Месечни архиви: март 2016

Plant health legislation: Protective measures against plant pests [EU Legislation in Progress]

Written by James McEldowney (1st edition),

basil plant

© jonnysek / Fotolia

Following an evaluation of the European Union’s plant health regime, on 6 May 2013 the European Commission proposed a new regulation on protective measures against plant pests. These include regulating pests on the basis of established criteria for risk assessment and prioritising those pests with the most serious consequences. More focus is being placed on high-risk trade coming from third countries. The proposal provides for better surveillance and the early eradication of outbreaks of new pests. On 15 April 2014, the outgoing European Parliament adopted its first-reading position. Seven trilogue meetings were held which concluded on 16 December 2015, when the representatives of the Council and Parliament finalised an overall compromise text. Once the Council adopts its first reading position, the text could then be adopted by the Parliament without amendment in an early second reading.


Stage: Second reading

Source Article from http://epthinktank.eu/2016/03/29/plant-health-legislation-protective-measures-against-plant-pests-eu-legislation-in-progress/

Schengen area: Update and state of play

Written by Alexandra Gatto, Pierre Goudin, Risto Niemenen,

Schengen area: Update and state of play

© Kadmy / Fotolia

Passport-free travel across the Schengen area has been called into question as a result of pressure on certain internal EU borders from the rising number of asylum-seekers and migrants seeking to reach certain Member States, as well as security concerns in the wake of the Paris terrorist attacks. In addition to the loss of personal freedom involved, the reintroduction of borders could well bring significant economic costs, which would be felt both within and outside the Schengen area. This briefing provides an update on recent developments and studies on the issue.

The free movement of goods, services, capital and people within the EU’s Single Market has to date been one of the greatest achievements of the European Union. With its 26 member countries, the Schengen area is an important complement to the Single Market, giving tangible reality to the ‘four freedoms’ set out in the Treaties.

The benefits of Schengen are clear, with the ‘four freedoms’ allowing greater personal freedom and a more efficient allocation of resources within the EU. Free movement of EU citizens fosters economic growth by enabling people to travel, study and work in another Member State, and by allowing employers to recruit from a larger pool. Mobility of workers has a positive impact on economies and labour markets.

However, the Schengen area faces major challenges today. In response to the considerable influx of refugees into the EU in 2015, and then across internal EU borders, a number of Member States have reintroduced temporary internal border controls at certain crossings. Even on a temporary basis, these border controls are already disrupting the flow of goods and services within the Single Market, with economic costs for business and citizens. In that context, the European Commission has set out a roadmap for a return to the normal functioning of the Schengen area by the end of 2016.

A number of studies have tried to assess the likely impact of re-establishment of border controls within the Schengen area. They identify a threefold impact: firstly, border controls within the Schengen area have certain direct, immediate costs; secondly, they undermine the general progress of the past 20 years; and thirdly, they endanger the future benefits of Single Market and EU integration.

For the complete briefing in pdf on ‘Schengen area: Update and state of play‘ click here.


Source Article from http://epthinktank.eu/2016/03/24/schengen-area-update-and-state-of-play/

Summertime: changing the clocks

Citizens recurrently turn to the Parliament with comments on the switch between summer and winter time. Some citizens are in favour of the summertime arrangements; others call on the Parliament to help to abolish the practice.

Twice a year the clocks in all EU Member States are switched forward by one hour from winter to summertime (on the last Sunday in March) and back by one hour from summer to wintertime (on the last Sunday in October).

This is an updated version of the EP answers ‘Changing the clocks from summertime to wintertime‘, published on 21 October 2015.

Harmonising summertime arrangements

Wintertime is standard time. It is during the summer that the time in the EU is advanced by 60 minutes. The decision on standard time falls within the competence of Member States. Most Member States had introduced summertime in the 1970s, although some had begun to change the time much earlier, for varying lengths of time. Since the 1980s the EU legislator, i.e. the European Parliament and the Council, has adopted several directives harmonising the various summertime arrangements, to ensure the proper functioning of the internal market. The main idea is to provide stable, long-term planning, which is important for the certain economic sectors, especially transport.

