Index 
Texts adopted
Wednesday, 15 February 2017 - StrasbourgFinal edition
EU-Canada Comprehensive Economic and Trade Agreement ***
 EU-Canada Strategic Partnership Agreement ***
 EU-Mongolia Framework Agreement on Partnership and Cooperation ***
 EU-Mongolia Framework Agreement on Partnership and Cooperation (Resolution)
 Agreement on Trade in Civil Aircraft (Product Coverage Annex) ***
 Cost-effective emission reductions and low-carbon investments ***I
 2016 Report on Albania
 2016 Report on Bosnia and Herzegovina
 European Semester for Economic Policy Coordination: Annual Growth Survey 2017
 European Semester for Economic Policy Coordination: employment and social aspects in the Annual Growth Survey 2017
 Single Market Governance within the European Semester 2017
 Banking Union – Annual Report 2016
 Biological low-risk pesticides

EU-Canada Comprehensive Economic and Trade Agreement ***
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European Parliament legislative resolution of 15 February 2017 on the draft Council decision on the conclusion of the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (10975/2016 – C8-0438/2016 – 2016/0205(NLE))
P8_TA(2017)0030A8-0009/2017

(Consent)

The European Parliament,

–  having regard to the draft Council decision (10975/2016),

–  having regard to the draft Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part (10973/2016),

–  having regard to the request for consent submitted by the Council in accordance with Article 43(2), Article 91, Article 100(2), Article 153(2), Article 192(1), the first subparagraph of Article 207(4), point (a)(v) of the second subparagraph of Article 218(6), and Article 218(7), of the Treaty on the Functioning of the European Union (C8‑0438/2016),

–  having regard to Rule 99(1) and (4), and Rule 108(7) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on International Trade and the opinions of the Committee on Foreign Affairs, the Committee on Employment and Social Affairs and the Committee on the Environment, Public Health and Food Safety (A8-0009/2017),

1.  Gives its consent to conclusion of the agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of Canada.


EU-Canada Strategic Partnership Agreement ***
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European Parliament legislative resolution of 15 February 2017 on the draft Council decision on the conclusion, on behalf of the Union, of the Strategic Partnership Agreement between the European Union and its Member States, of the one part, and Canada, of the other part (14765/2016 – C8-0508/2016 – 2016/0373(NLE))
P8_TA(2017)0031A8-0028/2017

(Consent)

The European Parliament,

–  having regard to the draft Council decision (14765/2016),

–  having regard to the draft Strategic Partnership Agreement between the European Union and its Member States, of the one part, and Canada, of the other part (5368/2016),

–  having regard to the request for consent submitted by the Council in accordance with Article 31(1) and Article 37 of the Treaty on European Union and Article 212(1), Article 218(6), second subparagraph, point (a), and Article 218(8), second subparagraph, of the Treaty on the Functioning of the European Union (C8-0508/2016),

–  having regard to Rule 99(1) and (4) and Rule 108(7) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on Foreign Affairs (A8-0028/2017),

1.  Gives its consent to conclusion of the agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of Canada.


EU-Mongolia Framework Agreement on Partnership and Cooperation ***
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European Parliament legislative resolution of 15 February 2017 on the draft Council decision on the conclusion of the Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and Mongolia, of the other part (08919/2016 – C8-0218/2016 – 2015/0114(NLE))
P8_TA(2017)0032A8-0382/2016

(Consent)

The European Parliament,

–  having regard to the draft Council decision (08919/2016),

–  having regard to the draft Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and Mongolia, of the other part (07902/1/2011),

–  having regard to the request for consent submitted by the Council in accordance with Articles 207 and 209 and Article 218(6), second subparagraph, point (a), of the Treaty on the Functioning of the European Union (C8-0218/2016),

–  having regard to its non-legislative resolution of 15 February 2017(1) on the draft decision,

–  having regard to Rule 99(1) and (4) and Rule 108(7) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on Foreign Affairs (A8-0382/2016),

1.  Gives its consent to conclusion of the agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of Mongolia.

(1) Texts adopted, P8_TA(2017)0033.


EU-Mongolia Framework Agreement on Partnership and Cooperation (Resolution)
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European Parliament non-legislative resolution of 15 February 2017 on the draft Council decision on the conclusion of the Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and Mongolia, of the other part (08919/2016 – C8-0218/2016 – 2015/0114(NLE)2016/2231(INI))
P8_TA(2017)0033A8-0383/2016

The European Parliament,

–  having regard to the draft Council decision (08919/2016),

–  having regard to the draft Framework Agreement on Partnership and Cooperation between the European Union and its Member States, of the one part, and Mongolia, of the other part (07902/1/2011),

–  having regard to the request for consent submitted by the Council in accordance with Articles 207 and 209 and Article 218(6), second subparagraph, point (a), of the Treaty on the Functioning of the European Union (C8-0218/2016),

–  having regard to the signature of the Framework Agreement on Partnership and Cooperation (or ‘Partnership and Cooperation Agreement’ – PCA) on 30 April 2013 in Ulaanbaatar, in the presence of the Vice-President of the European Commission / High Representative of the Union for Foreign Affairs and Security Policy (VP/HR), Catherine Ashton,

–  having regard to the Agreement on Trade and Economic Cooperation between the European Economic Community and its Member States and Mongolia, which entered into force on 1 March 1993,

–  having regard to its legislative resolution of 15 November 2005 on the proposal for a Council decision on an amendment to the Agreement establishing the European Bank of Reconstruction and Development (EBRD), enabling the Bank to finance operations in Mongolia(1),

–  having regard to its resolution of 13 April 2016 on implementation and review of the EU-Central Asia Strategy(2),

–  having regard to its resolutions of 16 December 2015(3) and 14 March 2013(4) on EU-China relations, and in particular to recital Y of the latter resolution,

–  having regard to its resolution of 10 June 2015 on the state of EU-Russia relations(5),

–  having regard to its resolution of 16 February 2012 on Parliament’s position on the 19th Session of the UN Human Rights Council(6), and in particular to paragraph 30 thereof,

–  having regard to its resolution of 17 January 2013 on the recommendations of the Non-Proliferation Treaty Review Conference regarding the establishment of a Middle East free of weapons of mass destruction(7), and in particular to recital F thereof,

–  having regard to its resolution of 27 October 2016 on nuclear security and non-proliferation(8),

–  having regard to its legislative resolution of 15 February 2017 on the draft decision(9),

–  having regard to the inclusion of Mongolia in the EU General Preferential Scheme’s Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+),

–  having regard to the long-standing relations between the delegations of the European Parliament and the State Great Khural (the Mongolian parliament), and in particular to the joint statement of the 10th Interparliamentary Meeting (IPM) held on 17 February 2015 in Ulaanbaatar,

–  having regard to the chairing of and hosting by Mongolia of the 11th Asia-Europe (ASEM) Summit, held in Ulaanbaatar on 15-16 July 2016, and of the 9th Asia-Europe Parliamentary Partnership (ASEP) meeting, held in Ulaanbaatar on 21-22 April 2016, and to the respective declarations adopted by both meetings,

–  having regard to the active role of Mongolia in the OSCE Parliamentary Assembly, including the hosting of its Autumn Meeting of 15-18 September 2015 in Ulaanbaatar,

–  having regard to Mongolia’s election to the UN Human Rights Council for the period 2016-2018, and to its declared aspiration to become a UN Security Council member in 2022,

–  having regard to the Mongolian chairmanship of the Community of Democracies in 2012-2013, and of the ‘Freedom On-line’ coalition in 2015,

–  having regard to the preliminary findings and conclusions of the international election observation mission to the parliamentary elections of 29 June 2016 in Mongolia, involving the OSCE Office for Democratic Institutions and Human Rights (OSCE/ODIHR) and the European Parliament,

–  having regard to the address given to the plenary of the European Parliament on 9 June 2015 by the President of Mongolia, Tsakhiagiin Elbegdorj,

–  having regard to the various mutual high-level meetings and visits, including that of November 2013 by the President of the European Commission, José Barroso, to Mongolia,

–  having regard to Mongolia’s ‘third neighbour’ foreign policy, involving relations with the EU, the US, Japan, the Republic of Korea, India, Iran, the countries of Central Asia and others,

–  having regard to Mongolia’s strategic partnerships with Russia and China,

–  having regard to Mongolia’s observer status in the Shanghai Cooperation Organisation (SCO),

–  having regard to the regular high-level trilateral meetings held between Mongolia, Russia and China and between Mongolia, Japan and the US,

–  having regard to the initiatives to integrate different economic projects in the region, including China’s Silk Road Economic Belt, Russia’s Trans-Eurasian Belt Development, and Mongolia’s Prairie Road,

–  having regard to Mongolia’s Individual Partnership and Cooperation Programme with NATO, agreed in 2012,

–  having regard to Mongolia’s declaration of September 2015 of its intention to pursue permanent neutrality status,

–  having regard to Mongolia’s self-declared nuclear weapon-free status, recognised by the UN in September 2012,

–  having regard to Mongolia’s International Cooperation Fund, aimed at sharing experiences with other countries undergoing democratic transformation, such as Myanmar, Kyrgyzstan and Afghanistan,

–  having regard to the trust-building efforts including the Ulaanbaatar Dialogue on Northeast Asian Security, involving North Korea, as well as the Forum of Asia,

–  having regard to the concluding observations of the UN Committee against Torture on the second periodic report of Mongolia adopted in August 2016,

–  having regard to Rule 99(2) of its Rules of Procedure,

–  having regard to the report of the Committee on Foreign Affairs (A8-0383/2016),

A.  whereas Mongolia can serve as a democratic model not only for the region’s other emerging democracies, but also for the regimes with more authoritarian tendencies;

B.  whereas the European Communities established diplomatic relations with Mongolia on 1 August 1989;

C.  whereas the EU and Mongolia enjoy friendly relations based on political, societal, economic, cultural and historical ties;

D.  whereas the EU and Mongolia have many converging positions regarding most major international challenges, and Mongolia plays a constructive role in international relations, especially in multilateral organisations;

E.  whereas EU relations with Mongolia are mainly focused on development cooperation projects aimed at enabling the country to steer the ongoing rapid transformation towards a socially inclusive and economically sustainable development of its society;

F.  whereas Mongolia is interested in developing relations with the EU further and expanding the existing cooperation beyond development cooperation; whereas the Partnership and Cooperation Agreement underlines the growing importance of EU‑Mongolia relations based on shared principles such as equality, mutual benefit, democracy, the rule of law and human rights, and formally opens up the possibility for both sides to develop new fields of cooperation in areas such as not only business, trade, development, agriculture, environment, energy, modernisation of the state, but also education, culture and tourism;

G.  whereas the development of the EU’s relations with Mongolia is still within the responsibility of the EU Delegation in Beijing; whereas currently Bulgaria, the Czech Republic, France, Germany, Hungary, the United Kingdom and Italy have established their own embassies in Ulaanbaatar;

General provisions

1.  Appreciates the friendly and constructive relations between the EU and Mongolia;

2.  Recognises Mongolia’s specific geographical position between China, Russia and the countries of Central Asia and North-East Asia, with their great potential for the global economy, its importance for stability within the region, its regionally rather exceptional established democratic credentials, and the constructive role it plays by assisting and facilitating peaceful solutions to the conflicts and confrontation in the region and by promoting regional economic integration;

3.  Recognises that the democratic transformation which commenced in the 1990s is continuing consistently; acknowledges the tangible progress made in terms of socio-economic reforms; takes note, nevertheless, of the challenges that exist in the areas of sustainable development and economy, finance, good governance, fighting corruption, social security and environmental protection and political polarisation and are compounded by an increasingly testing international environment;

Institutional framework and diplomatic representation

4.  Welcomes the deepening and expanding nature of the EU-Mongolia relationship, as manifested in the Framework Agreement on Partnership and Cooperation (PCA), which takes in areas including political dialogue and human rights, trade and development assistance, as well as cooperation in the fields of agriculture and rural development, energy, climate change, research and innovation and education and culture, which are of great importance for economic diversification and resolving the current economic problems, as well as for the long-term transformation of an originally nomadic society;

5.  Welcomes the establishment of a Joint Committee to accompany, pursuant to Article 56 of the agreement, the implementation of the PCA, and encourages it to report regularly to both the European Parliament and the Mongolian Parliament;

6.  Urges the three Member States which have not yet done so to speedily finalise their national ratification processes in order to allow the long overdue conclusion and entry into force of the PCA;

7.  Emphasises the need to further enhance the parliamentary dimension of EU‑Mongolia relations; regrets the absence from the PCA text of articles that would establish a Parliamentary Cooperation Committee (PCC) under the PCA to undertake democratic scrutiny of the implementation of the agreement and to enhance political dialogue between the two parliaments; encourages negotiations, therefore, on a new protocol to remedy the situation to take place as soon as s possible, subject to Article 57 of the PCA on future cooperation, as urged previously by the Mongolian and European Parliaments in the Joint Statement of the 10th IPM;

8.  Is concerned at the fact that diplomatic relations with Mongolia are currently still being run from the EU Delegation to China; urges the Council and the VP/HR to turn the European Union Liaison Office in Ulaanbaatar into a fully fledged EU Delegation, a measure that is of the utmost importance with a view to facilitating political dialogue and cooperation on human rights and democracy, boosting capacity to implement and oversee EU assistance projects, and promoting trade in goods and services, as well as exchanges of people and cultural exchanges;

Democracy, the rule of law, good governance and human rights

9.  Welcomes Mongolia’s efforts to consolidate democratic progress and the rule of law, including multi-party elections, more independent media and a vibrant civil society; welcomes, from this point of view, the participation of Mongolia in the Community of Democracies;

10.  Underlines that respect for freedom of the media and freedom of expression are essential to further consolidation of democracy, the rule of law and human rights in Mongolia; encourages the Mongolian authorities to address issues related to reports of politically motivated interference in media work and to refrain from penalising and restricting government-critical offline and online media; encourages the Mongolian Parliament to codify such fundamental rights explicitly and to implement them under strong scrutiny;

11.  Is convinced that the democratic transformation of Mongolia could produce a positive spillover effect in the region, in which complex transformation processes are taking place, and that Mongolia could in this sense constructively contribute to the stability and common wellbeing of the region; calls on the EU to take this into account when programming regional cooperation, especially with the countries of the Central Asian region, as well as the wider region;

