21.10.2016   

EN

Official Journal of the European Union

C 389/1

1.

The European Economic and Social Committee expresses its deep concern about the state of the European Union. The current political and economic context, in an environment of increasing mistrust on the part of European citizens towards the EU integration process, means that the European Commission must work to restore a spirit of solidarity and responsibility, as already stated in the Work Programme for 2016. There are growing signs of a lack of will on the part of Member States to find common and cohesive solutions. At the same time, convincing citizens of their ownership of the EU’s objectives should be a cornerstone of EU action.

2.

The refugee crisis requires urgent humanitarian action. At the same time, special attention must be devoted to the difficulty incurred by European governments in advancing solutions that are agreed upon by all European citizens, who are feeling insecure and afraid. Safe legal corridors have to be opened and the EU has to move firmly towards a Common Asylum System, finalising the policy and legislative initiatives issued in May and July of 2016. The European Commission should increase efforts to enforce the rule of law in the implementation of the EU acquis in the fields of migration and asylum and ensure responsible management of the Schengen Area in order to restore mutual trust and the sustainability of the area of free movement. Jeopardising the Schengen Agreement would strike at the heart of the European project and restrict its progress. The just demand for more regulated control and management — in full compliance with the rule of law — of external borders, the general public’s legitimate request for greater safety and security, and the demand for closer cooperation in the fight against terrorism cannot mean erecting barriers within the EU and restricting the free movement of people.

3.

Greater concern is caused by the spread of anti-European sentiments and the increasing political representation of xenophobic and populist movements in national parliaments and in society at large, which threaten democratic values in Europe. In some Member States these movements are in a position to influence the government. This hostility towards Europe as a whole can lead to a risky debate on opt-out mechanisms granted to governments based on their respective contemporary political needs, as the Brexit debate has demonstrated. The EU needs to respond to this drift towards protectionism and nationalism by also confronting it on a cultural level.

4.

However, we should not forget or undermine the achievements that the EU has secured so far and economic integration has now to be completed with deeper political and social integration. The single market is a core element of European integration and the functioning of the playing field has to be preserved at all costs. Citizens must form an active part of this progress. Dialogue at local, national and European levels must be strengthened and structured with the help of civil society, including social partners who are crucial to charting a new course for Europe.

5.

Young people are a priority for this cultural change, as they are both the most affected by unemployment and also offer the greatest potential for resolving the crisis. Building on lessons learned, the ‘Erasmus generation’ shows an openness and readiness to talk and grow together with different peoples and cultures. For this reason the Commission must offer opportunities, aside from the timid results of the Youth Guarantee, for all young people to benefit from European exchanges, regardless of their education level and occupational status.

6.

In an economic and social climate that remains uncertain, the European Commission is urged to harness all available resources to boost growth, high-quality jobs and social progress. Financial, productive and social investments are far from returning to pre-crisis levels. A growth-enhancing macroeconomic environment is needed, driven by a favourable investment environment within a well-functioning internal market. All aspects of international competitiveness should be addressed, and increased domestic demand may provide a boost to European companies on the global market, stimulating a virtuous circle that will benefit everyone.

7.

Economic governance must be geared towards growth and social progress, implementing all the priorities of the communication on Steps toward Completing Economic and Monetary Union and the Annual Growth Survey 2016. Country-specific recommendations should make better use of the flexibility within the existing Stability and Growth Pact rules in order to stimulate growth. Ownership of the European Semester has to be increased, involving civil society at large and recognising the specificity of social partners at European and national level.

8.

The updated Europe 2020 strategy should tie in with the United Nations 2030 Agenda incorporating the new sustainable development goals (SDGs), viewing economic, social and environmental aspects as inseparable and interdependent components, and renewing efforts to meet those social goals on which the EU is lagging behind.

9.

The EESC asks the Commission to exercise its leadership in building consensus and commitment in the European Parliament and the Council in order to enforce the internal and external agenda of the EU.

10.

Against this backdrop the EESC, calls for the Commission to focus its 2017 work programme on the following three strategic areas, recognising that the internal and external dimensions as well as the economic, social, and political dimensions are inseparable:

—

In order to achieve an investment plan that accounts for at least 2 % of the EU’s GDP, the EESC recommends a fiscal stimulus, through public investment among other things, targeted at investments that stimulate innovation and growth, prioritising sectors such as energy, transport and broadband infrastructure, digitalisation, the low-carbon circular economy, the social economy and skills for entrepreneurship and quality jobs. The use of European Funds should be consistent with these objectives. Sustainable enterprises and industrial growth need to be promoted together with a targeted plan for SMEs.

—

As for the European Semester process, the EESC calls on the Commission to precisely follow and fulfil all objectives, both economic and social, that relate to the drawing-up of social country-specific recommendations for recording tangible results in the attainment of the EU 2020 targets including the fight against poverty and inequality.

—

The completion of the single market requires a firm commitment on the part of the Commission to the priorities set in 2016. Free movement of workers should remain a priority; fair mobility means ensuring compliance with the principles of equal treatment and non-discrimination on the grounds of nationality, in accordance with the European acquis for European workers.

—

The principle ‘equal pay for equal work in the same workplace’, as stated by President Juncker, into the EU labour mobility framework, is under discussion in the EESC. The Committee has already expressed its concerns about distortions which can undermine labour market integration and fair competition.

—

The Economic and Monetary Union is at the core of the single market, and the EESC insists that its economic, social and political pillars need to be developed. The euro area, including those countries that wish to join, needs a stronger identity.

—

Making use of the opportunities provided by digitisation requires measures to be taken in numerous fields. The EESC calls on the Commission to set up a regular consultative process to manage the impact on the quality and quantitative aspects of employment, production, consumption and public services for citizens. Special attention must be paid to the implementation of the Digital Skills Agenda, especially in terms of ensuring accessibility for all.

—

The Energy Union is still far from complete. The EESC challenges the Commission to speed up the implementation of the Energy Union strategy to ensure the security of energy supplies and reasonable prices by means of diversified energy sources and a fully-integrated internal energy market. A Just Transition Fund to support the transition process to a low-carbon economy is needed. As for climate policy, concrete action is needed immediately. The EC should ensure civil society and citizens at global, national and subnational levels become more involved in the development, review and, above all, implementation of the Paris Agreement.

—

The refugee crisis needs to be properly managed. Safe humanitarian corridors have to be opened and the EU has to firmly move towards a common asylum system.

—

In 2016, the EU has grown as a global player and should enhance its position in promoting peace and stabilisation in conflict areas. However, insufficient internal cohesion and a lack of political commitment have so far weakened the EU’s influence in the world. As a prerequisite for effective external action, integrated policy measures are needed, insofar as possible, between its foreign and internal policies.

—

Additional practical measures are needed to reinforce security in Europe: a strong common foreign policy to address open conflicts in neighbouring countries, a development policy that is consistent with that of other international institutions, international police cooperation, and effective control of external borders without restricting individual freedoms and privacy.

—

The EESC considers it essential to conclude current bilateral trade and investment negotiations, ensuring a balance of interests as identified in the EESC opinion on the EC communication ‘Trade for All’, and to work towards implementing them properly. Transparency and the fair balance of interests also need to be pursued in the multilateral approach to trade agreements within the framework of the WTO. Environmental, social, labour, consumer and other standards, together with public services, should not be reduced by EU agreements, and indeed these agreements should aim to improve them.

—

The global Sustainable Development Goals of the UN Agenda 2030 have to be integrated in the policy areas related to EU external action.

—

The EESC calls on the Commission to focus its efforts on influencing and boosting the development and export of climate technologies and solutions on a global scale.

—

The EESC asks the EC to open a debate on the way the EU operates. We need to reaffirm European values within a shared vision, the importance of Europe’s solidarity-based dimension, social cohesion and the construction of a participatory and inclusive democracy.

—

The EESC strongly encourages the Commission to closely monitor compliance on the part of Member States with the Rule of Law and the Charter of Fundamental Rights, and to actively deal with any infringements.

—

The EESC regrets that the Commission has not taken into due account the EESC’s contribution to the Work Programme for 2016 and that it has not deemed it appropriate to have an in-depth exchange of views on the policy choices made by the Commission itself. Building a systematic dialogue with civil society organisations and strengthening social dialogue at all levels are key to achieving the EU’s objectives.

—

Investment in infrastructure, production and good-quality jobs.

—

A revamped European Semester for growth, competitiveness and social progress.

—

Moving quickly toward a low-carbon circular economy.

1.1.

Employment remains the top priority in 2017, in particular via the creation of new jobs for the long-term unemployed, women, young people and migrants.

1.2.

As for the European Funds, the Commission should evaluate their use and ensure that financing is allocated in a way that is effectively targeted and maximises the stimulation of innovation and growth, prioritising investment in infrastructure, production and good-quality jobs. Irregularities in the use of EU funds have to be better monitored and sanctioned.

1.3.

The social services sectors are one of the biggest job creators in Europe. The Commission should therefore develop an action plan to maximise its potential and unlock the European Fund for Strategic Investment for the social sector.

1.4.

In 2017, the Annual Growth Survey should also prioritise social investment and assist lagging economies in achieving European economic and social standards.

1.5.

A skills offensive is needed based on the swift implementation of the New Skills Agenda for Europe and the Youth Employment Package (Youth Guarantee and European Apprenticeship Alliance).

1.6.

The measures envisaged in the Action Plan for the Circular Economy must be implemented without delay, giving priority to measures that help secure a more competitive environment for European businesses. The Committee wants the EC to explore the feasibility of an open European platform for the circular economy bringing together all stakeholders and hosted by the EESC.

—

Boosting digitisation of infrastructure, production and public services.

—

Increasing skills and acceptance of digital change across society at large and among workers.

2.1.

The digitalisation of industry will be a decisive factor for the competitiveness for the European economy. The digitisation process is having a significant impact on European civil society and has become essential to people’s lives. The EESC, with its cross-cutting responsibilities — a forum representing organised civil society — will act in order to boost the acceptance of policies in this area within European civil society.

2.2.

The potential of the digital economy, tied in with other major economic changes (e.g. transition to a sharing economy and a low-carbon economy), must be more strategically geared towards the achievement of the UN SDGs (Sustainable Development Goals).

2.3.

In order to eliminate disparities between individuals and between small businesses, the digitisation agenda should be fully utilised in the development of smart manufacturing, smart energy grids, smart transport and mobility, smart housing and smart communities. There is also considerable scope to use digitisation to improve public services and administration. The Commission should promote the exchange between Member States of best practices in this field.

2.4.

Social partners, as part of a European coordinated strategy, should be called upon to harness all instruments of social dialogue to address the challenges of the digitisation process so as to maximise good-quality employment opportunities, re-skill/up-skill affected workers and identify new forms of protection for these workers. In order to ensure a comprehensive approach, it is advisable to set up a regular consultative process with other civil society organisations.

—

Implementation of the Energy Union Strategy, including its external dimension

—

Implementation and global enhancement of COP21 decisions

—

Providing for a fair transition to a low-carbon economy

3.1.

The Commission must continue to implement a far-seeing strategy in line with the work programme annexed to the 2015 communication on the State of the Energy Union.

3.2.

The EESC’s proposal for a European Energy Dialogue (EED) must become a key mechanism in ensuring that the knowledge, concerns and interests of civil society feed into the Energy Union process.

3.3.

The decisions of COP21 need to be implemented without delay and with the full involvement of organised civil society. A level playing field is required for internationally-competing companies in order to prevent carbon leakage. Calling on the EU Member States to announce their National Determined Contributions would be the right signal. The need to re-launch investments and consolidate the EU’s leadership in green technologies should be taken into account as well.

3.4.

In the light of the COP21 commitments, risks of carbon leakage have to be carefully assessed and policy instruments implemented to effectively tackle them, particularly in the context of the EU Emissions Trading system for the period 2021-2030.

3.5.

The food system is both one of the leading causes of climate change and will be significantly affected by it. The role played by the agri-food sector in adapting to and mitigating the effects of climate change must be strengthened. The importance of food waste prevention and reduction and civil society’s efforts should be highlighted in the context of the EU circular economy action plan.

3.6.

Beside the Just Transition Fund, the EU must implement the Innovation Fund and the Modernisation Fund and involve social partners and other civil society organisations in the management of these funds.

3.7.

Following the result of the EESC study on planned obsolescence, a pilot project should be launched on including the estimated or average minimum lifespan in a product labelling system.

—

A growing industry and a functioning Capital Markets Union.

—

Promoting a more competitive and greener economy, developing social economy enterprises and implementing innovative models.

—

Making fair labour mobility available for all.

—

Towards fairer taxation.

4.1.

As industry lies at the heart of the single market, the European Union must continue to concentrate on revitalising its industry and meet the target of increasing its contribution to the EU’s GDP to 20 % by 2020. Special attention should be paid to the challenges facing the steel industry, through a re-modulation of state aid and a more targeted use of the European Globalisation Adjustment Fund. An Action Plan for the European Defence Industry, which would achieve considerable savings in defence procurement, must also be put in motion.

4.2.

The EESC calls for effective measures to improve access to finance, alongside the initiatives taken in the framework of the Capital Markets Union. The regulatory and supervisory framework (micro and macro prudential) of the financial sector should be adapted in order to reduce the risk of regulatory arbitrage. The shadow banking sector should also be addressed in this context. Moreover, means should be developed for better tapping into the capital available in sovereign wealth funds. In the banking union process reference should be made to the public service component of banking services. Citizens must be able to use these services knowing that they are transparent, reliable and low-cost.

4.3.

A concrete action plan is needed to tackle the obstacles that SMEs, including micro- and family enterprises, encounter domestically and in trading across borders.

4.4.

To unleash the full potential of social economy enterprises, the EESC urges the Commission to launch an Action Plan for the Social Economy, providing a complete ecosystem for its development and growth.

4.5.

The EESC underlines the need to increase Europe’s competitiveness and support the green economy. In this context, it is important to encourage, when reviewing the Single Market Strategy in 2017 — in addition to the principle of maintaining a level playing field — new enterprise models which balance economic, social and environmental aspects. The collaborative economy, the functional economy and the circular economy need clear guidelines in order to flourish. A comprehensive approach taking account of the different social, economic and environmental aspects in a coherent policy framework is essential. It is crucial to establish a more ambitious corporate social responsibility strategy that better recognises the contributions of enterprises to the common good, measuring indicators of well-being and social development beyond GDP.

4.6.

Regarding public procurement in accordance with the new directives, it is necessary to facilitate the application of social clauses and a reserved market, designing a guide for contracting authorities.

4.7.

Fair labour mobility has to be safeguarded. In this regard, the EESC is currently preparing its opinion on the Commission’s proposal concerning the revision of Directive 96/71/EC and is addressing the issues of supporting the freedom to provide services and of preserving both fair competition in the service market and equal treatment in the labour market.

4.8.

The policy development needs of the CAP, in the context of the mid-term review of the MFF 2014-2020, should be geared to maintaining multi-functionality, family farms and sustainability at the core of European agriculture. The Commission should prepare a European food strategy with a comprehensive approach covering the whole supply chain, from agriculture to consumers, as well as ensuring policy coherence between different policy sectors, ranging from agricultural policies to trade, education and climate policies.

4.9.

The EU Urban Agenda is of the utmost importance. The Commission should prepare a White Paper on rural areas. It should be pointed out, however, that urban and rural areas are closely linked to each other and do not have alternatives.

4.10.

It is important to reap the employment benefits of boosting the Single Market, especially with regard to services, digitalisation and labour mobility. The proper functioning of the Single Market and a framework guaranteeing security for people as well as fair competition are the basis for economic recovery in Europe. The EESC also stresses the need to address the situation of the working poor and to develop effective tools and policies to safeguard a living wage and ensure security in the field of new employment relations.

4.11.

