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European Parliament and Council negotiators reach compromise agreement on future EU budget

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Following ten weeks of intense negotiations and 12 trilogues, an EU budget for 2021-2027 moved a step closer to a conclusion. The agreement covers the next Multiannual Financial Framework (MFF 2021-2027), Recovery Fund and new own resources. The compromise will need to be endorsed formally by both institutions, but while agreement in the Parliament may now be secure, it is not sure that there will be a smooth passage in Council.

In the compromise, Parliament obtained €16 billion on top of the package agreed by heads of state or government at their summit in July. €15bn will reinforce flagship programmes to protect citizens from the COVID-19 pandemic, provide opportunities to the next generation, and preserve European values. €1bn will increase flexibility to address future needs and crises.

The summer negotiations of heads of government took a gruelling four-and-a-half days, the new money was not as much as the parliament wished to secure, but with the start of the new funding period fast approaching (1 January 2021) it was urgent to make progress. 

The plan is to fund this increase in large part through new ‘own resources’, that is to say resources that come from the European Union’s revenue rather than national budgets. 

New Own Resources

The EP negotiators have devised a roadmap to introduce new Own Resources during the next seven years. The roadmap is incorporated into the ‘Interinstitutional Agreement’, a legally binding text. 

In addition to the plastics-based contribution as of 2021, the roadmap includes an ETS (Emissions Trading System)-based Own Resource (from 2023, possibly linked with a carbon border adjustment mechanism), a digital levy (from 2024), and an FTT-based Own Resource as well as a financial contribution linked to the corporate sector or a new common corporate tax base (from 2026).

Orbán threat

Hungarian Prime Minister Viktor Orbán has written to the president of the European Commission threatening to veto any agreement on the budget, because of an agreement reached last week on attaching ‘rule of law conditionality’ on the receipt of any funds.

The compromise agreement on the rule of law reached last week ensures that the conditionality is not just applied when EU funds are misused directly, but also apply to systemic issues like a member state respecting democracy, equality, and respect for human rights including the rights of minorities. There is a specific article that clarifies the scope and lists examples, such as threatening the independence of the judiciary. 

The mechanism can be triggered not only when there is a breach, but also when there is a serious risk that EU funds could finance actions that are in conflict with EU values. 

MEPs were also keen to defend the final beneficiaries who can file a complaint to the Commission via a web platform and who MEPs insisted shouldn’t suffer because of the failings of their government. 

As Hungary is one of the largest beneficiaries of EU funding, it is thought that they will not want to obstruct agreement on the overall budget. 

EU Flagship programmes

The parliament’s top priority was to secure an increase for flagship programmes that were at risk of being underfinanced following the European Council’s July 2020 agreement, jeopardizing the EU’s commitments and priorities, notably the Green Deal and the Digital Agenda.

The additional funds will be drawn mainly from amounts corresponding to competition fines (which companies have to pay when they do not comply with EU rules), this is in line with Parliament’s long-standing request that money generated by the European Union should stay in the EU budget.

Thanks to this compromise, the European Parliament has tripled in real terms the envelope for EU4Health, ensured the equivalent of an additional year of financing for Erasmus+ and ensured that research funding keeps increasing.

Checking how Next Generation EU funds are spent: Enhancing budgetary scrutiny

Concerning the expenditure of Next Generation EU funds, Parliament secured that the three institutions will meet regularly to assess the implementation of funds. The expenditure will be spent in a transparent manner and Parliament, together with Council, will check any deviation from previously agreed plans.

The recovery instrument (Next Generation EU) is based on an EU treaty article (Art. 122 TFEU) which does not provide for a role for the European Parliament. EP negotiators have also obtained a new procedure, setting up a “constructive dialogue” between Parliament and Council on legal acts linked to the new instrument.

Crime

Over 40 arrested in biggest-ever crackdown against drug ring smuggling cocaine from Brazil into Europe

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In the early hours of the morning (27 November), more than a thousand police officers with the support of Europol carried out co-ordinated raids against the members of this highly professional criminal syndicate. Some 180 house searches were executed, resulting in the arrest of 45 suspects. 

The investigation uncovered that this drug trafficking network was responsible for the annual importation of at least 45 tonnes of cocaine into the main European seaports, with profits exceeding €100 million over the course of 6 months.