12.  Praises the fact that general respect for electoral rules was demonstrated on the occasion of the recent elections; calls on the Mongolian authorities to address the recommendations made by the OSCE/ODIHR following the parliamentary elections of 29 June 2016, including stabilisation of the electoral law, restrictions on campaigning, media independence, and impartiality and comprehensiveness of the information available to voters;

13.  Expresses interest in sending a European Parliament observation mission to the presidential elections scheduled for mid-2017;

14.  Encourages Mongolia to address the outstanding challenges of respect for independence of the judiciary;

15.  Welcomes the recently started legislative efforts to strengthen the legal basis for the fight against pervasive corruption, which brings with it the real and great risk of undermining the social cohesion of the country, as well as efforts to address human rights and social conflicts; encourages Mongolia to adopt substantial reforms and to implement them in a timely manner; refers in this context to its own experience whereby people convicted of corruption must be held consistently responsible; recommends that the country strengthen its cooperation with the EU, the OSCE and the UN on dealing with corruption; is convinced that active involvement in implementing international recommendations on corporate social responsibility (CSR) in the economic productive sector and the public and administrative life of Mongolia could play a positive and substantive role in these undertakings;

16.  Recognises the country’s commitments and legal framework with a view to suppressing trafficking in human beings, but remains concerned about the concrete situation, and urges Mongolia to implement fully the 2012 anti-trafficking law and the related national plans;

17.  Is pleased that an agreement between the EU and Mongolia has been reached in principle and that preparatory work is underway to launch a regular EU-Mongolia Human Rights Dialogue in 2017;

18.  Welcomes the fact that, after ratifying the Second Optional Protocol to the International Covenant on Civil and Political Rights, the Mongolian Parliament adopted in December 2015 a revised Criminal Code, which, among other important legal reforms such as the prohibition of torture, abolishes the death penalty for all crimes; notes that the newly elected Parliament has postponed the implementation of the revised Criminal Code and encourages the Mongolian authorities to implement this important reform without further delay;

19.  Notes Mongolia’s progress in improving its legal framework in line with international human rights obligations, institutional reform, including its Independent National Human Rights Commission, and efforts aimed at capacity-building and human rights awareness-raising, and the continued commitment to address remaining challenges related to the protection and promotion of universal human rights standards, such as those highlighted at the 2015 second UN Universal Periodic Review (UN-UPR), including preventing and investigating all allegations of torture, protecting women’s and children’s rights, as well as those of prisoners’;

20.  Expresses concern over reports of cases of arrest without a legal warrant, and torture and impunity inside Mongolian jails; joins the United Nations Human Rights Council’s (UNHRC) call for effective measures to guarantee that all detained persons are afforded in practice all fundamental legal safeguards in accordance with international standards; calls on Mongolia to follow up on its commitment to establish an independent mechanism to investigate allegations of torture and ill‑treatment promptly and effectively;

21.  Commends the project supported by the EU in support of LGBTI rights in Mongolia; is nevertheless worried by the ongoing discrimination and harassment committed against the LGBTI community;

22.  Recommends Mongolia, in accordance with the already ratified Convention on the Rights of the Child, to legally ban corporal punishment not only in educational establishments, but entirely, and to address with specific and targeted measures the non-declining rates of violence against children, the economic exploitation of children, and incidents causing death or severe injuries involving children; calls on all relevant EU institutions for assistance with this issue;

23.  Recommends strengthening the situation in the area of health and safety by implementing ILO Convention C176, as well as the other ILO Safety and Health Conventions not yet ratified;

24.  Supports Mongolia’s continued and honest efforts to progressively eradicate all forms of child labour, and to guarantee the rights of the child;

25.  Welcomes Mongolia’s legal framework for realising equal rights for women and men adopted in 2011, and the progressive elimination of discrimination against women;

Sustainable development

26.  Welcomes the substantial progress made by Mongolia since the 1990s in economic development and poverty reduction in line with the Millennium Development Goals (MDGs); supports Mongolia in its pursuit of the UN Sustainable Development Goals (SDGs), in line with the principles of aid effectiveness and transparency;

27.  Recognises that deepened regional economic integration will open up opportunities for Mongolia in terms of a more prosperous future and economic success, takes note of the fact that Mongolia is simultaneously looking for economic alliances and partners that would allow it to fully exploit its cooperation potential by respecting at the same time its legitimate national political and economic interests, the long-standing commitment to multidirectional diplomacy, traditional identity and lifestyle or the democratic foundations of Mongolian society;

28.  Is concerned, nevertheless, at the fact that in some areas poverty is becoming entrenched and that the reported economic boom of 2010-2012 did not contribute sufficiently to poverty reduction in the country;

29.  Encourages Mongolia in its efforts to achieve sustained economic growth; expresses its concern at the sharp slowdown in GDP growth, which in 2011 stood at record levels (17,3 %) but was only 2,3 % in 2015, with the 2016 figure forecast to be 1,3 %; is concerned that the budget deficit, which has risen to 20 % of GDP, may have a negative impact on poverty alleviation, as well as on the social inclusiveness and cohesion of the social protection system;

30.  Welcomes the fact that EU development assistance to the country for 2014-2020 has been more than doubled – standing at EUR 65 million, in comparison with the 2007‑2013 figure of EUR 30 million – with a focus on improved economic governance and vocational training for better employment opportunities; encourages Mongolia’s participation in regional programmes financed by the EU; notes the relatively good implementation of EU projects and programmes assisting Mongolia’s development and modernisation;

31.  Emphasises the importance of a continuous administrative reform focusing mainly on building up a highly professional administration at both national and local level; encourages the EU institutions to help Mongolia with developing the necessary resources and expertise, in the interest of better equipping the country to face the challenges of the complex economic and societal transformation processes and to increase the absorption capacity for EU funds in the country;

32.  Calls for more exchange opportunities for students and academics under the Erasmus+ and Marie Skłodowska-Curie programmes and for people-to-people contacts, including for artists, to be broadened between the EU and Mongolia; calls on the EU to include research and innovation in its fields of cooperation with Mongolia;

33.  Welcomes Mongolia’s timely deposition on 21 September 2016 of the ratification instrument of the Paris Agreement on climate change; is concerned that the combined effects of climate change, the extensive growth of livestock farming, a dramatic increase in migration from the countryside to the capital, as well as the massive use and rapid exploitation of natural resources such as water and soil for the official and unofficial mining of copper, coal and other raw materials, has led to a drastic deterioration in the environmental situation of Mongolia, an increasing risk of water conflicts with its neighbours and a growing occurrence of climatic phenomena such as the ‘dzud’, characterised by cycles of long droughts and harsh winters and resulting in a massive loss of livestock, wildlife and biodiversity in general; invites the Mongolian government to intensify efforts for the diversification of its economy, and calls on the EU to assist this process with dedicated activities and preventive and other measures, for example in the context of closer coordination of the environmental policies of the two sides; calls on the Mongolian authorities and parliament, as well as on all the EU Member States, to cooperate and to contribute to a substantial strengthening of the international climate regime within the scope of the Marrakesh COP22 undertakings;

34.  Welcomes Mongolia’s ratification of and compliance with all the relevant GSP+ conventions on environmental protection and climate change; urges Mongolia, however, to comply with its reporting obligations under the UN Conventions on Environmental Protection and Climate Change (CITES, Basel and Stockholm Conventions) and to enforce the country’s environmental legal framework;

35.  Points out that in 2014 extractive industries in Mongolia accounted for 17 % of GDP and 89 % of the country’s total exports; welcomes in this context the active participation of Mongolia in the Extractive Industries Transparency Initiative (EITI), which aims to make this sector more accountable and transparent;

36.  Underlines that the Oyu Tolgoi copper and gold mine is the single largest mining project, which from 2020 is set to account for a third of Mongolia’s GDP, and that Tavan Tolgoi is the world’s largest undeveloped coal mine; welcomes the public debates held on the environmental impact of mining and the public participation in resources management at local levels;

37.  Encourages Mongolia to develop, for the benefit of its own citizens, the exploitation of its natural resources, in particular of rare minerals, as they have an ever-increasing value in the digital industry; points to the supporting role the EU could play in granting technological and financial aid towards such independent mineral extraction;

38.  Is of the opinion that investing in future technologies and digitalisation could help bridge the development gap between different regions in Mongolia and diversify the economy; encourages the EU and the Member States to intensify cooperation in the area of digitalisation and new technologies;

39.  Acknowledges the significant challenges of combating drug trafficking; recommends that the EU assist with strengthening public institutions and resources to address these issues;

Trade and economic relations

40.  Notes that the EU has become Mongolia’s third-biggest trading partner, and that Mongolian goods already enter the EU market virtually tariff-free under the current Generalised Scheme of Preferences;

41.  Welcomes the inclusion of Mongolia in the GSP+ scheme;

42.  Notes that European investment in Mongolia has so far remained limited, owing to the insecure business environment and lack of information;

43.  Encourages the EU and Mongolia to intensify their trade and investment relations, including promotion by means of information and awareness-raising, in accordance with the legal provisions of the PCA; stresses that such an intensification should be in line with, and fully respect, the obligations resulting from the international conventions on labour standards, good governance, human rights and environmental standards;

44.  Urges, in this context, a further development of the activities of the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) in Mongolia;

45.  Emphasises the importance of a stable business and legal environment for an increase in investment from the EU;

46.  Takes note of the decline in foreign direct investment (FDI) related to the mining sector that dominates the economy, which remains a key divisive factor;

47.  Urges Mongolia, with the help of foreign investment and a more transparent legal environment, to diversify its economy in order to help avoid vulnerability to volatile mineral markets; welcomes, in this context, the new legislation on FDI;

48.  Encourages further integration of Mongolia into the global and regional economy, within frameworks such as the Prairie Road, the Silk Road/‘One Belt One Road’ or the Trans-Eurasian Belt, in accordance with the strategic interests and priorities of the country; asks the EU to consider participation in infrastructural and investment programmes, including in the mining sector, in the region;

Regional and global challenges and cooperation

49.  Recognises the pivotal role Mongolia can play between the dynamic economies of China, Russia, South Korea and Japan and the Central Asian countries, and at the same time as an intermediary between Europe and the East Asian region;

50.  Highlights Mongolia’s ‘third neighbour’ foreign policy concept, which includes relations with the EU, balanced against constructive and intense relations with its influential strategic partners and direct neighbours Russia and China;

51.  Takes note of Mongolia’s friendly, and also economically competitive, relations with the other countries in the region;

52.  Notes that Mongolia is seriously evaluating the impact of potential membership of the Eurasian Economic Union (EAEU); is concerned that such a move might hinder further political and trade relations with the EU;

53.  Congratulates Mongolia on its successful role in chairing the 2016 ASEM and ASEP meetings in Ulaanbaatar, on the solidification of the parliamentary dimension, and on strengthening the partnership between the two regions based on universally acknowledged principles of equality, mutual respect and the promotion and protection of human rights and fundamental freedoms; welcomes Mongolia’s proposal to set up an ASEM Center, including a virtual/online facility;

54.  Welcomes the fact that Mongolia has declared itself a nuclear-weapons-free zone, as officially recognised by the UN; welcomes, in particular, the constructive and active role it plays in multilateral fora in promoting cooperation towards global nuclear disarmament, as well as its signing up to the Humanitarian Pledge(10);

55.  Welcomes the mutual commitment to promoting international peace and security, and, in this context, welcomes Mongolia’s active role in international multilateral mechanisms such as the UN and the OSCE, and its contribution to initiatives in support of peace and stability in Northeast Asia and beyond, such as the Ulaanbaatar Dialogue on Northeast Asian Security (UBD);

56.  Notes Mongolia’s contribution to UN peacekeeping around the world, and its provision of training facilities for such missions, together with increasingly seeking in parallel a strengthening of the political and diplomatic opportunities and responsibility of the UN to prevent and solve conflicts;

57.  Welcomes Mongolia’s close alignment with the EU in its negotiating and voting positions in the United Nations and other multilateral fora; in this context, underlines the importance of Article 8 of the PCA on international cooperation;

58.  Recognises Mongolia’s role in promoting respect for human rights as a new member of UNHRC in 2016-2018, and calls for close EU cooperation with Mongolia in the preparation and implementation of UNHRC’s work;

59.  Welcomes Mongolia’s ratification of the Rome Statute of the International Criminal Court (ICC) and encourages Mongolia to ratify the Kampala Amendments, which provided in a timely fashion a definition and a procedure for jurisdiction of the Court over the crime of aggression;

60.  Commends Mongolia’s efforts to promote democracy, the rule of law and human rights in countries close to Mongolia’s neighbourhood aspiring to democratic change; calls on the EU also to involve Mongolia and to seek synergies on an ad hoc basis in regional programmes within Central Asia focusing on such developments;

61.  Praises Mongolia’s role in bringing together academics from both Koreas, China and Russia, as well as for hosting reunions of families split by the division of the Korean peninsula;

62.  Supports Mongolia’s declared aspiration to become a UN Security Council member in 2022;

o
o   o

63.  Instructs its President to forward this resolution to the Council, the Commission, the VP/HR, the governments and parliaments of the Member States, and the Government and State Great Khural (Parliament) of Mongolia.

