Resolution of the European Economic and Social Committee on ‘Involvement of Organised Civil Society in the National Recovery and Resilience Plans — How can we improve it?’

(2022/C 323/01)

At its plenary session of 18 and 19 May 2022 (meeting of 18 May), the European Economic and Social Committee adopted the following resolution by 197 votes with 4 abstentions.

1.   Introduction

1.1.

In its February 2021 resolution (1), the European Economic and Social Committee (EESC) assessed the participation, by consultation, of social partners and civil society organisations in the design of National Recovery and Resilience Plans (NRRPs), as well as the quality of their involvement. These plans were submitted by Member States to the European Commission (EC) in order to benefit from the support of the Recovery and Resilience Facility (RRF), the centrepiece of the temporary recovery instrument NextGenerationEU (NGEU). Despite Article 18(4)(q) of the RRF Regulation (2), the main conclusion of the EESC was that the involvement of organised civil society (OCS) was largely insufficient in a majority of Member States. Furthermore, it appeared that consultations, often initiated by social partners and civil society organisations (CSOs), were generally viewed as mere formalities without any real capacity to influence the content of the plans. The Committee urged the European institutions and national governments to correct this situation in the implementation, monitoring and adjustment of the plans. In addition, the EESC continues to stress the importance of organised civil society also being better prepared to respond to this need to increase its involvement.

1.2.

In the aforementioned resolution and in various opinions, the EESC has also expressed its agreement with the investment objectives and the guidelines for the reforms of the RRF, which should aim at achieving a change of production model towards a climate-neutral and digitalised economy, carried out through fair transition processes that ensure the protection of workers and the regions concerned, the redeployment of workers and the regeneration and renewal of the productive fabric. In the Committee’s view, the investments and reforms set out in the NRRPs should promote the improvement of business productivity and economy in the Member States, the strengthening of the innovative industrial fabric through support for SMEs and social economy enterprises, and the enhancement of social cohesion, which can also be achieved through the development and implementation of the European Pillar of Social Rights.

1.3.

Just as the European economy was recovering from the economic recession caused by the COVID-19 pandemic and the public health measures taken to combat it, and seeking to overcome the supply distortions and inflationary pressures that the pandemic had produced in the global economy, an unexpected external shock created a new political and economic scenario full of difficulties and risks: the invasion of Ukraine by the army of the Russian Federation. The EESC has strongly condemned this as a severe violation of international rules and agreements in force (3). It threatens European and global security, is causing enormous human suffering, material destruction and environmental damage, and has radically changed the European and global economic framework.

1.4.

In March, year-on-year inflation in the euro area reached 7,5 %, the highest since the adoption of the euro, and energy price inflation reached 44,7 %. Moreover, a prolonged war in Ukraine could lead to shortages of fossil fuels, on which we still depend, and of other raw materials and food products, making the development of prices and growth unpredictable, with huge impact on poorest countries, i.e. in Africa and Middle East. Stagflation is a real risk for the economies of Europe and other regions of the world. The objectives of the measures and instruments of the Green Deal, which aims at climate-neutrality for Europe by 2050, may also be affected. The geopolitical implications of the war will affect the entire food value chain, industry, defence and trade in Europe and globally, the corresponding EU policies in these and other fields, and also the ongoing reflection on the Future of Europe and the levels of integration we collectively want to achieve as European nations and citizens. A revision of EU’s financial tools taking should therefore be considered in the light of this new scenario. Besides, the situation created by the war in Ukraine will affect the implementation of the NRRPs, which will need to be carried out in a manner consistent with the new economic policy objectives that will be set to address the risks and challenges of the new situation. These worsening scenarios imply a stronger and more united European ‘Whatever it takes’.

1.5.

Through this resolution, the EESC aims to assess whether Member States have addressed the identified shortcomings with regards to the involvement of social partners and civil society organisations in the preparation of the NRRPs, and how their participation in the implementation of the plans is developing. To this end, the EESC’s European Semester Group has collected the views of the OCS through a questionnaire sent to the members of the group. The questionnaire includes 21 questions on social partner and CSOs involvement regarding the content and the implementation of NRRPs, and the impact of the green and digital transition on the economy and society of Member States. In total, responses to the questionnaire were received from 21Member States (4). In addition, this consultation was also carried out via round tables, organised jointly with the OSC and/or the national economic and social councils, in seven Member States between autumn 2021 and the end of March 2022.

2.   Method

2.1.

The data and information required for this report were collected between October 2021 and April 2022. In total, 23 national contributions (responses to the questionnaire and/or the holding of a round table) were received. Consultations took place on the basis of members’ own knowledge, and involved social partners and CSOs. In some countries, national economic and social councils or equivalent bodies were involved, and in others, government representatives were also consulted.

2.2.

Due to various reasons, not all the NRRPs have been approved by the European Commission, while some Member State had not yet moved beyond the implementation phase during our consultation. Therefore, some Member States could only partially or not at all respond to the questionnaire. In order to complement the missing information, this resolution also draws upon external sources, such as publications from think tanks, comparative research studies and national debates. Besides, the questionnaire was also sent out to a few European civil society organisations, parts of the EESC Liaison Group (5) and other representatives of the three groups of the EESC. The additional information, aimed at drawing a complete picture of the situation, is clearly distinguished in this resolution (6).

2.3.

The 21 questions that formed the basis for the consultations are grouped into the following four sections: — Section I: What is the opinion of organised civil society on the content of the plans, their investment objectives and the proposed reforms? — Section II: How is the implementation of the plans, their investments and the reforms progressing? — Section III: Potential impact of NRRPs on the economy and society of Member States. — Section IV: Involvement of social partners and civil society organisations in the implementation of the plan.

3.   Observations on the results of the consultations

3.1.   Section I: What is the opinion of organised civil society on the content of the plans, their investment objectives and the proposed reforms?

3.1.1.

With regard to the inclusion of proposals from organised civil society in the content of the NRRPs, the European Commission highlighted, in its analysis of the plans the specific proposals from stakeholders that are effectively reflected, for example, in the plans of Czechia (7), Germany (8), Cyprus (9), Austria (10), Portugal (11), or Slovakia (12). Latvia published, alongside its NRRP, the suggestions from partners, and included some in the plan. The consultations carried out in the context of this resolution showed that while a majority of civil society organisations in the Member States believe that the plan will be a success and support its green, digital and social objectives, it was however frequently mentioned that the social dimension is relatively undeveloped. Moreover, concerns were raised about the capacity of the Member States to manage RRF funds or to do so within an appropriate time frame, which may hinder the success of the plan. This is particularly true for the largest beneficiaries of the funds. The assessment of the plan’s capacity to build economic resilience is mixed. In particular, countries that receive relatively little funding do not expect the plan to contribute to long-term resilience of their economy. Finally, OCS largely regrets that its views on the priorities to be reflected in the plan were not sufficiently taken into account in the final version. OCS also repeatedly pointed out that many of the reforms contained in the NRRP were already envisaged in previous national reform programmes, independently of the RRF and its investment and reform objectives, which left little leeway for OCS to influence the content of the plan.

3.2.   Section II: How is the implementation of the plans, their investments and the reforms progressing?

3.2.1.

On 15 December 2021, the Commission launched the RRF Scoreboard (13), as provided for in the RRF Regulation. It gives an overview of how the implementation of the RRF and of the national RRPs is progressing, but it does not reflect the extent to which Member States are effectively channelling funds to finance their projects. Therefore, some Member States, such as Austria, Italy, Latvia, Portugal, Slovakia and Spain, disclose on their websites some information on how funds are being spend and measures implemented.

3.2.2.

The majority of the stakeholders consulted by early April 2022 indicated that it was still too early to provide a comprehensive overview of the implementation of the plan and their involvement in it. In some Member States, this is partly due to a slow implementation process or delay in the implementation and enforcement of the plan. However, OCS states that it has already expressed its views on the (potential) challenges that would arise during the implementation phase. In this respect, one of the main bottlenecks that was identified is the administrative capacity of the Member States, particularly at regional and local levels (as also underlined in the CEPS reflection paper published in March 2022 (14)). This is especially the case for the largest beneficiaries of the RRF funds. For this reason, many social partners and civil society organisations insist on greater involvement of local and regional communities. However, most stakeholders believe that the participation of OSC in the implementation of the NRRP at regional and local levels is ineffective. A second frequently mentioned bottleneck is the lack of information exchange between the national government and the social partners and civil society organisations, which could severely hamper their involvement in the implementation and monitoring phase.

3.2.3.

Despite these identified challenges, according to an in-depth analysis of the EPRS published in March 2022 (15), on the one hand, several Member States, for example, Belgium, Cyprus, Greece, Estonia, Finland, have made a general commitment to continue to engage with the social partners and civil society organisations during the implementation phase of the NRRP, and on the other hand, other countries, such as the Czechia, France, Italy, Portugal referred to a specific committee/body that will be responsible, among other things, for monitoring and supervising the achievement of progress, compliance with the milestones and objectives of the different strands, publicity activities and evaluation of the implementation reports.

3.3.   Section III: Potential impact of NRRPs on the economy and society of Member States

3.3.1.

According a study conducted by the European Parliament Research Service (16), the RRF is expected to ‘trigger public investments, with the focus to increase real output, and enabling additional fiscal space, which should in turn allow already planned national expenditures based on the additionally principle’. The RRF would, on the one hand, lead to a substantial increase in GDP in the short and medium term through public and private investment demand, thus building up the capital stock which is necessary to generate, on the other hand, higher GDP in the medium and long term through employment growth, higher productivity and wages, and a positive output effect.

3.3.2.

The views of social partners and CSOs on the potential impacts of the NRRP on their country’s economy and society are rather fragmented. This perception varies notably according to the size the amounts of RRF funding allocated to each Member State. Indeed, in Member States that receive large amounts, the impact is perceived more positively than in Member States that receive relatively small amounts in relation to the size of their economy. Despite these disparities, the OCS generally views the impact of RRF funds and NRRP investments on reforms positively, as they provide an impetus for achieving the objectives of the twin transition.

3.4.   Section IV: Involvement of social partners and civil society organisations in the implementation of the plan

3.4.1.

The participation of organised civil society in the implementation phase of the plan, in the few Member States where it has actually started, has taken place in different forms. The information provided by the stakeholders identified four categories of involvement: (1) Statutory; (2) through special NRRP working groups; (3) through stakeholder meetings; (4) no specific form of involvement planned. Compared to the conclusions drawn in 2021 about the obvious lack of involvement of OCS in the drafting phase of the plan, its involvement in the implementation phase is assessed more positively, although it is still far from satisfactory in all Member States. Indeed, it was pointed out that in some countries, initiatives specifically designed to involve OCS in the implementation of the NRRP are being promoted. Furthermore, with regard to the potential difference in involvement between the social partners, on the one hand, and civil society organisations, on the other, it appears, in general, that in the Member States there is either no involvement of either party or the involvement of both parties, without distinction. However, stakeholders in three (Austria, Greece and Portugal) of the 20 Member States consulted reported that there is a significant distinction in the involvement of these parties. In these countries, the social partners are more involved than CSOs.

3.4.2.

In this regard, a BusinessEurope survey (17) conducted in early 2022 showed that social partners are increasingly involved in the recovery plans, and this is reflected in a dissatisfaction rate of only 30 % regarding their role so far in the implementation of the plan, compared to 71 % last year regarding their role in the design of the plan. Besides, as underlined in Eurofound’s report (18) of March 2022, following the adoption of the plans, social partners stressed the importance of the country reports issued by the European Commission in the context of the European Semester (19), which framed the discussion on the implementation of national reforms and investments, allowing social partners to exchange ideas and contribute to the NRRPs using a sound baseline.

4.   Conclusions

4.1.

In general, the final content of the plans is evaluated positively. In some cases, comments of OCS were taken into account in the finalised versions of the NRRPs. Overall, OCS supports the green, digital and social objectives of the NRRPs. Concerning the contribution to the green and digital transitions, positive views were expressed even though the impact of the NRRP is evaluated to be limited except for a few cases. Regrettably, it was often expressed that the social dimension of the plan was relatively underdeveloped despite the importance of this for the resilience aspect. The view was expressed that the transition requires more investment, especially given the current crisis. Despite the perceived improvements in some Member States, it remains difficult to answer conclusively whether participation in the implementation phase has improved, not least because the implementation of many NRRPs has been significantly delayed in many Member States. However, the social partners and civil society organisations stressed that the institutional social dialogue had improved in this phase. Indeed, for example in Spain, the social partners recognise that the framework of the RRF and the NRRP has contributed to important agreements on labour and pension reforms through tripartite social dialogue.

4.2.

Despite the delay in the implementation of many NRRPs, good practices were identified in some Member States with regard to the implementation and monitoring of NRRPs. For example, in Austria, France, Luxembourg, Spain and Sweden close and constructive cooperation between social partners, civil society organisations and the government, strengthened by transparency and ongoing dialogue, is an important tool for their involvement in the RRF. Moreover, in Czechia, Estonia, Finland, Italy and Spain, an RRF campaign website or government portal has been implemented with transparent information accessible to the public. In Italy, which is the main beneficiary of RRF funds, a Permanent Round Table Partnership (Tavolo permanente del partenariato) was established in November 2021 at government level, with specific working groups that critically monitor the direction and quality of NRRP implementation in terms of citizens’ expectations. This body is chaired by the Italian prime minister and coordinated by the president of the National Council for Economics and Labour (CNEL). In addition, a specific structured agreement was signed with the National Association of Italian Municipalities (ANCI) for developing dialogue and structured assistance in the implementation phases at local level relating to matters of their concern. Similarly, involvement of municipalities and other local actors is being encouraged in Italy with regard to administrative capacity. In Croatia, OCS is involved in the working groups preparing tenders for the implementation of the NRRP, and also in agreements with the Ministry of Tourism concerning measures under the plan for the tourism sector. Finally, in Portugal, OCS is involved in monitoring the implementation of the NRRP notably by analysing the results of the plan and the impact assessment reports. In this respect, a monitoring body, the National Monitoring Committee (CNA), has been created and includes, among others, representatives of social partners, universities and the social sector. These exchanges of good practices are encouraged and serve as an example for the other Member States.

4.3.

In many Member States, there are calls for better involvement of social partners and civil society organisations in the implementation phase of the NRRPs. Organised civil society calls for more transparency in the implementation and monitoring of the plans and asks that information be made publicly available and that dialogues around the NRRP with all relevant stakeholders be further encouraged. If this is lacking, there is a likelihood that key challenges would not be addressed correctly. Finally, in the majority of Member States, it remains to be seen whether the participation of OCS will be significantly improved during the implementation and monitoring phases of the plans, which are currently still too slow or delayed.

4.4.

The Committee calls on the national governments of those Member States where the involvement of the social partners and civil society organisations (20) is still insufficient to remedy this situation as a matter of urgency and to comply with the rules laid down in the RRF Regulation. It calls on the Commission and the European Parliament to enforce compliance with the rules in force.

4.5.

Notwithstanding the above, the EESC believes that the lack of effective and quality participation of organised civil society in the economic governance of the EU will not be resolved in a satisfactory manner until there is a reform of the European Semester which guarantees this via a directive or a regulation. The Committee draws attention to the fact that proper participation takes place when, in formal consultation processes based on legal rules and public and transparent procedures, civil society organisations are duly informed in writing, given sufficient time to analyse the government’s proposals and draft their own proposals, and the inclusion or rejection of these proposals is accompanied by a justification contained in public minutes or documents.

4.6.

The Ukraine war and its immediate risks to the European and global economy do not call into question the objectives of the NRRPs but, on the contrary, in the Committee’s view, should encourage European institutions and national governments to speed up the implementation and enforcement of the plans, as well as the associated investments and reforms, and to push forward the EU Green Deal, in order to sustain growth and accelerate the decarbonisation of the energy system and the green strategic autonomy of the European Union. At the same time, the EU must do whatever is necessary to help the government and people of Ukraine, to provide adequate care for the millions of people who have been forced to seek refuge in EU countries, and to assist the most directly affected Member States in various sectors of their economies.

4.7.

Prior to the outbreak of the war, the total amount of national and NGEU funds was insufficient to achieve the objectives of the Green Deal and deliver the just and inclusive energy transition required, in particular the objective of replacing fossil fuels with clean and renewable energy production sources in line with the recommendations of the Intergovernmental Panel on Climate Change (IPCC). In addition, there is now the pressing geopolitical need to end to the EU’s energy dependence on Russia. Moreover, it will lead to a strong increase in security and defence investments, which will weigh heavily on public budgets.

4.8.

The EESC therefore proposes: a) the urgent adoption of a new EU Energy Strategy that promotes an effective connection of its energy networks, rapid replacement of fossil fuels with renewable energy sources, high energy efficiency and reduction of energy demand; b) considering the possibility of redirecting NRRP investments towards greater investment in clean and renewable energy while ensuring the strategic autonomy of the EU; c) that all Member States use their share of NRRP funds to finance new programmes in this direction, such as programmes for sustainable energy investments; d) that in the short term, European authorities and national governments should take all necessary measures, in both the production and consumption areas, to protect economies from the cascading effects of the war on the EU economy, which is severely disrupting food, energy and financial markets, with rising energy prices and supply chain disruptions; e) assessing the creation of a new financial investment instrument and supporting the European Commission’s proposal contained in the REpowerEU Communication to accelerate the restructuring of the energy sector, in order to provide a more secure and sustainable strategic autonomy of the EU. To this end, the most appropriate model to be identified should be used, based on the best practices and results of the European Fund for Strategic Investments (EFSI) and the RRF.

4.9.

The conclusions of the UN IPCC 2022 are a further serious reminder of the inadequacies in the fight against climate change. The EESC calls on the European authorities to take these into account when adopting energy, industrial and economic policy initiatives.

4.10.

The EESC is aware of the enormous difficulties involved, in the current circumstances, in implementing an economic policy that simultaneously aims to reduce inflation and ensure economic growth, employment and the sustainability of public finances in the medium and long term. The European authorities, national governments and the ECB must act in close coordination and take the necessary steps to ensure that the withdrawal of expansionary monetary and fiscal policies is carried out in such a way as not to lead to a new recession. The EESC believes that the reform of the rules of the Stability and Growth Pact should be undertaken by setting realistic deficit and debt targets, incorporating the golden rule of investment, and establishing flexible paths, according on the situation of each country, to achieving the targets for reducing public debt levels.

4.11.

Education and lifelong learning efforts for workers and the population in general are essential to ensure fair and inclusive green and digital transitions. Priority should be given to training and vocational guidance for workers affected by restructuring processes, but also to anticipating the needs arising from the different types of technological changes in the productive apparatus. Digitisation requires special attention in the case of people who, because of their age or other circumstances, have more difficulties in accessing digitised services. This part of the population must be guaranteed access to training and special support services to help them access all types of benefits and services.

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(1)  EESC Resolution on Involvement of Organised Civil Society in the National Recovery and Resilience Plans — What works and what does not? (OJ C 155, 30.4.2021, p. 1).

(2)  Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17).

(3)  War in Ukraine and its economic, social and environmental impact (OJ C 290, 29.7.2022, p. 1).

(4)  NB: Before 1 April 2022, the Commission endorsed 23 plans (including the Swedish plan in late March 2022 that still needs to be approved by the Council). In early April, the Commission endorsed also the Bulgarian plan that, likewise, still needs to be approved by the Council (i.e. 24 plans endorsed so far by the Commission and 22 approved so far by the Council).

(5)  Liaison Group with European civil society organisations and networks.

(6)  The reports from the various Member States are analysed in the annex to this resolution. All this material is available on the Committee's website.

(7)  SWD(2021) 211 final.

(8)  SWD(2021) 163 final/2.

(9)  SWD(2021) 196 final.

(10)  SWD(2021) 160 final.

(11)  SWD(2021) 146 final.

(12)  SWD(2021) 161 final.

(13)  Recovery and Resilience Scoreboard.

(14)  Comparing and assessing recovery and resilience plans — Second edition, Centre for European Policy Studies (CEPS).

(15)  Recovery and Resilience Plans: stakeholders’ views.

(16)  Recovery and Resilience Dialogue with the European Commission, 7 March 2022.

(17)  BusinessEurope Reform Barometer 2022.

(18)  Involvement of social partners in the national recovery and resilience plans.

(19)  Report on the European Semester for economic policy coordination: employment and social aspects in the annual sustainable growth survey 2022.

(20)  And other relevant stakeholders, for instance youth organisations as the EESC notably underlined in its opinion on How to guarantee decent work for young people and ensure the inclusion of NEETs through the proper elaboration of National Recovery Plans (OJ C 152, 6.4.2022, p. 27 ).

Opinion of the European Economic and Social Committee on State aid rules applicable to health and social services — SGEI in a post-pandemic scenario. Thoughts and proposals on the Commission evaluation to amend the 2012 legislative package

(own-initiative opinion)

(2022/C 323/02)

Rapporteur:

Giuseppe GUERINI

Plenary Assembly decision	20.1.2022
Legal basis	Rule 32(2) of the Rules of Procedure
	Own-initiative opinion
Section responsible	Single Market, Production and Consumption
Adopted in section	5.5.2022
Adopted at plenary	19.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	221/0/5

1.   Conclusions and recommendations

1.1.

The European Economic and Social Committee (EESC) considers that various health and social services such as care (including home care), helping disadvantaged individuals and those with disabilities to break back into the labour market, childcare and social housing are fundamental when it comes to guaranteeing social cohesion in the ongoing period of post-pandemic recovery, humanitarian crisis and international tensions. European rules on state aid for these services are therefore fundamental.

1.2.

The EESC strongly endorses the Commission’s decision, in its evaluation of the current rules (1), to consider health and social services as a subgroup with autonomous features within the broader framework of services of general economic interest (SGEI).

1.3.

The EESC would emphasise that the 2012 Almunia package laying down rules on state aid applying to SGEI was definitely useful in that it updated and simplified the previous rules which had been approved in 2005. The regulatory approach taken by this package should therefore be retained in future, simply updating certain matters, should the Commission decide to amend the current rules following the ongoing evaluation.

1.4.

The EESC would point out that within individual Member States, health services and almost all social care services are organised by region, county, town or even by group of towns in the case of larger urban areas. This means that user mobility between regions or counties in a given country is very limited; cross-border mobility of users is therefore a non-factor. There is no cross-border relevance, and so Article 107 TFEU on state aid does not apply to health and social services.

1.5.

The EESC would point out that national administrations are struggling to develop specific expertise on the entrustment acts which are a prerequisite for applying Commission Decision 2012/21/EU (2) (Exemption Decision on public service compensation) and Commission Regulation (EU) No 360/2012 (3) on de minimis aid for SGEI. It would therefore be very useful if the Commission could set up a portal giving access to examples of legitimate entrustment acts for the various types of health and social services.

1.6.

The EESC encourages the exchange of good practices between Member States with similar legal traditions on the application of state aid rules to health and social services, with a view to encouraging more effective use of the discretion that Protocol No 26 to the TFEU accords to national administrations when it comes to establishing and implementing SGEI at local level.

1.7.

The EESC notes that the rule laid down in Decision 2012/21/EU, whereby public service compensation cannot exceed what is necessary to cover the costs except for ‘a reasonable profit’, requires further clarification: i) on how this reasonable profit should be determined in relation to the capital used to provide the service, considering the operating risk; ii) on how to establish the fixed and structural costs which are part of SGEI management costs; and iii) on the extent to which the distinctive nature of the services and organisational models typical of social economy entities could have a greater bearing when they manage and deliver services of general economic interest.

1.8.

The EESC believes that health and social services should be eligible for a de minimis ceiling over three fiscal years which is higher than the ceiling for SGEI generally allowed under Regulation (EU) No 360/2012 (EUR 500 000), as was clearly pointed out during the Commission’s public consultation. The role played by health and social services in terms of social cohesion would justify a higher ceiling than that currently in place.

2.   Introduction and background

2.1.

The topic of state aid for undertakings providing services of general economic interest and, for the purposes of this opinion, for organisations active in the narrower field of health and social services, is governed by the 2012 Almunia legislative package. This package replaced and updated the previous legal framework which dated back to 2005 (‘Monti-Kroes package’).

2.2.

The Almunia package contains the following pieces of legislation: — Regulation (EU) No 360/2012 on the application of Articles 107 and 108 of the TFEU to de minimis aid granted to undertakings providing services of general economic interest; — Decision 2012/21/EU on the application of Article 106(2) of the TFEU to state aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest; — Communication from the Commission on the application of the European Union state aid rules to compensation granted for the provision of services of general economic interest (4); — Communication from the Commission on the European Union framework for state aid in the form of public service compensation (2011) (5).

2.3.

The relevant legal framework has therefore been in place for almost a decade and, as the Commission points out, the Member States have made considerable use of it ever since it came into force, despite various operational problems which could justify further action by the EU legislator, not least given the considerable amount of time that has passed since the framework was approved.

2.4.

On this point, the Commission launched a broad stakeholder consultation to verify whether the current rules are effective and efficient, provide added value and are fit for purpose, with particular emphasis on health and social services.

2.5.

The consultation ran from 31 July 2019 to 14 December 2019, in the form of a questionnaire prepared by the Commission. Fifty-one responses were sent in, from undertakings, confederations, trade unions, NGOs, private individuals and public administrations.

2.6.

Through this own-initiative opinion and in its capacity as a representative body of Europe’s economy and civil society, the EESC seeks to bring to the Commission’s attention a number of issues relating to applying the rules on state aid in the field of health and social services, with a view to the possible future revision of state aid rules targeting these sectors.

3.   General comments

3.1.

The EESC acknowledges that devising rules governing state aid in the field of social and health services is a very complex process for the EU legislator, given the competing needs to strike a tricky balance between public support for activities contributing to objectives which are in the general interest and to safeguard free, unimpeded competition in the internal market. European regulation of state aid should also enable the public investment necessary for the development of social and health services infrastructure which will contribute to the objectives of the European Pillar of Social Rights.

3.2.

The EESC strongly endorses the Commission’s decision to consider health and social services as a subgroup with autonomous features within the broader framework of SGEI, due to the specific characteristics of these services and the unique objectives that those services aim to achieve. In the document on the evaluation of the current rules, the Commission in fact notes that ‘From a State aid perspective, health and social services form a subgroup of services of general (economic) interest’ (6).

3.3.

The EESC would emphasise that the 2012 Almunia package laying down rules on state aid applying to SGEI was definitely useful in that it updated the previous rules which had been approved in 2005, reducing the administrative and regulatory burden on national authorities intending to finance SGEI. The regulatory approach taken by this package should therefore be retained in future, simply updating and clarifying certain matters.

3.4.

The EESC considers that various health and social services such as care (including home care), helping disadvantaged individuals and those with disabilities to break back into the labour market, childcare and social housing are fundamental when it comes to guaranteeing social cohesion in the internal market, and are shared values of the Member States, as laid down in Protocol No 26 to the TFEU. These services are still more strategic and important in the ongoing period of post-pandemic recovery, international tensions and rising populism in the Member States.