The Action Plan for Effective Corporate Taxation has to move forward, notably concerning the common consolidated corporate tax base (CCCTB). The EESC calls for decisive steps to curb tax fraud, tax evasion and aggressive tax planning. Tax should be captured in the place where the economic substance is located. To this end, the EESC wants to ensure that the EU is fully involved in the OECD’s action plan to combat tax avoidance, base erosion and profit shifting (BEPS);

4.12.

The EESC welcomes the focus on the part of the Commission during the last European Semester cycle on a progressive shift of tax burdens away from low-income taxpayers in a more efficient and equitable tax system, encouraging a move to taxes that have less dampening effects than taxes on labour. Moreover, reforms of taxation systems are necessary in order to ensure their redistributive role which may help to curb inequalities.

—

A roadmap for completing the EMU including Banking Union.

—

Pressing ahead with economic and political union.

—

Making the European Semester deliver the Europe 2020 Strategy and social goals.

5.1.

Taking into account the severely limited capacity of the monetary policy to stimulate demand, the euro area economy is in a so-called ‘liquidity trap’. Greater solidarity is needed from countries with structural surpluses which should contribute more extensively to expansionary policies.

5.2.

The euro area must strengthen its growth potential and its ability to cope with asymmetric shocks and promote economic and social convergence. This requires a new regulation on a specific fiscal capacity. The EESC calls for a macroeconomic dialogue to be established in the euro area as a key contribution to the democratic and social development of EMU. The EESC emphasises that future discussions should refer not to ‘competitiveness boards’ but to ‘boards for competitiveness, social cohesion and sustainability’. The euro area will need to speak with one voice in international bodies.

5.3.

The EESC expects the European institutions to embark on the second stage of the roadmap for completing the EMU in 2017, giving a clear identity to the euro area. A corresponding roadmap should include a political discussion on the implementation of institutional steps, some of which may require Treaty changes.

5.4.

The discussion should ideally address the following issues: a more robust structure for the euro area, the euro area’s fiscal capacity and joint debt issuance by euro area Member States, managed by a European Monetary Fund; improved accountability and democratic legitimacy for the EMU, achieved by strengthening the powers of the European Parliament, and a better-structured Inter-parliamentary Conference and closer commitment on the part of national parliaments, as well as voting by euro area MEPs only on matters of EMU competence.

5.5.

As part of the European Semester, civil and social dialogue can be a driving force for successful, sustainable and inclusive economic, employment and social reforms. National parliaments must be involved in the planning and evaluation of national reform programmes (NRP) and the implementation of country-specific recommendations (CSR), in line with the EU2020 targets. The social partners have a specific role to play concerning their exclusive competences, responsibilities and tasks.

5.6.

Immediate measures have to be implemented to introduce safety nets for low-paid and vulnerable workers, ensure a living income for households, target areas of poverty and offset inequalities. The European Pillar of Social Rights has to be clearly defined and implemented in 2017 with the active contribution of social partners and other civil society organisations. However, The EU Pillar of Social Rights should contribute to supporting sustainable economic development and job creation, and, to that effect, it should deliver tangible outcomes to improve the quality of life and work of people in Europe and boost efficient and inclusive labour markets and public services of quality and accessible for all.

5.7.

As part of financial union, banking union is key to guaranteeing the integrity of the euro and to increasing risk-sharing with the private sector. The European Deposit Insurance Scheme proposal is an essential part of the banking union. Further risk sharing as part of the EDIS proposal should be accompanied by further risk reduction in the banking union. Both have to be dealt with in parallel and without delay and actually put into effect. The Commission should carry out a comprehensive in-depth impact study in order to further strengthen the legitimacy of the proposal.

—

Conclusion of the trade agreements with ambitious and innovative trade and sustainable development chapters.

—

Reaping the benefits of civil and social dialogue.

6.1.

Policy coherence between development and trade policies is needed. As stated in the communication ‘Trade for All’, environmental, social, labour, consumer and other standards, together with public services, should not be reduced by EU agreements, but improved instead.

6.2.

The Committee, under these conditions, considers it important to conclude current trade and investment negotiations in a balanced way (including TTIP, CETA, EU-Japan, EU-China investment negotiations, negotiations involving ASEAN countries and any outstanding EPAs) and, following ratification of the agreements, monitor effective implementation.

6.3.

Transparency and fair balance of interests also need to be pursued in the plurilateral negotiations on services (TiSA) and environmental goods.

6.4.

The pursuit of bilateral trade negotiations should not weaken the EU’s commitment to the WTO and a strong multilateral global agreement, and should avoid possible conflicting rules. Within the framework of the WTO negotiations, a more focused approach is needed with digital trade, for example.

6.5.

Trade is a key topic for the EU’s manufacturing sectors and for defending the European market from unfair behaviours and dumping, by means of updated Trade Defence Instruments (TDIs) to fully protect the internal market from unfair imports from non-EU countries. However, the European Commission should carefully evaluate the impact of the decision on China’s Market Economy Status.

6.6.

While the Investment Court System recently proposed by the European Commission is an improvement on the discredited US-backed Investor-State Dispute Settlement mechanism, it is still controversial and needs to be evaluated further.

6.7.

The EU’s trade policy should take into account the different opinions expressed regarding the consequences of trade agreements. Special attention should be paid to the involvement of joint bodies comprising all parts of civil society in the monitoring of all aspects of free trade agreements. The EESC’s expertise confers unique value on the work. Impact studies on future or ongoing negotiations remain a key tool for all those involved in monitoring negotiations.

—

Improving the security of citizens.

—

Following the rule of law.

—

Removing barriers and filling gaps.

7.1.

The growing demand for security on the part of European citizens requires an immediate response to protect the main achievements of EU integration and to restore trust among Member States. The fight against terrorism requires closer cooperation between Member States and between their authorities.

7.2.

The search for peace in the Middle East, international police cooperation, the effective control of external borders and development policy are indispensable complements to the measures aimed at reinforcing security in Europe.

7.3.

In 2017, the EU must strengthen the pillars of EU action set in the European Agenda on Security. The EU Security Agenda must ensure full compliance with the rule of law and respect for fundamental rights in Member States, including democracy, human rights, economic and social rights, and an effective civil society dialogue.

7.4.

The proposal for a Directive on implementing the principle of equal treatment (COM 2008 (426) final) and significantly boosting the participatory aspect of civil society has to be unblocked.

7.5.

The Gender Equality Strategy 2010-2015 needs a reinvigorated strategy with clear targets, practical measures and effective monitoring of progress against gender discrimination in the labour market, education and decision-making, as well as in tackling gender-based violence.

7.6.

The European Disability Strategy should be upgraded according to the observations of the UN Committee on the Rights of Persons with Disabilities (CRPD), through relevant legislation and launching an EU priority card that is recognised in all Member States.

7.7.

In the context of the fight against poverty, specific indicators and objectives have to be set out for children in vulnerable situations.

7.8.

New forms of vulnerability such as precarious work, in-work poverty, and the situations of elderly and young women, single mothers and migrant women need to be addressed.

—

Proper management of refugees.

—

Integration of migrants.

—

Fighting populism and xenophobia.

8.1.

The EU must respond to the issues of migration and asylum with closer cooperation between Member States, and unified and practical measures. The EESC refers to the recommendations and report it has launched based on fact-finding visits to 11 Member States. Priority must be given to the proposals emerging from the European Parliament report on the situation in the Mediterranean and the need for a holistic EU approach to migration.

8.2.

In 2017, conditions must be put in place for terminating the derogations to border controls set by the Schengen rules and ensuring the rule of law in the management of the Schengen Area.

8.3.

The proposed Common Asylum System is reasonably achievable in the medium term. Legislative and policy initiatives proposed by the European Commission have to be swiftly adopted, respecting the overarching interest of international protection seekers, and the rule of law as an expression of concrete solidarity among Member States.

8.4.

It is therefore important to reconsider the proposal on resettlement, relocation, and protection of asylum seekers to open legal and safe routes for asylum-seekers.

8.5.

In this regard, the EESC wishes to stress that the EU-Turkey agreement lacks the necessary guarantees to ensure respect for the EU’s fundamental rights and international obligations. Firm action is needed to restore positive cooperation with the Turkish authorities, and those of neighbouring countries which remain key to keeping the EU’s borders secure.

8.6.

Migration policy requires resources to integrate migrants and refugees. The Committee appreciates the effort to make more rational use of the resources available under the various European funds. Resources must be increased, in particular under the ESF, for those Member States most exposed to the challenge of integrating migrants or refugees.

8.7.

For people residing legally in Europe, it is crucial to get them involved in training, help them enter the jobs market and to help them integrate into society in general. It is equally vital to address the increasing phenomenon of xenophobia and populism which are often linked to significant migration flows. The Joint Statement issued by European social and economic partners (ETUC, Business Europe, CEEP, UEAPME and Eurochambres) and work carried out by civil society organisations and social economy stakeholders point to the path ahead.

—

Internal cohesion for external action.

—

Cooperation with neighbours and strategic partners.

9.1.

The EU should enhance its position as a global player for peace and stabilisation in conflict areas within the framework of international institutions and acting in a more cohesive way. For effective external action, integrated policy measures are needed between the internal and external policies of the Commission. Improving relations and cooperation with strategic partners is essential in order to play a stronger role as a global player.

9.2.

The EU’s contribution to cooperation and development should prioritise democratisation processes in its neighbouring countries. Concrete action is needed, supported by well-planned investments financed by the EU in coordination with the World Bank.

9.3.

Dialogue with civil society organisations and people-to-people contacts should be properly integrated into the EU’s external action. It is essential to support the creation of a structured dialogue with CSOs in the region in order to evaluate the European Neighbourhood Policy (ENP). Furthermore, social dialogue should become an integral part of the EU’s cooperation and development programmes.

9.4.

Evaluation of the ENP should be a priority. Relations with countries south and east of the Mediterranean should not focus on a defensive approach based on security aspects or the refugee crisis, but rather become a real co-development policy between equal partners.

9.5.

Specific attention should be paid to relations with Russia, including more active diplomacy towards this country, particularly with regard to energy relations.

9.6.

Of key importance will be the need to meet and begin implementing both the Sustainable Development Goals, and the COP21 Goals. The SDGs in particular must shape the EU’s development agenda. The EU must be proactive in assessing the means, including budget needs, which it will require in order to face such challenges. An appropriate governance framework must ensure strong involvement by civil society. The EESC reiterates its proposal for a European Sustainable Development Forum.

—

Promoting active citizenship and participatory democracy.

—

Increasing openness and transparency.

—

Enhancing civil dialogue and reinforcing social dialogue.

10.1.

To tackle the common, complex challenges the EU faces, it is crucial to mobilise all sectors and resources in creating joint solutions. Civil society is central to driving forward this vital innovation and change specifically requires trust from citizens. Therefore civil society stakeholders must be involved on equal terms as other stakeholders in order to fully ensure their contributions are fully capitalised on. This requires a change in culture but also supporting the value of a strong and independent civil society sector at the Member State and EU levels.

10.2.

In this context, the EESC reminds the Commission of its call for the publication of a Green Paper on how civil dialogue could be organised effectively and on a permanent basis.

10.3.

The EESC asks also and once again that consultation processes with the parties concerned in terms of representativeness, accessibility, transparency, and feedback be improved.

10.4.

Action needs to be taken on the proposal to revise the Regulation concerning the European Citizen’s Initiative in order to improve its effectiveness.

10.5.

The EESC continues to consider strengthening participatory democracy a priority, with the aim of enhancing the democratic resilience of the European Union decision-making process. Within this framework, the new Commission-Council-Parliament inter-institutional agreement should allow institutional consultative bodies such as the EESC to have a greater impact on legislative proposals in the decision-making process.

10.6.

Better regulation should be a method for ensuring more efficient and simplified regulatory texts, which are clear and transparent in their objectives. Consider the proposal for a legislative footprint to better monitor the development of legislation enabling civil society organisations to participate and strengthening the involvement of social partners in the legislative process, making sure their needs and expectations are met.

10.7.

The Commission should continue with the REFIT process, in which the EESC should have a stronger role to play. The REFIT programme should not, however, undermine labour and social rights or environmental and consumer protection. More efficient regulation, including for SMEs, may result from the openness and transparency of better regulation processes, which should encourage beneficiaries to propose bottom-up legislative initiatives and should in particular lead to the enhanced involvement of civil society actors.

10.8.

In March 2016, European social partners presented four joint positions on the relaunch of the social dialogue, refugees, industrial policies and digitisation. These need to be incorporated into the Commission’s work programme for 2017 and promoted as such.

21.10.2016   

EN

Official Journal of the European Union

C 389/13

Rapporteur:

Mr Andrés BARCELÓ DELGADO

Co-rapporteur:

Mr Gerald KREUZER

1.1.

It could hardly be accepted that China operates under market economy conditions, as it fails to fulfil four of the five criteria established by Commission practice and to mirror the Basic Regulation (Council Regulation (EC) No 1225/2009).

1.2.

The EESC acknowledges that, although sources yield different results, if we lose the tools to ensure free and fair trade with China, an unacceptable figure of hundreds of thousands of jobs will be lost.

1.3.

Losses would be concentrated in particular sectors and regions which would be heavily affected, such as aluminium, bicycles, ceramics, electrodes, ferroalloys, glass, paper, solar panels, steel and tyres. Further sectorial and geographical studies are therefore recommended.

1.4.

The sectors affected are mainly producers or consumers of intermediate goods and, as a result, private consumers are not likely to benefit from the reduction of anti-dumping measures.

1.5.

Industrial sectors that consume dumped products would benefit from the import of subsidised imports in the short term. However, in the medium term they could also be at risk, since China is also promoting downstream, added-value sectors. The poor record of China in the area of industrial property rights in this sense also poses a threat.

1.6.

Industrial jobs, once lost, rarely return. If the individuals affected manage to find a job, it is likely they will have lower wages in positions where their skills are not valued. The replacement of quality jobs in industry by low-paid, insecure jobs also risks increasing the inequalities in our society.

1.7.

The EESC therefore considers that granting China market economy status (MES) would seriously jeopardise the industrial base and manufacturing jobs in the EU. It would adversely affect prospects for relaunching European industry through high-quality, stable jobs and the introduction and dissemination of technological innovation, research and development — all key drivers for securing a dynamic and sustainable economic and social system in Europe.

1.8.

Against this background, granting MES to China would represent a serious risk for industrial areas and SMEs’ local production systems, with production threatened by China’s unfair competition practices. This would run the risk of losing specialised SME production and the small-scale, highly specialised jobs that are the backbone of Europe’s manufacturing structure.

1.9.

The EESC calls on the EC, the EP and the Council to promote international fair competition, as a way to actively defend these jobs and European society values and to boost income and wealth in the European Union.

1.10.

Defending these EU jobs and related investments not only makes economic sense but also fosters social and environmental sustainability. Relocating production from highly resource- and energy-efficient production sites in Europe to a coal-based Chinese economy would frustrate our ambitions regarding climate change and sustainable development. Respect for labour and human rights also remains problematic in China.

1.11.

This defence must comply with European law and international treaties. It should also enforce the fulfilment of agreements by third parties and take into account the negotiations held with major trade partners such as the USA. Efficient trade defence instruments (TDIs) ensure fair competition. They are needed for the future of European industry and to support the target of increasing industry as a percentage of GDP to 20 %.

1.12.

As long as China does not meet the EU’s five criteria required to qualify as a market economy, the Commission should use a non-standard methodology in anti-dumping and anti-subsidy investigations concerning Chinese imports, in accordance with what remains of Section 15 of the China WTO Accession Protocol.

1.13.

Keeping industries in the EU is the basis for healthy R & D networks, which are crucial for future growth and for finding solutions to our ‘great societal challenges’ (aging, energy, climate, healthcare and mobility).

1.14.

SMEs do not have the resources to initiate anti-dumping actions or to collaborate fully with the EC in its investigations. The EESC calls for a simplified approach for sectors where SME participation is relevant.

