13.10.2017   

EN

Official Journal of the European Union

C 345/1

1.1.

The European Economic and Social Committee (EESC) stresses the importance of the year 2018 as the last fully operational year for the current Commission — as well as the European Parliament. Therefore the EESC calls on the Commission to draw up its work programme in an ambitious, yet pragmatic manner, in order to address properly the challenges entailed in the European Union being at a crossroads. Given the uncertainties about Brexit and global developments, a wide-ranging, participatory and structured debate on the future of Europe is now more necessary than ever. It is important to go back to our roots and recall the original project and fundamental values and objectives of the Union as they are enshrined in the EU Treaties.

1.2.

We should build on the positive outcomes achieved so far. However, the appearance of nationalistic, protectionist, authoritarian and populist attitudes and movements should be seen as a wake-up call for the leaders of the EU institutions and Member States, to the effect that we need to examine what has to be done to regain public confidence and safeguard a successful future for the European project.

1.3.

To this end, the EESC calls on the Commission to strive for a strong, solid and cohesive Union that is able to generate sustainable growth, quality jobs, well-being and equal opportunities for all the people of Europe, based on a shared vision and positive narrative rooted in public involvement and participation. A united, cohesive Union, built on Member States’ commitment to the cause, is sorely needed so as to respond to the economic, social and environmental challenges the EU is facing. Internal cohesion is also a prerequisite for the EU to act as a strong global player in areas such as international trade, security, energy, climate policy, and the promotion of human rights.

1.4.

The EESC recognises that the Brexit negotiations will make 2018 a challenging year. However, it is important that the Commission continue to implement measures already agreed upon, especially those relating to single market initiatives. At the same time, it is necessary to prepare for the long term future of the EU. The EESC would refer here to its views on the White Paper on the Future of Europe. The EESC will also submit opinions on the associated reflection documents; for this reason, these topics are only referred to briefly in this contribution.

1.5.

As there is a strong link between the economy, employment, people’s welfare and the environment, the EESC calls on the Commission to adopt sustainable development as an overarching approach to its work programme. The EESC thus frames its contribution in terms of the three ‘pillars’ of sustainability, as follows:

1.6.

The EESC emphasises that the pillars are universal, indivisible and interdependent. The EU should be ambitious and strive for policies and initiatives that bring about win-win-win solutions in terms of economic, social and environmental benefits.

1.7.

To this end, the EESC urges the Commission to develop its policies in an integrated manner and apply a coherent, consistent approach, involving all parts of the Commission and breaking down the silos in policy- and law-making. The EESC also calls on the Commission to continue — in accordance with the better regulation principles — to improve the quality of EU law-making and the simplification and clarification of legislation, with the aim of creating practical benefits for all players.

1.8.

Furthermore, the EESC reiterates its call for an overarching strategy to be devised to mainstream the Sustainable Development Goals (SDGs) of the United Nations 2030 Agenda into all relevant EU policies and it invites the Commission to prepare a long-term vision and strategy on sustainability, building on the upcoming EESC opinion on ‘The transition towards a more sustainable European future — a strategy for 2050’.

1.9.

The EESC underlines the crucial importance of civil society’s structured participation in designing, implementing and monitoring EU policies, programmes and other initiatives in order to achieve tangible results, gain public acceptance and promote cohesion in society. The social partners have a specific role to play in devising and implementing policies directly or indirectly affecting employment and labour markets.

1.10.

While the proposals for action are presented in more detail in sections 2.-5., the EESC summarises its key policy priorities for the Commission’s 2018 work programme as follows:

2.1.1.

The European Semester process should reinforce the Commission’s coordination role in order to ensure Member States’ compliance with the targets and recommendations of the Europe 2020 strategy and implementation of the structural reforms needed for long-term sustainable economic growth, quality job creation and social progress. Closer involvement of the social partners and other representative organisations of civil society and increased ownership for them in the formulation and implementation of reform programmes is a key factor for success in this process, recognising that the social partners have a specific role to play, in view of their exclusive competences, responsibilities and tasks.

2.1.2.

The EESC calls for symmetrical macroeconomic adjustment in the euro area, shared by both Member States with deficits and those with surpluses. This includes an aggregate positive fiscal stance for the euro area as a whole.

2.1.3.

Economic and Monetary Union is a core element of the European integration. The EESC would refer to its previous positions and calls for initiatives for completing the EMU, including the development of its governance, democratic control and macroeconomic dialogue.

2.2.1.

With the next Multiannual Financial Framework (MFF), the Commission should pave the way for focusing resources efficiently and responding to future challenges caused by Brexit and the need for sustainable growth, competitiveness, innovation, employment and social cohesion, by deploying a performance- and result-oriented approach. The EESC calls on the Commission to align the duration of the next MFF with the political cycle of the Commission and the Parliament. It also calls for preparations to be made for the introduction of new types of EU own resources.

2.2.2.

The EESC welcomes the second phase of the EFSI (European Fund for Strategic Investments) for boosting investment by involving ever more private capital, together with public capital from both national and regional sources. To this end, the scope of the EFSI should also cover other branches of finance in addition to banks.

2.2.3.

The EESC emphasises the need for effective and efficient use of European funds. Investment in innovation, entrepreneurship, skills development, active labour market policies, and digital, energy and transport systems needs to be prioritised, ensuring that funding will be adequately allocated for projects with a high social impact.

2.2.4.

The EESC stresses that further implementation of the Capital Markets Union is needed to improve access to private finance, with special emphasis on the needs of SMEs. Greater use of equity and capital market funding should also be promoted.

2.2.5.

As for completion of the Banking Union, the EESC emphasises that further risk-sharing has to be accompanied by further proposals on risk reduction. In upcoming reforms of the banking regulation, the Commission should pay due attention to the specific features and possibilities of small and non-complex banks.

2.2.6.

The EESC calls for steps to curb tax fraud, tax evasion and aggressive tax planning. The existing bias in tax systems that favours debt financing of business should be changed. As regards VAT, the EESC reiterates its recommendation to move away from the current transitional system towards a definitive VAT regime tailored to a European single market.

2.3.1.

The EESC highlights the importance of the digital single market for the whole of society. Digital skills, an enabling business environment and consumer confidence are among the most critical conditions for making use of the potential of digitalisation. As data is a production factor and a raw material for creating added economic value, the accessibility and free flow of data are of extreme importance. At the same time, adequate protection of private and commercial data needs to be ensured, with special attention paid to data generated by individual businesses. The EESC also urges the Commission to continue its efforts to increase cybersecurity capabilities and cooperation. Furthermore, the EESC calls for international cooperation in the digital field, for example within the framework of the OECD.

2.3.2.

Development of the digital infrastructure has to be continued, including broadband and wireless connections, digital energy and transport systems, and ‘smart’ buildings and communities. The use of digitalisation needs to be promoted correspondingly in the education, health and social sectors. Full use of digitalisation should also be promoted to make administrative processes smoother. Special emphasis should be placed on providing cover for remote areas and minimum digital access for everyone, also enhancing the inclusion of vulnerable groups of society.

2.3.3.

The EESC has been a firm supporter of the Energy Union initiative from the outset. It calls on the Commission to pursue implementation of the Energy Union strategy, ensuring there is an adequate energy infrastructure and smoothly functioning energy markets ensuring the availability of secure, affordable and climate-friendly energy for the general public and businesses. The EESC highlights the significance of the energy dialogue at EU, national and local levels, with the full involvement of civil society. It will issue its views regularly on the state of the Energy Union and individual initiatives.

2.3.4.

Transport is closely linked to the Energy Union. As transport is one of the basic enablers of activities for the whole of society, it deserves a high profile in the Commission’s work programme. The main purpose of the measures should be to provide people and businesses with accessible, smooth, safe, affordable, and climate-friendly mobility and transport. This requires substantial public and private investment in transport systems and the development of public transport. Transport-related energy and climate issues, and the introduction of new technologies should not be developed in isolation from transport market issues.

2.3.5.

Taking into account the horizontal importance of services of general economic interest (SGEIs), the EESC invites the Commission to improve the rules on public compensation for the provision of SGEIs and their application, in order to provide guidelines and create a compendium of best practices.

2.3.6.

The EESC acknowledges the role of both cities and rural areas in economic, social and territorial development and cohesion. In underlining the role of cities, the EU should continue to work on a well-defined, properly implemented Urban Agenda. The considerable potential of rural, mountain and island areas should be utilised in the Commission’s new approach to integrated territorial development.

2.4.1.

The EESC calls on the Commission to adopt a comprehensive approach and strategy to industrial development. Special attention should be paid to the opportunities and challenges brought about by global megatrends such as rapid progress in digitalisation and the internet of Things, interlocking of manufacturing and service industries, and the transition towards a low-carbon and circular economy.

2.4.2.

The growth potential of services, including the retail sector, has to be unleashed as well, while safeguarding consumers’ and workers’ rights and acknowledging that there are still barriers in the Single Market.

2.4.3.

Innovation policy, including social innovation, is crucial for economic competitiveness and renewal and for achieving societal benefits. The EESC calls for the promotion of supranational networks and cross-cutting networks between universities, businesses and civil society organisations within the context of Horizon 2020. The EESC also recommends simplifying administrative rules on funding and state aid.

2.4.4.

An EU-wide Industry 4.0 and Society 4.0 strategy is needed, focusing on technologies and platforms, standards and reference architectures, networks of regional Innovation Hubs and skills at all levels.

2.4.5.

As for the challenges raised by global megatrends in individual branches such as the automotive, steel and coal industries, the EESC calls for proper management of structural change, through fair and appropriate transition frameworks and dialogue on sector-specific issues with social partners. On the other hand, opportunities emerging in areas such as the space and defence industries have to be grasped and turned to good advantage, while ensuring favourable conditions for the development of industrial sectors in general, with good working conditions.

2.4.6.

Special efforts should be focused on enhancing the financing, innovation and internationalisation of small and medium-sized enterprises and the Small Business Act for Europe has to be fully implemented. SME policies should be tailored to the different needs of various forms of enterprises such as family businesses, traditional small and micro enterprises, start-ups and scale-ups, including social economy enterprises. The EESC also invites the Commission to launch consultation on the definition of an SME.

2.4.7.

The EESC finds it important that a comprehensive view be taken on new trends in production and consumption patterns, such as collaborative, circular, sharing and functional economic models, as well as development opportunities such as the social economy. Measures are needed to facilitate the introduction of these new and diverse models, but at the same time, a level playing field and compliance with relevant and appropriate legislation has to be guaranteed in order to ensure public and consumer protection, and workers’ rights.

2.4.8.

Taking into account the specific role played by the social economy, the EESC reiterates its request to launch a comprehensive Action Plan for the Social Economy in line with the December 2015 Council Conclusions on ‘The promotion of the social economy as a key driver of economic and social development in Europe’.

2.4.9.

Multi-functionality, the diversity of farming models and sustainability should be maintained at the heart of the matter when addressing the funding, modernisation and simplification needs of the Common Agricultural Policy (CAP) as part of the next MFF. Greater efforts are also required in research and digitalisation in the agricultural sector.

2.4.10.

The EESC calls on the Commission to shift to a more integrated agricultural and food policy, also taking into account the need to move towards a circular economy and to drastically reduce food waste. The Commission should also adopt legislation to eliminate unfair trading practices in the food supply chain.

2.4.11.

In order to enable the proper development and renewal of industries and agriculture, the political and regulatory framework must provide a stable and predictable investment and operation environment and follow the principles of better regulation, for the well-being of citizens.

2.5.1.

The EESC calls for active and fair trade negotiations with partners such as Japan, Mercosur and ASEAN, as well as the smooth implementation of agreements already concluded, taking into account the issues raised in previous EESC opinions. In implementing the Commission communication on ‘Trade for all’, the EESC considers it important to conclude negotiations in a balanced and transparent way, delivering benefits for business and citizens, while protecting environmental, social, labour, consumer and other standards, as well as public services. All in all, the EESC underlines the significance of transparency and the involvement of civil society in the negotiation, implementation and monitoring of trade agreements from the very beginning.

2.5.2.

The EESC welcomes the improvements made to investor dispute settlement with the introduction of a new system to replace ISDS, but calls on the Commission to take further steps so that the ICS can truly function as an independent international judicial body.

2.5.3.

The pursuit of bilateral trade negotiations should not weaken the EU’s commitment to the WTO and a strong multilateral global agreement. The EESC expects an active follow-up to the 2017 WTO Ministerial Conference in areas such as agriculture and e-commerce. In addition, there is an urgent need to assess risks and opportunities, from a civil society perspective, in order to determine the way forward in the ongoing multilateral negotiations on the Trade in Services Agreement (TiSA) and Environmental Goods Agreement (EGA). The EESC also calls for rapid adoption and implementation of the reforms of the EU Trade Defence policy.

2.5.4.

The EESC deems it important to ensure consistency between trade policy and the United Nations Sustainable Development Goals, the Paris Agreement on Climate Change and the EU’s development policy. To this end, ambitious trade and sustainable development chapters with strong civil society monitoring mechanisms should be sought, for inclusion in the trade agreements.

2.5.5.

The EESC furthermore calls for civil society monitoring of all aspects of the agreements, including those whose provisions do not specifically contain a joint monitoring body involving civil society. The EESC’s expertise confers unique benefits on such work.

2.5.6.

It also calls for there to be discussions with civil society on the impact assessment and practical implementation of the proposed Multilateral Investment Court.

3.1.1.

The EESC takes note of the Commission’s Communication on a European Pillar of Social Rights and the proposal for a Proclamation of the EPSR, and the accompanying legislative and non-legislative initiatives. The EESC is working on this package and will give its opinions in due course.

3.1.2.

So far, the EESC refers to its earlier opinion on the European Pillar of Social Rights (1), in which it pointed out its general objectives for the development of the Pillar through a combination of legal and non-legal instruments related to areas such as the future of work, fair working conditions, employment, enforcement of the existing EU social acquis, and social investment. It stated that the Pillar should apply to all Member States, while acknowledging that the Euro area may need particular instruments/mechanisms. It took the view that the European Semester and National Reform Programmes should become the principle vehicles for the implementation and monitoring of the Pillar, and called for concrete benchmarks in the European Semester.

3.1.3.

The framework conditions in labour markets need to support new and more diverse career paths. Different forms of sourcing labour and different forms of working are needed in working life. This requires providing a suitable employment protection legislation environment to provide a framework for fair working conditions and to stimulate recruitment under all employment contracts.

3.1.4.

In order to respond to the changing demand for skills and competences, the EESC emphasises the need for improving the work-based education system, vocational education and training, lifelong learning, as well as upskilling and reskilling. Ways to enhance smooth transitions between jobs and from unemployment and education to work should be developed as well, with the aim of achieving an inclusive labour market.

3.1.5.

Acknowledging the fact that the future of the EU is strongly linked to younger generations’ trust in the EU project, the EESC underlines that the Commission should strengthen its activities to effectively address the root causes of youth unemployment and exclusion.

3.1.6.

In order to enhance inclusive growth and social cohesion, the EESC calls for measures to meet the need for social investment, in the sense of investing in people and in social infrastructure and services. Further consideration needs to be given to how to link the ‘Juncker Plan 2’ with the Social Investment Package objectives, including through the EFSI. Moreover, the EESC has called for a European Social Investment Pact, which should support social reforms and social investment and help to bring about renewed economic, social and territorial convergence. The Annul Growth Survey should also emphasise social investment.

3.1.7.

The European Social Fund should continue to be a key component of the ESI Funds, with specific attention paid to promoting the training and labour integration of vulnerable groups in the population (e.g. young people, immigrants and refugees, and people with disabilities). The consolidation and redeployment of the new Erasmus processes must be made more systematic and inclusive. The EESC also reiterates its call for opportunities for all young people to benefit from European exchanges.

3.1.8.

Whilst acknowledging that poverty reduction is primarily the competence of the Member States, the EESC points out that: poverty reduction should be systematically addressed through the European Semester process; academic research on ‘reference budgets’ enabling a life in dignity should continue to be supported; and there should be comparable and common indicators e.g. on poverty and inequality, as well as mandatory social impact assessments of all reform agendas proposed by the National Reform Programmes and the Country Specific Recommendations. The EESC has also advocated the creation of an integrated European Fund to combat poverty and social exclusion, based on experiences with the implementation of the FEAD and the ESF. In addition, the Europe 2020 Strategy should be linked with implementation of the 2030 Agenda.

3.2.1.

The EESC calls on the Commission to closely monitor compliance with the EU’s fundamental values and principles in all Member States, and to strengthen the procedures to protect and defend democracy, the rule of law, fundamental rights, human rights and access to justice.

3.2.2.

Consumer policy is close to the interests of the public and can therefore influence people’s commitment to the EU’s integration process. The EESC calls on the Commission to ensure that consumer rights are enforced and respected in the REFIT process, in the digital world and in the safety of products and services. The Commission should strengthen measures to eliminate energy poverty and consumption poverty and to enhance access to food and services for all Europeans. The Commission should also promote consumers’ rights to information, education and participation and their right to organise themselves so that their interests are represented when the rules in which they have a stake are being devised.

3.2.3.

The Commission must complete its review of the main legal and non-legal instruments of EU consumer policy as a cross-cutting, horizontal citizenship policy and must present a new action plan to protect and defend consumers over the next 10 years.

3.2.4.

The EESC calls on the Commission to take all appropriate measures to counter gender discrimination in the labour market, education and decision-making, as well as gender-based violence. The EESC also calls on the Commission to establish an agenda to protect minorities and vulnerable groups, promoting the full respect of fundamental rights and non-discrimination. The Commission should intensify efforts to unblock the Directive on implementing the principles of equal treatment, and address the conditions of children, women and the elderly in vulnerable situations as well as new forms of vulnerability.

3.2.5.

The Commission should upgrade the European Disability Strategy in line with the recommendations of the UN Committee on the Rights of Persons with Disabilities and implement the UNCRPD in its external policies and programmes, including the launch of an EU disability card recognised in all Member States. Preparations for a European Disability Rights Agenda 2020-2030 should also be starting, and the year 2021 should be declared the European Year of Disability Rights.

3.2.6.

Accessibility for all should be mainstreamed into Digital Single market initiatives. To this end, the Commission should step up its efforts to conclude negotiations with the other institutions on the European Accessibility Act. Passengers’ rights should also be strengthened, with special attention paid to people with disabilities and with reduced mobility.

3.2.7.

The EESC also encourages the Commission to support activities in educational institutions at all levels to help students to distinguish between fake news and science-based facts.

3.3.1.

The EESC underlines the need for assisting and integrating refugees and asylum seekers. It advocates an efficient reform of the Common European Asylum System that is respectful of human rights and the establishment of a genuinely common system for all Member States. It also recommends that progress be made with resettlement and humanitarian visas for refugees in order to meet real needs. It calls on the Commission to monitor implementation of the agreement on the distribution of refugees among Member States.

3.3.2.

