Abrantes 2014 – Academic Preparation Kit by Tiago Correia Machado

“Zeroing in on Europe’s diversity – Regional answers to global challenges”

ACADEMIC PREPARATION KIT

ABRANTES 2014 – 30TH NATIONAL SELECTION CONFERENCE EUROPEAN YOUTH PARLIAMENT PORTUGAL “Zeroing in on Europe’s diversity – Regional answers to global challenges”

ACADEMIC PREPARATION KIT

APPEJ – Associação Portuguesa do Parlamento Europeu dos Jovens/European Youth Parliament Portugal Rua da Concórdia 45, 4465-601, Leça do Balio, Porto, Portugal www.pejportugal.com · appejovens@gmail.com

TABLE OF CONTENTS

DISCLAIMER This Academic Preparation Kit was compiled for the 30th National Selection Conference of the European Youth Parliament Portugal, which will take place in the city of Abrantes, from the 24th to the 27th of April, 2014.

OVERVIEWS

The Topic Overviews are written by the Committee Chairpersons and serve as background material. They aim to identify the importance of the issue at hand, as well as the principal matters within it, the interconnections amongst the main actors in those matters and the actions already taken by them, while offering a short look at their possible future development. They are written with the intention of providing stimulating, yet neutral, introductions. It must be noted that the content of the Overviews does not reflect the positions of the Associação Portuguesa do Parlamento Europeu dos Jovens (APPEJ)/European Youth Parliament Portugal (EYP PT), who strongly encourages independent thinking, and are the sole responsibility of their authors. Likewise, while the National Selection Conference will be held under the patronage of various public entities, no claim is made that their views are in any way represented by the contents of this preparation kit.

cles, through different types of search engines, news websites or encyclopaedias.

LINKS

As regards the suggestions of research links, the list is by no means exhaustive. Also, several of the websites may contain relevant information other than the one cited herewith. Several links have been made available through footnotes – all underlined references are hyperlinked to their sources. Please note that the EYP PT is not responsible for the contents of the various websites; the texts, images and/or audio or video clips reflect the opinions of their authors, only. We recommend that you print this preparation kit, together with all the research you will conduct on your own and bring all those materials with you to the conference.

4 5 6 10 12 17 22 27 32 38 43 48 53

Foreword Fact Sheets and Position Papers The EU Explained Committee Topics AFET ECON EMPL ENVI IMCO INTA LIBE REGI Contacts

Wishing you a good read and successful preparation, Tiago Correia Machado

President, Abrantes 2014

Ana Nunes & Miguel Paiva

Head-organisers, Abrantes 2014

Eduarda Moreira

Vice-president , EYP PT

KEYWORDS

The non-exhaustive list of keywords intends to facilitate the search for information, may that be documents, news items or arti3

FOREWORD Dear Delegates, In about three weeks, we will all be gathering in Abrantes, a city almost as old as the foundation of the nationality, itself. Located in the very heart of Portugal, just a few kilometres from the country’s geodesic centre, and caught between the ever more cosmopolitan city of Lisbon and a quieter rural region, Abrantes gave us the ultimate inspiration we needed when defining the umbrella theme of this 30th National Selection Conference of the European Youth Parliament Portugal. You see?, it is not by accident that we have invited you here to come and discuss issues that, in their regional dimensions, may well be the source of solutions to problems that affect all of us Europeans, whether we live in cities as large as Paris and London or in villages as small as Alferrarede (one of the four civil parishes in the municipality of Abrantes). As you have also already seen, when we initially sent you the choices of Committee Topics, we are putting to you some of the most pressing questions of our times. We want you to come to Abrantes to not only discuss these “global challenges”, but to find their “(regional) solutions”. How can we reshape the European Union’s (EU) future relations with Russia, especially in the light of the latest events in Ukraine, to ensure safety and greater prosperity for all? How can we ensure that the latest signs of economic recovery are more than just feeble

evidence and that we put Europe back on the road to sustainable development? How can we stop xenophobia and anti-migration feelings from hampering the full development of a truly interconnected EU labour market, while guaranteeing that both migrants and host countries profit from the exchange? How can we protect our environment, fight climate change and global warming and still not kill our industries, but allowing them to flourish and afford us all the best, most comfortable and most sustainable lifestyle we have ever had? How can we safeguard EU consumers and the stability of its internal market without being short-sighted or ignorant of the potential inherent in new currency and payment method alternatives? How can we empower micro-, small- and medium-sized enterprises, the lifeblood of the EU and its main source of employment, to face the growing challenge of internationalisation in an ever more competitive global market? How can we eradicate corruption within the EU, thus ensuring greater economic development, more democratic institutions, better social justice and fairer opportunities for all? How can we further bridge the digital divide that slows down the development of our people, promote the uptake of Information and Communications Technologies and, ultimately, bolster the social and economic

development of the EU as a whole – and, especially, of its least developed regions? How?, how?, how…? Dear Delegates, We invite you to a four-day-packed programme of exchanging, enjoying and debating, but the question is: will you come prepared? Having an opinion requires knowing many different opinions. Knowing what is right and what is wrong requires information. Knowing what is feasible and what is not requires expertise. We therefore challenge you: come prepared. You will meet bright people, creative people and you will learn with and from them. But for that to happen, you cannot arrive empty-handed… or empty-minded. To that end, the Chairpersons have spent weeks working tirelessly to make sure you would receive the best preparation materials you could ask for. Those materials can all be found in and through this preparation kit. Please – please! –, carefully read through the EU guide and make sure you take note of all the relevant institutions and their work (past, present, future, possible…) in the issue areas corresponding to those of our Committee Topics. Once you have done that, use the Overviews to gain further insight into them; all of them! Then, take the keywords and research links as stepping-stones to your own research: search, investigate, read, reread

and make up your minds. Finally, take all this new knowledge and apply it to the Fact Sheets and Position Papers you will be writing and keep yourselves up-to-date right until you are ready to travel to Abrantes. Now, are fully aware that spending so much time going through politics-related, academic materials in a foreign language may not be your dream-option of how to spend these well-deserved holidays… or is it? Whichever the case, we cannot stress enough how important it will be that you prepare as much as you can. Then again, we are certain that you are not ordinary young people. You are future EYPers – and, those, dear Delegates, are some of the most extraordinary young people in Europe… which is why we are so looking forward to meeting every single one of you in Abrantes. Until then, wish you good luck, the best of preparations and, should you celebrate it, a very Happy Easter, too! Ultimately, if, at some point, it all seems too much, remember: preparation is the best friend of confidence and the mother of success. Yours, in anticipation, The team of Chairpersons, Bérengère, Franziska, João, Henrique, Magda, Mónica, Rita, Tamer, Tiago, Tiago (yes, there are two of us) and Victoria

FACT SHEETS AND POSITION PAPERS The countdown to the session has begun and we are already in a preparation frenzy that seeks its equal. In fact, we have waited quite some time for this and, naturally, much of that time was spent preparing. For you, because you deserve a session that sets new standards! So, what can you do to be ready when we are prepared to our teeth? ‘Outprepare’ us! How? Easily… if you follow these steps: 1. Read the introduction to this preparation kit, the EU guide and all Committee Topic Overviews. Use the keywords and links therein to set you off on your own research. 2. Once you have done that and have gathered enough information, gather it in a Fact Sheet. 3. Then study it carefully, search your conscience (and your creativity, too), make up your mind and write your Position Paper. 4. As soon as you have finished them – and by no later than Wednesday, April 16th, 2014 – save them according to the specifications below and send them to <organizacao-ssn@pe-

jportugal.com>.

5. It may happen that your Chairperson will get in touch with you with further pre-session preparation instructions or requests. For that reason, we must ask that, while on holidays, you still make an effort to check your e-mail inboxes every day.

FACT SHEETS The Fact Sheet is a document that collects, in a summarised form, all the useful pieces of information and data that you have found during the preliminary research on the Committee Topic. An essential characteristic of the Fact Sheet is its objectivity: it should not be opinionated, but simply present a list of key facts. An appropriate reference source must be mentioned for each fact to facilitate further research/closer examination. We have included further instructions in the template you will be using (separate MS Word file), but, should you still have any doubts, you can also have a look at the example Fact Sheet we have sent you (separate PDF).

POSITION PAPERS The purpose of the Position Paper is to generate support on an issue. It describes a personal position on a topic and the rationale behind it. The Position Paper is based on facts that provide a solid foundation for your argument and should be adequately presented by: • Using evidence to support your position, such as statistical evidence or dates and events;

• Validating your position with authoritative references or primary source quotations;

• Examining the strengths and weaknesses of your position; • Evaluating possible solutions and suggesting courses of action.

A good Position Paper should not be much longer than one A4 page with the format settings presented to you below (and which we ask you to preserve), and can be structured as follows:

clarifies a portion of the position statement and is supported by evidence or facts. Evidence (first source quotations, statistical data, interviews with experts and/or indisputable dates or events) should lead to the main concept or idea presented in the paragraph. The body may begin with some background information and should incorporate a discussion on all sides of the issue at hand. Conclusion It should summarise the main concepts and ideas and reinforce, without repeating, the introduction or body of the paper. It could include suggested courses of action and possible solutions. We have included further instructions in the template you will be using (separate MS Word file), so please be sure to refer to that.

Introduction It should clearly identify the issue and state the author’s position. It should be written in a way that catches the reader’s attention. Body of text It may contain several paragraphs; each of them presenting an idea or main concept that

THE EU EXPLAINED I. WHAT IS THE EU? The European Union (EU) is a unique economic and political partnership between 28 European countries which, together, cover much of the continent. The EU was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries who trade with one another become economically interdependent and so more likely to avoid conflict. The result was the European Economic Community (EEC), created in 1958, and initially increasing economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg and the Netherlands. Since then, a large single market has been created and continues to develop toward its full potential. From economic to political union What began as a purely economic union has evolved into an organisation spanning policy areas, from development aid to environment. A name change from the EEC to the European Union (EU) in 1993 reflected this. The EU is based on the rule of law: everything that it does is founded on treaties, voluntarily and democratically agreed by all the Member States. These binding agreements set out the EU’s goals in its many areas of activity.

Mobility, growth, stability, single currency The EU has delivered half a century of peace, stability and prosperity, helped raise living standards and launched a single European currency, the euro. Thanks to the abolition of border controls between EU countries, people can travel freely throughout most of the continent. And it is become much easier to live and work abroad in Europe. The single or ‘internal’ market is the EU’s main economic engine, enabling most goods, services, money and people to move freely. Another key objective is to develop this huge resource to ensure that Europeans can draw the maximum benefit from it. Human rights and equality One of the EU’s main goals is to promote human rights both internally and around the world. Human dignity, freedom, democracy, equality, the rule of law and respect for human rights: these are the core values of the EU. Since the 2009 signing of the Treaty of Lisbon, the EU’s Charter of Fundamental Rights brings all these rights together in a single document. The EU’s institutions are legally bound to uphold them, as are EU governments whenever they apply EU law. Transparent and democratic institutions As it continues to grow, the EU remains focused on making its governing institutions more transparent and democratic. More pow-

ers are being given to the directly elected European Parliament, while national parliaments are being given a greater role, working alongside the European institutions. In turn, European citizens have an ever-increasing number of channels for taking part in the political process.

II. HOW DOES THE EU WORK? The institutional structure of the EU cannot be compared to that of any other international organisation (e.g., the North Atlantic Treaty Organization or the United Nations). It is neither a centralised unity like a nation state, nor does it imitate a relatively loose structure, such as the Commonwealth of Nations or a confederation like the United States of America – it is an organisation sui generis. The structure is unique and continuously developed. The Treaty of Lisbon marks the last big step in this process. A. MAIN INSTITUTIONS 1. Within the institutional triangle European Commission The European Commission (EC) is the ‘executive’ power of the EU. One Commissioner is appointed by each Member State (with one, currently José Manuel Durão Barroso, being the President of the EC). The Commissioners are appointed by their respective Member States, approved by the European Parliament

and put in charge of specific issues (e.g., Connie Hedegaard, the Danish Commissioner, is responsible for Climate Action). The EC monitors the Member State’s and the Union’s adherence to the acquis communautaire (the ensemble of all EU legislation), represents the Union in its foreign relations (especially through one of its Vice-presidents, Catherine Ashton, who is also the High Representative of the Union for Foreign Affairs and Security Policy) and has the exclusive Right of Initiative1. Additionally, the term ‘Commission’ is also used to refer to the full administrative body about 23,000 staff members working in various Directorates-General (DGs) or services, each responsible for a particular policy area and headed by a Director-General, who reports directly to the President. The DGs draft laws, but their proposals become official only once the College of Commissioners adopts them during its weekly meeting. European Parliament The European Parliament (EP) is the first part of the EU’s legislative branch and consists of 766 Members of Parliament (commonly, MEPs), who are elected for five-year mandates by all EU citizens (over 18 years old, in 1 The Right of Initiative is the right to propose laws. In the EU, the EC has the right to propose Regulations and Directives to the European Parliament and to the Council of the European Union).

THE EU EXPLAINED

Austria over 16). The first direct EP election was held in 1979; the latest in 2009; the next will happen in little under two months, between May 22nd and 25th, 2014. The EP is divided into seven large fractions plus several independent MEPs. The biggest three fractions are the European People‘s Party pooling Christian Democrats (EPP), followed by the Party of European Socialists (PES) and by the Alliance of Liberals and Democrats Party (ALDE). It works either in a big plenary or in its 20 different Committees, each responsible for specific issue areas. The EP shares its legislative competences with the Council of the European Union. Council of the European Union (Council of Ministers) Also known as ‘the Council’, the Council of the EU is structured in issue-specific groups (councils), comprising the respective Ministers of the Member States (e.g., the Council for Justice and Home Affairs, with all Ministers of the Interior/Home Affairs). The presidency of the Council changes every six months and the ‘president’ in office supplies the different councils with a Chairperson, with the exception of the council on Foreign Affairs, which is presided to by the High Representative. The issue areas are mirrored in those of the EP (e.g., environment, education, economy, budget), with whom the Council shares its legislative competences. Additionally, the Council also has executive powers. The cur-

rent presidency (January–June 2014) is held by Greece; the following one (July–December 2014) will be held by Italy. 2. Outside the institutional triangle European Council The European Council (no standard abbreviation is used) is an EU institution comprising the heads of state or heads of government of the Member States, along with the council’s own President (Herman Van Rompuy, until November 2014) and the President of the European Commission (José Manuel Duraão Barroso, until October 2014). The High Representative of the Union for Foreign Affairs and Security Policy takes part in its meetings. The European Council was established as an informal body in 1975; it became an official EU institution in 2009, when the Treaty of Lisbon entered into force. While the European Council has no formal legislative power, it is charged under the Treaty of Lisbon with defining “the general political directions and priorities” of the Union. It is thus the Union’s strategic (and crisis-solving) body, acting as the collective presidency of the EU. European Central Bank The European Central Bank (ECB) is the central bank for the euro and administers the monetary policy of the euro area, which consists of 18 EU member states and is one

of the largest currency areas in the world. It is one of the world’s most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt, Germany. Since 2011 (and until 2019) the President of the ECB has been Mario Draghi, former governor of the Bank of Italy. The owners and shareholders of the European Central Bank are the central banks of the 28 Member States of the EU. Court of Justice of the European Union The Court of Justice of the European Union (CJEU) is an EU institution that encompasses the whole judiciary. S eated in Luxembourg, it consists of two major courts and a number of specialised courts. The institution was originally established in 1952 as the Court of Justice of the European Coal and Steel Communities (as of 1958 the Court of Justice of the European Communities (CJEC)). In 2009, with the entry into force of the Treaty of Lisbon, the court changed to its current name. Its mission is to ensure that “the law is observed (…) in the interpretation and application” of the Treaties. The Court reviews the legality of the acts of any EU institution, ensures that the Member States comply with obligations under the Treaties and interprets EU law at the request of the national courts.

It consists of two major courts: i) the European Court of Justice (created in 1952), the highest court in the EU legal system; ii) the General Court (created in 1988; formerly the Court of First Instance); 3. Not an EU body! Council of Europe The Council of Europe (CoE) is an international organisation promoting cooperation amongst all countries of Europe in the areas of legal standards, human rights, democratic development, the rule of law and cultural cooperation. It was founded in 1949, has 47 Member States with over 800 million citizens, and is an entirely separate body from the EU. The CoE cannot make binding laws. Its best known bodies are the European Court of Human Rights (ECHR), which enforces the European Convention on Human Rights, and the European Pharmacopoeia Commission, which sets the quality standards for pharmaceutical products in Europe. The Council of Europe's work has resulted in standards, charters and conventions to facilitate cooperation between European countries. Its statutory institutions are the Committee of Ministers (comprising the foreign ministers of each of its 47 Member States), the Parliamentary Assembly (composed of MPs from the parliament of each Member State) and the Secretary General (Thorbjørn Jagland).

THE EU EXPLAINED

B. WHAT CAN THE EU DO? 1. Exclusive competences – as per Article 2 (1) and Article 3 of the Treaty on the Functioning of the European Union (TFEU) In these areas, only the EU may legislate and adopt legally binding acts. Exceptions are possible if the EU empowers Member States to act or with regard to the implementation of Union acts. • The customs union, including an internal free trade area with common customs tariffs (Art. 31 TFEU).

• The monetary policy of the EU for the Member States whose currency is the euro, overseen by the European Central Bank and with certain precepts formulated in the Stability and Growth Pact (Art. 129 (3) and (4), Arts. 132, 138, 219 TFEU). • Competition rules controlling state aid from national governments and the actions of companies necessary for the functioning of the internal market. • A common international trade policy, e.g., a common position in international trade negotiations (Art. 207 TFEU).

• The conclusion of certain international agreements (Art. 3 (2) TFEU). • Common commercial policy.

• The conservation of marine biological resources (part of the Common Fisheries Policy, Art. 38 (1) TFEU).

2. Shared EU competences – as per Art. 2 (2) and Art. 4 TFEU These are policy areas on which the Member States have agreed to act individually if the EU has not exercised (or planned to exercise) its competence. If a policy area is neither exclusive nor falls under supportive actions, it is a shared competence. Some examples are: • Internal market;

• Economic, social and territorial cohesion; • Agriculture and fishing (except the conservation of marine biological resources); • Social policy; • Transport;

• Environment, pollution and energy; • Consumer protection;

• Area of Freedom, Security and Justice. 3. Supporting, coordinating or complementary competences – as per Art. 2 (5), Art. 6 TFEU The EU can financially support the actions of the Member states that have agreed to coordinate their domestic policies through the EU. However, it does not entail harmonisation of regulations. These areas include: • Education, vocational training, youth and sport; • Tourism;

• Administrative cooperation; • Civil protection;

• Protection and improvement of human health; • Industry; • Culture.

C. LEGAL ACTS OF THE EU While the EU can issue several types of legal acts, not all are fully binding for its Member States. These acts are named according to their legal strength and are divided into: • Regulations – have to be strictly adhered to in all Member States and leave no room for adjustments during the implementation process;

ber States. In brief2: the EC (which has the exclusive Right to Initiative), the Council and the EP decide if the proposal becomes a legal act after having discussed relevant details. General policy guidelines and statements, especially from the EP, are formulated in Resolutions. They can entail instructions for future procedures, as well as regulations, which are formally valid in the Member States. Legal acts passed by the EP and the Council enter into force once the national governments have transposed them into national law. The combined legal heritage of the EU, including all legal acts, contracts and treaties is known as the acquis communautaire.

