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The Commission has adopted a proposal to give an extra transition period of six months during which payments which differ from the SEPA format can still be accepted so as to minimise any possible risk of disruption to payments for consumers and businesses. The proposal does not change the formal deadline for migration of 1 February 2014.
Internal Market and Services Commissioner Michel Barnier said: “An efficient Single Market needs an efficient SEPA. The entire payments chain – consumers, banks, and businesses – will benefit from SEPA and its cheaper and faster payments. Cross-border payments are no longer exceptional events which is why an efficient cross-border regime is needed.
As of today, migration rates for credit transfers and direct debits are not high enough to ensure a smooth transition to SEPA despite the important work already carried out by all involved.
Therefore, I am proposing an additional transition period of 6 months for those payment services users who are yet to migrate. In practice this means the deadline for migration remains 1 February 2014 but payments that differ from a SEPA format could continue to be accepted until 1 August 2014.
I regret having to do this but it is a measure of prudence to counter the possible risk of disruption to payments and potential consequences for individual consumers and SMEs in particular.
There has been evidence in the past few months and I have warned many times that migration was happening too slowly and call once more on Member States to fully assume their responsibilities and accelerate and intensify efforts to migrate to SEPA so that all can enjoy its benefits, that is, faster and cheaper payments across Europe. The transition period will not be extended after 1 August.”
The Single Euro Payments Area (SEPA) is where more than 500 million citizens, over 20 million businesses and European public authorities can make and receive payments in euro under the same basic conditions, rights and obligations, regardless of their location.
The SEPA Regulation (EC 260/2012) adopted in 2012, aims to create the reality of a European Single Market for retail payments. The SEPA Regulation marks 1 February 2014 as the point at which all credit transfers and direct debits in euro should be made under the same format: SEPA Credit Transfers (SCT) and SEPA Direct Debits (SDD).
The Commission and the Eurosystem have been monitoring progress of all stakeholders: banks, payment institutions, national and local administrations, corporates (including small and medium-sized businesses), and consumers. Although migration rates have been growing over the last few months to reach 64.1% for SCT and 26% for SDD in November, it is now highly unlikely that the target of 100% for SCT and SDD can be reached by 1 February 2014.
If no action were to be taken by the Commission and the co-legislators, banks and payment services providers would be required to stop processing payments that differ from the SEPA format as of 1 February 2014. This could result in serious difficulties for market participants that are not yet ready, particularly SMEs, who could have their payments (incoming or outgoing) blocked.
That is why the Commission is making a proposal today to amend the SEPA Regulation and minimise the risk of possible disruption. The introduction of a transitional period of six months, until 1 August 2014, means that the SEPA end-date remains the same but banks and payment institutions will be able to agree with their clients to process payments that differ from the SEPA standard until then. After 1 August 2014, there will be no further transitional period.
Taking into account the urgency of the situation, the Commission urges the co-legislators to rapidly take up and agree this proposal so as to ensure legal clarity for all stakeholders. The Commission also calls upon Member States to ensure that, should the proposal still be in process of adoption on 1 February 2014, banks and payment services providers will not be penalised for continuing to process legacy payments in parallel with SEPA payments. For this reason, the proposal, if adopted after 1 February 2014 by the Council and Parliament will have a retroactive effect as from 31 January 2014.
Participants of the SEPA High Level meeting which brings together high-level representatives from the European Central Bank and board members of the Eurosystem central banks were consulted on this initiative on 19 December 2013.
EURELECTRIC President and E.ON CEO Johannes Teyssen has called on the German and French governments to set up a high-level group to explore the feasibility and benefits of an aligned French and German energy market design, in particular on inter-operability of capacity remuneration mechanisms which could then be extended to other neighbouring countries. The call was made at a conference in Paris today, organised by EURELECTRIC’s French member UFE.
A long-standing proponent of energy market integration, EURELECTRIC is pushing for greater coordination between EU member states as they strive to address concerns regarding generation adequacy and soaring costs for renewables.
‘We cannot declare failure on Europe’s energy system, the backbone of our society. We, the people of Europe, our politicians in Brussels and in the 28 capitals, need to confront the situation and fix it now!’Mr Teyssen said.
Regional initiatives had proven successful in the past to integrate European electricity markets, he noted. For instance, market coupling between France, Germany and the Benelux has optimised the use of interconnection capacity and reduced prices for consumers.
