16.12.2014   

EN

Official Journal of the European Union

C 451/1

Rapporteur:

Panagiotis Gkofas

Co-rapporteur:

Luis Miguel Pariza Castaños

1.1

The purpose of this opinion is to feed into the work of the Greek presidency, and also to give continuity under the Italian presidency, to ensure that the external dimension of the EU's immigration and asylum policy is strengthened. Immigration is a particularly complex issue that calls for cooperation between many stakeholders and joint, comprehensive management by the EU, at both international and European levels (1).

1.2

The EU has to stop treating immigration policy as an almost exclusively internal matter. It is this erroneous idea that lies at the root of some of our mistakes. The EESC considers that Europe should manage immigration as part of a global approach that embraces both internal and external aspects: internal management of migration flows and cooperation with third countries must be seen as components of a single policy, if it is to be effective.

1.3

We must also adopt a global approach to the challenge of human mobility in a globalised economy. Immigration and mobility are closely interlinked. International dialogue on the mobility of people and migration should tie in with other aspects of European policy such as trade, development cooperation, human rights and security.

1.4

As EU Member States cannot adequately manage immigration and asylum individually, the Treaty lays the foundations for a common policy that must be established on the basis of harmonised legislation. The principle of solidarity and fair sharing must be strengthened.

1.5

The EU must take responsibility for monitoring its external borders, which are the borders of the entire European Union in the Schengen area. Frontex should become an European border guard service. The EU should increase solidarity between the Member States and improve the sharing of responsibilities.

1.6

Some European regions face specific problems because of their geographical location as they are mid-way points for irregular immigration and sometimes receive more immigrants than they can cope with. The European Union should put in place procedures for better sharing responsibilities, and for the provision of financial, operational and reception support.

1.7

In a globalised world, Europe must work together with third countries and the international institutions to promote an international legal framework for migration and mobility.

1.8

Here, the EESC believes that immigration must be addressed in three inter-related locations: in the immigrants' countries of origin, in transit countries and in the countries of destination, in this case the EU, as only in this way will it be possible to address migration flows effectively.

1.9

Immigration and asylum policy needs to be better coordinated with the EU's external policy. The European External Action Service (EEAS) should carry out its role and cover immigration, border and asylum policies, in order to ensure greater consistency. The EESC, which has contributed to the work of the Greek presidency, welcomes the inclusion of the external dimension of migration, asylum and border management in the strategic guidelines to adopted by the European Council on 26—27 June 2014. The European Parliament should also be given a greater role in these matters.

1.10

Under a Global Approach to Migration and Mobility (GAMM), the EU should conclude agreements with third countries, especially neighbouring countries, immigrants' countries of origin and transit countries.

1.11

The Committee proposes that, to this end, dialogue be stepped up with these countries, with a view to concluding new mobility and migration partnerships with broader content, as set out in points 1.3 and 5.1.6.

1.12

Mobility partnerships have a number of limitations that will need to be overcome in the next few years, because they are not binding on the contracting parties. Their flexibility helps secure political agreements without imposing legal obligations, but in the EESC's view, they should be converted into binding international agreements.

1.13

Mobility partnerships' priorities should include aspects relating to economic migration and mobility: in addition to security, repatriation and border surveillance, greater priority should be given to the organisation of legal migration and visa policy, recognition of qualifications, social security rights, and migration and mobility's contribution to development.

1.14

The EESC proposes setting up EU migration offices in countries of origin, run by the European Commission and staffed by officials from the EEAS, DG HOME and DG EMPL. The EU's immigration web portal is a useful but inadequate tool. It should be available in more languages and be more interactive.

1.15

Cooperation needs to be improved with countries of origin and transit and irregular migration must be anticipated and prevented. Information campaigns also need to be launched, and criminal networks illegally trafficking or smuggling migrants effectively tackled. Police and judicial cooperation is crucial to the fight against criminal networks. In order to make their unlawful profits, traffickers and smugglers endanger people's lives and safety. Mobility partnerships should develop new forms of cooperation on border surveillance and on assisted return.

1.16

Equally crucial are financial assistance and development programmes based on the positive conditionality principle (more for more), simultaneously addressing the various factors involved in immigration, including a return and readmission policy. Similarly, it is important to strengthen civil society organisations and their involvement in the mobility partnerships.

1.17

The EESC also advocates cooperation between Frontex and Europol to combat organised crime, particularly trafficking and smuggling of migrants and close cooperation with human rights organisations, such as the Ιnternational Organisation for Migration, the United Nations High Commission for Refugees (UNHCR) and the International Centre for Migration Policy Development. Equally, the EESC supports the Commission's Regulations for more flexible management of the Asylum and Migration Fund and the Internal Security Fund from 2014 onwards.

1.18

At EU level, an appropriate and cohesive common European policy on immigration should be established, and based on the mutual support and commitment of all Member States. The EU must adopt an effective return policy based on international treaties pertaining to repatriation and readmission. The EU's borders, including the sea borders of the Mediterranean EU Member States, are the borders of all EU Member States and, this being the case, it is the responsibility of all Member States actively to ensure their protection, in accordance with the treaties.

1.19

The human rights of irregular immigrants should be respected at all times, during their rescue or reception, until they acquire protection status, when they are in an irregular situation ‘without papers’ or when being sent back to their countries of origin. Additional and better temporary residence and reception centres for immigrants should be established in all Member States, with support from the entire European Union, taking into account conditions regarding health and medical assistance provision, as well as faster examination of asylum or social assistance applications. The EESC reiterates its opposition to holding asylum seekers and irregular immigrants in detention centres, especially children, minors who are unaccompanied, pregnant women and those with serious illness.

1.20

The Committee is concerned to note that intolerance, racism and xenophobia towards immigrants are on the rise in Europe and is also alarmed because in some Member States the protection of people's fundamental rights is being eroded.

1.21

All Community institutions have reiterated immigration's importance for the EU, for reasons of both economics and demography. The Europe 2020 strategy also makes this point. As the EESC has repeatedly stated, European immigration policy must therefore be proactive and protect human rights, combat labour-related and social discrimination and further develop the integration agenda.

1.22

The EU should set up a common asylum system based on harmonised legislation. The Dublin Convention should be replaced with a more inclusive system within the EU that takes account of asylum seekers' wishes and that ensures a more proportionate distribution of responsibility among the Member States.

1.23

The new regulation on the Asylum, Migration and Integration Fund focuses particularly on emergency and crisis situations. The EESC agrees with the Commission's proposal to ensure that the EU has the capacity to act flexibly, with sufficient financial resources to tackle emergencies. The arrival of many people from Syria and other war zones in Africa means that the EU has to take action, because these are humanitarian emergencies.

3.1

In the 21st century, both migration flows and people's mobility will increase. Currently, only 3 % of the world's population live outside their country of birth, but trends suggest that these movements will grow in future (the annual growth rate stands at 3 %). It should be pointed out, furthermore, that migration flows are increasing between the countries of the South, especially to what have come to be known as the emerging countries. Mobility between EU Member States (2) and within the European Economic Area is also on the rise.

3.2

Poverty, unemployment, demographic trends, lack of opportunity, conflicts, environmental disasters and climate change are some of the causes of international migration.

3.3

The EESC has proposed that, under its external policy, the EU should promote an international legislative framework for migration and mobility that will alleviate pressures on Member States. This international legal framework should include the main ILO conventions and the UN International Convention on the Protection of the Rights of all Migrant Workers and Members of their Families, which has not yet been ratified by the EU Member States (3). The EESC calls on the European Commission to draw up a report on the measures Member States are taking, in order to pave the way for ratifying the convention in the very near future.

3.4

The main objective of this opinion is to examine and highlight the main issues raised by immigration in all its aspects, as indicated, so as to seek comprehensive solutions that will secure an immigration policy that is effective but which also respects immigrants' rights.

4.1.1

Over the last ten years, the EU has gradually adopted a common legal framework for such aspects as long-term resident status and family reunification. Entry conditions have been harmonised for students and researchers, and there is the Blue Card for highly qualified migrants. Cross-cutting legislation has also been adopted, with the single permit for migrant workers and the Directive on the admission of temporary workers and the Directive for the admission of intra-corporate transferees.

The EU needs to give a boost to the common policy on labour immigration and equip itself with a legal framework that is coherent, comprehensive, cross-cutting and guided by respect for workers' rights, equal treatment, the needs of companies and the legal employment of migrant workers. Legislation and cooperation with the countries of origin are needed, allowing labour immigration through channels that are legal and transparent, for both highly skilled workers and those working in less skilled jobs.

A comprehensive and coherent immigration, asylum and border management policy is needed, together with legislative harmonisation, actively involving the Member States, the European Commission administration, the EEAS and the relevant European bodies.

4.1.2

The EESC and the Commission are cooperating closely on integration policies. Under the umbrella of the Common Basic Principles, the EU is developing an agenda for integration that also entails a financial fund. The EESC and the Commission will continue to work together in the European Integration Forum.

4.2.1

The EU is establishing a common asylum system and legislation for harmonisation, but the situation is still far from adequate, because the Member States have different policies and laws in place (4).

4.2.2

The Committee has criticised the EU for showing little solidarity when it comes to asylum, as 90 % of requests have been processed in just ten Member States. In relative terms, it is the smaller countries, such as Malta, Cyprus and also Greece, that are facing the greatest pressure.

4.2.3

The Dublin Convention determines which Member State is responsible for examining an asylum application but, in the EESC's view, this system does not make for solidarity between the EU Member States. Asylum seekers should be able to submit their request in any Member State. In the medium term, the EU must be given new powers to ensure that it and not national authorities manage requests. In this way, requests would be examined more quickly and the conditions for granting asylum would also improve. In short, the Dublin Convention should be replaced with a more inclusive system within the EU that takes account of asylum seekers' wishes and ensures a more proportionate distribution of responsibilities among the Member States.

4.2.4

In order to help the Member States develop the new asylum system, the European Asylum Support Office (EASO) has been set up, and will also provide technical and operational assistance. EASO should have the task of assessing national asylum systems and their compliance with European and international law and fundamental rights.

4.2.5

The EESC proposes that resettlement programmes be expanded to transfer refugees from outside the EU and to resettle them within its borders, in cooperation with third countries and the UNHCR.

4.2.6

The Committee also suggests expanding the relocation programmes within the EU, providing financial incentives for Member States adhering to it. In the Committee's view, there is currently very little solidarity between Member States when it comes to the resettlement and relocation of beneficiaries of protection and asylum seekers.

4.2.7

Relocation should be carried out on the basis of a permanent, established mechanism. In this context the Commission should submit a legislative proposal for a permanent and effective intra-EU relocation mechanism, on the basis of an EU distribution key for the relocation of asylum seekers, as described in the European Parliament report on enhanced intra-EU solidarity in the field of asylum (2012/2032 INI). In order to ensure that the mechanism is as effective as possible, this legislative proposal should also take into account the practical experience gained with the EUREMA Pilot Project for Malta (5).

4.3.1

The link made in some politicians' speeches between immigration and crime does not reflect the reality of the situation and encourages xenophobic attitudes. Most immigrants whose situation in the EU is not regular entered lawfully on a short-stay visa and extended their stay, or have a temporary immigration permit and do not leave when this expires.

4.3.2

Many of these people are working under unfair employment conditions, when not completely outside the scope of labour law, or in the informal economy, and find themselves socially excluded. In the light of certain situations of this nature, civil society organisations and the EESC have supported processes to regularise the situation of irregular immigrants and have more generally called on the EU to adopt proposals, recommendations and measures to prevent such situations from arising.

4.3.3

The rights of irregular immigrants must be upheld in all circumstances, from the time of their rescue or arrest until they receive protection or are returned to their countries of origin. Irregular migration by sea often results in the loss of life. Against this backdrop, the EESC stresses the importance of upholding fundamental human rights in all situations.

4.4.1

The EU needs a common external borders policy that is credible, effective, legitimate and subject to democratic checks. Member States in the Schengen area do not carry out checks at their shared borders. They thus have to cooperate and share responsibility for managing their external borders. The Schengen Borders Code regulates the crossing of borders and checks, taking account of the requirements which non-EU nationals must meet in order to enter and stay for up to three months. The EU draws up lists of countries whose nationals need visas.

4.4.2

The EESC considers that the role of Frontex should be stepped up, developing it over the medium term into a European border-guard service comprising a European body of border guards. Its main function would be to apply the common rules laid down in the Borders Code. The EESC believes that EU solidarity with the Member States should be stepped up, in line with their geographical location.

4.4.3

The illegal trade and trafficking of persons must be combated whilst guaranteeing that victims are protected by international humanitarian law and by the European conventions on human rights. Under Article 6(2) of the Schengen Borders Code, border guards may not discriminate against persons on grounds of sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation and under Article 13, third-country nationals refused entry have the right to appeal.

4.4.4

The Committee supports the Commission proposal to amend visa legislation. Cooperation with third countries is crucial to visa policy, which often involves reciprocity.

4.5.1

The mobility partnerships should provide for return procedures based primarily on voluntary return with support systems put in place (6). However, in the event that the forced return procedure is implemented, the human rights of repatriated people must be given the utmost respect, in accordance with the Council of Europe recommendations (7).

4.5.2

Any agreements with third countries must be based on the principle of positive conditionality, offering financial assistance and setting up development programmes in order to prevent irregular immigration.

4.5.3

The repatriation of immigrants who entered the EU on an irregular basis must be treated in accordance with the established rules. In this regard return agreements with third countries are crucial in ensuring that the rights of returning migrants are fully respected.

