Insights Brussels July 2014 by MSL Global

INSIGHTS BRUSSELS July 2014 .

ISSUE #22 New Parliament and EU Priorities

INSIGHTS BRUSSELS New Parliament and EU priorities

EU change is now ....................................................................................................... 4 The Unionâ&#x20AC;&#x2122;s strategic agenda until 2020 .................................................................. 6 Freedom, Security and Justice ...................................................................................................................................... 6 Growth, competitiveness and jobs ................................................................................................................................. 7 Social policy .................................................................................................................................................................. 7 Climate and Energy ....................................................................................................................................................... 7 Foreign Policy................................................................................................................................................................ 8

Parliamentary Groups: deals done ............................................................................ 9 Conservatives take the lead .......................................................................................................................................... 9 Socialists and Democrats in negotiation ...................................................................................................................... 10 European Conservatives and Reformists arrive third .................................................................................................. 10 Liberals relegated to fourth place ................................................................................................................................ 10 European United Left on the rise ................................................................................................................................. 11 Greens lagging behind ................................................................................................................................................ 11 Eurosceptics gathered around UKIP ........................................................................................................................... 11 A bulk of non-attached members................................................................................................................................. 11

European Parliamentâ&#x20AC;&#x2122;s Leadership ......................................................................... 12 Priorities of the Italian Presidency: Sectoral Policies.................................................... 13 Agriculture and fisheries ................................................................................................................. 13 Common Agricultural Policy (CAP) .............................................................................................................................. 13 New rules on state aid in agriculture, forestry and rural areas..................................................................................... 14 Common Fisheries Policy (CFP) ................................................................................................................................. 14

Defence and Security policy ............................................................................................................. 15 Common Security and Defence Policy ........................................................................................................................ 15 Industrial Policy in the Defence Sector ........................................................................................................................ 15

Energy and Environment ................................................................................................................. 16 2030 Climate and Energy framework .......................................................................................................................... 16 Internal energy market................................................................................................................................................. 16

Financial Services ........................................................................................................................... 17 Long term financing of the European Economy........................................................................................................... 17

Food and Beverage ........................................................................................................................... 17 Organic Farming.......................................................................................................................................................... 17 Animal and Plant Health .............................................................................................................................................. 18

Healthcare and Pharmaceutical ...................................................................................................... 18 Prevention and antimicrobial resistance ...................................................................................................................... 18

INSIGHTS BRUSSELS New Parliament and EU priorities

Information and Communication Technology ................................................................................ 19 Connected Continent Package .................................................................................................................................... 19 Data Protection Package ............................................................................................................................................. 19

Transport ..........................................................................................................................................20 TEN-T Corridors .......................................................................................................................................................... 20 Port Services Regulation ............................................................................................................................................. 20 Fourth Railway Package.............................................................................................................................................. 20 Truck Measures regulation .......................................................................................................................................... 21 Flight Passenger Rights Package ............................................................................................................................... 21

Priorities of the Italian Presidency: Cross-Sectoral Policies..........................................22 Consumers ........................................................................................................................................ 22 Product Safety and Market Surveillance Package....................................................................................................... 22

Intellectual Property Rights ............................................................................................................ 22 Copyright and Protection of Industrial Property ........................................................................................................... 22 Directive on the protection of trade secrets ................................................................................................................. 23

International Trade.......................................................................................................................... 23 Trade agreements currently under negotiation ............................................................................................................ 23 Negotiations to start up................................................................................................................................................ 24 Trade Defence instruments ......................................................................................................................................... 24

Research and Development .............................................................................................................. 24 Research and Innovation............................................................................................................................................. 24

Taxation ........................................................................................................................................... 25 Tax Fraud and Evasion ............................................................................................................................................... 25 Preventing double non-taxation ................................................................................................................................... 25 Financial Transaction Tax ........................................................................................................................................... 26

INSIGHTS BRUSSELS New Parliament and EU priorities

EU change is now “A

pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” This quote from Winston Churchill could easily be adopted by the energetic Italian Prime Minister Matteo Renzi who has the aspiration to impress a fresh impulse to EU policies and practices while taking the rein of the rotating EU Council Presidency until end of 2014. There is little optimism around the EU table, but the combination of a renewed vision for true change and of pragmatism embodied by PM Renzi is gaining ground and will breathe new life to the European Union project. The offer of collaboration tweeted by PM Cameron on the first day of the Italian Presidency of the Council, or the re-affirmation by the German leadership of the crucial role and place for the UK in the EU, go beyond the diplomatic politeness and give hope for a prompt recovery of UK relations with other EU Member States. Some positive signals show that the voice of the European citizens -notably the half that didn’t participate in the parliamentary election- seems now to be better heard in Brussels. The agreement reached at the end of June at the EU Summit in Brussels on the five overarching priorities which will guide the work of the EU for the next five years, and the new designation process of the next Commission’s President, are good preconditions but will not be enough to gain citizens’ trust and improve the relevance and pertinence of EU activities. The reshuffling of the top EU-leadership positions has just started with Jean-Claude Juncker’s designation as head of the powerful

