Brussels Weekly
20 Jun 2018


Brussels Weekly


COLLEGE MEETING: Commission discusses priority files ahead of the European Council

Today the College of Commissioners met in Brussels where a number of important issues were discussed in the context of the upcoming European Council. President Juncker debriefed the College about his meeting with German Chancellor Angela Merkel and French President Emmanuel Macron in Meseberg yesterday, where he said: “I am very satisfied with the French-German paper, which builds on the Commission’s proposals. Overall, this is an important contribution to European progress in many areas.” (Watch the doorstep with President Juncker in Meseberg on EbS). As a follow-up to the Meseberg meeting, the European Commission has convened an informal working meeting on migration and asylum issues, which will take place this Sunday, 24 June in Brussels. On the College agenda was also the Stability Support Programme for Greece on which discussions were held ahead of the Eurogroup meeting on 21 June, and the conclusion of the Programme in August this year, as well as on the state of play of the proposals on the Economic and Monetary Union ahead of the European Council next week. In this context, today the Commission published a paper on deepening the Economic and Monetary Union (EMU) which forms the basis of the Commission’s contribution to the European Council discussions on the EMU. Tomorrow at 10:30 CET, Commissioner Avramopoulos will present the Commission’s contribution to the European Council with regards to migration, and on Monday 25 June, Commissioner Oettinger will cover the Commission’s contribution to the debate on the EU’s next long-term budget. The Commission’s Chief Negotiator for Article 50 negotiations with the UK, Michel Barnier, also attended the College meeting today to provide an overview of the latest developments in the negotiations ahead of the European Council and following the publication of a joint statement by the European Commission and the United Kingdom, outlining the progress that has been achieved on the terms of the draft Withdrawal Agreement since the negotiation round that took place on 16-19 March 2018. First Vice-President Timmermans debriefed the College on the latest state of play of the rule of law dialogue with Poland, following his visit to Warsaw this week where he had met with the Polish Prime Minister Mateusz Morawiecki on Monday. While a number of measures have been taken by the Polish authorities in the past months, they are not sufficient to eliminate the clear risk of a serious breach of the rule of law, leaving key concerns of the Commission unaddressed. While the dialogue will continue, the next step is the hearing in the General Affairs Council on 26 June where the European Commission will reiterate its position as laid down in the reasoned proposal of December 2017. Watch the read-out of the College meeting by Vice-President Dombrovskis and Commissioner Moscovici live on EbS. Today the College is also receiving the Prime Minister of France, Edouard Philippe. Following a bilateral meeting between President Juncker and Prime Minister Philippe, a working lunch will take place. A press point by President Juncker and Prime Minister Philippe will take place at 14:30 CET which can be followed live on EbS+.


TRADE: EU adopts rebalancing measures in reaction to US steel and aluminium tariffs

The European Commission adopted today the regulation putting in place the EU’s rebalancing measures in response to the US tariffs on steel and aluminium. The measures will immediately target a list of products worth €2.8 billion and will come into effect on Friday 22 June. Commissioner for Trade Cecilia Malmström said: “We did not want to be in this position. However, the unilateral and unjustified decision of the US to impose steel and aluminium tariffs on the EU means that we are left with no other choice. The rules of international trade, which we have developed over the years hand in hand with our American partners, cannot be violated without a reaction from our side. Our response is measured, proportionate and fully in line with WTO rules. Needless to say, if the US removes its tariffs, our measures will also be removed.” By putting these duties in place the EU is exercising its rights under the rules of the World Trade Organisation (WTO). US imports that will now face an extra duty in the EU include steel and aluminium products, agricultural goods and a combination of various other products. The list of products is the same as in the previous Implementing Regulation of 16 May and as notified to the WTO on 18 May. EU Member States have expressed their unanimous support for this approach. Today’s decision is part of the three-pronged EU’s response that also includes the launch on 1 June of legal proceedings against the US in the WTO and safeguard action to protect the European market from disruptions caused by the diversion of steel from the US market. For more information, see the press release. The implementing regulation triggering the balancing measures will be available in the EU Official Journal tomorrow.


