Opinion of the European Economic and Social Committee on ‘The costs of non-immigration and non-integration’

(own-initiative opinion)

(2019/C 110/01)

Rapporteur:	Pavel TRANTINA
Co-rapporteur:	José Antonio MORENO DÍAZ

Plenary Assembly decision	15.2.2018
Legal basis	Rule 29(2) of the Rules of Procedure
	Own-initiative opinion
Section responsible	Section for Employment, Social Affairs and Citizenship
Adopted in section	7.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	149/09/13

1.   Executive summary of conclusions and recommendations

1.1

The EESC considers that immigration has a positive influence on population and labour force growth. If natural population growth becomes negative, immigration can help keep the total population and labour force constant. Admittedly, immigration is not the ultimate solution for tackling the consequences of demographic ageing in Europe. Nevertheless, it could also be a remedy to shortages of labour and skills that are unrelated to demographic processes.

1.2

A non-immigration scenario in Europe would mean that: — Member States’ economies would suffer substantially; job markets would come under possibly irreconcilable strain, whole industries would go bust, agricultural production would drop, construction would not be able to keep up with demand. — Demographic challenges would be aggravated; pension systems might become unsustainable, the health and care sector could collapse, depopulation of certain areas would proceed at a swift pace; in effect social cohesion would be undermined. — A complete ban on legal migration would inherently lead to a spike in attempted irregular migration; this in turn would lead to oversecuritisation, overrepression and overpolicing, incurring enormous costs; it would encourage black job markets, exploitation and modern slavery, and desperate attempts at family reunification. — Racism and xenophobia would flourish even more than at present; pre-settled people with a migration background, including second or third generations, would become targets of popular distrust and outrage.

1.3

In contrast, the following potential of migration can be identified in host countries: job vacancies and skills gaps can be filled, economic growth can be sustained and services to an ageing population can be maintained when there are insufficient young people locally. The pension gap can be closed by the contributions of new young migrant workers. Immigrants bring energy and innovation. Host countries are enriched by cultural and ethnic diversity. Depopulating areas can be revived, including schools that can be transformed. Countries of origin benefit from remittances (payments sent home by migrants), which outstrip foreign aid. Returning migrants bring savings, skills and international contacts.

1.4

Realising the full potential of migration requires an approach which, among other things, makes better use of the skills of the migrant population. The EESC is convinced that this must be supported by adequate skills validation policies and mechanisms and calls on the EU and Member States to support their speedy development. In addition, proper implementation of skills partnerships with non-EU countries would be mutually beneficial for both the EU and migrants’ countries of origin.

1.5

The EU should adopt policies and measures that endorse safe, orderly and regular migration and also strengthen inclusion and social cohesion.

1.6

Non-integration bears economic, sociocultural and political risks and costs. Hence, investment in migrant integration is the best insurance policy against potential future costs, problems and tensions. Public policies should tackle the fears, concerns and worries of diverse sections of the population in EU societies in order to avoid anti-EU and xenophobic discourses. To do so, the relevant policies should include a clear, consistent and reasoned set of obligations on the migrants themselves, but equally a consistent denunciation of anti-migrant rhetoric and behaviours.

1.7

The EESC underlines the fact that promoting integration is key to reinforcing EU fundamental values and principles, of which diversity, equality and non-discrimination are crucial ones. Integration pertains to all society, including migrants settling in a host country, regardless of their status or origin. Nevertheless, special policies are required for people with particular vulnerabilities (such as refugees) and a community-based and tailor-made targeted support, rather than a one-size-fits-all approach, may yield best results. It is imperative, therefore, that EU Member States learn from one another and honestly strive to foster an environment in which migrant integration is achievable and the risks are avoided.

2.   Background and objectives of the opinion

2.1

The largest migration flows in Europe since the Second World War have raised the concerns of citizens about further uncontrolled migratory flows and highlighted the importance of a joint approach in the fight against irregular migration and of securing the EU’s ability to act. EU Member States have been facing challenges regarding the management, financing and communication of migration, as well as citizens’ fears relating to this. While the situation has been abused by some politicians, the EESC is convinced that there is an urgent need to change the narrative on migration and return to a rational debate on the basis of facts. Refugees and migrants should be seen not as a threat but as an opportunity for Europe’s economic and social model.

2.2

Current policies putting migration control at the top of the foreign affairs agenda undermine the EU’s position in foreign relations, making it prone to blackmail and loss of credibility on human rights matters. The EESC is convinced that the EU and the Member States must go beyond the current model and ensure that regular ways of entry are promoted that facilitate orderly migration and successful inclusion. Safe and legal routes may alleviate the pressure on the EU asylum system.

2.3

At the same time, as long as EU markets fuel demand for labour, there will be migration: regular or otherwise. In certain professions, at least, the demand will grow (care sector, domestic work, social services, construction, etc.) (1).

2.4

At the 2017 Civil Society Days in June, Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy, delivered a keynote speech on ‘Global Europe and its role in peace and stability’ (2). In it, she said that Europe needed migration for economic and cultural reasons. She suggested that the EESC draft a study or a report on the costs of non-migration, since her impression was that sectors of European economies would collapse if all migrants were to disappear from one day to the next. The report would convey the views of economic and social actors on what Europe would look like without migrants. This own-initiative opinion is a follow-up to her idea.

2.5

Migration has many faces — it can be regular, irregular or, as has been the case in the past three years, humanitarian, following the war in Syria and other parts of the world. Migration flows are also mixed and labour migration might be seasonal, manual or high-skilled. This document focuses mainly on safe, orderly, EU-supported labour migration (and related family reunification); however, it also takes note of other forms of immigration to the EU and the potential contribution of migrants coming for a (temporary) humanitarian migration (asylum seekers) and irregular migration.

3.   General comments

3.1   Demographics — an ageing population and its declining numbers in the EU

3.1.1

In the early 21st century, Europe is confronted with an ageing population, stagnating or even declining native populations, high unemployment and — in some of its key members — also with slow economic growth. At the same time, Europe remains one of the prime destinations for migration (3).

3.1.2

Changes in labour force size present one of the main challenges for the European Union. While labour supply (labour force size) does not develop independently of labour demand, its future trajectories can be estimated by combining various scenarios of labour force participation with population projections, as identified by the authors of the European Demographic Data Sheet 2018 (4). The current labour force in the European Union comprises about 245 million workers. In order to estimate a future labour supply up to 2060, the authors defined three scenarios for labour force participation, which range between 214, 227 or 245 million workers.

3.1.3

Other predictions, such as that presented by the European Commission fact sheet for the Gothenburg Social Summit in 2017, argue that in 2060, for every elderly person there will be two people of working age. Today, there are four. This poses critical risks for maintaining the European Social Model as we know it today.

3.1.4

On the other hand, immigration has a positive influence on population and labour force growth. If natural population growth becomes negative, immigration can help keep the total population and labour force constant. Immigration could also be a remedy to shortages of labour and skills that are unrelated to demographic processes. However, as the Hamburg Institute of International Economics (HWWI) argues in its report The Costs and Benefits of European Immigration (5), immigration is not the ultimate solution for tackling the consequences of demographic ageing in Europe (as migrants also age).

3.2   The potential of labour migration from third countries

The following impacts can be identified (6):

3.2.1

On host countries: — Job vacancies and skills gaps can be filled. — Economic growth can be sustained. — Services to an ageing population can be maintained when there are insufficient young people locally. — The pension gap can be filled by the contributions of new young migrant workers, who also pay taxes. — Immigrants bring energy and innovation. — Host countries are enriched by cultural and ethnic diversity. — Depopulating areas can be revived, including schools with falling numbers.

3.2.2

On countries of origin: — Developing countries benefit from remittances (payments sent home by migrants), which now often outstrip foreign aid (7), but also from cultural exchange. — Unemployment is reduced and young migrants enhance their life prospects. — Returning migrants bring savings, skills and international contacts.

4.   Costs of non-immigration

4.1   Sustaining economic growth and meeting labour market needs

4.1.1

Immigration from outside the EU has both a direct and indirect impact on economic growth: there appears to be a clear correlation between growth of the labour force through immigration and aggregate GDP growth. For instance, in recent years, Sweden has granted thousands of work permits to information technology developers, berry pickers, and cooks. Labour immigration contributes with significant values to the Swedish economy: companies recruiting labour immigrants grow faster than comparable companies. Annually, non-EU/EEA labour immigrants contribute over EUR 1 000 million to Swedish GDP and over EUR 400 million in tax revenues (8).

4.1.2

The migrant population generated a 70 % increase in the labour force of Europe between 2004 and 2014 (9). It is difficult to specify the impact a labour shortage of this magnitude would have in the European economy and individual Member States. Furthermore, the foreign-born population usually integrates into market niches (segmentalisation) that are either growing rapidly or in decline, providing more flexibility to respond to EU labour market demands.

4.1.3

Similarly, the migrant population participates in the employment situation of each country by contributing to consumption and the creation of new jobs. Migrant entrepreneurs contribute to economic growth and employment, often by rejuvenating neglected crafts and trades, and increasingly participate in the provision of value-added goods and services (10). The EESC therefore recommends that if the ‘creativity and innovation capacity’ of migrant entrepreneurs is to be reinforced, specific measures must be taken at EU, Member State and local level. This is to eradicate discrimination and create equal conditions for all so that they can contribute to inclusive growth and quality jobs (11).

4.1.4

The EESC also believes that, in view of their specific tendency to gravitate towards the care sector and activities connected with the sharing economy and the circular economy, social economy enterprises can encourage and support not just the creation of new jobs, but also entrepreneurship and access to economic activities for migrants outside the EU (12).

4.1.5

Measuring the fiscal impact of immigration is a complex issue. However, the OECD claims (13) that, in sum, migrants have had a neutral fiscal impact over the last fifty years — i.e. any costs they may have generated have been covered by the profits produced through the taxes and levies collected.

4.1.6

An Oxford Economics research study (14) concluded that migrant workers had helped maintain an adequate labour supply to fuel the 2004-2008 economic boom. The availability of migrant labour seems to have made the difference between some businesses surviving or not needing to relocate production abroad (the authors quote a survey of 600 businesses in which 31 % said that migrants were important in the survival of their organisation, a figure that rose to 50 % in health and social care and agriculture).

4.1.7

It is clear that immigration can be economically beneficial for both countries of origin and host countries. However, with present economic and trading structures it is the rich and powerful countries that benefit most. Migration also has the potential to bring peoples together culturally and to promote understanding, but friction occurs if efforts are not made to dispel the misunderstandings, prejudices or myths held by local people, but also by migrant communities.

4.2   Bridging the skills gap

4.2.1

In general, the European economy loses more than 5 % of productivity each year due to a mismatch between workers’ skills and the needs of the labour market, according to a study by the Institute for Market Economics (IME) (15) commissioned by the EESC and published on 24 July 2018. The study says this amounts to a loss of 80 euro cent for each hour worked. The professions worst hit are IT and communications, medical doctors and, more generally, the domains of science, technology and engineering. The phenomenon also affects teachers, nurses and midwives. The trend is getting worse due to the demographic decline and developments in technology, say the authors. This skills gap could be addressed, in part, by labour migration.

4.2.2

However, realising the full potential of migration in this area requires an approach which, among other things, makes better use of the skills and qualifications of the migrant population. Immigrants are usually overqualified for the positions they are offered (16).

4.2.3

The skills gap can be partially bridged only if the immigrants get their skills and qualifications validated. EU validation mechanisms are, however, still in development and depend on the Member States. The EU Skills Profile tool is not sufficiently used by Member States and actors on the ground. Nevertheless, there are nongovernmental initiatives, such as Bertelsmann Stiftung’s Competence Cards or on-line vocational self-assessment (17).

4.2.4

Proper implementation of skills partnerships with non-EU countries would be mutually beneficial for both the EU and migrants’ countries of origin.

4.3   Sustaining the care sector

4.3.1

Labour market shortages in the healthcare sector are a ‘ticking bomb’. There is an ongoing crisis (18), and labour shortages will increase unless appropriate policy responses are pursued. As early as 1994, care was defined as a strategic sector by the European Commission. In 2010, it warned that a supply shortage of two million healthcare workers would emerge by 2020 if urgent action was not taken to redress supply shortfalls of up to one million workers in long-term care (LTC) (19).

4.3.2

Workforce shortages are prevalent in care occupations in many Member States. Recruitment of both regular and undocumented care workers alleviates shortages in the care sector. Southern European care systems, in particular, rely heavily on live-in care workers. In Italy, for instance, migrant live-in care workers represent about three-quarters of the home care workforce (20).

4.3.3

Central and Eastern European (CEE) countries are also affected by the labour shortages in the care sector as well as by rising demand for care in Western Europe. For instance, Poland supplies many care workers to other countries, despite a depleted care workforce. These shortages are met with the arrival in Poland of workers from the Ukraine and other countries outside the EU (21).

4.3.4

It is also important to notice the significant economic contribution of women migrants, to families and communities through paid work, and the need to address inequalities between women and men in labour markets (22). Research shows that the majority of migrant women workers are employed in service sector occupations (e.g. catering, domestic and healthcare occupations). Irregular work, underemployment and temporary-contract employment could generate the disadvantage faced by migrant women in EU labour markets, and measures to guarantee equal treatment and to provide protection of vulnerable people should be further developed.

4.4   Addressing depopulation of rural and remote areas

4.4.1

Rural, mountain and island areas are becoming depopulated, which creates a downward economic and social spiral that gains momentum as more people migrate into towns. The loss of population reduces the amount of money circulating within a community, which then affects the viability of local businesses, shops and transport links, as well as the availability of essential facilities and services.

4.4.2

In some areas of the EU, for instance in Ireland or Brandenburg, depopulation is being overcome by settling migrants. In the case of agriculture, for example, the contribution of migrant labour in Northern Ireland has been key to the survival of a sector with serious problems in terms of labour supply and an ageing workforce. The migrant population is prepared to accept jobs with salaries and conditions that have been rejected by the local population, and to live in villages at high risk of depopulation, despite the fact that it may be a highly unregulated sector with a risk of labour exploitation (23).

4.4.3

Opportunities are available under the European Union’s rural development policy to assist local rural communities with the arrival of migrants. A number of rural development organisations have pointed out the potential assistance that rural areas can offer migrants, whose arrival could play a role in revitalising areas suffering from underpopulation and/or economic decline. The European Parliament has emphasised the importance of providing support for migrants’ social inclusion and integration into the labour market in its 2017 study (24).

4.5   Addressing cultural diversity

4.5.1

The lack of a migrant population would be to the detriment of diversity in EU countries, leading to a xenophobic and self-satisfied discourse, which is at odds with the EU’s guiding principles. Furthermore, we would lose a contribution to the expansion of values, such as equal treatment and non-discrimination, where the visibility of the population with a migrant background has helped to achieve progress in recent years.

4.6

For all of the above, non-immigration to the EU must be discarded as an unrealistic, unimplementable and immensely harmful scenario.

5.   Costs of non-integration (and how to avoid them)

5.1

In order to realise the full potential of migration to Europe, as indicated above, and at the same time minimise the related and long-lasting risks and avoidable socio-economic costs, it is paramount that conditions are in place for migrants’ successful integration.

5.2

The main points pertinent to the EU’s understanding of the concept are listed in the Common Basic Principles for Immigrant Integration Policy in the EU adopted by the Council in 2004 (25). Therein, integration is understood as a ‘dynamic, two-way process of mutual accommodation by all immigrants and residents of Member States’. This runs contrary to a widely shared misconception of integration as assimilation — a one-way process in which individuals abandon their national and cultural attributes in exchange for those of their new country of residence (26). However, as reiterated by the 2016 EU Action Plan on the integration of third country nationals, an essential element of living and participating in the EU is the understanding of and subscription to its fundamental values (27).

5.3

It should be underlined that integration pertains to all migrants settling in a host country, regardless of their status or origin. Nevertheless, special policies are required for people with particular vulnerabilities (such as refugees), and a community-based rather than one-size-fits-all approach may yield best results.

5.4

Employment is a core part of the integration process. Member States and economic and social partners thus perceive labour market inclusion of migrants as a priority. Indeed, the demand for migrant workers continues to be one of the crucial drivers of immigration in the first place.

5.5

Among the other essential variables determining migrant integration on the side of the receiving state are: certainty and foreseeability of migration status, possibilities for and obstacles to obtaining citizenship, opportunities for family reunification, availability of language courses, language and cultural knowledge requirements, political rights, and the general openness of any given society and its willingness to embrace, assist and interact with the newcomers, as well as vice versa.

5.6

In addition, migrant integration is closely interlinked with a plethora of policies related to protection in the workplace, housing, healthcare, education, women’s rights, equality and non-discrimination — to name but a few.

5.7

In an effort to quantify the policies in place, the Migrant Integration Policy Index (MIPEX) was set up, providing comparable data on EU Member States and several other countries (28). Its results underline the existing discrepancies between Member States, including the enduring east-west divide.

5.8

Following the logic of the ‘migrant non-integration’ scenario, the following risks and/or costs can be identified:

5.8.1   Economic

—	Migrants’ exclusion from formal labour (and surge in undeclared work);

—	increased costs of handling social issues after they appear, rather than preventing them;

—	migrants’ inability to fully realise their potential (often transferred to following generations).

5.8.2   Sociocultural

—	Lack of identification with the values and norms of the host country and their acceptance;

—	aggravation of sociocultural differences between the migrant and host communities;

—	migrants’ structural discrimination, including lack of adequate access to services;

—	increased xenophobia and mutual distrust;

—	replication of language barriers;

—	spatial segregation leading all the way to ghettoisation;

—	break-up of overall social cohesion.

5.8.3   Security

—	Increase in hate speech and hate crimes;

—	decline in law enforcement and possible increase in crime rates, particularly in socially excluded areas;

—	potential radicalisation and increased support for extreme ideologies (by both migrant communities and the host society).

5.9

Given the above, investment in migrant integration is the best insurance policy against potential future costs, problems and tensions.

5.10

The relevant policies should include a clear, consistent and reasoned set of obligations on the migrants themselves, but equally a consistent denunciation of anti-migrant rhetoric and behaviours.

5.11

It is imperative, therefore, that EU Member States learn from one another and honestly strive to foster an environment in which migrant integration is achievable and the risks set out above are avoided.

5.12

It should be stated quite openly that government-led efforts to criminalise or otherwise marginalise migrants, the stoking of ethnic nationalism and cutbacks in financing of integration measures (including the non-distribution of funds made available by the EU) — as recently witnessed in certain Member States — are in direct contradiction to these aims and can do irreparable harm in the long run.

5.13

Last but not least, promoting integration is key to reinforcing EU fundamental values and principles, of which diversity, equality and non-discrimination are crucial ones.

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(1)  For instance, among 4,3 million immigrants in the EU in 2016, there were an estimated 2,0 million citizens of non-EU countries, 1,3 million people with citizenship of a different EU Member State from the one to which they migrated, around 929 000 people who migrated to an EU Member State of which they had the citizenship (for example, returning nationals or nationals born abroad), and some 16 000 stateless people.

(2)  Federica Mogherini’s keynote speech at the Civil Society Days 2017.

(3)  Migration data portal.

(4)  European Demographic Data Sheet 2018.

(5)  The costs and benefits of European immigration, Econstor.

(6)  Inspired by and using the conclusions of ‘The pros and cons of Migration’, Embrace.

(7)  Perspectives on Global Development 2017, OECD.

(8)  DAMVAD Analytics (2016): Labour immigration contributes to Swedish economic development.

(9)  OECD (2014): ‘Is migration good for the economy?’ Migration Policy Debates.

(10)  Rath, J., Eurofound (2011), ‘Promoting ethnic entrepreneurship in European cities’, Publications Office of the European Union, Luxembourg.

(11)  OJ C 351, 15.11.2012, p. 16.

(12)  OJ C 283, 10.8.2018, p. 1.

(13)  International Migration Outlook 2013, OECD.

(14)  Department for Employment and Learning, UK: The Economic, Labour Market and Skills Impacts of Migrant Workers in Northern Ireland.

(15)  EESC (2018): Skills Mismatches — An Impediment to the Competitiveness of EU Businesses (ISBN: 978-92-830-4159-7).

(16)  LABOUR-INT: ‘Integration of migrants and refugees in the labour market through a multi-stakeholder approach’.

(17)  Meine Berufserfahrung zählt.

(18)  UNI Europa UNICARE (2016).

(19)  European Commission (2013).

(20)  European Parliamentary Research Service (2016).

(21)  OJ C 487, 28.12.2016, p. 7.

(22)  Report ‘Migrant women in the EU labour force. Summary of findings’, EC.

(23)  Nori, M. (2017). ‘The shades of green: migrants’ contribution to EU agriculture: context, trends, opportunities, challenges’.

(24)  ‘EU rural development policy and the integration of migrants’, EP.

(25)  Common Basic Principles for Immigrant Integration Policy in the EU.

(26)  For more on the conceptual difference, see e.g. Assimilation vs integration, Centre for the Study of Islam in the UK, RE teachers Resource Area.