Furthermore, it calls for the review of partnership agreements with third countries of transit and origin of migration flows to respect human rights and international law, and to develop financial instruments to address the root causes of migration.

3.3.3.

While appreciating the Commission’s work on the legal channels of migration through the evaluation of existing directives, the EESC calls for longer-term governance of labour migration, planning for updated legal mobility channels, and the exchange of information on labour market opportunities. Taking into account Europe’s demographic structure, the EESC highlights the need to transform the challenge of integrating refugees and migrants into the labour market into an opportunity. Investment in training and adequate support systems will be key factor to facilitating integration into the labour market to help migrants fulfil their potential, thus utilising their skills, entrepreneurial spirit and dynamism, while recognising the value of diversity and different cultures in our society in general.

3.3.4.

The EESC considers that 2018 — as the European Year of Cultural Heritage — presents a unique opportunity for mobilising all players to counter populism and nationalism and to promote a positive narrative for the future of Europe. In this context, awareness-raising about the need for intercultural understanding with regard to refugees and migrants could also be enhanced.

3.4.1.

The EESC calls on the Commission to continue implementing measures, including the effective control of external borders, to protect Europeans against security threats such as terrorism, organised crime and cybercrime.

3.4.2.

In addition, it considers it necessary to strengthen cooperation on defence. To this end, the EESC endorses the creation of a European Defence Union and welcomes the European Defence Action Plan.

3.4.3.

Taking into account the challenges raised by the unpredictability of US policy and the risk of increased protectionism and unilateralism, the EESC encourages the EU to continue work in line with its Global Strategy, supporting multilateralism in the framework of the United Nations and working actively towards preventing conflict and solving international crises. The EESC also underlines the need for closer coordination of objectives, policies and resources among Member States in order for the EU to be a more effective player on the world stage.

3.4.4.

The implementation of Agenda 2030 should form the basis of EU development cooperation. To show leadership, the EU should present a voluntary review of its internal and external activities on SDGs at the UN High Level Political Forum.

3.4.5.

The EESC supports the establishment of a platform for dialogue with social partners in the context of the European Neighbourhood Policy in order to better assess the labour market, and calls on EU Member States to develop a common European approach to the coordination of social security systems between the EU and southern neighbouring countries. The neighbourhood policy must make clear the link between instability and poverty, and inequality and the lack of opportunities, which can increase vulnerability to radicalisation and hamper the process of democratisation.

3.4.6.

The EESC highlights the significance of external economic relations and international diplomacy for safeguarding and increasing stability and security. It also encourages the EU to make full use of the role that culture can play in international relations.

4.1.

The Action Plan on the Circular Economy should be carried out in an integrated, consistent way, making use of the opportunities for reconciling economic, social and environmental aspects. The EESC calls on the Commission to encourage market-driven activities by promoting innovation, facilitating front-runner initiatives, including in remote and urban areas, enhancing their scale-up, and providing an enabling regulatory framework. It also points out the links between the circular economy and other ‘new economic models’.

4.2.

Due attention should also be paid to the implementation of ‘traditional’ environmental policy and legislation, covering waste management and air, water, soil and biodiversity protection. The EESC urges the Commission to continue this work as part of the European Environmental Review process.

4.3.

Climate targets for 2030 should be implemented in as cost-efficient a manner as possible. To this end, the EESC calls on the Commission to carry out a comprehensive assessment of the current low-carbon policy instruments, and make sure that the tools are appropriate and used in the most efficient way.

4.4.

The Commission should also consider climate issues from the point of view of climate justice, i.e. from the perspective of issues such as equality, human rights and poverty.

4.5.

Climate diplomacy remains an important mission for the EU in the fight against climate change. It is necessary to get all the biggest emitters to commit to targets which are at least as ambitious as those of the EU. The EESC also encourages the Commission to strive for global carbon pricing in order to create a level playing field in relation to competitors outside the EU.

4.6.

The EESC calls on the Commission to prepare a strategy on increasing its climate and environmental ‘handprint’, i.e. its positive global impact. This requires an environment conducive to innovation and investment and favourable trading conditions for exporting climate solutions and low-carbon products. This is how the EU can make an efficient contribution to climate change and environmental challenges and have a much greater impact than solely operating within its own borders.

5.1.

The EESC underlines the pivotal role of civil society organisations in the design, implementation and monitoring of policies at all stages and at all levels, including the local level. This requires a change in culture and an acknowledgement of the value of civil society at EU and Member State levels, which is already enshrined in Art. 11 TEU, which provides for EU institutions to promote and facilitate horizontal and vertical civil dialogue, to carry out broad consultations and lay down the foundations for the European citizens’ initiatives. These are complementary processes that take place without prejudice to consultation of the EESC and social dialogue.

5.2.

The EESC follows closely and is actively involved in structured dialogues or consultative fora (e.g. Circular Economy Stakeholder Platform, European Migration Forum) gathering and involving civil society organisations and other players from EU institutions and Member States and calls for support for its initiatives for the creation of a Platform for Change (gender equality in the transport sector) and an Institutional Forum on citizens’ participation (in the framework of the citizens’ initiative). When constituting such platforms like REFIT, the Commission should consider the EESC’s representation, in accordance with the mandate given to the Committee by the treaties, and in so doing ensure that this reflects the Committee’s composition in the form of its three groups.

5.3.

As a complementary process to the above initiatives, the Commission recently set up a dedicated internet portal entitled ‘Contribute to law-making’ to gather the opinions of the general public, thus including both organisations and individuals. The EESC recommends that the Commission make a distinction between contributions from civil society organisations and those coming from individuals. To this end, the Commission should carry out stakeholder mapping in cooperation with the EESC to identify representative and geographically balanced target groups, drawing on the Transparency Register. In addition, the Commission should ensure that the responses have quantitative and qualitative weighting. Furthermore, the Commission should constantly work on the improvement of transparency, accessibility, feedback and accountability to participants.

5.4.

The EESC calls on the Commission to develop a more strategic approach to these practices, putting them on a more structured institutional and representative foundation by taking advantage of the resources of representative consultative bodies that already exist at European, national and regional levels. To this end, the Commission should work closely with the EESC and ask for an exploratory opinion on how civil dialogue could be organised effectively and on a permanent basis, leading to a specific Commission communication.

5.5.

The EESC underlines that there is a need to improve the effectiveness of the European Citizens’ Initiative, in line with the announcement of the revision of the ECI regulation made by EC First Vice-President Timmermans, and to explore new ways, such as the use of digital tools, to increase the engagement of young people and people from vulnerable groups in particular.

5.6.

Finally, the EESC acknowledges that the Commission has taken into account many elements of the EESC’s contribution to the 2017 work programme. However, there are also issues that have not been included and they have therefore been reiterated in this document. As regards implementation of the Commission’s 2018 work programme, the EESC is ready to submit its views and participate in work on specific initiatives in the course of the coming year.

13.10.2017   

EN

Official Journal of the European Union

C 345/11

1.

European society and citizens ask for a credible, legitimate, and resilient EU. For more than a decade the EU has been challenged by political, economic, and social shocks, fostering a gloomy attitude and uncertainty among citizens. The EU needs overall strategies to promote the well-being of its citizens, robust and sustainable investments, creativity and entrepreneurship, and strategies to address the widening gap between rich and poor, poverty and wealth inequality. The current economic recovery should by no means be an excuse to remain passive. By contrast, the EESC urges that a considered and cohesive way forward be found in order to strengthen confidence and trust, as well as a focus on tangible results for citizens and on Europe’s huge potential.

2.

False expectations must be avoided. Above all, the aim should be an EU that is able to deliver in providing fully-fledged equal opportunities for all. Economic, social and environmental factors are interrelated. It is essential to enable the continent to adjust to the deep transformation process and fierce competition across the globe, and to effectively shape globalisation according to the EU’s values.

3.

The ‘blame Brussels’ game, which too many have played and still play, must stop. A common commitment on the part of the European institutions and of a wide range of stakeholders including social partners and civil society organisations, both nationally and at EU level, is indispensable. The EESC underlines that the legitimacy of EU decisions depends ultimately on the quality of the democratic process.

4.

The path ahead can only be pursued successfully if it is inspired by that same common sense of purpose that expressed the conviction of the founding fathers, and was later reflected in any major step forward. The EU should mobilise the legislative tools, guidance, funding and cooperation at its disposal to allow the EU to advance in all desired dimensions. The Treaty of Lisbon points the way.

5.

The EESC does not believe that a choice between scenarios (2) is a successful method for promoting a common sense of purpose or for defining the future path. Firstly, the EU is not starting from scratch. Thus the Commission should base its proposals on an in-depth analysis of the history of the EU — its achievements and shortcomings — as a valuable source for the future. The commitments of the Member States in the Rome Declaration are a positive and healthy starting point (3). The five scenarios are addressed to the Member States, focusing on institutional changes, and thus lack direct relevance for European citizens. They also appear artificial.

6.

For the EESC, scenario 1 or, as it sees it, muddling through, is not an option. Scenario 5 looks attractive to a number of people, but at present it is unrealistic. Scenario 2, with an exclusive focus on the common market, is far too limited. Scenario 4 requires an agreement between 27 Member States, which might lead to paralysis of the EU and promote centrifugal trends, endangering the Union’s goals and values. Under Scenario 3, mechanisms for differentiated integration, such as enhanced cooperation, could be a useful instrument to overcome blockages in particular areas and to foster a positive dynamic in the EU integration process. However, they are instruments for achieving policy objectives rather than a goal in itself. While they should be recommended as a way of overcoming paralysis or obstacles to desirable EU legislation, the EESC underlines equally the need to promote convergence within the Union and to fight fragmentation and division. Therefore an agreement between frontrunners or catalyst countries should always be open to the willing, while a common sense of purpose should prevail.

7.

Strategic themes should be put in a common perspective to avoid a looming Europe à la carte or centrifugal trends. The EESC recommends a development whereby conditions are established for sharing political power across the board in a better way. All this depends primarily on political will and as such it should be a core issue in a genuine debate about the future.

8.

The traditional distinction between the national and European level should disappear. Common challenges and interwoven realities across the continent underline the need for a common mission. They also require an acknowledgment of European citizenship alongside national citizenship. Policy-making must include and involve all levels of society. Objectives should be shared and the impact of decisions and policies should also be systematically evaluated at national, regional and local level to gain the support of citizens.

9.

The European Parliament (EP) must play a central role in shaping Europe’s future direction. In addition, there is fundamental need to promote the engagement of national parliaments, as well as their interaction with the EP.

10.

The central objectives must be accompanied by an agreement among the Member States on:

11.

Whatever option for the future of Europe is selected, the EESC wants a cohesive and coherent European Union. Many current policies are part of deepening integration, a long-term process that the EESC fully supports. On nearly all of them the EESC has quite recently made detailed comments and proposals for the future.

12.

The single market in all its economic and social dimensions and in the framework of a sustainable development model is the indispensable cement of European integration. It should ensure a genuine level playing-field. In the same vein, EMU was seen as a decisive step forward. However, despite impressive progress its architecture remains fragile. EMU is at the core of future developments in the EU; deepening it is therefore crucial. The EESC favours a gradual pathway to a political union with a range of macroeconomic and microeconomic measures and provisions, as well as a strong social dimension. Completion of EMU calls for genuine economic governance, including EU management of the financial sector, well-ordered reforms in the Member States concerned, and shared approaches to labour market policies. Improved governance must reinforce the foundation for more convergence, as well as solidarity, across the euro area. The highly competent public services in the EU can be supportive. The euro area should start closer cooperation in other fields.

13.

The EESC also stresses the need for more cohesive governance, deeper integration and full commitment of Member States in the following areas:

14.

In the EESC’s view, social matters and education must likewise be addressed more systematically at EU level to find convincing solutions. Social security and education are mostly subject to the principle of subsidiarity, and therefore fall within the scope of national legislation and decision-making processes, often including the active participation of social partners. Shared competences between the EU and Member States must be better applied in social affairs. Given increased labour market tensions owing to the digital revolution, structural weaknesses in labour markets, and globalisation, the EESC calls for visible European engagement with a view to pushing for more convergence on certain social and labour conditions, while helping to promote quality job creation, fair mobility and positive commitment from citizens. A particular focus on youth and youth unemployment is needed. The role of the social partners, civil society at large, and social dialogue are paramount.

15.

More economic and social convergence in the EU is required. Yet the discrepancies between national economies, culture and traditions of social systems need to be taken into account. The EESC underlines that the EU should not be an onlooker but should take a well-defined responsibility. Proper discussions between the social partners (and other stakeholders) are needed first before a common way forward can be defined. Moreover, the EESC points to the importance of the EU social directives being effectively implemented by the Member States.

16.

Education is also subject to subsidiarity. However, it is undeniable that the social and economic future of Europe and the engagement of citizens are closely related to up-to-date education and training systems at all levels. The future of the younger generation depends strongly on education. Skills are key for young people as well as older generations. The EU must therefore take an active part in the modernisation process that is under way. Education also plays an important role in communicating Europe: the EESC underlines the need for adequate information and education about the EU — including on European values and citizenship — in primary and secondary schools.

17.

Free movement of persons in the Schengen area must be re-established. This means by definition that common borders must be more effectively controlled. In parallel, the deplorable rise in international terrorism, involving murder but also cybercrime, is a serious cause for public uncertainty and must be combated. Cooperation between police forces and judicial authorities is needed more than ever.

18.

These areas are directly related to foreign policy and to the acute problem of failing states and civil wars in Europe’s neighbourhood, as well as to the ensuing migration flows that are currently overshadowing all other European issues. The EESC is very much in favour of a joint migration policy that affords refugees protection under international law, a Common Asylum System, action to combat illegal migration and human trafficking, and the promotion of legal paths into the EU. In the same context, the EU must establish proper partnerships with neighbouring countries, and in particular it must relaunch a real Euro-Mediterranean policy.

19.

Europe faces the challenge of looking after its own affairs more than it ever has since 1945. Relations within NATO and with the United States, and the effective common European management of problems arising in the European Union’s neighbourhood, all urgently require deepening of the EU’s Common Foreign and Security Policy, on which successful internal and external security will necessarily depend.

13.10.2017   

EN

Official Journal of the European Union

C 345/15

Rapporteur:

Milena ANGELOVA

1.1.

The EESC praises the fact that SMEs are declared to be at the heart of economic policies in the EU. It appreciates that over the last decade, a great deal of legislation has been adopted and much funding has been allocated to supporting them. However, the EESC shares the opinion frequently expressed by the SME community that significant inefficiencies in both the formulation and implementation of SME policies still exist, which substantially hampers the effect of the support measures.

1.2.

The EESC’s recent studies (1) have revealed that EU SME policies and current support mechanisms treat the large number of SMEs in Europe as a homogeneous group and regrettably do not distinguish between the different needs of the numerous sub-groups of enterprises falling under the definition of SMEs. Examples of tailored support mechanisms are rather rare. Using a ‘one size fits all’ approach to develop EU SME policies is a crucial problem that prevents policies from fully achieving their desired effect on SMEs (2). Therefore, better marketing of SME policies, together with more precise targeting of SMEs’ specific needs, is strongly recommended, alongside the forthcoming public consultation on the relevance of the definition of SMEs.

1.3.

The EESC warns that a bureaucratic approach and the complexity of administrative rules are still prevalent in EU SME policies and the current support mechanisms, despite the constant efforts at EU level to minimise the administrative burden. EU SMEs often feel that the responsible officials have no idea of how their businesses actually function. The majority of EU support mechanisms seem unsuited to respond to SMEs’ pressing needs for fast, clear and effective solutions.

1.4.

The EESC is concerned by the fact that the majority of SMEs — mostly the small and micro companies — are not aware of the existence of these support tools and networks, due to a communication gap. This can be addressed by greater efforts to raise awareness, further support to enable more SMEs to access the right information, stronger engagement of the official bodies with key local intermediaries at national and regional level that specialise in working with SMEs (employers and SME associations, chambers of commerce), and providing more user-friendly and tailored to businesses’ needs support. Most of the tools on offer are too complex, unclear and bureaucratic in design and content to meet the needs of SMEs. To tackle this, the EESC urges the European Commission (EC) and Member States (MS) to make the best use of the European Semester, to apply systematically and everywhere the partnership principle (3) and to involve compulsorily SME representative organisations at European, national and regional level in the design, implementation and monitoring of SME policies and support measures. Country-specific recommendations should consistently focus on support policies for SMEs, to ensure relevant formulation, effective implementation, and qualitative and quantitative measures of results.

1.5.

The EESC regrets that monitoring of the progress of EU SME policies remains fragmented. While SMEs’ business activities are comprehensively recorded, the impact of EU support measures on these activities, and the extent to which changes in SMEs’ development can be attributed to these measures, are not recorded. The available information is mostly quantitative and does not provide qualitative insights; therefore, it does not provide a basis for a proper assessment of the effectiveness and efficiency of the policies and supporting tools (4).

1.6.

In line with its previous opinions, the EESC expresses its concern that the implementation of the Small Business Act for Europe is far from complete (5). Achievements in the different areas are uneven, with worse results in entrepreneurship, the single market and access to finance. Skills and innovation and state and public procurement have actually deteriorated since 2008 (6). Clearly, MS should be encouraged to take relevant measures and to adopt SBA in the designing and the implementation of policies and legislation having an impact on SMEs.

1.7.

1.7.1.

The EU’s SME policies should acknowledge the heterogeneity and diversity of European SMEs. They should explore the specific needs of microenterprises, family and ‘traditional’ businesses, social enterprises, liberal professions, self-employed people and all other specific sub-groups that have quite different legal forms and models of operation, in order to be able to provide an adequate portfolio of policy measures to promote their growth.

1.7.2.

The EESC proposes that the EC assess whether the current definition of SMEs corresponds to their heterogeneity, sectoral dynamics, specific features and diversity during the last decade (7). The EESC calls for a visible, coordinated and consistent horizontal policy for SMEs, based on a multiannual action plan.

1.7.3.

EU SME support tools should be translated to the language of business so as to be fit for their purpose of promoting growth and employment. To cope with the over-complexity of support mechanisms that has been identified, it is important to seek out the help and advice of SME organisations that are most closely attuned to SMEs’ needs, so as to make EU SME policies speak the language of business. In this regard, SMEs currently count on the national social partners as a significant positive factor to convey their views on how to improve the SME promotion policies and call for them to be more actively involved in the NRP. Their role, together with that of SMEs associations, chambers of commerce and industry and other SME intermediary organisations, should therefore be strengthened.

1.7.4.

EU SME policies should dedicate more efforts to informing SMEs — and especially the most vulnerable sub-groups among them, such as mono- and micro-enterprises, traditional companies with low innovative potential, companies from remote regions, etc. (8) — about available support. Key support networks should be maintained and popularised, as well as made more user-friendly and comprehensive for SMEs. The potential for ensuring the coordination of existing support networks in a common one-stop-shop system respecting the situation in each MS should be carefully considered by the EC.

1.7.5.

