Kangasala 2015 – Preparation Kit for Delegates

Kangasala 2015 Regional Session of EYP Finland

Preparation Kit for Delegates Kangasala, Finland 30th October - 1st November 2015

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Letter from the President Dear participants of Kangasala Regional Session of the European Youth Parliament Finland, It is my utmost pleasure to welcome you all to the Kangasala Regional Session of the European Youth Parliament Finland.

In less than two weeks, we will gather in the lovely town of Kangasala to discuss some of the most important and most recent events taking place in Europe under the theme “Entrepreneurship as Stepping Stone to European Markets”.

In the Preparation Kit that has been sent to you, you will find that the session topics have been carefully chosen to address some of the issues that concern us no only at a societal level but also at an individual level. We have all been proven by recent events that indifference is no longer an option in our era. As young Europeans, we all bear the responsibility to be firstly vigilant and informed, then active about the issues that concern us.

In my opinion, the European Youth Parliament stands out as a tool does not only repeat the cliché solutions offered by politicians, but offer a different perspective that the politicians cannot. That entails thinking free of the constraints that are imposed on us and offer constructive solutions to the issues that are considered taboos. Surely, one needs a vast amount of knowledge to be able to tackle the issues of great importance; but our claim is not about finding a better solution but offering a wider perspective. That is exactly why the topics we have chosen are aiming to tackle specific parts of the issues we have in hand rather than to address general issues that reached a deadlock.

In this regard, we will be debating on a variety of topics including the current immigrant crisis, positive discrimination of women, inclusion of immigrants in the labor force and the situation of Transatlantic Trade and Investment Partnership (TTIP). Our hope is that by debating on these topics, we will be able to analyze, evaluate and act differently than we can right now.

On behalf of the Chairs’ Team of Kangasala Regional Session, I invite you to share our enthusiasm and make this session a memorable event for all participants.

Regards, Osman Arda Sezer President of Kangasala 2015 – Regional Session of EYP Finland

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

European Youth Parliament (EYP) The European Youth Parliament represents a non-partisan and independent educational project, which is tailored specifically to the needs of the young European citizens. European Youth Parliament Finland, established in 2001, is the National Committee of the EYP in Finland.

The EYP encourages independent thinking and initiative in young people and facilitates the learning of crucial social and professional skills. Since its inauguration, many tens of thousands of young people have taken part in Regional, National and International Sessions, formed friendships and made international contacts across and beyond borders. The EYP has thus mad a vital contribution towards uniting Europe.

Today the EYP is one of the largest European platforms for political debate, intercultural encounters, political educational work and the exchange of ideas among young people in Europe. The EYP consists of a network of 41 European associations in which thousands of young people are active in a voluntary capacity.

The EYP is a programme of the Schwarzkopf Foundation.

European Union (EU) The European Union is an economic and political union of 28 Member States. The EU was established by the Treaty of Maastricht in 1992 upon the foundations of the European Communities.

The EU has developed a single market through a standardised system of laws, which apply in all Member States, and ensures the free movement of people, goods, services, and capital, including the abolition of passport controls within the Schengen area. It enacts legislation in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. Eighteen Member States have adopted a common currency, the euro.

With a view to its relations with the wider world, the EU has developed a limited role in foreign and defence policy through the Common Foreign and Security Policy. Permanent diplomatic missions have been established around the world and the EU is represented at the United Nations, the World Trade Organization (WTO), the G8 and the G-20.

The EU operates through a hybrid system of supranationalism and intergovernmentalism. In certain areas decisions are taken by independent institutions, while in others, they are made through negotiation between Member States.

The EU traces its origins from the European Coal and Steel Community and the European Economic Community formed by six countries in the 1950s. Since the, it has grown in size through enlargement, and in power through the addition of policy areas to its remit. The last amendment to the constitutional basis of the EU came into force in 2009 and was the Lisbon Treaty.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

The Institutions of the European Union The European Council is responsible for defining the general political direction and priorities of the EU. It comprises the heads of state of government of EU Member States, along with its President (currently Donald Tusk from Poland) and the President of the Commission.

The Council of the European Union (commonly referred to as the Council of Ministers) is the institution in the legislature of the EU representing the governments of Member States, the other legislative body being the European Parliament. The exact membership depends on the topic: for instance, when discussing agricultural policy the Council is formed by the 28 national ministers whose portfolio includes this policy area.

The European Parliament is directly elected parliamentary institution of the EU. Together with the Council, it forms the bicameral legislative branch of the EU. The Parliament is composed of 751 MEPs. The current president is Martin Schultz from Germany.

The European Commission is the executive body of the EU. It is responsible for proposing legislation, implementing decisions, upholding the Union’s treaties and the general day-to-day running of the Union. The Commission operates as a cabinet government, with 28 commissioners. The Current President is Jean-Claude Juncker from Luxembourg.

Other important institutions of the EU include the Court of Justice of the European Union and the European Central Bank.

The EU also has several agencies and other institutions.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Committee Topics 1. Committee on Constitutional Affairs (AFCO) Chairpersons: Nikos Avramidis (GR) & Saskia Kiiski (FI) Schengen Agreement in crisis: Denmark, Germany, Hungary, and the Netherlands have reinstated border controls and suspended Schengen Agreement temporarily due to the ongoing refugee crisis. With refugees flowing rapidly inside the Schengen Area and Member States preventing the freedom of movement, how should the EU secure the future of one of its greatest achievements?

2. Committee on Development (DEVE) Chairpersons: Tom Maes (BE) & Elina Mäkelä (FI) The primary function of the European Court of Auditors is to ensure that the taxpayers money is well spent: With the rising corruption in the EU candidate countries, how can the European Court of Auditors and the Supreme Audit Institutions in candidate countries cooperate to ensure appropriate distribution of funds?

3. Committee on Economic and Monetary Affairs I (ECON I) Chairperson: Zeynep Ekinci (TR) According to the OECD, immigrants tend to be more entrepreneurial than natives and constitute an important pool for potential entrepreneurs: What measures can the EU take in order to eliminate legislative and practical obstacles that prevent the establishment of new businesses by immigrants?

4. Committee on Economic and Monetary Affairs II (ECON II) Chairpersons: Niko Lammi (FI) & Geri Zeqo (AL) Rising youth unemployment and stagnant economy is threatening economic stability in Europe: Two out of every five young Europeans are willing to start their own business while nine out of every ten entrepreneurship attempts fail within the first three years. What precautions should the Member States take to ensure youth participation in entrepreneurship whilst ensuring a stable environment for economic growth?

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

5. Committee on Employment and Social Affairs (EMPL) Chairpersons: Simon Gasse (DE) & Klara Strindlund (SE) Off-shoring or re-shoring Europe: With companies shifting its production and services to low-cost countries, how should the European governments encourage businesses to bring back production and services to Europe whilst enabling high profits for its enterprises?

6. Committee on Women’s Rights and Gender Equality (FEMM) Chairpersons: Lisa Adrien Duerte (NL) & Philippa Rytkönen (FI) Only three out of every ten start-up entrepreneurs in Europe are women: Taking into account the consideration of women quotas in business, what stance should the European youth take towards positive discrimination of women?

7. Committee on Internal Market and Consumer Protection (IMCO) Chairperson: Leo Sjöberg (SE) Use of virtual currencies for crowdfunding start-ups: the European Commission has been conducting studies and campaigns to explore the full potential of crowdfunding for Small- and Medium-sized Enterprises (SMEs). Recent studies show that despite the volatility of virtual currencies, their use is still a rising trend. How can the EU ensure that the full potential of crowdfunding is being reached whilst ensuring the security of the internal market?

8. Committee on International Trade (INTA) Chairpersons: Tuuli Helind (EE) & Linda Turpeinen (FI) Future looks brighter for small and medium-sized enterprises (SMEs): 38% of SMEs are active internationally, meaning they either export or import. Experts have different opinions on whether Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) will help or halt SMEs’ economic growth in the international market. What position should the EU take towards the TTIP and CETA negotiations?