Eurostat: Price levels varied by almost one to three across the EU Member States

In 2017, price levels for consumer goods and services differed widely in the European Union (EU). Denmark (142% of the EU average) had the highest price level, followed by Luxembourg (127%), Ireland and Sweden (both 125%), Finland (122%) and the United Kingdom (117%). At the opposite end of the scale, the lowest price level was found in Bulgaria (48%), while Romania (52%) and Poland (56%) were just above 50% of the average. In other words, price levels for consumer goods and services in the EU varied by almost one to three between the cheapest and the most expensive Member State. A Eurostat press release is available here.

The  Energy Union gets simplified, robust and transparent governance: Commission welcomes ambitious agreementThis morning, an ambitious political agreement on the governance of the Energy Union was reached today between negotiators from the Commission, the European Parliament and the Council. With today’s deal the Member States of the European Union will be equipped to govern the Energy Union – this common project aimed at ensuring that all Europeans have access to secure, affordable and climate-friendly energy. This new governance system will enable the European Union to realise its goals of becoming world leader on renewables, putting energy efficiency first, provide a fair deal for consumers and set the course for the EU’s strategy long-term greenhouse gas reduction. By building trust and consensus between the Member States on energy and climate matters the governance will set the best way to achieve the energy transition and the modernisation of the EU economy and industry. The governance of the Energy Union will be instrumental to enable the political process required to deliver what 73% of EU citizens want: a common energy policy for all EU Member States. Today’s deal means that four out of the eight legislative proposals in the 2016 Clean Energy for All Europeans package have been agreed by the co-legislators, after yesterday’s agreement on an a new energy efficiency target for 2030 of 32.5% (see STATEMEMT/18/3997) and the agreements on 14 June and 14 May on the revised Renewable Energy Directive and the Energy Performance in Buildings Directive respectively. These four pieces of legislation complement the revision of the Emissions Trading System, the Effort Sharing Regulation and the Land Use Change and Forestry Regulation that were also adopted earlier this year. Thus, progress and momentum towards completing the Energy Union and combatting climate change are well under way. The Juncker Commission, working under its political priority “a resilient Energy Union and a forward-looking climate change policy“, is delivering. Read the full IP/18/4229.


COLLEGE MEETING: State aid: Commission finds Luxembourg gave illegal tax benefits to Engie; has to recover around €120 million

The European Commission has found that Luxembourg allowed two Engie group companies to avoid paying taxes on almost all their profits for about a decade, without any valid justification. This is illegal under EU State aid rules because it gives Engie an undue advantage. Luxembourg must now recover about €120 million in unpaid tax. In 2008 and 2010, respectively, Engie implemented two complex intra-group financing structures for two Engie group companies in Luxembourg, Engie LNG Supply and Engie Treasury Management. These involved triangular transactions between Engie LNG Supply and Engie Treasury Management, respectively, and two other Engie group companies in Luxembourg. The Commission concluded that Luxembourg’s tax treatment of these financing structures did not reflect economic reality. Tax rulings issued by Luxembourg endorsed an inconsistent treatment of the same transaction both as debt and as equity. On this basis, the Commission concluded that the tax rulings granted a selective economic advantage to Engie by allowing the group to pay less tax than other companies subject to the same national tax rules. In fact, the rulings enabled Engie to avoid paying any tax on 99% of the profits generated by Engie LNG Supply and Engie Treasury Management in Luxembourg. Today’s decision follows an in-depth investigation launched in September 2016. Commissioner Margrethe Vestager, in charge of competition policy, said: “Luxembourg gave illegal tax benefits to Engie. Its tax rulings have endorsed two complex financing structures put in place by Engie that treat the same transaction in an inconsistent way, both as debt and as equity. This artificially reduced the company’s tax burden. As a result, Engie paid an effective corporate tax rate of 0.3% on certain profits in Luxembourg for about a decade. This selective tax treatment is illegal.” The full press release is available online here.


COLLEGE MEETING: Commission appoints new Director-General of the European Anti-Fraud Office and a Director to its employment department

Following a selection procedure involving the European Parliament and the Council, the European Commission has decided today to appoint, with effect of 1 August 2018, Mr Ville Itälä as new Director-General of the European Anti-Fraud Office (OLAF). Mr Itälä, a Finnish national, is a lawyer by training and has been a Member of the European Court of Auditors since 2013 and before that a Member of the European Parliament (from 2004 to 2012) and Minister of Interior in Finland (from 2000 to 2003). He also has experience as an acting police commissioner and prosecutor in Finland. The Commission has also decided to appoint, with effect of 1 July 2018, Ms Manuela Geleng to the position of Director for Skills in its Employment, Social affairs and Inclusion department (DG EMPL). Ms Geleng, an Italian national, joined the Commission in 1995 and has been a Head of Unit since 2009. She is currently acting Director for Social Affairs and Head of Unit for the Social Investment Strategy in DG EMPL but also Head of DG EMPL’s Task Force on migrants and refugees. Previously, she held various positions in the Commission’s trade department (DG TRADE) and worked for the United National Development Programme.