3.5.

The EESC would point out that health and social services are, in some cases, provided at national level by means of non-economic activities which do not come under EU rules on state aid. At the same time, where these services are provided by means of economic activities, those activities have only minor cross-border relevance: they are largely rooted in local communities and are instrumental in ensuring social cohesion within a given country.

3.6.

The EESC would point out that health and social services are often provided by means of non-economic activities, in which case they do not come under EU rules on state aid (Article 107 TFEU). Moreover, even when they are provided in a market context, health and social services have an essentially local dimension with no real demand-side cross-border relevance. The local dimension is even more evident when social and health services are managed by social economy entities with the involvement of local communities, with a view to social cohesion and in the public interest.

3.7.

However, Commission practice and European case-law consider that the cross-border relevance of health and social services cannot in principle be excluded, due to the potential distortion of cross-border investment. While understanding the reasons underpinning this approach which seeks to fully safeguard the freedom of movement enshrined in the Treaties, the EESC would urge the Commission to provide appropriate guidelines on the cross-border relevance of health and social services. Specific, flexible provisions need to be devised for these services within the broader debate on the concept of cross-border relevance, which is itself an element of the concept of state aid as laid down in Article 107 TFEU.

3.8.

The EESC notes that even when social and health services do have a cross-border dimension, as in the case of the EU’s 37 cross-border urban areas coming under the Cross-Border Healthcare Directive (7), this is on the basis of physical proximity between border areas and in accordance with territorial subsidiarity principles. Therefore, more state aid would not substantially undermine cross-border competition between businesses.

4.   Specific comments

4.1.

The EESC would point out that despite the useful clarity and simplification provided by the 2012 Almunia package, the legal concepts to be applied to SGEI are still objectively complex, not least given the greatly intertwined nature of the legal and economic assessments typical of the SGEI sector.

4.2.

The EESC would therefore ask the Commission to publish a guide updating the Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest (8), which has been very useful for stakeholders in previous years.

4.3.

The EESC feels that national authorities are less familiar with the specific rules on SGEI, as regards both public procurement and state aid, than with the corresponding ordinary rules on public procurement and state aid. Investing appropriately in training public administration staff, drawing partly on European resources, could therefore be beneficial for boosting the standard of these services and for ensuring increased compliance with EU law.

4.4.

The EESC would point out that in both the technical and operational domains, national administrations are struggling to develop specific, high-level expertise on the entrustment acts which are a prerequisite for applying Exemption Decision 2012/21/EU on public service compensation and, albeit in simplified terms, Regulation (EU) No 360/2012 on state aid (the higher de minimis ceiling of EUR 500 000 over three fiscal years).

4.5.

On this point, it would therefore be very useful if the Commission could set up a portal giving access to examples of entrustment acts for the various types of health and social services considered to be legitimate and sufficiently well developed by the Commission’s Directorate-General for Competition. The exchange of good practices between Member States with similar legal traditions could also be very useful in this respect, encouraging more effective use of the discretion that Protocol No 26 to the TFEU accords to national administrations when it comes to establishing and implementing SGEI at local level.

4.6.

As is well-known, the rule laid down in Decision 2012/21/EU stipulates that the compensation granted to operators entrusted with public service obligations cannot exceed what is necessary to cover the costs except for ‘a reasonable profit’. It would be useful to further flesh out this concept with a view to achieving greater clarity on the following three issues: i) how should this reasonable profit be determined in relation to the capital used to provide the service in the light of the operating risk?; ii) establishing the fixed and structural costs which are part of the costs incurred when managing the SGEI; and iii) the extent to which the distinctive nature of the services and organisational models typical of social economy entities could have a greater bearing when they manage and deliver services of general economic interest.

4.7.

When defining the concept of ‘a reasonable profit’, the EESC points out that account should be taken of the characteristics of the undertaking in question, particularly when that undertaking keeps ploughing the profits back into its own activities and describes itself as a social economy entity or enterprise.

4.8.

The EESC believes that health and social services should be eligible for a de minimis threshold over three fiscal years which is higher than and different from the threshold for SGEI under Regulation (EU) No 360/2012 (EUR 500 000), as was clearly pointed out during the Commission’s public consultation. Such an increase is justified by the public and general interest role of social and health services and the limited impact of these activities on competition and trade between Member States. Increasing the de minimis threshold for social and health services would widen the scope of application of Regulation (EU) No 360/2012, making the use of that regulation and its simplified forms more accessible.

4.9.

The role played by health and social services in terms of social cohesion would justify a higher ceiling, which would have the triple advantage of: i) allowing more aid to be granted under the simplified and quicker framework on de minimis aid; ii) taking into account the return of inflation at macroeconomic level, which would suggest that more frequent revisions of the ceiling over three fiscal years are needed; and iii) recognising the supporting role played by many social economy entities.

4.10.

The EESC recognises the importance and role of SMEs and private companies involved in the management of social and health SGEIs on the basis of public procurement procedures run by local authorities. Here too, data and information on selection procedures for service providers, compensation and performance collected and circulated by national administrations could provide useful pointers.

4.11.

Lastly the EESC, as recognised by the Commission in its social economy action plan (9), considers that health and social services could also be supported indirectly by granting social economy organisations, which are very active in these sectors, better access to support measures for accessing financing and credit, along with specific incentives to employ workers deemed to be disadvantaged or to have a disability by the general regulation on state aid exemption. On this point, clear and flexible European rules authorising the reasonable cumulation and combination of different incentives for the same activities would be very useful.

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(1)  ARES-2019-3858696.

(2)  Commission Decision 2012/21/EU of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (OJ L 7, 11.1.2012, p. 3).

(3)  Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest (OJ L 114, 26.4.2012, p. 8).

(4)  OJ C 8, 11.1.2012, p. 4.

(5)  OJ C 8, 11.1.2012, p. 15.

(6)  ARES-2019-3858696.

(7)  Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in crossborder healthcare (OJ L 88, 4.4.2011, p. 45).

(8)  SWD (2013) 53 final/2.

(9)  COM(2021) 778 final.

Opinion of the European Economic and Social Committee on The role of Civil Society Organisations as guardians of the common good in the post-pandemic recovery and reconstruction of EU societies and economies

(own-initiative opinion)

(2022/C 323/03)

Rapporteur:

Ioannis VARDAKASTANIS

Plenary Assembly decision	28/4/2021
Legal basis	Rule 32(2) of the Rules of Procedure
	Own-initiative opinion
Section responsible	Employment, Social Affairs and Citizenship
Adopted in section	03/5/2022
Adopted at plenary	18/5/2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	189/1/4

1.   Conclusions and recommendations

1.1.

Civil society and social partners bridge the gap between policy-makers and the realities of those they represent. Engaging in dialogue with these stakeholders is thus an effective way for policy-makers to understand the varying needs of people belonging to different social groups. Furthermore, civil society encourage the participation of all in ‘civic democracy’ to impact issues that affect them.

1.2.

In the EU we see civil society and social partners operating at different levels. Some organisations operate at EU level, others at national level, and some at regional or local level. The scope of work at all levels is complementary. When it comes to advocacy work, the focus of EU compared to national organisations is often determined by how policy competences are split between EU and national level.

1.3.

Civil society working at grassroots level can also play a role in monitoring the implementation and impact of new policies and initiatives. However, civil society does not just impact policy decisions, it also exists to actually deliver services to the people they represent.

1.4.

During the COVID-19 pandemic and Europe’s slow recovery from the depths of this crisis, the roles of civil society and social partners have had to adapt. Even more focus than before has been placed on delivering vital services, protecting human rights and saving lives, while at the same time coping with challenges organisations faced in covering funding and supporting their own staff. Furthermore, with the pandemic came a number of new EU funding initiatives, which in turn required strong advocacy to ensure investment reached those most in need.

1.5.

We are currently seeing European civil society making a transition from the COVID-19 crisis to an entirely new crisis. Many civil society actors are now focusing their efforts on addressing the repercussions of an unprovoked invasion of Ukraine by the Russian authorities. Many NGOs, for example, are now taking the lessons they learned in crisis management from the pandemic and using these to support Ukrainian refugees, collect emergency funds and help them flee the bloodshed currently underway in their country. They are also focusing their efforts on those in the rest of the EU most at risk of poverty, as fuel prices rise drastically and inflation booms.

1.6.

The inclusion of civil society in the policy-making process is inseparable from the values of the EU, with Article 1 of the Treaty of the European Union stating that decisions should be ‘taken as openly as possible and as closely as possible to the citizen’. There can be no room for the repression of social dialogue and civil society dialogue in the EU. Respect for these values should be a prerequisite for Member States to be eligible for EU funding.

1.7.

The EU should have zero tolerance when it comes to Member States (MS) in which the civic space is shrinking. A system in which civil society’s voice is being silenced, particularly those taking a critical view of how the government is operating, is one that is actively undoing the dynamic of policy-makers serving the interests of their citizens. It instead becomes a system where those in power act in their own interest alone. This approach is a threat to democracy within the EU and has no place within the values of Europe outlined in the Copenhagen Criteria (1).

1.8.

Ensuring that MS uphold their EU values is not only about being open to engaging with civil society; it is also about facilitating the existence of civil society even when they are critical of your policies or politically opposed to you. There must be freedom and independence for all Civil Society Organisations (CSOs) in the EU. MS that accept dialogue only with specially selected and government-sympathetic organisations, as a box-ticking exercise, are as guilty of undemocratic practices as governments that do not engage with civil society at all.

1.9.

Policy-makers should ensure the meaningful participation of civil society, and not only at a superficial level. This means involving them in all parts of the decision-making process. It means hearing the views of civil society during the process of conceiving new legislation, projects or initiatives, and regularly consulting them as they take shape, and are adopted and then implemented. Too often civil society is asked for its opinion when legislation or projects are near completion. This makes it impossible for policy-makers to take on board any proposals and sets a precedent where civil society is simply expected to rubber stamp the proposals put before them.

1.10.

Policy-makers at all levels should make their consultation processes easy to find and to access. The EESC commends the EC’s system for public consultation in the sense that it is open to all CSOs, as well as individual citizens, and the fact that all of the consultations are systematically published on the same webpage (2). On the other hand, the EU-level consultations can at times be restrictive regarding the type of input they allow.

1.11.

There is potential for civil society to assist policy-makers in essential tasks such as monitoring. However, if the role of civil society in monitoring the implementation of new policies and initiatives is to be taken seriously, then the EU, national and local authorities should support the operational costs of these organisations. This is all the more important given the uncertainties around financing and project funding because of COVID, as well as increases in operating costs. In order to receive the best quality and most constructive support from civil society, it is essential that offering funding for operating and capacity building must not put into question the independence of CSOs.

1.12.

There are a number of measures the EU could take to embrace the input of civil society. It could start by defining a participatory status. It could also agree on guidelines and common standards on the right to association and civil dialogue to be implemented in all relevant processes, as well as adopting an interinstitutional agreement on civil dialogue. Recognising and promoting the role of associations and NGOs in the European Union framework would also be vastly beneficial to improving the partnership between policy-makers and civil society at EU level.

1.13.

CSOs also have their own set of responsibilities to live up to in the name of good policy-making. First of all, organisations should be constantly receptive to the reality of the people they represent, and make sure that their advocacy responds to their needs. It is particularly important to foster youth engagement in civil society and to ensure a future for the movement. It is also crucial for civil society to be constructive with their input, and clear with their recommendations, to assist in shaping new policies in a way they see best for their constituents. Input should not only focus on what is being done poorly, but also suggest concretely how improvements can be made.

2.   General comments

2.1.

In this document the term ‘civil society’ also refers to social partners, although it must be noted that social partners operate in a unique and specific way in the protection of rights. Civil Society Organisations (CSOs) also advocate on behalf of groups who cannot influence policy through suffrage, such as children, persons with disabilities denied their right to vote, or migrants and refugees, and foster their engagement in democracy. Dialogue between civil society and policy-makers is therefore key to understanding the needs of society and forming effective policy responses.

2.2.

Independent and informed civil society organisations can offer invaluable input to policy-making. They can also play an essential role in monitoring the effectiveness of existing policies and initiatives. However, support for capacity building is critical.

2.3.

The space for civil society is drastically shrinking in some parts of the European Union (EU), and the EU institutions must react strongly and uncompromisingly to these worrying developments. The inclusion of civil society in the policy-making process is inseparable from the values of the EU, with Article 1 of the Treaty of the European Union stating that decisions should be ‘taken as openly as possible and as closely as possible to the citizen’. There can be no room for its repression.

2.4.

The separation of policy competences between the EU and national, regional and local level has given rise to various levels of civil society representation. There are EU CSOs that deal specifically with policy areas in which the EU legislates, and others that operate at national, regional or local level.

2.5.

Two of the main barriers faced by civil society at all levels tend to be the resistance of policy makers to engaging in dialogue and the lack of meaningful involvement at all stages of the decision-making process. Legal regulations should be put in place at European and national level to eliminate these kinds of attitudes.

2.6.

National and EU-level civil society is playing a crucial role in Europe’s post-pandemic recovery. One of the areas in which the two levels are coordinating is around how the EU Member States (MS) invest money from the Recovery and Resilience Facility (RRF), which has the potential to greatly alter how our societies and economies look in the years and decades to come. However, this process has highlighted the insufficient commitment of many MS to meaningfully consulting civil society, with many CSOs cut out or at best only superficially involved in the design of the National Recovery and Resilience Plans (NRRPs). This was outlined in an EESC resolution in February 2021 (3). Furthermore, we saw this inadequate consultation of civil society despite the obligation to do so being outlined in Article 18 of the Regulation (EU) 2021/241 of the European Parliament and of the Council (4) establishing a Recovery and Resilience Facility.

3.   How civil society involvement can result in smarter policy-making

3.1.

Policy-makers at all levels are there to serve the interests of citizens, and not the other way around. Democracy can only function correctly when those making and implementing laws have their ear to the ground and understand what is needed by the people they represent. The existence of civil society and its active inclusion and meaningful participation in the decision-making process at all levels is essential for effective and intelligent governance.

3.2.

CSOs are entrusted with conveying messages from the people they represent, or with the promotion of public concerns, and channelling these into clear and coherent messages and policy recommendations. Engaging in dialogue with civil society is thus an effective way for policy-makers to understand the varying needs of people belonging to different social groups. It helps minimise the risk of overlooking any issues that might arise in the implementation of policies and can present insight and expertise that might otherwise be unavailable to policy-makers.

3.3.

While policy-makers are receptive to what voters want, one of the crucial roles of civil society is to represent groups who do not possess the right to vote. This is especially true of CSOs protecting the rights of children, persons with disabilities who have their right to vote denied, people under guardianship, and immigrants and refugees who are not entitled to vote in their country of residence. Civil society is there to stand up for the interests of such groups whose voices cannot be expressed through suffrage. They also encourage the participation of all in ‘civic democracy’ to impact issues that affect them. Without the existence of strong civil society, and their ability to foster engagement of people from these groups, many would risk being further overlooked by decision-makers.

3.4.

CSOs working at grassroots level, particularly national or local CSOs, can also play a role in monitoring the implementation and impact of new policies and initiatives. However, monitoring is an intensive task that often requires very technical knowledge. It is therefore essential that the EU and the MS support CSOs through funding and technical support to enable them to build capacity. Furthermore, the Commission should begin developing a strategy for monitoring how EU funds are used, a task that appears to be beyond the capacity of the Commission to handle alone. This strategy should outline clearly how the Commission plans to support partners that work alongside it in monitoring activities.

4.   Role of EU-level civil society in the post-pandemic recovery

4.1.

EU-level civil society refers to actors who advocate towards the EU institutions and represent people living throughout all of the 27 MS and often far beyond. They play an essential role in advocating around the EU’s areas of competence, where it is necessary to enter into dialogue with EU-level policy-makers.

4.2.

The following areas are ones on which EU civil society often focuses. These are policy areas either where the EU can propose legislation, or where MS can legislate at national level only when it does not contradict EU legislation already in existence: employment and social affairs; economic, social and territorial cohesion; agriculture; fisheries; environment; consumer protection; transport; trans-European networks; energy; justice and fundamental rights; migration and home affairs; public health; development cooperation and humanitarian aid. Civil society and social partners also currently focus on policy initiatives at EU level, such as the EU Pillar of Social Rights (5) and the European Green Deal (6).

4.3.

Numerous barriers remain when it comes to advocacy by EU-level CSOs. As pointed out in the EESC’s information report SOC/639 (7), unlike other international organisations, the EU has not yet created a participatory status for European associations and NGOs. However, the European Charter of Fundamental Rights guarantees the right to assembly and association, particularly on civic matters at all levels, including the European level (8). In the context of the COVID-19 recovery, EU civil society has been influencing and monitoring how EU funds are used to bring people out of this crisis.

4.4.

The use of EU funding, particularly in the form of the EUR 723,8 billion Recovery and Resilience Facility (9), has the potential to spur on a social and economic recovery from the COVID crisis. However, where the money is invested is a political choice. While the national plans for the spending of this money are drawn up by the MS, the European Commission (EC) has the responsibility of assessing and approving the plans. EU civil society has been busy alerting the EC about concerning proposals for funding in the national plans. They have highlighted the existing systemic problems that were revealed and magnified by the pandemic, such as under-investment in public health, social security and education systems, and pushing for the RRF to go towards resolving this.

4.5.

Several NRRPs were adapted at the request of the EC, and there have been plans that have been either rejected or whose approval has been frozen (10). Civil society was instrumental in highlighting these areas of concern (11). EU funds must address the areas where we saw the biggest strains, the most fatalities and the most worrying breaches of people’s basic rights during the pandemic. This will include funding the transition away from institutional care facilities, particularly for persons with disabilities and older people, as well as better preparedness and resilience of emergency healthcare provision in order to avoid a repetition of the system of triage where certain groups were turned away from hospitals.

4.6.

The EU funds are also there to support economic recovery and a return to work for people who lost their livelihood during the pandemic. It is estimated that 6 million jobs were lost in the EU alone due to COVID (12). However, not all people were affected equally by job loss. Social partners play a key role in shaping economic, labour and social policies that promote well-functioning labour markets and thus protect workers, including those most at risk of loss of income, as well as employers. EU-level civil society has also worked to ensure that investment is channelled towards those who were most affected. Civil society representing the interests of women, young people, persons with disabilities and people from ethnic minorities has a particularly important role to play in ensuring that money is directed to reskilling and supporting these groups. This is something CSOs have been doing by influencing the priorities and recommendations set out by the EC on the use of funds, the EU’s assessment of national plans, and monitoring of the way the funds are being spent in the MS alongside national and local CSOs.

4.7.

The EU is also embarking on the creation of a Health Union that will give it greater preparedness in the face of future health crises. The Health Union will see a number of changes to EU coordination in areas such as surveying medicine shortages and stocking in advance, testing and approving new medicines and treatments, and sharing life-saving devices across borders on the basis of need. Again, EU civil society has its role to play in ensuring the new plan will better protect those groups who were the most underserved by the EU and MS responses to the pandemic. These objectives were outlined in EESC opinion SOC/665 (13). The aims are to make sure the European Medicines Agency (EMA) establishes a European model for pricing medicines in a fair, accountable and transparent way. It will also involve pushing for the European Centre for Disease Prevention and Control to have the mandate and resources to address health inequalities and ensure EU health responses are targeted to those classed as being most at risk, and in making sure health campaigns and public health information from the EU are made far more accessible and understandable to all people during future crises.

4.8.

Future crises are likely to be caused not only by viruses, but also or even primarily because of natural catastrophes caused by climate change. The EU has a key role to play in helping the MS to reduce their CO2 emissions, as well as to prepare for and jointly tackle growing problems we have witnessed over recent years such as flooding and wildfires. Environmental NGOs therefore have a role to play in assisting policy-makers in identifying the areas most in need of investment, and in suggesting solutions for better management of environmental disasters in a way that leaves nobody behind.

5.   Role of national and local civil society in building back better

5.1.

In the EU context, there are a number of policy areas where the advocacy responsibility falls squarely on the shoulders of national and local CSOs. Just as with EU-level civil society, this comes down to the ways in which competences are shared between the EU and its MS. In partnership with EU civil society, national and local CSOs ensure that all policy areas are covered.

5.2.

The areas on which national and local CSOs thus typically focus are the following: public health; industry; culture; education, youth and sport; social protection, environmental protection, social service, legal support to victims, shelter for victims of violence, etc.

5.3.

Many issues made worse by COVID-19 fell into the hands of national, regional and local civil society. It was in the national context that decisions were made on rules to stop the spread of the virus, how emergency healthcare was provided, vaccination prioritisation, how education was continued for learners of all ages, and how workers who lost their jobs had their income protected. Their activities also included combatting misinformation on vaccines, and highlighting the risk of discrimination and increases in poverty among certain groups of people.

5.4.

It is perhaps national and local civil society that has the most crucial role to play in helping the EU to build back better, as they shape national and regional policies and provide essential services to their communities in the following areas: — Ensuring the return to in-person education after the pandemic is inclusive of all learners; — Bridging the digital gap, particularly for marginalised groups; — Making sure policies facilitate quality employment for those who are currently the most likely to be cut off from the labour market, particularly young people, women, people from immigrant backgrounds and persons with disabilities; — Reinforcing social protection schemes and their ability to support all people in maintaining a dignified standard of living; — Ensuring that national policies for long-term care and social services focus on community- and family-based alternatives to institutional care, where we saw the most fatalities during the pandemic; — Pushing for policies and investments that facilitate the inclusion of migrants and refugees in the labour market and in social protection systems; — Civil society is also key to improving economic and political conditions. Social partners in particular are crucial to strengthening the adequacy of income and fair working conditions through collective bargaining.

5.5.

The framework for civil society to formally engage in policy-making varies between MS. Some MS have national equivalents of the EESC, although the power accorded to them varies and is constantly changing. The EESC’s structure, formed around members representing three groups, employers, workers and ‘Diversity Europe’ is one that could be replicated with success at national, regional and local level. In collaboration with the work done by EU-level civil society, national CSOs have also been instrumental in shaping the way the Recovery and Resilience Facility is used in the MS.

5.6.

In its information report SOC/639 (14) and its resolution on national civil society involvement in the NRRPs (15), the EESC commended the agreement reached in December 2020 between the European Parliament and the Council on the Regulation establishing the RRF (16), in which Article 18 outlines the need for CSOs to participate, by consultation, in the drafting and implementation of NRRPs.

5.6.1.

However, despite the reference to civil society engagement in the RRF Regulation, civil society was ironically not involved in defining the actual part of the Regulation regarding the involvement of civil society in the process. Furthermore, the Regulation never refers explicitly to CSOs as beneficiaries, contrary to SMEs for instance. This has created some problems as regards the involvement of CSOs in the implementation. This is paradoxical given that CSOs will be a crucial player during the COVID recovery.

5.6.2.

Furthermore, in practice, despite the guidance from the EC (17), the reality is that national CSOs had great difficulty influencing the outcomes of the NRRPs. One barrier was the seeming unwillingness of some national governments to include civil society in the drafting of their plans. Many governments did not actively involve civil society, requiring CSOs to openly appeal to national authorities to let them be involved. Even when they were involved, the time reserved for civil society consultation was largely insufficient. This hindered substantive debate and consideration of civil society’s input regarding the NRRPs. The result is that, while a large number of MS have shown proof of some form of civil society consultation, all too often national civil society was not truly involved in shaping the resulting plans.

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(1)  Accession criteria, https://ec.europa.eu/neighbourhood-enlargement/enlargement-policy/glossary/accession-criteria_en

(2)  https://ec.europa.eu/info/consultations_en

(3)  https://www.eesc.europa.eu/en/documents/resolution/involvement-organised-civil-society-national-recovery-and-resilience-plans-what-works-and-what-does-not.

(4)  Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17).

(5)  European Pillar of Social Rights, European Commission, https://ec.europa.eu/info/strategy/priorities-2019-2024/economy-works-people/jobs-growth-and-investment/european-pillar-social-rights_en

(6)  A European Green Deal, European Commission, https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en

(7)  Creation of a European statute for associations and NGOs incorporating a precise definition of an NGO or a European association (information report), European Economic and Social Committee, https://www.eesc.europa.eu/en/our-work/opinions-information-reports/information-reports/creation-european-statute-associations-and-ngos-incorporating-precise-definition-ngo-or-european-association-information

(8)  Article 12

(9)  https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-and-resilience-facility_en

(10)  The Bulgarian plan was not approved and the Hungarian plan’s approval was frozen.

(11)  OJ C 517, 22.12.2021, p. 1

(12)  COVID-19 has already wiped out 6 million jobs, EU study finds, Coronavirus pandemic News, Al Jazeera

(13)  OJ C 286, 16.7.2021, p. 109

(14)  Creation of a European statute for associations and NGOs incorporating a precise definition of an NGO or a European association (information report), European Economic and Social Committee, https://www.eesc.europa.eu/en/our-work/opinions-information-reports/information-reports/creation-european-statute-associations-and-ngos-incorporating-precise-definition-ngo-or-european-association-information

(15)  OJ C 155, 30.4.2021, p. 1.

(16)  OJ L 57, 18.2.2021, p. 17.

(17)  https://ec.europa.eu/info/sites/default/files/document_travail_service_part1_v2_en.pdf

Opinion of the European Economic and Social Committee on making packaging a safe, affordable and eco-friendly industry

(own-initiative opinion)

(2022/C 323/04)

Rapporteur:	Matteo Carlo BORSANI
Co-rapporteur:	Dirk JARRÉ

Plenary Assembly decision	21.10.2021
Legal basis	Rule 32(2) of the Rules of Procedure
	Own-initiative opinion
Section responsible	Consultative Commission on Industrial Change (CCMI)
Adopted in section	11.3.2022
Adopted at plenary	19.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	201/1/5

1.   Conclusions and recommendations

1.1.

Packaging is an enabling-technology essential in most supply chains. Its impact goes far beyond its own eco-system and for this reason, it is essential to Europe’s economy and its Single Market and to support the recovery and foster sustainable economic growth. The EESC recommends that the EU Commission, and the national governments, in consultation with all stakeholders of the packaging industry, take initiatives along the entire life cycle of products to promote circular economy processes, encourage sustainable consumption and aim to ensure that waste is prevented and that the resources used are kept in the EU economy for as long as possible.

1.2.

In light of today’s societal challenges, representative organisations of industry and workers, governments, public bodies and non-governmental organisations should all find innovative solutions to increase the sustainability of the packaging industry, considering that circular packaging plays a pivotal role in protecting the planet.

1.3.

In addition, the Commission should strongly encourage the establishing of a European social dialogue between trade union federations and employers’ federations in the packaging sector. Such a European dialogue, well integrated at national and company levels, would provide the European Commission with the necessary support to design and implement its initiatives, and the social partners with a platform to negotiate a just transition.

1.4.

