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European Commission Press Releases

‘No-deal’ Brexit: European Commission takes stock of preparations ahead of the June European Council (Article 50)

Vlad Poptamas

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Photo source: ec.europa.eu
Reading Time: 4 minutes

 

Ahead of the June European Council (Article 50), the European Commission has today taken stock – in its fifth Brexit Preparedness Communication – of the European Union’s Brexit preparedness and contingency measures, particularly in light of the decision taken on 11 April by the European Council (Article 50), at the request of and in agreement with the United Kingdom, to extend the Article 50 period to 31 October 2019.

In light of the continued uncertainty in the United Kingdom regarding the ratification of the Withdrawal Agreement – as agreed with the UK government in November 2018 – and the overall domestic political situation, a ‘no-deal’ scenario on 1 November 2019 very much remains a possible, although undesirable, outcome.

Since December 2017, the European Commission has been preparing for a ‘no-deal’ scenario. To date, the Commission has tabled 19 legislative proposals, 18 of which have been adopted by the European Parliament and Council. Political agreement has been reached on the remaining proposal – the contingency Regulation on the EU budget for 2019 –, which is expected to be formally adopted later this month. The Commission has also adopted 63 non-legislative acts and published 93 preparedness notices. In light of the extension of the Article 50 period, the Commission has screened all these measures to ensure that they continue to meet their intended objectives. The Commission has concluded that there is no need to amend any measures on substance and that they remain fit for purpose. The Commission does not plan any new measures ahead of the new withdrawal date.

The Commission recalls that it is the responsibility of all stakeholders to prepare for all scenarios. Given that a ‘no-deal’ scenario remains a possible outcome, the Commission strongly encourages all stakeholders to take advantage of the extra time provided by the extension to ensure that they have taken all necessary measures to prepare for the UK’s withdrawal from the EU. Today’s Communication provides details on the extensive preparations in the EU27 in areas such as citizens’ residence and social security entitlements, customs and taxation, transport, fishing, financial services as well as medicinal products, medical devices and chemical substances.

A ‘no-deal’ scenario

In a ‘no-deal’ scenario, the UK will become a third country without any transitional arrangements. All EU primary and secondary law will cease to apply to the UK from that moment onwards. There will be no transition period, as provided for in the Withdrawal Agreement. This will obviously cause significant disruption for citizens and businesses and would have a serious negative economic impact, which would be proportionally much greater in the United Kingdom than in the EU27 Member States.

As outlined by President Juncker in the European Parliament on 3 April 2019, should a ‘no-deal’ scenario occur, the UK would be expected to address three main separation issues as a precondition before the EU would consider embarking on discussions about the future relationship. These are: (1) protecting and upholding the rights of citizens who have used their right to free movement before Brexit, (2) honouring the financial obligations the UK has made as a Member State and (3) preserving the letter and spirit of the Good Friday Agreement and peace on the island of Ireland, as well as the integrity of the internal market.

The EU’s ‘no-deal’ preparedness and contingency work: continued vigilance in selected areas

Preparing for the UK’s withdrawal is a joint effort by public administrations and economic operators. The Commission has held extensive technical discussions with the EU27 Member States both on general issues of preparedness and contingency work and on specific sectorial, legal and administrative preparedness issues. The Commission has also completed a tour of the capitals of the 27 EU Member States. The visits showed a high degree of preparation by Member States for all scenarios.

Today’s Communication focuses on areas in which continued and particular vigilance is needed in the coming months:

Citizens’ residence and social security entitlements

  • Member States had prepared or adopted national contingency measures before 12 April 2019 to ensure that UK nationals and their non-EU family members could remain legally resident in the immediate period after a ‘no-deal’ withdrawal.
  • To provide further clarity, the Commission has provided an overview of residency rights in the EU27 Member States (see here, including direct links to national preparedness websites). This will continue to be updated.

Medicinal products, medical devices and chemical substances

  • Only a small number of centrally authorised medical products (around 1%) had not been brought into regulatory conformity by 12 April 2019 The European Medicines Agency (EMA) is now close to completing the regulatory compliance process for products that are authorised centrally.
  • For products that are authorised at national level, more work remains to be done to bring remaining medicinal products into regulatory compliance by 31 October 2019.
  • The transfer of certificates for medical devices from UK notified bodies to EU27 notified bodies is ongoing.
  • As regards chemical substances, by the end of April 2019, REACH registrations of 463 substances had been transferred to the EU27 Member States, while 718 still remained registered only by registrants established in the United Kingdom. The European Chemicals Agency (ECHA) opened a ‘Brexit window’ in REACH-IT to take the necessary steps to transfer their REACH registrations ahead of the withdrawal date.

