Category Archives: Blog

Europe’s green recovery from the COVID-19 pandemic

On 27 May, the European Commission’s published its historic proposal for the ‘Next Generation EU’ recovery fund worth €750 billion, topping the renewed proposal for a €1.1 trillion Multiannual Financial Framework (MFF) 2021-2027. This proposal for unprecedented investment in the European economy is set to dominate the political agenda of the European institutions for the upcoming months. However, as the European Green Deal was put on the top of the agenda only recently, the current situation begs the question how Green Deal initiatives are incorporated into the Commission’s recovery plans.

Main takeaways                

  •  The European Green Deal will be central in Next Generation EU, public recovery investments should follow EU energy and climate priorities;
  • Additional funding of €30 billion for the Just Transition Fund, bringing the total up to €40 billion;
  • The CAP budget will fall by around €34 billion, but farmers will receive funds for the green transition;
  • The Commission will increase its own resources via an extension of the Emission Trading System (ETS) to the maritime and aviation sectors and a carbon border adjustment mechanism.

Accelerated investments in the green transition

Within the recovery fund, the Commission proposes to set up a Solvency Support Instrument to mobilize private investment and thereby kick-start the economy. The Solvency Support Instrument will have a budget of €31 billion and will unlock up to €300 billion in support that will be linked to the green and digital ambitions of the EU. Apart from that, a new Strategic Investment Facility will be built into InvestEU, generating investment up to €150 billion in boosting the resilience of strategic sectors, notably linked to the green and digital transition.

To kick-start the green transition in times of crisis, the European Commission will come up with a Communication to start a European ‘renovation wave’ in the third quarter of 2020. This massive renovation wave of buildings will improve energy efficiency and promote the circular economy, whilst creating local jobs in the coming years.

On top of the renovation wave, the Commission will focus on rolling out renewable energy projects, especially wind and solar. To this end, the Commission will publish an offshore renewable energy strategy later this year. Moreover, the EU will reinforce its efforts to develop a clean hydrogen economy in Europe, something that is currently mainly promoted by Germany and the Netherlands.

When it comes to clean transport and logistics, the Commission aims to accelerate the production and deployment of sustainable vehicles and vessels as well as alternative fuels. This ambition includes the installation of one million charging points for electric vehicles and a boost for rail travel and clean mobility in European cities and regions.

The Next Generation EU recovery fund also adds €30 billion to the Just Transition Mechanism, bringing its allocated budget 2021-2027 up to €40 billion. As part of the Just Transition Mechanism, the Just Transition Fund will be reinforced to support re-skilling and to help businesses create new economic opportunities in the regions of the EU that are most affected by the green transition.

EU ‘green’ levies to finance recovery

How will this sustainable recovery be financed? The Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. To repay these loans in a fair and shared way, the Commission proposes a number of new own resources. The Commission will for example increase its own resources via an extension of the Emission Trading System (ETS) to the maritime and aviation sectors and a carbon border adjustment mechanism.

Next steps

German chancellor Angela Merkel, shortly before the start of the German Presidency of the Council of the EU, expressed the ambition to reach a compromise on the future EU budget and recovery fund by fall 2020. The proposal of the Commission, as well as the plans put forward by the Franco-German axis and the Frugal Four (Austria, Denmark, the Netherlands and Sweden), have kept the green transition high on the agenda and one can therefore reasonably expect the EU’s great leap forward in green technologies to materialize in the upcoming years.

The EU Budget proposal and its impact on the digital sector

On 27 May, the European Commission put forward its proposal for a major recovery plan. The plan includes not only a proposal for the EU’s Multiannual Financial Framework for 2021-2027 – The EU budget powering the recovery plan for Europe, but the European Commission also proposes to create a new recovery instrument, Next Generation EU.

Next Generation EU, with a budget of €750 billion, together with targeted reinforcements to the 2021-2027 EU budget with a proposed budget of €1.1 trillion, will bring the total financial firepower of the EU budget to €1.85 trillion. Including other schemes such as Support to mitigate Unemployment Risks in an Emergency (Commission’s safety net for workers), the European Stability Mechanism Pandemic Crisis Support (Eurozone’s enhanced credit line) and the European Investment Bank Guarantee Fund for Workers and Businesses (focused primarily on small and medium-sized companies), with a combined budget of €540 billion, significant funds will be available for European recovery.

