2018: A Critical Year for the EU to Deliver
By Daniel Debono
EU affairs manager, Head of Brussels operations, Malta Business Bureau
When one looks back at President Juncker’s 10 political guidelines that were set at the beginning of his mandate, one concludes that this last Commission programme is a continuation of the work undertaken over the past four years, and aims to complete some of the political projects; particularly in the area of consolidating the single and digital single markets, completing an energy union, deeper integration in the economic and monetary union (EMU), putting the EU on the forefront of combatting climate change, and an ambitious trade policy.The European Commission published its last Work Programme for the current legislature. As the current mandate of the Commission comes to an end with the next European Parliament elections being held in the first half of 2019, any proposal published next year is expected to have sufficient time to go through the co-legislative process in Council and Parliament, possibly to be concluded in time prior to the elections.
Completing the Digital Single Market
As digital trade is becoming ever more important, the need to ensure transparency and fair-level playing-field for businesses and consumers alike is paramount. Since the launch of the Digital Single Market strategy in 2015 most of the proposals have been published, yet so far only six were adopted. The Commission has called on the co-legislators, Council and Parliament, to intensify discussions and make substantial progress on pending dossiers such as the copyright reform and digital content directive. Next year, it will also publish the remaining proposals listed in the strategy, with the most prominent one being an initiative to address ‘online trading platform to business relations’, and a framework providing the means to address the spread of fake information on online platforms.
The European Energy Union seeks to ensure that EU member states have a reliable supply of energy while achieving this in a sustainable and environmentally friendly manner. The Clean Energy Package is well underway with good progress in proposals covering the areas of energy efficiency, energy performance in building and renewable energy. More work is required in the areas of energy union governance and market design. The EU has become increasingly reliant on natural gas imports, particularly on gas imports from Russia. As dialogue over the Nord Stream 2 pipeline will continues, next year the Commission will make a proposal for a set of common rules for gas pipelines entering the European internal gas market. The Commission will also issue a new strategy on the future of EU energy and climate policy.
Circular Economy Action Plan
The circular economy action plan benefits the environment and the economy. It is also central to the EU’s strategy in combatting climate change. Following extensive work on waste, in 2018 the Commission will issue a plastics strategy that will focus on its use, reuse and recycle. It is also expected to make a proposal for a regulation on minimum quality requirements for reused water; a revision of the Drinking Water Directive; and a monitoring framework for the circular economy.
Completing the Capital Markets Union
Access to finance remains a challenge for many European businesses, especially SMEs. Through its Capital Markets Union project, the EU aims to simplify and incentivise cross-border investment, and the raising of capital through alternative financing instruments. While offering greater choice to investors and businesses, the Capital Markets Union would also make the EU financial system more resilient owing to the diversification of sources. In this regard, next year the Commission will table proposals for an EU framework on crowd and peer-to-peer finance; a revised framework for investment firms; and an initiative on Financial Technology (FinTech).
Completing the Economic and Monetary Union
Deeper integration of the economic and monetary union (EMU) is perhaps the EU’s most ambitious project to date, and the one facing the biggest reforms in this Commission’s last year in office. While the EMU is often blamed to be a half-baked project, many divergences exist among member states on the level of integration that should take place. Nevertheless, the Commission is taking bold steps in putting proposals forward despite an uncertain political climate. In 2018 the Commission will propose an initiative to transform the European Stability Mechanism (ESM) into a European Monetary Fund (EMF), a setup that will have stronger powers to protect the eurozone by offering financial assistance to member states and banks struggling economically and financially. The Commission will also propose the creation of a euro area budget line within the existing EU budget that will four main functions; (i) structural reform assistance, (ii) a stabilisation function, (iii) a backstop for the European Banking Union, and (iv) a convergence instrument assisting potential euro adopters.
Another important EMU project is the Banking Union. This looks to provide a standard regulatory and supervisory framework to prevent bank failures within the eurozone. Following initial developments in the aftermath of the crisis, progress slowed over the past years. The Commission will push forward with proposals concerning secondary markets for non-performing loans, and the development of EU sovereign bond-backed securities.
European Pillar of Social Rights
The European Pillar of Social Rights is the EU’s commitment to strengthen labour conditions and welfare systems within the eurozone. More specifically, it seeks to ensure equal opportunities, access to work and fairer conditions, while fostering greater inclusion and social protection. This pillar is accompanied by a social scoreboard which analyses trends within EU member states with regards to issues such as youth employment, gender equality in the workplace, education, social inclusion and so on.
The Commission plans to incorporate this scoreboard into the European Semester Process to ramp up monitoring of such issues. More specifically to this policy area, in 2018 the Commission will make a proposal to establish a European Labour Authority; an initiative on access to social protection for atypical self-employed workers; an initiative on a European Social Security Number; and a revision of the Written Statement Directive.
Multi-Annual Financial Framework Post-2020
The EU budget runs in seven-year cycles. The current programme ends in 2020. In 2018 the Commission will therefore put forward a new proposal that will identify the investments that will be put in and distributed through various programmes addressing among others regional cohesion, migration and security, research and development, innovation, and competitiveness in the EU. The most interesting aspect in this process will be the impact of Brexit on the future EU multi-annual financial framework. To date the UK’s contribution to the EU budget accounts to about 14 per cent. One will have to see how this gap will be mitigated.