4.5.4

The Charter expressly prohibits collective expulsions and ensures that no one may be removed, expelled or extradited to a country where there is a serious risk that they would be subjected to the death penalty, torture or other inhuman or degrading treatment or punishment — the non-refoulement principle. However, several NGOs have condemned instances of collective expulsion and expulsion of irregular immigrants and asylum seekers to countries where human rights are violated. The EESC points out that the European Convention on Human Rights and the Charter contain provisions that are applicable to any European policy on irregular immigration — with particular focus on protection in the event of return, expulsion or extradition.

4.5.5

The ECHR has interpreted Article 3 of the European Convention on Human Rights to mean that persons with serious illness may not be detained or expelled, as they are in need of medical care, and the same applies to pregnant women. The situation of minors also requires specific attention and protection, especially where they are unaccompanied.

4.5.6

The EESC reiterates its opposition to holding asylum seekers and irregular immigrants in detention centres as a matter of course, as this must remain an extraordinary measure (8). The Committee calls for greater transparency concerning detention centres within and outside the EU and for the UNHCR to be kept informed of the situation of persons detained in them.

5.1.1

The first step in the process was taken by the European Council, which adopted the Global Approach to Migration (GAM) towards the end of 2005. In order to further develop the external dimension of European migration policy, the Commission has put in place a number of initiatives.

5.1.2

Mobility partnerships are the most important political instrument for implementing the GAMM. The pilot phase is now over, and the Commission carried out a political assessment of their implementation in 2009 (9).

5.1.3

The Commission recommended addressing new challenges to immigration and asylum policies (such as war and population movements in the Mediterranean region) by establishing a dialogue for migration, mobility and security in the EU, in its communication entitled A dialogue for migration, mobility and security with the southern Mediterranean countries COM(2011) 292. The EU then opened dialogues with a number of countries.

5.1.4

Six mobility partnerships have been concluded with the following countries: Cape Verde (May 2008) (10), Moldova (May 2008) (11), Georgia (November 2009) (12), Armenia (October 2011) (13), Azerbaijan (December 2013) (14) and Morocco (June 2013) (15). Mobility Partnership negotiations with Tunisia have been completed and a joint declaration was signed on 3 March of this year. Negotiations have begun on a Mobility Partnership with Jordan and should be completed before the end of the Greek presidency, while new dialogues on migration, mobility and security are about to start with other southern Mediterranean countries such as Egypt, Libya, Algeria and Lebanon. The EU-Africa Summit's declaration on migration and mobility (16) has a global approach, which the EESC endorses.

5.1.5

The Commission published an assessment of the global approach to migration (17) in 2011, calling on the EU to strengthen its external migration policy, and presented a revised Global Approach to Migration and Mobility (GAMM) based on four pillars: 1) organising and facilitating legal migration and mobility; 2) preventing and reducing irregular migration and human trafficking; 3) promoting international protection and enhancing the external dimension of asylum policy; and 4) optimising the development impact of migration and mobility.

5.1.6

The mobility partnerships have certain limitations which the EESC believes must be overcome in the next few years. From a legal point of view they are a form of ‘soft law’. They are joint declarations between the EU, a group of relevant Member States and a third country, but do not bind the parties. Their flexible nature makes it easier to attain political agreement, but not legal responsibility. As the EESC has already pointed out (18), mobility partnerships should be international agreements that are binding on the contracting parties.

5.1.7

The mobility partnerships should develop their mobility and migration strands in a more comprehensive and balanced way, and this should be a priority for them. Their priorities have so far focused on security, return, readmission of irregular migrants and border surveillance. The Commission communication on the dialogue stated that ‘increased mobility’ would be subject to specific conditions to be met by third countries. The EESC believes that the EU should offer these countries opportunities for immigration via legal and transparent procedures (19).

5.1.8

The EESC proposes that the EU offer partner countries channels to facilitate mobility, visa acquisition and the admission of new immigrants. The Committee (20) supports the inclusion of other matters in the new agreements, such as:

5.1.9

The establishment of immigration centres by the EU in the countries of origin will enhance the EU's presence in those countries while also eliminating misinformation spread by smuggling rings and encouraging legal immigration applications. Special attention must be paid to strengthening local civil society, or creating it where it does not yet exist.

5.1.10

In humanitarian crises caused by massive population displacements in transit territories, the establishment of immigration and temporary residence centres could be financed by the EU, taking into consideration the principle of positive conditionality. Cooperation with the UNHCR and the IOM in these centres will guarantee protection under the international asylum system for those who require it.

5.1.11

The EU must forge agreements with transit countries, and pay special attention to requirements regarding human rights principles and repatriation.

5.1.12

The signing of agreements could also extend to cooperation with Frontex and Europol. Combatting organised smuggling rings is the key to preventing and reducing irregular immigration. People who fall victim to exploitation by smugglers should be considered to be innocent victims.

5.1.13

Following the disaster in Lampedusa, the JHA Council of 7 and 8 October 2013 set up the Task Force Mediterranean. The group's work culminated in the publication of a Communication on the work of the Task Force Mediterranean (COM(2013) 869), putting forward a package of short-, medium- and long-term measures in five main fields: measures in cooperation with third countries; regional protection, resettlement and improved legal avenues to Europe; the fight against human trafficking, smuggling and organised crime, reinforced border surveillance and assistance and solidarity with Member States dealing with high migration pressure.

5.1.14

The EESC deems it essential that short-term measures be complemented by long-term measures aimed at addressing the root causes of involuntary migration.

5.1.15

The December 2013 European Council endorsed the measures proposed and reiterated the need to act with determination in order to prevent loss of life and to avoid future tragedies. It confirmed the priority of working together with third countries to prevent such occurrences.

16.12.2014   

EN

Official Journal of the European Union

C 451/10

Rapporteurs:

Mr VAN IERSEL and Mr CEDRONE

—

the goal of EMU, as a cornerstone in any further development of the EU, is to promote, quality of life, prosperity and stability for the European citizen. Confidence-building and favourable conditions for the real economy are prerequisites for growth, employment, competitiveness and investment. These aspects underscore the significance of EMU for euro area and non-euro area members alike;

—

the unpredictability of developments forces the euro area urgently to put the right conditions in place, as in today's globalised context no single European country is able to guarantee its own liberty of action. This has major consequences for the governance of EMU as well as for its policies;

—

the EMU does not stand on its own. It was initially conceived as the accomplishment of an internal open European space and the Single Market. Besides fiscal discipline, flanking economic and social policies for growth and jobs as key factors underpinning successful consolidation must be worked out simultaneously by the EU and the Member States (1);

—

profound adjustments in economic and structural policies, until recently largely held as exclusive national domains, will be necessary to ensure a process of convergence between Member States in a number of areas. Common confidence building must replace mistrust and tensions. A closer union affects the whole of society. Social and civil dialogues at all levels should be ensured.

I.

The completion of EMU, ensured by a robust governance and management structure of the euro area and based on:

II.

The launch, as a matter of urgency, of a real European plan for growth and employment based on a substantial investment programme that is driven by public and private investment triggering a fiscal impulse. The rebalancing and proper implementation of existing instruments, notably Six-pack, Two-pack and the European semester, should be ensured;

III.

The establishment of a timeline and arrangements for the launch of political Europe as a whole, including through a reflection process on its institutional set-up in the context of a new European convention;

IV.

The launch of a communication and simplification strategy on EMU, as a joint effort by the Commission, EP, Member States and civil society.

2.1

The EESC underlines that the impact of a complete and successful EMU goes far beyond budgetary, monetary and banking arrangements. Focused leadership should inspire citizens and economic agents to believe in the common mission and the sense of belonging to Europe.

2.2

The coming five years are crucial to developing the still fragile architecture of EMU to maturity. This calls, most importantly, for ownership, openness and transparency; therefore, we need effective policies, as well as plain and clear speaking — no double-talk! — by the governments of the Member States of the euro area, by the Council and by all other EU bodies.

2.3

In agreement with the plea of some outstanding European politicians, the EESC sees political union as an orientation point on the horizon (2). In line with their argument, the EESC considers political union not only as a final accomplishment of the EMU in se, but also in view of the broader international context of today's globalised world, which challenges fundamentally the Westphalian order and the regulatory capacities of individual states.

2.4

In the globalised world of today, no individual European state can survive on its own. Consequently, state sovereignty is better guaranteed in a common political and economic framework.

2.5

The report of President Van Rompuy Towards a genuine EMU and the corresponding Commission Communication of November and December 2012 presented a draft roadmap with concrete measures along the same lines. The EESC welcomed this (3). The main issue is that, despite substantial progress, the separation between running a common currency and intergovernmental economic governance creates unsurmountable tensions. The EESC insists that the Van Rompuy report remain the policy basis for the legislative initiatives over the coming period.

2.6

The economic and financial crisis has affected the euro area in particular and revealed the current limitations of EMU. Rather than being a building block of European integration, the euro has been perceived by many as a wedge that divides countries and civil society, posing a risk to the very future of the Union. This misperception does not acknowledge that the crisis — with its origins largely outside the euro area — would have been deeper without the single currency.

2.7

For the moment the existing imbalances and economic differences between groups of countries, which have been in place since 1991 and have never been addressed, are a brake on progress in the integration process. Even dangerous divisions and renationalisation trends are cropping up.

2.8

The future becomes unpredictable like this. Signals of recovery sustain optimism and remove the crisis mode. However, partly due to the incomplete EMU and fragmentation of the European financial market, low/moderate growth rates are expected for quite some period. Given the volatility of the economy and potential backlashes in the coming years, the EESC warns against complacency on these issues.

2.9

Against this backdrop, recent decisions, including Six Pack, Two Pack and Banking Union, though limited, were badly needed and urgent. However, these new governance mechanisms are based, to a great extent, more on budgetary and stability concerns than on concerns for people, which is why growth and social measures were left out. In addition, the lengthy process of decision-making and the complexity of the system entail resistance, whether tacit or overt, in Member States and in the Council as a consequence of political mistrust and emphasis on national sovereignty. This situation has already led to economic and social costs for the Union and worsens its international standing, making confidence building fundamental to overcoming obstacles.

2.10

Therefore, the EESC insists on a convincing roadmap for the next European legislature setting out with precise deadlines further steps that must focus on accomplishment of EMU in close relation with the targets of the EU2020 strategy and its flagship initiatives. This opinion proposes some of the essential elements for such a roadmap.

2.11

Differentiated integration within the EU, already successfully applied to a number of policy areas, should continue to be a key principle. Many of the decisions necessary to complete EMU can be taken under existing law and/or through enhanced cooperation, whilst others will require a new treaty and/or changes to the existing ones. Such decisions would make it possible to make up for the delays in the completion of EMU and to take a series of rapid measures, without neglecting long-term perspectives, given that the euro area, too, needs genuine structural reforms at institutional level alongside those to be carried out in individual countries.

3.1

An initial, immediate step in the roadmap for the next European legislative term would be to sign and implement a real pact for growth, jobs and stability to boost the recovery and create the conditions for debt to be repaid (a European New Deal). Such a plan would need to consist of at least the following points:

4.1.1

With regard to monetary policy, in line with strengthened macroeconomic governance in the euro area, the ECB's mandate should be completed so as to put it on an equal footing with other central banks outside Europe and those of European countries outside the EU and the euro area, enabling it, amongst other things, to act as a lender of last resort and as an equal partner in international fora, while also respecting its full autonomy. The ECB should be fully enabled to avoid liquidity crises in a way that favours investment (SMEs).

4.1.2

However, the ECB alone cannot be held responsible. On the way to a fiscal and economic union a full Banking Union is essential (8). Due to a persistent linkage between governments and banks, Member States remain reluctant to create the necessary political and economic conditions, resulting in postponement of the most suitable and effective decisions (9). This hampers also an effective ECB supervision of all banks, which should counteract financial fragmentation, cut undesirable links between national politics and banks, and create favourable conditions for cross-border mergers of banks.

4.1.3

During the negotiations with the Council on Banking Union, the European Parliament successfully reached an agreement on the progress towards a Single Resolution Mechanism and a Single Resolution Fund (10). The EESC fully supports the view of the EP. In the next future the decisions should contribute to a unified European capital market, comparable to the one of the United States.

4.1.4

A complete Banking Union requires a well-structured Single Resolution Mechanism, harmonised Deposit Guarantee Schemes in the Member States and an ESM which allows direct bank recapitalisation (11). The related decision-making system should be efficient and must ensure quick action. The process of establishing and implementing these elements has to be speeded up.

4.1.5

Banking Union alone is insufficient to stimulate the economy and investments. With a view to making the European financial sector more resilient, the agenda for the coming years must also focus on full implementation of Basel III, on the Financial Stability Board and on finding a solution for ‘too-big-to-fail’ banks in line with international agreements (G-20).

4.1.6

Commissioner Barnier's recently published voluminous legislative package on banks and financial markets can deliver an important contribution to the proper functioning of financial markets in Europe as well as to create a stable and reliable banking sector. This is paramount for the real economy. The latest Council decisions in this field go only partially in the desired direction.

4.1.7

Adequate credit is a top priority for the recovery and growth of the economy and for development. This means that EU legislation has to strike a balance between ensuring strict framework conditions for banking and promoting sufficient opportunities for operational banking activities, especially in view of facilitating investments, which are indispensable to any growth policy. It goes without saying that satisfactory arrangements in favour of start-ups and SMEs are crucial (12).

4.2.1

In this domain, the laborious discussion in the European Council on binding economic reform contracts is significant and disappointing (13). Therefore, the EESC insists that the Commission further develop its proposal on such contractual arrangements which ask for a further discussion on their form, financing and democratic legitimacy (14).