EU legislation and its implications

Summertime: changing of the clocks

The current reference text in EU legislation with regard to summertime arrangements for all Member States is Directive 2000/84/EC. In 2007, the European Commission published a report on the impact of this directive, providing a chronology of the European legislation and its implications for different sectors of activity.

In 2014, the Commission commissioned another study on the harmonisation of summertime arrangements in Europe. The study, entitled ‘The application of summertime in Europe‘, concludes that if summertime was not harmonised in the Union, substantial inconvenience and nuisance would ensue for citizens and businesses alike. The study also includes scenarios of abolishing summertime in one or more Member States and looks at the effects of an asynchronous application of summertime in the EU.

Public hearing and parliamentary questions

In view of the concerns expressed by citizens regarding the summertime arrangements, Members of the European Parliament (MEPs) have submitted various parliamentary questions asking whether the Commission is planning to propose to repeal Directive 2000/84/EC on summertime arrangements. In its answers, for example to Question E-004764-15 on the summertime issue, the Commission refers to the study on harmonisation, and concludes that, at this stage, it does not intend to propose the revision or repeal of Directive 2000/84/EC.

In addition, three parliamentary committees held a joint public hearing entitled ‘Time to Revisit Summer Time?‘ on 24 March 2015. Since the hearing, new parliamentary questions were submitted, pointing to expert findings that the current summertime arrangements have more negative than positive effects.

The public hearing on summertime changes in Europe and the subsequent Oral Question O-000111/2015, addressed to the Commission, were also the subject of a plenary debate on 29 October 2015 with Violeta Bulc, European Commissioner for Transport.

During the debate, the Commissioner stated that different studies on the subject matter examined by the Commission present mixed results and no conclusive argument was to be gained from them regarding potential impacts on health, energy savings or other areas. Furthermore the Member States consulted by the Commissioner were divided on this subject. Commissioner Bulc stated: ‘So, at this stage, the Commission is not considering changes to the relevant directive but, should new evidence emerge and a more systemic approach be put forward, we would be willing to reconsider that position’.


For many years, summertime arrangements in the EU have also been the subject of petitions submitted by citizens to the European Parliament’s Committee on Petitions, for example Petition 1477/2012. Information on petitions, and procedures for submitting a petition to the European Parliament, are available on the Parliament’s Petitions website.


Do you have any questions on this issue or another EP-related concern? Please use our web form. You write, we answer.



Source Article from http://epthinktank.eu/2016/03/24/summertime-changing-the-clocks/

Organised Crime and Corruption: Cost of Non-Europe Report

Written by Wouter van Ballegooij and Thomas Zandstra,

The Cost of Non-Europe in the area of Organised Crime and CorruptionThis study demonstrates the need to tackle organised crime and corruption together as the two are in a mutually reinforcing relationship. Organised crime groups attempt to regulate and control the production and distribution of a given commodity of service unlawfully. In so doing, their aim is to bend the rules in their favour by corrupting officials. Corruption undermines the rule of law, which in turn provides more opportunities for organised criminals to expand their control over the legal economy and politics or even to take over governance tasks in regions and communities.

Given their illicit nature and the need to interpret the available criminal justice data within a broader setting, the impact of organised crime and corruption is hard to measure. Within this context it is difficult to estimate with a sufficient degree of certainty an overall Cost of Non-Europe in this policy field. This study does, however, provide scenarios showing the cost of corruption to the European economy. The scenario deemed most feasible by us points to an economic loss in terms of GDP of between 218 and 282 billion euro annually. The study also builds on existing estimates of the size of illicit markets representing a value of around 110 billion euro and points to the significant social and political costs of organised crime and corruption.

The study seeks to establish the potential benefits of addressing the gaps and barriers that hinder a more effective fight against organised crime and corruption within the European Union. As combatting organised crime and corruption is a shared competence of the EU and its Member States, our estimates show the potential that could be achieved together by better transposition and enforcement of international and EU norms, filling the outstanding legislative gaps and improving the policy making process and operational cooperation between authorities. Where possible, the benefits of specific policy options to overcome gaps and barriers in the current framework have been quantified. The study demonstrates, based on quantified building blocks, that the Cost of Non-Europe in the field of organised crime and corruption is at least 71 billion euro annually.

Read the PDF of this In-depth Analysis.

