28.2.2022

Official Journal of the European Union

C 97/1

Resolution on the 2022 Work Programme of the European Commission and of the European Committee of the Regions political priorities for 2022

(2022/C 97/01)

THE EUROPEAN COMMITTEE OF THE REGIONS,

Having regard to:

—	the European Commission Work Programme for 2022;

—	the Protocol of Cooperation with the European Commission of February 2012;

—	the CoR Resolution on its priorities for 2020-2025 (1);

—	the CoR Resolution on its proposals in view of the European Commission Work Programme for 2022 (2); and

—	the CoR Resolution on the 2021 EU Annual Regional and Local Barometer (3);

calls on the European Parliament, the Council and the Commission to take into account the views and suggestions contained in this resolution in the Joint Declaration on the EU’s legislative priorities 2022, and stands ready to contribute to its implementation;

recalls the Commission’s commitment to following up on proposals emerging from the Conference on the Future of Europe. Considers the interactive multilingual digital platform and the citizens’ panels as a possible instrument for an EU-wide mechanism for permanent dialogue with citizens and stands ready to take a key part in this process;

welcomes the 2022 the European Year of Youth and is committed to cooperating closely with the other EU institutions and all relevant stakeholders to promote youth participation at all levels;

Bringing Europe closer to its people

reiterates its call on the Commission to include the regional and local dimension in the scope of the legislative and non-legislative measures outlined in the European Democracy Action Plan, and stresses the importance of safeguarding the integrity of local and regional elections and empowering local communities in the fight against discrimination and disinformation;

demands that future legislative initiative to protect media freedom take into consideration the situation of local and regional media;

supports the Commission's focus on guaranteeing the effective application of the rule of law, including the principle of the primacy of EU law as a prerequisite for equal rights and legal certainty in the exercise of common policies;

points out the need to continue efforts towards a Union of Equality, including by proposing new measures to prevent and combat violence against women, and expects therefore to be involved in the establishment of a new interinstitutional EU ethics body;

is fully committed to implementing the concept of ‘active subsidiarity’ and reiterates its call for the systematic use of the Subsidiarity Assessment Grid in Commission proposals;

Supports the intention to reduce administrative burden for citizens and businesses with the ‘one in, one out’ approach. Expects, nonetheless, this exercise to be compliant with the EU’s economic, social and environmental standards and to rely on an evidence-based approach and an assessment of the cost of inaction;

10.

reiterates its call for the interinstitutional agreement, guidelines and toolbox on better regulation to be reviewed, incorporating the multilevel dimension of the European regulatory process, as suggested by the Task Force on Subsidiarity;

11.

welcomes, in that context, the Commission’s commitment to strengthening territorial impact assessments and rural proofing, so that the needs and specificities of different EU territories are better taken into account. Points out the need to also take border regions into account. The CoR therefore calls on the Commission to guarantee that inception impact assessments and impact assessments include an evaluation of the potential territorially differentiated impacts of each legislative initiative; supports, moreover, its plans to organise a large-scale conference on better regulation in 2022, taking particular account of the local and regional dimension as it did in the Fit for Future platform;

12.

underlines the growing importance of foresight as a political tool to develop evidence-based long-term perspectives, in many policy fields where local and regional authorities bear key responsibilities, such as in the field of economic support, demography, climate change mitigation and adaptation measures, education, health, skills or infrastructure. Reiterates, therefore, its commitment to supporting the Commission in mapping local and regional foresight capacity to take local and regional experience into account, notably the annual Strategic Foresight Report;

Building resilient communities

13.

demands the systematic organisation of multilevel platforms and dialogues to deliver structured and inclusive participation of local and regional authorities in planning and implementing Green Deal initiatives;

14.

underlines the immense territorial challenges of the green transition including in the transport sector and acknowledges the specific situation of automotive regions and calls for a multilevel dialogue for the just transition of the automotive sector;

15.

will continue to accompany the implementation of a long-term vision for rural areas and the transition towards a greener, smarter and sustainable agriculture. The establishment of a Rural Agenda should provide the basis for a governance mechanism for rural areas, while protecting local identities and specialities, and clear quantitative indicators for a rural dimension in the European semester;

16.

supports the prioritisation of the Zero Pollution Ambition for protecting people and ecosystems and expects local and regional authorities to be taken into account in the upcoming Zero Pollution Package, notably by setting up the relevant Stakeholder Platform and an EU regions scoreboard;

17.

calls for upcoming proposals on plastics and circular economy to take into account input already provided in relevant CoR opinions, including the focus on competences of local and regional authorities for waste collection and management;

18.

calls on the Commission to further promote the use of space technology and availability of data at local level in order to fight climate change, foster energy transition, protect the environment and implement the Green Deal;

19.

looks forward to the revision of the Energy Performance of Buildings Directive with a view to a full implementation of the Renovation Wave and calls on the Commission to build upon the ongoing enhanced cooperation with the CoR;

20.

reiterates that for the EU Green Deal to be a success, a thorough revision of the Governance of the Energy Union regulation is needed, linking it to the UN 2030 Agenda and the SDGs framework, and with the structural implementation of multilevel governance through systematic Multilevel Green Deal Dialogues;

21.

welcomes the Toolbox for managing fluctuations on energy prices and calls for starting with reinforced action to fight energy poverty and vulnerability to climate change;

22.

welcomes the recognition of the intrinsic link between the climate and biodiversity crises and insists that the European Commission keep promoting multilevel governance in the EU and worldwide building upon the Edinburgh declaration, in particular at the upcoming UN CBD COP15 and UNFCCC COP27; calls for an Ocean Law that would involve local and regional authorities in marine environment protection;

23.

calls for reinforcing the implementation of the EU Climate Adaptation Strategy, building upon the Mission on adaptation and on the EU Policy Support Facility for Adaptation;

24.

welcomes the Commission’s ambition of reaching the targets set out in the 2030 Digital Compass, and calls for digital cohesion to be integrated as a complementary dimension to economic, social and territorial cohesion within EU policies;

25.

deplores the lack of relevant indicators at local and regional level to monitor the 2030 Digital Decade targets; seeks, therefore, to develop such indicators;

26.

welcomes the Commission's commitment to adopting a European Chips Act to reflect on the EU's high dependency on third countries’ supplies of state-of-the-art technologies;

27.

welcomes the announced legal initiative for a Single Market Emergency Instrument. Calls upon the European Commission to ensure that the frontline role of LRAs is reflected in its proposal, especially when it comes to dealing with disruptions of the Single Market in territories that rely on strong cross-border supply chains and exchanges;

28.

welcomes the Commission’s intention to review the EU’s competition policy. Underlines that a possible revision of the market definition must carefully consider to what extent this will affect the economic balance between different EU regions, as well as SMEs and consumers;

29.

regrets that the Commission Work Programme does not foresee actions addressing the fundamental changes that the Green Deal, digitalisation and decarbonisation will bring to European industry. Recommends, therefore, that the Commission link its future industrial policy more closely to future-proofing and take on board lessons from competitive regional ecosystems, the importance of key enabling technologies and the need to strike a balance between competitiveness and open strategic autonomy;

30.

stresses the importance of protecting citizens’ fundamental rights in future EU artificial intelligence (AI) regulations and strengthening ethical requirements for the deployment of high-risk AI; welcomes to this effect the European Commission public consultation on the adaptation of civil liability rules to the specific challenges of the digital age and artificial intelligence (4) [1] and expects that this will result in an updated framework aimed at ensuring consumer redress for damage caused by AI applications;

31.

is committed to working towards the creation of the fully-fledged European Health Union that respects the principle of subsidiarity and calls for a clearer role for the European Parliament and for regions in the future EU Health Emergency Preparedness and Response Authority, as well as in the European Health Data Space; explicitly requests that local and regional authorities be involved in health crisis emergency planning and delivery, as part of the HERA proposal, as well as under the draft regulation on serious cross-border threats to health;

32.

calls on the Commission to take into account the role of local and regional authorities in cancer prevention; stands ready to advise on a forthcoming screening recommendation and to be part of the implementation process;

33.

reiterates the recommendations contained in its opinion on the New Pact on Migration and Asylum. A common migration policy based on solidarity and ensuring efficient management of migration flows as required by the Treaties can only be achieved with the involvement of all levels of governance, including the local and regional levels;

34.

reiterates the need for a functioning Schengen area without internal borders; supports the efforts of Member States and the Commission in protecting the EU external borders while upholding the rule of law and respecting human rights;

35.

calls on the EU institutions to financially support those Member States that successfully protect the EU's external borders;

36.

stresses the need for stronger coordination, cooperation and key information exchange between local and regional authorities, Member States and law enforcement authorities in order to address cross-border crimes effectively, and in particular terrorism and organised crime;

37.

expects the Commission to follow-up on the CoR’s request to give the relationship between the United Kingdom (UK) and the EU more territorial ‘depth’. The CoR will contribute to facilitating and developing territorial cooperation with the devolved nations and UK local and regional authorities, including beyond the institutional framework of the Trade and Cooperation Agreement;

38.

calls for the establishment of sustained and structured support by the Commission for peer-to-peer cooperation between local authorities in the Western Balkans and their counterparts in the EU, in particular through the Joint Consultative Committees with Montenegro, North Macedonia and Serbia and the CoR’s Working Group for the Western Balkans. Welcomes the re-launch of the TAIEX Strategic Support to Local Authorities in the Western Balkans;

39.

welcomes the Commission’s continuous commitment to the Eastern Partnership (EaP), in particular by taking up the CoR's proposal to launch the EaP Academy for Public Administration;

40.

reiterates that within the renewed partnership with the Southern Neighbourhood, all of the EU institutions should consider local and regional authorities as key partners for sustainable development and thereby create new dynamics for decentralisation reforms;

41.

calls on the Commission to recognise the role that local and regional authorities can play in contributing to peace and prosperity in third countries, with initiatives such as the Nicosia Initiative — a concrete example of peer-to-peer cooperation;

42.

calls for a clear plan for a long-term commitment and financial reinforcement of the EU Civil Protection Mechanism and its instruments in terms of both disaster prevention and preparedness, as well as collective emergency response capacity. Also urges the Commission to include regional and local experience on disaster management in the recently established Union Civil Protection Knowledge Network;

Cohesion, our fundamental value

43.

underlines the crucial role of cohesion policy and demands therefore that cities and regions be given the opportunity to make the most of Next Generation EU, in order to consolidate long-term and sustainable investments they are planning under cohesion policy;

44.

calls on the Commission to report on the involvement of LRAs in the implementation phase of the National Recovery and Resilience Plans (NRRPs) in its ‘Review Report’ on the implementation of the Recover and Resilience Facility (RRF), due by July 2022 (Article 16 of the RRF Regulation). Asks for full respect of the partnership principle and its implementation in the Just Transition Fund (JTF) and the Recovery and Resilience Facility (RRF) and for quick approval of all NRRPs;

45.

welcomes the Commission’s relaunch of the economic governance review exercise, and believes that the time has come to rethink the EU's fiscal framework so as to avoid again making public investment and public services the adjustment variable;

46.

regrets that the Commission did not consider an extension, for one additional year, of the 100 % co-financing rate and an increase of the ‘de minimis’ threshold within the Coronavirus Response Investment Initiative plus, taking into account the budgetary constraints that regional and local authorities are still facing;

47.

welcomes the decision to renew the EU’s strategic partnership with the outermost regions in order to properly consider the impact of the COVID outbreak and adjust the EU support;

48.

is concerned about the slow approval of the Partnership Agreements in the Member States, with regard to a low absorption of the available structural funds and suggests a close collaboration between the regions and the EU institutions to speed up the approval rate, including of the operational programmes;

49.

asks the Commission to create, in addition to the existing website for investor relations, a dedicated web portal for European Bond issues, containing the full aggregated data for all marketed bonds and bills under NextGenerationEU and NextGenerationEU Green Bonds;

50.

underlines the need for an EU policy framework to allow for the efficient establishment and management of cross-border public services; also calls for a more robust legal framework to ensure that cooperation between regional and local actors in EU border regions is supported, guaranteeing minimal standards for cross-border cooperation in the event of crises to maintain a sufficient level of public services;

51.

regrets that several measures under the Sustainable and Smart Mobility Strategy, planned for 2022, are not reflected in the Commission’s Work Programme, notably in relation to combined transport, river information services and the efficiency of international rail transport. Welcomes however that ‘multimodal digital mobility services’ are included in the Work Programme and underlines that collective public transport, often directly organised by LRAs as services of general economic interest, must be at the core of this initiative;

52.

reiterates the need for a speedy implementation of the European Pillar of Social Rights and ‘beyond GDP’ indicators to measure economic, social and environmental progress facilitating the transition to a sustainable wellbeing economy;

53.

eagerly anticipates the recommendation on minimum income, as a step towards eradicating poverty in the EU and as a much-needed follow up of the adequate minimum wages directive;

54.

welcomes the creation of the European Platform on Combatting Homelessness, as a first step reflecting the CoR demands over the years for a more efficient policy towards homelessness;

55.

urges the Commission to duly take into account the CoR’s recent work on care workers and care services in its forthcoming European Care Strategy;

56.

looks forward to the Commission’s Education Package and underlines the importance of ensuring synergies and coherence with the future initiatives to improve digital skills;

57.

welcomes the proposed Aim, Learn, Master, Achieve programme (ALMA) and stresses the need to ensure that the resources allocated to the programme are in line with the significant number of young people neither in employment, education and training (NEETs) in the EU;

58.

underlines the need to make the European Research Area a reality by supporting regional innovation ecosystems through a strategic and coordinated approach of all levels of government and looks forward to developing the concept of regional ERA Hubs together with the Commission;

59.

supports the implementation of the Horizon Missions as bold steps towards addressing societal challenges but also underlines the need for an effective system of multilevel governance that combines the Missions with local and regional development strategies, the COVID recovery measures and the innovation funding through the structural funds;

60.

regrets that smart specialisation is not mentioned in the Work Programme, as a key concept to overcome the dispersion of different programmes and policies to promote innovation;

61.

regrets that its proposal for a new European Tourism Strategy 2030/2050 is not mentioned in the Commission Work Programme 2022; calls on the Commission to present a new ambitious vision for sustainable tourism, taking account both of the COVID-19 impact and of the green and digital recovery;

62.

instructs its president to forward this Resolution to the European Commission, the European Parliament, the Slovenian, French and Czech presidencies of the Council of the EU and the president of the European Council.

Brussels, 1 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) COR-2020-01392-00-00-RES-TRA

(2) COR-2021-02507-00-00-RES-TRA

(3) COR-2021-03857-00-00-RES-TRA

(4) https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12979-Civil-liability-adapting-liability-rules-to-the-digital-age-and-artificial-intelligence/public-consultation_en.

28.2.2022

Official Journal of the European Union

C 97/10

Opinion of the European Committee of the Regions — Better regulation: Joining forces to make better laws

(2022/C 97/03)

Rapporteur:

Piero Mauro ZANIN (IT/EPP), President and Member of the Regional Council of Friuli-Venezia Giulia

Reference document:

Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions — Better regulation: Joining forces to make better laws.

Brussels, 29.4.2021

COM(2021) 219 final

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

Better regulation to support the recovery of the EU

stresses that the EU’s better regulation system is considered by the OECD to be among the most advanced regulatory systems in the world, capable of producing high quality regulation which is fit for the future and matches the major environmental, digital and social transformation challenges facing the European Union;

agrees that EU laws must create added value, keep the level of administrative burden to a minimum and proportionate to the objectives aimed at by the relevant regulation, be clear and transparent and comply with the principles of subsidiarity and proportionality;

underscores that it is fundamental that the better regulation system incorporates multilevel governance in the European Union since European legislation is implemented by the Member States, regions and local authorities: the involvement of levels of government which are responsible for implementing EU legislation is a prerequisite for high quality legislation able to work towards common goals. Therefore, recommends that the European Commission prioritises the collaboration with local and regional authorities (LRAs), particularly those with legislative powers, throughout the policy cycle, based on a multi-level governance working method;

notes that democratically elected LRAs still have limited influence on the shaping of the EU legislation they are required to implement: both these authorities and the CoR, their institutional representative at EU level, must be given a bigger role in the European governance system;

sees as positive the Commission’s efforts to strengthen its role as guardian of the Treaties, its focus on more effective enforcement of EU regulation, and thus doing more to ensure this, and its support for the Member States, regions and municipalities in effectively and properly implementing EU law. A greater degree of implementation and more effective implementation will also further the better regulation agenda;

calls on the Commission to explore ways of involving regional parliaments more closely in the EU policy-making process, by harnessing the early warning mechanism provided for in the Treaties, in order to ensure that they can contribute positively to the development of active subsidiarity (1);

considers that the time has come to join forces to make better laws, by taking a bottom-up approach, improving and approximating better regulation tools (many of which are used by the regions) to ensure that they are compatible, and sharing good practices and available data;

endorses the European Commission’s intention of involving Europeans to a greater extent in the process of shaping European policies through consultations, but would urge the Commission to also build for that purpose on the LRAs and the CoR’s capacity of capturing, mediating and relaying citizens’ concerns;

agrees that political action must be based on in-depth analyses and scientific evidence, so that its economic, social, gender and environmental impact, among others, can be systematically evaluated;

10.

supports the Commission’s intention to mainstream the Sustainable Development Goals (SDGs) into EU policy- and decision-making, including by improving the analysis and reporting of proposals on sustainable development. Emphasises that the implementation of the SDGs must not be undermined by administrative and regulatory burdens and must pay equal attention to the economic, social, gender and environmental aspects of sustainable development. Urges the Member States and LRAs to do likewise;

11.

agrees that the ‘do no significant harm’ principle should be applied in all policy fields, in line with the EU 2050 long-term strategy (2) and Agenda 2030 (3); calls for LRAs to be involved in resource planning and management, as they are on the front line when it comes to implementing environmental, climate, social and energy policies. Points to the CoR opinion on the European Climate Law (4) and recommends giving consideration to the cost of inaction, which can have significant long-term consequences which are not immediately apparent;

12.

calls on the Commission, the Member States and the LRAs to issue compatible legislation able to remove obstacles and red tape which, by slowing down recovery, undermine people’s wellbeing. Asks the Commission to support the regions, particularly cross-border regions and less developed by promoting common legislation, drawing on the cooperation initiatives already in place in border and vulnerable areas, such as the European Groupings of Territorial Cooperation (EGTC);

13.

calls on the EU institutions, the Member States and the LRAs to each focus on implementing the recommendations of the Task Force on Subsidiarity, Proportionality and ‘Doing Less More Efficiently’ (5). Calls for these recommendations to be updated in light of the lessons learned from the pandemic and the objectives of the green and digital and social transition and building fairer, more resilient and more equal economies and societies in the framework of NGEU;

14.

calls for the interinstitutional agreement, guidelines and toolbox on better regulation to be reviewed, incorporating the multilevel dimension of the European regulatory process, as suggested by the Task Force on Subsidiarity (6). Underlines the importance of action to increase the level of awareness about and use of better regulation tools among the Member States and LRAs, particularly those with legislative powers. Calls for every effort to be made to enhance the linguistic aspect, terminology sharing and proper translation, as these are key to working towards the common objectives of better regulation at all levels of governance;

A common commitment

15.

agrees that it is not possible to produce good quality legislation without taking account of the results of previous legislation. Points out that many regions have added evaluation clauses to their laws in order to ensure that data on the impact of specific legislation are available. Acknowledges that institutions at every level — European, national, regional and local — are responsible for sharing the data gathered in a common evidence register;

16.

notes that it would be useful to establish a joint legislative portal and recommends that communication campaigns be organised in all Member States to raise awareness about it;

17.

considers that the LRAs’ sites could help to publicise more widely the Commission's public consultations, passing on calls for contributions and, where appropriate, promoting permanent networks of contributors with a view to collecting requests and input from end users, whose feedback is crucial for making progress on growth and development objectives;

Improved communication with stakeholders and the general public

18.

is pleased that the European Commission intends to further improve the consultations and make them more targeted, clearer and more user-friendly, partly by means of more balanced and structured questionnaires which are less technical and easier to understand. Endorses the move to merge public consultations and roadmaps into a single ‘call for evidence’ on the ‘Have Your Say’ portal. Stresses that questionnaires need to be translated simultaneously into all the EU languages in order to make it possible for interested parties to take part, in all places and at all levels;

19.

suggests that, given their specificities, LRAs should be more frequently subject to targeted consultations. Recommends that the Commission consult the CoR on developing open consultations and roadmaps for proposals which have a significant impact on subnational tiers of government, and that it involve LRAs via the CoR in a decentralised, systematic information campaign on the European Commission's annual work programmes;

20.

considers that the Conference on the Future of Europe (CoFoE) presents an excellent opportunity for debate with citizens. Points to the CoR opinion on Local and regional authorities in the permanent dialogue with citizens and reiterates that the CoFoE should be seen as an opportunity to rethink and reform the way the EU functions and is perceived by its citizens (7). Again points out that the CoR must play a key role in the CoFoE, that LRAs, particularly those with legislative powers, must be given a stronger role in the democratic functioning of the EU and that the territorial dimension of EU policies must be bolstered;

21.

stresses the need to promote public involvement in the EU policy-making process. Accordingly, points to the CoR proposal to establish a pan-EU network for dialogue based on voluntary public participation (CitizEN) which, if tested during the CoFoE, could introduce a structural mechanism for informing and involving the general public, boosting their long-term political engagement;