INSIGHTS BRUSSELS New Parliament and EU priorities

EU executive arm, following an historic and controversial process that assigns such position to the candidate of the winning party in the European Parliament. It will continue during all summer with the designation of the President of the European Council, due to succeed Herman Van Rompuy from 1 December, and of the High Representative for Foreign Affairs and Security Policy, due to succeed Lady Ashton from 1 November. Meanwhile, the work of the 8th parliamentary legislature has just started with the renewal of the mandate of Martin Schulz to the Presidency of the European Parliament, backed by 409 out of 612 valid votes cast during the first ballot, and the appointment next 7 July of the chairmen of each of the 22 standing Committees through which the parliamentary activity will be shaped until 2019. Leadership and commitment to deliver against citizens’ expectations are important, but risk to be seen just as a beauty parade full of the usual EU rhetoric. The two other critical factors of success include: firstly, a shared vision able to emotionally engage people; and, secondly, a more focused strategic policy framework of priorities. The EU agenda to 2020, adopted by the European Council in its first formal meeting after the European elections, is a good start identifying the most compelling policy areas for future action in relation to employment, growth and competitiveness, energy, migration, security and justice, and foreign policy.

It will now be up to the forthcoming Commission to articulate the EU Council orientations into actionable proposals and integrate them into its modus operandi. The European Parliament and its national peers, the Council, and also a “controlling” institution such as the Court of Auditors, are likely to be much bolder in terms of political and institutional scrutiny of the Commission’s activity. Meanwhile, the overarching scrutiny, as in every democracy, will continue to remain with citizens.

Leonardo Sforza Managing Director MSLGROUP Brussels 1st July 2014

INSIGHTS BRUSSELS New Parliament and EU priorities

The Union’s strategic agenda until 2020 On Friday 27 June, in its first formal meeting after the European elections, the European Council adopted its overarching strategic agenda that

should cover the main focus of activities until 2020. Below the five areas of priorities.

Freedom, Security and Justice Migration will be a major EU policy priority. According to the Council, the EU needs an “efficient and well-managed migration, asylum and borders policy, guided by the Treaty principles of fair-sharing and solidarity”. At the same time, Europe has to remain attractive for immigrants with “specific skills” and coherent and efficient rules need to be developed to “maximise the opportunities” they offer. It is also noted that the member states should fully implement the Common European Asylum System (CEAS) and that the role of the European Asylum Support Office (EASO) has to be strengthened. Besides this, “cooperation with third countries” is needed to overcome the “root causes of illegal migration” and to discourage the risky journeys immigrants undertake to get to Europe. These actions must be guided by the “more for more” principle, which links more European political and financial help to third countries that carry out more institutional and economic reforms. Lastly, closer cooperation between Member States is needed in the field of border management and common visa policy. In the fight against terrorism, the European Union should help Member States by “mobilising all

INSIGHTS BRUSSELS New Parliament and EU priorities

instruments of judicial and police cooperation”. Among these are: The improvement of cross-border information exchanges (also on criminal records) The development of an approach on cybersecurity and cybercrime. Finally, the European Council wants to improve the functioning of the European justice area. Some of the noteworthy measures in this field include: Promoting e-justice Enhancing the recognition of decisions and judgements in civil and criminal matters among courts in different Member States Making progress in the establishment of the European Public Prosecutor’s Office to fight the fraudulent behaviour and damages to the EU budget. Human rights, data protection and security are seen as important policy objectives, also in the relations with third countries. Therefore, the Member States call for the adoption of a “strong EU General Data Protection framework by 2015”.

Growth, competitiveness and jobs The EU Heads of State and Government identify growth and increased competitiveness as an important priority for the European Union for the five years ahead. With regards to these objectives, the European Council underlines that fiscal consolidation intended by the Growth and Stability Pact should be “differentiated and growth-friendly” in order to create jobs and to deal with the ageing of society. Also, the internal market in products and services has to be further completed, in particular by the establishment of a digital single market by 2015. Besides, tax

wedges on labour should be allayed and the efforts to simplify administrative procedures and to enhance regulatory cooperation between Member States and institutions in the framework of the Commission’s Regulatory Fitness and Performance programme (REFIT) should remain a priority. At last, a special reference was made to the need of concluding the Transatlantic Trade and Investment Partnership (TTIP) by 2015.

Social policy Another challenge for the European Union lies in the growing inequality. To address social exclusion, the European Council states that the European Union should, within its competences, try to achieve more equal opportunities by improving educational outcomes, fighting school drop-out, promoting a better labour mobility and

fixing the skills mismatch on the labour market. Also, the European Council recognizes that social protection systems of the Member States have to be prepared to “accompany change and reverse inequalities”. Meanwhile the fight against tax evasion and fraud must be strengthened.