• Directives – provide a framework and give a certain policy direction, leaving the states with more flexibility and room for adjustments; • Decisions – always address certain recipients and are only valid for those specific countries/people/institutions;

• Recommendations – without legal force, but negotiated and voted on according to the appropriate procedure, they are not binding for the Member States;

• Opinions – similar to recommendations in that they have no legal force, but not voted on, simply emitted. The European legislative procedure runs considerably longer than those of most Mem-

2 To learn more about the legislative procedure, please refer to this European Parliament flowchart.

THE EU EXPLAINED

III. FURTHER RESEARCH A. GENERAL LINKS To learn more about the EU, its institutions and instruments, please visit their respective websites, below. 1. European Union

http://europa.eu/index_en.htm http://en.wikipedia.org/wiki/Book:European_Union

2. EU-Institutions

http://eu2012.dk/en/EU-and-the-Presidency/About-EU/EU-Background/EUInstitutions

3. European Neighbourhood Policy http://ec.europa.eu/world/enp/index_en.htm

4. Enlargement

http://ec.europa.eu/enlargement/index_en.htm

5. Common Foreign and Security Policy

http://europa.eu/pol/cfsp/index_en.htm http://europa.eu/agencies/regulatory_agencies_bodies/security_agencies/index_ en.htm

6. Lisbon Treaty

10. Europe 2020

http://eur-lex.europa.eu/LexUriServ/LexUriServ. do?uri=COM:2010:2020:FIN:EN:PDF

11. Charter of Fundamental Rights of the European Union http://www.europarl.europa.eu/charter/pdf/text_en.pdf

B. QUESTIONS TO CONSIDER After you have read the Topic Overviews, it is recommended that you take the time to consider the questions therein, as well as the ones below. This will be an important phase in preparation and will greatly aid you clarify your own stance on the matters at hand (which, in turn, is crucial for you to have decided by the time you start writing your Position Paper). 1. What is the legal basis for the Committee Topic? 2. What are the relevant EU competences? 3. What are the relevant EU institutions? 4. Who decides on policies? 5. Is an EU-level solution desirable? 6. What are the short-term and long-term implications? 7. What type of further legislation is needed?

http://europa.eu/lisbon_treaty/index_en.htm http://news.bbc.co.uk/2/hi/europe/6901353.stm http://www.robert-schuman.eu/doc/divers/lisbonne/en/10fiches.pdf

7. Treaty on European Union (TEU)

http://eur-lex.europa.eu/LexUriServ/LexUriServ. do?uri=OJ:C:2008:115:0013:0045:EN:PDF

8. Treaty on the Functioning of the European Union (TFEU) http://eur-lex.europa.eu/LexUriServ/LexUriServ. do?uri=OJ:C:2008:115:0047:0199:en:PDF

9. TFEU with explanations

http://en.euabc.com/upload/books/lisbon-treaty-3edition.pdf

COMMITTEE TOPICS

1. AFET – Committee on Foreign Affairs | chaired by Ms Franziska Hülß (DE) Cooling relations between the European Union and Russia? In the light of the protests in Ukraine, Russia’s disrespect of Georgia’s and Ukraine’s sovereignties and territorial integrities, and an unusually short European Union–Russia summit in January, how should the European Union position itself with regard to its relations with Russia?

Özgen (TR)

Labour migration in Europe – a two-way culture of “something for nothing”? With the recent federal popular initiative “Against mass migration” in Switzerland, the Immigration Bill currently being debated in the United Kingdom, a pan-European rise of the extreme right and the theme of xenophobia recurrently whipped up by the press, how can the European Union invert the trend in anti-migration feelings and ensure that a more harmonised set of labour migration rules are adopted by all Member States in the period leading up to 2020?

2. ECON – Committee on Economic and Monetary Affairs | chaired by Mr Tiago

4. ENVI – Committee on Environment, Public Health and Food Safety | chaired

Per aspera ad astra? Nearly four years since the beginning of the Troika interventions and with feeble signs of recovery on the horizon, it is now time for an assessment. Whereas radically different interpretations of the impact of these austerity measures have been voiced by national parliaments, the media, financial institutions and the civil society, how best can the European Union pave the way to a full-fledged recovery of its Member States’ economies?

An ever-greener Union – but at what cost? Following the European Commission’s policy framework communication of January 22nd, 2014 and the European Parliament’s resolution of February 5th, 2014 on a ‘2030 framework for climate and energy policies’, how should the European Union proceed to ensure the 2030 targets it sets are sufficiently ambitious in environmental terms, yet realistic and safe in industrial and social terms?

Pereira (PT)

3. EMPL – Committee on Employment and Social Affairs | chaired by Mr Tamer

by Ms Mónica Leal (PT)

5. IMCO – Committee on Internal Market and Consumer Protection | chaired by Ms Victoria Savvidou (GR)

7. LIBE – Committee on Civil Liberties, Justice and Home Affairs | chaired by

Ms Rita Ferreira (PT)

From bitcoin to litecoin to… dogecoin? As cryptocurrencies seem poised to become the ‘gold rush’ of the digital era, the lack of unified legislation leaves the door open to excessive speculation, money laundering and the financing of criminal activities, as well as consumers unprotected in cases of theft and without access to refund rights. With different Member States taking different stances on the matter, what measures should the European Union adopt to ensure the security of its Internal Market and the protection of its consumers?

Corruption in our backyards: While most legal instruments and institutions aimed at tackling corruption in the Member States already exist, results remain unsatisfactory. Building on the ‘Fighting Corruption in the EU’ communication and on the findings of the ‘EU Anti-Corruption Report’, and taking into account disparities amongst the Member States, what further measures can the European Union implement to help eradicate corruption within its borders by 2020?

6. INTA – Committee on International Trade | chaired by Ms Bérengère Gouraud

8. REGI – Committee on Regional Development | chaired by Mr Henrique Vieira

David vs. Goliath: In an age when the majority of economic growth takes place outside the Internal Market, micro-, small- and medium-sized enterprises are faced with one of their hardest battles – internationalisation. Building on the ‘Entrepreneurship 2020 Action Plan’ and the ‘Small Business, Big World’ partnership, and bearing in mind the ongoing negotiations for a Transatlantic Trade and Investment Partnership, how can the European Union guarantee the best conditions for smaller businesses to thrive beyond its borders?

No continent for digital illiterates: While high-speed internet access is now available in all Member States, digital literacy levels vary greatly amongst and within regions and most goals of the Digital Agenda for Europe are yet to be implemented. With this in mind, how can the European Union act to promote the uptake of Information and Communications Technologies throughout its least developed regions, aiming to eradicate the digital divide amongst them and, ultimately, bolster their economies and development?

(FR)

Mendes (PT)

AFET

Committee on Foreign Affairs

“I think we need to change the perception that one region’s gain is another region’s pain. We in the European Union are against the mentality of bloc against bloc. We believe the European Union and Russia have all to gain from a cooperative attitude. We should work on how to move our partnership from a partnership of need into a partnership of choice through a New Agreement.” –José Manuel Durão Barroso, President of the European Commission, in Moving into a Partnership of Choice, European Commission SPEECH/13/249 , ‘Russia–European Union – Potential for Partnership’ Conference, Moscow, Russia, March 21st, 2013 vs. “In the absence of such results, the European Union will decide on additional measures, such as travel bans, asset freezes and the cancellation of the EU–Russia summit. The Commission and the EEAS will take forward preparatory work on these measures. Any further steps by the Russian Federation to destabilise the situation in Ukraine would lead to additional and far reaching consequences for relations in a broad range of economic areas between the European Union and its Member States, on the one hand, and the Russian Federation, on the other hand.” –Herman van Rompuy, President of the European Council, in Statement of the Heads of State or Government on Ukraine, European Council, Brussels, Belgium, March 6th, 2014

Cooling relations between the European Union and Russia? In the light of the protests in Ukraine, Russia’s disrespect of Georgia’s and Ukraine’s sovereignties and territorial integrities, and an unusually short European Union–Russia summit in January, how should the European Union position itself with regard to its relations with Russia?

chaired by Ms Franziska Hülß (DE)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. the Common Foreign and Security Policy (CFSP) and the European Security and Defence Policy (ESDP). In this context, the Committee is assisted by a Subcommittee on Security and Defence (SEDE); 2. relations with other EU institutions and bodies, the UN and other international organisations and inter-parliamentary assemblies for matters falling under its responsibility; 3. the strengthening of political relations with third countries, particularly those in the immediate vicinity of the Union, by means of major cooperation and assistance programmes or international agreements such as association and partnership agreements; 4. the opening, monitoring and concluding of negotiations concerning the accession of European States to the Union; 5. issues concerning human rights, the protection of minorities and the promotion of democratic values in third countries. In this context the committee is assisted by a subcommittee on human rights. Without prejudice to the relevant rules, members from other committees and bodies with responsibilities in this field shall be invited to attend the meetings of the subcommittee. The Committee coordinates the work of joint parliamentary committees and parliamentary cooperation committees as well as that of the inter-parliamentary delegations and ad hoc delegations and election observation missions falling within its remit.

1. WHY DOES THIS MATTER? The European Union (EU) holds diplomatic relations with nearly all countries in the world. Russia is the EU’s largest bordering country, its third biggest trading partner3 and, today, one of the world’s key players. As they work together and cooperate in different fields, the EU and Russia do so on the basis of a bilateral association agreement – officially, the Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Russian Federation, of the other part (CPA)4. Furthermore, the EU is represented by its Delegation in Russia, which has similar functions to those of an embassy. Besides, the Treaty of Lisbon made it easier for the EU to have a more efficient, coherent and better structured foreign policy. As a result, the European External Action Service (EEAS)5 was launched to widen possibilities of cooperation with external partners, such as Russia. In 2008, negotiations on a new and more detailed EU–Russia agreement were established. Russia and the supranational EU are two global superpowers. They exert considerable influence in the world stage, but, as already described, influence also one another in the fields of, inter alia, economy, education and security. In an age of globalisation and of a growingly organised network of states, it is absolutely crucial that the aforementioned cooperation and support be maintained. Even more importantly, taking stock of the lessons learnt following the Cold War, the two blocs must strive to maintain peace and security in the continent. In 2014, the world – but especially the EU – must embrace the challenge of knowing how to react to Russia’s latest actions, namely the breaking of international law and the disrespecting of the sovereignties and territorial integrities of some of its neighbouring countries.

2. WHAT IS THE PROBLEM? Right now, the whole world is watching what is happening in Ukraine and Crimea with great apprehension. Following the Vilnius Summit in November 2013, when the Ukrainian President, Viktor Yanukovych, decided not to sign an Association Agreement with the EU – choosing, instead, to deepen relations with Russia –, the Euromaidan took Kiev by storm, offering growing opposition to President Yanukovych’s government and eventually toppling it. This resulted in a rapid replacement and, with the support of all Western nations, a new (interim) government took office already in February. As a reaction, pro-Russian forces took control of the region 3 To read further, see the website of the European Union External Action service, here. 4 PCAs are almost identical to the Association Agreements and, while dealing with non-EU countries, still share the same objectives (see footnote x for further information). For the full text of the PCA, please see here. 5 The EEAS, the youngest of the EU bodies implemented through the Treaty of Lisbon and established in 2011, is the EU’s diplomatic corps. It merges the foreign policy departments of the European Commission and the Council. It supports the EU foreign affairs chief in conducting EU foreign and security policy. The EEAS manages the EU’s diplomatic relations with other countries outside the bloc and aims to make its foreign policy more consistent and efficient, thereby increasing the EU’s influence in the world. To read more about the EEAS, please see here.

of Crimea, thus causing the conflict to go on. In mid-March, under the constant watch of Russian and Ukrainian military personnel (and overall support of Russia), the people of Crimea voted in favour of independence from Ukraine. The Kremlin, which does not recognise the new government of Ukraine, stated that Russian troops must protect civilians in the region from Ukrainian “ultra-nationalists”, especially after they have taken control of the interim government. Many of these civilians are Russian speakers and have welcomed Russia’s intervention. Similarities to what happened in Crimea can be found in the Georgia–Russia crisis of 2008. Back then, Georgia and Russia went to war over the de facto independent regions of Abkhazia and South Ossetia. Russia is one of the very few countries to recognise the regions as sovereign states. The EU and the United Nations (UN) strongly condemned Russia’s military presence in what they consider to be Georgian territory. Just recently, ahead of the XXII Olympic Winter Games in Sochi, Russia moved its borders 11 kilometres into Abkhazia, this way refuelling a dormant conflict. Again, while these actions were met with strong condemnation by international and EU leaders alike, Russia invoked security reasons and pledged to move out its military contingent following the Paralympic Games, in late March, but has since extended that deadline to late April. Looking behind the scenes and back in time, a few more similarities can be spotted between Georgia’s and Ukraine’s conflicts with Russia. To begin with, both countries are former Soviet republics, their governments and economies remaining deeply tied with Moscow. This becomes particularly pressing in a situation of near-bankruptcy, such as that of Ukraine, wherein Russia is perceived to have the upper hand, namely by deciding to withdraw its offer of financial support and further threating to call off an ongoing agreement on discounted gas prices with Ukraine. Similarly, the West has tried to ease its way closer to both Georgia and Ukraine, namely by offering EU Association Agreements (AA)6 (already in place with Georgia and having 6 Association Agreements are signed between the EU and a third country, setting up a framework for cooperation. The AA covers of political, social, cultural and security areas and over all provides for the liberalisation of trade. Depending on the country, the AA also prepares for a future membership of the EU. 13

signed the core element with the interim government of Ukraine, already on March 21st) and proposing NATO7 membership to both countries, a move aimed at breaking their ties with Russia and strengthening the West’s geostrategic positioning in the area. Undeniably, by annexing Crimea, Russia has ostensibly ignored Article 24 of the Charter of the United Nations, which establishes as illegal “the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.”8 A breach of this magnitude cannot be tolerated worldwide, and relations between the West and Russia have since taken on a bitterer tone. Naturally, this is not the first time that relations between Moscow and Brussels have been strained. It had, however, been a long time since Russia had posed a serious military threat so close to Europe’s borders and a decisive approach will have to be found.

3. WHAT DO THE NUMBERS SAY? The following numbers can provide some insight into EU–Russia trade relations9: • Russia is called an energy superpower. The country has the world’s largest natural gas reserves, the second largest coal reserves and the eight largest oil reserves. • Russia is the world’s leading natural gas and oil exporter. In 2010, the EU imported crude oil worth €100,473 million (63% of total oil imports) and gas worth €14,992 million (9% of total gas imports). 80% of the gas supplied by Russia to the EU is conveyed through a network of more than 13,000 km of Ukrainian pipelines.

• Ukraine itself depends on Russia for its energy. 42% of its natural gas comes from Russia and 40% from Central Asia – through transit routes controlled by Russia. • 36% of Germany’s oil and 31% of its gas are imported from Russia.

• In 2010, the trade volume between the EU and Russia reached €246bn, a 185% increase from 2000. Since Russia has been a member of the World Trade Organization (WTO) only from 2011 onward, trade relations will possibly developed further. The following numbers can provide some insight into the situation in Ukraine: • The Soviet Union existed from 1922 onwards, lasting for 69 years. On December 25th, 1991it was dissolved into 15 post-Soviet states10.

• Today, 44.6 million people live in Ukraine: 77.8% are ethnic Ukrainians, while in the east and south of Ukraine, minorities such as ethnic Russians (17.3%), Belarusians(0.6%), Tatars (0.5%) and Romanians (0.3%) can be found11.

4. WHO IS WHO? This diagram shows the relations between Russia and the EU, including important parameters and influencing factors. (Fig.1) The relations between these two are based on the PCA (see ‘1. Why does this matter?’ above and ‘5. What has already been done?’ below). They are both members of the WTO. The EU– Russia Centre, an independent institution, provides information on EU-Russia relations, mostly focusing on the democratic status in Russia. The European External Action Service (EEAS) (see ‘1. Why does this matter?’ above) conducts the EU’s Common Foreign and Security Policy (CFSP), which, in turn, provides the framework and the guidelines to act and implement sanctions. The European Commission implements and oversees EU policies, in this case: external relations and foreign affairs. There are certain countries, especially the aforementioned former Soviet republics (see ‘1. Why does this matter?’ and ‘2. What is the problem?’ above), which hold different agreements with the EU. For some time, Russia has also tried to establish an alternative to the EU, the socalled Eurasian Union (see below). The United States also have an influence in the EU’s relations with Russia, especially through NATO (see ‘2. What is the problem?’ above and ‘5. What has already been done?’ below) and the through the G7 (see below). The EU, Russia and the US are all members of the United Nations, the most representative intergovernmental organisation.

5. WHAT HAS ALREADY BEEN DONE? • Since 1990, the EU has completed ten PCAs with Russia, countries of Eastern Europe, the Southern Caucasus and Central Asia, with a focus on helping develop their democracies and economies. • Russia and the EU singed their PCA in 1994, which then came into force in 1997.

• Russia chose not to join the European Neighbourhood Policy (ENP)12, calling it a “junior partnership” that would prevent both blocs from being equal partners13. Armenia, Azerbaijan, Georgia, Moldova and Ukraine are core partners in the ENP. • Russia and the EU have agreed to create four Common Spaces (policy areas) for cooper-

7 The North Atlantic Treaty Organization constitutes a system of collective defence whereby its Member States agree to mutual defence in response to an attack by any external party. To learn more about NATO, please visit their website, here. 8 Extract from EU–US – Joint Statement, European Commission – STATEMENT/14/48, Brussels, Belgium, March 26th, 2014. For the full text of the statement, please see here. 9 All numbers from Eurostat. 10 There are: Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan. 14

11 From the Ukrainian 2001 population census. For the full census, see here. 12 A range of EU policies are designed to support collaboration between the EU and its neighbours. Through its ENP, the EU works with its southern and eastern neighbours to achieve the closest possible political association and the greatest possible degree of economic integration. This goal builds on common interests and on values — democracy, the rule of law, respect for human rights and social cohesion. 13 In the eyes of the Russian state, PCA covers more aspects and gives the partner more abilities, so all in all the EU and the third country are on the same level.

ation in different spheres, with the objectives of: i) creating an open and integrated market between Russia and the EU, ii) establishing visa-free travel, iii) cooperating in the combat against terrorism and other forms of international crimes, iv) strengthening EU and Russian research communities, promoting education, the acquisition of qualifications and the development of other cultural aspects. • In 2008, the Georgia–Russia crisis led to breakaway of South Ossetia and Abkhazia.

• Gas Dispute 2009: Following disputes over gas prices, Gazprom stopped supplying gas to some EU Member States via Ukraine, accusing Kiev of shutting down all four pipelines and siphoning off gas for itself. Background information tells us that since Ukraine’s Orange Revolution in 2004, the country has moved closer to the west, seeking membership of NATO and, ultimately, of the EU.

• Russia accessed the WTO14 on August 22nd , 2012. Russia’s entry was expected to be a major element to deepening economic relationship between the EU and Russia.

• The EU Eastern Partnership summit in Vilnius was overshadowed by EU–Russia rivalry, namely by the introduction of proposal for a Eurasian Union15, which Russia sees as an alternative to an AA with the EU. This was when Ukraine decided to suspend talks with the EU, which set off the protest earlier this year. • Through the Crimean Referendum, held on March 16th, 2014, the people in the peninsula were asked if they wanted to join Russia as a federal subject. Official numbers claim an 83% turnout and 96% of votes in favour, which many international observers believe to be a falsification.

