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Back to work: EU legislative proposals – 2020 outlook

As the summer recess is coming to an end, the European Commission will start preparing the EU legislative proposals that are still in the pipeline for 2020, according to the work program. As the second semester of the year will be a packed one, it is key to timely prepare input in order to have your priorities heard.

Following our blog on the EU initiatives that were open for feedback over summer, Dr2 Consultants now guides you through the main remaining proposals for 2020 in the transport, sustainability and digital sector. You can find these below in that particular order.

Transport up-to-speed with the new decade

Emerging developments such as the decarbonization of transport, digitalization and the global COVID-19 pandemic have stressed the need to review the Trans-European Transport Network (TEN-T) Regulation. The TEN-T policy aims to develop and implement a Europe-wide infrastructure network linking ports, highways, airports and railways. With the upcoming revision of this EU legislation, the European Commission aims to bring TEN-T up-to-speed with the ongoing green and digital transitions. The Commission is expected to put renewed emphasis on the strengthening of urban nodes, the update of infrastructure requirements, and the alignment of the TEN-T policy with the EU’s environmental policies.

The Commission is currently finalizing the evaluation of the TEN-T Regulation. The different modes of transport are still invited to contribute to dedicated case studies in the course of September. The European Parliament is currently preparing an own-initiative report on the TEN-T policy. The Transport & Tourism committee will discuss the draft report on 3 September. The Commission is expected to publish a roadmap and a public consultation later this year. A legislative proposal is foreseen for summer 2021.

In addition to the TEN-T, the Commission is expected to publish the EU’s Strategy on Sustainable and Smart Mobility. With this strategy, the Commission intends to adopt a comprehensive strategy to reduce transport-related greenhouse gas emissions by 90% by 2050, and to ensure the transport sector is fit for a clean, digital and modern economy. A public consultation has been opened in the summer and is open for feedback until 23 September.

Visit our Transport page.

Green energy and sustainable production

The energy-focused sibling of TEN-T will also be subject to a revision this year. The Trans-European Energy Network (TEN-E) Regulation aims to link European electricity, gas and oil infrastructure into a single network, consisting of nine corridors. TEN-E focus areas are smart grids, electric highways and the cross-border carbon dioxide network. This EU legislation is considered to be instrumental to realize the renewable energy objectives across the Union, for example in stimulating the hydrogen economy. The Commission will come up with a legislative proposal for a revised TEN-E regulation.

European Green Deal Impact Scan

In addition, several EU legislative proposals will be initiated that will have an impact on producers. Proposals that tackle packaging waste, deforestation and industrial emissions are currently in the pipeline. Striving towards a circular economy, the Commission will promote waste reduction by reviewing the Packaging Directive. This may include improved design standards and increased recycled content in packaging materials. Possibly, packaging design standards will also change as a result of the Deforestation Regulation, which could include labelling requirements and verification schemes to increase the transparency of supply chains. Finally, the Industrial Emissions Directive may require additional sectors, such as farms and extractive industries, to implement available sustainable production techniques. Public consultations on the three initiatives are upcoming this year, and the respective legislative proposals are scheduled for 2021.

Visit our Sustainability page.

Trustworthy AI and shared data spaces

Artificial Intelligence (AI) is increasingly affecting our society. Applications can bring about revolutionary changes in healthcare, governance, research, production and many other areas of our society. On the one hand, opportunities such as the precision of diagnosis, the prevention of car accidents and more efficient farming are promising. On the other hand, AI carries several potential risks, including racial, gender or other discriminatory biases, infringements of our privacy and reduced governance accountability.

Amidst global competition, the European Commission aims to distinguish the EU approach with its emphasis on European values. The EU strategy must embrace opportunities, while protecting citizens from potential harmful impacts. The European approach for trustworthy artificial intelligence will propose ethical requirements for AI, following the general strategy presented in the White Paper, stakeholder consultations and the draft guidelines presented by the High-Level Expert Group on AI in 2018. The initiative will be a review of the draft guidelines, on which stakeholders will be invited to deliver input through the upcoming roadmap.