(1) OJ C 280 E, 18.11.2006, p. 49.
(2) Texts adopted, P8_TA(2016)0121.
(3) Texts adopted, P8_TA(2015)0458.
(4) OJ C 36, 29.1.2016, p. 126.
(5) OJ C 407, 4.11.2016, p. 35.
(6) OJ C 249 E, 30.8.2013, p. 41.
(7) OJ C 440, 30.12.2015, p. 97.
(8) Texts adopted, P8_TA(2016)0424.
(9) Texts adopted, P8_TA(2017)0032.
(10) http://www.icanw.org/pledge/


Agreement on Trade in Civil Aircraft (Product Coverage Annex) ***
PDF 236kWORD 41k
European Parliament legislative resolution of 15 February 2017 on the draft Council decision on the conclusion, on behalf of the European Union, of the Protocol (2015) amending the Annex to the Agreement on Trade in Civil Aircraft (11018/2016 – C8-0391/2016 – 2016/0202(NLE))
P8_TA(2017)0034A8-0007/2017

(Consent)

The European Parliament,

–  having regard to the draft Council decision (11018/2016),

–  having regard to the Protocol (2015) amending the Annex to the Agreement on Trade in Civil Aircraft (11019/2016),

–  having regard to the request for consent submitted by the Council in accordance with Article 207(4) and Article 218(6), second subparagraph, point (a) of the Treaty on the Functioning of the European Union (C8‑0391/2016),

–  having regard to Rule 99(1) and (4) and Rule 108(7) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on International Trade (A8-0007/2017),

1.  Gives its consent to conclusion of the Protocol;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States.


Cost-effective emission reductions and low-carbon investments ***I
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Amendments adopted by the European Parliament on 15 February 2017 on the proposal for a directive of the European Parliament and of the Council amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments (COM(2015)0337 – C8-0190/2015 – 2015/0148(COD))(1)
P8_TA(2017)0035A8-0003/2017

(Ordinary legislative procedure: first reading)