The EESC recommends ‘fit-for-purpose’ packaging be introduced as a new measure for all packaging, meaning that all packaging should be developed according to ‘eco-design’ principles: it must fit the product with minimum void space and weight, thus preventing over-packaging and under-packaging and the associated unnecessary waste and losses. This would also optimise the carbon footprint of transportation of packaged goods, allowing to the meeting of the emission targets set by the European Commission.

1.5.

The scope of change has not yet trickled down sufficiently to stakeholders, therefore the ESSC demands that EU institutions take stronger responsibility and leadership in managing this process. This includes the presentation of the missing regulatory parts in a way that is easy to understand and implement, as well as supportive actions across the whole ecosystem, with a particular focus on the most sensitive entities, such as SMEs and private individuals.

1.6.

The EESC encourages a holistic approach in assessing the overall role and impact of packaging: looking at packaging alone can negatively influence the regulatory framework and push companies to pursue strategies that are costly, inefficient and ultimately less sustainable. Essential elements to be taken into account are the safety and protection of packaged products with a particular reference to food and beverages (1), so that packaging is both sustainable and effective. In this regard, a sustainability-oriented approach in packaging design must not undermine these functionalities.

1.7.

The European institutions should promote minimum standards to support European packaging companies in dealing with the objectives of the green and just transitions, also applying to all packaging entering the internal market from third countries. The EESC requests that policy makers ensure that the sustainability criteria in trade agreements is enforced and that imports include verification criteria regarding ILO convention on human and workers’ rights throughout the value chain of the packaging sector. This would provide for a level playing field in the market.

1.8.

The EESC urges that the Commission promote education, information and sensibilisation campaigns at EU level, to promote awareness on the importance of sustainability-oriented practices, at all the levels of the packaging life-cycle, orientating collective behaviour either in sustainable production, sustainable purchase choices, or the best practices in the disposal and recycling of the packaging.

1.9.

Future EU legislation and action should not focus solely on packaging itself, but on the whole chain: production, consumption and waste-treatment. The EESC recommends fostering investments in technological innovation by supporting the demand for and supply of renewable and high-quality recyclable materials.

1.10.

Packaging must support a circular economy, focusing on eco-design, existing well-established and recycling technologies and dispersion prevention. The EESC recommends the defining of efficient resource management strategies adapted to the nature of individual resources, based on common principles for resource management, conservation and restoration.

1.11.

Proper collection and recycling of packaging are essential to reduce any wasting of resources. In this regard, the EESC recommends that future EU packaging legislation strongly promote public policy and behaviour aimed at improving packaging waste sorting, collection and disposal. This will furthermore support the achievement of EU recyclability targets for all packaging material. The EESC also recommends the evaluation of Deposit Return Scheme initiatives (DRS) as a possible way to increase packaging recycling activities in some specific sectors.

1.12.

The EESC recommends the implementation of harmonised criteria for packaging recycling rules and collection schemes being used locally in Member States, including EPR (Extended Producers Responsibility) fee modulation, and ultimately for labelling of recyclable packaging. EU rules on packaging and packaged goods must be designed in compliance with the Single Market principles and support their harmonised implementation across the EU. It is essential that the European Commission ensures equal applicability and enforcement of the regulatory requirements of sustainability across the whole EU territory, avoiding fragmentation and internal technical barriers.

1.13.

Evidence-based policy measures are needed in order to ensure the best environmental outcome. In this regard the EESC recommends that the upcoming revision of the Packaging and Packaging Waste Directive (PPWD) (2) enable further innovation by setting targets that are aligned with life-cycle thinking, are supported by strong data and scientific evidence and deliver the best overall environmental outcome, which also pays due attention to any impact on the products contained within the packaging.

1.14.

The normative approach that national and EU institutions should take in this sector needs to involve all stakeholders in decision-making. It is essential that the regulatory framework in place be reliable and ensure legal certainty. Without this, enterprises tend to postpone investments or may make investments that are not aligned with regulatory demands. This would most definitely result in jeopardising the overall objectives and in wasted resources and job losses in the sector.

1.15.

Research and innovation in new technologies, as well as the training of sectoral workers, should be fostered. In addition, social partners should work together to identify the new skills needs of the industry and with the public authorities develop and promote the training of employees in the production and disposal of packaging.

1.16.

The EESC recommends that future legislation also take into account the potentialities of digitalisation for transformative advancement in the packaging industry.

1.17.

Given the unique centrality of packaging in every sector of the economy, the European Commission should also set up an annual Forum on packaging and packaging waste, between stakeholders and European institutions representatives, to monitor the implementation of the Directive, to exchange information on the evolution of the industry and to identify and promote good practices in relation to sustainable packaging regulations.

1.18.

The European Commission is requested to organise a dialogue with the European Economic and Social Committee on the implementation of the recommendations put forward in this opinion and to exchange on the possibilities of cooperation in appropriate follow-up measures.

2.   The packaging ecosystem background and regulatory framework

2.1.

The packaging industry serves a wide variety of purposes in our daily lives: protection, promotion, information, convenience, utilisation, handling and waste reduction. Packaging, which is a key societal and business infrastructure, has enabled societal wellbeing and trade and is a necessary element in supporting the recovery and fostering sustainable economic growth.

2.2.

The packaging industry operates within an increasingly complex ecosystem, which consists of many players, from the producers of raw materials used in the packaging, to retailers selling the packaged product, sectorial workers, consumers, companies and public authorities that manage the end-of-life of packaging waste.

2.3.

The EU packaging industry is the world’s second largest and includes producers and users of glass, ferrous metals and aluminium, plastic, wood, and paper packaging products and it employs over 6,5 million people in Europe (3). The European consumer packaging market is expected to register a compound annual growth rate (CAGR) of 4 % over the 2021–2026 forecast period. Technological innovation, sustainability and attractive economics are among the reasons for the remarkable expected growth in consumer packaging (4).

2.4.

The European Green Deal (European Commission, 2019), besides the overall aim of reducing greenhouse gas emissions, sets important policy goals to further advance the sustainable transition of the packaging value chain, which include: — ensuring that all packaging in the EU market is reusable or recyclable in an economically viable manner by 2030, — defining measures to reduce packaging waste, — promoting a robust single market for secondary raw materials to increase recycling.

2.5.

These overall goals have been further detailed in the Circular Economy Action Plan 2.0 (5), which plans for the revision of the Packaging and Packaging Waste Directive (PPWD). The latter, which came into force in 1994, is at the core of the present regulatory framework. Presently, the Commission is reviewing this directive — see the respective consultation (6) and the corresponding impact assessment (7) — with the general intention of reducing packaging waste) and replacing linear product and material flows (i.e. produce — use — waste) with circular flows.

3.   Fostering the circular economy

3.1.

The packaging sector is crucial in Europe’s transition towards a circular economy given its capacity to recycle materials. More and more packaging materials are either being recycled or are themselves products of recycled materials from other manufacturing sectors. At the same time, it has the potential to close the loop of the circular economy by preventing the export of dubious waste materials (8) and denying access to European markets to importers of packaging that does not comply with environmental best practice. The issue of unfair competition from non-EU companies remains a major concern, especially for SMEs, which would be the first impacted on the market.

3.2.

In line with the Circular Economy Action Plan 2.0, all packaging should be re-used or recycled by 2030. Consequently, all packaging materials should be valued in the pursuit of the circular economy objective focusing on eco-design, existing well-established and new recycling technologies and strengthening measures to combat dispersion. A growing global population, coupled with increased per capita consumption, is placing increasing pressure on existing resources.

3.3.

Fibre-based and other natural material-based packaging can support growth decoupled from resource use. It is made from renewable materials, whilst being durable, attractive, recyclable and biodegradable. Recent studies have indicated that fibre packaging can be recycled in excess of 25 times, demonstrating it is an essential component of the circular economy.

3.4.

Likewise, aluminium and steel, as unique permanent materials, can also make a decisive contribution in supporting a circular economy. Through multiple recycling, products and packaging made from permanent materials such as metals or glass are kept in the material loop and can become resources for other products and packaging.

3.5.

Further measures are needed to support the uptake of bio-based polymers because only a few Member States are willing to support the required infrastructure for compostable packaging collection and composting. As regards plastics, it is necessary to support projects and investments in emerging innovative technologies, such as the recycling of mechanical or chemical plastics, while ensuring that they reduce the overall environmental impact in a life-cycle perspective.

3.6.

The way consumers view and interact with packages is also changing. According to the European Consumer Packaging Perceptions Study, conducted independently by Perspectus Global, and commissioned by Pro Carton in 2021, almost two thirds of respondents claim to have changed the products they buy due to concerns about the packaging, and even more would be prepared to pay more for more environmentally friendly packaging. These trends can be further enhanced through awareness-raising and information campaigns.

3.7.

There is significant potential to increase the collection of packaging material, sorting, and recycling in Europe. At the same time, sustainable packaging can create significant environmental damage, if not correctly collected, disposed or recycled. While it is essential to push the packaging industry towards more sustainable practices, public authorities, waste management entities, civil society organisations, and consumers should also be directly involved in increasing the efficiency of waste collection, re-use and recycling. This aspect must be strongly promoted in future legislation and public policies in order to achieve the EU recyclability targets for all packaging materials, also in the view of helping reducing CO2 emissions, thus contributing to the EU’s green transition agenda.

3.8.

Many of the needed adjustments will be enabled by digitisation. Digital technologies provide the possibility for transformative advancements in the packaging industry as traceability, convenience, and tamper detection can be optimised. This goes hand in hand with improvements in operational performance, thus providing the ability to better serve customers and assisting in the design for circularity through smart packaging with sustainability at its core. In addition, smart packaging facilitates recycling by allowing easier access to information on the raw materials used in the packaging.

4.   General comments

4.1.

Sustainability must continue to be one of the key priorities of the EU packaging industries. In line with requirements of the New Circular Economy Action Plan (9), the packaging industry should take initiatives along the entire life cycle of products.

4.2.

Policies affecting the legislative framework in which the packaging industry operates, including rules on packaging waste, therefore have a major effect on all industries and social activities which utilise packaging. For instance, in relation to food packaging, it ensures safety and the protection of products, keeps food edible for longer, minimising food waste, and plays a key role in driving and maintaining access to affordable food for everyone.

4.3.

In light of today’s societal challenges, all stakeholders need to find innovative solutions to increase the sustainability of the packaging industry, considering that circular packaging plays a pivotal role in protecting the planet. All social actors must establish a clear dialogue respecting their own roles and competences in achieving the above targets.

4.4.

It is fundamental that, internally, single EU markets must ensure the equal applicability and enforcement of the regulatory requirements of sustainability across the whole EU territory, avoiding fragmentation and internal technical barriers. EU rules on packaging and packaged goods should be designed in compliance with Single Market principles and support their harmonised implementation across the EU. This requires enshrining core principles, targets and clear definitions in the body of the legislation and its implementing acts, thus preventing diverging national measures from occurring in the first place. Single Market implications of any national measures should not introduce restrictions to the free movement of packaging and packaged goods, which would be disproportionate and/or unnecessary from an environmental protection standpoint and could cause unfair EU market distortions.

4.5.

Packaging’s contribution to economic, environmental and social sustainability is essential. Looking at packaging alone can also negatively influence the regulatory framework. In fact, products generally represent far greater resources and have a much higher inherent value than the packaging used to protect them. Thus, product losses due to underperforming packaging are likely to cause much greater adverse effects on the environment. For instance, in the food industry, 30 % (10) of all food produced worldwide is lost or wasted along the supply chain; an optimised packaging may be one of the solutions to reduce this rate. Food losses and waste — in supply chains and by consumers — account for around one-quarter of greenhouse gas emissions from food, namely 6 % of total global emissions (11).

4.6.

Supporting the European packaging industry is important for many reasons. For example, although legislation exists to ensure packaging materials comply with environmental standards, European packagers also voluntarily decide to follow a number of guidelines, such as FSC certification for paper, board or wood packaging, in order to reduce emissions and promote environmental best practice. Non-European competitors, although required to comply with European legislation, may not adhere to these voluntary codes or the standards followed by European companies.

The packaging sector needs a highly skilled workforce and more attractiveness for the younger generation. The sector must strive to continuously improve working conditions, while creating training options and focusing on motivating highly skilled and digital specialists to join the industry.

4.7.

Therefore, sectorial worker training, as well as a constant update of the due diligence process, are key to the packaging industry and should be promoted.

4.8.

The double transition which will interest the EU economy in the next year will therefore also be a central priority in the packaging sector. In this regard, the ‘just transition’ mechanism should be taken into account in the new redefinition of the regulatory framework, to ensure that no one is left behind.

5.   Specific comments

5.1.   Optimising packaging design helps prevent and reduce packaging waste

Packaging design is significant to define its environmental performance across the product life cycle. Well designed, responsibly sourced and efficiently produced packaging that is appropriately used and effectively recycled provides multiple benefits, minimising damage to products, extending their useful life, facilitating efficient storage, transportation and distribution, giving safe and convenient access to goods, being attractive and communicating vital information to the consumer. Therefore, packaging cannot be considered in isolation from its product, because its material, format and design are inextricably linked to the functionalities that packaging needs to fulfil for each specific product. Yet, while recognising that packaging functionality is essential, it is clear that resource-saving, sustainable packaging should be developed according to eco-design principles. This includes:

—	minimising the use of raw materials,

—	maximising the use of recyclable and recycled materials (while respecting legal requirements),

—	increasing the efficiency of production processes,

—	optimising logistics management,

—	enhancing awareness of the value and reusability of packaging,

—	improving packaging collection, treatment and recycling.

It is essential to take into account both sustainability and functionality of packaging.

Independently of the type of packaging used, over-packaging should be always avoided, especially in e-commerce and home-delivered products, where the ratio between packaging and products is 1:1. In this regard, attention should also be paid to research and innovative solutions that would decrease the environmental burden of packaging of delivered goods.

5.2.   Evidence-based policy measures are needed in order to ensure the best environmental outcome

Climate change challenges provide an opportunity for Europe to build a sustainable and future-oriented industrial base. As far as packaging is concerned, all upcoming policy initiatives should be based on scientific evidence and on a sound understanding of their real impact on the environment. It is strategically helpful to support the use of the Life Cycle Assessment (LCA) methodology as a tool to review the environmental impact of products throughout their entire life cycle.

5.3.   Fully recyclable and renewable packaging materials foster the development of a circular economy

Future EU legislation and action should support the demand for renewable and high-quality recyclable materials, which fosters further investment in packaging innovation. More specifically, EU legislation and action should not focus solely on packaging itself, but on the whole production chain: e.g. how the materials are sourced and processed, the resources and energy required in the production process, and how readily the material/product can be and is actually recycled. The EU should increase the availability and quality of recyclates, focusing also on the ability of a material to retain its inherent properties after recycling, and its ability to replace primary raw materials in future applications (12).

5.4.   Harmonisation of local collection and recycling schemes is critical for achieving packaging recycling targets

The EU has a goal to increase packaging waste recycling rates, but reaching it will also depend on how local authorities increase and improve collection.

When it comes to municipal waste recycling, rates vary widely across the European Union, and even in countries with similar recycling rates, the rules and methods of collection vary significantly. There is a need for greater harmonisation about recycling material rules and collection schemes being used locally in Member States, and harmonised criteria for EPR fee modulation and ultimately for labelling of recyclable packaging.

It is also crucial to evaluate specific targets for collection and recycling for some product categories like food service packaging for both commercial dine-in and takeaway. Through defining clear collection and recycling targets for retail, hospitality, catering, etc., as well as for municipalities, packaging littering can be reduced, consequently increasing the recycling rate.

5.5.   Deposit Return Schemes system (DRS)

The DRS can indeed incentivise the recycling and provide collection efficiencies for businesses that can reduce littering on a massive scale especially for some kinds of consumption, like drinks sold in plastic and glass bottles.

5.6.   The improvement of the quality of packaging collection boosts sustainability of the recycling industry

In order to support local authorities, it is essential to develop clear recycling guidelines and targeted communications, in consultation with the recycling industry, on how recyclable materials should be efficiently separated and presented for collection by householders.

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(1)  In some industries, such as agro-food, packaging also plays an important role preventing the cross-contamination of food and beverages, thus averting the associated health risks.

(2)  Directive 94/62/EC of the European Parliament and Council of 20 December 1994 on packaging and packaging waste (OJ L 365, 31.12.1994, p 10).

(3)  Eurostat.

(4)  linkhttps://www.mordorintelligence.com/industry-reports/europe-consumer-packaging-market.

(5)  https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

(6)  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12263-Reducing-packaging-waste-review-of-rules_en

(7)  https://ec.europa.eu/info/law/better-regulation/have-your-say_en

(8)  For instance, some European countries export their plastic waste outside Europe. This should be avoided though a boosting of the EU internal recycle scheme, which would convert this waste into valuable recycled raw materials. (https://www.theguardian.com/environment/2021/jan/12/loophole-will-let-uk-continue-to-ship-plastic-waste-to-poorer-countries).

(9)  https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en

(10)  Gerber, P.J., Steinfeld, H., Henderson, B., Mottet, A., Opio, C., Dijkman, J., Tempio, G. (2013). Tackling climate change through livestock — A global assessment of emissions and mitigation opportunities. Rome: Food and Agriculture Organisation of the United Nations (FAO).

(11)  Food waste is responsible for 6 % of global greenhouse gas emissions –. https://ourworldindata.org/food-waste-emissions

(12)  European Parliament resolution of 10 February 2021 on the New Circular Economy Action Plan (2020/2077(INI)) (OJ C 465, 17.11.2021, p. 11), paragraph 39.

Opinion of the European Economic and Social Committee on The Global Gateway

(own-initiative opinion)

(JOIN(2021) 30 — final)

(2022/C 323/05)

Rapporteur:	Dumitru FORNEA
Co-rapporteur:	Violeta JELIĆ

Plenary Assembly decision	9/12/2021
Legal basis	Rule 32(2) of the Rules of Procedure
	Own-initiative opinion
Section responsible	External Relations
Adopted in section	12/4/2022
Adopted at plenary	19/5/2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	206/1/3

1.   Conclusions and recommendations

1.1.

The European Economic and Social Committee welcomes the launch of the Global Gateway initiative, as it is convinced that the investments and cooperation projects of EU and non-state actors in the EU need to be better known and promoted around the world.

1.2.

The EESC is aware that there is a huge need for financial resources to effect the interconnection of critical global infrastructure and, in this respect, firmly believes that it is in the EU’s interest to coordinate investment and development cooperation through the Global Gateway with similar programmes of countries with which we share values and common strategic interests. Synergies with the EU Strategy for Cooperation in the Indo-Pacific region (1) must be also achieved.

1.3.

The EESC notes the importance of communicating calls for tender, related administrative procedures, the implementation stage of projects and the results of EU and Member States’ action, and in this regard, in order to better understand the objectives and added value of this initiative, it is important that the European Commission propose a set of tools to enable access to key data, as well as parameterisation of relevant indicators to measure progress in implementing this strategy.

1.4.

The EESC believes that the relevant European institutions, in cooperation with the Member States and partner countries, will have to carry out an analysis of the priority needs for global infrastructure investments, taking into account the EU’s strategic and economic interests, but also having regard to the social, climate and ecological commitments of the EU.

1.5.

The EESC believes it is important for the EU to focus on maintaining the functioning and development of physical connections between Europe and other parts of the world. Infrastructure that provides access to water, food and energy for the population is essential, and the entire ecosystem that makes it possible to achieve food security at global level must be given priority in the actions of the EU institutions and the Member States.

1.6.

The EESC notes with concern that the dramatic situation of the war in Ukraine requires us to adapt the EU’s financial instruments so that they are flexible and comprehensive enough to be used much more quickly when global crises arise, especially in the EU’s neighbourhood.

1.7.

The EESC urges that investments in priority corridors for transport, energy and electronic communications infrastructure be based on impact assessments that assess not only strategic considerations, including lessons learned from armed conflicts in Ukraine, Nagorno-Karabakh, Syria, Ossetia, Libya, etc., but also other issues relating to climate change, environment protection, human rights and social responsibility.

1.8.

The EESC recommends improving the reporting system for activities and projects implemented by EU state and non-state actors, by encouraging investment and project promoters to voluntarily register in the Global Gateway Portal, which will have to be designed on the basis of the latest digital technological solutions for data processing and communication.

1.9.

The EESC has emphasised in its opinions the importance of transnational partnerships between equals, which can limit dependencies, create links and provide lasting economic and social benefits for local communities in partner countries. This is only possible if the bottom-up approach is used to build strong local value-added production chains and to strengthen domestic markets in partner countries by creating high quality jobs as well as sustainable know-how transfers.

1.10.

The EESC welcomes the aim of offering fair financing on favourable terms in order to limit the risk of debt distress. To achieve this goal in a sustainable way, it has to be ensured that other kinds of dependencies will not arise.

1.11.

The EESC calls on the European institutions and the governments of the Member States to ensure that European values are respected and promoted through the implementation of projects registered under the Global Gateway brand. The respect for fundamental human rights, social and environmental impact assessment and compliance with transparency and due diligence procedures must be found in the sine qua non conditionalities for launching any project funded by EU state and non-state actors.

1.12.

The EESC agrees with the idea that companies interested in getting involved in the Global Gateway must have effective collaboration with Member States’ and the EU’s diplomatic corps, simplified access to financial resources and relevant information at regional level, as well as, wherever possible, one-stop-shop offices, to ease the EU private sector’s investments worldwide.

1.13.

The EESC welcomes the European Commission’s intention to set up a board to coordinate the Global Gateway initiative. Professional management is necessary for achieving the complex proposed objectives of this investment strategy; in this connection, in order to improve the quality and relevance of the decisions that will be taken by this board, other members representing civil society organisations, including social partners, especially trade unions, as well as representatives from the world of business have to be involved.

1.14.

The EESC notes the need for a clearer presentation of the multiple funding instruments that will be made available to beneficiaries by 2027. Given the complexity of the description of the funds that will be under the Global Gateway brand, made in the document published by the High Representative of the Union for Foreign Affairs and Security Policy, it seems that a comprehensive and intelligent schematic representation of them is needed in order for them to be understood by all those interested.

2.   Background

2.1.

In 2013, on visits to Kazakhstan and Indonesia, the President of the People’s Republic of China, Xi Jinping, launched two initiatives for transcontinental interconnections of the land and sea infrastructure: the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Later, in 2014, after several attempts to create an integrated brand, it came to be known as the Belt and Road Initiative (BRI) (2). As it was initially described, the BRI was not just a transport corridor, but also an area where Chinese investment was promoted in the states participating in this initiative.

2.2.

A first response to the Chinese initiative came from Japan, which in 2015 proposed the Partnership for Quality Infrastructure (PQI) (3), an initiative dedicated to beneficiaries in Asia, with a 5-year budget of USD 10 billion. In 2016, the PQI was expanded globally, and the allocated budget was raised to USD 200 billion.

2.3.

The European Union and the major industrialised democratic states in the G7 have for seven years helplessly witnessed, without any reaction, the continued strengthening of China’s economic and political relations around the world through the BRI. By the time of the June 2021 G7 meeting in Cornwall, UK (4), where it was decided to create a global alternative — the Build Back Better World Initiative — China had already invested more than half of its total BRI funds earmarked for between now and 2027, i.e. USD 1,2 — 1,3 trillion, as estimated by Morgan Stanley Research.

2.4.

In the context of the 26th Conference of the Parties to the UN Framework Convention on Climate Change (COP 26), held in Glasgow in November 2021, the Prime Minister of the United Kingdom launched the Clean Green Initiative (5), which doubled the UK’s aid-funded green investments to more than GBP 3 bn over five years, as well as providing new guarantees to support clean infrastructure projects, including GBP 200 m for a new Climate Innovation Facility. The UK has announced a package of guarantees to multilateral development banks that are supposed to provide a major boost to investment in climate-related projects in India and across Africa. A new ‘Room to Run’ guarantee for the African Development Bank (6) is expected to unlock up to GBP 1,45 billion worth of new financing for projects across this continent, half of which will help countries adapt to the impact of climate change.

2.5.

Back in the EU, on 12 July 2021 the Foreign Affairs Council decided to take action following the G7 meeting and called on the Commission to prepare a Global Connectivity Strategy (7), under a Team Europe banner, pulling together Member States and the EU, the EU institutions, and national financial institutions in a joint effort. This strategy was published on 1 December 2021 as the Global Gateway.

2.6.

The European Commission document states that the Global Gateway supports investment in hardware and software infrastructure that respects key principles for the European Union: democratic values and high standards; good governance and transparency; equal partnerships; green and clean; security-focused; catalysing private sector investment.

3.   General comments

3.1.

The European Union made the decision to raise the profile of its investment in non-Member States, worldwide, by creating the Global Gateway initiative — an economic and investment strategy designed to be a diplomatic and communication instrument.

3.2.

The aim of this initiative to offer fair financing on favourable terms in order to limit the risk of debt distress is welcomed by EU civil society organisations. To achieve this goal in a sustainable way, it has to be ensured that other kinds of dependencies will not arise.

3.3.

This is not an additional structure; it is neither administrative nor financial. It is a BRAND that must be accepted by all European financial institutions, development agencies and private companies in the Member States when creating investment projects in non-European Union countries, and they must comply with a system of requirements based on the EU’s core values. The conditions for use of the brand name, including cases where it is prohibited, need to be worked out, and the EESC is ready to contribute here.

3.4.

Unlike China’s Belt and Road Initiative (BRI), which implements a Chinese international infrastructure plan with mainly national funding, with Chinese firms and in the framework of a top-down strategy, the Global Gateway is a bottom-up approach. It consequently starts from the genuine investment needs of non-EU partner countries that are willing to develop their infrastructure while respecting the key principles that underlie this strategy.

3.5.

Only quality projects are promoted, following an environmental and social impact assessment, at the same time taking into account the quality level of the equipment throughout the latter’s life cycle. This quality concept covers both the material aspect of each project (hardware components, engineering, construction process, skilled labour, etc.) and the financial aspect, through transparent tender procedures and an ethical financial process, together with the appropriate guarantees.

3.6.

The Global Gateway is an equivalent to the American Build Back Better (8) and British Clean and Green initiatives. It remains to be clarified whether these two initiatives are to be considered in competition with or complementary to the Global Gateway, or in cooperation with both initiatives. From a civil society perspective, it is quite clear that coordination should be encouraged between the Global Gateway and other international cooperation for development strategies that are based on the same values.

3.7.

To be eligible, projects have to be designed around the idea of better ‘connectivity’ between the country concerned and the EU, among the people of that country or between the country concerned and its neighbours. This is indeed a goal that meets the modern requirements, as well as the capabilities of the Union. On one hand, the control of networks and routes is becoming increasingly more important than the control of areas. On the other hand, the EU itself can play a key role in ensuring a progressive, equitable cross-national partnership, and in achieving the Sustainable Development Goals (SDGs) (9). That connectivity will cover either just hardware — roads, railways, ports, airports, etc.; a mixture of hardware and software — communication cable networks; or mainly software — education, research and development.

3.8.