• Following the referendum in Crimea, all dialogue between the EU and Russia has been suspended, including the cancellation of the EU–Russia Summit in June. Furthermore, Russia has been expelled from the group of industrialised nations (formerly G8, now G7) and sanctions have been imposed by the EU (travel bans for and the freezing of assets of 21 high-profile individuals which have close ties to the Kremlin). These sanctions may be expanded on, as declared in an EU–US joint statement of March 26th, 2014: “Further steps by Russia to destabilise the situation in Ukraine would lead to additional and far reaching consequences for the EU’s […] relations with Russia in a broad range of economic areas.”16

Fig. 1

14 The World Trade Organization (WTO) is the only global international organisation dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. (http://www.wto.org/english/thewto_e/whatis_e/ whatis_e.htm) 15 The Eurasian Economic Union is a proposed economic union of post-Soviet states, based on the idea of the European Union’s integration. On November 18th, 2011, the Presidents of Belarus, Kazakhstan and Russia signed an agreement setting a target of establishing the Eurasian Union by 2015. 16 Extract from EU–US – Joint Statement, European Commission – STATEMENT/14/48, Brussels, Belgium, March 26th, 2014. You can access the full text of the statement from one of the footnotes above. 15

6.WHAT NOW? Where does the story go? Will Russia go on carving out territories? Will Poland or the Baltic States be the next conflict zones? And what will the US and the EU do to prevent this? Already imposed sanctions are seen as the most comprehensive since the end of the Cold War. Worse economic sanctions may follow. But is the EU ready to take on the consequences of further, bolder actions that could harm the Member States? Or could the EU find a further solution to the problem of dependence on gas so that the Member States would be at liberty to take a harsher stance against Russia without fearing the consequences? As said before, these conflicts exist against a backdrop of common history and the only way to find solutions is to first fully understand that history and take into account the positions of all parties involved. Ultimately, the Committee on Foreign Affairs will have to decide whether taking an absolute hard-line stance is the most beneficial option, or whether further and, surely, greater diplomatic efforts could be made to remedy the current situation.

7. WHAT TO GOOGLE? EU–Russia relations; EU Partnership and Cooperation Agreements; European External Action Service; Ukrainian crisis 2014; Crimean crisis 2014; 2008 Georgia–Russia crisis; 2009 Ukraine–Russia gas dispute; Cold War; former Soviet republics; EU Vilnius Summit; Eurasian Union; American, European and Russian sanctions 2014; principle of territorial integrity.

8. WHAT TO READ? Official sources and background information The European Union and Russia | European Commission http://eeas.europa.eu/russia/docs/russia_brochure07_en.pdf

European External Action Service | European Union – External Action http://www.eeas.europa.eu/background/index_en.htm

EU relations with Russia | European Union – External Action http://www.eeas.europa.eu/russia/index_en.htm

Partnership and Cooperation Agreements (PCAs)

http://europa.eu/legislation_summaries/external_relations/relations_with_third_countries/eastern_europe_and_ central_asia/r17002_en.htm

Russia and the WTO | World Trade Organisation

http://www.wto.org/english/thewto_e/countries_e/russia_e.htmesearch on EU-Russia Relations |European Union Institute for Security Studies

Research on EU-Russia Relations |European Union Institute for Security Studies http://www.iss.europa.eu/regions/russia-and-eastern-neighbours/

Ukraine Crisis | Features and Analysis

http://www.bbc.com/news/world-europe-26270866

News articles ‘Let Georgia be a lesson for what will happen to Ukraine’, SAAKASHVILI M. in The Guardian, March 14th, 2014 http://www.theguardian.com/commentisfree/2014/mar/14/georgia-lesson-for-ukraine-crimea-referendum-trick

‘Ilves and German MFA: relationships between EU, NATO and Russia cannot remain same’ in The Baltic Course, March 13th, 2014 http://www.baltic-course.com/eng/baltic_states/?doc=88971

‘EU–Russia rivalry looms over Vilnius summit’ in BBC News Europe, November 28th, 2013 http://www.bbc.com/news/world-europe-25133721

‘The EU and Russia cease to be a priority for each other: The squabble over WTO membership reveals the defunct state of the strategic partnership’, KONONENKO V., The Finnish Institute of International Affairs, December 19th, 2012 http://www.fiia.fi/en/publication/305/the_eu_and_russia_cease_to_be_a_priority_for_each_other/

‘Reactions to the Russo–Georgian War: towards a European Great Power Concert’, BOESEN L. and LARSEN H., Danish Institute for International Studies, Denmark, December, 2009 http://subweb.diis.dk/sw87465.asp

‘EU–Russia relations: unfortunate continuity’, MOSHES A. in Foundation Robert Schumann, European Issues no. 129, February 24th, 2009 http://www.robert-schuman.eu/en/doc/questions-d-europe/qe-129-en.pdf

‘Q&A: what’s behind the Ukraine–Russia gas dispute’, GOW D. in The Guardian, January 7th, 2009 http://www.theguardian.com/business/2009/jan/07/ukraine-russia-gas-dispute

‘Europe and the Georgia-Russia conflict’, BARYSCH K. in Centre for European Reform, September 30th, 2008 http://www.cer.org.uk/in-the-press/europe-and-georgia-russia-conflict

AFET

ECON

Committee on Economic and Monetary Affairs

“I expect that the future and governance of the Troika will become part of the wider institutional discussions in the process of deepening EMU. Realistically, a deeper fiscal union will not be achieved overnight: for the Commission, the guiding principle is that stronger solidarity can only be pursued in return for stronger responsibility – and it can only emerge in a profoundly democratic process. The European Parliament is at the core of this debate.” –Olli Rehn, Vice-president of the European Commission and European Commissioner for Economic and Monetary Affairs and the Euro, in Mr Olli Rehn at the ECON Committee Hearing on the Troika Report, European Commission SPEECH/14/14, Strasbourg, France, January 13th, 2014

chaired by Mr Tiago Pereira (PT)

COMMITTEE COMPETENCIES

(As per the statutes of the European Parliament)

Committee responsible for: 1. the economic and monetary policies of the Union, the functioning of the Economic and Monetary Union and the European Monetary and Financial System (including relations with the relevant institutions or organisations); 2. the free movement of capital and payments (cross-border payments, single payment area, balance of payments, capital movements and borrowing and lending policy, control of movements of capital originating in third countries, measures to encourage the export of the Union’s capital); 3. the international monetary and financial system (including relations with financial and monetary institutions and organisations); 4. rules on competition and state or public aid; 5. tax provisions; 6. the regulation and supervision of financial services, institutions and markets including financial reporting, auditing, accounting rules, corporate governance and other company law matters specifically concerning financial services. 17

1. WHY DOES THIS MATTER? “It’s a recession when your neighbour loses his job; it’s a depression when you lose your own.” –Harry S. Truman, 33rd President of the United States of America

According to the International Labour Organization (ILO), in April 2013, there were 10 million more Europeans unemployed than in the beginning of the financial crisis, in 200817. This means that about 26 million people are currently unemployed in the European Union (EU), almost three times the population of Portugal. With soaring unemployment, many parents struggle every day to feed their children, while new graduates find it harder to start a career for which they have studied hard for so many years. Additionally, social benefits are scarce and are decreasing every year across the EU; bank deposits are partially taken from citizens and national budgets feature greater cuts each year. Risks of more bailouts are now a reality in countries such as Cyprus, Ukraine, Portugal, Greece and Spain. What this amounts to is that millions of people have been left without access to proper food, clothing, education and healthcare. In an age of unprecedented development, it seems paradoxical that so many of us actually enjoy lower standards of living than the previous generation did. In the long term, it is imperative that we learn from past mistakes and act with decisiveness to avoid future crises. Even before that, it will be fundamental that we take stock of the impact and overall usefulness of the measures already in place and find our way out of this prolonged crisis and back into real growth.

2. WHAT IS THE PROBLEM? It has been four years since Troika18 interventions started in Europe. Four years of austerity19 and tough decisions made by the Member States in an attempt to reduce their external debts and public deficits. Primarily, these measures have encompassed tax raises and far-reaching (and, some would argue, often extreme or disproportionate) budgetary cuts, which have in turn led to rising unemployment and major cuts in social benefits. Inevitably, millions of European citizens who previously found financial stability in their jobs, have come to face unexpected hardship. This is patent in the staggering number of citizens living below the poverty line and, as was to be expected, resulted in waves of protest and social unrest, with demonstrations escalating into unusually violent conflicts. It seems that not a day will go by without the media reporting on the effects the crisis and ensuing austerity have had on increasingly disgruntled populations. 17 The International Labour Organization (ILO) is a United Nations agency dealing with labour issues, particularly international labour standards and decent work for all. 18 The tripartite committee led by the European Commission, including the European Central Bank (ECB) and the International Monetary Fund (IMF) that organised loans to the governments of Greece, Ireland, Portugal and Cyprus. 19 Difficult economic cuts enforced by government measures aimed at reducing public expenditure. 18

At the other side of the table, national parliaments and governments tell their citizens that such sacrifices are not just necessary, but inevitable if we are to achieve sustainable levels of economic recovery. The Prime Minister of Portugal, Pedro Passos Coelho, was recently quoted saying that “we know there is always a price to pay in politics, but we also know that this path will give us the chance to end our bailout programme and recover our opportunity to grow and give more social justice and prosperity for all.”20 Needless to say, this is a point of view shared by most European leaders. At this point, people cannot help but wonder: where do we find ourselves? This, indeed, is one of the questions that lie at the heart of this topic. The other question is: with feeble signs of recovery on the horizon and unemployment rates very slowly decelerating; with tax rates still at record-highs and millions of people living in poverty; with businesses still going bankrupt at an alarming rate; is austerity the right answer or should the EU as a whole attempt to overcome any lingering effects of the crisis and get back to prosperity by pursuing a different strategy? With a variety of strong opinions being defended by national governments and parliaments, the European Commission, the IMF and the ECB, opposition parties, economists, other experts and commentators and individuals in general, a definitive answer has proved all but impossible to find.

3. WHAT DO THE NUMBERS SAY? To get a more precise picture of the problem and its sheer dimension, it may be useful to compare some key, EU-wide indicators21. Starting with unemployment, there was an increase of 1%, from 11% in 2010 to 12% in 2014 (stable since late 2013), meaning that, as of January, over 26 million people were unemployed in the EU-28, 19.175 million of whom in the euro area alone. Comparing to 2008 levels (before the crisis hit), overall unemployment was at 7.1% in the EU-27 and 7.6% in the euro area. Youth unemployment (people aged 15 to 24) has increased from a minimum of 15.8% in the EU-27 in 2008 (with similar values within the euro area alone) to 23.4% in the EU-28 in January 2014 (24.0% in the euro area), amounting to a total of 5.556 million unemployed youths, 3.539 million of whom in the euro area. In some Member States, these numbers are twice as worrying, with Greece, Spain and Croatia currently registering youth unemployment rates of 59%, 54.6% and 50%, respectively. And what about our productivity? The EU-28’s Real Gross Domestic Product (real GDP) increased by 1.07% between 2010 and 2013. A seemingly feeble sign of recovery, although we must not forget that the EU took a hard blow back in 2009, with a 4.5% decrease. To get a more sensible view of the financial crisis, we can analyse the number of people at risk of poverty or social exclusion: 23.7% in 2010; a number that increased to 24.8% by 2013, representing a total of 120 million people at risk in the EU-28. From 2010 to 2013, the average collection rate of standard value added tax (VAT) increased by 1.14%, while inflation grew by 2.33%. Finally, it 20 Extract from ‘Austerity clobbers Portugal’s ruling party in local votes’, KHALIP A. for Reuteurs, Lisbon, Portugal, September 30th, 2013. For the full article, see here. 21 All values according to Eurostat.

is also interesting to see that, in the same period, the level of tertiary educational attainment22 increased by 3.2%. And how much do we owe? In 2007, right before the onset of the crisis, the total combined public balance in the EU-28 amounted to 1–1.5% of the GDP (well below the 3% limit imposed to the Member States), while the total combined public debt was at 58.9% of the GDP (just short of the 60% limit imposed to the Member States). In 2013, these same indicators were valued at 3.9% (nearly 1% above the limit) and 86.8% (an increase of nearly 50% in the space of six years). Doing some minor number crunching, we can easily understand that millions of jobs were lost, our productivity is practically stagnant, taxes and inflation keep going up and we owe more than at almost any other point in time. Yet, we have never been more educated.

4. WHO IS WHO? See Fig. 2

5. WHAT HAS ALREADY BEEN DONE? Aiming at mitigating the effects of the crisis, European institutions have, over the past years, implemented different measures, which, in turn, yielded different results. Behind these measures, we can find the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). The IMF response to the global financial crisis began already in 2008. In practice, it increased its lending capacity23, used its cross-country experience to offer policy solutions and introduced reforms that better equipped it to respond to the needs of those countries most affected by the crisis. Additionally, it worked to sharpen its analysis and policy advice services, and reformed its governance structure to not only strengthen its legitimacy, but also ensure that small developing countries would not lose their influence within it. In parallel with the actions taken by the IMF, the European Commission has been developing its solutions to the crisis; solutions which focus on economic, monetary and political union. Particularly, two stabilisation mechanisms have been set up: i) the European Financial Stabilisation Mechanism (EFSM)24 and ii) the European Financial Stability Facility (EFSF)25. To ensure

Fig. 2

22 The share of the population aged 30–34 who have successfully completed university or university-like (tertiary-level) education with an education level ( ISCED 1997 – International Standard Classification of Education) of 5–6. 23 Also called borrowing capacity, an institution’s ‘lending capacity’ is the amount of money available as a loan to an entity (be that a company or a state) at a particular time, based on its financial situation. 24 The European Financial Stabilisation Mechanism (EFSM) is an emergency funding programme reliant upon funds raised in the financial markets and guaranteed by the European Commission using the budget of the EU as collateral. 25 The European Financial Stability Facility (EFSF) is a special-purpose vehicle which is financed by the Members States in the euro area. It was agreed by the EU-27 on May 9th, 2010, with the objective of preserving financial stability in Europe by providing financial assistance to euro area Member States facing economic difficulties. 19

greater preparedness for the future, a new surveillance framework and coordination of economic policies were also put in place. As of May 2013, the EFSM and the EFSF have been replaced by the European Stability Mechanism (ESM), which will be in charge of any future euro area bailouts and has, to this day, already approved the Financial Assistance Facility Agreements for the recapitalisation of Spanish banks and of the financial sector in Cyprus. Finally, the ECB responded with two types of measures. Standard measures aim at a downward adjustment of key interest rates26, in turn aiming at decreasing risks to price stability27. In the euro area, short-term interest rates are now close to zero and overall financing conditions can be considered favourable. Non-standard measures aim at restoring the proper transmission of the monetary policy impulses, including lending operations through a fixed-rate tender procedure with full allotment28, the provision of liquidity with longer maturity29 and an expansion of the set of assets30 that could serve as collateral31 for receiving central bank liquidity. Stability and Growth Pact (SGP): as stated by the European Commission, “the Stability and Growth Pact (SGP) is a rule-based framework for the coordination of national fiscal policies in the European Union.” Its aim is to safeguard sound public finances, based on the principle that economic policies are a matter of shared concern for all Member States. The SGP contains two different arms of action32. The Sixpack: secondary legislation governing the SGP was initially approved in 1997, with significant reforms enacted in 2005 and 2011. The 2011 reforms, referred to as the ‘six-pack’, addressed gaps and weaknesses in the framework identified during the crisis. These reforms significantly strengthened both the fiscal surveillance and enforcement provisions of the SGP by adding an expenditure benchmark to review countries’ fiscal positions, operationalising the Treaty of Lisbon’s debt criterion, introducing an early and gradual system of financial sanctions for euro area Member States and requiring new minimum standards for national budgetary frameworks. The Euro-Plus Pact: a 2011 financial agreement plan made amongst some EU Member States. The participants committed to a list of political reforms, which are intended to improve the fis26 The rate at which banks may borrow short-term funds directly from the ECB. 27 According to the ECB’s Governing Council, “price stability is defined as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.” The Governing Council has also clarified that, in the pursuit of price stability, it aims to maintain medium-term inflation rates below, but close to 2%. 28 Fixed-rate, full-allotment liquidity provision happens when the interest rate is specified in advance and banks bid the full amount of money they wish to transact at the fixed interest rate. 29 The period of time for which a financial instrument remains outstanding. Maturity refers to a finite period at the end of which the financial instrument will cease to exist and the amount originally borrowed is repaid with interest. 30 A financial asset is an intangible asset that derives value because of a contractual claim. Examples include bank deposits, bonds and stocks. Property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. Because collateral offers some security to the lender in case the borrower fails to pay back the loan, loans that are secured by collateral typically have lower interest rates than unsecured loans. 31 Collateral refers to property or other assets that a borrower offers a lender to secure a loan. 32 The SGP contains two arms: the preventive arm and the corrective arm. The preventive arm seeks to ensure that fiscal policy is conducted in a sustainable manner over the cycle; the corrective arm sets up the framework for countries to take corrective action in the case of excessive deficit. 20

cal strength and competitiveness of each country. Designed as a successor of the SGP, which has not been implemented consistently, it was adopted in March 2011 and uses the EU’s Open Method of Coordination33. Four broad strategic goals make up the bulwarks of the Euro-Plus pact: i) fostering competitiveness, ii) fostering employment, iii) contributing to the sustainability of public finances and iv) reinforcing financial stability.

6. WHAT NOW? With four years gone by since a series of measures have been taken on the European and the national levels with varying degrees of success, we have now reached the point where an assessment is not only possible, but also necessary. What can we learn from these four years? Is austerity the right path to a full financial recovery? If not, what alternatives are there? On the one hand, many civil society actors remain convinced that there could be different solutions to the crisis and even the European Court of Justice is currently looking into the legality of some of the actions already taken by the ECB. Whatever it is, the outcome of that investigation will surely have to be taken into account. On the other hand, the political spectrum gives us alternatives as distinct as an industrial policy that promotes already winning sectors or even proposals to cut middle-class benefits to fund infrastructure spending. Yet another option could be to increase national debt by creating more jobs and developing infrastructures across the EU, in a move similar to Roosevelt’s New Deal34. Ultimately, whatever few signs of recovery are feeble, and most crisis indicators remain stagnant, meaning reforms are still needed in many economic and financial sectors. It will be the task of the Committee on Economic and Monetary Affairs to, all thing considered, propose the steps that should be taken next.

7. WHAT TO GOOGLE?

Euro area crisis; Austerity in the EU/euro area; (youth) unemployment rates in the EU; euro-bonds; EU bailout programmes; EU Troika interventions; public deficit; national debt; Alistair Darling’s plan; EFSM; EFSF; European Stability Mechanism (ESM).

8. WHAT TO READ? ‘The Financial Crisis Was A Failure Of Government, Not Free Markets’, SALSMAN R. in Forbes, September 19th, 2013 http://www.forbes.com/sites/richardsalsman/2013/09/19/the-financial-crisis-was-a-failure-of-government-not-freemarkets/

‘Five Financial Reforms That Would Prevent Crises and Promote Prosperity’, SALSMAN R. 33 The EU’s Open Method of Coordination is an intergovernmental form of governance in the EU that is based on the voluntary cooperation of its Member States. 34 The New Deal was the set of federal programmes launched by President Franklin D. Roosevelt after taking office in 1933, in response to the calamity of the Great Depression. It had four major goals, namely: i) economic recovery, ii) job creation, iii) investment in public works and iv) civic uplift.

in Forbes, March 6th, 2013

http://www.forbes.com/sites/richardsalsman/2012/03/06/five-financial-reforms-that-would-prevent-crises-andpromote-prosperity/

‘Europe’s economic crisis: some ideas for recovery and growth’, JONES S. in The Guardian, August 16th, 2013 http://www.theguardian.com/business/economics-blog/2013/aug/16/europe-economic-crisis-ideas-for-recoverygrowth

‘European financial crisis’ in Salon, (last update on September 25th, 2013) http://www.salon.com/topic/european_financial_crisis/

‘The origins of the financial crisis: Crash course’ in The Economist, September 7th, 2013 http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-yearsarticle

‘Eurozone crisis is just getting started’, WARNER J. in The Telegraph, February 14th, 2014

http://www.telegraph.co.uk/finance/comment/jeremy-warner/10636290/Eurozone-crisis-is-just-getting-started.html

‘The European Debt Crisis Visualized’, Bloomberg News in YouTube, News & Politics, February 11th, 2014 http://www.youtube.com/watch?v=C8xAXJx9WJ8

European Council 24/25 March 2011 – Conclusions, European Council EUCO 10/11, Brussels, Belgium, March 25th, 2011 http://register.consilium.europa.eu/doc/srv?l=EN&t=PDF&gc=true&sc=false&f=ST%2010%202011%20INIT

‘The Financial Crisis and the Euro Plus Pact: A Labour Lawyer’s Perspective’, BARNARD C. in Industrial Law Journal, Vol. 41, Issue 1, pp. 98–114, Oxford, United Kingdom, January 2012 http://ilj.oxfordjournals.org/content/41/1/98.extract

European Commission | Economic and Financial Affairs – Stability and Growth Pact http://ec.europa.eu/economy_finance/economic_governance/sgp/index_en.htm

European Commission | Economic and Financial Affairs – Intergovernmental support mechanisms http://ec.europa.eu/economy_finance/assistance_eu_ms/intergovernmental_support/index_en.htm

‘IMF’s Response to the Global Economic Crisis’, International Monetary Fund, March 13th, 2014 https://www.imf.org/external/np/exr/facts/changing.htm

ECON 21

EMPL

Committee on Employment and Social Affairs

“The European Union provides the closest thing to a ‘laboratory’ on open borders, allowing us to examine how reducing barriers to mobility might play out under conditions of economic stability (between, as well as within, countries), large opportunity differentials between countries, and economic strife. Yet many of the results remain to be seen.”

