20.7.2016   

EN

Official Journal of the European Union

C 264/1

Rapporteur:

Mr José María ZUFIAUR NARVAIZA

1.1

The EESC agrees with the need to revise the current European Security Strategy (ESS) of 2003, in order to respond to the substantially altered international context. And, as consultative body to the European institutions and a representative of organised civil society (OCS), the EESC considers it vital that it is consulted in the process of drafting the new strategy, and that civil society is involved in a structured way. In the EESC’s view, reviews of the global strategy should be carried out more frequently. For example, every five years, coinciding with the Parliament’s and the Commission’s terms of office.

1.2

The EU is facing crises, primarily involving social disintegration, interdependence, institutional weakness and the global nature of inequality. We have now entered an era where social exclusion is a key factor in conflicts, in which military intervention is clearly insufficient.

1.3

The increased volatility of geopolitical and geo-economic competition and the persistence of some powers in dividing the world into spheres of influence impact on the European strategic model based on cooperation and positive conditionality, requiring the model to be adapted.

1.4

In the EESC’s view, in such a complex international context, Europeans will only be able to defend their values and interests through closer coordination of objectives, policies and resources. European foreign policy begins at home, as the link between internal and external policies is inseparable.

1.5

European citizens will only shift away from the current feeling of disaffection and commit to the Union if the EU changes course and positions itself as a promoter of freedom, security and prosperity — as the defender of equality — in Europe and in the rest of the world.

1.6

It is imperative to strengthen European political integration in order to aspire towards sovereignty in a globalised world, to take decisions to revive enthusiasm for the European project, through a renewed social contract, and to address the democratic deficit.

1.7

Foreign policy and European security and defence policy, to which more resources should be allocated, require the use of more flexible working methods that are at the same time more coordinated between the Member States and the European institutions.

1.8

EU defence needs stronger coordination and joint planning, with a view to moving towards a European Defence Union. This requires increased funding and the development of the European defence industry, avoiding duplication in expenditure through pooling and sharing initiatives. In the same sense, better governance and a consistent institutional structure are also key, as is the promotion of large-scale joint projects. This is without prejudice to the transatlantic relationship and the close cooperation with alliances and bodies, such as NATO, which include most EU countries.

1.9

In the EESC’s view, the priorities of the new Global Strategy should be the following: a) strengthening the accession path of candidate countries, particularly the Western Balkans, and stabilising the Eastern and Southern neighbourhood, including by responding to the flow of migrants and refugees; b) fostering a more capable, effective and visible Common Security and Defence Policy (CDSP) underpinned by a strong and more clearly defined European Defence Technological and Industrial Base (EDTIB); c) strengthening an effective and reformed multilateral system for security, socioeconomic and development governance; and d) promoting trade and investment. These priorities should also factor in two cross-cutting dimensions: sustainable development at large and the strengthening of civil society organisations.

1.10

With its traditional preventive and multilateral diplomacy the EU should be a regulatory, constructive power that promotes inclusive governance, committed to involving emerging economies in multilateral institutions.

1.11

The EU was created to consolidate peace in Europe and the main goal of its global strategy must be to maintain and promote peace. Security and defence policies, diplomatic activity and the role of civil society are crucial to achieving this goal.

1.12

Regarding the refugee crisis, in the EESC’s view it is vital that the EU adopt a common refugee, asylum and immigration policy to be implemented by a European institution. This would ensure that the Member States assume their responsibilities on a joint, proportionate and mutually-supportive basis.

1.13

In the EESC’s view, changes should be made to the system for granting European development funds, in order to make them more flexible, versatile and adapted to specific circumstances.

1.14

The series of trade mega-deals currently being negotiated or ratified are taking on, over and above their strictly commercial aspects, an indisputable geopolitical dimension. Addressing the geopolitical impact of this type of multilateral agreement, strengthening multilateral relations and avoiding tensions between trading blocs will be a key component of the future EU global strategy. And, insofar as these agreements affect people’s way of life, it is essential, in the EESC’s view, to meet the demands and concerns of civil society and the general public in this regard.

1.15

The EESC believes that it is vital to strengthen civil society and its activities and links that operate in parallel with diplomatic activity, in order to implement the EU’s foreign and security policy. The EESC therefore advocates expressly including this component among the priority objectives of the CFSP.

1.16

We believe that the EESC, as a consultative body to the European institutions and a representative of all major civil society organisations in the EU Member States, is best placed to become a key EEAS partner for the EU institutions involved in the on EU foreign and security policy, particularly the European External Action Service (EEAS) and the European Commission.

1.17

To this end, the EESC proposes jointly exploring these priorities and a means of formalising cooperation between the EEAS and the EESC.

1.18

The EESC offers to assist the EEAS in carrying out an evaluation report on the participation of civil society in the EU’s external policy.

1.19

We propose that the EESC hold a foreign and security policy audition every year, attended by the High Representative, bringing in the main European civil society organisations.

2.1

The EESC points out that a strategy is required that includes all of the EU’s tools for external action, including security and defence tools, within a coherent and updated overall framework. To achieve this, the objectives, priorities, interests and instruments of Europe’s external action need to be overhauled, taking a comprehensive standpoint that breaks away from partisan approaches and national resistance and that boosts coordination and flexibility (1), (2).

2.2

In spite of the major social advances in various areas included among the Millennium Development Goals, other aspects such as the West’s loss of influence, the consolidation of new emerging powers and the growing impact of the information technologies, demographic trends and greater inequality are beginning to reveal a more complex global geopolitical context in which the progress of a model based on the rules and values of open society will be met with greater resistance. This is true in the case of some multilateral institutions, which have not adapted to a new multipolar world. As a result, international standards are being eroded, while the relevance of geopolitics is being redefined. With a wider range of actors, including non-state actors and transnational companies, and the development of disruptive technologies, it is more difficult to set strategic agendas and manage complex environments.

2.3

The most immediate challenges facing the EU are: managing migration flows, securing the continent against terrorist threats and deterring possible military or cyber aggression against EU Member States. The other challenges, threats and dangers are now essentially global: climate change, migration, terrorism, financial and economic crises, tax evasion, organised crime, pandemics, humanitarian emergencies, etc. The Union has a role to play in all of them. The CFSP must become a much more effective tool than it currently is, in order to defend the interests of the Union and the Member States. This, in turn, is essential in order that the latter become significantly more involved in the EU’s foreign and security policy. As stated by the HR/VP, ‘we need a strategy to protect proactively our interests, keeping in mind that promoting our values is an integral part of our interests’.

2.4

Since the 2003 strategy, there have been two substantial structural changes:

2.4.1

Firstly, we are facing crises, primarily involving social disintegration and institutional weakness, interdependence and the global nature of inequality. Today, globalisation implies proximity, visibility and population density. Inequality has become a global parameter. It is this degree of social inequities that lies at the root of today’s mass movements of people. This increasingly linked and extremely unequal world is a source of instability and insecurity. We have now entered the era of conflicts resulting from social exclusion, for which military intervention is clearly insufficient. We are facing a global social issue which must be recognised and addressed, as happened in the nineteenth and twentieth centuries in European nation-states, and, at international level, with the pioneering Philadelphia Declaration in 1944. This will require regulatory, solidarity-based and cooperation policies.

2.4.2

Secondly geopolitical competition is once again on the rise, and not only in the European neighbourhood. We are shaped by our geographical location. The conflicts in Ukraine, Syria, Iraq, Libya and the Sahel, for example, affect us directly from the point of view of trade, jihadist terrorism, energy supply and the movement of refugees or migrants. This has an impact on the European policy model, based on cooperation and positive conditionality.

2.4.3

The statement in the existing strategy, that ‘the best protection for our security is a world of well-governed democratic states’ remains true. However, the strategy has highlighted several shortcomings: 1) generally speaking, this concept has not produced the expected results, except for a few cases closely linked to EU accession processes; 2) other narratives exist, based on particular readings of religion, such as the self-proclaimed Islamic State, or on a certain authoritarian nationalism, as in the case of Russia and China (major powers that directly influence the wider EU neighbourhood). These narratives have a concept of geopolitics based on spheres of influence; 3) often, the diversity between the countries with which the EU has attempted to establish partnerships has been ignored; 4) there has frequently been a lack of consistency between EU discourse and the practical policies carried out; 5) it has not been sufficiently taken on board that democracy and the rule of law cannot be imposed from outside but must develop from within.

2.5

While defending its universal principles and values, the EU is called upon to adapt its strategy in order to promote them more effectively through what the EEAS has called ‘pragmatic idealism’.

3.1

It is universally accepted that foreign policy is an extension of internal policy. That is why, in order to be effective, they must seek the same objectives, be integrated, coordinated and not lack focus in their common key aspects. In the EESC’s opinion, the two vital pillars of a comprehensive strategy for EU external policy are constructed at home.

3.1.1

The first of these is the basic element of the EU’s attractiveness in the world: its way of life, based on freedom and human rights and the social cohesion among the whole population. It does not seem realistic to envisage a more structured, shared and effective EU foreign and security policy without tackling the increase in economic and social inequalities amongst its Member States, the weakening of its social model, the symptoms of a lack of solidarity and trust, the retreat to national boundaries, the difficulties in making joint decisions, the growing disaffection among the public or the rise of populist, xenophobic or Europhobic movements. It is crucial to strengthen European political integration, most likely through enhanced cooperation as provided for by the Treaties, in order to aspire towards sovereignty in a globalised world, to take decisions to revive enthusiasm for the European project, through a renewed social contract, and to put decision-making and democracy on the same footing.

3.1.2

The second pillar concerns greater European integration and the introduction of common policies and instruments for action in areas such as migration flows, energy supply, climate change, international terrorism, food security, trade policy, the fight against organised crime, an effective European investment and job creation plan, a European social dimension, and completing the internal market. European citizens will only shift away from the current feeling of disaffection and commit to the Union if the EU changes course and positions itself as a promoter of freedom, security and prosperity — as the defender of equality — in Europe and in the rest of the world.

3.2

In the EESC’s view, improving the single market — industrial policy, the financial system, telecommunications and transport policy, digital technologies, defence industries — is a priority for the EU. Foreign policy should also address a growing number of concerns relating to other EU policies, including social, environmental, energy, digital, transport, economic and transport. Conversely, we need to define a long-term vision in which foreign economic policy is a central pillar for promoting trade and investment. In addition, a common energy policy is urgently needed, as is a common migration and asylum policy.

3.3

Faced with the new geostrategic configuration of the world, the EU has no choice but to build up its security and defence capacities. This will inevitably require a more integrated external policy — the Member States’ importance is steadily diminishing at international level and acting together is advantageous to all — and implies dedicating more room to European defence policy. All this assumes a far broader understanding of security and defence than the use of force. But it also means making it clear that a defence policy is there to be used preventively: it has a deterrent function but is also intended to serve an instrument of last resort, when vital interests and the responsibility to protect cannot be upheld in any other way. This requires more and better use of resources. Although it has 28 different military structures, the EU spends 40 % of the amount the US spends on national defence. On top of this comes considerable duplication and an underdeveloped defence industry, among other factors, all of which points to the need for larger budgets and common planning and control instruments. EU governments and citizens must be aware that security, prosperity and freedom are inseparable. Greater strategic self-sufficiency for the EU in terms of defence must not, however, be incompatible or clash with the cooperative, trans-Atlantic relationship it has with alliances and bodies to which most of the EU countries belong, NATO in particular.

3.4

European defence policy should concentrate on two key areas: 1) current geopolitics dictate that the EU, as a supplier of security beyond its borders, should focus on the wider neighbourhood, together with supporting human rights and helping neighbouring countries to develop; and 2) contributing to the freedom of access to global public assets and to a rules-based international order.

3.5

Industry must play a major role in achieving strategic autonomy for the European Union. Its competitiveness is a value that goes far beyond the interests of the private sector. The fragmentation of the defence industry must be overcome; the success of this process is closely linked to the implementation of some key tools, such as the implementation of collaborative projects, the allocation of adequate funds for the upcoming Preparatory Action (3) and the establishment of a specific budget line in the next multiannual financial framework.

3.6

The idea that the stability of our real neighbourhood — our neighbours and our neighbours’ neighbours — is essential for our own stability applies directly to the terrorist threat from the so-called Islamic State. It means, for example, that it is the EU’s direct responsibility to help find a political solution to the war in Syria, because it involves taking action on one of the causes of the problem. It also involves improving coordination activities in counter-terrorism and intelligence. Stepping up the exchange of information between the Member States, even setting up a European intelligence service, should be an imperative. Furthermore, a global anti-terrorism strategy needs to be developed to analyse the causes of terrorism, prevent confrontation between religious views and, instead, encourage cooperation between communities with different beliefs in the fight against terrorist fanaticism. It is particularly important to support the Arab and Islamic world (the worst hit by the attacks of the misnamed Islamic State) so it can react to this threat from within. Similarly, taking action against the sale and trafficking of arms or against sources of funding should be part of a European strategy to combat terrorism. Relations between civil society and our wider neighbourhood have a useful role to play in this endeavour.

3.7

External action should be made more flexible. Greater flexibility must not lead to fragmentation, but should be achieved by making full use of the tools provided for by the TEU and the TFEU. Constructive abstention by Member States when dealing with CFSP and CSDP matters in the Council therefore needs to be increased. In this context, with regard to strengthening international security, the EESC refers once again to the need to uphold particular foreign policy values, in particular respect for the Charter of the United Nations. However, when it is not possible to find a satisfactory solution using existing tools, ad hoc groups involving the High Representative or, if she is unavailable, other European institutional bodies, must be set up, so that the Union’s foreign policy opportunities are not paralysed by the principle of unanimity. The Green Diplomacy Network (GDN), initially established to promote the integration of environmental objectives into the EU’s external relations and which played an important role in mobilising and coordinating the EU’s diplomatic action ahead of COP21, can serve as a model for other networks.

3.8

The EU should not wait for the next crisis to equip itself with greater external policy resources. Resources must match the objective and not fluctuate significantly according to immediate circumstances. Effective planning should identify those areas in which the Union is under-equipped. This would avoid the reactive behaviour that has characterised EU action over recent years when faced with various crises. The EU budget for external action, especially in the areas of humanitarian action, migration, development, education, counter-terrorism and diplomacy, and for strengthening organised civil society, needs to be increased.

4.1

The EESC believes that the new strategy will mean re-examining the EU’s analysis of the international context and the role that it seeks to play in future. It is vital to find new narratives based on active involvement in equality between members of the public in terms of security, freedom and prosperity and it is important to highlight the EU’s strengths. These include being the world’s largest internal market, having an active trade policy, the most highly-funded development cooperation and humanitarian aid policy in the world, a way of life based on respect for the rule of law and democratic principles and a social model based on economic and social cohesion, and upholding a sustainable development model based on the fight against inequality and environmental protection, including strong climate policy objectives.

4.2

Lack of internal cohesion and political will have historically hampered the EU’s role in the world. The EU does not aspire to be a superpower, but to project its power as effectively as possible. It must therefore focus on those areas where its action can bring added value and it can have the greatest impact, particularly in its neighbourhood and in international institutions such as the United Nations, IMF, World Bank or G20, where coordination between the Member States is poor, limiting their ability to exert influence. The EESC therefore welcomes the Commission proposal of October 2015 for a unified representation of the euro area within the IMF and other international organisations.

4.3

The EU must continue with its traditional preventive and multilateral diplomacy, with a view to becoming a regulatory and constructive power. Defending an open, rules-based world order is a key element in the Union’s identity on the international scene. As a major trade power, the EU benefits from a world that is connected in terms of energy, finance, cyberspace and sea routes (some 90 % of the EU’s external trade is by sea). Nuclear safety and energy security must stay in focus.

4.4

Cooperation must also continue with the various regional integration processes such as ECOWAS, ASEAN and Mercosur.

4.5

The EU should boost inclusive governance, promoting the involvement of emerging economies in multilateral institutions in order to relieve tensions peacefully and discourage the creation of alternative governance mechanisms or ones hostile towards the current mechanisms.

4.6

The EU must uphold its values and principles, the universality and indivisibility of human rights, the fight against the death penalty and violence against women and girls, and the protection of the rights of persons with different sexual identities (LGBTI). It must then base its foreign and security policy on its characteristic social model, which is the foundation of its security, freedom and prosperity.

5.1

The current elaboration of the Global Strategy should clearly reflect the importance of Europe’s Eastern and Southern neighbourhoods for Europe’s own security and prosperity, and should provide the EU with greater impact and leverage on key developments in those areas, responding to and regulating the flow of migrants and refugees. These priorities should also factor in two cross-cutting dimensions: sustainable development and the strengthening of civil society organisations (4), (5).

5.2

The wider or strategic neighbourhood (from the Sahel to the Gulf and from Central Asia to the Arctic) is the area of greatest significance not only for European external action, but for the internal dimension of the Member States. This area is currently experiencing radical social and institutional disintegration for a variety of reasons, such as armed conflict, forced population displacement, international terrorism, the collapse of state structures, corruption, organised crime, regression to authoritarian rule as in the case of Turkey, the assertiveness of powers such as Russia, and hybrid and military aggression. This is accompanied by profound, long-term structural challenges with a powerful impact on the Union.

5.3

Faced with this disheartening scenario, the EU must take greater responsibility for improving the economic, social and security situation in its neighbourhood. The EU must not retreat from defending democracy, the rule of law and fundamental human and social rights — including freedom of association and the right to collective bargaining — in its neighbourhood: the support of local civil society, including the social partners, is key in this regard, as is ensuring they keep their independence.