Climate and Energy In the light of global warming and at the backdrop of the Ukrainian crisis, guaranteeing an “affordable, secure and green” future energy supply has become an important policy objective of European policy makers. In the run up to the next Conference of the Parties in Paris (COP 2015) to the United Nations Framework Convention on Climate Change (UNFCCC), the European Council wants the European Union to set a CO2 reduction target for 2030 that is in line with its 2050 reduction target of an 80% emission reduction in comparison to the 1990 situation. At the same time, Europe has to “reduce its high (foreign) energy dependence”. In this respect, the

INSIGHTS BRUSSELS New Parliament and EU priorities

Commission’s European Energy Security Strategy (EESS) is welcomed. By the upcoming winter, “existing emergency and solidarity mechanisms and infrastructure and reverse flows will be reinforced”, “investments in energy infrastructure (also with third countries) should be pursued” and collaboration with international partners has to be set up to reduce the risk of a supply disruption. In the medium to long term, energy efficiency, domestic production and interconnectivity have to be enhanced. By 2015, the internal gas and electricity market (including its infrastructure) has to be further complemented, so that no country will be isolated

from the European networks anymore. At last, the Rome G7 energy initiative for a more “competitive, diversified and resilient” energy

system, which contributes less to global warming, is backed.

Foreign Policy The European Council calls for a “stronger engagement of the EU in world affairs”. To promote its values on the international forum, the European Union should better align internally, be a “stronger partner” in its neighbourhood (Europe, the Mediterranean, Africa, Middle East) and invest more in collaboration with – especially its

INSIGHTS BRUSSELS New Parliament and EU priorities

transatlantic – strategic partners. In addition, the Common Security and Defence Policy has to be enhanced “in full complementarity with NATO”, the European defence industry has to be strengthened and Member States should pool and share resources.

Parliamentary Groups: deals done 24th June was the deadline for elected members of the European Parliament to compose and join political groups. 25 Members are needed to form a political group, and at least 7 Member States must be represented within the group. Each group takes care of its own internal organisation by appointing a chair or co-chairs, a bureau and a secretariat. The composition of political groups is rather a strategic issue. The broader political groups are, the

better will be their speaking time, their access to public funding for their secretariat and negotiating power to get Committee chairmanships. Logically, then, party leaders engaged straight after the European elections in a race to convince as many national parties and single MEPs to join their groups. At the end, 7 political groups are now represented in the European Parliament with some changes in the balance of power in comparison to the previous legislature.

Conservatives take the lead With 221 elected members, the European People’s Party (EPP) will remain the Parliament’s largest group of this new legislative period, even if it has lost ground. The party clearly reaffirmed its support to Jean-Claude Juncker as president of the European Commission. Within the group, Germany will be the most represented delegation with 34 members, followed

INSIGHTS BRUSSELS New Parliament and EU priorities

by Poland (23 members). This balance of power is likely to influence the nominations for parliamentary committee chairmanships. While the German MEP Ingeborg Grässle is likely to take the chairmanship of the budgetary control committee (CONT), Poland intends to claim chairmanship of another parliamentary committee. French MEP Alain Lamassoure is expected to take the chairmanship

of the constitutional affairs committee (AFCO). Viviane Reding, who was until this week the European commissioner for justice and human rights and citizenship, is lined up to become chairwoman of the legal affairs committee.

The European conservative group already elected its new chief, Manfred Weber (Germany), member of the CSU party (the Bavarian sister party of the powerful Christian Democrat CDU party) and member of the EP since 2004. He would be the first CSU member to hold an important position in the European Parliament.

Socialists and Democrats in negotiation With 191 elected members, the Socialists and Democrats group (S&D) intends to negotiate with the EPP the mandate to be given to the European Commission for the next five years. Following its major victory in the elections, the Italian delegation will be the most numerous in the socialist group, followed by the German one. This will put the Italians in a strong negotiating position to present candidates for committee chairmanships. Gianni

Pittella, who temporarily replaced Martin Schulz during the EU electoral campaign as Parliament President, was elected S&D group president. German MEP Martin Schulz, the group’s candidate for the presidency of the European Commission, has been re-elected as president of the European Parliament.

European Conservatives and Reformists arrive third The group of European Conservatives and Reformists, founded by Britain’s conservatives after they withdrew from EPP in 2005, is now the third largest group in the Parliament following the rallying of other Eurosceptic parties. But the decision to associate with parties that are not considered respectable (Danish People’s Party or True Finns) has damaged the group’s image within the Parliament. German EPP members in particular regret the alliance made with Alternative für Deutschland, a party German Chancellor Angela

Merkel refuses to cooperate with. This alliance may compromise UK Prime Minister David Cameron’s will to bank on Merkel’s support for his proposals for EU reform. Observers also note that the lack of cohesion of the ECR group may impact its predictability and reliability. It is unlikely that the group will hold a leading position in the negotiations over Committee nominations.