Text proposed by the Commission   Amendment
Amendment 1
Proposal for a directive
Recital 1
(1)  Directive 2003/87/EC of the European Parliament and of the Council15 established a system for greenhouse gas emission allowance trading within the Union in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.
(1)  Directive 2003/87/EC of the European Parliament and of the Council15 established a system for greenhouse gas emission allowance trading within the Union in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner as well as the sustainable strengthening of Union industry against the risk of carbon and investment leakage.
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15 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
15 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).
Amendment 2
Proposal for a directive
Recital 2
(2)  The European Council of October 2014 made a commitment to reduce the overall greenhouse gas emissions of the Union by at least 40% below 1990 levels by 2030. All sectors of the economy should contribute to achieving these emission reductions and the target will be delivered in the most cost-effective manner through the Union emission trading system (EU ETS) delivering a reduction of 43% below 2005 levels by 2030. This was confirmed in the intended nationally determined reduction commitment of the Union and its Member States submitted to the Secretariat of the UN Framework Convention on Climate Change on 6 March 201516 .
(2)  The European Council of October 2014 made a commitment to reduce the overall greenhouse gas emissions of the Union by at least 40% below 1990 levels by 2030. All sectors of the economy should contribute to achieving those emission reductions and the target is to be delivered in the most cost-effective manner through the Union emission trading system (EU ETS) delivering a reduction of 43% below 2005 levels by 2030. This was confirmed in the intended nationally determined reduction commitment of the Union and its Member States submitted to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) on 6 March 2015. The effort of emission reductions should be fairly shared between the sectors covered by the EU ETS.
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16 http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx
Amendment 3
Proposal for a directive
Recital 2 a (new)
(2a)  In order to honour the agreed commitment that all sectors of the economy contribute to the fulfilment of the target of reducing the overall greenhouse gas emissions of the Union by at least 40% below 1990 levels by 2030, it is important that the EU ETS, despite being the Union's primary tool to achieve its long-term climate and energy targets, is complemented by equivalent additional actions taken in other legal acts and instruments dealing with greenhouse gas emissions from sectors not covered by the EU ETS.
Amendment 4
Proposal for a directive
Recital 2 b (new)
(2b)  Under the Agreement adopted in Paris at the 21st Conference of the Parties of the UNFCCC of 12 December 2015 (the ‘Paris Agreement’), countries are required to put policies in place to achieve more than 180 Intended Nationally Determined Contributions (INDCs) that cover some 98% of global greenhouse gas emissions. The Paris Agreement is aimed at limiting the increase in the global average temperature to well below 2° C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1,5° C above pre-industrial levels. Many of those policies are expected to involve carbon pricing or similar measures, and therefore a revision clause should be laid down in this Directive to allow the Commission, where appropriate, to propose stricter emissions reductions after the first stocktaking exercise under the Paris Agreement in 2023, an adjustment to the provisions for transitional carbon leakage to reflect the development of carbon pricing mechanisms outside the Union, and additional policy measures and tools to enhance the greenhouse gas reduction commitments of the Union and its Member States. The revision clause should also ensure that a communication is adopted within six months of the facilitative dialogue under the UNFCCC in 2018 assessing the consistency of the Union’s climate change legislation with the Paris Agreement goals.
Amendment 5
Proposal for a directive
Recital 2 c (new)
(2c)  In accordance with the Paris Agreement and in line with the commitment of the co-legislators expressed in Directive 2009/29/EC of the European Parliament and of the Council1a and Decision No 406/2009/EC of the European Parliament and of the Council1b, all sectors of the economy are required to contribute to the reduction of carbon dioxide (CO2) emissions. To this end, efforts to limit international maritime emissions through the International Maritime Organisation (IMO) are under way and should be encouraged, with the aim of establishing a clear IMO action plan for climate policy measures to reduce CO2 emissions from shipping at a global level. The adoption of clear targets to reduce international maritime emissions through the IMO has become a matter of great urgency and a prerequisite for the Union to refrain from acting further on the inclusion of the maritime sector within the EU ETS. If, however, any such agreement is not reached by the end of 2021, the sector should be included under the EU ETS and a fund should be established for ship operators' contributions and collective compliance relating to CO2 emissions already covered by the Union system for monitoring, reporting and verification (MRV system) laid down in Regulation (EU) 2015/757 of the European Parliament and of the Council1c (emissions released in Union ports and during voyages to and from such ports). A share of revenues from the auction of allowances to the maritime sector should be used to improve energy efficiency and support investments in innovative technologies for the reduction of CO2 emissions in the maritime sector, including short sea shipping and ports.
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1a Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (OJ L 140, 5.6.2009, p. 63).
1b Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community's greenhouse gas emission reduction commitments up to 2020 (OJ L 140, 5.6.2009, p. 136).
1c Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and amending Directive 2009/16/EC (OJ L 123, 19.5.2015, p. 55).
Amendment 143
Proposal for a directive
Recital 3
(3)  The European Council confirmed that a well-functioning, reformed EU ETS with an instrument to stabilise the market will be the main European instrument to achieve this target, with an annual reduction factor of 2.2% from 2021 onwards, free allocation not expiring but existing measures continuing after 2020 to prevent the risk of carbon leakage due to climate policy, as long as no comparable efforts are undertaken in other major economies, without reducing the share of allowances to be auctioned. The auction share should be expressed as a percentage figure in the legislation, to enhance planning certainty as regards investment decisions, to increase transparency and to render the overall system simpler and more easily understandable.
(3)  A well-functioning, reformed EU ETS with an enhanced instrument to stabilise the market will be the main European instruments to achieve this target, with an annual reduction factor of 2,2% from 2021 onwards, free allocation not expiring but measures continuing after 2020 to prevent the risk of carbon leakage due to climate policy, as long as no comparable efforts are undertaken in other major economies. The auction share should be expressed as a percentage figure in the legislation, which should decline on application of a cross-sectoral correction factor to enhance planning certainty as regards investment decisions, to increase transparency, to render the overall system simpler and more easily understandable, and to protect those sectors most at risk of carbon leakage from a cross-sectoral correction factor. Those provisions should be kept under review in line with the Paris Agreement and adjusted accordingly if necessary to fulfil the Union’s climate obligations pursuant to that agreement.
Amendment 7
Proposal for a directive
Recital 3 a (new)
(3a)  Least Developed Countries (LDCs) are particularly vulnerable to the effects of climate change and are responsible only for very low levels of greenhouse gas emissions. Therefore, particular priority should be given to addressing the needs of LDCs through the use of EU ETS allowances to finance climate action, in particular adaptation to the impacts of climate change through the UNFCCC Green Climate Fund.
Amendment 8
Proposal for a directive
Recital 4
(4)  It is a key Union priority to establish a resilient Energy Union to provide secure, sustainable, competitive and affordable energy to its citizens. Achieving this requires continuation of ambitious climate action with the EU ETS as the cornerstone of Europe’s climate policy, and progress on the other aspects of Energy Union17. Implementing the ambition decided in the 2030 framework contributes to delivering a meaningful carbon price and continuing to stimulate cost-efficient greenhouse gas emission reductions.
(4)  It is a key Union priority to establish a resilient Energy Union to provide secure, sustainable, competitive and affordable energy to its citizens and industries. Achieving this requires continuation of ambitious climate action with the EU ETS as the cornerstone of Union’s climate policy, and progress on the other aspects of Energy Union17. The interaction of the EU ETS with other Union and national climate and energy policies that have an impact on the demand for EU ETS allowances needs to be taken into account. Implementing the ambition decided in the 2030 framework and adequately addressing the progress on other aspects of the Energy Union contributes to delivering a meaningful carbon price and to continuing to stimulate cost-efficient greenhouse gas emission reductions.
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17 COM(2015)0080, establishing a Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy
17 COM(2015)0080, establishing a Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy
Amendment 9
Proposal for a directive
Recital 4 a (new)
(4a)  Increased ambition in energy efficiency compared to the 27% target adopted by the Council should lead to more free allowances for industry at risk of carbon leakage.
Amendment 10
Proposal for a directive
Recital 5
(5)  Article 191(2) of the Treaty on the Functioning of the European Union requires that Union policy is based on the principle that the polluter should pay and, on this basis, Directive 2003/87/EC provides for a transition to full auctioning over time. Avoiding carbon leakage is a justification to postpone full transition, and targeted free allocation of allowances to industry is justified in order to address genuine risks of increases in greenhouse gas emissions in third countries where industry is not subject to comparable carbon constraints as long as comparable climate policy measures are not undertaken by other major economies.
(5)  Article 191(2) of the Treaty on the Functioning of the European Union requires that Union policy is based on the principle that the polluter should pay and, on this basis, Directive 2003/87/EC provides for a transition to full auctioning over time. Avoiding carbon leakage is a justification to temporarily postpone full auctioning, and targeted free allocation of allowances to industry is a justified exception to the principle that the polluter should pay, provided that no over-allocation occurs, in order to address genuine risks of increases in greenhouse gas emissions in third countries where industry is not subject to comparable carbon constraints as long as comparable climate policy measures are not undertaken by other major economies. To that end, allocation of free allowances should be more dynamic in accordance with thresholds provided for in this Directive.
Amendment 11
Proposal for a directive
Recital 6
(6)  The auctioning of allowances remains the general rule, with free allocation as the exception. Consequently, and as confirmed by the European Council, the share of allowances to be auctioned, which was 57% over the period 2013-2020, should not be reduced. The Commission's Impact Assessment18 provides details on the auction share and specifies that this 57% share is made up of allowances auctioned on behalf of Member States, including allowances set aside for new entrants but not allocated, allowances for modernising electricity generation in some Member States and allowances which are to be auctioned at a later point in time because of their placement in the Market Stability Reserve established by Decision (EU) 2015/… of the European Parliament and of the Council19 .
(6)  The auctioning of allowances remains the general rule, with free allocation as the exception. Consequently, the share of allowances to be auctioned, which should be 57% over the period 2021-2030, should be reduced on application of the cross sectoral correction factor to protect those sectors most exposed to the risk of carbon leakage. The Commission's Impact Assessment provides details on the auction share and specifies that this 57% share is made up of allowances auctioned on behalf of Member States, including allowances set aside for new entrants but not allocated, allowances for modernising electricity generation in some Member States and allowances which are to be auctioned at a later point in time because of their placement in the Market Stability Reserve established by Decision (EU) 2015/1814 of the European Parliament and of the Council19. A just Transition Fund should be established to support regions with a high share of workers in carbon-dependent sectors and a GDP per capita well below the Union average.
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18 SEC(2015)XX
19 Decision (EU) 2015/… of the European Parliament and of the Council of concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC (OJ L […], […], p. […]).
19 Decision (EU) 2015/1814 of the European Parliament and of the Council of 6 October 2015 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC (OJ L 264, 9.10.2015, p. 1).
Amendment 12
Proposal for a directive
Recital 7
(7)  To preserve the environmental benefit of emission reductions in the Union while actions by other countries do not provide comparable incentives to industry to reduce emissions, free allocation should continue to installations in sectors and sub-sectors at genuine risk of carbon leakage. Experience gathered during the operation of the EU ETS confirmed that sectors and sub-sectors are at risk of carbon leakage to varying degrees, and that free allocation has prevented carbon leakage. While some sectors and sub-sectors can be deemed at a higher risk of carbon leakage, others are able to pass on a considerable share of the costs of allowances to cover their emissions in product prices without losing market share and only bear the remaining part of the costs so that they are at a low risk of carbon leakage. The Commission should determine and differentiate the relevant sectors based on their trade intensity and their emissions intensity to better identify sectors at a genuine risk of carbon leakage. Where, based on these criteria, a threshold determined by taking into account the respective possibility for sectors and sub-sectors concerned to pass on costs in product prices is exceeded, the sector or sub-sector should be deemed at risk of carbon leakage. Others should be considered at a low risk or at no risk of carbon leakage. Taking into account the possibilities for sectors and sub-sectors outside of electricity generation to pass on costs in product prices should also reduce windfall profits.
(7)  To preserve the environmental benefit of emission reductions in the Union while actions by other countries do not provide comparable incentives to industry to reduce emissions, free allocation should temporarily continue to installations in sectors and sub-sectors at genuine risk of carbon leakage. Experience gathered during the operation of the EU ETS confirmed that sectors and sub-sectors are at risk of carbon leakage to varying degrees, and that free allocation has prevented carbon leakage. While some sectors and sub-sectors can be deemed at a higher risk of carbon leakage, others are able to pass on a considerable share of the costs of allowances to cover their emissions in product prices without losing market share and only bear the remaining part of the costs so that they are at a low risk of carbon leakage. The Commission should determine and differentiate the relevant sectors based on their trade intensity and their emissions intensity to better identify sectors at a genuine risk of carbon leakage. Where, based on these criteria, a threshold determined by taking into account the respective possibility for sectors and sub-sectors concerned to pass on costs in product prices is exceeded, the sector or sub-sector should be deemed at risk of carbon leakage. Others should be considered at a low risk or at no risk of carbon leakage. Taking into account the possibilities for sectors and sub-sectors outside of electricity generation to pass on costs in product prices should also reduce windfall profits. The risk of carbon leakage in sectors and subsectors for which free allocation is calculated on the basis of the benchmark values for aromatics, hydrogen and syngas should also be assessed considering that these products are produced both in chemical plants and refineries.
Amendment 13
Proposal for a directive
Recital 8
(8)  In order to reflect technological progress in the sectors concerned and adjust them to the relevant period of allocation, provision should be made for the values of the benchmarks for free allocations to installations, determined on the basis of data from the years 2007-8, to be updated in line with observed average improvement. For reasons of predictability, this should be done through applying a factor that represents the best assessment of progress across sectors, which should then take into account robust, objective and verified data from installations so that sectors whose rate of improvement differs considerably from this factor have a benchmark value closer to their actual rate of improvement. Where the data shows a difference from factor reduction of more than 0,5% of the 2007-8 value higher or lower per year over the relevant period, the related benchmark value shall be adjusted by that percentage. To ensure a level playing field for the production of aromatics, hydrogen and syngas in refineries and chemical plants, the benchmark values for aromatics, hydrogen and syngas should continue to be aligned to the refineries benchmarks.
(8)  In order to reflect technological progress in the sectors concerned and adjust them to the relevant period of allocation, provisions should be made for the values of the benchmarks for free allocations to installations, determined on the basis of data from the years 2007 and 2008, to be updated in line with observed average improvement. For reasons of predictability, this should be done through applying a factor that represents the actual assessment of progress by the 10% most efficient installations in sectors, which should then take into account robust, objective and verified data from installations so that sectors whose rate of improvement differs considerably from this factor have a benchmark value closer to their actual rate of improvement. Where the data shows a difference from factor reduction of more than 1,75% of the value corresponding to the years of 2007 and 2008 (either higher or lower) per year over the relevant period, the related benchmark value should be adjusted by that percentage. Where, however, the data shows an improvement rate of either 0,25 or less over the relevant period, the related benchmark value should be adjusted by that percentage. To ensure a level playing field for the production of aromatics, hydrogen and syngas in refineries and chemical plants, the benchmark values for aromatics, hydrogen and syngas should continue to be aligned to the refineries benchmarks.
Amendment 14
Proposal for a directive
Recital 9
(9)  Member States should partially compensate, in accordance with state aid rules, certain installations in sectors or sub-sectors which have been determined to be exposed to a significant risk of carbon leakage because of costs related to greenhouse gas emissions passed on in electricity prices. The Protocol and accompanying decisions adopted by the Conference of the Parties in Paris need to provide for the dynamic mobilisation of climate finance, technology transfer and capacity building for eligible Parties, particularly those with least capabilities. Public sector climate finance will continue to play an important role in mobilising resources after 2020. Therefore, auction revenues should also be used for climate financing actions in vulnerable third countries, including adaptation to the impacts of climate. The amount of climate finance to be mobilised will also depend on the ambition and quality of the proposed Intended Nationally Determined Contributions (INDCs), subsequent investment plans and national adaptation planning processes. Member States should also use auction revenues to promote skill formation and reallocation of labour affected by the transition of jobs in a decarbonising economy.
(9)  In pursuing the goal of a level playing field, Member States should partially compensate, through a centralised system at Union level, certain installations in sectors or sub-sectors which have been determined to be exposed to a significant risk of carbon leakage because of costs related to greenhouse gas emissions passed on in electricity prices. Public sector climate finance will continue to play an important role in mobilising resources after 2020. Therefore, auction revenues should also be used for climate financing actions in vulnerable third countries, including adaptation to the impacts of climate change. The amount of climate finance to be mobilised will also depend on the ambition and quality of the proposed INDCs, subsequent investment plans and national adaptation planning processes. Member States should also address the social aspects of decarbonising their economies and use auction revenues to promote skill formation and reallocation of labour affected by the transition of jobs in a decarbonising economy. It should be possible for Member States to add to the compensation received through the centralised system at Union level. Such financial measures should not exceed the levels referred to in the relevant state aid guidelines.
