Florian MARIN

Co-rapporteur:

Antonello PEZZINI

| Referral | European Commission, 2.5.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Consultative Commission on Industrial Change |
| Adopted in section | 24.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 202/0/2 |

Referral

European Commission, 2.5.2022

Legal basis

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

Section responsible

Consultative Commission on Industrial Change

Adopted in section

24.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

202/0/2

1.   Conclusions and recommendations

| 1.1. | The textile industry has the potential to contribute to the EU's environmental goals, and must become accountable for its environmental impact. The right balance must be struck between the end-of-life costs for textile producers and the competitiveness of the industry. |
| --- | --- |

1.1.

| 1.2. | In order to embrace the circular and digital transition, the textile ecosystem needs appropriate and flexible measures that address its particular characteristics. Creativity and sustainable innovation must be an integral part of the Textile Strategy. |
| --- | --- |

1.2.

| 1.3. | The Committee supports the extensive labelling requirements relating to the recycling degree and footprint of textile products as a possible incentive for consumers to choose sustainable products and quality over quantity, but this requires a thorough impact assessment and a large-scale information campaign at European level. |
| --- | --- |

1.3.

| 1.4. | The European Economic and Social Committee (EESC) is concerned about unfair competition practices, and requests increased market surveillance of imported products and better coordination and cooperation between national enforcement authorities. The Committee calls for measures to ensure equilibrium between the actors in textile supply chains and recommends the launch of global sustainability best practices, in full compliance with CEN, CENELEC, and ETSI technical standards, while also stressing the right to health and environmental protection. |
| --- | --- |

1.4.

| 1.5. | The Committee deems it necessary to strengthen existing and future trade agreements, and introduce sustainability and human rights protection paragraphs within the Generalised Scheme of Preferences for developing countries. |
| --- | --- |

1.5.

| 1.6. | The Committee had expected more emphasis on social aspects in the sector, as the green transition must go hand in hand with the just transition. Further initiatives should be prepared related to social dialogue and collective bargaining. |
| --- | --- |

1.6.

| 1.7. | The Committee points to the need for investments and programmes to consolidate the capacity of inspection institutions and the operational capacity of the social partners for monitoring global agreements, fundamental and workers' rights. Smart use of cohesion funds must contribute to reducing disparities between Member States and regions. |
| --- | --- |

1.7.

| 1.8. | The EESC considers that supplementary assistance should be delivered to Member States in terms of cross-border cooperation, market surveillance, effective control and harmonised standards, and it calls for a supranational monitoring process. |
| --- | --- |

1.8.

| 1.9. | The Committee supports obligatory due diligence for all EU companies, with specific support for SME compliance, and calls for strict measures that prohibit economic relations with entities that use child labour or fail to respect decent working conditions, as specified in the ILO core conventions. |
| --- | --- |

1.9.

| 1.10. | The EU funds invested in the sector should include social and environmental criteria for project financing, and the EESC calls for a dedicated EU initiative for improving social security, working conditions, health and safety at work and wages in the textile sector, with the involvement of the social partners, both within and outside the EU. |
| --- | --- |

1.10.

| 1.11. | The transition to new ecodesign-based sustainable business models requires effective policies that deal with materials and design, production and distribution, market development, use and re-use, collection and recycling. It must be complemented by increased financing opportunities and incentives for local producers to shift production processes towards high-quality, durable, and recyclable products. |
| --- | --- |

1.11.

| 1.12. | The future Extended Producer Responsibility (EPR) scheme should encourage fibre-to-fibre textile recycling instead of false circularity processes, and must be accompanied by the creation of sufficient collection points in all regions of all Member States, including in rural areas. |
| --- | --- |

1.12.

| 1.13. | The EESC calls for national campaigns that promote textile sector labour opportunities, as well as financing programmes for upskilling and reskilling the labour force, together with the implementation of vocational training and apprenticeships programmes. |
| --- | --- |

1.13.

| 1.14. | The Committee calls for sector-specific and harmonised social and environmental rules for public procurement in the Union. A European tripartite committee should be established, including the social partners and civil society organisations, for monitoring and supporting the social or environmental criteria in purchasing practices in the textile sector. |
| --- | --- |

1.14.

2.   Competitivity aspects

| 2.1. | The EESC notes the ambitions set out within the Commission Communication (1), but considers that this Communication is just a statement of necessary steps and future legislative actions, commitments and delegated acts, rather than concrete actions that will selectively target and achieve these goals for the textile sector. The Committee would have been ready to engage in more detailed discussion and was eagerly expecting this, but appreciates the introduction of textiles into the discussion and considers that the 16 announced future legislative initiatives should be coherent, realistic and enforceable. |
| --- | --- |

2.1.

| 2.2. | The textile ecosystem is an extremely composite one, with particular characteristics for each component that require appropriate and adaptive measures. In order to ensure an appropriate circular and digital sustainable transition, these specificities must be addressed with adequate graduality and not through a ‘one-size-fits-all’ approach. The war in Ukraine and energy price increases are adding a burden to the sector's productivity and performance. |
| --- | --- |

2.2.

| 2.3. | The rapid increase of online shopping has created a competitiveness issue for textile companies and the industry is struggling, especially against large platforms. Special attention must be given to companies which are operating in several Member States and third countries. The EESC considers that regulation of digital markets and supranational monitoring are needed and supplementary assistance should be delivered to the Member States in terms of cross-border cooperation, market surveillance, effective control and harmonised standards. |
| --- | --- |

2.3.

| 2.4. | Purchasing policy, the relation between brands and different subcontractors, high volumes and low prices are factors which contribute to human and labour rights violations. The huge influence of brands at the supply chain level is a factor that can undermine manufacturers' efforts to respect labour and human rights and environmental conditionalities. The EESC calls for measures to assure equilibrium between the actors in supply chains. Furthermore, the Committee strongly recommends that the EU textile strategy and all future related actions take due account of the particularities of SMEs in an appropriate manner and that all measures be preceded and accompanied by a specific impact analysis. |
| --- | --- |

2.4.

| 2.5. | The EESC is concerned about unfair competition practices and requests increased market surveillance of imported products, especially in relation to end products coming from third countries and entering the single market. Better coordination and cooperation between national enforcement authorities is necessary to provide consumers with safe and compliant products. |
| --- | --- |

2.5.

| 2.6. | The EESC points out that ecodesign requirements for the textile sector must take into consideration the durability, recyclability, repairability, and reusability of the products, together with chemical use restrictions, as well as social rights, far beyond the ‘classical’ aspects of design engineering. The EESC notes the need to find a balance between the end-of-life costs that will occur for textile producers and the competitiveness of the industry. |
| --- | --- |

2.6.

| 2.7. | Free trade agreements can contribute to promoting decent work, fair supply chains and social dialogue at sectorial level. The Committee considers it an immediate necessity to strengthen the trade and sustainable development chapters within existing and future trade agreements, and introduce sustainability and human rights protection paragraphs within the Generalised Scheme of Preferences for developing countries. Ex-ante and ex-post human rights and environmental impact assessments should be used in the negotiation process, with the involvement of the social partners and civil society, and should cover a large period of time within the company. |
| --- | --- |

2.7.

| 2.8. | Social economy enterprises and NGOs should and must be involved and supported and can bring an important contribution to achieving the environmental goals for the textile ecosystem. Based on the weight of plastic used for producing clothes, the EESC considers that the EU should consider imposing a tax on virgin synthetic fibres, in order to reduce the use of virgin plastic. Moreover, repairing, waste collection, selection and recycling processes should take into account industrial spacing, regional and geo-policy targets, and rural development. |
| --- | --- |

2.8.

3.   Sustainability, circularity and green transition

| 3.1. | The EESC would like to emphasise that, whatever the future developments of the transition pathway to a more resilient, sustainable and digital textiles ecosystem, the extension of products' lifetimes offers greater benefits than recycling. The Committee also notes the need to create a real EU market for secondary raw materials, and considers that the EU can become a world-wide leader in secondary textile materials if recycling requirements are respected. A contribution can be achieved through the European Circular Economy Stakeholder Platform (2). |
| --- | --- |

3.1.

| 3.2. | The EESC is in favour of the obligation for increased traceability and transparency regarding the number of products that large companies discard and destroy. Furthermore, the Committee asks the co-legislators to support the empowering of the Commission to introduce bans on the destruction of unsold textile products and encourage, where necessary, the donation of textile products to disadvantaged groups or entities engaged in charitable actions. |
| --- | --- |

3.2.

| 3.3. | Microplastics pollution caused by the current design of textiles has a significant impact on the environment. The EESC supports the Commission's conclusion that this is mainly caused by current production processes, especially the ‘fast fashion’ phenomenon. |
| --- | --- |

3.3.

| 3.4. | The EESC points out that companies need financial support to adopt automated sorting technologies for non-rewearable textiles, as well as the development of improved recycling facilities, including the possibility of designing local and regional recycling and sorting hubs. Furthermore, building infrastructure for repairing clothes, such as stores and shops, must represent a key issue for stakeholders in the industry. In this regard, the Committee salutes the EURATEX initiative to create five ReHubs (textile recycling hubs) near the European textile and clothing districts for collecting, sorting, processing and recycling industrial, pre-consumer and post-consumer textile waste. The Committee considers that technical, environmental, social and energy standards for recycled products are needed, and should be transposed and applied at ISO level and inserted in the international trade agreements. |
| --- | --- |

3.4.

| 3.5. | The EESC is worried that textile waste can be exported as second-hand products and considers that immediate action on this is needed at EU level. Effective chemical controls must be implemented across all value chains. Furthermore, the EESC calls for the launch of global sustainability best practices that require buyers and brand owners to check and demand compliance with CEN, CENELEC, and ETSI technical standards. |
| --- | --- |

3.5.

| 3.6. | The Committee considers that sector-specific and harmonised social and environmental rules for public procurement must be developed in the Union, facilitating cross-border participation and a level playing field with the final goal of having mandatory and harmonised systems across the EU. A European tripartite committee should be established, including the social partners and civil society organisations, for monitoring and supporting the social and environmental criteria in purchasing practices in the textile sector. |
| --- | --- |

3.6.

4.   Consumers and digitalisation

| 4.1. | The EESC asks the European Commission to prepare an impact assessment on possible improvements to the labelling for textiles produced/sold in the internal market. Fair access to information for consumers concerning a repair score, traceability and information on the digital label must be ensured. The Committee considers that introducing extensive labelling requirements regarding the recycling degree and footprint of textile products could represent an important incentive for consumers to choose more sustainable textile products. |
| --- | --- |

4.1.

| 4.2. | The EESC believes that a large-scale information campaign at European level can help citizens to make informed sustainable choices, while incentives should be provided for consumers to choose quality over quantity, for example through different VAT rates for sustainable/unsustainable products in the internal market. |
| --- | --- |

4.2.

| 4.3. | Transparent and common shared data regarding products, recycled and re-used compounds, destruction of goods, chemicals used in the production process, the social and labour impact of the production process and the environmental impact concerning every company in the supply chain are important for the monitoring of these supply chains. Furthermore, creating an open data framework and ensuring free access for consumers, civil society and the social partners is crucial for improving the textile sector's environmental and social situation. The EESC considers that consumers' digital literacy must be taken into account and the data content should target all the stakeholders in the supply chain. The right balance must be struck between the need for transparent data and the protection of industrial property rights. |
| --- | --- |

4.3.

| 4.4. | The EESC is worried that less than 1 % of textiles worldwide are recycled into new textiles (3), and considers that the future EPR scheme should produce the right incentives that encourage fibre-to-fibre textile recycling instead of false circularity processes like the use of polyester from recycled plastic bottles for example. |
| --- | --- |

4.4.

5.   Education and working conditions

| 5.1. | The Committee points out that more detail could have been given on social aspects within the textile sector and more initiatives would have been welcomed. The green transition must go hand in hand with the just transition, and the Committee is disappointed that further initiatives related to social dialogue and collective bargaining have not been announced. |
| --- | --- |

5.1.

| 5.2. | A fair redistribution of added value within supply chains and more responsible products implies the consolidation of collective bargaining, reducing atypical forms of employment and proper controls on working conditions. Together with the transformation of the sector towards sustainable production and digital technologies, there is an acute need for skilled workers. Compared to previous years, the needs of the sector are moving towards medium and highly skilled employees. |
| --- | --- |

5.2.

| 5.3. | The sector is facing a serious ageing problem and jobs in textiles are not considered attractive by the young generation. Most of the workers in the sector are women, and this creates more social pressure on the ecosystem. Special attention needs to be paid to rural aspects, small farmers and their role in global supply chains. The Committee calls for specific campaigns in all Member States that promote textile sector labour opportunities, as well as financing programmes for upskilling and reskilling for the existing labour force, together with the implementation of vocational training and apprenticeships programmes in all Member States in order to create high quality textile jobs. Financial institutions should include social conditionalities in their performance standards as a contractual condition for financing. |
| --- | --- |

5.3.

| 5.4. | Violations of labour rights and working conditions (precarious work, poverty wages, lack of health and safety at the workplace, forced labour) continue to be a problem, while different voluntary initiatives (social audits, global agreements, codes of conduct) have proven insufficient. The EESC advocates building up and consolidating the capacity of inspection institutions, the coherence and convergence of inspection methods and criteria, training for inspectors and cooperation with the social partners and civil society both within and outside the EU. Investments in increasing the operational capacity of the social partners for monitoring global agreements, fundamental rights and workers' rights are of paramount importance. Smart use of cohesion funds is needed to contribute to reducing disparities between Member States and regions in the EU. |
| --- | --- |

5.4.

| 5.5. | In the context of very complex and fragmented value chains, the pathway towards sustainability and social justice requires complementary approaches. Asymmetric power relations and unfair competition practices have paved the way for the exploitation of workers and a production model decoupled from environmental boundaries. The EESC considers that a complaint mechanism at European level and in each Member State with the involvement of organised civil society is necessary for ensuring proper implementation of the strategy, and for respecting human and workers' rights and environmental conditionalities, in order to avoid the humiliating exploitation of workers. |
| --- | --- |

5.5.

| 5.6. | The EESC appreciates the recent release of the proposal for a Corporate Sustainability Due Diligence Directive (4), considers that obligatory due diligence for all EU companies is needed with specific support for SME compliance, and calls for strict measures that prohibit economic relations with entities that use child labour or fail to respect decent working conditions, as specified in the ILO core conventions. Furthermore, the Committee notes the existing restrictions in some countries regarding trade union activities, and consider that these have led to industrial accidents, harsh and inhumane working conditions, subsistence wages, lack of basic protective equipment, etc. |
| --- | --- |

5.6.

| 5.7. | Freedom of association, the right to form or join a union and engaging in collective bargaining should not represent barriers for textile workers. The EU funds invested in the textile sector at EU level should include social and environmental criteria for project financing inserted in the evaluation grid. Due to the specificity of the textile sector, the EESC calls for a dedicated EU initiative for improving social security, working conditions, health and safety at work and wages dedicated strictly to the textile industry, with the involvement of the social partners, both within and outside the EU. |
| --- | --- |

5.7.