1.15.

Acknowledging the strategic importance of this issue, this opinion is the beginning and not the end of the EESC’s engagement. The EESC intends to develop an ongoing engagement and recommends setting up an EESC project on market economy status (MES) for China in order to allow the Committee to monitor this issue on behalf of civil society. Adequate resources should be allocated to this task.

2.1.

Under WTO rules a country can impose anti-dumping duties, in addition to tariffs, on products from third countries if an investigation demonstrates that these products enter the country at prices lower than domestic ones, causing injury to local industry. When China joined the WTO in December 2001 a transitional arrangement for its accession allowed China to be treated as a non-market economy (NME) in anti-dumping proceedings if Chinese firms could not prove that they operated in accordance with free market principles. China’s current NME status offers the option of using the prices of an analogue country rather than domestic prices (which in NMEs are artificially low due to state intervention) to calculate the dumping margin. The use of NME methodologies is described in Section 15 of the Chinese WTO Accession Protocol, but provision 15(a)(ii) will expire on December 2016. This expiry will oblige the EC to change the methodology that determines price comparability in AD files.

2.2.

This EESC opinion focuses on the impact on EU industry and employment of the possible granting of market economy status (MES) to China and changing the trade defence instruments (TDI) methodology. This is independent of the legal discussion, as the EESC considers this topic extremely important for EU industry and the jobs linked to it.

2.3.

The European Parliament has approved with a vast majority a resolution calling for a non-standard methodology that complies with China’s Accession Protocol, while being able to effectively establish a free and fair trade framework.

3.1.

Regarding the economy the EESC notes that:

3.2.

China has experienced unprecedented growth in the last 15 years, which has changed the global industrial and trade landscape. The Chinese growth model has been based on investment, with this activity accounting for 46 % of its GDP in 2015, according to the IMF. This figure exceeds the share of investment in other developed economies such as the EU (19 %) and the USA (20 %).

3.3.

The size and speed of the changes have been largely state-driven. The EESC acknowledges that China is not a market economy as defined by the EU, and there is a general consensus on this issue outside the institution. As the World Bank reports, ‘the state has interfered extensively and directly in allocating resources through administrative and price controls, guarantees, credit guidelines, pervasive ownership of financial institutions (1), and regulatory policies’.

3.4.

There are numerous examples of excesses in Chinese development. The country consumed 6,6 billion tonnes of cement between 2011 and 2013, more than the USA in the whole of the 20th century (4,4 billion). This means that in three years China has used as much cement as was necessary to build the USA over a century. Aside from the inefficient use of resources, a huge industrial capacity has been built to produce such a quantity of materials in a very short period.

3.5.

China has started to change its model towards more consumption and service-orientated growth. The economy faces a slowdown, which means that a significant part of Chinese heavy industry’s output will not find customers in China.

3.6.

The European Chamber of Commerce in China reports that significant overcapacity has already appeared in products such as crude steel, aluminium, cement, chemicals, shipbuilding, refining, flat glass, paper and paperboard. The Chinese government acknowledges this and has decided to cut crude steel capacity by 100 million to 150 million tonnes by 2020 (2), and coal production by 500 million tonnes over the same period (3).

3.7.

Regardless of these intentions, reducing total capacity will be a long-term task. Factories closed in the past 10 years have been replaced by modern, more productive ones and the problem has only grown bigger. Household demand for intermediate goods will never take the place of industrial demand.

3.8.

It took the EU a long and difficult process to fix this problem in the 1980s and 1990s, and there is no quick solution for China either.

3.9.

Hence, a combination of overcapacity and weak domestic demand is leading to an excess of production, which then tries to find its way into international markets.

3.10.

The EESC points to data concerning Chinese exports.

3.10.1.

According to the WTO, China is the largest exporter of manufactures around the world, with a share of 18 %. This share has increased by 20 % since 2010. During 2014 Chinese exports grew by 6 %, while the rest of the world increased by 3,5 %. If we analyse the period 2010-2014, the increase was 49 % in China, twice the figure for the rest of the world.

3.10.2.

Data from China’s National Bureau of Statistics show that the products with the strongest growth in 2014 were zinc and zinc alloys (+2 360 %), cotton (+ 100 %), coke (+ 82 %), diodes and other semiconductors (+ 61 %) and rolled steel (+ 50 %). Since 2010, exports of cotton, rolled steel and diodes and other semiconductors have doubled, while sales of coke, zinc and zinc alloys have tripled in volume.

3.10.3.

This upward trend in exports is expected to continue in the next few years as forecasts indicate a contraction in Chinese domestic demand. If European TDIs are significantly weaker than those of our trading partners, current exports from China to NAFTA or Japan could be diverted to the EU.

3.10.4.

This export-driven growth model has created a large deficit of EUR 137 bn (EUR 48,8 bn in 2000) on the EU’s balance of trade in goods, with EU imports from China twice as high as its exports to China.

3.10.5.

This is the context in which China has launched the One Belt One Road (OBOR) initiative to create a transport infrastructure (rail-motorway and maritime) in the Eurasian area. The aim is primarily to provide Chinese firms with access, on anti-competitive terms, to the Eurasian markets involved in the initiative and to use them as new markets for sectors with a production surplus. Granting market economy status would represent a substantial risk for European firms in the EU Member States involved in the OBOR initiative.

3.11.

Facts about dumping practices

3.11.1.

This sharp increase in Chinese exports has been partly achieved through unfair practices, as shown by numerous dumping cases brought under WTO rules.

3.11.2.

China is the country most affected by anti-dumping measures. It was the subject of 34 % of trade investigations, with 667 measures imposed. In 2015 alone, 76 anti-dumping measures against China were in force or had been initiated.

3.11.3.

67 % of the anti-dumping measures adopted against China related to industries such as textiles and clothing articles, ceramics and glass, base metals, plastics, machinery and electrical equipment and petrochemicals. Last year, 79 % of the measures imposed on China targeted these sectors.

3.11.4.

The EU is one of the most active participants in world trade, accounting for 15,8 % of the total, but only 133 anti-dumping measures have been adopted against the region. This is equivalent to 7 % of worldwide cases. China, by contrast, is the target of 47 % of these measures and in 2015 alone it was penalised in three cases.

4.1.1.

From a theoretical perspective, MES for China would have negative welfare effects on the EU. Trade liberalisation is of key importance to the EU. It has positive network effects, even though there are always sectors which are worse off as a result.

4.1.2.

In this case, the EESC points out that this is not a negotiation process with barriers being dismantled on both sides. China would not give anything in return, while the EU would unilaterally reduce its ability to offset the distortion of competition caused by the unfair support given by Chinese central and local government.

4.1.3.

The EESC has found that industrial jobs have already been transferred abroad. Between 2000-2014, European industries lost 6,7 million workers, 12 % of the initial figure of 56,3 million. Over the same period the import volume index increased by 144 %. Research in the USA, with a smaller industrial sector than the EU, shows that between 1999 and 2011 some 985 000 industrial jobs were lost due to increased Chinese import penetration (4).

4.1.4.

Job losses occurred not only in basic industries but also in innovative industries. Cutting-edge mobile telephone industry has disappeared. In an industry vital for our future such as photovoltaic panels, 34 manufacturers filed for insolvency between 2010 and 2012, two quit the solar business, five shut down production totally or partially and three were taken over by Chinese investors (5).

4.1.5.

Particularly at risk are sectors that are of strategic importance in China’s 5-year plans: aluminium, bicycles, ceramics, glass, motor vehicle parts, paper and steel.

4.1.6.

Impact assessments have been carried out by various institutions. The European Commission has commissioned a study but this has not been published, making it impossible for the EESC to analyse the Commission’s position on this urgent issue.

4.1.7.

The Economic Policy Institute estimates the damage at somewhere between 1,7 and 3,5 million EU jobs at risk. This estimate is based on an input-output model which takes into account direct losses (directly affected by an increase in imports), indirect losses (supplier and processing industries for those directly affected) and re-spending losses (derived from reduced household income and expenses). The main drawback of this study is that it considers the effects of every Chinese import, even those in sectors that are far from being affected.

4.1.8.

If only industries with anti-dumping measures are considered, direct and indirect job losses would lie between 0,5 and 0,9 million. According to the report, the total direct employment generated by industries vulnerable to surges of dumped imports is 2,7 million.

4.1.9.

The study does not calculate the re-spending effect in these sectors alone. It shows that jobs at risk in anti-dumping-related industries amount to 60 % of jobs in manufacturing industries. If this same proportion were applied to indirect and re-spending effects, job losses could lie between 1,1 and 2,1 million.

4.1.10.

A second report reflects three studies commissioned by steel producers’ associations from NAFTA regarding the probable economic effects on their countries of granting market economy status to China. The report concludes that, if all three NAFTA countries awarded market economy status to China, labour demand would decline by between $15 billion and $32 billion, most of which would occur in the USA. This translates into jobs declining by an estimated 0,4 to 0,6 million.

4.1.11.

Both studies are based on macroeconomic general equilibrium models. However, if studies of this kind were run separately on economic areas such as the EU and NAFTA, the EESC believes that the unilateral granting of market economy status to China would almost certainly result in a direct loss of welfare to the tune of at least hundreds of thousands of job losses, and probably closer to one million people who would have to find a different way of making a living.

4.1.12.

In order to assess the probability of these losses occurring, the EESC draws attention to several relevant consequences:

4.1.13.

Regarding geography, the EESC reiterates that the jobs likely to be lost are not evenly distributed geographically. The concentration of job losses in certain areas may cause critical situations in those locations, even though other regions in the Union might not suffer badly. The countries worst affected could lose up to 2,7 % of their workforce.

4.1.14.

In many cases these jobs are in major industrial installations with a strong relationship with the economic and industrial fabric. Recently we have seen significant losses in sectors such as steel where several thousand jobs depend on one company and have produced a dramatic social impact on their communities.

4.1.15.

The EESC also stresses the quality of industrial jobs: manufacturing jobs are more stable and better paid on average than jobs in other sectors of the economy. The EC pointed out in 2014 (6) that monthly earnings for manufacturing workers are 5 % higher than the general EU average. In the USA weekly wages in manufacturing are 8 % higher than in non-manufacturing jobs. These higher earnings are the result of higher productivity.

4.1.16.

Industry offers quality jobs to skilled and semi-skilled workers, for whom it would very difficult to find an alternative job with the same labour conditions. As such, the declining role of industry contributes to inequalities in our society.

4.1.17.

According to the Eurofound Working Conditions Survey, part-time work is considerably less prevalent in manufacturing (12 %) compared to the EU28 average (24 %). Working hours in manufacturing also tend to be more regular and atypical hours considerably less prevalent than in the EU economy as a whole (7).

4.1.18.

The EESC would also like to avoid the risk of damage to the knowledge ecosystem: manufacturing is by far the sector with the biggest demand for R & D activities and there is a growing trend to source R & D from innovation-focused services companies (8). According to an ECSIP Consortium study, the average service content of manufactured goods produced in the EU reaches close to 40 % of the total value of final manufactured goods produced. The bulk of these services are distribution services (15 %), transport and communication (8 %) as well as business services which ranges from between less than 10 % to as high as 20 % and more across EU Member States. This latter category includes services such as R & D, advertising and market research, engineering activities and ICT services.

4.1.19.

The EESC has already issued opinions on the relevance of promoting higher regulatory standards on intellectual property, due to the lack of compliance of certain countries. This should not be forgotten when designing the EU’s trade policy.

4.2.1.

An assessment of the impact of unilaterally granting MES to China needs to consider potential benefits in other sectors, particularly for consumers of products for which China has — or plans to have — strong manufacturing activity.

4.2.2.

Many of the industries affected so far are manufacturers of intermediate goods, i.e. goods that are transformed and combined into final products.

4.2.3.

Global industrial production has not yet returned to its pre-financial crisis levels. Thus, there is plenty of surplus industrial capacity and customers of Chinese products subject to anti-dumping measures would be able to source their supplies in third countries without a significant loss of competitiveness.

4.2.4.

If China is allowed to grow its market share unfairly and establish an oligopolistic advantage, it will undoubtedly use this later on to raise prices again, causing consumer industries in the EU to suffer. China is already acting in this way in order to boost local industries. The European Parliament (9) presents evidence of measures restricting trade in natural resources that may be in violation of WTO rules. In 2009, China introduced its Rare Earth Development Plan 2009-2015, imposing export quotas at 35 000 tonnes per annum. The following year, prices of Chinese rare earths tripled. Another example can be found in the electronics market, where China taxes the export of parts more heavily than finished products, in order to protect the local assembly of devices.

4.2.5.

These examples show that Chinese policy promotes industries with higher added-value content. Without the ability to file anti-dumping cases, sectors such as equipment or automobile manufacturing would also end up being exposed to unfair competition. China also has a record of infringing intellectual property rights, therefore even patents would not prove to be of much use in maintaining innovative industries within the EU’s borders.

4.2.6.

In the long term, granting MES to China would also harm the entire industrial value chain because of the negative impact on innovation. There is a widely held belief in the EU that innovation is the only way for our societies to compete with purely cost-based competitors. However, innovation is no longer being developed in isolated laboratories. Instead, a KPMG survey found that 85 percent of respondents from the global metals industry believe that partnerships will form the future of innovation for their organisation. More than three quarters say they are already engaged in more collaborative business models with suppliers and customers. It is therefore impossible to imagine future innovative industries not belonging to knowledge networks.

4.3.1.

In the long term and regardless of the evolution of individual sectors, wealth in the EU will only grow in a sustained way through the solid development of disposable income. Current policies by the Commission that favour jobs and investment recognise this fact and should be taken into account when taking decisions to address this issue.

21.10.2016   

EN

Official Journal of the European Union

C 389/20

Rapporteur:

Lutz RIBBE

Co-rapporteur:

Isabel CAÑO AGUILAR

1.1.

The EESC welcomes the decisions of COP 21 in Paris and considers them to be an important milestone in effectively fighting against climate change.

1.2.

However, there are two major problems. First, the emissions reduction targets submitted by the individual Member States (INDCs) do not correlate with the results achieved in Paris. Second, despite some limited progress, the importance of civil society has not been sufficiently taken into consideration.

1.3.

Civil society actors currently face significant obstacles when they wish to initiate and implement measures to counteract climate change. This is mainly due to the fact that the political sector is unaware of how much potential civil society action has in terms of protecting the climate. There has hitherto been too little political interest in what climate strategies civil society actors are planning, what they need, and what support they require. Regulatory guidelines can sometimes even systematically prevent civil society climate action.

1.4.

Thus civil society actors all too often find that there is no framework for action that would allow them to implement their plans for ‘bottom-up climate action’. Another factor is that they cannot finance their projects, although in fact sufficient investment resources are most likely available.

1.5.

As an immediate response to the decisions made in Paris, the EESC therefore proposes a coalition of politics, administration and civil society. The coalition’s mission is to minimise obstacles standing in the way of civil society climate action by:

1.6.

The coalition must take action at various political levels. Essentially, the aim is to implement the following five tasks:

1.7.

A structured but open dialogue within the coalition is needed if these five tasks are to be implemented; in this sense, the coalition should constitute a discussion forum. It is therefore important that participants reflect civil society’s diversity, and develop a culture of openness, creativity and cooperation. The discussion forum should ensure that the policy framework to be developed really does support civil society climate action.

1.8.

The coalition needs administrative support if it is to fulfil its tasks, so that it can

1.9.

The coalition of politics and civil society should attain another goal supported by the EESC: the need for fair change in the world of work to favour sustainability, with the structural participation of trade unions and employees’ associations.

2.1.

The results of COP 21 in Paris are an important milestone in terms of climate negotiations, as this agreement is the first to be legally binding under international law, containing a commitment from every single party to actively address climate change, which is recognised as a threat.

2.2.