Improved transparency

22.

recommends ensuring that the legislative process is as transparent as possible, so that, for every legislative proposal, members of the public have unfettered access to all the data available and all the existing input, studies and evaluations;

23.

considers that the CoR’s access to select trilogue meeting documents, provided that it has already issued an opinion or is drafting one on the proposal in question under Article 307 TFEU, would be essential to assess whether the changes discussed in those meetings are relevant from a regional or local perspective and warrant a new opinion. Such access would enable the CoR to fulfil its role as an advisory body and would ensure the effectiveness or ‘effet utile’ of the provisions of the Treaties pertaining to the CoR;

24.

calls on the Commission to link up databases, registers, archives and portals, including MIDAS. Through specific communication and training activities, the CoR and associations of LRAs, the Commission should also make the public more familiar with these sources of information;

25.

welcomes the Commission’s intention to step up efforts to improve public consultation and the way feedback is processed. It is currently unclear how the Commission weighs individual contributions, but this is necessary to ensure democratic transparency here. In any event, when drawing up its legislative proposals the Commission should pay special attention to the contributions from regional public administrations with powers in the areas under consultation;

New tools for further simplifying and lessening the administrative burden

26.

agrees that the time has come to focus more on the impact of legislation in terms of financial costs and ever increasing red tape for local and regional authorities, people, families and businesses, particularly micro, small and medium-sized businesses which are the backbone of the EU economy;

27.

calls on the European Commission, when applying the ‘one in, one out’ approach, through which the Commission aims to offset new burdens arising from legislative proposals by cutting an equivalent amount of existing red tape in the same sector, to guarantee that inception impact assessments and impact assessments include an evaluation of the potential territorially differentiated impacts of each legislative initiative. Expects that the application of this principle preserves the EU’s legislative objectives and high economic, social and environmental standards. Further expects that the methodologies used to measure and reduce burdens rely on an evidence-based approach concerning the offsetting of administrative burdens and the cost of inaction so that they can later become standard operating practice for decision-makers at all levels and flank proposals throughout the legislative cycle all the way through to implementation at national, regional and local level;

28.

stresses that new European legislative initiatives should generate EU added-value and, in addition, believes that it would be crucial to ensure that the measures and obligations proposed are simple and can be applied effectively and efficiently in order to achieve the agreed policy aims. Calls for increased transparency and accountability and for less administrative burdens on businesses, especially small and medium-sized enterprises (SMEs). Stresses that the EU should adopt a target to reduce the overall EU regulatory burden on businesses;

29.

points out that following the adoption of the Small Business Act, some countries and regions have implemented methodologies for evaluating the burden imposed by legislation on businesses. Encourages the exchange of good practices on ways to offset burdens, as well as instruments, methodologies and data collected;

30.

considers that investing in the roll-out of digital solutions able to modernise public administrative systems by bringing them into line with the pace and needs of industry is crucial for cutting red tape and streamlining procedures;

31.

calls on the Commission and the Member States to support businesses, particularly micro, small and medium-sized businesses, when they make the investments needed to adapt to the standards required under the relevant EU sectoral legislation, including as regards training and upskilling, reskilling;

32.

acknowledges that legislation needs to be reviewed and simplified with a view to removing barriers to implementation, including across borders, and making laws more effective, transparent and understandable to end users, whether individuals or businesses. Accordingly, welcomes the achievements of the 2020 Annual Burden Survey which, in line with the 2016 interinstitutional agreement on better regulation, reports on the measures taken to reduce burdens and simplify legislation;

33.

endorses the objective of the regulatory fitness and performance programme (REFIT) which has now been reinforced with the establishment of the Fit for Future Platform (F4F). Welcomes the enhanced role of the CoR in this platform, with three representatives in the Government group, which partially addresses the CoR’s concerns regarding the governance and effectiveness of the previous REFIT Platform, and with RegHub (Network of Regional Hubs for EU Policy). Reiterates its support for the F4F Platform and its commitment to step up cooperation with the European Commission. Points out that the CoR is well placed to systematically gather input from LRAs, through its members, networks and other targeted initiatives such as RegHub (8);

34.

highlights the added value RegHub provides, by means of stakeholder consultations, to the development of a European database on the impact of implementing EU legislation. Flags up the fact that RegHub also supports the implementation of EU legislation by disseminating information and creating an environment for the exchange of good practices and also for the assessment of progress and results. Notes that with a view to the continuity and consistency of simplification, it might be useful to activate RegHub for directives and regulations on which consultations and reviews have been organised in order to support the implementation of these texts. Calls on the Commission to consider long-term financial support for the development and consolidation of RegHub as a better regulation instrument;

35.

considers that it is essential to step up the participation of regions, provinces and cities in RegHub as far as possible, and also calls on the Member States to use the network to implement systems for gathering data and information at local level;

Improving our tools

36.

considers that one thing the pandemic has taught us is that it is crucial to pick up on indications of such events as early as possible, so that appropriate action can be taken swiftly to mitigate at least the worst effects. Notes that policy-makers need comprehensive, up-to-date scientific data in order to shape strategies able to cope with the challenges. Points to the need for close, ongoing cooperation with the scientific and research community;

37.

hopes that the methodology for incorporating strategic foresight into the policy-shaping process will be set out in the better regulation package, taking due account of the local and regional perspective. Points out that LRAs and the CoR are well placed to contribute to strategic foresight;

38.

calls on the Commission to take account of the CoR’s input when establishing the Joint Legislative Portal, including opinions, territorial impact assessments, RegHub reports, studies and documents on legislative proposals and reviews. Asks to be able to contribute to the technical improvements to the ‘Have Your Say’ portal in order to promote greater understanding of specific local features and facilitate access for LRAs;

39.

hopes that the European Commission will make the local and regional impact of policies clearer by revising the better regulation guidelines and updating the toolbox with regard to tools and methodologies for the identification of impacts in general and territorial impact assessments in particular, making them flexible enough to be used in a range of situations and at all levels;

40.

points out that concepts such as evaluating impact on rural areas, urban impact assessments and cross-border impact assessments all come under the umbrella of territorial impact assessments and that compartmentalising them must not undermine the objective of place-based and evidence-based policy-making;

41.

welcomes the continued efforts of the European Commission (specifically the Joint Research Centre and DG Regional and Urban Policy) and the ESPON EGTC programme to fine-tune the tools for assessing territorial impact. Recommends that even when a full territorial impact assessment is not feasible or not deemed relevant, other types of impact assessment should be carried out using the most detailed territorial data available with existing statistics;

42.

points out that ‘territorial blindness’ has harmful repercussions on the quality of policy-making. The absence of sufficient subnational data in many important indexes and scoreboards (such as the DESI (Digital Economy and Society) Index, the Social Scoreboard and the SDGs) and the absence or insufficient quality of subnational analysis in the foresight activities of the European institutions can have an adverse and enduring impact on the Union as a whole, on the spirit of cohesion between territories and on the lives of individuals. The better regulation guidelines and toolbox must therefore give clear signals and provide useful tools to enable territorial impact assessments to be more broadly used throughout the policy-making cycle, guaranteeing that other types of impact assessments (social, economic, environmental or otherwise) are also carried out at subnational level;

43.

calls for the LRAs to be more involved, so as to provide data and information for territorial impact assessments which European-level bodies would have difficulty accessing. Calls on the European Commission to pass on information to LRAs via the CoR and RegHub on how to use the various models developed by ESPON to perform territorial impact assessments. This will foster a culture of assessment and evidence-based and place-based policy-making, including when transposing and implementing regulation; based on a multi-level governance working method;

44.

highlights the need to explain why no impact assessment is carried out for a given legislative proposal, especially in the case of proposals likely to have a territorial impact;

45.

agrees with the task force's (9) recommendations as regards active subsidiarity, since taking decisions at the closest possible level to Europeans helps boost the visibility of the measures and enhances the EU’s democratic legitimacy. Calls on the Commission to take account of the forms of decentralisation already in place across the EU, including in the field of taxation, when considering subsidiarity, given that this monitoring exercise must be based on the distribution of powers between the various tiers of government;

46.

calls on the co-legislators and the Member States to systematically use the subsidiarity assessment grid. Urges regional parliaments to use this grid when verifying that EU legislative proposals comply with the subsidiarity principle, within the meaning of Protocol No 2 to the TFEU;

47.

with a view to delivering on the objectives of the green and digital transition, calls on the Commission and the Member States to involve the LRAs in every stage of the decision-making process, both at European level (during consultations and ex ante and ex post assessments) and at national level (when shaping policies, from legislation to framing and implementing plans and programmes and policy instruments which most impact cities and regions) in order to ensure consistency. In line with the task force’s (10) recommendations, recommends updating the ways in which countries involve their regions in implementing the National Recovery and Resilience Plans (NRRPs) and the Green Deal objectives based on a multi-level governance working method, with a view to the green, digital and socially fair transition;

48.

welcomes the efforts to increase the quality of assessments through independent scrutiny and supports the setting up of the Regulatory Scrutiny Board (11) since the permanent nature and composition of the new board, with its extended mandate, partially addresses the CoR's concerns regarding its effectiveness. Reiterates its call for the board to include a permanent member designated by the CoR. Calls on the European Commission to make available draft evaluations and impact assessments that are submitted to the board so that the CoR’s contributions to better regulation can be evaluated and targeted more effectively. Asks the board to consider using the reports on the implementation of RegHub as a tool for examining the legislative proposals and points out that the CoR is willing to step up its cooperation with the board;

The key role of application

49.

undertakes to bring all its tools and methodologies for collecting and analysing territorial data together into one single better regulation package, to include RegHub consultations, thereby forging stronger links with the Commission's better regulation toolbox and the tools developed by the European Parliamentary Research Service. Encourages the Commission and the Member States to ensure that LRAs also have access to the initiatives set out there providing support for transposing directives, implementing regulations and properly enacting EU rules;

50.

in line with the recommendations of the Task Force on Subsidiarity (12), recommends that LRAs cooperate on preparing national implementation plans which can provide added value over those developed by the European Commission;

51.

agrees with the Commission on the need to familiarise the Member States and the regions with the notion of gold-plating and, if additional rules at national level are considered necessary when implementing European legislation, recommends that this be identified through the transposition act or related documents, in accordance with the provisions of the interinstitutional agreement on better regulation (13). It is also recommended to avoid gold-plating, particularly when implementing programmes under shared management and in the case of national procurement rules, with a view to preventing over-regulation.

Brussels, 1 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) CoR opinion on Better regulation: taking stock and sustaining our commitment, CDR 2579/2019.

(2) https://ec.europa.eu/clima/policies/strategies/2050_en.

(3) https://ec.europa.eu/international-partnerships/sustainable-development-goals_en.

(4) https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-1361-2020.

(5) Report of the Task Force on Subsidiarity, Proportionality and ‘Doing Less More Efficiently’, https://ec.europa.eu/info/files/report-task-force-subsidiarity-proportionality-and-doing-less-more-efficiently_en.

(6) Recommendation 8.

(7) CoR opinion on Local and regional authorities in the permanent dialogue with citizens, https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-4989-2019.

(8) Network of Regional Hubs for EU Policy https://cor.europa.eu/en/engage/Pages/network-regional-hubs-implementation-assessment.aspx.

(9) Report of the Task Force on Subsidiarity, Proportionality and ‘Doing Less More Efficiently’, https://ec.europa.eu/info/files/report-task-force-subsidiarity-proportionality-and-doing-less-more-efficiently_en.

(10) Recommendation 4.

(11) Opinion on the EU agenda on better regulation, https://cor.europa.eu/en/our-work/Pages/OpinionTimeline.aspx?opId=CDR-4129-2015.

(12) Recommendation 5 of the Task Force on Subsidiarity, Proportionality and ‘Doing Less More Efficiently’.

(13) Point 43 of the agreement.

28.2.2022

Official Journal of the European Union

C 97/21

Opinion of the European Committee of the Regions — Implementation of the Recovery and Resilience Facility

(2022/C 97/05)

Rapporteur:

Rob JONKMAN (NL/ECR), Alderman of the municipality of Opsterland

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

General comments

welcomes the Recovery and Resilience Facility (RRF) as an ambitious and timely tool to enable the EU to emerge stronger from the COVID-19 crisis and to speed up the green and digital transitions. Supports the European Commission’s view that most Member States have done a good job of drawing up the national recovery and resilience plans (NRRPs) in a relatively short space of time;

is aware that in several Member States the NRRPs are only part of broader national recovery plans, and points to the need for more exchange of experience and a comprehensive approach at European level, in order to overcome the crisis and make the EU economy more robust and sustainable for the future;

cautions that the European semester as a governance mechanism for the Fund (referred to as ‘Facility’) remains a centralised and top-down exercise that is not appropriate for a tool that is supposed to strengthen economic, social and regional cohesion; notes the importance of implementing the NRRPs properly, distributing the funds objectively and transparently, in close partnership with local and regional authorities, the social partners and NGOs, based on the principle of subsidiarity, multilevel governance, and an integrated and bottom-up approach. The greater the ownership in a Member State, the greater the likelihood that the NRRPs will be implemented successfully;

stresses that local and regional authorities (LRAs) have been at the forefront of the fight against the COVID-19 crisis and its socio-economic consequences since the outbreak of the pandemic, both through their own policies and by implementing and enforcing decisions taken by national governments;

draws attention to the fact that, for many municipalities and regions, the COVID-19 crisis has led to a decrease in revenue and an increase in expenditure. This is a repeat of the situation that prevailed during the credit crisis (2008-2011). The level of investment by LRAs has still not returned to the level recorded prior to that economic and financial crisis;

points out that LRAs, which are responsible for one third of all public expenditure and more than half of public investment in the EU (1), have, in many cases, statutory power in certain policy areas that are key for the RRF. It is essential that local and regional authorities are directly involved in designing and implementing the NRRPs, successfully implementing the reforms and investments within their remits, in line with the degree of economic, fiscal and financial autonomy provided for by their national legal framework and the subsidiarity principle;

Involvement of local and regional authorities in preparing the NRRPs

notes that as can be seen from studies by the CoR, the EPC, the Konrad Adenauer Stiftung and the CPMR (2), LRAs have been insufficiently involved in the preparation process of national recovery and resilience plans, and that the extent to which LRA input into the plans has been incorporated in most cases cannot be ascertained;

concludes that, as a result, the picture of the level of LRA involvement in preparing the NRRPs varies widely, and that, although LRAs or their associations have officially been consulted on the draft plans in several Member States, generally speaking it is unclear how these consultations have taken place in practice and what has been done with the decentralised input into the plans;

also regrets that, in most Member States, preparing the NRRPs has been a top-down process, which carries the risk of centralising important public investment and has an impact on the ultimate success of the Recovery and Resilience Facility. This is at odds with the importance of multilevel governance, the principle of subsidiarity and the process of decentralisation that has taken place in many Member States in recent decades, not least with regard to the programmes under the European Structural and Investment Funds (ESIF);

10.

argues that the ways in which the NRRPs have been drawn up and the LRAs have been involved are not conducive to promoting ownership of the recovery plans. Lessons learned from previous European semesters show that many country-specific recommendations were not followed up due to the lack of a clear approach and ownership; points out that this is also due to the lack of recognition of the role of local and regional authorities in the European semester;

11.

expresses its disappointment that, generally speaking, the Committee’s opinion on involving LRAs directly, and as subnational authorities, in preparing the NRRPs has not been properly followed up (3). The CoR regrets that the call set out in Recital 34 of the RRF Regulation, stressing the importance of Member States involving LRAs in preparing and implementing the recovery plans, has only been partially taken into account. The preparatory processes of NRRPs also call into question respect for the subsidiarity principle.

12.

points to the specific case of the outermost regions, whose need for particular attention within the European Semester has been recognised by the European Commission;

13.

reiterates that LRAs, as public authorities, are closest to their citizens and businesses and are therefore the most aware of their needs, problems and aspirations. In the end, they are responsible for the implementation of most of the national strategies at local level, which are usually formulated with top-down approaches and therefore are not in line with local needs. Similarly, LRAs provide the majority of public services to their residents and businesses, and invest in policy areas covered by the recovery plans. The economic and social recovery, as well as the green and digital transitions, — particularly the digitalisation of public administrations — can therefore only succeed if LRAs are directly involved in preparing and implementing the NRRPs. Without the structural involvement of LRAs, the political level closest to the public will be left out, with the result that the milestones and targets set cannot be achieved; Therefore it is suggested that LRAs, or national associations that represent LRAs, be involved in planning commissions, and be part of negotiations with the European Commission;

14.

also concludes that most NRRPs do not include any reference to contributing to achieving the Sustainable Development Goals (SDGs), whereas the EU has previously decided that its policies should contribute to this across the board. Therefore it is suggested that The European Commission set up clear indicators that need to be followed by Member States;

15.

underlines that Member States and the EU institutions must strictly apply and respect the ‘do no significant harm’ principle (DNSH) across each investment and reform, in particular sustainable investments contributing to climate and biodiversity targets; insists that the European Commission ensures the reporting system is in place and the territorial dimension and expertise of LRAs are considered in the assessment as the evaluation for each measure is done on the national level;

Involvement of local and regional authorities in implementing the NRRPs

16.

in the light of the above, points out that implementing the NRRPs at local and regional level is crucial, and calls on the Commission to encourage the Member States to actively involve local and regional authorities in this process in a structured way, and to present guidance to that end;

17.

points out in this connection that the vital role of LRAs is not limited solely to implementing the NRRPs, but also to their further planning and evaluation;

18.

calls on European associations such as CEMR, Eurocities and CPMR (4) to continue, jointly with the Committee, to inform local and regional authorities and their associations about the (implementation of the) NRRPs and the role that LRAs can play in this regard;

19.

calls on the Member States to define the role of local and regional authorities in the implementation, further planning and evaluation of the recovery plans in the agreements concluded with the European Commission on operational arrangements (in accordance with Article 20(6) of the RRF Regulation) and the individual legal commitments with Member States on financial contributions (in accordance with Article 23 of the RRF Regulation) — taking into account the constitutional relations and division of powers in the Member States, especially since in some Member States, sub-national governments are partially responsible for implementing the Resilience and Recovery Facility. In their reports on the implementation of the RRF, the Member States should include a section on the involvement of LRAs, in line with Recital 34 of the RRF Regulation;

20.

points out that the scoreboard for measuring progress in, and the provision of information on implementing the NRRPs, should be operational by 31 December 2021, as set out in Article 30 of the RRF Regulation, serves as a basis for the Recovery and Resilience Dialogue and should take into account regional and local interests. Asks the European Commission to ensure the ‘territorial dimension’ and role of LRAs are properly reflected in the biannual scoreboard. In order to ensure an inclusive monitoring process and an objective approach to implementation, an understanding of the objectives achieved at local and regional level is essential, without leading to excessive administrative burden for LRAs;

21.

calls on the European Commission to continue to require Member States to take into account the specific characteristics of all types of regions when implementing their National Recovery and Resilience Plans, to allow for a place-based implementation of the NRRPs;

22.

welcomes the inclusion of ‘recovery and resilience dialogues’ in the RRF Regulation. The Committee would like to draw the attention of the European Parliament to the right, in accordance with Article 26 of the RRF Regulation, to invite the Commission, every two months, to present the state of the recovery, Member States’ plans and the progress with implementation.