Another aspect of the EU digital strategy is the regulation of the growing volume of data. Data can give valuable insights that drive innovation in areas such as medicine, mobility and policy-making. The creation of common European data spaces will allow citizens, businesses and organizations to access non-personalized data from different Member States, pooled across different key sectors. European privacy rules (GDPR) and competition law continue to be applied. Although the roadmap has already closed, input can be delivered through the upcoming public consultation. Adoption by the College of Commissioners is expected by the end of 2020.

Visit our Digital & Tech page.

Next steps 

Commission proposals on the EU legislative initiatives mentioned above are expected by the end 2020, or in the course of 2021. As the Commission is preparing for a proposal-packed final quarter, it is key to reach out early to have your interests set on the agenda.

Want to know more about the upcoming initiatives, COVID-19, or other files that might affect your business? Please contact Dr2 Consultants to see what we can do for you.

Summer recess – what’s next?

As EU leaders agreed on a new proposal for the new Multiannual Financial Framework and the Recovery Plan on 21 July, the European Parliament was given good food for thought over its summer recess. However, the new long-term budget is not the only priority on the EU agenda. The Commission is already chewing on a series of proposals to be expected later this year and in 2021. In fact, now is the moment to deliver input on some key, planned legislative proposals, as the Commission launched a series of public consultations that are open until after summer. Let’s have a look what is next after the 2020 summer recess.

Transport: smarter and greener

The green and digital transition as the twin priorities of the Von der Leyen Commission are also reflected in the upcoming transport initiatives. To deliver the ambitious European Green Deal climate neutrality objective, the mobility sector needs a 90% emission reduction by 2050. The Strategy for Sustainable and Smart Mobility, expected towards the end of the year, will be the overarching strategy for the delivery of the twin transitions in this area. Stakeholders can contribute to the public consultation until 23 September.

Expectedly, the strategy will include the integration of alternative fuels, in line with the recently published hydrogen strategy that already outlines a pathway for the deployment until 2050 in all modes. The strategy is also complemented by the upcoming FuelEU initiatives for the maritime and aviation sector. The FuelEU Maritime initiative, aimed at boosing alternative fuels in shipping specifically, is open for feedback until 10 September. The public consultation on ReFuelEU Aviation, initially planned for the first quarter of 2020, is still to be expected ahead of the Commission proposal this year.

Sustainability: a bigger role for tax

Taxation will become a more important instrument for the Commission to align consumer choices and business investments with its climate targets. On 23 July, public consultations on both the revision of the Energy Taxation Directive and the creation of a Carbon Border Adjustment Mechanism were launched. Having been unchanged since its adoption in 2003, the Energy Taxation Directive will be subject to a thorough review. The exact changes are yet to be determined based on the consultation outcome, however, what is clear is that it will include a correction of the minimum taxation rates for electricity, gas, and coal, as well as a tax exemption reduction for fossil fuels. The proposal, which is part of the European Green Deal, is scheduled for June 2021. The consultation is open for feedback until 14 October.

In addition, the Commission proposes a Carbon Border Adjustment Mechanism to prevent ‘carbon leakage’. This ‘CO2-tax’ internalizes emissions in the price of a product, so production does not shift to countries with lower climate ambitions. The exact instrument is still to be determined, and could take the form of an EU-wide import tax or an extension of the Emmission Trading System (ETS). The latter has already seen critical responses, as this may not be in line with WTO rules. The Commission plans to scrutinize the issue and present a proposal later this year. The revenues would directly contribute to the ‘own resources’ of the EU budget for the next seven years that would help finance the new €750 billion recovery plan. Stakeholders can deliver their contribution to the plan until 28 October.

Digital: fit for the COVID-19 reality

Following its pledge to make Europe ‘fit for the digital age’, the Digital Education Action Plan and the Digital Services Act are also high on the Commission’s agenda. The Digital Education Action Plan, due to be published in September this year, will be part of the Next Generation EU program. The COVID-19 crisis has seen schools and universities close their doors and increasingly turn to remote, digital teaching. The Action Plan aims to promote high-quality and inclusive education and training in the post-COVID digital reality. Feedback on the proposal can be delivered until 4 September.