5.4

The EESC welcomes the review of European Neighbourhood Policy and the recognition of a link between instability, poverty, inequality and lack of opportunities, which can increase vulnerability to radicalisation. In this respect, external action can generate synergies when security, development and trade are brought together. If this objective is to be met, it is crucial to do away with infringements of the right of association and the freedom of organisation of employers, workers and third-sector bodies. It is also important to strengthen early-warning tools to prevent possible future crises.

5.5

The EESC advocates keeping a close, but not narrow, focus on visa extension and liberalisation, in all cases depending on verifiable reforms.

5.6

Closely linked to this neighbourhood is the African continent, which, in the EESC’s view, should be the second priority geographical region of the EU’s foreign policy. This is not only because many of these challenges originate there, but also because of the possibilities for alliances that can contribute to economic development and global governance (6). The Sustainable Development Agenda for 2030 and the Paris Agreement on climate provide clear opportunities to establish and strengthen partnerships with Africa.

5.7

In geopolitical terms, the stability of our wider neighbourhood also requires us to concern ourselves with the major powers which have most impact on it, particularly Russia and China. Russia’s new assertiveness and the Chinese One Belt, One Road policy (OBOR — massive investment in connectivity infrastructure) makes it more necessary than ever for the EU to act with one rather than 28 voices with regard to these two powers.

5.8

Regarding the refugee crisis, in the EESC’s view it is vital that the EU adopt a common asylum and refugee policy to be implemented by a European institution. This would ensure that the Member States assume their responsibilities on a joint, proportionate and mutually-supportive basis. The strengthening of channels for legal migration is crucial, both to meet demands for labour and refuge, and to meet the needs of migrants in the EU in view of its demographic decline, as well as to prevent human trafficking. Respect for international and EU law and a community response to the humanitarian crisis affecting those already on EU territory are also essential, as are greater resources to protect shared borders, search and rescue at sea, and the creation of a European Border and Coast Guard, as proposed by the European Commission.

6.1

The EU must align its internal and external policies with the goals of the 2030 Agenda for Sustainable Development. In its development policy, the EU should pay particular attention to the Addis Ababa Action Agenda. The Paris climate change agreement has shown that the world is moving inexorably towards a green economy, a process in which the EU is playing a pioneering role.

6.2

The EESC welcomes the steps to redirect official development aid (ODA) towards the least developed countries (LDC), funding for the New Deal for Engagement in Fragile States, evaluation of the aid strategy for gender equality, the increase in the biodiversity protection budget and the EIB’s undertakings in combating climate change, as well as the financial support for developing countries of USD 100 billion by 2020 pledged in the Paris Agreement.

6.3

The economic dimension of European foreign and security policy should be strengthened and should not be limited to trade. There is also a need to support training, innovation and entrepreneurship, as the stabilisation of our neighbours depends on their economic and social development. A development plan should be drawn up for countries such as Tunisia, Lebanon and Jordan, among others, in order to boost their economies. There are mutual opportunities in assisting third countries in making the transition to low-carbon economies, including by means of effective technology transfer and cooperation.

6.4

The EESC notes that climate change is a contributing factor to migration resulting from state fragility, insecurity and resource scarcity. The EU must support developing countries, notably the most vulnerable, and help them move directly to low-carbon economies and strengthen their climate resilience.

6.5

The EESC emphasises that, notwithstanding the current budgetary restrictions in many Member States, the aim of spending at least 0,7 % of gross national income (GNI) on ODA must remain a priority. There is also a need to boost policy coherence for development (PCD) and promote coordination between the Member States and the EU institutions (7).

6.6

It is crucial to involve a very wide range of actors in financing the sustainable development goals (SDG), including civil society and development finance institutions (DFI). Social partners should also be more closely involved in managing projects (8).

6.7

In the EESC’s view, changes should be made to the system for granting European development funds, in order to make them more flexible, versatile and adapted to specific circumstances. This would require the introduction of arrangements such as the ‘framework agreements’, operational grants, cascading subsidies, multiannual agreements, emergency funding or the implementation of the ‘toolbox’, as defined in the Structured Dialogue (9).

7.1

The EESC supports free trade, one of the pillars of the European Union itself. At the same time, it voices the need to take into account the asymmetries between negotiating parties and respect for fundamental labour rights, as well as environmental standards. At the same time, it continues to support the WTO’s multilateral approach to trade rules. In the EESC’s view, it is necessary to completely rethink the involvement, both consultative and real, of the organisations that are most representative of civil society in drawing up agreements (10).

7.2

Over and above their strictly commercial aspects, these mega-agreements, such as the TPP, the CETA, the TTIP, the free trade agreements with Japan and India, and the RCEP are taking on an indisputable geopolitical dimension and attracting the growing interest of civil society, insofar as they concern rules and standards with a significant impact on its way of life. This is particularly important with regard to the impact on democratic decisions, the decisions of investor-state dispute settlement mechanisms and of legislative cooperation committees.

7.3

The challenge for the EU in this field is that, whilst geostrategic and economic opportunities are opening up, it is essential to guarantee European norms and standards, public services and the preservation of key areas of regulatory policy such as health, labour and environmental protection standards (11). The opinion of the EESC, and of civil society, is in favour of investor protection being guaranteed by the ordinary courts or, failing that, by an independent international court set up by the United Nations. It is also in favour of the effective involvement of organised civil society in the agreements, which goes hand in hand with a policy of real-time transparency of information, both during the negotiations and in the decisions affecting civil society (12).

8.1

In the EESC’s view, civil society is one of the building blocks of democracy. A civil society that enjoys freedom and rights, strong social partners, effective involvement in decisions, and institutional recognition is vital to achieve and consolidate democracy, prevent shifts towards authoritarianism, promote economic development, build peace, foster social cohesion, fight for equality in its various forms, to promote and enable a sustainable development model and enrich the democratic institutional structure. It is also key to developing closer ties with civil society in other countries and regions of the world, creating a parallel to the diplomatic activity that is essential for strengthening global histories, cultures, beliefs and objectives.

8.2

The EESC therefore advocates expressly including this component among the priority objectives of the CFSP, using various means for this reinforcement such as the funds for cooperation and developing human rights; diplomatic activity and demands; genuine, effective involvement — consultative and not solely on a listening-only basis — of civil society in trade and/or association agreements, as an integral part of them and with powers relating to all areas; strengthening policies that aim to ensure that European businesses present in other countries or regions respect the ILO core conventions and develop corporate responsibility policies as supported by the EU.

8.3

To this end, the EESC believes that the CFSP must involve European organised civil society in setting and implementing its objectives and priorities. The EESC suggests that the role of civil society could be improved by:

9.1

We believe that the EESC, as a consultative body to the European institutions and a representative of all major civil society organisations in the EU Member States, is best placed to become a key partner of the EEAS and the European Commission in strengthening and further developing an effective EU foreign and security policy. This assertion is backed up by its tripartite composition, its global outlook, its long-standing experience and its relations with civil society in other parts of the world, based for the most part on mandates derived through different types of international agreements signed by the EU: association agreements, strategic partnerships, free trade agreements, and agreements with candidate countries for EU accession (13).

9.1.1

We propose that the EESC hold a foreign and security policy audition every year, attended by the High Representative, bringing in the main European civil society organisations.

9.2

The EESC believes it would be very positive to establish a strategic relationship with the EEAS, based on the conviction shared by both parties regarding the importance of civil society in the EU’s external policy, particularly when implementing certain priority objectives. To this end, the EESC proposes jointly exploring these priorities and a means of formalising cooperation between the EEAS and the EESC.

9.3

The EESC could assist the EEAS in carrying out an evaluation report on the participation of civil society in the EU’s external policy.

9.4

In connection with foreign and security policy, the EESC will step up its cooperation with United Nations organisations such as the ILO and FAO.

20.7.2016   

EN

Official Journal of the European Union

C 264/11

Rapporteur:

Laura GONZÁLEZ DE TXABARRI ETXANIZ

Co-rapporteur:

Dorthe ANDERSEN

1.1.

The EESC considers that, in the current political context, both the Commission and the Member States must make a special effort to guarantee and promote the free movement of workers in the EU abolishing any discrimination based on nationality, avoiding unjustified restrictions for both workers and businesses, given that they are fundamental freedoms enshrined in the TFEU and one of the most highly-valued achievements of the European integration process. The EESC support initiatives which can encourage and promote fair labour mobility within the EU, as expressed also by the Dutch presidency and the Commissions aim to promote mobility.

1.2.

Labour mobility, when conducted under fair conditions and when it offers a positive option, can be enriching and beneficial for workers, employers and society as a whole. Labour mobility is a cornerstone of the internal market and can help to bring employment opportunities and prosperity to European citizens and companies. It can be an important element in achieving the objectives of economic growth and employment in the EU, helping to balance out the different employment levels in Member States, providing labour and talent where there is a shortage, can help ensure a more effective use of human resources and can also promote the transfer of knowledge, innovation and skills development, which is essential in a world undergoing technological change. Labour mobility can also help offset the effects of the ageing of the workforce in the country of destination.

1.3.

It can, however, in some cases and in certain sectors, lead to what is called ‘brain drain’, where in particular young people from certain countries with high rates of unemployment, move in search of a job or better opportunities for work. At the same time the positive value of free movement of labour must not be weakened or questioned by any unsubstantiated fear of all kind of abuses.

1.4.

In order to avoid such situations, the EESC urges the Commission and the Member States to promote economic policies aimed at boosting growth and productivity and creating high-quality jobs in every Member State with a view to improving the living conditions of all European citizens.

1.5.

Fair mobility requires ensuring compliance with the principles of equal treatment and non-discrimination on the grounds of nationality in accordance with the European acquis for European mobile workers exercising the right of freedom of movement, who are subject to the working conditions and wage-setting rules of the host country, in full respect of national systems for collective bargaining and industrial relations.

1.6.

The EESC urges the Commission to address, in consultation with the social partners, all necessary issues regarding posted workers to address unfair practices that lead to social dumping. Similarly, any new measures at European level must respect national competences for collective bargaining and the different systems of industrial relations.

1.7.

Concerning cross-border/frontier workers, the EESC considers that it is necessary to monitor the situation and collect data at EU level, in order to remove possible obstacles and ensure free and fair mobility of these workers.

1.8.

The EESC calls on the Commission, in line with its stated desire to end social dumping and abuses, not to allow other internal market initiatives to facilitate these practices (incl. the planned service passport).

1.9.

Labour inspection is required to play a key role in guaranteeing fair mobility. For this to be possible, the EESC calls on the Member States to provide sufficient competencies, staff and resources for national inspectorates and labour-market monitoring authorities, while supporting the improvement of European cross-border labour-market inspection tools Incl. improvement in cross-border enforcement of penalties.

1.10.

The EESC supports streamlining the rules on the coordination of social security systems and cooperation among the Member States for their implementation and underlines the need for any revision of Regulation (EC) No 883/2004 (1) to show due regard for the principle of equal treatment of mobile workers to ensure they do not lose acquired rights or find that they have no rights as a result of moving to another Member State in order to work.

2.1.

The EESC is drawing up this exploratory opinion on fairer labour mobility in the EU at the request of the Dutch Presidency, which states in its priorities that ‘worker mobility can boost economic growth and employment, but the downside has to be addressed to increase public support for the free movement of workers’.

2.2.

The free movement of workers is a basic freedom of the internal market and one of the pillars of the European integration process. It is furthermore one of the achievements most highly valued by the people of Europe. Developed on the basis of freedom of movement, the internal market has contributed to economic growth, employment and opportunities for citizens, workers and businesses. Labour mobility carried out under fair conditions can be beneficial to workers, businesses and society as a whole. It should therefore be facilitated by eliminating obstacles to it insofar as possible. Unfair competition or discrimination against workers should not be tolerated in the internal market.

2.3.

Labour mobility can also entail a number of disadvantages that need to be addressed in order to reduce their risks and to enable both workers and businesses to benefit fully from the opportunities it offers.

2.4.

The EU is working to increase fair labour mobility in Europe by removing barriers that hinder it. In its 2016 work programme, the European Commission announced that it would put forward labour mobility proposals containing measures ‘to tackle abuse by means of better enforcement and coordination of social security systems and […] present a targeted revision of the Posting of Workers Directive (2) to address unfair practices leading to social dumping and brain drain by ensuring that the same work in the same place is rewarded by the same pay’, and to promote labour mobility in the EU.

2.5.

The purpose of this opinion is to address the various aspects of labour mobility at a time when labour markets still suffer high levels of unemployment and are undergoing major upheaval, against a backdrop of globalisation, societal change and technological innovation.

2.6.

Following decades of very low intra-community mobility, EU enlargement, the 2008 crisis and rising unemployment have increased the migration of workers. In 2014, there were some 15 million mobile workers in the EU, compared with just under 12 million in 2006 (3). In the same year, there were 8,3 million mobile workers of working age living and working in another Member State, equivalent to 3,4 % of the entire workforce, in addition to the 1,6 million people living in one country but working in another (cross-border workers) (4).

2.7.

However, various factors mean that the free movement of citizens and workers in the EU is currently in doubt. The EESC is concerned about this development. The restrictions being imposed in the Schengen area by some Member States as a result of the influx of refugees (5) as well as exceptions to the equal treatment of intra-EU mobile workers agreed with the United Kingdom at the meeting of the European Council of 18 and 19 February 2016 (6) could affect one of the most highly-valued achievements of the European integration process.

2.8.

Free movement of workers and the abolition of any discrimination based on nationality are fundamental principles enshrined in the Treaty on the Functioning of the European Union (TFEU), which should be guaranteed and promoted. Furthermore, Schengen is central to European integration and the proper functioning of its economy. It should be a priority and an obligation for the EU and its Member States to ensure that the borders remain open and that citizens have an equal right to move freely and reside and work in any Member State.

2.9.

Since this impacts on workers and businesses in particular, the Commission must consult the social partners, both at sectoral and inter-sectoral level, about the need for any initiative in this area and its possible content. Similarly, any new measures at European level must respect national competences for collective bargaining and the different systems of industrial relations.

3.1.

The freedom of movement of workers is governed by Article 3.2 of the Treaty on European Union and Articles 4.2.a, 20, 26 and 45 to 48 of the Treaty on the Functioning of the European Union (TFEU). It entails the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration, and other conditions of work and employment. It allows access to the rights of mobility and residence as well as to economic and social rights, the basic rules governing which are set out in Directive 2004/38/EC on freedom of movement and residence in the EU (7) and Directive 2014/54/EU on measures facilitating the right to work in another Member State (8).

3.2.

The freedom of movement of workers establishes the right to move freely as well as the right to stay in a Member State for the purpose of employment in accordance with the provisions governing the employment of nationals of that State laid down by law, regulation or administrative action. This therefore comprises freedom of movement itself and the right to equal treatment in employment, social services, education and training, among other things.

3.3.

Labour mobility, when conducted under fair conditions, can be beneficial for workers, businesses and society as a whole. It can represent a major opportunity for the personal, economic and social development of citizens and workers and must therefore be facilitated.

3.4.

Mobility is a key factor of employability and developing talent and can be a way to address the differences between Member States’ employment rates by offsetting labour shortages wherever they arise and making better use of workers’ skills. It provides greater job opportunities for workers and offers employers greater scope in their search for talent. Mobility can consequently be a major element in achieving the Europe 2020 objectives for employment and economic growth.

3.5.

Labour mobility can also help promote knowledge transfer, innovation and the development of human capital, which is essential at a time of globalisation and rapid technological change. In the right conditions, fair labour mobility should encourage interaction between Europeans and should improve mutual knowledge and acceptance, thereby contributing to a more tolerant and inclusive society.

3.6.

But nor can we ignore the fact that labour mobility also entails a number of disadvantages. Europeans working in another Member State are sometimes, and for a variety of reasons, more vulnerable to abuse and discrimination with respect to social security, working conditions and wages, access to social benefits and education, taxation, etc. These factors can also distort competition between businesses, especially in labour-intensive sectors such as construction, which has a high concentration of very small businesses. Mobility can moreover result in family separation and difficulties in integrating into another country, due to linguistic, cultural and other barriers. The EESC has drawn up a number of opinions on the importance of supporting mobility within the EU and removing these barriers (9).

3.7.

The ongoing poor economic outlook, high unemployment and lack of job prospects in some EU countries are leading a number of workers, particularly young people, to look for a job or better wages and working conditions in other countries. This may have a positive side, insofar as it enables young people to work abroad, gaining experience and developing their skills, instead of being unemployed in their country of origin. What is more, once they return, the experience they have gained will benefit their country. On the other hand, this mobility can create the problem known as ‘brain drain’ and can exacerbate the impact of the ageing of the population in the countries of origin.

3.8.

In addition, a high level of mobility can lead to major challenges and spark tensions in the labour market of the countries of destination, particularly if the economic situation does not ensure an adequate level of growth and job creation to avoid increased unemployment.

3.9.

One prerequisite for maximising the benefits of labour mobility within the EU, whilst at the same time reducing the risks it poses and enabling both workers and businesses to fully benefit from the opportunities it affords, is to promote an economic policy to boost growth, productivity and job creation, enabling living conditions to rise in all countries.

3.10.