Next Generation EU will raise money by temporarily lifting the European Commission’s own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. To help do this in a fair and shared way, the Commission proposes a number of new own resources among which extension of the EU Emission Trading System (ETS) to include maritime and aviation sectors, a carbon border adjustment mechanism, a digital tax and a tax on large enterprises.

Finally, the Commission has published an update of its 2020 Work Program, which will prioritize the actions needed to propel Europe’s recovery and resilience.

The future is digital

The outbreak of COVID-19 has highlighted the importance of digitization across all areas of the economy and society. New technologies have helped businesses and public services to keep functioning and have made sure that international trade could continue. It is expected that, in the long run, the pandemic will have triggered permanent social and economic changes: more remote working, e-learning, e-commerce, e-government. It has, therefore, become imperative for businesses and governments to invest in digitalization.

The twin transitions to a green and digital Europe remain the defining challenges of this generation. This is reflected throughout the Commission’s proposals, which stress that investing in digital infrastructure and skills will help boost competitiveness and technological sovereignty.

Implications for the digital sector

A new instrument, the Solvency Support instrument would be primarily aimed at countries hit hardest by the crisis and unable to provide state aid to their most vulnerable sectors. The distribution of this ‘immediate and temporary’[1] tool will also aim to prioritize green investment according to the Commission. While welcomed by poorer countries the instrument might not have the desired effect unless agreed upon and deployed quickly by the Member States.

The Strategic Investment Facility will be used to promote the green and digital transitions by investing in 5G, artificial intelligence, the industrial internet of things, low CO2 emission industry and cybersecurity. Since such investments might become significantly riskier in the aftermath of the pandemic, the Commission stands behind a common European approach to provide the crucial long-term investments for companies implementing projects of strategic importance. The Strategic Investment Facility will take a more forward-looking approach by focusing on ‘projects relevant for achieving strategic autonomy in key value chains in the single market.

The Digital Europe Programme will be used for the development of EU-wide electronic identities and for the building of strategic data capabilities, such as artificial intelligence, cybersecurity, secured communication, data and cloud infrastructure, 5G and 6G networks, supercomputers, quantum and blockchain. The Commission has managed to withstand the significant pressure from Member States to reduce the funding of the Programme and the digital transition remains one of its key priorities.

In terms of financial inputs, the digital sector would be affected by two of the newly proposed taxes, aimed at funding the Commission’s so called ‘own resources’ used to repay the recovery package. The new digital tax would come into play at EU level if no global solution could be reached at OECD level. If the tax is applied to companies with an annual turnover higher than €750 million, it could generate up to €1.3 billion per year for the EU budget. The other relevant provision is the new corporate revenue tax, which if applied according to the same principle as the digital tax at a rate of 0.1 percent could generate up to €10 billion annually.

The Commission tried to introduce a European digital tax last year but its proposal was blocked by several Member States. The chance of such a proposal being accepted at this date appear slim as unanimity is required and Ireland, amongst others, has been adamantly against it. However, with the departure of the UK who had previously provided strong backing for Ireland’s opposition, some form of digital taxation being accepted remains a possibility. The new corporate tax was also previously unsuccessfully introduced by the Commission in 2016 and would be aimed at ‘companies that draw huge benefits from the EU single market and will survive the crisis.’[2] The chances of the proposal being accepted are also relatively low with countries such as Ireland, Denmark, Luxembourg and the Netherlands strongly opposing it. The proposal might also provoke a ‘race to the bottom’ phenomenon where companies relocate to countries willing to provide them with the most favorable business conditions. While both taxes are facing strong opposition from some Member States, the alternative of increased national contributions might convince leaders that accepting a form of these levies would be the more politically savvy option.

In conclusion, the new EU budget proposal creates new opportunities and challenges for the digital sector with the potential application of new pan-European taxes but also with additional funding devoted to digitalization, increased connectivity and sustainable value chains. The Coronavirus pandemic has demonstrated the increasing importance of digitalisation for the daily functioning of the economy and the Commission’s proposal reflects that through a series of digital political priorities. Increased connectivity, investment in strategic digital capacities (artificial intelligence, cybersecurity, data and cloud infrastructure, 5G and 6G networks, blockchain and more) building a real data economy and legislative efforts on data sharing (a EU-wide Data Act), as well as a thorough reform of the single market for digital services (Digital Services Act expected in late 2020). The combination of budgetary provisions and policy priorities makes the moment beneficial for a transition to online business models, a trend which has appeared during the pandemic but is expected to remain for the next few years.