Part of the Next Generation EU financing is the digital tax element of the Digital Services Act, to be presented by the end of 2020. The Digital Services Act is an attempt to regulate online platforms when it comes to illegal goods, product safety, political advertising and offensive content. The initiative may face intense debates before its approval, as previous attempts to implement an EU-wide Digital Taxation mechanism have so far been unsuccessful. The consultation remains open until 8 September.

Next steps

The Commission’s proposals on the above initiatives are expected before the end of 2020, except for the Energy Taxation Directive which is due in June next year. From the above-mentioned public consultations, it is evident that the European Commission is gearing up for a busy end-of-year period. Early (proactive) action is desirable for stakeholders that aim to represent their interests on these files, which will also be closely examined by the European Parliament and Council of the EU in 2021 (and later).

Want to know more about the upcoming initiatives, COVID-19, or other files that might affect your business? Please contact Dr2 Consultants to see what we can do for you.

The novelties of the new EU budget

On Tuesday, after almost five days of negotiations, the 27 Member States of the EU reached an agreement on a €1,074 trillion Multiannual Financial Framework (MFF), as well as a €750 billion Recovery Fund (Next Generation EU, or ‘NGEU’) for the period of 2021-2027.

The MFF sets out the EU budget for the coming seven years, setting funding priorities and dividing money amongst the different instruments. The long-term budget will, due to the COVID-19 outbreak, be accompanied by the so-called Recovery Fund called ‘Next Generation EU’. The NGEU will in part add additional funds to the existing European funding instruments, but also provide direct loans and grants to those Member States hardest hit by the pandemic.

Member States must leave behind their reservations on taxes and common debts

As was the case in previous EU budgets, Member States contribute a percentage of their gross national income (GNI) to the MFF. The funding of NGEU will, however, be unprecedented in the history of the EU, as it will be funded by the Union as a whole assuming loans on the capital markets. The EU-27 will borrow, through the European Commission, money from the capital markets. This means low interest rates, as all 27 Member States guarantee the loan.

Additionally, the loans will be repaid in part by raising the ‘own resources’ of the EU. These own resources will range from income from an EU-wide plastics tax to the introduction of a digital or financial transaction tax, a novelty in European tax policy where Member States traditionally firmly hold the reins.

Digital high on the agenda, or not?

The digital transition will remain one of the focal points of the EU budget. As such, important funding instruments such as Horizon Europe and Digital Europe are set to receive more funding compared to the current (2014-2020) budget, but less compared to the Commission proposal from May this year. The Digital Europe program, which finances the EU’s cyber defense and artificial intelligence development, will receive €6.80 billion during the coming seven years, a major increase compared to the millions it received in the previous financial framework. However, the proposed fund by the European Council is lower than the program was set to receive in the Commission proposal. Member States aim to streamline existing instruments into the InvestEU program. However, the new agreement downsizes the InvestEU budget to €8.40 billion compared to earlier proposals from the European Commission.

While the digital transition remains high on the agenda, the new EU budget does not draw exact parallels to the EU’s ambitiousness. While the current foreseen budget is higher compared to the current MFF, it lacks the firepower foreseen in the Commission proposal from May to push the EU to become a frontrunner in this area.

Sustainability as a main catalyst

The European Green Deal will also remain one of the main pillars of the EU budget in the European Council’s agreement. According to the new proposal, at least 30% of the total EU expenditure will have to contribute to climate objectives. The question remains exactly how the institutions will enforce the climate funding objective since the European Council remains very vague on the subject, a worry which is shared by the European Parliament.

In this context, the European Council invites the Commission to put forwards proposals for:

  • A carbon border adjustment mechanism, which will prevent the transfer of the production of goods to non-EU countries who happen to have less strict emission rules and ambitions;
  • A levy on non-recycled plastic waste, to be introduced in January 2021, of €0.80 per kilogram to discourage the generation of non-recycled plastic waste;
  • The revision of the Emission Trading System (ETS), to include a smaller amount of emission allowances in order to further boost carbon cuts and a possible extension to the maritime sectors.

