Posts Tagged ‘EU’
Guest blog by the Embassy’s Economic Attaché
One thing we hear a lot about these days is regulation. Regulation this, regulation that, it can be good or bad, national or international, too much or not enough. Views may depend on where you stand: employer or employee, big multinational or local SME, left or right or centre. But there does seem to be a growing consensus that regulation should be ‘smart’, or ‘better’, or ‘common sense’, or whatever you’d like to call it.
In EU circles the European Commission last week presented its REFIT programme, looking at areas where it made sense to regulate more, less or not at all. The UK welcomes this and has just carried out a similar exercise, but gone even further, with a Business-led Task Force set up by the Prime Minister launching a new report on cutting EU red tape.
Six top business leaders proposed a new set of principles that could be used as a checklist – or a kind of ‘common sense filter’ – against which new rules could be tested before they’re agreed. These so-called COMPETE principles would check, for example, that rules passed a Competitiveness test, and that they would be Measurable and Proportionate. (If you want to know what the rest of the letters stand for, you’ll just have to click on the link!)
In producing the report, the Task Force consulted 90 businesses and business organisations in the UK, and a further 20 business groups across Europe. They were asked what would help in creating jobs and growth. Their answers helped the Task Force compile 30 recommendations for cutting red tape, including giving employers and workers more flexibility to agree between themselves how certain issues in the labour market should work; improving guidance on the chemicals Directive REACH, so smaller companies find it easier to apply; and making it easier to provide services across borders within the EU.
The UK has already done a lot of work at home to reduce the impact of domestic regulation whilst preserving the benefits, for example, through the Red Tape Challenge. And no, that’s not a sporting event, but rather a consultative exercise that promotes open discussion on how to ensure regulation achieves its aims in the least burdensome way possible. The UK has also introduced a One-In, One-out (and now One-in, Two-out) principle, so for every new regulation introduced, one (or now two) old ones should be withdrawn.
The Business-led Task Force was keen to publish its findings now, given that European leaders will be talking about Better Regulation when they meet in Brussels on 24-25 October. We hope that this report can provide an important contribution to the debate.
So, to regulate or not to regulate? That is, of course, always the question …
Many people hold strong views about the Europe Union based on different perspectives about its role , but perhaps we don’t think enough, in the round, about the impact of EU membership and current EU rules and laws on the UK as a whole.
Therefore in July 2012 the UK Government launched the so-called “Balance of Competences” Review.
This is a two year project to examine the totality of the UK’s membership of the EU. Not a policy-making exercise, but an evidence gathering and analytical programme of work.
This week saw the publication of the first round of reports, covering areas such as the single market, health, development co-operation and humanitarian aid, foreign policy, animal health and welfare and food safety, and taxation.
Another three rounds of reports will issue before the end of 2014. Taken together, it will be the most extensive analysis of the EU’s relationship with the UK, or indeed any member state, ever undertaken.
Over the last six months the UK Government has been consulting extensively across the UK and with other EU Partners. We have listened to businesses, civil society and a range of organisations.
The first reports, drawing on this evidence, give a detailed picture of the effect of the EU’s competences (ie the powers the EU exercises in relation to member states). The initial reports have highlighted a number of the benefits that EU action brings, while also looking at some of the trade-offs and constraints it imposes. A number of themes are already emerging:
- evidence of the economic value to the UK of being part of the Single Market, and of the UK’s important role within it, although views vary about whether the Single Market necessarily requires the current volume of EU-wide employment and social policy. Such questions will be explored in later reports.
- tension between the case for EU-wide regulation and the scope for national flexibility. Harmonisation ensures consistent standards for British consumers. But the reports identify areas where harmonisation comes with costs, particularly for small businesses, and where giving space for more national flexibility could make sense. How to strike the best balance here will be a theme of our continuing efforts to secure better regulation as part of a more competitive, business-friendly EU for the future.
- areas where collective action can be effective – from tackling public health issues, to co-ordinating overseas aid, to controlling animal diseases. But the reports also highlight areas where Member States need to retain national control –in taxation, for example, or in defence, where each Government has a veto on the launch of EU military missions.
We remain open to contributions from across the EU. Evidence has been published alongside the reports, with the aim of making this process as transparent and inclusive as possible.
There are still twenty-six reports to be written and I encourage you to send in any evidence that might be relevant. The opportunity to contribute to the next round of reports continues until next month. You can read the first batch of reports, as well as access more information on what and how to contribute to future reports here.
The Home Secretary made an announcement to Parliament on 9 July on the UK’s policy towards Justice and Home Affairs in the EU.
There’s a lot of law and jargon involved, but I’ll try and keep it as simple as possible!
The bottom line is the UK government remains committed to working with EU partners to advance and protect shared interests in the JHA area.