[1] Annex to the Commission Budget Communication, p 6.

[2] Commission Budget Communication, p 15.

Why now is the time to embed European affairs in your organization?

Author:

Margreet Lommerts

Managing Partner at Dr2 Consultants

More than ever, it is important to have a focused and effective European Affairs Strategy and structure in place to effectively contribute to the (re)shaping of the European economy for the next decades. Now is the time for organizations to see EU affairs no longer in isolation but as an integral part of their Corporate Affairs Strategy.

Soon after the start of the new European Commission at the end of 2019, we could already see the outline of the agenda of Commissioner President von der Leyen. The Commission’s Green Deal – published on 13 December – presents an overarching growth strategy to achieve a green transformation and climate neutrality of the economy.

Before the realization of tangible proposals for the green and digital transformations of the EU economy, COVID-19 turned the Commission into full crisis mode. Priorities shifted and the Commission and Council of the EU dedicated their work on drafting a comprehensive recovery plan from the health and economic crisis. It will not come as a surprise that a green recovery and the digital transformation will continue to be prioritized and play a central role in relaunching and modernizing the EU economy. According to the Commission, the trillions of euros for the recovery should be spent in a clean, competitive, resilient, and inclusive economy for the 21st century, into a new economy.

As the Commission is formulating its economic and green recovery plan, there is an enormous momentum for organizations to engage with EU institutions in Brussels and to play a role in the shaping of the new economy which will have a huge impact on all businesses.

Looking at the transport sector, it is clear that the demand for mobility and individual transport is changing due to the COVID-19 crisis. The European transport sector faces the great challenge of regaining consumer confidence while stimulating economic growth. According to the Commission, green and digital transitions are at the center of the recovery to create new jobs, remain internationally competitive and bring the sector in line with European climate goals. The Commission aims to better coordinate modes of transport and to encourage the use of sustainable fuels.

In addition, the European energy market will be heavily impacted by the EU’s climate ambitions. The European solar and wind energy market is expected to shrink by about 30% because of disruptions in the logistics chain, delays in projects and stricter financing conditions. As a result, the realization of the EU’s climate targets for 2030 are in jeopardy. This means that acceleration must take place to achieve the EU’s green ambition. The Commission is expected to make additional funding available for sustainable industrial projects and technologies (e.g. carbon capture and storage, relaxation of state aid rules, and alignment of energy taxation with climate ambitions with the aim of getting innovative projects off the ground and scaled up.

As an effect of the COVID-19 crisis, the digital transformation of more “traditional” businesses has definitely accelerated, like brick-and-mortar shops, some of which probably had no online presence whatsoever, maybe not even a Facebook or Google page, before the outbreak. In order to continue operating in a full lockdown situation, these businesses have had to quickly “go online”, either individually or in cooperation with other similar businesses or by relying on the services of online platforms such as e-commerce marketplaces.

As the Commission, Members of the European Parliament (MEPs), and Member States are actively reaching out for industry input, it is important for these businesses to get involved and make their voices heard at EU level, so that they can contribute to the shaping of EU policies that can actually benefit them.

Even though advocacy in these challenging times may not seem top priority and will take more time, the EU institutions are calling for input and involvement from industry which is a prerequisite for future-proof legislation.

Dr2 Consultants has a proven track record in supporting organizations to become more effective in their European Affairs by providing support in:

  • Identifying the role of European Affairs within the current structure and develop the ideal proposition for your organization;
  • Defining a targeted European Affairs strategy with key objectives;
  • Providing tools and know-how on how to execute the strategy successfully;
  • Creating effective internal structures.

For more information or to get in touch click here.

Brexit: impact of the COVID-19 crisis and the latest negotiatons rounds

During the last two months, the world has come to a stop because of the worldwide COVID-19 pandemic. Trade negotiations have not been exempted, and the EU-UK negotiations have been severely affected. As the virus broke out in Europe, the EU’s chief Brexit negotiator Michel Barnier tested positive for the coronavirus and only a day later the UK chief Brexit negotiator, David Frost self-isolated, together with other key members of the negotiation teams. This obviously casted a shadow of doubt on the future of the negotiations, when expectations were already quite limited concerning what could be achieved in such a short amount of time.

