European Ombudsman Emily O'Reilly (pictured) commends the European Banking Authority (EBA) for agreeing to introduce the measures she recommended to deal with future revolving door situations. This follows her finding that the EBA should not have allowed its former Executive Director to become CEO of a financial lobby association.
According to the EBA’s reply to the Ombudsman, it is ready to forbid senior staff from taking up certain positions when they leave the EBA in the future. Shortly after the Ombudsman made her findings of maladministration in this case – in order to demonstrate its commitment to this approach - the EBA prohibited its former Executive Director from taking up another post in the private sector. The EBA has also adopted a new policy for assessing post-employment restrictions and prohibitions for staff. It has in addition put in place procedures to suspend immediately access to confidential information for staff known to be moving to another job.
The Ombudsman’s recommendations followed an inquiry - based on a complaint from Change Finance (a coalition of civil society groups) - into the EBA’s decision to allow its former Executive Director to become CEO of the Association for Financial Markets in Europe (AFME).
“The EBA has worked hard to give full effect to the recommendations I issued in this case. I am confident that the wide range of measures it has introduced will help it avoid damaging revolving door moves in the future. Other EU institutions and agencies should draw on these new EBA safeguards when revising their own rules.
I also welcome the European Commission’s decision to put in place a two-year Commission-wide cooling-off period on meetings with the CEO of AFME until 1 February 2022,” said O’Reilly.
The Ombudsman had concluded that, while the EBA had linked extensive restrictions to its approval of the former executive director’s new post at AFME, the EBA was not in a position effectively to monitor how they are implemented. The inquiry also showed that, although the EBA was informed of the job move on 1 August 2019, its outgoing executive director had access to confidential information until 23 September 2019.
The Ombudsman made three recommendations to strengthen how the EBA deals with any such future situations:
- For the future, the EBA should, where necessary, invoke the option of forbidding its senior staff from taking up certain positions after their term-of-office. Any such prohibition should be time-limited, for example, for two years.
- To give clarity to senior staff, the EBA should set out criteria for when it will forbid such moves in future. Applicants for senior EBA posts should be informed of the criteria when they apply.
- The EBA should put in place internal procedures so that once it is known that a member of its staff is moving to another job, their access to confidential information is cut off with immediate effect.
Article 16 of the EU staff regulations deals with so-called ‘revolving door’ situations, under which staff have to inform an institution if they plan to take up a job within two years after leaving the EU civil service. The institution has the right to forbid the person from taking the job if it considers that it would conflict with the interests of the EU institution. An EU institution must also prohibit its former senior officials, during the 12 months after leaving the service, from lobbying the institution's staff.
In 2019, the Ombudsman concluded an in-depth inquiry into how the European Commission manages such cases, suggesting that a more robust approach is taken with cases involving senior officials.
At the same time, the Ombudsman concluded an examination into how the EU administration deals with them in general, making a number of proposals to strengthen the transparency in this area.
EU criticizes UK's unilateral breach of Northern Ireland Protocol
Following the UK government's statement today (3 March), that they intend to unilaterally extend the grace period for certain provisions agreed in December with the UK, European Commission Vice President Maroš Šefčovič (pictured) has expressed the EU's strong concerns over the UK's action, as this amounts to a violation of the relevant substantive provisions of the Protocol on Ireland/Northern Ireland and the good faith obligation under the Withdrawal Agreement.
This is the second time that the UK government is set to breach international law.In its statement the Commission states that the UK's action constitutes a clear departure from the constructive approach that has prevailed up until now, thereby undermining both the work of the Joint Committee and the mutual trust necessary for solution-oriented co-operation.
The UK did not inform the EU co-chair of the Joint Committee. The statement says that the matter was one that should have been addressed under the structures provided by the Withdrawal Agreement. Vice President Šefčovič has reiterated that the Protocol on Ireland/Northern Ireland is the only way to protect the Good Friday (Belfast) Agreement in all its dimensions and to avoid a hard border on the island of Ireland.
The EU has been flexible in trying to find practical workable solutions, based on the Protocol, to minimize disruption caused by Brexit and to help facilitate the everyday life of communities in Northern Ireland. The Joint Committee formally endorsed these solutions on 17 December 2020 in order to help businesses adapt to the new reality.
The vice president has also recalled that at the last EU-UK Joint Committee on 24 February, the UK reiterated its commitment to the proper implementation of the Protocol, as well as the implementation without delay of all decisions taken in the Joint Committee in December 2020.
He also recalled that the mutually agreed joint engagement with Northern Irish business groups and other stakeholders was meant to jointly look into solutions. In a phone call, Šefčovič informed David Frost that the European Commission will respond to these developments in accordance with the legal means established by the Withdrawal Agreement and the Trade and Co-operation Agreement.
Hungary's Fidesz party leaves largest EU parliamentary group
Hungary’s ruling Fidesz party said today (3 March) it was leaving the largest centre-right political group in the European Parliament after the faction moved towards suspending it in a tug-of-war over Prime Minister Viktor Orban’s democratic record, write Marton Dunai and Gabriela Baczynska.
Fidesz’s departure from the European People’s Party (EPP) group is likely to reduce Orban’s influence in Brussels following a long conflict over his perceived backsliding on the rule of law and human rights.
