# Official Journal C 299/2012

| | ISSN 1977-091X
  doi:10.3000/1977091X.C_2012.299.eng |
| --- | --- |
| Official Journal
  of the European Union | C 299 |
| | |
| English edition | Information and Notices | Volume 554 October 2012 |

ISSN 1977-091X

doi:10.3000/1977091X.C_2012.299.eng

Official Journal

of the European Union

C 299

English edition

Information and Notices

Volume 554 October 2012

---

| Notice No | Contents | page |
| --- | --- | --- |
| | I   Resolutions, recommendations and opinions |
| | OPINIONS |
| | European Economic and Social Committee |
| | 482nd plenary session held on 11 and 12 July 2012 |
| 2012/C 299/01 | Opinion of the European Economic and Social Committee on Strengthening the participatory processes and the involvement of local authorities, NGOs and the social partners in the implementation of Europe 2020 (exploratory opinion) | 1 |
| 2012/C 299/02 | Opinion of the European Economic and Social Committee on What changes for Europe’s banking sector with the new financial rules? (own-initiative opinion) | 6 |
| 2012/C 299/03 | Opinion of the European Economic and Social Committee on The European Technology Platforms (ETPs) and industrial change (own-initiative opinion) | 12 |
| 2012/C 299/04 | Opinion of the European Economic and Social Committee on the Need for a European defence industry: industrial, innovative and social aspects (own-initiative opinion) | 17 |
| 2012/C 299/05 | Opinion of the European Economic and Social Committee on Female entrepreneurs — specific policies to increase EU growth and employment (own-initiative opinion) | 24 |
| 2012/C 299/06 | Opinion of the European Economic and Social Committee on The role of women as drivers of a development and innovation model in agriculture and rural areas (own-initiative opinion) | 29 |
| 2012/C 299/07 | Opinion of the European Economic and Social Committee on The EU's relations with Moldova: What role for organised civil society? | 34 |
| 2012/C 299/08 | Opinion of the European Economic and Social Committee on The role of civil society in the EU-Colombia and EU-Peru trade agreements | 39 |
| 2012/C 299/09 | Opinion of the European Economic and Social Committee on Cooperatives and agri-food development (own-initiative opinion) | 45 |
| 2012/C 299/10 | Opinion of the European Economic and Social Committee on the Revision of 1994 and 2005 EU aviation and airport guidelines (additional opinion) | 49 |

Notice No

Contents

page

I   Resolutions, recommendations and opinions

OPINIONS

European Economic and Social Committee

482nd plenary session held on 11 and 12 July 2012

2012/C 299/01

Opinion of the European Economic and Social Committee on Strengthening the participatory processes and the involvement of local authorities, NGOs and the social partners in the implementation of Europe 2020 (exploratory opinion)

1

2012/C 299/02

Opinion of the European Economic and Social Committee on What changes for Europe’s banking sector with the new financial rules? (own-initiative opinion)

6

2012/C 299/03

Opinion of the European Economic and Social Committee on The European Technology Platforms (ETPs) and industrial change (own-initiative opinion)

12

2012/C 299/04

Opinion of the European Economic and Social Committee on the Need for a European defence industry: industrial, innovative and social aspects (own-initiative opinion)

17

2012/C 299/05

Opinion of the European Economic and Social Committee on Female entrepreneurs — specific policies to increase EU growth and employment (own-initiative opinion)

24

2012/C 299/06

Opinion of the European Economic and Social Committee on The role of women as drivers of a development and innovation model in agriculture and rural areas (own-initiative opinion)

29

2012/C 299/07

Opinion of the European Economic and Social Committee on The EU's relations with Moldova: What role for organised civil society?

34

2012/C 299/08

Opinion of the European Economic and Social Committee on The role of civil society in the EU-Colombia and EU-Peru trade agreements

39

2012/C 299/09

Opinion of the European Economic and Social Committee on Cooperatives and agri-food development (own-initiative opinion)

45

2012/C 299/10

Opinion of the European Economic and Social Committee on the Revision of 1994 and 2005 EU aviation and airport guidelines (additional opinion)

49

| | III   Preparatory acts |
| --- | --- |
| | EUROPEAN ECONOMIC AND SOCIAL COMMITTEE |
| | 482nd plenary session held on 11 and 12 July 2012 |
| 2012/C 299/11 | Opinion of the European Economic and Social Committee on Restructuring and anticipation of change: what lessons from recent experience? (Green Paper) COM(2012) 7 final | 54 |
| 2012/C 299/12 | Opinion of the European Economic and Social Committee on the Green Paper on the feasibility of introducing stability bondsCOM(2011) 818 final | 60 |
| 2012/C 299/13 | 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 the European Earth monitoring programme (GMES) and its operations (from 2014 onwards)COM(2011) 831 final | 72 |
| 2012/C 299/14 | Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) and amending Directive 98/26/ECCOM(2012) 73 final — 2012/0029 (COD) | 76 |
| 2012/C 299/15 | Opinion of the European Economic and Social Committee on the Proposal for a directive of the European Parliament and of the Council relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systemsCOM(2012) 84 final — 2012/0035 (COD) | 81 |
| 2012/C 299/16 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on simplifying the transfer of motor vehicles registered in another Member State within the single marketCOM(2012) 164 final — 2012/0082 (COD) | 89 |
| 2012/C 299/17 | 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 enhanced intra-EU solidarity in the field of asylum — An EU agenda for better responsibility-sharing and more mutual trustCOM(2011) 835 final | 92 |
| 2012/C 299/18 | 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 — Youth Opportunities InitiativeCOM(2011) 933 final | 97 |
| 2012/C 299/19 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council establishing for the period 2014 to 2020 the Justice programmeCOM(2011) 759 final — 2011/0369 (COD) | 103 |
| 2012/C 299/20 | Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for external borders and visaCOM(2011) 750 final — 2011/0365 (COD),Proposal for a regulation of the European Parliament and of the Council establishing the Asylum and Migration FundCOM(2011) 751 final — 2011/0366 (COD),Proposal for a regulation of the European Parliament and of the Council laying down general provisions on the Asylum and Migration Fund and on the instrument for financial support for police cooperation, preventing and combating crime, and crisis managementCOM(2011) 752 final — 2011/0367 (COD) and the Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis managementCOM(2011) 753 final — 2011/0368 (COD) | 108 |
| 2012/C 299/21 | Opinion of the European Economic and Social Committee on the White paper — An agenda for adequate, safe and sustainable pensionsCOM(2012) 55 final | 115 |
| 2012/C 299/22 | Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing for the period 2014-2020 the programme Europe for Citizens COM(2011) 884 final — 2011/0436 (APP) | 122 |
| 2012/C 299/23 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European UnionCOM(2012) 85 final — 2012/0036 (COD) | 128 |
| 2012/C 299/24 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on the European Maritime and Fisheries Fund (repealing Council Regulation (EC) No 1198/2006 and Council Regulation (EC) No 861/2006 and Council Regulation No XXX/2011 on integrated maritime policy)COM(2011) 804 final — 2011/0380 (COD) | 133 |
| 2012/C 299/25 | 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 Regions on promotion measures and information provision for agricultural products: a reinforced value-added European strategy for promoting the tastes of EuropeCOM(2012) 148 final | 141 |
| 2012/C 299/26 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multiannual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocksCOM(2012) 155 final — 2012/0077 (COD) | 145 |
| 2012/C 299/27 | 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 — High-Performance Computing: Europe’s place in a Global RaceCOM(2012) 45 final | 148 |
| 2012/C 299/28 | Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and the Council amending Directive 2009/16/EC on port State controlCOM(2012) 129 final — 2012/62 (COD) and the Proposal for a Directive of the European Parliament and the Council concerning flag State responsibilities for the enforcement of Council Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention, 2006, and amending Directive 1999/63/ECCOM(2012) 134 final — 2012/65 (COD) | 153 |
| 2012/C 299/29 | Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on ship recyclingCOM(2012) 118 final — 2012/0055 (COD) | 158 |
| 2012/C 299/30 | Opinion of the European Economic and Social Committee on the Key Actions towards a Single Market Act II (exploratory opinion) | 165 |
| 2012/C 299/31 | Opinion of the European Economic and Social Committee on the Transport White Paper: getting civil society on board (exploratory opinion) | 170 |

III   Preparatory acts

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

482nd plenary session held on 11 and 12 July 2012

2012/C 299/11

Opinion of the European Economic and Social Committee on Restructuring and anticipation of change: what lessons from recent experience? (Green Paper) COM(2012) 7 final

COM(2012) 7 final

54

2012/C 299/12

Opinion of the European Economic and Social Committee on the Green Paper on the feasibility of introducing stability bondsCOM(2011) 818 final

COM(2011) 818 final

60

2012/C 299/13

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 the European Earth monitoring programme (GMES) and its operations (from 2014 onwards)COM(2011) 831 final

COM(2011) 831 final

72

2012/C 299/14

Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) and amending Directive 98/26/ECCOM(2012) 73 final — 2012/0029 (COD)

COM(2012) 73 final — 2012/0029 (COD)

76

2012/C 299/15

Opinion of the European Economic and Social Committee on the Proposal for a directive of the European Parliament and of the Council relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systemsCOM(2012) 84 final — 2012/0035 (COD)

COM(2012) 84 final — 2012/0035 (COD)

81

2012/C 299/16

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on simplifying the transfer of motor vehicles registered in another Member State within the single marketCOM(2012) 164 final — 2012/0082 (COD)

COM(2012) 164 final — 2012/0082 (COD)

89

2012/C 299/17

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 enhanced intra-EU solidarity in the field of asylum — An EU agenda for better responsibility-sharing and more mutual trustCOM(2011) 835 final

COM(2011) 835 final

92

2012/C 299/18

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 — Youth Opportunities InitiativeCOM(2011) 933 final

COM(2011) 933 final

97

2012/C 299/19

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council establishing for the period 2014 to 2020 the Justice programmeCOM(2011) 759 final — 2011/0369 (COD)

COM(2011) 759 final — 2011/0369 (COD)

103

2012/C 299/20

Opinion of the European Economic and Social Committee on the Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for external borders and visaCOM(2011) 750 final — 2011/0365 (COD),Proposal for a regulation of the European Parliament and of the Council establishing the Asylum and Migration FundCOM(2011) 751 final — 2011/0366 (COD),Proposal for a regulation of the European Parliament and of the Council laying down general provisions on the Asylum and Migration Fund and on the instrument for financial support for police cooperation, preventing and combating crime, and crisis managementCOM(2011) 752 final — 2011/0367 (COD) and the Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis managementCOM(2011) 753 final — 2011/0368 (COD)

COM(2011) 750 final — 2011/0365 (COD),

COM(2011) 751 final — 2011/0366 (COD),

COM(2011) 752 final — 2011/0367 (COD)

COM(2011) 753 final — 2011/0368 (COD)

108

2012/C 299/21

Opinion of the European Economic and Social Committee on the White paper — An agenda for adequate, safe and sustainable pensionsCOM(2012) 55 final

COM(2012) 55 final

115

2012/C 299/22

Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation establishing for the period 2014-2020 the programme Europe for Citizens COM(2011) 884 final — 2011/0436 (APP)

COM(2011) 884 final — 2011/0436 (APP)

122

2012/C 299/23

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European UnionCOM(2012) 85 final — 2012/0036 (COD)

COM(2012) 85 final — 2012/0036 (COD)

128

2012/C 299/24

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on the European Maritime and Fisheries Fund (repealing Council Regulation (EC) No 1198/2006 and Council Regulation (EC) No 861/2006 and Council Regulation No XXX/2011 on integrated maritime policy)COM(2011) 804 final — 2011/0380 (COD)

COM(2011) 804 final — 2011/0380 (COD)

133

2012/C 299/25

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 Regions on promotion measures and information provision for agricultural products: a reinforced value-added European strategy for promoting the tastes of EuropeCOM(2012) 148 final

COM(2012) 148 final

141

2012/C 299/26

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multiannual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocksCOM(2012) 155 final — 2012/0077 (COD)

COM(2012) 155 final — 2012/0077 (COD)

145

2012/C 299/27

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 — High-Performance Computing: Europe’s place in a Global RaceCOM(2012) 45 final

COM(2012) 45 final

148

2012/C 299/28

Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and the Council amending Directive 2009/16/EC on port State controlCOM(2012) 129 final — 2012/62 (COD) and the Proposal for a Directive of the European Parliament and the Council concerning flag State responsibilities for the enforcement of Council Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention, 2006, and amending Directive 1999/63/ECCOM(2012) 134 final — 2012/65 (COD)

COM(2012) 129 final — 2012/62 (COD)

COM(2012) 134 final — 2012/65 (COD)

153

2012/C 299/29

Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and of the Council on ship recyclingCOM(2012) 118 final — 2012/0055 (COD)

COM(2012) 118 final — 2012/0055 (COD)

158

2012/C 299/30

Opinion of the European Economic and Social Committee on the Key Actions towards a Single Market Act II (exploratory opinion)

165

2012/C 299/31

Opinion of the European Economic and Social Committee on the Transport White Paper: getting civil society on board (exploratory opinion)

170

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

EN

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I Resolutions, recommendations and opinions

OPINIONS

European Economic and Social Committee

482nd plenary session held on 11 and 12 July 2012

| 4.10.2012 | EN | Official Journal of the European Union | C 299/1 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/1

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Opinion of the European Economic and Social Committee on ‘Strengthening the participatory processes and the involvement of local authorities, NGOs and the social partners in the implementation of Europe 2020’ (exploratory opinion)

2012/C 299/01

Rapporteur: Heidi LOUGHEED

In a letter dated 18 April 2012, Ms Sotiroula Charalambous, Minister of Labour and Social Insurance of the Republic of Cyprus, asked the European Economic and Social Committee, on behalf of the forthcoming Cypriot presidency of the EU Council, to draw up an opinion on

Strengthening the participatory processes and the involvement of local authorities, NGOs and the social partners in the implementation of Europe 2020.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July 2012), the European Economic and Social Committee adopted the following opinion unanimously.

1.   Recommendations

| — | The EESC calls on the European institutions and national governments to make a renewed political commitment to engage with all relevant partners (the European Parliament, the Committee of the Regions, the European Economic and Social Committee, national parliaments, regional and local authorities, the social partners, organised civil society, national Economic and Social Councils or similar bodies, cities and all other forms of local authorities) under the Europe 2020 Strategy. |
| --- | --- |

—

The EESC calls on the European institutions and national governments to make a renewed political commitment to engage with all relevant partners (the European Parliament, the Committee of the Regions, the European Economic and Social Committee, national parliaments, regional and local authorities, the social partners, organised civil society, national Economic and Social Councils or similar bodies, cities and all other forms of local authorities) under the Europe 2020 Strategy.

| — | The EESC undertakes to build on work with the national Economic and Social Councils (ESCs) and similar bodies and national representatives of organised civil society by becoming the European contact point and to provide a dedicated platform for them to further their own work on the Europe 2020 Strategy. |
| --- | --- |

—

The EESC undertakes to build on work with the national Economic and Social Councils (ESCs) and similar bodies and national representatives of organised civil society by becoming the European contact point and to provide a dedicated platform for them to further their own work on the Europe 2020 Strategy.

| — | In the long term, the EESC believes that the European Union should develop a long-term vision of the ultimate goal of stakeholder engagement and work to gradually develop this. |
| --- | --- |

—

In the long term, the EESC believes that the European Union should develop a long-term vision of the ultimate goal of stakeholder engagement and work to gradually develop this.

| — | In the short term, the EESC believes that a number of small changes would have a significant impact on progress. In particular, as a matter of urgency, Member States and the European Commission should reconsider the timing and type of processes in order to allow for genuine engagement and co-responsibility by all stakeholders. |
| --- | --- |

—

In the short term, the EESC believes that a number of small changes would have a significant impact on progress. In particular, as a matter of urgency, Member States and the European Commission should reconsider the timing and type of processes in order to allow for genuine engagement and co-responsibility by all stakeholders.

2.   Introduction

| 2.1 | On 18 April 2012, the incoming Cypriot Presidency asked the European Economic and Social Committee to prepare an opinion on the subject of strengthening the participatory processes and the involvement of the local authorities, NGOs and the social partners in the implementation of Europe 2020 in light of its intention to make the issue a priority for the Presidency and for the Informal EPSCO in July 2012.
  With the European Semester now in its third year, it is an appropriate time to look at participatory processes under Europe 2020 and to see how they could be developed. |
| --- | --- |

2.1

On 18 April 2012, the incoming Cypriot Presidency asked the European Economic and Social Committee to prepare an opinion on the subject of strengthening the participatory processes and the involvement of the local authorities, NGOs and the social partners in the implementation of Europe 2020 in light of its intention to make the issue a priority for the Presidency and for the Informal EPSCO in July 2012.

With the European Semester now in its third year, it is an appropriate time to look at participatory processes under Europe 2020 and to see how they could be developed.

| 2.2 | The EESC's Europe 2020 Steering Committee is dedicated to overseeing the work and bringing together national ESCs and similar bodies in Member States to share experiences on how to improve participatory processes under Europe 2020. |
| --- | --- |

2.2

The EESC's Europe 2020 Steering Committee is dedicated to overseeing the work and bringing together national ESCs and similar bodies in Member States to share experiences on how to improve participatory processes under Europe 2020.

| 2.3 | The role played by the EESC in the implementation of the Europe 2020 Strategy (1) is now fully recognised and the Committee wishes to share its recommendations on how to improve participatory processes under the 2020 Strategy and the European Semester. |
| --- | --- |

2.3

The role played by the EESC in the implementation of the Europe 2020 Strategy (1) is now fully recognised and the Committee wishes to share its recommendations on how to improve participatory processes under the 2020 Strategy and the European Semester.

3.   Europe 2020 – a new system

| 3.1 | The European Union and its population are facing a severe economic and financial crisis that has had a severe impact on the whole of the European Union and its citizens. Many Member States have experienced extremely strained situations, and increased levels of unemployment remain a concern. The EESC therefore considers, as expressed in a great many of its opinions over the last three years, that the Europe 2020 Strategy is more important than ever as it offers a comprehensive agenda for reform aimed at securing sustainable growth and building a more resilient European Union. |
| --- | --- |

3.1

The European Union and its population are facing a severe economic and financial crisis that has had a severe impact on the whole of the European Union and its citizens. Many Member States have experienced extremely strained situations, and increased levels of unemployment remain a concern. The EESC therefore considers, as expressed in a great many of its opinions over the last three years, that the Europe 2020 Strategy is more important than ever as it offers a comprehensive agenda for reform aimed at securing sustainable growth and building a more resilient European Union.

| 3.2 | The Europe 2020 Strategy for smart, sustainable and inclusive growth is the growth strategy setting out targets in key policy areas at EU and national level. It is very wide in scope with the overall ambition of supporting smart, sustainable and inclusive growth and covering developments in innovation and R&D, climate change, energy, unemployment, industrial policy and social and territorial cohesion, addressing poverty levels, cohesion policy and much more. |
| --- | --- |

3.2

The Europe 2020 Strategy for smart, sustainable and inclusive growth is the growth strategy setting out targets in key policy areas at EU and national level. It is very wide in scope with the overall ambition of supporting smart, sustainable and inclusive growth and covering developments in innovation and R&D, climate change, energy, unemployment, industrial policy and social and territorial cohesion, addressing poverty levels, cohesion policy and much more.

| 3.3 | The governance of Europe 2020 aims to bring together European, national and shared competences in a multilayer system, thus helping to enhance the legitimacy of deepening European integration. Compared to the Lisbon Strategy, Europe 2020 has interlinked flagship initiatives that provide focus and support in important thematic areas, priorities, headline targets, and a reinforced and rigorous oversight system – with the option of critical assessments of developments (or the lack of them) at national level. |
| --- | --- |

3.3

The governance of Europe 2020 aims to bring together European, national and shared competences in a multilayer system, thus helping to enhance the legitimacy of deepening European integration. Compared to the Lisbon Strategy, Europe 2020 has interlinked flagship initiatives that provide focus and support in important thematic areas, priorities, headline targets, and a reinforced and rigorous oversight system – with the option of critical assessments of developments (or the lack of them) at national level.

| 3.4 | Compared to the Lisbon Strategy, the reporting mechanism is different, not only because it is more highly concentrated, but because it is now aligned with the processes under the new and improved economic governance systems so that, for example, the Stability and Convergence Programme and National Reform Programmes are submitted to the European Commission at the same time allowing for a more complete view of where individual Member States are and where they intend to go. |
| --- | --- |

3.4

Compared to the Lisbon Strategy, the reporting mechanism is different, not only because it is more highly concentrated, but because it is now aligned with the processes under the new and improved economic governance systems so that, for example, the Stability and Convergence Programme and National Reform Programmes are submitted to the European Commission at the same time allowing for a more complete view of where individual Member States are and where they intend to go.

| 3.5 | A change in the process was first highlighted in the Europe 2020 Strategy document itself which made it clear that "we need greater ownership" and that to this end "the contribution of stakeholders at national and regional level and of the social partners needs also to be enhanced". A specific commitment was made that both the EESC and the Committee of the Regions should be more closely associated. This need for participatory processes has been repeated on several occasions, most importantly in the European Council conclusions of March 2010 and in the Guidance for drafting, implementing and monitoring National Reform Programmes under the Europe 2020 Strategy issued by the European Commission which reinforces that "it will be important to closely associate national parliaments, social partners, regions and other stakeholders in the preparation of the NRP, so as to increase ownership of the strategy". |
| --- | --- |

3.5

A change in the process was first highlighted in the Europe 2020 Strategy document itself which made it clear that "we need greater ownership" and that to this end "the contribution of stakeholders at national and regional level and of the social partners needs also to be enhanced". A specific commitment was made that both the EESC and the Committee of the Regions should be more closely associated. This need for participatory processes has been repeated on several occasions, most importantly in the European Council conclusions of March 2010 and in the Guidance for drafting, implementing and monitoring National Reform Programmes under the Europe 2020 Strategy issued by the European Commission which reinforces that "it will be important to closely associate national parliaments, social partners, regions and other stakeholders in the preparation of the NRP, so as to increase ownership of the strategy".

4.   Experience of the European Semester

| 4.1 | Three years into the Europe 2020 Strategy it is clear that many Member States are committed to involving the social partners and organised civil society in the European Semester and have involved these partners in their national processes. However, the application of this commitment is patchy, with varying levels of commitment seen and even where this commitment exists, varying levels of real involvement of partners in the process. While many Member States do inform and consult with their partners, the process often lacks focus and, from the point of view of those taking part, can feel disjointed or lacking in overall strategy. In particular, concerns have been raised by the EESC and others about the very tight deadlines, often leaving virtually no time for a proper discussion with the social partners, civil society organisations or regional and national parliaments. Nor are these concerns solely felt at the national level; many organisations at European level have questioned whether the European Semester process and governance, as well as monitoring under the Europe 2020 Strategy could be improved. The European Parliament has made policy recommendations in order to better define its own role and the contribution that it could make (2) and the Committee of the Regions is preparing to issue its own guidelines shortly. |
| --- | --- |

4.1

Three years into the Europe 2020 Strategy it is clear that many Member States are committed to involving the social partners and organised civil society in the European Semester and have involved these partners in their national processes. However, the application of this commitment is patchy, with varying levels of commitment seen and even where this commitment exists, varying levels of real involvement of partners in the process. While many Member States do inform and consult with their partners, the process often lacks focus and, from the point of view of those taking part, can feel disjointed or lacking in overall strategy. In particular, concerns have been raised by the EESC and others about the very tight deadlines, often leaving virtually no time for a proper discussion with the social partners, civil society organisations or regional and national parliaments. Nor are these concerns solely felt at the national level; many organisations at European level have questioned whether the European Semester process and governance, as well as monitoring under the Europe 2020 Strategy could be improved. The European Parliament has made policy recommendations in order to better define its own role and the contribution that it could make (2) and the Committee of the Regions is preparing to issue its own guidelines shortly.

| 4.2 | Within the EESC, the establishment of the Europe 2020 Steering Committee has provided an essential focus to our work; providing the EESC with one group that has oversight of all that the European 2020 Strategy covers and the proposals linked to it, rather than only seeing it piecemeal. Representatives of the Commission and other stakeholders regularly attend meetings of the Steering Committee. To strengthen the link to national bodies, the Steering Committee regularly invites the national Economic and Social Councils and similar institutions to key meetings of the European Semester and organises Europe 2020-related events locally in cooperation with national civil society actors. These efforts should be stepped up and expanded. |
| --- | --- |

4.2

Within the EESC, the establishment of the Europe 2020 Steering Committee has provided an essential focus to our work; providing the EESC with one group that has oversight of all that the European 2020 Strategy covers and the proposals linked to it, rather than only seeing it piecemeal. Representatives of the Commission and other stakeholders regularly attend meetings of the Steering Committee. To strengthen the link to national bodies, the Steering Committee regularly invites the national Economic and Social Councils and similar institutions to key meetings of the European Semester and organises Europe 2020-related events locally in cooperation with national civil society actors. These efforts should be stepped up and expanded.

| 4.3 | The role that the EESC has played in bringing together the national Economic and Social Councils and similar bodies, although not solely focused on the European Semester and the Europe 2020 Strategy, has also proved useful in developing our and their analysis and understanding of the situations across the European Union and strengthening the proposals that both the EESC and they make. |
| --- | --- |

4.3

The role that the EESC has played in bringing together the national Economic and Social Councils and similar bodies, although not solely focused on the European Semester and the Europe 2020 Strategy, has also proved useful in developing our and their analysis and understanding of the situations across the European Union and strengthening the proposals that both the EESC and they make.

5.   Value and use of participatory processes

| 5.1 | It is clear that in order to optimise the impact of the European Semester, improving and increasing participatory processes under Europe 2020 would benefit the strategy itself and ultimately the well-being of citizens. |
| --- | --- |

5.1

It is clear that in order to optimise the impact of the European Semester, improving and increasing participatory processes under Europe 2020 would benefit the strategy itself and ultimately the well-being of citizens.

| 5.2 | The European Union and its Member States often make reference to the usefulness of participatory processes and the involvement of organised civil society. The social partners and the broader public in fact have a number of different processes and systems in place; it is useful to be clear about why this is actually so important and what can potentially be gained from a properly functioning system ensuring greater participation. Proactively engaging with the social partners and organised civil society can generate:






  — | a greater "footprint" for the spread of information throughout the European Union and a considerable ripple effect, |
| --- | --- | --- |

5.2

The European Union and its Member States often make reference to the usefulness of participatory processes and the involvement of organised civil society. The social partners and the broader public in fact have a number of different processes and systems in place; it is useful to be clear about why this is actually so important and what can potentially be gained from a properly functioning system ensuring greater participation. Proactively engaging with the social partners and organised civil society can generate:

—

a greater "footprint" for the spread of information throughout the European Union and a considerable ripple effect,

| — | greater ownership of the strategies if they are felt to be generated by all concerned, |
| --- | --- |

—

greater ownership of the strategies if they are felt to be generated by all concerned,

| — | an early warning system - often by being much closer to the ground, civil society organisations and the social partners can provide an early warning system on developing micro-trends long before they would be seen at national or European level, |
| --- | --- |

—

an early warning system - often by being much closer to the ground, civil society organisations and the social partners can provide an early warning system on developing micro-trends long before they would be seen at national or European level,

| — | capacity to test ideas and develop solutions - not surprisingly, those closest to the situations are often able to road test proposals before they are implemented fully and frequently provide very pragmatic and effective solutions, |
| --- | --- |

—

capacity to test ideas and develop solutions - not surprisingly, those closest to the situations are often able to road test proposals before they are implemented fully and frequently provide very pragmatic and effective solutions,

| — | better implementation - in many cases it is the social partners and civil society organisations themselves who will be responsible for the actual implementation of proposals on the ground. |
| --- | --- |

—

better implementation - in many cases it is the social partners and civil society organisations themselves who will be responsible for the actual implementation of proposals on the ground.

6.   Specific proposals to improve the participatory processes under Europe 2020

| 6.1 | In looking at the processes used to date at both European and national level, the EESC believes that there is much to be done and that these processes can be built up to develop a system that will truly deliver a solid partnership among the European institutions, national governments, social partners, civil society organisations, national and regional parliaments and other stakeholders. Much of this will require focused and concerted effort and will not be achieved quickly. However, the EESC feels such systems should be developed by gradually building up a strategic and comprehensive multi-layered partnership process, while at the same time quickly implementing simple actions that could provide improvements in the short term. |
| --- | --- |

6.1

In looking at the processes used to date at both European and national level, the EESC believes that there is much to be done and that these processes can be built up to develop a system that will truly deliver a solid partnership among the European institutions, national governments, social partners, civil society organisations, national and regional parliaments and other stakeholders. Much of this will require focused and concerted effort and will not be achieved quickly. However, the EESC feels such systems should be developed by gradually building up a strategic and comprehensive multi-layered partnership process, while at the same time quickly implementing simple actions that could provide improvements in the short term.

| 6.2 | Most importantly, the EESC calls upon all European institutions and national governments to renew their political commitment to more regularly and systematically involve the social partners, civil society organisations, national parliaments, regional and local authorities and all other stakeholders, ensuring that this is done as comprehensively as possible in the strong, viable and sustainable participatory processes under Europe 2020. The Lisbon Treaty stresses the need to consult civil society at European level in the decision-making process. If the Member States are to acquire for themselves more ownership of and engagement in both the 2020 Strategy and the European process, they should exercise the same discipline, consulting ESCs and similar bodies as often as possible. |
| --- | --- |

6.2

Most importantly, the EESC calls upon all European institutions and national governments to renew their political commitment to more regularly and systematically involve the social partners, civil society organisations, national parliaments, regional and local authorities and all other stakeholders, ensuring that this is done as comprehensively as possible in the strong, viable and sustainable participatory processes under Europe 2020. The Lisbon Treaty stresses the need to consult civil society at European level in the decision-making process. If the Member States are to acquire for themselves more ownership of and engagement in both the 2020 Strategy and the European process, they should exercise the same discipline, consulting ESCs and similar bodies as often as possible.

7.   The EESC

| 7.1 | With regard to its own role, the EESC considers that it is vital that it continues its focus and strategic engagement with all parts of the Europe 2020 Strategy, in order to maintain the capacity to see the possible synergies generated by the strategy and its constituent parts. |
| --- | --- |

7.1

With regard to its own role, the EESC considers that it is vital that it continues its focus and strategic engagement with all parts of the Europe 2020 Strategy, in order to maintain the capacity to see the possible synergies generated by the strategy and its constituent parts.

| 7.2 | The EESC believes that the work undertaken by its own Europe 2020 Steering Committee should be continued and developed. The Steering Committee needs to retain its focus on the Strategy and its implications for the general public, and should build on its internal communication with those members not involved in the work of the Steering Committee in order to ensure that all benefit from the Steering Committee's overviews and insight. |
| --- | --- |

7.2

The EESC believes that the work undertaken by its own Europe 2020 Steering Committee should be continued and developed. The Steering Committee needs to retain its focus on the Strategy and its implications for the general public, and should build on its internal communication with those members not involved in the work of the Steering Committee in order to ensure that all benefit from the Steering Committee's overviews and insight.

| 7.3 | The EESC considers that the work that it has been gradually achieving in coordinating the connections between and work of national Economic and Social Councils, where they exist, has had a very positive impact, but could be improved. Many of these organisations also have a role to play at national level in the Europe 2020 Strategy, as do many of their members. As regards improving involvement in the Europe 2020 Strategy, the EESC believes that this is an area where rapid, simple action could yield significant benefits. The EESC believes that it is ideally placed to become the European contact point for the national Economic and Social Councils and similar bodies, especially in assisting them with their own work under Europe 2020. The EESC is willing to make such a commitment and to begin this process of further strengthening contacts and cooperation by involving the national Economic and Social Councils and similar bodies in an event focusing on the Europe 2020 Strategy at the earliest opportunity. |
| --- | --- |

7.3

The EESC considers that the work that it has been gradually achieving in coordinating the connections between and work of national Economic and Social Councils, where they exist, has had a very positive impact, but could be improved. Many of these organisations also have a role to play at national level in the Europe 2020 Strategy, as do many of their members. As regards improving involvement in the Europe 2020 Strategy, the EESC believes that this is an area where rapid, simple action could yield significant benefits. The EESC believes that it is ideally placed to become the European contact point for the national Economic and Social Councils and similar bodies, especially in assisting them with their own work under Europe 2020. The EESC is willing to make such a commitment and to begin this process of further strengthening contacts and cooperation by involving the national Economic and Social Councils and similar bodies in an event focusing on the Europe 2020 Strategy at the earliest opportunity.

8.   Acting quickly to make short-term changes

| 8.1 | The EESC strongly supports the Cypriot Presidency's intention to focus on strengthening the participatory processes under the Europe 2020 process and to devote part of the Informal EPSCO in July 2012 to this work. The EESC fully supports this as a strong start for Member States and the European Commission to fully consider how they can each improve upon what they do. |
| --- | --- |

8.1

The EESC strongly supports the Cypriot Presidency's intention to focus on strengthening the participatory processes under the Europe 2020 process and to devote part of the Informal EPSCO in July 2012 to this work. The EESC fully supports this as a strong start for Member States and the European Commission to fully consider how they can each improve upon what they do.

| 8.2 | The EESC calls upon all Member States to provide clarification at national level as to which government agencies are responsible for which measures under Europe 2020, and the relationship between the agencies responsible for coordinating or monitoring the National Reform Programmes and those agencies responsible for the actual implementation. Even a simple clarification of this in each Member State would enable actors to interact with the correct bodies to better effect. |
| --- | --- |

8.2

The EESC calls upon all Member States to provide clarification at national level as to which government agencies are responsible for which measures under Europe 2020, and the relationship between the agencies responsible for coordinating or monitoring the National Reform Programmes and those agencies responsible for the actual implementation. Even a simple clarification of this in each Member State would enable actors to interact with the correct bodies to better effect.

| 8.3 | The EESC believes that full transparency as to the forms of participation used in each Member State as well as descriptions of the processes and instruments that governments intend to use will provide clarity for everyone as to what is happening, why and how. |
| --- | --- |

8.3

The EESC believes that full transparency as to the forms of participation used in each Member State as well as descriptions of the processes and instruments that governments intend to use will provide clarity for everyone as to what is happening, why and how.

| 8.4 | The EESC believes that the European Commission and Member States should urgently review the timing of the different actions under the European Semester. The most persistent challenge pointed out by nearly all stakeholders in the existing structures is the lack of adequate time allowed for any sort of considered response or proper debate. As a matter of urgency, the Member States should consider the deadlines that they currently use and how those could be made more reasonable. |
| --- | --- |

8.4

The EESC believes that the European Commission and Member States should urgently review the timing of the different actions under the European Semester. The most persistent challenge pointed out by nearly all stakeholders in the existing structures is the lack of adequate time allowed for any sort of considered response or proper debate. As a matter of urgency, the Member States should consider the deadlines that they currently use and how those could be made more reasonable.

| 8.5 | The EESC strongly encourages regional and local authorities to deepen their involvement in the Europe 2020 processes within their national framework and directly at EU level. The establishment by the Committee of the Regions of the Europe 2020 Monitoring Platform is an excellent development towards this objective. The EESC believes that this greater involvement should be supported by national governments. The insights of local and regional authorities on local developments and potential applications is a key part of what should be put in place for Europe 2020 to play its full potential role. |
| --- | --- |

8.5

The EESC strongly encourages regional and local authorities to deepen their involvement in the Europe 2020 processes within their national framework and directly at EU level. The establishment by the Committee of the Regions of the Europe 2020 Monitoring Platform is an excellent development towards this objective. The EESC believes that this greater involvement should be supported by national governments. The insights of local and regional authorities on local developments and potential applications is a key part of what should be put in place for Europe 2020 to play its full potential role.

9.   Developing a long-term comprehensive participatory process for Europe 2020

| 9.1 | The EESC believes that there are very useful models already in place for the creation of strong structures for permanent dialogue. The EESC believes that the Code of Good Practice for Civil Participation in the decision-making process launched by the Council of Europe (3) provides an excellent framework and set of principles for this work which can be applied to the Europe 2020 Strategy. Using such a set of principles will allow the European Union and the Member States to gradually move discussions along the spectrum of involvement from fairly low levels of involvement primarily focused on information giving, through to open consultation, a developing dialogue among the participants until ultimately a true partnership can be developed – the four major steps along the spectrum of participatory processes as described in the Code. The EESC believes that the processes under Europe 2020 should begin to gradually move along this spectrum of involvement. The Code also provides a number of very useful tools that could be applied to Europe 2020 processes. |
| --- | --- |

9.1

The EESC believes that there are very useful models already in place for the creation of strong structures for permanent dialogue. The EESC believes that the Code of Good Practice for Civil Participation in the decision-making process launched by the Council of Europe (3) provides an excellent framework and set of principles for this work which can be applied to the Europe 2020 Strategy. Using such a set of principles will allow the European Union and the Member States to gradually move discussions along the spectrum of involvement from fairly low levels of involvement primarily focused on information giving, through to open consultation, a developing dialogue among the participants until ultimately a true partnership can be developed – the four major steps along the spectrum of participatory processes as described in the Code. The EESC believes that the processes under Europe 2020 should begin to gradually move along this spectrum of involvement. The Code also provides a number of very useful tools that could be applied to Europe 2020 processes.

| 9.2 | Organised civil society in Member States should be involved throughout the European Semester. One key process in the area of design is the drafting of the National Reform Programmes. The Member-State drafting process should build on a broad and more collaborative dialogue with the social partners and organised civil society. These actors do not only provide expertise in goal setting and the design of programmes and strategies for areas such as employment, education and social inclusion, they are also fundamental actors in the implementation of these strategies. |
| --- | --- |

9.2

Organised civil society in Member States should be involved throughout the European Semester. One key process in the area of design is the drafting of the National Reform Programmes. The Member-State drafting process should build on a broad and more collaborative dialogue with the social partners and organised civil society. These actors do not only provide expertise in goal setting and the design of programmes and strategies for areas such as employment, education and social inclusion, they are also fundamental actors in the implementation of these strategies.

| 9.3 | Another key step in the European Semester is the publication and review of the Country-Specific Recommendations. The European social partners and organised civil society must be informed and consulted on the country-specific recommendations for each Member State. In this context, timing is crucial so as to permit the involvement of organised civil society at an early stage in the formulation of future prospects for the following cycles. |
| --- | --- |

9.3

Another key step in the European Semester is the publication and review of the Country-Specific Recommendations. The European social partners and organised civil society must be informed and consulted on the country-specific recommendations for each Member State. In this context, timing is crucial so as to permit the involvement of organised civil society at an early stage in the formulation of future prospects for the following cycles.

| 9.4 | The EESC has in previous opinions suggested benchmarking as a way to measure the progress made in the implementation of the EU 2020 Strategy. Here the national ESC or similar organisation analyses and establishes its own priority criteria using statistics which are freely accessible on the Eurostat website. Some ESCs are already practising this and other national ESCs should be encouraged to engage in the same process. With this benchmarking, the stakeholders continuously monitor the implementation of the reforms. This constitutes valuable input into the revision of National Reform Programmes. |
| --- | --- |

9.4

The EESC has in previous opinions suggested benchmarking as a way to measure the progress made in the implementation of the EU 2020 Strategy. Here the national ESC or similar organisation analyses and establishes its own priority criteria using statistics which are freely accessible on the Eurostat website. Some ESCs are already practising this and other national ESCs should be encouraged to engage in the same process. With this benchmarking, the stakeholders continuously monitor the implementation of the reforms. This constitutes valuable input into the revision of National Reform Programmes.

| 9.5 | Steps should be taken to energise the debate on the implementation of the EU 2020 Strategy in Member States, and governments should develop more effective feedback processes about the impact of greater civil and social dialogue on the Strategy. Here the role of civil society in the follow-up can be of specific value. Regular conferences in the Member States involving all relevant stakeholders would be useful but also open hearings in the Parliament presenting the National Reform Programmes. |
| --- | --- |

9.5

Steps should be taken to energise the debate on the implementation of the EU 2020 Strategy in Member States, and governments should develop more effective feedback processes about the impact of greater civil and social dialogue on the Strategy. Here the role of civil society in the follow-up can be of specific value. Regular conferences in the Member States involving all relevant stakeholders would be useful but also open hearings in the Parliament presenting the National Reform Programmes.

| 9.6 | There is a contradiction between the growing awareness among the European institutions about the need to consult organised civil society, and the difficulties currently faced by the majority of national ESCs and similar bodies. These organisations are often mostly financed by public budgets. In many Member States, their budgets have been slashed. This is leading the national Economic and Social Councils or equivalent bodies to focus solely on national priorities and to scale back their participation at European level. European institutions should consider how they could give support and assistance to these organisations, at least in their contribution to the European Semester. |
| --- | --- |

9.6

There is a contradiction between the growing awareness among the European institutions about the need to consult organised civil society, and the difficulties currently faced by the majority of national ESCs and similar bodies. These organisations are often mostly financed by public budgets. In many Member States, their budgets have been slashed. This is leading the national Economic and Social Councils or equivalent bodies to focus solely on national priorities and to scale back their participation at European level. European institutions should consider how they could give support and assistance to these organisations, at least in their contribution to the European Semester.

| 9.7 | As having a main contact point for the follow-up with national ESCs and similar bodies can be of specific value, the European Commission could consider giving the EESC the responsibility and support for organising a conference with all national ESCs or similar bodies and institutions at least once a year, carefully timed to fit in with the European Semester, in order to discuss the European Semester, the 2020 Strategy and their contribution and best practices in this area. |
| --- | --- |

9.7

As having a main contact point for the follow-up with national ESCs and similar bodies can be of specific value, the European Commission could consider giving the EESC the responsibility and support for organising a conference with all national ESCs or similar bodies and institutions at least once a year, carefully timed to fit in with the European Semester, in order to discuss the European Semester, the 2020 Strategy and their contribution and best practices in this area.

10.   Stakeholders

| 10.1 | The EESC believes that the stakeholders themselves could also renew their engagement in the processes under Europe 2020. While believing that the primary responsibility rests with the Member States and that they need to review the processes for engaging partners, stakeholders themselves could learn more from each other and have more confidence in engaging directly with the European institutions as well as national governments. Equally, despite the need for governments to urgently re-think the timing of processes, stakeholders should improve their own anticipation of the stages of the European Semester. |
| --- | --- |

10.1

The EESC believes that the stakeholders themselves could also renew their engagement in the processes under Europe 2020. While believing that the primary responsibility rests with the Member States and that they need to review the processes for engaging partners, stakeholders themselves could learn more from each other and have more confidence in engaging directly with the European institutions as well as national governments. Equally, despite the need for governments to urgently re-think the timing of processes, stakeholders should improve their own anticipation of the stages of the European Semester.

11.   Specific proposals on employment, poverty and exclusion

| 11.1 | In its request to the EESC, the Cypriot Presidency specifically emphasised the need for suggestions on closer involvement of civil society in implementation and follow-up in areas of social policy like poverty and exclusion. The EESC considers that involvement of stakeholders in a structured and regular dialogue at European and national level is critical to providing opportunities to find effective solutions in these policy areas. |
| --- | --- |

11.1

In its request to the EESC, the Cypriot Presidency specifically emphasised the need for suggestions on closer involvement of civil society in implementation and follow-up in areas of social policy like poverty and exclusion. The EESC considers that involvement of stakeholders in a structured and regular dialogue at European and national level is critical to providing opportunities to find effective solutions in these policy areas.

| 11.2 | It is helpful to pursue a stakeholder approach and to cultivate structured dialogue with civil society actors in shaping, implementing and monitoring policy as part of the work of the platform to combat poverty and exclusion. In areas like poverty and exclusion, it is often civil society actors that first register trends and social developments and bring them to wider attention. Their determined efforts to highlight the perspective of users and work to promote prevention, as well as the development and delivery of innovative services for these target groups, offer valuable lessons and experience for strategic efforts to address poverty and exclusion. Here the EESC underlines the important strategic role played by the social economy and NGOs, whose aim is to reduce poverty, promote job creation and develop services that meet society's needs in a creative way. |
| --- | --- |

11.2

It is helpful to pursue a stakeholder approach and to cultivate structured dialogue with civil society actors in shaping, implementing and monitoring policy as part of the work of the platform to combat poverty and exclusion. In areas like poverty and exclusion, it is often civil society actors that first register trends and social developments and bring them to wider attention. Their determined efforts to highlight the perspective of users and work to promote prevention, as well as the development and delivery of innovative services for these target groups, offer valuable lessons and experience for strategic efforts to address poverty and exclusion. Here the EESC underlines the important strategic role played by the social economy and NGOs, whose aim is to reduce poverty, promote job creation and develop services that meet society's needs in a creative way.

| 11.3 | Within this policy field, it is important to mention the National Social Reports (NSRs), which complement the national reform programmes (NRPs) and are drawn up by the Social Protection Committee. Based on the open method of coordination, these reports assess the social dimension of Europe 2020. Taking the annual growth strategy as their point of reference, they identify the most urgently needed reforms and propose concrete measures. It is important to create a way of more effectively involving stakeholders in the NSR process, which does not yet happen to a sufficient extent, and to better link this to the NRPs. It is essential to strengthen the open method of coordination for social protection, taking integrated national strategies as the point of departure to create a stronger link with the European platform against poverty. |
| --- | --- |

11.3

Within this policy field, it is important to mention the National Social Reports (NSRs), which complement the national reform programmes (NRPs) and are drawn up by the Social Protection Committee. Based on the open method of coordination, these reports assess the social dimension of Europe 2020. Taking the annual growth strategy as their point of reference, they identify the most urgently needed reforms and propose concrete measures. It is important to create a way of more effectively involving stakeholders in the NSR process, which does not yet happen to a sufficient extent, and to better link this to the NRPs. It is essential to strengthen the open method of coordination for social protection, taking integrated national strategies as the point of departure to create a stronger link with the European platform against poverty.

| 11.4 | The annual EU-level events against poverty and exclusion should be followed up by a relevant hearing at national level in cooperation with public bodies, people living in poverty, NGOs, organisations in the social economy, the social partners and other civil society actors. The goal should be to identify and analyse progress and shortcomings in this policy area together, and to propose reforms. This event should be timed to coincide with preparation of the NRPs. |
| --- | --- |

11.4

The annual EU-level events against poverty and exclusion should be followed up by a relevant hearing at national level in cooperation with public bodies, people living in poverty, NGOs, organisations in the social economy, the social partners and other civil society actors. The goal should be to identify and analyse progress and shortcomings in this policy area together, and to propose reforms. This event should be timed to coincide with preparation of the NRPs.

| 11.5 | The ongoing dialogue and consultation on specific issues should also be planned in advance to allow sufficient time for interested parties to express their interest. As part of the stakeholder approach, there should also be a review of the social impact of the Annual Growth Survey and the progress that has been made. |
| --- | --- |

11.5

The ongoing dialogue and consultation on specific issues should also be planned in advance to allow sufficient time for interested parties to express their interest. As part of the stakeholder approach, there should also be a review of the social impact of the Annual Growth Survey and the progress that has been made.

| 11.6 | The NRPs and setting of national targets are key aspects of efforts to implement the Europe 2020 Strategy and the political strategies on poverty reduction. It is important to define the poverty-related objective so as to include groups at risk of poverty and cumulative disadvantage, so that strategies and reforms are effectively targeted at these groups. Involvement of, and partnership with, civil society actors are of critical importance here, as these actors are often able early on to identify new at-risk groups or increasing risks for excluded groups. |
| --- | --- |

11.6

The NRPs and setting of national targets are key aspects of efforts to implement the Europe 2020 Strategy and the political strategies on poverty reduction. It is important to define the poverty-related objective so as to include groups at risk of poverty and cumulative disadvantage, so that strategies and reforms are effectively targeted at these groups. Involvement of, and partnership with, civil society actors are of critical importance here, as these actors are often able early on to identify new at-risk groups or increasing risks for excluded groups.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  As supported by the Spring European Council Conclusions in both 2011 and 2012.

1

(2)  "How effective and legitimate is the European Semester? Increasing the role of the European Parliament" 2011.

2

(3)  http://www.coe.int/t/ngo/code_good_prac_en.asp.

3

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/6 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/6

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Opinion of the European Economic and Social Committee on ‘What changes for Europe’s banking sector with the new financial rules?’ (own-initiative opinion)

2012/C 299/02

Rapporteur: Ms NIETYKSZA

Co-rapporteur: Mr GENDRE

On 14 July 2011 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

What changes for Europe's banking sector with the new financial rules?

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 135 votes to 2 with 5 abstentions.

1.   Conclusions and recommendations

| 1.1 | The primary role of the banking sector, which accounts on average for 5 % of EU GDP, should be to finance the real economy – with a particular focus on innovative companies and the growth of SMEs, the driving force of the EU economy – and to safeguard depositors' savings. |
| --- | --- |

1.1

The primary role of the banking sector, which accounts on average for 5 % of EU GDP, should be to finance the real economy – with a particular focus on innovative companies and the growth of SMEs, the driving force of the EU economy – and to safeguard depositors' savings.

| 1.2 | The Committee welcomes the efforts being made by the European Commission and the Member States to bolster the banking sector and to prevent further financial crises by lowering risk levels and mitigating their effects. |
| --- | --- |

1.2

The Committee welcomes the efforts being made by the European Commission and the Member States to bolster the banking sector and to prevent further financial crises by lowering risk levels and mitigating their effects.

| 1.3 | The Committee maintains that lessons need to be learned from recent economic and financial crises and a fresh approach adopted to ensure more effective supervision by national, European and international authorities and increased accountability of financial institutions. |
| --- | --- |

1.3

The Committee maintains that lessons need to be learned from recent economic and financial crises and a fresh approach adopted to ensure more effective supervision by national, European and international authorities and increased accountability of financial institutions.

| 1.4 | The Committee supports the measures aimed at strengthening banks' capital structure and their ability to finance the economy while cautioning banking executives against the temptation to seek very short-term profit and to engage in speculative activities that destabilise the markets.
  The responsibilities of banking executives and of oversight bodies at national and EU levels and within the banks themselves need to be clearly and better defined, so as to promote ethical behaviour on the basis of transparent rules. |
| --- | --- |

1.4

The Committee supports the measures aimed at strengthening banks' capital structure and their ability to finance the economy while cautioning banking executives against the temptation to seek very short-term profit and to engage in speculative activities that destabilise the markets.

The responsibilities of banking executives and of oversight bodies at national and EU levels and within the banks themselves need to be clearly and better defined, so as to promote ethical behaviour on the basis of transparent rules.

| 1.5 | The Committee draws attention to the difficulties that arise from the accumulation of regulatory measures, and to the challenges that have to be faced by the 8 000 European banks in order to finance the economy in a difficult economic environment in Europe, which has been hit by a debt crisis whose scale and consequences have not yet been brought under control. |
| --- | --- |

1.5

The Committee draws attention to the difficulties that arise from the accumulation of regulatory measures, and to the challenges that have to be faced by the 8 000 European banks in order to finance the economy in a difficult economic environment in Europe, which has been hit by a debt crisis whose scale and consequences have not yet been brought under control.

| 1.6 | Europe's banks are facing increased competition from third-country banks, which are not subject in their country of origin to the same legislative and regulatory constraints as banks in Europe. |
| --- | --- |

1.6

Europe's banks are facing increased competition from third-country banks, which are not subject in their country of origin to the same legislative and regulatory constraints as banks in Europe.

| 1.7 | The measures aimed at strengthening banks' capital structure include requirements for increased, better quality capital, enhanced risk coverage, the introduction of a leverage ratio and a new approach to liquidity. These measures are likely to impact on bank balance sheets, and may bring about a substantial decline in profitability. |
| --- | --- |

1.7

The measures aimed at strengthening banks' capital structure include requirements for increased, better quality capital, enhanced risk coverage, the introduction of a leverage ratio and a new approach to liquidity. These measures are likely to impact on bank balance sheets, and may bring about a substantial decline in profitability.

| 1.8 | Consequently, banks are tending to downsize, in order to become more robust, to shift their focus to the most profitable activities, and to reduce their range of financial services in order to have greater control over their risk exposure.
  Some are advocating the need to return to their core business: receiving customers' deposits, protecting savers and financing the real economy. |
| --- | --- |

1.8

Consequently, banks are tending to downsize, in order to become more robust, to shift their focus to the most profitable activities, and to reduce their range of financial services in order to have greater control over their risk exposure.

Some are advocating the need to return to their core business: receiving customers' deposits, protecting savers and financing the real economy.

| 1.9 | The EESC believes that a gradual return to the separation of commercial banking activities from those of corporate and investment banking is desirable. The current global crisis shows that a globalised financial system based on unfettered liberalisation entails a risk of derailment linked to the misuse of this freedom by the markets:






  — | the excessive size of the multinational financial groups makes their governance, supervision by oversight bodies and evaluation by rating agencies very difficult to the point of lacking much credibility; |
| --- | --- | --- |

1.9

The EESC believes that a gradual return to the separation of commercial banking activities from those of corporate and investment banking is desirable. The current global crisis shows that a globalised financial system based on unfettered liberalisation entails a risk of derailment linked to the misuse of this freedom by the markets:

—

the excessive size of the multinational financial groups makes their governance, supervision by oversight bodies and evaluation by rating agencies very difficult to the point of lacking much credibility;

| — | financial instruments have become uncontrollable. While not objecting to financial innovation in principle, it is not acceptable that a financial product can circulate freely on the international market in a less-than-transparent manner while no one knows the nature of the risk involved or where ultimate responsibility lies; |
| --- | --- |

—

financial instruments have become uncontrollable. While not objecting to financial innovation in principle, it is not acceptable that a financial product can circulate freely on the international market in a less-than-transparent manner while no one knows the nature of the risk involved or where ultimate responsibility lies;

| 1.10 | The new capital requirements, particularly the obligation to build up a capital ratio of 9 % of the highest quality capital – by 30 June 2012 in the case of the 60 systemic banks, and between 2015 and the end of 2018 for the rest – could have adverse consequences for local or cooperative banks, which are more SME- and micro-enterprise friendly. Capital requirements should not discriminate against any particular group of banks. |
| --- | --- |

1.10

The new capital requirements, particularly the obligation to build up a capital ratio of 9 % of the highest quality capital – by 30 June 2012 in the case of the 60 systemic banks, and between 2015 and the end of 2018 for the rest – could have adverse consequences for local or cooperative banks, which are more SME- and micro-enterprise friendly. Capital requirements should not discriminate against any particular group of banks.

| 1.11 | If banks face difficulties in raising capital, it will be harder for SMEs to obtain the finance they need. A credit crunch and a rise in bank charges must be averted. The Committee thus urges the Commission, the European Banking Authority (EBA) and the national supervisory authorities to ensure that the capital buffers of small banks are adapted to their economic model. |
| --- | --- |

1.11

If banks face difficulties in raising capital, it will be harder for SMEs to obtain the finance they need. A credit crunch and a rise in bank charges must be averted. The Committee thus urges the Commission, the European Banking Authority (EBA) and the national supervisory authorities to ensure that the capital buffers of small banks are adapted to their economic model.

| 1.12 | Prudential requirements are already leading to tighter, more costly credit for small businesses, including start-ups, innovative companies and the more risky ventures. Europe will not be able to achieve the goals of the Europe 2020 strategy, the Digital Agenda, Cloud-active Europe, the Energy roadmap 2050 or the Small Business Act if the share of funding for SMEs falls following implementation of the new prudential measures.
  The Committee calls on the Commission to very closely monitor trends in bank lending and bank charges to businesses and individuals. |
| --- | --- |

1.12

Prudential requirements are already leading to tighter, more costly credit for small businesses, including start-ups, innovative companies and the more risky ventures. Europe will not be able to achieve the goals of the Europe 2020 strategy, the Digital Agenda, Cloud-active Europe, the Energy roadmap 2050 or the Small Business Act if the share of funding for SMEs falls following implementation of the new prudential measures.

The Committee calls on the Commission to very closely monitor trends in bank lending and bank charges to businesses and individuals.

| 1.13 | The measures aimed at increasing the effectiveness of market supervision by national, European and international authorities will have far-reaching consequences for the organisation of banks and internal oversight. This will place greater responsibility on management, with the requirement to assess the return on equity more carefully and improve risk management. The banks will have to draw up their sales forecasts and product and banking portfolio development strategies with due regard for their return and an assessment of ability to absorb capital. This will lead to restructuring with a view to increasing the importance of IT, audit, and risk management departments and their staffing levels, at the expense of other, more traditional areas. |
| --- | --- |

1.13

The measures aimed at increasing the effectiveness of market supervision by national, European and international authorities will have far-reaching consequences for the organisation of banks and internal oversight. This will place greater responsibility on management, with the requirement to assess the return on equity more carefully and improve risk management. The banks will have to draw up their sales forecasts and product and banking portfolio development strategies with due regard for their return and an assessment of ability to absorb capital. This will lead to restructuring with a view to increasing the importance of IT, audit, and risk management departments and their staffing levels, at the expense of other, more traditional areas.

| 1.14 | Banks in the EU employ over 3 million people, the vast majority in retail banking. Since early 2011, more than 150 000 jobs have been cut and many branches have closed. Various forecasts estimate that a further 100 000 jobs will be lost in 2012. The Committee calls on the Commission to help improve sectoral social dialogue and to develop consultation with the social partners on the initiatives affecting the development of the profession. |
| --- | --- |

1.14

Banks in the EU employ over 3 million people, the vast majority in retail banking. Since early 2011, more than 150 000 jobs have been cut and many branches have closed. Various forecasts estimate that a further 100 000 jobs will be lost in 2012. The Committee calls on the Commission to help improve sectoral social dialogue and to develop consultation with the social partners on the initiatives affecting the development of the profession.

| 1.15 | When the new rules are implemented, the Committee would like to see account being taken of the different situations of the Member States, and particularly the new EU Member States, whose credit markets have not achieved their full potential and whose banks are mostly owned by the major European and global banking groups. To improve their balance sheets and meet the new requirements, these groups may be tempted to transfer funds from their subsidiaries and curtail their investments, greatly reducing the financing of the economies of these countries. The Committee points out here the commitment made under the Vienna initiative to avoid an outflow of funds. It is necessary to protect certain particular models such as the cooperative banks in Germany and Poland. This sector comprises over 300 banks in Poland alone and to achieve the radical reform that the new rules entail will require a transition period. |
| --- | --- |

1.15

When the new rules are implemented, the Committee would like to see account being taken of the different situations of the Member States, and particularly the new EU Member States, whose credit markets have not achieved their full potential and whose banks are mostly owned by the major European and global banking groups. To improve their balance sheets and meet the new requirements, these groups may be tempted to transfer funds from their subsidiaries and curtail their investments, greatly reducing the financing of the economies of these countries. The Committee points out here the commitment made under the Vienna initiative to avoid an outflow of funds. It is necessary to protect certain particular models such as the cooperative banks in Germany and Poland. This sector comprises over 300 banks in Poland alone and to achieve the radical reform that the new rules entail will require a transition period.

| 1.16 | To support the harmonisation process, the remit of the European Banking Authority needs to be bolstered. The Committee points out that the free movement of capital is ensured at EU level, while the security of deposits and bank solvency fall under the remit of the national authorities. The credit market differs from one Member State to the next. In countries where credit is underdeveloped, catching up too quickly in terms of debt levels can create a speculative bubble. If the prudential rules are implemented uniformly across the EU, national authorities will be unable to intervene in time. However, it is worth considering the suggestion of several European leaders to create an EU banking union to establish EU-level supervision for systemic banks and a guarantee for deposits in case of bankruptcy. |
| --- | --- |

1.16

To support the harmonisation process, the remit of the European Banking Authority needs to be bolstered. The Committee points out that the free movement of capital is ensured at EU level, while the security of deposits and bank solvency fall under the remit of the national authorities. The credit market differs from one Member State to the next. In countries where credit is underdeveloped, catching up too quickly in terms of debt levels can create a speculative bubble. If the prudential rules are implemented uniformly across the EU, national authorities will be unable to intervene in time. However, it is worth considering the suggestion of several European leaders to create an EU banking union to establish EU-level supervision for systemic banks and a guarantee for deposits in case of bankruptcy.

| 1.17 | At global level, European banks are in danger of becoming less competitive in relation to their competitors. For banks raising additional own funds, most of the available capital is in sovereign wealth funds and Asian and Middle Eastern banks. There is a real danger that the ownership of the EU banking system will move out of the control of EU Member States. For this reason, the Committee calls on the European authorities to step up their efforts to ensure that the same prudential rules will apply worldwide, with the aim of achieving a genuinely global set of rules. |
| --- | --- |

1.17

At global level, European banks are in danger of becoming less competitive in relation to their competitors. For banks raising additional own funds, most of the available capital is in sovereign wealth funds and Asian and Middle Eastern banks. There is a real danger that the ownership of the EU banking system will move out of the control of EU Member States. For this reason, the Committee calls on the European authorities to step up their efforts to ensure that the same prudential rules will apply worldwide, with the aim of achieving a genuinely global set of rules.

| 1.18 | The new IT technologies: e-banking, home banking, secure virtual transactions (electronic signatures) and cloud computing are revolutionising traditional banking services. The banks will have the difficult task of financing the real economy while having to cope not only with higher funding costs following the introduction of new technologies, but also lower profitability. The Committee feels that all banking stakeholders should be supported through this far-reaching change. |
| --- | --- |

1.18

The new IT technologies: e-banking, home banking, secure virtual transactions (electronic signatures) and cloud computing are revolutionising traditional banking services. The banks will have the difficult task of financing the real economy while having to cope not only with higher funding costs following the introduction of new technologies, but also lower profitability. The Committee feels that all banking stakeholders should be supported through this far-reaching change.

2.   Introduction

| 2.1 | The financial crisis and its impact on the economy have led governments and financial authorities to look at the root causes of the collapse of a financial system thought to be established, well regulated and properly supervised. |
| --- | --- |

2.1

The financial crisis and its impact on the economy have led governments and financial authorities to look at the root causes of the collapse of a financial system thought to be established, well regulated and properly supervised.

| 2.2 | The initial financial and monetary measures were taken in some haste (substantial cut in base rates, liquidity, state aid); longer-term measures have been aimed at bolstering the structure of the markets and preventing future systemic crises: hence their regulatory, supervisory or fiscal nature. While the supranational organisations – the IMF, the G20, the BIS, the Commission – have adopted an open attitude to cooperation, there have been differences of opinion. |
| --- | --- |

2.2

The initial financial and monetary measures were taken in some haste (substantial cut in base rates, liquidity, state aid); longer-term measures have been aimed at bolstering the structure of the markets and preventing future systemic crises: hence their regulatory, supervisory or fiscal nature. While the supranational organisations – the IMF, the G20, the BIS, the Commission – have adopted an open attitude to cooperation, there have been differences of opinion.

| 2.3 | Since the 2008 crisis, more than 50 legislative measures have been adopted by the EU. 99 % of the reforms will have been passed by the end of 2011, to come into effect in 2013, with the exception of the core tier one capital ratio, which becomes effective for the 60 banks deemed systemic on 30 June 2012. For the other banks, this measure is to come into effect between 2015 and 2018. |
| --- | --- |

2.3

Since the 2008 crisis, more than 50 legislative measures have been adopted by the EU. 99 % of the reforms will have been passed by the end of 2011, to come into effect in 2013, with the exception of the core tier one capital ratio, which becomes effective for the 60 banks deemed systemic on 30 June 2012. For the other banks, this measure is to come into effect between 2015 and 2018.

| 2.4 | The third Basel Accord, published in November 2010, requires banks to hold more higher-quality capital in order to withstand future crises, and in particular to hold:






  — | 4,5 % of common equity and 6 % of tier one capital of risk-weighted assets; |
| --- | --- | --- |

2.4

The third Basel Accord, published in November 2010, requires banks to hold more higher-quality capital in order to withstand future crises, and in particular to hold:

—

4,5 % of common equity and 6 % of tier one capital of risk-weighted assets;

| — | a mandatory capital conservation buffer of 2,5 %; and |
| --- | --- |

—

a mandatory capital conservation buffer of 2,5 %; and

| — | a discretionary countercyclical buffer, allowing national regulators to require up to another 2,5 % of capital during periods of high credit growth. |
| --- | --- |

—

a discretionary countercyclical buffer, allowing national regulators to require up to another 2,5 % of capital during periods of high credit growth.

Basel III introduces a minimum 3 % leverage ratio and two mandatory liquidity ratios: the short-term liquidity ratio, which requires banks to hold sufficient high-quality liquid assets to cover their liquidity requirements over 30 days; and the long-term liquidity ratio amounting to a minimum amount of stable funding above their liquidity requirements over one year.

| 2.4.1 | The European Commission put forward its proposals on transposing Basel III into CRD IV in July 2011. This is aimed at strengthening the European banking sector while encouraging the banks to continue to finance the growth of the economy. However, the Commission has not taken any practical initiatives to encourage lending. |
| --- | --- |

2.4.1

The European Commission put forward its proposals on transposing Basel III into CRD IV in July 2011. This is aimed at strengthening the European banking sector while encouraging the banks to continue to finance the growth of the economy. However, the Commission has not taken any practical initiatives to encourage lending.

| 2.5 | The proposals' objectives are to encourage banks to hold more capital in order to resist shocks and to set up a new framework enabling supervisors to monitor banks and take action when they spot risks. |
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2.5

The proposals' objectives are to encourage banks to hold more capital in order to resist shocks and to set up a new framework enabling supervisors to monitor banks and take action when they spot risks.

| 2.6 | CRD IV covers areas of the current Capital Requirements Directive, but it needs to be transposed in a way suitable to each country. |
| --- | --- |

2.6

CRD IV covers areas of the current Capital Requirements Directive, but it needs to be transposed in a way suitable to each country.

| 2.7 | Despite the delays and flaws in the rules adopted, real progress has been made towards a new set of rules. However, the following questions remain:






  — | Are the new rules going to cover the full spectrum of financial practices at global level? |
| --- | --- | --- |

2.7

Despite the delays and flaws in the rules adopted, real progress has been made towards a new set of rules. However, the following questions remain:

—

Are the new rules going to cover the full spectrum of financial practices at global level?

| — | Once market regulation is in place, will it be possible to have confidence in effective supervision? |
| --- | --- |

—

Once market regulation is in place, will it be possible to have confidence in effective supervision?

| — | And will the new rules influence and change the situation for the 8 000-plus banks in Europe's banking sector (structures, consolidation, distribution methods, staffing), and their behaviour with regard to the financing of the economy: credit for businesses, authorities, individuals? |
| --- | --- |

—

And will the new rules influence and change the situation for the 8 000-plus banks in Europe's banking sector (structures, consolidation, distribution methods, staffing), and their behaviour with regard to the financing of the economy: credit for businesses, authorities, individuals?

3.   Adverse financial and economic conditions

| 3.1 | Europe's banks are currently having to cope with sudden regulatory and economic changes that are giving rise to concerns as regards their ability to fulfil their role of financing the economy at a time of economic downturn triggered by the debt crisis, which is particularly affecting the euro area. |
| --- | --- |

3.1

Europe's banks are currently having to cope with sudden regulatory and economic changes that are giving rise to concerns as regards their ability to fulfil their role of financing the economy at a time of economic downturn triggered by the debt crisis, which is particularly affecting the euro area.

| 3.2 | Upon implementation of the Basel Committee measures (Basel III), banks are required to build up their capital, to comply with very high, long-term NSFR liquidity ratios and to create prudential capital. |
| --- | --- |

3.2

Upon implementation of the Basel Committee measures (Basel III), banks are required to build up their capital, to comply with very high, long-term NSFR liquidity ratios and to create prudential capital.

| 3.3 | Stress testing of the banks, carried out in two phases, has failed to assuage doubts over the impact of a default by one or more members of the euro area. |
| --- | --- |

3.3

Stress testing of the banks, carried out in two phases, has failed to assuage doubts over the impact of a default by one or more members of the euro area.

| 3.4 | A lack of confidence has taken hold in the international financial community sparking liquidity problems on the interbank market. This has led banks to shift their focus to the safest investments. |
| --- | --- |

3.4

A lack of confidence has taken hold in the international financial community sparking liquidity problems on the interbank market. This has led banks to shift their focus to the safest investments.

| 3.5 | Against this backdrop, the ECB has intervened twice and offered a total of EUR 1 000 billion in three-year loans to the banking sector at a rate of 1 %. This facility has been vital to restoring confidence on the interbank market and keeping credit flowing in the economy. However, a substantial tranche of these funds has been redeposited with the ECB, and another portion used to buy public debt. The Committee thinks that the ECB should devise a means of tracking the use of these funds. |
| --- | --- |

3.5

Against this backdrop, the ECB has intervened twice and offered a total of EUR 1 000 billion in three-year loans to the banking sector at a rate of 1 %. This facility has been vital to restoring confidence on the interbank market and keeping credit flowing in the economy. However, a substantial tranche of these funds has been redeposited with the ECB, and another portion used to buy public debt. The Committee thinks that the ECB should devise a means of tracking the use of these funds.

| 3.6 | The need to recapitalise the banks, estimated by the European Banking Authority to require in excess of EUR 100 billion, is becoming increasingly urgent. |
| --- | --- |

3.6

The need to recapitalise the banks, estimated by the European Banking Authority to require in excess of EUR 100 billion, is becoming increasingly urgent.

| 3.7 | Lending to businesses, particularly SMEs and authorities, and to individuals, is becoming subject to increasing stringency. The associated risks are being carefully scrutinised by the banks, which is pushing up the costs of this financing. At the same time, the alternative of financing businesses through the financial markets is even more difficult. This situation, coupled with austerity policies, has fuelled predictions of little or no growth, apart from a very few exceptions, in the year 2012 across the entire European Union. |
| --- | --- |

3.7

Lending to businesses, particularly SMEs and authorities, and to individuals, is becoming subject to increasing stringency. The associated risks are being carefully scrutinised by the banks, which is pushing up the costs of this financing. At the same time, the alternative of financing businesses through the financial markets is even more difficult. This situation, coupled with austerity policies, has fuelled predictions of little or no growth, apart from a very few exceptions, in the year 2012 across the entire European Union.

4.   Supervision and regulation of the banking sector

| 4.1 | In this regard, it is important to think back to the subprime crisis. Warning signs that a subprime crisis was about to erupt should have been heeded by the supervisory authorities. No one doubted the return on an investment that delivered a profit to the bankers and their clients. Although the FDIC warned against these products, no action was taken by the Federal Reserve during the period 2002-2006. |
| --- | --- |

4.1

In this regard, it is important to think back to the subprime crisis. Warning signs that a subprime crisis was about to erupt should have been heeded by the supervisory authorities. No one doubted the return on an investment that delivered a profit to the bankers and their clients. Although the FDIC warned against these products, no action was taken by the Federal Reserve during the period 2002-2006.

| 4.2 | The collapse of Lehman Brothers bank could have been avoided if the oversight bodies had noticed its severe liquidity problems in time. The danger posed by mortgages offered at 100 % of the value of the property and sold on in bundles by financial intermediaries was beyond the control of anyone. To prevent future crises, measures should be introduced bestowing personal liability on the directors of financial institutions for lack of proper supervision. |
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4.2

The collapse of Lehman Brothers bank could have been avoided if the oversight bodies had noticed its severe liquidity problems in time. The danger posed by mortgages offered at 100 % of the value of the property and sold on in bundles by financial intermediaries was beyond the control of anyone. To prevent future crises, measures should be introduced bestowing personal liability on the directors of financial institutions for lack of proper supervision.

| 4.3 | While it is true that the crisis erupted as a result of overly complex "toxic" products, it is also true that oversight bodies could have prohibited their creation, or circulation, on the basis of the existing rules.
  The new rules will not be able to provide a cast-iron guarantee against a fresh crisis occurring if supervisory authorities are not given sufficient resources to fulfil their role and if internal oversight remains ineffective. |
| --- | --- |

4.3

While it is true that the crisis erupted as a result of overly complex "toxic" products, it is also true that oversight bodies could have prohibited their creation, or circulation, on the basis of the existing rules.

The new rules will not be able to provide a cast-iron guarantee against a fresh crisis occurring if supervisory authorities are not given sufficient resources to fulfil their role and if internal oversight remains ineffective.

| 4.4 | Given financial deregulation, governments should deliver on their international cooperation commitments so as to prevent uneven regulation across different areas. |
| --- | --- |

4.4

Given financial deregulation, governments should deliver on their international cooperation commitments so as to prevent uneven regulation across different areas.

| 4.5 | The following principles should underpin the new set of rules:






  a) | while the banking profession is open, checks on individuals and on the source of capital should be much more stringent and effective; |
| --- | --- | --- |

4.5

The following principles should underpin the new set of rules:

a)

while the banking profession is open, checks on individuals and on the source of capital should be much more stringent and effective;

| b) | professionals responsible for financial transactions should be subject to authorisation, regulation and oversight; it is imperative that non-banks and shadow banking be eradicated; |
| --- | --- |

b)

professionals responsible for financial transactions should be subject to authorisation, regulation and oversight; it is imperative that non-banks and shadow banking be eradicated;

| c) | new financial products should be subject to authorisation and supervision by national and European banking authorities. |
| --- | --- |

c)

new financial products should be subject to authorisation and supervision by national and European banking authorities.

| 4.6 | The work of supervisory authorities should be subject to a periodic assessment by an independent body of experts who are no longer working in the financial sector. This assessment should, inter alia, focus on the impact of their decisions on the management of banks. |
| --- | --- |

4.6

The work of supervisory authorities should be subject to a periodic assessment by an independent body of experts who are no longer working in the financial sector. This assessment should, inter alia, focus on the impact of their decisions on the management of banks.

5.   What changes for Europe's banking sector?

| 5.1 | Banks are currently under great pressure as they must redefine their business model following the new rules. The combination of the rules and the difficult economic and financial climate has had the following effects:






  — | all financial institutions have a strengthened capital structure; most are already in compliance with the tier one ratio; banks will tend to reduce the size of their balance sheet to become more robust (footnote: KPMG study, December 2011, Evolving Banking Regulations, A long journey ahead – the outlook for 2012); |
| --- | --- | --- |

5.1

Banks are currently under great pressure as they must redefine their business model following the new rules. The combination of the rules and the difficult economic and financial climate has had the following effects:

—

all financial institutions have a strengthened capital structure; most are already in compliance with the tier one ratio; banks will tend to reduce the size of their balance sheet to become more robust (footnote: KPMG study, December 2011, Evolving Banking Regulations, A long journey ahead – the outlook for 2012);

| — | the Basel III rules and the requirement to meet the liquidity ratio over more than one month (NSFR) and the one-month liquidity coverage ratio (LCR) are increasing banks' capital requirements and the need to maintain excess liquidity, in some cases four times higher than banks' minimum liquidity needs. These measures will adversely effect financial results and lead to reduced balance sheets; |
| --- | --- |

—

the Basel III rules and the requirement to meet the liquidity ratio over more than one month (NSFR) and the one-month liquidity coverage ratio (LCR) are increasing banks' capital requirements and the need to maintain excess liquidity, in some cases four times higher than banks' minimum liquidity needs. These measures will adversely effect financial results and lead to reduced balance sheets;

| — | a difficulty in developing loan books in periods of economic growth, on account of the countercyclical capital buffer. Despite a higher demand for credit, the banks will have to deal with higher capital adequacy ratios. Loan portfolios should maintain this buffer, at the request of the supervisory authorities. The liquidity buffer set by national supervisory bodies may even be as high as 2,5 % of capital requirements. |
| --- | --- |

—

a difficulty in developing loan books in periods of economic growth, on account of the countercyclical capital buffer. Despite a higher demand for credit, the banks will have to deal with higher capital adequacy ratios. Loan portfolios should maintain this buffer, at the request of the supervisory authorities. The liquidity buffer set by national supervisory bodies may even be as high as 2,5 % of capital requirements.

| 5.2 | All of this means:






  5.2.1 | a substantially diminishing average return (ROE) for the banking sector of between 10 % and up to 30 % in extreme cases; this limits the interest of investors in the banking sector and erodes the capitalisation of European banks; |
| --- | --- | --- |

5.2

All of this means:

5.2.1

a substantially diminishing average return (ROE) for the banking sector of between 10 % and up to 30 % in extreme cases; this limits the interest of investors in the banking sector and erodes the capitalisation of European banks;

| 5.2.2 | a reduction in the financing of businesses and authorities and more costly credit, particularly for SMEs, which are often considered to be higher-risk ventures presenting insufficient guarantees or co-financing; |
| --- | --- |

5.2.2

a reduction in the financing of businesses and authorities and more costly credit, particularly for SMEs, which are often considered to be higher-risk ventures presenting insufficient guarantees or co-financing;

| 5.2.3 | a possible reduction in long-term loans, resulting from the introduction in 2018 of the long-term liquidity NSFR ratio and the leverage ratio. This could have a negative influence on the financing of infrastructure investments; |
| --- | --- |

5.2.3

a possible reduction in long-term loans, resulting from the introduction in 2018 of the long-term liquidity NSFR ratio and the leverage ratio. This could have a negative influence on the financing of infrastructure investments;

| 5.2.4 | a requirement to better assess the return on equity and improve risk management. The banks must draw up their sales forecasts and product and banking portfolio development strategies from the point of view of return and in terms of an assessment of ability to absorb capital; |
| --- | --- |

5.2.4

a requirement to better assess the return on equity and improve risk management. The banks must draw up their sales forecasts and product and banking portfolio development strategies from the point of view of return and in terms of an assessment of ability to absorb capital;

| 5.2.5 | banks may face very high costs in terms of auditing and reporting in order to comply with the new rules and meet the requirements of national and international supervisory bodies. This will have an impact on the organisation of banks, and mean structural changes. |
| --- | --- |

5.2.5

banks may face very high costs in terms of auditing and reporting in order to comply with the new rules and meet the requirements of national and international supervisory bodies. This will have an impact on the organisation of banks, and mean structural changes.

| 5.2.6 | There will be a tightening of credit in privileged risk-weighted sectors. Moreover, the introduction of a leverage ratio may in the long term restrict the financing of states, local and regional authorities and other sectors that once enjoyed privileged risk weightings; |
| --- | --- |

5.2.6

There will be a tightening of credit in privileged risk-weighted sectors. Moreover, the introduction of a leverage ratio may in the long term restrict the financing of states, local and regional authorities and other sectors that once enjoyed privileged risk weightings;

| 5.2.7 | one possible consequence of more costly credit is the transfer of some activities to institutions that are not subject to these rules. This works to the advantage of non-banks – lending to individuals at very high rates, often in cash – whose activities are subject to less stringent supervision than applies to the banks. |
| --- | --- |

5.2.7

one possible consequence of more costly credit is the transfer of some activities to institutions that are not subject to these rules. This works to the advantage of non-banks – lending to individuals at very high rates, often in cash – whose activities are subject to less stringent supervision than applies to the banks.

| 5.3 | The new rules do not distinguish between the major banks and small institutions. They may be unsuited to certain countries, such as the new Member States of Central and Eastern Europe, which have high growth rates.






  — | In these countries, the new rules are likely to curtail investment. Banks in these countries are often owned by multinational groups and domestic shareholders hold a minority stake. Parent banks may repatriate a substantial part of the capital of their subsidiaries to meet the rules at global level. Substantially diminished, these subsidiaries will curtail their contribution to financing the local economy. The Committee points out that the free movement of capital is ensured at EU level, while the security of deposits and bank solvency fall under the remit of the national authorities. |
| --- | --- | --- |

5.3

The new rules do not distinguish between the major banks and small institutions. They may be unsuited to certain countries, such as the new Member States of Central and Eastern Europe, which have high growth rates.

—

In these countries, the new rules are likely to curtail investment. Banks in these countries are often owned by multinational groups and domestic shareholders hold a minority stake. Parent banks may repatriate a substantial part of the capital of their subsidiaries to meet the rules at global level. Substantially diminished, these subsidiaries will curtail their contribution to financing the local economy. The Committee points out that the free movement of capital is ensured at EU level, while the security of deposits and bank solvency fall under the remit of the national authorities.

| 5.4 | The credit market differs from one Member State to the next. In countries where credit is underdeveloped, catching up too quickly in terms of debt levels can create a speculative bubble. If the prudential rules are applied at EU level, national authorities will be unable to intervene quickly enough. To support the harmonisation process, the remit of the European Banking Authority needs to be bolstered. |
| --- | --- |

5.4

The credit market differs from one Member State to the next. In countries where credit is underdeveloped, catching up too quickly in terms of debt levels can create a speculative bubble. If the prudential rules are applied at EU level, national authorities will be unable to intervene quickly enough. To support the harmonisation process, the remit of the European Banking Authority needs to be bolstered.

| 5.5 | Certain particular models such as the cooperative banks, which operate independently and healthily, need to be catered for. To achieve the reform that the new rules entail will require a transition period. Cooperative banks are crucial to local development. They act in the interests of their members, who are also their depositors and borrowers: SMEs, farmers, municipalities and many other local players. |
| --- | --- |

5.5

Certain particular models such as the cooperative banks, which operate independently and healthily, need to be catered for. To achieve the reform that the new rules entail will require a transition period. Cooperative banks are crucial to local development. They act in the interests of their members, who are also their depositors and borrowers: SMEs, farmers, municipalities and many other local players.

| 5.6 | The major banks will seek investment that is low-risk and more profitable; in addition, there are fears of higher taxation and losses on the sovereign debt of certain liabilities. |
| --- | --- |

5.6

The major banks will seek investment that is low-risk and more profitable; in addition, there are fears of higher taxation and losses on the sovereign debt of certain liabilities.

| 5.7 | The consolidation process will probably accelerate. Savings banks and cooperative banks can rely on sources of funding that are "autonomous", but the banks that go to the markets to refinance will be forced to merge, with negative consequences for SMEs and consumers. Some banks have been acquired and sold on after their local or regional network has been dismantled. There has been a high incidence of domestic bank concentration in the cooperative and mutual sectors as well as in savings banks. |
| --- | --- |

5.7

The consolidation process will probably accelerate. Savings banks and cooperative banks can rely on sources of funding that are "autonomous", but the banks that go to the markets to refinance will be forced to merge, with negative consequences for SMEs and consumers. Some banks have been acquired and sold on after their local or regional network has been dismantled. There has been a high incidence of domestic bank concentration in the cooperative and mutual sectors as well as in savings banks.

| 5.8 | A lower level of bank profitability, due, inter alia, to higher funding costs, and the extremely restrictive principles governing liquidity management may lead to higher bank charges and interest rates for term deposits as well as for clients' private accounts. |
| --- | --- |

5.8

A lower level of bank profitability, due, inter alia, to higher funding costs, and the extremely restrictive principles governing liquidity management may lead to higher bank charges and interest rates for term deposits as well as for clients' private accounts.

| 5.9 | In the context of the new rules, banks are speeding up their restructuring and use of new technologies (online banking, virtual counters, use of smartphones).






  — | The combination of the use of new technologies and the diversification of products sold is accelerating the reconfiguration of branch networks and the move to non-cash-handling counters. Bank branches are now increasingly limited to advising customers and selling financial products. At the same time, these new means of making transfers and payments require highly secure systems to withstand the cyber attacks that pose a threat to online- and smartphone-banking. |
| --- | --- | --- |

5.9

In the context of the new rules, banks are speeding up their restructuring and use of new technologies (online banking, virtual counters, use of smartphones).

—

The combination of the use of new technologies and the diversification of products sold is accelerating the reconfiguration of branch networks and the move to non-cash-handling counters. Bank branches are now increasingly limited to advising customers and selling financial products. At the same time, these new means of making transfers and payments require highly secure systems to withstand the cyber attacks that pose a threat to online- and smartphone-banking.

| 5.10 | The changes in distribution channels will ultimately lead to a shrinkage of branch networks and a reduction in employment. The implementation of the CRD IV Directive will lead to additional IT and risk-management jobs being created in the banks at the expense of the other bank activities. High-quality social dialogue needs to be developed at all levels on the issues of jobs and training in order to properly manage the ongoing change. |
| --- | --- |

5.10

The changes in distribution channels will ultimately lead to a shrinkage of branch networks and a reduction in employment. The implementation of the CRD IV Directive will lead to additional IT and risk-management jobs being created in the banks at the expense of the other bank activities. High-quality social dialogue needs to be developed at all levels on the issues of jobs and training in order to properly manage the ongoing change.

6.   Future developments

| 6.1 | The European Parliament has given its approval in principle to a tax on financial transactions, which the Commission is considering introducing; however, there is no consensus among Member States, and the US authorities are not keen on the idea. The low rate envisaged should not constitute an unbearable burden for banks or a competitive handicap at global level. As highlighted in two opinions previously adopted by the EESC (1), the purpose of this tax is both to provide new tax revenues, in particular to fund development assistance, and to change the behaviour of the banks to shift the focus towards medium- to long-term funding of the economy, as opposed to very short-term speculative trading. |
| --- | --- |

6.1

The European Parliament has given its approval in principle to a tax on financial transactions, which the Commission is considering introducing; however, there is no consensus among Member States, and the US authorities are not keen on the idea. The low rate envisaged should not constitute an unbearable burden for banks or a competitive handicap at global level. As highlighted in two opinions previously adopted by the EESC (1), the purpose of this tax is both to provide new tax revenues, in particular to fund development assistance, and to change the behaviour of the banks to shift the focus towards medium- to long-term funding of the economy, as opposed to very short-term speculative trading.

| 6.2 | The issue of separating retail banking from corporate and investment banking is currently under consideration in a study instigated by Commissioner Barnier, thus calling into question the universal bank model. The debate is centred on a total separation, a ring-fencing of investment banking activities or prohibiting banks from engaging in proprietary investment. Some experts are against this idea, stressing that universal banks ensure the depth and liquidity of markets and are better at financing the economy. |
| --- | --- |

6.2

The issue of separating retail banking from corporate and investment banking is currently under consideration in a study instigated by Commissioner Barnier, thus calling into question the universal bank model. The debate is centred on a total separation, a ring-fencing of investment banking activities or prohibiting banks from engaging in proprietary investment. Some experts are against this idea, stressing that universal banks ensure the depth and liquidity of markets and are better at financing the economy.

| 6.3 | The development landscape of the financial world and the banking sector has altered over the last thirty years: the opening-up of the markets led to the globalisation of finance; this in turn contributed to the development and proliferation of tax and regulatory havens. Increased competition at global level fostered the emergence of new financial institutions, and new products and services. |
| --- | --- |

6.3

The development landscape of the financial world and the banking sector has altered over the last thirty years: the opening-up of the markets led to the globalisation of finance; this in turn contributed to the development and proliferation of tax and regulatory havens. Increased competition at global level fostered the emergence of new financial institutions, and new products and services.

| 6.4 | The major banking groups have displayed the weaknesses and limitations of a level of growth that precludes good governance. They will tend to downsize so as to become more robust with less marked, more predictable profit fluctuations, and no extravagant bonuses. They will concentrate their activities on their core business, i.e. receiving deposits and providing credit, while limiting their provision of other services, curbing their international expansion and focusing their activities on higher-growth markets, which will restrict their profitability. |
| --- | --- |

6.4

The major banking groups have displayed the weaknesses and limitations of a level of growth that precludes good governance. They will tend to downsize so as to become more robust with less marked, more predictable profit fluctuations, and no extravagant bonuses. They will concentrate their activities on their core business, i.e. receiving deposits and providing credit, while limiting their provision of other services, curbing their international expansion and focusing their activities on higher-growth markets, which will restrict their profitability.

| 6.5 | The new rules will see the awarding of bonuses and executive remuneration practices subject to greater accountability and more stringent controls. |
| --- | --- |

6.5

The new rules will see the awarding of bonuses and executive remuneration practices subject to greater accountability and more stringent controls.

| 6.6 | Banking supervision extended to all types of financial business would allow oversight of non-banks (such as shadow banking). |
| --- | --- |

6.6

Banking supervision extended to all types of financial business would allow oversight of non-banks (such as shadow banking).

| 6.7 | Binding rules on access to the banking profession need to be introduced to enable staff to be selected with the requisite skills to reassure clients and investors. |
| --- | --- |

6.7

Binding rules on access to the banking profession need to be introduced to enable staff to be selected with the requisite skills to reassure clients and investors.

| 6.8 | When state aid and international aid in response to the financial crises dries up, the sector as a whole is likely to evolve in line with economic conditions and the development of new technologies, but especially following the strategies specific to each well-managed company. The banks will have the difficult task of retaining their credibility as lenders to the real economy while having to cope with higher financing costs and lower profitability. |
| --- | --- |

6.8

When state aid and international aid in response to the financial crises dries up, the sector as a whole is likely to evolve in line with economic conditions and the development of new technologies, but especially following the strategies specific to each well-managed company. The banks will have the difficult task of retaining their credibility as lenders to the real economy while having to cope with higher financing costs and lower profitability.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  EESC opinion of 29.03.2012 on the proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC – (OJ C 181, 21.6.2012, p. 55) and EESC opinion of 15.7.2010 on financial transaction tax (own-initiative opinion) (OJ C 44, 11.2.2011, p. 81)

1

proposal for a Council Directive on a common system of financial transaction tax and amending Directive 2008/7/EC

financial transaction tax (own-initiative opinion)

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/12 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/12

---

Opinion of the European Economic and Social Committee on ‘The European Technology Platforms (ETPs) and industrial change’ (own-initiative opinion)

2012/C 299/03

Rapporteur: Mr ZBOŘIL

Co-rapporteur: Mr GIBELLIERI

On 19 January 2012 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

European Technology Platforms (ETPs) and industrial change

(own-initiative opinion).

The Consultative Commission on Industrial Change (CCMI), which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 138 votes to 2 with 1 abstention.

1.   Conclusions and recommendations

1.1   The EESC is aware that anticipating industrial change is a difficult, although necessary, foresight exercise based on a number of different factors that influence those changes. One of the principal drivers of change is Research & Innovation (R&I), and the ETPs are the leading indicators.

1.2   The EESC asks the European Commission (EC) to continue to back the activities of the existing ETPs and improve exchanges both among themselves and with the relevant European institutions.

1.3   The EESC recognises that ETP- related industry sectors have a fundamental position in the value chain: many innovations are dependent on basic processes (manufacturing, processing industries, forestry, robotics) and materials (chemicals, steels ...). As such, therefore, process and material innovations have a catalytic effect on European innovation.

1.4   The EESC recognises that ETPs are already tackling societal challenges. They cover an area which has a major impact on society in terms of growth and value-added jobs. ETPs respond to key policy issues (bio-economy, raw materials and resource efficiency, for example).

1.5   ETPs are a clear and concrete example of bottom up approach to the European research and innovation policy involving industry, and other important stakeholders, all along the innovation stages. Horizon2020 needs such an approach.

1.6   The EESC calls for a more effective implementation of the EC regulatory framework simplification process (including participation in EU projects), for increased effort in reducing fragmentation and competition between institutional initiatives, for better coordinated policies and for increased visibility in the future at institutional level, in order to make ETPs more effective.

1.6.1   EESC believes that ETPs are key to boosting the EU "industrial policy". They enjoy strong input and support from industry, one of the key pillars of the EC economy. ETPs are industry-driven, thus ensuring the industrial relevance of their initiatives. Input provided by ETPs not only touches on technology and research needs but also on technology transfer.

1.6.2   With regard to existing examples (ESTEP, PLATEA, and others), trade unions and other relevant stakeholders should be more involved in ETPs, National (NTPs), and Regional Technology Platforms (RTPs) on a permanent cooperative basis so that social and societal issues, which strengthen the impact of respective Strategic Research Agendas (SRA), may be covered.

1.6.3   Difficulties in the involvement of SMEs should be solved through the constant benchmarking with the most successful examples as done by the Joint Undertaking of Fuel Cell and Hydrogen (FCH-JU).

1.7   The related national and regional platforms mirror ETP structure at MS level. Co-ordination and harmonisation of EU, national and regional R&I programmes should be improved by means of closer cooperation with ETPs.

1.8   ETPs can make a major contribution to implement European policies. Specific priorities have been defined to boost innovation in the public and private domains: Resource and Energy Efficiency in Process Industry (SPIRE), Biobased Industries PPP (Biobased for Growth), European Innovation Partnerships on Water, Raw Materials, Smart Cities (jointly with the SET plan) and EMIRI (Energy Materials Industrial Research Initiative). This enhanced inter-sectorial cooperation and coordination via ETPs will ultimately bring benefits to the European society.

1.9   The EESC calls on the EU institutions to work on improving international cooperation, in order to attract state-of-the-art global expertise, in the interest of EU exploitation and commercialisation.

1.10   Complementary access to Smart Specialisation – Structural Funds at national and regional level for the NTPs should be encouraged and facilitated.

1.11   The solution-provider role of ETPs with regard to societal challenges will gain a higher profile in addressing innovation in addition to research. This is a key to sustaining welfare and wellbeing in Europe.

1.12   The EESC congratulates the ETPs on their role, as a link to demand-side innovation tools which complement R&I actions and accelerate market up-take. ETPs are also key to the deployment of R&I results. The Committee calls for increased use of Coordination Support Actions to drive value chain collaborations.

1.13   Manufacturing processes and the manufacturing-related research & innovation activities are losing their societal appeal for the general public and especially for young people. This is also a consequence of the de-localisation of manufacturing activities outside Europe and, in a vicious circle, leads to further de-localisation. The EESC expects the ETPs to be able to contribute to raising awareness of the importance of various industrial manufacturing processes.

1.14   ETPs may suffer from the decline of EU industry. EU industries are losing their leading worldwide industrial position, they experience a low level of risk-taking and lack of entrepreneurship in comparison to other parts of the world.

1.15   People-centred education, learning & training should be maintained and reinforced within the ETP landscape as strategic elements of the platforms. Close links with corresponding sectorial EU social dialogue Committees and the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) should therefore be established on a permanent basis.

1.16   ETPs may also have a substantial impact on social and societal issues, particularly on the re-orientation of public education and Vocational Educational Training (VET) systems to the needs of the European industries and manufacturing sectors. A big effort on training and retraining should be made in order to prepare workers able to deal with the new process technologies and products resulting by the research and innovation activities. Only qualified and stable employed people will be able to deal with new high level technologies.

2.   Establishment and history of the ETPs

2.1   In March 2003, the EU Council called for a strengthening of the ERA by creating ETPs bringing together technological know-how, industry, regulators and financial institutions.

2.2   ETPs were set up as industry-led stakeholder forums with the aim of defining medium- to long-term research and technology objectives and developing road maps. Their aim was to contribute to increasing synergies between different research actors, to define priorities on a number of technological areas achieving EU growth, competitiveness and sustainability.

2.3   The EC supported the development of ETPs as a facilitator. The EC acts today as an observer and is committed to structured dialogue on research priorities. The EC does not own or manage ETPs: they are independent organisations. The EC CORDIS website, the ETP newsletter and the regular ETP leaders’ seminars facilitate the flow of communication.

2.4   Some ETPs are loose networks that come together in annual meetings, but others have legal structures with membership fees. All ETPs have brought together stakeholders, reached consensus on a common vision and established an SRA. ETPs are developed through dialogue between industrial and public researchers and national government representatives; they also contribute to creating consensus and to aligning investment efforts more effectively.

2.5   ETPs foster effective PPPs, contributing significantly to the development of the ERA of knowledge for growth. Such PPPs can address technological challenges that could be the key to sustainable development, the improved delivery of public services and the restructuring of traditional industrial sectors.

3.   ETPs and industrial change

3.1   Industrial change (1) is a continuous process influenced by various different factors such as market trends, organisational, social, societal and structural changes and technical innovation on production processes and products.

3.2   Innovation is also a continuous process, and it is one of the main factors influencing industrial change through a steady transfer of new scientific findings to the real production chain. It is, moreover, the main driver of global competitiveness in the EU manufacturing and service sectors.

3.3   In terms of the innovation process, careful consideration should be given to how scarce financial resources are employed in Europe. The ETPs are already an existing powerful tool and they could be the concrete solution for innovation and deployment of the industrial policy.

3.4   The nature and the intrinsic content of industrial change is driven mainly by innovation, and ETPs are increasingly the actual physical sites where innovation originates. ETPs are geared towards practical industrial applications that have an impact on production processes, products, work organisation and workplace conditions.

3.5   The European institutions are recommending a balanced participation of all stakeholders in the ETPs. In particular, it would be desirable that EU institutions support by all practicable means SMEs or economic research associates in a corporate form, such as in the knowledge cooperative, in order to allow these very popular European companies to participate actively in the platforms. The costs of platforms represent an obstacle for SMEs and universities to get involved in research work.

3.6   Given the scale and importance of ETPs in the EU context as bodies established on a voluntary basis and open to any interested parties, it is vital to recognise them the role of powerful tools for the implementation of the EU policy.

3.7   The transition to more sustainable manufacturing and service activities in EU and the implementation of the Europe 2020 strategy will be strongly contingent on the real innovation ETPs will be able to deliver in the next decade.

3.8   Real and concrete innovation and industrial changes could be accomplished through the parallel design of innovative processes/products and the needed skills and work organisation for its complete implementation in the manufacturing and services' activities.

3.9   Some ETPs are organised to take into account, from the very beginning, the social aspects of the innovation process and, in their Strategic Research Agendas, introduce activities related to the future needs of human resources, often in close cooperation with the respective EU sector social dialogue committees, with whom they also exchange information.

3.10   Given its make-up and strong links with the main EU sectors, the EESC's CCMI analysed the state of play in the various industries and provided recommendations to the other EU institutions and the MSs by means of this bottom-up, non-bureaucratic process. The aim is to contribute to the implementation of the EU industrial policy and desirable industrial change.

4.   Role of the ETP for Research and Innovation (R&I)

The EC has developed and implemented a series of initiatives to reinforce the ETPs and industry action and to put in place technology-based policies.

4.1   The Joint Technology Initiatives (JTIs) are a means to implement the Strategic Research Agendas for a limited number of ETPs. In few ETPs, the scale and scope of the objectives are such that the regular instruments of the FP for R&I are not sufficient. Instead, effective implementation requires a dedicated mechanism that secures the necessary leadership and coordination to achieve the research objectives. To meet those needs, the concept of "JTI" has been developed.

4.2   The former Commissioner for Science and Research and high-level representatives of industry met in March 2009 to review progress and discuss priorities for the implementation of new research instruments "the PPPs". Those priorities and instruments have been used for the Factories of the Future, Energy-efficient Buildings and Green Cars initiatives included in the EU Economic Recovery Plan adopted in November 2008.

4.3   The three PPPs represent a powerful means of boosting research efforts in three large industrial sectors - automotive, construction and manufacturing - which have been particularly affected by the economic downturn and where innovation can significantly contribute towards a more green and sustainable economy.

4.4   The SET-Plan, adopted by the EU in 2008, is a first step towards establishing an energy technology policy for EU. It is a decision-making support tool for EU energy policy, with the goal of:

| — | accelerating knowledge development, technology transfer and uptake; |
| --- | --- |

—

accelerating knowledge development, technology transfer and uptake;

| — | maintaining EU industrial leadership on low-carbon energy technologies; |
| --- | --- |

—

maintaining EU industrial leadership on low-carbon energy technologies;

| — | fostering science for transforming energy technologies to achieve the 2020 Energy and Climate Change goals; |
| --- | --- |

—

fostering science for transforming energy technologies to achieve the 2020 Energy and Climate Change goals;

| — | contributing to the worldwide transition to a low-carbon economy by 2050. |
| --- | --- |

—

contributing to the worldwide transition to a low-carbon economy by 2050.

Implementation of the SET-Plan started with the establishment of the European Industrial Initiatives (EIIs) which bring together industry, the research community, the MSs and the EC in risk-sharing PPPs. In parallel, the European Energy Research Alliance (EERA) has been working since 2008 to align the R&D activities of individual research organisations to the needs of the SET-Plan priorities, and to establish a joint Framework Programme at the EU level.

4.5   The EU Lead Market Initiative (LMI) is for supporting actions for six important sectors to lower barriers to bringing new products or services onto the market. The EC, MSs and industry work together to carry out the action plans. The policy instruments deal with regulation, public procurement, standardisation and supporting activities. The LMI addresses the following markets: eHealth, protective textiles, sustainable construction, recycling, bio-based products and renewable energies.

5.   ETPs: SWOT analysis results

5.1   Taking into account the sheer number of the ETPs nowadays, it is obvious that their deliverance (performance) levels have differed in the past, and they will differ in the future. Thus, the Committee has performed an initial analysis attempting to identify the major general drivers towards excellence (strengths and opportunities) and, even more importantly, the major obstacles (weaknesses and threats).

5.2   Strengths

| — | The ETPs gather together all stakeholders: research centres and universities, industry (big players and SMEs), plant producers, non-profit as well as commercial organisations, associations, public authorities and unions. |
| --- | --- |

—

The ETPs gather together all stakeholders: research centres and universities, industry (big players and SMEs), plant producers, non-profit as well as commercial organisations, associations, public authorities and unions.

| — | In the platform there is a clear identification of "roles" and hierarchy within the sector. The stakeholders share a common vision, roadmap and implementation plan. |
| --- | --- |

—

In the platform there is a clear identification of "roles" and hierarchy within the sector. The stakeholders share a common vision, roadmap and implementation plan.

| — | ETPs enjoy strong input and support from industry, one of the key pillars of the EC economy. ETPs are industry-driven, thus ensuring the industrial relevance of their initiatives. Input provided by ETPs not only touches on technology and research needs but also on technology transfer. |
| --- | --- |

—

ETPs enjoy strong input and support from industry, one of the key pillars of the EC economy. ETPs are industry-driven, thus ensuring the industrial relevance of their initiatives. Input provided by ETPs not only touches on technology and research needs but also on technology transfer.

| — | ETPs have a lean management structure and are flexible, mobilising "forces" and pooling resources. |
| --- | --- |

—

ETPs have a lean management structure and are flexible, mobilising "forces" and pooling resources.

| — | ETP-related industry sectors have a fundamental position in the value chain: many innovations are dependent on basic processes (manufacturing, processing industries, forestry and robotics, for instance) and materials (chemicals and steels). As such, therefore, process and material innovations have a catalytic effect on EU innovation. |
| --- | --- |

—

ETP-related industry sectors have a fundamental position in the value chain: many innovations are dependent on basic processes (manufacturing, processing industries, forestry and robotics, for instance) and materials (chemicals and steels). As such, therefore, process and material innovations have a catalytic effect on EU innovation.

| — | ETPs are already tackling societal challenges. They cover an area which has a major impact on society in terms of growth and value-added jobs. ETPs respond to key policy issues (bio-economy, raw materials and resource efficiency, for example). |
| --- | --- |

—

ETPs are already tackling societal challenges. They cover an area which has a major impact on society in terms of growth and value-added jobs. ETPs respond to key policy issues (bio-economy, raw materials and resource efficiency, for example).

| — | Some ETPs have National TPs and Regional TPs in place, in all EU countries. |
| --- | --- |

—

Some ETPs have National TPs and Regional TPs in place, in all EU countries.

| — | Education is addressed as strategic element of the platforms. |
| --- | --- |

—

Education is addressed as strategic element of the platforms.

| — | Originating from existing ETPs, a number of implementation vehicles (e.g. PPP, Cluster etc.) are already in place. |
| --- | --- |

—

Originating from existing ETPs, a number of implementation vehicles (e.g. PPP, Cluster etc.) are already in place.

5.3   Weaknesses

| — | ETPs should think strategically, and avoid becoming a narrow lobby-group and losing focus. - ETPs may suffer from duplication or excessive fragmentation of activity. |
| --- | --- |

—

ETPs should think strategically, and avoid becoming a narrow lobby-group and losing focus. - ETPs may suffer from duplication or excessive fragmentation of activity.

| — | In some cases the big "players" dominate ETP action. |
| --- | --- |

—

In some cases the big "players" dominate ETP action.

| — | It is not easy to recognise and attribute final applications and innovations to ETPs:






  — | Visibility of ETPs is still low, both in the public and private domains |
| --- | --- | --- |

—

It is not easy to recognise and attribute final applications and innovations to ETPs:

—

Visibility of ETPs is still low, both in the public and private domains

| — | NGOs are not interested in involvement |
| --- | --- |

—

NGOs are not interested in involvement

| — | MS Mirror groups (NTPs and RTPs) were generally not successful. |
| --- | --- |

—

MS Mirror groups (NTPs and RTPs) were generally not successful.

| — | More effort is needed to generate a multi-sectoral perspective harmonising stakeholders’ interests and their interaction. |
| --- | --- |

—

More effort is needed to generate a multi-sectoral perspective harmonising stakeholders’ interests and their interaction.

| — | ETPs should improve their communication and the dissemination of results. |
| --- | --- |

—

ETPs should improve their communication and the dissemination of results.

5.4   Opportunities

| — | ETPs are key to boosting the EU "industrial policy". The related NTPs and RTPs mirror ETP structure at MS level, improving platform coordination and effectiveness. Co-ordination and harmonisation of European, national and regional R&I programmes should be improved in cooperation with ETPs. |
| --- | --- |

—

ETPs are key to boosting the EU "industrial policy". The related NTPs and RTPs mirror ETP structure at MS level, improving platform coordination and effectiveness. Co-ordination and harmonisation of European, national and regional R&I programmes should be improved in cooperation with ETPs.

| — | The solution-provider role of ETPs with regard to societal challenges will gain a higher profile in the light of the enhanced strategy of addressing innovation in addition to research. |
| --- | --- |

—

The solution-provider role of ETPs with regard to societal challenges will gain a higher profile in the light of the enhanced strategy of addressing innovation in addition to research.

| — | Specific priorities have been defined to boost innovation in the public and private domains: Resource and Energy Efficiency in Process Industry (SPIRE), Biobased Industries PPP, European Innovation Partnerships on Water, Raw Materials, Smart Cities (jointly with the SET plan and EMIRI). |
| --- | --- |

—

Specific priorities have been defined to boost innovation in the public and private domains: Resource and Energy Efficiency in Process Industry (SPIRE), Biobased Industries PPP, European Innovation Partnerships on Water, Raw Materials, Smart Cities (jointly with the SET plan and EMIRI).

| — | ETPs request the EC for an increased use of Coordination Support Actions to drive value chain cooperation and to improve simplification efforts. Improving international cooperation, attracting the best global knowledge for EU commercialisation and exploitation could make a major contribution to the work of ETPs. |
| --- | --- |

—

ETPs request the EC for an increased use of Coordination Support Actions to drive value chain cooperation and to improve simplification efforts. Improving international cooperation, attracting the best global knowledge for EU commercialisation and exploitation could make a major contribution to the work of ETPs.

| — | ETPs should link demand-side innovation tools to complement research actions in order to accelerate market up-take. |
| --- | --- |

—

ETPs should link demand-side innovation tools to complement research actions in order to accelerate market up-take.

| — | ETPs could raise awareness of the importance of various industrial manufacturing processes for sustaining welfare and wellbeing in Europe. |
| --- | --- |

—

ETPs could raise awareness of the importance of various industrial manufacturing processes for sustaining welfare and wellbeing in Europe.

| — | People-focused education, learning & training should be maintained within the ETP landscape. |
| --- | --- |

—

People-focused education, learning & training should be maintained within the ETP landscape.

5.5   Threats

| — | ETPs claim a lack of financial resources to run the platforms. |
| --- | --- |

—

ETPs claim a lack of financial resources to run the platforms.

| — | ETPs may suffer the decline of EU industry. The EU Industries are losing their worldwide leading position; they suffer from a generally low level of risk-taking in the EU and from a lack of entrepreneurship recognition in comparison to other parts of the world. |
| --- | --- |

—

ETPs may suffer the decline of EU industry. The EU Industries are losing their worldwide leading position; they suffer from a generally low level of risk-taking in the EU and from a lack of entrepreneurship recognition in comparison to other parts of the world.

| — | More effective implementation of the EU regulatory framework simplification process (including participation in EU projects), increased effort in reducing fragmentation and competition between institutional initiatives, better coordinated policies and for increased visibility in the future at institutional level, could increase the effectiveness of ETPs. |
| --- | --- |

—

More effective implementation of the EU regulatory framework simplification process (including participation in EU projects), increased effort in reducing fragmentation and competition between institutional initiatives, better coordinated policies and for increased visibility in the future at institutional level, could increase the effectiveness of ETPs.

| — | Manufacturing processes and the manufacturing-related R&I activities are losing their societal appeal for the general public and especially for young people. This is also a consequence of the delocalisation of manufacturing activities outside Europe. |
| --- | --- |

—

Manufacturing processes and the manufacturing-related R&I activities are losing their societal appeal for the general public and especially for young people. This is also a consequence of the delocalisation of manufacturing activities outside Europe.

6.   Cooperation among ETPs and between the ETPs and the European Commission

ETPs have been active in implementation of the FP 7 for R&I of the EU. ETPs are now providing information and proposals to the ongoing work for the establishment of Horizon 2020 to bring it into line with the real needs of the European society, particularly the needs of the manufacturing and service sectors.

6.1   Horizon 2020

6.1.1   Horizon 2020 is the instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Running from 2014 to 2020 with an EUR 80 billion budget, is part of the drive to create new growth and jobs in Europe. Horizon 2020 will:

| — | strengthen the EU’s position in science; |
| --- | --- |

—

strengthen the EU’s position in science;

| — | strengthen industrial leadership in innovation. This includes major investment in key technologies, greater access to capital and support for SMEs; |
| --- | --- |

—

strengthen industrial leadership in innovation. This includes major investment in key technologies, greater access to capital and support for SMEs;

| — | help address major concerns shared by all Europeans on issues such as climate change, developing sustainable transport and mobility. |
| --- | --- |

—

help address major concerns shared by all Europeans on issues such as climate change, developing sustainable transport and mobility.