Despite the major disruption, and the delay taken in the negotiations, the EU and the UK resumed the Brexit discussions on 15 April. During that call they agreed on negotiating rounds lasting a full week during the weeks of 20 April, 11 May and 1 June.

After the negotiations round of 20 April, Michel Barnier immediately expressed his disappointment regarding the progress of the talks, specifically on key issues such level playing field and fisheries. The UK, too, recognized the lack of progress on governance and level playing field and stressed that there cannot be any deal until the EU drops its insistence on imposing conditions on the UK which are not found in any other EU trade agreements.

Unfolding a blaming game between the UK and the EU, where Britain accuses the EU of treating the UK as “unworthy” partner in the negotiations, Michel Barnier blaming the UK for not being realistic and EU Trade Commissioner Phil Hogan adding that the UK would be ready to accept a no-deal, while blaming the failure to reach a deal on the impact of COVID-19 on the negotiations

However, according to Frost, a comprehensive free-trade agreement is within reach, alongside individual agreements on issues such as law enforcement, nuclear energy, and aviation. On 19 May the UK Government published 12 legal texts on several of the above mentioned issues which will be the basis of the last negotiations rounds in June, following the EU’s publication its own draft trade deal earlier this year.This new UK text appears to be both surpringly ambitious in certain areas (for example, equivalence provisions on sanitary and phytosanitary measures and technical barriers to trade) and less surprinsingly, lacking ambition on regulatory cooperation and level playing field.

Extension of Brexit?

As stated above, there will be only one additional negotiation round before the agreed high-level stock-taking conference, where the UK and the EU are supposed to determine whether enough progress has been made or if an extension to the transition period is required in order to reach an agreement.

Such an extension would have to be requested by the UK Government, and agreed by the European Council before 1 July. However, the UK has consistently made clear that it will not ask to extend the transition period as it would only prolong the negotiations, business uncertainty, and delay the moment at which the UK can take back control of its sovereignty.

With the lack of progress, how the events will unfold in the coming two months remain extremely uncertain, while pressure on both sides of the channel grow in favor of an extension.

EU consultation on Artificial Intelligence: seizing the business opportunity

With its new ‘Shaping Europe’s Digital Future’ Strategy, the European Data Strategy and a White Paper on Artificial Intelligence, all published on the same day (19 February 2020), the European Commission led by Ursula von der Leyen is fully committed to digitalizing our society. Zeroing in on the AI White Paper, it is clear that the Commission tries to find a delicate balance between building both an ecosystem of excellence that supports the development and uptake of AI and an ecosystem of trust where AI is also regulated and safe for everyone. The European Commission has already undertaken quite some work in defining its approach to AI and in consulting stakeholders. It is now proceeding with an official written consultation, seeking feedback on the White paper through a questionnaire.

While the European Commission has the prerogative to initiate the above ideas and strategies, the European Parliament has not stood still in the past couple of months and has proactively, and extensively, positioned itself and defined its priorities. Most notably, the Parliament’s Legal Affairs Committee (JURI) is working on multiple AI reports, focused on the technology’s ethical aspect, its civil liability regime and intellectual property rights for the development of AI technologies. Furthermore, also the Parliament’s Culture and Education Committee (CULT) is working on its own report on AI applications in education, culture and the audiovisual sector, and a EP Resolution has been drafted on automated decision-making processes and ensuring consumer protection and free movement of goods and services.

 

While the discussion around AI at EU level seemed to have stemmed exclusively from the new Commission’s strong will to act on this issue, since then feedbacks from civil society, NGOs, companies and others, have been highly requested to shape further the future framework.

The latest opportunity for stakeholders to contribute to the discussion is the Commission’s Consultation on the White Paper on Artificial Intelligence, closing on 14 June.

The questionnaire explores certain aspects of the White Paper, including specific actions to build an ecosystem of excellence, options for a regulatory framework for AI and further consultation on the question of safety and liability aspect of AI.

