academic preparation kit

ACADEMIC PREPARATION KITacademic forum - porto 2015 EUROPEAN YOUTH PARLIAMENT PORTUGAL

APPEJ – Associação Portuguesa do Parlamento Europeu dos Jovens/European Youth Parliament Portugal Rua da Concórdia 45, 4465-601, Leça do Balio, Porto, Portugal www.pejportugal.com · [email protected]

This Academic Preparation Kit was com-piled for the Academic Forum - Porto 2015 of the European Youth Parliament Portugal, which will take place in the city of Porto, from the 20th to the 22nd of Feb-ruary, 2015.

OVERVIEWS

The Topic Overviews are written by the Committees’ Chairpersons and serve as background material. They aim to iden-tify the importance of the issue at hand, as well as the principal matters within it, while offering a short look at their possi-ble future development. They are written with the intention of providing stimulat-ing, yet neutral, introductions. It must be noted that the content of the Overviews does not reflect the positions of the Asso-ciação Portuguesa – P. E. J. (APPEJ)/Euro-pean Youth Parliament Portugal (EYP PT), which strongly encourages independent thinking, being the sole responsibility of their authors. Likewise, while the Academ-ic Forum will be held under the patronage of various public entities, no claim is made that their views are in any way represent-ed by the contents of this Preparation Kit.

LINKS

As regards the suggestions of research links, the list is by no means exhaustive. Also, several of the websites may contain relevant information other than the one

cited herewith. Please note that the EYP PT is not responsible for the contents of the various websites; the texts, images and/or audio or video clips reflect the opinions of their authors, only. We recommend that you print this preparation kit, together with all the research you will conduct on your own and bring all of those materi-als with you to the forum. Wishing you a good read and successful preparation,

Mathieu LohrPresident, Academic Forum - Porto 2015

Bruno Moreira & Rita FerreiraHead-organisers, Academic Forum - Porto 2015

João MoreiraPresident, EYP PT

TABLE OF CONTENTS

DISCLAIMER

Position PapersThe EU ExplainedCommittee TopicsAFCOECON IECON IIINTALIBESEDEContacts

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Are you excited yet?

The Overviews are out, and we are count-ing the days; the chairs team of Porto 2015 has put great effort into providing you all the necessary tools for a successful and intense academic experience.

This is your chance to challenge yourself and your understanding of the Europe-an Union- the topics herein found aim to

broaden your perspective of them-.

You will be confronted with the challenge of reconciling differing cultural and po-litical backgrounds, challenge your own perception and achieve a consensus on how to solve the defy you’re presented with- from Security and Defence to Con-stitutional Affairs we hope this Academic Preparation Kit is able to inform, enlighten and update you on these topics, making you capable to draw your own personal conclusions.

Make yourself comfortable with the com-petencies of the EU, and your committee, read the abstracts of other topic over-views, and look forward to meet people from all across Europe.

Now is your turn; each of you must decide for themselves what you want to bring to this session, and what your contribution will be.

Make the best of the preparation time, and help us create a brilliant and transcendent atmosphere for what will be a memorable and extraordinary session.

We are very much excited to have you all with us soon,

The Chairs team of Porto 2015,Francesco, José, Lourenço, Luisa, Margarida,

Maryna, Joana, and Mathieu

foreword

POSITION PAPERS

The purpose of the Position Paper is to generate support on an issue. It describes a personal position on a topic and the rationale behind it. The Position Paper is based on facts that provide a solid foun-dation for your argument and should be adequately presented by: using evidence to support your position, such as statis-tical evidence or dates and events; val-idating your position with authoritative references or primary source quotations; examining the strengths and weakness-es of your position; evaluating possible solutions and suggesting courses of ac-tion. A good Position Paper should not be much longer than one A4 page with the format settings presented to you below (and which we ask you to preserve) (po-des encontrar anexado depois), and can be structured as follows:

Introduction

It should clearly identify the issue and state the author’s position. It should be written in a way that captures the reader’s attention.

Body of text

It may contain several paragraphs; each of them presenting an idea or main con-cept that clarifies a portion of the position statement and is supported by evidence or facts. Evidence (first source quota-tions, statistical data, interviews with ex-perts and/or indisputable dates or events) should lead to the main concept or idea presented in the paragraph. The body may begin with some back-ground information and should incorpo-rate a discussion on all sides of the issue at hand.

Conclusion

It should summarise the main concepts and ideas and reinforce, without repeat-ing, the introduction or body of the paper. It could include suggested courses of ac-tion and possible solutions. We have included further instructions in the template you will be using (separate MS Word file), so please be sure to refer to that.

The countdown to the session has begun and we are already in a prepa-ration frenzy. In fact, we have waited quite some time for this and, nat-urally, much of that time was spent preparing. For you, because you deserve a session that is academically challenging whilst promoting the best of EYP spirit.

So, what can you do to be prepared when we are more than ready? ‘Outprepare’ us! How? Easily… if you just follow these steps:

1. Read the introduction to this Preparation Kit, the EU guide and all Committee Topic Overviews. Use the keywords and links therein to set you off on your own research.

2. Then, study your information carefully, search your conscience (and your creativity, too), make up your mind and write your Position Paper.

3. As soon as you have finished it – and by no later than Monday, Febru-ary 16th – save it according to the specifications below and send them to <[email protected]>.

4. It may happen that your Chairperson will get in touch with you with further pre-session preparation instructions or requests. For that reason, we must ask that, from this moment until all Session-related commu-nication has ended, you make an effort to check your e-mail inboxes every day.

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THE EU EXPLAINED

The European Union (EU) is a unique eco-nomic and political partnership between 28 European countries which, together, cover much of the continent. The EU was created in the aftermath of the Second World War. The first steps were to foster economic cooperation: the idea being that countries who trade with one anoth-er become economically interdependent and so more likely to avoid conflict. The result was the European Economic Community (EEC), created in 1958, and initially increasing economic cooperation between six countries: Belgium, Germany, France, Italy, Luxembourg and the Neth-erlands. Since then, a large single market has been created and continues to devel-op towards its full potential.

From economic to political union

What began as a purely economic union has evolved into an organisation span-ning policy areas, from development aid to environment. A name change from the EEC to the European Union (EU) in 1993 reflected this. The EU is based on the rule of law: everything that it does is founded on treaties, voluntarily and democratically agreed by all the Member States. These binding agreements set out the EU’s goals in its many areas of activity.

Mobility, growth, stability, single currency

The EU has delivered half a century of peace, stability and prosperity, helped raise living standards and launched a sin-gle European currency, the euro. Thanks to the abolition of border controls be-tween EU countries, people can travel freely throughout most of the continent. And it has become much easier to live and work abroad in Europe. The single or ‘in-ternal’ market is the EU’s main economic engine, enabling most goods, services, money and people to move freely. Anoth-er key objective is to develop this huge re-source to ensure that Europeans can draw the maximum benefit from it.

Human rights and equality

One of the EU’s main goals is to promote human rights both internally and around the world. Human dignity, freedom, de-mocracy, equality, the rule of law and re-spect for human rights: these are the core values of the EU. Since the 2009 signing of the Treaty of Lisbon, the EU’s Charter of Fundamental Rights brings all these rights together in a single document. The EU’s institutions are legally bound to uphold them, as are EU governments whenever they apply EU law.

Transparent and democratic institutions

As it continues to grow, the EU remains focused on making its governing institu-tions more transparent and democratic. More powers are being given to the di-rectly elected European Parliament, while national parliaments are being given a greater role, working alongside the Eu-ropean institutions. In turn, European cit-izens have an ever-increasing number of channels for taking part in the political process.

The institutional structure of the EU can-not be compared to that of any other in-ternational organisation (e.g., the North Atlantic Treaty Organization or the United Nations). It is neither a centralised unity like a nation state, nor does it imitate a rel-atively loose structure, such as the Com-monwealth of Nations or a confederation like the United States of America – it is an organisation sui generis. The structure is unique and continuously developed. The Treaty of Lisbon marks the last big step in this process.

A. MAIN INSTITUTIONS

1. Within the institutional triangle

European Commission The European Commission (EC) is the

‘executive’ power of the EU. One Com-missioner is appointed by each Member State (with one, currently José Manuel Durão Barroso, being the President of the EC). The Commissioners are appointed by their respective Member States, approved by the European Parliament and put in charge of specific issues (e.g., Connie He-degaard, the Danish Commissioner, is re-sponsible for Climate Action). The EC monitors the Member States’ and the Union’s adherence to the acquis com-munautaire (the ensemble of all EU legis-lation), represents the Union in its foreign relations (especially through one of its Vice-presidents, Catherine Ashton, who is also the High Representative of the Union for Foreign Affairs and Security Policy) and has the exclusive Right of Initiative1. Additionally, the term ‘Commission’ is also used to refer to the full administra-tive body about 23,000 staff members working in various Directorates-General (DGs) or services, each responsible for a particular policy area and headed by a Di-rector-General, who reports directly to the President. The DGs draft laws, but their proposals become official only once the College of Commissioners adopts them

1. The Right of Initiative is the right to pro-pose laws. In the EU, the EC has the right to propose Regulations and Directives to the European Parlia- ment and to the Council of the European Union).

I. WHAT IS THE EU?

II. HOW DOES THE EU WORK?

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during its weekly meeting.

European Parliament The European Parliament (EP) is the first part of the EU’s legislative branch and consists of 766 Members of Parliament (commonly, MEPs), who are elected for five-year mandates by all EU citizens (over 18 years old, in Austria over 16). The first direct EP election was held in 1979; the latest between May 22nd and 25th, 2014. The EP is divided into seven large frac-tions plus several independent MEPs. The biggest three fractions are the European People‘s Party pooling Christian Demo-crats (EPP), followed by the Party of Euro-pean Socialists (PES) and by the Alliance of Liberals and Democrats Party (ALDE). It works either in a big plenary or in its 20 different Committees, each responsible for specific issue areas. The EP shares its legislative competences with the Council of the European Union.

Council of the European Union (Council of Ministers) Also known as ‘the Council’, the Council of the EU is structured in issue-specific groups (councils), comprising the respec-tive Ministers of the Member States (e.g., the Council for Justice and Home Affairs, with all Ministers of the Interior/Home Affairs). The presidency of the Council changes every six months and the ‘presi-

dent’ in office supplies the different coun-cils with a Chairperson, with the exception of the council on Foreign Affairs, which is presided to by the High Representative. The issue areas are mirrored in those of the EP (e.g., environment, education, economy, budget), with whom the Coun-cil shares its legislative competences. Ad-ditionally, the Council also has executive powers. The last presidency (January–June 2014) was held by Greece; the current one (July–December 2014) is being held by It-aly.

2. Outside the institutional triangle

European Council The European Council (no standard ab-breviation is used) is an EU institution comprising the heads of state or heads of government of the Member States, along with the council’s own President (Herman Van Rompuy, until November 2014) and the President of the European Commis-sion (José Manuel Durão Barroso, until October 2014 and after that Jean-Claude Junker). The High Representative of the Union for Foreign Affairs and Security Policy takes part in its meetings. The Eu-ropean Council was established as an in-formal body in 1975; it became an official EU institution in 2009, when the Treaty of Lisbon entered into force.

While the European Council has no formal legislative power, it is charged under the Treaty of Lisbon with defining “the gen-eral political directions and priorities” of the Union. It is, thus, the Union’s strate-gic (and crisis-solving) body, acting as the collective presidency of the EU.

European Central Bank The European Central Bank (ECB) is the central bank for the euro and adminis-ters the monetary policy of the euro area, which consists of 18 EU member states and is one of the largest currency areas in the world. It is one of the world’s most important central banks. The bank was es-tablished by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt, Germany. Since 2011 (and until 2019) the President of the ECB has been Mario Dra-ghi, former governor of the Bank of Italy. The owners and shareholders of the Euro-pean Central Bank are the central banks of the 28 Member States of the EU.

Court of Justice of the European Union The Court of Justice of the European Union (CJEU) is an EU institution that en-compasses the whole judiciary. Seating in Luxembourg, it consists of two major courts and a number of specialised courts. The institution was originally established in 1952 as the Court of Justice of the Eu-ropean Coal and Steel Communities [as of

1958 the Court of Justice of the Europe-an Communities (CJEC)]. In 2009, with the entry into force of the Treaty of Lisbon, the court changed to its current name. Its mission is to ensure that “the law is observed (…) in the interpretation and application” of the Treaties. The Court re-views the legality of the acts of any EU in-stitution, ensures that the Member States comply with obligations under the Trea-ties and interprets EU law at the request of the national courts.It consists of two major courts: i) the Eu-ropean Court of Justice (created in 1952), the highest court in the EU legal system; ii) the General Court (created in 1988; for-merly the Court of First Instance);

3. Not an EU body!

Council of Europe The Council of Europe (CoE) is an inter-national organisation promoting cooper-ation amongst all countries of Europe in the areas of legal standards, human rights, democratic development, the rule of law and cultural cooperation. It was founded in 1949, has 47 Member States with over 800 million citizens, and is an entirely sep-arate body from the EU. The CoE cannot make binding laws. Its best known bodies are the European Court of Human Rights (ECHR), which en-

THE EU EXPLAINED

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forces the European Convention on Hu-man Rights, and the European Pharmaco-poeia Commission, which sets the quality standards for pharmaceutical products in Europe. The Council of Europe’s work has resulted in standards, charters and con-ventions to facilitate cooperation between European countries.Its statutory institutions are the Commit-tee of Ministers (comprising the foreign ministers of each of its 47 Member States), the Parliamentary Assembly (composed of MPs from the parliament of each Member State) and the Secretary General (Thorb-jørn Jagland).

B. WHAT CAN THE EU DO?

1. Exclusive competences – as per Arti-cle 2 (1) and Article 3 of the Treaty on the Functioning of the European Union (TFEU)

In these areas, only the EU may legislate and adopt legally binding acts. Exceptions are possible if the EU empowers Member States to act or with regard to the imple-mentation of Union acts.

• The customs union, including an internal free trade area with common customs tar-iffs (Art. 31 TFEU). • The monetary policy of the EU for the Member States whose currency is the euro, overseen by the European Central

Bank and with certain precepts formulat-ed in the Stability and Growth Pact (Art. 129 (3) and (4), Arts. 132, 138, 219 TFEU). • Competition rules controlling state aid from national governments and the ac-tions of companies necessary for the functioning of the internal market. • A common international trade policy, e.g., a common position in international trade negotiations (Art. 207 TFEU). • The conclusion of certain international agreements (Art. 3 (2) TFEU). • Common commercial policy.• The conservation of marine biological resources (part of the Common Fisheries Policy, Art. 38 (1) TFEU).

2. Shared EU competences – as per Art. 2 (2) and Art. 4 TFEU

These are policy areas on which the Mem-ber States have agreed to act individually if the EU has not exercised (or planned to exercise) its competence. If a policy area is neither exclusive nor falls under sup-portive actions, it is a shared competence. Some examples are:

• Internal market; • Economic, social and territorial cohesion; • Agriculture and fishing (except the con-servation of marine biological resources);

• Social policy; • Transport; • Environment, pollution and energy; • Consumer protection; • Area of Freedom, Security and Justice.