The public perception in some countries that labour mobility may entail social and wage dumping, combined with the unfounded belief that mobile workers exploit social and public services — so-called ‘benefit tourism’ —, helps to fuel hostility towards labour mobility. In response to these perceptions, various studies have found no evidence that higher social benefits in countries other than the country of origin constitute a significant reason for labour mobility. This is confirmed by the lower take-up of these benefits by intra-EU mobile workers compared with nationals. When mobile workers make more intensive use of certain benefits, this is due to specific socioeconomic circumstances (10). Studies show that the link between mobility and social benefits is minimal, with the country’s unemployment rate and salary levels playing a much bigger role (11).

4.1.1.

Similarly, the institutional, administrative and linguistic barriers that continue to hamper labour mobility must be overcome, taking concrete measures such as the provision of information and advice to mobile workers, in collaboration with the EURES network and the European Union network of public employment services, measures to improve language skills, the recognition of vocational qualifications, etc. in line with proposals set out in previous EESC opinions (12).

4.1.2.

Fair labour mobility should also be accompanied by measures to ensure growth and job creation in all EU countries, in order to avoid the differences between them deepening and to ensure that everyone benefits from this mobility.

4.1.3.

Only under these conditions can fair labour mobility be guaranteed as a positive option for workers, and not as a choice they feel forced to make.

4.2.1.

Posted workers have a different legal regime insofar as they do not make use of their right to free movement. It is the employer who benefits from the freedom to provide services by posting workers temporarily to another country. Employers and workers both benefit from not having to change the place of work stipulated in the contract and can keep up social security contributions in the country of origin.

4.2.2.

The legal regime applicable to posted workers is governed by Directive 96/71/EC (13) and its Implementing Directive 2014/67/EU (14), adopted in May 2014.

4.2.3.

Although there are no official statistics on the wages of posted workers, one report commissioned by the EC (15) notes that in the construction and transport sectors their wages can be up to 50 % lower than those of local workers. These differences can be explained by the incorrect application of minimum wages and other reasons such as the tendency to classify posted workers at a low level in the conventional classification scale. Though smaller, differences also exist in other productive sectors which vary from country to country. It is important to highlight the variety of information sources: labour inspections, reports by trade unions and employer organisations, the media (16).

4.2.4.

The Court of Justice of the European Union (CJEU) has also addressed the issue of the wage applied to posted workers, with the result that its case law has generated a great deal of controversy. This situation led the Commission to propose Directive 2014/67/EU (17) in order to improve measures to tackle fraud and abuse relating to the posting of workers. Member States have until 18 June 2016 to transpose the Implementing Directive. The EESC has already argued that this Directive, though a step towards strengthening the social dimension of the internal market, is not enough to satisfy the Committee’s requirements (18).

4.2.5.

In the context of the labour mobility package, the Commission announced a targeted revision of the Posting of Workers Directive ‘to address unfair practices leading to social dumping and brain drain by ensuring that the same work in the same place is rewarded by the same pay’ (19). On 8 March, it published its legislative proposal for the revision of the Directive (20), prior to the presentation of the labour mobility package and before the deadline for transposing the implementing directive. The EESC will deal with all issues relating to it in a separate opinion on the Commission proposal.

4.2.6.

In any event, the EESC notes with interest the European Commission’s stated intention to put an end to social dumping. The EESC reiterates what has been said in the opinion SOC/460, ‘stressing the importance of guaranteeing the protection of posted workers, respecting the various labour market models in the Member States and discouraging social dumping and unfair competition’. It is important — also in the future — to strike the right balance between the need to promote the freedom to provide services and the need to protect the rights of posted workers. The EESC will come back on this.

4.2.7.

The EESC calls on the Commission, in line with its stated desire to end social dumping and abuses, not to allow other internal market initiatives to facilitate these practices (incl. the planned service passport).

4.4.1.

The EESC considers that national labour inspection has to play a crucial role in fighting bogus businesses, underpayment and undeclared work by ensuring that the rights of mobile and posted workers are respected and enforced, and abuses prevented. This will also make it possible to prevent distortion of competition among businesses.

4.4.2.

The absence of controls in some countries — due to the lack of an appropriate labour inspectorate, the adequate competencies, the relevant know-how or the necessary resources — facilitates abuse. Labour inspectorates and other labour market monitoring authorities can be effective only if they are adequately funded and have enough staff, with appropriate training. In this connection, rules at European level are required incl. improvement in cross-border enforcement of penalties, together with support for Member States experiencing difficulties in creating such infrastructure.

4.4.3.

Combined with this, the improvement of European cross-border inspection tools, as suggested in the European Parliament resolution of 14 January 2014 (21), would help to identify and take steps against cases of social dumping, especially by identifying bogus businesses.

4.4.4.

This would fit in entirely with the recently established EU platform against undeclared work.

4.5.1.

The EESC supports streamlining the rules on the coordination of social security systems and cooperation among the Member States for their implementation and underlines the need for any revision of Regulation (EC) No 883/2004 to show due regard for the principle of equal treatment of mobile workers to ensure they do not lose acquired rights or find that they have no rights as a result of moving to another Member State in order to work.

4.5.2.

Ensuring the portability of social rights for mobile workers is another key aspect of fair mobility, both for those who go to work in another country and those who return to their country of origin after having worked in another country.

4.5.3.

In order to facilitate the free movement of people and promote labour mobility, the EU has pursued the approach of coordinating social security systems with a view to regulating relations between national systems, without altering the substance of their rules.

4.5.4.

A number of developments in the treaties have led to rules being promoted on the coordination of social security systems. These include Regulation (EEC) No 1408/71 (Basic Regulation) and Regulation (EEC) No 574/72 (Implementing Regulation), replaced by Regulation (EC) No 883/2004 (Basic Regulation) and Regulation (EC) No 987/2009 (22) (Implementing Regulation). Regulation (EC) No 883/2004 is currently under review.

4.5.5.

The EESC intends to issue a detailed report as soon as the Commission has made available its proposal for the revision of Regulation (EC) No 883/2004. As already stated in an earlier opinion, the legislative framework must be adapted to the changing realities in the world of work, to new forms of employment and, above all, to new forms of mobility (23).

4.5.6.

The EESC believes that the principles of equal treatment, aggregation of periods, exportability of benefits and the determination of the applicable legislation (unicity principle) are fundamental for free movement of labour and should be ensured in any future revision of Regulation (EC) No 883/2004.

4.5.7.

Regarding the free movement of jobseekers in another country, the EESC notes Commissioner Thyssen’s statement of 13 November 2015 in Dublin: ‘The right to movement of jobseekers also needs to be upheld in our view — particularly in light of the highly diverging unemployment figures between Member States. It is essential, however, that this is not at the expense of the host country’s social security system. With this in mind, we want to make it possible for someone who becomes unemployed to take his unemployment benefits to another country where he may have a better chance of finding a job. This is already possible today for a period of 3 months’. The Commission wants to prolong it to 6 months.

4.5.8.

Regulation (EC) No 883/2004 is complex, and national authorities therefore need to cooperate closely in order to ensure that differences in national regulations do not hinder free movement, and information needs to be as clear as possible to ensure that benefit recipients and businesses understand their rights and obligations. In addition, the use of electronic means should be stepped up, as should cooperation between Member States in order to minimise the information requirements placed on workers and businesses.

20.7.2016   

EN

Official Journal of the European Union

C 264/19

Rapporteur:

Christa SCHWENG

Co-Rapporteur:

Panagiotis GKOFAS

2.1

The EESC is convinced that integration is a necessity for our societies if we want to preserve social cohesion.

2.2

For the EESC a common European asylum system as well as a deep reform of the Dublin Regulation and a European plan for migration must be immediately deployed, to be effective and restore confidence in the values of our societies.

2.3

The EESC points out that integration is a two-way process. Best-practices in integration policies do not only target refugees but include locals as well. Such an approach is critical for the acceptance of the integration measures. Media, local authorities, trade unions, employer organisations and NGOs play an important role in this process. In order to create a positive climate towards refugees in the receiving countries — especially in times of little projected economic growth and tight labour markets in some countries — integration measures and social investments should be provided to the local population and refugees alike, covering the specific needs of each target group.

2.4

Language training should be provided soon after registration, if a positive decision on the asylum status is to be expected. This training should also include basic information on values, cultures and processes as well as identification of skills and qualifications. Cedefop could assist in developing methods to identify skills acquired in the country of origin.

2.5

The EESC recommends that special attention is paid to minors, particularly the unaccompanied, who are often traumatised and need socio-pedagogical support. A rapid integration into the school system or guidance on the professional training opportunities shall be provided.

2.6

The EESC stresses that refugees must have access to information about rights and obligations in the host society in general and on the labour market in particular. Refugees must be treated equally with locals on the labour market, in order to prevent unfair competition as well as social and wage-dumping.

2.7

The EESC reaffirms the praise for solidarity shown by segments of civil society, trade unions, employers’ organisations, private individuals and enterprises, in particular micro and craft SMEs, who have voluntarily assisted asylum seekers. The EESC stresses the importance of protecting and supporting such individual engagements, with appropriate incentives in particular during humanitarian emergencies, promoting solidarity in civil society.

2.8

The EESC stresses the need for the EU to base its immediate response to the situation on solidarity and fair sharing of responsibility and costs, as stated in Article 80 of the Treaty on the Functioning of the European Union (TFEU).

2.9

The Member States, EU competent authorities, including in the ‘transit’ countries, should cooperate with CSOs in monitoring, updating data information and coordination activities, to have a common, more effective EU asylum policy. Common, harmonised and up-to-date statistical systems should be developed in order to define EU and Member States policy options.

2.10

Further efforts in terms of investment to boost economic growth and employment are needed, inter alia, through the Juncker Plan, to achieve lasting success in integrating refugees. Additional investment in integration measures and social investments should be provided to the local population and refugees alike, covering the specific needs of each target group. The EESC has noted the potential positive effects of a financial transaction tax for public finances, by securing a fairer contribution from the financial sector. Due to the exceptional circumstances, and in line with the Stability and Growth Pact, the additional costs of hosting refugees should not be, after the thorough examination, recognised in the public deficits of the Member States. Investment in integration measures is costly in the short and middle term, but should be seen as an investment in people, which will pay off in the long term. If integration is successful it will lead to social cohesion, economic growth and job creation. The resources of the Asylum, Migration and Integration Fund (AMIF), as well as the European Social Fund (ESF), should therefore be increased as appropriate, particularly in those Member States that have exceeded their refugee quotas, in order to achieve better co-financing of measures to integrate refugees.

3.1

The conflicts in the Middle East have caused an unprecedented influx of refugees into Europe. People from war-torn countries mixed with people who wanted to leave their countries for economic reasons. All European countries have signed the ‘Geneva Convention’ of 1951 relating to the status of refugees, which grants basic rights to refugees in order to protect this vulnerable group. In view of the high number of people and in order to comply with the Geneva Convention and general principles of human rights it is important to clearly distinguish between economic migrants and refugees, that is, people in need of protected status (particularly asylum or subsidiary protection).

3.2

While it is fully understandable from an individual point of view that individuals leave their country in order to find better economic circumstances abroad, the current situation and the societal climate in the majority of Member States requires this clear distinction, Economic migrants have to return to their countries of origin, if they claim protected status on unjustified grounds. The EU action plan on return as well as the return handbook should be followed by the Member States in those cases where the claim for international protection was refused.

3.3

This requires a common European asylum system with efficient external border protection, proper registration at the so-called hotspots, rapid processing of asylum claims and arrangements for the return to the country of origin, or to a third country with which a readmission agreement has been concluded, of asylum-seekers whose applications have been rejected and who have not been granted international protection. It could also be significant and effective to establish hotspots in the third countries bordering the EU and having agreements on migration policy for registration and asylum request.

3.4

The events that occurred during the second half of 2015 have shown that third country nationals often come to Europe with false expectations and rosy images of life in the EU that are usually provided by smugglers. Confronted with reality, the reaction of these third country nationals is disappointment and in some cases voluntary return. In the framework of a voluntary return programme participants could contribute to painting a more realistic picture of European life to citizens of their home countries, which might prevent others from embarking upon the dangerous journey to Europe.

3.5

Aside from the need to make the common European asylum system fully operational, to establish a sustainable and fair sharing of responsibility and costs and in order to reduce pressure on the current asylum system, it will be necessary to swiftly adopt a new European approach for migration, as well as a deep reform of the Dublin Regulation able to tackle short and long term challenges, as has been announced by President Juncker for the first quarter of 2016. The EESC will express its views in a separate opinion.

3.6

In its resolution on refugees, adopted in December 2015, the EESC has stressed that ‘the current situation requires the EU to develop safe humanitarian corridors for refugees from countries affected by wars and threatened by terrorism and to do this together with the countries where these refugees are mostly concentrated’. The EESC reaffirms that the registration process should already take place outside the EU.

3.7

War, climate change and lack of prospects in third countries may create a continued and even increased influx of refugees and migrants. Limiting push factors for migration in general is a global challenge. The present opinion, however, is solely dedicated to the integration of individuals with granted protected status or people applying for such status.

4.1

The Dutch presidency asked for integration lessons to be drawn from previous crisis that generated large refugee movements. The EESC came to the conclusion that the current refugee crisis is not comparable with previous ones, first due to the number of people that are on the move, more than 900 000 migrants enter the EU boarders through Greece during 2015, and second due to the rapidity of the evolution, leading to increased uncertainty among the local population. Looking for example to the Austrian case where about 90 000 refugees came at the beginning of the 90s, escaping from the war in former Yugoslavia, one can see the differences quite clearly: People from Bosnia often had relatives in Austria, or had already worked there. The qualifications achieved in the country of origin were of immediate value to the Austrian companies, and women were used to fully participate in the labour market. This increased the family income and made families more mobile, which prevented the creation of designated areas and favoured a better social intermix at schools and on the labour market.

4.2

The experiences from the situation in the 90s are not completely comparable to today’s situation. People arriving now have more diverse backgrounds, with some having academic degrees that can be compared to European ones, others have education that might not be of immediate use in Europe, whereas others have very limited education and many women have never participated in the labour market. Moreover, people in receiving countries, still suffering from the aftermath of the economic crisis, tend to be rather reserved towards foreign people competing on the labour market.

5.1

According to the UNHCR there is no consensus on the definition of immigrant integration in the context of developed countries and there is no formal definition in international refugee law. Broad understanding of integration as processual, individual and two-way underpins many government and academic attempts to define what integration or an integrated society looks like.

5.2

‘At the core of the UNHCR’s definition is the concept of integration as a two-way process and this is premised on the “adaptation” of one party and “welcome” by the other. It does not however require the refugee to relinquish their cultural identity, and integration therefore differs from assimilation’ (1). This definition corresponds with the EESC’s view (2).

5.3

The EESC has underlined the need to link integration with the values and principles set out in the Treaty, the Charter of Fundamental Rights, the European Convention on Human Rights, the Europe 2020 agenda, employment policy and the social agenda. The EESC considers this reference to be of vital importance, as it takes into account the existence of a crisis of values in certain social and political sectors in Europe. Integration and economic and social cohesion are two sides of the same coin (3). Ensuring decent living conditions and prospects for everybody will foster acceptance of integration measures.

5.4

The Common Basic Principles for Immigrant Integration Policy (2004) and the vehicle for its implementation, the Common Agenda for Integration (2005) form the basis upon which migrant integration in the EU is formulated, and view integration as comprising the following:

5.5

Although these principles do not differentiate between migrant and refugee integration, the EESC also regards these principles as a basis for the integration of refugees. However, due to the large number of people arriving in Europe, additional efforts are necessary in order to provide language training, housing and labour market integration.

5.6

In order to create a positive climate in receiving countries towards refugees — especially in times of little projected economic growth and tight labour markets in some countries — integration measures and social investments should be provided to the local population and refugees alike, covering the specific needs of each target group. The importance of connecting and mainstreaming social objectives in the context of integration has been stated by the EESC (4).

5.7

The EESC is convinced that integration of refugees is an absolute must for our societies if we want to preserve social cohesion. A lack of integration can lead to parallel societies which may destabilise receiving countries. It is therefore in our own interest to start integration measures from a very early stage. Media should be encouraged to acknowledge the importance of integration and the role they play in creating a positive political and societal climate.

5.8

The demographic developments in most European countries show a decline in working age population. In order to keep our social systems sustainable for the next generations the integration into the labour market of the entire labour force, regardless of, for example, gender, age, physical ability, religion, sexual orientation or (ethnic) origin must become a priority. Investment in integration measures is costly in the short and middle term, but should be seen as an investment in people, which will pay off in the long term. If integration is successful it will lead to social cohesion, economic growth and job creation.

5.9

The local level has a decisive role to play in integration, as it is the place where people live together and where a lack of integration first becomes visible. Communities should get advice and guidance on well-functioning integration measures, such as inviting refugees to participate in local voluntary associations (e.g. trade unions, NGOs, firefighters or sports clubs).

5.10

The European Commission’s website on integration (5) contains a wealth of information on integration examples. By using search filters best practice examples can be found, according to, for example, country, field of integration, target group. This website should be further promoted to inspire Member States, local authorities, NGOs and social partners on integration activities

5.11

Based on a proposal from the EESC, a structured collaboration between civil society organisations, the EESC and the European Commission via the European Migration Forum, which deals with all questions related to migration, asylum and integration, is already in place. In addition it could be useful to extend the mandate of the advisory committee on free movement of persons to the integration of refugees, as this is the body via which governments discuss and exchange ideas with social partners. This committee could provide an additional space for sharing best practices.