Contrarily, the budget suffered several significant cuts during the negotiations in the sustainability policy area compared to the original proposal. For example, the flagship Just Transition Fund, intended to support carbon-intensive regions in the transition to a sustainable economy model, was heavily downsized from €40 billion to €17.5 billion.

Next steps

In order have the new EU budget operational by 1 January 2021, both the European Parliament as well as the national parliaments of the Member States need to approve the European Council’s proposal. However, both have voiced their skepticism towards the compromise that was reached. In the Member States, especially the national parliaments of the Netherlands, Austria, Denmark, Sweden and Finland are expected to take a critical stance. Starting September, we expect to have more clarity on the shape of next year’s budget. In an extraordinary plenary session on 23 July, the European Parliament passed a resolution voicing criticism of the EU budget deal in its current form.

Want to know more about the EU budget negotiations, COVID-19, or other dossiers that might affect your business? Please contact Dr2 Consultants to see what we can do for you.

All eyes on Berlin as Germany starts the Council Presidency

On 1 July, Germany took over the Presidency of the Council of the EU from Croatia, for the second half of 2020, which is already dubbed the ‘Corona-Presidency’. The upcoming six months will bring historic challenges as the management of the recovery from the current health crisis will coincide with some fundamental political choices in the EU, and the outcome will determine the future direction of European integration.

As one of the most powerful Member States of the EU takes over at this crucial moment in time, it will have to play multiple roles at the same time.

Crisis management

First and foremost, the German Presidency will have to play its role as ‘crisis manager’ in the context of the COVID-19 pandemic. Based on epidemiological developments and assessments, the German Presidency will seek to increase coordination in Europe to gradually return to a fully functioning Schengen Area. Furthermore, Germany is expected to lead the politically complicated negotiations on potentially expanding the list of third countries from which travel to the EU is allowed. These priorities will be central during the whole German Presidency mandate.

EU budget negotiations

Germany will also take an active part in managing the negotiations on the new Multiannual Financial Framework (MFF) 2021-2027 and the Next Generation EU Recovery Fund during the summer months. The main challenge will be to find common ground between the hard-hit Member States, such as Italy, Spain and France on the one hand, and the ‘frugal four’ – Austria, Denmark, the Netherlands and Sweden – on the other hand, with the latter group being against grants as part of the Recovery Fund. Germany will be directly responsible for the legislative work on the different sector programs within the MFF (e.g. Horizon Europe, Just Transition Fund and InvestEU) and the Recovery Fund, and will lead the trilogue negotiations with the European Parliament on the financial framework, once there is political agreement on the general features of the future budget. France and Germany expressed their ambition for a quick agreement by end of July, as European leaders are set to meet face-to-face on 17 and 18 July.

Brexit negotiations

With the Brexit transition period ending on the 31 December 2020 and the United Kingdom declining the opportunity to extend this deadline, the German Presidency will have yet another prospective challenge. Once an agreement has been reached at European Commission level, the Member States will have to give their consent. German EU ambassador Michael Clauss stressed that Germany will be exclusively focusing on “brokering agreements between the 27”.

The German Presidency program expresses the Presidency’s ambition for a comprehensive partnership between the EU and the UK. However, it also reads that the Member States will not accept an agreement that would distort fair competition within the Single Market. If there is an acceptable agreement before the end of the year, the German Presidency is expected to align Member States in its role as ‘Brexit-Broker’.

Work program

The work program sets out, in broad terms, the policy priorities for the second half of 2020. In general, Germany will prioritize the digital and green transitions throughout all of its activities. The German Presidency is committed to an innovative Europe based on three pillars: expanding the EU’s digital sovereignty, enhancing competitiveness and a sustainable and stable financial architecture. It will also ensure that the Green Deal’s implementation will contribute to the recovery from the COVID-19 pandemic in Europe.

