News | 2020

I. AG-Newsletter 2020 Q4

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.

II. EU Marshall Plan of EUR 750 billion

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.

III. EU’s Marshall Plan set to EUR 1 trillion investment initiative

The European Commission has announced its intention to launch a unique Recovery Plan in the history of the EU. This plan is already part of an unprecedented effort by the EU and Member States to support the economy. With the activation of the general safeguard clause of the Stability and Growth Pact in March and with the €500 billion coronavirus relief plan decided on April 9, more than EUR 3 trillion have already been invested to support the European economy. However, with this Recovery Plan, the Commission wishes to move to another level.

On 16 April, the President of the Commission Ursula von der Leyen, presented the basis of this “Marshall Plan” to the European Parliament. She called for innovative instruments to be introduced in the MFF in order to unlock massive investments of up to EUR 1 trillion. This new “Marshall Plan” will double the ambition of the sustainable investments foreseen by the Green Deal and the European Digital Agenda. Investments will be concentrated in particular in the technology and digital sector, in energy and in R&D. In addition, the Commission promises to invest massively in transport and in the agri-food sector.

In conclusion, the new “Marshall Plan” is set to at least double the EU’s ambition in terms of investment compared to the initial ambitions of the Green Deal and the Digital Agenda. Massive financing opportunities will start in the coming months. In view of these huge opportunities, it is crucial for all European economic actors to strengthen their presence in Brussels in order to make the most of this unprecedented EUR 1 trillion investment “Marshal Plan”.

IV. EU’s New Circular Economy Action Plan

On 11 March 2020, the Commission published its New Circular Economy Action Plan. This document provides the basis for multi-sectoral regulatory work aimed at creating a circular economy by 2050. The plan foresees the introduction of new consumer rights, new ecodesign regulations and the mobilisation of several European research funds. Most impacted sectors are ICT and electronics, batteries and vehicles, packaging, building and construction, food, textiles, water and nutrients. The rules and regulations planned will have an impact on a global level, even for companies which are not present in the Single Market. Indeed, an important part of this plan focuses on the EU’s efforts to impose European standards at the international level.

In details, the Commission will propose a Sustainable Product Policy Initiative that will extend eco-design directives to the broadest possible range of products. The Sustainable principles will introduce new specific obligations to increase durability, reusability, the right for the consumer to upgradability of the products. In addition to these obligations, new consumer regulations will guarantee consumers a “right to reparation”. These regulations will also reinforce the obligations to inform the consumer about the lifespan of the product and the repair procedures. From 2020 to 2023, the Commission will adopt a number of regulations strengthening eco-design and waste reduction requirements. In addition, strategies on textiles and chemicals will soon be published.

In conclusion, this plan will have very important consequences on all sectors related to vehicles, food, electronics, plastics and textiles. Activities in the sectors concerned will be greatly influenced by these new regulations, from conception to sale. Consultations for several regulations have already begun. All companies concerned must therefore think about intervening in the decision-making process of the European institutions very quickly.

V. EU presents its new Industrial Strategy

On March 10, the Commission presented its Industrial Policy Strategy. This plan sets out a broad work programme: from the implementation of a digital industrial strategy to the revision of competition rules. This strategy plans for a strengthening of the fight against barriers to trade within the internal market, development plans for key sectors and a strengthened partnership with industry in policy making. In addition, the Commission plans to internationalise its standards, in particular through WTO negotiations. Therefore, all companies, even those that do not trade directly with the EU, are concerned by this action plan.

More concretely, the plan provides for the modernisation of the Internal Market. The Commission plans to set up a Single Market Enforcement Task Force, a review of intellectual property rules and a recasting of the competition and anti-trust rules. In addition, the Commission will, in the coming months, present its strategies sector by sector. This concerns in particular the chemical sector and the mobility sector. The Commission will build its strategies and priorities through co-decision via the Industrial Forum and by fostering public-private partnerships.

In conclusion, the internal market will be strengthened, and structuring rules will be reviewed in the coming months. In addition, sector-by-sector industrial strategies will have an impact on product design and on research and innovation through funding programmes and industrial alliances supported by public actors. As the Commission has announced that these regulations will be co-designed in consultation with industry representatives, it is crucial for industry to strengthen its presence in the European decision-making process.