6.1.2   Horizon 2020 will tackle societal challenges by helping to bridge the gap between research and the market. This market-driven approach will include creating partnerships with the private sector and Member States.

6.1.3   Horizon 2020 will be complemented by further measures to project and develop the European Research Area by 2014. These measures will aim at breaking down barriers to create a genuine single market for knowledge, R&I.

6.2   Europe 2020

6.2.1   Europe 2020 is the EU's growth strategy for the coming decade. The EU should become a smart, sustainable and inclusive economy. These three mutually reinforcing priorities should help the EU and the MSs deliver high levels of employment, productivity and social cohesion.

6.2.2   In practical terms, the EU has set five ambitious objectives - on employment, innovation, education, social inclusion and climate/energy - to be reached by 2020. Each MS adopted its own national targets in each of these areas. Concrete actions at EU and national levels underpin the strategy.

6.3   Future role of ETPs

6.3.1   The role of ETPs is expected to be maintained in future. In addition, ETPs may also support the implementation of the EC instruments some of which have already been tested in the FP7. The EC is expected to use more (even if in a limited number) implementation instruments in Horizon 2020 such as PPPs, and Joint Technology Initiatives (JTIs).

6.3.2   There is a strong commitment from the industry and the broader stakeholders to support the implementation of tools above mentioned. Examples include Public-Private Partnerships for Biobased Industries PPP (Biobased for Growth), Sustainable Process Industries through Resources and Energy Efficiency (SPIRE), Energy Materials Industrial Research Initiative (EMIRI) and Research for Future Infrastructure Networks in Europe (reFINE).

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  EESC Opinion on Industrial Change: current situation and prospects. An overall approach, OJ C 010 of 14.01.2004, p. 105–113.

1

Industrial Change: current situation and prospects. An overall approach

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/17 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/17

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Opinion of the European Economic and Social Committee on the ‘Need for a European defence industry: industrial, innovative and social aspects’ (own-initiative opinion)

2012/C 299/04

Rapporteur: Mr VAN IERSEL

Co-rapporteur: Ms HRUSECKÁ

On 19 January 2012, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on the

Need for a European defence industry: industrial, innovative and social aspects.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by132 votes to 1 with 9 abstentions.

1.   Conclusions and recommendations

| 1.1 | The world is subject to rapid geopolitical change. The dominant position of the Western world is being challenged both economically and politically. While defence budgets across the European Union are being cut, defence spending in China, India, Brazil, Russia and others is going up. Therefore the EESC calls on the Council and the Commission to make an overall evaluation of determining aspects of the EU's position and role in the world, to result in a convincing update of European foreign, security and defence policies. |
| --- | --- |

1.1

The world is subject to rapid geopolitical change. The dominant position of the Western world is being challenged both economically and politically. While defence budgets across the European Union are being cut, defence spending in China, India, Brazil, Russia and others is going up. Therefore the EESC calls on the Council and the Commission to make an overall evaluation of determining aspects of the EU's position and role in the world, to result in a convincing update of European foreign, security and defence policies.

| 1.2 | Defence policy is shaped by countries' strategic interests, perceived threats and political objectives, which in Europe are mainly defined in national terms. Obsolete approaches visibly lead to increasing fragmentation, gaps, overcapacity and a lack of interoperability in European defence capabilities. The arguments for improvement are overwhelming; it is a matter of political will. This was already argued convincingly back in 1986! (1) The situation is now much more pressing in political, economic and defence terms. The EESC calls on the Council to work seriously on an EU defence umbrella. |
| --- | --- |

1.2

Defence policy is shaped by countries' strategic interests, perceived threats and political objectives, which in Europe are mainly defined in national terms. Obsolete approaches visibly lead to increasing fragmentation, gaps, overcapacity and a lack of interoperability in European defence capabilities. The arguments for improvement are overwhelming; it is a matter of political will. This was already argued convincingly back in 1986! (1) The situation is now much more pressing in political, economic and defence terms. The EESC calls on the Council to work seriously on an EU defence umbrella.

| 1.3 | Security and defence policy should boost the EU and Member States' self-confidence. It should inspire confidence in society and the general public, properly equipped soldiers, business and the sector's workforce. EU citizens have a right to be adequately protected. Adequate future-proof European armaments are increasingly needed. To that end current isolated practices of Member States are completely insufficient as well as wasting taxpayer’s money. |
| --- | --- |

1.3

Security and defence policy should boost the EU and Member States' self-confidence. It should inspire confidence in society and the general public, properly equipped soldiers, business and the sector's workforce. EU citizens have a right to be adequately protected. Adequate future-proof European armaments are increasingly needed. To that end current isolated practices of Member States are completely insufficient as well as wasting taxpayer’s money.

| 1.4 | In line with policies and current practices in the US and other (emerging) world actors as well as given the exclusive responsibility of governments to protect citizens and to ensure security, the EESC underlines the need of defining European strategic interests in the framework of the Common Security and Defence Policy (CSDP) (2). In the end the triangle of foreign affairs and security, defence, and industrial capability is indivisible, supporting Europe’s position in the world, her economic and political interests as well as values (human rights, democracy). The European External Action Service (EEAS) should be directly involved. |
| --- | --- |

1.4

In line with policies and current practices in the US and other (emerging) world actors as well as given the exclusive responsibility of governments to protect citizens and to ensure security, the EESC underlines the need of defining European strategic interests in the framework of the Common Security and Defence Policy (CSDP) (2). In the end the triangle of foreign affairs and security, defence, and industrial capability is indivisible, supporting Europe’s position in the world, her economic and political interests as well as values (human rights, democracy). The European External Action Service (EEAS) should be directly involved.

| 1.5 | The EESC emphasises that, should Europe wish to maintain a sound security and defence industry in creating a critical mass for effectiveness and cost efficiency, a radical change in mindset and policies is needed. These must produce a stable and predictable future for armed forces befitting Europe's economic and technological weight. Given big differences between Member States a primary responsibility in this regard falls to the main producing Member States. |
| --- | --- |

1.5

The EESC emphasises that, should Europe wish to maintain a sound security and defence industry in creating a critical mass for effectiveness and cost efficiency, a radical change in mindset and policies is needed. These must produce a stable and predictable future for armed forces befitting Europe's economic and technological weight. Given big differences between Member States a primary responsibility in this regard falls to the main producing Member States.

| 1.6 | In the EESC’s view, there are strong arguments to strengthen European planning and committed coordination:






  — | the sector is complicated and knowledge-intensive; it requires long-term planning |
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1.6

In the EESC’s view, there are strong arguments to strengthen European planning and committed coordination:

—

the sector is complicated and knowledge-intensive; it requires long-term planning

| — | despite privatisation governments have a large stake in defence industry as customer, regulator and as providers of export licenses |
| --- | --- |

—

despite privatisation governments have a large stake in defence industry as customer, regulator and as providers of export licenses

| — | shortcomings in the current structure and (severe) budget constraints require orderly readjustments instead of on-going piecemeal approaches that undermine internal and external credibility |
| --- | --- |

—

shortcomings in the current structure and (severe) budget constraints require orderly readjustments instead of on-going piecemeal approaches that undermine internal and external credibility

| — | effective coordination between the main producing countries and the less or non-producing countries should be ensured to promote armaments purchases in Europe, and to make use of all available knowledge, and of big companies and SMEs across the continent |
| --- | --- |

—

effective coordination between the main producing countries and the less or non-producing countries should be ensured to promote armaments purchases in Europe, and to make use of all available knowledge, and of big companies and SMEs across the continent

| — | finally a successful output of European industry worldwide will depend on the development of a stable home market in Europe. |
| --- | --- |

—

finally a successful output of European industry worldwide will depend on the development of a stable home market in Europe.

| 1.7 | In addition to actions of the European Defence Agency (EDA) and the Defence Package of 2007 (3) the EESC calls for a well-designed European industrial policy for the defence sector with its specific characteristics of government requirements and public funding. In the framework of Europe 2020, this industrial policy must be based on shared national and EU competences – with EDA and Commission as full partners - as well as consultations with the defence industry and other stakeholders, among them social partners and the need of a well-organised social dialogue. |
| --- | --- |

1.7

In addition to actions of the European Defence Agency (EDA) and the Defence Package of 2007 (3) the EESC calls for a well-designed European industrial policy for the defence sector with its specific characteristics of government requirements and public funding. In the framework of Europe 2020, this industrial policy must be based on shared national and EU competences – with EDA and Commission as full partners - as well as consultations with the defence industry and other stakeholders, among them social partners and the need of a well-organised social dialogue.

| 1.8 | EU policies and funding should link EU level and national investments leading to reducing fragmentation and duplication of public expenditure, enhancing quality and interoperability. |
| --- | --- |

1.8

EU policies and funding should link EU level and national investments leading to reducing fragmentation and duplication of public expenditure, enhancing quality and interoperability.

| 1.9 | State-of-the-art R&D is crucial for the development of "new generation" armaments which are badly needed. Such R&D can never be an exclusive matter for industry alone. The main responsibility falls to governments. Consequently, it is very vulnerable to current budget cutbacks. The Council and stakeholders should identify urgently and launch as soon as possible research programmes that would help European industry to address undesirable dependencies from elsewhere. "Dual use" technology is a necessity. The EU’s R&D programme should be supportive. It should ensure effective cross-border R&D cooperation. |
| --- | --- |

1.9

State-of-the-art R&D is crucial for the development of "new generation" armaments which are badly needed. Such R&D can never be an exclusive matter for industry alone. The main responsibility falls to governments. Consequently, it is very vulnerable to current budget cutbacks. The Council and stakeholders should identify urgently and launch as soon as possible research programmes that would help European industry to address undesirable dependencies from elsewhere. "Dual use" technology is a necessity. The EU’s R&D programme should be supportive. It should ensure effective cross-border R&D cooperation.

| 1.10 | Further strengthening of the technological and industrial basis of European defence must be planned as much as possible. To that end satisfactory measures at EU-level are necessary (4). |
| --- | --- |

1.10

Further strengthening of the technological and industrial basis of European defence must be planned as much as possible. To that end satisfactory measures at EU-level are necessary (4).

| 1.11 | Closer coordination between the Commission, EDA, and other relevant EU stakeholders is needed. The renewed commitment of President Barroso (5), Vice-President Tajani and Commissioner Barnier as well as the establishment of the Task Force on Defence is very timely. The EESC also welcomes last December’s forward-looking EP Resolution on European Defence and the broad spectrum of issues at stake (6). |
| --- | --- |

1.11

Closer coordination between the Commission, EDA, and other relevant EU stakeholders is needed. The renewed commitment of President Barroso (5), Vice-President Tajani and Commissioner Barnier as well as the establishment of the Task Force on Defence is very timely. The EESC also welcomes last December’s forward-looking EP Resolution on European Defence and the broad spectrum of issues at stake (6).

| 1.12 | In the same spirit and in view of strengthening the initiative of the EC Task Force on Defence, the EESC urges the Commission to publicly raise these issues. The Commission should also consider to provide elements of answers as appropriate to the findings that result from the differences in industrial and technological capabilities between Member States as well as differences in the levels of investment in research and defence in general. |
| --- | --- |

1.12

In the same spirit and in view of strengthening the initiative of the EC Task Force on Defence, the EESC urges the Commission to publicly raise these issues. The Commission should also consider to provide elements of answers as appropriate to the findings that result from the differences in industrial and technological capabilities between Member States as well as differences in the levels of investment in research and defence in general.

2.   Introduction

| 2.1 | Article 42 of the Treaty on European Union states that the common security and defence policy shall be an integral part of the common foreign and security policy. Article 42(3) adds that Member States shall make military capabilities available to the Union for the implementation of that policy. Since 2005 the European Defence Agency (EDA) has worked to strengthen the industrial and technological base of the defence sector and provide better equipment for soldiers. Progress, however, is very limited. |
| --- | --- |

2.1

Article 42 of the Treaty on European Union states that the common security and defence policy shall be an integral part of the common foreign and security policy. Article 42(3) adds that Member States shall make military capabilities available to the Union for the implementation of that policy. Since 2005 the European Defence Agency (EDA) has worked to strengthen the industrial and technological base of the defence sector and provide better equipment for soldiers. Progress, however, is very limited.

| 2.2 | Completing the internal market as well as effective financial coordination are high priorities now. The Europe 2020 strategy is giving strong support to both objectives. This leap forward should also inspire new steps in European defence. |
| --- | --- |

2.2

Completing the internal market as well as effective financial coordination are high priorities now. The Europe 2020 strategy is giving strong support to both objectives. This leap forward should also inspire new steps in European defence.

| 2.3 | Yet there is no similar development in the defence sector. The military pact between France and the United Kingdom in 1998 looked set to mark a new mindset and a new start. The same spirit of closer defence cooperation was reflected in the foundation of the European Defence and Space Company, EADS, in 2003. This, however, was not followed by further consolidation. It is significant that the LoI-countries (the group of countries with major production capacity, i.e. France, Germany, the United Kingdom, Italy, Spain and Sweden) have, contrary to previous intentions, not yet come up with any viable proposal for rationalisation or consolidation. |
| --- | --- |

2.3

Yet there is no similar development in the defence sector. The military pact between France and the United Kingdom in 1998 looked set to mark a new mindset and a new start. The same spirit of closer defence cooperation was reflected in the foundation of the European Defence and Space Company, EADS, in 2003. This, however, was not followed by further consolidation. It is significant that the LoI-countries (the group of countries with major production capacity, i.e. France, Germany, the United Kingdom, Italy, Spain and Sweden) have, contrary to previous intentions, not yet come up with any viable proposal for rationalisation or consolidation.

| 2.4 | Stagnation has led to national approaches and emphasis on national production. There is a certain renationalisation. Europe-based industrial companies are all focusing on export markets. There is no common strategic concept, neither among governments nor among industrial partners. |
| --- | --- |

2.4

Stagnation has led to national approaches and emphasis on national production. There is a certain renationalisation. Europe-based industrial companies are all focusing on export markets. There is no common strategic concept, neither among governments nor among industrial partners.

| 2.5 | Meanwhile new challenges will increasingly affect potential markets. A huge challenge is the development of armaments in emerging economies. China, Russia, India and Brazil (the BRICs), followed by some smaller countries, are on their way. The Chinese defence budget is expected to rise from EUR 120 billion now to EUR 250 billion by 2015. Russia has announced a huge increase in its defence budget up to 2015. The US spends more than double the total European budget: EUR 450 bn. versus EUR 204 bn. in 2007 and the European budget is shrinking ever more. The overall European R&D budget is at the most 20 % of the American one. 50 % of the European defence budget goes on manpower against 25 % in the US. Europe has more people under arms, but they are far less equipped. World conditions will never be what they were before. Time is not on our side. |
| --- | --- |

2.5

Meanwhile new challenges will increasingly affect potential markets. A huge challenge is the development of armaments in emerging economies. China, Russia, India and Brazil (the BRICs), followed by some smaller countries, are on their way. The Chinese defence budget is expected to rise from EUR 120 billion now to EUR 250 billion by 2015. Russia has announced a huge increase in its defence budget up to 2015. The US spends more than double the total European budget: EUR 450 bn. versus EUR 204 bn. in 2007 and the European budget is shrinking ever more. The overall European R&D budget is at the most 20 % of the American one. 50 % of the European defence budget goes on manpower against 25 % in the US. Europe has more people under arms, but they are far less equipped. World conditions will never be what they were before. Time is not on our side.

| 2.6 | Over the last decades, many studies have advocated adapting the defence industry to the global market. All underline lasting shortcomings, as defence markets prove very imperfect, with most states continuing to support their "own" industry. Attempts to improve markets, such as the EU Defence Package of 2007, intend to overcome some market deficiencies and diverging national practices. |
| --- | --- |

2.6

Over the last decades, many studies have advocated adapting the defence industry to the global market. All underline lasting shortcomings, as defence markets prove very imperfect, with most states continuing to support their "own" industry. Attempts to improve markets, such as the EU Defence Package of 2007, intend to overcome some market deficiencies and diverging national practices.

| 2.7 | The issues at stake are complex, partly due to the very long time lags from the design phase to bringing products into operation. Therefore the EESC considers that a broad approach from a technological, economic and social perspective would be a more suitable way to discuss this area than just looking at it from the defence perspective. |
| --- | --- |

2.7

The issues at stake are complex, partly due to the very long time lags from the design phase to bringing products into operation. Therefore the EESC considers that a broad approach from a technological, economic and social perspective would be a more suitable way to discuss this area than just looking at it from the defence perspective.

| 2.8 | A key point is the divergence of strategic concepts between countries with a considerable armaments industry, in particular as regards the definition of "essential national security interest", and the relation between national security and export markets. Some smaller countries have a reasonably well-developed industry, while others have practically no production sites at all. Clearly, the approaches of all countries differ according to their needs and potential. The outcome is fragmentation and a patchwork vision of defence industry. Operations like in Libya make increasing gaps in available weapon systems painfully clear. The consequences should be clearly acknowledged and evaluated. |
| --- | --- |

2.8

A key point is the divergence of strategic concepts between countries with a considerable armaments industry, in particular as regards the definition of "essential national security interest", and the relation between national security and export markets. Some smaller countries have a reasonably well-developed industry, while others have practically no production sites at all. Clearly, the approaches of all countries differ according to their needs and potential. The outcome is fragmentation and a patchwork vision of defence industry. Operations like in Libya make increasing gaps in available weapon systems painfully clear. The consequences should be clearly acknowledged and evaluated.

| 2.9 | These developments concern both investments and employment. The defence industry is a high technology sector that directly employs 600 000 qualified people and, indirectly, another two million. There are worrying pressures for further cuts. Often production sites have a strong regional concentration which could become centres of excellence but which, adversely, run the risk of being hit by financial cuts. These sites will suffer greatly if reorganisation and cuts take place in an unplanned and unstructured way. |
| --- | --- |

2.9

These developments concern both investments and employment. The defence industry is a high technology sector that directly employs 600 000 qualified people and, indirectly, another two million. There are worrying pressures for further cuts. Often production sites have a strong regional concentration which could become centres of excellence but which, adversely, run the risk of being hit by financial cuts. These sites will suffer greatly if reorganisation and cuts take place in an unplanned and unstructured way.

| 2.10 | Current employment is, of course, a primary worry for individual governments as well. In its turn, it may well hamper the development of a common vision which is needed to address properly the social consequences of a declining defence industry, including the loss of know-how and its effects on human capital. By contrast, a common vision will favour a balanced job creation and avoid the risk of losing researchers and highly-specialised senior technicians and scientists to third countries, contrary to the goals that the EU is seeking to achieve with the EU 2020 strategy. |
| --- | --- |

2.10

Current employment is, of course, a primary worry for individual governments as well. In its turn, it may well hamper the development of a common vision which is needed to address properly the social consequences of a declining defence industry, including the loss of know-how and its effects on human capital. By contrast, a common vision will favour a balanced job creation and avoid the risk of losing researchers and highly-specialised senior technicians and scientists to third countries, contrary to the goals that the EU is seeking to achieve with the EU 2020 strategy.

| 2.11 | EU approaches and the intergovernmental framework can and should work in the same perspective. As long as national sovereignty prevails, the output of any common framework will bear limited fruit, with few improvements to overcapacity, overlap and fragmentation. The contradictions between the philosophy of national sovereignty on the one hand and financial, technological, economic and social needs on the other are manifest. |
| --- | --- |

2.11

EU approaches and the intergovernmental framework can and should work in the same perspective. As long as national sovereignty prevails, the output of any common framework will bear limited fruit, with few improvements to overcapacity, overlap and fragmentation. The contradictions between the philosophy of national sovereignty on the one hand and financial, technological, economic and social needs on the other are manifest.

| 2.12 | It is thus worrying that the objective of "pooling and sharing", i.e. the organisation of European interdependence, has not been put in terms of a common strategy. In spite of a broadly-felt awareness of the changed international context the pressure from outside is apparently not yet strong enough for the promotion of common approaches and solutions. Remarkably enough, by contrast, European countries are still willing to remain dependent on the US in the area of defence procurement instead of purchasing in Europe. |
| --- | --- |

2.12

It is thus worrying that the objective of "pooling and sharing", i.e. the organisation of European interdependence, has not been put in terms of a common strategy. In spite of a broadly-felt awareness of the changed international context the pressure from outside is apparently not yet strong enough for the promotion of common approaches and solutions. Remarkably enough, by contrast, European countries are still willing to remain dependent on the US in the area of defence procurement instead of purchasing in Europe.

| 2.13 | If Europe wishes to maintain a sound security and defence industry, capable of developing and producing cutting edge systems, and thereby ensuring its own security, a radical change in mindset and policies is needed. Waiting any longer would hasten a downsizing of capabilities below levels from which the EU could climb back to the top in essential areas. This would be still more difficult as cuts in R&D spending would directly affect a generation of researchers and qualified employees. If Europe does not succeed, industries may disappear, jobs will be lost and know-how will evaporate, leaving Europe at the mercy of others. A sense of urgency and action is needed among those who care for Europe and European security. |
| --- | --- |

2.13

If Europe wishes to maintain a sound security and defence industry, capable of developing and producing cutting edge systems, and thereby ensuring its own security, a radical change in mindset and policies is needed. Waiting any longer would hasten a downsizing of capabilities below levels from which the EU could climb back to the top in essential areas. This would be still more difficult as cuts in R&D spending would directly affect a generation of researchers and qualified employees. If Europe does not succeed, industries may disappear, jobs will be lost and know-how will evaporate, leaving Europe at the mercy of others. A sense of urgency and action is needed among those who care for Europe and European security.

3.   Political context

| 3.1 | The Treaty on European Union rightly underlines the inextricable link between foreign, security and defence policy. An effective foreign policy has to be built on convincing defence capabilities. Adequate defence capabilities, in their turn, must be designed and developed in the light of perceived threats and agreed objectives in a very complicated and fragile international context. |
| --- | --- |

3.1

The Treaty on European Union rightly underlines the inextricable link between foreign, security and defence policy. An effective foreign policy has to be built on convincing defence capabilities. Adequate defence capabilities, in their turn, must be designed and developed in the light of perceived threats and agreed objectives in a very complicated and fragile international context.

| 3.2 | The core factor is the EU's position and role in tomorrow's world, taking into account the rapidly changing geopolitical realities in which an increasing number of world players emerge. From that perspective, the EESC considers that it is high time for a concerted drive in Europe. Past and recent experience proves that continuing traditional approaches risks sidelining Europe and the Member States. |
| --- | --- |

3.2

The core factor is the EU's position and role in tomorrow's world, taking into account the rapidly changing geopolitical realities in which an increasing number of world players emerge. From that perspective, the EESC considers that it is high time for a concerted drive in Europe. Past and recent experience proves that continuing traditional approaches risks sidelining Europe and the Member States.

| 3.3 | The EESC calls for a stable and predictable future for European armed forces befitting Europe's current economic and technological weight. The huge time lags from the design of systems to bringing them on line reinforces the need to make decisions as of this year. |
| --- | --- |

3.3

The EESC calls for a stable and predictable future for European armed forces befitting Europe's current economic and technological weight. The huge time lags from the design of systems to bringing them on line reinforces the need to make decisions as of this year.

| 3.4 | From a social and political point of view, the EESC highlights four important aspects regarding the need for effective European defence capabilities:






  — | protecting the populace |
| --- | --- | --- |

3.4

From a social and political point of view, the EESC highlights four important aspects regarding the need for effective European defence capabilities:

—

protecting the populace

| — | the need for properly equipped soldiers |
| --- | --- |

—

the need for properly equipped soldiers

| — | stable and predictable jobs |
| --- | --- |

—

stable and predictable jobs

| — | well-designed European humanitarian and military actions in the world. |
| --- | --- |

—

well-designed European humanitarian and military actions in the world.

| 3.5 | There is an ongoing debate over the future of the CSDP, although it is rarely put in such terms. Many topics such as the use of Battle groups, the controversy over the development of a single operational HQ, funding of EU CSDP missions, finding contributions to those missions and calls for a review of Europe Security Strategy, amount to a discussion on the CSDP in all but name. It would be a step forward to approach it in that way. Moreover, in all deliberations concerning these important issues the industrial implications of decisions (or non-decisions) should also be considered. It will also prove the strong connection between industrial capabilities and the implementation of a CSDP. The prime responsibility is with governments. |
| --- | --- |

3.5

There is an ongoing debate over the future of the CSDP, although it is rarely put in such terms. Many topics such as the use of Battle groups, the controversy over the development of a single operational HQ, funding of EU CSDP missions, finding contributions to those missions and calls for a review of Europe Security Strategy, amount to a discussion on the CSDP in all but name. It would be a step forward to approach it in that way. Moreover, in all deliberations concerning these important issues the industrial implications of decisions (or non-decisions) should also be considered. It will also prove the strong connection between industrial capabilities and the implementation of a CSDP. The prime responsibility is with governments.

| 3.6 | The Trans-Atlantic relationship and NATO are of critical importance. For a long time, Americans have severely criticised the way Europeans look after their defence obligations within the Alliance. There is a continuous call on both sides of the Atlantic for a "European pillar" in NATO. Until now the opposite has been happening. |
| --- | --- |

3.6

The Trans-Atlantic relationship and NATO are of critical importance. For a long time, Americans have severely criticised the way Europeans look after their defence obligations within the Alliance. There is a continuous call on both sides of the Atlantic for a "European pillar" in NATO. Until now the opposite has been happening.

| 3.7 | The lack of a proper "European pillar" has deep political roots. There still is insufficient political will in Europe to define European "strategic" interests or common key military capabilities. By contrast, the US and other countries use the concept of strategic activities, encompassing all research and industries which contribute to the global security of their citizens, be it civil or military. |
| --- | --- |

3.7

The lack of a proper "European pillar" has deep political roots. There still is insufficient political will in Europe to define European "strategic" interests or common key military capabilities. By contrast, the US and other countries use the concept of strategic activities, encompassing all research and industries which contribute to the global security of their citizens, be it civil or military.

| 3.8 | Against this backdrop the EESC considers that building a "European pillar", the exaggerated dependence of European military capabilities on the US, should be replaced by a more balanced relationship. Parallel to a badly needed discussion on common European strategic interests which is an exclusive responsibility of governments, orderly planning through cooperation between the European institutions, the Member States and defence industries as well as a progressive review of Member States' habits of buying automatically "off the shelf" in the US, should start as soon as possible. |
| --- | --- |

3.8

Against this backdrop the EESC considers that building a "European pillar", the exaggerated dependence of European military capabilities on the US, should be replaced by a more balanced relationship. Parallel to a badly needed discussion on common European strategic interests which is an exclusive responsibility of governments, orderly planning through cooperation between the European institutions, the Member States and defence industries as well as a progressive review of Member States' habits of buying automatically "off the shelf" in the US, should start as soon as possible.

| 3.9 | Improving conditions for industrial cooperation with US industries on a more equal footing will be beneficial from both an industrial and financial perspective. |
| --- | --- |

3.9

Improving conditions for industrial cooperation with US industries on a more equal footing will be beneficial from both an industrial and financial perspective.

4.   European defence industry

| 4.1 | There is a close relationship between foreign and defence/security policies and defence industries. Despite privatisation governments have a large stake in defence industry as customer, as regulator and as providers of export licenses. |
| --- | --- |

4.1

There is a close relationship between foreign and defence/security policies and defence industries. Despite privatisation governments have a large stake in defence industry as customer, as regulator and as providers of export licenses.

| 4.2 | Defence industries have considerable room for manoeuvre in export markets. This is partly due to privatisation, partly to encouragement by governments: the economic crisis is turning some defence ministers into explicitly stated export promoters. Anyway, the crisis is forcing the defence sector to consider exports as a central feature of their business models. On average, 2011 was a very profitable year for European industries. Companies are also fairly successful in developing "dual use" production. |
| --- | --- |

4.2

Defence industries have considerable room for manoeuvre in export markets. This is partly due to privatisation, partly to encouragement by governments: the economic crisis is turning some defence ministers into explicitly stated export promoters. Anyway, the crisis is forcing the defence sector to consider exports as a central feature of their business models. On average, 2011 was a very profitable year for European industries. Companies are also fairly successful in developing "dual use" production.

| 4.3 | World players like China, India and Brazil, have their own foreign political ambitions, culminating in rising defence budgets. At the moment this creates perceived opportunities for European exports. How long will this last? Industry is still doing reasonably well, but its performances are largely based on investments of some 20 to 25 years ago. Further dropping or stagnating investments at this very moment would already have irreversible consequences in the near future. |
| --- | --- |

4.3

World players like China, India and Brazil, have their own foreign political ambitions, culminating in rising defence budgets. At the moment this creates perceived opportunities for European exports. How long will this last? Industry is still doing reasonably well, but its performances are largely based on investments of some 20 to 25 years ago. Further dropping or stagnating investments at this very moment would already have irreversible consequences in the near future.

| 4.4 | Moreover, it is realistic to expect that emerging powers will start to build up their industry independently of Western industries, and, subsequently, that they, as Europe’s future competitors in third-country markets, will increasingly block imports from Western countries or link these to conditions. |
| --- | --- |

4.4

Moreover, it is realistic to expect that emerging powers will start to build up their industry independently of Western industries, and, subsequently, that they, as Europe’s future competitors in third-country markets, will increasingly block imports from Western countries or link these to conditions.

| 4.5 | At the moment, there are no new major programmes in Europe about to start and this will undoubtedly affect future export success. Moreover, it has been some time since any major emerging country has required a significant level of technology transfer and production in their countries. |
| --- | --- |

4.5

At the moment, there are no new major programmes in Europe about to start and this will undoubtedly affect future export success. Moreover, it has been some time since any major emerging country has required a significant level of technology transfer and production in their countries.

| 4.6 | One-time export contracts will in all likelihood be used to copy technology from Western industries. For these an alternative to blocking imports could be to set up production (and development) facilities in the countries concerned. At the moment it is largely a matter of speculation to what extent such development will affect facilities and labour opportunities in Europe. In the longer term, it is likely that the position of European industry will be undermined by emerging giants. Enhanced technology and production in these countries will also affect European (potential) export markets in other third countries. Competition in products as well as prices will become fiercer. |
| --- | --- |

4.6

One-time export contracts will in all likelihood be used to copy technology from Western industries. For these an alternative to blocking imports could be to set up production (and development) facilities in the countries concerned. At the moment it is largely a matter of speculation to what extent such development will affect facilities and labour opportunities in Europe. In the longer term, it is likely that the position of European industry will be undermined by emerging giants. Enhanced technology and production in these countries will also affect European (potential) export markets in other third countries. Competition in products as well as prices will become fiercer.

| 4.7 | Due to long time lags in development and production as well as technological investments and continuous innovation, Europe needs targeted coordination to ensure an up-to-date self-reliant defence industry. As long as market size is predominantly determined by national borders, it is almost automatically below critical mass, even in large Member States. Export to third countries may alleviate this to some extent, but the future is uncertain, while market conditions are often far from stable. |
| --- | --- |

4.7

Due to long time lags in development and production as well as technological investments and continuous innovation, Europe needs targeted coordination to ensure an up-to-date self-reliant defence industry. As long as market size is predominantly determined by national borders, it is almost automatically below critical mass, even in large Member States. Export to third countries may alleviate this to some extent, but the future is uncertain, while market conditions are often far from stable.

| 4.8 | Persisting declining budgets, which under present circumstances imply considerable limitations, should be a wake-up call. They affect budgets for investment and procurement, certainly when operational and maintenance costs remain at the same level or increase as a result of ongoing military operations (Afghanistan, Libya, anti-piracy operations, to name a few). |
| --- | --- |

4.8

Persisting declining budgets, which under present circumstances imply considerable limitations, should be a wake-up call. They affect budgets for investment and procurement, certainly when operational and maintenance costs remain at the same level or increase as a result of ongoing military operations (Afghanistan, Libya, anti-piracy operations, to name a few).

| 4.9 | This results in postponing or even cancelling investments that are essential for industry to ensure the upkeep and renewal of production and development capabilities. Moreover, in difficult times industry itself will be less prepared to invest in such upkeep or new activities. Only by working together in a coherent fashion can the needed investments be ensured. |
| --- | --- |

4.9

This results in postponing or even cancelling investments that are essential for industry to ensure the upkeep and renewal of production and development capabilities. Moreover, in difficult times industry itself will be less prepared to invest in such upkeep or new activities. Only by working together in a coherent fashion can the needed investments be ensured.

| 4.10 | The EESC advocates a well-designed European industrial policy for the defence sector, from the designing of systems to the operational phase. This is a matter of specific industrial policy. It is by its very nature a public market: R&D must be financed beyond seed money due to unprofitable margins at the start and to specific governmental requirements. It is necessary to identify European key industrial capabilities as well as investment policies to promote robust European production. As no single country has sufficient resources available to fund "new generation" armaments, it is necessary to mix national and European goals as well as national and European resources, financially as well as industrially. Governance should be based on shared EU and national competences according to the agreed Europe 2020 strategy. This is also an effective label to optimise coordination between the European institutions and within the Commission which still functions far below its potential. In this respect the Task Force which will start shortly as a platform – Commission, EDA, EEAS - to discuss priorities, capabilities and gaps, can provide valuable support. |
| --- | --- |

4.10

The EESC advocates a well-designed European industrial policy for the defence sector, from the designing of systems to the operational phase. This is a matter of specific industrial policy. It is by its very nature a public market: R&D must be financed beyond seed money due to unprofitable margins at the start and to specific governmental requirements. It is necessary to identify European key industrial capabilities as well as investment policies to promote robust European production. As no single country has sufficient resources available to fund "new generation" armaments, it is necessary to mix national and European goals as well as national and European resources, financially as well as industrially. Governance should be based on shared EU and national competences according to the agreed Europe 2020 strategy. This is also an effective label to optimise coordination between the European institutions and within the Commission which still functions far below its potential. In this respect the Task Force which will start shortly as a platform – Commission, EDA, EEAS - to discuss priorities, capabilities and gaps, can provide valuable support.

| 4.11 | R&D is a central theme. The defence industry is a high technology, knowledge-intensive industrial activity, which would also be needed for full-fledged prototype development. R&D is almost never an exclusive matter for industry alone. Development and system lifecycles are simply too long, and the financial impact too big for industry to carry all financial risks. History proves that all successful programmes are carried out jointly by governments and industry. |
| --- | --- |

4.11

R&D is a central theme. The defence industry is a high technology, knowledge-intensive industrial activity, which would also be needed for full-fledged prototype development. R&D is almost never an exclusive matter for industry alone. Development and system lifecycles are simply too long, and the financial impact too big for industry to carry all financial risks. History proves that all successful programmes are carried out jointly by governments and industry.

| 4.12 | A very high percentage of defence R&D in the world comes from governments either directly or indirectly through purchases. Not surprisingly, defence industries are on average avoiding too much financial risk given the nature of the products. Defence R&D is particularly vulnerable to government cutbacks. |
| --- | --- |

4.12

A very high percentage of defence R&D in the world comes from governments either directly or indirectly through purchases. Not surprisingly, defence industries are on average avoiding too much financial risk given the nature of the products. Defence R&D is particularly vulnerable to government cutbacks.

| 4.13 | Consequently, besides industrial consolidation, sufficient funding and pooling agreed among the Member States, the Commission and industry is needed for research, technology and development. Defence investments require a high degree of funding for R&D and technological projects. In addition, access to critical technologies must be ensured. If critical technologies for development and production were no longer accessible due to restrictions on exports imposed by others, serious problems to achieving European security goals would arise. |
| --- | --- |

4.13

Consequently, besides industrial consolidation, sufficient funding and pooling agreed among the Member States, the Commission and industry is needed for research, technology and development. Defence investments require a high degree of funding for R&D and technological projects. In addition, access to critical technologies must be ensured. If critical technologies for development and production were no longer accessible due to restrictions on exports imposed by others, serious problems to achieving European security goals would arise.

| 4.14 | R&D performed outside defence organisations plays an increasingly important role due to progress in independent science and technology in many areas. Often it is only in the last phases of development that the ultimate application determines whether the R&D can be identified as "defence" or "civil" R&D. "Dual-use" R&D is of growing importance for defence applications, see for instance IT. It is thus of primary importance for the European Defence Technological and Industrial Base (EDTIB) to stimulate "dual-use" R&D, in particular as it enables funding from outside the defence communities. |
| --- | --- |

4.14

R&D performed outside defence organisations plays an increasingly important role due to progress in independent science and technology in many areas. Often it is only in the last phases of development that the ultimate application determines whether the R&D can be identified as "defence" or "civil" R&D. "Dual-use" R&D is of growing importance for defence applications, see for instance IT. It is thus of primary importance for the European Defence Technological and Industrial Base (EDTIB) to stimulate "dual-use" R&D, in particular as it enables funding from outside the defence communities.

| 4.15 | Public R&D funding at EU level should be agreed among the Member States. It can be carried out via the upcoming Framework Programme 8 (FP8) or via a separate fund, preferably via packages of advanced research areas, for example nanotechnology and artificial intelligence. Special procedures must be planned given the relationship between the defence industry and the public sector. |
| --- | --- |

4.15

Public R&D funding at EU level should be agreed among the Member States. It can be carried out via the upcoming Framework Programme 8 (FP8) or via a separate fund, preferably via packages of advanced research areas, for example nanotechnology and artificial intelligence. Special procedures must be planned given the relationship between the defence industry and the public sector.

| 4.16 | The EDA and the Commission should have a prominent role as foreseen in the European Framework Cooperation, also to avoid day-to-day political interference. EDA should be given the opportunity to play its full role as provided in the Lisbon Treaty (7). |
| --- | --- |

4.16

The EDA and the Commission should have a prominent role as foreseen in the European Framework Cooperation, also to avoid day-to-day political interference. EDA should be given the opportunity to play its full role as provided in the Lisbon Treaty (7).

| 4.17 | An appropriate workforce with up-to-date skills is crucial for an industrial and R&D programme for defence (8). This is another firm argument for a stable framework for R&D and industry instead of disorderly restructuring. It has to be kept in mind that defence workforces are the cement on which the future of defence capabilities is built. Consultation of and communication with industry, R&D institutes, higher education, military organisations and interested trade unions must help ensure that both ongoing restructuring and forward-looking production of armaments in Europe will be organised properly. |
| --- | --- |

4.17

An appropriate workforce with up-to-date skills is crucial for an industrial and R&D programme for defence (8). This is another firm argument for a stable framework for R&D and industry instead of disorderly restructuring. It has to be kept in mind that defence workforces are the cement on which the future of defence capabilities is built. Consultation of and communication with industry, R&D institutes, higher education, military organisations and interested trade unions must help ensure that both ongoing restructuring and forward-looking production of armaments in Europe will be organised properly.

| 4.18 | Budget constraints make it necessary to tackle overlaps and ineffectiveness. Controlled consolidation is not necessarily equivalent to building big companies. It means building sufficient critical mass and quality by international standards which ensure a competitive position in home markets and third countries. Coordinating the planning of projects at European level by governments, relevant EU players and industry is increasingly necessary. |
| --- | --- |

4.18

Budget constraints make it necessary to tackle overlaps and ineffectiveness. Controlled consolidation is not necessarily equivalent to building big companies. It means building sufficient critical mass and quality by international standards which ensure a competitive position in home markets and third countries. Coordinating the planning of projects at European level by governments, relevant EU players and industry is increasingly necessary.

| 4.19 | Differences in size and output of industries are a fact. Member States differ greatly in industrial importance. Part of an agreement among participating countries should be to ensure that industries in non-LoI countries (=main producers) will be connected to relevant projects. This approach is not only politically desirable, it also promotes a fruitful relationship between big and smaller companies as well as research institutes. As suppliers, SMEs should successfully add to smart specialisation chains. |
| --- | --- |

4.19

Differences in size and output of industries are a fact. Member States differ greatly in industrial importance. Part of an agreement among participating countries should be to ensure that industries in non-LoI countries (=main producers) will be connected to relevant projects. This approach is not only politically desirable, it also promotes a fruitful relationship between big and smaller companies as well as research institutes. As suppliers, SMEs should successfully add to smart specialisation chains.

| 4.20 | Specific attention is required for a perceived vulnerability in countries of Central Europe due to their exposed geographical position. In view of both the need to make citizens in these countries feel well protected as well as the desirability to make full use of specific technical knowledge in the field of defence, the EESC underlines the need of appropriate integration of available knowledge and competences in countries in Central Europe in ongoing and future defence projects. |
| --- | --- |

4.20

Specific attention is required for a perceived vulnerability in countries of Central Europe due to their exposed geographical position. In view of both the need to make citizens in these countries feel well protected as well as the desirability to make full use of specific technical knowledge in the field of defence, the EESC underlines the need of appropriate integration of available knowledge and competences in countries in Central Europe in ongoing and future defence projects.

| 4.21 | An integrated European market for defence products would create a more stable home market. Besides combining existing national markets, a European market would encourage harmonisation or even standardisation of requirements and procurement rules between the various Member States. More harmonisation or standardisation would improve financial and economic conditions enhancing the competitiveness of European companies in a global market. |
| --- | --- |

4.21

An integrated European market for defence products would create a more stable home market. Besides combining existing national markets, a European market would encourage harmonisation or even standardisation of requirements and procurement rules between the various Member States. More harmonisation or standardisation would improve financial and economic conditions enhancing the competitiveness of European companies in a global market.

| 4.22 | A European defence market would have critical mass. Against that backdrop, the EESC points to damaging consequences when the Member States continue to buy "off the shelf" abroad, particularly in the US. First, it undermines the advantages of a European market for industry; consequently prices for such defence products would rise for their European customers, if industry were prevented from selling in third-country markets where (state) competition will definitely become increasingly fierce. Second, European countries that buy "off the shelf" in the US pay for American technological costs which are included in the price of those products. |
| --- | --- |

4.22

A European defence market would have critical mass. Against that backdrop, the EESC points to damaging consequences when the Member States continue to buy "off the shelf" abroad, particularly in the US. First, it undermines the advantages of a European market for industry; consequently prices for such defence products would rise for their European customers, if industry were prevented from selling in third-country markets where (state) competition will definitely become increasingly fierce. Second, European countries that buy "off the shelf" in the US pay for American technological costs which are included in the price of those products.

| 4.23 | Given the financial and international political prospects, a fundamental European debate and operational conclusions are indispensable. If not all Member States are willing to participate in a common framework, the principle of "Enhanced cooperation" should prevail. More integration and a positive attitude to buying European will turn out to be the only way in which market sizes comparable to those in the US can be approximated. Without an effective home market there are grounds for serious doubts as to whether European industry has any hope of competing at global level. |
| --- | --- |

4.23

Given the financial and international political prospects, a fundamental European debate and operational conclusions are indispensable. If not all Member States are willing to participate in a common framework, the principle of "Enhanced cooperation" should prevail. More integration and a positive attitude to buying European will turn out to be the only way in which market sizes comparable to those in the US can be approximated. Without an effective home market there are grounds for serious doubts as to whether European industry has any hope of competing at global level.

5.   Some specific issues

| 5.1 | The industrial landscape between the various armed forces - land, sea, air - differs significantly from country to country. In a number of areas no country can any longer be considered to be able to develop on its own new generations of armaments. |
| --- | --- |

5.1

The industrial landscape between the various armed forces - land, sea, air - differs significantly from country to country. In a number of areas no country can any longer be considered to be able to develop on its own new generations of armaments.

| 5.2 | In the land sector only a limited number of large system integrating companies is able to develop and produce Main Battle Tanks (MBT) and lighter military vehicles. Main European producers are in France, Germany and the UK. There is a large spectrum of subsystem manufacturers and third tier suppliers with an under-representation from Central Europe. |
| --- | --- |

5.2

In the land sector only a limited number of large system integrating companies is able to develop and produce Main Battle Tanks (MBT) and lighter military vehicles. Main European producers are in France, Germany and the UK. There is a large spectrum of subsystem manufacturers and third tier suppliers with an under-representation from Central Europe.

| 5.3 | Many countries develop their "own" naval industry, and build naval vessels with a great variety of size and complexity from country to country. The LoI nations and the Netherlands are leading, also in the area of concept design and complex naval research facilities which are quite different from developing civil ship building. Here again there is a broad spectrum of subsystem manufacturers and third tier suppliers. |
| --- | --- |

5.3

Many countries develop their "own" naval industry, and build naval vessels with a great variety of size and complexity from country to country. The LoI nations and the Netherlands are leading, also in the area of concept design and complex naval research facilities which are quite different from developing civil ship building. Here again there is a broad spectrum of subsystem manufacturers and third tier suppliers.

| 5.4 | Military aircraft are only developed and produced in a few countries. The industry is concentrated in a small number of largely multinational companies, operating at European level and beyond. The industry is primarily concentrated in EADS, BEA-Systems, Dassault and Saab-Aircraft. Advanced aerodynamic research is limited to a few countries. |
| --- | --- |

5.4

Military aircraft are only developed and produced in a few countries. The industry is concentrated in a small number of largely multinational companies, operating at European level and beyond. The industry is primarily concentrated in EADS, BEA-Systems, Dassault and Saab-Aircraft. Advanced aerodynamic research is limited to a few countries.

| 5.5 | The Electronics sector, including Command, Communication and Control, is of increasing importance for defence with major industrial players such as Thales, "BAE Systems" and "Finmeccanica". For the largest European electronics industry groups Philips and Siemens, defence is less important. For these, the production volume for cost-effective mass production of specific electronic components such as integrated circuits for defence is too small anyway. Engaging these large industrial groups, however, underlines the importance of dual use in this field. |
| --- | --- |

5.5

The Electronics sector, including Command, Communication and Control, is of increasing importance for defence with major industrial players such as Thales, "BAE Systems" and "Finmeccanica". For the largest European electronics industry groups Philips and Siemens, defence is less important. For these, the production volume for cost-effective mass production of specific electronic components such as integrated circuits for defence is too small anyway. Engaging these large industrial groups, however, underlines the importance of dual use in this field.

| 5.6 | As regards ammunition and explosives, the number of industries has gradually declined over the last decades partly due to environmental constraints. Public safety forces such industries either to move older production sites or simply to close them down. |
| --- | --- |

5.6

As regards ammunition and explosives, the number of industries has gradually declined over the last decades partly due to environmental constraints. Public safety forces such industries either to move older production sites or simply to close them down.

| 5.7 | Access to critical technologies is essential, and should be supported in the framework of a CSDP. The same goes for certain materials such as carbon fibres or materials for electronic components. |
| --- | --- |

5.7

Access to critical technologies is essential, and should be supported in the framework of a CSDP. The same goes for certain materials such as carbon fibres or materials for electronic components.

| 5.8 | The Defence Package of 2007, adopted in 2009, can be very supportive. The Member States should have transposed the directives in the summer of 2011. It is still too early to be positive or sceptical about their knock-on effects for creating one internal market. The process is not yet finalised and the implementation of the goal of inter-Community transfer of defence products as well as of notions such as essential national security interests remains to be seen. |
| --- | --- |

5.8

The Defence Package of 2007, adopted in 2009, can be very supportive. The Member States should have transposed the directives in the summer of 2011. It is still too early to be positive or sceptical about their knock-on effects for creating one internal market. The process is not yet finalised and the implementation of the goal of inter-Community transfer of defence products as well as of notions such as essential national security interests remains to be seen.

| 5.9 | Article TFEU 346 provides a derogation from EU procurement laws for the protection of essential national security interests. This broad formulation may prevent proper market developments, particularly in desirable supply chains. The EESC advocates a more specific interpretation of Article 346 that opens sufficient opportunities for European solutions and optimal European supply chains, fostering security of supply, available specialties in Member States, and value for money. |
| --- | --- |

5.9

Article TFEU 346 provides a derogation from EU procurement laws for the protection of essential national security interests. This broad formulation may prevent proper market developments, particularly in desirable supply chains. The EESC advocates a more specific interpretation of Article 346 that opens sufficient opportunities for European solutions and optimal European supply chains, fostering security of supply, available specialties in Member States, and value for money.

| 5.10 | National security of information causes similar problems as those mentioned in point 5.9 and has to be reviewed as well. It is also an important and sensitive issue in the involvement of European industries in defence projects in the US. |
| --- | --- |

5.10

National security of information causes similar problems as those mentioned in point 5.9 and has to be reviewed as well. It is also an important and sensitive issue in the involvement of European industries in defence projects in the US.

| 5.11 | "Sharing and pooling", including common training programmes, should be a forward-looking programme. A basic condition is that lip service is replaced by concrete planning and a targeted approach with clearly identified steps. However, as long as there is no agreement on defence doctrines it will be very difficult to carry out "sharing and pooling" in a feasible way. |
| --- | --- |

5.11

"Sharing and pooling", including common training programmes, should be a forward-looking programme. A basic condition is that lip service is replaced by concrete planning and a targeted approach with clearly identified steps. However, as long as there is no agreement on defence doctrines it will be very difficult to carry out "sharing and pooling" in a feasible way.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  See "Towards a Stronger Europe", a report by an Independent Study Team established by Defence Ministers of Nations of the Independent European Programme Group to make proposals to improve the competitiveness of Europe’s defence equipment industry.

1

(2)  Common security and defence policy as an integral part of the common foreign and security policy, Treaty on European Union (TEU), art. 42 and the following. OJ C 115, 09.05.2008.

2

(3)  Directives 2009/43EC (OJ L 146, 10.06.2009) and 2009/81/EC (OJ L 216, 20.08.2009). The Defence Package was adopted by the Council and the EP in 2009. It should have been transposed by the Members States during the summer of 2011. The Defence Package also contained a Communication "Strategy for a Stronger and More Competitive European Defence Industry", COM(2007) 764, 05.12.2007.

3

(4)  The European Funds should be involved in this process: the upcoming FP8, European Regional Development Fund, Cohesion Fund, European Social Fund.

4

(5)  EU State of the Union, November 2011.

5

(6)  EP Resolution of 14 December 2011 on the impact of the financial crisis on the defence sector in the EU Member States (2011/2177(INI)).

6

(7)  See Art. 45, par. 1 and Art. 42, par. 3 TEU, OJ C 115, 09/05/2008.

7

(8)  See A comprehensive analysis of emerging competences and skill needs for optimal preparation and management of change in the EU defence industry, Final report, May 2009, a report by Eurostrategies for the European Commission.

8

A comprehensive analysis of emerging competences and skill needs for optimal preparation and management of change in the EU defence industry, Final report, May 2009

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/24 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/24

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Opinion of the European Economic and Social Committee on ‘Female entrepreneurs — specific policies to increase EU growth and employment’ (own-initiative opinion)

2012/C 299/05

Rapporteur: Madi SHARMA

On 19 January 2012 the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

Female entrepreneurs — specific policies to increase EU growth and employment.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 121 votes to 7 with 4 abstentions.

1.   Conclusions and recommendations for promoting female entrepreneurship in Europe

1.1   This opinion makes four key concrete proposals for policy interventions to promote and develop female entrepreneurship in order to support sustainable growth in Europe. It focuses solely on female entrepreneurship and does not address the wider dimension of female engagement in the labour market or the decision making process.

1.2   The policy recommendations are not cost–neutral, but the small investment required by the European Commission and Member States will be outweighed by the return on investment from the added economic benefit which results from the increase of female-owned businesses in the economy and from job creation within these companies. It could also be argued that funds could be redirected from low impact projects to better support the objectives.

1.3   Furthermore, the policy recommendations do not require any new structures and can be integrated into current ministries for economic development, but must not be established in gender ministries, because female entrepreneurship is an "economic" issue.

1.4   These recommendations can be supported by evidence of return on investment from the results of similar actions in the USA in terms of a doubling the number of female entrepreneurs, an increase in jobs created and economic input into society. It was the mandatory element of data collection and procurement policy which had greatest effect (1).

1.5   Create an office of European Women's Business Ownership within the European Commission and in competent ministries (preferably not gender ministries to provide a distinction between economic activities and gender equality responsibilities) at Member State level, without establishing whole new structures.

1.6   Appoint a Women’s Enterprise Director/Envoy or High Level Representative within the European Commission and Member States' enterprise ministries, with a cross-departmental role in raising awareness about the economic benefits of encouraging more women to start and grow businesses.

1.7   Collect data and produce annual policy and research updates on women’s enterprise across European regions, increasing access to gender-disaggregated data across government departments and agencies.

1.8   Enforce current legislation in areas of gender equality. This should include a focus on ensuring that the allocation of resources and funds is analysed by gender to deliver transparency, accountability and due diligence in terms of proof of genuine gender equality compliance.

1.9   To create an enabling environment for female entrepreneurs the following should also be considered:

| — | including men in debate and communication; |
| --- | --- |

—

including men in debate and communication;

| — | removing gender stereotyping, particularly in education and career paths; |
| --- | --- |

—

removing gender stereotyping, particularly in education and career paths;

| — | promoting academic studies which can lead to new business start-ups for women; |
| --- | --- |

—

promoting academic studies which can lead to new business start-ups for women;

| — | ensuring fair access to funding and resources on equal terms; and |
| --- | --- |

—

ensuring fair access to funding and resources on equal terms; and

| — | improving social protection for self-employed. |
| --- | --- |

—

improving social protection for self-employed.

2.   Context

2.1   EU growth and small and medium-sized enterprises (SMEs)

2.1.1   The European Parliament resolution on women entrepreneurship in small and medium-sized enterprises (2) recognised that "there are discrepancies between Member States in the numbers of women entrepreneurs; whereas fewer women than men consider entrepreneurship as a viable career option and despite the upturn in the last decade in the numbers of women running SMEs, in the European Union only 1 in 10 women are entrepreneurs as opposed to 1 in 4 men; whereas women make up around 60 % of all university graduates, they are underrepresented in full-time work in the labour market, particularly in the field of business; whereas it is crucial to encourage and empower women to embark on entrepreneurial ventures in order to reduce existing gender inequalities".

2.1.2   Against the background of the financial crisis in Europe, austerity became the key word in finding a way out of the crisis. Only recently was talk of austerity complemented by talk on investment. Policies to promote growth must be the key focus.

2.1.3   In a globally changing landscape characterised by uncertainty, continuous change and much greater global competition recognising the role of entrepreneurs in channelling such investment for economic recovery is one of the key elements of ensuring a competitive and dynamic European economy. Having recognised the role of SMEs in our society, the European Commission has now made harnessing the potential of SMEs a primary focus.

2.1.4   Entrepreneurs have become even more important as providers of employment opportunities and key players for the wellbeing of local and regional communities (3). The EU, through the Lisbon Growth and Jobs Strategy, the Small Business Act, Europe 2020 and the new COSME (4), has thus firmly placed the needs of SMEs at the heart of its activities achieving positive results.

2.1.5   The national and local environments within the EU in which SMEs operate are very different and so is the nature of SMEs themselves. Policies addressing the needs of SMEs therefore need to fully recognise this diversity and fully respect the principle of subsidiarity (Think Small First - A Small Business Act for Europe).

2.1.6   In its recent opinion on the Communication "Small Business, Big World – a new partnership to help SMEs seize global opportunities" (5) the EESC notes that the Commission assumes gender equality in business, but makes no specific recommendation to support female-owned SMEs looking at internationalisation.

2.1.7   Europe lacks an infrastructure that specifically supports female entrepreneurship. None of the above policies, subsequent interventions or provisions has fully recognised the gendered issues of business ownership, nor have they identified the growth opportunities or diversity within the business sector (home-based, micro-enterprises, family-owned).

2.2   Current policy on women-owned businesses

2.2.1   Women-owned businesses are critical to the health of the European economy. For more than a decade, governments and a range of organisations in the public, private and academic sectors have recognised the value of supporting women’s enterprise from both a policy and practical perspective. The result has been increased awareness of the contribution these businesses make to the economy.

2.2.2   The Commission is currently working with Member States to find ways to overcome the factors that discourage women from taking up the option of entrepreneurship and a number of initiatives have been launched including:

| — | The European Network of Mentors for Women Entrepreneurs, inaugurated during a Polish Presidency event on 15 November 2011. The Network is one of the actions proposed in the 2011 SBA Review, enforces and complements the actions to promote, support and encourage female entrepreneurship. |
| --- | --- |

—

The European Network of Mentors for Women Entrepreneurs, inaugurated during a Polish Presidency event on 15 November 2011. The Network is one of the actions proposed in the 2011 SBA Review, enforces and complements the actions to promote, support and encourage female entrepreneurship.

| — | European network for policy makers to promote women's entrepreneurship (WES). |
| --- | --- |

—

European network for policy makers to promote women's entrepreneurship (WES).

| — | Women's entrepreneurship portal (6). |
| --- | --- |

—

Women's entrepreneurship portal (6).

3.   The economic potential

3.1   Despite encouraging progress, the EU still needs to take further significant measures to release the full potential of enterprises and especially SMEs owned by women. Women are too often invisible within the business arena – in the media, within business representative organisations, and when it comes to influencing policy.

3.2   There is a continuing gender gap in terms of entrepreneurship, which translates into fewer women entrepreneurs. Today women entrepreneurs in Europe make up only 30 % of all entrepreneurs. This adds to the unexploited potential for economic growth.

3.3   In 2012, the role of women-owned businesses is more important than ever, there are women-owned businesses operating across Europe, and neighbouring regions such as Euromed (7), in every sector, and their role in growing the economy, and creating and sustaining new jobs is crucial to recovery and growth.

3.4   Most worrying is that at a time when government funding for business support has been cut in many countries, and when many businesses are struggling to survive and grow, policies to support women owned business have fallen off the agenda, despite the laudable words. Women–owned businesses are a "multi-billion Euro opportunity" (8) which must be recognised and not dismissed.

3.5   One of the biggest challenges in quantifying women’s enterprise in Europe is the lack of data, both quantitative and qualitative. Business registers and many sources of government statistics (including VAT registration) are not gender-disaggregated. Similarly, gender information is not readily available from banks or business support organisations.

3.6   Despite these gaps, several consistent sources of information on entrepreneurship and self-employment provide information about male and female business-related activity. These include the Global Entrepreneurship Monitor (GEM) and the annual population surveys in most European countries (Census). Data collection in the US highlights the potential for Europe (9).

3.7   Research shows (10) that women-owned businesses invest more in training for their staff than employers in general, and that around two-thirds are aiming to increase the leadership capability of their managers. So investing to support growth-oriented women owned businesses is likely to have a greater return than on investing in businesses in general.

3.8   Most statistics are conservative forecasts and there is significant research evidence which indicates even stronger growth aspirations among female entrepreneurs, including those who are mothers (11). Research undertaken by Natwest Bank in the UK found that 88 % of women compared with 74 % of men, were predicting growth in their businesses. The growth predicted averaged 25 %.

4.   Gender equity in business

4.1   The EU has an ethical duty to give women what they really deserve. The gender agenda needs to be always at the forefront of EU decision-making. In times of crisis "gender justice" becomes even more imperative. Both men and women need to be present in the debate, as all too often issues concerning women bring only women around the table.

4.2   Gender mainstreaming policies, including legislation, are in place across Europe but do not include a focus on ensuring an analysis of the allocation of resources or funds by gender. To deliver transparency, accountability and due diligence in terms of proof of genuine gender equality compliance such analysis needs to be provided.

4.3   This is a legal requirement in the UK under the terms of "Gender Equality Duty" (12), which requires all public authorities, carrying out all their functions, to have due regard:

| — | to eliminate unlawful discrimination and harassment on the grounds of sex; |
| --- | --- |

—

to eliminate unlawful discrimination and harassment on the grounds of sex;

| — | to promote equality of opportunity between women and men. |
| --- | --- |

—

to promote equality of opportunity between women and men.

This should require an analysis of allocation of resources and funds to prove gender neutrality.

4.4   The Gender Equality Duty concept is important for ensuring gender equality through responsibility and through assessment of the allocation of resources and collection of disaggregated data from a gender perspective. This would support policy makers in assessing the true impact on female entrepreneurship. (Example: regional development (ERDF) or social (ESF) funds: The EU allocates funds to Member States, which reallocate those funds to a regional level. Often those funds are used to create jobs by creating enterprises, but at no point is the question of gender raised.) To ensure gender equality transparency, each level of policy makers should question and analyse, by gender, how the money is distributed.

4.5   Gender can be a "lens" through which other inequalities (race, disability or age) can be understood and acted upon. For gender mainstreaming to be effective across Europe there needs to be an integrated approach, particularly as highlighted in the OECD report "Tackle gender gap to boost growth" (13). A focus on gender covers all aspects of equality and affects everyone, men and women. A focus on gender recognises that inequalities between women and men result from unfairness or stereotyping which affects everyone.

4.6   A gender analysis is needed to avoid wasted resources in education and training, higher levels of ill-health, economic costs to businesses where women’s skills are not valued and their potential and talents unrecognised. Furthermore, support for career guidance, overcoming stereotypes and breaking the glass ceiling is essential to empower women of all ages. Female role models and leaders also need to be more prominently featured in the media and society to promote the positive changes women bring to the economy.

5.   Recommendations

5.1   Policy interventions

5.1.1   The EESC recognises that Europe is in a time of austerity measures, but simple specific policies for women owned enterprises could bring a return on investment that outweighs the small contributions from the EU and Member States to put these four proposals in place.

5.1.2   These proposals have not been randomly selected but come from consultations with female entrepreneurs and with business associations. Similar recommendations were made in the European Parliament resolution (14). Most importantly, similar measures were introduced in the US under the "Women's Business Ownership Act" (1988. It was the mandatory element of data collection and procurement which had the greatest effect. The proportion of female entrepreneurs to male ones in the US is now around 2:1 (the number of women business owners in the US, as a percentage of all businesses, increased from 26 % in 1992 to 57 % in 2002). This doubled the numbers of female entrepreneurs, increased the number of jobs created and increased the economic input into society.

5.1.3   The proposals would be to:

| 5.1.3.1 | Create an office of Women's Business Ownership within the European Commission and Member States’ competent ministries. It should preferably not be situated in the gender ministries to provide a clear distinction between economic enterprise activities and gender equality responsibilities. It must have a serious mandate with targets and resources. DG Enterprise currently has 1 out of 900 staff solely dedicated to female entrepreneurship in Europe! |
| --- | --- |

5.1.3.1

Create an office of Women's Business Ownership within the European Commission and Member States’ competent ministries. It should preferably not be situated in the gender ministries to provide a clear distinction between economic enterprise activities and gender equality responsibilities. It must have a serious mandate with targets and resources. DG Enterprise currently has 1 out of 900 staff solely dedicated to female entrepreneurship in Europe!

| 5.1.3.2 | Appoint a Women’s Enterprise Director/Envoy, or High Level Representative within the European Commission and Member States’ enterprise ministries, but with a cross-departmental role for raising awareness about the economic benefits of encouraging more women to start and grow businesses. These offices should be time bound (4-10 years depending on economy and funding structure) and should have a very clear remit with specific objectives and accountability. The Women’s Enterprise Director/Envoy or High Level Representative could also have responsibility for promoting the industry and academic tracks which lead to increased female entrepreneurship such as research, science, high-tech, direct selling and online/IT development. |
| --- | --- |

5.1.3.2

Appoint a Women’s Enterprise Director/Envoy, or High Level Representative within the European Commission and Member States’ enterprise ministries, but with a cross-departmental role for raising awareness about the economic benefits of encouraging more women to start and grow businesses. These offices should be time bound (4-10 years depending on economy and funding structure) and should have a very clear remit with specific objectives and accountability. The Women’s Enterprise Director/Envoy or High Level Representative could also have responsibility for promoting the industry and academic tracks which lead to increased female entrepreneurship such as research, science, high-tech, direct selling and online/IT development.

| 5.1.3.3 | Collect essential data that allows for the measurement and quantification of the allocation of resources for female entrepreneurs - a key reason why women face discrimination in business, especially in the start-up phases. Support the production of annual policy and research updates on women’s enterprise across European regions. Increase the collection of and access to gender-disaggregated data across government departments and agencies. It is essential that DG Enterprise and Economic Development Ministries across Member States conduct a Gender Impact Assessment by collecting relevant data which includes the number of female entrepreneurs, the number of women-owned businesses, the number of employees in these businesses, the allocation of resources to these businesses and entrepreneurs. It is important to recognise that countries such as Australia, Canada and the US have successfully increased levels of female entrepreneurship through the collection and analysis of such data. |
| --- | --- |

5.1.3.3

Collect essential data that allows for the measurement and quantification of the allocation of resources for female entrepreneurs - a key reason why women face discrimination in business, especially in the start-up phases. Support the production of annual policy and research updates on women’s enterprise across European regions. Increase the collection of and access to gender-disaggregated data across government departments and agencies. It is essential that DG Enterprise and Economic Development Ministries across Member States conduct a Gender Impact Assessment by collecting relevant data which includes the number of female entrepreneurs, the number of women-owned businesses, the number of employees in these businesses, the allocation of resources to these businesses and entrepreneurs. It is important to recognise that countries such as Australia, Canada and the US have successfully increased levels of female entrepreneurship through the collection and analysis of such data.

| 5.1.3.4 | Enforce current legislation in areas of gender equality. Recent figures show female unemployment at its highest level in 23 years across Europe. There is also a record level of young people, including many female graduates, who are not economically active. The gender pay gap exists and there is a lack of female representation in the decision-making process across Europe. It is essential that the EU and Member States fulfil their obligation of gender duty in disaggregating information by gender, particularly in data collection and in the allocation of resources. |
| --- | --- |

5.1.3.4

Enforce current legislation in areas of gender equality. Recent figures show female unemployment at its highest level in 23 years across Europe. There is also a record level of young people, including many female graduates, who are not economically active. The gender pay gap exists and there is a lack of female representation in the decision-making process across Europe. It is essential that the EU and Member States fulfil their obligation of gender duty in disaggregating information by gender, particularly in data collection and in the allocation of resources.

5.2   Civil society interventions

5.2.1   It is proposed:

| 5.2.1.1 | That as all activities relating to the promotion of female entrepreneurship and women owned businesses are of societal and economic benefit to all, men must be encouraged to be part of this debate and recognise the added value of promoting women's activity as entrepreneurs. The relevant communications, networks and training should include both genders and social protection should also ensure that equal treatment is given to all in society. |
| --- | --- |

5.2.1.1

That as all activities relating to the promotion of female entrepreneurship and women owned businesses are of societal and economic benefit to all, men must be encouraged to be part of this debate and recognise the added value of promoting women's activity as entrepreneurs. The relevant communications, networks and training should include both genders and social protection should also ensure that equal treatment is given to all in society.

| 5.2.1.2 | To ensure the accessibility of entrepreneurship to all by making sure that education at all levels removes gender stereotyping of entrepreneurs and by managing the language and terms used to describe entrepreneurs. At the same time, to ensure that support currently offered to entrepreneurs by universities and further education is attractive and useful to young women, closing the gap between the numbers of young men and young women starting businesses. |
| --- | --- |

5.2.1.2

To ensure the accessibility of entrepreneurship to all by making sure that education at all levels removes gender stereotyping of entrepreneurs and by managing the language and terms used to describe entrepreneurs. At the same time, to ensure that support currently offered to entrepreneurs by universities and further education is attractive and useful to young women, closing the gap between the numbers of young men and young women starting businesses.

| 5.2.1.3 | To promote traditional and non-traditional career paths for women of all ages in a gender neutral manner. Europe has many highly qualified women with degrees, many currently unemployed as a result of the crisis, who may not have considered owning their own business as an option. |
| --- | --- |

5.2.1.3

To promote traditional and non-traditional career paths for women of all ages in a gender neutral manner. Europe has many highly qualified women with degrees, many currently unemployed as a result of the crisis, who may not have considered owning their own business as an option.

| 5.2.1.4 | To create dedicated women’s business centres offering essential business information, networks, knowledge sharing, training and mentoring. These are absent in some EU countries and often under-resourced within business associations and chambers of commerce across the EU. However, these centres where dedicated resources are applied can be highly effective in promoting female entrepreneurship. Many examples of best practice can be found in Germany. |
| --- | --- |

5.2.1.4

To create dedicated women’s business centres offering essential business information, networks, knowledge sharing, training and mentoring. These are absent in some EU countries and often under-resourced within business associations and chambers of commerce across the EU. However, these centres where dedicated resources are applied can be highly effective in promoting female entrepreneurship. Many examples of best practice can be found in Germany.

| 5.2.1.5 | To ensure support and access to information, funds and resources in research, science and technology for women who may wish to start their own company or develop their research or innovations. |
| --- | --- |

5.2.1.5

To ensure support and access to information, funds and resources in research, science and technology for women who may wish to start their own company or develop their research or innovations.

| 5.2.1.6 | That financial institutions review the disclosure of information on lending in relation to gender. There is research that shows that lending to women is low and often at much higher interest rates than for men (15). |
| --- | --- |

5.2.1.6

That financial institutions review the disclosure of information on lending in relation to gender. There is research that shows that lending to women is low and often at much higher interest rates than for men (15).

| 5.2.1.7 | To review of social security provision for all entrepreneurs but particularly the practical aspects of provision for female entrepreneurs during pregnancy and as mothers and carers. The Commission Action Plan: The European Agenda for Entrepreneurship (16) draws attention to the need for better social security schemes, but does not go far enough in delivering relevant proposals. |
| --- | --- |

5.2.1.7

To review of social security provision for all entrepreneurs but particularly the practical aspects of provision for female entrepreneurs during pregnancy and as mothers and carers. The Commission Action Plan: The European Agenda for Entrepreneurship (16) draws attention to the need for better social security schemes, but does not go far enough in delivering relevant proposals.

| 5.2.1.8 | To develop and implement an EU-wide public broadcasting compact, to encourage public broadcasters from Member States to commit to setting targets on gender balanced media coverage in relation to entrepreneurship – Taking women off the "female pages" and putting them on the business pages! Research indicates that media coverage can significantly and positively influence perceptions and attitudes towards female entrepreneurs. Increased media coverage of successful female entrepreneurs as role models would have a measurable impact on societal attitudes towards female entrepreneurship. |
| --- | --- |

5.2.1.8

To develop and implement an EU-wide public broadcasting compact, to encourage public broadcasters from Member States to commit to setting targets on gender balanced media coverage in relation to entrepreneurship – Taking women off the "female pages" and putting them on the business pages! Research indicates that media coverage can significantly and positively influence perceptions and attitudes towards female entrepreneurs. Increased media coverage of successful female entrepreneurs as role models would have a measurable impact on societal attitudes towards female entrepreneurship.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  1988: Women’s Business Ownership Act (HR5050) http://www.nwbc.gov/sites/default/files/nwbc05.pdf.

1

(2)  (2010/2275(INI)).

2

(3)  EESC Opinion on Employability and entrepreneurship – role of civil society and local and regional bodies from a gender perspective (OJ C 256 of 27.10.2007, p. 114).

3

(4)  Programme for the Competitiveness of enterprises and SMEs (COSME) 2014-2020.

4

(5)  COM(2011) 702 final.

5

(6)  See: http://ec.europa.eu/enterprise/policies/sme/promoting-entrepreneurship/women/portal/.

6

(7)  EESC Opinion on Promotion of Women's Entrepreneurship in the EUROMED Region (OJ C 256 of 27.10.2007).

7

(8)  See: www.wescotland.co.uk/wepg.

8

(9)  http://womeninbusiness.about.com/od/wibtrendsandstatistics/a/statswibindustr.htm.

9

(10)  http://www.bis.gov.uk/assets/biscore/enterprise/docs/b/11-1078-bis-small-business-survey-2010-women-led-businesses-boost.pdf.

10

(11)  http://www.enterprising-women.org/static/ew_growthreport.pdf.

11

(12)  http://freedownload.is/doc/overview-of-the-gender-equality-duty-11622854.html.

12

(13)  http://www.oecd.org/document/0,3746,fr_21571361_44315115_50401407_1_1_1_1,00.html.

13

(14)  (2010/2275(INI)).

14

(15)  See for instance "Women and banks - Are female customers facing discrimination?", IPPR report, November 2011, in: http://www.wireuk.org/uploads/files/women-banks_Nov2011_8186.pdf; "Women’s business ownership: a review of the academic, popular and internet literature", in: http://www.bis.gov.uk/files/file38362.pdf.

15

(16)  COM(2004) 70 final.

16

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/29 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/29

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Opinion of the European Economic and Social Committee on ‘The role of women as drivers of a development and innovation model in agriculture and rural areas’ (own-initiative opinion)

2012/C 299/06

Rapporteur: Ms Daniela RONDINELLI

On 19 January 2012 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

The role of women as drivers of a development and innovation model in agriculture and rural areas.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 204 votes to 5 with 3 abstentions.

1.   Conclusions and recommendations

| 1.1 | The potential of women working and/or with a business in agricultural and rural areas should be analysed, recorded and promoted in all EU policies, and not penalised by some of them: this will lay the groundwork for women to become drivers of development and innovation, helping the entire sector to emerge from the crisis. |
| --- | --- |

1.1

The potential of women working and/or with a business in agricultural and rural areas should be analysed, recorded and promoted in all EU policies, and not penalised by some of them: this will lay the groundwork for women to become drivers of development and innovation, helping the entire sector to emerge from the crisis.

| 1.2 | All EU legislation and programmes should ensure equal treatment, equal opportunities and measures to promote conditions for women through effective gender mainstreaming, simplifying procedures for accessing funds and periodically monitoring results. |
| --- | --- |

1.2

All EU legislation and programmes should ensure equal treatment, equal opportunities and measures to promote conditions for women through effective gender mainstreaming, simplifying procedures for accessing funds and periodically monitoring results.

| 1.3 | Women should be involved in plans for the sector's development at local and regional level; they therefore need to be equipped with the skills to participate and to put across their needs, experiences and plans (capacity building). |
| --- | --- |

1.3

Women should be involved in plans for the sector's development at local and regional level; they therefore need to be equipped with the skills to participate and to put across their needs, experiences and plans (capacity building).

| 1.4 | Universities and research centres should collaborate with the women concerned in order to analyse potential and needs, provide training and technology to support the development of businesses run by women, and enhance women's work and life in the agricultural sector. |
| --- | --- |

1.4

Universities and research centres should collaborate with the women concerned in order to analyse potential and needs, provide training and technology to support the development of businesses run by women, and enhance women's work and life in the agricultural sector.

| 1.5 | ICT (1) are essential for developing and improving women's agricultural activities, provided that they are effective, accessible and cheap (broadband) and have a good level of regional coverage. This can also create work for ICT technicians. |
| --- | --- |

1.5

ICT (1) are essential for developing and improving women's agricultural activities, provided that they are effective, accessible and cheap (broadband) and have a good level of regional coverage. This can also create work for ICT technicians.

| 1.6 | The establishment of women's networks (underpinned by good ICT) develops contacts, promotes participation and fosters personal relationships and the exchange of good practice between women in the EU and women in candidate and third countries, thus also furthering international cooperation and trade. |
| --- | --- |

1.6

The establishment of women's networks (underpinned by good ICT) develops contacts, promotes participation and fosters personal relationships and the exchange of good practice between women in the EU and women in candidate and third countries, thus also furthering international cooperation and trade.

| 1.7 | Training should target the needs and potential of the women concerned; the women themselves can be responsible for disseminating information using innovative methods (discussion and self-teaching groups, newspaper columns, training sessions in educational establishments, etc.). |
| --- | --- |

1.7

Training should target the needs and potential of the women concerned; the women themselves can be responsible for disseminating information using innovative methods (discussion and self-teaching groups, newspaper columns, training sessions in educational establishments, etc.).

| 1.8 | To enable women to get organised and participate, thereby developing their potential, efficient, accessible and flexible services are needed which will free up their time from care duties. This applies to healthcare, transport, credit, distribution, marketing and care of the elderly and children, as well as social security to provide safeguards for women who do not have any. Here again, jobs will be created in the services concerned. |
| --- | --- |

1.8

To enable women to get organised and participate, thereby developing their potential, efficient, accessible and flexible services are needed which will free up their time from care duties. This applies to healthcare, transport, credit, distribution, marketing and care of the elderly and children, as well as social security to provide safeguards for women who do not have any. Here again, jobs will be created in the services concerned.

| 1.9 | All Member States should promote legal recognition of assisting spouses so that they are covered for social security and healthcare. A legislative framework for joint rights of access should be established at EU level, possibly by means of a statute for women in agricultural and rural areas. |
| --- | --- |

1.9

All Member States should promote legal recognition of assisting spouses so that they are covered for social security and healthcare. A legislative framework for joint rights of access should be established at EU level, possibly by means of a statute for women in agricultural and rural areas.

| 1.10 | Women can help to make farming and their environment more sustainable if they are equipped with the necessary knowledge and technology (green technology, efficient management and use of resources, generation of clean energy). In order to kick-start this type of innovative and sustainable business, a fast-track scheme should be set up, granting streamlined access to resources (especially under the second pillar of the CAP). |
| --- | --- |

1.10

Women can help to make farming and their environment more sustainable if they are equipped with the necessary knowledge and technology (green technology, efficient management and use of resources, generation of clean energy). In order to kick-start this type of innovative and sustainable business, a fast-track scheme should be set up, granting streamlined access to resources (especially under the second pillar of the CAP).

| 1.11 | Women can reinvigorate the crafts sector and traditional, high-quality, organic products, partly through closer collaboration between women producers and consumers, which needs to be studied and developed (as in the case of short supply chains). |
| --- | --- |

1.11

Women can reinvigorate the crafts sector and traditional, high-quality, organic products, partly through closer collaboration between women producers and consumers, which needs to be studied and developed (as in the case of short supply chains).

| 1.12 | The reform of the CAP and rural development policies must pull together to promote women's work and businesses, particularly by means of theme-based programmes for women (second pillar). |
| --- | --- |

1.12

The reform of the CAP and rural development policies must pull together to promote women's work and businesses, particularly by means of theme-based programmes for women (second pillar).

| 1.13 | Member States, regional and local authorities and the social partners have a shared responsibility to promote the potential of women living in agricultural and rural areas by ensuring that laws are respected and implementing an appropriate legal framework that guarantees the principle of gender equality and representation, including within their own institutions. Positive examples in some Member States should serve as an incentive to ensuring that women – as also called for by the European Parliament – are appropriately represented in all political, economic and social bodies in the agricultural sector and rural areas. |
| --- | --- |

1.13

Member States, regional and local authorities and the social partners have a shared responsibility to promote the potential of women living in agricultural and rural areas by ensuring that laws are respected and implementing an appropriate legal framework that guarantees the principle of gender equality and representation, including within their own institutions. Positive examples in some Member States should serve as an incentive to ensuring that women – as also called for by the European Parliament – are appropriately represented in all political, economic and social bodies in the agricultural sector and rural areas.

2.   Potential which needs to be unlocked

| 2.1 | Women's potential in agriculture and rural areas is underrated; the 2010 CAP report (2) refers to women only through Eurostat statistics, while the 2010 report on rural development refers in passing to the gap in labour market participation (76 % men, 62 % women (3). Even the interesting Council Decision of 20 February 2006 on Community strategic guidelines for rural development
   (4) refers to women only in relation to the need to facilitate their access to employment. |
| --- | --- |

2.1

Women's potential in agriculture and rural areas is underrated; the 2010 CAP report (2) refers to women only through Eurostat statistics, while the 2010 report on rural development refers in passing to the gap in labour market participation (76 % men, 62 % women (3). Even the interesting Council Decision of 20 February 2006 on Community strategic guidelines for rural development
   (4) refers to women only in relation to the need to facilitate their access to employment.

| 2.2 | On the other hand, the European Parliament, with its 2011 resolution on The role of women in agriculture and rural areas
   (5) gives an accurate list of the main issues facing women and proposes a number of strategic avenues to support them in their social and economic lives. The Committee endorses the EP's analysis and agrees with its conclusions, and would also draw attention to a series of opinions of its own (6). |
| --- | --- |

2.2

On the other hand, the European Parliament, with its 2011 resolution on The role of women in agriculture and rural areas
   (5) gives an accurate list of the main issues facing women and proposes a number of strategic avenues to support them in their social and economic lives. The Committee endorses the EP's analysis and agrees with its conclusions, and would also draw attention to a series of opinions of its own (6).

| 2.3 | The Committee welcomes the Commission's proposal for a regulation setting out common provisions for the Structural Funds and the accompanying Commission staff working documents (7), as well as the Communication on the European partnership on innovation in agriculture (8). These documents include interesting points which give reason to hope that the institutions will pay closer attention to gender issues. The Committee hopes that they will be followed by appropriate Council decisions. |
| --- | --- |

2.3

The Committee welcomes the Commission's proposal for a regulation setting out common provisions for the Structural Funds and the accompanying Commission staff working documents (7), as well as the Communication on the European partnership on innovation in agriculture (8). These documents include interesting points which give reason to hope that the institutions will pay closer attention to gender issues. The Committee hopes that they will be followed by appropriate Council decisions.

| 2.4 | The EESC pays tribute to the activities of rural women's organisations and similar networks in a number of Member States, which may be independent or integrated into farmers' associations. There are also some rural youth organisations that work very actively to promote gender equality. As a result, many women gain qualifications and are motivated to engage in other entrepreneurial, social, professional and political activities. They also have a large stake in the progress that has been achieved so far, such as in social security for farmer families. In some farmers' associations, which have traditionally been dominated by men, today women play a very influential role (9). Cases like this should serve as an example in all Member States. |
| --- | --- |

2.4

The EESC pays tribute to the activities of rural women's organisations and similar networks in a number of Member States, which may be independent or integrated into farmers' associations. There are also some rural youth organisations that work very actively to promote gender equality. As a result, many women gain qualifications and are motivated to engage in other entrepreneurial, social, professional and political activities. They also have a large stake in the progress that has been achieved so far, such as in social security for farmer families. In some farmers' associations, which have traditionally been dominated by men, today women play a very influential role (9). Cases like this should serve as an example in all Member States.

| 2.5 | In parallel with the abovementioned texts, the present opinion aims to identify criteria and measures which can help women to unlock their potential as workers and entrepreneurs and drive innovation for sustainable development and good quality jobs. A clearer identification of the potential and needs of women in the workforce and in agricultural and rural entrepreneurship could raise and upgrade production, help to develop a strategic perspective, nurture diversification and make the CAP more consistent with rural development and territorial cohesion policies. |
| --- | --- |

2.5

In parallel with the abovementioned texts, the present opinion aims to identify criteria and measures which can help women to unlock their potential as workers and entrepreneurs and drive innovation for sustainable development and good quality jobs. A clearer identification of the potential and needs of women in the workforce and in agricultural and rural entrepreneurship could raise and upgrade production, help to develop a strategic perspective, nurture diversification and make the CAP more consistent with rural development and territorial cohesion policies.

3.   Data and points of reference

| 3.1 | The successive CAP reforms have blurred the concepts of farming economies, rural economies and land management/development. This has created a larger field of study (10) in which to analyse the problems faced by women; it has also increased the need for accurate, disaggregated and qualitative data, building on the work already done by Eurostat. The EP's 2011 resolution states that there are 26,7 million people working regularly in agriculture, 42 % of whom (11,2 million) are women, including all agricultural and rural activities in which people are employed in any capacity (although this form of employment is often neither their sole nor their main job). Eurostat, meanwhile, measures agricultural employment on the basis of Annual Work Units (AWU), which brings the total number of men and women working in any capacity in the sector down to 11,1 million in 2010 (for agricultural, forestry, hunting and fishing activities); the total number of women employed would thus be around 4,7 million (11). |
| --- | --- |

3.1

The successive CAP reforms have blurred the concepts of farming economies, rural economies and land management/development. This has created a larger field of study (10) in which to analyse the problems faced by women; it has also increased the need for accurate, disaggregated and qualitative data, building on the work already done by Eurostat. The EP's 2011 resolution states that there are 26,7 million people working regularly in agriculture, 42 % of whom (11,2 million) are women, including all agricultural and rural activities in which people are employed in any capacity (although this form of employment is often neither their sole nor their main job). Eurostat, meanwhile, measures agricultural employment on the basis of Annual Work Units (AWU), which brings the total number of men and women working in any capacity in the sector down to 11,1 million in 2010 (for agricultural, forestry, hunting and fishing activities); the total number of women employed would thus be around 4,7 million (11).

| 3.2 | This reference to statistical methods shows that the problem is important not because of the numbers involved, but because of the strategic nature of the agricultural and rural sector as it interacts with urban and peri-urban environments and their sustainable environmental and social development. The opinion will therefore consider the situation of women in agriculture and rural areas in the light of two aspects: the high level of production standards in European farming, and women's potential which can be tapped using limited, but effectively targeted resources. It will also be borne in mind that we are still in the grip of an acute crisis which is hurting – but also creating opportunities for – women living and working in agricultural and rural areas. |
| --- | --- |

3.2

This reference to statistical methods shows that the problem is important not because of the numbers involved, but because of the strategic nature of the agricultural and rural sector as it interacts with urban and peri-urban environments and their sustainable environmental and social development. The opinion will therefore consider the situation of women in agriculture and rural areas in the light of two aspects: the high level of production standards in European farming, and women's potential which can be tapped using limited, but effectively targeted resources. It will also be borne in mind that we are still in the grip of an acute crisis which is hurting – but also creating opportunities for – women living and working in agricultural and rural areas.

4.   The agricultural and rural economy and the effects of the crisis

| 4.1 | Recent data on the agricultural and rural situation show that, after a drop in production and employment triggered by the slow-down in consumption and exports, the sector is growing again, with a consequent increase in revenue. The internal market in particular has displayed a certain preference for quality and sustainability: for example, local produce ("zero food miles" or short supply chain (12) and/or organic produce is increasingly popular among consumers. |
| --- | --- |

4.1

Recent data on the agricultural and rural situation show that, after a drop in production and employment triggered by the slow-down in consumption and exports, the sector is growing again, with a consequent increase in revenue. The internal market in particular has displayed a certain preference for quality and sustainability: for example, local produce ("zero food miles" or short supply chain (12) and/or organic produce is increasingly popular among consumers.

| 4.2 | As regards employment, between 2007 and 2008 around 900 000 jobs were lost in the agricultural sector, while between 2008 and 2009, the net loss was 200 000 AWU (13). The downward trend in employment could thus settle at a level which reflects a natural drop in the number of workers owing to farm rationalisation, with fewer unskilled workers and more highly skilled workers. |
| --- | --- |

4.2

As regards employment, between 2007 and 2008 around 900 000 jobs were lost in the agricultural sector, while between 2008 and 2009, the net loss was 200 000 AWU (13). The downward trend in employment could thus settle at a level which reflects a natural drop in the number of workers owing to farm rationalisation, with fewer unskilled workers and more highly skilled workers.

| 4.3 | Despite these reasons for optimism, the crisis is certainly not over nor have conditions for women improved. The female workforce, which already labours under serious disadvantages in both full-time (26 % of women against 52 % of men) and part-time employment (9,7 % of men against 11,8 % of women) (14), is still employed informally in the bulk of agricultural production. Furthermore, in addition to these data, seasonal work (which accounts for a huge proportion of workers, with fewer permanent employees) and informal and illegal work are still a widespread and invisible or problematic and unquantified issue, which should be tackled by encouraging a switch from undeclared work to legal forms of employment and, as far as possible, by stabilising women's work. |
| --- | --- |

4.3

Despite these reasons for optimism, the crisis is certainly not over nor have conditions for women improved. The female workforce, which already labours under serious disadvantages in both full-time (26 % of women against 52 % of men) and part-time employment (9,7 % of men against 11,8 % of women) (14), is still employed informally in the bulk of agricultural production. Furthermore, in addition to these data, seasonal work (which accounts for a huge proportion of workers, with fewer permanent employees) and informal and illegal work are still a widespread and invisible or problematic and unquantified issue, which should be tackled by encouraging a switch from undeclared work to legal forms of employment and, as far as possible, by stabilising women's work.

| 4.3.1 | The position of immigrant women (from inside and outside the EU) is very worrying; they are often denied the most basic rights, beginning with being paid late or with unjustified and unjustifiable reductions. This situation has deteriorated since the beginning of the crisis and cannot be justified by the difficulties encountered by small farms and processing businesses in accessing credit. There have thus been many cases of female workers who have had to return to their home country without being paid, or who have found themselves at the mercy of exploiters, criminals and labour traffickers who unfortunately cannot yet be prosecuted in some EU countries. |
| --- | --- |

4.3.1

The position of immigrant women (from inside and outside the EU) is very worrying; they are often denied the most basic rights, beginning with being paid late or with unjustified and unjustifiable reductions. This situation has deteriorated since the beginning of the crisis and cannot be justified by the difficulties encountered by small farms and processing businesses in accessing credit. There have thus been many cases of female workers who have had to return to their home country without being paid, or who have found themselves at the mercy of exploiters, criminals and labour traffickers who unfortunately cannot yet be prosecuted in some EU countries.

| 4.3.2 | As farms are scattered across a wide area and many of them are small, it can be difficult to check on employment conditions. However, careful management by local administrations, together with the social partners and civil society organisations, can be a springboard for combating anomalies and crime, guaranteeing rights and secure conditions for all. |
| --- | --- |

4.3.2

As farms are scattered across a wide area and many of them are small, it can be difficult to check on employment conditions. However, careful management by local administrations, together with the social partners and civil society organisations, can be a springboard for combating anomalies and crime, guaranteeing rights and secure conditions for all.

5.   To improve women's living and working conditions in agricultural and rural areas ...

| 5.1 | The quality side of agricultural production is an important aspect of women's work, whether they are producers, assisting spouses, consumers or passers-on of authentic traditions, practices and creativity. In order to build on this situation, choices need to be made at local level. |
| --- | --- |

5.1

The quality side of agricultural production is an important aspect of women's work, whether they are producers, assisting spouses, consumers or passers-on of authentic traditions, practices and creativity. In order to build on this situation, choices need to be made at local level.

| 5.2 | The development and application of advanced production techniques, research, vocational guidance and training must involve research centres and universities interacting with agricultural and rural areas; this means including the needs of women and an analysis of their potential in their studies. |
| --- | --- |

5.2

The development and application of advanced production techniques, research, vocational guidance and training must involve research centres and universities interacting with agricultural and rural areas; this means including the needs of women and an analysis of their potential in their studies.

| 5.3 | It is often thought that any problem involving improving quality and boosting competitiveness can be solved by means of some form of training. This may simply lead to more training programmes, rather than good-quality, targeted programmes, which often fail to respond suitably either to the specific needs of the economy and the stakeholders concerned or to jointly agreed sustainable development strategies. If it is to grow, the agricultural and rural sector needs properly equipped female workers and entrepreneurs, but training alone will not immediately upgrade work, business and life if the requisite structures and services are not in place and if sustainable, high-quality jobs are not created. |
| --- | --- |

5.3

It is often thought that any problem involving improving quality and boosting competitiveness can be solved by means of some form of training. This may simply lead to more training programmes, rather than good-quality, targeted programmes, which often fail to respond suitably either to the specific needs of the economy and the stakeholders concerned or to jointly agreed sustainable development strategies. If it is to grow, the agricultural and rural sector needs properly equipped female workers and entrepreneurs, but training alone will not immediately upgrade work, business and life if the requisite structures and services are not in place and if sustainable, high-quality jobs are not created.

6.   ... analyse needs and potential at grassroots level

| 6.1 | Any form of training, provision of services or rationalisation must be rooted in an analysis of the conditions and resources of the women who live and work in agricultural and rural areas. This will entail careful analysis of the region and the potential and expectations of the people living there, which will require the active participation of the women concerned. Participation is a process in which national, local and regional authorities and socio-occupational organisations all take their share of responsibility. The overall potential of a region can be increased by unlocking the potential of the women living there. Targeted and effective programmes to develop innovation, entrepreneurship and employment among women can create jobs (especially for young people), curbing and sometimes even reversing the rural exodus. |
| --- | --- |

6.1

Any form of training, provision of services or rationalisation must be rooted in an analysis of the conditions and resources of the women who live and work in agricultural and rural areas. This will entail careful analysis of the region and the potential and expectations of the people living there, which will require the active participation of the women concerned. Participation is a process in which national, local and regional authorities and socio-occupational organisations all take their share of responsibility. The overall potential of a region can be increased by unlocking the potential of the women living there. Targeted and effective programmes to develop innovation, entrepreneurship and employment among women can create jobs (especially for young people), curbing and sometimes even reversing the rural exodus.

| 6.1.1 | Universities and the region itself need to collaborate in analysing this potential: research centres should be involved in planning and assessing development plans. This means that effective links, using advanced and accessible ICT, need to be guaranteed between universities and the women involved, in order to conduct and test detailed research at grassroots level (15). |
| --- | --- |

6.1.1

Universities and the region itself need to collaborate in analysing this potential: research centres should be involved in planning and assessing development plans. This means that effective links, using advanced and accessible ICT, need to be guaranteed between universities and the women involved, in order to conduct and test detailed research at grassroots level (15).

| 6.1.2 | Regional development plans should include specific training schemes for female workers, assisting spouses and female entrepreneurs, building on their ability to adapt, innovate, and pass on knowledge and good practices. Women who have undergone training should be encouraged to pass the knowledge gained on to other women through formal mechanisms (cooperatives, bodies involved in local-authority decisions, rural development action groups, etc.) and informal mechanisms (discussion and self-tuition groups, training sessions in educational establishments, radio and TV programmes, newspaper columns, social enterprises, etc). Incentives here will involve freeing up women's time by providing assistance and good local services (paid leave, childcare facilities, efficient and free transport (16), supplying stand-ins for any care duties, farm crèches, etc.), as well as financial incentives. |
| --- | --- |

6.1.2

Regional development plans should include specific training schemes for female workers, assisting spouses and female entrepreneurs, building on their ability to adapt, innovate, and pass on knowledge and good practices. Women who have undergone training should be encouraged to pass the knowledge gained on to other women through formal mechanisms (cooperatives, bodies involved in local-authority decisions, rural development action groups, etc.) and informal mechanisms (discussion and self-tuition groups, training sessions in educational establishments, radio and TV programmes, newspaper columns, social enterprises, etc). Incentives here will involve freeing up women's time by providing assistance and good local services (paid leave, childcare facilities, efficient and free transport (16), supplying stand-ins for any care duties, farm crèches, etc.), as well as financial incentives.

| 6.2 | Efficient, high-speed (broadband) and cheap internet coverage is a prerequisite, given that in some Member States less than 60 % of households have an internet connection. More widespread use of ICT can also help with home study and communication between geographically distant areas and encourages communication with women in agricultural and rural sectors in other countries, fostering interest in studying languages and experience-swapping. |
| --- | --- |

6.2

Efficient, high-speed (broadband) and cheap internet coverage is a prerequisite, given that in some Member States less than 60 % of households have an internet connection. More widespread use of ICT can also help with home study and communication between geographically distant areas and encourages communication with women in agricultural and rural sectors in other countries, fostering interest in studying languages and experience-swapping.

| 6.2.1 | ICT also provide the means to establish networks of women entrepreneurs, assisting spouses and women workers who, spurred by the presence of migrants from outside the EU, also communicate and collaborate with women from candidate and third countries. This can result in a fruitful exchange of experience, improved development cooperation and greater trade integration, as well as helping solve the global food challenge. |
| --- | --- |

6.2.1

ICT also provide the means to establish networks of women entrepreneurs, assisting spouses and women workers who, spurred by the presence of migrants from outside the EU, also communicate and collaborate with women from candidate and third countries. This can result in a fruitful exchange of experience, improved development cooperation and greater trade integration, as well as helping solve the global food challenge.

| 6.3 | Women's health in agricultural and rural areas is a priority. Effective healthcare services (including medical advice and diagnosis given remotely) and high-quality medical equipment must monitor health and safety and occupational diseases in the workplace; this can also create jobs for specialised staff. These services (particularly reproductive healthcare and gynaecological check-ups) should be provided free of charge; at any rate, the fees should always be in line with the woman's income and family situation. A key aspect is the presence of many older women: life expectancy in some of the more rural countries is much longer for women than for men, and so women predominate in the over-60s category (17). Medical, assistance and support services are essential for this category of women, partly so that younger women do not have to take on additional family burdens. |
| --- | --- |

6.3

Women's health in agricultural and rural areas is a priority. Effective healthcare services (including medical advice and diagnosis given remotely) and high-quality medical equipment must monitor health and safety and occupational diseases in the workplace; this can also create jobs for specialised staff. These services (particularly reproductive healthcare and gynaecological check-ups) should be provided free of charge; at any rate, the fees should always be in line with the woman's income and family situation. A key aspect is the presence of many older women: life expectancy in some of the more rural countries is much longer for women than for men, and so women predominate in the over-60s category (17). Medical, assistance and support services are essential for this category of women, partly so that younger women do not have to take on additional family burdens.

| 6.4 | Assisting spouses in the agriculture sector continue to be treated very differently from one country to the next. They are not formally recognised as workers (despite the fact that they work very hard in this sector) and in some Member States still have no access to any form of healthcare or pension provision (except for universal coverage where provided by social security). Mechanisms need to be set up to ensure coverage for these women, for example through specific pension funds promoted by the social partners or the local and regional authorities. Rules for joint rights of access should be established, possibly by means of a European statute for women in agricultural and rural areas. |
| --- | --- |

6.4

Assisting spouses in the agriculture sector continue to be treated very differently from one country to the next. They are not formally recognised as workers (despite the fact that they work very hard in this sector) and in some Member States still have no access to any form of healthcare or pension provision (except for universal coverage where provided by social security). Mechanisms need to be set up to ensure coverage for these women, for example through specific pension funds promoted by the social partners or the local and regional authorities. Rules for joint rights of access should be established, possibly by means of a European statute for women in agricultural and rural areas.

| 6.5 | Women are key players in the rational use of energy and waste disposal as they manage the family economy. Sorting waste for recycling and proper facilities for composting and processing (biomass) can go hand in hand with energy saving targets and virtuous cycles of agricultural and organic production which is self-sufficient in terms of energy. Access to new green production technologies and the efficient use of resources should be facilitated, with specific incentives offered to farms and businesses run by women. |
| --- | --- |

6.5

Women are key players in the rational use of energy and waste disposal as they manage the family economy. Sorting waste for recycling and proper facilities for composting and processing (biomass) can go hand in hand with energy saving targets and virtuous cycles of agricultural and organic production which is self-sufficient in terms of energy. Access to new green production technologies and the efficient use of resources should be facilitated, with specific incentives offered to farms and businesses run by women.

| 6.6 | In many countries, groups of women have launched worthwhile initiatives in agri-tourism, particularly involving cooperatives, and have managed them very successfully. In view of the growing interest in this type of tourism, a network of businesses in this sector should be formed and best practice shared. |
| --- | --- |

6.6

In many countries, groups of women have launched worthwhile initiatives in agri-tourism, particularly involving cooperatives, and have managed them very successfully. In view of the growing interest in this type of tourism, a network of businesses in this sector should be formed and best practice shared.

| 6.7 | In order to contribute to sustainable development and the activities undertaken by women (often on small plots), the distribution sector needs to perform well and be efficient and flexible: local distribution cooperatives with low overheads could foster the sale of more affordable, high-quality local products. One-off events promoting these products have also proven useful. |
| --- | --- |

6.7

In order to contribute to sustainable development and the activities undertaken by women (often on small plots), the distribution sector needs to perform well and be efficient and flexible: local distribution cooperatives with low overheads could foster the sale of more affordable, high-quality local products. One-off events promoting these products have also proven useful.

| 6.8 | It is important to promote local crafts which are being lost. Targeted information and marketing campaigns can help maintain or create businesses and jobs, stemming the rural exodus and the drop in quality brought about by large-scale imports. Effective interaction between suitable services, technologies and transport is therefore imperative in order to link up rural and agricultural areas with urban markets (18). |
| --- | --- |

6.8

It is important to promote local crafts which are being lost. Targeted information and marketing campaigns can help maintain or create businesses and jobs, stemming the rural exodus and the drop in quality brought about by large-scale imports. Effective interaction between suitable services, technologies and transport is therefore imperative in order to link up rural and agricultural areas with urban markets (18).

| 6.9 | Access to credit for setting up agricultural and crafts businesses and cooperatives needs to be improved, giving more responsibilities to traditional-style banks (especially agricultural credit unions and local savings banks) and promoting microcredit programmes aimed primarily at women. |
| --- | --- |

6.9

Access to credit for setting up agricultural and crafts businesses and cooperatives needs to be improved, giving more responsibilities to traditional-style banks (especially agricultural credit unions and local savings banks) and promoting microcredit programmes aimed primarily at women.

7.   EU policies and the role of civil society

| 7.1 | Pending the adoption of the proposed regulation setting out common provisions for the Structural Funds (19), it should be pointed out that the EAFRD Regulation stresses the need to use the fund's resources to promote equality between men and women and includes provisions for informing and involving bodies which pursue this goal (20). The new common regulation could be reinforced with the introduction of a fast-track scheme for women engaged in setting up innovative and sustainable agricultural, rural or crafts businesses. This would give civil society organisations involved in the partnership referred to in Article 6 of the regulation greater weight and increase their power of initiative. |
| --- | --- |

7.1

Pending the adoption of the proposed regulation setting out common provisions for the Structural Funds (19), it should be pointed out that the EAFRD Regulation stresses the need to use the fund's resources to promote equality between men and women and includes provisions for informing and involving bodies which pursue this goal (20). The new common regulation could be reinforced with the introduction of a fast-track scheme for women engaged in setting up innovative and sustainable agricultural, rural or crafts businesses. This would give civil society organisations involved in the partnership referred to in Article 6 of the regulation greater weight and increase their power of initiative.

| 7.2 | With regard to the proposed common regulation on the Funds, which has already been considered in an EESC opinion (21), the Committee reiterates that it is very concerned about the potential impact of macroeconomic conditionalities (Article 21) on projects involving initiatives geared towards women. The Committee calls for the inclusion of specific provisions to avoid harming, directly or indirectly, the most vulnerable members of society, including women. |
| --- | --- |

7.2

With regard to the proposed common regulation on the Funds, which has already been considered in an EESC opinion (21), the Committee reiterates that it is very concerned about the potential impact of macroeconomic conditionalities (Article 21) on projects involving initiatives geared towards women. The Committee calls for the inclusion of specific provisions to avoid harming, directly or indirectly, the most vulnerable members of society, including women.

| 7.3 | In addition to the abovementioned proposals, the Committee calls on the Commission to react more quickly to the changing conditions and requirements experienced by women, and above all to ensure that programmes promoting the role of women in agricultural and rural areas are not overly rigid in terms of content and approach. |
| --- | --- |

7.3

In addition to the abovementioned proposals, the Committee calls on the Commission to react more quickly to the changing conditions and requirements experienced by women, and above all to ensure that programmes promoting the role of women in agricultural and rural areas are not overly rigid in terms of content and approach.

| 7.4 | Stronger and improved participation by women in agricultural and rural development should be mainstreamed in European programmes for research and development, training (European Social Fund, etc.) and labour mobility, and of course in the implementation of economic, social and territorial cohesion policy. |
| --- | --- |

7.4

Stronger and improved participation by women in agricultural and rural development should be mainstreamed in European programmes for research and development, training (European Social Fund, etc.) and labour mobility, and of course in the implementation of economic, social and territorial cohesion policy.

| 7.5 | The provisions, programmes and projects implementing the second pillar should be monitored periodically as part of the CAP monitoring procedures to ensure that they are effective in pursuing equal opportunities and in the appropriate use of resources. |
| --- | --- |

7.5

The provisions, programmes and projects implementing the second pillar should be monitored periodically as part of the CAP monitoring procedures to ensure that they are effective in pursuing equal opportunities and in the appropriate use of resources.

| 7.6 | Rural development policies should include theme-based sub-programmes for women, and experience with the Leader initiative should be built on and circulated. |
| --- | --- |

7.6

Rural development policies should include theme-based sub-programmes for women, and experience with the Leader initiative should be built on and circulated.

| 7.7 | In order to develop programmes which make tapping women's potential a priority, the region (in the physical, administrative and sociological meaning of the term) must be the number one player in an interactive process. The social partners and civil society organisations must take a share of direct responsibility for making and enacting choices. In order to do this they also need to demonstrate that they are capable of representing women's needs practically and effectively and of integrating women into organisations at every level, with due focus on capacity building for women. |
| --- | --- |

7.7

In order to develop programmes which make tapping women's potential a priority, the region (in the physical, administrative and sociological meaning of the term) must be the number one player in an interactive process. The social partners and civil society organisations must take a share of direct responsibility for making and enacting choices. In order to do this they also need to demonstrate that they are capable of representing women's needs practically and effectively and of integrating women into organisations at every level, with due focus on capacity building for women.

| 7.7.1 | The Committee calls on all the organisations represented within it to focus keenly on women who work and live in agricultural and rural areas, passing on their needs and aspirations and systematically including them in the various horizontal and vertical partnership bodies. |
| --- | --- |

7.7.1

The Committee calls on all the organisations represented within it to focus keenly on women who work and live in agricultural and rural areas, passing on their needs and aspirations and systematically including them in the various horizontal and vertical partnership bodies.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Information and Communication Technologies.

1

(2)  Agriculture in the EU - Statistical and Economic Information - Report 2010, March 2011.

2

(3)  Page 146, table 3.5.1.4. of the report.

3

(4)  Decision No 2006/144/EC of 20 February 2006, programming period 2007 to 2013 – OJ L 55, 25.2.2006, p. 20.

4

(5)  P7_TA(2011)0122.

5

(6)  These include opinions CESE, OJ C 256, 27.1.2007, p. 144-149, CESE, OJ C 317, 23.12.2009, p. 49, CESE, OJ C 347, 18.12.2010, p. 41, CESE, OJ C 376, 22.12.2011, CESE, OJ C 143, 22.05.2012, p. 35-39, CESE, O.J C 191, 29.06.2012, p. 116-129.

6

(7)  COM(2011) 615 final/2 and staff working document 61 final, parts 1 and 2.

7

(8)  COM(2012) 79 final.

8

(9)  For example, the Federation of Swedish Farmers (LRF) is headed by a practising woman farmer.

9

(10)  92 % of the EU is considered to be rural and about 56 % of the population lives in rural areas, producing 45 % of the EU's added value (data given in the Council decision referred to in point 2.1).

10

(11)  The Commission is preparing a series of reports and studies on this point. The Committee hopes that they will include still more accurate qualitative and disaggregated data.

11

(12)  See the conference on Local agriculture and short food supply chains (Brussels, 20 April 2012).

12

(13)  Eurostat data.

13

(14)  CAP 2010 report, table 3.5.1.4. (http://ec.europa.eu/agriculture/agrista/2010/table_en/index.htm).

14

(15)  Many large agricultural and rural areas do not have universities or research facilities; it is interesting to note the decision to establish a university in Umeå (Sweden) in a rural, undeveloped area which was revitalised when the study and research centre became fully operational.

15

(16)  The Staff Working Document, part 2 (referred to in footnote 7), points out that women use public transport more than men.

16

(17)  In Lithuania, women live for an average of 11 years longer than men; in Latvia, for 10 years; in Poland, Romania and Slovakia, for 8 years; and in Bulgaria, the Czech Republic, Portugal, Slovenia and Spain, for 7 years.

17

(18)  CESE, OJ C 143, 22.05.2012, p. 35-39, examines the situation of crafts in rural areas.

18

(19)  COM(2011) 615 final/2.

19

(20)  See Council Regulation 1698/2005 of 20 September 2005 (OJ L 277, 21.10.2005, pp. 1–40), Articles 6(1)c); 62(1)b) and 76(2)a).

20

(21)  CESE, OJ C 191, 29.06.2012, p. 30-37, particularly point 3.3.3.

21

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/34 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/34

---

Opinion of the European Economic and Social Committee on ‘The EU's relations with Moldova: What role for organised civil society?’

2012/C 299/07

Rapporteur: Ms PICHENOT

At its plenary session held on 13 and 14 July 2011 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

The EU's relations with Moldova: What role for organised civil society?

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July 2012), the European Economic and Social Committee adopted the following opinion by 143 votes in favour, with 9 abstentions.