23.

calls on the European Commission to consult the Member States and regions on a regular basis and to ensure that all requirements and principles, in particular the principles of subsidiarity and multi-level governance, are adhered to as closely as possible when implementing the NRRPs, and serve as a point of reference in the discussions on the biannual progress reports;

24.

given the importance of local and regional involvement in implementing the NRRPs, calls on the Parliament and the Commission to systematically involve the European Committee of the Regions in the ‘recovery and resilience dialogues’, in order to promote dialogue between all EU institutions and advisory bodies so that the regional and local dimension is properly safeguarded;

25.

calls on the 27 members of the European Parliament’s joint ECON-BUDG Working Group on the Scrutiny of the Recovery and Resilience Facility, and their alternates, to play their full role as watchdog over the implementation of the recovery plans and to involve the Committee and other LRA representatives in these dialogues on a regular basis; stresses that the Committee can also draw on the expertise of its Green Deal Working Group and the Broadband Platform to support the monitoring of the key green and digital targets;

Territorial cohesion

26.

welcomes the anchoring of the RRF in economic, social and territorial cohesion through the legal basis in Article 175 TFEU and the inclusion of cohesion as one of the pillars set out in Article 3 of the final regulation;

27.

advocates that Member States should involve LRAs in the cost-benefit analysis of the RRF public investments and reforms in the field of cohesion, sustainability and digitalisation and execute the RRF-funding schemes under shared or direct management, where applicable;

28.

insists that it is essential that the implementation of the RRF Regulation is applied in full respect of Article 4(2) TEU, the principles of conferral, objectivity, non-discrimination and equal treatment; stresses that as agreed in the December 2020 European Council Conclusions, the Union budget (including Next Generation EU) must be protected against any kind of fraud, corruption and conflict of interest — to protect its sound financial management and the Union’s financial interests;

29.

concludes, however, that territorial cohesion is only addressed in the NRRPs to a certain extent. Some NRRPs provide information at local and regional level and address social, digital and environmental issues from a territorial perspective. However, the territorial approach is not systematically streamlined across all policy areas;

30.

considers the top-down approach of most NRRPs and the lack of involvement of local and regional authorities to be the cause of this, and therefore urges the Commission and the Member States to uphold and implement the partnership principle enshrined in the European code of conduct on partnership in the framework of the European Structural and Investment Funds;

31.

points out that the centralised approach leads to territorial differences being overlooked, both in terms of challenges and opportunities. As a result, NRRPs may be less efficient and have less impact than desired. This puts regions that were already lagging behind in their development before the outbreak of the pandemic at risk of an even greater development gap, be it in employment, educational attainment, business support, digitalisation, mobility or other key policy areas;

32.

notes, moreover, that insufficient involvement of LRAs in preparing the NRRPs carries the risk of not achieving the potential synergies with cohesion policy. There is a risk of overlapping investments between the recovery plans and the ESIF programmes, creating competition between the two. The fact that NRRPs do not require national co-financing and are subject to a special state aid regime is detrimental to ESIF programmes. The cohesion policy objectives to reduce disparities between the various regions and the backwardness of the least favoured regions should not be jeopardised;

33.

expresses its surprise that, to date, there has been no clear coordination between the NRRPs and the ESIF programmes, as this is mandatory in accordance with Article 17 of the RRF Regulation. The Committee therefore calls on the Commission to draw attention to this in the agreements concluded with the Member States on the NRRPs. The synergy between the NRRPs and the ESIF programmes should also be part of the Commission’s annual reports on the implementation of the RRF and of the scrutiny by the European Parliament;

34.

also draws attention to coordination with the other programmes funded by NextGenEU (e.g. REACT-EU). Effective implementation by LRAs is hampered by the recovery programmes’ different turnaround times and the lack of alignment between the existing EU programmes and the new programmes funded by NextGenEU concerning ambitions for a green and digital transition;

35.

notes, moreover, that the NRRPs make barely any reference to other European programmes (e.g. the CEF), which means that the NRRPs also need to be more closely coordinated with those EU programmes;

Administrative capacity

36.

stresses that while in many NRRPs administrative capacity is the subject of reforms under the country-specific recommendations, some Member States do not pay sufficient attention to strengthening administrative capacity at local and regional level; points out that the administrative capacity of many local and regional authorities should be developed, particularly given the wide range of EU programmes and opportunities for financial support:

37.

emphasises that in order to ensure proper implementation of the NRRP and an adequate take-up of RRF funds, Member States, in close cooperation with local and regional authorities, where applicable, can facilitate the creation and/or extension of local and regional authorities’ administrative capacities in order to achieve efficient use of public funds by jointly developing and supporting mechanisms for policy coordination, cooperation, information transfer and specific and continuous training schemes;

38.

considers, therefore, that the Technical Support Instrument (TSI) should be made more readily available to support local and regional authorities, especially the less developed regions facing the largest capacity gap, as this discourages them from making the best use of RRF support in implementing investments and reforms;

European semester

39.

points out that, as subnational authorities, LRAs play an important role in the delivery of reforms implemented through the NRRPs on the basis of the country-specific recommendations of the European semester, through investment, reforms and legislation; encourages the European Commission in cooperation with the CoR to make public and share good practices and experiences on the involvement of LRAs in the European Semester;

40.

invites the European Commission to actively support local and regional authorities that have experienced problems absorbing EU funds in the past in addressing these problems, so that the NRRPs can be successfully implemented across the European Union;

41.

reiterates, therefore, its call issued in previous opinions (5) for a code of conduct for the involvement of local and regional authorities in the context of the European semester. This code is more urgent and necessary than ever if the European semester is to become more transparent, inclusive and democratic, and also more effective, by involving local and regional authorities; This increases ownership at local and regional level, thus improving the implementation of the desired reforms in the Member States;

42.

concludes that having a code of conduct for partnership in the European semester would have avoided a top-down approach in preparing the NRRPs. The direct involvement of LRAs as partners and subnational authorities would have led to the objective of economic, social and territorial cohesion being better anchored in the NRRPs;

43.

draws the Commission’s attention once again to its own communication of 23 October 2018 on subsidiarity (6), which acknowledges, among other things, that local and regional authorities are different to other stakeholders because they are at the forefront of implementing EU law and that ‘there is scope in many cases for the views of national and regional Parliaments and those of local and regional authorities to be reflected better […] during the legislative procedure’; invites the European Commission to step up this involvement in the future;

44.

also concludes that, as regards the territorial dimension of the European semester, the Commission has taken steps to include more regional elements in the country-specific recommendations and to establish the link with ESIF programmes. In the Committee’s view, this makes establishing a code of conduct to formalise the involvement of local and regional authorities in the European semester a logical and necessary step;

45.

calls, at the very least, for Member States in future to report, in their annual national reform programmes (NRPs) under the European semester, on their consultations with local and regional authorities and stakeholders, in the spirit of Article 18(4)(q) of the RRF Regulation, and to describe in detail the tangible impact of these consultations;

46.

considers that for a sound implementation of the NRRPs with regularly involved LRAs, a thorough reform of the European semester is necessary, not only in the light of the lessons learned from preparing the NRRPs, but also in order to make it a genuine tool for the EU’s long-term objectives, be it in the context of ‘Fit for 55’, the digital transition, the achievement of the Sustainable Development Goals (SDGs) by 2030, and to reach climate neutrality by 2050.

Brussels, 1 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) OECD, Key data on Local and Regional Governments in the European Union (brochure), 2018. Available at: https://www.oecd.org/regional/EU-Local-government-key-data.pdf

(2) EPC and Konrad Adenauer Stiftung Europe: Discussion paper: National Recovery & Resilience Plans: Empowering the green and digital transitions? (April 2021).

CoR study by Alessandro Valenza, Anda Iacob, Clarissa Amichetti, Pietro Celotti (t33 Srl), Sabine Zillmer (Spatial Foresight) and Jacek Kotrasinski: Regional and local authorities and the National Recovery & Resilience Plans (June 2021), available at: https://cor.europa.eu/en/engage/studies/Documents/Regional%20and%20local%20authorities%20and%20the%20National%20Recovery%20and%20Resilience%20Plans/NRRPs_study.pdf

CPMR analysis on the National Recovery & Resilience Plans — Technical note (June 2021).

(3) Opinion of the Committee of the Regions: Recovery plan for Europe in response to the COVID-19 pandemic: Recovery and Resilience Facility and Technical Support Instrument (COR-2020-03381).

(4) CEMR: Council of European Municipalities and Regions (https://www.ccre.org)

Eurocities (https://eurocities.eu)

CPMR: Conference of Peripheral Maritime Regions (https://cpmr.org).

(5) Opinion of the Committee of the Regions: Recovery plan for Europe in response to the COVID-19 pandemic: Recovery and Resilience Facility and Technical Support Instrument (October 2020, COR-2020-03381).

Opinion of the Committee of the Regions: The European semester and cohesion policy: aligning structural reforms with long-term investments (April 2019, COR-2018-05504).

Opinion of the Committee of the Regions: Improving the governance of the European semester: a Code of Conduct for the involvement of local and regional authorities (COR-2016-05386).

(6) COM(2018) 703 final.

28.2.2022

Official Journal of the European Union

C 97/30

Opinion of the European Committee of the Regions — EU action plan for organic farming

(2022/C 97/07)

Rapporteur:

Uroš BREŽAN (SI/GREENS), Mayor of Tolmin

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

welcomes the EU action plan for organic farming and endorses its comprehensive approach structured along three strands, aiming to stimulate demand and production and to improve organic farming’s contribution to sustainability and environmental challenges;

believes that, thanks to its positive impact on the environment and climate in terms of improved carbon sequestration and soil health, biodiversity conservation and animal welfare, organic farming will contribute to meeting the European Green Deal’s objectives and the targets of the EU Farm to Fork and Biodiversity strategies;

among these targets, welcomes the ambitious EU-wide target set out in the Farm to Fork Strategy of 25 % of agricultural land under organic farming by 2030, the impact of which should be assessed by the Commission. Suggests setting binding national targets to take account of the diversity of agriculture in different European countries and their regions;

regrets that the CAP is not fully consistent with the objectives of the EU Action Plan for Organic Farming, the Green Deal and the EU’s Farm to Fork and biodiversity strategies and cannot sufficiently reward farmers who make an extra effort to implement the green transition on their farm, for example by using their land for organic farming;

is pleased that the eight categories of rural development measures proposed for the new 2023-2027 CAP include payments for environmental, climate and assorted other management commitments. Such measures are compulsory for the Member States which are required to earmark at least 30 % of EAFRD funding for measures designed to achieve climate and environmental objectives. This includes organic farming, which can therefore be funded through eco-schemes, through the agricultural, climate and environmental commitments of the second pillar or through both;

the challenge of 25 % of agricultural land under organic farming by 2030 must be in line with the reality of regional production and achieved through policy tools supporting the balanced development of both organic production and demand, appropriately implemented at EU, national, regional and local level;

considers that it is essential to focus, among other things, on stimulating supply while encouraging demand for organic products by increasing awareness of its benefits and consumer trust in the organic logo;

would welcome more concrete measures and support in the design of measures for organic farming in rural areas that intend to promote more equal access and more equal income between women and men in the sector and intend to encourage and attract young farmers;

regrets the lack of a dedicated and specific budget for each initiative, and calls for the various financial instruments available to implement the action plan at EU and national level, namely LEADER/CLLD, the EU promotion policy and Horizon Europe, to be used consistently for this purpose; also, calls for this action plan to be better financed by supplementary EU, national, regional and local funds;

10.

underlines the case of the outermost regions, which, due to their specific situation, have to cope with severe constraints when it comes to developing organic farming. They therefore need special treatment through specific measures accompanied by additional funding;

11.

is pleased that the European Commission intends to organise a yearly EU-wide ‘Organic Day’;

12.

approves the proposal to include monitoring and evaluation activities from the outset, to assess the implementation of the action plan, to step up collection of market data and to extend the EU Market Observatories’ analysis to include organic products;

13.

urges the Member States to adopt national organic action plans in order to address the specific challenges both at national and local level.. They should be the result of an open and democratic consultative process, with bottom-up approach, engaging all stakeholders, especially organic farmers and associations, local and regional authorities (LRAs), consumer representatives and the hospitality industry;

14.

is pleased that the organic action plan mentions for the first time the ‘true cost of food’ and that the Commission intends to dedicate a study to this issue, which is pivotal for supporting the transition to a fairer and sustainable food system. The study should help recognise the value of organic farming in generating public goods;

15.

stresses that pesticide residues are almost omnipresent in the environment and potentially affect organic products as well. Since organic farmers guarantee high environmental standards in production, they must not be burdened with risks for which they are not responsible. The CoR therefore points out that a zero tolerance approach to pesticide residues on organic products would greatly damage the sector.

16.

suggests that in order to tackle this issue, the European Commission should:

—

put forward initiatives aiming to simplify the authorisation of active substances and plant protection products suitable for organic farming, if they are known to be harmless to nature, the environment and humans; particular attention should be paid to production in the outermost regions, which for the most part differs in scale and characteristics from mainland agriculture;

—	promote further harmonisation of the handling of pesticide residue findings, by considering all the pros and cons of the different approaches taken by the Member States;

—	promote the study of and research into new treatments compatible with organic production;

17.

encourages the Member States to investigate how the ‘polluter pays’ principle can be implemented to allow organic farmers to receive compensation for loss of earnings resulting from adventitious contamination of their organic produce;

The role of local and regional authorities in the implementation and evaluation of the action plan

18.

points out that LRAs are best placed to know and address the actual needs of local organic sectors; thus, to achieve the objectives of the new organic action plan, they should be closely involved in both the implementation and the evaluation of its actions;

19.

points out that LRAs have a key role in helping to structure the organic sector in terms of production, logistics and trade, facilitating the creation of structured cooperation between producers and consumers, raising awareness at local level, informing consumers about the positive impact of organic farming, and developing educational programmes for preschools and schools;

20.

points out that LRAs have long been involved in supporting the development of organic farming, in particular through the management and implementation of regional rural development programmes;

21.

regrets the limited involvement of LRAs in the implementation of the previous action plan for organic farming, which failed to achieve its objectives as shown by the mid-term review carried out by the European Committee of the Regions;

22.

urges the European Commission to establish a platform for monitoring and evaluating the implementation of the action plan, bringing together all stakeholders, particularly representatives of LRAs;

23.

emphasises that, when involving LRAs, a place-sensitive approach is required in line with the precepts of the Territorial Agenda 2030, to address the different needs of rural, peri-urban and urban areas across Europe;

24.

recommends that LRAs ensure coordination and good governance among all administrative levels. Supporting cross-cutting actions at local level is key, as well as involving all local stakeholders connected to the organic sector;

25.

asks the Commission to place greater emphasis on conservation of water resources and calls for an exchange of experiences to encourage LRAs to implement these good practices;

Promoting consumption

26.

welcomes the recognition of Bio districts as successful tools for rural development and praises the Commission’s intention to support their development and implementation within the Member States;

27.

recommends that the Commission involve LRAs in the implementation of this initiative;

28.

points out that Bio districts are a great opportunity for LRAs to support the development of sustainable food systems, relying on collaboration between farmers, citizens/consumers, local public administrations, associations and commercial, tourist and cultural enterprises acting according to the principles and methods of organic production and consumption;

29.

stresses that the integrated and multifunctional approach of Bio districts also brings great benefits in terms of environmental, economic and social sustainability;

30.

calls therefore on LRAs to get involved in the creation of Bio districts, supporting the development of bottom-up initiatives which can contribute to developing rural areas and increasing consumption of local organic products;

31.

recommends that the European Commission adopt a common framework and guidelines at EU level to guarantee harmonised implementation of Bio districts at Member State level, taking care to preserve their integrated and multifunctional nature as well as their specific features, in order to assure successful take up;

32.

recommends that the European Commission set up a network of Bio districts at EU level, to provide support and common services to all Bio districts;

33.

recommends that LRAs boost local consumption of organic products with own, national and EU financial support for local markets and direct sales, as well as with information and communication campaigns on existing markets and operators registered for direct sales;

34.

highlights the nutritional and environmental benefits in consuming organic food and calls to address the question of accessibility to the consumption of organic products, both in terms of affordability and availability of organic products at points of sale that are easily reachable by consumers, in order to allow all consumers to purchase organic food;

35.

welcomes the increase in the EU promotion budget for organic products and calls on the Commission to maintain it over the following years;

36.

with regard to the current revision of the EU promotion policy, recommends that the Commission give priority to organic products produced in the EU, from agricultural raw material to processing;

37.

proposes tweaking the EU organic logo by adding the words ‘EU organic’ as well as the possibility of indicating the production region under the green leaf in order to increase consumer recognition;

38.

welcomes the proposal to consider options for animal welfare labelling in the framework of the Farm to Fork Strategy, and calls for progress on this issue as clear, standardised and mandatory labelling of the husbandry method could encourage consumers to buy organic products;

39.

is pleased that the Commission intends to promote organic canteens and to analyse the application and increase the use of green public procurement (GPP) criteria, and welcomes the objective of setting minimum mandatory criteria for sustainable food procurement to promote healthy and sustainable diets. The regulatory framework for public procurement may need to be revised to give authorities more scope to require and to increase the use of locally produced food; particular attention and support should be channelled to the development of short supply chains in outermost regions;

40.

suggests that schools and educational institutions to offer organic products for students, that would contribute to the healthy eating habits from an early years, therefore would facilitate the raising awareness on the importance of local, traditional and healthy food;

41.

stresses the role of LRAs in encouraging higher uptake of local and regional organic products in public food procurement, in contributing to collective information and education, and in raising consumer awareness and confidence in organic production. Through public procurement, LRAs can develop long-term partnerships with their local organic producers and encourage conventional farmers to convert to organic production;

42.

points out as well that LRAs are confronted with several barriers to supplying public canteens with local and regional organic products: logistic barriers, namely the lack of adapted premises; structural barriers, such as the need to structure the market and strengthen the supply chain to reconcile local supply and demand; and the lack of human and technical resources;

43.

notes that strong political commitment at national and regional level is needed to encourage the right uptake of organic food in public and private canteens, catering and restaurants;

44.

suggests that common criteria could be developed at EU level to serve at best practice in order to establish corresponding inspection rules for public canteens;

45.

notes that the increase in demand encourages the development of regional production and therefore calls for labelling of canteens and restaurants, both in the public and private sectors, indicating the minimum percentages of healthy, organic and locally produced food that is used in production processes;

46.

calls on the Member States and LRAs to check their public procurement and budgetary law to assure that the organic products used in public canteens are certified;

47.

recognises that LRAs still lack knowledge about the possibilities offered by GPP and encourage them to overcome the barrier of the price criterion and use sustainability criteria;

48.

suggests the development of an EU common platform for EU organic producers from Member States that would facilitate the share of good practices, understanding of EU regulations, trainings, events and project partnership possibilities to name a few;

49.

to this end, insists on the importance of providing an adequate training and capacity-building programme for both purchasing authorities (national, regional and local) and organic producers and processors, to address the structural and logistic barriers and promote the use of GPP criteria;

Stimulating the production side

50.

notes that in 2019 the EU had an organic land area of around 9 %, with only 64 % of the certified organic area receiving organic support payments (1);

51.

points out that organic farming is underfunded in the current CAP; whereas 8 % of total EU agricultural land is under organic farming, subsidies for organic farming represent only 1,5 % of the total of the European agricultural budget. Particular attention and support should be channelled to the development of small rural areas, less developed regions, where the main economic sector is represented by agricultural activities;

52.

stresses that in order to triple the EU organic land area by 2030, a three to five fold increase in CAP expenditure on organic farming is needed, meaning that up to 15 % of CAP spending should be dedicated to the organic sector (2);

53.

however, notes with regret that the deal reached on the next CAP lacks ambition regarding financial support for organic farming;

54.

is concerned to observe that, considering the EU-wide targets to be reached on organic agriculture, some of the available National CAP Strategic Plans’ drafts fall short of providing adequate subsidies for organic farmers compared to the previous programming period;

55.

recommends that Member States and LRAs give priority and adequate financial support to addressing the specific needs of the regional and local organic sector in their strategic plans;

56.

recommends that the Commission thoroughly evaluate the national strategic plans submitted by the Member States in order to monitor that they will contribute to achieve the target of 25 % of agricultural land devoted to organic farming by 2030;

57.

supports the approach of assessing, in the framework of the new CAP, the specific circumstances and needs of the Member States, and in particular the difficult production conditions in the outermost regions, relating to the growth of the organic sector and ensuring that Member States make the best use of the possibilities offered by the new CAP to support the national organic sector. The Commission should pay particular attention to supporting those Member States/regions lagging behind, while providing further guidance for those that have already contribute to attain the 25 % target. Every Member State should contribute to achieving the common target by 2030;

58.

recommends that the Member States and LRAs anchor organic farming more firmly in education and university agricultural departments and develop learning materials and training on organic farming, addressing the needs of primary production as well as processing and transformation;

59.

recommends that LRAs speed up the conversion rate to organic farming by providing support and advice for the set-up, conversion or transfer of farms opting for organic farming;

60.

stresses the importance of developing the organic agro-industry at regional and local level to consolidate the growth of primary production. The promotion of short food supply chains can benefit both organic farmers and consumers: it reduces transport costs and increases sustainability, while developing the rural economy, adding value in the production area;

61.

recommends therefore that the Member States and LRAs include specific measures for operators involved in processing and marketing organic food, in order to facilitate harmonious development of production and to create an enabling environment for short supply chains in all regions. Accordingly, it suggests:

—	encouraging small-scale agro-industries linked to the farm;

—	increasing mobile processing facilities for small farms (slaughterhouses, processing plants, mills, etc.) and encouraging shared use of processing facilities at local level, to overcome legal barriers created by health and safety and animal health standards;

—	encouraging the involvement of agro-cooperatives in the marketing and transformation of organic products, including participation in food public procurement;

62.

highlights the importance of economic organisation, efficient market regulation tools and financing of producer organisations to reach the 25 % target. For instance, producers should be given a minimum price which exceeds the average production price for organic farming, in order to provide them with a stable minimum income. In the event of a market imbalance where growth in demand fails to absorb the growth in supply, the Commission should be empowered to activate the special public intervention mechanism for organic products;

63.

notes that increasing unfair competition from non-EU organic products could weaken the sector and recommends that the European Commission guarantee fair, balanced and transparent trade; requiring reciprocity in the obligations and rules for organic production of products imported into the EU to ensure equal treatment and effective protection of European consumers. For the same reasons, the aforementioned should also apply to aquaculture in order to extend environmental protection and sustainable management of oceans and seas to non-EU countries;

64.

recommends the European Commission to support the launch of a common EU platform that would facilitate the import-export possibilities of local, organic farmers, by developing services for EU digital/e-sales and offering support for logistics and successful partnerships in this area;

65.

recommends that the Member States introduce a bonus-malus system as part of the eco-schemes of the new CAP, as set out in its previous opinion on Agroecology;

66.

notes that the new EU Organic Regulation will apply from 1 January 2022 and bring major changes to certain sectors of organic production. To ensure successful implementation, a balance between harmonisation at EU level and adaptation at regional level is crucial, without derogating from the organic principles;

67.

as a result, calls on the Commission to monitor the impact of the new regulation, in order to respond effectively to any difficulties caused by the application of the new rules;

68.

recognises the high interest and potential of organic conversion in the livestock sector;

69.

welcomes the Commission’s intention of reinforcing organic aquaculture. The sector is faced with fierce competition from non-EU countries, since the EU imports almost 80 % of fish consumed in the internal market (3);

70.

thus, recommends that the Commission ensure adequate support and increase R&I funding for the EU organic agriculture, aquaculture and livestock sectors, in order to cope with the lack of proper inputs, namely certified organic seeds, organic protein and Vitamin B feed, and reduce dependency on imports;

71.

welcomes the Commission’s proposal to increase R&I funding dedicated to organic farming under Horizon Europe and stresses in particular the importance of dedicating separate calls and budgets for organic production.

