INSIGHTS BRUSSELS. .March 2014.

INSIGHTS BRUSSELS March 2014

SECTORAL POLICIES................................................................................................. 4
Agriculture And Fisheries ................................................................................................................. 4
The European Parliament rejects Commissions proposal on seed regulation .............................................................. 4 The European Parliament proposes new rules on organic farming ............................................................................... 4

Defence and Security Policy............................................................................................................... 5

The European Commission unveils a Roadmap on maritime security .......................................................................... 5

Energy and Environment ................................................................................................................... 6

EU Member States divided over 2030 climate and energy framework .......................................................................... 6 Commission imposed fines on leading European spot power exchanges ..................................................................... 6 Eurostat says EU consumption down by 8% since 2006 ............................................................................................... 7

Financial Services .............................................................................................................................. 7

The European Parliament approves insurance mediation directive ............................................................................... 7 The European Commission about to adopt Long term financing package .................................................................... 8

Food and Beverage ............................................................................................................................. 8

The European Parliament rejects the Commissions definition of nano-materials ..................................................................... 8 Parliaments Environment Committee approved animal cloning regulation ................................................................... 9

Healthcare and Pharmaceuticals ...................................................................................................... 9

European Parliament approves new EU programme for Health .................................................................................... 9

Information and Communication Technology ................................................................................ 10

The European Parliament and the Council of Ministers reach an agreement on broadband deployment ................... 10 The European Parliament approves regulation on personal data ................................................................................ 11

Transport .......................................................................................................................................... 12
Fourth Railway Package: the European Parliament votes in a tense climate .............................................................. 12 Road safety: the European Parliament makes eCall compulsory from 2015 ............................................................. 13 Public consultation on maritime consortia exemptions to antitrust rules ...................................................................... 13

INSIGHTS BRUSSELS March 2014

CROSS-SECTORAL POLICIES .................................................................................. 14

Competition ...................................................................................................................................... 14
The European Commission modernizes the State-aid rule book................................................................................. 14

Consumers ........................................................................................................................................ 15
The European Commission launches Consumer Awareness Campaign .................................................................... 15 National authorities adopted Common position to protect app-buyers ........................................................................ 15

Intellectual Property Rights ............................................................................................................ 16

The Council anticipates the implementation of the unified European Patent ............................................................... 16

International Trade.......................................................................................................................... 17
Progress in negotiations on the Transatlantic Trade and Investment Partnership ...................................................................... 17

Research and Development .............................................................................................................. 18

Commission adopts its 2014-2020 Final Simplification Scoreboard ............................................................................ 18

Taxation ........................................................................................................................................... 19
European Finance Ministers revitalize the debate on FTT .......................................................................................... 19

INSIGHTS BRUSSELS March 2014

SECTORAL POLICIES
Agriculture And Fisheries
The European Parliament rejects Commissions proposal on seed regulation
On 11 March, the European Parliament in plenary session rejected a Commissions proposal for a regulation of plant reproductive materials (PRM) which aimed at consolidating and updating legislation on the production and making available on the market of PRM with a view to ensuring quality and information for users. Members of the European Parliament rejected it claiming the proposal was failing to simplify the rules and was not supporting enough innovation. They also feared that the regulation would give the Commission too much power and leave EU countries without any leeway to tailor the new rules to their needs. The Commission decided not to withdraw its proposal and is waiting for the vote in the Council of Ministers. If the Council supports the Parliaments rejection, the legislation process will end. As a consequence of this vote, the Parliaments Committee on the Environment (ENVI) decided later during the month to exclude seeds from the scope of another new regulation on official controls in the food chain in order to be coherent with the above-mentioned rejection of the regulation on plant reproductive materials. The text is now expected to be voted during the last plenary session of April.

April: Vote in the Parliament during the plenary session 16-17 June: Vote in the Council of Ministers

The European Parliament proposes new rules on organic farming

On 25 March, the European Commission is expected to present a proposal for revised rules on organic farming. This initiative aims to better regulate the EU organic market that had gone through significant changes during the last 10 years: the size of the market growth by four times just while products increased in number and complexity. This fact incentivized the Commission to launch a public consultation on the future of organic farming in 2013. The results showed that a large majority of European citizens demand for stricter and harmonized rules throughout the EU. In line with consumers concerns, the Commissions proposal is expected to focus on three objectives:

INSIGHTS BRUSSELS March 2014

Strengthening rules on production and improving controls systems; Harmonizing the production rules in order to increase competition within and outside the Union;

Removing legal and administrative obstacles to developing organic farming in the EU.