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

1. Committee on Constitutional Affairs (AFCO) Chairpersons: Nikos Avramidis (GR) & Saskia Kiiski (FI) Schengen Agreement in crisis: Denmark, Germany, Hungary, and the Netherlands have reinstated border controls and suspended Schengen Agreement temporarily due to the ongoing refugee crisis. With refugees flowing rapidly inside the Schengen Area and Member States preventing the freedom of movement, how should the EU secure the future of one of its greatest achievements?

Executive Summary Due to the current situation with the Islamic State in the Middle East and the Syrian Civil War in Afghanistan and Syria, vast numbers of refugees are arriving at European borders, especially the Greek and Italian shores. From there they try through the Balkans to enter the Central and Northern European countries seeking for a better future. In order to limit the rapid flow of refugees in their territories, many European countries have reinstated border controls at internal European borders, as local authorities claim that they have reached their limits. However, this action is viewed as a violation of the Schengen Agreement, fuelling its critics with new arguments and thus putting its economic and social success at great stake.

Main Problem After a welcoming stance towards the asylum seekers arriving to the country, the German government decided to impose border controls to the German-Austrian borders. As German officials urged to explain this was an emergency measure, as the influx of refugees was bigger than it was expected and the authorities’ ability to deal with the refugees had reached its limits. Berlin’s change of policy worked as a catalyst as more countries followed the same road. In response to the German decision, Slovakia, Austria, Denmark, Hungary and the Netherlands announced the tightening of supervision at their European borders with some of them even implementing border checks. In addition, Hungary had already set up a razor wire wall through its borders with Serbia, while a new legislation was passed allowing the police to arrest or even shoot refugees trying to cross the border. Moreover, the Hungarian government is examining the possibility of sealing its Croatian border as well, as its previous actions forced the refugees to find an alternative way of entering the country and then head to wealthier Member States i.e. Germany, Sweden or Finland, where they hope to find a brighter future.

However, the actions of individual Member States have raised public debate on both their humanistic nature and for their result on the cohesion of the EU. The decision of a bloc of countries to implement border checks between Members States was viewed by many as a violation of the Schengen Agreement. Signed in 1985 at the small town of Schengen in Luxembourg, this Agreement gradually abolished checks at common European borders and since then it has allowed the free movement and settle of citizens in 26 different countries. As a result, it has boosted the growth and the European economy, while it deepened the integration and understanding between Member States. It is important though to note that under Schengen rules signatories have the right to exceptionally reinstate border controls if this is necessary for public policy or national security reasons, but only for a maximum total of 30 days. However, the mass suspension of the agreement, it is feared to have opened the road for a final abolition of the Schengen Agreement.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

In defence of their decisions, Germany and Hungary claimed that for the free movement of people between the internal borders of the Schengen Area to work there must be proper protection of the external borders. The vast majority of immigrants and refugees trying to enter the EU is landing on the shores of Italy and Greece. Especially Greece has received intense criticism on its ability to protect its borders and is accused as one of the main reasons for this unprecedented influx.

However, with hundreds of thousands of asylum seekers arriving daily on the Greek islands authorities in the country are unable to record and provide the necessary documents for these people, as the current European legislation requires from the first host country. As a result, these people continue their journey to Central Europe without having applied for asylum and thus the problems of their recording and hosting is moved from one European country to the other. No country seems neither able nor willing to accept and provide asylum to those deserve it, letting them try their luck to their European neighbours. At the same time, most Member States fail to cooperate with both each other and with the European Commission in order to solve the problem in a spirit of solidarity that will distribute fairly and equally the problem across the EU. Main Actors, Interests & Conflicts EU citizens are able to cross internal borders of the Schengen Area without being subjected to border checks. However, some Member States have imposed borders controls due to current refugee crisis, which restricts the fundamental right of EU citizens to the right of movement.

Schengen Information System (SIS) is a large-scale information system that supports external border control and law enforcement cooperation in the Schengen States.

Visa Information System (VIS) allows Schengen States to exchange visa data. Together SIS and VIS facilitates and improves the communication between EU authorities in order for the member state authorities to cooperate in the area of border control.

Frontex promotes, coordinates and develops European border management in order to secure external borders of the EU. Member States are the 28 European countries part of the EU. These countries have the responsibility of implementing and applying EU legislation covering the European Asylum System, including reception conditions and asylum procedures.

However, Member States have limited resources in ensuring that the laws covering the European Asylum System are fully implemented.

European Commission (EC) promotes the interests of the EU by proposing and and enforcing legislation as well as implementing policies and the EU budget. The EC is responsible in ensuring the full application of EU law on migration and asylum.

Current Legislation & Policies The Treaty of Maastricht, signed in 1992, is responsible for the creation of the EU. The aim of the treaty is unifying policies on citizenship, currency and defence among the Member States. According to the treaty, freedom of movement is a fundamental right and the cornerstone of EU citizenship.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

The European Single Market refers to the EU as one territory without internal borders or regulatory obstacles in the movement of good and services. The Single Market seeks to guarantee the free movement of people, goods, services and capital – known as the ‘four freedoms’.

Schengen Agreement offers freedom of movement to 400 million EU citizens, who can cross the internal borders within the Schengen area freely. EU citizens can cross the internal borders of the Schengen area without a passport, whilst a visa is required for non-EU citizens. Schengen Agreement includes a common set of rules for the border control of the external borders of the EU and enhanced cooperation of police. Schengen Agreement states that Schengen States may reinstate internal border controls in order to secure national security. However, an EU regulation (No 1051/2013) specifies that such controls should remain as an exception and a measure of last resort.

Treaty of Amsterdam came into effect in 1999. Before that, the Schengen Agreement and its rules operated independently.

The Treaty of Amsterdam incorporated them into the legal frameworks of the EU. The EU has been working to create a Common European Asylum System (CEAS) and improve the current legislative framework in order to high standards and stronger cooperation between Member States.

The Dublin III Regulation, previously the Dublin II Regulation, is a EU regulation which establishes the principle that only one Member State is responsible for examining an asylum application. The objective is to avoid asylum seekers from being sent from one country to another, and also to prevent abuse of the system by the submission of several applications for asylum by one person.

The Global Approach to Migration and Mobility (GAMM) is a EU framework on the topic of external migration and asylum policy. The framework defines how the EU must conduct its policy dialogues and cooperation with non-EU countries. The objectives of the GAMM include preventing irregular migration, promoting international protection and maximizing the development impact of migration and mobility.

Perspectives Many claim that imposing internal border controls is essential in order to preserve public and national security. Hence, it is argued that suspending the implementation of the Schengen Agreement is a way to guarantee its safe implementation in the future. However, is it right and rational from the constitution to implement a treat à la carte, according to the need of the moment? Could such a stance be justified under extreme circumstances?

On the other side, some support free movement of refugees inside the Schengen Area, viewing any arguments for security threats irrational. It is also argued that access to the Schengen Area should be given to anyone seeking for it. But with constantly increasing numbers of refugees crossing the Schengen Area how is it possible for Member States to control who and for what reasons seeks asylum in the EU? Given the fact that according to the UN regulation there are certain occasions under which a person is been considered a refugee, and thus is entitled to asylum, how can Europe guarantee that no abuse of this right is been conducted?

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

At the same time, countries that refugees first enter seem unable to implement sufficient supervision of the external borders. To what extent should the EU intervene in order to guarantee the safety of its borders? What measures could be taken in order for those Member States to properly respond in the challenge of supervising the external border of the Schengen Area?

In addition, what solution can be found in the constitutional issue that come up because of the Dublin II Regulation? Should immigrants be able to apply for asylum in the Member State of their own preference or the current system could still work?

To respond to the crisis and to relieve the pressure on the Member States mostly affected by the refugee crisis the European Commission has proposed a plan for the relocation of 160,000 refugees from Greece, Italy and Hungary in the next two years. Those people will be distributed across the 28 member states accordingly to each country’s size and economical situation. The plan was finally accepted by head of states, but with a wide criticism by many Member States, especially by the ones on the Eastern border of the Union. Despite the negative reactions, this number is still a small proportion of the total number of immigrants and refugees entering the EU each year.

