LEGITIMATE INFLUENCE

Better regulation in the digital era: What is the future of business regulation? #EUPowerShift Series

The Better Regulation Agenda has been a priority of the Juncker Commission. What are the lessons learnt from the actions carried out in the past years? What remains to be done to complete this ambitious agenda? What new approaches can be thought of in the future, notably in light of the transition towards an ever more digital economy?

On 1st of March, the Vinces Brussels office organised the second of a series of three events on the topic of shifting power in Europe, a phenomenon we are exploring through three angles according to the Vinces methodology: politics, regulation, and society. While we focused on the political angle during our first event as we discussed the potential for a power shift to the South in the Council following Brexit (conclusions here), during our second event we explored the regulation angle by taking stock of the Better Regulation agenda (see programme here).

When President Juncker appointed Frans Timmermans as the first ever First Vice President of the European Commission, he also put Better Regulation first in the order of priority of his extensive  portfolio. We knew this meant that the Better Regulation agenda of the upcoming Commission would be a significant step in the history of EU law-making. And interest representatives were eager to see what the Juncker Commission would come up with.

Since then the Commission has issued a number of communications on this topic, put in place many initiatives and the EU institutions all together have even adopted a joint agreement on how to better regulate together.  The initiatives that have been promoted include generalisation of impact assessments of legislative proposals, wide public consultations before legislating and fitness checks of the existing legal framework (known as REFIT in EU jargon)… to name but a few.

 

Two key points emerged from our discussion:

Suggested improvements to the Commission’s consultation process – While the Commission feels that a great deal has been achieved – and indeed it has been very active – a key point to improve is the feedback to those who have taken the time to participate in consultations so they do not feel that their contributions go into a blackbox. Also, SMEs do not have the time to take part in public consultations or speak at hearings so how can their views be taken into account?

Innovation principle and agility to lead regulators – Regulation is often playing catchup with the pace of technology development. The EU law-making process can take up to six years from the initial consultation process to national implementation. This can lead to EU efforts to regulate on digital issues to be already outdated by the time a legislation is adopted. Ideas on how to overcome this include anchoring an innovation principle in EU law-making, keeping the regulatory process focused on the objective to be achieved, and crafting legislation in a more agile way.

The way the EU regulates is probably not fit for the 21st century, and quite understandably as it was designed before the digital revolution took place. But the Commission Better Regulation team is open to ideas on how to adapt regulation to the dynamics of today’s economy. There might even be tech tools to help EU regulators achieve the massive ambition of better serving the 500 million EU citizens. As we are reaching the end of the Juncker Commission’s mandate, the Commission will open a new consultation to take stock of its Better Regulation work. This will be an opportunity for all to reinvent EU regulation and to imagine alternative ways to achieve public policy objectives.

 

Laurence Modrego

Will we see a shift of power to the South in post-Brexit EU?

The French-German relationship has traditionally been an engine of EU construction. This tandem has often been balanced by the influence of the United Kingdom. Without the UK, what new dynamics will emerge between Member States?

The French-German relationship has traditionally been an engine of EU construction. This tandem has often been balanced by the influence of the United Kingdom. Without the UK, what new dynamics will emerge between Member States? Do the recent initiatives — led jointly by France, Germany, Italy and Spain (informal summits, digital economy proposals) — augur a new leading quartet for the EU, which will lean more towards Southern interests and concerns than it did in the past? These are some of the questions we discussed during the opening event of the Vinces Brussels office with Spain’s Secretary of State for European Affairs Jorge Toledo and a panel of experts.

 

What is clear is that there is a rationale for this shift to take place:

 

There is an opportunity – The UK’s departure will leave a void to fill. There are few countries of this size in terms of population and no equivalent in terms of its economic power and geopolitical reach. Germany’s current struggle to form a government might leave another place to fill, albeit temporarily. In terms of population size only Italy reaches the levels of these three countries (above the 60-million-mark), Spain and Poland are the next countries in terms of population size (47 and 39 millions respectively), with all other EU countries having significantly smaller populations. This means Brexit will create an opportunity for Southern States to take more power at EU level.

 

It is democratically legitimate – EU Southern States currently represent 39% of the EU population. After Brexit, EU Southern States will represent 45% of the EU population. This is almost half of the EU population.

 

These countries have joint interests – Southern States [1] have many common points. They share cultural roots and a certain lifestyle that’s recognised world-wise. Their economies have similar features (tourism, cultural industry, agriculture). They also share a strategic position for Europe at the door of North Africa and are therefore often the first point of entry for migrants from this region.

