EU matters business
IN PARTNERSHIP WITH LEADERS MAGAZINE
BUSINESS NEWS September–October 2013
DID YOU KNOW THAT…? ...the European Parliament backed proposal for an optional Common European Sales Law? The great majority of the Committee for Legal Affairs (JURI) of the European Parliament supported the proposal for an optional Common European Sales Law for consumers and businesses which is aimed at harmonizing contract law rules in the EU. The purpose of the proposal is mainly the removal of barriers to cross-border trade and the promotion of small and mediumsized enterprises. The 28 different sets of national rules can lead to additional transaction costs, a lack of legal certainty for businesses and a lack of consumer confidence. With the principle of subsidiarity in mind, the proposal uses an innovative approach to deepen the Single Market, providing a harmonised set of contract law rules which will co-exist with national contract law and not replace it. The view on CESL is quite different in the Council and it seems not to be easy to get all members on board. From a business’ and consumers’ point of view it can create rather more complex environment difficult to put in practice. ... a new banking supervision system will be created? The European Parliament approved the creation of a new banking supervision system, which aims to establish a single supervisory mechanism for the banks in the euro area. The European Central Bank (ECB) will have a direct oversight over approximately 150 largest banks in the EU. The system will be mandatory for members of the euro area, but also other EU Member States may join the single supervisory mechanism if they wish so. The Regulation will enter into force following the approval by the EU Council and publication in the Official Journal of the EU. Thereafter, the ECB is enabled to formally initiate all the key preparatory activities, so that it is able to fully assume its supervisory tasks in September 2014. ...the Single Market Month event was held? Between 23rd September and 23rd October 2013, the European Commission launched a campaign called “Single Market Month”, which aimed to create an opportunity to share opinions, ideas and remarks regarding the future development of the Single Market and the way EU is focusing on European citizens, entrepreneurs and experts in the area of the Single Market. The public discussion on this topic took place on the Internet via online debates and chats, so the participants had a chance to interact directly with policy makers. The month was divided into four thematic areas: Jobs, Social Rights, Banks, and e-Commerce. The most promising ideas of this campaign will be collected and included in the report which is to be published by the end of the year. These could also possibly feed into the EU legal proposals in the future. ...ITRE approved COSME and Horizon 2020? The Committee on Industry, Research and Energy of the European Parliament approved the research and innovation programme Horizon 2020 and the SMEs programme COSME for 2014–2020. Parliament’s negotiators ensured that €740 million of the Horizon 2020 budget will be used to introduce new measures to expand the group of researchers in this programme. COSME (Competitiveness of Enterprises and small and mediumsized enterprises), the other approved programme, is entirely dedicated to SMEs. For this programme, MEPs managed to reduce bureaucracy and earmark 60% of its budget for riskfinancing or loan guarantees, which are the programme‘s main tools to help SMEs with lack of finances. Finally, it was ensured that the European Institute of Technology (EIT) will have a budget of its own amounting to €2.5 billion. The budgets for the new programmes are expected to be €77 billion for Horizon 2020 and €2 billion for COSME for 2014–2020. …the European Commission identified about 150 new trade restrictions? EU Report on Potentially Trade-Restrictive Measures dealing with protectionist measures in the world carried out by the European Commission identified about 150 new trade restrictions introduced over the last year. Over the same period, it has been managed to remove only 18 of them. Although the global protectionist trend is slower, there has been a worrying
122
increase in the adoption of certain highly trade-disruptive measures which slow down the trade liberalization between the EU and its main trading partners, including the G20. The main conclusions of the report were a sharp increase in the use of measures applied directly at the borders, measures forcing to use domestic goods and unjustified support of some domestic industrial sectors. LET’S TALK NUMBERS… Red tape for EU businesses reduced by up to €32.3 billion a year President of the European Commission José Manuel Barroso pointed to the successful completion of the EU Action Programme for reducing administrative burdens. Thanks to measures taken by the Commission for the last five years, the administrative burden for businesses in the EU was reduced by up to €32.3 billion annually which represents an excess of 1.1% of the target value which was set in the Action Programme. The measures included switching to a fully electronic VAT invoicing system and reducing the number of companies that need to provide data for intra-EU trade statistics. The latest initiative, adopted in June this year, further simplified accounting rules for small companies (with max. 50 employees), with an estimated annual savings of about €1.5 billion. 35% of jobs in the EU rely on IPR-intensive industries A study of the European Patent Office (EPO) and the Office for Harmonization in the Internal Market (OHIM) revealed that approximately 39% of all economic activity in the EU (estimated €4.7 trillion per year) is generated by intellectual property rights intensive industries. A publication entitled “Industry intensive use of intellectual property rights and their contribution to economic performavvnce and employment in Europe” has focused on intellectual property and evaluated its importance for the EU economy. Approximately 26% of all jobs in the EU (56 million persons) are provided directly by the surveyed sectors and a further 9% of jobs indirectly, resulted from the study. Other findings include the fact that the average remuneration in IPRintensive sectors is more than 40% higher than in other sectors. Examples of IPR-intensive industries include manufacturing of power-driven hand tools, manufacturing of basic pharmaceutical products, manufacturing of watches and clocks or book publishing. Billions lost in VAT Gap According to a new study on the VAT Gap in Member States released by European Commission, an estimated gap of €193 billion in VAT revenues (1.5% of GDP) was recorded. The so-called VAT Gap, which is the difference between the amount of VAT due and the amount actually collected, amounts to 1.5% of EU GDP. The lower VAT income is not only a result of frauds, but unpaid VAT is also due to bankruptcies and insolvencies, statistical errors, delayed payments or legal avoidance. According to a released study, a multi-pronged approach to tackle the VAT Gap effectively should be introduced. The study recommended to simplify the system for taxpayers to comply with the rules, to reform national tax systems of Member States and finally to act strongly against frauds and tax non-payers. 26,595 million men and women in EU28 were unemployed in August 2013 According to the latest data of the EU statistics office, EUROSTAT, the unemployment rate in the EU28 and euro area in August was stable compared to the previous month. The unemployment rate was 12% in the euro area and 10.9% in the EU28. In comparison with the previous year, both indicators have risen, by 0.5% in the euro area and 0.3% in the whole EU. EUROSTAT reported that across the EU there were 26,595 million men and women unemployed in total. Among the Member States, the lowest unemployment rates were recorded in Austria (4.9%) and Germany (5.2%), while in southern European countries – Greece and Spain, the unemployment rate exceeded 25%. Both of these states have been also struggling with the highest unemployment rate of young people (under 25). EUROSTAT observed an enormous youth unemployment rate of 61.5% in Greece in June 2013.