Bearing all this in mind, what improvements, if any, could be done on the commission’s’ plan? How could countries objecting to this common decision be convinced to actively support the Commission’s plan? In what ways could the external European borders be safeguarded and whose actor this responsibility should be. Is it an individual responsibility of the each Member State or a common obligation? Finally, how could the current asylum granting system be regulated in order to meet the requirement of the new crisis and all of these while guaranteeing that the benefits of the Schengen Agreement are preserved, without endangering the security of the European citizens.

Key Words Refugee, Schengen Agreement, Member States, asylum seeker, the 2015 Refugee crisis, migrant Definitions A refugee is a person who is forced to leave their home country in order to escape persecution, war or natural disaster.

A migrant is a person who moves from one country to another, often to find better work or living conditions An asylum seeker is a person who claims to be a refugee, but whose status has not been definitively evaluated and has not been granted refugee status.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Statistics EU Member States received 626,000 asylum applications in 2014. From these application around 185,000 were granted the asylum status. On the first half of 2015 the EU received another 395,000 new asylum applications.

German authorities had firstly predicted that the country will receive 800,000 refugees, a number that was increased in 1 million, after the refugee influx reached its peak.

Links Schengen Agreement and the Refugee Crisis https://www.youtube.com/watch?v=sGegWCS24ZE Schengen Agreement for starters: http://www.bbc.com/news/world-europe-13194723 Following Germany’s example: Re-imposing border controls http://www.nytimes.com/2015/09/15/world/europe/europe-migrants-germany.html?_r=0 Information on the Schengen policy http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/borders-and-visas/index_en.htm The common European Asylum System http://ec.europa.eu/dgs/home-affairs/e-library/docs/ceas-fact-sheets/ceas_factsheet_en.pdf

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

2. Committee on Development (DEVE) Chairpersons: Tom Maes (BE) & Elina Mäkelä (FI) The primary function of the European Court of Auditors is to ensure that the taxpayers money is well spent: With the rising corruption in the EU candidate countries, how can the European Court of Auditors and the Supreme Audit Institutions in candidate countries cooperate to ensure appropriate distribution of funds?

Executive Summary Candidate countries (Macedonia, Turkey, Albania, Montenegro, Serbia) face considerable systematic corruption issues in their public institutions. For citizens, this has ramifications on everyday life and creates a system where public interest is not always served. For the country, it hinders economic development and undermines democratic values.

Corruption in candidate countries damages the country’s prospects to enter the EU. Experience gained in the 2004 enlargement (Bulgaria and Romania) led to more vigorous stance on anti-corruption.

Progress towards even higher standards of incorruption is possible through ‘soft law’ mutually agreed, non-legally binding policy recommendations.

Main Problem Global developments have made the strengthening of democratic institutions more important than ever. The economic crisis has underlined the need for all countries to improve economic governance, and recent events in Europe have highlighted the importance of inclusive democratic processes for good decision-making.

Yet, corruption remains one of the major issues of the accession process of EU candidate countries. The consequences are deteriorated living standards for citizens of these countries, distorted elections and gaps in legislation, and hindered economic development. Progress has been uneven and several countries continue to struggle with systematic corruption in their public institutions. Further efforts are needed in regards to the financing of political parties and election campaigns, the management of conflicts of interest, transparency in public procurement, access to information and the seizure and confiscation of assets.

The Copenhagen membership criteria require EU countries to respect the rule of law. Candidate countries must therefore tackle issues such as judicial reform, and fight crime and corruption early in accession negotiations. According to the European Commission’s 2014 press release: all the countries in the Western Balkans and Turkey need to undertake further reforms to ensure that the principles of freedom of expression and the rights of persons belonging to minorities are respected in practice. More robust measures are needed to protect other vulnerable groups from discrimination, LGBT communities in particular. The Commission will further examine these issues in the accession process, through better targeted pre-accession funding and increased assistance to support Roma inclusion through a Roma “facility”.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Main Actors, Interests & Conflicts European Commission: The European Commission continuously assesses efforts made by countries wishing to join and reports once a year through its annual progress reports.

European Court of Auditors (ECA): checks EU funds are collected and used correctly, and helps improve EU financial management. It does not have legal powers, but works to improve the European Commission’s management of the EU budget and reports on EU finances. Reports fraud, corruption or other illegal activity to the European Anti-Fraud Office (OLAF).

International Organisation of Supreme Audit Institutions (INTOSAI): an autonomous, independent, non-political umbrella organisation for the external government audit community. Provides an institutionalised framework for Supreme Audit Institutions to promote development.

Current Legislation & Policies European Fund for Strategic Investments (EFSI): The EFSI aims to overcome current market failures by addressing market gaps and mobilising private investment.

International standards of supreme audit institutions (ISSAIs): The ECA applies audit principles based on these standards.

EU law (legislation): Holds the general principles of law, written by the ECJ, and have therefore a counterpart as well in the national laws of the Member States. The ECA is obliged to follow it’s instruction and restrictions.

The Court of Justice of the European Union (ECJ): makes sure that the ECA acts in accordance with EU legislation.

Key Words Corruption, cooperation, accession process, candidate countries, European Court of Auditors.

Definitions Auditor: A person appointed and authorized to examine accounts and accounting records, compare the charges with the vouchers, verify balance sheet and income items, and state the result.

Institutionalized: To become accepted and used by many people, to establish (something) as an institution.

Court: A judicial tribunal duly constituted for the hearing and determination of cases.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Statistics Corruption rating of the EU candidate countries http://ec.europa.eu/enlargement/pdf/publication/2014/131106_some_t8_factsheet_en.pdf Perspectives Even though ECA has tried to make some improvement in the last few years on corruption within EU finances, leading NGOs (ActionAid, Eurodad and Oxfam) warned that placing the private sector at the centre of EU development policy shows ministers have failed to acknowledge its limitations. Most Auditors acknowledge that there are some serious problems concerning corruption, and they are determined to solve them all. Are their plans actually working, or are the NGOs right after all?

Links EU enlargement factsheet: http://ec.europa.eu/enlargement/pdf/publication/2014/131106_some_t8_factsheet_en.pdf EU enlargement press-release and country-specific memos: http://europa.eu/rapid/press-release_IP-13-930_en.htm ECA http://www.eca.europa.eu/Lists/ECADocuments/JOURNAL15_09/JOURNAL15_09_EN.pdf

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

3. Committee on Economic and Monetary Affairs (ECON I) Chairperson: Zeynep Ekinci (TR) According to the OECD, immigrants tend to be more entrepreneurial than natives and constitute an important pool for potential entrepreneurs: What measures can the EU take in order to eliminate legislative and practical obstacles that prevent the establishment of new businesses by immigrants?

Executive Summary In OECD countries, around %13 of foreign-born workers are self-employed. Migrants represent around 12% of the selfemployed not working in agriculture, a percentage that changed little between 2005 and 2010. In some countries such as Czech Republic and Poland, the self-employment rates of immigrants are even much higher than those of the natives. Even though the eagerness the immigrants have for starting a business is incontestable, the continuity of businesses are usually challenged by many impediments such as cultural/linguistic obstacles, legal difficulties, limited labor market and career opportunities, and lack of information, knowledge and linguistic skills.

Main Problem As a matter of fact, introducing immigrants to the entrepreneurship in Europe can contribute to economic growth and increase of jobs on the labour market. Migrant entrepreneurship, along with local start-ups, revitalise rather unpopular city districts and local markets. As migrant businesses are mainly micro-businesses with no or very few employees, they also have smaller turnover and profits in comparison with indigenous businesses.

Taken all the above mentioned statements into account, a closer look must be taken to migrant entrepreneurs issue. The situation is quite delicate: although migrant entrepreneurs’ presence can be a great fuel for economy all around Europe, migrants who would like to create their start-up companies have to meet face to face with a wide variety of difficulties.

Living as a migrant alone can be challenging; yet the obstacles they have to overcome can make their lives even worse in spite of all their zeal.