To zoom in on a specific and rather important aspect of the questionnaire for businesses, the Commission is seeking feedback on whether the introduction of new compulsory requirements should be limited to high-risk applications, and whether the current definition and criteria for this risk-based approach is the right way forward. New requirements and standards would regulate aspects such as training data, human oversight and so on. In addition, the European Commission is seeking feedback voluntary labelling for any other AI-powered services that could be qualified as “low-risk”. The intention and content of such voluntary labelling scheme is still fully open for discussion.

There are two key opportunities for businesses here through this process, that should not be overlooked:

First, this should be seen as the perfect opportunity to question, understand, assess and if necessary, improve companies’ practices when developing or using AI in their daily activities. The Commission and Expert Groups have developed various tools such as the White Paper, but also the  assessment list of the Ethics Guidelines for Trustworthy AI., that can guide this type of exercise. Do we allow for human oversight? Does the data we use could lead to biased decisions? Would we benefit for a voluntary label or other form of self-regulation? Those are some of the questions that companies operating in the EU could ask themselves to stay relevant in the market.

Second, share companies should share their experience with policymakers to ensure that a new EU legal framework does not hinder business activities or innovation beyond what is necessary to protect consumer and fundamental rights, and to ensure that any new legal framework does not create legal uncertainty or unnecessary red tape. Referring once again to the risk-based approached, the possible evolution of the qualification and criteria for “high-risk” use can have a significant impact on companies. Stakeholders have an opportunity to shape rules that could ensure the EU remains an open, competitive, and innovative market.

There have been certain voices calling for a reassessment of the Commission’s plans in relation to AI under the new circumstances created by the COVID19 outbreak, which could shed new light on the costs of not using AI-powered solutions. The Commission has however clearly insisted on the fact the questionnaire would be the perfect opportunity to reflect further on what a future regulation should look like to ensure that AI fulfill its promises for society.

Reinstating the European transport sector

Following weeks, during which containment measures rapidly succeeded each other, the focus of the EU institutions is now on shifting towards re-establishing transport services and connectivity in the EU. The relief measures of 8 May (more information below) and the package of guidelines of 13 May and recommendations are considered to be important milestones in the recovery of the sector.

Nonetheless, the recovery phase is far from crystallized. Important discussions are still taking place in various European Parliamentary committees and Council configurations, focusing amongst others on maintaining a level-playing field between the different modes of transport, safeguarding passenger rights (e.g. reimbursement of tickets) and aligning the recovery measures with the EU’s climate objectives.

The Commission is expected to present a new proposal on the Multiannual Financial Framework (MFF) for the period 2021-2027 on 20 May, although this is not a definitive date. The amount of the overall budget and the allocation of funds will provide more clarity about the financing of the recovery of the transport sector.

Herewith you can find an overview of recent contingency and recovery measures in the transport sector. For a detailed analysis of the developments below, please get in touch with us via our website.

Transport relief measures

The European Commission is working together with Member States on transport relief measures, covering all modes of transport, which the European Parliament is expected to approve during its extraordinary plenary session of 13-15 May. Among the measures are (1) an aviation relief package, (2) an omnibus legislative proposal for the extension of certificates and (driving) licenses, (3) the postponement of the transposition deadline of the Fourth Railway Package and (4) an amendment to the Port Services Regulation, which allows reduced infrastructure charges in the maritime sector.

Communication on lifting travel restrictions

On 13 May, the European Commission presented a package of guidelines and recommendations to advise Member States on gradually lifting travel restrictions and allow tourism businesses to reopen, after months of lockdown, while respecting necessary health precautions. The Commission’s communication consists of several documents, including:

  • A common approach to restoring free movement and lifting restrictions at EU internal borders in a gradual and coordinated way;
  • A framework to support the gradual re-establishment of transport whilst ensuring the safety of passenger and personnel;
  • A recommendation which aims to make travel vouchers an attractive alternative to cash reimbursements for consumers;
  • Criteria for restoring tourism activities safely and for developing health protocols for hospitality establishments.

These Commission guidelines are non-binding, as Member States can decide unilaterally on border controls and restrictions. However, the Commission aims to coordinate their efforts to achieve the freedom of movement as much as possible by facilitating cross-border coordination.