The conference was attended by several high-level representatives of the French government, notably Philippe Martin, Minister of Energy, and Arnaud Montebourg, Minister of Industrial Renewal.
On 24 June 2013, the European Commission held a full-day conference on “The EU Dairy Sector: Developing Beyond 2015”, in the context of the abolition of the milk quotas that year. 20 CEJA young farmers attended the conference from across the European Union (EU) in order to contribute to the important discussion on the future of the sector, particularly in the context of competitiveness on the international market.
The conference, set on a backdrop of concerns that the new Common Agricultural Policy (CAP) will not be able to address issues related to the end of the milk quotas in 2015, focused on new ideas for additional policy tools to keep the future of the EU dairy sector sustainable. The conference was invite-only, and participants included a number of European producers as well as Ministers and senior ministry officials; Members of the European Parliament; and representatives from national permanent representations, industry, consumers and environmental groups. The Commissioner for Agriculture and Rural Development, Dacian Cioloş, opened the conference with a speech focusing on the reasoning behind the conference and the importance of input from participants, stating that: “Things are now in your hands. I encourage you to come forward with analyses, questions and ideas which are pragmatic and realistic given the diversity of the European dairy sector.”
This was followed by detailed presentations from experts, presenting market data and projections for the next years of European dairy production, particularly in terms of the international market context. Participants were then divided into workshops to “brainstorm” suggestions to ensure territorial sustainability of the sector, to combat market volatility and to rebalance the food supply chain. During the concluding plenary session, CEJA Vice-President Paola Del Castillo spoke on the subject of attracting young farmers to the dairy sector, highlighting the fact that: “The future of the sector depends on young people; so the sector needs profitability, market transparency and improved access in order to attract young farmers.” Speaking after the conference, CEJA President Mr Bartolini added: “CEJA is committed to working with these ideas in order to develop concrete suggestions for the future to submit to the European Commission, in an attempt to further the work which has begun today. The dairy sector presents important opportunities for young farmers entering agriculture, and we must ensure that it has the future prospects to accommodate them.”
On 29 August 2013, CEJA (Confederation Europeenne des Jeunes Agriculteurs) President, Matteo Bartolini, opened the conference to a hundred young farmers from across Hungary, Slovakia and the rest of Europe in Tata, Hungary.
The young farmer and winegrower from Umbria, Italy, gave an overview of the content of the recently agreed Common Agricultural Policy (CAP) reform to the audience of young farmers, underlining the importance of the inclusion of a strong common installation policy in the new CAP, made-up of strong measures in both Pillars.
Mr Bartolini then called upon the young farmers to contact their ministers about these issues, to ensure that they get the best deal they possibly can out of this monumental reform of the CAP.
Other speakers included agricultural experts, advisors, and representatives from both the Hungarian and Slovakian ministries, as well as both Presidents of the two national young farmer organisations; AGRYA in Hungary and ASYF in Slovakia.
The conference focused on the future framework of agricultural policy in the European Union (EU) following on from the June political agreement on CAP which was made on 26 June 2013.
This agreement included a mandatory top-up of direct payments for young farmers and installation aid under rural development, among other policies.
This is why it is crucial that all Member States stand by what they have previously said about the need for generational renewal in the EU agricultural sector, and choose a calculation method which maximises the 2% of their national budget in their particular situation; opt for young farmer installation aid as a key part of their Rural Development Programme, for which particularly high co-financing rates are available if a Member State requires them; and select most favourable and relevant measures possible as part of their young farmer subprogramme.
Speaking directly to the Hungarian and Slovak young farmers present at the conference, the CEJA President called on the audience for their support, saying: “We will do our best to represent your views at the European level and to achieve progress for young farmers across the Union. I, and my team of Vice-Presidents, will dedicate the coming months to ensure that farmers across the EU get the best deal possible out of the CAP reform; Europe can now start to implement serious measures to address the age crisis in European agriculture.”
The European Union supports Georgia with a new € 16 million programme on Border Management and Migration.
On Thursday 11 June, 2013 the EU Commissioner for Enlargement and Neighbourhood Policy Štefan Füle, and the State Minister for European and Euro-Atlantic Integration, Alexander Petriashvili, signed the financing agreement for a four year programme totalling € 16 million: “Enhancing Georgia’s Capacity for Border Managements and Migration”.