In addition to the general paper bringing together the research findings as a whole, the exercise comprises three annexes, which are published as separate documents:

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Source Article from http://epthinktank.eu/2016/03/23/organised-crime-and-corruption-cost-of-non-europe-report/

Virtual currencies: Challenges following their introduction

Written by Christian Scheinert,

Virtual currencies: Challenges following their introductionVirtual currencies began creating controversy soon after their launch. The nature of virtual currencies is difficult to apprehend, the underlying technology is complicated, their operations are conducted in a decentralised way, and they are almost unregulated. No-one can predict if a particular virtual currency may become a direct competitor for existing currencies in the distant future, or if it might just collapse overnight. What is certain, however, is the high level of volatility demonstrated by today’s market leader, Bitcoin.

This raises questions concerning the possible impact of virtual currencies on a number of sensitive fields. It appears that there is little, if any, influence expected on monetary policy, or on the stability of the financial system. However, some danger might arise for payment systems, including reputational damage for systems which are not directly exposed to virtual currencies. The most problematic field is consumer protection, as there are no safety nets, such as deposit guarantee funds, available to alleviate losses. Extending prudential supervision to virtual currencies might be difficult, if not impossible, so most regulators are now pondering how to regulate the points of contact between virtual currencies and fiat money, i.e. where one is exchanged for the other.

The Paris terrorist attacks in late 2015 have revived interest in virtual currencies, as there is a growing fear that they could be used with criminal intent. The European legal framework will be adapted to take the terrorist threat into account.

For the entire briefing on ‘Virtual currencies: Challenges following their introduction‘ click here.


Figure 1 – Exchange rates between Bitcoin and the US dollar

Figure 1 – Exchange rates between Bitcoin and the US dollar

Source Article from http://epthinktank.eu/2016/03/23/virtual-currencies-challenges-following-their-introduction/

Poverty in the European Union: The crisis and its aftermath

Written by Marie Lecerf,

Poverty in the European Union: The crisis and its aftermath

© erllre / Fotolia

The economic crisis has exacerbated social burdens such as poverty and inequality, which were already major issues before the crisis. Due to the multifaceted nature of poverty, the European Union uses a multidimensional indicator – the ‘at risk of poverty or social exclusion’ rate – based on three different dimensions: monetary poverty, severe material deprivation, or ‘very low work intensity’.

Since 2008, the number of people ‘at risk of poverty or social exclusion’ has increased in most Member States. In 2014, nearly one in four persons (122.3 million people) was at risk of poverty or social exclusion in the European Union. Amongst the groups at greater risk, those most affected were women, children, young people, people living in single parent households, those with less education, and migrants.

New forms of poverty are emerging. Contrary to popular belief, work no longer protects against poverty. The new ‘working poor’ are often in precarious and low-paid jobs. Homelessness is no longer the fate of middle-aged men with long-standing social problems, but also affects families, young people, and migrants. Lastly, children are amongst the hardest hit by the crisis in terms of poverty.

Since 2008, the main drivers affecting the poverty rate in the European Union are cyclical: long-term unemployment, labour market segmentation and wage polarisation. The emergence of new family models, such as single parenthood, and the persistence of inherited poverty have strengthened the phenomenon.

In Europe, the main responsibility for combating poverty and social exclusion remains with Member States. The European Union’s role is limited to coordinating Member State policies through the Open Method of Coordination for social protection (the ‘Social OMC’), providing some funding with the European Social Fund and the Fund for European Aid to the Most Deprived, and the Employment and Social Innovation programme. In 2010, with the adoption of the Europe 2020 Strategy, the European Union set a quantitative target for the reduction of poverty and social exclusion for the first time: lifting more than 20 million people out of poverty by 2020 compared with 2008. Nevertheless, achieving this objective in times of crisis and austerity measures is proving extremely difficult. The European Union has drifted further from its target.

Huge efforts are needed to meet the Europe 2020 target on poverty and social exclusion. A better balance between macroeconomic, fiscal, employment and social objectives at European Union level could be necessary. Investing early in children and youth, as well as policies to develop skills and improve employability will help. Modernising welfare states will be crucial.

For the full In-Depth Analysis on ‘Poverty in the European Union: The crisis and its aftermath‘ in PDF click here.