Liberals relegated to fourth place During the EU electoral campaign, the Liberal group’s chief Guy Verhofstadt set the objective to overtake the nationalist, populist and Eurosceptic groups. But he did not achieve his goal and arrived fourth in the ranking of largest political groups in the

INSIGHTS BRUSSELS New Parliament and EU priorities

Parliament, as the liberals’ British, German, and Italian delegations took a hammering in the May elections. Although the liberals succeeded in attracting a certain number of small parties in its political formation such as Czech ANO, Portuguese

Partido da Terra and Spanish Unión Progreso y Democracia and Ciudadonos, it failed in winning over Flemish nationalists from the Nieuw-Vlaamse Alliantie (N-VA) which eventually joined the ECR.

And with a disparate composition of local parties with different political stances on the questions of regional independence, it will maybe be difficult to maintain cohesion during the next five years.

European United Left on the rise The European United Left (GUE/NGL) grew from 35 to 52 members and its position within the European Parliament is strengthened. The German MEP Gabriele Zimmer was re-elected as president of the group. Among the newly-elected, one person

in particular is attracting attention, Italy’s Barbara Spinelli, the daughter of Altiero Spinelli, who is considered one of the founding fathers of European federalism.

Greens lagging behind In the position of king-makers (together with Liberals) during the previous legislative period, the Greens group in the Parliament lost 7 members to finally reach a delegation of 50 members. They lost

ground due to the rise of ECR and GUE groups. They also lost their charismatic and media-savvy leader Daniel Cohn-Bendit who didn’t run for another mandate.

Eurosceptics gathered around UKIP In the race between British MEP Nigel Farage from the UK Independence Party (UKIP) and French MEP Marine Le Pen from the Front National (FN), the first one ended up with winning the battle over the composition around his leadership of a Eurosceptic group. He eventually reached the threshold of at least 7 Member States with MEPs from United-Kingdom, Italy, Sweden, Lithuania, Czech Republic, Latvia and France. If Nigel Farage

always refused to ally with Front National, accusing it of "prejudice and anti-Semitism", he paradoxically managed to compose his group thanks to the desertion of a French MEP who was elected on a FN list. The group, named Europe of Freedom and Democracy (EFD) thus grows in this legislature from 34 to 48 elected members, but the coalition remains fragile as the defection of one party would jeopardise its existence.

A bulk of non-attached members Marine Le Pen triumphed in the European elections in France, but she is eventually the loser in a scramble to form anti-EU groups in the European Parliament. French Front National managed to get the support from 5 other parties from Italy, Belgium, Netherlands, Austria and Poland but didn’t succeed in reaching the threshold of representatives from 7 Member States. Failure might not be a disaster for the FN which is mainly driven by national considerations and the objective of the 2017 presidential elections, but it would, in effect, hand

INSIGHTS BRUSSELS New Parliament and EU priorities

the Europhobic leadership in the Parliament to Nigel Farage. The 23 French extreme-right members elected in May will then sit among the 43 non-attached members, will not have additional speaking time and not be allowed to claim extra Parliament resources to finance their administration. Romain Seignovert, Senior Consultant MSLGROUP Brussels

European Parliamentâ&#x20AC;&#x2122;s Leadership

INSIGHTS BRUSSELS New Parliament and EU priorities

Priorities of the Italian Presidency:

Sectoral Policies Agriculture and fisheries Common Agricultural Policy (CAP) Last December, after months of intense negotiations, Agriculture ministers reached an agreement on the Common Agricultural Policy (CAP) reform package for the years 2014-2020. According to the Commission, the EU became last years the world’s largest food and agri-food exporter with a 5.8% rise in 2013. The new set of rules will enter into force on 1 January 2015. Regarding this reform, the Italian Presidency considers that environmental commitments are sufficient while further efforts should be undertaken on the management of crisis situations affecting farmers’ income. For this purpose, the EU Presidency proposes to monitor tools supporting income stabilisation such as insurance or mutual funds. If necessary, it will call the Commission to put forward corrective actions.

proposal to promote fruit and milk schemes in schools. This initiative aims to encourage children at school to consume healthy products containing vitamins and minerals. Finally, after the presentation of the Commission report presented on 13 June, on the future of the dairy market sector, the Presidency plans to open the debate on the future of this market segment after the end of quotas. 