4.2.2

Partnerships based on a system of mutually agreed contractual arrangements and associated solidarity mechanisms could contribute to facilitate and support sound adjustment policies. These arrangements would contribute both to Member States' ownership within a common framework and to reforms in all areas related to sustainable growth, competitiveness and employment, all three of which will reinforce the EU as a whole (15). Such framework may help to provide an EU response to country-specific asymmetric shocks, which would be a form of EU solidarity.

4.2.3

Partnerships of this kind could promote cohesion and confidence among the population which is crucial to overcome the concerns related to national sovereignty. This in turn will contribute to European communality which will be an indispensable basis for the development of EU instruments such as a euro area budget, a European solidarity fund and Eurobonds.

4.2.4

The convergence of economic systems including tax systems (16), accompanied by a solidarity instrument, represents a key factor to gradually overcome the macro and microeconomic disparities between countries. In the medium term, even if it requires treaty changes, this instrument is bound to become an economic compensation mechanism to rebalance and integrate the euro area countries' economies. It could eventually become part of a common euro area budget. The structural and cohesion funds could also be used in this perspective.

4.2.5

The new Commission, as a primary player in the process, has to take responsibility for making legislative proposals, in accordance with the method followed by Commissioner Barnier for the regulation of the financial system, in areas where the debate has been dominated so far by the Member States, in order to stimulate fruitful discussions in the Council on the basis of concrete proposals.

4.2.6

So far the Commission has underused this method. Examples of cases where it could be used include the ex-ante coordination of plans for major economic policy reforms, the economic reform contracts accompanied by a solidarity mechanism, the establishment of a European debt redemption fund and Eurobills. When these proposals require Treaty changes, the Commission should make this clear to the euro area members.

4.2.7

Such approach will compel the Council to take a position on these proposals. It will highlight transparency and clarity about the different political positions and it will prove the only method to overcome the intergovernmental stalemate in the current architecture. This has also to be communicated properly by the Commission to the different stakeholders, including the general public.

4.2.8

Hence what is needed in the medium term (as it has been needed since the Treaty of Maastricht) is economic governance for the euro area as regards micro and macroeconomic policies, moving from the current method of coordination, which has so far produced poor results, to shared decision-making on the ‘fundamentals’ of those policies. The euro area cannot afford to continue having the same currency whilst having separate economic policies, which therefore need to be integrated so as, among other things, to facilitate the ECB's task.

4.2.9

A redistributive mechanism to be used in case of asymmetric shocks: the principle of responsibility (not only of states but also of citizens) must not be separated from that of solidarity. Therefore, concrete measures should be taken, for a limited period, for the most vulnerable groups of the population. It is a responsibility incumbent on every citizen and every country.

4.2.10

In the same vein, we need to be moving towards an appropriate own budget for the euro area, with jointly agreed rules; this is the only way to take steps towards a common fiscal policy and absorbing any shocks that might occur in the future. This could be financed for example through a targeted tax, a financial transaction tax (provided that this is extended to the whole of the euro area), a carbon tax, a temporary levy on balance of payment surpluses exceeding 6 % and, finally, by issuing joint bonds.

4.2.11

Sovereign debt: a mechanism should be created that, without removing countries' responsibility for their debt, removes this from the hands of financial speculators. National debt, gradually converted up to a maximum of 60 % (as proposed by the EESC (17)) or, for the part exceeding 60 % (in accordance with the proposal for a Debt Redemption Fund put forward by the Commission (18)), could be held in a consolidated debt account and serviced pro rata by the different Member States. Alternatively, a Temporary Eurobill Fund could be created via an intergovernmental treaty which would allow the issuing of short-term euro area debt instruments and would thus eliminate the risk of a euro area government liquidity crisis. Following the conclusions of its expert group, which was established with the specific mandate of analysing the merits and risks of the different options for joint debt issuance, the Commission should now make a concrete proposal as to which instruments to use and under what timeframe.

4.3.1

Microeconomic policies also need a lot of attention, especially industrial and sectoral policies, which are vital to the growth of the European economy, where a piecemeal approach will no longer do. Some policies (and the corresponding decision-making procedures) which have an indirect impact on national budgets therefore need to be pooled in order to arrive at a shared vision and joint action by the Commission and the Member States, in particular as regards:

4.4.1

The EESC insists on concrete measures concerning the social dimension of the EMU (20). The rate of youth employment remains damagingly low. Together with Member States, the new Commission should take responsibility for improving living and working conditions:

4.4.2

Proper social dialogue at all levels is needed. This means that obstacles to effective consultations in and among Member States have to be overcome. The EU should be of great help in bringing together stakeholders from various countries to discuss successful practices and to map plans for improvement of conditions for job creation.

4.4.3

If the Union, and in particular the euro area, is to be completed, it cannot ignore the social consequences of current economic policies by leaving them entirely up to individual countries. Both economic and social measures should take into account not only the parameters of the stability pact, but also a wider range of macroeconomic parameters (e.g. the unemployment rate, growth rate, balance of payments, employment rate, poverty rate, distribution of incomes and wealth, etc.). It is impossible to ensure the stability of EMU without any social mechanisms for the euro area that can deal with the consequences of severe economic recessions and/or imbalances. Some of these may require Treaty changes. They could include in the medium term:

4.4.4

Other policies that enhance the public's sense of belonging and facilitate the free movement of people should also be pooled in the public interest. These include:

4.5.1

Such a broad programme can only be carried out with the necessary democratic legitimacy of the decision-making process. Respecting fully the considerable progress over the last few years, the EESC is of the opinion that a further leap forward during the next term can only be made by giving special attention to accountability, legitimacy, democracy, transparency and communication.

4.5.2

There is an increasingly sharp political debate across Europe on the integration process. At EU level political parties have to define clearly their options which must foster the viewpoints of the various political groupings in the EP and contribute to more visibility of European political parties. Transnational European elections involving cross-border political formations would strengthen and facilitate very much the European debate.

4.5.3

Co-ownership and the need for public support require much more commitment from national Parliaments to the European debate. EU legislative proposals and NRPs should be duly discussed in Parliaments. Interactive consultations on strategic issues between the EP and national Parliaments should be foreseen, leading also to increased dynamics between national Parliaments.

4.5.4

The Commission should apply the Community method as effectively as possible in presenting legislative proposals and measures, also in cases of shared competences with Member States. As in the past, a proactive and courageous attitude will pay off.

4.5.5

At the request of Parliaments and/or civil society, the Commission should be invited to national debates on European issues.

4.5.6

The European Council and the Councils, notably the Ecofin Council, are central decision-makers and essential for accountability and legitimacy. Therefore, more transparency is necessary as it responds to democratic requirements.

4.5.7

Members of the Council who represent national interests, as well as co-deciders at European level, often speak with different tongues at home and in Brussels, which usually creates considerable confusion and hampers agreement. Double-talk is not acceptable. Member States should agree on and support the agreed common political messages at all decision-making levels.

4.5.8

The Member States are both subject and object in the architecture of EMU. Convergence to European methodology while preserving national administrative procedures and traditions is possible, but it will require considerable adjustments in a number of countries. Reliable political and administrative practices will turn out to be crucial for building confidence.

4.5.9

The EESC underlines that civil society also has to play its often underestimated role in the future architecture of the EU and of a more integrated euro area. There are many areas in which progress depends partially or completely on non-governmental actors. Civil society should be fully involved. In too many countries civil society is still side-lined, while it must be given the necessary instruments to connect to institutional decision-makers. Civil society must take its responsibility and must participate in the EU decision-making process in order to enlarge its democratic basis. Without its active commitment EMU can never be successfully accomplished.

4.5.10

For the social partners in particular it would be quite useful to examine the results of a consensual model in Member States, which the EESC strongly favours. Exchange of practices is to be recommended.

4.5.11

The EESC believes that it has become obvious that the current rules are not adequate and have not worked as expected, and that intergovernmental action is not up to the challenges facing EMU. Nor should we delude ourselves that, as the crisis recedes, the stabilisation mechanisms hurriedly put in place as the storm was raging will be sufficient to move forward and prevent new crises.

4.5.12

The only way to avoid a recurrence of such situations is to change the rules and the decision-making process governing the euro area so as to make it more transparent and democratic:

5.1

As well as completing EMU as set out above, it would be helpful, over the next parliament, to start a serious reflection process on deepening the EU as a whole and the functioning of its institutional organs as well as selecting policies that ought to be shared. In the EESC's view, the reflection should concern the aspects described below.

5.2

Subject the Commission's activity to the approval of the EP, which could also share the right of initiative. The EP could be elected on the basis of European lists constituted by European parties.

5.3

In order to promote visibility, democratic legitimacy and the division of powers, abolish the diarchy of the president of the European Council and the president of the Commission, who would be elected by the EP or directly by the people, provided his role is also changed. The current Council could become ‘the senate of the States’ with new rules of procedure.

5.4

With regard to the policies that should be run in whole or in part by the EU and over which it should have decision-making power, these could include foreign policy and the international role of the Union, including a single presence in international organisations, defence policy — for the willing — energy policy, research policy, asylum and immigration policy, and compliance with standards and rights, with the power to take action when states violate these, as is already the case for economic issues and budgetary rules.

5.5

The new institutional set-up, which cannot be achieved through enhanced cooperation alone, and the role of the Parliament, the Council, the Commission, the EESC and the CoR, could be determined by a new Convention, which should finish its work before 2019, when the next European elections after those of 2014 will be held.

6.1

In the process of regaining confidence, good communication is indispensable. The EESC is convinced that the best communication is ensured by good policies and practices that present a long term perspective for all European society.

6.2

There is a need to foster and improve communication to the public. Communication breeds interest, which breeds understanding. This lesson has not been taken enough into account, a shortcoming for which the Commission and the Member States are to blame. The whole spectrum of social media should be used.

6.3

EMU and related areas have often been presented as a technical affair. They are not, as they are fundamentally political and of great influence to every citizen’s life. It is, however, rarely discussed, let alone communicated, from that perspective, which also explains largely the huge gap between the EU and the ordinary citizen.

6.4

Different traditions and situations show painfully day by day the lack of a ‘common EMU language’ which is sometimes very confusing and damages public support. In the EESC’s view, the Commission is the only authority that is able to present a solution due to its right of initiative in the EU legislative process. This must be seen in the perspective of a more political Commission and EP than previously.

6.5

As co-responsible actors, civil society and social partners have to play their proper role in communication, which is so far often underdeveloped. Civil society and the social partners should convey the concerns of citizens and enterprises to the authorities and should cooperate in addressing them. The exchange of views should run both ways.

6.6

Europe should no longer give the impression of being an ivory tower as felt by large part of public opinion. The merits of European integration, the concrete steps forward and the benefits that result from it, notably for investments, job-creation and consumers, have to be clearly explained to the citizen. The so-called new narrative for Europe should start with a shared communication and simplification strategy by the Commission and the Member States, which are key players alongside political parties and civil society.

16.12.2014   

EN

Official Journal of the European Union

C 451/20

Rapporteur:

Mr SMYTH

1.1

After more than six years of financial and economic upheaval, the normal channels of funding for businesses, particularly SMEs, remain partially blocked. Banks, the traditional source of most SME funding, are less willing to lend due to a number of factors such as ongoing deleveraging, higher capital and liquidity ratio requirements, bad debt provision and risk aversion. This fragmentation of financial markets and funding channels has been one of the most persistent features of the financial crisis in Europe.

1.2

The decline in working capital lending to SMEs is a chronic form of market failure which demands an appropriate response from EU policymakers. To date this response has not been proportionate to the problem.

1.3

The ECB’s LTRO initiative (1) was successful in averting the collapse of the banking system but most of its funding has not been transmitted through to the real economy. Instead, it has been used to consolidate banks' balance sheets and it represents a missed opportunity because businesses continue to be starved of working capital.

1.4

The EIB, which has been very active in supporting SMEs across Europe has been substantially recapitalised and has enhanced its lending to SMEs. SME support represents the single largest policy priority of the EIB Group, accounting for more than 20 % of the EIB annual lending volume and 100 % of EIF activities. Even though the EIB is a significant provider of development finance for SMEs its share of total business lending in the euro area remains small.

1.5

The EESC supported last year’s Green Paper on long term financing of the economy (2) and this has been followed by a recently published package of measures (3) to promote long-term finance in general and to target funding for SMEs in particular. The package comprises measures to boost the use of securitisation of SME loans. The Commission also proposes new rules to encourage pension funds to invest in financial assets and thus to support the financing of longer term growth in the real economy (4). There are also proposals to create a liquid and transparent secondary market for corporate and other types of bonds. The EESC welcomes these proposals and believes that they can, in time, contribute to a reformed and more efficient market for SME finance.

1.6

Several other initiatives are under way to remove impediments to more accurate assessment of credit worthiness and risk by lenders. They include greater use of digital repositories with standard submissions for business registers, statistics offices, bank credit assessments and other lenders and the eventual establishment of a European central credit registry. Better, more up-to-date information on SME financial performance should enable better risk assessment by lenders and more appropriate pricing of risk.

1.7

A number of other proposals to improve access to SME finance are now either underway or under consideration. The EESC supports this more proactive response from policymakers but they will take time to implement. The challenge remains what to do now and in the short-term to improve SME access to finance.

1.8

A ‘one size fits all’ solution may not be suitable in all Member States. Some Member States have developed approaches that are suited to their national financial structures and regulations. One of the most interesting initiatives is the Funding for Lending Scheme in the UK (5). It was extremely successful in boosting mortgage lending and lending to households in the UK over the past two years and is now in solely at boosting SME lending. The scheme incentivises participating banks to increase the net lending to SMEs by reducing the cost of funding. Supporters of the scheme argue that lending to SMEs would be much lower if the scheme were not in operation.

