Written by Clare Ferguson,
Each autumn, Parliament turns its attention to agreeing the budget for the following year’s operations. The first item on the agenda for the second plenary session in November, therefore, is a vote on the joint agreement between the Council and Parliament on the 2018 EU budget. Following some revision (in both directions) of the amounts, the priority for sustainable growth, jobs, security, and climate change is maintained and supported with €160.11 billion in commitments, translating to total payments of €144.68 billion. Moving closer to the Commission’s original proposal, allocations to tackle competitiveness for growth and jobs are increased for the Horizon 2020 and Erasmus+ programmes, as well as raising the Youth Employment Initiative to €350 million. The budgets of the EU agencies dealing with the migration crisis are enlarged, and adjustments made to reflect the changing political landscape in accession candidate countries. Should the Council reject the revised text at this stage of the 2018 budgetary procedure, the Parliament’s vote could still go ahead. However, should the Parliament reject the proposals, the Commission would have to go back to the drawing board.
Parliament will also vote on Wednesday evening on the redeployment of €100 million of existing budgetary resources to the Instrument Contributing to Stability and Peace for 2018-2020. As security is a precondition for development, the instrument aims to counter the deterioration of the security environment in which EU development initiatives operate to boost peace and security and eliminate poverty. The EU already supports civilian security sector actors in crisis and conflict situations; however, in cases where only the military are able to restore a secure situation for the provision of aid, without adapting the instrument to military actors, it is unable at present to act. One such crisis is the situation in Yemen, regarding which the High Representative of the EU for Foreign Affairs and Security Policy and Vice President of the EU Commission, Federica Mogherini, will make a statement on Wednesday evening. Socio-economic collapse, long predicted in Yemen, and the continuing security vacuum, have brought the country to a crisis point far beyond the political crossroads it faced in 2014.
During the financial crisis, banking failures spread between financial institutions, sometimes requiring the taxpayer to bail them out. To avoid this situation in any future scenario, the EU is reforming its regulations for financial services. Under the EU’s new bank recovery and resolution legislation, and because national rules on unsecured debt holders and creditors diverge, differences in the ranking of unsecured debt instruments in insolvency hierarchy have emerged. On Thursday morning, Parliament is expected to vote on a proposal to ensure that the legislation applies uniformly in the EU to rank bank creditors when banks fail. Following the 2008 financial crisis, G20 leaders called for new high-quality standards for financial organisations. The consequent publication of international financial reporting standard 9 seeks to encourage financial institutions to greater prudence when estimating future credit losses on their financial assets. On Wednesday afternoon, Parliament will vote on proposed transitional arrangements for mitigating the impact of IFRS 9. As the standard requires banks to hold more capital, a proposed five-year phase-in period should allow EU banks to add a portion of this provision onto their regulatory capital, as well as a three-year phase-out for banks with large exposure to public-sector foreign currency debt.
In other financial matters, the European Commission will announce a decision on the Fair Taxation Package II on Wednesday afternoon, which seeks to create a single EU value added tax area, including to combat fraud and boost small cross-border sales.
Also on Wednesday afternoon, the European Commission will announce a decision on the State of the Energy Union 2017, where considerable progress has already been made. In turn, the European Commission will be asked an oral question in plenary on Wednesday evening regarding negotiations for a new multilateral court for the settlement of investment disputes. The proposed court (see the investment court system (ICS)) would replace investor-to-state dispute settlement (ISDS) – a subject of some concern to both legislators and the public in recent trade negotiations.
Finally, Parliament will vote on a report on the implementation of the European disability strategy on Thursday morning, which highlights the need to include equality, gender and non-discrimination aspects in all areas of legislation affecting the needs of those with disabilities. While the European Accessibility Act appears to a step in the right direction to improving access, major barriers to social inclusion, employment, and education continue to disadvantage people with disabilities in the EU.
Thursday lunchtime will see Members vote on a number of reports in addition to those mentioned above, including: the draft amending Budget No 6/2017; mobilisation of the European Union Solidarity Fund and Flexibility Instrument to finance budgetary measures; changes to the resources for economic, social and territorial cohesion and to the resources for the investment for growth and jobs goal and for the European territorial cooperation goal; applications from Finland and Greece for mobilisation of the European Globalisation Adjustment Fund. Voting will also take place on proposals for the use of the PRIMA for scientific and technological cooperation with Algeria, Egypt, Jordan and Lebanon; and the accession of various countries to the 1980 Hague Convention on the Civil Aspects of International Child Abduction; as well as on combating VAT fraud, and VAT in services and distance sales of goods.