25 March: Presentation of the proposal

Defence and Security Policy

The European Commission unveils a Roadmap on maritime security
On 6 March, the European Commission presented a Roadmap to establish a common strategy for maritime security. This initiative follows the meeting of the 28 EU Defence ministers that took place in Athens on 20 February. The aim of the strategy will be to establish a common maritime surveillance both in territorial and high waters in order to address issues as piracy, ship attacks or illegal immigration. The strategy will seek to increase coherence between the already existing crosssectorial policies and to enhance cooperation between EU institutions, Members States and sectorial actors. In this regards, the European Commission will set four main targets: Rationalizing the use of European and National capacities; Creating an partnership; effective international Increasing solidarity between Member States while guarantying sustainable costs; Improving research and innovation activities related to the maritime security and supporting staff training. Despite these general policy orientations, some observers note that the proposal actually lacks of concrete initiatives: no new structures, programmes, or regulation will be set in place. Based on this Roadmap, EU Heads of State and Government will now elaborate an EU Maritime Security Strategy with a view to adopt it in June 2014.

June 2014: Adoption of an EU Maritime Security Strategy by the Council

INSIGHTS BRUSSELS March 2014

Energy and Environment

EU Member States divided over 2030 climate and energy framework
Following the presentation by the European Commission in January of a new 2030 climate and energy framework, the 28 EU Environment and Energy ministers met in Brussels on 3-4 March to exchange views on the proposed framework consisting of a binding objective to reduce greenhouse gas emissions by 40% compared to 1990 figures and a binding objective to reach at least 27% of energy renewables in the EU energy mix in 2030. While Western European countries support an ambitious framework ahead of the international climate Summit in Paris next year, Eastern European ministers have been vocally opposing a quick decision on the framework, arguing that an international agreement should come first. Eastern European Ministers also repeatedly said that fair burden-sharing is essential in order for them to agree on a high greenhouse gas emission target for 2030. If no formal decision is expected during the first half of 2014, the first orientation debates at ministerial level are set to feed into the discussion of the upcoming European Summit of 20-21 March. According to draft leaked conclusions of the Summit, EU Heads of State and Government might push their final decision to the end of the 2014, potentially representing a win for Eastern European countries. In the European Parliament, MEPs continue to put pressure on the Commission and on the Council to adopt even more ambitious measures. MEPs called for binding targets of a 40% cut in CO2 emissions, a 30% target for renewable energy and a 40% target for energy efficiency by 2030. MEPs are also worried that the Commission may try to bypass Parliament by choosing a different legislative basis in the EU treaty when tabling its final proposal, in October at the earliest.

20-21 March: EU Summit discuss climate and energy issues 22-25 May: EU Parliament elections June 2014: Review of progress towards meeting the 2020 energy efficiency target June 2014: EU Council discuss energy and climate issues September 2014: UN Climate Change Summit October: Commission presents final 2030 package December 2015: Paris Climate Change Summit

Commission imposed fines on leading European spot power exchanges

On 5 March, the European Commission has imposed fines on the two leading European spot power exchanges (short-term trading taking place within the same day), EPEX (3,6 million) and NPS (2,3 million), for having agreed not to compete with one another for their spot electricity trading services in the European Economic Area. The cartel covered a period of seven months in 2011-2012 and NPS and EPEX received a fine reduction of 10% each for

INSIGHTS BRUSSELS March 2014

agreeing to settle the case with the Commission. Any person or firm affected by this anticompetitive behaviour may now bring the matter before the courts of the Member States and seek damages.

This case occurred in a context of a more global European approach to make it easier for victims of anti-competitive practices to obtain damages. The European Commission presented in June 2013 a draft Directive to cover this aspect of anticompetitive behaviours.