IN THE WORLD EU and Thailand concluded second round of FTA negotiations EU-Thailand negotiations on a comprehensive free trade agreement (FTA) have finished its second round. Negotiations were held from 16–20th September in Thailand and followed up on the work done in the first round which took place in Brussels. During this round, negotiation teams discussed a wide range of issues which included goods, rules of origin, services and investment, public procurement, intellectual property, trade remedies and trade and sustainable development. Trade between the EU and Thailand reached nearly €32 billion in 2012. Both sides have agreed on a next round of negotiations which will be held in Brussels from 9–13th December 2013. EU-Singapore negotiations: Door to Southeast Asia The EU and Singapore released the text of the future Free Trade Agreement (EUSFTA) they have negotiated on 20 September 2013. It is the first EU deal with a Southeast Asian economy which brings the opportunity to open door for EU trade negotiations with other ASEAN members. Beyond this regional perspective, the EUSFTA is also expected to have significant economic effects, for example growth of EU real GDP by around €550 million in comparison to an increase of €2.7 billion for Singapore. The draft agreement is currently being translated into all 24 EU languages and will then be submitted to the European Commission and the Council of Ministers for formal approval before the final ratification in a plenary vote in the European Parliament. Taiwanese high-level business delegation in Europe Taiwanese business delegation visited Brussels to discuss current business conditions in Taiwan and in the European Union and the level of cooperation between the two partners. The group of 16 business leaders has been accepted by the Director General of BUSINESSEUROPE Markus J. Beyrer. Both sides agreed that the European Commission and the government of Taiwan should evaluate the current state of cooperation and explore possible future initiatives to further strengthening the bilateral trade with the goal of reaching an agreement on economic cooperation. Europe has been the biggest source of Taiwan’s foreign direct investment (FDI) in recent years, with US $1.7 billion invested in 2012, or 31% of the total FDI for the year. Serbia – a step closer to the EU membership On 1st September the Stabilisation and Association Agreement (SAA) between the European Union and Serbia entered into force. This step should help Serbia in convergence with the EU legal framework, while reinforcing positive economic results of the Interim Agreement on trade and trade related matters. Serbian export to the EU grew by 32.5% in 2010 and almost 15% in the following year. Moreover, during the first 11 months of 2012, Serbia exports to the EU grew by 4.8% and its imports from the EU grew by 9.2%. Serbia follows its Balkan neighbours – Macedonia, Croatia, Albania and Montenegro, where have similar SAAs already entered into force. Mission for growth to Israel In order to increase bilateral business relations and market integration in mutually beneficial ways to boost strong sustainable growth and create jobs, the Vice-president of the European Commission – Antonio Tajani conducted a mission for growth to Israel on 22nd–23rd October. The mission targeted numerous industry sectors; however, innovative and environmental technologies were crucial topics on the agenda since the Mission has been organised in conjunction with the Water Technology & Environment Control Exhibition and Conference in Tel Aviv on 22nd –24th October. The main objectives were to promote innovation and sustainable growth, help EU companies, in particular SMEs, to operate in Israel and promote EU industry in targeted sectors by participating in matchmaking events with local entrepreneurs. The mission addressed the following industrial sectors: environmental technologies, raw materials, space technologies, processed agricultural products, fashion & high-end industry and automotive industry. Brought by CEBRE – Czech Business Representation to the EU (kindly supported by Ministry of Industry and Trade of the CR), www.cebre.cz
Amsterdam Athinai Berlin Bratislava Bruxelles Bucureşti Budapest Dublin Helsingfors København Lefkosia Lisboa Ljubljana London Luxembourg Madrid Paris Praha Rïga Roma Sofia Stockholm Tallinn Valletta Vilnius Warszawa Wien