Commissioner Timmermans in TRAN Committee

On 11 May, an exchange of views was held in the European Parliament’s Committee on Transport and Tourism (TRAN) with Executive Vice-President Frans Timmermans on the future of the transport sector in the framework of the European Green Deal and in the context of economic recovery from the COVID-19 pandemic. Mr. Timmermans stated during the discussions that:

  • Serious investments are needed to maintain a strong EU transport sector, including private investments, to save jobs and successfully achieve a zero-emission society by 2050;
  • Actors in the transport sector receiving financial or state aid from Member States, should be compelled to ‘give back to society’ in return for this aid, such as increasing efforts in the field of sustainability;
  • The European Commission will conduct an impact assessment in September 2020 to further analyze raising the emission reduction goal for 2030 from 50% to 55%.

Read summary

Commissioner Vălean in ENVI Committee

The European Commissioner for Transport Adina Vălean exchanged views on 11 May with the Environment, Public Health and Food Safety (ENVI) Committee of the European Parliament on sustainable transport after the COVID-19 pandemic. The main takeaways of the discussions were:

  • The recovery phase will focus on making transport smarter and cleaner;
  • The European Green Deal objectives must be sustained, Europe must stay ambitious;
  • In the context of the debate on conditionality to receiving state aid, the Commission will introduce transparency requirements for large companies, to report how the aid helps to meet European ambitions on green and digital transitions;
  • On passenger rights, right of reimbursement is still a primary right. A voucher system could be introduced, but the passenger will always have the right to be reimbursed.

Read summary

Dr2 Consultants hosts webinar on competitiveness of transport sector post COVID-19

Main takeaways

The COVID-19 outbreak has seen an unprecedented impact on the transport sector in the EU. Due to national containment measures, travel restrictions and the closure of border crossings, passenger transport is at a standstill and trade flows are severely impacted. In order to help EU citizens and businesses, the Commission has issued several contingency measures to support the transport sector, e.g. by identifying green freight lanes, issuing guidelines on passenger rights and allowing financial relief under the temporary state aid framework.

In this context, Dr2 Consultants organized a dedicated transport webinar on 7 May 2020, focusing on the question how to reinstate the EU’s transport industry in a post COVID-19 era, in order to ensure the transport sector can enable economic growth, secure jobs, increase global competitiveness and allow people and goods to move across Europe and beyond. Mr. Daniel Mes, Member of the Cabinet of Executive Vice-President on the European Green Deal, Frans Timmermans, responsible for the transport portfolio, and Mr. Jan-Christoph Oetjen, Member of the European Parliament (Renew Europe) and Vice-Chair of the Committee for Transport and Tourism took part in the panel discussion and shared their views on the subject.

 

The main takeaways from the webinar are:

  • The Commission is working on a coordinated exit strategy in which all modes of transport are covered, including practical advice on how to restart operations while ensuring the safety of the passengers;
  • It is crucial that the transport sector returns to its old strength and becomes even more resilient. It is a joint effort by the EU and its Member States to ensure the European transport sector remains competitive on a global level;
  • Mr. Mes highlighted the need for political guidance when national measures are taken to ensure consistency in sectoral investments. The transport sector will be dependent on both public as well as private investments, which the Commission will aim to mobilize;
  • Both speakers highlighted that transport will be one of the main pillars in the green recovery of the European economy. Mr. Oetjen emphasized the need for using a mix of transport modes based on their characteristics and respective advantages. Mr. Mes stated that it is key to ensure that the recovery of the transport sector is green recovery, and conditions can be attached to financial aid received by the sector.

As the webinar was recorded, please find the playback link here.

As a next step, the Commission is expected to publish a follow-up to its ‘European roadmap towards lifting coronavirus containment measures on Wednesday 13 May, which will entail a broad package of recommendations aimed at reinstating connectivity and tourism. The package will include a Communication on tourism, protocols on health and safety for main tourism locations, guidance on safe and healthy resumption of passenger transport and guidance on lifting of international borders. The package is also expected to include an assessment of the application of the temporary restriction on non-essential travel to the EU.

COVID-19 services

The fight against the spread of COVID-19 has unprecedented consequences for the daily life of almost everyone and puts pressure on the global economy. The crisis leads to questions and uncertainty, while companies try to anticipate and mitigate the impact on their daily business operations. Dr2 Consultants offers clarity to companies during the COVID-19 crisis. Please check out our webpage to explore the possibilities for your company.