It is also true that no Member State has unlimited resources, and the EU Member States should be aware of any discrimination which may harm the fairness and equality among all their citizens. Facilitating the negatively discriminating difficult conditions the migrant entrepreneurs may confront while taking into consideration logical and fair treatment for all should be the most important approach the Member States should have regarding this issue.

Main Actors, Interests & Conflicts Migrant entrepreneurs/banks/policy makers interrelated issues: 1. Financial obstacles: Immigration procedures by themselves can be difficult for an immigrant entrepreneur, let alone the financial obstacles faced throughout a start-up attempt. Banks are more likely to act discriminatively against immigrants: business loans and other financial support might be more difficult to attain than native entrepreneurs. On the other hand, migrant entrepreneurships are regarded as more likely to experience failure, which may justify banks’ constraints.

European Youth Parliament Finland – EYP-Finland ry Uudenmaankatu 15 A 5, 00120 Helsinki http://www.eypfinland.org – info@eypfinland.org

Ethnic minorities and immigrant entrepreneurs are among the strongest users of non-bank and informal finance, such as credit unions, microfinance schemes and moneylenders. The problem is that although this enables business start-ups, it may not be sufficient for later business development. Additionally, some immigrant entrepreneurs experience a loss of social capital as a result of their immigration.

Problems such as more frequent loan denials and higher interest rates for ethnic minority entrepreneurs may also reflect structural weaknesses of the businesses run my immigrants regardless the strength of their applications.

2. Regulatory Obstacles: The immigrants may have difficulties understanding the regulations. Bureaucratic system or the laws of a particular country may be difficult to crack for immigrant entrepreneurs. Legal obstacles to establish businesses are likely to be present. Immigrants may also have settlement obstacles, immigrants on short term-temporary visas are more likely to have no support in that regard. (receiving credits, recruitment process difficulties etc.)

3. General Obstacles: The migrant entrepreneurs may lack proper guidance for starting a new business. Different host societies have different entrepreneurial conditions and the immigrants might be in need of guidance. Offering comprehensive and integrated entrepreneurship education at all levels of the formal education system, initiating training programs, raising public awareness, encouraging business development support services in order to offer counseling to willing immigrants might be helpful in order to lower obstacles of these sorts.

Starting a new entrepreneurship need a wider social circle, and the integration policies in the host country should be well implemented in order to minimize the social prejudices for a migrant entrepreneurship.

The dialogue between policymakers, practitioners and immigrant stakeholders should be organized by host countries.

Current Legislations & Policies While the European Commission, notably the Directorate-General for Enterprise and Industry, promotes ethnic entrepreneurship, the actual design and implementation of policies has been left to the individual Member States. The basic assumption is that ethnic entrepreneurs, because they are entrepreneurs first and foremost, will benefit anyway from general measures taken to increase the number of entrepreneurs and to strengthen the quality of entrepreneurship.

Such measures include deregulating the economy, making the bureaucracy more transparent and service-oriented, making tax regimes more favourable, promoting microcredit systems, making entrepreneurship education part of the regular curricula, and introducing a variety of supportive measures.

Conclusions and Recommendations of the European Commission’s Network “Ethnic Minority Businesses” International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families: A United Nations multilateral treaty governing the protection of migrant workers and families, signed on 18 December 1990, entered on force on 1 July 2003 after the threshold of 20 ratifying States was reached in March 2003. The Committee on Migrant Workers (CMW) monitors implementation of the convention, and is one of the seven UN-linked human rights treaty bodies.

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International Labour Organisation (ILO) Conventions: - C097 - Migration for Employment Convention (Revised), 1949 (No. 97) - C143 - Migrant Workers (Supplementary Provisions) Convention, 1975 (No. 143) The European Commission has publicly recognised the contribution of migrants to the economy in the European Agenda for the Integration of Third-Country Nationals (COM(2011) 455 final and SEC(2011) 957 final).

Perspectives The globalised world and its conditions are affirming the permenancy of the immigrants. Immigrants can help a country draw a more stabilized map through prosperity and economic development. Yet in different points of view the more access and oppurtunities migrant entrepreneurs have, the more competition takes place in the market which could be a disadvantage for the local citizens theirselves. In other words, questions and suspicions towards immigration in general appliques vastly for entrepreneurship-related issues from local citizens’ perspectives. Under these circumstances, would it be more logical and just to enhance all kind of standards of migrant citizens in order to praise their eagerness for their own start-up businesses or should a country scrutinize carefully all conditions for not perpetruating with natural balance in the country?

Key Words & Definitions Immigrant: A person who comes to live permanently in a foreign country.

Entrepreneur: A person who sets up a business or businesses, taking on financial risks in the hope of profit.

Organisation for Economic Co-operation and Development (OECD): The Organisation for Economic Co-operation and Development (OECD)is an international, economic organization consisting of 34 member states, which was founded in Paris, 1961. The organisation aims to promote policies that will improve the economic and social well-being of people around the world.

European Foundation for the Improvement of Living and Working Conditions (Eurofound): A European Union agency, set up in May 1975 by the European Council to help improve living and working conditions across Europe, and was one of the first bodies established to work on a specific subset of EU policy.

Links Migrant Entrepreneurship in OECD Countries http://www.oecd.org/els/mig/Part%20II_Entrepreneurs_engl.pdf The Missing Entrepreneurs: Policies for Inclusive Entrepreneurship in Europe http://www.oecd.org/industry/the-missing-entrepreneurs-2014-9789264213593-en.htm

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Further links Migration Policy Debates: How can migrants’ skills be put to use? http://www.oecd.org/els/mig/migration-policy-debates-3.pdf Rights of Migrant Workers in Europe http://europe.ohchr.org/Documents/Publications/Migrant_Workers.pdf Ethnic entrepreneurship http://www.eurofound.europa.eu/publications/report/2010/social-policies-business/ethnic-entrepreneurship-conceptpaper

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4. Committee on Economic and Monetary Affairs (ECON II) Chairpersons: Niko Lammi (FI) & Geri Zeqo (AL) Rising youth unemployment and stagnant economy is threatening economic stability in Europe: Two out of every five young Europeans are willing to start their own business while nine out of every ten entrepreneurship attempts fail within the first three years. What precautions should the Member States take to ensure youth participation in entrepreneurship whilst ensuring a stable environment for economic growth?

Executive Summary With 5.6 million unemployed young people (under 25) in the EU, drastic labour market improvement becomes crucial. One of the solutions to alleviate the situation of young professionals in Europe is to promote youth entrepreneurship. Growth is primarily driven by new companies, therefore start-ups and small firms are essential to create jobs and avoid the looming lost generation. Entrepreneurship serves as a tool to develop talent and stimulate innovation as well as a solution for decreasing unemployment.

Main Problem Youth unemployment is one of the main social and economic challenges of the decade in Europe and around the world.

Unemployment can have serious long-term effects for individuals, such as reduced earnings and social exclusion. In addition, the unemployed represent a significant stock of unused economic capital that lowers output and the potential for economic growth. The unemployment rate in the European Union reached 9.8% in November 2011 and youth unemployment stood at 22.3%. A striking feature of the recent crisis has been the diversity of labour market performances among the EU countries. Although youth unemployment rates in Germany and Luxembourg declined slightly between 2008 and 2010, the situation of the labour market in other Member States has drastically worsened. Those countries which were hit the hardest by the recession are those with the highest youth unemployment rates – Greece, Spain, Italy, Latvia, Lithuania, Portugal and Slovakia all had youth unemployment rates exceeding 30% in November 2011, while Ireland had a rate of just under 30%. The problem has been felt more strongly in the EU than in the OECD area, where youth unemployment rate was 20% lower in 2010.

