In his 2017 State of the Union address to the European Parliament, the European Commission's President, Jean-Claude Juncker, took stock of EU developments over the past year and outlined his vision for the future of the EU, which would lead to a 'more united, stronger and more democratic Europe'. His vision consists of five proposals which would require a decision by the European Council, as well as one suggestion which would directly impact on the composition and working methods of this EU institution. The five proposals are: 1) using the general passerelle clause to shift from unanimity to qualified majority voting (QMV) in the Council on remaining internal market issues and aspects of taxation policy; 2) moving to QMV in the field of Common Foreign and SEcurity Policy (CFSP); 3) setting up a European Defence Union; 4) extending the competences of the European Public Prosecutor's Office; 5) agreeing on a new composition for the European Parliament, including transnational lists. The additional suggestion is to merge the positions of President of the European Council and European Commission. In principle, all proposed initiatives could be carried out without a Treaty change. The Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) include a series of clauses enabling the European Council to go beyond the current status quo. In three cases, the European Council would need the consent of the European Parliament before taking its decision. A comparison between President Juncker's proposals and the views of the European Parliament indicates that their opinions overlap regarding four of the ideas, while on one of them, discussions in the Parliament are still ongoing (see Table 1 below).
Posted on 23-10-2017
At their meeting on 19-20 October 2017, EU leaders will focus on migration, in particular assessing the progress made in stemming illegal flows on all migration routes, and digital Europe, following up on the Digital Summit held in Tallinn on 29 September. Heads of State or Government will also discuss defence, in particular the preparations for permanent structured cooperation (PESCO) as well as external relations, including relations with Turkey. The President of the European Council, Donald Tusk, is expected to present the new 'Leaders' Agenda 2017-2018', outlining the decisions that need to be taken at the level of the European Council in the coming year. Finally, EU-27 leaders will meet on 20 October in a separate formal European Council (Article 50), without the United Kingdom, to discuss the latest developments in the latter’s withdrawal negotiations. It is expected that the European Council (Article 50) will postpone the decision on starting the second phase of negotiations on the EU's future relations with the UK until the December 2017 European Council, due to insufficient progress having been made to date.
The EU budget is facing numerous long-term challenges, which are not adequately addressed, neither on the expenditure nor on the revenue side. Regardless of the future EU integration scenario, a fundamental overhaul of the MFF is required. EU expenditure should provide more European added value. Tax-based own resources partially replacing current own resources have the potential to reduce sustainability gaps within Member States’ tax regimes as well as to alleviate the juste retour problem.
The European Council's role – to 'provide the Union with the necessary impetus for its development' and to define its 'general political directions and priorities' - has developed rapidly over the past seven years. Since June 2014, the European Council Oversight Unit within the European Parliamentary Research Service (EPRS), the European Parliament's in-house research service and think-tank, has been monitoring and analysing the European Council's delivery of the various commitments made in the conclusions of its meetings. This overview, presented in the form of a regularly updated Rolling Check-List of Commitments to Date, is designed to review the degree of progress in realising the goals which the European Council has set itself since January 2010 and to assist the Parliament in exercising its important oversight role in this field.
Posted on 20-10-2017
On 13 October, US President Donald Trump announced his decision not to certify Iran's compliance with the international nuclear agreement of 2015. This will likely result in a vote on the deal in Congress. The EU and the rest of the international community intend to keep to the agreement.
In autumn 2015, the European Commission proposed a regulation on securitisation, in the context of the Capital Markets Union initiative. The proposal followed a consultation with stakeholders and took into account initiatives at international (BCBS-IOSCO) and European levels (EBA). The proposal replaces existing rules relating to due diligence, risk retention, transparency and supervision with a uniform regime. It provides a framework to identify simple, transparent and standardised (STS) securitisations and to allow investors to analyse associated risks. The proposal came as a package with a second proposal, to amend the Capital Requirements Regulation applicable to credit institutions and investment firms in respect of securitisation. During the October II plenary session, the European Parliament is due to vote on the compromise agreement struck with the Council in May 2017. This briefing further updates an earlier edition, of July 2016: PE 586.624. See also our updated briefing on the related proposal: PE 608.778.