–Meghan Benton and Milica Petrovic in How free is free movement? Dynamics and drivers of mobility within the European Union, Migration Policy Institute Europe, Brussels, Belgium, March 2013

chaired by Mr Tamer Özgen (TR)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. employment policy and all aspects of social policy, such as working conditions, social security and social protection; 2. health and safety measures at the workplace; a) the European Social Fund;

3. vocational training policy, including professional qualifications; 4. the free movement of workers and pensioners; 5. social dialogue;

6. all forms of discrimination at the workplace and in the labour market, except those based on sex; 7. relations with:

a) the European Centre for the Development of Vocational Training (Cedefop),

b) the European Foundation for the Improvement of Living and Working Conditions, c) the European Training Foundation,

d) the European Agency for Safety and Health at Work,

e) other relevant EU bodies and international organisations. 22

1. WHY DOES THIS MATTER? In today’s world, migration is a phenomenon strongly connected to globalisation. In this regard, it serves as an important instrument for making up for labour and skill shortages in the national labour markets and alleviating demographic tendencies of ageing and, in some countries, decreasing population. Additionally, it contributes to entrepreneurship, greater diversity and innovation in host economies. With the Eastern enlargements of the European Union (EU) in 2004 and 2007, national labour markets have been fully or partially opened to citizens of all EU Member States. The lack of employment opportunities and disproportions between labour wages in the new Member States further encouraged migration. As a result, the influx of Eastern migrants to the Western Member States acquired an unprecedented dimension, forcing the EU-1535 to implement a transitional period of up to seven years for migrants from Eastern Member States36. Throughout the last decade, immigration quotas were lifted and Eastern Europeans were given the right to move freely inside the EU37. Labour migration, however, is a field in which the Member States are yet to develop more comprehensive and harmonised policies, and it was only over the last few years that the EU adopted several directives aimed at ensuring that immigrants receive the same social benefits as the nationals of their country of choice.38 Notwithstanding, in April 2013, the Austrian, British, Dutch and German governments called for the implementation of stricter measures designed to restrict immigrants’ ability to claim benefits when moving in from another Member State39. 35 The EU-15 refers to the EU in its configuration when the Member States were Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom. 36 From ‘Frequently asked questions: The end of transitional arrangements for the free movement of workers on 30 April 2011’, European Commission – MEMO/11/259, Brussels, Belgium, April 28th, 2011. For the full text of the memo, please see here. 37 To read more about this issue, see ‘UK To Lift Quota Restrictions On Bulgarian Romanian Immigrants’, UNGAR A. in Israel National News, November 13th, 2012, here, and ‘Romanian And Bulgarian Immigration: What Does It Mean For Britain?’, Press Association for Huffington Post, January 1st 2014 (last update on January 23rd, 2014), here. 38 To read more about this issue, see ‘Welfare for Immigrants: EU Wants Fortress Germany to Open Up’ in Spiegel Online, January 14th, 2014, here. 39 See a letter addressed to Alan Shatter, President of the European Council for Justice and Home Affairs, here.

While this is contrary to the basic principles of the European internal market40, it is commonly understood that the existence of higher standards of living and more developed welfare systems in several Western countries have caused these governments to feel targeted by so-called ‘benefit tourists’ – people who move to EU-15 countries to take advantage of social benefits instead of working. Still, studies carried out by University College London have shown that immigrants coming from EU-8 countries41 to the United Kingdom are mostly younger, more educated and more likely to be employed than their national counterparts42. Then again, one should be cautious when extrapolating results that are country-specific and applying them to different social and labour market realities. In other words, it is not unlikely that many of the concerns spreading through Western Member States may in fact be ill-founded. Clearly, better and more accurate research is needed before further, more decisive legislation can be developed and implemented on an EU-wide level. Ultimately, this issue remains a pressing one because, the decisions we make as a Union, whichever they end up being, will have a major impact on the lives of millions of people, with effects ranging from their career options to their ability to retire comfortably.

2. WHAT IS THE PROBLEM? The Treaty on the Functioning of the European Union (TFEU)43 and the Schengen Agreement44 secure the mobility of labourers within the Member States, abolishing discrimination based on nationality. Yet, the recent initiative to reintroduce restrictions to the number of foreigners allowed to live and work in Switzerland45, statements by the British Prime Minister46 purporting to cut the influx of immigrants in the United Kingdom, and, even more recently (on March 27th, 2014), a proposal by the German government47 aimed at making it possible for the state to repatriate jobless immigrants, regardless of whether or not they are EU citizens all constitute reasons for alarm. That is especially the case as all of these measures, if fully imple40 The internal market seeks to guarantee the free movement of goods, capital, services and people within the EU. 41 The countries that joined to the EU with the 2004 and 2007 Eastern Enlargements, namely: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia. Malta and Cyprus have also become a part of the EU with these enlargements but no restrictions were applied to Maltese or Cypriot citizens. 42 To read further, see ‘Recent immigration to the UK: New evidence of the fiscal costs and benefits’ in UCL News, University College London, London, United Kingdom, November 5th, 2013, here. 43 According to Art. 45, TFEU, p. 60. For the full text of the treaty, see here. 44 To learn more about the Schengen Area and the Schengen Agreement, see the corresponding page in the website of the European Commission’s Directorate-General for Home Affairs, here. 45 To read more about the federal popular initiative “Against mass migration” in Switzerland, see ‘Swiss vote to set limits on immigration from EU’, BAGHDJIAN A. and SCHMIEDER A. for Reuters US Edition, Zurich, Switzerland, February 9th, 2014, here. 46 To read further, see ‘Cameron seeks limits on EU judicial powers and migration’, MACLELLAN K. for Reuters UK Edition, London, March 16th, 2014, here. 47 To read more about the proposal, see ‘Germany moves to expel jobless immigrants from other EU countries’ in RT News, March 27th, 2014, here. 23

mented, could seriously damage the dynamics of the internal market. Moreover, since the 2008 financial crisis, a growing number of extreme-right nationalist parties48 have gained ground all throughout Europe. Resorting to anti-immigration and Eurosceptic campaigns, these parties have been able to increase their bases within the electorate, currently leading opinion polls in as many as eight Member States49. Just two months ago, the European Commissioner for Home Affairs, Cecilia Malmström, publicly expressed concern about extreme-right parties being the greatest threat to unity in the EU50. One of the main difficulties lies in the integration of immigrants in society. In France, Germany and the United Kingdom, all of which have higher numbers of immigrants than any other EU-28 Member State, the existence of immigrant ghettos and their non-integrating attitude have fuelled the rise of prejudice. This not only carries societal effects, but it also causes damage to the labour market, as immigrants often struggle to find employment. Furthermore, sensationalistic news agencies tend to portray immigrants as employment-stealing, thus greatly contributing to spreading undue feelings of xenophobia. These problems are worsened by the lack of adequate support systems and the haphazard implementation of short-sighted policies. Being conscious of the growing countermovement and increasing unemployment rates in its Member States, the EU is on the verge of having to decide how to go on from here. One of its main challenges will be that of overcoming the current fragilities found in Directive 2004/38/ EC51. Ultimately, this is a conflict between more and less prosperous Member States, which can have dangerous spill-overs and further affect our common identity as Europeans. As far as making decisions goes, this is a classic case of deciding how much power can and should be transferred to the EU and which competences should remain exclusive to the Member States.

• The unemployment rates in the EU Member States indicate the labour market disadvantages for migrants. According to the Eurostat (2011), in the EU-27, the unemployment rate of people aged 20–64 and holding foreign citizenship stood at 16%, while overall unemployment stood at 9%. • In 2012, 6.5 million people (corresponding to 43.4% of employed foreigners) in the EU27, represented citizens of other EU Member States.

3. WHAT DO THE NUMBERS SAY? • In 2011, about 3 million people migrated into or within the EU, of which: i) 1.7 million were non-EU citizens, ii) 1.3 million already resided in another EU Member State (mostly in Eastern or Southern Europe). • In 2011, Germany, Italy, Spain and the United Kingdom put together accounted for 60.3% of all immigrants within the EU-27. • In 2013, 535,000 people immigrated to the United Kingdom (similar to previous years).

• In the Bulgaria, the Czech Republic, Estonia, Greece, Ireland, Latvia, Lithuania, Poland, Romania and Spain, emigrants outnumbered immigrants. 48 In common usage, this refers to political parties that are fascist-leaning and/or deeply conservative. 49 Namely, Cyprus, the Czech Republic, France, Greece, Hungary, Italy, Portugal the United Kingdom, according to ‘Could Euroscepticism And Rise Of Anti-EU Parties Undermine European Demoracy?’, WARD C. in Huffington Post UK, January 17th, 2014 (last update on January 25th, 2014). For the full text of the article, see here. 50 To read more about this issue, see ‘Extreme right ‘biggest threat to EU’: Malmström’ in The Local, January 14th, 2014, here. 51 The full text of the directive may be found below, in the links’ section (see ‘8. What to read?’). 24

4. WHO IS WHO? See Fig. 3

5. WHAT HAS ALREADY BEEN DONE? • The European Social Fund (ESF)52 and the European Cohesion Fund (ECF)53: founded in 1957 and 2000, respectively, these funding instruments of the EU focus on removing disparities amongst the regions, accounting for almost 10% of the EU budget. The ESF aims to create better job opportunities and social integration for European citizens. It prioritises people with disadvantages, such as immigrants and disabled people. • Directive 98/49/EC54: Adopted in 1998 by the Council of the European Union in order to safeguard supplementary pension rights of immigrants moving within EU Member States.

• Vocational Education and Training (VET)55 initiative of the Directorate General for Education and Culture: Implemented in 2002 with the Copenhagen Declaration56, VET plays a key role in ensuring the opening of the European labour market to all EU citizens. Other than aiming at improving the framework of actions for lifelong development of competences and qualifications, it focuses on the facilitation of workers’ and learners’ mobility within the Member States.

• The Schengen Agreement57, the Treaty on the Functioning of the European Union (TFEU) and Directive 2004/38/EC58: All three contain provisions aimed at safeguarding (labour) mobility in the EU. • Austria, Estonia, Hungary, Italy, Portugal, Slovenia and the United Kingdom apply quotas or limits as measures to manage labour migration from third countries.

• Directive 2000/78/EC: Implemented in November 2000, the directive guarantees that any EU citizen has the same right to work in another EU country as the nationals of that country59 60.

Fig. 3

52 To learn more about the European Social Fund, please see its corresponding page in the website of the European Commission, here. 53 To learn more about the European Cohesion Fund, please see its corresponding page in the website of the European Commission, here. 54 The full text of the directive may be found here. 55 To learn more about the VET initiative, please see its corresponding page in the website of the European Commission, here. 56 Launched in 2002, the Copenhagen process aims to improve the performance, quality and attractiveness of VET through enhanced cooperation at the European level. The process is based on mutually agreed priorities that are reviewed periodically. To read further, please see the text of the declaration, here. 57 To learn more about the Schengen Area and cooperation process, please see relevant summaries of EU legislation, here. 58 The full text of the directive may be found here. 59 To read more about the principle of equal treatment afforded to all EU citizens, please see its corresponding section in the website of the European Commission, here. 60 From a legal perspective, you may also find more information in the corresponding section of Europa – Summaries of EU legislation, here. 25

6. WHAT NOW? Taking into account the increase in anti-immigrant sentiments and how the accusation of migrants as employment-stealing and burdensome on national welfare systems has become commonplace in various EU Member States: • What measures can the EU take to eradicate xenophobia and rehabilitate the image of migrants?

• How can the EU and the Member States act together to ensure that neither immigrants are permitted to simply ‘freeload’ on a host country’s welfare system, nor countries are allowed to simply deny basic pension levels to working or unemployed migrants? Further taking into account that Europe is fast approaching a demographic crisis which could have devastating consequences to our ability to provide citizens with social security and welfare: • How can the EU and the Member States act together to counter negative demographic tendencies, namely through the implementation of a better coordinated migration policy? • How can the EU and the Member States ensure that the mismatch of needed and provided skills across the different regions is addressed in a manner that is sustainable and consistent with the overall goals of lifelong development of competences and qualifications?

• How can the EU and the Member States work together to implement a fully harmonised set of labour migration rules that allows the citizens of any Member State to work and retire anywhere in the Union with the freedom, comfort and dignity inherent in the principles of the internal market? • How can the EU and the Member States reach an agreement on the labour immigration of non-EU citizens that is feasible and advantageous for all?

Considering the importance for societies to remain competitive in the global economy, yet keeping in mind the EU’s overall goal to pave the way for a ‘European Industrial Renaissance’: • How can the EU and the Member States ensure that the necessary numbers of workers will be available to help achieve greater production levels in the coming years?

• Furthermore, how can the EU and the Member States ensure that this so-called renaissance does not result in further imbalances amongst the regions?

7. WHAT TO GOOGLE? EU internal market (‘four freedoms’); Schengen Agreement (and Schengen Area); labour mobility; migration amongst EU Member States (intra-EU migration); immigration into the EU (third-country immigrants); demographic challenges in the EU; production crisis in the EU; xenophobia (anti-immigration feelings) in the EU; pension ‘portability’ within the EU; working and retiring in the EU; European labour migration policy.

8. WHAT TO READ? In addition to the links provided in the footnotes, please see: How free is free movement? Dynamics and drivers of mobility within the European Union, BENTON M. and PETROVIC M., Migration Policy Institute Europe, Brussels, Belgium, March 2013 http://www.migrationpolicy.org/research/how-free-free-movement-dynamics-and-drivers-mobility-within-european-union

‘Free Movement in Europe: Past and Present’, KOIKKALAINEN S. in Migration Policy Institute, April 21st, 2011 http://www.migrationpolicy.org/article/free-movement-europe-past-and-present/

‘The Rise of Europe’s Anti-Immigration Parties’, NISBET R. in Sky News, October 14th, 2013 – see the interactive image http://news.sky.com/story/1153190/the-rise-of-europes-anti-immigration-parties

European Commission | Eurostat – Migration and migrant population statistics

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Migration_and_migrant_population_statistics

‘The Benefit of Migration: new evidence of the fiscal costs and benefits of migration to the UK from Central and Eastern Europe’, ed. WEST D., University College London, Centre for Research and Analysis of Migration), London, United Kingdom, July 22nd, 2009 http://www.cream-migration.org/files/Press_release_A8fiscalimpact.pdf

‘The EU needs more labour migration’ in EurActiv, September 8th, 2011

http://www.euractiv.com/innovation-enterprise/eu-needs-labour-migration-analysis-507489

‘Intra-EU mobility: the ‘second building block’ of the EU labour migration policy’, PASCOUAU Y. in Issue Paper No. 74, European Policy Centre, Brussels, Belgium, May 2003 http://www.epc.eu/documents/uploads/pub_3500_intra-eu_mobility.pdf

‘Intra-EU labour migration after Eastern enlargement and during the crisis’, GALGÓCZI B. and LESCHKE J. in Working Paper 2012.13, European Trade Union Institute, Brussels, Belgium, December 21st, 2012 http://www.etui.org/Publications2/Working-Papers/Intra-EU-labour-migration-after-Eastern-enlargement-and-during-the-crisis

EMPL

ENVI

Committee on Environment, Public Health and Food Safety “Climate action is central for the future of our planet, while a truly European energy policy is key for our competitiveness. Today’s package proves that tackling the two issues simultaneously is not contradictory, but mutually reinforcing. It is in the EU’s interest to build a job-rich economy that is less dependent on imported energy through increased efficiency and greater reliance on domestically produced clean energy. An ambitious 40% greenhouse reduction target for 2030 is the most cost-effective milestone in our path towards a low-carbon economy. And the renewables target of at least 27% is an important signal: to give stability to investors, boost green jobs and support our security of supply.”

–José Manuel Durão Barroso, President of the European Commission, in 2030 climate and energy goals for a competitive, secure and low-carbon EU economy, European Commission IP/15/54, Brussels, Belgium, January 22nd, 2014

vs. “This result is not satisfactory. We are promising ourselves, Europeans and the European industry, that this new climate policy will be realistic, flexible and cost-efficient. These are very good assumptions. However, if we double the reduction target after 2020, it is not realistic. It is a road to reduce the competitiveness of European industry. (…) Adopting these objectives before the 2015 Paris talks is a mistake. We should not show all our cards today, before our partners say what they mean. Binding objectives on renewables and energy efficiency are not a flexible arrangement. We know well that Member States and individual sectors have different capacities.”

–Konrad Szymański, member of the European Conservatives and Reformists Group and co-rapporteur of the Committee on Industry, Research and Energy, during a European Parliament Plenary Session, Strasbourg, France, February 5th, 2014

chaired by Ms Mónica Leal (PT)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. environmental policy and environmental protection measures, in particular concerning:

a) air, soil and water pollution, waste management and recycling, dangerous substances and preparations, noise levels, climate change, protection of biodiversity, b) sustainable development,

c) international and regional measures and agreements aimed at protecting the environment, d) restoration of environmental damage, e) civil protection,

f) the European Environment Agency, g) the European Chemicals Agency;

2. public health, in particular:

a) programmes and specific actions in the field of public health, b) pharmaceutical and cosmetic products, c) health aspects of bioterrorism,

d) the European Medicines Agency and the European Centre for Disease Prevention and Control;

3. food safety issues, in particular:

a) the labelling and safety of foodstuffs,

b) veterinary legislation concerning protection against risks to human health; public health checks on foodstuffs and food production systems, c) the European Food Safety Authority and the European Food and Veterinary Office.

1. WHY DOES THIS MATTER? “Earth provides enough to satisfy every man’s need, but not every man’s greed.” – Mohandas K. Gandhi (1869–1948), Lawyer, leader of the Indian independence movement When talking about welfare, a series of issues bear major importance and influence in everyone’s lives: from quality food to the air we breathe, the requirements to our wellbeing are numerous. Yet, it is human nature that the more we have, the more we want. While, on the one hand, we can find many people fighting for something that belongs to everybody – the environment –, on the other hand, we can see human ambition reflected on industries’ production and goals. The key facts on this subject are as interesting as they are contradictory. It is easily acknowledged that societies need to take care of their economic and industrial interests and that, without them, it would certainly be more difficult to thrive in society. Likewise, social problems such as unemployment would increase drastically. Industries, whether or not posing threats to the environment, are vital; welfare is not just about money or materialism, it is also about living a healthy life in a sustainable environment. Nevertheless, we cannot have this if we face pollution affecting our land, the air, the seas and their fauna and flora. More often than not, it seems as if, in our pursuit of greater industrial productivity and better lifestyle, we have made ourselves incompatible with the preservation of our environment.