There are some slight differences caused by gender to these patterns. The unemployment rate for young women, overall in the EU, was 1.6 percentage points lower than the rate for young men. However, the rates for young people of both genders are very high, and much higher than those for adults. It might be expected that the economic crisis would impact young people much more than adults because of their higher propensity for temporary work and drying up of opportunities to enter the labour market while seeking for the first job. In reality, the increase in youth unemployment was not much more than it is for adults. Table 2 shows that for the EU as a whole, the youth unemployment rate was slightly more than double the adult rate in 2010 and this ratio has been fairly constant over the past decade. However, what this hides is a dramatic drop in the participation rate of youth, which far exceeded the drop in participation for adults.

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Main Actors, Interests & Conflicts The Young Entrepreneurs’ Organization (YEO) emerged during the 1990s to offer educational opportunities and other kinds of support to young business owners. Its mission is to provide the members with mentoring, peer networking, and educational opportunities. Another popular EO program is its so-called Inventory of Skills (IOS), in which members can turn to fellow members to solve business problems or garner information on business issues they are facing.

The European Alliance for Apprenticeships brings together public authorities, businesses, social partners, VET providers, youth representatives, and other key actors to promote apprenticeship schemes and initiatives across Europe.

One of the most important actors is definitely the European Commission. It is responsible for providing action plans as well as proposing laws to the Council of Europe and the European Parliament.

On the national level, national governments are responsible for most of the regulation which can be applied to entrepreneurship. Universities, schools, local investors and businesses as well as business incubators are also included to the a actors that have a vested interest in any given decision.

Perspectives Unfortunately, Europe still lacks an entrepreneurial mind-set compared to other continents. Europeans – old and young – prefer to be employed due to income security and risk issues. However, the recent trends proved that the potential is pretty promising: nearly a quarter of EU respondents have started a business or are thinking about starting one. 51% of young Europeans (aged 15 to 24) stated that self-employment is desirable, while only 18% of the age group older than 55 confirmed the same. A quarter of young Europeans thinks about starting their own company and in the same time, only 3% of the older generation even considers this step. Recent research by the OECD confirms this trend and reveals a scope for more self-employment.

The next generation of entrepreneurs has a lot of growth potential; their start-ups grow twice as fast as new companies set up by older peers. These digital natives understand much better the scope and opportunities of the digital economy.

It is easy for them to become a ‘micro-multinational’ right from the start. According to the study conducted by European Migration Network (EMN), the youth’s entrepreneurial potential and their contribution to social progress are underestimated. Also, there is a need to highlight the difference between ‘necessity-driven’ and ‘opportunity-driven’ entrepreneurship.

Many people are self-employed because due to the lack of available jobs like Italy and rigid labour laws like the Netherlands and Spain.

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Key Words & Definitions Entrepreneurship - the process of starting a business, typically a start-up company offering an innovative product, process or service.

Means of implementation - the term refers to the way the EU will raise youth entrepreneurship without effecting its economic growth.

Youth unemployment rate - the percentage of the unemployed in the age group 15 to 24 years old compared to the total labour force (both employed and unemployed) in that age group.

Unemployment ratio - the percentage of unemployed young people compared to the total population of that age group (not only the active, but also the inactive such as students).

OECD is an international economic organization of 34 countries, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.

Links Youth unemployment rate in Member States: http://www.statista.com/statistics/266228/youth-unemployment-rate-in-eu-countries/ Policy brief on Youth Entrepreneurship: http://www.oecd.org/cfe/leed/Youth%20entrepreneurship%20policy%20brief%20EN_FINAL.pdf Youth entrepreneurship can save Europe: http://www.euwatcher.eu/blog/youth-entrepreneurship-can-save-europe/ Youth Strategy http://ec.europa.eu/youth/policy/youth_strategy/empl_entrepreneurship_en.htm Youth Global Entrepreneurial Program https://www.youtube.com/watch?v=u5FaoW4DiCU

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5. Committee on Employment and Social Affairs (EMPL) Chairpersons: Simon Gasse (DE) & Klara Strindlund (SE) Off-shoring or re-shoring Europe: With companies shifting its production and services to low-cost countries, how should the European governments encourage businesses to bring back production and services to Europe whilst enabling high profits for its enterprises?

Executive Summary Since the Industrial revolution, companies were eager to exploit competitive advantages to improve their market position and increase their profits. Due to more favorable conditions on the other side of the globe and fostered by technological innovations, offshoring of products and services became an advantage.

Offshoring gives companies the opportunity for economical advances and lets them focus on their core business but carries risks such as giving away internal knowledge and to some extend losing control over a business process.

Together, this raises the question of how European countries can ensure attractive market conditions or take other measures to bring back production and services without endangering the profits of their enterprises.

Main Problem From the 1980s to the 2000s, the EU faced substantial offshoring of EU production to China and the east-Asian tiger states.

This process was fuelled by significant cost savings, loose regulations, low environmental standards and acceptable product quality offered in developing countries. With the spread of reliable information and communication technology (ICT), especially broad-band internet connection, offshoring was extended to services, resulting in back offices and call centers in developing countries.

However, high rises in wage and transportation fares raised the total cost of products and services from developing countries. Besides the total cost, companies involved in offshoring struggle with cultural barriers, intellectual property issues and an administrative overhead. Reshoring and nearshoring become options that European companies take into consideration. With the number of factual reshoring cases being very modest, the European Commission seeks to reverse the manufacturing’s declining share of GDP. Yet, other reasons restrain companies from shifting back their production and services. Many hope to expand in the emerging markets, want to keep their vicinity to key customers and secure the local supply chains. In today’s economies, most goods and services are brought to the customer via global value chains, profiting from the best wage-productivity profiles available , which exacerbates the problem of shifting business processes back to Europe.

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Main Actors, Interests & Conflicts The national governments in Europe have two contradictory incentives: For the financial situation of their country, they want to attract and keep prosperous companies, independent of whether or not those companies offer work. In that sense, they see it as acceptable if a company improves its economical situation by offshoring. But for the welfare of the workforce, their people and voters, governments are interested in attracting companies that create jobs, and consider rather reshoring than offshoring.

The workforce in European countries is majorly interested in well paid, challenging and secure jobs. In their view, offshoring carries the risk of job losses. In consequence, the workforce welcomes reshoring.

The biggest interest of companies is to improve and secure their economical situation. Besides this, they strive to grow, employ a motivated workforce, innovate and keep customers happy. In the perspective of companies, offshoring offers a lot of chances, including lower total costs, a better position to attract talents, market opening and secure supply chains. Many enterprises nowadays divide up their business processes and receive supply products and services via global value chains at the best cost-quality profile. Concluding, companies have no objections about shifting their production or services to Europe - as long as their other interests are satisfied.

Current Legislation & Policies European Globalisation Adjustment Fund (EGF): This fund provides support to people who lost their jobs as a result of major structural changes in world trade patterns due to globalisation, such as offshoring. Co-financed projects reach from help with looking for a job, over education, training and re-training, mentoring and coaching to entrepreneurship and business creation. The EGF provides no direct financial aid in terms of social protection measures such as pensions or unemployment benefits.

Perspectives There is a lot of controversy surrounding the issue of offshoring regarding the unemployment issues, making protectionism more appealing.

Empirical economical studies have confirmed a negative impact on employment on relatively low-skilled tasks, caused by offshoring. However those studies consider only the loss of jobs and not their possible recreation.

Should the EU protect its inner market from foreign competition? Also to what extend protectionism can be useful has to be discussed.

Due to salary rises in China and east-Asian tiger states , a new tendency is for international companies to divide up their production and reshore as a strategy to be closer to the large markets of the EU and US. This could give Europe an opportunity to regain its industrial strength but companies experience difficulties finding qualified workers. Future more, reshoring will most likely not recreate the jobs lost due to offshoring since automation and robotics enable companies to

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produce with less manpower. Such production lines can work longer hours and are more reliable than human workers. In order to recreate jobs, useful qualifications on the future labor-market may lay in the field of production automatisation.

What other qualification will be required on the future labor-market? A grave problem will be how any EU action can be successful without harming the profits of European enterprises.

Key Words offshoring EU, reshoring, offshoring Europe, outsourcing, effects of offshoring Definitions Offshoring describes the relocation of business processes from one country to another.