Capital Markets Union: Commission welcomes progress on key initiatives

The Commission welcomes the progress made by Member States yesterday on two important files, which will contribute to drive forward the Capital Markets Union (CMU). The Council of the European Union reached an agreement on the cross-border distribution of investment funds package and the pan-European personal pension product (PEPP). This provides the Council Presidency with the mandate to start trilogues negotiations with the European Parliament. The investment funds package contributes to further reducing barriers to the cross-border distribution of funds by improving the transparency of marketing rules and regulatory fees, and by harmonising national practises. The proposal on personal pensions will give European consumers more choice when saving for retirement. PEPP savers should benefit from EU-wide portability, transparency of costs and the possibility to switch providers. Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “I welcome the progress made on these key consumer and investor proposals – they mark an important milestone in building the Capital Markets Union. We need to knock down barriers to cross-border investment to strengthen the Single Market. This will ultimately benefit consumers by boosting choice and competition. On PEPP, it is important to preserve the pan-European nature of our proposal. I trust the negotiations will uphold the key features of these Commission proposals.”


Poland: EU funds invest in upgrades of public transport and water treatment in Łódź and Poznań

€94 million from the Cohesion Fund is invested to modernise the public transport system in Łódź, Poland’s third largest city. New kilometres of tram lines are constructed, existing tram depots are renovated, and 30 new trams are purchased. The investments will make the network safer, the air cleaner and will improve traffic flows, for the direct benefit of the city’s 700,000 inhabitants. Commissioner for Regional Policy, Corina Crețu, said: “From transport to water networks, but also health, innovation and energy infrastructure, Cohesion Policy investments contribute to improving people’s everyday life in Poland and it will keep on doing just that in the next long term EU budget.” Further €55 million from the Cohesion Fund is invested to upgrade the drinking water and waste water system in Poznań, in the West of Poland. Two wastewater treatment plants and several kilometres of sewerage networks are renovated, as well as 126 kilometres of sewerage newly built to connect more than 14,000 inhabitants to the networks. In addition, a drinking water station is modernised to ensure the quality and safety of fresh water supply for a third of Poznan’s more than half a million inhabitants.

 20 years of Copernicus, the EU’s leading provider of Earth observation data across the globe

Commissioners Elżbieta Bieńkowska (Internal Market, Industry, Entrepreneurship and SMEs) and Tibor Navracsics (responsible for the Commission’s Joint Research Centre) are in Baveno, Italy, today and tomorrow to mark the 20th anniversary of Copernicus. In 1998, a manifesto was signed in Baveno proposing to create a European environment monitoring programme. Today Copernicus is a symbol of Europe’s space power. The seven satellites currently in orbit give access to tens of terabytes of free data every day which is used to help save lives at sea, improve our response to natural disasters such as earthquakes, hurricanes, forest fires or floods, and allow farmers to better manage their crops. Space is an enabler of the data and app economy. That is why Commissioner Bieńkowska will announce the launch of the Copernicus Data and Information Access Services (DIAS) – industry-led platforms to increase data access by innovative start-ups and other users who will be able to discover, process and download data more easily and less costly. Commissioners Bieńkowska and Navracsics will then visit the Ispra site of theJRC, which supports the Copernicus programme and provides products and services to policy makers based on data generated by satellites. Copernicus covers six thematic areas: land monitoringmarine monitoringatmosphere monitoringclimate changeemergency management response and security. Under the €16 billion EU Space Programme beyond 2020, the Commission proposes to expand these existing services to meet emerging needs, such as CO2 monitoring and polar missions to help fight climate change. More information is available in a news item and two factsheets on the history and the benefits of Copernicus. The speeches by the Commissioners during the official celebratory event tonight will be transmitted tomorrow on EbS+ at 9h30.