2. WHAT IS THE PROBLEM? Air pollution has been a problem in Europe since the 18th century, when the Industrial Revolution and the use of carbon-based forms of energy drastically changed the way we produce. Its effects, however, were not as obvious and impactful then as they are nowadays, and, to a degree, even the concept of environmental protection was unfamiliar to our ancestors. Meanwhile, the European Union (EU) and the governments of its Member States started paying closer attention to the consequences of climate change, applying stricter rules and regulations from as early as 197361. Since then, the problem lies mainly in reaching an agreement between industries’ and societies’ main interests. More recently, demanding targets have been set for 2020 by the European Commission in its ‘EU climate and energy package’. The ‘20-20-20’ targets set three main goals: i) a 20% reduction in EU greenhouse gas emissions from 1990 levels; ii) raising the share of EU energy consumption produced from renewable resources to 20%; iii) a 20% improvement in the EU’s energy efficiency. 61 Following the Paris Summit in October 1972, the heads of state and government of the European Economic Community issued a joint declaration, which, amongst other things, requested the European Commission to draw up an action programme for environmental protection. This lead to the adoption, in July 1973, of the (first) Environmental Action Programme of the EU and, eventually, to the formation of the European Commission’s Directorate-General for the Environment. By 1974, environmental groups from all the Member States had established central representations in Brussels, having been joined by many other non-governmental organisations (NGOs) since the late 1980s. 28

With six years left for these goals to be reached, the European Commission has, in January 2014, already put forward new targets for 2030, namely raising the reduction of EU greenhouse gas emissions from 1990 levels to 40% and its share of energy consumption produced from renewable resources to at least 27%. The overall improvement in terms of energy is currently being discussed and any potential amendments to the Energy Efficiency Directive62 will be considered once the directive has been fully reviewed to take into account the Member States’ national energy plans, toward the end of the year. In practice, while there are demanding goals for 2020 which remain unaccomplished, we already have new and even more demanding targets for 2030 to take into account. These, however, are not without controversy. On the one hand, several Members of the European Parliament63, the Committee of the Regions64 and many NGOs65 have voiced concerns that the European Commission has not aimed high enough in its proposal and argue that we should strive to set even more demanding, legally binding goals. On the other hand, industry representatives, some Member States66 and even the odd European Commissioner67 believe the targets are unrealistically ambitious, ignoring of the EU’s limited responsibility for (and, thereby, ability to effectively leverage any visible changes in) worldwide pollution68 and will have a negative impact on the so-called European Industrial Renaissance69. Clearly, the problem has not changed and finding a balance amongst social, economic and environmental goals that will afford us all three for the coming decades70 is still very much a challenge.

3. WHAT DO THE NUMBERS SAY? A great number of measures have already been implemented in order to solve – or at least mitigate – the damages inflicted to our environment, and some positive results can already be 62 Directive 2012/27/EU, commonly referred to as the ‘Energy Efficiency Directive’, was adopted by the EP and the Council on October 25th, 2012 to amend former Directives with relevance for the energy policy of the Union (namely, Directives 2009/125/EC and 2010/30/EU) and to repeal Directives 2004/8/ EC and 2006/32/EC. For the full text of the Directive, please see here. 63 To read more about the overall position of several MEPs, see the press release of the Energy/ Environment plenary session of February 2nd, 2014, here. 64 To read further, see ‘Europe’s Municipal Leaders Criticise Commission’s Weak Climate Targets’ in Sustainable Cities Collective, January 23rd, 2014, here. 65 For a good overview of the matter at hand and a collection of comments and quotes from relevant figures and NGOs, please see ‘Round-up: EU told to strengthen 2030 package amidst wave of criticism’, The Tree, January 22nd, 2014, here. 66 For a comprehensive overview of the positions of various stakeholders, please see ‘Parliament, Commission set for clash over 2030 clean energy goals’, EurActiv, January 10th, 2014, here. 67 Günther Oettinger, Commissioner for Energy, has been quoted calling the new climate targets “stupid”. To read the full article, please see here. 68 To read further, see ‘EU study predicts clean energy, climate failure 2050’, EurActiv, January 8th, 2014, here. 69 The expression ‘European Industrial Renaissance’ comes from the title of a January 22nd Communication from the European Commission. For the full text of the communication, please see here. 70 This is the case when bearing in mind not only the goals of the Europe 2020 agenda, but especially the framework of the Roadmap for moving to a competitive low carbon economy in 2050. To read further, please find the texts of the communications here and here, respectively.

observed. For instance, between 1990 and 2012, the gross domestic product (GDP) of the EU28 grew by 45%, while emissions actually decreased by 18.3%. What this tell us is that an efficient and competitive economy is compatible with the reduction of air pollution. In other words, it is possible to grow ‘green’. As per the ‘20-20-20’ goals, we seem well poised to achieve a reduction of 20% of emissions by 2020. Yet, the road to reaching a 40% reduction in 2030 – let alone 95% by 2050 – is a long and winding one. Concerning the energy that lights our houses and powers our industries, we already know, according to Eurostat, that between 1990 and 2012, the share of renewable energy in gross final energy consumption was of 14.1%. This tells us that, although we have reached satisfactory results by 2012, we are still far from achieving a 20% reduction and much more has to be done if we expect to meet the 40% goal for 2030. Regarding energy efficiency and the relation between our GDP and energy consumption, the European Environment Agency estimates that we are 26% more efficient than in 1990. Again, while these are encouraging numbers, additional efforts will have to be made if we want to reach the goal for 2030. Ultimately, despite a relatively positive outlook (which various institutions tend to overblow or play to their advantage), the truth is we are not even halfway through with implementing the environmental changes we need to protect our world.

4. WHO IS WHO? See Fig. 4

5. WHAT HAS ALREADY BEEN DONE? The amount of EU environmental regulation has grown steadily since the 1960s, even before being brought together in the first Environmental Action Programme. At the moment, approximately 250 legal acts are known to make up the environmental section of the acquis communautaire, making this one of the most burdensome areas of legislation within the EU. In recent years, many of these measures have been implemented and experimented with, not all of which successfully. In addition to the 2020 package, the 2030 framework and the 2050 roadmap, the following are some of the most relevant measures taken by the EU to combat climate change and promote greater resource efficiency, while aiming to ensure the steadiness of European industries:

Fig. 4

• The EU Emissions Trading System (EU ETS)71, covering more than 11,000 power stations and industrial plants in 31 countries (all 28 Member States plus the three EAA-EFTA states72), as well as airlines (amounting to nearly 45% of total greenhouse gas emissions within the EU). As per the 2030 framework for climate and energy policy (in its current format), the cap (i.e. the limit) will need to be lowered by 2.2% per year from 2021, against the present 1.74%. 71 To read more about the EU ETS, please refer to its corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 72 The EEA is the European Economic Area. The EFTA is the European Free Trade Association. The countries in question are Iceland, Liechtenstein and Norway. 29

• The Effort Sharing Decision73, which establishes binding annual greenhouse gas emission targets for the Member States for the period between 2013 and 2020 relating to most sectors not included in the EU ETS. Until 2020, the wealthiest Member States will observe reductions of up to 20%, while the least wealthy will be allowed increases up to 20%.

• National renewable energy targets74, which, under the Renewable Energy Directive75, mandated the Member States to take on binding targets for raising the share of renewable energy in their consumption mix by 2020. In late 2013, the European Commission proposed a new Directive76 that would amend it and the Fuel Quality Directive77, bringing them in line with the latest targets.

• A legal framework for the environmentally safe geological storage of carbon dioxide78, the so-called CCS Directive79, covering all CO2 storage in geological formations in the EU and laying down requirements covering the entire lifetime of a storage site. Since its implementation, in mid-2011, the European Commission has closely monitored and attempted to improve its development and application in the Member States, namely by publishing, in March 2013, a Consultative Communication next to all stakeholders, whose results have then been include in the 2030 framework. • The European Energy Programme for Recovery (EEPR)80, a €4bn programme set up in 2009 to co-finance gas and electricity infrastructure projects, offshore wind farms and carbon capture and storage facilities. So far, 59 projects have been financed and a report on its implementation has been published in late 2013.

• By 2010, ten years ahead of its obligations as per the Montreal Protocol81, the EU had reduced its consumption of the main ozone-depleting substances to zero, included in areas extending beyond those considered as ‘consumption’ within the protocol.

73 To read more about the Effort Sharing Decision, please refer to its corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 74 To read more about the national renewable energy targets, please refer to its corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 75 For the full text of the Directive, please see here. 76 For the full text of the proposal, please see here. 77 For the full text of the Directive, please see here. 78 Cf. the European Commission’s Directorate-General for Climate Action, here, “carbon capture and geological storage (CCS) is a technique for trapping carbon dioxide as it is emitted from large point sources, compressing it, and transporting it to a suitable storage site where it is injected into the ground. The technology of carbon capture and storage has significant potential as a mitigation technique for climate change, both within Europe and internationally, particularly in those countries with large reserves of fossil fuels and a fast-increasing energy demand. In the EU the CO2 emissions avoided through CCS in 2030 could account for some 15% of the reductions required.” To read more about CCS in the EU, please refer to its corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 79 For the full text of the Directive, please see here. 80 To read more about the EEPR, please refer to its corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 81 The Montreal Protocol on Substances that Deplete de Ozone Layer is a protocol to the Vienna Convention for the Protection of the Ozone Layer, an international treaty (ratified by all members of the United Nations) aimed at protecting the ozone layer. 30

• The Roadmap to a Single European Transport Area82, a 2011 white paper, is the European Commission’s vision for a competitive and sustainable transport system. Through it, the Commission has adopted a series of concrete initiatives for the period leading up to 2020, with the main goals of build a competitive transport system that will increase mobility, remove major barriers in key areas and fuel growth and employment. At the same time, the proposals are meant to dramatically reduce Europe’s dependence on imported oil and cut carbon emissions in transport by 60% by 2050, namely by: i) disallowing conventionally-fuelled cars in cities; ii) reaching a 40% use of sustainable low carbon fuels in aviation and a cut of at least 40% in shipping emissions; iii) operating a 50% shift of medium-distance intercity passenger and freight journeys from road to rail and waterborne transports

• The restriction on the use of fluorinated greenhouse gases (F-gases), including hydrofluorocarbons (HFCs)83, has been achieved through the adoption of the MAC Directive84 and of the F-gas Regulation85. The latter was revised and agreed upon by the European Parliament in March 201486.

6. WHAT NOW? As can be seen from all the above, decisions of an environmental nature affect governments, industries, societies and, ultimately, the daily lives of all EU citizens. With that in mind: • How can the EU ensure quicker and greater advancements in the field of environmental protection? • Are the governments of all Member States doing their fair share to contribute to the overall EU efforts toward combating climate change and achieving greater energy efficiency? • How much can be asked of European industries?

• What about the individual citizens – how liable are they for their ecological footprint and how best can the EU ensure greater commitment and participation levels? • Ultimately, are the goals of the ‘climate and energy package 2020’ and of the ‘2030 framework for climate and energy policies’ realistic or should they be redrawn? If so, how?

It will be the task of the Committee on Environment, Public Health and Food Safety to decide how to proceed, taking into account all the measures already in place (and their implicit frameworks and limits) and never losing sight of the needs of all parties involved: societies and their citizens, European industries and their role in shaping our common economic recovery and the need to protect the environment.

82 For the full text of the white paper, please see here. 83 To read more about these, please refer to their corresponding page within the website of the European Commission’s Directorate-General for Climate Action, here. 84 For the full text of the Directive as adopted by the various institutions, please see here. 85 For the full text of the Directive, please see here. 86 For the draft text of the future Regulation as adopted by the European Parliament, please see here.

7. WHAT TO GOOGLE? Global warming; climate change; carbon-based energies; EU Emissions Trading System; energy efficiency; greenhouse gas emissions; energy sustainability; Kyoto protocol; renewable energies; clean energies; pollution levels; ecological footprint; European Environment Agency (EEA); European Federation of Agencies and Regions for Energy and the Environment (FEDARENE).

8. WHAT TO READ? European Commission | Europe 2020 strategy – A resource-efficient Europe http://ec.europa.eu/resource-efficient-europe/index_en.htm

‘Europe 2020 targets: climate change and energy’ in European Semester 2012 Thematic Fiche, European Commission, November 5th, 2013 http://ec.europa.eu/europe2020/pdf/themes/16_energy_and_ghg_targets.pdf

‘Europe 2020 targets: resource efficiency’, PETROVA R., European Commission, Directorate-General for the Environment, May 28th, 2013 http://ec.europa.eu/europe2020/pdf/themes/17_resource_efficiency.pdf

‘Europe 2020 targets: energy networks’ in European Semester 2012 Thematic Fiche, European Commission, November 5th, 2013 http://ec.europa.eu/europe2020/pdf/themes/13_energy_networks.pdf

European Commission | Europe 2020 – Country-specific Recommendations 2013 http://ec.europa.eu/europe2020/making-it-happen/country-specific-recommendations/index_en.htm

Europa | Summaries of EU legislation – Tackling climate change

http://europa.eu/legislation_summaries/environment/tackling_climate_change/index_en.htm

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and to the Committee of the Regions – Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth, COM(2014) 130 final 2, Brussels, Belgium, March 19th, 2014 http://ec.europa.eu/europe2020/pdf/europe2020stocktaking_en.pdf

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and to the Committee of the Regions – A policy framework for climate and energy in the period from 2020 to 2030, COM(2014) 15 final, Brussels, Belgium, January 22nd , 2014 http://ec.europa.eu/energy/doc/2030/com_2014_15_en.pdf

EU Energy, Transport and GHG Emissions – Trends to 2050 – Reference Scenario 2013, European Commission, Luxembourg, Luxembourg, 2014 http://ec.europa.eu/energy/observatory/trends_2030/doc/trends_to_2050_update_2013.pdf

Eurostat | Environment – Greenhouse gas emissions, base year 1990 (to 2011) http://epp.eurostat.ec.europa.eu/tgm/table. do?tab=table&init=1&plugin=0&language=en&pcode=t2020_30&tableSelection=1

Eurostat | Environment – Greenhouse gas emissions in non-ETS sectors (to 2012) http://epp.eurostat.ec.europa.eu/tgm/table. do?tab=table&init=1&plugin=1&language=en&pcode=t2020_35&tableSelection=1

Eurostat | Environment – Share of renewable energy in gross final energy consumption (to 2012) http://epp.eurostat.ec.europa.eu/tgm/table. do?tab=table&init=1&plugin=1&language=en&pcode=t2020_31&tableSelection=1

Eurostat | Environment –Primary energy consumption (to 2012)

http://epp.eurostat.ec.europa.eu/tgm/table. do?tab=table&init=1&plugin=1&language=en&pcode=t2020_33&tableSelection=1

Eurostat | Environment – Final energy consumption (to 2012)

http://epp.eurostat.ec.europa.eu/tgm/table. do?tab=table&init=1&plugin=1&language=en&pcode=t2020_34&tableSelection=1

‘EU climate policy – too early to celebrate’, HENNINGSEN J. in EUObserver, January 23rd, 2014 http://euobserver.com/opinion/122842

‘Fossil fuel investments creating dangerous ‘carbon bubble’ in finance industry’, O’FERRALL R. in EurActiv, March 5th, 2014 http://pr.euractiv.com/pr/fossil-fuel-investments-creating-dangerous-carbon-bubble-finance-industry-104703

‘The EU needs to leverage its energy efficiency expertise to compete globally, says Climate-KIC CEO’, HOWARTH A. in EurActiv, March 19th, 2014 http://pr.euractiv.com/pr/eu-needs-leverage-its-energy-efficiency-expertise-compete-globally-says-climate-kicceo-105175

‘Hot Planet Documentary (BBC)’, DUNN R. http://www.youtube.com/watch?v=5EonHzPQ_-8

ENVI 31

IMCO

Committee on Internal Market and Consumer Protection

chaired by Ms Victoria Savvidou (GR)

“Cryptocurrencies were created by and for people who have simply had enough. They’ve seen the way the world is going and rather than grumble or pretend it’s not happening, they’ve decided instead to make a new one, in their own liberty-loving image. It’s a world where, by and large, Big Brother has no place — which is why, for example, it’s so popular on the black market. But you don’t need to be a crim [sic] to see why cryptocurrencies make sense. Have you noticed how increasingly difficult it is, for example, to conduct the most basic transactions from your bank account? You want to pay for some item, perhaps by bank transfer, and the security’s so tight (thanks to onion layers of EU regulation, probably) you sometimes find yourself being shut out of your own account. Well, with bitcoin you’re your own bank: you transfer your money electronically from your wallet to the payee’s wallet, and that’s it.” –‘Those bitcoin weirdos might just be right’, James Delingpole in The Spectator, January 4th, 2014

vs. “To completely dispel the myth that anonymous financial transactions are a tool of the little guy, our rigorous economic research – led by a former senior IMF economist – conclusively demonstrates that unrecorded financial transactions significantly exacerbate income inequality: making the rich richer and the poor poorer. They are a tool of both political and economic oppression, with serious socioeconomic consequences. The thing about financial opacity is that it is impossible to limit its criminal uses. If you can use an untraceable payment system to buy small amounts of LSD from Silk Road, someone else can use it to buy a sex slave or move a $10million kickback to an offshore bank account. And they will use it because they have hundreds of billions of dollars to move, and – under the status quo – they sometimes get caught (although not often enough).”

–‘Why Bitcoin (and other cryptocurrencies) will inevitably become tools of the rich, powerful, and criminal’, E. J. Fagan, Deputy Communications Director at Global Financial Integrity, in Business Insider, December 13th, 2013

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. Coordination at Community level of national legislation in the sphere of the internal market and for the customs union, in particular: a) the free movement of goods, including the harmonisation of technical standards, b) the right of establishment,

c) the freedom to provide services, except in the financial and postal services;

2. measures aiming at the identification and removal of potential obstacles to the functioning of the internal market;

3. the promotion and protection of the economic interests of consumers, except for public health and food safety issues, in the context of the establishment of the internal market. 32

1. WHY DOES THIS MATTER? “Money is a collective agreement. If enough people come to the same agreement, what they agree upon becomes secondary, whether it be farm animals, gold, diamonds, paper, or simply a code. History proves all these cases to be true. Who knows what the future is going [to] suggest to us as money, once we see digital currencies as ordinary?” –S.E. SEVER, writer

It was no more than a decade ago, when the word ‘cryptocurrency’ would only be found in science fiction novels and films. Why is it that, nowadays, economists and sociologists ring the bell for their benefits and their disadvantages, making it a matter of discussion? To understand why it matters, we first need to clarify why it happened, starting with a brief examination of its roots: money. Since 2,200 BC, when human societies realised the need to resort to payments using the form of money, this thing that “makes the world go ‘round” has assumed various forms and, currently, our present economies are based on fiat money87. Still, since money is an institution subject to society’s changes and evolutions, it has the tendency to change and adapt to the needs of times. It was with some of those needs in mind that an individual (or a group of individuals) under the name Satoshi Nakamoto introduced, in 2009, ‘bitcoin’ – the first form of cryptocurrency88 – and, with it, turned the financial world upside down by simply breaking the laws of fiat money and introducing a new way of exchanging. This digital89 and virtual form of currency was used as an alternative to fiat money; yet, it was so different from it. It was, for instance, the first “computationally defined mathematical currency, created to function as money”90. In brief, Internet users can resort to a decentralised system for the verification of their transactions and the electronic purchase of products and services. 87 Cf. Investopedia, here, fiat money is a “currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith. Fiat is the Latin word for ‘it shall be’.” 88 The main differences between cryptocurrencies and other virtual currencies or fiat money are that: i) they are not backed by any banks or institutions; ii) they do not represent any states, or unions of states, or any political entities, and no governments have ever ratified their existence; iii) their value is not determined by a state’s monetary policy, but by a number of internet users; iv) most cryptocurrency systems establish different limits to the amount of coins that can be produced within a certain period (e.g., there will never be more than 21 million bitcoins in existence); v) they do not have a set value; in fact, their values are so volatile that their exchange rates fluctuate on a daily basis. For your better comprehension of the whole topic, you are advised to learn more about how cryptocurrencies work, namely by referring to the bibliography suggested at the end of this Overview. 89 Cf. Investopedia, here, digital money is “any means of payment that exists purely in electronic form. Digital money is not tangible like a [banknote] or a coin. It is accounted for and transferred using computers. Digital money is exchanged using technologies such as smartphones, credit cards and the Internet. It can be turned into physical money by, for example, withdrawing cash at an ATM.” 90 To keep reading about this, please refer to ‘Bitcoin, namecoin, dogecoin, peercoin, litecoin: What is a cryptocurrency anyway?’, O’ROURKE P. in Canada.com, February 6th, 2014, here.