Outsourcing involves the contracting out of a business process to another company or organisation. If the suppliers of the outsourced business process are located outside of the country, it is called offshore outsourcing.

Reshoring denotes the partial or total return of business processes previously offshored to low-wage countries back to the original country, to serve local, regional or global demand.

Links European Parliamentary Research Service: Reshoring of EU manufacturing, Briefing 21/03/2014 http://www.europarl.europa.eu/EPRS/140791REV1-Reshoring-of-EU-manufacturing-FINAL.pdf W. Werner, Professor of International Economics: Service Offshoring - Is Europe Different? http://www.intereconomics.eu/downloads/getfile.php?id=675 Financial Times: Reshoring offers a real opportunity to restore EU competitiveness http://www.ft.com/cms/s/0/45e49ade-aecd-11e3-aaa6-00144feab7de.html Opinion of the European Economic and Social Committee on the ‘Reshoring of EU industries in the framework of reindustrialisation’ http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52013IE6859&from=EN European Manufacturing Survey: Offshoring of production - a European perspective http://www.isi.fraunhofer.de/isi-wAssets/docs/i/de/publikationen/ems2e.pdf Web portal of the European Commission on the European Globalisation Adjustment Fund http://ec.europa.eu/social/main.jsp?catId=326

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Further links Economist: After decades sending work across world companies are rethinking their offshoring. http://www.economist.com/news/special-report/21569572-after-decades-sending-work-across-world-companies-arerethinking-their-offshoring Professor M. Knell of innovation, research and education and Associate Professor M. Rojec in social science European offshoring: Where and Whence, 2009, http://www.etsg.org/ETSG2009/papers/knell.pdf

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6. Committee on Women’s Rights and Gender Equality (FEMM) Chairpersons: Lisa Adrien Duerte (NL) & Philippa Rytkönen (FI) Only three out of every ten start-up entrepreneurs in Europe are women: Taking into account the consideration of women quotas in business, what stance should the European youth take towards positive discrimination of women?

Executive Summary Too few women hold top positions within companies. Norway was the first European country that tried to change this by gradually implementing ‘women-quotas’ in various sectors. Other countries started following their lead including Germany that recently tagged along. The effects of the quotas have been differing per country and opened a big debate. The question is whether or not these quotas are effective and if this is the solution.

Main Problem Currently the European Union has not enough women in top positions and changing this would be advantageous for everyone. Across the 27 EU countries only 27% of the ministerial posts (senior ministers) are in the hands of women. This does not only have to do with gender-discrimination and pay-gap but also with parental-leave and the stereotypes attached to that.

Not to mention that in 2004 there were only 10 million self-employed women in Europe, which is far from being enough.

A lot of research has been done on this subject and a majority of the results showed that companies with women in board positions perform better. Some countries try to convince companies to recruit more women by showing them examples of where the effect was ‘good for business’ and that it contributes to the general economic growth. For instance, the recently (2008) updated code for women quotas within companies in Finland demonstrated that firms led by women are more profitable (10-20%) than those led by men.

There are two main arguments used by countries who do not want to implement quotas: It restricts their freedom of choice and selection for their companies; and the supposed lack of qualified women.

The latter has to do with the fact that most talent pools often do not include female talents and the prejudices about women in leadership roles.

Main Actors, Interests & Conflicts Member States: There are only a few countries in the EU (e.g. Belgium, France, Greece, Portugal, Spain, Slovenia and Poland), which have implemented gender quotas in their legislations with various results. There are big differences between penalties if these quotas are not being fulfilled. For instance, Belgium has a quota of min. 33% women on boards of state and publicly listed companies. If the quota is not reached the board loses benefits until the quota is fulfilled.

Non-profit associations: According to Leila Khaïat, World President of Les Femmes Chefs d’Enterprises Mondiales (FCEM), non-profit associations have been central to the emergence of women entrepreneurs. Non-profit associations may play a significant supporting role in leadership, technology, professional training, information, research for financing and credit, mentoring and advice.

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Motivational factors: Some studies have shown that women have different motivational factors than men when it comes to starting a business. Women usually desire flexibility and independence in order to also be able to provide care for their children. This is very typical in countries where subjective childcare for everyone is not implemented.

Other factors: According to BBS’s article in 2004 women lack confidence in starting an enterprise. They also do not know any other entrepreneurs and lack of networking opportunities. Women also often do not think that they have enough skills to run a business.

Current Legislation & Policies There is no common legislation for gender quotas, however a gender quota of 40%, which would apply to all publicly traded companies in all Member States was proposed in 2012, but was never put into practice.

However, some countries have put policies into practice on a national level. Minimum representation of women on boards of state-owned companies has been controlled through legislation in Norway, Denmark and Finland. In Norway at least 40% of each gender has to be selected for publicly appointed boards, councils and committees. In Finland soft quotas has been used in companies with over 30 employees in the private sector.

Perspectives What kind of perspective does this give for the future? Are these quotas going to work long term and will it be enough to reach gender equality? The success of these quotas also rests on the shoulders of women. They need to be role models for future women and should encourage them to follow their path instead of rejoicing at ‘being the woman that made it’. The questions below would be a good guideline to understand the topic better: • Can universal gender quotas really be applied in all member countries?

• How can cultural attitudes be changed when it comes to entrepreneurship?

• Are quotas really the answer?

Is positive discrimination needed to bring equality to women?

• Does the different approach Finland and Sweden take seem more efficient than the quotas? Would this work for the rest of the EU? • Should the EU maybe work with allowances?

Key Words Feminism, Quotas, Inequality, Parental leave, Child care, Role models, economic growth,

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Definitions Quota-instrument: a positive measure that establishes a fixed percentage or number for the representation of a specific category of persons. Quotas can be included in legislation (in electoral, equality, labour, and constitutional law) or applied on a voluntary basis (like voluntary political party quotas, soft targets).

Gender mainstreaming: Mainstreaming gender perspective is the process of assessing the implications for women and men of any planned action, including legislation, policies or programs, in all areas and at all levels. It is a strategy for making women’s as well as men’s concerns and experiences an integral dimension of the design, implementation, monitoring and evaluation of policies and programs in all political, economic and societal spheres so that women and men benefit equally and inequality is not perpetuated.

Glass ceiling: Barrier through, which the next stage or level of advancement cannot be reached by a section of qualified and deserving employees. Such barriers exist due to implicit prejudice on the basis of age, ethnicity, political or religious affiliation, and/or sex. Although generally illegal, such practices are prevalent in most countries.

Positive discrimination: (In the context of the allocation of resources or employment) the practice or policy of favouring individuals belonging to groups which suffer discrimination.

Links The Quota-instrument: different approaches across Europe http://ec.europa.eu/justice/gender-equality/files/quota-working_paper_en.pdf Cable hints at mandatory EU quotas for female executives http://www.theguardian.com/business/2015/feb/04/cable-women-boardroom-mandatory-quotas Women on boards: Are quotas really the answer? http://fortune.com/2014/12/05/women-on-boards-quotas/ Germany Sets Gender Quota in Boardrooms: http://www.nytimes.com/2015/03/07/world/europe/german-law-requires-more-women-on-corporate-boards.html?_r=0 Like it or not, Europe’s quota system puts women on boards http://www.cnet.com/news/like-it-or-not-europes-quota-system-puts-women-on-boards/ Is positive discrimination needed to bring equality to women? http://idebate.org/nl/discussions/social-policy/positive-discrimination-needed-bring-equality-women

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Further links Should the EU implement gender quotas? http://www.debatingeurope.eu/2013/03/04/should-the-eu-implement-gender-quotas/#.Vgf_v2DlfzI Only Gender Quotas Can Stop the E.U. from Being a Boys Club http://time.com/3220131/gender-quotas-european-union/

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7. Committee on Internal Market and Consumer Protection (IMCO) Chairperson: Leo Sjöberg (SE) Use of virtual currencies for crowdfunding start-ups: the European Commission has been conducting studies and campaigns to explore the full potential of crowdfunding for Small- and Medium-sized Enterprises (SMEs). Recent studies show that despite the volatility of virtual currencies, their use is still a rising trend. How can the EU ensure that the full potential of crowdfunding is being reached whilst ensuring the security of the internal market?