NEXT STEPS July 14: Agrifish Council ministers meeting September 15: Agrifish Council ministers meeting October 13: Agrifish Council ministers meeting November 10: Agrifish Council ministers meeting December 15: Agrifish Council ministers meeting

The Presidency also intends to pursue the discussion in the Council on the Commission’s

INSIGHTS BRUSSELS New Parliament and EU priorities

New rules on state aid in agriculture, forestry and rural areas During the Italian Presidency new rules on state aid will enter into force. Indeed, on 25 June, the European Commission adopted revised and updated criteria under which Member States can support agriculture, forestry and rural areas, in line with EU state aid rules. In particular, it has adopted a new Agriculture Block Exemption Regulation (ABER) and new guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020 (GL). Key features are: Allowing many more block exemptions by widening the scope of ABER. For example, it

will be possible in future for Member States to grant aid to the forestry sector and to smaller enterprises in rural areas without having to go through lengthy notification and authorisation procedures. Widening the scope of GL. One window approach. Member States will only have to go through one administrative procedure vis-à-vis the Commission. Reducing administrative burdens. 

NEXT STEPS July 1: Entry into force of the new rule

Common Fisheries Policy (CFP) The Presidency will closely monitor the start-up phase of the new Common Fisheries Policy (CFP) and the entry into force of the European Maritime and Fisheries Fund (EMFF). With regard to these initiatives, the Presidency stresses that the implementation of a new regulatory framework should be timely and effective. Furthermore, the Presidency will focus on aquaculture, a sector which is expected to increase in size during the coming years. It will support initiatives improving information to consumers. Critical success factors for this sector will be: respect of the environment and food safety and quality.

INSIGHTS BRUSSELS New Parliament and EU priorities

The Presidency also aims to reach agreements on fisheries partnerships with third countries and on fishing opportunities in 2015 in inland and international waters. Finally, new data on the stock of Bluefin tuna will be published during the Italian Presidency. 

Defence and Security policy Common Security and Defence Policy In December 2013, defence ministers identified a certain number of lines of actions to enhance Common Security and Defence Policy (CSDP). In this framework, the Italian Presidency supports the adoption of cooperation measures that can upgrade the European military capability. Several joint research and technology projects are already in the pipeline. Among those: the development of drones and newgeneration satellites and the cooperation on cyber defence and on air-to-air refuelling technologies.

During its presidency, the Italian Government also plans to strengthen the role of the European Defence Agency (EDA). The Italian Presidency will also put forward the need to adopt a specific action plan to apply the EU maritime security strategy. ď ľ

NEXT STEPS

November 18: Council on Defence ministers meeting June 2015: European Council on Defence

Industrial Policy in the Defence Sector In December 2013, the Conclusions of the Defence Council stressed the need to strengthen defence industry in order to develop a more integrated, sustainable, innovative and competitive European Defence Technological and Industrial Base (EDTIB). In line with these conclusions, the Italian Presidency plans to implement a well-functioning defence market where a fundamental role should be given to Small and Medium Enterprises (SMEs).

Furthermore, during its semester, Italy will encourage Member States and the European Defence Agency to submit proposals on how to promote regional clusters as well as proposal for new financial instruments to support SMEs. Finally, the Presidency will work to establish an EU framework to improve the mutual use of civilian and military research for dual use applications. ď ľ

NEXT STEPS

November 18: Council on Defence ministers meeting

INSIGHTS BRUSSELS New Parliament and EU priorities

Energy and Environment 2030 Climate and Energy framework Energy policy is a top priority for the Italian Presidency with the focus on the 2030 climate and energy framework. The European Council already had political debates during meetings held in March and in June when it called the European Commission to analyze the impacts of the framework on single Member States, to elaborate a mechanism for burden sharing, to put forward measures related to carbon leakage, to ensure legal certainty for energy-intensive industries, as well as to revise the energy efficiency directive.

for reaching a final agreement in October, informally on October 6 when energy ministers will meet in Brussels, and then formally at Heads of State and Governments’ level two weeks later, on October 27. The Italian Presidency will also take the opportunity of this debate to feed a discussion on a European common vision for the energy mix. 

NEXT STEPS October 6: Council of energy ministers meeting October 27: European Council meeting

As already agreed upon by EU Heads of State and Government, the Italian Presidency will push

December 9: Council of energy ministers meeting

Internal energy market The deadline for completing the internal energy market fixed by EU Heads of State and Government in 2011 will be reached during the Italian Presidency. The latter will then have to provide a conclusive picture of the state of play of the internal energy market and put forward new conclusions on the way to boost its completion at the Council of energy ministers set on December 9. The Italian Presidency already intends to put the emphasis on the complete transposition of the third energy package by all Member States; on the rapid adoption of electricity and gas network codes; on the promotion of new interconnections

INSIGHTS BRUSSELS New Parliament and EU priorities

and on an effective implementation of the regulation on trans-European energy infrastructures. The European Commission is also expected to adopt in July a report on the level of completion of the internal energy market, as well as a Communication on retail markets. 