3. Supporting, coordinating or comple-mentary competences – as per Art. 2 (5), Art. 6 TFEU

The EU can financially support the actions of the Member states that have agreed to coordinate their domestic policies through the EU. However, it does not en-tail harmonisation of regulations. These areas include: • Education, vocational training, youth and sport; • Tourism;• Administrative cooperation; • Civil protection;• Protection and improvement of human health; • Industry; • Culture.

C. LEGAL ACTS OF THE EU

While the EU can issue several types of legal acts, not all are fully binding for its Member States. These acts are named

according to their legal strength and are divided into:

• Regulations – have to be strictly adhered to in all Member States and leave no room for adjustments during the implementa-tion process; • Directives – provide a framework and give a certain policy direction, leaving the states with more flexibility and room for adjustments; • Decisions – always address certain recip-ients and are only valid for those specific countries/people/institutions; • Recommendations – without legal force, but negotiated and voted on according to

THE EU EXPLAINED

2 To learn more about the legislative procedure, please refer to this European Parliament flowchart.

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THE EU EXPLAINED

A. GENERAL LINKS

To learn more about the EU, its institutions and instru-ments, please visit their respective websites, below.

1. European Union http://europa.eu/index_en.htm http://en.wikipedia.org/wiki/Book:European_Union

2. EU-Institutions http://eu2012.dk/en/EU-and-the-Pres-

idency/About-EU/EU-Background/EU- Institutions

3. European Neighbourhood Policy http://ec.europa.eu/world/enp/index_en.htm

4. Enlargement http://ec.europa.eu/enlargement/index_en.htm

5. Common Foreign and Security Policy http://europa.eu/pol/cfsp/index_en.htm http://europa.eu/agencies/regu-latory_agencies_bodies/security_agencies/index_ en.htm

6. Lisbon Treaty http://europa.eu/lisbon_treaty/index_en.htmhttp://news.bbc.co.uk/2/hi/europe/6901353.stm

7. Treaty on European Union (TEU) THIS LINK IS STILL MISSING

8. Treaty on the Functioning of the European Union (TFEU)http://eur-lex.europa.eu/legal-content/EN/TXT/PD-F/?uri=CELEX:12012E/TXT&from=EN

9. TFEU with explanations http://en.euabc.com/upload/books/lisbon-treaty-3edi-tion.pdf10. Europe 2020http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:2020:FIN:EN:PDF

11. Charter of Fundamental Rights of the European Unionhttp://www.europarl.europa.eu/charter/pdf/text_en.pdf

III. FURTHER RESEARCH

the appropriate procedure, they are not binding for the Member States; • Opinions – similar to recommendations in that they have no legal force, but not voted on, simply emitted.

The European legislative procedure runs considerably longer than those of most Member States. In brief: the EC (which has the exclusive Right to Initiative), the Coun-cil and the EP decide if the proposal becomes a legal act after having discussed relevant details. General policy guidelines and statements, especially from the EP, are formulated in Resolutions. They can entail instructions for future procedures, as well as regulations, which are formally valid in the Member States. Legal acts passed by the EP and the Council enter into force once the na-tional governments have transposed them into national law. The combined legal heritage of the EU, including all legal acts, contracts and treaties is known as the acquis communautaire.

B. QUESTIONS TO CONSIDER

After you have read the Topic Overviews, it is recom-mended that you take the time to consider the questions therein, as well as the ones below. This will be an import-ant phase in preparation and will greatly aid you clarify your own stance on the matters at hand (which, in turn, is crucial for you to have decided by the time you start writing your Position Paper).

1. What is the legal basis for the Committee Topic?

2. What are the relevant EU competences?

3. What are the relevant EU institutions?

4. Who decides on policies?

5. Is an EU-level solution desirable?

6. What are the short-term and long-term implications?

7. What type of further legislation is needed?

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COMMITTEE TOPICS

AFCO - Committee on constitutional affairschaired by maryna titarenko (ua)With the European Union continuously subjected to allegations of a democratic deficit within its operative methods, debates concerning the legitimacy of the Union have become prevalent ones within mainstream politics. What realistic steps can the EU take to address these concerns by way of institutional reform, whilst at the same time main-taining the principles with which the Union bases itself upon?

Libe - Committee on civil liberties, justice and home affairschaired by josé feio (pt)The EU has yet to find a definite answer to immigration from third countries, especially with respect to asylum seekers. This covers both the country of origin’s problem, the way we ‘welcome’ asylum seekers, and what happens once they are classified as refu-gee. What concrete measures should the EU take to provide both short-term and long-term solutions to this problem?

ECON i - committee on economic and monetary affairs ichaired by luisa edves (ro)En route to a European Banking Union: ensuing the political agreement on a new law setting up a Single Resolution Mechanism (SRM) to deal with failing banks, what steps, if any, should the EU take to further stabilise the European banking system and its alignment with the real economy?

inta - committee on international tradechaired by margarida pereira (pt)

With there being renewed calls by Jean-Claude Juncker for the European Union to adopt a Digital Single Market as detailed within the Europe 2020 strategy, how can the EU best proceed with the development of such a framework which brings enhanced trade benefits to all stakeholders, whilst at the same time respecting the complex legal barriers that exist between Member States?

econ ii - committee on economic and monetary affairs iichaired by francesco delorenzi (be)

The European Union has been largely successful at promoting and maintaining high living standards in face of socioeconomic challenges. However, the financial crisis, the EU North South competitive gap, and competition from both developed and emerging economies puts the EU in a precarious position. How can the EU ensure sustainable high living standards and global competitiveness, and what measures should be taken to tackle internal disparities of competitiveness between EU MemberStates?

sede - committee on security and defensechaired by lourenço cruz (pt)

Building European military capabilities “The Petersberg tasks”: from a defined spec-trum of military actions that the EU can undertake, to the Union’s global contribution on peacemaking tasks and combat forces in crisis management, how can the EU best underwrite its Common Security and Defence Policy and to what extent should this be achieved through the use of military means?

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basic democratic lawfulness.The only fully democratic institution of the EU is the European Parliament (EP) since every Member State is represented by a certain number of Members of the Eu-ropean Parliament (MEP’s) calculated by digressive proportion4, which means that even the smaller countries have over-representation. On the other hand, the European Commision (EC), the foremost legislative and executive EU body, is selected exclusively by national governments without the participations of its citizens. The Treaty of Lisbon5 had a great impact on dealing with the flaws of the EU demo-cratic system, nevertheless, the lack of inclusion and involvement of it’s citizens in the policy making process is still one of the EU’s major challenges. After the treaty entered into force in 2009, there was a more direct popular input into EU law-making by virtue of the citizens’ initiative6. This instrument allows more than one million cit-izens from a “significant” number of Member States to take the initiative by inviting the EC to submit a legislative proposal (within the remit of its competences)- the Lisbon Treaty innovations focus on strengthening democratic scrutiny at all levels of EU policy-making. But will this actually cure the supposed ‘malaise’ of the European Union? Eurosceptic7 views state that only national government can make decisions on unemployment, taxation and pension, and see the EU challenging sovereignty in this regard. Never-less, the challenge that appears is how to maintain empowered EP as a represen-

AFCOCommittee on Constitutional Affairs chaired by

Maryna Titarenko (UA)With the EU continuously subjected to allegations of a democratic deficit with-in its operative methods debates concerning the legitimacy of the Union have become a prevalent one within mainstream politics. What realistic steps can the EU take to address these concerns by way of institutional reform, whilst at the same time maintaining the principles with which the Union bases itself upon?

1.ABSTRACT

Effecting Lisbon: lessening the Union’s democratic deficit- since the early 1990’s the European Union (EU) has been criticised for its lack of value and enactment when it came to political representation and legitimacy- it wasn’t until 2009, when the Treaty of Lisbon became effective that the EU undertook actual measures to reduce its criticised democratic deficit by further involving its citizens and strengthen partic-ipatory democracy-. But taking into account data from Autumn 20131, only 31% of citizens had a positive image of the EU whilst 47% of respondents stated not knowing how the EU works- meaning that a majority of EU citizens do not recognise the EU as a major actor ensuring democratic ideals-. Was the democratic deficit properly addressed in the Treaty of Lisbon? Or were the democratic demands of active EU citizens overlooked? Nowadays, the EU is often criticised for lacking democracy and expanding its au-thority whilst most of the countries still struggle with the recognizing the EU’s democratic legitimacy. How can the EU put this urgent problem on top if its polit-ical agenda? Is participative democracy in benefit of the EU? What other measures should be taken to encourage Europeans to be more active citizens of the EU?

2.OVERVIEW

Input-oriented vs. Output-oriented2 democratic legitimacy- according to data in autumn 20133 , European citizens seem to be losing their trust and interest for the Union- for 28% of respondents the EU has a negative image, and only 47% have an understanding of EU institutions.While input-oriented legitimacy is associated with citizens electing members of the legislative body, output-oriented legitimacy states that any government acts for the well-being of its citizens. Besides representing a major partition within the democratic deficit of the EU, output legitimacy assumes that every EU body has

1.Standard Eurobarometer 80 / Autumn 2013 – TNS opinion & social- find full report here: http://ec.europa.eu/public_opinion/archives/eb/eb80/eb80_first_en.pdf ; 2.Democracy and legitimacy of the EU: http://www.mzes.uni-mannheim.de/publications/papers/Schmitt_26_1_04.pdf ; 3.Standard Eurobarometer 80 / Autumn 2013 – TNS opinion & social- find full report here: http://ec.europa.eu/public_opinion/archives/eb/eb80/eb80_first_en.pdf ; 4.Seats are distributed among countries according to “degressive proportionality”, i.e. MEPs from more populous countries will each represent more people than those from smaller countries. No country may now have less than 6 or more than 96 MEPs; 5.Read the full treaty here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:306:FULL:EN:PDF ;6.Art.º 11 of the Lisbon Treaty;7.Euroscepticism is the body of criticism of the European Union (EU), and opposition to the process of political Europe-an integration, existing throughout the political spectrum. Traditionally, the main source of euroscepticism has been the notion that integration weakens the nation state.

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tative institution on European level and at the same time to strengthen the role of the national parliaments instead of reducing their powers.

• What are the real reasons of the lack of democracy in the EU?

• How can the “far-away Brussels” situation be changed and improve communication between the EP and the National governments?

• Why is the participatory percentage of the European elections very low?

3.STAKEHOLDERS

In total, there are now seven EU institutions: the European Parliament, European Council, Council, European Commission, European Court of Justice, European Central Bank and European Court of Auditors. So how has their democracy deficit im-proved with the Lisbon treaty?The EP represents voters in the EU’s member countries. The Lisbon treaty has boosted its powers as regards lawmaking, the EU budget and approval of interna-tional agreements. The European Council (EC), which has the role of driving EU policy-making, now becomes a full EU institution. Although it does not gain any new powers, it is head-ed by a newly created position of president. Elected by the European Council for 2½ years, the main job of the president is to prepare the Council’s work, ensure its con-tinuity and work to secure consensus among member countries. The Council represents the EU’s member governments. Its role is largely un-changed. It continues to share lawmaking and budget power with the European Parliament and maintain its central role in common foreign and security policy (CFSP) and coordinating economic policies.The main change brought by the Treaty of Lisbon concerns the decision making process. Firstly, the default voting method for the Council is now qualified majori-ty voting, except when the treaties require a different procedure (e.g. a unanimous vote). In practice, this means that qualified majority voting has been extended to many new policy areas (e.g. immigration and culture).In 2014, a new voting method was introduced - double majority voting. To be passed by the Council, proposed EU laws will then require a majority not only of the EU’s member countries (55 %) but also of the EU population (65 %). This will re-flect the legitimacy of the EU as a union of both peoples and nations. It will make EU lawmaking both more transparent and more effective. And it will be accompa-

nied by a new mechanism enabling a small number of member governments (close to a blocking minority) to demonstrate their opposition to a decision. There is a direct link between the results of the European elections and the choice of candidate for president of the Commission.No significant changes have been made to the role or powers of the European Cen-tral Bank or the Court of Auditors. However, the treaty broadens the scope of the European Court of Justice, especially as regards police and judicial cooperation in criminal matters, and changes some of its procedures.Although national parliaments are not part of the EU’s official institutional setup, they play a vital role in the operation of the EU. The Lisbon treaty, now recognises and strengthens the role of national parliaments. For example, if a sufficient number of national parliaments is convinced that a legislative initiative should better be taken at a local, regional or national level, the Commission either has to withdraw it or give a clear justification why it does not believe that the initiative is in breach with the principle of subsidiarity.

• How should the European Parliament act in order to regain its citizens trust?• Do political parties only agree on the institutional arrangements of the European Union instead of being part of the whole process?• What measures should the EU undertake to further evolve its citizens directly?

4.MAIN CONFLICTS AND CURRENT SITUATION

Besides the newly introduced reforms and improvements for the EP by the Treaty of Lisbon, the democratic deficit of the Parliament still remains to a large extent. This is due to the fact that the Lisbon Treaty does not provide a right to legislative initiative for the EP which still belongs exclusively to the Commission.Moreover, the Member States have a right to vote and elect their national parliaments and to elect their representatives in the European Parliament. There is a significant difference among the national elections and the elections for the European Parlia-ment. First of all, the interest for the European elections is very low because the citizens are not voting for a change of a government, as it is a case at the national elections8. When citizens vote for the members of the EP they are aware that the executive actors

8.At the national elections citizens elect their national parliaments and the majority forms a government;

AFCO - Committee on Constitutional Affairs

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• Should the EP have the competence to draw direct legislative initiatives?• How can the EU strive to make the EU elections closer to the citizens of its Member States?• What measures should be taken in order to bring EU institutions more relatable to European citizens?