The broad concept of connectivity encompasses, for example, all type of investment in water resources — new wells, water distribution, agricultural irrigation and waste water management. Water resources will be key to an increasing number of countries, both through the effects of population growth and a warmer climate. Water connects people not only through water management infrastructures, but also, and in fact mainly, by providing waterways for maritime and inland navigation.

3.9.

The Global Gateway ‘brand’ or ‘initiative’ will not add more money to existing and diversified European financial investment funds and structures. It is expected that the EU, under this banner, will mobilise infrastructure development investment of up to EUR 300 billion in the 2021-2027 period.

3.10.

The European Fund for Sustainable Development Plus (EFSD+) (10) will be the main financial tool for mobilising investment under the Global Gateway, with up to EUR 135 billion, including a new initiative with the European Investment Bank that could bring EUR 25 billion of additional investment, in addition to grants of up to EUR 18 billion under the EU’s external assistance programmes.

3.11.

In addition to these funds are EUR 145 billion of planned investment volumes by European financial and development finance institutions. The guarantees it provides will be used for de-risking activities and the leveraging of private investment. This will be implemented through close cooperation between the European Investment Bank and the European Bank for Reconstruction and Development.

3.12.

At the sixth European Union-African Union summit (11) in Brussels on 17-18 February 2022, the Commission announced that from the total budget of the Global Gateway initiative, EUR 150 billion are dedicated to an Africa-Europe (12) investment package that will support common ambitions for 2030 and the AU 2063 Agenda (13), with the general objectives of building more inclusive, diversified and resilient economies.

3.13.

Further adding to this financial tool kit, the EU is exploring the possibility of establishing a European Export Credit Facility (14) to complement existing export credit arrangements at Member State level. The Global Gateway does not prioritise geographic investment areas. Nevertheless, main areas of interest will be the EU’s immediate neighbourhood — its Eastern flank, Mediterranean countries and Africa, the Black Sea and Central Asia and the Indo-Pacific region.

3.14.

Good projects will be given priority over location, also with regard to the PPP Risk Assessment Model (PFRAM) (15) and the Public Investment Management Assessment (PIMA) (16) based on EU institutions’ cooperation with the International Monetary Fund and the World Bank, and avoiding duplication when implementing the various initiatives.

3.15.

The Global Gateway is an EU initiative and priority, but in certain conditions might take into consideration partnership with non-EU member countries such as Switzerland, the United Kingdom and India.

4.   Specific comments

4.1.

The European Economic and Social Committee shares the rationale behind the Council’s decision to launch a European strategy to raise the profile of specific investments made, and measures taken, by EU institutional, Member State and non-state players at global level.

4.2.

The EESC understands the focus on preventing and tackling pandemics in the health-related chapters and sees the current relevance of these issues. Nevertheless, a long-lasting impact has to be a priority and building resilient and easily accessible socio-medical infrastructures is a key aspect in this field.

4.3.

The dramatic situation of the war in Ukraine shows us that these financial instruments must be designed to be flexible and comprehensive enough so that they can be used quickly in crisis situations that arise globally and especially in the vicinity of the European Union. Crises in the immediate vicinity are addressed as a matter of priority in order to minimise the threat to the security of the Member States, and this requires, among other things, the timely allocation of financial resources for urgent interventions to restore the functionality of interconnection infrastructure and of the essential public services for the population.

4.4.

The Committee considers it important for the EU to focus on maintaining the functioning and development of physical connections between Europe and other parts of the world. Infrastructure that provides access to water, food and energy for the population is also essential, and the entire ecosystem that makes it possible to achieve food security at global level must be given priority in the actions of the EU institutions and the Member States.

4.5.

The war between Russia and Ukraine is having a major disruptive impact on the supply chains of cereals and other agricultural commodities for the agri-food industry. The infrastructure developed through Global Gateway investment should also be harmonised with the EU’s strategic interests in the event of armed conflicts or other natural calamities and, from this perspective, ensuring the security of supply of essential raw materials must also be achieved through the intelligent design of distribution networks, logistics centres and warehouses.

4.6.

The EESC supports the European Commission’s efforts to strengthen mechanisms and instruments for concrete action to bring the European Union to the forefront of global socioeconomic and political developments. In this regard, various experts argue that there is a need for an internationally coordinated monetary expansion (directly and indirectly) and the utilisation of the opened fiscal space to launch global economic development by financing public infrastructure investments and public or private productive investments, countervailing spatial disparities and serving socioeconomic and environmental sustainability (17).

4.7.

Correct and complete reporting of all EU activities in various countries around the world has proved to be a real challenge, as long as there is no permanent, close coordination between the relevant players. In the context of the launch and implementation of the Chinese BRI, there has been a need for better communication on the EU’s contribution to the development of global interconnection infrastructure.

4.8.

In order to better understand the objectives and added value of this initiative, it is important that in the coming period the European Commission propose a set of tools to allow access to key data, as well as parameterisation of relevant indicators to measure progress in implementing this strategy.

4.9.

The Global Gateway is an initiative that will allow Team Europe to portray a better, more comprehensive image to the outside world. As a vehicle to consolidate European investment in third countries, the Global Gateway has to be equipped with a database that will ensure better access to relevant information on all the projects, budgets and partners involved. In this regard, the first step will be to design and maintain a Global Gateway website to provide a proper window for illustrating the associated measures, results and impact.

4.10.

To limit dependencies, forge links and therefore deliver lasting economic and social benefits for the local communities in the partner countries it is crucial to build a true partnership of equals. Achieving this is only possible if the bottom-up approach is used to build resilient local value-added production chains and strengthen the domestic markets in the partner countries by creating high quality jobs as well as sustainable know-how transfers. In the case of Africa, fostering the establishment of the African Continental Free Trade Area (AfCFTA) (18) could be an adequate step. To ensure that European values are respected, social impact assessments are fundamental and can be built on top of existing due diligence processes.

4.11.

The role of the private sector in co-financing Global Gateway investments is recognised by the European institutions. In order to strengthen private entities’ determination to become more involved and contribute to achievement of the specific objectives of this strategy, and to boost their interest in doing so, mechanisms should be quickly established to facilitate the certification and recognition of the efforts of private players that are involved in implementing this EU initiative.

4.12.

Companies interested in getting involved in the Global Gateway need relevant information at regional level, effective collaboration with Member States’ and the EU’s diplomatic corps and, wherever possible, one-stop-shop offices, in order to facilitate the EU private sector’s investments worldwide. Furthermore, after successfully passing the environmental and social impact assessment, as well as the PFRAM and PIMA and showing a sustainable positive economic, social and ecological value for the EU and especially for the partner countries and in their cooperation with the financial institutions involved, the private sector should have simplified access to financial resources, with the most favourable conditions.

4.13.

The European Commission has announced its intention to set up a board to coordinate the Global Gateway initiative. The EESC welcomes this proposal, firmly believing that integrated governance of this strategy is very much needed for achieving results in a relatively short period of time. To improve the quality and relevance of the decisions that will be taken by this board, other members representing civil society organisations, including social partners, especially trade unions, as well as representatives from the world of business have to be involved.

4.14.

The Business Advisory Group mentioned in the joint communication could follow a too narrow approach by leaving out experts in the fields of investment priorities in development cooperation, health care, environmental protection and education and training. To ensure effective coverage of all topics of the Global Gateway programme this group shall include experts of these relevant fields.

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(1)  https://www.eeas.europa.eu/eeas/eu-strategy-cooperation-indo-pacific-0_en

(2)  https://www.ebrd.com/what-we-do/belt-and-road/overview.html

(3)  https://www.mofa.go.jp/files/000117998.pdf

(4)  https://www.g7uk.org/

(5)  https://www.gov.uk/government/news/pm-launches-new-initiative-to-take-green-industrial-revolution-global

(6)  https://www.afdb.org/en/news-and-events/african-development-bank-launches-landmark-us-500-million-credit-insurance-deal-with-african-trade-insurance-agency-and-uk-reinsurers-18600

(7)  https://www.consilium.europa.eu/en/press/press-releases/2021/07/12/a-globally-connected-europe-council-approves-conclusions/

(8)  https://www.whitehouse.gov/build-back-better/

(9)  https://sdgs.un.org/goals

(10)  https://ec.europa.eu/eu-external-investment-plan/about-plan/how-it-works-finance_en

(11)  https://www.consilium.europa.eu/en/press/press-releases/2022/02/18/sixth-european-union-african-union-summit-a-joint-vision-for-2030/

(12)  https://ec.europa.eu/info/strategy/priorities-2019-2024/stronger-europe-world/global-gateway/eu-africa-global-gateway-investment-package_en

(13)  https://au.int/en/agenda2063

(14)  https://trade.ec.europa.eu/doclib/docs/2021/february/tradoc_159438.pdf

(15)  https://www.imf.org/external/np/fad/publicinvestment/pdf/PFRAM.pdf

(16)  https://www.imf.org/external/np/fad/publicinvestment/pdf/PIMA.pdf

(17)  https://www.longdom.org/open-access/relieving-inflation-or-palliative-selfdestruction-2168-9458-3-133.pdf

(18)  https://au.int/en/cfta

Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — A competition policy fit for new challenges

(COM(2021) 713 final)

(2022/C 323/06)

Rapporteur:

Emilie PROUZET

Referral	European Commission, 20.12.2021
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	5.5.2022
Adopted at plenary	19.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	223/1/6

1.   Conclusions and recommendations

1.1.

The communication highlights the ability of competition policy to adapt to new market circumstances, policy priorities and the needs of consumers. The European Economic and Social Committee (EESC) recognises that competition policy has helped to preserve and foster the economic prosperity of the EU, which is deeply committed to the principles of the social market economy.

1.2.

The EESC welcomes the European Commission’s decision to prolong the State aid Temporary Framework stemming from the pandemic. It recognises, however, that these measures are too exceptional for them to be extended to the general framework and therefore become permanent.

1.3.

In 2022, while the Commission has again moved rapidly in adopting a temporary framework in relation to the war in Ukraine, it is imperative to ensure that businesses are actually able to benefit from it. The Temporary Crisis Framework must be able to complement the State aid instruments that are already available to the Member States, as well as the existing schemes under the national recovery and resilience plans. The EESC calls upon the Commission to provide guidelines in order to facilitate fast support by Member States’ governments to sectors that are seriously impacted by emergency situations, for instance through national aid measures such as guaranteed trade credit insurance or other financial instruments. The EESC also stresses that the need to ensure that the EU’s businesses can access the temporary measures hinges primarily on having accessible, non-restrictive eligibility conditions for the most impacted businesses.

1.4.

At this time of major uncertainty, the EESC wants to see a competition policy that is particularly geared towards delivering the transitions embarked on by the EU, which will require ambitious trade and investment policies, extraordinary public and private investments, innovation and a well-functioning single market. The EU and the Member States must now put in place a legal and financial framework that ensures a level playing field in the market for all stakeholders, regions and citizens. In this regard, the EESC stresses the need to achieve genuine equality of treatment between European players and vis-à-vis global players. The integrity of our internal market and its non-fragmentation are crucial here.

1.5.

The EESC believes that competition law must continue to be underpinned by rules and facts and that the independence of the Commission must be guaranteed. However, the policies adopted by the EU to ensure a just transition should be more clearly reflected in the competition rules and in their enforcement by the relevant officials in particular. The EESC calls on the Commission to gear its efforts as far as possible towards facilitating the dual transition of our economy and the competitiveness of our industry in a particularly unstable global market.

1.6.

Against this backdrop, achieving our strategic autonomy has never been more important. The EESC takes the view that the changes to competition law currently being considered should be assessed in the light of the needs identified in the Commission’s work on the 14 strategic European ecosystems.

1.7.

The EESC believes that further reforms are needed to incorporate sustainability, digital and resilience issues more specifically. Both the key concepts of EU competition law (e.g. relevant market) and the specific frameworks (such as de minimis and the GBER), as well as the implementation of these rules, should be adapted to the policy direction taken by the EU. Moreover, the EESC calls on the Commission to equip itself with the necessary tools to enable all sections of Europe’s economy, and in particular SMEs and services, to finance this dual transition.

2.   General comments

2.1.

The EESC and all stakeholders agree that schemes providing exemptions from the general competition law framework have proved their worth since 2019 and the COVID-19 crisis. The speed with which DG COMP has taken decisions to avoid, as far as possible, distortions in the internal market should also be highlighted.

2.2.

We also support the approach taken by the European Commission aimed at avoiding a cliff edge for businesses, notably by extending the temporary framework to include recovery measures.

2.3.

The EESC welcomes the new temporary framework adopted by the Commission to address the major ramifications of the war in Ukraine caused by Russian aggression. It also wonders about the impact of this new crisis on both the review of the Stability Pact and the requirements of a new recovery plan.

2.4.

The EESC also recognises the value of the Commission communication in that it sets out the general framework for reviewing competition rules and the overall and strategic path to be followed in this exercise.

2.5.

But right now, the EU is facing the consequences of its strategic dependence on non-EU countries. We have to revitalise our internal market after the COVID-19 crisis and enable European businesses to strengthen their resilience and lead the dual transition, at a time when we will also have to deal with the multifaceted and uncertain fallout from the war in Ukraine caused by Russian aggression.

2.6.

A well-functioning single market and competition policy enable businesses to access a vast market in which everyone can compete on a level playing field, stimulating efficiency and innovation and providing an environment in which successful companies can grow and become global champions. The EESC therefore reiterates how important the integrity of the internal market is to our recovery plan. In this regard, we will follow with interest the deployment of the Single Market Emergency Instrument.

2.7.

Currently, the EU merger control regime sometimes seems to hinder the creation of world-class European companies capable of competing with US and Chinese businesses, on the pretext of not reducing competition in the internal market. The conditions governing access to public support for European businesses are much stricter than those applicable to our global competitors and thus hinder a genuine policy of supporting economic sectors. Finally, antitrust enforcement and the ban on abuse of dominant position seem to be still ill-suited to the new challenges posed by the digital economy and green transition.

2.8.

The Commission is currently pursuing a review of competition policy tools (merger, antitrust and State aid control) to ensure that they all remain fit for purpose, and complement its existing toolbox. In such turbulent times, our climate and digital objectives must now receive the maximum level of support. The EESC calls on the Commission to go further than ever before in adapting and harnessing the full suite of competition policy tools to the task of supporting the green and digital transitions and to equip itself with the instruments needed to compete globally in this context.

3.   Adapting competition rules and enforcement to deliver on our ambitions

3.1.

The EESC believes that we have not gone far enough in the review of the competition framework as regards incorporating the European policy agenda on sustainability and the digital transition. Our competition law should be adapted both with regard to the very definition of the basic principles and in terms of assessing in practice the anti-competitive and positive effects.

3.2.

First and foremost, the key principles need to be reviewed. Thus, the assessment of whether or not a practice or agreement coming under competition law is legal depends on the market share of the operators in the relevant market. These concepts of ‘market share’ and ‘relevant market’ are key and the EESC calls on stakeholders to be extremely vigilant in their ongoing review as regards ensuring that those concepts reflect the operational realities of our businesses.

3.2.1.

Thus, several paths should be explored. ‘Interchangeability of a product/service’ and ‘level playing field’ are concepts that should be adapted to the features of the digital market and the players in it. Moreover, the environmental characteristics of a product could be taken into account when assessing that ‘interchangeability’.

3.3.

A second area of action would be to clarify and strengthen the scope of aid and practices that are compatible or do not affect trade, and are thus exempt from competition law. Some elements of evaluation need to be reviewed so that as many entities as possible can invest and coordinate with full legal certainty and without having to engage in the European notification procedure. It thus appears that the de minimis rule should be revised in order to be able to respond more effectively to the characteristics of each sector, such as land transport and trade.

3.3.1.

The EESC also welcomes the amendments proposed by the Commission to the General Block Exemption Regulation (GBER), as they address many of the needs of businesses, and in particular SMEs, when it comes to accessing the financial support needed to thrive in the sustainable transition.

3.4.

A final area of focus is enforcement and monitoring, whereby DG COMP and particularly the relevant officials should be fully aware of the ‘transition pathways’ established for the 14 strategic European ecosystems selected by the European Commission. It is within this framework that a determination has to be made as to whether a practice or agreement restricts competition with a likelihood of negative effects on the price, production, innovation, quality or variety of goods and services on the relevant market.

3.4.1.

The parameters for assessment giving rise to exemption benefits or to merger agreements should also be adapted to those objectives. These conditions focus mainly on the economic advantage and the benefit to the consumer in terms of price, over and above the risk of eliminating competition. The positive effects of restrictions should be more broadly focused on the environmental quality of products and climate-related efficiency gains provided that these elements are uniformly defined at European level.

3.4.2.

The concept of ‘quality’ should thus reflect our sustainability goals and be defined accordingly at EU level. The concept of a ‘sustainable product’ should also be demarcated at European level with a view to the equal treatment of operators and the end of greenwashing. To this end, the EESC supports the Commission’s work on common and transparent scientific methodologies for defining the sustainability of products, services, buildings, etc.

3.4.3.

Feedback from stakeholders differs on how to take the ‘innovation’ criterion into account. According to DG COMP, innovation is a key parameter of the market test. According to economic operators, this parameter is taken into account very little or is mostly rejected in any event. The EESC calls on the Commission to assess how the policies adopted by the EU have been taken into account in its latest decisions.

3.4.4.

Finally, cooperation between businesses on environmental projects which, in many cases, require the involvement of the entire value chain must be facilitated and put on a more secure footing. The EESC therefore calls on the Commission to clarify the new CAP derogation from antitrust rules (Article 210), which allows farmers to enter into agreements on matters of sustainability.

3.4.5.

Furthermore, the rules on both vertical (VBER) and horizontal (HBER) agreements must be adapted to take account of the complexity of the ecosystems to be built around these sustainability objectives. The Commission should indicate, as far as possible, what kind of sustainability-related information can be safely exchanged between competitors.

4.   Having the right tools to deliver the transitions and compete globally

4.1.

As the EESC has already argued (1), increasing open strategic autonomy involves strengthening the resilience of the single market, investing in the EU’s own competences and technological capacity and increasing resources for R & D, greening production and supply chains, securing digital sovereignty, ensuring strategic stockpiling, fostering and attracting investments and sustainable production in Europe by improving the conditions in which businesses operate, exploring alternative solutions and circular economy models, promoting broad industrial cooperation across Member States, and aiming for technological leadership as stated by the Competitiveness Council in November 2020.

4.2.

The EESC raises the question of the measures proposed to facilitate the investments needed for the climate and digital transitions in a resilient market and in such uncertain times. Achieving these transitions will require considerable investment, both public and private, at a time when the economic and political situation is particularly unstable. We must facilitate the major investments facing our strategic ecosystems and, more generally, the whole business world; this should also be done with a view to creating players that are able to grow on the global market.

4.3.

While major investment plans have already been drawn up in certain sectors, the EESC wonders here about the deployment of measures for the service sectors, and generally, for the wider European economy, which is made up predominantly of SMEs. EU State aid rules will play an important role in ensuring that the transitions are successful.

4.4.

Businesses also need support for their investments in digitalisation and particularly for upgrading their IT systems, and for automation, robotics and artificial intelligence. SMEs in particular need support to develop their digital presence. Another example is that State aid for broadband roll-out will be a pivotal element of territorial cohesion policy. We call on the Commission to include further amendments to the GBER to support the digitalisation of businesses and transactions.

4.5.

Similarly, ‘important projects of common European interest’ (IPCEI) as well as industrial alliances, whether for batteries, semiconductors or health, must help develop innovative value chains in Europe. The initial applications of this tool are interesting. The EESC will look closely at whether the IPCEIs are actually open to SMEs, as envisaged in the draft guidelines.

4.6.

There also needs to be a level playing field with third country players; the control of foreign subsidies is a major challenge in this area. Non-European companies receive massive state support. The EESC accordingly considers that the Commission proposal (2) tackling foreign state funding for companies operating in the EU market, a market that such subsidies are likely to distort, is a useful and appropriate instrument. That said, some aspects of the intrinsically complex and far-reaching legislative mechanism need to be further refined.

4.7.

The EESC also welcomes the adoption of the Digital Markets Act (DMA) as it aims to ensure contestable and fair digital markets through ex ante regulation. European governance is crucial here to ensure that the DMA regulation is applied in a uniform way across the European Union and that it is effective. Furthermore, while the DMA regulates the issues of data-sharing and access to data for gatekeepers, the situation regarding data in competition assessment remains to be clarified.

4.8.

Finally, in its transnational and global alliances, the EU must be able to identify violations of human rights, fundamental freedoms and the health and safety of both people and the environment, throughout value and supply chains. The EESC takes note of the initiatives taken to this end, in particular with regard to mirror clauses.

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(1)  Exploratory opinion requested by the French presidency of the Council of the EU: How will the identified industrial ecosystems contribute to the strategic autonomy of the EU and the well-being of Europeans? adopted on 19 January 2022 (OJ C 194, 12.5.2022, p. 34).

(2)  Proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market (COM(2021) 223 final — 2021/0114 (COD)).

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Building an economy that works for people: an action plan for the social economy

(COM(2021) 778 final)

(2022/C 323/07)

Rapporteur:

Giuseppe GUERINI

Referral	Commission, 21.1.2022
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	6.4.2022
Adopted at plenary	18.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	179/1/4

1.   Conclusions and recommendations

1.1.

The EESC welcomes the social economy action plan (SEAP) which incorporates many key points raised by the Committee over the years, starting with the opinion INT/447 of 2009 (1). The SEAP clearly recognises that the European institutions should promote and recognise the different legal forms that distinguish the social economy ecosystem, not least because of its particular role of supporting the local economy and its proximity to local areas and communities.

1.2.

The violent invasion of Ukraine and the resulting exodus of refugees is highlighting the great propensity for solidarity of European citizens and civil society organisations involved in receiving refugees and managing humanitarian aid, confirming the social economy’s important role in organising responses that demonstrate solidarity during humanitarian crises.

1.3.

The potential of the social economy has still not been harnessed in all Member States. The SEAP therefore needs to be complemented by medium- and long-term actions and by targeting and coordinating the necessary measures and strengthening the legal reference framework. In this regard, the EESC fully supports the approach of securing a specific recommendation by the European Council, scheduled for 2023.

1.4.

The EESC proposes that, in order to make the SEAP more effective, it should be strengthened with targeted proposals in four areas of interest: i) collaboration between public administrations and social economy entities; ii) State aid; iii) investments and financial instruments; and iv) taxation — strengthening the link between the SEAP and the ‘European 2030 Strategy’, with particular reference to the role that the social economy can play in supporting the green, digital and social transitions.

1.5.

The EESC hopes that the SEAP will promote a more targeted investment of European resources earmarked for the national recovery and resilience plans towards social inclusion, education and employment stimulus targets, with a special focus on young people, families and vulnerable people, recommending that particular attention be paid to digital skills training for disadvantaged people.

1.6.

In order to develop best practices for cooperation between public entities and social economy entities, the EESC recommends developing collaborative territorial governance and shared administration instruments as the ideal means of involving as wide a range of stakeholders as possible, strengthening the culture of subsidiarity.

1.7.

The EESC welcomes the SEAP’s proposal to boost efforts to steer public procurement and concessions towards the pursuit of social and environmental goals and recommends that public-private partnership models be strengthened.

1.8.

In line with the SEAP’s proposals on taxation, the EESC encourages the Commission to pay special attention to tax provisions for social economy entities in the legislative initiative Business in Europe: Framework for Income Taxation (BEFIT), due in the next few months.

2.   General comments and background

2.1.

The social economy action plan looks towards 2030 and is complemented by two working documents. The first of these provides additional information supplementing the communication on Building an economy that works for people: an action plan for the social economy, to be taken in parallel with the implementation of the European Pillar of Social Rights. The second, on Scenarios towards co-creation of a transition pathway for a more resilient, sustainable and digital Proximity and Social Economy industrial ecosystem, ties in with the new European industrial strategy, in which the social economy can play a role as an innovator, leading to a fair and equitable transition, in strategic sectors such as the digital and green economies.

2.2.

The EESC welcomes the decision to align the SEAP with both the European Pillar of Social Rights and the new European industrial strategy, which has taken the innovative step of targeting a specific ‘ecosystem’ of the social economy. In this respect, it is important that the medium- and long-term objectives be more clearly defined beyond 2023. The social economy can be of great help in dealing with the big questions currently facing Europe, i.e. the reduction of forms of inequality, demographic pressures, support for the younger generations, managing the reception of refugees and migrants and the sustainability of healthcare systems and the European welfare model.

2.3.

The EESC believes that the SEAP must also promote measures coordinated with the single market for capital plan, as recommended in opinions ECO/533 (2) and INT/965 (3). These two opinions call for the capital markets union to take account of the specific features required of financial instruments for the social economy sector.

2.4.

While the action plan does not provide a legal definition of ‘social economy’, it does identify the distinctive features of its entities: i) primacy of people and social purposes over profit; ii) reinvestment of all or most of the profits in activities that are in the collective interest or which benefit members and users, in the context of the general interest; iii) democratic and participatory governance.

2.5.

The EESC endorses these principles and encourages the Commission and Member States to undertake more ambitious and better coordinated initiatives with a view to shaping a duly accepted and coordinated legal framework on the social economy built around the above-mentioned three principles, which would make it possible to put an end to ambiguities and uncertainties. A definition incorporating the different organisational models and forms of enterprise that have been taking root would also make it possible to achieve the goal of introducing a European statute for associations, mutual societies and foundations, especially for those engaged in cross-border operations.

2.6.

The EESC welcomes the Commission’s proposal to guide the Member States in drawing up measures to help the social economy, with a view to supporting a more sustainable, inclusive and innovative model of economic and social development. Specifically, the Commission is proposing to intervene either directly or alongside the Member States in three priority areas: i) creating the right conditions for the social economy; ii) offering opportunities for them to start up and expand their activities; iii) ensuring recognition of the social economy.

2.7.

With this in mind, the EESC is pleased that the action plan flags up the need for a mix of policy measures, including taxation, regulation of public procurement, competition and state aid, appropriate regulation of working conditions, education and research. In this regard, the EESC stresses the need to promote the quality of work and the development of the procedures for informing and involving workers when it comes to the strategic decisions taken by social economy entities.

2.8.

The sectors in which social economy entities operate encompass social and health services, care, education and training, culture and environmental protection, and in general many of the SGEIs referred to in the European Pillar of Social Rights, sectors that generate increasing economic value and ever higher employment rates.

2.9.

Social economy entities are active in all economic sectors in many European countries: from industrial and craft manufacturing to the circular economy, from sustainable tourism to energy production from renewable sources, from transport to communication and information services, with key roles in social innovation and widespread technology transfer supporting disadvantaged populations or areas. The variety of legal and organisational forms means that a ‘one-size-fits-all’ approach is inappropriate, although some form of coordination under the leadership of the Commission would be useful.

2.10.