1.9

The EESC sees the Funding for Lending Scheme as an example of good practice and recommends that the ECB give serious consideration to the introduction of a similar initiative in the euro area. On 5 June 2014 the ECB announced a set of liquidity measures to boost bank lending to SMEs (6). The EESC is pleased to note that the ECB's main proposal, called Targeted Longer-Term Refinancing Operations (TLTROs), is similar to the FLS as outlined in this opinion. It is also good to note that the work of the EESC in this opinion has preceded the evolving thinking of policymakers.

2.1

The debate about business lending and finance has tended to focus on the supply and demand for development or investment capital, especially for SMEs. Lenders tend to point out that there is a shortage of new projects and hence in the demand for development finance. Representatives of SMEs and mid-cap businesses often complain about both the supply of development finance and the cost of such credit, claiming that banks have been overpricing risk finance. Both points of view may contain elements of truth. Either way, the stock of lending to businesses both large and small has been at best static and at worst falling sharply across member states of the EU.

2.2

For the purposes of this EESC opinion, the focus is not on development capital or finance for new businesses or start-ups or innovations. Rather the opinion deals with the issue of access to working capital — overdraft facilities and rolling credit facilities that are the lifeblood of most businesses. Trends in lending for working capital are difficult to identify precisely due to the lack of data, but the broad trend can be seen in the ECB data of lending to non-financial businesses. These data have been falling for the past four and five years and only in the last few months show some signs of recovery.

2.3

One of the most enduring dimensions of the financial and economic crises of the past six years is the severe decline in finance for business. As European banks have struggled to reduce their exposure to impaired loans and worthless debt, the normal supply of working capital for business, particularly smaller businesses and micro-enterprises, has declined in both nominal and real terms. This decline in lending to business could be described as a chronic form of market failure. In addition the fragmentation of European financial markets has led to a two-tier structure of lending rates. Small businesses in Italy and Spain for instance face much higher interest charges than similar businesses in Germany and the UK. To date the response from EU policymakers has not been proportionate to the problem and there is some evidence that the effects of enhanced EU and international banking regulation may have exacerbated the business lending problem by making banks more risk averse.

3.1

EU policymakers have struggled to deal with the fallout of the financial crisis and its impact on the real economy. The fragility of the EU banking system has become a major constraint on economic recovery. To help alleviate this fragility the European Central Bank (ECB) in 2012/13 embarked upon an unprecedented initiative to give EU banks access to over EUR 1 trillion of relatively low-cost money. This initiative was termed the longer-term refinancing operation (LTRO). It was a response to the threat of a banking freeze or a banking collapse as banks struggled to repair their balance sheets and achieve compliance with tougher regulatory capital ratios. LTRO was successful in averting the collapse but most of this funding was not transmitted through to the real economy. Instead, it has been used to consolidate banks' balance sheets. In one sense this outcome was predictable and understandable. The priority for most European banks was and continues to be survival. In another sense this outcome represents a missed opportunity because businesses continue to be starved of working capital.

3.2

In March 2013, the European Investment Bank (EIB) was substantially recapitalised. Its paid-up capital was augmented by a EUR 10 billion cash injection from shareholders. The EIB expects to be able to expand its already substantial lending to SMEs by up to EUR 40 billion over the next three to four years. The recapitalisation has helped the EIB to enhance its lending to SMEs. SME support represents the single largest policy priority of the EIB Group, accounting for more than 20 % of the EIB annual lending volume and 100 % of EIF activities. EIB lending to SMEs, however, tends to be used mainly for development capital, innovation and new projects. It is understood that the provision of working capital lending is under consideration by the EIB and it will be interesting to note the outcome of these deliberations. Even though the EIB is a significant provider of development finance for SMEs its share of total business lending in the euro area remains small.

3.3

In the UK and US, monetary authorities have resorted to some unorthodox measures such as quantitative easing in order to provide liquidity to the banking system. This policy involves the purchase of very large amounts of sovereign and corporate bonds by central banks and the creation of new money into the banking system. It has helped to avert the freezing up of money markets and the monetary transmission mechanism in both the US and the UK. There is some evidence that in the US the quantitative easing programme has helped to expand credit and finance in the real economy. The US monetary authorities are now contemplating tapering it as economic recovery becomes more entrenched. In the UK, the forward guidance of the Bank of England suggests that once economic recovery becomes well-established, the policy of quantitative easing will also be ended.

3.4

The Commission published a Green Paper on long term financing of the economy in March 2013 (7) and has followed this up with a package of measures to promote long-term finance in general and to target funding for SMEs in particular (8). At the core of this package are measures to boost the use of asset backed securities (ABS) of SME loans. Wider use of ABS would free up banks and other financial institutions to engage in greater volumes of lending to business. The Commission also proposes new rules to encourage pension funds to invest in financial assets such as ABS and thus to support the financing of longer term growth in the real economy (9). There are also proposals to create a liquid and transparent secondary market for corporate bonds and to improve the attractiveness of covered bonds and private placements. There is a communication on crowd funding (10), which aims to promote best practices, to monitor the development of crowd funding markets and to facilitate the emergence of a quality crowd funding label.

3.5

Several other initiatives are relevant here. Impediments to more accurate assessment of credit worthiness and risk by lenders usually revolve around the cost and lack of relevant financial information. The Institute for International Finance (IIF) proposes a series of measures to lessen these impediments. They include greater use of digital repositories with standard submissions for business registers, statistics offices, bank credit assessments and other lenders. These national repositories of credit risk data should be consolidated with the European Data Warehouse, eventually leading to a European central credit registry. The IIF calls for the setting of Europe wide standards for information collection and reporting so as to enable cross company and cross national analyses. Better, more up-to-date information on SME financial performance should enable better risk assessment by lenders and more appropriate pricing of risk.

3.6

Other proposals to improve the flow of finance to SMEs include:

4.1

The task of designing a scheme to encourage greater access to finance right across the Union is not straightforward. Some Member States have developed solutions that are suited to their national financial structures and regulations. A ‘one size fits all’ approach may not be suitable in all Member States. One of the most interesting initiatives is the Funding for Lending Scheme (FLS) in the UK and it is worth a closer look.

4.2

The UK Treasury and the Bank of England introduced the FLS in July 2012, in an attempt to boost lending to the real economy (11). The Treasury, as shareholders of the Bank of England, have oversight of the operation of the FLS. The FLS offers participating banks a cheap source of funding and these lower funding costs should allow banks to increase the availability of credit by cutting the interest rates they charge. The scheme incentivises banks to increase their lending and so enable them to draw down additional funds from the scheme. Since its inception, the FLS has contributed to a substantial fall in bank funding costs and this has fed through in the form of improved credit conditions. It is fair to say that most of the success of FLS to date has been in stimulating lending to households and mortgage lending in particular. It was less successful in boosting business lending and so in November 2013, the authorities adjusted the FLS to concentrate only on stimulating lending to SMEs.

4.3

The FLS is a scheme designed to give a commercial incentive to participating banks to increase their net lending (i.e. gross lending minus repayments). The scheme offers discounted funding to all banks, even to those banks which are deleveraging. The scheme has no upper limit as to the amount of funding banks can tap into. To illustrate, if a participating bank has a stock of business lending of EUR 100 billion at the start of the scheme, it could draw down at least EUR 5 billion in funding. If the same bank then increased its net SME lending by a further EUR 1 billion, it would be entitled to draw down a further EUR 5 billion from FLS. This five to one ratio of drawdown to new net lending to SMEs, together with the cheaper cost of funding, provides powerful incentives to banks to expand lending (12).

4.4

The Bank of England is monitoring the amended FLS. Most UK financial institutions are participating in the FLS. The revised scheme aimed solely at boosting business lending has been in operation since November 2013 and it is probably too early to draw any meaningful conclusions about its effectiveness. Some of the biggest banks in the UK and in the euro area continued to deleverage quite rapidly and this probably accounts for much of the decline in business lending. Supporters of FLS argue that the credit situation in the UK would be much worse without the availability of FLS funding.

4.5

The EESC believes that a similar scheme to FLS should be implemented across the euro area. A euro area FLS-type scheme could, over a limited period of up to two or three years, contribute to a restoration of finance for business to more normal levels while facilitating the ongoing deleveraging process.

4.6

On 5 June 2014 the ECB announced a set of liquidity measures to boost bank lending to SMEs (13). The EESC is pleased to note that the ECB's main proposal, called Targeted Longer-Term Refinancing Operations (TLTROs), is similar to the FLS as outlined in this opinion.

4.7

Most of the proposals to improve access to finance for SMEs put forward by the Commission have been welcomed by the EESC but they are mostly set in a medium to longer term timeframe and may require new legislation and/or institutions. Meanwhile the funding crisis in working capital for business is immediate, pressing and arguably getting worse. The EESC believes that EU policymakers should do more to provide shorter term solutions such as the incentive schemes (FLS or LTRO) outlined above. Any heightened financial or reputational risks must be weighed against the 26 million unemployed people (5.6 million aged under 25) in the EU.

16.12.2014   

EN

Official Journal of the European Union

C 451/25

Rapporteur:

Isabel Caño Aguilar

1.1

The European Union must stop being merely a digital user and become a designer and producer too, and in order to do this it must promote talent. Informing, training and educating are thus priorities.

1.2

The EESC considers that access to the digital society must be a priority objective for the whole of European society. The policies implemented in this field are insufficient for tackling the digital divide, which is continuing to widen.

1.3

The EESC points out that appropriate measures must be taken to ensure that people with disabilities have access to the digital society and enjoy equal conditions in relation to new technologies.

1.4

The digital society must not be an additional cause for exclusion. The EESC lays particular stress on the need to adopt appropriate policies to ensure that older people are not excluded and can make full use of the technologies that are now part of daily life.

1.5

The EU and national authorities should act jointly to ensure that IT programmes and equipment are available at more affordable prices and respect multilingualism.

1.6

European education policy should prepare people for life. The EESC stresses that professional organisations from the education sector should be consulted.

1.7

Within Member States' financial possibilities, the EESC considers that support for public education is essential for achieving equality.

1.8

The EESC stresses the importance of public libraries when it comes to education and training in the digital society.

1.9

The EESC advocates the promotion of models for Open Innovation and Open Standards. Care must be taken to avoid unjustified measures to protect intellectual property when these could restrict innovation processes in the digital economy.

1.10

The EESC suggests following the recommendations of the European Foundation for Quality in e-Learning (EFQUEL) with regard to education.

1.11

The EESC reiterates the important role of vocational training and education in combating the economic crisis and fostering recovery, and stresses the role played here by Cedefop. The EESC therefore advocates:

1.12

The Horizon 2020 initiative must help to strengthen Europe's position in the digital technology field, where businesses post a lower level of investment than their competitors in Asia and the USA.

1.13

The EESC considers it essential to promote Europe's small and medium-sized enterprises (SMEs) in the information and communication technology (ICT) sector, as they can drive innovative projects that are vital in a constantly changing industry. The resulting measures and improved funding facilities for SMEs will also do much to help combat the economic crisis.

1.14

Support for start-ups in the digital technology sector can help boost the EU hardware and software industry. The EESC appreciates the move to support high-risk programmes under the Digital Agenda, but calls for greater support from the financial system.

1.15

The EESC proposes a series of measures to improve women's participation in the digital society.

2.1

There are a number of political decisions, programmes and initiatives taken by the EU which relate to the use of ICTs in education. They include:

2.2

The Digital Agenda for Europe (2010), which is a key EU strategy for meeting the objectives of Horizon 2020, provides for a wide range of measures, including measures relating to:

2.3

The EESC has addressed these aspects in various opinions (1).

2.4

This own-initiative opinion discusses issues relating to access to the digital society, learning, equality and employment.

3.1.1

The tools provided by ICTs are being used more and more in people's lives. Access to the digital society is a right and a source of opportunities which should be fully exploited.

3.1.2

The EESC has frequently noted the importance of broadband for European society and for the EU economy (2), and it thus welcomes the extension of satellite broadband to the 28 Member States. However, many causes of the digital divide still remain, and have been worsened by rising poverty which in turn has been increased by the economic and social crisis.

3.1.3

The digital divide is not closing, for reasons relating to factors including: education (people who have completed higher education are three times more likely to be internet users than the 33 % with a lower educational level), age (internet use is frequent among young people and almost universal among students, but is much more limited among older people), the high price of IT, the fact that most information is in English, and differences between rural, urban and island regions.

3.1.4

Public authorities often face serious problems financing the cost of IT in education in a context of budgetary austerity, which seems to have been worsened by the Stability Pact. One possible financing method — charging the user — could undermine accessibility and equality in education.

3.1.5

Accessibility is a human right (3). It should also be noted that in Articles 20, 21 and 26, the Charter of Fundamental Rights of the European Union, an integral part of the Lisbon Treaty, prohibits any form of discrimination on account of disability and recognises the right of persons with a disability to benefit from specific measures; for its part, the United Nations Convention on the Rights of Persons with Disabilities commits member states to take adequate measures to ensure access for people with disabilities, on an equal basis, to information and communications technologies, including the internet (4).

3.1.6

People with disabilities are twice as likely to be unemployed, and new technologies (including the internet) are a gateway to leisure, education, culture and many other public and private services; they also encourage participatory democracy. Accessible ICTs are thus vital for allowing people with disabilities to compete under equal conditions in a growing digital market and be part of the digital society.

3.1.7

The digital society must not be an additional cause for exclusion. Instead, it must provide vulnerable individuals with a means of overcoming their exclusion.

3.2.1

The digital society demands a commitment to openness to institutional changes. The EU must promote education and training systems that are universally accessible and serve to develop people's knowledge and skills across a wide range of subject areas, social, civic and cultural skills, taking in the ability to learn as well as creativity, innovation and teamwork skills.

