After weeks of negotiations and rumours, the Commission finally presented its Recovery Plan on May 27th. The Plan provides for a new financing tool “Next Generation EU” of EUR 750 billion financed by a European loan, which had never been done before, and a Multiannual Financial Framework (‘MFF’) raised to EUR 1.1 trillion. The EUR 540 billion Coronavirus Relief Package announced at the beginning of April is added to the EUR 1.85 trillion Stimulus Plan to reach a total of almost EUR 2.4 trillion. By way of comparison, in 2009 the Commission launched a recovery plan of only EUR 200 billion.
The “EU Marshall Plan” heralds exceptional opportunities for companies doing business in Europe while at the same time strengthening the EU’s regulatory ambitions in the years to come. Indeed, more than 25% of the funds allocated will have to be earmarked for climate action in connection with the Green Deal. In parallel, the “Just Transition Fund” announced in January to help the energy transition was multiplied by 5, from 7.5 billion to EUR 40 billion. The Recovery Plan also provides for EUR 60 billion in guarantee funds that would trigger more than EUR 600 billion of private investment. However, companies deemed to be environmentally harmful will not be able to access these investments. To finance the investments, the EU plans to introduce new taxes such as a border tax on carbon, an enhanced emissions trading system and a tax on digital companies.
The EU Recovery Plan is delivering on its promises. The MFF is expected to be adopted in autumn 2020 so that the entire Recovery Plan can be operational by 1 January 2021. It is vital for companies to strengthen their presence in the EU decision making process in order to make the most of the opportunities offered by the Recovery Plan, while mitigating the risks linked to the EU’s regulatory ambitions, particularly in the digital and environmental fields.
Alber & Geiger’s extensive political and policy experience can help you promote your interests and assist you in securing the massive investments from the European Marshall Plan.
EUR 130 billion EU guarantee fund for Africa and the Western Balkans
The Recovery Plan presented on 27 May was also an opportunity for the Commission to revise upwards the ambition of its external action plan. In order to counter the effects of the pandemic, EU financial action will be stepped up in the coming months. The External Action Guarantee tool will receive EUR 10,5 billion from the Next Generation EU fund. These new funds will upscale its financing capabilities from EUR 60 billion in the 2018 proposal to EUR 130 billion. Most importantly, for the first time, the External Action Guarantee will be used to finance projects in the Western Balkans.
In the coming months the Commission will present a plan that will present which sectors and types of projects will be given priority to benefit from the External Action Guarantee fund. These projects will have to be aligned with European policies and ambitions in the digital and environmental fields. Financial institutions wishing to benefit from these guarantee funds will have to submit their application to the Commission services. Ultimately, it is the Commission which will decide which projects will be eligible for the guarantee fund. The Commission hopes that these guarantees will trigger up to EUR 500 billion of public and private investment between 2021 and 2024.
The revamped External Action Plan marks a turning point in the EU’s cooperation policy with third countries. In order to combat the effects of the pandemic, the Commission intends to trigger massive investments via the leverage mechanism of the External Action Guarantee Fund. The entire investment guarantee process will be in the hands of the Commission. African and Balkan states, as well as private operators, should strengthen their presence in Brussels in order to take full advantage of these exceptional financing opportunities.
Our expertise in European government relations will help you to secure these guarantee funds.
EU Standard for Platform Regulation
On 2 June 2020, the Commission opened the public consultation for one of the most ambitious regulations of the Digital Agenda: the Digital Service Act. The objective of the EU is clear: to reiterate what has been done with the GDPR and to define standards at the global level for digital platforms. The EU plans to act on content moderation in order to combat misinformation and hate speech online. In order to complete this reform of e-commerce rules, the EU is currently working on a new ex-ante competition tool specific to the digital economy that will strengthen the constraints on digital companies.
In more detail, the reform of the e-commerce directive is aiming at clarifying, harmonising and increasing liability rules for digital companies that dates to 2001. The Commission wants a framework at European level that would redefine the responsibilities of platforms in content moderation. The new competition tool that is to accompany the Digital Service Act aims to adapt the competition rules to the digital domain. This tool will strengthen the competition rules for large digital companies to keep them from acting as gatekeepers.
The EU has launched the first phase of its ambitious plan for a comprehensive regulatory reform of digital platforms and e-commerce. The whole sector is concerned, both for companies operating in the single market and those that do not as the EU is going to be very active in its efforts to globalise its regulations. The rules of responsibility to the competition rules are going to be totally reformed. The public consultations open until 8 September will be crucial for digital companies. The Digital Service Act is to be introduced in early 2021.