Eurostat says EU consumption down by 8% since 2006

Eurostat, the statistical office of the European Commission, published on February 17 figures on gross inland energy consumption in the European Union. Over the last two decades, gross inland energy consumption in the EU, which stood at 1 670 million tonnes of oil equivalent (Mtoe) in 1990, rose to a peak of 1 830 Mtoe in 2006 and then decreased to 1 680 Mtoe in 2012. Between 2006 and 2012, gross inland energy consumption in the EU28 has then fallen by 8%. According to Eurostat, the energy dependence rate stood at 53% in 2012. The domestic production of primary energy was 794 Mtoe in 2012. Nuclear energy (29%), accounted for the largest share, followed by renewables (22%), solid fuels (21%), gas (17%) and oil (10%).

Financial Services
The European Parliament approves insurance mediation directive
On 26 February during a vote in plenary session, the European Parliament adopted a position on the review of the directive on insurance mediation, a reform proposed in July 2012 by the European Commission to increase the protection of policyholders by regulating insurance services selling practices. The Commissions proposal has faced opposition by Members of the European Parliament on two main aspects: The tying practice (the practice consisting in selling many insurance products in a package) was banned in the Commissions proposal for consumers protection reasons. Many MEPs (including the rapporteur) rejected this ban and supported instead new rules limiting this practice without banning it completely. According to the provisions adopted, consumers should have now the right to decide if they want to buy the different components separately or as part of a package and they should be fully informed about the prices and the risk profiles of the services. The range of products covered by the reform has also been increased: new requirements on transparency, conflict of interest and

INSIGHTS BRUSSELS March 2014

information provision have been included in the draft Directive. Representatives of credit providers welcomed the vote while consumers organizations judged it insufficient even if they concede some improvement in the protection of consumers.

The European Parliament has now to find an agreement with the Council.

April: start of negotiation with the Council Mid 2014: possible final adoption of the directive

The European Commission about to adopt Long term financing package

On 27 March, the European Commission is expected to adopt a follow-up communication to the green paper on the Long-term financing of the European Economy. The green paper was drafted in order to address a major problem for the European Economy: the lack of long-term financing. The crisis has weakened banks capacity to lend and new institutional actors have to be involved in order to finance future investments. The Commissions proposal sets actions around six main areas: Private finance: Involving private actors in the long-term financing process; Public finance: Rationalizing the use of public finance for long-term financing; Capital Market: Improving the effectiveness of the market to boost long-term financing; SMEs: Improving SMEs access to finance; Infrastructure: Mobilizing private source in infrastructural projects; Cross-cutting factors: Adapting the legal and tax framework for long-term financing. On the same day the Commission will also adopt a legislative proposal to revise the existing panEuropean legal framework on occupational pension provisions (IORP).

27 March: presentation of the proposal

Food and Beverage

The European Parliament rejects the Commissions definition of nano-materials
On 26 February, the European Parliaments Committee on the Environment (ENVI) rejected the European Commissions proposal for a redefinition of engineered nanomaterials. The Commission was putting forward a new definition to adopt the finishing touch to the Food Information Regulation (FIR) adopted in 2011, and according to which, ingredients classified as engineered nanomaterials should be clearly

INSIGHTS BRUSSELS March 2014

indicated in the list of ingredients of any commercialized product. MEPs considered that the 50% threshold required of nano-particles contained in an ingredient to classify it as nano is considered too low.

The European Consumers Organisation expressed satisfaction toward MEPs vote, stating that Commissions proposal would have limited consumers right to be informed about ingredients they consume.

N.A.: New Commissions proposal

Parliaments Environment Committee approved animal cloning regulation

On 20 February, the Committee on the Environment (ENVI) approved the draft regulation proposed by the European Commission to ban animal cloning for food production. Despite the positive vote, Members of the Committee addressed formal and substantial critics to the Commission. From a formal point of view, MEPs criticized the choice of the Commission to choose a consent procedure for the most important part of the package. MEPs stated that this very sensitive file should have been dealt with the ordinary procedure. The Parliament does not have binding powers and will only be able to approve or reject a compromise proposal coming from the Council. From a substantial point of view, MEPs blamed the Commission for not including in its proposal rules to ban products obtained from descendants of cloned animals (especially coming from third countries where this practice is legal). Members were also expecting rules to guarantee the traceability and the labelling of food from descendants of cloned animals. The final resolution is probably going to be voted during the plenary session of April. This vote will act as a warning signal addressed to the Council ahead of the kick-off of its negotiations with the Commission.

