A&G Newsletter – Q4 2020

EU Commission to shape and evaluate national recovery plans

The EU has put forward an exceptional tool to finance the recovery of the European economy, the Next Generation EU (‘NGEU’). The NGEU includes the EUR 672.5 billion Recovery and Resilience Facility (‘RFF’) financial instrument which will be allocated directly to Member States to fund their national recovery plans. However, these funds come with strings attached.Indeed, Member States will have to define Recovery and Resilience Plans to be submitted to the Commission for approval between October and April 2021.

More concretely, the national plans must include structural reforms, be in line with EU policy priorities and have more than 30% of the funds dedicated to climate action. The national plans must be designed to achieve 7 objectives set by the Commission. It is on the capacity of the national plans to achieve these objectives that the Commission will make its assessment. These objectives include investments in renewable energy, clean transport, connectivity and the development of the technological capacities of European industry. The influence of the European Commission will continue even after the adoption of the Recovery Plan, as the release of payment instalments is linked to the achievement of milestones monitored by the Commission.

The role of the European Commission in defining national recovery plans will be central. By setting the evaluation criteria and assessing the consistency of the national plans with EU policies, the Commission will be the co-author of each Member State’s recovery plans. With the national recovery and resilience plans potentially being finalised in the coming weeks, it is essential to lobby the Commission to make the most of the stimulus funds.

Our expertise in European affairs and our contacts with the Commission services will enable you to quickly establish a tailor-made lobbying strategy to shape the national recovery plans.

EU agrees on the budget for 2021-2027

At the European Council of 17-21 July 2020, the EU finally agreed on the next Multiannual Financial Framework (‘MFF’) amounting to EUR 1,074.3 trillion. In addition, EUR 72.5 billion from the NGEU will strengthen European programmes, particularly in research and innovation and cohesion. With the adoption of the MFF, the EU would set the EU’s long-term objectives from 2021 to 2027.In concrete terms, the MFF sets the EU budget in all its policy areas. The sectors concerned are agriculture, cohesion funds, the Green Deal, health, research and innovation programmes, digital and infrastructure investment. However, the EU has had to scale back some of its ambitions on some areas compared to the May’s proposal. Negotiations are still ongoing between the Council and the European Parliament. The European Parliament wants to raise European ambition in research and health programmes, which could increase the MFF by a further 110 billion EUR.

By adopting the MFF, the EU is setting its policy objectives for the long term. However, with debates in the European Parliament underway, pressure is mounting to raise the EU’s ambitions on certain policies. In this context, it becomes crucial for stakeholders to strengthen their influence with the European institutions and Member States to ensure that the NGEU and the MFF which will define European policy for the next 7 years, meets their needs in the best possible way.

Alber & Geiger can use its extensive experience in EU affairs to enable you to benefit from EU funds.

EU steps up its funding capacities

With the adoption of the new MFF, the EU is reforming and expanding its funding and guarantee programmes to meet the objectives of strengthening competitiveness and research & innovation. Horizon Europe comes out strengthened compared to the last MFF. The research funding programme gets EUR 80.9 billion, an increase of more than EUR 16.2 billion compared to Horizon 2020. In addition to this, a new EUR 8.4 billion InvestEU program is created.

Via Horizon Europe, the Commission can fund research and innovation programmes. Horizon Europe provides funding opportunities to many research sectors, such as health, digital, environment, energy and transport. The InvestEU programme both complements and expands Horizon Europe. The InvestEU programme aims to provide a financial guarantee for any project that would be too risky for the traditional market. It is then up to the Commission to choose to guarantee the projects submitted to it. Furthermore, the EU has asked the European Investment Bank (‘EBI’) to consider increasing its capital by the end of 2020.

In conclusion, the funding opportunities and the sectors concerned have been greatly expanded: research and innovation, infrastructure, strategic investment and climate action. The priorities of the funding programmes, the calls for proposals, the selection criteria, and the decision to guarantee projects are in the hands of the European Commission. Our teams can help you to set up a project that meets European criteria, but also, through contacts with the institutions, influence the priorities of the European funding policy.