Alber & Geiger has extensive political and policy experience on this topic. Our team of experts can help you promote your interests during this process.
Reform of the European Pharmaceutical Sector
On 2 June the Commission published the roadmap for its ambitious pharmaceutical strategy. The Commission is to reopen all dossiers related to the pharmaceutical sector in order to make it more resilient, more competitive, more integrated and adapted to future technologies. The strategy has three main objectives: making the supply chain more autonomous, removing barriers to the circulation of treatments in Europe and adapting pharmaceutical regulations to new technologies. The ambition is to make the EU the leader in pharmaceutical research and to lay the foundations for international regulations on the quality and safety of medicines.
In concrete terms, the Commission foresees several legislative and non-legislative actions to achieve these objectives. The Commission will soon review the regulation on orphan diseases, the regulation on fees for medicinal products and reform the European Medicines Agency (‘EMA’). The Commission plans increase coordination between Member States’ health systems to reduce market fragmentation. These reforms may go as far as revising the basic pharmaceutical regulations which dates to 2001. As gene and personalised therapies and the use of AI data are increasingly common, the Commission will strive to ensure that the European pharmaceutical regulatory framework does not act as a deterrent to innovation.
The European Pharmaceutical Strategy is very ambitious. The EU is planning to review almost its entire regulatory framework and its research and innovation policy. There is a clear focus on facilitating research and innovation as well as facilitating access to new therapies. Above all, the Commission will act to unify the European pharmaceuticals market. Public consultations started on June 16 and will be concluded on September 15. It is crucial that all companies in the pharmaceutical sector are involved in the definition of this strategy.
The expertise of Alber & Geiger’s teams can guide you through the European decision-making process to represent your interests.
EU consultations on New Chemical Strategy
On 9 May, the European Commission presented the roadmap for its new strategy for reforming chemical regulations. The Commission plans to raise health and environmental protection standards. The Commission plans to simplify and make more transparent all European chemical regulations. The objective is to make the EU the leader in the production of alternative and sustainable chemicals by stimulating research and strengthening restrictions on products considered harmful to health and the environment.
Current discussions are focusing on strengthening the “polluter pays” principle by reforming the current liability principles. A new assessment methodology should be put in place to consider the effects of chemicals when combined with other products, as well as the duration of exposure. This may lead to a revision of specific regulations such as regulations on food packaging or toys. Certain chemical compounds, especially “endocrine disruptors”, are likely to be particularly affected. The Commission is working on increasing the coordination between national and European agencies in order to implement the “One Substance – One Assessment” principle. In addition, the EU should put in place incentive and funding mechanisms for research to encourage the adoption of sustainable alternatives.
The European chemical strategy for sustainability will have an important impact on the chemical industry. The new methodology for assessing health and environmental hazards could also lead to changes in European product regulations. At the same time, the EU is willing to put in place incentive mechanisms for the transition to sustainable production. The next months will be critical for the chemical industry. Public consultations will end on 20 June, and the strategy will be published in the third quarter of 2020.
Our team has political and policy experience surrounding this topic. We understand the policy and know how to engage politically.
EU consultations on Trade Policy
On 16 June, the Commission officially launched the public consultations for a major trade policy review. The European Commission is asking all economic actors to answer 13 different questions on different aspects of the Union’s trade policy, from trade defence to the role of trade policy in the EU’s environmental objectives. The EU’s new trade policy aims to fulfil two objectives: to make the European economy more competitive while at the same time achieving a model of “Open Strategic Autonomy”.
With this public consultation, the Commission is trying to rethink its trade policy in a post-COVID19 world. It foresees the risk of a rising protectionism and a weakening of multilateral bodies. The “Open Strategic Autonomy” model aims to achieve the right balance between openness and protection of the European economy and consumers. In addition, the EU is seeking input on the strategy to be adopted in the reform of the WTO bodies. EU trade policy shall focus on the effective implementation of the obligations of third countries that are parties to a trade agreement with the EU, with a view to providing improved market access for European companies. Furthermore, a white paper was published on 17 June proposing to set up authorities that will be able to re-establish a level playing field in the event of foreign subsidies.
In essence, the EU is opening historic public consultations as it seeks input from all economic actors in order to define guidelines and objectives on virtually all aspects of EU trade policy. Public consultations on the trade policy review are open until 15 September, while consultations on the white paper on foreign subsidies are open until 23 September. The Communication on trade policy should be published at the end of the year, while a regulation on foreign subsidies should be adopted in 2021.
Alber & Geiger has a distinguished trade and foreign policy team that can help you promote your interests.