It is crucial to establish a strong multi-stakeholder partnership — SME platforms — with the social partners and public and private stakeholders engaged with SMEs’ problems, at national and regional level. Strengthening the interaction with SME organisations, which are most closely attuned to SMEs’ needs, especially at national and regional level, is vital to overcoming the communication gap existing between SMEs and EU support mechanisms. It also has the potential to provide a new and effective channel to reach out to SMEs by using local branches of employers’ organisations, chambers of commerce and economy, SME associations and professional/sectoral organisations as key intermediaries in popularising and furnishing existing support tools.

1.7.6.

Best results for SMEs come when local authorities cooperate with SME organisations when formulating and implementing policy. The current tendency for mediation to be organised mainly around banks is not the best option. Banks should be financial intermediaries, but in all other aspects (policy formulation, information, promotion, etc.), representative SME organisations are more suitable. Therefore, the EESC invites the EC to shape measures to support the SME organisations in implementing the SME policies and in disseminating relevant information to SMEs, including by providing financial support to them.

1.7.7.

The EESC calls for the Small Business Act, and the two principles it establishes — ‘think small first’ and ‘once only’ — to be made legally binding. However, applying the ‘once only’ principle should not infringe upon host countries verifying the necessary legal and professional requirements for conducting business. The partnership principle should be extended to all legislative procedures that directly or indirectly affect SMEs. In practical terms, annual meetings of SME platforms at EU and MS level are strongly advisable.

2.1.

EU SME support policies (9) are needed because, unlike SMEs in other parts of the world, European SMEs have to comply with regulations at both national and European level — often decided without real consultation with their representative organisations, in contradiction with the ‘think small first’ approach. This substantially increases the effort and costs required to do business, notwithstanding the limited human and technical resources of SMEs.

2.2.

In 2008, the EC launched the ‘think small first’ and ‘once only’ principles as a decisive step towards promoting competitiveness and improving the business climate for 23 million SMEs in Europe (10). The EESC strongly supported this endeavour (11), but warns that if the SBA is not legally binding and all levels of governance — EU, MS and regions — are not obliged to apply it, the SBA will remain a merely political declaration.

2.3.

SBA implementation was evaluated and updated in 2011 (12), but the conclusions on its real impact were rather unenthusiastic and called for more efforts (13). The EESC has repeatedly put forward proposals to improve the effectiveness of policies for SMEs (14). Nowadays, SMEs are affected by all EU policies and therefore they need a truly horizontal, visible, coordinated and consistent policy to be formulated and implemented in an effective and efficient way (15).

2.4.

SME policies do not take the different needs of different categories of SMEs into account. In order to increase the effectiveness of their formulation and implementation, a substantial outreach effort is needed so as to differentiate their addressees more precisely and to target and tailor the solutions on offer to their specific needs. The segmentation criteria could be based not only on size (e.g. in general, the smaller the enterprise is, the harder it is to get access to finance and the more it is in need of advice, coaching and mentoring), but also on location (cities v small towns and remote rural areas), on life-cycle phase (start-up, scale-up), on sector (industry, trade, agriculture, tourism, etc.), etc.

2.5.

Substantial preparatory work for a revised SBA has already been carried out. The REFIT programme has taken on the task of making much-needed improvements to the EU legislative framework and of reducing the administrative barriers. Over the years, the amount of EU legislation in force has grown to 19 875 documents (16). Of these, 1 527 contain provisions related to SMEs, mostly found in the following subject matters: State aid (343), competition (293), internal market (217), research and technological development (133) and budget (117).

2.6.

Recent EESC studies demonstrate that despite the numerous initiatives that have been launched, EU SME policies need major revision so as to diversify support measures, simplify applicable rules and optimise communication and collaboration with SMEs and SME organisations in order to be able to effectively address SMEs’ variety and diverse needs. The role of regions and territories in the implementation of EU policies and legislation, in particular those affecting SMEs, is growing considerably (17).

3.1.

SMEs are being confronted with increasingly serious challenges of various kinds:

3.2.

SMEs are quite a heterogeneous and diverse group. They can be differentiated on the basis of their size, life- cycle stage, location, type of ownership, sector of activity, etc. and their needs for support are quite varied depending on which sub-segment a given SME is in. A special group that requires specific treatment is constituted by the ‘monoentrepreneurs’ (almost 50 % of all SMEs), which are almost excluded from the scope of the support measures. In order to help this most vulnerable group of SMEs to strive and thrive, the issue of bogus self-employment should be properly addressed as well.

3.3.

Against this backdrop, formulating promotion policies based only on the size of the supported companies might be outdated, too broadly targeted and fail to consider the different needs of different groups of SMEs. In its opinions, the EESC has constantly stressed the need for better targeted and more precisely defined SME promotion policies in Europe (18) as well as the need to revisit the definition of SMEs so as to better reflect the variety of SMEs and differences between the MS (19). The EESC invites the EC to launch a consultation on the SME definition. This should encompass an assessment of how the definition is applied in the implementation of SME policy measures for the micro, small and medium-sized companies.

3.4.1.

SME support instruments must be evaluated from the point of view of the actual effect they have on improving the situation for SMEs and if they meet in particular the principles set out in the SBA. The EESC sees a need for a qualitative and in-depth assessment of the effectiveness and efficiency of investing EU funds, as well as a need for greater efforts by the MS to implement the ‘think small first’ and ‘once only’ principle at national and regional level which should be compulsory at all levels (20).

3.4.2.

The ‘think small first’ and SBA principles are not explicitly present in the Juncker plan. They can be seen to a certain extent in the Horizon 2020 and COSME programmes, but should be better implemented in practice. The EESC invites the EU policymakers to consider the SBA principles in all EU legislative texts that might have a direct or indirect impact on SMEs.

3.4.3.

The cost of credit and cost of building and renting have decreased in recent years due to the crisis. This, together with some new targeted instruments, creates good opportunities for start-ups, but companies’ scale-up phase remains widely under-supported. In this regard, the EESC welcomes the EC’s new initiative to address this problem (21).

3.4.4.

Bank loans remain the main source of funding for SMEs, but access to banking finance is still not easy for many SMEs, because of weak banks’ balances, lack of ECB monetary policy transmission in some countries and the relatively high barriers set by requirements for guarantees. Market-based finance through private equity funds, venture capital, issuing bonds and equity instruments on specialised market segments and crowdfunding, is increasingly important, but most SMEs are still unprepared to use these opportunities (22). They need proper guidance on timing, detailed information, and support in order to be able to explore them. According to the EESC survey, an extremely high proportion of SMEs are unaware of opportunities for support through ESIF grant schemes, or of the possibility of acquiring financing via an investment fund supported by EU funds.

3.4.5.

A spot survey shows that the focus and priorities of support instruments do not always match SMEs’ priority needs (23), one of the reasons being the failure to acknowledge the significant differences that still exist between the MS. For example, access to new markets is indicated as the most serious challenge for SMEs primarily by companies from southern Europe, whereas most support for improving access to markets, including international markets, is received by companies from northern Europe. This is clear evidence that the needs of SMEs are notably different at national level, prompting the question of whether pan-European instruments should perhaps be designed in greater detail. This view is also fully endorsed in the Annual Report on European SMEs 2014/2015 (24), according to which the group of countries with the lowest scores are mainly from southern Europe. These countries report extremely low success rates for projects, including in the SME component of Horizon 2020 (25).

3.4.6.

The high expectations placed on the role of ‘SME envoy’ have unfortunately not been justified so far. Few SME representatives are aware of who performs that function in their countries. Most SMEs state that the ‘SME envoy’ performs merely protocol and ceremonial functions rather than playing a role that is linked to real measures to promote SMEs. While the core aim of this network is to be an interface between the European Commission and the national bodies and to effectively promote SMEs’ interests within national bodies and in national legislation, SMEs expect to receive real advice and information about EU policies in cooperation with SMEs organisations.

3.4.7.

Promoting entrepreneurship is connected with establishing appropriate conditions to: increase the share of start-ups and new companies that survive and succeed; help new companies to improve their competitiveness and to grow more quickly and more effectively; and improve insolvency procedures as well as the development and strengthening of business transfers (26). While much has already been achieved in terms of making the registration technology and procedure more straightforward in the EU, there is still more to be done in order to achieve the second and third goals. The ‘second chance’ principle is estimated to perform the worst in all MS, and even the EC does not award contracts to entrepreneurs who have failed.

3.4.8.

Additionally, procedures for liquidation (both in cases of insolvency and voluntary winding-up) as well as for restructuring and inheritance are difficult from a purely procedural perspective in many countries. The EESC stresses the need to simplify and harmonise insolvency law (27).

3.4.9.

The public hearing and recent EESC studies also provided important insights on the key challenges experienced in all main priority areas for EU SMEs:

—

the number of SME-related exemption/simplification initiatives under the REFIT programme is limited,

—

the outdated SME definition remains unaddressed,

—

the SME test is applied partially and unevenly by MS as it is still not obligatory,

—

public consultations on impact assessments and roadmaps are hampered by a bureaucratic institutional approach and the fact that they are not accessible in all EU languages,

—

all SMEs point to corruption and inefficient state administration as serious problems that have a very adverse impact on their business,

—

late payment by public administrations and large clients remains a debilitating trend in some MS, despite the introduction of stricter requirements in the revision of the Late Payment Directive (28).

—

entrepreneurship is still not consistently incorporated in the majority of the MS’ national education systems,

—

teacher training in entrepreneurship is sporadic and mostly carried out with reference to individual projects — few cross-European initiatives exist in this area (29),

—

youth programmes focused on entrepreneurship, although successful, threaten to deviate from their initial goals of promoting entrepreneurship,

—

promotional campaigns such as the European SME Week have little impact on encouraging participants to strongly consider becoming entrepreneurs,

—

start-up costs are still three times higher than the stated benchmark.

—

the single market is not yet complete, which impedes SMEs’ access to markets, including in relation to cross-border provision of services,

—

complicated administrative procedures and high delivery costs for export/import,

—

SME support schemes for internationalisation lack a tailored approach,

—

standards and IPRs are still unattractive to SMEs mainly because their benefits are not well communicated to them, costs are high, and rules are too complicated.

—

the typical financing model is bank loans, followed — distantly — by grants and supported by financial instruments,

—

grants are not market-driven and not tailored to specific SME sub-groups and their policy orientation rarely matches SMEs’ needs,

—

financial instruments are better suited to SMEs’ immediate needs for working capital. Unfortunately, a very low proportion of SMEs are well informed about them, a tailored approach to their application is still rare, their provision is highly dependent on effective collaboration among financing institutions, intermediaries and final recipients, and there is a lack of data and analysis on their real effect; greater complementarities and synergies between existing instruments and players at regional, national and supranational level, including promotion of more efficient financial instruments — e.g. counter-guarantees,

—

in spite of the substantial progress made in providing innovative non-lending financing channels such as private equity, venture capital, etc., they remain relatively underdeveloped in the majority of the MS (30),

—

a significant proportion of SMEs are afraid to apply for financial instruments of European programmes, because ‘to get financing seems to be too complicated’.

—

although Horizon 2020 allocates special funding for SMEs, it cannot solve all SMEs’ problems with access to risk finance for innovation, and there are regrettably few projects from the newest MS,

—

still insufficient interest of SMEs in the programme due to arduous and unfair eligibility and application rules,

—

existing rules may possibly discourage SMEs from participating in viable consortia for the implementation of innovation projects,

—

the cost for SMEs to apply for voluntary tools developed by the EC (31) remains relatively high and thus only a limited number of companies are able to use them.

—

the information provided is still not of the expected quality,

—

structure, content and design are not very user-friendly,

—

the approach to providing information is frequently bureaucratic,

—

language barriers are common as information is largely provided only in English.

3.5.1.

To be consistent, SME promotion policies must take into account the diversity of SMEs by collecting microdata and analyses at the microeconomic level. This is the only way to improve understanding of the different needs of SMEs in line with their particular characteristics.

3.5.2.

At present, Europe’s banking and capital markets remain fragmented. The Capital Markets Union (CMU) project, launched to address this, can be realised only if it is consistent with other policies to support SMEs. Most SMEs’ limited knowledge and understanding of the different financial instruments would restrict the development of the CMU. For this reason, support for SMEs should include putting in place a long-term, sustainable approach to financing, and building understanding of the different instruments, the possibilities for complementarity, and the advantages and risks associated with different instruments.

3.5.3.

Most often, the relations between the owner, management and employees in SMEs are closer than in large companies and social dialogue is therefore a win-win situation, by laying the groundwork for a committed and engaged workforce with high-quality jobs. In order for all the stakeholders to benefit from such a situation and to enhance the accumulation of social capital inside SMEs, systematic support should be provided to SMEs so as to make them aware of the importance of social dialogue, health and safety, work conditions, innovative forms of work organisation, work-based learning, and skills development. In this endeavour, the role of social partners and NGOs is indispensable.

—

avoid gold-plating by providing clearer translation of EU legislation, by putting in place systems to solve litigation and misinterpretation of such texts, and by drafting ‘SME-friendly notes’ and a vade mecum summarising and explaining relevant information for SMEs;

—

make the SME test obligatory for new legislative proposals and guarantee its effective implementation by all MS, and systematically across EC services (32),

—

ensure more effective inclusion in a structured manner of SMEs and their organisations in impact assessments of new legislation via simplification of their format and content as well as availability of information in all EU languages, and assess the impact on the different groups of SMEs,

—

carry out a complete fitness check of EU legislation on EU policies on regular basis,

—

more effectively (making it compulsory) include SMEs’ national and regional organisations as partners in the interinstitutional debate on new legislation relevant to SMEs,

—

ensure effective monitoring of results under the REFIT programme in terms of lessening the burden for SMEs.

—

support the actions of EU, national and regional SME organisations for providing information, training and coaching/mentoring of enterprises,

—

enrich the existing tools to support the strengthening of an entrepreneurial mindset among young people and ensure support programmes stay focused on the development of key entrepreneurial skills,

—

introduce entrepreneurship as part of the curriculum at all levels of education (33),

—

further simplify and reduce the costs of start-up procedures, ease access to finance and motivate more people to develop their entrepreneurial endeavours,

—

provide simple and easy business transfer, liquidation procedures, and second chance options.

—

optimise the functioning of the single market so as to prevent gold-plating, non-application and other MS practices that distort competitiveness without curtailing workers’ and consumers’ rights,

—

increase the visibility of existing internationalisation support networks by means of better collaboration with SME organisations at national and regional level,

—

provide tools to help SMEs take part in exhibitions, conventions and fairs abroad,

—

encourage the creation of regional and national sectoral clusters of SMEs with a certificate of guaranteed quality,

—

reduce further the costs of standards and IPRs for SMEs and promote their benefits for competitiveness.

—

reduce formalities, monitoring and control to the absolute minimum necessary — compulsory implementation of the ‘once only’ principle, use of electronic forms, simplification of the application of ‘de minimis’,

—

design SMEs grant-based programmes on the basis of careful needs assessments, avoid the detrimental practice of implementing projects only for the sake of acquiring non-repayable finance, without any business development strategy,

—

strengthen the collaboration between EIF, financial intermediaries and SME organisations in order to design highly effective financial instruments that respond to SMEs’ needs for working capital, loans and guarantees and provide assessment of the effects produced by means of quantitative indicators,

—

establish a full diversified portfolio of tailored and innovative support measures to effectively reach the heterogeneous group of SMEs (34),

—

provide support for SMEs which are prepared for issuing bonds and equity instruments on specialised market segments,

—

allocate sufficient resources to the COSME Loan Guarantee Facility for it to reach its goals, taking the financial impact of Brexit into consideration,

—

explore ways to strengthen innovative non-lending financing channels such as private equity, venture capital, business angels and crowdfunding, and effective use of the support of guaranteeing institutions.

—

provide tools for improving SMEs’ access to venture capital for the introduction of innovations,

—

support cooperation between SMEs and research and educational institutions and facilitate the exchange of information between them,

—

create favourable conditions for building viable consortia in which SMEs and their market-driven innovative ideas play a central role,

—

support SME competitiveness by coaching/mentoring with a view to: providing capacity building and technical assistance; disseminating best practise; supporting cooperation between SME organisations.

—

promote EU, national and regional SME organisations as the most important ‘centre of gravity’ by putting in place strategies for them to build their capacity and by implementing the principle of multilevel and multifactor governance at EU, national and regional level and apply in the legislative process,

—

consider the option of creating a single portal for all SME support initiatives with a clear and user-friendly design — with rich e-content, limited redirections, understandable language.

—

adapt the vocational training systems to the requirements of the labour markets; create systems for monitoring and forecasting labour markets’ needs,

—

enhance support for MS to facilitate the involvement of SMEs in apprenticeship schemes,

—

support short-term training programmes; encourage cooperation between employers’ associations and educational institutions.

13.10.2017   

EN

Official Journal of the European Union

C 345/25

Rapporteur:

Antonello PEZZINI

Co-rapporteur:

Hannes LEO

1.1.

The European economy is increasingly based on creativity and innovation. Intellectual property rights (IPR) intensive industries in Europe account for 39 % of the EU’s GDP and 26 % of its employment (1). The EESC considers that businesses must enjoy a series of conditions that facilitate innovation, investment and employment.

1.2.

According to estimates from the UN (2) and OECD, counterfeit products represent 5-7 % (UN) or up to 2,5 % (OECD) of world trade. The majority of counterfeit products in Europe are produced outside the EU, but production is also on the rise in Member States. The internet has considerably simplified and massively increased the scope for selling counterfeit products online while the risk of being prosecuted remains very low.

1.3.

The counterfeit industry takes advantage both of differences in the effectiveness of customs controls at key entry points to the single market and of the fragmented and variable nature of the national implementation of EU rules and standards, facilitating the entry into the EU of products that endanger consumers’ health, public safety and security and the competitiveness of businesses.

1.4.

Consequently, a fully-functioning and interoperative Customs Union must ensure the efficient operation of the new system introduced by the customs code, protecting businesses from unfair competition, especially from the global counterfeit and pirated products industry — not only in the interests of business but because it has direct implications for global health, safety and security, as well as economic growth.

1.5.

In the EESC’s view, given that two kinds of counterfeiting must be distinguished — ‘counterfeiting’ as infringement of IPR, i.e. pure unfair competition with no threat to safety and public health, and ‘counterfeiting crime’ as a criminal act, as defined by the Medicrime Convention (3) — stamping out counterfeiting and piracy should be a key EU priority not only with a view to ensuring the healthy growth of free world trade without protectionism, but also in view of the professionalisation of organised crime in the trade in counterfeit and pirated products and the risks posed to consumers. This could involve appropriate criminal proceedings to discourage such ‘counterfeiting crime’ activities.

1.6.

In order to reduce the negative impact of the growing volume of counterfeited and pirated goods on the market, measures must be taken at sectorial, national, European and multilateral level to counter:

1.7.

