EurActiv.com

EU news and policy debates across languages

06/12/2016

Juncker rejects UK push for independent scrutiny of EU laws

UK & Europe

Juncker rejects UK push for independent scrutiny of EU laws

Business Minister Baroness Neville-Rolfe was canvassing support for reform in Brussels yesterday. [Department of Business, Innovation and Skills]

EXCLUSIVE: The new European Commission has rejected the UK Government’s call to set up an independent body to scrutinise EU regulation and impact assessments before and after legislative proposals are adopted by the executive.

Jean-Claude Juncker’s spokeswoman, Natasha Bertaud, told EurActiv that impact assessments would remain an internal matter before proposals were adopted. Frans Timmermans, Juncker’s choice for the new post of vice president in charge of better regulation, would ensure their quality, she said, after pointing to EU treaties governing Commission procedures.

Currently research on the impact of regulation is looked over by an internal Commission department. It is then usually appended to a communication, white paper or proposal, which is then put out for public consultation. 

An independent body would also review any proposal again if it was significantly changed during negotiations between the Council of Ministers and the European Parliament, according to the UK plan. 

But Juncker’s spokeswoman said: “External review of an impact assessment can always be done after adoption by the Commission of its proposal – the Parliament already conducts such scrutiny now and this is welcomed.”

“External advice could play a role in advising the Parliament and the Council on the impacts of their proposed amendments, which are not systematically impact assessed today, if they wish to seek it.”

UK Business Minister Baroness Lucy Neville-Rolfe told her EU counterparts in the Competitiveness Council in Brussels yesterday (25 September) that the Commission should carry out “meaningful consultation” on draft assessments before suggesting new EU rules.

“Legislation is too often produced without fully understanding the likely impact on businesses and consumers or whether action at EU level is strictly necessary,” a document circulated to embassies, MEPs, the EU institutions, and ministers, said. 

The executive should commit to slashing a set percentage of EU red tape to reduce regulatory administrative and compliance costs for businesses, it argued. Failing to do so would mean higher prices for consumers and the EU losing ground to international rivals.

A report by the EU’s High Level Group on Administrative Burdens will propose a 10% target. The UK points to Commission figures that show a 25% cut could increase Eu GDP by 1.4%.

The ideas are part of a series of single market reforms involving energy security, climate change, trade, financial services and the digital economy that the UK is pushing for. The British are keen to be seen as engaging positively – and improving – the incoming executive’s agenda.

Securitisation

?The paper also called for action to promote “transparent, well-regulated” securitisation, where bank loans are packaged and sold on the market. Opaque and complex securitisation was blamed for the US subprime mortgage crisis, which some argue spurred the global financial crisis.

It backs Juncker’s plans for a “capital markets union” to lessen European businesses’ dependence on bank funding. That source of finance has dried up since the crisis.

The ECB and a number of other member states are in favour of securitisation, which could create €300 billion of financing for companies and infrastructure, according to Juncker.

But others believed to be wary of the plans because of the poor reputation of securitisation post-crisis.

The UK’s Jonathan Hill is set to take over the financial stability, financial services and capital markets union portfolio in the new Commission.

But today’s diplomatic effort is not directly linked to Hill’s hearing before MEPs at the European Parliament on Wednesday, 1 October.

Instead, it is geared towards securing broad support for UK policies to increase competitiveness ahead of Juncker’s team taking power in November.

“I don’t think there’s a better time to talk about the EU’s future agenda for business,” said Baroness Neville-Rolfe.

“The UK wants to see real ambition from the EU and that’s why we’ve pulled together these ideas on how to reform the single market,” she added.

Trade

The UK explicitly backs the hotly-debated EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP), another free trade agreement with Japan and calls for similar negotiations with China to be launched.

“We need to place free trade at the heart of our agenda,” the document said.

The Commission should also propose targeted laws to remove barriers to trade within the EU, starting with the construction and business services sectors, the document said.

Barriers to lending across borders and to SMEs also need to be broken down in order to get the economy moving again, it said.

Rules stopping e-commerce such as those around labelling rules, sales promotion and unreliable parcel delivery services, needed to be ditched, according to the UK.

EU regulation was not keeping up with the pace of change in the digital world, the document said.

The UK in the paper reiterates its support for the EU’s proposed 40% greenhouse gas reduction as part of  its 2030 climate and energy framework. Those targets will be discussed at October’s meeting of EU leaders.

The 40% target would encourage investment in “urgently needed” low carbon infrastructure, according to the UK.

The internal market for energy could only be completed with new infrastructure, including cross-border interconnectors, the document said.

Wider reform

The suggested changes are part of a wider drive for EU reforms that UK Prime Minister David Cameron is campaigning for. 

While that does include controversial moves over freedom of movement, it also calls for the EU to scale back its regulation unless absolutely necessary.

How the full set of Cameron’s EU reforms is received could have a direct impact on the UK’s continued membership of the Union.

The success of the Eurosceptic UK Independence Party has upped pressure on Cameron to be tougher with the EU, especially after the humiliation of his failed attempt to block Juncker’s appointment as Commission president.

Council conclusions

The competitiveness council adopted conclusions aimed at integrating industrial competitiveness issues into relevant EU policy areas, such as environment, climate, energy, trade, competition, state aid, with a view to creating a stronger industrial base for the EU economy, according to a press release.

It also debated the mid-term review of the Europe 2020 strategy for growth and jobs. Watch the press conference after the meeting below.

http://video.consilium.europa.eu/embed.aspx?ticket=775-979-14874

Positions

Jean-Claude Juncker's spokeswoman said, "Under the Treaty, the Commission initiates legislation and is responsible for the quality of its proposals and their supporting impact assessments, which provide the evidence base upon which the College's decisions are based. Mr Timmermans, as first vice president, in charge of Better Regulation, Inter-Institutional Relations, the Rule of Law and the Charter of Fundamental Rights, will ensure that the Commission's impact assessments are of high quality and comprehensive.

"External review of an impact assessment can always be done after adoption by the Commission of its proposal – the Parliament already conducts such scrutiny now and this is welcomed. External advice could play a role in advising the Parliament and the Council on the impacts of their proposed amendments (which are not systematically impact assessed today) if they wish to seek it."

Background

The EU is still struggling to recover from the financial crisis. One way to speed up the recovery is by increasing the competitiveness of the single market. 

The United Kingdom has suggested some changes to help boost the EU's competitiveness and spur growth and jobs.  The UK wants to cut red tape and encourage the European Commission to only propose EU-wide rules when absolutely necessary.

Setting targets for cutting regulatory burdens and setting up an independent body to scrutinise analysis of the impact of EU laws, should be considered by the new Commission.

The UK backs securitisation, where bank loans are packaged together and sold on the market, as a solution to the lack of finance for companies and infrastructure. Securitisation was blamed for the financial crisis.

But the reforms put forward today foreshadow other controversial ideas about how the EU should change that are likely to be championed by Prime Minister David Cameron in the future. 

 

Timeline

  • 1 October: Jonathan Hills' hearing at European Parliament
  • November: Expected appointment of new Commission

Further Reading