NEXT STEPS July: Commission report on internal energy market October 6: Council of energy ministers meeting December 9: Council of energy ministers meeting

Financial Services Long term financing of the European Economy As regards financial markets, the main political objective of the Presidency is to facilitate credit flows to the real economy. To achieve this, the Presidency aims to make progress on the discussions on the Commission’s communication on Long Term Financing of the European Economy. Indeed, last March, the European Commission presented a set of measures to channel private source of financing to long-term investments. Italy plans to give a relevant contribution, in particular with a view to modernize the framework for long term investors such as pension funds or insurance companies.

schemes applicable to the insurance sector starting from 2016. On pension funds, the Italian Presidency will try to build consent on the revision of the Institutions for Occupational Retirement Provision (IORP) reform. Finally, Italy will try to push the creation of a new category of pooled funds, the so called “European Long Term Investment Funds”. 

NEXT STEPS July 17: Eocfin Council ministers meeting

On insurance, the Presidency aims to finalize and implement the so-called Omnibus ll and Solvency ll directives which will introduce new prudential

October 14: Eocfin Council ministers meeting November 7: Eocfin Council ministers meeting December 9: Eocfin Council ministers meeting

Food and Beverage Organic Farming The Italian Presidency wishes to reach an agreement on the Commission initiative on organic farming by the end of its semester. The aim of the proposal is to update the legal framework in a sector that has quadrupled in size in the past ten years. The new package contains rules on farming and labelling of organic products. This issue is considered extremely important by the

INSIGHTS BRUSSELS New Parliament and EU priorities

Presidency to safeguard the quality of organic production. 

Animal and Plant Health In May 2013, the European Commission unveiled proposals for 5 new regulations on animal and plant health. The aim of these is to update and simplify the current regulatory framework and to strengthen EU animal and plant health, seeds and safety rules for a safer food chain. The Presidency will put emphasis on the reinforcement of the epidemiological surveillance system for some diseases such as avian Influenza. A global conference on this topic will be held in Italy in cooperation with the European Commission and the World Organization for Animal Health (OIE).

In addition, the Presidency aims to make some progress on the proposed regulation on plant health and phytosanitary production during the semester. Finally, the last strategic priority for Italy is to enhance cooperation at European level on the fight against food fraud. A conference on this topic will be organized in cooperation with the European Commission in order to identify new strategies and challenges. 

Italy considers it important to review regulations on veterinary medicines in order to reduce antibiotic use in products of animal origin.

Healthcare and Pharmaceutical Prevention and antimicrobial resistance The plans of the Italian Presidency in the field of health care are as follows: The promotion of prevention

healthy lifestyle and

The inclusion of vaccination as a priority to improve public health with regards to communicable diseases

INSIGHTS BRUSSELS New Parliament and EU priorities

The adoption of measures on the issues of the safety of treatments and care-related infections The organisation of a “specific event to tackle antimicrobial resistance”

Information and Communication Technology Connected Continent Package Italy already expressed its support to the Commission’s Connected Continent Package and regards it as a timely and concrete step in the completion of a Single Telecom Market. The package proposes to simplify EU rules for telecom operators, abolish roaming charges across Europe, end premiums for international phone calls within European mobile networks, and enhance legal protection for open internet (net neutrality). In April 2014, the European Parliament has voted in favour of the “Connected Continent” package and even reinforced the role of national regulators to supervise the compliance of operators as well as the powers of customers to switch between internet providers. As regards Net neutrality, Members of the European Parliament also

shortened the European Commission’s list of “exceptional” cases in which traffic management methods will be permitted to service providers implementing a court order, preserving network security or precluding temporary network congestion. Contrary to key corporate players in the telecoms sector and many other Member States, Italy said it is ready to endorse the version backed by the Parliament. It will now have to build a consensus at Council level to find a final agreement on the package by the end of its presidency. 

NEXT STEPS November 4: Council of telecom ministers meeting

Data Protection Package One of the current major digital dossiers at EU level is the Data Protection package, which aims to strengthen online privacy rights and boost Europe's digital economy. Viviane Reding, then EU justice commissioner, agreed to set the deadline for its adoption before the end of the year. However, Italian diplomats already expressed doubts that a deal could be reached during their presidency. The delays are caused, in part, by a handful of Member States (UK, along with Denmark, Hungary, and Slovenia) that want to weaken the regulation, which aims at harmonising data protection rules across the bloc.

INSIGHTS BRUSSELS New Parliament and EU priorities

Inter-institutional negotiations between the European Parliament and the Council of the EU are set to start in July. EU Heads of State and Government agreed at their 2013 October European Summit that the data protection Regulation should be in place in all Member States by latest 2015. 

NEXT STEPS October 9: Justice Council ministers meeting December 4: Justice Council ministers meeting End 2014: expected adoption of the package

Transport TEN-T Corridors The Italian Presidency would like to see a further strengthening of the Trans-European Transport Networks Corridors (TEN-T), the project that since 1996 aims to establishing better crossborder connections between the already existing transport systems (road, rail, waterways, ports, aviation) of the Member States. More specifically, the new Presidency wants to broaden the scope of the project to “road networks and port, inter-

port and airport nodes” and to encourage the enlargement of the network to the “southern boundaries of the Mediterranean Area”. 