This international sting, led by the Portuguese, Belgian and Brazilian authorities, was carried out simultaneously by agencies from three different continents, with coordination efforts facilitated by Europol:

  • Europe: Portuguese Judicial Police (Polícia Judiciária), Belgian Federal Judicial Police (Federale Gerechtelijke Politie, Police Judiciaire Fédérale), Spanish National Police (Policia Nacional), Dutch Police (Politie) and the Romanian Police (Poliția Română)
  • South America: Brazilian Federal Police (Policia Federal)
  • Middle East: Dubai Police Force and Dubai State Security

Results in brief 

  • 45 arrests in Brazil (38), Belgium (4), Spain (1) and Dubai (2).
  • 179 house searches.
  • Over €12m in cash seized in Portugal, €300,000 in cash seized in Belgium and over R$1m and US$169,000 in cash seized in Brazil.
  • 70 luxury vehicles seized in Brazil, Belgium and Spain and 37 aircrafts seized in Brazil.
  • 163 houses seized in Brazil worth in excess of R$132m, two houses seized in Spain worth €4m, and two apartments seized in Portugal worth €2.5m.
  • Financial assets of 10 individuals frozen in Spain.

Global co-operation 

In the framework of intelligence activities underway with its operational counterparts, Europol developed reliable intelligence concerning the international drug trafficking and money laundering activities of a Brazilian organized crime network operating in several EU countries.

The criminal syndicate had direct contact with drug cartels in Brazil and other South American source countries who were responsible for the preparation and the shipments of cocaine in maritime containers bound to major European seaports.

The scale of cocaine importation from Brazil to Europe under their control and command is massive and over 52 tonnes of cocaine were seized by law enforcement over the course of the investigation.

In April 2020, Europol brought together the involved countries who have since been working closely together to establish a joint strategy to bring down the whole network. The main targets were identified on either sides of the Atlantic Ocean.

Since then, Europol has provided continuous intelligence development and analysis to support the field investigators. During the action day, a total of 8 of its officers were deployed on-the-ground in Portugal, Belgium and Brazil to assist there the national authorities, ensuring swift analysis of new data as it was being collected during the action and adjusting the strategy as required.

Commenting on this operation, Europol’s Deputy Director Wil van Gemert said: "This operation highlights the complex structure and vast reach of Brazilian organized crime groups in Europe. The scale of the challenge faced today by police worldwide calls for a coordinated approach to tackle the drug trade across continents. The commitment of our partner countries to work via Europol underpinned the success of this operation and serves as a continued global call to action."

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coronavirus

Commission approves German scheme to compensate accommodation providers in the field of child and youth education for damages suffered due to the coronavirus outbreak

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The European Commission approved, under EU state aid rules, a German scheme to compensate accommodation providers for child and youth education for the loss of revenue caused by the coronavirus outbreak. The public support will take the form of direct grants. The scheme will compensate up to 60% of the loss of revenues incurred by eligible beneficiaries in the period between the beginning of the lockdown (which started on different dates across the regional states) and 31 July 2020 when their accommodation facilities had to be closed due to the restrictive measures implemented in Germany.

When calculating the loss of revenue, any reductions in costs resulting from income generated during the lockdown and any possible financial aid granted or actually paid out by the state (and in particular granted under scheme SA.58464) or third parties to cope with the consequences of the coronavirus outbreak will be deducted. At the central government level, facilities eligible to apply will have at their disposal a budget of up to €75 million.

However, these funds are not earmarked exclusively for this scheme. In addition, regional authorities (at Länder or local level) may also make use of this scheme from the local budgets. In any event, the scheme ensures that the same eligible costs cannot be compensated twice by different administrative levels. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors for the damages caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the German scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damages. The Commission therefore concluded that the scheme is in line with EU state aid rules.

More information on actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.59228 in the state aid register on the Commission's competition website.

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EU

Commissioner Gabriel participates in European Researchers' Night 2020

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The 15th edition of European Researchers' Night, the largest research communication and promotion event in Europe, takes place this evening (27 November). Events will be organized in 388 cities in 29 countries, giving people the chance to discover science in a fun way. They will take place physically, virtually, or in a hybrid way, in accordance with national measures in place in response to the current pandemic.

Innovation, Research, Culture, Education and Youth Commissioner Mariya Gabriel will give opening speeches at events in Sofia, Bulgaria and Perugia, Italy. Ahead of this evening's proceedings, she said: “It is fundamental to make science and research accessible to all and to show the impact of science in citizens' daily lives. This is why the European Researchers' Night is so important: it is an event open to all, even accessible from home this year. It showcases research projects and their results in an entertaining way and is a great opportunity to discover and engage with real-life researchers and experts in their respective fields.”

European Researchers' Night is funded by Marie Skłodowska-Curie Actions and in 2020, projects focus mainly on environment, sustainability and climate change.

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