Social economy enterprises are firmly rooted in the local community, contributing to social cohesion in local areas and making them more resilient and inclusive. This propensity for proximity makes social economy entities particularly effective, including at supporting the green and digital transition and making digital technologies more accessible to everyone, including the most vulnerable and at risk of social exclusion, especially enabling technologies that help people with disabilities to work.

2.11.

Special attention should also be paid to the involvement and development of young people, who should be supported with training measures that encourage the growth of entrepreneurship among the younger generations.

2.12.

To unleash this potential, social economy entities need greater access to investment capital, particularly to make better use of investments in social infrastructure (affordable housing, long-term healthcare and support, education and lifelong learning, poverty reduction, improved accessibility). These types of infrastructure must be strengthened so as to reduce inequality and social exclusion, problems that have been exacerbated in Europe by the pandemic.

2.13.

The action plan is an opportunity to develop the social economy, by improving industrial policy and by recognising the role played especially by cooperatives (which form major hubs and have considerable capacity for innovation) in European services and industry.

2.14.

The EESC attaches considerable importance to the Commission’s commitment to carrying out studies and research on the social economy with a view to a European Council recommendation in 2023. The EESC is also pleased that the Commission plans to evaluate the implementation of the action plan in 2025. However, to ensure the effectiveness of the studies and assessments the SEAP should set clearer medium and long-term goals to help identify the intended social impact, also in relation to the European 2030 strategy.

2.15.

The EESC welcomes and supports the Commission’s goals for promoting cross-border relations and the internationalisation of the social economy, by supporting and encouraging the participation of social economy undertakings in European partnership platforms, by establishing a single EU Social Economy Gateway (one-stop-shop).

2.16.

As part of initiatives to promote a culture of entrepreneurship and, in particular, to increase young people’s involvement in starting up new enterprises, it is essential to increase knowledge of the potential of the social economy in secondary school and university curricula. This is why we support the proposal to establish a new Youth Entrepreneurship Academy that includes the social economy.

3.   Specific comments

3.1.   Relations between public administrations and social economy entities

3.1.1.

Recognising the potential of the social economy for the future of social and industrial policies, the SEAP affirms the importance of the general interest functions to which the social economy contributes, and it is therefore crucial to establish goals for improving collaboration between the public administration, social economy entities and participants in the social dialogue.

3.1.2.

With this in mind, the EESC sees a need to invest in strengthening ‘shared administration’ between public authorities and social enterprises working towards common interest goals within their respective areas of responsibility and remits. Forms of planning using inclusive methods of governance that recognise the role of social economy entities, particularly in local systems of cooperation between the social economy and local authorities, should therefore be encouraged. These innovative ways of working must meet the requirements of transparency, equal treatment, affordability and openness to different stakeholders, applying the principle of subsidiarity.

3.1.3.

These forms of collaboration seem to be particularly effective when establishing services of general interest because they allow better handling of competitiveness, developing and leveraging the collaboration and positive social impact accomplished by taking a ‘common goods’ approach.

3.1.4.

The EESC therefore supports the Commission’s intention to work towards improving access to the public contract market for social economy entities. Much progress has been made in relation to this, owing to the 2014 directive on public contracts (4). However, the EESC hopes that when reviewing the procurement directive — and particularly Article 77 thereof on the lighter regime for social services — the Commission will make a clearer distinction between the pursuit of the general interest and the delivery of the single market, so as to provide a more robust legal basis for collaboration agreements between public and social economy entities.

3.2.   State aid

3.2.1.

It is no secret that some of the sectors in which social economy entities are active, particularly social care, healthcare, education and culture, need sufficient public financial support, which should in any case be introduced without distorting market rules, where services provided by social economy entities are also provided by commercial enterprises.

3.2.2.

State aid control seeks to maintain a balance between the provision of support and a level playing field. The action plan highlights how public authorities and beneficiaries frequently fail to make the most of existing possibilities offered by flexibility with regard to state aid. This is certainly true and suggests the need for targeted investments in specialist training for public administrations on European state aid rules, particularly those on services of general economic interest (SGEI).

3.2.3.

Nevertheless, competition rules are not always a good match for issues such as the management of social services, especially healthcare and individual care services, which are based on solidarity rather than being market-oriented. In opinion TEN/605 (5), the EESC pointed out that ‘the lack of certainty or the substantial costs involved in fulfilling the requirements raise barriers that unduly prevent authorities from fully implementing SGEI policy’. The SEAP must be seen as an opportunity to improve the dialogue between the Commission, the Member States, local authorities and representatives of the social partners and of the social economy.

3.2.4.

The EU’s SGEI rules guarantee sufficient flexibility with regard to state aid rules. However, many public authorities pass up the possibility of applying the legal framework on public aid to SGEIs.

3.2.5.

The Commission’s proposal to set up webinars and workshops to help provide sufficient information on ways of accessing state aid is commendable but does not go far enough. More decisive regulatory intervention is needed, including through soft law, to clarify access requirements and the amount of support available under state aid for social economy entities, particularly with regard to the SGEI sector and aid for recruiting disadvantaged people under the General Block Exemption Regulation (GBER).

3.2.6.

The subsidies granted to social economy entities in their capacity as entities that help to deliver general interest services should be recognised as being compatible with the internal market. To this end, it would be worth reviewing the de minimis thresholds for aid issued to social economy undertakings for social actions and services of general interest.

3.3.   Investments and financial instruments

3.3.1.

According to the estimates given in the action plan, during the 2014-2020 programming period at least EUR 2,5 billion from the EU budget went towards supporting the social economy through a range of European programmes and funds. The EESC is pleased that the Commission intends to further increase the level of support for the 2021-2027 period, reducing the barriers for social economy entities to access European funds.

3.3.2.

An important goal for 2022 would therefore be to launch new financial products under the InvestEU programme, in order to mobilise private funding tailored to the needs of social economy undertakings.

3.3.3.

Besides the promotion of investments and financial instruments, simply accessing bank credit remains difficult for many social economy entities. For this reason, the EESC considers guarantee facilities for access to credit to be necessary. These facilities, which have been extensively tried and tested on SMEs, should also be extended systematically to social economy entities.

3.3.4.

The EESC proposes that every Member State be encouraged to establish, with the help of InvestEU, a dedicated ‘Guarantee fund for social economy entities’ that complies with specific criteria for assessing creditworthiness, supporting the introduction of appropriate indicators for evaluating social economy investments, which would also be useful in promoting innovative financial instruments.

3.3.5.

The EESC endorses the SEAP’s take on workers’ buyouts, pointing to the role of cooperatives formed by employees who take over companies that are in crisis and establish a cooperative. Workers’ buyouts are successful if the workers forming the cooperative can count on suitable funding mechanisms and the establishment of funds for the capitalisation of these enterprises. However, alongside these financial instruments it is essential for workers to be properly supported through training and skill-building activities. The EESC also urges the Commission to continue to work closely with the Member States to identify tools and solutions to remove obstacles and speed up legal procedures for transferring ownership of an enterprise to its employees after it closes, through worker cooperatives or other forms of worker-owned social economy enterprises.

3.4.   A tax policy which recognises functions that are in the general interest

3.4.1.

Social economy entities operate within a fragmented fiscal framework that is largely defined by the Member States. The EESC is pleased that the action plan stresses the need for tax provisions specific to the social economy, emphasising that few Member States to date have developed a dedicated and coherent fiscal framework for social undertakings.

3.4.2.

Coordinated fiscal harmonisation, inspired by good practices in Member States, would be useful and desirable, in particular for certain tax exemptions on undistributed profits, reductions on VAT, reductions on or exemptions from social insurance costs and tax reductions for gifts.

3.4.3.

The EESC is pleased that the SEAP proposes the publication of guidance clarifying the existing rules on the tax treatment of cross-border public-benefit donations, and the publication of a specific study on philanthropic donations in the EU; in this respect, the EESC believes that such guidance should include recommendations to Member States on how to recognise when resident public-benefit organisations are comparable to organisations based in another EU country.

3.4.4.

Finally and importantly, the social economy action plan must become a strategic instrument setting out meaningful measures for the benefit of social economy entities and local communities, accompanied by tax policies that are geared towards the stated social goals.

---

(1)  OJ C 318, 23.12.2009, p. 22.

(2)  OJ C 155, 30.4.2021, p. 20.

(3)  OJ C 194, 12.5.2022, p. 39.

(4)  Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).

(5)  OJ C 345, 13.10.2017, p. 45.

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — An EU Strategy on Standardisation — Setting global standards in support of a resilient, green and digital EU single market

(COM(2022) 31 final)

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1025/2012 as regards the decisions of European standardisation organisations concerning European standards and European standardisation deliverables

(COM(2022) 32 final — 2022/0021(COD))

(2022/C 323/08)

Rapporteur:

Sandra PARTHIE

Referral	a) European Commission, 2/5/2022 b) European Parliament, 14/2/2022 c) Council, 17/2/2022
Legal basis	a) Article 304 of the Treaty on the Functioning of the European Union b) Article 114 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	5/5/2022
Adopted at plenary	18/5/2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	186/1/3

1.   Conclusions and recommendations

1.1.

The EESC welcomes the European Commission’s Communication on the future of EU standardisation in the global context. The European Commission’s proposal rightly reflects the development of international standards and responds to changes that have taken place. Regarding the proposal in Article 10 of Regulation (EU) No 1025/2012 of the European Parliament and of the Council (1), the EESC welcomes a review of governance. The governance of European standardisation organisations (ESOs) needs to take into account the transparent, open, inclusive and fair participation of all relevant market players, consumers, social and environmental stakeholders, trade unions, SMEs and large companies.

1.2.

To ensure a broad societal consensus, it is essential to guarantee an inclusive, balanced approach that fully enables all interested and affected stakeholders to participate. At EU and Member State level, politics and standardisation organisations support each other by shaping framework conditions. The requirement for the European Standardisation Strategy to be inclusive is unique in the world and well worth reinforcing. At international level, the absence of inclusiveness as a cornerstone of international standardisation is a cause for concern.

1.3.

The EESC sees the danger that, in other regions in the world, standardisation has become an ‘industrial policy’ tool or geopolitical instrument. The European Union needs to be ready to adapt its approach in order to secure and increase the competitiveness of European companies and the protection of consumers. The EESC therefore welcomes the 22 proposed measures, including setting up a high-level forum to better coordinate stakeholder interests, creating the post of the ‘chief standardisation officer’, calling for governance reform in ESOs, setting standardisation priorities for the twin green and digital transformations, and speeding up standardisation processes.

1.4.

It is necessary to bring together the ‘bottom-up approach’ of market-driven standards and the political-strategic ‘top-down approach’ through closer cooperation between governments/politics, industry and other stakeholders in order to develop common European strategies and uphold democratic values. To this end, a continuous exchange between the European Commission, ESOs, national standardisation bodies, industry and civil society stakeholders must be established.

1.5.

The EESC also supports calling on ESOs to modernise their governance in order to fully represent the European public interest and democratic values, as well as the interests of SMEs, environmental and social stakeholders, trade unions, and civil society and users, and to facilitate access to standards.

1.6.

The European standardisation strategy mentions several training and educational initiatives aimed at researchers, young professionals and practitioners, which seek to promote the development of skills in the standardisation field. The EESC believes these proposals to be of key importance, especially for SMEs and micro enterprises and in order to set a framework for investing in talent, and strongly supports their broad and swift introduction. It underlines the need for increased funding from European and national authorities to all those involved in standardisation, such as trade unions, civil society organisations and companies, to improve their abilities to participate in standardisation work.

2.   Context of the Commission proposals

2.1.

Standards are at the core of the EU single market. Over the last 30 years, the European standardisation system has delivered more than 3 600 harmonised standards allowing companies to demonstrate compliance with EU law. European standards have delivered great benefits, creating a level playing-field in the single market for businesses and increasing consumer confidence. The contents are defined in the technical committees, where the state has a right to participate, but has no further-reaching rights of intervention. In some EU Member States, there are additional regulations for processing projects of public interest. Because harmonised standards are part of EU law (2), they must be written according to the democratic principles, with involvement of all stakeholders (including civil society, consumer, social, environmental and trade union interests and SMEs) and as such ensuring a balanced decision making process inside the national, European (and international) standardisation organisations.

2.2.

European standardisation operates within an increasingly competitive global context. Europe’s competitiveness, technological sovereignty, ability to reduce dependencies and protection of EU values — including our social and environmental ambitions — will depend on how successful European actors are in standardisation at international level. This requires resources/expertise from the European stakeholders, without which it is not possible to uphold European lead in the international standardisation.

2.3.

The EU’s ambitions towards a climate-neutral, resilient and circular economy cannot be delivered without European standards. In order to remain a global standard setter, the EU must have a strong global footprint in standardisation activities, and lead work in key international forums and institutions.

2.4.

In its standardisation strategy (3), the Commission outlines its approach to standards both within the Single Market and globally. The strategy is accompanied by a proposal for an amendment to the Regulation on standardisation (4), a report on its implementation (5), and the 2022 annual Union work programme for European standardisation (6). The strategy aims to strengthen the EU’s global competitiveness to enable a resilient, green and digital economy, and to enshrine democratic values in the application of technology.

2.5.

In new and emerging technologies, the European standardisation system often fails to deliver in a timely manner, and thus loses the important ‘first mover’ advantage through standardisation. This strategy proposes a set of actions to put standards back at the core of a resilient, green and digital EU single market, and to strengthen the global role of the European standardisation system. At EU and national Member State level, politics and standardisation organisations support each other by shaping these framework conditions. This cooperation has proven successful and has been the basis for economic success and international market access for European companies.

2.6.

The Commission is also proposing an amendment (7) to Regulation (EU) No 1025/2012 on standardisation to improve governance in the European standardisation system. While the European system will remain open, transparent, inclusive and impartial, the proposal prescribes that standardisation requests of the Commission to the European standardisation organisations must be handled by the national standardisation bodies.

2.7.

In line with Regulation (EU) No 1025/2012, the Commission has published a communication setting out the annual European Union work programme for European standardisation for 2022, which outlines the actions that the Commission intends to initiate over the course of 2022 to enhance the openness, transparency and inclusiveness of the European standardisation system (ESS).

2.8.

Under Article 24(3) of Regulation (EU) No 1025/2012, the Commission shall report on its implementation every five years. The Commission presented a second report (8), mainly covering 2016-2020, with some updated facts and figures through to 2021. It shows that the European standardisation system improved in some aspects — e.g. with regard to new IT tools — but that there is still room for improvement in other areas. This applies in particular to inclusiveness, the role of NSBs in the ESS, and the delivery time of HENs to the Commission.

3.   General comments

3.1.

The EESC welcomes the European Commission’s Communication on the future of EU standardisation in the global context. The European Commission’s proposal rightly reflects the development of international standards and responds to changes that have taken place. It aims to ensure a strong European voice and secure European interests in standard-setting procedures and structures. If Europe uses the momentum of the twin transition properly, it can become a ‘first mover’ in the areas of green and digital standardisation.

3.2.

Regarding the proposal in Article 10 of Regulation (EU) No 1025/2012, the EESC welcomes a review of governance. The governance of ESOs needs to take into account the transparent, open, inclusive and fair participation of all relevant European market players, consumers, social and environmental stakeholders, trade unions, SMEs and large companies. It has to reflect the legitimate scope of standardisation, avoiding undermining democratically legitimised legislation processes and excessive demands for standardisation.

3.3.

Traditionally, standards have been developed by industry. To ensure a broad societal consensus it is essential to guarantee a balanced approach that fully enables all interested and affected stakeholders to participate. At EU and Member State level, politics and standardisation organisations support each other by shaping framework conditions. The requirement for the European Standardisation Strategy to be inclusive is unique in the world and well worth reinforcing. At international level, the absence of inclusiveness as a cornerstone of international standardisation is a cause for concern.

3.4.

The EESC would like to point out the benefits of the New Legislative Framework (NLF) of the European Commission for using harmonised standards to concretise regulatory requirements. The EESC wishes to highlight that standards are not meant to shift regulatory power to private sectors. Socio-political considerations that fall within the remit of the social partners and/or the regulator should not be dealt with by ESOs and international standardisation bodies. The EESC stresses that the standardisation of services in particular requires careful consideration of democratic legitimisation. The content and complexity of services is extremely diverse, ranging e.g. from postal services to complex intellectual services, and cross-cutting standards cannot adequately take that into account.

3.5.

The EESC sees the danger that, in other regions in the world, standardisation has become an ‘industrial policy’ tool or geopolitical instrument. The European Union needs to be ready to adapt its approach in order to secure and increase the competitiveness of European companies and the protection of consumers. The EESC therefore welcomes the 22 proposed measures, including setting up a high-level forum to better coordinate stakeholder interests, creating the post of ‘chief standardisation officer’, calling for governance reform in ESOs, defining standardisation priorities for the twin green and digital transformations, and speeding up standardisation processes. The European and international standardisation system should be strengthened by these measures.

4.   Specific comments

4.1.

Standards create markets. The EESC believes that the European Single Market and granting third party access to this market is also a strategic asset. In order to secure the interoperability of products and services worldwide and across different economic and societal systems, we need to maintain the fundamental ‘one standard — one test — accepted everywhere’ principle. It must be ensured that standardisation processes that are driven by economic or third party political interests do not override democratically enacted legislation.

4.2.

The EESC believes that international standards, especially when transposed into European standards, must take into account European social values by ensuring that the international standardisation system is truly inclusive. In this context, the EESC calls for a more robust application of the Vienna (9) and Frankfurt (10) agreements concluded by the standardisation bodies, which aim to avoid European standards competing or even conflicting with international ones.

4.3.

Implementing existing commitments on standardisation in EU trade agreements, and cooperation on standardisation with like-minded partners in strategic areas and in international standardisation organisations are crucial success factors. The EESC believes that dialogue with the US should be strengthened via TTC — Trade and Technology Council cooperation, and that digital partnerships with Japan, Singapore and South Korea and other like-minded countries can be beneficial.

4.4.

It is necessary to bring together the ‘bottom-up approach’ of market-driven standards and the political-strategic ‘top-down approach’ through closer cooperation between governments/politics, industry and other stakeholders in order to develop common European strategies. To this end, a continuous exchange between the European Commission, ESOs, national standardisation bodies and industry must be established.

4.5.

The EESC also supports calling on ESOs and their member organisations to modernise their governance in order to fully represent the public interest and the interests of SMEs, environmental and social stakeholders, trade unions, and civil society and users, and to facilitate access to standards. However, it must be ensured that this review does not paralyse the ongoing standardisation work or lead to delays of products being placed on the market. The issue of standards made available for free needs to be discussed with all participating market players.

4.6.

The EESC wishes to point out that standards do not only regulate the technical aspect of a product, but can have an impact on people. Thus the EESC calls on the European Commission to better specify how EU Member States shall be held accountable for ensuring that civil society associations are able to actively participate in standardisation activities. The EESC calls on the European Commission to provide further financial support measures to help SMEs and societal stakeholders (such as consumer organisations) with fewer resources participate in standardisation processes in order to ensure balanced representation. They provide a broad variety of independent expertise and experience relevant for standardisation processes. The EESC also draws attention to the fact that, despite their voluntary nature, the non-application of standards can have severe negative effects, including creating liability and compliance problems.

4.7.

The EESC believes it important that all stakeholders, ESOs and other partners work together to immediately address the standardisation urgencies that have been identified, such as COVID-19 vaccine and medicine production, critical raw materials recycling, the clean hydrogen value chain, low carbon cement, chips certification and data standards. The EESC therefore calls on the Commission to hold talks with EU Member States and stakeholders before defining standardisation priorities so that important standards are not overlooked. This would ensure that ongoing standardisation work is not interrupted by new goals.

4.8.

The EESC fully supports accelerating standard-setting procedures, and proposes incorporating a legal check of standards at technical committee level and close cooperation with the harmonised standards (HAS) consultants at this stage of the process.

4.9.

The EESC warns that the proposed review of existing standards in the light of the objectives of the European Green Deal and the twin transitions must not lead to a massive rework of standards, which would delay the development of much needed new standards. Such a review will take up resources, which should come not only from large industry, but also from national authorities, research institutes, and environmental and social stakeholders, including trade unions.

4.10.

In this context, the EESC highlights the possibility of applying ‘equivalent alternative solutions’. This concept is extremely important, especially as regards innovation, and needs to be strengthened, enforced and better communicated in order to avoid hindering innovation because of potential liability claims. The EESC wishes to underline though that these solutions should not be used in the area of health and safety. ‘Equivalent alternative solutions’ should also be considered in public procurement as a tool for the uptake of standards.

4.11.

The EESC supports the proposal to set up a high-level forum to assist the Commission in anticipating upcoming standardisation priorities and engage with the European Parliament and Council to ensure political concertation on these priorities. However, it is crucial to provide for industry and relevant stakeholder participation in this high-level forum, and for consistency with the work of the EU Industrial Forum and the Industrial Alliances. However, the EESC calls on the Commission to clarify the relation of the proposed Excellence Hub on Standards with the other forums.

4.12.

The strategy mentions several training and educational initiatives aimed at researchers, young professionals and practitioners, which seek to promote the development of skills in the field of standardisation. These include a ‘standardisation booster’, ‘standardisation university days’, the dissemination of relevant material by the EU Academy, and the funding of standardisation projects abroad. The EESC believes these proposals to be of key importance, especially for SMEs and micro enterprises and in order to set a framework for investing in talent, and strongly supports their broad and swift introduction.

4.13.

In particular, the EESC encourages international cooperation on EU standards using EU programmes and funds (such as the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI-GE) and Horizon Europe), and supporting stakeholder participation in international standardisation abroad (SMEs, civil society, academics), e.g. in Africa as a positive initiative to counter-balance other regions’ engagements on the African continent. Standardisation strengthening should become one key element of the EU’s Global Gateway Initiative.

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(1)  Regulation (EU) No 1025/2012 of the European Parliament and of the Council of 25 October 2012 on European standardisation, amending Council Directives 89/686/EEC and 93/15/EEC and Directives 94/9/EC, 94/25/EC, 95/16/EC, 97/23/EC, 98/34/EC, 2004/22/EC, 2007/23/EC, 2009/23/EC and 2009/105/EC of the European Parliament and of the Council and repealing Council Decision 87/95/EEC and Decision No 1673/2006/EC of the European Parliament and of the Council (OJ L 316, 14.11.2012, p. 12).

(2)  Cfr Commission Communication COM(2018) 764.

(3)  COM(2022) 31.

(4)  COM(2022) 32.

(5)  COM(2022) 30.

(6)  OJ C 66, 8.2.2022, p. 1.

(7)  COM(2022) 32.

(8)  COM(2022) 30.

(9)  https://isotc.iso.org/livelink/livelink/fetch/2000/2122/3146825/4229629/4230450/4230458/01__Agreement_on_Technical_Cooperation_between_ISO_and_CEN_(Vienna_Agreement).pdf?nodeid=4230688&vernum=-2

(10)  http://www.iec.ch/about/globalreach/partners/pdf/IEC-CENELEC_Frankfurt_Agreement%7B2016%7D.pdf

Opinion of the European Economic and Social Committee on Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. The next generation of own resources for the EU Budget

(COM(2021) 566 final)

Proposal for a Council Regulation amending Regulation (EU, Euratom) 2020/2093 laying down the multiannual financial framework for the years 2021 to 2027

(COM(2021) 569 final — 2021/0429 (APP))

Proposal for a Council Decision amending Decision (EU, Euratom) 2020/2053 on the system of own resources of the European Union

(COM(2021) 570 final — 2021/0430 (CNS))

(2022/C 323/09)

Rapporteur:	Philip VON BROCKDORFF
Co-rapporteur:	Antonio GARCÍA DEL RIEGO

Referral	European Commission, 1/3/2022
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Economic and Monetary Union and Economic and Social Cohesion
Adopted in section	6/5/2022
Adopted at plenary	18/5/2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	144/2/7

1.   Conclusions and recommendations

1.1.

The EESC notes the consensus that is necessary to add new own resources to cover the debt repayment resulting from borrowing under the NextGenerationEU initiative without jeopardising the budgets of other EU programmes and instruments, or substantially increasing the Gross National Income (GNI)-based resource contribution. Although the Commission proposals as set out in the communication are deemed necessary, the EESC believes that the Commission should ensure that the design of the new system is based on achieving equity and fairness, efficiency, transparency, simplicity and stability, with a focus on competitiveness and applying solidarity where necessary. In particular, the EESC considers it paramount to support households and businesses, where necessary, and strongly recommends more targeted impact assessments on a country-by-country level, as well as for specific industries, to determine any negative effects on households and on the overall competitiveness of the EU economy.

1.2.

While the own resource based on the Emissions Trading System (ETS) is an essential tool in reducing greenhouse gas emissions, the EESC urges the Commission to ensure that it is carried out in a non-disruptive, cost-effective way. Moreover, the EESC notes the extension of the ETS to the maritime sector, the gradual increase of aviation allowances, and the inclusion of road transport and buildings. The EESC believes it plausible that a limited share of ETS revenues could flow into the EU budget. After all, this is a pan-European climate instrument that contributes to climate neutrality goals and strengthens the internal market. In this regard, there should be enough revenue to support sectors that are obliged to implement further measures to address climate change. Moreover, the EESC reiterates that the ‘polluter pays’ principle must apply in all countries.

1.3.

Considering that the EU ETS and the Carbon Border Adjustment Mechanism (CBAM) are interlinked, the EESC believes that they should be considered in the same spirit. While the EU ETS can cause carbon leakage, a CBAM would counter such leakage by putting a price on the greenhouse gas emission content of imports. However, the EESC cautions against designing a CBAM system that places European manufacturing and other businesses at a competitive disadvantage.

1.4.

The EESC is also of the opinion that care must be taken to safeguard the predictability and transparency criteria, given that revenue from the EU ETS and the CBAM could be volatile.

1.5.

The Commission also proposes a third category of own resources, whereby Member States would provide a national contribution to the EU budget based on the share of residual profits from multinational enterprises re-allocated to each Member State. The EESC considers this an appropriate base for EU own resources, fulfilling the fairness criteria, as firms would pay a proportion of residual profits wherever they operate and generate profits. However, the EESC believes that a level playing field in the international tax system that does not place EU businesses at a competitive disadvantage is necessary. The implementation of the new rules should be made at the same time as the EU’s major trading and competitor nations. Moreover, the new rules should be applied in line with harmonised definitions and standards. The EESC also highlights the volatility associated with corporate tax revenues and the difficulties of estimating future revenues from this own resource, and highlights the fact that the final implementing details of the agreement are still under discussion. In this sense, the EESC believes that it is premature to count these new resources as permanent EU resources, mainly when consideration must be given to the possibility of EU Member States having to pay a proportion of tax revenues to third jurisdictions.

1.6.

The EESC warns that tax reform and/or compensatory mechanisms at national level might be needed to neutralise any additional tax burdens on households and businesses.

1.7.