5.LEGISLATIVE BACKGROUND

The Maastricht treaty11 also known as the Treaty of European Union, gave the right to all Europeans to have a European citizenship and a right to vote. This was the first step towards democracy in the EU, and the beginning of a great era of fight for the freedom of political expression and civil rights.The treaty of Amsterdam12 meant greater emphasis on citizenship and the rights of individuals in the EU- this treaty opened doors to closer cooperation between the EC and the EP-.The Treaty of Nice13 reformed the institutional structure of the European Union- Ar-ticle 227 gave the right to EU citizens to organise petitions and present them to the commission- which brought EU citizens closer to the EU legislative system.In addition, the already mentioned Treaty of Lisbon has created the yellow card procedure, meaning that according to Art. 7(2) of Protocol nº. 2, if if such a reasoned opinion is submitted which represents one-third of the total number of votes allocat-ed to national parliaments (or a quarter of the votes in the field of Freedom, Security and Justice). In that case, the Commission must review its proposal, and it must give reasons explaining its decision to keep, change or withdraw the proposal- this procedure was used just once, but would become a “red card” procedure that could allow forcing the EC to withdraw a proposal-. Furthermore, more practice and experience with the Lisbon Treaty- the principal legislative initiative to narrow down the EU’s democratic deficit- are needed to ascertain its ‘democratic’ implications. Nevertheless, it is clear that the Member States bear the main responsibility for making the ‘new EU’ capable of providing the kind of returns which may convince the citizens of its added value. Only if national capitals are ready, willing and able to

on the European political scene are not drawn from the EP and thus are not accountable to it. When the citizens vote for the European Parliament elections they don’t vote for the EU policy agenda, neither for personalities or parties at a European level. This is proved by the fact that there are no “big names” running for MEPs, although they are expected to shape Europe’s policies on vital issues.The voters turnout at the last European elections is the most prominent signal for the permanent decline of the voters’ interest on European elections. European Parliament elections are also not about Europe, as parties and the media treat them as mid-term national contests. The absence of a “European” element in national and European elections means that EU citizen’s preferences on issues on the EU policy agenda at best only have an indirect influence on EU policy outcomes. The third part of the conflict of the EU democratic deficit refers to the fact that the Eu-ropean Union is “too distant” from the voters, regardless the European elections held in the EU members states and regardless of the increasement of the competences of the EP. Transnational election campaigns are thus something brought up time and again to counter this deficit, although accompanied by concerns by smaller countries over its effect on population disparities, and thus influence on the vote.

The distance between the citizens of the EU member states and the EU political elite is constantly growing, according to surveys. Although absolute majority of the EU citizens believe that more decisions in a number of areas should be taken at the European level, a very large proportion of the legislation is made in the EU by un-elected officials in Brussels. EU institutions are perceived by the citizens as unfriendly, bureaucratic bodies, distant from ordinary people, driven by complicated, unclear and sometimes even unreasonable procedures. The citizens’ participation in the domestic democratic institutions is directly influential on the decisionmaking process and it creates a distance between the citizens and the Union.But the greatest challenge that the EU democratic deficit poses refers to the produced policy drift from voter’s ideal policy preferences by the Union. The EP as a representative institution, does not have the main decision-making role in the Union. The policy-making process is not as prominent as seen in the European Parliament, but is very present among the concentrated interests and multinational firms that have strong lobbyists at European level- they create the policies “behind the cur-tains” and are dominant, compared to smaller trade unions and consumer groups-.

AFCO - Committee on Constitutional Affairs

11.Read the whole treaty here: http://www.eurotreaties.com/maastrichtec.pdf 12.Read the whole treaty here: http://www.eurotreaties.com/amsterdamtreaty.pdf ;13.Read the whole treaty here: http://www.eurotreaties.com/nicetreaty.pdf ;

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7.USEFUL LINKS FOR FURTHER RESEARCH

What is the democratic deficit?: https://www.youtube.com/watch?v=icfVZzkRaJ0

European democracy in crisis?: http://www.nytimes.com/2012/05/23/opinion/the-crisis-of-european-democracy.html?_r=0

Democracy deficit vs. Perfect democratic system: http://blogs.lse.ac.uk/europ-pblog/2014/06/11/the-european-union-does-not-have-a-democratic-deficit-it-has-a-democratic-surplus/

The lack of cooperation between EU Member States: http://yanisvaroufakis.eu/2014/08/29/why-is-europe-not-coming-together-in-response-to-the-euro-crisis/

How does the deficit affect you?: http://www.lse.ac.uk/europeanInstitute/research/hellenicObservatory/pdf/Lectures/Simitis_Oct07_transcript.pdf

Andrew Moravcsik about the democratic deficit in the EU: http://www.debatin-geurope.eu/2012/07/13/does-the-eu-have-a-democratic-deficit/#comments

The impact of the Lisbon Treaty: http://news.bbc.co.uk/2/hi/europe/7927742.stm

Europe’s democratic dilemma:http://one-europe.info/europes-democratic-dilem-ma

Challenges of democracy: http://www.e-ir.info/2014/07/29/student-fea-ture-the-challenges-of-democracy-and-democratization-in-europe/

Arguments regarding the democratic deficit : http://epoka.edu.al/new/icme/a2.pdf

“A more democratic Europe” - The Lisbon Treaty at a glance: http://ec.europa.eu/archives/lisbon_treaty/glance/democracy/

deliver will the innovations laid down in the new Treaty stand a real chance of ef-fectively countering the EU’s alleged ’democratic deficit’.• What is the real role of the Lisbon Treaty in dealing with the lack of democracy in the EU? • What other institutional reforms can be implemented to deal with this crisis?• Should any infrastructures of already existing EU institutions be reformed? If so, which and how?

6.PROSPECTS AND OUTCOMES

Why do we need democracy in our lives? We all have different interests, jobs and lifestyles, but there is something we do have in common: we are all European Citizens and it is up to us to contribute actively to a strong democratic union, freedom of speech and actually making our voice heard by the government that are only democraticly elect tools that work for the people. The development and consolidation of democracy is the central concept and founda-tion of all politics within the EU. The first condition to be able to apply for EU Mem-bershis is being a European country; the second condition is being a democratic state. In brief, democracy and democratic credential are very important for the EU. Having the EU closer to its citizens only represents benefits, however is it the interest of the stakeholders? Is direct democracy the solution for this democrat-ic deficit or should we strive for further cooperation between national govern-ments and the EU itself? Over time, national parliaments have been concerned that part of their legislative powers were progressively reallocated to their governments, especially since the latter essentially control the decisions of the Council- should Member States start to regulate this situation at the national level in order to promote better control by the parliaments of European legislation and policies adopt-ed by their respective national governments and by the EU institutions?

AFCO - Committee on Constitutional Affairs13

Even though on paper, the piece of legislation presents as coherent and a secure pillar for the EU banks, the main concerns of the financial institutes is whether these measures will actually be effective, nevertheless if the SRM is the new restructure to be developed in order to avoid another devastating economic crises, the core question remains: is the EU ready to undertake the SRM?

On one hand, country-adjustment could attract debt deflation dynamics in the pe-riphery, dragging the entire European region into a period of economic stagnation. On the other hand, mutualisation of existing debt would be akin to selling in-surance after the fact and could reduce incentives to restore competitiveness and fiscal sustainability. Because of these important tradeoffs, dealing with the debt overhang will remain a delicate issue.

According to the ECB’s comprehensive assessment5, conducted during November 2013 and October 2014, Eurozone banks must have a 5.5% minimum threshold in order to prevent the bank from failing.Whilst Member States such as Germany, where banks have an average threshold of 8.78%, and do not need much guarantees in the case of any national bank failure - the chances of such an event to occur are relatively low-. However, countries like Portugal, that mark way below 5.5%6 - and that even re-cently had the retrieve from complete bankruptcy the country’s leading private

ECON ICommittee on Economic and Monetary Affairs I

chaired byLuisa Edveş (RO)

En route to a European Banking Union: ensuing the political agreement on a new law setting up a Single Resolution Mechanism (SRM) to deal with failing banks, what steps, if any, should the EU take to further stabilise the European banking system and its alignment with the real economy?

1.ABSTRACT

When a bank dissolves within the Europe’s Economic and Monetary area, it does not just threaten depositors and shareholders- Member States’ Banks can drag down the national governments that try to rescue them-. As a result, the European Union leaders pledged to attack this vicious circle by reinforcing a Single Resolu-tion Mechanism, after the debt crisis almost broke apart the euro bloc. They vowed to centralise bank supervision and crisis management, an effort seen as the big-gest transfer of sovereignty since the creation of the common currency. Policy makers are united in the goal of what they call the Banking Union: ending taxpayer bailouts and taking key decisions out of national hands. However their starting point represents a building block of questions that still remain unanswered: Who will decide when a bank is threaten to fail? Who will be responsible to pay for the rebuild-ing of the bank? And how will the divvy up of the losses be made?

2.OVERVIEW

On the basis of a new structural reform, the European Commission (EC) imple-mented the creation of new infrastructures within the Banking Union1- the Euro-pean Union (EU) institutions agreed to establish a Single Supervisory Mechanism (SSM)2 ran by a Supervisory Institution and a Single Resolution Mechanism (SRM)3 which includes a Single Resolution Board (SRB) and a Single Resolution Fund (SRF). Such decision emerged from the financial crisis of 20084 and the subsequent sovereign debt crisis- it became clear that, especially in a monetary union such as the euro area, problems caused by close links between public sector finances and the banking sector can easily spill over national borders and cause financial dis-tress in other EU countries. Then, it was only natural that a new system of banking supervision for the EU was in need to be created- The SSM- in order to comprise the European Central Bank (ECB) and the national supervisory authorities of the par-ticipating countries. However, in 2014, the EC determined that further cohesion was needed and therefore, to ensure the efficient resolution of failing banks with min-imal costs for taxpayers and to the real economy, the SRM was created.

1.The banking union in the European Union is the transfer of responsibility for banking policy from the national to the EU level in several countries of the European Union, initiated in 2012 as a response to the Eurozone crisis;2.The Single Supervisory Mechanism (SSM) places the European Central Bank (ECB) as the central prudential supervisor of financial institutions in the euro area and in those non-euro EU countries that choose to join the SSM;3.Single Resolution Mechanism (SRM) aims to ensure an orderly resolution of failing banks with minimal costs for taxpay-ers and to the real economy;4.The crisis of 2008: http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article 5.Find the full document here: https://www.bankingsupervision.europa.eu/ecb/pub/pdf/aggregatereportonthecomprehen-siveassessment201410.en.pdf ;6.Meaning if the European Union slipped into a two-year recession, Portugal would slip into a three-year economic contraction, read more about it here: http://blogs.wsj.com/moneybeat/2014/10/26/a-country-by-country-breakdown-of-the-stress-test-fails/ ;

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bank (Banco Espirito Santo) at the cost of 4.4 billion euros7 - would definitely benefit from such a guarantee that only the SRM can assure. But can these countries like Portugal, Greece or Cyprus afford to pay regular contributions to the ECB in their current economic situation? There is a fear that banks will not be able to find additional capital on the markets and that this will result in serious government intervention and even to a wave of mergers.

Again, we need to remember that even though it operated mostly in the same cur-rency, the EU does not operate under a fiscal union. However, a deeper fiscal inte-gration would cement a more stable monetary union in the long term . Nevertheless, one element is time sensitive: the euro area SSM currently being established should quickly be complemented by a firm and early commitment to establish a single reso-lution framework with an adequate backstop to anchor confidence in the bank-ing system. Historical experience with fiscal integration shows that effective crisis management often goes hand in hand with far-reaching long-term reforms, in-cluding introducing stronger central oversight.

• Will the divergences between national resolution rules in different Member States and corresponding administrative practices lead to the lack of a unified decision-mak-ing process?• Will the actions towards a genuine Economic and Monetary Unions be able of breaking up the negative feedback loops between sovereigns, banks and the real economy?• The uniform application of the resolution regime in the participating Member States will be enhanced as a result of it being entrusted to a central authority such as the SRM. Furthermore, will the SRM interwoven with the process of harmonisation in the field of prudential supervision?

3.STAKEHOLDERS

Recalling that the SRM wants to ensure a uniform implementation of the EU lev-el bank resolution rules and procedures in the Member States, therefore to avoid any other bank failure, at the core of the regulation, the SRM directs to provide key benefits for taxpayers, banks, deposit-holders and financial and economic stability in the entire EU9.

Firstly we have to focus our attention on the complementary relationship between the EU Bank Recovery and Resolution Directive (BRRD)10 and the SRM.

On one hand, the BRRD is a necessary step to improve efficiency and cohesion in ensuring that failing banks in the EU single market and it can be resolved in a way which preserves financial stability and minimises costs for taxpayers across the EU28. While, on the other hand, the SRM is an essential complement to the ECB-led SSM for more integrated bank oversight and crisis management in the banking union. Thus, we have the BRRD which provides uniform rules for the whole EU single market and the SRM sets out the institutional and funding architecture for ap-plying those rules in Member States participating in the banking union.Shifting our attention towards the SMR, it is really important to understand that the SRM will function in conjunction with the other main pillar of the EU Bank-ing Union, the SSM. The SRM will automatically apply to all SSM members, empha-sising the fact that the states that do not participate in the SSM cannot participate in the SRM. In the cases in which any of the member banks will fail, the mechanism will allow bank resolution to be managed effectively through a Single Resolution Board11 and a Single Resolution Fund12 - In consequence, until the recent count, the SRM will apply to all of the roughly 6,000 banks established in member states participating in the SSM-. The national resolution authorities13 will be responsible by execution of the res-olution plan, under the supervision of the SRB, meaning that the Member States will be obliged to follow directives in order to ensure effectiveness.

7The bankruptcy of the Banco Espirito Santo: http://www.dw.de/portugal-prepares-to-rescue-its-biggest-private-bank/a-17831301 ; 8A future without a fiscal union?: http://www.theguardian.com/commentisfree/2011/aug/09/eurozone-fiscal-union-eu-rope ;9Find the full proposal : here:http://ec.europa.eu/finance/general-policy/docs/banking-union/141124-implementing-reg-ulation_en.pdf ;10BRRD sets out the framework for bank recovery and resolution in the EU. It sets out some arrangements to deal with failing banks at the Member State level and arrangements to facilitate cooperation in tackling cross-border banking failures;11The Single Resolution Board (SRB) is a directive which supervises banks in the euro area and in other countries which decide to join the Banking Union;12The Single Resolution Fund (SRF) will contain contributions from all the participating member states of the SRM and will be built up over a period of eight years in order to reach a target level of at least 1% of the amount of covered deposits of all credit institutions;13National resolution authorities are closely involved in the resolution process. They would assist the Single Resolution Board in preparing its actions which would draw on their expertise and experience, for example in the form of staff ex-changes. Crucially, national authorities would be in charge of implementing the resolution decisions in line with national company and insolvency law. Member States would thus be integrated into the mechanism in the preparatory and implementation stage regarding banks in their jurisdiction;

ECON I - Committee on Economic and Monetary Affairs I

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composition18 and discretions applied at the national level19.In consequence, the ECB will be reviewing the contributions and assessing the banks’ overall capital situation or will the EBC enter the scene every time the SRM will face concerns? Looking over the three mentioned issues, it is undoubtable that concern and doubts arise from the EU Member States over the implementation of the SRM.

• Will this lead to a better relationship between the EU Members and the ECB?• Will the implementation of the SRM the saving net of the European Union’s financial institutions at risk of failing?• Is the SRM in the position of assuring the financial security within the EU?