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Source Article from http://epthinktank.eu/2016/03/22/poverty-in-the-european-union-the-crisis-and-its-aftermath/

Mercury Aligning EU legislation with Minamata [EU Legislation in Progress]

Written by Didier Bourguignon (1st edition),

Mercury: Aligning EU legislation with Minamata

© natros / Fotolia

The United Nations’ Minamata Convention on mercury was agreed in 2013 with a view to protecting human health and the environment from the adverse effects of mercury. Although mercury use has declined significantly in recent decades, mercury released into the air, water and land remains a serious threat to human health and the environment. Once emitted into the air or water, mercury can travel over long distances, which makes it a global problem.

Current EU policy bans exports of mercury, provides for the storage of mercury waste, restricts the use of mercury in various products and seeks to address pollution caused by it. However, there are some regulatory gaps between EU legislation and the Minamata Convention. The European Commission has recently submitted a legislative proposal aiming to align this legislation with the Convention in view of its ratification.

Stakeholders are divided over the proposal. The European Parliament’s Committee for Environment, Public Health and Food Safety (ENVI) is expected to consider the proposal in the coming months.





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Source Article from http://epthinktank.eu/2016/03/22/mercury-aligning-eu-legislation-with-minamata-eu-legislation-in-progress/

Overhauling fisheries technical measures [EU Legislation in Progress]

Written by Jean Weissenberger  (1st edition),

Overhauling fisheries technical measures

© Witold Krasowski / Fotolia

Technical measures in fisheries govern the different fishing practices which can be used to catch fish, as well as the areas and seasons for fishing. Aimed at limiting unwanted catches (notably of juvenile fish) or at reducing the impacts of fishing on nature (protected species and vulnerable habitats), EU technical measures in fisheries have, over time, developed into a complex set of prescriptive measures, which do not fully achieve their objectives. The European Commission finalised, on 11 March 2016, a long-awaited proposal to overhaul a number of existing rules and to establish a new legislative framework in this domain. Building on the latest reform of the Common Fisheries Policy (CFP), the proposal would provide measures of general application in all seas, and baseline measures supporting given objectives, by maritime region. It would also set a new approach on governance and delegation of powers for the development of regional approaches. The Commission estimates that this new regulation would contribute to reaching CFP objectives, notably on delivering maximum sustainable yield for fish stocks, with positive socio-economic and environmental impacts. The European Parliament Fisheries Committee will hold a hearing on the new technical measures framework on 21 March 2016.



Stage: Commission Proposal

Source Article from http://epthinktank.eu/2016/03/21/overhauling-fisheries-technical-measures-eu-legislation-in-progress/

India’s economy – Figures and perceptions

Written by Enrico D’Ambrogio,

India has recently overtaken China as the world’s fastest growing economy. The country has benefited from falling oil prices and from an increase in foreign direct investment, due to Prime Minister Narendra Modi’s policies, with the most visible tools branded schemes such as ‘Make in India’. However, perceptions of real growth and other indicators point to a less optimistic framework, while Modi is struggling against opposition in the Parliament to deliver major reforms on labour laws, taxation and land acquisition.

India, the fastest growing economy

© 4designersart / Fotolia

India’s economy – Figures and perceptions

India, the world’s tenth-largest economy by nominal GDP (gross domestic product), and third largest in purchasing power parity (PPP), has recently overtaken China as the fastest-growing economy. According to the International Monetary Fund’s January 2016 World Economic Outlook (WEO), New Delhi had already caught up with Beijing in 2014 (7.3% growth in both countries). By 2015, thanks to one of the fastest rates in the world, India had overtaken China (7.3% to 6.9%). Projections for 2016 (7.5% versus 6.3%), and 2017 (7.5% against 6.0%), confirm the trend. The difference compared to the other BRICS countries is even more evident: the economies of Russia (-3.7%) and Brazil (-3.8%), largely dependent on decreasing commodity prices, shrank in 2015. The South African economy grew by a mere 1.3%.