Brussels, 2 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) IFOAM Organics Europe.

(2) Ibid.

(3) Copa-Cogeca views on An action plan or the development of organic production.

28.2.2022

Official Journal of the European Union

C 97/36

Opinion of the European Committee of the Regions — Sustainable blue economy and aquaculture

(2022/C 97/08)

Rapporteur:

Bronius MARKAUSKAS (LT/EA), Mayor of Klaipėda District Municipality

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

General comments

Sustainable blue economy

welcomes the European Commission’s Communication on a new approach to a sustainable blue economy in the EU — Transforming the EU’s Blue Economy for a Sustainable Future, which presents the Commission’s overall vision and sets out a strategy for a sustainable blue economy of maritime sectors and industries. Welcomes, in this connection, the shift from the concept of ‘blue growth’ to ‘blue economy’;

agrees that the objectives of the Green Deal and the transition to a more sustainable, green economy cannot be achieved without the blue economy. Achieving the objectives of the Green Deal and sustainable development in all sectors requires radical changes to reduce the impact of human activity on seas and oceans and to protect resources and biodiversity. These changes also need to be made compatible with the economic and social sustainability of maritime activities;

maintains, therefore, that green and blue policies should be more connected. Oceans are one of the principal reservoirs of biodiversity in the world. They make up more than 90 % of the planet’s inhabitable space and absorb around 26 % of anthropogenic carbon dioxide as well as over 90 % of the excess heat emitted into the atmosphere each year. Numerous studies demonstrate the key role played by marine biodiversity in the health of the planet and social wellbeing;

stresses that vibrant oceans are a prerequisite for a thriving blue economy, and that this blue economy must function within ecological boundaries, according to the concept of planetary boundaries. Sustainable management of oceans and seas should therefore be a key priority, based on knowledge, awareness raising and cross-border cooperation, in order to achieve the objectives of the EU strategic agenda. The exchange of up-to-date data and the pursuit of common objectives are also important in this connection;

notes that the blue economy has a significant social and economic impact, not only on coastal and maritime regions, but also on the European Union as a whole, and can ensure a green and inclusive recovery from the COVID-19 pandemic, especially in the most affected sectors, such as tourism and fisheries. In many countries, the blue economy has a huge positive impact on GDP;

notes that ocean energy can play an important role in enhancing the reliability and security of our energy supply. As long as it is compatible with existing activities and respectful of marine habitats, use of ocean energy would reduce countries’ dependence on fossil fuels, contribute to climate change mitigation and promote the creation of new quality jobs, especially in European coastal regions, where unemployment is often high;

highlights the contribution of maritime industries to the energy transition and fighting climate change, particularly through the renewable energy sector, decarbonisation of maritime transport and the circular economy, including recycling plastic from oceans;

recalls, in particular, that maritime transport emissions have increased by almost 32 % over the last 20 years. The development of a sustainable shipbuilding industry could make a significant contribution to achieving the EU’s climate objectives. Supports, in this regard, the European Commission’s objectives of potentially reducing SO2 and NOx emissions from international shipping by up to 80 % and 20 % respectively within 10 years. However, it is essential to bear in mind the needs of the outermost regions, as they require measures that are tailored to their specific structural set-up, due to their remote location and considerable reliance on air and maritime transport, to ensure their connectivity and supplies;

emphasises that in order to safeguard and create long-lasting, good-quality jobs, particularly in the ship-building sector, Europe must be protected from unfair competition which is destroying its industry;

10.

encourages a cross-cutting approach to maritime industries that integrates all maritime activities — both traditional and new, civilian and military — and takes into consideration the critical cross-cutting challenges of the ecological and digital transitions and Industry 4.0;

11.

welcomes the European Commission’s intention to set up a blue forum to pool knowledge and experience, create synergies, find creative solutions and promote the development of the sector, in addition to its intention to put together proposals to coordinate the use of funds in this area;

12.

notes that national governments lack a constructive approach to developing the maritime economy. In most coastal states, support for this economy only exists on paper, and national smart specialisation plans and strategies do not pay sufficient attention to the maritime economy, the financial support available is insufficient, and the rules and criteria for awarding it are too complex;

Aquaculture

13.

notes that aquaculture has recently become an important area of the blue economy. It is a sector with significant potential, both for the economy and for environmental protection. It also has the potential to create jobs, to offer new opportunities for economic development to people in coastal and rural areas, and that some aquaculture practices such as mussel farms help to mitigate the effects of climate change and protect ecosystems with the use of low impact practices;

14.

welcomes the Commission’s Communication on Strategic guidelines for the sustainable development of EU aquaculture, and stresses the important contribution of aquaculture to meeting the challenge of providing high-quality food and ensuring the supply of marine and freshwater products to a growing market as long as that does not impact negatively on wild fish stocks and that promotes the implementation of the European Green Deal and the Farm to Fork Strategy and the development of a sustainable blue economy;

15.

welcomes the presentation of the strategy on animal welfare, in particular on the definition of verifiable indicators, the provision of training for producers, research into species-specific animal welfare parameters and diversification away from monocultures; stresses that it is now up to the Member States to update their national plans in line with the new guidelines;

16.

stresses the importance of the specific objectives for aquaculture set out in the Farm to Fork Strategy, in particular with regard to reducing sales of antimicrobials and significantly increasing organic aquaculture; welcomes the Commission’s intention to take measures to reduce the total sales of antimicrobials for farmed animals and aquaculture by 50 % by 2030;

17.

notes that EU strategies and other legal documents contain guidelines and recommendations on developing the sector, but points out that local and regional authorities that do not have exclusive competences in the sector do not have more detailed analysis on how aquaculture is to be developed, based on practical knowledge, more accurate data and specific measures;

18.

stresses that sustainable development is the main prerequisite for developing aquaculture; therefore calls for a clear definition of the term ‘sustainable aquaculture’, taking into account environmental, social and economic criteria. A long-term strategic approach to the sustainable growth of EU aquaculture would contribute to the recovery of the sector following the COVID-19 crisis and ensure long-term sustainability and resilience;

19.

reiterates that aquaculture should be recognised as a specific policy area, with sufficient funding so that it provides a complement to traditional fisheries; notes that the European Maritime, Fisheries and Aquaculture Fund has for many years provided for the promotion of sustainable aquaculture activities and the processing and marketing of aquaculture products; also believes that organic aquaculture should be promoted by supporting local markets for European aquaculture products and by reducing the administrative burden that is hampering the efficient development of the sector. General guidelines should also be established for streamlined access to space, particularly coastal space, so that it can be developed. These guidelines should be compatible with other policies such as those relating to the environment;

20.

welcomes the Commission’s call for the EU Member States to include the increase in organic aquaculture production in their national strategic plans for aquaculture and to earmark a portion of the resources of the European Maritime Fisheries and Aquaculture Fund for this purpose;

21.

reiterates the need to accelerate the transition to sustainable fish farming, alongside changes in agriculture, as fisheries and aquaculture are important elements of sustainable food systems; also supports the objective of promoting ecofriendly fishing restoring fish populations and protecting marine ecosystems by boosting environmentally sustainable and affordable, and socially sustainable and competitive fishing activities;

22.

calls for objectives which are legally binding at EU level with a view to restoring and preserving marine biodiversity and putting right damaged ecosystems; local and regional authorities can help with identifying and designating new marine protected areas, together with the Member States, the Commission and the European Environment Agency;

Financial support and investment

23.

points out that sustainable investment is crucial for the successful development of the blue economy. It is important to create a favourable environment that facilitates and stimulates public and private investment in the development of the blue economy. It is necessary to finance innovation — digital and otherwise — and the development of new products, invest in innovative technologies and smart solutions, and support new technologies, such as renewable ocean energy, maritime industries or blue economy bioenterprises so that they can develop within planetary boundaries;

24.

urges the European Commission, with regard to sustainable investment in the maritime sector and in particular maritime industries, to make greater use of regions, their smart specialisation strategies and their economic ecosystems to form Europe-wide cooperation networks capable of competing with international players. These networks, under the European Sea Tech label, should be able to respond to European Commission calls for proposals to develop and finance the first phases of their high-risk projects;

25.

refers to the call already made in its previous opinion on blue growth that 10 % of projects under the Framework Programme for Research and Innovation should make a significant contribution to marine and maritime research objectives;

26.

points out that in the Communication on a new approach to a sustainable blue economy in the EU, the Commission starts from the principle that the European Green Deal commits to paying particular attention to the role of the EU’s outermost regions; calls on the Commission to implement this commitment by drawing up a specific action plan with the funding envisaged;

27.

regrets that the blue economy’s potential, including its potential major contribution to achieving the objectives of the Green Deal, has not been sufficiently taken into account in the review of the recovery plans financed by NextGenerationEU, such as direct European funding for structural projects and risky projects, and the establishment of regional investment platforms;

28.

believes that the concept of sustainable investment must be understood as requiring joint efforts, from both industry and national governments, with regard to technological progress and scientific research, in order to invest in projects that combine social, economic and environmental benefits. Cooperation between academia and industry is of particular importance in this area;

29.

welcomes the Commission’s plans to step up cooperation with European financial institutions in order to promote public and private investment, and draws attention to the importance of the BlueInvest platform and the resources earmarked for the EU funds and the specific programmes of the EU budget for developing the sector, and proposes assessing whether a single fund or single tool for coordinated access to funds can be created;

30.

welcomes the Commission’s call for the Member States to include investment in a sustainable blue economy in their national resilience and recovery plans and in the national operational programmes of the various EU funds;

31.

considers it particularly important to promote the use of innovative financial tools when developing sustainable aquaculture, to support investment in advanced technologies, to create favourable conditions for private sector involvement and to allocate funds for research and technological development in order to promote diversification and innovation in sustainable aquaculture;

32.

calls for a review of the rules on awarding EU funding, and believes that the main criteria for awarding support should be innovation, value creation and most importantly implementing sustainable solutions;

33.

deems it necessary to explore the possibility of classifying low-impact aquaculture as ecological, including in recirculation systems, and to provide financial support for its further development, if the relevant criteria for energy and resource consumption, animal welfare and sustainable waste recycling are met. It is currently difficult for aquaculture to benefit from EU funds, despite the fact that it has been shown in practice that the innovative technologies used make it possible to meet the highest environmental requirements in the relevant technical processes (e.g. the waste generated, such as sludge, can be used in agriculture, waste water is cleaned to the highest standards and reused, etc.);

34.

points out that financing issues are particularly important for small countries with less investment, lower GDP and more limited opportunities for innovation, and notes that it would be appropriate to assess the needs of small countries and to adopt special support schemes;

Role of local and regional authorities

35.

stresses the important role of local and regional authorities in the transition to a green economy. Regional governments could make a significant contribution to achieving the objectives of the Green Deal by participating actively in decision-making and effectively managing cohesion and environmental innovation funds;

36.

deplores the fact that, in most countries, regional governments are not involved in developing and implementing national policies and that a centralised approach predominates whereby the highest level determines needs and takes decisions without consulting regions on the development of the maritime economy; therefore calls on the European Commission and national governments to treat local and regional authorities as equal partners at a central level when implementing further measures in this area;

37.

reiterates its call for the European Commission to submit to the Member States a proposal for rules on how local and regional authorities should be involved in identifying, developing, planning and managing policies, and to provide them with greater, more clearly defined powers. Greater involvement of local authorities would ensure better development of a sustainable blue economy by developing dynamic and sustainable blue economy ecosystems, promoting innovation, applying smart solutions and creating jobs;

38.

welcomes the European Commission’s intention to support coastal cities and regions in managing the green and digital transformation at local level and in making full use of the funds and incentives provided by the EU by developing a recovery support package (a ‘blueprint for local green deals’) and strategic guidelines (e.g. the Intelligent Cities Challenge);

39.

proposes the development of a legal and budgetary framework that can act as an incentive for the drafting and development of regional and local blue economy strategies that take into consideration the variety of activities in this field with compatibility between them being the starting principle, especially compatibility with existing activities. In particular, the importance of technological developments linked to the maritime industries and energy production must be conveyed along with the importance of producing quality marine protein as a global competition factor;

40.

stresses that local and regional authorities have an important role to play in developing European aquaculture. In the field of fisheries, local and regional authorities are often responsible for the authorisation procedure and for managing and providing support to small and medium-sized enterprises operating on their territory, thus building up extensive experience in these areas. This proximity to the sector provides experience that must be recognised, coordinated and put to good use;

41.

believes that local authorities should be more involved in developing aquaculture policy and reiterates that regions need clear guidelines for the sustainable development of EU aquaculture as well as a detailed action plan;

42.

regrets that the Interreg budget for territorial cooperation has been reduced, as it could have boosted cooperation between coastal regions and islands with common needs within the same sea basin in order to develop adaptation strategies and common approaches to coastal zone management, invest in sustainable coastal defences and adapt coastal economic activities. Considers however that although the budget has been reduced, the policies have also been made more effective through pilot schemes and investments and by coordinating with programmes under direct management, enabling the sector to tap fresh ideas;

43.

therefore, where possible and in line with the wishes of local and regional authorities, calls for sea basin strategies to be made standard practice as they provide essential frames of reference. These strategies must be taken into account when devising smart specialisation strategies and in EU fund programming;

44.

considers that it is vital to keep working towards the objective of zero-emission ports, as set out in the European Commission’s sustainable and smart mobility strategy, and proposes that ports be fully recognised as platforms for the blue economy and levers for the development of the maritime industry;

Maritime spatial planning and importance of ports

45.

notes that the development of a sustainable blue economy, including aquaculture, fishing and shellfishing, is only possible if the necessary areas are available and businesses have access to waters. Access to areas where economic activities are possible and access to waters remain a major challenge when it comes to developing European aquaculture. It is therefore of the utmost importance to ensure adequate maritime spatial planning through coordination and by involving relevant stakeholders as early as possible;

46.

reiterates the call for proposals to be drawn up aimed at establishing maritime spatial planning and the establishment of marine protected areas and ecological corridors in line with the objectives of the Biodiversity Strategy, making it possible to reverse biodiversity loss and help mitigate climate change and build resilience thereto, while bringing considerable financial and social benefits, with the aim of achieving a balance between exploiting fish stocks and the sea’s capacity to replenish those stocks;

47.

calls for legally binding EU targets to restore and preserve marine biodiversity and ecosystems; local and regional authorities can help in the identification and designation of additional marine protected areas;

48.

points to the important role of ports, especially in remote regions, such as the outermost regions, in developing and promoting the blue economy, managing the circular economy and implementing green solutions that help achieve the objectives of the Green Deal;

49.

considers, for instance, that during the green transition, no time must be lost in stepping up support for investment in ports for LNG refuelling for ships and, more broadly, for infrastructure helping to reduce ships’ carbon footprint (power connections at quayside based on low-emission technologies);

50.

lastly, calls for the EU’s energy policy and the hydrogen corridors currently being rolled out to do more to support and integrate the development of green hydrogen generation in ports;

51.

recalls the importance of the role that ports could play (given the diversity of their maritime activities) in promoting the blue economy, and in developing strategies in this area;

52.

considers that ports, as important links in transport chains and economic cycles between countries, should henceforth become energy centres, using at the same time renewable energy sources and low-CO2 systems, thus contributing to the development of the circular economy and improving the living conditions of people living in port areas. It is therefore necessary to further develop the infrastructure of seaports and to open up new areas suitable for cargo activities and potentially novel maritime activities (e.g. offshore wind turbines, sustainable aquaculture);

Reducing administrative burden and improving competitiveness

53.

regrets that the effective development of aquaculture and other maritime activities is being hampered by a number of internal problems, such as excessively lengthy and complicated authorisation procedures and limited access to waters and areas where economic activities are possible. The complexity of authorisation procedures and the lack of transparency constitute obstacles to the full development of European aquaculture, and therefore the applicable regulations should be simplified and clarified, ensuring consistency between them;

54.

proposes that a one-stop shop for aquaculture licences be set up as soon as possible in order to speed up the authorisation process and facilitate communication between stakeholders and different authorities at various levels; also recommends introducing training modules on permit granting for local authorities, in order to speed up the application of EU rules;

55.

notes that, in order to strengthen the competitiveness and sustainability of aquaculture, it is essential to comply with animal welfare, health and climate protection standards and to provide consumers with sufficient, accurate information on these standards on labels;

56.

points out that it has already proposed a European eco-label in previous opinions; reiterates this proposal and stresses once again that an eco-label and an efficient certification system would play an important role in increasing the value and consumption of EU aquaculture products; clear, mandatory labelling of the husbandry method, catching method and working conditions would enable producers to obtain recognition of improvements in their practices and consumers to make informed decision; stresses that the criteria for such an eco-label should be higher than current legal requirements. This label could be extended to fishing carried out in compliance with conservation and management regulations, indicating that products have been obtained through legal activities and in a way that respects marine life and resource sustainability;

57.

calls for the future carbon border adjustment mechanism also to cover fisheries and aquaculture products in order to provide a level playing field for the different products sold on the internal market, without prejudice to any specific derogation measures for the outermost regions, based on Article 349 of the TFEU. Calls on the European Commission to propose legislation to prevent imports of products associated with human right violations and to put in place more effective rules to ensure that fish enter the EU market meet standards equivalent to those in place in the EU. This provision aims to safeguard European consumers and to extend measures protecting the environment and ensuring the sustainable management of seas and oceans to third countries. At EU and national level, support must be given to local producers and short supply chains as a matter of priority. This is the only way to ensure the efficient development of aquaculture, fishing and shellfishing (especially small-scale coastal fishing) in the future;

58.

recommends diversifying aquaculture, with a particular focus on algae farming, whose products do not need to be solely intended for human and animal consumption, but can also be used for certain industrial production processes or energy production and contribute to developing sustainable activities, as no feed is needed and no waste is generated. Also recommends exploiting integrated aquaculture systems that can help establish circular economy models within the industry;

Cooperation, skills development, information and public participation

59.

reiterates the importance of involving all aquaculture, fishing and shellfishing stakeholders in order to create a sustainable blue economy. Cooperation between academia, public authorities and industry is particularly important: scientific knowledge and effective, targeted and long-term innovation in the economy improve the effectiveness of work and ensure economic development and competitiveness;

60.

points out the need to strengthen the powers of the authorities operating in the Member States and to address the shortage of professionals in the maritime and aquaculture sectors. The European Union, the Member States and the regions must therefore work together to increase familiarity with and the appeal of maritime occupations, improve working and career conditions, develop European mobility for young people in training, and offer complementary lifelong training paths to convert existing occupations to the maritime environment and encourage traditional maritime occupations to take up new opportunities. In particular, in terms of training, it will be necessary to promote tailored training for the maritime and fishing industries so as to support generational renewal in fishing, aquaculture and shell fishing;;

61.

notes the absence of public involvement in developing the blue economy. Sustainable long-term investment should promote the implementation of multidisciplinary measures to protect marine biodiversity and provide citizens with new opportunities to generate an income. It is also important to involve the public in policy implementation and decision-making by establishing local action groups and various other initiatives;

62.

commits itself to promoting and supporting local participatory initiatives (such as local development groups set up by local communities, local fisheries action groups, etc.) which combine regenerating marine resources with preserving local livelihoods and the traditions and cultural heritage of the area concerned. It also commits itself to promoting and supporting the diversification and complementarity of the marine economy. This should give a boost and recognition to the example of local fisheries action groups, which have integrated the maritime fishing sector with society and local and regional authorities in driving the blue economy in their territories;

63.

considers that more effort should be devoted to information campaigns at regional, national and European level, firstly in order to improve consumer understanding of aquaculture, fishing and shellfishing products, their benefits and their contribution to security of supply, food security and job creation, as well as of the long-term environmental benefits of aquaculture, fishing and shellfishing, and, secondly, in order to help provide information on scientific knowledge on the compatibility of aquaculture with the marine environment and its preservation.