Executive Summary With an ever-increasing number of startups in Europe, business owners are exploring new means of funding. One of the fastest growing options is crowdfunding. However, high costs lead business owners to look for alternatives, with virtual currencies (VCs) being one of the best prospects. However, due to their unregulated nature, VCs can be very volatile, discouraging many business owners from opting for it. The lack of an assurance for stability is currently one of the biggest obstacles to the potential of VC crowdfunding.

Main Problem While reward-based crowdfunding works excellent for companies that are able to supply physical awards, it is not as straightforward for businesses supplying a service to their customers. For those companies, equity crowdfunding is a much better solution. However, the costs charged for equity crowdfunding are often high, due to costs of international transactions and the relatively small volumes often dealt with in crowdfunding. For this reason, virtual currencies (VCs) provide an interesting prospect; international micro-payments at a negligible transfer rate.

Nonetheless, virtual currencies have a few pitfalls. All VCs lack a physical counterpart with legal tender status, which first and foremost means that no traditional financial actors, central banks included, are involved. The implication of this is then that no traditional measures of control can be applied, and the value of VCs is purely dependent on, and directly impacted by, supply and demand. The supply in this case is not regulated by any authority, but rather by the creator of the currency scheme. This lack of regulation ultimately leads to a certain instability, and news about the VC may have a drastic impact on its real value.

Another issue of VC crowdfunding is that of fraud from the investor’s perspective. Crowdfunding already suffers from a fraud potential for investors, and it is in fact currently the biggest threat to investors. The main issue is that fraudulent projects and initiatives are often not dealt with, but merely disregarded, and the money lost with it. This is much in part due to the fact that crowdfunding relies on small investments from many investors, meaning the amount does not provide each individual investor with enough incentive to sue for fraud or breach of contract. By adding virtual currencies to this, fraud becomes even more important. Since the owners of virtual currency often remain anonymous in the actual transaction, the invested money can often not be forcefully returned, causing for another reason for hesitation by investors.

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Main Actors, Interests & Conflicts Small- and Medium-sized Enterprises (SMEs): SMEs are at the heart of this issue, the wish for especially small and micro enterprises to receive funding without large overhead costs to fund their business causes huge demand for VC crowdfunding. However, a lack of regulation and legal framework means VCs have a much lower level of safety than that of commercial bank money.

Central banks: With the impact VCs have, and will continue to have, on real currencies, central banks have an interest in regulating virtual currencies. If VCs grow to an extreme extent, they could have a substitution effect on central bank money. This could significantly reduce the size of central banks’ balance sheets, henceforth limiting their ability to influence short-term interest rates. As the impact on real finances grows, so does the volatility, and inversely affecting the currency’s predictability.

The Payments Committee of the European Commission: The Payments Committee is responsible for proposing directives related to maintaining a stable and thriving European economy. Hence, it is ultimately responsible for creating the legal framework concerned with VCs, or including them in the scope of existing directives.

Crowdfunding Platforms: Crowdfunding platforms are responsible for connecting Investors with SMEs and their products through campaigns. Currently, crowdfunding platforms require licensing and registration, imposing additional costs and resulting in barriers to entry.

Investors: Investors, not least professional ones, constantly look for new projects to invest in, with the intent of receiving a significant return on investment. However, in countries where crowdfunding regulations have been implemented, investors are limited in terms of how much can be invested, both in total and per project.

Current Legislation & Policies The usage of VC for real applications is still very much under development. Both virtual currencies and crowdfunding are relatively new concepts, and are hence not directly dealt with in any existing legislation.

Electronic Money Directive: The EMD concerns itself with the taking up, pursuit and supervision of the business of electronic money institutions. However, VCs are as of yet not included as a subset of electronic money, and is hence not directly impacted by the directive.

Alternative Investment Fund Managers Directive (AIFMD): The AIFMD provides a common framework to control alternative investment fund managers by ensuring that any EU AIFM must be authorised to perform functions of portfolio and risk management. It aims to enhance supervisory practices in order to prevent future market instability and the build-up of systemic risk in the European financial system.

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European Venture Capital Fund Regulation (EuVECA): The EuVECA is a regulation introduced to allow venture capitalists to market their funds to investors without having to meet all demands of the AIFMD. Perspectives How the issue unfolds is largely dependent on how the usage of VCs develops over time, as well as how it is being treated in a legal context. If there was to be a legal framework that allowed central banks to regulate the currency, while still maintaining very low or even inexistent transaction costs, the use of virtual currencies for crowdfunding could see an upswing as it would be considered a more secure form of investment, given the supposed decrease in volatility. This however also relies on the central banks to actually have the ability to regulate VCs, something that is today not possible given the distributed properties of many virtual currencies.

On the flip side of the coin, there is the potential for an exponential growth in the usage of VCs before any legal directives exist regarding their use, taxability, etc. Given that Bitcoin, the most popular VC, has started to rise in value, it is not entirely unlikely that we see more businesses accepting Bitcoin and other VCs, hence validating VCs as an accepted form of payment. This change would then make SME business owners more motivated to pursue VC-based crowdfunding. However, increased use is also likely to lead to increased volatility and a more fragile system, counterproductive to what should be expected from expanded use.

Since both virtual currencies and crowdfunding are new topics within the EU, much is still unwritten, and hence depends on what decisions are made in the future; what kind of regulations can the EU impose on companies wanting to pursue VC-based equity crowdfunding? How should virtual currencies be treated differently to real currencies, if at all? To what extent should businesses be limited in terms of collection VCs in crowdfunding efforts? All of these are questions that will determine the outcome of this issue.

Key Words Crowdfunding, Regulation, Virtual currencies, Legal status, Startup Definitions Equity Crowdfunding: A crowdfunding effort where the reward is an equity stake in the company. their assigned sex.

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Links The Electronic Money Directive http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32009L0110&from=EN A brief report on different virtual currency schemes and their current status https://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf A report on the European Banking Authority’s view on virtual currencies https://www.eba.europa.eu/documents/10180/657547/EBA-Op-2014-08+Opinion+on+Virtual+Currencies.pdf General information about crowdfunding and the EC’s current efforts http://ec.europa.eu/finance/general-policy/crowdfunding/index_en.htm A document outlining, among other things, innovative applications of crowdfunding http://ec.europa.eu/finance/general-policy/docs/crowdfunding/150304-minutes-ecsf_en.pdf A report on alternative means of financing, largely focused on crowdfunding http://ec.europa.eu/finance/general-policy/docs/crowdfunding/150304-presentations-ecsf_en.pdf Information about crowdfunding and its regulations http://publications.jrc.ec.europa.eu/repository/bitstream/JRC92482/lbna26992enn.pdf A summary of the AIFMD http://www.aima.org/en/aifmd/

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8. Committee on International Trade (INTA) Chairpersons: Tuuli Helind (EE) & Linda Turpeinen (FI) Future looks brighter for small and medium-sized enterprises (SMEs): 38% of SMEs are active internationally, meaning they either export or import. Experts have different opinions on whether Transatlantic Trade and Investment Partnership (TTIP) and Comprehensive Economic and Trade Agreement (CETA) will help or halt SMEs economic growth in the international market. What position should the EU take towards the TTIP and CETA negotiations?

Executive Summary With TTIP and CETA opening up a future for custom-free trade between Europe and Northern America, SMEs see broader market opportunities and an improvement in job openings and price levels. The same structures are endangering essential EU legislative pillars, threatening democracy, and possibilities of SMEs comparing to larger businesses. The trade plans in question would allow for the SMEs to enter global markets, yet they may pose a threat to the overall quality of services and goods in Member States.

TTIP and CETA can pave the way for a boost in the European economy and help SMEs enter the North American markets to compete with multinational corporations more easily Despite the vast opportunities that the agreements are going to present, are the SMEs going to benefit from them? Will the result of these agreements present solutions or problems for SMEs seeking to grow in the international market?