The EESC is convinced that a joint effort is needed by all public and private actors to identify and implement a joint strategy of coordinated measures aimed at preventing, detecting and combating this phenomenon, supported by an appropriate common technical and legislative framework.

1.8.

The EESC considers however that the initiative is primarily a matter for the EU private sector comprising the industries and service providers who are most concerned — as well as the whole value chain, with the involvement of right holders and SMEs — while the European Commission has to update the regulatory framework for IPRs in order to modernise the existing rules and adapt the criminal law options currently available in the EU and its Member States. Together they should build up a strong joint impetus, from the source through the entire supply chain, identifying interoperative mechanisms for international cooperation and monitoring of suppliers/clients, in order to minimise the risk of counterfeiting in the supply chain.

1.9.

Stronger joint action by the private sector is crucial, in the EESC’s view, to ensuring effective partnerships with the internet site providers, content producers, brand owners, electronic payment operators, advertisers/advertising networks and internet domain registers, and voluntary memorandums of joint action, that are able to generate rapid adjustments to sudden market changes.

1.10.

Robust promotion by the private sector should be flanked by public measures such as:

1.11.

The EESC considers that a European anti-counterfeiting campaign should be financed, including a European Anti-Counterfeiting Day and a special telephone hotline, highlighting:

1.12.

The EESC views closer coordination of the various European Commission services with the European agencies involved in the issue with their counterparts in Member States to be essential. This can be achieved by supplying sufficient resources for cooperation across Europe and efforts to establish a true culture of cooperation. Setting up a central counterfeiting task force for an adequate period of time should help to effectively achieve this objective.

1.13.

The EESC urges the Council and the EP, as a matter of urgency, to prevail upon the European Commission to:

2.1.

To define the subject of the present opinion, reference is made to the counterfeiting concepts set out in Regulation (EU) No 608/2013. ‘Electronic and digital piracy’, trade and the dissemination of IT software or illegal files, in violation of the relevant intellectual property laws, do not fall within the scope of this opinion, since they are closely linked with the Digital Agenda, for which the EESC has set up a dedicated Permanent Study Group.

2.2.

Quantifying the counterfeiting phenomenon is a complex task, since, as in all spheres of illegal activity, the data available are too heavily based on estimates and approximations, given that counterfeiting channels are for the most part controlled by criminal organisations, which have shrewdly identified the huge potential of this type of illegal activity, with minimal risks of being caught.

2.3.

In recent years, the types of goods targeted by counterfeiting have multiplied to the extent that no products now exist which cannot be imitated and sold: everything is copied, from clothing accessories, to mechanical spare parts and tools, building materials and equipment, jewellery, footwear, design objects, toys, cosmetics, and medicines, and fake goods would now appear to constitute a parallel sector in their own right, a real competitor which businesses must pit themselves up against and from which they must defend their market share.

2.4.

Ease of purchase often means that consumers choose counterfeit products, with serious repercussions on businesses, particularly SMEs; poorly regulated and difficult to control, e-commerce and online auctions represent an effective and secure way of establishing a wide customer base and trading in low-cost counterfeit goods.

2.5.

Counterfeiting has become one of the main facilitators and financers of organised crime. The involvement of criminal organisations has resulted in a drastic increase in the level of professionalism in the counterfeiting industry: organised criminals have developed the networks necessary to enable them to optimise their results on a global scale.

2.6.

The production of counterfeit goods is generally considered an external phenomenon: customs statistics clearly show that the majority of countries from which counterfeit products originate are not members of the EU. China, although having made the greatest commitment to stamping out counterfeiting, remains one of the industry’s key players.

2.7.

The rise of the internet has created new distribution channels for counterfeit products involving a low risk for the seller due to the difficulties in prosecuting intermediaries in the value chain. Greater cooperation is needed along the whole value chain to effectively tackle trade in counterfeit goods online.

2.8.

IPR-intensive industries in Europe account for 39 % of the EU’s GDP and 26 % of its employment (5). According to recent studies (6), counterfeit goods represent between 5 and 7 % of world trade, which amounts to roughly EUR 600 billion per year, while the OECD (7) put the value of imported fake goods at 2,5 % of international trade in 2013, equivalent to EUR 338 billion, and estimates that up to 5 %, or EUR 85 billion of goods imported into the EU are counterfeit or pirated, excluding those produced and sold within a single Member State, and those bought on the internet and through indirect economic activity.

2.9.

According to other international statistics from 2017 (8) the global trade in counterfeit and pirated goods is estimated to generate between USD 923 billion and USD 1,13 trillion annually.

2.10.

The production of counterfeit goods, including on a large scale, is on the rise in Member States as counterfeiters attempt to circumvent customs controls at the EU’s external borders.

2.11.

The placing on the market of counterfeit and pirated products causes enormous damage to the economy, facilitating the development of an ‘underground economy’, which deprives (9) of the revenue required for essential public services and places a heavier tax burden on taxpayers, with regular job losses.

2.12.

In the EU, counterfeiting is responsible for roughly 800 000 job losses per year and roughly EUR 14,3 billion in annual tax revenue losses, including VAT and excise duties (10).

2.13.

The EP has adopted a series of resolutions on the subject, in particular its Resolution of 9 June 2015 (11), in which it recommended pursuing an approach which brings together all actors in the fight against counterfeiting, raising awareness among consumers and providing them with more information, developing new trade models, improving defence mechanisms for SMEs, promoting a convergence of interests between Member States and third countries and making greater use of data collected by the European Union Intellectual Property Office (EUIPO).

2.14.

On 19 March 2013, the Council adopted a Resolution on the EU Customs Action Plan to combat intellectual property rights infringements (2013 to 2017), setting out clear objectives, earmarking appropriate resources and defining result and performance indicators according to a clearly defined road map on:

2.15.

On 18 May 2017, the Council conclusions on setting the EU’s priorities for the fight against organised and serious international crime 2018-2021 underline that ‘the criminal markets are increasingly complex and dynamic[…]. […] Special attention should therefore be given to the online trade in illicit goods and services, including counterfeit goods[…]’.

3.1.

Customs statistics clearly show that the majority of countries from which counterfeit products originate are not members of the EU, given that key players in the counterfeiting industry include not only China and Hong Kong, but also other Asian countries specialised in specific sectors: India in pharmaceuticals, Egypt in food products and Turkey in perfumes, cosmetics and footwear, along with Malaysia, Belarus, the United Arab Emirates, Indonesia, Thailand and the Philippines.

3.2.

In 2014 EU Customs statistics revealed that more than 66 % of textile and clothing counterfeit products came from outside the EU.

3.3.

Transit points for the transport of goods from Asia to Europe play a particularly important role, since they act as central zones for the transport of goods containers in a network of 3 000 free zones located in 135 different countries. These areas are used as a place to exchange, document and relabel the contents of containers.

3.4.

Another factor to take into account is the considerable rise in the domestic production of counterfeit and pirated goods in the EU, an activity which, according to Europol, is becoming more and more profitable for organised criminals and which carries much lower risks and is linked with other types of crime, such as fraud, document forgery, tax evasion and human trafficking.

3.5.

With the relocation of counterfeit and pirated goods production facilities to within the EU, the resulting lower transport costs and reduced risks of interception, and the development of well-organised criminal networks with adequate resources, a new model appears to be emerging: the expected expansion of the Tanger Med free zone in Morocco, only 15 km away from the EU, could offer criminal networks further opportunities to place larger quantities of counterfeit goods on the European market.

3.6.

The countries whose businesses were most affected by counterfeiting activities between 2011 and 2013 are the US at 20 %, Italy at 15 %, France and Switzerland at 12 %, Japan and Germany at 8 %, the UK and Luxembourg. Indirect losses and additional costs incurred for new design/innovation solutions due to counterfeiting activities should also not be underestimated.

4.1.

The EESC strongly calls on the Member States to introduce measures aimed at:

4.2.

The EESC calls for a new EU framework 2018-2021, including a fully financed and coordinated Action Plan with a view to strengthening anti-counterfeiting legislation and initiatives at EU level, through measures such as:

5.1.

It is essential, in the EESC’s view, to ensure closer coordination of the various Commission services and the European agencies involved in the issue. This can be achieved by setting up a task force reporting directly to the Commission president, able to interact with the relevant private sector segments, international bodies and the competent Member State authorities.

5.2.

This counterfeiting task force should present an all-embracing annual report on progress made in technological, structural and regulatory spheres, especially at international level.

5.3.

The European Commission and the European agencies, especially the EUIPO, Europol and OLAF, as well as NGOs involved in stamping out counterfeiting, need to step up their international coordination, by holding annual international conferences.

13.10.2017   

EN

Official Journal of the European Union

C 345/32

Rapporteur:

José Manuel ROCHE RAMO

Co-rapporteur:

Estelle BRENTNALL

1.1.

The EU beet sugar industry is preparing for one of the biggest changes in its history: the end of production quotas on 1 October 2017. The end of quotas presents opportunities for EU beet sugar manufacturers, in particular the possibility of producing more sugar for food use and exporting without limits. To benefit from these openings, the EU beet sugar industry has worked hard to increase its competitiveness. Nevertheless, the end of production quotas also creates additional risks and uncertainties and could put the sector under pressure. Competition will intensify, putting pressure on prices for both growers and processors, while isoglucose is expected to take an increased market share. Less competitive EU beet sugar manufacturers and growers may struggle to survive in a harsher and more volatile market environment. This could have serious consequences for workers, undertakings, farmers and rural communities. It is essential that policy-makers remain vigilant as regards the future of the sector.

1.2.

Aid for sugar private storage will be the only specific instrument that remains as an option to support the EU beet sugar industry after the end of production quotas. However, in the event of a market crisis in the EU beet sugar sector, it is not clear under which circumstances such aid might be introduced. The conditions for the activation of aid for private storage must be better defined so that the system is fit for purpose. The European Commission could consider defining an objective price threshold that would trigger the decision-making process for the activation of aid for private storage. This would make the process less subjective, and promote the rapid and uniform introduction of such assistance in times of crisis. General crisis provisions, such as Article 222 of the Single CMO Regulation, should also be explored as an option. This committee welcomes the setting up of the Sugar Market Observatory; so long as its composition is balanced and it is convened in a timely manner should market difficulties arise.

1.3.

The CAP should include market tools that support continued sugar production in the EU Member States. The EU beet sugar industry contributes decisively to job creation and economic activity, as well as the competitiveness of the food and drink industry. Currently the CAP allows Member States to grant coupled support to sectors or regions where specific types of farming or specific agricultural sectors that are particularly important for economic, social or environmental reasons are experiencing certain difficulties. This is the case for sugar beet cultivation in vulnerable regions. Coupled direct payments should be focused on reducing the risk of a decline in and/or the abandoning of beet sugar production in such regions in order to avoid rural desertification and preserve biodiversity. In the context of increased volatility, direct support for farmers should be supplemented by better access to risk management tools. The interdependence of processors and farmers is the reason for the specific contractual framework that regulates the relationship between growers and processors in the sector.

1.4.

In the event of unfavourable developments in the EU sugar market from 1 October 2017, redundancies may occur. The European Commission should explore the suitability of the different Structural and Investment Funds (ESI) in order to support regional or local employment, particularly for workers and farmers affected by possible utility closures. It may be necessary to make exceptions regarding the criteria for the introduction of some of these funds.

1.5.

From 1 October 2017, EU beet sugar manufacturers will be obliged to notify both the selling price of their principal product and the purchase price of their primary input. This degree of market transparency is not matched by transparency further down the supply chain and by isoglucose producers. The European Commission should consider the recommendations of the Agricultural Markets Task Force to extend market transparency downstream to the users of sugar, to give a better picture of how value added is shared along the supply chain. Market transparency — be it for sugar and isoglucose producers or sugar users — must not affect the competitive positions of those undertakings affected.

1.6.

Increased sugar exports will be crucial for the EU sugar industry after the end of quotas. The European Commission should promote EU sugar exports and challenge the arbitrary imposition of trade defence instruments by third country importers. The European Commission should exercise caution in its pursuit of trade liberalisation in the context of the EU’s free trade negotiations. It should challenge the trade-distorting support policies of the major world sugar producers and exporters more assertively, both at the WTO and during bilateral trade negotiations.

1.7.

Fostering alternative outlets for sugar beet — such as bioethanol, animal feed, bioplastics, and bio-based chemicals — will be essential for the sector’s future competitiveness. The European Commission should maintain the 7 per cent cap on biofuels that can be counted towards the 10 per cent target for renewable energy in transport. Annex IX to the Renewable Energy Directive (2009/28/EC), which classifies molasses as an advanced biofuel feedstock, should remain unchanged. The European Commission and European Investment Bank should work to stimulate and enhance innovation in the domain of other bio-based co-products. This could take the form of an EU Innovation Fund and a programme of low-interest loans.

2.1.

The European Union is the world’s leading producer of beet sugar. On average, 17,2 million tonnes were produced each year between 2011/12 and 2015/16. Sugar-producing companies purchase around 107 million tonnes of sugar beets yearly from 137 000 European growers. Sugar beet is mainly transformed into sugar, but a considerable quantity is processed into other products, such as animal feed, renewable ethanol and bio-products. Such products can play an important role as a buffer in case of over-supply.

2.2.

Beet sugar factories are for the most part located in rural areas characterised by low levels of industrial activity. They are often the economic backbone of the regions in which they are located, with few industrial alternatives existing. The EU sugar sector provides almost 28 000 direct jobs, which are mainly concentrated in the most competitive sugar beet-producing regions. These jobs tend to be relatively high-skilled, and sugar industry workers enjoy higher remuneration than in most other agricultural sectors. In addition to direct employment, the economic activity generated by the industry provides for a further 150 000 indirect jobs, for example in transport, logistics and construction.

2.3.

Only in very exceptional circumstances is it possible to restart sugar production once a sugar production facility has been closed down. This is because the construction of a sugar factory entails high capital costs, typically of several hundred million euros. In most cases, the closure of a single facility means the permanent loss of an essential industrial activity, resulting in the loss of hundreds of direct and indirect jobs. The search for alternative industrial employment can lead to rural migration and depopulation.

2.4.

The situation is similar for growers. Sugar beet must be cultivated in geographical proximity to the factories that process it. This is because of the relatively high cost of beet transport — six to 7 tonnes of beet are required to produce 1 tonne of sugar. Where a beet sugar factory goes out of business, growers are deprived of an outlet for their sugar beet. Unless there is another factory within an economically viable distance, they are forced to switch to other crops. This has a substantial negative impact on the financial returns of the farmers concerned, many of whom will have made substantial investments in specific equipment such as for beet harvesting, which is not applicable to other crops. In addition, the sudden conversion to other crops by a large number of farmers can put considerable pressure on local agricultural markets.

2.5.

Beet sugar production is environmentally sustainable. Sugar beet is always grown in rotation with other field crops. Crop rotation helps conserve soil fertility and reduce levels of soil-borne pathogens and pests and thus reduces the requirement for plant protection products. The development and dissemination of good practices is widespread in EU beet growing regions. The use of mulch and reduced tilling are encouraged within the sector to promote soil fertility and reduce erosion. In factories, energy use is minimised by the use of employing combined heat and power systems (CHP) and through heat recovery and water conservation.

3.1.

The EU sugar sector has invested heavily in technical improvements and cost-reductions, as well as in human capital, research, education and training. Over the last 26 years, the average EU cost of production for quota sugar has increased by only 0,4 per cent per annum, compared to an inflation rate of 2,2 per cent per annum. This translates into a continuous reduction of costs relative to inflation over two decades (1). These gains have contributed to the increasing the competitiveness of the EU’s sugar-using food and drink industry.

3.1.1.

Sugar beet yields have increased substantially over past years thanks to a combination of technical and seed variety improvements, driven by cooperation between the industry, growers, research and development and the seed trade. Average beet sugar yields (tonnes sugar/ha) have increased by 2,4 per cent per annum for the last 26 years, and this trend is projected to continue into the post-2017 period. EU sugar yields per hectare are now higher than those in Australia or Brazil’s Centre-South region, which are counted among the most competitive regions in the world. Four of the world’s top ten biggest sugar-producing companies are based in the EU (2).

3.2.

These competitive gains are due in part to a substantial restructuring of the sector that took place between 2006 and 2009. Following the reform in 2006, the EU beet sugar industry closed almost half its factories with the loss of 4,5 million tonnes of production capacity, over 24 000 direct jobs and 165 000 farm suppliers (3). This transformation has made the EU beet sugar sector more economically sustainable, albeit at a high social cost. Since the 2008/2009 marketing year, employment has remained relatively stable, as has the number of factories.

3.3.

Strong relations between sugar processors and employees have been sustained by longstanding social dialogue at European and national level. The EU Sugar Sector Social Dialogue has existed since 1968, and it has been key to ensuring a socially-adequate transition in difficult times, such as those following the 2006 EU sugar policy reform. By contributing to a sense of co-ownership, the Social Dialogue contributes to the industry’s competitiveness.

3.4.

Further gains in competitiveness will be pursued from 2017, in particular as manufacturers may seek to reduce fixed costs by operating factories at full capacity. This could imply longer beet processing campaigns and therefore higher risks for both processors and growers, due to uncertainties related to the harvest and storage of beet in winter time.

3.5.

To avoid wastage, EU sugar processors use the whole of the sugar beet to produce a range of products in addition to sugar, for example: the stones and soil from the cleaned beet are sold to the construction industry; the fibrous material from the beet (‘beet pulp’) and molasses are extracted and processed for use in animal feed; and molasses and other syrups deriving from sugar production, can be used to produce renewable ethanol. Increasingly, sugar producers are also diversifying into the production of ingredients for bio-based products for industries such as plastics, textiles, pharmaceuticals and chemicals.

4.1.

Beet sugar processors and sugar beet farmers are mutually dependent. Farmers are reliant on sugar-producing companies to provide the fixed capital and expertise to extract the sugar from their beets, and processors are dependent on their contracted farmers to supply the crop. To minimise beet transport costs, farmers also need to be located in geographical proximity to the sugar factory they supply. In addition, many of the largest sugar-producing companies are cooperatives, which enables the supplying farmers to have a direct stake in the industry.

4.1.1.

The interdependence of processors and farmers necessitates a specific contractual framework to balance the rights and obligations between the two partners. Contractual relations between sugar beet farmers and sugar processors after 2017 are set out in Article 125 and Annex X of the Single CMO regulation. These rules have recently been supplemented by a Delegated Regulation, which allows value-sharing clauses to continue to be included in beet contracts on a voluntary basis (4). The majority of sugar industries have recently agreed beet contracts for 2017/18 and beyond that include some form of linkage between sugar beet prices and sugar market prices.

4.1.2.

Beet sugar manufacturers have long been obliged to report monthly on prices, production and stocks, and this obligation will remain into the post-quota period. From 1 October 2017, sugar beet prices are also to be notified to the European Commission and published on an annual basis. This degree of market transparency that characterises the sugar processing sector is not matched by transparency further down the supply chain and by isoglucose producers. Evidence suggests that price transmission along the sugar supply chain is low (5), and there may be merit in exploring the feasibility of greater transparency for the users of EU beet sugar.