April: vote in the Parliament during the plenary session April: start of the negotiations between the Council and the Commission

Healthcare and Pharmaceuticals

European Parliament approves new EU programme for Health
On 26 February, the European Parliament in plenary session approved with a large majority the European Union Third Health Programme. The vote confirmed the agreement negotiated with the Council. The programme aims to achieve four objectives:

INSIGHTS BRUSSELS March 2014

Promote health, prevent diseases, and foster supportive environments for healthy lifestyles; Protect citizens from serious cross-border health threats; Support public health capacity to build and to contribute to innovative, efcient and sustainable health systems; Facilitate access to better healthcare for Union citizens. and safer

supported project. This gure rises to 80% in case of specific joint actions. Access to funds will be facilitated by the creation of a single point of contact. Potential candidates for funding are national health authorities, as well as public and private bodies, international and non-governmental organizations. On 11 March, the regulation has been adopted by the Council. The publication of the annual work programme 2014 is expected by May.

The budget made available for the new Health Programme will be 449.4 million. This means an increase of more than 100 million compared to the last 2007-2013 programme. In most cases, the European Union will provide grants that will contribute for 60% of the costs of

April/May: Publication of the 2014 work programme

Information and Communication Technology

The European Parliament and the Council of Ministers reach an agreement on broadband deployment
On 28 February, representatives from the Council and the European Parliament reached a compromise on a directive on the cost of deploying high-speed electronic communications networks. The aim of the directive is to improve the coordination of civil engineering works in order to reduce costs of deployment of highspeed networks. According to the European Commission, civil engineering costs, like the repetition of pavements digging, accounts for 80% of the cost of deploying broadband. The new regulation will in that respect introduce the obligation for network operators to grant access to their physical infrastructures for broadband installation. The rule would be mandatory for companies working in the following sectors: telecommunications, energy, sanitation and transport. Companies working in the drinking water sector would be excluded because there are too many sanitary issues related to this particular sector. This rule already exists in some Member States (France, Portugal and Belgium). Furthermore telecoms operators will be able to receive basic information about existing or under construction infrastructure, through a single information point that may be just an internet portal. Regarding disputes, MEPs obtained that

INSIGHTS BRUSSELS March 2014

decisions made by the regulatory authority in case of conflict will be binding. Member States will not be forced to improve infrastructures or to map their network. The only controversial point is that, from 2017, new buildings or those under major renovations must be high-speed-ready. The text has now to be formally approved by the Council of Ministers and by the European

Parliament during its plenary session in April. The new measures are expected to enter into force in 2016.

April: Parliaments formal adoption April-May: Council formal adoption 2016: entry into force

The European Parliament approves regulation on personal data

On 12 February, the European Parliament in plenary session approved by an overwhelming majority a report by Jan-Philipp Albrecht (Greens, Germany) on personal data protection. The text introduces stricter rules for data gathering and processing. Tougher sanctions in case of violation of the European rules (5% of the global turnover while the Commission proposed 2%) are also introduced. Another milestone of Albrechts report is the introduction of the right to be forgotten which means that users should have the right to have their own data removed. The consent of the use of data should also be clarified and become more explicit especially when the data are transferred to third countries. Despite the large majority within the Parliament to support the report, the text has been criticized by associations such as Digital Europe which fears that European companies would lose competitiveness. Journalists and publishers association also criticized the regulation denouncing a limitation to freedom of press and of expression. The press association claims for an exemption for journalistic and artistic purposes from the provisions on the right to be forgotten. This exemption was originally included in the Commission proposal. The Parliament has now to find an agreement with the Council and negotiations are likely to be very intense especially because the text is extremely dense and technical. The text will probably be discussed in June during an informal meeting among EU justice ministers. A definitive agreement is unlikely to be reached before the end of 2014.

June: informal meeting between Justice Ministers Early 2015: expected agreement in the Trilogue