(27)  Action plan on the integration of third country nationals.

(28)  Migrant Integration Policy Index 2015: How countries are promoting integration of immigrants.

Opinion of the European Economic and Social Committee on ‘Sustainable inclusive bio-economy — new opportunities for European economy’

(own-initiative opinion)

(2019/C 110/02)

Rapporteur:

Mindaugas MACIULEVIČIUS

Co-rapporteur:

Estelle BRENTNALL

Plenary Assembly decision	15.2.2018
Legal basis	Rule 29(2) of the Rules of Procedure own-initiative opinion
Body responsible	Consultative Commission on Industrial Change (CCMI)
Adopted in CCMI	25.9.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	205/3/3

1.   Conclusions and recommendations

1.1.

Introduce a long-term, coherent and transparent policy and incentive framework to promote the bioeconomy. A high-political engagement to address the many cross-cutting societal challenges is needed and the EU policy environment could be more welcoming towards innovative bio-based products and sustainably produced EU-grown raw materials. Financial incentives or tax incentives could help spur on the necessary investments as Member States and regions have competence in these domains rather than the EU. Cluster organisations grouping SMEs, as well as primary producers of sustainable biomass, play an essential part in developing relationships between actors in the supply chain. A continued, updated mapping exercise (1), coupled with measuring the effects of the bioeconomy, could identify existing clusters active in the bio-based area, and actions should be taken to facilitate the development of new ones at European, regional and national levels, where gaps exist.

1.2.

The role of farmers, forest owners and their cooperatives is crucial to ensure an efficient use of natural resources and contribute to a circular bioeconomy. A strong Multiannual Financial Framework, Common Agricultural Policy and European forest strategy are needed to support advisory services, training and knowledge exchange, to better address farmers’ and agri-cooperatives’ needs. Concrete examples to raise awareness and show the benefits of the bio-economy for the whole value chain need to be promoted. That will attract young farmers and new entrants to start new businesses in this field. Producers’ organisations and cooperatives should also be promoted as important tools to increase the mobilisation and added value of existing biomass in EU. Therefore, supporting the EU agriculture and forestry sectors is crucial to further invest and innovate in the sustainable production of biomass.

1.3.

Support market creation and help consumers and the public to make informed choices about the products and industries they support through their daily purchases. To bridge the lack of awareness of consumers and broadcast coherent and accurate messages on bio-based products, the European Union needs to design a communication strategy involving all partners in the value chain and all other stakeholders. An important first step has been the establishment of clear EU-wide standards for bio-based products, which can pave the way for introducing market creation measures to further boost consumers’ and public procurers’ uptake of EU-produced bio-based products.

1.4.

Provide a sustainable financial return on investments through a one-stop-shop fund. Smart regulation and consistent multi-level implementation across the EU should be a priority in order to remove obstacles and reduce administrative burden while at the same time securing sustainability. For instance, a web-based tool could help identify available funding and whether the applicant meets the eligibility criteria for this mechanism. The system would also provide the links and resources needed to apply directly for the funding mechanism. It could serve as a market place, making information on funding available and putting fund seekers in contact with potential funders (e.g. like a crowdfunding site). Further, the continuation of the Bio-based Industries Joint Undertaking (BBI JU 2.0) beyond the current multi-annual financial framework is crucial, to foster new and existing value chains of bio-based products and strengthen the competitiveness of existing production facilities, and for contributing to rural development, creating jobs and promoting business.

1.5.

The EU Regional Development Policy post 2020 should provide enough funds to further develop rural areas. The focus should be mainly on supporting investments in infrastructure and services needed for efficient and sustainable rural bio-economy business.

1.6.

Capitalise on scientific opportunities and support the uptake of innovations through a flexible, proportionate, robust legal framework. Research is critical to enable, establish and evaluate innovation in the bioeconomy. Commercial exploitation depends not only on excellent research but also on the appropriate strategic, legal and societal framework to ensure fast knowledge transfer to industry. Frontrunners should receive the space and support needed to innovate and accelerate within regulatory boundaries. Innovation deals and green deals should be agreed upon with stakeholders in situations where regulation could better support the development of the overall bioeconomy and where creative solutions are needed. Furthermore, innovation also plays a crucial role in enhancing the sustainability of the EU biomass production.

1.7.

Enhance education, training and skills programmes for new talent and existing employees. Unlocking the bioeconomy potential could lead to creating new jobs. Yet, the introduction of new technologies poses important challenges to the organisation of work and the skills workers need. Therefore, ensuring the continued development and adaptation of individuals’ skills over their lifetimes is of the utmost importance. Commitment from all relevant stakeholders — biomass producers, education providers, companies, trade unions, public employment services and governments — to improving the quality and responsiveness of education and vocational training provision is paramount for reducing the skills mismatch by reinforcing links between education systems and labour markets. However, overall skills development and matching policies should be an integral part of a broader set of actions that include employment, industrial, investment, innovation and environmental policies.

1.8.

Explore biomass usage. A more efficient use of the existing biomass supply must be a priority to meet the growing demand for feedstock. Then, the quality and quantity of productive soils must also be improved for agriculture and the use of abandoned, marginal or underutilised land incentivised. Feedstock producers, mainly farmers and forest owners, play a vital role in developing the bioeconomy. Awareness raising of potential opportunities (using different crops) and the development of infrastructure for collection, storage and transportation of biomass is required. Making sustainability reporting schemes less complex and enhancing versatile biomass production and processing capacity can also play a key role. Wastes and residues as alternative biomass sources and the sustainable management of European forests offer opportunities for the bioeconomy and the bioenergy. A valuation of sustainable waste flows is needed as well as further investments in wood and residues mobilisation. In addition, technologies need to be developed to deal with the inherent variability of such products. In some cases, national policies may need to adapt to accommodate usage of wastes in bio-based products.

2.   General comments

2.1.

The bioeconomy encompasses the production of renewable biological resources and their conversion into food, feed, bio-based products and bioenergy. This includes agriculture, forestry, fisheries, food, pulp and paper production, as well as parts of chemical, biotechnological and energy industries. For the purpose of this opinion, research on genomes, cell processes and bioinformatics is not specifically considered. The 2012 EU Bioeconomy Strategy aimed ‘(…) to pave the way to a more innovative, resource-efficient and competitive society that reconciles food security with the sustainable use of renewable resources for industrial purposes, while ensuring environmental protection’. In 2017 the Commission carried out a review of its 2012 EU Bioeconomy Strategy, which concluded that the Strategy has demonstrated the relevance of its objectives and that the importance of the opportunities offered by the bioeconomy is increasingly recognised in Europe and beyond.

2.2.

Nevertheless, while the objectives of the 2012 EU Bioeconomy Strategy continue to be relevant to meet the challenges in food and nutrition security, and the accompanying Action Plan has delivered on its proposed objectives, a refocusing of the actions and assessment of the scope of the Strategy are considered necessary in light of recent policy developments, including the United Nations Sustainable Development Goals (SDGs) and Convention on Climate Change (COP21 commitments). The global population is expected to grow to almost 10 billion by 2050 and biological resources need to be used more efficiently, so there can be safe, nutritious, high quality and affordable food for more people with less environmental and climate impact per unit produced, and sufficient renewable biological material to produce a sizeable part of what we currently harness from fossil crude oil, in conjunction with wind, solar and other renewable energies.

2.3.

Against this backdrop, the sustainable bioeconomy cuts across sectors, and is at the core of sustainable economic strategies worldwide. The bioeconomy can play a key role in European competitiveness and it is now important to identify and use its opportunities, both at European and Member States/regional level. For example, other third countries such as the USA have experienced top-down leadership on the development of a bioeconomy generating almost USD 400 billion and supporting over four million jobs through direct, indirect, and induced contributions (2).

2.4.

The bioeconomy provides options that can both help reduce CO2 emissions and reduce reliance on imported fossil resources. For example, EU forests sequestrate an amount of carbon corresponding to 10 % of the EU’s yearly emissions, while providing a sustainable and constant supply of biomass for renewable energy. Furthermore, estimates show that 100 000 chemicals currently in production can, in theory, be sourced from renewable raw materials. This does not mean all of them should be, but it is theoretically possible. This will not only offer the possibility of producing our everyday household items locally and renewably, it will also help create jobs and growth in Europe, where the technological edge still remains strong.

2.5.

However, major barriers remain on the path towards greater innovation within the EU bioeconomy. An important obstacle relates to product cost-competitiveness, both compared to fossil alternatives and to equivalent products from elsewhere in the world. Cost-competitiveness is affected by many factors, including technology readiness level, labour costs, fossil fuel subsidies and amortisation, as well as the low level of market support for bio-based products. This competitiveness issue is compounded by difficulties in accessing finance for innovative projects and production facilities and, often, ongoing low end-user awareness of bio-based products, as well as by a lack of skills and operational relationships to drive the sector forward. Moreover, permitting procedures for new bio-based projects are becoming lengthy and burdensome leading to significant legal uncertainties and financial risks for economic actors.

3.   Specific comments

3.1.

It is estimated that the bioeconomy sectors in the EU have an annual turnover of about EUR 2 trillion and employ about 19,5 million people (3), most of them located in rural and coastal areas, representing about 8,5 % of the EU28’s workforce. Agriculture, forest-based sector and rural communities are expected to benefit from the developing bio-based sector across the EU in the form of employment and income generation. Processing biomass and manufacturing bio-based products provide new business opportunities in the form of growing and marketing diverse crops. Together with conventional crops like cereals, oilseeds, potatoes and sugar beet, novel crops such as grass, forest-based crops, seaweed and microalgae are regarded as potential future income generators in rural and coastal areas.

3.2.

Existing biorefineries already now provide livelihoods and economic empowerment to rural families and communities. Biorefineries — factories that use renewable raw materials (i.e. biomass, by-products and co-products as well as waste) instead of fossil resources are at the heart of the bioeconomy: they are located in rural and coastal areas, close to the renewable raw materials they process, in the heart of food and feed, industrial, wood and energy production.

3.3.

Biorefineries enhance every component of the plant they process, producing minimal waste. Through efficient and/or innovative technologies, biorefineries based in the EU manufacture a wide array of products such as food, feed, chemicals, fibres and fuels which combine the features of being renewable, reusable, recyclable, compostable or biodegradable. The versatility of bio-based products and ingredients is such that they can be used in a wide variety of applications, such as aquafeed, construction, cosmetics, cardboard, detergents, fuels, lubricants, paint, paper, pharmaceuticals, plastics, and other industrial products, thereby substituting fossil-based ingredients with renewable ones.

3.4.

The establishment of new biorefineries, development and expansion of existing biorefineries, is an investment in a first-of-a-kind plant. Biorefineries are capital-intensive, have long payback times and are exposed to technology and market risks. Therefore, a clear, stable and supportive regulatory and financial framework is important to foster these investments in Europe. Today a variety of different instruments can be accessed including Horizon 2020 (the new proposed Horizon Europe legislation is a welcomed, ambitious innovation and research programme) and the Bio-based Industries Joint Undertaking; European Structural and Investment Funds (ESIF); the European Agricultural Fund for Rural Development (EAFRD); InnovFin; the European Fund for Strategic Investments (EFSI); and last but not least the European Investment Bank (EIB) for loans and guarantees. But accessing them can be difficult. A one-stop-shop for companies to access in-depth tailor-made information fitting their needs would address these bottlenecks.

3.5.

In this context, engaging with civil society, together with farmers, forest owners and industry, to encourage the debate on shaping a more competitive bioeconomy for Europe that benefits all is critically needed. Helping to communicate the benefits of the bioeconomy is crucial to achieve this paradigm shift towards a lower-carbon renewable-based economy. In this regard, credible certification and labels schemes could be important tools to bring about a sustainable and reliable bioeconomy industry, and give confidence to industrial customers, public procurers and consumers.

3.6.

The EU, Member States and regional authorities can make crucial contributions to help the bioeconomy grow, by stimulating market demand for renewable, smart and resource-efficient products and services. Member States should include in the future CAP strategic plans concrete measures to develop and/or further support investments and promote sustainable solutions for EU farmers, forest owners and their cooperatives to increase their competitiveness and efficiency. Where there is a potential for bio-based products to substitute fossil-carbon alternatives sustainably, this could be enabled both through the development of new legislation, such as the circular economy package, and through the potential revision of other relevant existing legislation to encourage substitution of locally produced bio-based alternatives to traditional fossil carbon products. Further, existing standardisation activities such as the TC411 and existing certification schemes and/or new voluntary labelling schemes such as the biobased% can be used.

3.7.

Public procurers at national and regional levels should increase references to such credible bio-based content certification and labels. For instance, in 2016, the Dutch Standardisation Body NEN launched a new bio-based certification scheme, Biobased% (http://www.biobasedcontent.eu/). It establishes the amount of biomass that is contained in a product, and helps companies to provide transparent and credible information about the bio-based content of a product, both in business to business as well as in business to consumer communications. It is based on the European Standard EN 16785-1:2015 (providing a method for determining the bio-based content of solid, liquid and gaseous products using radiocarbon analysis and elemental analyses). Conformity assessments are carried out by certification bodies who have entered into an agreement with NEN. Now that this certification is in place, it is important to raise awareness and incentivise the use of renewable raw materials in current and future EU legislation.

3.8.

In forestry, certification schemes play an important role for guaranteeing a sustainable mobilisation of biomass. For instance, 60 % of the EU’s forests are certified under the Programme for the Endorsement of Forest Certification (PEFC) and/or Forest Stewardship Council (FSC) scheme. Furthermore, EU forestry is producing under the highest environmental standards worldwide, originating from legislation such as the EU Timber Regulation, rules on land use, land-use change and forestry (LULUCF), the Birds and Habitats Directives and the circular economy package.

3.9.

Improving B2B and B2C communication is therefore key. Raising public awareness based on accurate, relevant and accessible information is essential to ensure the development of a smart, sustainable and inclusive bioeconomy, to create a market for sustainable bio-based products and to promote more sustainable consumption and production. Public awareness actions are needed particularly at regional and local level, including prizes or awards as well as exhibitions on the role of technology and science in the bioeconomy.

3.10.

It is thus of great importance to create clear and accurate messages for the public. As the bioeconomy offers several opportunities to address societal challenges, measuring it through a comprehensive economic assessment is required. This will provide information about the size of the bioeconomy cutting across sectors, as well as its contribution to economic growth and related labour market effects. In this regard the scientific community has a pivotal role to play. This is also why it is essential to sustain investment in interdisciplinary and basic research for the EU to fulfil its potential in contributing to global research and innovation for food and nutrition security, for competitiveness and the knowledge-based bioeconomy. It is vital that the EU legislative position is fully informed by the advancing scientific evidence and experience worldwide and that the processes for deciding on regulatory oversight are transparent.

3.11.

Educating school children and high school students is crucial to raise a generation that understands the challenges and embraces the opportunities offered by the bioeconomy. For example, teaching principles of circularity, of acting globally and locally at the same time (glocally), and raising interest for exploration will contribute to preparing the new generation to find its way. New curricula have already been designed at universities, combining life sciences, engineering and marketing, for instance. Such cross-overs between disciplines and a facilitating environment for start-ups can support students to become bioeconomy entrepreneurs. Vocational training needs to evolve to match requirements for skills in primary production, manufacturing, transport, and other relevant sectors. Also, later in life, workers need to update their skills and competences. Life-long learning programmes that connect education providers with producers, employers and workers, researchers, and innovators can support this.

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(1)  https://biconsortium.eu/news/mapping-european-biorefineries

(2)  See the USDA’s Fact Sheet: An Economic Impact Analysis of the U.S. Biobased Products Industry: 2016 Update at: https://www.biopreferred.gov/BPResources/files/BiobasedProductsEconomicAnalysis2016FS.pdf

(3)  All quoted figures are sourced from ‘JRC science for policy report: 2016 Bioeconomy Report’, available at http://publications.jrc.ec.europa.eu/repository/bitstream/JRC103138/kjna28468enn.pdf

Opinion of the European Economic and Social Committee on ‘Facilitating access to climate finance for non-state actors’

(own-initiative opinion)

(2019/C 110/03)

Rapporteur:

Cillian LOHAN (IE-III)

Legal basis	Rule 29(2) of the Rules of Procedure
	Own-initiative opinion
Plenary Assembly decision	15.2.2018
Section responsible	Agriculture, Rural Development and the Environment
Adopted in section	27.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	114/6/7

1.   Conclusions and recommendations

1.1

Although large funds have been pledged in Climate Finance pacts, the EESC wants to highlight a problem with small scale non-state climate actors accessing financing to ensure potentially transformative initiatives are supported and can happen.

1.2

The flows of climate finance in the European Union need to be urgently monitored and mapped. This will facilitate measuring the impact for non-state climate actors, and ensure the progress on a wider transformation of the economy to a low carbon model can be assessed.

1.3

The sources of finance are disparate, as are the bottom-up initiatives that require access. Mechanisms to address this disconnect are not in place. This should be addressed by establishing an inclusive Climate Finance Forum at the EU level.

1.4

The EESC is proposing a Climate Finance Forum to address the key issues, bringing together key stakeholders to identify barriers, design solutions, and identify most efficient mechanisms for improved distribution of finance, including a type of match making service that links projects and appropriate climate finance sources to each other.

1.5

A mechanism for reaching initiatives that require smaller sums needs to be created (then effectively communicated) that includes: — simplified application process — simplified reporting requirements — match funding — supports for projects at design stage, pre-application for funding — supports for capacity building, networking, exchange and platform development at local, regional, national and European level.

1.6

A focus on climate finance should not be to the exclusion of responsible financing in other areas. All financing should be climate proofed to ensure that any funding and financing outside of specified climate finance is not working against the climate commitments and targets. This needs to be adhered to in the context of the Paris Agreement Article 2.1c, for existing finance flows to be consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.

1.7

A toolkit needs to be developed, with a clear communication strategy, that empowers non-state actors at all levels to understand and be able to access climate finance. The toolkit should facilitate project developers to design projects that will contribute to a low carbon and climate-resilient economy.

2.   Introduction

2.1

This opinion builds on the previous EESC opinions on the ‘Coalition to deliver commitments of the Paris Agreement’ (1) and on ‘Boosting climate actions by non-state actors’ (2) as well as on the recent EESC study (3) which highlighted barriers hampering stronger involvement of non-state actors in climate action.

2.2

In 2018, the EESC called for a ‘European Dialogue on Non-State Climate Action’ (ED-NSCA) to strengthen and increase the scope and scale of European-based non-state climate action. It stated that the purpose of the dialogue should be not only to highlight and showcase actions, but also to respond to the needs of non-state actors by inspiring new partnerships among state and non-state actors; facilitating peer learning, training and advice sharing among non-state actors; increasing finance available and facilitating access to it.

2.2.1

The term ‘non-state actors’ refers to actors that are not Party to the United Nations Framework Convention on Climate Change (UNFCCC). This broad understanding includes various types of business, including small, medium-sized and micro-enterprises; investors; cooperatives; cities and regions; trade unions; communities and citizen groups; faith-based organisations; youth groups; and other non-governmental organisations.

2.2.2

The proposed European Dialogue on the Non-State Climate Action process should support access to finance for non-state actions. This should involve: — the mapping of funding opportunities; — advice on fundable plans; — looking at how the existing financial value chain (both public and private) is providing funding for climate investments that non-state actors aim to do; — analysing the possibilities for effective funding/financing distribution to smaller scale projects that have the potential to be transformative; — analysing current dialogue and consultation procedures with non-state actors, with a view to establishing new techniques and best practices to enhance the use of existing European and international funds; — advocating for the upcoming Multiannual Financial Framework of the EU to serve the higher climate ambitions of, and incentivise actions by, non-state actors; — the exploration of innovative funding (peer-to-peer, crowd, micro, green bonds, etc.).

2.3

Climate Finance can be interpreted in many ways but the United Nations Framework Convention on Climate Change (UNFCCC) standing committee on finance defines it as ‘finance that aims at reducing emissions, and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts’.

2.4

This opinion looks at Climate Finance in relation to EU Member States and the non-parties to the UNFCCC within those countries, allowing CSOs, municipalities and local government access to the financial instruments required to assist in the design and implementation of projects, initiatives and activities that contribute to reducing emissions, and climate proofing communities.

2.5

It is important to view this opinion in the context of Climate Justice (4) as a means of ensuring that the costs of climate action are not disproportionally placed on the poorest and most vulnerable in society.

2.6

Financing the first steps in a transition to a low carbon economy and for both adaptation and mitigation is critical to ensure a just transition, and to accelerate actions at ground level.

2.7

For micro projects and small projects the amounts from EUR 2 000 to EUR 250 000 can be difficult to access. Efficient mechanisms are required to ensure that smaller scale community-led actions are not excluded from the transformative potential of climate financing.

2.8

The EU has over the last decade successfully developed a range of financing mechanisms tailored to such needs — the EIDHR Democracy and Human Rights programme, GCCA (Global Climate Change Alliance), NGO Co-funding and Decentralised cooperation financial instruments — which could inspire the development of appropriate climate change instruments.

