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European Commission Press Releases

WTO Boeing dispute: EU issues preliminary list of U.S. products considered for countermeasures

Vlad Poptamas

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Photo source: wingsherald.com
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The European Commission has today launched a public consultation on a preliminary list of products from the United States on which the European Union may take countermeasures in the context of the ongoing Boeing dispute at the World Trade Organisation (WTO).

The public consultation will last until 31 May 2019.

On 11 April 2019, the WTO adopted its final compliance report in the Boeing dispute, confirming that U.S. subsidies to Boeing continue to cause significant harm to Airbus, including lost sales. Today’s publication comes as a follow-up to that decision. The public consultation aims to gather feedback from stakeholders who may be affected by the planned measures.

EU Trade Commissioner Cecilia Malmström said: ”European companies must be able to compete on fair and equal terms. The recent WTO ruling on U.S. subsidies for Boeing is important in this respect. We must continue to defend a level-playing field for our industry. But let me be clear, we do not want a tit-for-tat. While we need to be ready with countermeasures in case there is no other way out, I still believe that dialogue is what should prevail between important partners such as the EU and the U.S., including in bringing an end to this long-standing dispute. The EU remains open for discussions with the U.S., provided these are without preconditions and aim at a fair outcome.”

The list published today covers a range of items, from aircrafts to chemicals and agri-food products (including everything from frozen fish and citrus fruits to ketchup), that overall represent around USD20 billion of United States exports into the European Union. At an earlier stage of this dispute (in 2012), the EU made a request to the WTO to authorise the adoption of countermeasures worth up to USD12 billion, equivalent to the estimated damage caused to Airbus by the U.S. support to Boeing.

Based on this request, it is however for a WTO appointed arbitrator to determine the exact appropriate level of countermeasures. The EU is taking steps towards requesting the arbitrator to resume its work. A final list, based on the products included in today’s list, will be drawn up by the EU taking into account the arbitrator’s decision in the near future.

Background

On 11 April 2019, the Dispute Settlement Body of the World Trade Organisation adopted the reports in which the Appellate Body, the highest WTO instance, confirmed that the U.S. has not taken appropriate action to comply with the WTO rules on subsidies, despite the many rulings against it in the course of this long dispute. Instead, it has continued unabatedly its illegal support of its aircraft manufacturer Boeing to the detriment of Airbus, the European aerospace industry and its many workers. In its ruling of 28 March 2019, the Appellate Body:

  • confirmed the Washington State tax programme continues to be a central part of the U.S. unlawful subsidisation of Boeing. This is a comprehensive programme scheduled to run up until 2040 with a continuous increase of subsidies expected throughout that period. Boeing will receive an estimated total of USD6 billion in tax savings for the period 2006-2040;
  • found that a number of ongoing instruments, including certain NASA and U.S. Department of Defence procurement contracts, research and development programmes, and South Carolina job tax credits, constitute subsidies that may cause economic harm to Airbus;
  • confirmed that Boeing continues to benefit from an illegal U.S. tax concession that supports exports (the Foreign Sales Corporation and Extraterritorial Income Exclusion, or FSC/ETI). This subsidy has already been qualified as prohibited, which means illegal under WTO rules.

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European Commission Press Releases

European Defence Fund: Statement by Commissioner Bieńkowska on the European Parliament’s vote

Vlad Poptamas

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Photo source: euractiv.com
Reading Time: 1 minute

 

The European Parliament endorsed today the provisional agreement reached by the co-legislators on the future European Defence Fund (EDF) for the next budget period from 2021 to 2027. The European Commission proposed the European Defence Fund in June 2018. Elżbieta Bieńkowska, Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs, said:

“I welcome today’s vote by the European Parliament. More defence cooperation in Europe is essential to address the growing global instabilities and cross-border threats to our security. It is clear that no country can do this alone. The endorsement of the European Defence Fund will allow us to significantly step up our defence cooperation and allow Europe to become a stronger security provider for our citizens.

The European Defence Fund marks a big step forward in European defence matters. It will strengthen European cooperation by encouraging joint investments and technological innovation in the defence sector. This will help to spend taxpayer money more efficiently and ensure Europe can benefit from the best interoperable defence technology and equipment. By promoting a strong and innovative defence industry, the Fund will strengthen EU’s strategic autonomy and technological leadership in defence.

The Fund will build on defence priorities agreed by Member States within the framework of the Common Foreign and Security Policy and ensure synergies with the Permanent European Structured Cooperation.

With today’s vote, a fully-fledged European Defence Fund is now on track to become a reality. I want to thank the European Parliament as well as all other EU institutions on taking fast and decisive action on this key political priority.”

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European Commission Press Releases

Capital Markets Union: European Parliament backs key measures to boost jobs and growth

Vlad Poptamas

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Photo source: euobserver.com
Reading Time: 3 minutes

 

The Commission welcomes the European Parliament’s final votes on legislation putting in place the building blocks of a Capital Markets Union (CMU).

This adoption of a substantial number of proposals constitutes another step forward in the completion of the CMU, one of the Juncker Commission’s top political priorities.

The Capital Markets Union project has been at the heart of this Commission’s ambition to boost growth in Europe, invest in innovation and promote the EU’s global competitiveness. With now 11 out of 13 proposals agreed, the CMU will become a true driver of investment in the Single Market, providing additional sources of financing to EU companies and opportunities for citizens to save for their future. The CMU channels investment to environmentally-friendly projects, thereby contributing to the EU’s sustainable and carbon-neutral agenda. A strong CMU is also necessary to complement the Banking Union in order to strengthen the Economic and Monetary Union and the international role of the euro.