6.   Funding and investments

| 6.1. | The Committee believes that consolidating competitiveness and reducing the carbon footprint of the European textile sector is dependent on an integrated and interrelated product policy accompanied by stronger regulation, market instruments and incentives, new standards and appropriate information for consumers, manufacturers and other stakeholders. The carbon border adjustment mechanism can reduce the risk of carbon leakage and ensure that the price of imports takes full account of the environmental footprint. |
| --- | --- |

6.1.

| 6.2. | The transition to new sustainable business models requires effective policies that deal with materials and design, production and distribution, market development, use and re-use, collection and recycling, and must be accompanied by increased financing opportunities and incentives for local producers to shift the production processes, research and implement new technologies, adopt sustainable waste management policies and make use of the large amount of data available, alongside promoting cultural creativity. The EESC recognises the role of creative textile sectors in generating innovative solutions that positively impact other sectors and help boost European competitiveness. |
| --- | --- |

6.2.

| 6.3. | The climate commitments must be applied at supply chain level, as the brands are not the owner of the factories in which the products are being made. Incentives should also be awarded to companies which are climate neutral and use 100 % renewable energy. Making full use of the dedicated funds under NextGenerationEU can contribute to ensuring strategic investments, economic growth, and the creation of prosperity and employment, especially for SMEs. |
| --- | --- |

6.3.

| 6.4. | The industry needs a common European framework and financial support to produce high-quality, durable, and recyclable products. This can be done with strong investment in R&D and large-scale European programmes that fund and support collaboration between large companies and SMEs, with the direct involvement of the social partners, academia and other stakeholders. |
| --- | --- |

6.4.

| 6.5. | The introduction of the Extended Producer Responsibility scheme (EPR) must be accompanied by the creation of sufficient collection points in all regions of all Member States, available in rural areas as well. The EESC requests specific measures dedicated to SMEs for increasing the capacity to deliver traceability and transparency at supply chain level and for ensuring a proper connection with manufacturers, paying particular attention to micro and small enterprises. |
| --- | --- |

6.5.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  EU strategy for sustainable and circular textiles.

1

(2)  European Circular Economy Stakeholder Platform.

2

(3)  European Commission — Strategy for textiles.

3

(4)  Proposal for a Directive on corporate sustainability due diligence and annex.

4

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/112 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/112

---

Opinion of the European Economic and Social Committee on the roadmap on security and defence technologies

(COM(2022) 61 final)

(2022/C 443/16)

| Rapporteur: | Maurizio MENSI |
| --- | --- |
| Co-rapporteur: | Jan PIE |

Rapporteur:

Maurizio MENSI

Co-rapporteur:

Jan PIE

| Referral | European Commission, 2.5.2022 |
| --- | --- |
| Legal basis | Article 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Consultative Commission on Industrial Change |
| Adopted in section | 24.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 165/1/3 |

Referral

European Commission, 2.5.2022

Legal basis

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

Section responsible

Consultative Commission on Industrial Change

Adopted in section

24.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

165/1/3

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) fully supports the objectives of the Roadmap on Critical Technologies for Security and Defence, which is particularly timely due to the Russian aggression against Ukraine, namely enhancing research, technology development and innovation, and reducing the EU's strategic dependencies in critical technologies and value chains for security and defence. |
| --- | --- |

1.1.

| 1.2. | The EESC welcomes the ambition shown in the goal of developing a comprehensive approach that spans across the civil-military dividing line and combines the EU and national levels. This endeavour is as complex as it is challenging and will not happen overnight, but should be done with high speed. The invasion of Ukraine is a wake-up call to act much faster than usual. |
| --- | --- |

1.2.

| 1.3. | The EESC calls on the Member States to ensure that their immediate responses to the Russian aggression against Ukraine are in line with the content and objectives of the Roadmap, which is a long-term endeavour. Short-term national defence investments must be coordinated at European level to avoid an extension of fragmentation and duplication; off-the-shelf procurements from third countries must not stifle ongoing or planned European development projects. |
| --- | --- |

1.3.

| 1.4. | The EESC recommends that the Observatory of Critical Technologies (OCT) be equipped with clear governance, substantial resources and a strong institutional standing. The EESC welcomes the proposed close coordination with the Member States and calls for an additional forum for exchanges with industry, which has the best knowledge of technologies, supply chains and critical dependencies. |
| --- | --- |

1.4.

| 1.5. | The EESC believes that the uptake of OCT results into roadmaps and their translation into flagships must be ensured. The transition between the different phases of the technology and industrial cycle can only be managed successfully if the ownership of an initiative and responsibilities are clear. Coherence and synergies are needed not only horizontally, between civil and defence RTD&I programmes, but also vertically, between RTD&I and deployment programmes. |
| --- | --- |

1.5.

| 1.6. | The EESC believes that simplification and streamlining of EU programmes and instruments in support of RTD&I are fundamental, for the benefit of the recipients themselves. |
| --- | --- |

1.6.

| 1.7. | The EESC proposes the establishment of an online one-stop shop for SMEs and start-ups, an online ‘EU SMEs' corner’, offering the possibility to enter predefined data and receive in return tailor-made information about the best-suited EU programme(s) that can provide support. |
| --- | --- |

1.7.

2.   Background

| 2.1. | The Roadmap on Critical Technologies for Security and Defence responds to the European Council's request of 25-26 February 2021, namely to outline a path towards enhancing research, technology development and innovation, and reducing the EU's strategic dependency in the area of critical technologies and value chains for security and defence. |
| --- | --- |

2.1.

| 2.2. | The update of the new 2020 Industrial Strategy (‘Building a Stronger Single Market for Europe's Recovery’ in May 2021) confirmed that technology leadership remains a key driver of EU competitiveness and innovation, particularly for critical technologies. The Commission's February 2021 Action Plan on Synergies between Civil, Defence and Space Industries recognised the growing importance of disruptive and enabling technologies originating in the civil sector for Europe's security and defence, and the need to promote cross-fertilisation between civil and defence technologies. |
| --- | --- |

2.2.

| 2.3. | Hence the decision to draw up the Roadmap, a strategic document that aims at developing a comprehensive approach towards defence and security technologies, across the civil-military dividing line and combining both EU and national programmes. The Roadmap's objective is to strengthen Europe's technological sovereignty in key strategic sectors by enhancing the coherence of all relevant EU policies and instruments, from Horizon Europe to the European Defence Fund, from the Chips Act (1) to the Data Act (2), from the Foreign Direct Investment Control Regulation (3) to the Foreign Subsidy Control Regulation (4), and from the proposed NIS 2 Directive (5) to the CER Directive (6). The document outlines a wide-ranging conceptual policy framework that touches on several interconnected topics, with the objective of contributing to the EU's ‘strategic compass’ on security and defence (7). It was issued together with a Communication on the Commission's contribution to European defence, which calls for a more integrated and competitive European defence market in a constantly evolving geopolitical and technological context, in particular by strengthening cooperation within the EU, decreasing costs and improving operational effectiveness. |
| --- | --- |

2.3.

| 2.4. | The Roadmap on Critical Security and Defence Technologies outlines a path towards improving the competitiveness and resilience of the EU security and defence sectors based on the following elements: mapping critical technologies and strategic dependencies, monitoring and assessing critical technologies and supply chains, technology gaps and dependencies (through the Observatory on Critical Technologies currently being set up); encouraging dual-use research and innovation at the EU level; inviting the Member States to develop a coordinated EU-wide approach to critical technologies in the context of the strategic compass; supporting innovation and entrepreneurship in security and defence through a range of new tools; and creating, together with the European Defence Agency, an EU Defence Innovation Scheme to bring together their respective efforts under a single ‘umbrella’. |
| --- | --- |

2.4.

| 2.5. | An important aspect of the Roadmap is the goal of reducing identified dependencies in the area of critical technologies and value chains. With this in mind, the Commission proposes integrating defence considerations, where appropriate, into key EU industrial and technology initiatives (e.g. alliances and standards), reporting on the need to carry out risk-assessments on supply chains of critical infrastructure (particularly in the digital sector), and strengthening foreign direct investment screening by encouraging all Member States to establish a national screening mechanism. |
| --- | --- |

2.5.

3.   General comments

| 3.1. | The Roadmap accurately reflects the evolving technology landscape, where critical technologies for security and defence are increasingly driven by innovation from commercial sectors. The EESC welcomes the Commission's intention to develop a comprehensive approach across the civil-military divide, combining the EU and national levels. However, this will be a challenging and complex task, as it implies a general reconfiguration of the current approach. This will not happen overnight, but should be done with high speed. The EESC firmly believes that the Russian invasion of Ukraine must be viewed as a wake-up call to act much faster than usual. |
| --- | --- |

3.1.

| 3.2. | At the same time, the EESC would stress that the Roadmap is a long-term plan and care must be taken not to create a disconnect with Member States' current procurement decisions aimed at closing the most urgent capability gaps as quickly as possible. The EESC strongly believes that national short-term investments must be coordinated at the European level to avoid an extension of fragmentation and duplication, and to ensure that off-the-shelf procurements from third countries do not undermine the EDTIB by stifling ongoing or planned European development projects. |
| --- | --- |

3.2.

| 3.3. | The EESC also takes the view that in order to foster synergies, it is important to look not only at individual technologies and value chains, but also at the ecosystem in which these value chains are embedded. Indeed, technology transfers are most likely to occur (or start) between companies within such an ecosystem. |
| --- | --- |

3.3.

| 3.4. | The attention given in the Roadmap to dual-use technologies and synergies between security, defence and space is important for achieving the EU's aims in these areas. At the same time, dual-use and synergies are neither ends in themselves nor sufficient. The overarching objective of the Roadmap is for the EU to become resilient and able to defend itself also against large-scale attacks (hybrid and military). This means that there is a need to also scale up investment in defence and security and to include in the Roadmap ‘pure’ defence technologies. |
| --- | --- |

3.4.

| 3.5. | The EESC calls upon the EC to make an assessment of the economic and social cost of critical dependencies and the absence of technological sovereignty in defence. |
| --- | --- |

3.5.

4.   Specific comments

| 4.1. | The Observatory of Critical Technologies (OCT) will be the centrepiece of the proposed approach. It will identify, monitor and assess critical technologies, their potential application and related value and supply chains, and monitor technology gaps and root causes of strategic dependencies and vulnerabilities. To fulfil these tasks, the EESC underlines the need to equip the observatory with substantial resources, a strong institutional standing and clear governance. |
| --- | --- |

4.1.

| 4.2. | The EESC believes that it is important to understand how the observatory will be established and how it will operate in practice. To fulfil its remit, the OCT needs to establish objectives, rules and criteria for assessing technologies. To identify critical technologies, it will have to establish close links with capability-needs identification and planning processes, and in order to match capabilities with technologies, it will have to develop a suitable taxonomy that will ideally be applicable to defence, security and space. Here, it is essential that the OCT works closely with the EDA and others. Finally, if it is to identify critical dependencies, the OCT will have to gather a very robust knowledge and understanding of the underpinning value and supply chains. |
| --- | --- |

4.2.

| 4.3. | The plan is to present a classified report to the Member States once every two years. The EESC questions this long interval between reports, given the rapidly evolving technological and industrial environment. The information collected by the observatory will be highly sensitive, as mapping critical dependencies is equivalent to reporting vulnerabilities; hence the need to classify and manage the information properly and ensure that the positions it takes are rapidly adapted to the changing strategic environment. |
| --- | --- |

4.3.

| 4.4. | The Roadmap also envisages the establishment of an expert group with the Member States in the framework of the OCT, in order to exchange information in a classified environment. The EESC strongly advocates also establishing a strong and permanent link with the European defence, security and aerospace industries, which have the best knowledge of supply chains and critical dependencies. Appropriate mechanisms must be found to allow for a trustful exchange of confidential information with industry. |
| --- | --- |

4.4.

| 4.5. | The EESC believes that the uptake of OCT results into roadmaps and their translation into flagships is also crucial. Transitions between the different phases of the technological and industrial cycle can only be managed successfully if the ownership and responsibilities are clear at each stage. Coherence and synergies are therefore needed not only horizontally, between civil and defence RTD&I, but also vertically, between RTD&I and deployment programmes. |
| --- | --- |

4.5.

| 4.6. | To strengthen cybersecurity and cyber defence, the Commission will propose regulatory action on cyber resilience and ask European standardisation organisations to develop harmonised cybersecurity and privacy standards. Together with the Member States, it will also strengthen preparedness for large-scale cyber incidents. The EESC firmly believes that cyber capabilities should be developed not only in a defensive but also in an offensive sense. |
| --- | --- |

4.6.

| 4.7. | The EESC believes that the EU programmes and instruments in support of RTD&I, outlined in Box 2 (on pages 7 and 9) of the Roadmap, are complex and poorly coordinated; therefore, simplification and streamlining are needed for the benefit of the recipients themselves. An online one-stop shop for SMEs and start-ups is proposed. Starting in a pilot phase with defence and security SMEs, this online ‘EU SMEs' corner’ would enable predefined data to be entered and get an initial assessment of the best-suited programme(s) that can provide public support at EU level. |
| --- | --- |

4.7.

| 4.8. | The Roadmap rightly points out that the EU has policy tools beyond its RTD&I programmes and instruments that can contribute to reducing strategic dependencies in the security and defence sectors. The EESC believes that these tools are important for bridging the gap between development and industrialisation, i.e. the market-uptake of RTD&I results. |
| --- | --- |

4.8.

| 4.9. | A major problem is also ensuring that EU Member States buy from European suppliers once the critical technology has been developed and partially financed by EU public support. In the case of a lack of a consistent purchasing policy both at EU and Member States levels, the EESC expresses concern that the European markets, due to their fragmentation and overall small size on a global scale, risk neither being able to reach the needed economy of scale to reduce the costs nor being able to generate sufficient activity to ensure the existence of nascent start-ups. Overall, the combined European market is potentially very large, but spending is uncoordinated (8). |
| --- | --- |

4.9.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A Chips Act for Europe, COM(2022) 45 final, 8 February 2022.

1

(2)  Proposal for a regulation of the European Parliament and of the Council on harmonised rules on fair access to and use of data (Data Act), COM(2022) 68 final, 23 February 2022.

2

(3)  Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (OJ L 79 I, 21.3.2019, p. 1).

3

(4)  Proposal for a regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market, COM(2021) 223 final, 5 May 2021.