After months of political debate, the European Commission proposed the Regu-lation on a Single Resolution Mechanism and a Single Resolution Fund on 10th July 2013 . In December 201320, the Member States part of the Euro Area accepted and entered the Intergovernmental Agreement of the SRF functioning. Further, on the 20th March 2014, the European Parliament reached a political agree-ment on the SRM and SRF, leading to several revisions of the regulations21. It was only on the 15th of April 2014 when the political agreement was approved22. Finally, the agreement will be applicable amongst the contracting parties from 1st of January 2016.The SRM regulation must also be seen as a connection with the Recovery and Reso-lution Directive for banks and certain investment firms (BRRD).However, not to be considered that the Regulation replace the BRRD which con-tinues to be necessary in providing the framework for recovery and resolution

Under most scenarios, contributions by shareholders14 and creditors15 should be sufficient to finance the resolution proposed by the SRB. If, exceptionally, additional re-sources were needed, the SRF would come into play as a last resort. However, the SRF would be only used to finance bank resolution process, and not to directly absorb any losses or recapitalise a bank.

• Will actually the contributors and the taxpayers benefit from the SRM’s decision mak-ing? • Will the SRB and the national authorities going to overlap in the creation of the reso-lution? • Do we trust that the action steps created by the SRM are what the Member States need in order to avoid bank failure?


Regarding the Member States position towards the SRM, Britain and Denmark want-ed to clarify whether central banks, can extend liquidity even when relying on specific government guarantee while France, Italy, Sweden and Portugal asked for assurances that state guarantees can also be extended to help a struggling bank issue bonds with-out requiring bail-in. This meaning that the Member States still have some reserves regarding the assurance that both the EU and the ECB are giving them in order to acquire their trust.On 26th of September 2014, Ignazio Angeloni, member of the Supervisory Board of the ECB gave a speech at the Conference on “The New Financial Regulatory System: Chal-lenges and Consequences for the Financial Sector’’ in Venice. In his speech16 he argued that even though better rules are necessary in the banking supervisory system, is yet hard to restore trust in the ethical behaviour of the financial sector, especially after the economical crises. Therefore, in order to maintain a healthy Single Resolution Mechanism, the financial sector in each of the Member States countries have to improve as well. How can the SRM, together with the ECB gain the trust of the national banks? What improvements should the Economic and Monetary Affairs Committee should further conduct in order to develop the financial system?

Two months later on the 18th of November 2014, another issue was arisen by Sabine Lautenschläger, member of the Executive Board of the ECB, when pointing out the SSM’s contribution calculations and transitional adjustments17. She emphasised the strong di-vergences between individual banks, which recall a re-examination of their balance sheet

ECON I - Committee on Economic and Monetary Affairs I

14.An individual, group, or organization that owns one or more shares;15.A creditor is a person, bank, or other enterprise that has lent money or extended credit to another party;16.Find full speech here: https://www.bankingsupervision.europa.eu/press/speeches/date/2014/html/se140926.en.html 17.Find full speech here: https://www.bankingsupervision.europa.eu/press/speeches/date/2014/html/se141118.en.html ;18.Bank-specific drivers;19.Country specific drivers;20.Please read the press release here: http://europa.eu/rapid/press-release_IP-13-674_en.htm;21.Read the technical briefing carefuly here: http://ec.europa.eu/finance/general-policy/docs/bank-ing-union/140328-technical-briefing_en.pdf;22.See the texts adopted here: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&refer-ence=P7-TA-2014-0341;

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What is the Banking Union?: https://www.youtube.com/watch?v=vo3SWSpHwzY

The Banking Union in practice: https://www.youtube.com/watch?v=sLFjz7u5e-0o&src_vid=vo3SWSpHwzY&feature=iv&annotation_id=annotation_2610833651

EU Banking Union Reference Guide to Key Dates, Milestones: http://www.bloomberg.com/news/2014-08-28/eu-banking-union-reference-guide-to-key-dates-coming-milestones.html

The press release on the Single Resolution Mechanism: http://italia2014.eu/me-dia/1379/presse_release_14072014.pdf

Single Resolution Mechanism and the Single Resolution Fund: http://www.fresh-fields.com/uploadedFiles/SiteWide/Knowledge/briefing-banking-union-srm-and-srf.pdf

The European Commission’s Proposals for a Single Supervisory Mechanism: Racing Towards Banking Union in the EU? http://www.whitecase.com/files/Publica-tion/2ba8a223-55b7-46ff-9948-d664e7618ef3/Presentation/PublicationAttachment/baecadee-55ea-4c18-a4f4-da85e851b498/alert-european-commission-proposals.pdf

EBF Positioning on the Principles underlying the Single Resolution Mechanism: http://www.ebf-fbe.eu/uploads/EBF%20Position%20on%20Single%20Resolution%20Mechanism%20v7%20final.pdf

Position Paper of Rabobank on the Single Resolution Mechanism: https://www.rabobank.com/en/images/20131204-PP-Single-Resolution-Mechanism.pdf

Official release regarding the mutualisation of contributions to the Single Res-olution Fund: http://europa.eu/rapid/press-release_STATEMENT-14-165_en.htm?lo-cale=en

Regulation of the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU): http://eur-lex.europa.eu/le-gal-content/EN/TXT/PDF/?uri=CELEX:32014R0806&from=en

Will the SRM operation work?: http://www.skadden.com/eu-banking-union-politi-cal-agreement-reached-on-single-resolution-mechanism

The confidence that the SRM can achieve within the European Bank: http://insights.skadden.com/financial-regulation/eu-banking-union-will-new-regulato-ry-framework-restore-confidence-european-ban

within the EU, in particular for those Member States that are not part of the Banking Union. Apart from the aspect of recovery plans, the SRM supports the BRRD through financial arrangements based on contributions from the banking industry. Therefore, it should be noted that national laws and regulations implementing the BRRD include those related to the establishment of national resolution funds and will apply as from 1st January 2015. The contracting parties to the Agreement have committed to transfer to the SRF the contribution they raised by virtue of na-tional law implementing the BRRD.It is clearly stated that the banks need to make contributions to the SRF in the follow-ing eight years so that the EUB could assure the protection of all the bank deposits in the Banking Union.

• Is the EU ready for the implementation of the new regulations taking into consider-ation that it was only approved in April?• Does the connection between BRRD and SRM bring any value to the Banking sys-tem? • Taking in consideration the current proposal, what could be improved, added and further developed?


Even with the best of bank supervisors, crises in the banking sector will occur. Most Member States did not have a well-elaborated crisis management strategy when the financial crisis hit Europe. The EU needs to be better prepared for dealing with future crises.While the EU level already defines national rules for the financial sector to a large extent, substantial differences persist. Such differences in national regulation hamper effective supervision at the European level. More harmonised rules therefore need to be put in place to facilitate the task of the SSM and hence improve the quality of its supervision. In EU jargon, such harmonisation takes the form of a single rulebook.What will happen if any of the banks will fail before reaching the eight-year goal set? How will the countries, which already suffered from bank failure, contribute to the SRM? Does the SRM act like a safety net for them?

ECON I - Committee on Economic and Monetary Affairs I17

made great efforts to reduce their labour costs as an attempt to increase competitiveness4. Many experts deem these measures as needed in order to restore the competitive balance on a European level as Southern Europe will need to be equally attractive for investment when growth returns. Governments can reduce labour costs by reducing wage and/or non-wage labour cost. Another way to achieve this is to increase labour productivity. Although labour cost is an easy comparative measure it is not the only factor in the equa-tion and is not sufficient. Competition is affected by many - often interacting or even contradictory - determinants. What makes the current situation so challenging is that, on top of the complexity of this web of cofactors, the Eurozone is a single market with a single currency managed by multiple governments. Each state has its own economic climate and policy. Italy and France, for example, have to deal with soaring sovereign debt, government spending and a rigid labour market. Germany, on the other hand, has been the exception of the exponential debt explosion and endeavoured to maintain a busi-ness-friendly policy. Despite the stability provided by its fiscal rectitude the German econo-my has lost its Schwung. Many economists blame the Merkel administration’s reluctance on investing at home5. Germany retorts that giving up on its budget surplus would set a wrong precedent and give a bad example to countries like France or Greece, which they argue, still have to make a substantial amount of reforms and cuts.However, the debate has been waging from austerity to growth-policies in recent time, even if for now, the former still dominates actual policies6. Some, including the IMF, have argued that the effects of austerity have partially been worse than predicted, and not yield-ed the hoped-for results. The current conclusion is that neither of the sides can provide a

ECON IICommittee on Economic and Monetary Affairs II

chaired byFrancesco M. Delorenzi (BE)

The European Union has been largely successful at promoting and maintaining high living-standards in face of declining growth and socioeconomic challenges. Howev-er, mounting pressure from the financial crisis and its repercussions, the EU North-South competitive gap, and the rise of emerging economies puts the EU in a precar-ious position. How can the EU ensure sustainable high living standards and global competitiveness, and what measures should be taken to tackle internal disparities of competitiveness between EU Member States?

1.ABSTRACT

According to the Global Competitiveness Index1 Europe is trailing behind on the Unit-ed States and some Asian countries when it comes to overall competitiveness, infra-structure and innovation. The EU is in need of improving its competitiveness as a union but also has to consider its internal disparities. Northern Europe consistently outper-forms Southern Europe in terms of overall competitiveness. Southern economies suffer from limited product-market competition, especially in services, heavily regulated la-bour markets and inefficient public spending and taxation systems. To assure sustainable growth, Member States (MS) will have to to showcase committed discipline to fiscal pol-icies to the markets, assure banks are capitalised, and on the longer run find solutions to the North-South gap.

2.OVERVIEW

While the United States are recovering well from the crisis, - the US closed 2014 with a 5% growth, the strongest result in 11 years2 - the Euro countries endured a second hit in February 2012, slipping into recession again. The IMF has revised its baseline forecast for this year down to an unimposing 0.8% growth, and estimates the risk of a Euro zone recession as high as 40%, and the risk of deflation at almost 30%3.While the spotlight is constantly pointed at the debt/GDP ratio and the annual budget deficits – the Euro zone crisis is, admittedly, a sovereign debt crisis – it is easy to over-look the fundamental weakness of the Euro zone: some of its countries have become un-competitive. If these Member States want to solve their debt problem, they need their economies to grow and the best way to reach substantial growth is to become more competitive. However, one question is; at what cost? A commonly used index for competition is the unit labour cost. The figures show that unit labour costs in Germany have virtually not changed between 2000 and 2009. Mean-while they rose by approximately one third in the other Euro countries. After the Financial Crisis Ireland, Greece, Portugal and Spain –the countries that have suffered the most- have

1Global Competitiveness Index 2015 - Europe Top 10: http://www3.weforum.org/docs/img/WEF_GCR2014-15_Europe_Im-age.png + Global Competitiveness Report 2015: http://www3.weforum.org/docs/WEF_GlobalCompetitivenessRe-port_2014-15.pdf2Reuters - Third-quarter U.S. economic growth strongest in 11 years: http://www.reuters.com/article/2014/12/23/us-econo-my-gdp-idUSKBN0K111Y201412233The Economist - The dangers of deflation: http://www.economist.com/news/briefing/21627625-politicians-and-central-bankers-are-not-providing-world-inflation-it-needs-some 4Reuters - [Graph] Unit Labour Cost Evolution: http://cdn1.alphanow.thomsonreuters.com/wp-content/uploads/2011/10/euro_zone_unit_labour_costs.jpg5Financial Times - Investment, not the surplus, is Germany’s big problem: http://www.ft.com/intl/cms/s/0/bc17e928-3da7-11e3-9928-00144feab7de.html#axzz3PN9ZR0oi6After Austerity, What? - The Economist: http://www.economist.com/news/europe/21577084-backlash-against-eu-ropes-austerity-intensifying-after-austerity-what

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definite answer to the woes of the EU7. Regional imbalance makes it hard to tackle the Euro zone crisis. Searching for solutions on an EU level with governments representing discordant ideologies and facing different struggles at home results in slow and prudent trying-to-please-all decisions while crit-ics argue unconventional and bold actions are much needed to recover from the crisis.

3.STAKEHOLDERS

Corporate Europe and foreign investors complain about the amount of red tape in the EU. They wish a more simple and harmonious single market and expect the EU and its Member States to make the labour market more flexible and reduce the administrative burden. SMEs ask for an institutional environment where “trial and error” is made possi-ble or even stimulated. This goes beyond the typical market-liberalism calls, as especially Southern countries often suffer from extensive red tape and slow bureaucratic structures that shy away investors.Trade Unions are in general more inclined to the political left. They represent the workers and consider job security as equally or more important than economic growth. On a na-tional level they will object internal devaluation and lobby for less austerity, wealth taxa-tion and full continuation of public services in order to avoid a “social bloodbath”. Joseph Stiglitz, a nobel prize winning economist, calls the austerity measures “a disaster”. He argues that while the electorate is asking and voting for change - pointing to the French electing the Parti Socialiste and more recently the rise to power of Syriza - citizen still have to undergo austerity measures whether they like it or not as their governments are being forced to follow the European neo-liberal path. Stating that austerity is working is “akin to a medieval barber saying that a bloodletting is working, because the patient has not died yet” according to Pr. Dr. Stiglitz8. The Council of the European Union Competitiveness was created in June 2002 to re-spond to the need for a more coherent and better coordinated handling of competitive-ness-related matters on the European level. The composition of the Council depends on the items of the agenda and they meet about five or six times a year.The European Commission9 is the main European institution that can push through mea-sures needed in order to get the Euro zone back to sustained positive growth. However, its powers are limited by the nature of the European Union. The EU is neither an agglomerate of independent states, nor is it the ‘United States of Europe’. It’s somewhere in between. The Commission is entitled to the right of initiative but it is under constant scrutiny of the European Council. European leaders are not keen to give away too much sovereign power to Brussels yet they fear the backlash of introducing harsh measures at home. Besides the politics, the Commission only has 1% of the EU GDP to spend and has no real income of its own making its task vastly complicated.The Commission works via Directorates-General

or DG under the supervision of a European Commissioner and a Director-General. The following departments play a key role in this topic: Competition (COMP), Economic and Financial Affairs (ECFIN), Financial Stability, Financial Services and Capital Markets Union (FISMA), Internal Market, Industry, Entrepreneurship and SMEs (GROW), Research and In-novation (RTD), Trade (TRADE). (See Research links)


Mario Draghi, the president of the European Central Bank (ECB), repeatedly stated over the past months that the solution needed for the Euro zone’s stagnant economy is three-fold. He calls for decisive actions on three fronts at once. 1. a looser monetary policy, 2. faster and deeper structural reforms by national governments, and 3. a more support-ive fiscal policy.On the first, the ECB has announced it will at last use Quantitative Easing (QE) in order to get the cash to flow and stimulate a healthy inflation rate. The Bank of England and the Federal Reserve (USA) have used this form of stimulus to get their economies back on track, with great success. The ECB however was very slow on this mainly because of Germany and its Bundesbank which long opposed QE, fearing the ECB would outstretch its mandate. Additionally, QE is considered as a last-resort effort in the toolbox of the ECB, and not without criticism regarding how far it will take the Euro into deflation, and at what point it might turn toxic10. On the second we can note that the Euro zone’s periphery – Ireland, Portugal, Greece, Spain- has made a tremendous effort reforming its obsolete governments. Even France and Italy are, slowly and reluctantly, joining in. However, the effects on the local population is often severe in the short-term, and results can be slow to show11. With respect to the recent Greek elections, the continuation of this policy path shows increased difficulty.On the third little has been done, as this overlaps with a debate about increased integra-tion, which is opposed by countries such as Germany on the fears of the higher burden and risk they would have to shoulder potentially12.