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “The Capital Markets Union will enable companies to find more funding opportunities both domestically and across the Union and provide consumers with more choices to save for their future. Alternative market-based sources of financing are particularly important to finance innovation, entrepreneurship and start-ups, which are main engines of job creation. While the project will benefit all Member States, it will particularly strengthen the Economic and Monetary Union by promoting private risk-sharing.”

Jyrki Katainen, Vice-President responsible for Jobs, Growth, Investment and Competitiveness said:“The Commission has delivered on its commitment to put in place the building blocks of a Capital Markets Union by 2019. The CMU contributes directly to the Juncker Commission’s commitment to boost investment, jobs and growth by diversifying market-based finance for European companies. We have now laid the foundations for the CMU and efforts must continue into the next mandate so that businesses big and small, investors and savers can continue to reap the benefits.

Overall, all the adopted proposals will contribute to expanding the CMU’s objectives of innovative financing and creating more investment opportunities from the local to the European level. Each of them covers a specific scope of action:

Collective Investment Funds: By removing regulatory barriers for investment funds and diverging national rules, this proposal will increase competition and facilitate intra-EU distribution of investment funds, will giving investors more choice, better value and greater protection.

European Supervisory Authorities (ESAs) review: This review will make the European system of financial supervision more effective and efficient. Among many objectives, the reform will also guarantee that supervision of money laundering risks in the financial sector is pro-active and fast. It will ensure that rules are evenly enforced throughout the EU and give the European Banking Authority (EBA) a coordination role in the areas of anti-money laundering and terrorist financing.

Investment firms review:This revised legislation will ensure more proportionate rules and better supervision for all investment firms on capital, liquidity and other risk management requirements, while ensuring a level-playing field between large and systemic financial institutions. It will also strengthen and clarify equivalence rules for the provision of investment services by third country firms.

Covered bonds: This legislation will foster the development of financial instruments issued by banks to fund the economy across the EU, thanks to a harmonised EU framework.

Small and medium-sized enterprises (SMEs) growth markets: The rules adopted will make it cheaper and simpler for SMEs to access public markets including through a category of trading venues dedicated to small issuers.

Disclosure requirements on sustainable investments: As part of the Action Plan on Sustainable Finance, these rules will strengthen and improve the disclosure of “green” information by manufacturers of financial products and financial advisors towards end-investors.

European market infrastructure regulation (EMIR) 2.2: This legislation will ensure a more robust and effective supervision of central counterparties (CCPs) offering services to the EU. Ultimately, this will contribute to preserving financial stability in the EU.

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European Commission Press Releases

EU Budget 2021-2027: Commission welcomes Parliament’s green light on InvestEU

Vlad Poptamas

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Photo source: ec.europa.eu
Reading Time: 2 minutes

 

The European Commission welcomes today’s vote in the European Parliament on InvestEU, the programme to boost investment in Europe in the next long-term EU budget. This vote brings InvestEU one step closer to its creation.

InvestEU will make EU funding for investment projects simpler to access and more effective. Building on the success of the Juncker Plan, it will bring together under one roof and with a single brand the European Fund for Strategic Investments and 13 other EU financial instruments currently supporting investment in the EU.

President Jean-Claude Juncker said: “The Investment Plan put Europe back in business and delivered on this Commission’s number one priority: creating jobs and growth. But we can do more and that’s what InvestEU is about. By making smart use of the EU’s budget, InvestEU will help Europe stay an attractive place for investors worldwide. Over the next decade, the programme will unlock at least €650 billion for Europe to invest in its future, its economy and its people.”

Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “The next generation of investment support in the EU is almost there. Soon, businesses and entrepreneurs will get easier access to EU funding to turn their ideas into concrete projects. It will help keep the EU at the forefront of innovation and climate action, while creating jobs and ensuring a growth model that is socially, environmentally and economically sustainable.”

InvestEU will keep the Juncker Plan’s innovative approach to investment, by using limited amounts of public resources with an EU budget guarantee to leverage substantial private and public funds. The €38 billion guarantee will target investments in four main areas: sustainable infrastructure; research, innovation and digitisation; small and medium businesses and social investment and skills. It should trigger at least €650 billion in additional investment in Europe.

Similarly to the Juncker Plan, the InvestEU Fund will be accompanied by the InvestEU Advisory Hub – tailored support to project promoters – and the InvestEU Portal – an easily accessible pipeline of mature projects for potential investors. Also like in the Juncker Plan, InvestEU will be a part of the Commission’s economic policy mix of investment, structural reforms and fiscal responsibility, to ensure Europe remains an attractive place for businesses to settle and thrive.

InvestEU is a partnership with the European Investment Bank Group (EIB), the EU Bank, and will be open to other implementing partners as well. The budgetary aspects of InvestEU are still subject to the overall agreement on the next long-term EU budget, which the Commission proposed in May 2018.

Latest figures from the European Investment Bank, the Commission’s strategic partner on the Juncker Plan, show that by April 2019, the European Fund for Strategic Investments (EFSI) had mobilised almost €393 billion of investments. Operations approved under EFSI so far represent a total financing volume of €72.8 billion in all 28 Member States. The EIB has approved 524 infrastructure projects supported by EFSI for €53.8 billion, while the European Investment Fund has approved 554 financing agreements for small and medium businesses worth €19 billion, which should benefit 945,000 companies.

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