4

(5)  Proposal for a directive of the European Parliament and of the Council on measures for a high common level of cybersecurity across the Union, repealing Directive (EU) 2016/1148, 16 December 2020, COM(2020) 823 final.

5

(6)  Proposal for a Directive of the European Parliament and of the Council on the resilience of critical entities, COM(2020) 829 final, 16 December 2020.

6

(7)  Council of the European Union, Brussels, 21 March 2022.

7

(8)  The US spends USD 750 billion a year on defence; China spends between USD 200 and USD 300 billion (sources differ widely), while NATO (limited to European countries, without the UK and Turkey, but with Norway) spends USD 250,7 billion.

8

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/116 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/116

---

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council on European Union geographical indications for wine, spirit drinks and agricultural products, and quality schemes for agricultural products, amending Regulations (EU) No 1308/2013, (EU) 2017/1001 and (EU) 2019/787 and repealing Regulation (EU) No 1151/2012

(COM(2022) 134 final — 2022/0089 (COD))

(2022/C 443/17)

| Rapporteur: | Decebal-Ștefăniță PADURE |
| --- | --- |

Rapporteur:

Decebal-Ștefăniță PADURE

| Referral | European Parliament, 7.4.2022
  Council, 12.4.2022 |
| --- | --- |
| Legal basis | Articles 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 | 30.6.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 203/0/1 |

Referral

European Parliament, 7.4.2022

Council, 12.4.2022

Legal basis

Articles 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

30.6.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

203/0/1

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) welcomes the Commission’s initiative to put forward a proposal for a new regulation that would strengthen the current system for geographical indications (GIs) for agricultural products, spirit drinks and wines. The contribution of GIs to the development of rural areas and the preservation of their community, landscape and cultural heritage is essential and deserves the best and most efficient system possible. This work linked to specific regions, their ‘savoir-faire’, terroir, and culture existed well before an EU legal basis was created for it. It is essential to preserve this system and guarantee the highest protection possible for it. |
| --- | --- |

1.1.

| 1.2. | The EESC would like to underline that GIs are already a well-functioning system that has already gone through a recent revision (2021), with the adoption of the revision of Regulation (EU) 1308/2013 on the common organisation of the markets in agricultural products (CMO) (1). The EESC calls on the European Parliament and the Council to take this into account and to carefully assess and design any modification proposed by the new revision to ensure it genuinely strengthens the system. |
| --- | --- |

1.2.

| 1.3. | The EESC believes that GIs constitute a very particular system that is much more than an intellectual property right and should not be managed as a trademark. For this reason, the EESC calls on the EU institutions to carefully evaluate the need and added value of delegating GI management tasks from DG AGRI to an external agency before taking any decision. It would also be important to assess whether the designated agency possesses the expertise and necessary knowledge to manage the delegated tasks proficiently. DG AGRI should remain the main actor in charge of GI management, while DG GROW should ensure recognition and protection of that system at international level through trade agreements and awareness-raising. |
| --- | --- |

1.3.

| 1.4. | The EESC considers that any delegation of competences should be strictly detailed in the main body of the regulation and should be limited to administrative tasks. Any decision regarding the application, amendments, cancellation or opposition of GIs should remain strictly in the hands of DG AGRI. In addition, the proposal should clarify that GI registration and any other procedure related to GI management should remain strictly free of charge, regardless of which organisation is conducting the process. |
| --- | --- |

1.4.

| 1.5. | The EESC welcomes the possibility of including undertakings on sustainability for GIs. However, it encourages the co-legislators to consult GIs’ producers to evaluate whether to include those undertakings on sustainability directly in the GIs’ specifications or in an ad hoc manner. |
| --- | --- |

1.5.

| 1.6. | The EESC believes that criteria for the recognition of undertakings on sustainability should be directly included in the regulation and not through delegated acts to be adopted at a later stage, in order to provide legal certainty for producer groups willing to adopt such undertakings. |
| --- | --- |

1.6.

| 1.7. | It is of the utmost importance to strengthen and empower producer groups as much as possible. Consequently, the EESC welcomes the suggestion of providing those groups with powers regarding the use of GIs as ingredients and their protection on the Internet. However, producer groups should also be provided with additional means outside the budget of the common agricultural policy to exercise those powers. |
| --- | --- |

1.7.

| 1.8. | Regarding the internal management and composition of producer groups, the EESC calls on the co-legislators to consult GI producer organisations to evaluate this aspect of the proposal. It also calls on them to ensure that small GI producers are not disadvantaged in comparison to large producers within those groups. |
| --- | --- |

1.8.

| 1.9. | The protection of GIs in general is of the utmost importance. In that respect, protection against evocation is also essential and the EESC welcomes any features that could reinforce this protection. However, the EESC is concerned that the inclusion of a detailed definition of evocation could be counterproductive, as it would not be adapted to this practice, which evolves over time. The EESC recommends deleting the definition and instead relying on the European Court of Justice’s case law. |
| --- | --- |

1.9.

| 1.10. | To ensure that consumers buying GI products are fully informed, the EESC recommends using a QR code providing a link to the GI-related information on the eAmbrosia register, as well as the producer website and its producer certificate. |
| --- | --- |

1.10.

| 1.11. | Consumer awareness is essential for the success of GIs. The EESC calls for GIs to be strongly supported by the EU policy to promote agricultural products and for GI producers to benefit from marketing support and expertise provided by the Commission or the Member States. We also believe that the award of additional points in procurement processes for products certified as GIs should be promoted by the Member States. In addition, the EESC recommends that the proposal establish awareness-raising campaigns for the GI system, sending out messages of public interest on public national and EU TV channels. |
| --- | --- |

1.11.

| 1.12. | Lastly, the EESC calls on the co-legislators to include in the regulation measures to promote the GI system among producers and provide them with the expertise and administrative support they need to register their products, along with any other type of assistance needed, especially in regions underrepresented in the GI scheme. |
| --- | --- |

1.12.

2.   Introduction

| 2.1. | Geographical indications (GIs) are a tool making it possible to identify products whose qualities, renown and other intrinsic properties are linked to human and natural elements attached to a specific region. Since 1970 for wine and 1992 for agricultural products and foodstuffs, GIs have been officially recognised and enshrined in EU law (2). |
| --- | --- |

2.1.

| 2.2. | This EU policy has been a true success, increasing producers’ revenue by creating added value for their products (on average, the price of a GI product is 2,11 times the price of a comparable non-GI product), but also boosting the development of the regions and rural communities to which they are attached. GIs have also played an important role in preserving some specific agricultural techniques, plant varieties and ancient animal breeds. They now represent 7 % of EU total agri-food sales and 15,5 % of its total exports (3). |
| --- | --- |

2.2.

| 2.3. | GIs are by nature closely linked to specific regions and their rural communities. Through this privileged connection and their economic added value, GIs do not only contribute to the economic development of those regions and communities, but also contribute to preserving and even strengthening their cultural heritage and identity. |
| --- | --- |

2.3.

| 2.4. | The unbreakable link between a GI and its region also represents a great tool for preventing delocalisation and for preserving jobs in European rural areas. |
| --- | --- |

2.4.

| 2.5. | Due to their very particular form of management through producer groups attached to specific regions, which offers primary producers a degree of control over their distribution, GIs have also demonstrated that they create an upstream value that benefits primary producers. |
| --- | --- |

2.5.

| 2.6. | This anchoring in a region, its people and land is at the heart of GIs and differentiates them from brands that are attached to companies. |
| --- | --- |

2.6.

| 2.7. | In the context of the establishment of the new Common Agricultural Policy finally adopted in 2021 (CAP) and more specifically the revision of the CMO Regulation, several amendments have been made to the GIs system to alleviate the administrative burden for producers and strengthen their control over the GIs they produce while preserving the high level of quality associated with those products. Those modifications have been perceived as extremely positive by the sector. |
| --- | --- |

2.7.

| 2.8. | In the context of its Farm to Fork Strategy, the Commission decided to proceed with a new revision of the GIs system to further improve it and enhance its contribution to sustainability. On 31 March 2022, the European Commission published the proposal for a Regulation on geographical indications for wine, spirit drinks and agricultural products and quality schemes amending Regulations (EU) 1308/2013, (EU) 2017/1001, and (EU) 2019/787 and repealing Regulation (EU) 1151/2012 (4). The announced objectives of the proposal are to further streamline the system, improve GIs protection and controls, empower producer groups and better integrate sustainability. |
| --- | --- |

2.8.

3.   General comments

| 3.1. | The EESC welcomes the Commission’s objectives and believes that it has accurately identified the elements to modify in order to further improve this already well operating system, such as: the simplification and harmonisation of some procedures, the possibility to include voluntary sustainability undertakings in GI production, the empowerment of producer groups through additional rights, the strengthening of GI protection on the Internet or the better enforcement of controls. |
| --- | --- |

3.1.

| 3.2. | Although this proposal supports valid objectives and has accurately identified the elements requiring some adjustments to achieve them, the EESC expresses some concerns regarding some of the proposed modifications for those elements. |
| --- | --- |

3.2.

| 3.3. | The EESC would also like to underline that the GI system is already operating well and has already been improved by the 2021 revision of the CMO. It is thus essential that this new revision be carefully designed to strengthen the system and the recent revision. The EESC believes that EU institutions should be careful to avoid any precipitative action that could result in a revision that contradicts its objectives, thereby weakening this successful policy. |
| --- | --- |

3.3.

| 3.4. | To ensure that this new revision truly strengthens the GI system, the EESC believes that it is of the utmost importance to involve GI producers as much as possible in the process and to listen to their expertise, needs and wishes. |
| --- | --- |

3.4.

4.   Specific comments

| 4.1. | The simplification of the GI registration procedure, aimed at increasing the attractiveness of this scheme to producers, must not result in the loss of the system’s credibility for consumers. GIs’ success has been built on their image of quality and authenticity for consumers. We must be careful not to compromise those elements when simplifying the registration procedure. |
| --- | --- |

4.1.

| 4.2. | The proposal merges all procedures for registration, amendments, cancellation and protection of GIs for agricultural products, wines and spirits. With regard to controls, it merges procedures for agricultural products and spirit drinks, while wine GIs keep their own rules. The EESC welcomes this streamlining of procedures but would like to underline the need not to go further in order to preserve the particularities of each sector. |
| --- | --- |

4.2.

| 4.3. | The EESC welcomes the introduction of the possibility of choosing between lodging an opposition or just a ‘statement of objection’ in the three months following the publication by the Commission of a product’s application. This ‘statement of objection’, which is a comment/remark on the product's application but which does not oppose its registration, will probably alleviate the administrative burden linked with the management of oppositions. |
| --- | --- |

4.3.

| 4.4. | GIs constitute a unique type of intellectual property right extremely different from trademarks due to their intrinsic link to a specific region, its culture, rural communities, landscape and history of agricultural practices. Considering those specificities, we question the Commission proposal to transfer some elements of GI management to the European Union Intellectual Property Office (EUIPO) or any other agency that does not have the technical agricultural knowledge and deep understanding of GIs’ nature that only DG AGRI possesses. In this regard, the need for any delegation of tasks should be demonstrated, as well as the capacity of the agency designated to conduct such tasks. In addition, considering the importance of the link between GIs and agriculture, as well as any political sensitivities relating to their management, the EESC considers that any decision regarding registrations, opposition procedures or amendments should remain strictly in the hands of DG AGRI. |
| --- | --- |

4.4.

| 4.5. | The delegation of tasks to the EUIPO as described in the proposal is vague. Considering the risks associated with the delegation of tasks for the management of GIs to a body with no particular agricultural knowledge, the EESC believes that any delegation should be precisely detailed and circumscribed directly in the regulation and not through delegated acts. |
| --- | --- |

4.5.

| 4.6. | The monitoring of the performances of the EUIPO regarding GI management as laid down in the proposal do not seem sufficient to ensure the proper management of GIs. To ensure the appropriate monitoring, precise evaluation criteria should be laid down directly in the proposal. The EESC also considers that the European Parliament and the Council should be entitled to reattribute the delegated tasks back to DG AGRI in the event that the monitoring reveals shortcomings in the EUIPO's management of tasks. |
| --- | --- |

4.6.

| 4.7. | Considering the importance of GIs in EU trade, DG GROW should include recognition and protection of EU GIs in all trade agreements and promote them at international level. |
| --- | --- |

4.7.

| 4.8. | The proposal introduces the possibility for GI producer groups to integrate sustainability undertakings in GIs requirements. In this regard, the EESC would like to underline that, due to their intrinsic nature rooted within their proximity to a region, its rural community and landscape, GIs already include sustainability elements. In this respect, the EESC appreciates the proposal’s desire to keep the inclusion of additional sustainability undertakings for GIs voluntary. Nevertheless, the possibility for producers to make their products more sustainable certainly represents a good opportunity to further enhance GIs’ contribution to sustainability. |
| --- | --- |

4.8.

| 4.9. | Sustainability is composed of three different pillars: environmental, economic, and social. It is essential to ensure that undertakings on sustainability for GIs reflect each of those three pillars, as GIs can contribute not only to environmental sustainability, but also to economic and social sustainability, due to the employment and added value they create in rural areas. |
| --- | --- |

4.9.

| 4.10. | The proposal suggests integrating undertakings on sustainability directly into the specifications of a GI. This would mean that including or modifying those undertakings on sustainability would be quite complicated and time consuming, as it would require going through the GI amendment procedure. It would also mean that all producers of such GI would have to follow those undertakings on sustainability and could thus not differentiate between themselves on the market based on the sustainability of their products. Market differentiation between producers of the same GI often becomes an issue for large GIs. For these reasons, the EESC considers that the EU institutions should consult GI producers to assess whether the undertakings on sustainability should be directly embedded in a GI’s specification or if it would be more appropriate to include them in an ad hoc scheme. |
| --- | --- |

4.10.

| 4.11. | The EESC considers that the possibility of adopting delegated acts laying down criteria for the recognition of existing sustainability standards at a later stage places producers in a situation of uncertainty that could discourage them from adopting undertakings on sustainability for GIs. |
| --- | --- |

4.11.

| 4.12. | The role of GIs producer groups, which have to manage and develop their own geographical indications in order to protect the product, their image and consumers, must not be weakened, but strengthened. |
| --- | --- |

4.12.

| 4.13. | The involvement of public officials and consumer organisations into the internal functioning of producer groups as laid down in the proposal might further complicate the work of those groups. |
| --- | --- |

4.13.

| 4.14. | Considering that the GIs system should remain a mean of protecting farmers, the recognition of producer groups as proposed in Article 33(2) should only be based on the proportion of producers represented and not the proportion of the quantity of the GI produced by the producer groups. If this is not the case, then EU institutions should include in the proposal tools that would make it possible to prevent cases of a minority of large producers of a GI from blocking decisions that are supported by a large majority of producers of that same GI. |
| --- | --- |