3.   Identified Problems

Context

3.1

The EESC is firmly committed to the United Nations 2030 Agenda for Sustainable Development and the Paris Agreement. However, our current trajectory will at best only limit the increase in temperature to 3 oC or more, which is well beyond what is stipulated in the Paris Agreement. The shift towards sustainability will require major efforts and significant investment. Total annual average energy-related mitigation investment for the period 2015 to 2050 in pathways limiting warming to 1,5 oC is estimated to be around USD 900 billion according to the IPCC special report on the impacts of global warming of 1,5 oC above pre-industrial levels.

3.2

Although the investment required to tackle climate change is large it is not as large as the investment required to rescue a collapsing financial sector in recent years. On that occasion investments of EUR 2,5 trillion were mobilised. The potential collapse of the ecosystems that sustain us should warrant at the very least an equal response.

3.3

Too often the climate finance discussion concentrates on creating new explicit funding lines while the Paris Agreement calls for all finance flows to be consistent with a pathway towards low greenhouse gas emissions and climate resilient development.

3.4

The Marrakech Partnership and the Global Climate Action Agenda are opportunities for the engagement of non-state actors in the formal UNFCCC process. Capturing actions within the EU, and financing actions in order to maximise their potential impacts is not a focus when designing financing packages.

3.5

While there has been progress on the issue of financing the fight against global warming and its effects, it has not been enough. The latest Intergovernmental Panel on Climate Change report (5) clearly states that we are in a critical period, with radical actions required in the next decade to limit impacts to manageable levels. Political priority must be given to sustainable finance and a sustainable economy, in particular through clear, stable and incentive-based legislation.

3.6

It is not sufficient to allocate a set percentage of a budget to climate finance if another part of the budget is spent on climate damaging activities. The whole of any spending needs to be considered in terms of its climate impact. An International Monetary Fund working paper estimates the total of global direct and indirect subsidies for fossil fuels at an annual figure of USD 5,3 trillion, equating to more than USD 15 billion per day. Even with the envisaged Green Climate Fund amounting to USD 100 billion per year, the negative impact of these subsidies is not offset.

3.7

The energy transition will not be successfully implemented in time and in line with the European commitments under the Paris Agreement, if the issue of energy poverty is politically neglected. A fair distribution of both financial and social costs and benefits associated with Europe's sustainable energy transition among all levels of government and market actors, including citizens, is needed. The scientific study of Heat Roadmap Europe (6) shows that Europe is able to reduce its GHG emissions by 86 % in 2050 compared to 1990 with existing technologies in an affordable and cost-effective manner.

3.8

Research for this opinion highlighted the lack of information on mapping flows of dedicated climate finance within Member States. It is difficult to assess if funds are being broken into smaller accessible pots of money or what the transformative effect of the funding is. This lack of monitoring and reporting increases the ambiguity around the perceived problem, and hinders the development of the most effective solutions.

Access for business and SMEs

3.9

Access to funding remains a chief challenge for all types of non-state actors, including the varied challenges faced by SMEs and larger businesses. This challenge does not only entail the availability of more and additional funding, but also the clarity of existing funding mechanisms.

3.10

Moreover, there is also difficulty in defining what constitutes a ‘green investment’. Investors are primarily concerned with risk and return, and it is difficult for them to assess the potential impact on the climate of a proposed project, and to measure its chances of success. Private lenders will be reluctant to finance a project without clear understanding of investment risks as well as risk mitigation mechanisms — in other words without guarantees.

Access for local and regional governments

3.11

For subnational governments, factors limiting their access to finance include: low credit ratings; limited capacity to mobilise private finance due to insufficient size of the low-carbon infrastructure investment market and unattractive risk-return profiles; and sovereign limits set by national governments on how much or if a sub-national government can borrow from the private sector.

Access for community initiatives

3.12

There are currently many thousands of grassroots initiatives on climate change and sustainability in Europe. These initiatives have a significant contribution to make to EU climate, energy and sustainability goals but they are mostly reliant on volunteers and a major barrier to their development and upscaling is the lack of funding and professional support. Often, very modest resources are required, without which initiatives struggle to progress and launch projects. The transformative potential of these initiatives is not being harnessed.

3.13

In many cases, local grassroots initiatives find it difficult to access conventional sources of funding. Often, the minimum amount of funding required to apply for is too high, and well beyond the needs or management capacity of small-scale local initiatives. Co-financing requirements create additional barriers.

3.14

Matching funding requirements, excessive paperwork and complicated processes are part of the problems identified by smaller groups in accessing finance. Though these types of projects/initiatives are individually small their cumulative effect can be large. There are also many additional local knock-on benefits and advantages when small community-based programmes are supported with adequate financing.

3.15

Most, if not all funding is project oriented and does not address the need for resources to support processes at different levels, from community organising and capacity building at local level, to networking, exchange and platform development at regional, national and European level. Funding support in this area could greatly help to accelerate the level of citizen and community engagement on climate action and also help to ensure there is sufficient organisation and collaboration to support scale up and contribute to policy development.

Access for Innovation Funding

3.16

Early-stage entrepreneurs also face several challenges in access to finance, lack of knowledge and experience, access to markets and scaling beyond the start-up phase. Financing innovation is a critical part of the solution to the climate crisis, but equally being innovative in the financing mechanisms and their delivery is required. Initiatives such as EIT Climate-KIC aim to address these challenges by mainstreaming climate in financial markets, democratising climate risk information and supporting investments in innovative start-ups.

4.   Proposed solutions

4.1

The EESC proposes a type of Climate Finance Forum be established at the EU level with a decentralised network. This would bring together all relevant parties and facilitate a coordinated response to the problems identified here. It would be a conduit for developing the mechanisms required, as identified in this opinion.

4.2

A function of the Climate Finance Forum needs to be a dialogue platform to help connect particularly promising and effective non-state solutions to private and institutional investors. In addition, a strong focus on scale-up and replication potential is needed across EU Member States and elsewhere, to maximise impact. The EESC, with its network of organised civil society groups throughout Europe, is in a strong position to be part of a Climate Finance Forum, as a voice that can represent the grassroots issues with accessing finance.

4.3

Effective communication will be an essential part of any successful strategy to address the problems in climate finance. Communication needs to travel in all directions, clearly identifying the audience and communicating in effective, precise and appropriate language the opportunities and accessibility of finance options.

4.4

The European Commission and other EU institutions need to develop guidance documents for non-state actors to make use of existing funding mechanisms. There is a need for a system that would identify, analyse, synthesise and disseminate information on the variety of funding sources available for climate action by non-state actors. This can build on the work being done by the European Committee of the Regions, which is identifying steps to developing a toolkit comprising easily understood information for local and regional authorities on funding and financing available for climate action.

4.5

A monitoring mechanism is required to create clear mapping on climate finance flows, helping to identify the blocks and focussing on the practical solutions to remove those blocks. This is an urgent first step. A mapping process would also be a critical step in understanding the barriers to access for small scale non-state actors. Mapping the financing will also help to identify the gaps in capturing positive climate actions that should be part of the Global Climate Action Agenda process.

4.6

The EESC calls for the EU to be a leader in providing a model on how to capture non-state actors' contribution to achieving climate goals. European non-state climate actors — especially smaller ones — expect help from European institutions to mobilise dedicated climate funds, and to gain better access to funding through simpler procedures and reporting. This would facilitate capturing many actions that go unrecognised in the fight against climate change. For example, projects below a certain financial threshold such as EUR 50 000 could have a simplified one-page application, and one-page reporting form.

4.7

There is a need for additional funding in the form of small scale grants, with simplified application and reporting procedures, specifically targeting local grassroots action on climate change and sustainability, and without prohibitive co-financing rates. Mechanisms that allow projects to cluster together could be designed to improve the impact of the financing, and to facilitate access. These tools need to be urgently developed.

4.8

A support mechanism that allows projects to avail of expertise in the pre-application for finance stage, so that projects are designed effectively and pitched appropriately, should be developed.

4.9

An overall reflection on innovative financing mechanisms needs to be developed at the EU level. Non-state actors should be involved in this discussion from the outset to ensure simplicity and clarity of allocation criteria.

4.10

In general, a closer cooperation between established climate and sustainability funds and financial programmes and non-state actors networks should be established. This is a question of knowledge sharing, communication and dialogue. A Climate Finance Forum can facilitate this.

4.11

Financial measures could also incentivise non-state action, or climate-friendly behaviour by non-state actors. For instance, tax deductions at the national level could help low-carbon production and stimulate participation by non-state actors in climate action.

4.12

In formulating the new EU Multiannual Financial Framework there may be opportunities to enable bottom-up non-state climate action to efficiently deliver on EU climate commitments under the Paris Agreement. In this regard, the EESC asks for an increase of at least 40 % in EU expenditure contributing to climate objectives (7). Secondly, the EESC calls for a swift phase-out of fossil fuel subsidies and no direct or indirect (co-)financing of any fossil based energy through European funds.

4.13

A climate proofing tool must be developed in order to ensure any public spending is not working to support activities that exacerbate the climate crisis. This should also apply to private financing programmes. Allocating specific funds for climate finance should not mean that the other parts of a budget or of financing is allocated to activities that are working in opposition of the climate objectives. The objective set in Article 2.1c of the Paris Agreement has to be met.

4.14

The EU's main financial instrument to support bottom-up local development is the Community-led Local Development (CLLD) approach. It is ideally placed to support these bottom-up initiatives, offering the potential to provide grants and supports that are tailored to local circumstances. In December 2017, the EESC adopted an opinion on ‘Advantages of the CLLD approach for integrated local and rural development’ (8) which urged the European Commission to explore and analyse in depth opportunities to create a reserve fund for CLLD at EU level. Irrespective of this, it recommended the European Commission to ensure that all Member States have a national CLLD fund with contributions from all four ESI funds (EAFRD, ERDF, ESF and EMFF). This CLLD structure could be one of the conduits used to support micro and small projects referred to in 2.7.

4.15

To make the financial value chain more sustainable as a whole, the EESC supports the Commission's road map on financing sustainable growth (9) adopted in March 2018. The EESC has made concrete recommendations to this Action Plan in its respective opinions (10).

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(1)  EESC opinion on the Coalition to deliver commitments of the Paris Agreement (OJ C 389, 21.10.2016, p. 20).

(2)  EESC opinion on Boosting climate actions by non-state actors (OJ C 227, 28.6.2018, p. 35).

(3)  EESC study on a Toolbox for multi-stakeholder climate partnerships — A policy framework to stimulate bottom-up climate actions.

(4)  EESC opinion on Climate Justice (OJ C 81, 2.3.2018, p. 22).

(5)  IPCC special report on the impacts of global warming of 1,5 oC above pre-industrial levels (October 2018).

(6)  Horizon 2020 research and innovation programme under grant agreement No 695989 — Heat Roadmap Europe.

(7)  EESC opinion on the European Finance-Climate Pact (OJ C 62, 15.2.2019, p. 8).

(8)  EESC opinion on the Advantages of the Community-led Local Development approach (OJ C 129, 11.4.2018, p. 36).

(9)  Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions — Action Plan: Financing Sustainable Growth.

(10)  EESC opinions on Action Plan on Sustainable Finance (OJ C 62, 15.2.2019, p. 73), Sustainable finance: taxonomy and benchmarks (OJ C 62, 15.2.2019, p. 103) and Institutional investors’ and asset managers’ duties regarding sustainability (OJ C 62, 15.2.2019, p. 97).

Opinion of the European Economic and Social Committee on ‘The situation of Roma women’

(exploratory opinion requested by the European Parliament)

(2019/C 110/04)

Rapporteur:

Ákos TOPOLÁNSZKY

Referral	European Parliament, 30.5.2018
Legal basis	Article 304(1) of the Treaty on the Functioning of the European Union
Section responsible	Employment, Social Affairs and Citizenship
Adopted in section	7.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	196/2/5

1.   Conclusions and recommendations

1.1

A large proportion of Roma women (and girls) face multiple sources of discrimination across different sectors, trapping them in a situation where they cannot fully exercise their rights. Roma women are the most vulnerable minority group in the EU. Putting this situation right is a key duty and obligation for European democracies.

1.2

The EESC thanks the many Roma women for their past and present determination to courageously tackle discriminatory structures and institutional violence in the interests of coexisting in complete freedom in a Europe free of discrimination.

1.3

Segregated education — the poor quality of which stems from the discrimination it entails — should be brought to an end without delay, ensuring that Roma girls also have access to all aspects of high-quality state education. Arrangements concerning special schools and guidance procedures should be subject to stringent review as soon as possible.

1.4

The EESC expects the Member States to prioritise the eradication of health practices that infringe service standards meeting reasonable ethical requirements and the relevant legislation, and that they classify illegal practices such as forced sterilisation, denial of healthcare on the grounds of ethnic origin or lower-quality services as criminal offences.

1.5

The Member States should immediately abolish discriminatory forms of employment, at the same time implementing structured policies that increase Roma women's chances of finding work.

1.6

Minimum acceptable standards for public services and housing must be defined, adopted and enforced as a fundamental right, if necessary by enshrining them in Member State constitutions.

1.7

All forms of human trafficking and hate crimes to which Roma people and, more specifically, women from that community, fall victim must be combated vigorously and without discrimination.

1.8

Roma women have very few opportunities to shape and evaluate policies that can influence their lives. Their involvement in such programmes should be guaranteed to the appropriate extent.

1.9

Unlike current practice in most Member States, the concerns and interests of Roma women in post-2020 European and national strategies intended to redress the situation should be made a priority.

2.   The situation of Roma women in the EU

2.1

A large proportion of Roma women (and girls) face multiple sources of discrimination across different sectors, trapping them in a situation where they cannot fully exercise their rights. Roma women are the most vulnerable minority group in the EU. This state of affairs should be seen as systemically harmful to democracy, the rule of law and fundamental rights, radically weakening the European ideal, which is based on the values set out in Article 2 of the Treaty on European Union (1) and in the Charter of Fundamental Rights of the European Union (2). Little progress has been made in this area in recent years.

2.2

Although data broken down by ethnic origin and gender is not available in most Member States, the European Union Agency for Fundamental Rights (FRA) provides a detailed picture of the unfavourable situation of Roma women (particularly in the EU-MIDIS II survey (3)). Roma women appear to be disadvantaged in all sectors of society, not only compared to the general population but also compared to the men of their own community.

2.3

The EESC is convinced that the strength of the above-mentioned European ideal mirrors the extent to which the weakest citizens of the EU can benefit from it. That is why taking the necessary measures to improve the situation of Roma women and girls and promote their empowerment is not only an obligation for the institutions and Member States of the EU, but is also a litmus-test of the quality of their democratic structures and the maturity of the rule of law in them.

3.   General comments

3.1

Article 2 of the Treaty on European Union cites equality and respect for human rights, including the rights of persons belonging to minorities, as being among the founding values of the European ideal. These rights can only be said to be effectively applied when real changes in this regard are guaranteed, including for the social groups most affected by marginalisation and discrimination. Discrimination, segregation and anti-Gypsyism blatantly deny these values.

3.2

Equality of rights between Roma women and men is a pre-requisite for the economic empowerment of Roma women, as well as for the application of the human rights and fundamental freedoms that they should enjoy in political, economic, social, cultural and civic terms and which must be constitutionally guaranteed.

3.3

In this context, the EESC — in keeping with its previous opinions (4) — endorses the EU framework strategy’s objectives, while drawing particular attention to the need for consistent implementation and to the insufficient progress achieved.

3.4

It also notes that anti-Roma prejudice is visible at almost every level of activity in the Member States, in both administrations and institutions. This deprives Roma people of fair access to public services, and prevents them from enjoying equal rights and mandatory equal treatment, from taking part in political decision-making on questions of concern to them in line with their proportion of the overall population, and from protecting themselves from the effects of discrimination. This is particularly true for Roma women.

3.5

The Committee calls for systematic infringements of Roma women’s rights to be catalogued, by drawing up ‘white papers’ with the cooperation of independent and credible Roma community organisations. They should be consulted and granted official recognition, so that the foundations for historic reconciliation can be laid.

3.6

The EESC thanks the many Roma women for their past and present determination to courageously tackle discriminatory structures and institutional violence in the interests of coexisting in complete freedom in a Europe free of discrimination.

4.   Specific public policy fields (5)

4.1   Education

4.1.1

Segregated teaching is always illegal and inevitably leads to unfavourable outcomes. The harmful consequences of school segregation weigh particularly heavily on Roma girls, shutting off their chances of social mobility. All legal means and targeted public policy assistance should therefore be brought to bear, and the necessary additional expenditure guaranteed, to remedy the low level of segregated education due to discrimination, in line with EU expectations. At the same time, it must be ensured that Roma girls also have access to all aspects of high-quality public education. Governments must ensure that the appropriate human resources, training courses and school syllabuses are in place.

4.1.2

An unjustified diagnosis of intellectual disability and segregated schooling, to which Roma children may fall victim, are to be considered one of the most serious assaults on their rights, ruining their futures. Such assessments must be regularly verified by independent specialist institutes. It must be ensured that there are no obstacles to launching a verification procedure at the request of any relevant party, primarily a parent or guardian, but also a school.

4.1.3

If there is any suspicion of repeated (and particularly systematic) errors of judgment which have the intention or effect of segregation, it must be ensured that the Member States are required to carry out an in-depth investigation into the causes as early as possible, to publish the conclusions, to assess the conclusions in terms of their national anti-segregation mechanisms, and to take the necessary legislative and implementing measures.

4.1.4

In the meantime, the level of special classes should be brought closer into line with that of standard schools, so that they are not simply educational dead-ends.

4.1.5

The EESC advocates capping, freezing or, in the event of systematic problems, completely withdrawing European funds for countries where school segregation is not reduced or even increases. The Committee hopes that in such situations, the European Union's legal protection mechanisms (Article 7 and the rule of law mechanism) will be brought to bear rapidly and effectively.

4.1.6

A range of ‘second chance’ training and ongoing training programmes should be set up for Roma women to increase their educational opportunities and reduce the risk of dropping out of school early, so that they can aspire to other than publicly-subsidised or inferior, partially-declared or atypical jobs, which block them from social mobility.

4.2   Health

4.2.1

Roma women, who often live in ghettoised or inaccessible areas, are often the target of rejection, denigration or even physical and psychological violence when receiving health care. In terms of reproductive health, they generally have only very limited access to their rights. The EESC strongly urges the Member States to set up and operate mobile units with the equipment and capacity necessary for populations living in segregated situations. It also calls for a review of how maternity and pregnancy services operate, followed by the necessary improvements.

4.2.2

The EESC expects the Member States to prioritise the abolition of health practices that violate reasonable ethical standards and the relevant legislation and, where necessary, to systematically take legal action. Easily accessible appeal procedures should be provided free of charge to uphold rights in the area of health, as should special care reflecting the real needs of the individuals concerned. This includes setting up health information points, training and deployment of health mediators and implementing public health initiatives that reach ghettoised populations.

4.2.3

Governments must urgently commit themselves, clearly and publicly, to the principle of equal access to health care and to its practical implementation, and to take action against practices that run counter to this principle, introducing awareness-raising programmes for all those concerned. The necessary legislative measures must be taken to ensure that Roma women and children without basic health insurance are covered.

4.3   Forced sterilisation

4.3.1

In many countries where systematic violations of women’s reproductive rights have taken place in the past, and where mass forced and coerced sterilisation has been carried out as an instrument of state policy, the political authorities have failed even to apologise or to assume responsibility. Where this has taken place, there has been no legal or financial redress. The Committee proposes that the European legislator make every effort to ensure that the Member States, as part of the harmonisation of European criminal law, significantly extend or even entirely do away with the limitation period for prosecution for this type of criminal offence — the substance of which may be compared to crimes against humanity — and adopt specific legislation to enable victims to obtain effective redress and financial compensation.

4.3.2

A full and honest light needs to be shed on these matters in complete transparency with a view to fostering reconciliation and making any future infringement by the public authorities impossible. The EESC consequently recommends that in the Member States concerned, past infringements in this area be investigated by committees of independent historians, in cooperation with the victims and their representatives, and the results published as part of a process of societal reconciliation, as done in Sweden with its ‘white paper’.

4.4   Employment

4.4.1

Roma women are in an even worse position on the labour market than Roma men; all the employment indicators are at rock bottom where they are concerned.

4.4.2

The EESC calls on the Member States to take targeted and comprehensive measures to facilitate the economic empowerment of Roma women and give them the skills they need for this purpose. Promoting social economy enterprises, introducing micro-credit programmes and ensuring free, non-discriminatory access to work-related benefits are of particular importance in combating poverty and social exclusion.

4.4.3

Entrepreneurs have grown in importance as creators of jobs and key players in the well-being of local and regional communities. This aspect is particularly relevant for Roma communities. In connection with policies concerning the needs of Roma woman entrepreneurs and SMEs, specific measures should be taken not only to empower Roma women, but also to support their initiatives with regard to community projects and business start-ups. Since a specific policy of this kind designed to support Roma women is completely lacking in most Member States, the EESC calls for a commitment to seize whatever opportunities it may offer.