Amendment 15
Proposal for a directive
Recital 10
(10)  The main long-term incentive from this Directive for the capture and storage of CO2 (CCS), new renewable energy technologies and breakthrough innovation in low-carbon technologies and processes is the carbon price signal it creates and that allowances will not need to be surrendered for CO2 emissions which are permanently stored or avoided. In addition, to supplement the resources already being used to accelerate demonstration of commercial CCS facilities and innovative renewable energy technologies, EU ETS allowances should be used to provide guaranteed rewards for deployment of CCS facilities, new renewable energy technologies and industrial innovation in low-carbon technologies and processes in the Union for CO2 stored or avoided on a sufficient scale, provided an agreement on knowledge sharing is in place. The majority of this support should be dependent on verified avoidance of greenhouse gas emissions, while some support may be given when pre-determined milestones are reached taking into account the technology deployed. The maximum percentage of project costs to be supported may vary by category of project.
(10)  The main long-term incentive from this Directive for carbon capture and storage (CCS) and carbon capture and use (CCU), new renewable energy technologies and breakthrough innovation in low-carbon technologies and processes is the carbon price signal it creates and that allowances will not need to be surrendered for CO2 emissions which are permanently stored or avoided. In addition, to supplement the resources already being used to accelerate demonstration of commercial CCS and CCU facilities and innovative renewable energy technologies, EU ETS allowances should be used to provide guaranteed rewards for deployment of CCS and CCU facilities, new renewable energy technologies and industrial innovation in low-carbon technologies and processes in the Union for CO2 stored or avoided on a sufficient scale, provided an agreement on knowledge sharing is in place. The majority of this support should be dependent on verified avoidance of greenhouse gas emissions, while some support may be given when pre-determined milestones are reached taking into account the technology deployed. The maximum percentage of project costs to be supported may vary by category of project.
Amendment 16
Proposal for a directive
Recital 11
(11)  A Modernisation Fund should be established from 2% of the total EU ETS allowances, and auctioned in accordance with the rules and modalities for auctions taking place on the Common Auction Platform set out in Regulation 1031/2010. Member States who in 2013 had a GDP per capita at market exchange rates of below 60% below the Union average should be eligible for funding from the Modernisation Fund and derogate up to 2030 from the principle of full auctioning for electricity generation by using the option of free allocation in order to transparently promote real investments modernising their energy sector while avoiding distortions of the internal energy market. The rules for governing the Modernisation Fund should provide a coherent, comprehensive and transparent framework to ensure the most efficient implementation possible, taking into account the need for easy access by all participants. The function of the governance structure should be commensurate with the purpose of ensuring the appropriate use of the funds. That governance structure should be composed of an investment board and a management committee and due account should be taken of the expertise of the EIB in the decision-making process unless support is provided to small projects through loans from a national promotional banks or through grants via a national programme sharing the objectives of the Modernisation Fund. Investments financed from the fund should be proposed by the Member States. To ensure that the investment needs in low income Member States are adequately addressed, the distribution of funds will take into account in equal shares verified emissions and GDP criteria. The financial assistance from the Modernisation Fund could be provided through different forms.
(11)  A Modernisation Fund should be established from 2% of the total EU ETS allowances, and auctioned in accordance with the rules and modalities for auctions taking place on the Common Auction Platform set out in Regulation (EU) No 1031/2010. Member States which in 2013 had a GDP per capita at market exchange rates below 60% of the Union average should be eligible for funding from the Modernisation Fund. Member States which in 2014 had a GDP per capita in EUR at market prices below 60% of the Union average should be able, up to 2030, to derogate from the principle of full auctioning for electricity generation by using the option of free allocation in order to transparently promote real investments modernising and diversifying their energy sector, in line with the Union 2030 and 2050 climate and energy goals, while avoiding distortions of the internal energy market. The rules for governing the Modernisation Fund should provide a coherent, comprehensive and transparent framework to ensure the most efficient implementation possible, taking into account the need for easy access by all participants. Such rules should be transparent, balanced and commensurate with the purpose of ensuring the appropriate use of the funds. That governance structure should be composed of an investment board, an advisory board and a management committee. Due account should be taken of the expertise of the EIB in the decision-making process unless support is provided to small projects through loans from national promotional banks or through grants via a national programme sharing the objectives of the Modernisation Fund. Investments financed from the fund should be proposed by the Member States and all financing from the fund should comply with specific eligibility criteria. To ensure that the investment needs in low income Member States are adequately addressed, the distribution of funds will take into account in equal shares verified emissions and GDP criteria. The financial assistance from the Modernisation Fund could be provided through different forms.
Amendment 17
Proposal for a directive
Recital 12
(12)  The European Council confirmed that the modalities, including transparency, of the optional free allocation to modernise the energy sector in certain Member States should be improved. Investments with a value of 10 million or more should be selected by the Member State concerned through a competitive bidding process on the basis of clear and transparent rules to ensure that free allocation is used to promote real investments modernising the energy sector in line with the Energy Union objectives. Investments with a value of less than 10 million should also be eligible for funding from the free allocation. The Member State concerned should select such investments based on clear and transparent criteria. The results of this selection process should be subject to public consultation. The public should be duly kept informed at the stage of the selection of investment projects as well as of their implementation.
(12)  The European Council confirmed that the modalities, including transparency, of the optional free allocation to modernise and diversify the energy sector in certain Member States should be improved. Investments with a value of EUR 10 million or more should be selected by the Member State concerned through a competitive bidding process on the basis of clear and transparent rules to ensure that free allocation is used to promote real investments modernising or diversifying the energy sector in line with the Energy Union objectives, including that of promoting the Third Energy Package. Investments with a value of less than EUR 10 million should also be eligible for funding from the free allocation. The Member State concerned should select such investments based on clear and transparent criteria. The selection process should be subject to public consultation and the results of such selection process, including rejected projects, should be made publically available. The public should be duly kept informed at the stage of the selection of investment projects as well as of their implementation. Member States should have the possibility of transferring part of or all the corresponding allowances to the Modernisation Fund if they are eligible to use both instruments. The derogation should be terminated by the end of the trading period in 2030.
Amendment 18
Proposal for a directive
Recital 13
(13)  EU ETS funding should be coherent with other Union funding programmes, including European Structural and Investment Funds, so as to ensure the effectiveness of public spending.
(13)  EU ETS funding should be coherent with other Union funding programmes, including Horizon 2020, the European Fund for Strategic Investments, European Structural and Investment Funds, and the European Investment Bank (EIB) Climate Investment Strategy, so as to ensure the effectiveness of public spending.
Amendment 19
Proposal for a directive
Recital 14
(14)  The existing provisions which are in place for small installations to be excluded from the EU ETS allow the installations which are excluded to remain so, and it should be made possible for Member States to update their list of excluded installations and for Member States currently not making use of this option to do so at the beginning of each trading period.
(14)  The existing provisions which are in place for small installations to be excluded from the EU ETS should be extended to cover installations operated by small to medium enterprises (SMEs) emitting less than 50 000 tonnes of CO2 equivalent in each of the three years preceding the year of the application for exclusion. It should be made possible for Member States to update their list of excluded installations and for Member States currently not making use of this option to do so at the beginning of each trading period and halfway through the period. It should also be possible for installations emitting less than 5 000 tonnes of CO2 equivalent in each of the three years preceding the beginning of each trading period to be excluded from the EU ETS, subject to revision every five years. Member States should ensure that alternative equivalent measures for installations that have opted out do not result in higher compliance costs. Monitoring, reporting and verification requirements should be simplified for small emitters covered by the EU ETS.
Amendment 20
Proposal for a directive
Recital 16 a (new)
(16a)  In order to considerably reduce the administrative burden faced by companies, it should be left open to the Commission to consider measures such as automating the submission and verification of emissions reports, fully exploiting the potential of information and communication technologies.
Amendment 21
Proposal for a directive
Recital 17 a (new)
(17a)   The delegated acts referred to in Articles 14 and 15 should simplify the rules of monitoring, reporting and verification as far as possible in order to reduce red tape for operators. The delegated act referred to in Article 19(3) should facilitate access to and the use of the registry, especially for small operators.
Amendment 22
Proposal for a directive
Article 1 – point -1 (new)
(-1)  Throughout the Directive, the term 'Community scheme' is replaced by 'EU ETS' and any necessary grammatical changes are made.
Amendment 23
Proposal for a directive
Article 1 – point -1 a (new)
(-1a)  Throughout the Directive, the term 'Community-wide' is replaced by 'Union-wide'.
Amendment 24
Proposal for a directive
Article 1 – point -1 b (new)
(-1b)  Throughout the Directive, except in the cases referred to in points (-1) and (-1a) and in Article 26(2), the term 'Community' is replaced by 'Union' and any necessary grammatical changes are made.
Amendment 25
Proposal for a directive
Article 1 – point -1 c (new)
(-1c)  Throughout the Directive, the words 'regulatory procedure referred to in Article 23(2)' are replaced by the words 'examination procedure referred to in Article 30c(2)'.
Amendment 26
Proposal for a directive
Article 1 – point -1 d (new)
(-1d)  In Article 3g, in point (d) of Article 5(1), in point (c) of Article 6(2), in the second subparagraph of Article 10a(2), in Article 14(2), (3) and (4), in Article 19(1) and (4) and in Article 29a(4) the word 'regulation' is replaced by the word 'act' and any necessary grammatical changes are made.
Amendment 28
Proposal for a directive
Article 1 – point -1 f (new)
Directive 2003/87/EC
Article 3 – point h
(-1f)  In Article 3, point (h) is replaced by the following:
'(h) ‘new entrant' means:
'(h) ‘new entrant’ means:
—  any installation carrying out one or more of the activities indicated in Annex I, which has obtained a greenhouse gas emissions permit for the first time after 30 June 2011,
—  any installation carrying out one or more of the activities indicated in Annex I, which has obtained a greenhouse gas emissions permit for the first time after 30 June 2018,
—  any installation carrying out an activity which is included in the Community scheme pursuant to Article 24(1) or (2) for the first time, or
—  any installation carrying out an activity which is included in the Union scheme pursuant to Article 24(1) or (2) for the first time, or
—  any installation carrying out one or more of the activities indicated in Annex I or an activity which is included in the Community scheme pursuant to Article 24(1) or (2), which has had a significant extension after 30 June 2011, only in so far as this extension is concerned;'
—  any installation carrying out one or more of the activities indicated in Annex I or an activity which is included in the Union scheme pursuant to Article 24(1) or (2), which has had a significant extension after 30 June 2018, only in so far as this extension is concerned;'
Amendment 29
Proposal for a directive
Article 1 – point -1 g (new)
Directive 2003/87/EC
Article 3 – point u a (new)
(-1g)  In Article 3, the following point is added:
'(ua) ‘small emitter’ means an installation with low emissions which is operated by a small or medium-sized enterprise1a and that meets at least one of the following criteria:
–  the average annual verified emissions of that installation reported to the relevant competent authority during the trading period immediately preceding the current trading period, with the exclusion of CO2 stemming from biomass and before any subtraction of transferred CO2, is less than 50 000 tonnes of carbon dioxide equivalent per year;
–  the average annual emissions data referred to in the first indent are not available in relation to that installation or are no longer applicable to that installation because of changes in the installation's boundaries or changes to the operating conditions of the installation, but the annual emissions of that installation for the following five years, with the exclusion of CO2 stemming from biomass and before subtraction of transferred CO2, are expected to be less than 50 000 tonnes of carbon dioxide equivalent per year.'
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1a As defined in Annex of recommendation 2003/361/EC
Amendment 30
Proposal for a directive
Article 1 – point -1 h (new)
Directive 2003/87/EC
Article 3c – paragraph 2
(-1h)  In Article 3c, paragraph 2 is replaced by the following:
'2. For the period referred to in Article 13(1) beginning on 1 January 2013, and, in the absence of any amendments following the review referred to in Article 30(4), for each subsequent period, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 95 % of the historical aviation emissions multiplied by the number of years in the period.
'2. For the period referred to in Article 13 beginning on 1 January 2013, and, in the absence of any amendments following the review referred to in Article 30(4), for each subsequent period, the total quantity of allowances to be allocated to aircraft operators shall be equivalent to 95 % of the historical aviation emissions multiplied by the number of years in the period.
The total quantity of allowances to be allocated to aircraft operators in 2021 shall be 10% lower than the average allocation for the period from 1 January 2014 to 31 December 2016, and then decrease annually at the same rate as that of the total cap for the EU ETS referred to in the second subparagraph of Article 10(1) so as to bring the cap for the aviation sector more in line with the other EU ETS sectors by 2030.
For aviation activities to and from aerodromes located in countries outside the EEA, the quantity of allowances to be allocated from 2021 onwards may be adjusted taking into account the future global market-based mechanism agreed by the International Civil Aviation Organisation (ICAO) in its 39th assembly. By 2019, the Commission shall present a legislative proposal to the European Parliament and the Council concerning those activities following the 40th assembly of the ICAO.
This percentage may be reviewed as part of the general review of this Directive.'
This percentage may be reviewed as part of the general review of this Directive.'
Amendment 31
Proposal for a directive
Article 1 – point -1 i (new)
Directive 2003/87/EC
Article 3c – paragraph 4
(-1i)  In Article 3c(4), the last sentence is replaced by the following:
That decision shall be considered within the Committee referred to in Article 23(1).
That decision shall be considered within the Committee referred to in Article 30c(1).
Amendment 32
Proposal for a directive
Article 1 – point -1 j (new)
Directive 2003/87/EC
Article 3d – paragraph 2
(-1j)  In Article 3d, paragraph 2 is replaced by the following:
'2. From 1 January 2013, 15 % of allowances shall be auctioned. This percentage may be increased as part of the general review of this Directive.'
'2. From 1 January 2021, 50 % of allowances shall be auctioned.'
Amendment 33
Proposal for a directive
Article 1 – point 1
Directive 2003/87/EC
Article 3d – paragraph 3
(1)  In Article 3d(3), the second subparagraph is replaced by the following:
(1)  In Article 3d, paragraph 3 is replaced by the following:
'The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'3. The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for the auctioning by Member States of allowances not required to be issued free of charge in accordance with paragraphs 1 and 2 of this Article or Article 3f(8). The number of allowances to be auctioned in each period by each Member State shall be proportionate to its share of the total attributed aviation emissions for all Member States for the reference year reported pursuant to Article 14(3) and verified pursuant to Article 15. For the period referred to in Article 3c(1), the reference year shall be 2010 and for each subsequent period referred to in Article 3c the reference year shall be the calendar year ending 24 months before the start of the period to which the auction relates.'
Amendment 34
Proposal for a directive
Article 1 – point 1 a (new)
Directive 2003/87/EC
Article 3d – paragraph 4 – subparagraph 1
(1a)  In Article 3d(4), the first subparagraph is replaced by the following:
'4. It shall be for Member States to determine the use to be made of revenues generated from the auctioning of allowances. Those revenues should be used to tackle climate change in the Union and third countries, inter alia, to reduce greenhouse gas emissions, to adapt to the impacts of climate change in the Union and third countries, especially developing countries, to fund research and development for mitigation and adaptation, including in particular in the fields of aeronautics and air transport, to reduce emissions through low-emission transport and to cover the cost of administering the Community scheme. The proceeds of auctioning should also be used to fund contributions to the Global Energy Efficiency and Renewable Energy Fund, and measures to avoid deforestation. '
'4. All revenues shall be used to tackle climate change in the Union and third countries, inter alia, to reduce greenhouse gas emissions, to adapt to the impacts of climate change in the Union and third countries, especially developing countries, to fund research and development for mitigation and adaptation, including in particular in the fields of aeronautics and air transport, to reduce emissions through low-emission transport and to cover the cost of administering the Union scheme. The proceeds of auctioning may also be used to fund contributions to the Global Energy Efficiency and Renewable Energy Fund, and measures to avoid deforestation. '
Amendment 35
Proposal for a directive
Article 1 – point 1 b (new)
Directive 2003/87/EC
Article 3e – paragraph 1 a (new)
(1b)  In Article 3e, the following paragraph is added:
'1a. From 2021 onwards, no free allocation of allowances under this Directive shall be granted to the aviation sector unless it is confirmed by a subsequent decision adopted by the European Parliament and the Council, since ICAO Resolution A-39/3 envisages that a global market-based measure is to apply from 2021. In that respect, the co-legislators shall take into account the interaction between that market-based measure and the EU ETS.'
Amendment 36
Proposal for a directive
Article 1 – point 2 a (new)
Directive 2003/87/EC
Chapter II a (new)
(2a)  The following Chapter is inserted:
'CHAPTER IIa
Inclusion of shipping in the absence of progress at international level
Article 3ga
Introduction
As from 2021, in the absence of a comparable system operating under the IMO, CO2 emissions emitted in Union ports and during voyages to and from Union ports of call, shall be accounted for through the system set out in this Chapter, to be operational from 2023.
Article 3gb
Scope
By 1 January 2023, the provisions of this Chapter shall apply to the allocation and issue of allowances in respect of CO2 emissions from ships within, arriving at or departing from ports under the jurisdiction of a Member State in accordance with the provisions laid down in Regulation (EU) 2015/757. Articles 12 and 16 shall apply to maritime activities in the same manner as to other activities.
Article 3gc
Extra allowances for maritime sector
By 1 August 2021, the Commission shall adopt delegated acts in accordance with Article 30b in order to supplement this Directive by setting the total quantity of allowances for the maritime sector in line with other sectors, the method of allocation of allowances for that sector through auctioning and the special provisions with regard to the administering Member State. When the maritime sector is included in the EU ETS, the total amount of allowances shall be increased by that amount.