4.14.

| 4.15. | The reason for the creation of a division between two different types of producer groups put forward in the proposal is not extremely clear. The EESC wonders if it might not further complicate the management of GIs rather than improve it. |
| --- | --- |

4.15.

| 4.16. | The proposal defines ‘producer group’ as ‘any association, irrespective of its legal form, mainly composed of producers or processors of the same product’. This definition does not include producers of raw materials. Considering the essential role played by producers of raw materials in Protected Designations of Origin (PDOs), it might be appropriate to request their inclusion in the ‘recognised producer groups’ for PDOs. |
| --- | --- |

4.16.

| 4.17. | The EESC welcomes the Commission proposal to provide producer groups with some control over the use of a GI used as an ingredient in a product in the food name and marketing of the related processed product. This would strengthen the ability of producer groups to control the high-quality image of their product. |
| --- | --- |

4.17.

| 4.18. | GIs, due to their added value, are particularly subject to fraud practices. The EESC considers it essential to strengthen their protection and improve controls. The proposal includes some interesting elements regarding this aspect such as: the improved collaboration and exchange of information and mutual assistance between Member States as well as with the Commission, the establishment of a certification for GIs producers, or the possibility of revoking or transferring a domain name. Some other proposals more specific to protection of GIs on the internet seem to be lacking ambition or the required tools to enforce such protection. The EESC underlines that producers should be given the right to defend their products, but in no case should they be considered responsible for doing so. The responsibility of protecting GIs should continue to lie with the Commission and the Member States, who should make all the necessary efforts to secure this protection. |
| --- | --- |

4.18.

| 4.19. | The EESC considers extremely important to protect GIs against the fraudulent practice of evocation. This protection was already included in the legislation regulating the GIs system. The proposal adds a definition of evocation. The Committee believes that providing a very precise definition of evocation risks weakening the protection against such practices as they evolve over time. The EESC recommends deleting the definition and instead relying on the European Court of Justice’s case law. |
| --- | --- |

4.19.

| 4.20. | There are now more than 3 300 registered GIs. However, around 80 % of those GIs are located in only six EU Member States (5). This clearly illustrates the under-representation of many EU Member States within the GI system. Furthermore, there is a risk that this gap will widen as Member States with many GIs acquire expertise in their practical and administrative management that can benefit new producers looking to register their products, while producers in other Member States feel ill-equipped to undertake the registration of their products. The EESC regrets that the proposal does not provide measures to facilitate and support the registration of GIs for newcomers and promote this system to them. |
| --- | --- |

4.20.

| 4.21. | The Commission evaluation published in 2021 underlines the fact that GIs still suffer from a lack of consumer awareness in some countries (6). In this respect, marketing and promotion campaigns are essential, as demonstrated by the impact of the EU promotion campaigns for GIs. The EESC considers that the revision of the system should include tools to support promoting and raising awareness of GIs. |
| --- | --- |

4.21.

| 4.22. | The proposal introduces the creation of certificates for producers complying with GI specifications. The EESC considers that, if carefully designed and well managed, such certificates could ease trade, while maintaining a high level of protection against fraud. A QR code on GI products could also provide direct access to this certificate. |
| --- | --- |

4.22.

5.   Final remark

| 5.1. | The GI system has been an extremely successful EU policy which has made it possible to preserve unique ‘know how’ and cultural heritage while increasing producers’ income and reviving rural areas. As stated in the Commission evaluation published in 2021 (7), this policy is relatively efficient, while the amendments introduced by the new CMO Regulation further strengthened the policy. The new revision as laid down in the Commission proposal suggests some additional modifications that could potentially further increase the policy’s efficiency. Nevertheless, other modifications proposed require some clarification, while others such as the involvement of EUIPO probably risk complicating procedures or weakening the intrinsic nature of the GIs system that has been at the heart of its success. DG AGRI should remain the main actor in charge of GI management, while DG GROW should ensure recognition and protection of that system at international level through trade agreements and awareness-raising. |
| --- | --- |

5.1.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Regulation (EU) 2021/2117 of the European Parliament and of the Council of 2 December 2021 amending Regulations (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products, (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs, (EU) No 251/2014 on the definition, description, presentation, labelling and the protection of geographical indications of aromatised wine products and (EU) No 228/2013 laying down specific measures for agriculture in the outermost regions of the Union (OJ L 435, 6.12.2021, p. 262).

1

(2)  https://ec.europa.eu/info/food-farming-fisheries/food-safety-and-quality/certification/quality-labels/geographical-indications-register/

2

(3)  https://op.europa.eu/en/publication-detail/-/publication/c1d86ba1-7b09-11eb-9ac9-01aa75ed71a1

3

(4)  COM(2022) 134 final.

4

(5)  https://op.europa.eu/en/publication-detail/-/publication/c1d86ba1-7b09-11eb-9ac9-01aa75ed71a1/language-en

5

(6)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2021:427:FIN

6

(7)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2021:427:FIN

7

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/123 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/123

---

Opinion of the European Economic and Social Committee on the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: On making sustainable products the norm

(COM(2022) 140 final)

and on the proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC

(COM(2022) 142 final — 2022/0095(COD))

(2022/C 443/18)

| Rapporteur: | Thomas WAGNSONNER |
| --- | --- |

Rapporteur:

Thomas WAGNSONNER

| Referral | European Commission, 16.5.2022
  European Parliament, 2.5.2022
  Council, 10.6.2022 |
| --- | --- |
| Legal basis | Articles 192 (1) and 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Agriculture, Rural Development and the Environment |
| Adopted in section | 30.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 205/1/4 |

Referral

European Commission, 16.5.2022

European Parliament, 2.5.2022

Council, 10.6.2022

Legal basis

Articles 192 (1) and 304 of the Treaty on the Functioning of the European Union

Section responsible

Section for Agriculture, Rural Development and the Environment

Adopted in section

30.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

205/1/4

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) welcomes the proposals under the Circular Economy Action Plan and, in this opinion, specifically supports efforts to make products more sustainable. It also regards the harmonised legal approach as essential. At the same time, it notes that the proposed new Ecodesign Regulation is still vague for the most part, because of the large number of delegated acts. Furthermore, given the need to reduce resource consumption and protect the climate, the EESC proposes faster and more ambitious implementation. |
| --- | --- |

1.1.

| 1.2. | The EESC draws particular attention to the fact that the circular economy approach can only succeed if all economic operators — producers, consumers and workers — and authorities are properly involved and informed. To ensure successful implementation, clear, sound and consistent rules are needed in order to give sustainable products a fair competitive opportunity. |
| --- | --- |

1.2.

| 1.3. | The new elements of the Regulation are welcome, such as the extended scope, the new ecodesign requirements (durability, reparability, recycling, environmental impact, CO2 emissions, etc.) and the information requirements of the digital product passport and labels, emphasising the importance of correct and relevant information, especially for consumers. |
| --- | --- |

1.3.

| 1.4. | The EESC supports the ban on destroying unsold goods — understood as new, returned or repairable goods. It also welcomes the fact that, together with the circular package, the Regulation tackles existing issues, such as greenwashing and obsolescence. |
| --- | --- |

1.4.

| 1.5. | The Ecodesign Forum is a supporting body with a number of tasks relating to implementation. All stakeholders and civil society representatives, including social partners, should be given the opportunity to put forward ideas and suggestions to improve the process. |
| --- | --- |

1.5.

| 1.6. | The EESC is aware of the challenges facing producers and businesses, especially small and medium-sized enterprises (SMEs), but unnecessary red tape should be avoided. It also sees an opportunity to create a new European production standard — Made in Europe — with sustainable product standards. |
| --- | --- |

1.6.

| 1.7. | The tools for the declaration of conformity and self-regulation provide scope for entrepreneurship. Efficient and coordinated controls between Member States, with good consumer information, builds trust in a successful transition from a linear to a circular economy. |
| --- | --- |

1.7.

| 1.8. | Regrettably, the EESC must note that the Regulation overlooks the social dimension. A reference to the Commission's proposed Directive on Corporate Sustainability Due Diligence seems insufficient. |
| --- | --- |

1.8.

2.   Background to the opinion

| 2.1. | The linear economic system asks too much of the world's resources. More than half a trillion tonnes of new resources were consumed between the UN climate conferences in Paris and Glasgow. The Circularity Gap Report 2022 (1) states that, globally, only 8,6 % of what is used is recycled. In other words, there is a circularity cap of more than 90 %. The circular economy can make an effective contribution to reducing resource consumption. |
| --- | --- |

2.1.

| 2.2. | The need to conserve resources has been recognised in Europe. The European Commission has put forward the Green Deal, the EU's growth strategy for a fair and prosperous society with a modern, resource-efficient and competitive economy. The need for action has become more acute with the supply chain problems caused by the pandemic and Russia's invasion of Ukraine. Businesses and consumers are experiencing shortages and price hikes across a wide range of areas. |
| --- | --- |

2.2.

| 2.3. | As a practical step, the European Commission put forward the following initiatives in late March as part of the Circular Economy Action Plan:






  — | Commission Communication on making sustainable products the norm |
| --- | --- | --- |

2.3.

—

Commission Communication on making sustainable products the norm

| — | Proposal for a Regulation on ecodesign for sustainable products |
| --- | --- |

—

Proposal for a Regulation on ecodesign for sustainable products

| — | Ecodesign and Energy Labelling Working Plan 2022-2024 |
| --- | --- |

—

Ecodesign and Energy Labelling Working Plan 2022-2024

| — | EU strategy for sustainable and circular textiles |
| --- | --- |

—

EU strategy for sustainable and circular textiles

| — | Proposal for a revised Construction Products Regulation |
| --- | --- |

—

Proposal for a revised Construction Products Regulation

| — | Proposal on empowering consumers for the green transition |
| --- | --- |

—

Proposal on empowering consumers for the green transition

| 2.4. | This opinion looks at the communication on making sustainable products the norm (COM(2022) 140 final) and the proposal for a Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements for sustainable products and repealing Directive 2009/125/EC (COM(2022) 142 final — 2022/0095 (COD)). |
| --- | --- |

2.4.

| 2.5. | The Communication highlights the need to rethink the prevailing linear economic model and move towards a circular economy. A harmonised approach across Europe will boost competitiveness, create jobs and offer sustainable products to consumers. This calls for a new approach to the production of goods, moving beyond the current minimum requirements (REACH, energy labelling, packaging, etc.). |
| --- | --- |

2.5.

| 2.6. | The scope of the new Ecodesign Regulation will be greatly enhanced and its sector-specific initiatives for textiles, construction products, etc. will help preserve resources and boost energy efficiency. In particular, the new provisions to extend product lifespans (durability, reparability, better recycling, etc.) and improve product information through the digital product passport will require businesses to set out the qualities and life-cycle impact of their products in a transparent way. Consumers will have the opportunity to compare and thus assess products that meet European sustainability standards. |
| --- | --- |

2.6.

| 2.7. | The product requirements of the Ecodesign Regulation are backed up by other supporting measures. Mandatory information on product and environmental benefits, as well as information on repair, durability and the ban on greenwashing, will strengthen the position and trust of consumers. Product checks by authorities and transparent monitoring of compliance with product criteria provide consumers with the certainty of being able to choose from among high-quality products, and thus guarantee a level playing field for economic operators. |
| --- | --- |

2.7.

3.   General comments

| 3.1. | In principle, the EESC supports the objectives of the circular economy and the sustainable products initiative, as, in this case, sustainability entails combining environmental, economic and social aspects. This means that all economic operators must meet the necessary, new and exacting requirements. Businesses are required to gear their production and product design towards sustainability and to provide information about it. Consumers must have an understanding of this and take the ‘right’ decision responsibly on the basis of information. Relevant awareness-raising campaigns are needed. Effective oversight is essential to ensure that the targets are met and not undermined, as this would harm Europe's position or promote ‘green scepticism’. The goal is rather to have good jobs, better development, a holistic view and informed consumers and customers. |
| --- | --- |

3.1.

| 3.2. | This Regulation and the circular economy set new standards. In order for these requirements to be adopted and fulfilled, and for them to lead to an economic circular process, the task is to involve economic operators — consumers, manufacturers, businesses, trade unions and research organisations — in a resolute and proactive way. It will be helpful to provide relevant information on the opportunities and objectives and to engage stakeholders in a timely manner. |
| --- | --- |

3.2.

| 3.3. | The EESC supports the harmonised approach of the Regulation and delegated acts in order to avoid fragmentation and to be able to address the specific features of products, consumer affordability and competition. Sustainable products represent a European opportunity for businesses, innovation and jobs and take into account consumer desires for environmental protection and long product lifespan. |
| --- | --- |

3.3.

| 3.4. | Extending the scope to include more products and higher requirements is welcome. The EESC notes that it will mean changes for manufacturing companies, for example with the digital product passport, rules on unsold goods and product-specific rules, but this is necessary in order to build the circular economy. At the same time, it will establish a new ‘Made in Europe’ standard and create economic opportunities in the fields of design, disposal and repair. |
| --- | --- |

3.4.

| 3.5. | The EESC underlines the need to ensure consistency across all relevant areas of legislation. This includes consistency under the Action Plan in terms of time and content, so as not to diminish effectiveness through segmented legislation and divergent approaches across Member States. However, it is equally important to ensure consistency with other key supporting areas of legislation, such as the recent European Commission Directive on Corporate Sustainability Due Diligence, the rules on waste which are important for circularity, including export measures, the Market Surveillance Regulation, etc. |
| --- | --- |

3.5.

| 3.6. | The EESC recognises the need to adopt delegated acts and, given that such acts still leave much undecided, asks the European Commission for a more detailed action plan to accompany them. This is to ensure that a large number of products are covered by the delegated acts. At the same time, civil society organisations and trade unions should be involved at an early stage. |
| --- | --- |

3.6.

| 3.7. | The EESC notes that the Ecodesign Regulation is a very complex piece of legislation that will alter the economic model. The Committee believes that the Regulation should be implemented rapidly but also properly. Adequate human resources are therefore needed to implement the delegated acts. Since there will also be new requirements for consumers, businesses, repairers and oversight authorities, the Committee also believes that all economic operators should be properly involved in the information process. |
| --- | --- |

3.7.

| 3.8. | Public bodies should be at the forefront of green procurement in their public procurement processes. However, a greater impact could also be achieved by making green procurement a condition in funding guidelines for support or subsidies, such as the various EU investment programmes for businesses or third parties. |
| --- | --- |

3.8.

| 3.9. | The EESC notes that ecodesign requirements should benefit consumers and that this should be clear and easy to identify. The broader requirements under the new Ecodesign Regulation may make products more expensive to buy, but this should be viewed against the cost savings arising from better performance, durability, upgradability and reparability, as well as higher end-of-life value. Appliances that are more energy-efficient can save energy and money. Durable products are also more economical. With the new proposed directive, consumers could save an average of EUR 285 (2) per year. The Regulation emphasises affordability, but this provision should take account of different household budgets so that ecodesign is not exclusive. It is therefore all the more important to provide consumers with financial support to first buy sustainable products and then to repair them. |
| --- | --- |

3.9.