Brussels, 2 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

28.2.2022

Official Journal of the European Union

C 97/43

Opinion of the European Committee of the Regions — Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery

(2022/C 97/09)

Rapporteur:	Jeannette BALJEU (NL/Renew Europe), Member of the Council of the Province of Zuid-Holland
Reference document:	COM(2021) 350 final

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

Introduction

welcomes, from a general perspective, the update of the Industrial Strategy proposed by the European Commission; recommends, however, that the Commission link it more closely to the European Green Deal and its 2050 climate-neutrality objective by setting concrete short-, medium- and long-term objectives that EU industry should achieve in order to contribute to this overall objective; notes that some points need to be further clarified from the point of view of local and regional governments and therefore addressed in this opinion;

welcomes the focus on industrial ecosystems and technology leadership and underlines the importance of reinforcing the place-based dimension: European industrial ecosystems are composed of interlinked regional innovation ecosystems, with dynamic smart specialisation strategies, which are based on a bottom-up approach and aim to boost regional innovation, contribute to growth and prosperity by helping and enabling regions to focus on their strengths. Smart Specialisation Platforms and partnerships already facilitate place-based cooperation between these regional innovation systems. They will be the driver of sustainable growth and recovery in Europe through new and reinforced strategic value chain cooperation. It will help Europe gain strategic autonomy and regions and cities can finally take ownership in the green and digital transition of their industries;

welcomes in this respect the Industrial Forum in particular, in which the Committee of the Regions actively contributes;

stresses the need for an inclusive industrial strategy that creates value across European regions and takes into account the unique characteristics of all areas, such as the outermost regions; the EU needs an industrial innovation pipeline for the whole EU. Furthermore, the industrial strategy should be adapted to the current needs of Member States, based on local and regional development needs. To this end, efforts should be made to achieve greater security of supply, resilience and independence by diversifying supply chains;

recognises growing concerns about the uneven recovery from the pandemic in various European regions. The EU must reinforce its efforts to close this gap by supporting businesses, including those from rural and less developed areas, digitalising industry and making it more sustainable, and introducing a regulatory framework fit for the digital and sustainable age, implementing not only industrial but also territorial ecosystem-based approaches that take into account the EU’s territorial diversity;

stresses that industry will face challenges in implementing the objectives of the Fit for 55 package and that local and regional authorities should be involved in discussions on how to ensure that infrastructure proposals for renewable transport, autonomous driving and possible retraining measures are successfully implemented;

stresses the need to strengthen the regional ecosystem approach, so as to effectively involve key actors at local and regional level, such as governments, clusters and cluster organisations, and the social partners, as well as knowledge institutions (including universities of applied science with a strong link to SMEs). This is key to improving the industrial competitiveness for many industries and to fostering open innovation. Moreover, the CoR would like to call for extra attention to be paid to bilateral cluster-to-cluster collaboration, the setup of new forms of public-private partnerships to deepen the cooperation between the public and private sector and the development of social economy clusters;

welcomes the monitoring of the industrial trends and competitiveness that has been announced, as Europe needs to analyse and address strategic technological and industrial dependencies together;

stresses the need to obtain better metrics on innovation, as those are now centred around R&D investments (and input) and patents (a partial indication of uptake of innovations). A clear view on the renewal of the economy and the relevant data is missing. A first step would be to monitor the type of R&I investments made. The focus should especially be on those linked to technology capabilities, technology infrastructures and on competitiveness with regard to the twin transition towards the markets of the future;

Strengthening Single Market resilience

10.

supports the pursuit of a well-functioning Single Market and continuous efforts to address restrictions and barriers. Special attention should be paid to the circumstances of cross-border regions and the specific requirements of these regions, particularly in the provision of cross-border services and the free movement of workers;

11.

welcomes the intention of the Commission to publish yearly Strategic Reports and action plans regarding the Single Market; underlines the importance of bringing to light the dependencies in the value chains, before measures and restrictions to protect the Single Market are put in place;

12.

the Single Market Enforcement Task Force (SMET) can be of relevance as the central ‘pathway’ to strategic autonomy. However, the CoR would also like to stress that a successful industrial strategy should also reflect the diversity of regional ecosystems and the fact that pathways to strategic autonomy will develop differently in different ecosystems;

13.

a well-functioning internal market is crucial for the recovery after the COVID-19 crisis. It is of utmost importance to prevent export restrictions by individual Member States and to prevent renewed border closures within the EU, as was the case at the beginning of the coronavirus outbreak. The EU industrial sector is subject to requirements under EU regulation while at the same time having to face competitors from third countries where business regulation is different in some respects. . Stresses the importance of establishing reciprocal industry requirements in trade agreements with third countries, so that European industry has a level playing field on the international market. Completion of the internal market, including for services, is becoming even more urgent;

14.

stresses that the Single Market should also diversify in terms of partners, products and services, so that the EU will be able to provide the services and products its inhabitants cannot live without. This will also increase its resilience; in this domain, the coronavirus crisis has shown that, particularly in the field of medical products, increased production in Europe, and concomitant independence from foreign markets, is extremely important;

15.

believes that carefully designed state aid rules at national, regional and local level are required, stresses the importance of fair competition within the EU, and in order to prevent state aided relocation of businesses within the EU; the CoR is of the opinion that IPCEIs can be a great vehicle for value chains where the market alone cannot deliver breakthrough innovation. IPCEIs will further support the setting up of new agile forms of public-private partnerships. In this regard, the CoR highlights the importance of participation by Member States, SMEs and local and regional authorities (LRAs);

16.

considers that the exploration of the merits of a legislative proposal for regulating key business services supported by harmonised standards is of great importance, as the dual transition also entails new business models and a shift from owned products to services delivered;

17.

is interested in the proposal of a regulation to address the distortive effects of foreign subsidies which makes sure that distortive subsidies granted by third country governments to companies wishing to acquire an EU business or bid in public procurement will be checked and properly addressed;

18.

highlights the importance of looking into ways to address distortive effects on clusters caused by acquisitions, by state-backed investors, of innovative companies (not listed on the stock exchange) essential for those clusters;

19.

encourages the European Commission to make use of the principle of reciprocity in trade agreements. Companies from non GPA countries will not be allowed to partake in European government procurements;

20.

affirms the need for and benefits of trans-regional collaboration around these clusters;

21.

underlines that LRAs are important in establishing large-scale industrial collaboration between clusters aimed at strengthening European value chains;

22.

stresses the role that is envisaged for LRAs in the governance and enforcement of the Single Market in general, since their contribution is key to effectively implementing the Single Market rules;

23.

speaks out against unfair competition between European clusters through the means of state-aid given by member states or LRAs. And urges to minimise the differences in the amounts of state aid local and regional authorities can give by creating a level playing field within the Regional Aid Guidelines;

24.

welcomes the view of standards as one of the central tools for the implementation of the strategy, but underlines that all stakeholders should be involved in the consultation to create these tools;

25.

stresses the importance of fair competition within the EU, and in order to prevent state aided relocation of businesses within the EU. In particular, fair competition requires that companies only be allowed to market their products across the whole European market if they comply with the applicable environmental and safety standards;

Strengthening the SME Dimension in the Industrial Strategy

26.

welcomes the Annual Report of the Commission on European SMEs 2020/2021 and agrees that the lack of required skills and access to finance are the main barriers for SMEs to digitalise their activities;

27.

welcomes the recognition of the role of Europe’s SMEs as well as the intention of the Commission to help them scale up and attract a qualified workforce. This, in turn, requires a business-friendly environment and necessary investments in workers’ skills and training (e.g. internal ICT and/or managerial knowledge), as well as decent working conditions. The CoR calls for support to be provided to SMEs to help them devise a digital strategy or action plan, by using financial instruments from InvestEU and concerning solvency risks affecting SMEs;

28.

observes that the digitisation of SMEs can differ greatly within and across Member States, and on a local and regional basis. In order to close this digital divide, the support to SMEs needs to be adaptable, well-designed and targeted to their specific needs, based on local and regional sustainable development, and with specific support to those from rural and less developed areas;

29.

stresses the need for investment in testing and validation infrastructures such as Industry 4.0 test centres, pilot factories and Digital Innovation Hubs (DIHs). This can help companies and especially SMEs to turn innovations more quickly into market-ready products;

30.

suggests increasing collaboration between the European Committee of the Regions and the European Commission, particularly with the network of European Entrepreneurial Regions in supporting entrepreneurship and the industrial transition at local and regional level. Another area of focus could be on better regulation and better EU policy implementation, as part of the Fit4Future platform. The aim would be improving the business friendly environment, while preparing companies for future challenges;

31.

welcomes the putting in place of Sustainability Advisors to provide dedicated advice to SMEs;

32.

welcomes the exploration of the merits of a legislative proposal for regulating key business services supported by harmonised standards. In particular, the CoR is looking forward to the services standard that has been announced and emphasises that these could help overcome difficulties in providing cross-border services. LRAs are affected by insufficient notifications (as mentioned in the annual Single Market report that accompanies the communication) and by the legal uncertainty as result of the ECJ 2018 ruling on zonal planning;

33.

regrets that the target of 3 % of GDP investments in R&D&I is still far from being met. While some Member States achieve that level, others are below 1 %. These differences are hampering the EU’s global capacity as a bloc, keeping it behind the USA, Japan and China;

34.

sees in the future implementation of the European Research Area an opportunity to create more synergies across all levels of government to support the industrial transition through increased research investment and place-based innovation policies;

35.

The twin transitions require industry and its workforce to adapt and change to a new reality; therefore asks the Commission to include in its European skills agenda a place-based approach for sectors affected by these transitions; this includes design of incentives to stimulate augmentation of the productivity of the workforce with the use of supporting technology (like AR/VR), and to include upskilling the workforce of industries strongly affected by technological changes, such as the car industry;

Adding a territorial dimension to the industrial ecosystems

36.

welcomes the tailored assessment of the needs of the 14 European industrial ecosystems pointing out investment gaps and options for policy support, as well as the case study on the steel sector’s decarbonisation challenge (1); suggests supplementing this assessment with an evaluation of labour market developments and the corresponding skills requirements;

37.

reiterates its call to reinforce the place-based dimension in the Updated Industrial Strategy in order for regions and cities, as the governments closest to citizens and ecosystems, to take ownership of the twin green and digital transitions of their industry, with due regard to the ongoing training and upskilling that workers will need, given the possible risk of exclusion as a result of the transition (2). Especially in the recovery phase, a place-based industrial policy is crucial as industry and regional development are closely linked;

38.

reiterates that regional and local authorities have important competences in policy areas that have an impact on industrial development. LRAs can mobilise a wide range of instruments to enable the implementation of a holistic and ambitious EU industrial policy strategy, aimed at ensuring economic resilience at a time of structural change; requests that the Commission includes the local and regional level in the future designing of the new EU Industrial Strategy (3);

39.

underlines the need for a strong social pillar in industrial change in order to adequately address the social consequences of structural change and enable regions that have been particularly badly affected by the pandemic to recover in economic and social terms;

40.

underlines that the regional dimension can best be reinforced by using the regional smart specialisation strategies as a blueprint for interregional cooperation; welcomes the idea of further developing the concept of smart specialisation by adding the United Nations’ Sustainable Development Goals (SDGs) as a fourth element (S4);

41.

sees great potential in interregional cooperation and its new I3 Instrument, including for linking the regions facing the greatest challenges in terms of the twin transitions with other regions, in order to contribute to interregional value chains and cohesion. Increased use of this instrument, as well as possible additional instruments, can support interregional collaboration to strengthen European value chains. European networks, such as the Vanguard Initiative, can support this process. The CoR believes that it is of great importance to refer to Smart Specialisation Strategies as the framework and tool for industrial modernisation and the concept of open innovation. The CoR stresses that there is a need to align the RIS3 with the development of transition pathways, as the S3-strategies are also aimed at supporting the acceleration of the twin transitions;

42.

underlines the importance of coordinating the multitude of new EU initiatives from different Commission services to support the industrial transformation. The goals that are set in the Fit for 55-strategy to become more sustainable are ambitious and need to be supported by industry through concrete steps to secure climate neutrality by 2050. The CoR proposes carrying out a strategic dialogue led by the European Commission on linking the industrial ecosystems with the regional innovation ecosystems. The aim would be to promote multi-level governance and to provide better coordination. Integration of the various initiatives at EU level across all levels of government would be key.

Dealing with dependencies: open strategic autonomy in practice

43.

welcomes the efforts from the European Commission to further analyse the EU’s strategic dependencies and capacities with an in-depth review of a number of technological and industrial strategic areas; welcomes the efforts to identify measures to reinforce the EU position in global value chains; notes that ‘natural ecosystems’ span sectors, especially on a regional scale, and are part of a network. There are European ‘pipelines’ as well in the form of interregional production and value chains, which need support from the European Commission;

44.

welcomes the extra attention paid to strategic autonomy but stresses that, as stipulated in the Spain-Netherlands non-paper, strategic autonomy does not imply isolationism or economic protectionism. It does imply greater resilience and interdependence through rational and tailor- made actions related to asymmetric dependencies. The CoR stresses that in some strategic value chains Europe needs to step up its efforts to open up and facilitate import flows;

45.

supports the revision of strategic dependencies, especially those particularly impacting SMEs. Moreover, it supports the reinforced actions to assist SMEs to address disruptions and vulnerabilities, or diversify by connecting them to new local and cross-border partners;

46.

is enthusiastic about the development of a guide/tool identifying strategic dependencies and addressing them through public procurement;

Accelerating the twin transitions

47.

stresses the importance of new business models that help to speed up the twin transition and therefore the importance of concepts such as SOLVIT; helping business with pragmatic solutions to trade across borders and with easier access to finance;

48.

urges the European Commission to come up with a mechanism for assessment and prevention of takeovers of companies in sectors with a vital or strategic role of importance in the European economy, with a particular focus on smaller, often unlisted, companies that are essential for regional innovation and entrepreneurship ecosystems;

49.

calls for continued support by regions and cities of industrial alliances in strategic areas, which should include start-ups and SMEs and a proposed launch of new industrial alliances. These alliances would be in the fields of space launchers, zero emission planes, cloud technology and processors and semiconductors. The CoR points out that two factors lead to the success of the alliances: 1) the governance and the need for commitment of all stakeholders, and especially 2) national, regional and local governments to make the alliances work;

50.

welcomes the fact that the Commission, together with industry, the authorities, the social partners and other stakeholders, have created transition paths, starting with tourism and energy-intensive industries, in order to obtain a better understanding of the scope and costs of, and conditions for, the measures needed to accompany the twin transition for the main ecosystems, leading to an action plan for sustainable competitiveness;

51.

underlines again the importance of the transition to a circular economy for a sustainable and competitive industry. Not only is circularity essential to reach climate goals and the SDGs, it also helps industry to compete globally and could be an important element of strategic autonomy. Through circular and frugal use of scarce (and strategic) raw materials and products, asymmetric dependencies can be limited and autonomy strengthened (4). As circular economy is an impetus for geographically shorter supply chains and impacts almost every type of cluster and industry, the place-based and regional dimension of industrial ecosystems is an essential element of a successful industrial strategy aimed at strategic autonomy. As many SMEs, despite ongoing efforts to transform traditional economic and business models, are not ready for this shift, the Commission can help boost the circular shift. This could, for instance, be done with a single market for waste and with support for changing the business operations of the bulk of the SMEs that are not frontrunners in innovation;

52.

stresses the need to focus on sectors and areas where the greatest contribution to achieving climate ambitions can be made. This would especially be in energy-intensive industry and large industry clusters and in the production chains of which they are part. The focus on production chains will also benefit SMEs in industry, as they are often part of the production chain around larger companies. This will maximise the impact on climate ambitions. Industry is extremely important as the basis of regional labour markets in industrial regions. This means that the transition of industry to a sustainable business model is crucial, also in terms of employment and an inclusive transition to a sustainable and digital economy;

53.

considers it essential that the new industry model find solutions to protect jobs, particularly in sectors heavily affected by the green transition, such as the automotive sector, given that it is one of the main driving forces behind the European economy. To safeguard jobs, the greening required of automotive products should be carried out with flexibility and sufficient time, on the basis of technical neutrality, and through EU financial aid to affected regions with a view to adapting existing factories, suppliers and production facilities. Furthermore, the competitiveness of existing production sites should be ensured, as well as the ability to adapt jobs;

54.

stresses that access to reliable and affordable electricity sources is crucial for the competitiveness of European industry. This requires building production capacities based on fully renewable sources. When calculating the economic viability of energy sources, the overall costs must always be taken into account, i.e. levelised costs of energy covering the full life cycle of energy production, system costs and external costs;

55.

calls for a broad and inclusive conception of economic growth, also in terms of sex, race, gender, language, religion, political opinion and personal and social circumstances, as we need all the talent Europe has to offer; stresses that women continue to be severely under-represented in managerial positions in companies and calls on companies to make gender parity at all levels of management an integral part of their fundamental corporate principles. Diverse companies are more successful than companies that are not representative of (their) society;

56.

points out that the European Union’s State aid framework needs to be fundamentally recalibrated in order to examine how the gradual transformation of energy-intensive and foreign-trade-dependent commodity industries into low-carbon and carbon-neutral processes can be better supported. In addition, European and national funding programmes must be given sufficient resources and it must be possible to combine them;

57.

underlines the need to strike a balance between the dynamic of change that is needed for the dual transition, on the one hand, and the predictability of the regulatory framework (especially for SMEs and employees), on the other. The CoR also stresses that an inclusive transition requires the deployment of funds for (re)training the workforce in new skills on a regional scale and across sectors. This would be to avoid both the ‘lock-in’ of employees in the sectors in which they work, and also the need to move to other regions for work;

58.

stipulates that this also means the dual transition must be supported by a transition to an economy that addresses the ageing population and the innovations that are needed to include all citizens in the dual transition;

59.

the CoR welcomes the development of indicators, and would like to stress that long-term competitiveness, including resilience, follows from faster transitions. Therefore indicators should measure the speed and stumbling blocks for the dual transition, not competitiveness in general;

60.

points out to the European Commission the important role LRAs and regional development agencies can have in accelerating the twin transition in supporting digital and green SMEs; urges the Commission to embrace the principle of ‘think small, act regional’.

Brussels, 2 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) CoR Opinion on https://webapi2016.COR.europa.eu/v1/documents/cor-2016-01726-00-01-ac-tra-en.docx/content (COR-2016-01726-00-01).

(2) CoR Opinion on https://webapi2016.COR.europa.eu/v1/documents/cor-2020-01374-00-00-ac-tra-en.docx/content, point 4.

(3) CoR Opinion on https://webapi2016.COR.europa.eu/v1/documents/cor-2020-01374-00-00-ac-tra-en.docx/content, point 6.

(4) CoR Opinion on the Action Plan on Critical Raw Materials (CDR-2021-04292-00-01).

28.2.2022

Official Journal of the European Union

C 97/50

Opinion of the European Committee of the Regions — European Commission Report on Competition Policy in 2020

(2022/C 97/10)

Rapporteur:	Tadeusz TRUSKOLASKI (PL/EA), Mayor of Białystok
Reference document:	COM(2021) 373 final

POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

Introduction

considers that the European Single Market (ESM) is one of the greatest achievements of the European Union (EU), and that EU competition policy aims to maintain an open market economy with free, fair and effective competition, conducive to an efficient allocation of resources and promoting innovation;

appreciates the efforts made so far by the European Commission (EC) and the European Parliament (EP) to establish a clear, transparent and effective EU competition policy;

stresses that reconciling the EU’s competition rules with its industrial, digital, environmental, climate, social and international trade policies is essential for ensuring a level playing field in all sectors and in this way ensuring global competitiveness, thus contributing to the development of SMEs;

welcomes Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union, and also the Commission’s White Paper on levelling the playing field as regards foreign subsidies;

agrees with the statements highlighting the limited access of consumers to full online information on products and services due to the limited number of available digital ecosystems and platforms, with low availability of translations into national languages;

welcomes the Commission’s attention to the ‘Important Projects of Common European Interest’ (IPCEI) initiative;

points out that the objectives of EU competition policy should take particular account of the needs of SMEs, including the ones from rural and less developed areas, and create a fair and level playing field for the benefit of all EU citizens;

stresses that it is particularly important for local and regional authorities to ensure that EU competition policy is improved, as equal treatment of companies is key, in addition to being one of the priorities of the functioning of the internal market;

EU competitiveness and pandemic support for businesses

considers that any COVID-19-related aid must be granted only to businesses that are experiencing the immediate financial impact of the pandemic, and where this is making them unprofitable;

10.

points out that temporary financial measures to respond to the pandemic should not be used by unprofitable companies that are not committed to the EU’s climate goals or are in the process of bankruptcy or major restructuring, or require restructuring, so long as these processes had already begun before the pandemic;

11.

draws attention to the broad lines of a global corporate tax reform agreed by the OECD/G20 Inclusive Framework in October 2021; calls on the European Commission to propose concrete measures to implement the new rules in the EU as soon as the negotiations are concluded, urgently calls for efforts to further develop global tax law, taking into account businesses of all sizes;

12.

recognises that public aid should be designed and granted in a manner that is both transparent and socially, economically and environmentally responsible;

13.

welcomes the restrictions already put in place by the Commission concerning, inter alia, the payment of dividends and bonuses, or the redemption of shares of businesses in receipt of aid;

14.

encourages the creation of mechanisms to facilitate functioning in times of economic downturn as a result of economic and non-economic crises (as in the case of the COVID-19 pandemic), but reducing the share of direct funding that artificially disrupts market relations;

15.

points out that the disruption of the operating environment caused, inter alia, by various types of crisis encourages businesses to reorganise the market contrary to EU competition policy, leading, for example, to the conclusion of production volume agreements and/or to increased profitability; however, this is prohibited by EU competition rules and ultimately leads to the costs of the crisis being passed on to consumers;

16.

stresses that the primary objective, even in crisis conditions, remains to ensure that consumers benefit from competitive markets only if these offer fair prices and a wide choice of high-quality products;

17.

believes that ensuring a level playing field for businesses in the Single Market is crucial especially for SMEs, including for the creation of innovation, the development of new green technologies and the creation of sustainable jobs in the EU;

18.

calls on the EC to monitor the use and distribution of various EU funds in response to the COVID-19 crisis, including through Member States’ national recovery and resilience plans, which must comply with EU competition and state aid rules;

19.

expects ex ante action on crisis strategies; competition policy planning must be coherent and consistent within a long-term decision-making horizon.