20% of the revenues generated from the auctioning of allowances referred to in Article 3gd shall be used through the fund established under that Article ('Maritime Climate Fund') to improve energy efficiency and support investments in innovative technologies to reduce CO2 emissions in the maritime sector, including short sea shipping and ports.
Article 3gd
Maritime Climate Fund
1.  A fund aimed at compensating for maritime emissions, improving energy efficiency and facilitating investments in innovative technologies to reduce CO2 emissions of the maritime sector shall be established at Union level.
2.  Ship operators may pay, on a voluntary basis, an annual membership contribution to the fund in accordance with their total emissions reported for the preceding calendar year under Regulation (EU) 2015/757. By way of derogation from Article 12(3), the fund shall surrender allowances collectively on behalf of ship operators which are members of the fund. The contribution per tonne of emissions shall be set by the fund by 28 February each year, and shall not be less than the level of the market price for allowances in the preceding year.
3.  The fund shall acquire allowances equal to the collective total quantity of emissions of its members during the preceding calendar year and surrender them in the registry established under Article 19 by 30 April each year for subsequent cancellation. Contributions shall be made public.
4.  The fund shall also improve energy efficiency and facilitate investments in innovative technologies to reduce CO2 emissions in the maritime sector, including short sea shipping and ports, through the revenues referred to in Article 3gc. All investments supported by the fund shall be made public and be consistent with the aims of this Directive.
5.  The Commission is empowered to adopt a delegated act in accordance with Article 30b to supplement this Directive concerning the implementation of this Article.
Article 3ge
International cooperation
In the event that an international agreement on global measures to reduce greenhouse gas emissions from maritime transport is reached, the Commission shall review this Directive and shall, if appropriate, propose amendments in order to ensure alignment with that international agreement.'
Amendment 37
Proposal for a directive
Article 1 – point 2 b (new)
Directive 2003/87/EC
Article 5 – subparagraph 1 – point d a (new)
(2b)   In Article 5, subparagraph 1, the following point is added:
'(da) all CCU technologies that will be used in the installation in order to help reduce emissions',
Amendment 38
Proposal for a directive
Article 1 – point 2 c (new)
Directive 2003/87/EC
Article 6 – paragraph 2 – points e a and e b (new)
(2c)  In Article 6(2), the following points are added:
'(ea) all legal requirements on social responsibility and reporting in order to ensure equal and effective implementation of environmental regulations and ensure that competent authorities and stakeholders, including workers' representatives, representatives of civil society and local communities, have access to all relevant information, as laid down in the Aarhus Convention and implemented in Union and national law, including this Directive;
(eb)  an obligation to publish every year comprehensive information in respect of combating climate change and compliance with Union directives in the field of the environment, health and safety at work; that information shall be accessible to workers' representatives and to the representatives of civil society from local communities in the vicinity of the installation.'
Amendment 39
Proposal for a directive
Article 1 – point 2 d (new)
Directive 2003/87/EC
Article 7
(2d)  Article 7 is replaced by the following:
'Article 7
The operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation's operator, the competent authority shall update the permit to include the name and address of the new operator.'
'Article 7
Without undue delay, the operator shall inform the competent authority of any planned changes to the nature or functioning of the installation, or any extension or significant reduction of its capacity, which may require updating the greenhouse gas emissions permit. Where appropriate, the competent authority shall update the permit. Where there is a change in the identity of the installation's operator, the competent authority shall update the permit with the relevant identity and contact information of the new operator.'
Amendment 142
Proposal for a directive
Article 1 – point 3
Directive 2003/87/EC
Article 9 – paragraphs 2 and 3
Starting in 2021, the linear factor shall be 2.2%.
Starting in 2021, the linear factor shall be 2,2% and shall be kept under review with a view to increasing it to 2,4% by 2024 at the earliest.
Amendment 41
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 1
(a)  three new subparagraphs are added to paragraph 1:
(a)  paragraph 1 is replaced by the following:
'1. From 2019 onwards, Member States shall either auction or cancel allowances that are not allocated free of charge in accordance with Articles 10a and 10c and are not placed in the MSR.'
Amendment 42
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 2
From 2021 onwards, the share of allowances to be auctioned by Member States shall be 57%.
From 2021 onwards, the share of allowances to be auctioned or cancelled shall be 57%, and that share shall decrease by no more than five percentage points over the entire ten year period beginning on 1 January 2021 pursuant to Article 10a(5). Such an adjustment shall take place solely in the form of a reduction in allowances auctioned pursuant to point (a) of the first subparagraph of paragraph 2. Where no adjustment occurs, or where less than five percentage points are required to make an adjustment, the remaining quantity of allowances shall be cancelled. Such cancellation shall not exceed 200 million allowances.
Amendment 43
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 3
2% of the total quantity of allowances between 2021 and 2030 shall be auctioned to establish a fund to improve energy efficiency and modernise the energy systems of certain member states as set out in Article 10d of this Directive (“the Modernisation Fund”).
2% of the total quantity of allowances between 2021 and 2030 shall be auctioned in order to establish a fund to improve energy efficiency and modernise the energy systems of certain Member States as set out in Article 10d of this Directive (“the Modernisation Fund”). The quantity set out in this subparagraph shall form part of the 57% share of allowances to be auctioned as set out in the second subparagraph.
Amendment 44
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 3 a (new)
In addition, 3% of the total quantity of allowances to be issued between 2021 and 2030 shall be auctioned in order to compensate sectors or sub-sectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs actually incurred as a result of greenhouse gas emission costs being passed on in electricity prices as set out in Article 10a(6) of this Directive. Two thirds of the quantity set out in this subparagraph shall form part of the 57% share of allowances to be auctioned as referred to in the second subparagraph.
Amendment 45
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 3 b (new)
A Just Transition Fund shall be created as of 1 January 2021 as a complement to the European Regional Development Fund and the European Social Fund and shall be funded through the pooling of 2% of the auctioning revenues.
The revenues of those auctions shall remain at Union level, and shall be used to support regions which combine a high share of workers in carbon-dependent sectors and a GDP per capita well below the Union average. Such measures shall respect the principle of subsidiarity.
Those auctioning revenues aimed at just transition may be put to use in different ways, such as:
—  creating redeployments and/or mobility cells,
—  education/training initiatives to re-skill or upskill workers,
—  support in job-seeking,
—  business creation, and
—  monitoring and pre-emptive measures to avoid or minimise the negative impact of the restructuring process on physical and mental health.
Since the core activities to be financed by a Just Transition Fund are strongly related to the labour market, social partners shall be actively involved in the fund management in a manner based on the model of the European Social Fund committee and the participation of local social partners shall be a key requirement for projects to get funding.
Amendment 46
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 4
The total remaining quantity of allowances to be auctioned by Member States shall be distributed in accordance with paragraph 2
The total remaining quantity of allowances to be auctioned by Member States, after deducting the quantity of allowances referred to in the first subparagraph of Article 10a(8) shall be distributed in accordance with paragraph 2.
Amendment 47
Proposal for a directive
Article 1 – point 4 – point a
Directive 2003/87/EC
Article 10 – paragraph 1 – subparagraph 4 a (new)
On 1 January 2021, 800 million allowances placed in the MSR shall be cancelled.
Amendment 48
Proposal for a directive
Article 1 – point 4 – point b – point ii
Directive 2003/87/EC
Article 10 – paragraph 2 – point b
(b)  10% of the total quantity of allowances to be auctioned being distributed amongst certain Member States for the purpose of solidarity and growth within the Community, thereby increasing the amount of allowances that those Member States auction under point (a) by the percentages specified in Annex IIa.
(b)  10% of the total quantity of allowances to be auctioned being distributed amongst certain Member States for the purpose of solidarity and growth within the Community, thereby increasing the amount of allowances that those Member States auction under point (a) by the percentages specified in Annex IIa. For those Member States eligible to benefit from the Modernisation Fund as set out in Article 10d, their share of allowances specified in Annex IIa shall be transferred to their share in the Modernisation Fund.
Amendment 49
Proposal for a directive
Article 1 – point 4 – point b a (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – introductory part
(ba)  in paragraph 3, the introductory part is replaced by the following:
'3. Member States shall determine the use of revenues generated from the auctioning of allowances. At least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c), or the equivalent in financial value of these revenues, should be used for one or more of the following:'
'3. Member States shall determine the use of revenues generated from the auctioning of allowances. 100% of the total revenues generated from the auctioning of allowances referred to in paragraph 2 or the equivalent in financial value of these revenues, shall be used for one or more of the following:'
Amendment 50
Proposal for a directive
Article 1 – point 4 – point b b (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – point b
(bb)  in paragraph 3, point (b) is replaced by the following:
'(b) to develop renewable energies to meet the commitment of the Community to using 20 % renewable energies by 2020, as well as to develop other technologies contributing to the transition to a safe and sustainable low-carbon economy and to help meet the commitment of the Community to increase energy efficiency by 20 % by 2020;'
'(b) to develop renewable energies to meet the commitment of the Union to renewable energies by 2030, as well as to develop other technologies contributing to the transition to a safe and sustainable low-carbon economy and to help meet the commitment of the Union to increase energy efficiency by 2030 at the levels agreed in appropriate legislative acts;'
Amendment 51
Proposal for a directive
Article 1 – point 4 – point b c (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – point f
(bc)  in paragraph 3, point (f) is replaced by the following:
'(f) to encourage a shift to low-emission and public forms of transport;'
'(f) to encourage a shift to low emission and public forms of transport and support - as long as CO2 costs are not similarly reflected for other surface transport modes - electrified transport modes such as railways or other electrified surface transport modes taking into account their indirect EU ETS costs; '
Amendment 52
Proposal for a directive
Article 1 – point 4 – point b d (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – point h
(bd)   in paragraph 3, point (h) is replaced by the following:
'(h) measures intended to increase energy efficiency and insulation or to provide financial support in order to address social aspects in lower and middle income households; '
'(h) measures intended to increase energy efficiency, district heating systems and insulation or to provide financial support in order to address social aspects in lower and middle income households;'
Amendment 53
Proposal for a directive
Article 1 – point 4 – point c
Directive 2003/87/EC
Article 10 – paragraph 3 – point j
(j)  to fund financial measures in favour of sectors or subsectors that are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, provided that these measures meet the conditions set out in Article 10a(6);
(j)  to fund financial measures in favour of sectors or subsectors that are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, provided that not more than 20% of revenues are used for this purpose, and that these measures meet the conditions set out in Article 10a(6);
Amendment 54
Proposal for a directive
Article 1 – point 4 – point c
Directive 2003/87/EC
Article 10 – paragraph 3 – point l
(l)  to promote skill formation and reallocation of labour affected by the transition of jobs in a decarbonising economy in close coordination with the social partners.
(l)  to address the social impact of the decarbonisation of their economies and promote skill formation and reallocation of labour affected by the transition of jobs in close coordination with the social partners.
Amendment 55
Proposal for a directive
Article 1 – point 4 – point c a (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – subparagraph 1 a (new)
(ca)  in paragraph 3, the following subparagraph is inserted:
'This information shall be provided through a standardised template prepared by the Commission, including information on the use of auctioning revenues for the different categories and the additionality of the use of the funds. The Commission shall make this information public on its website.'
Amendment 56
Proposal for a directive
Article 1 – point 4 – point c b (new)
Directive 2003/87/EC
Article 10 – paragraph 3 – subparagraph 2
(cb)  in paragraph 3, the second subparagraph is replaced by the following:
'Member States shall be deemed to have fulfilled the provisions of this paragraph if they have in place and implement fiscal or financial support policies, including in particular in developing countries, or domestic regulatory policies, which leverage financial support, established for the purposes set out in the first subparagraph and which have a value equivalent to at least 50 % of the revenues generated from the auctioning of allowances referred to in paragraph 2, including all revenues from the auctioning referred to in paragraph 2, points (b) and (c).'
'Member States shall be deemed to have fulfilled the provisions of this paragraph if they have in place and implement fiscal or financial support policies, including in particular in developing countries, or domestic regulatory policies, which leverage additional financial support, established for the purposes set out in the first subparagraph and which have a value equivalent to 100% of the revenues generated from the auctioning of allowances referred to in paragraph 2 and have reported those policies in a standardised template provided by the Commission.'
Amendment 57
Proposal for a directive
Article 1 – point 4 – point d
Directive 2003/87/EC
Article 10 – paragraph 4 – subparagraphs 1, 2 and 3
(d)  the third subparagraph of paragraph 4 is replaced by the following:
(d)  in paragraph 4, the first, second and third subparagraphs are replaced by the following:
'The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'4. The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for timing, administration and other aspects of auctioning to ensure that it is conducted in an open, transparent, harmonised and non-discriminatory manner. To this end, the process shall be predictable, in particular as regards the timing and sequencing of auctions and the estimated volumes of allowances to be made available. Where an assessment concludes in relation to the individual industrial sectors that no significant impact on sectors or subsectors exposed to a significant risk of carbon leakage is to be expected, the Commission may, in exceptional circumstances, adapt the timetable for the period referred to in Article 13(1) beginning on 1 January 2013 so as to ensure the orderly functioning of the market. The Commission shall make no more than one such adaptation for a maximum number of 900 million allowances.
Auctions shall be designed to ensure that:
(a)  operators, and in particular any SMEs covered by the EU ETS, have full, fair and equitable access;
(b)  all participants have access to the same information at the same time and that participants do not undermine the operation of the auction;
(c)  the organisation and participation in auctions is cost-efficient and undue administrative costs are avoided; and
(d)  small emitters have access to allowances.'
Amendment 58
Proposal for a directive
Article 1 – point 4 – point d a (new)
Directive 2003/87/EC
Article 10 – paragraph 4 – subparagraph 4 a (new)
(da)  in paragraph 4, the following subparagraph is added:
'Every two years Member States shall report to the Commission the closure of electricity generation in their territory capacity due to national measures. The Commission shall calculate the equivalent number of allowances that those closures represent and inform the Member States. Member States may cancel a corresponding volume of allowances out of the total quantity distributed in accordance with paragraph 2.'
Amendment 59
Proposal for a directive
Article 1 – point 4 – point d b (new)
Directive 2003/87/EC
Article 10 – paragraph 5
(db)  paragraph 5 is replaced by the following:
'5. The Commission shall monitor the functioning of the European carbon market. Each year, it shall submit a report to the European Parliament and to the Council on the functioning of the carbon market including the implementation of the auctions, liquidity and the volumes traded. If necessary, Member States shall ensure that any relevant information is submitted to the Commission at least two months before the Commission adopts the report.'
'5. The Commission shall monitor the functioning of the EU ETS. Each year, it shall submit a report to the European Parliament and to the Council on its functioning including the implementation of the auctions, liquidity and the volumes traded. The report shall also address the interaction of the EU ETS with other Union climate and energy policies, including how those policies impact upon the supply-demand balance of the EU ETS and their compliance with the Union's 2030 and 2050 climate and energy goals. The report shall also take into account the risk of carbon leakage and the impact on investment within the Union. Member States shall ensure that any relevant information is submitted to the Commission at least two months before the Commission adopts the report.'
Amendment 60
Proposal for a directive
Article 1 – point 5 – point a
Directive 2003/87/EC
Article 10a – paragraph 1 – subparagraphs 1 and 2
(a)  the second paragraph of paragraph 1 is replaced by the following:
(a)  in paragraph 1, the first and second subparagraphs are replaced by the following:
'The Commission shall be empowered to adopt a delegated act in accordance with Article 23. This act shall also provide for additional allocation from the new entrants reserve for significant production increases by applying the same thresholds and allocation adjustments as apply in respect of partial cessations of operation. '
'1. The Commission is empowered to adopt a delegated act in accordance with 30b to supplement this Directive by setting Union-wide and fully harmonised measures for the allocation of the allowances referred to in paragraphs 4, 5 and 7, including any necessary provisions for a harmonised application of paragraph 19. This act shall also provide for additional allocation from the new entrants reserve for significant production changes. It shall, in particular, provide that any decrease or increase of at least 10% in production expressed as a rolling average of verified production data for the two preceding years compared to the production activity reported in accordance with Article 11 is adjusted with a corresponding amount of allowances by placing allowances into, or releasing them from, the reserve referred to in paragraph 7.
When preparing the delegated act referred to in the first subparagraph, the Commission shall take into account the need to limit administrative complexity and prevent gaming of the system. For that purpose it may, as appropriate, use flexibility in the application of the thresholds set out in this paragraph where justified to do so due to specific circumstances. '
Amendment 61
Proposal for a directive
Article 1 – point 5 – point a a (new)
Directive 2003/87/EC
Article 10a – paragraph 1 – subparagraph 3
(aa)  in paragraph 1, the third subparagraph is replaced by the following:
'The measures referred to in the first subparagraph shall, to the extent feasible, determine Community-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass and capture and storage of CO2, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.'
'The measures referred to in the first subparagraph shall, to the extent feasible, determine Union-wide ex-ante benchmarks so as to ensure that allocation takes place in a manner that provides incentives for reductions in greenhouse gas emissions and energy efficient techniques, by taking account of the most efficient techniques, substitutes, alternative production processes, high efficiency cogeneration, efficient energy recovery of waste gases, use of biomass, CCS and CCU, where such facilities are available, and shall not provide incentives to increase emissions. No free allocation shall be made in respect of any electricity production, except for cases falling within Article 10c and electricity produced from waste gases.'
