Tag Archives: EESC

EESC welcomes Nobel Prize for Richard Thaler on nudge theory

Last week, US academic Richard Thaler received the Nobel Prize in economics for his pioneering work in the field of behavioural economics.¬† Mr Thaler is particularly well known for his research on nudge theory. He coined the term “nudging” to explain how certain actions can encourage individuals to make certain decisions.

“Nudges have two major advantages: they do not restrict the freedom of individuals, and they cost very little but have the potential to make a considerable impact,” said Thierry Libaert, rapporteur of the EESC opinion. “They can therefore be used as a complementary tool for public policies which seek to make individuals behave more responsibly towards their health, the environment and so on.”

One year before Mr Thaler’s award, the European Economic and Social Committee (EESC) argued in favour of nudging as a useful instrument for overcoming specific social, environmental and economic challenges.

In an own-initiative opinion on this topic, the EESC suggested nudging could be a fifth tool for public authorities alongside information and awareness-raising, financial incentives, legislation (prohibition or obligation) and exemplarity.

Two very well-known examples of nudges in Europe are fake flies painted inside urinals at Amsterdam airport in order to encourage men to take proper aim and the musical stairs in Stockholm’s Odenplan station, designed to get people to use the stairs rather than escalators.

However, nudges have their limitations. They need to be carefully designed and implemented. They also raise both technical and ethical questions. Nudges are not a substitute for informing individuals and educating them about their choices, nor can they replace traditional government activities such as legislation and financial incentives.

Additionally, the line between information, communication and manipulation is sometimes unclear. Nudges can be manipulative, to the detriment of individuals.

The EESC therefore proposes a code of ethics to prevent nudges from drifting towards irresponsible objectives. In his opinion, Mr Libaert mentioned four conditions that should be met when designing a nudge:

  • the process needs to be transparent;
  • the people involved should always be free to choose whether to act in one way or another;
  • they should be given reliable information;
  • they must not be made to feel guilty.

“We are very pleased that with this Nobel Prize, nudging is becoming a focus of debate. Subject to this code of ethics, nudges could be integrated into the general public policy framework and accelerate public policy implementation at very little cost,” said Mr Libaert.

EESC calls for better promotion of sugar industry

 

“This is an enormous chance for Europe’s sugar producers, but in order to fully profit from this liberalisation, they need the European Commission’s full support”, said Jos√©¬†Manuel Roche Ramo,¬†rapporteur for the EESC opinion.

When beet sugar production quotas end in October this year the European sugar industry will find itself in a completely new situation. Whether this new challenge will turn into a success story with the sugar industry profiting from unlimited sugar production for export and food use is largely dependent on how the EU supports Europe’s beet sugar processors and sugar beet farmers.

Just ahead of the abolition of quotas in sugar beet production on 1 October 2017, the European Economic and Social Committee (EESC) has adopted an own-initiative opinion on Industrial change in the EU beet sugar industry.

 

The end of beet sugar production quotas will provide the EU’s sugar industry with the possibility of unlimited sugar exports.

“Therefore it is necessary for the Commission to be more active in supporting Europe’s sugar industry”, says Mr Roche Ramo. “When negotiating free trade agreements (FTAs), the Commission needs to focus on opening the sugar markets of net sugar importers and eliminating duties on exports of EU high sugar-containing products. At the same time it should back strong rules of origin for such products to ensure that EU sugar producers benefit from increased exports”.

 

Sugar beets ‚Äď a job creator with a positive impact on the environment and the soil

“The EU beet sugar industry contributes decisively to job creation and economic activity, particularly in rural areas where jobs are rare. We therefore propose to include market tools in the Common Agriculture Policy (CAP) that support continued sugar production in the EU Member States”, says co-rapporteur¬†Estelle Brentnall. Coupled support may be necessary to reduce the risk of a decline or abandoning of beet sugar production, while direct support for farmers should be supplemented by better access to risk management. Aid for private storage must be better defined and alternative outlets for sugar beet should be promoted.

Furthermore, beet sugar production is environmentally sustainable: sugar beet is always grown in rotation with other field crops. Crop rotation helps conserve soil fertility and reduce levels of soil-borne pathogens and pests and thus reduces the requirement for plant-protection products. Sugar beet growers are usually located in close proximity to the factories that process it in order to reduce transport costs, which is also beneficial for the CO2balance.

EESC calls for caution regarding trade liberalisation in FTAs

Already, EU market availability for cane sugar for refining from the EU‚Äôs FTA partners ‚Äď namely Central America, Colombia, Peru, Ecuador and South Africa ‚Äď stands at 420 000 tonnes. Raw and white sugar from the African, Caribbean and Pacific countries and from the least-developed countries may be imported duty-free and quota-free. Moreover, the annual availability of raw sugar for refining under the reduced-duty CXL quota totals over 700 000 tonnes, set to rise to 800 000 tonnes in 2017/18.