4.2.

Cane sugar refiners are also active on the EU sugar market. Cane sugar refiners do not transform sugar beet, but are dependent on imports of raw cane sugar for refining. The EU allows unlimited duty-free imports of sugar from the least-developed countries under the ‘Everything But Arms’ (EBA) Scheme and from African, Caribbean and Pacific countries that have concluded an Economic Partnership Agreement (EPA) with the EU. EU raw cane sugar refiners benefit from duty-free market access concessions under bilateral agreements with Central America, Colombia, Peru, Ecuador and South Africa that currently total 420 000 tonnes per annum. Annual availability of raw sugar for refining under the reduced-duty CXL quota — which is divided between Brazil, Australia, Cuba and all third countries (‘Erga Omnes’) — totals over 700 000 tonnes and is set to rise to almost 800 000 tonnes in 2017/18. In both recently-completed and ongoing free trade negotiations the EU is offering additional access for third countries to the EU sugar market.

5.1.

Since 1968, EU sugar and isoglucose production for food use has been limited by production quotas. Production quotas will cease to exist on 1 October 2017, i.e. the start of the 2017/2018 EU sugar marketing year. From then on, EU sugar and isoglucose producers will be free to produce sugar and isoglucose for food use without limits. The existing export ceiling will also cease to exist (6). As a consequence, operators in the EU sugar sector will be free to export sugar without limits from 1 October 2017.

5.2.

Sugar production is expected to rise in 2017/18. This increase in production is expected to be structural. In addition, isoglucose is expected to occupy a larger share of the EU sweeteners market, with isoglucose manufacturers aiming to produce 2-3 million tonnes ‘over time’, much of which may be used for the production of soft drinks (7). By way of comparison, EU sugar consumption is in slight decline.

5.3.

Increased domestic sugar production and an enlarged market share for isoglucose could weigh on EU white sugar prices in the post-quota period. The European Commission’s Medium-term Prospects for Agricultural Markets 2016-2026 suggests that EU white sugar prices will be below the reference threshold of 404 EUR/tonne for much of the post-quota period, i.e. below the average costs of sugar production and sugar beet cultivation.

5.3.1.

In 2015, EU white sugar prices reached their lowest level since the price reporting system began in 2006 (8). This situation had a severe effect on the reported financial results of EU sugar producers, many of whom were unable to turn a profit in the fiscal year 2015/16. Sugar producers in Italy have come under particular pressure, with one producer opting not to produce for the 2015/16 marketing year. Greece’s sole sugar producer is also in serious difficulty.

5.4.

From 1 October 2017, EU sugar producers will be free to export without limits. This may be an opportunity to increase revenues to compensate for lower sugar prices within the EU. World sugar consumption is projected to grow at a rate of 1,5-2 per cent per annum (c. 2-3 million tonnes per year), so there should be sufficient demand for an increase in the EU’s sugar exports.

5.4.1.

Nevertheless, an increase in EU sugar exports is dependent on sufficient access to third country markets. The European Commission should work to open the sugar markets of net sugar importers in its free trade negotiations, both through the reduction/elimination of customs duties and the opening of tariff-rate quotas. It should continue to eliminate duties on exports of EU high sugar-containing products, and back strong rules of origin for such products to ensure that EU sugar producers benefit from increased exports.

5.4.2.

EU sugar exports are sometimes challenged by the imposition of trade defence instruments by third countries. The European Commission should do everything possible to fight such measures once the sector becomes deregulated from 1 October 2017 and the sector must offer the necessary support to any agreed proceedings.

5.5.

In both recently-completed and ongoing free trade negotiations, the EU is offering access for third countries to the EU sugar market. Market opening is exposing EU white sugar prices to downward pressure and increasing volatility. The current world market is a residual dump market subject to high volatility that frequently trades below the average production costs of even the most efficient global industries. This is due in large part to the trade-distorting support measures of some of the major sugar producers and exporters, such as Brazil and Thailand. The result is that the EU beet sugar industry is not competing on a level playing field with sugar producers in third countries. The Commission must treat sugar as sensitive in its free trade negotiations by maintaining the EU’s duties on sugar. The ongoing negotiations with Mercosur present a grave risk to the sector, given that Brazil is the dominant world producer and exporter. The Commission must be prepared to challenge the major sugar subsidisers at the WTO dispute settlement body and during trade negotiations.

13.10.2017   

EN

Official Journal of the European Union

C 345/37

Rapporteur:

Sofia BJÖRNSSON

1.1.

The EESC welcomes the Cork 2.0 Declaration and the conference in September 2016 that led to it. The declaration offers strong ongoing support for a rural policy at EU level.

1.2.

It is evident that rural regions in the EU are not homogeneous and that situations vary between and within Member States. The EESC believes that these differences mean there is a need for focus and a strategic approach when using available EU funds. This must be based both on priorities set by the Member States and their regions and, most importantly, on initiatives from those living in rural areas. Mandatory rural proofing of policy decisions and strategies can also be a way to take account of and pay attention to the specific circumstances of rural areas.

1.3.

Rural development is a horizontal issue that affects practically all policy areas. A more coherent policy for rural and regional development is needed, as is a robust budget for the ESI funds (European Structural and Investment Funds). The EESC notes that the ESI fund with the greatest focus on rural development is the European Agricultural Fund for Rural Development (EAFRD), and stresses that the other ESI funds — such as the European Regional Development Fund (ERDF) and the European Social Fund (ESF) — should increase their share.

1.4.

There is considerable scope for simplifying the policy. The EESC emphasises the need to simplify the regulatory framework for the ESI funds, both at EU level and in national and regional implementation of the policy. The current system is so complex that some avoid seeking support.

1.5.

Many parts of Europe, particularly in rural areas, still lack reliable internet solutions. The EESC stresses that this is unacceptable. Rural areas need broadband, e.g. for fully functioning telephony, for their own safety and for their quality of life. Broadband access can be a factor influencing the extent to which above all young people choose to stay in an area or move away. Broadband is a must for businesses and entrepreneurs.

1.6.

The agricultural sector plays a very important role in rural areas because of its strong affinity with the land. Agricultural production is both an indispensable feature of rural areas, in order to meet society’s demand for sustainable food products, and a driver of rural development. It is therefore only natural, in the EESC’s view, that most of the resources available under the EAFRD are earmarked for agricultural activities. Good conditions for young farmers are a prerequisite for the long-term sustainability of agricultural production.

1.7.

The EESC would stress that achieving sustainable development requires a good climate for innovation.

1.8.

The EESC points out that UN Sustainable Development Goal 17 and its subgoals, as well as the Paris climate agreement (COP 21), provide overarching objectives covering all EU policies, notably rural development. Regional and local authorities that operate in rural areas must play an active role in implementing these international commitments.

2.1.

In 1996, the Commission held a conference in Cork, Ireland. The outcome of that conference was the Cork Declaration, which laid the groundwork for the second pillar of the common agricultural policy (CAP) and for the rural development programmes. In autumn 2016 the Commission held another conference in Cork, when the Cork 2.0 Declaration was adopted.

2.2.

The declaration was drawn up by broad consensus at a conference organised by the Directorate-General for Agriculture and Rural Development and attended by some 340 participants from a majority of EU Member States, representing civil society and government at national, regional and EU level, including members of the EESC. At the closing session, the declaration was presented under the title ‘A better life in rural areas’, which was implicitly endorsed by the participants.

2.3.

The starting point for the declaration is agricultural and rural development policy in the EU, but to a certain extent it also takes a broader approach, referring to the UN Sustainable Development Goals (2030 Agenda) (1) and the Paris climate agreement (COP 21) (2).

2.4.

The text first sets out the reasons for the declaration, and then identifies 10 policy orientations:

2.5.

The declaration takes a broad approach to rural development, and its strength lies in its scope and content, as it covers all of the elements needed for a viable and sustainable rural environment in the EU. The EESC notes, however, that its scope is also its weakness, as it creates complexity with no room for focus at EU level. In view of the significant challenges for rural areas, the EESC wishes to underline the importance of using available funding in a targeted way to ensure real results. This focus must be based both on priorities of the relevant Member States or regions and, most importantly of all, on initiatives of those living in rural areas.

2.6.

The content of Cork 2.0 is very similar to that of the 1996 declaration, except for the addition of climate issues and digitisation.

2.7.

The EESC sees itself as a natural partner when it comes to implementing the declaration, and requests that the Commission continue producing progress reports on said implementation.

2.8.

All EU countries have national or regional rural development programmes, which are financed partly by the EAFRD and partly from national funds (both public and private). These programmes set out measures aiming to contribute to sustainable development in its three dimensions — environmental, social and economic. They are drawn up by the relevant Member State or region, and approved by the Commission.

2.9.

The EAFRD is one of the ESI (European Structural and Investment) funds, along with the Cohesion Fund (CF), the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the European Maritime and Fisheries Fund (EMFF). A common regulatory framework (3) governs the technical implementation of the ESI funds. In addition, each country has concluded joint partnership agreements for the funds setting out the policy implementation priorities. This is part of the process of implementing the objectives of the Europe 2020 strategy. There is thus a close link between the funds, and a strategy for coordinating them.

2.10.

The EAFRD provides for rural networks, at EU level with the European Network for Rural Development, and at national and regional level. Networks create platforms for meeting and sharing experiences, and their activities improve the basis for effective implementation and achievement of the objectives of rural development programmes.

2.11.

The Committee of the Regions has commissioned a study on the extent to which the ESI funds are used for rural development (4). It is not surprising that the EAFRD is the fund that provides the most resources and which is used for this purpose. The share provided by the other funds is relatively small. Since rural development is a horizontal issue and important for EU cohesion, the EESC considers that efforts should be made to increase this share.

2.12.

The ESI funds have been, and will continue to be, the primary means at EU level of implementing the intentions of the Cork declarations. The EU’s next funding period will start in 2021, and the formulation of policy for this period will determine how well the intentions behind Cork 2.0 are put into practice. The EESC would also note that implementing the declaration and the policy objectives will require the ESI funds to have a robust budget.

3.1.

Point 1 of the declaration states that there should be a rural proofing mechanism that ensures that the potential of rural areas is reflected in the EU’s policies and strategies. Rural and agricultural policies should build on the identity and dynamism of rural areas through multi-sectorial approaches and should consider the value of sustainability, social inclusion and local development.

3.2.

Rural proofing would mean objectively and systematically taking into account and paying attention to the specific circumstances of rural areas. It could be a tool for identifying the impact of policy decisions on rural areas, in order to avoid affecting them negatively.

3.3.

Rural proofing is practised for example in Finland, the United Kingdom and Canada. It may be either mandatory or optional. In Northern Ireland, there has been a legal requirement for rural proofing since 2016. The various national systems are similar;

3.4.

For rural proofing to deliver results, it needs to be mandatory. It must provide the people taking decisions with a solid basis for doing so. Rural proofing that resulted only in reports and findings, but did not affect the decisions being made, would be meaningless.

3.5.

It must also be recognised that the EU and the Member States do not have just one countryside, but many different rural areas with different opportunities and circumstances. This must also be reflected in rural proofing and in policy both at EU level and within the Member States, if rural development is to produce good results. People living in rural areas also have a role to play in creating a local identity and working to develop this as well as discussing and deciding to what extent to preserve the rural character.

3.6.

Point 8 of the declaration states that we need to build on the success of LEADER and on the bottom-up approach on which it is based. The EESC has in numerous texts set out its position on the EU’s cohesion policy, the partnerships established under it, the LEADER method and the new approach of community-led local development (CLLD).

3.7.

The EESC endorsed the analysis already set out in 2004 in the Commission’s third progress report on cohesion that the objective was to help achieve more balanced development by reducing existing disparities, avoiding territorial imbalances and coordinating regional policy and sectoral policies (5).

3.8.

The Committee notes, however, that this objective has not been achieved, and that there needs to be a more cohesive policy for rural areas and regional development.

3.9.

The EESC has also welcomed the partnership principle as an effective way of promoting ESIF programmes. The partnership principle involves the participation of both the traditional economic and social players and civil society organisations, environmental partners, non-governmental organisations and bodies responsible for promoting gender equality.

3.10.

The Leader method is a tried and tested development tool where the public sector and civil society participate in a local partnership. The EESC noted back in 2011 that the method should also be able to tap into funding from all the ESI funds. It has also been a positive factor in improving urban-rural linkages (6). The method can also be used for urban areas, but the EESC would emphasise that this should not be allowed to happen at the expense of rural development.

3.11.

During the 2014-2020 programming period, community-led local development (CLLD) within the LEADER method has emerged as a new instrument where the four ESI funds make a joint contribution. Local development can be implemented most effectively by those who live and work in an area and are familiar with it.

3.12.

At least 5 % of EAFRD funds must be channelled through CLLD. The way it is structured, such that all four sets of rules must be followed for each of the funds, has limited the possibilities for using it in a simple, rational way. With a view to the next programming period, the Commission should put forward proposals for significant simplification, so that community-led local development can reach its full potential as a tool for both rural and urban areas, together with a minimum share of funding for the method.

3.13.

Factors such as jobs and services affect the extent to which people want or are able to remain living in rural areas or move to them. There is a general trend in the EU for people to move away from rural areas, creating a vicious circle and reducing the likelihood of achieving Community objectives or the UN Sustainable Development Goals. Demographic developments may pose a challenge in future, and both young and old people in rural areas need to have the conditions for a good quality of life.

3.14.

Access to basic public and business services such as schools, healthcare, postal services, food shops, public transport, etc. may vary between urban and rural areas. This can be a critical determinant in people’s choices of where they want or are able to live. For families with children, for instance, access to functioning childcare can influence the extent to which parents are able to work. In some parts of the EU access to services is generally worse in rural areas than in urban areas. The spatial planning process must take this into account so as to ensure that people’s quality of life in rural areas does not suffer.

3.15.

In several EU countries unemployment is higher in rural areas than in urban areas. But this varies widely, as is apparent from Eurostat statistical data (7). Certain businesses report difficulties finding skilled workers in rural areas. Consequently a mismatch is apparent between demand and supply in both directions. Young people who want to study gravitate to places with a university or college and do not return.

3.16.

Managing to accommodate immigrants — and especially their families — is and will continue to be a challenge facing residents of rural areas in the coming years. Seeking and maintaining mutual regard and respect ought to be encouraged. Rural areas could offer good living conditions for immigrant families. In countries with high immigration — e.g. of refugees — and migrant labour finding job opportunities may be a challenge, but migration can also create recruitment options.

3.17.

Issues of job opportunities and education and training are covered mainly in points 3 and 7 of the declaration. The question of services is addressed more indirectly. The EESC considers that Community initiatives have both direct and indirect implications for development, in particular the question of job opportunities generated by efforts to promote business. Access to services falls more to the respective Member States, even if the ESI funds can drive service provision.

3.18.

Farmland and forests cover around 85 % of the land area of the EU, with large variations between countries and regions. The cultivated landscape provides the conditions for producing food, feed, energy and fibre, but it is also a resource in terms of conservation and production of public goods such as rich flora and fauna. Landscape is a factor that distinguishes rural areas from urban ones and is a unique aspect of rural development in the EU; the agricultural sector also plays a very important role in rural areas because of its strong affinity with the land. Issues concerning preservation of the rural environment and management of natural resources are highlighted in points 4 and 5 of the declaration. The conditions for management and use are of decisive importance for the intrinsic values of the landscape, water quality and biodiversity.

3.19.

Agricultural production is considered in the declaration, albeit mainly indirectly: the text suggests that agricultural production (in the form of foodstuffs) is to some extent taken for granted. As already mentioned, issues relating to the conservation and management of the environment and natural resources are dealt with more explicitly. The EESC points out that agricultural production is both an indispensable feature of rural areas, in order to meet society’s demand for sustainable food products, and a driver of rural development. People working in the agricultural and forestry sectors make up a significant proportion of the rural population, create job opportunities and provide a basis for demand for services. An important factor here is the possibility for new farmers, and especially young farmers, to take over and expand a business. Only a small proportion of farmers are young and efforts are needed to facilitate generational renewal.

3.20.

The three dimensions of sustainable development — economic, social and environmental — are necessary for sustainable agricultural production. The economic dimension may in some cases be critical for farming. An example is when species-rich meadows and pastures gradually decrease in size as livestock grazing becomes less profitable, which in turn has a negative impact on biodiversity. This illustrates that if farms are not economically viable there are effects on the surrounding environment and that it is important for farmers to receive remuneration for the environmental services they perform.

3.21.

The EESC considers the agricultural sector to be an area of rural development where the EAFRD has, and should continue to have, primary responsibility. Most of the resources available under the EAFRD are quite rightly earmarked for agricultural activities, for example in the form of environmental compensation, skills development, support for areas with natural constraints, and investment aid. Other EAFRD areas — for example energy, broadband and support for innovation — have positive effects for rural areas more widely. At the same time, agriculture is a business activity like any other, and this target group should not be excluded from support provided through other ESI funds.

3.22.

Today’s farmers and forestry businesses can be seen as both landscape creators and managers of a landscape used by earlier generations. For many people, the cultivated landscape is a key aspect of better quality of life, and its importance for leisure, outdoor activities and the tourism industry should not be underestimated. The intrinsic value of landscape and land resources can create business opportunities and livelihoods in many different ways.

3.23.

A more balanced territorial development should also include a transition to sustainable food systems (8). Developing a holistic approach to food systems is essential to address economic, environmental and social challenges related to food production and consumption and to ensure good governance of initiatives on multiple levels and in multiple sectors. Such initiatives include, for example, the promotion of short supply chains aimed at improving rural development by promoting access to healthy fresh diets for consumers (9). This would also benefit local economies and agricultural production.

3.24.

The importance of innovation in rural development, in order to implement and generate new ideas, cannot be overstated. Innovative solutions create the conditions for a sustainable society, for example for the rural contribution to a more circular, bio-based economy and climate-smart solutions, and the potential for production with fewer inputs. The transfer of and access to knowledge is a key factor in implementing innovative ideas.

3.25.

New technology and new, innovative production forms provide a good basis for greater sustainability of agricultural production, resulting in improved animal welfare and the potential to produce more with fewer inputs in the form of e.g. plant nutrients or plant protection products. Applying new technology and implementing innovations often require extensive investment that can mean risk-taking for individual farms. Often it is not possible for one person alone to shoulder the risk. Investment aid, for example from the rural development programme, should be an option to boost technology and methods sought by society. There may be an inherent conflict between development of agricultural technology and the number of jobs available, since increased mechanisation and structural change in many cases lead to a decrease in employment, although this trend may produce more financially stable jobs.

3.26.