Amendment 62
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 – introductory part
The benchmark values for free allocation shall be adjusted in order to avoid windfall profits and reflect technological progress in the period between 2007-8 and each later period for which free allocations are determined in accordance with Article 11(1). This adjustment shall reduce the benchmark values set by the act adopted pursuant to Article 10a by 1% of the value that was set based on 2007-8 data in respect of each year between 2008 and the middle of the relevant period of free allocation, unless:
The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive for the purpose of determining the revised benchmark values for free allocation. Those acts shall be in accordance with the delegated acts adopted pursuant to paragraph 1 of this Article and shall comply with the following:
Amendment 63
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 – point -i (new)
(-i)  For the period from 2021 to 2025, the benchmark values shall be determined on the basis of information submitted pursuant to Article 11 for the years 2016-2017;
Amendment 64
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 – point -i a (new)
(-ia)  On the basis of a comparison of the benchmark values based on this information with the benchmark value contained in Commission Decision 2011/278/EU, the Commission shall determine the annual reduction rate for each benchmark and apply it to the benchmark values applicable in the period 2013-2020 in respect of each year between 2008 and 2023 to determine the benchmark values for the years 2021-2025;
Amendment 65
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 – point i
(i)  On the basis of information submitted pursuant to Article 11, the Commission shall identify whether the values for each benchmark calculated using the principles in Article 10a differ from the annual reduction referred to above by more than 0.5% of the 2007-8 value higher or lower annually. If so, that benchmark value shall be adjusted either 0.5% or 1.5% in respect of each year between 2008 and the middle of the period for which free allocation is to be made;
(i)  Where, on the basis of information submitted pursuant to Article 11 the rate of improvement does not exceed 0.25%, the benchmark value shall therefore be reduced by that percentage in the period 2021-2025, in respect of each year between 2008 and 2023;
Amendment 66
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 – point ii
(ii)  By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of these products.
(ii)  Where, on the basis of information submitted pursuant to Article 11 the rate of improvement exceeds 1,75%, the benchmark value shall therefore be reduced by that percentage in the period 2021-2025, in respect of each year between 2008 and 2023.
Amendment 67
Proposal for a directive
Article 1 – point 5 – point b
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 4
The Commission shall adopt an implementing act for this purpose in accordance with Article 22a.
deleted
Amendment 68
Proposal for a directive
Article 1 – point 5 – point b a (new)
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 a (new)
(ba)  in paragraph 2, the following subparagraph is added:
‘For the period between 2026 and 2030, the benchmark values shall be determined in the same manner on the basis of information submitted pursuant to Article 11 for the years 2021-2022 and with the annual reduction rate applying in respect of each year between 2008 and 2028.’
Amendment 69
Proposal for a directive
Article 1 – point 5 – point b b (new)
Directive 2003/87/EC
Article 10a – paragraph 2 – subparagraph 3 b (new)
(bb)  in paragraph 2, the following subparagraph is added:
(ii)   By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of these products.
‘By way of derogation regarding the benchmark values for aromatics, hydrogen and syngas, these benchmark values shall be adjusted by the same percentage as the refineries benchmarks in order to preserve a level playing field for producers of these products.’
Amendment 165
Proposal for a directive
Article 1 – point 5 – point b c (new)
Directive 2003/87/EC
Article 10a – paragraph 3
bc)  in paragraph 3, the following subparagraph is added:
Subject to paragraphs 4 and 8, and notwithstanding Article 10c, no free allocation shall be given to electricity generators, to installations for the capture of CO2, to pipelines for transport of CO2 or to CO2 storage sites.
Subject to paragraphs 4 and 8, and notwithstanding Article 10c, no free allocation shall be given to electricity generators, to installations for the capture of CO2, to pipelines for transport of CO2 or to CO2 storage sites. Electricity generators producing electricity from waste gas are not electricity generators within the meaning of Article 3(u) of this Directive. In benchmark calculations, the full carbon content of waste gases used for electricity production shall be taken into account.
Amendment 70
Proposal for a directive
Article 1 – point 5 – point b d (new)
Directive 2003/87/EC
Article 10a – paragraph 4
(bd)  paragraph 4 is replaced by the following:
'4. Free allocation shall be given to district heating as well as to high efficiency cogeneration, as defined by Directive 2004/8/EC, for economically justifiable demand, in respect of the production of heating or cooling. In each year subsequent to 2013, the total allocation to such installations in respect of the production of that heat shall be adjusted by the linear factor referred to in Article 9.'
'4. Free allocation shall be given to district heating as well as to high efficiency cogeneration, as defined by Directive 2004/8/EC, for economically justifiable demand, in respect of the production of heating or cooling.'
Amendment 71
Proposal for a directive
Article 1 – point 5 – point c
Directive 2003/87/EC
Article 10a – paragraph 5
In order to respect the auctioning share set out in Article 10, the sum of free allocations in every year where the sum of free allocations does not reach the maximum level that respects the Member State auctioning share, the remaining allowances up to that level shall be used to prevent or limit reduction of free allocations to respect the Member State auctioning share in later years. Where, nonetheless, the maximum level is reached, free allocations shall be adjusted accordingly. Any such adjustment shall be done in a uniform manner.
5.  Where the sum of free allocations in a given year does not reach the maximum level, respecting the Member States’ auctioning share set out in Article 10(1), the remaining allowances up to that level shall be used to prevent or limit the reduction of free allocations in subsequent years. Where, however, the maximum level is reached, an amount of allowances equivalent to a reduction of up to five percentage points of the share of allowances to be auctioned by Member States over the entire ten year period beginning on 1 January 2021, pursuant to Article 10(1), shall be distributed free of charge to sectors and sub-sectors pursuant to Article 10b. Where, nonetheless, this reduction is insufficient to meet the demand of sectors or sub-sectors pursuant to Article 10b, free allocations shall be adjusted accordingly by a uniform cross-sectoral correction factor to sectors with an intensity of trade with third countries below 15% or a carbon intensity below 7Kg CO2/Euro GVA.
Amendment 72
Proposal for a directive
Article 1 – point 5 – point d
Directive 2003/87/EC
Article 10a – paragraph 6 – subparagraph 1
Member States should adopt financial measures in favour of sectors or sub-sectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, taking into account any effects on the internal market. Such financial measures to compensate part of these costs shall be in accordance with state aid rules.
6.  A centralised arrangement at Union level shall be adopted to compensate sectors or sub-sectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices.
Compensation shall be proportionate to greenhouse gas emission costs actually passed through in electricity prices and shall be applied in accordance with the criteria laid down in the relevant state aid guidelines in order to avoid negative effects on the internal market as well as overcompensation of costs incurred.
Where the amount of compensation available is not sufficient to compensate eligible indirect costs, the amount of compensation available for all eligible installations shall be reduced in a uniform manner.
The Commission is empowered to adopt a delegated act in accordance with Article 30b to supplement this Directive for the purpose referred to in this paragraph by putting in place arrangements for the creation and operation of the fund.
Amendment 73
Proposal for a directive
Article 1 – point 5 – point d a (new)
Directive 2003/87/EC
Article 10a – paragraph 6 – subparagraph 1a (new)
(da)  in paragraph 6, a new subparagraph is inserted:
'Member States may also adopt national financial measures in favour of sectors or sub-sectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, taking into account any effects on the internal market. Such financial measures to compensate part of those costs shall be in accordance with state aid rules and Article 10(3) of this Directive. Those national measures, when combined with the support referred to in the first subparagraph, shall not exceed the maximum level of compensation referred to in the relevant state aid guidelines and shall not create new market distortions. The existing ceilings on state aid compensation shall continue to decline throughout the trading period.'
Amendment 74
Proposal for a directive
Article 1 – point 5 – point e – point i
Directive 2003/87/EC
Article 10a – paragraph 7 – subparagraph 1
Allowances from the maximum amount referred to Article 10a(5) of this Directive which were not allocated for free up to 2020 shall be set aside for new entrants and significant production increases, together with 250 million allowances placed in the market stability reserve pursuant to Article 1(3) of Decision (EU) 2015/… of the European Parliament and of the Council(*).
7.  400 million allowances shall be set aside for new entrants and significant production increases.
Amendment 75
Proposal for a directive
Article 1 – point 5 – point e – point i
Directive 2003/87/EC
Article 10a – paragraph 7 – subparagraph 2
From 2021, allowances not allocated to installations because of the application of paragraphs 19 and 20 shall be added to the reserve.
From 2021 onwards, any allowances not allocated to installations because of the application of paragraphs 19 and 20 shall be added to the reserve.
Amendment 76
Proposal for a directive
Article 1 – point 5 – point f – introductory part
Directive 2003/87/EC
Article 10a – paragraph 8
(f)  in paragraph 8, the first, second and third subparagraphs of paragraph 8 are replaced by the following:
(f)  paragraph 8 is replaced by the following:
Amendment 77
Proposal for a directive
Article 1 – point 5 – point f – subparagraph 1
Directive 2003/87/EC
Article 10a – paragraph 8 – subparagraph 1
400 million allowances shall be available to support innovation in low-carbon technologies and processes in industrial sectors listed in Annex I, and to help stimulate the construction and operation of commercial demonstration projects that aim at the environmentally safe capture and geological storage (CCS) of CO2 as well as demonstration projects of innovative renewable energy technologies, in the territory of the Union.
8.  600 million allowances shall be available to leverage investments in innovation in low-carbon technologies and processes in industrial sectors listed in Annex I, including bio-based materials and products substituting carbon intensive materials, and to help stimulate the construction and operation of commercial demonstration projects that aim at the environmentally safe CCS and CCU as well as demonstration projects of innovative renewable energy technologies and energy storage, in the territory of the Union.
Amendment 78
Proposal for a directive
Article 1 – point 5 – point f
Directive 2003/87/EC
Article 10a – paragraph 8 – subparagraph 2
The allowances shall be made available for innovation in low-carbon industrial technologies and processes and support for demonstration projects for the development of a wide range of CCS and innovative renewable energy technologies that are not yet commercially viable in geographically balanced locations. In order to promote innovative projects, up to 60% of the relevant costs of projects may be supported, out of which up to 40% may not be dependent on verified avoidance of greenhouse gas emissions provided that pre-determined milestones are attained taking into account the technology deployed.
The allowances shall be made available for innovation in low-carbon industrial technologies and processes and support for demonstration projects for the development of a wide range of innovative renewable energy technologies, CCS and CCU that are not yet commercially viable. Projects shall be selected on the basis of their impact on energy systems or industrial processes within a Member State, a group of Member States or the Union. In order to promote innovative projects, up to 75% of the relevant costs of projects may be supported, out of which up to 60% may not be dependent on verified avoidance of greenhouse gas emissions provided that pre-determined milestones are attained taking into account the technology deployed. Allowances shall be allocated to projects according to their needs to reach pre-determined milestones.
Amendment 79
Proposal for a directive
Article 1 – point 5 – point f
Directive 2003/87/EC
Article 10a – paragraph 8 – subparagraph 3
In addition, 50 million unallocated allowances from the market stability reserve established by Decision (EU) 2015/… shall supplement any existing resources remaining under this paragraph for projects referred to above, with projects in all Member States including small-scale projects, before 2021. Projects shall be selected on the basis of objective and transparent criteria.
In addition, 50 million unallocated allowances from the MSR shall supplement any existing resources remaining under this paragraph as a consequence of funds resulting from NER300 allowance auctions for the period between 2013 and 2020 not having been used, for projects referred to in the first and second subparagraphs, with projects in all Member States including small-scale projects, before 2021 and from 2018 onwards. Projects shall be selected on the basis of objective and transparent criteria, taking into account their relevance in relation to the decarbonisation of the sectors concerned.
Projects supported under this subparagraph may also receive further support under the first and second subparagraphs.
Amendment 80
Proposal for a directive
Article 1 – point 5 – point f
Directive 2003/87/EC
Article 10a – paragraph 8 – subparagraph 4
The Commission shall be empowered to adopt a delegated act in accordance with Article 23.
The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by setting the criteria to be used for the selection of projects that are eligible to benefit from the allowances referred to in this paragraph, taking due account of the following principles:
(i)  Projects shall focus on the design and development of breakthrough solutions and implementation of demonstration programmes;
(ii)  The activities shall run close-to-market in production plants to demonstrate the viability of breakthrough technologies in overcoming technological as well as non-technological barriers;
(iii)  Projects shall address technological solutions that have the potential to be of widespread application, and may combine different technologies;
(iv)  Solutions and technologies shall ideally have the potential to be transferred within the sector and possibly to other sectors;
(v)  Projects where the anticipated emissions reductions are significantly below the relevant benchmark value shall be prioritised. Eligible projects shall either contribute to emissions reductions below the benchmark values referred to in paragraph 2 or shall have future prospects to significantly lower the cost of transitioning towards low-emissions energy production; and
(vi)  CCU projects shall deliver a net reduction in emissions and a permanent storage of CO2 across their lifetime.
Amendment 82
Proposal for a directive
Article 1 – point 5 – point i a (new)
Directive 2003/87/EC
Article 10a – paragraph 20
(ia)  paragraph 20 is replaced by the following:
'20. The Commission shall, as part of the measures adopted under paragraph 1, include measures for defining installations that partially cease to operate or significantly reduce their capacity, and measures for adapting, as appropriate, the level of free allocations given to them accordingly.'
'20. The Commission shall, as part of the measures adopted under paragraph 1, include measures for defining installations that partially cease to operate or significantly reduce their capacity, and measures for adapting, as appropriate, the level of free allocations given to them accordingly.
Those measures shall provide flexibility for industry sectors where capacity is regularly transferred between operating installations in the same company.'
Amendment 83
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – title
Measures to support certain energy-intensive industries in the event of carbon leakage
Transitional measures to support certain energy intensive industries in the event of carbon leakage
Amendment 85
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – paragraph 1 a (new)
1a.  After the adoption of the revision of the Directive 2012/27/EU of the European Parliament and of the Council*, the Commission shall reassess the share of emission reductions in the EU ETS and the Decision No 406/2009/EC of the European Parliament and of the Council**. Additional reductions by an increased energy efficiency target shall be used to protect industry at risk of carbon or investment leakage.
____________
* Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ L 315, 14.11.2012, p. 1).
** Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 (OJ L 140, 5.6.2009, p. 136).
Amendment 144
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – paragraphs 1 b and 1 c (new)
(1b)  Following up to Article 6(2) of the Paris Agreement, the Commission shall assess in its report, to be prepared in accordance with Article 28aa, the development of climate mitigation policies, including market-based approaches, in third countries and regions and the effect of these policies on the competitiveness of European industry.
(1c)  If this report concludes that a significant risk of carbon leakage remains, the Commission shall, if appropriate, come forward with a legislative proposal introducing a carbon border adjustment, fully compatible with WTO rules, based on a feasibility study to be initiated at the publication of this Directive in the OJ. This mechanism would include in the EU ETS importers of products which are produced by the sectors or sub-sectors determined in accordance with Article 10a.
Amendment 86
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – paragraph 2
2.  Sectors and sub-sectors where the product from multiplying their intensity of trade with third countries by their emission intensity is above 0.18 may be included in the group referred to in paragraph 1, on the basis of a qualitative assessment using the following criteria:
2.  Sectors and sub-sectors where the product from multiplying their intensity of trade with third countries by their emission intensity is above 0,12 may be included in the group referred to in paragraph 1, on the basis of a qualitative assessment using the following criteria:
(a)  the extent to which it is possible for individual installations in the sector or sub-sectors concerned to reduce emission levels or electricity consumption;
(a)  the extent to which it is possible for individual installations in the sector or sub-sectors concerned to reduce emission levels or electricity consumption taking into account associated increases in costs of production;
(b)  current and projected market characteristics;
(b)  current and projected market characteristics;
(c)  profit margins as a potential indicator of long-run investment or relocation decisions.
(c)  profit margins as a potential indicator of long-run investment or relocation decisions;
(ca)  commodities which are traded on worldwide markets for a common reference price.
Amendment 87
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – paragraph 3
3.   Other sectors and sub-sectors are considered to be able to pass on more of the cost of allowances in product prices, and shall be allocated allowances free of charge for the period up to 2030 at 30% of the quantity determined in accordance with the measures adopted pursuant to Article 10a.
3.  The district heating sector is considered to be able to pass on more of the cost of allowances in product prices, and shall be allocated allowances free of charge for the period up to 2030 at 30% of the quantity determined in accordance with the measures adopted pursuant to Article 10a. Other sectors and sub-sectors shall not be allocated any allowances free of charge.
Amendment 88
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10b – paragraph 4
4.  By 31 December 2019, the Commission shall adopt a delegated act for the preceding paragraphs for activities at a 4-digit level (NACE-4 code) as concerns paragraph 1, in accordance with Article 23, based on data for the three most recent calendar years available.
4.  By 31 December 2019, the Commission shall adopt delegated acts in accordance with Article 30b to supplement this Directive in relation to paragraph 1 concerning the activities at a 4-digit level (NACE-4 code) or, where justified on the basis of objective criteria developed by the Commission, at the relevant level of disaggregation based on public and sector-specific data to comprise those activities covered by the EU ETS. The assessment of trade intensity shall be based on data for the five most recent calendar years available.
Amendment 89
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 1
1.  By derogation from Article 10a(1) to (5), Member States which had in 2013 a GDP per capita in at market prices below 60% of the Union average may give a transitional free allocation to installations for electricity production for the modernisation of the energy sector.