Good governance and respect for human rights are integrated into this new programme, which will:
- Improve Georgia’s border management, by supporting agencies active in this field, encouraging the exchange of data and providing modern equipment for the monitoring of borders in line with the EU-standards;
- Strengthen the government’s capacity to coordinate and manage migration through technical assistance. In particular, it will support Georgian authorities to implement their Migration Action Plan, and therefore reduce irregular migration in line with human rights principles as well as with the needs of the national labour market;
- Enhance the government’s capacity to fight against cross border crime and against trafficking in human beings by supporting the State Migration Commission and the State Fund for Victims of Trafficking in Human Beings.
Border management and migration are key areas in the dialogue on visa liberalisation between the EU and Georgia, and integral part of the Visa Liberalisation Action Plan.
At the occasion of the signature, Commissioner Füle pointed out: We welcome the measures taken by Georgia to improve proper management of borders and to promote legal migration, two key aspects in our dialogue on visa liberalisation. This is the largest programme so far in these fields and it will accompany Georgian efforts for the next four years.
This is a concrete initiative which translates the principle of “More-for-More “ launched in the frame of the Eastern Partnership Integration and Cooperation programme (EaPIC): the more and the faster a country progresses in its reforms on democracy and human rights, the more support it will get from the EU.
In this context, Georgia benefited from additional EU support of € 22 million in 2012. The funds were used to scale up an existing programme supporting Criminal Justice Reform, with a specific focus on human rights (€ 6 million) and to prepare a new project on “Enhancing Georgia’s Capacity for Border Managements and Migration” (€ 16 million). The budget will be used for providing grants to civil society, working with International Organisations, supporting Georgian institutions and purchasing specialised equipment.
EU Trade Commissioner De Gucht stated:
“I am delighted that the Council has today decided to give the European Commission ‘the green light’ to start trade and investment negotiations with the United States.
This decision decision sends an important signal to people across Europe that we are united in our determination to create jobs and strengthen our economies on both sides of the Atlantic. Our aim is to release the untapped potential of a comprehensive transatlantic trade and investment partnership (TTIP) by bringing our economies closer together than ever before. We will achieve this through increased access to the US market, by working with the US towards setting global standards and by greater compatibility between our respective regulations.
In short, this deal will be about streamlining our economies where it makes sense to do so by making it easier and faster for our companies to do business together. In turn, that will have the knock-on effect of real savings for consumers as well as the creation of tens of thousands of jobs for Europeans.
At the same time, Europe is going into these negotiations enthusiastically, but realistically. Domestic environmental, labour, privacy or safety standards, and policies to protect consumers cannot and will not be lowered as a means to promote trade and investment.
Latest estimates show that a comprehensive and ambitious agreement between the EU and the US could bring overall annual gains of between 0.5% and 1 % in GDP for the EU. This would be equivalent to at least €86 billion of added annual income for the EU economy. In other words, by reducing red-tape and lowering consumer prices, a future trade deal with the United States would put almost an additional €545 per year on average in the pockets of a European family.
As regards audiovisual services, what is really at stake in this sector is the digital revolution of the media environment. But there is currently no EU legislation on digital media. The European Commission has recently invited all interested parties to comment on a Green Paper on this issue. Hence, we do not want to treat it now, but come back to the matter at a later stage.
Let me be clear: this is not a carve-out. Audiovisual services are presently not in the mandate, but the mandate clearly indicates that the Commission has the possibility to come back to the Council with additional negotiating directives after on the basis of a discussion with our US counterparts.
We are ready to discuss it with our American counterparts and to listen to their views on this issue. That’s when we’ll come to a conclusion on if we will ask for additional negotiating directives.”
What has happened so far
At the November 2011 EU-US Summit, leaders established a High-Level Working Group on Jobs and Growth, led by US Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht. The Working Group was tasked to identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness. The final report of the Group, published on 13 February 2013, recommended launching the negotiations.
It concluded that a comprehensive agreement covering all sectors would be strongly positive, opening up trade and bringing a welcome boost to economic growth and job creation on both sides of the Atlantic. The European Commission proposed negotiating directives to the Member State on 12 March 2013 (IP/13/224).
In May 2013, the European Parliament adopted a resolution that expressed its intention to follow closely the process and contribute to its successful outcome. The decision taken today by the EU Member States confirms the European Commission has all the necessary endorsement to use its negotiating powers and enter into the formal transatlantic negotiations as soon as possible.