1.   Conclusions and recommendations

| 1.1 | Aware of the shared interest in closer relations between the European Union and the Republic of Moldova, the EESC has, in the present opinion, and following its mission in March 2012, opted to propose the following recommendations with the aim of:






  — | consolidating the role of civil society, in particular by setting up a Moldovan Economic, Social and Environmental Committee (MESEC), |
| --- | --- | --- |

1.1

Aware of the shared interest in closer relations between the European Union and the Republic of Moldova, the EESC has, in the present opinion, and following its mission in March 2012, opted to propose the following recommendations with the aim of:

—

consolidating the role of civil society, in particular by setting up a Moldovan Economic, Social and Environmental Committee (MESEC),

| — | successfully concluding a Deep and Comprehensive Free Trade Agreement (DCFTA), and |
| --- | --- |

—

successfully concluding a Deep and Comprehensive Free Trade Agreement (DCFTA), and

| — | restoring Moldova's territorial integrity. |
| --- | --- |

—

restoring Moldova's territorial integrity.

| 1.2 | In its recommendations to the Commission and to the European Parliament, the Committee firstly recommends that a balanced free trade agreement be reached, ensuring that civil society organisations are involved at every stage in the process. In order to bring about a DCFTA, the work of the Commission should be coordinated with that of the EEAS. The Committee advocates:






  — | ensuring effective participation by Moldovan bodies through access to the public consultation
   (1) currently under way, and in planned civil society public hearings and meetings as part of the sustainability impact assessment, |
| --- | --- | --- |

1.2

In its recommendations to the Commission and to the European Parliament, the Committee firstly recommends that a balanced free trade agreement be reached, ensuring that civil society organisations are involved at every stage in the process. In order to bring about a DCFTA, the work of the Commission should be coordinated with that of the EEAS. The Committee advocates:

—

ensuring effective participation by Moldovan bodies through access to the public consultation
   (1) currently under way, and in planned civil society public hearings and meetings as part of the sustainability impact assessment,

| — | holding a conference on the outcome of the impact assessment with the Moldovan Parliament, the EESC and Moldovan civil society, and keeping civil society regularly briefed on the content of the negotiations, |
| --- | --- |

—

holding a conference on the outcome of the impact assessment with the Moldovan Parliament, the EESC and Moldovan civil society, and keeping civil society regularly briefed on the content of the negotiations,

| — | focusing on identifying social and environmental impacts, on the basis in particular of the comments made in the Second Millennium Development Goals report (2) in order to fine-tune the sustainable development chapter of any future agreement, |
| --- | --- |

—

focusing on identifying social and environmental impacts, on the basis in particular of the comments made in the Second Millennium Development Goals report (2) in order to fine-tune the sustainable development chapter of any future agreement,

| — | carrying out a study into the conditions under which the Transnistrian economy could be reintegrated as part of the process of opening up trade, |
| --- | --- |

—

carrying out a study into the conditions under which the Transnistrian economy could be reintegrated as part of the process of opening up trade,

| — | stepping up the training drive for socio-occupational decision-makers and the media on the effective application of the Community acquis
  in the area of trade, |
| --- | --- |

—

stepping up the training drive for socio-occupational decision-makers and the media on the effective application of the Community acquis
  in the area of trade,

| — | taking account of technical assistance needs when it comes to meeting the standards of the Community acquis, especially in the agri-food sector, |
| --- | --- |

—

taking account of technical assistance needs when it comes to meeting the standards of the Community acquis, especially in the agri-food sector,

| — | putting in place sufficient flanking measures with a readjustment procedure so that full advantage can be drawn from real integration into the European economy, and exercising special vigilance regarding the security of external borders, bringing in the partners benefiting from this type of agreement, |
| --- | --- |

—

putting in place sufficient flanking measures with a readjustment procedure so that full advantage can be drawn from real integration into the European economy, and exercising special vigilance regarding the security of external borders, bringing in the partners benefiting from this type of agreement,

| — | planning the establishment of a joint monitoring committee for the trade agreement and, with the Committee's support, helping civil society to get involved in monitoring a future DCFTA, using funds for building up Moldovan civil society structures, |
| --- | --- |

—

planning the establishment of a joint monitoring committee for the trade agreement and, with the Committee's support, helping civil society to get involved in monitoring a future DCFTA, using funds for building up Moldovan civil society structures,

| — | involving the Moldovan social partners in the Eastern Partnership Forum, and putting the agreement's social conditions on the agenda of the Eastern Partnership's fifth working group on "social dialogue", |
| --- | --- |

—

involving the Moldovan social partners in the Eastern Partnership Forum, and putting the agreement's social conditions on the agenda of the Eastern Partnership's fifth working group on "social dialogue",

| — | encouraging contacts with Transnistrian civil society, with the support of the OSCE, for involvement in policies aiming for approximation with the EU. |
| --- | --- |

—

encouraging contacts with Transnistrian civil society, with the support of the OSCE, for involvement in policies aiming for approximation with the EU.

| 1.3 | In its recommendations to the Moldovan public authorities, the Committee urges the government and parliament to:






  — | brief a wide range of civil society organisations on progress in forging closer links with the EU and foster a public debate on this process bringing in the social partners and various interest groups (farmers, consumers, environmentalists, women, human rights campaigners, etc.), |
| --- | --- | --- |

1.3

In its recommendations to the Moldovan public authorities, the Committee urges the government and parliament to:

—

brief a wide range of civil society organisations on progress in forging closer links with the EU and foster a public debate on this process bringing in the social partners and various interest groups (farmers, consumers, environmentalists, women, human rights campaigners, etc.),

| — | press ahead with information sharing with socio-occupational stakeholders under the aegis of the Ministry for European Affairs, and maintain the National Participation Council's (CNP) observer role vis-à-vis the government, |
| --- | --- |

—

press ahead with information sharing with socio-occupational stakeholders under the aegis of the Ministry for European Affairs, and maintain the National Participation Council's (CNP) observer role vis-à-vis the government,

| — | establish a Moldovan Economic, Social and Environmental Council (MESEC) based on existing experience within the EU or under the neighbourhood arrangements, |
| --- | --- |

—

establish a Moldovan Economic, Social and Environmental Council (MESEC) based on existing experience within the EU or under the neighbourhood arrangements,

| — | involve stakeholders in implementing agreements with the EU in the energy and research fields, |
| --- | --- |

—

involve stakeholders in implementing agreements with the EU in the energy and research fields,

| — | strengthen the social dialogue and ensure that the Council of Europe's Social Charter is implemented, specifically by lifting the reservations and adopting the protocol on the collective complaints procedure, |
| --- | --- |

—

strengthen the social dialogue and ensure that the Council of Europe's Social Charter is implemented, specifically by lifting the reservations and adopting the protocol on the collective complaints procedure,

| — | give top priority to bringing young people and women into the labour market, |
| --- | --- |

—

give top priority to bringing young people and women into the labour market,

| — | contribute to making anti-corruption mechanisms more effective. |
| --- | --- |

—

contribute to making anti-corruption mechanisms more effective.

| 1.4 | In its recommendations to Moldovan civil society organisations, the Committee wishes to build up its relations with Moldovan civil society within the framework of the Eastern Partnership. It submits the following proposals to Moldovan civil society and would be willing to present them at a conference in Moldova in order to flesh out the Partnership's Contact between People platform. In addition to setting up a MESEC, the EESC recommends that the social partners and civil society partners:






  — | forge closer links with the major European sectoral platforms such as the European platform against poverty or the employers' organisations of various Member States, and through observer status within the European Trade Union Confederation, |
| --- | --- | --- |

1.4

In its recommendations to Moldovan civil society organisations, the Committee wishes to build up its relations with Moldovan civil society within the framework of the Eastern Partnership. It submits the following proposals to Moldovan civil society and would be willing to present them at a conference in Moldova in order to flesh out the Partnership's Contact between People platform. In addition to setting up a MESEC, the EESC recommends that the social partners and civil society partners:

—

forge closer links with the major European sectoral platforms such as the European platform against poverty or the employers' organisations of various Member States, and through observer status within the European Trade Union Confederation,

| — | strengthen monitoring units within trade unions and employers' organisations and the national commission of collective agreements on European matters, |
| --- | --- |

—

strengthen monitoring units within trade unions and employers' organisations and the national commission of collective agreements on European matters,

| — | develop social dialogue in line with ILO conventions and the Council of Europe's Social Charter, |
| --- | --- |

—

develop social dialogue in line with ILO conventions and the Council of Europe's Social Charter,

| — | boost civil dialogue in preparation for the DCFTA and for its monitoring, |
| --- | --- |

—

boost civil dialogue in preparation for the DCFTA and for its monitoring,

| — | develop expertise on ecological approaches such as reducing greenhouse gas emissions, analysing life cycles, carbon footprints and ecosystem services. |
| --- | --- |

—

develop expertise on ecological approaches such as reducing greenhouse gas emissions, analysing life cycles, carbon footprints and ecosystem services.

2.   Moldovan civil society in relation to approximation with Europe and the Eastern Partnership

| 2.1 | Moldovan civil society is already engaging with the policy of approximation with the EU through a number of mechanisms. A 30-member consultative body, the CNP, was set up in January 2011 and works with the government, while there is also a body for consultation with parliament. The national convention for European integration, founded in November 2010, brings together a number of organisations with the aim of issuing proposals and disseminating information on the European integration process, so that a direct and open debate can be held with stakeholders. Moreover, several thematic platforms bringing together civil society organisations have emerged nationally. |
| --- | --- |

2.1

Moldovan civil society is already engaging with the policy of approximation with the EU through a number of mechanisms. A 30-member consultative body, the CNP, was set up in January 2011 and works with the government, while there is also a body for consultation with parliament. The national convention for European integration, founded in November 2010, brings together a number of organisations with the aim of issuing proposals and disseminating information on the European integration process, so that a direct and open debate can be held with stakeholders. Moreover, several thematic platforms bringing together civil society organisations have emerged nationally.

| 2.2 | Moldovan organisations are involved in various Eastern Partnership civil society forum groups: democracy, human rights, good governance and stability; general recommendations; environment, energy and climate change; contact between people. The EESC wishes to encourage the development of the fifth working group on social dialogue, also covering broader economic and social matters (3). |
| --- | --- |

2.2

Moldovan organisations are involved in various Eastern Partnership civil society forum groups: democracy, human rights, good governance and stability; general recommendations; environment, energy and climate change; contact between people. The EESC wishes to encourage the development of the fifth working group on social dialogue, also covering broader economic and social matters (3).

| 2.3 | The social partners have an essential part to play in bringing the EU and Moldova closer. The independence of trade unions, recognised in the constitution, is enshrined in the law of July 2000 guaranteeing the freedom to establish trade unions, the right to engage in collective bargaining and the protection of trade union assets. The trade union scene has changed significantly in recent years: the two existing trade unions, the CSRM and Solidaritate, have merged to form a single body, the National Confederation of Trade Unions of Moldova (CNSM). Having joined the International Trade Union Confederation, the CNSM is beginning to take part in international activities and meetings. It could also request observer status at the European Trade Union Confederation. |
| --- | --- |

2.3

The social partners have an essential part to play in bringing the EU and Moldova closer. The independence of trade unions, recognised in the constitution, is enshrined in the law of July 2000 guaranteeing the freedom to establish trade unions, the right to engage in collective bargaining and the protection of trade union assets. The trade union scene has changed significantly in recent years: the two existing trade unions, the CSRM and Solidaritate, have merged to form a single body, the National Confederation of Trade Unions of Moldova (CNSM). Having joined the International Trade Union Confederation, the CNSM is beginning to take part in international activities and meetings. It could also request observer status at the European Trade Union Confederation.

| 2.3.1 | The most representative employers' body is the 32-member National Confederation of Employers of the Republic of Moldova, founded in 1996, which defines itself as non-political and independent. The national employment agency manages the Mobility Partnership between the EU and Moldova, to ensure the smooth integration of Moldova's labour market. The employers' organisations play their part in integration by implementing the project's decisions at local and regional level. |
| --- | --- |

2.3.1

The most representative employers' body is the 32-member National Confederation of Employers of the Republic of Moldova, founded in 1996, which defines itself as non-political and independent. The national employment agency manages the Mobility Partnership between the EU and Moldova, to ensure the smooth integration of Moldova's labour market. The employers' organisations play their part in integration by implementing the project's decisions at local and regional level.

| 2.3.2 | It would therefore be helpful to strengthen the social partners' information units on the DCFTA, working in cooperation with their European or Member State professional counterparts. |
| --- | --- |

2.3.2

It would therefore be helpful to strengthen the social partners' information units on the DCFTA, working in cooperation with their European or Member State professional counterparts.

| 2.4 | Certain categories of the population, especially in the countryside, remain in a vulnerable situation. Women are particularly hard hit by the worsening social situation: high unemployment, loss of skills, lower wages, seasonal work and scanty social benefits. Women have similar rights to men, but are more vulnerable on the labour market. Moreover, women account for only 14 % of entrepreneurs in Moldova. The rural population is still overrepresented among people living below the poverty line (4) and the proportion of rural poor rose in 2009. Children in Moldova are exposed to a range of ills: homelessness, child labour, trafficking and prostitution and their situation remains a cause for concern. The "social orphans" phenomenon, with children given away to orphanages by their families as a result of poverty, remains widespread. |
| --- | --- |

2.4

Certain categories of the population, especially in the countryside, remain in a vulnerable situation. Women are particularly hard hit by the worsening social situation: high unemployment, loss of skills, lower wages, seasonal work and scanty social benefits. Women have similar rights to men, but are more vulnerable on the labour market. Moreover, women account for only 14 % of entrepreneurs in Moldova. The rural population is still overrepresented among people living below the poverty line (4) and the proportion of rural poor rose in 2009. Children in Moldova are exposed to a range of ills: homelessness, child labour, trafficking and prostitution and their situation remains a cause for concern. The "social orphans" phenomenon, with children given away to orphanages by their families as a result of poverty, remains widespread.

| 2.5 | The way the media operate has been improving for several years. The audiovisual coordinating council adopted a new method for supervising the media coverage of politics in late October 2010, with the aid of the European Union and the Council of Europe. Two new television channels also came on air in 2010 (Jurnal TV and Publika TV) together with four new radio stations (Radio Sport, Aquarelle FM, Publika FM and Prime FM). Training in European affairs for journalists should be a priority. Progress with regard to freedom of expression will enable the public and business circles to be better informed of the challenges of approximation, especially for farmers. |
| --- | --- |

2.5

The way the media operate has been improving for several years. The audiovisual coordinating council adopted a new method for supervising the media coverage of politics in late October 2010, with the aid of the European Union and the Council of Europe. Two new television channels also came on air in 2010 (Jurnal TV and Publika TV) together with four new radio stations (Radio Sport, Aquarelle FM, Publika FM and Prime FM). Training in European affairs for journalists should be a priority. Progress with regard to freedom of expression will enable the public and business circles to be better informed of the challenges of approximation, especially for farmers.

| 2.6 | Despite undeniable progress, civil society still experiences serious organisational difficulties. Territorial inequalities persist: the non-governmental sector is active in the main urban centres – Chisinau, Balti, Cahul and Ungheni – but is largely inactive across large swathes of the country. The trade unions, in contrast, have a better spread across the country. As a result of the continuing secession, cooperation remains limited between the two sides of the Dniester. In addition, NGOs are largely dependent on external donors, potentially undermining their independence and sustainability. Lastly, expertise networks – even if of high quality – are based on a pool of experts that is too small, as the list of major NGOs in the countries has scarcely grown in recent years. |
| --- | --- |

2.6

Despite undeniable progress, civil society still experiences serious organisational difficulties. Territorial inequalities persist: the non-governmental sector is active in the main urban centres – Chisinau, Balti, Cahul and Ungheni – but is largely inactive across large swathes of the country. The trade unions, in contrast, have a better spread across the country. As a result of the continuing secession, cooperation remains limited between the two sides of the Dniester. In addition, NGOs are largely dependent on external donors, potentially undermining their independence and sustainability. Lastly, expertise networks – even if of high quality – are based on a pool of experts that is too small, as the list of major NGOs in the countries has scarcely grown in recent years.

3.   Civil society and a new Deep and Comprehensive Free Trade Agreement (DCFTA)

| 3.1 | The preparations for a DCFTA between the EU and Moldova touch upon goods, services and investment, but its deep and comprehensive character entails transposing and effectively applying the Community acquis in the area of trade. This necessitates appropriate support and major reforms. The Moldovan economy lacks competitiveness owing to a number of factors: a poor transport infrastructure (particularly roads), the small scale of the internal market, an uninnovative climate, the chronic instability of policies, difficulty in accessing finance, and corruption. Exports are no longer geared exclusively to the post-Soviet markets. The shift in external trade towards Europe is a reality: nearly half of the country's exports go in this direction. This stems from the growing share of exports from the textiles sector (from 10 % in 1999 to 22,7 % in 2008) (5), owing to the low cost of skilled labour. |
| --- | --- |

3.1

The preparations for a DCFTA between the EU and Moldova touch upon goods, services and investment, but its deep and comprehensive character entails transposing and effectively applying the Community acquis in the area of trade. This necessitates appropriate support and major reforms. The Moldovan economy lacks competitiveness owing to a number of factors: a poor transport infrastructure (particularly roads), the small scale of the internal market, an uninnovative climate, the chronic instability of policies, difficulty in accessing finance, and corruption. Exports are no longer geared exclusively to the post-Soviet markets. The shift in external trade towards Europe is a reality: nearly half of the country's exports go in this direction. This stems from the growing share of exports from the textiles sector (from 10 % in 1999 to 22,7 % in 2008) (5), owing to the low cost of skilled labour.

| 3.2 | A sustainability impact assessment that started at the same time as the negotiations and is currently under way should provide information by September 2012 on the positive and negative effects of opening up trade (6). Under the consultant's terms of reference (7), the EESC will have to be consulted on the issues involved in these negotiations, and on the contributions to public consultation. It will also pay particular attention to the position paper to be drawn up by the Commission following the impact assessment, and will scrutinise the flanking measures carefully. |
| --- | --- |

3.2

A sustainability impact assessment that started at the same time as the negotiations and is currently under way should provide information by September 2012 on the positive and negative effects of opening up trade (6). Under the consultant's terms of reference (7), the EESC will have to be consulted on the issues involved in these negotiations, and on the contributions to public consultation. It will also pay particular attention to the position paper to be drawn up by the Commission following the impact assessment, and will scrutinise the flanking measures carefully.

| 3.3 | The agreement-related risks for the EU are clearly defined: they essentially concern health and plant health rules and investment guarantees. The improvement in the business climate needed in order to attract European investment hinges on stepping up anti-corruption measures. The 2011 corruption perceptions index put Moldova 112th in its world ranking with a score of 2.9 out of 10 (8). The bodies tackling this problem are the Centre for Combating Economic Crime and Corruption and the public prosecutor's special anti-corruption unit. Appropriate legislation is in place, but anti-corruption policy is not being properly implemented. The finger can be pointed at a lack of political will, a rather fatalistic attitude among the general public and civil society's insufficient involvement in these issues. Fighting corruption is among the main priorities of international donors (Council of Europe, EU, SIDA, World Bank, UNDP, USAID, etc.). Several NGO groupings have also addressed this issue (Centre for the Analysis and Prevention of Corruption, Transparency International Moldova, Anti-Corruption Alliance, and the Centre for Investigative Journalism). The change of political parties in government has not yet yielded tangible results in this field. |
| --- | --- |

3.3

The agreement-related risks for the EU are clearly defined: they essentially concern health and plant health rules and investment guarantees. The improvement in the business climate needed in order to attract European investment hinges on stepping up anti-corruption measures. The 2011 corruption perceptions index put Moldova 112th in its world ranking with a score of 2.9 out of 10 (8). The bodies tackling this problem are the Centre for Combating Economic Crime and Corruption and the public prosecutor's special anti-corruption unit. Appropriate legislation is in place, but anti-corruption policy is not being properly implemented. The finger can be pointed at a lack of political will, a rather fatalistic attitude among the general public and civil society's insufficient involvement in these issues. Fighting corruption is among the main priorities of international donors (Council of Europe, EU, SIDA, World Bank, UNDP, USAID, etc.). Several NGO groupings have also addressed this issue (Centre for the Analysis and Prevention of Corruption, Transparency International Moldova, Anti-Corruption Alliance, and the Centre for Investigative Journalism). The change of political parties in government has not yet yielded tangible results in this field.

| 3.4 | The DCFTA will have widespread repercussions in the social sphere. In this connection, the EESC emphasises the importance of social dialogue for the country's development. It recommends the adoption of the protocol providing a system of collective complaints under the Council of Europe's Social Charter, an upgrading of the works inspectorate and the introduction of labour courts. The Moldovan authorities are cooperating with the ILO on the issue of undeclared work with a view to attaining European standards, and are taking part in the 2012 European Year of Active Ageing and Solidarity between Generations. Furthermore, the reception of migrants returning to Moldova should be improved, and the rights of Moldovans in other countries enhanced. Labour force training and retraining are among areas that should be given priority. |
| --- | --- |

3.4

The DCFTA will have widespread repercussions in the social sphere. In this connection, the EESC emphasises the importance of social dialogue for the country's development. It recommends the adoption of the protocol providing a system of collective complaints under the Council of Europe's Social Charter, an upgrading of the works inspectorate and the introduction of labour courts. The Moldovan authorities are cooperating with the ILO on the issue of undeclared work with a view to attaining European standards, and are taking part in the 2012 European Year of Active Ageing and Solidarity between Generations. Furthermore, the reception of migrants returning to Moldova should be improved, and the rights of Moldovans in other countries enhanced. Labour force training and retraining are among areas that should be given priority.

| 3.5 | The agricultural and agri-food sector is key in Moldova when it comes to negotiating the agreement. Moldovan farming needs to make progress in terms of certification of origin, verification of compliance with health and plant health rules, and compliance with the rules of competition if it wishes to export to the European markets and ensure that its food is safe. Standards have now been adopted, but real implementation is a lengthy and costly process, especially for animal products (in 2008, the only animal product that could be exported by Moldova was honey). Alignment with European standards generates high costs for small producers: the authorities must conduct a policy of institutional reform and support for the agri-food and wine sector. Projects financed by the European Commission's "Aid for Trade" mechanism would be valuable in raising standards. |
| --- | --- |

3.5

The agricultural and agri-food sector is key in Moldova when it comes to negotiating the agreement. Moldovan farming needs to make progress in terms of certification of origin, verification of compliance with health and plant health rules, and compliance with the rules of competition if it wishes to export to the European markets and ensure that its food is safe. Standards have now been adopted, but real implementation is a lengthy and costly process, especially for animal products (in 2008, the only animal product that could be exported by Moldova was honey). Alignment with European standards generates high costs for small producers: the authorities must conduct a policy of institutional reform and support for the agri-food and wine sector. Projects financed by the European Commission's "Aid for Trade" mechanism would be valuable in raising standards.

| 3.6 | Industry, long in decline, seems to be in a position to exploit its competitive price edge in proximity to the European markets, as evidenced by the rapid progress of the textiles sector. This light industry can set up anywhere in the country, especially in the disadvantaged regions of the south. The car industry has recently made inroads into the north of the country, thanks to German investors. Moldova's participation in the Danube region strategy and the modernisation of major industrial plants (especially those situated along the right bank of the Dniester) would be assets for development. |
| --- | --- |

3.6

Industry, long in decline, seems to be in a position to exploit its competitive price edge in proximity to the European markets, as evidenced by the rapid progress of the textiles sector. This light industry can set up anywhere in the country, especially in the disadvantaged regions of the south. The car industry has recently made inroads into the north of the country, thanks to German investors. Moldova's participation in the Danube region strategy and the modernisation of major industrial plants (especially those situated along the right bank of the Dniester) would be assets for development.

| 3.7 | In order to qualify as a deep and comprehensive agreement, a free trade agreement of this kind with the EU must be built on Moldova's ability to conform with the Community acquis. This requirement will imply sufficient financial support. Experience with additions to the internal market has clearly pointed to the decisive role of the structural funds in ensuring social and territorial cohesion. The Committee therefore recommends that flanking measures of equivalent value be brought together in order to reduce the risk of widening social inequalities or regional disparities. To this end, the agreement monitoring committee will focus in particular on the implementation of ENPARD, the programme for agriculture and rural development. |
| --- | --- |

3.7

In order to qualify as a deep and comprehensive agreement, a free trade agreement of this kind with the EU must be built on Moldova's ability to conform with the Community acquis. This requirement will imply sufficient financial support. Experience with additions to the internal market has clearly pointed to the decisive role of the structural funds in ensuring social and territorial cohesion. The Committee therefore recommends that flanking measures of equivalent value be brought together in order to reduce the risk of widening social inequalities or regional disparities. To this end, the agreement monitoring committee will focus in particular on the implementation of ENPARD, the programme for agriculture and rural development.

| 3.8 | Moldova's ecological situation gives grounds for real concern regarding the future (soil, water, energy), that must be taken into account in the negotiations on the agreement. The Soviet legacy is particularly problematic here, especially regarding the management of toxic residues. The prevailing droughts over recent years show that the Moldovan economy is vulnerable to environmental and climate deterioration. Worse, more than half of the country's water tables are polluted, and these resources meet two thirds of the population's drinking water needs. Environmental policy is affected by the poverty of the resources allocated to it, despite international commitments, such as those of the EIB. There is also a pressing need to alert all economic actors, who remain largely unaware of transport and construction issues. Moldova, which has joined the European Energy Community, is also highly dependent on imported fossil fuels, and energy efficiency remains low. The EESC advocates supporting environmental organisations that are working to promote energy savings or the rational use of resources and waste management. |
| --- | --- |

3.8

Moldova's ecological situation gives grounds for real concern regarding the future (soil, water, energy), that must be taken into account in the negotiations on the agreement. The Soviet legacy is particularly problematic here, especially regarding the management of toxic residues. The prevailing droughts over recent years show that the Moldovan economy is vulnerable to environmental and climate deterioration. Worse, more than half of the country's water tables are polluted, and these resources meet two thirds of the population's drinking water needs. Environmental policy is affected by the poverty of the resources allocated to it, despite international commitments, such as those of the EIB. There is also a pressing need to alert all economic actors, who remain largely unaware of transport and construction issues. Moldova, which has joined the European Energy Community, is also highly dependent on imported fossil fuels, and energy efficiency remains low. The EESC advocates supporting environmental organisations that are working to promote energy savings or the rational use of resources and waste management.

| 3.9 | The impact assessment should look in particular at the situation in Transnistria in order to assess, in the light of the DCFTA, the possible effects on border security and the economic and social impacts. The agreement could contribute to smoothing out internal disputes and ensuring territorial integrity. |
| --- | --- |

3.9

The impact assessment should look in particular at the situation in Transnistria in order to assess, in the light of the DCFTA, the possible effects on border security and the economic and social impacts. The agreement could contribute to smoothing out internal disputes and ensuring territorial integrity.

4.   Proposal for the creation of an Moldovan Economic, Social and Environmental Council

| 4.1 | In order to foster civil society progress towards greater dialogue and consultation, the EESC recommends that a MESEC be set up, following the example of other countries of the region. A study of the various experiences in Europe would allow Moldova to map out its own path. |
| --- | --- |

4.1

In order to foster civil society progress towards greater dialogue and consultation, the EESC recommends that a MESEC be set up, following the example of other countries of the region. A study of the various experiences in Europe would allow Moldova to map out its own path.

| 4.2 | The MESEC project comes in response to the need to give civil society a clear structure and will boost its influence and relevance. The current proliferation of ad-hoc structures offers a flexible, experimental framework, but their duration is uncertain and their functioning fragile. The fact that the social partners and associations or NGOs occupy adjacent positions means that the latter are less visible in public debate. |
| --- | --- |

4.2

The MESEC project comes in response to the need to give civil society a clear structure and will boost its influence and relevance. The current proliferation of ad-hoc structures offers a flexible, experimental framework, but their duration is uncertain and their functioning fragile. The fact that the social partners and associations or NGOs occupy adjacent positions means that the latter are less visible in public debate.

| 4.3 | A MESEC would make a valuable contribution to seeking consensus on the choices facing society, by allowing different interests to be reflected in the development model. A way of working together, based on consultation, must be built up around the three pillars of sustainable development. This would also represent a significant step towards a viable strategy for reintegrating Transnistria. |
| --- | --- |

4.3

A MESEC would make a valuable contribution to seeking consensus on the choices facing society, by allowing different interests to be reflected in the development model. A way of working together, based on consultation, must be built up around the three pillars of sustainable development. This would also represent a significant step towards a viable strategy for reintegrating Transnistria.

| 4.4 | A MESEC would guarantee the independent nature of analyses by keeping them apart from partisan quarrels and separate from the origins of resources, while enabling different points of view to be expressed. Questions on how to combat discrimination on the grounds of gender, origin or religion should also be addressed by such a council. |
| --- | --- |

4.4

A MESEC would guarantee the independent nature of analyses by keeping them apart from partisan quarrels and separate from the origins of resources, while enabling different points of view to be expressed. Questions on how to combat discrimination on the grounds of gender, origin or religion should also be addressed by such a council.

| 4.5 | A Moldovan ESEC would meet the need for evaluation of public policies as the Community acquis is brought on board. The institution could host the committee monitoring the trade agreement in conjunction with the European Economic and Social Committee. |
| --- | --- |

4.5

A Moldovan ESEC would meet the need for evaluation of public policies as the Community acquis is brought on board. The institution could host the committee monitoring the trade agreement in conjunction with the European Economic and Social Committee.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  DG Trade, Consultation on Deep and Comprehensive Free Trade Areas/EU-Moldova 2012.

1

(2)  United Nations, Second Millennium Development Goals Report, Republic of Moldova, 2010.

2

(3)  EESC opinion on The contribution of civil society to the Eastern Partnership, OJ C 248 of 25.8.2011,; EESC opinion on A new response to a changing neighbourhood, OJ C 43 of 15.2.2012.

3

(4)  Moldova Statistics, on the Rural Poverty Portal http://www.ruralpovertyportal.org/web/guest/country/statistics/tags/moldova.

4

(5)  Florent Parmentier, Moldova, a Major European Success for the Eastern Partnership?, Fondation Robert Schuman, 22 November 2010, http://www.robert-schuman.eu/doc/questions_europe/qe-186-en.pdf.

5

(6)  EESC opinion on Sustainability impact assessments (SIA) and EU trade policy, OJ C 218 of 23.7.2011.

6

Sustainability impact assessments (SIA) and EU trade policy

(7)  Trade Sustainability Impact Assessment in support of negotiations of DCFTAs between the EU and respectively Georgia and the Republic of Moldova, Ecorys, 6 February 2012.

7

(8)  European Commission, ENP Country Progress Report 2011 - Republic of Moldova, Memo, Brussels, 15 May 2012.

8

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/39 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/39

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Opinion of the European Economic and Social Committee on ‘The role of civil society in the EU-Colombia and EU-Peru trade agreements’

2012/C 299/08

Rapporteur: Giuseppe IULIANO

On 19 January 2012, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

The role of civil society in the EU-Colombia and EU-Peru trade agreements.

The Section for External Relations, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session of 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 139 votes to four with eight abstentions.

1.   Conclusions and recommendations

1.1   As it has not been possible to complete the negotiations for an association agreement with all the countries which make up the Andean region, at the request of Colombia and Peru the EU has decided to go ahead with the construction of new trade relations with these two countries. The negotiations were concluded in May 2010 and the Trade Agreement was initialled by the three parties on 24 March 2011 and officially signed on 13 April 2011. The Agreement is currently before the European Parliament which will have to decide whether to approve it or reject it, without the option of introducing amendments. At this stage, the European Economic and Social Committee (EESC) will be expressing its opinion and putting forward a series of guidelines for all the actors involved, to be taken into account in the event the Agreement is approved and ratified (1).

1.2   The European Economic and Social Committee considers that a trade agreement between the EU and Colombia and Peru could be a useful instrument both for Europe and for all the Andean countries involved. Ecuador and Bolivia might be willing to return to the negotiations. The Trade Agreement could help foster growth, competitiveness and decent work, as trade is an important mechanism for supporting development and relieving poverty. However, its economic, social and environmental repercussions must be carefully evaluated, in a transparent, comprehensive way in the interests of all the parties. And here civil society can and must play a key role.

1.3   In the process of negotiating this trade agreement it became clear that there was insufficient dialogue with the parties' organised civil society. In order to fill this gap and involve civil society in an institutionalised way, the EESC, having held discussions during its recent mission to Peru and Colombia with institutional representatives of organised civil society from both countries, proposes the establishment of a joint consultative committee (JCC) made up of representatives of European, Peruvian and Colombian civil society, with a consultative role in areas affecting human rights, sustainable development and the assessment of the sectoral impact of the Trade Agreement. The JCC would draw up a list of areas to monitor (2), and could be consulted on these areas by the signatory parties or could issue opinions, recommendations or studies on its own initiative. The JCC would hold an annual meeting with the body representing the parties to the Agreement, unless otherwise decided by common consent. The JCC would be compatible with the session with civil society organisations and the public at large provided for in Article 282 of the Agreement. It would be able to negotiate with the parties the possibility of establishing indicators on the sectoral impact of the implementation of the Agreement. The mechanisms already approved in previous EU trade agreements with other countries and regions of the world could be used as an example for launching a consultative forum with these characteristics.

1.4   The EESC considers reinforced cooperation between the European Parliament and the parliaments of Colombia and Peru to be important and welcomes the resolution adopted by the European Parliament, which could result in the implementation of parliamentary mechanisms for the simultaneous monitoring of the agreements entered into, in particular with regard to the human rights situation, the ILO's decent work agenda on working conditions and trade unions, gender equality, legal immigration with guarantees, the agreements on environmental protection and the possible implementation of recourse to the dispute settlement commission.

1.5   The EESC considers that a consultative body of this kind would make it possible to involve civil society in the Trade Agreement, institutionalise consultation, influence its development, tackle the challenges it entails, ensure fluid, direct communication with those responsible for the implementation of the Agreement and formulate specific recommendations on the positive or negative consequences of its application.

1.6   In May 2012 an EESC delegation visited Colombia and Peru. The mission can be considered a success in terms of the number and level of the discussions held with the parties and the useful information collected, which resulted in the views of civil society from both countries on the Trade Agreement being reflected in the opinion and in the formulation of a proposal for the establishment of a civil society joint consultative committee to monitor the Agreement. The opinion analyses the main problems existing in Colombia and Peru, which will need to be monitored by the civil society organisations.

2.   General comments

2.1   The EU maintains growing economic and trading relations with the Andean region, and in particular with Colombia and Peru. It is now the Andean countries' second trading partner, after the USA. Trade between the EU and the Andean countries shows significant growth over the past decade, with bilateral flows increasing from EUR 9,1 bn in 2000 to EUR 15,8 bn in 2007, with an annual average growth rate of 8,25 % (3). In 2010 bilateral trade in goods between the EU, Colombia and Peru accounted for around EUR 16 bn.

2.2   The parties to the Trade Agreement have developed links which go beyond the economic arena and embrace areas such as political dialogue, culture, education, science etc. The EU has monitored democratic transition processes and contributed to the defence of fundamental rights, making commitments to solidarity, which the EESC welcomes and supports.

2.3   The present Agreement was preceded by the Political Dialogue and Cooperation Agreement between the European Community and its Member States, of the one part, and the Andean Community and its Member Countries of the other part, concluded in 2003, and the respective rights and obligations assumed by the parties as members of the World Trade Organization (4).

2.4   The Agreement will open up the respective national markets of the parties to goods and products with significantly reduced levels of customs duty. The industrial sectors of Colombia and Peru will see many of their products benefit from greater flexibility regarding entry than has been available under the more restrictive GSP+ rules (5). Among other sectors, changes were negotiated in petrochemicals, plastics, textiles and clothing, fisheries products, bananas, sugar and coffee. It will also be important to monitor the impact of application of the Trade Agreement on the agricultural sectors of the parties, in relation to issues such as designations of origin, safeguard clauses and sectoral stabilisation mechanisms, which will need to be monitored and evaluated. The Committee welcomes the references to the importance of trade for sustainable development and the promotion of fair and equitable trade (6).

2.5   The informal economy plays a significant role in both Peru and Colombia, with one of the most serious effects of this being the high rates of informal work in the Andean countries, prompting the Committee to express concern about labour standards in both Colombia and Peru. The situation of young people and women is particularly difficult, as they are faced with worse unemployment or more unfavourable employment conditions. Impact assessments must include a gender perspective and pay attention to the working conditions of young people, as these groups face specific challenges (7). The EESC again draws attention to the need to adopt and implement specific and effective action for the progressive elimination of child labour, which is a worrying phenomenon affecting both countries.

2.6   The situation of human rights, including labour and trade union rights, in their countries is a cause for serious concern for the people of Colombia and Peru and for European civil society. The EESC is pleased to note that Article 1 of the Trade Agreement clearly states that violations of democratic principles and fundamental human rights can lead to the temporary or final suspension of the Agreement. The Committee also welcomes the commitments made by the parties under the fundamental Conventions of the ILO in Article 269(3) of the Agreement (8) and calls for these commitments to be fully respected during the application of the Agreement.

2.7   The EESC has on numerous occasions set out its vision of how it would like to see the negotiations for trade agreements develop. In its view bilateral agreements must be compatible with multilateralism (9). The EESC considers that bilateral negotiations should not lead the EU to relax its social, labour and environmental demands. These dimensions must be borne particularly in mind, as must the economic dimension, and mechanisms must be sought to harmonise them when implementing the agreements.

2.8   The Committee furthermore considers that experience shows that an active role for civil society during the implementation of the agreements makes it possible to identify important potential partners in the countries concerned, establish relations beneficial to all parties and facilitate the resolution of any disputes. The Committee has consistently called for agreements negotiated by the EU, or in the process of negotiation, to contain a social dimension, and has upheld this position in previous opinions (10).

2.9   In previous opinions the EESC has given a positive assessment of the EU's decision to establish Sustainability Impact Assessments (SIA), making it possible to present proposals and establish corrective measures which maximise the positive effects and minimise any negative effects of a trade agreement. The EESC once again calls for SIAs to be carried out with the full participation of civil society to ensure that agreements entered into are honoured and risks minimised, thus enhancing the opportunities for the opening up of trade (11).

2.10   The EESC cannot but point out that the negotiation of the Agreement with Colombia and Peru has been the subject of criticism and queries by the parties' social organisations and the trade union movements (12). The EESC in particular shares the concern about the lack of dialogue with civil society during the negotiation process. It therefore welcomes the adoption of a resolution by the European Parliament underlining the importance of establishing clear monitoring and follow-up mechanisms involving representatives of civil society during the implementation of the Trade Agreement (13).

2.11   From the point of view of civil society, the Committee considers that trade agreements should facilitate changes which, inter alia, promote the development of corporate social responsibility, require European companies to be bound by the labour practices of their countries of origin, create and safeguard high-quality jobs, promote the development of collective bargaining, make it possible to monitor closely the exploitation of natural resources, help to reduce the informal economy and informal work, to eliminate violations of human rights and to combat poverty and social inequality and make it possible to improve living conditions, particularly for the disadvantaged.

2.12   The EESC considers that the Trade Agreement contains articles - such as Article 1 on human rights, Article 282 on dialogue with civil society and Article 286 on impact assessments - which facilitate the institutionalised, representative and autonomous participation on a small scale of civil society organisations from both parties (14) through the establishment of a joint consultative committee as a forum open to the whole of Peruvian, Colombian and European civil society.

2.13   The EESC hopes that this Trade Agreement will help the signatories to tackle the most urgent socio-economic problems such as poverty, social inequality and violence, and will help to improve the living conditions of the people, particularly the most disadvantaged; to this end the Committee considers it essential that civil society in the three parties be able to participate actively in the implementation of the Agreement and in the assessment of its impact.

2.14   In May 2012 an EESC delegation visited Colombia and Peru. The mission can be considered a success in terms of the number and level of the discussions held with the parties and the useful information collected, which resulted in the views of civil society from both countries on the Trade Agreement being reflected in the opinion and in the formulation of a proposal for the establishment of a civil society joint consultative committee to monitor the Agreement. The mission was an opportunity to gauge the current state of social, labour and economic problems in both countries and the lack of confidence of the civil society organisations (with the sole exception of the employers' organisations, which support the Agreement in both countries) in the capacity of both their own governments and the Trade Agreement to help resolve them. The mission highlighted the distance between the vision of the governments, which claim to have carried out broad consultations and information campaigns, and the civil society organisations' perception of these (15).

2.15   The opinion highlights some of the main problems of the Agreement's two signatory countries, which will need to be monitored by the CSOs of the parties. In the case of Colombia, emphasis is placed on the human rights issue, with both positive and negative aspects, violations of trade union rights, current implementation of the Victims and Land Restitution Law and the problem of impunity. In the case of Peru, the analysis focuses on the social and labour situation, especially in relation to mining, child labour, emigration to Europe and the rights of indigenous peoples.

2.16   The EESC calls on the parties involved to establish, in consultation with civil society, ideally through the JCC, a transparent and binding action plan complementary to the Trade Agreement on human, environmental and labour rights. Such an action plan should set out clear, time-bound and result-based targets in each of the above areas. In this connection the EESC supports the proposals set out in point 15 of the European Parliament's resolution of 13 June 2012.

3.   Colombia

3.1   Human rights: highlights and lowlights

3.1.1   A new government took power in August 2010. It is headed by President Juan Manuel Santos, who has adopted a different tone on issues related to human rights. The Vice-President is Angelino Garzón, ex-secretary-general of the Central Unitaria de Trabajadores trade union and former labour minister who, in keeping with his background, is promoting a policy of strengthening national social dialogue. President Santos' position on human rights is different from that of the government of his predecessor, Álvaro Uribe. Rather than using hard rhetoric which put defenders of human rights in real danger, the government has softened its tone and made concessions to the promotion of dialogue. For the first time it has recognised the existence of an internal armed conflict and seems ready to work towards a definitive solution to the problem.

3.1.2   Colombia is suffering the consequences of a serious internal conflict which has plagued the country for more than 60 years. An armed conflict in which various actors are both a source of, and participants in the violence. Despite the efforts of the government, acknowledged by Amnesty International, the situation remains highly complex (16).

3.1.3   In Colombia the continent's longest-standing guerrilla group, the Fuerzas Armadas Revolucionarias de Colombia (FARC), remains active. Both the FARC and the Ejército de Liberación Nacional (ELN) continue to recruit boys and girls as soldiers and to use them in the armed conflict, and have laid anti-personnel mines in many areas, receiving funding through their relationship with drug traffickers. After the Democratic Republic of Congo, Colombia is the country with the largest number of child soldiers (17).

3.1.4   Between 1,5 and 3 million persons have been displaced from their usual places of residence and work. In February 2012 the FARC announced that it would suspend the practice of kidnapping and it freed ten military hostages. However, they are still holding an unspecified number of civilians (18).

3.1.5   For many years, particularly since the 1970s, thousands of peasant farmers, workers, trade unionists, schoolteachers, human rights activists, leaders of local, municipal and rural social organisations, among others, have lost their lives. According to the Escuela Nacional Sindical (national trade union school), an NGO recognised for its work in defence of human and trade union rights, the total number of trade unionists murdered since 1986 exceeds 2 900. Drug trafficking remains a frequent illegal activity, with a national-level network and international connections. Attempts to eradicate the problem by military means have frequently only served to accelerate the spiral of violence. Numerous members of the security forces have been accused by national and international human rights organisations of murdering individuals they claimed were members of the guerrilla movement, the so-called "false positives" (19).

3.1.6   Women continue to suffer from inequality and discrimination in Colombian society. Gender inequality exists in the home, with high levels of violence against women. In the economic sphere there is a high rate of unemployment, a growing number of women working in the informal economy (57 %) and persistent gender-based wage disparities. In the political arena there is a low level of representation of women in decision-making roles.

3.1.7   According to reports by the country's main trade union federations (CUT, CTC, CGT), the social dialogue, which suffered serious damage during previous governments, has still not shown sufficient signs of positive change. The federations maintain that the lack of social dialogue has contributed to the fall in the rate of trade union membership from 14 to 4 %. The situation of trade union rights in Colombia has been closely monitored by the ILO (20) in recent years, and the ILO has carried out numerous fact-finding missions to the country and maintains a permanent unit in the country to monitor violations of human, labour and trade union rights. In 2011, 29 trade union leaders and activists were murdered. In many cases, those responsible are "demobilised" paramilitaries. Ten more were the objects of unsuccessful attempts on their lives. Daniel Aguirre, secretary-general of the Sindicato Nacional de Corteros de Caña (Colombian sugar cane cutters' union), was murdered on 27 April 2012, bringing the number of trade unionists murdered so far this year to seven.

3.1.8   One positive development is the increase in staff at the national public prosecutor's office assigned to clearing up these crimes. Also, at the initiative of the public prosecutor's office, the National Congress approved a reform of Article 200 of the Penal Code, increasing the prison sentences and fines provided for impeding or disturbing trade union meetings or the exercise of labour rights or for conducting reprisals in response to legal strikes, meetings or free association (21). In January 2012 the national public prosecutor's office and the Escuela Nacional Sindical (national trade union school) concluded an agreement to exchange information and work towards a unified methodology for defining, identifying and documenting crimes against members of trade union organisations.

3.1.9   However, although the climate of violence in the country has moderated, terrorist acts continue to be committed. On the same day that the free trade treaty with the United States entered into force, 15 May 2012, an attempt was made on the life of ex-minister Fernando Londoño Hoyos, in which his two escorts were killed and 49 people injured.

3.1.10   The Victims and Land Restitution Law, adopted in 2011, recognises the existence of an armed conflict and of the victims' rights. It makes provision for reparations for survivors of human rights violations, including those perpetrated by agents of the State. Its application to date has been irregular and incomplete but for the victims it represents an important change, as previously their rights had not been recognised at all. During the EESC's mission, civil society organisations complained that individuals and communities to whom land had been returned were receiving threats. The EESC delegation was informed by the Ministry of Agriculture that judges were being trained to deal with the return of land allocated on the basis of fraudulent legal claims, which had legalised the ownership of land bought for ultra-low prices from peasants forced off the land, the land being used in many cases for the illegal cultivation of drugs. Protection was also being offered to families who had returned to land previously left uncultivated under pressure from guerrilla groups, who were seeking in this way to control the territory.

3.1.11   The problem of impunity, an endemic problem in Colombia: certain progress has been made and key investigations have been undertaken into human rights, including the "parapolítica" scandal, which revealed illegal links between legislators and paramilitary groups. More than 120 former members of parliament were investigated and around 40 were convicted (22). On the other hand, in February 2012 the re-election of the national public prosecutor (23), who had investigated the main cases of corruption and prosecuted paramilitaries, drug traffickers and guerrillas, demonstrating a strong commitment to putting an end to impunity, was declared invalid. The investigations revealed links which had existed between the DAS (Administrative Security Department) and paramilitaries and its direct responsibility for many cases of threats to, and murders of human rights activists, judges, journalists, trade unionists and lawyers (24). In October 2011 the government announced the abolition of the DAS and the establishment of a new intelligence agency.

3.1.12   The government has proposed a controversial reform of Article 221 of the Constitution, which would assign the initial investigation of possible human rights abuses committed by members of the security forces to the military courts. The reform would establish the principle that all offences committed by members of the armed forces during operations and/or procedures would be "related to the service" and would consequently be subject, at least in the first instance, to military jurisdiction. On various occasions the Inter-American Commission on Human Rights and the United Nations have highlighted the military courts' lack of impartiality and independence, which detracts from the credibility of their decisions (25). The Colombian security forces have repeatedly been accused of extrajudicial executions and the Office of the UN's High Commissioner for Human Rights in Colombia estimates that more than 3 000 persons were murdered by agents of the State between 2004 and 2008. Since then there has been a considerable reduction in the number of cases, but the practice has not completely disappeared (26). Various national and international organisations have called on President Santos to withdraw the proposed amendment (27).

3.1.13   In contrast to previous opinions, it emerged from discussions with employers that the business sector felt that the Agreement would promote the legal economy, regular labour conditions, human rights and the environment, and would help reduce levels of violence.

4.   Peru

4.1   Over the last decade poverty has been reduced, but according to data from the World Bank (28), 15 % of the population still lives on less than two dollars a day. Major differences persist between urban and rural regions. As a consequence, growth has so far resulted in a very uneven distribution of incomes. Average incomes (and thus private consumption) have grown but not enough, in 2010 amounting to USD 404.

4.2   Labour and trade union situation: in 2009 nearly 73 % of employed workers had no contracts, 7 % had permanent contracts and 20 % temporary contracts (29). In 2011 the ILO highlighted the growth in informal work and under-employment, the fall in the real minimum wage and very high levels of child labour (42 %). Peru is experiencing a boom in agricultural exports, which has, however, so far not benefited workers in the sector. In 2008, before the international crisis erupted, only just over 200 000 workers had contracts. During the first half of 2011 the recovery began to gather strength. The level of employment reached its historic maximum. However, in this sector working days can exceed the legal maximum, and pay is below the normal minimum wage (30); overtime pay is low and temporary contracts are the norm (31).

4.3   The EESC considers the commitments to comply with the ILO fundamental conventions and the decent work agenda to be a positive step, but renews its call for Peruvian and European civil society to be involved in monitoring their application. One key condition in relation to the concept of decent work is the social dialogue dimension; the participation of employers' and trade union organisations in the framework of collective bargaining, which has an important role to play in complementing legislation in order to improve working conditions. The EESC also recommends that there be a formal exchange of experience of social dialogue.

4.4   Child labour is a long-standing concern for Peruvian civil society. It is particularly prevalent in the mining industry, where girls are also employed. The figures can only be regarded as approximate, as the official statistics do not generally fully reflect the scale of the phenomenon, but according to data from IPEC-ILO (32), in two out of three mining families minors under 18 are working in the extraction, processing or materials transport sub-sectors. Girls, although they do not generally work in the lower levels of mines, are increasingly involved in activities within the mines, e.g. in communications between the mine and the outside world. The ILO argues that the eradication of child labour in mines will help to promote technological change, improve social protection and broaden educational opportunities for the minors involved. The involvement of civil society is essential if progress is to be achieved. The EU has entered into specific commitments on the abolition of child labour with its trading partners and EU companies operating in other continents. Questions of corporate social responsibility and labour and human rights do not stop at Europe's borders. During the implementation of the Trade Agreement these commitments will have to be renewed and their impact on the current situation of child labour evaluated.

4.5   Immigration to the EU: according to Peru's Instituto Nacional de Estadística e Informática (National Institute of Statistics and Informatics) (33), during the period 1990-2009 the number of Peruvians residing outside the country amounted to 2 038 107. After Spain (with around 200 000 Peruvian residents), Italy is one of the countries which has received the most Peruvian immigrants in recent years (34). For the EESC, legal immigration with guarantees is something positive and enriching. The monitoring mechanism involving civil society to be established by the Trade Agreement will need to observe and monitor the human rights of migrants and the prevention of illegal trafficking.

4.6   Rights of indigenous peoples: the EESC notes the entry into force of the Law on Prior Consultation, adopted in 2011 (35). The law, which recognises the rights of indigenous peoples, could contribute to social inclusion and ensure that the benefits of democracy are finally shared by indigenous peoples. It is the fruit of the labours of many social players, but in particular the indigenous peoples themselves, who have consistently called for legislation to ensure that the right to consultation is effectively applied. The full application of the law will be proof of Peru's compliance with its commitments under ILO Convention 169.

4.7   The government of Ollanta Humala took office in 2011, and faces significant challenges and expectations. The signature of the Trade Agreement with the EU can help to tackle these challenges and turn expectations into certainty of positive change, as long as it is understood that simply signing the agreement will not in itself produce the desired changes. This opinion reflects the EESC's intention to contribute to improved relations between the EU and Peru in the future, with the participation of Peruvian civil society in the monitoring and impact assessment mechanisms adopted. The EESC has stressed, and it now reiterates, the importance of these civil society participation structures being representative and independent of the executive.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  The Agreement is to be ratified by the 27 parliaments of the Union and the parliaments of Colombia and Peru.

1

(2)  As laid down, for example, in the action plan on labour rights included in the agreement between Colombia and the United States and in GSP+.

2

(3)  Sustainability Impact Assessment of trade, drawn up at the request of the European Commission by Development Solutions, the Centre for Economic Policy Research and the University of Manchester, 2009.

3

(4)  Also the objectives of the EU-Colombia Protocol on Human Rights (2009), ratified at the sixth regular meeting of the Mechanism of Human Rights Dialogue, held in Bogotá on 30 January 2012.

4

(5)  Generalised System of Preferences Plus.

5

(6)  Articles 271 and 324 of the Trade Agreement.

6

(7)  EESC opinion New trade agreements negotiations - The EESC position, rapporteur Mr Peel, co-rapporteur Ms Pichenot (OJ C 211, 19.8.2008, p. 82).

7

New trade agreements negotiations - The EESC position

(8)  "Each Party commits to the promotion and effective implementation in its laws and practice and in its whole territory of internationally recognised core labour standards as contained in the fundamental Conventions of the International Labour Organization" Article 269(3) of the Trade Agreement.

8

(9)  OJ C 211, 19.8.2008, p. 82.

9

(10)  "The EESC deems it essential that the AA include a social dimension, consistent with an AA that goes beyond commercial aspects and is ultimately intended to increase social cohesion.", rapporteur: Mr Zufiaur (OJ C 248, 25.8.2011, p. 55).

10

(11)  EESC opinion Sustainability impact assessments (SIA) and EU trade policy, rapporteur: Ms Pichenot (OJ C 218, 23.7.2011, p. 14).

11

Sustainability impact assessments (SIA) and EU trade policy

(12)  Letter to the European Parliament from the European Trade Union Confederation (ETUC), the International Trade Union Confederation (ITUC), the Trade Union Confederation of the Americas and the Council of Global Unions of 22 February 2012. Position of the Colombian CGT on the EU-Colombia trade agreement, February 2012.

12

(13)  Resolution of the European Parliament on the EU-Colombia Peru Trade Agreement, adopted on 13 June 2012.

13

(14)  The EESC for the EU side.

14

(15)  The mission programme and the report are attached in Appendix B.

15

(16)  Statement by Amnesty International submitted to the 19th session of the UN Human Rights Council, Geneva, 2012.

16

(17)  2012 Report of the Tribunal internacional sobre la infancia afectada por la guerra y la pobreza (International tribunal on children affected by war and poverty), http://www.tribunalinternacionalinfancia.org.

17

Tribunal internacional sobre la infancia afectada por la guerra y la pobreza

(18)  On 28 April 2012, in breach of their promise, they abducted the French journalist Romeo Langlois, who was released a few weeks later.

18

(19)  Under Colombian law these killings are considered to constitute the murder of protected persons.

19

(20)  Source: successive reports by the Conference Committee on the Application of Standards, International Labour Conferences, ILO.

20

(21)  Report received from the Embassy of Colombia in Brussels on the activities of the national public prosecutor's office, March 2012.

21

(22)  In February 2011 former senator Mario Uribe, ex-president of the Congress and cousin of President Álvaro Uribe, was found guilty of having links with the paramilitaries.

22

(23)  Viviane Morales had her election annulled for alleged procedural irregularities in her appointment.

23

(24)  In September 2011 Jorge Noguera Cotes, who headed the DAS from 2002 to 2005, was found guilty of having placed the intelligence agency at the disposal of paramilitary groups, and of the 2004 murder of a university professor.

24

(25)  Report of the Inter-American Commission on Human Rights on Colombia.

25

(26)  Human Rights Watch 2012.

26

(27)  Letter to President Santos, Human Rights Watch, 9 February 2012.

27

(28)  World Development Indicators, World Bank, 2011.

28

(29)  Source: Ministry of Labour, Peru.

29

(30)  The daily wage is between USD 8,84 and 10, and the minimum living wage is USD 259,61/month.

30

(31)  A clear example of the inappropriate use of temporary contracts is the palm oil sector.

31

(32)  International Programme on the Elimination of Child Labour of the ILO, www.ilo.org.

32

(33)  Perú: Estadísticas de la Emigración Internacional de Peruanos e Inmigración de Extranjereos, 1990–2009 ("Peru: Statistics on the emigration of Peruvians and immigration of foreign nationals, 1990-2009"), Lima: 2010.

33

Perú: Estadísticas de la Emigración Internacional de Peruanos e Inmigración de Extranjereos, 1990–2009

(34)  Since 2011 the EU has been financing the Perú Migrante project.

34

Perú Migrante

(35)  Law No. 29785, Law on the Right of Prior Consultation for Indigenous Peoples, recognised in Convention 169 of the ILO.

35

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/45 |
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4.10.2012

EN

Official Journal of the European Union

C 299/45

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Opinion of the European Economic and Social Committee on ‘Cooperatives and agri-food development’ (own-initiative opinion)

2012/C 299/09

Rapporteur: Mr TRIAS PINTÓ

At its plenary session held on 19 January 2012, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw-up an own-initiative opinion on

Cooperatives and agri-food development

(own-initiative opinion).

The Section for Agriculture, Rural Development and the Environment which was responsible for preparing the Committee's work on this subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 144 votes to 2 with 4 abstentions.

1.   Conclusions and recommendations

1.1   In the quest for a more sustainable economic model, cooperatives provide a competitive and efficient alternative, offering new responses to the imbalances in the agri-food value chain, while promoting employment, local food chains, food safety, participation and social responsibility.

1.2   The current agri-food product markets need structural reforms in line with the challenges of the Europe 2020 strategy and other EU initiatives. Conventional distribution channels do not offer adequate transparency in price formation, leading to serious imbalances in the bargaining power of its stakeholders, to the detriment of producers and consumers (the first and last links in the chain). Furthermore, unnecessary environmental costs are incurred due to distribution which is not energy-efficient, such as the cold storage of fresh foods out of season and their transportation to markets which are far from their place of production.

1.3   The market should be reshaped in a circular fashion, promoting shorter distribution channels in order to better connect supply and demand in networks, promoted from the most basic level within an innovative and technologically-advanced framework.

1.4   By means of their characteristic principles and values, cooperatives help to create fair and synergetic commercial relationships which help to rebalance the agri-food value chain, bringing together interests, optimising shared value and consolidating the sustainability of consumption and production methods.

1.5   The EESC therefore calls upon the European institutions to foster the conditions necessary to promote the cooperative model, by adopting EU policies which provide for appropriate legal, economic, fiscal, technical measures etc., with a view to ensuring that the market develops in a harmonious fashion.

2.   Introduction

2.1   The cooperative model bolsters the European Union's entrepreneurial ecosystem, particularly economic democracy, helping to make the change needed to the production model.

2.2   2012, declared International Year of Cooperatives by the UN, provides an ideal framework within which to consider the role that cooperatives can play in designing a new driver for sustainable and inclusive growth, enabling a highly competitive social market economy to emerge from the current crisis (1).

2.3   There are wide variations within the EU's cooperative sector. Some cooperatives' commercial activities are exactly the same as those of their competitors, while others combine their commercial activities with "political" positions in favour of consumers, the environment, etc. as part of their information or sales strategies. A distinction should also be made between cooperatives operating at the beginning (production) and at the end (consumption) of the value chain, often with no coordination between them.

2.4   The structural reform of the markets, aimed at achieving a sustainable production and consumption model, requires the agri-food value chain (2) to be rebalanced, with agricultural associations in general – and cooperatives in particular – playing a modulating and integrating role which enables the appropriate adjustments and changes to be carried out, all through inter-sectoral interaction and dialogue.

2.5   The standpoints expressed by the EESC are based on this approach, seeking to respond to the future challenges faced by EU policies in the context of the Europe 2020 strategy, the new Common Agricultural Policy, the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan, and the Single Market Act.

2.6   It should be stressed that underpinning this initiative is the principle of smart, sustainable and inclusive growth based on knowledge, the low carbon economy (3), employability and social and territorial cohesion.

2.7   Finally, this proposal contributes to other cross-cutting aspects which are extremely important to EU policies, including those relating to food sovereignty and security, territorial balance and the preservation of local food chains (4), social entrepreneurship, the protection of consumer rights and interests, and the direct participation of organised civil society in the field of agri-food (5).

3.   The EESC's comments

3.1   Analysis of the current market

3.1.1   The market should operate in such a way that it offers products of the type and quality that consumers want. Messages from consumers must therefore be communicated throughout the value chain and reach producers undistorted. Unfortunately, today's market is often of a linear nature – which prevents positive feedback – and displays a degree of complexity which distorts its mission, thus damaging its true purpose of supplying the population with products in the most satisfactory manner possible.

3.1.2   Consumers are increasingly demanding products that are safe and sustainable and that are produced in ways that are innovative, responsible and environmentally-friendly and under adequate working and animal welfare conditions. It should not be forgotten, however, that less expensive food products must also be taken into account, since price is still a determining factor in purchasing decisions. Unfortunately, the agri-food value chain is not communicating the relevant information between the various links (primary production, packaging, storage, distribution and sale).

3.1.3   As well as pushing providers and consumers further apart, distribution channels have been hindering the transparency of the operations they encompass, so that production costs are undervalued and prices paid to producers often do not reach the minimum thresholds required for their economic survival.

3.1.4   Furthermore, the low bargaining power and captive dependency of those operators who endure unfair prices in their business increase the prevailing imbalance in the agri-food chain (6), perpetuating anomalous market behaviour.

3.1.5   An analysis of the current market, which is necessary for its reform, therefore indicates the following: fragmented supply, concentrated distribution and inconsistent demand. This situation provides an ideal environment for speculation.

3.1.6   It should not be forgotten that the distribution stage has other social and environmental consequences, such as those resulting from long-distance transportation, prolonged cold storage, business relocation etc.

3.2   Towards a more cooperative market: a focus on new sustainable consumption and production methods

The cooperative identity is enhanced by the values of democracy, equality, equity, solidarity, transparency and social responsibility. The International Cooperative Alliance has established seven principles to be applied by cooperatives: "voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives and concern for community" (7).

A cooperative agri-food market is based on cooperatives which are involved in agri-food supply and demand, and on the reciprocal or mutually beneficial relations between them, seeking an economically and socio-environmentally fairer and more efficient value chain In short, the market takes the form of a positive sum game, from which all players benefit, producing the maximum shared value by creating long-term alliances and commitments between its main stakeholders (producers and consumers) under equitable conditions of fair competition In line with the principles outlined in this opinion, the key factors for the reorganisation of the market are as follows:

| 3.2.1 | An inversion of the "production pyramid", taking a cross-border cooperative approach, with a critical mass that ensures the necessary scale and scope. Based on individual or family producers, it is necessary to foster the activities of associations and cooperatives on the ground (which stimulate the rural economy), creating larger structures (regional networks and competitive clusters) which bring farmers closer to the portions of distribution channels with the greatest added value. This cooperative structure will make it possible to maximise yields and meet the diversity of demand, shortening distribution channels between production and consumption hubs (8). Furthermore, cooperative integration (9) ensures greater traceability throughout the process, in terms of both quality and price formation, which in turn means optimised resources and greater efficiency. |
| --- | --- |

3.2.1

An inversion of the "production pyramid", taking a cross-border cooperative approach, with a critical mass that ensures the necessary scale and scope. Based on individual or family producers, it is necessary to foster the activities of associations and cooperatives on the ground (which stimulate the rural economy), creating larger structures (regional networks and competitive clusters) which bring farmers closer to the portions of distribution channels with the greatest added value. This cooperative structure will make it possible to maximise yields and meet the diversity of demand, shortening distribution channels between production and consumption hubs (8). Furthermore, cooperative integration (9) ensures greater traceability throughout the process, in terms of both quality and price formation, which in turn means optimised resources and greater efficiency.

| 3.2.2 | Cooperative social return. Profits earned within the cooperative network in turn benefit the participating cooperatives, enhancing their capacity to increase their market power, providing greater employability, wider access to basic resources and more favourable conditions for producers and consumers, fostering synergies in the new commercial relations environment. |
| --- | --- |

3.2.2

Cooperative social return. Profits earned within the cooperative network in turn benefit the participating cooperatives, enhancing their capacity to increase their market power, providing greater employability, wider access to basic resources and more favourable conditions for producers and consumers, fostering synergies in the new commercial relations environment.

| 3.2.3 | Concentration of demand
   (10). Cooperatives, together with the promotion of consumer networks which focus consumer demand, are intended to help those consumers to access products under better pricing and quality conditions. Direct contact with producers can be achieved by means of local markets and by optimising online trading. This approach is in line with the objectives laid out by the European Union's main organisations of farmers and agri-cooperatives: "The objective is to promote/support farmers' initiatives selling directly their products to the end-consumer (e.g. direct sales at the farm-gate, through agricultural cooperatives, at local markets, through collective platforms or businesses under the control of the producer)." (11). |
| --- | --- |

3.2.3

Concentration of demand
   (10). Cooperatives, together with the promotion of consumer networks which focus consumer demand, are intended to help those consumers to access products under better pricing and quality conditions. Direct contact with producers can be achieved by means of local markets and by optimising online trading. This approach is in line with the objectives laid out by the European Union's main organisations of farmers and agri-cooperatives: "The objective is to promote/support farmers' initiatives selling directly their products to the end-consumer (e.g. direct sales at the farm-gate, through agricultural cooperatives, at local markets, through collective platforms or businesses under the control of the producer)." (11).

| 3.2.4 | Circular market model
   (12) based on shorter distribution channels. In order to counter the excessive weight of operators who add no value to the agri-food marketing chain, distribution channels must be fostered that bring production units and consumption (i.e. primary producers and end-consumers) as close as possible together (13). This helps to create "market loops" which make it possible to adjust, in terms of means and costs, the available productive resources to the needs of the population, preventing surpluses or deficits, which may furthermore cause artificial price fluctuations. All of this will enable the food supply chain to operate in a fairer, more transparent and more balanced manner, helping to eradicate those abusive and unfair practices that jeopardise legitimate competition. |
| --- | --- |

3.2.4

Circular market model
   (12) based on shorter distribution channels. In order to counter the excessive weight of operators who add no value to the agri-food marketing chain, distribution channels must be fostered that bring production units and consumption (i.e. primary producers and end-consumers) as close as possible together (13). This helps to create "market loops" which make it possible to adjust, in terms of means and costs, the available productive resources to the needs of the population, preventing surpluses or deficits, which may furthermore cause artificial price fluctuations. All of this will enable the food supply chain to operate in a fairer, more transparent and more balanced manner, helping to eradicate those abusive and unfair practices that jeopardise legitimate competition.

| 3.2.5 | New technologies
   (14). Technological innovation provides the cornerstone for the growth of a more cooperative market, in terms of both the innovative development of agri-food production techniques and the logistical structure required to optimise the efficiency of communication processes when implementing smart production, distribution and consumption networks (organisations with a high capacity for self-organisation and the ability to develop flexibly, and with the capacity to learn how to act in order to achieve their objectives). Their virality, interoperability and interconnectivity within a digitalised environment will make it possible to cut out unnecessary middlemen. New technologies must therefore be the tools in a process to increase collective efficiency, given their capacity to produce change and introduce innovation into food chains. |
| --- | --- |

3.2.5

New technologies
   (14). Technological innovation provides the cornerstone for the growth of a more cooperative market, in terms of both the innovative development of agri-food production techniques and the logistical structure required to optimise the efficiency of communication processes when implementing smart production, distribution and consumption networks (organisations with a high capacity for self-organisation and the ability to develop flexibly, and with the capacity to learn how to act in order to achieve their objectives). Their virality, interoperability and interconnectivity within a digitalised environment will make it possible to cut out unnecessary middlemen. New technologies must therefore be the tools in a process to increase collective efficiency, given their capacity to produce change and introduce innovation into food chains.

3.3   Achieving a more cooperative market

The global transition towards responsible, sustainable production and consumption is intended to take a multi-stakeholder approach, in which each and every stakeholder can influence and be influenced by cooperative activity ("cooperative social co-responsibility"). One strategic issue to be taken into account in promoting cooperative and inter-cooperative consumption and production models is the provision of institutional mechanisms and instruments enabling the model to be established in a manner that can compete with the conventional value chain. Certain considerations may be useful when it comes to the relevant decision making process, including the following:

| 3.3.1 | The adoption of measures in the context of EU policies. Reform of the legal framework and an appropriate policy of incentives are needed in order to promote measures to support the establishment of cooperatives by means of development agencies, financial credit etc., as well as cooperative integration and internationalisation measures, social innovation and cohesion measures, and measures to strengthen partnerships between public institutions and SMEs, cooperatives, consumer associations or other groups. |
| --- | --- |

3.3.1

The adoption of measures in the context of EU policies. Reform of the legal framework and an appropriate policy of incentives are needed in order to promote measures to support the establishment of cooperatives by means of development agencies, financial credit etc., as well as cooperative integration and internationalisation measures, social innovation and cohesion measures, and measures to strengthen partnerships between public institutions and SMEs, cooperatives, consumer associations or other groups.

| 3.3.2 | Cooperative public procurement
   (15). The progress made over recent years in the context of green public procurement and, more recently, in the adoption of ethical criteria in administrations' public procurement procedures have had a significant impact on the social and economic progress of sustainability and cooperation actions. The capacity of public procurement to serve as an example and the high volume of purchasing it entails undoubtedly make it a crucial instrument for promoting the intended objectives. Stimulating market flows between public administrations and cooperative networks can be a decisive factor in a new model of sustainable production and consumption. |
| --- | --- |

3.3.2

Cooperative public procurement
   (15). The progress made over recent years in the context of green public procurement and, more recently, in the adoption of ethical criteria in administrations' public procurement procedures have had a significant impact on the social and economic progress of sustainability and cooperation actions. The capacity of public procurement to serve as an example and the high volume of purchasing it entails undoubtedly make it a crucial instrument for promoting the intended objectives. Stimulating market flows between public administrations and cooperative networks can be a decisive factor in a new model of sustainable production and consumption.

| 3.3.3 | Quality labels
   (16). Quality labels are indirect tools for promoting marketed products, certifying their origin, characteristics and attributes, and in this case the added value of the social aspect of cooperative production ("cooperative label"). This brand image enhances the reputation of products and enables agricultural associations to move from being production-focused to market-focused. |
| --- | --- |

3.3.3

Quality labels
   (16). Quality labels are indirect tools for promoting marketed products, certifying their origin, characteristics and attributes, and in this case the added value of the social aspect of cooperative production ("cooperative label"). This brand image enhances the reputation of products and enables agricultural associations to move from being production-focused to market-focused.

| 3.3.4 | Transparency and information for consumers
   (17). Transparency, particularly with regard to quality and traceability, is a balancing factor in the value chain, in tandem with campaigns to make the public more aware of the purchasing decisions they make within a cooperative market. It leads to greater symmetry of information and coordinated action between production and consumption (necessary for the efficiency of a sustainability-based model), and links supply and demand, both temporally and geographically in the integration of the respective marketing processes. Consumer groups should also be prioritised, and channels leading to the concentration of final agri-food demand should be identified. |
| --- | --- |

3.3.4

Transparency and information for consumers
   (17). Transparency, particularly with regard to quality and traceability, is a balancing factor in the value chain, in tandem with campaigns to make the public more aware of the purchasing decisions they make within a cooperative market. It leads to greater symmetry of information and coordinated action between production and consumption (necessary for the efficiency of a sustainability-based model), and links supply and demand, both temporally and geographically in the integration of the respective marketing processes. Consumer groups should also be prioritised, and channels leading to the concentration of final agri-food demand should be identified.

| 3.3.5 | Education and training in social entrepreneurship and the cooperative movement
   (18). Although this is clearly a proactive instrument whose effect is only seen later, it is nevertheless vital in order to consolidate the changes taking place in the market. Learning and absorbing cooperative principles at school does not just foster a favourable attitude towards the cooperative system and towards cooperation as a source of confidence at an early stage in people's lives; it can also extend to the pupils' parents, encouraging them to adopt consumption patterns which are in harmony with the actions proposed. In this regard, fostering entrepreneurship amongst young people is particularly crucial, incentivising and stimulating the creation and consolidation of cooperatives, be it at the production, marketing or consumption stage. Knowledge, exchange and dissemination of good cooperative practices will undoubtedly contribute to all of this. |
| --- | --- |

3.3.5

Education and training in social entrepreneurship and the cooperative movement
   (18). Although this is clearly a proactive instrument whose effect is only seen later, it is nevertheless vital in order to consolidate the changes taking place in the market. Learning and absorbing cooperative principles at school does not just foster a favourable attitude towards the cooperative system and towards cooperation as a source of confidence at an early stage in people's lives; it can also extend to the pupils' parents, encouraging them to adopt consumption patterns which are in harmony with the actions proposed. In this regard, fostering entrepreneurship amongst young people is particularly crucial, incentivising and stimulating the creation and consolidation of cooperatives, be it at the production, marketing or consumption stage. Knowledge, exchange and dissemination of good cooperative practices will undoubtedly contribute to all of this.

| 3.3.6 | Differential tax treatment
   (19). Fairer taxation must gear consumption towards the efficient use of resources (20), taking more account of the content of each product in socio-environmental terms and the added social value of the cooperative approach. On the basis of a specific fiscal framework, tax incentives and compensatory aid are amongst the most direct and potentially effective instruments. As experience in various Member States has shown, the adoption of differential tax treatment promotes financial independence and autonomy but, like some of the initiatives proposed above, requires a prior impact assessment. |
| --- | --- |

3.3.6

Differential tax treatment
   (19). Fairer taxation must gear consumption towards the efficient use of resources (20), taking more account of the content of each product in socio-environmental terms and the added social value of the cooperative approach. On the basis of a specific fiscal framework, tax incentives and compensatory aid are amongst the most direct and potentially effective instruments. As experience in various Member States has shown, the adoption of differential tax treatment promotes financial independence and autonomy but, like some of the initiatives proposed above, requires a prior impact assessment.

| 3.3.7 | Use of technology. Technological progress and universal access to that technology are the best way to promote achievement of the objectives. In this regard, the following initiatives should be stressed: research and innovation in agri-food production, the creation of new marketing areas and distribution channels and, finally, high-quality certification, by awarding points for nutritional value, supply guarantees and other public benefits, and subtracting points for negative social, environmental and other external factors, so that criteria such as food safety and health, ecological and social footprints are taken into account and appreciated by consumers when it comes to prices and the corresponding production and distribution costs. This certification system would have to be implemented in conjunction with other elements such as smart telephony, specific IT applications and social networks. |
| --- | --- |

3.3.7

Use of technology. Technological progress and universal access to that technology are the best way to promote achievement of the objectives. In this regard, the following initiatives should be stressed: research and innovation in agri-food production, the creation of new marketing areas and distribution channels and, finally, high-quality certification, by awarding points for nutritional value, supply guarantees and other public benefits, and subtracting points for negative social, environmental and other external factors, so that criteria such as food safety and health, ecological and social footprints are taken into account and appreciated by consumers when it comes to prices and the corresponding production and distribution costs. This certification system would have to be implemented in conjunction with other elements such as smart telephony, specific IT applications and social networks.

3.4   Competitive advantages of the cooperative market

As well as the obvious benefits of a model based on economic and social sustainability and cooperation, the cooperative market offers a series of competitive advantages with implications for some extremely important aspects of EU policies in the following areas:

| 3.4.1 | Economic: stable and secure access to markets for farmers' products, sustainable financing, socially responsible investments, stimulation of the market, safeguarding of competition, protection of consumer rights and interests, etc. |
| --- | --- |

3.4.1

Economic: stable and secure access to markets for farmers' products, sustainable financing, socially responsible investments, stimulation of the market, safeguarding of competition, protection of consumer rights and interests, etc.

| 3.4.2 | Social: land planning, rural development and inclusion, cultural heritage and local and regional identity, food sovereignty and security, non-over-production and the accessibility of food, social traceability of products, the non-relocation of companies, the guarantee of decent wages and improving working conditions, social responsibility and responsible consumption, community health and healthy lifestyles, direct participation by citizens in the decisions made by the institutions representing them, etc. |
| --- | --- |

3.4.2

Social: land planning, rural development and inclusion, cultural heritage and local and regional identity, food sovereignty and security, non-over-production and the accessibility of food, social traceability of products, the non-relocation of companies, the guarantee of decent wages and improving working conditions, social responsibility and responsible consumption, community health and healthy lifestyles, direct participation by citizens in the decisions made by the institutions representing them, etc.

| 3.4.3 | Environmental: energy saving, conservation of ecosystems, ecological footprints, agroecology and permaculture, rational and responsible use of raw materials and natural resources, the life cycle of agri-food products, the creation of green jobs as a way of expanding the market, etc. |
| --- | --- |

3.4.3

Environmental: energy saving, conservation of ecosystems, ecological footprints, agroecology and permaculture, rational and responsible use of raw materials and natural resources, the life cycle of agri-food products, the creation of green jobs as a way of expanding the market, etc.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Commission Communication on the Single Market Act, COM (2011) 206 final.

1

(2)  Commission Communication on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan, COM(2008) 397 final.

2

(3)  EESC opinion A roadmap for moving to a competitive low carbon economy in 2050
  OJ C 376, 22.12.2011, pp. 110-116.

3

A roadmap for moving to a competitive low carbon economy in 2050

(4)  United Nations, General Assembly, Report of the Special Rapporteur on the right to food, Olivier de Schutter (A/HRC/19/59 – 26 December 2011).

4

Report of the Special Rapporteur on the right to food

(5)  President Nilsson's conclusions on the Food for Everyone conference.

5

Food for Everyone

(6)  EESC opinion A better functioning food supply chain in Europe (OJ C 48, 15.2.2011, p. 145).

6

A better functioning food supply chain in Europe

(7)  EESC opinion Cooperatives and restructuring
  OJ C 191, 29.6.2012, p. 24-30.

7

Cooperatives and restructuring

(8)  Commission Communication Integrated Product Policy, COM(2003) 302 final.

8

Integrated Product Policy

(9)  The integrated cooperative or collective interest cooperative society is emerging as a business formula, producing goods and services to meet a region's collective needs through the joint mobilisation of stakeholders.

9

integrated cooperative

collective interest cooperative society

(10)  Commission Communication The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future, COM(2010) 672 final.

10

The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future

(11)  The Common Agricultural Policy after 2013. Reaction of EU farmers and agri-cooperatives to the Commission's legislative proposals (COPA-COGECA, 2012).

11

(12)  Salcedo Aznal, Alejandro. Consumer society or consumer networks? Outline for a social analysis of today's consumer (2008).

12

Consumer society or consumer networks? Outline for a social analysis of today's consumer

(13)  Commission Communication on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan, COM(2008) 397 final.

13

(14)  EESC opinion The Community agricultural model: production quality and communication with consumers as factors of competitiveness
  OJ C 18, 19.1.2011, p. 5.

14

The Community agricultural model: production quality and communication with consumers as factors of competitiveness

(15)  Commission Communication A renewed EU strategy 2011-2014 for Corporate Social Responsibility, COM(2011) 681 final.

15

A renewed EU strategy 2011-2014 for Corporate Social Responsibility

(16)  Commission Communication The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future, COM(2010) 672 final.

16

The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future

(17)  Commission Communication on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan, COM(2008) 397 final.

17

Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan

(18)  Commission Communication Social Business Initiative: Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation, COM(2011) 682 final.

18

Social Business Initiative: Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation

(19)  EESC opinion Diverse forms of enterprise
  OJ C 318, 23.12.2009, pp. 22-28.

19

Diverse forms of enterprise

(20)  COM(2011) 571 final and opinion Promotion of sustainable production and consumption in the EU
  OJ C 191, 29.06.2012, p. 6.

20

Promotion of sustainable production and consumption in the EU

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/49 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/49

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Opinion of the European Economic and Social Committee on the ‘Revision of 1994 and 2005 EU aviation and airport guidelines’ (additional opinion)

2012/C 299/10

Rapporteur: Mr KRAWCZYK

Co-rapporteur: Mr WENNMACHER

On 14 July 2011, the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an additional opinion on the

Revision of 1994 and 2005 EU aviation and airport guidelines.

The Consultative Commission on Industrial Change, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 143 votes to 2 with 1 abstention.

1.   Conclusions

1.1   The European Commission envisages reviewing the 1994 Guidelines on the application of Articles 92 and 93 of the EC Treaty to state aids in the aviation sector, on the one hand, and the 2005 EU Guidelines on financing of airports and start-up aid to airlines departing from regional airports (further referred as Aviation Guidelines).

1.2   Since 2005 Member States have refrained from notifying the Commission of many instances in which airports or local communities did grant subsidies.

1.3   The EESC shares the view of major stakeholders, that review of the current Aviation Guidelines is absolutely necessary and in order to create a proper level playing field it has to be done without any delay. Development of regional airports is important for economic growth and territorial cohesion and requires clear rules governing state aid.

1.4   The EESC is of the opinion, that it is necessary to prepare a study, which will present the current state of state aid and similar practises as far as implementation of Aviation Guidelines is concerned. The study (apart from analysis of current practices in this field) should also provide information on the amount and type of aid granted, their impact on real economic development and their quantitative and qualitative impact on employment.

1.5   In the EESC's recommendations concerning revised Aviation Guidelines presented in para. 5 of this opinion the Committee:

| — | advocates the need for a standardised EU legal framework for the entire aviation sector, which prevents uncontrolled subsidy practices and ensures a level-playing field for all market participants also at the local level, |
| --- | --- |

—

advocates the need for a standardised EU legal framework for the entire aviation sector, which prevents uncontrolled subsidy practices and ensures a level-playing field for all market participants also at the local level,

| — | agrees, that a general principle, that private investment cannot be considered as State aid. At the same time, a public operator can act as a private investor if the investment is commercially justifiable, |
| --- | --- |

—

agrees, that a general principle, that private investment cannot be considered as State aid. At the same time, a public operator can act as a private investor if the investment is commercially justifiable,

| — | recommends, that state aid for investments in airport infrastructure and start-up aid for airlines should only be possible in strictly defined cases, and be limited according to the period of time and intensity, |
| --- | --- |

—

recommends, that state aid for investments in airport infrastructure and start-up aid for airlines should only be possible in strictly defined cases, and be limited according to the period of time and intensity,

| — | endorses need for full disclosure of the aid available to airports and carriers and the conditions under which aid could have been paid, |
| --- | --- |

—

endorses need for full disclosure of the aid available to airports and carriers and the conditions under which aid could have been paid,

| — | calls upon further stimulation of the social dialog and avoidance of social dumping in the sector, |
| --- | --- |

—

calls upon further stimulation of the social dialog and avoidance of social dumping in the sector,

| — | underlines importance of proper implementation of Guidelines; enforcement is of utmost value, |
| --- | --- |

—

underlines importance of proper implementation of Guidelines; enforcement is of utmost value,

| — | calls for a long-term policy as far as development or regional airports are concerned. Aviation guidelines can be enforced successfully only as far as clear policy priorities of regional airport development are agreed. |
| --- | --- |

—

calls for a long-term policy as far as development or regional airports are concerned. Aviation guidelines can be enforced successfully only as far as clear policy priorities of regional airport development are agreed.

2.   Introduction

2.1   In the past two decades, the European air transport industry has experienced a number of transformations, mainly due to market liberalisation and the subsequent creation of low-cost carriers. While the single aviation market has enabled access to a greater number of European citizens to air transport through the emergence of new airlines, new regional airports and lower fares, it has had a non-negligible impact on employment and labour relations in the sector.

2.2   In 1994, in the context of the liberalisation of the market for air transport services, the Commission adopted the first EU Aviation Guidelines, which contained provisions for assessing social and restructuring aid to airlines in order to provide a level playing field for air carriers. They were completed, in 2005, by guidelines on the public financing of airports and on the start up of airline services from regional airports.

2.3   The European Commission envisages reviewing the 1994 Guidelines on the application of Articles 92 and 93 of the EC Treaty to state aids in the aviation sector, on the one hand, and the 2005 EU Guidelines on financing of airports and start-up aid to airlines departing from regional airports, on the other hand.

2.4   According to a number of European "network" carriers (most of whom are members of the Association of European Airlines - AEA) they have been confronted in recent years with a new type of competition stemming from carriers able to derive substantive revenues from local communities and airports. AEA carriers did take the position that these subsidies were unlawful and constituted blatant cases of State aid having as a consequence a serious distortion of competition in the European Air Transport market.

2.5   According to European Low Fares Airline Association (ELFAA) increasing consolidation amongst network carriers with an emphasis on feeding their hubs, has resulted in fewer alternatives for regions and their airports, seeking to develop an increased range of direct point to point connections. In many cases, low-cost carriers (LCC) represent the only prospect of growth for regional airports in the European market. The recent EU enlargement has opened up new market opportunities and many of these markets rely heavily on the low fares business model to develop and sustain traffic flows. According to ELFAA these routes are socially and economically valuable in the context of European cohesion and regional development.

2.6   Since 2005 Member States have refrained from notifying the Commission of many instances in which airports or local communities did grant subsidies; the 2005 Aviation Guidelines have not steered the creation of national schemes defining precisely the conditions under which aids could be granted, and perhaps even worse, on those few cases that were notified and gave rise to a formal procedure from the Commission, decisions have been at best slow, leaving many unresolved cases. This contributed to the establishment of a certain impunity and laissez-faire.

2.7   The conception of the airport as an economic driver of economic development for the region has been fostered by the increasing direct (financial) disengagement of the State, transferring to regions and other local authorities the duty to supervise, manage and finance these essential infrastructures. Regional authorities more and more consider the airport as one of the major tools for developing the local economy.

2.8   The Commission has at the moment a significant number of complaints in the sector from the former flag carriers against the low-cost airlines, on the one hand, and from the latter against the former, on the other hand. Since 2005 the number of notifications to the Commission was rather low compared to the vast growth of regional airports in the EU.

2.9   The main results of the public consultation undertaken by the Commission provide for:

| — | Need for simplification and increase of transparency of guidelines, |
| --- | --- |

—

Need for simplification and increase of transparency of guidelines,

| — | Support for more enforcement of State aid rules to airlines and airports, |
| --- | --- |

—

Support for more enforcement of State aid rules to airlines and airports,

| — | New category of rules to avoid distortion of competition between airports located in the same catchment area, |
| --- | --- |

—

New category of rules to avoid distortion of competition between airports located in the same catchment area,

| — | More clarity and predictability for rules on investment aid (clear definitions of financial parameters). |
| --- | --- |

—

More clarity and predictability for rules on investment aid (clear definitions of financial parameters).

2.10   Thus the EESC shares the view of major stakeholders, that review of the current aviation guidelines is absolutely necessary and in order to create a proper level playing field it has to be done without any delay. Development of regional airports is important for economic growth and territorial cohesion and requires clear rules governing state aid.

2.11   The EESC is of the opinion, that it is necessary to prepare a study, which will present the current state of state aid and similar practises as far as implementation of Aviation Guidelines is concerned. In particular in order to evaluate to what extent current practice does or does not distort a level playing field among the airports as well as among the airlines, the study should provide detailed information on the amount and type of aid granted their impact on real economic development/efficiency and their quantitive and qualitative impact on employment.

2.12   The economic crisis in the world today and in particular growing budgetary pressures in the EU and Member States may challenge existing state aid policy for regional airport development. It is necessary to better understand to what extent the current economic model of regional airport functioning is sustainable in the longer term. As the current discussion on the MFF 2014–2020 shows, it is a great challenge to do more in the EU with less money available. This clearly applies also to the matter discussed in this opinion.

3.   The market

3.1   There are app. 460 airports used for commercial aviation in EU Member States. In 2010 app. 60 % of airports in EU served less than 1 million passengers.

3.2   The air transport market has evolved dramatically in recent years: LCC have developed new and comprehensive business models linked to regional airports and have gained substantial market shares. At the same time, the former national carriers have almost all undergone a restructuring process, consolidating further their presence in Europe.

3.3   In 2005, LCCs had 25 % of the intra-European market share, whilst in 2010 this had grown to 39 %. When only point-to-point traffic is included, this share rises to 43 %. From 2008 to 2010 traditional "network" airlines - members of AEA - have posted substantial losses on their intra-European operations, and despite their positive results on long-haul (EUR 1 bn in 2008, EUR 100 m in 2009 and EUR 1,1 bn in 2010) the overall EBIT was negative due to the negative weight of short-haul, intra-European routes.

3.4   According to ELFAA by 2020, based on current trends and airline fleet replacement plans, the share of low fares airlines is expected to rise to between 45 % and 53 % of intra-European air passenger journeys. For point-to-point journeys, the low fares market share is projected to rise to between 50 % and 60 %. LCCs have not been losing money in the latest crisis to the extent that the "network" carriers have.

3.5   LCCs are by far the predominant actors in the regional, point-to-point, operations. In the LCC category, three carriers have more than 52 % of that market, whilst the three biggest "network" carriers only represent 22 % of the internal network market. Combining both a) the increasing share of LCCs on intra-European routes, and b) the increasing share of regional, point-to-point, routes vs. the traditional hub-to-hub operations one can infer from that that there is today more on offer than there used to be, but that part of this increase on offer (namely on the point-to-point) is ensured by a restricted number of competitors.

3.6   With the exception of the major European hub airports and the largest regional airports, a large number of European regional airports cannot be considered as economically viable when taking into account the real cost of infrastructure. Many small regional airports cannot bear the costs for the infrastructure, financed by other available funds often at regional level. A large number of airports would simply have to close if they had to pay for the real cost of the infrastructure.

3.7   It is important to keep in mind that Europe is facing shortage of airport capacity in the coming years. The EUROCONTROL study "Challenges of growth" (2008) and a recent Long-Term Forecast (2010) stress the capacity shortage at European airports in light of the projected traffic growth by 2030 (16,9 million flights, 1.8 times the number of flights in 2009). According to these authoritative reports, despite a planned increase of capacity of 41 % in the European airport network by 2030, an alarming 10 % of all flights will not be accommodated due to insufficient airport capacity.

3.8   While external funding of the infrastructure is generally not a key issue for major airports, it is vital for many regional airports which do not have the economies of scales and the commercial revenues which could generate the necessary margins to finance their infrastructure.

3.9   A new point-to-point market is both an opportunity and a cause of uncertainty for certain regional airports due to a very volatile market. LCCs in particular are able to redeploy their aircraft and crews throughout Europe at very short notice, depending on the economic potential of a new route to an alternative airport. Stability and predictability of these airports' revenues is in question.

3.10   Start-up aid realised under the current Guidelines has resulted in an "investment race" between different regions to develop their regional airports very often also through usage of the EU funds. If a regional airport enters in financial difficulties the region claims further aid, using the arguments that these regional airports are under-utilised and represent a necessary cost to the local communities.

4.   Specific comments

4.1   The airline industry in long term is a very low profitable industry and it is already very competitive. In such environment even small subsidies may effect competition, thus there is a need to handle this problem with great care.

4.2   The major question is what kind of approach we need while preparing new Aviation Guidelines. There are at least several of them.

4.2.1   According to ELFAA unlocking the potential of regional airports is crucial to continuing the process of territorial cohesion and regional development in the EU, as well as removing congestion from the "hub" airports of the "network" airlines. Developing regional airports means more employment, greater opportunities for business in peripheral areas of the EU, lower emissions through direct region-to-region connections instead of indirect flights through hubs, and less ground transportation emissions through the use, by passengers, of their local airports. The growth of regional airports, according to ELFAA, must be encouraged by flexible State aid Guidelines which focus on the Market Economy Investor Principle (MEIP) rather than rigid rules which prevent growth where there is demand for growth.

4.2.2   According to AEA the new guidelines should aim to protect all operating carriers in the industry against discriminatory and unclear financial aids to airlines by regional airports or local communities. Such aid should be possible only in strictly defined cases and be limited according to the time period and intensity. Moreover such aid could be granted only on a stand alone basis with regard to the principles of transparency, equal treatment and non-discrimination between operators.

4.2.3   According to ACI EUROPE the guiding principle for the assessment of state aid measures should be the possible distortion of competition by an airport in terms of traffic volume.

4.2.3.1   Exemption of airports in category D (up to 1 million passengers): It is widely acknowledged that airports below a certain threshold are normally not commercially viable and may need public funding. In addition, these small airports often ensure the territorial connectivity of regions and conurbations and usually do not adversely affect trading conditions in the EU given their limited traffic volume. Therefore, according to ACI, the use of public funds for the development of new infrastructure and new routes should be allowed without prior notification. However, any public funding should end as soon as the threshold of one million passengers has been reached.

4.2.3.2   The public funding of infrastructure and the financing of start-up aid by airports above one million passengers must comply with a Private Investor Test (PIP) that is adapted to the specific needs of the airport sector.

4.3   The EESC supports the view presented by the Commission, that as far as the revision of general approach to state aid covered by guidelines is concerned, the following principles are to be endorsed:

| — | There should be no distortion to competition, |
| --- | --- |

—

There should be no distortion to competition,

| — | Through further enabling of regional air transport, development and accessibility of regions are to be improved, |
| --- | --- |

—

Through further enabling of regional air transport, development and accessibility of regions are to be improved,

| — | Duplication of unprofitable airports is to be avoided, |
| --- | --- |

—

Duplication of unprofitable airports is to be avoided,

| — | Creation and maintenance of overcapacity is to be avoided. |
| --- | --- |

—

Creation and maintenance of overcapacity is to be avoided.

4.4   Developments of airports able to cover their costs and more involvement of private investors it to be promoted, the EESC - on the other hand – understands and supports the need for public service obligation for air service of economic interest, especially connecting remote regions and islands

5.   Recommendations

5.1   The EESC advocates the need for a standardised EU legal framework for the entire aviation sector, which prevents uncontrolled subsidy practices and ensures a level-playing field for all market participants also at the local level.

5.2   As a general principle, private investment cannot be considered as State aid. At the same time, a public operator can act as a private investor if the investment is commercially justifiable.

5.3   The new Guidelines to be proposed by the Commission should aim to protect all carriers and airports against discriminatory, unclear and distorting financial aid by regional governments or airports. Public funding must not distort competition neither between airports nor airlines. Block exemptions for certain category of airports or airlines are not considered by the EESC to be necessary for enhancing regional development.

5.3.1   State aid for investments in airport infrastructure and start-up aid for airlines should only be possible in strictly defined cases, and be limited according to the period of time and intensity. Moreover, it should only be granted in exceptional circumstances and with due regard to the principles of transparency, equal treatment and non-discrimination.

5.3.2   Concerning transparency, the conditions under which public aid is available should be published for the public. There should be full disclosure of the aid available to airports and carriers and the conditions under which aid could have been paid.

5.3.3   The new Guidelines must be established through a clear and simple set of rules to achieve legal certainty for European aviation sector. The EESC wants to underline the importance of proper implementation of Guidelines; enforcement is of utmost value.

5.4   The new guidelines must take into account interest of employees and travellers. Considering human resources are an essential component of the quality of air transportation system, a sustainable civil aviation industry need to offer quality employment and good working conditions. In this order of ideas it is important to stimulate the social dialog and to avoid the social dumping in the sector.

5.5   The EESC calls for a long-term policy as far as development or regional airports are concerned. Aviation guidelines can be enforced successfully only as far as clear policy priorities of regional airports development are agreed. It shall be the task of the Commission to work out such political agenda to be prepared without any further delay.

5.6   The EESC calls Member States for strong support and commitment to preparation and implementation of new Guidelines. Notification must be submitted in the state aid cases.

5.7   The completion of an efficient co-modality between rail transport and air transport needs to be further studied and implemented to open up certain areas and to meet environmental requirements.

5.8   It is particularly relevant due to the allocation of the EU funds in the new MFF. Doing more for less budget requires clear priorities. Regional development is very important, but it should not further justify development of airports, where there is no possibility to create sufficient demand.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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III Preparatory acts

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

482nd plenary session held on 11 and 12 July 2012

| 4.10.2012 | EN | Official Journal of the European Union | C 299/54 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/54

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Opinion of the European Economic and Social Committee on ‘Restructuring and anticipation of change: what lessons from recent experience?’ (Green Paper)

COM(2012) 7 final

2012/C 299/11

Rapporteur: Mr PEZZINI

Co-rapporteur: Mr STUDENT

On 17 January 2012, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union (TFEU), on the green paper on

Restructuring and anticipation of change: what lessons from recent experience?

COM(2012) 7 final.

The Consultative Commission on Industrial Change (CCMI), which was responsible for preparing the Committee's work on the subject, adopted its opinion on 11 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 134 votes in favour with 7 abstentions.

1.   Conclusions and recommendations

| 1.1 | The European Economic and Social Committee would first point out that companies constitute, by definition, the key players in strategies for adapting the units operating on markets, and are therefore at the heart of any restructuring process. |
| --- | --- |

1.1

The European Economic and Social Committee would first point out that companies constitute, by definition, the key players in strategies for adapting the units operating on markets, and are therefore at the heart of any restructuring process.

| 1.2 | The Committee stresses the importance of the role the CCMI has played and continues to play in the area of industrial restructuring, as a prime forum for constructive dialogue and the development of ideas and recommendations for the Commission, the Council and the European Parliament. |
| --- | --- |

1.2

The Committee stresses the importance of the role the CCMI has played and continues to play in the area of industrial restructuring, as a prime forum for constructive dialogue and the development of ideas and recommendations for the Commission, the Council and the European Parliament.

| 1.3 | The Committee reaffirms that restructuring generally entails complex processes. Anticipating change means preparing companies and employees for new challenges ahead, while minimising the social impact of the changes, maximising the chances of success, creating a climate of mutual trust and being sure to involve the social partners and organised civil society. |
| --- | --- |

1.3

The Committee reaffirms that restructuring generally entails complex processes. Anticipating change means preparing companies and employees for new challenges ahead, while minimising the social impact of the changes, maximising the chances of success, creating a climate of mutual trust and being sure to involve the social partners and organised civil society.

| 1.4 | The EU's workers and companies are currently faced with:






  — | rapid changes in domestic and international reference markets; |
| --- | --- | --- |

1.4

The EU's workers and companies are currently faced with:

—

rapid changes in domestic and international reference markets;

| — | the emergence of new global partners; |
| --- | --- |

—

the emergence of new global partners;

| — | the introduction of new technologies that are accelerating obsolescence processes; |
| --- | --- |

—

the introduction of new technologies that are accelerating obsolescence processes;

| — | consumers that are increasingly conscious of their role in shifting consumption and investment onto a greener, more sustainable footing; |
| --- | --- |

—

consumers that are increasingly conscious of their role in shifting consumption and investment onto a greener, more sustainable footing;

| — | demographic trends that are accentuating the phenomenon of the ageing workforce; |
| --- | --- |

—

demographic trends that are accentuating the phenomenon of the ageing workforce;

| — | major changes in labour markets, accompanied by massive social dumping; and currently |
| --- | --- |

—

major changes in labour markets, accompanied by massive social dumping; and currently

| — | the continuing fallout from the economic and financial crisis and Europe's clear weakness on global markets. |
| --- | --- |

—

the continuing fallout from the economic and financial crisis and Europe's clear weakness on global markets.

| 1.5 | The Committee thus welcomes this green paper, which has come at an opportune moment. However, it hopes that following this discussion process practical and effective action will be taken, involving an integrated approach at all levels of production, consumption and services. This will require interaction and information exchange across all levels of the production and distribution chain, coupled with the exchange of best practice in the field and a timeframe of specific deadlines for implementing the guidelines, standards and reference frameworks built on the wealth of EU rules and common, shared values. |
| --- | --- |

1.5

The Committee thus welcomes this green paper, which has come at an opportune moment. However, it hopes that following this discussion process practical and effective action will be taken, involving an integrated approach at all levels of production, consumption and services. This will require interaction and information exchange across all levels of the production and distribution chain, coupled with the exchange of best practice in the field and a timeframe of specific deadlines for implementing the guidelines, standards and reference frameworks built on the wealth of EU rules and common, shared values.

| 1.6 | The Committee considers it of fundamental importance, when it comes to anticipation and restructuring, to enhance the role of the social partners, organised civil society and consumers at EU, national, regional, local and company levels, with the involvement of local leaders and knowledge and skills networks. |
| --- | --- |

1.6

The Committee considers it of fundamental importance, when it comes to anticipation and restructuring, to enhance the role of the social partners, organised civil society and consumers at EU, national, regional, local and company levels, with the involvement of local leaders and knowledge and skills networks.

| 1.7 | In the Committee's view, social dialogue, negotiation and participation are not only fundamental values of the European social model, but are also tools that promote and give real support to social cohesion, quality employment, job creation and the drive to boost innovation and competitiveness across Europe's economies. |
| --- | --- |

1.7

In the Committee's view, social dialogue, negotiation and participation are not only fundamental values of the European social model, but are also tools that promote and give real support to social cohesion, quality employment, job creation and the drive to boost innovation and competitiveness across Europe's economies.

| 1.8 | The Committee thinks that the EU's structural and cohesion policies as well as its innovation and research policies should be geared to proactive support in shaping the mechanisms for anticipating and accompanying restructuring into win-win systems for both workers and companies. |
| --- | --- |

1.8

The Committee thinks that the EU's structural and cohesion policies as well as its innovation and research policies should be geared to proactive support in shaping the mechanisms for anticipating and accompanying restructuring into win-win systems for both workers and companies.

| 1.9 | The Committee considers it essential that economic and social partners play a greater role in the Structural Fund monitoring bodies so as to ensure the success of European structural policy. |
| --- | --- |

1.9

The Committee considers it essential that economic and social partners play a greater role in the Structural Fund monitoring bodies so as to ensure the success of European structural policy.

| 1.10 | The Committee recommends that structural policy measures be closely interlinked and coordinated with those in support of research and innovation, and use investment and industrial policies to support the transition to a low-carbon European economy. |
| --- | --- |

1.10

The Committee recommends that structural policy measures be closely interlinked and coordinated with those in support of research and innovation, and use investment and industrial policies to support the transition to a low-carbon European economy.

| 1.11 | The Committee believes that EU education, training and lifelong learning programmes should be seen as key tools enabling public authorities and companies to proactively anticipate change, alongside the ongoing efforts of economic players – especially SMEs – and workers. |
| --- | --- |

1.11

The Committee believes that EU education, training and lifelong learning programmes should be seen as key tools enabling public authorities and companies to proactively anticipate change, alongside the ongoing efforts of economic players – especially SMEs – and workers.

| 1.12 | The Committee advocates closer coordination at EU level between Commission policies and services, agencies and the numerous observatories, so that companies that are restructuring receive clear, consistent support in their decision-making. In particular, suitable support and mentoring systems should be available to SMEs and micro businesses, which face obvious difficulties in planning ahead for restructuring. |
| --- | --- |

1.12

The Committee advocates closer coordination at EU level between Commission policies and services, agencies and the numerous observatories, so that companies that are restructuring receive clear, consistent support in their decision-making. In particular, suitable support and mentoring systems should be available to SMEs and micro businesses, which face obvious difficulties in planning ahead for restructuring.

| 1.13 | The Committee reaffirms the need for State aid supporting employment in businesses affected by globalisation to be based on conditions that guarantee free and fair competition. |
| --- | --- |

1.13

The Committee reaffirms the need for State aid supporting employment in businesses affected by globalisation to be based on conditions that guarantee free and fair competition.

| 1.14 | Finally, the Committee recommends bolstering EU policy supporting the development of participatory foresight exercises, both territorial and sectoral, with the aim of realising a shared, mutually acceptable vision, partly by making more of local factors, so as to generate more and better jobs within healthy and competitive businesses. |
| --- | --- |

1.14

Finally, the Committee recommends bolstering EU policy supporting the development of participatory foresight exercises, both territorial and sectoral, with the aim of realising a shared, mutually acceptable vision, partly by making more of local factors, so as to generate more and better jobs within healthy and competitive businesses.

| 1.15 | Taking account of demographic trends in Europe, the Committee attaches particular importance to an active policy on ageing and the "silver economy" and the need to adapt products and services to these new opportunities. |
| --- | --- |

1.15

Taking account of demographic trends in Europe, the Committee attaches particular importance to an active policy on ageing and the "silver economy" and the need to adapt products and services to these new opportunities.

2.   Introduction

| 2.1 | It will be some time yet before Europe's economy sees a recovery, before it emerges from the deepest recession in decades to hit Europe. The crisis is putting public finances and governments under severe pressure and is prompting company crises, rationalisation, restructuring and closures in the real economy with dramatic repercussions on unemployment rates. |
| --- | --- |

2.1

It will be some time yet before Europe's economy sees a recovery, before it emerges from the deepest recession in decades to hit Europe. The crisis is putting public finances and governments under severe pressure and is prompting company crises, rationalisation, restructuring and closures in the real economy with dramatic repercussions on unemployment rates.

| 2.2 | This restructuring entails complex, multi-faceted processes, and changes to business strategies with regard to company organisation, form, size and activities. |
| --- | --- |

2.2

This restructuring entails complex, multi-faceted processes, and changes to business strategies with regard to company organisation, form, size and activities.

| 2.2.1 | Multiple economic and operational objectives should be identified relating to the situation on the global markets and in the sectors in which businesses operate, primarily at sectoral level. |
| --- | --- |

2.2.1

Multiple economic and operational objectives should be identified relating to the situation on the global markets and in the sectors in which businesses operate, primarily at sectoral level.

| 2.3 | In practice, this process should involve anticipating employment possibilities in emerging sectors with a particular focus on SMEs, which have been hardest hit by the current crisis, while also taking due account of consumer interests and behaviour. |
| --- | --- |

2.3

In practice, this process should involve anticipating employment possibilities in emerging sectors with a particular focus on SMEs, which have been hardest hit by the current crisis, while also taking due account of consumer interests and behaviour.

| 2.4 | Anticipating change means not only preparing companies and employees for the challenge of future developments, but also carrying out the necessary restructuring to tackle those challenges, while minimising the social impact of the changes, ensuring stability and reducing the cost. Environmental protection and sustainable development should also be factored in: the European technology platforms and the studies they conduct, can outline tangible prospects for both workers and companies. |
| --- | --- |

2.4

Anticipating change means not only preparing companies and employees for the challenge of future developments, but also carrying out the necessary restructuring to tackle those challenges, while minimising the social impact of the changes, ensuring stability and reducing the cost. Environmental protection and sustainable development should also be factored in: the European technology platforms and the studies they conduct, can outline tangible prospects for both workers and companies.

| 2.5 | Over the past two decades, we have witnessed an acceleration of the phenomena of market repositioning, relocation, reorganisation and/or closure of production units, as well as mergers, acquisitions, and/or outsourcing of activities. However, over the last four years, Europe has been faced with an increasingly pressing need to strengthen the anticipatory nature of these processes, given the pace of change and the urgent need for restructuring that has arisen from the deepening economic, financial and market crises. Phenomena such as booming Internet sales figures and cross-border sales are also having an influence on the markets in the different countries. |
| --- | --- |

2.5

Over the past two decades, we have witnessed an acceleration of the phenomena of market repositioning, relocation, reorganisation and/or closure of production units, as well as mergers, acquisitions, and/or outsourcing of activities. However, over the last four years, Europe has been faced with an increasingly pressing need to strengthen the anticipatory nature of these processes, given the pace of change and the urgent need for restructuring that has arisen from the deepening economic, financial and market crises. Phenomena such as booming Internet sales figures and cross-border sales are also having an influence on the markets in the different countries.

| 2.6 | The economic and financial crisis has not only intensified restructuring processes at the various levels, but has also led to austerity measures and cuts in public expenditure, and consequently heavy job losses in the public sector, while also undermining the various safety nets for workers, local communities and companies in many countries. |
| --- | --- |

2.6

The economic and financial crisis has not only intensified restructuring processes at the various levels, but has also led to austerity measures and cuts in public expenditure, and consequently heavy job losses in the public sector, while also undermining the various safety nets for workers, local communities and companies in many countries.

| 2.7 | The Commission's objective in terms of restructuring is to help strengthen and disseminate the culture of anticipation and innovation in terms of the way restructuring is carried out: the EU shares responsibility with the Member States "for achieving the objectives defined in Article 3 of the Treaty on European Union" (Article 145 TFEU). |
| --- | --- |

2.7

The Commission's objective in terms of restructuring is to help strengthen and disseminate the culture of anticipation and innovation in terms of the way restructuring is carried out: the EU shares responsibility with the Member States "for achieving the objectives defined in Article 3 of the Treaty on European Union" (Article 145 TFEU).

| 2.8 | Back in 2005, in its communication on restructuring and employment, the Commission recognised the problems connected with the social costs of restructuring, not only for workers themselves, who experience growing uncertainty regarding their working conditions, but also for the various sectors of the economy. |
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2.8

Back in 2005, in its communication on restructuring and employment, the Commission recognised the problems connected with the social costs of restructuring, not only for workers themselves, who experience growing uncertainty regarding their working conditions, but also for the various sectors of the economy.

| 2.9 | Though restructuring is primarily governed by rules at national and regional levels, the EU has significant responsibility in terms of managing, supervising and accelerating these processes. It is required to supervise the proper functioning of the EU regulatory framework as regards both information and consultation, and the protection of workers (1) and to play an active role here, a role that derives essentially from the Europe 2020 strategy and the obligations laid down in the Treaty. |
| --- | --- |

2.9

Though restructuring is primarily governed by rules at national and regional levels, the EU has significant responsibility in terms of managing, supervising and accelerating these processes. It is required to supervise the proper functioning of the EU regulatory framework as regards both information and consultation, and the protection of workers (1) and to play an active role here, a role that derives essentially from the Europe 2020 strategy and the obligations laid down in the Treaty.

| 2.10 | If the EU wants to be successful in addressing the challenges posed by the financial and economic crisis, globalisation, climate change, demographic trends and growing inequalities arising from the social costs of austerity programmes, it needs to develop and step up proactive strategies for anticipating and managing restructuring, underpinned by a common set of values and practices consistent with the major socio-economic Treaty objectives. |
| --- | --- |

2.10

If the EU wants to be successful in addressing the challenges posed by the financial and economic crisis, globalisation, climate change, demographic trends and growing inequalities arising from the social costs of austerity programmes, it needs to develop and step up proactive strategies for anticipating and managing restructuring, underpinned by a common set of values and practices consistent with the major socio-economic Treaty objectives.

| 2.11 | Under the Europe 2020 integrated guidelines (adopted by the Council on 22/4/2010), the EU and the Member States should thus implement reforms aimed at "smart growth", driven by knowledge and innovation, with due regard to consumer needs and behaviour, and with a view to:






  — | promoting coordinated structural reforms that effectively contribute to growth and jobs and enhance the EU’s competitiveness in the global economy; |
| --- | --- | --- |

2.11

Under the Europe 2020 integrated guidelines (adopted by the Council on 22/4/2010), the EU and the Member States should thus implement reforms aimed at "smart growth", driven by knowledge and innovation, with due regard to consumer needs and behaviour, and with a view to:

—

promoting coordinated structural reforms that effectively contribute to growth and jobs and enhance the EU’s competitiveness in the global economy;

| — | ensuring the effective functioning of labour markets by investing in successful transitions, appropriate skills development, improving job quality and combating structural unemployment, long-term unemployment and inactivity; |
| --- | --- |

—

ensuring the effective functioning of labour markets by investing in successful transitions, appropriate skills development, improving job quality and combating structural unemployment, long-term unemployment and inactivity;

| — | improving the business environment and stimulating the creation of new businesses and jobs, especially in the green and silver economies; |
| --- | --- |

—

improving the business environment and stimulating the creation of new businesses and jobs, especially in the green and silver economies;

| — | improving the quality of education, ensuring access for all and fostering closer links between training, academia and the labour market; |
| --- | --- |

—

improving the quality of education, ensuring access for all and fostering closer links between training, academia and the labour market;

| — | promoting proactive best-practice models, that can anticipate corporate restructuring, necessary in a labour market in transition; |
| --- | --- |

—

promoting proactive best-practice models, that can anticipate corporate restructuring, necessary in a labour market in transition;

| — | improving the regulatory framework in order to promote innovation and knowledge transfer throughout the EU; |
| --- | --- |

—

improving the regulatory framework in order to promote innovation and knowledge transfer throughout the EU;

| — | encouraging entrepreneurship and helping to turn creative ideas into products, services and processes that can create quality jobs; |
| --- | --- |

—

encouraging entrepreneurship and helping to turn creative ideas into products, services and processes that can create quality jobs;

| — | fostering territorial, economic and social cohesion; and |
| --- | --- |

—

fostering territorial, economic and social cohesion; and

| — | addressing European and global societal challenges more efficiently. |
| --- | --- |

—

addressing European and global societal challenges more efficiently.

| 2.12 | With regard to support for corporate and sectoral restructuring, it is vital that companies have early-warning systems(see European Restructuring Monitor ERM) in place as a pre-condition for effective planning of restructuring processes, agreed upon by all stakeholders. This is partly to ensure proper retraining for workers, but also to ensure that sectoral and inter-sectoral networks are developed, that can manage change in an integrated way, with the help of professional guidelines that ensure high levels of employability. |
| --- | --- |

2.12

With regard to support for corporate and sectoral restructuring, it is vital that companies have early-warning systems(see European Restructuring Monitor ERM) in place as a pre-condition for effective planning of restructuring processes, agreed upon by all stakeholders. This is partly to ensure proper retraining for workers, but also to ensure that sectoral and inter-sectoral networks are developed, that can manage change in an integrated way, with the help of professional guidelines that ensure high levels of employability.

| 2.13 | On 18 April 2012, in Strasbourg, the Commission presented its new employment package – on which the Committee is to issue an opinion – which calls on Member States to bolster their domestic employment policies, and paves the way for reinforced coordination and monitoring of employment policies. |
| --- | --- |

2.13

On 18 April 2012, in Strasbourg, the Commission presented its new employment package – on which the Committee is to issue an opinion – which calls on Member States to bolster their domestic employment policies, and paves the way for reinforced coordination and monitoring of employment policies.