7.Austerity, Pro-Cons: http://www.economicshelp.org/blog/5366/economics/austerity-pros-and-cons/8.Social Europe - Europe’s Austerity Disaster: http://www.socialeurope.eu/2014/09/europes-austerity-di-saster/9.Departments of the European Commission: http://ec.europa.eu/about/ds_en.htm10.The Perils Of A Weak Euro: http://www.spiegel.de/international/business/ecb-decision-to-weaken-eu-ro-comes-with-pluses-and-minuses-a-1015322.html11.Growth Effects of Structural Reforms in Southern Europe: http://ec.europa.eu/economy_finance/publi-cations/economic_paper/2013/pdf/ecp511_summary_en.pdf12 http://www.theguardian.com/business/2015/jan/28/bank-england-governor-attacks-eurozone-auster-ity

ECON II - Committee on Economic and Monteray Affairs II

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assets like government bonds. This cash injection lowers the cost of borrowing and boosts asset prices to support spending and get inflation back to target. If inflation looks like be-ing too high, the ECB can sell these assets to reduce the amount of money and spending in the economy. QE won’t solve the Euro zone’s economic woes on it’s own. Such a measure can only ever be the anaesthetic before the corrective surgery. Monetary expansion must therefore be tied to deeper and more far-reaching structural reforms if it is to be part of a solution to the continent’s struggles.

EU Directive on Services in the Internal MarketAdopted in 2006, the Directive on Services in the Internal Market15 had a stated goal of removing legal and administrative barriers to trade in the services sector. The origins of the Directive went back to the Lisbon European Council in 2001, where it was requested that the European Commission launch a new strategy to dismantle the remaining barriers to services in the internal market in order to release the untapped growth potential of services markets.

Europe2020Europe 2020 is the EU’s ten-year growth and jobs strategy that was launched in 201016. It was conceived to address the shortcomings of Europe’s growth model and creating the conditions for a smart, sustainable and inclusive growth; rather than merely setting a strat-egy to overcome the economic crisis. Five headline targets have been set for the EU to achieve by the end of 2020. These cover employment; research and development; climate/energy; education; social inclusion and poverty reduction.

Small Business ActIn 2008 the European Commission launched the Small Business Act17, a program intended to support the EU’s SMEs by encouraging entrepreneurship, adapt policy to SME needs, and facilitate SME’s access to finance.

Trade Deals• Canada - EU Comprehensive Economic and Trade Agreement (CETA)The recently signed trade agreement with Canada will make it easier for our enterprises to export overseas and do business in Canada18

John Maynard Keynes13, one of the most influential economists of the past century, argued that, during times of economic crisis and high unemployment rates, the self-balancing mech-anisms of the free market are too slow and that governments are in the best position to correct the state of the economy in short term by increasing investment creating a more modern infrastructure and getting people to work. The ECB disapproves, in sotto voce, of Ger-many for doing just the opposite.Opponents to Keynesian economics, such as Nobel laureate and free-market thinker Milton Friedman14, state that Keynes’ disciples have misinterpreted his ideas. While some acknowl-edge Keynes is right concerning the effectivity of government investment during an acute crisis, they consider these drastic policies inadequate, illiberal and morally wrong in better economic circumstances. they claim that government, which is by definition connected to hu-man error, mustn’t try to control the functioning of the market by intervening in the economy.If government investment is the solution then there is one big issue that needs to be dealt with: where does the money come from? In times of the Great Depression sovereign debt was not an issue making Keynesian solutions much easier. Put simply, a government could take a loan and pay its debts when growth returned. Things have changed, today many gov-ernments can hardly pay their current debts sparking the old Right vs. Left debate. Liberals and Centre-Right Conservatives prefer calculated investments, finding money by selling as-sets, cutting wasteful subsidies and slimming the government. Social-Democrats are more inclined finance these expenditures by raising taxes, more precisely by implementing a tax shift and taxing wealth, so that the strongest shoulders, who suffered less or even prospered during the crisis, carry the heavier loads. They believe in a prominent role of the government in the economic rebound. When Europe will finally manage to kickstart its economic growth it will also have to handle the ever growing competitiveness disparity on a regional level. Southern Europe is still trailing behind because of its unappealing unit labour costs and productivity. Companies in north-west Europe will benefit from a widening competitive advantage over their southern European counterparts as growth returns, a survey of executives by Roland Berger Strategy Consultants GmbH showed. The survey also suggested that Europe’s competitiveness will de-cline over the next years compared to Asia and The United States. On a global level, Europe has to keep its position as a big player in the international trading scene and position itself as an attractive region to invest.


Quantitative EasingIf interest rates are very low and the Bank’s Monetary Policy Committee expects inflation to fall below the EBC’s 2% target, it can inject money directly into the economy to boost spending. This is quantitative easing. The Central Bank creates new money electronically to buy financial


13.EconLib - John Maynard Keynes: http://www.econlib.org/library/Enc/bios/Keynes.html14.EconLib - Milton Friedman: http://www.econlib.org/library/Enc/bios/Friedman.html15.European Commission - Directive on services in the Internal Market : http://ec.europa.eu/internal_market/services/services-dir/index_en.htm

16.European Commission - Europe2020 in a nutshell: http://ec.europa.eu/europe2020/europe-2020-in-a-nutshell/in-dex_en.htm17.European Commission - Small Business Act - Benefits: http://ec.europa.eu/enterprise/policies/sme/small-business-act/benefits/index_en.htm18.European Commission - CETA: http://ec.europa.eu/trade/policy/in-focus/ceta/

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Cut the Tape, Frans!“there is both good news and bad news for Europe. The bad news is that over-regulation, both at the EU and national level, has prevented the economy from growing fast-er. The good news is that, by removing barriers to investment, trade, and innovation, an enormous potential can be unleashed. Releasing this potential is also consistent with the much-stated–and much less acted upon–political will to create a single market for goods and services within the European Union.” says Carlo Stagnaro of Istituto Bruno Leoni, a Milan-based think tank22. The top vice-president of the European Commission, Frans Timmermans (NL) made a clear stance on the issue of extensive regulation during his three-hour parliamentary hearing before his confirmation. He is set to change European law-making culture. He will assess current EU laws and present a plan later this year on how to improve the way the EU works. He no longer wants a Europe that dictates what kind of olive oil should be on restaurant tables and that discourages young entrepreneurs with loads of superfluous EU administration. His key job as Juncker’s second-in-command will be to cut unneces-sary laws and making the EU less bureaucratic while also making law-making more transparent. He pledges to reduce as much legislative burden as possible without scaling down on Europe’s principles.23


• February cover issue - Greece and the future of Europe - The Economist: http://www.econ-omist.com/news/leaders/21641200-syrizas-win-could-lead-grexit-it-should-lead-better-future-euro-go-ahead?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

• Euro Zone Crisis Timeline - The Guardian: http://www.theguardian.com/business/interac-tive/2012/oct/17/eurozone-crisis-interactive-timeline-three-years

• The Dangers of Deflation - The Economist: http://www.economist.com/news/brief-ing/21627625-politicians-and-central-bankers-are-not-providing-world-inflation-it-needs-some

• VIDEO: What is Quantitative Easing? - Bank of England: http://www.bankofengland.co.uk/monetarypolicy/pages/qe/default.aspx

• A list of all the Departments of the Commission: http://ec.europa.eu/about/ds_en.htm

• World Economic Forum - Rebuilding Europe’s Competitiveness Report: http://www3.we-forum.org/docs/WEF_RebuildingEuropesCompetitiveness_Report_2013.pdf

• Ongoing negotiations with the U.S. over a Transatlantic Trade and Investment Pact (TTIP)The EU and the U.S. are finalising negotiations for the establishment of a free trade zone. The better trade conditions would result in multilateral economic growth and would bene-fit EU businesses. Europe’s economy would grow by €120 billion thanks to the agreement19.


Whatever it takesThe European Central Bank has just fired its famed ‘bazooka’. Mario Draghi underlined his determination to go the extra mile to save the Euro zone economy by announcing the Frankfurt-based bank will purchase government bonds over the next years to stimulate the European economy. Financial markets were anticipating the introduction of Quantitative Easing (cfr. video in Research Links) for a long time, despite fierce German resistance. Many didn’t expect however that the ECB would go as far as to pump €60bn per month into the Euro zone. Libertarian critics say that with this measure, the ECB is “indirectly raising a tax on bank savings”. With the extra capital, banks will be less dependent on their clients savings, thus won’t need to give high interests on savings. If the inflation will indeed go up then saving money - money which will lose its value- at the bank won’t be beneficial anymore. Central bankers support this effect because, along with the cheaper loans, it will encourage consumer spending.In the light of the Greek elections – Which in the meantime have been won by Syriza, a radical leftist party - the ECB locked out Greece from its bond-buying program for at least six months in order to put pressure on whoever will lead the next Greek government. With the recent formation of a radical left - radical right coalition government that opposes EU deals, it is not likely that the ECB will make soon reverse that decision.

Juncker’s weapon of mass investmentThe new Commission president Jean-Claude Juncker recently announced the proposal for the European Fund for Strategic Investments (EFSI) and the expansion of the Europe-an Investment Bank (EIB) in order to boost public investment in the EU. His master plan is to insert €21 billion of seed money to leverage a total of €315 billion from Member States and private capital in order to kick-start economic growth20.His plan is quite controversial. The Royal Society, one the most respected scientific fellowships, has opposed the Commis-sion’s plan to take €16bln from the Horizon 2020 budget to finance the €21bln seed money. While Europe is trailing behind on innovation and research, EFSI is taking away a part of the meagre budget devoted to R&D. Just 7% of the EU budget is devoted to Hori-zon 2020 against almost 40% for contested farm subsidies21 and apart from the Nordic countries not a single EU Member manages to meet the European target of allocating 3% of GDP to research and development.


19.European Commission - TTIP: http://ec.europa.eu/trade/policy/in-focus/ttip/20.FT - Jean-Claude Juncker to unveil €315bn EU programme21.European Budget 201222.CapX - The EU needs to reboot the Single Market23.EU Observer - Self-assured Dutch commissioner pledges to change EU culture

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growth in the EU1. However these gains could have been considerably higher if the removal of most of the remaining barriers was achieved. They do not always allow stakeholders to take full advantage of the single market and more specifically cross-border trade2. Many bureaucracies result from differences between nation-al legal systems, for instance the existence of 28 different tax systems which cause considerable administrative burden to companies3.

Since the start of the crisis, the EU has taken urgent measures to enable financial markets to operate again and to make them stable.Nevertheless, further measures must be taken to benefit the real economy and encourages sustainable economic growth. With trade relations throughout the EU becoming more and more reliant upon information and communication tech-nologies (ICTs)4 , the digital sector is a main driver for productivity and creativity- as Jean-Claude Juncker, the President of the European Council (EC) declared: “(...) the key ingredient is to create a Digital Single Market (DSM5).” where individuals and businesses are free to trade cross-border online making no sense for each EU country to have its own rules for telecommunications services, copyright and data protection. The DSM it’s built on the concept of the common market which ensure that all citizens, regardless of where they live, can benefit from and contribute to it6. The cur-rent situation is particularly prejudicial for small and medium-sized enterprises (SMEs) being dramatic the fact that so far only 14% trade online7, bearing in mind that SMEs make up 99% of all businesses in the EU. The EU is undoubtedly stronger as a collective in the new world order of trade mar-kets aiming to establish peace and stability, economic growth and sustainable

INTACommittee on International Trade chaired by

Margarida Pereira (PT)With there being renewed calls by Jean-Claude Juncker for the European Union to adopt a Digital Single Market as detailed within the Europe 2020 strategy, how can the EU best proceed with the development of such a framework which brings enhanced trade benefits to all stakeholders, whilst at the same time re-specting the complex legal barriers that exist between Member States?

1.ABSTRACT

The European Union (EU) is facing a moment of transformation to come out stronger from the recent crisis- it needs to turn into a smart, sustainable, and inclusive economy that can in turn create high levels of employment, productivity, and social cohesion-. One of the biggest opportunities to boost the EU’s economic growth is the imple-mentation of a Digital Single Market, as it is prioritized by Europe’s 2020 strategy. Estimates predict an additional € 250 billion of growth-potential within Europe. The process of establishing such a framework is an incredibly complex procedure, with there being a veritable minefield of legal barriers that need to be over-come or navigated in order to achieve full market parity amongst Member States- therefore, benefit of what could represent a social and economical milestone to the EU itself-?

2.OVERVIEW

The European Union and its Member States have been engaged in how can the EU overcome these obstacles in order to make all the Member States the process of market integration over a long period- in the mid to late of 80s, Europe started to come up from stagnation, propelled by a drive to facilitate the internal trade by the removal of barriers on products and services between Member States’ markets- the objective was to held together the fragmented national markets and create a frontier-free single market-.It’s clear that the lowering of those obstacles has brought numerous benefits to more than half a billion citizens: as not only the freedom to travel, study and work abroad but also through wider choice of products and lower prices. Traders have been able to operate unhindered across borders boosting their efficiency and competitiveness. Between 1992 and 2006, these measures on an integrated economy generated an additional 2.75 million jobs and 2.15 percent in

1.European Economy Economic Papers, No 271, January 2007, page 8;2.See also: https://www.youtube.com/watch?v=1Qi3iOBLQbY; 3.See also: https://www.youtube.com/watch?v=ev3lOsKYwzs; 4.Definition - What does Information and Communications Technology (ICT) mean?: http://www.techopedia.com/defini-tion/24152/information-and-communications-technology-ict; 5.Find full speach here: http://juncker.epp.eu/my-priorities ;6.See also: https://www.youtube.com/watch?v=thJ2AelUVkQ&list=UUYBQQU7VCu8M6djxI4dvpIg;7.Digital Agenda Scoreboard 2014: https://ec.europa.eu/digital-agenda/en/news/scoreboard-2014-progress-report-digi-tal-agenda-targets-2014

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development in Europe. It requires collective commitment at European level, which must respect the Union’s status as a facilitating body and look to create an outcome which remains beneficial for the range of stakeholders.

• What does the Single Market mean to European citizens?• What are the main benefits and shortcomings of the topic?• Why is it a framework like Digital Single Market being adopted in Europe?