6.1

Asylum seekers arriving in Europe after (in most cases) an exhausting and often traumatising journey need first and foremost a place to stay and rest. This time should be used by the authorities to properly register them and to roughly evaluate whether they have a chance of receiving the status of a refugee. In this case, integration measures should start from a very early stage. According to recent research by the World Health Organisation, there is a need for special medical treatment for refugees with developed post-traumatic stress disorder, as this frequently is one important barrier for integration.

6.2

Integration is not thinkable without having at least a basic knowledge of the language of the receiving country. Therefore, language training should start as early as possible during the asylum procedure. This requires the establishment of new structures as well as an improved interface management in order to cope with the large number of asylum seekers. Language courses should also be used to acquaint asylum seekers with the values (e.g. equal treatment of women and men, freedom of expression, prohibition of domestic violence) and culture of the receiving country. These courses can also be used to provide asylum seekers with basic guidelines on issues of organisations, institutions and information where to turn to, when problems arise. Asylum seekers often come from very different cultures. Actions resulting from a lack of awareness about the receiving countries’ basic values, rights and obligations may harm integration.

6.3

Refugee children should attend schools with local children as quickly as possible and receive support in learning the national language. Special attention must be paid to minors, particularly the unaccompanied, who are often traumatised. If they are — due to their age — not allowed to attend school any more, adequate offers especially designed for this group should be provided in order to prevent frustration. Member States should be aware of the special needs of traumatised children and unaccompanied minors, and offer socio-pedagogical support (e.g. the City of Vienna tries to place unaccompanied children into foster families using existing frameworks).

6.4

The early identification and classification of certificates, skills and qualifications are essential in terms of guaranteeing rapid integration into the employment market. Already at the beginning of an asylum procedure the professional skills and qualifications of the asylum seeker should be mapped out, with the involvement of labour market experts. These aspects are indispensable for targeted language promotion, the initiation of a training course, the recognition of professional qualifications, the provision of necessary secondary qualifications and the effective procurement of suitable employment. However, the identification of skills can be a very difficult process. Many refugees do not even have their personal documents with them let alone their attestations or certificates providing evidence of their level of qualifications. Different methods in order to test skills and competences are being developed by different Member States (e.g. Germany, Austria). Cedefop could provide a platform for mutual learning and an exchange of best practices in this field.

6.5

Asylum procedures often take a very long time, leaving the asylum seeker in a position of uncertainty. Long periods during which the asylum seeker is not able to lead a self-determined life may cause psychosocial instability, loss of self-confidence and dependency syndrome, which may impede employment chances even after recognition as a refugee. Children are even more affected as they need a stable environment. The EESC therefore calls on Member States to decide on asylum procedures as quickly as possible. According to the OECD (6) on integration support for asylum seekers, the asylum procedures in Greece, Belgium and Denmark have the shortest duration, and include language training combined with adult education and job related training.

6.6

With regard to projected economic growth and the labour market situation, countries may try measures to reduce waiting times for labour market access. While Germany and Hungary have already reduced waiting times for access to work, Finland, Belgium and Luxembourg have made some moves to reduce it. Fair, transparent and reasonable regulations to grant labour market access for asylum seekers prevent undeclared work and raise acceptance with locals. At the same time, people with protected status should have on the prospect of staying in the host country, if they are integrated in the labour market or the host society. Asylum seekers must be made aware that their labour market access is dependent on the country where they claimed asylum. Due to a lack of knowledge, some travel to other Member States hoping to find a job there. In reality they find themselves in a situation of irregularity, which could easily be avoided through proper information.

6.7

Housing is very important with regard to integration: reception centres satisfy the immediate need for a place to rest (and often for a much longer period than planned), but stays of a longer duration make integration more difficult. In Austria, the project ‘Kosmopolis’ for private housing has been established. In a newly-built area, a certain number of apartments are reserved for refugees, who are already in employment. In order to avoid misunderstandings between refugees and other people living there, an information centre has been established nearby. In Portugal, a protocol between the Lisbon Municipality and Portuguese NGOs has enabled the provision of housing for refugees and access to the municipality’s services for training, education and integration into the labour market (7).

6.8

After a positive decision on asylum status the refugee has to find housing himself. This period is often very difficult as the support which was initially granted by the state ends and the refugee has to find employment in the same way as nationals of the receiving country.

6.9

The public employment service has a particular role to play in this context. First and foremost, it should actively fulfil its role as a facilitator of sustainable employment. But it also has to decide on additional qualifications the refugee may need to acquire if he/she is to succeed in the labour market. It must be noted and taken into consideration that, even after the 4th year of duration of stay, only 25 % of refugees are employed; even up to the 10th year, it is only around 50 % (8). An individual integration contract with each refugee could be concluded, containing the relevant actions which have to be undertaken (additional training, number of applications, etc.) in order to integrate fully into the labour market. The EESC stresses that refugees must be treated equally with locals on the labour market, in order to prevent unfair competition as well as social and wage-dumping. If there is no chance of finding a job for the refugee in reasonable time, volunteering for community service could be offered as a good alternative. It could support the acquisition of additional language skills and help the refugee to integrate into society.

6.10

A good example is that of Germany who has recently decided to introduce an ID card specifically for asylum seekers. After registering for the first time, the card becomes the central and obligatory means of identification, linked to a central database that contains information such as a person’s educational background and professional experience.

6.11

Among the refugees, as well as among the local population, there are people with entrepreneurial interests and skills. They should receive information and guidance on how to start a business and become an employer.

6.12

Discussions are currently taking place in Germany and Slovakia on how refugees with high qualifications in professions with skills shortages could be admitted to the labour market via fast track procedures.

6.13

Refugees need information about the labour market in general, the professional training opportunities and the jobs available. As a high percentage of refugees are of a typical student age, between 16 and 25, basic information or preparatory courses in different professional fields need to be provided before training can commence. In Germany the Chambers of Commerce and Industry have started initiatives to assist with placements such as, for example, speed-dating-style interviews. The German CCIs support businesses to provide qualifications and training for refugees via the ‘Commitment to training’ project. They also try to attract voluntary sponsors to look after refugees and firms, giving advice to both sides. CCIs also provide support to refugees who want to start up their own business.

6.14

In Austria a project has started which aims to place young refugees in unfilled apprenticeship places with the support of the public employment service and coaches. A traineeship period may precede the signing of a formal apprenticeship agreement. Furthermore, the Austrian Federal Train Service (ÖBB) started the ‘Diversity as chance’ (‘Diversität als Chance’) project and offered 50 unaccompanied refugees between 15 and 17 years old apprenticeships.

6.15

In order to facilitate the integration of highly-qualified migrants, the Austrian Federal Economic Chamber has developed the programme ‘Mentoring for migrants’, which has been extended to highly-qualified refugees. Mentors are people who are well-integrated in the Austrian labour market and who support the migrant during their job search by providing information or even access to their own professional network. This programme also helps to avoid cultural misunderstandings.

6.16

In a number of Member States, so-called ‘Refugee buddies’ take care of refugees. They engage voluntarily at a variety of organisations, and meet regularly with one refugee, in order to establish personal relations. This is all the more important as a large number of refugees are unaccompanied minors, who have left their families behind. Buddies could also act as advocates in order to improve the image of refugees in their country.

6.17

Social partner organisations in some Member States (e.g. Spain, France, Germany, Czech Republic, Austria) have called on their governments to work more effectively on the integration of refugees. In Spain, an additional measure was included in the Annual Employment Plan policies specifically aimed at labour integration of refugees.

6.18

Denmark uses the so-called ‘staircase model’ for the integration of refugees into the labour market: in the first step (four to eight weeks) the competencies of the individual refugee are identified and Danish lessons provided. In the second step (26-52 weeks) the trainee is placed in an enterprise (at no cost to the employer) and given additional Danish lessons. After this, the refugee is ready to take a job with a wage subsidy. Effective implementation of such models should foster the creation of additional employment opportunities and prevent crowding-out of locals (no ‘revolving-door’ effects).

6.19

In order to guarantee fair competition, working conditions including wages have to be fully respected regardless of the nationality or the status of a worker (lex loci laboris). Member States have to ensure efficient measures, mechanism and administrative capacities to enforce it. Trade unions support refugees or migrant workers who are without documentation in claiming their rights (‘École des solidarités’ — Belgium, ‘UNDOK’ — Austria).

7.1

The EESC points out that any measures will have to be properly funded, to have a lasting positive impact on our society. Further efforts in terms of investment to boost economic growth and employment are needed, inter alia, through the Juncker Plan, to achieve lasting success in integrating refugees. Additional investment on integration measures and social investments should be provided to the local population and refugees alike, covering the specific needs of each target group. The EESC has noted the potential positive effects of a financial transaction tax for public finances, by securing a fairer contribution from the financial sector. Due to the exceptional circumstances and in line with the Stability and Growth Pact, the additional costs of hosting refugees should not be, after the thorough examination, recognised in the public deficits of the Member States (9).

7.2

Member States of initial reception, such as Italy, Malta, Spain and Greece, should receive direct economic aid for each refugee or migrant so they can accurately and speedily process applications for asylum or arrange for return in the event that the requirements for granting asylum are not met. Member States taking on the responsibility of integrating more refugees into their societies than required by the principle of solidarity, should also be able to count on the financial support of the EU.

7.3

The financial resources of the Asylum Migration and Integration Fund (AMIF) should be increased in order to better engage with the Member States in financing the integration of refugees, in particular for programmes carried out by the local authorities and NGOs. The European Social Fund should also be increased as appropriate to provide extra resources to facilitate the social integration of refugees, the equality of women, support for businesses and the inclusion of refugees in the labour market which requires dialogue and collaboration with social partners. In addition, the Regional Development Fund should work with extra resources for urban areas which implement arrangements required for the reception and integration of refugees.

7.4

International cooperation concerning the funding of refugees’ integration should be explored with the special cooperation of the UNHCR and the International Organisation for Migration.

20.7.2016   

EN

Official Journal of the European Union

C 264/28

Rapporteur:

Mr Vitas MAČIULIS

1.1

Energy is an inseparable part of international politics, and is currently at the top of the EU agenda. As some international players attempt to use energy as a tool for achieving political aims, it is in the interest of the EU’s citizens that the EU remains vigilant with regard to energy questions.

1.1.1

Three factors are paramount for the external dimension of energy: diversification, ‘speaking with one voice’ and a properly developed internal energy system.

1.2

Diversification of the EU’s energy sources, suppliers and routes is essential for external energy policy. As underlined in the EU’s Energy Union Strategy, a key challenge for the EU is that more than half of the energy consumed comes from imports, which must be secured through the certain trade policies.

1.2.1

The circle of energy import partners must be expanded by constantly looking for and establishing dialogues with new, reliable and predictable energy suppliers.

1.2.2

New major infrastructure projects, contributing to the diversification goals, should meet the objectives of the Energy Union Strategy and be in full conformity with the EU acquis. They should also be fully consistent with the objective of developing a decentralised energy system where renewable energy sources play a crucial role.

1.2.3

Cooperation between representatives of private and political sectors should be encouraged in order to find the most suitable ways and partners for external energy development. The goals of energy security and sustainability should always be taken into account.

1.3

‘Speaking with one voice’ must be pursued in spite of different energy mixes, energy import structures and traditional partners among the Member States. A common internal EU position is key to a strong external dimension.

1.3.1

The EESC urges the Member States to coordinate their individual energy interests and constantly maintain solidarity and transparency towards one another.

1.3.2

The EESC welcomes the proposal of the Commission of 16 February 2016 reinforcing the current information exchange mechanism with regard to inter-governmental agreements and non-binding instruments.

1.3.3

Common environmental and nuclear safety standards in the energy projects being implemented in the EU’s neighbouring countries should be an important point of the EU’s external energy policy. Energy purchases from countries that fail to comply with these standards should be limited.

1.4

A strong internal energy system is the cornerstone for reducing external impact: one of the core dimensions of the Energy Union is the creation of a fully functional and transparent internal EU energy market. It would translate directly into a more effective EU approach to external energy issues.

1.4.1

All the necessary parts of energy infrastructure must be established, making it possible to optimise and streamline the import of energy resources into the EU.

1.4.2

The EESC underlines the need to fully integrate the energy networks and systems of all Member States into the EU’s internal market and ensure that they are fully synchronised.

1.4.3

The competitiveness of the EU’s energy producers must be preserved by establishing a level playing field between European and non-European energy producers.

1.4.4

The EESC calls for the design and implementation of the EU’s external energy policy to take account of the need of EU industries, particularly energy-intensive industries, to have at their disposal a competitive, stable and predictable energy supply, in order to be able to operate on a level playing field with its international competitors.

1.5

A forward-looking energy policy, which would help achieve the EU’s external goals, including in the context of the COP21 agreement, should primarily rely on systematic attention to the EU’s climate policy goals and international efforts to mitigate climate change, mainly by developing three key factors: renewable energy sources, energy efficiency and research and development.

1.5.1

Renewable sources are the essential element in increasing energy security and reducing import dependence.

1.5.2

The EU should do its utmost to maintain the leading position in the field.

1.5.3

Energy efficiency is one of the cornerstones for lowering the volume of the EU’s energy consumption and consequently reducing the amount of imported energy. It is therefore essential to reduce the energy expenditure of private and commercial consumers.

1.6

Research and development must receive adequate resources, which would lead to increased effectiveness and decreased costs of energy production. International cooperation is clearly also important in this context.

1.7

As energy should be affordable for consumers and supportive of the competitiveness of industry, the EESC calls on the Commission and national governments to give a broad role to civil society, the social partners and consumer organisations. For this reason the EESC asks for a European Energy Dialogue and a European Energy Forum including all stakeholders. This is crucial for the establishment of an intelligent, efficient and sustainable EU external energy policy.

1.7.1

The EESC must rally its international bodies to play an active role in the creation of an effective and resilient EU external energy policy.

2.1

Energy issues only recently became significant in the EU’s policy debates and have risen to the top of the European Commission’s agenda. The EESC is also active in the field of the external dimension of energy and has already issued a number of opinions on this topic (1).

2.2

Given the growing dependency of the EU on energy imports, particularly of oil and gas, the external dimension of EU energy policy is becoming crucial to underpinning the security of energy supplies.

2.2.1

More than half (53,2 %) of the EU’s gross inland energy consumption comes from imports. The EU imports 44,2 % of solid fuels (of which more than half is hard coal), 87,4 % of petroleum and petroleum products and 65,3 % of natural gas (Eurostat data, 2013).

2.2.2

These numbers clearly underline the extent of the EU’s dependency on trade with third country suppliers. Therefore, should the supplier prove to be unreliable or unpredictable or should the infrastructure not be properly maintained, the energy security of the whole EU could be seriously damaged.

3.1

The EU should look for new opportunities for cooperation and strengthen existing energy partnerships with third countries in terms of the diversification of sources, suppliers and routes.

3.2

It is most likely that Russia will remain the main energy import partner of the EU for the foreseeable future. It is especially relevant in terms of pipeline gas.

3.2.1

A key priority of Russia is to at least maintain its favourable position on the EU energy market, which is both its largest energy export destination and a very reliable customer.

3.2.2

The Nord Stream II pipeline project is currently a key item on Russia’s energy agenda, directed towards increasing natural gas exports to the EU. Concerns have been expressed within the EU, as to whether this project could contradict the EU’s Energy Union strategy on gas supply diversification. The EESC sees the most important role of the Commission as being a thorough evaluation of the Nord Stream II project and its compliance with the EU acquis, including the Third Energy Package, as well as the objectives of the Energy Union Strategy, notably the diversification of energy sources, suppliers and routes.

3.2.3

The interests of every Member State must be taken into account when establishing a common position of the EU with regard to Nord Stream II. The commercial aspects of the project should not be the sole factor in the decision, especially considering the tendency of Russia to use energy as a tool for geopolitical aims.

3.3

Norway is a valuable partner of the EU on the international stage with shared policy priorities, including in the energy sector. As a member of the European Economic Area Agreement Norway is a part of the EU’s internal market.

3.3.1

The significance of the Northern dimension is likely to increase, as is cooperation in the northern areas with regard to oil and gas fields in the Arctic Ocean. However, particular emphasis should be placed on the sensitive environmental context if and when companies begin to seriously explore the potential resources in this area.

3.4

The EU’s energy cooperation with its Southern and Eastern Mediterranean Partners has gained a new impetus with the recent establishment of regional platforms encompassing gas, electricity, renewables and energy efficiency. These platforms are envisaged to be instrumental for facilitating and enhancing energy cooperation.

3.5

Considering Central Asia as a region of strategic importance and rich with energy resources the European Union has committed to establish a durable and stable relationship with it. As noted in the Foreign Affairs Council conclusions on the EU strategy for Central Asia adopted on 22 June 2015, the EU calls for strengthening energy links, which would contribute to mutual energy security.

3.6

Connection of the Caspian Sea region with the EU market through the Southern Gas Corridor will open new possibilities for natural gas trade and contribute to the EU’s diversification objective. The Trans-Anatolian natural gas pipeline (TANAP) will be a central part of the interconnection along with the Trans-Adriatic (TAP) pipeline.