3.10.   Environmental aspects

| 3.10.1. | Ecodesign is an appeal to think in a circular way. The EESC underlines this point particularly in connection with:






  — | Regulation and control measures: mitigations/exemptions in delegated acts or in the case of voluntary self-commitments would undermine targets, as would possibilities for circumvention and loopholes in control. Ecodesign, performance and information requirements, including product parameters, should be consistent at the required level. |
| --- | --- | --- |

3.10.1.

—

Regulation and control measures: mitigations/exemptions in delegated acts or in the case of voluntary self-commitments would undermine targets, as would possibilities for circumvention and loopholes in control. Ecodesign, performance and information requirements, including product parameters, should be consistent at the required level.

| — | Businesses, which are supposed to consider, during the design process, the environmental impact throughout the product life cycle, long-term use of the product, easy maintenance and repair, or which successor product can be made from it. Product standardisation should also be looked at once again. Examples include the different dimensions of tyres or charging cables. |
| --- | --- |

—

Businesses, which are supposed to consider, during the design process, the environmental impact throughout the product life cycle, long-term use of the product, easy maintenance and repair, or which successor product can be made from it. Product standardisation should also be looked at once again. Examples include the different dimensions of tyres or charging cables.

| — | Consumers, who should receive key information on environmental impact, lifespan, repair, subsequent use and disposal when making a purchase decision. |
| --- | --- |

—

Consumers, who should receive key information on environmental impact, lifespan, repair, subsequent use and disposal when making a purchase decision.

| 3.10.2. | Recycling is the next resource-efficient element of the Regulation after long-term use and re-use. The aim is to increase the recycled content of products, their recyclability and the value of the recycling and repair sectors. The EESC supports the objective, but points out that some technical, legal and conceptual obstacles remain.
  Thinking in the material cycle shows the enormous need for change. By way of example, higher recycling rates should go together with minimum quotas for use of recycled material, or the theoretical recyclability (3) of products should be consistent with the technical feasibility of recycling and the practical implementation of recycling measures. In the plastics sector, for example, many changes are needed in design and production before secondary raw materials are treated differently from primary raw materials (4).
  Recycling is also an opportunity for Europe. For example, high-quality metallic minerals are imported as raw materials or products and then, after use, are disposed of or re-dispatched into the world almost for free; this particularly includes cars and electronic scrap. These should be regarded as reusable materials and treated as such. Dismantling, processing and recycling benefit the climate, but also create significant added value and jobs (5). In all of this, it is also crucial to keep the economic, environmental and social balance in mind. |
| --- | --- |

3.10.2.

Thinking in the material cycle shows the enormous need for change. By way of example, higher recycling rates should go together with minimum quotas for use of recycled material, or the theoretical recyclability (3) of products should be consistent with the technical feasibility of recycling and the practical implementation of recycling measures. In the plastics sector, for example, many changes are needed in design and production before secondary raw materials are treated differently from primary raw materials (4).

Recycling is also an opportunity for Europe. For example, high-quality metallic minerals are imported as raw materials or products and then, after use, are disposed of or re-dispatched into the world almost for free; this particularly includes cars and electronic scrap. These should be regarded as reusable materials and treated as such. Dismantling, processing and recycling benefit the climate, but also create significant added value and jobs (5). In all of this, it is also crucial to keep the economic, environmental and social balance in mind.

| 3.10.3. | The EESC welcomes the proposal to deal with unsold goods, but a more ambitious approach is possible. The destruction of products that remain intact, including new, returned and repairable products, is undesirable for society because it is tantamount to wasting resources. For the EESC, the Commission proposal to initially encourage only documentation by businesses while exempting small and medium-sized enterprises (SMEs) does not go far enough. The mere possibility of effecting stronger measures through delegated acts casts doubt on whether the objectives will actually be achieved. The EESC supports a ban on destroying unsold products, provided they are not dangerous. Businesses and retail platforms should also be asked to work on business practices that significantly reduce the number of returned products and unsold stocks. At the same time, consumers should be made aware of the environmental impact of returning goods. |
| --- | --- |

3.10.3.

3.11.   Economic aspects

| 3.11.1. | The EESC points out that the proposed Regulation is in principle welcome from the point of view of SMEs, but is also viewed with scepticism. SMEs have only limited (human) resources at their disposal. In particular, the support measures referred to in the Regulation should be geared to the needs and requirements of SMEs. Furthermore, SMEs are having difficulties in accessing the required public procurement procedures. Solutions should therefore be sought to enable them to participate in these procedures. Finally, from an SME perspective, it is necessary to ensure complementarity between the sustainable product regulation and product-specific rules. This is to avoid duplication of costs and administrative burden. |
| --- | --- |

3.11.1.

| 3.11.2. | Repairers have a key role in ensuring that products last. It should therefore be made easier for repairers, socio-economic businesses specialising in re-use and civil society/local repair initiatives to take up their place in this circular model. In Germany and Austria, for example, it has proven worthwhile for repair initiatives to take out repair insurance, which at the same time entitles them to carry out repairs. |
| --- | --- |

3.11.2.

| 3.12. | New circular business models (6) are identified as an important tool in the Communication. These must be attractive, appealing and act as an incentive for businesses and consumers, and ensure decent working conditions. Models of this kind already exist in practice, such as the sharing economy, product-as-a-service and pay-per-use. The EESC suggests encouraging use of the existing best practice platforms and adapting them to the current challenges of the circular economy. Currently listed examples include Baukarussell — materials are offered to new users following demolition or conversion works — and repair networks that bring together consumers and repairers. However, it should be noted that many databases are not so attractive for contributors and users. |
| --- | --- |

3.12.

| 3.13. | The EESC points to the need to raise consumer awareness of sustainable action and to continue using products until their end of their lifespan. Academic studies (7) show that products that are still operative but no longer used (e.g. laptops, mobile phones, toasters, etc.) are stored in households for up to six years. Consumers therefore need relevant incentives to ensure that items they no longer use remain in circulation. |
| --- | --- |

3.13.

3.14.   Social aspects

| 3.14.1. | Regrettably, the EESC must note that the Regulation overlooks the social dimension. A reference to the Commission's proposed Directive on Corporate Sustainability Due Diligence (8) seems insufficient, as this Directive clearly prioritises a process-oriented approach to global value chains, and product-specific social issues are not sufficiently covered. The EESC stresses that, from the point of view of sustainability, all three dimensions — economic, social and environmental sustainability — must always be dealt with in tandem and therefore calls on the Commission to re-examine the Regulation to see whether it would make sense to include product-specific social aspects as well. |
| --- | --- |

3.14.1.

| 3.14.2. | The EESC points out that green jobs are not automatically sustainable jobs, unless all the Sustainable Development Goals (SDGs) are taken into account. Compliance with labour standards must be ensured, particularly for reasons of competition. |
| --- | --- |

3.14.2.

| 3.14.3. | A project by the European social partners (9) has looked into the impact of the circular economy on employment and working conditions. The transition to a circular economy could create between 250 000 and 700 000 jobs by 2030. The impact varies considerably across sectors and regions. The waste and repair sectors will benefit more than average, whereas the mining and chemical sectors will be negatively affected. A well-trained workforce will also be needed (e.g. waste management). In general, care must be taken to ensure that good jobs are available and decent wages are paid. The EESC finds it regrettable that the Commission does not currently provide for social dialogue to look into the consequences for workers of the transition to the circular economy. |
| --- | --- |

3.14.3.

4.   Specific comments

4.1.   Information in the DPP, labels and Ecolabels

| 4.1.1. | The EESC welcomes access to comprehensive product information in the digital product passport (DPP). The information should be targeted and accessible to all actors along the supply chain in a user-friendly way. The content should provide consumers with a circular decision-making basis for purchases, re-use, repair and disposal. This includes the CO2 content of the product, the proportion of rare earths, hazardous components, non-recyclable materials, the list of repairable parts and their availability or, in the case of software, compatibility and costs. The option to include information on other sustainability aspects in the DPP is welcome (10). The Committee suggests that the DPP be accompanied by a repair score containing information on reparability, particularly of important wear parts, the price of spare parts and how long they are available for, as well as information on the working conditions under which the products were manufactured. The essential information should also be made available to consumers in physical form, such as the guarantee and the carbon content of the product. |
| --- | --- |

4.1.1.

The DPP should not be a tool that requires businesses to use additional resources (data collection), but rather one that incorporates existing systems. However, the requirement to provide increasingly transparent but at the same time sensitive data may also require a review of the consistency of the decision on industrial property rights.

4.1.2.   Labels

Labels are intended to provide consumers with the product information that is still to be specified in the delegated acts. The EESC stresses that customers should be provided with correct, visible and clear information, with data on climate impact, content and composition, compliance with labour standards, durability and reparability being essential.

4.1.3.   Ecolabels

Many products and services are certified with the European Ecolabel by means of an expert opinion. The aim is to make it easy for consumers to tell if a product or service is environmentally friendly, durable and of high quality, and to enable comparison with other products and services. At most, however, the Ecolabel requirements can complement, but not replace, product rules based on the Ecodesign Regulation, with the checks by authorities under the Ecodesign Regulation also having to cover the information on Ecolabels.

4.2.   Online marketplaces

A level playing field for all economic operators is important and therefore liability rules for online marketplaces should apply particularly in cases where no other actor in the supply chain takes action against a non-compliant product (11).

| 4.3. | Market surveillance — checks, bans and fines — is entrusted to the Member States and information on infringements is published in the ICSMS (Information and Communication System for Market Surveillance), a European reporting and information system for products found to be non-compliant or dangerous. The Committee supports the proposal to extend and improve market surveillance, as between 10 % and 25 % of products surveyed do not comply with the Ecodesign Directive (12). In order to enable Member States to carry out their tasks, market surveillance needs to be equipped with the right resources. Particularly with regard to infringements, it should be ensured that any non-compliance of products is properly followed up by market surveillance authorities. Unfortunately, there are repeated negative examples of the conformity assessment procedure being circumvented, as in the recent case of masks to protect against COVID-19. Spot checks should always be carried out by the authorities. Consumer organisations should also play a part as infringement whistleblowers. This should take place quickly and efficiently, complementing the Directive on representative actions for the protection of the collective interests of consumers. Effective market surveillance across all Member States requires the European Commission to play a very active role in this area, so that all businesses in the European Economic Area enjoy a level playing field based on equally robust checks. In addition, attention is drawn to the scope for improvement in the user-friendliness and information of the ICSMS homepage. |
| --- | --- |

4.3.

| 4.4. | The Ecodesign Forum and the involvement of all stakeholders in this process is to be welcomed, but care must be taken to ensure that it works effectively and that responsibility, skills and resources for the mentioned tasks are ensured. For example, the Forum cannot evaluate self-regulation measures. This is a task for the authorities or the European Commission. |
| --- | --- |

4.4.

| 4.5. | Self-regulation measures, as an alternative instrument to a delegated act for a product group, should be the exception. If applied, these measures should be close to delegated acts in terms of criteria for clarity, market coverage and quality. |
| --- | --- |

4.5.

| 4.6. | The EESC would specifically like to refer to the European Circular Economy Stakeholder Platform (13) in the context of this opinion. Launched jointly by the EESC and the European Commission in March 2017, the initiative supports new partnerships and the further development of circular economy solutions across Europe. It is also intended to highlight the important contribution that the circular economy can make to the implementation of the UN Sustainable Development Goals. |
| --- | --- |

4.6.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Circle Economy: The Circularity Gap Report 2022, Project Platform for Accelerating the Circular Economy (PACE).

1

(2)  https://ec.europa.eu/info/energy-climate-change-environment/standards-tools-and-labels/products-labelling-rules-and-requirements/energy-label-and-ecodesign/about_en#Energysavings

2

(3)  Pomberger, R. (2020). Über theoretische, praktische und reale Recyclingfähigkeit, https://doi.org/10.1007/s00506-020-00721-5, https://doi.org/10.1007/s00506-019-00648-6

3

Über theoretische, praktische und reale Recyclingfähigkeit,

(4)  Communication on A European Strategy for Plastics in a Circular Economy, COM(2018) 28 final.

4

A European Strategy for Plastics in a Circular Economy

(5)  OJ C 220, 9.6.2021, p. 118.

5

(6)  See INT/778 on Innovation as a driver of new business models (exploratory opinion) (OJ C 303, 19.8.2016, p. 28).

6

Innovation as a driver of new business models

(7)  Public hearing, NAT/851, presentation by Gudrun Obersteiner, 29.4.2022.

7

(8)  COM(2022) 71 final.

8

(9)  https://www.etuc.org/en/publication/european-social-partners-project-circular-economy-and-world-work-0

9

(10)  COM(2022) 142 final — 2022/0095(COD), p. 29, point 26.

10

(11)  Remark: INT/957 Product Safety Directive/revision (OJ C 105, 4.3.2022, p. 99) already addresses important aspects of product safety.

11

Product Safety Directive/revision

(12)  J. Bürger/G. Paulinger, Vienna Chamber of Labour (2022) https://emedien.arbeiterkammer.at/viewer/resolver?urn=urn:nbn:at:at-akw:g-5230098, p. 88.

12

(13)  https://circulareconomy.europa.eu/platform/

13

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/130 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/130

---

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) and Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste

(COM(2022) 156 final — 2022/0104 (COD))

and on the proposal for a Regulation of the European Parliament and of the Council on reporting of environmental data from industrial installations and establishing an Industrial Emissions Portal

(COM(2022) 157 final — 2022/0105 (COD))

(2022/C 443/19)

| Rapporteur: | Stoyan TCHOUKANOV |
| --- | --- |

Rapporteur:

Stoyan TCHOUKANOV

| Referrals | European Parliament, 2.5.2022 (for COM(2022) 156 final)
  European Parliament, 5.5.2022 (for COM(2022) 157 final)
  Council, 10.5.2022 |
| --- | --- |
| Legal basis | Articles 192 (1) and 304 of the Treaty on the Functioning of the European Union |
| Section responsible | Section for Agriculture, Rural Development and the Environment |
| Adopted in section | 30.6.2022 |
| Adopted at plenary | 14.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 183/3/1 |

Referrals

European Parliament, 2.5.2022 (for COM(2022) 156 final)

European Parliament, 5.5.2022 (for COM(2022) 157 final)

Council, 10.5.2022

Legal basis

Articles 192 (1) and 304 of the Treaty on the Functioning of the European Union

Section responsible

Section for Agriculture, Rural Development and the Environment

Adopted in section

30.6.2022

Adopted at plenary

14.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

183/3/1

1.   Conclusions and recommendations

| 1.1. | The European Economic and Social Committee (EESC) strongly supports a combined approach and policy consistency to protect ecosystems and human health from the adverse effects of pollution while delivering co-benefits for EU citizens and industry. The EESC therefore welcomes the proposal for revision of the Industrial Emissions Directive (IED) (1) and of the Regulation on the European Pollutant Release and Transfer Register (E-PRTR). |
| --- | --- |

1.1.

| 1.2. | The EESC believes that the next 10 years will be critical for the EU Green Deal 2050 ambitions for zero pollution and toxic-free environment and now, more than ever, we need flexibility and clarity in the regulatory process. |
| --- | --- |

1.2.