3.STAKEHOLDERS

The development of a framework such as the Digital Single Market affects mainly three categories: EU individuals, consumers and companies (especially the SMEs) - national and regional, public and private, economic and social.The cross-barrier trade is a space that must benefit all European citizens, protecting them, and ensuring that their rights are respected. The reality is that awareness of the internal market and its benefits is not yet wide-spread and many people are still facing difficulties to reach it fairly: there are still labour issues, inequalities, problems with recognition of academic qualifications, and many others. From a consumer perspective, products and services such as phone calls, SMS and access to the internet should be usable without any geographical discrimination, on the same terms when the consumer is home and wants to connect with some-one in a different Member State, and when the consumer is travelling within the EU (roaming9). However, Europe still faces negative market discrimination among consumers which is evident in the difficulty to reach products and services from other Member States10, together with the fact that some web traders are not willing to sell cross-border11.A trade is only fair if both players, consumers and entrepreneurs, take advantage of it. But the fragmentation of the market continues to hinder firms in scalability, flex-ibility, and cost-effectiveness. Businesses and small innovative firms are discour-aged by the legal and structural hurdles they encounter12 as for example at the moment they have to register more than once and in different countries in order to operate online. Clearly there must be enforced and respected rules, particularly where they are put in place to protect the consumer, but those rules should make things simple.

Moreover, not only European countries are themselves beneficiaries of a truly single market, as it is estimated 4% growth in GDP (Gross Domestic Product) by 2020, but also governments can also achieve significant efficiencies by embracing digital technologies with the example of Estonia’s successful e-governance initiative13. Single market policy can only be enriched by the contribution of a wide range of stakeholder- consumers, small investors, small businesses, NGOs and represen-tatives of local and regional authorities can contribute to reach wider choice, lower prices, greater economic growth and more jobs-.

• How would security as well as awareness of consumers’ and retailers’ rights and obligations online be improved?• Which strategy should be considered for a balanced Single Market development capable to deliver concrete benefits to business, consumers and EU nationals?• How can the full potential of digital single market be aimed both to consumers and businesses?


The impact of language barriers and varying levels of economic development, the purely economic vision on the social dimension of the single market, the lack of information and security/privacy concerns about the topic, the fact that the Member States continue to compete with one another economically seeking their own national interest rather than the greater good of the EU and finally, the absence of a number of member states from the single currency are considered the main obstacles to the achievement of economic integration. The single market is still largely fragmented, essentially into 28 national markets. The current framework does not fully address such fragmentation, with Union rules merely defining a baseline which are often implemented in diverging ways by the Member States. A truly single market should promote competition, investment and innovation in new and enhanced networks by promoting market integration and

8.Infographic: EPP & Digital Single Market: http://juncker.epp.eu/sites/default/files/attachments/infographic_digital_sin-gle_market.pdf;9.More about Roaming: http://ec.europa.eu/digital-agenda/en/roaming;10.See also: https://www.youtube.com/watch?v=FGpSpicZC8Q;11.See also: https://www.youtube.com/watch?v=D6Aatv5ea0Y;12.See also: https://www.youtube.com/watch?v=g22ydMKWLxU;13.More about e-Government: http://ec.europa.eu/digital-agenda/en/living-online/public-services;

INTA - Committee on Internal Market

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Treaty (1993)20, the Amsterdam Treaty (1999)21 and the Lisbon Treaty (2009)22. In parallel there were major efforts made to deepen integration within the existing framework: the first of many Internal Market Action Plans (1997)23, the Financial Services Action Plan (1999)24 and the Services Directive (2006)25.The EU now stands for the Commission’s proposition on a smart, sustainable and inclusive strategy - Europe 202026 - that calls for i) adapting public policies more towards promoting green and innovative goods and services, while ensuring open and competitive markets ii) improving framework conditions for businesses to innovate, including the effec-tive and efficient protection of intellectual property rights through the introduc-tion of the single EU patent and a specialised Patent Court27 iii) creating an open Single Market for services on the basis of the Services Di-rective, while at the same time ensuring access to quality services for all consumers iv) stepping up the process of adapting Single Market policies and legislation to the digital era: creation of a Digital Single Market28 v) improving SMEs’ access to the Single Market, e.g. by further simplifying company law and improving access to finance vi) putting into place a new strategy to promote corporate social responsibility and

cross-border services and goods offerings. In the digital field there is a relatively low level of cross-border e-commerce at a time when such activity within individual Member States has been growing quickly. But despite all the digital opportunities that have been improving over the years, 18% of the EU28 population have still never used the Internet and the majority of small and medium-sized enterprises (86%) hardly begin to exploit commercial opportunities of the digital market14. On one hand, businesses name the higher risk of fraud and non-payment, the higher delivery costs and the different fiscal regulations of the different Member States as reasons for the refusal of cross-border selling and differ-ences in pricing. One the other side, there are unsatisfied and mistrusted consumers, whose rights are often being undermined. Along with all that, it is still clear that there is a deficit in digital skills, especially amongst the older generation. To tackle some of those inconveniences, the European Commission set out the Digital Agenda for Europe15 that will update EU single market rules for the digital era. The grow-ing availability of digital infrastructures and services should in turn increase consumer choice, quality of service and diversity of content, and contribute to territorial and social cohesion, as well as facilitating mobility across the Union.

• What measures should be taken to help improve growth, competitiveness and job creation in the Single Market? • How much ‘national interest’ do member states retain?• What should be the priorities for the Digital Single Market?

5. LEGISLATIVE BACKGROUND

In 1957, the Treaty of Rome was signed establishing the European Economic Commu-nity (EEC16 Its aim was the creation of a Common Market which involved a customs union and the free movement of goods, persons, services and capital.Despite all the significant steps that had been made, for instance the achievement of the Customs Union17 and the abolishment of duties between Member States, there re-main a lot of obstacle to overcome. It was then, in 1985, that the EU launched a White Paper18 that listed 279 specific legislative measures to be brought into force by 1992. To achieve them, the EU reformed the Treaty of Rome and adopted the Single European Act19, and in 1993 almost all of the original 279 measures had become law and the single market became a reality. Over the years there were considerable Treaties affecting this subject: the Maastricht

INTA - Committee on Internal Market

14.Accordingly to the Digital Agenda Scoreboard 2014: ;15.Digital Agenda for Europe: http://ec.europa.eu/digital-agenda/;16.European Economic Community: http://en.wikipedia.org/wiki/European_Economic_Community;17.Customs Union: http://en.wikipedia.org/wiki/Customs_union;18.White Paper: Completing the Internal Market: http://europa.eu/documents/comm/white_papers/pdf/com1985_0310_f_en.pdf;19.The Single European Act: http://europa.eu/legislation_summaries/institutional_affairs/treaties/trea-ties_singleact_en.htm;20.The Maastricht Treaty: http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_maastricht_en.htm;21.The Amsterdam Treaty: http://europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_maastricht_en.htm;22.The Lisbon Treaty: http://europa.eu/lisbon_treaty/glance/index_en.htm;23.Internal Market Strategy: http://ec.europa.eu/internal_market/strategy/previous_strategy_en.htm;24.Financial services: Commission outlines Action Plan for single financial market: http://europa.eu/rapid/press-release_IP-99-327_en.htm?locale=en;25.Directive on services in the Internal Market: http://ec.europa.eu/internal_market/services/services-dir/index_en.htm;26.Europe 2020: http://ec.europa.eu/europe2020/index_pt.htm;27.Unified Patent Court: http://en.wikipedia.org/wiki/Unified_Patent_Court;28.Actions for a Digital Single Market: https://ec.europa.eu/digital-agenda/en/connected-continent-legis-lative-package;

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7. USEFUL LINKS FOR FURTHER RESEARCH

The European Single Market: http://ec.europa.eu/internal_market/top_layer/index_en.htm

Obstacles to a European Single Market: http://www.eesc.europa.eu/resources/docs/qe-32-12-328-en-c.pdf

Your Europe (Information, help and advice on EU rights for EU nationals and businesses): http://europa.eu/youreurope/business/index_en.htmSOLVIT (Solutions to problems with your EU rights): http://ec.europa.eu/solvit/index_en.htm

Members of the European Parliament from across Europe give their thoughts on the costs, benefits and future of one the single market: http://www.bbc.co.uk/democracylive/europe-21658420

The UK vision for the EU’s digital economy: http://engage.number10.gov.uk/digi-tal-single-market/

Establishing the Digital Single Market: policy recommendations: http://www.epc.eu/dsm/6/Policy_recommendations.pdf

Why the EU needs a Digital Single Market - Speech by Vice-President Ansip: http://europa.eu/rapid/press-release_SPEECH-14-2182_en.htm?locale=enEurope’s digital challenge: http://ec.europa.eu/europe2020/pdf/20131010_en.pdfInnovating in the digital era - putting Europe back on track: http://ec.europa.eu/eu-rope2020/pdf/20131024_en.pdf

Digital Agenda Scoreboard: http://ec.europa.eu/digital-agenda/en/scoreboard

vii) reforming the financial system to ensure a solid, stable and healthy financial sector supporting the real economy.

• What steps should be taken to enable businesses, in particular SMEs, to have access to and reap the benefits of the Single Market?• Which sectors of the Digital Single Market should be focused on to reduce barriers for consumers and businesses?• How will any form of integration affect current policies and future economic devel-opment?

6. PROSPECTS AND OUTCOMES

The establishment of a single market has been a core element of the European Commision and one of its most important achievements to date. However, significant economic and political developments, such as the financial crisis, the Union’s enlargement and the important trade imbalances between the member states, have led to a reassessment of the costs and benefits of the single market in the domestic context.The truth is that political questions still remain largely outside of single market discussions even though it clearly raises political controversies (e.g. autonomy of member states, social policy, immigration). Indeed, the interaction of different elements in the single market – its laws, its eco-nomics and its politics – remains far from reaching a satisfactory balance.A number of politicians might criticise their own regulatory authorities for acting against the ‘national interest’, asking if it is worth it to put the EU integration in front of national profits. But others believe that it all comes down to three guidelines: in-clusion- by making sure no one in no where is left behind-, transparency- ensuring that consumers understand their rights and duties on the market- and openness- by making sure no Government can control access and content-. The single market today faces important challenges: EU policies have been over years trying to solve it, and consequently they collect significant concerns domesti-cally. It is becoming increasingly clear that the political implications of the single market cannot be isolated from its regulation and that a culture of more open debate amongst the EU and its Member States is required. The single market is not an area of concrete matters; it increasingly leaks into particularly sensitive fields. Whilst it is important to keep discussions about market regulation open to political is-sues, it is equally useful to keep this debate collective and forward-looking.

INTA - Committee on Internal Market25

terms of numbers we are on the top of the list for aid providers, its effectiveness is surely something that must be worked on. Simply bringing food and/or training has shown to be insufficient in solving the problems at hand on the longer term.On another perspective on the issue, a way to properly deal with the flow of migrants that results from these situations must be found.Many platforms and organizations have been established and work together to tackle this problem . However, thousands still die while trying to cross the Mediterranean sea . Nu-merous MS still do not properly welcomed asylum seekers who manage to reach EU soil . Moreover, public opinion is often geared against accepting refugees, which hampers po-litical progress.The granting of refugee status policies still varies, and faces several shortcomings . More-over, even if asylum seekers end up classified as refugees they face discrimination, xeno-phobia, poverty, exclusion and a system that often falls short of allowing proper integra-tion, especially with regard to the right to work. In such a complex issue like this, one must tackle it in all its fronts. A way to properly wel-come asylum seekers and make sure they receive a fair treatment once they are granted the status of refugees while making sure we are effectively fighting the causes of these migrations must be found. • Is the EU providing foreign aid in an effective way making sure their presence is part of a solution to a crisis rather than feeding an endless need of foreign help?

LIBECommittee on Civil Liberties, Justice and Home Affairs

chaired byJosé Eduardo Feio (PT)

The EU has yet to find a definite answer to immigration from third countries, es-pecially with respect to asylum seekers. This covers both the country of origin’s problem, the way asylum seekers are ‘welcomed’, and what happens once they are classified as refugees. What concrete measures should the EU take to provide both short-term and long-term solutions to this problem?

1. ABSTRACT

When discussing immigration, and specially asylum seekers1, one must take a multi-level perspective that starts with why people leave their countries, what their journey to the EU and neighbouring countries entails, and what prospects regarding their future await them here.Firstly, any policy change has to start with the issues that cause these flow of asylum seekers. In order to do that, we must rethink the EU’s foreign aid policy and decide wheth-er Europe is doing everything it can and more so, if existing measures are sufficient, effective, and in accordance with our ideals.Second, we have to evaluate how asylum seekers are ‘welcomed’ in the EU. That they are treated with respect for their rights and that the process through which they are or not guarantee a refugee status is clear and fair. More so, it is essential to make sure these refugees are not put aside from society- that they are truly integrated in the communi-ties they take part in. Only then will we, as the EU, be able to properly tackle one of the great challenges of our time.

2. OVERVIEW

Values such as the respect for human rights, fundamental freedoms and the rule of law under which the EU was founded, broaden EU’s responsibility beyond its own borders and citizens guiding EU’s foreign aid policy to third countries2.In a world full of conflicts and poverty, the EU’s stability and standard of living attract thou-sands of migrants who hope to escape from the most varied situations such as poverty, or war. This process has created migrant routes that have been growing with the recent escalation of conflicts in nearby counties such as Syria, and the aftermath of revolutions in North-African countries, but also with the yet unsolved extreme poverty in countries such as the ones that compose the Horn of Africa.Guided by the aforementioned principles, the EU has become one of the most important foreign aid providers in the world .However, current geopolitical challenges are far from concluding, and will not be resolved by foreign aid alone. One may ask if help is really reaching those in need. Even though in

1.A difference must be made between the terms “asylum seeker” and “refugee”. An asylum seeker is someone that claims to be a refugee but whose claim as yet not been evaluated whereas a refugee is, therefore, an asylum seeker whose claim of being a refugee has been accepted by the responsible authorities for this process (for more information on this process see “Legislativa Background”);2.For more information on the guidance they provide access this article on regulation of foreign aid in the EU: http://www.loc.gov/law/help/foreign-aid/eu.php;3.For more information check Frontex’s migration routes map: http://frontex.europa.eu/trends-and-routes/migra-tory-routes-map;4.BBC article on EU spent on foreign aid: http://news.bbc.co.uk/2/hi/europe/8036096.stm#start;5.UNHCR report in their European working environment in what concerns to asylum seekers: http://www.unhcr.org/pag-es/4a02d9346.html;6.Guardian article on the “colossal humanitarian catastrophe” of refugees dieing in the Mediterranean Sea while trying to reach European soil: http://www.theguardian.com/world/2014/jun/02/europe-refugee-crisis-un-africa-processing-centres;7.Sipegel Online International article on the conditions certain MS provide to asylum seekers: http://www.spiegel.de/inter-national/europe/asylum-policy-and-treatment-of-refugees-in-the-european-union-a-926939.html;8.For more information on this issue consult “4. Main Conflicts and Current Situation”;9.http://ec.europa.eu/employment_so- cial/equal_consolidated/data/document/etg5-policybrief-employment07_en.pdf10.http://www.fmreview.org/en/FMRpdfs/FMR28/35.pdf

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• How can the EU make sure the process through which asylum seekers are or not guaran-teed a refugee status is fair and clear obeying to certain defined standards?• Being refugees a very specific type of immigrants, how can the EU make sure that specific measures are also put in place to properly integrate them in the societies they end up in?