3.2.2

All those responsible for the education system must cultivate an atmosphere in schools that is conducive to innovation, quality and cooperation in educational practice; all students must be stimulated during the educational process, with dissemination of good practice, civic participation and experiences at school, together with a culture of evaluation.

3.2.3

EU education policy has not adequately motivated national authorities to ensure educational use of ICTs by teachers, starting during their basic training, and in educational establishments, especially primary and secondary schools, and vocational education. In particular, it has not sufficiently encouraged the Member States to make the investment required for a high-quality modern and innovative education system based on ICTs.

3.2.4

Education ministries should schedule specific training for teachers and encourage rethinking of the way people learn.

3.2.5

The EESC stresses the importance of public libraries when it comes to education and training in the digital society.

3.2.6

From their earliest schooldays, children could be introduced to the workings of computers and perhaps to programming as a ‘fun’ activity, so that as soon as possible, Europeans can stop being mere users of ICT and become creators and producers of it too. The EU has centres of research excellence (e.g. research into electronic nano-components), but further progress is needed.

3.2.7

European education systems provide examples of high-quality education from primary education to vocational training and university. However, changes in curriculum are needed to incorporate the use and evaluation of ICTs in education.

3.2.8

The EESC advocates the promotion of models for Open Innovation and Open Standards. Care must also be taken to avoid unjustified measures to protect intellectual property when these could restrict innovation processes in the digital economy.

3.2.9

The SPI (Simple Publishing Interface) protocol, which was developed by the European Committee for Standardization (CEN), is intended to facilitate communication from tools that produce materials to applications that persistently manage learning objects and metadata.

3.2.10

Interoperability can also facilitate use of the enabling technologies which people with disabilities need in order to access ICT.

3.3.1

Education and vocational training enrich people's lives and provide them with skills which are necessary in a democratic society. Social and economic development are heavily dependent on vocational training, as it gives access to skills and entry routes into the labour market. For underprivileged and marginalised groups in particular, it can help to bring a better life. However, vocational training is not just a bridge between education and employment: it is of considerable importance in itself. UNESCO's Institute for Statistics has noted the correlation between economic development and vocational training.

3.3.2

Erasmus Plus is the EU's main strategy in this field and, as the EESC has noted, ‘should be a key instrument for increasing support for education and training in order to enhance citizens' skills [and] help tackle the high levels of youth unemployment in many Member States’. However, it is up to the Member States — who have responsibility for this field — to make the effort to give vocational training the requisite resources and prestige within the education system.

3.3.3

The EESC points out that Cedefop's work on lifelong learning and vocational training addresses issues such as adult education, qualifications and skills, accreditation and quality guarantee procedures that are crucial for those who have most difficulty entering the labour market. Cedefop should be allocated more resources.

3.3.4

The EESC advocates:

3.4.1

The EU has a high unemployment rate but at the same time — as the Commission has pointed out — it faces an immediate shortage of 9 00  000 skilled workers to fill vacancies in the ICT sector.

3.4.2

ICTs have a significant impact on employment, and the success of the Digital Agenda is tied to the existence of high-tech companies: in 2008 ICTs brought EUR 574 billion of value added to the EU and employed 8,3 million people. European companies face problems such as fragmented markets and insufficient funding, and need to strengthen their position vis-à-vis the titans that dominate world markets, most of which are North American.

3.4.3

Like any technological development, ICTs have a dramatic effect on employment. This must be looked at with a view to creating occupations, qualifications, skills and forms of certification both for people excluded from employment because of ICT and for those whom ICT can help to become integrated.

3.4.4

The Grand Coalition for Digital Jobs launched by the Commission in March 2013 addresses the main problems (training and matching of courses with jobs in the digital sector; mobility; accreditation; awareness-raising; innovative education and training), but it does not have a specific budget line. Other initiatives exist under the Digital Agenda, such as the e-Skills strategy, Employment Package, Opening Up Education initiative, Rethinking Education strategy, Youth Opportunities Initiative and the EU Skills Panorama.

3.4.5

This Coalition should include industry, but also the education world, so that work-experience periods in companies bring closer contact with the ICT sector.

3.4.6

It should be noted that these programmes do not take sufficient account of the special needs of people excluded because of disabilities, particularly when it comes to mastering e-skills and digital literacy and gaining a place in the digital work market.

3.4.7

Although Europe's big high-tech companies invest in R&D, they do so far less than Asian and US companies. The EESC hopes that Horizon 2020, with its EUR 78,6 billion budget, will help to strengthen Europe's position on the world markets.

3.4.8

The EESC considers it essential to promote European SMEs in the ICT sector, as they can drive innovative projects that are vital in a constantly changing industry. To help tackle the crisis, solutions must be found to the financing problems faced by small businesses and innovative projects (start-ups) involving technological innovation.

3.5.1

Currently, only 30 % of the 7 million or so people working in the ICT sector are women; women are under-represented at all levels and above all in decision-making positions. Although a higher proportion of women than men complete higher education, they are still at a disadvantage compared to men when it comes to jobs, pay, working conditions and access to positions with more responsibility.

3.5.2

A change in policy is made particularly necessary by the drop in the number of women ICT graduates: currently, only 29 in every 1  000 women holds a postgraduate degree in an ICT subject, and only four in every 1  000 will be employed directly in the sector;

3.5.3

Although greater female participation in the ICT sector could increase the euro area's GDP by EUR 9 billion, there are a number of reasons (for example, cultural stereotypes and traditions) for their insufficient participation in this sector, which is a problem not just in Europe but also in the wider world.

3.5.4

The EESC therefore suggests:

4.1

Accessibility must be a priority objective not just for the authorities but for the whole of society, supported by all economic and social players. However, EU policies and, in general, those of many Member States have proved inadequate.

4.2

The EESC suggests that the Union and national authorities promote joint projects to achieve a substantial reduction in the cost of online materials — including promoting the use of free, or open-source, software such as Linux — and to provide European content for information and knowledge.

4.3

An appropriate policy for the EU in the 21st century requires a mentality that is open to change. The main purpose of European education and training systems should be not just to meet specific labour market needs (something which the European Commission has made a central plank of its education policy), but also to prepare people for life. European associations of teachers and educational establishments should be involved in framing EU education policies, which is not happening at the moment.

4.4

Bearing in mind that the Member States face budget constraints and that, through their democratic institutions, they are taking the decisions that they consider best for their citizens, the Committee notes the imperative need to invest in public education to achieve the goal of equal access to education regardless of students' social background and their financial means.

4.5

The Commission should insist that educational metadata be free and regarded as of general interest, and not subject to proprietary patents held by private companies. The importance of eContentplus, a Commission metadata programme, should be noted in addition to the European SPI standardisation programme.

4.6

Control of educational content should rest with teachers and educational establishments, so as to guarantee the quality and suitability of education and training provided. The EESC thinks that the recommendations of the European Foundation for Quality in e-Learning (EFQUEL) should be taken into account with respect to legislation, harmonisation, intellectual property rights, etc.

4.7

The EESC has already expressed its dismay at the slashing of the Digital Agenda budget for the 2014-2020 period, from the EUR 9,2 billion initially proposed to the EUR 1,14 billion finally approved.

4.8

The EESC welcomes the financial support for high-risk innovative schemes carried out by SMEs, which was established under Horizon 2020. Measures to ensure that SMEs and start-ups receive more funding not only from the public authorities but also from the markets and the financial system are extremely important.

4.9

The EESC calls for accessibility aspects to be included in all initiatives in the digital field, ensuring that e-learning programmes, ICT, materials and tools (both online and offline) are accessible to people with disabilities and to all vulnerable individuals. Special care must also be taken to include people with disabilities in the new ICT posts which the EU intends to fill.

16.12.2014   

EN

Official Journal of the European Union

C 451/31

Rapporteur:

Mr McDonogh

1.1

The Committee would like to see an EU-level authority for cyber security created, analogous to the central authority in the aviation industry, the European Aviation Safety Agency (EASA), to provide the strength of leadership required at EU-level to deal with the complexities of implementing an effective Europe-wide cyber security policy.

1.2

Informed and empowered citizens are critical to strong cyber security in Europe. The education of citizens in personal cyber security and data protection should be a fundamental part of school curricula and workplace training programmes. Furthermore, the EU should drive public information programmes and initiatives across the Union on these topics.

1.3

Businesses should be required by law to have a proactive approach to protecting themselves from cyber attacks, including secure and resilient information and communications technology (ICT) and training for staff on security policies, just as there are on health and safety issues.

1.4

Every Member State should have an organisation whose job it is to inform, educate and support the SME sector on issues regarding cyber security best practice. The large firms can easily acquire the knowledge they need but SMEs need support.

1.5

The mandate of the European Network and Information Security Agency (ENISA) should be extended and funding provided to take more direct responsibility for cyber security education and awareness programmes especially targeted at citizens and small and medium-sized enterprises (SMEs).

1.6

Businesses and organisations need to heighten the awareness of responsibility for cyber security at Board-level. The potential corporate liabilities resulting from inadequate cyber security policy and actions should be explicitly communicated to the directors of all organisations.

1.7

Because of their critical role in the provision of online services, all Internet Service Providers (ISPs) in the EU should have special responsibility for protecting their customers from cyber attacks. This responsibility should be defined and enshrined in legislation at EU level.

1.8

To ensure that the great potential for economic growth from the dynamic expansion of cloud computing is quickly realised (1), special security requirements and obligations should also be imposed at EU level on the providers of cloud services.

1.9

The Committee considers that voluntary measures are not enough, and so there need to be strong regulatory obligations on Member States to ensure harmonisation, governance and enforcement of European cyber security. Legislation is also needed to make notification of significant cyber security incidents mandatory for all businesses and organisations, not just for critical infrastructure providers. This would help increase Europe's response to threats, as well as increase the knowledge and understanding of cyber attacks so that better defences can be developed.

1.10

The Committee strongly recommends that the EU takes a design-led approach to tackling the menace of cyber attacks, by ensuring that all the technology and services used in Europe to provide Internet connectivity and online services are designed to provide the highest possible levels of security from cyber attacks. Design considerations should especially focus on the man-machine interface.

1.11

The EESC wants to see substantial cyber security standards developed and disseminated for all ICT networking technology and services by European Standardisation Organisations. These standards should include a compulsory code of practice to ensure that all ICT equipment and Internet services sold to European citizens conform to the highest standards.

1.12

The EU must act without delay to ensure that every Member State has a fully functioning Computer Emergency Response Team (CERT) in place to protect itself and Europe from cyber attacks.

1.13

The Committee demands that the European Cyber Crime Centre (EC3) at Europol receives the additional funding it requires to fight cybercrime and to strengthen cooperation between police forces in Europe and with forces outside the Union, to increase Europe’s capability to capture and prosecute cyber criminals.

1.14

To sum up, the EESC considers that EU cyber security policy needs to deliver in particular on the following points: strong EU leadership; cyber security policies that enhance security while preserving privacy and other fundamental rights; awareness raising among citizens and encouraging proactive protection approaches; comprehensive Member State governance; informed and responsible business action; deep partnership between governments, the private sector and citizens; adequate investment levels; good technical standards and sufficient R&D&I investments; international engagement. To this end, the Committee reiterates its recommendations concerning cyber security policy as voiced out in many previous opinions (2) and calls on the Commission to follow-up on the actions demanded therein.

2.1

The Internet economy generates over one fifth of GDP growth in the EU and 200 million Europeans buy online each year. We depend on the Internet and connected digital technology to support our vital energy, health, government and financial services. However, the critical digital infrastructure and services that play such an essential role in our economic and social lives are vulnerable to a growing risk of cyber attacks that threaten our prosperity and quality of life.

2.2

The Committee believes that the Union’s increasing dependency on the Internet and digital technology is not sufficiently matched by practices and policies that provide an adequate level of cyber security across Europe now and into the future. The purpose of this opinion is to highlight the gaps that the Committee sees in EU cyber security policy and to recommend enhancements that would increase the mitigation of cyber attack risks.

2.3

The motivations for cyber attacks can range from the very personal, for example revenge against a person or a company, to cyber spying by nation states and cyber war between countries. While preparing this opinion, it was decided to narrow the scope to deal purely with criminally motivated cyber attacks, so as to focus the recommendations on the problems of primary concern to the majority of the Committee. The complex political debate on cyber attacks by Member States against citizens and other states might be a topic for a future opinion.

2.4

This opinion deals only with cyber attacks by cyber criminals motivated by money, which account for the vast majority of attacks. By putting in place cyber security policies and practices to deal effectively with cyber attacks for criminal motives, the risks from cyber attacks motivated by political or more personal motives are also reduced.

2.5

Whereas the EU has made good progress with the implementation of the Trust and Security actions in the Digital Agenda and has developed a wide-ranging cyber security strategy that addresses most of the objectives outlined above, more needs to be done.

3.1

A cyber attack is any type of offensive action that targets computer information systems, infrastructures, computer networks, and/or personal digital devices by various means of malicious acts to steal, alter, or destroy a specified target. The target can be money, data or information technology.

3.2

Cyber criminals launch cyber attacks to steal money or data, to commit fraud, criminal espionage or extortion. Cybercrime attacks can damage the essential networks and services that we depend on for health, safety and economic well-being, including government, transport, and energy networks.

3.3

The threat from cyber attacks is keeping pace with our growing dependence on the Internet and digital technology. According to a recent report from Symantec, the total number of data breaches in the world increased by 62 % in 2013, amounting to more than 552 million records exposed. These breaches often exposed real names, birth dates, or government ID numbers, medical records or financial information. Furthermore, 38 % of mobile users have experienced mobile cyber crime in the past 12 months.