Customs, indirect taxation and border inspection posts

  • In the field of customs and indirect taxation, the Commission organised numerous technical meetings, and published guidance notes on customs, value-added tax (VAT) and excise ahead of the previous withdrawal date.
  • National administrations have made significant investments in infrastructure and human resources, primarily in Member States that are the main entry and exit points for the EU’s trade with the United Kingdom. Member States are also working with the Commission in its training and communication efforts to reach out to economic operators and stakeholders in general.
  • In the field of sanitary and phytosanitary controls (SPS), EU27 Member States have set up new Border Inspection Posts (BIPs) or extending existing ones at entry points of imports from the United Kingdom into the EU.

Transport

  • The contingency Regulation on air transport includes a specific mechanism for EU airlines to comply with the EU majority ownership and control requirements. This process is underway and the Commission is in regular contact with national authorities.
  • In the rail transport sector, operators that have not taken the necessary steps to obtain the relevant EU27 documents should do the necessary to obtain them.

 

Financial services

  • While in the run-up to 12 April 2019, firms had made significant progress with their contingency planning, some residual issues remain. Insurance firms, payment services providers and other financial service operators which remain unprepared regarding certain aspects of their business (for example contract management and access to infrastructures) are strongly encouraged to finalise their preparatory measures by 31 October 2019. The Commission is working with EU level and national supervisors to ensure that firms’ contingency plans are fully implemented, and it expects that UK supervisors will not prevent firms from implementing such plans.

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European Commission Press Releases

EU budget 2021-2027: Commission calls on leaders to set out a roadmap towards an autumn agreement

Vlad Poptamas

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Photo source: theverge.com
Reading Time: 4 minutes

 

Ahead of the European Council meeting on 20 and 21 June, the European Commission is calling on leaders to make a push in advancing the negotiations on the EU’s next long-term budget 2021-2027 so that an agreement can be reached by autumn. An agreement is within reach – but much work remains too while a lot is at stake.

In a Communication published today, the Commission looks at what has been achieved so far and identifies the main open issues that need to be addressed, paving the way for a swift agreement. Time is running and delays to the future EU budget are costly. Not having an agreement in time would affect students, farmers and researchers, as well as everybody else who benefits from the EU budget. The EU’s current long-term budget 2014-2020 was adopted six months too late having negative consequences formany citizens, in our Member States and beyond (see Annex).

To avoid a similar scenario, the Commission calls today on the European Council to set out a roadmap to achieving an agreement on the EU’s long-term budget in the autumn and to invite the Council to take the work forward as a matter of priority.

European Commission President Jean-Claude Juncker said: “A lot of work has already been done in moving forward the Commission’s proposal for the EU’s future long-term budget. I congratulate the European Parliament and Member States in the Council for their hard work and commitment. Now is the time to move up a gear. With the highest turnout in European elections for 20 years and a campaign more focused on European issues than ever before, 2019 is a year of renewal for our Union. Agreeing on our future budget is not a number-crunching exercise but it is about matching our ambitions and priorities with the right budgetary means. The stakes are high but with courage and political will, there is a chance to reach agreement by autumn.”

European Commissioner in charge of Budget and Human Resources, Günther H. Oettinger said: “Thanks to the good work of three consecutive Council Presidencies, we have already reached partial agreement on 12 sectoral files, while negotiations can start on further 16. Most importantly, an agreement on the overall framework is needed. And we need to reach it as quickly as possible – in the name of our students, farmers and researchers, among many others who count on the EU budget.”

In May and June 2018, the Commission put forward a proposal for a new and modern long-term budget, tightly geared to the Union’s priorities, including the legislative proposals for the 37 sectoral programmes. On that basis, a lot of work has already been done in both the European Parliament and the Council. Progress has been made on the overall framework; many of the sectoral proposals have been at least partially closed.

During the negotiations, many of the elements that the European Commission initially proposed have already received broad support from the European Parliament and the Council. These include:

  • the strong focus on European added value;
  • the streamlined and more transparent structure of the future budget;
  • the reduction in the number of programmes and the creation of new integrated programmes in areas like investing in people, the single market, strategic investments and rights and values;
  • the increased focus on synergies between instruments;
  • the simplification of funding rules;
  • the greater flexibility to ensure rapid reaction in a fast-changing world.