The international community has jointly pledged to limit global warming to below 2 degrees Celsius, and to 1,5 degrees insofar as possible.

2.3.

The agreement contains an additional important and specific objective: to achieve global greenhouse gas emissions neutrality in the second half of the century.

2.4.

The EESC has welcomed these results (1), but also sees two major problems:

2.4.1.

First, the intended nationally determined contributions (INDCs) submitted by Member States do not correlate with the results of COP 21: implementing them would not limit global warming to 2 degrees Celsius, but would allow it to reach 2,5 or possibly even over 3 degrees Celsius.

2.4.2.

Second, the importance of civil society has not been sufficiently considered. While some progress has been made in terms of transparency and cooperation, civil society’s real role in climate policy has not yet been fully recognised: the results of the Paris conference will be implemented and brought to life by civil society, not the COP negotiators.

2.5.

There is no strategy (nor the appearance of a strategy) to make use of civil society as a strategic partner in implementing the COP decisions. The same is true at European Union level. EU climate policy must therefore acquire a second pillar, alongside ‘climate diplomacy’, to focus on understanding and enhancing civil society’s importance and role, and on making it easier for the wide variety of civil society actors to design and implement strategies to protect the climate in their particular sphere.

2.6.

Climate policy cannot and must not merely be imposed ‘from above’ — it will only be successful if it is based on broad support and active participation by a majority of businesses, local and regional authorities, and citizens. Its implementation must therefore primarily be ‘bottom up’, or else it will fail.

2.7.

Indeed, substantial achievements in sustainability and climate policy have been achieved in the past because civil society representatives — a category that should explicitly include ‘ordinary’ people in their role as citizens — did not content themselves with merely reacting to political guidelines or seeing themselves as ‘means of implementation’. Rather, it was precisely these people who took action and functioned as pioneers of change, leading to significant progress and exerting political pressure, using the means available to them. This is true in terms of technology and the economy, but primarily in terms of society (society’s acceptance of these technologies, and most of all bringing change into the mainstream — social learning and ‘learning from the community’).

2.8.

For instance, while previous energy production and policy (partially responsible for climate change) was mostly oriented towards finite sources of energy and large, centralised structures with few players — with civil society generally featuring as a mere ‘consumer’ — climate-friendly action will be much more decentralised in the future and will require everyone to get involved. There is no doubt that there is willingness to do so, and this must be systematically used and fostered.

2.9.

The civil society action that can already be seen today has enormous latent innovation potential, stemming from the reflection, influence and action of cities and municipalities, local authorities, large companies, and trade unions, as well as private individuals (individuals, farmers, cooperatives, SMEs, etc.).

2.10.

Currently, this action is very frequently not connected to organisations and is linked to very specific projects. It is precisely these features that generate its particular societal dynamics. Meanwhile, this also means that, if such initiatives fail, those involved have to assume the entire cost of failure themselves. And the risks are not just financial. For as well as money, civil society action requires motivation, commitment, and time. It must therefore be worthwhile (and not just in a financial sense), and the risk of failure must be surmountable. In this context, European and national policies should provide a framework for civil society action that is very open and as broad as possible.

2.11.

While there are already many success stories in the European Union that testify to the importance and effectiveness of civil society involvement in climate action, these examples are not systematically recorded and evaluated. There are no discussions about the political lessons that can be learned from these numerous and diverse initiatives, what hurdles need to be surmounted to make them even more successful and widespread, or the reasons why they fail.

2.12.

Moreover, there are no adequate incentive schemes to enable capital employed to be refinanced. There are also no mechanisms that send the desired message to non-state actors, aside from large industrial firms. Instead of this, the trend that is currently seen in Europe is actually the opposite: incorrect political guidelines often make it yet more difficult or even impossible to implement appropriate initiatives. In many cases, therefore, there is no (!) framework for action for civil society actors to develop climate concepts, let alone implement them; they are unable to put their ideas into practice. Sometimes the legal/administrative framework is simply not right; sometimes they cannot finance their projects; in yet other cases, the fact that the external costs of fossil fuels are still not able to be fully internalised (2), meaning that carbon — despite statements to the contrary — has no ‘correct’ price, turns out to be an insurmountable obstacle.

2.13.

All too often, discussion revolves around the ‘losers’ of an ambitious climate policy; just as often, the impression is given that climate action primarily means doing without certain things. Of course, the problems that transforming into a largely carbon-free economy entails must be adequately addressed and taken into account. However, the positive aspects must also be emphasised at least as much in order to create an optimistic mood in society. The technological and economic progress of recent years (such as energy generation from renewable sources, energy storage, and especially digital applications that have enabled significant progress in terms of efficient and smart use of resources), at the latest, justify such a mood.

2.14.

Europe’s current technological and economic situation means that sustainability and climate action can benefit everybody. The European Energy Union builds on this exact notion. A precondition for such initiatives is that policies must support them, or at least make them possible, rather than trying to prevent them — for example, because they call existing structures into question. In principle, it should be easy to make use of the potential for climate-related change and progress; however, it is far from being fully harnessed.

3.1.

We need a new multi-level government approach. The EESC suggests the creation of an ambitious coalition of civil society actors, local and regional authorities, and the responsible political and administrative structures at national and European level.

3.2.

The coalition should:

3.3.

Thus the coalition, as an embodiment of multi-level governance, can help to successfully accomplish the task of protecting the climate, a task that concerns all of society.

3.4.

The COP objectives are clear and the European Council has put forward a wide-ranging vision for a low-carbon, resource-efficient Europe. According to this vision, 80 % to 95 % less greenhouse gas should be emitted in 2050 than is today. This will have a tremendous impact on the realities of life for every single European citizen and every single business and its workforce.

3.5.

In its exploratory opinion on sustainable development (3), the EESC has already described how important it is to take precisely these issues — the impact on everyday life of impending fundamental changes in policy — very seriously.

3.6.

The risk that sustainable development is seen as a threat and not as an opportunity for the future can be headed off by spreading a simple message: while climate action means change, every member of society has the opportunity, either alone or in cooperation with others, to actively shape that change — and in such a way that not only benefits the climate, but also improves living conditions on the ground.

3.7.

This message must both go out to those who will be directly affected by ‘negative’ changes that are sure to happen (e.g. the entire fossil fuels sector) and appeal to and stimulate the positive potential offered by those members of society who are ready to act and can serve as role models for others.

3.8.

Our civil society is extremely varied. This is noticeable in terms of climate action: one actor might find it easy to do something that another actor would have great difficulty in accomplishing. This variety must be taken seriously; this diversity must be understood as an opportunity and used as such.

3.9.

In essence, ‘climate protection’ must be made tangible. There is also a lack of knowledge in this regard. Although many case studies have been drawn up, there is no systematic framework, such as one that distinguishes between categories of actors. This framework would seem necessary because individuals’ different resources imply completely different courses of action. For example:

3.10.

This list of examples demonstrates that civil society actors’ resources vary widely but that the logic behind their action is always similar. They will only commit their own material and financial resources, and their time, when they think they have a realistic chance of achieving immediate resonance. Conversely, this means that in circumstances where no positive impact can be attained, there is a risk of inactivity or even resistance (e.g. to new investment projects).

3.11.

The examples also show that the range of strategies that have been designed and implemented principally by non-state actors right across Europe is as wide and diverse as civil society itself.

3.12.

It would be utterly wrong for politicians to give civil society actors a role conceived of purely in political terms, as part of a top-down approach.

3.13.

Particular consideration should be given to preserving social security in the face of the impending transition. While ‘bottom-up climate action’ means that individuals’ private initiatives become more important and provide significant economic impetus, this should not come at the expense of social security.

3.14.

It is therefore important that those engaged in ‘bottom-up’ climate action remain part of the welfare system. In some cases this will mean redefining how the welfare system is constructed and who makes what contribution to it, simply because burning and exploiting fossil raw materials used to be major pillars of the welfare state. Moving away from this model and transitioning to a largely carbon-free economy must not proceed at the expense of the socio-political standards and prosperity that have been attained in the European Union. The coalition of politics, administration and civil society must give particular consideration to this. Moreover, this should be used as the basis for developing completely new strategies.

To take one example:

3.15.

Decentralised production of energy from renewable resources is now so cheap that, in combination with energy efficiency measures, it could even provide a solution to the problem of (social) energy poverty. That said, such initiatives must be supported by policies that establish a good legal framework and provide access to investment capital.

3.16.

Civil society involvement in climate action is mostly local or regional. Meanwhile, the COP negotiations and many political discussions take place at global level. However, nowhere is the principle ‘think global, act local’ more applicable than in the fight against climate change. The impact of civil society measures must not disappear in a global context; they must be felt, experienced and perceived first-hand, i.e. where the measures are carried out.

3.17.

This means reconsidering, or further reflecting on, European policies: for example, the Kyoto Protocol’s JI/CDM framework is of little use to local initiatives. This is a fundamental problem, because civil society actors tend to take action at local and regional level, while the framework for such action is primarily decided at national and European level. The EESC is concerned to note that there is a gap between these levels.

3.18.

Active climate action carried out by civil society as the second key pillar of European climate policy must have a tangible impact on the ground; otherwise, civil society actors will not take any action at all.

3.19.

Regions, cities and municipalities play an important role. The EESC very much admires the varied initiatives that have already arisen to coordinate these activities. Examples include the World Summit on Climate and Territories, the Covenant of Mayors, the ICLEI network, etc. In many cases, these initiatives have since started to additionally benefit from various forms of state support.

3.20.

Regional development and climate-friendly energy policy could complement each other if decentralised energy production were to take place via local or regional structures, meaning that value creation from using wind, solar and biomass energy would happen locally. It therefore makes sense to increase the range of actors, but this potential strategic link has not yet been sufficiently explored in any official EU document.

3.21.

This is a good example of how the EU does not make comprehensive enough use of civil society’s potential. Even the Covenant of Mayors is primarily considered as being a source of support for implementing the objectives set by the EU. Meanwhile, the Covenant’s role in terms of stimulating new policy initiatives is not sufficiently recognised or systematically used.

4.1.

The coalition will be concerned with the following five tasks:

4.1.1.

First of all, we need to better understand what climate action civil society actors in various roles are planning and want to carry out.

4.1.2.

Second, structural problems and hurdles that constitute obstacles to successful implementation should be identified and removed. This then gives rise to the political task of removing the bureaucratic hurdles and complex procedures that cause civil society actors not to act, or make action significantly more difficult. The Commission took a first step in this direction by publishing its communication on ‘Delivering a New Deal for Energy Consumers’ (4). However, this is far from sufficient: for instance, the notion of a ‘prosumer’ is interpreted far too narrowly (5).

4.1.3.

Third, ‘success stories’ should be publicised even more.

4.1.4.

Fourth, the key conditions and factors for success should be specified.

4.1.5.

Fifth, a policy framework should be developed that puts in place the required conditions for action, enabling civil society actors to design and implement strategies to combat climate change. Conveying the framework for action can be described as the task of multi-level government, as the implementation of the framework for action requires mutual understanding among political decision-makers at European, national and sub-national level, as well as coordinated action between them.

4.2.

Fulfilling the tasks will require additional administrative support, to allow the following activities to constitute the basis for discussions in the coalition of politics, administration and civil society:

4.3.

The role of politics and administrations — if needs be, in cooperation with the EESC — will be to coordinate the coalition and to tackle the obstacles that have been raised and, as much as possible, eliminate them, or at least give clear answers as to why it is thought that certain initiatives should not be implemented.

4.4.

Access to capital and other investment funds will only be extended to civil society actors if a framework for action exists that acknowledges the variety of roles played by civil society actors, recognises their different levels of resources, takes factors for success into consideration and creates positive conditions. This continues to be a relevant and practical problem that is not given sufficient political consideration. For the financial implications of the Paris Agreement are huge and far surpass the Green Climate Fund, amounting to USD 100 billion per year.

4.5.

In particular, small, local banks and other lenders only grant loans to civil society climate initiatives if refinancing is relatively certain. The political framework must satisfy this condition, too (low-risk refinancing of civil society actors’ climate investments).

4.6.

The framework for action must create long-term planning and investment security. Nothing is more detrimental to the necessary level of involvement than the uncertainty created by constant changes of political direction.

4.7.

Alternative investment opportunities are needed for projects that have local impact; civil society actors are able to assess the potential and risks of these projects first hand and manage them, such as by being a member of a cooperative. If the general public sees that investments are actually reaching them and are not getting lost in the tangled web of financial institutions and major investors, this may also improve people’s shaken confidence in financial institutions.

4.8.

If a stable and robust framework for action is in place, a different form of growth in modified economic structures is possible. Social capital will most likely become as important to this new ‘growth’ as financial capital. The alienation of labour will be somewhat transcended by the development of concepts of ‘prosumption’, and the division of labour will be more strongly organised along the lines of community structures. This opens up huge potential for social innovation, which is indispensable for an ambitious climate policy. New roles are arising, which are still imprecisely described with terms such as ‘prosumers’, ‘platforms’ and ‘aggregators’. ‘Prosumption’, in particular, offers a glimpse of an essential ingredient of success in terms of attaining a sustainable lifestyle and sustainable economic activity.

4.9.

This new economic model is not utopian — it can already be seen today in numerous, mainly locally organised, climate initiatives, and is therefore scalable. Scaling, imitation and expansion are absolutely vital, and not just because of the ambitious climate targets; rather, they are a prerequisite for reducing transition costs and averting a conflict between the objectives of climate policy and social policy.

4.10.

The EESC stresses that the Paris Agreement clearly states the need for working conditions to be transformed in a fair way, as was already noted at the Lima Climate Conference. High-quality jobs must be created as part of the new economic model. This can be achieved by means of robust social dialogue, as well as via collective bargaining with the participation of employers, in conjunction with substantive measures and activities such as continuing education for employees to allow them to gain the new qualifications that are necessary for the energy and ecological transition, and also in conjunction with measures to strengthen social security systems. A positive framework for action is necessary in this regard, too. Only then can civil society actors compensate for losses in employment and competitiveness in some sectors — inevitable during a transformation — and enable social, sustainable and inclusive economic growth.

21.10.2016   

EN

Official Journal of the European Union

C 389/28

Rapporteur:

Laure BATUT

1.

the approach to the ‘silver economy’ be changed in view of the fact that digitalisation bridges the age divide and that older people are active agents in the value chain and in their own lives;

2.

the meeting of the EU Ministers for Employment, Social Policy, Health and Consumer Affairs in June 2016, and the European summit on older people in December 2016, promote the digital inclusion of older people to address the two transitions: digital and demographic;

3.

a global system of governance be developed bringing older people into the digital world and developing efficient public services that are resourced at every level, including local level, and exempted from the requirements of the European semester;

4.

a horizontal EU clause be framed on ‘equality for older people’, with the government ministries responsible for equality in the Member States encouraged to implement it;

5.

the EESC and associations representing older people be invited to take part in the discussions of the stakeholder group on the sharing economy sector recommended by the European Parliament;

6.

older people’s access to digital technology and the accessibility of that technology based on acquisition of knowledge and skills be facilitated, and their education and lifelong learning, adaptation of equipment and software, and mentoring be developed without delay so as to ensure their successful inclusion;

7.

indicators be devised to measure the economic impact of older people, their quality of life and the benefits provided by innovation;

8.

older people’s access be facilitated to an EU programme for exchanging good practice, which could be a platform called for instance ‘Seneca: Erasmus Senior Programme’;

9.

trust be developed and the public made aware of EU rules on digital technology by publishing them in the form of a code and a multilingual digital one-stop shop;

10.

internet access be recognised in all the Member States as a right to a universal service based on the criterion of affordability, and — in the event of price barriers — setting of regulated tariffs be encouraged, or even unrestricted and free access provided in designated places for disadvantaged older people;

11.

public-private partnerships (PPPs) be promoted whose profits are in the form of human capital, with IT giants providing free courses for older people as part of their corporate social responsibility (CSR) policy; the courses would take place in all EU primary schools outside of school hours;

12.

obstacles to older people being granted bank loans be removed;

13.

promote a form of ‘community service’ as a way of addressing digital illiteracy.