The EU Treaties require the UK to decide by the end of next year which of the JHA measures currently in force it wants to take part in. If it doesn’t want to take part in all of them it needs to “opt out” of them all and then opt back in to those it wants to rejoin. That requires the European Commission and in some cases other EU states to agree.
Our Ministers have decided on the list of measures they want to continue taking part in, such as Europol and Eurojust and the Prisoner Transfer Framework. The measures cover co-operation in a range of areas, including to support the Schengen arrangements, even though we’re not a member of Schengen.
We will also use UK legislation to improve the working of the European Arrest Warrant. We think this is an important tool, but, like other countries, we have some concerns which we need to address, through our own laws and in the longer term working with others on reform, to make sure it works better.
The package of measures we want to continue working in represents all the key measures which we believe are important in maintaining the excellent co-operation between the UK and Sweden and to support practical co-operation between the Member States more generally, to combat cross border crime and to keep our countries safe.
It reflects a lot of discussion with EU partners and with the EU institutions and those discussions will now continue.
Our aim is to have all the necessary agreements in place in good time next year, so we can continue both to carry out the essential co-operation against crime, but also to work together to reform how the EU works so that our co-operation becomes even stronger and more relevant to the challenges we face today.
Some once said that football was a game where England played Germany over 90 minutes and extra time and then the Germans won on penalties.
Which is an inelegant way of saying that the UK and Germany are very much together on the reform team in the EU, with Sweden on side as well, of course.
Here are the key messages from our Foreign Minister’s speech last week in Germany. The full version can be found here.
The scale of the challenges facing Europe is serious. Let me touch on three: First, how we make our way in an ever more competitive global economy. Second, how we address the EU’s lack of democratic accountability. And third, how we ensure that the EU develops the flexibility to respect the diversity of its Member States.
Competitiveness and the Global Race
Germany has led the way in getting to grips with these challenges through a series of painful but impressive labour market reforms and through fiscal consolidation.
In Britain, our Government has reduced the deficit by a third over three years. The private sector has created one and a quarter million jobs. Employment is around record levels, exceeding the pre-crisis peak even though we have reduced the public sector headcount by more than six hundred thousand. We are rebalancing the economy towards high end manufacturing and exports.
Getting our finances and social models into shape is not, however, sufficient. We must also create the right regulatory environment for economic growth.
World-class German and British manufacturers are already capitalising on the opportunities that emerging markets present. We export BMWs made in Bavaria (one in four of which has an engine made in Britain) and advanced aircraft components engineered in Bristol and Bremen. But we also need to look at what comes next: the opportunities in exporting our knowledge industries and professional services.
The size of the global middle class is projected to increase by three billion by 2030. As prosperity levels increase, we want these new global consumers not only to drive an Audi and to fly in an Airbus, but to work in spaces designed by British and German architects, to negotiate international business through our law firms, and to finance those deals through London and Frankfurt.
This is one of the reasons why we are worried about the proposed Financial Transactions Tax. And why we are uncomfortable with the proposed cap on bankers’ bonuses. Not because we don’t agree that the global financial industry needs better regulation: it does, and this British Government is proud to be putting in place some of the most exacting reforms of all, following the Vickers Report. But that regulation needs to help us compete in the global race, not set our feet in concrete.
Lack of democratic legitimacy
The second major challenge is how we build the democratic legitimacy of the European Union.
I think the British people also want the EU to be a multiplier of our collective influence and values in the world, so that we can forge trade agreements that open new markets, tackle global poverty, or ensure the Iranian regime experiences real consequences for nuclear proliferation.
But they do not understand why Brussels has to interfere in how long junior doctors can work. Or why someone from another Member State should be able to continue to claim benefits in the UK even after they have moved back to their own country. I think we are all relieved that the European Commission is not going to ban Europeans from using olive oil jugs at restaurant tables. But it is extraordinary that such a decision should be within the EU’s power in the first place.
Too often, the British people feel that Europe is something that happens to them, not something they have enough of a say over. That the EU is happy speaking but does not seem interested in listening. That the EU is sometimes part of the problem, not the solution.
This is not just a British issue.
The latest Pew Research from earlier this month is a warning: a sharp fall in support for the EU across the continent. Eight points lower in Germany, at 60 percent. Two points lower in Britain, at 43 percent. 19 points lower in France, at 41 percent.
Trust in the institutions is at an all time low. The EU is facing a crisis of legitimacy.
The European Parliament plays an important role in holding European institutions to account. It can play a very positive role, as it has along with Commissioner Damanaki in the current reforms to the Common Fisheries Policy. But if the European Parliament were the answer to the question of democratic legitimacy we wouldn’t still be asking it.
I think instead that the solution lies in promoting the role of national institutions in European decision-making – because ultimately it is national governments and national parliaments that are accountable to our electorates. They are the democratic levers voters know how to pull. I want to offer some thoughts on how we might do that in a moment.