India has generally benefited from the fall in oil prices – as well as from low prices for metals – as New Delhi is a major oil importer. The country demonstrates the fastest energy-consumption growth among all major economies and three quarters of its oil needs – 28.3% of its total energy consumption – are covered by imports (although coal remains the dominant fuel at 56.5% of total energy consumption). The fall in the price of oil has contributed to moderating the wholesale price index (WPI), and enabled a reduction in the official interest rate, while the rupee’s value has stabilised. In addition, India is not burdened with large dollar-denominated external debts, which weigh on many emerging economies, making them vulnerable.

According to the UN Conference on Trade and Development (UNCTAD), foreign direct investment (FDI) in India almost doubled in 2015, reaching US$59 billion (FDI inflows to developing Asia rose by 15%). Relaxation of FDI norms in some sectors (including defence, banking, construction, single-brand retail, broadcasting and civil aviation), and initiatives such as ‘Make in India’ (see box) have contributed, and attracted foreign companies such as Apple. The services sector, whose contribution to GDP amounted to around 52% in 2014-2015, has also been a major driver in attracting FDI. Additionally, according to Indian Minister of Finance, Arun Jatley, India is ‘relatively unimpacted’ by some of the factors that have caused the global crisis.

Narendra Modi’s 30 branded schemes to change India

More than 30 schemes to modernise India have been launched since Narendra Modi became Prime Minister in May 2014. Among them, the most relevant to economic growth is the ‘Make in India’ programme, aimed at transforming India into a global manufacturing hub and improving its business climate for both domestic and foreign investors. India’s manufacturing sector is less productive compared to competitors such as China, and accounted for only 17% of GDP in 2015. The government has set a target of 25% of GDP by 2022.

Not all that glitters is gold

Nevertheless, a certain number of caveats contradict the scenario above. Firstly, analysts argue that the new improved growth figures are basically due to a recent revision in methodology to calculate GDP, which has brought higher figures. Investors consider Indian growth is not as robust as the official GDP numbers seem to suggest, as it has been driven by private consumption and public investment, rather than private investment and exports. Both manufactured and services exports have been stagnating in recent years, and are among the signs that India is less integrated into the global economy than China. This problem could even worsen. India is a member of the Regional Comprehensive Economic Partnership (RCEP); but has still joined neither the Trans-Pacific Partnership (TPP) nor Asia-Pacific Economic Cooperation (APEC). Should New Delhi remain outside these agreements, and China and the rest of APEC join a second stage of the TPP, India’s annual export losses might approach US$50 billion.

Analysts have also pointed out a series of inconsistencies, including weaknesses in corporate profitability and stagnation of freight volumes and in the real estate sector. Both in 2014 and 2015, the country experienced a poor monsoon season, affecting around half of the Indian population, which is dependent on agriculture. Bad bank loans put the public banking sector – controlling three quarters of the country’s assets – under stress and may undermine India’s goal of sustainable recovery.

India also has critical scores on many indicators which measure an economy’s capacity to do business. In the World Bank’s ‘Doing Business 2016’ report, India, although better placed than in 2015, still ranks 130th out of 189 economies, lagging substantially behind China (84th). Dealing with construction permits (ranked 183rd) and enforcing contracts (178th) are the most critical points, and starting a business (155th), paying taxes (157th), and resolving insolvency (136th) are also challenging. Access to electricity (70th) is now less difficult. Foreign companies complain about India’s poor infrastructure, cumbersome land-purchasing arrangements, excessive regulation, rigid labour laws, frequent power cuts, and corruption. Retrospective tax disputes involving major foreign companies have created cause for concern among foreign investors.

The political conundrum

Once elected, Narendra Modi promised a pro-business agenda and aimed to deliver on deregulation, investment facilitation, and spending reduction. Modi has travelled widely, promoting India as an investment destination, and appealing to foreign investors. FDI ceilings in several sectors have been lowered. However the government failed to have some expected key bills – on the Goods and Services Tax (GST); on land acquisition; on the labour laws – approved or even discussed. The budgets tabled by the cabinet in 2015 and in 2016 avoided making bold economic reforms. Modi was elected in 2014 with a large electoral mandate: his party, the BJP (Bharatiya Janata Party), obtained an absolute majority in the lower chamber, the Lok Sabha. However, the BJP is in a minority in the upper chamber, the Rajya Sabha, and has therefore had difficulties in promoting economic reforms, often blocked by the main opposition party, the Indian National Congress (INC). To reverse the majority in the Lok Sabha, the BJP needs to win control of more states. However two major electoral defeats gave serious warning signals to Modi’s party: in February 2015 in the capital New Delhi, and in November 2015 in Bihar.