3.4

Cyber attacks can have a major impact on individual companies and on Europe's wider economy:

3.5

Cyber attack techniques are constantly evolving:

3.6

There is common agreement among cyber security organisations on the priority actions that citizens and businesses should take to protect themselves from cyber attacks. These practices should be the communicated in every cyber security awareness and education programme:

3.7

Small companies often lack sufficient IT support to keep abreast of potential cyber threats; so they need special help to protect themselves from cyber attacks.

3.8

Disclosure of cyber attacks and system vulnerabilities is essential to combatting cyber attacks, especially when tackling so-called zero-day attacks, i.e. new varieties of attacks not previously known to the cyber security community. However, businesses often do not publicise cyber attacks because of reputational and liability fears. This lack of disclosure hurts Europe's ability to respond speedily and effectively to cyber threats, and to improve general cyber security through shared-learning.

3.9

Citizens and businesses buy Internet access and services through Internet Service Providers (ISP). Because of their critical role in the provision of online services it is vital that ISPs provide the highest possible level of protection from cyber attacks to their customers. In addition to ensuring that their own services and infrastructure are designed and maintained to provide the highest levels of cyber security, the ISPs should provide excellent advice on cyber security to their customers, and should have special protocols in place to help identify and combat cyber attacks on customers as they occur. This responsibility should be defined and enshrined in legislation at EU level.

3.10

Accelerating the adoption of cloud computing by citizens and business in Europe is very important to the economy of the EU (3). As the reliance on cloud computing for personal and business applications increases, it is important for Europe to especially ensure the cyber security of cloud service providers. Uncertainty about the security of cloud services is negatively impacting the rate of adoption of this dynamic technology. The Committee would like the EU to impose special security requirements and obligations on the providers of cloud services to support the growth of cloud computing in Europe.

3.11

Special efforts must be made to recruit employees for Europe's cyber security industry. The demand for graduate-level information security workers is expected to grow by more than twice the rate of increase for the overall computer industry. In this context, the Committee draws the attention of the Commission to the success of competitions in the US and in some Member States, at raising cyber security awareness and cultivating the next generation of cyber security professionals.

3.12

One of the best strategies for protection from cyber attacks is to take a design-led approach by ensuring that all the technology and services used in Europe to provide Internet connectivity and online services are designed to provide the highest possible level of security from cyber attacks. Design considerations should especially focus on the man-machine interface. This would involve collaboration between technology manufacturers, Internet service providers, the cyber security industry, EC3, ENISA, the national defence and security agencies of Member States, and citizens. The organisation of this design approach to cyber security could be organised at EU-level by the Commission and perhaps coordinated by ENISA.

4.1

The EU is developing a comprehensive strategy (4) to increase cyber security for Europe’s citizens:

4.2

The EESC reacted forcefully to the Commission's proposal for the Directive on Network and Information Security (NIS) (6) because the proposed measures were considered too soft and would not push Member States sufficiently to protect their citizens and business against cyber attacks. However, while adopting the proposed Directive, the Parliament further weakened its usefulness by strictly limiting the Directive's application to providers of ‘critical infrastructure’, thus removing its application to search engines, social media platforms, Internet payment gateways and cloud computing services providers.

4.3

The proposed NIS Directive will not now be sufficient to provide the legislation required to enhance threat awareness and responsiveness to cyber attacks in the Union. The Committee would like to see new legislation enacted to make notification of all significant cyber security incidents mandatory, not just for critical infrastructure providers. The lack of mandatory reporting helps cyber criminals thrive on the ignorance of vulnerable targets.

4.4

The EU should consider expanding the mandate of ENISA to strengthen cyber attack threat awareness and response across the Union. Perhaps the role of ENISA could be expanded to take more direct responsibility for cyber security education and awareness programmes especially targeted at citizens and SMEs.

4.5

The European Cyber Crime Centre (EC3) was established at Europol in 2013 to increase Europe’s ability to fight cyber crime. EC3 acts as a central hub in Europe for criminal intelligence and it supports Member States' operations and investigations of cyber attacks. However, in its first annual report EC3 warns that its current resources are already constraining the progress of investigations and that EC3 will not be able to cope with the level of major investigations coming-into it.

4.6

The EU should request the European Standardisation Organisations — CEN, CENELEC and ETSI — to develop cyber security standards for any software, ICT hardware or Internet-based services for sale in the EU. These standards should be continually updated to keep pace with new threats.

4.7

Legislation is needed to make notification of significant cyber security incidents mandatory for all businesses and organisations, not just for critical infrastructure providers. This would help increase the mitigation response to live threats as well as increase knowledge and understanding of cyber attacks being perpetrated, thus helping authorities, the cyber security industry, businesses and citizens to improve cyber security and to combat threats. To encourage the sharing of cyber attack information, any legislation should provide appropriate anonymity for businesses and organisations providing notification of an attack. Considerations should also be given to the provision of liability protection where appropriate.

4.8

Despite the initiatives undertaken by the EU, the Member States have very different levels of capabilities and preparedness, leading to fragmented responses to cyber attacks across the EU. Given the fact that networks and systems are interconnected, those Member States with a very weak approach to cyber security weaken the overall ability of the EU to deal with cyber attacks. Action is needed to bring all Member States up to an acceptable level of cyber security. Special attention is needed to ensure that every MS has a fully functioning Computer Emergency Response Team (CERT) in place.

4.9

As advised in previous opinions (7), to increase EU protection from cyber attacks, the Committee believes that voluntary measures do not work and that there need to be strong regulatory obligations on Member States to ensure harmonisation, governance and enforcement of European cyber security.

4.10

In summary, to put itself in a position to provide real and updated protection to citizens and businesses from cyber attacks, that EU cyber security policy should focus on the following actions:

16.12.2014   

EN

Official Journal of the European Union

C 451/39

Rapporteur:

Marina Škrabalo

1.1

The EU's enlargement policy, while perhaps not the most popular EU policy area, is among the most successful political projects of the EU. In recent years, there have been a number of improvements to the transparency and inclusiveness of the accession process, as has been apparent in the current processes in Serbia and Montenegro. The strategic shift of the EU institutions towards the fundamentals — the rule of law and economic governance — creates an opportunity to foster participatory democracy within, rather than in parallel with, enlargement policy as a whole.

1.2

Nevertheless, there are several challenges ahead. Greater consistency is needed to ensure that both the EU institutions and the governments concerned adopt a transparent and inclusive approach throughout the accession process, across all policy areas and in all candidate and potential candidate countries. There is a need for tighter policy integration as regards (1) the actual negotiations (2) fostering civil society development and social dialogue and (3) institutional capacity building, all of which should be more appropriately reflected in the funding of pre-accession assistance.

1.3

The EESC recommends that the European Commission, the Council of the European Union and the European Parliament:

1.4

The EESC recommends that the national governments of negotiating countries:

1.5

Recommendations for the EESC:

2.1

While some of its long-term societal and political effects are open to question, the EU's enlargement policy has clearly been instrumental in accelerating changes in national governance structures towards market economies and democracies, as well as in fostering regional cooperation in the post-war Western Balkans. In terms of the scope of the EU accession negotiations, the transition periods for implementing EU legislation are a key issue, as are the related financial costs for both the EU and the candidate countries. As the opening and closing of each negotiation chapter is subject to a unanimous vote at the Council, the pace and timing of negotiations can be highly unpredictable in view of the potential impact of national politics in one or more Member States.

2.2

The EU has proved to be open towards improving and adjusting the negotiation process in line with changing political circumstances. It is important to note that the current negotiation methodology has greatly evolved over the years, based on this ‘learning by doing’ approach.

2.3

As announced in the Commission’s Enlargement Strategy and Main Challenges 2013-2014  (4), ‘a key lesson from the past is the importance of addressing the fundamentals first’, starting with the rule of law, which has been ‘placed at the heart of the enlargement process’. This represents a significant strategic shift from specific policy adjustments to the broad issue of democratic governance, finally understood as prerequisites for meaningful and sustainable policy harmonisation with the EU acquis. Accordingly, during the ongoing accession negotiations (Montenegro, Serbia, Turkey) the Commission intends to keep Chapters 23 (Judiciary and Fundamental Rights) and 24 (Justice, Freedom and Security) open throughout the accession negotiations, the pace of which may well depend on the progress made in these two critical chapters.

2.4

On the one hand, changes in the negotiation methodology used in the accession process are an indication of the EU's flexibility and its genuine concern for ensuring the effectiveness of negotiations. The greater attention given to ‘evidence-based’ enlargement has strengthened the position of non-state actors, whose independent information is valuable for the regular assessments made by the Commission in its progress reports. On the other hand, the changes introduced may be perceived as primarily reflecting the EU's selective need for evidence while ignoring the administrative burdens they impose on negotiating countries, unless there are clear procedures for data collection and stakeholder engagement.

2.5

The Negotiating Framework with Serbia  (5) is the first negotiating framework to refer explicitly to the principles of inclusiveness and transparency: ‘In order to strengthen public confidence in the enlargement process, decisions will be taken as openly as possible so as to ensure greater transparency. Internal consultations and deliberations will be protected to the extent necessary in order to safeguard the decision-making process, in accordance with EU legislation on public access to documents in all areas of Union activities.’ This is an important lesson learned from the case of Croatia — where voter turnout in the EU referendum was the lowest ever (43 %) — and represents a step towards the formalisation of a number of improved practices in the case of Montenegro.

2.6

The EU's stronger focus on economic governance envisages the introduction of national economic reform strategies and action plans for public financial management, in the hope that more timely information and macroeconomic surveillance might help prevent a protracted economic recession and an excessive deficit, which occurred in Croatia immediately after its accession. Accordingly, it is planned that enlargement countries will undergo scrutiny comparable to that of the EU Member States under the ‘European Semester’. It is essential to ensure the timely preparation of the business sector in order to help companies become more competitive and face the challenges of the EU's single market, while the involvement of social partners is critical for assessing and agreeing the social dimension of the economic reforms.

2.7

According to the DG Enlargement Guidelines for EU Support to Media Freedom and Media Integrity in Enlargement Countries, 2014-2020  (6), a vibrant civil society is critical for stimulating pluralism and participatory democracy. EU support for civil society should therefore focus on (1) achieving an environment that is conducive to civil society activities and (2) to building the capacity of CSOs so they can function as effective and accountable independent actors. These guidelines would appear to be a useful tool for the integration of civil society provided that their implementation is in line with their level of ambition.

2.8

So far, enlargement policy has failed to fully respond to the challenge of informing EU citizens about its vital importance for the security and prosperity of the entire continent, which could help allay the fears of further enlargement that can surface along with other forms of xenophobia, especially in times of economic crisis. As the memories of the Balkan wars fade, the current crisis in Ukraine can act as a reminder that a lack of peace and democracy can affect us all.

3.1

Although the accession process does not provide for conditionality in the area of transparency and inclusiveness, public expectations in this area are increasing in those countries negotiating their EU accession. In the case of Croatia, there was a lack of information about the technical procedures for negotiations: although a protocol on internal policy coordination on EU negotiation positions was adopted, it was never actually published in the official gazette. All EU negotiation related documents produced by the Croatian Government, other than legal drafts, were discussed and adopted during government sessions held in camera. This meant that the public could not even request non-classified documents as there was no formal information about their existence. It took several years of civil society pressure before the government began to publish basic information about the documents discussed during the sessions.

3.2

In terms of parliamentary oversight, Slovenia’s good practice was unprecedented — the national parliament had the right to veto negotiation positions (7), which were also disclosed to the public. While the Croatian Parliament acted competently as a guardian of the political consensus throughout six years of cumbersome EU negotiations, it fell short of catalysing the broader engagement of parliamentarians, experts and general public in policy deliberations. Negotiation positions and reports were restricted to government officials and selected groups of members of the National Committee for Monitoring the Accession Negotiations, resulting in the virtual exclusion of the vast majority of MPs, let alone the general public. This scenario should not be repeated in the forthcoming rounds of negotiations.

3.3

Timely insight on the part of non-state actors and the media and the independent monitoring of the negotiation process were also hindered by the fact that the documents produced by the European Commission and the Council, such as EU Common Positions, were not the property of the Republic of Croatia. As a result, the Croatian government claimed that it had no authority to disclose them. This was accompanied by a lack of proactive disclosure on the part of the EU institutions (8).

3.4

There has been a clear improvement in the disclosure of negotiation-related documents in the case of Montenegro. The Commission has published all screening reports on its website, which may serve as valuable diagnostic tools for all stakeholders on the non-compliance of national legislation with the EU acquis. Furthermore, the Council has proactively published the EU Common Positions for Chapters 23 and 24 in view of the significance and public interest in the reforms involved. It remains to be seen if this good practice will translate into a policy to be followed in the case of Serbia and Turkey or with regard to those chapters already open. In addition, there is no formal reason why the Council should not be able to publish the opening benchmarks in full once they have been unanimously approved. Timely access to these key documents for negotiations is crucial for civil society input and contribution, informed media reporting and independent monitoring of the governments’ actions to meet their obligations.

3.5

Drawing on the lessons learned from past rounds of enlargement, the Commission has become more sensitive to the vital role of independent and professional media, as evidenced by the organisation of two conferences entitled Speak-Up in 2011 and 2013 and by the adoption of the Guidelines for EU Support to Media Freedom and Media Integrity in Enlargement Countries, 2014-2020, which should also serve as a basis for funding allocations. One challenge that remains, however, is how to ensure media outreach to EU-based audiences, who also need to be aptly informed about the meaning and dynamics of enlargement policy.

4.1

Civil society engagement in the accession process consists of (1) direct involvement in the actual negotiations (i.e. screening, preparation of national positions, oversight of progress) (2) social and civil dialogue related to policy formulation and legislative harmonisation with the acquis (3) participation in the programming of pre-accession funding (4) independent monitoring of progress and social effects of the reform processes. The performance of these roles requires adequate financial support, through national government and EU pre-accession funding.