Strategies for, and the implementation of, innovation must be based on identified needs rather than on the amount of funding available. Point 7 of the declaration highlights the need to boost knowledge and both technical and social innovation, as well as the need for cooperation between stakeholders to use and share information. Community initiatives such as the European Innovation Partnership (EIP), e.g. EIP-Agri, can be useful here because of their bottom-up approach which generates networking and communication, and exchange between players at different levels, with a particular focus on business practice. It would be useful to support ‘innovation intermediaries’ to further promote innovation in rural areas.

3.27.

In today’s world, access to high-speed broadband is an indispensable aspect of infrastructure and a requisite for a well-functioning society in both urban and rural areas, affecting both access to labour and access to employment. The trend is for more and more to be done online. But many parts of Europe, particularly in rural areas, still lack reliable broadband solutions. The EESC stresses that this is unacceptable. People living in rural areas need broadband for their own safety (e.g. fully functioning telephony) and for their quality of life (e.g. fully functioning TV). Broadband access can be a factor influencing the extent to which above all young people choose to stay in an area or move away. Broadband is a must for businesses, as in most cases they cannot operate without a functioning broadband connection. Examples are payment solutions in an increasingly cashless society, accounting, e-commerce, or communication with customers. Farming is an example of a sphere where ICT is becoming ever more advanced in terms of providing new technological solutions.

3.28.

The need for and opportunities offered by digitisation, are highlighted in the declaration. Where market forces are not enough to drive the expansion of broadband, as is often the case in rural areas, the EESC believes that there should be scope for aid. It feels that the ERDF should be the primary source of support for infrastructure while it should be possible to use the EAFRD for more complex and specific projects. The European Investment Bank and the European Fund for Strategic Investments can provide support here, e.g. through innovative financial instruments.

3.29.

Rural areas have an important role to play in a circular economy. The circular economy is mentioned in point 6 of the declaration, which deals with encouraging climate action. But the circular economy has other positive aspects, which are also highlighted in the EESC’s opinion on the Circular economy  (10). There is a need for a sustainable cycle between town and country, not just in terms of resources but also in order to help strengthen agriculture and reduce imports of inputs. Rural areas thus have great potential to contribute to a more circular society, in part by being able to use waste products as a resource, e.g. as fertilisers and soil improvers, and in part by producing renewable energy and biomaterials.

3.30.

Reducing the use of fossil fuels and making use of renewable energy are an aspect of lowering climate-relevant emissions. Rural areas have great potential to contribute to this too, not least by generating solar, wind and hydro energy, as well as bioenergy. Renewable energy production can, however, have a major impact on local people and on the environment, and it is therefore important to take account of all elements of sustainable development.

3.31.

When it comes to climate change, we need both to reduce its effects and to adapt to them. Thanks to their large tracts of agricultural land and forests, rural areas have great potential to act as carbon sinks and thus to help reduce climate-relevant emissions, at the same time as production itself releases such emissions. The best available technology should be used in production, to minimise emissions. There is a need for skills development at all levels — from farmers to decision-makers — in combination with investment opportunities.

3.32.

In summary, rural areas have significant potential to contribute to a sustainable society and thus also to both the UN Sustainable Development Goals (2030 Agenda) and the climate agreement in Paris (COP 21), as is made clear in the Cork 2.0 Declaration. However, the challenges are significant, and investment is needed, both tangible and intangible, in order to address them.

3.33.

Discussions concerning support from EU funds often highlight the complexity of this, both for beneficiaries and for authorities. The policy complexity issue is addressed in point 9 of the declaration. The EESC emphasises that simplification is necessary, both at EU level and in national and regional implementation of the policy. The current system is so complex that some avoid seeking support, and thus complexity is compromising implementation of the policy and realisation of its objectives. Some types of application in principle cannot be completed correctly without assistance from a consultant. There must be a focus on legal certainty for individual players.

3.34.

For the current period, 2014-2020, the administrative rules for ESI funds were combined into a single regulation (11). In principle this was a positive move, as greater coordination can bring efficiency gains, particularly in the exercise of public authority, while the gains for individual beneficiaries are likely to be smaller, not least because they do not usually apply for aid from several different funds. The gains could potentially be greater for community-led local development in those countries where local development has been supported through several funds. The impact of the Common Provision Regulation is a question that may merit further investigation.

3.35.

Current rural development policy under the EAFRD is implemented via rural development programmes, with the establishment of priorities and focus areas. This has created a system in which the budget for the programme is highly fragmented, as the measures, focus areas and priorities all get their own budget headings. The transparency of the programmes has been suffering, and the structure has generated more administration for authorities, which in turn pulls resources away from implementation of programmes and thus reduces the likelihood of their goals being achieved.

3.36.

Point 10 of the declaration argues in favour of improving performance and accountability. This is also a guiding principle for the Commission’s budget procedures — in 2015 it launched the EU Budget Focused on Results initiative. Citizens and taxpayers must be able to obtain information on the results of policy and on the extent to which policy goals are being met.

13.10.2017   

EN

Official Journal of the European Union

C 345/45

Rapporteur:

Milena ANGELOVA

1.1.

The European Economic and Social Committee (EESC) appreciates the implementation of the services of general economic interest (SGEIs) package, which brings legal certainty for public service providers. The package strikes the right balance between the need to foster and support SGEI and the objective of preventing potential distortions of competition. However, stakeholders at regional and local level, in particular publicly owned SGEI providers (revealed by the EESC study ‘Review of Member States’ reports on the implementation of the European Commission Decision on the provision of State aid to the provision of services of general economic interest’), are voicing their concerns about key issues in the current rules that create unnecessary obstacles or a lack of legal certainty and therefore the EESC calls upon the Commission to take the measures needed to improve the current rules and their practical application, to provide guidelines, to create a best practices compendium and where necessary — to examine the need to update and amend the package.

1.2.

Reviewing the first two waves of Member States’ reports on the implementation of the SGEI package, the EESC notes with concern that they do not tackle the essential issue of compatibility requirements, a matter dealt with in depth by the Framework.

1.3.

The EESC notes that in most cases, the lack of certainty or the substantial costs involved in fulfilling the requirements raise barriers that unduly prevent authorities from fully implementing SGEI policy. Such hindrances acutely affect regional and local authorities, as the dialogue between the Member States and the Commission on State aid cases is undertaken by central government, while other administrative levels do not enjoy direct access to this process.

1.4.

The fact that only a handful of SGEI at regional or local level are reported (according to the above study) shows that the lack of direct channels with the Commission hinders proper financing of public services, which makes the appropriate authorities more reluctant to make full use of the Decision and to clear up doubts regarding its implementation.

1.5.

The EESC calls on the European Commission to examine the possibilities of upgrading the Decision and of extending its scope, in order to address the following elements:

1.5.1.

The EESC suggests that the Commission remove the exemption threshold and include all SGEI in the Decision, regardless of the yearly compensatory amount. Careful study of its current implementation proves that this will reduce the administrative costs and complexities that authorities would otherwise face, in particular at local level, without distorting the competition in any way.

1.5.2.

In the light of the labour market and ever challenging skills mismatches, the EESC calls on the Commission to examine the possibility of broadening the scope of the Decision, by considering eligible services provided in order to enhance people’s knowledge and qualifications and thus help them improve their job prospects.

1.5.3.

The EESC calls on the Commission to examine carefully and perhaps to amend the particular texts of the Decision, mainly related to: the time-limit for keeping records of all the information necessary to determine the compatibility of the compensation granted; clarifying that entrustments’ time limit should not have any material effect on their renewal or extension or on the eligibility of service providers running the remit; setting a readily available method for calculating reasonable profit; providing further clarification when addressing the requirement of sharing productive efficiency gains between the undertaking; ensuring a more flexible approach to minor overruns not exceeding 10 % of the yearly average compensation exempting them from updating the parameters.

1.6.

The EESC finds that further clarification is needed of the conditions of compatibility under the Framework, related to:

1.7.

The EESC notes that the European Parliament and the Council have not enacted regulations setting the principles and conditions governing the services of general economic interest, in particular in the economic and financial field. Therefore, it calls on the Commission, the Parliament and the Council to examine ways to fulfil this mandate of Article 14 of the Treaty on the Functioning of the European union, without prejudice to the competence of Member States and the Treaty rules referred to in that Article.

2.1.

In its action plan for 2017, the EESC stressed the importance of services of general economic interest as an essential element of our European economic and social model, enshrined as such by Article 14 of the Treaty on the Functioning of the European Union.

2.2.

Article 14 calls on the Union and the Member States within their respective powers to ‘take care that such services operate on the basis of principles and conditions, particularly economic and financial conditions, which enable them to fulfil their missions’. Furthermore, it provides that ‘the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall establish these principles and set these conditions without prejudice to the competence of Member States, in compliance to the Treaties, to provide, to commission and to fund such services’. This mandate has not been translated into specific legislative initiatives until now. By contrast, the European Commission has developed a far-reaching set of rules on State aid applicable to SGEIs following the case law of the Court of Justice of the European Union.

2.3.

The conditions of compatibility with the Treaty rules on State aid and Article 106(2) TFEU have been contentious, even since the Court of First Instance ruled in 1997 (1) that compensation awarded to firms implementing a public service mission should be regarded as State aid. Until then the consensus had been that compensating the extra costs stemming from the more demanding obligations associated with SGEIs did not confer any advantage. The Court of Justice reversed this position in 2001 (2), considering that the compensation could be considered State aid only if it exceeded the additional costs borne by the designated provider. Finally, the Altmark ruling in 2003 (3) established the criteria that any compensation scheme should meet to fall outside the scope of State aid rules.

2.4.

The European Commission determines the compatibility of SGEIs with State aid rules, closely following the three introductory Altmark criteria. This requires:

2.5.

In 2005 the Commission adopted the ‘Monti-Kroes package’, updated in 2011 (the ‘Almunia package’), with key rules for SGEI funding: the package includes a Commission Communication (4) (the ‘Framework’ hereafter) setting out the conditions of compatibility for SGEIs and a Commission Decision (5) exempting from notification schemes that are less likely to distort competition due to their limited funding (Article 2(1)(a) of the Decision sets the annual threshold at EUR 15 million) or targeting of activities meeting social needs (i.e. hospitals; health and long-term care; childcare; access and reintegration into the labour market; social housing; care and social inclusion of vulnerable groups; and maritime links to islands, airports and ports with a low volume of passengers). The Commission declared its intention to carry out a review of this set of rules five years after their entry into force.

2.6.

As part of its Programme for Europe, the EESC’s objective with this own-initiative opinion is to contribute to the upcoming Commission review by taking a detailed look at experience with implementing the SGEIs package. To this end, the EESC has commissioned a study on the application of SGEIs rules to public compensation (‘Review of Member States’ reports on the implementation of the European Commission Decision on the provision of State aid to the provision of services of general economic interest’).

2.7.

SGEI compensations rarely affect competition, as far as they cover the extra costs incurred by the designated providers in discharging the public remit. Thus, imposing on them the burden associated with State aid notification seems an overzealous step only justified in cases where other participants might suffer an undisputed damage. By contrast, conduct that severely undermines market conditions such as dumping sales from third countries or prices fixed at lower than warranted levels are unevenly matched by Community action. Thus, extending the scope of the Decision exempting SGEIs from notification, coupled with enhanced legal certainty and further flexibility in implementing the rules, seem essential to ensure that Treaty provisions fostering these essential services are properly met.

3.1.

The EESC believes that the Decision strikes the right balance between the need to foster and support SGEIs and the objective of preventing potential distortions of competition. Exemption from notification reduces the administrative costs and complexities that authorities would otherwise face, in particular at local level. Because SGEIs that are not eligible under the Decision face stricter rules, only cases raising particular concerns for competition should fall outside its scope, in accordance with the aim of concentrating at EU level resources for the scrutiny of State aid. Experience has shown that the Commission clears an overwhelming majority of the SGEIs schemes examined by it. Only three SGEI cases have led to an in-depth investigation procedure under Article 108(2) of the TFEU since the 2012 Decision and Framework were enacted. Two cases involved postal services (State aid SA.35608 on Hellenic Post, ELTA and State aid SA.37977 on the Spanish Post Office) and another a hospital scheme (State aid SA.19864 on financing to IRIS hospitals in the Brussels Region) following a Court ruling annulling a clearance decision by the Commission as the complexity meant that a formal investigation was required. In all cases examined by the Commission, claims by competitors play a key role, thus securing full discipline without requiring the systematic notification of SGEI schemes. Furthermore, case law and Commission practice provide enough guidance to stakeholders for gauging whether they can safely apply the Decision without the need to notify SGEIs schemes to secure full certainty. The EESC therefore suggests that the Commission remove the exemption threshold and include all SGEI, in the Decision regardless of the yearly compensatory amount, following the example of compensatory schemes for passenger transport (6).

3.2.

Setting a threshold according to the volume of aid involved thus triggering notification may have relevance for scrutiny at EU level, in particular in cases where granting the aid involves non-transparent modalities, such as fiscal rebates or exonerations, soft loans or public guarantees. Furthermore, the Decision provides that specific activities may require scrutiny due to competition concerns, thus allowing it to impose mandatory notification in order to address such cases. In any event, maintaining the current threshold set in Article 2(1)(a) of the Decision at such extremely low levels, imposes undue burden on authorities, with no visible advantage for enforcing competition. Therefore, the EESC would ask the Commission to confine the notification requirement to forms of aid or particular activities where potential distortions might warrant a closer view to ensure an even playing field.

3.3.

The EESC invites the EC to examine the possibility to broaden the scope of the Decision in order to make eligible services related to enhance people’s knowledge and qualifications and thus improve their job opportunities. Furthermore, there is a need to provide clarification in grey areas involving private involvement, where further guidance would be welcome.

3.4.

The Decision should ensure full compatibility with higher-ranking Community law and avoid undue burden for regional and local authorities. In particular, Article 8 requires the Member States to keep available during the entrustment period and at least 10 years from the end of that period all the information necessary to determine the compatibility of the compensation granted. This rule runs contrary to Article 17 of Council Regulation (EU) 2015/1589, which provides that on expiry of a 10-year period any aid granted cannot be recovered and therefore the Commission refrains from submitting it to the compatibility test as its usual practice shows. Preserving information for more than 10 years that serves no purpose for State aid control represents an undue burden for authorities and infringes the principles of proportionality and proper administration enshrined in the Treaty.

3.5.

Article 2(2) of the Decision applies to entrustments awarded for a maximum of 10 years, except for those SGEIs requiring a significant investment justifying a longer period. While Commission practice under the Framework interprets this rule generally as preventing entrustments exceeding that time limit, the wording of the Decision could imply that undertakings running a public service for a longer period might fall outside its scope. The EESC therefore requests that the Commission clarify the entrustments’ time limit should not have any material effect on their renewal or extension or on the eligibility of service providers running the remit. This issue is particularly sensitive in the case of publicly owned providers entrusted by their authorities, as their sole purpose is to provide the public service in question.

3.6.

Article 5(5), (7) and (8), concerning reasonable profit, should set a readily available method for calculating it. The current approach, similarly to that in the Framework includes methods such as the Internal Rate of Return that prove far too complex for local SGEI and thus discourage their use for calculating the compensation. Setting up profitability benchmarks involves costly consultancy services out of reach for most SGEIs. The EESC asks the Commission to clarify this issue, as Commission practice endorses the direct comparison with related sectors’ profitability based on available official or private data sources widely recognised as fully representative.

3.7.

Efficiency incentives, while lacking any definition, are taken into account in Article 5(6) thus requiring further clarification, in particular when addressing the requirement of sharing productive efficiency gains between the undertaking, the Member State and/or the users. The EESC asks the Commission to dispel any doubts about how to interpret this requirement.

3.8.

Article 6(2) of the Decision provides that any overcompensation should trigger an update of parameters for the future. Compensation not exceeding 10 % of the yearly average amount can nevertheless be carried forward to the next period. Full consistency would argue for no updating of the parameters in the latter case, avoiding a reappraisal that would entail legal uncertainty for designated providers in cases that do not affect competition. The EESC recommends that the Commission ensure a more flexible approach to minor overruns not exceeding 10 % of the yearly average compensation exempting them from updating the parameters.

3.9.

Any discriminatory treatment of local and regional authorities, and thus of the services of general economic interest provided at these levels, should be avoided. Currently, local and regional authorities have to submit their requests, answers and doubts through the official channel of their Member State, as only the latter can engage in a formal dialogue on State aid provisions with the Commission. Thus, the information issued by local and regional authorities for the attention of the Commission must be taken on board by the respective Member State. Therefore, the EESC invites the Commission to establish a more structured dialogue with local and regional authorities on State aid procedures and issues. State aid rules and requirements should also be adapted to the special needs and means available for regional and local authorities, thus ensuring fair and equal treatment in practice.

4.1.

The Framework sets out in detail the different requirements for ensuring compatibility in accordance with Article 106(2) TFEU and the case law interpreting it. While it provides ample explanation of the criteria applied by the Commission, it often adopts an overcautious stance that creates unnecessary problems and produces a degree of uncertainty. Commission practice shows that in many areas such difficulties have been overcome by applying a pragmatic interpretation of the Framework. Making specific references to these solutions would increase legal certainty and effectively reinforce equal treatment while preserving the principle that each case should be examined on its merits. The EESC therefore recommends that the Commission further specify the alternative ways of meeting the requirement that are already widely used in its practice. Such clarification would dispel many of the doubts authorities and providers currently face.

4.2.

Under the Treaty, conferring and defining a public service remit fall under the fundamental competence of Member States. Thus the references in point 13 of the Framework to the conditions that SGIs/public services should meet can only serve as useful guidance. However, the inclusion of these references may raise legitimate concerns about a potential limitation of the Member States’ powers. For, it is up to the Member States to decide, in the public interest, on the standards of ‘quality, safety, affordability, equal treatment, promotion of universal access and of user rights’ that each essential service should meet, regardless of its coverage by the market or a remit. The Member States also have the power to decide accordingly whether ensuring those standards requires a SGEIs/public service. The market conditions, while being highly relevant, cannot overrule or curtail on the authorities’ ability to defend the public interest. The EESC therefore suggests that the Commission limit its action here to a reference to its guiding Communication confining the scope of its assessment to checking the potential existence of manifest error, a matter ultimately falling within the remit of the Court of Justice.

4.3.

Point 14 of the Framework unduly places conditions on the powers of the Member States to grant a remit by requiring them to conduct public consultations to take into account the interests of users and providers, thus encroaching on national competencies that fall outside the Commission’s purview. While authorities always pay due attention to stakeholders’ interests, compelling them to justify the need for a remit and to conduct public consultations, or introducing alternative instruments, hardly fits with Treaty provisions and principles. The Commission’s practice shows that it pays limited attention to this rule, especially if the Member States face hurdles in enforcing it. The EESC therefore proposes that the Commission redraft this point so as to avoid mandatory requirements that might encroach on national law-making procedures, creating unwarranted problems.

4.4.