Finally, the EESC considers that the need for both a strong political will to deepen EU integration and a clear roadmap of the future of Europe is necessary for the proper design and smooth implementation of a new own resources system. This is all the more important in light of the war in Ukraine, and thus the Commission’s proposal may require revisiting at some stage. The EESC is committed to continuously reviewing and monitoring the uncertain evolution of the human and material impacts of this egregious invasion, with a view to assessing the best course of action in due time.

2.   Background

2.1.

The European Commission is proposing to establish the next generation of own resources for the EU budget by putting forward three new sources of revenue: the first, based on revenues from the revised ETS; the second, drawing on the resources generated by the proposed EU CBAM; and the third, based on the share of residual profits from multinational enterprises that will be re-allocated to EU Member States under the recent OECD/G20 preliminary agreement on a re-allocation of taxing rights (‘Pillar One’), that still needs to be finalised. From 2026 to 2030, these new sources of revenue are estimated to generate a total of up to EUR 17 billion annually for the EU budget.

2.2.

The new own resources will help to repay the funds raised by the EU to finance the grant component of NextGenerationEU. Specifically, the new ETS is intended to contribute towards financing the Social Climate Fund (SCF), as considered under the Fit for 55 package. Financing the Social Climate Fund is an important objective of the proposal. This Fund would contribute to a socially fair transition and support vulnerable households, transport users and micro-enterprises to finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility, as well as temporary direct income support, where appropriate.

2.3.

The Fit for 55 package of July 2021 aims to reduce net greenhouse gas emissions in the EU by at least 55 % by 2030 compared to 1990 levels. The objective is to reach climate neutrality by 2050. This package includes a revision of the EU ETS, which in future would also apply to the maritime sector, allow for an increase in the auctioning of aviation allowances, and introduce a new system for buildings and road transport.

2.4.

The new ETS would contribute to ensuring a smooth transition to a decarbonised economy, and one that is mindful of the most vulnerable in society. At present, most revenues from the auctioning of emission allowances are transferred to national budgets. With the proposed new system, 25 % of the revenue from EU emissions trading would flow into the EU budget, and estimated revenues for the EU budget would average around EUR 12,5 billion per year in the years 2026-2030.

2.5.

The Commission is also proposing a CBAM aimed at reducing the risk of carbon leakage into the EU by putting a carbon price on imports, corresponding to what would have been paid had the goods been produced in the EU. This mechanism will apply to a targeted selection of sectors and has been deemed by the Commission to be fully consistent with the WTO rules. In line with the proposal, the phasing in of the CBAM will take place concurrently with the phasing out of the ETS re-allocation scheme, which was always envisaged to be temporary in any case. Goods imported to the EU would pay a charge which reflects their ‘carbon content’ — that is the CO2 emissions generated by their production (the overall price on these CO2 emissions is the same as the EU carbon price). On the other hand, a rebate (reflecting the difference between the carbon price paid for their production in Europe and the carbon price in the destination market) will not apply on goods exported to other countries. To compensate for this, the Innovation Fund (IF), with revenues derived from the auctioning of 450 million ETS allowances from 2020 to 2030, will help European industry adapt to the decarbonisation process. For 2020-2030, the Fund may amount to around EUR 10 billion, depending on the carbon price. The IF is a key funding instrument for delivering the EU’s economy-wide commitments under the Paris Agreement, and supporting the European Commission’s strategic vision of a climate-neutral Europe by 2050, as recognised also in the European Green Deal Investment Plan.

2.6.

The Commission is proposing to allocate to the EU budget 75 % of the revenues generated from this CBAM, with revenues estimated at around EUR 1 billion per year on average in the years 2026-2030.

2.7.

The third source of revenue proposed would be generated from taxing a share of ‘residual profits’ from the world’s largest multinational enterprises, as agreed last year by members of the OECD/G20 inclusive framework on base erosion and profit shifting, the details of which have yet to be finalised. This involves a two-pillar solution to tackle tax transfers from one country to another, make international tax rules more consistent, and ensure that profits are taxed where economic activity and value creation occur. The Commission proposes an own resource equivalent to 15 % of the share of the residual profits of in-scope companies that are reallocated to EU Member States. However, the re-allocation of tax revenues to third countries is not taken into account.

2.8.

The next step is for the Commission to draft an EU directive once the details of the OECD/G20 inclusive framework agreement on Pillar One are finalised. This process shall complement the Pillar Two Directive for which the Commission recently adopted a separate proposal (1). Pending the finalisation of the agreement, revenues for the EU budget are estimated between EUR 2,5 and 4 billion per year.

2.9.

To integrate the proposed new own resources into the EU budget, the EU will need to amend two important pieces of legislation. First, the Commission proposes to amend the Own Resources Decision to add the three proposed new resources to the existing ones. Second, the Commission also proposes a specific amendment to the Regulation on the current long-term EU budget for the period 2021-2027, also known as the Multiannual Financial Framework (MFF) Regulation. This modification offers the legal possibility to already start repaying loans for NextGenerationEU during the current MFF. At the same time, it proposes to increase the relevant MFF spending caps for the years 2025-2027 in order to align the additional spending with the SCF.

2.10.

The Own Resources Decision must be approved unanimously in the Council, after consulting the European Parliament. The decision can enter into force once it has been approved by all EU countries in accordance with their constitutional requirements. The MFF Regulation must be adopted unanimously by the Council, after obtaining the approval of the European Parliament.

3.   General comments

3.1.

There is no doubt that to repay the funds raised by the EU to finance the grant component of NextGenerationEU and the SCF, a financial model of own resources is needed. However, the implementation of this financial model remains challenging. The EESC also notes that the Commission proposal stabilises a set of rules by which additional national contributions from Member States would be allocated to the EU budget. In the event of a shortfall, the current system of allocation based on GNI would continue to be applied. However, the EESC notes that in 2023 the Commission will propose a new set of own resources.

3.2.

In any event, it is the EESC’s view that the proposal under consideration reflects the current revenue collection system, and would continue to rely very heavily on Member State contributions. However, the EESC acknowledges that extending the own resources model would provide the funds to react more effectively to economic shocks and support the financing of sustainable growth initiatives and economic recovery.

3.3.

All in all, the own resources model would also boost the fiscal capacity of the Economic and Monetary Union, possibly increasing economic convergence, and helping to mitigate asymmetric macroeconomic shocks. Drawing from own resources would further strengthen policy effectiveness with funding strictly linked to the EU’s targets in climate change and economic sustainability, for example. The link between EU policy objectives and its financing sources in the selection of forms of own resources is an important consideration and one which the EESC supports.

3.4.

The EESC acknowledges that identifying own resources is a challenging task and that the options under consideration may have their own particular drawbacks (particularly in terms of sufficiency, stability, or efficiency). Hence, it is necessary, as proposed by the Commission, to have a system that combines different own resources in order to minimise, for example, fluctuation in the influx of own resources. A mix of own resources also contributes toward a more fairly distributed financial burden among Member States.

3.5.

The EESC is also of the view that efficiency in the administration of own resources is critical. However, this must be matched by efficiency and effectiveness on the expenditure side at all stages. This applies in particular to spending on the SCF (2), which is intended to mitigate the negative social effects arising from higher carbon prices in transport and buildings’ heating systems. The EESC has already expressed its concerns in this connection particularly on the costs of an emissions trading system for buildings and transport which could outweigh the desired benefits and could lead to uncontrolled price spikes. The EESC has also referred to the huge challenge of designing an effective and fair compensation mechanism in an EU comprising 27 Member States with often very different socioeconomic and climatic contexts.

3.6.

The EESC notes that as things stand, Member States have used the ETS auctioning revenues for climate action and to boost investment in emissions trading sectors, thus speeding up emissions reductions. With parts of ETS revenues being used to repay the grant component of NextGenerationEU, the EESC cautions against possible financial constraints that would limit further support to the European economy and population during the transition towards carbon neutrality.

3.7.

The EESC welcomes the IF and its objective to helping businesses invest in clean energy and clean industry. However, the EESC has expressed doubts as to whether this fund will maintain and strengthen the EU industry’s competitive position.

3.8.

Whereas the EESC generally agrees with the three new sources of revenue as proposed by the Commission, the EESC warns of impacts that the additional revenue could have on households and businesses. Hence, it may be necessary to couple any additional tax burden with a tax reform or compensatory mechanisms at national level. In addition, the EESC warns of the impact of higher energy prices for households and businesses caused by the war in Ukraine. These added costs and their social and economic effects could derail the Commission’s proposal. This is all the more important in light of the war in Ukraine, and thus the Commission’s proposal may require revisiting at some stage. Consequently, the EESC is committed to continuously reviewing and monitoring the uncertain evolution of the human and material impacts of this egregious invasion, with a view to assessing the best course of action in due time.

4.   Specific comments

4.1.

Whereas the EESC agrees that funding sources are necessary to effectively repay the NextGenerationEU, those funding sources need to be stable, socially fair and business-friendly. Stability is an absolute requirement, as are simplicity and certainty. More specifically, it should be ensured that the systems introduced, particularly the ETS and CBAM, be resilient to economic shocks. Additional burdens on households and businesses also need to be avoided, and the EESC will reserve its judgement on how the funding sources could impact both households and businesses. In this context, the EESC recommends more targeted impact assessments, on a country-by-country level, as well as for specific industries, to determine any negative effects on households and on the overall competitiveness of EU businesses. Assessing funds disbursed under NextGenerationEU would also be relevant.

4.2.

Whereas the EESC agrees that, following the OECD tax reform, Member States reallocate a proportion of residual tax revenues accruing to them to the Commission as an own resource, such a transfer should not give rise to new burdens for households or businesses. Where necessary, the EESC recommends coupling this transfer with a reform of taxes on other levels with the aim of not levying any additional charges on households and businesses.

4.3.

The EESC is of the view that the OECD international corporate tax pre-agreement is a major breakthrough in efforts to ensure that global corporate companies are taxed where economic activity and value creation occur. The EESC also believes that the new rules can bring stability and coherence to the international tax system. However, we believe that a level playing field in the international tax system should be maintained at all times. The implementation of the new rules should be made at the same time as the EU’s major trading and competitor nations. Moreover, the new rules should be applied in line with harmonised definitions and standards. The EESC also highlights the volatility associated with corporate tax revenues and the difficulties of estimating future revenues from this own resource, and highlights the fact that the final implementing details of the agreement are still under discussion. In this sense, the EESC believes that it is premature to count these new resources as permanent EU resources, mainly when consideration must be given to the possibility of EU Member States having to pay a proportion of tax revenues to third jurisdictions.

4.4.

The EESC considers the proposal to shift the ETS revenues from being essentially a national resource to an own resource a bold proposal. However, the EESC is concerned that this proposal does not incentivise a drastic reduction of pollution by making sure that polluters pay. Moreover, the EESC is of the opinion that the ‘polluter pays’ principle should be applied in all Member States alike. The challenge here remains that of how such revenues would be re-invested in a way that would be beneficial for communities. Also, the impact of this proposal on sectors such as the property market needs to be assessed on a country-by-country or region-by-region basis, as planning rules often vary and the cost of energy efficiency could lead to higher property prices. The EESC welcomes the temporary solidarity adjustment mechanism, which helps to ensure a fair own resource contribution from all Member States, with an upper and lower boundary applied in relation to the GNI key. This will avoid some Member States contributing disproportionally to the EU budget relative to the size of their economy, as Member States transit towards more sustainable economies. On the other hand, the EESC expresses its concern that, in the event that the ETS scheme is only partially implemented, the SCF would be put in danger, and foresees the risk of giving Member States an excuse to blame Europe for unpopular measures.

4.5.

The EESC is also of the view that the proposed new own resources need to support EU policy goals, particularly in regard to the single market, competitiveness and sustainable growth, whilst resulting in welfare improvements for EU citizens.

4.6.

Another relevant consideration is that the financial burden of the proposals must be fairly distributed among Member States. The EESC highlights the structural differences among Member States, with any one proposal affecting Member States differently. The EESC welcomes how the SCF will be allocated nationally based on the relative wealth on a country-by-country and region-by-region basis. However, fairness in the way the proposals are implemented across the EU is absolutely necessary. Equally important is that the calculation, transfer and control of the new own resources do not lead to an excessive administrative burden for the European Commission, Union institutions or national administrations.

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(1)  Proposal for a Council Directive on ensuring a global minimum level of taxation for multinational groups in the Union (COM (2021) 823 final).

(2)  OJ C 152, 6.4.2022, p. 158.

Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the 8th Cohesion Report: Cohesion in Europe towards 2050

(COM(2022) 34 final)

(2022/C 323/10)

Rapporteur:	Krzysztof BALON
Co-rapporteur:	Gonçalo LOBO XAVIER

Referral	European Commission, 2.5.2022
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Economic and Monetary Union and Economic and Social Cohesion
Adopted in section	6.5.2022
Adopted at plenary	19.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	132/0/1

1.   Conclusions and recommendations

1.1.

The European Economic and Social Committee (EESC) stresses that social, economic and territorial cohesion is an objective enshrined in the Treaty on the Functioning of the European Union (TFEU) and that, in the longer term, meeting this objective will be key to achieving a climate-neutral continent by 2050. At the same time, the most serious challenge in the short and medium term, including for cohesion policy, is Russia’s aggression against Ukraine, which is in fact also an act of aggression against the European Union.

1.2.

In this context, given that Ukraine has applied for EU membership and that Ukrainian civil society strongly supports European integration as soon as possible, the EESC calls for Ukraine’s accession to the EU as soon as possible and for cohesion policy and its financial instruments to be adapted accordingly in the coming years in order to meet the challenges of the country’s post-war reconstruction. To this end, the Committee proposes the swift establishment of a separate European Union fund for the reconstruction and development of Ukraine.

1.3.

At the same time, the Committee urges the Member States, the EU’s regions and civil society organisations to make the most effective and rapid use of the possibilities to support Ukrainian refugees created by the Regulation of the European Parliament and of the Council on Cohesion’s Action for Refugees in Europe (CARE), proposed by the European Commission on 8 March 2022 (1), in conjunction with the revision of the REACT-EU Regulation proposed by the Commission on 23 March 2022 (2). This support should primarily be distributed by civil society organisations, including specialised NGOs.

1.4.

Another important challenge is overcoming the effects of the current pandemic crisis. In particular, cohesion policy must take into account the fact that the negative impact of the pandemic has generally been greater in less developed regions and among disadvantaged social groups. This situation justifies ‘positive discrimination’ in decisions on investment and distribution of European Union funds.

1.5.

The EESC agrees with the conclusions set out in Chapter 5 of the Commission communication, especially on tackling poverty and social exclusion in the context of climate policy, boosting investment in education, as well as in research and innovation, providing an effective response to demographic change, strengthening cross-border cooperation, including in the area of infrastructure, providing universal access to services of general interest also in rural areas, ensuring simple and flexible administration of funds, and consistently complying with the partnership principle, particularly in relations with organised civil society.

1.6.

The EESC is in favour of applying the additionality principle cautiously and implementing ex ante conditionalities in such a way that regions without alternative sources of funding are not discriminated against; economic and social convergence should mean convergence with the best.

1.7.

The EESC considers a new fiscal policy approach to be necessary, promoted from the European level, which reinforces the established cohesion objectives. To do this, it is necessary to promote a fiscal policy that takes into consideration ending the competition that is currently established between countries within Europe. Otherwise, the existing disparities between the fiscal policies of the Member States may increase the risk of the existence of a ‘two-speed Europe’. Moreover, an in-depth reform of the fiscal rules is necessary, focussing on the sustainability of the public debt of the countries, on mechanisms of European economic governance and on a more equitable and progressive European tax collection.

1.8.

The pandemic crisis has shown that territorial, economic and social cohesion should be accompanied by political cohesion. In crisis situations, it is necessary to strengthen the coordinating role of the EU institutions, including in areas where the Treaties do not provide for EU powers. This is a key issue both for the functioning of the common market and for rebuilding and increasing resilience, and also for fostering European solidarity and identity.

1.9.

Cohesion policy should be conducted in such a way as to ensure that the EU’s development and climate objectives can be met. However, at the same time, it should implement all 20 principles of the European Pillar of Social Rights (EPSR) fully and consistently. Delivering on climate policy requires not only effective use of the Just Transition Mechanism, but also complementary actions at regional level to safeguard jobs and make sure they are of good quality, through means such as social dialogue. Social protection systems also need to be consolidated as instruments to combat poverty and exclusion, while at the same time improving social cohesion.

1.10.

The success of cohesion policy depends on involving social economy entities as widely as possible in implementing it, particularly those providing services of general interest, including for people with disabilities and other socially disadvantaged groups. These entities should ensure, in cooperation with employees and volunteers, a high degree of social participation and fairness, and support the digital transition and environmental protection. These entities should be given favourable conditions to develop through specific financial support from European funds, favourable treatment in public procurement rules, as well as simplification of rules, a significant reduction in unjustified control activities and getting rid of bureaucratic requirements in individual Member States.

1.11.

Making progress on digitalisation is an important element of cohesion policy. The digital transition should contribute not only to greater economic productivity, but also to better educational attainment and social participation by all people living in the EU, including disadvantaged groups. To this end, it is necessary to ensure universal access to broadband internet as a free public service.

1.12.

The EESC points out that other parts of the infrastructure are needed, too, for effective use of technologies throughout society and entrepreneurs. This must be addressed by Member States when making investment decisions.

1.13.

The EESC calls on the Member States and the EU’s regions to involve the social partners and other civil society organisations as broadly and genuinely as possible in shaping cohesion policy and monitoring its effects. This inclusion will also help measure the extent to which cohesion policy objectives have been achieved, which should not be based solely on quantitative indicators, but also on quality indicators (measuring development, not just growth). It is extremely important for the European Commission to continuously monitor implementation of the partnership principle in the Member States, as full and transparent application of this principle has a positive impact on ensuring more effective and efficient use of the EU budget.

1.14.

Irrespective of the participation of civil society organisations and the EESC itself in the regularly held Cohesion Forums, the Committee proposes organising an annual event on implementing cohesion policy with representatives of the social partners and other civil society organisations alongside the European Council meeting.

2.   General comments

2.1.

The EESC welcomes the Commission’s Communication on the 8th Cohesion Report: Cohesion in Europe towards 2050. The report is a much needed source of information on the efforts undertaken towards economic, social and territorial cohesion and the problems associated with achieving cohesion. The new document is all the more important in that more than four years have gone by since the previous (7th) report. Given when it was published, the Commission’s communication does not take into account the effects of the Russian aggression against Ukraine, which is essentially an act of aggression against the European Union and the most serious challenge for cohesion policy in the short and medium term, both in the context of the refugee crisis and the post-war reconstruction and European integration of Ukraine.

2.2.

Given that Ukraine has repeatedly expressed a desire to join the European Union, the staunchly pro-European stance of Ukrainian civil society and the formal membership application to the EU, the Committee is strongly in favour of Ukraine joining the European Union without delay and therefore calls for cohesion policy and its financial instruments to be adapted accordingly in the coming years, including the swift establishment of a separate fund for the reconstruction and development of Ukraine.

2.3.

At the same time, the Committee urges the Member States, the EU’s regions and civil society organisations to make the most effective and rapid use of the possibilities to support Ukrainian refugees created by the Regulation of the European Parliament and of the Council on Cohesion’s Action for Refugees in Europe (CARE) (3), proposed by the European Commission on 8 March 2022. Action is also needed so that savings generated in the 2014–2021 financial perspective and the REACT EU instrument can be quickly and flexibly redirected to directly support refugees, particularly in countries bordering Ukraine, and to set up a separate fund for this purpose in case the funds currently available are insufficient. The CARE instrument should assure funds for increasing the operational capacity of social partners and other civil society organisations involved to represent the Ukrainian refugees in their path to labour market insertions.

2.4.

In this context, the Committee strongly welcomes the proposal of the Commission (4) to amend the REACT-EU regulation so that a higher share of the increased pre-financing resources should be allocated to the Member States that are confronted with the largest number of arrivals of persons fleeing Ukraine, either as transit countries or as countries of final destination.

2.5.

Given the massive contribution made so far by civil society organisations from EU Member States bordering Ukraine to provide support for Ukrainian refugees, which goes far beyond the help provided by public authorities, the EESC calls on the Member States to significantly step up their organisational and financial support for these organisations, including from European Union funds.

2.6.

Overcoming the current pandemic crisis also poses a very serious challenge. The report stresses that the pandemic has led to the greatest recession since 1945, particularly in sectors that rely on personal interaction (such as tourism), and has drastically changed the nature of work, education and social life, as well as the situation in border regions. Overall, the pandemic has had a greater negative impact in less developed regions, which slowed down the pace of convergence.

2.7.

The EESC considers that Cohesion Policy should cover all essential policies: among others, fiscal policies. In this context the EESC observes that the existing disparities between the fiscal policies of the Member States are a factor that contributes to the existence of the two speeds of development in Europe. A tax policy focused on cohesion must put an end to the competition between 27 different tax systems of the Member States, which allow multinationals such a profit maximising, which contributes to chronic inequalities. Therefore, an in-depth reform of the fiscal rules is necessary, focussing on the sustainability of the public debt of the countries, on mechanisms of European economic governance and on a more equitable and progressive European tax collection.

2.8.

Moreover, the Committee is concerned that the reintroduction of key provisions of the Stability and Growth Pact, planned for 2023, will have a negative impact on cohesion.

2.9.

The EESC believes that the description of the challenges facing cohesion policy set out in the Commission communication is comprehensive and accurate, and agrees with the conclusions set out in Chapter 5 therein. The EESC considers it particularly important to:

2.9.1.

counteract pressure on democracy and its values, in such ways as developing participatory democracy and active involvement of local actors, including those from the social economy sector, social partners and other civil society organisations, in planning economic and social development, and to consistently apply the principles of partnership in cohesion policy;

2.9.2.

expand the Just Transition Mechanism, particularly by taking into account the social costs of mitigating and adapting to climate change, in such ways as fighting poverty and social exclusion through close cooperation with social partners and other civil society organisations;

2.9.3.

invest more in skills, stimulate people’s creativity and entrepreneurship throughout their lives, particularly through education, upskilling and lifelong learning geared towards the processes of the technological, green and digital transformation, and significantly improve the level of formal education in regions where it is still unsatisfactory, including in rural areas and marginalised regions. In doing so, particular attention should be paid to improving the lifelong learning situation in small and medium-sized enterprises and for irregular workers;

2.9.4.

increase investment in R & D, thereby supporting innovation that can help less developed regions to grow, as well as the overall system for supporting them at regional level, as under the smart specialisation strategies (5);

2.9.5.

respond effectively to demographic changes, in such ways as supporting the employment of people belonging to groups with lower employment rates, such as young people without sufficient work experience, older people, people with lower professional skills and migrants from outside the EU;

2.9.6.

strengthen cross-border and interregional cooperation, particularly in developing climate-friendly railway infrastructure in border areas and consistently maintaining open borders between Member States, even in times of crisis;

2.9.7.

strengthen urban-rural links, including in order to ensure all EU citizens access to services of general interest, which are often concentrated around urban areas;

2.9.8.

ensure that the use of funds under the Recovery and Resilience Facility is fully compatible with the implementation of cohesion policy through the proper use of resources, including by closely coordinating the use of resources from different funds;

2.9.9.

streamline cohesion policy for beneficiaries through simplification and flexibility in implementing the funds that should be used to achieve its objectives. It is also necessary to build on the experience of applying simplifications under the Recovery and Resilience Facility and to pay particular attention to make sure that small civil society organisations are able to acquire, implement and account for projects financed by cohesion policy more easily.

2.10.

Enlargement of the Schengen area in the countries that are not already in and which are respecting all the legal requirements will have and direct impact on consolidating complementarity, competitivity and cohesion of the EU development, especially in the East of Europe.

3.   Specific comments

3.1.   Uneven progress in convergence: A ‘two-speed Europe’?

3.1.1.

It is absolutely essential that the pandemic crisis does not lead to the creation of a ‘two-speed Europe’ when it comes to convergence. The principle of additionality should therefore be applied with caution. Furthermore, ex ante conditionalities during the 2021–2027 programming period which introduce a number of circumstances that must exist in order for the funds to be mobilised must not lead to the exclusion of regions that do not have the possibility to obtain alternative funding for economic growth, climate policy and social development.

3.1.2.

There is still a need to transfer resources from richer to poorer regions. The process of economic and social convergence should mean convergence with the best.

3.2.   New risks for cohesion policies

3.2.1.

The UN has warned that the movements of refugees due to climate change will become more frequent. It is necessary to have new regulatory frameworks and new policies that allow their settlement in host countries, guaranteeing employment and social protection. The recent proposal for a Regulation on crisis and force majeure (6) does not contemplate these situations of environmental crisis that will cause millions of people to travel to the EU, and even within the EU.

3.2.2.

High rate of increasing food prices will create a supplementary risk for vulnerable regions and persons of the EU and thus a concern for the Cohesion Policy.

3.3.   The need to strengthen the coordinating role of the European Union institutions

3.3.1.

The pandemic crisis has shown that in order to reinforce territorial, economic and social cohesion, it is necessary to strengthen the coordinating role of the EU institutions, including in areas where the Treaties do not provide for EU powers. This applies in particular to crisis situations. While the European Commission has played a very positive role in supplying Member States with COVID-19 vaccines, it was the Member States themselves, generally without bilateral or EU-level consultations, that introduced restrictions on movement within the Schengen area and across the EU. The criteria for these restrictions were also set at national level. The EESC has already criticised such practices (7), stressing that maintaining open borders in the Schengen area is a key issue both for the functioning of the common market and for rebuilding and increasing resilience, as well as for fostering European solidarity and identity. The Committee believes that the pandemic crisis has shown that territorial, economic and social cohesion should be accompanied by political cohesion.

3.4.   Social inclusion as a prerequisite for the success of cohesion policy

3.4.1.

The number of people at risk of poverty and social exclusion in the EU increased by five million in 2020 as a result of the pandemic crisis. This poses a serious threat to social cohesion and therefore also to achieving the EU’s development and climate objectives. It is clear that cohesion policy should continue to serve these objectives and aim to support economic growth and competitiveness. However, at the same time, it should implement all 20 principles of the European Pillar of Social Rights (EPSR) fully and consistently. The implementation of the EPSR should be combined with social and civil dialogue, as well as the social involvement of employers and workers. Particular attention should be paid to support for children and young people, including in the area of education.

3.4.2.

The EESC underlines the importance of the impact of social security systems, which, despite the structural differences in the Member States, are an essential factor in achieving social cohesion and social inclusion of citizens. Furthermore, strengthening social security is part of the fight against poverty and exclusion and is based on common EU values.

3.5.   The role of the social economy, volunteers and services of general interest in the implementation of cohesion policy

3.5.1.

The Committee has already stressed (8) that social economy actors create and maintain high-quality jobs, promote equal opportunities, including for people with disabilities and other socially disadvantaged groups, ensure a high level of social participation and fairness and support the digital transformation and environmental protection.

3.5.2.