Our teams will guide you through the funding programs and procedures.

EU launches infrastructure and digital programmes

The EU Recovery Plan and the MFF dedicate more than EUR 8.593 billion specifically to digital transformation. Indeed, the Connecting Europe Facility (‘CEF’) sets a new fund dedicated to digital, focusing on European infrastructures. The EU is also launching a brand-new Digital Europe Programme to invest in the digital transition and new digital technologies.

More concretely, the Commission is working on a multi-annual investment plan for the CEF. The funds should focus on 5G infrastructure and the construction of data centres. Digital Europe’s EUR 6.7 billion will be administered directly by the Commission, which will determine the investment priorities and award criteria. The fund aims to finance research & innovation in AI and to strengthen the competitiveness of the European cybersecurity industry. The funds are intended not only to encourage innovation, but also to help bring new technologies to the market.

Now that there is agreement on the MFF, the European Commission will define the framework for the CEF and Digital Europe in the coming month. It is at this crucial time that the digital sector, and more specifically the cybersecurity and AI developers and members of the data economy, to reach out to the European Commission to provide input to the definition of the programme frameworks. We can develop a narrative designed to shape the priorities of European programmes and subsequently help you identify and secure funding for your projects.

Our expertise will enable you to make your interests prevail with the European institutions.

EU sets new Neighbourhood and Development Plans

The new MFF dedicates more than EUR 98.419 billion to development programmes. The main countries concerned are the countries of Sub-Saharan Africa (EUR 26 billion), Neighbourhood (EUR 17,217 billion), but also the EU candidate countries which will benefit from the separate Instrument for Pre-Accession Assistance (‘IPA III’). The adoption by the Commission of the financing plans determining the allocation of funds between the States is scheduled for the coming months.

More concretely, the Commission plans to define multi-annual financing plans in collaboration with the Member States and the partner States. The aim of this consultation is to define the priorities of development policy and to determine the distribution of funds. The Commission will adopt multi-annual programmes through implementing acts using a performance-based approach. The more successful a state is in meeting the objectives previously set, the more funding it will receive.

With the new iterations of the development programmes, the EU is more than ever adopting a performance-based approach when it comes to defining the allocation of the development funds. This makes dialogue with the European institutions all the more important. Alber & Geiger can help you define a narrative illustrating the achievement of the objectives of the previous programmes and request an allocation of funds reflecting your ambitions and needs.

Alber & Geiger can put its distinguished international relations team at your disposal to help you make the most of European development programmes.

EU to Propose New EU-Wide Taxes

To finance the Next Generation EU, the EU is preparing to introduce new taxes at European level. These will have important consequences for all industrial sectors. In the plan published on 21 July, four new taxes are planned, the first of which will be introduced on 1 January 2021.
In addition, the European Parliament has called on the Commission to introduce further proposals for new taxes at EU-level.

From 1 January 2021, a tax on the weight of non-recycled plastic packaging will be implemented at the tariff rate of EUR 800 per tonne. In the first half of 2021, the Commission intends to introduce three new taxes which should be applicable from 2023. Public consultations for the Carbon Border Adjustment Mechanism have already opened and will end on October 28, 2020. Negotiations on the roadmap for the extension of the Emission Trading System (‘ETS’) to the maritime shipping and aviation sectors are also currently open. In addition, the Commission will propose a digital tax of 3% for companies with an income above the EUR 750 million threshold. Finally, the Commission plans to propose a financial transaction tax to finance the next MFF.

The taxes that are going to be proposed will have an impact on all European industries, and even in industries based in third countries trading with the EU. With the immense consequences they could have on all sectors of industry, adopting a strategy to influence the European institutions is more necessary than ever. Our expertise in European affairs and our contacts in the various European institutions will enable us to represent your interests in the best possible way and mitigate the effects of these new taxes on your activities.

Our expertise in EU affairs and our contacts with the EU institutions and Member States will enable you to represent your interests in the forthcoming discussions.