Additionally, everything is done anonymously and independently from any banking institution. Bitcoin was the first; as of April 2nd, 2014, over 350 cryptocurrencies are known to exist. Thanks to them – or because of them –, the monetary world has already changed considerably, bringing about numerous advantages and consequences to consumers and societies alike.

2. WHAT IS THE PROBLEM? The reasons why bitcoin has become so popular and contributed to the birth of hundreds of new cryptocurrencies is, first and foremost, the fact that it has facilitated people’s lives. As no bank intervenes at any point, cryptocurrencies make transactions anonymous, quicker and easier than conventional currencies. At the same time, no transaction fee is charged. Taking bitcoin as an example, although every transaction is registered, the people behind these transactions remain anonymous, something completely impossible when using a credit card or ordering a transfer, be that physically or online. Furthermore, the role cryptocurrencies play in generating profits is noteworthy: people purchase and trade cryptocurrencies as they would do with stock options or bonds. Some cryptocurrencies can also be exchanged online, both for other cryptocurrencies and for fiat money. Therefore, people are turning a profit thanks to them, while still guaranteeing the security of their transactions. It is, however, important to mention that, since February 28th, 2014, nearly half a billion euros’ worth of bitcoins have gone missing due to a cyber-attack. Perhaps not too surprisingly, the greater the ease with which a currency is transacted, the greater the danger for consumers. In this regard, unlike fiat money, cryptocurrencies have neither central control of their value nor do they have an effective ‘futures market’91. Also, their supply is limited, whereas the supply of fiat money is not, as the government or union of governments that issue fiat money can alter the amount of supply at will. As the supply of most cryptocurrencies slowly increases, people are persuaded to mine92 them early. These facts result in instability, which leads to hyper-deflation93 as a consequence of the existence of more opportunities to ‘buy low and sell high’ than those made possible with fiat money. In addition, the anonymity previously presented as an advantage, becomes an undesired characteristic when fraudsters hide behind it to purchase illegal goods (such as drugs), to deal in human trafficking, illegal gambling, child pornography or any actions infringing on copyrighted materials (from films and music to the questions and answers of SAT94 examinations). Ac91 An auction market in which participants buy and sell commodity/future contracts for delivery on a specified future date. Trading is carried on through open yelling and hand signals in a trading pit. 92 ‘Mining’ refers to the act of using computers to solve mathematical equations that will generate units of cryptocurrencies. For a more complete definition, please refer to the bibliography suggested at the end of this Overview. 93 Cf. Investopedia, here, “hyper-deflation occurs when the general price level of goods or services in an economy falls drastically in a short period of time, causing the real value of a currency to actually increase in that time. This increase results in debts being more pronounced as the real value increases and the value of the currency falls.” 94 The SAT, short for Scholastic Assessment Test, is a standardised test for most college admissions in the US. 33

cording to a report of the Internet Watch Foundation (IWF)95, “last month [in February 2014], researchers uncovered the first case of bitcoins being used to pay to access a commercial child pornography site (which the IWF refers to as “child sexual abuse material”)”96. By contrast, fiat money has applicable anti-laundering and antiterrorism finance laws which are enforced by governments or unions of governments (e.g., the European Union – EU) and are monitored by national cybercrime police forces, the Europol or institutions such as the United States of America (US) Department of Treasury’s Office of the Comptroller of the Currency97. Plus, financial misconducts committed by monetary institutions or firms dealing in fiat money are much more easily investigated, which in turn means consumers are much more protected than with cryptocurrencies. As the vast majority of national banks do not hold any cryptocurrencies, withdrawal while lending to other customers is not even an option. What is more, no trustworthy institution, such as a government, can act as a lender of last resort98, which ultimately means that citizens defrauded through a transaction involving cryptocurrencies are left completely unprotected. Therefore, fractional-reserve banking99 with cryptocurrencies still fails, although some claim that it would be possible100.

3. WHAT DO THE NUMBERS SAY? • On January 3rd, 2009, Bitcoin was launched. By the end of 2013, more than 60 cryptocurrencies were available for trading. As of April 4th, 2014, more than 350 are known to exist.

• As mentioned above, bitcoin is a highly volatile currency: on November 16th, 2013, the total number of bitcoins in existence amounted to around €80 million; in early January 2014, the total amount of bitcoins in circulation (now slightly higher, due to continued – but slowed down – mining) was valued at no more than €10 million; on February 14th, 2014, once that

95 To read more about the IWF and its mission, please refer to the ‘About Us’ section in their website, here. 96 To keep reading about this, please refer to ‘Could a cryptocurrency like bitcoin help child pornographers evade police?’, BARTLETT J. in The Telegraph, March 3rd 2014. 97 To read more about the OCC and its mission, please refer to the ‘About the OCC’ section in their website, here. 98 Cf. BusinessDictionary, here, a lender of last resort is the “central bank of a country that has the authority and financial resources to act as the ultimate source of credit. In emergencies (such as a run on banks), it extends loans to solvent but illiquid depository institutions whose failure to obtain credit would have a destabilising effect on the national or regional economy. Central banks have their government’s backing to make such loans for retaining the public’s confidence in the country’s financial system. When central banks themselves get into difficulties, the IMF may act as a lender of last resort.” 99 Cf. Investopedia, here, fractional-reserve banking (also known as ‘fractional deposit lending’) is “a banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.” 100 To read one such opinion, please refer to ‘Of course you can have fractional reserve Bitcoin banks’, CARNEY J. for CNBC, September 20th, 2013, here. 34

number was again slightly higher, they totalled €40 million101.

• Most daily visits to bitcoin.org are made by users in the US (24.3% on March 20th, 2014), followed by India (9.3%) and Russia (6.4%). The United Kingdom (UK), who stands in fourth place (4.7%), Spain (2.9%) and France (2.2%) are the only EU countries in the top-ten list of locations of the site’s visitors102.

• The issue occupies more and more people daily: according to Wikipedia’s statistics on March 19th, 2014, “Bitcoin has been viewed 3,067,438 times in the last 90 days. This article ranked 35 in traffic on en.wikipedia.org.”103

4. WHO IS WHO? See Fig. 5

5.WHAT HAS ALREADY BEEN DONE? In the EU, the use of cryptocurrencies is not as popular as it is in the US. Yet, their popularity has been significantly increased over the last years. In Portugal, for instance, a bitcoin ATM104 will soon be placed in Matosinhos. In Cyprus, the University of Nicosia, the largest in the country, has been accepting tuition fees paid in bitcoins since late 2013105. Outside the EU, Russia is attempting to ban the use of bitcoins, whereas China is rumoured to have already banned it106. In California, the Lower House has unanimously passed a bill declaring bitcoin legal tender in the state107. Within the EU, the approach to the use and possible consequences of using cryptocurrencies has been mostly incoherent. In December 2013, the European Banking Authority (EBA) issued a warning108 explaining and drawing attention to the dangers and possible consequences of dealing in virtual currencies. Still, three months later, most Member States are yet to take a stance, while a few have applied – or will soon apply – their own sets of rules. In fact, according to bitlegal.net109, a site that provides information related to bitcoin’s legal status around the globe:

101 Values according to Bitcoinity.org, which you can access here. 102 Values according to Alexa.com (“The Web Information Company”), which you can access here. 103 Values according to Stats.grok.se, which you can access here. 104 Short for Automated Teller Machine, same as ‘cashpoint’ or ‘cash machine’. 105 To keep reading about this, please refer to ‘Portugal embraces bitcoin: from production of Lamassu machines to installation of first ATM’ in BitcoinExaminer, here. 106 To read further, please refer to ‘Bitcoin: If You Can’t Ban It, Should You Regulate It? The Merits of Legalization’, RAMASASTRY A. in Verdict, February 25th, 2014, here. 107 For the full text of the bill, please refer to the January 21st, 2014 minutes of the Committee on Banking and Finance of the California State Assembly, here. 108 To read the full text, please refer to Warning to consumers on virtual currencies, European Banking Authority, London, United Kingdom, December 12th, 2013, here. 109 You can access the full list here.

• Austria does not welcome the use of bitcoin, warning consumers about its risks. The Austrian Financial Market Authority (FMA) made a public announcement declaring that they neither regulate nor supervise bitcoin activities110.

• Belgium has declared to have no reason to object the use of cryptocurrencies111. Still, it draws consumers’ attention regarding the dangers of investing in digital currencies112.

• Bulgaria has just issued a statement announcing that revenue from operations with cryptocurrencies must be declared and will be taxed like a standard capital gain, up to an annual maximum of 10% of the total annual tax base113.

• Croatia does not consider bitcoin illegal, but it is still not a legal tender in the state. Yet, the Croatian National Bank has declared that, even if cryptocurrencies share similarities with electronic money, they are not considered as such, as there is no debt to the user. • Cyprus does not recognise any virtual currency as legal tender and has issued several warnings, drawing people’s attention to the dangers of their use.

• The Czech Republic issued instructions regarding the handling of digital currency transactions, according to which “the Financial Analysis Unit asks all required persons, that in relation to buying/selling of any digital currency, for example bitcoin, to consider for appraisal any payment above the volume €1,000 as very risky and as a candidate for decision [sic] about other measures, and to send notification about every payment [above] €15,000 as suspicious trade, according to section 18 of AML Law.”114 • Denmark has condemned them for their volatility, but declared them legal for trade115.

• Estonia urged consumers to avoid using virtual currencies since all risks are assumed by the user who receives no help from the country in any case.

• Finland has confirmed their legality, but does not officially recognise them as a currency or a security. Regarding taxation, for now, gains made on bitcoin are taxable as capital gains but further regulations may be issued. At the same time, the country warns consumers of potential dangers116.

Fig. 5

110 To read further, please refer to the ‘Bitcoin’ section in the website of the Austrian FMA, here. 111 To read further, please refer to ‘Belgium’s finance minister has no objection to bitcoin’, BRADBURY D. in CoinDesk, September 11th, 2013, here. 112 To read further, please refer to ‘Belgian Regulators Issue Joint Bitcoin Warning’, HAJDARBEGOVIC N. in CoinDesk, January 16th, 2014, here. 113 To read further, please refer to ‘Bulgaria’s National Revenue Agency announces tax on bitcoin’ in BitcoinExaminer, here. 114 To read the full article, please refer to ‘Czechs hit by bitcoin fever’, PATRYCJA J. in CoinSpectator, January 16th, 2014, here. 115 To read further, please refer to ‘Denmark declares bitcoin legal for trade’ in Payment Magnates, December 17th, 2013, here. 116 To read further, please refer to ‘Bitcoin classified as ‘Commodity’ by Finland Central Bank’, HAJDARBEGOVIC N. in CoinDesk, January 20th, 2014, here. 35

• France has not confirmed their illegality, either. It is worth mentioning that the country has allowed Mt Gox to operate legally within French borders, considering it a form of software and not an electronic currency117. • Germany has classified them as a commodity, taxable as other forms of barter118.

• Greece has not taken any official position regarding the use of cryptocurrencies but has drawn consumers’ attention to their dangers. • Hungary has declared that cryptocurrencies are not recognised as legal tender.

• Ireland does not recognise them as legal tender, either; however, the Irish Minister for Finance declared that “taxes applicable to capital gains and transactions in euros also apply to similar situations in which virtual currencies are used.”119 • Italy claims that the use of electronic money is restricted to banks and official financial institutions; therefore, they do not regulate private individuals’ use of cryptocurrencies.

• Latvia does not recognise cryptocurrencies as legal tender and has drawn consumers’ attention to their risks. • Lithuania has not yet made any official announcement regarding cryptocurrencies.

• Luxembourg declares virtual currencies as “scriptural money” and not as a legal tender.

• Malta has no specific laws regarding cryptocurrencies’ ventures; they benefit from the EU’s regulatory environment. • The Netherlands does not officially consider them legal, but has declared them to be taxable as income in any other currency (the relevant law defines them as ‘income’, not as ‘income as money’). Regardless, after the US, the United Kingdom and Canada, the Netherlands it is the fourth country in the world with the largest bitcoin traffic source; this is why BitPay, world leader in bitcoin business solutions, has just recently opened its European Headquarters in Amsterdam120.

• Poland has recognised cryptocurrencies as legal, per se, but not as legal tender or electronic money, and capital gains generated through them are taxed as ordinary income121.

• Portugal has no specific legal framework regarding cryptocurrencies, but has echoed the main findings of the ECB’s Virtual Currency Schemes study. Surprisingly, especially seeing just

117 To read further, please refer to ‘French Regulator Requires Bitcoin Exchanges to Register’, HAJDARBEGOVIC N. in CoinDesk, January 29th, 2014, here. 118 Cf. Investopedia, here, barter is “the act of trading goods and services between two or more parties without the use of money. Bartering benefits individuals, companies and countries that see a mutual benefit in exchanging goods and services rather than cash, and it enables those who are lacking hard currency to obtain goods and services.” 119 To read further, please refer to the minutes of the Houses of the Oireachtas (Irish House of Deputies and Senate) debates meeting of December 10th, 2013, here. 120 To read further, please refer to ‘BitPay Opens European Headquarters in Amsterdam’ in Business Wire, April 2nd, 2014, here. 121 To read further, please refer to ‘Polish Finance Official: Bitcoin is Not Illegal’, ADAMOWSKI J. in CoinDesk, December 20th, 2013, here. 36

few people in the country seem to be aware of the existence of cryptocurrencies, 120 Lamassu machines (bitcoin ATMs) are currently being – and 40 have already been – built in the north of Portugal122. • Romania is yet to make an official announcement regarding cryptocurrencies.

• Slovakia does not subject virtual currencies to national regulations because they are not national currencies; thus, there is no legal entitlement for possible compensation for losses by such exchanges. • Slovenia does not recognise cryptocurrencies; neither as electronic money nor as foreign currencies.

• Spain considers cryptocurrencies as digital goods and not as legal currencies, because they are not issued by the state. • Sweden has classified cryptocurrencies as an asset, similarly to other assets such as art, stamps and collectibles. Moreover, registration is required for any money-transmitting Bitcoin services under the Swedish financial regulatory agency.

• The United Kingdom allows the ownership and usage of bitcoins in the country. The country’s tax agency suggested to classify them as ‘Single Purpose Vouchers’; however, they backed of this position: Quoting bitlegal.net, “The consequence of this would have been a 20% VAT charged on any miners, investors, traders or exchanges selling Bitcoins that have £79,000+ in annual revenues, if they supplied ‘taxable supplies’ in the course of business. In a major win for the UK Bitcoin community, HMRC backed off this position and declared neither a VAT nor a tax on trading margins would apply – effectively (but not officially) classifying Bitcoin as ‘private currency’”. Yet, revised guidance is about to be issued. As of this day, it is expected that measures will be taken not only with regard to transactions of illegal goods and services, but also concerning taxation rules applying to profits made through the exchange of cryptocurrencies (much in the same way as bonds and stock options are traded). One area that remains uncertain, however, and yet is of utmost importance, is that of the protection of the consumers who may opt to use cryptocurrencies. As of right now, refunds and warranties for products purchased with any form of money that is not legal tender are automatically excluded from them.

6. WHAT NOW? Since “money makes the world go ‘round”, its behaviour changes, as does the behaviour of people toward it. In other words: as our needs change, we change the way we pay for them. Was it a coincidence that cryptocurrencies were created one year following the onset of the financial crisis? Interestingly, change is something we are not always able to predict and, more often than not, also not prevent. What is left for us to do is to learn how to live with change, adapting to 122 To read further, please refer to ‘Portugal embraces bitcoin: from production of Lamassu machines to installation of first ATM’ in BitcoinExaminer, April 1st, 2014, here.

new situations and being able to reap the benefits they can give us. With this in mind, it is the responsibility of the Member States and all relevant international stakeholders to work together to guarantee the safety and the integrity of the internal market, as well as of its consumers. But what stance should the EU take? Can these decisions be made on a supranational level or should the Member States remain free to decide on their own? Would the answer be different if it were to concern only Member States in the euro area

7. WHAT TO GOOGLE? Cryptocurrencies; bitcoin; digital money; virtual money; fiat money; inflation; hyperinflation; core inflation; digital transactions; cryptocurrency awareness; currency mining; cryptocurrency charts.

8. WHAT TO READ? In addition to the many links included in the footnotes, please see: ‘Dogecoin, Coinye, & Catcoin: A Dummy’s Guide to Cryptocurrencies’, LYTTONE C. in The Daily Beast, January 19th, 2014 http://www.thedailybeast.com/articles/2014/01/19/dogecoin-coinye-catcoin-a-dummy-s-guide-to-cryptocurrencies. html

‘New Documents Show Goldman Sachs is Discussing Bitcoin’, RIZZO P. in CoinDesk, February 21st, 2014 http://www.coindesk.com/documents-goldman-sachs-discussing-Bitcoin/

Virtual Currency Schemes, European Central Bank, Frankfurt am Main, Germany, October 2012 http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyschemes201210en.pdf

European Banking Authority | Press room – EBA warns consumers on virtual currencies http://www.eba.europa.eu/-/eba-warns-consumers-on-virtual-currencies

‘Those bitcoin weirdos might just be right’, DELINGPOLE J. in The Spectator, January 4th, 2014 http://www.spectator.co.uk/columnists/james-delingpole/9106132/those-Bitcoin-weirdos-might-just-be-right/

‘Bitcoin Competitors: What You Should Know About 6 Alternative Cryptocurrencies’, W. NEAL R. in International Business Times, January 14th, 2014 http://www.ibtimes.com/Bitcoin-competitors-what-you-should-know-about-6-alternativecryptocurrencies-1540168

‘What is Cryptocurrecy?’, Good Mythical Morning in YouTube, January 20th, 2014 https://www.youtube.com/watch?v=GWKl6efhokg

IMCO 37

INTA

Committee on International Trade

“Europe’s 23 million SMEs account for two thirds of jobs in the private sector and 59% of total value added in the non-financial business economy in 2010. Around 80% of new jobs over the past five years have been created by SMEs. (…) While 25% of EU-based SMEs were involved in exports to the Internal Market and beyond in the last three years, only 13% of EU SMEs are internationally active outside the EU through trade, investment or other forms of cooperation with foreign partners.”

–Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Small Business, Big World – a new partnership to help SMEs seize global opportunities’, COM(2011) 702 final, Brussels, Belgium, November 9th, 2011

chaired by Ms Bérengère Gouraud (FR)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: Matters relating to the establishment and implementation of the Union’s common commercial policy and its external economic relations, in particular: 1. financial, economic and trade relations with third countries and regional organisations;

2. measures of technical harmonisation and standardisation in fields covered by instruments of international law;

3. relations with the relevant international organisations and with organisations promoting regional economic and commercial integration outside the Union; 4. relations with the World Trade Organization, including its parliamentary dimension.

The Committee liaises with the relevant interparliamentary and ad hoc delegations for the economic and trade aspects of relations with third countries.