New areas of the European market

20.

welcomes the EC proposal for a Digital Markets Act and stresses the urgency of creating a fair business environment for business users dependent on gatekeepers in order to ensure free competition online too;

21.

calls on the EC, the Member States and regions to step up their efforts to promote technology transfer, in order to support the building of EU value-creation chains and to maximise the use of available capital; less developed, peripheral, outermost and island regions should be given particular support;

22.

stresses that digitalisation is particularly important for SMEs, as it provides access to wider markets and eliminates spatial problems resulting from geographical disadvantages; EU funds should be granted for SMEs, especially to the ones from rural and less developed areas to digitalise their activities. As well as, information on EU level opportunities in regard to digitalisation should be provided to SMEs. LRAs could play a key role in dissemination;

23.

considers that the development of the EU leading to the digital transformation requires action to be taken against monopolistic structures;

24.

draws attention to the particular importance of the prohibition of abuse of a dominant position (Article 102 TFEU) relating to the activities of both external and intra-EU entities; this is especially important in poorly formalised or monitored emerging areas of the market with dynamic growth;

25.

points out that financial penalties imposed for breaches of competitive conditions are only part of the solution and, in particular, the new Digital Markets Act must stop gatekeepers from engaging in illegal practices to gain a competitive advantage; criticises the fact that the costs incurred from competition penalties are passed on to consumers, ultimately creating a situation where EU citizens are the only victims;

26.

stresses that the European Commission's Directorate-General for Competition has its own department for digital affairs, which has carried out a number of sector inquiries in recent years (e.g. the E-commerce Sector Inquiry and the Sector Inquiry into the Consumer Internet of Things), which also led to the proposal for a Digital Markets Act; expects the Directorate-General for Competition to incorporate the results of antitrust investigations into the implementation of the Digital Markets Act;

27.

agrees with the EP that the current resources of the EC’s Directorate-General for Competition (DG COMP) are insufficient in relation to its workload and challenges;

28.

recognises the challenges posed by the creation and implementation of competition policy, especially in the area of the digital market, where concentration, aggregation and use of data in zero-price markets takes place, and unfair pricing algorithms are used, especially by large platforms; in this regard, welcomes the fact that the Digital Markets Act among other things aims to ensure that services and products offered by a gatekeeper platform itself are treated the same as similar services and products offered by third parties on the gatekeeper's platform, thereby guaranteeing free competition;

29.

expects the EC to work towards adapting the register on organisations lobbying for specific digital solutions on behalf of non-EU actors and on the transparency of their funding sources;

30.

welcomes the EC’s assessment of the need for new tools to ensure the effectiveness of EU competition policy, which are particularly necessary in new market areas that are still emerging and not well described;

31.

agrees that consumers have too little control over their own data and digital identity, especially as most digital service providers require consent without leaving consumers a choice if they do not want to lose access to certain services;

32.

encourages the EC to create legislation obliging data holders to delete data where consumers have not used their services for a certain period of time (e.g. one year);

33.

expresses its support for actions in favour of services of general economic interest (SGEI), which remain essential for the survival of a number of communities across Europe, especially in isolated, remote or peripheral regions of the Union;

34.

points out that some oligopolistic structures have developed in the area of financial services and that some large technology companies have become important players in the financial services market, which requires control and safeguard arrangements for consumers; in this regard, emphasises the importance of applying Article 102 TFEU to online services too, so that small providers from cities and regions that offer their services/products online do not suffer a competitive disadvantage;

35.

calls on the EC to review the Consumer Credit Directive, as existing consumer protection is insufficient and access to information for raising awareness of the impact of various factors on product variability is too low;

36.

calls on the Commission to investigate unfair clauses and practices, particularly in banking sector consumer contracts, as the banking sector, despite its considerable importance, must be treated the same as other areas of the market;

37.

stresses the need to protect taxpayers and bank customers from the burden of bailing out the financial system.

EU competition policy vis-à-vis third countries

38.

joins the EP’s call to strengthen trade defence instruments to combat unfair trading practices and safeguard the competitiveness of European industry;

39.

expects work to be undertaken on the bi-directionality of EU competitiveness policy so that within the framework of the Single Market there are guarantees of freedom and mechanisms to prevent concentration, including the creation of monopolies, and that a balance is built between the market power of buyers and sellers, along with, in relation to third countries (e.g. China, United States), mechanisms equivalent to export promotion models;

40.

points out that in the fight against monopolisation of the European market the same effort must be made in relation to both EU and non-EU operators; today, especially in the area of e-commerce, there are numerous dysfunctions resulting from the monopolisation of advanced digital technologies by US and Chinese corporations;

41.

expects industrial policy to be developed in such a way that it works as a tool for the convergence of regions and supports an efficient spatial reallocation of resources without distorting competition;

42.

calls on the Commission to draw attention to the role of foreign state-owned enterprises, which are supported and subsidised by their governments in a way that EU Single Market rules prohibit for EU operators;

43.

demands equal treatment of the EU’s trading partners, and therefore expects the Commission to formalise rules guaranteeing uniform conditions in relation to market access, competition and state aid; any breach of the conditions should entail the suspension of trade on special terms, so that the threat of sanctions has an incentive dimension;

44.

notes that current activities favouring competition show that non-EU actors are not following the same rules and are receiving strong state support, amongst other things, including financial support. This requires European competition law to be more flexible, particularly with regard to state aid, as it does not take sufficient account of the nature of competition faced by European companies in third countries where the same rules are not respected;

45.

calls for work on EU trade policy to be strengthened rather than following other markets such as the United States, as the formula used so far is consistent with the convictions of EU citizens and traditions of entrepreneurship; the EU needs to strengthen its trade policy in order to be more assertive in terms of reciprocity in market access and control of industrial subsidies;

46.

encourages the extension of the control model for capital concentration; attention should be paid to its increasing expansion, which leads not only to the creation of market monopolies, but also increases the vertical and horizontal occupation of the market, which has a negative impact on the deconcentration of value chains;

47.

achieving the objectives of tackling social inequalities and the climate crisis, raising environmental standards, improving implementation of the UN Sustainable Development Goals, implementing climate and consumer protection policies, all requires actions strictly treating any breach of applicable conditions on production, employment, the environment, etc. by suppliers outside the EU.

The future of EU competition policy

48.

points out that the provisions of the EU-UK Trade and Cooperation Agreement governing oversight of state aid/subsidies impose significant restrictions on both parties with regard to public subsidies; while the provisions ensure that EU competition law continues to set standards for a level playing field, Articles 3.4.2 and 3.5 of the agreement stipulate that certain types of subsidies must not be granted by the parties if they have or could have a ‘material’ effect on trade or investment between the parties; therefore calls on the Commission to closely monitor the UK's compliance with these provisions to avoid any subsidy dumping by the UK;

49.

encourages more radical action against the boycotting, falsification and imitation for fraudulent marketing of Member States’ products and services on the global market; SMEs must have clear support from the European institutions in foreign markets;

50.

draws attention to the need for a clear demarcation between the objectives of competition policy, which should be applied first and foremost in the European Single Market, and an industrial policy aimed at supporting entities undertaking competition in the global market;

51.

considers that long-term action under EU competition policy should strengthen the resilience of value-added chains in order to reduce dependence on third-country operators and, where this is not possible, to guarantee a high degree of diversification of suppliers;

52.

stresses that EU competition and state aid rules must be consistent with the European Green Deal, the EU Digital Strategy, the European Pillar of Social Rights and the UN Sustainable Development Goals; emphasises that the Member States are responsible for determining the energy mix, but finds it regrettable that a number of Member States do not make state aid conditional on such goals;

53.

welcomes the fact that the recent study prepared for the Commission on market trends in healthcare and social housing and EU state aid implications, carried out as part of an ongoing evaluation of the implications of the 2012 Services of General Economic Interest (SGEI) package for health care and social housing (1), largely supports the calls made by the CoR in its October 2016 opinion on state aid and services of general economic interest (2), and in particular the following two points: 1) the de minimis threshold of EUR 500 000 is easily reached and, given the overall increase in state aid support for these sectors, consideration should be given to increasing the threshold, in order to ensure proportionality; 2) we consider the definition of social housing to be unclear, as there is no single definition of social housing in the EU Member States. Furthermore, the current definition would appear to be outdated, as the population’s needs for affordable housing are increasing. The CoR therefore reiterates its call for the overly restrictive reference to ‘disadvantaged citizens or socially less advantaged groups’ to be removed from the definition;

54.

calls on the EC to monitor and thoroughly investigate the impact of financial actors, especially digital platforms, on market competition and consumer decisions;

55.

points out that the EU’s state aid framework to support the gradual transformation of energy-intensive primary industries dependent on foreign trade into low-carbon and carbon-neutral processes needs to be fundamentally revised. Support needs to be provided not just for investments but also for operating costs. European and national funding programmes must therefore have sufficient resources and be able to be combined. Project-based climate contracts that include a long-term government CO2 price guarantee can also make significant contributions to industrial transformation;

56.

draws attention to the need to create and apply effective tools to put pressure on internal and external actors that do not comply with competition rules;

57.

considers that strict and impartial enforcement of EU competition rules by independent competition authorities is crucial for European businesses operating in the internal market and at international level, in particular for SMEs, and therefore encourages greater firmness when imposing sanctions on those who breach the expected order;

58.

reiterates its call for greater ambition when implementing new solutions, particularly those that concern climate neutrality of the European economy, and for boldness when directly strengthening the uniformity of the Single Market;

59.

encourages measures linking cohesion policy and competition policy, so that eventual support is associated with the harmonisation of rules and principles for operators in the Single Market; in this regard, welcomes the flexibility introduced in relation to the COVID-19 pandemic in terms of state aid for regional policy; draws attention to the CoR COTER Commission's survey among managing authorities of the Structural Funds on the implementation of accompanying measures for the CRII and CRII + programmes, which showed that the majority of Structural Funds managing authorities supported a temporary increase in the de minimis threshold for state aid;

60.

while recognising that European businesses must be able to compete in global markets on an equal footing, calls on the EC to adapt EU competition policy and state aid in order to promote industrial development, particularly in areas with the highest level of technical and technological excellence, and to strongly support the expansion of European businesses outside the Single Market;

61.

welcomes the European Commission’s initiative to propose amendments to the General Block Exemption Regulation (GBER), in order to further facilitate public support for the EU’s green and digital transition (3); stresses that exempting certain categories of aid from the notification requirement makes it much easier for Member States to grant aid quickly if the conditions for limiting distortions of competition in the internal market are met;

62.

underlines that it is important for the EU to remain an open economy and continue to promote free, fair, sustainable international trade that is of benefit to all trade partners; to this end, supports the European Commission's efforts to reform the WTO, the aim of which must be to revitalise and strengthen the WTO, inter alia by modernising the way it works and filling gaps in its regulatory framework so that it can respond adequately to current trade policy challenges;

63.

reiterates its call on the European Commission to develop more flexible and more effective public aid rules to provide regional airports with financial assistance in line with ERDF and RRF provisions in peripheral, island or outermost or less developed regions where a more efficient and sustainable alternative does not exist (4).

Brussels, 2 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

(1) https://ec.europa.eu/competition-policy/system/files/2021-09/kd0621047enn_SGEI_evaluation.pdf.

(2) https://webapi2016.COR.europa.eu/v1/documents/cor-2016-01460-00-00-ac-tra-en.docx/content

(3) European Commission consultation of 6 October 2021 with a view to adopting the revised GBER in the first half of 2022.

(4) COTER-VII-010, COR-2021-00471-00-00 Opinion of the European Committee of the Regions on The future of regional airports — Challenges and opportunities.

28.2.2022

Official Journal of the European Union

C 97/60

Opinion of the European Committee of the Regions — European approach to artificial intelligence — Artificial Intelligence Act

(revised opinion)

(2022/C 97/12)

Rapporteur:

Guido RINK (NL/PES), Member of the Executive Council of Emmen

Reference documents:

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Fostering a European approach to Artificial Intelligence

COM(2021) 205

Proposal for a Regulation of the European Parliament and of the Council laying down harmonised rules on artificial intelligence (Artificial Intelligence Act) and amending certain Union legislative acts

COM(2021) 206

I. RECOMMENDATIONS FOR AMENDMENTS

Amendment 1

Recital 1

Text proposed by the Commission

CoR amendment

The purpose of this Regulation is to improve the functioning of the internal market by laying down a uniform legal framework in particular for the development, marketing and use of artificial intelligence in conformity with Union values. This Regulation pursues a number of overriding reasons of public interest, such as a high level of protection of health, safety and fundamental rights, and it ensures the free movement of AI-based goods and services cross-border, thus preventing Member States from imposing restrictions on the development, marketing and use of AI systems, unless explicitly authorised by this Regulation.

The purpose of this Regulation is to improve the functioning of the internal market and protect the fundamental rights of citizens by laying down a uniform legal framework in particular for the development, marketing and use of artificial intelligence in conformity with Union values. This Regulation pursues a number of overriding reasons of public interest, such as a high level of protection of health, safety and fundamental rights, and it ensures the free movement of AI-based goods and services cross-border, thus preventing Member States from imposing restrictions on the development, marketing and use of AI systems, unless explicitly authorised by this Regulation.

Reason

The reference to fundamental rights is intended to emphasise the link with the EU Charter of Fundamental Rights.

Amendment 2

New recital after Recital 6

Text proposed by the Commission	CoR amendment
	Defining AI systems is an ongoing process that should take into account the context in which AI operates, keep pace with societal developments in this field and not lose sight of the link between the ecosystem of excellence and the ecosystem of trust.

Reason

Developments in AI and technology require an adaptive and evolving approach. This recital reflects the fact that the definition of AI should move with the times and state of development of AI systems and applications.

Amendment 3

Recital 20

Text proposed by the Commission

CoR amendment

In order to ensure that those systems are used in a responsible and proportionate manner, it is also important to establish that, in each of those three exhaustively listed and narrowly defined situations, certain elements should be taken into account, in particular as regards the nature of the situation giving rise to the request and the consequences of the use for the rights and freedoms of all persons concerned and the safeguards and conditions provided for with the use. In addition, the use of ‘real-time’ remote biometric identification systems in publicly accessible spaces for the purpose of law enforcement should be subject to appropriate limits in time and space, having regard in particular to the evidence or indications regarding the threats, the victims or perpetrator. The reference database of persons should be appropriate for each use case in each of the three situations mentioned above.

In order to ensure that those systems are used in a responsible and proportionate manner, it is also important to establish that, in each of those three exhaustively listed and narrowly defined situations, certain elements should be taken into account, in particular as regards the nature of the situation giving rise to the request and the consequences of the use for the rights and freedoms of all persons concerned and the safeguards and conditions provided for with the use. Consultation of the relevant local and regional authorities should take place prior to the exceptional use of those systems. In addition, the use of ‘real-time’ remote biometric identification systems in publicly accessible spaces for the purpose of law enforcement should be subject to stringent limits in time and space, having regard in particular to the evidence or indications regarding the threats, the victims or perpetrator. The reference database of persons should be appropriate for each use case in each of the three situations mentioned above.

Reason

‘Real-time’ remote biometric identification systems should not be used lightly.

Amendment 4

Recital 21

Text proposed by the Commission

CoR amendment

Each use of a ‘real-time’ remote biometric identification system in publicly accessible spaces for the purpose of law enforcement should be subject to an express and specific authorisation by a judicial authority or by an independent administrative authority of a Member State. Such authorisation should in principle be obtained prior to the use, except in duly justified situations of urgency, that is, situations where the need to use the systems in question is such as to make it effectively and objectively impossible to obtain an authorisation before commencing the use. In such situations of urgency , the use should be restricted to the absolute minimum necessary and be subject to appropriate safeguards and conditions, as determined in national law and specified in the context of each individual urgent use case by the law enforcement authority itself. In addition, the law enforcement authority should in such situations seek to obtain an authorisation as soon as possible, whilst providing the reasons for not having been able to request it earlier.

Each use of a ‘real-time’ remote biometric identification system in publicly accessible spaces for the purpose of law enforcement should be subject to an express and specific authorisation by a judicial authority or by an independent administrative authority of a Member State. Such authorisation should be obtained prior to the use, except in duly justified situations of urgency, that is, situations where the need to use the systems in question is such as to make it effectively and objectively impossible to obtain an authorisation before commencing the use. In any case , the use should be restricted to the absolute minimum necessary and be subject to appropriate safeguards and conditions, as determined in national law. In addition, the law enforcement authority should immediately inform the relevant local and regional authorities and seek to obtain an authorisation from the competent authorities .

Reason

The political and administrative responsibility for managing and monitoring public spaces lies with local and regional authorities. They should therefore be duly involved in the deployment of such systems in public spaces. In urgent situations where it would not be reasonable to await prior consultation, the local or regional authority concerned should be immediately informed about the deployment of biometric systems in the public space.

Amendment 5

Recital 39

Text proposed by the Commission

CoR amendment

AI systems used in migration, asylum and border control management affect people who are often in particularly vulnerable position and who are dependent on the outcome of the actions of the competent public authorities. The accuracy, non-discriminatory nature and transparency of the AI systems used in those contexts are therefore particularly important to guarantee the respect of the fundamental rights of the affected persons, notably their rights to free movement, non-discrimination, protection of private life and personal data, international protection and good administration. It is therefore appropriate to classify as high-risk AI systems intended to be used by the competent public authorities charged with tasks in the fields of migration, asylum and border control management as polygraphs and similar tools or to detect the emotional state of a natural person; for assessing certain risks posed by natural persons entering the territory of a Member State or applying for visa or asylum; for verifying the authenticity of the relevant documents of natural persons; for assisting competent public authorities for the examination of applications for asylum, visa and residence permits and associated complaints with regard to the objective to establish the eligibility of the natural persons applying for a status. AI systems in the area of migration, asylum and border control management covered by this Regulation should comply with the relevant procedural requirements set by the Directive 2013/32/EU of the European Parliament and of the Council, the Regulation (EC) No 810/2009 of the European Parliament and of the Council and other relevant legislation.

AI systems used in migration, asylum and border control management affect people who are often in particularly vulnerable position and who are dependent on the outcome of the actions of the competent public authorities. The accuracy, non-discriminatory nature and transparency of the AI systems used in those contexts are therefore particularly important to guarantee the respect of the fundamental rights of the affected persons, notably their rights to free movement, non-discrimination, protection of private life and personal data, international protection and good administration. It is therefore necessary to classify as high-risk AI systems intended to be used by the competent public authorities charged with tasks in the fields of migration, asylum and border control management as polygraphs and similar tools or to detect the emotional state of a natural person; for assessing certain risks posed by natural persons entering the territory of a Member State or applying for visa or asylum; for verifying the authenticity of the relevant documents of natural persons; for assisting competent public authorities for the examination of applications for asylum, visa and residence permits and associated complaints with regard to the objective to establish the eligibility of the natural persons applying for a status. AI systems in the area of migration, asylum and border control management covered by this Regulation should comply with the relevant procedural requirements set by the Directive 2013/32/EU of the European Parliament and of the Council, the Regulation (EC) No 810/2009 of the European Parliament and of the Council and other relevant legislation.

Reason

This adaptation expresses the need to subject the AI systems concerned to the more robust regime for high-risk AI systems.

Amendment 6

Recital 43

Text proposed by the Commission

CoR amendment

Requirements should apply to high-risk AI systems as regards the quality of data sets used, technical documentation and record-keeping, transparency and the provision of information to users, human oversight, and robustness, accuracy and cybersecurity. Those requirements are necessary to effectively mitigate the risks for health, safety , data security, consumer rights and fundamental rights, as applicable in the light of the purpose of the system, and no other less trade restrictive measures are reasonably available, thus avoiding unjustified restrictions to trade. Natural persons or groups of persons affected by high-risk AI systems placed on the EU market or otherwise put into service should be informed in an appropriate, easily accessible and comprehensible manner, and have access to explicit, readily accessible and publicly available information explaining that they are subject to such systems.

Reason

The transparency and information requirements applicable to providers and users should be extended to the persons or groups of persons potentially affected by the use of high-risk AI systems, as listed in Annex III to the Regulation. In a comprehensible manner also means ‘in a language that is comprehensible and accessible to the user, including oral-auditory and manual visual languages’.

Amendment 7

New recital after Recital 44

Text proposed by the Commission	CoR amendment
	AI system providers shall refrain from any measure promoting unjustified discrimination based on sex, origin, religion or belief, disability, age, sexual orientation, or discrimination on any other grounds, in their quality management system.

Reason

Unlawful discrimination originates in human action. AI system providers should refrain from any measures in their quality system that could promote discrimination.

Amendment 8

Recital 47

Text proposed by the Commission

CoR amendment

To address the opacity that may make certain AI systems incomprehensible to or too complex for natural persons, a certain degree of transparency should be required for high-risk AI systems. Users should be able to interpret the system output and use it appropriately. High-risk AI systems should therefore be accompanied by relevant documentation and instructions of use and include concise and clear information, including in relation to possible risks to fundamental rights and discrimination, where appropriate.