The German Presidency will have an extremely challenging task of fostering European unity in the budget negotiations in the face of existing difficulties such as the COVID-19 crisis and Brexit. For more information on the German Presidency’s sector-specific priorities, please read our analyses of the German priorities in the fields of digital & tech, sustainability and transport:

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.

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.

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.

What will be the digital agenda of the next European Commission?

Between early leaks from DG CONNECT to the individual grilling of Commissioners-designate, the digital agenda of the next European Commission is slowly taking shape – even if key questions remain.

 Digital policies: who does what?

The cross-checking of somewhat blurry portfolio titles, mission letters, the Commission’s new organizational chart, the attribution of DGs and finally the Commissioners-designate hearings shed some light on who will do what to set the digital agenda in motion.

Margrethe Vestager’s hearing set the tone, with a number of questions and declarations on expected digital files (a chance Sylvie Goulard, Commissioner-designate for the Internal Market, did not get). The Vice-President for Digital and Commissioner for Competition also used this occasion to clarify (though without going into details) that the execution of the digital portfolio will be in the hands of her colleagues – allowing her to keep separate her two jobs – and avoid any clash between possible conflicting objectives.

So, who are the Commissioners in charge of digital policies?

Goulard’s rejection today by the European Parliament might lead to some reshuffling, but as it stands, the following Commissioners will contribute to the EU’s digital agenda:

  • Didier Reynders, Commissioner-designate for Justice, on topics such as GDPR and Artificial Intelligence;
  • Věra Jourová, Vice President-designate for Values and Transparency, on issues like illegal content and disinformation – possibly contributing as well to the Digital Services Act;
  • Mariya Gabriel, Commissioner-designate for Innovation and Youth, who also mentioned AI in her hearing, in addition to the importance of investing in education, research and innovation, and ensuring synergies between the three;
  • Paolo Gentiloni, Commissioner-designate for the Economy, that will inherit the work on the Digital Tax;
  • Valdis Dombrovskis, Executive Vice-President for “An Economy that works for people”, that will continue the work on Fintech, cryptoassets, cybersecurity…;
  • And of course, now, there’s a big question mark on who will take on the files assigned to Goulard, including the groundwork on the Digital Services Act, Artificial Intelligence, cybersecurity, digital education and so on.

On what topics?

The new Digital Services Act – which will include a revision of the 2000 Ecommerce Directive, has been high on the agenda of the tech sector, and is clearly high on the Commission’s agenda as well. For anyone that has been closely following these developments, the hearings did not reveal anything. The new act will “upgrade” the existing liability rules for platforms and try to find the right balance to avoid hindering a growing European platform economy. Jourová added to the discussion by focusing on the fight against illegal content and disinformation and the responsibility of platforms.

Artificial Intelligence has been mentioned many times, but not in great details. Vestager highlighted again what should be the EU’s approach to AI, and Reynders argued in favor of a very horizontal, “ethics-by-design” approach. Vestager also confirmed that something will come in the first 100 days, without concretely saying what will come and under which form – since a legislative proposal seems relatively improbable under such deadline.

Access to data was briefly mentioned, with Vestager highlighting that the EU might need to regulate the way that companies collect, use and share data, so it can benefit the entire society.

Digital Tax remains on the agenda, with Gentiloni supporting an international solution, but not excluding a European one if an agreement cannot be reached.

On competition, Vestager highlighted that competition rules needed to adapt to digitalization, especially with the development of the platform economy and technologies such as AI, where access to data is crucial. Vestager also declared, after her hearing, that “she will move beyond fines in her second term […] to look at other measures to ensure a fair playing field”.

Remaining on the topic of Big Tech, Valdis Dombrovskis also announced that the Commission was looking into Facebook’s Libra, and that a legislative proposal on such cryptoassets was to be expected.

Beyond policy, the hearings confirmed that the European Commission will have to deal with a fragmented and vocal European Parliament, especially on digital matters.

Download our infographic on Margrethe Vestager’s hearing here.