1. WHY DOES THIS MATTER? Focusing on the blossoming of European micro-, small and medium-sized enterprises (MSMEs)123 is a crucial way for the European Union (EU) to recover from the current economic crisis. Indeed, traditional means of dealing with economic crises, such as currency devaluation, have been made more difficult by the common currency and fiscal policy convergence. A viable alternative is to create employment; MSMEs account for the vast majority of job creation in the EU. Besides, in a longer-term perspective, MSMEs can be a great tool to match global competition. Markets outside the EU can provide a solid source of much needed capital, namely those of developing countries (such as Brazil, China, India, Japan or Russia, to name a few), as well as the United States of America (US), particularly so in the light of the upcoming Transatlantic Trade and Investment Partnership (TTIP)124. Additionally, as western countries further progress into knowledge-based societies, keeping up to date with ever-changing technologies is of utmost importance. Incidentally, this is a field in which MSMEs have made and can still make significant contributions and thereby help reinvigorate the European economy, which all the more justifies that we work to provide them with the best conditions for them to thrive, both within and beyond the EU’s borders. As regards the latter, it can even be added that there is a direct correlation between internationalisation, competitiveness and innovation capacity125. In particular, the digital market is one that EU MSMEs could seize ground on through their ability to innovate. Ultimately, the development of EU MSMEs could – and should – take into account environmental, labour and consumer prerogatives. In that sense, with their potential for evolution, MSMEs can work as powerful levers in achieving a more environmentally friendly and socially cohesive EU. Inversely, avoiding those issues could lead to tremendous social consequences.

2. WHAT IS THE PROBLEM? Administrative and technical obstacles are the most obvious ones. The time and costs involved, complex taxation systems and rigid national labour markets are some of the obstacles standing in the way of entrepreneurs. The mismatch of procedures and technical regulations at the European and international levels make it even more difficult for MSMEs to expand. Moreover, MSMEs need specific advice, something they currently lack, especially in comparison to larger firms. Access to financing constitutes another significant constraint to growth and 123 As defined in Commission Recommendation 2003/361, here, i) microenterprises are those with fewer than ten employees and an annual turnover and/or balance sheet total of less than €2 million; ii) small enterprises are those with fewer than 50 employees and an annual turnover and/or balance sheet total of less than €10 million; iii) medium-sized enterprises are those with fewer than 250 employees and an annual turnover and/or balance sheet total of less than €50 million. 124 Trade agreement that is presently being negotiated between the European Union and the US. It aims at removing trade barriers in a wide range of economic sectors to make it easier to buy and sell goods and services between the EU and the US. To read further, please refer to its respective page in the website of the European Commission’s Directorate-General for Trade, here. 125 To read further, please refer to the ‘Study on Support Services for SMEs in International Business’, OCSIP Consortium, Rotterdam, the Netherlands, March 22nd, 2013, here.

entrepreneurship in Europe, especially so within the context of the current financial crisis. At the international level, the main obstacle comes in the form of trade barriers. Poor circulation and lack of transparency of information constitute yet another obstacle, making it harder for MSMEs to get the right market data, commercial partners, workers with the right knowledge and to get acquainted with the laws of other countries (including those on intellectual and industrial property). In a broader perspective, education is a crucial issue for two reasons: firstly, citizens lack recognition and have a negative perception of entrepreneurship126; secondly, knowledge-based societies and new technologies make the need for lifelong learning increasingly necessary. More specifically, the new working environment requires investing in digital technologies and, nowadays, companies can only be truly competitive if they embrace the digital world and eventually develop new business models. Finally, the protection of our environment and social standards are also at stake when thinking about developing MSMEs. Regarding the former, it must be taken into account that an increasing demand raises our dependence on natural resources. As for the latter, we cannot underestimate the influence the expansion of MSMEs beyond Europe’s borders could have on minorities, the development of social entrepreneurship and the protection of consumers and workers.

3. WHAT DO THE NUMBERS SAY? MSMEs in Europe • Over 99% of all enterprises in Europe are MSMEs127;

• Out of all European enterprises, 90% are micro-enterprises, 7% are small enterprises and 1.1% are medium-sized enterprises128. Employment and MSMEs • In the past five years, around 80% of new jobs in the EU have been created by MSMEs129;

• In the US, surviving firms increase their employment by an average 60% through their seventh year, while employment gains amongst surviving firms in Europe are as low as 10% to 20%130. 126 It refers to an individual’s ability to turn ideas into action. It includes creativity, sense of initiative, innovation and risk-taking, as well as the ability to plan and manage projects in order to achieve objectives. In general, entrepreneurship should be considered as a mind-set that supports everyone in day-to-day life, and provides a foundation for entrepreneurs establishing a social or commercial activity. To read further, please refer to ‘Education & Training for Entrepreneurship’ in its corresponding page in the website of the European Commission’s Directorate-General (DG) for Enterprise and Industry, here. 127 Cf. DG Enterprise and industry, here. 128 Cf. data from Opportunities for the internationalisation of European SMEs (Final report), EIM Business & Policy Research, CSES and ENSR, Brussels, Belgium, September 2011. For the full text of the report, please see here. 129 Cf. data from DG Enterprise & Industry Magazine, which can be accessed here. 130 Cf. data from the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions – “Think Small First – A “Small Business Act” for Europe, COM(2008) 394 final, Brussels, Belgium, June 25th, 2008. For the full text of the communication, please see here. 39

Internationalisation of MSMEs131 • 42% of EU MSMEs are engaged in some form of internationalisation;

• Only 10% of the turnover of internationalised EU MSMEs comes from clients in third countries; • 25% of EU MSMEs are exporting;

• 13% of EU MSMEs are exporting to third countries;

• Around 30% of EU MSMEs have had some sort of international business activity over the last few years. Of this group, about half also had activities beyond the EU’s internal market, of which: • 14% import from third markets, • 13% export to third markets,

• 3% are engaged in different forms of international (technical) cooperation, • less than 1% have their own establishments in third markets;

• The first step of MSMEs’ toward internationalisation is often importing;

• From 2008 to 2009, the EU’s export rates declined by more than €260bn, having then compensated between 2009 and 2010. Closure of MSMEs132 • Only 50% of businesses survive five years after they were created;

• Of all business closures, bankruptcy represents approximately 15% and, of these, only 4–6% are fraudulent bankruptcies.

4. WHO IS WHO? See Fig. 6

5. WHAT HAS ALREADY BEEN DONE? Small Business Act for Europe (since 2008, reviewed in 2011) • Second chance for honest entrepreneurs, easier administration procedures;

• European SME week, Erasmus for young entrepreneurs, EU network of female entrepreneur ambassadors, European Enterprise Awards; • Reduced fees for environmentally friendly projects.

131 EIM Business & Policy Research, CSES and ENSR (2011), op. cit. 132 To read further, please see the ‘A second chance to entrepreneurs’ section in the page of the DG Enterprise & Industry, here. 40

Fig. 6

Enterprise Europe Network (since 2008) • A network comprising close to 600 local organisations in 52 countries that work to ease the way for companies to start trading abroad, find partners and access EU funding. ‘Small Business, Big World’ partnership (since 2011) • Creating the conditions to make MSMEs equally engaged outside the EU: ◊ more efficient use of financial resources;

◊ accessible and adequate information on how to expand beyond the EU; ◊ creation of export consortia between EU MSMEs;

◊ promotion of clusters and networks for MSME internationalisation;

◊ efforts to remove remaining tariff and non-tariff barriers in non-EU countries;

◊ making EU MSMEs’ access to international markets a priority in World Trade Organization talks. Entrepreneurship 2020 Action Plan (since 2013) • Supporting growth and business creation through education for entrepreneurship;

• Removing existing structural barriers (most notably: better access to finance, enhanced support in the digital era by tackling existing barriers to cross-border online business); • Reaching out to specific groups and/or minorities (e.g., women and young people). Programme for the Competitiveness of Enterprises and SMEs (COSME) (since 2014) • Programme with four pillars: i) better access to finance, ii) access to markets, iii) supporting entrepreneurs and iv) more favourable conditions for creation and growth. Current talks on the TTIP (February–March 2014) • Market access (tariff barriers, services, investment);

• Regulatory convergence (e.g., environmental and health standards);

• Trade rules addressing global challenges (mainly, intellectual property rights). Projects to support entrepreneurship education • Entrepreneurship Summer Academies;

6. WHAT NOW? • Need for news skills: How to address the need of future skills (technological skills, language skills, lifelong learning) to adapt to market evolution?

• Procedure and support in MSMEs’ creation and development: How to ensure that administrative procedures are not a burden to potential entrepreneurs, but rather that they provide a framework to further secure and regulate them?

• Perception of entrepreneurship: How to change its currently negative perception by European citizens? To that end, one has to take into consideration the diversity of targeted people: elementary school, high school and business students, (future) political leaders and the civil society at large. • Finding the right trade partners: How can we ensure an easier access to foreign markets? How can we make the information flow more transparent? One should bear in mind that the ongoing TTIP talks will enter a fifth round before the summer, and that initiatives have been launched in developing countries through the Enterprise Europe Network. • Finding the right workforce with the right skills: How can entrepreneurs more easily find the workers that fit their needs (on a local, national and European level)?

• Financial support – public or private? Which entities should be responsible for the financial support to MSMEs’ expansion? What to make of the newly created European Investment Bank?

• Protection of workers and consumers: How can we ensure that development of legislation aiming at the protection of workers and consumers keeps up with the development of our economy?

• Energy supply and environmental protection: How can we ensure that MSMEs respect the EU’s environmental and energetic goals, without unduly sacrificing their development?

• Targeting minorities: How can we ensure that minorities, such as women, migrants and the jobless, as well as new graduates, take part in the expansion of EU MSMEs?

7. WHAT TO GOOGLE? EU (M)SMEs internationalisation; EU (M)SMEs access new markets ; (M)SMEs in the BRICS/Brazil/Japan/Russia/the US; EU (M)SMEs in digital era/with new technologies; EU (M)SMEs and TTIP; (M)SMEs EU employment growth; (M)SMEs EU employment growth; (M)SMEs EU funding/financing; (M)SMEs EU public-private partnership; European Investment Bank; Enterprise Europe Network; EU SME Centre; Entrepreneurship education in Europe; (M)SMEs EU improving business environment; (M)SMEs EU administrative procedures burden.

• European online platform for educators to facilitate peer advising.

8. WHAT TO READ? Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Entrepreneurship 2020 Action Plan – Reigniting the entrepreneurial spirit in Europe, COM(2012) 795 final, Brussels, Belgium, January 5th, 2013 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0795:FIN:en:PDF

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: ‘Small Business, Big World – a new partnership to help SMEs seize global opportunities’, Communication by the European Commission, November 9th, 2011

‘Transatlantic Trade and Investment Partnership – the opportunities for small and medium-sized enterprises, Publications Office of the European Union, Luxembourg, Luxembourg, March 14th, 2014 https://www.youtube.com/watch?v=GWKl6efhokg

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0702:FIN:EN:PDF

‘Europe 2020 targets: Access to finance’ in European Semester 2012 Thematic Fiche, European Commission, November 5th, 2013 http://ec.europa.eu/europe2020/pdf/themes/09_sme_access_to_finance.pdf

European Investment Bank | Priorities - ‘Small and Medium-sized enterprises ’ http://www.eib.org/projects/priorities/sme/index.htm?lang=en

European Commission | Enterprise and Industry – What is COSME? (Competitiveness for Small- and Medium-sized Enterprises) http://ec.europa.eu/enterprise/initiatives/cosme/index_en.htm

‘Magnetic attraction for EU SMEs’, WEI H. in China Daily, August 5th, 2013 http://www.chinadailyasia.com/business/2013-08/05/content_15081400.html

‘Les Misérables’ in The Economist, June 28th, 2012 http://www.economist.com/node/21559618

‘EU–US trade negotiators explore ways to help SMEs take advantage of TTIP, as fourth round of talks ends in Brussels’, European Commission – IP14/272 , Brussels, Belgium, March 14th, 2014 http://europa.eu/rapid/press-release_IP-14-272_en.htm

‘US ambassador invites dialogue on TTIP’, KING T. in European Voice, April 3rd, 2014 http://www.europeanvoice.com/article/imported/us-ambassador-invites-dialogue-on-ttip-/80361.aspx

Transatlantic Trade and Investment Partnership – The regulatory Part, European Commission, September 2013 http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151605.pdf

INTA 42

LIBE

Committee on Civil Liberties, Justice and Home Affairs

“Corruption seriously harms the economy and society as a whole. Many countries around the world suffer from deep-rooted corruption that hampers economic development, undermines democracy, and damages social justice and the rule of law. The Member States of the EU are not immune to this reality.”

–Report from the Commission to the Council and the European Parliament ‘EU Anti-Corruption Report’, COM(2014) 38 final, Brussels, Belgium, February 3rd, 2014

chaired by Ms Rita Ferreira (PT)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. the protection, within the territory of the Union, of citizens’ rights, human rights and fundamental rights, including the protection of minorities, as laid down in the Treaties and in the Charter of Fundamental Rights of the European Union; 2. the measures needed to combat all forms of discrimination other than those based on sex or those occurring at the workplace and in the labour market;

3. legislation in the areas of transparency and of the protection of natural persons with regard to the processing of personal data; 4. the establishment and development of an area of freedom, security and justice, in particular: a) measures concerning the entry and movement of persons, asylum and migration, b) measures concerning an integrated management of the common borders, c) measures relating to police and judicial cooperation in criminal matters;

5. the European Monitoring Centre for Drugs and Drug Addiction and the European Union Agency for Fundamental Rights, Europol, Eurojust, Cepol and other bodies and agencies in the same area;

6. the determination of a clear risk of a serious breach by a Member State of the principles common to the Member States. 43

1. WHY DOES THIS MATTER? “Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life, and allows organized crime, terrorism and other threats to human security to flourish.” – Kofi Annan, seventh Secretary-General of the United Nations, in Statement on the Adoption by the General Assembly of the United Nations Convention against Corruption, New York City, New York, United States of America, October 31st, 2003 Europe must act against corruption. While many laws have been passed in recent years in an attempt to solve the issue of corruption, their implementation has not been effective. The lack self-restraint and discipline of politicians, in particular regarding conflicts of interest, has fuelled constant scandals. Carl Dolan, of Transparency International in Brussels, said that “Europe’s problem is not so much with small bribes on the whole, it’s with the ties between the political class and industry.” Lately, we have been repeatedly bombarded with news of scandals relating to corruption in politics: shadowy decision-making, lack of public access to information, ‘old-boys’ networks’, public–private partnerships, the opaque financing of political life, horse trading between private companies and politicians and the misuse of funds. Moreover, corruption in Europe is not only felt in politics: the media, religious bodies, businesses and the private sector, judiciary, medical and healthcare services, public officials and civil servants are also influenced by corruption and bribery. Corruption, although unnoticed for the most part, challenges the European Union (EU) on a daily basis and, while the nature, causes and levels of corruption vary across the continent, they affect the EU as a whole.

2. WHAT IS THE PROBLEM? Clearly, effectively tackling corruption is a task not only for the Member States, but also for the EU to take on in different sectors and at the same time, while bearing in mind that the level of effectiveness of the measures taken may vary amongst regional and local levels. According to a Eurobarometer survey, an increasing number of EU citizens find the situation to be getting worse, with Greeks, Spaniards and Italians believing corruption in their respective countries to have reached deplorable levels. Inversely, Danish, Swedish and Finnish citizens, put their countries at the top of the list as the least corrupt. Obviously, the spectrum of corruption differs from one Member State to the next, being that the level of economic development and the power (or lack thereof) of public institutions lead to increased instances of corruption. Furthermore, four out of five European citizens feel that corruption is a major problem in their countries, being that corruption and bribery linked to public procurement are still very high in all Member States, which in turn creates a barrier to competition in the internal market. Likewise, eight out of ten EU citizens believe that tight links between politics and business tend to lead to corruption. Other common issues are the conflict of interests (which are not addressed 44

in many countries) and the ineffectiveness of anti-corruption agencies. Anti-corruption and anti-bribery legislation remains poorly implemented (or, sometimes, not implemented at all), especially when it comes to complex, high-level cases. Immunity rules and statutes of limitations cause very long delays in bringing cases to justice. Additionally, the cautious approach from police departments to cases involving members of ‘the establishment’ or political members makes for even longer delays, while corruption amongst judges and political interference in investigations render arrests all the more unlikely.

3. WHAT DO THE NUMBERS SAY? According to its first Anti-Corruption Report (2014), corruption costs the EU an estimated €120bn per year, which amounts to nearly 1% of the Member States’ combined Gross National Income (the same they contribute to the EU’s annual budget). Even though the EU has passed anti-corruption laws, citizens from Greece, Lithuania and Romania still face the need to pay bribes in order to access basic services such as healthcare. Yet, this is not the major issue when it comes to the general EU population, as only 4% of citizens have, on average, been asked for a bribe or expected to pay one. According to 2013–2014 data published by the Eurobarometer, though, 56% of Europeans believe that corruption is still a serious problem in EU Member States and that the level of corruption has risen over the last three years, with citizens from the Czech Republic, Italy, Portugal, Spain and Slovenia being the most likely to think that corruption has increased since 2011. In fact, 56% of Europeans believe that the only way to succeed in business in their country is through political connections and approximately one in twelve Europeans claims to have experienced or witnessed a case of corruption in the past year (still, only 12% of those have reported it). Bearing this in mind, there is no question when it comes to the need for change, not only in the political, public and private sectors but also in our collective mentality. See Fig. 7

4. WHO IS WHO? See Fig. 8

5. WHAT HAS ALREADY BEEN DONE? Corruption is not a recent problem and, over the years, governments and international agencies have struggled to effectively protect citizens, countries and enterprises against it. Below, you can find a list of legislation/strategies133 created in the last 15 years with the aim of combating corruption: 133 For an even more comprehensive list, complete with various details and access/download links, see here.

Fig. 7 â&#x20AC;&#x201C; The Corruption Perception Index ranks countries based on how corrupt a countryâ&#x20AC;&#x2122;s public sector is perceived to be (the rank is from 1 to 177). The control of corruption reflects perceptions of the extent to which public power is exercised for private gain (including both petty and grand forms of corruption).

Fig. 8

• The Organisation for Economic Co-operation and Development (OECD) Convention on Bribery of Foreign Public Officials in International Business Transactions (1997); • The Council of Europe Criminal Law Convention on Corruption (1999); • The Council of Europe Civil Law Convention on Corruption (1999);

• The Millennium Strategy on the Prevention and Control of Organised Crime (2000); • The Framework Decision on Combating Corruption in the Private Sector (2003); • The United Nations Convention on Transnational Organised Crime (2003); • The United Nations Convention Against Corruption (2005);

• The G20 Agenda for Action on Combating Corruption, Promoting Market Integrity, and Supporting a Clean Business Environment (2010); • The G20 Anti-Corruption Action Plan 2013–2014 (2012).

Anti-corruption monitoring mechanisms, such as the Group of States against Corruption (GRECO) and OECD, have been working since their creation in order to end this problem. As can be read in the EU Anti-Corruption Report134, though, corruption is still very much ingrained in the public and private national systems of Member States.

6. WHAT NOW? • The cross-border element: the internationalisation of corruption. How to address cases concerning governments (and/or their members) and international companies such as the Patria case135 or the one involving German firms allegedly paying bribes to Greek officials in exchange for arms deals136? Who should take the lead and how can the responsible entities ensure that cases like these do not slip through legal loopholes? • Protection of whistle-blowers: how can the Member States protect those who report crimes of corruption and/or bribery?

• Free access to information: should the right to information be used as an anti-corruption tool? • Horse trading: what measures can be taken in order to eradicate instances of horse trading?

• ‘Swedish transparency’: as Sweden sits at the top of the rank when it comes to anti-corruption mechanisms, should the EU rethink its privacy laws? • Disparities amongst the Member States: how can the EU set up ways of battling corruption and bribery that are considerate of the different problems within the various Member States?