4.2

The Croatian and Montenegrin working groups for the preparation of negotiation positions included a high proportion of civil society experts (over one third of all members). In both cases, open calls for applications were organised and the names of all working groups' members were published. Yet, in the case of Croatia, the scope of involvement was largely dependent on the leadership style within each group: in some cases, civil society members did not have an opportunity to see the draft negotiation positions required. Accordingly, civil society input primarily concerned the initial screening phase, with little impact on the design of the negotiation strategy and early assessments of social and economic costs and benefits.

4.3

The EU institutions have provided several channels for consultation with civil society in order to collect evidence on the progress of accession-related reforms, including online correspondence, annual civil society consultations in Brussels, in-country meetings, briefings and public events during visits by EU officials. The Commission has also been open to independent monitoring reports prepared by civil society organisations. Yet the Commission has admittedly been much more proactive towards NGOs than towards trade unions and business associations. This is evident in terms of both the level of contact as well as the scope and purpose of pre-accession funding schemes for capacity building and policy monitoring.

4.4

If we look back at Croatia's accession process, it represents a missed opportunity to strengthen social dialogue in the country in connection with its EU accession, which could have helped to ensure more effective and sustainable conditions for Croatia's EU membership, as had happened in Bulgaria. National economic and social councils were not sufficiently used to debate the social and economic adjustment costs and support measures, nor for the programming of pre-accession assistance. A very low proportion of pre-accession funding was directed towards strengthening social dialogue structures and the organisational capacities of the social partners. The capillary structure of the business associations and trade unions should be used more fully as key platforms for the deliberation of the accession costs and benefits and the timely preparation of the economy.

4.5

In terms of policy formulation, in the case of Croatia and in line with negative trends in the previous rounds of accession, over 80 % of acquis-related legislation was fast tracked, often without any public consultation, with a minimum scope of regulatory impact assessments (RIAs), damaging the quality and transparency of the legislative drafting (9). On a more positive note, the programming of the Instrument for pre-accession assistance (IPA) was inclusive, especially as regards the civil society component, and was steered by the Council for Civil Society Development, with technical support from the Government Office for Civil Society. This led to the development of highly relevant grant schemes, supportive of independent policy monitoring in several critical reform areas and allowed for the important intervention of social partners in allocating funding for strengthening competences for social dialogue. The inconsistency between the two processes described above should be avoided and the inclusive approach in policy-making should always prevail in the forthcoming accession processes.

5.1

As a strong supporter of enlargement policy, the EESC has set up joint consultative committees (JCC), which bring together CSOs in order to draw up recommendations for the political authorities on both sides and to foster public debate on EU integration in enlargement countries. These structures have enabled informed discussions about the negotiations, based on multiple perspectives, and made it possible to identify the consequences of adopting the EU acquis for different sections of society, supporting civil society engagement in the process. In addition to the JCCs, the Western Balkans Civil Society Forum serves as a regional platform for addressing political authorities and provides opportunities for networking among WB CSOs, while analysing the major problems of civil society in the region.

5.2

The following list includes some of the challenges identified in the work of the JCCs:

5.3

Increasing awareness about the role of civil society and including social partners in the accession process has been both a mission and a challenge for the EESC. In some countries, governments have maintained a negative attitude towards civil society and, as a result, JCC recommendations have had little resonance. Nevertheless, JCCs have created opportunities for direct exchanges between civil society, EU and national politicians and officials, even if they have had little impact on government policies. With this in mind, JCCs would benefit greatly from stronger backing and closer cooperation with the Commission, the Council and the EP, ensuring that key concerns about the national realities of accession, stemming from the civil and social dialogue in the countries, may be heard in all relevant policy-making arenas.

16.12.2014   

EN

Official Journal of the European Union

C 451/45

Rapporteur:

Edgardo Maria IOZIA

1.1

The European Economic and Social Committee (EESC) expresses its firm support for the structural reform of the banking system, considering it to be the most crucial of the many legislative initiatives introduced as a consequence of the financial crisis. The EESC stresses the fact that this reform is the first to undertake a deep regulatory overhaul at the heart of the banking system and to complete the banking union. Moreover, it can make an important contribution to restoring confidence among businesses and the public, and, in the interests of proper financing for the economy, to strengthening the European banking system and reducing the risk of contagion.

1.2

The EESC is convinced of the absolute necessity of this regulation, which will redefine the management of a complex range of banking and financial services. It is clear to the Committee that the proposed regulation will not be enough to avoid another crisis. This requires a major change in financial culture and the endorsement of ethical principles in the everyday activities of the financial sector. All direct stakeholders should be involved in the construction of a new financial and economic system in order to create a sustainable and resilient finance sector and to find the best balance possible between the interests of all concerned. To this end, the EESC supports and encourages a broad agreement to boost the economy and restore trust in the financial institutions, and calls on the Commission to promote a European Social Pact for Sustainable Finance. Employees, management, shareholders, investors, families, SME’s, industries, commercial customers should find a stable and fair agreement in order to create a financial services industry that is geared to developing prosperity, supporting the real economy, growth and good jobs, and to respecting the environment and avoiding undesirable negative social consequences.

1.3

The EESC draws attention to the need to ensure that the national authorities use uniform criteria and recommends that this legislation be applied uniformly at EU level, and possibly be agreed with the national authorities of third countries.

1.4

The Committee expresses doubts about the decision to allow the coexistence of various national regulations and, at the same time, the EU regulation. The EESC believes that such a framework might not guarantee the uniform application of the new rules. It welcomes the fact that this derogation has been established solely for legislation that pre-exists the proposal for a regulation, provided that complete equivalence with the regulation under consideration is guaranteed.

1.5

The EESC considers the Commission's proposal for a regulation to be a valid and effective response aimed at separating commercial banking activities from investment activities. Indeed, the chosen solution, as compared with the alternatives taken by some countries, is based on dialogue and assessment, which makes it possible to avoid contradiction with the universal banking model by preserving it and acting solely on the excessive risks associated with this model.

1.6

The EESC stresses that the impact of the proposed legislation on jobs has not been given appropriate consideration. Hundreds of thousands of jobs could be lost due to the overall regulation of financial services and it is unacceptable that no measures have been planned to reduce the substantial direct and indirect social impact. This regulation may have a limited direct impact but the influence it could have on the assets of businesses would reverberate throughout the financial system. However, it has to be acknowledged that the reduced banking risk would benefit the real economy as a whole, with unquestionable benefits for employment in general.

1.7

There are serious concerns that the costs will be passed on to employees. Although the Commission has taken this aspect into account in its impact assessment, it seems to have given little space to this problem in the reform. Although it is true that the activities affected by the reform are the least labour intensive, the indirect effects of the reform will lead to cost-cutting policies that could result in further job cuts, as key banks have forewarned.

1.8

There are many forces (financial lobbies, large Member States, consumers and investors, households, large and small businesses, associations, etc.) and widely differing interests at play. The lesson derived from a time when the financial system's rules prevailed should be clear by now: it is the public interest that must prevail. The Committee therefore advocates a change of tack that places the common interest at the centre, in a way that balances the interests of all stakeholders, since it is convinced that this is the only way in which the reform can work effectively.

1.9

The EESC is convinced that in order to ensure a sustainable financial system, we need ‘patient finance’ which stops seeking short-term profits at all costs and prioritises efficiency and long-term stability. This regulation proposes a change in the business model.

1.10

The EESC believes that the Commission should give greater attention to investors and employees, who have hitherto received little attention in the reform. In the long term, the system's sustainability is ensured by the renewed confidence injected by a more secure environment for investors as well as employees, who play an active part in the risk management process.

1.11

The EESC believes that flexibility in the application of the regulation is a valid and appropriate principle. The ‘biodiversity’ (1) of banking businesses is in fact a guarantee of the system's stability and efficiency. Nevertheless, the EESC would point out that this must not be confused with the arbitrary application of rules.

1.12

The EESC advises the Commission to include in its Impact Assessment a detailed assessment of the interaction of the key proposals of the current regulation with other recently undertaken initiatives such as CRDIV, BRRD, SRM, etc., as well as an assessment of the risks of migration towards shadow banks.

1.13

The EESC recommends that oversight activities be carried out in close cooperation and coordination between the EBA and the national authorities, which are well-acquainted with the markets and which will play a key role in managing the new reformed European finance.

2.1

According to the Commission, this proposal represents a critical part of the Union response to tackling the ‘Too-Big-To-Fail’ dilemma. It aims at preventing unmonitored and unmanaged risks in the Union banking system. It will curtail the expansion of activities of a purely speculative nature.

2.2

The regulation seeks to prevent systemic risk, financial stress or failure of large, complex and interconnected entities in the financial system, in particular credit institutions, and to meet the following objectives:

2.3

Other types of additional financial services/products (securitisation, corporate bonds, derivatives, etc.) should therefore continue to be allowed.

3.1

The Commission estimates that the financial crisis cost EU governments around EUR 1,6 trillion (13 % of EU GDP) in state aid as a result of bailouts in the financial sector.

3.2

The EU banking sector is highly concentrated: 14 European banking groups are listed as global systemically important financial institutions (SIFIs), and 15 European banking groups own 43 % of the market, in terms of asset size, and represent 150 % of EU-27 GDP, with 65 % in the hands of the first 30 groups!

3.3

The financial crisis, which began in the United States but had a tsunami effect on the European system, had many causes, but the main ones may be considered to be excessive risk-taking, excessive leverage, inadequate capital and liquidity requirements and the complexity of the overall banking system.

3.3.1

In October 2012, the Liikanen group made the following statement: ‘It is necessary to require legal separation of certain particularly risky financial activities from deposit taking banks within the banking group. The activities to be separated would include proprietary trading of securities and derivatives, and certain other activities closely linked with securities and derivatives markets’ (2).

3.4

Through this proposal, the Commission seeks to reduce risk margins in the banking system and bring potentially speculative operations under control. This should be considered jointly with the related regulation on securities financing transactions (3), which seeks to make so-called ‘shadow banking’ less opaque. At the end of 2012, global shadow banking assets accounted for EUR 53 trillion, representing about half the assets of the international banking system, and were mainly concentrated in Europe, with around EUR 23 trillion, and in the United States, with around EUR 19,3 trillion. These figures are impressive when compared to the total EU-28 GDP, which did not exceed EUR 13,071 trillion in 2013 (Eurostat).

3.5

The European Parliament's McCarthy resolution (4) sets out a number of key principles, and states, inter alia, that ‘the core principle of banking reform must be to deliver a safe, stable and efficient banking system that serves the needs of the real economy, customers and consumers (...) structural reform must stimulate economic growth by supporting the provision of credit to the economy, in particular to SMEs and start-ups, provide greater resilience against potential financial crises, restore trust and confidence in banks and remove risks to public finances; (...) an effective banking system must deliver a change in banking culture in order to reduce complexity, enhance competition, limit interconnectedness between risky and commercial activities, improve corporate governance, create a responsible remuneration system, allow effective bank resolution and recovery, reinforce bank capital and deliver credit to the real economy’.

The new oversight of international markets has emerged stronger, more far-reaching and, above all, with more powers than previously held, with less discretion and better guarantees for the market and end users.

4.1

The Committee believes that the Commission is on the right track but thinks that it would be useful to present it with certain views that emerged during discussions with the various stakeholders and which may not have been given sufficient thought. The EESC therefore draws its attention to some of the key points raised by stakeholders. These do not fully represent the views of the EESC but nevertheless deserve to be reported faithfully.

4.2

The reform under consideration was generally well-received. In fact the majority considered the prohibition of proprietary trading and the separation of traditional activities from trading to be the right instruments to curb speculation on financial products and to boost bank lending, a key source of finance for SMEs which has fallen considerably in recent years due to policies concerning speculation on trading.

4.3

It is important for the application of the reform to accommodate the wide range of business models in order to ensure that local banks can continue to serve local economies.

4.4

The business model of mutual and cooperative banks deserves special consideration. The reform is not believed to be particularly adapted or adaptable to their specific network. The main concern expressed was that the reform could impair the way they worked and their capacity to be present on the ground on a daily basis in order to support the real economy. The recommendation is therefore to preserve their specific character and different ways of doing business.

4.5

The reform, alongside the numerous measures taken by the Commission in recent years, will improve the transparency of individual transactions and the banking system in general, but will also increase their overall costs at various levels. In this regard, the discussion clearly revealed the need for an overall impact assessment of the financial regulatory reforms despite awareness of the complexity of such an evaluation.

4.6

There were concerns that these costs would, as often occurs, be passed on to the end consumer of financial services. There was discussion as to whether the positive effects which the new measures were expected to have, for instance in terms of the banking system's stability, might be outweighed by the detrimental effects.

4.7

Regarding the whistleblower protection system, the Committee and those social partners that mentioned the issue praised the Commission for the system of rules which it had put forward. There were calls for the term ‘appropriate protection’ to be more clearly defined (Article 30) and to clarify the extension of the proposed rules to all employees, encouraging and motivating them to report any breaches.

4.8

With regard to the sanctions referred to in Articles 28 and 29, it is advocated that liability for any breaches should be established primarily at the level of the institution, in relation to governance, and not the individual.

4.9

On the other hand, with respect to the remuneration system, an explicit reference to the provisions of Article 69 of the Capital Requirements Directive (CRD) IV is advocated.

5.1

The EESC welcomes the measures set out in the Commission's proposal and agrees that a regulation is the right choice of legal instrument since it fits the purpose of harmonising the single market in order to avoid regulatory arbitrage and return to an efficient and productive banking system which serves the public and the community, supports the real economy, households and balanced and sustainable social development and which is far-sighted and knows how to combine innovation with security.