Mergers: Commission clears acquisition of Cisco’s Service Provider Video Software and Solutions business by Permira

The European Commission has approved, under the EU Merger Regulation, the acquisition of the Service Provider Video Software and Solutions (“SPVSS”) business of Cisco Systems, Inc of the US by Permira Holdings Limited (“Permira”) of the UK. Cisco’s SPVSS business supplies digital technology and services, including video processing and recording solutions and cloud-based platform services, to digital pay-TV service providers and content providers. Permira is a private equity firm providing investment management services and controlling a number of portfolio companies in a variety of sectors. The Commission concluded that the proposed acquisition would raise no competition concerns because there are no overlaps between the companies’ activities. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8945.


Mergers: Commission clears acquisition of joint control over the joint venture JVCO by HSBC Holdings plc and Global Payments Inc

The European Commission has approved, under the EU Merger Regulation, the acquisition of joint control over JVCO, a joint venture of Mexico, by HSBC Holdings plc. of the UK and Global Payments Inc. of the US. JVCO provides merchant acquiring services in Mexico. HSBC provides banking, insurance, asset management and global liquidity services. Global Payment provides services related to card payment processing. The Commission concluded that the proposed transaction would raise no competition concerns because JVCO has no activities in the European Economic Area. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8901.


Mergers: Commission clears acquisition of joint control over South Staffordshire by Arjun Infrastructure Partners and Mitsubishi

The European Commission has approved, under the EU Merger Regulation, the acquisition of South Staffordshire plc (“SSF”) by Arjun Infrastructure Partners Limited (“AIP”), both of the UK, and Mitsubishi Corporation of Japan. SSF, which is currently jointly controlled by Mitsubishi and KKR, is an integrated services group active in the areas of water supply and related services. AIP is an independent infrastructure investment advisory company. Mitsubishi is a global integrated trading company, which develops and operates businesses across a variety of industries. The Commission concluded that the proposed acquisition would raise no competition concerns, because neither of the parent companies is active in the same or related markets as SSF. The transaction was examined under the simplified merger review procedure. More information is available on the Commission’s competition website, in the public case register under the case number M.8920.



Joint Statement on World Refugee Day 2018

On the occasion of World Refugee Day, Frans Timmermans, First Vice President of the European Commission, Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the Commission, Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations, Neven Mimica, Commissioner for International Cooperation and Development, Dimitris Avramopoulos, Commissioner for Migration and Home Affairs, Christos Stylianides, Commissioner for Humanitarian Aid and Crisis Management, and Vera Jourová, Commissioner for Justice, Consumers and Gender Equality, made the following statement:“Every minute, every day, nearly 31 people are forcibly displaced. Today, more than 68.5 million people have been forced to leave their homes due to conflicts and violence, persecution, natural disasters or the very real consequences of climate change – 25.4 million of them are refugees. More than 67 years after the 1951 Geneva Convention on the Status of Refugees, its international principles remain more valid than ever. These principles are enshrined in the EU’s asylum acquis, and the EU remains committed to continue standing up for those who are in need of help. As a global player, we are working to tackle and solve the main crises through diplomatic means. As the leading global aid donor in the world, we provide humanitarian assistance and support to refugees, asylum seekers, displaced people, inside and outside Europe. We have shown unprecedented support […], and we continue to provide protection to those in need: in 2017 alone, EU Member States granted protection to more than 538 000 people. […] In this endeavour we work hand in hand with our partners around the world, certain that only a global response can match the challenge ahead. To this end we are building an ever closer relation with the United Nations High Commissioner for Refugees, responding to the plight of refugees worldwide and developing innovative solutions. […] These very same principles of solidarity, shared responsibility, multilateralism and engagement will be guiding us towards the adoption of the UN Global Compact on Refugees later this year. […] We must continue our work together with our Member States to establish more legal and safe pathways and close the dangerous and irregular migration routes. […] Member States have committed to resettle more than 50,000 of the most vulnerable persons and provide them with a new home in the EU. We must also reach, without delay, an agreement on the reform our Common European Asylum System based on the principles of responsibility and solidarity. […] In times of increasing divisive rhetoric against vulnerable people fleeing war and persecution, the EU is and will continue to protect those in need, and we will continue to endeavour to bring stability where there is conflict.” Read the full statement here.