The fact that the social economy is a strategic ally in the process of strengthening the social dimension in Europe, and thus in achieving the objectives of social cohesion, has become particularly evident during the pandemic crisis. Therefore, measures relating to the social economy should have specific support from European funds under cohesion policy.

3.5.3.

Non-profit social enterprises and similar non-profit organisations should also be reinforced by providing special treatment in public procurement rules compared to public or commercial bidders. This should be the case for public procurement of services of general interest, in particular health, social and education services, especially as one of the core elements of social enterprises and non-profit organisations is often the unpaid involvement of volunteers who, in some Member States, account for over 2 % of GDP.

3.5.4.

From the social cohesion perspective, it should also be stressed that ‘volunteering has a value for individuals, communities, the environment, the economy and society at large as one of the most visible expressions of solidarity. It promotes and facilitates social inclusion, builds social capital and has a transformative effect on society’ (9).

3.6.   Cohesion policy, climate transition and employment

3.6.1.

After the COVID-19 pandemic crisis, the European Union, and the rest of the world, must face a climate and environmental emergency. If the pandemic crisis had not happened, the fight against the environmental emergency would be the main objective of the European Union, within the framework of the United Nations Sustainable Development Goals (10). In a recent own-initiative opinion (11), although focused on the field of education, the EESC reminded the European Commission and the Member States that they must better connect environmental policies with employment policies.

3.6.2.

However, the transition to a decarbonised economy also requires measures that facilitate a fair transition for the most vulnerable groups and geographical areas, since the climate emergency is a high-risk factor in terms of cohesion, due to the unequal effect it will have on different European geographical areas. The transition towards a more ecological production model that is socially beneficial will only be achieved by promoting the ecological transition of companies, work methodologies and the labour market in general. These efforts will create decent employment opportunities, increase resource efficiency, and build long-term, low-carbon, sustainable societies.

3.6.3.

For all these reasons, it is necessary to take into account policies, recommendations and guidelines that can contribute to improving the capacity of Member States, their laws and their policies to face the opportunities and challenges of the ecological transition and decarbonisation through a Just Transition Strategy, which serves as an action guide to optimise benefits and minimise risks regarding employment, working conditions and social protection.

3.6.4.

Access to affordable housing, capacity to assure a decent life for youth and their families, assuring a work and personal life ethical balance, stable employment opportunities, adequate working conditions and financial and digital inclusiveness are important for youth and the future of the EU sustainable development.

3.6.5.

However, more steps must be taken to complement the Just Transition Fund, particularly at regional level, in order to protect and guarantee high-quality jobs. The role of social dialogue and the full engagement of the social partners is very important in this regard, including through their conclusion of collective agreements. Moreover, the Cohesion Policy should approach instruments such as collective bargaining for reducing inequalities and supporting sustainable development.

3.7.   Digital transformation and education

3.7.1.

Cohesion policy will increasingly be linked to the digital transformation. However, as the Commission’s report highlighted, only 2/3 of urban residents and 1/6 of rural residents have access to very high-speed internet connections. The EESC has already stressed (12) that the digital transformation must not only lead to growth in productivity, but also to improvement of education and participation in political, social and cultural life for the whole EU population, including older people, people with disabilities, people at risk of social exclusion and other disadvantaged groups. Therefore, the EESC again calls for access to high-speed broadband internet for all EU residents to be provided for free as a public service, It should be noted that one way to guarantee a successful digital transformation is universal access to the internet and educational opportunities related to it. Free internet access is particularly important in order to ensure the proper functioning of education in rural areas, which in many Member States is not on a par with educational establishments in cities.

3.8.   Cohesion policy and the quality of governance and rule of law

3.8.1.

For many years, the Committee has observed that in some Member States there is a need to improve coordination at regional level, or indeed to establish effective regional governance as a bridge between national and local government, able to delineate regional strategies which are important for regional development and convergence. Central government is frequently unable to interpret the needs and priorities of the regions, but in some cases it does not give the requisite powers to regional authorities, which merely provide a sounding board for the national political authority, without any added value for the region (13). In this context, European Union funds should also be used better to build the capacity of local and regional public authorities.

3.8.2.

Furthermore, in many cases the participation of social partners and other civil society organisations in decision-making is marginal: the opinions of the entities that best understand the real situation and issues are not taken into account during consultation.

3.8.3.

Another concern, which has also been raised by civil society representatives, is the deterioration of the rule of law in some Member States, which indirectly has a negative impact on the quality and effectiveness of cohesion policy measures.

3.8.4.

The EESC calls on the Member States and the EU’s regions to involve the social partners and other civil society organisations as broadly and genuinely as possible in shaping cohesion policy and monitoring its effects. This inclusion will also help measure the extent to which cohesion policy objectives have been achieved, which should not be based solely on quantitative indicators, but also on quality indicators that help measure development and not just growth.

3.9.   Management of cohesion policy funds and projects

3.9.1.

The above considerations also apply to the planning, implementation and monitoring of programmes linked to implementing cohesion policy and to the process of selecting projects to be implemented. In this context, attention should be paid to the increasing fragmentation of public policies, which runs counter to a comprehensive, bottom-up approach to solving problems through cross-industry projects. Those involved in social and civil dialogue at regional and local level should play an important role in planning and coordination, as they know what the real needs are and how they can be met. Projects should be planned in such a way as to ensure flexibility in achieving their objectives, and the people managing these projects should have access to efficient channels of communication with the holders of European Union funds. Creating a clear synergy between the project contracted and the new economic realities concerning increased energy and raw material prices should be a preoccupation for delivering a proper absorption rate.

3.9.2.

Instruments such as Integrated Territorial Investments should be promoted, better financed and extended in the 2021–2027 programming period.

3.9.3.

Action should also be taken to limit bureaucracy, in particular by examining the results that were obtained and not the way they were obtained, since the latter entails complex administrative procedures both for beneficiaries and public administrations. In this context, the EESC calls on the European Commission to make sure that its regular assessment of the administrative costs of managing EU funds in specific Member States and the related assessments of unjustified increases of requirements for using the funds (gold plating) at national or regional level lead to consequences for those Member States and regions.

3.10.   Implementing the partnership principle

3.10.1.

It is extremely important for the Commission to continuously monitor implementation of the partnership principle in the Member States. The legal basis for this principle is Article 8 of the new framework regulation (14), and its implementation is described in the European Code of Conduct on Partnership, Commission Delegated Regulation (EU) No 240/2014 (15). It is based on close cooperation between the public administrations of the Member States in planning and implementing programmes co-financed by the European Union with a wide range of partners, particularly the social partners and other organisations representing civil society. The full and transparent application of this principle has a positive effect on increasing public engagement and civil society involvement, as well as on planning more relevant and complementary actions, thus promoting a more effective and efficient use of the EU’s budget. In this context, the EESC welcomes the fact that the European Commission has drawn up a document on implementing the partnership principle in the 2021–2027 programming period in order to review the European Code of Conduct on Partnership.

3.11.   Cohesion Forum

3.11.1.

The Committee welcomes the results of the 8th Cohesion Forum, which took place on 17–18 March 2022, with the participation of civil society organisations and the EESC itself.

3.11.2.

The EESC has repeatedly proposed (16) that cohesion policy and the European funds supporting it should be examined annually in the context of a dedicated European Summit. In this context, the Committee stands ready to organise an annual event dedicated to implementing cohesion policy, with the participation of representatives of the social partners and other civil society organisations alongside the European Council meeting.

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(1)  COM(2022) 109 final.

(2)  COM(2022) 145 final.

(3)  COM(2022) 109 final.

(4)  COM(2022) 145 final.

(5)  https://ec.europa.eu/regional_policy/sources/docgener/informat/2014/smart_specialisation_en.pdf

(6)  Proposal for a Regulation of the European Parliament and of the Council addressing situations of crisis and force majeure in the field of migration and asylum (COM(2020) 613 final).

(7)  OJ C 155, 30.4.2021, p. 45.

(8)  OJ C 429, 11.12.2020, p. 131.

(9)  EESC opinion on Volunteers — Citizens building the future of Europe (own-initiative opinion) (OJ C 152, 6.4.2022, p. 19).

(10)  https://www.un.org/sustainabledevelopment/sustainable-development-goals/

(11)  EESC opinion Towards an EU strategy for enhancing green skills and competences for all (own-initiative opinion) (OJ C 56, 16.2.2021, p. 1).

(12)  OJ C 155, 30.4.2021, p. 45.

(13)  OJ C 248, 25.8.2011, p. 68.

(14)  Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).

(15)  Commission Delegated Regulation (EU) No 240/2014 of 7 January 2014 on the European code of conduct on partnership in the framework of the European Structural and Investment Funds (OJ L 74, 14.3.2014, p. 1).

(16)  OJ C 248, 25.8.2011, p. 68, OJ C 242, 23.7.2015, p. 43.

Opinion of the European Economic and Social Committee on ‘Proposal for a Council Recommendation on a European approach to micro-credentials for lifelong learning and employability’

(COM(2021) 770 final)

‘Proposal for a Council Recommendation on individual learning accounts’

(COM(2021) 773 final)

(2022/C 323/11)

Rapporteur:	Tatjana BABRAUSKIENĖ
Co-rapporteur:	Mariya MINCHEVA

Referral	European Commission, 21.1.2022
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Employment, Social Affairs and Citizenship
Adopted in section	3.5.2022
Adopted at plenary	18.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	204/2/4

1.   Conclusions and recommendations

1.1.

The EESC calls again on the European Commission and the Member States to strengthen adult learning (AL) policies to make quality and inclusive AL for life skills a right for all adults in order to meet and exceed the target of 60 % of AL participation per year. The effective implementation of the European Pillar of Social Rights (EPSR) also requires addressing skills mismatches and improving governance and financing for AL, including employee training. It is also important that investments, necessary reforms and effective social dialogue aiming to foster skills development, in line with the first principle of the EPSR on the right to training and lifelong learning (LLL), are embedded in the context of the European Semester.

1.2.

The EESC recalls the importance of its previous opinions on LLL and AL in relation to the initiatives on individual learning accounts (ILA) and micro-credentials (MCs). In particular, it stresses that ‘upskilling and reskilling are of the utmost importance in supporting the green and digital transitions of industries and they need to be seen as a social and economic responsibility to ensure inclusive training for quality jobs, and a just transition for all. Forward-looking industrial strategies, including effective skills policies, are needed to support upskilling and reskilling of the workforce. These can help ensure a just and socially fair transition to a climate-neutral economy through balancing the labour market that contributes to inclusive digitalisation and high-quality jobs. Companies need effective support to strengthen and finance their strategies for upskilling and reskilling their workforces to encourage innovation. At the same time, the overall economic and social interest should be respected. Collective agreements should determine access to different types of paid education leave for workers’ personal and professional needs’ (1). Where paid leave is not agreed between social partners and follows a government initiative, this should be financed by public resources.

1.3.

The rapid invention and spread of new technologies needs to be accompanied by effective upskilling and reskilling. Investment in AL and skills development can play a crucial role in economic recovery and building social Europe. Individual learning accounts can only be one of the approaches and financial tools considered by EU Member States and social partners. The proposed measures should not replace: the existing forms of training provision put in place by employers and public and private employment services; public support for education and training institutions; or other types of support. In particular, training funds managed by social partners are an effective way to provide training in response to needs identified at national and sectoral level.

1.4.

The supply of a sufficiently skilled workforce and improved employability is a key condition for businesses and society to prosper and grow, to employ people, and to contribute to the policy objectives set by the European Union. Already today, there are skills mismatches and labour shortages across several sectors and regions and these will continue to grow. In this regard, Member States and employers have an important role to play in financing and incentivising participation in training. Skills development must match the needs of the labour markets if Europe is to strengthen its long-term competitiveness and capacity to drive innovation, which is important for businesses and employees alike.

1.5.

Workers face numerous obstacles in accessing training. If individuals are given more control over their own training, it is important to ensure that they receive effective guidance and support to choose and to access training courses that are relevant to their needs. This would also ensure optimal investment in training as the training would closely match the identified needs of each individual. In the case of job-oriented training, a purely individualised approach may weaken the link between the financing and content of training provision thereby potentially resulting in training being less job-oriented and thus insufficiently tailored to employers’ needs.

1.6.

The EESC agrees with the tripartite ACVT opinion when it states that there is a need to tailor the conditions for access and entitlement to training to different situations and realities through an appropriate mix of arrangements. The EESC calls on the Commission to respect the division of competences and the principle of subsidiarity, as well as the national specificities and legal frameworks of each Member State. When adopting and implementing the proposals for ILA and MCs, these must be compatible with the existing CVET systems of the Member States, with the role of collective bargaining, the regulation of working conditions and holiday entitlements for employees.

1.7.

The EESC calls on the Commission and the Member States to respect existing national and sectoral instruments and funding schemes, and to differentiate between ‘right/entitlement’, terms which are still not defined by law or collective agreements in some countries and sectors, and ‘training account’. The EESC asks that the proposals ensure that all adults, especially the most vulnerable, have the right to access effective, quality and inclusive employee training, paid educational leave, full qualification, validation of informal and non-formal learning, and guidance and counselling. Member States are asked to improve their AL and CVET systems where necessary, following effective social dialogue and consultation with relevant stakeholders. The EESC welcomes the fact that ILA can be used for training, validation and career guidance.

1.8.

The EESC underlines the importance of quality standards in the training market, particularly with regard to MCs, and the possible advantages and disadvantages of different approaches to financing AL (e.g. ILA), including the cost-benefit relationship, the administrative burden and costs, achieved status change (higher formal qualification level), quality assurance, the labour market relevant outcome, the added value for career development and the participation rate of the key target group of low-qualified people. The EESC regrets that the Commission did not carry out an impact assessment on MCs as the proposal can have an impact on existing national arrangements, especially on qualifications and on collective agreements. In this regard, it is necessary to ensure effective social dialogue and effective consultation, including with organised civil society, on whether and how the European initiatives on ILAs and MCs can be of added value in improving national and sectoral training systems.

1.9.

The EESC stresses that the VET providers’ catalogue of MCs should be established with the involvement of the social partners and education and training providers based on the quality standards of the provision. The catalogue should include the learning outcomes of the MCs and their recognition by other education and training providers and by employers.

1.10.

The EESC recalls the importance of paid educational leave (2) also in line with ILO 140 (ratified in 11 Member States (3)), and notes that the proposal on ILA should be compatible with national systems when it asks the Member States to design ILA systems for labour market purposes only, as in several Member States paid education leave can also be used for the purposes of personal development or to complete a study programme (e.g. university degree).

1.11.

The EESC reminds the Commission and Member States that the effective involvement of the social partners in the governance of AL, employee training and paid educational leave systems is essential, including promoting joint actions among the social partners. It also stresses the importance of consulting the relevant civil society organisations on AL.

1.12.

The EESC calls on the Commission to support the exchange of good practices and mutual learning between Member States, with the involvement of the social partners. The focus should be on how best to ensure effective access to training and how to improve Member States’ AL systems and skills strategies in particular, as well as their financial mechanisms and types of training, including MCs. The EESC also asks for the tripartite ACVT to be involved in the follow-up to the proposals and for it to take an active role in reporting on the implementation of the initiatives and in setting up the monitoring framework in cooperation with the Employment Committee.

1.13.

The EESC calls on the Member States to link the initiatives on ILA and MCs to the implementation of the Council Recommendation of 19 December 2016 on Upskilling Pathways: New Opportunities for Adults (4). This would ensure that all low-skilled and low-qualified adults could develop their basic skills and professional skills and that they were guided and motivated to participate in training to improve their life and employability and to ensure that 80 % of adults have basic digital skills.

1.14.

The EESC reiterates that ILA and similar financial systems need to support access to recognised and validated training courses and to allow workers to participate in processes to have their skills and work experience validated. MCs need to be recognised by the relevant authorities with the involvement of the social partners. The EESC calls for the effective implementation of the Council Recommendation on the Validation of non-formal and informal learning (5) and for sufficient public funding to be allocated to validation systems in every EU country. By ensuring that training is recognised, employers and unions can help workers improve their qualifications and can contribute to their career development and a just transition in the labour market.

1.15.

The EESC considers it important that the initiatives address the upskilling and reskilling needs of adults and the workforce as a whole (workers/employees/self-employed persons) as well as other target groups (e.g. the long-term unemployed, inactive individuals, and specifically persons returning to work after parental leave (6), people with disabilities, retired people, women, young people under 30 and NEETs) so that they have effective access to quality and inclusive training. The specific situation of non-standard workers and the self-employed needs to be addressed urgently and appropriately, respecting the key role of social partners in terms of employee training. The role of companies in supporting their workers’ training is essential, as is that of the Member States in providing resources to ensure access to AL. As 90 % of job-related training in the EU is funded by employers (7), their commitment to and positive role in skills development needs to be fully acknowledged and supported by the EU.

1.16.

The EESC calls on Member States to explore possible instruments for portability of ILAs, for instance establishing bilateral agreements. The EESC requests the inclusion of a ‘governance system with the involvement of the social partners’ among the EU’s quality standards for MCs and asks for MCs to be considered alongside full qualifications and employee training. The EESC asks for training providers to publish catalogues of the MCs they offer, including the learning outcomes, and their policy on the recognition of micro-credentials by other providers and companies. Improving access to all forms of quality and inclusive education and training (including MCs) for all learners, including disadvantaged and vulnerable groups is important to ensure equal access to full study programmes and qualifications. Efficient support (financial and non-financial) must be provided to people in non-standard forms of work, to enable them to access courses, including MCs, for professional development and mobility, ensuring the accessibility and usability of training materials and tools, whether they are virtual or not according to Directive (EU) 2016/2102 of the European Parliament and of the Council (8).

2.   General comments

2.1.

On 10 December 2021 the European Commission published the Commission proposal for a Council Recommendation on Individual Learning Accounts (9) and Commission proposal for a Council Recommendation on Micro-credentials for lifelong learning and employability (10). These initiatives aim to support the EPSR Action Plan which sets a new target whereby at least 60 % of all adults should participate in training every year by 2030. This is in order to ensure that everyone has ‘the right to quality and inclusive education, training and lifelong learning’ (principle 1), ‘regardless of the type and duration of the employment relationship’ (principle 5), including ‘the right to transfer training entitlements during professional transitions’ (principle 4). It is also important for investments, necessary reforms and effective social dialogue aiming to foster skills development, in line with the 1st principle of the European Pillar of Social Rights on the right to training and lifelong learning, to be embedded in the context of the European Semester.

2.2.

In order to contribute to the proposal on individual learning accounts, on 16 August 2021 the tripartite Advisory Committee on Vocational Training (ACVT) of governments and social partners adopted an opinion on individual learning accounts and strengthening training provision across Europe (11). This tripartite opinion reiterates that ‘The COVID-19 pandemic, digitalisation and decarbonisation are having an enormous impact on the European economy, industries, and the European workforce who are facing a very challenging adaptation to rapidly changing work. The pandemic has accelerated structural changes in many sectors, increasing the pace of the green and digital transformations. This is allied to the ongoing challenges of demographic change, new training needs and skills mismatches’. The tripartite opinion also highlights that ‘taking into account all the realities of the labour market, […] there is a need to tailor the conditions for access and entitlement to training to different situations and realities through an appropriate mix of arrangements’.

2.3.

The 2021 European social partners project on skills, innovation and training also identifies among its findings that ‘Enterprises and workers play a crucial role in innovation and the development of new skills and competences provided by employee trainings, and which are crucial for adapting to a changing environment. Therefore, the provision of, and access to, employee training that responds to employers’ and workers’ needs for developing innovative technologies and business models and that enables workers to find and maintain jobs in line with their skills, expectations and competences is vital’ (12). To this end, a key challenge is to make the different tools available, including vouchers, paid educational training leave (by law or through collective agreements), personal training accounts or training funds (cross-industry or sectoral), inter-operable and aligned with the country-specific institutional framework (13).

2.4.

National legislation and/or collective agreements ensure an individual’s right to education and training, including AL and training, and paid educational leave for work-relevant training in some Member States. Across Europe, social partners, social dialogue and collective bargaining play a key role in facilitating employees’ effective access to training in different ways in each country. They may consider existing national and/or sectoral level or other alternative approaches to an ILA model to be better suited to fostering training provision within the national context. The effective involvement of national and sectoral social partners in this regard should be respected and ensured.

2.5.

Diverse legal and/or collective bargaining frameworks reflect the choice of each Member State to adopt and implement its own training policies and build on existing financing mechanisms. In this manner, an individual learning account can only be one of the approaches and financial tools considered by EU Member States and social partners. A one-size-fits all approach will not work and Member States’ different training systems and distinctive sectoral traits must be respected. The decision on whether or not to adopt the ILA as one of the mechanisms for providing and financing training must remain fully within the competence of the Member States in the same way the training market is regulated at national level. The EESC underlines that Member States, in consultation with social partners, also have the freedom to decide not to adopt an ILA approach and could instead adapt or further develop their existing approaches to training provision.

2.6.

The EESC recalls that ‘The measures outlined in this Recommendation should not replace training provision by employers, by public and private employment services, public support for education and training institutions or other types of support’ (14). The EESC agrees that the Recommendation ‘should not prevent [the Member States] from maintaining or establishing more advanced provisions on adult learning/training than those recommended’ (15) in the Recommendation and that it ‘should not limit the autonomy of the social partners where they are responsible for setting up and managing training schemes’ (16).

2.7.

The EESC refers back to its recent opinion (17) which points out that ‘the rapid invention and spread of new technologies need to be accompanied by effective upskilling and reskilling. The EESC underlines that the impact of the COVID-19 crisis on Europe’s society and economy further highlighted the importance of effective education and training policies and high-quality jobs in supporting a sustainable and just social and economic recovery and resilience, which is crucial in helping Europe overcome the consequences of the pandemic. Investment in AL and skills development can play a crucial role in economic recovery and a social Europe’.

2.8.

The EESC recalls that the obstacles for adults and workers to access training are numerous, including lack of time, insufficient financing, motivation, quality guidance and counselling, sometimes a lack of available quality training, support from the workplace (replacement) especially in SMEs, and lack of respect of work-life balance. Placing individuals in the driving seat of their own training is important when there is an assurance of effective support for them to access and pursue labour market-relevant training. This includes supporting individuals by providing advice and guidance on suitable types of training. Workers need access to company-based training and low-skilled workers need targeted support especially in relation to online training. ‘Online training offers many opportunities to expand access to AL, but low-skill workers may lack the skills to make the most of this kind of training and may need extra support’ (18).

2.9.

In order to tackle different obstacles to training access and increase the motivation of adults to participate in training, barriers should also be considered from the point of view of the individual’s employment and education status. The instrument should be supported with the provision of effective guidance and counselling. The outreach strategy needs to be improved. In order to reduce the existing skills mismatch, training needs must be identified in advance and training courses must be properly targeted. Comprehensive learning support systems are also necessary to ensure stronger synergies between financial incentives, guidance services, and access to validation and recognition procedures (19).

2.10.

The EESC is concerned that a purely individualised approach may weaken the link between the financing and content of training provision thereby potentially resulting in training being less job-oriented and thus insufficiently tailored to employers’ needs. As 90 % of job-related training in the EU is funded by employers (20), their commitment and positive role for skills development needs to be fully acknowledged and supported by the EU. Social partners have a key role to play, jointly, in fostering training provision and participation. In particular, training funds managed by social partners are an effective way to provide training in response to identified needs at national and sectoral level. The financial and non-financial contributions of individuals should be recognised and supported.

2.11.

The EESC recognises the complementary role that MCs can play in broadening access to upskilling and reskilling while taking into account evolving labour market needs. The EESC also welcomes the fact that Member States are encouraged to link MCs to their employment policies, including active labour market policies, in order to help reduce skills mismatches in sectors and regions while respecting access to full qualifications. Concerning the ‘stackability’ of MCs, the EESC underlines that MCs should not be seen as a substitute for full qualifications. Member States should therefore be encouraged to include MCs in national qualification frameworks. The social partners should be involved in designing this at national level and in thinking about how MCs can be recognised and added to partial qualifications.

2.12.

Micro-credentials can be important in helping adults upskill and reskill or transition to new job opportunities when the quality standards of MCs are well-defined and made clear to the learners. While MCs could be a form of training that is accessed through a potential ILA, they should be viewed as separate to an ILA and as part of the toolbox of additional tools for continuous learning. The EESC also welcomes the fact that among the providers of MCs, the draft recommendation acknowledges the social partners and invites Member States to promote the development of MCs designed and approved by employers’ and workers’ representatives through social dialogue.

3.   Specific comments

3.1.

Free movement of workers can help with addressing the challenges of skills mismatches and shortages. Regulations on qualification requirements must remain a national competence with the involvement of the social partners, for example, in the validation of skills, including MCs, and while reducing the number of regulated professions. The better matching of skilled third country nationals with unfilled job vacancies across qualification levels and years of work experience can also play a role. The Commission’s upcoming skills and talent package (21), including the possible scenarios for an EU Talent Pool can play an important role in this regard.

3.2.

Collective agreements are an important means through which the provision of paid educational leave can foster workers’ access to labour market-relevant training. Such agreements play a particularly important role in identifying the ways of accessing paid educational leave for workers in SMEs who typically experience a greater loss of productive capacity while workers are absent due to training. It is important to stress that legislative initiatives at the EU or national level must not undermine the collective bargaining process or the autonomy of the social partners in finding solutions to issues that are important for well-functioning national labour markets, including solutions for skills development and transitions, and quality jobs for workers in the context of the just transition.

3.3.

The EESC underlines the importance of quality standards in the training market, particularly with regard to MCs and the possible advantages and disadvantages of different approaches to financing AL, e.g. ILA, including the cost-benefit relationship, administrative burden and costs, achieved status change (higher formal qualification level), quality assurance, labour market relevant outcome, added value for career development and level of participation rate of the key target group of low qualified people. This is necessary in order to ensure effective social dialogue and effective consultation, including with organised civil society, on whether and how the European initiatives on ILAs and MCs can be of added value in improving national and sectoral training systems. The EESC stresses that the VET providers’ catalogue of MCs should be established with the involvement of the social partners and education and training providers based on quality standards of the provision. The catalogue should include the learning outcomes of the MCs and their recognition by other education and training providers and by employers.

3.4.

The EESC considers it important that the initiatives address the upskilling and reskilling needs of adults and of the workforce as a whole (workers/employees/self-employed persons) and other target groups (e.g. the long-term unemployed, inactive individuals, people with disabilities, retired people and NEETs) so that they also have access to quality, effective and inclusive training that supports their employability. In this regard, Member State support in ensuring resources for accessing AL is essential. In parallel, the role of companies in supporting their workers’ job-relevant training remains vital. The particular situation of non-standard workers and the self-employed, which cannot be solved by ILA and MCs alone, needs to be addressed urgently and appropriately, while respecting the key role of social partners in terms of employee training.

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(1)  OJ C 374, 16.9.2021, p. 16.

(2)  OJ C 374, 16.9.2021, p. 16.

