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EU prepares for budget impasse and an inventive workaround on Next Generation EU 

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A senior European Commission official outlined the measures the EU would need to take should the EU fail to reach an agreement on the multi-annual 2021 - 2027 budget (MFF) and recovery package next week. 

The deal on the budget and the New Generation EU package was agreed after several days of negotiations in the summer. However, Poland and Hungary are threatening to veto the deal because of the agreement the German Presidency has reached with the European Parliament on rule of law conditionality.  

Time is running out and in order for the budget to be operational on 1 January, there would need to be an agreement between the Parliament and Council by Monday (7 December) on the budget for the first year of the seven-year budget, this would also require the agreement of heads of government at next week’s European Council (10-11 December) to the full budget package. In this scenario, it would then be rubber-stamped in a further conciliation (11 December) and placed before the European Parliament’s plenary (14-17 December) to be signed off.

The budget, but not as we know it

If the heads of government fail to reach an agreement next week it will automatically trigger the“provisional twelfths” (Article 315 TFEU) approach, which was last used in 1988. It is a mechanism that guarantees some degree of continuity and will be based on the current MFF. As the legal basis for some programmes expires at the end of the year, those programmes will not receive any further payment commitments. This includes major funding programmes, such as Cohesion Policy, the European research programme (Horizon Europe) and many more. It does not include pillar 1 of the Common Agricultural Policy, humanitarian aid and the EU’s Common Foreign and Security Policy (CFSP). Rebates will also vanish as there won’t be a replacement decision on own resources in this scenario. 

The new annual budget would also have to take into account that the EU’s overall funds will be lower due to the failure to reach an agreement on own resources and lower GNI caused by the pandemic and Brexit. This could amount to as much as 25 to 30 billion euro.

Next Generation EU

Next Generation EU, which is discrete from and additional to the multi-annual budget, could be agreed upon by different means. The senior official ruled out the use of an inter-governmental conference and separate treaty as it would take too much time and would place the debt burden on individual states, rather than allowing the EU to hold the debt in its name. However, the Commission does think that a “Community-based solution” allowed under the current treaties would be possible. This could allow enhanced cooperation between a coalition of the willing, and would need a clear link to the EU’s treaties, for example, it could be allowed through the possibility in the treaty of channeling financial assistance to member states experiencing severe difficulties, caused by exceptional occurrences (Article 122), but the senior official eluded to other options.

The possibility of circumventing some of the damage caused by Poland, Hungary and possibly Slovenia’s veto could help to focus minds as an important week approaches.

EU

Samskip launches direct container services between Amsterdam and Ireland

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Samskip has ramped up its shortsea container connections between Ireland and North Continental Europe by introducing a new dedicated service link into Amsterdam. The weekly connection will mean Irish imports can avoid post-Brexit hassles applying to goods received via UK-based distributors, while exports will benefit from greater reach into EU markets in the northern Netherlands, Germany and beyond.

Launching on 25 January, the fixed day service departs from the TMA Terminal Amsterdam on Monday evenings for arrival in Dublin on Wednesday and a weekend return to Amsterdam. This complements Samskip’s existing Rotterdam-Ireland shortsea services by offering rail, barge and road customers in the Netherlands a new Monday night departure to Ireland.

Thijs Goumans, Head of Ireland Trade, Samskip, said that the service launch came at a time when importers and exporters in Ireland-mainland Europe trades continue to weigh up options as the consequences of Brexit for supply chain management became clear.

“The Ireland-North Continent freight market is in a dynamic phase, and fixed day container services to/from Amsterdam provide the certainty on which supply chain managers serving the Dutch and German markets can base business growth,” he said. Subject to initial moves, Samskip would consider calls to connect other ports in Ireland to Amsterdam direct.

“Shortsea container services can once more prove themselves more than a match for ro-ro, particularly for products previously shipped to distributors in the UK then redistributed across the Irish Sea,” said Richard Archer, Regional Director, Samskip Multimodal. “Amsterdam is a high-performance port connecting straight into the hinterland area and the entire Samskip Ireland team is delighted by this new commitment to pan-European transport.”