To address the opacity that may make certain AI systems incomprehensible to or too complex for natural persons or public authorities at all levels of governance , a high level of transparency should be required for high-risk AI systems. Users should be able to interpret the system output and use it appropriately. High-risk AI systems should therefore be accompanied by relevant documentation and instructions of use and include concise and clear information, including in relation to possible risks to fundamental rights and discrimination, where appropriate.

Reason

The accountability of those who design high-risk AI systems is weakened by the use of the words ‘a certain degree of transparency’.

Amendment 9

Recital 48

Text proposed by the Commission

CoR amendment

High-risk AI systems should be designed and developed in such a way that natural persons can oversee their functioning. For this purpose, appropriate human oversight measures should be identified by the provider of the system before its placing on the market or putting into service. In particular, where appropriate, such measures should guarantee that the system is subject to in-built operational constraints that cannot be overridden by the system itself and is responsive to the human operator, and that the natural persons to whom human oversight has been assigned have the necessary competence, training and authority to carry out that role.

High-risk AI systems should be designed and developed in such a way that natural persons and public authorities at all levels of governance can oversee their functioning. For this purpose, appropriate human oversight measures should be identified by the provider of the system before its placing on the market or putting into service. In particular, where appropriate, such measures should guarantee that the system is subject to in-built operational constraints that cannot be overridden by the system itself and is responsive to the human operator, and that the natural persons to whom human oversight has been assigned have the necessary competence, training and authority to carry out that role.

Reason

Self-explanatory.

Amendment 10

Recital 67

Text proposed by the Commission

CoR amendment

High-risk AI systems should bear the CE marking to indicate their conformity with this Regulation so that they can move freely within the internal market. Member States should not create obstacles to the placing on the market or putting into service of high-risk AI systems that comply with the requirements laid down in this Regulation and bear the CE marking. Member States shall have the power to regulate high-risk AI practices and AI systems solely on the basis of overriding and duly justified public and national security interests .

Reason

While Member States should not obstruct the application of the Regulation, they should retain the right to regulate high-risk AI systems if public and national security interests are at stake.

Amendment 11

Recital 70

Text proposed by the Commission

CoR amendment

Certain AI systems intended to interact with natural persons or to generate content may pose specific risks of impersonation or deception irrespective of whether they qualify as high-risk or not. In certain circumstances, t he use of these systems should therefore be subject to specific transparency obligations without prejudice to the requirements and obligations for high-risk AI systems. In particular, natural persons should be notified that they are interacting with an AI system , unless this is obvious from the circumstances and the context of use . Moreover, natural persons should be notified when they are exposed to an emotion recognition system or a biometric categorisation system. Such information and notifications should be provided in accessible formats for persons with disabilities. Further, users, who use an AI system to generate or manipulate image, audio or video content that appreciably resembles existing persons, places or events and would falsely appear to a person to be authentic, should disclose that the content has been artificially created or manipulated by labelling the artificial intelligence output accordingly and disclosing its artificial origin.

Certain AI systems intended to interact with natural persons or to generate content may pose specific risks of impersonation or deception irrespective of whether they qualify as high-risk or not. The use of these systems should therefore be subject to specific transparency obligations without prejudice to the requirements and obligations for high-risk AI systems. In particular, natural persons should be systematically notified that they are interacting with an AI system. Moreover, natural persons should be notified when they are exposed to an emotion recognition system or a biometric categorisation system. Such information and notifications should be provided in accessible formats for persons with disabilities. Further, users, who use an AI system to generate or manipulate image, audio or video content that appreciably resembles existing persons, places or events and would falsely appear to a person to be authentic, should disclose that the content has been artificially created or manipulated by labelling the artificial intelligence output accordingly and disclosing its artificial origin.

Reason

No exceptions should be made to the transparency and notification requirement when natural persons interact with AI systems.

Amendment 12

Recital 76

Text proposed by the Commission

CoR amendment

In order to facilitate a smooth, effective and harmonised implementation of this Regulation a European Artificial Intelligence Board should be established. The Board should be responsible for a number of advisory tasks, including issuing opinions, recommendations, advice or guidance on matters related to the implementation of this Regulation, including on technical specifications or existing standards regarding the requirements established in this Regulation and providing advice to and assisting the Commission on specific questions related to artificial intelligence.

Reason

The European AI Board should properly reflect the broad interests of European society. These interests include human rights, climate and the energy-efficient use of AI systems, safety, social inclusion, health, etc. Gender balance is a precondition for diversity in issuing opinions, drafting guidelines, etc.

Amendment 13

Recital 77

Text proposed by the Commission

CoR amendment

Member States hold a key role in the application and enforcement of this Regulation. In this respect, each Member State should designate one or more national competent authorities for the purpose of supervising the application and implementation of this Regulation. In order to increase organisation efficiency on the side of Member States and to set an official point of contact vis-à-vis the public and other counterparts at Member State and Union levels, in each Member State one national authority should be designated as national supervisory authority.

Reason

In order to ensure the feasibility of the Regulation and its supervisory and enforcement framework, the Member State should be empowered to entrust, where necessary and where possible, local and regional authorities with carrying out supervisory or enforcement tasks.

Amendment 14

Recital 79

Text proposed by the Commission

CoR amendment

In order to ensure an appropriate and effective enforcement of the requirements and obligations set out by this Regulation, which is Union harmonisation legislation, the system of market surveillance and compliance of products established by Regulation (EU) 2019/1020 should apply in its entirety. Where necessary for their mandate, national public authorities or bodies, which supervise the application of Union law protecting fundamental rights, including equality bodies, should also have access to any documentation created under this Regulation.

In order to ensure an appropriate and effective enforcement of the requirements and obligations set out by this Regulation, which is Union harmonisation legislation, the system of market surveillance and compliance of products established by Regulation (EU) 2019/1020 should apply in its entirety. Where necessary for their mandate, national public authorities and, where applicable, local or regional authorities, or bodies, which supervise the application of Union law protecting fundamental rights, including equality bodies, should also have access to any documentation created under this Regulation.

Reason

This amendment takes into account the varying governance structures in the EU Member States.

Amendment 15

Recital 83

Text proposed by the Commission	CoR amendment
In order to ensure trustful and constructive cooperation of competent authorities on Union and national level, all parties involved in the application of this Regulation should respect the confidentiality of information and data obtained in carrying out their tasks.	In order to ensure trustful and constructive cooperation of competent authorities on Union, national , regional and local level, all parties involved in the application of this Regulation should respect the confidentiality of information and data obtained in carrying out their tasks.

Reason

This amendment takes into account the varying governance structures in the EU Member States.

Amendment 16

TITLE I, Article 3(1) — Definitions

Text proposed by the Commission

CoR amendment

‘artificial intelligence system’ (AI system) means software that is developed with one or more of the techniques and approaches listed in Annex I and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with;

‘artificial intelligence system’ (AI system) means software that is developed with one or more of the techniques and approaches listed (non-exhaustively) in Annex I , combined with social practices, identity and culture, and that can, for a given set of human-defined objectives, by observing its environment through collecting data, interpreting the collected structured or unstructured data, managing knowledge, or processing the information derived from these data, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with;

Reason

An AI system consists of a combination of technical elements that link data, algorithms and processing power to social practices, society, identity and culture. The definition of such a dynamic socio-technical aggregate should therefore be future-proof and regularly updated to accurately reflect AI’s ever-growing societal impact, while identifying fast changing AI-related challenges and opportunities, including the link between knowledge management and AI. In this context, an algorithm developed by another algorithm should also be subject to the Regulation.

Amendment 17

Article 5(1)

Text proposed by the Commission

CoR amendment

The following artificial intelligence practices shall be prohibited:

(a)	the placing on the market, putting into service or use of an AI system that deploys subliminal techniques beyond a person’s consciousness in order to materially distort a person’s behaviour in a manner that causes or is likely to cause that person or another person physical or psychological harm;

(a)

the placing on the market, putting into service or use of an AI system that deploys subliminal techniques beyond a person’s consciousness in order to materially distort a person’s behaviour in a manner that causes or is likely to cause that person or another person physical or psychological harm , infringes or is likely to infringe the fundamental rights of another person or a group of persons, including their physical or psychological health and safety, has or is likely to have a detrimental effect on consumers, including monetary loss or economic discrimination, or undermines or is likely to undermine democracy and the rule of law ;

(b)

the placing on the market, putting into service or use of an AI system that exploits any of the vulnerabilities of a specific group of persons due to their age, physical or mental disability, in order to materially distort the behaviour of a person pertaining to that group in a manner that causes or is likely to cause that person or another person physical or psychological harm;

(b)

(c)

the placing on the market, putting into service or use of AI systems by public authorities or on their behalf for the evaluation or classification of the trustworthiness of natural persons over a certain period of time based on their social behaviour or known or predicted personal or personality characteristics, with the social score leading to either or both of the following:

i)	detrimental or unfavourable treatment of certain natural persons or whole groups thereof in social contexts which are unrelated to the contexts in which the data was originally generated or collected;

ii)	detrimental or unfavourable treatment of certain natural persons or whole groups thereof that is unjustified or disproportionate to their social behaviour or its gravity;

(c)

the placing on the market, putting into service or use of AI systems by public authorities or on their behalf for the evaluation or classification of the trustworthiness of natural persons or groups of persons over a certain period of time based on their social behaviour or known or predicted personal or personality characteristics, leading to AI-based social scoring for general purposes ;

(d)

the use of ‘real-time’ remote biometric identification systems in publicly accessible spaces for the purpose of law enforcement, unless and in as far as such use is strictly necessary for one of the following objectives:

i)	the targeted search for specific potential victims of crime, including missing children;

ii)	the prevention of a specific, substantial and imminent threat to the life or physical safety of natural persons or of a terrorist attack;

iii)

the detection, localisation, identification or prosecution of a perpetrator or suspect of a criminal offence referred to in Article 2(2) of Council Framework Decision 2002/584/JHA ([62]) and punishable in the Member State concerned by a custodial sentence or a detention order for a maximum period of at least three years, as determined by the law of that Member State.

(d)

the placing on the market, putting into service or use of AI systems by public authorities or on their behalf, applying AI-based social scoring without human oversight for specific purposes, that is, in social contexts related to the contexts in which the data was originally generated or collected, for the evaluation or classification of the trustworthiness of natural persons or groups of persons over a certain period of time based on their social behaviour or known or predicted personal or personality characteristics, with the social score leading to detrimental or unfavourable treatment of certain natural persons or whole groups thereof that is unjustified or disproportionate to their social behaviour or its gravity;

(e)

i)	the targeted search for specific potential victims of crime, including missing children;

ii)	the prevention of a specific, substantial and imminent threat to the life or physical safety of natural persons or of a terrorist attack;

iii)

Reason

Subliminal techniques can, in general, undermine freedom, human rights and thus the functioning of the democratic rule of law. At the same time, artificial intelligence may undermine consumer rights. The purpose of the additions is to make this clear.

Concerning social classification by public authorities or on their behalf, it should be banned if carried out for general purposes, given the dangers resulting from such practices, as explained in Recital 17. The generation or collection of data for specific purposes should only be allowed with human oversight and provided that it does not violate the right to dignity and non-discrimination and the values of equality and justice.

Amendment 18

Article 5(4)

Text proposed by the Commission

CoR amendment

A Member State may decide to provide for the possibility to fully or partially authorise the use of ‘real-time’ remote biometric identification systems in publicly accessible spaces for the purpose of law enforcement within the limits and under the conditions listed in paragraphs 1, point (d), 2 and 3. That Member State shall lay down in its national law the necessary detailed rules for the request, issuance and exercise of, as well as supervision relating to, the authorisations referred to in paragraph 3. Those rules shall also specify in respect of which of the objectives listed in paragraph 1, point (d), including which of the criminal offences referred to in point (iii) thereof, the competent authorities may be authorised to use those systems for the purpose of law enforcement. Those rules shall lay down the arrangements for informing and consulting the local and regional authorities concerned. This consultation shall take place prior to the exceptional use of these systems in public spaces. In urgent situations where it would not be reasonable to await prior consultation, the local or regional authority concerned shall be immediately informed of the deployment of the relevant AI practice.

Reason

The political and administrative responsibility for managing and monitoring public spaces lies with local and regional authorities. They should therefore be put in a position to provide input prior to the deployment of such AI practices and be duly informed of the exceptional use of AI systems for the purpose of law enforcement.

In urgent situations where it would not be reasonable to await prior consultation, the local or regional authority concerned shall be immediately informed.

Amendment 19

Article 13

Text proposed by the Commission

CoR amendment

Article 13 Transparency and provision of information to users

Article 13a Transparency and provision of information to users

1. High-risk AI systems shall be designed and developed in such a way to ensure that their operation is sufficiently transparent to enable users to interpret the system’s output and use it appropriately. An appropriate type and degree of transparency shall be ensured, with a view to achieving compliance with the relevant obligations of the user and of the provider set out in Chapter 3 of this Title.

1. High-risk AI systems shall be designed and developed in such a way to ensure that their operation is sufficiently transparent to enable users to interpret the system’s output and use it appropriately. An appropriate type and degree of transparency and a comprehensible explanation shall be ensured, with a view to achieving compliance with the relevant obligations of the user and of the provider set out in Chapter 3 of this Title. The explanation shall be provided at least in the language of the country where the AI system is deployed.

2. High-risk AI systems shall be accompanied by instructions for use in an appropriate digital format or otherwise that include concise, complete, correct and clear information that is relevant, accessible and comprehensible to users.

2. High-risk AI systems shall be accompanied by publicly accessible and comprehensible instructions for use in an appropriate digital format or otherwise that include concise, complete, correct and clear information that is relevant, accessible and comprehensible to users.

3. The information referred to in paragraph 2 shall specify:

(a)	the identity and the contact details of the provider and, where applicable, of its authorised representative;

(a)	the identity and the contact details of the provider and, where applicable, of its authorised representative;

(b)	the characteristics, capabilities and limitations of performance of the high-risk AI system, including:

(b)	the characteristics, capabilities and limitations of performance of the high-risk AI system, including:

i)	its intended purpose;

i)	its intended purpose;

ii)

the level of accuracy, robustness and cybersecurity referred to in Article 15 against which the high-risk AI system has been tested and validated and which can be expected, and any known and foreseeable circumstances that may have an impact on that expected level of accuracy, robustness and cybersecurity;

ii)

the level of accuracy (expressed in the relevant metrics for evaluating models) , robustness and cybersecurity referred to in Article 15 against which the high-risk AI system has been tested and validated and which can be expected, and any known and foreseeable circumstances that may have an impact on that expected level of accuracy, robustness and cybersecurity;

iii)	any known or foreseeable circumstance, related to the use of the high-risk AI system in accordance with its intended purpose or under conditions of reasonably foreseeable misuse, which may lead to risks to the health and safety or fundamental rights;

iii)	any known or foreseeable circumstance, related to the use of the high-risk AI system in accordance with its intended purpose or under conditions of reasonably foreseeable misuse, which may lead to risks to the health and safety or fundamental rights;

iv)	its performance as regards the persons or groups of persons on which the system is intended to be used;

iv)	its performance as regards the persons or groups of persons on which the system is intended to be used;

v)	when appropriate, specifications for the input data, or any other relevant information in terms of the training, validation and testing data sets used, taking into account the intended purpose of the AI system.

v)	when appropriate, specifications for the input data, or any other relevant information in terms of the training, validation and testing data sets used, taking into account the intended purpose of the AI system.

vi)	parameters used to tune the model and measures taken to prevent overfitting and underfitting.

(c)	the changes to the high-risk AI system and its performance which have been pre-determined by the provider at the moment of the initial conformity assessment, if any;

(c)	the changes to the high-risk AI system and its performance which have been pre-determined by the provider at the moment of the initial conformity assessment, if any;

(d)	the human oversight measures referred to in Article 14, including the technical measures put in place to facilitate the interpretation of the outputs of AI systems by the users;

(d)	the human oversight measures referred to in Article 14, including the technical measures put in place to facilitate the interpretation of the outputs of AI systems by the users;

(e)	the expected lifetime of the high-risk AI system and any necessary maintenance and care measures to ensure the proper functioning of that AI system, including as regards software updates.

(e)	the expected lifetime of the high-risk AI system and any necessary maintenance and care measures to ensure the proper functioning of that AI system, including as regards software updates.

13b Transparency and information to persons affected

Persons or groups of persons for whom a high-risk AI system is intended to be used shall be informed in an appropriate, easily accessible and comprehensible manner, and have access to explicit, readily accessible and publicly available information of such use.

Reason

In order to strengthen the ecosystem of trust, the instructions for use for high-risk AI systems should be made publicly accessible. These instructions should be written in a language of the country where the AI system is deployed, and should be comprehensible to the reader.

With a view to the transparency and ‘explainability’ of algorithms, it should be possible to explain with which parameters the model has been tuned and what measures have been taken to prevent overfitting and underfitting.

Article 13b lays down an obligation for transparency and information vis-à-vis persons who interact with the AI system or who could be affected by the AI system.

Amendment 20

Article 14(4)

Text proposed by the Commission

CoR amendment

The measures referred to in paragraph 3 shall enable the individuals to whom human oversight is assigned to do the following, as appropriate to the circumstances:

(a)	fully understand the capacities and limitations of the high-risk AI system and be able to duly monitor its operation, so that signs of anomalies, dysfunctions and unexpected performance can be detected and addressed as soon as possible;

(a)	fully understand the capacities and limitations of the high-risk AI system and be able to duly monitor its operation, so that signs of anomalies, dysfunctions and unexpected performance can be detected and addressed as soon as possible;

(b)	remain aware of the possible tendency of automatically relying or over-relying on the output produced by a high-risk AI system (‘automation bias’), in particular for high-risk AI systems used to provide information or recommendations for decisions to be taken by natural persons;

(b)

remain aware of the possible tendency of automatically relying or over-relying on the output produced by a high-risk AI system (‘automation bias’) and of all other forms of bias , in particular for high-risk AI systems used to provide information or recommendations for decisions to be taken by natural persons;

(c)	be able to correctly interpret the high-risk AI system’s output, taking into account in particular the characteristics of the system and the interpretation tools and methods available;

(c)	be able to correctly interpret the high-risk AI system’s output, taking into account in particular the characteristics of the system and the interpretation tools and methods available;

(d)	be able to decide, in any particular situation, not to use the high-risk AI system or otherwise disregard, override or reverse the output of the high-risk AI system;

(d)	be able to decide, in any particular situation, not to use the high-risk AI system or otherwise disregard, override or reverse the output of the high-risk AI system;

(e)	be able to intervene on the operation of the high-risk AI system or interrupt the system through a ‘stop’ button or a similar procedure.

(e)	be able to intervene on the operation of the high-risk AI system or interrupt the system through a ‘stop’ button or a similar procedure.

Reason

There are several forms of bias that may be problematic. Examples include the designer’s or user’s own bias (social bias), bias as to whether the AI system deployed is a suitable solution to the problem (technical bias) and statistical forms of bias.

Amendment 21

Article 14, new paragraph after paragraph 5

Text proposed by the Commission	CoR amendment
	Any decision taken by AI systems as referred to in Annex III(5) (a) and (b) shall be subject to human intervention and shall be based on a diligent decision-making process. Human involvement in these decisions shall be guaranteed.

Reason

Article 14 deals only with human oversight of high-risk AI systems. For government decisions, it is important to stress that human intervention, contact and due process are to be ensured.

Amendment 22

Article 17(1) new subsections after m

Text proposed by the Commission

CoR amendment

Providers of high-risk AI systems shall put a quality management system in place that ensures compliance with this Regulation. That system shall be documented in a systematic and orderly manner in the form of written policies, procedures and instructions, and shall include at least the following aspects:

(a)	a strategy for regulatory compliance, including compliance with conformity assessment procedures and procedures for the management of modifications to the high-risk AI system;

(a)	a strategy for regulatory compliance, including compliance with conformity assessment procedures and procedures for the management of modifications to the high-risk AI system;

(b)	techniques, procedures and systematic actions to be used for the design, design control and design verification of the high-risk AI system;

(b)	techniques, procedures and systematic actions to be used for the design, design control and design verification of the high-risk AI system;

(c)	techniques, procedures and systematic actions to be used for the development, quality control and quality assurance of the high-risk AI system;

(c)	techniques, procedures and systematic actions to be used for the development, quality control and quality assurance of the high-risk AI system;

(d)	examination, test and validation procedures to be carried out before, during and after the development of the high-risk AI system, and the frequency with which they have to be carried out;

(d)	examination, test and validation procedures to be carried out before, during and after the development of the high-risk AI system, and the frequency with which they have to be carried out;

(e)	technical specifications, including standards, to be applied and, where the relevant harmonised standards are not applied in full, the means to be used to ensure that the high-risk AI system complies with the requirements set out in Chapter 2 of this Title;

(e)	technical specifications, including standards, to be applied and, where the relevant harmonised standards are not applied in full, the means to be used to ensure that the high-risk AI system complies with the requirements set out in Chapter 2 of this Title;

(f)

systems and procedures for data management, including data collection, data analysis, data labelling, data storage, data filtration, data mining, data aggregation, data retention and any other operation regarding the data that is performed before and for the purposes of the placing on the market or putting into service of high-risk AI systems;

(f)

(g)	the risk management system referred to in Article 9;

(g)	the risk management system referred to in Article 9;

(h)	the setting-up, implementation and maintenance of a post-market monitoring system, in accordance with Article 61;

(h)	the setting-up, implementation and maintenance of a post-market monitoring system, in accordance with Article 61;

(i)	procedures related to the reporting of serious incidents and of malfunctioning in accordance with Article 62;

(i)	procedures related to the reporting of serious incidents and of malfunctioning in accordance with Article 62;

(j)	the handling of communication with national competent authorities, competent authorities, including sectoral ones, providing or supporting the access to data, notified bodies, other operators, customers or other interested parties;

(j)	the handling of communication with national competent authorities, competent authorities, including sectoral ones, providing or supporting the access to data, notified bodies, other operators, customers or other interested parties;

(k)	systems and procedures for record keeping of all relevant documentation and information;

(k)	systems and procedures for record keeping of all relevant documentation and information;

(l)	resource management, including security of supply related measures;

(l)	resource management, including security of supply related measures;

(m)	an accountability framework setting out the responsibilities of the management and other staff with regard to all aspects listed in this paragraph.