3. STAKEHOLDERS

The European Commission’s Humanitarian Aid and Civil Protection Department plays an essential role in delivering both humanitarian aid and civil protection and are currently at work all the major crises zones around the world.The European Commission has been pushing forward the “Common European Asylum System” for years, creating the Stockholm action plan to bring greater cohesion to differ-ent EU legislation regarding asylum seekers and refugees. The EC is in favour of a quota system to distribute refugees and asylum seekers evenly amongst EU Member States. The Home Affairs Directorate-General of the Commission is their executive arm for this kind of legislation and in charge of the implementation of FRONTEX and EASO (European Asylum Support Office), among others11. The Council of Europe and Member States is a body of the European union that has co-legislative powers and has rejected the initial Dublin III legislation. Their argument was based on the reluctance to overwrite national sovereignty of who they accept as refu-gees to the European Union. This argument addresses the idea of the proposed quota sys-tem within the original Dublin III treaty, which would have automatically allocated asylum seekers and refugees to different Member States.With this decision, they stand in opposition to the European Parliament that voted for the adoption of the quota system. Between Member States, we have to keep in mind the different interests of states, i.e. those currently receiving more asylum seekers than others.The Directorate General for International Cooperation and Development is the Com-mission’s body responsible for designing EU’s international cooperation and development policy and delivering aid all throughout the world in cooperation with the European Ex-ternal Action Service.Plus, the Directorate General in Migration and Home Affairs possesses numerous tools that aims at promoting cooperation between MS making sure asylum seekers are properly welcomed and follow the correct procedure to determine whether they should or not be guaranteed the status of refugees. Frontex12 is the European agency for management of operational cooperation at the exter-nal borders of the MS of the EU.

The European Asylum Support Office was created in 2010 to act as center of expertise on asylum, contributing to the development of the Common European Asylum System 13 by promoting cooperation between MS in this issue also providing practical, technical and operational support to them.

Many international organizations such as the UN High Commissioner for Refugees and the International Organization for Migration work in cooperation with the EU to tackle this issue.NGO’s such as Amnesty International help at both recognizing and dealing with both individual situations where asylum seekers and refugees are in a fragile and delicate status as well as wider situations that may led to deep humanitarian crisis.One must also consider the populations that both live in troublesome areas and end up as asylum seekers as well as the European populations that live in the countries that receive them.EU Partner CountriesThe EU will occasionally establish partnerships with countries to prevent or weaken refugee streams leaving the country in question. This usually happens through development aid, sharing of border surveillance information and direct support for controlling borders, and repatriation treaties.

• Is the EU properly supporting all the key stakeholders that play an important role in what concerns to foreign aid and the way asylum seekers are treated?• Are MS as one of the most important stakeholders in what concerns to the way asylum seekers are welcomed doing enough taking in consideration the increases in migration due to the escalation in conflicts in nearby countries?• Is the cooperation between EU and MS being effective and making sure the tools in place to tackle this problem are being properly used?

4. MAIN CONFLICTS AND CURRENT SITUATION

The EU has compromised itself with the UN targeted a percentage of 0.7% of gross national income to be spent in foreign aid by 2015.However, data suggests this target will be far from being reached14.Nevertheless the EU is still one of the biggest money investors in foreign aid in the world. But one may ask, does investing a lot of money really mean we are tackling poverty and avoiding conflicts?Millions have been spent in foreign aid in countries such as the ones in the sub-Saharan Africa. However, more than a quarter of these countries are poorer than they were in 196015.

11. http://ec.europa.eu/dgs/home-affairs/what-we-do/agencies/index_en.htm12.For more information on Frontex and its actions: http://frontex.europa.eu/;13.For more information on the Common European Asylum System: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/index_en.htm;14. The Guardian article on how EU budget cuts are going to affect foreign aid: The Guardian article on how EU budget cuts are going to affect foreign aid;;15.Spectator article on why foreign aid fails: http://www.spectator.co.uk/features/9121361/why-aid-fails/;

LIBE - Committee on Civil Liberties, Justice and Home Affairs

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and are often suspected of criminal activities.• What measures can be put into practice to ensure the proper effectiveness of EU’s foreign aid policy?• How can we avoid a humanitarian crisis with the escalation of deaths in the Mediterra-nean Sea?• How should the EU respond to the UNHCR’s appealed to opening borders to Syrian asy-lum seekers and how should this response guide future responses to similar crisis?

5. LEGISLATIVE BACKGROUND

The Common European Asylum System is an attempt to create an European wide approach to guarantee high standards of protection for refugees. It is composed by various regu-lations and directives that aim to promote effectiveness and fairness in the treatment of asylum seekers and refugees. It also promotes financial solidarity between MS by means of the European Refugee Fund .The Dublin Regulation defines that the Member State where the asylum seeker first entered is the one responsible for analysing his asylum request but also establishes procedures for the protection of asylum seekers . A new Asylum Procedure Directive is to enter in force in July 2015 to ensure that asylum decisions are more effective and follow the same high standards all across Europe. A new Reception Conditions Directive is also to be put into force in July 2015 that aims to make sure that asylum seekers have their fundamental rights respected while they wait for a decision. It also states that access to employment by an asylum seeker must now be guaranteed within 9 months.

Therefore, rethinking the way we deliver aid as well as our relations with the local and na-tional authorities of the countries we aim to help, seems crucial so to increase the efficiency of our foreign aid policy.Another issue rises when focusing on how the EU deals with the consequences of crisis and poverty in such countries namely the many challenges that rise due to the increasing number of asylum seekers heading for EU MS.From the January to September 2014 at least three thousand people died in the mediterra-nean sea trying to reach EU soil16.While experiencing huge budget cuts countries like Italy have seen the number of migrants arrival increase exponentially due to situation such as the Syrian and Libyan crisis.Even in cooperation with Frontex, only 4 ships, two helicopters and two planes are available to intercept migrants boats and recent events like the British decision to end support for search-and-rescue missions in the Mediterranean sea have taken this issue into another level17.In accordance to the Dublin Regulation the MS in which asylum seekers arrive first must be responsible for their requests which has led to numerous complaints from countries such as Italy, Greece and Malta which receive most of the migrants. The conditions in which asylum seekers are welcomed by these countries are considered by many as inhumane due to their broken unfunded, and badly organized immigration and asylum seeker systems18.Current admission rates are also varying wildly. This was supposed to be addressed by Dublin III, which would have introduced a quota system to all EU countries, but as Dublin III was initially blocked by the Council of Ministers it was later implemented in a weakened form that contains no quota system. Right now, 90% of refugees to Europe are handled by 9 countries, of which German and Sweden take the largest portions.Cecilia Malmstroem19 has stated that the current disparities around the recognition rates are completely unacceptable20 21. In a more specific situation such as the current Syrian crisis, the UNHCR has publicly appealed for the EU to open their borders to this asylum seekers22 23.And even if they are granted refugee status, problems don’t end there. As many other immi-grants they face discrimination , lack of knowledge of the native language, difficulty in finding a job or even lack of institutional help or guidance as many of the EU MS still don’t possess a proper resettlement program for refugees.So far, this overview has put its focus on asylum seekers fleeing violence when using examples. It should not be forgotten that the number of climate change refugees will grow signifi-cantly over the next years and decades. This aspect of the debate is equally important on the long-run and should not be forgotten.A recent study25 published by the UK government highlighted the effects of EU and non- EU migrants to the UK low-skill work-sector. The basic findings are that migrants made a positive contribution to the economy overall. This contrasts to the public opinion, which believes migration to have a negative effect on the economy. However, this gap between the perception and reality of (im-)migration by the general public is typical for the majority of EU Member States. Immigrants are often seen as non-contributing aliens who put drain economy


16.See article on footnote number 6;17.The Guardian’s Article on the response of HOME Office to UK’s decision to half migrants rescue: http://www.theguard-ian.com/world/2014/oct/28/home-office-defends-uk-migrant-pull-factor; 18.The Guardian’s Article on accusations of mistreat and racism over Greek police and Independent’s article on the bad conditions faced by Syrian refugees in Balkan Camps: http://www.bbc.com/news/world-20068145, http://www.indepen-dent.mk/articles/80/Syrian+Refugees+Face+Bad+Conditions+in+Balkan+Camps;19.Cecilia Malmstroem is the EU’s Home Affairs Commissioner;20.Example of Sudanese asylum seekers which rate of recognition is 2% in Spain and 68% in Italy;21.Euronews article on the fact that some EU MS are shunning their responsibilities in what concerns to the number of asylum requests they approve: http://www.euronews.com/2014/06/19/what-share-of-asylum-seekers-is-your-country-taking/;22.In this public appeal the UNHCR referred that the two countries who guarantee more refugee status (Germany and Sweden) guarantee more than half of all refugee status guaranteed by EU Member States;23.The Telegraph’s article on Amstey International claim that Europe has “miserably failed to help Syrian refu-gees”: http://www.telegraph.co.uk/news/worldnews/middleeast/syria/10515120/Amnesty-Europe-has-misera-bly-failed-to-help-Syrian-refugees.html;24.Voice of America’s article on the poor living conditions and xenophobia faced by Syrian refugees in Bulgaria: http://www.voanews.com/media/photogallery/syrian-refugees-face-poor-living-conditions-xenophobia-in-bulgaria/1826090.html;25.https://www.gov.uk/government/ uploads/system/uploads/attachment_data/file/328010/MAC-Migrants_in_low-skilled_ work_Summary_2014.pdf

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7. USEFUL LINKS FOR FURTHER RESEARCH

Excellent overview about the state of asylum laws in Europe by the UNHCR: http:// www.unhcr.org/pages/4a02d9346.htmlLibrary of Congress web page on regulation of foreign aid in the European Union: http://www.loc.gov/law/help/foreign-aid/eu.php Handbook on European law relating to asylum, borders and immigration: http://www.echr.coe.int/Documents/Handbook_asylum_ENG.pdf BBC’s article on migrants and asylum in the EU: http://www.bbc.com/news/world-eu-rope-24583286 European Council on Refugees and Exiles information on refugees in the EU: http://www.ecre.org/refugees/refugees/refugees-in-the-eu.html Eurostat statistics on Asylum: http://ec.europa.eu/eurostat/statistics-explained/index.php/Asylum_statistics BBC’s article on the Lampedusa disaster and EU’s migration dilemma concerning the way it deals with boatloads of migrants: http://www.bbc.com/news/world-europe-24396020 The Real News article on the misthreat of asylum seekers and refugges in Greece: http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumi-val=10215 The Guardian’s view on the refugee crisis: http://www.theguardian.com/commentis-free/2014/oct/28/guardian-view-refugee-crisis-europe-moral-challenge UN – Refugees factsheet with focus on climate change and natural disastershttp://www.un.org/en/globalissues/briefingpapers/refugees/nextsteps.html The Guardian’s article on the reality of Syrian refugees in Sweden: http://www.theguard-ian.com/world/2014/apr/29/syrian-refugees-sweden-new-life ECRE Website on integration and related topics:

A new EURODAC regulation is set to enter into practice in July 2015 that makes this system more compatible with other European laws at the same time that it makes it available for fingerprints of asylum seekers to be used for other purposes such as criminal investigations.The Temporary Protection Directive is an exceptional measure to provide displaced persons from non-EU countries and unable to return to their country of origin, with immediate and temporary protection. It applies in particular when there is a risk that the standard asylum system is struggling to cope with demand stemming from a mass influx that risks having a negative impact on the processing of claims. So far, this policy has never been used.Due to the fact that most MS still don’t have a resettlement program at all for refugees once they are classified as so, in March 2012 a Joint Resettlement Program was adopted . This EU-wide resettlement scheme was proposed by the Commission in 2009 and aims at helping MS in a voluntary basis to finding sustainable solutions for refugees.

• Is the Dublin Regulation creating a fair and effective regulated system for the way these claims should be handled and who should handle them?• How can we make sure that directives like the new Reception Conditions Directive are prop-erly put into practice by MS?• Is the joint Resettlement Program going to solve the problem of the lack of national pro-grams to integrate refugees taking into consideration the fact that its adoption is of a vol-untary basis?

6. PROSPECTS AND OUTCOMES

Dealing with immigration from third national countries specially in what concerns to asylum seekers is one of the most important EU challenges in the 21st century. In what concerns aid-delivery to the countries where they come from, it is clear that a change of paradigm must occur. With countries focusing more and more on their own economy and on their own citizens, how can we make sure that they don’t forget our commitment to for-eign nations and individuals who suffer from wars, poverty among other terrible things that make them leave their mother lands and seek refuge in the EU? Even more, who should be responsible for them when they arrive? Many MS have contested the Dublin III Regulation and say it is unfair and puts too much burden on periphery coun-tries, such as Greece and Italy. The process and rates of refugee status granted vary wildly between MS, and are not yet harmonised, despite ongoing efforts for years now.Finally, even those asylum seekers who gain refugee status often suffer to integrate properly, due to a variety of reasons, which range from the not being allowed to work, to hostility by the public, and missing frameworks within the countries in question.Overall, the relevance of this issue is clear and one must find both short term and long-term resolutions that will improve the situation of asylum seekers and refugees heading for the EU.


26.More information on the European Refugee Fund: http://ec.europa.eu/dgs/home-affairs/financing/fundings/migra-tion-asylum-borders/refugee-fund/index_en.htm;27.This means that if an asylum seeker enters the EU in one country and then travels to another and requests a refugee sta-tus there. The authorities of the second country are allowed to send him back to the first country that served as entry point. Being this country responsible for both evaluating his claim and providing him with proper care;28.More information on the Dublin Regulation: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/examina-tion-of-applicants/index_en.htm;29.More information on the Asylum Procedure Directive: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/common-procedures/index_en.htm;30.More information on the Reception Conditions Directive: http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asy-lum/reception-conditions/index_en.htm;31.EURODAC is an European database of fingerprints from asylum seekers and irregular border-crossers;32.http://ec.europa.eu/dgs/home-affairs/what-we-do/policies/asylum/temporary-protection/index_en.htm33.More information on the Joint Resettlement Program: http://europa.eu/legislation_summaries/justice_freedom_security/free_movement_of_persons_asylum_immigration/jl0029_en.htm;

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rendered stakeholders uneasy, as it significantly delayed the decision making process and caused fragmented actions to take place. In order to unify the EU approach towards military affairs, leading to stronger and more influential actions, a Com-mon Security and Defence Policy (CSDP)3 was adopted. Under the umbrella of the European External Action Service (EEAS)3 and its High Representative, the CSDP enables the EU to take a leading role in crisis management and conflict prevention throughout the globe via multiple initiatives aimed at strengthening international security. No matter how much focus is set on the CSDP, recent events such as the conflicts in the Balkans and the constantly erupting tensions in the Middle-East reflect the need to further improve existing legislation. Nevertheless, ensuring up-to-date regulations are adopted and efficiently put to practice poses a series of challenges for the EU. Firstly, the Union needs to agree on which key ideas should support the reformula-tion of the CSDP. Secondly, we need to decide if a military-focused approach is in fact the best way to meet the goals set by the Petersberg Tasks. Additionally, con-sidering the economic impact of a well functioning CSDP is mandatory, as it allows for Member-states to combine their monetary power to increase the scope of their missions. And finally, we must really ask ourselves if the EU should even consider re-formulating the CSDP5 or if moving forward towards a whole new structure is indeed the most effective answer. • What is the real impact of the CSDP in the world stage?• Which factors should the EU consider when evaluating the efficiency of the CSDP?• Are the Petersberg Tasks relevant in the current international scenario? If not, which adaptations could improve their status?