INSIGHTS BRUSSELS March 2014

Transport
Fourth Railway Package: the European Parliament votes in a tense climate
On 26 February in plenary session, the European Parliament voted on the EU's fourth railway package, aimed at fully opening up rail to competition from 2019 by liberalising national passenger transport, the last segment still protected today. In reality, though, many provisions will continue to make it complicated for new players to enter the market. In December 2019, barriers will be removed and rail undertakings will have the opportunity to directly offer passenger transport services that compete with those of the incumbent railway companies. However, given the fact that most national lines are covered by public service contracts (representing 90% of national traffic), new players will have to wait until 2022 for new provisions to apply on tendering procedure to award public contracts. And even after that date, Member States will still be allowed to award direct contract: the obligation to launch tendering procedure will be compulsory only if the incumbent railway company does not fulfil a certain number of criteria such as punctuality, frequency of services, customer satisfaction or quality of rolling stock. The Parliament also confirmed its rejection of the separation between infrastructure manager and incumbent rail operator, much to the Commissions disappointment. With this vote, the European Commission considers that many MEPs have continued to protect traditional railway companies from competition and technical problems. MEPs were also subject to intense lobbying actions from Member States and incumbent railway companies. Some 2,600 rail workers from 17 countries also demonstrated, on 25 February in Strasbourg, ahead of the European Parliament's vote. Along with the measures on market liberalization, the Parliament also approved the technical simplification of the European rail, since there are currently over 11,000 different national technical and safety rules in each of the 28 member states, hampering competition and leading to excessive administrative costs.

March-April: Council of Ministers examine the package 13 June: Transport Ministers Council September: possible start for Trilogue negotiations December 2019: passenger transport liberalization December 2022: new rules for tendering procedure

INSIGHTS BRUSSELS March 2014

Road safety: the European Parliament makes eCall compulsory from 2015
On 26 February, the European Parliament adopted a regulation to make compulsory from October 2015 onwards the installation in all new models of cars and light utility vehicles of an automatic dialling system for reporting road accidents, a device also known as eCall. The system automatically alerts emergency services to the exact location of an accident, using the emergency number 112. According to the European Commission's estimates, it could save almost 2,500 lives a year by allowing emergency services to reach accident scenes more rapidly. Some Members of the European Parliament also raised some concerns about the protection of privacy. MEPs consequently adopted some restrictions on information supplied in the event of an accident. According to the automobile industry, the deadline is very ambitious, as Member States will need to deploy public service answering points (PSAPs) to receive the call.

Before May: possible final adoption of the regulation 13 June: Transport Ministers Council October 2015: obligation to install eCall devices in all new models of cars

Public consultation on maritime consortia exemptions to antitrust rules

On 27 February, the European Commission opened a public consultation to gather comments on a proposal to prolong for another five years an exemption of liner shipping consortia from the application of EU antitrust rules that prohibit certain agreements between companies. The maritime consortia block exemption regulation allows shipping lines to enter into cooperation for the purpose of providing a joint service. In light of the comments received, the Commission will then adopt a new Regulation before the expiry of the current Regulation in April 2015. The consultation will be open until 31 March 2014.

31 March: deadline for the public consultation Fall 2014: Commissions draft proposal presented April 2015: expiry date for current exemption April 2020: expiry date future exemption (if adopted)

INSIGHTS BRUSSELS March 2014

CROSS-SECTORAL POLICIES
Competition
The European Commission modernizes the State-aid rule book
The European Commission is currently putting the finishing touch to its new framework for state aid rules to be presented in April. Since May 2012, the European Commissioner for Competition, Joaquin Almunia has launched a process of modernization of state aid rules with a view to focus on how the rules should apply to sectors that have traditionally been public but where private companies are increasingly active. Following preliminary works, the European Commissioner is now ready to defend key elements of new guidelines in the following areas: Energy and environmental state aid guidelines: the public consultation on draft guidelines ended on 14 February. With an increasing penetration and decreasing costs of renewable energy, the Commission wants state aid rules to gradually move to a more market friendly support of renewable energy in the form of market premiums or certificate schemes. Nine governments, (including Austria, Denmark, France, Germany, Luxemburg, the Netherlands, Poland, Sweden and United Kingdom) published in February a position paper to argue that the new rules on the funding mechanism for renewable energy and the opening-up of the national funding systems for other countries are too restrictive ; Research, development and innovation activities: the public consultation on draft guidelines ended on 17 February. The Commission seeks to offer Member States more possibilities to channel state aid towards boosting innovation and jobs, by clarifying conditions for subsidized pilot and demonstration projects, by facilitating the validation of technologies vital for the competitiveness and by creating a new category of aid for construction and upgrade of research infrastructure; Agriculture and forestry sectors: the Commission opened on 24 February a public consultation on draft new rules on State aids in the agriculture and forestry sectors and in rural areas. The new rules proposed should speed up procedures and significantly reduce the administrative burden for public authorities when dealing with State aids in the agriculture sector. These drafts are made public to inform institutions, public authorities, organisations, companies and citizens who can make comments by 24 March 2014. Aviation: the European Commission launched a public consultation in July 2013 and definitely adopted the guidelines on 20 February 2014. It frames State aid for investment in airport infrastructure, Operating aid to regional airports and Start-up aid to airlines to launch a new air route. In 2012 and 2013, the European Commission already adopted guidelines in the broadband sector, in risk finance management, in regional