3.   Commission green paper

| 3.1 | The Commission has launched a public consultation on company restructuring and anticipating change, its aim being to "identify successful practices and policies in the field". |
| --- | --- |

3.1

The Commission has launched a public consultation on company restructuring and anticipating change, its aim being to "identify successful practices and policies in the field".

| 3.2 | The green paper sets out a series of questions on the lessons that can be learned from the crisis, on possible economic and industrial adaptation, on the capacity of companies and workers to adapt, on the role of local and regional administrations, on the role of vocational training in human resource management and on dialogue between socio-economic players. |
| --- | --- |

3.2

The green paper sets out a series of questions on the lessons that can be learned from the crisis, on possible economic and industrial adaptation, on the capacity of companies and workers to adapt, on the role of local and regional administrations, on the role of vocational training in human resource management and on dialogue between socio-economic players.

4.   General comments

| 4.1 | In the Committee's view, the green paper should be seen as following on from the 2005 communication on restructuring and employment, which set out to define the EU's role in anticipating and managing restructuring processes, in order to boost employment. |
| --- | --- |

4.1

In the Committee's view, the green paper should be seen as following on from the 2005 communication on restructuring and employment, which set out to define the EU's role in anticipating and managing restructuring processes, in order to boost employment.

| 4.2 | The Committee feels that the 2005 communication brought about positive developments at EU level in terms of promoting a European approach to anticipating and restructuring, including a number of high-level thematic conferences and expert-led seminars (restructuring fora), ESF initiatives, various comparative studies, toolboxes and guidelines, an obvious example being the Staff Working Document "Restructuring in Europe 2011". |
| --- | --- |

4.2

The Committee feels that the 2005 communication brought about positive developments at EU level in terms of promoting a European approach to anticipating and restructuring, including a number of high-level thematic conferences and expert-led seminars (restructuring fora), ESF initiatives, various comparative studies, toolboxes and guidelines, an obvious example being the Staff Working Document "Restructuring in Europe 2011".

| 4.3 | The Committee notes with concern that the green paper does not set out proposals for action with specific, tight deadlines, in response to the seriousness of the ongoing crisis, but rather takes the approach of a series of open questions, without specifying by when or how the measures would be implemented. Conversely, more robust measures have emerged from other instruments such as the employment package launched in May 2012, on which the Committee is to issue an opinion. |
| --- | --- |

4.3

The Committee notes with concern that the green paper does not set out proposals for action with specific, tight deadlines, in response to the seriousness of the ongoing crisis, but rather takes the approach of a series of open questions, without specifying by when or how the measures would be implemented. Conversely, more robust measures have emerged from other instruments such as the employment package launched in May 2012, on which the Committee is to issue an opinion.

| 4.4 | While companies constitute, by definition, the key players in strategies for adapting and positioning the units operating on markets and thus in the restructuring processes arising from these operational strategies, the following factors must also be taken into account:






  — | the backdrop of globalised economies, with the arrival of new countries with increasingly promising and competitive sectors on the European and global markets; |
| --- | --- | --- |

4.4

While companies constitute, by definition, the key players in strategies for adapting and positioning the units operating on markets and thus in the restructuring processes arising from these operational strategies, the following factors must also be taken into account:

—

the backdrop of globalised economies, with the arrival of new countries with increasingly promising and competitive sectors on the European and global markets;

| — | the specific features of individual countries within and outside the EU's borders; |
| --- | --- |

—

the specific features of individual countries within and outside the EU's borders;

| — | the multifaceted framework of EU reference policies, which directly influences the functioning and choices of companies, in terms of both the rules applicable and strategic and operational opportunities; |
| --- | --- |

—

the multifaceted framework of EU reference policies, which directly influences the functioning and choices of companies, in terms of both the rules applicable and strategic and operational opportunities;

| — | the national/regional framework, which manages the technical and operational context in which companies and employees operate; |
| --- | --- |

—

the national/regional framework, which manages the technical and operational context in which companies and employees operate;

| — | the territorial framework in which restructuring operations and processes for anticipating them take place, through coordination between outside stakeholders and companies, and in which guidance and support mechanisms are put into practice, especially for SMEs; and |
| --- | --- |

—

the territorial framework in which restructuring operations and processes for anticipating them take place, through coordination between outside stakeholders and companies, and in which guidance and support mechanisms are put into practice, especially for SMEs; and

| — | the framework of social dialogue and collective bargaining and the development of the role of the social partners and bodies representing companies, which are playing a more crucial role than ever in adapting production, work organisation and working conditions to fast-changing circumstances during the crisis, relying on good social partnerships. |
| --- | --- |

—

the framework of social dialogue and collective bargaining and the development of the role of the social partners and bodies representing companies, which are playing a more crucial role than ever in adapting production, work organisation and working conditions to fast-changing circumstances during the crisis, relying on good social partnerships.

| 4.5 | At EU level, the Committee reiterates that in order to carry a development strategy through (2), the social partners of organised civil society as a whole should work towards developing Territorial Social Responsibility (TSR) with a view to implementing a coordinated set of strategies, including:






  — | a resilience and survival strategy making it possible to operate in mature markets through better specialisation in the same market, with cost cutting, or strong diversification into contiguous sectors; |
| --- | --- | --- |

4.5

At EU level, the Committee reiterates that in order to carry a development strategy through (2), the social partners of organised civil society as a whole should work towards developing Territorial Social Responsibility (TSR) with a view to implementing a coordinated set of strategies, including:

—

a resilience and survival strategy making it possible to operate in mature markets through better specialisation in the same market, with cost cutting, or strong diversification into contiguous sectors;

| — | product and service process innovation strategies including market and technology change, with new materials leading to new products; |
| --- | --- |

—

product and service process innovation strategies including market and technology change, with new materials leading to new products;

| — | new initiatives by means of foresight evaluations, on new expanding products and services (such as lead markets), towards which new investment should be channelled; |
| --- | --- |

—

new initiatives by means of foresight evaluations, on new expanding products and services (such as lead markets), towards which new investment should be channelled;

| — | local marketing that emphasises excellence through agreements with research centres in order to increase technological cross-pollination; |
| --- | --- |

—

local marketing that emphasises excellence through agreements with research centres in order to increase technological cross-pollination;

| — | financial support through development funds, including through loan guarantees under the European Investment Fund, but also the Structural Funds; |
| --- | --- |

—

financial support through development funds, including through loan guarantees under the European Investment Fund, but also the Structural Funds;

| — | as regards credit, in terms of payment deferrals for micro and small businesses, primarily in order to safeguard employment levels; |
| --- | --- |

—

as regards credit, in terms of payment deferrals for micro and small businesses, primarily in order to safeguard employment levels;

| — | short-term debt consolidation to enable micro and small businesses to focus on production, marketing and after-sales services; |
| --- | --- |

—

short-term debt consolidation to enable micro and small businesses to focus on production, marketing and after-sales services;

| — | support for an innovative services sector (green economy), and personal services (silver economy), by taking advantage of innovative training opportunities under the European Social Fund; |
| --- | --- |

—

support for an innovative services sector (green economy), and personal services (silver economy), by taking advantage of innovative training opportunities under the European Social Fund;

| — | development of high-standard personal services in part by strengthening the social and health care system (3); |
| --- | --- |

—

development of high-standard personal services in part by strengthening the social and health care system (3);

| — | infrastructure policies, contributing to more innovative choices for a low-carbon economy; |
| --- | --- |

—

infrastructure policies, contributing to more innovative choices for a low-carbon economy;

| — | stepping up energy efficiency and environmental criteria especially in public procurement procedures; |
| --- | --- |

—

stepping up energy efficiency and environmental criteria especially in public procurement procedures;

| — | enhanced access to information; and |
| --- | --- |

—

enhanced access to information; and

| — | equipping regions with smart specialisation strategies, involving organised civil society and all socio-economic players. |
| --- | --- |

—

equipping regions with smart specialisation strategies, involving organised civil society and all socio-economic players.

| 4.6 | The Committee thinks that the EU's structural and cohesion policies as well as its innovation and research policies should be geared to proactive support in shaping mechanisms for anticipating and accompanying restructuring into win-win systems for both workers and companies. The Structural Funds, and in particular the European Social Fund, the European Regional Development Fund and the European Globalisation Adjustment Fund, could play a significant role in enhancing the employability of workers and minimising the social impact of redundancies. |
| --- | --- |

4.6

The Committee thinks that the EU's structural and cohesion policies as well as its innovation and research policies should be geared to proactive support in shaping mechanisms for anticipating and accompanying restructuring into win-win systems for both workers and companies. The Structural Funds, and in particular the European Social Fund, the European Regional Development Fund and the European Globalisation Adjustment Fund, could play a significant role in enhancing the employability of workers and minimising the social impact of redundancies.

| 4.7 | The Committee considers it essential that the economic and social partners and organised civil society players play a greater role in the Structural Fund partnership and monitoring bodies, and emphasises that the success of European structural policy hinges on the specific skills of the relevant players based in a given area. |
| --- | --- |

4.7

The Committee considers it essential that the economic and social partners and organised civil society players play a greater role in the Structural Fund partnership and monitoring bodies, and emphasises that the success of European structural policy hinges on the specific skills of the relevant players based in a given area.

| 4.8 | In particular, the Committee attaches importance to the integration of restructuring policies and industrial policies geared towards the transition to a low-carbon European economy, with due regard for climate and environmental requirements, and with a view to developing and adequately funding new green jobs and skills, as the Committee has emphasised in previous opinions (4). |
| --- | --- |

4.8

In particular, the Committee attaches importance to the integration of restructuring policies and industrial policies geared towards the transition to a low-carbon European economy, with due regard for climate and environmental requirements, and with a view to developing and adequately funding new green jobs and skills, as the Committee has emphasised in previous opinions (4).

| 4.8.1 | With regard, inter alia, to the designation of 2012 as the European Year for Active Ageing, the Committee stresses the importance of developing skills in the services delivered by NGOs, the social economy and companies, in order to foster healthy, active and dignified ageing, and develop products and services that meet the needs of these consumers (5). |
| --- | --- |

4.8.1

With regard, inter alia, to the designation of 2012 as the European Year for Active Ageing, the Committee stresses the importance of developing skills in the services delivered by NGOs, the social economy and companies, in order to foster healthy, active and dignified ageing, and develop products and services that meet the needs of these consumers (5).

| 4.9 | The Committee also believes that EU education, training and lifelong learning programmes should be seen as key tools for proactively anticipating change, alongside the ongoing efforts of companies and workers: As mentioned by Businesseurope "72 % of companies in the EU check the need for training of their staff in a systematic way. 32 % of workers in the EU participated in training financed by their employers in 2010". |
| --- | --- |

4.9

The Committee also believes that EU education, training and lifelong learning programmes should be seen as key tools for proactively anticipating change, alongside the ongoing efforts of companies and workers: As mentioned by Businesseurope "72 % of companies in the EU check the need for training of their staff in a systematic way. 32 % of workers in the EU participated in training financed by their employers in 2010".

| 4.10 | As a social response to the crisis, the national stimulus packages, and the proposals so far adopted have been inadequate. Insufficient consideration has been given to the vital need for job creation and the necessary measures to boost demand (such as better coordinated fiscal stimulus packages and wage policies). |
| --- | --- |

4.10

As a social response to the crisis, the national stimulus packages, and the proposals so far adopted have been inadequate. Insufficient consideration has been given to the vital need for job creation and the necessary measures to boost demand (such as better coordinated fiscal stimulus packages and wage policies).

| 4.10.1 | State aid and Structural funding to support employment in businesses affected by globalisation and the credit crisis should be based on assurances that such aid does not have the effect of hampering free competition. Efforts should be made, above all, to sustain employment levels and collective agreements should be respected. For instance, Developments in the Netherlands, where "Self-employed without staff" models work extremely well, must be considered. Through this system, the unemployed get a chance to make their expertise available and create their own jobs. |
| --- | --- |

4.10.1

State aid and Structural funding to support employment in businesses affected by globalisation and the credit crisis should be based on assurances that such aid does not have the effect of hampering free competition. Efforts should be made, above all, to sustain employment levels and collective agreements should be respected. For instance, Developments in the Netherlands, where "Self-employed without staff" models work extremely well, must be considered. Through this system, the unemployed get a chance to make their expertise available and create their own jobs.

| 4.11 | The Committee stresses the need for closer coordination at EU level between policies and Commission services, so that clear consistent support is given to the choices of companies that are restructuring:






  1. | European policies on employment and training, research and innovation, enterprise and industry, energy and the environment, the green economy and ICT, as well as trade and foreign policy should all present a clear, shared vision to the management of European companies and to workers, to support them in the choices they make regarding adjustments to strategies and skills. |
| --- | --- | --- |

4.11

The Committee stresses the need for closer coordination at EU level between policies and Commission services, so that clear consistent support is given to the choices of companies that are restructuring:

1.

European policies on employment and training, research and innovation, enterprise and industry, energy and the environment, the green economy and ICT, as well as trade and foreign policy should all present a clear, shared vision to the management of European companies and to workers, to support them in the choices they make regarding adjustments to strategies and skills.

| 2. | EU agencies, such as Cedefop in Thessaloniki and Eurofound in Dublin, observatories, such as the European Observatory for SMEs and the European Monitoring Centre on Change (EMCC), Joint Research Centre institutes, such as the IPTS in Seville and foresight activities under the Science in Society heading of the FP7 RTD, should all seek convergence in their activities and find common ground with a view to providing clear and accessible frameworks for change, for both companies and workers. |
| --- | --- |

2.

EU agencies, such as Cedefop in Thessaloniki and Eurofound in Dublin, observatories, such as the European Observatory for SMEs and the European Monitoring Centre on Change (EMCC), Joint Research Centre institutes, such as the IPTS in Seville and foresight activities under the Science in Society heading of the FP7 RTD, should all seek convergence in their activities and find common ground with a view to providing clear and accessible frameworks for change, for both companies and workers.

| 4.12 | The Committee considers it of fundamental importance to enhance the role of the social partners and organised civil society at all levels: social dialogue, negotiation and participation are not only fundamental values of the European social model – which have always been endorsed by Committee – but are also tools that support and promote successful social cohesion, quality employment, the creation of jobs and the drive to boost innovation and competitiveness across Europe's economies. |
| --- | --- |

4.12

The Committee considers it of fundamental importance to enhance the role of the social partners and organised civil society at all levels: social dialogue, negotiation and participation are not only fundamental values of the European social model – which have always been endorsed by Committee – but are also tools that support and promote successful social cohesion, quality employment, the creation of jobs and the drive to boost innovation and competitiveness across Europe's economies.

| 4.13 | In this context, the Committee stresses the role the CCMI plays as a prime forum for constructive dialogue and the development of ideas and recommendations, thanks to the experience it has succeeded in building up since the ECSC Treaty. |
| --- | --- |

4.13

In this context, the Committee stresses the role the CCMI plays as a prime forum for constructive dialogue and the development of ideas and recommendations, thanks to the experience it has succeeded in building up since the ECSC Treaty.

| 4.14 | As has been shown by many studies and best practice analyses, at both EU and national levels, relationships of trust among the social partners and effective social dialogue are fundamental prerequisites for anticipating and managing change in the best possible way. |
| --- | --- |

4.14

As has been shown by many studies and best practice analyses, at both EU and national levels, relationships of trust among the social partners and effective social dialogue are fundamental prerequisites for anticipating and managing change in the best possible way.

| 4.15 | In particular, the Committee believes that dialogue, consultation and negotiation should be the cornerstones of reform and flexicurity pathways. On the one hand, framework conditions need to be established to enable companies – with due regard for different national circumstances – to adapt with speed and flexibility to innovation, markets and user/consumer requirement; on the other hand, the adaptability and professional development of workers must be supported and facilitated. |
| --- | --- |

4.15

In particular, the Committee believes that dialogue, consultation and negotiation should be the cornerstones of reform and flexicurity pathways. On the one hand, framework conditions need to be established to enable companies – with due regard for different national circumstances – to adapt with speed and flexibility to innovation, markets and user/consumer requirement; on the other hand, the adaptability and professional development of workers must be supported and facilitated.

| 4.16 | Moreover, as the Committee has previously pointed out, "flexicurity can only work if employees are properly trained. There is a strong link between new skills and the creation of new jobs.""The EESC considers that measures enhancing the security side (in the broadest sense) of flexicurity must currently be the top priority." The aim should be stable employment. |
| --- | --- |

4.16

Moreover, as the Committee has previously pointed out, "flexicurity can only work if employees are properly trained. There is a strong link between new skills and the creation of new jobs.""The EESC considers that measures enhancing the security side (in the broadest sense) of flexicurity must currently be the top priority." The aim should be stable employment.

| 4.17 | The Committee also deems it important for public authorities, education and training bodies and companies to combine forces to enhance the range of jobs and training available, by developing new, versatile professional profiles and skills and supporting lifelong learning. |
| --- | --- |

4.17

The Committee also deems it important for public authorities, education and training bodies and companies to combine forces to enhance the range of jobs and training available, by developing new, versatile professional profiles and skills and supporting lifelong learning.

| 4.18 | In this context, the Committee emphasises the fundamental importance of mechanisms to secure access to education and lifelong training, designed to meet needs in terms of new job profiles and qualifications, especially for young people, in line with the vision outlined in the Agenda for New Skills and Jobs, which is the subject of another EESC opinion (6). |
| --- | --- |

4.18

In this context, the Committee emphasises the fundamental importance of mechanisms to secure access to education and lifelong training, designed to meet needs in terms of new job profiles and qualifications, especially for young people, in line with the vision outlined in the Agenda for New Skills and Jobs, which is the subject of another EESC opinion (6).

| 4.19 | The Committee would underline the importance of closer cooperation between stakeholders at local level, given that, especially at that level "a positive attitude to change and the existence of high-quality social dialogue in a climate of confidence are important factors for preventing or limiting the harmful social consequences". |
| --- | --- |

4.19

The Committee would underline the importance of closer cooperation between stakeholders at local level, given that, especially at that level "a positive attitude to change and the existence of high-quality social dialogue in a climate of confidence are important factors for preventing or limiting the harmful social consequences".

| 4.20 | The Committee believes that SMEs merit particular attention; appropriate measures should be made available to them by public and private bodies such as employers' organisations and trade associations, chambers of commerce, industry and crafts and other bodies, especially at local and regional levels, with preferential access to credit and to training, as well as suitable measures for cutting red tape. |
| --- | --- |

4.20

The Committee believes that SMEs merit particular attention; appropriate measures should be made available to them by public and private bodies such as employers' organisations and trade associations, chambers of commerce, industry and crafts and other bodies, especially at local and regional levels, with preferential access to credit and to training, as well as suitable measures for cutting red tape.

| 4.21 | Further consultations and policymaking on anticipation and restructuring should be based on the findings from over seven years of analysis, studies and reports carried out at EU level. |
| --- | --- |

4.21

Further consultations and policymaking on anticipation and restructuring should be based on the findings from over seven years of analysis, studies and reports carried out at EU level.

| 4.22 | While in the past, the focus was clearly on analysis and the exchange of information, best practice (7) and innovative experience, in future, the EU should concentrate mainly on practical measures, i.e. on development and growth, and foster the implementation of common guidelines, standards and reference frameworks built on the wealth of EU rules and common values. |
| --- | --- |

4.22

While in the past, the focus was clearly on analysis and the exchange of information, best practice (7) and innovative experience, in future, the EU should concentrate mainly on practical measures, i.e. on development and growth, and foster the implementation of common guidelines, standards and reference frameworks built on the wealth of EU rules and common values.

| 4.23 | Last but not least, the Committee stresses the importance of the human dimension: the people – and families – who are the victims of sectoral and corporate restructuring, are often put through human dramas that are not always given due consideration. Psychological and social support measures should be provided for, beyond the necessary recovery in investment and return to growth and sustainable job creation. |
| --- | --- |

4.23

Last but not least, the Committee stresses the importance of the human dimension: the people – and families – who are the victims of sectoral and corporate restructuring, are often put through human dramas that are not always given due consideration. Psychological and social support measures should be provided for, beyond the necessary recovery in investment and return to growth and sustainable job creation.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  European Works Council Directive 2009/38/EC, OJ 2009, L 122; Directive 2002/14/EC, OJ 2002, L 80; Directive 2001/23/EC, OJ 2001, L 82; Directive 98/59/EC, OJ 1998, L 225; Council Regulation (EC) No 1346/2000, OJ 2000, L 160.

1

(2)  EESC opinion on The impact of the global crisis on the main European manufacturing and services sectors, OJ 2009, C 318.

2

The impact of the global crisis on the main European manufacturing and services sectors

(3)  See the e-Health lead market (COM(2007) 860).

3

(4)  EESC Opinion on Promoting sustainable green jobs for the EU energy and climate change package, OJ 2011, C 44.

4

Promoting sustainable green jobs for the EU energy and climate change package

(5)  EESC Opinion on the ‘Proposal for a decision of the European Parliament and of the Council on the European Year for Active Ageing (2012)’, OJ 2011, C 51.

5

(6)  EESC Opinion on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - An Agenda for new skills and jobs: A European contribution towards full employment, OJ 2011, C 318.

6

(7)  Best practice: the restructuring toolbox http://www.evta.net/restructuringtoolbox/toolbox/index.html. The project Going local to respond employment challenges http://www.evta.net/going_local/catalogue/index.html: aims: carrying out regional actions, actions to ensure policies and services that anticipate company crises; setting up a community of actors and practices aimed at establishing permanent comparative assessment in the training institutions coming under this project.

7

Going local to respond employment challenges

anticipate company crises

permanent comparative assessment

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/60 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/60

---

Opinion of the European Economic and Social Committee on the ‘Green Paper on the feasibility of introducing stability bonds’

COM(2011) 818 final

2012/C 299/12

Rapporteur: Mr DANTIN

On 23 November 2011, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Green Paper on the feasibility of introducing stability bonds

COM(2011) 818 final.

The Section for Economic and Monetary Union and Economic and Social Cohesion, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 13 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 135 votes to 33 with 25 abstentions.

1.   Conclusions and recommendations

1.1   In order to resolve the current crisis, avoid a prolonged recession and create the conditions for a return to growth and more jobs, more Europe is needed, not less. This requires a strong determination on the part of the European Commission to reaffirm and implement the
  Community method. From this point of view, the Green Paper is welcome.

1.2   Beyond this, however, the Commission must fully exercise its right of initiative with regard to all the parameters and frame proposals that match the scale of the current crisis instead of intergovernmental sticking-plasters.

1.3   More Europe: a new Europe must combine solidarity, responsibility and shared confidence. This confidence will essentially stem from the symmetrical and balanced economic governance of efficient and indispensable budgetary and fiscal harmonisation. More Europe to guarantee budgetary responsibility and integration, more Europe to pool the risks stemming from sovereign debt, restore long-term creditworthiness, facilitate and implement structural reforms and to mobilise investment for growth, competitiveness and jobs throughout the EU in order to achieve a social Europe and well-being for all.

1.4   Therefore the Committee wholeheartedly welcomes the publication of the Green Paper on Stability Bonds. Substantively, it is a logical part of an increasingly integrated European Union equipped with a single market and a European capital market, and represents a necessary addition to the existing common monetary policy in the euro area. At the same time, such euro-bonds could generate confidence among potential investors and thus stabilise demand for State bonds and lower interest rates.

1.5   However, the EESC believes that the risk of moral hazard and its possible practical manifestations as described in the Green Paper are debatable and should first be subject to an in-depth analysis before coming to conclusions which may be questionable. If the argument put forward by the Green Paper were correct, that the slackening of market discipline as a result of the introduction of a single interest rate will cause an irresponsible rise in public spending and an increase in budget deficits, such a trend should have been noted following the euro's introduction. However, this was not the case.

1.6   The EESC shares the Commission's view that Stability Bonds must have a high credit quality to be accepted by investors and the Member States of the euro area. However, owing to hesitant and tardy political steps, the uncertainty is now so great that even euro-bonds with joint and several guarantees would probably not receive the same reception tomorrow as they would have done a few months ago.

1.6.1   The EESC therefore believes it is vital to give the ECB a bigger role in solving the crisis – for example by granting a banking license to the EFSF or to the ESM.

1.7   As regards the various "options for issuance of Stability Bonds", the Committee believes that approach No. 2 which involves "partial substitution of Stability Bond issuance for national issuance, with joint and several guarantees" is the most practicable and overall the most acceptable option.

1.8   Obviously, as underlined by the president of the European Council, stability bonds can only be issued "as long as a robust framework for budgetary discipline and competitiveness is in place to avoid moral hazard and foster responsibility and compliance". As he notes: "The process towards the issuance of common debt should be criteria-based and phased, whereby progress in the pooling of decisions on budgets would be accompanied with commensurate steps towards the pooling of risks" (1). The Committee agrees that the "building blocks" of this process should include integrated frameworks for the financial sector, budgetary matters and economic policy. These should be accompanied by a coherent and complementary framework of democratic legitimacy and responsibility at European level, without exacerbating austerity. The EESC proposes that the risk of moral hazard should be assessed closely by the Commission so that appropriate solutions can be found within this architecture.

2.   Introduction

2.1   The Green Paper under consideration seeks to launch a broad public consultation on the concept of Stability Bonds
   (2), involving all stakeholders and interested parties. This consultation will serve as a basis for European Commission proposals for a policy in this area.

2.2   The intensification of the euro-area sovereign debt crisis has triggered a wider debate on the feasibility of common issuance. The idea has often been promoted that this could be an effective tool to respond to the liquidity constraints in several Member States of the euro area. Against this background, the European Parliament requested the Commission to investigate the feasibility of common issuance in the context of adopting the legislative package on euro-area economic governance, underlining that the common issuance of Stability Bonds would also require a further move towards a common economic and fiscal policy (3).

2.3   For its part, the European Economic and Social Committee has examined this issue in several opinions and set forth its views in particular in the own-initiative opinion on Growth and sovereign debt in the EU: two innovative proposals
   (4).

2.4   The EESC welcomes the publication of the Green Paper, the public debate it will create and the approach adopted, which will ultimately result in the Commission making proposals. The Commission is, in this area, at last reviving the Community method.

3.   The gist of the Green Paper

3.1   After describing the background to the Green Paper, the document examines and explains several aspects which underpin and justify the proposals it sets forth.

3.1.1   Reasons according to the Green Paper

3.1.1.1   The prospect of Stability Bonds could potentially alleviate the current sovereign debt crisis, as the high-yield Member States could benefit from the stronger creditworthiness of the low-yield Member States. However, for any such effect to be durable, a roadmap towards common bonds would have to be accompanied by parallel commitments to stronger economic governance, which would guarantee that the necessary budgetary and structural adjustment to assure sustainability of public finances would be undertaken and consequently avoid the risk of moral hazard.

3.1.1.2   Stability Bonds would make the euro-area financial system more resilient to future adverse shocks and so reinforce financial stability. Stability Bonds would provide all participating Member States with more secure access to refinancing, preventing a sudden loss of market access. At the same time, the banking system would benefit from the availability of Stability Bonds.

3.1.1.3   Stability Bonds would enable the effects of euro-area monetary policy to be felt more quickly, while promoting efficiency in the euro-area sovereign bond market and in the broader euro-area financial system. They would also facilitate portfolio investment in the euro and foster a more balanced global financial system.

3.1.2   Preconditions

After noting that Stability Bonds provide substantial benefits in terms of financial stability and economic efficiency, the Green Paper then highlights their potential downsides.

3.1.2.1   The Commission proposal mentions the following types of moral hazard:

| — | with some forms of Stability Bonds, the obligation to maintain budgetary discipline would be reduced or lost altogether as euro-area Member States would pool credit risk for some or all of their public debt, implying a risk of moral hazard, since the credit risk stemming from individual lack of fiscal discipline would be shared by all participants; as the issuance of Stability Bonds may weaken market discipline, substantial changes in the framework for economic governance in the euro area would be required which would have implications for budgetary sovereignty; |
| --- | --- |

—

with some forms of Stability Bonds, the obligation to maintain budgetary discipline would be reduced or lost altogether as euro-area Member States would pool credit risk for some or all of their public debt, implying a risk of moral hazard, since the credit risk stemming from individual lack of fiscal discipline would be shared by all participants; as the issuance of Stability Bonds may weaken market discipline, substantial changes in the framework for economic governance in the euro area would be required which would have implications for budgetary sovereignty;

| — | Stability Bonds would need to have high credit quality to be accepted by investors; |
| --- | --- |

—

Stability Bonds would need to have high credit quality to be accepted by investors;

| — | achieving a high credit quality will also be important to ensure the acceptance of Stability Bonds by all euro-area Member States; |
| --- | --- |

—

achieving a high credit quality will also be important to ensure the acceptance of Stability Bonds by all euro-area Member States;

| — | the credit rating for Stability Bonds would primarily depend on the credit quality of the participating Member
  States and the underlying guarantee structure. |
| --- | --- |

—

the credit rating for Stability Bonds would primarily depend on the credit quality of the participating Member

States and the underlying guarantee structure.

3.1.2.2   Consistency with the EU Treaty would be essential to ensure the successful introduction of the Stability Bond. Some options could be at odds with the provisions of the TFEU and might require changes to the treaty, in particular Article 125, which prohibits Member States from assuming liabilities of another Member State. Issuance of Stability Bonds under joint and several guarantees would a priori lead to a situation where the prohibition on bailing out would be breached. On the other hand, issuance of Stability Bonds under several but not joint guarantees would be possible within the existing Treaty provisions.

3.2   Options for issuance of Stability Bonds

3.2.1   In addition to the numerous options proposed in the public debate on introducing Stability Bonds, the Green Paper puts forwards three proposals, based on the degree of substitution of national issuance (full or partial) and the nature of the underlying guarantee (joint and several or several) implied. The three broad approaches are:

| 3.2.1.1 | Approach No 1: Full substitution of Stability Bond issuance for national issuance, with joint and several guarantees
  Under this approach, euro-area government financing would be fully covered by the issuance of Stability Bonds with national issuance discontinued. The credit rating of the largest euro area Member States would very likely be crucial in determining the rating of Stability Bonds, suggesting that a stability bond issued today could have a high credit rating. This approach would be most effective in delivering the benefits of Stability Bond issuance, but at the same time this approach would involve the greatest risk of moral hazard. It would require a very strong framework to ensure budgetary discipline, economic competiveness and reduction of macroeconomic imbalances at national level. |
| --- | --- |

3.2.1.1

Approach No 1: Full substitution of Stability Bond issuance for national issuance, with joint and several guarantees

Under this approach, euro-area government financing would be fully covered by the issuance of Stability Bonds with national issuance discontinued. The credit rating of the largest euro area Member States would very likely be crucial in determining the rating of Stability Bonds, suggesting that a stability bond issued today could have a high credit rating. This approach would be most effective in delivering the benefits of Stability Bond issuance, but at the same time this approach would involve the greatest risk of moral hazard. It would require a very strong framework to ensure budgetary discipline, economic competiveness and reduction of macroeconomic imbalances at national level.

| 3.2.1.2 | Approach No 2: Partial substitution of national issuance with Stability Bond issuance with joint and several guarantees
  Under this approach, Stability Bond issuance would be underpinned by joint and several guarantees, but would replace only a limited portion of national issuance.
  The portion of issuance not in Stability Bonds would remain under respective national guarantees. Accordingly, the euro area sovereign bond market would consist of two distinct parts: Stability Bonds and State bonds. A key issue in this approach would be the specific criteria for determining the relative proportions of Stability Bonds and national issuance. |
| --- | --- |

3.2.1.2

Approach No 2: Partial substitution of national issuance with Stability Bond issuance with joint and several guarantees

Under this approach, Stability Bond issuance would be underpinned by joint and several guarantees, but would replace only a limited portion of national issuance.

The portion of issuance not in Stability Bonds would remain under respective national guarantees. Accordingly, the euro area sovereign bond market would consist of two distinct parts: Stability Bonds and State bonds. A key issue in this approach would be the specific criteria for determining the relative proportions of Stability Bonds and national issuance.

| 3.2.1.3 | Approach No 3: Partial substitution of national issuance with Stability Bond issuance with several but not joint guarantees
  Under this approach, Stability Bonds would again substitute only partially for national issuance and would be underpinned by pro-rata guarantees of euro-area Member States. This approach differs from Approach No 2 insofar as Member States would retain liability for their respective share of Stability Bond issuance as well as for their national issuance. |
| --- | --- |

3.2.1.3

Approach No 3: Partial substitution of national issuance with Stability Bond issuance with several but not joint guarantees

Under this approach, Stability Bonds would again substitute only partially for national issuance and would be underpinned by pro-rata guarantees of euro-area Member States. This approach differs from Approach No 2 insofar as Member States would retain liability for their respective share of Stability Bond issuance as well as for their national issuance.

4.   General comments

4.1   The text under consideration must be seen in the light of the crisis that has beset the European Union. This multiple financial, economic, balance-of-payments, sovereign debt and social crisis (with almost 23 million people unemployed) is shaking the very foundations of the European Union. In particular, the crisis has revealed several fundamental flaws in the design of economic and monetary union. A common central bank and a stability and growth pact are far from enough to protect the single currency from crises involving differences in competitiveness, macroeconomic imbalances, upset balances of payments and higher spreads for interest rates on State bonds.

4.2   In order to resolve this crisis, avoid a prolonged recession and create the conditions for a return to growth and more jobs, more and better Europe is needed, not less: more Europe to guarantee budgetary responsibility and integration, more Europe to pool the risks stemming from sovereign debt, restore long-term creditworthiness, facilitate and implement structural reforms and to mobilise investment for growth, competitiveness and jobs throughout the EU, in order to achieve a social Europe and well-being for all. A better Europe that can achieve these goals on a sustainable basis and has effective mechanisms to avoid moral hazard.

4.2.1   All of this requires a strong determination on the part of the European Commission to reaffirm and implement the Community method. From this perspective, the Green Paper is welcome. However, in addition to this, the Commission must exercise in full its right of initiative in all areas and put forward proposals which match the scale of the crisis instead of intergovernmental stop-gap measures which, despite the fact that there have been many of them, have in the main proven to be insufficient and ineffective involving long and uncertain implementation procedures (5).

4.2.2   More Europe: a new Europe requires that resources be pooled on a fundamental scale and that responsibilities be shared. This concept which combines solidarity and shared responsibility must be brought together by a link, a sort of bridge between the two expressions of this concept, namely confidence. This confidence will essentially stem from the symmetrical and balanced economic governance of efficient and indispensable budgetary and fiscal harmonisation.

4.2.2.1   Such an approach is preferable to a situation in which the Member State governments are no longer able by themselves to withstand the pressures exerted by the markets, their creditors and the private ratings agencies. European integration must take major step forward not only in order to create credit instruments and a credible model of growth for investors, but also - and this is a key point - to reaffirm democratic governance.

4.2.2.2   In order to achieve this, the EU must consolidate economic governance with a view to ensuring budgetary discipline in all Member States, especially in the euro area. The six legislative proposals for reform (the "six pack"), as well as the new regulatory proposals and the European semester, which represents a move towards better coordination of budgetary policies and stronger EU surveillance, while not enough to resolve the crisis (6), must be implemented correctly. In terms of practical politics, this process is only just getting underway and must be monitored carefully. It will only be possible to draw conclusions about the success of these reforms on the basis of tangible results in removing macroeconomic imbalances. In addition, the same importance should be attached to macroeconomic imbalances which are at the root of the difficulties encountered by certain Member States.

4.3   The Committee therefore welcomes the Green Paper on the feasibility of introducing Stability Bonds. In its view, the addition of strict economic governance rules and joint guarantees for the whole of the euro area, designed to pool the risks stemming from sovereign debt, will effectively help us to emerge from the austerity-growth impasse. This impasse would inevitably take the EU into a deep recession.

4.4   The advances made in this area will also enable the ECB to discontinue its programme of buying government bonds on the secondary markets (SMP), which is currently needed in order to enable Member States to refinance their public debt. Instead of this policy, the ECB could decide to support the new Stability Bonds by providing additional assurances to market stakeholders in a transitional phase (7).

4.5   To this end, a banking licence could be granted to the EFSF or the ESM, something which would put an end to the confusion between monetary and budgetary policies within the European Central Bank and guarantee its independence.

5.   Specific comments

5.1   The Committee welcomes wholeheartedly the publication of the Green Paper on Stability Bonds. On the one hand, the introduction of EU bonds in the euro area (known as "euro-bonds" (8), and what the Green Paper calls "Stability Bonds") is a logical part of an increasingly integrated European Union equipped with a single market and a European capital market, and represents a necessary addition to the existing common monetary policy in the euro area. Euro-bonds make speculation more difficult and promote stable financial markets and an effective monetary policy.

5.2   At the same time, such euro-bonds could, in addition to establishing joint responsibility, generate confidence among potential investors, immediately and in the short term, and thus stabilise demand for State bonds and lower the market interest rates for countries facing serious financing problems. The EESC therefore welcomes the fact that not only is the Commission finally launching - albeit belatedly - a debate on euro-bonds, it also correctly sets out the advantages of euro-bonds in the Green Paper.

5.3   Preconditions concerning budgetary discipline

5.3.1   Like the general debate on how to respond to the crisis, the Green Paper stresses repeatedly the need to tackle the perverse effects, moral hazard, and notes that the markets could discipline the budgetary policy of Member States. It deplores the fact that, following the launch of the euro, not all Member States have pursued "market discipline of budgetary policy" and expresses the fear that introducing shared responsibility for Stability Bonds will have no effect on the discipline exercised by the markets. However, even some countries which respected the budgetary constraints of the Stability and Growth Pact now find themselves heavily indebted owing to the imbalances linked to debt in the private sector; they must also be monitored.

5.3.2   In general terms, the fear is that joint responsibility and thus the impossibility of sanctions in the form of higher interest rates imposed by the market will lead to irresponsible budgetary management on the part of governments, i.e. large budget deficits. Governments would increase public spending in an irresponsible fashion if they were not subject to pressure from rising market interest rates. However, the EESC believes that the risk of moral hazard and its possible practical manifestations as described in the Green Paper are debatable and should first be subject to an in-depth analysis before coming to conclusions which may be questionable.

5.3.3   A specific analysis of the issue of moral hazard would also enable tailor-made solutions to this problem to be found. There are several reasons for calling into question the belief in "market discipline" and the scale of the problem of moral hazard.

5.3.3.1   The Green Paper argues that the evolution of public budgets impacts on the level of State bond yields and notes that, "The high degree of convergence in euro-area bond yields during the first decade of the euro was not, in retrospect, justified by the budgetary performance of the Member States." Therefore, although there was clearly no convergence of budgetary policy, there was strong convergence of bond yields and thus of interest rates for State bonds. Greek, Spanish, Italian, Irish and Finnish State bond yields were among those which fell the most following the introduction of the euro. For example, although the yield on ten-year Finnish government bonds was still around 8,8 % in 1995, by 2005 it had fallen to 3,4 % – the level of German government bonds.

5.3.3.2   This can be explained by the fact that, with the creation of the euro, the view that all State bonds in the euro area were relatively safe became established among investors. For example, between the creation of the euro area in 1999 and the Lehman Brothers crisis of 2008, a situation prevailed which was similar to what one might expect following the introduction of euro-bonds. The markets did not impose discipline in budgetary policy in the years following the creation of the euro area.

5.3.3.3   If the argument put forward by the Green Paper is correct, that the slackening of market discipline following the introduction of a single interest rate causes an irresponsible rise in public spending and an increase in budget deficits, such a trend should have been noted following the euro's introduction.

5.3.3.4   However, this was not the case: in Finland, public spending fell slightly relative to gross domestic product (GDP) following the euro's introduction, and remained below levels of public revenue. In Spain, the link between public spending (without interest payments) and GDP has remained constant, while revenue levels have even increased. In Italy, the level of public spending has fallen overall, with a slight drop in the amount of interest paid. There was, however, a fall in government revenues. In Greece too, public spending relative to GDP remained stable overall following the country's entry into the euro area and the convergence of bond interest rates, and there was a sharp drop in spending on interest payments. However, the fall in public revenues relative to GDP was much bigger in Greece than in Italy.

5.3.3.5   Clearly, the absence of market discipline and the strong convergence of interest rates for bonds did not give rise to moral hazard, owing to the blanket security assumed by investors. There was no increase in public spending relative to GDP, on the contrary. In any case, one could argue that low and converging interest rates have in many places encouraged a fall in tax revenues – there was a decline in tax receipts in at least two of the abovementioned cases.

5.3.4   This final point would suggest that measures to deal with moral hazard should focus on revenues. Closer coordination of fiscal policies could prevent fiscal dumping. In future, disciplinary action could in certain cases be taken against tax reductions, as part of efforts to coordinate enhanced EU economic policies and governance. This would ensure symmetry among economic governance measures, as already called for by the EESC in previous opinions (9).

5.3.5   In addition, it is very unlikely that investors would actually be interested, as a matter of priority, in the soundness of the budgetary policy of the countries to which they wish to lend money. In reality, the scale of the budget deficit and the public debt is not as relevant for the level of market interest rates as the Green Paper assumes. This is evidenced by the fact that it is Spain, the "model pupil" of budgetary policy, which is currently experiencing financing problems while other countries with high levels of debt, such as the United Kingdom, are obtaining financing at historically low rates.

5.3.6   The EESC therefore believes that, with an eye to the steps to be taken following the Green Paper's publication, the Commission must urgently revise its arguments concerning moral hazard and market discipline. These arguments may very quickly give rise to false conclusions, with disastrous economic consequences: if efforts to deal with the alleged problem of moral hazard were, for example, to give rise to even stricter rules on debt in the stability and growth pact or to automatic debt brakes, then counterproductive (and ineffective, according to the Commission) pressure on public spending might be expected. In order to realise that a sharp fall in government spending – contrary to the assumptions and wishes of the Commission – would have a negative impact on confidence among potential bond buyers, one need look no further than what is happening in the countries beset by crisis, where the policy of austerity has further increased uncertainty and made interest rates rise even more.

5.3.7   In addition, the EESC believes that the argument that the "markets" must impose discipline on democratically elected governments as matter of necessity should also be fundamentally called into question. In this scenario, the markets are ultimately synonyms for "holders of capital", which act as the creditors of governments. It is not clear why we should welcome the fact that a relatively small number of holders of capital should have greater influence over the public budget than an elected parliament.

5.4   Conditions for assets being accepted as very safe by the market

5.4.1   The EESC shares the Commission's view that Stability Bonds must have a high credit quality to be accepted by investors and the Member States of the euro area which already benefit from the highest credit rating. High credit quality would also be needed to establish Stability Bonds as an international benchmark and to underpin the development and efficient functioning of related futures and options markets, which are essential for supplying the bond markets with liquid assets.

5.4.2   The EESC is convinced that the euro-bonds with overall shared responsibility will be very attractive for potential investors looking for safe investments. The volume and liquidity of a joint bonds market would also probably attract new investors from outside Europe. The EESC agrees that as a result of global macroeconomic imbalances every possible effort must be made to channel the considerable volumes of liquid assets from emerging countries towards the stable financial investments represented by euro-bonds. These bonds would therefore play a key role in stabilising financial markets even beyond the borders of the European Union.

5.4.3   In the meantime, however, insecurity on European bond markets has increased enormously owing to the hesitant steps by Member State governments, poor political decisions and the lack of will to seek a comprehensive solution to the crisis. For example, the uncertainty is now so great that even euro-bonds with joint and several guarantees (option 1, see above, point 3.2.1.1) would probably not encounter the same level of demand as a few months ago. The ability of Stability Bonds to alleviate the crisis would also suffer from this and they may even fail to meet their initial objective - stabilisation.

5.4.4   The EESC therefore believes it is vital to give the European Central Bank a bigger role in solving the crisis – for example by granting a banking license to the EFSF or to the ESM, which will enter into force on 1 July 2012. Unlike the Federal Reserve, the Bank of Japan or the Bank of England, the ECB does not act as the lender of last resort for Member States. This largely explains the difference in interest rates between the euro area and the far more indebted economies and to a large extent helps to give the impression that the crisis will never end.

5.4.5   It would, however, be a mistake to believe that acceptance by the market, and therefore low interest rates for euro-bonds, requires a policy of austerity and budgetary consolidation that is as rigid as possible. In several opinions, the EESC has explicitly denounced the dire consequences of such a policy for the economy and stressed that budgetary consolidation was based primarily on economic growth (10).

5.5   Options for issuance of Stability Bonds

5.5.1   Approach No 1: Full substitution of Stability Bond issuance for national issuance, with joint and several guarantees

The EESC believes that this is the wisest approach over the long term and the one that is most in line with the EU objective of a social and economic union. At the same time, it could turn out to be the most effective in the short term for dealing with the problems of financing and thus ending the crisis. However, this is the approach which requires the deepest European integration. Its implementation would therefore probably generate the most problems of a political nature, hence full substitution of stability bond issuance for national issuance, with joint and several guarantees seems the least likely option in the near future.

5.5.2   Approach No 2: Partial substitution of Stability Bond issuance for national issuance, with joint and several guarantees

5.5.2.1   This approach is the most practicable and acceptable option since it basically corresponds to the one above, except that countries would retain a certain operational autonomy vis-à-vis financial markets. As a result, Member States would each be subject to different market and financing conditions, possibly reflecting the differences between their individual credit ratings. In any case, this approach may turn out to be very effective, taking account of both the medium and short-term effects. In addition, it clearly weakens the arguments based on the alleged risks of moral hazard. This is why it is one of the two options which the EESC formally approves.

5.5.2.2   However, before the issuance of Stability Bonds is authorised, it remains just as vital to decide on the procedures and the debt ceiling so as to find a real solution to the tricky issue of Member States which experience financing difficulties. For example, the EESC believes that not all existing national bonds should be converted immediately into Stability Bonds (as indicated in the Green Paper on page 17), as the limit set for issuing these bonds (blue bonds) would quickly be reached and it would be once again necessary to immediately issue national bonds (red bonds) for refinancing purposes (11).

5.5.3   Approach No 3: Partial substitution of Stability Bond issuance for national issuance, with several but not joint guarantees

5.5.3.1   The EESC agrees with the Commission that of the three approaches this is the one with the most restricted scope, since it would only partially cover Member States' financing requirements (as in the case of approach 2) and it would provide for several guarantees only, not joint guarantees. This approach would therefore in all probability have only limited effects in terms of stability and integration. It could be implemented relatively quickly, since it appears to be fully compatible with the EU treaty in force.

5.5.3.2   In order for such financing instruments to obtain a sufficient credit rating, Member States would be obliged to present additional guarantees. Under approach 3, Stability Bonds would be very similar to the bonds issued by the European Financial Stability Fund (EFSF), even if they would probably have a slightly bigger potential impact on the effectiveness of the markets and on integration. Since this approach is unlikely to have a major impact, it is the one that accords least with the EESC's viewpoint.

5.6   Fiscal framework for Stability Bonds

5.6.1   The EESC reiterates its belief that strengthening the stability and growth pact within the framework of the "six pack", the Council resolution on the Euro Plus Pact and the generalised introduction of "golden rules" are essentially not enough to resolve the crisis and that the social consequences risk triggering the disintegration of the European Union (12).

5.6.2   The supplementary measures taken by the Commission and the Council, in addition to the proposals in the Green Paper, should not base reducing budgetary deficits and government debt exclusively on savings in public budgets (austerity). As a general rule, these have negative effects on growth, jobs and the welfare state, and pointlessly restrict the scope for pursuing an appropriate, countercyclical budgetary policy. What is more, they do not yield the positive results anticipated by the Commission.

5.6.3   However, the Member States of the monetary union must take measures with a view to achieving convergence of national economies, reducing imbalances and completing the single monetary policy. In addition, economic policy must pursue the right objectives. In this connection, the idea repeatedly evoked in the Green Paper of enhanced competitiveness, which takes the form of lower wage costs and downward pressure on salaries, is one-sided and fails to recognise the role played by demand at macroeconomic level.

5.6.4   By way of example, squeezing incomes in countries with current account deficits may cause a contraction in demand and a fall in imports. This will certainly balance current accounts in the euro area, but at the cost of reducing production and economic output throughout the area, which would ultimately end up being lower. The EESC reiterates its belief that a balanced economic policy is vital in order to achieve the objectives of the EU 2020 strategy.

5.6.5   This is why it is important to steer coordination of economic policy towards stronger growth and national revenues. The Member States which in recent years have experienced relatively weak public investment and where domestic demand has been flat must take corrective measures to support demand, while the Member States with relatively high current account and budget deficits should seek to balance their revenue and expenditure more effectively. The introduction of Stability Bonds in the European Union in line with the model of approach 2 may, according to the EESC, sustainably support an urgent and crucial reduction of internal macroeconomic imbalances in the EU.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Towards a Genuine Economic and Monetary Union, report by Herman Van Rompuy, President of the European Council, 26 June 2012, II.2, third paragraph (EUCO 120/12):

1

Towards a Genuine Economic and Monetary Union

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131201.pdf

(2)  The public discussion and literature normally uses the term "Eurobonds". The Commission considers that the main feature of such an instrument would be enhanced financial stability in the euro area. Therefore, in line with President Barroso's State of the Union address on 28 September 2011, this Green Paper refers to "Stability Bonds".

2

(3)  European Parliament resolution of 6 July 2011 on the financial, economic and social crisis (2010/2242(INT)).

3

(4)  See the EESC opinions on Growth and sovereign debt in the EU: two innovative proposals, OJ C 143, 22.5.2012, p. 10, and on Smart fiscal policy consolidation strategies – challenges of identifying growth drivers for Europe. How to exploit fully the labour potential of our economies in parallel with the pressing need for fiscal adjustments, OJ C 248, 25.8.2011, p. 8.

4

Growth and sovereign debt in the EU: two innovative proposals

Smart fiscal policy consolidation strategies – challenges of identifying growth drivers for Europe. How to exploit fully the labour potential of our economies in parallel with the pressing need for fiscal adjustments

(5)  See the justification of the ratings agency Standard & Poor’s of 13 January 2012 for downgrading the treasury bonds of 16 Member States of the euro area: "the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone",

5

http://www.standardandpoors.com/prot/ratings/articles/en/eu/?articleType=HTML&assetID=1245327399569. Standard & Poor’s further observed: "We believe a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues".

(6)  See point 5.6.

6

(7)  The ECB's room for manoeuvre is virtually unlimited and could therefore stretch from a simple declaration on the future direction of its monetary policy to massive interventions to buy up sovereign debt under speculative attack.

7

(8)  In this document, the term "euro-bonds" is used when it is a question of the objective of a political union in addition to economic and monetary union. In all other cases, the term created by the Commission, namely "stability bonds", will be used. In reality, there is no difference between these two concepts.

8

(9)  See list in the EESC opinion on the Annual Growth Survey: advancing the EU's comprehensive response to the crisis,
  OJ C 132, 3.5.2011, p. 26, and the EESC opinion on the Social impact of the new economic governance legislation, OJ C 143, 22.5.2012, p. 23.

9

Annual Growth Survey: advancing the EU's comprehensive response to the crisis,

Social impact of the new economic governance legislation

(10)  See footnote 8 above.

10

(11)  Delpla, J. and von Weizsäcker, J. (2010), The Blue Bond Proposal, Breugel Policy Briefs 420, Bruegel, Brussels, 2010. The authors propose a limit for issuing blue bonds, which amounts to 60 % of GDP and corresponds to the criteria initially laid down by the Maastricht Treaty concerning the ceiling on the total public debt. Among a growing number of more or less detailed studies and proposals, it is worth looking at the proposals of the German government's Council of Economic Experts regarding a European redemption pact

11

The Blue Bond Proposa

(http://www.sachverstaendigenrat-wirtschaft.de/fileadmin/dateiablage/Pressemitteilungen/A_european_redemption_pact.pdf), or Varoufakis, Y. and Holland, S. (2011), A modest proposal for overcoming the euro crisis, Levy Economics Institute of Bard College, Policy Note 3/2011, http://www.levyinstitute.org/pubs/pn_11_03.pdf.

A modest proposal for overcoming the euro crisis

(12)  See point 5.3 above.

12

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APPENDIX

to the opinion of the European Economic and Social Committee

The following amendments were rejected in the course of discussions, but obtained at least a quarter of the votes cast:

Am. 3 – Point 3.2.1.2

Insert text:

| 3.2.1.2. | Approach No 2: Partial substitution of national issuance with Stability Bond issuance with joint and several guarantees

  Under this approach, Stability Bond issuance would be underpinned by joint and several guarantees, but would replace only a limited portion of national issuance.


  The portion of issuance not in Stability Bonds would remain under respective national guarantees. Accordingly, the euro area sovereign bond market would consist of two distinct parts: Stability Bonds and State bonds. A key issue in this approach would be the specific criteria for determining the relative proportions of Stability Bonds and national issuance . |
| --- | --- |

3.2.1.2.

Under this approach, Stability Bond issuance would be underpinned by joint and several guarantees, but would replace only a limited portion of national issuance.

The portion of issuance not in Stability Bonds would remain under respective national guarantees. Accordingly, the euro area sovereign bond market would consist of two distinct parts: Stability Bonds and State bonds. A key issue in this approach would be the specific criteria for determining the relative proportions of Stability Bonds and national issuance .

Reason

Given orally.

Result of vote

| Against | : | 117 |
| --- | --- | --- |
| For | : | 46 |
| Abstentions | : | 18 |

Against

:

117

For

:

46

Abstentions

:

18

Am. 4 – Point 3.2.1.3

Insert text:

| 3.2.1.3 | Approach No 3: Partial substitution of national issuance with Stability Bond issuance with several but not joint guarantees.

  Under this approach, Stability Bonds would again substitute only partially for national issuance and would be underpinned by pro-rata guarantees of euro-area Member States. This approach differs from Approach No 2 insofar as Member States would retain liability for their respective share of Stability Bond issuance as well as for their national issuance. . |
| --- | --- |

3.2.1.3

Under this approach, Stability Bonds would again substitute only partially for national issuance and would be underpinned by pro-rata guarantees of euro-area Member States. This approach differs from Approach No 2 insofar as Member States would retain liability for their respective share of Stability Bond issuance as well as for their national issuance. .

Reason

Given orally.

Result of vote

| Against | : | 127 |
| --- | --- | --- |
| For | : | 50 |
| Abstentions | : | 6 |

Against

:

127

For

:

50

Abstentions

:

6

The next two amendments were voted on together:

Am. 7 – Point 4.3

Amend as follows:

| 4.3. | The Committee therefore welcomes the Green Paper on the feasibility of introducing Stability Bonds. In its view, the addition of strict economic governance rules and joint guarantees for the whole of the euro area, designed to the risks stemming from sovereign debt , will effectively help us to emerge from the austerity-growth . . . |
| --- | --- |

4.3.

Reason

Given orally.

Am.1 – Point 1.5

Insert text:

| 1.5 | However, the EESC believes that the risk of moral hazard and its possible practical manifestations as described in the Green Paper are debatable and should first be subject to an in-depth analysis before coming to conclusions which may be questionable. If the argument put forward by the Green Paper were correct, that the slackening of market discipline as a result of the introduction of a single interest rate will cause an irresponsible rise in public spending and an increase in budget deficits, such a trend should have been noted following the euro's introduction. However, this was not the case. |
| --- | --- |

1.5

Reason

The green paper addresses implementation of a mechanism of so-called stability bonds for indefinite time, the aim of which is to cut the costs of debt servicing (issuance of bonds) for member states with low budgetary discipline to the detriment of countries with good budgetary behaviour, which will have to pay higher yields on such bonds compared to their own debt instruments. The beneficiaries of such scheme will take advantage of a single (and, from their perspective, lower) yield for such bonds, as well as a Euro area wide joint liability (guarantee). The EC itself outlined 5 possible "moral hazards" (one party makes the decision about how much risk to take, while someone else bears the cost if things go badly) created by this kind of debt issuance.

Result of vote

| Against | : | 131 |
| --- | --- | --- |
| For | : | 49 |
| Abstentions | : | 9 |

Against

:

131

For

:

49

Abstentions

:

9

Am.8 – Point 5.3.4

Amend as follows:

| 5.3.4. | This final point would suggest that measures to deal with moral hazard should focus on revenues. .  (1). In future, disciplinary action could in certain cases be taken against tax reductions, as part of efforts to coordinate enhanced EU economic policies and governance. This would ensure symmetry among economic governance measures, as already called for by the EESC in previous opinions
   (2). |
| --- | --- |

5.3.4.

This final point would suggest that measures to deal with moral hazard should focus on revenues. .  (1). In future, disciplinary action could in certain cases be taken against tax reductions, as part of efforts to coordinate enhanced EU economic policies and governance. This would ensure symmetry among economic governance measures, as already called for by the EESC in previous opinions
   (2).

Reason

Point 5.3.4 of the opinion cannot be endorsed either. The claim that in future disciplinary action could be taken against tax reductions is arbitrary and cannot be based on any analysis or research. Possible tax reductions and their impact are not the subject of this opinion.

Result of vote

| Against | : | 124 |
| --- | --- | --- |
| For | : | 54 |
| Abstentions | : | 9 |

Against

:

124

For

:

54

Abstentions

:

9

The next six amendments were voted on together:

Am.10 – Point 5.4.2

Amend as follows:

| 5.4.2. | The EESC is convinced that the euro-bonds with will be very attractive for potential investors looking for safe investments. The volume and liquidity of a joint bonds market would also probably attract new investors from outside Europe. The EESC agrees that as a result of global macroeconomic imbalances every possible effort must be made to channel the considerable volumes of liquid assets from emerging countries towards the stable financial investments represented by euro-bonds. These bonds would therefore play a key role in stabilising financial markets even beyond the borders of the European Union. |
| --- | --- |

5.4.2.

Reason

Given orally.

Am.11 – Point 5.5.1

Amend as follows:

| 5.5.1. | Approach No 1: Full substitution of Stability Bond issuance for national issuance, with joint and several guarantees

  However, this is the approach which requires the deepest European integration . Its implementation would therefore probably generate the most problems of a political nature, hence full substitution of stability bond issuance for national issuance, with joint and several guarantees seems the least likely option in the near future. . |
| --- | --- |

5.5.1.

However, this is the approach which requires the deepest European integration . Its implementation would therefore probably generate the most problems of a political nature, hence full substitution of stability bond issuance for national issuance, with joint and several guarantees seems the least likely option in the near future. .

Reason

The option proposed in the opinion, namely to support approach No. 2 of the various options for issuance of stability bonds, which is based on partial substitution of Stability Bond issuance for national issuance with joint and several guarantees, should be rejected. In our view, it is not acceptable that some Member States are profligate and, as experience shows, are unfortunately allowed to behave irresponsibly with their money, while others must bear the costs. At the same time, it should be pointed out that joint and several guarantees run directly counter to the provisions of the Treaty on the Functioning of the European Union, according to which no Member State should be responsible for the obligations of another. In contrast, approach No. 3 (proposed to be supported by the amendment) minimizes the risk of moral hazard for the conduct of economic and fiscal policies. Unlike the second approach, this would involve "several but not joint" government guarantees and could therefore be implemented relatively quickly without having to change EU treaties.

Am.12 – Point 5.5.2.1

Amend as follows:

| 5.5.2.1. | This approach basically corresponds to the one above, except that countries would retain a certain operational autonomy vis-à-vis financial markets. As a result, Member States would each be subject to different market and financing conditions possibly reflecting the differences between their individual credit ratings. . . |
| --- | --- |

5.5.2.1.

Reason

The option proposed in the opinion, namely to support approach No 2 of the various options for issuance of stability bonds, which is based on partial substitution of Stability Bond issuance for national issuance with joint and several guarantees, should be rejected. In our view, it is not acceptable that some Member States are profligate and, as experience shows, are unfortunately allowed to behave irresponsibly with their money, while others must bear the costs. At the same time, it should be pointed out that joint and several guarantees run directly counter to the provisions of the Treaty on the Functioning of the European Union, according to which no Member State should be responsible for the obligations of another. In contrast, approach No 3 (proposed to be supported by the amendment) minimises the risk of moral hazard for the conduct of economic and fiscal policies. Unlike the second approach, this would involve "several but not joint" government guarantees and could therefore be implemented relatively quickly without having to change EU treaties.

Am. 13 – Point 5.5.3.1

Amend as follows:

| 5.5.3.1. | The EESC agrees with the Commission that of the three approaches this is the one with the most restricted scope, since it would only partially cover Member States' financing requirements (as in the case of approach 2) and it would provide for several guarantees only, not joint guarantees. This approach . It could be implemented relatively quickly, since it appears to be fully compatible with the EU treaty in force. |
| --- | --- |

5.5.3.1.

Reason

Given orally.

Am.14 – Point 5.6.5

Amend as follows:

| 5.6.5 | This is why it is important to steer coordination of economic policy towards stronger growth and national revenues. The Member States which in recent years have experienced relatively weak public investment and where domestic demand has been flat must take corrective measures to support demand, while the Member States with relatively high current account and budget deficits should seek to balance their revenue and expenditure more effectively. The introduction of Stability Bonds in the European Union in line with the model of approach 3 may, according to the EESC, sustainably support an urgent and crucial reduction of internal macroeconomic imbalances in the EU. |
| --- | --- |

5.6.5

Reason

The option proposed in the opinion, namely to support approach No 2 of the various options for issuance of stability bonds, which is based on partial substitution of Stability Bond issuance for national issuance with joint and several guarantees, should be rejected. In our view, it is not acceptable that some Member States are profligate and, as experience shows, are unfortunately allowed to behave irresponsibly with their money, while others must bear the costs. At the same time, it should be pointed out that joint and several guarantees run directly counter to the provisions of the Treaty on the Functioning of the European Union, according to which no Member State should be responsible for the obligations of another. In contrast, approach No 3 (proposed to be supported by the amendment) minimises the risk of moral hazard for the conduct of economic and fiscal policies. Unlike the second approach, this would involve "several but not joint" government guarantees and could therefore be implemented relatively quickly without having to change EU treaties.

Am.2 – Point 1.7

Amend as follows:

| 1.7 | As regards the various "options for issuance of Stability Bonds", the Committee believes that approach No , which involves "partial substitution of Stability Bond issuance for national issuance, with several guarantees", is the most practicable and overall the most acceptable option. |
| --- | --- |

1.7

Reason

The option proposed in the opinion, namely to support approach No 2 of the various options for issuance of stability bonds, which is based on partial substitution of Stability Bond issuance for national issuance with joint and several guarantees, should be rejected. In our view, it is not acceptable that some Member States are profligate and, as experience shows, are unfortunately allowed to behave irresponsibly with their money, while others must bear the costs. At the same time, it should be pointed out that joint and several guarantees run directly counter to the provisions of the Treaty on the Functioning of the European Union, according to which no Member State should be responsible for the obligations of another. In contrast, approach No 3 (proposed to be supported by the amendment) minimises the risk of moral hazard for the conduct of economic and fiscal policies. Unlike the second approach, this would involve "several but not joint" government guarantees and could therefore be implemented relatively quickly without having to change EU treaties.

Result of vote

| Against | : | 129 |
| --- | --- | --- |
| For | : | 59 |
| Abstentions | : | 5 |

Against

:

129

For

:

59

Abstentions

:

5

---

(1)

(2)  See list in the EESC opinion on the Annual Growth Survey: advancing the EU's comprehensive response to the crisis,
  OJ C 132, 3.5.2011, p. 26, and the EESC opinion on the Social impact of the new economic governance legislation, OJ C 143, 22.5.2012, p. 23.

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/72 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/72

---

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 the European Earth monitoring programme (GMES) and its operations (from 2014 onwards)’

COM(2011) 831 final

2012/C 299/13

Rapporteur: Mr IOZIA

On 30 November 2011, the Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, 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 the European Earth monitoring programme (GMES) and its operations (from 2014 onwards)

COM(2011) 831 final.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 12 June 2012.

At its 482nd plenary session of 11 and 12 July 2012 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 178 votes to 2 with 3 abstentions.

1.   Conclusions and recommendations

| 1.1 | The EESC reiterates its unswerving support for European space policy and, in particular, for the major European projects Galileo and GMES, which it considers to be of strategic importance for European economic and scientific development. In its opinions (1) the EESC has consistently stressed the need to dedicate more attention and resources to space sector activities, an area where the EU must maintain its prominent position. |
| --- | --- |

1.1

The EESC reiterates its unswerving support for European space policy and, in particular, for the major European projects Galileo and GMES, which it considers to be of strategic importance for European economic and scientific development. In its opinions (1) the EESC has consistently stressed the need to dedicate more attention and resources to space sector activities, an area where the EU must maintain its prominent position.

| 1.2 | The EESC is totally against the Commission's proposal to relegate the financing necessary for development and completion of the GMES programme to an external ad hoc fund. |
| --- | --- |

1.2

The EESC is totally against the Commission's proposal to relegate the financing necessary for development and completion of the GMES programme to an external ad hoc fund.

| 1.3 | The EESC points out that it is indispensable for a programme that is entering the operational phase to be assured of its continuity; otherwise, it will fail. The entire proposal for innovative funding, management and governance mechanisms that are different from the tried and tested ones that are customary in the EU appears untimely, unjustified and very risky. Indeed, the creation of new funding models and bodies means going into an exhausting and uncertain phase of negotiations and study, which will certainly take years, which seems incompatible with the entry into operation of a programme such as GMES. It also seems pointless given that the Commission and the other European agencies already have all the competences and powers necessary to pursue the programme. |
| --- | --- |

1.3

The EESC points out that it is indispensable for a programme that is entering the operational phase to be assured of its continuity; otherwise, it will fail. The entire proposal for innovative funding, management and governance mechanisms that are different from the tried and tested ones that are customary in the EU appears untimely, unjustified and very risky. Indeed, the creation of new funding models and bodies means going into an exhausting and uncertain phase of negotiations and study, which will certainly take years, which seems incompatible with the entry into operation of a programme such as GMES. It also seems pointless given that the Commission and the other European agencies already have all the competences and powers necessary to pursue the programme.

| 1.4 | The EESC calls for the financing of the programme to be brought within the 2014-2020 Multiannual Financial Framework, and for its governance to be structured in such a way as to take into account capabilities currently existing in Europe, avoiding both the fragmentation of management bodies and the creation of new bodies that are ill-suited to taking over the management of a programme that has been developed over a whole decade. This request has already been made in a previous opinion (2). |
| --- | --- |

1.4

The EESC calls for the financing of the programme to be brought within the 2014-2020 Multiannual Financial Framework, and for its governance to be structured in such a way as to take into account capabilities currently existing in Europe, avoiding both the fragmentation of management bodies and the creation of new bodies that are ill-suited to taking over the management of a programme that has been developed over a whole decade. This request has already been made in a previous opinion (2).

| 1.5 | The communication relating to the details of implementing the proposal for an intergovernmental agreement on the operation of GMES (3), which was published while this opinion was being discussed, does not change these conclusions. On the contrary, it strengthens them by enabling the EESC to point out once again the high risk associated with the belated introduction of a new, untested financing and management model outside of the multiannual financial framework and the EU's established management channels. |
| --- | --- |

1.5

The communication relating to the details of implementing the proposal for an intergovernmental agreement on the operation of GMES (3), which was published while this opinion was being discussed, does not change these conclusions. On the contrary, it strengthens them by enabling the EESC to point out once again the high risk associated with the belated introduction of a new, untested financing and management model outside of the multiannual financial framework and the EU's established management channels.

| 1.6 | The EESC is extremely concerned about the real risk that the GMES programme might encounter serious difficulties, wasting the EUR 3,2 billion investment already made. In the light of discussions between Member States, this does not seem so much a risk as a certainty. |
| --- | --- |

1.6

The EESC is extremely concerned about the real risk that the GMES programme might encounter serious difficulties, wasting the EUR 3,2 billion investment already made. In the light of discussions between Member States, this does not seem so much a risk as a certainty.

| 1.7 | The EESC points out that it seems highly risky and unnecessary to attempt to redefine the complex system of GMES funding and governance, as set out in the communication in question, less than a year from its planned entry into operation (the A satellites for the Sentinel-1, Sentinel-2 and Sentinel-3 constellations are due to be launched in 2013), not least given the strategic importance of the programme for the EU. |
| --- | --- |

1.7

The EESC points out that it seems highly risky and unnecessary to attempt to redefine the complex system of GMES funding and governance, as set out in the communication in question, less than a year from its planned entry into operation (the A satellites for the Sentinel-1, Sentinel-2 and Sentinel-3 constellations are due to be launched in 2013), not least given the strategic importance of the programme for the EU.

| 1.8 | No feasibility study is provided to allow an assessment of the scheme's viability in terms of effectiveness and efficiency. In addition, there is no clear justification of the need for a new set-up. |
| --- | --- |

1.8

No feasibility study is provided to allow an assessment of the scheme's viability in terms of effectiveness and efficiency. In addition, there is no clear justification of the need for a new set-up.

| 1.9 | The EESC notes the different treatment afforded to the two flagship programmes of the European space programme, Galileo and GMES, the former being included in the Multiannual Financial Framework (MFF) and the latter not. |
| --- | --- |

1.9

The EESC notes the different treatment afforded to the two flagship programmes of the European space programme, Galileo and GMES, the former being included in the Multiannual Financial Framework (MFF) and the latter not.

| 1.10 | When it comes to governance, one can only be surprised at the minor role allocated in this complex system to the European Space Agency (ESA), which has to date designed, managed and operated the majority of European satellite systems, in addition to having supplied almost all the financing thus far, in partnership with the European Commission. Its replacement by new bodies or others with little experience of managing satellite systems and the data they collect appears groundless. |
| --- | --- |

1.10

When it comes to governance, one can only be surprised at the minor role allocated in this complex system to the European Space Agency (ESA), which has to date designed, managed and operated the majority of European satellite systems, in addition to having supplied almost all the financing thus far, in partnership with the European Commission. Its replacement by new bodies or others with little experience of managing satellite systems and the data they collect appears groundless.

| 1.11 | The EESC would argue that with less than a year to go before the entry into force of the GMES programme funding model, introducing such a radical overhaul of programme responsibilities as that proposed by the communication is a highly risky operation. |
| --- | --- |

1.11

The EESC would argue that with less than a year to go before the entry into force of the GMES programme funding model, introducing such a radical overhaul of programme responsibilities as that proposed by the communication is a highly risky operation.

| 1.12 | The EESC draws attention to the uncertain, vague nature of the Commission's governance proposal. There are obvious problems with the model proposed and the technical coordination is entrusted to bodies that have neither experience of space sector activities nor a culture of working together with other agencies. Furthermore, over 80 % of the activities planned under the GMES programme are space-related. The EESC calls on the Commission to review the model proposed and maintain unitary governance, continuing to give the ESA technical responsibility for the programme, under Commission supervision and control as originally planned. |
| --- | --- |

1.12

The EESC draws attention to the uncertain, vague nature of the Commission's governance proposal. There are obvious problems with the model proposed and the technical coordination is entrusted to bodies that have neither experience of space sector activities nor a culture of working together with other agencies. Furthermore, over 80 % of the activities planned under the GMES programme are space-related. The EESC calls on the Commission to review the model proposed and maintain unitary governance, continuing to give the ESA technical responsibility for the programme, under Commission supervision and control as originally planned.

2.   Introduction

| 2.1 | The communication in question, of 30 November 2011, sets out the situation identified by the European Commission, whereby the operational phase of the GMES earth monitoring and security strategic programme, as defined thus far and brought to the final implementation phase, should be funded outside the 2014-2020 Multiannual Financial Framework (4). It also makes a proposal regarding its governance. This communication is therefore of fundamental importance to the GMES programme. |
| --- | --- |

2.1

The communication in question, of 30 November 2011, sets out the situation identified by the European Commission, whereby the operational phase of the GMES earth monitoring and security strategic programme, as defined thus far and brought to the final implementation phase, should be funded outside the 2014-2020 Multiannual Financial Framework (4). It also makes a proposal regarding its governance. This communication is therefore of fundamental importance to the GMES programme.

| 2.2 | The subsequent communication relating to the details of implementing the proposal for an intergovernmental agreement on the operation of GMES (5), which was published while this opinion was being discussed, does not change the comments on the communication under discussion nor its conclusions, as it is an addendum that sets out the financial aspects of the proposed fund and introduces a new body. This new body, the GMES Council, duplicates the competences that have hitherto applied to the management of European space programmes and thus creates clear conflicts of competences and duplication of decision-making bodies in Europe. |
| --- | --- |

2.2

The subsequent communication relating to the details of implementing the proposal for an intergovernmental agreement on the operation of GMES (5), which was published while this opinion was being discussed, does not change the comments on the communication under discussion nor its conclusions, as it is an addendum that sets out the financial aspects of the proposed fund and introduces a new body. This new body, the GMES Council, duplicates the competences that have hitherto applied to the management of European space programmes and thus creates clear conflicts of competences and duplication of decision-making bodies in Europe.

| 2.3 | GMES – the Global Monitoring for Environment and Security programme – is one of the European Union's two flagship space sector programmes; the other is Galileo. It plays a fundamental role in earth observation, providing the means to understand and monitor climate change, civil protection and security, sustainable development and crisis management. |
| --- | --- |

2.3

GMES – the Global Monitoring for Environment and Security programme – is one of the European Union's two flagship space sector programmes; the other is Galileo. It plays a fundamental role in earth observation, providing the means to understand and monitor climate change, civil protection and security, sustainable development and crisis management.

| 2.4 | The fact that funding for the GMES earth monitoring and security strategic programme has not been included within the proposal for the 2014-2020 Multiannual Financial Framework is cause for great concern owing to the very real danger that a programme of strategic importance to Europe will be lost, along with a decade's work and EUR 3 billion in investment. |
| --- | --- |

2.4

The fact that funding for the GMES earth monitoring and security strategic programme has not been included within the proposal for the 2014-2020 Multiannual Financial Framework is cause for great concern owing to the very real danger that a programme of strategic importance to Europe will be lost, along with a decade's work and EUR 3 billion in investment.

| 2.5 | In its analysis of December 2011 (6), the EESC already expressed grave concern regarding the future of this programme, should continuity in its funding be lost. |
| --- | --- |

2.5

In its analysis of December 2011 (6), the EESC already expressed grave concern regarding the future of this programme, should continuity in its funding be lost.

| 2.6 | In February 2012, in a resolution on the future of GMES (7), the European Parliament stated that it did not believe "that financing GMES outside the Multiannual Financial Framework (MFF) – with the funding and governance structure that the Commission proposed in its communication – is a viable option". |
| --- | --- |

2.6

In February 2012, in a resolution on the future of GMES (7), the European Parliament stated that it did not believe "that financing GMES outside the Multiannual Financial Framework (MFF) – with the funding and governance structure that the Commission proposed in its communication – is a viable option".

| 2.7 | The space component of GMES is based on three constellations of satellites, Sentinel-1, -2 and -3, and on instruments hosted on other satellites (Sentinel 4 and 5). The first of the three constellations is due to be launched in 2013. The definition of a financial framework providing funding for these imminent operations is therefore a matter of the utmost urgency. |
| --- | --- |

2.7

The space component of GMES is based on three constellations of satellites, Sentinel-1, -2 and -3, and on instruments hosted on other satellites (Sentinel 4 and 5). The first of the three constellations is due to be launched in 2013. The definition of a financial framework providing funding for these imminent operations is therefore a matter of the utmost urgency.

| 2.8 | Given the lack of a proposal, the ESA's director-general, speaking at a press conference on 9 January 2012, reaffirmed that in the absence of a decision on the funding of GMES operations the agency would not go ahead with the planned launches (8). |
| --- | --- |

2.8

Given the lack of a proposal, the ESA's director-general, speaking at a press conference on 9 January 2012, reaffirmed that in the absence of a decision on the funding of GMES operations the agency would not go ahead with the planned launches (8).

| 2.9 | In this communication, the European Commission proposes pinpointing the necessary funding for the building and implementation of the entire infrastructure by establishing a new GMES-specific fund, which would require an intergovernmental agreement between the EU's Member States within the Council. |
| --- | --- |

2.9

In this communication, the European Commission proposes pinpointing the necessary funding for the building and implementation of the entire infrastructure by establishing a new GMES-specific fund, which would require an intergovernmental agreement between the EU's Member States within the Council.

| 2.10 | All 27 Member States of the EU should contribute to the fund on the basis of their gross national income (GNI). The communication includes a model agreement, which is fleshed out in the subsequent communication (9). |
| --- | --- |

2.10

All 27 Member States of the EU should contribute to the fund on the basis of their gross national income (GNI). The communication includes a model agreement, which is fleshed out in the subsequent communication (9).

| 2.11 | The governance proposal contained in the communication, no less important than the financial proposal, identifies numerous players who should take responsibility for the various aspects and sectors covered by the GMES programme. |
| --- | --- |

2.11

The governance proposal contained in the communication, no less important than the financial proposal, identifies numerous players who should take responsibility for the various aspects and sectors covered by the GMES programme.

| 2.12 | The introduction of a new, complex funding scheme and a new management body for a space programme (the GMES Council) seems unnecessary and comes rather late, at one year from the launch of the first satellites. |
| --- | --- |

2.12

The introduction of a new, complex funding scheme and a new management body for a space programme (the GMES Council) seems unnecessary and comes rather late, at one year from the launch of the first satellites.

3.   General comments

| 3.1 | The GMES earth monitoring and security programme and the GALILEO programme for satellite navigation are major strategic EU programmes, intended to enable the EU to maintain its independence and prime position in the space sector. |
| --- | --- |

3.1

The GMES earth monitoring and security programme and the GALILEO programme for satellite navigation are major strategic EU programmes, intended to enable the EU to maintain its independence and prime position in the space sector.

| 3.2 | Maintaining strong leadership and independence in the space sector is of strategic importance for the future of Europe, owing to the widespread, essential economic, technological, geopolitical and, in the widest sense of the word, cultural effects of activities developed in the space sector. |
| --- | --- |

3.2

Maintaining strong leadership and independence in the space sector is of strategic importance for the future of Europe, owing to the widespread, essential economic, technological, geopolitical and, in the widest sense of the word, cultural effects of activities developed in the space sector.

| 3.3 | GMES is a strategic EU programme that was set up under Regulation (EU) No 911/2010 of the European Parliament and the Council. |
| --- | --- |

3.3

GMES is a strategic EU programme that was set up under Regulation (EU) No 911/2010 of the European Parliament and the Council.

| 3.4 | The communication states that "in order to respond to ever growing challenges at global level Europe needs a well-coordinated and reliable Earth observation system of its own. GMES is that system". |
| --- | --- |

3.4

The communication states that "in order to respond to ever growing challenges at global level Europe needs a well-coordinated and reliable Earth observation system of its own. GMES is that system".

| 3.5 | The communication proposes a new funding model, outside of the consolidated management system within the EU budget, which requires a specific contribution and approval from all 27 Member States. The mechanism for this is such that, in the current financial situation (looking at, purely by way of example, the situation in Greece and possible difficulties faced by France and Italy), it is highly likely, if not certain, to be blocked, which would lead to the end of the GMES programme. |
| --- | --- |

3.5

The communication proposes a new funding model, outside of the consolidated management system within the EU budget, which requires a specific contribution and approval from all 27 Member States. The mechanism for this is such that, in the current financial situation (looking at, purely by way of example, the situation in Greece and possible difficulties faced by France and Italy), it is highly likely, if not certain, to be blocked, which would lead to the end of the GMES programme.

4.   Specific comments

Funding

| 4.1 | The communication excludes GMES from the 2014-2020 QFP. |
| --- | --- |

4.1

The communication excludes GMES from the 2014-2020 QFP.

| 4.2 | Funding is to be secured instead by means of an internal agreement between representatives of the Member State governments within the Council. |
| --- | --- |

4.2

Funding is to be secured instead by means of an internal agreement between representatives of the Member State governments within the Council.

| 4.3 | The agreement provides that each EU Member State must first complete the procedures necessary for its entry into force, notifying the secretary-general of the Council of the European Union of this. |
| --- | --- |

4.3

The agreement provides that each EU Member State must first complete the procedures necessary for its entry into force, notifying the secretary-general of the Council of the European Union of this.

| 4.4 | Ratification by all EU Member States is a prerequisite for the agreement's entry into force. |
| --- | --- |

4.4

Ratification by all EU Member States is a prerequisite for the agreement's entry into force.

| 4.5 | The agreement can enter into force only once it has been approved by the last Member State. Given the current financial situation in Europe in general, and in some Member States in particular, this clause seems in and of itself to be enough to bring about the failure of the GMES programme. |
| --- | --- |

4.5

The agreement can enter into force only once it has been approved by the last Member State. Given the current financial situation in Europe in general, and in some Member States in particular, this clause seems in and of itself to be enough to bring about the failure of the GMES programme.

| 4.6 | The timetable and procedures for the organisation of this Council meeting are not yet known, which is risky given that the launch dates for the Sentinel -1, -2, and -3 satellites (2013) are fast approaching. |
| --- | --- |

4.6

The timetable and procedures for the organisation of this Council meeting are not yet known, which is risky given that the launch dates for the Sentinel -1, -2, and -3 satellites (2013) are fast approaching.

| 4.7 | As for the planning, management and implementation of the GMES fund, the communication provides for the Council to adopt a regulation on the basis of a Commission proposal. There is no draft version of this regulation available as yet. |
| --- | --- |

4.7

As for the planning, management and implementation of the GMES fund, the communication provides for the Council to adopt a regulation on the basis of a Commission proposal. There is no draft version of this regulation available as yet.

| 4.8 | The communication states that the financial regulation on the GMES fund, setting out the rules regarding its establishment and implementation and the presentation and auditing of accounts, is to be adopted by the Council following a proposal from the Commission. There is no draft version of this regulation available as yet. |
| --- | --- |

4.8

The communication states that the financial regulation on the GMES fund, setting out the rules regarding its establishment and implementation and the presentation and auditing of accounts, is to be adopted by the Council following a proposal from the Commission. There is no draft version of this regulation available as yet.

| 4.9 | So far, the development of the programme has cost EUR 3,2 billion, shouldered almost entirely by the ESA (EUR 1 890 million) and the EU (EUR 1 300 million). |
| --- | --- |

4.9

So far, the development of the programme has cost EUR 3,2 billion, shouldered almost entirely by the ESA (EUR 1 890 million) and the EU (EUR 1 300 million).

| 4.10 | The implementation of the programme as a whole and its maintenance, development and modernisation bring estimates as to the budget needed for the 2014-2020 period to EUR 5,8 billion, in other words, approximately 0,6 % of the EU budget for the same period, which the 2014-2020 MFF sets at EUR 1 025 billion. It is also worth noting that the EU budget amounts to approximately 1,1 % of gross national income. |
| --- | --- |

4.10

The implementation of the programme as a whole and its maintenance, development and modernisation bring estimates as to the budget needed for the 2014-2020 period to EUR 5,8 billion, in other words, approximately 0,6 % of the EU budget for the same period, which the 2014-2020 MFF sets at EUR 1 025 billion. It is also worth noting that the EU budget amounts to approximately 1,1 % of gross national income.

| 4.11 | It does not seem likely, however, that the proposed financing of GMES outside the EU budget would bring financial benefits, given that the 27 Member States would still have to fund it, if only through another financing channel based on a complex intergovernmental agreement. We can thus see no reason for it. |
| --- | --- |

4.11

It does not seem likely, however, that the proposed financing of GMES outside the EU budget would bring financial benefits, given that the 27 Member States would still have to fund it, if only through another financing channel based on a complex intergovernmental agreement. We can thus see no reason for it.

| 4.12 | As regards the space component, the ESA has a budget to launch all three "A" satellites of the Sentinel-1, -2 and -3 constellations. The launch of Sentinel-1 has already been paid for and there are no problems foreseen with funding the launch of the other two. The budget beyond 2013 therefore covers the deployment of the constellations in their entirety as planned in order to provide the service for which they were designed. |
| --- | --- |

4.12

As regards the space component, the ESA has a budget to launch all three "A" satellites of the Sentinel-1, -2 and -3 constellations. The launch of Sentinel-1 has already been paid for and there are no problems foreseen with funding the launch of the other two. The budget beyond 2013 therefore covers the deployment of the constellations in their entirety as planned in order to provide the service for which they were designed.

Governance

| 4.13 | The communication provides for numerous bodies to manage the operational phase of GMES. |
| --- | --- |

4.13

The communication provides for numerous bodies to manage the operational phase of GMES.

| 4.14 | The Commission would be responsible for political supervision and management. |
| --- | --- |

4.14

The Commission would be responsible for political supervision and management.

| 4.15 | According to the subsequent communication concerning the detailed implementation of the proposal under discussion (COM(2012) 218 final, 11.5.2012), the governing body of the GMES programme would be the GMES Council, with such sweeping powers as to overlap both with those typical of EU programmes and with those typical of a space agency. This would result in a duplication of powers and decision-making bodies, which is not conducive to efficient management of the EU's resources, which are scarce enough as it is. |
| --- | --- |

4.15

According to the subsequent communication concerning the detailed implementation of the proposal under discussion (COM(2012) 218 final, 11.5.2012), the governing body of the GMES programme would be the GMES Council, with such sweeping powers as to overlap both with those typical of EU programmes and with those typical of a space agency. This would result in a duplication of powers and decision-making bodies, which is not conducive to efficient management of the EU's resources, which are scarce enough as it is.

| 4.16 | As regards operations, technical coordination of the land monitoring service would be entrusted to the European Environment Agency (EEA); technical coordination of emergency management services would be entrusted to the European Emergency Response Centre (ERC); technical coordination of the atmosphere service would be entrusted to the European Centre for Medium-range Weather Forecasting (ECMWF); and a decision has yet to be taken regarding the management of the climate change, marine environment monitoring and security services; for other Commission services and European bodies the bodies proposed include the European Maritime Safety Agency (EMSA), the European Union Satellite Centre (EUSC), the European Agency for the Management of Operational Cooperation at the External Borders (FRONTEX) or the European Defence Agency (EDA). |
| --- | --- |

4.16

As regards operations, technical coordination of the land monitoring service would be entrusted to the European Environment Agency (EEA); technical coordination of emergency management services would be entrusted to the European Emergency Response Centre (ERC); technical coordination of the atmosphere service would be entrusted to the European Centre for Medium-range Weather Forecasting (ECMWF); and a decision has yet to be taken regarding the management of the climate change, marine environment monitoring and security services; for other Commission services and European bodies the bodies proposed include the European Maritime Safety Agency (EMSA), the European Union Satellite Centre (EUSC), the European Agency for the Management of Operational Cooperation at the External Borders (FRONTEX) or the European Defence Agency (EDA).

| 4.17 | For the space component, operational activities would go temporarily to the European Space Agency (ESA) for high resolution imagery observations over land and target-specific areas and to EUMETSAT for systematic and global observations of the atmosphere and oceans. Space component development activities may be entrusted to the ESA and the Commission. |
| --- | --- |

4.17

For the space component, operational activities would go temporarily to the European Space Agency (ESA) for high resolution imagery observations over land and target-specific areas and to EUMETSAT for systematic and global observations of the atmosphere and oceans. Space component development activities may be entrusted to the ESA and the Commission.

| 4.18 | The temporary arrangements set out above relate to the management of the entire constellations of Sentinel 1 and Sentinel 2, and the land component of Sentinel 3. The difficulties of taking on such a heavy burden in terms of organisation and resources under temporary arrangements are obvious. |
| --- | --- |

4.18

The temporary arrangements set out above relate to the management of the entire constellations of Sentinel 1 and Sentinel 2, and the land component of Sentinel 3. The difficulties of taking on such a heavy burden in terms of organisation and resources under temporary arrangements are obvious.

| 4.19 | The technical coordination of the in situ component may be entrusted to the European Environment Agency (EEA). |
| --- | --- |

4.19

The technical coordination of the in situ component may be entrusted to the European Environment Agency (EEA).

| 4.20 | It is not clear how the particular skills and management capacities of these bodies will be able to meet the operational requirements of a programme like GMES, whose predominant space component calls for specific competence. |
| --- | --- |

4.20

It is not clear how the particular skills and management capacities of these bodies will be able to meet the operational requirements of a programme like GMES, whose predominant space component calls for specific competence.

| 4.21 | The GMES Council, proposed in the subsequent GMES communication (10), duplicates many of the competences that are specific to the management of European space programmes, thus creating clear conflicts of competences and duplication of decision-making structures in Europe by setting up a sort of parallel space agency, which does not fit with the provisions of the Treaty on the Functioning of the European Union. |
| --- | --- |

4.21

The GMES Council, proposed in the subsequent GMES communication (10), duplicates many of the competences that are specific to the management of European space programmes, thus creating clear conflicts of competences and duplication of decision-making structures in Europe by setting up a sort of parallel space agency, which does not fit with the provisions of the Treaty on the Functioning of the European Union.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  OJ C 43, 15.2.2012, p. 20.

1

(2)  OJ C 43, 15.2.2012, p. 20.

2

(3)  COM(2012) 218 final, 11 May 2012.

3

(4)  COM(2011) 500 final PART I/II – A budget for Europe.

4

(5)  COM(2012) 218 final, 11 May 2012.

5

(6)  OJ C 43, 15.2.2012, p. 20.

6

(7)  2012/2509 (RSP).

7

(8)  http://multimedia.esa.int/Videos/2012/01/ESA-Director-General-2012-Press-Briefing (68:00).

8

(9)  COM(2012) 218 final, 11 May 2012.

9

(10)  COM(2012) 218 final, 11 May 2012.

10

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/76 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/76

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Opinion of the European Economic and Social Committee on the ‘Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) and amending Directive 98/26/EC’

COM(2012) 73 final — 2012/0029 (COD)

2012/C 299/14

Rapporteur: Mr MORGAN

On 15 March 2012 the European Parliament and on 3 April 2012 the Council of the European Union decided to consult the European Economic and Social Committee, under Article 114 of the Treaty on the Functioning of the European Union, on the

Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) and amending Directive 98/26/EC

COM(2012) 73 final — 2012/0029 (COD).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 12 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 110 votes to two with four abstentions.

1.   Conclusions and recommendations

| 1.1 | The EESC welcomes this Regulatory initiative. With the CSD Regulation in place, the Commission will have completed the three pillars of the new framework of financial infrastructure regulation in the EU: CSD, EMIR and MiFID/MiFIR. |
| --- | --- |

1.1

The EESC welcomes this Regulatory initiative. With the CSD Regulation in place, the Commission will have completed the three pillars of the new framework of financial infrastructure regulation in the EU: CSD, EMIR and MiFID/MiFIR.

| 1.2 | The introduction of the Euro has been a catalyst for cross-border investment in securities and the smooth functioning of cross-border investment is predicated on common standards across the Union. A high degree of settlement discipline reduces counterparty risk, or more specifically liquidity risk and replacement risk. More importantly, it promotes investor protection; helping to ensure that transactions between buyers and sellers of securities are settled in a safe and timely manner. In this respect, the Regulation is an important step forward towards the completion of the Single Market. |
| --- | --- |

1.2

The introduction of the Euro has been a catalyst for cross-border investment in securities and the smooth functioning of cross-border investment is predicated on common standards across the Union. A high degree of settlement discipline reduces counterparty risk, or more specifically liquidity risk and replacement risk. More importantly, it promotes investor protection; helping to ensure that transactions between buyers and sellers of securities are settled in a safe and timely manner. In this respect, the Regulation is an important step forward towards the completion of the Single Market.

| 1.3 | A major change proposed in the scope of CSD activities is the prohibition from holding a limited banking licence. This will affect the two big international CSDs which use their banking capabilities to support the settlement and custody process on a very large scale. The EESC recognises that the weight of global opinion (G20, European Commission, IOSCO, etc.) is strongly in favour of splitting out the credit institutions. The Committee supports the Commission and believes that a standalone bank is the best outcome. |
| --- | --- |

1.3

A major change proposed in the scope of CSD activities is the prohibition from holding a limited banking licence. This will affect the two big international CSDs which use their banking capabilities to support the settlement and custody process on a very large scale. The EESC recognises that the weight of global opinion (G20, European Commission, IOSCO, etc.) is strongly in favour of splitting out the credit institutions. The Committee supports the Commission and believes that a standalone bank is the best outcome.

| 1.4 | The proposal for a uniform settlement requirement at T+2 is very important. While it is likely that this can be achieved in the EU, a number of concerns will need to be addressed for global transactions. |
| --- | --- |

1.4

The proposal for a uniform settlement requirement at T+2 is very important. While it is likely that this can be achieved in the EU, a number of concerns will need to be addressed for global transactions.

| 1.5 | The proposals require the dematerialisation of tradable securities. There is a transition period ending on 1st January 2020. Even so, Member States have made uneven progress in this regard and a political compromise may be needed. |
| --- | --- |

1.5

The proposals require the dematerialisation of tradable securities. There is a transition period ending on 1st January 2020. Even so, Member States have made uneven progress in this regard and a political compromise may be needed.

2.   Introduction

| 2.1 | The Central Securities Depositories (CSDs) are systemically important institutions for the financial markets. Any trade of securities on or off a securities exchange is followed by post trade processes that lead to the settlement of that trade, which is the delivery of securities against cash. The CSDs are the key institutions that enable settlement by operating so-called securities settlement systems. CSDs also ensure the initial recording and the central maintenance of securities accounts that record how many securities have been issued by whom and each change in the holding of those securities. |
| --- | --- |

2.1

The Central Securities Depositories (CSDs) are systemically important institutions for the financial markets. Any trade of securities on or off a securities exchange is followed by post trade processes that lead to the settlement of that trade, which is the delivery of securities against cash. The CSDs are the key institutions that enable settlement by operating so-called securities settlement systems. CSDs also ensure the initial recording and the central maintenance of securities accounts that record how many securities have been issued by whom and each change in the holding of those securities.

| 2.2 | CSDs also play a crucial role for the collateral market especially for monetary policy purposes. For instance, almost all of the eligible collateral for central bank monetary policy operations in the EU, especially in the Euro area, flows through securities settlement systems operated by CSDs. |
| --- | --- |

2.2

CSDs also play a crucial role for the collateral market especially for monetary policy purposes. For instance, almost all of the eligible collateral for central bank monetary policy operations in the EU, especially in the Euro area, flows through securities settlement systems operated by CSDs.

| 2.3 | Securities settlement systems in the EU settled approximately EUR 920 trillion worth of transactions in 2010, and held almost EUR 39 trillion of securities at the end of 2010. There are over 30 CSDs in the EU, generally one in each country, and two "international" CSDs (ICSDs – Clearstream Banking Luxembourg and Euroclear Bank), which are a sub-category of CSDs specialised in the issuance of international bonds, commonly known as "Eurobonds". |
| --- | --- |

2.3

Securities settlement systems in the EU settled approximately EUR 920 trillion worth of transactions in 2010, and held almost EUR 39 trillion of securities at the end of 2010. There are over 30 CSDs in the EU, generally one in each country, and two "international" CSDs (ICSDs – Clearstream Banking Luxembourg and Euroclear Bank), which are a sub-category of CSDs specialised in the issuance of international bonds, commonly known as "Eurobonds".

| 2.4 | While generally safe and efficient within national borders, cross border settlement supporting cross border investment is more complex and attracts higher costs than domestic settlement. For example, the number of settlement fails is higher for cross-border transactions than for domestic transactions and cross-border settlement costs are up to four times higher than domestic settlement costs. In general, CSD costs are minimal within the overall costs involved in using all elements of the infrastructure, although they are an important cost for issuers. |
| --- | --- |

2.4

While generally safe and efficient within national borders, cross border settlement supporting cross border investment is more complex and attracts higher costs than domestic settlement. For example, the number of settlement fails is higher for cross-border transactions than for domestic transactions and cross-border settlement costs are up to four times higher than domestic settlement costs. In general, CSD costs are minimal within the overall costs involved in using all elements of the infrastructure, although they are an important cost for issuers.

| 2.5 | These safety problems are the result of a number of factors, including:






  — | The length of the settlement cycle. The time between trade and settlement is not harmonised in the EU, creating disruptions when securities are settled cross-border. |
| --- | --- | --- |

2.5

These safety problems are the result of a number of factors, including:

—

The length of the settlement cycle. The time between trade and settlement is not harmonised in the EU, creating disruptions when securities are settled cross-border.

| — | A small but substantial proportion of securities still exists in paper form. These are settled after a much longer settlement cycle, which increases the risk incurred by investors. |
| --- | --- |

—

A small but substantial proportion of securities still exists in paper form. These are settled after a much longer settlement cycle, which increases the risk incurred by investors.

| — | Settlement fails, which are situations where a transaction fails to be settled on the intended settlement date, are not subject to deterrent penalties in all markets and where they exist settlement discipline measures differ widely between markets. |
| --- | --- |

—

Settlement fails, which are situations where a transaction fails to be settled on the intended settlement date, are not subject to deterrent penalties in all markets and where they exist settlement discipline measures differ widely between markets.

| — | While Directive 98/26/EC on settlement finality in payment and securities settlement systems (SFD)1 reduces the disruption to a securities settlement system caused by insolvency proceedings against a participant in that system, it does not address other risks of the system or the resilience of the CSD operating the system. Some CSDs are subject to additional credit and liquidity risks derived from the provision of banking services ancillary to settlement. |
| --- | --- |

—

While Directive 98/26/EC on settlement finality in payment and securities settlement systems (SFD)1 reduces the disruption to a securities settlement system caused by insolvency proceedings against a participant in that system, it does not address other risks of the system or the resilience of the CSD operating the system. Some CSDs are subject to additional credit and liquidity risks derived from the provision of banking services ancillary to settlement.

| — | Agreements between CSDs to link-up, while being considered as a first step towards the consolidation of the European settlement markets, raise safety concerns in the absence of specific prudential rules for such links. In addition, they increase the interconnectedness between CSDs, which justifies further the introduction of a common prudential framework. |
| --- | --- |

—

Agreements between CSDs to link-up, while being considered as a first step towards the consolidation of the European settlement markets, raise safety concerns in the absence of specific prudential rules for such links. In addition, they increase the interconnectedness between CSDs, which justifies further the introduction of a common prudential framework.

| 2.6 | The absence of an efficient single internal market for settlement also raises important concerns. Important barriers to the European post trading market continue to exist, such as for instance the limitation of securities issuers' access to CSDs, different national licensing regimes and rules for CSDs across the EU and limited competition between different national CSDs. These barriers result in a very fragmented market. As a consequence, the cross-border settlement of transactions relies on unnecessarily complex holding ‧chains‧ often involving several CSDs and several other intermediaries. This has a negative impact on the efficiency, but also on the risks associated with cross-border transactions. |
| --- | --- |

2.6

The absence of an efficient single internal market for settlement also raises important concerns. Important barriers to the European post trading market continue to exist, such as for instance the limitation of securities issuers' access to CSDs, different national licensing regimes and rules for CSDs across the EU and limited competition between different national CSDs. These barriers result in a very fragmented market. As a consequence, the cross-border settlement of transactions relies on unnecessarily complex holding ‧chains‧ often involving several CSDs and several other intermediaries. This has a negative impact on the efficiency, but also on the risks associated with cross-border transactions.

| 2.7 | These problems are important as cross-border transactions in Europe, ranging from usual purchases/sales of securities to collateral transfers, continue to increase and CSDs become increasingly interconnected. These trends are expected to accelerate with the advent of Target2 Securities (T2S), a project launched by the Eurosystem to provide a borderless common platform for securities settlement in Europe, which is scheduled to start in 2015. |
| --- | --- |

2.7

These problems are important as cross-border transactions in Europe, ranging from usual purchases/sales of securities to collateral transfers, continue to increase and CSDs become increasingly interconnected. These trends are expected to accelerate with the advent of Target2 Securities (T2S), a project launched by the Eurosystem to provide a borderless common platform for securities settlement in Europe, which is scheduled to start in 2015.

3.   Gist of the Proposed Regulation

| 3.1 | The proposed Regulation has two main parts: measures addressing all market operators in the context of securities settlement (Title II) and measures addressing specifically CSDs (Titles III, IV and V). |
| --- | --- |

3.1

The proposed Regulation has two main parts: measures addressing all market operators in the context of securities settlement (Title II) and measures addressing specifically CSDs (Titles III, IV and V).

Securities Settlement

| 3.2 | Title II imposes the so-called dematerialisation/immobilisation of securities, which is the issuance of securities in book entry form. This measure is aimed at increasing the efficiency of settlement, facilitating the shortening of settlement periods and ensuring the integrity of a securities issue by allowing for easier reconciliation of securities holdings. The proposed Regulation provides for a sufficiently long transitional period, until 1 January 2020, in order to allow market operators from the Member States where significant amounts of paper securities still exist to comply with this measure. |
| --- | --- |

3.2

Title II imposes the so-called dematerialisation/immobilisation of securities, which is the issuance of securities in book entry form. This measure is aimed at increasing the efficiency of settlement, facilitating the shortening of settlement periods and ensuring the integrity of a securities issue by allowing for easier reconciliation of securities holdings. The proposed Regulation provides for a sufficiently long transitional period, until 1 January 2020, in order to allow market operators from the Member States where significant amounts of paper securities still exist to comply with this measure.

| 3.3 | It harmonises the settlement period for the securities transactions across the EU. In Europe most securities transactions are settled either two or three days after the trading day, depending on each market. The settlement period will be harmonised and set at two days after the trading day, although shorter settlement periods will be allowed. |
| --- | --- |

3.3

It harmonises the settlement period for the securities transactions across the EU. In Europe most securities transactions are settled either two or three days after the trading day, depending on each market. The settlement period will be harmonised and set at two days after the trading day, although shorter settlement periods will be allowed.

| 3.4 | It harmonises settlement discipline measures across the EU. These consist of ex ante measures to prevent settlement fails, and ex post measures to address settlement fails. |
| --- | --- |

3.4

It harmonises settlement discipline measures across the EU. These consist of ex ante measures to prevent settlement fails, and ex post measures to address settlement fails.

Authorisation and Supervision of CSDs

| 3.5 | Directive 98/26/EC defines already securities settlement systems as formal arrangements allowing transfers of securities between different participants. However, that directive does not address the institutions which are responsible for operating such systems. In view of the increasing complexity of such systems and risks related to settlement, it is essential that institutions operating securities settlement systems are legally defined, authorised and supervised along a set of common prudential standards. |
| --- | --- |

3.5

Directive 98/26/EC defines already securities settlement systems as formal arrangements allowing transfers of securities between different participants. However, that directive does not address the institutions which are responsible for operating such systems. In view of the increasing complexity of such systems and risks related to settlement, it is essential that institutions operating securities settlement systems are legally defined, authorised and supervised along a set of common prudential standards.

| 3.6 | CSDs will have to be authorised and supervised by national competent authorities of the place where they are established. However, in view of the increasing cross-border element of their activity, other authorities, related to the securities settlement system(s) operated by the CSD and to other group entities would have to be consulted. ESMA will have an important role in developing draft technical standards to harmonise the authorisation process and to ensure cooperation between authorities. |
| --- | --- |

3.6

CSDs will have to be authorised and supervised by national competent authorities of the place where they are established. However, in view of the increasing cross-border element of their activity, other authorities, related to the securities settlement system(s) operated by the CSD and to other group entities would have to be consulted. ESMA will have an important role in developing draft technical standards to harmonise the authorisation process and to ensure cooperation between authorities.

| 3.7 | The proposal grants authorised CSDs a "passport" to provide services in the Union, either by providing directly a service in another Member State or by establishing a branch in that Member State. A CSD from a third country can be granted access to the Union if it is recognised by ESMA. |
| --- | --- |

3.7

The proposal grants authorised CSDs a "passport" to provide services in the Union, either by providing directly a service in another Member State or by establishing a branch in that Member State. A CSD from a third country can be granted access to the Union if it is recognised by ESMA.

Requirements for CSDs

| 3.8 | Since CSDs are systemically important and perform critical services for the securities market, they must be subject to high prudential standards to ensure their viability and the protection of their participants. The requirements for CSDs are grouped into several categories: organisational requirements, conduct of business rules, requirements for CSD services, prudential requirements and requirements for CSD links. |
| --- | --- |

3.8

Since CSDs are systemically important and perform critical services for the securities market, they must be subject to high prudential standards to ensure their viability and the protection of their participants. The requirements for CSDs are grouped into several categories: organisational requirements, conduct of business rules, requirements for CSD services, prudential requirements and requirements for CSD links.

| 3.9 | The conduct of business rules require that operations be non-discriminatory, transparent and strictly risk based and that a full disclosure of costs and revenues be made to the competent authorities. |
| --- | --- |

3.9

The conduct of business rules require that operations be non-discriminatory, transparent and strictly risk based and that a full disclosure of costs and revenues be made to the competent authorities.

| 3.10 | The requirements for CSD services include obligations about the intra-day settlement of accounts and the segregation of accounts. Regarding cash settlement, the proposal requires CSDs to settle on central bank accounts whenever practical and available. Commercial bank money settlement is allowed, however, contrary to some current practices, it must be done via a separate credit institution that acts as settlement agent. |
| --- | --- |

3.10

The requirements for CSD services include obligations about the intra-day settlement of accounts and the segregation of accounts. Regarding cash settlement, the proposal requires CSDs to settle on central bank accounts whenever practical and available. Commercial bank money settlement is allowed, however, contrary to some current practices, it must be done via a separate credit institution that acts as settlement agent.

| 3.11 | The prudential requirements for the CSDs themselves include important provisions on the mitigation of operational risk. Since CSDs would not be permitted to perform banking type of services directly, the key risk CSDs will face is operational risk. These provisions include appropriate measures to ensure the continuity of operations, including settlement, at all times. Capital requirements are also set by reference to operating expenses – CSDs should hold capital, retained earnings and reserves to cover at least six months of operating expenses. |
| --- | --- |

3.11

The prudential requirements for the CSDs themselves include important provisions on the mitigation of operational risk. Since CSDs would not be permitted to perform banking type of services directly, the key risk CSDs will face is operational risk. These provisions include appropriate measures to ensure the continuity of operations, including settlement, at all times. Capital requirements are also set by reference to operating expenses – CSDs should hold capital, retained earnings and reserves to cover at least six months of operating expenses.

| 3.12 | The requirement for CSD links involves the setting up of identical settlement finality rules. |
| --- | --- |

3.12

The requirement for CSD links involves the setting up of identical settlement finality rules.