SEDECommittee on Security and Defence chaired by

Lourenço Cruz (PT)Building European military capabilities - The Petersberg tasks: from a defined spectrum of military actions that the EU can undertake, to the Union’s global contribution on peacemaking tasks and combat forces in crisis management, how can the EU best underwrite its Common Security and Defence Policy and to what extent should this be achieved through the use of military means? 1. ABSTRACT The European Union is one of the major worldwide security and peacekeeping actors. Via the Common Security and Defence Policy, the Union ensures its own security and supports military initiatives across the globe, like the recent fight against piracy in the Horn of Africa and the strategic military situation in the Black Sea Basin. Cur-rent tension situations and budget cuts are causing the CSDP to fail to function as efficiently as planned, which can possibly undermine the EU’s position in the inter-national scene. Reformulation is mandatory in order to secure the EU’s long-lasting peacekeeping objectives, but it poses several obstacles in terms of ideology: while some consider the reformulation of the CSDP to be the best solution, others are convinced the EU requires a new plan- to both sides of this conflict, it is beyond evident that change is necessary, however will it possible to combine the several in-terests of the Member States in order achieve a strong and unified European voice?-.

2. OVERVIEW Even before mankind first began structuring its lifestyle, originating what we nowa-days refer to as societies, we were already obsessed with the concept of safety. Feel-ing protection from exterior harm is part of the human nature, and for millennia we have strived to increase our safety up to a point where it is no longer a primary con-cern. However, phenomena such as globalization gradually convinced us that there is no such thing as absolute protection. In its quest for improved security, the European Union (EU) has been the ground upon which multiple treaties and policies have been perfected and adopted. It all started in 1948, when ten Member-states1 celebrated the creation of the Western European Union2, a military-oriented alliance designed to offer mutual support to its members in case of external aggression. The existence of such alliance naturally stimulated the adoption of other important mar-tial policies throughout the EU.The existence of such a complex mixture of policies, treaties and protocols eventually

1.Belgium, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom;2.http://eeas.europa.eu/csdp/about-csdp/weu/index_en.htm;3.Official website of the CSDP: http://www.eeas.europa.eu/csdp/;4.http://eeas.europa.eu/background/organisation/index_en.htm;5.While some high ranking officers openly support the need to reformulate the CSDP, there are still various experts and analysts that believe the current set of policies is enough to ensure the EU’s position in the world stage;

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3. STAKEHOLDERS When it comes to European decision-making regarding the CSDP, major relevance needs to be given to the EEAS (and within that the European Defence Agency (EDA) and the EU Institute for Security Studies (EUISS)). Established by the Treaty of Lis-bon, the EEAS serves as the EU’s external action regulatory body6. The existence of multiple foreign action plans led by different divisions of the European Commission (EC) makes the role of the EEAS to be particularly imperative, as only under its super-vision can the EU act consistently across the globe.Various organizations have been included in the CSDP over time via the establishment of partnerships. Among them, the United Nations (UN)7 and the North Atlantic Treaty Organization (NATO)8 have acquired particular relevance. The EU-UN co-operation in crisis management was formalized in 2003, reinforced in 2007 and grants the EU additional legitimacy in military operations conferred by the United Nations Security Council. The EU-NATO cooperation in crisis management (Ber-lin Plus) was celebrated in 2002 and gives the EU access to NATO assets both in the planning and military fields. The EU also maintains close cooperation in the field of crisis management with the African Union (AU)9, the Organization for Security and Co-operation in Europe (OSCE)10 and the Association of Southeast Asian Nations (ASEAN)11.NGOs such as the Global Security Institute (GSI)12 and the International Security Information Service Europe (ISIS Europe)13 are also extremely relevant actors in the international stage as they promote peace and provide other organizations and Governments with up-to-date data on security and defence. • What partnerships should the EU maintain to ensure the success of the CSDP?• Should the EU seek the support of other organizations/institutions? If so, which ones?• How can the EU best utilise the insight of NGOs in its decision-making process re-garding the SCDP?

4. MAIN CONFLICTS AND CURRENT SITUATION While some missions under the flagship of the CSDP are signs of success and efficien-cy, there is still much debate14 around the overall sustainability of the policy. On one hand, several organizations and political actors believe the CSDP as the best Europe-an tool to effectively tackle politico-military problems and engage in peacekeeping initiatives. On the other hand, criticism regarding the infeasibility of the policy in the long term is constantly increasing.Most arguments supporting the CSDP state that such policy is the only way to deal with fragmentation in Europe, stating that without a unifying agent, the EU response to erupting situations would be extremely slow and small in scope. The established cooperation agreements with several other organizations is also perceived as valuable for the EU, as it facilitates joint international operations and attenuates bureau-cratic/political barriers between major players in the international scene.Several arguments are also being forwarded by those opposing the CSDP. Firstly, most consider the EU to lack of military capability and perceive the EU-NATO relationship as negative. Some even argue that without the United States of America (USA) and their major role in NATO15, the EU would have close to no military capacity to deal with international incidents. Furthermore, the lack of investment in military as-sets16 by the EU Member-states causes dissatisfaction among military leaders, as said investment would be necessary to decrease the EU dependency on NATO. Finally,

6.http://eeas.europa.eu/what_we_do/index_en.htm;7.Simple overview on the UN http://www.un.org/en/aboutun/index.shtml;8.Simple overview on the NATO http://www.nato.int/nato-welcome/index.html;9.This partnership aims at strengthening political dialogue, improving African peace and security and providing the AU funding for peacekeeping operations;10.The EU is a great supporter of the OSCE because of its comprehensive approach to security, which included politi-co-military, economic, environmental and human dimensions;11.As the two largest regional integration projects in the world, the EU and the ASEAN have been working together for the past decades to ensure common goals are met efficiently;12.The GSI is dedicated to strengthening international cooperation and focuses on disarmament and non-proliferation of nuclear weapons;13.With headquarters in the centre of Brussels, ISIS Europe is an innovative research and advisory organization aimed at providing recommendations and information to public stakeholders in the security and defense fields;14. Several countries like Germany and Poland are still very sceptic to the CSDP, making debates about the policy very common;15. The USA is the major source of NATO assets and currently provides European task forces with equipment and am-munition necessary for EU-led peacekeeping operations. This dependency is perceived negatively by various European institutions and organizations;16. In fact, most EU Member-states are gradually decreasing their military budgets (including France and the UK - two of the most military prominent forces in the EU);

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6. PROSPECTS AND OUTCOMES The Era of Globalization is upon us, and with it the almost impossibility to accurately forward predictions. The complex ingredients of the world stage and the fast-paced rhythm at which international politics are discussed, complicate the precise analysis of how impactful certain occurrences can be. Solving problems even before they appear is a necessity, and one the EU is in great need of. A stance needs to be taken regarding the future of EU’s security, one which will likely change our lives forever and reshape the world as we know it. Should we become military independent to ensure our protection? What will the consequences be if a peace promoter like the EU engages in martial development? How will the EU-NATO relations be affected? Whilst some of these questions might be alarming, failing to answer them might prove an even dangerous scenario. What will happen if the CSDP is rendered inefficient? Will the EU be able to maintain its global status?Amidst a myriad of concerns and possible solutions, finding a wait to secure our fu-ture is one of the main goals, one we will only achieve if we are prepared to make a change. Consequently, the major question should be what do we want the EU to become, and how we are going to achieve it without violating our most fundamental values.Whether by supporting the CSDP and solving its problems while accounting for our

the CSDP has also received intense criticism regarding its legitimacy, as many consider the policy is failing to address input (the possibility for its citizens to participate in the system’s decision-making)17. • Is the CSDP the best way for Europe to steer its politico-military affairs?• Should the EU reduce its military dependency? If so, how can this be done without undermining the EU-NATO relationship?• What key improvements does the CSDP require in order to solve its internal problems and reinforce its status in the international scene?

5. LEGISLATIVE BACKGROUND Upon the establishment of the WEU in 1948 (Treaty of Brussels), René Pleven (at the time French Prime-Minister) envisioned the creation of the European Defence Com-munity18. Even though a Treaty was signed in 1952, the plan was never put to practice. Following this failed attempt, the Treaty of Brussels was modified in 1954, resulting in the reformulation of the WEU and the adoption of three basilar pillars for the Union 19. Over time, the WEU’s social and economic competences were handed over to other European institutions, causing the WEU to deal almost exclusively with defence affairs.From 1988 to 1995 several countries joined the WEU and with various others were established cooperation protocols. In 1999, the Berlin Plus Agreement20 allowed the EU to utilise NATO assets in EU-led crisis management operations. This still-lasting sym-biotic relationship, associated with the Treaty of Amsterdam (1999)21, led to the devel-opment of the Petersberg Tasks22, which were restructured in 2009 upon the adoption of the Treaty of Lisbon23. In 2000, the WEU agreed to transfer most of its functions to the EU, which resulted in the creation of the EUISS and the European Union Satellite Centre (EUSC) in 2001 and the establishment on the EDA in 2004. Following the adop-tion of the Treaty of Lisbon, the remaining competences of the WEU were transferred to the EU and the organisation was closed down in 2011.Alongside the evolution of the WEU, Civilian24 and Military25 Headline Goals were pro-gressively adopted to regulate European action in crisis management.• Is the existing legislation sufficient to ensure the safety of the EU and the continuous support of peacekeeping tasks across the globe?• Which changes should the EU introduce to its regulations in order to further facilitate crisis-related problem solving in and outside the Union?• Has the EU adopted enough long-term solutions to ensure the future effectiveness of the CSDP?

SEDE - Committee on Security and Defence

17.It is widely considered that the CSDP is undervaluing the voice of European citizens. As a system based on unification and integration, the CSDP might be lacking in consistency;18,This community would include West-Germany, France, Italy and the Benelux countries and was aimed at harnessing the combined military power of its members in case of a conflict eruption with the Soviet block;19,To create a firm basis for European economic recovery in Western Europe; to offer mutual assistance to member countries in resisting any policy of external aggression; to promote unity and encourage positive integration in Europe;20.http://eeas.europa.eu/csdp/about-csdp/berlin/index_en.htm;21.http://eeas.europa.eu/csdp/about-csdp/amsterdam/index_en.htm;22.http://eeas.europa.eu/csdp/about-csdp/petersberg/index_en.htm;23.http://eeas.europa.eu/csdp/about-csdp/lisbon/index_en.htm;24.Initially set in 2000, the Civilian Headline Goals aim at regulating European police and law enforcement in crisis situations and post-conflict scenarios. Link to the goal adopted in 2010: http://www.consilium.europa.eu/uedocs/cmsUpload/Civilian_Headline_Goal_2010.pdf;25.Initially set in 1999, the Military Headline Goals aim at ensuring the EU possesses the military assets required to conduct the full range of missions encompassed by the Petersberg Tasks. More information can be found here: http://www.peacepalacelibrary.nl/ebooks/files/05-gl.pdf.

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Paper on the legitimacy of the CSDP:http://euce.org/eusa/2013/papers/1f_sweeney.pdf

Well-structured opinion against the CSDP:http://carnegieeurope.eu/publications/?fa=45439

Article on the military conflict regarding the CSDP:http://web.cenet.org.cn/upfile/53065.pdf

Paper on the economic benefits of the CSDP:http://web.cenet.org.cn/upfile/53065.pdfPolicy brief on the EU’s sanctions policies:http://www.ecfr.eu/page/-/ECFR71_SANCTIONS_BRIEF_AW.pdf

A speech by the High Representative Catherine Ashton on the EU and the UN:http://eeas.europa.eu/top_stories/2013/150213_eu-un_en.htm

partnership with NATO, or by ultimately rejecting the policy and finding a com-pletely innovative system to ensure the maintenance of the Petersberg Tasks, achiev-ing the unification of the European voice and the preservation of our security is the maximum goal.This is the question we need to be ready to ask ourselves, what kind of change do I believe in? How am I going to make a difference and help shape a better future for Europe and the World?

7. USEFUL LINKS FOR FURTHER RESEARCH The EU as a global actor based on the wider Petersberg Tasks:http://www.focusproject.eu/documents/14976/0a29bb72-f73b-4417-8834-2199e0151544

Official website of the EEAS:http://eeas.europa.eu/index_en.htm

Official video of the CSDP:https://www.youtube.com/watch?v=mVdz0vDOKuc

Video explaining the functions of the EU military staff:https://www.youtube.com/watch?v=kmu0D_pca1Q

Foundations of the EU-NATO partnership:http://www.nato.int/docu/pr/2002/p02-142e.htm

Debate on the military dimension of the CSDP:http://news.bbc.co.uk/democracylive/hi/europe/newsid_9770000/9770830.stm

Article on the EU-NATO relationship:http://www.nouvelle-europe.eu/en/csdp-and-nato-friends-competitors-or-both-

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porto 2015

Academic forum of EYP Portugal20, 21 & 22 february

This Academic Preparation Kit is the responsibility of the the Board of EYP Portugal, the Board of the ses-sion and of the team of Chairpersons. General queries should be addressed to the President. Otherwise, the Chairpersons will contact their Committees regarding all pre-session academic preparation tasks.

APPEJ – Associação Portuguesa do Parlamento Euro-peu dos Jovens/European Youth Parliament PortugalE-mail address: [email protected]: www.pejportugal.com

Academic Forum - Porto 2015Email address: [email protected] Facebook page: https://www.facebook.com/afporto2015

Head-organisersE-mail address: [email protected] (reaches both)Telephone numbers:Bruno Moreira – (+351) 912729009Rita Ferreira – (+351) 916916436

Session PresidentE-mail address: [email protected]

CONTACTS

Under the patronage of Instituto Português do Despor-to e da Juventude, I. P. and the Municipality of Porto.

With the support of the Royal Norwegian Embassy, Uni-versidade do Porto, AEFLUP and Gabinete do Parlamento Europeu.

an eyp portugal event in partnership with apa

academic preparation kit - academic forum - porto 2015

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challenge of reconciling