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Digital Day 2021: EU countries commit to key digital initiatives for Europe's Digital Decade

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At the online Digital Day 2021 (19 March) Ministers representing EU member states signed three Declarations to pool efforts and resources to promote international connectivity, incentivise the rollout of clean digital technologies and improve the regulatory environment for start-ups and scale-ups. These tangible commitments will help accelerate Europe's green and digital transformation and will contribute to the vision and goals of Europe's Digital Decade. In particular, 27 European countries signed the Declaration on European Data Gateways as a key element of the EU's Digital Decade, in which they committed to reinforce connectivity between Europe and its partners in Africa, Asia, the European Neighbourhood and Latin America. 25 European countries signed the Declaration on EU Startup Nations Standard, which aims to ensure that all European start-ups and scale-ups benefit from the best practices adopted by successful start-up ecosystems.

Finally, 26 European countries signed the Declaration on A Green and Digital Transformation of the EU to accelerate the use of green digital technologies for the benefit of the environment. At the same time, 26 Chief Executive Officers from the ICT sector joined the European Green Digital Coalition, committing on behalf of their companies to significantly reduce their carbon footprint by 2030, and to become climate neutral by 2040. Hosted by the Commission and the Portuguese Presidency of the Council, the fourth edition of the Digital Day is bringing together Members of the European Parliament, Ministers from Member States, industry executives and several other stakeholders. The last edition in 2019 focused on smart and sustainable agriculture, digitizing cultural heritage, as well as encouraging women's participation in the digital and technology sectors. Since then these initiatives have progressed significantly. More information is available in this joint press release by the Commission and the Portuguese Presidency of the Council of the EU.

Austria

Commission approves €146.5 million Austrian support in favour of companies joining research and innovation project in microelectronics

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The European Commission has approved, under EU state aid rules, €146.5 million in Austrian support in favour of three companies joining the existing Important Project of Common European Interest (‘IPCEI') in microelectronics approved by the Commission in 2018. The public funding is expected to unlock an additional €530m of private investments, i.e. more than three and a half times the public support.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “To deliver on the digital and green transition, we will need highly innovative and sustainable microchips and sensors for many products in our economy, ranging from mobile phones to aircraft. The Important Project of Common European Interest in microelectronics that we approved in 2018 has been supporting the development of important cutting-edge technologies in this field. The IPCEI's integration is very important for its success – we have approved additional support by Austria to three projects because they meet the high bar of adding significant value to the existing IPCEI, with important collaborations with the existing participants.”

In December 2018, the Commission approved, under EU state aid rules, an IPCEI to support research and innovation in the field of microelectronics (the ‘2018 IPCEI Microelectronics'). The project was jointly set-up and notified by France, Germany, Italy and the United Kingdom. The approved public support amounted to €1.75 billion. The 2018 IPCEI Microelectronics, which aims at developing innovative microelectronics technologies and components for automotive, Internet of Things (IoT) and other key applications (such as space, avionics, and security) and their first industrial deployment, originally involved 27 companies and two research organisations.

In December 2020, Austria notified to the Commission its plans to join the 2018 IPCEI Microelectronics, by providing €146.5m of public support to three companies (Infineon Austria, AT&S Austria and NXP Semiconductors Austria) that will carry out additional research and innovation falling within the scope and contributing to the objectives of the existing IPCEI. The companies will focus in particular on the areas of security, energy efficiency, and integration of packaging technologies for microelectronics.

The joining of an already established and ongoing IPCEI by an additional member state and projects is an exceptional circumstance. It requires a complex assessment by the Commission, to verify that the new individual projects are properly integrated in the existing roadmap and structure of the IPCEI, for example by means of establishing sufficient and valuable collaborations with the initial participants, and are genuinely adding significant value to the IPCEI in order to reach its objectives.

The Commission takes note of and welcomes the increasingly transparent, open and inclusive practice that member states have now established in designing IPCEIs to ensure that all interested member states join from the start, so that these important European projects generate even more benefits to the entire EU without unduly distorting competition.

The Commission's assessment

The Commission assessed Austria's plans under EU state aid rules, more specifically its Communication on Important Projects of Common European Interest (IPCEI). Where private initiatives supporting breakthrough innovation fail to materialise because of the significant risks such projects entail, the IPCEI state aid Communication enables member states to jointly fill the gap to overcome these market failures, while ensuring that the EU economy at large benefits and limiting potential distortions to competition.

The projects that Infineon Austria, AT&S Austria and NXP Semiconductors Austria will carry out aim at delivering additional technological innovations in energy efficient power semiconductors, on advanced security and interconnections, as well as on organic packaging technology aspects.