3.7

Energy relations with the US are becoming increasingly important on the EU’s agenda, as reflected in the EU-US Energy Council. The US is currently experiencing an era of cheap gas as a result of unconventional gas production. The EU should seize the moment and encourage the development of the transatlantic liquefied natural gas (LNG) trade as this would contribute substantially to the diversification of energy supply.

3.7.1

The Transatlantic Trade and Investment Partnership (TTIP) could become a significant tool to promote, among other fields, transatlantic energy security. The EESC urges the parties to direct all efforts towards duly addressing energy issues in the agreement.

3.8

The EU’s energy security is closely linked to its neighbourhood energy affairs, which means that the EU should continue to work closely with its neighbours and expand the scope of mutually beneficial cooperation.

3.8.1

The EESC calls on the Commission to further strengthen the Energy Community, especially in terms of implementation of the EU energy acquis with regard to the Contracting Parties (2).

3.8.2

The key objective of the Energy Community is the expansion of the EU’s internal energy market. The EU must continue to strengthen cooperation with neighbouring countries and their civil societies with the aim of establishing a genuine pan-European energy market. The EESC welcomes the Commission’s proposal for the security of supply regulation directly involving the Energy Community countries.

3.9

Following the lifting of the international sanctions on Iran, the EU must seize the moment and re-establish energy relations given the potential role that Iran can play in diversifying the EU’s sources of energy supplies.

3.10

The EU should also accelerate and strengthen efforts to reinforce solid partnerships with such diverse, yet significant third countries as Canada, Turkey and Algeria. The EESC welcomes the engagement of high-level energy dialogues with these countries in 2015.

3.11

The energy dimension should be duly reflected in trade agreements with third countries. In addition, energy agreements with third country suppliers must fully comply with the EU legal provisions and energy security principles.

4.1

On 20 July 2015, the Foreign Affairs Council approved an Energy Diplomacy Action Plan (EDAP) to support the external dimension of the Energy Union Strategy. The plan is aimed at strengthening common messages to enable the EU to ‘speak with one voice’ on major energy issues and to meet the energy objectives in a spirit of solidarity and common interest, instead of re-nationalising energy policies.

4.1.1

The key dimensions of the EDAP include diplomatic support for the diversification of energy sources, suppliers and routes, increasing cooperation with transit countries (especially Ukraine) and key third country energy partners, further strengthening the Energy Community and maintaining the strategic engagement of the EU in the energy-related multilateral initiatives.

4.2

An information exchange mechanism for Intergovernmental Agreements (IGAs) was established by a decision adopted by the Parliament and the Council on 25 October 2012, to ensure that the agreement is legally clear and transparent and complies with EU law. In February 2016, the Commission came forward with a proposal strengthening the existing mechanism.

4.2.1

The EESC welcomes the attempts to bring legal compliance and transparency to the EU’s agreements with third parties (3), and would therefore support the strengthening of the current information-sharing mechanism.

4.3

The EU should remain committed to the promotion and continuous improvement of environmental and nuclear safety standards in third countries.

4.3.1

Particular attention must be paid to the nuclear power plants being constructed by third countries near the borders of the EU (i.e. Astraviec nuclear power plant in Belarus, which was found to be non-compliant with the provisions of the Espoo Convention). The EU should underline to third parties the importance of ensuring the all-round safety of such projects in line with the IAEA Nuclear Safety Convention and other relevant international agreements. The Commission should increase its efforts to ensure that countries which have agreed to the nuclear stress tests according to the EU rules, fulfil this commitment as soon as possible. Further, unsafe plants should get their energy access to the EU restricted.

5.1

A strong internal energy system translates directly into a resilient external position. Therefore, the EU should aim to streamline its internal approach to energy issues.

5.2

The Energy Union Strategy is a priority initiative which aims to consolidate a common EU response to energy challenges. As energy security underpins the EU’s economic and social prosperity, it becomes a collective responsibility of the Member States, energy producers, consumers, transit countries and the international community, all of whom are involved in today’s globalised energy markets.

5.2.1

A key pillar of the Energy Union is the improvement of interconnections between the Member States and the full implementation of the internal energy market acquis. The full integration of the EU internal market will increase competition among energy providers, which in turn would result in better prices for the end consumers.

5.2.2

As LNG becomes ever more widely available at global level, it presents the EU with new opportunities for gas supply diversification. Therefore, internal LNG infrastructure should be strengthened and developed. Within this context, the EESC welcomes the LNG and gas storage strategy adopted by the Commission in February 2016.

5.2.3

Complete integration of the EU means the elimination of ‘energy islands’. The EESC underlines the need to fully integrate the energy networks and systems of all Member States into the EU’s internal market both by developing physical infrastructure to connect the grids and finally solving the synchronisation issue of the three Baltic States (4), as the operation of their electricity system is currently dependent on a third country operator (Russia).

5.2.4

The competitiveness of the EU’s energy producers must be preserved. A level playing field between European and non-European energy producers must be established, in order to ensure that the EU’s competition rules are followed by all participants in the energy market.

6.1

Renewable energy sources create a direct opportunity for the EU not only to lower its dependence on imported fossil fuels, but also to make its domestic energy production more sustainable. The EESC recognises the development of renewable energy sources as one of the most important actions towards a more secure energy future. However, the EU should not rely on past successes, and should do its utmost to maintain the leading position in the field. In addition, EU officials should encourage third countries to set ambitious goals for renewable energy.

6.1.1

The EU is already looking beyond 2020 and has established even more ambitious targets for 2030. A common goal of at least 27 % of energy deriving from renewable sources would require Member States to increase cooperation on the regional level, further consolidating the EU’s energy sector.

6.1.2

Within the context of mitigating climate change, the EESC welcomes the COP21 agreement and the EU’s commitment to cut greenhouse gas emissions by at least 40 % (from 1990 levels) by 2030 as set in the climate and energy framework. The EU should not only encourage its partners to work actively in the field, but provide practical help if deemed necessary.

6.1.3

Decentralised energy production as well as energy cooperatives would contribute to meeting the EU’s climate and energy targets. It allows involving the wider society to work towards energy independence and security in their countries as well as in the entire EU. Therefore, the best practices of cost-effective self-generation and consumption should be adopted.

6.2

Energy efficiency is also a direct way of tackling the issue of the EU’s high level of energy imports. A target of an improvement of at least 27 % in energy efficiency (the same as for renewable sources) was set for 2030 across the EU, with the European Commission making serious efforts to implement the ‘energy efficiency first’ principle. In turn, the Energy Union will continue to promote better access to financing instruments for energy efficiency, notably in the transport and buildings sector, and encourage Member States to give energy efficiency primary consideration in their own policies.

6.3

Contributing adequate resources to the field of research and development is crucial in order to maintain technological advances in energy production and smart distribution. This is especially relevant in terms of renewable energy, with the aim of making its production cost-friendly and reliable. In addition, development of cutting edge technologies, such as usage of hydrogen, fuel cells and nuclear fusion in energy generation, should be kept up.

6.4

The EESC urges the EU to take a leading part in addressing the energy issues of the developing countries in a sustainable manner through policies and initiatives aimed at extending financial, technical and legal assistance. Support of education and training in related fields should be the main tool for the expansion of cooperation with developing countries.

7.1

As consumers expect energy to be accessible and supportive of the competitiveness of industry, the EESC calls on the Commission and national governments to involve civil society, the social partners and consumer organisations in energy affairs and maintain an open dialogue. It would contribute significantly to a better understanding of the energy issues at hand.

7.1.1

Energy poverty is a global issue which cannot be overlooked in terms of either the internal or external energy policies of the EU. A helping hand must be extended to those threatened the most.

7.2

Civil societies should show more initiative in energy policy making processes. The EESC welcomes the Joint Declaration on energy signed by the EU-Ukraine Civil Society Platform (CSP) on 11 February 2016, which aims to strengthen the role of civil society and to prepare recommendations on the rule of law for the relevant authorities.

7.2.1

Energy issues must become part of the agenda of the EESC’s international meetings, as well as an important topic in debate with the civil societies of partner countries.

1)

‘Civil society contribution to the review of the EU-Central Asia Strategy’, EESC opinion (OJ C 242, 23.7.2015, p. 1).

2)

‘The Energy Union strategic framework’, EESC opinion (OJ C 383, 17.11.2015, p. 84).

3)

‘Energy — a factor for development and a deeper accession process in the Western Balkans’, EESC opinion (OJ C 32, 28.1.2016. p. 8).

4)

‘Securing essential imports for the EU — through current EU trade and related policies’, EESC opinion (OJ C 67, 6.3.2014, p. 47).

5)

‘Intergovernmental agreements between Member States and third countries in the field of energy’, EESC opinion (OJ C 68, 6.3.2012, p. 65).

6)

‘Involving civil society in the establishment of a future European Energy Community’, EESC opinion (OJ C 68, 6.3.2012, p. 15).

7)

‘The external dimension of the EU’s energy policy’, EESC opinion, 2009 (OJ C 182, 4.8.2009, p. 8).

20.7.2016   

EN

Official Journal of the European Union

C 264/35

Rapporteur:

Milena ANGELOVA

1.1

The EESC welcomes the Commission’s declared aim in publishing this Green Paper and the fact that the Commission is on track and has an ambitious programme for implementing the Action Plan on Building a Capital Markets Union (1).

1.2

The EESC endorses the Commission’s idea of endeavouring to facilitate the cross-border penetration of retail financial services and the possibilities for consumers to switch providers. Such measures should ensure a more competitive market structure and increase the convenience to financial service consumers, including by promoting even access to out-of-court redress mechanisms across the Member States (MS) (2).

1.3

The EESC welcomes the Commission’s approach in the Green Paper of seeking suitable policies to stimulate both sides of the retail financial services market: supply and demand.

1.4

The EESC endorses the idea that consumers should be given the opportunity, whenever possible, to compare different products, so they can make an informed choice. In this respect, the EESC fully supports the Directive on markets in financial instruments (МiFID) II — at the same time as still preparing its opinion on the recently proposed revisions (3) — and the Regulation on packaged retail and insurance-based investment products, which require better transparency and disclosure of information (4).

1.5

One of the Green Paper’s goals is to reduce the market fragmentation in retail financial services. To this end, the EESC would like to point that there is no absolutely reliable evidence that the price differences are due only to a market failure within the EU. National and local factors also influence the prices of products and services, thus making price harmonisation between Member States (MS) more difficult. For example, the premium for a consumer’s car insurance policy in one MS and the equivalent premium in another MS could be completely different owing to the loss ratio, which is based on the number of road accidents or number of fraud cases in each of these countries. Similarly, consumer credit interest rates can differ between MS depending on their level of bad debt. Such local factors are correctly referred to in the Green Paper, but they merit further analysis. The EESC therefore keenly awaits the results from the consultation and invites the Commission to look further for any evidence of insufficient competition and for clearer reasons to explain the price differentials detected. It should also pursue this examination in the impact assessment to be carried out before the expected legal proposals.

1.6

At the same time, the EESC wants to emphasise that many of the problems highlighted in the 2007 Green Paper on Retail Financial Services (5) still remain valid — eight years later — in the present Green Paper. The EESC generally endorsed that earlier Green Paper (6) and praised the actions that had been undertaken to find some practical solutions (7). Despite some positive results, however, progress has been limited and the problems for the functioning of a single market in retail financial services remain. In the EESC’s view, therefore, results from the consultations on this Green Paper need this time to be translated into a more ambitious programme that overcomes the longstanding problems.

1.7

The Green Paper takes into consideration a wide variety of financial products, for which the greater choice and opportunities cannot come about simultaneously for all. Clearly, they will need different prioritisations and timeframes. The EESC suggests that the results from the consultation process be applied as a matter of priority to simpler products for which local factors have comparatively less importance. In this way the process of creating a single market for financial products will gain momentum and confidence. Examples of such products could be payment services, pan-European pension products (PEPP), savings accounts, and car and life insurance. One of the first steps could be the application across all MS of the bonus malus system in automobile insurance, which diminishes the importance of local factors and ties insurance premiums closely to the profiles of individuals. Products such as mortgages, consumer loans, professional insurance and asset management should follow in the timeframe.

1.8

While the Green Paper puts the emphasis mostly on digital technologies, the EESC sees two important factors for more cross-border demand of products which should be taken into consideration as well:

1.9

The EESC finds it imperative to make every effort to avoid reopening Directives (such as PSD 2 and MCD (9)) that have been just adopted. Certain time has to be allowed for measures to be applied effectively and the introduction of new regulatory measures should be executed with caution so as not to over-regulate financial markets.

2.1

The European Commission published the Green Paper in connection with the Action Plan on Building a Capital Markets Union (10) in order to examine how the European market for retail financial services — namely insurance, loans, payments, current and saving accounts and other retail investment products — can be further opened up, bringing better results for consumers and firms, whilst maintaining an adequate level of consumer and investor protection at both European and national level.

2.2

The Green Paper is very much concerned with responding to the challenges of digitalisation, which can help bring down prices and improve the comparability of products, thus empowering consumers in their financial choices. In the long run, digitalisation should allow firms to make their products available anywhere in the Union, bringing a single European market closer to reality.

2.3

Another important issue raised by the Green Paper is how to build confidence and trust, since these are crucial to the expansion of the Single Market in financial retail services. To achieve these objectives, the document focuses on how to make the services and products more comprehensible.

2.4

The Green Paper also explores what can be done to help the Single Market in financial services deliver tangible improvements to people’s lives in the EU and to create new market opportunities for suppliers, thereby supporting growth in the European economy and creating jobs.

3.1

The EESC believes that the fragmentation of the markets for retail financial services underscored in the Green Paper is due to the combined influence of national and local factors on the prices of products and services (the constraints of laws, regulations, culture and public social protection systems), as well as to both demand- and supply-side market challenges that will need to be tackled in the future.

3.2

The main supply-side challenges are:

3.3

The main demand-side challenges are:

3.4

The EESC also accepts that the development of digitalisation creates a new environment and considerably expands the scope for providing new services and for enhanced cross-border activity. Nevertheless, care must be taken to ensure that digital advances are not used to mislead the consumer by providing information about financial services that is too complex, irrelevant or difficult to compare.

3.5

The EESC points out that people’s financial literacy still varies greatly from place to place and is relatively low compared with other developed countries, such as the USA, Australia and Canada (12). Pre-sale financial advice is not well regulated and does not guarantee that customers will select the most appropriate products and professional financial advice services are insufficiently developed compared to some non-EU countries.

3.6

The possibilities offered by new technologies and increased supply — including cross-border supply — create opportunities, but they also come with some potential risks. They could lead to high debt levels, mortgage defaults and more cases of insolvency if consumers lack the necessary financial knowledge. Consumers who buy insurance and pension products online might be at risk because they often do not do enough research and may sign up to contracts without knowing it (13). National regulators should therefore ensure that companies selling products online comply with a ‘duty of advice’ to protect consumers. There are more than enough arguments to show the importance of financial education and proper advice.

3.7

Consumers who do not understand the concept of compound interest accumulate larger debts and bear higher interest rates and transaction costs (14), while those with financial knowledge plan better, save more for retirement (15) and diversify financial risks (16). The same also applies at macroeconomic level, where financial literacy can be seen to have a strong beneficial effect on national savings and wealth accumulation (17). To that end, it is strongly recommended that a clearer distinction be drawn between activities involved in marketing products and those involved in selling products, especially in cases where advice is provided. Advice should on no account be used as a marketing tool and advisors should be truly independent. The pre-contractual information should be provided and presented in a clear and comprehensive manner. The EESC strongly believes that — in order to restore trust in financial service markets, increase cross-border activity and improve the portability of financial products — targeted measures are required for educating individual investors and improving financial advice.

4.1.1

The Green Paper contains questions concerning various banking and nonbanking products and services, but there are considerable differences between the main transaction products (such as current accounts or fixed-term deposits) and contractual products (such as mortgages or saving and investment products). When it comes to saving and investment products, some other EU legal instruments (such as the МiFID or the initiative on building a capital markets union) will have an effect on the market when they enter into force.

4.1.2

For all products discussed in the Green Paper cross-border provision has the potential to increase competition in national markets. However, those with the greatest potential at this stage are undoubtedly pension and investment products. The Commission’s scorecard-based system ranks the market for these products as the worst of 31 consumer markets (18). The pension products offered are characterised by localism and high fees. If inflation, management fees and additional payments are taken into account, these products often have negative real return and display worse results than the relevant market indices (19). For this reason, the EESC strongly supports the idea of a single market for pension products and, more specifically, for developing a pan-European personal pension product (20) that will lead to increased economies of scale, lower prices and greater consumer choice.

4.1.3

Concerning insurance products, some of these are easily portable, such as life insurance products, in which the customer is protected even when he moves outside the local boundaries. However, others have elements that are locally regulated and require adaptations when entities try to distribute them in different countries. Article 11 of the Insurance Distribution Directive (recast) (21) stipulates that MS must establish a single point of contact responsible for providing information on ‘general good’ rules in their respective MS and charges EIOPA with including on its website the hyperlinks to the websites of competent authorities where information on these ‘general good’ rules is published. Furthermore, full cross-border provision will still not be possible — or even desirable — because of the actual client needs that are serviced by the products and because of differences in behaviour and risk factors that affect product conditions. The EESC welcomes solutions that will help to mitigate the lack of portability of products and recommends that in some cases at least partial solutions could be found, such as possibilities for policy holders to pay only for the differentials between the higher coverage and the lower coverages in different MS.