New Commissioner for Transport strives for decarbonization and multimodality

With the confirmation of the Romanian Adina-Ioana Vălean as Commissioner-designate for Transport, the new College of Commissioners is now complete and awaits final confirmation of the European Parliament’s plenary on 27 November. The soon-to-be Commissioner for Transport reiterated during her parliamentary hearing that the transport sector needs to become more sustainable and cut back CO2 emissions. According to Vălean, the European Commission will have to strike a balance between applying the polluter pays principle while maintaining the competitiveness of the industry. What is the outlook for transport according to Vălean?

Reducing emissions in most polluting sectors

Both the maritime and aviation sectors will need to cut CO2 emissions significantly in the next decades to comply with the climate objectives as set out in the Paris Agreement. According to Vălean, there are good reasons to include the maritime sector in the EU Emission Trading System (EU ETS). Moreover, she mentioned plans to reduce the free allowances in the EU ETS for aviation and ensuring the sector’s compliance with the global system for offsetting emission CORSIA. The Single European Sky legislative file, which is currently blocked in the Council of the EU, was mentioned as important to move forward with as it can reduce congestion and emissions in aviation.

The Transport Commissioner will cooperate closely together with Frans Timmermans, Executive Vice President and coordinator of the EU Green Deal, to work out the details for various upcoming initiatives. Moreover, the European Commission will closely follow developments at global level, most notably the International Maritime Organization and the International Civil Aviation Organization, to pursue global solutions. However, Vălean stressed that the European Commission is not afraid to bypass international organizations in order to maintain leadership in climate change.

Focusing on sustainable transport modes

According to the Commissioner, multimodality is a key instrument for accelerating decarbonization of transport. She stated that railways are at the centre of multimodality and sustainable transport. She urged for more investments and the completion of the Trans-European Transport core Network by 2030. Moreover, she will use opportunities in the field of digitalization to further deploy the European Rail Traffic Management System, improve multimodal ticketing and exploit the potential of Mobility as a Service. On road transport, the Commissioner hopes to attain more investments in e-mobility and recharging points for electric vehicles.

What’s next

The proposed College of Commissioner is still subject to a plenary vote by the European Parliament in Strasbourg on 27 November. Moreover, the United Kingdom is also expected to nominate a Commissioner, but up until this moment they have refused to do so. Following a positive result, the European Council will formally appoint the Commission through Qualified Majority Voting in order to take office on 1 December 2019. New legislative initiatives are expected to be published early 2020 and are expected to have significant impact on stakeholders across the transport sector. Do you want to know more about how the policy agenda of the European Commission will impact your business and daily operations? Please get in touch with us to know more.

Click here to download the 5 key takeaways from Adina-Ioana Vălean’s hearing.

Brexit: Momentum? From a deal to elections

In the last two weeks, the Brexit debate has gained momentum. For starters, on 17 October the European Union and the United Kingdom reached an agreement on Brexit. The changes to the Withdrawal Agreement and the Political Declaration have been made in the context of significant developments in the Brexit debate: the removal of the backstop and the negotiation of a comprehensive Free Trade Agreement. Consequently, Northern Ireland will remain in UK customs territory, but the UK will be responsible for enforcing EU customs procedures. Furthermore, Northern Ireland representatives can vote on continuation of the special arrangement by simple majority 4 years after the end of the transition period.

After the European Council voted unanimously to accept the new deal, the UK Members of Parliament (MPs) gathered for the first time in 37 years on a Saturday to also vote on the new Brexit deal. However, the deal was pre-empted when MPs adopted the Letwin amendment, which requires the Prime Minister to ask for an extension, allowing MPs more time to pass the full Brexit legislation and properly scrutinize the deal. A few hours later European Council President Donald Tusk confirmed he had received three letters: a letter – that was, however, not signed by Boris Johnson – asking for an extension of the Brexit deadline until 31 January 2020; a second letter written by Sir Tim Barrow, the UK’s permanent representative to the EU, explaining that the first letter was required under the terms of the Benn Act; and finally a third letter from the Prime Minister, regretting the decision of the UK parliament to ask for a delay. The EU reacted that it will not decide on (the length of) a delay before the House of Commons discusses the new Brexit deal, but it is pretty sure that they will accept an extension.