Related to IED:

| 1.3. | The revised Article 15(3) proposes as a new default, that permit writers should set the ‘strictest possible emission limit values that are consistent with the lowest emissions achievable by applying BAT [Best Available Techniques] in the installation’. The EESC finds that this clarification is welcome and consistent with the IED to prevent pollution at source. At permitting, the exact scope and perimeters of the technology has to be taken into account in order to use the relevant BAT-comparison. |
| --- | --- |

1.3.

| 1.4. | The EESC stresses a need for the following clarification points: on what basis and feasibility criteria would the feasibility analysis of the operator be made? Will it include, beyond the Joint Research Centre (JRC) Reference Report on BAT reference documents (BREFs), other technique providers, NGOs and the public concerned to validate that analysis? What is the role of the permitting authority? |
| --- | --- |

1.4.

| 1.5. | The EESC believes that the following improvements could be made to make the provisions more effective: a link to the criteria for determining BAT (current Annex III) so that operators have the opportunity to justify relevant cross-media effect that may hamper the achievement of the proposed BAT-AELs. The proposal should set a maximum derogation validity e.g. [3] / [4] years so as not to provide an undue competitive advantage for operators making repetitive/time extensive use of derogations. A pre-consultation with at least three independent technique providers would enable the considerations of different industry interests' viewpoints. Clearer conditions should be set e.g. a full impact assessment against the options proposed for maximum compatibility with the strictest BAT, including compliance with Environmental Quality Standard (EQS) and the compatibility of that assessment with the zero pollution ambition. |
| --- | --- |

1.5.

| 1.6. | The EESC strongly recommends to closely follow the Green Deal goals, while setting headline indicators with regard to the various media objectives. |
| --- | --- |

1.6.

| 1.7. | The EESC agrees with the European Court of Auditors that the polluter pays principle should be given clear meaning. Besides the monetised economic costs vs. societal benefits ratios, for the sake of transparency and completeness, societal costs vs. societal and environmental benefits indicators should also be analysed. Environmental benefits should include health and climate protection benefits; the damage cost method should only use the more protective methods e.g. the European Environmental Agency (EEA) Value of Statistical Life method adapted to OECD/US price levels. |
| --- | --- |

1.7.

| 1.8. | The EESC finds that the challenge to overcome is not the identification of breakthrough techniques (innovation), but rather its deployment at an industrial scale. A key barrier may link to the failure of internalisation of external costs. The generated funds from applying the damage cost levels could be re-channelled into an ‘EU Depollution and industry transformation fund’ or other existing funds like the modernisation and innovation funds. Operators should then be able to apply for the use of those funds in a competitive bidding process in order to provide for incentives for the transformation needed for delivering on the EU Green Deal. Due care is to be provided that the re-conversion and transformation support local and sustainable economic re-development, fully consistent with a socially acceptable ‘just transition’. Support should be provided for industries and services that really contribute to the EU Green Deal goals. Special attention needs to be paid to the fact that any fund generated to support transition must be managed at EU level, avoiding any potential State Aid schemes, and fostering a harmonised pan-European scheme that will meet the EU single market principle. |
| --- | --- |

1.8.

| 1.9. | The EESC finds that climate protection is important, and that the framework provides for a combined approach of the various instruments at hand. Taking pollution prevention measures should not depend on whether there is a business case for climate protection. The EESC strongly supports a combined approach, and policy consistency delivering co-benefits. Article 9(1) restricts Member States in setting further measures on operators subject to the EU ETS trading scheme, and its deletion is therefore preferred. By deleting this provision, the industry will not immediately be subject to greenhouse gas emission limit values (GHG ELVs). |
| --- | --- |

1.9.

| 1.10. | The EESC believes that the update of the European Safety Net, to align with up-to-date state-of-the-art BAT standards could considerably improve the effectiveness of BAT uptake and public benefits, notably for large combustion plants. |
| --- | --- |

1.10.

| 1.11. | The EESC also stresses the need to improve the level playing field –for waste incineration compliance with the ELV shall be ensured during the effective operating time (EOT), for operators of Large Combustion Plants (LCP) they may disregard emissions occurring during start up and shut down. The EESC finds the possible operation in breakdown of abatement unacceptable. |
| --- | --- |

1.11.

| 1.12. | In order to ensure that the Directive is implemented in a proportionate and cost-effective manner, the EESC strongly recommends that the scope of the Directive is adapted with the Livestock unit per hectare density base in the case of livestock extensive farming. Free-range animal husbandry should be adequately taken into account. |
| --- | --- |

1.12.

| 1.13. | Some opportunities for improving the compliance assessment are proposed. However, details will be set out in an implementing act to be adopted only two years after the entry into force of the new Directive. The EESC believes this is far too late, and provisions should already be set that require minimal calibration frequencies for monitoring devices and requirements as to measurement uncertainty levels to not exceed those that are aligned to levels attained by state-of-the-art measurement equipment. |
| --- | --- |

1.13.

| 1.14. | The EESC sees some merit in promoting more than incremental improvements at installation level only, when a faster and deeper transition of production methods is desired. The following activities are proposed as priority areas: energy production/conservation, water quality and supply services, transformation of plant/animal protein production and other foods and drinks, resource management, substitution of chemicals of concern, soil remediation/fertility. |
| --- | --- |

1.14.

Related to Industrial Emissions Portal (E-PRTR):

| 1.15. | The proposal has missed the opportunity to provide for a more effective use of performance information already generated within the annual compliance report (Article 14(1) of the IED, to be used for benchmarking and compliance purposes. A harmonised reporting obligation input form with mandatory content for the annual compliance report, enabling automatic extraction of that information within the EEA Portal, would considerably improve access to key performance information at EU level for various end user groups. |
| --- | --- |

1.15.

| 1.16. | The EESC stressed that improved access to performance information would be achieved in relation to the sections on the Environmental Management System (EMS). Many of these elements (e.g. use of resources and water reuse, waste prevention, substitution and use of hazardous substances) are proposed to be reported under the E-PRTR already, a streamlining of the IED-related reporting to integrate information in the Portal would hence reduce the administrative burden and provide added value to the usefulness of that information. |
| --- | --- |

1.16.

| 1.17. | Maintaining reporting thresholds will increase the administrative burden for competent authorities, due to further assessment steps needed to verify whether pollutant thresholds are exceeded. Where monitoring data exists, it should be used and hence reported, otherwise interesting information as to the driving forces that led to releases below the reporting thresholds would be lost. Therefore, the EESC disagrees with reporting thresholds. |
| --- | --- |

1.17.

| 1.18. | The list of pollutants subject to reporting has been kept unchanged since 2004. The EESC is not convinced that delaying the listing of identified pollutants of concern is appropriate. All pollutants identified in Article 14 are already subject to reporting obligations. The EESC does not see an added value of solely referring to the already authorised Annex XIV Substances of Very High Concern, whilst the IED provisions relate to ‘hazardous substances’. Therefore, the EESC finds that a broader list of substances with properties of concern should be listed in the PRTR Annex II directly, as mandatory reporting of the EU waste codes. |
| --- | --- |

1.18.

| 1.19. | The EESC believes that the EEA Portal should enable the comparison of permit limits to similar installations, in terms of their environmental and pollution prevention, ideally at global level. The EESC recommends integrating the information that is already generated by the IED/BAT and EMS requirements. Article 1 of the Kyiv PRTR Protocol refers to the triple objectives of the PRTR to enhance public access to information that would also facilitate public participation in environmental decision-making, as well as contribute to the prevention and reduction of pollution of the environment. The latter two objectives have not been sufficiently addressed. |
| --- | --- |

1.19.

| 1.20. | Finally, the EESC considers that the enabling environmental performance benchmarking and compliance promotion at EU level, the elaboration of the IT maintenance and helpdesks and mutualising efforts to that end (budget and tools) would satisfy much broader and diverse end user group interests, also stimulating the industry to further exchange good practice on pollution prevention. |
| --- | --- |

1.20.

2.   Background

| 2.1. | The Industrial Emissions Directive (IED) 2010/75/EU is the most important EU instrument aimed at preventing pollution at source in an integrated way, to achieve a high level of overall environmental protection for large scale industrial activities. It therefore bears the potential to give concrete meaning to the self-declared Zero Pollution Ambition, and will also contribute to better health. Its review is a test for EU decision makers to show that they are serious about bringing the EU Green Deal ambitions into practice through specific provisions. |
| --- | --- |

2.1.

| 2.2. | The evaluation was initiated under the EU Green Deal. Diverging views exist between representatives of certain industrial operators' trade associations and other representatives of the civil society, but also within the concerned industry stakeholder groups. |
| --- | --- |

2.2.

| 2.3. | The revised IED proposal has been reviewed, together with the review of Regulation (EC) No 166/2006 (2) establishing the European Pollutant Release and Transfer Register (E-PRTR), this Regulation implements the UNECE Kyiv PRTR Protocol of 2006 (3). |
| --- | --- |

2.3.

| 2.4. | General overview of the revised IED proposal: The declared aim of the European Commission (EC) is ‘to transform the legislation into a forward-looking framework fit for accompanying the industrial transformation needed for the green transition’, it builds on the following main building blocks: 1: improved effectiveness; 2: innovation; 3: resources and chemicals; 4: decarbonisation. The implementation of those building blocks directly depends on the scope design of the IED, set out in its Annex I, which could be considered the fifth building block. |
| --- | --- |

2.4.

| 2.5. | General overview for the revised E-PRTR proposal: the revised proposal for a Regulation on reporting of environmental data from industrial installations and establishing an Industrial Emissions Portal seeks to improve the integration of reporting streams through a centralized online database (the EEA Industrial Emissions Portal (4), the reporting on resource use and putting information into context. The aim is to cover at least 90 % of the release information. The list of polluting substances and release reporting thresholds have been kept unchanged. |
| --- | --- |

2.5.

3.   General comments (IED)

| 3.1. | The main expectations from civil society (5) are to achieve climate protection through a ‘combined approach’ (command and control and ETS), the redesign of its scope, performance indicators for guiding the transformation, restricting flexibilities and stronger permit ambition and a forward-looking BAT determination process putting public interests first. |
| --- | --- |

3.1.

| 3.2. | From the industry perspective, positions are more diverse. |
| --- | --- |

3.2.

| 3.2.1. | The 5th, transversal goal, referred to in point 2.4 above, misses, however, a key component, namely the additional renewable energy need beyond energy efficiency. |
| --- | --- |

3.2.1.

| 3.2.2. | A comparative analysis is needed to avoid the non-harmonised multiple (2 to 4) legislations concerning the same emissions, potentially leading to confusion. For instance, in energy carriers, ETS seems to be more motivating than other simultaneous rulings. |
| --- | --- |

3.2.2.

| 3.2.3. | The permit issuing process should be streamlined, intensified and simplified. Capacity development of authorities and better process preparing is needed to make the procedure quick and efficient. It is expected that the proposal for a permit summary may help address those concerns. |
| --- | --- |

3.2.3.

| 3.2.4. | A fine-tuned balance is needed between sanctioning (negative motivation) and incentivising, in favour of the latter, for achieving pollution prevention/reduction results sooner. |
| --- | --- |

3.2.4.

| 3.3. | Workers' representative associations welcome the proposal; workers are committed to the green transformation of the industry and recall that it is not a technological challenge but rather a social one. Due care is to be provided that the wider public and workers benefit on wider pollution prevention efforts needed for delivering on the EU Green Deal are fully consistent with a just transition. The workers' associations believe that stricter European environmental and human health protection rules support the workforce and emergence of good quality jobs where the industry itself becomes sustainable, good examples exist such as from the Green Steel transition in Sweden. Stricter pollution standards can help attract investments to make the EU industry infrastructure fit for the zero-pollution ambition. Workers association support the acceleration of efforts on the substitution of hazardous and dangerous substances produced and used at industrial activities and hence support improved transparency and user-friendly access to information on chemical management systems. |
| --- | --- |

3.3.

4.   Specific comments (IED review)

4.1.   Building block 1: Stricter BAT-uptake in permitting

| 4.1.1. | The proposal recognises, as a main failure, that majority of permit conditions align to the laxest pollution levels allowed under the relevant BAT-AE(P)Ls (associated emission levels) (Article 15(3)). The revised Article 15(3) proposes as a new default, that permit writers should set the ‘strictest possible emission limit values that are consistent with the lowest emissions achievable by applying BAT in the installation’. The EESC finds that this clarification is welcome and consistent with the IED to prevent pollution at source. At permitting, the exact scope and perimeters of the technology has to be taken into account in order to use the relevant BAT-comparison. |
| --- | --- |

4.1.1.

| 4.1.2. | Referring to the ‘strict’ but technically feasible range in the last paragraph would make it internally consistent and more aligned to the EU Green Deal. |
| --- | --- |

4.1.2.

| 4.1.3. | The proposal allows the operator to analyse the ‘feasibility of meeting the strictest end’ of the BAT-associated emissions levels (BAT-AEL) range and ‘demonstrating the best performance the installation can achieve by applying BAT as described in BAT conclusions’, clarifications are needed on this provision (see recommendations). |
| --- | --- |

4.1.3.

Derogations provision (Article 15(4))

| 4.1.4. | The reference to prohibit any derogation where it ‘may put at risk’ the compliance with an Environmental Quality Standard (EQS) translates the precautionary and preventive approach into clearer legal wording, and is therefore supported, as is the need for additional monitoring requirements for measuring impact on the receiving environment. |
| --- | --- |

4.1.4.