134 This refers to Report from the Commission to the Council and the European Parliament – EU Anti-Corruption Report, COM(2014) 38 final, Brussels, Belgium, February 3rd, 2014, which you can access here. 135 To read further, please refer to ‘Finnish court rejects Slovenian bribery charges against Patria’ in YLE, January 30th, 2014, here. 136 To read further, please see ‘More Arrests: Greece Makes Progress on Arms Deal Corruption’ in Spiegel Online International, January 20th, 2014, here. 46

7. WHAT TO GOOGLE? Anti-corruption laws; corruption in public–private partnerships; financing of political life; government transparency; conflicts of interest; lack of accountable rules for lobbying; judiciary’s lack of independence; misuse of funds; corruption through legal loopholes and grey areas; whistle-blower protection; statutes of limitations; party financing; corruption in healthcare and pharmaceuticals/defence and security/public procurement/private sector/education, engineering and electronics/motor vehicles/construction and building/information technology and telecommunications/financial services/banking and investment/climate change/energy/oil and gas/ mining/sport.

8. WHAT TO READ? ‘Report: Corruption widespread in EU’ in Aljazeera, February 4th, 2014

http://www.aljazeera.com/news/europe/2014/02/eu-report-corruption-widespread-bloc-20142313322401478.html

‘EU Anti-Corruption Report update: will anyone be satisfied?’, PATZ R. in Transparency International, December 9th, 2013 http://www.transparencyinternational.eu/2013/12/eu-anti-corruption-report-update-will-anyone-be-satisfied/

‘Whistleblowing in Europe: legal protections for whistleblowers in the EU’ in Transparency International, November 5th, 2013 http://www.transparency.org/whatwedo/pub/whistleblowing_in_europe_legal_protections_for_whistleblowers_in_ the_eu

‘Corruption Perceptions Index 2013’ in Transparency International, December 3rd, 2013 http://www.transparency.org/whatwedo/pub/cpi_2013

‘Flipping the Corruption Myth’, HICKEL J. in Aljazeera, February 1st, 2014

http://www.aljazeera.com/indepth/opinion/2014/01/flipping-corruption-myth-201412094213280135.html

‘Transparency in corporate reporting: assessing emerging market multinationals’ in Transparency International, October 16th, 2013 http://www.transparency.org/whatwedo/pub/transparency_in_corporate_reporting_assessing_emerging_market_ multinational

‘Money, politics, power: corruption risks in Europe’ in Transparency International¸ June 6th, 2012 http://www.transparency.org/whatwedo/pub/money_politics_and_power_corruption_risks_in_europe

‘Exporting corruption: Progress Report 2013: assessing enforcement of the OECD Convention on Combating Bribery’ in Transparency International, October 7th, 2013 http://www.transparency.org/whatwedo/pub/exporting_corruption_progress_report_2013_assessing_enforcement_ of_the_oecd

‘Controlling corruption through collective action’, MUNGIU-PIPPIDI, A. in Journal of Democracy, Vol. 24, No. 1, January 2013, pp. 101–115 http://www.journalofdemocracy.org/sites/default/files/Mungiu-Pippidi-24-1.pdf

‘Bribe Payers Index 2011’ in Transparency International¸ November 2nd, 2011 http://www.transparency.org/whatwedo/pub/bpi_2011

‘Businesses’ attitudes towards corruption in the EU’, summary of Flash Eurobarometer 374, European Commission, February 2014 http://ec.europa.eu/public_opinion/flash/fl_374_sum_en.pdf

‘Businesses’ attitudes towards corruption in the EU’, full report of Flash Eurobarometer 374, European Commission, February 2014 http://ec.europa.eu/public_opinion/flash/fl_374_en.pdf

‘Corruption’, full report of Special Eurobarometer 397, European Commission, February 2014 http://ec.europa.eu/public_opinion/archives/ebs/ebs_397_en.pdf

Report from the Commission to the Council and the European Parliament – EU Anti-Corruption Report, COM(2014) 38 final, Brussels, Belgium February 3rd, 2014 http://ec.europa.eu/dgs/home-affairs/e-library/documents/policies/organized-crime-and-human-trafficking/ corruption/docs/acr_2014_en.pdf

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents, The Organisation for Economic Co-operation and Development, Paris, France, November 21st, 1997 http://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf

Criminal Law Convention on Corruption, Council of Europe, Strasbourg, France, January 27th, 1999

to, United Nations Office on Drugs and Crime, New York City, New York, United States of America, 2004 http://www.unodc.org/documents/treaties/UNTOC/Publications/TOC%20Convention/TOCebook-e.pdf

United Nations Convention against Corruption, United Nations Office on Drugs and Crime, New York City, New York, United States of America, 2004 http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf

G20 Agenda for Action on Combating Corruption, Promoting Market Integrity, and Supporting a Clean Business Environment in G20 Anti-Corruption Action Plan, Seoul, South Korea, November 12th, 2010 http://www.oecd.org/g20/topics/anti-corruption/G20_Anti-Corruption_Action_Plan.pdf

G20 Anti-Corruption Action Plan 2013–2014, October 16th, 2012

http://www.oecd.org/g20/topics/anti-corruption/G20_Anti-Corruption_Action_Plan_(2013-2014).pdf

http://conventions.coe.int/treaty/en/treaties/html/173.htm

Civil Law Convention on Corruption, Council of Europe, Strasbourg, France, November 4th, 1999 http://conventions.coe.int/treaty/en/treaties/html/174.htm

‘Council Resolution of 29 April 2004 on a Model Protocol for the establishment in Member States of partnerships between the public and private sectors to reduce the harm from organised crime’ in Official Journal of the European Union, C 116/20, April 30th, 2004 http://eur-lex.europa.eu/legal-content/EN/TXT/ PDF/?uri=CELEX:32004G0430(02)&qid=1396204440224&from=EN

‘Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector’ in Official Journal of the European Union, L 192/54, July 31st, 2003 http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32003F0568&from=EN

United Nations Convention against Transnational Organised Crime and the Protocols There-

LIBE 47

REGI

Committee on Regional Development

“There are many things that are uncertain about the future. But it is clear to me that the future lies online. For so many areas of life. Do we want European leadership? European competitiveness? A bright European future? If we do – in any area –, we need a continent prepared for the digital age.”

–Neelie Kroes,Vice-president of the European Commission and European Commissioner for Digital Agenda in A vision for Europe, European Commission SPEECH/14/49 , World Economic Forum, Davos, Switzerland, January 22nd, 2014

chaired by Mr Henrique Vieira Mendes (PT)

COMMITTEE COMPETENCIES (As per the statutes of the European Parliament)

Committee responsible for: 1. the European Regional Development Fund, the Cohesion Fund and the other instruments of the Union’s regional policy; 2. assessing the impact of other Union policies on economic and social cohesion; 3. coordinating the Union’s structural instruments;

4. outermost regions and islands, as well as trans-frontier and interregional cooperation;

5. relations with the Committee of the Regions, interregional cooperation organisations and local and regional authorities.

At the meeting of 14 December 2006, the Conference of Presidents decided to include the urban dimension as a competence of the Committee.

1. WHY DOES THIS MATTER? “Bridging the digital divide and making fast broadband available everywhere in Europe today, without waiting for terrestrial infrastructure projects to be completed, has the potential to create jobs and give a boost to rural economies and peripheral areas in Europe.” – Lambert Van Nistelrooij, Member of the European Parliament (EPP), in a speech at a Parliament event, October 10th, 2013

The Internet has taken over the world. Its widespread use has led to a new era for mankind, often referred to as the Information Society. The developments of the last few decades have answered a lot of needs while, at the same time, raising a lot of new issues and adding new dimensions to the economic, social, cultural and political lives of individuals, businesses and society as a whole. More and more, activities are carried out online, often rendering one’s location irrelevant. The term ‘digital divide’ has been coined to distinguish between those who access and are able to use the services offered by the Internet and those who cannot. Europe is closing in on the access gap between its regions. The Digital Agenda for Europe was developed to help digital technologies deliver sustainable economic growth. One of its pillars is updating the Single Market to fit these digital times, hence creating a Digital Single Market, aiming to boost online businesses, create a free flow of online services and further protect EU consumers in cyberspace. As businesses everywhere seek ways to save money and improve their performance, mastering Information and Communications Technologies (ICTs) has become vital. Furthermore, being politically active, quickly accessing information and networking are all mostly done online. This raises the question of Digital Literacy, a term coined by Paul Gilster to mean “the ability to understand and use information in multiple formats from a wide range of sources when it is presented via computers.” Summing up, Europe must now provide its citizens with the tools to fully participate in the information society, especially those at greater risk of exclusion.

2. WHAT IS THE PROBLEM? We are all aware that Europe is struggling with its deepest recession in decades. Businesses are shrinking and expect workers to do more with less. Discretionary spending on superfluous infrastructure or equipment has been cut to a minimum, big spending decisions remain on hold, while budgets for further staff training continue being sliced as companies need to scale down investment. This inevitably puts an added pressure on the European Union (EU) and the Member States if they wish to ensure higher levels of digital literacy across the board, ranging from people still studying or in training to those in the labour force. Accessing and mastering new software are key to being self-sufficient and staying safe and up to date in a fast-changing world. Give a man internet access and he will surf the web for a while, teach him how to make the most of it and he will have a better chance of staying relevant in the labour market until retirement. On another note, Internet users are still uncertain of how to deal with instances of, e.g., mailbox hacking or online transactions, and threats such as malicious software and online fraud remain a pressing issue.

Additionally, matters are greatly complicated as different regions within the EU find themselves at different stages of digital development. Part of the problem has been the unilateral approach taken by the European Commission (EC), namely with its ‘Digital Agenda for Europe’ initiative, a core component of the Europe 2020 strategy. Enhancing basic digital literacy, creating e-Inclusion amongst all citizens and definitively bridging the digital divide – these are some of Europe’s most pressing issues for the future.

3. WHAT DO THE NUMBERS SAY? Internet access disparities throughout the EU (Eurostat, 2011)137: • Nearly three quarters of EU households had access to the Internet in 2011: There were also significant disparities in broadband take-up by households amongst countries, with numbers falling well below 50% in Bulgaria, Greece and Romania.

• Nine out of ten individuals aged 16–24 used the Internet regularly. As per one of the goals of the ‘Digital Agenda for Europe’, 75% of the population should be using the Internet regularly by 2015. As of 2011, that indicator was still at 68%. • Throughout the EU, one out of four individuals aged 16–74 had never used the Internet. Although the rate of decline has slowed down, reaching the Digital Agenda goal of not more than 15% non-users remains possible.

• One out of 20 enterprises in the EU-27138 did not have internet access as of early 2011, while the vast majority (87%) made use of a fixed broadband connection.

• In the last two decades, there have been a number of studies139 on individual, group and societal use of the Internet, some focusing on access by gender, age, socioeconomic background or country; others on the actual content of the websites visited. These are some of the results140: • Low-income internet users spend more time online than high-income users;

• There is some evidence of an education-based digital divide in the ability to use websites related to career, education, health and purchasing goods and services; • A single worker’s wasted time on the job due to lack of e-skills can amount to thousands of euros every year; • Only 12% of European internet users feel completely safe making online transactions.

137 Cf. ‘Internet use in households and by individuals in 2011’, SEYBERT H. in Eurostat Statistics in focus 66/2011, Luxembourg, Luxembourg, December 8th, 2011, here. 138 The EU-27 refers to the EU as it was before the accession of its latest Member State, Croatia. 139 Please refer to the ‘What to read?’ section for a selection of these and other studies. 140 Cf. ‘IT skills: the business gain’, SCULLY P. in GISP Project Report, Business unusual, ECDL Foundation, Brussels, Belgium, January 18th, 2011, here. 49

4. WHO IS WHO? See Fig. 9

5. WHAT HAS ALREADY BEEN DONE? The following are a series of European Commission (EC) initiatives that, more or less directly, address the issues of digital literacy and the divide therein. • Digital Agenda for Europe: The Digital Agenda for Europe (DAE) aims to reboot Europe’s economy and help its citizens and businesses get the most out of digital technologies. It is the first of seven flagships initiatives under Europe 2020, the EU’s strategy to deliver smart, sustainable and inclusive growth.

• e-Skills Week 2012: European e-Skills Week is a major awareness-raising event of the European Commission, aimed at highlighting the growing demand for skilled ICT users and professionals to drive a competitive and innovative Europe. • Safer Internet Day: Co-funded by the EC, this is a global initiative aimed at keeping people safe online, particularly children and young people.

• Development of Digital Competences Framework linked to the European Qualifications Framework. Defining competencies needed for people to thrive in the labour market. ‘Digital competence’ ended up being broadly defined as the confident, critical and creative use of ICTs to achieve goals related to work, employability, learning, leisure, inclusion and/or participation in society. • EC R&D and innovation deployment programmes (FP7 ICT and CIP ICT-PSP), a number of activities and pilot programmes addressing e-inclusion and ICT skills and competences for intermediaries have been launched. • The European Platform against Poverty and Social Exclusion, another of the seven flagship initiatives of the Europe 2020 strategy, promotes the inclusion of ICT skills and competences as a priority for the European Social Fund 2014–2020.

Fig. 9

• The EC’s Employment Package (adopted in April 2012) addressed the potential of and underlined the need to focus on digital literacy and e-skills to create jobs and aid employability.

6. WHAT NOW? Digital technologies have a far-reaching economic impact. Furthermore, they increasingly play a role in improving people’s daily lives. How can we provide better access to a set of tools that enhance efficiency and facilitate communication between citizens, businesses and governments? How can the latter two further pursue original ways of encouraging economic growth, while saving money for themselves and the citizens in general? The EC is already carrying out numerous studies and pilot programmes in close cooperation with the Member States, industries, national administrations and local communities. 50

How can infrastructures, high-speed connections and affordable prices all be met to develop ICTs and further aid in the full implementation of the Digital Single Market? Furthermore, internet security is still a pressing issue: how can the EU work to ensure its citizens can trust online payments and avoid falling victim of online fraud and hacking? Digital literacy for all EU citizens, better, interoperable, secure and fast internet services with a particular focus on less developed regions are crucial. How can the EU help its citizens improve their e-skills and stay up to date in a fast-changing environment? Moreover, with the possibility of addressing politicians and entities online, even our political lives are changing; but how can the EU further pursue the goals of e-citizenship, while ensuring none of its citizens is left behind? Regardless of how we get there, the goals are clear: better access, better skills and better internet usage.

7. WHAT TO GOOGLE? Information and Communication Technologies (ICTs); digital divide in Europe; e-Inclusion; Digital Single Market; Information Society; Digital Agenda for Europe.

8. WHAT TO READ? Official sources

European Commission | Digital Agenda for Europe – ‘Great news for cyber security in the EU: The European Parliament successfully votes through the Network & Information Security (NIS) directive’ http://ec.europa.eu/digital-agenda/en/news/great-news-cyber-security-eu-european-parliament-successfully-votesthrough-network-information

‘A free media needs regulators to be independent’, KROES N. in Neelie Kroes’s blog, European Commission, March 5th, 2014 http://ec.europa.eu/commission_2010-2014/kroes/en/content/free-media-needs-regulators-be-independent

‘Fast and ultra-fast internet access’ in Digital Agenda Scoreboard – Broadband Markets, European Commission, Brussels, Belgium, June 12th, 2013 https://ec.europa.eu/digital-agenda/sites/digital-agenda/files/DAE%20SCOREBOARD%202013%20-%20 2-BROADBAND%20MARKETS%20.pdf

Media Literacy and the European Institutions, legislative framework and initiatives, CELOT P., European Association for Viewers Interests, Brussels, Belgium, December 4th, 2007 http://www.eavi.eu/joomla/images/stories/Conferences/Other_Conferences/getsmart.pdf Statistics

European Commission | Eurostat – Information society statistics

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Information_society_statistics

European Commission | Digital Agenda for Europe – Scoreboard

European Commission | Eurostat – Information society statistics at regional level

European Commission | Digital Agenda for Europe – Multi-stakeholder platform for digital literacy and e-Inclusion

‘E-Skills Week 2012 – Computer skills in the EU27 in figures’, URHAUSEN J. et al., Eurostat News Release 47/2012, Luxembourg, Luxembourg, March 26th, 2014

European Commission | Digital Agenda for Europe – Digital skills: the challenge for business

‘Europe closes the digital divide’, SMITH P. in Real Wire, Brussels, Belgium, October 17th, 2013

http://ec.europa.eu/digital-agenda/en/scoreboard

http://ec.europa.eu/digital-agenda/en/multi-stakeholder-platform-digital-literacy-and-e-inclusion http://ec.europa.eu/digital-agenda/en/digital-skills-challenge-business

European Commission | Digital Agenda for Europe – Global Infrastructure for One-size-fitsone Digital Inclusion http://ec.europa.eu/digital-agenda/en/global-infrastructure-one-size-fits-one-digital-inclusion

European Commission | Digital Agenda for Europe – Paneuropean diploma in ICT http://ec.europa.eu/digital-agenda/en/paneuropean-diploma-ict

News articles and papers European Commission | Digital Agenda for Europe – Europe closes the digital divide http://ec.europa.eu/digital-agenda/en/news/europe-closes-digital-divide

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Information_society_statistics_at_regional_level

http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-26032012-AP/EN/4-26032012-AP-EN.PDF

http://www.realwire.com/releases/Europe-closes-the-digital-divide

‘The Digital Divide in Numbers: TVs, PCs, Internet users, Mobile around the world’, AHONEN T. in Communities Dominate Brands, November 10th, 2009

http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html

Video clips European Commission | Digital Agenda for Europe – Smart mobility in Europe with ICT for Mobility: get EU funds! http://ec.europa.eu/digital-agenda/en/news/smart-mobility-europe-ict-mobility-get-eu-funds

‘Introduction into TV-WEB, an initiative of the SEE Programme tackling digital divide’, SÜVEGES T. in YouTube, People & Blogs, September 18th, 2013 https://www.youtube.com/watch?v=nDUDC5jW4lg

‘EU revamps digital agenda’, EurActiv in YouTube, News & Politics, December 19th, 2012 https://www.youtube.com/watch?v=3F-myfjE6Zs

‘ICT2013 – Create, Connect, Grow – Digital Agenda, European Commission’, European Commission in YouTube, News & Politics, November 6th, 2013 https://www.youtube.com/watch?v=n5kxtjMMMD0

‘Digital is natural’, Digital Agenda EU in YouTube, Science & Technology, September 30th, 2013 https://www.youtube.com/watch?v=aMTQBCZIBTo

‘The 2013 Digital Agenda Scoreboard’, Digital Agenda EU in YouTube, Science & Technology, July 1st, 2013 https://www.youtube.com/watch?v=tBVwswVWIwE

‘Digital Agenda Strategy for EU – Axel Schultze’, GOTTSCHALL F. in YouTube, News & Politics, June 21st, 2012 https://www.youtube.com/watch?v=QQuIMB1ULC0

YouTube – Search results: ‘Digital Agenda European Union’

https://www.youtube.com/results?search_query=digital+agenda+european+union&sm=3

REGI 52

CONTACTS

This Academic Preparation Kit is the responsibility of the Board of the session and of the team of Chairpersons. General queries should be addressed to the President. Otherwise, the Chairpersons will contact their Committees regarding all pre-session academic preparation tasks. APPEJ – Associação Portuguesa do Parlamento Europeu dos Jovens/European Youth Parliament Portugal E-mail address: appejovens@gmail.com Website: www.pejportugal.com Official Facebook page: www.facebook.com/EYPPortugal Abrantes 2014 – 30th National Selection Conference of EYP Portugal E-mail address: organizacao-ssn@pejportugal.com Official Facebook page:www.facebook.com/macao.abrantes.2014 Head-organisers E-mail address: organizacao-ssn@pejportugal.com (reaches both) Telephone numbers: Ana Nunes – (+351) 91 913 53 10 Miguel Paiva– (+351) 91 270 21 85 Session President E-mail address: tiagocorreiamachado@homail.com Telephone number: (+351) 91 616 40 97

Under the patronage of the Municipality of Abrantes

With the support of Escola Prática de Cavalaria de Abrantes

With the support of Escola Secundária Doutor Solano de Abreu

With the support of Instituto Português do Desporto e Juventude, I. P.