(m)	an accountability framework setting out the responsibilities of the management and other staff with regard to all aspects listed in this paragraph;

(n)	measures to prevent unjustified discrimination based on sex, ethnic origin, religion or belief, disability, age, sexual orientation, or on any other grounds;

(o)	an explanation of how ethical issues have been taken into account when designing the high-risk AI system.

Reason

This addition stresses that inclusiveness and the fight against unjustified discrimination should be important elements of the quality system.

The system should comply with the ethical values that a user of the AI system wishes to establish for that system or that the provider may reasonably expect to be established for a high-risk AI system. The provider must be able to explain how it has taken this into account.

Amendment 23

Article 19(1)

Text proposed by the Commission

CoR amendment

Providers of high-risk AI systems shall ensure that their systems undergo the relevant conformity assessment procedure in accordance with Article 43, prior to their placing on the market or putting into service. Where the compliance of the AI systems with the requirements set out in Chapter 2 of this Title has been demonstrated following that conformity assessment, the providers shall draw up an EU declaration of conformity in accordance with Article 48 and affix the CE marking of conformity in accordance with Article 49.

Reason

In order to strengthen the ecosystem of trust in AI systems, providers of high-risk AI systems must be open. The public should therefore be able to check that conformity assessment has been properly established in accordance with the rules of the Regulation.

Amendment 24

Article 29, new paragraph after paragraph 6

Text proposed by the Commission

CoR amendment

Users of high-risk AI systems shall be responsible for making an ethical assessment before putting the system into use. They shall be able to explain the possible impact of the deployment of the technology on people and society. They shall specify their intended purpose in deploying the AI system, the overarching values, how those values have been weighted and whether or not they have been implemented in the system. They shall assess the actual impact of the system on people and society throughout the life cycle of the AI system.

Reason

Ethics is a broad concept. There are many ways of practising technology ethics, both in terms of theoretical underpinnings and practical methodologies, tools and design values. Values are matters that are considered important by certain (groups of) people; they may be more specific or more conceptual. It is important to keep open the range of possible moral values to be implemented and to continue evaluating the life cycle of the AI system.

Amendment 25

Article 52(1)

Text proposed by the Commission

CoR amendment

Providers shall ensure that AI systems intended to interact with natural persons are designed and developed in such a way that natural persons are informed that they are interacting with an AI system, unless this is obvious from the circumstances and the context of use . This obligation shall not apply to AI systems authorised by law to detect, prevent, investigate and prosecute criminal offences, unless those systems are available for the public to report a criminal offence.

Providers shall ensure that AI systems intended to interact with natural persons are designed and developed in such a way that natural persons are informed that they are interacting with an AI system. This obligation shall not apply to AI systems authorised by law to detect, prevent, investigate and prosecute criminal offences, unless those systems are available for the public to report a criminal offence. The scope of options and legal position of natural persons interacting with AI systems shall not be limited by this interaction.

Reason

Where technological tools are used as a medium for interaction with natural persons, there may be a risk of limiting the choices made by natural persons interacting with them. Natural persons should always be duly informed whenever they encounter AI systems and this should not be subject to interpretation of a given situation. Their rights should be guaranteed at all times in interactions with AI systems.

Amendment 26

Article 57(1)

Text proposed by the Commission	CoR amendment
The Board shall be composed of the national supervisory authorities, who shall be represented by the head or equivalent high-level official of that authority, and the European Data Protection Supervisor. Other national authorities may be invited to the meetings, where the issues discussed are of relevance for them.	The Board shall be composed of the national supervisory authorities, who shall be represented by the head or equivalent high-level official of that authority, and the European Data Protection Supervisor. Other national , regional and local authorities may be invited to the meetings, where the issues discussed are of relevance for them.

Reason

Local and regional authorities should be able to participate in the monitoring of AI systems and to report on their implementation on the ground.

Amendment 27

Article 58

Text proposed by the Commission

CoR amendment

When providing advice and assistance to the Commission in the context of Article 56(2), the Board shall in particular:

(a)	collect and share expertise and best practices among Member States;

(a)	collect and share expertise and best practices among Member States , regional and local authorities ;

(b)	contribute to uniform administrative practices in the Member States, including for the functioning of regulatory sandboxes referred to in Article 53;

(b)	contribute to uniform administrative practices in the Member States, including for the functioning of regulatory sandboxes referred to in Article 53;

(c)	issue opinions, recommendations or written contributions on matters related to the implementation of this Regulation, in particular

(c)	issue opinions, recommendations or written contributions on matters related to the implementation of this Regulation, in particular

i)	on technical specifications or existing standards regarding the requirements set out in Title III, Chapter 2,

ii)	on the use of harmonised standards or common specifications referred to in Articles 40 and 41,

iii)	on the preparation of guidance documents, including the guidelines concerning the setting of administrative fines referred to in Article 71.

i)	on technical specifications or existing standards regarding the requirements set out in Title III, Chapter 2,

ii)	on the use of harmonised standards or common specifications referred to in Articles 40 and 41,

iii)	on the preparation of guidance documents, including the guidelines concerning the setting of administrative fines referred to in Article 71.

Reason

Local and regional authorities are closest to local residents and economies. They should explicitly feature when it comes to sharing their knowledge.

Amendment 28

Article 59(1)

Text proposed by the Commission

CoR amendment

National competent authorities shall be established or designated by each Member State for the purpose of ensuring the application and implementation of this Regulation. National competent authorities shall be organised so as to safeguard the objectivity and impartiality of their activities and tasks. Local and regional authorities shall be empowered to carry out supervisory or enforcement tasks where deemed appropriate by the Member State.

Reason

In order to ensure the feasibility of the Regulation and the given monitoring and enforcement framework, the Member State should be able to entrust, where necessary and where possible, local and regional authorities with supervisory or enforcement tasks. In this context, local and regional authorities must receive support and training in order to be fully empowered to carry out supervisory or enforcement tasks.

Amendment 29

Article 69(3)

Text proposed by the Commission

CoR amendment

Codes of conduct may be drawn up by individual providers of AI systems or by organisations representing them or by both, including with the involvement of users and any interested stakeholders and their representative organisations. Codes of conduct may cover one or more AI systems taking into account the similarity of the intended purpose of the relevant systems.

Codes of conduct may be drawn up by national, local or regional authorities, by individual providers of AI systems or by organisations representing them or by both, including with the involvement of users and any interested stakeholders and their representative organisations. Codes of conduct may cover one or more AI systems taking into account the similarity of the intended purpose of the relevant systems.

Reason

National, local and regional authorities should be given the legal power to draw up codes of conduct for the AI systems they develop or use.

Amendment 30

ANNEX I — Artificial intelligence techniques and approaches referred to in Article 3, point 1

Text proposed by the Commission

CoR amendment

Having regard to the current state of science, AI includes the following techniques and methods:

(a)	Machine learning approaches, including supervised, unsupervised and reinforcement learning, using a wide variety of methods including deep learning;

(a)	Machine learning approaches, including supervised, unsupervised and reinforcement learning, using a wide variety of methods including deep learning;

(b)	Logic- and knowledge-based approaches, including knowledge representation, inductive (logic) programming, knowledge bases, inference and deductive engines, (symbolic) reasoning and expert systems;

(b)	Logic- and knowledge-based approaches, including knowledge representation, inductive (logic) programming, knowledge bases, inference and deductive engines, (symbolic) reasoning and expert systems;

(c)	Statistical approaches, Bayesian estimation, search and optimization methods.

(c)	Statistical approaches, Bayesian estimation, search and optimization methods.

Reason

The definition and list of AI techniques should be future-proof. The list of specific techniques and approaches used for the development of AI systems should not be an exhaustive list and it must be clear that it is based on the current scientific state of play.

Amendment 31

Annex III, 1-5

Text proposed by the Commission

CoR amendment

High-risk AI systems pursuant to Article 6(2) are the AI systems listed in any of the following areas:

1.	Biometric identification and categorisation of natural persons:

1.	Biometric identification and categorisation of natural persons:

(a)	AI systems intended to be used for the ‘real-time’ and ‘post’ remote biometric identification of natural persons;

(a)	AI systems intended to be used for the ‘real-time’ and ‘post’ remote biometric identification of natural persons;

2.	Management and operation of critical infrastructure:

2.	Management and operation of critical infrastructure:

(a)	AI systems intended to be used as safety components in the management and operation of road traffic and the supply of water, gas, heating and electricity.

(a)	AI systems intended to be used as safety components in the management and operation of road traffic and the supply of water, gas, heating and electricity , and telecommunications, water and internet infrastructure .

3.	Education and vocational training:

3.	Education and vocational training:

(a)	AI systems intended to be used for the purpose of determining access or assigning natural persons to educational and vocational training institutions;

(a)	AI systems intended to be used for the purpose of determining access or assigning natural persons to educational and vocational training institutions;

(b)	AI systems intended to be used for the purpose of assessing students in educational and vocational training institutions and for assessing participants in tests commonly required for admission to educational institutions.

(b)	AI systems intended to be used for the purpose of assessing students in educational and vocational training institutions and for assessing participants in tests commonly required for admission to educational institutions.

4.	Employment, workers management and access to self-employment:

4.	Employment, workers management and access to self-employment:

(a)	AI systems intended to be used for recruitment or selection of natural persons, notably for advertising vacancies, screening or filtering applications, evaluating candidates in the course of interviews or tests;

(a)	AI systems intended to be used for recruitment or selection of natural persons, notably for advertising vacancies, screening or filtering applications, evaluating candidates in the course of interviews or tests;

(b)	AI intended to be used for making decisions on promotion and termination of work-related contractual relationships, for task allocation and for monitoring and evaluating performance and behaviour of persons in such relationships.

(b)	AI intended to be used for making decisions on promotion and termination of work-related contractual relationships, for task allocation and for monitoring and evaluating performance and behaviour of persons in such relationships.

5.	Access to and enjoyment of essential private services and public services and benefits:

5.	Access to and enjoyment of essential private services and public services and benefits:

(a)	AI systems intended to be used by public authorities or on behalf of public authorities to evaluate the eligibility of natural persons for public assistance benefits and services, as well as to grant, reduce, revoke, or reclaim such benefits and services;

(a)	AI systems intended to be used by public authorities or on behalf of public authorities to evaluate and decide on the eligibility of natural persons for public assistance benefits and services, as well as to grant, reduce, revoke, or reclaim such benefits and services;

(b)	AI systems intended to be used to evaluate the creditworthiness of natural persons or establish their credit score, with the exception of AI systems put into service by small scale providers for their own use;

(b)	AI systems intended to be used to determine the creditworthiness of natural persons or their credit score, with the exception of AI systems put into service by small scale providers for their own use;

(c)	AI systems intended to be used to dispatch, or to establish priority in the dispatching of emergency first response services, including by firefighters and medical aid.

(c)	AI systems intended to be used to dispatch, or to establish priority in the dispatching of emergency first response services, including by firefighters and medical aid.

Reason

Telecommunications, water and internet infrastructure are an integral part of critical infrastructure.

The classification of high-risk systems hinges on whether such systems could pose a real risk to citizens. The mere analytical and theoretical assessment of residents’ claims to public services does not entail a high risk. Complementing ‘evaluate’ with ‘decide on’ emphasises that this risk effectively translates into decision-making, particularly for residents.

II. POLICY RECOMMENDATIONS

THE EUROPEAN COMMITTEE OF THE REGIONS

Ecosystem of excellence

stresses that the Commission’s goal of making the EU a global leader in the responsible and human-centred development of AI can only be achieved if local and regional authorities have a significant role. Local and regional authorities are best placed to help create an environment propitious to boosting investment in AI in the coming years and fostering trust in AI;

highlights that besides involving local and regional authorities, it is important to provide support and training in order to enhance their competencies in the field, especially as they may receive supervisory and enforcement roles;

notes that EU funding is becoming available for the development of AI, but points to the fragmented approach here, due to the diverse range of programmes, which increases the risk of fragmentation and overlap;

calls, therefore, on the Commission to develop and connect strong and pluralistic common data spaces in which societal use-cases can be resolved with the use of public and private data. This also requires alignment with legislative initiatives under the European Data Strategy.

Ecosystem of trust

regrets that the proposal for a regulation does not refer to local and regional authorities, despite the fact that the legal framework will apply to both public and private players;

notes, to this effect, that AI systems can play an important role in local and regional authorities’ interaction with citizens and service provision. Furthermore, AI systems have the potential, among other things, to improve public-sector efficiency and help local and regional authorities to respond to the adjustments that need to take place at local and regional level in the context of the green and digital transitions. It is therefore important that the experience gained by local and regional authorities is actively used in the ongoing revision of the Regulation;

calls for further clarification of the definitions of ‘provider’ and ‘user’, in particular in situations wherein companies, research institutions, public authorities and residents jointly develop and test AI systems in living labs. Due consideration should be given also to citizens or consumers affected by AI-driven decisions of systems employed by professional users;

stresses the need for prior consultation of the relevant local and regional authorities where AI systems are to be used for the real-time remote biometric identification of natural persons in publicly accessible spaces for law enforcement purposes;

welcomes the European Commission public consultation on the adaptation of civil liability rules to the specific challenges of digital age and artificial intelligence (1) and expects that this will result in an updated framework aimed at ensuring consumer redress for damage caused by AI applications;

10.

wonders why AI systems used in democratic processes such as elections are not on the list of high-risk AI systems;

11.

calls for high-risk AI systems to be subject to the same transparency and information requirements for natural persons as currently apply to users;

12.

highlights the major human rights risks and implications associated with the use of social classification;

13.

is highly sceptical here of the two scenarios set out in the Regulation (2) as grounds for determining when a social classification leads to detrimental or unfavourable treatment of individuals or groups of people, as it is extremely difficult to establish the existence of such grounds. In this context, the Committee urges for the clear formulation of strong safeguards in order to ensure that the ban on social classification practices is not circumvented;

14.

notes the fact that the recitals of the Regulation address the risks to which individuals are exposed as a result of interacting with high-risk AI systems in the context of, inter alia, education, training, employment, human resource management, access to self-employment and access to and receipt of certain essential private and public services;

15.

calls on the Commission to consider in greater depth the high-risk classification of AI systems intended for use by public authorities (3);

16.

calls for an authority to provide substantial ex ante advice on the interpretation of provisions in the Regulation, also in relation to the General Data Protection Regulation. This will enhance legal certainty and reduce the costs of designing and implementing AI systems;

17.

underlines to this effect the importance of clarity in the formulation of the Regulation, which is instrumental in building an ecosystem of trust and lifting legal uncertainty surrounding the development and use of AI systems. This would avoid misinterpretations of the proposed requirements and minimise the risks of subsequent mismanagement of AI applications, thus maximising the regulation’s effectiveness and credibility of sanctions. At the same time, and in line with the European Commission’s better regulation agenda, early detection and elimination of potential overlaps and/or conflicts with existing rules is of key importance;

18.

notes that many local and regional authorities are using the same AI systems for similar tasks. The systems are designed by private companies in the vast majority of cases;

19.

notes that the proposal for a regulation does not stand alone when it comes to guaranteeing citizens' rights and that it must be seen in the context of existing legislation. Member States are therefore encouraged to ensure that, on an ongoing basis, they take the necessary administrative measures to enable them to deal with the opportunities and risks posed by the use of AI in the public sector;

20.

notes that this means that in conformity assessment, European and national rules are being interpreted by companies and notified bodies, and that this is having an impact on the practices of local and regional authorities using these AI systems. This makes it difficult to determine the extent to which local and regional policy is taken into account in these AI systems. Therefore, the Committee attention to the specific needs of local and regional authorities and to the fact that a ‘one-size-fits-all’ approach may undermine the effectiveness of AI systems in responding to those needs. Besides, the Committee suggests that Member States should be empowered to regulate high-risk AI systems in the face of overriding and justified reasons of public interest;

21.

calls, in this regard, for conformity assessments to be transparent and accessible to the public. Moreover, local and regional authorities should also be able to participate in the monitoring of AI systems, report on their implementation on the ground and make a formal contribution to the European Commission's evaluation of the application of the regulation;

22.

stresses that the application of the regulatory sandbox requires the right legal, methodological and ethical conditions to be created to enable the development of technology and legislation and the evaluation of legislation. Clear criteria for allowing companies to participate in the regulatory sandbox should be established. To ensure that consumer organisations can enforce the provisions of the Artificial Intelligence Act, the latter must be added to Annex I of the European Directive on representative actions for the protection of the collective interests of consumers ((EU) 2020/1828);

Information campaigns

23.

stresses the importance of public campaigns, so that the general public is informed about and familiarised with the existence and usefulness of AI systems as well as potential risks. Further underlines the urgent need for comprehensive information for consumers on Artificial Intelligence / machine-driven decision-making. Asks to this effect that the European Commission provide funding for such campaigns;

Administrative burden

24.

expresses its concern about the potential administrative burden of the proposed Regulation. The administrative burden can hinder small and medium-sized enterprises and local and regional authorities in promoting innovation and deploying AI systems (4);

Proportionality and subsidiarity

25.

considers that the draft regulation complies with the requirements of the proportionality and subsidiarity principles. The added value of EU action in this field and the appropriateness of the legal bases chosen by the Commission are clear and consistent. The impact assessment included a distinct section on subsidiarity. Moreover, no national parliament issued a reasoned opinion on non-compliance with the principle of subsidiarity by the deadline for submissions, set on 2 September 2021.

Brussels, 2 December 2021.

The President of the European Committee of the Regions

Apostolos TZITZIKOSTAS

([62]) Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States (OJ L 190, 18.7.2002, p. 1).

(1) https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12979-Civil-liability-adapting-liability-rules-to-the-digital-age-and-artificial-intelligence/public-consultation_en

(2) Article 5(1)(c)

(3) Annex III(5)(a)

(4) A recent study (Study to Support an Impact Assessment of Regulatory Requirements for Artificial Intelligence in Europe, p. 12), supported by the European Commission, estimated that, on the basis of reasonable assumptions, obtaining certification for an AI system could cost on average between EUR 16 800 and EUR 23 000, roughly equivalent to 10-14 % of development costs.

		ISSN 1977-091X
Official Journal of the European Union		C 97

English edition	Information and Notices	Volume 65 28 February 2022

Contents		page
	I Resolutions, recommendations and opinions
	RESOLUTIONS
	Committee of the Regions
	Interactio - Hybrid - 147th CoR plenary session, 1.12.2021-2.12.2021
2022/C 97/01	Resolution on the 2022 Work Programme of the European Commission and of the European Committee of the Regions political priorities for 2022	1
2022/C 97/02	Resolution of the European Committee of the Regions on the proposal for a European Year of Youth	7
	OPINIONS
	Committee of the Regions
	Interactio - Hybrid - 147th CoR plenary session, 1.12.2021-2.12.2021
2022/C 97/03	Opinion of the European Committee of the Regions — Better regulation: Joining forces to make better laws	10
2022/C 97/04	Opinion of the European Committee of the Regions — Europe’s Beating Cancer Plan	17
2022/C 97/05	Opinion of the European Committee of the Regions — Implementation of the Recovery and Resilience Facility	21
2022/C 97/06	Opinion of the European Committee of the Regions — Eradicating homelessness in the European Union: the local and regional perspective	26
2022/C 97/07	Opinion of the European Committee of the Regions — EU action plan for organic farming	30
2022/C 97/08	Opinion of the European Committee of the Regions — Sustainable blue economy and aquaculture	36
2022/C 97/09	Opinion of the European Committee of the Regions — Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery	43
2022/C 97/10	Opinion of the European Committee of the Regions — European Commission Report on Competition Policy in 2020	50
2022/C 97/11	Opinion of the European Committee of the Regions — The gender dimension of structural and cohesion funds 2021-2027, with a focus on the preparation of the operational programmes	56

	III Preparatory acts
	Committee of the Regions
	Interactio - Hybrid - 147th CoR plenary session, 1.12.2021-2.12.2021
2022/C 97/12	Opinion of the European Committee of the Regions — European approach to artificial intelligence — Artificial Intelligence Act (revised opinion)	60