The requirement under point 19 of the Framework that entrustments comply with Union public procurement rules fails to take into account that secondary law in this field has experienced a thorough review following the 2014 procurement package. The Public Procurement Directive only applies, according to its Article 1(2), to acquisitions by contracting authorities and cannot impose a binding regime on SGEIs as they refer to tasks performed by an undertaking on behalf of the authority. Thus, any requirement under procurement law would run contrary to its governing directive. The 2014 procurement package also rules concessions for the first time. But it would be highly misleading to infer that SGEIs could fall under this regime: concessions imply that undertakings assume all the risk once the award has been granted, in sharp contrast with SGEIs, where the authorities cover the extra costs involved in running the service, thus minimising risk. Only where the authority chooses to apply concessional treatment to an SGEI would this regime would apply, but in these cases there would be no aid element, as the designated provider would bear all risk. Thus, neither procurement nor concessional rules would apply to SGEIs. Legally speaking, the Framework can only call on the Member States to implement, where applicable, the principles of transparency and equal treatment for selecting providers, in particular private ones, with no binding obligation being attached to this request. The EESC therefore asks the Commission to revise point 19 of the Framework to take due account of the new legal requirements as regards procurement and concessions.

4.5.

While point 22 of the Framework provides that the compensation can be based either on expected or on actually incurred costs and revenues, all too frequently Commission practice requires establishing the compensatory amounts ex ante. Such a calculation method, which prevents authorities from compensating ex post according to the effective net cost, seems an undue interference that could lead to unsolvable problems, since if the ex-ante amounts fail to cover the net cost, the provider would face systematic underfunding. Moreover, if the authority provides additional support to bridge this gap, it would in principle face potential penalties for breaching the conditions set in the authorising decision. Commission practice has largely overlooked this inconsistency except in cases when a claimant has raised the issue. While it seems appropriate to set ex ante the methodology for calculating the compensation, the ensuing, tentative amounts should not have any binding character. Only once the yearly results are available can calculation of the net cost and corresponding compensation take place. The EESC therefore calls on the Commission to ensure full consistency and compliance with the second Altmark criterion by coupling ex-ante methodology with full use of ex-post net cost calculation, unless the authority prefers to set the compensation at the time of entrustment.

4.6.

The Net Avoided Cost method for calculating the compensation is based on the assumption that in the absence of a public service obligation the designated provider would downgrade its activities and aim to maximise revenues. The conventional NAC method would mean the provider discontinuing all loss-making activities. The difference between this counterfactual scenario and the actual results of the service provider determines the amount of the compensation. The Commission has recently advocated the Profitability Cost (PC) approach, where the counterfactual would be discontinuation of activities that prevent the undertaking from maximising its results. The compensation thus covers not only the additional costs of the SGEI but also the less efficient activities, even if they are profitable. To trim compensatory payments, the Commission requires the market and non-material advantages enjoyed by the provider to be deducted from the compensation. The preference for the PC approach leads to de facto divergences in implementing a single principle, thus compromising legal certainty. The EESC recommends that the Commission endorse both approaches and provide further guidance on them in the Framework, which currently contains hardly any indication of how to establish the relevant counterfactuals.

4.7.

The cost allocation method seems the most appropriate one for most SGEIs, as its calculation is based on the difference between the costs of meeting the public service obligation and the corresponding revenues. Nonetheless, the Member States wanting to use this method must justify the reasons for discarding the NAC approach that is otherwise considered mandatory. Since the NAC involves a complex and costly analysis, external consultancy services often being required, the EESC recommends that the Commission recognise this method as a fully valid one, on the same footing as the NAC except for specific activities such as postal services where such methodology stands as the binding one, according to the Third Postal Directive.

4.8.

Point 32 of the Framework, on revenue, rightly includes the excessive profits generated from special or exclusive rights. Yet in recent practice this has included profits from universal provision even if they do not derive from such rights, thus leading to misleading assessments. It should be stressed that universal coverage implies a disadvantage because the designated provider is bound to service a given territory regardless of the costs incurred. Thus, should the provider perform this service on a profitable basis, Treaty principles would be breached if this surplus should finance on a mandatory basis other loss-making public service obligations. The EESC therefore asks the Commission to clarify this point and to draw a distinction between special or exclusive rights involving an advantage whose profit should be taken into consideration in financing public service obligations and universal coverage that involves a disadvantage for the designated provider.

4.9.

Reasonable profit as envisaged in the Framework raises some issues that need further clarification. While the Framework advocates using Internal Rates of Return, it recognises the inherent difficulty of applying this method. Thus, in practice the Commission compares firms from the same or a related sector using standard profitability criteria such as ROE or ROS. Yet the lack of certainty on this issue often leads to divergent results. The EESC therefore suggests that the Commission recognise all standard and well-established profitability criteria rather than making any given one mandatory. The EESC asks the Commission to provide further clarification on profitability standards and to allow the use of different ones rather than imposing a particular one on the Member States.

4.10.

The mandatory efficiency requirement under points 39 to 46 of the Framework is proving to be a formidable hurdle for stakeholders and authorities alike. As the Framework provides no clue on how to calculate the efficiency incentives, Commission practice allows widely divergent assessments, thus compromising the principles of legal certainty and equal treatment. The EESC therefore asks the Commission to clarify further the alternative ways of calculating these incentives, whose use should not be binding given the complexity involved.

13.10.2017   

EN

Official Journal of the European Union

C 345/52

1.1.

Digitalisation and robotisation in the field of the mobility of people and the transport of goods provide society with several potential benefits such as better accessibility and convenience for passengers, efficiency and productivity for logistics, improved traffic safety and reduced emissions. At the same time, there are concerns relating to safety, security, privacy, labour and the environment.

1.2.

While technology offers endless opportunities, progress must not be solely technology driven but aim at creating added value for society. Political debate — together with the proper involvement of civil society in transport planning processes, particularly in large urban areas — is therefore necessary.

1.3.

Realising digital transport requires solutions for existing bottlenecks, as well as integrated investments along the TEN-T network in transport, energy and telecommunication systems, including the deployment of 5G. EU funding instruments such as the Connecting Europe Facility, the EFSI and Horizon 2020 should support these undertakings.

1.4.

The digitalisation and robotisation of transport provide new business opportunities for both manufacturing and service industries, including SMEs, and could be an area of competitive advantage for the EU. To this end, the EESC calls for an encouraging and enabling business environment, including openness towards new business models and boosting the development of European digital platforms.

1.5.

The digitalisation and robotisation of transport will bring about profound changes in the nature of work and the demand for skills. The EESC highlights the importance of dealing with these structural changes by enhancing a fair and smooth transition and addressing the skills gap, together with the appropriate monitoring of progress. Social dialogue and informing and consulting workers play a key role in the transition process. Member States also have to adapt their education systems to respond to the new demand for skills.

1.6.

The digitalisation and robotisation of transport require the adequate availability, accessibility and free flow of data. At the same time, proper data protection has to be ensured. Increasing cybersecurity capabilities and tackling liability issues are also necessary in order to respond to new developments.

1.7.

The EESC stresses the intermodal character of digital transport, which touches the very heart of the EU’s transport strategy. It also implies close connections with other policy areas such as those relating to the digital single market, energy, industrial development, innovation and skills. As the goals and requirements of climate change mitigation act as one of the drivers of digital transport, there is also a close link with environmental sustainability.

2.1.

Digitalisation is expanding into all areas of the economy and society — transport being an area often used as an example. The purpose of this own-initiative opinion is to consider the developments and implications of the digitalisation and robotisation of transport from the point of view of society as a whole, including businesses, workers, consumers and citizens in general, and to put forward the EESC’s views on how these developments should be taken into account in EU policy-making, in order to seize the opportunities and manage the risks in a proper way.

2.2.

Much is already going on in the markets, as well as in different policy areas at national and EU levels. The EESC has also addressed this theme in its opinions, with regard to e.g. the future of the automotive industry (1) and the European strategy on Cooperative Intelligent Transport Systems, C-ITS (2), as well as Artificial intelligence (3).

2.3.

The digitalisation of transport takes several forms. At present, vehicles, aircraft and ships already use digital information in many ways, including technology and services supporting car driving, traffic control of trains, aviation and shipping management. The digitalisation of passenger and goods information is another area of everyday application. Thirdly, robots are commonly used in terminal operations in the area of freight logistics.

2.4.

Further automation and robotisation open up new opportunities for transporting goods and people, as well as for various kinds of monitoring and surveillance. Virtual robots, i.e. software robots play a central role here by enabling the increased use and connection of different information systems, allowing them to function as one interoperable unit.

2.5.

The automation of transport involves developing means of transportation with regard to their interaction with human beings, as well as with infrastructure and other external systems. Driverless and unmanned vehicles, ships and airspace systems that are fully autonomous, i.e. that function independently, are the final step in this development.

2.6.

At present, driverless cars are being developed by several car manufacturers and tested in practice. Driverless metros have already been introduced in many cities while driverless buses and platoons of trucks are being tested. The use of unmanned aircraft systems or drones is rapidly increasing and even remote-controlled and autonomous ships are being developed. In addition to vehicles, aircraft and ships, new kinds of infrastructure solutions and traffic control systems are being explored.

2.7.

Although steps towards autonomous and unmanned transport are being taken, the basic structures are still based on people as the main actors. The most remarkable implications are to be seen when fully autonomous and unmanned transport is a reality. Prognoses on when this will happen vary significantly. However, it is important to prepare for the future and make the necessary decisions in good time.

2.8.

Digitalisation also enables passengers and other transport users to benefit from a new kind of Mobility as a Service (MaaS) concept through digital platforms.

2.9.

The ongoing development of MaaS seeks to respond better to market demand by combining the reservation, purchase and payment systems of transport chains and providing real-time information on time-tables, weather and traffic conditions, as well as available transport capacity and solutions. MaaS is thus the user’s digitised transport interface. At the same time, it aims at optimising the use of transport capacity.

2.10.

The rapid development of technology such as big data, cloud computing, 5G mobile networks, sensors, robotics and artificial intelligence — especially with its learning capacities such as machine learning and deep learning — is the key enabler behind the developments in digital and automated transport.

2.11.

It is, however, obvious that one cannot proceed successfully if the progress is solely technology driven. Ideally, the development should be based on societal demand. On the other hand, it is often difficult for citizens to see the opportunities that the new developments provide.

3.1.

Digital development creates conditions for intermodality and thus contributes to the system approach in transport. It also means that the transport system has several new elements in addition to the traditional infrastructure.

3.2.

The foundation of the system, however, still remains: roads, railways, harbours and airports. Besides these basic elements, an advanced digital infrastructure is needed, covering mapping and positioning systems, different kinds of sensors for data generation, hardware and software for data processing, and mobile and broadband connections for data distribution. Automated traffic management and control systems are also included under digital infrastructure.

3.3.

As both the digital and digitised infrastructure require electricity, and given the interaction between smart electric grids and electric vehicles, electricity infrastructure is also a key element of the transport system. Finally, new services and infrastructure are needed to allow access to traffic information as well as the booking and payment of mobility services. The system, from physical infrastructure to physical transport services, is therefore linked by different kinds of digital elements.

3.4.

Despite rapid developments, there are still several bottlenecks hindering progress towards digital transport systems which must therefore be overcome. These include, for example, shortages in the availability and accessibility of data, the lack of fast internet connections, and technical limitations relating to sensors and real-time positioning.

3.5.

The EESC calls for investment in technology and infrastructure on which digital transport can be built, in particular traffic management and control systems: SESAR (Single European Sky ATM Research) and ERTMS (European Railway Traffic Management System) are projects that are already at a mature stage but which lack substantial financial resources. VTMIS (Vessel Traffic Management and Information System) and C-ITS still need to be developed. Furthermore, 5G connections have to be made available along the TEN-T core network. EU funding instruments such as the Connecting Europe Facility, the European Fund for Strategic Investments and Horizon 2020 should prioritise these undertakings.

3.6.

The interoperability of digital systems is also necessary in order to enable cross-border connectivity both domestically and internationally. The EU should strive to be the forerunner and standard-setter in this field.

3.7.

The EESC stresses that digitalisation does not remove the need for investments in basic transport infrastructure, although it optimises the use of the existing capacity. Furthermore, during the transition period, partly automated and fully autonomous vehicles and vessels move together, which has to be taken into account in road and maritime infrastructure. New challenges have also emerged in aviation due to the deployment of drones.

3.8.

The EESC encourages the development of traffic management systems and common rules for drones at the EU level and internationally at the ICAO. Furthermore, the development of rules is needed at the IMO in order to enable the development and introduction of remote-controlled and autonomous shipping, including in ports.

4.1.

Digitalisation and robotisation bring about increased efficiency, productivity and safety for freight transport and logistics. New business opportunities also emerge for manufacturing and service industries with regard to automation and robotics, services for citizens’ mobility, solutions for more efficient logistics, or the digitalisation of the whole transport system. This holds true both for big companies and small and medium-sized enterprises, including start-ups.

4.2.

Taking into account that EU companies are leaders in many fields related to digital transport, it could well be an area where a competitive advantage could be developed. As a lot is happening outside the EU with regard to the development of digital and autonomous transport, the EU also has to strengthen its efforts in the fields of innovation, infrastructure and the completion of the single market, including adaptation of the legal framework to new operating conditions.

4.3.

There is also a need for openness towards the development and introduction of new kinds of business models, based on digital platforms. In order to enhance the creation of European platforms it has to be ensured that enabling and supporting conditions are in place and that the regulatory framework provides businesses with a level playing-field.

4.4.

The digitalisation and robotisation of transport is primarily based on data management as in any other sector. From a business point of view, data can be considered as a production factor or raw-material to be processed and refined to create added value. To this end, the free flow of data is essential. The EESC therefore calls for effective solutions that eliminate the problems associated with the accessibility, interoperability and transfer of data, while securing adequate data protection and privacy.

4.5.

The EESC considers it important to open up and facilitate access to transport and infrastructure related mass data, generated by the public sector, for all users. In addition, clarifications and rules are needed for the management of non-personal data, notably data generated by sensors and intelligent devices. In assessing the questions of data accessibility and reuse, it is useful to note that in general, it is not the data itself that brings a competitive advantage but rather the tools, innovation resources and market position for refining it.

4.6.

To develop and gain experience in digital and autonomous transport, the experimentation with and piloting of new technologies and concepts must be facilitated. This requires functioning innovation and business ecosystems, adequate test-beds and an enabling regulatory framework. The EESC calls on the authorities to adopt an approach that stimulates innovation instead of applying detailed rules and requirements that hamper development.

5.1.

The implications of the digitalisation and robotisation of transport for labour are obviously the same as they are in other fields. New concepts and processes may result in jobs losses, while new jobs can be generated by new products and services.

5.2.

The most significant changes may take place in the transport and logistics sector itself but implications for employment may also be seen in the related manufacturing sectors, as well as in supply chains and regional clusters.

5.3.

With the deployment of unmanned transport, the demand for transport personnel will decrease. The same holds true for the implications of the increasing use of robotics for physical labour in terminal operations. Some of the jobs may be replaced by control and monitoring tasks but over time these tasks may also diminish. At the same time, new jobs may be created in other sectors, particularly in sectors related to information and communication technologies, digital services, electronics and robotics. Furthermore, while physical work and routine tasks diminish, the role of problem-solving and creative tasks grows.

5.4.

The change in tasks also implies a considerable change in the market demand for skills. There is an increasing demand for high-skilled cyber-professionals such as software developers. On the other hand, there is an increasing need for the practical skills associated with using robotics and acting in human-robot cooperation systems. In addition, the significance of professionals with broad-based competences will grow.

5.5.

The EESC highlights the importance of dealing with these structural changes in a proper way, by preparing strategies on how to ensure a fair and smooth transition, decrease negative social impacts and respond to the skills gap, combined with the appropriate monitoring of progress. Social dialogue and informing and consulting workers at all levels play a key role in the transition process.

5.6.

There are both immediate and long-term needs for training and education. Member States have a decisive role in responding to the new skills demand by adapting their education systems, and good practices should be shared at the European level. A strong focus on science, technology, engineering and mathematics is required, while taking into account that the demand for creating new solutions also requires wide competences with education in arts and social sciences.

6.1.

It seems that citizens are not largely aware of the kinds of opportunities that digitalisation and robotisation provide e.g. for the accessibility and convenience of mobility, while the perception of safety, security and privacy turn out to be the main concerns. More knowledge and communication on the pros and cons is necessary, together with the proper involvement of civil society in transport planning processes at local level, particularly in large urban areas.

6.2.

Advanced automation obviously increases the safety of transport due to the decrease in human error. On the other hand, new safety risks may emerge due to limitations in the shape recognition ability of sensors, potential malfunction of devices, internet disruptions and new kinds of human error such as software bugs. However, the net effect is assessed as being clearly positive.

6.3.

As increasing concerns are emerging with regard to cybersecurity, this will be one of the core elements of transport security. Cybersecurity involves vehicles, aircraft and ships but also the infrastructure that supports, manages and controls them.

6.4.

The introduction and deployment of unmanned and autonomous transport also raises the issue of traffic rules, especially those relating to ethical aspects. As transport is a cross-border function, traffic rules should be harmonised in the internal market, with the aim of further harmonisation at the international level.

6.5.

With fully autonomous transport, new questions regarding liabilities also arise. This is also reflected in the development of insurance systems. The main challenge may be the factual establishment of liability in the event of an accident, given the role of digital systems and the involvement of several actors such as the manufacturers and owners of vehicles, and the managers of the infrastructure. This may require increased data storage in order to establish the circumstances of the accident. The EESC therefore calls on the Commission to investigate possible data collection frameworks and requirements for liability purposes, while bearing in mind the need for privacy.

6.6.

As for privacy and increasing data needs, people are concerned about whether they are constantly being monitored. The use of shape recognition also raises privacy concerns. With regard to the protection of personal data, the General Data Protection Regulation (GDPR) will be applied as of 2018 with the aim of providing a single set of rules for the entire EU. The EESC has drawn attention to the importance of privacy and data protection in its previous opinions and stresses that data should only be used for purposes relating to the operation of the system and should not be kept for other ends.

7.1.

The climate-related and environmental impacts of transport are dependent on many factors. Improving the energy efficiency of vehicles, aircraft and ships is one of the key measures to decrease emissions. Energy efficiency generally goes hand in hand with the automation of functioning and control systems.

7.2.

The replacement of fossil fuels with low-carbon fuels, electricity or hydrogen is another key means of reducing emissions. Although a separate process, the deployment of electric vehicles and the roll-out of smart electric grids are closely connected to the automation of transport.

7.3.

Measures that increase traffic flow also have a significant role to play in reducing emissions. Digitalisation and automatisation enable smooth transport and efficient multi-modal transport chains. This means greater transport efficiency, greater energy efficiency, lower fuel consumption and fewer emissions. To this end, high quality infrastructure and smooth border crossings are also of the utmost importance. Furthermore, land use and urban planning have an effect on the need and flow of traffic.

7.4.

The environmental impacts are not only related to transport itself but also to the life-cycle of vehicles, aircraft and ships from manufacturing to end-of-life. The reshoring of manufacturing and the deployment of the circular economy approach are phenomena that contribute to decreasing life-cycle impacts.