Need for flexibility
This idea of the right balance between national and European decision-making, and respect for the concepts of proportionality and subsidiarity, brings me to my third key challenge. How can we build a European Union that acknowledges and respects the diversity of its Member States? One that recognises that our national approaches to and ambitions for the European Union may sometimes differ?
These are relatively new concepts. We do not yet have the answers. But we need to start asking the right questions, as partners in a shared endeavour.
Britain in Europe
I know that our friends in Germany and across the Continent follow closely the vigorous debate on Europe that we have in Britain. They could perhaps at times be forgiven for asking themselves about our commitment to making European Union work.
But the Prime Minister couldn’t have been clearer in his speech in January.
He said that Britain’s national interest is best served in a flexible, adaptable and open European Union.
That such a European Union is best with Britain in it.
And that he will campaign for such an arrangement with all his heart and soul.
So now we want to get on with the business of delivering that reformed EU.
And here, Britain and Germany must lead the way.
A shared reform agenda
Let me set out four areas on which I think we might focus together:
First, deepening the Single Market so that we’re making the most of the growth opportunities in digital, energy and services.
Development of a digital single market by 2020 could result in a four percent increase in EU GDP. With the European e-commerce market forecast to double in size to 625 billion euros by the end of 2016, we need to start by strengthening cross-border e-commerce.
On energy, we need to go further in increasing competition across the single market, liberalising gas and electricity markets, developing new low carbon energy sources and supply corridors, and strengthening interconnections between countries to enable EU-wide trade in clean, low carbon electricity. Cheaper energy would boost British and German companies alike.
On services we need to start by ensuring that the Services Directive is fully implemented across all EU Member States. The European Commission estimated last year that just ensuring that all Member States improved their implementation to at least the current average level would add 0.4% to EU GDP. Full implementation of the Services Directive could add 2.6% to EU GDP.
Second, making regulation work for business, not hold it back.
Here we are asking businesses what proposals they want to see from the Commission for reducing the regulatory burden – where SMEs need to be exempted, where rules need to be simplified, and where regulations need to be withdrawn altogether. We look forward to identifying common priorities with Germany and other partners.
Third, building new trade relationships.
Concluding all on-going and potential free trade agreements could boost EU GDP by two percent. Germany and Britain have worked hard over the last year to put the Transatlantic Trade and Investment Partnership at the top of the agenda. It could be worth 119 billion euros a year to the European Union and 95 billion euros to the United States. But perhaps more importantly, with a combined population of almost half of global GDP and nearly a third of global trade flows, Europe and the United States will be able to shape international trading standards for decades to come.
This is why it is important that we grasp the opportunity to launch ambitious negotiations next month, in time for President Obama’s visit to Northern Ireland for the G8 Summit. And why we should not limit the potential of those negotiations by excluding certain sectors from the start. On audio-visual, for example, we should have the confidence to recognise the opportunity that the American market offers us, worth 400 billion euros and growing at five per cent per year.
And fourth, starting to make the EU more democratically responsive.
I do not want to go into great detail at this stage, not least because David Lidington, our Minister for Europe, set out some ideas in his speech at the Europaforum in Berlin earlier this month. But my strong sense is that we need to recognise that most people across Europe look to their own national institutions. We need to rediscover the role of national governments and national parliaments. Because, as Chancellor Merkel pointed out recently, Europe’s value is not measured by the growth of the acquis communautaire.
In Britain, we are looking at the balance of competences between the EU and the national level. We want this work to contribute to an informed and serious debate in the UK. We also hope it will be of interest to our European partners, as similar discussions take place in other member states.
At the same time, we should do more to help our parliaments exercise their right to work together to raise a yellow card to object to legislation where action should be taken at a national rather than a European level, in line with the principle of subsidiarity. We should explore whether the yellow card provision could be strengthened or extended to give our parliaments the right to ask the Commission to start again where legislation is too intrusive, and fails the proportionality test. And we should think about going further still and consider a red card to give national parliaments the right to block legislation that need not be agreed at the European level.
Finding the right balance between integration in Europe for those who need it, and flexibility where it is best for our economies and our democracies, is the great challenge of German and British diplomacy over the next few years. Taking our voters with us, at the same time as we modernise our economies and states, is the great challenge for German and British politicians.
The more closely we work together, the more successful we will be in building a European Union fit for the 21st Century, and one which can truly earn the support and trust of people across our Continent and beyond.
Britain and Sweden don’t differ on much. We did this week on whether to lift the EU arms embargo on the legitimate opposition in Syria.
We argued for the lift for political, security and humanitarian reasons. Our priority is a political transition that ends the conflict, allows refugees to return home, and prevents further radicalisation in Syria and the region.