2.1.

The European Union faces a challenge never before faced by any human society, namely the coincidence of longevity and widespread digitalisation, which together call for sound economic as well as social strategies.

2.2.

By 2060, as shown by the projections (The 2015 Ageing Report, European Commission), there will be two older people for every young person, and the number of very elderly people will exceed the number of children under five: based on median age (Eurostat), the first countries affected will be Sweden, Germany, Poland, Romania and Slovakia, followed a few years later by Belgium, Denmark, Ireland, and subsequently by all the other Member States.

2.3.

Older people and older workers are seen both as a threat for social protection systems and as an opportunity for the goods and services sector. In 2011 the Union took action to help the adult population (1), introducing five strategic guidelines with the aim of creating a ‘job-rich’ economy and improving the quality and effectiveness of education and training opportunities for adults.

2.4.

The Committee notes that older people were not directly concerned by these initiatives.

2.5.

The baby-boomers (a term denoting the large numbers of people born just after the Second World War) are the first generation to have lived without war on their common territory and, together with their parents, they have been the most ‘pro-European’ people in history. They are now described as ‘seniors’. In its background paper ‘Growing the European Silver Economy’ of February 2015, the European Commission talks of readiness to meet the ‘needs of the population over 50’. This population group is sometimes divided into three subgroups: the active, the fragile and the dependant. The EESC also adopts this definition, giving substance to its recommendation that a different approach be adopted towards ‘seniors’ so as treat them as agents of growth.

2.6.

Demographic ageing means the increase in the proportion of older people in a population resulting from a decrease in fertility and mortality. The Japanese (Étude comparative du marché des seniors français et japonais — Opportunités croisées, David Barboni, in Eurasiam, ‘Management No 001’ series, 2007) are ahead of us in terms of an ageing society. They have created a dynamic consumer culture specific to ‘seniors’ in the spheres of well-being, health, finance, insurance, distribution and tourism. Information and communication technologies (ICTs) have become integral to market goods that are intended to improve quality of life, designed for an older ‘consumer’ of targeted products rather than an older ‘stakeholder’ in the digital society, which suits the short-term profit motive of producers. This is an important development, but the approach is oversimplistic.

2.7.

In the EU, baby-boomers have not become merely older consumers of goods: huge numbers of both men and women have, for the first time in the continent’s history, been students, and after that ‘active’ and ‘productive’. Many of these people can now choose to remain active, either in the productive economy or in the social and solidarity economy.

2.8.

Their take-up of ICTs is sometimes perceived as slow and difficult, whereas they have often been the first to adopt them and have even produced innovations (The Seven Myths of Population Aging, Julika Erfurt et al., Accenture, February 2012). In 2010 over 16 % of business start-ups in France were by people over the age of fifty, and nearly half of those start-ups were self-financed. These over-50s were older workers, job-seekers, entrepreneurs who were still active, and even retired people (see the article by Yann Le Galès in Le Figaro, 27 April 2012).

2.9.

It has only been since the 2002 UN Declaration and International Action Plan on Ageing and the 2012 Council Declaration on the European Year for Active Ageing and Solidarity between Generations that we have been talking about the ‘silver economy’ in the EU. Moreover, the Commission believes that every effort should be made to support ‘ageing well’, with the help of ICTs in particular, thus enabling the European Union to play a key role: ‘The Silver Economy covers new market opportunities arising from public and consumer expenditure related to the rights, needs and demands of the (growing) population over 50’ (see the European Commission’s silver economy web page).

2.10.

The EESC believes that issues of well-being, independence, dependence, and the market must be addressed. That said, Europe has almost 125 million older citizens who are active agents of their own lives, of the economy and of growth. Information technologies must be just as much a part of these people’s lives as they are of the ‘active’ population’s.

2.11.

This is why the Committee wishes to emphasise the need to adopt an approach to age that dovetails with other stages of life, without rigid boundaries, so that every healthy senior maintains their digital skills and experience without being disconnected from all the other people in the value chain. A dynamic and inclusive approach must be adopted towards older people: they should not be treated just as being in the final stage of life and digitalisation should not be limited to ‘technical/medical aid’.

2.12.

This should not have any implications for pension rights (Articles 25 and 34 of the EU Charter of Fundamental Rights, and Articles 153 and 156 TFEU), or for pension systems, which are different in each Member State.

2.13.

A holistic and inclusive approach could give all ‘older’ Europeans the assurance that digital innovation is relevant to them. From the Committee’s perspective, it is by accepting responsibility at every level that the Union could play the key role to which it aspires in the realm of the ‘silver economy’.

3.1.1.

The now ageing baby-boomers have a tool to help them: the revolution in new technologies. There is a pressing need to look beyond the market and to ensure that nobody is left on the sidelines of IT practice and knowledge, since connectivity is all-pervasive. The EU must tread the line between the need for interoperability in Europe and the requirement to provide protection in the Member States in very fragmented contexts, but the Commission communications published in April 2016 (COM(2016) 176, 178 and 179 final) concern only the technical issues and do not mention the social dimension. The Commission’s communication of June 2016 on ‘A New Skills Agenda for Europe’ (COM(2016) 381/2) and its proposal for a Council Recommendation on establishing a Skills Guarantee (COM(2016) 382/2) both focus on employability and productivity. They make no mention of older people, and little of digital technology. The Committee hopes that the EU ministerial meeting in June and the summit in December 2016, at which the issue of older people is to be discussed, will be able to promote their digital inclusion and an improvement in their living and working conditions. This is necessary in order to respond to the two transitions: digital and demographic.

3.1.2.

To facilitate cohesion, and to ensure accessibility and raise awareness among older people, and all population categories, the Committee recommends that all relevant EU texts that have already been adopted in connection with digitalisation be published in the form of a code, and that the possibility be considered of creating a multilingual digital one-stop shop.

3.2.1.

Digitalisation enables people to learn and be proactive, especially when they are older and their mobility is reduced. It helps to avoid ‘segregation’ and facilitates knowledge transfer. It can lead to a reversal in the tutor-pupil relationship between the generations and eliminate the age divide.

3.3.1.

The Committee has published a large number of opinions on the technical, economic and social aspects of digital development: infrastructure, rights, costs, telemedicine, online health (‘e-health’), active ageing, cybercrime, smart cities/mobility/islands, internet neutrality, etc.

3.3.2.

The Commission should include every generation, avoiding geographical divides, and should have a long time horizon (to 2060) (3), since the ageing curve is set to steepen in all the Member States.

3.3.3.

In its communications of 19 April 2016 (4), the Commission indicates that it will be looking at ICT standardisation, ‘a crucial element of the Digital Single Market’, the digitisation of industry and cloud computing.

3.3.4.

The Dutch and Slovak presidencies asked the Committee to draw up an exploratory opinion on the social impact of technological development. That opinion, entitled The changing nature of employment relationships and its impact on maintaining a living wage and the impact of technological developments on the social security system and labour law, was adopted on 26 May 2016.

3.3.5.

In its resolution of 19 January 2016 on Towards a Digital Single Market Act (point (80), the European Parliament encourages the Commission ‘to set up a stakeholder group in charge of promoting best practices in the sharing economy sector’, which the EESC also refers to as the collaborative economy, whose existence is highly dependent on digitalisation. Representing civil society is typically an activity that older people can engage in. The EESC would like to be a part of this initiative.

3.4.1.

With the advent of big data, cloud computing, the internet of things, 3D printing, and other new technologies that have appeared with the very rapid expansion of the internet into modern life, certain crippling fears are still very widespread. Older people are more susceptible to these than younger ‘digital natives’. They get stuck because they are afraid that:

3.4.2.

The Committee agrees with the European Parliament that ‘the trust of citizens and businesses in the digital environment is vital to fully unlocking innovation and growth in the digital economy’.

3.4.3.

The crisis situation and state of emergency measures are reinforcing the sense of imperilled freedoms and hypersurveillance, as well as fears about the risks posed by cybercrime.

3.4.4.

People are not familiar with the protection provisions that exist in the Member States and at European Union level. Raising awareness among this population group without scaring it, when school is no longer the mediator, informing and training them, would allow progress to be made by reducing the information asymmetries between the major operators, which are almost always from other countries, and the citizens who are using the digital tools.

3.5.1.2.1.

Under a holistic approach, a new type of governance could establish proactive solidarity between the generations and sustainability in the social sector.

3.5.1.3.1.

Specific funding (research, broadband, information), as well as financing from the Structural Funds and special programmes, has been earmarked for developing digital technology. However, no figure has been put on the investment needed to maintain the EU’s leading position, whereas the needs of Europe’s population — from primary school children to older people, including lifelong learning — should be costed. It is important to ensure that the funding made available is not subject to the dictates of budget austerity. Finally, there is an urgent need to remove obstacles limiting older people’s access to private financing (bank loans) (6).

3.5.1.3.2.

The Commission is proposing public-private partnerships (PPPs). The Committee is dubious about this approach because there is always a risk that the private sector will become involved only if it sees a likely profit, while interest costs would increase government debt and ultimately part of the public domain would have been privatised.

3.6.1.

The EESC has already suggested that internet access should be regarded as a right to a universal service, stressing the affordability aspect, so as to combat social and geographical inequalities. One approach would be to provide public spaces where people have free internet access.

Public services must obviously address the issues faced by older people: transport, health, the postal service, services of general interest (SGIs), services of general economic interest (SGEIs), social services of general interest (SSGIs), social services of general economic interest (SSGEIs), etc.

3.6.2.

National and regional authorities must ensure that older people get into new habits as regards protection and security of digital data. It is especially important to make social inclusion inseparable from digital inclusion as people become less independent. Local government facilitates this because it is close to local concerns. The EESC advocates a form of ‘community service’ as a way of addressing digital illiteracy.

3.6.3.

3.6.4.

Inclusion of older people: it should be the responsibility of the Member States to inform their citizens about all the digital training possibilities they offer older people. Awareness-raising campaigns in the media could serve this end.

3.6.4.2.

Older people need to acquire or maintain digital skills. Although NGOs are very active, this is not enough: Older people need to see their qualifications recognised and to engage in lifelong learning. For example, Slovakia has 18 universities of the third age and a large number of ‘academies’ for older people with few educational qualifications.

3.6.4.3.

Through digital literacy and apprenticeships: the Committee reiterates its call for media and internet education (7) to be promoted for all EU citizens, especially vulnerable people, and commends the introduction of a ‘grand coalition for digital jobs’ at European level. It notes that training involves many different players.

3.6.4.4.

The EESC believes that the Commission would gain from working with the Member States and with universities to ascertain the skills needs of older people and identify ways of meeting them, e.g. by creating formal links with universities to facilitate older people’s access to massive open online courses (MOOCs).

3.6.5.

3.6.5.1.

The EESC agrees with Parliament (8) on the need to ‘overcome gender stereotypes’, recognising ‘the significant potential of female innovators and entrepreneurs and the role they can play in digital transformation’, and would also like to see ‘their integration and participation in information society’. The Committee is aware that older women have often suffered fragmented careers and that they are more likely than men to be living in poverty after they retire. This should be taken into account in measures intended to include women in the digital world of senior citizens.

3.6.5.2.

The EESC also recognises ‘the potential of the Digital Single Market to ensure accessibility and participation for all citizens, including people with special needs, elderly people, minorities and other citizens belonging to vulnerable groups, regarding all aspects of the digital economy’ (9), but it would prefer ‘elderly people’ to still be economic players and not be stigmatised and put in the same bracket as ‘people with special needs’.

3.6.5.3.

The EESC has stated its support for the proposed Directive on accessibility (10), while lamenting the tardiness in drawing up the directive and also the failure to ratify the Marrakesh Treaty. In relation to digitalisation, the Committee understands accessibility to concern both hardware and software: it would like to see easier access for older people and better adapted and multilingual software, and digital public spaces that create interpersonal contacts. Social contacts are vital for vulnerable people.

3.6.6.

The EESC recommends adding a ‘senior’ strand to the EU Erasmus+ programme. This could be a platform for exchanging good practice, called for instance ‘Seneca: Erasmus Senior Programme’.

3.6.7.

Encouraging creativity and innovation at every age through digitalisation, older people being best at identifying their own needs and guiding organisations and individuals offering support.

—

The EESC recommends setting up a PPP whose profits are in the form of human capital, with IT giants providing free courses, as part of their own CSR policies, mentoring older workers who are retiring and providing courses for all older people, in every state school in the Member States outside of school hours.

—

People lack digital skills in the EU (900 000 jobs not filled) (11). Re-skilling of older workers could help to improve this situation, which must be assessed in the light of global competition. Encouraging digital entrepreneurship, training and business start-ups, and developing every person’s skills and well-being, will require sustained public investment.

—

In a situation of mass unemployment, the economy 4.0 allows older people to establish networks and create new businesses, as well as long-term, local employment with high added value, such as jobs in the caring and health professions, jobs that help people remain independent and jobs relating to prevention (12).

—

With regard to the sharing economy in its different forms, the EU has not clearly laid out its principles on abuse of dominant positions and how this can be reconciled with the objective of a ‘social market economy’, considering that a growing proportion of the workers concerned find themselves to be de facto outside the law in terms of labour rights. Older people are likely to be more affected than other population groups by the effects of digitalisation on social cohesion.

3.8.1.

Digitalisation simultaneously facilitates both a top-down and bottom-up approach to social relations, and above all to age.

3.8.2.

The sharing economy can bring people closer together through learning methods that encourage all types of intelligence, and through innovative health solutions that allow disabled and older people to play a full role in society and to be agile even if they are not mobile (‘pervasive computing’).

3.8.3.

However, digitalisation changes the structure of work relationships. As societies age, digitalisation is overturning the order that has underpinned the cohesion of European societies since the second world war, namely solidarity-based systems that cushioned the impact of crises (as in 2008).

3.8.4.

The ‘fourth industrial revolution’ is shaking up employee hierarchies as a result of network activities, the inflow of older people and the breaking down of ‘barriers’. At the same time, around 10 % of e-seniors are connected to the internet but still poor. These seniors could become ‘old people’ again, unable to support themselves (nuclear families) as in previous centuries. This raises the question of whether transition with knowledge transfer is feasible.

3.8.5.

It is vital for a digital social market economy (13) that includes everybody to maintain pension systems. By 2060, these systems will inevitably be based on sources other than paid work, but avoiding the risks of pension funds. The basis for calculating contributions and redistribution of wealth must be considered in detail so as to prepare people psychologically and intellectually for the changes.

21.10.2016   

EN

Official Journal of the European Union

C 389/35

Rapporteur:

Antonio LONGO

1.1.

Four years after the ECI regulation entered into force, the European Economic and Social Committee (EESC) points out that Europeans are at the heart of the European venture and this mechanism could help overcome the democratic deficit by promoting active citizenship and participatory democracy.

1.2.

In line with the views already voiced by the European Parliament, the Committee of the Regions and the European Ombudsman, the EESC considers that the European Citizens’ Initiative has not achieved its full potential because of a regulation that should be revised.

1.3.

The EESC has pinpointed significant technical, legal and bureaucratic problems, along with a clear excess of powers attributed to the Commission, preventing full distribution, implementation and follow-up of successful initiatives.

1.4.