NEXT STEPS September 16: Informal Transport Council ministers meeting October 8: Transport Council ministers meeting December 3: Transport Council ministers meeting

Port Services Regulation For the further development of TEN-T Italy will also try to reach a common position in the Council on the Port Services Regulation. This policy initiative, so far, has been very controversial as it tries to liberalise a market that in many Member States is still shielded from competition. For this reason, the European Parliament already decided to postpone the vote it had scheduled in March and to pass it on to the new Parliament. Also the

Council did not make any progress in reaching a common position. 

NEXT STEPS September 16: Informal Transport Council ministers meeting October 8: Transport Council ministers meeting December 3: Transport Council ministers meeting

Fourth Railway Package The Presidency plans to make substantial progress in the field of railway liberalisation and harmonisation as it hopes to reach a “general approach in the Council” on “all elements of” the Fourth Railway Package. This policy initiative aims to make domestic passenger transport subject to public tendering and to enhance the technical integration among national railway networks. In a first reading, the Parliament has already adopted a position on the text in which

INSIGHTS BRUSSELS New Parliament and EU priorities

MEPs weakened the “Chinese-Wall” requirement between operator and infrastructure manager and added social provisions. 

NEXT STEPS September 16: Informal Transport Council ministers meeting October 8: Transport Council ministers meeting December 3: Transport Council ministers meeting

Truck Measures regulation The Italian Presidency promises it will try to reach an agreement on truck standards that will be “negotiable with the European Parliament”, overcoming the lack of consensus in previous meetings that did not approve the Parliament’s rejection of the so-called “mega-trucks”.



NEXT STEPS September 16: Informal Transport Council ministers meeting October 8: Transport Council ministers meeting December 3: Transport Council ministers meeting

Flight Passenger Rights Package The Italian Presidency plans to improve the rights of flight passengers. At its previous meeting, the Council failed to agree on a common stance on the hours of flight delay thresholds after which passengers are entitled to receive a compensation. Whereas under the current rules airlines are obliged to refund their passengers in the case of a flight cancellation, the Parliament wants to see compensation payments after 3, 5

INSIGHTS BRUSSELS New Parliament and EU priorities

or 7 hours of delay (depending on the flight distance), thereby tightening the Commission’s initial proposal of 5-7-9 hours of delay. 

NEXT STEPS September 16: Informal Transport Council ministers meeting October 8: Transport Council ministers meeting December 3: Transport Council ministers meeting

Priorities of the Italian Presidency:

Cross-Sectoral Policies Consumers Product Safety and Market Surveillance Package The proposal on product safety and market surveillance initiated by the Commission in February 2014 aims “to improve consumer product safety and to strengthen market surveillance of products in the EU”. An important provision is the introduction of mandatory labelling for non-food consumer products. The Parliament has already adopted a common position supporting the “made in” clause. Now,

the European Council needs to reach an agreement on this initiative. According to the Italian Presidency, the new “rules of origin” would be “a major step forward in strengthening consumer protection and creating a level playing field”. 

NEXT STEPS October 16: Consumers Council ministers meeting

Intellectual Property Rights Copyright and Protection of Industrial Property The Italian Presidency considers that the current legal framework in the field of copyright is harmonized. However, some details may need to be refreshed to reflect the potential evolution of digital technologies in the coming years. The European Commission is expected to publish a White Paper on this theme shortly. The Italian Presidency will promote the discussion on the White Paper that will be the starting point for a future legislative proposal.

This package was unveiled by the Commission in March 2013 with the aim to upgrade, and modernise the current legislation in order to make the trade mark registration systems all over the Union more accessible and efficient for businesses.

The Italian Presidency will continue the talks on the reform package of the trade mark system.

December 4: Competition Council ministers meetings

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NEXT STEPS July 21-22: Informal Competition Council ministers meeting September 25: Competition Council ministers meetings

Directive on the protection of trade secrets The Italian Presidency also considers as a priority the proposed directive unveiled by the Commission last November on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The Presidency will concentrate its efforts on the definition of a harmonised legislative framework on trade secrets which could boost technological

cooperation and know-how exchange across the Union. 

NEXT STEPS July 21-22: Informal Competition Council ministers meeting September 25: Competition Council ministers meetings December 4: Competition Council ministers meetings

International Trade Trade agreements currently under negotiation When it comes to trade, Italy wants to actively contribute to the conclusion of a number of international agreements that are currently under negotiation. These include:

beyond tariffs to eliminate barriers to trade between the two economies. However, almost ten months later, due to “technical issues”, a final agreement has not yet been reached.

The Transatlantic Trade and Investment Partnership (TTIP): In June 2013 the United States and the European Union have started negotiations for a new trade agreement. As tariff barriers are already relatively low, TTIP mainly focusses on the removal of non-tariff barriers in areas such as product standards, industry regulations and public procurement procedures.