4.4.4

The Committee urges the public authorities at all levels of society to organise labour market training and create sufficient numbers of jobs and subsidised forms of employment. They must provide transport allowances and assistance for ongoing and vocational training, and deploy targeted public policy tools to enable vulnerable Roma women to balance work and family life.

4.4.5

The Member States should do everything they can to remove Roma women from their vulnerable position on the labour market and to eradicate the (virtually) forced, semi-legal or illegal forms of employment to which they fall victim.

4.4.6

To this end and in view of the importance of integrating Roma women into the labour market, second-chance employment programmes should be introduced; the assistance of mediators, transport grants and training aids should also be made available to them. Moreover, no effort should be spared in rooting out workplace discrimination and educating employers in this regard.

4.5   Housing, public services

4.5.1

Where segregation exists, women and children are the worst affected by its disastrous impact on everyday life. The EESC therefore points to the need to devise minimum acceptable standards in these areas for housing, public services and infrastructure, to be applied as a fundamental right, and preferably enshrined in the constitutions of the Member States.

4.5.2

The EESC proposes that meeting these needs (by, for example, supplying drinking water, electricity, drainage and sewage facilities, paved roads and refuse collection, and making public services accessible) should be a precondition for continuing to invest in urban development and for obtaining and using subsidies.

4.5.3

Unjustified and illegal evictions must be stopped, and it must be ensured that the Roma women affected can benefit from available and accessible specific legal protection. Compensation must be possible for women traumatised by such evictions.

4.6   Removing structures of violence

4.6.1

Roma women and girls are particularly vulnerable in situations of discrimination and segregation, and easily fall victim to violence and other offences. They are disproportionately affected by all known forms of exploitation and human trafficking.

4.6.2

The Committee agrees that all forms of human trafficking and violence targeting Roma women are flagrant violations of human rights, explicitly prohibited by the Charter of Fundamental Rights of the European Union, and that the Member States should take action on this basis (6). These are serious criminal offences, driven by demand and which are, in very different ways, highly profitable for organised international crime gangs, and to which Roma women and children are disproportionately exposed.

4.6.3

The EESC hopes that the Member States will, without delay, incorporate penalties for these new and constantly-changing types of offence in their national criminal law systems, that they will take coordinated and targeted judicial measures against them, and that they will disrupt and where possible shut down the flows of profits obtained by force. The broader socio-economic context in which these offences are committed needs to be examined, areas of poverty, discrimination and vulnerability need to be identified and the social policy tools (strategic, legislative, financial, educational, research-related and other) with which to remedy them need to be deployed in a coherent way.

4.6.4

The violence to which Roma women are subject comes from both society in general and their own community. In any case, determined action must be taken against all isolated and organised forms of violence as part of a victim-centred and gender-based approach that takes account of the particular vulnerability of women and children and the special protection they should receive, which must focus on human rights.

4.6.5

The Committee is pleased that the European Commission's signature has made the EU a contracting party to the Council of Europe Convention on preventing and combating violence against women and domestic violence, generally known as the Istanbul Convention. It urges all the Member States of the EU to ratify and launch the implementation of the Convention, without reservation and with determination, taking account of the particular vulnerability of Roma women in this area.

4.6.6

Roma women and girls are, to a similarly disproportionate extent, targets and victims of hate crime, hate speech in particular. Measures should be taken to facilitate access to justice for the people concerned and, with the help of civil society organisations, to put in place tools to raise awareness on how to identify this type of criminal offence.

4.6.7

The EESC supports the geographical extension and implementation of JUSTROM, the joint Council of Europe and European Commission programme, with a view to ensuring that Roma women have access to justice.

4.6.8

The Committee draws attention to the fact that all types of institutional anti-Gypsyism and segregation can also be considered to be a form of violence. It highlights the importance of providing protection against such offences in official, state-financed services (child protection centres, social services and healthcare) and in state law and order and other such structures (police forces, criminal justice system and prisons), all of which are contexts in which Roma women are particularly vulnerable. The Committee draws attention to the importance of ensuring easy access to free legal protection in these cases.

4.6.9

National and international law must put the concept of early, forced marriage on the same footing as human trafficking and act accordingly. All the prevention and protection instruments and programmes used to combat human trafficking must be made available to the victims of forced child marriages.

4.7   Inclusion and participation

4.7.1

Roma women have very few opportunities to shape and evaluate policies that can influence their lives. The EESC therefore emphasises that it is essential, on the basis of the ‘nothing about us without us’ principle, to involve Roma women to the appropriate extent in framing, planning, implementing and evaluating all programmes that concern them or their communities. The EESC proposes that at least a majority of active Roma women should be involved as regards programmes specifically intended for Roma women, and at least 30 % as regards programmes intended for Roma communities. An evaluation system that can reliably verify these figures should be set up.

4.7.2

The EESC proposes that these participation rates should be verifiably implemented within bodies responsible for national and regional inclusion policies (national, regional and departmental coordinating councils, anti-segregation commissions, etc.).

4.7.3

The EESC calls on the governments and other authorities to undertake a fully-fledged and in-depth policy dialogue with the representatives of Roma women at all levels of social organisation and to set up the necessary official structures for such a dialogue. To this end, the Committee recommends setting up specific legal institutions, such as women’s committees within national Roma platforms, ensuring targeted representation of Roma women, or the introduction of an independent ombudsman for Roma women.

4.7.4

The Committee notes that Roma women's point of view is often lacking or under-represented in both the current European framework strategy and the national Roma integration strategies. Far greater attention should be given to the opinion of Roma women's representatives, not only under the post-2020 processes but also when shaping future social inclusion strategies.

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(1)  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12012M%2FTXT

(2)  https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12012P/TXT&from=en

(3)  http://fra.europa.eu/en/project/2015/eu-midis-ii-european-union-minorities-and-discrimination-survey/publications

(4)  OJ C 248, 25.8.2011, p. 16, OJ C 67, 6.3.2014, p. 110, OJ C 11, 15.1.2013, p. 21.

(5)  Of the many proposals so far put forward by the Roma community, civil society organisations working for Roma rights, the scientific community, international organisations and the EESC, the present opinion will mention only those of specific relevance to the application of Roma women’s rights.

(6)  Article 5(3) of the Charter of Fundamental Rights of the European Union.

Opinion of the European Economic and Social Committee on ‘Gender equality in European labour markets’

(Exploratory opinion requested by the European Parliament)

(2019/C 110/05)

Rapporteur:

Helena DE FELIPE LEHTONEN

Consultation	European Parliament, 3.5.2018
Legal basis	Rule 29(1) of the Rules of Procedure
Plenary Assembly decision	DD/MM/YYYY
Section responsible	Section for Employment, Social Affairs and Citizenship
Adopted in section	7.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	151/2/4

1.   Conclusions and recommendations

1.1.

In order to improve gender equality in labour markets, the EESC considers it necessary to draw up an integrated and ambitious European strategy to tackle systemic and structural obstacles and lead to adequate policies, measures and EU funding programmes for improving equality between women and men, thus fostering ‘more equal economic independence of women and men’. This would also contribute to the implementation of the European Pillar of Social Rights.

1.2.

This opinion reiterates the need to further tackle some well-identified challenges, such as the gender pay gap and work-life balance, and on which the EESC has already issued opinions (1).

1.3.

The EESC believes that further efforts are required to address the persistent gender pay gap. It fully supports the objectives of the Equal Pay International Coalition to work towards closing the gender pay gap by 2030. It regrets the low rate of implementation of the European Commission’s 2014 Pay Transparency Recommendation, and urges Member States and the EU to take the appropriate measures to step up implementation.

1.4.

The EESC recalls that pay transparency has an important part to play in combating the gender pay gap (2). It recommends gender neutral pay systems as a means to foster an unbiased approach to remuneration and recruitment.

1.5.

The EESC agrees with the need to enhance measures to reduce horizontal gender segregation in education, training and the labour market. Awareness raising campaigns and other measures should be carried out in order to tackle gender stereotypes and segregation in education, training and career choices, making full use of new technologies. Improved pay and working conditions in female dominated sectors could encourage more men to enter these occupations.

1.6.

More efforts should be dedicated to the labour-market integration and empowerment of women belonging to vulnerable groups, taking into account an intersectional approach (3).

1.7.

The EESC appreciates the efforts deployed by the Commission for closer monitoring of childcare and long-term care as part of the European Semester. This should remain a priority in the medium and longer term. The EESC is in favour of initiating a renewed reflection with Member States on the 2002 Barcelona targets on childcare, with a view to making the targets more ambitious and to extending the approach to care of other dependants.

1.8.

The EESC calls on the Parliament and Council to introduce new and adequate indicators in the future European Structural Funds, to better monitor the EU financial contribution to the various care services and to gender equality.

1.9.

The EESC welcomes the ESF+ proposal within the Multiannual Financial Framework for 2021-2027, which aims to support equality between men and women and to promote women’s participation in the labour market through measures to improve work-life balance and access to childcare and other care services. However, it also takes the view that EU funding should be allocated in a more gender-sensitive manner and that gender equality should be set as a stand-alone goal, rather than being merged with anti-discrimination and anti-racism objectives.

1.10.

The EESC also welcomes the InvestEU programme for 2021-2027, which supports investments in social infrastructure. The EESC calls on the Parliament and the Council to strongly support this new opportunity to trigger the necessary investments in childcare (as well as after school care).

1.11.

Female entrepreneurship is lagging behind and needs to be fostered to exploit the enormous potential of the digital economy and technological innovation. Access to finance has to be improved and transition between job statuses facilitated.

2.   Background and challenges

2.1.

This EESC opinion has been drafted in response to a request from the European Parliament for an exploratory opinion on ‘Gender equality in European labour markets’. At the request of the Parliament, this opinion considers the impact of the measures outlined in the Commission’s Recommendation on strengthening the principle of equal pay between men and women through transparency and the need for further action to tackle the gender pay gap.

2.2.

Articles 2 and 3(3) of the TEU, as well as the Charter of Fundamental Rights of the European Union, recognise that the right to equality between women and men is one of the Union’s fundamental values, and as such represents an important task. The European Pillar of Social Rights enshrines gender equality, and the right to equal pay for work of equal value, as one of the 20 principles essential for fair and well-functioning labour markets and welfare systems.

2.3.

The European Union and Member States have been promoting gender equality in the labour market through a mix of legislative and non-legislative instruments, recommendations, policy guidance and financial support. In its Strategic Engagement for Gender Equality 2016-2019, the European Commission confirmed the priorities to be tackled: equal economic independence for women and men, equal pay for work of equal value and equality in decision-making, dignity, integrity and ending gender-based violence, and promoting gender equality beyond the EU.

2.4.

In 2017, the female employment rate continued to increase at a slow but steady pace, in keeping with that of men, and reached the record of 66,5 %, as against 78,1 % for men. However, the gender employment gap, at 11,5 pps, remained unchanged since 2013. Additionally, the EU 2020 target of 75 % of women and men in employment is unlikely to be met. The Gender Equality Index score increased from 62 points in 2005 to 65 points in 2012 but only to 66,2 points in 2015, due in part to the crisis. In a number of Member States, measures to tackle the crisis did not appropriately take into account the negative impact on gender equality.

2.5.

Despite general progress in gender equality in European labour markets, inequalities between women and men persist. Horizontal and vertical segregation are important factors contributing to the unadjusted gender gap in gross hourly earnings, which currently stands at around 16 %. The gap is aggravated by the predominance of women in part-time jobs and in lower paid sectors, as well as the higher take-up by women of parental leave schemes, leading to career breaks, less career advancement and the lower accruement of pension entitlements.

2.6.

The current gender employment gap represents an important economic and social loss for the EU, estimated at EUR 370 billion a year. With the demographic challenge and the shrinking of the working age population, Europe needs to fully tap the labour market potential of all women, taking account of the intersection of race, ethnic origin, social class, age, sexual orientation, nationality, religion, sex, disability, refugee or migrant status, which can present particular obstacles to their participation in the labour market.

2.7.

While women tend to be predominantly employed in lower-paid and lower-skilled jobs and in sectors such as healthcare, social services, education, public administration and retail, men are more represented in engineering, construction and transport. The lack of men in EHW (education, healthcare and social service occupations) is increasing and is reinforced by the lack of role models and often less attractive working conditions and pay. The same goes for women who are underrepresented in STEM (sciences, technology, engineering and mathematics) occupations. In 2016, only 17 % of ICT specialists in the EU were women.

2.8.

While new EU legislation is being discussed at the EU Council (Work-Life Balance Directive), women continue to suffer from the ‘motherhood penalty’ at work, including during pregnancy and after giving birth, which continues to be a problem in many Member States. The employment gap is especially high for mothers and women with care responsibilities. In 2016, more than 19 % of inactive women were inactive because they had to look after children or adults. On average, the employment rate of women with a child under 6 is 9 % lower than that of women without children, a difference that rises to as much 30 % in some countries.

2.9.

The EESC is seriously concerned about the extent of sexual harassment encountered by women in the workplace and that cyber-harassment against women is becoming widespread. It recalls the need for better enforcement of Directive 2006/54/EC of the European Parliament and of the Council (4) prohibiting harassment and discrimination at the workplace (5).

2.10.

The EESC also calls for mainstreamed and specific measures targeting women belonging to vulnerable groups, as they often encounter greater difficulties in entering the labour market. It underlines the need for an intersectional approach, in order to increase the labour market opportunities of women facing multiple forms of discrimination.

2.11.

Female entrepreneurship is still underdeveloped. Women constitute 52 % of the total European population but only 34,4 % of the self-employed in the EU and 30 % of start-up entrepreneurs. Self-employed women are less well-off than self-employed men. 76,3 % of self-employed women in the EU28 are own account workers without employees, compared to 69 % of men. Thus, men are more often business owners with employees, while women are more self-employed without employees, with a higher risk of low income. Female creativity and entrepreneurial potential are an under-exploited source of economic growth and jobs which has to be further developed to create successful businesses.

2.12.

Part-time work can be a valuable tool to enhance the work-life balance of men and women. However women work more often part-time than men (accounting for over 70 % of part-timers) and an increase has been documented in lower paid jobs (retail sales, cleaning and helping). The levels of involuntary part-time work for both women and men continue to cause concern. The 75 % EU 2020 employment target can only be achieved through an integrated strategy composed of a coherent policy mix and measures to promote labour market participation, quality jobs, ensure equal treatment in employment and encourage more balanced care responsibilities between parents and carers of other dependent relatives.

3.   Areas for further action to achieve gender equality in European labour markets

3.1.   Addressing pay transparency to close the gender pay gap

3.1.1.

The gender pay gap is one of the most persistent barriers to gender equality in labour markets and in society and to economic growth. The EESC fully supports the Equal Pay International Coalition (EPIC), a global initiative led by the ILO, UN Women, the OECD, and including governments, employers, trade unions and civil society, with the objective of closing the gender pay gap by 2030. The EESC calls on the EU to step up its action to ensure that the gender pay gap in the EU is closed by 2030.

3.1.2.

The EESC reiterates its recommendations regarding the European Action Plan for tackling the gender pay gap (6). The EESC also acknowledges that the Gender Equality Recast Directive 2006/54/EC and the Commission Recommendation to Member States on strengthening the principle of equal pay between men and women 2014/124/EU have been instrumental in tackling the gender pay gap and remain valid. However, more efforts are needed. The 2013 Commission report on the application of Directive 2006/54/EC concluded that the practical application of equal pay provisions in Member States is one of the Directive’s most problematic areas.

3.1.3.

EPIC has stated that the lack of pay transparency plays an important role in pay differentials between men and women and that increased pay transparency can help to reduce gender pay gaps. Pay transparency has an important part to play in combating possible pay discrimination. The EESC is concerned by the low rate of implementation of the 2014 Recommendation on Pay Transparency. Although most Member States have some measures aimed at increasing pay transparency in place, in a third of Member States such measures are entirely absent. The EESC calls on Member States to step up implementation of the Recommendation, for example by foreseeing the possibility for individual to request information about pay levels or the possibility for employers in companies of a size to be defined to report on pay or conduct pay audits, as this would foster a fair approach to recruitment and remuneration. The need for full respect of employees’ (data) privacy and of general industrial relations should also be taken into account.

3.1.4.

In order to implement the equal pay principle and to tackle the gender pay gap, better synergies between different available measures are needed. Among those, gender neutral pay systems are strongly encouraged as they foster an unbiased approach to recruitment and remuneration.

3.1.5.

Social partners are the best placed to reassess the value of skills and occupations. Social dialogue and collective bargaining are instrumental in reaching this objective and in addressing the gender pay gap.

3.1.6.

At European level, the pay gap is also addressed through the European Semester. In 2017, the gender pay gap was highlighted in the country reports of 9 Member States. Country specific recommendations focusing on investment in childcare facilities and fiscal disincentives, as well as on other measures related to the gender pay gap, were addressed to 12 Member States.

3.1.7.

Particular attention should focus on raising awareness of unconscious biases or strengthening the pay gap in recruitment or promotion. Support from business organisations, along with cooperation between social partners, authorities and equality bodies in finding adequate solutions, are also relevant for reducing the gender pay gap.

3.2.   Education, segregation and stereotypes

3.2.1.

Persistent horizontal segregation in education, training and the labour market, driven by stereotypes and barriers in the labour market need to be addressed from early childhood onwards. There is a strong link between such segregation and the gender pay gap. The tendency to undervalue certain professions, including in leadership positions, should be more clearly highlighted. Better pay and working conditions in female dominated sectors could act as an incentive for more men to enter these occupations, thus also helping to address the issue of occupational gender segregation.

3.2.2.

Despite higher female achievement in education, women face numerous barriers in pursuing carriers in certain male dominated sectors, such as ICT. Even if some girls opt for an education in STEM, only 10 % of women pursue a career in these fields afterwards. This requires a stronger emphasis on tackling segregation and stereotypes in education and better promoting the sector among women.

3.2.3.

The lack of men in the education, healthcare and welfare (EHW) sector is assuming worrying proportions. The EESC calls for awareness raising campaigns and promotion of role models at EU and national levels to encourage ICT and STEM professions among women and EHW ones among men.

3.3.   Care services to enhance work-life balance

3.3.1.

Combining work, private and family life is one of the main challenges for parents and others with caring responsibilities. Women are disproportionally affected as they generally bear the responsibility for caring for dependant relatives. Achieving better work-life balance is especially challenging for single households and people belonging to vulnerable groups. The EESC welcomed the Commission initiative to increase the labour market participation of parents with children and help them to achieve a better work-life balance.

3.3.2.

Sharing parental and other caring responsibilities is an important objective for equal participation in the labour market (7). Fathers’ take-up of paternity and parental leave is generally low and they usually take leave only when it is paid. It is essential to take measures that encourage men to engage more in family life, while addressing possible costs and organisational efforts for r enterprises, especially small and micro-enterprises.

3.3.3.

As care responsibilities are one of the main reasons for low female labour market participation, the Barcelona objectives are of crucial importance, but they have not been sufficiently met. Evidence shows a positive correlation between childcare facilities and the female employment rate. The EESC regrets that, more than 15 years after their adoption, such a low number of countries have reached the Barcelona targets. It calls for a possible revision to set more ambitious targets as an incentive to foster gender equality.

Affordability and accessibility of childcare and other care services remain a challenge, especially for lower income families. A good mix of quality public and private care facilities is therefore important. Additionally, childcare facilities’ opening hours remain a real obstacle for working parents.

3.3.4.

The EESC also draws attention to the need for out-of-school care facilities for children of working parents. They should be available in countries where the school day finishes early and parents tend to opt for part-time work to fill the gap. More data should be available to understand the extent and consequences of this structural problem on gender equality in the labour market.

3.3.5.

The growth of the care sector, with important untapped job potential, requires special attention due to persistent gender segregation and, in many cases, poor working conditions and low pay. As already requested by the EESC, there is a need to gather adequate data on the different aspects of paid care systems and preferences in Europe. This should include the rapidly expanding homecare services and the specific case of live-in care workers (8), many of whom experience intra-EU mobility or are migrants from third countries and report poor working conditions and pay. The EESC calls on the Commission to adopt an integrated strategy for the care sector.

3.3.6.

The EESC appreciates the efforts of the Commission for closer monitoring of childcare and long-term care, as part of the European Semester and the country specific recommendations addressed to Member States.

3.4.   Financing gender equality: the Multiannual Financial Framework

3.4.1.

The EESC welcomes the ESF+ proposal within the Multiannual Financial Framework for 2021-2027, which aims to support equality between men and women, equal opportunities and non-discrimination, and to promote women’s participation in the labour market through measures to improve work-life balance and access to childcare. The EESC encourages the EU institutions and Member States to implement its recommendation for the ESF+ to support gender equality (9).

3.4.2.

The EESC takes the view that EU funding should be allocated in a more gender-sensitive manner. The EESC is concerned that the merging of the gender equality, anti-discrimination and anti-racism objectives into one single objective undermines their visibility and the clarity of the amounts allocated to each of them. Thought should be given to the best way of addressing this.

3.4.3.