4.1.4

The most substantial supply-side barriers are listed in point 3.2. To overcome those, it is necessary to:

4.1.5

The most significant demand-side barriers are addressed in point 3.3.

4.1.6

Thanks to new technologies, digitalisation in particular, it is possible, for the first time, to make a real breakthrough in cross-border provision of financial products. They could play a considerable role in providing more and better-quality information, in increasing product transparency and comparability and in identifying customers. Also, they could offer cost-saving benefits, by removing the need of maintaining physically located contact points. However, they are no substitute for overcoming other important obstacles, such as the uneven level of harmonisation of legal regimes and consumer protection.

4.1.7

There can be no doubt that, in the future, there will still be people who, for one reason or another, are unable to use digital technologies. This should not deter efforts to encourage the use of such technologies in the provision of financial products. This is because, firstly, traditional means of supplying such products will continue to exist for a long time and, secondly, such people will be able to access a wider range of products on the basis of well-regulated financial advice services.

4.1.8

The widespread use of digital technologies will undoubtedly create certain challenges for information security and data and consumer protection. Therefore, along with the various regulations governing the supply of — and demand for — financial products via such technologies, an assessment of the risks presented by these challenges should be conducted and ways of minimising them proposed.

4.1.9

There is no commonly accepted definition for safe, simple and comprehensible financial products. However, the general understanding is that such products should possess characteristics such as price transparency, appropriateness and comprehensibility in the user’s language for effective communication, possibilities for comparison with similar products, clarity, and straightforward outcomes. These are not easily achievable in so complex a world as the financial marketplace.

4.1.10

Products with these characteristics in the strict sense are rarely available on markets and as a result consumers do not have an easy access to them. This is true both for countries with well-developed financial markets and for those with less developed markets. The wide variety of products existing in some MS does not necessarily make things easier for consumers, because it can lead to confusion, to difficulty in deciding and to making the wrong choice in the end.

4.1.11

Access to such products can be provided by establishing a basic class of financial products (22) at European level that comply with specific standardised requirements depending on the needs they are targeted to satisfy. They should be certified and bear a specific name in order to be easily recognised by consumers. Such a class may include common products such as different savings accounts and fixed-term life insurance. The relatively high cross-border marketing rate of UCITS gives grounds to expect that PEPP could be created based on UCITS success factors and be included in the same class. The existence of such a class of products would increase confidence in financial markets.

4.1.12

In many countries, ‘gold-plating’ (23), different interpretations of European legislation, delays in harmonisation, and differences in the transposition of European legislation into national legislation, as well as differences in the concrete application, have been observed, in a way that leads to excessively high administrative requirements and barriers. All these are obstacles to integration and have an adverse effect on consumer confidence.

4.1.13

European Supervisory Authorities (ESAs) are responsible for consumer protection. The EESC would encourage the implementation of this task, in compliance with the following principles:

4.1.14

Finally, the ESAs should always favour practices that are better for customers. Priority should be given to:

4.1.15

The Green Paper deals well with the currently predominant trends, namely weak cross-border competition in retail financial services and limited choice of financial products for consumers.

4.2.1.1

Better information for customers and helping them switch

4.2.1.1.1

Increasing financial literacy and the accessibility of financial advice are undoubtedly essential. Consumers should not only have accessible information, but also be able to understand it or to have access to high-quality and appropriate financial advice services.

4.2.1.2

In spite of the growing trend among consumers to use digital services to obtain information, a considerable proportion of them still prefer personal contact, especially when negotiating products. Given the current state of consumer knowledge, behaviour and preferences, however, banks could think of more suitable channels for increasing consumer knowledge of financial services — a pan-EU consumer website, for example. The sources of financing such a website should be further discussed, but they may combine the efforts of the national governments, local authorities and third party aggregators. When creating such a tool, the fact that the insurance comparison facilities belong primarily in a context of national cultural understanding should be taken into consideration. It will therefore be very challenging for a pan-European insurance comparison service to successfully cater for the diversity of users/clients in Europe, especially regarding comparison of the risk to be covered, which exists in a national and local cultural, legal, fiscal, social etc. context.

4.2.1.2.1

The EESC supports efforts to make the market more effective, flexible and transparent and backs the present regulatory initiative’s focus on better consumer protection. It takes the view that the quality of the services accompanying the provision of financial services could also be improved by means of better use of the advantages of digitalisation and by exploiting the potential of different intermediaries, with well-trained and qualified staff and an adequate methodology for providing complete, objective and comparable information for consumer choice.

4.2.1.2.2

The information provided should be precise, comprehensible and relevant to users. Flooding consumers with information should be avoided, as should oversimplifying the reality in order to stress better returns. A good example here is the practice for switching financial service providers in the United Kingdom, where the accuracy of the switch between the sending and receiving banks is guaranteed by an independent third party, which ensures that the switching process takes place simply, transparently and within seven working days. Another best practice is the portability of mortgage loans in Italy introduced in 2006 (25).

4.2.1.3

Tackling complex and prohibitively high fees for foreign transactions

4.2.1.4

Regulation (EC) No 924/2009 of the European Parliament and of the Council (26) has already eliminated the differences in charges applicable to cross-border payments in euro with respect to corresponding payments in euro at national level. An ad hoc assessment could be conducted to check whether the application of this provision to all currencies within the EU (i.e. aligning cross-border and domestic fees for a payment denominated in a given currency) would make sense and benefit consumers. Regarding the information provided to payment users, under the new PSD2 (27) payment services providers have to inform the client — the payment services user (PSU) — before it is bound by a contract or an offer, about all charges it has to pay to the PSP as well as the actual or reference exchange rate to be applied to the payment transaction, in the case where a currency conversion applies. Once the transaction has been executed, the PSD2 contains similar provisions on the information that PSPs have to provide to the payer and to the payee. The EESC believes that no further action is needed, as PSD2 already imposes clear transparency requirements on payment providers. Besides, the application of Regulation (EC) No 924/2009 on cross-border payments could be extended to other non-euro currencies in the EU.

4.2.1.5

The EESC believes that the PSD2 sets clear transparency requirements that will allow both payers and payees to be duly informed of the exchange rate applied prior and after making a cross-border transaction. This Directive has to be transposed into national law by 13 January 2018, therefore no further action is needed.

4.2.2.1

For insurers, residence is of significance because:

Local factors such as climate or seismography need to be taken into account when deciding, for example, the conditions and pricing of home insurance; without a certain critical mass, it is impossible to provide services on a convenient basis. Actuaries’ models operate with a high margin of error when the number of events used for calculations is not high enough. Moreover, when hedging risks through reinsurance, the reinsurance models price the hedging differently based on locality.

4.2.2.2

Increasing portability of products

4.2.2.2.1

In general terms, insurance products that deliver a remuneration or simple pay-out would be more easily portable than those that deliver a service or claims handling.

4.2.2.2.2

Life insurance products are already portable to some extent in the sense that the customer is covered when travelling abroad, except in certain cases if he travels to high-risk countries. Local life insurance also provides him with coverage irrespective of where he is located. But there still remains the case when a policy holder moves to another country not as a traveller but as a permanent resident. In such a situation he should be able to continue with his insurance by adjusting the premium or the coverage of the policy. All these would be cases in which insurance products deliver a determined amount of money.

4.2.2.2.3

Other insurance products are not easily portable per se, because their conditions are intrinsically related to country elements. For instance, in the case of health insurance, the product design and pricing is pretty much dependent on the coverage provided by the public health system in each particular country.

4.2.2.2.4

Linked to this, there is also a question of scale: adapting the product specifically for the customer to the actual conditions that he might demand when living abroad is theoretically possible, but that would imply renouncing the possibilities of attaining economies of scale. The product would be too tailor-made to his case and the entity providing the product would be less competitive than actual local providers. The best option here would be to promote collaboration between insurance companies with a presence in different European countries.

4.2.2.3

Another case of insurance products that deliver services are home and car insurance. Those products that deliver damage repair or deal with car accidents require the insurance company to have agreements with service providers across the country, which requires a certain scale to be commercially viable. However, a feasible option is to promote cooperation with local (insurance) companies to offer this service in other countries.

4.2.2.4

Facilitating access to — and recognition of — professional indemnity insurance across borders

16.

4.2.3

One way to enable access to mandatory professional indemnity on a cross-border basis would be to harmonise mandatory professional indemnity amounts and conditions.

4.2.3.1

Giving people the trust and confidence to benefit from opportunities elsewhere in Europe

4.2.3.2

Facilitating access to — and recognition of — professional indemnity insurance across borders

4.2.3.2.1

The EESC finds the independent websites that provide information and enable comparison of the specific products and services offered by different providers in the various MS to be one possible good option to increase awareness. It strongly supports the idea of a purpose-built official website, which could be supported either by an administrator assigned at legislative level, with the providers obliged to themselves update the information at certain time intervals, or through a network created by consumer organisations in the MS. Different websites could also be linked in a decentralised, inter-connected system.

When digital solutions are used for comparison, the platforms should provide clear information for the purpose of comparing equivalent products and the risks consumers could face when using them. When there are more differences than the platform can compare (the main focus of platforms is usually price), the characteristics not compared should be clearly specified. All significant conditions relating to product differentiation should also be listed. Consumers should be clearly warned about the possible risks involved when using comparison platforms (for example, by aggregating their personal data).

4.2.3.2.2

The comparison should be of the significant parameters and should not be misleading. Use of personal data should be limited to the absolute minimum necessary to offer consumers benefit, while information should be provided in a way that is clear and easy to understand.

4.2.3.3

Improving redress in retail financial services

4.2.3.3.1

Out-of-court dispute resolution is a considerably more flexible procedure than court proceedings: cheaper, faster and with far fewer formalities. Such a procedure is particularly useful internationally and, in view of the desired increase in cross-border supply of — and demand for — financial services, FIN-NET should be given a larger role. Sadly, consumer awareness of what FIN-NET has to offer is comparatively low at this stage and measures should be taken to improve this. Moreover, not all EU MS — only 22 out of 28 — are members of FIN-NET (29). If this situation persists, it will obviously not be possible for FIN-NET to be used as an infrastructure for facilitating the building of a single market for financial services. As such, the possibilities of regulatory requirement in this regard should be carefully considered.

4.2.3.3.2

In most cases, there is no such access. The concept of mis-selling is still largely not understood and it is not practically applied because of its unclear formulation and the lack of experience among regulatory authorities (30). In many places, the tests for determining the financial products suitable for customers are formal and do not result in selection of the most suitable products for them.

4.2.3.3.3

It is possible to guarantee access to financial compensation if a single, precise and practical definition of ‘mis-selling’ is introduced and a pan-European regulatory practice is enforced to sanction such sales (31).

4.2.3.4

Protection of victims where motor insurers are insolvent

4.2.3.5

There is an example of best practice in Spain. The Spanish entity ‘Consorcio de Compensación de Seguros’ acts an insurer in the event that there is no insurance company that accepts the risk or in the absence of an insurance company — in the event of insolvency, for example, and always on a subsidiary basis. The guarantee of this entity only applies to Spanish entities. To ensure that victims of car accidents are covered at the same level, the EC will have to require a similar guarantee scheme in all MS. It could be envisaged to extend a similar instrument on a European basis to countries where it does not exist.

4.2.3.6

Increasing transparency and comparability of ancillary insurance

4.2.3.6.1

The new Insurance Distribution Directive (32) has strengthened the requirements of transparency in the information for insurance distributors, including — although with certain restrictions (threshold) — for ancillary insurance intermediaries. Furthermore, five major car rental companies committed themselves in 2015 to improving their websites to better inform consumers about optional waivers and insurance products. These are good steps forward. MS will have until 23 February 2018 to transpose the Insurance Distribution Directive and it is thus too early to tell whether further measures are needed. At the same time, it seems advisable for the Commission to monitor whether the commitments of car rental companies have been met, which is not just about insurance products, and to consider further measures to enhance transparency and to prevent consumer detriment.

4.2.3.6.2

In the case of car rental sectors, it is important to take into account the fact that the requirements of the add-on insurance products are often differentiated depending on the risk profile of the renter (usually linked to a credit card limit) or depending on the motor claims ratio or other market features of the MS. But in any case, the pre-contractual information and the efforts to make different offers comparable are important for consumers and it would therefore be advisable to wait until the requirements of this Directive are fully in place to analyse whether further measures are needed.

4.3.1.1

Helping firms make better use of digitalisation

4.3.1.1.1

The EESC welcomes the promotion of innovative digital financial services across Europe. However, it admits that banks are the biggest providers of financial services and they also need to be encouraged to actively take up the opportunities offered by the digital revolution. To that end, they must be subject to the same rules as their competitors providing similar services, which necessitates a review of the main layers of bank regulation in a considerable number of areas so that equal competitive conditions are provided in terms of:

4.3.1.2

Enabling electronic signatures and identity verification

4.3.1.2.1

There are still differences between electronic identification regulations and the know-your-customer and anti-money-laundering requirements. Existing regulations require personal identification and personal evaluations to be carried out in order for customers to be accepted on a permanent basis. Such requirements limit the development of fully digital financial services, raising significant barriers to the taking on of new consumers and increasing costs.

4.3.1.2.2

Further action is needed to overcome the lack of a Europe-wide mechanism for electronic identification and signatures due to differences in national practices: Although the regulations set common standards for digital signatures in the MS, the way they are applied at national level by local operators impedes the cross-border recognition of digital signatures. Local digital operators are not interconnected and this limits their capacity to offer European consumers fully digitalised financial services.

4.3.1.2.3

Yes, action is necessary with regard to:

4.3.1.3

Improving access to — and usability of — financial data

4.3.1.3.1

Although there is general agreement about the aspects of a customer’s financial situation that should be used for assessing creditworthiness, lenders use their own expert assessments and internal methods to assess and manage each particular case. For this reason, initiatives obliging banks or other credit institutions to share processed information that they acquire about their customers’ creditworthiness should be avoided. At the same time, raw (non-processed) data could be shared — with the permission of the customer concerned and in compliance with EU data protection standards. This would improve the comparability of the creditworthiness assessment.

4.3.1.3.2

Financial institutions make efforts to become more familiar with consumer behaviour so that they can diversify and personalise their products and services more successfully. There are no clear rules, however, on how the collected data should be used, even when consumers have given their consent. The EESC finds it good to provide greater clarity about the applicability of the rules in this area in order to ensure consumer protection and, at the same time, enable consumers to benefit from financial innovations.

4.3.1.3.3

Insurance histories contain sensitive personal data from customers. The home insurance company cannot transmit this information to any other stakeholder, but only to the actual customer. It is up to the customer to provide this history to a new insurance company. This does not amount to creating a barrier to cross-border services, since the customer can take his history to a country that he might prefer. At the same time, the Commission, assisted by EIOPA, should explore ways to promote the standardisation of the exchange of claims histories between insurance companies and the acceptance of bonus malus systems.

4.3.1.4

Facilitating the provision of after-sales services

4.3.1.4.1

Post-contractual services in another MS should not differ from those in the country where the products in question are available. This means that the product in question and related post-contractual services should be considered as a single entity for the cross-border supply of financial products. The application of this principle must be guaranteed, otherwise consumers will be put on an unequal footing. It is important that the relevant regulatory authorities monitor the application of this principle.

4.3.1.4.2

Platforms supporting businesses (firms) in offering their products cross-border should also include sections for post-contractual services. A practical way for such post-contractual services to be offered is for companies to be encouraged to form groups and work together to get a sufficient scale of operation.

4.3.1.5

Moving to harmonise procedures for personal insolvency, property valuation and collateral enforcement

4.3.1.5.1

The main problem in this area concerns the forced recovery of debts in the event of borrowers failing to meet their credit agreement obligations. In the light of this, lenders do not currently regard cross-border mortgage lending an attractive proposition, so additional action is needed to stimulate the EU’s internal market in this area.

4.3.1.5.2

Mortgages and loans are among the financial products whose marketing across borders face numerous barriers that are difficult to overcome. It is likely that, of the whole range of financial services, these will be the products for which it takes longest to overcome the barriers. Consequently, at this stage, it is better to focus initial efforts on other retail financial services, where there are fewer barriers, and to gain practical experience and momentum through actively working on these.

4.3.2

4.3.2.1

Making it easier for firms to meet legal requirements applicable in other MS

4.3.2.1.1

Application of European legislation in many areas — such as, but not exclusively, in the offering of investment products — is inconsistent and contradictory in the various MS. As a result, assistance needs to be sought from national authorities in order to eliminate ‘gold-plating’.

Another good initiative is the Solvit network, which gives businesses EU-level support when they encounter problems with public authorities that are not applying EU law correctly and ‘Points of single contact’ provide assistance to the firms regarding their obligations when providing services across borders (33).

4.3.2.1.2

Capitalising on the Solvit experience, it makes sense for efforts to be made to achieve a solution targeted specifically at financial products, at better cooperation and coordination between national regulators, including help from regulators for innovative firms to understand their obligations.

4.3.2.2

Fully exploiting freedom of establishment

For insurers, a local presence is often necessary in order to have a better knowledge of the on-the-spot risk and of the consumers to be covered. Freedom of establishment on the spot is therefore essential for insurers such as mutual insurance companies. The fact that there is no European recognition of forms of social economy enterprises, including mutual insurance companies, prevents the establishment of these kinds of enterprises in Member States which do not recognise them, thus holding back their cross-border development, as well as the development of markets and competition. The EESC calls on the Commission, the Council of the European Union, the European Parliament and the Member States to push forward recognition of the mutual model in the European Union.