INSIGHTS BRUSSELS March 2014

aid and in the promotion of important projects of common European interest. The Commission has also invited opinions on whether settlements between tax authorities and individual companies can constitute state aid. The upcoming new framework will clarify key concept related to the notion of state aid with a view to

contributing to a consistent application of these notion across Europe.

24 March: deadline for public consultation on agriculture and forestry April: presentation of the new framework

Consumers
The European Commission launches Consumer Awareness Campaign
On 14 March in Thessaloniki, took place the European Consumer Day. On the occasion the European Commissioner for Consumer Policies, Neven Mimica, announced the kick-off of the Consumer Awareness Campaign. The new consumer right directive will enter into force on 13 June giving to citizens key consumers rights: Right to return products within 2 weeks; Right to have defective products repaired or replaced; Right to be fully informed about products; Right to be informed about the right address to contact in case of complaint. According to the Commission, the next step to take is to inform consumers of their rights and how to use them in practice. This step seems fundamental to fulfil the scope of the legislation. To address this issue the Commission is going to launch next spring, the Consumer Awareness Campaign. The initiative will focalize on countries where awareness of consumer right is low according to the latest consumer scoreboard. Commissioner for Consumer policies will visit Bulgaria, Cyprus, Greece, Italy, Latvia, Poland, Portugal and Spain. A series of formative events will be organized around his visits.

Spring: Start of the Consumer Awareness Campaign

National authorities adopted Common position to protect app-buyers

On 27-28 February, the national authorities within the Consumer Protection Cooperation Network (established by a EU regulation) took a common position on practice related to applications purchase. According to data processed by the European Commission, 80% of the income of app-sellers comes from in-app buys (buying services during the use of an application to access full content). The aim of the position is to avoid practice that may mislead

INSIGHTS BRUSSELS March 2014

consumers. National authorities focused on 4 main issues: Avoid consumer misleading by advertising game as free when they are not; Prevent children to purchase apps updated versions; Avoid charging consumers without an explicit;

Provide information to consumers and especially traders email address, National authorities and the European Commission will keep monitoring the industry until a formal commitment and a detailed agenda is set up with app-providers

Intellectual Property Rights

The Council anticipates the implementation of the unified European Patent
On 4 March, the EU 28 Justice and Home Affairs Ministers adopted a proposal to modify the so called Brussels I regulation which recognizes national court judgments in civil and commercial matters. This regulation was amended in order to adapt the legal framework to the future unified patent system which is expected to be operational in 2016. Despite this adoption, the unified European patent will certainly be delayed. Currently only two Member States (Austria and Malta) have ratified the international agreement that establish the court in charge of hearing disputes. Spain and Poland decided to stay out of the deal while Croatia was not part of the Union when the agreement was signed one year ago. The other Member States have to ratify the text through their legislative chambers or by referendum (such as in Denmark). The European Court will have a central division in Paris, and two branches: one in London specialized on pharmaceutical patents and a second in Munich focalized on engineering patents. The future rules of procedure of the new body will be published in summer 2014 by a preparation committee. The unitary patent will entry into force after the ratification of the agreement by at least 13 countries including France, Germany and the United Kingdom.