Access to CSDs

| 3.13 | Opening up the market for CSD services and removing barriers of access is one of the objectives of this initiative. Three types of access are considered: (a) between issuers and CSDs, (b) between CSDs themselves, and (c) between CSDs and other market infrastructures. |
| --- | --- |

3.13

Opening up the market for CSD services and removing barriers of access is one of the objectives of this initiative. Three types of access are considered: (a) between issuers and CSDs, (b) between CSDs themselves, and (c) between CSDs and other market infrastructures.

| 3.14 | The draft introduces the right of issuers to record their securities in any CSD authorised in the Union as well as the right for CSDs to provide services for securities that have been constituted under the law of another Member State. |
| --- | --- |

3.14

The draft introduces the right of issuers to record their securities in any CSD authorised in the Union as well as the right for CSDs to provide services for securities that have been constituted under the law of another Member State.

| 3.15 | A CSD should have the right to receive transaction feeds from CCPs and trading venues and those infrastructures should have access to securities settlement systems operated by CSDs. |
| --- | --- |

3.15

A CSD should have the right to receive transaction feeds from CCPs and trading venues and those infrastructures should have access to securities settlement systems operated by CSDs.

Credit Institutions

| 3.16 | When central bank settlement is not practical or available, CSDs may offer commercial bank money settlement to their participants. However, CSDs should not provide the banking services ancillary to settlement themselves, but should be authorised by their competent authorities to designate a credit institution to act as settlement agent to open cash accounts and grant credit facilities to facilitate settlement. |
| --- | --- |

3.16

When central bank settlement is not practical or available, CSDs may offer commercial bank money settlement to their participants. However, CSDs should not provide the banking services ancillary to settlement themselves, but should be authorised by their competent authorities to designate a credit institution to act as settlement agent to open cash accounts and grant credit facilities to facilitate settlement.

| 3.17 | This separation between CSDs and settlement agents is an important measure to address and increase the safety of CSDs. Banking services ancillary to settlement increase the risks to which CSDs are exposed and therefore the likelihood of CSDs suffering a default or being subject to severe stress. |
| --- | --- |

3.17

This separation between CSDs and settlement agents is an important measure to address and increase the safety of CSDs. Banking services ancillary to settlement increase the risks to which CSDs are exposed and therefore the likelihood of CSDs suffering a default or being subject to severe stress.

| 3.18 | While the banking services are usually provided by some CSDs on intraday basis (are fully covered by collateral and other financial resources) and are limited to the services ancillary to settlement, the amounts handled are however significant and any default of such CSDs would have negative consequences for the securities and payments markets. The requirement to provide the banking services in a separate legal entity than the one which provides the core CSD services will prevent the transmission of risks from the banking services to the provision of core CSD services, in particular in case of insolvency or severe stress resulting from the banking services. |
| --- | --- |

3.18

While the banking services are usually provided by some CSDs on intraday basis (are fully covered by collateral and other financial resources) and are limited to the services ancillary to settlement, the amounts handled are however significant and any default of such CSDs would have negative consequences for the securities and payments markets. The requirement to provide the banking services in a separate legal entity than the one which provides the core CSD services will prevent the transmission of risks from the banking services to the provision of core CSD services, in particular in case of insolvency or severe stress resulting from the banking services.

| 3.19 | For the CSDs which currently provide banking services, the main costs associated with this measure are the legal costs involved in the setting-up a separate legal entity for providing banking services. The Commission believes that there are no less stringent alternatives to the separation of banking services, which would entirely eliminate the danger of transmission of risks from the banking services to the core CSD services. |
| --- | --- |

3.19

For the CSDs which currently provide banking services, the main costs associated with this measure are the legal costs involved in the setting-up a separate legal entity for providing banking services. The Commission believes that there are no less stringent alternatives to the separation of banking services, which would entirely eliminate the danger of transmission of risks from the banking services to the core CSD services.

| 3.20 | In order to secure the efficiencies resulting from the provision of both CSD and banking services within the same group of undertakings, the requirement that banking services be carried out by a separate credit institution should not prevent that credit institution from belonging to the same group of undertakings as the CSD. |
| --- | --- |

3.20

In order to secure the efficiencies resulting from the provision of both CSD and banking services within the same group of undertakings, the requirement that banking services be carried out by a separate credit institution should not prevent that credit institution from belonging to the same group of undertakings as the CSD.

| 3.21 | The competent authority should be able to demonstrate on a case by case basis the absence of systemic risk incurred by the provision of both CSD and banking services by the same legal entity. In such a case, a reasoned request could be made to the European Commission which may authorise the derogation. In any case, the activities of a CSD licensed as credit institution should be limited to the provision of banking services ancillary to settlement. |
| --- | --- |

3.21

The competent authority should be able to demonstrate on a case by case basis the absence of systemic risk incurred by the provision of both CSD and banking services by the same legal entity. In such a case, a reasoned request could be made to the European Commission which may authorise the derogation. In any case, the activities of a CSD licensed as credit institution should be limited to the provision of banking services ancillary to settlement.

Sanctions

| 3.22 | A stock taking of the national supervisory regimes in place has, for example, revealed that the levels of pecuniary sanctions vary widely among Member States, that some competent authorities do not have certain important sanctioning powers at their disposal and that some competent authorities cannot impose sanctions on natural and legal persons. Therefore the Commission proposes minimum set of administrative sanctions and measures should be available to the competent authorities, including withdrawal of authorisation, public warnings, dismissal of management, restitution of profits gained from the breaches of this Regulation where those can be determined, and administrative fines. |
| --- | --- |

3.22

A stock taking of the national supervisory regimes in place has, for example, revealed that the levels of pecuniary sanctions vary widely among Member States, that some competent authorities do not have certain important sanctioning powers at their disposal and that some competent authorities cannot impose sanctions on natural and legal persons. Therefore the Commission proposes minimum set of administrative sanctions and measures should be available to the competent authorities, including withdrawal of authorisation, public warnings, dismissal of management, restitution of profits gained from the breaches of this Regulation where those can be determined, and administrative fines.

4.   EESC Perspective

| 4.1 | The EESC welcomes this Regulatory initiative. With the CSD Regulation in place, the Commission will have completed the three pillars of the new framework of financial infrastructure regulation in the EU: CSD, EMIR and MiFID/MiFIR. Together, these three instruments comprise a wide ranging and comprehensive coverage of the market. The Commission must take care to ensure that these instruments dovetail together without overlaps which could lead to varying interpretations of the new rules. It is also vital that these various legislative initiatives are coherent and consistent with each other in key areas. |
| --- | --- |

4.1

The EESC welcomes this Regulatory initiative. With the CSD Regulation in place, the Commission will have completed the three pillars of the new framework of financial infrastructure regulation in the EU: CSD, EMIR and MiFID/MiFIR. Together, these three instruments comprise a wide ranging and comprehensive coverage of the market. The Commission must take care to ensure that these instruments dovetail together without overlaps which could lead to varying interpretations of the new rules. It is also vital that these various legislative initiatives are coherent and consistent with each other in key areas.

| 4.2 | ESMA will have responsibility for drafting technical standards for this new legislation, as well as for the other two pillars. The Committee notes the scale of tasks and responsibilities being assigned to ESMA in a relatively short time frame. Inter alia, these also include responsibilities for the regulation of Credit Rating Agencies, the supervision of the Audit sector, involvement with short selling and credit default swaps, supervision of the AIFM Directive. It is vital that ESMA has the headcount with the skill and the experience to carry out its tasks effectively. |
| --- | --- |

4.2

ESMA will have responsibility for drafting technical standards for this new legislation, as well as for the other two pillars. The Committee notes the scale of tasks and responsibilities being assigned to ESMA in a relatively short time frame. Inter alia, these also include responsibilities for the regulation of Credit Rating Agencies, the supervision of the Audit sector, involvement with short selling and credit default swaps, supervision of the AIFM Directive. It is vital that ESMA has the headcount with the skill and the experience to carry out its tasks effectively.

| 4.3 | With financial services firms being subject to new regulation, new supervision, new prudential requirements, etc, the CSD regulations will create another set of changes for the financial services industry. The EESC supports the introduction of these further changes, but urges regulators and supervisors, particularly ESMA, to be alert to potential problems which could be caused by regulatory overload. |
| --- | --- |

4.3

With financial services firms being subject to new regulation, new supervision, new prudential requirements, etc, the CSD regulations will create another set of changes for the financial services industry. The EESC supports the introduction of these further changes, but urges regulators and supervisors, particularly ESMA, to be alert to potential problems which could be caused by regulatory overload.

| 4.4 | The introduction of the Euro has been a catalyst for cross-border investment in securities and the smooth functioning of cross-border investment is predicated on common standards across the Union. A high degree of settlement discipline reduces counterparty risk, or more specifically liquidity risk and replacement risk. More importantly, it promotes investor protection; helping to ensure that transactions between buyers and sellers of securities are settled in a safe and timely manner. In this respect, the Regulation is an important step forward towards the completion of the Single Market. |
| --- | --- |

4.4

The introduction of the Euro has been a catalyst for cross-border investment in securities and the smooth functioning of cross-border investment is predicated on common standards across the Union. A high degree of settlement discipline reduces counterparty risk, or more specifically liquidity risk and replacement risk. More importantly, it promotes investor protection; helping to ensure that transactions between buyers and sellers of securities are settled in a safe and timely manner. In this respect, the Regulation is an important step forward towards the completion of the Single Market.

| 4.5 | Also in the context of the Single Market, the "passporting" proposal is to be welcomed as it will help to remove barriers to access while in the same vein, issuers will be given the right to record their securities in any CSD authorised in the EU. This breaking of national monopolies is also to be welcomed in the Internal Market. |
| --- | --- |

4.5

Also in the context of the Single Market, the "passporting" proposal is to be welcomed as it will help to remove barriers to access while in the same vein, issuers will be given the right to record their securities in any CSD authorised in the EU. This breaking of national monopolies is also to be welcomed in the Internal Market.

| 4.6 | The low risk approach to the definition of the CSD business model, combined with the fact that the model will in effect be limited by regulation, may be expected to have both positive and negative effects on CSD competitiveness and innovation. Opening up the cross border market will be an undoubted plus. Otherwise, CSDs are permitted to undertake a range of services so long as they contribute to enhancing the safety, efficiency and transparency of the securities markets. In addition to this and in order to further stimulate innovation, the EESC proposes that CSDs only be prohibited from owning non CSD businesses when such activities would be to the detriment of the CSD's risk profile. |
| --- | --- |

4.6

The low risk approach to the definition of the CSD business model, combined with the fact that the model will in effect be limited by regulation, may be expected to have both positive and negative effects on CSD competitiveness and innovation. Opening up the cross border market will be an undoubted plus. Otherwise, CSDs are permitted to undertake a range of services so long as they contribute to enhancing the safety, efficiency and transparency of the securities markets. In addition to this and in order to further stimulate innovation, the EESC proposes that CSDs only be prohibited from owning non CSD businesses when such activities would be to the detriment of the CSD's risk profile.

| 4.7 | One major change proposed for the scope of CSD activities is the prohibition of a CSD from holding a limited banking licence. This will affect the two big international CSDs - Euroclear and Clearstream - which use their banking capabilities to support the settlement and custody process on a very large scale. The scope of the banking activities is very limited, and it came through the recent crisis without any problems. Nevertheless, the EESC recognises that the weight of global opinion (G20, European Commission, IOSCO, etc.) is strongly in favour of splitting out the credit institutions. CSDs will be permitted to set up a bank with limited scope under group ownership. This is not expected to cause a major revision of the CSD business model. |
| --- | --- |

4.7

One major change proposed for the scope of CSD activities is the prohibition of a CSD from holding a limited banking licence. This will affect the two big international CSDs - Euroclear and Clearstream - which use their banking capabilities to support the settlement and custody process on a very large scale. The scope of the banking activities is very limited, and it came through the recent crisis without any problems. Nevertheless, the EESC recognises that the weight of global opinion (G20, European Commission, IOSCO, etc.) is strongly in favour of splitting out the credit institutions. CSDs will be permitted to set up a bank with limited scope under group ownership. This is not expected to cause a major revision of the CSD business model.

| 4.8 | Notwithstanding the Commission’s stated view that there is no alternative to the separation of banking from the CSD’s core business, the provision outlined in paragraph 3.21 above provides for a possible derogation when it is supported by the national competent authority. Although the possibility of the derogation exists, the Committee supports the Commission and believes that a stand alone bank is the best outcome. |
| --- | --- |

4.8

Notwithstanding the Commission’s stated view that there is no alternative to the separation of banking from the CSD’s core business, the provision outlined in paragraph 3.21 above provides for a possible derogation when it is supported by the national competent authority. Although the possibility of the derogation exists, the Committee supports the Commission and believes that a stand alone bank is the best outcome.

| 4.9 | The proposals require the dematerialisation of tradable securities. There is a transition period ending in 2020. Even so, Member States have made uneven progress in this regard and a political compromise may be needed. |
| --- | --- |

4.9

The proposals require the dematerialisation of tradable securities. There is a transition period ending in 2020. Even so, Member States have made uneven progress in this regard and a political compromise may be needed.

| 4.10 | Another key proposal is a uniform settlement requirement at T+2. While it is likely that this can be achieved in the Internal Market; a number of concerns will need to be addressed for global transactions. These include the complications created by foreign exchange, the possibility that stock may be on loan, time zone mismatches, different settlement cycles in the markets of other regions and the significant cost which may be involved to automate systems in order to make T+2 possible. |
| --- | --- |

4.10

Another key proposal is a uniform settlement requirement at T+2. While it is likely that this can be achieved in the Internal Market; a number of concerns will need to be addressed for global transactions. These include the complications created by foreign exchange, the possibility that stock may be on loan, time zone mismatches, different settlement cycles in the markets of other regions and the significant cost which may be involved to automate systems in order to make T+2 possible.

| 4.11 | The Regulation basically requires all CSDs to put in place regimes which "fine" participants who do not settle on time, but the regime must be tailored to the instrument. Fining late delivery of illiquid or SME shares would have a detrimental effect on their market liquidity. Derogation should be considered for listed SMEs. The draft Regulation does not discuss the destination of funds raised by fines. |
| --- | --- |

4.11

The Regulation basically requires all CSDs to put in place regimes which "fine" participants who do not settle on time, but the regime must be tailored to the instrument. Fining late delivery of illiquid or SME shares would have a detrimental effect on their market liquidity. Derogation should be considered for listed SMEs. The draft Regulation does not discuss the destination of funds raised by fines.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/81 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/81

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Opinion of the European Economic and Social Committee on the ‘Proposal for a directive of the European Parliament and of the Council relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systems’

COM(2012) 84 final — 2012/0035 (COD)

2012/C 299/15

Rapporteur: Ms KÖSSLER

On 14 March 2012 and 13 March 2012 respectively, the Council and the European Parliament decided to consult the European Economic and Social Committee, under Article 114 of the Treaty on the Functioning of the European Union (TFEU), on the

Proposal for a directive of the European Parliament and of the Council relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systems

COM(2012) 84 final — 2012/0035 (COD).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 12 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 123 votes to 1 with 8 abstentions.

1.   Conclusions and recommendations

1.1   The EESC highlights that health is a high priority for Europe’s citizens (1) and reaffirms that every medicine authorised in the EU should be available to patients in all Member States.

1.2   The EESC underscores that access to essential medicines is part of the fulfilment of the right to the highest attainable standard of health and the EU’s commitment to the principle of "well-being" (Article 3 TEU).

1.3   The EESC underlines that the directive cannot only apply to part of the market for medicinal products, but must apply to the whole market, including private health insurance schemes and public or private institutions as major sources of demand for medicinal products, so as to promote equal competition and create a single market.

1.4   The EESC notes that health inequalities have been estimated to cost the EU around EUR 141 billion in 2004 or 1,4 % of GDP (2).

1.5   The EESC notes with concern that pricing and reimbursement conditions for accessing medicinal products are poorly understood in the EU27.

1.6   The EESC underscores the mortality and morbidity differences that currently exist between EU Member States in particular for cardiovascular diseases, cancers and respiratory disease (3).

1.7   The EESC notes that pricing and reimbursement processes stretching beyond the time-limits laid down in the directive contribute to postponing the launch of innovative medicines to the market (4).

1.8   The EESC highlights that this impact patients with serious or life-threatening diseases for which no alternative treatment is available, delays in access to medicines may dramatically affect the living conditions of patients and reduce their life expectancy.

1.9   The EESC highlights that when a patient requires a medicinal product, it is essential for the patient to know in advance which rules will be applicable for access and reimbursement. This should help the patient in making an informed choice, and should avoid misapprehension and misunderstanding. It should also establish a high level of trust between the patient and the healthcare provider.

1.10   The EESC suggests that this would be appropriately achieved through the establishment of an open and transparent procedure as proposed in part by the Commission.

1.11   The EESC suggests that the preparation and implementation of the EU's activities in the field of transparency for pricing and reimbursement require close cooperation with the specialised bodies and involvement of "interested stakeholders" which requires a framework for the purpose of regular consultations.

1.11.1   The EESC hereby suggests that the composition of the Expert Group (Transparency Committee), established by Directive 89/105/EEC and maintained in the current proposal, would have a broader representation.

1.11.2   The EESC proposes that this "Expert Group" acting in the public interest shall assist the Commission in formulating and implementing the EU's activities in the field of procedural areas for transparency, and shall foster exchanges of relevant experience, policies and practices between the Member States and the various "interested stakeholders" involved.

1.11.3   The EESC emphasises that efficient monitoring and support at the EU level through effective implementation with the corresponding EU monitoring and evaluation is essential for detecting distortions and delays of access in the markets for patients. Therefore, close cooperation and coordination between the Commission, national authorities and "interested stakeholders" is necessary (5).

1.11.4   The EESC underlines the importance of the Commission producing an Annual Report that would map out the effective enforcement of the Transparency Directive by identifying the procedural mechanisms for pricing and reimbursement, and the compliance with the Directive’s time limits in each Member State.

1.12   The EESC would emphasise that time limits are not always respected and effective market access and utilisation vary strongly between and within the Member States (6).

1.12.1   The EESC considers that the judicial remedies available in the Member States have played a limited role in ensuring compliance with the time limits due to the often lengthy procedures in national jurisdictions, which deter affected companies from initiating legal action.

1.12.2   The EESC considers that effective mechanisms are necessary to control and enforce compliance with the time limits for pricing and reimbursement decisions.

1.12.3   The EESC calls on the Member States to provide due process rights which should be included for all relevant stakeholders and cover at a minimum: (i) a right to be heard, (ii) a right of access to the administrative file, including relevant scientific evidence and reports, and (iii) a right to obtain a reasoned decision.

1.13   With respect to the shorter time limits, the EESC points out that the highest priority must be patient safety. In particular, all new findings and indications relevant to patient safety must be taken into account in the pricing and reimbursement procedure by expanding the scope of the HTA and through comparison with therapeutic alternatives. Moreover, the related, necessary negotiations over price carried out with each company will not be made any simpler by shortening the time limit and thus will not be concluded any more quickly.

1.13.1   The EESC emphasises that there should be coordinated assessment at national level to avoid regional rules hindering access to medicinal products for patients in different Member State regions. National and regional authorities should reinforce their coordination in all related activities in order to facilitate the equal access to medicinal products for all citizens within a Member State (7).

1.13.2   The EESC emphasises that Member States could make time limits more efficient by clarifying that authorities must acknowledge receipt of application within 10 days and must request any missing information within an appropriate timeframe following receipt of application so that no unnecessary delay is incurred before the applicant can submit the additional information requested.

1.14   The EESC considers that patient and consumer organizations should have the right to request initiation of the process of inclusion of medical products in health insurance systems as well as have information about the progress of this process.

1.14.1   The EESC notes that statutory and private health insurance companies have an increasing role and influence, for example through discount agreements with pharmaceutical companies, and therefore suggests that Member States shall carry out a review, at least once a year, of their activities. The Member States should regularly carry out a review of the prices and reimbursement of those medicinal products where costs are unreasonably high for the health insurance schemes and patients.

1.15   The EESC supports the inclusion of criteria through guidelines and inclusion of definitions to ensure that the core objectives of the proposal are reached, but insists that this must comply with Article 168(7) of the Treaty on the Functioning of the European Union, under which Member States are responsible for the organisation of their healthcare system and for the delivery of health services and medical care, including the allocation of resources assigned to them.

1.15.1   The EESC urges Member States to work towards a standardised approach with respect to the definition of these criteria aiming to establish value-based pricing systems across Europe. The criteria should incorporate measurement of "unmet medical need", "innovation" and "societal benefits".

1.15.2   The EESC proposes that the Commission shall monitor the implementation of standardised criteria and produce a report on pricing and reimbursement systems across the Member States 2 years after the implementation of this Directive.

1.16   The EESC urges that decisions on price increases, price freeze, price reductions and other price approvals should be based on transparent and objective criteria.

1.17   The EESC opposes Article 14 of the proposal (on non-interference of intellectual property rights). The Commission needs to strike a balance between authorisation of reimbursement for manufacturers of medicinal products and the legitimate interests of third parties in their intellectual property rights.

1.18   In line with Article 3(5) of the Treaty on European Union, the EESC calls on the European Commission, in international, multilateral and bilateral agreements, to accept special rules for vital, expensive medicines (e.g. to combat AIDS) applicable to developing and emerging countries.

2.   Gist of the Commission proposal

2.1   Since the adoption of Directive 89/105/EEC, the pricing and reimbursement procedures have evolved and have become more complex. This Directive has never been amended since its entry into force.

2.2   The proposal sets out common rules and regulatory guidelines with the objective to ensure efficiency and transparency in pricing, funding and reimbursement procedures.

2.3   The following situations are affected by the revision which includes:

| a) | pharmaceutical companies, including the innovative industry and the generic industry, for which access to market is indeed essential to ensure the competitiveness and profitability of the industry; |
| --- | --- |

a)

pharmaceutical companies, including the innovative industry and the generic industry, for which access to market is indeed essential to ensure the competitiveness and profitability of the industry;

| b) | European citizens and patients who bear the consequences of unjustified obstacles to pharmaceutical trade and of the delayed availability of medicines products; |
| --- | --- |

b)

European citizens and patients who bear the consequences of unjustified obstacles to pharmaceutical trade and of the delayed availability of medicines products;

| c) | public health budgets, including statutory, contribution-funded heath insurance schemes, as pricing and reimbursement systems influence the uptake of medicines and the expenditure and potential savings to be realised by the social security systems. |
| --- | --- |

c)

public health budgets, including statutory, contribution-funded heath insurance schemes, as pricing and reimbursement systems influence the uptake of medicines and the expenditure and potential savings to be realised by the social security systems.

2.3.1   The proposal does not cover private health insurance and public and private bodies such as hospitals, large pharmacies and other medical service providers. The EESC would stress that the directive cannot apply only to part of the pharmaceutical market but must apply to the market as a whole, in the interests of a level competitive playing field and the single market.

2.4   While the Directive applies only to medicinal products, medical devices can be subject to pricing regulation in the Member States and/or to decisions concerning their inclusion in the health insurance systems.

3.   General comments

3.1   In view of existing problems in several Member States, the EESC welcomes the Commission's proposal to increase cooperation at the EU level in order to ensure access to affordable medication and to urgently needed medication for all patients on an equal basis, whilst fostering the development of new medicines.

3.2   The EESC would point out, however, that the legal basis should not only be Article 114 of the Treaty on the Functioning of the European Union but that due account must also be taken of Article 168(7) of the same treaty under which Member States are responsible for the organisation of their healthcare system and for the delivery of health services and medical care, including the allocation of resources assigned to them.

3.3   The EESC points out that pricing and reimbursement procedures often produce unnecessary delay and involve excessive administrative procedures (8) for the access of innovative, orphan and generic medicines in Union markets, in particular in those Member States where the national market is small and the company return on investment is low.

3.4   The EESC welcomes the provision of maintaining the Transparency Committee (Article 20) however, suggests that this "Expert Group" would have broader representation which would allow regular consultations with the "interested stakeholders" to ensure procedural efficiency in pricing and reimbursement for medicinal products.

3.5   The EESC takes due account of the development of a shared understanding that pricing and reimbursement policies need to balance (1) timely and equitable access to pharmaceuticals for all patients in the EU, (2) control of pharmaceutical expenditure for Member States, and (3) reward for valuable innovation within a competitive and dynamic market that also encourages Research & Development.

3.5.1   The EESC considers that effective mechanisms are necessary to control and enforce compliance with the time limits for pricing and reimbursement decisions.

3.5.2   The EESC would stress that an Annual Report should be drafted that would map out the effective enforcement of the Transparency Directive by identifying the mechanisms for pricing and reimbursement, and compliance with the Directive’s time limits in each Member State. The EESC would emphasise the need for a standardised methodology for the collection of information for this report and welcomes the Commission's proposal imposing on Member States an obligation to regularly report on the implementation of the time limits (Article 17) which will ensure better enforcement of the Directive.

3.6   Under Article 3(5) of the Treaty on European Union, the EU is also to contribute to the eradication of poverty and the protection of human rights in its external relations. The EESC therefore calls on the European Commission, in international, multilateral and bilateral agreements, to accept special rules for vital, expensive medicines (e.g. to combat AIDS) applicable to developing and emerging countries.

4.   Specific comments

4.1   Definition

The EESC would draw attention to the case-law of the European Court of Justice that recognises the necessity of an extensive interpretation of the provisions of the directive in order to ensure that its core objectives are not jeopardised by national systems and policies. Therefore, the EESC would emphasise its following understanding:

4.1.1   "Health technology assessment": the EESC would draw attention to the definition as agreed by the EUnetHTA (9) and recommend that it be adopted.

4.1.2   "Stakeholder involvement" means the timely involvement of "interested stakeholders" – including patient and consumer advocates, marketing authorisation holder and medical experts including independent scientists – throughout the decision making process to allow for the right to be heard both on the conceptual design of the assessment and the conduct of that assessment.

4.1.3   "Patient and consumer involvement" means that patients take an active role in activities or decisions that will have consequences for the patient community, because of their specific knowledge and relevant experience as patients and healthcare users.

4.1.4   "Objective and verifiable criteria" shall be defined for the selection, evaluation methods and evidence requirements for products subject to a Health Technology Assessment (HTA); this includes avoiding any unnecessary duplication of work in particular in relation to the marketing authorisation procedure and to HTAs conducted in other EU countries.

4.1.5   Timelines shall be clearly defined: if HTA is a pre-condition for price control pursuant to Article 3 and/or inclusion in a positive list pursuant to Article 7, the assessment must respect the time periods stipulated by these articles.

4.2   Scope

4.2.1   The EESC encourages clarification that any measure linked to the decision-making process in health insurance systems, including recommendations that may be required, is covered under the scope of the Directive.

4.2.2   The EESC supports provisions of this Directive that apply to measures intended to determine which medicinal products may be included in contractual agreements or public procurement procedures.

4.3   Patient Centred Approach for Procedural Accessibility

The EESC encourages a patient centred approach when determining procedural accessibility and calls on Member States to take into consideration the following criteria: the possibility of obtaining a medicine in the patient's home country, the reimbursement of costs associated with administration of the product to the patient and the interval between obtaining the market authorisation and the dates the product is placed on the market and is reimbursed.

4.4   Exclusion of medicinal products from health insurance systems

4.4.1   The EESC endorses the Commission's proposal that a statement based on objective and verifiable criteria, including economic and financial ones, should be provided for any decision which would exclude a medicinal product from the scope of the public health insurance system, or to modify the extent or the conditions of coverage of the product concerned.

4.4.2   The EESC commends the Commission's proposal that Member States shall work towards a standardised approach with respect to the definition of these criteria aiming to establish value-based pricing systems across Europe.

4.4.2.1   The EESC would propose that such criteria should incorporate measurement of "unmet medical need" and "clinical benefits", and be "free from discrimination" (10).

4.5   Remedies procedure in case of non-compliance with the time limits related to the inclusion of medicinal products in health insurance systems

4.5.1   The EESC calls on the Member States to ensure that effective and rapid remedies are available to the applicant in case of non-compliance with the time limits set in Article 7 of the proposal.

4.5.2   The EESC invites the Member States to consider developing, in close cooperation with relevant European, regional and sub-regional organisations, ways for patients and applicants to have a right to appeal adverse pricing and reimbursement decisions to an independent judicial body (normally a court).

4.5.2.1   The EESC would urge that such a judicial body must have effective means and full power of review over both matters of fact and law including a mandate to take formal decisions against offenses with proportionate sanctions.

4.6   Composition and aims of the Expert Group on the implementation of the subject Directive

4.6.1   The "Expert Group" shall comprise members namely Representatives from:

| a) | Member States' ministries or government agencies; |
| --- | --- |

a)

Member States' ministries or government agencies;

| b) | patients' and consumer organizations; |
| --- | --- |

b)

patients' and consumer organizations;

| c) | contribution-funded statutory health insurance schemes; |
| --- | --- |

c)

contribution-funded statutory health insurance schemes;

| d) | contributors to statutory insurance schemes (representatives of employers and workers); |
| --- | --- |

d)

contributors to statutory insurance schemes (representatives of employers and workers);

| e) | pharmaceutical industry; |
| --- | --- |

e)

pharmaceutical industry;

| f) | the Commission, the European Medicines Agency (EMEA) as well as the Chair or Vice-Chair of relevant agencies; |
| --- | --- |

f)

the Commission, the European Medicines Agency (EMEA) as well as the Chair or Vice-Chair of relevant agencies;

| g) | international and professional organizations and other associations acting in the field of pricing, funding and reimbursement procedures; |
| --- | --- |

g)

international and professional organizations and other associations acting in the field of pricing, funding and reimbursement procedures;

| h) | independent scientists. |
| --- | --- |

h)

independent scientists.

4.6.2   To achieve its aims, "Expert Group" shall:

| a) | assist the Commission in the monitoring, evaluating and disseminating the results of measures taken at the EU and national level; |
| --- | --- |

a)

assist the Commission in the monitoring, evaluating and disseminating the results of measures taken at the EU and national level;

| b) | contribute to the implementation of the EU actions in the field; |
| --- | --- |

b)

contribute to the implementation of the EU actions in the field;

| c) | deliver opinions, recommendations or submit reports to the Commission either at the latter's request or on its own initiative; |
| --- | --- |

c)

deliver opinions, recommendations or submit reports to the Commission either at the latter's request or on its own initiative;

| d) | assist the Commission in drawing up guidelines, recommendations and any other action; |
| --- | --- |

d)

assist the Commission in drawing up guidelines, recommendations and any other action;

| e) | provide an annual public report of its activities to the Commission. |
| --- | --- |

e)

provide an annual public report of its activities to the Commission.

4.7   Classification of medicinal products in view of their inclusion in health insurance systems

4.7.1   The EESC urges that the formation of reimbursement groups should be based on transparent and objective criteria that allow applicants and patients and consumers to understand how medicinal products will be treated.

4.7.2   The EESC acknowledges the rights of "interested stakeholders" to request from the competent authorities, the objective data on the basis of which they have determined the arrangements of coverage for their medicinal product, in application of the criteria and methodologies.

4.7.3   The EESC requests that marketing authorisation holders and representative patient and consumer organizations should have a right to be heard in due time prior to inclusion of medicines within a particular reimbursement group when appropriate and should have the right to appeal the formation of a reimbursement group to an independent body for review.

4.8   Generic medicines

4.8.1   The EESC highlights that approving the price of generic medicinal products and their coverage by the health insurance system should not in every case require any new or detailed assessment when the reference product has already been priced and included in the health insurance system, and the assessment has been undertaken by the European Medicines Agency.

4.8.2   With regard to the Commission's proposal that a reduction of the time-limits to 30 days for generic medicinal products covering both the pricing and reimbursement processes would ensure earlier market access for patients in Member States and stimulate price competition in the off-patent market within a reasonable timeframe after the loss of exclusivity of originator products, the EESC would point out that, while medical checks are less time-consuming for generic products than for new ones, the pricing and pricing negotiations still need to be conducted.

4.9   Price approval

The EESC requests that the competent authorities shall provide the applicant with an official acknowledgement of receipt within a maximum of 10 days after an application to approve the price of the product was introduced by the applicant. Member States shall ensure that such application can be introduced by the applicant immediately after the granting of the marketing authorisation or after the positive opinion by the European Medicines Agency or the competent national authorities.

4.10   Price freeze and price reduction

4.10.1   The EESC invites the Member States to carry out a review, at least once a year, to ascertain whether the macro-economic conditions justify that the freeze be continued unchanged. Within 60 days of the start of this review, the competent authorities shall announce what increases or decreases in prices are being made. If there are any, they shall publish a statement of reasons for such decision based on objective and verifiable criteria.

4.10.2   The EESC would also ask the Member States to regularly review the prices and reimbursement of those medicinal products where costs are unreasonably high for the health insurance schemes and patients. Within an appropriate timeframe after the start of this review, the competent authorities must indicate whether and, if so, which price reductions are being authorised. If there are any such cases, the competent authorities shall publish a statement of reasons based on objective and verifiable criteria (including economic and financial ones).

4.10.3   The EESC suggests the Commission to monitor the situation where Member States are receiving financial assistance that they shall guarantee that medicines intended for use within the country are not exported to other Member States.

4.11   Price increase

4.11.1   The EESC would emphasise that an increase in the price of a medicinal product is permitted only after prior approval has been obtained from the competent authorities with consultation with relevant stakeholders including patient organisations.

4.11.2   The EESC would draw attention for need of due process rights should be included for all relevant stakeholders and cover at a minimum: (i) a right to be heard, (ii) a right of access to the administrative file, including relevant scientific evidence and reports, and (iii) a right to obtain a reasoned decision.

4.11.3   The EESC suggests that a competent authority shall provide the applicant with an official acknowledgement of receipt within a maximum of 10 days after an application received by a Member State to increase the price of the product.

4.12   Demand-side measures

The EESC welcomes the Commission's proposal to clarify that measures intended to control or promote the prescription of specific named medicinal products are covered by the Transparency Directive and suggests expanding these procedural safeguards to all measures intended to control or promote the prescription of medicinal products.

4.13   Additional proof of quality, safety or efficacy

In general, in the framework of pricing and reimbursement decisions, Member States shall not re-assess the elements on which the marketing authorisation is undertaken by the European Medicines Agency, including the quality, safety or efficacy of the medicinal product (including orphan medicinal products) and objective information in the framework of the European collaboration on HTA.

4.14   Intellectual property

The EESC stresses the importance of protection of intellectual property rights, which are particularly important to foster pharmaceutical innovation and to support the EU economy. It opposes Article 14 of the proposal (on non-interference of intellectual property rights), which states that "The protection of intellectual property rights shall not be a valid ground to refuse, suspend or revoke decisions relating to the price of a medicinal product or its inclusion within the public health insurance system". The Commission needs to strike a balance between authorisation of reimbursement for manufacturers of medicinal products and the legitimate interests of third parties in their intellectual property rights. There should be no interference in Member States' competence in valuing innovation and securing proper enforcement of intellectual property rights.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Despite rising concerns about the economic situation, health and healthcare remained in the top five concerns of EU citizens in 2009 Eurobarometers (e.g. No. 71 Spring 2009, No. 72 Autumn 2009). See for example: http://ec.europa.eu/public_opinion/archives/eb/eb72/eb72_en.htm.

1

(2)  Mackenbach JP, Meerding WJ, Kunst AE.: Economic implications of socioeconomic inequalities in health in the European Union. European Commission, July 2007.

2

Economic implications of socioeconomic inequalities in health in the European Union

(3)  WHO considers the rise in chronic diseases an epidemic and estimates that this epidemic will claim the lives of 52 million people in the European Region by 2030. Source: http://ec.europa.eu/health/interest_groups/docs/euhpf_answer_consultation_jan2012_en.pdf.

3

(4)  Report on the Pharmaceutical Sector Inquiry: http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.html.

4

(5)  Kanavos P, Schurer WS, Vogler S.: Structure of medicines distribution in EU-27 and its impact on prices, availability and on the efficiency of medicines provision. European Commission, DG Enterprise and EMINet. January 2011.

5

Structure of medicines distribution in EU-27 and its impact on prices, availability and on the efficiency of medicines provision

(6)  Pharmaceutical Sector Inquiry, Final Report, 8 July 2009. Different studies, like e.g. the Alcimed study or the EU Pharmaceutical Inquiry, confirm this variation in access. European reference networks between centres of expertise are a way to reduce this variation in access.

6

(7)  The case-law of the Court of Justice provides that the time-limit is mandatory and that the national authorities are not entitled to exceed it - [1] Merck Sharp and Dohme B.V. v. Belgium (C-245/03).

7

(8)  Pharmaceutical market monitoring study, Volume I, p. 83.

8

(9)  EUnetHTA uses the following definition: "Health technology assessment is a multidisciplinary process that summarises information about the medical, social, economic and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, robust manner. Its aim is to inform the formulation of safe, effective, health policies that are patient focused and seek to achieve best value", available at http://www.eunethta.eu/Public/About_EUnetHTA/HTA/.

9

(10)  Case C-181/82 Roussel Laboratoria [1983] ECR 3849; Case 238/82 Duphar and Others [1984] ECR 523.

10

---

APPENDIX

to the Opinion of the European Economic and Social Committee

1.   The following amendments, which received at least a quarter of the votes cast, were rejected during the discussions (Rule 39(2) of the Rules of Procedure):

a)   Point 4.5.2.1

| 4.5.2.1 | The EESC would urge that such a judicial body must have effective means and full power of review over both matters of fact and law including a mandate to take formal decisions against offenses with proportionate sanctions. The EESC is opposed to the powers, set forth in Article 8 of the proposal, to award damages in case of non-compliance with time limits and to impose on the decision-making authorities a penalty payment calculated by day of delay, which it considers to be inappropriate and disproportionate. They could also lead to a situation where the authorities were not primarily focused on patient safety. |
| --- | --- |

4.5.2.1

Reason

Self-explanatory.

Outcome of the vote

| Votes in favour | : | 71 |
| --- | --- | --- |
| Votes against | : | 89 |
| Abstentions | : | 19 |

Votes in favour

:

71

Votes against

:

89

Abstentions

:

19

b)   Point 1.11.2

Amend as follows:

| 1.11.2 | The EESC considers that mechanisms are necessary to control and enforce compliance with the time limits for pricing and reimbursement decisions. |
| --- | --- |

1.11.2

The EESC considers that mechanisms are necessary to control and enforce compliance with the time limits for pricing and reimbursement decisions.

Reason

See amendment to point 4.5.2.1.

Outcome of the vote

| Votes in favour | : | 71 |
| --- | --- | --- |
| Votes against | : | 89 |
| Abstentions | : | 19 |

Votes in favour

:

71

Votes against

:

89

Abstentions

:

19

2.   The following Section Opinion points were modified in favour of the amendments adopted by the assembly but obtained at least one-quarter of the votes cast (Rule 54(5) of the Rules of Procedure):

a)   Point 4.2.1

| 4.2.1 | The EESC encourages clarification that any measure linked to the decision-making process of including vaccines in health insurance systems is covered under the scope of the Directive. |
| --- | --- |

4.2.1

The EESC encourages clarification that any measure linked to the decision-making process of including vaccines in health insurance systems is covered under the scope of the Directive.

Outcome of the vote

| Votes in favour | : | 79 |
| --- | --- | --- |
| Votes against | : | 61 |
| Abstentions | : | 47 |

Votes in favour

:

79

Votes against

:

61

Abstentions

:

47

b)   Point 4.5.2.2

| 4.5.2.2 | The EESC would encourage the establishment of automatic reimbursement approval in case of failure to meet deadlines. |
| --- | --- |

4.5.2.2

The EESC would encourage the establishment of automatic reimbursement approval in case of failure to meet deadlines.

Outcome of the vote

| Votes in favour | : | 90 |
| --- | --- | --- |
| Votes against | : | 73 |
| Abstentions | : | 22 |

Votes in favour

:

90

Votes against

:

73

Abstentions

:

22

c)   Point 4.14

4.14   Intellectual property

The EESC stresses the importance of protection of intellectual property rights, which are particularly important to foster pharmaceutical innovation and to support the EU economy. There should be no interference in Member States' competence in valuing innovation and securing proper enforcement of intellectual property rights.

Outcome of the vote

| Votes in favour | : | 53 |
| --- | --- | --- |
| Votes against | : | 35 |
| Abstentions | : | 5 |

Votes in favour

:

53

Votes against

:

35

Abstentions

:

5

d)   Point 1.12

| 1.12 | The EESC welcomes the time limits of 120 days proposed by the Commission and suggests that, in order to further streamline patients' access to medicines, the same timelines should be applied to all innovative medicines, whether or not subject to national HTA. |
| --- | --- |

1.12

The EESC welcomes the time limits of 120 days proposed by the Commission and suggests that, in order to further streamline patients' access to medicines, the same timelines should be applied to all innovative medicines, whether or not subject to national HTA.

Outcome of the vote

| Votes in favour | : | 73 |
| --- | --- | --- |
| Votes against | : | 41 |
| Abstentions | : | 6 |

Votes in favour

:

73

Votes against

:

41

Abstentions

:

6

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/89 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/89

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on simplifying the transfer of motor vehicles registered in another Member State within the single market’

COM(2012) 164 final — 2012/0082 (COD)

2012/C 299/16

Rapporteur-General: Mr PÁSZTOR

On 24 April 2012, the Council and, on 18 April 2012, the European Parliament, decided to consult the European Economic and Social Committee, under Article 114 of the Treaty on the Functioning of the European Union (TFEU), on the

Proposal for a Regulation of the European Parliament and of the Council on simplifying the transfer of motor vehicles registered in another Member State within the Single Market

COM(2012) 164 final — 2012/0082 (COD).

On 24 April 2012 the Committee Bureau instructed the Section for the Single Market, Production and Consumption to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr PÁSZTOR as rapporteur-general at its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July), and adopted the following opinion unanimously.

1.   Recommendations

| 1.1 | The EESC agrees with the Commission's aims and supports the idea of using a regulation to establish rules for the registration of motor vehicles which have already been registered in another Member State. This complies both with the subsidiarity principle and the requirements of a "citizens' Europe". At the same time, the EESC is disappointed that it was not possible to introduce uniform EU registration, as initially envisaged. The Committee feels that this will be indispensable in the long-term. |
| --- | --- |

1.1

The EESC agrees with the Commission's aims and supports the idea of using a regulation to establish rules for the registration of motor vehicles which have already been registered in another Member State. This complies both with the subsidiarity principle and the requirements of a "citizens' Europe". At the same time, the EESC is disappointed that it was not possible to introduce uniform EU registration, as initially envisaged. The Committee feels that this will be indispensable in the long-term.

| 1.2 | As a result of this regulation being adopted, the EESC expects registering vehicles in another country to be as simple as re-registration within the same country without any additional charges and unnecessary inspections and documents. Unless information is incomplete or invalid, other countries may not require additional administrative, inefficient and costly procedures, for example roadworthiness tests. In addition, the cost of cross-border registration should not exceed the cost of domestic registration. |
| --- | --- |

1.2

As a result of this regulation being adopted, the EESC expects registering vehicles in another country to be as simple as re-registration within the same country without any additional charges and unnecessary inspections and documents. Unless information is incomplete or invalid, other countries may not require additional administrative, inefficient and costly procedures, for example roadworthiness tests. In addition, the cost of cross-border registration should not exceed the cost of domestic registration.

| 1.3 | For the EESC, the fact the regulation does not require ordinary citizens to obtain data is a major achievement. We hope that the requirement for the competent authorities to exchange data could have an impact on cooperation in other more significant areas, thus effectively supporting European values and common interests. |
| --- | --- |

1.3

For the EESC, the fact the regulation does not require ordinary citizens to obtain data is a major achievement. We hope that the requirement for the competent authorities to exchange data could have an impact on cooperation in other more significant areas, thus effectively supporting European values and common interests.

| 1.4 | The EESC appreciates the Commission's intentions in providing for an ex post evaluation in the regulation itself. At the same time, it calls for the shortening of the review time from four to two years. |
| --- | --- |

1.4

The EESC appreciates the Commission's intentions in providing for an ex post evaluation in the regulation itself. At the same time, it calls for the shortening of the review time from four to two years.

2.   The draft Commission Regulation

| 2.1 | The Commission has undertaken a major task in its efforts to simplify the transfer of motor vehicles registered in one Member State to another through a regulation. Indeed, until now legislation to coordinate the form and content of vehicle registration certificates was only in the form of a directive (1999/37/EK). Other harmonisation measures - which are desirable in view of the Single Market - have taken the form of explanatory rules, and have therefore had only a limited impact at Member State level. |
| --- | --- |

2.1

The Commission has undertaken a major task in its efforts to simplify the transfer of motor vehicles registered in one Member State to another through a regulation. Indeed, until now legislation to coordinate the form and content of vehicle registration certificates was only in the form of a directive (1999/37/EK). Other harmonisation measures - which are desirable in view of the Single Market - have taken the form of explanatory rules, and have therefore had only a limited impact at Member State level.

| 2.2 | In drawing up the draft regulation, the Commission needed to take not only the above considerations into account, but also legislation on personal data protection (1) and prevention of cross-border crime (2). |
| --- | --- |

2.2

In drawing up the draft regulation, the Commission needed to take not only the above considerations into account, but also legislation on personal data protection (1) and prevention of cross-border crime (2).

| 2.3 | Taking into account the needs of the Single Market, the draft regulation therefore:






  — | sets out to harmonise rules on motor vehicles registered in one Member State but regularly used in another, including motorbikes and mopeds (3). The scope of the regulation does not include motor vehicles registered in a third country. |
| --- | --- | --- |

2.3

Taking into account the needs of the Single Market, the draft regulation therefore:

—

sets out to harmonise rules on motor vehicles registered in one Member State but regularly used in another, including motorbikes and mopeds (3). The scope of the regulation does not include motor vehicles registered in a third country.

| — | stipulates that re-registration is only required for a stay of over six months. This is contingent on a change in the place of habitual residence, meaning the main centre of business interests or personal ties. |
| --- | --- |

—

stipulates that re-registration is only required for a stay of over six months. This is contingent on a change in the place of habitual residence, meaning the main centre of business interests or personal ties.

| — | unless there are specific reasons, prohibits a requirement for physical (roadworthiness) tests. A physical check can only be carried out if registration data are incomplete or contradictory, if there is suspicion of crime, a serious injury or change of owner. Failing this, the roadworthiness test carried out in the country of origin must be accepted as valid. |
| --- | --- |

—

unless there are specific reasons, prohibits a requirement for physical (roadworthiness) tests. A physical check can only be carried out if registration data are incomplete or contradictory, if there is suspicion of crime, a serious injury or change of owner. Failing this, the roadworthiness test carried out in the country of origin must be accepted as valid.

| — | covers rules required for a uniform approach in the Single Market to temporary and professional registrations. |
| --- | --- |

—

covers rules required for a uniform approach in the Single Market to temporary and professional registrations.

| — | harmonises cross-border trade and the transfer of ownership of used cars –not including third countries. |
| --- | --- |

—

harmonises cross-border trade and the transfer of ownership of used cars –not including third countries.

| 2.4 | The draft regulation requires authorities to obtain previous registration data from the authorities of the other Member State concerned. In doing so, it mentions the possibility of using recent information technology developments.






  — | In order to ensure the smooth exchange of information, the regulation requires national authorities to use software allowing authorities in other Member States to access data while excluding unauthorised access through the use of encrypted xml files. Information must be exchanged in real time on an online platform; software development costs are borne by the relevant Member State. |
| --- | --- | --- |

2.4

The draft regulation requires authorities to obtain previous registration data from the authorities of the other Member State concerned. In doing so, it mentions the possibility of using recent information technology developments.

—

In order to ensure the smooth exchange of information, the regulation requires national authorities to use software allowing authorities in other Member States to access data while excluding unauthorised access through the use of encrypted xml files. Information must be exchanged in real time on an online platform; software development costs are borne by the relevant Member State.

| — | The Commission undertakes to create a public database with contact details of the national authorities. |
| --- | --- |

—

The Commission undertakes to create a public database with contact details of the national authorities.

| — | The Commission will also ensure continuous development of the IT system through the legal option of delegation. |
| --- | --- |

—

The Commission will also ensure continuous development of the IT system through the legal option of delegation.

| 2.5 | The draft regulation sets out strict conditions under which registration may be refused. Applicants then have the right of appeal within a month of such refusal. |
| --- | --- |

2.5

The draft regulation sets out strict conditions under which registration may be refused. Applicants then have the right of appeal within a month of such refusal.

| 2.6 | In the draft regulation of the Commission commits itself to reviewing the impact of the regulation after four years. |
| --- | --- |

2.6

In the draft regulation of the Commission commits itself to reviewing the impact of the regulation after four years.

3.   General comments

| 3.1 | The EESC agrees with the Commission's aims and supports the idea of using a regulation to establish rules for the registration of motor vehicles which have already been registered in another Member State. This complies both with the subsidiarity principle and the requirements of a "citizens' Europe". At the same time the proposal takes into account practical experience of bureaucracy, which by nature tends to give precedence to conventions and convenience in dealing with minor matters rather than trying to adapt to strategic goals. |
| --- | --- |

3.1

The EESC agrees with the Commission's aims and supports the idea of using a regulation to establish rules for the registration of motor vehicles which have already been registered in another Member State. This complies both with the subsidiarity principle and the requirements of a "citizens' Europe". At the same time the proposal takes into account practical experience of bureaucracy, which by nature tends to give precedence to conventions and convenience in dealing with minor matters rather than trying to adapt to strategic goals.

| 3.2 | However, the EESC is disappointed that it was not possible to introduce uniform EU registration, as initially envisaged. The Committee feels that this will be indispensable in the long-term. |
| --- | --- |

3.2

However, the EESC is disappointed that it was not possible to introduce uniform EU registration, as initially envisaged. The Committee feels that this will be indispensable in the long-term.

| 3.3 | The EESC feels that uniform registration does not undermine the Member States' revenue needs given that registration fees can be recovered within the system. At the same time, uniform registration would be more transparent and traceable. |
| --- | --- |

3.3

The EESC feels that uniform registration does not undermine the Member States' revenue needs given that registration fees can be recovered within the system. At the same time, uniform registration would be more transparent and traceable.

| 3.4 | The EESC feels that the draft regulation takes an appropriate approach to the basic problems, and put in place adequate procedural rules to identify and overcome potential threats to clients and authorities. It has therefore chosen a balanced approach to risk management rather than excessive bureaucratic caution. |
| --- | --- |

3.4

The EESC feels that the draft regulation takes an appropriate approach to the basic problems, and put in place adequate procedural rules to identify and overcome potential threats to clients and authorities. It has therefore chosen a balanced approach to risk management rather than excessive bureaucratic caution.

| 3.5 | The draft text deals adequately with the prevention of cross-border crime while taking into account the interests of the second-hand motor vehicle market. |
| --- | --- |

3.5

The draft text deals adequately with the prevention of cross-border crime while taking into account the interests of the second-hand motor vehicle market.

| 3.6 | As a result of this regulation being adopted, the EESC expects registering vehicles in another country to be as simple as re-registration within the same country without any additional charges and unnecessary inspections and documents. Unless information is incomplete or invalid, other countries may not require additional administrative, inefficient and costly procedures, for example roadworthiness tests. In addition, the cost of cross-border registration should not exceed the cost of domestic registration. |
| --- | --- |

3.6

As a result of this regulation being adopted, the EESC expects registering vehicles in another country to be as simple as re-registration within the same country without any additional charges and unnecessary inspections and documents. Unless information is incomplete or invalid, other countries may not require additional administrative, inefficient and costly procedures, for example roadworthiness tests. In addition, the cost of cross-border registration should not exceed the cost of domestic registration.

| 3.7 | For the EESC, the fact the regulation does not require ordinary citizens to obtain data is a major achievement. We hope that the requirement for the competent authorities to exchange data could have an impact on cooperation in other more significant areas, thus effectively supporting European values and common interests. |
| --- | --- |

3.7

For the EESC, the fact the regulation does not require ordinary citizens to obtain data is a major achievement. We hope that the requirement for the competent authorities to exchange data could have an impact on cooperation in other more significant areas, thus effectively supporting European values and common interests.

| 3.8 | The EESC feels that in the longer term, it does not make sense to maintain temporary and professional registration. The latter is merely a temporary solution. At the same time it is contradictory that non-compliant vehicles have limited authorisation and in some cases may even travel longer distances from one country to another. Such vehicles should instead be transported, or if their technical condition allows, they could be given temporary authorisation. At the same time, it would make sense to ban vehicles with a temporary registration from transporting goods and passengers. |
| --- | --- |

3.8

The EESC feels that in the longer term, it does not make sense to maintain temporary and professional registration. The latter is merely a temporary solution. At the same time it is contradictory that non-compliant vehicles have limited authorisation and in some cases may even travel longer distances from one country to another. Such vehicles should instead be transported, or if their technical condition allows, they could be given temporary authorisation. At the same time, it would make sense to ban vehicles with a temporary registration from transporting goods and passengers.

| 3.9 | The EESC welcomes the EUR 1,5 billion of savings for individuals and companies. The Committee also acknowledges that the EUR 1,5 million annual cost of the regulation will only have a minimal impact on the EU budget. At the same time it must be pointed out that the regulation will also have to be paid for out of national budgets, and in the interest of full clarity it would make sense to provide an estimate of the total. |
| --- | --- |

3.9

The EESC welcomes the EUR 1,5 billion of savings for individuals and companies. The Committee also acknowledges that the EUR 1,5 million annual cost of the regulation will only have a minimal impact on the EU budget. At the same time it must be pointed out that the regulation will also have to be paid for out of national budgets, and in the interest of full clarity it would make sense to provide an estimate of the total.

| 3.10 | The EESC agrees that power should be delegated to the Commission in relation to the technical and data content issues involved in operating the system at European level, as provided for in the draft regulation. |
| --- | --- |

3.10

The EESC agrees that power should be delegated to the Commission in relation to the technical and data content issues involved in operating the system at European level, as provided for in the draft regulation.

| 3.11 | The EESC would recommend that the decision-making institutions - the European Parliament, the Council and the Commission - consider allowing some or all of a client's initial registration costs to be taken into account when re-registering a vehicle, except in the case of re-registration due to a change of ownership. |
| --- | --- |

3.11

The EESC would recommend that the decision-making institutions - the European Parliament, the Council and the Commission - consider allowing some or all of a client's initial registration costs to be taken into account when re-registering a vehicle, except in the case of re-registration due to a change of ownership.

| 3.12 | The EESC appreciates the Commission's intentions in providing for an ex post evaluation in the regulation itself. At the same time, it calls for the shortening of the review time from four to two years. |
| --- | --- |

3.12

The EESC appreciates the Commission's intentions in providing for an ex post evaluation in the regulation itself. At the same time, it calls for the shortening of the review time from four to two years.

4.   Specific Comments

| 4.1 | The EESC feels that both in its details and as a whole the draft regulation in its current form meets expectations. |
| --- | --- |

4.1

The EESC feels that both in its details and as a whole the draft regulation in its current form meets expectations.

| 4.2 | The EESC supports efforts to base registration procedures on Whole Vehicle Type Approval data as used in the Certificate of Conformity scheme. Although these data are more detailed than those required by Annex 1, they are internationally accepted, and registration procedures in several Member States are already based on them. |
| --- | --- |

4.2

The EESC supports efforts to base registration procedures on Whole Vehicle Type Approval data as used in the Certificate of Conformity scheme. Although these data are more detailed than those required by Annex 1, they are internationally accepted, and registration procedures in several Member States are already based on them.

| 4.3 | In addition to technical data provided by manufacturers, real values based on the most recent official tests should also be included, for example in relation to emissions of pollutants. |
| --- | --- |

4.3

In addition to technical data provided by manufacturers, real values based on the most recent official tests should also be included, for example in relation to emissions of pollutants.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  Directive 95/46/EC (OJ L 281, 23.11.1995, p. 31–50) and Regulation 45/2001/EC (OJ L 8, 12.1.2001, p. 1–22).

1

(2)  Council Decision 2004/919/EC (OJ L 389 of 30.12.2004, p. 28).

2

(3)  Directive 2002/24/EC (OJ L 124, 9.5.2002, p. 1–44).

3

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/92 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/92

---

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 enhanced intra-EU solidarity in the field of asylum — An EU agenda for better responsibility-sharing and more mutual trust’

COM(2011) 835 final

2012/C 299/17

Rapporteur: Cristian PÎRVULESCU

On 2 December 2011, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, 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 enhanced intra-EU solidarity in the field of asylum — An EU agenda for better responsibility-sharing and more mutual trust

COM(2011) 835 final.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July 2012), the European Economic and Social Committee adopted the following opinion by 116 votes to 3 with 2 abstentions.

1.   Conclusions and recommendations

| 1.1 | The Committee welcomes the Commission's initiative and considers that European asylum policy needs to be debated and amended. |
| --- | --- |

1.1

The Committee welcomes the Commission's initiative and considers that European asylum policy needs to be debated and amended.

| 1.2 | The Committee considers that the principle of solidarity should continue to be the cornerstone of this policy, despite the fact that the number and size of the Member States together with their varying degrees of exposure to refugee flows creates an uneven playing field which complicates asylum policy. Solidarity should not be seen only as a principle which boosts the policy's efficiency but also as a basic code of values which justifies and enhances the measures undertaken. |
| --- | --- |

1.2

The Committee considers that the principle of solidarity should continue to be the cornerstone of this policy, despite the fact that the number and size of the Member States together with their varying degrees of exposure to refugee flows creates an uneven playing field which complicates asylum policy. Solidarity should not be seen only as a principle which boosts the policy's efficiency but also as a basic code of values which justifies and enhances the measures undertaken.

| 1.3 | A major push should be made to ensure that public opinion, national, regional and local administrations and decision-makers support the basic values of asylum policy: respect for fundamental individual rights, helping people in critical situations, solidarity and trust between Member States. |
| --- | --- |

1.3

A major push should be made to ensure that public opinion, national, regional and local administrations and decision-makers support the basic values of asylum policy: respect for fundamental individual rights, helping people in critical situations, solidarity and trust between Member States.

| 1.4 | The Committee considers that an incentive-based approach could get asylum policy running smoothly, provided that the most appropriate incentives are identified and properly supported, including financial support. |
| --- | --- |

1.4

The Committee considers that an incentive-based approach could get asylum policy running smoothly, provided that the most appropriate incentives are identified and properly supported, including financial support.

| 1.5 | As regards practical cooperation, the Committee urges the European Asylum Support Office (EASO) to make swifter progress towards greater operational capacity. Boosting the EASO's capacity is both urgent and necessary and should be coordinated with the Migration and Asylum Fund's programme and implementation. |
| --- | --- |

1.5

As regards practical cooperation, the Committee urges the European Asylum Support Office (EASO) to make swifter progress towards greater operational capacity. Boosting the EASO's capacity is both urgent and necessary and should be coordinated with the Migration and Asylum Fund's programme and implementation.

| 1.6 | The Committee also calls for improvements to refugee integration measures. Despite its efficient procedures for swiftly and correctly granting refugee status, the European asylum system which we aim to build could fail in the area of integration. |
| --- | --- |

1.6

The Committee also calls for improvements to refugee integration measures. Despite its efficient procedures for swiftly and correctly granting refugee status, the European asylum system which we aim to build could fail in the area of integration.

| 1.7 | Alongside the existing horizontal structure, asylum policy must be seen in the light of the overall cycle of asylum, placing people at risk at the core of its action. In this way, deadlocks and mismatches can be pinpointed. |
| --- | --- |

1.7

Alongside the existing horizontal structure, asylum policy must be seen in the light of the overall cycle of asylum, placing people at risk at the core of its action. In this way, deadlocks and mismatches can be pinpointed.

| 1.8 | It should be pointed out that the solidarity principle does not apply solely between States: it is a general principle for humane interaction between people and groups. The spirit of humane solidarity should be cultivated and fostered above and beyond the rationale and pressures of migration and asylum policy, as part of the EU's core values. |
| --- | --- |

1.8

It should be pointed out that the solidarity principle does not apply solely between States: it is a general principle for humane interaction between people and groups. The spirit of humane solidarity should be cultivated and fostered above and beyond the rationale and pressures of migration and asylum policy, as part of the EU's core values.

| 1.9 | The experience of civil society organisations and the Committee in this field can contribute to a more comprehensive and detailed evaluation of asylum policy. |
| --- | --- |

1.9

The experience of civil society organisations and the Committee in this field can contribute to a more comprehensive and detailed evaluation of asylum policy.

2.   Introduction

| 2.1 | The Commission communication states that Solidarity is one of the fundamental values of the European Union and has been a guiding principle of the common European asylum policy [...]. It is now enshrined in Article 80 of the Treaty on the Functioning of the European Union. |
| --- | --- |

2.1

The Commission communication states that Solidarity is one of the fundamental values of the European Union and has been a guiding principle of the common European asylum policy [...]. It is now enshrined in Article 80 of the Treaty on the Functioning of the European Union.

| 2.2 | As pointed out in the Commission communication, flows of asylum seekers have varied from a peak of 425 000 applications for EU-27 States in 2001 down to under 200 000 in 2006, with a large increase expected in 2011. |
| --- | --- |

2.2

As pointed out in the Commission communication, flows of asylum seekers have varied from a peak of 425 000 applications for EU-27 States in 2001 down to under 200 000 in 2006, with a large increase expected in 2011.

| 2.3 | The Commission proposes reinforcing intra-EU solidarity on asylum around four pillars: practical cooperation and technical assistance, financial solidarity, allocation of responsibilities, and improving tools for governance of the asylum system. |
| --- | --- |

2.3

The Commission proposes reinforcing intra-EU solidarity on asylum around four pillars: practical cooperation and technical assistance, financial solidarity, allocation of responsibilities, and improving tools for governance of the asylum system.

| 2.4 | The communication also aims to contribute to the finalisation of the "asylum package" given that the next few months will be crucial for reaching the 2012 objective for which the solidarity dimension must play its part. |
| --- | --- |

2.4

The communication also aims to contribute to the finalisation of the "asylum package" given that the next few months will be crucial for reaching the 2012 objective for which the solidarity dimension must play its part.

3.   General comments

| 3.1 | The Committee welcomes the Commission's initiative and considers that European asylum policy needs to be analysed in depth, so that substantial changes can be made in light of its goals. |
| --- | --- |

3.1

The Committee welcomes the Commission's initiative and considers that European asylum policy needs to be analysed in depth, so that substantial changes can be made in light of its goals.

| 3.2 | Asylum policy is being questioned in the EU in the wake of the recent political events in North Africa, the Middle East and the Far East. Many people have had to protect themselves by fleeing to the EU Member States. |
| --- | --- |

3.2

Asylum policy is being questioned in the EU in the wake of the recent political events in North Africa, the Middle East and the Far East. Many people have had to protect themselves by fleeing to the EU Member States.

| 3.3 | The Committee considers that the principle of solidarity should continue to be the cornerstone of this policy, despite the fact that the number and size of the Member States together with their exposure to refugee flows makes it difficult to put solidarity into practice and to coordinate. |
| --- | --- |

3.3

The Committee considers that the principle of solidarity should continue to be the cornerstone of this policy, despite the fact that the number and size of the Member States together with their exposure to refugee flows makes it difficult to put solidarity into practice and to coordinate.

| 3.4 | The asylum system should be flexible so that it can cope with variations in refugee flows, but it also needs to be stable so that institutional procedures and further integration measures can deliver tangible results. |
| --- | --- |

3.4

The asylum system should be flexible so that it can cope with variations in refugee flows, but it also needs to be stable so that institutional procedures and further integration measures can deliver tangible results.

| 3.5 | Similarly, it should be pointed out that the solidarity principle does not apply solely between States: it is a general principle for humane interaction between people and groups. The spirit of humane solidarity should be cultivated and fostered above and beyond the rationale and pressures of migration and asylum policy, as part of the EU's core values. |
| --- | --- |

3.5

Similarly, it should be pointed out that the solidarity principle does not apply solely between States: it is a general principle for humane interaction between people and groups. The spirit of humane solidarity should be cultivated and fostered above and beyond the rationale and pressures of migration and asylum policy, as part of the EU's core values.

| 3.6 | The Committee welcomes the Commission's emphasis on trust. The principle of solidarity is supplemented by the principle of trust, making the Member States more responsible. The policy's success is dependent on each Member State playing its part, taking responsibility for a share of the work and supporting the others' efforts. Each Member State's action is dependent on that of the other Member States, illustrating the need to be bold in pursuing coordination and harmonisation. |
| --- | --- |

3.6

The Committee welcomes the Commission's emphasis on trust. The principle of solidarity is supplemented by the principle of trust, making the Member States more responsible. The policy's success is dependent on each Member State playing its part, taking responsibility for a share of the work and supporting the others' efforts. Each Member State's action is dependent on that of the other Member States, illustrating the need to be bold in pursuing coordination and harmonisation.

| 3.7 | Nonetheless, the Committee points out that asylum policy is far from coherent and efficient. Disparities persist between Member States in terms of openness and preparedness to take in refugees as well as towards the development of an EU asylum policy. A major push should be made to ensure that public opinion, national, regional and local administrations and decision-makers support the basic values of asylum policy: respect for fundamental rights, helping people in critical situations, solidarity and trust between Member States. Furthermore, more attention should be paid to the policy's implementation. Specific situations have shown that asylum seekers are vulnerable, both in their countries of origin and in the host countries. |
| --- | --- |

3.7

Nonetheless, the Committee points out that asylum policy is far from coherent and efficient. Disparities persist between Member States in terms of openness and preparedness to take in refugees as well as towards the development of an EU asylum policy. A major push should be made to ensure that public opinion, national, regional and local administrations and decision-makers support the basic values of asylum policy: respect for fundamental rights, helping people in critical situations, solidarity and trust between Member States. Furthermore, more attention should be paid to the policy's implementation. Specific situations have shown that asylum seekers are vulnerable, both in their countries of origin and in the host countries.

| 3.8 | Organised civil society, often speaking via the Committee, has flagged up asylum policy's deficiencies in terms of strategy, structure and implementation and has issued many recommendations designed to improve it. The changes carried out to date in the areas of harmonisation, funding specialised programmes or institutional reform have as yet been unable to reinforce the common asylum policy. The policy needs to be reformed, and the Committee reiterates its commitment to contribute to this process. |
| --- | --- |

3.8

Organised civil society, often speaking via the Committee, has flagged up asylum policy's deficiencies in terms of strategy, structure and implementation and has issued many recommendations designed to improve it. The changes carried out to date in the areas of harmonisation, funding specialised programmes or institutional reform have as yet been unable to reinforce the common asylum policy. The policy needs to be reformed, and the Committee reiterates its commitment to contribute to this process.

| 3.9 | The Committee believes that the time has come to implement the principles of solidarity and trust much more forcefully. Specifically, it proposes two complementary lines of action. The first aims to alter opinions and attitudes to asylum in the medium and long term, especially among opinion formers, policy-makers and civil servants at local and national level. |
| --- | --- |

3.9

The Committee believes that the time has come to implement the principles of solidarity and trust much more forcefully. Specifically, it proposes two complementary lines of action. The first aims to alter opinions and attitudes to asylum in the medium and long term, especially among opinion formers, policy-makers and civil servants at local and national level.

| 3.10 | The second is partly covered by the work already underway but needs to be better structured and formulated. It entails bolstering the principles of solidarity and trust with institutional mechanisms promoting the involvement of national, regional and local authorities. An incentive-based approach could get asylum policy running smoothly, provided that the most appropriate incentives are identified and properly supported, including financial support. |
| --- | --- |

3.10

The second is partly covered by the work already underway but needs to be better structured and formulated. It entails bolstering the principles of solidarity and trust with institutional mechanisms promoting the involvement of national, regional and local authorities. An incentive-based approach could get asylum policy running smoothly, provided that the most appropriate incentives are identified and properly supported, including financial support.

| 3.11 | The Committee also calls for improvements to refugee integration measures. Organisations working in the field have provided plenty of evidence that asylum seekers are vulnerable to discrimination, have no access to basic public services and are faced with problems in securing accommodation and ensuring their personal safety. Despite its efficient procedures for swiftly and correctly granting refugee status, the European asylum system which we aim to build could fail in the area of integration. |
| --- | --- |

3.11

The Committee also calls for improvements to refugee integration measures. Organisations working in the field have provided plenty of evidence that asylum seekers are vulnerable to discrimination, have no access to basic public services and are faced with problems in securing accommodation and ensuring their personal safety. Despite its efficient procedures for swiftly and correctly granting refugee status, the European asylum system which we aim to build could fail in the area of integration.

| 3.12 | On a similar point, the Committee recommends that alongside the existing horizontal structure, asylum policy should also be analysed in the light of the overall cycle of asylum, which follows the path of people at risk from when they actually enter the EU, through the application procedures, including integration measures, and the medium- to long-term prospects for integration or return to their native country, as appropriate. Developing the policy, by following the asylum cycle and placing people at risk at the core of its action, can make a strong contribution to pinpointing deadlocks and mismatches. |
| --- | --- |

3.12

On a similar point, the Committee recommends that alongside the existing horizontal structure, asylum policy should also be analysed in the light of the overall cycle of asylum, which follows the path of people at risk from when they actually enter the EU, through the application procedures, including integration measures, and the medium- to long-term prospects for integration or return to their native country, as appropriate. Developing the policy, by following the asylum cycle and placing people at risk at the core of its action, can make a strong contribution to pinpointing deadlocks and mismatches.

| 3.13 | The experience gained by civil society organisations and the Committee in this field can contribute to a more comprehensive and detailed evaluation of asylum policy, which is quite rightly being questioned in the wake of the recent political events in countries located close to the EU. The Committee is of the view that much clearer consideration is needed on the role of civil society organisations in the content of the Commission communication. |
| --- | --- |

3.13

The experience gained by civil society organisations and the Committee in this field can contribute to a more comprehensive and detailed evaluation of asylum policy, which is quite rightly being questioned in the wake of the recent political events in countries located close to the EU. The Committee is of the view that much clearer consideration is needed on the role of civil society organisations in the content of the Commission communication.

| 3.14 | The Committee also welcomes the involvement of the Committee of the Regions and local authorities in the development of asylum policy and considers that sub-national authorities are pivotal to the policy's success, particularly as regards integration measures. These authorities must be encouraged, including by means of active funding measures, to take on a more active role in the integration of refugees. |
| --- | --- |

3.14

The Committee also welcomes the involvement of the Committee of the Regions and local authorities in the development of asylum policy and considers that sub-national authorities are pivotal to the policy's success, particularly as regards integration measures. These authorities must be encouraged, including by means of active funding measures, to take on a more active role in the integration of refugees.

4.   Specific comments

| 4.1 | The Committee applauds the Commission's emphasis on practical cooperation. Together with the (necessary) changes planned for the legislative package, practical cooperation will iron out problems in asylum procedures. Improved practical cooperation should aim to cut the red tape involved in granting asylum and to reduce the timeframe for these procedures. |
| --- | --- |

4.1

The Committee applauds the Commission's emphasis on practical cooperation. Together with the (necessary) changes planned for the legislative package, practical cooperation will iron out problems in asylum procedures. Improved practical cooperation should aim to cut the red tape involved in granting asylum and to reduce the timeframe for these procedures.

| 4.1.1 | The establishment of the European Asylum Support Office (EASO) is laudable, and, although still in the early stages, demonstrates that there is enormous potential for cooperation between the Member States. The EASO has begun by focusing on support and training. The Committee urges the EASO to make swifter progress towards greater operational capacity. Boosting the EASO's capacity is both urgent and necessary and should be coordinated with the Migration and Asylum Fund's programme and implementation. Deploying staff and carrying out emergency interventions could raise the office's profile and boost trust in it. The planned annual report could help obtain relevant data on asylum. The Committee recommends that the report should incorporate the evidence which can be supplied in quantity by civil society organisations active in this field. |
| --- | --- |

4.1.1

The establishment of the European Asylum Support Office (EASO) is laudable, and, although still in the early stages, demonstrates that there is enormous potential for cooperation between the Member States. The EASO has begun by focusing on support and training. The Committee urges the EASO to make swifter progress towards greater operational capacity. Boosting the EASO's capacity is both urgent and necessary and should be coordinated with the Migration and Asylum Fund's programme and implementation. Deploying staff and carrying out emergency interventions could raise the office's profile and boost trust in it. The planned annual report could help obtain relevant data on asylum. The Committee recommends that the report should incorporate the evidence which can be supplied in quantity by civil society organisations active in this field.

| 4.1.2 | The Committee urges the EASO to rapidly develop the system for collecting information from migrants' countries of origin. It would thus be in a position to provide Member States with credible, timely and comparable information and so help make the procedure quicker and potentially fairer. Information from independent sources should also be included in these evaluations. |
| --- | --- |

4.1.2

The Committee urges the EASO to rapidly develop the system for collecting information from migrants' countries of origin. It would thus be in a position to provide Member States with credible, timely and comparable information and so help make the procedure quicker and potentially fairer. Information from independent sources should also be included in these evaluations.

| 4.1.3 | Although reinforcing the EASO is a praiseworthy initiative, it should not prevent the Member States from developing their own institutions and capacity for managing asylum issues. In line with the strategy of incentives, reinforcing the EASO should go hand in hand with mechanisms to ensure that national authorities are more open to European cooperation and to managing asylum challenges efficiently. |
| --- | --- |

4.1.3

Although reinforcing the EASO is a praiseworthy initiative, it should not prevent the Member States from developing their own institutions and capacity for managing asylum issues. In line with the strategy of incentives, reinforcing the EASO should go hand in hand with mechanisms to ensure that national authorities are more open to European cooperation and to managing asylum challenges efficiently.

| 4.1.4 | Crisis situations test the viability of institutional solutions – with mixed results in the case of asylum policy. Generally speaking, the EU and the Member States are poorly equipped to cope with exceptional flows of refugees, although analysis shows that these can be predicted, at least as regards entry points. The Committee recommends focusing on boosting the capacity of those States most exposed to normal or extraordinary refugee flows. |
| --- | --- |

4.1.4

Crisis situations test the viability of institutional solutions – with mixed results in the case of asylum policy. Generally speaking, the EU and the Member States are poorly equipped to cope with exceptional flows of refugees, although analysis shows that these can be predicted, at least as regards entry points. The Committee recommends focusing on boosting the capacity of those States most exposed to normal or extraordinary refugee flows.

| 4.1.5 | Maintaining and developing cooperation between the EASO and other EU agencies such as Frontex is welcome. The Committee insists that the EASO should focus on the fundamental rights of people with whom it comes into direct and indirect contact. Cooperation with the Fundamental Rights Agency is crucial for ensuring a structural and operational balance between the tools of asylum policy. |
| --- | --- |

4.1.5

Maintaining and developing cooperation between the EASO and other EU agencies such as Frontex is welcome. The Committee insists that the EASO should focus on the fundamental rights of people with whom it comes into direct and indirect contact. Cooperation with the Fundamental Rights Agency is crucial for ensuring a structural and operational balance between the tools of asylum policy.

| 4.1.6 | The Committee endorses the use of the Civil Protection Mechanism in the event of exceptional migration flows. However, this option should not undermine national authorities' motivation to set up robust asylum systems able to cope with variations in refugee flows. |
| --- | --- |

4.1.6

The Committee endorses the use of the Civil Protection Mechanism in the event of exceptional migration flows. However, this option should not undermine national authorities' motivation to set up robust asylum systems able to cope with variations in refugee flows.

| 4.1.7 | Priority must be given to using funds from the current financial year in order to implement the renewed legislative package efficiently. Nonetheless, the Committee signals the need to continue reinforcing the capacities of Member States faced with refugee flows. As the geopolitical situation of the regions in which these flows originate continues to be unstable, we cannot expect any major decrease in the number of refugees. It is therefore important to continue reinforcing the system in countries exposed to such flows in parallel with the efforts to harmonise and implement the legislation on asylum. Existing projects, many of them innovative, must be kept up and given appropriate backing. Should these projects fail to deliver results, it will undermine the Member States' trust in Community support and their motivation to become more involved in future. |
| --- | --- |

4.1.7

Priority must be given to using funds from the current financial year in order to implement the renewed legislative package efficiently. Nonetheless, the Committee signals the need to continue reinforcing the capacities of Member States faced with refugee flows. As the geopolitical situation of the regions in which these flows originate continues to be unstable, we cannot expect any major decrease in the number of refugees. It is therefore important to continue reinforcing the system in countries exposed to such flows in parallel with the efforts to harmonise and implement the legislation on asylum. Existing projects, many of them innovative, must be kept up and given appropriate backing. Should these projects fail to deliver results, it will undermine the Member States' trust in Community support and their motivation to become more involved in future.

| 4.1.8 | From 2014, a new Asylum and Migration Fund will be available to the Member States. The Committee urges the Commission to enter into serious dialogue with the Member States in order to map national-level needs and priorities accurately. It is imperative that the European Economic and Social Committee, as the representative forum of organised civil society, and the Committee of the Regions and local authorities are involved in this dialogue. The Fund's programme must clearly indicate national needs and priorities as well as the resources and instruments available. The Committee also considers that annual reporting on the use of the funds will push the Member States to be more vigorous in pursuing the goals of asylum policy. |
| --- | --- |

4.1.8

From 2014, a new Asylum and Migration Fund will be available to the Member States. The Committee urges the Commission to enter into serious dialogue with the Member States in order to map national-level needs and priorities accurately. It is imperative that the European Economic and Social Committee, as the representative forum of organised civil society, and the Committee of the Regions and local authorities are involved in this dialogue. The Fund's programme must clearly indicate national needs and priorities as well as the resources and instruments available. The Committee also considers that annual reporting on the use of the funds will push the Member States to be more vigorous in pursuing the goals of asylum policy.

| 4.1.9 | The Committee notes that civil society organisations have great difficulty in accessing the funds needed to carry out projects with a substantial local impact. The procedures should be simplified so as to facilitate the involvement of civil society and asylum seekers. |
| --- | --- |

4.1.9

The Committee notes that civil society organisations have great difficulty in accessing the funds needed to carry out projects with a substantial local impact. The procedures should be simplified so as to facilitate the involvement of civil society and asylum seekers.

| 4.1.10 | The Committee supports the Commission's intention to use available funds primarily for countries currently exposed to refugee flows. This will encourage them to become involved and boost their capacities; it will also put the key principle of asylum policy – solidarity – into practice. |
| --- | --- |

4.1.10

The Committee supports the Commission's intention to use available funds primarily for countries currently exposed to refugee flows. This will encourage them to become involved and boost their capacities; it will also put the key principle of asylum policy – solidarity – into practice.

| 4.1.11 | On a similar note, the Committee unreservedly endorses the financial incentives to be granted to the Member States, along the lines of those currently used for the resettlement of specific categories of refugees (vulnerable groups and people coming from the regional protection programmes), to compensate Member States that agree to relocate beneficiaries of international protection from another Member State. |
| --- | --- |

4.1.11

On a similar note, the Committee unreservedly endorses the financial incentives to be granted to the Member States, along the lines of those currently used for the resettlement of specific categories of refugees (vulnerable groups and people coming from the regional protection programmes), to compensate Member States that agree to relocate beneficiaries of international protection from another Member State.

| 4.1.12 | The funds available must also be used in such a way as to complement other sources of funding such as the European Social Fund and the European Regional Development Fund, and the Committee recommends that organised civil society and local and regional authorities be more involved in the projects. |
| --- | --- |

4.1.12

The funds available must also be used in such a way as to complement other sources of funding such as the European Social Fund and the European Regional Development Fund, and the Committee recommends that organised civil society and local and regional authorities be more involved in the projects.

| 4.2 | The Committee endorses the efforts underway to reform the Dublin Regulation. There is considerable evidence, much of it supplied by civil society organisations, that the system is unable to meet its objectives efficiently. The decisions and recommendations of the European Court of Human Rights are also fundamental in discussions on the reform of this regulation, needed in both the medium and long term. The Committee is always open to debate and will back all efforts to analyse, assess and identify the most suitable rules and tools. The reference to fundamental rights as a key criterion for evaluating the Dublin system is more than welcome. |
| --- | --- |

4.2

The Committee endorses the efforts underway to reform the Dublin Regulation. There is considerable evidence, much of it supplied by civil society organisations, that the system is unable to meet its objectives efficiently. The decisions and recommendations of the European Court of Human Rights are also fundamental in discussions on the reform of this regulation, needed in both the medium and long term. The Committee is always open to debate and will back all efforts to analyse, assess and identify the most suitable rules and tools. The reference to fundamental rights as a key criterion for evaluating the Dublin system is more than welcome.

| 4.3 | As regards the relocation of applicants for international protection, the Committee considers this unnecessary insofar as they benefit from decent conditions in the countries where they apply and the application is processed swiftly. Member States' reception capacities need to be increased. If this is not done, a voluntary, incentive-based mechanism for relocating applicants could deliver results. |
| --- | --- |

4.3

As regards the relocation of applicants for international protection, the Committee considers this unnecessary insofar as they benefit from decent conditions in the countries where they apply and the application is processed swiftly. Member States' reception capacities need to be increased. If this is not done, a voluntary, incentive-based mechanism for relocating applicants could deliver results.

| 4.3.1 | Although there is a broad consensus on the practical need to relocate beneficiaries of international protection, the Member States' cooperation has been half-hearted. The Commission's pilot project has not managed to set up an efficient relocation mechanism. The Committee urges the Commission, the EASO and the Member States to keep up their cooperation on this project and is in favour of converting it into a permanent, voluntary programme. It is imperative that incentives to step up the Member States' involvement in this permanent programme be identified and put into effect. The scale of the incentives and of the motivation should be a key factor in the planned Commission evaluation. |
| --- | --- |

4.3.1

Although there is a broad consensus on the practical need to relocate beneficiaries of international protection, the Member States' cooperation has been half-hearted. The Commission's pilot project has not managed to set up an efficient relocation mechanism. The Committee urges the Commission, the EASO and the Member States to keep up their cooperation on this project and is in favour of converting it into a permanent, voluntary programme. It is imperative that incentives to step up the Member States' involvement in this permanent programme be identified and put into effect. The scale of the incentives and of the motivation should be a key factor in the planned Commission evaluation.

| 4.4 | Establishing joint processing of asylum applications could be a useful tool for implementing asylum policy. The Committee is keen to study the results of the evaluation planned by the Commission on this issue, which is both legally and operationally complex. The Committee considers that joint processing could be an appropriate means of dealing with varying flows of asylum seekers, and could also constitute a standard procedure which the Member States could draw on. The Committee considers that, provided the findings of the impact assessment are taken on board, joint processing should be promoted in tandem with reinforcing national capacities. These capacities extend beyond merely processing applications and the Member States should be encouraged to keep up an active role in all areas of asylum policy. |
| --- | --- |

4.4

Establishing joint processing of asylum applications could be a useful tool for implementing asylum policy. The Committee is keen to study the results of the evaluation planned by the Commission on this issue, which is both legally and operationally complex. The Committee considers that joint processing could be an appropriate means of dealing with varying flows of asylum seekers, and could also constitute a standard procedure which the Member States could draw on. The Committee considers that, provided the findings of the impact assessment are taken on board, joint processing should be promoted in tandem with reinforcing national capacities. These capacities extend beyond merely processing applications and the Member States should be encouraged to keep up an active role in all areas of asylum policy.

| 4.5 | The Committee endorses the activation of the mechanism of the Temporary Protection Directive when conditions are met. Although rare, exceptional refugee flows create periods of crisis and European and national institutions must be prepared to deal with them. The Committee also draws attention to the practices associated with rescue operations and reiterates that the principle of non-refoulement must be fully respected. |
| --- | --- |

4.5

The Committee endorses the activation of the mechanism of the Temporary Protection Directive when conditions are met. Although rare, exceptional refugee flows create periods of crisis and European and national institutions must be prepared to deal with them. The Committee also draws attention to the practices associated with rescue operations and reiterates that the principle of non-refoulement must be fully respected.

| 4.6 | The Committee considers that asylum policy has displayed both maturity and a high level of development as regards Greece. The use of instruments to penalise any infringement of EU law should be coupled with support measures. The Committee urges the Commission and other EU agencies to take a proactive, preventive approach to Member States which need to improve the performance of their national asylum system. The support programme for Greece is a major step forward, but it must be kept up and provided with the necessary funding. The situation in Greece and Malta will be a test for asylum policy. If the Member States and the European institutions cannot display real solidarity towards countries faced with heavy refugee flows, the common asylum policy has failed, and this failure will have serious repercussions for the many people who are at risk. The support must be suitably diversified, reinforced and coordinated. |
| --- | --- |

4.6

The Committee considers that asylum policy has displayed both maturity and a high level of development as regards Greece. The use of instruments to penalise any infringement of EU law should be coupled with support measures. The Committee urges the Commission and other EU agencies to take a proactive, preventive approach to Member States which need to improve the performance of their national asylum system. The support programme for Greece is a major step forward, but it must be kept up and provided with the necessary funding. The situation in Greece and Malta will be a test for asylum policy. If the Member States and the European institutions cannot display real solidarity towards countries faced with heavy refugee flows, the common asylum policy has failed, and this failure will have serious repercussions for the many people who are at risk. The support must be suitably diversified, reinforced and coordinated.

| 4.7 | The Committee calls for the Dublin system to be reinforced, with better monitoring and the establishment of an early warning mechanism. These instruments can help the Member States prepare to better deal with refugee flows and the effective coordination of asylum policy. They must be clearly geared towards the Member States' needs, in light of the imperative to respect the fundamental rights of refugees. |
| --- | --- |

4.7

The Committee calls for the Dublin system to be reinforced, with better monitoring and the establishment of an early warning mechanism. These instruments can help the Member States prepare to better deal with refugee flows and the effective coordination of asylum policy. They must be clearly geared towards the Member States' needs, in light of the imperative to respect the fundamental rights of refugees.

| 4.8 | Improved border management and a better policy on visas could help to strengthen asylum policy. The Committee welcomes the progress made here but considers that a safeguard clause opening up the option of suspending visa-free movement for citizens of a third country could be problematic, even when subject to the condition of data proving that the absence of visas has led to abuse of the asylum system. |
| --- | --- |

4.8

Improved border management and a better policy on visas could help to strengthen asylum policy. The Committee welcomes the progress made here but considers that a safeguard clause opening up the option of suspending visa-free movement for citizens of a third country could be problematic, even when subject to the condition of data proving that the absence of visas has led to abuse of the asylum system.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/97 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/97

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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 — Youth Opportunities Initiative’

COM(2011) 933 final

2012/C 299/18

Rapporteur: Mr JASIŃSKI

On 20 December 2011 the Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Youth Opportunities Initiative

COM(2011) 933 final.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2012.

At its 482nd plenary session, held on 11 to 12 July 2012 (meeting of 12 July), the European Economic and Social Committee adopted the following opinion by 212 votes to one with two abstentions.

1.   Summary of recommendations

1.1   The EESC stresses the usefulness of the Youth Opportunities initiative which not only draws attention to current problems but also highlights the objectives of the Youth on the move communication. The EESC is ready to get involved in implementing the initiative by cooperating with the social partners and civil society organisations and through joint action with stakeholders to promote it.

1.2   The EESC notes that the EU's austerity policy and the lack of a clear and generally recognised growth policy could jeopardise the success of the Youth Opportunities initiative. This key initiative can represent a source of new opportunities for young people but – if considered in isolation, outside the wider economic context – will not, in itself, create a single new job. Accordingly, if we are to ensure the appropriate implementation of this initiative, it is vital to create an appropriate economic and financial environment.

1.3   The EESC recognises that there is a need to continue action to prevent early school leaving. It is important to maintain or, where possible, to increase the resources available to the Member States for preventing early school leaving.

1.4   Taking into account the different situations of young men and women, the EESC emphasises the importance of appropriate education, training and careers advice, which should support young people in their efforts to gain a better education, qualifications and skills and help them to choose schools, including centres of higher education or training, that are able to guarantee them an appropriate job.

1.5   The EESC supports the development of skills that are relevant to the labour market, through the active cooperation of the world of employment and institutes of education. The EESC welcomes the Commission's additional financial support for the Your first EURES job and Erasmus for entrepreneurs programmes and for boosting the mobility of young people.

1.6   The EESC believes it is appropriate to support first work experience and on-the-job training. The EESC agrees that apprenticeships, placements in enterprises and traineeships as well as voluntary service programmes are an important means for young people to acquire skills and work experience. However, apprenticeships, placements in enterprises, traineeships and voluntary service programmes should in no way be considered to be a substitute for regular forms of employment. In this sense, we should stress the importance of all initiatives aimed at improving the quality of placements and traineeships, such as the European Quality Charter on Internships and Apprenticeships.

1.7   The EESC stresses the importance of necessary quality standards for apprenticeships, work placements and traineeships. In this sense, the EESC welcomes the Commission's initiative to adopt a quality framework in 2012 supporting the provision and take-up of high-quality traineeships.

1.8   The EESC emphasises the role that involving the social partners can play in the process of sharing best practices and in designing, implementing and monitoring the work experience system.

1.9   The EESC believes it is appropriate to increase the Commission's budget allocation for the European Voluntary Service. It also welcomes the setting-up of a new European Voluntary Humanitarian Aid Corps. However, it is concerned by the lack of an appropriate assessment of the current pilot phase and of information on whether this initiative is to be genuinely voluntary in nature.

1.10   The first job should guarantee a set of minimum employment standards, which must not differ from those offered to more senior workers. A ban on any form of age discrimination is of key importance. The EESC once again stresses the critical importance of measures that help ensure young people have stable, high-quality and appropriately paid employment, with a guarantee of social security, from the very beginning of their careers.

1.11   The EESC emphasises that the Youth Guarantee initiative should be supported by an active labour market policy which helps close the gap between the education and training system and the labour market, on an equal level for both young men and young women.

1.12   The EESC reiterates the proposals in its recent opinion on the employment policy guidelines for addressing the catastrophic deterioration in young people's labour market prospects triggered by the crisis in many Member States:

| — | set ambitious EU objectives for youth employment; |
| --- | --- |

—

set ambitious EU objectives for youth employment;

| — | consistently implement the Youth Guarantee in all EU countries; |
| --- | --- |

—

consistently implement the Youth Guarantee in all EU countries;

| — | deploy increased EU funding and make access easier, especially in strongly affected countries; |
| --- | --- |

—

deploy increased EU funding and make access easier, especially in strongly affected countries;

| — | set aside increased funding in the new EU budget for tackling youth unemployment; |
| --- | --- |

—

set aside increased funding in the new EU budget for tackling youth unemployment;

| — | improve young people's access to unemployment benefits; |
| --- | --- |

—

improve young people's access to unemployment benefits;

| — | deal with insecure and unregulated work in training and internships; |
| --- | --- |

—

deal with insecure and unregulated work in training and internships;

| — | promote the dual education system more strongly as a model for the EU (1). |
| --- | --- |

—

promote the dual education system more strongly as a model for the EU (1).

1.13   The EESC notes that particular attention should be paid to ensuring the availability of resources for young people under the European Social Fund when drawing up the financial perspective for the years 2014-2020.

1.14   The creation of new high-quality jobs must remain a priority. The EESC proposes that the adoption of a European Youth Employment Strategy should be considered in the next financial perspective.

1.15   The Commission's readiness to provide funds for technical assistance to help Member States make use of EU funds that are still available should be seen as particularly important. This primarily concerns the European Social Fund, under which some EUR 30 billion is still available to Member States for projects within the framework of the 2007-2013 financial perspective.

2.   Summary of the Commission initiative. Background to the problem.

2.1   The problems experienced by young people on the labour market are structural in nature and have been apparent for many years, even before the onset of the current crisis. The economic crisis, which we have been experiencing since 2008, has exacerbated the problems of young people. Unemployment in the 15-24 age group is more than twice as high as for the economically active population as a whole and nearly three times as high as among economically active adults. The number of young Europeans out of work grew by one million between 2008 and 2010 and there are now over five million unemployed young people in the EU. The fact that one in five people is currently unable to find a job in the EU is indeed cause for alarm. Moreover, the growth of long-term unemployment among young people is a particular cause for alarm. On average, 28 % of young unemployed people under the age of 25 remain out of work for over 12 months.

2.2   The Europe 2020 strategy set out a number of ambitious objectives which should help bring about smart, inclusive and sustainable economic growth in the EU. Young people have a key role to play in achieving these objectives. The Youth on the move initiative published in September 2010 notes that quality education and training for all, successful and sustained labour market integration, decent and adequately paid work and opportunities for greater mobility are essential elements in "unleashing the potential of all young people" and thus achieving the objectives of the Europe 2020 strategy. However, the implementation of the model adopted under the strategy remains key.

2.3   The economic crisis has proved to be so serious that it is no longer possible to achieve the objectives outlined in the Youth on the move initiative. Worse still, the situation of young people on the labour market is steadily deteriorating. The European Union needs to invest in its young people and take immediate effective action to prevent and tackle the high unemployment rate, including the long-term unemployment rate, among young people. The funds available for stimulating economic growth are vital for creating new jobs but are not in themselves sufficient for solving the unemployment problem among young people.

2.4   Following the first European semester of economic governance in 2011, the Commission, in the 2012 Annual Growth Survey, draws attention to the first indications that Member States are not reacting effectively enough to the recommendations made.

2.5   In the light of the deteriorating employment situation for young people, the Commission is undertaking a renewed effort to remedy the situation by proposing the Youth Opportunities Initiative, which focuses specifically on young people who are not in employment, education or training. Its aim is to combine the specific measures of the Member States with those of the EU, whose priorities are set out in the Europe 2020 strategy, in the June 2011 Council conclusions on youth employment and in the Council Recommendation on policies to reduce early school leaving.

2.6   Given the gravity of the situation described above the Commission considers that, without waiting for the 2012 country-specific recommendations, Member States, in particular those with the highest youth unemployment rates, should take decisive measures in the following four main areas:

| — | Preventing early school leaving; |
| --- | --- |

—

Preventing early school leaving;

| — | Developing skills that are relevant to the labour market; |
| --- | --- |

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Developing skills that are relevant to the labour market;

| — | Supporting a first work experience and on-the-job training; |
| --- | --- |

—

Supporting a first work experience and on-the-job training;

| — | Access to the labour market: getting a (first) job. |
| --- | --- |

—

Access to the labour market: getting a (first) job.

2.7   The Commission will provide funds for technical assistance to help Member States to use the EU funds still available, particularly the European Social Fund, which still has some EUR 30 billion available for projects within the framework of the 2007-2013 financial perspective.

2.8   The Youth Opportunities initiative builds on a strong partnership between Member States and the Commission and encourages concerted action to ensure that all interested parties make full use of the EU financial support and instruments available.

3.   General comments on the Commission's communication

3.1   The Youth Opportunities communication should be assessed with close reference to the Commission's recommendations set out in the initiatives under the Europe 2020 strategy i.e. Youth on the move, Agenda for new skills and jobs, as well as in the June 2011 Council conclusions on youth employment and in the Council Recommendation on policies to reduce early school leaving.

3.2   The Committee regrets that – as in the case of the Youth on the move initiative – the Commission has this time also overlooked those measures that strengthen and develop the social and civil dimension of Europe's youth issues. The initiative should act as a means of cooperating with young people and not just be about providing information about them or implementing action for their own good. The Committee therefore once again calls on the Commission to include the necessary action under this initiative. The EESC emphasises the need to get young people involved in bringing this initiative to life at every level.

3.3   Not only has there been no improvement in the situation of young people on the EU labour market since the launch of the Youth on the move initiative, it has actually got worse. The EESC notes that the Member States' macroeconomic austerity policy, which is being implemented against the background of the EU's new economic governance, as well as the lack of a clear and generally recognised growth policy, could jeopardise the success of the Youth Opportunities initiative. The measures being implemented as part of the Member States' strict budgetary policy must take into consideration the impact they are having on the situation of young people on the labour market. The EESC is therefore of the opinion that this key initiative can represent a source of new opportunities for young people but – if considered in isolation, outside the wider economic context – will not, in itself, create a single new job. Accordingly, if we are to ensure the appropriate implementation of this initiative, it is vital to create an appropriate economic and financial environment. Care should be taken to ensure that the measures taken in response to the crisis and public debt do not counteract the objective of stimulating demand and employment during and after the crisis and of cushioning social impacts. It is especially important to secure public investment in an active labour market policy and in training and education.

3.4   The EESC notes that the lack of any immediate and effective action to improve the situation on the EU's labour market will only exacerbate phenomena such as brain waste and brain drain connected to labour migration. This entails not only the – often irretrievable – loss of public funds invested in education but also the loss of human capital at Member State level and throughout the whole EU.

3.5   The EESC nonetheless welcomes the Commission's new initiative, which both draws attention to current problems and highlights the objectives of the Youth on the move initiative. The added value of the Youth Opportunities initiative lies in the fact that it focuses on specific measures by Member States and identifies opportunities for financial support which the EESC believes could significantly help to improve the situation of young people on the education and labour market front.

3.6   The aim of the Commission's communication is to encourage the Member States to take immediate, specific corrective measures in the area of employment and to link the issue of the employment of young people (especially those who are not in employment, education or training – NEET) with systems of education and training, and to improve and strengthen the law, given that there is often a close link between the NEET phenomenon and the shadow economy.

3.7   Preventing early school leaving

3.7.1   The EESC welcomes this new initiative which aims to prevent early school leaving and confirms that it is particularly important to reduce the proportion of early school leavers, particularly in the case of certain Member States. This is also one of the key objectives of the Europe 2020 strategy (2). The EESC believes that these measures should be continued by maintaining or, where possible, increasing the resources available to the Member States for preventing early school leaving and by taking action to make the educational services available more attractive. The EESC also stresses the need to make education systems more inclusive.

3.7.2   The EESC agrees with the Commission that immediate action should be taken in the form of re-integration through training and therefore calls on the Member States to take immediate and effective action to reduce the proportion of early school leavers to 10 %. The average level in the EU Member States is currently 14 %.

3.8   Developing skills that are relevant to the labour market. Mobility.

3.8.1   The EESC agrees that the development of skills that are relevant to the labour market is key for integrating young people onto the labour market; above all, it is vital to bring together the worlds of employment, education and training more closely, and to place a particular emphasis on the role of a dual education system. The EESC notes the importance of supporting entrepreneurship and cooperation between business, in the agricultural, industrial as well as service sectors, and the education system at all levels of schooling. The EESC also emphasises the role of education for the broader needs of society beyond the economy. In this sense, it is important that school curricula take account of labour law issues and ensure that students are aware of the opportunities offered by the EU in this area. This can have an important effect on raising the awareness of young people before they seek their first job as well as strengthening their European sense of identity.

3.8.2   The EESC draws attention to the guidelines set out in the Bruges Communiqué on enhanced European cooperation in vocational education and training for the period 2011-2020. Europe needs flexible and high-quality vocational education and training systems which can meet the needs of today and tomorrow. Lifelong advice and guidance in the area of education, training and employment can be a useful instrument for making this initiative more effective. This is particularly important in the context of the problem of the brain drain.

3.8.3   The Committee recommends boosting the instruments for youth mobility. The EESC supports the Commission's initiative to set up, with the support of the European Parliament, a targeted job mobility scheme to help young people find a job in another EU Member State and to help businesses fill their bottleneck vacancies. The EESC considers it important to support foreign language learning and the acquisition of ICT skills.

3.8.4   The EESC supports the Commission's initiative to provide financial support under the "Your first EURES job" scheme. This programme aims to help some 5 000 young people to fill vacancies in other Member States during 2012-2013. The EESC will be monitoring the programme during its pilot phase, in view of its further development.

3.8.5   The EESC welcomes the Commission's measures which aim to use EUR 3 million of ESF technical assistance to help Member States set up support schemes for young business starters and social entrepreneurs. The financing of around 600 further exchanges in 2012 under the Erasmus for entrepreneurs programme is also a significant development.

3.8.6   On the other hand, however, the EESC considers that the Commission Communication pays insufficient attention to the problem of financing direct grants to young people seeking to set up a business (shortage of resources and limited access to them). This concerns financial resources both from European funds and from the budgets of the Member States. The Committee considers that assistance to young entrepreneurs who have decided to set up a business could be a key instrument in reducing youth unemployment.

3.9   Supporting a first work experience and on-the-job training

3.9.1   The EESC agrees that apprenticeships, placements in enterprises and traineeships are an important means for young people to acquire skills and work experience and should form a part of corporate social responsibility strategies. If a company invests in young workers and treats them as a valuable resource, this can significantly increase their level of commitment to the company's operations.

3.9.2   The EESC notes the role that an active labour market policy and improved job-matching services can play in this area. Young people should be provided with careers advice covering all sectors: agricultural, industrial and services, while they are still at school.

3.9.3   The EESC believes it is important that the Commission is allocating EUR 1.5 million in 2012 to a campaign addressed to enterprises to help raise business awareness of Erasmus and Leonardo da Vinci placements.

3.9.4   The EESC also stresses the importance of necessary quality standards for apprenticeships, work placements and traineeships. A European framework should be established for regulating traineeships. In this sense, the EESC welcomes the Commission's initiative to present a quality framework in 2012 supporting the provision and take-up of high quality traineeships, including an EU panorama on traineeships increasing transparency on the conditions for trainees throughout the EU.

3.9.5   Work placements must not be a substitute for regular forms of employment. They should offer trainees the opportunity to acquire the skills needed to enable easy access onto the labour market. Trainees should receive decent pay for carrying out actual work-related tasks at the workplace. Low or no remuneration leads to the segmentation of the labour market. If work placements are to be effective and tailored to the needs of the labour market, the social partners need to be involved in their design, organisation, implementation and financing.

3.9.6   The EESC will be closely monitoring and supporting all initiatives for improving the quality of work placements and traineeships, such as the European Quality Charter on Internships and Apprenticeships put forward by the European Youth Forum, in order to strengthen the civil dialogue for establishing appropriate rules in this area.

3.9.7   The EESC welcomes the adoption by the European social partners of the framework agreement on inclusive labour markets in 2010. The EESC highlights the importance of the factors listed in the framework agreement which have an impact on labour market participation: a) contextual factors (linked to the economic and labour market environment, which have hampered integration in the past), b) work-related factors, c) individual factors (such as skills, qualification and education levels, motivation, language knowledge, health status including disability and frequent or long unemployment periods). The EESC calls on the social partners in the Member States to implement the agreement as a matter of urgency, particularly the objective to raise the number of high-quality apprenticeships and traineeships.

3.9.8   The EESC confirms the need to create a single European skills passport, which brings together in one place all the qualifications and skills that have been acquired as part of formal, informal and non-formal education.

3.9.9   The EESC stresses the importance of sharing best practices on apprenticeships for young people and welcomes the news that the Commission will directly allocate EUR 1.3 million from the European Social Fund to help set up apprenticeship schemes.

3.9.10   The experiences of those countries that have introduced a dual education system is particularly important in this context. Its advantage is that it combines traditional school education and the practical application of this knowledge in the workplace. This allows students to develop the skills and competences needed on the labour market. The EESC emphasises the role that involving the social partners can play in the process of sharing best practices and in designing, implementing and monitoring the work experience system. The Committee welcomes the Commission's guidelines in this area. The dual system of apprenticeships, with its mix of general education and training, should be studied with a view to its application elsewhere.

3.9.11   The EESC believes it is appropriate to increase the Commission's budget allocation for the European Voluntary Service in order to provide at least 10 000 places for volunteers in 2012. It welcomes the setting up of a new European Voluntary Humanitarian Aid Corps. However, it is concerned by the lack of an appropriate assessment of the current pilot phase and of information on whether this initiative is to be genuinely voluntary in nature. As in the case of work placements and traineeships, the need to ensure high-quality volunteer work should be highlighted.

3.9.12   The EESC will support the exchange and dissemination of experience and information in connection with national long-term voluntary service programmes, used as a means of career orientation and acquisition of initial work experience, which have been implemented successfully in a number of Member States.

3.10   Access to the labour market: Getting a (first) job

3.10.1   The importance of a person's first job cannot be overestimated, not only in terms of future income but also for their future career path and pension. A set of minimum working standards should be guaranteed as soon as a person gets his or her first job. These standards must not differ from those offered to more senior workers. A ban on any form of age discrimination is of key importance. The significance of measures that help to guarantee young people stable, high-quality and appropriately paid employment from the outset cannot be underestimated (3). Incentive programmes should be considered for those small and medium-sized enterprises which offer young workers a permanent first job.

3.10.2   The Commission's recommendations on reducing the excessive rigidities of permanent contracts should also consider the risks relating to such forms of action. Temporary contracts, which are now commonplace for young people – particularly at the start of their careers – have led to a dual labour market, which is divided into segments. Temporary workers live in uncertainty, are at risk of losing their jobs and have poor career prospects. This dual labour market is starting to become a particularly serious problem for young people and can lead them to perform an endless balancing act as workers who are continuously uncertain about their future. This can have a negative impact on their future career development. The segmentation of the labour market – which effectively makes young people second-class workers – also means worse working conditions and poorer career prospects. The EESC warns against impermanent solutions offering few long-term prospects when it comes to integration in the job market: instead of settling for precarious employment, measures should be taken to guarantee that fixed-term employment and poorly-paid positions with little social security do not become the norm for young people.

3.10.3   Stability and security on the labour market are not only important for employees but also in the interest of their employers, as they foster the competitiveness of companies, sectors and branches of industry by ensuring increased productivity. It is therefore important for people to be aware that – given the issue of job security – a fixed term employment contract is actually more costly for an employer than an open-ended contract.

3.10.4   The EESC reiterates the proposals in its recent opinion on the employment policy guidelines for addressing the catastrophic deterioration in young people's labour market prospects triggered by the crisis in many Member States:

| — | set ambitious EU objectives for youth employment; |
| --- | --- |

—

set ambitious EU objectives for youth employment;

| — | consistently implement the Youth Guarantee in all EU countries; |
| --- | --- |

—

consistently implement the Youth Guarantee in all EU countries;

| — | deploy increased EU funding and make access easier, especially in strongly affected countries; |
| --- | --- |

—

deploy increased EU funding and make access easier, especially in strongly affected countries;

| — | set aside increased funding in the new EU budget for tackling youth unemployment; |
| --- | --- |

—

set aside increased funding in the new EU budget for tackling youth unemployment;

| — | improve young people's access to unemployment benefits; |
| --- | --- |

—

improve young people's access to unemployment benefits;

| — | deal with insecure and unregulated work in training and internships; |
| --- | --- |

—

deal with insecure and unregulated work in training and internships;

| — | promote the dual education system more strongly as a model for the EU. |
| --- | --- |

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promote the dual education system more strongly as a model for the EU.

3.11   The Member States and labour market actors need to demonstrate much more initiative if they are to implement the Youth Guarantee and ensure that young people are either in a job, education or (re-) training within four months of leaving school, especially for early leavers from education and training and other vulnerable young people. The European Commission should take action to ensure that the Member States implement this initiative without delay.

3.12   The action of the Member States and labour market actors thus far has not led to any improvement in the situation of young people. This is clearly visible as regards the implementation of the Youth Guarantee. Accordingly, the EESC welcomes the Commission's initiative to allocate EUR 4 million to Member States to help them set up Youth Guarantee schemes. Here the EESC reiterates its call on the Member States to promptly identify all barriers in order to safeguard the Youth Guarantee and set tangible objectives and measures as part of national reform plans.

3.13   The EESC emphasises that the Youth Guarantee initiative should be supported by an active labour market policy which helps close the gap between the education and training system and the labour market, on an equal level for both young men and young women. It must also take account of the situation of migrants, national and ethnic minorities and people with disabilities. Is should also take into account the knowledge, competences, skills and experience of older workers, including retired people.

3.14   There is still a lack of concrete targets for youth employment in the current EU employment policy guidelines. The EESC reiterates its demand for quantifiable European targets, especially in terms of significantly reducing youth unemployment and with regard to the Youth Guarantee.

3.15   The Commission's readiness to provide funds for technical assistance to help Member States make use of EU funds that are still available should be seen as particularly important. This primarily concerns the European Social Fund, under which some EUR 30 billion is still available to Member States for projects within the framework of the 2007-2013 financial perspective. The European Commission should take action to ensure that the Member States make full use of these funds without delay.

3.16   The EESC urges the Commission to make it clear to the Member States that these funds should be used primarily for projects for young people. The European Commission should draw the Member States' attention to the need to ensure that the process of distributing these funds and their appropriate allocation takes place with the full involvement of the social partners, their youth organisations (where such organisations exist) and NGOs representing young people.

3.17   The EESC notes that particular attention should be paid to ensuring resources for young people under the European Social Fund when drawing up the financial perspective for the years 2014-2020, particularly for young people who are not in employment, education or training (NEET). It is worth highlighting the fact that there is often a close link between the NEET phenomenon and the shadow economy. The EESC stresses that there is a need both now and in the future for a long-term, permanent and systematic financing formula which is accessible to a wide cross-section of civil society.

3.18   The creation of new high-quality jobs must remain a priority. The EESC proposes that the adoption of the European Youth Employment Strategy should be taken into account in the next financial perspective. The funds available under this strategy should be used to support those enterprises, civil society organisations, public authorities and other employers that create new, high-quality jobs for young people.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  See the specific recommendations in EESC opinion (OJ C 143, 22.5.2012, p. 94), Chap.5.

1

See the specific recommendations in EESC opinion

, Chap.5.

(2)  EESC opinion on the communication on Youth on the move (OJ C 132, 3.5.2011, p. 55).

2

Youth on the move

(3)  EESC opinion on the communication on Youth on the move (OJ C 132, 3.5.2011, p. 55).

3

Youth on the move

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/103 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/103

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council establishing for the period 2014 to 2020 the Justice programme’

COM(2011) 759 final — 2011/0369 (COD)

2012/C 299/19

Rapporteur: Edouard DE LAMAZE

On 9 February 2012 the Council decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Proposal for a Regulation of the European Parliament and of the Council establishing for the period 2014 to 2020 the Justice programme

COM(2011) 759 final — 2011/0369 (COD).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 126 votes to 1 with 5 abstentions.