EU-US trade flows
The EU and the US are the world’s largest economic powers, accounting together for about half of the world GDP. This is also reflected in the unparalleled trade and investment flows. Every day we trade goods and services worth €2 billion. The US is the EU’s biggest export market, buying annually €264 billion of EU products, i.e. 17% of total EU exports. In addition to that, the transatlantic trade in services amounts to around €260 billion per year. The total US investment in the EU is three times higher than in all of Asia, and EU investment in the US is around eight times the amount of EU investment in India and China together. Overall, the transatlantic economy supports some 15 million jobs on both sides.
The Commission has proposed extending the automatic exchange of information between EU tax administrations, as part of the intensified fight against tax evasion.
Under the proposal, dividends, capital gains, all other forms of financial income and account balances, would be added to the list of categories which are subject to automatic information exchange within the EU. This paves the way for the EU to have the most comprehensive system of automatic information exchange in the world.
Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud, said: ” With today’s proposal, Member States will be better equipped to assess and collect the taxes they are due, while the EU will be well positioned to push for higher standards of tax good governance globally. It will be another powerful weapon in our arsenal to lead a strong attack against tax evasion.”
Two key pieces of legislation already provide for the automatic exchange of information within the EU.
The EU Savings Tax Directive ensures that Member States collect data on the savings of non-resident individuals, and automatically provide this data to the tax authorities where those individuals reside. This system has been in place since 2005. A proposal is on the table in Council to strengthen this Directive, and enlarge its scope. At the European Council in May 2013, Member States committed to adopting the revised Savings Directive before the end of the year.
The Administrative Cooperation Directive foresees the automatic exchange of information on other forms of income from January 1 2015. These are: employment, directors’ fees, life insurance, pensions and property. Today’s proposal seeks to revise the Administrative Cooperation Directive, so that automatic information exchange will also apply to dividends, capital gains, other financial income and account balances from that date.
Today’s proposal, together with the above-mentioned provisions on automatic exchange, will mean that Member States share as much information amongst themselves as they have committed to doing with the USA under the Foreign Account Tax Compliance Act (FATCA).
In December 2012, the Commission presented an Action Plan for a more effective EU response to tax evasion and avoidance (see IP/12/1325). It sets out a comprehensive set of measures to help Member States protect their tax bases and recapture billions of euros legitimately due. The Action Plan highlights the need to promote automatic information exchange as the European and international standard of transparency and exchange of information in tax matters.
The ECOFIN Council on 14 May 2013 welcomed the Action Plan. The European Council on 22 May 2013 requested the extension of automatic exchange of information at EU and global level, for a better fight against tax fraud, tax evasion and aggressive tax planning and welcomed the Commission’s intention to make a proposal in this regard.
Yesterday, the European Commission published its 2013 Convergence Report on Latvia, together with a citizen’s summary that briefly explains the report and the rationale behind it. The Commission concludes that Latvia has achieved a high degree of sustainable economic convergence with the euro area and proposes that the Council decide on Latvia’s adoption of the euro as from 1 January 2014.
Olli Rehn, Commission Vice-President responsible for Economic and Monetary Affairs and the Euro said, “Latvia’s experience shows that a country can successfully overcome macroeconomic imbalances, however severe, and emerge stronger. Following the deep recession of 2008-9, Latvia took decisive policy action, supported by the EU-IMF-led financial assistance programme, which improved the flexibility and adjustment capacity of the economy within the overall EU framework for sustainable and balanced growth. And this paid off: Latvia is forecast to be the fastest-growing economy in the EU this year.”
He added: “Latvia’s desire to adopt the euro is a sign of confidence in our common currency and further evidence that those who predicted the disintegration of the euro area were wrong.”
The Convergence Report concludes a positive assessment of Latvia’s economic performance against the convergence criteria set out in the EU Treaty as follows:
The average inflation rate in Latvia in the 12 months to April 2013 was 1.3%, well below the reference value of 2.7%, and it is likely to remain below the reference value in the period ahead. While short-term factors (notably the VAT cut last July) have contributed to the particularly low current level of inflation, the analysis of underlying fundamentals and the fact that the reference value has been met by a wide margin support a positive assessment of the fulfilment of the price stability criterion. Latvia will need to remain vigilant to keep inflation at a low level, including by maintaining a prudent fiscal policy and keeping domestic demand on a sustainable path.