Clarification method on how to conduct cost-benefit assessments

| 4.1.5. | The cost benefit assessment (CBA) method is proposed in a new Annex II as part of new principles to be complied with when granting derogations. Environmental benefits should include health and climate protection benefits, the damage cost method should only use the more protective methods e.g. the EEA Value of Statistical Life (VSL) method adapted to OECD/US price levels, based on the EEA (ETC/ATNI report 04/2020) (6). |
| --- | --- |

4.1.5.

| 4.1.6. | The improved CBA method should also be used for setting the levels of sanctions and compensation, but also to determine what should be regarded as ‘economically viable’ in the BAT determination context. Applying this method for a systematic internalisation of external costs would also enable the generation of additional resources that could be re-allocated to support uptake of breakthrough emerging techniques. |
| --- | --- |

4.1.6.

Water discharge related

| 4.1.7. | Requirements to achieve equivalence of protection levels in case of indirect discharge of wastewater have been tightened (Article 15(1)). The majority of stakeholders, namely civil society and the water supply industry are quite in favour of the changes made to the new proposal, since it adds up conditionalities as to under what conditions indirect discharge may happen. It is positive that the equivalence of pollution load is highlighted, and that this is in all cases without prejudice to Article 18 (EQS compliance). Stronger wording could be used so as to prohibit dilution, and a ‘zero tolerance’ approach should be set for a list of recalcitrant pollutants in line with the non-deterioration obligation which applies in the context of water protection. |
| --- | --- |

4.1.7.

| 4.1.8. | The provision could be of more added value if a bioeliminability/biodegradability target value to be achieved would be set at any release point. |
| --- | --- |

4.1.8.

Restricting flexibility through an update of the EU safety net

| 4.1.9. | Requiring only the lignite fired Large Combustion Plants to not exceed the strict range of the BAT-AEL, could have avoided an annual health damage cost burden worth at least EUR 42,2 billion. Considering that Annex V minimal binding requirements are based on 2000-2001 emission data, the EESC believes that Annex V emission limit values, as well as the compliance regime provisions, should be amended to align with the strict BAT-associated energy efficiency levels and BAT-associated emissions levels for LCPs for coal/lignite combustion of the revised 2017 LCP BREF3. The proposal lacks any justification as to why the outdated EU Safety net has not been revised. |
| --- | --- |

4.1.9.

Other shortcomings negatively affecting the effectiveness of the IED goals

| 4.1.10. | Clearer measures (e.g. reduced operation) with a results-based obligation should be specified in the legal text of Article 18 EQS, so as to ensure that the competent authority will be obliged to take pre-emptive measures (e.g. EQS compliance ‘safety buffer’), an explicit link in Article 21(5) to the NAPCP, NECP as well as the WHO air quality guidelines (7) would be welcome, Article 3(6) should be amended accordingly. |
| --- | --- |

4.1.10.

Reinforced level playing field performance information and compliance promotion

| 4.1.11. | The proposal has missed the opportunity to provide for a more effective use of performance information already generated within the annual compliance report (Article 14(1) of the IED), a harmonised reporting obligation input form enabling automatic extraction of that information within the EEA Portal, would considerably improve access to key performance information. |
| --- | --- |

4.1.11.

| 4.1.12. | The EESC believes that compliance promotion provisions should already be set, such as minimal calibration frequencies for monitoring devices, measurement uncertainty levels to not exceed, aligned to state-of-the-art. |
| --- | --- |

4.1.12.

Reinforced Aarhus rights

| 4.1.13. | Improvements have been made on some aspects relating to public participation and access to justice, also triggered by an Aarhus Compliance Committee Case (8). The new guarantees under Article 25 relate to effective remedies and access to courts, and is welcome. However, the EESC believes that the provision of Article 25 should be amended to include any acts/omissions taken under the IED, not just those relating to Article 24. Moreover, a careful systematic investigation should be performed if, and to what extent, the claims of confidential business information are in line with the relevant Aarhus framework. |
| --- | --- |

4.1.13.

4.2.   Building block 2: ‘Support innovation’

| 4.2.1. | The EESC finds that the proposal does not provide clear tools and incentives to foster meaningful ‘innovation’. First, it is unclear what this innovation is designed to achieve, due to the lack of key performance indicators (KPIs) and lack of outcome-driven targets. Some provisions are made that would steer the uptake of ‘Emerging Techniques’ (ET). However, the criteria for assessing what an emerging technique is are based on the technology readiness levels (TRL) only. |
| --- | --- |

4.2.1.

| 4.2.2. | The EESC stresses that a 2050 deadline for achieving the ‘transformation’ is at odds with the EU goals on pollution and emission reduction, and with the limitations posed by planetary boundaries. Milestones and KPIs should be defined now in a science-based process, and explicitly include NGOs and other relevant stakeholders. |
| --- | --- |

4.2.2.

| 4.2.3. | Other stakeholders should be given a formal role in the elaboration of transformation plans, and the EU BREF information exchange. The list of stakeholders mentioned in the Innovation Centre for Industrial Transformation and Emissions (INCITE) provision, including the EEA, is more appropriate. A more balanced participation of various interest groups and the inclusion of academia and other health protection NGOs should be encouraged. |
| --- | --- |

4.2.3.

| 4.2.4. | The EESC finds that KPIs with clear time-bound action targets should be developed and could be added to Annex III of the IED for example, which relates to the criteria for BAT determination. Such KPIs could be used to guide the BREF reviews as well as the transformation plan process. These reviews should take place in well-designed and timely process, with milestones that can be planned on anticipation, to provide for early signals and proper planning support. |
| --- | --- |

4.2.4.

| 4.2.5. | The EESC proposes minimum principles to be set, ensuring that pollution prevention is favoured over its reduction, and a compatibility screening as to whether identified (emerging) techniques are compatible with achieving the acquis and the set ‘zero pollution’ goals. |
| --- | --- |

4.2.5.

4.3.   Building block 3: Resources and Chemicals

| 4.3.1. | Article 15(3)(a) requiring the Environmental Performance Limit Values to be within the BAT-associated emission levels (BAT-AELs) and other environmental performance levels (BAT-AEPLs) ranges is not sufficiently consistent with requiring operators to apply BAT, and should correspond to the strict level of the BAT-AEPL ranges that relate to ‘new plant’ standards, where a differentiation is made in the corresponding BAT-Conclusion. The EESC welcomes the stronger role of the BAT relating to resource use; these do not only benefit the environment and human health, but also provide a business case for the operators. |
| --- | --- |

4.3.1.

| 4.3.2. | The workers' representative associations and NGOs also highlight the benefits of substitution of hazardous and dangerous substances and prevention, ultimately resulting in less occupational diseases like cancer (which is the 1st cause of death at work). The EESC stressed that improved access and interpretation of performance information would be achieved by direct integration in the EEA Portal. |
| --- | --- |

4.3.2.

4.4.   Building block 4: Support decarbonisation

| 4.4.1. | The proposal falls short on making the IED fit for climate protection. The EESC finds that climate protection is important. The EESC strongly supports a combined approach and policy consistency delivering co-benefits. |
| --- | --- |

4.4.1.

| 4.4.2. | Civil society proposed to set the following provisions in the IED text: ‘climate neutrality’ should be added as supplementary BAT criteria; Article 9(1) deleted; decarbonisation measures are set also within the Transformation Plans e.g. 100gCO2eq/kWh as of 1 January 2035, and at 0gCO2eq/kWh at the latest by 2040. Mandatory electrification and fuel switching obligations. |
| --- | --- |

4.4.2.

| 4.4.3. | Industry provides for a different view and would instead take a case-by-case approach, pending the possible effects of the strengthened EU ETS Directive. They favour the EC's proposal to postpone the review to mid-2028. The main argument is that the EU-ETS system is more flexible for operators to decide on their own which measures are cost efficient to implement. |
| --- | --- |

4.4.3.

4.5.   Scope redesign/extension (sectoral points)

Intensive livestock activities (cattle inclusion, revised poultry and pig thresholds)

| 4.5.1. | The EC proposed some changes with regard to industrial scale livestock rearing based on Livestock Units (LSU) (9). The EC expects associated health benefit of EUR 5,5 billion per year, with a compliance cost estimate of about EUR 265 million. |
| --- | --- |

4.5.1.

| 4.5.2. | The main changes relate to the permitting regime, with a ‘light touch’ permitting regime proposed in a new Chapter VIa. For the EESC, it is not obvious how the pollution reduction will be achieved merely through the scope extension. The measures to be implemented through ‘operating rules’ (Article 70i) are not yet defined, and would be subject to a delegated act of the EC, compliance deadline points to 2030. |
| --- | --- |

4.5.2.

| 4.5.3. | The main concerns of civil society relate to the possibility for Member States to use a registration system which is at odds with having requirements set in permit procedures on a case-by-case basis (e.g. status of receiving environment, notably for nitrates and manure spreading). It would constitute a backtracking for the currently IED regulated Section 6.6 (pigs and poultry) activities. A straightforward link to the need for complying with EQS and receiving capacity of the land is missing. The pollution from aquaculture should also be covered. Finally, vague wordings are used in Chapter (Article 70f) as to significance of issues. |
| --- | --- |

4.5.3.

| 4.5.4. | The position of the concerned representing organisations is as follows: the inclusion of cattle rearing seems premature: manure spreading related emission values cannot be correctly measured but are rather estimated from the type of input nutrition; even estimations show a spreading of more than +/– 100 % around the average; this is even more shaky in pasture-based rearing where emissions are dispersed; no analytical JRC-study is available even listed; lack of operators' knowledge and capacity in collecting, supplying and reporting such type of data. |
| --- | --- |

4.5.4.

| 4.5.5. | The objective of the IED is to achieve an overall high level of environmental protection for large-scale industrial installations. The Commission proposal means that farms with an animal stock of 150 livestock units or more (as a ‘threshold’) will be covered by the provisions of the IED regardless of the rearing technology used. In practice, this means that many family farms fall within the scope of the Directive and shall therefore be subject to the same rules as other large industrial installations (e.g. cement or steel production). In order to ensure that the Directive is implemented in a proportionate and cost-effective manner, the EESC strongly recommends raising the threshold for livestock holdings based on a new adequate impact assessment of rearing technologies. |
| --- | --- |

4.5.5.

| 4.5.6. | The EESC finds that clarifications should be made to the content of the operating rules (70i), namely to those that would be most effective in delivering on the stated aims of pollution prevention, whilst being proportionate for the operators. A differentiation is made as to whether the animals are only seasonally reared in indoor installations or not and which type of measures should be taken for manure management. The EESC recommends further incentives to rearing farms that demonstrate best environmental practice, notably organic farming and other farming practices that respect animal welfare and are free range farms, preferably for locally adapted, local and rare breeds. The new framework should promote sustainable practices and not incentivise an optimisation of intensive livestock rearing methods e.g. with more end of pipe air control measures. The 2018 EMAS document on the sectoral reference document on best environmental management practices for the agricultural sector (10) provides for useful inspiration for benchmarks of excellence that could serve as a useful basis to define those standards. |
| --- | --- |

4.5.6.

| 4.5.7. | Aquaculture is a complex ecosystem providing, besides emissions, synergic environmental benefits: micro-climate, temperature control, air quality, water-household, carbon capturing, biodiversity etc. so, emissions cannot be evaluated in an isolate way. A detailed analytical JRC-study does not exist, even on the BREFs' list. A very precise definition of BAT-versions is needed due to the high number of existing technologies some of which are net climate neutral. |
| --- | --- |

4.5.7.

Mineral mining activities

| 4.5.8. | The EC proposes including a few types of mineral and metallic mining activities in its scope. The EESC supports this inclusion because it can have a significant impact on the environment, fosters the ecological sound exploration of resources to be extracted in most efficient manner and hence would improve public acceptance. The demand for critical minerals is expected to strongly grow in the EU, meaning additional pressures for new mining activities. For most cases, these activities are already regulated at national level, and an EU approach would support the level playing field. |
| --- | --- |

4.5.8.

Inclusion of Giga-Watt hour Batteries manufacturing

| 4.5.9. | The EC proposal suggests including in the IED scope the manufacture of lithium-ion batteries and assembling of battery cells/packs, with a production capacity exceeding 3,5 GWh per year. The EESC supports this inclusion due to emerging findings as to high potential impacts those activities can have, notably with regard to water consumption and use of hazardous metals. Due to the electrification of transport and other applications, this is a fast-growing sector. It is however unclear as to why the initial proposal of capacity threshold 2,5 GWh has been lowered at the last minute. |
| --- | --- |

4.5.9.

Landfilling

| 4.5.10. | The EC proposes strengthening the requirements applying to landfills, it is therefore not a scope extension. Providing BAT on landfilling would improve the environmental and climate impacts from landfilling, notably in regard to preventing/capturing methane emissions. The Landfill Directive (11) dates back to 1999, contrary to what that Directive states there are no BAT standards for landfilling. It is also made explicit that biologic treatment covers anaerobic treatment activities (in section 5.3). Both those clarifications are supported by the EESC. |
| --- | --- |

4.5.10.

5.   General comments (E-PRTR review)

| 5.1. | The PRTRs have to serve at least 3 interlinked objectives, as specified in Article 1 of the Kyiv PRTR Protocol (see point 1.19). |
| --- | --- |

5.1.

| 5.2. | The EESC finds that modern and easy-to-use integrated data portals are key to ensure progress tracking on pollution prevention and public accountability. Whilst the EESC welcomes some of the new provisions such as the systematic reporting on the inputs (consumption, materials, supply chain impacts), putting information into context, reporting on diffuse emissions, maximum user friendliness and integrating various reporting streams, there are serious concerns as to the more specific requirements i.e. how to enable benchmarking and compliance promotion. |
| --- | --- |

5.2.

6.   Specific comments (E-PRTR review)

| 6.1. | The EESC is not convinced that delaying the listing of identified pollutants of concern is the appropriate way forward. |
| --- | --- |

6.1.

| 6.2. | The EESC finds that there is a legitimate interest among citizens to receive useful information about the environmental footprint of products. |
| --- | --- |

6.2.

| 6.3. | The EC declares an aim of ‘capturing at least 90 % of releases of each pollutant to air, water and land, including thresholds of zero for substances displaying a particularly high hazard to the environment or human health’; this objective is welcome. |
| --- | --- |

6.3.

| 6.4. | Maintaining reporting thresholds will increase the administrative burden for competent authorities, where monitoring data exists, it should be used and hence reported. Based on the above, the EESC disagrees with reporting thresholds. |
| --- | --- |

6.4.

| 6.5. | The EESC thinks that reporting efficiency and effectiveness can be improved. Operators should be able to directly report to the EEA Portal the monitoring data; for most those are based on continuous emissions monitoring (CEM) systems. In many EU countries, but also in China and the US, the CEM raw data is directly made publicly available in real time (or within a month) to the centralised database. This feature is not yet offered by the EEA. The EESC believes that enabling a direct tele-reporting by the operators to the EEA would lift some administrative and compliance assessment burden from the competent authorities whilst enabling more time effective access to the information for various end users. The competent authority would retain the validation and enforcement responsibilities through special access rights; data entries could be flagged on their status (pending validation/validated). |
| --- | --- |

6.5.