The Doha Development Agenda (DDA). This is the name of the round that is under negotiation at the World Trade Organisation (WTO) level since 2001. It aims at “further liberalizing trade, whilst facilitating the integration of developing countries into the WTO multilateral system”.

The Comprehensive Economic and Trade Agreement with Canada (CETA): On 18 October 2013 the European Commission and Canada reached an agreement on the contents of a treaty – that just like TTIP – would go

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The Trade in Services Agreement (TiSA): A multilateral initiative outside of the WTO that tries to promote a further trade liberalisation in the services sector and that might become a model for a more generalised future trade agreement within the WTO institutional framework.

Negotiations to start up The new Presidency will also try to (re)launch negotiations of trade agreements with other trading partners, such as with the Countries on the southern shore of the Mediterranean Sea, the Southern African development Community and

Mercosur. With regards to the latter, attempts to conclude an agreement with the South-American free trade zone have already been going on since 1999. However, due to division among Mercosur the processes had almost come to a standstill.

Trade Defence instruments Besides concluding new trade agreements, the Presidency indicates that it is in favour of concluding regulations on Trade Defence Instruments modernisation. This initiative was proposed by the Commission in April 2013 in order to further formalise the use of antidumping measures and consists of amendments to the

EU’s basic anti-dumping and anti-subsidy rules. However, as the text – thanks to the so called “Community Interest Clause” – allowed for new, broadly defined exceptions from trade rules, it was met with resistance from a large majority of member states and led to a stalemate between the Commission and the Council.

Research and Development Research and Innovation In the framework of the 2020 Horizon program, the Italian Presidency wants to spur progress in the field of research and more specifically it wants to “empower young researchers”. With this objective in mind, it promises to propose a “political discussion on infrastructures” in the framework of the European Strategy Forum on Research Infrastructures (ESFRI). Likewise, Italy

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considers proposing council conclusions on Research and Innovation as “new sources of growth”. 

NEXT STEPS October 7-9: EurOcean 2014 Conference, Rome September 29: Leading Enabling Technologies for Societal Challenges Conference, Bologna

Taxation Tax Fraud and Evasion The first political priority of the Italian Presidency in the field of taxation is transparency and fight against tax fraud and evasion. To this purpose, the Presidency aims to finalize the discussion on the amended directive on administrative cooperation in the field of taxation. This directive presented by the Commission in December 2012 was put forward with the purpose to modernize the legal instruments for mutual assistance and make cooperation between tax administrations more efficient. Italy will stress the need to extend automatic exchange of information in line with

new international standards. Furthermore, the Italian Presidency hopes to make some progress in the negotiation with third countries (Switzerland, Monaco, Andorra etc.) on the revision of the agreements on savings taxation. ď ľ

NEXT STEPS July 17: Ecofin Council ministers meeting October 14: Ecofin Council ministers meeting November 7: Ecofin Council ministers meeting December 9: Ecofin Council ministers meeting

Preventing double non-taxation Another priority issue for the upcoming Presidency is the prevention of double nontaxation and in this context Italy will resume discussion on the Parent/Subsidiary Directive that was amended by the Parliament last April. The Commission proposed new rules in order to stop companies from exploiting differences in the way intra-group payments are taxed across the EU. The Italian Presidency wants to move a step forward on the discussion on the Common Consolidated Tax Base (CCTB). The Common Consolidated Corporate Tax Base is a single set

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of rules, proposed by the Commission, that companies operating within the EU could use to calculate their taxable profits. Italy will in particular focus on the elements of tax base and cross boarder aspects. ď ľ

NEXT STEPS July 17: Ecofin Council ministers meeting October 14: Ecofin Council ministers meeting November 7: Ecofin Council ministers meeting December 9: Ecofin Council ministers meeting

Financial Transaction Tax The Italian Presidency would also like to reach an agreement on the highly controversial proposal of a Financial Transaction Tax (FTT). In the framework of an enhanced cooperation, 11 Member States (Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Estonia, Slovakia and Slovenia) expressed their determination to introduce a FTT but did not find an agreement on the financial instruments to be covered by the FTT. In February 2013, the

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Commission proposed to tax transactions on shares and bonds at the rate of 0.1% and derivatives transactions at the rate of 0.01%. ď ľ

NEXT STEPS July 17: Ecofin Council ministers meeting October 14: Ecofin Council ministers meeting November 7: Ecofin Council ministers meeting December 9: Ecofin Council ministers meeting

For further information please contact: Leonardo Sforza Leonardo.Sforza@mslgroup.com Romain Seignovert Romain.Seignovert@mslgroup.com Ruben Brugnera Ruben.Brugnera@mslgroup.com Square de Meeûs 23 – B 1000 Bruxelles Our website: www.mslgroup.com Follow us on twitter for breaking news updates: @MSL_Brussels

INSIGHTS BRUSSELS New Parliament and EU priorities