4.3.2.3

Creating autonomous or more closely harmonised EU-wide regimes

4.3.2.3.1

From the point of view of cross-border distribution, the following issues merit attention:

4.3.2.3.2

The location of risk is usually the place of habitual residence of the insured person, with some exceptions in cases of real estate, where it is the location of the building. This principle is usually standardised worldwide and it has legal and tax implications for the parties involved. The EESC believes that the location of risk principle in insurance is fit for purpose. However, it understands that the rules on the ‘general good’ need to be revised, as they give MS the opportunity to adopt legislation that is likely to hinder cross-border distribution of insurance products.

20.7.2016   

EN

Official Journal of the European Union

C 264/51

Rapporteur:

Denis MEYNENT

1.1

The EESC regrets that the Commission does not make more specific proposals in this communication and simply lists various angles without taking a position on them, which makes it harder to have a well-structured debate.

1.2

Copyright remains a fundamentally important way to protect and fairly pay authors and those involved in disseminating works and performances via interconnected digital networks.

1.3

The Committee calls for the Marrakesh Treaty to be swiftly ratified. Exceptions for teaching, scientific research and the exchange of knowledge should also be a priority, and it is also in favour of digitising orphan works.

1.4

The EESC is of the view that a united European position on private copying is possible and desirable. A large proportion of the revenue from private copying levies should logically be directed towards funding literary and artistic works and promoting cultural diversity, as well as towards public goods such as education and research, for example.

1.5

The EESC calls for a new legal context to promote the creation of copyright-protected work and, simultaneously, to enhance the contribution of new types of licence and new business models to building the European single market, while preserving freedom of contract and the right of authors and creators to reap the full benefit of their works.

1.6

The EESC considers a regulation to be the best instrument for establishing the digital single market. Existing legislation should also be consolidated.

1.7

The EESC encourages the Commission to conduct studies and in-depth research on business models linked to free licences, on their current and potential economic importance, on the revenue and jobs they could create in various fields, and on any legal proposals that would enhance their profile and use.

1.8

The EESC believes that Europe’s cultural diversity is at the heart of European identity and that this diversity should be fostered and promoted among the Member States.

1.9

The fight against copyright violations should prioritise putting a stop to and penalising infringements on a commercial scale. To this end, it is vital that Member States’ law enforcement bodies and judicial authorities work together and exchange information.

1.10

The transfer of value in the online environment that currently benefits self-proclaimed intermediaries who avoid creators’ consent and remuneration should be addressed.

2.1

The action plan examined here aims to modernise European copyright rules. The Commission’s communication lays out the plan’s key elements, aimed at delivering its digital single market strategy: broadening access to content across the entire EU, stipulating copyright exceptions, creating a fairer market, and combating commercial piracy, while also encouraging the long-term unification of copyright.

2.2

In particular, the communication includes a proposal for a regulation on cross-border portability of online content services (1), which would constitute a new right for European consumers and should come into effect in 2017, the year when roaming charges will also be abolished in the EU.

3.1

Movement of digital content between European countries accounts for a very small proportion of the total (4 %); most digital services are located in the USA, and the remaining movement takes place within national borders. The European digital single market is currently very undeveloped. Barriers still exist, and they represent a particular hindrance to cultural exchanges among many European linguistic minorities that are located on opposite sides of several national borders.

3.2

In his programme ‘A new start for Europe’ (2), the president of the Commission made it a priority to establish a large-scale, connected digital market for all EU countries without national discrimination.

3.3

Copyright is the legal mainstay of creation and is the basis for the remuneration of authors, creators, performers and other right holders and, more globally, for the ecosystem of cultural and creative activities and industries. Copyright is a territorial law and differs between Member States. It confers exclusive and extensive rights everywhere for right holders, who receive revenue not just from licences, but also simply because a work could be copied onto other media or given to a third party by the purchaser of a licence, with no requirement to prove that a copy has actually been made (levies for private copying and taxation of blank media that could be used for making illegal copies). Some honest user activities, done in good faith, are even classed as criminal offences in some Member States, while being permitted in others.

3.4

There are minimal exceptions and limitations to copyright in any country. Copyright was invented in an era of printing on paper and was designed for the technology of that time — primarily book publication, but also newspapers, periodicals and sheet music — and is no longer entirely in step with a digital world of constantly evolving high-speed interconnected networks. It must be refined. In other areas, such as new ways of accessing music and audiovisual works, managing rights has become more complicated due to the fragmentation of repertoires, which should be resolved by the new Directive on collective management of copyright (3). Little had changed between the time of wax discs and DVDs, particularly in terms of distributing or lending works. New technologies have ushered in a comprehensive paradigm shift, and almost all record and DVD shops have vanished, giving way to new forms of online distribution and lending. The same is true for cinema, television, and all art forms that can be put on the internet.

3.5

The fact that the relevant law has failed to meaningfully evolve prevents us from fully harnessing all of the possibilities opened up by the digitisation of works and intangible productions, and their subsequent circulation through an internet that is rapidly developing and becoming ubiquitous.

4.1

The EESC regrets that the Commission does not make more specific proposals in this communication and simply lists various angles without taking a position on them, which makes it harder to have a well-structured debate.

4.2

In its opinion of 26 October 2006 (4), the EESC called on the Commission to put forward proposals to promote and protect free licences such as the LGPL for technical documentation and the Creative Commons licence for literary and artistic works. But despite the importance of this issue — the vast majority of servers and server farms in the world operate under free licences such as Debian, or GPL in the case of GNU/Linux — it must be noted that the Commission has as yet made no proposals of this kind.

4.3

This is detrimental to the development of cross-border movements of data and services within the European single market. Indeed, the Creative Commons licence and the public domain constitute new universal spaces brought about by digitalisation and the interconnected network, while the fragmented state of the law throws up just as many other obstacles as border barriers to cross-border interaction.

4.4

Rather than constraining and stifling authors and creators, as well as users, the law should unlock the incredible potential of the internet for them. European legislation should enable the elimination of as many obstacles as possible that hinder cross-border interaction among linguistic minorities within the EU and provide easier access to services and works.

4.5

Rather than fearing such developments, right holders should make the most of the opportunities they offer. ‘Free’ does not automatically mean ‘free of charge’: open-source software, for example, allows for a different business model, revolving around the service and creating jobs, unlike some current practices that favour the owner’s profits and legal protection.

4.6

The EESC once again encourages the Commission to conduct studies and in-depth research on business models linked to free licences, on their current and potential economic importance, on the revenue and jobs they could create in various fields, and on any legal proposals that would enhance their profile and use.

4.7

A great deal of consideration should be given to experiments such as making the following available on the internet under free licences: scientific publications; reports of research funded by public money; and university courses — such as all courses offered by MIT — so as to compensate for the disproportionate cost of higher education in some countries. These should be studied to gauge to what extent they might be implemented in the EU (MOOCs). In this way, higher education and culture become public goods helping to bring about a knowledge society, which we wish to develop in the EU.

4.8

Modes of production are changing, and intangible goods and services distributed by interconnected networks represent new directions for economic development and the creation of jobs and innovative businesses. Modes of consumption have started to change, and these new forms are rapidly gaining ground. However, we must be clear: in spite of this fact, the European single market does not yet exist in relation to the current providers of intangible services. This is mainly due to different preferences and cultural practices in different Member States, the language spoken by consumers, and also the fragmentation of copyright which does not make it any easier to develop the European market or to create multi-territorial, even European, licences.

4.9

The EESC calls for a new legal context to promote the creation of copyright-protected work and, simultaneously, to enhance the contribution of new types of licence and new business models to building the European single market, while preserving freedom of contract and the right of authors and creators to reap the full benefit of their works. These new models can be developed alongside the models set out in the WIPO treaties. This issue should be an integral part of the digital strategy announced by the Commission in May 2015 and of the plan to modernise copyright examined here.

4.10

Exceptions represent another barrier. The EESC urges Member States to ratify the Marrakesh Treaty, which stipulates an exception for blind or visually impaired people, as soon as possible. The EU has signed this treaty, but only the individual Member States can ratify it so that it can enter into force. The EESC recommends that the Commission follow the opinion of the European Parliament of 9 July 2015 and urge the Member States to promptly ratify this important treaty, which was very difficult to negotiate due to the conservative viewpoints of certain stakeholders. The Committee also urges the European Council to make every effort to speed up the ratification process.

4.11

Additionally, more works that are accessible to blind or visually impaired people should be produced: over 95 % of books are not currently accessible to them.

4.12

Other exceptions connected to the digital age and networks should be taken into consideration, especially in relation to public research; the digitisation by university and public libraries of literary works that are in the public domain or are orphan works; and the lending of e-books and audio and visual resources, given the rapid spread of e-readers and a wide variety of new media. At the same time, it is important to note that some tech industries try to recapture protection for what is already in the public domain, restricting access for commercial strategies.

4.13

Geographical zoning is another obstacle to disseminating works. While affecting all potential users, it has a particular impact on the very many linguistic minorities in the EU, due to the differences between the political map and linguistic map of Europe, a historical legacy of the wars of the 19th and 20th centuries. The rise of populist and nationalist voices has lent an urgent political dimension to solving this problem. The European Charter for Regional Languages has been widely ratified but, to take one example, the current barriers significantly reduce the cultural impact of television broadcasts in regional languages.

4.14

The EESC believes that Europe’s cultural diversity is at the heart of European identity and that this diversity should be fostered and promoted among the Member States.

4.15

These issues are key for the EESC and the Committee encourages the Commission to consider its proposals, which are in compliance with international copyright treaties and might open new prospects for completing the EU digital single market.

5.1

Substantial changes will be needed in the very near future, along the lines of the 16-initiative strategy published in May 2015 and of the preceding general comments that propose a major new initiative to promote public goods, interoperability and cross-border relations and free licences. In its opinions on digital contract rights (INT/775) and on the sharing economy and self-regulation (INT/779), the EESC recognises the importance of copyright for correctly determining the rights of stakeholders in terms of digital contracts and the sharing economy.

5.2

The EESC notes with interest that the Commission clearly states that EU copyright rules need to be adapted, so that all market players and citizens can seize the opportunities of this new environment, and that a more European legal framework is needed to overcome fragmentation and frictions within a functioning single market. The Committee endorses this aim, but notes that governments are defending the territoriality of copyright by saying that it is the only way to ensure that creative ventures are funded. Other ways exist and should be explored; the door should not be shut before the alternatives have at least been objectively assessed.

5.3

The Committee does not believe that inaction and rejection of change on copyright represent an adequate response to rapid technological change and innovations in services and distribution which are inevitably emerging and developing as the internet, networks and broadband develop. It shares the Commission’s view that it will be necessary to, ‘where required, adapt copyright rules to new technological realities so that the rules continue to meet their objectives’.

5.4

A large degree of variation is evident, and might become even more evident in future, with regard to exceptions that are closely related to education, research and access to knowledge. This can range from simple use as an example or illustration up to — in practice, if not in law — the unlimited provision of works, books or courses for educational purposes.

5.5

Directive 2001/29/EC of the European Parliament and of the Council (5) on copyright sets out a list of exceptions. Putting the items on this list into practice, and modifying them, should be discussed using the procedures of participatory democracy so as to make individual and collective opinion more receptive and to reach a consistent and unified European law relating to exceptions. The exceptions must be properly specified and defined so that they can be applied more easily. The EESC shares the Commission’s view that exceptions for teaching, scientific research and the exchange of knowledge should be the priority; at the same time, looking ahead, other public goods should be studied.

5.6

The EESC is of the view that a united European position on private copying is possible and desirable. It will support action by the Commission in this regard, which should be taken as quickly as possible because national differences are a significant obstacle to the single market of electronic goods, while new media continue to emerge. Consistency is crucial for the free movement of goods incorporating such media. The distribution of revenue from levies on media should take into account that most of these media are not intended for copying copyright-protected works. Logically, therefore, a large proportion of this revenue should be directed towards funding artistic creation and the promotion of cultural diversity — as is already the case in some countries — and towards public goods such as education and research.

5.7

The Committee is convinced that the internet must retain its inherent principle of neutrality, in order to ensure that consumers remain totally equal, regardless of their economic power. Net neutrality is a founding principle of the internet. It ensures that telecoms operators do not treat their users’ communications differently but remain simply conduits for information. This principle allows all users, regardless of their financial resources, to have access to the same network in its entirety. This definition, and a statement underlining the protection of this neutrality, should be clearly expressed in the EU legislation.

5.8

When fighting against copyright violations, infringements on a commercial scale, depriving creators of a large proportion of their revenue, should be stopped and penalised. The Committee has already issued several opinions on the problems in the fight against counterfeit goods and all forms of violation of copyright and related rights, and thus refers to these opinions, which it still considers to be wholly valid (6).

5.9

Copyright remains a fundamentally important way to protect authors and those involved in disseminating works and performances via interconnected digital networks. Copyright must evolve to adapt to very rapid technological changes and innovations in distribution and services. This modernisation should happen in such a way as to safeguard the rights of creators and performers, to ensure they are fairly remunerated for their creative endeavours, to guarantee that they can reap the benefit of the commercial success of their works, and to keep protection and funding of works robust. In particular, the legal status of online platform services in terms of copyright must be reviewed. Although they are today the primary portal through which users access online content, platform services claim to be mere technical intermediaries and thus refuse to remunerate content creators. This undermines the efficiency of the market, distorts competition and drives down the overall value of online cultural content.

5.10

Refusing to adapt to the global nature of the internet, broadband and new consumer expectations runs the risk of devaluing a right that is beneficial to the progress of intellectual works and their dissemination. However, exceptions justified by other interested parties’ rights whose social needs are changing — such as disabled persons, students and public libraries — will have to be accepted. The Member States, which have the largest degree of legal influence on the changes to come, will have to implement other developments to continuously ‘Europeanise’ copyright and related rights.

5.11

The EESC considers a regulation to be the best instrument for establishing the digital single market, as the variety of national laws clearly leads to an almost complete stalemate which must be overcome by means of an inclusive dialogue between all stakeholders, including representatives of licences for free software and content and the new services and business models that they engender. Obstacles to multi-territorial licences must also be better analysed, and ways to overcome them improved.

5.12

Various interests and preconceived notions on the subject of copyright are so strong that only gradual progress, based on a rigorous assessment and proportional responses, may be possible. However, everything must be done to fully bring about the knowledge and information society which is the only way to extricate Europe from a crisis that is shaking the European ideal to its very foundations. In a dynamic social market economy, the general interest should prevail over a few special interests.

20.7.2016   

EN

Official Journal of the European Union

C 264/57

Rapporteur:

Mr Jorge PEGADO LIZ

1.1

The EESC agrees that a number of the matters raised in the Communication from the Commission (COM(2015) 633 final) now need to be regulated; these are set out in the proposal for a directive on certain aspects concerning contracts for the supply of digital content.

1.2

The EESC does, however, consider that other factors, which it identifies in this opinion, are far more important than contractual rights in contracts for the online sale of tangible goods. They have a greater impact and should be a higher priority with regard to the Commission’s objectives of creating a single digital market, and represent a greater obstacle to the development of cross-border trade.

1.3

Moreover, with regard to the aspects addressed, the EESC disagrees with the legal basis cited by the Commission, and proposes Article 169 TFEU instead.

1.4

It therefore follows that, in principle, the measures adopted should be based on minimum harmonisation, in line with paragraph 2(a) and paragraph 4 of that Article, which has been generally accepted by the European legislator.

1.5

The EESC only considers it appropriate to regulate these matters by means of two directives rather than a single instrument because of the urgency and timeliness of regulating the online sales of digital content.

1.6

It also believes that insufficient reasons are given for taking the option of targeted full harmonisation instead of others, such as model contracts certified by an EU mark or minimum harmonisation in line with Article 169 TFEU.

1.7

Regarding those aspects that are now to be regulated separately under the proposal on contracts for the online sale of tangible goods, it would be more appropriate to regulate them together during the review of Directive 1999/44/EC as part of the REFIT exercise on consumer law since they represent one of its chapters.

1.8

Furthermore, the Commission’s proposal concerning the online sale of tangible goods establishes two systems, creating an unacceptable difference in the treatment of online and offline sales of goods.

1.9

In the event that the Commission’s plans should be confirmed in their current form, the EESC sets out a series of improvements to the provisions of the proposals with a view to safeguarding consumers’ rights against any erosion, ensuring in practice a high level of protection, as required by the TFEU.

1.10

This applies in particular to the rules on sales of digital content, which the EESC considers to be the priority and for which, for pragmatic reasons, it accepts the Commission’s suggestion of targeted full harmonisation.

1.11

Nevertheless, this is where gaps in provision and regulatory shortcomings are to be found. They are incompatible with maximum harmonisation, creating insoluble problems for transposition and implementation in the Member States, for which solutions are sought through a raft of proposals on specific aspects.

2.1

With this Communication, the Commission is taking the first step towards implementing the Digital Single Market strategy for Europe (1) and is carrying out one of the most important measures in its 2015 Work Programme (2) by proposing these two legal instruments, with the objective of ensuring ‘better access for consumers and businesses to online goods and services across Europe’:

2.2

Being aware that the key aspects of these two proposals are, from a systematic point of view, closely linked to the consumer goods sales directive (3), the Commission made it clear that they are ‘as coherent as possible’. However, it explained that its decision to ‘adopt two legislative instruments’ was due to the fact that ‘the specificity of digital content requires several rules to be regulated differently than the ones for goods’ and that ‘the fast technological and commercial development of digital content will require a review of the application of this Directive’, and in order to justify its ‘incorporation in a single legal instrument, namely the Directive on the supply of digital content’.