We will therefore do all we can to ensure the forthcoming Geneva II conference delivers that outcome.
The decision to end the arms embargo supports those efforts to bring about political progress and a diplomatic solution by sending a message to the Assad regime. The EU will no longer be witnesses to slaughter, with a heavily armed government smashing civilians.
We have made no decision to send arms to the National Coalition. We are of course engaged in prudent planning. Our focus is on Geneva II. But we now have the flexibility to respond in the future if talks fail and the situation continues to deteriorate.
Meanwhile the UK will continue working with the National Coalition, the legitimate opposition, to build its credibility and effectiveness.
The Coalition has committed to represent the diversity of Syria through its membership. It is time for the Coalition to deliver on that promise.
We will push the Coalition to settle its internal politics quickly and transparently in order to focus on the bigger issues: its political strategy, its game-plan for Geneva II and establishing a functioning authority inside Syria.
We will continue to provide practical, non-lethal support to the moderate opposition. The UK has already provided over £12 million in such support to the Syrian opposition, civil society and human rights defenders. This money has also enabled the National Coalition to develop structures that will allow it to function more effectively on the ground in Syria.
We agree with Sweden that a political solution is the only durable answer. That is the focus now.
Last week I spent two fascinating days in Uppsala, talking to students about UK views on the future of Europe, and meeting local politicians, businesses and academics.
I stressed, as I did at a meeting with the British-Swedish Chamber of Commerce, the UK’s commitment to the EU, but also our recognition of the need for reform.
We had a top UK politician in Stockholm last week.
The Energy and Climate Change Secretary, Ed Davey, met his Swedish counterparts, Anna-Karin Hatt and Lena Ek. He also talked to actual and potential Swedish investors in the UK.
There’s a huge opportunity for Swedish investors in the UK energy market. We need £110 billion investment over the next decade to replace our ageing energy infrastructure (coal fired power plants and nuclear energy) with a more diverse and low-carbon energy mix, particularly more renewable energy.
We start the process of decarbonising our economy a long way behind Sweden, given your natural advantages. Our aim is to have 15% of our energy from renewable by 2020 (which is our EU target), whereas Sweden is already, I think, getting more than triple that, almost half its energy, from renewables.
But we’re committed to meeting our goals: indeed we’ve set a long term goal of cutting carbon emissions by 80% by 2050; that is why it is so important that we increase the share of our energy we get from renewables alongside other low carbon technologies such as carbon capture and storage.
Ed Davey and Lena Ek talked to their Danish and Dutch counterparts about the need to make the case, in the EU and beyond, for a Green Growth strategy, showing that making the planet healthier is fully compatible with continuing to grow our economies. That will also be a theme when David Cameron goes to Latvia to meet his Nordic and Baltic counterparts at the third Northern Future Forum this week.
In last week’s Riksdag debate on foreign policy, Carl Bildt highlighted the progress that the EU has made through the Eastern Partnership – a Sweden/Poland initiative, of which the UK has been a strong supporter.
That support will be seen in action this week when British Foreign Secretary Hague makes a joint visit to Moldova with Foreign Minister Bildt and Poland’s Foreign Minister Sikorski.
The visit comes at a sensitive political time in Moldova. The European message will be pursue an ambitious reform programme. Respect for human rights, combating corruption, and creating a stable, predictable and transparent business environment are all crucial to moving forward.
But before heading for Moldova our Foreign Ministers will meet on Monday in Brussels at the Foreign Affairs Council meeting. There they will have detailed discussions about many of today’s big issues, such as helping the people of Syria, countering the threat of proliferation and regional security arising from North Korea’s recent missile launch, and also the EU’s response to the Mali crisis.
This week, I too am travelling, including to talk about Britain’s views on the Future of Europe debate at Uppsala university.
As Carl Bildt underlined in the Riksdag today, the US is Europe’s main international partner, on the security and prosperity agendas.
So the UK government welcomes, as Sweden does, President Obama’s call in his State of the Union Speech last night for what he called “a Transatlantic Trade and Investment Partnership” with the EU. Britain has been arguing hard for this, including in our role as G8 presidency.
David Cameron said today:
“It’s great that President Obama has set out his determination to agree a trade deal between the EU and the United States. We discussed this issue on Monday and we are both committed to launching negotiations this year. A deal will create jobs on both sides of the Atlantic and make our countries more prosperous. Breaking down the remaining trade barriers and securing a comprehensive deal will require hard work and bold decisions on both sides. But I am determined to use my chairmanship of the G8 to help achieve this and to help European and American businesses succeed in the global race.”
Our Trade Minister, Lord Green added that this was a “once-in-a-generation opportunity to liberalise trade fully between the world’s two largest trading blocs. An agreement could boost the European economy by more than £50bn – the biggest prize from any trade deal currently under way.”