CommuniqEU

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KEITH ZAHRA

ECONOMY

EC forecasts challenging Winter for Europe, but light at end of the tunnel

The European Commission is forecasting a challenging winter but sees light at the end of the tunnel as the vaccination process gathers pace. In its Winter 2021 Economic Forecast, the EC projects the euro area economy to grow by 3.8 percent in both 2021 and 2022. The forecast projects that the EU economy will grow by 3.7 percent in 2021 and 3.9 percent in 2022.

The euro area and EU economies are expected to reach their pre-crisis levels of output earlier than anticipated in the Autumn 2020 Economic Forecast, largely because of the stronger than expected growth momentum projected in the second half of 2021 and in 2022.

After strong growth in the third quarter of 2020, economic activity contracted again in the fourth quarter as a second wave of the pandemic triggered renewed containment measures. With those measures still in place, the EU and euro area economies are expected to contract in the first quarter of 2021. Economic growth is set to resume in the spring and gather momentum in the summer as vaccination programmes progress and containment measures gradually ease. An improved outlook for the global economy is also set to support the recovery.

Risks surrounding the forecast are more balanced since the autumn, though they remain high. They are mainly related to the evolution of the pandemic and the success of vaccination campaigns.

On the positive side, the forecast notes that NextGenerationEU, the EU’s recovery instrument of which the centrepiece is the Recovery and Resilience Facility (RRF), could fuel stronger growth than projected since the envisaged funding has - for the most part - not yet been incorporated into this forecast.

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KEITH ZAHRA

TRADE

Stronger trade enforcement rules enacted

Robust new trade enforcement rules have entered into force to further strengthen the EU’s toolbox in defending its interests. With the update of the EU’s Trade Enforcement Regulation, the EU is able to act in a broader range of circumstances.

The new rules upgrade the EU’s enforcement by empowering the EU to act to protect its trade interests in the World Trade Organization and under bilateral agreements when a trade dispute is blocked despite the EU’s good faith effort to follow dispute settlement procedures. The regulation previously only allowed action after the completion of dispute settlement procedures.

The new rules also expand the scope of the regulation and of possible trade policy countermeasures to services and certain trade-related aspects of intellectual property rights. The regulation previously only permitted countermeasures in goods.

The proposal to amend the existing Enforcement Regulation came as a reaction to the blockage of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute goes all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations and escape a binding ruling by simply appealing a panel report.

The revised Regulation enables the EU to react even if the WTO has not delivered a final ruling because the other WTO member blocks the dispute procedure by appealing to the non-functioning Appellate Body and by not agreeing to an alternative arbitration under WTO Dispute Settlement Agreement.

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KEITH ZAHRA

ENVIRONMENT

Commission to consult on environmental crime

The Commission has launched a public consultation on environmental crime, as parts of its efforts to review EU rules on the subject. The results of this public consultation will feed into the review of the EU rules on environmental crime.

The Directive (Directive 2008/99/EC) requires member states to treat activities that breach EU environmental legislation, such as illegal shipment of waste, trade in endangered species or in ozonedepleting substances, as criminal offences.

A legislative proposal for a revised Directive is expected by the end of 2021. An evaluation of the Directive, carried out in 2019-2020, concluded that room for improvement remains when it comes to reducing environmental crime and prosecuting offenders.

The revision addresses those issues, by making use of the EU’s reinforced competence in the field of criminal law under the Lisbon Treaty as well as ensure better coordination of the rules with other green initiatives. The public consultation will gather views from individuals and groups with interest and expertise in the matter, like members of the general public, academics, businesses and NGOs. The public consultation is open until 4 May 2021.

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KEITH ZAHRA

SOCIAL MEDIA

MEPs call for better regulation of social media

MEPs have called for democratic oversight of tech giants to safeguard freedom of expression.

In a debate with Secretary of State for European Affairs Ana Paula Zacarias from the Portuguese Presidency of the Council, and Commission Vice-President Věra Jourová, a number of MEPs from different political parties criticised the vast power of social media platforms and their worrying impact on politics and freedom of speech.

Citing various decisions taken by the platforms to censor content or accounts, a large majority in the chamber highlighted the lack of clear rules governing such decisions and the lack of transparency of big tech practices. They urged the Commission to address the issue in the Digital Services Act and the Digital Markets Act, and as part of the Democracy Action Plan.

Most speakers focused on the need to provide legal certainty when removing content, and to ensure that such decisions lie with democratically accountable authorities, and not with private companies, in order to safeguard freedom of speech.