When it comes to the review of the regulation, the EESC proposes the following:

1.4.1.

that citizens’ committees be allowed to begin collecting statements of support on the date of their choice;

1.4.2.

that legal recognition be accorded to citizens’ committees so as to limit the criminal liability of organisers to fraud and serious negligence, in line with the model provided by Directive 2008/99/EC on the protection of the environment through criminal law;

1.4.3.

that a bricks-and-mortar and online one-stop-shop be set up where Europeans can obtain information and be steered through the process of presenting initiatives;

1.4.4.

that the proposals to lower the minimum age for supporting and taking part in an ECI be discussed, as proposed by the Parliament and the Committee of the Regions;

1.4.5.

that the clear conflict of interest within the Commission be resolved by separating the roles of institutional mentor and judge. With this goal in mind, the EESC reiterates that it is willing to continue to support initiatives already under way and would be a natural candidate for the role of facilitator and institutional mentor;

1.4.6.

that appropriate follow-up be guaranteed for successful initiatives, calling upon the Commission to prepare a legislative proposal within 12 months of the end of the campaign or supplying appropriate justification for the decision not to present a proposal. Should no proposal be presented, the EESC would hope that the European Parliament would bring pressure to bear on the Commission under Article 225 of the TFEU;

1.5.

The EESC would point out that some problems could be resolved without reviewing the regulation and so should be tackled rapidly to avoid discouraging potential organisers. With a view to making the mechanism more effective and user-friendly, the EESC calls for the following initiatives to be implemented:

1.5.1.

in order to make the registration process more transparent, the Commission must adopt clear and straightforward procedures and provide detailed answers and possible solutions when initiatives are declared inadmissible, enabling the committees to amend and present them again;

1.5.2.

the Commission must keep up negotiations with the Member States on simplifying, reducing and harmonising the system of national standards laid down for the collection of data. The EESC would propose in particular limiting requests for personal identification documents and enabling all Europeans to sign the initiatives from their countries of residence;

1.5.3.

the free OCS system (1) should be established on a permanent basis in order to simplify the collection and cataloguing of statements of support as well as the checking of these statements by the national authorities. The Committee also calls for this tool to be made available to people with disabilities.

1.6.

More generally, with a view to distributing and establishing the ECI, the EESC recommends:

1.6.1.

providing the public with more information and raising awareness of the ECI mechanism through ad hoc campaigns, enabling citizens’ committees to inform signatories about the results achieved and, above all, through greater commitment by the Commission to publicising the follow-up to successful initiatives;

1.6.2.

guaranteeing multilingualism and exploring new methods of linking up the online collection of signatures with social and digital media in order to reach out to an ever larger audience;

1.6.3.

in principle, enabling every EU citizen to organise an ECI by guaranteeing the option of covering a campaign’s unavoidable expenses for registered ECIs.

1.7.

The EESC proposes to set up an institutional forum on the participation of European citizens, to become a permanent platform for discussion and debate at the Committee along the lines of the European Migration Forum, building on European Citizens’ Initiative Day. The Committee could draft a specific, more detailed proposal in an own-initiative opinion.

2.1.

The European Citizens’ Initiative was instituted by the Treaty of Lisbon (2) as an innovative instrument for transnational participatory democracy. It allows 1 million Europeans from a minimum of seven Member States to ask the European Commission to propose legislation on areas within EU competence. The intention of this is to involve European citizens actively in the European decision-making process, by providing them with an indirect form of the right to initiate legislation.

2.2.

The rules and procedures that govern the ECI are set out in an EU regulation adopted on 16 February 2011 and in force since 1 April 2012 (3).

2.3.

An ECI can be organised or signed by all Europeans who have reached the legal age to vote in the European Parliamentary elections (4). Initiatives cannot be arranged by organisations. However, organisations may promote or support initiatives, provided they do so with full transparency.

2.4.

The ECI procedure involves three steps:

2.4.1.

The launch phase, which involves setting up a citizens’ committee (5), registering the initiative (6) subject to an eligibility assessment by the Commission (7) and certifying the system for online collection of signatures (8).

2.4.2.

During the collection phase, a minimum of 1 million ‘statements of support’ (signatures) must be collected over a maximum period of 12 months and from at least seven EU countries (9). The signatures must be certified by the competent national authorities (10).

2.4.3.

During the submission phase, the initiative is examined by the Commission, prior to a meeting with the organisers and a public hearing at the European Parliament. The Commission has three months in which to respond with an ad hoc communication and decide whether to adopt the proposal beginning the legislative procedure.

3.1.

To date, more than 6 million Europeans have signed an ECI. Although 56 initiatives have been submitted, only 36 have been registered by the Commission, of which three collected at least 1 million signatures (11). No successful initiative has led to a new legislative proposal, although in some cases the Commission has taken account of public opinion on some aspects.

3.2.

The significant technical, legal and bureaucratic difficulties encountered by promoters and the limited legislative impact of successful initiatives have undermined the credibility of the ECI tool. This is illustrated by the drastic decline in initiatives registered (from 16 in 2012 to 5 in 2015 (12)) and statements of support (from over 5 million in 2012 to a few thousand in 2015 (13)).

3.3.

Over the course of these four years, many organisers and representatives of civil society organisations (14) reported flaws and areas of inflexibility in the ECI, which was supposed to be clear, simple and user-friendly. This trend was confirmed during a public hearing organised by the EESC on 22 February 2016.

3.4.

In February 2015, three years after the regulation entered into force, the European Parliament produced a study (15) on the state of its implementation, calling for a review. The conclusions of this study were taken up in October 2015 in a resolution (16) in which the Parliament formally forwarded this request to the Commission with clear, specific proposals.

3.5.

Following an own-initiative inquiry into the proper functioning of the ECI procedure and the Commission’s role and responsibility, in March 2015 the European Ombudsman drew up 11 guidelines for further improvement (17).

3.6.

In October 2015, the Committee of the Regions also adopted an opinion in favour of a rapid and substantial revision of the regulation (18).

3.7.

In response to the many requests to amend the regulation and as required by the regulation, the Commission published a progress report (19) in April 2015 and a follow-up report (20) in February 2016 on the proposals put forward by the Parliament. In both cases, while acknowledging the difficulties encountered by ECI promoters and accepting the possibility of making improvements to the implementation of the current legislative framework, the Commission repeatedly rejected any possibility of revising the current regulation in the near future.

3.8.

It is now widely accepted by the European institutions, organisers and representatives of organised civil society that, despite achieving some positive results, the ECI is still far from reaching its full potential in terms of policy proposals and enabling Europeans to participate actively.

3.9.

The main problems identified consistently by both institutions and stakeholders are as follows:

3.9.1.

there is a lack of knowledge and awareness of the ECI tool among Europeans and national institutions (21);

3.9.2.

the citizens’ committees encountered many technical, legal and bureaucratic obstacles during the registration and collection phases, jeopardising the outcome of their initiatives;

3.9.3.

citizens wishing to sign an initiative encountered many difficulties relating to individual national data processing laws;

3.9.4.

the few successful initiatives were not taken into account by the Commission when drawing up new legislative proposals, merely when drawing up legislative initiatives which were indirectly linked.

3.10.

In detail, the main difficulties encountered by citizens’ committees are:

3.10.1.

the fact that they are not legally recognised. This has a negative impact on important practical aspects of the ECI, such as fundraising or even the simple opening of a current account. Moreover, the fact that promoters are personally liable for ‘any damage they cause in the organisation’ (22) of an ECI acts as a deterrent;

3.10.2.

excessively rigid application of ECI eligibility criteria. Around 40 % of initiatives were declared inadmissible by the European Commission during the first — registration — phase of the process (23). The European Parliament, would like to see further examination of the conflict of interest within the Commission, which is obliged to inform the organisers and make an assessment on the admissibility of the initiative, while also being the recipient of that same initiative (24);

3.10.3.

overlapping activities in the ECI timetable. The time needed to certify online collection systems in each Member State reduces still further what is already a tight 12-month period for collecting signatures;

3.10.4.

lack of appropriate support from the Commission, particularly during the launch phase and in managing the initiative. Particular focus should be given to the hosting service and OCS provided free of charge by the Commission, and to the difficulties faced by organisers drawing up and disseminating multilingual versions of documents;

3.10.5.

managing an ECI is an expensive process. This is demonstrated by the fact that the three successful initiatives were backed by major civil society organisations which provided them with technical, organisational and financial support. Many organisers have highlighted the need — in order to avoid distorting the founding principle of the European Citizens’ Initiative — for greater support by the EU to launch the campaign;

3.10.6.

excessive inflexibility when collecting and handling personal data. In some Member States, legislation in this area has further discouraged the organisation of and support for new initiatives. Moreover, in some countries laws on the collection of data stipulate that only the signatures of citizens residing in the country should be taken into consideration, thereby depriving 11 million people of their right to take part (25);

3.10.7.

a lack of involvement of organisers during follow-up activities. The lack of follow-up on successful initiatives would seem to suggest that meetings and hearings are not enough to spur the Commission to take actual legislative action.

3.11.

2016 is a decisive year in the process that could lead to a review of the ECI. This own-initiative opinion is the EESC’s contribution to this process and recognises the enormous untapped potential of this important and innovative tool in the European decision-making process, in the spirit of true European citizenship.

4.1.

The EESC, as the bridge between the European institutions and organised civil society, has been involved since the beginning of the debate on the ECI. This is demonstrated by the opinions adopted to date (26) and by the establishment of an ad hoc group to monitor the development and implementation of this right (27).

4.2.

Moreover, the Committee is actively involved in the ECI process (28) in the dual role of facilitator and institutional mentor. EESC initiatives and competences include:

4.2.1.

European Citizens’ Initiative Day, organised every year to assess the state of implementation and the effectiveness of the ECI with all the players involved. The event also facilitates the exchange of best practice and networking among organisers and other stakeholders;

4.2.2.

an ECI helpdesk office, set up to provide, inter alia, translations of descriptions of initiatives validated by the Commission into the official languages of the EU;

4.2.3.

making rooms available to help promote campaigns;

4.2.4.

drawing up a practical guide — now in its third edition — to raise awareness and promote the ECI (29). The ECI also takes centre stage in another Committee publication, the European Passport to Active Citizenship (30), which aims to inform Europe’s citizens of their rights and to promote transnational participatory democracy;

4.2.5.

setting up a public archive in 2016 of academic and scientific documentation on the ECI, open to all citizens to consult free of charge;

4.2.6.

presenting the most successful registered initiatives that do not contradict official Committee policy as outlined in its opinions at the plenary session or, alternatively, at section meetings. This allows the EESC to give them sufficient exposure while taking a neutral position;

4.2.7.

EESC delegates take part in European Parliamentary hearings on successful initiatives, thus contributing to the Commission’s analysis and exploration process.

5.1.

The EESC strongly reiterates its support for the European Citizens’ Initiative. Four years after the ECI regulation entered into force, there are encouraging data in terms of participation as well as vast untapped potential. The EESC considers that proper and complete implementation of the ECI could help bridge the growing gulf between Europeans and the EU.

5.2.

The EESC agrees with the views already expressed by the European Parliament, the Committee of the Regions and the European Ombudsman to the effect that the partial and limited implementation of the ECI is the result of a number of factors. There are technical, legal and bureaucratic limitations, as well as a clear institutional short circuit owing to excess powers and responsibilities being attributed to the Commission.

5.3.

The EESC also considers that the Commission has successfully resolved some of these problems, for instance by providing a free OCS system, while others unfortunately cannot be resolved unless the regulation is revised.

5.4.

The EESC therefore calls on the Commission to take action on two fronts: it should act swiftly to resolve and/or simplify the most straightforward and obvious technical and bureaucratic problems, and present a proposal to reform the regulation as rapidly as possible in order to tackle the more complex institutional, legal and organisational issues.

6.1.

The EESC would suggest the following proposals for reforming the regulation with a view to making the ECI mechanism simpler and more effective:

6.1.1.

citizens’ committees should be allowed to begin collecting statements of support when they so choose. This is fundamental to making the 12 months for collecting signatures really count;

6.1.2.

citizens’ committees should be accorded legal recognition, if necessary special status, so as to limit the criminal liability of organisers to fraud and serious negligent, in line with the model provided by Directive 2008/99/EC on the protection of the environment through criminal law;

6.1.3.

a bricks-and-mortar and online one-stop-shop should be set up where Europeans can obtain information and be steered through the process of presenting initiatives. It is crucial to provide citizens’ committees with appropriate technical and legal support in order to facilitate the presentation of proposals and increase the percentage of proposals deemed admissible;

6.1.4.

the proposals to lower the minimum age for supporting and taking part in an ECI should be discussed, as proposed by the Parliament and the Committee of the Regions, in order to offer young people the chance to take an active part in building the European Union;

6.1.5.

the roles of institutional mentor and judge, both of which are currently performed by the Commission, should be separated. This is crucial for resolving the clear conflict of interest in the Commission and enabling the ECI mechanism to be implemented fully and effectively;

6.1.5.1.

The EESC confirms its willingness to continue to support initiatives already under way and would be a natural candidate for the role of facilitator and institutional mentor.

6.1.6.

appropriate follow-up for successful initiatives must be guaranteed. With due respect for the Commission’s right of initiative, the EESC would ask the Commission to prepare a legislative proposal within 12 months of the end of the campaign or supply appropriate justification for the decision not to present a proposal. Should no proposal be presented within the timeframe set, the EESC would hope that the European Parliament would bring pressure to bear on the Commission under Article 225 of the TFEU. The Commission must also establish closer ties with the supporters of these initiatives, going beyond mere hearings held at the European Parliament, in order to guarantee that the proposal meets its supporters’ expectations.

6.2.

Furthermore, the EESC notes that the Commission should:

6.2.1.

make the registration process more transparent and effective. Specifically, the Commission should be more proactive, providing detailed answers and possible solutions when initiatives are declared inadmissible, enabling the committees to amend them to meet the criteria laid down by the rules in force;

6.2.2.

keep up negotiations with the Member States in order to simplify, reduce and harmonise the system of national standards laid down for the collection of data that is necessary to sign a statement of support. The EESC would propose in particular limiting as far as possible requests for personal identification documents and enabling all Europeans to sign the initiatives from their countries of residence (31);

6.2.3.

establish the free OCS system on a permanent basis, since it simplifies the collection and cataloguing of statements of support as well as the checking of these statements by the national authorities. The Committee also calls for this tool to be made available to people with disabilities.

6.3.

The EESC recommends in particular:

6.3.1.

stepping up procedures for informing people and raising awareness about the ECI. This must be done primarily through ad hoc campaigns promoted by the Commission and the Member States. With this goal in mind, the EESC also proposes enabling citizens’ committees to inform interested supporters about developments in and achievements of the campaign (provided that they have authorised this). The same applies to the Commission, which must publicise the follow-up of successful initiatives more effectively, first informing the citizens’ committees;

6.3.2.

guaranteeing multilingualism as a prerequisite for achieving a high rate of participation and exploring new methods of linking up the collection of signatures online with social and digital media in order to reach out to an ever larger audience;

6.3.3.

in principle, enabling every EU citizen to organise an ECI by guaranteeing the option of covering a campaign’s unavoidable expenses for registered ECIs.

6.4.

Lastly, the EESC proposes to set up an institutional forum on the participation of European citizens, to become a permanent platform for discussion and debate at the Committee along the lines of the European Migration Forum, building on European Citizens’ Initiative Day. In order to guarantee the participation of highly qualified speakers, the EESC would also invite institutional representatives with a stake in this issue, one representative per citizens’ committee with a registered initiative and all interested stakeholders. The Committee could draft a specific, more detailed proposal in an own-initiative opinion.

21.10.2016   

EN

Official Journal of the European Union

C 389/43

Rapporteur:

Daniel MAREELS

Co-rapporteur:

Giuseppe GUERINI

1.1.

The EESC welcomes the ‘Action Plan on VAT’, which aims to move towards a definitive VAT system in the EU, and endorses both its objectives and the approach based on four components with a short and medium term perspective. It is now high time to take a qualitative step (‘quantum leap’) forwards, in order to support the single market and contribute to jobs, growth, investment and competitiveness.

1.2.