The European Union and India

The European Union is India’s biggest trade partner, but trade between the two – reaching €72.6 billion in 2014 – is stagnating. India-EU trade in services amounted to €22.9 billion in 2014 – less than in 2013. The EU is the biggest investor in the Indian economy, but figures are declining: €34.7 billion in 2013 – less than 2012. In 2007, India and the EU began talks on a bilateral trade and investment agreement (BTIA), but the negotiations, welcomed by the EP in 2011, have progressed slowly due to several controversial issues. The most recent EU-India summit was in February 2012, but a visit to Brussels by Narendra Modi in late March 2016 may break the current deadlock and allow for more promising EU-India relations.

Read this At a Glance on ‘India’s economy – Figures and perceptions‘ here.

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Source Article from http://epthinktank.eu/2016/03/21/indias-economy-figures-and-perceptions/

European banks [What Think Tanks are Thinking]

Written by Marcin Grajewski,

European Union High Resolution Banks Concept

Fotolia – © xtock

European banks have come under the spotlight once again, as the unusual volatility of their share prices has raised question-marks about their health in a changing regulatory environment and about the sustainability of the euro area’s economic recovery more generally.

Euro-area banks have had to adapt to new resolution rules, which fully took effect this year as part of EU efforts to create a Banking Union, having previously had to meet stricter capital requirements. Apart from having to operate in the context of a global economic slowdown, banks have also been affected by the European Central Bank’s negative interest rates policy.

This note offers links to recent commentaries, studies and reports from major international think tanks on problems faced by European banks and recent efforts to reform the sector.

Market turbulence highlights bumpy transition to Europe’s new bank policy regime
Bruegel, March 2016

Banking crisis yet again and how to fix it
LUISS School of European Political Economy, February 2016

The United States dominates global investment banking: Does it matter for Europe
Bruegel, March 2016

The negative rates club
Centre for European Policy Studies, February 2016

Should the ‘outs’ join the European banking union?
Bruegel, February 2016

European bank resolution: Making it work!
Centre for European Policy Studies, January 2016

Getting euro zone deposit insurance right promises benefits
Bruegel, January 2016

The intended and unintended consequences of financial-market regulations: A general equilibrium analysis
Sustainable Architecture for Finance in Europe, January 2016

The role of banks in the recent Italo-German dispute
LUISS School of European Political Economy, January 2016

Banking business models monitor 2015: Europe
Centre for European Policy Studies, International Institute for Cooperatives, International Research Centre on Cooperative Finance, January 2016

The state dependent impact of bank exposure on sovereign risk
Deutsches Institut für Wirtschaftsforschung, January 2016

Banking banana skins 2015: The CSFI survey of bank risk. Recovery under threat
Centre for the Study of Financial Innovation, December 2015

Banking Union as a shock absorber: Lessons for the euro zone from the US
Centre for European Policy Studies, December 2015

Non-performing loans in Italy and selected European countries
Bruegel, December 2015

Will the Single Resolution Fund be a ‘baby tiger’ during the transition?
Centre for European Policy Studies, December 2015

Completing the Banking Union: Deposit insurance
Centre for European Policy Studies, December 2015

Interbank funding as insurance mechanism for (persistent) liquidity shocks
Sustainable Architecture for Finance in Europe, November 2015

Firmer foundations for a stronger European Banking Union
Bruegel, November 2015

The great financial plumbing: From Northern Rock to Banking Union
Centre for European Policy Studies, October 2015

The interplay between the EBA and the Banking Union
Robert Schuman Centre for Advanced Studies, October 2015

Diversity of the banking sector revisited: Why does it matter post-financial crisis?
International Research Centre on Cooperative Finance, September 2015

Euro area banks remain vulnerable
Bruegel, August 2015

A Capital Markets Union for Europe: The relevance of banks and markets
Institut der deutschen Wirtschaft Köln, July 2015



Source Article from http://epthinktank.eu/2016/03/18/european-banks-what-think-tanks-are-thinking-2/