In this respect, the Commission found that the projects will add significant value to the 2018 IPCEI Microelectronics and will contribute to and enhance the integration of existing IPCEI. In particular:

  • They will significantly contribute to the achievement of common objective pursued by the existing IPCEI in supporting a strategic value chain, in particular through the development innovative microelectronics, technologies and components for automotive, IoT and other key applications (such as space, avionics, and security), by aiming at technology solutions that were not (sufficiently) addressed.
  • They will add significant value to the existing IPCEI by bringing important contributions to its objectives, integration, collaborations, scope, and research and development content.
  • They are highly ambitious, aiming at developing technologies and processes that go beyond current technology.
  • The companies will establish significant and valuable additional collaborative research with the existing direct partners and support the development and objectives of the relevant technology fields.
  • The projects involve significant technological and financial risks, and public support is therefore necessary to provide incentives to companies to carry out the investment.
  • The aid to each of the three companies is limited to what is necessary, proportionate and does not unduly distort competition.
  • Additional important positive spill-over effects will be generated throughout Europe.

On this basis, the Commission concluded that the Austrian plans to join the 2018 IPCEI Microelectronics are in line with EU State aid rules.

Background

In June 2014 the Commission adopted a Communication on important projects of common European interest (IPCEI), setting out criteria under which Member States can support transnational projects of strategic significance for the EU under Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU). This framework aims to encourage Member States to support projects that make a clear contribution to the EU strategic objectives.

The IPCEI Communication complements other State aid rules such as the General Block Exemption Regulation and the Research, Development and Innovation Framework, which allows supporting innovative projects with generous conditions.

Since 2014, the IPCEI Communication has been applied in the field of infrastructure as well as for integrated projects in the area of research and innovation, for microelectronics (in December 2018) and for the battery value chain (in December 2019 and in January 2021).

The IPCEI Communication is currently being reviewed to ensure it fully contributes to the Commission's green and digital objectives, following an evaluation or ‘Fitness Check' completed in October 2020. On 23 February 2021, the Commission launched a public consultation inviting all interested parties to comment on the draft revised IPCEI Communication. In this context, the Commission is proposing, among others, to further enhance the open character of IPCEIs (by, for example, providing that all Member States must be given a genuine opportunity to participate in an emerging project).

Stakeholders can respond to the consultation for eight weeks, until 20 April 2021.

The non-confidential version of the decision will be made available under the case number SA.56606 in the State Aid Register on the competition website once any confidentiality issues have been resolved.

New publications of state aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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Corporate tax rules

'Let's strike a deal on digital tax with the US now' says EPP

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"We have to get the United States on board and strike an international tax deal with them as soon as possible. It is important, however, that the US Administration accepts that a common system is needed, where big US companies cannot opt out of whatever has been agreed internationally," said Andreas Schwab MEP, EPP Group negotiator on digital taxation, ahead of the adoption of the recommendations on digital taxation by the European Parliament’s Economic and Monetary Affairs Committee.

The United States has recently indicated that it is willing to drop the so-called ‘safe harbour’ rules, which - according to tax experts - would allow big US tech companies like Amazon, Alphabet’s Google and Facebook to opt-out. "The good news is, of course, that the US recently confirmed that we are again united across the Atlantic. We will fight for a solution at G20/OECD level, but if it doesn't seem possible to get a global solution, the EU should make a move on its own digital tax now. We need a minimum EU taxation without special national tax arrangements for digital companies that will profit from harmonised and fair digital taxation," Schwab added.

The EPP Group spokesman on Economic Affairs, Markus Ferber MEP, underlined that the European Parliament is ready to transpose an international solution as soon as possible into EU law. “The effective taxation of the digital economy is not only a question of fairness, but also a litmus test for multilateralism. A credible international solution is vastly superior to Europe going it alone. I call on the European Commission and member states to focus all their energy on finding an international solution to taxing the digital economy”, Ferber stated.

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Digital economy

Europe's Digital Decade: Commission sets the course towards a digitally empowered Europe by 2030

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The Commission has presented a vision, targets and avenues for a successful digital transformation of Europe by 2030. This is also critical to achieve the transition towards a climate neutral, circular and resilient economy. The EU's ambition is to be digitally sovereign in an open and interconnected world, and to pursue digital policies that empower people and businesses to seize a human centred, sustainable and more prosperous digital future. This includes addressing vulnerabilities and dependencies as well as accelerating investment.

The Communication follows President von der Leyen's call to make the next years Europe's ‘Digital Decade'; responds to the European Council's call for a ‘Digital Compass'; and builds on the Commission's digital strategy of February 2020. The Communication proposes to agree on a set of digital principles, to rapidly launch important multi-country projects, and to prepare a legislative proposal setting out a robust governance framework, to monitor progress – the Digital Compass.