Brussels, 14 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).

1

(2)  Regulation (EC) No 166/2006 of the European Parliament and of the Council of 18 January 2006 concerning the establishment of a European Pollutant Release and Transfer Register and amending Council Directives 91/689/EEC and 96/61/EC (OJ L 33, 4.2.2006, p. 1).

2

(3)  https://unece.org/environment-policy/public-participation/prtrs-protocol-text

3

(4)  https://industry.eea.europa.eu/

4

(5)  https://eeb.org/library/ngo-preliminary-assessment-of-the-european-commissions-proposal-for-revised-ied-and-e-prtr

5

(6)  https://www.eionet.europa.eu/etcs/etc-atni/products/etc-atni-reports/etc-atni-report-04-2020-costs-of-air-pollution-from-european-industrial-facilities-200820132017

6

(7)  https://www.who.int/news-room/feature-stories/detail/what-are-the-who-air-quality-guidelines

7

(8)  ACCC/C/2014/121 EU: https://unece.org/acccc2014121-european-union

8

(9)  The LSU factors are based on Annex II to Commission Implementing Regulation (EU) No 808/2014.

9

(10)  Commission Decision (EU) 2018/813 of 14 May 2018 on the sectoral reference document on best environmental management practices, sector environmental performance indicators and benchmarks of excellence for the agriculture sector under Regulation (EC) No 1221/2009 of the European Parliament and of the Council on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS) (OJ L 145, 8.6.2018, p. 1), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32018D0813

10

(11)  Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (OJ L 182, 16.7.1999, p. 1), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31999L0031

11

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/140 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/140

---

Opinion of the European Economic and Social Committee on the 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: Security of supply and affordable energy prices: Options for immediate measures and preparing for next winter

(COM(2022) 138 final)

(2022/C 443/20)

| Rapporteur: | Alena MASTANTUONO |
| --- | --- |

Rapporteur:

Alena MASTANTUONO

| Referral | European Commission, 2.5.2022 |
| --- | --- |
| 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 | 21.6.2022 |
| Adopted at plenary | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 188/3/13 |

Referral

European Commission, 2.5.2022

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

21.6.2022

Adopted at plenary

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

188/3/13

1.   Conclusions and recommendations

| 1.1. | The communication at hand must be seen in the overall context of REPower EU, the main objective of which is to break away from Russian fossil fuels. The situation is serious and calls for an unprecedented response and the maximum level of solidarity and trust among EU Member States. Europe needs an efficient plan which would foresee different energy shortage scenarios, and outline how these situations should be tackled with joint action of the EU Member States and how energy infrastructure would be most efficiently used and further developed. The European Economic and Social Committee (EESC) encourages joint actions by Member States to respond to the need for proper infrastructure and its efficient use. |
| --- | --- |

1.1.

| 1.2. | Less dependence on Russian gas means more autonomy and requires increased use of resources available in the EU, inter alia a quick rollout of renewables. The EU should thus make maximum use of the available resources and existing capacity of its own to face the shortage in energy supply. However, local sources will not be sufficient or readily available, and the EU therefore has to set up new partnerships with reliable countries. In this regard, the EESC emphasises that when setting up energy partnerships with non-EU countries, the impact of dependence on countries that do not share EU values or could be branded as unfriendly regimes must be carefully borne in mind. |
| --- | --- |

1.2.

| 1.3. | The root cause of the current high electricity prices is gas, which is pushing up electricity prices. The only ideal solution to this problem would be to increase the production and use of non-fossil electricity to the extent that meets the electricity demand. |
| --- | --- |

1.3.

| 1.4. | While the communication focuses on short-term measures to ensure the security of supply and affordable prices, they need to be considered in the framework of longer-term objectives. The EESC finds it vital to constantly and consistently adhere to all the basic objectives of a sustainable energy system: security of supply, reasonable costs and prices, and environmental sustainability. |
| --- | --- |

1.4.

| 1.5. | Direct support is no doubt the most realistic option as an emergency measure. Using increased VAT and energy tax revenues can help Member States finance such measures. Any support measures aimed at mitigating the crisis should be temporary and well-targeted at those suffering most, be they citizens, SMEs or energy-intensive industries. The communication, however, falls short by saying that a substantial effort in reducing gas consumption must also come from consumers. Compensation that does not lead to a decrease in gas consumption is thus not a sustainable option. |
| --- | --- |

1.5.

| 1.6. | The situation should only require targeted temporary measures in Member States with the least distorting effects on the EU market, or measures at EU level that will not endanger decarbonisation efforts or energy supply. All in all, market interventions carry the risk of working against longer-term objectives by causing investment uncertainties and discouraging decarbonisation in the energy industry. The EESC agrees with the ACER conclusions that the electricity market has proved its good functioning in terms of avoiding electricity curtailment or even blackouts in certain areas. |
| --- | --- |

1.6.

2.   General comments

| 2.1. | After the Kremlin’s decision to cut off some European countries from gas supplies, European leaders understood the seriousness of the situation, which calls for an unprecedented response and maximum level of solidarity and trust among EU Member States. Europe needs an efficient plan which would foresee different energy shortage scenarios, and outline how these situations should be tackled with joint action of the EU Member States and how energy infrastructure would be most efficiently used. |
| --- | --- |

2.1.

| 2.2. | The communication at hand must be seen in the overall context of REPower EU, the main objective of which is to break away from Russian fossil fuels. In this respect, the EESC refers to its previous opinions (1) covering views and messages on both short-term and longer-term measures to respond to the challenges of this problem. |
| --- | --- |

2.2.

| 2.3. | While the communication focuses on short-term measures to ensure security of supply and affordable prices, they need to be considered in the framework of longer-term objectives. The EESC finds it vital to constantly and consistently adhere to all the basic objectives of a sustainable energy system: security of supply, reasonable costs and prices, and environmental sustainability. It needs to be recognised that many measures, especially major investments, take a longer time to realise in practice, and compromise short-term measures may be needed to get through the emergency situation. |
| --- | --- |

2.3.

| 2.4. | Without a comprehensive approach, there is a great risk of addressing acute symptoms with measures that are either inefficient or at its worse, work against the basic objectives. Ensuring equal access to energy at affordable prices and the security of energy supply at reasonable costs, while at the same time striving for climate-neutrality, must be an absolute priority for the European Union. |
| --- | --- |

2.4.

3.   Specific comments — security of gas supply at reasonable cost

| 3.1. | The communication proposes collective European actions to address the issue of gas supply. The measures include EU partnerships with third countries and facilitation of collective purchases, as well as a common gas storage policy. |
| --- | --- |

3.1.

| 3.2. | Less dependence on Russian gas means more autonomy and requires increased use of resources available in the EU, including a rollout of renewables. The EU should thus make maximum use of the available resources and existing capacity of its own to face the shortage in energy supply. |
| --- | --- |

3.2.

| 3.3. | However, it is obvious that local sources will not be sufficient or readily available, and the EU therefore has to set up new partnerships with third countries. In this regard, the EESC emphasises that when setting up energy partnerships with non-EU countries, the impact of dependence on countries that do not share EU values or could be branded as unfriendly regimes must be carefully borne in mind. |
| --- | --- |

3.3.

| 3.4. | Correspondingly, EU should thoroughly analyse the pros and cons of the import of hydrogen from third countries and also look for appropriate solutions that can be found inside the European Union. |
| --- | --- |

3.4.

| 3.5. | LNG terminals, gas storage facilities, and pipelines for diversified supplies play a central role in the security of gas supply. In order to use the resources available in the EU in a sustainable way, Europe will have to deploy huge investments in infrastructure and R&D&I. The EESC encourages joint actions by Member States to respond to the need for proper infrastructure and its efficient use. The EESC draws attention to ongoing projects such as the joint leasing of an LNG terminal ship by Finland and Estonia. |
| --- | --- |

3.5.

| 3.6. | The EESC strongly supports the new rules on gas storage which were swiftly agreed by the European co-legislators. Well-filled gas storage facilities will help to ensure a safe winter (2022/2023), protecting against price shocks, shielding Europeans from energy poverty, and securing the competitiveness of European businesses. |
| --- | --- |

3.6.

| 3.7. | In line with its opinion on EU gas storage policy (2), the EESC perceives cooperation with third countries as a complimentary measure to investments in new infrastructure, which will increase Europe’s energy security. The EESC urges the Council and the Parliament to consider using gas storage facilities in reliable neighbouring countries, including in Ukraine, which will contribute to providing security of supply. |
| --- | --- |

3.7.

4.   Specific comments — addressing high electricity prices

| 4.1. | The spike in energy prices in the aftermath of the pandemic and further exacerbated by Russia's invasion of Ukraine affects a broad range of consumers and contributes to the increase in energy poverty across Europe. Those who were already facing energy poverty are seeing their situations worsen, and consumers who in the past did not face issues in paying their energy bills are at risk of falling into poverty. |
| --- | --- |

4.1.

| 4.2. | The Commission has already published several initiatives to address high energy prices and their impacts, including the toolbox for action and support (3) and the options presented in the REPowerEU communication for supporting vulnerable citizens and most affected enterprises, such as energy-intensive industries to relieve production costs and enhance decarbonisation efforts. The EESC welcomes and finds it crucial that also SMEs are covered by the support measures. |
| --- | --- |

4.2.

| 4.3. | The EESC welcomes the analysis of the benefits and drawbacks of different options to address high electricity prices and their impacts on citizens and business, put forward by the communication at hand. The options cover two kinds of measures: financial support to mitigate the impacts of high prices, and market intervention measures that aim to affect the prices themselves. |
| --- | --- |

4.3.

| 4.4. | Direct support is no doubt the most realistic option as an emergency measure. Using increased VAT and energy tax revenues can help Member States finance such measures. Any support measures aimed at mitigating the crisis should be temporary and well-targeted at those suffering most, be they citizens, SMEs or energy-intensive industries. The communication, however, falls short by saying that a substantial effort in reducing gas consumption must also come from consumers. Compensation that does not lead to a decrease in gas consumption is thus not a sustainable option. |
| --- | --- |

4.4.

| 4.5. | As the communication rightly says, there is no ideal solution. Any intervention on the energy market will have a negative consequence. In many cases, these can be market distortions, fiscal costs, supply disruption, negative impact on investments or on consumer behaviour. In a nutshell, it can affect decarbonisation efforts or compromise security of supply. |
| --- | --- |

4.5.

| 4.6. | The picture outlined by the Commission therefore attests to the complexity where Europe is facing a triple challenge — security of energy, affordable prices and the fight with climate change. This once again highlights the need for a comprehensive approach to any policies and measures, to ensure their consistency with and contribution to the objective of the overall sustainability of the energy system. |
| --- | --- |

4.6.

| 4.7. | As presented by the document, there is no one size fits-all solution, which leaves the space for Member States to find the most suitable solution for their country. However, in the case of the EU energy market, any intervention anywhere could have a consequence on the rest of the market. Therefore, the situation should only require targeted temporary measures in Member States with the least distorting effects on the EU market, or measures at EU level that will not endanger decarbonisation efforts or energy supply. |
| --- | --- |

4.7.

| 4.8. | In line with the recent ACER report (4), the EESC agrees with the conclusion that the electricity market proved its good functioning in terms of avoiding electricity curtailment or even blackouts in certain areas. The ACER’s assessment is that the current market design is worth keeping. In addition, some longer-term improvements are likely to prove key in order for the framework to deliver on the EU’s ambitious decarbonisation trajectory over the next 10-15 years, and to do so at lower cost whilst ensuring security of supply. The EESC highlights that any changes in the market design must be based on careful analysis of their economic, social and environmental consequences. |
| --- | --- |

4.8.

| 4.9. | The EESC agrees with the Commission that the root cause of the current high electricity prices is gas, which is also pushing up electricity prices through marginal pricing. The ideal solution to this problem would be to increase the production and use of non-fossil electricity to the extent that meets the electricity demand. |
| --- | --- |

4.9.

| 4.10. | The EESC considers price caps or other interventions in the wholesale energy markets problematic, as they would distort the necessary price signals and entail the complexity related to determining the ‘right’ level of prices. Fiscal measures such as ‘windfall taxes’ do not decrease prices but are rather seen as a source of revenue. All in all, market interventions carry the risk of working against longer-term objectives by causing investment uncertainties and discouraging decarbonisation in the energy industry. |
| --- | --- |

4.10.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

(1)  OJ C 323, 26.8. 2022, p. 123 and OJ C 323, 26.8.2022, p. 129.

1

(2)  OJ C 323, 26.8.2022, p. 129.

2

(3)  COM(2021) 660 final.

3

(4)  ACER's final assessment of the EU wholesale elektricity market design.

4

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/144 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/144

---

Opinion of the European Economic and Social Committee on the proposal for a Regulation of the European Parliament and of the Council laying down specific and temporary measures, in view of Russia’s invasion of Ukraine, concerning driver documents issued by Ukraine in accordance with its legislation

(COM(2022) 313 final — 2022/0204 (COD))

(2022/C 443/21)

| Referral | Council, 28.6.2022
  European Parliament, 4.7.2022 |
| --- | --- |
| Legal basis | Article 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 | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 195/4/3 |

Referral

Council, 28.6.2022

European Parliament, 4.7.2022

Legal basis

Article 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

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

195/4/3

Since the Committee endorses the content of the proposal and feels that it requires no comment on its part, it decided to issue an opinion endorsing the proposed text.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---

| 22.11.2022 | EN | Official Journal of the European Union | C 443/145 |
| --- | --- | --- | --- |

22.11.2022

EN

Official Journal of the European Union

C 443/145

---

Opinion of the European Economic and Social Committee on the proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources, Directive 2010/31/EU on the energy performance of buildings and Directive 2012/27/EU on energy efficiency

(COM(2022) 222 final)

(2022/C 443/22)

| Referral | European Parliament, 6.6.2022
  Council of the European Union, 15.6.2022 |
| --- | --- |
| Legal basis | Article 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 | 13.7.2022 |
| Plenary session No | 571 |
| Outcome of vote
  (for/against/abstentions) | 201/2/1 |

Referral

European Parliament, 6.6.2022

Council of the European Union, 15.6.2022

Legal basis

Article 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

13.7.2022

Plenary session No

571

Outcome of vote

(for/against/abstentions)

201/2/1

Since the Committee endorses the content of the proposal and feels that it requires no comment on its part, it decided to issue an opinion endorsing the proposed text.

Brussels, 13 July 2022.

The President of the European Economic and Social Committee

Christa SCHWENG

---