Public finances (deficit and debt)
The general government deficit-to-GDP ratio reached 8.1% in 2010, but decreased to 1.2% in 2012 and is projected to remain at 1.2% in 2013 according to the Commission’s latest Spring Forecast. The general government debt stood at 40.7% of GDP at end-2012. The Commission considers that the excessive deficit has been corrected in a credible and sustainable way and has recommended that the EU Economic and Financial Affairs Council (ECOFIN) close the excessive deficit procedure for Latvia (see MEMO/13/463). If this is done, Latvia will fulfil the criterion on the government budgetary situation.
Latvia’s average long-term interest rate over the year to April 2013 was 3.8%, below the reference value of 5.5%. The spreads vis-à-vis euro area long-term benchmark bonds have been declining markedly since 2010, which reflects market confidence in Latvia.
The Latvian lats has participated in the Exchange Rate Mechanism (ERM II) since 2 May 2005, which is considerably more than the minimum two years. When it joined ERM II, the Latvian authorities committed to keep the lats within a ±1% fluctuation margin around the central rate. During the two years preceding this assessment, the lats exchange rate did not deviate from its central rate by more than ±1% and it did not experience tensions.
Other factors have also been examined, including balance of payments developments and integration of labour, product and financial markets. Latvia’s external balance adjusted significantly during the crisis, supported also by improvements in its external competitiveness. Latvia’s economy is well integrated within the EU economy through trade and labour market linkages, and it attracts sizeable levels of foreign direct investment. The integration of the domestic financial sector into the EU financial system is substantial, mainly due to a high level of foreign ownership of the banking system.
Finally, Latvia’s legislation in the monetary field is compatible with EU legislation.
This assessment is completed by the European Central Bank’s (ECB) own convergence report, also published today.
Throughout the crisis, Latvia has successfully managed a difficult macro-economic adjustment process. Determined implementation of the EU-IMF-led financial assistance programme helped the country to steer out of a deep recession and to return to economic growth.
According to the EU Treaty, the Commission and the ECB report every two years or upon request by a Member State with a derogation on the subject. On 5 March this year, Latvia formally asked the Commission to deliver an extraordinary convergence report with the aim of joining the euro from 1 January 2014.
The conditions for euro adoption consist of four stability-oriented economic criteria regarding the government budgetary position, price stability, exchange rate stability and convergence of long-term interest rates which need to be fulfilled in a sustainable manner. National legislation on monetary affairs must also be in line with the EU Treaty.
According to the Treaty, additional factors also have to be taken into account in the assessment (balance of payments, market integration) as indicators that the integration of a Member State into the euro area will go ahead without problems and to broaden the view on the sustainability of convergence.
ECOFIN Council will take the final decision on the adoption of the euro in Latvia in July, after the European Parliament has given its opinion, euro area Finance Ministers have given a recommendation and EU leaders have discussed the subject at the European Council meeting on 27-28 June.
The procedure will be fully completed once the Council of Ministers, acting by unanimity of its euro area Member States and Latvia, has irrevocably fixed the exchange rate of the lats to the euro.
The agreement between the Commission, the Council and the Parliament establishes a core transport network to be established by 2030 to act as the backbone for transportation within the Single Market.
Siim Kallas, Commission Vice-President responsible for transport, welcomed the agreement proposals to transform the existing patchwork of European roads, railways, airports and canals into a unified transport network (TEN-T).
Vice-President Kallas said: “This is a historic agreement to create a powerful European transport network across 28 Member States. Transport is vital to the European economy, without good connections Europe will not grow or prosper. This agreement will connect East with West and replace today’s transport patchwork with a network that is genuinely European.”
Transport financing under the Connecting Europe Facility (for the period 2014–2020) will also focus on this core transport network, filling in cross-border missing links, removing bottlenecks and making the network smarter.
The new core TEN-T network will be supported by a comprehensive network of routes, feeding into the core network at regional and national level. This will largely be financed by Member States, with some EU transport and regional funding possibilities, including with new innovative financing instruments. The aim is to ensure that progressively, and by 2050, the great majority of Europe’s citizens and businesses will be no more than 30 minutes’ travel time from this comprehensive network.
Taken as a whole, the new transport network will deliver:
safer and less congested travel
as well as smoother and quicker journeys.
The new EU infrastructure policy aims at creating a real network and no longer focuses on isolated projects. The guidelines contain precise maps of the network which has been identified on the basis of an objective methodology.
This agreement, reached in trialogue negotiations between the European Parliament, Council and European Commission, must be formally approved by the European Parliament Plenary and Council.
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