The EESC stresses the need for investment in high-quality, affordable and accessible care services and facilities for all. The Commission proposal for the ESF+ is a step in the right direction by investing more in childcare. This financing should be further promoted, building on good practices to be compiled by the Commission.

3.4.4.

The EESC also welcomes the InvestEU programme as part of the Multiannual Financial Framework 2021-2027 and its priority on boosting investments in social infrastructure, which could have a positive impact on gender equality.

3.4.5.

The EESC is concerned that there is currently no assessment of how EU funds have been used by Member States to support the provision of care services. This must be addressed in the next funding programmes, by introducing adequate indicators for Member States in the future Structural Funds, including the ESF+, to better monitor the EU financial contribution to the various care services and gender equality.

3.5.   Tax and benefit systems

3.5.1.

Available evidence indicates that women often face strong economic disincentives when entering the labour market or wanting to work more: the way tax-benefit systems are set-up can act as a deterrent for second earners, most often women. Direct consequences of this are lower or no contributions paid into pension systems, which subsequently results in lower pension income and even poverty.

3.5.2.

The European Semester has already highlighted the need to adapt tax-benefit systems to prevent strong disincentives for those second earners wishing to take-up a job or to work more. Close monitoring of developments in the Member States will be necessary.

3.6.   Female entrepreneurship

3.6.1.

Entrepreneurship can be an opportunity for women’s economic independence with quality jobs, successful careers, lifting women out of poverty and social exclusion, and contributing to a more balanced gender representation in decision-making. Female entrepreneurship must be supported by improving access to and quality of social protection measures (10) and by mainstreaming entrepreneurship education into education and training.

3.6.2.

With regard to self-employment, women are more often own-account workers facing a higher risk of in-work poverty, while more men are among owners of companies with employees. Women are also faced with more structural barriers with regard to access to finance, stereotypes and lack of confidence. Such obstacles need to be removed. Mentoring business angels and new forms of financing can be useful to overcome barriers. Existing networks in business organisations should be more actively promoted and disseminated.

3.7.   Digital economy

3.7.1.

Changes in the labour market, due to globalisation, technological developments and demographic change provide new perspectives for employees and entrepreneurs alike. Emerging and growing sectors (e.g. ICT, green economy, industry 4.0, e-commerce) can offer many opportunities for women in well-paid jobs. The EESC has also highlighted the problem of the digital gender gap posing a range of challenges that need to be addressed. It has also provided recommendations to overcome imbalances in relation to education systems and the labour market (11).

3.7.2.

To ensure that women and men can operate with confidence in the digital economy, there is a need for greater clarity of status at national level regarding rights, social security entitlements and obligations both in work and in B2B-contracts. Education and training should be at the centre of strategies for promoting ICT, STEM and green careers for women and the gender perspective should be mainstreamed into the Digital Single Market Strategy.

3.8.   Enhanced cooperation between all actors

3.8.1.

The role of social partners in negotiating collective agreements is an important means for tackling the multiple dimensions of gender equality and equal pay in European labour markets. At EU level, the social partners adopted a Framework of Actions on Gender Equality in 2005 followed up by joint actions at national level to address gender roles, promote women in decision-making, support work-life balance and tackle the gender pay gap. In 2008 they revised their 1996 Parental leave agreement (Council Directive 2010/18/EU (12)) and in 2012, they developed a toolkit for enhancing gender equality in practice.

3.8.2.

Civil society organisations can also usefully contribute to promoting gender equality in the labour market, in particular for vulnerable groups.

3.8.3.

The EESC calls for a renewed and ambitious strategy at EU level for achieving gender equality in European labour markets, to be framed coherently within any future European employment strategy, the European Pillar of Social Rights and the European dimension of the UN Agenda 2030 for Sustainable Development.

---

(1)  OJ C 129, 11.4.2018, p. 44, OJ C 262, 25.7.2018, p. 101.

(2)  OJ C 129, 11.4.2018, p. 44.

(3)  OJ C 367, 10.10.2018, p. 20.

(4)  OJ L 204, 26.7.2006, p. 23.

(5)  OJ C 351, 15.11.2012, p. 12, OJ C 242, 23.7.2015, p. 9, OJ C 367, 10.10.2018, p. 20.

(6)  OJ C 262, 25.7.2018, p. 101.

(7)  OJ C 129, 11.4.2018, p. 44.

(8)  OJ C 487, 28.12.2016, p. 7.

(9)  See the EESC opinion on the ‘European Social Fund+’ (OJ C 62, 15.2.2019, p. 165).

(10)  OJ C 173, 31.5.2017, p. 45.

(11)  OJ C 440, 6.12.2018, p. 37.

(12)  OJ L 68, 18.3.2010, p. 13.

Opinion of the European Economic and Social Committee on ‘Implementation of EU environmental legislation: air quality, water and waste’

(exploratory opinion)

(2019/C 110/06)

Rapporteur:

Arnaud SCHWARTZ

Referral	European Parliament, 3.5.2018
Legal basis:	Article 304 of the Treaty on the Functioning of the European Union
	Exploratory opinion
Bureau decision	17.4.2018 (in anticipation of the referral)
Section responsible	Section for Agriculture, Rural Development and the Environment
Adopted in section	27.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	117/2/6

1.   Conclusions and recommendations

1.1.

The EESC welcomes the purpose of the Environmental Implementation Review (EIR), which is to provide an informed picture of where each Member State stands, identifying their main shortcomings in implementing EU environmental legislation, as well as to recommend remedial measures and to provide support to those Member States lagging behind in terms of implementation, in particular through a new peer-to-peer tool for technical assistance.

1.2.

In its opinion (1) on this subject however, the EESC considers that the EU EIR reveals that poor, fragmented and uneven implementation of the EU environmental legislation is a serious problem in many EU Member States. Both now as in the past, behind the root causes of poor implementation identified in the EIR there still appears to be a lack of political will on the part of many Member State governments to make substantial improvement a political priority and to provide sufficient resources (e.g. through the multiannual financial framework — MFF). The EESC therefore recalls that proper implementation of the EU’s environmental acquis is in the interest of European citizens and has real economic and social benefits.

1.3.

Similarly, as argued in the above-mentioned opinion (2), the EESC reiterates that effective implementation of environmental protection measures hinges partly on civil society — employers, workers and other representatives of society — being granted an active role. The EESC consequently repeats its call for stronger and structured involvement of civil society, which would have the potential to strengthen EIRs. For the EESC, civil society organisations at national level must be given the opportunity to contribute their expertise and insight to the country reports as well as to the structured country dialogues and the follow-up to them. For this reason, the EESC is ready to facilitate civil society dialogue at EU level in the framework of a truly sustainable and circular economy.

1.4.

In its opinion on the EU action plan to improve environmental compliance and governance (3), the EESC again stresses that current shortcomings are undermining people’s trust in the effectiveness of EU legislation, and renews its call for the Member States and the Commission to mobilise substantial funding for the recruitment of additional staff, in order to monitor the implementation of environmental governance and legislation.

1.5.

The EESC underlines that in some cases, environmental investments, awareness raising of the public or strong enforcement chains are also needed and that even if environmental inspectors already exist, Europe and its Member States also need specialised judges and prosecutors.

1.6.

The EESC also points out that, as indicated in its opinion (4), in addition to action with regard to the relevant Member States and public, aimed at communicating and raising awareness of the rules to be complied with, measures must be taken relating to monitoring and enforcement at EU level by the Commission as ‘guardian of the treaty’. The action plan (5) fails to address reasons for non-compliance with the rules such as opportunism or lack of political will. While it is necessary to support the Member States, the EESC once again points out that the soft measures of this action plan cannot be the sole strategy for improving environmental compliance.

1.7.

Both the EIR and the action plan follow a two-year cycle. The EESC emphasises that it should play an active role in monitoring and developing their content, so that the voice of civil society is heard in the ongoing process of improving the EU’s environmental policies.

1.8.

Moreover, since a number of European Commission documents show that many shortcomings are due to a lack of cooperation between different governance levels (national, regional, local) response for implementing environmental legislation, the EESC also urges the EU to involve civil society in the ongoing monitoring and evaluating of this implementation.

1.9.

EU citizens consider environmental protection to be of crucial importance. The majority of citizens however think that the EU and national governments are not doing enough to protect the environment. The Council, Parliament and Commission should consequently work together more closely with the EESC’s help to meet people’s expectations. More specifically, this ambition could take the form of requesting the EESC to draw up an exploratory opinion on how civil society could contribute more to drafting and applying EU environmental legislation.

1.10.

In immediate terms, the EESC calls on the Commission to share the EIR’s list of all identified shortcomings per Member State in the implementation of EU environmental legislation regarding air quality, water and waste. The list should be based in part on indications made to the Commission, and on consultation with organised civil society. It also calls on the Commission to define and subsequently apply remedies to correct these failings. The EESC, to the extent of its means and expertise, is willing to contribute to this definition and to take part in evaluating the future implementation of such remedies.

1.11.

The EESC considers that the Commission should not only propose legislation, but also facilitate and support the application of law, and also make existing texts more consistent with each other and bring them more into line with scientific advances and international commitments intended to protect public health and restore the proper functioning of ecosystems. Without these ecosystems neither economic development nor social justice is possible. In particular, the implementation of environmental legislation is essential for the achievement of the UN Sustainable Development Goals (SDGs) and to put climate agreements into practice. Consequently, the EESC draws the attention of the competent authorities to a number of examples of improvements to environmental legislation concerning air, water and waste in this opinion.

1.12.

Lastly, in the light of the recent proposal for a directive on single-use plastics, it appears certain that the high level of acceptance of the proposed measures is due to the information and media measures on plastic pollution of the oceans, which have brought about greater citizens’ awareness of the problem. The EESC considers that the same applies for many other measures capable of providing people living in the EU with a healthy place to live and adaptation to climate disruption, and of halting the collapse in biodiversity. In this regard, the EESC restates the need for the committed participation of civil society in favour of population education and the expected redoubling of efforts by European, national and local authorities to making the public, together with public and private decision-makers (in particular in SMEs-SMIs), to these major challenges of the 21st century.

2.   General comments

2.1.

The European Economic and Social Committee (EESC) welcomes the European Parliament’s (EP) openness to collaboration represented by this request for an exploratory opinion on the implementation of EU environmental legislation in the areas of air quality, waste and water.

2.2.

The implementation of EU environmental legislation in the areas of air quality, waste and water relates in particular to the protection of ecosystems; it also opens up new economic opportunities and developments benefiting the health of Europeans. Implementation not only raises the issue of transposing directives into domestic law — this is only the initial step — but also entails the establishment of the necessary public authorities or the provision of existing means in terms of human resources, skills and responsibilities, expertise and financial means. Environmental investment (public and/or private) is needed in many cases (e.g. for water and waste treatment) and, in others, activities having a negative environmental impact must be regulated (e.g. to safeguard air quality).

2.3.

An improvement in implementation of EU environmental legislation should become a priority in all Member States, and the public authorities responsible for these matters should be reinforced. Many previous EESC opinions have made recommendations in this regard and, more broadly, concerning the implementation of existing EU environmental legislation in the areas of air quality, water and waste. The EESC therefore draws attention to these, covering individually air (6), water (7) and waste (8).

2.4.

In addition to these opinions on specific topics, some broader-based EESC opinions also have recommendations that may be relevant to the present request. These include opinions on access to justice (9) or the current implementation of legislation and governance (10) and protection of the collective interests of consumers (11), opinions of a strategic nature (12), and those looking beyond the European Union’s borders and dealing with, for example, Sustainable Development Goals (SDGs) (13), free trade agreements (14) and climate (15).

2.5.

It is clearly necessary to implement existing law that facilitates the establishment of a single market that is conducive to free and undistorted competition and that merits the trust of citizens, be they producers or consumers — a law that can deliver high standards of quality and safety as regards the protection of populations and their environment. In addition to this, however, it seems essential to seek to mitigate the shortcomings of the existing legislation by also ensuring that the EU systematically secures, in bilateral or multilateral trade negotiations, the equivalence of its social and environmental legislation for imported products.

2.6.

With this in mind, all the observations, conclusions and recommendations set out in this exploratory opinion must be seen not as a risk, but as an opportunity to steer our work in such a way as to create advantages, whether competitive or cooperative, that offer direction and a future in economic, social and environmental terms.

2.7.

Finally, whether it concerns air, water or waste, disparities between Member States in the application of EU law must be avoided. If not, this will lead to distortions in competition, environmental and social inequalities or artificial barriers that hinder the management of resources that are shared and by their very nature cross-border. Therefore, to strengthen all existing and future measures, we should find ways to achieve harmonisation of taxes on pollution and resources and respond to the need to better calibrate the existing tools in line with the externalities to be covered. Environmental policies should no longer serve as an adjustment variable but become a key lever for a strategic shift of direction for human, craft, agricultural and industrial activities within the Union and, through positive spillover effects, also in other regions that are home to its political and trading partners.

3.   Specific comments

3.1.   The implementation of EU environmental legislation in the area of air quality

Together with water, nature and waste, air quality is one of the sectors with the highest number of infringement cases. In May 2018, the Commission stepped up enforcement against six Member States who breached EU rules on air quality, referring them to the Court of Justice (16). The EESC acknowledges that the Commission is currently undertaking a Fitness Check on the air quality directive, assessing the performance of the AAQ Directives in the period 2008-2018. In particular, efforts to improve the implementation of outdoor air quality legislation would contribute to SDG 11 on sustainable cities.

As far as air quality is concerned, we should also remember that atmospheric pollution has a threefold effect:

1)

on health, to such an extent that air pollution inside and outside remains a major risk factor within the European Union (17) and elsewhere. It is even, in fact, the principal health and environmental risk in the world (18), with 6,5 million premature deaths a year and a high cost to society, health systems, the economy and all those whose health it affects. A recent report by the European Court of Auditors on air pollution estimated the number of premature deaths at some 400 000 annually, noting that the health of European citizens is not always sufficient protected and that EU action has not had the expected effects;

2)	on biodiversity (effects on crops, forests, etc.);

3)	on contemporary and, of course, historical buildings, themselves connected with tourism.

3.1.1.   Indoor air

a)

To improve the quality of indoor air, consumers should be made aware, through labelling, of the emissions of products purchased, be it, for example, construction materials, products for decoration, furnishing or household products. To this end, the EU should compare the laws of its Member States and adopt a coherent framework based on existing best practices.

b)	Once a building has been finished and delivered, there should be an obligation to maintain and regularly monitor the quality of ventilation. This long-term monitoring of buildings would obviously have a beneficial impact not just on health, but also on energy.

c)	In order to protect vulnerable sections of the population, including those whose respiratory systems are impaired or still developing and need better air quality, action plans should be implemented to this end in establishments frequented by the general public and especially young children.

d)	Finally, it would be useful to harmonise practices in air purification. The EU should provide a definition of criteria for measuring their efficacy and safety, in order to avoid, for example, any commercial or health deviation in consequence of the relative lack of rules at this time.

3.1.2.   Outdoor air

a)

Achieving better air quality and increased trust between citizens and the European institutions requires not just that current regulations are applied more rigorously and their flouting more severely penalised, but also that the standards laid down in EU directives finally incorporate the missing recommendations of the World Health Organization (WHO) when these offer greater protection for people’s health.

b)

Today, only PM10 and PM2,5 particles (micrometre scale) are monitored. However, in terms of health, some ultrafine particles (UFPs) have much greater effect (nanoscale) because they penetrate more deeply into the human body and can accumulate in the organs. European legislation would therefore need to take this reality on board and provide for these particles to be monitored so that their presence in the air is also gradually decreased.

c)

The same should be done for polycyclic aromatic hydrocarbons (PAH) and various other pollutants that are not already monitored, including those linked to incinerators, ships, land vehicles, construction plant etc., especially since continued advances in scientific knowledge and technical capabilities would make it possible to achieve better health and ecosystem protection even now.

d)

Here, the directive on national emission ceilings (NEC) (19) is essential in order for Member States to reduce their air pollutant emissions. However, it only proposes indicative measures according to the principle of subsidiarity in order for the Member States to comply with the emission reduction commitments. The implementation it provides for is so elastic as to make its regulatory effect far too weak.

e)	There is also room for improvement insofar as the directive did not propose a methane emission reduction target, a source of air pollution that is essential, since it is an ozone precursor, as well as a very powerful greenhouse gas.

f)

In order to ensure harmonisation across the different EU regulations, the Common Agricultural Policy (CAP) should introduce targets on air pollution from the agricultural sector. This sector is responsible, for instance, for over 95 % of ammonia emissions, a pollutant covered by the NEC directive. The CAP should provide adequate tools for the Member States to reach their reduction targets in this area.

g)

Finally, it should be remembered that the quantification of pollutants is currently based on weight (μg/m3), even though, for many years now, toxicologists have argued strongly at scientific fora that it would be better to quantify them by number of particles. Such an approach makes all the more sense because we are dealing with ultrafine elements that we breathe (20).

3.2.   The implementation of EU environmental legislation in the field of water policy

As regards water, it should be pointed out that, while the Framework Directive is generally satisfactory, its implementation remains weak and most Member States have failed to establish the good environmental status expected in 2015. The same can be said in respect of Natura 2000, as a result of the widespread failure of the contractual instrument. Various improvements and new features could be introduced, particularly given scientific progress on soil functioning, on the one hand, and the dispersion and interaction of certain pollutants, on the other. This will be examined below. Progress in implementation of EU legislation on water would help achieve several targets related to SDG 6 on clean water and sanitation.

One of the most critical areas related to water is the implementation of the Urban Waste Water Treatment Directive, where there are strong differences in compliance among Member States, due to a combination of governance issues and funding. Although the Commission has made major efforts in the current mandate, there are still considerable financing needs in this area, as well as governance-related problems to solve. Based on the proven experience of solid waste management, new ways of making producers responsible for financing supplementary waste water treatment aiming at capturing emerging pollutants — such as pharmaceuticals and micro plastics — should be developed.

3.2.1.   Surface water

a)

To improve the state of surface waters, and also to avoid reversals in environmental law and governance, it would be better to define certain concepts such as ‘ecological continuity’, ‘watercourses’ and ‘wetland’. It is essential, for example, that the rules defining wetlands are specified at European level, since an approach based solely on the purpose of protection is too complex to be effectively transposed into national law, at least in some Member States.

b)	Similarly, it would be useful to have a unified framework for conducting assessments that is clear and shared by all the stakeholders involved in the implementation of the relevant legislation.

c)

Whether we are talking about nanoparticles — for example, from the textile and agri-food industries — or endocrine disruptors — such as those from the pharmaceutical industry and agriculture –, their dissemination in the environment should be reduced at source and limits established that are not to be exceeded in surface waters and groundwater in the light of their impact on ecosystems, and in particular on food chains that include humans. To this end, the means should finally be adopted of determining, including over the longer term, the cocktail effect thresholds between these substances, the various substances already monitored and their degradation by-products.

3.2.2.   Groundwater

a)

Regarding the legislation on water, the provisions on the recovery of the costs incurred by the various categories of users, the internalisation of external costs and a charging scheme in line with costs — as set out in the Directive establishing a framework for Community action in the field of water (21) — are neither sufficiently binding nor sufficiently detailed to be effective enough.

b)

With climate change, groundwater recharging may become all the more problematic. This is because in some places urban design or agricultural practices are leading to an undesirable rupture in the water cycle because of sealed soils or soils with insufficient biological activity which promote surface run-off, erosion and mud slides, rather than infiltration, purification and natural storage. To stop these phenomena getting worse, the Union must adopt regulation to promote living soils. This would also have the advantage of addressing problems of quality and quantity of water available for both ecosystems and human consumption, and for agricultural and industrial activities.

c)

Given their role in triggering rain by evapotranspiration, as well as in filtering, purifying and storing water in soil and water tables, far more attention should be paid to forests and hedges, and also, to a lesser extent, permanent grassland and arable land left unploughed over the long term. These should also, where feasible, be present and spread throughout Europe — all the more so because they are also a considerable help to other living creatures, including many crop auxiliaries, in dealing with temperature spikes and other extreme weather events that are becoming increasingly common.

3.2.3.   Directive establishing a framework for Community action in the field of water policy

With a view to better implementation of the Water Framework Directive, it would be expedient to change this regarding certain aspects touched on above and bearing on the following points:

a)	The status of water in the preamble — ‘Water is not a commercial product like any other’ — should be replaced with ‘Water is not a commercial product’.

b)	Given the status of water in Europe, application of the principles of prevention and precaution requires the repeal of all exemptions — those set out in Article 4(5) and Article 7(4), for example.

c)	Because of the status of water, an environmental assessment must be required for all projects that are likely to affect water and aquatic environments. The ‘simplified assessment procedure’ (Article 16) should be removed.

d)

The polluter pays principle, and especially its implementing rules, should be reviewed, with: — a reformulation of Article 9: the wording ‘Member States shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis conducted according to Annex III, and in accordance in particular with the polluter pays principle’ should be replaced with ‘Member States shall implement the recovery of the direct and indirect costs of the impact of human activities on water in accordance with the polluter pays principle’; — deletion of the exceptions referred to in Article 9(4); — addition of all the sectors, indicating the three areas (agriculture, industry, households) for which Member States must draw up rules to eliminate the externalisation of costs. An annual report would set out, by sector, how to implement this process.

e)	It would also be necessary to replace all expressions of the type ‘ensure that’ with a real obligation (for example, in Article 11, paragraph 5 or Article 14, first paragraph).

f)	Similarly, it would appear necessary to lower the threshold values of pollutants, including in combination with other directives (on nitrates, chemicals, etc.), and to update the priority substances (for example by including perfluorinated compounds, nanotechnologies, etc.).

g)	Public participation (Article 14) needs to be improved, primarily with regard to planning. It should be extended to programmes of basic and supplementary measures as well as all prior administrative checks.

h)	Concerning litigation (Article 23), it should be added that, in accordance with the Aarhus Convention, the Member States must introduce rules and procedures on public access to litigation concerning water.