Summer 2014: Publication of the rules of procedure of the European Patent Court 2016: expected unified European patent

INSIGHTS BRUSSELS March 2014

International Trade
Progress in negotiations on the Transatlantic Trade and Investment Partnership
From 10 to 14 March, representatives from the European Union and the United States met in Brussels to try to move a step forward in the Transatlantic Trade and Investment Partnership (TTIP) negotiations. Both sides reported regular progresses without providing too many details. According to observers, negotiators are now trying to build consensus around the discussions involving a large number of stakeholders in the talks. In this context, the two sides published a joint document analysing the potential benefits of the agreement for Small and Medium Enterprises (SMEs). The document highlights how small businesses are negatively impacted by non-tariff barriers during their internationalization processes. Negotiators also met around 300 representatives of business, consumers and other relevant stakeholders. The most controversial aspects that were discussed are: Market access: the offer made by the US on tariffs removal is still considered insufficient by the European side. According to EU officials the EU aims to remove tariffs in 96% of areas while the US wish to stop at 88%. On that point the compromise could be to elaborate a roadmap to remove tariffs on different kind of goods gradually (immediate removal, 3 years, 7 years and undefined). Public procurement: The Commission would like European Companies not to be discriminated while competing to bid procurement contracts in the US, especially at the state level. Currently, the so-called Buy American Act, encourages companies to prefer US-made products in their purchases Exclusive rights for well-known products like feta cheese or Porto wine. Cheese made in the US can be labelled and sold as Parmesan while in the EU it cannot. The EU asks the recognition of a Geographical Indication protection while the US consider that the European system is too broad and unfair towards American producers. Europe has already reached a similar compromise with Canada claiming that this recognition avoids consumers misleading. Investor-State Dispute-Settlement (ISDS): The US aims to strengthen companies position on legal disputes with States; on this point the EU will launch in the next weeks a three months public consultation. The Commission is willing hold its decision until the end of the public consultation results. Germany already expressed concerns on this point. Data protection: The European Parliament is demanding to include regulations addressing how private data is collected by businesses in the agreement.

INSIGHTS BRUSSELS March 2014

Financial services: The US are still resisting the European pressure on including financial services in the deal.

expected to meet again before the summer in Washington.

26 March: US president Obama visits EU in Brussels

A fundamental next step will be the visit of the US President Barack Obama in Brussels on 26 of March when the Commission hopes he will provide political guidance. Negotiators are

End of June: deadline of the public consultation Summer: Fifth round of negotiations in Washington

Research and Development

Commission adopts its 2014-2020 Final Simplification Scoreboard
On 4 March, the European Commission adopted a Final Simplification Scoreboard for the Multiannual Financial Framework 2014-2020. The text introduces 120 measures to simplify the European Union funding rules. The aim of the initiative is to facilitate the access to EU funding for European businesses, towns, regions, scientists and NGOs but without reducing the monitoring on how the money is spent. The measures adopted include: a simplified procedure to get reimbursement in research, shorter deadline for payments to beneficiaries (90 days) in cohesion policy and the introduction of an electronic system (e-cohesion) for beneficiaries to submit data in cohesion policy. Nevertheless more is still to be achieved especially at a national level. Around 80% of the EU budget is implemented by Member States so efforts to reduce administrative burdens on beneficiaries should be continued at local and regional level. On the same day the European Commission published a report (Innovation Union Scoreboard 2014) that evaluates the innovation performance of the EU countries. Unexpectedly the figures show that the effects of the crisis were not as severe as expected. Generally the rate of average EU innovation performance has increased with Sweden, Denmark and Germany still leading the ranking. The indicators concerning convergence between Member States performance also showed positive results.

INSIGHTS BRUSSELS March 2014

Taxation
European Finance Ministers revitalize the debate on FTT
On 19 February, Finance Ministers from 11 Eurozone Members had an informal meeting outside the Ecofin Council to discuss the introduction of the proposed Financial Transaction Tax (FTT). Under the enhanced cooperation procedure 11 countries are trying to reach a political agreement or at least a joint declaration on the FTT before the European elections of May (Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Slovakia, Slovenia and Estonia). The discussion at a political level shows for the very first time that despite the critics that followed the stalemate of the proposition 11 Members are still determined to introduce the rule. The key questions that have been debated among ministers mainly focus on: The scope: Members are discussing about applying the tax only to shares and to extend it later to bonds and derivatives; The principle of place of residence of the parties to the transaction and/or the place of emission of the taxable financial instruments. Germany and France are discord on these fundamental points. Both countries want to avoid the risk that the new rules could lead to a flight of capital outside the FTT zone. According to observers this contrast may lead to a minimalist compromise. The only certain element is that the revenue coming from this tax would be much lower that the amount planned by the Commission (35 Billion Euros).

May: next Ecofin Council

INSIGHTS BRUSSELS March 2014

INSIGHTS BRUSSELS March 2014