As part of its ambition to create a Capital Markets Union, the European Commission wants to revive the securitisation market in the EU, in order to offer new financing tools and ease credit provision, especially for small and medium-sized enterprises. Its 'securitisation initiative', set out in a proposed regulation on 30 September 2015, would establish a new framework for 'simple, transparent, and standardised' (STS) securitisations. This new initiative also has implications for the overall prudential framework for credit institutions and investment firms, therefore the Commission proposed to amend the Capital Requirements Regulation (EU) No 575/2013 accordingly. The proposed amendments would adjust risk retention profiles to reflect properly the specific features of STS securitisations. The most significant changes are: a new hierarchy of risk calculation methods and lower capital requirements for STS. The Council agreed on a general approach on both dossiers in early December 2015. Parliament’s ECON Committee adopted its report a year later, and the two institutions reached agreement on the text in trilogue in June 2017. This briefing further updates an earlier edition of July 2016: PE 573.935. See also our updated briefing on the related proposal: PE 608.777.
Returning more and more migrants with irregular status to their countries of origin has become a key European Union aim in efforts to reduce illegal migration. Despite its high political priority, reiterated in European Commission President Jean-Claude Juncker's 2017 State of the Union address, the effective implementation of this objective is problematic, mainly due to resistance at the individual level, but also from the countries of origin. The 2016 partnership framework with third countries attempts to enhance cooperation with partner countries on readmission, using a wide range of positive and negative policy incentives. To make the return option more attractive for migrants with irregular status, the EU's return policy promotes voluntary returns through reintegration assistance packages. No less than 90 specific assisted voluntary return and reintegration programmes (AVRR) have been established by EU Member States, co-financed by the European Union, and implemented mainly by the International Organization on Migration (IOM). Maximising sustainable returns, understood not only as absence of re emigration, but also as a returnee's positive impact on the development of their communities of origin, is a key challenge. The nature of return chosen, and the success of economic and social integration of migrants in host countries, are the main factors of successful reintegration at the pre-departure stage, together with social and psychological counselling in preparing the reintegration project. Following arrival, training and in-kind assistance to start up a business, accompanied by measures to re-establish social networks, are what works best. Close cooperation with local partners is necessary to include reintegration assistance within existing development initiatives, to avoid duplication, resentment against returnees, and to respond to local needs.
In his State of the Union speech in September 2017, European Commission President Jean-Claude Juncker called for keeping a credible European Union membership perspective for Western Balkan countries, while ruling out the possibility of Turkey joining the EU in 'the foreseeable future' due to violations to the rule of law and fundamental rights. According to the Commission's assessment, the forecasts for economic growth in the Western Balkans are good, although progress on reform has been slow, the rule of law has been weak, and corruption is persistent. From the Western Balkans, only Croatia has joined the EU, in 2013. Accession talks continue with Montenegro and Serbia. The former Yugoslav Republic of Macedonia and Albania are official candidates. Bosnia and Herzegovina formally applied for EU membership in 2016, and remains a potential candidate country, along with Kosovo. Relations between Turkey, an official candidate country, and the EU have been strained for some time due to what many politicians and analysts perceive as President Recep Tayyip Erdogan's increasingly autocratic style. This note offers links to a series of recent studies and comments from major international think tanks and research institutes on EU enlargement, Western Balkans and Turkey. More reports on the EU enlargement process can be found in a previous edition of 'What Think Tanks are thinking' published in March 2017. More reports on Turkey are available in another edition from the series, also published in March.
This briefing has been drawn up to support ECON’s work on the scrutiny of delegated acts, in particular as regards the discussion of 19 October 2017 on the two draft European Banking Authority (EBA) RTS on valuation under BRRD. The draft RTS are intended to promote consistent application of methdologies for valuations regarding the principles which independent valuers have to observe for their respective valuations.