7.5.

Autonomous transport may lead to greater use of private cars due to the increased convenience for passengers. On the other hand, car-sharing — together with the use of public transport — is supposed to decrease the amount of private cars. Consumer preferences thus play a decisive role in the future of mobility. They may be influenced by providing readily available journey-planning facilities that encourage people to make environmentally-friendly choices. Appropriate pricing incentives may also have a role in influencing consumer behaviour.

13.10.2017   

EN

Official Journal of the European Union

C 345/58

Rapporteur:

Miguel Ángel CABRA DE LUNA

1.1.

The social economy is a key player and helps to achieve the objectives of all European policies with an external dimension: external and security policy, trade policy, neighbourhood policy, climate change policy, development cooperation and sustainable development policy. However, the lack of an appropriate regulatory environment, at both European and national level, prevents this sector from developing its full potential and maximising its impact.

1.2.

The Partnership Instrument for Cooperation with Third Countries (1), which is aimed at developed and developing countries, could provide an opportunity for the social economy of the European Union (EU) in its process of developing its international dimension, fostering competitiveness, innovation and research.

1.3.

The EU plays an important role in efforts to eradicate poverty and boost economic and social development at global level, which is reflected in the EU’s Post-2015 Agenda and the approval of the 2030 Agenda for Sustainable Development of the United Nations (UN).

1.4.

The European Economic and Social Committee (EESC) welcomes the fact that in the Post-2015 Agenda the Council underlines the importance of ‘the social economy to job creation and sustainable development’, which opens up new opportunities for boosting the external dimension of the social economy (point 43 of the Post-2015 Agenda), but regrets that the Commission has not included the social economy in its proposal for a new European Consensus on Development.

1.5.

Given the business successes observed in various non-EU countries, it is clear that the social economy, in its various business forms, is prominent in the everyday life and productive activity of large regions of Africa, America and Asia and makes a major contribution to improving the living and working conditions of millions of people.

1.6.

Among the various forms that social economy enterprises take in these regions, the Committee underlines the leading role of, among others, cooperatives and mutual undertakings, which are very numerous and play an active role in agricultural production, finance and microfinance, the supply of clean water, housing, labour market integration of people with disabilities, the reduction of informal work through collective entrepreneurship initiatives in the social economy, youth employment and women’s rights, which is playing an increasingly important part in the productive activity of cooperatives and mutual undertakings.

1.7.

In addition to cooperatives, mutual benefit societies and other partnership-based social economy enterprises of a similar nature, the EESC underlines the important role of non-profit entities, associations and foundations known as NGOs, all of which form an integral part of the social economy under the ‘social action third sector’. These NGOs manage social assistance, health and education services among others, and even promote social economy entrepreneurship initiatives among the local population.

1.8.

The Commission has recognised the important role that social economy enterprises (SEEs) can play in the development of the circular economy, to which they can make an ‘essential contribution’ (2). In Europe, there are many examples of good practice in this area, where SEEs can play a substantial role in the investments in renewable energies in Africa planned under the European External Investment Plan (EEIP). SEEs make a significant contribution to sustainable economic growth, thus reducing their negative environmental impacts.

1.9.

Without prejudice to the work of ethical banking, traditional financing instruments do not work for SEEs, which require instruments specifically adapted to them. The EESC therefore finds it regrettable that, despite their undeniable role in meeting the Sustainable Development Goals (SDGs) and their socioeconomic importance, SEEs are not systematically considered to be an actor as such in EU programmes designed to boost the international dimension and external promotion of business, and development cooperation programmes. Furthermore, the EEIP and the European Fund for Sustainable Development (EFSD) do not provide for any line of financing specifically for SEEs.

1.10.

For example, the renewal of the Cotonou Partnership Agreement (CPA) will affect more than 100 countries in Africa, the Caribbean and the Pacific (ACP), with a total population of 1,5 billion people. The CPA is due to be renewed in 2020 and negotiations should begin by August 2018 at the latest. It is surprising that the abovementioned communication, based on the UN’s 2030 Agenda and the EU Global Strategy on Foreign and Security Policy, does not mention the social economy among the non-state actors involved in the partnership. This comes under the general heading of ‘civil society, economic and social partners and the private sector’ (point 4.3.3 of the communication).

1.11.

Trade policy is one of the pillars of the EU’s external action. Organised civil society is involved in the EU’s various agreements with other countries and regions around the world (trade, association and economic partnership agreements) through the joint consultative committees (JCCs) and domestic advisory groups (DAGs) set up under those agreements. Although the social economy is included in several of these agreements, the EESC recommends that it take on a broader role and become a fixed component in all of them.

1.12.

Both the EFSD and the EIB should work together to establish a financial ecosystem specifically for SEEs, as called for in the EESC opinion (3). In addition, the EEIP’s technical assistance and development cooperation programmes should provide for the promotion of cooperative digital platforms. The digital economy is opening up new areas of action and development for SEEs. For example, the collaborative economy enables the creation of not-for-profit platforms (platform cooperativism) and the development of activities of great interest for the social economy’s external dimension, such as collaborative production, collaborative finances (crowdfunding or peer-to-peer lending), collaborative governance and collaborative learning. In the latter case, learning via cooperative platforms can be important for the on-site training of social economy entrepreneurs in neighbouring countries and the south, strengthening crucial human capital in those countries.

1.13.

The EESC endorses the recommendation of the Expert Group on Social Entrepreneurship (GECES) that the role of SEEs in EU external policy be strengthened. In this connection, the Commission and the European External Action Service (EEAS) must coordinate their policies and initiatives with a view to:

1.14.

The Commission and the social economy should facilitate the involvement of the G20 and the G7 in promoting specific policies to support the social economy (as discussed in the G20 Inclusive Business Framework), to better reflect the differences in the set of values, principles and raison d’être between these organisations (GECES Recommendation 12).

1.15.

The role of the social economy in international forums (UNTFSSE, ILGSSE, G20, G7, ILO etc.) and cooperation with international financial organisations should be promoted via economic diplomacy.

1.16.

The EU must ensure that, when trade agreements are negotiated, SEEs are not discriminated against compared to other businesses, by eliminating non-tariff barriers, which are in effect the cause of the discrimination.

1.17.

Both the European Neighbourhood Instrument (ENI) and other financial instruments must contribute in a systematic way to the promotion of the social economy, both in the accession negotiations with candidate countries for EU membership, and with other neighbouring countries that are beneficiaries of preferential agreements.

1.18.

The Commission must strengthen its leadership role in international cooperation and in boosting and recognising SEEs as key private sector players in achieving the SDGs and part of the EU’s external agenda. To this end, the activities of the various departments of the Commission and of the EEAS will need to be coordinated and joint development cooperation programmes set up with other international financial organisations such as the World Bank, the Organisation for Economic Cooperation and Development (OECD), the African Development Bank, the Asian Development Bank and other public and private entities seeking multilateral and even local investment, creating incentives to make these funding channels work. SEEs should form an immediate, effective and generalised part of the EU’s ‘economic diplomacy’. The Commission should strengthen cooperation ties in the field of the social economy with international organisations (UN, ILO, OECD, etc.).

1.19.

The Commission should specifically include the social economy sector as an EU business stakeholder in initiatives for access to third markets, in all development cooperation programmes and in the implementation of the Post-2015 Agenda, establishing specific indicators and objectives for cooperatives and other similar social economy enterprises. In particular, it is important for the Commission and the High Representative of the Union for Foreign Affairs to specifically include the social economy as one of the non-state actors in the next CPA and to include lines of funding specifically for SEEs in the EEIP and the EFSD.

1.20.

In order to contribute to the monitoring and revision of the SDGs, the exercise should include a periodic report on the partnership policies between States and other public authorities and the social economy, including cooperatives, which are crucial for the implementation of the SDGs. States should also be encouraged to produce data and statistics.

1.21.

The Commission should facilitate the inclusion of the social economy in the structured dialogue it intends to promote with the European and African private sector within the framework of a Sustainable Business for Africa (SB4A) platform.

1.22.

The Commission should encourage preferential support for circular economy SEEs, which have achieved notable successes in Europe and which can be significant players in sustainable growth in countries outside Europe, creating many jobs for young people and women in local areas.

1.23.

The Commission and the Member States must promote the participation, consultation and coordination of their external entrepreneurial and development cooperation activities with the bodies representing the social economy at European and national level, as well as with those of partner countries, and with international social economy organisations with a North-South and South-South dimension. The EESC reiterates its call (4) for the creation of a European Sustainable Development Civil Society Forum to promote and monitor the implementation of the 2030 Agenda, with the key players being the Council, Commission, Parliament, the representative bodies of the European social economy and the rest of civil society.

1.24.

The Commission’s technical assistance and development programmes must provide for the participation of networks of organisations representing the social economy as intermediaries and strategic stakeholders in implementing investment and cooperation programmes in neighbouring and developing countries, and must support governments so that they promote an institutional environment favourable to SEEs. The southern Mediterranean and the Balkans are an absolute priority.

1.25.

The Commission and the EEAS should develop a way of identifying the different categories of SEEs in third countries, and promote the establishment of an appropriate legal framework that enhances the visibility of all SEEs. Given that this will be a complex process extending into the medium/long term, emphasis should be placed on cooperatives and mutual undertakings. These are present throughout the world, with a clear legal framework, present in all branches of productive activity and with a system of values and governance that underpins the entire social economy, enabling them to be identified as the backbone of the social economy.

1.26.

In order to achieve the aims advocated in this opinion, the EESC urges the European Commission to act swiftly on its commitment to do more to raise inter-departmental awareness of the social economy through internal briefings for the relevant DGs and EU delegations in third countries.

2.1.

The two top priorities of the EU Global Strategy on Foreign and Security Policy are the EU’s security and investment in the resilience of states and societies to the east and south of Europe, towards Central Africa. The social economy can play important roles in fostering inclusive development and sustainable growth as part of the implementation of these priorities and the European Neighbourhood Policy (ENP).

2.2.

The ENP, which covers the countries to the east and south of Europe, and its financial instrument, the ENI, are key to fostering relations with the 16 countries concerned — six eastern European and ten southern Mediterranean countries, with the EU earmarking EUR 15,4 bn for their development in the 2014-2020 period.

2.3.

Between 2016 and 2020, the EEIP, via the EFSD, will promote investments worth between EUR 44 bn and EUR 88 bn in Africa and the EU’s neighbouring countries, with public sector bodies and private sector investors considered to be eligible counterparts for investment projects.

2.4.

International trade is one of the pillars of the new Europe 2020 strategy aimed at making the EU more competitive and environmentally friendly. The Free Trade and Investment Agreements promoted by the EU can contribute to more dynamic economic growth in the EU, given that 90 % of future global growth will take place outside Europe. The EU should ensure that, when trade agreements are negotiated, SEEs are not discriminated against compared to other businesses, by eliminating non-tariff barriers, which are in effect the cause of the discrimination. The European social economy should make use of these agreements to boost the international dimension of its businesses, both in the neighbouring countries to the east and south of Europe and in the rest of the world.

2.5.

The EU plays an important role in efforts to eradicate poverty and to promote economic and social development at global level. The official development aid provided by the EU and the Member States amounted to EUR 68 bn in 2015 (5) and the EU provides more than 50 % of all global development aid.

2.6.

At its meeting on 26 May 2015, the Council approved the EU’s position on the new Post-2015 Development Agenda (A New Global Partnership for Poverty Eradication and Sustainable Development after 2015). The Post-2015 Agenda was championed by the EU at the UN General Assembly in September 2015, which adopted the 2030 Agenda for Sustainable Development. In the Post-2015 Agenda, the Council underlines the ‘importance of micro, small and medium-sized enterprises and enterprises of the social economy to job creation and sustainable development’ (point (43)).

3.1.

SEEs are made up of a large number of stakeholders with a core identity and with shared principles and values of behaviour, an identity that characterises them as free and voluntary bodies. These entities are based on systems of democratic and participatory governance and are created by civil society with the primary objective of using solidarity-inspired criteria to meet and address the needs of the people and social groups they represent, rather than remunerating external investors (6). It should be pointed out, for example, that German cooperatives have been recognised by Unesco as being part of the intangible heritage of humanity.

3.2.

The stakeholders that make up the social economy are well defined and clearly specified by the EU institutions, as well as by the social economy’s own key players and in the academic literature. Particularly significant here are the European Parliament Resolution on Social Economy (2008/2250(INI)) of 25 January 2009; the Manual for drawing up the satellite accounts of companies in the social economy: cooperatives and mutual societies, promoted by the European Commission (2006); the opinions of the EESC (7) and the Committee’s report on The Social Economy in the European Union  (8). All of the above are similar in that they identify the social economy as being made up of a range of businesses and entities ‘based on the primacy of people over capital and include organisational forms such as cooperatives, mutual, foundations and associations, as well as newer forms of social enterprises’ (Conclusions of the Council of the European Union of 7 December 2015 on The promotion of the social economy as a key driver of economic and social development in Europe) (9).

4.1.

The social economy can play a very important role in the EU’s external action. The history of the social economy is a success story, not only in Europe but also in many southern neighbouring countries and broad regions of Africa. This is stressed by ILO Recommendation 193 of 20 June 2002 on the promotion of cooperatives, regarding them as one of the pillars of economic and social development which, through their values and systems of governance, promote the fullest participation by the whole population in this development, strengthening stability, trust and social cohesion.

4.2.

The Commission and the Council have stressed on several occasions the importance of cooperatives and the social economy in EU external action. For example, the Commission’s communication of 12 September 2012 (‘The roots of democracy and sustainable development: Europe’s engagement with Civil Society in external relations’) underlines the role of cooperatives as important civil society stakeholders ‘particularly active in promoting entrepreneurship and job creation by mobilising grassroots communities’. For its part, in the Post-2015 Agenda the Council confers on the social economy a significant role in job creation and sustainable development (paragraph 43 of the Post-2015 Agenda).

4.3.

The two top priorities of the EU Global Strategy on Foreign and Security Policy are the EU’s security and investment in the resilience of states and societies to the east and south of Europe, towards Central Africa.

4.4.

The ENP is a key element of meeting the priorities set out in the EU Global Strategy on Foreign and Security Policy. According to this strategy, one of the external action priorities is to invest in the resilience of states and societies to the east and the south of Europe, towards Central Africa, for the benefit of countries both within and outside the ENP.

4.5.

The consolidation of resilient states in the European neighbourhood — a priority of the EU’s external action — cannot be ensured without strong, cohesive and resilient societies. Based on businesses created by people for people, the social economy is a vibrant expression of civil society. SEEs are the fruit of citizens’ collective entrepreneurship initiatives which integrate economic and social objectives into a common project, making individuals responsible for, and actors in, their own destinies, and allowing them to improve their living conditions and be hopeful about the future. This is the best guarantee of strengthening resilient states to the east and south of Europe, in other countries within and outside the ENP, as pointed out in the EU Global Strategy on Foreign and Security Policy. And it is the best guarantee of ensuring the sustainability and long-term success of the first of the five overarching priorities of the EU’s external action — security of our common home, Europe — and thus of preventing radicalisation.

4.6.

Finally, the external dimension of the social economy can be extremely useful in creating jobs with rights in countries where there are high shadow economy rates or in countries undergoing a change of economic model. It can also help avoid the closure of businesses by enabling workers to take charge of them themselves, under a legal and organisational cooperative framework.

5.1.

Trade policy is one of the pillars of the EU’s external action. Organised civil society is involved in the EU’s various agreements with other countries and regions around the world (trade, association and economic partnership agreements) through the JCCs and DAGs set up under those agreements. The EESC recommends that the social economy, which already participates in a number of these agreements, should become a fixed component of all of them and proposes that this be used to draw on the experience of the social economy, in the sustainable development chapters of the agreements, to create enterprises with the values and characteristics of the social economy. And social economy organisations should regularly be represented in the membership of the civil society DAGs provided for by these chapters and in the business missions promoted by the Commission in third countries.

5.2.

The participation of the social economy in the JCCs and DAGs can help strengthen the knowledge, ties and cooperation of the social economy between different regions, as is already the case, for example, between the EU social economy and its relevant counterparts in Latin America and the southern shores of the Mediterranean.

5.3.

Through the ENI, the ENP earmarked EUR 15,4bn for the 2014-2016 period in order to achieve its objectives. The EEIP (10) which provides an overall framework for increasing investment in Africa and the EU’s neighbouring countries, can be a suitable instrument for promoting the social economy in these geographical areas.

5.4.

The 5th Africa-EU Summit will be held in November 2017 and will reformulate and further develop the Africa-EU partnership (11). The Commission should facilitate the inclusion of the social economy in the structured dialogue it intends to promote with the European and African private sector within the framework of a Sustainable Business for Africa (SB4A) platform.

5.5.

The Commission has recognised the important role that SEEs can play in the development of the circular economy, to which they can make an ‘essential contribution’ (12). In Europe, there are many examples of good practice in this area, above all in the field of renewable energies.

5.6.

By virtue of their characteristics and values SEEs can play a significant role in the investments in renewable energies in Africa planned in the EEIP, on the basis of the competitive advantages arising from better management of resources and raw materials and local connections, which make it possible to create new local jobs, especially for young people and women. Preferential support for circular economy SEEs will facilitate more sustainable economic growth, reducing negative environmental impacts by improved management of resources and reduced extraction and pollution.

5.7.

The Partnership Instrument for Cooperation with Third Countries (13), which is aimed at developed and developing countries, could provide an opportunity for the social economy of the EU in its process of developing its international dimension, fostering competitiveness, innovation and research.

5.8.

As has been pointed out many occasions, the rationale of the financial market does not lend itself to supporting SEE development. Traditional financial instruments do not work for the SEEs, which need instruments specifically adapted to them. Therefore, the true potential of SEEs can only be tapped if access to financing is incorporated into an adapted and fully integrated financial ecosystem (14).

5.9.

The GECES has also highlighted the need for the Commission to earmark ‘dedicated direct and indirect funding for social economy organisations, including social enterprises, in third countries, along with governments and support and social finance organisations’ (Recommendation 13 of the GECES report on ‘Social enterprises and the social economy going forward’).

5.10.

In this connection, both the ENI and other financial instruments should contribute in a systematic way to the promotion of the social economy, both in the accession negotiations with candidate countries, and with other neighbouring countries that are beneficiaries of preferential agreements.

5.11.

A number of external initiatives have recently been launched by the Commission, such as the framework partnership agreement between the European Commission and the International Cooperative Alliance to promote the cooperative sector worldwide, for implementation between 2016 and 2020 under a programme with funding totalling EUR 8 million. However, both the ENP and the Global Strategy on Foreign and Security Policy overlook SEEs and fail to specifically include them as business actors in the EU’s external policies and programmes, and do not provide for any lines of financing specifically for SEEs among the substantial funds allocated to the EEIP and the EFSD, nor are they included in any of the actions to promote the international dimension of European businesses.