3.3.   The implementation of EU environmental legislation in the field of waste

The Impact Assessment underlying the recently-adopted waste legislation identified several problems with implementation: legal/regulatory, as well as issues related to governance and awareness-raising. Shortcomings in implementation of the Waste Framework Directive are often due to the lack of economic instruments, e.g. those making recycling more attractive than landfilling. However, setting up such economic instruments can be problematic for municipalities. Local authorities often do not have the capacity to translate EU measures and instruments at local level, which points to an issue of governance. Enforcement is also a major problem in several Member States. The EESC acknowledges that the Commission has worked in recent years with Member States to address such shortcomings in implementation, for example providing technical support and specific guidelines on what needs to change through the two compliance promotion exercises undertaken in 2012 and 2015.

The newly adopted legislative proposals on waste should solve some of the problems with implementation and help contribute to SDG 12 on sustainable consumption and production, but issues related to governance and enforcement still have to be dealt with at national level. Together with the Commission, the EESC has set up a European Circular Economy Stakeholder Platform which has already achieved significant results, facilitating collection, exchange and dissemination of expertise and good practices existing among the various stakeholders. This platform is a key tool which deserves to be more widely used to encourage the implementation of EU legislation in this area.

3.3.1.   Waste prevention

a)

The recent review of waste policy (22) is an opportunity to give strong backing to measures to reduce our needs at source (including our demand for raw materials and secondary raw materials), as well as the creation of future waste, in particular that hazardous for ecosystems and human health. This means that we have to question our needs and the things we produce and how we design them, to make them last longer and then transform them with the least possible loss in material, which will have an impact generally on the environment, energy sovereignty and economic sustainability.

b)	So that we can talk of ‘sustainable materials’ instead of ‘waste’ and of a circular economy, we must, from the very product design stage, remove toxic and dangerous components that will complicate any future recycling phase.

c)	When it comes to packaging, sobriety should prevail and further progress should be as great as possible, gradual and mandatory in order to avoid any distortion of competition towards different take-back and re-use schemes, existing and to be developed.

d)	The ability of our societies to re-use and repair our products is itself one of the ways of preventing waste. To achieve this, there should be ambitious legislation with mandatory targets that must be achieved rather than just voluntary measures.

e)	In order to decouple economic development from the consumption of natural resources and environmental impacts, the EU needs to set itself more ambitious targets in order to increase resource efficiency in our production systems.

3.3.2.   Waste management

a)

In order to gain and maintain the confidence of the population — producers as well as consumers —, the circular economy must regularly take on board the latest scientific knowledge and so insure itself against any future scandals, including public health scandals, arising from the concentration or dispersion of pollutants in recycled materials (bromine or endocrine disruptors, for example) or the environment (nano- or microplastics).

b)	This will be all the more credible and effective if, to improve recycling rates for all types of materials, traceability of their components has been put in place at the production stage and if the greatest possible transparency has been ensured up to the point where they reach the consumer.

c)

The same level of protection for human health and the environment should therefore apply to recycled or virgin materials within the European Union. The use of recyclable materials should not allow the use of dangerous chemicals in higher concentrations to continue. As a result, when restrictions and limits for chemicals under the REACH regulation (23) are set, the European Chemicals Agency should lay down the same limits for recycled materials. Materials that do not comply with these limits must be processed so that the substance is withdrawn or rendered ineligible for re-use or recycling.

d)	Above and beyond eco-design, to which smartphones and other electrical and electronic products should be subject, the EU should frame and carry out a waste management policy worthy of the name within its borders rather than sending waste abroad.

e)

It is clear from the life-cycle analysis (LCA) that all recycling options are better than incineration (in particular because of the embodied energy, in plastics for example) except for wood in some special cases, and also for some hazardous waste products/materials. This, like landfilling, must gradually disappear and ambitious targets must be set to this end.

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(1)  Opinion on the EU Environmental Implementation Review (OJ C 345, 13.10.2017, p. 114).

(2)  See footnote 1.

(3)  Opinion on EU actions to improve environmental compliance and governance (OJ C 283, 10.8.2018, p. 83).

(4)  See footnote 3.

(5)  COM(2018) 10 final.

(6)  Opinion on A Clear Air Programme for Europe (OJ C 451, 16.12.2014, p. 134) and on Freeing the EU from asbestos (OJ C 251, 31.7.2015, p. 13).

(7)  Opinion on An Action Plan for nature, people and the economy (OJ C 129, 11.4.2018, p. 90); on International ocean governance: an agenda for the future of our oceans (OJ C 209, 30.6.2017, p. 60) and on Quality of water for human consumption (OJ C 367, 10.10.2018, p. 107).

(8)  Opinion on Restrictions on hazardous substance (RoHS) (OJ C 345, 13.10.2017, p. 110); on Options to address the interface between chemical, product and waste legislation (OJ C 283, 10.8.2018, p. 56); on A Strategy for plastics in a circular economy (including the treatment of waste from ships) (OJ C 283, 10.8.2018, p. 61); on The role of waste-to-energy in the circular economy (OJ C 345, 13.10.2017, p. 102); on the Circular Economy Package (OJ C 264, 20.7.2016, p. 98).

(9)  Opinion on Access to justice in environmental matters (OJ C 129, 11.4.2018, p. 65).

(10)  See footnote 1 and footnote 3.

(11)  Opinion on a New Deal for Consumers (OJ C 440, 6.12.2018, p. 66).

(12)  Opinion on The transition towards a more sustainable European future (OJ C 81, 2.3.2018, p. 44) and on New sustainable economic models (OJ C 81, 2.3.2018, p. 57).

(13)  Opinion on the 2030 Agenda — a European Union committed to sustainable development globally, adopted 20 October 2016 (OJ C 34, 2.2.2017, p. 58) and on the core role of trade and investment in meeting and implementing the SDGs (OJ C 129, 11.4.2018, p. 27).

(14)  Opinion on Trade and sustainable development chapters in EU Free Trade Agreements (OJ C 227, 28.6.2018, p. 27).

(15)  Opinion on The Paris Protocol — A blueprint for tackling global climate change beyond 2020 (OJ C 383, 17.11.2015, p. 74) and on Climate Justice (OJ C 81, 2.3.2018, p. 22).

(16)  http://europa.eu/rapid/press-release_IP-18-3450_en.htm.

(17)  According to the European Environment Agency.

(18)  According to the WHO.

(19)  NEC Directive.

(20)  https://www.sciencedirect.com/science/article/pii/S0048969711005730?via%3Dihub

(21)  Water Framework Directive.

(22)  http://ec.europa.eu/environment/waste/target_review.htm.

(23)  REACH regulation — Regulation (EC) No 1907/2006 of the European Parliament and of the Council (OJ L 396, 30.12.2006, p. 1, as amended in OJ L 136, 29.5.2007, p. 3).

Opinion of the European Economic and Social Committee on ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — A European retail sector fit for the 21st century’

(COM(2018) 219 final)

(2019/C 110/07)

Rapporteur:	Ronny LANNOO
Co-rapporteur:	Gerardo LARGHI

Consultation	European Commission, 18.6.2018
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	21.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	171/3/2

1.   Conclusions and recommendations

1.1.

The European Economic and Social Committee (EESC) welcomes the Commission’s communication on modernising the retail sector. The Committee stresses once again the economic and social importance of the retail sector for all the stakeholders and for society as a whole (1). The EESC points out that it has already recommended in previous opinions the creation of an open economic environment, aimed at ensuring fair competition, to generate the conditions for the positive coexistence of and cooperation among large, medium, small and micro retailers.

1.2.

The defence and promotion of diversity in the retail sector is crucial in order to meet consumers’ needs and to defend and promote the European productive system. The EESC therefore thinks a balance needs to be struck between measures in favour of large retailers, set out very clearly in the communication, and corresponding ones that meet the needs of micro and small enterprises.

1.3.

The EESC notes that the Commission’s proposal focuses too much on ‘price’ as the most interesting element for consumers, to the detriment of other key aspects such as information, product quality and personalisation, proximity, mobility, the circular economy and durability, value for money and service received before or after purchase. Diversification of products should be properly protected by the Commission in the interests of all parties.

1.4.

The Committee believes that the right of establishment should be addressed in accordance with the subsidiarity principle and that the best way to address the needs of all the stakeholders involved is through reaching agreement at national, regional and local level.

1.5.

In particular, the EESC thinks that some barriers to freedom of establishment and some operational restrictions, as currently present in some Member States, act as a barrier to the establishment of new enterprises, but that full liberalisation does not ensure the necessary balance between large companies, small businesses and family businesses.

1.6.

The EESC considers that national regulations on shop opening hours and working times are crucial in ensuring a level playing field among different-sized businesses and above all in guaranteeing adequate social protection to both the employed and the self-employed, also taking account of changes in consumer habits.

1.7.

The EESC reiterates that reaching agreement at national or subnational level is the best way to establish opening times and days, to reconcile the needs of consumers to have access to particular products and services and the desire of some businesses to open on Sundays and holidays, while also ensuring a balance between work and family life for entrepreneurs and employees, and providing for time set aside for training.

1.8.

The EESC also points out, in line with the Social Pillar, the need to guarantee fair remuneration and quality of work to all workers in the sector, whether online or offline. It draws attention, in particular, to the case of the labour contracts of thousands of those working for online businesses that are still not covered by collective bargaining, as well as to the contracts in large retailers designed only to cater for greater customer footfall at weekends (resulting in an increase in casual contracts) or which do not count weekends or nights as overtime. Finally, in the EESC’s view, the creation of an effective social dialogue mechanism that also involves small and micro enterprises would give businesses better development opportunities and workers a better system of safeguards.

1.9.

The Committee agrees with the Commission on the need to encourage and support innovation in the retail sector, lifelong learning for employers and workers, and product promotion over the long term. However, it thinks that, alongside the Commission’s proposal, there should be a roadmap to accompany this process in the context of the digital transition, with appropriate funding and a particular focus on small and micro enterprises in collaboration with SME-representing organisations.

1.10.

The EESC calls on the authorities at all levels to engage in close cooperation with all the stakeholders with a view to drawing up a specific action plan on the future of European retail in the 21st century (i.e. information, training, financing and good practices, etc.).

2.   Gist of the Commission document

2.1.

The Communication aims to contribute to unlocking the potential of the retail sector for the EU economy by identifying best practices. Efforts are therefore needed on the part of the EU institutions and Member States to support the competitiveness of the sector at a time when it is being transformed by the rapid growth of e-commerce and the transformation of consumer habits.

2.2.

For the Single Market to deliver, appropriate action must be taken at all levels. The productivity of the EU retail sector has been lagging behind other sectors. This is due to the accumulation of tax regulations at all levels and to a delay in the transition to the digital market.

2.3.

Retailers face numerous restrictions with regard to the establishment of shops and operations. Many of these restrictions are justified by legitimate public policy reasons. They may also create barriers for start-ups and productivity.

2.4.

The opening of new commercial outlets is a crucial element for the viability of the sector. It is important to be able to pursue strategies with regard to market access that combine an online and an offline presence. Simple, transparent and efficient establishment procedures offer opportunities for the retail sector to improve its productivity.

2.5.

The Commission recommends that Member States assess and modernise, if necessary, their regulatory frameworks, taking inspiration, where relevant, from best practices already developed in other Member States.

2.6.

Operational restrictions usually affect mainly brick-and-mortar retailers. Public authorities should assess the balance, proportionality and efficiency of such restrictions to ensure a level playing field with e-commerce.

2.7.

The cost of compliance is between 0,4 % and 6 % of retailers’ annual turnover. For micro-companies, this is a particularly heavy burden. Fostering the development of the retail sector to the ultimate benefit of consumers requires a broad approach: simplifying regulatory frameworks, ensuring that they are fit for a multi-channel environment as well as reducing the overly burdensome and costly measures and procedures imposed on retailers to ensure compliance with these rules.

3.   General comments

3.1.

The European Economic and Social Committee (EESC) welcomes the attempt undertaken by the Commission to modernise the retail sector in order to deal with the new challenges relating to digitalisation and e-commerce.

3.2.

In its previous opinions, particularly INT/682 on A European retail action plan (2), the Committee has already recommended the creation of an open economic environment aimed at guaranteeing fair competition between entities of the same size. In particular, the EU should create the conditions for diversity, positive coexistence and cooperation among online and offline large, medium, small and micro-retailers. Promotion of diversity in EU retail is a great way of responding to the various needs of consumers, but also to defend and promote the European productive system.

3.3.

The EESC notes that the Commission focuses too much on ‘price’ as the most interesting element for consumers whereas the main goal should be providing accurate information for consumers (consumer awareness). Consumers should feel free to take other elements into account when purchasing a product, such as its quality, personalisation, durability, consumer mobility, proximity, value for money, service provided during or after purchase, impact on the circular economy, and environmental criteria. Diversification of products represents added value for the EU’s productive and retail sectors and should be properly protected by the Commission (3).

3.4.

The EESC finds the Commission’s approach skewed in favour of large retailers and thinks it important to balance this with the needs of small and micro enterprises. In particular, the Committee believes a coexistence needs to be guaranteed of large companies and micro and family-run businesses.

3.5.

The EESC agrees that some restrictions on the right of establishment and operational restrictions implemented in some Member States could act as a barrier to the establishment of new enterprises and their scaling-up. However, it thinks that a full liberalisation of the right of establishment would not be a panacea. Furthermore, in this connection, the subsidiarity principle should be respected and agreements reached at national, regional and local level to find appropriate responses to local needs and to those of all the stakeholders.

3.6.

The EESC does not agree with the Commission’s negative reading of the Visser judgement. For the EESC, this case confirms the purpose of the legislator with regard to the Services Directive: it codifies the case law of the Court of Justice of the European Union regarding the freedom of establishment and only prohibits certain requirements, such as economic needs testing, while recognising that ‘[the] objective of protecting the urban environment is capable of constituting an overriding reason relating to the public interest that may justify a territorial restriction’. It is important to balance such needs according to the proportionality and subsidiarity principles.

3.7.

In this connection, much can be done in the process of forging a single European market, to simplify the procedures for starting a business and to make these procedures transparent and uniform, while respecting the legitimate existing constraints on a territorial scale established in line with the subsidiarity principle.

3.8.

The EESC considers it of the utmost importance to keep and protect some specific economic environments, in particular when these are connected to the conservation of national historical and artistic heritage, social policy objectives and cultural policy objectives; a different approach could have a disruptive impact on local communities and consumers (4).

3.9.

Overall, the EESC believes that cross-border expansion, scaling-up and e-commerce should be seen as a serious option, and the enterprises in coordination with their organisations should be supported in this process, but this cannot be considered an obligation or the only way that all enterprises can grow, in line with the primary interest of consumers (multi-channel distribution and service). This is why it is essential to encourage and sustain innovation processes, training and product promotion over the long term, including supporting small and micro enterprises and their representing organisations with appropriate funding.

3.10.

An efficient retail policy needs to strike a balance between profitability and efficiency with regard to the location. (Medium) long-term considerations have to be taken into account especially as regards brick and mortar establishments and their relation to existing and possible future developments (housing, available services, etc. and thus to existing city centres and neighbourhoods). The EESC considers that the Commission should complete its proposal, in collaboration with the relevant national and regional organisations, by introducing structural measures with a view to incorporating territorial development factors for local communities and cities centres (tourist areas, local spatial planning, building regulations, conditions, etc.).

3.11.

The EESC considers that national regulations on shop opening hours and working times, in accordance with the new technological solutions, play a crucial role in ensuring a level playing field among different sized businesses and guaranteeing adequate social protection to both employed and self-employed and, above all, are a crucial tool for the social protection of self-employed and employed people.

3.12.

The EESC reiterates that reaching agreement at national or subnational level with the organisations concerned is the best way to establish opening hours and days. It is crucially important, in fact, to reconcile the needs of consumers to have access to particular products and services and the desire of certain companies to open on holidays or in the evenings, and to protect the rest needs of micro enterprise owners and their employees, which also ensuring a balance between work and family life, and providing for time set aside for training.

3.13.

The EESC also points out, in line with the Social Pillar, the need to guarantee fair remuneration and quality of work to all workers in the sector, whether online or offline. It draws attention, in particular, to the case of the labour contracts of thousands of those working for online businesses that are still not covered bycollective bargaining, as well as to the contracts in large retailers designed only to cater for greater customer footfall at weekends (resulting in an increase in casual contracts) or which do not count weekends or nights as overtime. Finally, in the EESC’s view, the creation of an effective social dialogue mechanism that also involves small and micro enterprises would give businesses better development opportunities and workers a better system of safeguards.

3.14.

The EESC welcomes the recommendation that public authorities should facilitate the adoption of digital technologies on the part of small enterprises. However, this cannot be the only option. Traditional shops remain a crucial element not only of growth in the EU but also with regard to social cohesion in particular in the local communities and for non-native digital consumers. For this reason, online and offline commerce should coexist. In this connection, the EESC is of the opinion that the Commission underestimates the difficulties faced by small and micro enterprises when it comes to taking part in and profiting from e-commerce.

3.15.

The EESC agrees with the Commission on the need for quality training for employers who want to get involved in e-commerce. Nevertheless, the Committee considers that the situation is more complex and SMEs, especially small and micro-enterprises, face multiple challenges, such as: a) changing and adapting their internal organisation; b) knowledge of foreign languages; c) obtaining and understanding legal and administrative information; d) establishing an efficient and competitive delivery system; e) overcoming fiscal and social dumping at EU level (VAT fraud, counterfeiting, etc.). For this reason, the EESC urges the Commission and the Member States to support SMEs and their organisations throughout their transition towards e-commerce, with a wide approach that considers all the conditions needed for the creation of successful online enterprises.

3.16.

The EESC considers that e-commerce could be a significant option for many SMEs. Moreover, the Committee points out that just recently the Commission published the first proposal aimed at regulating platform-to-business relations in the digital market. This measure is focused on transparency but it does not tackle some frequent abusive practices which impede fair competition (e.g. parity price clauses, fiscal dumping, varying taxation, etc.) between commercial users and big online platforms (5). For this reason the Committee recommends that the Commission create a level playing field with regard to fair competition in the digital market.

3.17.

In the EESC’s view, various measures are needed to provide the necessary conditions for the retail sector, and in particular SMEs and micro-enterprises as the highest net employment creators, to tackle the skills mismatch: strengthen identification and anticipation of skills needs, including guidance; improve education and training outcomes according to labour market needs, including promotion of VET; improve framework conditions to better match supply and demand; provide better support for the training needs of SMEs and micro-enterprises.

3.18.

The EESC welcomes the Commission’s attention to the cost of compliance especially for small enterprises, as well as the fact that it highlights the lack of awareness of the sector’s specificities.

4.   Specific comments

4.1.

The EESC invites the Commission to face the growing problem of the desertification of city centres and the social and environment consequences of this. How liveable large and small cities are depends not least on the survival of many small and micro enterprises (local shops) that meet the needs of many consumers but risk being crushed by growing concentration of the large retail groups.

4.2.

The EESC regrets the absence of any reference to a sustainable retail sector and the role that small and micro retailers can play in this process. However, a more favourable framework is needed to make them aware of the link between sustainable choices and competitiveness and to provide them with tailored information and technical assistance, as well as the necessary credit schemes to implement what can be improved. Given the weak position they have in terms of influencing consumers and producers, small and micro-retailers should not have choices imposed on them.

4.3.

In the communication, no attention is paid to the frictions that exist in the contractual relations between enterprises, e.g. unbalanced franchising contracts, payment delays and unfair trading practices. In particular, the growing concentration of power among big retailers in Europe poses serious challenges (6). In order to tackle distorted competition and to remain competitive, both of these issues should have been addressed in the communication.

4.4.

The EESC recommends to the Commission, as already pointed out in the EESC opinion on the ‘New Deal For Consumers’, to define and implement an effective dispute resolution system capable of tackling situations resulting from abuses of economic power and practices that distort competition.

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(1)  Turnover in 2016: EUR 9 864 468,4 million; number of enterprises (in 2015): 6 205 080; value of production (in 2015): EUR 2 687 115 million. In 2016, 33 399 447 people were employed in this sector of which 27 892 082 were employees.