House of Commons Speaker, John Bercow, ruled two days later, on 21 October, that he was not going to permit MPs to hold another vote on the Withdrawal Agreement and the Parliamentary Declaration that day. Instead, the House of Commons voted on 22 October on two other proposals. It first approved the Withdrawal Agreement Bill (WAB) in the second reading, a bill that passes the Withdrawal Agreement into UK law and  gives the government permission to ratify it. However, MPs then rejected the government’s proposed timetable, which would have required MPs to debate and sing off on the Bill in three days. The government’s defeat on the legislative timetable has important implications. First, it is now highly unlikely that the UK will exit the EU on 31 October, and second, MPs will now have more time to propose amendments to the Bill. Johnson decided, after the second vote, to pause the legislation “until the EU has made its intentions clear” regarding the extension that would be granted. At this stage, it is not yet clear if there will be a short delay or a long one, until the end of January.

In this turn of events, Boris Johnson indicated on 24 October that he wants to organize early elections on 12 December. In this way he wants to put extra pressure on the parliament to approve his Brexit agreement. However, the opposition only wants to accept new elections if the European Union agrees to a long delay for the Brexit. A vote on the elections will take place on Monday 28 October.

Time is running out because the new President of the European Commission, Ursula von der Leyen, said that the UK must name an EU commissioner to serve in Brussels if the EU grants a delay to the 31 October Brexit deadline.

Digital Ambitions in Flanders

The Flemish Government Agreement 2019-2024 was announced on Tuesday 1 October and was negotiated by N-VA, CD&V and Open Vld. Although the coalition agreement does not contain a separate chapter on digital topics, the new Flemish Government is committed to making innovation and digital transformation a priority in its policies. To achieve this, the agreement emphasizes that Flanders must raise to the top of the digital infrastructure. Moreover, the Flemish Government also wants to take the lead in experimenting with new digital applications and digital transformations in its services.

Lifelong learning

The agreement stresses the importance of digitalization to stimulate a culture of lifelong learning. Therefore, the new Flemish government wants to set up a Lifelong Learning Platform and aims to use smart data to proactively make people aware of career opportunities and threats on the labor market. In addition, embedded in the VDAB (Vlaamse Dienst voor Arbeidsbemiddeling en Beroepsopleiding, Flemish Office for Employment and Vocational Training) career platform, the Flemish government is developing a smart digital tool that will help Flemish people find their way in the private and public labor market. Citizens who do not have sufficient digital skills will be proactively tracked and supported to increase their self-reliance. However, already during the formative years in high school, the government wants to have an eye for digital innovations in the “classroom of the future” and for the corresponding IT applications. In addition, courses should be substantively up-to-date and respond to the reality of tomorrow, certainly also with regard to the necessary digital and transversal competences.

 

Artificial intelligence

Artificial intelligence will play an important role in the digitalization of Flanders. Therefore, the new Flemish Government is preparing an integrated plan for further digitalization of Flanders and the valorization of artificial intelligence. With this plan, the Flemish government wants to increase support for the policy programs and projects for Artificial Intelligence, Cyber Security, I-Learn and Mobilidata and ensure that these remain optimally tailored to the needs of Flemish companies and society as a whole. In addition, the government agreement states that the quality of life will also increase thanks to the efforts of AI. The Flemish AI policy plan fulfills the ambition to put Flanders on the world map in this strategic domain through research, training and practical applications in companies.

Digital security

The new Flemish government is also concerned about its digital security. Through the cyber-security policy plan, aimed at research, practical applications in companies and training, the coalition of N-VA, CD&V and Open Vld wants to develop in particular a resilient digital economy in Flanders. In this regard, also privacy is very important according to the government agreement. The government will, in accordance with international evolutions, develop standards for pooling, opening and exchanging data, with the utmost respect for user privacy. In addition, in the rapidly evolving media society where the impact of (social) media on society is enormous, the importance of media literacy and digital literacy should be increased to guard against fake news. Therefore, the Flemish government will continue to implement the media literacy policy together with the Knowledge Center Media Literacy so that they are able to pursue a coordinated policy throughout the media sector with other policy areas.

The ambition of Flanders is clear. The new government wants Flanders to be the world reference for a number of innovative technologies and sectors and to be a pioneer in digital entrepreneurship. Flanders must be the testing ground for companies and citizens who want to taste the digital applications of the future. The question remains, however, how these ambitions will be financed and how these priorities will be implemented concretely in order to give Flanders a leading (digital) position in the world.