VI. EU opens public consultation for its upcoming Climate Law

In March, the Commission opened the public consultation for the European Climate Law which is the first major realization of the New Green Deal. As part of this process, the European Commission is seeking the views of stakeholders to design climate action and share information to develop these new policies. The consultation period will run from 4 March to 27 May 2020 with the aim of adopting the law before November 2020.

This law will translate the European Union’s Green Deal commitments into law. The European climate law will enshrine the objective of climate neutrality by 2050 in European law and will set up the various financing funds. This Act sets out a greenhouse gas emissions reduction trajectory by September 2020. Thereafter the Commission will initiate a review of several EU regulations to ensure their compatibility with the climate trajectory. By June 2021 the Commission wants to re-evaluate the Emission Trading System (ETS) Directive, the Effort Sharing Regulation, the Energy Efficiency Directive, the Renewable Energy Directive and the CO2 Performance standards for Cars and vans. Public consultations for several of these regulations are already underway.

With the opening of public consultations, the Commission is seeking input from all stakeholders in order to guide its climate law. The Commission stressed the importance of scientific data and industry solutions in defining its action plan. Therefore, all companies related to the energy, environment, transport and other industrial sectors impacted by the revision of these regulations under the European Climate Law should be involved in the public consultation process in order to safeguard their interests.

VII. EU paves the way to a closer association with Africa

The European Commission and the High Representative for Foreign Affairs presented the basis for a new strategy with Africa on March 11. Several objectives are outlined in the Action Plan: establishing a partnership on green and digital transition, supporting the development of a legislative framework for trade and investment, defining partnerships in education and research, increasing investment and cooperation in the humanitarian and security field. In this sense, what the Commission is planning will affect all companies that trade or plan to trade with Africa, but also all African States themselves, which will be able to benefit from this strengthened partnership.

More specifically, the energy sector is particularly concerned, as the EU wishes to step up investment in decarbonised energy. Regulatory convergence will be promoted, in particular on e-commerce and the digitisation of financial services and data regulation. African states will benefit from a renewed flow of investment of public and private funds. Through the NDICI tool, the EU foresees more than EUR 60 billion of investment in guarantees from 2021 to 2027. In addition, the EU will provide financial and technical assistance in the implementation of the African continent’s free trade agreement. This partnership will also be an opportunity for companies with activities in Africa to strengthen their presence. The programme provides for the establishment of a regulatory framework to ensure a level playing field and investment protection in all African States.

To sum up, this new strategy marks the EU’s willingness to strengthen its relationship with Africa in various fields, from ecology to the digital economy. The aim is to reach a new Joint EU-Africa Strategy replacing the 2007 Joint Strategy after the new African-EU Summit planned for October 2020. This document sets out a renewed ambition for Africa-EU relations. It is necessary for African States as well as for companies trading with Africa to strengthen their presence in Brussels in order to make the most of these renewed ambitions.

VIII. EU to present its “Farm to Fork” Strategy

The Commission will publish at the end of April an action strategy on the agri-food sector called “Farm to Fork”. This strategy covers the entire sector, from animal farming and agricultural practices to the point of sales. The plan should set out five pillars for action: reducing the use of pesticides and chemicals in agriculture, promoting organic farming, reducing food wastage, a new regulatory framework for livestock farming, and new food marketing rules. The entire agri-food sector is therefore facing a comprehensive reform of the regulatory framework.

In more detail, the strategy will provide for a reduction in pesticide use through legally binding, quantified targets. The Commission is also considering introducing a legislative proposal to harmonise the information given on the packaging of food products. This would concern in particular the nutrient profile as well as the origin of the products. In addition, a survey to assess food waste will be launched soon, which could have an impact on food marketing regulations. Finally, animal farming is to be radically reformed. The Commission advocates a shift from a meat-based to a vegetable protein-based diet for livestock. Furthermore, rules will be put in place to encourage carbon capture.

The measures to be announced in the plan will be open for public consultation in the near future. It is therefore essential for companies and associations in the agri-food sector to make their voices heard in Brussels, but also in Berlin and Paris in order to promote their interests.