Europe's Digital Compass

The Commission proposes a Digital Compass to translate the EUʼs digital ambitions for 2030 into concrete terms. They evolve around four cardinal points:

1) Digitally skilled citizens and highly skilled digital professionals; By 2030, at least 80% of all adults should have basic digital skills, and there should be 20 million employed ICT specialists in the EU – while more women should take up such jobs;

2) Secure, performant and sustainable digital infrastructures; By 2030, all EU households should have gigabit connectivity and all populated areas should be covered by 5G; the production of cutting-edge and sustainable semiconductors in Europe should be 20% of world production; 10,000 climate neutral highly secure edge nodes should be deployed in the EU; and Europe should have its first quantum computer;

3) Digital transformation of businesses; By 2030, three out of four companies should use cloud computing services, big data and Artificial Intelligence; more than 90% SMEs should reach at least basic level of digital intensity; and the number of EU unicorns should double;

4) Digitalisation of public services; By 2030, all key public services should be available online; all citizens will have access to their e-medical records; and 80% citizens should use an eID solution.

The Compass sets out a robust joint governance structure with Member States based on a monitoring system with annual reporting in the form of traffic lights. The targets will be enshrined in a Policy Programme to be agreed with the European Parliament and the Council.

Multi-country projects

To better address gaps in the EU's critical capacities, the Commission will facilitate the rapid launch of multi-country projects, combining investments from the EU budget, member states and industry, building on the Recovery and Resilience Facility and other EU funding. In their Recovery and Resilience Plans, Member States are committed to dedicate at least 20% to the digital priority. Possible multi-country projects include a pan-European interconnected data processing infrastructure; the design and deployment of the next generation of low power trusted processors; or connected public administrations.

Digital Rights and Principles for Europeans

EU rights and values are at the heart of the EU's human centred way on digital. They should be fully reflected in the online space as they are in the real world. This is why the Commission proposes to develop a framework of digital principles, such as access to high quality connectivity, to sufficient digital skills, to public services, to fair and non-discriminatory online services – and more generally, to ensure that the same rights that apply offline can be fully exercised online. These principles would be discussed in a wide societal debate and could be enshrined in a solemn, inter-institutional declaration between the European Parliament, the Council, and the Commission. It would build on and complement the European Pillar of Social Rights. Finally, the Commission proposes to monitor in an annual Eurobarometer whether Europeans feel that their digital rights are respected.

A digital Europe in the world

The digital transformation poses global challenges. The EU will work to promote its positive and human-centred digital agenda within international organisations and through strong international digital partnerships. Combining EU internal investments with the significant funding available under the new external cooperation instruments will allow the EU to work with partners around the world in achieving common global objectives. The Commission has already proposed to set up a new EU-US Trade and Technology Council. The Communication highlights the importance of investing in improved connectivity with the EU's external partners, for example through the creation of a Digital Connectivity Fund.

Commission President Ursula von der Leyen said: “Europe has a lifetime opportunity to build back better. With the new multi-annual budget and the Recovery and Resilience Facility, we have mobilised unprecedented resources to invest in the digital transition. The pandemic has exposed how crucial digital technologies and skills are to work, study and engage – and where we need to get better. We must now make this Europe's Digital Decade so that all citizens and businesses can access the very best the digital world can offer. Today's Digital Compass gives us a clear view of how to get there.”

A Europe Fit for the Digital Age Executive Vice President Margrethe Vestager said: “This paper is the start of an inclusive process. Together with the European Parliament, the member states and other stakeholders, we will work for Europe to become the prosperous, confident and open partner that we want to be in the world. And make sure that all of us fully benefit from the welfare brought by an inclusive digital society.”

Internal Market Commissioner Thierry Breton said: “As a continent, Europe has to ensure that its citizens and businesses have access to a choice of state-of-the-art technologies that will make their life better, safer, and even greener – provided they also have the skills to use them. In the post pandemic world, this is how we will shape together a resilient and digitally sovereign Europe. This is Europe's Digital Decade.”

Background

Digital technologies have been critical to maintaining economic and social life throughout the coronavirus crisis. They will be the key differentiating factor in a successful transition to a sustainable, post-pandemic economy and society. European businesses and citizens can benefit from greater digital opportunities, fostering resilience and mitigating dependencies at every level, from industrial sectors to individual technologies. The European approach to the digital transformation is also a key factor underpinning the EU's global influence.

In her 2020 State of the Union address, Commission President Ursula von der Leyen called for Europe to demonstrate greater digital leadership with a common vision for 2030, based on clear goals and principles such as universal connectivity and the respect of the right to privacy and freedom of speech. In its conclusions of October 2020, the European Council invited the Commission to present a comprehensive Digital Compass which sets out the EUʼs ambitions for 2030.

The level of EU financing available under the Recovery and Resilience Facility will permit the unprecedented scale and intensity of cooperation among member states that is necessary to achieve a successful digital transformation. A 20% digital expenditure target has been set for each national plan, accompanying the digital component of the 2021-2027 European budget.

More Information

Europe's Digital Decade – Questions and Answers

Europe's Digital Decade – Factpage

Communication “2030 Digital Compass: the European Way for the Digital Decade”

Europe's Digital Compass – Policy page

Shaping Europe's Digital Future

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