Progress is also being made in the discussions of the following proposals:

  • The budgetary instrument for convergence and competitiveness for the euro area;
  • The new mechanism to ensure that generalised deficiencies in the rule of law do not put at risk the EU budget;
  • The Commission’s proposals to modernise the revenue side of the EU budget.

At the same time, key political issues – and the financial aspects in particular – are still up for discussion. The time to address them is now. The June European Council should launch a new phase of political negotiations with an increasing focus on financial and other strategic issues. This is the only way to ensure that a timely agreement can be reached and that the new programmes are up and running by 1 January 2021.

Delivering the future budget on time means concrete results for all Europeans: It would create tens of thousands of research jobs already in 2021 and many more in the wider economy, it would make sure that over 100,000 Cohesion Policy projects start on time, enable 1,000,000 young people to benefit from an Erasmus exchange and allow 40,000 young people to engage in solidarity action across Europe in 2021. It would support start-ups and small and medium-sized companies to realise their investments, would significantly step up defence investments and capabilities and would help protecting the Union’s borders against trafficking, smuggling and fraud.

Completing work on the future framework and the spending programmes in time to allow their full implementation by 1 January 2021 will be challenging, but it is achievable – provided that the European Council leads the way.

Background

On 2 May 2018, the Commission put forward a proposal for a modern, balanced and fair budget to deliver on Europe’s priorities as set out by Leaders in Bratislava in 2016 and in Rome in 2017. That proposal was immediately followed by legislative proposals for the 37 sectoral programmes forming part of the future long-term budget. On that solid basis, the Commission has worked hand in hand with the Bulgarian, Austrian and Romanian Presidencies to take the negotiations forward.

When it comes to timing, from the very beginning, the Commission has been supportive of an ambitious timeline. The European Council in its conclusions of December 2018 called for an agreement in the European Council in autumn 2019. The Commission will continue working very closely with the current and future Presidencies, and in close collaboration with the European Parliament, towards this objective.

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European Commission Press Releases

Data Protection Regulation one year on: 73% of Europeans have heard of at least one of their rights

Vlad Poptamas

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Photo source: gep.com
Reading Time: 3 minutes

 

Today, at the occasion of a stock-taking event to mark the first year of application of the EU General Data Protection Regulation, the European Commission is publishing the results of a special Eurobarometer survey on data protection. The results show that Europeans are relatively well aware of the new data protection rules, their rights and the existence of national data protection authorities, to whom they can turn for help when their rights are violated.

Andrus Ansip, Vice-President for the Digital Single Market said: “European citizens have become more aware of their digital rights and this is encouraging news. However, only three in ten Europeans have heard of all their new data rights. For companies, their customers’ trust is hard currency and this trust starts with the customers’ understanding of, and confidence in, privacy settings. Being aware is a precondition to being able to exercise your rights. Both sides can only win from clearer and simpler application of data protection rules.”

Věra Jourová, Commissioner for Justice, Consumers and Gender Equality added: “Helping Europeans regain control over their personal data is one of our biggest priorities. But, of the 60% Europeans who read their privacy statements, only 13% read them fully. This is because the statements are too long or too difficult to understand. I once again urge all online companies to provide privacy statements that are concise, transparent and easily understandable by all users. I also encourage all Europeans to use their data protection rights and to optimise their privacy settings”.

Based on the views of 27,000 Europeans, the Eurobarometer results show that 73% of respondents have heard of at least one of the six tested rights guaranteed by the General Data Protection Regulation. The highest levels of awareness among citizens are recorded for the right to access their own data (65%), the right to correct the data if they are wrong (61%), the right to object to receiving direct marketing (59%) and the right to have their own data deleted (57%).

In addition, 67% of respondents know about the General Data Protection Regulation and 57% of respondents know about their national data protection authorities. The results also show that data protection is a concern, as 62% of respondents are concerned that they do not have complete control over the personal data provided online.

Also today, the European Commission organises an event bringing together national and EU authorities and businesses to mark the first year of implementation of the EU General Data Protection Regulation, in the presence of Commissioner Jourová.

Next steps

The Commission is launching today an awareness raising campaign to encourage citizens to read privacy statements and to optimise their privacy settings so that they only share the data they are willing to share.

The Commission will also report on the application of General Data Protection Regulation in 2020.

Background

The General Data Protection Regulation is a single set of rules with a common EU approach to the protection of personal data, directly applicable in the Member States. It reinforces trust by putting individuals back in control of their personal data and at the same time guarantees the free flow of personal data between EU Member States. The protection of personal data is a fundamental right in the European Union.