In the Committee’s view, it is important to strive to implement all parts of the Action Plan as an indivisible whole. This applies in particular to the transition to the definitive VAT system; the aim should be for its actual implementation — which is only scheduled for the second stage of the Action Plan and is conditional on a separate assessment by the Member States — to be carried out in any event and within a reasonable time-frame. If not, there is a risk that the stated objectives could be compromised.

1.3.

With regard to the first stage set out in the Action Plan, which currently applies only to certain supplies of goods, the Committee urges all stakeholders to look into how services can be incorporated into the new system more quickly, which would also alleviate the problems associated with this (transitional) phase. It would also be worth examining methods for ensuring that financial services are more generally subject to VAT.

1.4.

In the Committee’s view, the transformation of the current system should result in a definitive VAT system that is clear, consistent, robust and comprehensive, as well as proportionate and future-proof. In this context, the Committee endorses the proposal to opt for the country of destination principle as the basis for the definitive VAT system, as it will create a level playing field for all suppliers in the same national market and will result in less market distortion.

1.5.

In the Committee’s opinion, close attention should also be paid to how business-friendly the system is with respect to enterprises, particularly SMEs. Despite the innovations and simplifications proposed in the Action Plan, there is still considerable concern regarding the complex and complicated nature of the forthcoming regulation and the significant administrative burden that it could entail.

1.6.

Notwithstanding the need for clarity and legal certainty to be central to the development of the definitive VAT system, the Committee calls for the possibility of additional and further-reaching simplification and of reducing the administrative burden to be examined more closely, whereby consideration could be given to a proportionate approach that benefits SMEs without undermining the comprehensiveness and other key characteristics of the definitive VAT system. They should ideally be involved in the development process from the outset.

1.7.

Consideration should also be given to the comprehensive provision of useful information in a modern form, for example via a web portal, for the benefit of businesses. In particular, this must help small businesses to compete on an equal footing with other businesses and with suppliers from the public sector. More generally, it is important to make cross-border activities within the EU easier and more attractive for all businesses, particularly for SMEs.

1.8.

The EESC welcomes the strong focus on closing the VAT gap and tackling the susceptibility of this tax to fraud, particularly given the size of the sums involved, amounting to EUR 170 billion a year. It is important to make this objective a priority and to deliver results without delay, including by improving cooperation between tax administrations and with customs administrations within the EU and with third countries, making tax administrations more efficient and boosting Eurofisc’s role, strengthening voluntary compliance with the rules, and improving tax collection.

1.8.1.

In the Committee’s view, the Member States need to strengthen the capacity of their tax administrations in all areas, in terms of human, financial and technical resources. This should put them in a position to ensure that the new system works properly and effectively, such that fraud can also be reduced.

1.8.2.

Without prejudice to the actions provided for in the Action Plan in this regard, the Committee wonders whether or not other, additional tools should be used in this area, following the example of a number of recent international commitments on the automatic exchange of information regarding direct taxation.

1.8.3.

In the same vein, the EESC believes that there should be a strong focus on the intrinsic characteristics and features of the definitive VAT system in terms of its susceptibility to fraud. The new rules, appropriate supervision and greater control using the necessary means of enforcement, including judicial means, should consistently lead to a more comprehensive VAT system applied with greater effectiveness. In this context, attention should also be paid to the current exemption for small consignments sent by non-EU suppliers, but the Committee advocates taking a nuanced approach to this question.

1.9.

In the Committee’s view, practical actions to combat fraud must be targeted and proportionate. ‘Bona fide’ enterprises should be protected and no new excessive measures should be imposed on them.

1.10.

The Committee welcomes the focus on new developments in e-commerce and business types. It is important to provide clarity for all those involved in this regard, while at the same time ensuring that all suppliers are given equal treatment, irrespective of whether they are following these developments or are sticking to more traditional channels and methods, and for all their transactions, cross-border or not.

1.11.

The Committee reserves judgement with regard to the greater flexibility granted to Member States regarding reduced rates, and the two options set out in the Action Plan in this respect, as more information is needed on the options proposed, how they would work and what rules they would be subject to. The Committee therefore prefers to set out a number of criteria for the future system. It must combine flexibility and legal certainty, it must be transparent, and for the sake of simplicity the number of reduced rates and exemptions must be limited. In the current circumstances, and based on currently available information, the Committee would prefer option 1, as it is the most closely aligned with the aforementioned criteria.

2.1.

The Action Plan on VAT sets out a pathway for the creation of a single VAT area in the EU. The area should be able to support the single market, help to promote jobs, growth, investment and competitiveness and meet the demands of the 21st century. The new system should be simpler, more fraud-resistant and more business-friendly.

2.2.

The current VAT system is highly fragmented and complex, at least in a cross-border context. It has not kept pace with the challenges of the new global, digital and mobile economy. There is a major discrepancy between anticipated and actual VAT revenues (the ‘VAT gap’) and the system is susceptible to fraud.

2.3.

The proposed approach would modernise and ‘reboot’ (re-launch) the VAT system. Other approaches are not seen as valid options. Any changes to the system require the unanimous approval of all Member States.

2.4.

The Action Plan has four components, and includes at least 27 measures (2). A number of them have been drawn up in accordance with the Better Regulation Guidelines (REFIT).

2.4.1.

The key principles underpinning a future single VAT area undoubtedly form the core of the Action Plan and are the most important chapter thereof. The aim is to put forward a proposal for definitive rules in 2017.

2.4.1.1.

The definitive VAT system will be based on the principle of taxation in the country of destination of goods and services (3), because the country of origin principle has been shown not to be feasible. This applies to all operations, including cross-border transactions. The method of collection shall gradually move towards a more fraud-proof system. These proposals would be implemented in two stages.

2.4.2.

In addition, there are a number of recent and ongoing initiatives. These are as follows:

2.4.3.

The largest package relates to urgent measures to tackle the VAT gap and VAT fraud. The emphasis here is on the following:

2.4.4.

The final objective here is to move — in the longer term — towards a modernised rates policy. The idea is to give Member States greater freedom and flexibility on rates, particularly reduced rates. Initiatives will follow in 2017.

3.1.1.

The EESC welcomes the Action Plan, which is aimed at moving towards a single EU VAT area. It is an ambitious, urgent and necessary action plan that is in keeping with efforts to develop a more modern and competitive single market.

3.1.2.

The EESC welcomes the approach based on 4 components (4) with a differentiated approach in the short and medium term. The idea is to overcome the weaknesses and shortcomings of the current transitional system and to take a qualitative step (‘quantum leap’) forwards, in accordance with the needs of a single market.

3.1.3.

The Committee endorses the proposed approach, in which the definitive VAT system will be based on the country of destination principle. It also notes that the new system must be clear, consistent, robust and comprehensive, as well as proportionate and future-proof. In this context, the EESC urges the European Commission, as a precaution, to examine the possibility of introducing a generalised reverse charge system (5) for all cross-border B2B transactions. Although the reverse charge mechanism is already used in some Member States to reduce VAT fraud in specific economic sectors, applying this principle more generally could result in the risk of VAT fraud being shifted to the retail sale stage.

3.1.4.

The transition to a definitive system must be properly overseen. It is crucial here to improve the performance of national tax administrations and their cross-border cooperation and to address the system’s susceptibility to fraud. With a view to improving the collection of VAT and combating fraud, it is important to encourage the development and exchange of best practices throughout the EU. For example, the possibility could be considered of setting time limits for VAT accounting between Member States. Every effort should be made to close the VAT gap insofar as possible. This should both benefit authorities (correct VAT receipts!) and make the playing field more level for all suppliers.

3.1.5.

At the same time, it is of the utmost importance to make the system more business-friendly, with clarity and legal certainty being the primary considerations. It is also important to reduce the administrative burden, particularly for SMEs, without however undermining the comprehensiveness and other key characteristics (6) of the definitive VAT system. In this connection, efforts should be made to develop standard forms for VAT refunds, to pay refunds in good time, and to develop an accessible system of VAT rates.

3.1.6.

Using the country of destination principle gives Member States freedom to define their own rates, but this must not lead to fragmentation and excessive complexity. A proportionate approach needs to be taken, in the interests of SMEs. Account should also be taken both of the latest developments in cross-border trade and the digital and mobile economy, and of all — existing as well as new — types of businesses.

3.1.7.

For the EESC, efforts to create a modernised rates policy that give Member States greater flexibility on reduced rates (7) should, in principle, come under the objective of applying the ‘country of destination’ principle, given that fewer trade distortions should normally occur under such circumstances. The number of exceptions should be limited and, in order to improve economic efficiency, publicly and privately supplied goods and services should be treated in the same way (8) for VAT purposes. The broader the base on which VAT is applied, the lower the rate needs to be in order to achieve the same tax revenue. At the same time, this allows economic distortions to be avoided.

3.1.8.

For the EESC, it is important for this Action Plan to be fully implemented in its entirety and as an indivisible whole, with all its elements. The lack of certainty that there may currently be in this respect is not in line with the goal of creating a VAT system for a single market, and is liable to compromise the stated objectives. The EESC believes that all necessary safeguards for achieving this objective should be built into the Action Plan. This applies in particular to the transition to the definitive VAT system in two stages, the second of which is currently (9) dependent on a separate assessment and a decision by the Member States. The aim should be for the actual implementation of the definitive VAT system in the second stage to be carried out in any event and within a reasonable time-frame.

3.1.9.

With a view to the full implementation of the Action Plan, the Committee calls on the Member States to cooperate to enhance and step up the exchange of information and to build trust in the efforts being made to implement the texts and increase VAT revenues. In the Committee’s view, the Member States will thus need to strengthen the capacity of their tax administrations, which will need to have adequate human, financial and technical (including ICT) resources. The Committee calls for the Commission to provide support in this regard.

3.1.10.

The Committee expects the Commission to submit, in due time, an in-depth and comprehensive impact assessment of the proposed measures and of the Action Plan as a whole. It must include an assessment of the impact on SMEs, for which complexity and administrative burden present significant challenges.

3.2.1.

The EESC supports the choice of the country of destination principle, thus creating a level playing field for all suppliers on the same national market, regardless of where they are based.

3.2.2.

Under the Action Plan, in the first stage of the transition to the definitive VAT system the country of destination principle will be applied only to goods. For the sake of simplicity and to avoid further complications, the Committee urges the Commission and the Member States to look into how services can be incorporated into the new system more quickly, and to explore ways of making financial services more generally subject to VAT.

3.2.3.

There is a risk that implementation of the new system could increase the administrative burden for businesses, and the Committee therefore highlights the need for simpler VAT rules, particularly for SMEs, that do not, however, undermine the comprehensiveness of the system. At the same time, considerable attention needs to be paid to the clarity of the rules and legal certainty.

3.2.4.

It must be an easy and attractive option for businesses to expand their activities across borders within the EU. In cross-border transactions, the country of destination principle means that suppliers apply the VAT rate applicable in their customers’ Member States, which can lead to complications and additional burdens. Indeed, it may mean that they have to deal with the systems in all 27 other Member States. In order to ensure that the resulting burden remains manageable, provision should be made for public information systems such as a web portal showing, among other things, the rates applicable in all Member States. It is likewise important that businesses should only need to register in the country where they are established. The EESC therefore welcomes the Commission’s proposal that the requirement to register for VAT purposes should apply only in the country of establishment, which should save the businesses concerned an estimated EUR 1 billion.

3.3.1.

The EESC welcomes the focus on closing the VAT gap and tackling the susceptibility of the VAT system to fraud, particularly as the losses for the authorities amount to EUR 170 billion per year, which is equivalent to 15,2 % of total VAT revenue. Cross-border fraud alone represents EUR 50 billion annually.

3.3.2.

It is important to make this objective a priority and to deliver results without delay. Without prejudice to various actions provided for in the Action Plan in this regard, the EESC wonders whether or not other, additional tools should be used, following the example of the recent international commitments on direct taxation, including those relating to exchanging information and the Commission’s plans (10) to combat tax avoidance.

3.3.3.

In the same vein, the EESC believes that there should be a strong focus on the intrinsic characteristics and features of the definitive VAT system in terms of its susceptibility to fraud. The fact that fraud can be reduced considerably (11) by applying a system of staggered payments to cross-border operations does not mean that we can rest on our laurels.

3.3.4.

The new rules, appropriate supervision and greater control using the necessary means of enforcement, including judicial means, should consistently lead to a more comprehensive VAT system applied with greater effectiveness.

3.3.5.

For the EESC, it is important that targeted measures should be taken to close the VAT gap and tackle fraud. Measures to close the gap must be compatible with the proportionality principle and improve the functioning of the internal market. ‘Bona fide’ enterprises should be protected and no new excessive measures should be imposed on them.

3.3.6.

Weaknesses and gaps in the current system, such as the exemption for imports of small consignments by non-EU suppliers, create an uneven playing field, distort the market and lead to substantial revenue losses for the authorities (estimated to be EUR 3 billion annually). If such a scheme is considered fundamentally inappropriate in a modern EU VAT system, then the Committee calls, with a view to costs, for a nuanced approach whereby transactions that genuinely have no market-distorting effect are possibly exempted, as in the case, for example, of small and sporadic low-value consignments for purely private purposes.

3.3.7.

Lessons could also be drawn from the past. In this connection, consideration could be given to the appropriateness, in future, of a broad evaluation of the VAT system: not only of its rules and how it works, but also, more broadly, of whether it meets the requirements of the economy and of the authorities, and of how it contributes to the European project. Such an evaluation could take place at regular intervals.

3.4.1.

The EESC welcomes the Action Plan’s focus on innovative business models and technological progress in an increasingly digital environment. More broadly, it is essential to take account of all major and forward-looking developments. This would also make the definitive VAT system more future-proof.

3.4.2.

For the EESC, the important point here is that, in these circumstances, the VAT rules should be set in such a way as to ensure clarity and certainty for all stakeholders.

3.4.3.

In the same way, it must be ensured that all suppliers offering the same goods or services — cross-border or not — are treated equally, irrespective of whether they are following the latest developments (the digital approach), or are sticking to more traditional channels and methods (physical). The EESC advocates implementing simplification measures such as the common EU VAT threshold in order to make things easier for e-commerce start-ups, and calls for this to be opened up to all SMEs.

3.5.1.

The Committee welcomes and highlights the consideration given by the Action Plan to SMEs. It is important and essential that the Action Plan provides for a whole host of specific measures with fair and appropriate rules for SMEs. This point has already been made elsewhere in this opinion.

3.5.2.

The intention of providing for a broad package of simplification measures for their benefit is welcome. However, these intentions as set out in the Action Plan need to be further clarified and fleshed out. For the EESC, it is important for SMEs to be involved in this from the outset.

3.5.3.

For agricultural enterprises, it would be desirable for the current option of providing compensation for the VAT paid on certain purchases to be turned into an obligation on all Member States. At the same time, the transformation of agricultural products by organisations of agricultural producers or similar organisations should be put on a par with agricultural production.

3.6.1.

With regard to the increased flexibility on reduced rates, the Committee highlights its concern that this could lead to greater fragmentation of VAT rates between Member States, which would be detrimental to the clarity and applicability of the system, particularly for SMEs.

3.6.2.

The Committee reserves judgement with regard to the two options set out in the Action Plan, as more information is needed on the options proposed, how they would work and what rules they would be subject to. The Committee therefore prefers to set out a number of characteristics for the future system. It must combine flexibility and legal certainty, it must be transparent, and the number of reduced rates and exemptions must be limited. In the current circumstances, and based on currently available information, the Committee would prefer option 1 (12), as it is the most closely aligned with the aforementioned criteria.

3.6.3.

The Committee calls for the role and strategic importance of social enterprises (13) to be taken into account in the future definitive VAT system. In this respect, consideration could be given to revising point 15 of Annex III of Directive 2006/112/EC or adding a new provision on applying the reduced rate for social, health and education services for disadvantaged persons provided by institutions recognised as being devoted to social wellbeing. In particular, consideration should be given to exempting, or applying a lower rate to, products and services for disabled and disadvantaged people in the new VAT system.