5.2

The EESC has been determined in its support of the ensuing reforms, which have started to bear their first fruit. The regulation under consideration addresses one of the most complex and sensitive aspects of the entire system: the resilience and legal structure of financial firms, some of which have assets that exceed the GDP of many Member States. The total assets of the top ten European banks exceed the GDP of EU-28 (5) (over EUR 15 trillion).

5.3

The proposed regulation aims to cut right through the Gordian knot created by the size, interconnections and complexity of some so-called ‘systemic’ institutions, meaning those that can trigger a systemic crisis. ‘Too-big-to-fail’ has now become a mantra which conceals actions that are not only in breach of the most elementary ethical principles, but also constitute fraud and breaches of law, as recent and very recent financial scandals unfortunately continue to show. These practices are euphemistically covered by the term ‘moral hazard’!

5.4

Commissioner Barnier launched the proposal by announcing that the objective was to prevent the existence of banks that were ‘too-big-to-fail, too-costly-to-save, too-complex-to-resolve’.

5.5

The EESC believes the proposed measures are on the right track, reducing the risk that taxpayers will have to step in again to save failing banks. Following the repeated bailouts, the EESC had warned against the disastrous effects they would have on sovereign debts and consequently the harmful effects of a recession that was clearly inevitable. Unfortunately, these forecasts materialised with even worse consequences than had been predicted, due to the unbelievable mistakes over the impact of a growing number of budget consolidation policies resulting from national requirements or a short-sighted and misguided EU policy, which was blind to the need for flexibility and compensatory anti-recessionary measures.

5.5.1

It is only now that we can fully appreciate the damage caused by this policy and we must acknowledge that it was only the European Central Bank's enlightened management of the Eurozone that prevented the worst and saved the euro, and ultimately the Union. Had the EESC's advice been heeded, much of this damage might have been avoided!

5.6

The Commission has rightly given the European Banking Authority (EBA) a decisive role for the purposes of this regulation. The EBA will be consulted in the event that some of the decisions envisaged in this proposal need to be adopted. Furthermore, it will be tasked with preparing draft regulatory technical and implementing standards and will have to update the Commission on the implementation of the regulation by submitting reports. The EESC had on several occasions pointed out that despite the undisputed existence of expertise, the Commission was not providing this important authority with sufficient responsibilities and resources.

5.7

In 1999, a law was adopted in the United States repealing the Glass-Steagall Act, and in particular the separation between commercial and investment banking. Unfortunately, the EU also followed the US administration's disastrous decision. The EESC notes that the current provisions effectively reinstate the separation between these two areas of activity and go even further since, barring a few exceptions, they prohibit credit institutions that take deposits from dealing in investments as a principal and holding trading assets.

5.7.1

It is crucial that the EU works closely with third countries, especially the USA, in order to proceed to a common substantial approach to the regulation. The EESC urges the Commission to strengthen the international cooperation.

5.8

The proposal for a regulation leaves the relevant authorities considerable room for discretion. It is vital for them to take action and base their assessments on clear, harmonised and foreseeable criteria that define when a bank is no longer able to manage its own levels of high-risk trading activities. Without a common reference framework, the risk of subjective interpretations could lead to the opposite of the desired effects, which are consistent with the provisions of Article 114 of the TFEU.

5.9

The EESC welcomes the Commission's ultimate decision to opt for an ex-post rather than an ex-ante separation of market and other proprietary trading activities: the technical standards rightly entrusted to the EBA are therefore essential. In view of the application of the rules on resolution and, in particular, the establishment of the resolution authority, approved by the Ecofin Council in December 2013, the EESC advocates the immediate development of arrangements for the coordination and identification of the national and European authorities' responsibilities, in order to avoid the risk of duplicate decisions or, worse still, of conflicting interpretations and assessments by the relevant authorities. As soon as the single resolution authority is set up, it should participate in developing the mechanism, as well as in defining the technical standards alongside the EBA.

5.10

The EESC does not agree with the criticisms levelled at the Commission concerning the relative importance of activities that might be subject to separation. In some credit institutions, their weight was extremely substantial and the lack of specific rules exposed them to a very high risk that could have led to a systemic crisis far worse than the one that actually occurred, with predictably disastrous effects on settlement systems and the economy in general. Disaster was only averted by fresh injections of taxpayers' money and the ECB's reaction capacity.

5.11

The EESC welcomes and supports the Commission's inclusion of explicit provisions to protect financial sector professionals who are exposed to severe repercussions for making public interest disclosures of irregularities but are then faced with retaliatory mobbing or even dismissal. This internal monitoring, referred to as whistleblowing must be encouraged and supported. Regulatory compliance is often lax, circumvented or even breached, exposing banking institutions and their staff to incalculable risks. Recently exposed practices, which breach all standards or laws, by sometimes well-known and highly respected firms could only have happened with the active collaboration of people working for them!

5.11.1

The EESC calls on the Commission to develop specific monitoring of the Member States' obligations to adopt legislation providing adequate protection and to present a report on the issue within two years of the regulation's entry into force.

5.12

The EESC is very aware of the issues surrounding relations with third countries, especially with regard to reciprocity and regulatory compliance by all entities operating in the EU. It considers the Commission's approach to be balanced and supports the arrangements it puts forward in this connection. It advocates pursuing and stepping up cooperation with the United States, especially in the area of financial regulation, in order to develop systems that are as homogeneous as possible and which take a uniform approach to the same problems.

5.13

Furthermore, the EESC welcomes the fact that the Commission's regulations have started to provide an adequate response to one of the points that the Committee has frequently emphasised in the past, in this instance, with regard to administrative sanctions, since criminal sanctions are outside the Commission's scope of action. The Commission's proposals appear proportionate, appropriate and dissuasive.

5.14

The EESC has expressed its reservations about the use of delegated acts on many previous occasions. Although it acknowledges the importance of adapting legislation over the years, the EESC points out that the use of delegated acts introduces elements of uncertainty that are inadvisable in this area.

16.12.2014   

EN

Official Journal of the European Union

C 451/51

Rapporteur:

Daniela RONDINELLI

1.1

The European Economic and Social Committee (EESC) welcomes the roadmap for completing the single market in delivery of products sold online, which has great potential for growth and jobs. Efficient, reliable delivery services constitute an essential pillar for promoting e-commerce and strengthening trust between sellers and purchasers.

1.2

In the EESC's view, completing the single market in delivery services and closing the significant gap between expectations, protection and actual availability requires: shared responsibilities, tracking and tracing, and interoperability; access to the widest possible choice throughout the EU including the island territories; certainty of rights and responsibilities of those involved — particularly SMEs and consumers — especially as regards complaints and returns; simple and comparable data collection; and a strong social and educational dimension.

1.3

The EESC reiterates (1) that this objective ought to be based not just on voluntary agreements and codes, desirable though these are, but also on a minimum European regulatory framework, which can respond efficiently and in a flexible way to the unresolved shortcomings in the market which discourage consumers and SMEs to buy e-commerce, and can resolve the problems relating to:

1.4

The EESC calls for the roadmap to give clear timescales and a set timetable for implementation, both of legislation and of self-regulation, to optimise levels of confidence amongst all the relevant stakeholders and, in particular, the European public, whilst fully respecting and protecting their reciprocal rights.

1.5

The EESC calls for the roadmap to provide for two additional measures: one on accessibility of the service at an affordable cost and another on the social dimension of the market.

1.6

The EESC recommends to the Commission, the EP and the Council that:

1.7

The EESC calls on the EC to present — with the support of EUROFOUND — a biennial report on employment and working conditions in the sector, on the conditions for consumers and operators along the entire chain, and their prospects for development, to be submitted to the EESC, the Parliament (EP), the Council and the social partners.

2.1

In Europe, e-commerce is a potential driver of economic growth and rising employment estimated at over 10 % between 2013 and 2016 (5). 45 % of EU citizens have made online purchases in the last 12 months and have confirmed that the majority of problems arose from deliveries or delays in delivery (6).

2.2

The EC has identified (7) the ‘main obstacles to the Digital Single Market and […] an action plan to remove them’, but ‘10 % of people [...] do not buy online (8) because they are concerned about the cost of delivery services, in particular cross-border delivery, and about service quality’.

2.3

In its opinion on the Green Paper (9), the EESC asked for a directive to be drawn up to define a joint regime for online sellers, tracking and tracing of deliveries, the obligation to offer a choice of delivery options, a European network of national problem solving centres, the obligation to provide fair working conditions, and transparency regarding conditions and prices.

2.4

Following the debate on the Green Paper, the communication on the roadmap for completing the single market in parcel delivery for online sales was published in December 2013 (10).

2.5

According to recent worldwide surveys (11), the most difficult issues affecting the development of business-to-consumer (B2C) e-commerce are:

2.6

The EC states that there is still a lack of ‘relevant market data on domestic and cross-border parcel flows from all postal service providers active on the B2C and B2B parcel markets, including intermediaries, consolidators and alternative operators’ (12).

2.7

Various studies confirm that ‘the potential for anticompetitive behaviour appears higher is [sic] some segments of the postal sector than in others so that particular regulatory vigilance may be more appropriate in, for example, [...] business to consumer (B2C) markets compared to business to business services (B2B); cross-border services compared [to] domestic postal services’ (13).

2.8

The EESC is pleased that a significant proportion of the problems raised in its opinion on the Green Paper have been taken up. The Council (14) and the EP (15), too, have called upon the Commission to identify the current barriers to cross-border parcel delivery services and to adopt appropriate measures to address them, and the European Parliament has also called (16) for accessible, affordable, efficient, and high-quality delivery services and for platforms for cooperation and information exchange between delivery operators with rapid, low-cost dispute and complaint handling.

3.1

The EESC considers important to restore SMEs' and online consumers' trust with interoperable networks and systems for rapid, low-cost management systems within an appropriate framework of regulation and self-regulation accepted by all operators in the chain to have a free and open internal market, avoiding any unnecessary overregulation. Therefore it calls for the roadmap to be implemented within a clear timescale according to a set timetable of 18-months foreseen.

3.2

The EESC considers that the EU should complete the single market in parcel delivery in such a way as to ensure speed, quality, reliability and affordability for consumers, workers and all operators, including SMEs in the e-commerce, transport and logistics sectors, thus putting right the current deficiencies and anomalies in the single market.

3.3

However, the EESC expected that the Communication would also make specific reference to the situation of geographically challenged regions such as islands, outermost regions and mountains, since the Committee understands that these regions pose specific challenges difficult to overcome, particularly due to economic feasibilities: a truly complete single market for parcel delivery can be achieved only if these regions are given due consideration and action is taken accordingly.

3.4

The EESC considers that, in essence, the framework of the actions proposed is based exclusively on voluntary self-regulation, on the rules governing national postal services, on the action of the European Regulators Group of Postal Services and on principles of proper implementation of existing European law without setting out a unified framework for all operators and without stipulating precise deadlines within the specified 18 months.

3.5

The EESC notes that the roadmap does not yet make provision, alongside self-regulation processes, for the need for a directive — already requested by the EESC (17) — that could fully, consistently and completely meet the requirements of completing the single market in cross-border parcel delivery for all operators in the sector.

3.6

The EESC considers that the EU must provide a European solution in the form of promoting self-regulation and regulation to address unresolved problems in the market and to protect consumers and SMEs (B2B) relating to:

3.7

Although the proposals refer to compatibility with the 2014-2020 EU financial framework, the EESC considers that the roadmap cannot omit explicit guidance on relevant EU financial instruments for:

3.8

The EESC recommends that the EC proceed with mandating the CEN to draw up European technical and regulatory standards with the full involvement of all interested parties, particularly SMEs and consumers. It also considers that indicators for a European security and quality mark for delivery services should be drawn up so as to ensure quality and reliability, sustainability and social and security guarantees.

4.1

The EESC sees the need to provide for two further actions in relation to guaranteeing accessibility and to the social dimension of the market.

4.1.1.1

The EESC requests that the award of the quality mark should include a requirement to guarantee affordable market access and availability in all of the EU. The EESC is disappointed to see that the peripheral areas and islands have not been given specific consideration and therefore expects the new regulation to cover the target of geographic vulnerability in the e-commerce market because a substantial percentage of European citizens lives in these areas.

4.1.1.2

The EESC considers that all operators should be given full access to information bodies and resources used in supplying parcel delivery services to protect the interests of users and/or to promote effective competition.

4.1.1.3

The EESC asks that the Commission review the 1998 Notice on the application of competition rules to the sector in the light of regulatory and market developments that affect cross-border services and standard costs, towards more liberal and cost-oriented policies (18), in accordance with the provisions of Protocol No 26 appended to the Treaty of Lisbon, particularly with regard to universal access to and affordability of services of general economic interest.

4.1.2.1

The EESC calls for a sound and consistent social dimension that is capable, in combination with the innovation efforts made by the industry, of providing high quality skilled jobs, not least by ensuring access to suitable opportunities for basic and further training.

4.1.2.2

The EESC reiterates the need for fair and decent pay and working conditions so as to eliminate insecure and undeclared work, particularly in outsourced ‘last mile’ tasks. It stresses the terms of Regulation (EU) 1071/2009 on access to the profession, of Decision 2009/992/EU and of Regulation (EU) no 1213/2010, which establish a definition of ‘employment relationship’ that enables action to be taken against bogus self-employment, as recalled in a recent EESC opinion (19).

4.1.2.3

The Committee recommends the establishment of an enlarged sectoral European social dialogue involving the representative social partners of the sectors involved in the entire chain of online sales and parcel delivery (commercial, postal, transport and logistics) to deal with issues relating to employment and working conditions, the prospects for development, innovation, and optimisation of human resources.