1.   Conclusions and recommendations

1.1   The EESC welcomes this proposal's aim of simplification and rationalisation and supports the Commission's preference for option B. Merging the Civil Justice and Criminal justice programmes is justified by the fact that the objectives, stakeholders and types of action funded are very close.

1.2   However, in the context of the new Justice programme for the period 2014-2020, despite the legal reasons given in the proposal, the EESC continues to question the advisability of adding a third objective, i.e. to prevent and reduce drug demand and supply, to the first two "specific objectives", i.e. to promote proper application of Union legislation in the areas of judicial cooperation in civil and criminal matters and to facilitate access to justice. In addition to the fact that it seems merely to be an extension of the first objective, the EESC draws attention to the consequences, in terms of the impression it would give, if such an objective were to be included in a regulation, and therefore the strong, immediate and direct repercussions it would have for the parties involved in proceedings, associations, NGOs and other potential grant beneficiaries: it could give the impression that other equally vital issues, such as fighting human trafficking, for instance, were not of equal concern to the Commission.

1.3   At a more fundamental level, the EESC is concerned by the message the Commission is sending out. It reiterates its frequently-expressed opinion that anti-drug measures should focus more on prevention through an educational, health and social approach, and less on a punitive approach (1).

1.4   The EESC shares the Commission's views that the management of funds for this programme should be as flexible as possible, in order to ensure optimum adaptability to the needs of civil society and to allow potential candidates as much freedom as possible, to promote the creativity of projects and to take future policy orientations into account.

1.5   However, if it is impossible to pre-establish amounts for the different priorities, the EESC emphasises the importance of having access to a prior, albeit indicative, breakdown of the budget according to the different objectives.

1.6   The EESC takes note of the Commission's intention not to allocate more funds to the drug prevention objective than the budget share assigned to it. It urges the Commission to hold firm to its commitments and suggests in this regard that funds retrieved by freezing and confiscating the proceeds of drug trafficking should go towards funding this objective, as foreseen in the future directive on the freezing and confiscation of the proceeds of crime.

1.7   Despite the complexity of the financial regulation in place, the EESC stresses the importance of educating all citizens concerned on the conditions for access to funding, providing them with clear information in all EU languages. This would undoubtedly go some way towards making projects more relevant, thereby encouraging them, including in Member States which have so far been under-represented in the selected programmes. Indeed, the EESC stresses the need to promote equal access to these programmes for all EU citizens.

1.8   It believes that the concept of European added value, which is one of the fundamental criteria for selecting programmes, should also be better framed. Since the financial envelope for this programme is, in essence, small (although increasing, which the EESC welcomes), the EESC stresses the importance of focusing grants more rigorously on projects with clearly established European added value. Transnational projects must be encouraged.

1.9   Since the annual work programmes will have to provide details on certain essential aspects of the programme's implementation (mainly on how the budget is broken down), the EESC believes that if the Commission is to adopt them in the form of implementing acts, then they should be adopted in accordance with the examination procedure and not, as currently foreseen in the proposal, with the advisory procedure. This will ensure that these programmes are not adopted by the Commission unless they comply with the opinion of the committee established under Regulation (EU) No 182/2011 (composed of the Member States' representatives).

1.10   Regarding the need to pick out the priorities from among the actions eligible for funding (Article 6), the EESC believes, in particular, that the emphasis should be put more clearly on justice, where a lot remains to be done to facilitate access.

1.11   The EESC welcomes the new direction taken in this proposal, which seeks to include all legal professionals and, in particular, lawyers in European judicial training. Like judges and magistrates, lawyers contribute to the proper application of EU law. They are also the first port of call for the parties involved in legal proceedings. They are the ones who institute proceedings.

1.12   Similarly, the EESC stresses the urgency of including all types of law practitioners in transnational judicial cooperation networks by providing the necessary funds. In the interests of consistency with recent policy initiatives to strengthen the rights of the defence, the EESC calls, in particular, for action to be taken as soon as possible to redress a situation it considers unacceptable, namely the exclusion of lawyers, in fact or in law, from most transnational judicial cooperation networks.

1.13   In order to create a common rights framework, particularly with respect to family law, the EESC stresses the need to look upon the Charter of Fundamental Rights, as a basis for harmonisation. In a context that is still characterised by widely differing cultures and legal concepts, the EESC, has frequently reiterated, and has recently stressed in the context of matrimonial property regimes (2) the importance of promoting the use of an optional European alternative (a so-called 28th regime).

2.   Gist of the Communication

2.1   In the interests of simplification and rationalisation, the Commission has decided to reduce the number of funding programmes for developing the area of rights and justice by ensuring that everyone - the general public, partners and law practitioners - is aware of their rights and knows how to exercise or apply them. Alongside the Rights and Citizenship Programme (3), the 2014-2020 Justice Programme will bring together the Civil justice, Criminal justice and Drug prevention and information programmes.

2.2   This Proposal for a Regulation grants an envelope of EUR 472 million, which should cover the activities where the EU's intervention can bring added value compared with Member States acting alone. The overall objective is to contribute to the European area of justice by promoting judicial cooperation in civil and criminal matters. This objective is broken down into specific objectives, namely to promote the correct application of EU law in this area (on the basis of Articles 81 and 82 TFEU), to facilitate access to justice and to prevent and reduce the demand for drugs. This last aspect is no longer being approached from the health perspective but from the perspective of crime prevention (on the basis of Article 84 TFEU).

2.3   These objectives justify support for training for judiciary and judicial staff, including lawyers and notaries, for cooperation through networks designed to build mutual knowledge and trust, and for raising public awareness.

2.4   The funding envelope will also be used to finance an analytical basis to support EU policymaking. In order to achieve greater flexibility, the proposal does not make provision for the allocation of specific amounts for each policy area.

2.5   The programme's annual priorities will be adopted by the Commission in the form of implementing acts, in accordance with the advisory procedure.

2.6   The proposal sets out requirements for monitoring and evaluation (including "interim evaluation").

3.   General comments

3.1   The establishment of a European area of justice is an EU public good with appreciable benefits for everyone - both the general public and partners. In fact, it affects all basic aspects of life and everyday matters (divorce, overnight visitation and visitation rights, succession, guardianship, business litigation, consumer litigation, etc. as well as rights in criminal matters). It also contributes to improving security within the European area by promoting cooperation in the field of crime prevention.

3.2   Recalling the functional complementarity between the Justice Programme and the Rights and Citizenship Programme, the EESC believes that the European area of justice and freedom will only have meaning in terms of the rights that all EU citizens can enjoy in practice, wherever they are. This programme must therefore be evaluated in that light.

3.3   In order to create a common rights framework, particularly with respect to family law, the EESC stresses the need to look upon the Charter of Fundamental Rights, as a basis for harmonisation. In a context that is characterised by widely differing cultures and legal concepts, the EESC, has frequently reiterated, and recently stressed in the context of matrimonial property regimes (4), the importance of promoting the use of an optional European alternative (a so-called 28th regime). The establishment of this regime would advance the recognition of the rights of EU citizens by efficiently counteracting any discrimination they might suffer because the laws of their Member State grant them fewer rights than those of other Member States.

3.4   Respect for rights, and in particular fundamental rights, in the EU, to which judicial cooperation in civil and criminal matters should contribute, is an end in itself. Nevertheless, the knock-on effect it could have on the single market in terms of growth and jobs may be significant and should be enhanced, in particular by supporting training efforts on behalf of legal professionals (5). The EESC points out that better cooperation in civil matters and, therefore, a more expeditious settlement of transnational disputes, would generate substantial growth in businesses' transnational activities.

3.5   Whereas evaluations have revealed the efficiency of the previous programmes (Civil justice, Criminal justice, and Drug prevention and information for 2007-2013), reducing their number, and therefore their implementing procedures, is a good thing in itself. It will make it easier to achieve the various objectives. In addition to harmonising procedures, the EESC stresses the importance of reducing their inherent complexity.

3.6   In particular, the EESC welcomes the simplification and rationalisation measure which consists in merging the Civil justice and Criminal justice programmes. This is justified by the abolition of the third pillar in the Lisbon Treaty and the fact that the objectives, stakeholders and types of action funded in these two areas (i.e. e-justice and training) are very close.

3.7   The EESC advocates promoting the criminal justice projects, especially in Member States that have so far benefited very little from available support. Since this is a relatively new dimension, the EU approach is still unclear and is worth developing.

3.8   However, the EESC is more circumspect about the Drug prevention and information programme, which has its legal basis in public health. It has concerns regarding the continued coverage of the public health aspects as a priority. It also draws attention to duplication with activities funded by the future Internal Security Fund, which will certainly result in a purely punitive approach. It reiterates its message on the importance of developing a primarily preventive approach to drug prevention, offering people with drug dependencies the opportunity to seek assistance and treatment. Efforts must be made to raise the awareness of the Courts and of lawyers on this issue.

3.9   Furthermore, in order to ensure that the drug prevention objective does not absorb a disproportionate share of the global budget, the EESC recommends using the funds retrieved by freezing and confiscating the proceeds of drug trafficking to partly fund this objective, as foreseen in the future directive on the freezing and confiscation of the proceeds of crime (6).

3.10   Although the EESC remains unsure about what precise actions will be funded in the context of preventing crimes associated with illicit drug trafficking, it is satisfied to note that the EUR 472 million envelope for implementing this programme seems to mark a substantial increase in the Commission's support.

3.11   In order to ensure that the EU budget is genuinely "used to finance EU public goods" and "actions [...] where it can secure better results" (7), the EESC reiterates the need to improve the focus of resources on projects with European added value (Article 3), especially in criminal matters, an area where Member States still have reservations about the intervention of EU law.

3.12   In order to ensure the efficient allocation of funds under the EU budget, the EESC also emphasises the importance of ensuring consistency, complementarity and synergies between the various funding programmes and, in particular, with the Rights and Citizenship Programme. In contrast, more vigilance is required with regard to the risks of duplication.

3.13   The EESC notes with satisfaction that although the projects are selected in the framework of the annual work programmes, they can last several years. This gives them time to develop and meet their objectives. While the EESC believes that co-financing is a good idea, it questions whether the possibility of modulation is justified (8).

3.14   Despite the complexity of the financial regulation in place, the EESC stresses the importance of educating all citizens concerned on the conditions for access to funding, providing them with clear information in all EU languages. The EESC believes that the concept of European added value would benefit from better framing. This would undoubtedly go some way towards making projects more relevant, thereby encouraging them, including in Member States which have so far been under-represented in the selected programmes. Indeed, the EESC stresses the need to promote equal access to these programmes for all EU citizens.

3.15   The EESC is similarly perplexed that the legislative financial statement does not even specify an indicative breakdown of funds according to the specific objectives. Without questioning the legitimate need for flexibility in the management of funds, it emphasises the importance of providing some prior indication on this point.

4.   Specific comments

4.1   European judicial training

4.1.1   Since there can be no real progress without mutual trust, the EESC encourages support for measures designed to establish a shared European culture, resolutely directed towards the practice and exercise of rights and supported by an awareness and understanding of national judicial systems. For mutual assistance within the EU to work, it is essential that people involved in litigation in another national system can be sure that their procedural rights are protected.

4.1.2   The EESC considers European judicial training for law practitioners to be a vital aspect of the new programme, which deserves more prominence. European law suffers from the fact that there are too many differences in its application, depending on the Member State. This is often due to lack of interest or awareness among practitioners. This is flagrant in the case of customs law. The EESC reiterates in this context the need for a substantial increase in support for European judicial training. This is all the more important in view of the Commission's goal to train 20 000 law practitioners a year until 2020, i.e. 700 000, in total (9). As the Commission has rightly emphasised, language training is a prerequisite for improving communication between law practitioners within the European area of justice and freedom.

4.1.3   The EESC considers it indispensable to include lawyers in these training activities, in particular. This is all the more justified by the fact that in some Member States they follow the same training as magistrates. Lawyers are the first port of call in the legal system. Their well-informed advice will determine the access that people charged with a crime will have to the courts. They should be able to benefit from EU-funded initiatives, alongside judges and public prosecutors. The quality of access to justice in the area of European law depends on it. Their participation is also indispensable in the interests of a better balance in favour of the rights of the defence.

4.1.4   The EESC regrets the confusion created by the term "judicial staff" (10) and is grateful to the Commission for specifying in this Proposal that the term covers all law professionals, including solicitors and notaries, who effectively make an essential contribution to the correct application of EU law. The EESC welcomes the fact that the Commission seems determined to take this approach in its European judicial training pilot project, due to be launched this year.

4.1.5   The EESC also sees a need to define objective criteria that judicial training programmes would have to comply with in order to be eligible. It is imperative for the course criteria to include a reference to the Charter of Fundamental Rights. The programmes' compliance with these criteria would have to be regularly and closely monitored and checked. The EESC stresses the need for support to be made conditional on the inherent quality of the programmes, which should be subject to rigorous evaluation.

4.1.6   The EESC attaches particular importance to ensuring that judicial training for judges and lawyers addresses the specific aspects of drug dependency and makes it possible to develop a judicial approach that fits in with a health and social approach, aimed at preventing repeat offences.

4.2   Cross-border judicial cooperation

4.2.1   The EESC calls for action to be taken as soon as possible to redress a situation it considers unacceptable, namely the exclusion of lawyers from the judicial cooperation networks. Although the judicial network in criminal matters falls within the remit of Eurojust and is not covered by this programme, it is nonetheless significant that lawyers have no access to it. Financial constraints cannot be used to justify the current imbalance in favour of the prosecution. Even if they are only limited, resources must be used in such a way as to respect the principle of equality of arms in cross-border cases.

4.2.2   This requirement presupposes, especially with regard to the implementation of the European arrest warrant, that lawyers are in a position to identify a qualified lawyer in another Member State who can gain access to the case file and provide advice on aspects of that Member State's procedural law, and, more generally, on the local aspects of the case. The new provisions introduced by the Proposal for a Directive on the right of access to a lawyer in criminal proceedings, which establish the right to two lawyers in European Arrest Warrant proceedings (one in the executing Member State and another in the issuing Member State) constitute additional grounds – should any be needed – for the full participation of lawyers in European judicial cooperation networks. For this reason, the EESC welcomes the support that the future cross-border network of defence lawyers is likely to provide for lawyers involved in these cross-border situations. In the interests of consistency and efficiency, it calls on the Commission to make financial commitments, commensurate with needs, for this purpose.

4.2.3   Similarly, the EESC deplores the fact that, in practice, lawyers and notaries are sidelined from the Judicial Network in civil and commercial matters, whereas on paper, the network should have been open to these professions and to bailiffs since January 2011. All these professions play a direct role in the application of EU acts and international instruments. Here, too, the proper functioning of the network depends on adequate financial support.

4.2.4   Due to the proliferation of initiatives from many legal professions, in the form of small, often onerous structures, the EESC recommends improving consistency and coordination between these networks in order to create "circles of coherence" (11) on which it will be possible to build a genuine European judicial structure.

4.3   e-Justice

4.3.1   The dematerialisation of justice is a key factor which the EESC does not consider to have been sufficiently emphasised in this proposal. Its impact on access to justice, including for the socially-disadvantaged or those with disabilities, needs to be studied very thoroughly. In the common interest of the parties involved in legal proceedings and of law practitioners, significant progress is still needed in this area.

4.3.2   The EESC expects clearer direction on this issue from the Commission. At present, the promotion of available e-justice tools seems more targeted towards the public than towards professionals. However, in order to ensure the quality of court decisions and their compliance with EU law, it is vital to facilitate and encourage the use of these tools among law practitioners, who need training to this end.

4.3.3   The EESC notes with satisfaction the fact that the financial envelope provided for in this proposal may also be used to improve IT networks in this area (Article 8(2)). The EESC mostly has in mind the e-Justice portal project for a lawyers' search engine and the e-Codex project to make national e-justice systems interoperable. The EESC draws attention to the fact that to ensure the security and efficiency of these networks, it has to be possible for the bars to certify the professional identity of lawyers.

4.4   Indicators

4.4.1   Clearly, the indicators must be discussed in greater detail. The EESC welcomes the fact that, in the meantime, the Commission has launched this discussion with respect to both annual monitoring and to intermediate and final evaluation. More specifically, with regard to accessing justice, the purely subjective criterion of the "European perception of access to justice" has to be complemented. For the purposes of training, it seems important to make good use of public-private partnerships by involving universities and law and bar training institutes. Although set to decrease during the programme's implementation, the EESC believes that the cost of control measures (used in the broad sense of the expression), estimated at 3 to 6 % of the total budget in the legislative financial statement, should be capped.

4.5   Procedures for adopting the annual work programmes

4.5.1   With regard to the annual programmes, which the Commission is to adopt in the form of implementing acts, the EESC questions whether the advisory procedure is the right choice. The EESC believes that it would be more appropriate to opt for the examination procedure, which ensures that these are not adopted by the Commission unless they comply with the opinion of the committee established under Regulation (EU) No 182/2011 (composed of the Member States' representatives).

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Cf. EESC opinion on the Communication from the Commission to the European Parliament and the Council – Towards a stronger European response to drugs, adopted on 24 May 2012 (OJ C 229, 31.7.2012, p. 85).

1

Communication from the Commission to the European Parliament and the Council – Towards a stronger European response to drugs

(2)  OJ C 376, 22.12.2011, p. 87–91.

2

(3)  OJ C 191, 29.6.2012, p. 108-110.

3

(4)  See footnote 2.

4

(5)  In his report A new Strategy for the Single Market (9 May 2010), Mario Monti stressed the importance of the correct application of EU law and training for the judiciary, to improve the efficiency of the single market.

5

A new Strategy for the Single Market

(6)  Cf. EESC opinion (see page of this Official Journal).

6

(7)  COM(2010) 700 final.

7

(8)  At present a 20 % contribution is needed to obtain the remaining 80 % of funding in the form of grants.

8

(9)  COM(2011) 551 final.

9

(10)  In accordance with Article 81(2)(h) and Article 82(1)(c) TFEU regarding judicial cooperation in civil matters and in criminal matters, respectively, which both refer to "the judiciary and judicial staff".

10

(11)  Cf. European Parliament resolution of 14 March 2012 on judicial training (2012/2575(RSP)).

11

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/108 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/108

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Opinion of the European Economic and Social Committee on the ‘Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for external borders and visa’

COM(2011) 750 final — 2011/0365 (COD),

‘Proposal for a regulation of the European Parliament and of the Council establishing the Asylum and Migration Fund’

COM(2011) 751 final — 2011/0366 (COD),

‘Proposal for a regulation of the European Parliament and of the Council laying down general provisions on the Asylum and Migration Fund and on the instrument for financial support for police cooperation, preventing and combating crime, and crisis management’

COM(2011) 752 final — 2011/0367 (COD)

and the ‘Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis management’

COM(2011) 753 final — 2011/0368 (COD)

2012/C 299/20

Rapporteur: Mr Pariza CASTAÑOS

On 16 February 2012, the Council decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

| | Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for external borders and visa

  COM(2011) 750 final — 2011/0365 (COD) |
| --- | --- |

Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for external borders and visa

COM(2011) 750 final — 2011/0365 (COD)

| | Proposal for a regulation of the European Parliament and of the Council establishing the Asylum and Migration Fund

  COM(2011) 751 final — 2011/0366 (COD) |
| --- | --- |

Proposal for a regulation of the European Parliament and of the Council establishing the Asylum and Migration Fund

COM(2011) 751 final — 2011/0366 (COD)

| | Proposal for a regulation of the European Parliament and of the Council laying down general provisions on the Asylum and Migration Fund and on the instrument for financial support for police cooperation, preventing and combating crime, and crisis management

  COM(2011) 752 final — 2011/0367 (COD) |
| --- | --- |

Proposal for a regulation of the European Parliament and of the Council laying down general provisions on the Asylum and Migration Fund and on the instrument for financial support for police cooperation, preventing and combating crime, and crisis management

COM(2011) 752 final — 2011/0367 (COD)

| | Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis management

  COM(2011) 753 final — 2011/0368 (COD) |
| --- | --- |

Proposal for a regulation of the European Parliament and of the Council establishing, as part of the Internal Security Fund, the instrument for financial support for police cooperation, preventing and combating crime, and crisis management

COM(2011) 753 final — 2011/0368 (COD)

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 133 votes to none with two abstentions.

1.   General comments

| 1.1 | The European Commission's proposals on the 2014-2020 budget for home affairs are crucial in terms of creating an area of freedom, security and justice, and a more open, secure and solidarity-based Europe. The EESC is in favour of increasing the importance of the Asylum and Migration and Internal Security Funds within the budget. |
| --- | --- |

1.1

The European Commission's proposals on the 2014-2020 budget for home affairs are crucial in terms of creating an area of freedom, security and justice, and a more open, secure and solidarity-based Europe. The EESC is in favour of increasing the importance of the Asylum and Migration and Internal Security Funds within the budget.

| 1.2 | The Committee believes that the European Union provides these policies with great added value, since managing migratory flows, asylum and threats to security are areas that Member States cannot tackle alone. |
| --- | --- |

1.2

The Committee believes that the European Union provides these policies with great added value, since managing migratory flows, asylum and threats to security are areas that Member States cannot tackle alone.

| 1.3 | The Committee supports the Commission's proposal for shared management and a result-oriented approach, drawing up multi-annual programmes in the context of high-level political dialogue, so that national programmes are consistent with the EU's political objectives and priorities. |
| --- | --- |

1.3

The Committee supports the Commission's proposal for shared management and a result-oriented approach, drawing up multi-annual programmes in the context of high-level political dialogue, so that national programmes are consistent with the EU's political objectives and priorities.

| 1.4 | It is essential that all actions funded are based on policies (the objectives of the area of freedom, security and justice), that they have European added value and that they contribute to the achievement of the EU's political objectives. |
| --- | --- |

1.4

It is essential that all actions funded are based on policies (the objectives of the area of freedom, security and justice), that they have European added value and that they contribute to the achievement of the EU's political objectives.

| 1.5 | The EESC welcomes the Commission's efforts to simplify the financial instruments through the creation of two funds – the Asylum and Migration Fund (1) and the Internal Security Fund (2) – accompanied by a horizontal regulation laying down common rules on programming, information, financial management, control and evaluation (3). |
| --- | --- |

1.5

The EESC welcomes the Commission's efforts to simplify the financial instruments through the creation of two funds – the Asylum and Migration Fund (1) and the Internal Security Fund (2) – accompanied by a horizontal regulation laying down common rules on programming, information, financial management, control and evaluation (3).

| 1.6 | The EESC is in favour of the common horizontal framework which significantly simplifies the current system, making financial management and implementation more flexible and reinforcing the system of monitoring and evaluation. |
| --- | --- |

1.6

The EESC is in favour of the common horizontal framework which significantly simplifies the current system, making financial management and implementation more flexible and reinforcing the system of monitoring and evaluation.

| 1.7 | The EESC supports the Commission's proposal to set a basic amount and another variable or flexible amount when distributing financial resources amongst the Member States. |
| --- | --- |

1.7

The EESC supports the Commission's proposal to set a basic amount and another variable or flexible amount when distributing financial resources amongst the Member States.

| 1.8 | Systems for evaluating results should be improved, making use of appropriate indicators, and the independent work of research centres and civil society organisations should therefore be funded. |
| --- | --- |

1.8

Systems for evaluating results should be improved, making use of appropriate indicators, and the independent work of research centres and civil society organisations should therefore be funded.

| 1.9 | The Committee agrees that national programmes should be based on the principle of partnership, but believes that better systems are needed for participation by all stakeholders: national, regional and local authorities, civil society organisations and social partners. The principle of partnership should be stipulated in the regulations so that it does not depend upon national provisions and practices. |
| --- | --- |

1.9

The Committee agrees that national programmes should be based on the principle of partnership, but believes that better systems are needed for participation by all stakeholders: national, regional and local authorities, civil society organisations and social partners. The principle of partnership should be stipulated in the regulations so that it does not depend upon national provisions and practices.

| 1.10 | The EESC, which works together with the other EU institutions on the development of immigration and asylum policies, has a particular commitment to the activities of the European Integration Forum. It would therefore stress the importance of the Asylum and Migration Fund for the integration of immigrants and refugees, and believes that integration policies should be complemented with European Social Fund resources. |
| --- | --- |

1.10

The EESC, which works together with the other EU institutions on the development of immigration and asylum policies, has a particular commitment to the activities of the European Integration Forum. It would therefore stress the importance of the Asylum and Migration Fund for the integration of immigrants and refugees, and believes that integration policies should be complemented with European Social Fund resources.

| 1.11 | The Committee proposes that the financial resources for "Union actions" be increased, since they have great European added value. 20 % of the fund should be allocated to these actions, and the Commission should set up a dialogue with the EESC and with the European Integration Forum, bearing in mind that this financial instrument should be used to strengthen the Forum's activities and support the European networks of civil society and of social partners. |
| --- | --- |

1.11

The Committee proposes that the financial resources for "Union actions" be increased, since they have great European added value. 20 % of the fund should be allocated to these actions, and the Commission should set up a dialogue with the EESC and with the European Integration Forum, bearing in mind that this financial instrument should be used to strengthen the Forum's activities and support the European networks of civil society and of social partners.

| 1.12 | The Committee has proposed that fora and platforms be created at national, regional and local levels to enable participation by immigrants' organisations and other civil society organisations. The functioning of these activities should by funded with Asylum and Migration Fund resources. |
| --- | --- |

1.12

The Committee has proposed that fora and platforms be created at national, regional and local levels to enable participation by immigrants' organisations and other civil society organisations. The functioning of these activities should by funded with Asylum and Migration Fund resources.

| 1.13 | The EESC believes that integration policies geared towards reducing the social exclusion of European citizens, minorities and immigrants should be complemented with financial resources from the European Social Fund. |
| --- | --- |

1.13

The EESC believes that integration policies geared towards reducing the social exclusion of European citizens, minorities and immigrants should be complemented with financial resources from the European Social Fund.

| 1.14 | Europe should respond decisively to the rise in racism and xenophobia aimed at people of immigrant origin. The Union's institutions should be highly active in combating these ideologies and behaviour. |
| --- | --- |

1.14

Europe should respond decisively to the rise in racism and xenophobia aimed at people of immigrant origin. The Union's institutions should be highly active in combating these ideologies and behaviour.

| 1.15 | The protection of human rights and respect for the Charter of Fundamental Rights should be fully guaranteed in all actions funded by the Asylum and Migration and Internal Security Funds. |
| --- | --- |

1.15

The protection of human rights and respect for the Charter of Fundamental Rights should be fully guaranteed in all actions funded by the Asylum and Migration and Internal Security Funds.

| 1.16 | The Committee wishes to see a better balance between freedom and security. The European Union should continue to be a free and open society based on the rule of law, and the values of freedom and the protection of fundamental rights should never be sacrificed. |
| --- | --- |

1.16

The Committee wishes to see a better balance between freedom and security. The European Union should continue to be a free and open society based on the rule of law, and the values of freedom and the protection of fundamental rights should never be sacrificed.

| 1.17 | The EESC believes that the regulation should give organised civil society a more active role in assessing the impact, effectiveness and added value of the initiatives and actions of the European internal security strategy. |
| --- | --- |

1.17

The EESC believes that the regulation should give organised civil society a more active role in assessing the impact, effectiveness and added value of the initiatives and actions of the European internal security strategy.

2.   The Asylum and Migration Fund: civil society's approach

| 2.1 | In general terms, the Committee supports the initiatives and budget lines proposed by the Commission and is in favour of strengthening the partnership principle. |
| --- | --- |

2.1

In general terms, the Committee supports the initiatives and budget lines proposed by the Commission and is in favour of strengthening the partnership principle.

| 2.2 | The EESC has a particular interest in the proposals on the Asylum and Migration Fund, and would call on the Member States, in the negotiations with the Council, to approve the sums proposed by the Commission, and not to reduce them, since the issues of asylum, migration, integration and the protection of people's fundamental rights should be provided with the necessary resources, particularly during the economic crisis. |
| --- | --- |

2.2

The EESC has a particular interest in the proposals on the Asylum and Migration Fund, and would call on the Member States, in the negotiations with the Council, to approve the sums proposed by the Commission, and not to reduce them, since the issues of asylum, migration, integration and the protection of people's fundamental rights should be provided with the necessary resources, particularly during the economic crisis.

| 2.3 | In contrast to the current budgetary arrangements, the European Parliament will be able to play a decisive role, since it is a co-legislator and will be able to assess all initiatives democratically and ensure European added value. |
| --- | --- |

2.3

In contrast to the current budgetary arrangements, the European Parliament will be able to play a decisive role, since it is a co-legislator and will be able to assess all initiatives democratically and ensure European added value.

| 2.4 | The EESC believes that the EP should strengthen the European dimension of priority policies which are to receive funding, and at national level as well. Furthermore, during the political process of approving the regulations, it should facilitate participation by organised civil society by means of the partnership principle and the creation of fora and platforms, as well as the performance of independent assessments. |
| --- | --- |

2.4

The EESC believes that the EP should strengthen the European dimension of priority policies which are to receive funding, and at national level as well. Furthermore, during the political process of approving the regulations, it should facilitate participation by organised civil society by means of the partnership principle and the creation of fora and platforms, as well as the performance of independent assessments.

| 2.5 | The EESC welcomes the new provisions in the regulations that help civil society to access subsidies, but recommends that the procedures be more flexible so that small organisations can also take part, with reduced administrative and financial burdens. |
| --- | --- |

2.5

The EESC welcomes the new provisions in the regulations that help civil society to access subsidies, but recommends that the procedures be more flexible so that small organisations can also take part, with reduced administrative and financial burdens.

| 2.6 | Civil society provides great added value in terms of identifying needs on the basis of independent reports and carrying out studies and evaluations of policies. Civil society organisations have great experience and knowledge of the local situation and are therefore well aware of how actions should be implemented. |
| --- | --- |

2.6

Civil society provides great added value in terms of identifying needs on the basis of independent reports and carrying out studies and evaluations of policies. Civil society organisations have great experience and knowledge of the local situation and are therefore well aware of how actions should be implemented.

| 2.7 | The EESC believes that the principle of partnership is a cornerstone of the new financial framework, and it should ensure a more participatory approach for all stakeholders: national, regional and local authorities, civil society organisations and social partners. |
| --- | --- |

2.7

The EESC believes that the principle of partnership is a cornerstone of the new financial framework, and it should ensure a more participatory approach for all stakeholders: national, regional and local authorities, civil society organisations and social partners.

| 2.8 | The principle of partnership should be applied at all stages: from preparation and implementation to the monitoring and evaluation of the funding granted. This should include both Member State and EU actions (4). |
| --- | --- |

2.8

The principle of partnership should be applied at all stages: from preparation and implementation to the monitoring and evaluation of the funding granted. This should include both Member State and EU actions (4).

| 2.9 | The EESC is in favour of the Member States, under the Financial Regulation, having to create partnerships with the authorities and bodies concerned to develop and implement national programmes. These authorities and bodies should include regional and local authorities, civil society (non-governmental organisations, immigrants' organisations and social partners) and international organisations (UNHCR, IOM etc.). |
| --- | --- |

2.9

The EESC is in favour of the Member States, under the Financial Regulation, having to create partnerships with the authorities and bodies concerned to develop and implement national programmes. These authorities and bodies should include regional and local authorities, civil society (non-governmental organisations, immigrants' organisations and social partners) and international organisations (UNHCR, IOM etc.).

3.   Priorities and political dialogue

| 3.1 | The EESC would point out that a ‧political dialogue‧ is crucial to establishing the priorities of national programmes, but believes that, in addition to the European Commission and the Member States, all European institutional stakeholders should take part (EP, EESC and CoR). |
| --- | --- |

3.1

The EESC would point out that a ‧political dialogue‧ is crucial to establishing the priorities of national programmes, but believes that, in addition to the European Commission and the Member States, all European institutional stakeholders should take part (EP, EESC and CoR).

| 3.2 | A specific role in the political dialogue should be guaranteed for the EESC and for the European Integration Forum, with a view to identifying the priorities and objectives for funding and to overcoming obstacles. The forum and the EESC can enhance the European added value of the Asylum and Migration Fund in each Member State's multi-annual programming. |
| --- | --- |

3.2

A specific role in the political dialogue should be guaranteed for the EESC and for the European Integration Forum, with a view to identifying the priorities and objectives for funding and to overcoming obstacles. The forum and the EESC can enhance the European added value of the Asylum and Migration Fund in each Member State's multi-annual programming.

| 3.3 | The Forum and the EESC should also be consulted when establishing priorities in transnational actions or actions of special interest to the European Union, and in the mid-term review of specific actions. The European Commission should also establish a partnership with social partners and non-governmental organisations, in the context of "Union actions". |
| --- | --- |

3.3

The Forum and the EESC should also be consulted when establishing priorities in transnational actions or actions of special interest to the European Union, and in the mid-term review of specific actions. The European Commission should also establish a partnership with social partners and non-governmental organisations, in the context of "Union actions".

| 3.4 | The EESC also proposes that the new financial framework guarantee that all Member States set up a national-level structured and multi-stakeholder dialogue with social partners and non-governmental organisations so that they can play a significant role in identifying national priorities before the dialogue with the European Commission. |
| --- | --- |

3.4

The EESC also proposes that the new financial framework guarantee that all Member States set up a national-level structured and multi-stakeholder dialogue with social partners and non-governmental organisations so that they can play a significant role in identifying national priorities before the dialogue with the European Commission.

4.   Programming and management

| 4.1 | The EESC believes that the financial capacity of EU actions should be increased, i.e. the funds intended for activities of a priority political nature (supporting legislation and political coordination), as well as projects in which organised civil society and social partners play a role. To this end, the EESC is in favour of the European Commission having 20 % of the total budget of the Asylum and Migration Fund. In its management, the Commission should establish a more active dialogue with the EESC, the Forum and civil society organisations. |
| --- | --- |

4.1

The EESC believes that the financial capacity of EU actions should be increased, i.e. the funds intended for activities of a priority political nature (supporting legislation and political coordination), as well as projects in which organised civil society and social partners play a role. To this end, the EESC is in favour of the European Commission having 20 % of the total budget of the Asylum and Migration Fund. In its management, the Commission should establish a more active dialogue with the EESC, the Forum and civil society organisations.

| 4.2 | The EESC supports the Commission's proposal that the financial contribution in the context of national programmes should cover 75 % of the total eligible costs of the project, which may also be co-financed from public or private sources. |
| --- | --- |

4.2

The EESC supports the Commission's proposal that the financial contribution in the context of national programmes should cover 75 % of the total eligible costs of the project, which may also be co-financed from public or private sources.

| 4.3 | It is also in favour of the possibility of increasing the contribution to 90 % under the strategic priorities defined in each of the specific regulations, or "in duly justified circumstances, in particular if projects could otherwise not have been implemented and the objectives of the national programme would not have been achieved". Actions and projects carried out by small non-governmental organisations should be prioritised. |
| --- | --- |

4.3

It is also in favour of the possibility of increasing the contribution to 90 % under the strategic priorities defined in each of the specific regulations, or "in duly justified circumstances, in particular if projects could otherwise not have been implemented and the objectives of the national programme would not have been achieved". Actions and projects carried out by small non-governmental organisations should be prioritised.

| 4.4 | The EESC agrees with the objective of simplifying and reducing the administrative burden, and that the monitoring and evaluation of national- and European-level programmes and projects should be a priority. It is essential to ensure an independent assessment of the highest quality, in cooperation with organised civil society, and to provide them with the financial resources required. |
| --- | --- |

4.4

The EESC agrees with the objective of simplifying and reducing the administrative burden, and that the monitoring and evaluation of national- and European-level programmes and projects should be a priority. It is essential to ensure an independent assessment of the highest quality, in cooperation with organised civil society, and to provide them with the financial resources required.

| 4.5 | On the basis of the assessment reports provided by the Member States (a provisional report in 2017 and an ex post report in 2023), the Commission will present a report to the European Parliament, the Council, the EESC and the CoR on the application and impact of the regulations. The EESC believes that civil society should be given a role in the assessment, and to this end will propose to the Commission that a structured system of consultation be set up and a conference called. |
| --- | --- |

4.5

On the basis of the assessment reports provided by the Member States (a provisional report in 2017 and an ex post report in 2023), the Commission will present a report to the European Parliament, the Council, the EESC and the CoR on the application and impact of the regulations. The EESC believes that civil society should be given a role in the assessment, and to this end will propose to the Commission that a structured system of consultation be set up and a conference called.

| 4.6 | The EESC supports the Commission's proposal to establish a basic amount and another variable or flexible amount when distributing financial resources amongst the Member States. With regard to the flexible amount, the EESC considers it crucial for each Member State to draw up their annual programme in line with the EU's priorities and including cooperation with other Member States. |
| --- | --- |

4.6

The EESC supports the Commission's proposal to establish a basic amount and another variable or flexible amount when distributing financial resources amongst the Member States. With regard to the flexible amount, the EESC considers it crucial for each Member State to draw up their annual programme in line with the EU's priorities and including cooperation with other Member States.

| 4.7 | With regard to the Asylum and Migration Fund, the EESC believes that the establishment of national, regional and local immigration and integration fora and/or platforms, in which civil society organisations participate, should be expressly included as a priority action, to be funded by means of a variable amount. |
| --- | --- |

4.7

With regard to the Asylum and Migration Fund, the EESC believes that the establishment of national, regional and local immigration and integration fora and/or platforms, in which civil society organisations participate, should be expressly included as a priority action, to be funded by means of a variable amount.

| 4.8 | There should also be more transparency in the allocation of percentages of the fund dedicated to each specific objective, with a view to ensuring a balance at national level. |
| --- | --- |

4.8

There should also be more transparency in the allocation of percentages of the fund dedicated to each specific objective, with a view to ensuring a balance at national level.

| 4.9 | The financial resources for "Union actions" should not just be allocated to emergency assistance, the European Migration Network, technical assistance and the implementation of specific operational tasks by Union agencies, but also to support for the European Integration Forum and for European civil-society and social-partner networks. |
| --- | --- |

4.9

The financial resources for "Union actions" should not just be allocated to emergency assistance, the European Migration Network, technical assistance and the implementation of specific operational tasks by Union agencies, but also to support for the European Integration Forum and for European civil-society and social-partner networks.

| 4.10 | The EESC does not agree with the Commission's proposal only to fund research projects considered ‧innovative‧ from the point of view of their application by security forces and services. Support for research projects in which civil society, social partners and non-governmental organisations participate should be maintained, and security and immigration policies and their impact on fundamental rights should be assessed. |
| --- | --- |

4.10

The EESC does not agree with the Commission's proposal only to fund research projects considered ‧innovative‧ from the point of view of their application by security forces and services. Support for research projects in which civil society, social partners and non-governmental organisations participate should be maintained, and security and immigration policies and their impact on fundamental rights should be assessed.

5.   Beneficiaries of the Asylum and Migration Fund

| 5.1 | The EESC welcomes the flexibility in the Commission's proposal in terms of the beneficiaries covered and stresses the need to ensure that actions funded can be applied to a broad range of people, and not just third-country nationals residing legally in the EU. There has been much discussion of this issue in the European Integration Forum and in the EESC's opinions. |
| --- | --- |

5.1

The EESC welcomes the flexibility in the Commission's proposal in terms of the beneficiaries covered and stresses the need to ensure that actions funded can be applied to a broad range of people, and not just third-country nationals residing legally in the EU. There has been much discussion of this issue in the European Integration Forum and in the EESC's opinions.

| 5.2 | The EESC would like the Asylum and Migration Fund to allow for actions aimed at everybody, regardless of their status, including immigrants without papers, and it therefore welcomes the Commission's proposal to broaden the scope of the beneficiaries of actions, since this is the only way to fund the integration work of social partners and non-governmental organisations working on the integration of people without documents. |
| --- | --- |

5.2

The EESC would like the Asylum and Migration Fund to allow for actions aimed at everybody, regardless of their status, including immigrants without papers, and it therefore welcomes the Commission's proposal to broaden the scope of the beneficiaries of actions, since this is the only way to fund the integration work of social partners and non-governmental organisations working on the integration of people without documents.

| 5.3 | However, the EESC is against the Commission's proposal including actions to integrate citizens of a Member State with a migration background, "having at least one parent (i.e. mother or father) who is a third-country national", because it could lead to discrimination, since nationals of Member States should not be subject to integration tests or programmes as a condition for residence and free movement, since that would violate the principle of equal treatment guaranteed by virtue of being a Union citizen. |
| --- | --- |

5.3

However, the EESC is against the Commission's proposal including actions to integrate citizens of a Member State with a migration background, "having at least one parent (i.e. mother or father) who is a third-country national", because it could lead to discrimination, since nationals of Member States should not be subject to integration tests or programmes as a condition for residence and free movement, since that would violate the principle of equal treatment guaranteed by virtue of being a Union citizen.

| 5.4 | The EESC believes the Asylum and Migration Fund to be aimed at funding integration and reception policies for people who have recently arrived in Europe. The EU has more appropriate financial instruments for preventing the social exclusion and lack of opportunities suffered by certain European citizens of immigrant descent, or by EU citizens living in a Member State other than their State of nationality, such as the European Social Fund. |
| --- | --- |

5.4

The EESC believes the Asylum and Migration Fund to be aimed at funding integration and reception policies for people who have recently arrived in Europe. The EU has more appropriate financial instruments for preventing the social exclusion and lack of opportunities suffered by certain European citizens of immigrant descent, or by EU citizens living in a Member State other than their State of nationality, such as the European Social Fund.

| 5.5 | Programmes intended to protect particularly vulnerable people should be priorities for funding, particularly those aimed at unaccompanied minors, pregnant women and victims of trafficking and sexual exploitation. |
| --- | --- |

5.5

Programmes intended to protect particularly vulnerable people should be priorities for funding, particularly those aimed at unaccompanied minors, pregnant women and victims of trafficking and sexual exploitation.

6.   Information, transparency and publicity

| 6.1 | The EESC believes that the new financial framework should guarantee greater information, publicity and transparency. Member States and competent authorities should guarantee access to information on national programmes (through the creation of a web portal). |
| --- | --- |

6.1

The EESC believes that the new financial framework should guarantee greater information, publicity and transparency. Member States and competent authorities should guarantee access to information on national programmes (through the creation of a web portal).

| 6.2 | However, simplifying procedures should not mean less transparency. The new framework should increase the degree of transparency in the implementation of programmes and of actions at national, regional and local levels. |
| --- | --- |

6.2

However, simplifying procedures should not mean less transparency. The new framework should increase the degree of transparency in the implementation of programmes and of actions at national, regional and local levels.

7.   Fundamental Rights

| 7.1 | The EESC believes that the financial framework should enhance the protection of human rights in all actions, since the Charter of Fundamental Rights has a positive impact on internal security, asylum and migration policies. The Committee has previously drawn up an own-initiative opinion (5) calling for human rights to be protected in immigration, asylum, return and border policies. |
| --- | --- |

7.1

The EESC believes that the financial framework should enhance the protection of human rights in all actions, since the Charter of Fundamental Rights has a positive impact on internal security, asylum and migration policies. The Committee has previously drawn up an own-initiative opinion (5) calling for human rights to be protected in immigration, asylum, return and border policies.

| 7.2 | The EESC recommends that the regulations on the Asylum and Migration Fund and the Internal Security Fund guarantee that all actions and projects funded by the EU rigorously respect people's fundamental rights and ensure that the rights enshrined in the Charter are properly protected. |
| --- | --- |

7.2

The EESC recommends that the regulations on the Asylum and Migration Fund and the Internal Security Fund guarantee that all actions and projects funded by the EU rigorously respect people's fundamental rights and ensure that the rights enshrined in the Charter are properly protected.

| 7.3 | The Fundamental Rights Agency (FRA) in Vienna should play an active and concrete role in assessing whether the policies and actions funded by the EU are compatible with fundamental rights. Non-governmental organisations can play a key role in assessing the impact of national, regional and local actions on the application of the Charter of Fundamental Rights. |
| --- | --- |

7.3

The Fundamental Rights Agency (FRA) in Vienna should play an active and concrete role in assessing whether the policies and actions funded by the EU are compatible with fundamental rights. Non-governmental organisations can play a key role in assessing the impact of national, regional and local actions on the application of the Charter of Fundamental Rights.

| 7.4 | The European Integration Forum can also evaluate the compatibility of integration policies with the protection of fundamental rights and non-discrimination. |
| --- | --- |

7.4

The European Integration Forum can also evaluate the compatibility of integration policies with the protection of fundamental rights and non-discrimination.

8.   Emergencies and technical assistance

| 8.1 | The new regulation pays particular attention to emergency and crisis situations. The EESC agrees with the Commission's proposal to ensure that the EU has the capacity to act flexibly, with sufficient financial resources to tackle emergencies. |
| --- | --- |

8.1

The new regulation pays particular attention to emergency and crisis situations. The EESC agrees with the Commission's proposal to ensure that the EU has the capacity to act flexibly, with sufficient financial resources to tackle emergencies.

| 8.2 | The EESC supports the Commission's initiative to provide resources which can be mobilised quickly in the event of "migration-related crises", or to address "urgent and specific needs in the event of an emergency situation", and that within the limits of the available resources, the assistance may amount to 100 % of the eligible expenditure. |
| --- | --- |

8.2

The EESC supports the Commission's initiative to provide resources which can be mobilised quickly in the event of "migration-related crises", or to address "urgent and specific needs in the event of an emergency situation", and that within the limits of the available resources, the assistance may amount to 100 % of the eligible expenditure.

| 8.3 | However, the Committee proposes that these funds principally be directed towards tackling humanitarian crisis situations, because solidarity should firstly be applied to the protection and security of the people affected. |
| --- | --- |

8.3

However, the Committee proposes that these funds principally be directed towards tackling humanitarian crisis situations, because solidarity should firstly be applied to the protection and security of the people affected.

| 8.4 | Furthermore, the common guarantees, standards and rights laid down in EU law should be respected by Member States and EU authorities, including in emergency situations. |
| --- | --- |

8.4

Furthermore, the common guarantees, standards and rights laid down in EU law should be respected by Member States and EU authorities, including in emergency situations.

| 8.5 | The EESC also supports the establishment of an emergency mechanism to enable the EU to fund prompt intervention, in cooperation with Member States, in the event of disasters, terrorist attacks or large-scale cyber-attacks. |
| --- | --- |

8.5

The EESC also supports the establishment of an emergency mechanism to enable the EU to fund prompt intervention, in cooperation with Member States, in the event of disasters, terrorist attacks or large-scale cyber-attacks.

9.   External dimension

| 9.1 | The EESC believes that, since the external dimension of these policies is now a priority, the funding of actions should be consistent with the EU's internal and external priorities in these areas. |
| --- | --- |

9.1

The EESC believes that, since the external dimension of these policies is now a priority, the funding of actions should be consistent with the EU's internal and external priorities in these areas.

| 9.2 | Cooperation between DG HOME and the European External Action Service in the establishment and agreement of political priorities should be improved. This will help to ensure that policies and projects funded under the new budgetary framework complement rather than contradict the EU's development policies and external relations. Cooperation should be improved through agreements between the EU and third countries, but development aid should not be conditional upon readmission and border control agreements. |
| --- | --- |

9.2

Cooperation between DG HOME and the European External Action Service in the establishment and agreement of political priorities should be improved. This will help to ensure that policies and projects funded under the new budgetary framework complement rather than contradict the EU's development policies and external relations. Cooperation should be improved through agreements between the EU and third countries, but development aid should not be conditional upon readmission and border control agreements.

| 9.3 | The objective of the external dimension of these policies should be to improve both internal security and third countries' development. External policy and development aid are the most coherent framework for the external dimension of asylum, migration and internal security policies (6). |
| --- | --- |

9.3

The objective of the external dimension of these policies should be to improve both internal security and third countries' development. External policy and development aid are the most coherent framework for the external dimension of asylum, migration and internal security policies (6).

| 9.4 | The EESC proposes that the Asylum and Migration Fund and the Internal Security Fund also be used to improve development in relation to human rights and the rule of law, particularly in terms of third countries strengthening their asylum systems and compliance with international standards. |
| --- | --- |

9.4

The EESC proposes that the Asylum and Migration Fund and the Internal Security Fund also be used to improve development in relation to human rights and the rule of law, particularly in terms of third countries strengthening their asylum systems and compliance with international standards.

| 9.5 | It should also be borne in mind that countries neighbouring the EU should not have to bear the full cost of asylum procedures for people transiting through their territory. The EU should cooperate by means of these funds. |
| --- | --- |

9.5

It should also be borne in mind that countries neighbouring the EU should not have to bear the full cost of asylum procedures for people transiting through their territory. The EU should cooperate by means of these funds.

10.   Integration

| 10.1 | The EESC supports the Commission's proposal that integration policies should be implemented at local and regional level through language courses, civic orientation, participation in social and civil life, promoting intercultural dialogue and facilitating equal access to goods and services. It is crucial that actions are managed by non-governmental organisations and local and regional authorities. |
| --- | --- |

10.1

The EESC supports the Commission's proposal that integration policies should be implemented at local and regional level through language courses, civic orientation, participation in social and civil life, promoting intercultural dialogue and facilitating equal access to goods and services. It is crucial that actions are managed by non-governmental organisations and local and regional authorities.

| 10.2 | The Committee has drawn up an own-initiative opinion (7) containing the same proposal, and held a conference in Valencia involving local and regional authorities and many civil society organisations. This approach was also supported by the European Integration Forum. |
| --- | --- |

10.2

The Committee has drawn up an own-initiative opinion (7) containing the same proposal, and held a conference in Valencia involving local and regional authorities and many civil society organisations. This approach was also supported by the European Integration Forum.

| 10.3 | Particular attention should be paid to supporting actions and projects which treat integration as a dynamic two-way social process of mutual adaptation. |
| --- | --- |

10.3

Particular attention should be paid to supporting actions and projects which treat integration as a dynamic two-way social process of mutual adaptation.

| 10.4 | The EESC supports the Commission's proposal that European funds should be dedicated to specific objectives and not be used to fund national programmes which are not linked to European programmes (8). |
| --- | --- |

10.4

The EESC supports the Commission's proposal that European funds should be dedicated to specific objectives and not be used to fund national programmes which are not linked to European programmes (8).

| 10.5 | The Committee believes that Asylum and Migration Fund resources should not be used to fund national programmes which violate human rights or contradict the common basic principles for integration. The EESC is against the use by certain Member States of “integration tests” for the renewal of residence permits, family reunification or access to public goods and services. |
| --- | --- |

10.5

The Committee believes that Asylum and Migration Fund resources should not be used to fund national programmes which violate human rights or contradict the common basic principles for integration. The EESC is against the use by certain Member States of “integration tests” for the renewal of residence permits, family reunification or access to public goods and services.

| 10.6 | The Committee has stated in other opinions (9) that there should be more complementarity between the Integration Fund and the European Social Fund in the funding of certain programmes. |
| --- | --- |

10.6

The Committee has stated in other opinions (9) that there should be more complementarity between the Integration Fund and the European Social Fund in the funding of certain programmes.

11.   Asylum

| 11.1 | The EESC agrees with the priorities of the common European asylum system (CEAS), in particular the support measures to improve reception and integration conditions and asylum procedures and to enhance Member States' capacities. |
| --- | --- |

11.1

The EESC agrees with the priorities of the common European asylum system (CEAS), in particular the support measures to improve reception and integration conditions and asylum procedures and to enhance Member States' capacities.

| 11.2 | The Committee proposes that a proportion of the funds be allocated to projects and activities aimed at ensuring that Member States meet their international protection obligations and implement European legislation. |
| --- | --- |

11.2

The Committee proposes that a proportion of the funds be allocated to projects and activities aimed at ensuring that Member States meet their international protection obligations and implement European legislation.

| 11.3 | The EESC considers the funding of the evaluation of Member States' asylum policies to be a priority, particularly aimed at improving procedures and the quality of protection for refugees and asylum seekers. |
| --- | --- |

11.3

The EESC considers the funding of the evaluation of Member States' asylum policies to be a priority, particularly aimed at improving procedures and the quality of protection for refugees and asylum seekers.

| 11.4 | The EESC supports the development of a resettlement programme for the transfer of refugees from outside of the EU and their settlement within it. |
| --- | --- |

11.4

The EESC supports the development of a resettlement programme for the transfer of refugees from outside of the EU and their settlement within it.

| 11.5 | The Committee also supports the programme for relocation within the EU, providing financial incentives for Member States adhering to it. |
| --- | --- |

11.5

The Committee also supports the programme for relocation within the EU, providing financial incentives for Member States adhering to it.

| 11.6 | The European Asylum Support Office (EASO) in Malta should have a clear mandate for assessing national asylum systems and their conformity with European and international law and fundamental rights. This evaluation should be carried out in cooperation with civil society and the UNHCR. |
| --- | --- |

11.6

The European Asylum Support Office (EASO) in Malta should have a clear mandate for assessing national asylum systems and their conformity with European and international law and fundamental rights. This evaluation should be carried out in cooperation with civil society and the UNHCR.

12.   Admission

| 12.1 | The EESC welcomes the possibility for the Asylum and Migration Fund to finance "capacity-building" measures, such as drawing up strategies to promote legal migration through flexible and transparent admission procedures and improving Member States' capacity to develop and evaluate their immigration policies. |
| --- | --- |

12.1

The EESC welcomes the possibility for the Asylum and Migration Fund to finance "capacity-building" measures, such as drawing up strategies to promote legal migration through flexible and transparent admission procedures and improving Member States' capacity to develop and evaluate their immigration policies.

13.   Mobility partnerships

| 13.1 | The EESC has drawn up a specific opinion (10) expressing the view that mobility and migration agreements should include four pillars: organising and facilitating legal migration and mobility; preventing and reducing irregular migration and trafficking in human beings; promoting international protection and enhancing the external dimension of asylum policy; and maximising the development impact of migration and mobility. |
| --- | --- |

13.1

The EESC has drawn up a specific opinion (10) expressing the view that mobility and migration agreements should include four pillars: organising and facilitating legal migration and mobility; preventing and reducing irregular migration and trafficking in human beings; promoting international protection and enhancing the external dimension of asylum policy; and maximising the development impact of migration and mobility.

14.   Return

| 14.1 | The EESC believes that the use of voluntary return should be prioritised, accompanied by support systems, and it therefore supports the Commission's proposal that national actions should include assisted voluntary return programmes. |
| --- | --- |

14.1

The EESC believes that the use of voluntary return should be prioritised, accompanied by support systems, and it therefore supports the Commission's proposal that national actions should include assisted voluntary return programmes.

| 14.2 | Resources from the fund should be used to provide support systems for voluntary return, with a view to ensuring that return is positive for the people in question and for their countries of origin. |
| --- | --- |

14.2

Resources from the fund should be used to provide support systems for voluntary return, with a view to ensuring that return is positive for the people in question and for their countries of origin.

| 14.3 | In the exceptional event that enforced return procedures are launched, people's human rights should be fully respected, taking account of the Council of Europe's recommendations (11). |
| --- | --- |

14.3

In the exceptional event that enforced return procedures are launched, people's human rights should be fully respected, taking account of the Council of Europe's recommendations (11).

| 14.4 | However, the Committee is not in favour of using European funds to finance enforced returns, some of which are considered by civil society to violate the Charter of Fundamental Rights. |
| --- | --- |

14.4

However, the Committee is not in favour of using European funds to finance enforced returns, some of which are considered by civil society to violate the Charter of Fundamental Rights.

15.   Internal security and borders

| 15.1 | Supporting police cooperation in preventing cross-border crime and in combating organised crime is a priority. The EESC supports measures aimed at improving cooperation amongst security services and the work of Europol. |
| --- | --- |

15.1

Supporting police cooperation in preventing cross-border crime and in combating organised crime is a priority. The EESC supports measures aimed at improving cooperation amongst security services and the work of Europol.

| 15.2 | The EESC agrees with the Commission's proposal to improve police cooperation on the prevention and combating of cross-border crime in the EU, particularly measures aimed at improving cooperation amongst security services in combating organised crime. It is crucial that all priorities focus on enhancing mutual trust amongst security forces, including aspects relating to the rule of law. |
| --- | --- |

15.2

The EESC agrees with the Commission's proposal to improve police cooperation on the prevention and combating of cross-border crime in the EU, particularly measures aimed at improving cooperation amongst security services in combating organised crime. It is crucial that all priorities focus on enhancing mutual trust amongst security forces, including aspects relating to the rule of law.

| 15.3 | The funds should be used to improve and develop the quality and transparency of the common methodologies employed at European level to identify threats and risks to Europe's security, such as the work of Europol and its reports on organised crime (OCTA). |
| --- | --- |

15.3

The funds should be used to improve and develop the quality and transparency of the common methodologies employed at European level to identify threats and risks to Europe's security, such as the work of Europol and its reports on organised crime (OCTA).

| 15.4 | The European Union should strengthen the combating of criminal networks involved in illegal human trafficking, bearing in mind that borders in the Mediterranean and Eastern Europe are particularly vulnerable. |
| --- | --- |

15.4

The European Union should strengthen the combating of criminal networks involved in illegal human trafficking, bearing in mind that borders in the Mediterranean and Eastern Europe are particularly vulnerable.

| 15.5 | The EESC is in favour of the Internal Security Fund supporting Member States in relation to border controls, with a view to making them more efficient, bearing in mind that border control is a public service, but believes that this cooperation, including actions coordinated by Frontex, should be transparent and in line with the Schengen Borders Code and the Charter of Fundamental Rights. |
| --- | --- |

15.5

The EESC is in favour of the Internal Security Fund supporting Member States in relation to border controls, with a view to making them more efficient, bearing in mind that border control is a public service, but believes that this cooperation, including actions coordinated by Frontex, should be transparent and in line with the Schengen Borders Code and the Charter of Fundamental Rights.

| 15.6 | The EESC agrees that Member States should be given support with a view to better applying the Schengen acquis, including the visa system and the implementation of an integrated border management system. It is crucial to guarantee that the common rules on border control are applied consistently by all Member States and that fundamental rights and the free movement of persons are respected. |
| --- | --- |

15.6

The EESC agrees that Member States should be given support with a view to better applying the Schengen acquis, including the visa system and the implementation of an integrated border management system. It is crucial to guarantee that the common rules on border control are applied consistently by all Member States and that fundamental rights and the free movement of persons are respected.

| 15.7 | The EESC believes that the budget allocated to European internal security agencies, in particular Europol, Eurojust, Frontex etc, should be linked to greater democratic scrutiny by the European Parliament of their activities, particularly where there may be the greatest problems in terms of the Charter of Fundamental Rights, such as their operational powers at national level, the exchange and use of personal data, the quality of information exchanged with national and third-country authorities and the objectiveness of their risk analyses. |
| --- | --- |

15.7

The EESC believes that the budget allocated to European internal security agencies, in particular Europol, Eurojust, Frontex etc, should be linked to greater democratic scrutiny by the European Parliament of their activities, particularly where there may be the greatest problems in terms of the Charter of Fundamental Rights, such as their operational powers at national level, the exchange and use of personal data, the quality of information exchanged with national and third-country authorities and the objectiveness of their risk analyses.

| 15.8 | A public debate should be launched with representatives of civil society on added value, budgetary impact and the protection of fundamental rights in relation to EUROSUR (the European border surveillance system). It is crucial that, in the case of such an important political initiative, there is complete transparency and legal security both in its objectives and in its scope. |
| --- | --- |

15.8

A public debate should be launched with representatives of civil society on added value, budgetary impact and the protection of fundamental rights in relation to EUROSUR (the European border surveillance system). It is crucial that, in the case of such an important political initiative, there is complete transparency and legal security both in its objectives and in its scope.

| 15.9 | The EESC calls on the European Parliament to pay particular attention to the proportionality of EUROSUR and its contribution to protecting human rights in border controls and surveillance in the Mediterranean, bearing in mind that border guards' first obligation is to rescue people in danger. |
| --- | --- |

15.9

The EESC calls on the European Parliament to pay particular attention to the proportionality of EUROSUR and its contribution to protecting human rights in border controls and surveillance in the Mediterranean, bearing in mind that border guards' first obligation is to rescue people in danger.

| 15.10 | The Committee recommends that all political proposals be subject to a democratic and transparent debate, in accordance with the principle of proportionality and with fundamental rights, particularly when they have such a great impact on the budget. |
| --- | --- |

15.10

The Committee recommends that all political proposals be subject to a democratic and transparent debate, in accordance with the principle of proportionality and with fundamental rights, particularly when they have such a great impact on the budget.

16.   Large-scale IT systems (VIS, SIS, Eurodac)

| 16.1 | The EESC believes that the European Parliament should carry out an evaluation of the necessity, proportionality and effectiveness of the existing large-scale IT systems (Schengen Information System (SIS), Visa Information System (VIS) and Eurodac), and of the systems which are being implemented (SIS II). |
| --- | --- |

16.1

The EESC believes that the European Parliament should carry out an evaluation of the necessity, proportionality and effectiveness of the existing large-scale IT systems (Schengen Information System (SIS), Visa Information System (VIS) and Eurodac), and of the systems which are being implemented (SIS II).

| 16.2 | This evaluation should be carried out prior to any decision to fund new systems such as those presented by the European Commission in the communication on ‧smart borders‧, in particular the entry/exit system (EES) and the registered traveller programme (RTP), which the Commission intends to present during 2012. |
| --- | --- |

16.2

This evaluation should be carried out prior to any decision to fund new systems such as those presented by the European Commission in the communication on ‧smart borders‧, in particular the entry/exit system (EES) and the registered traveller programme (RTP), which the Commission intends to present during 2012.

| 16.3 | The Committee would stress the responsibility of the new agency for the operational management of IT systems, based in Tallinn, which is very important to the area of freedom, security and justice, since it will coordinate all existing systems and any systems created in the future. The agency should be subject to more democratic scrutiny by the European Parliament, particularly in terms of the compatibility of its actions with data protection, privacy and the purpose limitation principle in the use of information, and regarding the possibility of extending its current competences to the development and coordination of future IT systems. |
| --- | --- |

16.3

The Committee would stress the responsibility of the new agency for the operational management of IT systems, based in Tallinn, which is very important to the area of freedom, security and justice, since it will coordinate all existing systems and any systems created in the future. The agency should be subject to more democratic scrutiny by the European Parliament, particularly in terms of the compatibility of its actions with data protection, privacy and the purpose limitation principle in the use of information, and regarding the possibility of extending its current competences to the development and coordination of future IT systems.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  COM(2011) 751 final.

1

(2)  COM(2011) 750 final; COM(2011) 753 final.

2

(3)  COM(2011) 752 final.

3

(4)  Comments of the Commission’s Proposals for a New EU Funding of Asylum and Migration Actions under the Multiannual Financial Framework, Caritas Europa, CCME, COMECE, Eurodiaconia, ICMC, JRS-Europe, QCEA, available at from http://www.caritas-europa.org/module/FileLib/MFF-Christiangroupstatement_April2012.pdf.

4

Civil Society Statement and Recommendations on the Future EU Funding in the Area of Migration and Asylum 2014-2020, ECRE and 40 other CSOs, March 2012, available at http://www.ecre.org/index.php?option=com_downloads&id=444.

(5)  EESC opinion, OJ C 128, 18.5.2010, p. 29.

5

(6)  UNHCR’s observations on future arrangements for EU Funding in the area of Home Affairs after 2013, June 2011, http://www.unhcr.org/4df752779.pdf.

6

(7)  EESC opinion, OJ C 318, 29.10.2011, p. 69–75.

7

(8)  Report on the Stakeholder Conference “The Future of EU Funding for Home Affairs: A Fresh Look”, European Commission, DG Home Affairs, Brussels, 8 April 2011, http://ec.europa.eu/dgs/home-affairs/event/docs/mff_conference_report_11-5-2011_final_participants.doc.pdf which states as one of the conclusions that “EU funding should not be seen as substituting national funding, i.e. Member States remain responsible for ensuring that sufficient national funding is available to support Home Affairs policies. In order to add value, EU spending should reflect EU level priorities and policy commitments and should support the implementation of EU Home Affairs acquis”.

8

(9)  EESC opinion, OJ C 347, 18.12.2010, p. 19.

9

(10)  EESC opinion on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: the Global Approach to Migration and Mobility, Rapporteur: Luis Miguel Pariza Castaños, Co-rapporteur: Brenda King (OJ C 191, 29.6.2012, p. 134).

10

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: the Global Approach to Migration and Mobility

(11)  Twenty guidelines on forced return COM(2005) 40 final.

11

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/115 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/115

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Opinion of the European Economic and Social Committee on the ‘White paper — An agenda for adequate, safe and sustainable pensions’

COM(2012) 55 final

2012/C 299/21

Rapporteur: Petru Sorin DANDEA

Co-rapporteur: Krzysztof PATER

On 16 February 2012, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

White paper - An agenda for adequate, safe and sustainable pensions

COM(2012) 55 final.

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July 2012), the European Economic and Social Committee adopted the following opinion by 180 votes to 27 with 19 abstentions.

1.   Conclusions and recommendations

1.1   Public pension systems are one of the most important components of the social security safety net in almost all Member States and a fundamental part of the European Social Model, as pensions are the main source of income for pensioners. The Committee regrets that in its White Paper the Commission concentrates more on other aspects of pension systems and does not seek solutions for strengthening public pensions.

1.2   Pension systems do not operate in isolation from national economic systems. The Committee therefore calls on the Member States to ensure that their pension policies tie in closely with their labour-market, social-protection, fiscal and macro-economic policies (as pensions are funded by savings from wages during people's working lives or from fees paid to private pension schemes) and that the social partners and organised civil society are actively involved in the framing process.

1.3   There is no one-size-fits-all solution to the challenge posed by ageing populations to pension systems. The majority of Member States that have reformed their pension systems over the last decade have directed their policies towards cutting expenditure, by raising the statutory retirement age and shifting to a pension-indexation system based on price increases. The Committee has already made clear that raising the statutory retirement age falls short as a response to the ageing of the population, and points out that this approach could pose a social risk in the long run as it may expose many pensioners to the risk of poverty.

1.4   The Committee feels that the Member States should reallocate wealth; they should focus their reform efforts over the next decades on increasing the revenues that fund their pension systems by extending them to all socio-occupational categories, increasing employment, improving the mechanisms for collecting contributions, and tackling undeclared work and tax evasion. The Committee is pleased that the White Paper places much greater emphasis than previous Commission documents on the importance of the labour market and higher employment rates for coping with demographic change and meeting the key pension objectives. It regrets, however, that this acknowledgement of the importance of the labour market is not reflected in the key recommendations on pensions, which have largely been taken unaltered from previous documents.

1.5   The Committee believes that when reforming their domestic pension systems, Member States should take account of the fact that for millions of future pensioners the pension constitutes their only form of protection against the risk of poverty during old age. The Committee thus recommends that standards on minimum pensions or pension income protection mechanisms be included in future legislation to provide income above the poverty threshold.

1.6   By their very nature, pension systems operate over the long term. Member States should thus envisage a sufficiently long timeframe for their pension reform process, tailoring it to their domestic economic and social situation and securing broad public acceptance. The Committee advocates such an approach, bearing in mind that imposing the costs of pension reforms on the current generation of young workers or on current pensioners is unfair. The Committee is in favour of an approach that ensures fairness between generations in terms of the sustainability of the system and an adequate level of benefits, allowing a decent standard of living.

1.7   The Committee urges the Commission and the Member States to focus their efforts on promoting active measures to prolong working life, which has to entail closing the gap between the actual age of retirement and the statutory pension age. This is one of the keys to securing the sustainability of Europe's pension systems. The most important measures to be taken here are to centre on negotiating working conditions between the social partners, e.g. adapting workplaces to the skills and state of health of older workers, taking into account the hardness of certain jobs, improving access to further training, better preventing disabilities, making it easier to balance work and family and removing legal or other barriers to a longer working life. Changing employers’ attitudes to this age group and developing positive attitudes among older employees, allowing them to choose to stay in their jobs for longer, must be part of the reform process. Labour market reforms that create the conditions enabling companies to provide quality jobs are necessary to make longer working lives a reality. All these policies have to be framed and implemented in close cooperation with the social partners. In the Committee's view, early retirement schemes should nevertheless be maintained to ensure that workers who have worked for long periods in arduous or hazardous jobs or who began their career very early, i.e. before the age of 18, continue to have a right to retire early.

1.8   The Committee notes that the Member States have already progressed in their statutory reforms but is at the same time convinced that the legal framework for complementary retirement schemes should be improved, as these will play a role in the future adequacy and sustainability of pension systems. The Committee is therefore seriously concerned about some of the proposals for occupational pensions. As pension schemes are very different from life insurances services, the Committee doesn't support the stated aim of reviewing the IORP Directive, to maintain "a level playing field with Solvency II", but recommends introducing specifically designed measures for securing pension fund assets after previous consultation of the social partners and other stakeholders.

1.9   Pensions aim at ensuring an income for pensioners, which is a replacement income for the salary they obtained during their working life, and which is proportional to it. The Committee believes that in the future it will be necessary to reduce the gap between the pension income of male and female workers and to ensure a proper coverage of the risks of old age among workers who have had an atypical profession or an atypical career. The difference that still exists between men and women on the labour market has serious consequences for the accumulated rights and therefore also for the prospects of retirement income for women. The Committee calls on the Member States to seek solutions to bridge the gap in pension rights between men and women caused by the rules and labour market practice, in cooperation with the social partners.

1.10   The Committee encourages the Commission to follow through on its intention to use part of the ESF during the 2014-2020 programming period to support projects aimed at the employment of older workers or at promoting a longer working life. Also meriting support are educational projects aimed at increasing workers' financial literacy, especially with regard to retirement planning. The Committee believes that the social partners and other civil society organisations, alongside other public bodies, have a key role to play in promoting such projects.

2.   Introduction

2.1   On 16 February (later than planned), the European Commission published its White Paper on An agenda for adequate, safe and sustainable pensions, following consultations launched through its July 2010 Green Paper. Although it has taken on board a series of recommendations made by the European Economic and Social Committee in its opinion on the matter, the Commission has not changed its stance regarding the solutions that Member States should implement to ensure sustainable and safe pension systems against the backdrop of ageing populations, stressing the need to reduce pension expenditure rather than increase revenues to fund them, and recommending that the retirement age be indexed to increasing life expectancy – all proposals that the Committee has repeatedly criticised.

2.2   To support its view on the need for pension reform, the Commission draws on statistics that may paint a misleading picture of the problems posed by population ageing. For instance, the graph set out in Figure 1 of the White Paper compares projected trends in the number of people aged 60+ and the number of people aged 20-59, and shows that the number of people in the first age group is set to increase by two million every year over the next two decades, while the number of people in the second age group will fall by an average of one million per year. By 2020 the statutory pension age in the majority of the Member States will be 65 or over, which means that the population group 60+ will include employees as well as pensioners. In line with its previous recommendations (1), the Committee believes that in assessing the effects of ageing populations on financing social security systems, the economic dependency ratio should be used, as it provides an accurate picture of actual funding requirements. The Commission recognises this in the White Paper. In this sense, the Committee is pleased that the White Paper places much greater emphasis than previous Commission documents on the importance of the labour market and higher employment rates for coping with demographic change and meeting the key pension objectives. It regrets, however, that this acknowledgement of the importance of the labour market is not reflected in the key recommendations on pensions, which have largely been taken unaltered from previous documents.

2.3   The Commission believes that the success of pension reforms in the Member States is a major determining factor for the smooth functioning of economic and monetary union, which will also affect the EU’s ability to achieve two of the Europe 2020 targets – raising the employment rate to 75 % and reducing the number of people at risk of poverty by at least 20 million. However, the Committee has highlighted the fact (2) that many of the austerity measures implemented by Member States coping with the effects of the financial and sovereign debt crises may have negative repercussions on achieving these goals. Any fiscal stability measures must always be complemented with employment-promoting investment and measures leading to growth.

2.4   The Commission wishes to suggest policy guidelines and initiatives to the Member States to address the reform needs identified, inter alia, in the 2011 country-specific recommendations under the European semester. The Committee regrets that these recommendations refer in particular to increasing the statutory retirement age and amending pension-indexation systems. For some Member States, which have concluded standby arrangements with the IMF, World Bank and European Commission, the recommendations have included solutions such as temporary freezing or even reduction of the value of pensions.

3.   General comments

3.1   The current pension challenges

3.1.1   The Committee agrees with the Commission that the sustainability and adequacy of pensions depends on the degree to which they are underpinned by contributions, taxes and savings. However, these do not derive solely from people in employment, but also from pensioners themselves. In other words, any long-term projection with regard to the balance between active taxpayers and retired beneficiaries must take account of this.

3.1.2   Public pension systems are the main source of income for pensioners in almost all Member States. Therefore, it is imperative to make every effort to ensure that they remain sustainable and affordable. The Committee considers that the financing of public systems can be best assured by a high employment rate and additional funding measures, such as those taken in some Member States (for example: budgetary subsidies, additional revenues, reserve and stability funds). These pension systems are based on the principle of solidarity and create solidarity between and within generations, which is beneficial to social cohesion. Furthermore, in some Member States, they allow pension rights to be built up during periods of unemployment or career breaks due to illness or for family reasons. These systems proved their role as financial stabilisers during the financial crisis of 2008, even if in some Member States individuals’ pensions were adversely affected. Conversely, some private funded pension schemes which invested part of their asset portfolio in some very risky financial products have faced heavy losses which resulted in a sharp reduction in pensions for many pensioners. Decision-makers have to consider the impact of cuts on global demand in light of the fact that social benefits are not simply “expenses” as they provide means for action and consumption for one third of Europe's population.

3.2   Securing the financial sustainability of pension systems

3.2.1   The Commission states that pensions could increase by an EU-wide average of 2,5 percentage points of GDP by 2060. As stated in its previous opinions, the Committee suggests that the Member States exercise caution when using these figures to promote pension reforms, as many of them are based on long-term assumptions, which in some cases are not borne out by reality. However, there is currently a difference of 9 percentage points of GDP in Member State pension expenditure, ranging from 6 % in Ireland, to 15 % in Italy. This shows that there may be some flexibility in the composition of public expenditure without this significantly affecting the competitiveness of Member States that, from a cyclical perspective, may have a higher outlay on social security systems.

3.2.2   Pension system reform undertaken by the Member States over the last decade has focused primarily on cutting expenditure, by raising the statutory retirement age and changing pension indexation systems in a dominant or sole price index. The Committee considers that this last change may have long-term adverse effects, with pensions being sharply eroded. According to an ILO study (3), a difference of only 1 percentage point between salary increases and pension increases over a period of 25 years may result in pensions reduced by 22 %.

3.2.3   National pension systems do not operate in isolation from national economies. They are effectively subsystems interacting with others at national and global levels. The Committee therefore considers that to secure the financial sustainability of pension systems, the Member States should focus their efforts over the next decades on increasing revenues. This increase cannot be achieved solely by increasing the number of employed contributors, and prolonging working life, but also requires better management of public finances, and efforts to combat tax evasion and undeclared work. Sustainable growth and a high level of employment would create an environment conducive to pension systems. Labour market reforms that create the conditions enabling companies to provide quality jobs are necessary to make longer working lives a reality. Also, decent working conditions that help reconcile work and family responsibilities can help increase fertility rates, thus relieving some of the ageing-population pressure on pension systems. At the same time, measures also need to be put in place to increase individuals' willingness to work for longer, which also requires a positive attitude to lifelong learning and preventive healthcare.

3.2.4   In line with its previous opinion, the EESC points out that pension reforms (including the shift from fully Pay-As-You-Go to mixed pension systems, composed of mandatory Pay-As-You-Go and funded schemes) leading to changes in the financing of pension systems, which increase explicit public-sector liabilities and reduce implicit ones, should not be penalised in the short term due to the higher explicit public debt (4). Therefore, consideration should be given to revising the Stability and Growth Pact rules.

3.3   Maintaining the adequacy of pension benefits

3.3.1   The Commission acknowledges that in most Member States the pension reforms carried out will result in lower pension-system replacement rates. As pensions are the main source of income for older Europeans, the Committee believes that maintaining the adequacy of pensions allowing a decent standard of living should be a priority for the Member States.

3.3.2   Governments are responsible for ensuring that every older European has an adequate pension. The Committee therefore considers that establishing a comprehensive definition of an adequate pension should be taken into account by the Member States, in cooperation with the social partners.

3.3.3   For future generations of pensioners, the adequacy of their income will increasingly depend on additional funded pension pillars. The Committee points out, however, that some of the Member States that promoted mandatory funded pension schemes, funded by transferring a portion of contributions from the public pension system, have chosen to discontinue these schemes, mainly due to the deficit they created in the public system budget. The Committee is in favour of occupational funded pension schemes, established and administered by employers and employee representatives, and calls on the Commission to provide support to the social partners to bolster their administrative capacity in this area.

3.3.4   In light of the gradual move towards additionally funded pension schemes, in particular schemes connected to labour market participation, it is of significant importance that Member States ensure adequate pensions for people who are outside the labour market throughout their adult life. Thus, people who are excluded from the mainstream labour market due to e.g. severe disabilities or severe and complex social problems must be guaranteed sufficient pensions in order to avoid even wider social inequalities at older age.

3.4   Raising the labour market participation of women and older workers

3.4.1   The Commission points out that if Europe achieves the Europe 2020 employment goal of a 75 % employment rate in the 20-64 age group and further progress is made in the following decades, the economic dependency ratio could remain below 80 %. This means that the pressure of ageing populations on pension systems could remain bearable.

3.4.2   The Committee disagrees with the Commission's view that a fixed retirement age would create considerable imbalances between active years and years in retirement. Through their pension reforms in recent years, most Member States have linked the right to early retirement with the number of years spent in work, significantly reducing the number of privileged employees. In the Committee's view, early retirement schemes should be maintained to ensure that workers who have worked for long periods in arduous or hazardous jobs or who began their career very early, before the age of 18, have a right to retire early.

3.4.3   The Committee has set out its views in a number of opinions (5) on key factors to be considered by the Member States when implementing reforms aimed at a longer working life, and commends the Commission for taking a number of them on board in the White Paper. However, the Committee feels that much remains to be done at Member State level to ensure that workplaces are properly adapted to the skills and state of health of older workers.

3.5   The role for Member States and the EU in pensions

3.5.1   The Committee welcomes the Commission's decision to take a holistic approach to pension reform, given the interrelated character of the macroeconomic, social and employment challenges related to pensions. Although Member States have the primary responsibility for designing their pension systems, the Commission should make creative use of the tools it has available to firmly support the Member States through the pension reform process; but, as we generally avoid moving backwards, this should be done without affecting rights or creating new rules inspired by the current recession, which could be detrimental to people's interests once the economy has recovered. Under the Europe 2020 strategy and the new European governance framework, the Commission has sufficiently broad scope to promote pension reform solutions, taking into account the fact that pensions are not savings. The Committee also encourages the Commission to pursue its intention to use part of the ESF during the 2014-2020 programming period to support projects aimed at employing older workers or at promoting longer working lives. Involving the social partners and organised civil society in the implementation of such projects must be a prerequisite.

3.5.2   Given that employment and labour productivity growth should be the key areas of concern for Member States, faced with the effects of an ageing population on their pension systems, the Committee recommends that all policies that governments intend to implement be underpinned by the prior consent of the social partners.

3.6   The need for pension reforms

3.6.1   With regard to the pension reform recommendations made by the Commission to the Member States under the 2011 and 2012 Annual Growth Surveys, the Committee considers that:

| a. | raising the effective retirement age needs to be brought about by policies negotiated with the social partners to encourage a longer working life and not by automatic mechanisms increasing the statutory retirement age, as recommended by the Commission; |
| --- | --- |

a.

raising the effective retirement age needs to be brought about by policies negotiated with the social partners to encourage a longer working life and not by automatic mechanisms increasing the statutory retirement age, as recommended by the Commission;

| b. | restricting access to early retirement should take account of the specific situation of certain categories of workers, especially those whose work was particularly arduous or hazardous and those who began their career very early (before the age of18); |
| --- | --- |

b.

restricting access to early retirement should take account of the specific situation of certain categories of workers, especially those whose work was particularly arduous or hazardous and those who began their career very early (before the age of18);

| c. | prolonging working lives through better access to training programmes, adapting workplaces to a more diverse workforce, developing employment opportunities for older workers, supporting active and healthy ageing, and removing legal or other barriers impeding access to employment for older workers, constitutes the best approach to raising the effective retirement age; |
| --- | --- |

c.

prolonging working lives through better access to training programmes, adapting workplaces to a more diverse workforce, developing employment opportunities for older workers, supporting active and healthy ageing, and removing legal or other barriers impeding access to employment for older workers, constitutes the best approach to raising the effective retirement age;

| d. | equalising the statutory retirement age for men and women should be done within a timeframe that takes account of the specific labour market situation of each Member State; specific attention should be given to bridging the gap between men's and women's pension rights; |
| --- | --- |

d.

equalising the statutory retirement age for men and women should be done within a timeframe that takes account of the specific labour market situation of each Member State; specific attention should be given to bridging the gap between men's and women's pension rights;

| e. | encouraging the development of complementary retirement savings should be achieved with the involvement of the social partners, particularly in the form of occupational pension schemes, as during the financial crisis they proved to be more secure than other types of funded schemes, as well as in the form of private savings with targeted tax incentives, especially for those who cannot afford such services. |
| --- | --- |

e.

encouraging the development of complementary retirement savings should be achieved with the involvement of the social partners, particularly in the form of occupational pension schemes, as during the financial crisis they proved to be more secure than other types of funded schemes, as well as in the form of private savings with targeted tax incentives, especially for those who cannot afford such services.

3.7   Balancing time spent in work and retirement

3.7.1   The Committee believes that Member States can support an increase in the effective retirement age, which means an increased period in work, through active measures to encourage a longer working life on a voluntary basis. Automatic increasing of the statutory retirement age on the basis of projected increases in life expectancy could prove counterproductive, with many older workers, especially those with health problems, opting to turn to other social security pillars (6).

3.7.2   The Committee agrees with the Commission that pension reform should not be done in such a way that the costs are borne by generations of younger workers or only by current pensioners. It is possible for Member States to implement reform measures that do not affect workers' interests or those of pensioners.

3.7.3   The Committee recommends to Member States that measures to restrict access to early retirement be implemented with due regard for the interests of workers who have worked for long periods in arduous or hazardous jobs or who have begun their career very early (before the age of 18). For many workers in these categories, restricting their access to early retirement may effectively mean removing their pension rights. The Commission recognises that workers in these groups have a lower life expectancy and poorer state of health compared to other workers. Such arrangements have to remain in the hands of the Member States according to their national practices and conditions, and based on the agreements with the social partners.

3.7.4   The Committee acknowledges the Commission's position on the need for reform processes undertaken by Member States to concentrate on promoting a longer working life. Simply raising the statutory retirement age or cutting pensions by changing the indexation system could push millions of pensioners below the poverty line.

3.7.5   According to a Eurostat report (7) over 35 % of workers aged 50-69 would be prepared to work beyond the age of 65. The Committee acknowledges the Commission's view that removing barriers to a longer working life is, among others, one solution for the Member States.

3.7.6   The Commission acknowledges that closing the pensions gap between men and women cannot be achieved by merely equalising the retirement age, and recommends that Member States deploy a mix of pension and employment policies to eradicate these disparities. As part of the review of EU pensions legislation, the Committee calls on the Commission to consider introducing provisions aimed at closing the gender gap.

3.8   Developing complementary private retirement savings

3.8.1   The Committee welcomes the Commission's decision to enhance EU pensions legislation. However, the Committee believes that consideration should be given here not only to aspects related to pension funds' cross-border activities and worker mobility but also to the issues of pension body supervision and oversight, administrative costs and consumer information and protection.

3.8.2   The Committee endorses the Commission's proposal to establish an EU system of pension tracking services, by interconnecting national-level services. This would be of real benefit to people who have worked in several Member States.

3.8.3   The White Paper does not take the right approach to supporting the cost-effective provision of occupational pensions and therefore their future growth. In particular, the Committee doesn't support the stated aim of reviewing the IORP Directive "to maintain a level playing field with Solvency II". Such measures are not justified by a need to create a level playing field with insurance provided pension funds, as they operate in different ways. In most cases, pension funds do not operate in retail markets and/or are non-for-profit organisations. They are generally provided through an employer or group of employers in a sector, whereas insurance pension products can also be provided to individuals. Pension funds have a collective character (subject to a collective agreement). However, the Committee supports the Commission's commitment to introducing specifically designed measures for securing pension fund assets.

3.8.4   Alongside public pension systems, additional collective complementary systems have also been developed. Since the latter provide an additional income to pensioners, they should be generalised to all workers. However, they should not be an alternative to the payment of public pensions and, as they are based on collective agreements, should certainly not compromise them. All employees within a sector or company should have access to these additional systems, which also treat men and women equally. In addition, it is important that the social partners be involved in implementing and monitoring the management of these systems. Alongside the complementary pension systems, which usually operate as investment funds, social partners should also work on finding solutions to cover some other risks which often cut future pension income (such as risks over the lifetime, during periods of illness or even of unemployment or absence from work for family reasons) in order to secure adequate level of future pensions.

3.9   Deployment of EU instruments

3.9.1   The Committee urges the Commission to make use of all available legal, financial and coordination instruments to support Member States' efforts to secure adequate and safe pension systems. Also, to ensure that the objectives here are achieved, it is vital to involve civil society organisations and the social partners at all stages of the consultation, framing and implementation of pension reform policies. At the same time, when any EU regulation not directly linked to the pension systems is proposed, it is important to include an assessment of its impact on the pension systems (especially their stability and the levels of future pensions).

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  OJ C 318, 29.10.2011, p. 1–8.

1

(2)  OJ C 143, 22.05.2012, p. 23-28.

2

(3)  ILO: Pension Reform in Central and Eastern Europe, 2011, p. 16, ISBN 978-92-125640-3 (web pdf).

3

Pension Reform in Central and Eastern Europe

(4)  This situation prevails in some of the Member States which have developed supplementary pension schemes, funding them with part of the public pension funds.

4

(5)  OJ C 318, 29.10.2011, p. 1–8, OJ C 161, 13.7.2007, p. 1–8, OJ C 44, 11.2.2011, p. 10–16.

5

(6)  OJ C 84, 17.3.2011, p. 38–44.

6

(7)  Active ageing and solidarity between generations – a statistical portrait of the European Union 2012, p. 57.

7

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APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendments, which received at least a quarter of the votes cast, were rejected in the course of the debate (Rule 54(3) of the Rules of Procedure):

Point 3.6.1, b.

Amend as follows:

| b. | restricting access to early retirement should take account of the specific situation of certain categories of workers, especially those whose work was particularly arduous or hazardous ; |
| --- | --- |

b.

restricting access to early retirement should take account of the specific situation of certain categories of workers, especially those whose work was particularly arduous or hazardous ;

Voting

| For | : | 88 |
| --- | --- | --- |
| Against | : | 124 |
| Abstentions | : | 14 |

For

:

88

Against

:

124

Abstentions

:

14

Point 3.7.1

Amend as follows:

The Committee believes that Member States can through active measures encourage a working life on a voluntary basis. Automatic increasing of the statutory retirement age on the basis of projected increases in life expectancy could prove counterproductive, with many older workers, especially those with health problems, opting to turn to other social security pillars6.

Voting

| For | : | 80 |
| --- | --- | --- |
| Against | : | 135 |
| Abstentions | : | 10 |

For

:

80

Against

:

135

Abstentions

:

10

Point 3.7.3

Amend as follows:

Voting

| For | : | 88 |
| --- | --- | --- |
| Against | : | 124 |
| Abstentions | : | 14 |

For

:

88

Against

:

124

Abstentions

:

14

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/122 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/122

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Council Regulation establishing for the period 2014-2020 the programme “Europe for Citizens” ’

COM(2011) 884 final — 2011/0436 (APP)

2012/C 299/22

Rapporteur: Mr GOBIŅŠ

On 19 March 2012 the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Proposal for a Council Regulation establishing for the period 2014-2020 the programme "Europe for Citizens"

COM(2011) 884 final — 2011/0436 (APP).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 27 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 140 votes to 1 with 5 abstentions.

1.   Conclusions and recommendations

| 1.1 | The European Economic and Social Committee (EESC) strongly supports pressing ahead with the Europe for Citizens programme and its key elements of encouraging and facilitating the active participation of citizens in political and public life and mutual solidarity and cooperation based on shared values and a European identity. |
| --- | --- |

1.1

The European Economic and Social Committee (EESC) strongly supports pressing ahead with the Europe for Citizens programme and its key elements of encouraging and facilitating the active participation of citizens in political and public life and mutual solidarity and cooperation based on shared values and a European identity.

| 1.2 | Active citizenship includes involving individual citizens, citizens' groups and civil society organisations, particularly the social partners, in drawing up policy (vertical dialogue between civil society and public administrations) and ensuring networking and cooperation between them (horizontal dialogue). The EESC welcomes the fact that the proposal under consideration envisages support for both aspects, although the arrangements for horizontal dialogue need to be further clarified. |
| --- | --- |

1.2

Active citizenship includes involving individual citizens, citizens' groups and civil society organisations, particularly the social partners, in drawing up policy (vertical dialogue between civil society and public administrations) and ensuring networking and cooperation between them (horizontal dialogue). The EESC welcomes the fact that the proposal under consideration envisages support for both aspects, although the arrangements for horizontal dialogue need to be further clarified.

| 1.3 | The EESC broadly endorses the European Commission's proposal, but calls for the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the partners in the structured dialogue to be more involved in framing, monitoring and evaluating the programme. The present opinion sets out recommendations and specific changes that will allow the programme to be improved by bringing it still closer to citizens and better meeting their needs. |
| --- | --- |

1.3

The EESC broadly endorses the European Commission's proposal, but calls for the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the partners in the structured dialogue to be more involved in framing, monitoring and evaluating the programme. The present opinion sets out recommendations and specific changes that will allow the programme to be improved by bringing it still closer to citizens and better meeting their needs.

| 1.4 | As also acknowledged by the European Commission, the institutions of the European Union are currently experiencing a grave problem of legitimacy. The public's low level of confidence, apathy and the lack of involvement in the decision-making process are fundamentally detrimental to the spirit of the EU and impair the quality of decisions and the Union's long-term development (1). This affects public administration at all levels: local, national, transnational and European. The financial framework proposed for the programme for carrying out the necessary work is insufficient, and everything possible should therefore be done to increase this funding. |
| --- | --- |

1.4

As also acknowledged by the European Commission, the institutions of the European Union are currently experiencing a grave problem of legitimacy. The public's low level of confidence, apathy and the lack of involvement in the decision-making process are fundamentally detrimental to the spirit of the EU and impair the quality of decisions and the Union's long-term development (1). This affects public administration at all levels: local, national, transnational and European. The financial framework proposed for the programme for carrying out the necessary work is insufficient, and everything possible should therefore be done to increase this funding.

| 1.5 | The Europe for Citizens programme must comply with the democratic norms set out in the Lisbon Treaty and support them in becoming more firmly anchored in Europe, especially where the mechanisms for participation and transparency provided for in Articles 10 and 11 of the Treaty on European Union (TEU) are concerned. However, it will only be possible for the programme to be fully operational if the EU institutions shoulder their obligations to implement these articles, in particular by drafting green papers. Similarly, the programme must not in any way divest the European Commission's various directorates-general of their responsibility, using their own financial and other resources, to provide greater support than so far, in their areas of responsibility, for public participation, dialogue and partnerships. |
| --- | --- |

1.5

The Europe for Citizens programme must comply with the democratic norms set out in the Lisbon Treaty and support them in becoming more firmly anchored in Europe, especially where the mechanisms for participation and transparency provided for in Articles 10 and 11 of the Treaty on European Union (TEU) are concerned. However, it will only be possible for the programme to be fully operational if the EU institutions shoulder their obligations to implement these articles, in particular by drafting green papers. Similarly, the programme must not in any way divest the European Commission's various directorates-general of their responsibility, using their own financial and other resources, to provide greater support than so far, in their areas of responsibility, for public participation, dialogue and partnerships.

| 1.6 | The EESC is also aware of the fears expressed by many civil society organisations that the annual work programmes may weaken the programme's focus on long-term issues or even obscure them completely, and/or remove the possibility for citizens to decide their own priorities. The Committee shares these concerns. |
| --- | --- |

1.6

The EESC is also aware of the fears expressed by many civil society organisations that the annual work programmes may weaken the programme's focus on long-term issues or even obscure them completely, and/or remove the possibility for citizens to decide their own priorities. The Committee shares these concerns.

| 1.7 | The programme's strand on remembrance should promote a common identity and values. The EESC welcomes the additional provisions proposed in the programme, which also cover commemoration of the victims of Nazism and of the totalitarian Communist regime, including after 1953, and the importance of the role played by society in reuniting a Europe that was so long divided. |
| --- | --- |

1.7

The programme's strand on remembrance should promote a common identity and values. The EESC welcomes the additional provisions proposed in the programme, which also cover commemoration of the victims of Nazism and of the totalitarian Communist regime, including after 1953, and the importance of the role played by society in reuniting a Europe that was so long divided.

| 1.8 | The EESC emphasises the need to support civic participation that is sustainable, substantial and as structured as possible at all levels, and at every stage of the decision-making process.
  In addition to the suggestions mentioned above, it therefore makes the following proposals:






  — | Priority should be given to grants to support structural change, participation and the use of institutional memory, and care must be taken to ensure that there is no interruption in the programme between the current and following budget periods. If necessary, a transitional period should be introduced to guarantee that objectives are met during this interval. |
| --- | --- | --- |

1.8

The EESC emphasises the need to support civic participation that is sustainable, substantial and as structured as possible at all levels, and at every stage of the decision-making process.

In addition to the suggestions mentioned above, it therefore makes the following proposals:

—

Priority should be given to grants to support structural change, participation and the use of institutional memory, and care must be taken to ensure that there is no interruption in the programme between the current and following budget periods. If necessary, a transitional period should be introduced to guarantee that objectives are met during this interval.

| — | The programme's main selection criteria must be based on the European dimension and public involvement in EU-related issues, and not on implementation at European level. There should also be an option to allocate grants for national-level participation in the EU decision-making process. |
| --- | --- |

—

The programme's main selection criteria must be based on the European dimension and public involvement in EU-related issues, and not on implementation at European level. There should also be an option to allocate grants for national-level participation in the EU decision-making process.

| — | Representatives of the EESC, the Committee of the Regions and the partners in the structured dialogue should also be involved in the programme's steering group, and project management should be simplified, especially the evaluation arrangements, while retaining the necessary control. |
| --- | --- |

—

Representatives of the EESC, the Committee of the Regions and the partners in the structured dialogue should also be involved in the programme's steering group, and project management should be simplified, especially the evaluation arrangements, while retaining the necessary control.

| — | Voluntary work should be recognised as co-financing. Special support or a separate category should be provided for small-scale projects in Member States where conditions are particularly unfavourable in areas relevant to the civil society involvement objective of the programme, or in which participation is low. |
| --- | --- |

—

Voluntary work should be recognised as co-financing. Special support or a separate category should be provided for small-scale projects in Member States where conditions are particularly unfavourable in areas relevant to the civil society involvement objective of the programme, or in which participation is low.

| — | Where the applicant proposing a project is a public administration, an agency or any other body which is mainly funded by taxes, levies or similar payments, partnership with at least one civil society organisation should be compulsory. East-West cooperation in particular should be encouraged, in the form of either town-twinning or other projects. |
| --- | --- |

—

Where the applicant proposing a project is a public administration, an agency or any other body which is mainly funded by taxes, levies or similar payments, partnership with at least one civil society organisation should be compulsory. East-West cooperation in particular should be encouraged, in the form of either town-twinning or other projects.

2.   General comments – content of the programme

| 2.1 | The Europe for Citizens programme must give practical effect to the democratic norms set out in the Lisbon Treaty, and particularly Articles 10 and 11 TEU. The European Citizens' Initiative is only one possibility for participation provided for in the Treaty: others should follow rapidly. This programme will also bear fruit if the EU responds better to the policy requirements set out in detail in other EESC opinions including, crucially, the preparation of green papers on civic participation. |
| --- | --- |

2.1

The Europe for Citizens programme must give practical effect to the democratic norms set out in the Lisbon Treaty, and particularly Articles 10 and 11 TEU. The European Citizens' Initiative is only one possibility for participation provided for in the Treaty: others should follow rapidly. This programme will also bear fruit if the EU responds better to the policy requirements set out in detail in other EESC opinions including, crucially, the preparation of green papers on civic participation.

| 2.2 | The sole legal basis for the proposal that is explicitly cited at present is Article 352 of the Treaty on the Functioning of the European Union (TFEU) (2). The EESC calls for the treaty articles laying down the objectives that are to be met by the programme to be spelled out. Articles 10 and 11 TEU and Article 15 TFEU (3) should be specifically highlighted. Article 39 of the Charter of Fundamental Rights, which concerns the right to vote and to stand as a candidate at elections to the European Parliament, is indeed mentioned in the explanatory memorandum, but there is no reference to other relevant Charter articles such as Article 11 (freedom of expression and information), Article 12 (freedom of assembly and of association), Article 41 (right to good administration) or Articles 20 to 26 which, inter alia, establish equal rights for persons and different groups in society and the protection of these rights (4). It should be stated, however, that the programme cannot be the sole or main instrument for achieving the aims referred to above. |
| --- | --- |

2.2

The sole legal basis for the proposal that is explicitly cited at present is Article 352 of the Treaty on the Functioning of the European Union (TFEU) (2). The EESC calls for the treaty articles laying down the objectives that are to be met by the programme to be spelled out. Articles 10 and 11 TEU and Article 15 TFEU (3) should be specifically highlighted. Article 39 of the Charter of Fundamental Rights, which concerns the right to vote and to stand as a candidate at elections to the European Parliament, is indeed mentioned in the explanatory memorandum, but there is no reference to other relevant Charter articles such as Article 11 (freedom of expression and information), Article 12 (freedom of assembly and of association), Article 41 (right to good administration) or Articles 20 to 26 which, inter alia, establish equal rights for persons and different groups in society and the protection of these rights (4). It should be stated, however, that the programme cannot be the sole or main instrument for achieving the aims referred to above.

| 2.3 | The EESC emphasises that participation and active citizenship represent a universal and indivisible value, and that all levels of public administration (local, national and European) are interconnected. Many EU-related decisions have repercussions at the local and national levels. These are also the levels that promote EU decisions and help to prepare them. The programme must reflect this state of affairs, and the resources needed for this purpose must be found. The European dimension must remain the priority, regardless of the level at which the project-promoter operates (national or European). Projects of this kind should also be possible without transnational partners. Support should furthermore be given, in the form of increased funding, to locally-operating promoters of projects involving participation in EU decision-making. |
| --- | --- |

2.3

The EESC emphasises that participation and active citizenship represent a universal and indivisible value, and that all levels of public administration (local, national and European) are interconnected. Many EU-related decisions have repercussions at the local and national levels. These are also the levels that promote EU decisions and help to prepare them. The programme must reflect this state of affairs, and the resources needed for this purpose must be found. The European dimension must remain the priority, regardless of the level at which the project-promoter operates (national or European). Projects of this kind should also be possible without transnational partners. Support should furthermore be given, in the form of increased funding, to locally-operating promoters of projects involving participation in EU decision-making.

| 2.4 | The Committee notes that the work done by civil society organisations is of particular importance, especially at a time of crisis, and that the crisis, together with the lack of available resources, has often seriously affected this work. The long-term administrative grants planned in the programme therefore have an especially important part to play, as does support for the structured dialogue and for watchdog bodies, as well as involvement in addressing current EU issues. The programme should, among other things, support the measures carried out, the knowledge gained and the results achieved in the 2011 to 2013 European thematic years, in addition to the recommendations of civil society, inter alia those made by the social partners. |
| --- | --- |

2.4

The Committee notes that the work done by civil society organisations is of particular importance, especially at a time of crisis, and that the crisis, together with the lack of available resources, has often seriously affected this work. The long-term administrative grants planned in the programme therefore have an especially important part to play, as does support for the structured dialogue and for watchdog bodies, as well as involvement in addressing current EU issues. The programme should, among other things, support the measures carried out, the knowledge gained and the results achieved in the 2011 to 2013 European thematic years, in addition to the recommendations of civil society, inter alia those made by the social partners.

| 2.5 | Active citizenship and civic participation are logically linked to activities that foster exchanges of information and ideas as well as reflection on a common identity, values and history. The EESC welcomes proposed expansion within the programme of the strand on remembrance to cover commemoration of the victims of Nazism and of the totalitarian Communist regime, including after 1953. Support should also be given to a public debate promoting a deeper understanding of – and drawing lessons from – the history of Europe, highlighting the importance of society in reuniting a Europe that was so long divided. Special attention should be given to young people's historical awareness, which represents the cornerstone of the EU's shared future, freedom and prosperity. |
| --- | --- |

2.5

Active citizenship and civic participation are logically linked to activities that foster exchanges of information and ideas as well as reflection on a common identity, values and history. The EESC welcomes proposed expansion within the programme of the strand on remembrance to cover commemoration of the victims of Nazism and of the totalitarian Communist regime, including after 1953. Support should also be given to a public debate promoting a deeper understanding of – and drawing lessons from – the history of Europe, highlighting the importance of society in reuniting a Europe that was so long divided. Special attention should be given to young people's historical awareness, which represents the cornerstone of the EU's shared future, freedom and prosperity.

| 2.6 | The EESC stresses the need for the broader involvement of citizens rather than only officials from institutions, in projects and activities developed under the Europe for Citizens programme, especially town-twinning. Where the applicant proposing a project is a public administration, an agency or any other body which is mainly funded by taxes, levies or similar payments, partnership with at least one civil society organisation should be compulsory. Special support should be allocated to developing new partnerships, such as the East-West Partnership. |
| --- | --- |

2.6

The EESC stresses the need for the broader involvement of citizens rather than only officials from institutions, in projects and activities developed under the Europe for Citizens programme, especially town-twinning. Where the applicant proposing a project is a public administration, an agency or any other body which is mainly funded by taxes, levies or similar payments, partnership with at least one civil society organisation should be compulsory. Special support should be allocated to developing new partnerships, such as the East-West Partnership.

3.   Specific comments

Coordinating Europe for Citizens with other programmes

| 3.1 | The EESC welcomes the changes made to the initial proposal, providing for improved cooperation and coordination between Europe for Citizens and other EU programmes, relating in particular to neighbourhood policy. Under Article 11 of the proposal, and with a view to achieving the 2020 objectives, there is also a need for better coordination with INTERREG, and programmes focusing on media and youth. |
| --- | --- |

3.1

The EESC welcomes the changes made to the initial proposal, providing for improved cooperation and coordination between Europe for Citizens and other EU programmes, relating in particular to neighbourhood policy. Under Article 11 of the proposal, and with a view to achieving the 2020 objectives, there is also a need for better coordination with INTERREG, and programmes focusing on media and youth.

| 3.2 | The EESC advocates working without delay in order to provide coordinated information on Europe for Citizens and other EU programmes, so that every citizen can discover all the opportunities available to him or her, on a single site. It emerged from a public consultation (5) carried out by the Commission that people are not always aware of which programmes generally support which type of activity. There should be a special focus on young people. |
| --- | --- |

3.2

The EESC advocates working without delay in order to provide coordinated information on Europe for Citizens and other EU programmes, so that every citizen can discover all the opportunities available to him or her, on a single site. It emerged from a public consultation (5) carried out by the Commission that people are not always aware of which programmes generally support which type of activity. There should be a special focus on young people.

| 3.3 | As it has done in a previous opinion, the Committee calls for meaningful improvement of coordination by, for example, establishing a permanent inter-institutional unit for active citizenship and participation issues, bringing together representatives of the European Commission's different directorates-general and of the other EU institutions (6). |
| --- | --- |

3.3

As it has done in a previous opinion, the Committee calls for meaningful improvement of coordination by, for example, establishing a permanent inter-institutional unit for active citizenship and participation issues, bringing together representatives of the European Commission's different directorates-general and of the other EU institutions (6).

Financial aspects

| 3.4 | The programme's funding is entirely insufficient. The Committee is aware that given the current crisis, increasing the budget of the Europe for Citizens programme would be a financial and political challenge. It stresses, however, that the programme is vitally important and suggests that its funding should, in principle, be increased several times over. The funding is not currently sufficient to achieve tangible results at the European level (7), and fails even to meet the expectations of potential project-promoters. The present level of funding raises issues regarding the importance given to public involvement in decision-making and of decision-makers' ability to honour their commitments to implement the Lisbon Treaty. |
| --- | --- |

3.4

The programme's funding is entirely insufficient. The Committee is aware that given the current crisis, increasing the budget of the Europe for Citizens programme would be a financial and political challenge. It stresses, however, that the programme is vitally important and suggests that its funding should, in principle, be increased several times over. The funding is not currently sufficient to achieve tangible results at the European level (7), and fails even to meet the expectations of potential project-promoters. The present level of funding raises issues regarding the importance given to public involvement in decision-making and of decision-makers' ability to honour their commitments to implement the Lisbon Treaty.

| 3.5 | The Committee calls for reflection on how to allocate additional resources to Europe for Citizens, especially resources not used during the programming period under other programmes. |
| --- | --- |

3.5

The Committee calls for reflection on how to allocate additional resources to Europe for Citizens, especially resources not used during the programming period under other programmes.

| 3.6 | In order to ensure broad and inclusive participation in the programme and not to discriminate against organisations that are small or have few financial resources, and in order to enhance the effectiveness and visibility of the programme within Europe, the EESC considers that small-scale projects that have a European dimension should also be supported. With regard to the current programme, where civil society projects in particular are concerned, the threshold for their budgets and volume of co-financing should be lowered, pre-financing stepped up, the requirement to cooperate with a foreign partner removed, and the administrative burden reduced, while retaining the necessary control where needed. In the programme's next period, citizens' and civil society organisations must be able to submit applications for small-scale grants, so that they no longer have themselves to invest several tens of thousands of euros in co-financing. The average amount allocated per project at present, which is EUR 80 000, is giving rise to concern. When planning the programme, other aspects under which the programme's provisions could discriminate against certain project promoters or target groups, should be carefully assessed and eliminated. |
| --- | --- |

3.6

In order to ensure broad and inclusive participation in the programme and not to discriminate against organisations that are small or have few financial resources, and in order to enhance the effectiveness and visibility of the programme within Europe, the EESC considers that small-scale projects that have a European dimension should also be supported. With regard to the current programme, where civil society projects in particular are concerned, the threshold for their budgets and volume of co-financing should be lowered, pre-financing stepped up, the requirement to cooperate with a foreign partner removed, and the administrative burden reduced, while retaining the necessary control where needed. In the programme's next period, citizens' and civil society organisations must be able to submit applications for small-scale grants, so that they no longer have themselves to invest several tens of thousands of euros in co-financing. The average amount allocated per project at present, which is EUR 80 000, is giving rise to concern. When planning the programme, other aspects under which the programme's provisions could discriminate against certain project promoters or target groups, should be carefully assessed and eliminated.

| 3.7 | The EESC calls on the European Commission to consider how to give specific support to, or create a separate category for small-scale projects in those Member States where the work of civil society organisations in areas relevant to the programme's objective is especially disadvantaged or where participation is low. |
| --- | --- |

3.7

The EESC calls on the European Commission to consider how to give specific support to, or create a separate category for small-scale projects in those Member States where the work of civil society organisations in areas relevant to the programme's objective is especially disadvantaged or where participation is low.

| 3.8 | Ways must be found in the new programming period for voluntary work to be counted as eligible in terms of co-financing (8). |
| --- | --- |

3.8

Ways must be found in the new programming period for voluntary work to be counted as eligible in terms of co-financing (8).

| 3.9 | Strengthening civic action and values among the new generation of Europeans represents a crucial challenge and duty for the future of the EU. The EESC proposes that the European Commission examine the possibility of including more youth projects that are not conducted under the Erasmus for All programme within Europe for Citizens, particularly projects developed under the Youth Initiatives. Projects aimed at promoting corporate social responsibility could form another thematic strand. |
| --- | --- |

3.9

Strengthening civic action and values among the new generation of Europeans represents a crucial challenge and duty for the future of the EU. The EESC proposes that the European Commission examine the possibility of including more youth projects that are not conducted under the Erasmus for All programme within Europe for Citizens, particularly projects developed under the Youth Initiatives. Projects aimed at promoting corporate social responsibility could form another thematic strand.