That being said, historically these countries seem to have had difficulties working together to develop joint priorities at EU level. Differences of views and the belief in being better off defending its own interests directly won over the quest for synergies.

Will the future be any different? Also, is there a country that is willing to take the lead in building up this alliance? And is France a Southern country anyway? We opened lots of questions during this evening debate, some of which would be worth panel debates on their own! What also came out of our discussion is that with great power, comes great responsibility[2]. If Southern States would like to have a steering role for the EU, this might also mean moving from being net beneficiaries from EU funds to becoming net contributors to the EU budget.

This debate was the first of a series of three events on the topic of shifting power in Europe, a phenomenon Vinces is exploring through three angles according to the Vinces methodology: politics, regulation, and society. Our next event will be on the smart regulation agenda, and the last one on the societal trends that will impact the 2019 European elections. Do let us know if you’d like to join.

 

[1] France, Italy, Spain, Greece, Portugal, Croatia, Cyprus and Malta, by order of population size.  

[2] Spider-Man (paraphrased)

President Juncker’s State of the Union Speech: what to expect from the EU by May 2018

What to expect from the EU by May 2018

The yearly State of the (European) Union speech by the European Commission President is a solemn moment. After EU public affairs professionals come back to work hopefully all rested after the summer break, this speech delivered in front of the European Parliament is the opportunity to get out of the day-to-day details of legislative policy making and reaffirm the high-level politics that drive any regulatory proposal.

While last year’s speech was darkened by the decision of UK citizens to leave the EU, this time Juncker deliberately delivered an optimistic speech. He emphasized the fact that Europe is in a good shape after 5 years of recovery, 2 years of higher growth than in the US and the lowest rate of unemployment since 2009. To Juncker, this means now is the time to be ambitious about Europe. In that respect, he made (or endorsed) a few bold proposals:

President Macron’s proposal for transnational lists for the European Parliament elections – In the context of the emergence across Europe of new political movements that have disrupted the traditional left-right divides, this will give these movements an opportunity to develop a European network and consolidate their presence in the European Parliament.

Merging the Commission President role with that of the European Council President – At the moment they both represent the EU in international forums, which is confusing (Who shall I call to speak to Europe?).

The creation of a new European Minister of Economy and Finance – which would elevate the European Commissioner in charge of Economics and Finance to Commission Vice President and Chair of the Eurogroup.

While a detailed list of the upcoming concrete policy proposals of the European Commission can be found in the accompanying letter of intent, the 2017 State of the Union speech presented the priority proposals of the Commission, among which:

Trade – A Trade Package was published on the same day of the speech. The most important aspect Juncker underlined is that from now on, the Commission will publish all draft negotiating mandates for trade agreements before they are presented to the Council. This gesture shows that the Commission believes no future trade agreement can pass without social legitimacy. This was shown by the rejection of ACTA following civil society protests, the difficulties around the approval of CETA and how TTIP lost its legitimacy in the eyes of civil society due to being perceived as the product of opaque negotiations. Another proposal showing a significant change of approach in this area is that for an EU framework for “Investment Screenings” which is EU jargon for giving the opportunity for debate in case European harbours, energy infrastructures or defense technology companies are being sold to non-EU buyers.

A new European strategy for the industry so European industries become world champions in innovation, decarbonisation, and digitalisation.

Proposals for Europe to be at the forefront of the fight against climate change, notably by proposals to reduce carbon emissions in road transport (November 2017).

Cybersecurity strategy – A package of proposals in response to the fact that last year only, 80% of EU companies faced a cybersecurity incident.

Other significant announcements include:

Full support of vaccines – Juncker stated it is unacceptable that in Europe, children still die of diseases that should have long been eradicated. He added that Romanian and Italian children should have the same access to measles vaccine than any other child in Europe. He therefore strongly stated his full support of national vaccine plans.

Proposals to adapt the EU budget to new ambitions (May 2018).

Moving from unanimity to qualified majority voting in the Council on areas such as VAT, taxation of the digital economy and the financial transaction tax. This can be done without Treaty change, he argued.

Does this seem like a lot? To top it off, President Juncker added that all these proposals will be presented by May 2018, to give them enough time to be adopted before EU leaders shift their focus onto the May 2019 European elections. This means there is a heavy workload ahead!