Vice-President Šefčovič attends largest trade fairs for solar and battery technology in Europe

On 21 June, Commission Vice-President for the Energy Union Maroš Šefčovič will attend “Intersolar Europe” in Munich, the world’s leading exhibition for the solar industry, as well as “Electrical Energy Storage Europe”, Europe’s largest exhibition for batteries and energy storage systems. He will deliver an opening speech at the High Level Industrial Forum, outlining the EU’s vision as well as joint actions that foster the clean energy transition and innovation. Vice-President Šefčovič will highlight the recent agreement on a binding renewable energy target of 32% by 2030 (see STATEMENT/18/4155), in particular, as a clear signal to industry, investors and the global climate action community. This will greatly contribute to the Commission’s political priority as expressed by President Juncker in 2014 for the European Union to become the world number one in renewables. He will also reiterate the Commission’s commitment to create an innovative, sustainable battery ecosystem in Europe, materialised in first tangible results under the industry-led European Battery Alliance (see Third Mobility Package IP/18/3708 and Factsheet). More information about the programs is available here and here.


Commissioners Hahn and Gabriel in Belarus to participate in the Eastern Partnership Informal Dialogue

Commissioner for European Neighbourhood Policy and Enlargement Negotiations Johannes Hahn and Commissioner for Digital Economy and Society Mariya Gabriel will be in Minsk, Belarus, on 21-22 June to participate in the 10th Eastern Partnership Informal Partnership Dialogue. They will discuss cooperation within the “20 Deliverables for 2020” following the Eastern Partnership Summit in November last year as well as how to step up cooperation in the area of digital economy with the Minsters of Foreign Affairs and Ministers in charge of the digital agenda from the six Eastern Partners – ArmeniaAzerbaijanBelarusGeorgia, the Republic of Moldova and Ukraine. On 21 June, the Commissioners will meet with Minister of Communications and Informatisation of the Republic of Belarus, Sergey Popkov, to discuss ways to cooperate in the digital area and, in particular, in the area of cybersecurity resilience, and thereafter will participate in a plenary session on promoting broadband connectivity and tackling roaming tariffs in the region. On Friday, Commissioner Hahn together with Minister of Foreign Affairs of the Republic of Belarus, Vladimir Makei, will take part in a plenary session on the state-of-play of the Eastern Partnership and the External Investment Plan. During his visit he will also have bilateral meetings with President of the Republic of Belarus, Aleksander Lukashenko, Mr Makei, Mr Popkov and will meet with civil society representatives from the economy and digital economy sectors. Photos and videos of the visit will be available on EbS.


Commissioners Thyssen, Jourová and Andriukaitis participate in Employment, Social Policy, Health and Consumer Council

Tomorrow 21 and Friday 22 June, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, Marianne Thyssen, Commissioner for Justice, Consumers and Gender Equality, Vera Jourová and Commissioner for Health and Food Safety, Vytenis Andriukaitis will participate in the Employment, Social Policy, Health and Consumer Council (EPSCO). On Thursday, Ministers will discuss the Commission’s proposals on the revision of the rules on the coordination of social security systems, the Directive on transparent and predictable working conditions and on the Directive for a better balance between private life and professional career, the Commission’s so-called Work-Life Balance proposal. Employment and social policy Ministers will also hold a policy debate on the 2018 European Semester, including the country-specific recommendations, and they will discuss progress reports on the Commission’s proposal for a European Labour Authority and the Equal Treatment Directive. Finally, Ministers are expected to adopt conclusions on the future of work, the free movement of workers and early childhood development policies as a tool to reduce poverty and promote social inclusion. A press conference with Commissioners Thyssen and Jourová will take place at the end of the first EPSCO-day, around 17:00. The press conference will be live streamed here. On Friday 22 June, the Ministers intend to hold a policy debate on the Commission proposal for a Regulation on Health Technology Assessment. The Bulgarian Presidency of the EU has included a debate on the future of EU cooperation on health in the wider context of the future of Europe and the new Multiannual Financial Framework to explore how Member States could better drive the agenda in the area of health. Finally, it is expected that the Ministers will adopt conclusions on “Healthy nutrition for children: The healthy future of Europe“. Commissioner for Health and Food Safety, Vytenis Andriukaitis, will address all meetings as well as a couple of other agenda points under “Any Other Business” (AOBs), including the presentation of the Commission Communication and proposal for a Council Recommendation on strengthened cooperation against vaccine preventable diseases. The EPSCO is expected to conclude its two day meeting with a press conference on Friday 22 June, around 14:00, where Commissioner Andriukaitis will represent the Commission.

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