(2)  OJ C 327, 12.11.2013, p. 20.

(3)  OJ C 440, 6.12.2018, p. 165.

(4)  See footnote 2.

(5)  OJ C 440, 6.12.2018, p. 177.

(6)  See footnote 3.

Opinion of the European Economic and Social Committee on ‘Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Report on Competition Policy 2017’

(COM(2018) 482 final)

(2019/C 110/08)

Rapporteur:

Baiba MILTOVIČA

Referral	European Commission, 5.9.2018
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	21.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	188/1/9

1.   Conclusions and recommendations

1.1.

The EESC welcomes the concise style and focus of the 2017 Report which is supported by an extensive Staff Working Document. An effective and enforced competition policy is the bedrock of a sustainable market economy. It can ensure a level playing field for producers of goods and services, reassure consumers, stimulate competition and deliver fundamental social objectives, such as consumers’ freedom of choice, as well as political objectives, such as the well-being of European citizens and promoting European market integration. With third countries it also plays an important role in supporting positive business, environmental and social dynamics in international trade.

1.2.

The 2017 report places a strong emphasis on compliance and enforcement and provides examples of forceful action taken by the Commission. Consumers and small and medium-sized enterprises are often placed at a disadvantage by large companies possibly abusing their dominant market position, and so the measures which tackle anti-competitive practices are particularly welcome.

1.3.

The growth of anti-competitive activity in EU markets has seen the steady development of National Competition Authorities (NCAs) as important enforcers of competition law. The ECN+ Directive, empowering NCAs to be more effective, strengthens national capacity in this area.

1.4.

The reinforcement of NCAs’ autonomy and the provision of adequate resources is vital. Genuine independence, expertise and training are all necessary for effective work, and the ECN+ Directive should be closely monitored to see that this is achieved. Preventive action should be encouraged to avert anti-competitive conduct and penalties should be increased so that they are an effective deterrent.

1.5.

The EESC supports the Commission in the area of private legal enforcement of the competition rules and argues that class actions should be facilitated by the legal systems of all Member States. The Commission should continue to monitor the effectiveness of collective redress mechanisms for competition law infringements in the various Member States and take further action if necessary. In this regard, the Commission’s proposal on representative actions, included in the proposal for a New Deal for Consumers, is disappointing.

1.6.

Further proposals on franchising, to be included in the Block Exemption Regulation (1) in order to restore the commercial and contractual balance between franchisees and the franchisor, should be considered.

1.7.

Where there are significant para-commercial activities run by local authorities which may benefit from public subsidy enabling unfair competition these should be studied to see whether an adaptation of state aid rules or other instruments is necessary.

1.8.

Concerning the Whistleblowers’ Directive, it is recommended that in its transposition and application, national law should affirm that whistleblowers have access to trade union representatives at all times and that full protection is afforded to the whistleblower in all circumstances.

1.9.

Where applicable to the enforcement of competition law it is suggested that a detailed analysis by the Commission of the practices of energy regulators across all Member States in conjunction with CEER and ACER may identify actions that could eliminate restrictive practices, which continue to be detrimental to consumers.

1.10.

A new review of the functioning of the food distribution chain in future competition policy reports could identify and propose remedies for the continuing exercise of market power by dominant retailers, which may prove to be inappropriate.

1.11.

There are a range of anti-competitive practices existing and continually being created within the digital economy. The Committee is concerned that adequate resources are not applied to monitoring this rapidly developing and financially vibrant sector and urges specific provision to do so within the Multiannual Financial Framework.

1.12.

There are a number of factors which lie outside the immediate scope of competition policy yet create concerns about market distortions: wide variations in corporate taxation policy between Member States, employment practices collectively known as social dumping, practices arising within the gig economy and issues relating to the circular economy and global economic sustainability. The Committee urges the Commission to apply the full extent of its powers and capacity to ensure that those grey areas where anti-competitive behaviour exists are, where possible, monitored, clarified and remedied.

1.13.

Competition law is one of the oldest parts of the acquis but is not always commensurate with the challenges of this century. In particular the artificial separation of market and socio-environmental spheres would benefit from a comprehensive and systemic review of EU competition law taking into account economic, environmental and social objectives.

2.   Gist of the 2017 Report on Competition Policy

2.1.

Competition policy is the bedrock of the Single Market and has been in place since the Treaty of Rome and the foundation of today’s European Union. It has been set within a framework enshrined in provisions such as Articles 101 and 102 TFEU, which clarify its substance and scope.

2.2.

2017 saw specific actions to the benefit of consumers and European industry in key areas: the digital economy, energy, the pharmaceutical and agro-chemical sector, the network industries and the financial markets. This summary highlights the main points of the Report, which is itself a summary of extensive work across numerous economic sectors.

2.3.

Policy needs to be translated into rules and rules must be enforced. The European Commission is a founder member of the International Competition Network and is also active in all international forums devoted to competition, including the OECD, Unctad, the WTO, and the World Bank. In particular, the Commission works closely with national competition authorities and has proposed new rules in the form of a Directive (2) to enable Member States’ competition authorities to be more effective enforcers of EU antitrust rules.

2.4.

It is important that individuals who have knowledge of the existence or functioning of a cartel or other types of antitrust violations have the means to bring such practices to light. A new, anonymous whistleblower tool has been launched which facilitates this and it is in active use.

2.5.

Requirements regarding the notification of smaller and less problematic state aid measures have been simplified and exemptions introduced, and 24 Member States have joined the Transparency Award Module providing state aid information.

2.6.

Rigorous competition enforcement in concentrated markets has been undertaken. The pharmaceutical sector saw the Commission’s first investigation into concerns about excessive pricing practices in the pharmaceutical industry; several mergers in the agro-chemical sector were scrutinised and a merger in the cement industry which would have reduced competition was prohibited.

2.7.

In the energy sector, enforcement actions got underway in relation to state aid and capacity mechanisms and the investigation of Gazprom’s business practices in Central and Eastern Europe continued with a preliminary finding that EU antitrust rules were being broken.

2.8.

In transport, acquisitions in the aviation sector were examined and anti-competitive actions in rail transport were identified in Lithuania, resulting in fines and remedial action, and the provision of state aid to the sector in Greece and Bulgaria was supported. Anti-cartel action was taken against Scania with regard to road haulage, and several firms in the car parts sector were subjected to heavy fines.

2.9.

The extension of the General Block Exemption Regulation to ports and airports facilitated the provision of appropriate state aid.

2.10.

The Commission’s investigation into the proposed merger between Deutsche Börse and London Stock Exchange Group concluded that this would be monopolistic, and as a result it was prohibited.

2.11.

It is noted that EU competition policy will need to respond constructively and creatively to the challenge of UK withdrawal from the EU. As set out by the European Council, any future trade agreement should ensure a level playing field, notably in terms of competition and state aid.

3.   General comments

3.1.

The EESC welcomes the 2017 Report, which contains numerous examples of the Commission’s focus on the promotion of consumer well-being and the prevention of consumer harm. A consequent effect of this approach is not only to strengthen the integration of the Single Market but also to strengthen economic development and related social policy objectives.

3.2.

In the last year, the EESC’s opinions have frequently identified the importance of an effective and applied competition policy. Consumer welfare and well-being benchmarks alongside the maintenance of an effective competitive structure provide the rationale for addressing exploitation, exclusionary practices, and restrictive agreements. By encouraging best economic practice, a firm competition policy encourages the strengthening of European business in competitive world markets and the promotion of those social objectives on which it is founded.

3.3.   Automotive emissions

3.3.1.

In the EESC Opinion on EU actions to improve environmental compliance and governance (3) it was noted that lack of respect for the mechanisms that guarantee the implementation of environmental legislation and governance is a regrettable factor that contributes to unfair competition and economic harm. The Committee notes that compliance and adherence to the rule of law is fundamental to a strong competition policy.

3.3.2.

In this context the Committee appreciates the fact that the Commission’s preliminary investigation of a possible cartel involving BMW, Daimler, Volkswagen, Audi and Porsche, into whether the companies restricted the development of selective catalytic reduction systems and particulate filters, potentially limiting the roll-out of more environmentally friendly technologies, has now led the anti-competition team to open a formal investigation.

3.4.   Collective redress mechanisms

3.4.1.

The Committee notes the final transposition of the Damages Directive (4) which, in part, addresses the issue of providing a legal mechanism for collective actions. However, the withdrawal of the proposal for a directive prepared by DG COMP in 2009, when taken together with the proposal recently included in the New Deal for Consumers package, signals a lack of political will to take significant steps towards establishing a genuinely efficient framework for representative actions at European level. The EESC therefore urges the Commission to continue to monitor the effectiveness of collective redress mechanisms for competition law infringements in the various Member States and take further action if necessary.

3.5.   Retail franchising

3.5.1.

The EESC notes that there is a growing problem relating to franchise contracts in the retail sector which may have serious competition implications. For example, a major dispute in the Netherlands between the franchisor HEMA and a number of franchisees concerning existing contracts and the portion of earnings from internet sales has resulted in the cancellation of franchisee contracts. The Committee calls on the Commission to analyse this situation and come forward with additional proposals on franchising that could be included in the Block Exemption Regulation in order to restore the commercial and contractual balance between franchisees and the franchisor.

3.6.   Subsidies at local authority level

3.6.1.

In many Member States, local authorities are turning to the development of commercial activities using publicly owned resources or facilities. This can lead to unfair competition if an element of subsidy is present. For example, SMEs in the food services industry and tourism are faced with subsidised activities in the canteens of sports clubs, leisure centres etc. Local authorities own or offer public funds to these clubs and associations who are often exempted from paying VAT and benefit from social premiums, such as volunteer work. These para-commercial activities are frequently organised (in terms of turnover and profits) as a normal commercial enterprise. The Committee calls on the Commission to monitor this phenomenon and see whether an adaptation of state aid rules or other instruments could be developed at EU level to regulate these local activities, which in some cases are even subsidised with EU funds!

3.7.   Information on state aid

3.7.1.

The availability and use of the Transparency Award Module (TAM) is particularly welcome as it allows interested stakeholders (the Commission, competitors and the wider public) to verify the conformity of State aid with the rules. To date, about 30 000 aid awards have been published.

4.   Specific Comments

4.1.   The ECN+ Directive

4.1.1.

The EESC is encouraged by the emphasis on enforcement in the report and has taken this opportunity to restate its views (5) about the ECN+ (6) Directive, which empowers NCAs to be more effective.

4.1.2.

The Committee has previously stated its view that a Regulation could be a more effective legislative instrument in this area but recognises the need for proportionality. In addition, competition policy should guarantee equal opportunities, with NCAs having at their disposal the legal measures and instruments needed to tackle secret cartels.

4.1.3.

Although the ECN+ Directive should guarantee independence, resources and an effective toolbox to carry out enforcement, questions remain about NCAs’ autonomy and capacities. Genuine independence, expertise and training are all necessary for effective work. Preventive action should be encouraged to avert anti-competitive conduct and penalties increased so that they are an effective deterrent. NCAs should also have the power to institute legal proceedings in their own right.

4.2.   Whistleblowers’ protection

4.2.1.

Further work needs to be undertaken with regard to informing the public about competition rules. This will enhance the effectiveness of new tools which are available for reporting infringements, such as the whistleblowers tool. Although the EESC is encouraged to see that this tool is in regular use, it has a number of concerns about the proposed Directive, which aims to strengthen whistleblowers’ protection (7).

4.2.2.

The EESC refers the Commission to its Opinion on this Directive (8) where it recommends that the scope of the Directive should not be limited to compliance with EU law but rather extended to include compliance with national law.

4.2.3.

It is also important that reference be made to the inclusion of workers’ rights and that trade union representatives and NGOs be mentioned as examples of legal persons. Whistleblowers should have access to trade union representatives at any stage of the process.

4.3.   The digital economy

4.3.1.

The EESC notes that the new Consumer Protection Cooperation Regulation (9) was adopted at the end of 2017 and should ensure better coordination among consumer networks to enforce measures against cross-border anti-competitive practices. For example, the Regulation identifies geo-blocking practices in the e-commerce sector, which, by its very nature, is a cross-border issue. European Consumer Centres have worked on this issue for many years, gathering cross-border examples and practices. Together with the European Competition Network and the Consumer Protection Cooperation Network, better coordinated enforcement action is now anticipated.

4.3.2.

In the fast-growing area of the digital economy, anti-competitive practices of many other types are continually being created. For example, the use of sophisticated algorithms can adjust prices based on a person’s data collected from various online sources, and it also helps companies engage in online collusion. Adequate budgetary resources need to be at the Commission’s disposal to monitor and counteract these practices.

4.4.

The EESC believes that better cooperation between the NCAs and consumer organisations would be beneficial for both sides, especially as national consumers’ organisations are very well placed to inform the NCAs about suspected infringements. In fact, they can provide the authorities with valuable data from their own handling of complaints.

4.5.

The Energy Union can stimulate the ongoing process of bringing fair competition to the EU energy sector, which is still an area where there is a wide range of consumer and industry pricing and where market choice can be restricted. The EESC believes that a detailed analysis of regulatory practices — which vary considerably between Member States — will provide the basis for constructive dialogue to resolve discrepancies and this should be jointly conducted by NCAs, national energy regulators and the Commission. This may shine a light on the lack of choice and restrictive practices in, for example, district heating schemes.

4.6.

The inappropriate exercise of market power in the food retail sector is an ongoing issue. The Commission raises the question of whether large retail chains have obtained too much bargaining power (in the bilateral negotiations with their suppliers) and buyer power (in the market overall) thanks to their dual role of customers and competitors (through private labels) of their suppliers (10). The Committee urges action in line with its recent Opinion on this subject (11) and repeats its recommendation that the Commission includes monitoring of the functioning of the food distribution chain in future competition policy reports.

4.7.   Competition law and the wider public interest

4.7.1.

Market distortions can be caused by a number of factors which lie outside the strict scope of competition policy. Amongst these are wide variations in corporate taxation policy between Member States, employment practices collectively known as social dumping, practices arising within the gig economy and issues relating to the circular economy and global economic sustainability.

4.7.2.

Competition law, rooted in mid-20th century economic perspectives, now needs to live up to the challenges of the 21st century. To overcome the artificial separation of market and socio-environmental spheres, a comprehensive and systemic review of EU competition law should be initiated, taking into account economic, environmental and social objectives.

4.7.3.

The EESC believes that the commitments made by the EU on the Sustainable Development Goals (SDGs) and the Paris Agreement on climate change, in addition to the existing commitments in the treaties, should be taken into account as public interest objectives in the application of competition law alongside those of consumer interests.

4.7.4.

The effects of market concentrations on future generations of consumers and producers should be acknowledged. Different calculation models for detrimental long-term effects should be assessed, e.g. as already done in public procurement via life cycle costing.

4.8.

The EESC, in several recent opinions (12) has called for measures relating to fair taxation undertaken by the European Commission (regarding multinationals and individuals) to be strengthened as many outstanding issues remain unresolved. These include the fight against tax fraud, tax havens, aggressive tax planning, and unfair tax competition between Member States.

4.9.

In particular there are ongoing and substantial market distortions caused by the widely varying national corporate tax regimes between Member States, where corporate taxation ranges from 9 %-35 % and even lower rates are available in some countries in categories such as intellectual property rights. Because taxation policy is a national competence, EU competition policy will always struggle to moderate the distortions caused.

4.10.

The Anti-Tax Avoidance Directive (ATAD), which should be applied via Member States’ laws by 1 January 2019, lays down rules against tax avoidance practices that directly affect the functioning of the internal market and contains elements that should help to avoid some divergent national approaches, and this is to be welcomed.

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(1)  Commission Regulation (EU) No 330/2010 (OJ L 102, 23.4.2010, p. 1)

https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32010R0330

(2)  http://ec.europa.eu/competition/antitrust/proposed_directive_en.pdf

(3)  OJ C 283, 10.8.2018, p. 69.

(4)  Directive 2014/104/EU of the European Parliament and of the Council on Antitrust Damages Actions (OJ L 349, 5.12.2014, p. 1).

(5)  OJ C 345, 13.10.2017, p. 70.

(6)  Proposal for a Directive of the European Parliament and of the Council to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market [COM/2017/0142 final].

(7)  Proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting on breaches of Union law [COM(2018) 218 final].

(8)  EESC opinion on Strengthening whistleblower protection at EU level. Rapporteur: Franca Salis-Madinier (OJ C 62, 15.2.2019, p. 155).

(9)  Regulation (EU) 2017/2394 of the European Parliament and of the Council (OJ L 345, 27.12.2017, p. 1).

(10)  Commission Staff Working Document SWD(2018) 349 final.

(11)  OJ C 283, 10.8.2018, p. 69.

(12)  OJ C 262, 25.7.2018, p. 1; OJ C 197, 8.6.2018, p. 29; OJ C 81, 2.3.2018, p. 29.

Opinion of the European Economic and Social Committee on ‘Proposal for a Council Regulation amending Council Regulation (EU) 2015/1588 of 13 July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid’

(COM(2018) 398 final — 2018/0222 (NLE))

(2019/C 110/09)

Rapporteur:

Jorge PEGADO LIZ

Referral	European Commission, 12.7.2018
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Section for the Single Market, Production and Consumption
Adopted in section	21.11.2018
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	205/3/4

1.   Conclusions and recommendations

1.1.

The EESC takes note of the proposal for a Council Regulation amending Council Regulation (EU) 2015/1588 of 13 July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid (COM (2018) 398 final), the purpose of which is to add two new categories to the Enabling Regulation under which the Commission can adopt block exemptions (Council Regulation (EU) 2015/1588 (1) of 13 July 2015).

1.2.

The EESC finds the proposal necessary and fitting as part of a whole raft of new proposals related in particular to the next Multiannual Financial Framework, since it is an instrument crucial to the efficient operation of many of the measures envisaged in these new initiatives. It makes a decisive contribution to ensuring that the Commission plays a strong role in the selection of supported projects in accordance with a common EU interest, and that public support will complement private investment in a fully transparent manner.

1.3.

The EESC therefore agrees with and endorses this new Commission proposal. The Committee also thinks it a good idea to encourage the interested parties concerned to follow the guidelines in the code of best practice.

2.   The Commission proposal

2.1.

On 6 June 2018, the Commission presented its proposal for a Regulation amending Council Regulation (EU) 2015/1588 of 13 July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid (2) as part of a whole raft of new proposals related in particular to the next Multiannual Financial Framework (MFF) (3).

2.2.

Since the proposal aims to improve the interplay of certain EU funding programmes — particularity in the COSME and Horizon Europe programmes, Digital Europe, the new InvestEU fund and the promotion of European territorial cooperation and State aid rules — it must enable targeted modifications of current State aid rules so that national money — including from the European Structural and Investment Fund managed at national level — and EU funds managed centrally by the Commission can be combined as seamlessly as possible, without distorting competition in the EU’s Single Market.

2.3.

The aim of the proposal is therefore to include two new categories in the Enabling Regulation enabling the Commission to adopt block exemptions (Regulation (EU) 2015/1588 of 13 July 2015), based on a definition of clear compatibility criteria, ensuring that the effect on competition and trade between Member States is limited. By adopting such block exemptions it would be possible to significantly simplify administrative procedures for Member States and the Commission on the basis of clearly defined ex ante compatibility conditions.

2.4.

In short, then, the Commission proposes to add the following two subpoints to point (a) of Article l(1) of Regulation (EU) 2015/1588: (xv) financing channelled through or supported by EU centrally-managed financial instruments or budgetary guarantees, where the aid consists in the form of additional funding provided through State resources; (xvi) projects supported by EU European Territorial Cooperation programmes.

3.   General comments

3.1.

The EESC has backed the Commission’s new programme initiatives in some opinions adopted very recently, notably those on: a) InvestEU (4); b) Horizon Europe (5); c) Artificial Intelligence for Europe (6); d) R&I: A renewed European agenda (7); e) European Regional Development Fund and Cohesion Fund (8); f) Regulation on European Territorial Cooperation 2021-2027 (9); g) Connecting Europe Facility (10); h) Implementation of the TEN-T projects (11); i) Connected and automated mobility (12); j) Digital Europe programme (13).

3.2.

The present Commission proposal is necessary for the effective operation of a large number of measures envisaged in these new initiatives, of which just a few are listed for information, because the discussions of the co-legislators are still ongoing. It also makes a decisive contribution to ensuring that the Commission plays a strong role in the selection of supported projects and schemes in accordance with a common EU interest, and that public support will complement private investment in a fully transparent manner.

3.3.

It should be said that Articles 107, 108 and 109, in the Rules on Competition chapter, are the core provisions governing State aid in the EU’s basic law (TFEU).

3.4.

In terms of its implementation, Regulation (EU) 2015/1588 of 13 July 2015 provided for Articles 107 and 108 of the TFEU to be applied to certain categories of horizontal State aid, be they investment or state guarantees.

3.5.

This regulation must be adapted to enable the goals set out in the Commission proposal — which the EESC fully supports — to be implemented.

3.6.