2.3

With these two proposals, the Commission is looking to achieve five objectives:

2.4

The Commission believes that the most appropriate method in both cases is ‘targeted’ harmonisation. It will be full harmonisation for contract rules covering the supply of digital content and the online sales of goods, and for key mandatory rights and obligations of the parties to a contract for the supply of digital content and the online sales of goods. This represents almost all of the Directive’s provisions, with the exception of the ‘rules on formation, validity or effect of contracts, including the consequences of the termination of a contract’ and (Article 1(4) of the Proposal for a Directive on Distance Selling) certain aspects of its enforcement.

2.5

With regard to the scope of application, the Commission expressly limited this to contract law terms in a business to consumer interaction, because as mentioned in the Impact Assessment (IA, p. 23) there is no evidence to suggest that the differences in contract law hinder EU businesses from buying online from other Member States. In this connection, the Commission recognises that SMEs, as weaker parties with less bargaining power, also face contract law related difficulties especially when using digital content. However, taking into account in particular the positions expressed by stakeholders and Member States, the Commission has decided to look into this issue in the context of other initiatives announced in the Digital Single Market strategy.

2.6

With regard to the selected legal instrument, the Commission justifies its use of a directive instead of a regulation as in its view directives are more appropriate in that they leave Member States free to decide how to transpose them into national law. According to the Commission, this option, combined with targeted full harmonisation of mandatory consumer rights, will provide an appropriate balance between a high level of consumer protection at EU level and significantly increased opportunities for businesses.

2.7

The economic rationale which the Commission gives for the directives in hand is based on certain assumptions, of which the following stand out:

2.8

However, in order to secure these supposed outcomes, the two directives proposed here are not enough; they are part of a larger package of measures, of which the Commission is specifically highlighting:

2.9

Finally, the Commission explains the need to ‘act now’ before it is too late, since any delay regarding digital content entails a risk of national laws emerging, leading to fragmentation of the EU market and causing obstacles to both consumers and suppliers participating in cross-border transactions.

3.1

The economic and psychological rationale demonstrating the link between the proposed legislative measures and the increase in e-commerce and its repercussions on European growth are supposedly set out in the study appended to the IA. However, a detailed analysis thereof does not demonstrate with any certainty that the data on which it is based and the conclusions it draws are absolutely reliable, or that other factors might not affect them or other options not produce better results.

3.1.1

Even if some of the basic statistical data is correct — namely that 62 % (page 10) of European traders, equating to more than 122 000 businesses, and more than 13,5 % (page 13) of consumers, representing 8 to 13 million additional consumers, raising the total number to 70 million, would start buying online across borders if the alleged obstacles and additional costs resulting directly from the current legal system in force were to be removed — this does not allow us to determine with certainty an increase in the volume of trade warranting an associated estimated 0,03 % increase in European GDP, equivalent to around EUR 4 billion, as its necessary and exclusive consequence. In contrast, it is certain that every business will have to bear costs of EUR 7 000 on average to adjust their contracts to the new arrangements.

3.1.2

Furthermore, the same study does not properly quantify the fact that other additional factors — such as the language question or tax arrangements, quality, cost and availability of high speed internet services, the risk of fraud, legal costs, secure methods of payment, certification of identity and the good repute of sellers, lack of trust in judicial and extrajudicial conflict settlement procedures — will not continue to have a decisive influence on decisions to carry out cross-border online transactions, perhaps more than the current legal system (described in pages 7 and onwards, and 18 and onwards of the impact assessment).

3.1.2.1

Delays in transposition and difficulties in the application and the inefficiency of certain ADR systems set up under Directive 2013/11/EU (5) are particularly relevant in this respect, and are consequently mentioned in all the studies that the Commission has requested. This is often related to the lack of financial means in some Member States and, even more, to the apparent ineffectiveness of the ODR system set up under Regulation (EU) No 524/2013 (6), which came into force on 15 February 2016, and which has proven crucial to the functioning of a Digital Single Market.

3.1.3

Moreover, the relative importance of the elasticity of supply and demand cannot be detected clearly in the calculation of market saturation in terms of perfect competition which, in any case, being purely theoretical, is essential for the credibility of the model, not to mention factors external to macroeconomic policy which are key in determining consumers’ purchasing decisions, such as the consequences of austerity policies, by comparison with growth policies based on consumption and Keynesian-type investment.

3.1.4

Lastly, the Commission’s assessment puts the emphasis on the proposed model, and has not taken due account of the economic consequences of the other four models which could have been chosen (page 23 and onwards of the impact assessment), which would likewise help remove these same obstacles, in such a way as to enable comparative analysis. This applies in particular to option 5 — an optional European model contract combining an EU trust mark (page 25), despite being a simple and cheap option entailing little red tape (pages 38 and onwards); in other words, it would best correspond to the principles of the ‘Better Regulation’ package (7) and REFIT (8). This option received support during preparatory consultations.

3.2

The grounds for opting for maximum harmonisation directives have likewise not been adequately explained. The EESC has generally stated that, when it comes to harmonising matters essentially related to the functioning of the single market, it prefers the use of regulations, which can be as detailed as necessary. However, it has also indicated that, in areas that have a particular impact on consumers’ rights, its preference is for minimum harmonisation directives such as that flowing from the principle set out in TFEU Article 169(4).

3.2.1

On the contrary, the EESC has repeatedly spoken out against the Commission’s over-riding tendency in recent years to adopt maximum harmonisation directives offering a low level of protection, barely responding to professionals’ interests (9).

3.2.2

In the present case, there is a whole series of questions which the directives do not address but which it is essential to harmonise, such as the age at which minors can conclude digital contracts (which, in the latest version of the Data Protection Directive is set between 13 and 16), the definition of categories of specific unfair terms for online contracts for which there is no provision in Directive 93/13/EEC (10), the recent practice of ‘pay now’ buttons on the pages of certain social networks that do not connect to the website of a responsible platform and the inclusion, to be recommended, of a standard clause on co-regulation.

3.3

Suitable grounds have not been given either for the option of using two directives instead of just one, in that it unnecessarily duplicates legal provisions, meaning more effort has to go into transposing the directives so that they are consistent with each Member States’ domestic provisions and obliging them to go further in interpretation of the directives. This would be completely understandable if the text of the directive on online sales of tangible goods was taken as a basis and the specific features of the sale of intangible goods were included in the exceptions to the basic arrangements, given that it is certain that the distinction between tangible goods and digital content is imperceptible, particularly when they are interlinked.

3.4

According to the Commission, the instrument selected was based on: 189 responses from all categories of stakeholders from across the EU; consultation of a group composed of 22 organisations representing a wide range of interests that met seven times; seminars with Member States; and meetings with national enforcement authorities at the Consumer Protection Cooperation committee meeting and with the national authorities responsible for consumer policy at the Consumer Policy Network meeting (May 2015), which subsequently challenged the validity of the sample on account of its small size (11).

3.4.1

However, according to the known and published results (12) there is not a clear majority in favour of the option chosen: consumer organisations are clearly opposed to any form of the application of the seller’s law, although the majority of business organisations and some academics support this option. For their part, the majority of Member States have cast doubt on the need for new legislation on distance purchases (which already includes online sales) and, in particular, on the appropriateness of the two directives, as it is difficult to extract precise and clearly defined guidelines. From an objective analysis of the responses to the consultations, at first glance it would appear that option 5 attracts a general consensus on the part of both professionals and consumers, depending of course on the content of the model contract rules to be agreed upon by the industry and on the degree of usage and acceptance of the trust mark by EU businesses, mainly because it is the one that entails the fewest costs for professionals.

3.5

Lastly, it is important to note that the EESC has had the opportunity to issue its views extensively on the subject of consumers’ rights in digital matters in various opinions, and has defined a fundamental approach, according to which the same rights recognised in the ‘physical’ offline world (face-to-face contracts) should be consistent with the online environment, without prejudice to particular specific features or suitable forms of digital (intangible) content transactions, but always in the direction of strengthening, rather than diminishing or undermining such rights. The Commission’s proposal concerning the online sale of tangible goods establishes two systems, creating an unacceptable difference in the treatment of online and offline sales of goods.

4.1

Notwithstanding the previous comments, the EESC fully agrees with the need for and timeliness of the steps to regulate some of the matters dealt with in the proposed directives in hand, especially with regard to the online sale of digital content. With regard to the online sale of tangible goods, the EESC recommends duly adopting these measures as part of the REFIT process. In the observations set out in this opinion regarding the text of the proposals, due to an obvious lack of space, reference is made only to points where there is disagreement.

4.2

4.2.1

As regards the legal basis, in keeping with previous EESC opinions, consumer representatives — like most EESC members — consider that TFEU Article 169(2) would be a more appropriate basis, insofar as it is basically the definition and protection of consumers’ rights that is at stake here, and not just completion of the single market. Certain EESC members, namely business representatives focused on completing the single market, agree with the Commission.

4.2.2

The directive option having been chosen, the EESC considers that it should be based on minimum harmonisation, along the lines of the current sales and guarantees directive (1999/44/CE), in that the option chosen here leads to greater ‘fragmentation’, less legal certainty and two classes of protection, it being certain that the ‘improvements’ introduced here would also have to apply to sales in the ‘physical world’.

4.2.3

Owing to the complexity of consumer legislation, the proposal interacts with a series of other legislative instruments which it complements (13) — but requires an unnecessary and difficult task of interpretation, contrary to the sensible rules in the ‘Better regulation’ package, and creates added transposition difficulties in ensuring compatibility with existing national standards which have transposed or supplemented those Community standards, which vary from one Member State to another.

4.2.4

For this reason, the EESC would prefer for the rules contained in this proposed directive to be taken on board in the review of Directive 1999/44/EC as part of the REFIT Programme.

4.2.5

The following proposals are made for concrete amendments to a number of the provisions:

1.

The concept of commercial guarantee should also cover other forms of compensation, otherwise they will not be deemed to be covered by the rules in Article 15.

2.

The concept of a tangible movable good has not been positively defined, which gives rise to different interpretations by Member States.

3.

Also not excluded are other types of products with their own legislation, such as pharmaceuticals and medical appliances, which are excluded from the application of other consumer protection rules.

4.

It is not established if online platforms might be considered as ‘sellers’.

5.

Neither is there a definition of the concept of producer for the purpose of their being directly liable to consumers under the terms of Article 16.

1.

The durability criterion should be incorporated (14), influencing the period of validity of the guarantee.

2.

Definition of the conformity requirements should be worded in the negative, so as to expressly exempt consumers from having to prove that the good does not conform to requirements: the onus here should be on the seller.

3.

The wording of exceptions to the article establishes a generic exclusion of seller liability which cannot be enforceable against consumers without prejudice to the right of recourse (applicable to the case of VW).

1.

Add at the end of paragraph 2: ‘except in situations where the particular complexity of the installation requires more time, agreed with the seller’.

2.

The rights attributed in the proposal to sellers should be passed on to any bona fide possessor.

1.

The provision excludes as an initial option the possibility of the good being returned immediately and payment reimbursed, which would go against consumer rights in various Member States, with significant variations (Greece, Portugal, Ireland, United Kingdom, Denmark and Lithuania).

2.

The notion of ‘reasonable time’ is a subjective one, and provides leeway for differing transpositions on this key subject, which is incompatible with maximum harmonisation. For example, in countries such as Bulgaria, France, Portugal and Luxembourg, the time period is 30 days; in Hungary, Romania, Greece and Estonia it is 15 days. The provision should establish a period corresponding to the maximum applying in some EU countries - 15 days.

3.

The term ‘impossible’ in paragraph 3(a) should be replaced with ‘technologically impossible’.

4.

Likewise, the notion of ‘significant inconvenience’ is also subjective and should be removed or replaced with the wording found in Austrian law: ‘the least inconvenience possible’ and accompanied by the possibility of a similar temporary replacement being made immediately available to the consumer until the repair is completed.

5.

The Commission proposal has not taken into consideration the existing requirement in various national legislations (France, Malta, Greece, Romania, Portugal and Slovenia) obliging manufacturers to maintain an adequate stock or ensure the timely delivery to sellers of spare parts for the expected lifetime of the product, a matter linked to built-in obsolescence and the guarantee period for the replaced part.

6.

The Commission should establish the obligation of the seller to provide a temporary replacement.

1.

The Commission has not provided for suspension of the legal guarantee during the repair or replacement period, which happens in most Member States’ national legislation. The same goes for periods of mediation, arbitration and legal recourse.

2.

Where there is a replacement, the replaced good should benefit from a new and identical guarantee period as of the moment it is delivered.

1.

The term ‘significant’ should be removed, for the reasons set out above.

2.

In the event of ‘recurrent’ defects, consumers should automatically have the possibility of terminating the contract.

1.

The obligation on the consumer to pay for the use, deterioration or loss of a good in the event of the contract being terminated is highly questionable.

2.

Moreover, the Court of Justice has already indicated that in the event of the right to replacement being exercised, consumers may not be required to pay compensation for using the defective product (Quelle case (15)).

3.

It is not clear what amount is to be reimbursed when the purchase has been made for an overall price for various goods without distinction.

1.

Add a new indent (d) in paragraph 1: other guarantees offered by the seller on behalf of third parties which aim at providing a guarantee (equipment insurance, brand guarantees, etc.).

2.

Information should also be included on the possibility of passing on commercial guarantees to third parties.

1.

The lack of harmonisation on this aspect constitutes an important source of diverging application of the directive, with harmful consequences for trade.

2.

The rule should be to provide for direct joint and several liability on the part of the manufacturer with regard to the consumer in cases where the latter opts for repair or replacement of the good.

3.

Provision should also be made with respect to sellers seeking redress against producers, entitling the seller to the full amount of the costs incurred.

4.

As in the previous points, provision should be made for joint and several liability on the part of online platforms where consumers have acquired goods.

4.3

4.3.1

As the Commission itself states, the reasons for the proposal, the collection of expertise and the impact assessments concern both proposals since the two are envisaged as a package with common objectives. For this reason issues of a general character common to both proposals will not be repeated, and the EESC will limit itself to comments relating to specific aspects. It is nevertheless important to point out here that, in general, this proposal warrants the EESC’s agreement in principle, particularly as regards:

4.3.2

Set out below are some concrete amendments to a number of the provisions in the proposal, which comprises 24 articles (and not 20, as incorrectly indicated in several language versions):

1.

The EESC can accept that payments be made in kind (against ‘counter-performance other than money’) as long as this is defined in a precise manner in terms of content; where personal or other data is provided it will be necessary to specify which data and under what conditions and in what circumstances.

2.

It will also be necessary to clarify if certain services such as pay TV are included, as well as Google and Facebook Messenger, and whether certain physical access platforms or the internet of things come under tangible or intangible goods.

3.

It is not clear whether the exclusion referred to in paragraph 5(a) also covers healthcare, gambling and financial services. This requires greater clarification, as otherwise it will create legal uncertainty.

4.

It is not clear whether this scope also covers ‘hidden payments’, that is to say services provided for free but which can, while being carried out, include other services which themselves have to be paid for.

5.

The scope of the data in Article 3(4) needing to be processed should cover not only the performance but also the ‘conclusion’ of the contract, and the processing of this data should be permitted under the conditions laid down by the law on personal data.

6.

It is also essential to clarify the difference between products and services provided online, and those which are entirely tied in with tangible goods, as is the case with wearables and the internet of things, where most of the procedures are at digital level, without prejudice to the existence of a tangible good at the heart of the procedure.

7.

It should be made clear that the data centre services, especially cloud computing, ought to be clearly identified in this proposal, irrespective of these being free or subject to charge, given that these services are often associated with other services or products supplied to consumers, and there is thus a risk that they might be excluded from the scope of the directive.

8.

It will also be necessary to clarify if the combination of digital content services with communication services such as Facebook Messenger or Google Hangout are included since these are not currently regulated by Directive 2002/21/EC on electronic communications services, and it has been understood that some of these services should in fact be deemed to be electronic communications services, with increased consumer protection.

9.

Likewise, the distinction between situations in which the data obtained are only for the performance of the contract or for meeting legal requirements is unclear. The EESC therefore suggests, as a precautionary measure, that the directive should apply to all services supplied by providing personal data, with the sole exception of those services where the supplier explicitly demonstrates that the data are only for the performance of the contract or meeting legal requirements.

10.

Again, in point 4, it will be necessary to clarify when the collection of personal data is for performance of a contract or meeting legal requirements, given that in other sectors such as telecommunications and energy, personal data, although authorised for the performance of contracts, are often used for marketing campaigns carried out by the companies themselves and, in particular, whether this applies to other types of counter-performance apart from money.

1.

Paragraph 1(b): delete ‘where relevant’.

2.

Paragraph 1(b): add ‘or could legitimately expect’ after ‘for which the consumer requires it’.

3.

Paragraph 2(b): delete ‘where relevant’.

1.

Paragraph 2(b): replace ‘the supplier shall take all measures which could be expected in order to refrain from …’ with ‘the supplier shall refrain from’.

2.

Indents (c) (d) and (e) come under copyright rules which are not yet available.