(3)  ILO official data available here: http://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:11300:0::NO::p11300_instrument_id:312285

(4)  OJ C 484, 24.12.2016, p. 1.

(5)  OJ C 398, 22.12.2012, p. 1.

(6)  https://www.europarl.europa.eu/RegData/etudes/STUD/2020/658190/IPOL_STU(2020)658190_EN.pdf

(7)  Adult learning statistical synthesis report, EC, 2020/082020.

(8)  Directive (EU) 2016/2102 of the European Parliament and of the Council of 26 October 2016 on the accessibility of the websites and mobile applications of public sector bodies (OJ L 327, 2.12.2016, p. 1).

(9)  COM(2021) 773 final.

(10)  COM(2021) 770 final.

(11)  https://ec.europa.eu/social/main.jsp?langId=en&catId=1223&furtherNews=yes&newsId=10081

(12)  BusinessEurope: ‘Skills, innovation and the provision of, and access to training’.

(13)  Cedefop's financing adult learning database.

(14)  COM(2021) 773 final.

(15)  COM(2021) 773 final.

(16)  COM(2021) 773 final.

(17)  OJ C 374, 16.9.2021, p. 16.

(18)  OECD: ‘Building back better: enhancing equal access to opportunities for all’.

(19)  Cedefop (2020), Empowering people to cope with change.

(20)  Adult learning statistical synthesis report, EC, 2020/082020.

(21)  Foreseen for April 2022.

Opinion of the European Economic and Social Committee on ‘Proposal for a Directive of the European Parliament and of the Council on information exchange between law enforcement authorities of Member States, repealing Council Framework Decision 2006/960/JHA’

(COM(2021) 782 final — 2021/0411 (COD))

‘Proposal for a Regulation of the European Parliament and of the Council on automated data exchange for police cooperation (“Prüm II”), amending Council Decisions 2008/615/JHA and 2008/616/JHA and Regulations (EU) 2018/1726, (EU) 2019/817 and (EU) 2019/818 of the European Parliament and of the Council’

(COM(2021) 784 final — 2021/0410 (COD))

‘Proposal for a Regulation of the European Parliament and of the Council addressing situations of instrumentalisation in the field of migration and asylum’

(COM(2021) 890 final — 2021/0427 (COD))

‘Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/399 on a Union Code on the rules governing the movement of persons across borders’

(COM(2021) 891 final — 2021/0428 (COD))

(2022/C 323/12)

Rapporteur:

Krzysztof BALON

Referral	European Commission, 2.5.2022
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Section for Employment, Social Affairs and Citizenship
Adopted in section	3.5.2022
Adopted at plenary	18.5.2022
Plenary session No	569
Outcome of vote (for/against/abstentions)	210/3/4

1.   Conclusions and recommendations

1.1.

The Russian military aggression against Ukraine, in the immediate vicinity of the EU's external borders, is an unpredictable game changer. Given the immensity of its encompassing and supposedly long-lasting impacts at all levels, also resulting in an unprecedented number of refugees — the largest since World War II — it constitutes, historically, the greatest threat to the functioning of the Schengen area and the security of the European Union as a whole.

1.2.

The EESC highly appreciates the first activation of Council Directive 2001/55/EC (1) (‘Temporary Protection Directive’) in the context of the Russian aggression against Ukraine (2). Moreover, the Committee wants to encourage the Commission to consider broadening the usage and the activation of the Directive for third country nationals in future severe and urgent crisis situations. The current activation of the Directive could well be used to develop solidarity mechanisms among the Member States.

1.3.

In this context, the EESC strongly supports an urgent need for effective, genuine, humane — and humanitarian — common European regulations on migration, asylum and security cooperation in an open, but equally secure Schengen area, in full accordance with the Charter of Fundamental Rights. The Committee highly encourages better conditions for all refugees.

1.4.

The consequences of the war are also a threat for the European model of the social market economy as well as for the freedom and rights of EU citizens and other inhabitants. The EESC encourages preserving and valuing the Schengen area as it is currently constituted, to guarantee not only the free movement of human beings, but also the functioning of the Single Market.

1.5.

During the COVID-19 crisis, many Member States introduced border controls and other restrictions against freedom of movement without any efforts to coordinate and properly justify such restrictions at European level, even though, as already stated in a previous opinion, maintaining open borders is crucial for the full functionality of the Single Market, for recovering and increasing resilience, and for fostering European solidarity and identity. This also demonstrates the need for a ‘real time’ decision-making mechanism at the inter-institutional level in crisis situations. In any case, the EESC fully supports the Commission's position to maintain internal borders open, even during crisis situations. Any travel restrictions between Schengen states imposed as a result of crisis situations should be temporary, and not exceed possible travel restrictions inside Member States.

1.6.

The EESC fully agrees with the Commission’s position that the use of police checks and cooperation, including information exchange and communication, have the potential to yield the same results as temporary internal border controls, and are less intrusive to the free movement of persons, goods, and services. In this context, the Committee welcomes the setup of an informal expert group composed of experts from each Member State to advise and support the Commission in the monitoring and application of the Directive on information exchange between the law enforcement authorities of Member States; the EESC proposes to include relevant and representative civil society organisations, as well as the Committee itself, in the work of this informal expert group.

1.7.

Also in this context, the EESC stresses the absolute need for the maintenance of the judiciary's independence, in particular in cases of the physical presence of the judicial bodies at the location of the Single Point of Contact. Moreover, civil society organisations (especially ‘watch dogs’ or those working in the area of the protection of vulnerable groups, including migrants), should enjoy special protection with regard to providing information by Single Points of Contact.

1.8.

The EESC acknowledges the ambitious data collection activities to be developed by the Member States in the framework of Prüm II. Prüm II goes a considerable step further than Prüm I, by requiring Member States to build technical installations for facial profiling. In this context, the Committee is concerned about the danger of influencing digital data exchange, especially, given the recent non-transparent war situation in Europe.

1.9.

The EESC calls for the introduction of more thorough and frequent control mechanisms to ensure high ethical standards when collecting and storing data by Europol, particularly in relation to third countries, as well as for setting clear time limits on the storage of this data. The EESC recommends the regular monitoring of Europol activities by civil society organisations and other relevant and potentially affected actors.

1.10.

The EESC fully acknowledges the fundamental rights of people arriving at European and Schengen borders, and their principle right to ask for entrance permission and the right to apply for asylum. It once again wants to recall respect of the right of non-refoulement.

1.11.

The EESC calls for Member States to take over shared responsibility, as introduced with the flexible solidarity mechanism in the New Pact for Asylum and Migration. They should be proactive in offering solidarity to other Member States, above all in crisis situations.

1.12.

The EESC particularly notes the indispensable positive role of respective civil society organisations providing humanitarian help for migrants being instrumentalised by third countries, and, moreover, supporting and providing information about the rights of migrants and asylum-seekers. The organisations' access to migrants and asylum-seekers in the affected border areas should always be guaranteed. Such organisations should be entitled to receive effective and simplified financial support under European funding such as the Emergency Assistance of the Asylum, Migration and Integration Fund (AMIF).

1.13.

The EESC proposes installing large-scale education and awareness raising programmes to enhance the public understanding of migration as a generally positive phenomenon for receiving societies, coordinated centrally, and implemented by each Member State.

2.   General comments

2.1.

This opinion is being drafted in a time of the historically greatest threat to the functioning of the Schengen area and the security of the European Union, caused by the Russian military aggression against Ukraine in the immediate vicinity of the EU's external borders. This war situation, being also a source of unprecedented numbers of migrants and refugees, the largest since World War II, once again underlines the tremendous importance of external border security and the stability of the Schengen area, as a precondition of internal security, and, moreover, the need for effective, genuine, humane — and humanitarian — common European regulations on migration and asylum.

2.2.

The Schengen area is home to more than 420 million people across 26 countries. The removal of internal border controls between Schengen member states is an integral part of the European way of life: almost 1,7 million people reside in one Schengen member state and work in another. People have built their lives around the freedoms offered by the Schengen area, with 3,5 million people crossing between Schengen member states every day.

2.3.

On 20 October 2021 the Committee adopted its opinion on the Commission's ‘Strategy towards a fully functioning and resilient Schengen area’ (3). The Committee welcomed this Strategy, believing that the Commission should take a stronger stance in support of borderless travel in Europe. The EESC stressed that Member States' security concerns are better addressed with more and strengthened cooperation and coordination between law enforcement authorities than with the reintroduction of controls at internal borders.

2.4.

At the same time, the Committee wants to reiterate its concern about the continued exclusion from full application of the Schengen acquis of the Member States Romania, Bulgaria and Croatia. Together with the Commission, it calls for swift and decisive action from the Council in this regard. Moreover, the Committee wants to encourage the Commission to finalise the evaluation of the application of the Schengen acquis with Cyprus as well. The Committee reiterated also, that when implementing EU policy for border management, interoperability, migration and asylum management as well as for police and criminal justice cooperation, the EU and its Member States were at all times bound by the Charter of Fundamental Rights.

2.5.

In the framework of the implementation of the Strategy, in December 2021, the European Commission proposed updated rules to reinforce the governance of the Schengen area (4). The targeted changes will bring greater EU coordination and better equip Member States to deal with emerging challenges when managing both the EU's common external border and internal borders within the Schengen area. The update seeks to ensure that reintroducing internal border controls remains a measure of last resort. The new rules also introduce common tools to manage the external borders more efficiently in the event of a public health crisis, building on the lessons learnt from the COVID-19 pandemic. The instrumentalisation of migrants is also addressed in the update to the Schengen rules, as well as through a parallel proposal for measures Member States can take in the fields of asylum and return in such a situation (5).

2.6.

The updated rules were published in the form of five proposals concerning the Security Union and the Schengen agreement. Given the non-legislative character of one of the proposals, the present opinion focuses on four proposals, namely on a directive on information exchange between the law enforcement authorities of Member States (6), on a regulation on automated data exchange for police cooperation (7), on a regulation addressing situations of instrumentalisation in the field of migration and asylum (8) and on a regulation amending the Union Code on the rules governing the movement of persons across borders (9).

2.7.

Nevertheless, the EESC strongly believes that the additional, specific and temporary measures and amendments introduced in all parts of the Schengen package and focused on an effective management of borders will respect the right and principles set out in the Charter of Fundamental Rights of the European Union, in particular the freedom of movement and residence (Art. 45), as well as the right to asylum (Art. 18) and the principle of non-refoulement (Art. 19), as clearly stressed in the proposals.

2.8.

As stated elsewhere (10), the narrative of migration and security implicit in the proposed documents needs to be reframed prudently. The configuration of migration as a threat, and the discourse that presents migrants as a danger, dehumanise human beings and only favour those who want to take advantage of them for geostrategic or national political reason. Migration has to be seen as a positive value. Immigrants have become indispensable and increasingly needed contributors to our societies and economies.

3.   Specific comments regarding the Security Union package

3.1.   Proposal for a Directive of the European Parliament and of the Council on information exchange between law enforcement authorities of Member States (COM(2021) 782 final)

3.1.1.

The overall objective of this proposal is to legislate on organisational and procedural aspects of information exchange between law enforcement authorities in the EU with a view to contributing to the effective and efficient exchange of such information, hence protecting a fully functioning and resilient Schengen area.

3.1.2.

The EESC fully agrees with the Commission's position that the use of police checks and cooperation, including information exchange and communication, have the potential to yield the same results as temporary internal border controls, and are less intrusive to the free movement of persons, goods and services. At the same time the EESC supports the Commission's view that such measures must fully comply with fundamental rights, including data protection requirements in line with existing EU legislation. As stated earlier (11), there must be a better balance between the fundamental rights of individuals enshrined in the Treaty on the Functioning of the European Union, and the need for better law enforcement in combating and prosecuting crime, in order to ensure a climate of security and justice across the EU. Any imbalance or violation of fundamental rights should be carefully monitored and reported by EU agencies and external actors.

3.1.3.

Consequently, the Committee welcomes the setup of an informal expert group composed of experts from each Member State to advise and support the Commission in the monitoring and application of the Directive, including in the preparation of Commission guidance papers. In this context the EESC proposes to include relevant and representative civil society organisations as well as the EESC itself in the work of the informal expert group.

3.1.4.

The EESC wants to reiterate considering and including in the monitoring of data exchange, the baseline of the information to be exchanged: the definitions of a (serious) criminal offence (12) as well as ensuring that all sides, those requesting as well as those responding, follow these same definitions and same baselines for it.

3.1.5.

In the context of the capabilities of Single Points of Contact including having at their disposition judicial authorities competent to grant necessary judicial authorisations at all times, the EESC stresses the absolute need and obligation for the maintenance of the judiciary's independence. In practice, this may be particulary important in cases of the physical presence of the judicial bodies or their representatives at the location of the Single Point of Contact.

3.1.6.

Civil society organisations, especially those such as ‘watch dogs’ or working in the area of the protection of vulnerable groups, including migrants, should enjoy special protection with regard to providing information by Single Points of Contact, because of a high probability of undue harm to the vital interests of such legal persons.

3.2.   Proposal for a Regulation of the European Parliament and of the Council on automated data exchange for police cooperation (‘Prüm II’) (COM(2021) 784 final)

3.2.1.

Building on the framework of the existing Prüm (Council Decisions 2008/615/JHA (13) and 2008/616/JHA (14), including the Prüm Convention), the proposal for Prüm II aims at ‘reinforcing and modernising the framework and allowing interoperability with other EU information systems’. Eventually, the initiative should create a new architecture ‘that allows for easier and faster exchange of data between Member States and that ensures high level of data protection of fundamental rights’.

3.2.2.

The EESC acknowledges the ambitious data collection activities to be developed by the Member States. Building on the experiences with the implementation of Prüm I, it shows the time-intensity for Member States to establish the required data collection tools. Prüm II goes a considerable step further with requiring Member States to build technical installations for facial profiling, which is so far only partially present in Member States. Reaching a comparable level of data collection in all Member States may take a lot of time, and create difficulties in ensuring interoperability, a concern which has been stated before (15). The Committee, moreover, is particularly concerned about the danger of influence on digital data exchange given the recent urgent, chaotic and non-transparent war situation in Europe.

3.2.3.

As stated earlier (16), the protection of personal data, under the appropriate legal frameworks, needs to be respected at all times, especially when highly sensitive personal data, such as under the Prüm Decisions, is concerned. The EU and the EESC commented on a general outline for a sufficiently sensitive treatment of data within Europe (17).

3.2.4.

The EECS highlights that particularly the EU-wide mandatory creation of facial profiling data banks and the exchange of such data, even if in the form of record numbers and encrypted formats, needs to be treated with tremendous delicacy. The European Parliament with 2020/2016(INI) (18) has recommended to step back and be cautious with facial profiling tools, not least as recording and sharing facial images of individuals brings those in danger to be recognisable. Thus, the EECS views the proposal for a self-evident establishment of national data banks for facial images as well as their Union-wide exchange between participating Member States with great anxiety. It calls for a high-level scrutinising of proportionality and confidentiality in terms of protecting personal data. Although the EESC fully recognises the general objective of this proposal resulting from the Treaty-based goal of contributing to internal security in the EU, the application of facial profiling could be considered to be non-mandatory.

3.2.5.

Further, the EESC is worried about the proposal to exchange police records between all Member States, even if partially anonymised in terms of record numbers and encrypted in their transfer. Law enforcement agencies in different Member States appear to have different standards for defining and registering suspects and criminals. An exchange upon request for data match thus may depend on the assessment of individual police officers. This may lead to situations where suspects in one Member State, e.g. in relation to activities for refugee rights, enter the criminal record of another Member State. Here, the rights of access and storage need to be clearly confidential and restricted so as not to endanger fundamental rights in a disproportionate way. Moreover, there should be solid and shared criteria established for defining a (serious) crime and criminal suspects. The rules already established have to be respected and enforced in this respect (19).

3.2.6.

The EESC solicits the introduction of more thorough and frequent control mechanisms to ensure an ethical collection, above all in relation to third countries, and storage of Europol data, as well as setting clear time limits on this storage of data. As stated earlier, a central role of Europol in the European architecture of above all cross-border criminal prevention and the fight against crime, including in terms of data exchange, is welcome; however, this role needs to be reviewed independently and evaluated including by civil society, social partners and relevant stakeholders, especially those groups and individuals whose lives could be wrongly or unjustifiably affected by law enforcement activities (20). Europol has been repeatedly accused of lumping together data of suspects and criminals together with those of other private persons (21). Particularly, it needs to be ensured that there is no inadequate overlap with migration and asylum issues. The EESC recommends a regular monitoring of Europol activities by civil society organisations and other relevant and potentially affected actors, moreover, proposing to put transparency mechanisms in place.

4.   Specific comments regarding the Schengen Package

4.1.   Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/399 on a Union Code on the rules governing the movement of persons across borders (COM(2021) 891 final)

4.1.1.

The Schengen area comprises an area where European Union citizens and non-EU citizens legally residing in the territory, as well as goods and services, can travel without being subject to internal border controls. Schengen is an essential element of the area of freedom, security and justice and a key element for the functioning of the Single Market. Its creation has brought significant social and economic benefits to European society.

4.1.2.

While large scale public health emergencies, like pandemics, may be considered as a serious threat to public policy, they must not be considered as a reason for reintroducing border controls in the Schengen area. Such action does not appear to be a constructive measure. The same should apply to the exercise of police or other public powers in the internal border areas, being de facto equivalent to those border controls. Any travel restrictions between Schengen states on the basis of large scale public health emergencies should not exceed possible travel restrictions inside Member States. Otherwise the whole concept of an area without controls at internal borders: a ‘part of Europe's DNA’ (22) will be undermined. Moreover, such regulations can weaken efforts in favour of a common European health policy, especially in the area of epidemic control.

4.1.3.

The EESC welcomes the Commission's attempt to introduce new procedural safeguards in the event of unilateral reintroductions of internal border controls. The proposal wishes to clarify and expands the list of elements that must be assessed by a Member State when taking a decision on a temporary reintroduction or the prolongation of border controls. The Commission will be required to issue an opinion on the proportionality and necessity of these decisions and launch a consultation process with the Member States. The EESC urges the further clarifying of the procedural safeguards introduced, above all by defining a clear time limit for potential prolongations.

4.1.4.

In this context the EESC considers the distinction between ‘essential’ and ‘non-essential’ travel in the Schengen area as also posing a serious threat to the foundations of Schengen.

4.1.5.

The EESC fully supports, and furthermore solicits the Commission's position, that the limitation of the border crossing points or their opening hours should take full account of the rights of third-country nationals seeking international protection. An effective access to border points must be ensured as well as an effective protection of the right to asylum.

4.1.6.

This relates to the EESC's concern that persons apprehended at the internal borders should be treated with dignity and informed about their rights instead of legalising forms of internal pushbacks. Such approach runs a high risk of open floodgates for uncontrollable racial profiling. It should be of utmost priority to ensure the free movement of persons within the Schengen area. Controls should be conducted by adequately trained and authorised personnel only. Their actions should be independently monitored at random.

4.1.7.

The EESC stresses that checks conducted within internal as well as at external border areas using monitoring and surveillance technologies should be reviewed regarding their proportionality. Civil rights organisations could support with reviewing and monitoring activities.

4.1.8.

The Committee understands the Commission's aim with respect to Article 13 of establishing a common procedure for Member States to control and surveil their EU's external and Schengen borders. However, there is no mention of access to a rightful procedure to seek asylum or alternative forms of access for migrants, nor of any legal counselling related. The EESC urges that the fundamental rights of persons reaching the European and Schengen borders and their principle right to ask for entrance permission and the right to apply for asylum always be respected. In particular, vulnerable persons, medical cases and minors must be received and potentially transferred with cautiousness. As stated before the EESC is highly concerned about the violations reported at external borders (23); at the same time, it acknowledges the Commission's strengthened monitoring activities respectively (24).

4.1.9.

The EESC reiteratedly encourages the Commission to actively make use of its enforcement powers under the Treaties in situations where there is a lack of follow-up to deficiencies found during Schengen Evaluations (25). Priority should be given to systemic practices that violate fundamental rights norms. This is of particular importance when it comes to vulnerable migrants. Notably, the Commission should not solely rely on the findings of the Schengen Evaluation Mechanism, but also monitor the fundamental rights situation itself actively with reference to international law and with the support of civil rights organisations. Moreover, a dedicated staff of the European Union Agency for Asylum (EUAA), as well as the European Union Agency for Fundamental Rights (FRA) should be active at the external borders to supervise the observance of fundamental rights.

4.2.   Proposal for a Regulation of the European Parliament and of the Council addressing situations of instrumentalisation in the field of migration and asylum (COM(2021) 890 final) (26)

4.2.1.

Given the crisis at some parts of the external EU border in 2021 and before, this proposal aims at setting up a ‘specific emergency migration management procedure, and, where necessary, providing support and solidarity measures to manage in an orderly, humane and dignified manner the arrival of persons having been instrumentalised by a third country, with full respect for fundamental rights.’ The EESC acknowledges the specific circumstances which required the European Commission to take an effective action; however, it reiterates its concern about introducing and normalising rapid measures in the treatment of vulnerable migrant persons without having enough time and space to ensure their rights (27).

4.2.2.

Moreover, the revised Schengen rules recognise the important role that Member States play at the external borders on behalf of all Member States and the Union as a whole in situations where migrants are instrumentalised for political purposes. The EESC acknowledges this role, but stresses that the protection of the EU or Schengen borders cannot be fulfilled by Member States at the external borders only. It calls for Member States to proactively support the solidarity mechanism proposed herein, but above all take over shared responsibility, as it has been introduced with the flexible solidarity mechanism in the New Pact for Asylum and Migration.

4.2.3.

While the Committee acknowledges the need to provide specific guidance for situations of particular nature, it needs to be stressed that the proposed definition of ‘instrumentalisation’ remains fairly vague. The Committee urges that this approach be scrutinised in order to avoid a potential abuse of the concept in terms of an over-extensive application. Moreover, it recalls that the given treaties for asylum and situations of crisis do provide for fundamental guidelines and measures. The EESC urgently stresses the fundamental rights of persons and above all the principle of non-refoulement need to be respected under all circumstances.

4.2.4.

The EESC stresses that a quasi-externalisation of the asylum procedure to the outer EU border in an ad hoc manner may be hard to monitor and implement with sufficient scrutiny and a fundamentally rights-oriented approach, particularly regarding the pre-entry screening capacities of Members States, which have been criticised already elsewhere (28). It needs to be ensured that the affected Member State has the necessary capacity and installations to manage the emergency situation in an adequate way. Support by other Member States through the solidarity mechanism, by central EU Agencies, above all EUAA, as well as NGOs and relevant international organisations such as the UNHCR, should thus be offered and accepted in a proactive way and not upon request of the affected Member State only.

4.2.5.

The EESC particularly notes the indispensable positive role of civil society organisations providing humanitarian help for migrants being instrumentalised by third countries, including food, water, clothing, adequate medical care and temporary shelter, and moreover supporting and providing information about the rights of migrants and asylum-seekers. The organisations' access to migrants and asylum-seekers in the affected border areas should always be guaranteed. Such organisations should be entitled to receive effective and simplified financial support under European funding, like the Emergency Assistance of the Asylum, Migration and Integration Fund (AMIF).

4.2.6.

In this context, it is of utmost importance not to soften the principle of non-refoulement, but to ensure people's rights and access to legal support and a rights-based procedure implemented by knowledgeable and capable personnel under the observation of UNHCR and EUAA. As stated elsewhere, the Committee sees the Commission’s focus on irregular migration and so-called voluntary or forced return, with great concern (29).

4.2.7.

Moreover, it should be ensured that alternative reasons for entry, such as family reunification, are to be taken into consideration.

4.2.8.

The EESC worries about the aspect of accommodation of migrants and asylum-seekers during their registration process in particular. It needs to be ensured that Member States are able to accommodate persons in the most proper and dignified way without detaining them as a matter of course. A massive restriction of the freedom of movement of the persons concerned should be avoided. Civil society and humanitarian organisations should be allowed access for monitoring.

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(1)  Council Directive 2001/55/EC of 20 July 2001 on minimum standards for giving temporary protection in the event of a mass influx of displaced persons and on measures promoting a balance of efforts between Member States in receiving such persons and bearing the consequences thereof (OJ L 212, 7.8.2001, p. 12).

(2)  Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and having the effect of introducing temporary protection (OJ L 71, 4.3.2022, p. 1).

(3)  COM(2021) 277 final.

(4)  COM(2021) 891 final.

(5)  COM(2021) 890 final.

(6)  COM(2021) 782 final.

(7)  COM(2021) 784 final.

(8)  COM(2021) 890 final.

(9)  COM(2021) 891 final.

(10)  EESC opinion SOC/707 (OJ C 290, 29.7.2022, p. 90).

(11)  OJ C 367, 10.10.2018, p. 84.

(12)  OJ C 367, 10.10.2018, p. 84, par. 4.3.

(13)  Council Decision 2008/615/JHA of 23 June 2008 on the stepping up of cross-border cooperation, particularly in combating terrorism and cross-border crime (OJ L 210, 6.8.2008, p. 1).

(14)  Council Decision 2008/616/JHA of 23 June 2008 on the implementation of Decision 2008/615/JHA on the stepping up of cross-border cooperation, particularly in combating terrorism and cross-border crime (OJ L 210, 6.8.2008, p. 12).

(15)  OJ C 105, 4.3.2022, p. 108.

(16)  OJ C 105, 4.3.2022, p. 108.

(17)  Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A European strategy for data (COM(2020) 66 final), adopted 18 September 2020; and EESC opinion (OJ C 429, 11.12.2020, p. 290).

(18)  European Parliament resolution of 6 October 2021 on artificial intelligence in criminal law and its use by the police and judicial authorities in criminal matters (2020/2016(INI)) (OJ C 132, 24.3.2022, p. 17).

(19)  Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA (OJ L 119, 4.5.2016, p. 89) (‘Law Enforcement Directive’); and NIS Directive (EU) 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning measures for a high common level of security of network and information systems across the Union (OJ L 194, 19.7.2016, p. 1) (‘NIS Directive’).

(20)  OJ C 341, 24.8.2021, p. 66.

(21)  A data ‘black hole’: Europol ordered to delete vast store of personal data, Fotiadis, Apostolis et al., The Guardian 10 January 2022, https://www.theguardian.com/world/2022/jan/10/a-data-black-hole-europol-ordered-to-delete-vast-store-of-personal-data

(22)  Communication ‘A strategy towards a fully functioning and resilient Schengen area’ (COM(2021) 277 final).

(23)  OJ C 105, 4.3.2022, p. 108.

(24)  OJ C 105, 4.3.2022, p. 108.

(25)  OJ C 105, 4.3.2022, p. 108.

(26)  For further differentiation cf. EESC opinion REX/554 (not yet published in the Official Journal).

(27)  OJ C 123, 9.4.2021, p. 15.

(28)  OJ C 123, 9.4.2021, p. 15.

(29)  OJ C 517, 22.12.2021, p. 86.