In the EESC’s view the EU would be well advised to be more cautious regarding trade liberalisation in negotiations for new free trade agreements (FTAs).¬†“The Commission must treat sugar as sensitive in its free trade negotiations by maintaining the EU’s duties on sugar.”

 

The EESC particularly calls on the Commission to challenge the arbitrary imposition of trade-defence instruments by third-country importers and to be more assertive in the fight against the trade-distorting support policies of the world’s major sugar producers.

 

Background

With an annual output totalling around 17.2 million tonnes, the EU is the world’s leading producer of beet sugar. Sugar-producing companies purchase around 107 million tonnes of sugar beets every year from some 137 000 European growers. Beet sugar factories are usually located in rural areas with low levels of industrial activity. The EU sugar industry provides 28 000 direct jobs and 150 000 indirect jobs and is therefore an important pillar of regional employment.

Over the last decade, Europe’s sugar industry has experienced a painful phase of consolidation. Nearly half of its sugar factories have closed, leading to the loss of 4.5 million tonnes of production capacity, over 24 000 jobs and 165 000 farm suppliers.

EU Customs Union to fight against counterfeiting

“If we do not act now, we risk multilateral problems such as failure in research, innovation and investment, damage to image and quality, risks to health, safety and the environment, loss of fiscal and para-fiscal revenues, and failure to tackle organised crime” said¬†Antonello Pezzini rapporteur of the EESC opinion on¬†The counterfeit and pirated products industry, which was adopted at the EESC’s July plenary, tabling concrete proposals to fight product counterfeiting and piracy.

The production of counterfeit goods is on the rise. While it is still considered an external phenomenon, the production of counterfeit goods is also increasing in EU Member States. Criminal networks, already experienced in fraud, document forgery, tax evasion or human trafficking, see counterfeiting as a profitable business, with lower risks and the advantage of lower transport costs and circumventing customs controls. Though data in spheres of illegal activity is heavily based on estimates and approximations, the figures are in any case alarming: estimates of the value of trade in counterfeit products worldwide vary between EUR 600 billion (UN) and close to EUR 1 trillion (other international statistics). For the European Union, the OECD estimates that up to 5% or EUR 85 billion of imported goods are counterfeit or pirated, causing the loss of roughly 800,000 jobs and around 14.3 billion in annual tax revues, including VAT and excise duties.

Given that around 39% of the EU’s GDP and 26% of its employment come from intellectual property right (IPR) intensive industries, the European Economic and Social Committee (EESC) believes the EU and its Member States should no longer ignore this phenomenon, and calls on them to support affected SMEs and industries by updating, harmonising and strengthening the current regulatory framework.

Uneven regulation across the EU plays into the hands of criminals

“Both the fragmented and variable nature of national implementation of EU rules and standards and the differences in the effectiveness of customs controls play into the hands of counterfeiters and facilitate the entry of fake products into the EU. This not only endangers the competitiveness of businesses, but in many cases is also a threat to consumers’ health and public safety and security“, stressed Mr Pezzini, who urged the EU and Member States to focus on accelerating the establishment of a single European customs system with shared procedures, instruments and unified, readily available databases.

While the EU’s private sector comprising the industries most concerned by counterfeit products has a main duty in the fight against counterfeiting, it must not be left alone: the European Commission and the Member States must also do their share¬† and urgently update the regulatory framework for IPRs and adapt and harmonise criminal law sanctions in the Member States.

Furthermore, these industries and brand owners need to seek partnerships with internet site providers, content producers, electronic payment operators, advertisers/advertising networks and internet domain registers: together, they will be able to generate rapid adjustments to sudden market changes.¬†“It is in the interest of Europe’s whole economy and industry to maintain their good reputation and consequently fight all fraud. In order to have a clout on criminal networks, strong alliances between the different businesses supported by a robust legal framework are key,”¬†said Mr Pezzini.

The 3,000 free zones located in 135 different countries ‚Äď with the Tanger Med free zone in Morocco only 15 km away from the EU – need special attention, as these are the areas which are often used as places for exchanging, documenting and re-labelling the contents of containers.

 Action Plan and get consumers on board

In its opinion, the EESC calls for a new EU framework for 2018-2021 including a fully financed and coordinated Action Plan to strengthen anti-counterfeiting legislation and initiatives at EU level. Proposed measures, in addition to the ones mentioned above, include:

  • Promoting innovative tracking and monitoring applications;
  • Stepping up intelligence activity and bilateral law enforcement agreements along the entire supply chain;
  • Including anti-counterfeiting clauses in new FTAs;
  • Taking coordinated action on e-commerce and adopting common specific rules to monitor the sale of medicines and other sensitive products online;
  • Together with EMA, Europol, EFSA and ENISA, drawing up specific rules to monitor sales of drugs, foodstuffs and other sensitive products on the internet; etc.