Main Problem CETA and TTIP are to dwarf all prior trade agreements, yet these deals are believed to be benefiting large corporations rather than EU citizens. Seeing as larger corporations have had representatives at many of these discussions, the primary worry is that the interests of SMEs, organisations and citizens will not be recognised but rather overruled. Larger corporations are more active than SMEs internationally, as only roughly 38% of SMEs are capable of broadening their markets overseas.

Of the CETA and TTIP structures, Investor-State Dispute Settlement (ISDS) is arguably the most undermining for SMEs, as it defends the rights of multinational companies to bypass national laws and refrain from having to consider production aspects that weigh down on smaller businesses. Negative externalities of production, such as CO2 emissions and other solely European standards of environment preservation, do not have to be attained to as closely as domestic producers do.

Not only does this serve as a drawback on the green Europe 2020 framework, but also creates an uneven product standard across Europe. Subjecting Member States to a vast difference in product standards, job security, and valued democracy, is a core problem of the current CETA and TTIP drafts. Some foreign corporations might even have the ability to overrule decisions made by governments on fracking, etc. if it doesn’t serve their immediate economic purpose.

CETA and TTIP still have yet to be passed in European Commission, although they have progressed from general discussions to written propositions. Transparency of these discussions is questionable, as many meetings are held in secret and amendments on the basis of proposed distinctions of the negotiations are insignificant. The United States hope to finalise

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the deal before the end of Barack Obama’s presidential term, adding a degree of disparity to discussions. Especially the European Commission has been criticised for reforming to American demands while the action is not reciprocated.

Main Actors, Interests & Conflicts Small- and Medium-sized Enterprises (SMEs): The backbone of the European economy, represented by 90% of all businesses. SMEs are determined by number of employees, at fewer than 250 persons, as well as annual turnover not exceeding 50 million euros. In regard to trade negotiations, SMEs are explicitly undermined as a significant market force, as the treaties don’t suit their best interests concerning equity in the balance of power in the EU market.

European Commission: As the executive power of the EU, the European Commission is comprised of a member appointed by each Member State. The Commission is the body responsible for foreign relations and adherence to EU legislation. Therefore, it is the representative in Transatlantic trade discussions, and one to push toward finalisation of such agreements.

Member States: The individual governments of the European Union have the authority to halt discussions on with the United States and Canada in the circumstance that the aspects are against their vested interests. Seeing as the treaties have the capability to overrule democratic components, namely Germany and France have expressed their reservations.

European Parliament Committee on International International Trade (INTA): INTA is the party responsible for drafting the Parliament’s position on CETA and TTIP, ultimately influenced by EU’s Trade Commissioner, Cecilia Malmström (SE).

INTA is the primary EU committee in charge of negotiating deals with the United States Trade Representative (USTR), and concluding both transatlantic trade agreements.

Current Legislation & Policies STOP TTIP: A self-organised initiative by European citizens (ECI) to immediately halt discussions on TTIP and CETA by gathering 3.2 million signatures from 14 Member States. Although this organisation isn’t officially recognised by Brussels, it still serves as the main organised front of the opposition. As an ECI, the movement embodies the public interest regarding the trade agreements, in addition to 200 NGO’s Europe wide which support the cause.

Perspectives TTIP is a mean to strengthen the already mutual economic framework between the United States and Europe. Presumably, it will bring jobs and foreign investment into Europe and also introduce more product variety to the market. As both the US and Europe are recovering from a period of recession, an arrangement that will open new trade routes and widen economic possibilities would be an ideal solution. The statistics presented by the European Commission estimated additional growth in GDP as a result of the deals and Jose Manuel Barroso, the former president of the EU, dubbed it the “cheapest stimulus package one can imagine” .

Claimed to be “the biggest bilateral trade deal in history” at the 06/2013 G8 Meeting in Ireland, TTIP reaches beyond regular trade formulations; instead of taking the offensive with implementing tariffs, TTIP aims to come to an agreement on

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standards directly with the barriers present. In addition to CETA, these trade negotiations are a diplomatic way to create a permanent presence of multinational corporations and open trade while simultaneously increasing the well-being and opportunities of European citizens. European households should also profit from the trade deals annually by 500 euro, from the superior wages and drop in price levels. How reliable are the envisioned economic influences, considering the outcomes of prior attempts to liberalise market structures (e.g. WTO)?

SMEs under TTIP and CETA will benefit from not only abolishment of tariffs and easier access to North American markets, but also see an increase in intellectual property rights regarding innovation . Even if SMEs weren’t able to directly export, electronic commerce and vaster communication would be established with foreign companies to ensure especially the spread of European online services abroad.

Significantly lower growth and economic gains would be made by merely liberalising tariffs, specifically 23.7bn euro compared to an estimated 120bn euro provided by singularly TTIP. These figures, produced by an investigation set in motion by the European Commission, are held in the most optimistic circumstances to be reached by 2027. TTIP, therefore, first requires a period of privatisation and modification of structure before, and if even then, the establishments would begin to make such profits to the European society. Even the 0.5% growth in GDP . would become trivial when spread over 10 years of development.

Submitting TTIP and CETA into European legislation would cause a decline in environmental and labour standards, regulations on emissions and wages, among other agricultural and chemical bans, as these serve as “trade barriers” in the eyes of both European and American corporations. If accepted, the frameworks would completely undermine the economic and social imperative to decrease our dependancy on fossil fuels, as well as the drive toward a less chemically bound food and cosmetics industry. Such changes could be seen as acceptance of GMO’s, a revival of industry farming, and the use of researched carcinogens in cosmetics and animal feed.

TTIP and CETA are redefining priorities from supporting domestic producers to multinational corporations and already powerful bureaucrats, as 93% of negotiations have been held with representatives from large corporations, in comparison to 4% portrayal of the public interest on the matter. The treaties, therefore, from the perspective of SMEs, seem as an attempt to facilitate big business rather than protecting consumer interests . Additionally, despite the possible increase in jobs, there would also be a re-location of jobs towards the U.S. and Canada.

Key Words & Definitions Transatlantic Trade and Investment Partnership (TTIP): TTIP is a deal between the United States and Europe aiming to ease trade and investment partnership of both large and small businesses. The goal is to not only provide job opportunities and bring variety to European markets, but also to reduce price levels. However, some regard TTIP as a threat to public services, such as UK’s National Health Service (NHS), and the democracy in Europe.

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Comprehensive Economic and Trade Agreement (CETA): CETA is a partnership between Europe and Canada to abolish customs, in order to broaden market opportunities for both parties and eliminate all customs costs within 7 years. The agreement recognises SMEs special status and assures that protection will be provided to agricultural goods with specific geographical stature.

Investor-State Dispute Settlement: This aspect of trade agreements provides foreign corporations with rights and privileges that prioritise corporate rights over governments. ISDS ultimately absolves foreign companies from any domestic legal actions, rather allowing them to challenge any actions by neutral bodies, such as UN or World Bank.

Regulatory Cooperation: After the initial trade agreements are finalised, the objective is to continue cooperation when faced with any obstacles, as to prevent any barriers to trade from forming. This policy allows for the adaptation of TTIP and CETA in case it simply endangers trade, rather than any other feature of government that is affected . Ultimately, this allows for corporations to propose new laws to elected parliaments, in the event that the current structure harms their stature.

Links Transatlantic Trade and Investment Partnership (TTIP) http://ec.europa.eu/trade/policy/in-focus/ttip/ Comprehensive Economic and Trade Agreement (CETA) http://ec.europa.eu/trade/policy/in-focus/ceta/ 2 Million People Against the TTIP and CETA https://stop-ttip.org/what-is-the-problem-ttip-ceta/ Benefits of TTIP to SMEs http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152266.pdf SMEs and TTIP http://trade.ec.europa.eu/doclib/press/index.cfm?id=1053 Importance of SMEs in the European Market http://ec.europa.eu/growth/smes/business-friendly-environment/performance-review/files/annual-report/infographics_ en.pdf

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