The GDPR has been applicable since 25 May 2018. Since then, nearly all Member States have adapted their national laws in the light of GDPR. The national Data Protection Authorities are in charge of enforcing the new rules and are better coordinating their actions thanks to the new cooperation mechanisms and the European Data Protection Board. They are issuing guidelines on key aspects of the GDPR to support the implementation of the new rules.

Today’s stock-taking event will consist of three panel discussions:

  • Panel 1 – How effective is enforcement?
  • Panel 2 – Data protection as a business opportunity
  • Panel 3 – How do individuals use their new rights?
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European Commission Press Releases

Banking Union: Non-performing loans in the EU continue to decline

Vlad Poptamas

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Photo source: europarl.europa.eu
Reading Time: 3 minutes

 

Efforts to reduce risks in the EU banking sector are bearing fruit, according to new figures released by the European Commission today.

In its fourth progress report on the reduction of non-performing loans (NPLs), the Commission today confirms that NPL levels are continuing their downward trajectory towards pre-crisis levels. The ratio of NPLs in EU banks has come down by more than half since 2014, declining to 3.3% in the third quarter of 2018 and down by 1.2 percentage points year-on-year.

Building on the December 2018 Euro Summit conclusions, today’s report will inform discussions on the completion of the Banking Union at the next meeting of EU finance ministers on 14 June, not least on the steps that need to be taken towards a European Deposit Insurance Scheme (EDIS).

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Unionsaid: “Working out the remaining stocks of non-performing loans is part of our ongoing efforts to make the banking sector even stronger. Our banks are now better capitalised and better prepared to withstand economic shocks. We’ve recently agreed on more robust framework to regulate and supervise banks. Given this progress in reducing risks, I call on EU Finance Ministers to move forward with other measures to complete the Banking Union.”

In a separate Communication on the Deepening of Europe’s Economic and Monetary Union released today, the Commission invites EU leaders to finalise the changes to the Treaty establishing the European Stability Mechanism and to make a renewed effort to advance towards the completion of the Banking Union. Together with the completion of the Banking Union, this is essential for the development of Economic and Monetary Union, and strengthening the international role of the euro.

Despite clear improvements, high ratios of NPLs do remain a challenge in some Member States and deserve continued attention. Today’s Communication calls on Member States and the European Parliament to accelerate work on the outstanding proposals to complement the EU’s action to tackle this issue. Important strides have already been made towards full implementation of the EU’s Action Plan to tackle the high stocks of NPLs. However, the Commission calls on co-legislators to quickly agree on its proposed measures around the benchmarking of national loan enforcement and insolvency frameworks, and to develop a sharper focus on insolvency in the European Semester process.

Background

Together, the Banking Union and the Capital Markets Union promote a more integrated and stable EU financial system. They increase the resilience of the Economic and Monetary Union against adverse shocks by substantially facilitating private risk sharing across borders, while at the same time reducing the need for public risk sharing.

One of the key areas for reducing risk in the European banking sector is the further decline in NPLs. The financial crisis and subsequent recessions led to a more widespread inability of borrowers to pay back their loans, as more people and companies faced continued payment difficulties and even bankruptcy. This was particularly so in Member States that faced long or deep recessions. Consequently, many banks saw a build-up of NPLs on their books. High NPL ratios remain an important challenge in some banks in particular and can considerably weigh on their performance.

The Commission has been working together with Member States concerned to address the high level of NPLs, including through the European Semester and the setting up of ad hoc and system-wide impaired assets measures, compatible with state aid rules. Member States’ supervisors and banks have themselves also made considerable progress in cleaning up bank balance sheets since the crisis.

In March 2018, the Commission put forward a comprehensive package of measures as part of the EU Action Plan to tackle non-performing loans. The package contains policy actions in four areas: (i) bank supervision and regulation, (ii) further reforms of national restructuring, insolvency and debt recovery frameworks, (iii) developing secondary markets for distressed assets, and (iv) fostering, as appropriate and necessary, restructuring of banks.

Furthermore, the Commission has been working with Member States to enable case-specific solutions for banks within the framework of EU State aid and banking rules, with a clear objective of limiting costs to taxpayers whilst making sure depositors remained fully protected at all times. This enabled transactions that removed some €133 billion of gross NPLs from the balance sheets of banks over the last three years (around €103 billion in Italy; around €24 billion in Portugal; around €6 billion in Cyprus).

Today’s fourth progress report responds to the Council’s expectation to complete a regular stocktake of NPLs in the EU.

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