“We also need to raise awareness”,¬†said co-rapporteur¬†Hannes Leo.¬†“It is important that people be not only informed about the potential risks the purchase of a counterfeit product could pose to their health and security, but also aware of the horrible circumstances – including forced labour and harmful environmental conditions ‚Äď in which these goods are often produced and what damage counterfeiting does to our economy and jobs.”

Countries whose businesses were most affected by counterfeiting activities between 2011 and 2013 are the US (20%), followed by Italy (15%), France and Switzerland (12%), Japan and Germany (8%).

EESC asks EU for better implementation of SME policies

Photo: EESC European Economic and Social Committee

“There is a need for a visible, coordinated and consistent horizontal policy for SMEs, based on a multiannual action plan and acknowledging the heterogeneity and diversity of European SMEs”, said¬†Milena Angelova, EESC rapporteur for the opinion on¬†Improving the effectiveness of EU policies for SMEs“.

In an opinion adopted at its July plenary, European organised civil society asks the Commission to better formulate and communicate SME policies

Small and medium-sized enterprises (SMEs) are the backbone of the European economy and have a huge potential to contribute to its development. Acknowledging that, the European Economic and Social Committee (EESC) is actively pushing EU institutions and Member States to develop strong SME support policies.

In an opinion approved at its July plenary, the EESC expressed concerns that the existing inefficiencies in the formulation and implementation of SME policies are hampering their effectiveness, and called on the Commission to address these issues.

The EESC’s vice-president,¬†Gon√ßalo Lobo Xavier, added:¬†“This opinion addresses absolutely essential questions which will have a real impact. I work closely with SMEs in Portugal, and I know the legislative framework is highly important because it does decide the way they work, their access to structural funds and other means of finance”.

The EESC praised the efforts to put SMEs at the heart of economic policies over the last decade. However, it stressed that EU policies are too broadly targeted and do not recognise the diversity and heterogeneity of SMEs. “The ‘one size fits all’ approach is a crucial problem that prevents policies from delivering”,¬†added¬†Ms. Angelova.

EU SME policies should explore the specific needs of microenterprises, family and “traditional” businesses, social enterprises, liberal professions, self-employed people, etc., which have frequently very different legal forms and ways of operation.

In addition, the Committee’s opinion calls on the EC to assess whether the¬†current definition of SMEs corresponds to their heterogeneity, sectoral dynamics, specific features and diversity.

Ms. Angelova¬†stressed: “SMEs often feel that policymakers have no idea of how their businesses actually function. The majority of EU support mechanisms seem unsuited to respond to their pressing needs for fast, clear and effective solutions”.

On the other hand, some small and micro companies are unaware of the existence of support mechanisms and have therefore no access to them. There is a wide communication gap between policy-makers and SMEs, which should be addressed urgently. The EESC pointed to the need to establish strong multi-stakeholder partnerships (SME platforms) and to involve compulsory SME representative organisations at European, national and regional level.

Members also expressed concerns over the implementation of the¬†Small Business Act for Europe, and called on the “think small first” and “once only” principles to be made¬†legally binding¬†at all levels. Effective SME support policies are needed because, unlike in other parts of the world, in Europe companies have to comply with extensive regulations at both national and supra-national level, something which significantly increases the efforts and costs to do business.

 

A WIND OF CHANGE AT THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

Europe must be more efficient, concrete and closer to its citizens. The President of the European Economic and Social Committee, HenriMalosse, turned his vision into action just three months after his election: it transforms the EESC and presents a concrete action plan to the Commission.

Henri Malosse new president of EESC

Henri Malosse new president of EESC

The Committee relies on the new powers conferred to it by the Lisbon Treaty, aimed at strengthening participatory democracy and civil dialogue. Its Bureau met on Tuesday, July 9, and decided on a plan of major structural reforms.

This reform of the working methods will have a major impact on the upstream decision making process. This will allow the Committee to adopt a mechanism of anticipation and identification of priorities in order to focus its work on real concerns in the field.

But the EESC also wants to play a follow up role, in the context of the evaluation of the Community legislation. This is why the Observatories of the Committee will now concentrate their resources on the production of impact assessments, and the EESC will soon be launching a study on the economic and social impact of the Services Directive. The Committee will also be able to implement the concrete ideas it proposes; notably, a project is to be launched against food waste in the European Union.

It is in this new context that the EESC adopted its contribution to the¬†2014 work program of the European Commission. Among the measures adopted, the Committee is requesting to develop projects related to citizens’ expectations:

  • a European action plan for learning based on existing good practice,
  • the creation of¬†Social Eurobonds¬†to finance enterprises or social projects,
  • a feasibility study of a European anti-poverty fund,
  • strengthening of the¬†Small Business Act¬†with innovative financial instruments for SMEs such as microfinance,¬†crowdfunding¬†or mezzanine financing.