The EESC therefore agrees with the changes to be made to Regulation (EU) 2015/1588 as set out in the Commission proposal, considering them essential to pursue the stated goals.

3.7.

In addition, the EESC is pleased that, some days after the present proposal, the Commission also published a Code of Best Practices for the conduct of State aid control procedures (14) that replaces the code adopted in 2009 and incorporates the Simplified Procedure Notice (15).

3.8.

The EESC welcomes this initiative to take full advantage of updated State aid rules such as those in the current proposal, to give Member States, aid beneficiaries and interested parties guidelines on how State aid procedures work in practice and to ‘make State aid procedures as transparent, simple, clear, predictable and timely as possible’.

3.9.

This 2018 code of best practices makes no claim to being exhaustive and establishes no new law. It describes and gives guidance on the procedures and stipulates that it is to be read together with all other documents adopted earlier.

3.10.

Its fundamental aim is to encourage cooperation between interested parties and the Commission in monitoring and to make the procedure more intelligible for businesses and countries.

3.11.

It also improves the procedure for dealing with State aid complaints by requiring complainants to show affected interest from the moment of submitting the complaint form and by setting indicative timeframes for the investigation of complaints.

---

(1)  OJ L 248, 24.9.2015, p. 1.

(2)  COM(2018) 398 final.

(3)  COM(2018) 321 final, 2 April 2018.

(4)  ECO/474 (OJ C 62, 15.2.2019, p. 131).

(5)  INT/858 (OJ C 62, 15.2.2019, p. 33).

(6)  OJ C 440, 6.12.2018, p. 51.

(7)  OJ C 440, 6.12.2018, p. 73.

(8)  ECO/462 (OJ C 62, 15.2.2019, p. 90).

(9)  OJ C 440, 6.12.2018, p. 116.

(10)  OJ C 440, 6.12.2018, p. 191.

(11)  INT/669 (OJ C 62, 15.2.2019, p. 269).

(12)  INT/673 (OJ C 62, 15.2.2019, p. 274).

(13)  INT/677 (OJ C 62, 15.2.2019, p. 292).

(14)  Communication from the Commission C(2018) 4412 final, 16.7.2018.

(15)  OJ C 136, 16.6.2009, p. 13.

Opinion of the European Economic and Social Committee on ‘Proposal for a Regulation of the European Parliament and of the Council on the action of the Union following its accession to the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications’

(COM(2018) 365 final — 2018/0189 (COD))

(2019/C 110/10)

Rapporteur:

Arnold PUECH d’ALISSAC

Consultation	European Parliament, 10.9.2018 Council, 17.10.2018
Legal basis	Article 114 of the Treaty on the Functioning of the European Union
Section responsible	Section for the Single Market, Production and Consumption
Adopted in section	21.11.2018
Adopted at plenary session	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	208/1/3

1.   Conclusions and recommendations

1.1.

Geographical indications (GIs) represent a unique and valuable resource for EU producers in an increasingly liberalised and competitive global market.

1.2.

The European Commission should always act with a view to protecting production models and quality systems recognised globally for the beneficial effect of their sustainability on consumers and producers.

1.3.

The indications are therefore unique in that they emphasise the local dimension of a product, thus showcasing cultural aspects, local know-how, the region concerned and its agro-ecological specificities. These characteristics must be preserved.

1.4.

There is a worldwide move towards developing ‘SIQOs’ (official quality and origin indicators).

1.5.

The EESC highlights this positive trend and welcomes the European Commission’s proposal to protect registered appellations of origin and registered geographical indications at international level under the Geneva Agreement and its legal practices. It believes that efforts must be made to create a harmonised framework for the protection of quality indicators at international level. However, it considers it essential to work towards a comprehensive approach that aims to protect and promote the system of quality indicators as a whole.

1.6.

A system is needed that ensures fair treatment of all European producers wishing to have their geographical indications recognised at international level as well.

1.7.

The EESC feels that the rights accrued by these geographical indications already registered and protected at European level should be preserved in order to avoid penalties and unequal treatment.

2.   Proposal for a regulation

2.1.

The aim of this Commission proposal is to put a legal framework in place ensuring effective participation of the EU in the WIPO Lisbon Union on Appellations of Origin and Geographical Indications as of the day that the EU becomes a Contracting Party to the Geneva Act.

2.2.

The Geneva Act establishes a commitment for each Contracting Party to protect registered appellations of origin and geographical indications on its territory, within its own legal system and practices. Thus, an appellation of origin or registered geographical indication is protected by each Contracting Party that has not refused protection.

2.3.

Once the European Union has become a Contracting Party to the Geneva Act, the Commission proposes that it submit a list of its geographical indications (to be agreed upon with the Member States) for protection under the Lisbon system. Following the EU’s accession to the Lisbon Union, applications for the international registration of additional geographical indications protected and registered in the Union will be possible on the Commission’s initiative or at the request of a Member State or of an interested group of producers.

2.4.

Appropriate procedures should be put in place for assessment by the Commission of appellations of origin and geographical indications originating in third Contracting Parties and registered in the International Register. Enforcement by the Union of appellations of origin and geographical indications originating in third Contracting Parties and registered in the International Register shall be in accordance with Chapter III of the Geneva Act.

2.5.

This act in particular requires each Contracting Party to make available effective legal remedies for the protection of registered appellations of origin and registered geographical indications (see Article 14 of the Geneva Act of the Lisbon Agreement) (1).

2.6.

Seven EU Member States are members of the Lisbon Union and as such have accepted protection of third-country names. In order to provide them with the means to fulfil their international obligations undertaken prior to the accession of the EU to the Lisbon Union, a transitional arrangement should be put into place which should produce effects at national level only, and have no effect on intra-EU or international trade.

2.7.

The fees to be paid under the Geneva Act and the Common Regulations for filing an application for the international registration of an appellation of origin or a geographical indication are borne by the Member State in which the appellation of origin or the geographical indication originates (see Article 11 of the Geneva Act of the Lisbon Agreement) (2).

2.8.

The EU has put in place uniform and comprehensive protection systems for geographical indications of agricultural products. Through these systems, protected names for the products covered enjoy far-reaching protection throughout the EU, based on a single application process. The proposal is consistent with the EU’s general policy to promote and enhance the protection of geographical indications through bilateral, regional and multilateral agreements.

3.   General comments

3.1.

The EESC welcomes the European Commission’s proposal to protect registered appellations of origin and registered geographical indications at international level under the Geneva Act and its legal practices. In a context hallmarked by ever-increasing globalisation, especially as regards the agri-food trade, efforts must be made to create a harmonised framework for the protection of quality indicators at international level.

3.2.

The European Commission should always act with a view to protecting production models and quality control systems recognised globally for their beneficial effect on consumer health and economic and environmental sustainability.

3.3.

Geographical indications (GIs) represent a unique and valuable resource (5,7 % of agri-food sales, i.e. over EUR 54 billion in 2010) (3) for EU producers in an increasingly liberalised global market. However, efforts to compete on the basis of quality are useless if the main tool used by our high-quality products, i.e. GIs, is not sufficiently protected on international markets.

3.4.

The EESC stresses that geographical indications are distinctive markers that make it possible to differentiate competing products and inform the consumer about the origin of a product. Unlike trademarks, a geographical indication is intended to highlight the link between a product and its region of origin. The indications are therefore unique in that they emphasise the local dimension of a product, thus showcasing cultural aspects, local know-how, the region concerned and its agro-ecological specificities. These characteristics must be preserved.

3.5.

Back in 2008, in its opinion on Geographical indications and designations (4), the EESC stressed that European civil society had seen increasing consumer awareness of the characteristics of agri-food products, reflected in a demand for quality products. This statement is today more valid than ever as European consumers are increasingly on the lookout for quality products from a particular local area, region or country whose quality or reputation is fundamentally associated with that geographical origin (5).

3.6.

According to a recent report by the French Economic, Social and Environmental Council on official indicators of the quality and origin of food products, there is a worldwide move towards developing ‘SIQOs’ (official quality and origin indicators). Geographical indications are gaining ground because they respond to growing consumer demand and also promote a history, heritage and ancestral expertise associated with a particular area.

3.7.

The EESC reiterates that according to the FAO (6), the effect of geographical indications on prices has been very positive, regardless of the type of product, region of origin or length of time it has been registered.

3.8.

Aspects relating to the protection of geographical indications are becoming more and more central in all bilateral agreements, both concluded and under negotiation. The EESC draws attention to this positive aspect. However, it considers it essential to work towards a comprehensive approach that aims to protect and promote the overall system of quality indicators.

3.9.

To this end, the EESC considers it necessary to re-examine the proposal for a positive list at EU level, which is not in line with the requirement to protect the geographical indications scheme as a whole. A system is needed that ensures fair treatment of all European producers wishing to have their geographical indications recognised at international level as well. This is all the more the case given that the criteria chosen do not take into consideration other socioeconomic criteria that are essential for economic development in certain EU regions. A local economy often forms around geographical indications, generating employment and having a significant impact on other sectors of the economy, such as tourism, as well as being beneficial for land use and land-use planning.

3.10.

The EESC calls on the Commission to take into account the consequences of the future change in relations between the European Union and the United Kingdom and the impact that drawing up a positive list could have on the ongoing negotiations, which should be carried out with the aim of protecting the quality system of the European Union as a whole. After its withdrawal from the EU, the United Kingdom must continue to respect the geographical indications guaranteed by a system from which it has benefited thus far.

3.11.

The EESC stresses that the European agri-food sector is under serious threat from counterfeit products. A report (7) recently released by the European Commission confirms that the most frequently counterfeited products are agri-food products.

3.12.

The EESC notes that, to date, seven EU countries (Bulgaria, the Czech Republic, France, Hungary, Italy, Portugal and Slovakia) are already full members of the Lisbon Agreement and that the agreement currently has over 1 000 registered geographical indications, which are protected at international level by protected designations of origin (PDOs) and protected geographical indications (PGIs) via a single registration procedure.

3.13.

The EESC feels that the rights accrued by these geographical indications already registered and protected at European level should be preserved in order to avoid penalties and unequal treatment.

3.14.

Lastly, the EESC draws attention to the 2012 study on the commercial value of GIs in the EU (8). This is the only study currently available, but it would seem that the value premium rate of GI products has not fundamentally changed in the meantime.

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(1)  http://www.wipo.int/edocs/pubdocs/en/wipo_pub_239.pdf.

(2)  Idem.

(3)  See Tender No AGRI-2011-EVAL-04.

(4)  OJ C 204, 9.8.2008, p. 57.

(5)  https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1540542863415&uri=CELEX:32012R1151

(6)  UN Food and Agriculture Organisation.

(7)  https://ec.europa.eu/taxation_customs/sites/taxation/files/report_on_eu_customs_enforcement_of_ipr_2017_en.pdf (at present only available in English).

(8)  https://ec.europa.eu/agriculture/external-studies/value-gi_en (at present only available in English).

Opinion of the European Economic and Social Committee on ‘Amended Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1093/2010 establishing a European Supervisory Authority (European Banking Authority); Regulation (EU) No 1094/2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority); Regulation (EU) No 1095/2010 establishing a European Supervisory Authority (European Securities and Markets Authority); Regulation (EU) No 345/2013 on European venture capital funds; Regulation (EU) No 346/2013 on European social entrepreneurship funds; Regulation (EU) No 600/2014 on markets in financial instruments; Regulation (EU) 2015/760 on European long-term investment funds; Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds; Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market; and (EU) Directive 2015/849/EC on the prevention of the use of the financial system for the purposes of money-laundering or terrorist financing’

(COM(2018) 646 final — 2017/0230 (COD))

(2019/C 110/11)

Rapporteur-general:

Petr ZAHRADNÍK

Referral	European Parliament, 4.10.2018 Council of the European Union, 12.11.2018
Legal basis	Article 114 of the Treaty on the Functioning of the European Union
Section responsible	Section for Economic and Monetary Union and Economic and Social Cohesion
Adopted at plenary	12.12.2018
Plenary session No	539
Outcome of vote (for/against/abstentions)	121/0/4

1.   Conclusions and recommendations

1.1.

The EESC appreciates the agility with which the European Commission is responding to the problems that have become entrenched in banking and financial institutions and is taking further measures to stamp out money laundering and the financing of terrorism.

1.2.

At the same time, the EESC thinks that, in addition to strengthening the coordination between supervisory authorities and streamlining procedures, operations should also be coordinated with other relevant parties to tackle this very dangerous problem effectively.

1.3.

The EESC warns that technology and communications not only serve the development of innovative financial products for the benefit of depositors and investors, but are also a strong incentive for criminals engaged in money laundering and the financing of terrorism. This is one reason why it calls for the strategies adopted to target to the utmost the prevention of future risks.

1.4.

The EESC underlines the increasing importance of this problem in relation to third countries, given the deterioration in geopolitical, security and political risks, and stresses the need for the EU to be fully prepared in order to eliminate practices of money laundering and financing of terrorism and to eliminate the abuse of its financial market and institutions.

1.5.

The EESC recognises and respects the fact that the measures put forward in the legislative proposal, while important, are only component coordination, organisational and jurisdictional steps that must be followed by a further batch of measures if the matter is to be successfully addressed. At the same time, it agrees with the European Commission that, in order to make sure the path chosen is feasible and sustainable, it is preferable to move in stages so as to avoid significant disruptions to the stability and functioning of the existing system.

1.6.

The EESC believes that under the new balance of powers between supervisory bodies, a balanced relationship should be found between the European Banking Authority (EBA), with its new, expanded powers, and national supervisory authorities, so that all parties involved make the best use of their capacities to achieve the desired solution to the problem.

1.7.

The EESC stresses the importance of internal and external communication on money laundering and financing of terrorism to achieving the aim of the measures. The key element in internal communications is improving and protecting information streams between the supervisory bodies concerned; in the case of external communication, the public in question should be provided with information and made aware of the different ways this kind of crime may be presented, as a means of preventing and preparing for it.

1.8.

The EESC wonders on what basis banking has been labelled the sector most likely to be exploited for money laundering and the financing of terrorism, which has resulted in a stronger position and powers for the EBA rather than the EU’s other two supervisory authorities.

1.9.

The EESC would like to see a more detailed outline of the new relationships between the EBA and the other EU supervisory authorities, as well as the national and, especially, third-country supervisory authorities, when it comes to coordination and synergies in the fight against dirty money and the financing of terrorism.

2.   General context of the proposal and key facts

2.1.

The EU has had a new system of financial market supervision in place since 2011, which has markedly improved financial market stability and risk limitation. It has led to a harmonisation of rules in the EU’s financial markets and to a convergence in their supervision. However, the surge in technological and financial innovation since then has further shifted the spectrum of crime, which exploits the financial sector to support criminal acts and to launder their proceeds. Clearly, both of these types of activity are highly socially undesirable, but they also distort how financial markets work and their effectiveness, because their primary aim is not the maximising of profits based on the objective potential of assets and their value to evolve, but rather secrecy, concealment and lack of disclosure — behaviour which means that financial resources are not necessarily put to the best use.

2.2.

The purpose of the proposed measures is therefore not merely to preclude or limit the means available for committing crime or legalising its proceedings, but also to keep financial institutions that are exploited by this crime healthy and to ensure their stability and safety for clients and investors. It will also limit the political and reputational risks to both individual Member States and the EU as a whole.

2.3.

Given that financial markets are now multinational and inter-connected as never before, it is crucial to set up a system that fulfils its function in a cross-border context, since empirical evidence demonstrates that crime of this kind is increasingly committed on a cross-border basis and, among other things, involves people from third countries. For these efforts to be ultimately successful, then, it is not enough to prosecute this crime — however effectively — in one country alone. It is therefore very important to have effective synergies between national supervisory authorities covering money laundering or those covering the financial market and EU bodies operating in this area, as well as with third-country supervisory authorities.

2.4.

The proposed measure examined in this opinion is but one of a packet of measures in the stated endeavour. For the endeavour to be considered a success, it is essential to have coordination with other elements that together form a systematic and consistent approach that will make it as difficult as possible for perpetrators to commit these crimes.

2.5.

In particular, the proposal aims to: — optimise the use of expertise and resources by centralising tasks at the European Banking Authority (EBA) related to preventing and combating money-laundering and the financing of terrorism for the whole financial market; — clarify the scope and substance of anti-money-laundering tasks entrusted to the European Banking Authority; — reinforce the tools for carrying out anti-money laundering tasks; — strengthen the coordination role of the European Banking Authority when it comes to international anti-money laundering issues.

3.   General comments

3.1.

The EESC believes that combating money laundering and the financing of terrorism is an increasingly important issue not only because of rapid technological change and financial innovations, but also because of the numerous recently identified cases in which the banking and financial systems in several EU Member States have been exploited for criminal ends. It is also important in these circumstances to flag up the heightened geopolitical risks, terrorism among them.

3.2.

The EESC is concerned that the problem is further complicated by the fact that this crime, and the efforts to launder its proceeds through the financial sector, is not only taking place across borders within the EU, but also involves criminal activities extending into third countries. The EESC welcomes the fact that the European Commission’s proposal actively seeks to address this.

3.3.

The EESC notes in this regard that, although the review of the European System of Financial Supervision was addressed in 2017 (1) and the EESC issued an opinion (2) on it, adopted in plenary on 15 February 2018, new insights and circumstances have prompted the need to amend the proposal by adding elements to make it more effective. Nevertheless, that earlier EESC opinion has lost none of its relevance. The EESC also welcomes the European Commission’s agile response to a series of banking scandals in several EU countries which confirmed that criminals are capable of exploiting technology and means of communication as well as the current legislation, in the process revealing the weaknesses of the EU’s money-laundering regime.

3.4.

The EESC notes that the new elements in the proposal are mainly of a technical and organisational nature; however, broader and more comprehensive measures are needed to redress the current situation. The EESC adds that the proposal concerns a narrow range of matters relating to increasing the powers of the EBA and stepping up its coordination with national supervisory authorities in the fight against dirty money (AML supervisors) and in certain cases some control over them. On the other hand, it does not address the work of Financial Intelligence Units (FIUs). The proposal concerns the coordination of activities and procedures more generally, rather than what the fight against money laundering actually consists of.

3.5.

The EESC emphatically warns that money laundering is not only a way to legalise the proceeds of activities considered as criminal and incompatible with the law, but also leads to a senseless allocation of resources in which the main aim of these operations is ‘not to be discovered’ and to ‘legalise’ the invested resources or transfer them to a place where further crime will be committed, rather than to achieve profit. At the same time, the EESC respects and highlights the fact that the amendment does not concern itself with analysing new trends or money laundering is occurring in the current circumstances. The proposal homes in on particular aspects of eliminating these shady practices, mainly bolstering the EBA’s role in relation to European Supervisory Authorities in addressing the fight against money laundering and the financing of terrorism and improving its coordination and communication with national supervisory authorities in instances of combating money laundering, which are part of banking or financial market supervisory authorities.

3.6.

The EESC attaches fundamental importance here to a proper division of competences between the EBA and national authorities, in keeping with the subsidiarity principle. Strengthening EBA powers in addressing cross-border transactions is absolutely vital, legitimate and justified. The EESC would add, however, that when it comes to exclusively national cases, where the EBA is not obviously relevant, powers must be left in the hands of national authorities.

3.7.

Given that combatting money laundering and the financing of terrorism is crucial to ensuring a healthy economic and financial environment throughout the EU, the EESC wonders whether it would not be a good idea to set up a dedicated organisation within the executive branch of the EU, such as a new directorate-general for this area. This is becoming an increasingly timely issue given that a new European Commission will be installed in the autumn of 2019.

3.8.

The EESC also asks on what basis it is proposed that the EBA should play a key coordinating role in tackling this problem. Does this mean that the European Commission thinks the banking sector provides the widest scope in the EU with regard to money laundering and the funding of terrorism?

3.9.

The EESC agrees that, in connection with the proposal, there must be effective communication on how the problem is being tackled. This communication should focus not only on effective communications between all the authorities involved (internal communication), but also on ensuring that the public arena (financial sector clients and the general public) is suitably informed.

4.   Specific comments

4.1.

The EESC calls for the proposal to set out very tangibly, in the form of an exhaustive remit for the whole financial market, the areas and relationships where the EBA will take a dominant position vis-à-vis other EU supervisory authorities in the fight against dirty money and financing of terrorism.

4.2.

In the same vein, the EESC calls for further clarification on the conditions under which the EBA may carry out supervision of the procedures of national supervisory authorities or directly issue decisions to individual operators in the financial sector.

4.3.

The EESC also takes a great interest in the nature of collaboration with third-country supervisory authorities.

4.4.

The EESC also asks for clarification of how all the relevant information on money laundering and the financing of terrorism furnished by national authorities is to be centralised in the case of secret or top-secret sources and how these will be protected.

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(1)  The original legislative proposal COM (2017) 536 final, 20.9.2017. Its aim was to boost the capacity of the European Supervisory Authorities to ensure convergence and effective supervision of the financial market, but did not specifically address strengthening their remit in combating money laundering and the financing of terrorism.

(2)  OJ C 227, 28.6.2018, p. 63.