Koen Overtoom, CEO Port of Amsterdam, commented: “We are very pleased with this expansion of the port’s short sea network. It underlines the strength of the services Samskip and TMA Logistics offer, as well as our strategic position. Ireland is a key market, and in these rapidly changing times a direct link presents tremendous opportunities. We will continue to work with TMA, Samskip and international partners to make this service a lasting success.”

Michael van Toledo, General Manager TMA Amsterdam, said Samskip’s rail links to Duisburg and TMA’s congestion-free road access offered a platform for growth in FMCG volumes into Ireland and pharma and dairy exports moving the other way. “The service could have been custom-made for our ambitions to grow Amsterdam as a hub for shortsea container business,” he said. “It targets the greater appetite for direct North Continent services to Ireland post-Brexit, with TMA’s cross-docking winning over trailer operators in markets further south.”

 

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Economy

European Commission launches New European Bauhaus

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The European Commission launched the design phase of the New European Bauhaus initiative (21 January). The New European Bauhaus aims to combine design, sustainability, accessibility, affordability and investment in order to help deliver the European Green Deal.

The goal of the design phase is to use a co-creation process to shape the concept by exploring ideas, identifying the most urgent needs and challenges, and to connect interested parties. As one element of the design phase, this spring, the Commission will launch, the first edition of the New European Bauhaus prize.

This design phase will lead to the opening of calls for proposals in autumn this year to bring to life New European Bauhaus ideas in at least five places in the EU, through the use of EU funds at the national and regional level.

European Commission President, Ursula von der Leyen, said: "The New European Bauhaus is a project of hope to explore how we live better together after the pandemic. It is about matching sustainability with style, to bring the European Green Deal closer to people's minds and homes. We need all creative minds: designers, artists, scientists, architects and citizens, to make the New European Bauhaus a success.”

Mariya Gabriel, Commissioner for Innovation, Research, Culture, Education and Youth said: “With the New European Bauhaus our ambition is to develop an innovative framework to support, facilitate and accelerate the green transformation by combining sustainability and aesthetics. By being a bridge between the world of art and culture on one side and the world of science and technology on the other, we will make sure to involve society as a whole: our artists, our students, our architects, our engineers, our academia, our innovators. It will kick-off a systemic change.”

The EU has been setting standards for sustainable buildings and supporting projects to improve green living for many years. The latest action is an attempt to bring these ideas closer to EU’s citizens.

 

 

 

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EU

Coming up in plenary: Vaccines, EU-US relations and Portuguese presidency 

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COVID-19 vaccines in the EU, relations with the US and the priorities of the new Council presidency will be discussed at the first plenary session of 2021.

Vaccine contracts

MEPs will hold a debate on Tuesday morning (19 January) on the need for more clarity and transparency concerning vaccine contracts and the EU’s decision-making process regarding COVID-19 vaccines.

EU-US relations

With Joe Biden taking over as president of the United States on 20 January, MEPs are hopeful for a new chapter in EU-US relations. On Wednesday morning (20 January), Parliament will debate areas where the two partners can strengthen their collaboration in the future.

Portuguese presidency

Portugal took over the six-month rotating presidency of the Council of the EU on 1 January. Portuguese prime minister António Costa will address MEPs on his country’s priorities on Wednesday morning.

Right to disconnect

The current pandemic has meant that one in three Europeans are now working from home. In a vote on Thursday (21 January), Parliament is likely to call on the Commission to make “the right to disconnect” a legal entitlement in the EU. MEPs say workers, when off work, should not feel obliged to answer work-related calls, emails and messages.

Impact of COVID-19

On Wednesday afternoon, MEPs will quiz Council and Commission representatives on the measures the EU is taking to deal with the social and employment effects of the COVID-19 crisis.

Artificial intelligence

MEPs are also set to debate and vote on how to govern the use of artificial intelligence (AI) specifically within the military and public domains. They are expected to insist on respect for human rights when using AI technologies in mass surveillance.

Gender equality

On Thursday, the Parliament will debate the EU’s strategy for gender equality as well as how Covid-19 has impacted women’s rights and how to include women in the digital economy.

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