“I hereby inform you that Fidesz MEPs resign their membership in the EPP Group,” Orban wrote in a letter to the faction’s head, Manfred Weber, which was published on Twitter by Katalin Novak, a Fidesz deputy chairwoman.
The EU has lambasted Orban for putting courts, media, academics and non-governmental organisations under tighter government control. Orban, who faces a national election next year, denies the criticism and has refused to change tack.
“I welcome the long overdue departure of Fidesz and Viktor Orban from mainstream European politics,” said Dacian Ciolos, head of a liberal group in the European Parliament. “There is no space for the toxic populism of Fidesz in mainstream European politics.”
Earlier on Wednesday, the EPP group voted overwhelmingly to allow for suspension and to make ejection of member parties easier. A separate motion to freeze out Fidesz was expected soon.
Calling the changes “a hostile move against Fidesz”, Orban reacted before the EPP faction denied its 12 Fidesz members the right to speak on behalf of the group or represent it in other work of the chamber.
In his letter, Orban wrote that limiting the ability of Fidesz members of the European Parliament to carry out their duties “deprives Hungarian voters of their democratic rights”.
The conservative EPP faction includes German Chancellor Angela Merkel’s CDU, Poland’s opposition Civic Platform, Belgian Christian democrats, France’s Les Republicains and others.
Without the 12 Fidesz members, it will have 175 EU lawmakers and remain the largest in the 705-strong chamber.
Fidesz has been suspended from the EPP pan-European party since 2019, though its EU lawmakers have so far remained in the conservative faction in the European Parliament.
Forcing a university founded by liberal billionaire George Soros to leave Hungary and Budapest’s opposition to strict conditions on receiving EU funds were “fundamental” problems, Weber said.
Mujtaba Rahman of the Eurasia Group think tank said the development was “a big strategic loss for Orban in Europe, who will now lose both the influence and protection that the EPP afforded him”.
“His departure from the EPP will lead to him adopting more extreme positions towards Brussels and escalating tensions between the two,” he said.
EU auditors probe the protection of air passenger rights during COVID-19 crisis
The European Court of Auditors (ECA) has launched an audit to assess whether the European Commission has been safeguarding effectively the rights of citizens who travelled by plane or booked flights during the coronavirus crisis. The auditors will examine whether the current rules on air passenger rights are fit for purpose and resilient enough to deal with such a crisis. They will check whether the Commission monitored that air passengers’ rights were respected during the pandemic and took action accordingly. In addition, they will assess whether member states took passenger rights into account when granting emergency state aid to the travel and transport industry.
“In times of COVID-19, the EU and member states have had to strike a balance between preserving air passenger rights and supporting the ailing airlines,” said Annemie Turtelboom, the ECA member leading the audit. “Our audit will check that the rights of millions of air travellers in the EU were not collateral damage in the fight to save struggling airlines.”
The COVID-19 outbreak and health measures taken in response have brought about major travel disruption: airlines cancelled around 70 % of all flights and new bookings plummeted. People no longer could or wished to travel, also because of the frequently uncoordinated emergency measures by different countries, such as flight bans, last-minute border closures or quarantine requirements.
EU Member States introduced further emergency measures to keep their struggling transport industry afloat, including airlines, for example by granting them unprecedented amounts of state aid. Some estimates show that throughout the crisis, until December 2020, airlines – including non-EU ones – had obtained or were obtaining up to €37.5 billion in state aid. In addition, twelve member states notified the Commission of state aid measures to prop up their tour operators and travel agencies to the tune of some €2.6bn.
Member states also allowed airlines more flexibility in refunding passengers whose flights were cancelled. The Commission issued guidelines and recommendations, including the fact that offering vouchers does not affect the passengers’ entitlement to a cash refund. However, the passengers whose flights had been cancelled were often pressured by airlines to accept vouchers instead of receiving a cash refund. In other cases, airlines did not refund passengers on time or not at all.
The EU auditors’ report is expected before the summer holiday with the aim of supporting air passengers in times of crisis and launching a general attempt to restore trust in aviation. In the context of this audit, the auditors are also checking whether the recommendations they made in their 2018 report on passenger rights have been put into practice.
Protecting passenger rights is an EU policy with direct impact on citizens and thus highly visible across member states. It is also a policy which the Commission considers to be one of its great successes in empowering consumers, as their rights are guaranteed. The EU aims to provide all air transport users with the same level of protection. The Air Passenger Rights regulation gives air travellers the right to cash refunds, to re-routing and on-the-ground support such as free meals and accommodation if their flights are cancelled or significantly delayed, or if they are denied boarding. Similar protection exists via a European Directive for people who book package deals (e.g. a flight plus hotel).
For more detail, see the audit preview 'Air passenger rights during the COVID-19 crisis', available in English here. Audit previews are based on preparatory work before the start of an audit, and should not be regarded as audit observations, conclusions or recommendations. The ECA recently published two reviews of the EU’s response to the COVID-19 crisis, one on health and the other on economic aspects. Its work programme for 2021 announced that one in four of its new audits this year will be related to COVID-19 and the recovery package.
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