Management and administration of the programme

| 3.10 | Programme administration should be decentralised, especially for the small-scale projects mentioned in point 3.6. The Commission has already undertaken to involve the Commission Representations in the Member States to the greatest extent possible in popularising the programme (9), but options should also be explored for broadening the use of the Representations or other national-level structures, including for the management of different aspects of the programme. Keeping the public informed and programme administration are complementary activities. Another solution might be to implement a number of small projects by using global grants. |
| --- | --- |

3.10

Programme administration should be decentralised, especially for the small-scale projects mentioned in point 3.6. The Commission has already undertaken to involve the Commission Representations in the Member States to the greatest extent possible in popularising the programme (9), but options should also be explored for broadening the use of the Representations or other national-level structures, including for the management of different aspects of the programme. Keeping the public informed and programme administration are complementary activities. Another solution might be to implement a number of small projects by using global grants.

| 3.11 | The administration of the programme must be completely open and transparent. The EESC welcomes the consultations that the European Commission is already conducting within the framework of the programme. However, in view of the particular nature of the programme, it should be made possible for representatives of the Committee of the Regions, the EESC and the partners in the structured dialogue to be involved in the programme's management committee, giving them expert, full member, observer, active observer or similar status, or setting up a formal or non-formal interinstitutional working group to draft the annual programme. An arrangement of this kind would allow the idea of partnership to be put into practice and information to be efficiently exchanged at an early stage of the decision-making process. Moreover, these representatives should be closely involved at every stage of the programme's evaluation and further development (10). |
| --- | --- |

3.11

The administration of the programme must be completely open and transparent. The EESC welcomes the consultations that the European Commission is already conducting within the framework of the programme. However, in view of the particular nature of the programme, it should be made possible for representatives of the Committee of the Regions, the EESC and the partners in the structured dialogue to be involved in the programme's management committee, giving them expert, full member, observer, active observer or similar status, or setting up a formal or non-formal interinstitutional working group to draft the annual programme. An arrangement of this kind would allow the idea of partnership to be put into practice and information to be efficiently exchanged at an early stage of the decision-making process. Moreover, these representatives should be closely involved at every stage of the programme's evaluation and further development (10).

| 3.12 | Civil society has identified risks concerning the work programme's annual priorities, short-term actions or one-off initiatives, which must not be allowed to obscure or unilaterally curtail the programme's basic objectives: these risks should be eliminated. Civil society should be given the option to choose relevant themes for its projects that meet these objectives. |
| --- | --- |

3.12

Civil society has identified risks concerning the work programme's annual priorities, short-term actions or one-off initiatives, which must not be allowed to obscure or unilaterally curtail the programme's basic objectives: these risks should be eliminated. Civil society should be given the option to choose relevant themes for its projects that meet these objectives.

| 3.13 | The EESC stresses that a two-stage project evaluation system should be set up. A vast number of applications are turned down due to insufficient funding. At present, across the programme's different strands, only around one project in twenty receives support. This must not lead to applicant organisations wasting resources, which would be detrimental to them and run counter to the key objectives pursued. A wider range of deadlines for submitting projects should also be introduced. |
| --- | --- |

3.13

The EESC stresses that a two-stage project evaluation system should be set up. A vast number of applications are turned down due to insufficient funding. At present, across the programme's different strands, only around one project in twenty receives support. This must not lead to applicant organisations wasting resources, which would be detrimental to them and run counter to the key objectives pursued. A wider range of deadlines for submitting projects should also be introduced.

| 3.14 | Administrative expenditure seems excessive, accounting for around 11 % of the programme's overall budget: when planning this expenditure, the EESC urges that account be taken of the cost-benefit analysis (11) and of the solutions put forward in the present opinion for curtailing these costs, such as global grants and a two-stage evaluation system. |
| --- | --- |

3.14

Administrative expenditure seems excessive, accounting for around 11 % of the programme's overall budget: when planning this expenditure, the EESC urges that account be taken of the cost-benefit analysis (11) and of the solutions put forward in the present opinion for curtailing these costs, such as global grants and a two-stage evaluation system.

| 3.15 | The EESC calls for contact points for the Europe for Citizens programme to be set up as soon as possible in those Member States where they do not yet exist, and for their activities and visibility to be stepped up. |
| --- | --- |

3.15

The EESC calls for contact points for the Europe for Citizens programme to be set up as soon as possible in those Member States where they do not yet exist, and for their activities and visibility to be stepped up.

Effectiveness, sustainability and yield on resources committed

| 3.16 | As both the European Commission and the many civil society representatives it consulted acknowledge (12), the programme should in the future be much more closely linked to the actual decision-making process and the European political timetable. The EESC welcomes the fact that one of the result criteria included in the new programme is the number and quality of policy initiatives stemming from the activities it supports. The programme is therefore likely to strengthen the implementation of Article 11 TEU. Similarly, the EESC welcomes the Commission's requirement for best practices and ideas to be exchanged with regard to civic participation (13). |
| --- | --- |

3.16

As both the European Commission and the many civil society representatives it consulted acknowledge (12), the programme should in the future be much more closely linked to the actual decision-making process and the European political timetable. The EESC welcomes the fact that one of the result criteria included in the new programme is the number and quality of policy initiatives stemming from the activities it supports. The programme is therefore likely to strengthen the implementation of Article 11 TEU. Similarly, the EESC welcomes the Commission's requirement for best practices and ideas to be exchanged with regard to civic participation (13).

| 3.17 | All measures supported by the programme should achieve results that lend themselves to practical use, are consistent and sustainable and have the highest-possible profile. This must also be ensured when holding debates, conducting short public meetings and establishing reciprocal contacts. Some of the presidency's events, for example, could be transformed into regular forums for discussion between civil society and the EU institutions. |
| --- | --- |

3.17

All measures supported by the programme should achieve results that lend themselves to practical use, are consistent and sustainable and have the highest-possible profile. This must also be ensured when holding debates, conducting short public meetings and establishing reciprocal contacts. Some of the presidency's events, for example, could be transformed into regular forums for discussion between civil society and the EU institutions.

| 3.18 | The EESC is in favour of making operating grants more accessible, putting special emphasis on the European but also the national level, as it is these grants that enable organisations to build up their overall skills, increase their capacity to take part in shaping policies, and react swiftly to new challenges (14). In contrast, project grants ("action grants") are frequently geared to specific initiatives, and it is often more difficult to ensure the sustainability, institutional memory and quality of action through such grants. The average amounts, number of projects and other indicators set out in the annex to the present proposal should be checked. These points must not become a source of financial or administrative discrimination against smaller organisations, as a result of applying high thresholds for co-financing or other aspects. It would be more appropriate not to set a minimum amount, or set it at a low level in relation to the volume of these grants, so as to increase the number of beneficiaries and/or the duration of the support granted. |
| --- | --- |

3.18

The EESC is in favour of making operating grants more accessible, putting special emphasis on the European but also the national level, as it is these grants that enable organisations to build up their overall skills, increase their capacity to take part in shaping policies, and react swiftly to new challenges (14). In contrast, project grants ("action grants") are frequently geared to specific initiatives, and it is often more difficult to ensure the sustainability, institutional memory and quality of action through such grants. The average amounts, number of projects and other indicators set out in the annex to the present proposal should be checked. These points must not become a source of financial or administrative discrimination against smaller organisations, as a result of applying high thresholds for co-financing or other aspects. It would be more appropriate not to set a minimum amount, or set it at a low level in relation to the volume of these grants, so as to increase the number of beneficiaries and/or the duration of the support granted.

| 3.19 | Extensive use should be made of long-term structural aid for trusted partners. It would also be desirable to extend the maximum duration of projects, when the nature of the project so requires. |
| --- | --- |

3.19

Extensive use should be made of long-term structural aid for trusted partners. It would also be desirable to extend the maximum duration of projects, when the nature of the project so requires.

4.   Additional recommendations to the proposals presented by the European Commission

These amendments express the EESC's point of view on certain key aspects of the programme. In order to take account of the considerations set out in the first section and to ensure the internal consistency of the document, further changes to the content of the proposal, the explanatory memorandum and the annex may be necessary.

| 4.1 | In recital (4) of the preamble, the EESC recommends expanding or removing the sentence "the European Citizens' Initiative provides a unique opportunity to enable citizens to participate directly in shaping the development of EU legislation" (15), as it could raise doubts about the implementation of other provisions of the Lisbon Treaty. |
| --- | --- |

4.1

In recital (4) of the preamble, the EESC recommends expanding or removing the sentence "the European Citizens' Initiative provides a unique opportunity to enable citizens to participate directly in shaping the development of EU legislation" (15), as it could raise doubts about the implementation of other provisions of the Lisbon Treaty.

| 4.2 | In recital (4) of the preamble, the EESC advocates replacing the words "a variety of actions and coordinated efforts through transnational and Union level activities are required" with "a variety of actions and coordinated efforts are required through activities at transnational and Union level, and, in keeping with the European dimension, at national level", in accordance with points 2.3 and 3.6 of the present opinion. |
| --- | --- |

4.2

In recital (4) of the preamble, the EESC advocates replacing the words "a variety of actions and coordinated efforts through transnational and Union level activities are required" with "a variety of actions and coordinated efforts are required through activities at transnational and Union level, and, in keeping with the European dimension, at national level", in accordance with points 2.3 and 3.6 of the present opinion.

| 4.3 | In recital (10) of the preamble, the EESC urges that the word "transnational" be replaced with "the programme's", in accordance with points 2.3 and 3.6 of the present opinion. |
| --- | --- |

4.3

In recital (10) of the preamble, the EESC urges that the word "transnational" be replaced with "the programme's", in accordance with points 2.3 and 3.6 of the present opinion.

| 4.4 | The EESC suggests that the following addition be made to recital (14) of the preamble: "... in cooperation with the Commission, the Member States, the Committee of the Regions, the European Economic and Social Committee, the partners in the structured dialogue and the individual representatives of European civil society ...". |
| --- | --- |

4.4

The EESC suggests that the following addition be made to recital (14) of the preamble: "... in cooperation with the Commission, the Member States, the Committee of the Regions, the European Economic and Social Committee, the partners in the structured dialogue and the individual representatives of European civil society ...".

| 4.5 | In recital (16) of the preamble, the EESC suggests replacing the expressions "directly linked to EU policies" and "the shaping of the EU political agenda" with "directly linked to policies on EU questions" and "the shaping of the political agenda concerning EU questions". |
| --- | --- |

4.5

In recital (16) of the preamble, the EESC suggests replacing the expressions "directly linked to EU policies" and "the shaping of the EU political agenda" with "directly linked to policies on EU questions" and "the shaping of the political agenda concerning EU questions".

| 4.6 | In order to give practical form to the comments made in point 3.13 of the present opinion, the EESC considers that the following should be added to the second sentence of recital (16) of the preamble: ", and by the selection in two stages of proposals for projects". |
| --- | --- |

4.6

In order to give practical form to the comments made in point 3.13 of the present opinion, the EESC considers that the following should be added to the second sentence of recital (16) of the preamble: ", and by the selection in two stages of proposals for projects".

| 4.7 | The EESC suggests the following amendment to Article 1 of the proposal: global aim –: "promoting European values and identity". The concept of "European values and identity" is broader and more inclusive. These amendments should also be made in other parts of the proposal. |
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4.7

The EESC suggests the following amendment to Article 1 of the proposal: global aim –: "promoting European values and identity". The concept of "European values and identity" is broader and more inclusive. These amendments should also be made in other parts of the proposal.

| 4.8 | Furthermore, the EESC recommends that in Article 1, the words "at the Union level" be replaced with "in Union affairs and questions", reflecting the comments made above, in order to assert that civic participation is indivisible and that EU-related affairs are not decided at Union level alone. |
| --- | --- |

4.8

Furthermore, the EESC recommends that in Article 1, the words "at the Union level" be replaced with "in Union affairs and questions", reflecting the comments made above, in order to assert that civic participation is indivisible and that EU-related affairs are not decided at Union level alone.

| 4.9 | In Article 2(2), the EESC advocates replacing "at Union level" with "in Union affairs and questions", and amending the part of the sentence "developing citizens' understanding of the Union policy making-process" to "developing citizens' understanding of the policy making-process concerning Union questions and their ability to take part in this process". |
| --- | --- |

4.9

In Article 2(2), the EESC advocates replacing "at Union level" with "in Union affairs and questions", and amending the part of the sentence "developing citizens' understanding of the Union policy making-process" to "developing citizens' understanding of the policy making-process concerning Union questions and their ability to take part in this process".

| 4.10 | The EESC recommends that Article 3(2) be expanded and amended as follows:






  (3rd indent) | Support for organisations whose activities serve the general European interest or entail an explicit European dimension |
| --- | --- | --- |
| (4th indent) | Community building and debates on citizenship issues bringing in targeted audiences through the use of internet and communication technologies or social media, and strengthening the European dimension through other channels and means of communication |
| (5th indent) | Union level events, in specific and justified cases. Reason: events held at Union level do not always bring added value, as they very often only involve citizens who are already informed about and engaged in European issues, and the results do not justify the high level of expenditure they require. |
| (7th indent) | Reflection/debates on common values, and on the future of Union citizenship and opportunities for participating in this sphere |
| (8th indent) | Initiatives to raise awareness on the EU institutions and their functioning, citizens' rights, especially democratic rights, and the process of policy-making, particularly EU policy, at national level. These initiatives should seek to involve citizens in shaping policy and taking decisions at the various levels and stages |
| (11th indent) | Support of programme information/advice and administrative structures in the Member States |
| (12th indent) | new indent: grants in eligible Member States or regions where access to resources for activities relevant to the programme's objectives is limited or where the rate of civic participation is below average. |

4.10

The EESC recommends that Article 3(2) be expanded and amended as follows:

(3rd indent)

Support for organisations whose activities serve the general European interest or entail an explicit European dimension

(4th indent)

Community building and debates on citizenship issues bringing in targeted audiences through the use of internet and communication technologies or social media, and strengthening the European dimension through other channels and means of communication

(5th indent)

Union level events, in specific and justified cases. Reason: events held at Union level do not always bring added value, as they very often only involve citizens who are already informed about and engaged in European issues, and the results do not justify the high level of expenditure they require.

(7th indent)

Reflection/debates on common values, and on the future of Union citizenship and opportunities for participating in this sphere

(8th indent)

Initiatives to raise awareness on the EU institutions and their functioning, citizens' rights, especially democratic rights, and the process of policy-making, particularly EU policy, at national level. These initiatives should seek to involve citizens in shaping policy and taking decisions at the various levels and stages

(11th indent)

Support of programme information/advice and administrative structures in the Member States

(12th indent)

new indent: grants in eligible Member States or regions where access to resources for activities relevant to the programme's objectives is limited or where the rate of civic participation is below average.

| 4.11 | Regarding Article 4 of the proposal, the EESC underlines that the Commission should, as far as possible, avoid public procurement contracts, which most often lead to ambitious and costly public relations campaigns that are however remote from citizens. It should be ensured that all activities are as open as possible to all participants in the programme. |
| --- | --- |

4.11

Regarding Article 4 of the proposal, the EESC underlines that the Commission should, as far as possible, avoid public procurement contracts, which most often lead to ambitious and costly public relations campaigns that are however remote from citizens. It should be ensured that all activities are as open as possible to all participants in the programme.

| 4.12 | The EESC recommends expanding Article 6 in keeping with the present opinion, and with point 2.6 in particular. |
| --- | --- |

4.12

The EESC recommends expanding Article 6 in keeping with the present opinion, and with point 2.6 in particular.

| 4.13 | In Article 8, consideration should be given to deleting the provision that new programme priorities are set each year, or to watering down the wording of the article. |
| --- | --- |

4.13

In Article 8, consideration should be given to deleting the provision that new programme priorities are set each year, or to watering down the wording of the article.

| 4.14 | The EESC advocates adding the following to Article 9: "3. It should be made possible for representatives of the Committee of the Regions, the European Economic and Social Committee and the partners in the structured dialogue to be actively involved in the programme's management committee, giving them expert, full member, observer or active observer or similar status, or setting up a formal or non-formal interinstitutional working group to draft the annual programme". |
| --- | --- |

4.14

The EESC advocates adding the following to Article 9: "3. It should be made possible for representatives of the Committee of the Regions, the European Economic and Social Committee and the partners in the structured dialogue to be actively involved in the programme's management committee, giving them expert, full member, observer or active observer or similar status, or setting up a formal or non-formal interinstitutional working group to draft the annual programme".

| 4.15 | The EESC recommends adding the following to Article 10: "The parties listed in Article 9 above must be broadly involved at every stage of the programme's evaluation and further development". |
| --- | --- |

4.15

The EESC recommends adding the following to Article 10: "The parties listed in Article 9 above must be broadly involved at every stage of the programme's evaluation and further development".

| 4.16 | The EESC suggests adding the following to Article 14(2): "shall report to the European Parliament, the European Economic and Social Committee and the Committee of the Regions on a regular basis". The EESC recommends adding the words "among others" in the first part of Article 14(3). |
| --- | --- |

4.16

The EESC suggests adding the following to Article 14(2): "shall report to the European Parliament, the European Economic and Social Committee and the Committee of the Regions on a regular basis". The EESC recommends adding the words "among others" in the first part of Article 14(3).

| 4.17 | The EESC suggests adding an indication to chapter 2 of the annex (Programme management) that it is both conceivable and advisable to involve the European Commission's Representations in the Member States, or such other national level structures as it may judge capable of taking part, in the administration of the various strands of the programme. |
| --- | --- |

4.17

The EESC suggests adding an indication to chapter 2 of the annex (Programme management) that it is both conceivable and advisable to involve the European Commission's Representations in the Member States, or such other national level structures as it may judge capable of taking part, in the administration of the various strands of the programme.

| 4.18 | With regard to the evaluation criteria mentioned in the annex, the EESC is particularly anxious to emphasise that a stronger financial commitment should be made in countries and regions where the resources intended to achieve the objectives of the programme are limited or not accessible, or where indicators reveal low participation. |
| --- | --- |

4.18

With regard to the evaluation criteria mentioned in the annex, the EESC is particularly anxious to emphasise that a stronger financial commitment should be made in countries and regions where the resources intended to achieve the objectives of the programme are limited or not accessible, or where indicators reveal low participation.

| 4.19 | In point 2.2.1 of the Legislative financial statement for proposals, the EESC categorically rejects the comment that the participation of medium and small-sized organisations presents a risk to programme management, and calls for it to be removed immediately. In line with the comments made earlier, the EESC points out that such groups are particularly well-suited to civic participation, and that they should be encouraged in every way possible to involve themselves in the programme, in particular by making it easier to submit and manage projects, by lowering the budget threshold they must reach, by permitting the absence of foreign partners where this is not objectively necessary, and by reducing the amount of co-financing required. |
| --- | --- |

4.19

In point 2.2.1 of the Legislative financial statement for proposals, the EESC categorically rejects the comment that the participation of medium and small-sized organisations presents a risk to programme management, and calls for it to be removed immediately. In line with the comments made earlier, the EESC points out that such groups are particularly well-suited to civic participation, and that they should be encouraged in every way possible to involve themselves in the programme, in particular by making it easier to submit and manage projects, by lowering the budget threshold they must reach, by permitting the absence of foreign partners where this is not objectively necessary, and by reducing the amount of co-financing required.

| 4.20 | The EESC calls either for the number of projects laid down in the annex for the various activities to be reviewed, together with their rates of financing, so as to take account of the requests made earlier in the present opinion with a view to making them more accessible to medium or small-sized organisations, and/or for the creation of one or several categories specifically for small-scale projects, offering them better access to operating grants, longer deadlines, etc. |
| --- | --- |

4.20

The EESC calls either for the number of projects laid down in the annex for the various activities to be reviewed, together with their rates of financing, so as to take account of the requests made earlier in the present opinion with a view to making them more accessible to medium or small-sized organisations, and/or for the creation of one or several categories specifically for small-scale projects, offering them better access to operating grants, longer deadlines, etc.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  OJ C 181, 21.6.2012, pp. 137-142.

1

(2)  COM(2011) 884 final.

2

(3)  OJ C 83, 30.3.2010.

3

(4)  OJ C 83, 30.3.2010.

4

(5)  Results of the on-line consultation carried out by the European Commission (2010-2011).

5

(6)  OJ C 28, 3.2.2006, pp. 29–34.

6

(7)  Cf. footnote 6.

7

(8)  OJ C 325, 30.12.2006, pp. 46-52.

8

(9)  COM(2011) 884 final.

9

(10)  Cf. footnote 6.

10

(11)  Under the European Commission's present proposal, the total 2014-2020 budget for the Europe for Citizens programme stands at EUR 229 million, EUR 206 million of which is to be allocated directly to actions carried out under the programme and EUR 23 million to administrative expenses. See annex to COM(2011) 884 final 2011/0436 (APP).

11

(12)  Results of the on-line consultation carried out by the European Commission in 2010-2011.

12

(13)  COM(2011) 884 final.

13

(14)  See also European Parliament, Directorate-General for Internal Policies, Policy Department D: Budgetary Affairs, Financing of Non-governmental Organisations (NGO) from the EU Budget [Study], Provisional Version, 2010.

14

(15)  See footnote 13.

15

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/128 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/128

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union’

COM(2012) 85 final — 2012/0036 (COD)

2012/C 299/23

Rapporteur: Mr DE LAMAZE

On 15 March 2012 and 4 April 2012, respectively, the European Parliament and the Council decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation of proceeds of crime in the European Union

COM(2012) 85 final — 2012/0036 (COD).

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 28 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 142 votes with 5 abstentions.

1.   Conclusions and recommendations

1.1   The EESC supports this Commission initiative, which aims to strengthen the current European legislative framework on freezing and confiscation of the proceeds of crime. The Committee, which shares the concerns of the Parliament and the Council, wishes to emphasise that organised crime is increasing and becoming more complex, particularly in light of its cross-border nature and its substantial resources. In the absence of European harmonisation, criminal organisations take advantage of the least stringent sets of laws, and there is an urgent need to boost efforts at European level. At stake is the security of the people of the EU, a goal which fully justifies EU intervention under Articles 5(3) and 67 of the Treaty on the Functioning of the European Union.

1.2   However, the EESC wishes to make clear that this must be designed and implemented with full respect for national tradition and practices in this area and must take account of particular sensitivities, especially as to the specific crimes that are to be tackled.

1.3   The EESC wishes to highlight the need for a global, operational and integrated approach in this field. It regrets that the proposal does not incorporate the acquis communautaire in relation to judicial cooperation and cooperation between investigative authorities. As a first step, identifying and tracing the proceeds of crime requires strengthening the powers of the Asset Recovery Offices and Eurojust. The EESC also calls for promotion of:

| — | better cooperation between the authorities responsible for tracking, preventing and punishing large-scale trafficking, including cooperation as to the resources used, |
| --- | --- |

—

better cooperation between the authorities responsible for tracking, preventing and punishing large-scale trafficking, including cooperation as to the resources used,

| — | a common culture among all relevant professionals, |
| --- | --- |

—

a common culture among all relevant professionals,

| — | a cross-cutting approach across all Commission DGs, |
| --- | --- |

—

a cross-cutting approach across all Commission DGs,

| — | tax and procedural harmonisation, to which the Europe 2020 strategy could contribute. |
| --- | --- |

—

tax and procedural harmonisation, to which the Europe 2020 strategy could contribute.

1.3.1   Apart from the necessary coordination and the systematic exchange of information between national Asset Recovery Offices, the EESC believes that it is necessary in the long term to consider centralisation at European level in this area, whether through a new, dedicated organisation or directly through Eurojust. In view of what is at stake, the fight against organised crime cannot rely on cooperation alone.

1.4   If measures to freeze and confiscate the proceeds of crime are to be effective, a holistic approach is needed that governs every dimension of the instrument and, when it comes to the confiscated goods being reused, takes care to give priority to socially beneficial purposes.

On that subject, the Committee highlights the need to avert the risk that a direct sale of the goods could enable criminal organisations to regain possession of them.

1.5   Finally, the EESC notes that the effectiveness of the fight against organised crime cannot justify any violation whatsoever of the fundamental rights set out in the Charter of Fundamental Rights, particularly the rights of the defence.

2.   Content of the Commission proposal

2.1   This proposal, whose aim is to protect the licit economy from criminal infiltration, sets minimum rules for the Member States in relation to the freezing and confiscation of assets derived from crime, that is to say the proceeds (including indirect proceeds) of crime as well as its instrumentalities. Since the main legal basis of the proposal is Article 83(1) of the Treaty on the Functioning of the European Union, its scope is limited to "Euro-crimes", which includes crimes committed by participation in a criminal organisation but only to the extent that they have already been harmonised at European level.

2.2   The proposal, which replaces Joint Action 98/699/JHA and, in part, Framework Decisions 2001/500/JHA (1) and 2005/212/JHA (2):

| — | carries over the existing provisions on confiscation of instrumentalities and proceeds of crime following final conviction and on confiscation of property of equivalent value to the proceeds of crime (Article 3), and |
| --- | --- |

—

carries over the existing provisions on confiscation of instrumentalities and proceeds of crime following final conviction and on confiscation of property of equivalent value to the proceeds of crime (Article 3), and

| — | amends the provisions on extended confiscation (Article 4) by providing for a single set of minimum rules in place of the current system of optional rules. Extended confiscation is not available in cases of prescription or where the non bis in idem principle applies. |
| --- | --- |

—

amends the provisions on extended confiscation (Article 4) by providing for a single set of minimum rules in place of the current system of optional rules. Extended confiscation is not available in cases of prescription or where the non bis in idem principle applies.

2.3   This proposal also introduces new provisions, which allow for:

| — | non-conviction based confiscation (Article 5), in circumstances where a criminal conviction cannot be obtained because the suspect has died, is permanently ill or when his flight or illness prevents effective prosecution within a reasonable time and poses the risk that it could be barred by statutory limitations, |
| --- | --- |

—

non-conviction based confiscation (Article 5), in circumstances where a criminal conviction cannot be obtained because the suspect has died, is permanently ill or when his flight or illness prevents effective prosecution within a reasonable time and poses the risk that it could be barred by statutory limitations,

| — | confiscation of assets transferred to a third party who should have been aware of their criminal origin (Article 6), |
| --- | --- |

—

confiscation of assets transferred to a third party who should have been aware of their criminal origin (Article 6),

| — | preventative interim freezing of assets which are in danger of vanishing in the absence of intervention, provided that if such a measure is taken by the competent authorities, it must be confirmed by a court (Article 7), |
| --- | --- |

—

preventative interim freezing of assets which are in danger of vanishing in the absence of intervention, provided that if such a measure is taken by the competent authorities, it must be confirmed by a court (Article 7),

| — | investigations in relation to a person's assets to allow previously unexecuted confiscation orders to be carried out, even after criminal proceedings have been completed (Article 9), |
| --- | --- |

—

investigations in relation to a person's assets to allow previously unexecuted confiscation orders to be carried out, even after criminal proceedings have been completed (Article 9),

| — | adequate management of frozen property to prevent it declining in value before being confiscated (Article 10). |
| --- | --- |

—

adequate management of frozen property to prevent it declining in value before being confiscated (Article 10).

2.4   These restrictions on fundamental rights (3) are balanced by safeguards which aim to guarantee the presumption of innocence, the right to a fair trial, the existence of effective judicial remedies and the right to be informed of how to exercise such remedies (Article 8).

3.   General comments

3.1   In the context of the major human, social, economic and financial costs of organised crime, not to mention the way that it constrains the rights and freedoms of individuals and players in the internal market, harming their confidence, the EESC emphasises that confiscation measures have a key role to play in the fight against organised crime by undermining its main purpose, namely financial gain.

3.2   The EESC therefore supports the aims of this initiative to strengthen the European legislative framework in this field. Both the European Parliament and the Council have long insisted on the need for such tightening in the wake of the Stockholm Programme. In this respect, the Committee welcomes the European Parliament's recent creation of a special committee on organised crime, corruption and money laundering, which reaffirms the determination to put the fight against these scourges at the top of the EU's list of political priorities.

3.3   The EESC calls for full awareness of the critical situation caused by the crisis and the worrying increase in illegal activities in the EU. It would like to see greater harmonisation between the Member States in dealing with criminal networks and their assets.

3.4   In the context of the crisis, the EESC calls for attention to be paid to the economic and social possibilities offered by seizing what are often very large illegally-acquired sums in order to return them to circulation within the legal economy. It also highlights the fact that the fight against organised crime should support the virtuous circle created by such an approach through a better-functioning internal market, by reducing the competition distortions from which legal businesses suffer.

3.5   The need for a global, operational and integrated approach

3.5.1   Since the effectiveness of the fight against organised crime necessarily requires a global approach, the EESC regrets the fact that the harmonisation of freezing and confiscation measures is not part of a global instrument including the acquis communautaire in relation to judicial cooperation and cooperation between investigative authorities that was adopted under the old third pillar, since these are inseparable, complementary elements of one policy.

3.5.2   The EESC stresses that, if measures to freeze and confiscate the proceeds of crime are to be effective, a holistic approach is needed so as to provide a framework that takes account of all of the dimensions of the related issues, with a particular focus on the need to counter the risk that a direct sale of the goods could enable criminal organisations to regain possession of those goods.

3.5.3   In order to achieve consistency, greater legal certainty and more satisfactory transposition and application of European rules, the EESC also calls for the directive to refer to Decision 2006/783/JHA on the application of the principle of mutual recognition to confiscation orders and Decision 2007/845/JHA concerning cooperation between Asset Recovery Offices of the Member States in the field of tracing and identification of proceeds of crime.

3.5.4   In fact, freezing and confiscation measures can only be effectively executed if they are supported by an equally effective system of tracing and identification of the proceeds of crime, including laundered proceeds.

3.5.5   With regard to the reuse of confiscated goods, the Committee would stress the importance of creating mechanisms for cooperation among Member States so as to facilitate the sharing of best practices amongst competent national authorities.

3.5.6   In this respect, the EESC reasserts:

| — | the need to give Asset Recovery Offices easier access to financial information (particular data on bank accounts) (4), |
| --- | --- |

—

the need to give Asset Recovery Offices easier access to financial information (particular data on bank accounts) (4),

| — | the advantages for the Member States of making full use of the potential of Eurojust, whose added value in relation to cross-border investigation and prosecution needs no further demonstration, and which can help facilitate interaction between Asset Recovery Offices and judicial authorities, |
| --- | --- |

—

the advantages for the Member States of making full use of the potential of Eurojust, whose added value in relation to cross-border investigation and prosecution needs no further demonstration, and which can help facilitate interaction between Asset Recovery Offices and judicial authorities,

| — | the urgent need to strengthen Eurojust's powers of initiative, particularly the power to open investigations, |
| --- | --- |

—

the urgent need to strengthen Eurojust's powers of initiative, particularly the power to open investigations,

| — | the advantages of cooperation between all authorities responsible for tracking, preventing and punishing large-scale trafficking, using all their resources (electronic files, mutual exchange of information and resources in terms of staff, expertise and equipment), |
| --- | --- |

—

the advantages of cooperation between all authorities responsible for tracking, preventing and punishing large-scale trafficking, using all their resources (electronic files, mutual exchange of information and resources in terms of staff, expertise and equipment),

| — | the urgent need to create a common culture in this field in Europe, through exchanges of customs, police, tax and justice personnel, |
| --- | --- |

—

the urgent need to create a common culture in this field in Europe, through exchanges of customs, police, tax and justice personnel,

| — | the need to produce the necessary synergy between the Commission's Directorates-General in order to contribute to this, |
| --- | --- |

—

the need to produce the necessary synergy between the Commission's Directorates-General in order to contribute to this,

| — | the need for tax and procedural harmonisation, so as to deny organised crime any refuge in Europe, and |
| --- | --- |

—

the need for tax and procedural harmonisation, so as to deny organised crime any refuge in Europe, and

| — | the need to link the fight against organised crime to the Europe 2020 strategy. |
| --- | --- |

—

the need to link the fight against organised crime to the Europe 2020 strategy.

3.5.7   Furthermore, the success and effectiveness of certain steps that have been taken at national level to deal with confiscated assets on a centralised basis (5) suggest that this experience should be transferred to the European level. The EESC would therefore suggest that, beyond the necessary coordination and the systematic exchange of information between national Asset Recovery Offices, genuine consideration should be given to the possibility of European centralisation in this field, whether through a new, dedicated organisation or directly through Eurojust. Even though at present such centralisation may clash with national sensitivities related to the sharing of certain databases, it should still be treated as an objective, albeit perhaps a long-term one, since cooperation alone cannot achieve the goal of effectively combating organised crime.

3.5.8   Finally, bearing in mind that the European confiscation strategy can only be fully effective if it forms part of a worldwide approach, the EESC regrets the fact that the proposal does not deal with that essential element.

4.   Specific comments

4.1   Article 1 of the draft directive: replace "in criminal matters" with "as a result of criminal offences".

4.2   Article 2(1) of the draft directive: targets of freezing and confiscation measures

4.2.1   The EESC welcomes the extension of these measures to indirect gains; this represents significant progress compared with Decision 2005/212/JHA.

4.3   Article 3(2) of the draft directive: confiscation of equivalent value

4.3.1   The EESC recommends extending this to property used to commit the offence (referred to as "instrumentalities"). It sees no reason to limit this measure to the proceeds of crime. The EESC highlights the fact that the definition of "instrumentalities" includes vehicles used to transport the proceeds of crime within the EU.

4.4   Article 4 of the draft directive: extended powers of confiscation

4.4.1   The EESC welcomes the simplification represented by the introduction of the single standard in this respect, since the system of options under Decision 2005/212/JHA led to excessive diversity in national approaches, to the detriment of the effective application of the principle of mutual recognition in this field.

4.4.2   However, the EESC is very disappointed that the criterion of the value of the property being disproportionate to lawful income no longer appears prominently (6), but is present only implicitly as one of the "specific facts" on the basis of which the court can reach its decision (Article 4(1)). This factor does in fact have decisive importance in those national laws that are the most advanced in terms of the fight against organised crime. The EESC notes the Commission's decision to leave reference to this criterion to the discretion of national courts and calls on the EP and the Council to reintroduce this criterion by adding to the proposal for a directive, after the words "to a person convicted of a criminal offence", the words "to an extent proportional to his lawful income". At the same time, the Committee urges national authorities to treat this criterion as a point of the greatest importance.

4.5   Article 5 of the draft directive: non-conviction based confiscation

4.5.1   Although it may appear difficult as a matter of principle to reconcile confiscation with the fact that the person concerned is not called to account for the actions on which the measure is based, the EESC recognises that this is a useful measure in practical terms and supports it on the grounds of effectiveness. It would also help with mutual recognition with common law countries, which already use civil confiscation procedures.

4.5.2   However, the EESC is concerned that introducing the concept of "permanent illness of the suspected or accused person" may open the door to all manner of abuses. As EU law gives every accused person the right to legal representation, the EESC calls for illness not to be grounds for non-conviction based confiscation and therefore asks that it be deleted from the proposal for a directive (Article 5).

4.6   Article 7 of the draft directive: freezing

4.6.1   The EESC notes that judicial procedure, and so the rights of the defence, cannot be excluded simply because that is necessary in order to make enforcement effective.

4.6.2   The EESC believes that all freezing measures should be confirmed by a court within a reasonable time, but that the competent administrative authorities should have the power to take any immediate protective measures.

4.7   Article 8 of the draft directive: safeguards for the rights of the defence

4.7.1   The proposal provides for procedural safeguards and judicial remedies for the defendant, in line with the approach developed by the European Court of Human Rights to assess the proportionality of certain measures that restrict the fundamental right to property – particularly extended confiscation, non-conviction based confiscation and third party confiscation – on a case-by-case basis. While it may seem unnecessary to remind impartial courts of the law, it is useful to make clear that all court confiscation orders must give reasons and be communicated to all those affected by them.

4.7.2   For the sake of consistency with the requirements under the European anti-money laundering rules, the EESC emphasises that, in connection with the anticipated future instrument in this respect, the person whose assets are seized should have the right to legal aid.

4.7.3   In the EESC's view, the accused should not have fewer rights than a person whose involvement is as a third party who receives the goods in question. To avoid any ambiguity in that respect, the EESC proposes that Article 8(1) should be redrafted as follows: "Each Member State shall take the necessary measures to ensure that the persons affected by the measures provided for under this Directive have the right to an effective remedy and the right to legal aid. Any judicial confiscation order must give reasons and be notified to the person concerned."

4.8   Article 9 of the draft directive: effective execution

4.8.1   The EESC considers that the goal of ensuring effective execution of confiscation orders, while legitimate in itself, cannot justify the adoption of "further measures" which would be added on top of the judges' decision. This is a necessary safeguard in the light of the principles of a fair trial and of determination of the sentence. The only measures that are, of course, acceptable are "further investigative measures within the context of continuing effective execution of a sentence imposed by a court".

4.8.2   The EESC notes that confiscation proper can be added to a sentence involving payment of criminal, tax or customs fines, to counter the risk of loss to the state resulting from fraud as to the composition of the unlawfully obtained goods. It therefore recommends that the directive provide for strengthened cooperation between Member States, so that all Member States can be sure that such penalties will be enforced. Such a provision is an essential condition for proceedings to be effective.

4.9   The matter of application and restitution of confiscated funds

4.9.1   Far from being a subsidiary point, the matter of application of funds has a direct impact on the overall effectiveness of the confiscation strategy. Since direct sale of property often allows criminal organisations to regain possession of such property in roundabout ways, the EESC highlights the advantages of applying such assets first to social purposes, as is the case in Italy. As the European Parliament has noted (7), this would have the double benefit of preventing organised crime and promoting economic and social development.

4.9.2   The EESC sees the consideration now being given by DG Justice to this question of social application of the proceeds of crime as important. There are various possible approaches, which must involve the central authorities of the Member States and which should be explored and adapted in light of the victims, the public interest and the nature of the frozen assets.

4.9.3   Reasons linked with the need to comply with the principles of subsidiarity and proportionality should not prevent the EU from proposing even a general legal framework in this field. The EESC urges the Member States to exchange best practices in this area.

4.9.4   That implies the prior existence of clear rules related to restitution. It is quite often the case that the Member State in which the property is seized is not the state in which restitution is to be made. For reasons of fairness and to establish a level playing field between Member States, the EESC calls for the EU to provide clarification on this point, particularly in relation to the 2006 framework decision, which provides for 50:50 sharing between Member States.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  On money laundering and the identification, freezing, seizing and confiscation of instrumentalities and the proceeds of crime.

1

(2)  On confiscation of crime-related proceeds, instrumentalities and property.

2

(3)  Or on these principles.

3

(4)  See the report from the Commission based on Article 8 of 2007/845/JHA, 12 April 2011.

4

(5)  Particularly AGRASC in France and BOOM in the Netherlands.

5

(6)  This is one of the alternative and/or cumulative options provided for by Decision 2005/212/JHA (Article 3(2)(c)).

6

(7)  Report on organised crime in the EU, October 2011.

7

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/133 |
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4.10.2012

EN

Official Journal of the European Union

C 299/133

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on the European Maritime and Fisheries Fund (repealing Council Regulation (EC) No 1198/2006 and Council Regulation (EC) No 861/2006 and Council Regulation No XXX/2011 on integrated maritime policy)’

COM(2011) 804 final — 2011/0380 (COD)

2012/C 299/24

Rapporteur: Mr Sarró IPARRAGUIRRE

On 15 December 2011 and 16 January 2012 respectively, the Council and the European Parliament decided to consult the European Economic and Social Committee, under Article 43 of the Treaty on the Functioning of the European Union, on the

Proposal for a Regulation of the European Parliament and of the Council on the European Maritime and Fisheries Fund [repealing Council Regulation (EC) No 1198/2006 and Council Regulation (EC) No 861/2006 and Council Regulation No XXX/2011 on integrated maritime policy]

COM(2011) 804 final — 2011/0380 (COD).

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 150 votes to 1 with 6 abstentions.

1.   Conclusions and recommendations

1.1   The Committee welcomes the Commission's proposal and shares its objectives and priorities. Nevertheless, it should be made clear in relation to the first objective that fisheries and aquaculture should be sustainable and competitive from an economic, social and environmental point of view. The EESC also regrets the fact that there is no specific reference in the objectives of the European Maritime and Fisheries Fund (EMFF) to the processing and marketing sector for fisheries and aquaculture products.

1.2   In relation to the definition of small-scale coastal fishing, the EESC reiterates the comments made in its opinion on the reform of the Common Fisheries Policy (CFP) and calls on the Council and the European Parliament to extend the Commission's proposal accordingly.

1.3   The Committee endorses the objective to eliminate overcapacity in the fleet wherever it may exist. This is why the EESC considers that support for the permanent cessation of fishing vessels needs to remain in place, provided that this enables each segment to carry out a genuine adjustment to the existing fishing opportunities.

1.4   The EESC also considers that support for temporary cessation should be kept in place.

1.5   The Committee attaches great importance to support for fostering relations and partnerships between scientists and fishermen, promoting human capital and social dialogue, facilitating diversification and job creation and improving safety on board. It also sees a need to introduce measures aimed at bringing young professionals into the fishing sector, so as to help mitigate the lack of transfer between generations, and to focus more on creating and maintaining jobs.

1.6   The EESC endorses support for the implementation of conservation measures under the CFP; for limiting the impact of fishing on the marine environment; for innovation; for protecting and restoring marine biodiversity and ecosystems; for mitigating climate change; for improving the use of unwanted catches; and for increasing energy efficiency.

1.7   The EESC agrees with the proposed support for inland fishing. Nevertheless, it believes that assistance measures should be introduced to prevent the interaction of freshwater aquaculture and agriculture with freshwater fishing.

1.8   The EESC agrees with measures aimed at the sustainable development of aquaculture and fisheries areas and puts forward in this opinion a number of improvements it considers important.

1.9   The Committee welcomes the measures concerning the processing and marketing of fisheries products. Nevertheless, it believes that support to compensate producer organisations which store fisheries products should be maintained until the end of the EMFF's period of application. Similarly, it believes that it is vital to maintain the compensatory allowances mechanism for tuna for processing. Furthermore, it considers that the specific objectives should include improving the processing industry's competitiveness, public health conditions and the quality of products; reducing negative environmental impacts and increasing energy efficiency; improving the use of little-used species, by-products and litter; developing, producing and marketing new products; using new technologies and innovative production methods; opening and developing new markets and improving working conditions and training for workers.

1.10   The EESC welcomes all the proposals concerning the Integrated Maritime Policy (IMP).

2.   Background

2.1   The reform of the CFP will come into force on 1 January 2013 (1).

2.2   The financial basis for the CFP in its current form is Regulation (EC) No 1198/2006 on the European Fisheries Fund (EFF), which was due for review before 1 January 2014.

2.3   The IMP was financed in the years 2008-2010 through a series of pilot schemes and preparatory actions. A new financial instrument has been proposed by the Commission for the period between 2012 and 2013.

2.4   The reform of the CFP and the consolidation of the IMP will be supported by the new European Maritime and Fisheries Fund (EMFF), which will enter into force on 1 January 2014.

3.   Analysis of the proposal

3.1   Objectives and priorities

3.1.1   In general terms, the proposal distributes the support granted under the concepts of "shared management" (essentially the CFP) and "direct management" (covering the IMP and complementary measures for both the CFP and the IMP), putting in place EU financial measures for the implementation of:

| a) | the CFP; |
| --- | --- |

a)

the CFP;

| b) | relevant measures relating to the Law of the Sea; |
| --- | --- |

b)

relevant measures relating to the Law of the Sea;

| c) | sustainable development of fisheries areas and inland fishing; |
| --- | --- |

c)

sustainable development of fisheries areas and inland fishing;

| d) | the IMP. |
| --- | --- |

d)

the IMP.

3.1.2   In relation to the definition of "small-scale coastal fisheries", the EESC reiterates the comments made in its opinion on the reform. The Committee believes that the reality of the small-scale fleet in the different Member States is not being taken into account and that a single arbitrary criterion is being set which is likely to lead to discrimination. The EESC therefore advocates criteria in addition to size which could be used to define this highly diversified form of fishing, such as time spent at sea, distance from the coast, type of fishing gear and links to local communities. Trap nets should also be included in the definition of small-scale fishing.

3.1.3   The EESC considers it appropriate to clarify the concepts of self-employed and employed fishermen, in order to determine precisely who are the beneficiaries of the various EMFF measures, since the term "fisherman" is frequently used in relation to different concepts such as vessel owners, self-employed fishermen who are not employees, etc.

3.1.4   The objectives of the EMFF are:

| a) | to promote sustainable and competitive fisheries and aquaculture; |
| --- | --- |

a)

to promote sustainable and competitive fisheries and aquaculture;

| b) | to foster the development and implementation of the IMP in a complementary manner to cohesion policy and the CFP; |
| --- | --- |

b)

to foster the development and implementation of the IMP in a complementary manner to cohesion policy and the CFP;

| c) | to promote balanced and inclusive territorial development of fisheries areas; |
| --- | --- |

c)

to promote balanced and inclusive territorial development of fisheries areas;

| d) | to foster the implementation of the CFP. |
| --- | --- |

d)

to foster the implementation of the CFP.

3.1.5   The EESC considers that it should be made clear in relation to the first objective that fisheries and aquaculture should be sustainable and competitive from an economic, social and environmental point of view.

3.1.6   The EESC also regrets the fact that there is no specific reference in those objectives or in the priorities of the EU to the processing and marketing sector, given that it is among those targeted by the actions set out in the proposal. In this regard, the Committee regrets that the objectives do not include financing investments aimed at ensuring the safety and quality of products, improving working conditions and the business environment, and supporting the development of a strong, innovative and sustainable industrial base that can create jobs and compete on the world market.

3.1.7   Except where the regulation expressly provides otherwise, the geographical scope of the proposal covers operations carried out in the territory of the EU.

3.2   Admissibility of applications and ineligible operations

3.2.1   Applications submitted by operators that have committed an irregularity under the EFF or the EMFF, that have committed a serious infringement under the regulation on IUU (illegal, unreported and unregulated) fishing, that are included on the IUU vessel list or that are responsible for other instances of non-compliance with the CFP rules which seriously jeopardise the sustainability of the stocks concerned will not be admissible for an identified period of time.

3.2.2   The following operations will not be eligible under the EMFF:

| a) | operations increasing the fishing capacity of the vessel; |
| --- | --- |

a)

operations increasing the fishing capacity of the vessel;

| b) | construction of new fishing vessels, decommissioning or importation of fishing vessels; |
| --- | --- |

b)

construction of new fishing vessels, decommissioning or importation of fishing vessels;

| c) | temporary cessation of fishing activities; |
| --- | --- |

c)

temporary cessation of fishing activities;

| d) | experimental fishing; |
| --- | --- |

d)

experimental fishing;

| e) | transfer of ownership of a business; |
| --- | --- |

e)

transfer of ownership of a business;

| f) | direct restocking, unless explicitly foreseen as a conservation measure by an EU legal act, or in the case of experimental restocking. |
| --- | --- |

f)

direct restocking, unless explicitly foreseen as a conservation measure by an EU legal act, or in the case of experimental restocking.

3.2.3   The EESC considers that support for the permanent cessation of fishing vessels needs to remain in place to allow a serious and thorough restructuring of the EU fleet, as long as it makes it possible for each segment to carry out a genuine adjustment to the existing fishing opportunities in the context of economically, socially and environmentally sustainable fishing. Measures should also be included to provide compensation for exit from the profession, such as early retirement or flat-rate compensation, as a result of vessels ceasing to operate.

3.2.4   On the basis of a report from the Court of Auditors which analysed whether the measures adopted contributed to adjusting the capacity of fleets to the existing fishing opportunities, the Commission argues that such support has not succeeded in resolving the problem of overcapacity in the EU fleet and should be removed.

3.2.5   However, the Committee notes that the report does not call the existence of support for permanent cessation into question, but rather sets out a series of recommendations to the Commission and the Member States.

3.2.5.1   To the Commission, it recommends adopting measures that are more suitable for achieving a balance between capacity and fishing opportunities; setting effective limits for fishing fleet capacity; and ensuring that fishing right transfer schemes contribute to reducing overcapacity.

3.2.5.2   To the Member States, it recommends ensuring that measures to aid investments on board do not contribute to increasing capacity; ensuring that decommissioning schemes have a positive impact on the sustainability of the targeted fish stocks; and avoiding the provision of public support for decommissioning inactive vessels.

3.2.6   To solve the overcapacity problem, the Commission proposes a system of transferable concessions. The EESC rejected that system in its opinion on the reform, on the basis that support for permanent cessation should be kept in place in order to reduce possible overcapacity.

3.2.7   On the other hand, the EESC also considers that support for temporary cessation should be kept in place, given its essential role in improving the state of stocks, particularly as regards closed seasons, while at the same time partially compensating fishermen for their loss of income during the period of cessation.

3.2.8   Support for temporary cessation is wholly justified in the case of:

| a) | a drastic reduction of quotas or fishing effort under multiannual fisheries management schemes; |
| --- | --- |

a)

a drastic reduction of quotas or fishing effort under multiannual fisheries management schemes;

| b) | breach or termination of fisheries agreements; |
| --- | --- |

b)

breach or termination of fisheries agreements;

| c) | environmental disasters. |
| --- | --- |

c)

environmental disasters.

3.2.9   The Committee considers that such support is particularly important for maintaining and developing the socioeconomic fabric of regions that are highly dependent on fishing, since it is directed at crew as well as owners and ensures that fishing activity continues.

3.3   Budgetary resources under shared management and direct management

3.3.1   The budgetary resources for 2014-2020 under shared management will be EUR 5,520 million, allocated among the Member States on the basis of certain objective criteria set out in the proposal. The resources under direct management, including technical assistance, will be EUR 1,047 million.

3.3.2   To access the co-financing provided through the EMFF, each Member State will have to draw up a single operational programme to implement the EU priorities. The Commission will approve the Member States' operational programmes, and any modifications to them, by way of implementing acts.

3.4   Measures financed under shared management

3.4.1   Sustainable development of fisheries

3.4.1.1   The support provided under this heading will contribute to the achievement of the following EU priorities:

| — | fostering an innovative and competitive sector; |
| --- | --- |

—

fostering an innovative and competitive sector;

| — | promoting sustainable and resource-efficient aquaculture. |
| --- | --- |

—

promoting sustainable and resource-efficient aquaculture.

3.4.1.2   As a general requirement, owners that have benefited from support for the retrofitting of small-scale coastal fishing vessels in order to reassign them for activities outside fishing, or have received support for investments on board to make the best use of unwanted catches of commercial stocks and valorise underused components of fish caught, will not be allowed to transfer such vessels to a third country outside the EU for at least five years following the date of actual payment to the beneficiary.

3.4.1.3   The EESC considers that the provision outlined in point 3.4.1.2 needs to be redrafted so as to state that if such vessels are exported within five years following receipt of the support, it must be repaid pro rata temporis.

3.4.1.4   Innovation. The EMFF may support projects aiming at developing or introducing products, processes or management and organisation systems that are new or substantially improved compared to the state of the art.

3.4.1.5   The EESC considers that the "state of the art" concept should be better defined, and notes that there is also a social aspect to innovation.

3.4.1.6   Operations financed in relation to innovation are to be carried out in collaboration with a scientific or technical body recognised by the Member State, which will validate the results of the operations.

3.4.1.7   The EESC does not believe that every innovation action necessarily requires the involvement of a scientific or technical body. Improvement of the economic performance of fishing enterprises as a result of these actions should be a more important requirement.

3.4.1.8   Advisory services. The EMFF may support:

| — | project feasibility studies; |
| --- | --- |

—

project feasibility studies;

| — | the provision of professional advice on business and marketing strategies. |
| --- | --- |

—

the provision of professional advice on business and marketing strategies.

3.4.1.9   The Commission proposes that feasibility studies and professional advice on business and marketing strategies should be provided by recognised scientific or technical bodies, and that the sum involved should not exceed EUR 3 000.

3.4.1.10   The EESC believes that this should also cover private firms, which can design and advise on strategic business and marketing plans, and that the maximum amount should be increased. In any event, the method used to determine that amount should be set when the criteria for the selection of projects are determined.

3.4.1.11   Partnerships between scientists and fishermen. The EMFF may support:

| — | the creation of a network composed of independent scientific bodies and fishermen or organisations of fishermen, |
| --- | --- |

—

the creation of a network composed of independent scientific bodies and fishermen or organisations of fishermen,

| — | activities carried out by such a network. |
| --- | --- |

—

activities carried out by such a network.

3.4.1.12   The EESC considers that promoting relationships between scientists and fishermen is of the utmost importance.

3.4.1.13   Promoting human capital and social dialogue. The EMFF may support:

| — | lifelong learning, dissemination of scientific knowledge and innovative practices and acquisition of new professional skills, in particular those linked to the sustainable management of marine ecosystems, activities in the maritime sector, innovation and entrepreneurship; |
| --- | --- |

—

lifelong learning, dissemination of scientific knowledge and innovative practices and acquisition of new professional skills, in particular those linked to the sustainable management of marine ecosystems, activities in the maritime sector, innovation and entrepreneurship;

| — | networking and exchange of experience between stakeholders, including organisations promoting equal opportunities between men and women; |
| --- | --- |

—

networking and exchange of experience between stakeholders, including organisations promoting equal opportunities between men and women;

| — | promoting social dialogue at national, regional or local level involving fishermen and other relevant stakeholders. |
| --- | --- |

—

promoting social dialogue at national, regional or local level involving fishermen and other relevant stakeholders.

3.4.1.14   The EESC acknowledges the Commission's efforts to include actions aimed at promoting human capital and social dialogue, job creation and health and safety on board fishing vessels. However, it considers that there are some aspects that should be clarified or added. First, the EESC wishes to make clear that social dialogue is a process that takes place between the social partners, that is, between employers' and workers' organisations. References to "other relevant stakeholders" in relation to the promotion of social dialogue should therefore be deleted. Secondly, the Committee considers that not only "fishermen", but also other "operators" should be included as beneficiaries of this support, so that other fisheries professionals who perform ancillary work (such as repair of fishing gear and unloading in ports) can also benefit. The EESC also considers it desirable to promote the co-financing of European activities performed by European organisations in the sector, particularly information seminars on the development of the CFP, to allow the social partners to understand the legislation better, promote compliance with the rules and make best use of funds. Finally, the EESC believes that the EMFF should include financial support for the education and training of fishermen, to give them the skills they need to find jobs in other sectors. That financial support should include compensation for loss of income during the education or training period.

3.4.1.15   Facilitating diversification and job creation. The EMFF may support:

| — | business start-ups outside fishing; |
| --- | --- |

—

business start-ups outside fishing;

| — | retrofitting of small-scale coastal fishing vessels in order to reassign them to activities outside fishing. |
| --- | --- |

—

retrofitting of small-scale coastal fishing vessels in order to reassign them to activities outside fishing.

3.4.1.16   The EESC considers that the reference to small-scale fishing should be removed, so as to support the retrofitting of any fishing vessel for activities other than fishing.

3.4.1.17   There is a striking lack of support for job creation in the fishing sector itself. The EESC believes that some sort of measure aimed at bringing young professionals into the fishing sector needs to be put in place, so as to help mitigate one of the major problems identified in this sector, namely the transfer between generations.

3.4.1.18   Health and safety on board. The EMFF may support fishermen and owners of fishing vessels, per programming period, per fishing vessel or per beneficiary, for investments on board or in individual equipment, provided that such investments go beyond standards required under national or EU law.

3.4.1.19   The EESC considers that this should not be limited to investments on board vessels, allowing fishermen collecting fish and shellfish in the inter-tidal zone and ancillary workers to benefit as well. The scope of such support should also be extended to cover general improvements of on-board conditions, that is to say prevention of workplace risks, improvement of working conditions and of hygienic conditions etc., as well as feasibility studies for such investments.

3.4.1.20   The limitation that such support may only be provided once per programming period should also be removed.

3.4.1.21   Support for systems of transferable fishing concessions under the CFP. The Commission proposes to provide support for setting up or modifying the systems of transferable fishing concessions provided for in the CFP. The EESC considers it appropriate to provide such support if the system is ultimately set up under the CFP.

3.4.1.22   The EMFF provides for support for the implementation of conservation measures under the CFP, for limiting the impact of fishing on the marine environment, for innovation linked to the conservation of marine biological resources and for protecting and restoring marine biodiversity and ecosystems, in the context of sustainable fisheries activities. The EESC agrees with these points and draws particular attention to the recognition of the important role that fishermen themselves can play in relation to the cleanness and conservation of the marine environment.

3.4.1.23   Mitigation of climate change. To mitigate the effects of climate change, the EMFF may support investments on board aimed at reducing the emission of pollutants or greenhouse gases, as well as energy efficiency audits and programmes. In return, the Commission proposes to end support for the replacement or modernisation of engines.

3.4.1.24   The EESC considers that support for the replacement or modernisation of engines should be allowed if it does not increase the capacity of the vessels. Doing otherwise could endanger the safety of vessels and crew, would not lead to energy efficiency improvements and would not help to reduce contamination.

3.4.1.25   Product quality and use of unwanted catches. The EMFF may support investments on board to improve the quality of the fish caught and to improve the use of unwanted catches. Such support cannot be given more than once per programming period, per vessel or per beneficiary. Support can also be granted to fishing ports, landing sites and shelters to improve energy efficiency, contribute to environmental protection or improve safety and working conditions, as well as for the construction or modernisation of shelters to improve the safety of fishermen.

3.4.1.26   The EESC considers that the measures for fishing ports, landing sites and shelters are appropriate, but should be extended to include support for investments for storage and auctioning of fisheries products, refuelling, supplies to vessels (water, ice, electricity, etc.) and computerised management of markets.

3.4.1.27   Inland fishing. The EMFF may support vessels which operate in inland waters, in order to reduce the impact of freshwater fishing on the environment, increase energy efficiency, increase the quality of fisheries, or improve safety or working conditions. It will also support diversification by inland fishermen, as well as their involvement in the management, restoration and monitoring of NATURA 2000 areas. The EESC agrees with the proposed measures although, as it stated in its opinion on the reform of the CFP, the Commission should introduce assistance measures to prevent the interaction of freshwater aquaculture and agriculture with freshwater fishing.

3.4.1.28   In the northernmost regions of the EU, winter fishing under the ice cover takes place in lakes as well as coastal areas over a season that can last as long as six months. Snowmobiles and specific equipment for winter fishing should be eligible for support from the EMFF.

3.4.2   Sustainable development of aquaculture

3.4.2.1   The support provided under this heading will contribute to the achievement of the following EU priorities:

| — | fostering innovative, competitive and knowledge-based aquaculture; |
| --- | --- |

—

fostering innovative, competitive and knowledge-based aquaculture;

| — | promoting sustainable and resource-efficient aquaculture. |
| --- | --- |

—

promoting sustainable and resource-efficient aquaculture.

3.4.2.2   The EESC considers that granting support to aquaculture enterprises is appropriate regardless of their size (whether micro enterprises, SMEs or large enterprises), but it believes that the reduction for large aquaculture enterprises in Annex I is unwarranted.

3.4.2.3   The proposal provides for support for innovation; for investments in offshore and non-food aquaculture, in order to foster forms of aquaculture with high growth potential; to carry out the processing, marketing and direct sale of production; to set up management, relief and advisory services for aquaculture farms; and to promote human capital and networking.

3.4.2.4   The EESC supports these proposals. However, in relation to the last of these points and in order to improve the activities carried out by the workforce of aquaculture enterprises, the EESC proposes creating a specific support measure to improve health and safety conditions for workers on aquaculture farms, whether at sea or in the form of jobs on board ancillary aquaculture vessels, and including farms on land.

3.4.2.5   The EESC proposes that the limitation on support to large enterprises for lifelong learning, dissemination of knowledge and innovative practices etc. should be removed, since the importance of all of these activities justifies the absence of restrictions based on the size of the enterprise. However, it considers that priority should be given to small and medium-sized enterprises.

3.4.2.6   To increase the potential of aquaculture sites, the EMFF may grant aid to identify and map the most suitable areas, to improve infrastructure and to prevent serious damage to aquaculture.

3.4.2.7   The EESC considers that it is necessary to grant support to investments aimed at improving infrastructure at the base ports for marine agriculture and at landing sites, as well as for investments in facilities for waste and litter collection.

3.4.2.8   Encouraging new aquaculture enterprises. The EMFF may grant support for the setting up of aquaculture micro-enterprises by new aquaculture farmers, provided that they enter the sector with adequate skills and competence, that they are setting up an aquaculture micro-enterprise for the first time as the head of that enterprise and that they submit a business plan concerning the development of their aquaculture activities.

3.4.2.9   The EESC proposes that this type of support should be linked to net job creation by any aquaculture enterprise, regardless of whether or not it is newly created.

3.4.2.10   In order to promote aquaculture with a high level of environmental protection, the EMFF may grant support to cover certain investments. The EESC believes that, as with fisheries, it is necessary to include support for investments to reduce emissions of pollutants or greenhouse gases, as well as for energy efficiency audits and programmes.

3.4.2.11   Support can also be granted for conversion to eco-management and audit schemes and organic aquaculture, for the provision of environmental services by the aquaculture sector and for public health, animal health and animal welfare measures.

3.4.2.12   The EESC believes that animal health is critical for the sustainability of the aquaculture sector and therefore considers it necessary to increase EMFF support in this area. It therefore proposes setting up and developing health protection groups in aquaculture, on the same lines as has been successfully done in terrestrial livestock farming.

3.4.2.13   The proposal provides for the possibility of granting support for stock insurance, covering certain losses. The EESC considers that this should include losses arising from the collection and destruction of animals which have died on the farm from natural causes, accidents etc., as well as for slaughter and burial on the farm itself for animal health reasons, subject to prior administrative authorisation.

3.4.3   Sustainable development of fisheries areas

3.4.3.1   The support provided under this heading will contribute to achieving the EU priority of fostering balanced and inclusive territorial development of fisheries areas, thus promoting an increase in employment and territorial cohesion. This support can be granted to fisheries areas at below NUTS 3 level (2).

3.4.3.2   The EESC considers it discriminatory that this support is ruled out for coastal municipalities with more than 100 000 inhabitants, since fleets are based in fishing ports regardless of the population of those municipalities.

3.4.3.3   The Commission proposes that fisheries local action groups (FLAGs) should be updated and strengthened, reflecting the socioeconomic composition of their areas with balanced representation of the private sector, public sector and civil society, to propose integrated local development strategies.

3.4.3.4   The EESC considers that if the outcome of the work done so far by these groups – whose goal is to reinvigorate coastal areas – is to be objectively evaluated, it is vital for the Commission to carry out such evaluations before the relevant support can be integrated into the new funds.

3.4.4   Marketing and processing

3.4.4.1   The Commission proposes certain measures connected to marketing and processing, particularly for the preparation and implementation of production and marketing plans by producer organisations.

3.4.4.2   Although the EESC supports this measure, which will help with the sustainability of stocks and the competitiveness of businesses, it also believes that it is necessary to add some sort of flexibility mechanism to the plans, since in our globalised market the conditions of supply and demand can change at any time.

3.4.4.3   The proposal provides for granting support to compensate producer organisations which store fisheries products listed in Annex II of the COM (common organisation of markets) regulation. This support will be progressively reduced and will end completely in 2019.

3.4.4.4   The EESC does not agree that such support should be progressively reduced and eliminated altogether in 2019, given its particularly important contribution to stabilising markets. The Committee therefore considers that it should be kept in place until 2020.

3.4.4.5   The Committee has noted that the compensatory allowances mechanism for tuna for processing, which has so far been provided for under the COM, has disappeared.

3.4.4.6   That mechanism was established in return for the complete and permanent suspension of Common Customs Tariff duties on whole tuna for processing from third countries. The Committee considers that the removal of the mechanism would leave EU production at a clear disadvantage, since it would have to compete with certain products whose hygiene and health requirements fall below those of the EU. The EESC therefore calls for the compensatory allowances mechanism to be maintained.

3.4.4.7   The EESC considers that the support for private storage that is envisaged by the proposal will not compensate tuna producers, nor ensure them a fair income, in the face of a fall in tuna prices in the EU market (which is what the system of compensatory allowances was set up to do).

3.4.4.8   The proposal provides that certain support can be granted for marketing measures.

3.4.4.9   The EESC considers that such support must be extended to the design and launch of communication campaigns aimed at improving the image of fishing and aquaculture. The EESC also proposes that new sections should be added, for example on organisation and participation in fairs and commercial events in the sector, activities to improve enterprises' access to innovation, and training on state of the art techniques and new or improved processes or organisation systems.

3.4.4.10   In view of the important role that inter-branch organisations play in promoting and improving the marketing of products, the Committee considers that support should be given not only for setting up such organisations but also to contribute to their operation, so that they can carry out the duties entrusted to them.

3.4.4.11   The EMFF may also support certain investments in the processing of products. The Committee considers that the following specific objectives should be added: improving the competitiveness of the processing industry; raising public health requirements and product quality; reducing the negative impact on the environment and improving energy efficiency; making better use of little-used species, by-products and waste; development, production and marketing of new products and use of new technologies and innovative production methods; opening up and developing markets; and improving the working conditions and training of workers.

3.4.5   Outermost areas

3.4.5.1   The proposal provides for compensation for the additional costs faced by fisheries and aquaculture products from the outermost regions of the Azores, Madeira, the Canary Islands, French Guiana and Réunion. The Committee considers that the Commission should provide a detailed explanation of the calculations behind the breakdown of the budget for each of the outermost regions and that it should also explain why the budget for the Canary Islands has been reduced while that for the other regions has been increased.

3.4.6   Accompanying measures for the CFP

3.4.6.1   The EMFF may grant support for the implementation of an EU control, inspection and enforcement system and for the collection, management and use of primary biological, technical, environmental and socioeconomic data in accordance with the CFP Regulation. The EESC considers that such support is essential to ensure control and the collection of data in the whole EU, including data relating to labour inspections.

3.4.6.2   The proposal provides that many of the measures mentioned above may only be granted once per programming period and per fishing vessel. This restriction should be removed.

3.4.6.3   The EESC considers that a "crisis fund" should be set up. Such a fund would make it possible to respond to one-off requirements in the sector, enabling flexible emergency measures to be launched in certain exceptional circumstances, such as, for example, reassignment of fleets due to the suspension or non-renewal of fisheries agreements, sudden increases in operating costs, natural disasters etc.

3.5   Measures financed under direct management

3.5.1   Integrated Maritime Policy

3.5.1.1   The proposal provides for a series of support measures to contribute to the development and implementation of the EU's IMP, in order to foster integrated governance of maritime and coastal affairs, contribute to the development of cross-sectoral initiatives that are mutually beneficial to different maritime sectors and sectoral policies, support sustainable economic growth, employment, innovation and new technologies within emerging and prospective maritime sectors in coastal regions, and promote the protection of the marine environment, in particular its biodiversity and marine protected areas, as well as sustainable exploitation of marine and coastal stocks. The Committee welcomes the proposed measures.

3.5.1.2   A series of support measures are also provided to facilitate the implementation of the CFP and the IMP, particularly in relation to scientific advice under the CFP, specific control and enforcement measures under the CFP, voluntary contributions to international organisations, Advisory Councils, market intelligence and communication activities. The Committee considers that this support is appropriate.

3.5.1.3   The Committee recognises the important role played by Regional Advisory Councils as bodies which can advise the Commission in relation to various issues connected with the CFP and in which all relevant stakeholders participate. The Committee therefore considers that this support needs to be sufficient to ensure that they function properly, in such a way as to ensure the participation of all members, including scientists.

3.5.1.4   The EESC believes that the EMFF should fund the future Sector Council on Employment and Skills, which is in line with the objectives of the CFP reform, the Europe 2020 strategy and the communication on "New skills for new jobs" (3). It should also continue to finance the EU Advisory Committee on Fisheries and Aquaculture; in the event that this committee should eventually be abolished, the EESC calls for a consultative committee on the industry, the market and general affairs to be set up.

3.5.1.5   As far as market intelligence is considered, the Committee considers any aid for the dissemination and development of market intelligence on the markets for fisheries and aquaculture products to be a good thing.

3.5.2   Technical assistance

3.5.2.1   The proposal provides that aid can be granted, at the initiative of the Commission, for the implementation of sustainable fisheries agreements and for EU participation in regional fisheries management organisations, and for setting up a European network of FLAGs. The Committee considers such support to be essential.

3.6   Implementation

3.6.1   Lastly, the proposal goes into a great deal of detail on the implementation of the support schemes under both shared and direct management, providing for implementation mechanisms, Member States and Commission management and control systems, and monitoring, evaluation, information and communication.

3.6.2   The EESC approves of the implementation systems under both shared and direct management, since they reflect the Commission's experience with all the formalities necessary for the launch, implementation, monitoring and conclusion of the support programmes provided for under the CFP and the IMP.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Opinion CESE (OJ C 181, 21.6.2012, pp. 183-195).

1

(2)  See Regulation (EC) No 1059/2003 of the European Parliament and of the Council of 26 May 2003 on the establishment of a common classification of territorial units for statistics (NUTS) (OJ L 154, 21.6.2003, p. 1).

2

(3)  See the EESC opinion on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: New Skills for New Jobs –Anticipating and matching labour market and skills needs, COM(2008) 868 final (OJ C 128, 18.5.2010, p. 74).

3

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: New Skills for New Jobs –Anticipating and matching labour market and skills needs

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/141 |
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4.10.2012

EN

Official Journal of the European Union

C 299/141

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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 Regions on promotion measures and information provision for agricultural products: a reinforced value-added European strategy for promoting the tastes of Europe’

COM(2012) 148 final

2012/C 299/25

Rapporteur: Mr KRAUZE

On 30 March 2012, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions on promotion measures and information provision for agricultural products: a reinforced value-added European strategy for promoting the tastes of Europe

COM(2012) 148 final.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 136 votes to 1 with 10 abstentions:

1.   Conclusions and recommendations

1.1   EU information and promotional programmes have an essential role to play in helping European producers and workers meet the challenges of an increasingly competitive world and ensure a good market position by explaining the high-quality, animal-welfare and production standards of EU agricultural products to consumers and stimulating exports.

1.2   As stated in its previous opinion on COM (2011) 436 final (1), the EESC supports the two fundamental aims of the new promotion policy, geared to the target market: consumer information and awareness on the EU market, and export promotion on the external market.

1.3   New, additional resources need to be identified as part of the 2014-2020 financial framework in order to address new crises and emergency situations that could hit the sector and which the appropriations for promotion and information policy under the CAP would not be able to cover. The EESC considers it absolutely crucial to increase the budget for information provision and promotion measures for agricultural products on the internal market and in third countries.

1.4   The EESC feels that the Commission should draw up clear guidelines for national, multi-country and third country programme applicants in the Member States. The evaluation of programmes should be improved, using a strict evaluation system with specific indicators. Greater transparency is needed in the selection and prioritising of programmes at national and EU levels. To simplify the procedure, multi-country programmes could be submitted by applicants directly to the Commission. Multi-country programmes that cover a number of products should be given priority through a more favourable financing scheme, providing up to 60 % EU co-financing

1.5   Greater flexibility should be introduced to allow programmes to be adapted to changing market conditions during the implementation phase. The EESC supports the proposal to present a multiannual framework programme, with detailed information for the first year only, in cases where the programmes in question are preceded by market analyses and impact assessments, thus making it possible to re-adjust the plans for subsequent years.

1.6   The EESC emphasises that promotion legislation should clarify the role of brands and the balance between generic promotion and the promotion of private brands. The basic idea of promoting EU products by means of specific brands should be examined. Product origin indication should be permitted, including for products that have not been granted a denomination of origin or a protected geographical indication. The concept of EU origin could be conveyed through umbrella slogans that do not jeopardise the consumer's right to be properly informed.

1.7   As regards the common European slogan for external marketing measures, it makes sense to convey a unified message, which groups together and covers all European products under the same umbrella. It is vital to send the consumer a clear message that is easy to identify.

1.8   The EESC advocates a single list of eligible products, with a view to simplifying procedures. The list should be extended to allow for the promotion of products within other quality schemes that deliver the European quality production message, for example national, regional and organic schemes.

1.9   The EESC feels it is essential to set up a network for the exchange of good practices between professionals, in order to implement well-structured, coordinated multi-country promotional programmes and campaigns, including by means of new technologies. Moreover, use of new technologies to put consumers and producers in contact should be examined. It will be necessary to prevent these mechanisms causing any distortion of the market or competition.

2.   Gist of the communication

2.1   To achieve the Europe 2020 goals, support must be given to a form of agriculture that guarantees food safety, the sustainable use of natural resources, the dynamism of rural areas, as well as growth and employment. An effective promotion policy is key to achieving these objectives.

2.2   Promotion programmes are co-financed on the basis of a maximum of 50 % contributed by the EU, a minimum of 20 % contributed by trade associations and the remainder contributed by the Member State. Often, however, the submission of programmes in non-EU countries has been lacking in ambition, with weaker and delayed impact.

2.3   The Commission communication sets out the shortcomings in current promotion measures, such as red tape, an imbalance in the actions taken and obstacles hindering progress. It then puts forward suggestions as to how to tackle these problems and enhance the image of European agricultural products.

2.4   The communication sets out the following objectives for the future promotion policy:

| — | greater European added value; |
| --- | --- |

—

greater European added value;

| — | a more appealing and assertive policy; |
| --- | --- |

—

a more appealing and assertive policy;

| — | simple management; and |
| --- | --- |

—

simple management; and

| — | greater synergy between the various promotion instruments. |
| --- | --- |

—

greater synergy between the various promotion instruments.

2.5   The Commission outlines guidelines for the promotion policy.

2.5.1   A wider scope of application

| — | The scope of the initiatives could be extended beyond sectoral trade organisations to include private enterprises, if they offer a high added value for the European Union. |
| --- | --- |

—

The scope of the initiatives could be extended beyond sectoral trade organisations to include private enterprises, if they offer a high added value for the European Union.

| — | It is proposed to have only one list of eligible products, following the list of products covered by the quality policy as closely as possible. Activities could deliver thematic messages and make widespread use of new technologies from enabling the exchange of good practices to facilitating the selling of products. |
| --- | --- |

—

It is proposed to have only one list of eligible products, following the list of products covered by the quality policy as closely as possible. Activities could deliver thematic messages and make widespread use of new technologies from enabling the exchange of good practices to facilitating the selling of products.

| — | To develop a European image of agri-food products, each information and consultation measure should include mention of the product's European origin. It will still be possible to state the origin of PDO and PGI products as the main indication. |
| --- | --- |

—

To develop a European image of agri-food products, each information and consultation measure should include mention of the product's European origin. It will still be possible to state the origin of PDO and PGI products as the main indication.

| — | The impact analysis should examine the possibility of launching mixed schemes on the external market that would include a generic section and a commercial section where private brands could be presented. |
| --- | --- |

—

The impact analysis should examine the possibility of launching mixed schemes on the external market that would include a generic section and a commercial section where private brands could be presented.

| — | There will be reinforced support for the promotion of European food quality symbols such as PDO, PGI and TSG labels. |
| --- | --- |

—

There will be reinforced support for the promotion of European food quality symbols such as PDO, PGI and TSG labels.

2.5.2   A wider scope of activity

| — | There should be a new type of activity consisting of technical assistance to help market operators participate in co-financed programmes, carry out efficient campaigns or develop their export activities. |
| --- | --- |

—

There should be a new type of activity consisting of technical assistance to help market operators participate in co-financed programmes, carry out efficient campaigns or develop their export activities.

2.5.3   Revised intervention methods

| — | This revision refers to multi-country programmes, which are currently not yielding the desired results. High-level missions to third countries involving the commissioner for agriculture and rural development and the participation of the Commission in international fairs will continue. |
| --- | --- |

—

This revision refers to multi-country programmes, which are currently not yielding the desired results. High-level missions to third countries involving the commissioner for agriculture and rural development and the participation of the Commission in international fairs will continue.

2.5.4   Promotion and the crisis

| — | Due to the constraints of the 2014-2020 financial framework, it would be more difficult to mobilise additional appropriations for information and promotion measures in response to crises. A decision is needed on whether funding for Community level response to a crisis should stem from the future promotion policy or from the horizontal measures under the CAP. |
| --- | --- |

—

Due to the constraints of the 2014-2020 financial framework, it would be more difficult to mobilise additional appropriations for information and promotion measures in response to crises. A decision is needed on whether funding for Community level response to a crisis should stem from the future promotion policy or from the horizontal measures under the CAP.

2.5.5   Simplified and optimised management

| — | The follow-up and management of programmes should be simpler, more flexible and more operational. |
| --- | --- |

—

The follow-up and management of programmes should be simpler, more flexible and more operational.

2.5.6   Greater consistency between information and promotion activities

| — | Measures carried out under the promotion scheme and other actions in this area will be more in tune with each other and with the common agricultural policy. |
| --- | --- |

—

Measures carried out under the promotion scheme and other actions in this area will be more in tune with each other and with the common agricultural policy.

3.   Analysis of the proposal and the Committee's comments

3.1   Earlier EESC opinions commented that in view of the challenges facing the European agricultural policy, it is increasingly important to promote EU agri-food products in order to help establish them as high added value products and maintain the EU's leading position as a food supplier (2).

3.2   The EESC stresses the importance of the two aims of the new European policy for the sector: firstly, consumer information and awareness regarding the high quality standards and high added value of products on the EU market, emphasising the more robust guarantees for production methods, labelling, traceability and food safety and the more stringent environmental and animal-welfare requirements and due regard for workers' rights; and secondly, export promotion on the external market, stressing the quality, nutritional and gastronomic value, sustainability and safety of European products.

3.3   The Committee endorses the Commission's move to revise current EU policy on information and promotion activities to make it more effective, targeted and ambitious.

3.4   The Committee broadly supports the proposals and guidelines set out by the Commission in its communication as regards future policy for promoting agricultural products for the purpose of improving the sector's competitiveness and raising awareness of the high standards of the European agri-food model.

3.5   The EESC notes that there is no reference in the Commission communication to provisions for an automatic or semi-automatic mechanism that could help economies hit by food crises recover and would be rapid, efficient, systematic and effective. While acknowledging the limitations resulting from the current financial crisis, the EESC considers it absolutely crucial to increase the budget for information provision and promotion measures for agricultural products on the internal market and in third countries. New, additional resources need to be identified in good time as part of the 2014-2020 financial framework, in order to address new crisis and emergency situations that could hit the sector and which the appropriations for promotion and information policy under the CAP would not be able to cover.

3.6   The EESC emphasises that programmes should have a European and added value-based vision, including a focus on job creation, and believes that the Commission should draw up clear guidelines for national, multi-country and third country programme applicants in the Member States. The evaluation of programmes should be improved, using a strict evaluation system with specific indicators. It is essential to introduce greater transparency into the selection and prioritising of programmes at national and EU levels. To simplify procedures, multi-country programmes could be submitted directly to the Commission, and selection processes should be speeded up at national and the EU levels.

3.7   Regarding the possibility to broaden the range of beneficiaries of promotional programmes, the EESC believes that priority should be given to trade organisations within the agri-food sector as they are the bodies that bring businesses together and co-finance operations. All other beneficiaries should be approved only on the recommendation of sectoral trade organisations.

3.8   Any sectoral trade organisation proposing a programme should have the opportunity to act as project manager, either solely or jointly, depending on the scale of the initiative, and the capacities and experience at its disposal. The possibility should be considered of allowing smaller branch associations from the new Member States to apply for promotional programmes as beneficiaries and as executive bodies because they have the best knowledge of their traditional products and how to promote them.

3.9   The EESC advocates a single list of eligible products with a view to simplifying procedures. The list of products covered by the legislation should be extended to allow for the promotion of all products that deliver the European quality production message or can strengthen it. For products with a strong national identity it might be an advantage and should be possible to indicate national origin even if they do not have the PDO or PGI label. However, the Committee feels that the arrangements for implementing these proposals should be balanced by the need to promote primarily EU products.

3.10   The Committee supports the proposal to establish a European platform for the exchange of good practices between professionals in the development and implementation of well-structured and coordinated multi-country promotional campaigns including through the use of new technologies, which can be a valuable tool here. Special attention should be given to ensure that the use of these mechanisms does not lead to the distortion of markets or competition.

3.11   With regard to ways of improving the quality programmes and designing them to cover several countries, the EESC agrees that these multi-country programmes should be given priority because they provide a truly European dimension and require the EU's support. The EESC suggests that the Commission should increase its contribution especially where emerging markets are involved.

3.12   The Committee welcomes the proposal to allow programme promoters to give detailed information for the first year of implementation only, where the programmes in question are preceded by market analyses and impact assessments setting out the potential for achieving the objectives, and to provide details for the subsequent years at a later point. This would make programmes more flexible and enable them to react to market signals.

3.13   In addition to the European food quality schemes mentioned in the communication (the PDO, PGI and TSG), other quality schemes could be envisaged, to relate, for example, to organic production and regional quality.

3.14   The EESC believes that promotion legislation should clarify the role of brands and the balance between generic promotion and the promotion of private brands, particularly in non-EU countries. This would contribute to the efficiency of promotional campaigns (greater impact vis-à-vis importers and consumers) and provide greater incentives for participation by businesses which, in the final analysis, co-fund these actions. With a view to ensuring complete and transparent information, mentioning product origin should be permitted, including for products that have not been granted a denomination of origin or a protected geographical indication. The concept of EU origin could be conveyed through umbrella slogans that do not jeopardise the consumer's right to be properly informed.

3.15   From the point of view of simplification, the idea of reconciling the budget across the various promotion programmes should be supported.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  CESE, OJ C 43, 15.02.2012, p. 59-64.

1

(2)  CESE 1859/2011, OJ C 43, 15.02.2012, p. 59-64.

2

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/145 |
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4.10.2012

EN

Official Journal of the European Union

C 299/145

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multiannual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks’

COM(2012) 155 final — 2012/0077 (COD)

2012/C 299/26

Rapporteur working without a study group: Seppo KALLIO

On 18 April 2012 the European Parliament and on 24 April 2012 the Council decided to consult the European Economic and Social Committee, under Article 43(2) of the Treaty on the Functioning of the European Union, on the

Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multi-annual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks

COM(2012) 155 final — 2012/0077 (COD).

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 141 votes and 10 abstentions.

1.   Conclusions and recommendations

| 1.1 | The EESC is very pleased with the success of the plan for the Baltic cod stocks and feels that it is important that the plan be extended. |
| --- | --- |

1.1

The EESC is very pleased with the success of the plan for the Baltic cod stocks and feels that it is important that the plan be extended.

| 1.2 | The EESC believes that the proposed amendments to Articles 4, 5 and 8 and to Article 29(2), (3) and (4) are acceptable and necessary technical changes to comply with the TFEU. |
| --- | --- |

1.2

The EESC believes that the proposed amendments to Articles 4, 5 and 8 and to Article 29(2), (3) and (4) are acceptable and necessary technical changes to comply with the TFEU.

| 1.3 | The EESC is not in favour of delegating legislative power to the Commission to determine fishing mortality rates, as proposed in Articles 27 and 29 a. The EESC considers that it is the privilege of the Council to take decisions in this area under Article 43(3) TFEU. |
| --- | --- |

1.3

The EESC is not in favour of delegating legislative power to the Commission to determine fishing mortality rates, as proposed in Articles 27 and 29 a. The EESC considers that it is the privilege of the Council to take decisions in this area under Article 43(3) TFEU.

2.   Introduction

| 2.1 | According to reports by the International Council for the Exploration of the Sea (ICES), Baltic cod stocks were overfished in the early 2000s. In ICES subdivisions 25–32, the fishing mortality rate for eastern Baltic cod had reduced the stock to a level at which it was in danger of collapsing. The western Baltic cod stock in ICES subdivisions 22–24 was in slightly better condition, but stock yield was clearly below its long-term potential level. That was why a multi-annual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks was established by Council Regulation (EC) No 1098/2007 on 18 September 2007. The purpose of the plan was to ensure that Baltic cod stocks could be exploited under sustainable economic, environmental and social conditions. |
| --- | --- |

2.1

According to reports by the International Council for the Exploration of the Sea (ICES), Baltic cod stocks were overfished in the early 2000s. In ICES subdivisions 25–32, the fishing mortality rate for eastern Baltic cod had reduced the stock to a level at which it was in danger of collapsing. The western Baltic cod stock in ICES subdivisions 22–24 was in slightly better condition, but stock yield was clearly below its long-term potential level. That was why a multi-annual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks was established by Council Regulation (EC) No 1098/2007 on 18 September 2007. The purpose of the plan was to ensure that Baltic cod stocks could be exploited under sustainable economic, environmental and social conditions.

| 2.2 | To achieve this objective, the plan laid down rules for the establishment of the annual fishing opportunities for the stock in terms of total allowable catch and fishing effort. These rules include a fishing mortality parameter based on annual scientific recommendations and used to determine a stock's viability. Furthermore, Article 27 of the Regulation stipulated that the Council determines the fishing mortality rate by qualified majority and based on a proposal by the Commission to ensure that the plan's management objectives can be met. Similarly, Article 26 made it possible for the Council to modify the plan to ensure that the objectives are met. |
| --- | --- |

2.2

To achieve this objective, the plan laid down rules for the establishment of the annual fishing opportunities for the stock in terms of total allowable catch and fishing effort. These rules include a fishing mortality parameter based on annual scientific recommendations and used to determine a stock's viability. Furthermore, Article 27 of the Regulation stipulated that the Council determines the fishing mortality rate by qualified majority and based on a proposal by the Commission to ensure that the plan's management objectives can be met. Similarly, Article 26 made it possible for the Council to modify the plan to ensure that the objectives are met.

| 2.3 | The plan's implementation has been a success. The fishing mortality rate of both Baltic cod stocks is below the target level in the current plan. Fishing mortality for the eastern Baltic cod stock is also below the maximum sustainable yield (MSY), and its spawning stock has almost quadrupled since the plan has been in place. The trend for the western Baltic cod stock has been more gradual, but it is clearly moving in the right direction. |
| --- | --- |

2.3

The plan's implementation has been a success. The fishing mortality rate of both Baltic cod stocks is below the target level in the current plan. Fishing mortality for the eastern Baltic cod stock is also below the maximum sustainable yield (MSY), and its spawning stock has almost quadrupled since the plan has been in place. The trend for the western Baltic cod stock has been more gradual, but it is clearly moving in the right direction.

3.   Commission proposal

| 3.1 | The purpose of the Commission's proposal is to amend Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multi-annual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks. This act was adopted prior to the entry into force of the Treaty on the Functioning of the European Union (TFEU), and it therefore needs to be amended in accordance with the new Treaty. |
| --- | --- |

3.1

The purpose of the Commission's proposal is to amend Council Regulation (EC) No 1098/2007 of 18 September 2007 establishing a multi-annual plan for the cod stocks in the Baltic Sea and the fisheries exploiting those stocks. This act was adopted prior to the entry into force of the Treaty on the Functioning of the European Union (TFEU), and it therefore needs to be amended in accordance with the new Treaty.

| 3.2 | Article 290 TFEU provides that a legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act. The Commission is proposing that the decision-making procedure foreseen in Article 26 and 27 of the Regulation be converted into a system of delegated powers to be exercised by the Commission in order to monitor the plan and fishing mortality targets. |
| --- | --- |

3.2

Article 290 TFEU provides that a legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act. The Commission is proposing that the decision-making procedure foreseen in Article 26 and 27 of the Regulation be converted into a system of delegated powers to be exercised by the Commission in order to monitor the plan and fishing mortality targets.

| 3.3 | The plan requires evaluation of the impact of the management measures on the stocks and fisheries concerned every three years. This requirement is very difficult to comply with due to the limited availability of relevant data needed to carry out a proper assessment. According to scientific advice, a full evaluation of the three-year performance of the plan cannot be carried out until five years after the plan is introduced. Consequently, the timeline for evaluating the plan should be modified. |
| --- | --- |

3.3

The plan requires evaluation of the impact of the management measures on the stocks and fisheries concerned every three years. This requirement is very difficult to comply with due to the limited availability of relevant data needed to carry out a proper assessment. According to scientific advice, a full evaluation of the three-year performance of the plan cannot be carried out until five years after the plan is introduced. Consequently, the timeline for evaluating the plan should be modified.

| 3.4 | The Commission also proposes that it be given implementing powers to confirm whether the conditions established in Article 29 on removing certain Baltic areas from the scope of measures are fulfilled. |
| --- | --- |

3.4

The Commission also proposes that it be given implementing powers to confirm whether the conditions established in Article 29 on removing certain Baltic areas from the scope of measures are fulfilled.

| 3.5 | Additionally, the Commission and Member States signed up to the aim of achieving a maximum sustainable yield (MSY) for depleted stocks by 2015 at the latest, but this is not stated as an objective of the plan. To avoid any ambiguities in the plan, it should include a reference to the MSY. |
| --- | --- |

3.5

Additionally, the Commission and Member States signed up to the aim of achieving a maximum sustainable yield (MSY) for depleted stocks by 2015 at the latest, but this is not stated as an objective of the plan. To avoid any ambiguities in the plan, it should include a reference to the MSY.

| 3.6 | Articles 5 and 8 establishing the total allowable catch (TAC) for cod stocks and maximum number of days absent from port should be amended accordingly to clarify that the procedure at issue is that provided for by the Treaty. |
| --- | --- |

3.6

Articles 5 and 8 establishing the total allowable catch (TAC) for cod stocks and maximum number of days absent from port should be amended accordingly to clarify that the procedure at issue is that provided for by the Treaty.

4.   Specific comments

| 4.1 | The EESC is very pleased with the success of the plan for the Baltic cod stocks and feels that it is important that the plan be extended. |
| --- | --- |

4.1

The EESC is very pleased with the success of the plan for the Baltic cod stocks and feels that it is important that the plan be extended.

| 4.2 | The Commission proposal amends the plan's objectives, in Article 4. The EESC considers the proposed reference to maximum sustainable yield (MSY) to be in line with the common EU target for fish stocks. |
| --- | --- |

4.2

The Commission proposal amends the plan's objectives, in Article 4. The EESC considers the proposed reference to maximum sustainable yield (MSY) to be in line with the common EU target for fish stocks.

| 4.3 | The Commission proposes to amend Articles 5 and 8 of the plan, replacing qualified majority decisions by the Council with decisions that comply with the new Treaty. These are technical changes reflecting the change in the decision-making procedure introduced by the TFEU. |
| --- | --- |

4.3

The Commission proposes to amend Articles 5 and 8 of the plan, replacing qualified majority decisions by the Council with decisions that comply with the new Treaty. These are technical changes reflecting the change in the decision-making procedure introduced by the TFEU.

| 4.4 | With respect to Article 26, the Commission proposes that evaluation of the plan take place at five-year intervals. The EESC accepts the reasons given for this, but observes that the state of cod stocks should be monitored annually with reference to the plan in connection with ICES fish stock assessments. |
| --- | --- |

4.4

With respect to Article 26, the Commission proposes that evaluation of the plan take place at five-year intervals. The EESC accepts the reasons given for this, but observes that the state of cod stocks should be monitored annually with reference to the plan in connection with ICES fish stock assessments.

| 4.5 | In view of the current decision-making procedure, the Commission proposes amending Article 29 (2), (3) and (4) to allow it to grant exemptions to catch limits. Under the proposal, the Commission would confirm the exemptions each year by means of implementing acts, and a committee of Member State representatives would assess and issue a report on the matter. The EESC is in favour of expanding the Commission's remit in this area, but stresses that draft decisions should be submitted early enough for an assessment to be carried out before the following fishing period. |
| --- | --- |

4.5

In view of the current decision-making procedure, the Commission proposes amending Article 29 (2), (3) and (4) to allow it to grant exemptions to catch limits. Under the proposal, the Commission would confirm the exemptions each year by means of implementing acts, and a committee of Member State representatives would assess and issue a report on the matter. The EESC is in favour of expanding the Commission's remit in this area, but stresses that draft decisions should be submitted early enough for an assessment to be carried out before the following fishing period.

| 4.6 | The proposal amends Articles 27 and 29 to give the Commission the power to adopt delegated acts. The EESC has expressed its view on this matter in earlier opinions (1). Those opinions note that the power to adopt delegated acts must be subject to a time limit. Furthermore, delegated acts should be reserved for areas where decisions need to be reached quickly. |
| --- | --- |

4.6

The proposal amends Articles 27 and 29 to give the Commission the power to adopt delegated acts. The EESC has expressed its view on this matter in earlier opinions (1). Those opinions note that the power to adopt delegated acts must be subject to a time limit. Furthermore, delegated acts should be reserved for areas where decisions need to be reached quickly.

| 4.7 | The proposal in Article 29 a to empower the Commission to adopt delegated acts on the basis of Articles 26 and 27 would significantly alter the principles of EU fisheries policy making. The delegation of power is justified by the present slow pace of joint decision-making by the Commission and the Parliament. The EESC considers that a solution to this problem should first be sought through clarification of the distribution of authority between the Parliament and the Council under Article 43(2) and (3) TFEU. The EESC's understanding is that the fishing mortality rate determined in accordance with Article 27 of the plan is directly linked to the fixing and allocation of fishing opportunities, i.e. it falls within the sole competence of the Council in accordance with Article 43(3) of the TFEU. |
| --- | --- |

4.7

The proposal in Article 29 a to empower the Commission to adopt delegated acts on the basis of Articles 26 and 27 would significantly alter the principles of EU fisheries policy making. The delegation of power is justified by the present slow pace of joint decision-making by the Commission and the Parliament. The EESC considers that a solution to this problem should first be sought through clarification of the distribution of authority between the Parliament and the Council under Article 43(2) and (3) TFEU. The EESC's understanding is that the fishing mortality rate determined in accordance with Article 27 of the plan is directly linked to the fixing and allocation of fishing opportunities, i.e. it falls within the sole competence of the Council in accordance with Article 43(3) of the TFEU.

| 4.8 | The plan for the Baltic cod stocks is also designed to ensure stable fishing opportunities, based on which commercial fishing companies can develop their fishing activities with a sense of certainty. The EESC fears that if the Commission is delegated the power to change the target fishing mortality rate, on which basis catch quotas are determined, this could in the short term lead to a rapid change in catch quotas that would be damaging to the fishing industry. |
| --- | --- |

4.8

The plan for the Baltic cod stocks is also designed to ensure stable fishing opportunities, based on which commercial fishing companies can develop their fishing activities with a sense of certainty. The EESC fears that if the Commission is delegated the power to change the target fishing mortality rate, on which basis catch quotas are determined, this could in the short term lead to a rapid change in catch quotas that would be damaging to the fishing industry.

| 4.9 | Another reason for the Council to retain decision-making responsibility for the target fishing mortality rates applied in the plan is the change in the principles underlying scientific advice from one year to the next. Scientific advice does not take into account the need for socio-economic stability. A change in the principles or methods of calculation can significantly alter the resulting target fishing mortality rate recommended by researchers, without there having been any noteworthy change in the fish stock. |
| --- | --- |

4.9

Another reason for the Council to retain decision-making responsibility for the target fishing mortality rates applied in the plan is the change in the principles underlying scientific advice from one year to the next. Scientific advice does not take into account the need for socio-economic stability. A change in the principles or methods of calculation can significantly alter the resulting target fishing mortality rate recommended by researchers, without there having been any noteworthy change in the fish stock.

| 4.10 | The EESC also notes the current efforts to develop a common model for regulating Baltic cod and pelagic species. A plan based on this model will eventually replace the multi-annual plan for the Baltic cod stocks, and there is no reason to make other than necessary changes to the current plan, which is generating positive results. |
| --- | --- |

4.10

The EESC also notes the current efforts to develop a common model for regulating Baltic cod and pelagic species. A plan based on this model will eventually replace the multi-annual plan for the Baltic cod stocks, and there is no reason to make other than necessary changes to the current plan, which is generating positive results.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  CESE, OJ C 107, 6.4.2011, p. 33-36 and CESE, OJ C 43, 15.2.2012, p. 56-59.

1

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/148 |
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4.10.2012

EN

Official Journal of the European Union

C 299/148

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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 — High-Performance Computing: Europe’s place in a Global Race’

COM(2012) 45 final

2012/C 299/27

Rapporteur: Ms CAÑO AGUILAR

On 18 April 2012 the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the:

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — High-Performance Computing: Europe's place in a Global Race

COM(2012) 45 final.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the EESC's work on the subject, adopted its opinion on 25 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 143 votes to 1 with 3 abstentions.

1.   Summary and recommendations

1.1   Overall, the EESC endorses the Commission's Communication and strongly supports its objectives. High Performance Computing (HPC) is essential to knowledge advancement and is the basis for the development of many innovative products, processes and services.

1.2   HPC is included within the Digital Agenda and is a vital instrument in today's research and economies where it is relevant to energy, climate, health, social, economic and defence policies. HPC has strategic importance for the Europe 2020 Strategy.

1.3   The EESC supports the development of a European HPC eco-system and the PRACE research infrastructure set up to this end, which is intended to ensure the wide availability of HPC resources on equal access terms for all potential users and actors in the EU, especially those from universities and SMEs.

1.4   In addition to the financial and contract-law aspects of an efficient HPC eco-system, two other tasks are equally important in developing HPC further. These are the development of next-generation computer hardware (exascale computers) and the development and dissemination of the very advanced instruments necessary for their use, i.e. the software. Both these areas should given equal attention.

1.5   The EESC supports the proposal to double the EU's current HPC investment to EUR 1,2 bn per year. This means that an additional EUR 600 m. is required, which would be mainly provided by the EU, the Member States and industrial users. This would bring the amount invested by the EU up to the level of other regions of the world. Approximately half of this increased investment should be spent on the procurement of HPC systems and test beds and the remaining half split equally between training and the development and up-scaling of HPC software.

1.6   This will require research institutes and universities to work with industry. The Committee believes that public-private partnerships, a tried and tested tool, are especially suitable here. Pre-commercial procurement could also be considered in individual cases, but the Commission certainly should not require this as the only choice.

1.7   The Member States and the EU would also need to provide substantial support for this. These resources are needed both directly - to accomplish the tasks described above for the further development of an efficient HPC system, and indirectly to train the high and medium-level specialist staff needed, i.e. universities and their staff.

1.8   Against the background of the economic and financial crisis, the Committee urges the Council and the Member States not to neglect the measures needed for HPC, which are needed to boost the economy and competitiveness. There would otherwise be a risk of precipitating a dangerous downwards spiral.

1.9   The Committee believes that the main priority is a competitive HPC system in Europe and for Europe. This objective does not imply a protectionist industrial policy. Rather, the focus should be on developing and using the necessary know-how, and maintaining or creating jobs and decision-making levels needed for HPC development and use in Europe. Further joint ventures with today's leading global players in technology who also operate or are engaged in R&D in Europe and with European companies possessing state-of-the-art expertise in specific HPC segments could at the same time create the critical mass needed to compete with China's expected future market leadership.

2.   Gist of the Commission Communication

2.1   The Communication highlights the strategic importance of High-Performance Computing (HPC) (High-performance computing (HPC) is used in the Communication as a synonym for high-end computing, supercomputing, world-class computing, etc., to differentiate it from distributed computing, cloud computing and compute servers.). It builds on the Communication on ICT Infrastructures for e-Science and the conclusions of the Council asking for "further development of computing infrastructures such as the Partnership for Advanced Computing in Europe (PRACE www.prace-ri.eu)" and to "pool investments in high-performance computing under PRACE".

2.2   The Committee calls on Member States, industry and the scientific communities, in cooperation with the Commission, to step up joint efforts to ensure European leadership in the supply and use of HPC systems and services by 2020.

2.3   HPC systems are being developed to make it possible to address societal and scientific grand challenges more effectively, such as early detection and treatment of diseases, deciphering the human brain, forecasting climate evolution or preventing large-scale catastrophes, and to cater for the needs of industry to innovate in products and services.

2.4   The challenges facing the development of even more powerful HPC systems cannot be met by mere extrapolation, but require radical innovation in many technologies. Industrial and academic players in the EU have the opportunity to reposition themselves in the field.

2.5   The EU invests substantially less on acquiring high-end computing systems than other regions (only half compared to the US, at a similar level of GDP). Consequently, the amount and performance of computing systems available in the EU are simply too low compared to other world regions, and R&D budgets devoted to HPC are tight.

2.6   The rest of the Communication covers:

| — | the Partnership for Advanced Computing in Europe (PRACE), |
| --- | --- |

—

the Partnership for Advanced Computing in Europe (PRACE),

| — | Europe's expertise in the supply chain, |
| --- | --- |

—

Europe's expertise in the supply chain,

| — | the benefits for Europe of re-engaging in HPC, |
| --- | --- |

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the benefits for Europe of re-engaging in HPC,

| — | the challenges ahead, |
| --- | --- |

—

the challenges ahead,

| — | an HPC action plan for Europe, |
| --- | --- |

—

an HPC action plan for Europe,

| — | governance at EU Level, |
| --- | --- |

—

governance at EU Level,

| — | pre-commercial procurement mechanisms and pooling of resources, |
| --- | --- |

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pre-commercial procurement mechanisms and pooling of resources,

| — | further developing the European HPC eco-system. |
| --- | --- |

—

further developing the European HPC eco-system.

3.   General comments

3.1   Overall endorsement

3.1.1   Overall, the EESC endorses the Commission's Communication and strongly supports its objectives. Many new products, processes and services are developed on the basis of high-performance computing, which is not only one of the most important key technologies, but also essential to being able to research complex systems. HPC is, therefore, a key component of the Europe 2020 Strategy.

3.1.2   By developing and using increasingly powerful computers, HPC has become a major third pillar for research and development in recent decades, not only complementing the "conventional" pillars of experimentation (including demonstration and testing) and theory, but also becoming an integral part of them, leading to the emergence of the new field of simulation science. HPC is also an important tool for obtaining complex data and for analysis and forecasting systems. HPC is included within the Digital Agenda and has become a vital instrument in today's research and economies, where it is relevant to energy, climate, health, economic, social and defence policies.

3.2   Supercomputers

The key hardware used in HPC is made up of "supercomputers", which display two specific features:

| — | they can only achieve full performance by running a huge number of individual computers (processors) simultaneously, i.e. in parallel. In fact, supercomputers are now being designed with up to a million separate processors. In order to make optimum use of such highly complex computers, extremely advanced and complex software must be developed and made available to users This is a very specialised development task that has so far been widely undervalued; |
| --- | --- |

—

they can only achieve full performance by running a huge number of individual computers (processors) simultaneously, i.e. in parallel. In fact, supercomputers are now being designed with up to a million separate processors. In order to make optimum use of such highly complex computers, extremely advanced and complex software must be developed and made available to users This is a very specialised development task that has so far been widely undervalued;

| — | the power requirements for even more powerful computers are increasing to levels which are currently thought to be unachievable. Unless completely new components are developed that will reduce power requirements by 99 %(!), a new-generation supercomputer (exascale computer) would need at least one power station of its own with an output of 1 000 MW in order to function. Reducing these power needs to more realistic levels is a huge technological challenge which does not seem easy to achieve. |
| --- | --- |

—

the power requirements for even more powerful computers are increasing to levels which are currently thought to be unachievable. Unless completely new components are developed that will reduce power requirements by 99 %(!), a new-generation supercomputer (exascale computer) would need at least one power station of its own with an output of 1 000 MW in order to function. Reducing these power needs to more realistic levels is a huge technological challenge which does not seem easy to achieve.

3.3   Aspects of a European support policy

In the EESC's opinion, the Communication addresses not so much the scientific and technical challenges as the European support and development policy which the Commission considers necessary in order to meet them, and proposals for the instruments that can be used to achieve this. However, the EESC has some reservations in this regard and recommends that a further round of consultations be conducted (see point 4.4).

3.4   Hardware-software balance

One of the EESC's main recommendations is to examine software aspects as an equally vital part of the problem more intensively and to prepare solutions, particularly with regard to developing, testing and disseminating the necessary software for users. There is a considerable need for research, development, education and training for the different levels of qualification systems and users. This means that sufficient support is needed for the corresponding measures in universities, research centres and industry. The EESC recommends that the Commission remedy this shortcoming.

3.5   Skilled staff – universities and resources

In this regard, one major hindrance lies in the training and availability of sufficiently skilled staff, for example, http://www.hpcwire.com/hpcwire/2012-04-04/supercomputing_education_in_russia.html, not only for the necessary R&D tasks but also in order to operate HPC systems effectively. These aspects should be taken into account within the support measures. Essential to this are universities with sufficient financial and human resources, where a sufficient number of internationally recognised software experts and development engineers teach and carry out research, and where, on the basis of R&D experience, high-level training can be offered.

3.6   European HPC eco-system: PRACE

3.6.1   What is PRACE?

The need for a European HPC infrastructure which can be used by all partners was recognised and promoted by the operators and users of national HPC centres in 2005. Representatives of 14 European countries initially founded the PRACE partnership, which aimed to promote, use and further develop HPC in Europe.

This resulted in HPC being selected as one of the first ESFRI list Research Infrastructures (1). After the legal, financial, organisational and technical conditions had been established, in 2010 PRACE AISBL (International non-profit making association) was founded with its headquarters in Brussels. It aims to provide users from all the partners with access to Europe's five most powerful nationally-established HPC systems. PRACE currently has 24 members, including members from Israel and Turkey. PRACE is receiving funding for three projects in FP7, in particular for work on porting, optimisation and petascaling of applications and for intensive user training and education. Currently, four partner countries (Germany, France, Italy and Spain) have each agreed to provide computing power to the value of EUR 100 million each. An independent Scientific Steering Committee determines the allocation of user quotas in a pan-European peer review process.

3.6.2   Committee position on PRACE

The EESC supports the further development of a European HPC eco-system and the research infrastructure set up to this end, which ensures, or is intended to ensure, the wide availability of HPC resources on equal access terms. It is to be ensured that all potential EU users and actors, especially those in universities or SMEs who are not directly connected to the PRACE organisation, are able to cooperate in developing and using resources on equal terms with all other stakeholders. In principle, the issue is not only the more straightforward and no doubt soluble problem of creating equal access conditions for existing HPC resources, but also that of researching, developing and finally acquiring a completely new HPC eco-system which would be many orders of magnitude more powerful, using exascale computers (see point 4.1 below) at its hub and including the development of the advanced software suited to it. In this regard, the EESC recommends avoiding rushed concentration processes and decisions regarding a specific common system in order to allow for the competition and multiplicity of possible approaches and ideas required for the eco-system to succeed and to achieve the highly ambitious aim that has been set. This delicate issue of balanced research, development and competition policies is covered in the specific comments below. In this regard, the EESC sees a need for fresh discussions among the potential stakeholders.

3.7   Appeal to the Council and Member States

3.7.1   The economic crisis in many EU Member States means that there is an understandable tendency to make savings in training, research and development. This would, however, result in a disastrous downwards spiral, as it is precisely these new technologies, innovations and related skills which will be needed to boost economic growth and competitiveness.

3.7.2   The Committee therefore strongly urges the Council and all Member States not to fall back on the easier option, but to invest instead in new developments and the conditions they require and, in order to safeguard future prospects, provide increased support rather than make cutbacks.

4.   Specific comments of the Committee

4.1   The Exascale Project

The development of the next generation of supercomputers has been dubbed the "Exascale Project". To this end, it is necessary to decisively improve, and probably completely redevelop, the individual components which determine power consumption at all levels of the common system. This is a difficult task when it comes to cooperation between research centres and industry, with their conflicting demands.

4.2   Cooperation between research centres and business

The EESC has already expressed its views on this complicated subject area on several occasions (for example, see CESE 330/2009), including in its recent opinion (CESE 806/2012) on Horizon 2020 in which it recommended that "new approaches to industrial and competition policy should therefore be considered.

It is questionable here whether ‧pre-commercial procurement‧ would provide a suitable instrument for cooperation between research centres and business. The Committee therefore recommends that the different objectives, which are sometimes mutually incompatible, and requirements of research policy, innovation policy and industrial policy should be identified, and discussed and clarified with the various stakeholders. Special arrangements may even be needed in certain cases" (see also point 4.4 of this draft opinion).

4.3   Development efforts for the Exascale Project

In the specific case of the Exascale Project it will be necessary, in accordance with modern R&D practice, to involve both large and small companies, including the most successful global players (see also point 4.5) from the various areas (such as processors and the many other components) in partnerships between the research sector and industry, and at the same time to avoid any hasty decisions. It will only be possible to draw up an optimised blueprint for a common system once it is known what components have been or could be developed, and how they perform. Unfortunately, there have been cases in the past when this aspect was overlooked, resulting in failure.

4.4   Support approach - Public Private Partnerships

Given the great importance of having an efficient HPC system in Europe and for Europe, the Committee therefore recommends that the Commission, in cooperation with the many possible stakeholders (particularly members of the PRACE platform), develop and jointly propose the desired support approach before implementing the initiatives described in the Communication under review. The Committee believes that in particular public-private partnerships (PPPs) are a tried and tested instrument which have already proved themselves being a suitable instrument for achieving HPC development objectives. Therefore pre-commercial procurement, favoured in the Commission proposal, whilst possibly appropriate in individual cases, ought not to be imposed generally.

4.5   Global players

To this end, it should be made clear that the main priority is to obtain a powerful, competitive HPC system in Europe and for Europe. As this sector so far is dominated by global players (like IBM, CRAY or INTEL) whose holdings, manufacturing facilities and research centres are spread throughout the world, the EESC believes it is important in these circumstances that the know-how needed for the development and use of HPC and the corresponding jobs and decision-making levels also exist in Europe or be established. Further cooperation with today's leading firms but also with emerging companies that might become tomorrow’s leaders could, for example, also create the critical mass needed to withstand China's expected future market leadership.

4.6   Greater financial resources

The EESC supports the proposal to double Europe's current HPC investment to EUR 1,2 bn per year. This means that an additional EUR 600 m. is required, which would be mainly provided by the EU, the Member States and industrial users. This would bring the amount invested by the EU up to the level of other regions of the world. Approximately half of this increased investment should be spent on the procurement of HPC systems and test beds and the remaining half split equally between training and the development and up-scaling of HPC software.

The high financial requirements are linked to the high cost of HPC. A high performance computer costs over EUR 100 m, while system maintenance and operation cost at least an additional EUR 20 m per year. This calls for public-private partnerships, examples of which already exist in the countries leading the HPC field.