3.6.4.

It is also important to maintain the existing VAT exemptions for voluntary organisations that have already been authorised in a number of Member States, due to the specific nature of the organisations concerned and the absence of a cross-border component.

3.6.5.

In the framework of the revised VAT directive the possibility could also be examined of the individual Member States applying higher VAT rates than the standard rate to luxury products, and if so, which rules should apply in this case.

3.6.6.

Council Directive 2006/112/EC has granted special reduced VAT rates and derogations to certain European islands and remote areas as a counterbalance to their natural, economic and demographic permanent handicaps. Given the importance of these regimes for insular enterprises and local economies, the EESC calls for their continuation.

21.10.2016   

EN

Official Journal of the European Union

C 389/50

1.1.

The EESC strongly welcomes the communication on ‘Industry 4.0 and digital transformation: where to go’ (1). It considers the entire package (2) to be the first step in a vast European work programme to be carried out in close mutual cooperation between all interested public and private parties.

1.2.

The EESC appreciates the coherent and ambitious strategic vision in industrial policy being displayed in the Communication and its focus on four key issues: (1) technologies and platforms; (2) standards and reference architectures; (3) geographic cohesion, embodied in a network of regional Innovation Hubs; (4) skills at all levels.

1.3.

The urgency arises from the analysis performed by the EC. It stresses the strengths of European digital industry, but it equally expresses fear that the value added may massively shift away from industrial players towards the owners of proprietary digital platforms, and it underlines the lack of common standards and interoperable solutions. There is also a great need for digital skills.

1.4.

Industry 4.0 is essentially a bottom-up process. But the public sector should develop strategic orientations and has a decisive role to play as regulator, facilitator and financial supporter.

1.5.

Digitisation and Industry 4.0 profoundly affect business models and the entire context in which companies currently operate. Awareness building and a common sense of purpose among all stakeholders are paramount: in addition to business, this means social partners at all levels, academia, research institutes, regional and local public actors, the education sector and consumers.

1.6.

No single European country is able to grasp on its own all opportunities in the digital era successfully. Europe as a whole is the critical scale, comparable to big markets such as the US and China. Digitisation of industry requires a shared industrial strategy for the EU and MS. This should strengthen Europe’s industrial base, attract new investments and re-shore investments and jobs. It will keep Europe sharp concerning the target of industrial output to 20 % of its GNP by 2020.

1.7.

A reliable and predictable environment is vital. Start-ups and scaled-ups deserve focused attention. The Council, notably the Competitiveness Council, should, at the initiative of the EC, urgently decide on an EU 4.0 industrial strategy and a Digital Single Market (DSM), replacing the current fragmentation resulting from 28 digital policies. DSM should be an integral part of the revamped single market to avoid fragmentation of the European digital environment.

1.8.

Cooperation is key. National and regional 4.0 Platforms must bring together all relevant actors. Within a common EU framework, each should develop its own characteristics. Partnerships of all kinds, synergies and clustering, cross-border arrangements and European benchmarking should be promoted.

1.9.

In the same vein, Public Private Partnerships and Important Projects of Common European Interest (3) as well as e-government initiatives must be fostered.

1.10.

Increasing disparities between MS in terms of industrial output and technological performance are worrying. The EESC urges that properly designed cooperation should kick start convergence instead.

1.11.

The EESC welcomes the planned EUR 5 billion R & D funding for ICT in H2020 as well as funding from a range of other European funds, including the Juncker Investment Plan. The EC must clarify how these policy intentions will be put into effect.

1.12.

Substantial additional financial resources are apparently needed. The EC is speaking of EUR 50 billion only in ICT investments. This means serious financial involvement by the public and private sectors across Europe. It is as yet unclear how these financial provisions will be implemented within a reasonable timeframe.

1.13.

Private equity has a central role in financing. Banks should be encouraged to play their part in Industry 4.0. A fully-fledged European Capital Market would provide appropriate support.

1.14.

Customised products at mass production prices will greatly benefit users and consumers. Most areas of personal consumption will benefit from higher performance and quality.

1.15.

The Communication is disappointingly concise on the considerable social consequences of digitisation in industry. Net effects are unpredictable. In order to avoid a split society specific attention is needed for those generations and income groups that may be hard hit. For many others, there will be new opportunities.

1.16.

Digitalisation will have considerable consequences for the labour market and work organisation, such as greater income disparities and reduced access to social security systems, which can be prove negative if not properly countered (4).

1.17.

Ensuring stable social relations, a cohesive society, and a well-educated and motivated work force with a decent income and quality jobs requires active involvement by all parties concerned. Social and comprehensive dialogues at all levels — EU, national, regional and company-level — are necessary to ensure a fair adaptation for employees, impacted by digitisation, with timely anticipation and sufficient support for professional adaptation.

1.18.

There is a direct link between education programmes and facilities and social cohesion. Up-to-date skills and qualifications for digital technology users and reskilling are key issues. Business and social partners should be closely involved in developing curricula for all levels and forms of education.

1.19.

The EESC expects the Commission to act as a catalyst by effectively implementing the strategic plan. This implies notably effective coordination of competing approaches, avoiding uncertainty and fragmentation of the market. The Digital Single Market is key. An accelerated process of European standardisation will be decisive.

1.20.

Furthermore the EESC expects an active role of the EC in:

2.1.

Digitalisation in industry is a key part of a broader transformation of the economy that includes robotisation, material sciences, and new production processes, referred to as Industry 4.0. This paradigm shift will radically change business and society. As recently as 2014, the EU did not yet have a clear view of the economic, technological, social and societal aspects of Industry 4.0. The EESC presented a list of desirable measures (7).

2.2.

In September 2015, the EESC adopted an opinion that discussed the socioeconomic consequences of digitisation of industry and disruptive labour markets (8).

2.3.

Crosscutting developments are notably taking place in the US, China, the EU, Japan and Korea. Others will follow. Big data, as a new raw material, are a catalyst for changing patterns of products and services. Previously disjointed fields (9) are interacting, while servicing (especially digital) in value chains is generating substantial additional value to production processes.

2.4.

Today, no business can operate without a digital strategy. This strategy simultaneously affects products, services and processes in the industry as a whole. In view of developing new markets, digitisation of industry generates fierce competition between companies as well as between economic blocks. Pre-competitive cooperation across the globe is usual in business as well.

2.5.

Measures are driven by a focused industrial strategy, notably in the US and China, where business benefits from big internal markets. This is high politics. In 2011, the Obama administration launched a vast ongoing programme on new technologies, notably ICT, involving business, research institutes and universities across the country.

2.6.

As usual, private projects will benefit substantially from new technological programmes recently announced by Federal agencies.

2.7.

The US intends to use digital transformation to regain lost ground in industrial markets while taking advantage of the American freedom of operating, and the dominance of world players in ICT and big data such as Google, Amazon, Microsoft, Cisco and others (10).

2.8.

A consortium of leading industrial companies is working to the same end. A list of the 50 most innovative companies of 2014 reveals that seven in ten leading companies are based in the US (11).

2.9.

Chinese authorities are using digital transformation to reinforce the Chinese position worldwide. Official documents underline the goal of matching the US.

2.10.

The deliberate ambition of China is highlighted in a crosscutting state-driven programme entitled Made in China 2025, based on the objectives of the German Industrie 4.0. This is a totally new concept in Chinese economic and manufacturing processes, with a high degree of coordination among decision-makers, economic actors and innovative forces.

2.11.

Vast financial resources have been earmarked. Despite the economic downturn, these specific programmes are not affected.

2.12.

Interest in Industry 4.0 has increased dramatically. In parallel, digitisation is a high priority for the Juncker Commission. It will require optimal coordination among EC services.

2.13.

A clear focus in the Competitiveness Council is crucial for a common sense of purpose among EC, national and regional decision-makers. Digitisation of industry and big data in European manufacturing must ensure a strong position for the future. This is essentially a bottom-up process involving all stakeholders. The public sector is in charge as regulator, facilitator and financial supporter.

2.14.

Since 2011, the initiative has come from Germany through combined efforts by the Federal Government, academia and business. Following the launch of Industrie 4.0 in 2013, the process has been streamlined in Platform 4.0 and a cooperation agreement between government, business and the trade unions. Business is increasingly involved in crosscutting initiatives, often in cooperation with regional authorities.

2.15.

Meanwhile, there are Industrie 4.0 in Austria, L’Industrie du Futur in France, Catapult in the UK, Smart Industry in the Netherlands, and others. It is a diverse landscape, each country developing its own vision on 4.0 and the future of industry. The intensity of cooperation and sense of urgency, however, differs greatly from country to country.

2.16.

National, regional and local (cities) initiatives are complementary. The EC is rightly envisaging cross-border arrangements and partnerships as well as exchange of best practices.

2.17.

Big and specialised medium-sized companies are taking the lead. Main concerns are the great disparities between countries, backlog or insufficient awareness in SMEs and trailing public involvement. A very challenging issue is the fragmentation of the European market and the usual depressing European picture of 28 industrial and digital policies.

2.18.

Digitisation of industry and Industry 4.0 embraces much more than technology. Business has to prepare for radical changes due to a range of factors: speed, scale and unpredictability of production as well as further fragmentation and reorientation of value chains, new relationships between research institutes, higher education and the private sector, new business models, new links between big and smaller companies, new ways of cooperating between all levels in business (design, production, sales, logistics, maintenance), the need for updated and new skills alongside new ways of working, and closer links between business and the user. Traditional industries in particular are challenged by brand new concepts (12).

2.19.

The consumer can be more in the driver’s seat than ever. By combining manufacturing and services, digitisation entails customisation and tailor-made production at the same or lower costs than series production, often in a new setting. At the same time, consumers must be enabled to obtain appropriate information about products social and environmental effects that will facilitate an informed opinion about intended purchases.

3.1.

In supporting Industry 4.0 and its stakeholders — entrepreneurs, personnel, social partners, suppliers and clients, education providers — the EU needs an industrial strategy with an appropriate division of labour among all parties concerned. The role of the Competitiveness Council is crucial. Like all industrial policies, it is a matter of shared competences.

3.2.

The European Council (13) has set the goal that by 2020, European industry should make up 20 % of European GNP instead of the present 12 %. However, hesitation among investors and a lack of (European) direction is instead resulting in a decline in manufacturing.

3.3.

Underscoring the need for coherent policies, the Commission services are currently preparing an impressive work programme — regulations, standardisation, R & D and financial resources — in close cooperation with the MS and business.

3.4.

The EESC notes with satisfaction that most of the 17 recommendations it presented in its opinion in 2014 (14) are currently under discussion.

3.5.

The EC, governments, business and stakeholders will rightly take part simultaneously in policy meetings on Industry 4.0. European PPPs should be encouraged (15) as well as the planned Important Project of Common European Interest on low-power electronics for the IoT. A detailed roadmap for business and governments is needed.

3.6.

One major concern is the ongoing existence of 28 digital policies. This is fundamentally counterproductive to the need for scale, and a major argument to accelerate the DSM.

3.7.

The Digital Single Market (DSM) should become an integral part of the revamped Single Market. Smart legislation and regulation must be speeded up. The agenda embraces:

3.8.

The EESC urges consultations to strike an appropriate balance between legislative provisions and room for manoeuvre for economic actors.

3.9.

Europe must make efforts to set worldwide standards, in close cooperation with non-European actors.

3.10.

The General Data Protection Regulation (GDPR) contains multiple flexibilities for MS. It is important that the GDPR will not lead to outcomes that restrict access and re-use of data, increasing disharmony in the EU market.

3.11.

Cyber security is still largely underestimated in business and by states. Cyber crime is spreading over the world. The EU has an obvious role to play.

3.12.

The EESC urges the EC to pay specific attention to statistics that are still systematically overlooked. More detailed statistical evidence concerning services is crucial for business and policy makers.

4.1.

An increasing number of countries and regions are now working seriously on digitisation.

4.2.

However, increasing disparities between countries and the uneven awareness in business in the various countries are a major concern. A major issue is interoperability between companies and suppliers.

4.3.

Awareness-raising programmes are set up for business and stakeholders. Each country finds its own methods. Platforms, often at regional level, are very important for enhancing cooperation between big and small companies, as well as between these and research institutes and universities.

4.4.

Broadening regional and national PPPs should be encouraged. They bring partners from various backgrounds together and promote cross-fertilisation. They promote cooperation and can be a welcome source of badly needed financial support.

4.5.

Platforms, centres of excellence and field labs often focus on specific parts of digitisation, for instance on changing value chains, new business models and social and work place innovation (16) with active participation of employees and trade unions. One-stop-shops must be encouraged. Sector organisations play a role in addressing sector-specific issues.

4.6.

(Technical) universities around which incubators are assembled — business campuses — also play a proactive role. The concept of the entrepreneurial university, which is spreading over the continent, is most helpful (17).

4.7.

Networks of companies, platforms, sector organisations and universities intensify desirable trends. DSM should improve conditions for cross-border cooperation. Economic and legal conditions for sharing value creation through digitisation in industry may be needed to foster cooperation between players of (very) different sizes. Particular focus on SMEs and start-ups is necessary. Most of these lack targeted information and many lack tools for improvement.

4.8.

In comparison with the US, start-ups and scaled-ups are rather a weak point in Europe. Cross-fertilisation between big and small and networks of (cross-border) incubators is paying off. Coaches such as part-time, retired and experienced entrepreneurs and mentors can play a very supportive role.

5.1.

Digitisation is becoming a priority for European funds (Horizon 2020, regional and other funding). The Joint Research Centre in Seville and forthcoming innovation hubs with worldwide experience can be very beneficial.

5.2.

From the point of view of the EESC, the issue of financing all necessary investments is far more complicated than it appears in the Communication. Substantial additional financial resources are apparently needed. The EC is speaking of EUR 35 billion only in ICT investments. This implies close cooperation between EU, national, and regional funding, as well as active industrial involvement via Platforms and PPPs. Clarification is needed on how these financial provisions will be implemented within a reasonable timeframe. The usual question can be posed: who is expected to pay what and to what purpose?

5.3.

European funding is rightly often criticised for being too slow and too bureaucratic, which is usually very costly and discourages small business. Look at the US! Adjusted procedures and less bureaucracy are imperative, while maintaining fairness. Reducing the number of mandatory partners in R & D consortia may be useful (18).

5.4.

The University Business Incubation Rankings for small business can be a helpful tool for measuring promising start-ups and speeding up EU bureaucratic procedures.

5.5.

Innovative digital business processes are driven by start- and scaled-ups such as unicorns (19). The Americans are leading. In addition, American innovation-watchers are very active in Europe and looking for profitable take-overs.

5.6.

Besides the banking sector private equity is actively involved. Private banking itself is also digitising. FinTech operates alongside this. As an offshoot of the digital world, it promotes speed, increased efficiency and transparency as well as a changing attitude to clients. More FinTech hotspots in Europe besides London would be helpful.

5.7.

Banks and FinTech should be key partners in DSM, with a higher level of performance and value creation. They should be encouraged to act as a strategic partner for industry, professionally assessing the economic, social and environmental benefit of projects. Radically new forms of interlinking platforms and value added services may help.

5.8.

Financial regulation (or the review thereof) should not hinder the banking sector in taking calculated risks in investing in Industry 4.0.

5.9.

A fully-fledged European Capital Market is needed to create a financial level playing field comparable to that of the US.

6.1.

Industry 4.0 and the digital society concerns everybody. Awareness must be raised. Risks and uncertainty about the future as well as chances and opportunities, societal conditions and acceptance are under discussion.

6.2.

In North West Europe, the digital revolution is already in the media everyday (TV, press, social media). In some countries, public opinion is reasonably well informed, but information must be considerably improved across Europe.