4.7   Equal opportunities and intellectual property rights

The Communication sets out the great difficulty that European HPC manufacturers have in selling their products to the public sector in non-EU countries with national manufacturers. When it comes to using HPC for highly strategic areas (such as nuclear energy, defence industry, oil and gas industries), meeting the security requirements is virtually impossible. However, the European research projects developed in the context of the Framework Programme could indirectly benefit companies in non-EU countries.

Bearing in mind that all the contracting parties to the WTO Government Procurement Agreement must honour the provisions relating to national treatment and non-discrimination (Article III), the EESC supports the Commission's intention to raise the issue of equal access to the HPC market in trade relations with non-EU countries.

The Committee therefore supports the intentions to clarify and defend intellectual property rights set out in the Commission proposal on Horizon 2020 (COM(20011) 809 final, 30.11.2011)

4.8   HPC and power consumption

The challenges for the future will include power consumption as a factor limiting the development of HPC (The Greening of HPC - Will Power Consumption Become the Limiting Factor for Future Growth in HPC? Munich, 10 October, 2008. http://www.hpcuserforum.com/presentations/Germany/EnergyandComputing_Stgt.pdf.) (see also point 3.2). Using current technologies, exascale systems will consume vast quantities of power that will increase operating costs (it is estimated that power will account for 50 % of these) and environmental pollution.

Various proposals have been made to achieve energy-efficient technologies, such as hybrid computers, although these raise other issues ("(...) Progress in lower-power devices may make it feasible to build future systems with Exascale performance. (...) However (...) how do we exploit (...) this disruptive technology?"A Strategy for Research and Innovation Trough High Performance Computing, University of Edinburgh 2011). When it comes to the architecture, for instance, many energy-saving strategies have been developed, such as the definition of islands with different voltages (which can even be switched off), or the use of low-power memories (with drowsy cache cells) and the selective switch-off of units. In processors, multi-core, multi-thread and cluster architectures can help achieve a balance between computing power and the objective of reduced energy consumption and heat generation (Green IT: Tecnologías para la Eficiencia Energética en los Sistemas TI, Universidad Politécnica de Madrid, 2008).

The EESC therefore suggests making support for energy-saving technologies an integral part of the EU's HCP project.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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(1)  Cf. OJ C 182, 4.8.2009, p. 40.

1

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/153 |
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4.10.2012

EN

Official Journal of the European Union

C 299/153

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Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and the Council amending Directive 2009/16/EC on port State control’

COM(2012) 129 final — 2012/62 (COD)

and the ‘Proposal for a Directive of the European Parliament and the Council concerning flag State responsibilities for the enforcement of Council Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention, 2006, and amending Directive 1999/63/EC’

COM(2012) 134 final — 2012/65 (COD)

2012/C 299/28

Rapporteur: Dr BREDIMA

On 29 March the European Parliament and on 11 April 2012 the Council decided to consult the European Economic and Social Committee, under Article 100, paragraph 2, of the Treaty on the Functioning of the European Union, on the

Proposal for a Directive of the European Parliament and the Council amending Directive 2009/16/EC on port State control

COM(2012) 129 final — 2012/62 (COD)

and the

Proposal for a Directive of the European Parliament and the Council concerning flag State responsibilities for the enforcement of Council Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention, 2006, and amending Directive 1999/63/EC

COM(2012) 134 final — 2012/65 (COD).

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 141 votes with 6 abstentions.

1.   Conclusions

| 1.1 | The Maritime Labour Convention (MLC) 2006 of the International Labour Organization (ILO) is the first Maritime Labour Code internationally characterised as the "Fourth Pillar" of the leading maritime conventions. The EESC welcomes the proposals aimed at establishing the necessary procedures to ensure its effective implementation by EU Member States acting both as flag States and port States. |
| --- | --- |

1.1

The Maritime Labour Convention (MLC) 2006 of the International Labour Organization (ILO) is the first Maritime Labour Code internationally characterised as the "Fourth Pillar" of the leading maritime conventions. The EESC welcomes the proposals aimed at establishing the necessary procedures to ensure its effective implementation by EU Member States acting both as flag States and port States.

| 1.2 | The MLC – the Seafarers' Bill of Rights – aims at ensuring comprehensive worldwide protection of the rights of seafarers and establishing a level playing field for countries and shipowners committed to providing decent working and living conditions and protecting them from unfair competition from substandard ships. |
| --- | --- |

1.2

The MLC – the Seafarers' Bill of Rights – aims at ensuring comprehensive worldwide protection of the rights of seafarers and establishing a level playing field for countries and shipowners committed to providing decent working and living conditions and protecting them from unfair competition from substandard ships.

| 1.3 | The EESC reiterates its earlier calls urging the EU to prompt the ratification efforts of the MLC by its Member States. It subscribes to the overarching policy that the EU regulations on labour conditions need to be in line with international regulations, such as the MLC, without prejudice to any higher standards that may exist in the EU. |
| --- | --- |

1.3

The EESC reiterates its earlier calls urging the EU to prompt the ratification efforts of the MLC by its Member States. It subscribes to the overarching policy that the EU regulations on labour conditions need to be in line with international regulations, such as the MLC, without prejudice to any higher standards that may exist in the EU.

| 1.4 | The EESC notes that the inspection of living and working conditions of seafarers on board ships requires sufficient numbers of inspectors with enhanced skills. EMSA and the Paris Memorandum of Understanding on Port State Control (MOU) are asked to boost the proper training of inspectors in order to enable them to carry out the MLC control functions by the time the Convention enters into force. |
| --- | --- |

1.4

The EESC notes that the inspection of living and working conditions of seafarers on board ships requires sufficient numbers of inspectors with enhanced skills. EMSA and the Paris Memorandum of Understanding on Port State Control (MOU) are asked to boost the proper training of inspectors in order to enable them to carry out the MLC control functions by the time the Convention enters into force.

| 1.5 | There may be areas where the current EU Directive 2009/16 and the MLC (and the associated ILO guidelines on port State control) may differ in scope or procedures. The EESC believes that there will be a need to streamline the control and enforcement procedures under both instruments by expanding the implementing powers conferred on the European Commission. |
| --- | --- |

1.5

There may be areas where the current EU Directive 2009/16 and the MLC (and the associated ILO guidelines on port State control) may differ in scope or procedures. The EESC believes that there will be a need to streamline the control and enforcement procedures under both instruments by expanding the implementing powers conferred on the European Commission.

| 1.6 | Compliance and enforcement of the structural requirements for seafarer accommodation, especially in specific sectors of the maritime industry, will pose significant challenges. Port State Control officers should acknowledge flag State provisions regarding equivalent provisions and sanctions of derogations and exemptions, as reflected in the Declarations of Maritime Labour Compliance. |
| --- | --- |

1.6

Compliance and enforcement of the structural requirements for seafarer accommodation, especially in specific sectors of the maritime industry, will pose significant challenges. Port State Control officers should acknowledge flag State provisions regarding equivalent provisions and sanctions of derogations and exemptions, as reflected in the Declarations of Maritime Labour Compliance.

| 1.7 | Some flexibility is necessary when inspecting smaller ships in domestic voyages – in contrast to large ships engaged in international voyages – and guidance through the proposed delegated acts will be needed for the evaluation of deficiencies for further actions. |
| --- | --- |

1.7

Some flexibility is necessary when inspecting smaller ships in domestic voyages – in contrast to large ships engaged in international voyages – and guidance through the proposed delegated acts will be needed for the evaluation of deficiencies for further actions.

| 1.8 | The EESC believes that the proposed procedures for port State control officers dealing with complaints related to the MLC that cannot be resolved on board should include a second stage of referring complaints to the shipowner, for due action on his part. This step is consistent with the MLC procedures. |
| --- | --- |

1.8

The EESC believes that the proposed procedures for port State control officers dealing with complaints related to the MLC that cannot be resolved on board should include a second stage of referring complaints to the shipowner, for due action on his part. This step is consistent with the MLC procedures.

| 1.9 | The EESC asks the European Commission to ensure that the enforcement in third countries of future EU legislation on Labour Supplying States (LSS) will be consistent with the spirit and terms of the MLC. |
| --- | --- |

1.9

The EESC asks the European Commission to ensure that the enforcement in third countries of future EU legislation on Labour Supplying States (LSS) will be consistent with the spirit and terms of the MLC.

| 1.10 | The broad definition of "seafarer" could include various personnel on board ships that could be construed as seafarers. The EESC believes that Member States should acknowledge the ILO clarification and associated guidelines when implementing and enforcing the MLC and that the prerogative of flag States to make determinations on this matter should be respected. |
| --- | --- |

1.10

The broad definition of "seafarer" could include various personnel on board ships that could be construed as seafarers. The EESC believes that Member States should acknowledge the ILO clarification and associated guidelines when implementing and enforcing the MLC and that the prerogative of flag States to make determinations on this matter should be respected.

| 1.11 | Since the proposed Directive on flag State responsibilities is not precise enough as regards the possibility of the administration delegating the tasks of carrying out inspections or of issuance of certificates to recognised organisations, the EESC assumes that Member States will be able to do so through their transposition acts. |
| --- | --- |

1.11

Since the proposed Directive on flag State responsibilities is not precise enough as regards the possibility of the administration delegating the tasks of carrying out inspections or of issuance of certificates to recognised organisations, the EESC assumes that Member States will be able to do so through their transposition acts.

2.   Introduction

| 2.1 | The Maritime Labour Convention (MLC) 2006 adopted by the International Labour Organization (ILO) on 23 February 2006 aims at establishing a level playing field in the worldwide maritime industry by setting common minimum standards for all flags and seafarers. |
| --- | --- |

2.1

The Maritime Labour Convention (MLC) 2006 adopted by the International Labour Organization (ILO) on 23 February 2006 aims at establishing a level playing field in the worldwide maritime industry by setting common minimum standards for all flags and seafarers.

| 2.2 | The Convention, called the "Seafarers' Bill of Rights", was designed to achieve near universal ratification due to its blend of firmness on rights and flexibility with respect to implementation of the more technical requirements and due to the advantages granted to the ships of countries that ratify it. It is the fourth pillar of the international regulatory regime for quality shipping, complementing the key Conventions of the International Maritime Organization (IMO), i.e. the International Convention for the Safety of Life at Sea (SOLAS) 1974, the International Convention on Standards of Training, Certification and Watchkeeping (STCW) 1978, and the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78. It seeks to ensure comprehensive worldwide protection of the rights of seafarers and to establish a level playing field for countries and shipowners committed to providing decent working and living conditions for seafarers, protecting them from unfair competition from substandard ships. |
| --- | --- |

2.2

The Convention, called the "Seafarers' Bill of Rights", was designed to achieve near universal ratification due to its blend of firmness on rights and flexibility with respect to implementation of the more technical requirements and due to the advantages granted to the ships of countries that ratify it. It is the fourth pillar of the international regulatory regime for quality shipping, complementing the key Conventions of the International Maritime Organization (IMO), i.e. the International Convention for the Safety of Life at Sea (SOLAS) 1974, the International Convention on Standards of Training, Certification and Watchkeeping (STCW) 1978, and the International Convention for the Prevention of Pollution from Ships (MARPOL) 73/78. It seeks to ensure comprehensive worldwide protection of the rights of seafarers and to establish a level playing field for countries and shipowners committed to providing decent working and living conditions for seafarers, protecting them from unfair competition from substandard ships.

| 2.3 | The MLC minimum standards must be implemented by all countries that ratify it through national standards or requirements. Its enforcement and compliance system needs widespread international cooperation in order to be effective. Since several obligations under the Convention are directed to shipowners and flag states it is important that states with a strong maritime interest ratify the Convention. |
| --- | --- |

2.3

The MLC minimum standards must be implemented by all countries that ratify it through national standards or requirements. Its enforcement and compliance system needs widespread international cooperation in order to be effective. Since several obligations under the Convention are directed to shipowners and flag states it is important that states with a strong maritime interest ratify the Convention.

3.   Summary of the Commission’s proposals

| 3.1 | The proposals underline that Member States and the Commission supported the ILO work for the adoption of the MLC. The EU's keen interest in the entry into force of the Convention has been shown with the Decision 2007/431/EC (1) authorising Member States to ratify the Convention in the interest of the EU. |
| --- | --- |

3.1

The proposals underline that Member States and the Commission supported the ILO work for the adoption of the MLC. The EU's keen interest in the entry into force of the Convention has been shown with the Decision 2007/431/EC (1) authorising Member States to ratify the Convention in the interest of the EU.

| 3.2 | The Commission stresses the importance of the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention 2006, endorsed with the Directive 2009/13/EC (2). This Directive has brought European legislation into line with the international standards fixed by the MLC. |
| --- | --- |

3.2

The Commission stresses the importance of the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention 2006, endorsed with the Directive 2009/13/EC (2). This Directive has brought European legislation into line with the international standards fixed by the MLC.

| 3.3 | The proposals for a Directive amending Directive 2009/16/EC on port State control (3) and for a Directive concerning flag state responsibilities for the enforcement of Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention 2006, and amending Directive 1999/63/EC (4) seek to promote EU policy on maritime professions through the implementation of the MLC 2006. The current initiatives are aimed at establishing the necessary mechanism and procedures to ensure full and effective implementation of the MLC by Member States acting both as flag and port States. Both Directives will enter into force on the date of entry into force of the MLC 2006, allowing for a 12 months period of transposition. |
| --- | --- |

3.3

The proposals for a Directive amending Directive 2009/16/EC on port State control (3) and for a Directive concerning flag state responsibilities for the enforcement of Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the Maritime Labour Convention 2006, and amending Directive 1999/63/EC (4) seek to promote EU policy on maritime professions through the implementation of the MLC 2006. The current initiatives are aimed at establishing the necessary mechanism and procedures to ensure full and effective implementation of the MLC by Member States acting both as flag and port States. Both Directives will enter into force on the date of entry into force of the MLC 2006, allowing for a 12 months period of transposition.

| 3.4 | The proposals to amend the port State control Directive (2009/16/EC):






  — | include the maritime labour certificate and the declaration of maritime labour compliance among the documents to be checked by inspectors; |
| --- | --- | --- |

3.4

The proposals to amend the port State control Directive (2009/16/EC):

—

include the maritime labour certificate and the declaration of maritime labour compliance among the documents to be checked by inspectors;

| — | extend the scope of inspections to new items (e.g. the existence of an adequate labour contract signed by both parties for each seafarer with the required clauses in the contract); |
| --- | --- |

—

extend the scope of inspections to new items (e.g. the existence of an adequate labour contract signed by both parties for each seafarer with the required clauses in the contract);

| — | extend the scope of investigation in case of complaints and provide for an adequate procedure; and |
| --- | --- |

—

extend the scope of investigation in case of complaints and provide for an adequate procedure; and

| — | introduce the new rules on delegated and implementing powers following the entry into force of the Treaty of Lisbon. |
| --- | --- |

—

introduce the new rules on delegated and implementing powers following the entry into force of the Treaty of Lisbon.

| 3.5 | The proposed new Directive on flag State responsibilities:






  — | lays down the obligation for EU flag States to establish mechanisms in order to meet their responsibilities in enforcing Directive 2009/13/EC, |
| --- | --- | --- |

3.5

The proposed new Directive on flag State responsibilities:

—

lays down the obligation for EU flag States to establish mechanisms in order to meet their responsibilities in enforcing Directive 2009/13/EC,

| — | stipulates the professional qualifications and independence of the staff in charge of verifying the matters covered by Directive 2009/13/EC, and |
| --- | --- |

—

stipulates the professional qualifications and independence of the staff in charge of verifying the matters covered by Directive 2009/13/EC, and

| — | lays down the principles and procedure to be followed by the flag States' competent staff in dealing with complaints on board EU flagged ships. |
| --- | --- |

—

lays down the principles and procedure to be followed by the flag States' competent staff in dealing with complaints on board EU flagged ships.

4.   General comments

| 4.1 | The EESC subscribes to the overarching policy that the EU legislation on labour conditions needs to be fully in line with international legislation such as the MLC and the STCW Convention, without prejudice to any higher standards that may exist in the EU. |
| --- | --- |

4.1

The EESC subscribes to the overarching policy that the EU legislation on labour conditions needs to be fully in line with international legislation such as the MLC and the STCW Convention, without prejudice to any higher standards that may exist in the EU.

| 4.2 | The EESC notes that MLC 2006 is not yet binding under international law and relies on implementation by States through their national laws. The ILO guidelines for flag State and port State inspections underline that in all cases, the relevant national laws or regulations or collective bargaining agreements or other measures implementing the MLC in the flag State should be viewed as the authoritative statement of the requirements in the flag State. Furthermore, they recall the flexibility in the implementation of the MLC, namely through national substantial equivalence and the discretion afforded to flag States in their precise implementation measures. Therefore, there will be a need for common interpretation and enforcement of the MLC by EU Member States and by non-EU countries. |
| --- | --- |

4.2

The EESC notes that MLC 2006 is not yet binding under international law and relies on implementation by States through their national laws. The ILO guidelines for flag State and port State inspections underline that in all cases, the relevant national laws or regulations or collective bargaining agreements or other measures implementing the MLC in the flag State should be viewed as the authoritative statement of the requirements in the flag State. Furthermore, they recall the flexibility in the implementation of the MLC, namely through national substantial equivalence and the discretion afforded to flag States in their precise implementation measures. Therefore, there will be a need for common interpretation and enforcement of the MLC by EU Member States and by non-EU countries.

| 4.3 | The EESC acknowledges that the adoption of Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the MLC 2006 constitutes an outstanding achievement of sectoral social dialogue that should be effected with tangible results. The biggest challenge would be the elimination of causes of seafarer fatigue by control of hours of work and rest. |
| --- | --- |

4.3

The EESC acknowledges that the adoption of Directive 2009/13/EC implementing the Agreement concluded by the European Community Shipowners’ Associations (ECSA) and the European Transport Workers’ Federation (ETF) on the MLC 2006 constitutes an outstanding achievement of sectoral social dialogue that should be effected with tangible results. The biggest challenge would be the elimination of causes of seafarer fatigue by control of hours of work and rest.

| 4.4 | The EESC would draw attention to its opinions:






  — | on the Maritime Safety Package No III
   (5) in which it supported efforts to identify how best to transpose the MLC into EU law. It urged the EU to give a strong boost to ratification efforts of the MLC by promoting ratification by European Economic Area countries and third countries with which there are economic cooperation agreements; |
| --- | --- | --- |

4.4

The EESC would draw attention to its opinions:

—

on the Maritime Safety Package No III
   (5) in which it supported efforts to identify how best to transpose the MLC into EU law. It urged the EU to give a strong boost to ratification efforts of the MLC by promoting ratification by European Economic Area countries and third countries with which there are economic cooperation agreements;

| — | on the EU's maritime policy until 2018
   (6) whereby it urged "Member States to ratify the 2006 ILO MLC that will create a level playing field on ships’ conditions and contribute to attracting youngsters to a seafaring career"; |
| --- | --- |

—

on the EU's maritime policy until 2018
   (6) whereby it urged "Member States to ratify the 2006 ILO MLC that will create a level playing field on ships’ conditions and contribute to attracting youngsters to a seafaring career";

| — | on the Strengthening of Maritime Labour Standards
   (7) urging EU Member States to ratify the MLC as soon as possible and recommending the development of operational guidelines for flag and port States. |
| --- | --- |

—

on the Strengthening of Maritime Labour Standards
   (7) urging EU Member States to ratify the MLC as soon as possible and recommending the development of operational guidelines for flag and port States.

| 4.5 | The EESC would also highlight its opinion on the White Paper on the Single European Transport Area
   (8) where it noted that "EU Member States are urged to ratify the MLC of ILO to have a level playing field internationally without prejudice to any higher standards that may exist in the EU. EU legislation should be completely in line with international legislation, particularly the MLC, and the Convention on ‧Standards of Training, Certification and Watchkeeping for Seafarers‧ (STCW) of the IMO". |
| --- | --- |

4.5

The EESC would also highlight its opinion on the White Paper on the Single European Transport Area
   (8) where it noted that "EU Member States are urged to ratify the MLC of ILO to have a level playing field internationally without prejudice to any higher standards that may exist in the EU. EU legislation should be completely in line with international legislation, particularly the MLC, and the Convention on ‧Standards of Training, Certification and Watchkeeping for Seafarers‧ (STCW) of the IMO".

| 4.6 | The proposals meet the stakeholders' expectations as to reinforcing maritime safety, improving shipping quality and establishing fairer conditions of competition between EU and non EU operators and -U flags. Hence, the EESC supports the principle of enforcing the MLC by enhancing EU legislation. The EU action will be conducive to the aims of the Task Force on Maritime Employment and Competitiveness set up by Vice-President Kallas that has recommended the enforcement of the MLC (June 2011). |
| --- | --- |

4.6

The proposals meet the stakeholders' expectations as to reinforcing maritime safety, improving shipping quality and establishing fairer conditions of competition between EU and non EU operators and -U flags. Hence, the EESC supports the principle of enforcing the MLC by enhancing EU legislation. The EU action will be conducive to the aims of the Task Force on Maritime Employment and Competitiveness set up by Vice-President Kallas that has recommended the enforcement of the MLC (June 2011).

5.   Specific comments

Amendments to Directive 2009/16/EC on port State control

| 5.1 | The EESC believes that the scope of delegated and implementing powers conferred to the Commission should be both expanded to determine in detail harmonised modalities of putting into effect the port State control procedures for the inspection of ships under the terms of the MLC, taking into account the pertinent ILO Guidelines, and streamlined with the scope and procedures of Directive 2009/16. |
| --- | --- |

5.1

The EESC believes that the scope of delegated and implementing powers conferred to the Commission should be both expanded to determine in detail harmonised modalities of putting into effect the port State control procedures for the inspection of ships under the terms of the MLC, taking into account the pertinent ILO Guidelines, and streamlined with the scope and procedures of Directive 2009/16.

| 5.2 | The EESC opinion on the Maritime Safety Package No III (9) welcomed "the inclusion of inspection of the working conditions on board, since the human factor often plays an important role in maritime accidents. Inspection of seamen’s on board living and working conditions requires sufficient number of inspectors with enhanced skills in this area". Therefore, proper training of inspectors will be necessary to enable them to carry out the MLC control by the time the Convention enters into force. The EESC calls the European Maritime Safety Agency (EMSA) and the Paris MOU to boost the training of inspectors for MLC purposes. |
| --- | --- |

5.2

The EESC opinion on the Maritime Safety Package No III (9) welcomed "the inclusion of inspection of the working conditions on board, since the human factor often plays an important role in maritime accidents. Inspection of seamen’s on board living and working conditions requires sufficient number of inspectors with enhanced skills in this area". Therefore, proper training of inspectors will be necessary to enable them to carry out the MLC control by the time the Convention enters into force. The EESC calls the European Maritime Safety Agency (EMSA) and the Paris MOU to boost the training of inspectors for MLC purposes.

| 5.3 | The EESC notes that under Article 13(c) of Directive 2009/16/EC on port State control "on each initial inspection of a ship, the competent authority shall ensure that the inspector satisfies himself of the overall condition of the ship, including the hygiene of the ship, including engine room and accommodation". However, according to the ILO Guidelines for port State control officers carrying out inspections under the MLC 2006 the initial, and often the only, inspection is mainly concerned with reviewing the ship’s Maritime Labour Certificate and the Declaration of Maritime Labour Compliance. These documents constitute prima facie evidence that the requirements of this Convention relating to working and living conditions of the seafarers have been met to the extent so certified. There may however be circumstances where a more detailed inspection may be carried out to ascertain the working and living conditions on board the ship. There may be more areas where the current EU Directive 2009/16 and the MLC and the associated ILO guidelines may differ in scope or procedures. Therefore, there will be a need to streamline the control and enforcement procedures under both instruments by expanding the implementing powers conferred on the Commission to establish the appropriate harmonised modalities. |
| --- | --- |

5.3

The EESC notes that under Article 13(c) of Directive 2009/16/EC on port State control "on each initial inspection of a ship, the competent authority shall ensure that the inspector satisfies himself of the overall condition of the ship, including the hygiene of the ship, including engine room and accommodation". However, according to the ILO Guidelines for port State control officers carrying out inspections under the MLC 2006 the initial, and often the only, inspection is mainly concerned with reviewing the ship’s Maritime Labour Certificate and the Declaration of Maritime Labour Compliance. These documents constitute prima facie evidence that the requirements of this Convention relating to working and living conditions of the seafarers have been met to the extent so certified. There may however be circumstances where a more detailed inspection may be carried out to ascertain the working and living conditions on board the ship. There may be more areas where the current EU Directive 2009/16 and the MLC and the associated ILO guidelines may differ in scope or procedures. Therefore, there will be a need to streamline the control and enforcement procedures under both instruments by expanding the implementing powers conferred on the Commission to establish the appropriate harmonised modalities.

| 5.4 | Compliance and enforcement of the structural requirements for seafarer accommodation, especially in specific sectors of the maritime industry, such as large commercial yachts or smaller ships, will pose significant challenges. The EESC notes that MLC allows flag States, where appropriate, to introduce through provisions in its laws and regulations or other measures which are substantially equivalent to the provisions and to sanction derogations, exemptions or other flexible application of standards of the Convention in consultation with shipowners’ and seafarers’ organisations. Hence, the EESC expects that port State Control officers will base their judgments on acknowledging the flag State decisions, as reflected in the Declarations of Maritime Labour Compliance. |
| --- | --- |

5.4

Compliance and enforcement of the structural requirements for seafarer accommodation, especially in specific sectors of the maritime industry, such as large commercial yachts or smaller ships, will pose significant challenges. The EESC notes that MLC allows flag States, where appropriate, to introduce through provisions in its laws and regulations or other measures which are substantially equivalent to the provisions and to sanction derogations, exemptions or other flexible application of standards of the Convention in consultation with shipowners’ and seafarers’ organisations. Hence, the EESC expects that port State Control officers will base their judgments on acknowledging the flag State decisions, as reflected in the Declarations of Maritime Labour Compliance.

| 5.5 | The MLC recognises that ILO Members need some flexibility to address particular national conditions, especially with respect to smaller ships and ships that do not go on international voyages or specific kinds of ships. Hence, regular inspections for small ships engaged in domestic voyages need not be the same as for large ships engaged in international voyages. Furthermore, the EESC predicts that port State control will face important operational issues as regards more detailed inspections and evaluation of deficiencies for further actions. It believes that such issues should be carefully addressed and reasonably settled through the proposed delegated acts that would take into account prevailing national legislations implementing the MLC. |
| --- | --- |

5.5

The MLC recognises that ILO Members need some flexibility to address particular national conditions, especially with respect to smaller ships and ships that do not go on international voyages or specific kinds of ships. Hence, regular inspections for small ships engaged in domestic voyages need not be the same as for large ships engaged in international voyages. Furthermore, the EESC predicts that port State control will face important operational issues as regards more detailed inspections and evaluation of deficiencies for further actions. It believes that such issues should be carefully addressed and reasonably settled through the proposed delegated acts that would take into account prevailing national legislations implementing the MLC.

| 5.6 | The proposed new Article 18a "Complaints related to the Maritime Labour Convention" in paragraph 1 stipulates that when a complaint has not been resolved at the ship-board level the port State control officer should refer the matter to the flag State for proper action on. The EESC believes that the proposed procedures should include a second stage of referring complaints to the shipowner for his proper actions. This step is consistent with the MLC procedures. |
| --- | --- |

5.6

The proposed new Article 18a "Complaints related to the Maritime Labour Convention" in paragraph 1 stipulates that when a complaint has not been resolved at the ship-board level the port State control officer should refer the matter to the flag State for proper action on. The EESC believes that the proposed procedures should include a second stage of referring complaints to the shipowner for his proper actions. This step is consistent with the MLC procedures.

On the new Directive on compliance with flag State requirements

| 5.7 | The process of ratification/implementation of the MLC 2006 is, in several EU Member States, already at an advanced stage or has already been completed. The implementation of its requirements on recruitment and placement and the social security protection of seafarers who are nationals of or residents or domiciled in a Labour Supplying State will create important operational issues. The EESC asks the Commission to address this matter urgently and to ensure that the enforcement in third countries of future EU legislation on Labour Supplying States (LSS) will be consistent with the spirit and terms of the MLC. |
| --- | --- |

5.7

The process of ratification/implementation of the MLC 2006 is, in several EU Member States, already at an advanced stage or has already been completed. The implementation of its requirements on recruitment and placement and the social security protection of seafarers who are nationals of or residents or domiciled in a Labour Supplying State will create important operational issues. The EESC asks the Commission to address this matter urgently and to ensure that the enforcement in third countries of future EU legislation on Labour Supplying States (LSS) will be consistent with the spirit and terms of the MLC.

| 5.8 | The flag States encourage shipowners to establish measures to ensure compliance. Article II of the MLC defines "seafarer" as "any person who is employed or engaged or works in any capacity on board a ship to which this Convention applies". Under this broad definition, charterers' personnel, such as geologists and divers on board vessels operating in the offshore industry, or personnel not employed directly by shipowners, or security guards on board ships under a contractual agreement in order to deter piracy, could be construed as seafarers. The ILO recognises that situations may arise in which a Member may have doubts as to whether or not certain categories of persons who undertake periods of work on board a ship should be regarded as seafarers for the purpose of the Convention provided clarification with Resolution VII of the 94th (Maritime) Session of the International Labour Conference. In any case, and in accordance with Article II, paragraph 3, in the event of doubt as to whether any categories of persons are to be regarded as seafarers for the purpose of this Convention, the question shall be determined by the competent authority in each Member after consultation with the shipowners’ and seafarers’ organisations concerned with this question. The EESC believes that Member States should acknowledge the ILO Resolutions and associated guidelines when implementing and enforcing the MLC and that this principle should be firmly upheld. |
| --- | --- |

5.8

The flag States encourage shipowners to establish measures to ensure compliance. Article II of the MLC defines "seafarer" as "any person who is employed or engaged or works in any capacity on board a ship to which this Convention applies". Under this broad definition, charterers' personnel, such as geologists and divers on board vessels operating in the offshore industry, or personnel not employed directly by shipowners, or security guards on board ships under a contractual agreement in order to deter piracy, could be construed as seafarers. The ILO recognises that situations may arise in which a Member may have doubts as to whether or not certain categories of persons who undertake periods of work on board a ship should be regarded as seafarers for the purpose of the Convention provided clarification with Resolution VII of the 94th (Maritime) Session of the International Labour Conference. In any case, and in accordance with Article II, paragraph 3, in the event of doubt as to whether any categories of persons are to be regarded as seafarers for the purpose of this Convention, the question shall be determined by the competent authority in each Member after consultation with the shipowners’ and seafarers’ organisations concerned with this question. The EESC believes that Member States should acknowledge the ILO Resolutions and associated guidelines when implementing and enforcing the MLC and that this principle should be firmly upheld.

| 5.9 | With respect to Article 4 "Staff in charge of compliance monitoring" the EESC notes that the ILO Guidelines for port State control officers carrying out inspections under the MLC 2006 have been developed to assist port State administrations to effectively implement their responsibilities under the MLC. In most cases, inspections will involve personnel that are already qualified under the existing international port State control arrangements, developed in connection with the IMO conventions and under regional MOU on port State control. Indeed, this is the case for EU countries operating under the Paris MOU and Directive 2009/16/EC. |
| --- | --- |

5.9

With respect to Article 4 "Staff in charge of compliance monitoring" the EESC notes that the ILO Guidelines for port State control officers carrying out inspections under the MLC 2006 have been developed to assist port State administrations to effectively implement their responsibilities under the MLC. In most cases, inspections will involve personnel that are already qualified under the existing international port State control arrangements, developed in connection with the IMO conventions and under regional MOU on port State control. Indeed, this is the case for EU countries operating under the Paris MOU and Directive 2009/16/EC.

| 5.10 | An important aspect of the MLC enforcement will be the issuance by flag State administrations of Maritime Labour Certificates and Declarations of Maritime Labour Compliance. Under Regulation 5.1.1 of the Convention Members may authorise organisations, such as classification societies to carry out inspections or to issue certificates or to do both. This principle is recognised by EU law, namely partly by the Directive 2009/15/EC on "Common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations" and partly by the Directive 2009/21/EC on "Compliance with flag State requirements". Since the proposed Directive is not precise enough as regards to the possibility of the administration delegating tasks to recognised organisations, the EESC assumes that Member States will be able to do so through their transposition acts. |
| --- | --- |

5.10

An important aspect of the MLC enforcement will be the issuance by flag State administrations of Maritime Labour Certificates and Declarations of Maritime Labour Compliance. Under Regulation 5.1.1 of the Convention Members may authorise organisations, such as classification societies to carry out inspections or to issue certificates or to do both. This principle is recognised by EU law, namely partly by the Directive 2009/15/EC on "Common rules and standards for ship inspection and survey organisations and for the relevant activities of maritime administrations" and partly by the Directive 2009/21/EC on "Compliance with flag State requirements". Since the proposed Directive is not precise enough as regards to the possibility of the administration delegating tasks to recognised organisations, the EESC assumes that Member States will be able to do so through their transposition acts.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  OJ L 161, 22.6.2007, p. 63-64.

1

(2)  OJ L 124, 20.5.2009, p. 30-50.

2

(3)  COM(2012) 129 final.

3

(4)  COM(2012) 134 final.

4

(5)  OJ C 318, 23.12.2006, p. 195-201.

5

(6)  OJ C 255, 22.9.2010, p. 103.

6

(7)  OJ C 97, 28.4.2007, p. 33.

7

(8)  OJ C 24, 28.1.2012, p. 146.

8

(9)  OJ C 318, 23.12.2006, p. 195-201.

9

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/158 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/158

---

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on ship recycling’

COM(2012) 118 final — 2012/0055 (COD)

2012/C 299/29

Rapporteur: Mr SIECKER

On 10 April 2012 the Council, and on 19 April 2012 the European Parliament, decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Proposal for a Regulation of the European Parliament and of the Council on ship recycling

COM(2012) 118 final — 2012/0055 (COD).

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 26 June 2012.

At its 482nd plenary session of 11 and 12 July (meeting of 12 July) the European Economic and Social Committee adopted the following opinion by 122 votes to 31 with 6 abstentions:

1.   Conclusions and recommendations

| 1.1 | Ships are being scrapped in an irresponsible way. Most of them are scrapped in India, Pakistan or Bangladesh using the "beaching" method involving grounding them on a sandy beach, where they are scrapped by unskilled workers, including many children, without appropriate equipment and without any protection against the large quantities of hazardous substances released. |
| --- | --- |

1.1

Ships are being scrapped in an irresponsible way. Most of them are scrapped in India, Pakistan or Bangladesh using the "beaching" method involving grounding them on a sandy beach, where they are scrapped by unskilled workers, including many children, without appropriate equipment and without any protection against the large quantities of hazardous substances released.

| 1.2 | Decommissioned ships are regarded as hazardous waste and fall within the scope of the Basel Convention, which regulates the transport of hazardous waste. Because the rules of this Convention had been systematically circumvented on a massive scale for years, in 2009 the IMO adopted the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The EU and its Member States have concluded that both Conventions appeared to provide an equivalent level of control and enforcement for ships classified as waste. All African states and a number of Latin American states disagreed with this conclusion. The Hong Kong Convention is expected to enter into force in about 2020, if it has been ratified by enough countries. |
| --- | --- |

1.2

Decommissioned ships are regarded as hazardous waste and fall within the scope of the Basel Convention, which regulates the transport of hazardous waste. Because the rules of this Convention had been systematically circumvented on a massive scale for years, in 2009 the IMO adopted the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The EU and its Member States have concluded that both Conventions appeared to provide an equivalent level of control and enforcement for ships classified as waste. All African states and a number of Latin American states disagreed with this conclusion. The Hong Kong Convention is expected to enter into force in about 2020, if it has been ratified by enough countries.

| 1.3 | The European Union bears a major responsibility in this field as a large part of the global cargo fleet is in the hands of shipping companies based in the EU Member States. The Commission has been concerned about trends in the sector for years. A few years ago therefore it decided to do something about it. Over the last five years the Commission has produced a green paper on the subject, followed by a communication, and now it has published a proposal for a regulation. The proposed EU regulation brings into force early a number of the requirements of the Hong Kong Convention. |
| --- | --- |

1.3

The European Union bears a major responsibility in this field as a large part of the global cargo fleet is in the hands of shipping companies based in the EU Member States. The Commission has been concerned about trends in the sector for years. A few years ago therefore it decided to do something about it. Over the last five years the Commission has produced a green paper on the subject, followed by a communication, and now it has published a proposal for a regulation. The proposed EU regulation brings into force early a number of the requirements of the Hong Kong Convention.

| 1.4 | The proposal for a regulation on ship recycling is a rather pale reflection of the previous green paper and the communication on the same subject. The two previous documents provided an impeccable analysis of ship recycling problems in Bangladesh, India and Pakistan and expressed the view that robust measures were needed to tackle the unacceptable conditions in these countries. The measures proposed in the proposal for a regulation do not however solve these problems. The EESC can only conclude that the political will is manifestly absent. |
| --- | --- |

1.4

The proposal for a regulation on ship recycling is a rather pale reflection of the previous green paper and the communication on the same subject. The two previous documents provided an impeccable analysis of ship recycling problems in Bangladesh, India and Pakistan and expressed the view that robust measures were needed to tackle the unacceptable conditions in these countries. The measures proposed in the proposal for a regulation do not however solve these problems. The EESC can only conclude that the political will is manifestly absent.

| 1.5 | What is lacking in the proposal, for example, is an economic instrument which the Commission could use to guide developments in the desired direction. The possibility of an instrument of this kind was mooted in the previous documents. The Commission had a study carried out on the possibility of establishing a fund to which every ship docking in a European port would have to contribute. The amount of the contribution would be determined by a combination of tonnage and toxicity. The use of a fund of this kind fits in perfectly with the "polluter pays" principle. The money could be used in part to improve working conditions in South East Asia, by training workers in safe working practices, by raising local awareness of the dangers of the irresponsible scrapping of large seagoing ships and by improving local public infrastructure. |
| --- | --- |

1.5

What is lacking in the proposal, for example, is an economic instrument which the Commission could use to guide developments in the desired direction. The possibility of an instrument of this kind was mooted in the previous documents. The Commission had a study carried out on the possibility of establishing a fund to which every ship docking in a European port would have to contribute. The amount of the contribution would be determined by a combination of tonnage and toxicity. The use of a fund of this kind fits in perfectly with the "polluter pays" principle. The money could be used in part to improve working conditions in South East Asia, by training workers in safe working practices, by raising local awareness of the dangers of the irresponsible scrapping of large seagoing ships and by improving local public infrastructure.

| 1.6 | The EESC prompts the European Commission to investigate the possibility of using this money to develop scrapping capacity and to establish a recycling industry in Europe. There is sufficient dock capacity in the EU which is no longer, or only partly, used for building and repairing ships but which is suitable for the decommissioning and recycling of ships. This would fit in with the European Union's ambition to develop into a sustainable "recycling society", a society in which waste is turned into raw materials by means of a sophisticated and fine-meshed recycling system. This could produce considerable economic gains in terms of valuable materials which could meet a significant proportion of the demand for raw materials and generate many new jobs. In view of steadily rising raw material prices and high unemployment in a number of European Member States, this could be highly profitable for Europe as a whole. Moreover, an industry specialising in recycling end-of-life ships would be an opportunity for the development of maritime areas and the training of young people in emerging skills and the unemployed. |
| --- | --- |

1.6

The EESC prompts the European Commission to investigate the possibility of using this money to develop scrapping capacity and to establish a recycling industry in Europe. There is sufficient dock capacity in the EU which is no longer, or only partly, used for building and repairing ships but which is suitable for the decommissioning and recycling of ships. This would fit in with the European Union's ambition to develop into a sustainable "recycling society", a society in which waste is turned into raw materials by means of a sophisticated and fine-meshed recycling system. This could produce considerable economic gains in terms of valuable materials which could meet a significant proportion of the demand for raw materials and generate many new jobs. In view of steadily rising raw material prices and high unemployment in a number of European Member States, this could be highly profitable for Europe as a whole. Moreover, an industry specialising in recycling end-of-life ships would be an opportunity for the development of maritime areas and the training of young people in emerging skills and the unemployed.

| 1.7 | If Europe wants its ships to be scrapped in a responsible way, it is not unreasonable that it should pay part of the cost of building the capacity needed to ensure that this is done in an appropriate manner. In a market economy nothing is free, and a price has to be paid for everything. The price for the responsible scrapping of ships is paid in money. When ships are scrapped in an irresponsible way the price is paid in other currencies, such as destruction of the local environment and the loss of human lives. Given that we in the EU do not wish to accept these currencies as a legal means of payment, we must also not accept their use as a means of payment in trade with countries outside Europe. The Commission could place more emphasis on this. The EESC therefore considers that Commission should have produced a better, more creative, more adventurous proposal, richer in initiatives, in line with the level of ambition of the previous Commission documents and the Committee's opinions on them. |
| --- | --- |

1.7

If Europe wants its ships to be scrapped in a responsible way, it is not unreasonable that it should pay part of the cost of building the capacity needed to ensure that this is done in an appropriate manner. In a market economy nothing is free, and a price has to be paid for everything. The price for the responsible scrapping of ships is paid in money. When ships are scrapped in an irresponsible way the price is paid in other currencies, such as destruction of the local environment and the loss of human lives. Given that we in the EU do not wish to accept these currencies as a legal means of payment, we must also not accept their use as a means of payment in trade with countries outside Europe. The Commission could place more emphasis on this. The EESC therefore considers that Commission should have produced a better, more creative, more adventurous proposal, richer in initiatives, in line with the level of ambition of the previous Commission documents and the Committee's opinions on them.

| 1.8 | With a view to authorising the recycling of ships in facilities situated in non-OECD countries, provided that they meet the requirements for inclusion on the European list, the EESC recommends –that the Regulation be based in particular on the existing guidelines of the relevant international organisations (1), as well as on the Basel Convention itself and its technical guidelines. |
| --- | --- |

1.8

With a view to authorising the recycling of ships in facilities situated in non-OECD countries, provided that they meet the requirements for inclusion on the European list, the EESC recommends –that the Regulation be based in particular on the existing guidelines of the relevant international organisations (1), as well as on the Basel Convention itself and its technical guidelines.

2.   Introduction

| 2.1 | In the late 1980s there was international indignation at the export of toxic waste from industrialised to developing countries. Reports of 8 000 barrels of chemical waste being dumped on Koko Beach in Nigeria and of ships like the Karin B, which sailed from port to port attempting to dispose of its dangerous cargo, hit the headlines, and there were demands for stricter international rules. In 1989 the United Nations' Basel Convention on the control of transboundary movements of hazardous wastes was adopted. |
| --- | --- |

2.1

In the late 1980s there was international indignation at the export of toxic waste from industrialised to developing countries. Reports of 8 000 barrels of chemical waste being dumped on Koko Beach in Nigeria and of ships like the Karin B, which sailed from port to port attempting to dispose of its dangerous cargo, hit the headlines, and there were demands for stricter international rules. In 1989 the United Nations' Basel Convention on the control of transboundary movements of hazardous wastes was adopted.

| 2.2 | The Basel Convention provides for a worldwide system of prior written notice and approval for the movement of wastes between countries. In 1995 an amendment was adopted banning the export of hazardous waste from EU and OECD countries to non-OECD countries. The EU has implemented the Basel Convention and the "ban amendment" in Community law (2). |
| --- | --- |

2.2

The Basel Convention provides for a worldwide system of prior written notice and approval for the movement of wastes between countries. In 1995 an amendment was adopted banning the export of hazardous waste from EU and OECD countries to non-OECD countries. The EU has implemented the Basel Convention and the "ban amendment" in Community law (2).

| 2.3 | Although the law on movement of waste also applies to ships, and although it has been ruled, on the basis of the Basel Convention, that ships may at a certain point be classified as waste, they are still, in line with other international rules, regarded as ships. As virtually all ships contain large quantities of hazardous substances like oil, sludge oil, asbestos, glass wool, PCBs, TBT and heavy metals, e.g. in paint, ships going for dismantling must be regarded as hazardous waste. Thus, EU-flagged ships of this kind, if exported from OECD countries, may, in accordance with the Basel Convention, only be dismantled in OECD countries. |
| --- | --- |

2.3

Although the law on movement of waste also applies to ships, and although it has been ruled, on the basis of the Basel Convention, that ships may at a certain point be classified as waste, they are still, in line with other international rules, regarded as ships. As virtually all ships contain large quantities of hazardous substances like oil, sludge oil, asbestos, glass wool, PCBs, TBT and heavy metals, e.g. in paint, ships going for dismantling must be regarded as hazardous waste. Thus, EU-flagged ships of this kind, if exported from OECD countries, may, in accordance with the Basel Convention, only be dismantled in OECD countries.

| 2.4 | However, this legislation is systematically circumvented by ships, thereby rendering both international rules and Union legislation ineffective. In order to improve the situation, parties to the Basel Convention invited the International Maritime Organization (IMO) to develop mandatory requirements for ship recycling. In 2006 the IMO presented a draft convention which in 2009 was adopted as the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The Convention must be ratified by a sufficient number of large flag states and recycling states in order to enter into force and become effective. |
| --- | --- |

2.4

However, this legislation is systematically circumvented by ships, thereby rendering both international rules and Union legislation ineffective. In order to improve the situation, parties to the Basel Convention invited the International Maritime Organization (IMO) to develop mandatory requirements for ship recycling. In 2006 the IMO presented a draft convention which in 2009 was adopted as the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The Convention must be ratified by a sufficient number of large flag states and recycling states in order to enter into force and become effective.

| 2.5 | In 2006 the parties to the Basel Convention welcomed the IMO's draft convention and began an assessment of whether the level of control and enforcement required by the Hong Kong Convention was equivalent to that provided for in the Basel Convention. The European Union and its Member States finalised their assessment in 2010 which concluded that both conventions appeared to provide an equivalent level of control and enforcement for ships classified as waste. In October 2011, the parties to the Basel Convention encouraged the ratification of the Hong Kong Convention to enable its entry into force. This is expected to be in 2020 at the earliest. When this occurs, countries which are parties to the Convention will be allowed to have their large commercial ships dismantled only in countries which are also parties to the Convention. |
| --- | --- |

2.5

In 2006 the parties to the Basel Convention welcomed the IMO's draft convention and began an assessment of whether the level of control and enforcement required by the Hong Kong Convention was equivalent to that provided for in the Basel Convention. The European Union and its Member States finalised their assessment in 2010 which concluded that both conventions appeared to provide an equivalent level of control and enforcement for ships classified as waste. In October 2011, the parties to the Basel Convention encouraged the ratification of the Hong Kong Convention to enable its entry into force. This is expected to be in 2020 at the earliest. When this occurs, countries which are parties to the Convention will be allowed to have their large commercial ships dismantled only in countries which are also parties to the Convention.

| 2.6 | The environmentally damaging and unsafe practices used in dismantling ships remain a serious source of concern for the European Commission and the Commission is therefore following developments closely. In 2007 the Commission published a Green Paper on better ship dismantling (3), and in 2008 a Communication proposing an EU strategy on ship dismantling (4). The EESC reacted to these documents with earlier opinions (5). This opinion is the EESC's reaction to the Proposal for a Regulation of the European Parliament and of the Council on ship recycling (6). |
| --- | --- |

2.6

The environmentally damaging and unsafe practices used in dismantling ships remain a serious source of concern for the European Commission and the Commission is therefore following developments closely. In 2007 the Commission published a Green Paper on better ship dismantling (3), and in 2008 a Communication proposing an EU strategy on ship dismantling (4). The EESC reacted to these documents with earlier opinions (5). This opinion is the EESC's reaction to the Proposal for a Regulation of the European Parliament and of the Council on ship recycling (6).

3.   Background

| 3.1 | The dismantling of ships is driven by market factors. The cost of maintaining an ageing fleet, transport tariffs and the price of scrap determine when a ship is scrapped. The choice of location for scrapping depends on the price quoted. And the price is determined by demand for recycled steel in the region and the cost of infrastructure for protecting workers and the environment. As a result of these factors the recycling of large sea-going ships has over the years moved to South East Asia. |
| --- | --- |

3.1

The dismantling of ships is driven by market factors. The cost of maintaining an ageing fleet, transport tariffs and the price of scrap determine when a ship is scrapped. The choice of location for scrapping depends on the price quoted. And the price is determined by demand for recycled steel in the region and the cost of infrastructure for protecting workers and the environment. As a result of these factors the recycling of large sea-going ships has over the years moved to South East Asia.

| 3.2 | Of all the decommissioned ships scrapped worldwide since 2004, at least 80 % were scrapped in India, Pakistan or Bangladesh using the "beaching" method. The ships are grounded on a sandy beach and then scrapped without using heavy machinery. There is a lack of facilities in these countries for dealing with heavily polluted and toxic waste appropriately. The governments of the South East Asian states refuse to tackle these practices because they consider ship recycling to be an important economic activity in which they should interfere as little as possible. It creates large numbers of jobs, but the social and environmental consequences are disastrous. |
| --- | --- |

3.2

Of all the decommissioned ships scrapped worldwide since 2004, at least 80 % were scrapped in India, Pakistan or Bangladesh using the "beaching" method. The ships are grounded on a sandy beach and then scrapped without using heavy machinery. There is a lack of facilities in these countries for dealing with heavily polluted and toxic waste appropriately. The governments of the South East Asian states refuse to tackle these practices because they consider ship recycling to be an important economic activity in which they should interfere as little as possible. It creates large numbers of jobs, but the social and environmental consequences are disastrous.

| 3.3 | Large ships which are sent to Asia for dismantling are one of the main sources of hazardous waste moved from industrialised to developing countries. These include substances like asbestos, oil and sludge oil, polychlorinated biphenyls (PCBs) and heavy metals. A 2004 study by the Commission (DG TREN) estimated the amount of hazardous waste at 1 000 to 3 000 tonnes of asbestos, 170 to 540 tonnes of PCBs, 6 000 to 20 000 tonnes of hazardous paints and 400 000 to 1,3 million tonnes of sludge oil per year up to 2015. The impact on the environment has rarely been studied in detail but the available data show that there is a significant impact on sea water, beaches and sediments. Sea pollution from scrap yards in India and Bangladesh is clearly visible in photographs taken from the air. NGOs also report the disappearance of vegetation and fish from these areas. |
| --- | --- |

3.3

Large ships which are sent to Asia for dismantling are one of the main sources of hazardous waste moved from industrialised to developing countries. These include substances like asbestos, oil and sludge oil, polychlorinated biphenyls (PCBs) and heavy metals. A 2004 study by the Commission (DG TREN) estimated the amount of hazardous waste at 1 000 to 3 000 tonnes of asbestos, 170 to 540 tonnes of PCBs, 6 000 to 20 000 tonnes of hazardous paints and 400 000 to 1,3 million tonnes of sludge oil per year up to 2015. The impact on the environment has rarely been studied in detail but the available data show that there is a significant impact on sea water, beaches and sediments. Sea pollution from scrap yards in India and Bangladesh is clearly visible in photographs taken from the air. NGOs also report the disappearance of vegetation and fish from these areas.

| 3.4 | The health and safety situation in South East Asian scrap yards is critical. The lack of heavy machinery and safety equipment for workers means that there is a high risk of serious accidents. According to a report by the Indian government, between 1996 and 2003 there were 434 accidents in the shipbreaking yards at Alang, resulting in the deaths of 209 workers. According to reports from Pakistan, more than 400 shipbreaking workers were killed in that country between 1986 and 2006 and 6 000 were seriously injured. It is also estimated that thousands of workers contract incurable diseases as a result of coming into contact with or breathing in hazardous substances without any preventive or protective measures. Most workers come from the poorest regions, have no qualifications, employment contracts or sickness and accident insurance and are not allowed to organise in trade unions. A study from India has identified a high level of child labour. A quarter of workers are younger than 18, and 10 % younger than 12. |
| --- | --- |

3.4

The health and safety situation in South East Asian scrap yards is critical. The lack of heavy machinery and safety equipment for workers means that there is a high risk of serious accidents. According to a report by the Indian government, between 1996 and 2003 there were 434 accidents in the shipbreaking yards at Alang, resulting in the deaths of 209 workers. According to reports from Pakistan, more than 400 shipbreaking workers were killed in that country between 1986 and 2006 and 6 000 were seriously injured. It is also estimated that thousands of workers contract incurable diseases as a result of coming into contact with or breathing in hazardous substances without any preventive or protective measures. Most workers come from the poorest regions, have no qualifications, employment contracts or sickness and accident insurance and are not allowed to organise in trade unions. A study from India has identified a high level of child labour. A quarter of workers are younger than 18, and 10 % younger than 12.

4.   Main points of the regulation

| 4.1 | The Ship Recycling Regulation aims to substantially reduce, particularly in South East Asia, the negative social and environmental consequences of the recycling of EU-flagged ships without causing unnecessary economic hardship. The proposal for a regulation implements some of the requirements of the Hong Kong Convention early, thus accelerating its worldwide entry into force. |
| --- | --- |

4.1

The Ship Recycling Regulation aims to substantially reduce, particularly in South East Asia, the negative social and environmental consequences of the recycling of EU-flagged ships without causing unnecessary economic hardship. The proposal for a regulation implements some of the requirements of the Hong Kong Convention early, thus accelerating its worldwide entry into force.

| 4.2 | The following requirements of the Hong Kong Convention are to be implemented early:






  4.2.1 | Ships flying the flag of an EU Member State will have to establish and maintain during their whole operating life an inventory of the hazardous materials present on board. While new ships will have to establish an inventory immediately, existing ships will have five years to do so. The inventory has to be updated prior to sending the ship for recycling so as to ensure that the selected ship recycling facility is able and authorised to manage all the hazardous materials and waste present on board. |
| --- | --- | --- |

4.2

The following requirements of the Hong Kong Convention are to be implemented early:

4.2.1

Ships flying the flag of an EU Member State will have to establish and maintain during their whole operating life an inventory of the hazardous materials present on board. While new ships will have to establish an inventory immediately, existing ships will have five years to do so. The inventory has to be updated prior to sending the ship for recycling so as to ensure that the selected ship recycling facility is able and authorised to manage all the hazardous materials and waste present on board.

| 4.2.2 | A list of requirements for improved protection of the environment and public health to be fulfilled by the ship recycling facilities has been developed on the basis of the Hong Kong Convention. Individual recycling facilities fulfilling these requirements may be included in a European list of ship recycling facilities. Ships flying the flag of an EU Member State will only be allowed to be recycled in facilities present on the European list. |
| --- | --- |

4.2.2

A list of requirements for improved protection of the environment and public health to be fulfilled by the ship recycling facilities has been developed on the basis of the Hong Kong Convention. Individual recycling facilities fulfilling these requirements may be included in a European list of ship recycling facilities. Ships flying the flag of an EU Member State will only be allowed to be recycled in facilities present on the European list.

| 4.2.3 | Ships flying the flag of Member States will have to minimise the amount of hazardous waste present on board prior to delivery to a ship recycling facility. In the specific case of tankers, the ship owners will have to ensure that ships arrive at the ship recycling facility in a condition which is ready for certification as "safe for entry" and "safe for hot work" so as to prevent explosions and (fatal) accidents amongst workers in ship recycling facilities. |
| --- | --- |

4.2.3

Ships flying the flag of Member States will have to minimise the amount of hazardous waste present on board prior to delivery to a ship recycling facility. In the specific case of tankers, the ship owners will have to ensure that ships arrive at the ship recycling facility in a condition which is ready for certification as "safe for entry" and "safe for hot work" so as to prevent explosions and (fatal) accidents amongst workers in ship recycling facilities.

| 4.3 | In contrast to the existing legislation, the proposed Regulation is based on the system of control and enforcement of the Hong Kong Convention, which is specifically designed for international shipping. This will make it easier to ensure compliance with EU law. A major problem with the existing legislation is that it is difficult to establish when a ship becomes waste. Under the new system Member States will receive timely information about the planned start and about the completion of recycling. By comparing the list of ships for which they have issued an inventory certificate with the list of ships which have been recycled in authorised facilities, they will be able to identify illegal recycling more easily. |
| --- | --- |

4.3

In contrast to the existing legislation, the proposed Regulation is based on the system of control and enforcement of the Hong Kong Convention, which is specifically designed for international shipping. This will make it easier to ensure compliance with EU law. A major problem with the existing legislation is that it is difficult to establish when a ship becomes waste. Under the new system Member States will receive timely information about the planned start and about the completion of recycling. By comparing the list of ships for which they have issued an inventory certificate with the list of ships which have been recycled in authorised facilities, they will be able to identify illegal recycling more easily.

| 4.4 | In addition to economic factors, lack of capacity in Europe is an obstacle to responsible recycling. Capacity is just about sufficient for recycling the naval and other government-owned ships of the European states. Allowing ships to be recycled in facilities outside the OECD countries which meet the requirements for inclusion on the European list would address the problem facing ship owners of limited access to legal recycling capacity. This is particularly important in view of the peak in ship recycling expected in the next ten years. |
| --- | --- |

4.4

In addition to economic factors, lack of capacity in Europe is an obstacle to responsible recycling. Capacity is just about sufficient for recycling the naval and other government-owned ships of the European states. Allowing ships to be recycled in facilities outside the OECD countries which meet the requirements for inclusion on the European list would address the problem facing ship owners of limited access to legal recycling capacity. This is particularly important in view of the peak in ship recycling expected in the next ten years.

5.   General comments

| 5.1 | Ships are being scrapped in an irresponsible way. Most of them are scrapped in India, Pakistan or Bangladesh using the "beaching" method involving grounding them on a sandy beach, where they are scrapped by unskilled workers, including many children, without appropriate equipment and without any protection against the large quantities of hazardous substances released. Workers are exploited and are unable to protect themselves, as in many cases trade unions are not tolerated in these sectors, for example in Bangladesh and Pakistan. Governments do nothing to tackle these abuses. These are important economic activities for these countries, which are characterised by weak and corrupt government and, especially in this sector, strong and unscrupulous companies. |
| --- | --- |

5.1

Ships are being scrapped in an irresponsible way. Most of them are scrapped in India, Pakistan or Bangladesh using the "beaching" method involving grounding them on a sandy beach, where they are scrapped by unskilled workers, including many children, without appropriate equipment and without any protection against the large quantities of hazardous substances released. Workers are exploited and are unable to protect themselves, as in many cases trade unions are not tolerated in these sectors, for example in Bangladesh and Pakistan. Governments do nothing to tackle these abuses. These are important economic activities for these countries, which are characterised by weak and corrupt government and, especially in this sector, strong and unscrupulous companies.

| 5.2 | The economic importance of these activities does not lie only in employment but also, and above all, in the supply of raw materials. These countries cover most of their steel requirements from ship recycling. The employment aspect is also an important issue in these countries, but controversial from a social perspective. The work is done mainly by unskilled workers from the poorest population groups, who have work but not jobs as they are hired as day labourers. The European and global concept of having a job (ILO: Global Jobs Pact, 2009) means being able to live and support a family from it. Workers in the scrap yards on South East Asian beaches cannot live from their work; it merely helps them to survive for a time. And in practice many of them die as a result of it. Either quickly, in one of the many workplace accidents, or slowly from one of the incurable, malignant diseases they may contract as a result of their work. |
| --- | --- |

5.2

The economic importance of these activities does not lie only in employment but also, and above all, in the supply of raw materials. These countries cover most of their steel requirements from ship recycling. The employment aspect is also an important issue in these countries, but controversial from a social perspective. The work is done mainly by unskilled workers from the poorest population groups, who have work but not jobs as they are hired as day labourers. The European and global concept of having a job (ILO: Global Jobs Pact, 2009) means being able to live and support a family from it. Workers in the scrap yards on South East Asian beaches cannot live from their work; it merely helps them to survive for a time. And in practice many of them die as a result of it. Either quickly, in one of the many workplace accidents, or slowly from one of the incurable, malignant diseases they may contract as a result of their work.

| 5.3 | The European Union bears a major responsibility in this field as a large part of the global cargo fleet is in the hands of shipping companies based in the EU Member States. The Commission has been concerned about trends in the sector for years, partly because of the large-scale circumvention of the rules of the Basel Convention. A few years ago therefore it decided to do something about it. Over the last five years the Commission has produced a green paper on the subject, followed by a communication, and now it has published a proposal for a regulation. |
| --- | --- |

5.3

The European Union bears a major responsibility in this field as a large part of the global cargo fleet is in the hands of shipping companies based in the EU Member States. The Commission has been concerned about trends in the sector for years, partly because of the large-scale circumvention of the rules of the Basel Convention. A few years ago therefore it decided to do something about it. Over the last five years the Commission has produced a green paper on the subject, followed by a communication, and now it has published a proposal for a regulation.

| 5.4 | The proposal for a regulation on ship recycling is a rather pale reflection of the previous green paper and the communication on the same subject. The two previous documents provided an impeccable analysis of ship recycling problems in Bangladesh, India and Pakistan and expressed the view that robust measures were needed to tackle the unacceptable conditions in these countries. The measures proposed in the context of the proposal for a regulation do not however solve these problems. The EESC can only conclude that the political will is manifestly absent. This is not only a pity, it is also very striking. In other areas the Commission has shown the political will. |
| --- | --- |

5.4

The proposal for a regulation on ship recycling is a rather pale reflection of the previous green paper and the communication on the same subject. The two previous documents provided an impeccable analysis of ship recycling problems in Bangladesh, India and Pakistan and expressed the view that robust measures were needed to tackle the unacceptable conditions in these countries. The measures proposed in the context of the proposal for a regulation do not however solve these problems. The EESC can only conclude that the political will is manifestly absent. This is not only a pity, it is also very striking. In other areas the Commission has shown the political will.

| 5.5 | Little remains in the current proposal of the plans set out in the previous documents, for example, to impose certain obligations on ship owners, ship builders and cargo handlers to ensure the responsible decommissioning and recycling of ships reaching the end of their economic lives. The measures which are proposed are weak and full of legal loopholes. |
| --- | --- |

5.5

Little remains in the current proposal of the plans set out in the previous documents, for example, to impose certain obligations on ship owners, ship builders and cargo handlers to ensure the responsible decommissioning and recycling of ships reaching the end of their economic lives. The measures which are proposed are weak and full of legal loopholes.

| 5.6 | When the proposals for the Hong Kong Convention were complete, the participating states assessed whether the level of control and enforcement required by the Hong Kong Convention was equivalent to that provided for in the Basel Convention. No agreement was reached by the parties to the Basel Convention on the subject. The assessment of the IMO and the EU Member States, however, was positive. One reason for the different assessments may have been that the Hong Kong Convention only deals with the scrapping of ships. The Basel Convention on the other hand is mainly concerned with the responsible handling of hazardous substances and sets conditions for the downstream processes. The Hong Kong Convention has little to say about this. The EESC notes that the Commission proposal does address this issue in general terms and recommends that – with a view to authorising the recycling of ships in facilities situated in non-OECD countries, provided that they meet the requirements for inclusion on the European List – that the Regulation be based in particular on the existing guidelines of the relevant international organisations (7), as well as on the Convention itself and its technical guidelines. |
| --- | --- |

5.6

When the proposals for the Hong Kong Convention were complete, the participating states assessed whether the level of control and enforcement required by the Hong Kong Convention was equivalent to that provided for in the Basel Convention. No agreement was reached by the parties to the Basel Convention on the subject. The assessment of the IMO and the EU Member States, however, was positive. One reason for the different assessments may have been that the Hong Kong Convention only deals with the scrapping of ships. The Basel Convention on the other hand is mainly concerned with the responsible handling of hazardous substances and sets conditions for the downstream processes. The Hong Kong Convention has little to say about this. The EESC notes that the Commission proposal does address this issue in general terms and recommends that – with a view to authorising the recycling of ships in facilities situated in non-OECD countries, provided that they meet the requirements for inclusion on the European List – that the Regulation be based in particular on the existing guidelines of the relevant international organisations (7), as well as on the Convention itself and its technical guidelines.

| 5.7 | The Commission possibly goes further in its proposal than the provisions of the Hong Kong Convention but less far than the provisions of the Basel Convention. The Commission argues that it did not want to set the bar too high, or else states where scrapping takes place under conditions which endanger people and the environment might not accede to the Hong Kong Convention and the regulation would miss its target. This is a dubious argument: if a particular set of laws and regulations (the Basel Convention) is being regularly flouted, replacing that legislation with a new set of laws that are weaker in their implementation (the Hong Kong Convention) would not appear the most obvious way of tackling the problem. The Commission could have paid more attention in its proposal to an improved level of implementation. |
| --- | --- |

5.7

The Commission possibly goes further in its proposal than the provisions of the Hong Kong Convention but less far than the provisions of the Basel Convention. The Commission argues that it did not want to set the bar too high, or else states where scrapping takes place under conditions which endanger people and the environment might not accede to the Hong Kong Convention and the regulation would miss its target. This is a dubious argument: if a particular set of laws and regulations (the Basel Convention) is being regularly flouted, replacing that legislation with a new set of laws that are weaker in their implementation (the Hong Kong Convention) would not appear the most obvious way of tackling the problem. The Commission could have paid more attention in its proposal to an improved level of implementation.

| 5.8 | Two much-used ways of circumventing the requirements of the Basel Convention are reflagging a ship from a European Member State to a non-EU state or selling the ship to a buyer. If the sale takes place in European waters, the buyer may not export the ship to a non-OECD country for recycling, as it falls under the rules of the Basel Convention. But the buyer can make a declaration, stating that he is not buying the ship for scrapping but for economic use. As soon as a ship of this type has left European waters it often immediately sets sail for the beaches of South East Asia, and the declaration proves to have been false. |
| --- | --- |

5.8

Two much-used ways of circumventing the requirements of the Basel Convention are reflagging a ship from a European Member State to a non-EU state or selling the ship to a buyer. If the sale takes place in European waters, the buyer may not export the ship to a non-OECD country for recycling, as it falls under the rules of the Basel Convention. But the buyer can make a declaration, stating that he is not buying the ship for scrapping but for economic use. As soon as a ship of this type has left European waters it often immediately sets sail for the beaches of South East Asia, and the declaration proves to have been false.

| 5.9 | The EESC notes that the Commission's proposal incorporates the main elements of the Hong Kong Convention, which apportions responsibility between flag states, recycling states and port states on the one hand, and ship owners, shipbuilders and recycling facilities on the other. The Committee has doubts, however, about the balance of this apportionment and would have liked to see the position of the previous owners/beneficial owners addressed. |
| --- | --- |

5.9

The EESC notes that the Commission's proposal incorporates the main elements of the Hong Kong Convention, which apportions responsibility between flag states, recycling states and port states on the one hand, and ship owners, shipbuilders and recycling facilities on the other. The Committee has doubts, however, about the balance of this apportionment and would have liked to see the position of the previous owners/beneficial owners addressed.

| 5.10 | What is lacking in the proposal is, for example, an economic instrument which the Commission could use to guide developments in the desired direction. The possibility of an instrument of this kind was mooted in the previous documents. The Commission had a study carried out on the possibility of establishing a fund to which every ship docking in a European port would have to contribute. The amount of the contribution would be determined by a combination of tonnage and toxicity. The use of a fund of this kind fits in perfectly with the "polluter pays" principle. The money could be used in part to improve working conditions in South East Asia, by training workers in safe working practices, by raising local awareness of the dangers of the irresponsible scrapping of large seagoing ships and by improving local public infrastructure. |
| --- | --- |

5.10

What is lacking in the proposal is, for example, an economic instrument which the Commission could use to guide developments in the desired direction. The possibility of an instrument of this kind was mooted in the previous documents. The Commission had a study carried out on the possibility of establishing a fund to which every ship docking in a European port would have to contribute. The amount of the contribution would be determined by a combination of tonnage and toxicity. The use of a fund of this kind fits in perfectly with the "polluter pays" principle. The money could be used in part to improve working conditions in South East Asia, by training workers in safe working practices, by raising local awareness of the dangers of the irresponsible scrapping of large seagoing ships and by improving local public infrastructure.

| 5.11 | The EESC prompts the European Commission to investigate the possibility of using this money to develop scrapping capacity and to establish a recycling industry in Europe. There is sufficient dock capacity in the EU which is no longer, or only partly, used for building and repairing ships but which is suitable for the decommissioning and recycling of ships. This would fit in with the European Union's ambition to develop into a sustainable "recycling society", a society in which waste is turned into raw materials by means of a sophisticated and fine-meshed recycling system. This could produce considerable economic gains in terms of valuable materials which could meet a significant proportion of the demand for raw materials and generate many new jobs. In view of steadily rising raw material prices and high unemployment in a number of European Member States, this could be highly profitable for Europe as a whole. |
| --- | --- |

5.11

The EESC prompts the European Commission to investigate the possibility of using this money to develop scrapping capacity and to establish a recycling industry in Europe. There is sufficient dock capacity in the EU which is no longer, or only partly, used for building and repairing ships but which is suitable for the decommissioning and recycling of ships. This would fit in with the European Union's ambition to develop into a sustainable "recycling society", a society in which waste is turned into raw materials by means of a sophisticated and fine-meshed recycling system. This could produce considerable economic gains in terms of valuable materials which could meet a significant proportion of the demand for raw materials and generate many new jobs. In view of steadily rising raw material prices and high unemployment in a number of European Member States, this could be highly profitable for Europe as a whole.

| 5.12 | If Europe wants its ships to be scrapped in a responsible way, it is not unreasonable that it should pay part of the cost of building the capacity needed to ensure that this is done in an appropriate manner. In a market economy nothing is free, and a price has to be paid for everything. The price for the responsible scrapping of ships is paid in money. When ships are scrapped in an irresponsible way the price is paid in other currencies, such as destruction of the local environment and the loss of human lives. Given that we in the EU do not wish to accept these currencies as a legal means of payment, we must also not accept their use as a means of payment in trade with countries outside Europe. The Commission could place more emphasis on this. The EESC therefore considers that Commission should have produced a better, more creative, more adventurous proposal, richer in initiatives, in line with the level of ambition of the previous Commission documents and the Committee's opinions on them. |
| --- | --- |

5.12

If Europe wants its ships to be scrapped in a responsible way, it is not unreasonable that it should pay part of the cost of building the capacity needed to ensure that this is done in an appropriate manner. In a market economy nothing is free, and a price has to be paid for everything. The price for the responsible scrapping of ships is paid in money. When ships are scrapped in an irresponsible way the price is paid in other currencies, such as destruction of the local environment and the loss of human lives. Given that we in the EU do not wish to accept these currencies as a legal means of payment, we must also not accept their use as a means of payment in trade with countries outside Europe. The Commission could place more emphasis on this. The EESC therefore considers that Commission should have produced a better, more creative, more adventurous proposal, richer in initiatives, in line with the level of ambition of the previous Commission documents and the Committee's opinions on them.

6.   Specific comments

| 6.1 | The EESC supports the objective of the proposal on ship recycling and the general approach taken by the Commission but has major reservations about its implementation in practice. The Committee is critical of the following provisions. |
| --- | --- |

6.1

The EESC supports the objective of the proposal on ship recycling and the general approach taken by the Commission but has major reservations about its implementation in practice. The Committee is critical of the following provisions.

| 6.2 | Article 15 of the regulation states that recycling facilities located outside the Union may be placed on a European list if they meet the requirements set by the EU for responsible scrapping. However, the facilities themselves have to provide proof that they meet the requirements. Site inspections by the Commission or agents acting on its behalf are only included as an option in the proposed Regulation. The EESC calls on the Commission to set up an explicit, effective mechanism for inspections and supervision by independent third parties in order to ensure compliance with the requirements set out in Article 12. |
| --- | --- |

6.2

Article 15 of the regulation states that recycling facilities located outside the Union may be placed on a European list if they meet the requirements set by the EU for responsible scrapping. However, the facilities themselves have to provide proof that they meet the requirements. Site inspections by the Commission or agents acting on its behalf are only included as an option in the proposed Regulation. The EESC calls on the Commission to set up an explicit, effective mechanism for inspections and supervision by independent third parties in order to ensure compliance with the requirements set out in Article 12.

| 6.3 | Article 12 provides a summary of the requirements with which recycling facilities have to comply in order to be included in the European list. There is not much to be said about the requirements themselves. However, the transitional provision of Article 28 states that Member States may, prior to the publication of the European list, recognise ship recycling facilities located outside the Union subject to the verification that the ship recycling facility complies with the requirements set out in Article 12 based on the information provided by the shipowner, the ship recycling facilities or acquired by other means. Once again, the EESC calls on the Commission to set up an explicit, effective mechanism for inspections and supervision by independent third parties in order to ensure compliance with the requirements set out in Article 12. |
| --- | --- |

6.3

Article 12 provides a summary of the requirements with which recycling facilities have to comply in order to be included in the European list. There is not much to be said about the requirements themselves. However, the transitional provision of Article 28 states that Member States may, prior to the publication of the European list, recognise ship recycling facilities located outside the Union subject to the verification that the ship recycling facility complies with the requirements set out in Article 12 based on the information provided by the shipowner, the ship recycling facilities or acquired by other means. Once again, the EESC calls on the Commission to set up an explicit, effective mechanism for inspections and supervision by independent third parties in order to ensure compliance with the requirements set out in Article 12.

| 6.4 | Article 23 proposes penalties for breaches of the regulation, which may be of a civil or administrative nature and should be effective, proportionate and dissuasive. Specific penalties are not laid down. The same article also provides that penalties may be imposed on the penultimate owner where a ship is sold and, within less than six months after the selling, is sent for recycling in a facility which is not included in the European list. The Committee points out, however, that six months is a short period in the average life cycle of a ship. The Committee also points out that the conditions for the exemption from penalties in the event that the shipowner can show that he has not sold the ship with the intention of having it recycled can easily be met by means of declarations, as has repeatedly been seen in connection with the current problems with implementing the Basel Convention. |
| --- | --- |

6.4

Article 23 proposes penalties for breaches of the regulation, which may be of a civil or administrative nature and should be effective, proportionate and dissuasive. Specific penalties are not laid down. The same article also provides that penalties may be imposed on the penultimate owner where a ship is sold and, within less than six months after the selling, is sent for recycling in a facility which is not included in the European list. The Committee points out, however, that six months is a short period in the average life cycle of a ship. The Committee also points out that the conditions for the exemption from penalties in the event that the shipowner can show that he has not sold the ship with the intention of having it recycled can easily be met by means of declarations, as has repeatedly been seen in connection with the current problems with implementing the Basel Convention.

| 6.5 | In Article 30 the Commission undertakes to review the regulation not later than two years after the date of entry into force of the Hong Kong Convention. As this is expected in 2020, the review of the regulation would therefore take place in 2022. The Commission is considering the inclusion of facilities authorised by the parties to the Hong Kong Convention in the European list of ship recycling facilities in order to avoid duplication of work and administrative burdens. It is very possible that the facilities recognised by the parties to the Hong Kong Convention, i.e. those working downstream of scrapping and required to handle hazardous substances responsibly, will not meet the requirements of the European list. This will also weaken current practice. |
| --- | --- |

6.5

In Article 30 the Commission undertakes to review the regulation not later than two years after the date of entry into force of the Hong Kong Convention. As this is expected in 2020, the review of the regulation would therefore take place in 2022. The Commission is considering the inclusion of facilities authorised by the parties to the Hong Kong Convention in the European list of ship recycling facilities in order to avoid duplication of work and administrative burdens. It is very possible that the facilities recognised by the parties to the Hong Kong Convention, i.e. those working downstream of scrapping and required to handle hazardous substances responsibly, will not meet the requirements of the European list. This will also weaken current practice.

| 6.6 | The EESC points out that, where ship recycling is carried out using the beaching method, workplace safety is completely inadequate, workers are exploited and the consequences for the environment are disastrous. Ships are scrapped on the beach by hand and all the hazardous substances they contain (oil, sludge oil, PCBs etc) run freely into the sea or seep into the sand. Studies have shown that flora and fauna have completely disappeared from a wide area around the scrapping beaches. In view of the EU's sustainability agenda, the Commission might be expected to exclude recycling facilities using these methods from the European list. This is not clear at present. |
| --- | --- |

6.6

The EESC points out that, where ship recycling is carried out using the beaching method, workplace safety is completely inadequate, workers are exploited and the consequences for the environment are disastrous. Ships are scrapped on the beach by hand and all the hazardous substances they contain (oil, sludge oil, PCBs etc) run freely into the sea or seep into the sand. Studies have shown that flora and fauna have completely disappeared from a wide area around the scrapping beaches. In view of the EU's sustainability agenda, the Commission might be expected to exclude recycling facilities using these methods from the European list. This is not clear at present.

Brussels, 12 July 2012.

The President of the Economic and Social Committee

Staffan NILSSON

---

(1)  Technical Guidelines for the Environmentally Sound Management of the Full and Partial Dismantling of ships, Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, UNEP;

1

Guidelines on Safety and Health in Shipbreaking: Guidelines for Asian countries and Turkey, International Labour Organization (ILO);

Guidelines on Ship Recycling, International Maritime Organization (IMO).

(2)  Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on shipments of waste.

2

(3)  COM(2007) 269 final.

3

(4)  COM(2008) 767 final.

4

(5)  CESE 1701/2007, OJ C 120, 16.5.2008 p. 33; CESE 877/2009, OJ C 277, 17.11.2009, p. 67.

5

(6)  COM(2012) 118 final.

6

(7)  See footnote 1.

7

---

APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendments, which received at least a quarter of the votes cast, were rejected during the discussion:

Point 5.5

Amend as follows:

Little remains in the current proposal of the plans set out in the previous documents, for example, to impose certain obligations on ship owners, ship builders and cargo handlers to ensure the responsible decommissioning and recycling of ships reaching the end of their economic lives. The measures which are proposed and legal.

Result of the vote

| For | 70 |
| --- | --- |
| Against | 72 |
| Abstentions | 0 |

For

70

Against

72

Abstentions

0

Point 5.7

Amend as follows:

The Commission possibly goes further in its proposal than the provisions of the Hong Kong Convention but less far than the provisions of the Basel Convention. The Commission argues that it did not want to set the bar too high, or else states where scrapping takes place under conditions which endanger people and the environment might not accede to the Hong Kong Convention and the regulation would miss its target.

Result of the vote

| For | 65 |
| --- | --- |
| Against | 86 |
| Abstentions | 0 |

For

65

Against

86

Abstentions

0

Point 5.10 and point 1.5 (voted together)

Delete paragraph:

Result of the vote

| For | 69 |
| --- | --- |
| Against | 80 |
| Abstentions | 2 |

For

69

Against

80

Abstentions

2

---

| 4.10.2012 | EN | Official Journal of the European Union | C 299/165 |
| --- | --- | --- | --- |

4.10.2012

EN

Official Journal of the European Union

C 299/165

---

Opinion of the European Economic and Social Committee on the ‘Key Actions towards a Single Market Act II’ (exploratory opinion)

2012/C 299/30

Rapporteur-General: Mr VOLEŠ

On 27 June 2012 the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Key Actions towards a Single Market Act II

(exploratory opinion).

On 28 June 2012 the President instructed the Section for the Single Market, Production and Consumption to prepare the Committee's work on the subject.

Given the urgent nature of the work, the European Economic and Social Committee appointed Mr VOLEŠ as rapporteur-general at its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 12 July), and adopted the following opinion by 176 votes to five with two abstentions.

1.   Introduction

1.1   The Commission presented proposals for ten of the Twelve Levers resulting from the Single Market Act by the end of 2011 and the remaining two followed in the first half of 2012. In addition, the Commission has tabled proposals for or completed 28 of the remaining 50 measures announced in the Single Market Act.

1.2   Specific proposals on Single Market governance targeted information of citizens and businesses on the opportunities of the Single Market, on the improvement of the implementation of Single Market rules by Member States and on ensuring their effective enforcement. Little progress has been made in this particular area despite the fact that citizens and businesses consider this to be one of the major shortcomings.

1.3   The focus on Twelve Levers allowed the Commission to make progress faster than otherwise possible. The European Parliament and the Council have been asked to adopt the legislative proposals before the end of 2013 so that they can be implemented by 2014. The fast, full and correct transposition and implementation of adopted legislation will be a major task for the member states.

1.4   The Commission will celebrate the 20th anniversary of the Single Market with a Single Market Week across Europe in October 2012 with events in all 27 Member States. The second Single Market Forum will maintain the political momentum created by the Single Market Act, review progress made on its implementation, and consider future priorities to boost growth and strengthen confidence.

1.5   In a letter of 27 June, Commission's Vice-President Maroš Šefčovič requested the EESC's contribution to the ongoing debate on the grounds that its members represented the diversity of social and economic players providing consensual added value to the work in progress.

2.   General comments and recommendations

2.1   The proposals for a Single Market Act II must not ignore the difficult situation in the EU resulting from the inability of several Member States to remedy their public deficits, prevailing stagnation of GDP and rising unemployment. The proposals should therefore include not only short time measures with immediate effect on growth and employment but also medium and long-term measures that would guarantee a sustainable development and bring benefits for all EU citizens also for the future.

2.2   A revised and updated Europe 2020 Strategy should be the overall guideline for the development of the Single Market as the most precious achievement of European integration and a tool for reaching the goals of the Strategy.

2.3   The preparation of the new set of proposals to enhance the Single Market should take into consideration the views of all stakeholders including civil society organisations and social partners.

2.4   The measures to release the potential of the Single Market for businesses, consumers, citizens and other stakeholders should be taken mainly in the field of services, access to finance, removal of administrative burden for SMEs, e-commerce, digital Single Market and mobility. They should be accompanied by actions aimed at reinforcing consumer protection and confidence on the one hand and taking due account of the social aspects of the Single Market by supporting the social economy and respecting the need for social cohesion as well as citizens' rights and interests, on the other.

2.5   In its previous opinions on the Single Market Act (1) and on the Twelve Levers (2), the EESC had pointed out a number of issues it still considers crucial:

| — | Communicating on the advantages of the Single Market for citizens and businesses is crucial and intermediaries such as political parties, civil society organizations, media and education among others have a responsibility in contributing to having Europeans understanding what is at stake; |
| --- | --- |

—

Communicating on the advantages of the Single Market for citizens and businesses is crucial and intermediaries such as political parties, civil society organizations, media and education among others have a responsibility in contributing to having Europeans understanding what is at stake;

| — | The European Commission should raise awareness of the citizens on Single Market issues using many networks, agencies and other tools at its disposal (3). |
| --- | --- |

—

The European Commission should raise awareness of the citizens on Single Market issues using many networks, agencies and other tools at its disposal (3).

2.6   Later this year, the Committee will draft an own-initiative opinion on the missing measures from the Single Market Act. These included inter alia copyright levies (covered by the Single Market Act II), the revision of the copyright directive, net neutrality, data protection, investor protection, the social progress protocol, European private company statutes, e-procurement, European credit rating agencies, gender equality, micro- and family businesses, measures to support the formation of new companies and the extension of existing ones, credit and debit cards, e-payments, consumer credit and over indebtedness, interbank transfers, youth, measures to complete the implementation of the Euro and the operation of the Single European Payment Area (SEPA).

2.7   The Committee expects to be involved in any consultation process related to the legislative and non legislative measures of the Commission's rolling programme that will be part of the Single Market Act II and will develop detailed recommendations when the individual actions of the Commission will be turned into proper proposals.

3.   Levers and key actions

3.1   Services

3.1.1   Basic payment accounts available to all citizens are necessary and must be swiftly brought about. The Committee calls for regulatory measures on this, on transparency of fees and on easy switching of accounts.

3.1.2   Parcel delivery especially in e-commerce (4) and cross-border insolvency proceedings are further areas to be considered as priorities.

3.1.3   The EESC proposes also to include measures to consolidate the operation of the Single European Payments Area (SEPA).

3.1.4   The Committee reiterates its support for the extension of the standards on services taking into consideration at the same time their specific character and market and societal needs.

3.2   Digital Single Market

3.2.1   The Committee considers that the completion of the digital Single Market will be a key plank in the relaunch of the Single Market. In its previous opinion the Committee stated that electronic commerce is one of the victims of the fragmentation of the Single Market, which hinders the full exploitation of the potential of on-line cross-border trade for both providers and consumers. To solve these problems actions have to be taken to complement the measures already prepared by the Commission, namely high data protection, open internet, net neutrality, the removal of barriers based on nationality/residence, e-signature, e-payment, broadband investment, universal access, accessibility of hardware and software for everybody and legislation for online services accompanied by a consistent consumer policy.

3.2.2   The EESC considers it essential to ensure administrative cooperation between Member States and to open e-government services, which could be facilitated through the generalised use of IMI.

3.2.3   The EESC stresses the need to take particular account of the advantages of the widespread dissemination of electronic invoicing but it believes it should remain optional with equal treatment of paper while any additional burden for SMEs should be avoided.

3.3   Networks

3.3.1   The EESC pays special attention to networks (transport, energy, communications) that play a substantial role in connecting Europe. Regarding railways the EESC supports the idea of creating a Single Railway Area that would be able to compete with other modes of transport. It recommends exploring the option of setting up a compensation fund similar to those existing already in various network industries. Absolute priority should be given to the general implementation of the European signalling and traffic management system in conjunction with the European Train Control System.

3.3.2   Regarding air transport the creation of a Single European Sky is essential to ensure the competitiveness of the EU aviation industry in the global market place. The development of SESAR needs to be addressed: a) ensure the synchronised deployment of airborne and ground infrastructure upgrades; b) secure timely and adequate financial resources for SESAR deployment; c) establish the right governance for the deployment of SESAR. It should also be open to SMEs.

3.3.3   The Committee calls for a swift revision of Regulation (EC) No 261/2004 (5) to modernise passenger rights in respect to overbooking, delays and also to package holidays.

3.3.4   The European seaport policy should address the following themes:

| a) | Ensuring sustainable development of port and port-related capacity; |
| --- | --- |

a)

Ensuring sustainable development of port and port-related capacity;

| b) | Creating a clear and transparent framework on financing of port investments; |
| --- | --- |

b)

Creating a clear and transparent framework on financing of port investments;

| c) | Clarifying procedures regarding market access for port services; |
| --- | --- |

c)

Clarifying procedures regarding market access for port services;

| d) | Solving operational bottlenecks that hamper port efficiency; |
| --- | --- |

d)

Solving operational bottlenecks that hamper port efficiency;

| e) | Promoting good and safe working conditions and constructive labour relations in ports; |
| --- | --- |

e)

Promoting good and safe working conditions and constructive labour relations in ports;

| f) | Promoting the overall competitiveness and positive perception of ports. |
| --- | --- |

f)

Promoting the overall competitiveness and positive perception of ports.

3.3.5   A European policy for seaports does not necessarily imply producing new legislation. "Soft law" in particular may be a valuable alternative to legislation on the one hand and a case-by-case approach on the other.

3.3.6   Regarding Energy networks, the Committee endorses the Commission's recent initiatives aimed at pressing ahead with interconnection and completing the internal market in energy.

3.3.7   The Committee supports the principle of creating a European Energy Community (EEC) and endorses the interim steps that this would entail, including regional European energy networks, a renewable energy development fund and a gas-purchasing group.

3.3.8   The Committee is of the opinion that time is ripe for a critical assessment of the liberalisation of the energy market, as the results for citizens and business have not brought the foreseen lower prices.

3.4   Access to finance

3.4.1   Due to financial crisis, access to credit can be difficult for companies especially SMEs in many Member States, with negative repercussions on their business activity. To enable the private sector and especially SMEs and social enterprises to generate growth and jobs access to capital is crucial. However, banks are increasingly unwilling to lend to businesses, notably innovative enterprises and start-ups that present both the greatest risks and the greatest potential for growth.

3.4.2   For this reason the EESC invites the Commission to support SMEs to tap debt capital markets directly, develop SME-targeted bond platforms, and explore ways to improve mezzanine finance and look into new mezzanine products, such as a guarantee for mezzanine loans. In this regard, the Commission should provide guidance to all stakeholders on good practice in combining and leveraging financial instruments from different sources.

3.4.3   The EESC recommends that negotiations with Member States on the future structural funds take into consideration the need for the creation of financial instruments supporting guarantees for SME loans.

3.5   Taxation

3.5.1   The Committee calls for actions that would address the divergent tax rules and administrative complications, which are one of the major obstacles for SMEs preventing them from expanding within the Single Market.

3.5.2   Even without harmonisation of taxes many obstacles in this field can be removed, among others double taxation, which is a serious obstacle to cross-border activities with negative economic implications on investment and employment. The present complicated VAT recovery systems in cross-border trade and services can lead to tax evasion and fraud, which must be fought more effectively. A standard EU VAT declaration would contribute to administrative simplification.

3.5.3   The Committee is of the opinion that taxation in the Member States should not lead to the creation of tax havens with negative impacts on economy and public budgets.

3.5.4   Attention should be paid to the VAT regime for financial services, and certainly if a new financial sector tax based on cash flows or similar factors were to be introduced, the Commission should assess the merits of designing it within the VAT framework.

3.5.5   The EESC also calls for an introduction of general rules to pay the VAT only when an invoice has been paid by the customer. This system, already applied in some Member States for small companies known as cash accounting avoids that the VAT is charged on sales whether or not the customer has paid. In the current economic downturn it could prevent the insolvency especially of SMEs.

3.6   Business environment

3.6.1   The EESC stresses the need to pay special attention to the issues that are not sufficiently covered by EU legislation and by support programmes such as self-employed people.

3.6.2   The Committee stresses the need to reduce the unnecessary administrative burden further and expects that the Commission will propose the targets after 2012 when the administrative burden should have been reduced by 25 %. The Committee notes that a reduction of unnecessary burden is always desirable be it for businesses, consumers or public authorities but that there needs to be a careful assessment to ensure that the original purpose of the legislation is not compromised.

3.7   Social entrepreneurship

3.7.1   The Social Business Initiative will be reviewed in 2014. In close cooperation with the Expert group on Social Business, the Commission will take stock of what it has delivered and determine what must still be done. The EESC urges that the comments made in the opinions it has recently adopted on social enterprise be taken into proper account (6).

3.7.2   The Committee stresses the need to increase the level of knowledge about the role and spread of social businesses in order to enhance their actual impact on the community. This will require the development of a methodology for the measurement of this impact. Such a measurement will also be required to implement the European Social Entrepreneurship Fund.

3.7.3   The Committee is of the opinion that the proposal of the European Foundation and all other European Corporate forms has to be assessed against the background of the consultation on the renewal of European company law.

3.8   Consumers

3.8.1   The Committee is looking forward to a legislative proposal on collective redress in the near future. Such a proposal must lead to a collective redress mechanism, which operates both nationally and across borders and is accessible to all consumers within the Single Market. These mechanisms should be available to all who have their rights infringed upon within the Single Market. Not only consumers see their rights violated by providers of goods and services, by unfair contract terms and unfair commercial practices. Also workers whose rights are violated and citizens in general who suffer from discrimination should have access to collective redress systems. SMEs may need similar protection against unfair commercial practices.

Further preparations should take into account the views of all stakeholders.

3.8.2   The EESC calls for regulatory measures to achieve an integrated Single Market for cards, Internet and mobile payments.

3.8.3   With regards to product safety rules, the Committee calls for the application of two basic principles:

| — | the life cycle philosophy. This means the application of requirements for the safety of products for all users and involved workers. Reference to the life cycle covers all phases of a product's life, from procurement of the raw materials through to disposal; |
| --- | --- |

—

the life cycle philosophy. This means the application of requirements for the safety of products for all users and involved workers. Reference to the life cycle covers all phases of a product's life, from procurement of the raw materials through to disposal;

| — | the promotion of the cradle to grave approach whereby the sustainability of the product should be a key aspect of the production. |
| --- | --- |

—

the promotion of the cradle to grave approach whereby the sustainability of the product should be a key aspect of the production.

3.9   Mobility of citizens

3.9.1   The Committee reiterates the need to achieve increased mobility for citizens by modernising the system for recognising professional qualifications. Promoting the occupational and geographical mobility of workers could help improve the functioning of European labour markets and the provision of cross-border services. The debate on the recognition is not always meaningful at the level of 27 Member States. More emphasis has to be placed on the actual need (in cross-border situations and between neighbouring countries), based on an analysis of the mobility patterns. The EU should stimulate regional cooperation in this field and promote joint cross border vocational training.

3.9.2   Regarding the portability of pension rights, the White Paper (7) is too much focusing on improvement of individual third pillar pensions. First and second pillar schemes need to be improved in order to guarantee structural benefits also for people moving throughout Europe.

3.9.3   The Committee is also concerned about the recent Council decision to renationalise the Schengen Agreement, allowing the establishment of new obstacles to the free movement of citizens within the Union and reintroducing border controls in places where they had been abolished. This is a flagrant breach of the fundamental principles of the Treaty and creates more difficulties for the completion of the Single Market.

3.10   Social Cohesion

3.10.1   The Committee is of the opinion that there is a need to clarify the enforcement rules and the reference to article 3.3 of the Lisbon Treaty where it is said that the internal market is not a goal in itself, but an instrument to achieve social progress and a sustainable society for the European citizens.

3.11   Public Procurement

3.11.1   Public procurement has to be established by rules that not only refer to the best price; other criteria related to the social benefits and the impact on sustainability must be weighted on an equal footing.

3.11.2   It should be considered to which extent EU public procurement markets could sustainably remain open whilst third countries maintain an unlevelled playing field. In this respect, ratified ILO conventions and Human Rights have to be respected by all players, Member States and third countries alike. The EU should actively promote this policy at global level.

3.11.3   More could be achieved through e-procurement to speed up administrative procedures.

3.12   Intellectual property rights

3.12.1   For consumers, the current IPR legal framework is bewildering; this is even worse on a pan-European level. The legal framework needs to be clarified and legal sanctions and enforcement need to be proportionate: individual consumers who might infringe IPR inadvertently and/or at a small scale for their personal consumption may have to be treated differently from large/commercial scale criminal activity.

3.12.2   A more pan-European approach to licensing and levies is needed.

Brussels, 12 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

---

(1)  OJ C 132, 03.05.2011, p. 47.

1

(2)  OJ C 24, 28.01.2012, p. 99.

2

(3)  SOLVIT, Enterprise Europe Network, European Consumer Centres, Eurocentres, etc.

3

(4)  As illustrated by one of the video clips of the "Tell us your story" competition organised by DG MARKT. The Single Market Observatory’s public hearing in Tallinn on 1 June 2012 touched upon the follow-up to the issues raised in these videos by citizens.

4

Tell us your story

(5)  Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91.

5

(6)  See opinions OJ C 24, 28.1.2012, p. 1,. OJ C 229, 31.7.2012, p. 44 and OJ C 229, 31.7.2012, p. 55.

6

(7)  White paper "An agenda for adequate, safe and sustainable pensions", COM(2012) 55 final.

7

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| 4.10.2012 | EN | Official Journal of the European Union | C 299/170 |
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4.10.2012

EN

Official Journal of the European Union

C 299/170

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Opinion of the European Economic and Social Committee on the ‘Transport White Paper: getting civil society on board’ (exploratory opinion)

2012/C 299/31

Rapporteur: Stefan BACK

On 11 January 2012 the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Transport White Paper: getting civil society on board

(exploratory opinion).

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 25 June 2012.

At its 482nd plenary session, held on 11 and 12 July 2012 (meeting of 11 July), the European Economic and Social Committee adopted the following opinion by 140 votes to 3 with 7 abstentions.

1.   Conclusions and recommendations

1.1   The EESC should initiate the setting up of a framework for an open and transparent exchange of views on the implementation of the White Paper between civil society, the Commission and other relevant players such as national authorities at different levels. That way acceptance and understanding can be improved in civil society and useful feedback be provided for policy makers and those responsible for implementation.

1.2   A dialogue should be multilayer and involve national, regional and local levels of both civil society and government. Civil society is to be understood in a large sense, including but not restricted to, business, employers, employees, users, NGOs and academia.

1.3   A dialogue must ensure a two way communication. It must provide an opportunity for the European Commission to communicate on proposals and policy actions. At the same time it must provide in particular civil society as well as regional and local level government with an opportunity to connect with the Commission, the EESC and other relevant institutions to submit comments and raise problems and questions related to EU transport policy and its implementation with the certainty that they will get an answer. An open and constructive dialogue is important to improve acceptance of policy measures, including legislative proposals and infrastructure plans.

1.4   It should be possible to raise concrete problems, for instance with respect to accessibility for disabled persons, quality of local transport and the adequacy in certain contexts of transport policy aims such as modal shift or transports above a given distance.

1.5   A dialogue along these lines may improve understanding and acceptance of EU transport policy aims and proposed implementation measures. It may improve understanding in EU institutions of practical realities and the need to take account of different conditions in different parts of the EU and improve the possibilities to find satisfactory solutions to concrete problems and answer raised concerns.

1.6   Continuity and follow up on questions raised are important elements in a successful dialogue, as well as timely communication from the Commission prior to planned initiatives. An agreement should be reached with the Commission regarding its involvement to ensure an efficient, open and transparent dialogue. The EESC understands that the Commission attaches particular importance to dialoguing on infrastructure projects and actions involving behavioural change. The EESC also feels that the scope of a dialogue should be wider and that it could bring added value to most initiatives.

1.7   Involvement of youth is an important element in a dialogue, in order to create interest in and acceptance of EU transport policy aims.

1.8   A dialogue should largely be based on internet communication. This should include a dedicated website. Use of social media such as Facebook and Twitter should be considered. Adequate management of the internet dialogue is important to make sure that the systems works. A dedicated section of the web place for the dialogue should be oriented toward youth. There should also be a number of relevant external links, for instance to the Commission’s web place for the Citizen’s Initiative.

1.9   Internet should not be the exclusive means of communicating. Conferences or other arrangements, organised as required, could complement the internet dialogue and provide a forum to discuss two or three subjects. Likewise, direct contacts between the EESC and civil society representatives should take place whenever considered useful. Questions and concerns raised in those contexts should be brought to the attention of the Commission.

1.10   As appropriate, questions or problems raised in the course of the dialogue could give rise to own initiative resolutions by the EESC, and influence its opinions regarding matters referred to it.

1.11   Considering the involvement of regional and local government in the dialogue, contacts should be taken with the Committee of Regions (CoR) to seek an arrangement to involve the CoR in the dialogue and its management, with due regard to the respective roles of the EESC and the CoR.

1.12   In the EESC the dialogue should be managed by a steering committee from the TEN Section of the EESC, with the support of the TEN Secretariat and in continuous cooperation with CoR and the Commission.

1.13   Details of the management, as well as of the administration of the internet dialogue, resources required and budget issues should be looked into by a task force, which is to deliver its suggestions by the end of 2012. Slim and simple management and administrative solutions should be sought, as far as possible within existing resources. The option of sharing costs involved in managing the dialogue with the CoR might be considered.

1.14   The target date for starting the dialogue should be early 2013.

2.   Introduction

2.1   The White Paper: Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system (the Roadmap) sets ten goals for a competitive and resource-efficient transport system serving as benchmarks for achieving the 60 % GHG (Greenhouse gas) emission reduction target. The long term goals set out the global aims for 2050, while other goals-point to milestones in 2020 or 2030. The White Paper also sets out a strategy comprised of 40 initiatives to contribute to the achievement of these goals over the next ten years.

2.2   The 40 initiatives set out in the roadmap are to be implemented by 2020. Some are legislative. But many are built on national or local initiatives or on encouragement of behavioural change either because there is limited EU competence or because legislation is not a sufficient tool to bring about the behavioural changes that are essential for the success of a given initiative. Also with respect to a number of legislative initiatives behavioural change is important to success.

2.3   In a letter dated 11 January 2012, the European Commission has requested the views of the EESC on how civil society can be engaged to buy into the objectives of the White Paper and contribute to achieving its long term vision of transport. The letter specifically brings up the need to reconcile national and European interests regarding important infrastructure projects in the TEN T, and how support and contributions from civil society can be obtained for the long term goals set out in the White Paper.

2.4   A comparison may be made with the EESC role in the implementation of the Europe 2020 strategy through the establishment of a new horizontal “Europe 2020 Steering Committee” to allow more efficient interaction between the EESC bodies and national stakeholders with a view to identifying and planning particular initiatives and best practices in the on-going reform process in the Member States. A report on the civil society evaluation of the elaboration of National Reform Programmes (NRP) and the involvement of civil society in that process was published on 23 February 2011, to provide the Commission with input for the European Spring Council.

2.5   Also the Single Market Act foresees to “Involve civil society and promote a culture of evaluation”. The Act states that the public consultation had highlighted the willingness of civil society to be more closely involved in the development of the single market. The Commission will therefore regularly publish a list of citizens’ and enterprises’ 20 main expectations regarding the single market. The list will be submitted to the single market forum which will periodically gather together market participants, e.g. business, social partners, and non-governmental organizations (NGO) and those representing citizens, public authorities at various levels and parliaments. It will examine the state of the single market and exchange best practice. It will contribute to the development of a policy evaluation culture and as such will play its part in monitoring the Single Market Act and help to measure the impact of that Act at grassroots level. The social partners should also have an enhanced role and be given the opportunity to present their positions on issues relating to economic and social cohesion.

2.6   A first set of expectation, based on a study has been published in the autumn of 2011.

2.7   Concept ideas for a European Energy Mix Forum (EEMF) are also currently being evaluated in the EESC. A suggestion for a permanent structure with a steering committee, a permanent secretariat, yearly conferences and up to six working group meetings per year is being considered against questions relating to financing, institutional matters, appropriateness and legal basis. The concept also includes a network of national fora.

3.   General Comments

3.1   The EESC takes the view that the task now at hand is similar to the ones referred to above. It focuses on support for and contributions to the long term transport goals set out in the White Paper from civil society and acceptance of infrastructure projects. The Commission also seems to seek the views of civil society whether the 60 % reduction of GHG emissions and the corresponding ten goals of the White Paper can be reached with the current tools available for the Commission.

3.2   The EESC takes note that Article 11 (1) – (3) of the Treaty on European Union (TEU) provides a formal basis for this kind of exercise. These provisions stipulate a duty for EU institutions to establish an open, transparent and regular dialogue with representative stakeholder associations and civil society, carry out extensive consultations with business and representative associations and provide possibilities for citizens and associations to publicly enounce and exchange their views. The EESC also takes note that this article also forms the legal basis for the Citizen’s Initiative.

3.3   The EESC takes the view that, out of the ten goals, set out in the White paper, civil society support seems particularly significant for goals number 1 (market acceptance and behavioural change), 3 (attitude of operators, transport planners and cargo owners), 4 (behavioural changes), 5, 7 (optimal use of infrastructure and traffic management systems, encouragement of efficient cross border planning) 8, 10 (fairness of the system), 9 (safety and security related behaviour patterns).

3.4   Support for the goals of the Roadmap is clearly useful, as a matter of helping to create a politically favourable climate for its implementation.

3.5   In the opinion of the EESC significant general issues where a dialogue with organised civil society may be particularly useful include:

| — | Questions relating to the mating of the EU interest with national/regional/local interest, particularly from the viewpoint of organised civil society interests. |
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Questions relating to the mating of the EU interest with national/regional/local interest, particularly from the viewpoint of organised civil society interests.

| — | Questions relating to non-technical ways to promote transport policy aims, including corporate policy, business behaviour, acceptance of innovation and behavioural change. |
| --- | --- |

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Questions relating to non-technical ways to promote transport policy aims, including corporate policy, business behaviour, acceptance of innovation and behavioural change.

3.6   On these points, the support of organised civil society is important and possibly the best channel to forward information, gain support, but also to get feedback about problems and obstacles.

3.7   Ideally, such communication channels may also be used for benchmarking and exchange of information.

3.8   The list of initiatives also gives an idea about where the support of civil society is important to achieve the long term goals.

4.   Specific comments

4.1   To get a better idea about the points in the 40 point action plan on the 2020 horizon set out in the White Paper, where support from civil society is particularly important, the EESC draws attention to the following items.

4.2   A Single European Transport Area

4.2.1   Planned initiatives to promote quality jobs and working conditions will require the active support of the social partners who may also provide useful input regarding the usefulness of further action within the framework of the social dialogue (Articles 9, 152,153 TFEU). With regard to the prevention of social conflicts and possible actions aimed at creating a level playing fields as regards remuneration levels, it is recalled that these areas are expressly excluded from EU competence (Art 153 (5) TFEU. and therefore referred to conflict of norms solutions such as in the Services Directive or in the Directive on Posting of workers, the practical aspects of which may pose particular problems in the field of transport.

4.2.2   Transport security and transport safety as well as the free movement of disabled and elderly passengers directly related to the accessibility of the whole transport market are also not only a question of regulation, but also a question of the policy of transport company and the human factor.

4.2.3   Similarly, while the Single European Sky, the Single European Railway Area and the Blue Belt are essentially dependent on regulatory measures and administrative routines, actual use of the possibilities opened, particularly regarding the Single Railway Area and the Blue Belt, including optimal use of Intelligent Transport Systems (ITS) and market access to ports will depend on the action of operators and other parties concerned.

4.2.4   The questions of quality, accessibility and reliability of transport services concern both freight and passenger transport. In particular regarding freight the action of various operators involved is important to success. Regarding passenger transport mainly the evaluation of the passenger rights regulatory frame’s effectiveness and the quality of transport infrastructure for disabled and elderly passengers will also require the involvement of the organised civil society.

4.3   Enhancing and integrating the local grassroots initiatives

4.3.1   The message of resource efficiency, adaptation and sustainability contained in the transport white paper has already stimulated citizens’ action programmes, rural and urban, across Europe. This is happening in numerous innovative ways. For example, organised car sharing schemes reduce individual car ownership, and highly localised community transport (especially operating on-demand) offers improved access and mobility to disadvantaged and isolated groups. Community resilience plans, often with an emphasis on energy minimisation, have identified resource-efficient transport and appropriate localisation as a key element. Not only do such practical schemes offer new transport models but, as they develop from the grassroots, they provide effective public engagement and information opportunities for their participants. This broadens the base of public knowledge and understanding for the change in attitudes towards transport that will need to take place.

4.3.2   However the many local initiatives that take place here and there in Europe have an uncoordinated and unstructured character that is not commensurate with the size of the challenges ahead and notably with the targeted steep reduction of CO2 emissions from transport. The level of ambition of the White Paper makes it necessary to considerably enhance efforts through e.g. the following actions:

| — | the further development and extension of existing initiatives, especially with the view to maximise public participation and engagement; |
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the further development and extension of existing initiatives, especially with the view to maximise public participation and engagement;

| — | the multiplication of such initiatives throughout Europe based on the existing good practices and with again a special focus on public participation and engagement; |
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the multiplication of such initiatives throughout Europe based on the existing good practices and with again a special focus on public participation and engagement;

| — | the progressive integration of all these initiatives through common communication platforms and tools in order to exchange good practices, reach out larger communities and create a wide-ranging public understanding of the challenges/possible solutions. |
| --- | --- |

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the progressive integration of all these initiatives through common communication platforms and tools in order to exchange good practices, reach out larger communities and create a wide-ranging public understanding of the challenges/possible solutions.

4.4   Innovating for the future – technology and behaviour

4.4.1   The European Transport research, innovation and deployment strategy is not only a matter of research, research funding, governance and deployment of smart mobility systems. As pointed out in the Roadmap, support by regulatory framework conditions is required. But market acceptance and market uptake are also essential elements, and here organised civil society can play a part.

4.4.2   This is in fact closely related to the theme of Innovative Mobility Patterns, where the attitude of operators, cargo owners and, as for passenger transport, the general public is essential.

4.4.3   This is the case with freight, where willingness to make use of technical innovations and Information and Communication Technologies (ICT) are important as well as for instance readiness to cooperate to optimise capacity utilisation.

4.4.4   Likewise as for urban transport a lot depends on civil society support to ensure market uptake of alternative propulsion systems, efficient organisation of last mile distribution and sustainable planning of individual travel and goods transport.

4.5   Modern infrastructure, smart pricing and funding

4.5.1   As for the European Mobility Network, it is essentially the optimal use of IT tools, tracking and tracing systems for cargo, optimised schedules and traffic flows (e-freight) that require acceptance by actors on the market. This acceptance is necessary to make their deployment on TEN-T links worthwhile. This is both a question of achieving optimal results and value for money invested.

4.5.2   Within the framework of the TEN-T corridor approach as an implementation instrument for the core network, infrastructure projects should be developed in such a way as to enable citizens, civil society and relevant authorities to "gain ownership/identification" with the projects concerned. This should include measures such as an early involvement (starting at the planning stage), the sharing of best practices across the Union, the application of state-of-the art planning and implementation methods or continuous and transparent communication. Within this context, civil society support may also help to create a climate that is more favourable to coherent cross border infrastructure planning.

4.5.3   As for financing, the Public Private Partnership (PPP) issue remains essentially a financing issue which itself will mainly depend on legal and technical aspects. Nevertheless, given the importance of civil society involvement in infrastructure projects and services where PPPs may be used, there is a legitimate civil society interest in involvement in the conception and implementation of PPPs.

4.5.4   As regard pricing and avoiding distortion, this is essentially a regulatory issue. Nevertheless, contacts with civil society may provide useful input as regards the prospects of creating a climate of acceptance for these measures. Such contacts may also provide information regarding possible social problems arising from severe cost effects in sparsely populated regions or the quality of life of economically or physically vulnerable groups.

To achieve acceptance, it is essential that any pricing system is seen as reasonable and fair and also here input form civil society can be useful.

Brussels, 11 July 2012.

The President of the European Economic and Social Committee

Staffan NILSSON

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