1.  By way of derogation from Article 10a(1) to (5), Member States which had in 2013 a GDP per capita in EUR at market prices below 60% of the Union average may give transitional free allocation to installations for electricity generation for the modernisation, diversification and sustainable transformation of the energy sector. This derogation shall end on 31 December 2030.
Amendment 90
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 1 a (new)
1a.  Member States not eligible pursuant to paragraph 1 but which had in 2014 a GDP per capita in EUR at market prices below 60% of the Union average may also make use of the derogation referred to in that paragraph up to the total quantity referred to in paragraph 4, provided that the corresponding number of allowances is transferred to the Modernisation Fund and the revenues are used to support investments in accordance with Article 10d.
Amendment 91
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 1 b (new)
1b.  Member States which are eligible under this Article to grant free allocation to installations for energy generation, may choose to transfer the corresponding number of allowances or part of them to the Modernisation Fund and allocate them pursuant to the provisions of Article 10d. In such a case, they shall inform the Commission before the transfer.
Amendment 92
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 1 – point b
(b)  ensure that only projects which contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, clean technologies and modernisation of the energy production, transmission and distribution sectors are eligible to bid;
(b)  ensure that only projects which contribute to the diversification of their energy mix and sources of supply, the necessary restructuring, environmental upgrading and retrofitting of the infrastructure, clean technologies (such as renewable technologies) or modernisation of the energy production, district heating networks, energy efficiency, energy storage, transmission and distribution sectors are eligible to bid;
Amendment 93
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 1 – point c
(c)  define clear, objective, transparent and non-discriminatory selection criteria for the ranking of projects, so as to ensure that projects are selected which:
(c)  define clear, objective, transparent and non-discriminatory selection criteria in line with the Union 2050 climate and energy policy objectives for the ranking of projects, so as to ensure that projects are selected which:
Amendment 94
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 1 – point c – point i
(i)  on the basis of a cost-benefit analysis, ensure a net positive gain in terms of emission reduction and realise a pre-determined significant level of CO2 reductions;
(i)  on the basis of a cost-benefit analysis, ensure a net positive gain in terms of emission reduction and realise a pre-determined significant level of CO2 reductions proportionate to the size of the projects. Where projects relate to electricity production, total greenhouse gas emissions per kilowatt hour of electricity produced in the installation shall not exceed 450g of CO2 equivalent after completion of the project. By 1 January 2021, the Commission shall adopt a delegated act in accordance with Article 30b in order to amend this Directive by defining for projects relating to heat production maximum total greenhouse gas emissions per kilowatt hour of heat produced in the installation that shall not be exceeded.
Amendment 95
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 1– point c – point ii
(ii)  are additional, clearly respond to replacement and modernisation needs and do not supply a market-driven increase in energy demand;
(ii)  are additional, although they may be used to meet the relevant targets set under the 2030 Climate and Energy Framework, clearly respond to replacement and modernisation needs and do not supply a market-driven increase in energy demand;
Amendment 96
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 1– point c – point iii a (new)
(iiia)  do not contribute to new coal-fired energy generation nor increase coal-dependency.
Amendment 97
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 2
By 30 June 2019, any Member State intending to make use of optional free allocation shall publish a detailed national framework setting out the competitive bidding process and selection criteria for public comment.
By 30 June 2019, any Member State intending to make use of optional transitional free allocation for the modernisation of the energy sector shall publish a detailed national framework setting out the competitive bidding process and selection criteria for public comment.
Amendment 98
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 2 – subparagraph 3
Where investments with a value of less than 10 million are supported with free allocation, the Member State shall select projects based on objective and transparent criteria. The results of this selection process shall be published for public comment. On this basis, the Member State concerned shall establish and submit a list of investments to the Commission by 30 June 2019.
Where investments with a value of less than EUR 10 million are supported with free allocation, the Member State shall select projects based on objective and transparent criteria consistent with reaching the Union’s long-term climate and energy objectives. Those criteria shall be subject to public consultation, ensuring full transparency and accessibility of relevant documents, and fully reflect comments raised by stakeholders. The results of this selection process shall be published for public consultation. On this basis, the Member State concerned shall establish and submit a list of investments to the Commission by 30 June 2019.
Amendment 99
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 3
3.  The value of the intended investments shall at least equal the market value of the free allocation, while taking into account the need to limit directly linked price increases. The market value shall be the average of the price of allowances on the common auction platform in the preceding calendar year.
3.  The value of the intended investments shall at least equal the market value of the free allocation, while taking into account the need to limit directly linked price increases. The market value shall be the average of the price of allowances on the common auction platform in the preceding calendar year. Up to 75% of the relevant costs of an investment may be supported.
Amendment 100
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 6
6.  Member States shall require benefiting electricity generators and network operators to report by 28 February of each year on the implementation of their selected investments. Member States shall report on this to the Commission, and the Commission shall make such reports public.
6.  Member States shall require benefiting energy generators and network operators to report annually by 31 March of each year on the implementation of their selected investments, including the balance of free allocation and investment expenditure incurred, the types of investments supported and the way in which they achieved the goals set out in point (b) of the first subparagraph of paragraph 2. Member States shall report on this to the Commission, and the Commission shall make such reports available to the public. Member States and the Commission shall monitor and analyse potential arbitrage with regard to the threshold of EUR 10 million for small projects and shall prevent unjustified dividing up of an investment over smaller projects by excluding more than one investment in the same beneficiary installation.
Amendment 101
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 6 a (new)
6a.  In case of a reasonable suspicion of irregularities or a failure by a Member State to report in accordance with paragraphs 2 to 6, the Commission may undertake an independent investigation, where necessary assisted by a contracted third party. The Commission shall also investigate other possible infringements, such as failure to implement the Third Energy Package. The Member State concerned shall provide all investment information and access necessary for the investigation, including access to installations and building sites. The Commission shall publish a report on that investigation.
Amendment 102
Proposal for a directive
Article 1 – point 6
Directive 2003/87/EC
Article 10c – paragraph 6 b (new)
6b.  In the case of infringement of Union climate and energy law, including the Third Energy Package, or the criteria set out in this Article, the Commission may require the Member State to withhold free allocation.
Amendment 49
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 1 – subparagraph 1
1.  A fund to support investments in modernising energy systems and improving energy efficiency in Member States with a GDP per capita below 60% of the Union average in 2013 shall be established for the period 2021-30 and financed as set out in Article 10.
1.  A fund to support and leverage investments in modernising energy systems, including district heating, and improving energy efficiency in Member States with a GDP per capita below 60% of the Union average in 2013, or in 2014, or in 2015, shall be established for the period 2021-2030 and financed as set out in Article 10.
Amendment 104
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 1 – subparagraph 2
The investments supported shall be consistent with the aims of this Directive and the European Fund for Strategic Investments.
The investments supported shall comply with the principles of transparency, non-discrimination, equal treatment, sound financial management and shall offer the best value for money. They shall be consistent with the aims of this Directive, the Union’s long term climate and energy goals and the European Fund for Strategic Investments, and shall:
(i)  Contribute to energy savings, renewable energy systems, energy storage and electricity interconnection, transmission and distribution sectors; where projects relate to electricity production, total greenhouse gas emissions per kilowatt hour of electricity produced in the installation shall not exceed 450g of CO2 equivalent after completion of the project. The Commission shall adopt a delegated act in accordance with Article 30b by 1 January 2021 in order to amend this Directive by defining, for projects relating to heat production, maximum total greenhouse gas emissions per kilowatt hour of heat produced in the installation that shall not be exceeded;
(ii)  On the basis of a cost-benefit analysis, ensure a net-positive gain in terms of emissions reductions and realise a pre-determined significant level of CO2 reductions;
(iii)  Be additional although they may be used to meet the relevant targets set under the 2030 Climate and Energy Framework, clearly respond to replacement and modernisation needs and shall not supply a market-driven increase in energy demand;
(iv)  Not contribute to new coal-fired energy generation nor increase coal dependency.
Amendment 105
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 1 – subparagraph 2 a (new)
The Commission shall keep under review the requirements set out in this paragraph taking into account the Climate Strategy of the EIB. If, on the basis of technological progress, one or more of the requirements set out in this paragraph become irrelevant, the Commission shall adopt a delegated act in accordance with Article 30b by 2024 in order to amend this Directive by outlining new or updated requirements.
Amendment 106
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 2
2.  The fund shall also finance small-scale investment projects in the modernisation of energy systems and energy efficiency. To this end, the investment board shall develop guidelines and investment selection criteria specific to such projects.
2.  The fund shall also finance small-scale investment projects in the modernisation of energy systems and energy efficiency. To this end, its investment board shall develop investment guidelines and selection criteria specific to such projects in line with the objectives of this Directive and with the criteria set out in paragraph 1. Those guidelines and selection criteria shall be made available to the public.
For the purpose of this paragraph a small-scale investment project means a project funded through loans provided by a national promotional bank or through grants contributing to the implementation of a national programme serving specific objectives that are in line with those of the Modernisation Fund, provided that not more than 10% of the Member States' share set out in Annex IIb is used.
Amendment 107
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 3 a (new)
3a.  Any beneficiary Member State which has decided to grant transitional free allocation pursuant to Article 10c may transfer those allowances to its share of the Modernisation Fund set out in Annex IIb and allocate them pursuant to the provisions of Article 10d.
Amendment 108
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 4 – subparagraph 1
4.  The fund shall be governed by an investment board and a management committee, which shall be composed of representatives from the beneficiary Member States, the Commission, the EIB and three representatives elected by the other Member States for a period of 5 years. The investment board shall be responsible to determine an Union-level investment policy, appropriate financing instruments and investment selection criteria.
4.  The beneficiary Member States shall be responsible for the governance of the fund, and shall jointly establish an investment board composed of one representative per beneficiary Member State, the Commission, the EIB, and three observers from interested parties such as industrial federations, trade unions, or NGOs. The investment board shall be responsible for determining a Union-level investment policy, which shall be in line with the requirements set out in this Article and be consistent with Union policies.
An advisory board, independent from the investment board, shall be established. The advisory board shall be composed of three representatives from the beneficiary Member States, three representatives from non-beneficiary Member States, a representative of the Commission, a representative of the EIB, and a representative from the European Bank for Reconstruction and Development (EBRD), selected for a five year period. The representatives of the advisory board shall have a high level of relevant market experience in project structuring and project financing. The advisory board shall provide advice and recommendations to the investment board on project eligibility for selection, investment and financing decisions, and any further project development assistance as required.
The management committee shall be responsible for the day-to-day management of the fund.
A management committee shall be established. The management committee shall be responsible for the day-to-day management of the fund.
Amendment 109
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 4 – subparagraph 2
The investment board shall elect a representative from the Commission as chairman. The investment board shall strive to take decisions by consensus. If the investment board is not able to decide by consensus within a deadline set by the chairman, the investment board shall take a decision by simple majority.
The chairman of the investment board shall be elected from among its members for a one-year term. The investment board shall strive to take decisions by consensus. The advisory board shall adopt its opinion by simple majority.
Amendment 110
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 4 – subparagraph 3
The management committee shall be composed of representatives appointed by the investment board. Decisions of the management committee shall be taken by simple majority.
The investment board, advisory board and management committee shall operate in an open and transparent manner. The minutes of both board meetings shall be published. The composition of the investment board and advisory board shall be published and CVs and declarations of interests of the members shall be made available to the public and regularly updated. The investment board and the advisory board shall, on an ongoing basis, check for the absence of any conflict of interest. The advisory board shall submit every six months to the European Parliament, the Council and the Commission a list of advice provided to projects.
Amendment 111
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 4 – subparagraph 4
If the EIB recommends not financing an investment and provides reasons for this recommendation, a decision shall only be adopted if a majority of two-thirds of all members vote in favour. The Member State in which the investment will take place and the EIB shall not be entitled to cast a vote in this case. For small projects funded through loans provided by a national promotional bank or through grants contributing to the implementation of a national programme serving specific objectives in line with the objectives of the Modernisation Fund, provided that not more than 10% of the Member States' share set out in Annex IIb is used under the programme, the two preceding sentences shall not apply.
If the EIB recommends to the advisory board not to finance an investment and provides reasons why it is not in line with the investment policy adopted by the investment board and the selection criteria set out in paragraph 1, a positive opinion shall only be adopted if a majority of two-thirds of all members vote in favour. The Member State in which the investment will take place and the EIB shall not be entitled to cast a vote in this case.
Amendment 112
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 5 – introductory part
5.  The beneficiary Member States shall report annually to the management committee on investments financed by the fund. The report shall be made public and include:
5.  The beneficiary Member States shall report annually to the investment board and advisory board on investments financed by the fund. The report shall be made available to the public and include:
Amendment 113
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 6
6.  Each year, the management committee shall report to the Commission on experience with the evaluation and selection of investments. The Commission shall review the basis on which projects are selected by 31 December 2024 and, where appropriate, make proposals to the management committee.
6.  Each year, the advisory board shall report to the Commission on experience with the evaluation and selection of investments. The Commission shall review the basis on which projects are selected by 31 December 2024 and, where appropriate, make proposals to the investment board and the advisory board.
Amendment 114
Proposal for a directive
Article 1 – point 7
Directive 2003/87/EC
Article 10d – paragraph 7
7.  The Commission shall be empowered to adopt a delegated act in accordance with Article 23 to implement this Article.
7.  The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for the effective functioning of the Modernisation Fund.
Amendment 115
Proposal for a directive
Article 1 – paragraph 1 – point 8 a (new)
Directive 2003/87/EC
Article 11 – paragraph 1 – subparagraph 2 a (new)
(8a)  In Article 11(1) the following subparagraph is added:
'From 2021 onwards, Member States shall also ensure that during each calendar year every operator reports production activity for adjustments to allocation in accordance with Article 10a paragraph 7.'
Amendment 116
Proposal for a directive
Article 1 – point 8 b (new)
Directive 2003/87/EC
Article 11 – paragraph 3 a (new)
(8b)  In Article 11, the following paragraph is added:
'3a. In case of a reasonable suspicion of irregularities or a failure by a Member State to provide the list and the information set out in paragraphs 1 to 3, the Commission may start an independent investigation, where necessary assisted by a contracted third party. The Member State concerned shall provide all information and access necessary for the investigation, including access to installations and production data. The Commission shall respect the same confidentiality on commercially sensitive information as the Member State concerned and shall publish a report on that investigation.'
Amendment 117
Proposal for a directive
Article 1 – point 10 a (new)
Directive 2003/87/EC
Article 12 – paragraph 3a
(10a)  In Article 12, paragraph 3a is replaced by the following:
'3a. An obligation to surrender allowances shall not arise in respect of emissions verified as captured and transported for permanent storage to a facility for which a permit is in force in accordance with Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide1.'
'3a. An obligation to surrender allowances shall not arise in respect of emissions verified as captured and transported for permanent storage to a facility for which a permit is in force in accordance with Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide1, nor in respect of emissions verified as captured and/or re-used in an application ensuring a permanent bound of the CO2, for the purpose of carbon capture and re-use.'
Amendment 118
Proposal for a directive
Article 1 – point 12
Directive 2003/87/EC
Article 14 – paragraph 1
(12)  In Article 14(1), the second subparagraph is replaced by the following:
(12)  In Article 14, paragraph 1 is replaced by the following:
'The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'1. The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for the monitoring and reporting of emissions and, where relevant, activity data, from the activities listed in Annex I, the monitoring and reporting of tonne-kilometre data for the purpose of an application under Articles 3e or 3f, which shall be based on the principles for monitoring and reporting set out in Annex IV and the specification of the global warming potential of each greenhouse gas in the requirements for monitoring and reporting emissions for that gas.';
'By 31 December 2018, the Commission shall adjust existing rules on monitoring and reporting of emissions as defined in Commission Regulation (EU) 601/2012* in order to remove regulatory barriers to investment in more recent low carbon technologies such as carbon capture and usage (CCU). Those new rules shall be effective for all CCU technologies as of 1 January 2019.
That regulation shall also determine simplified monitoring, reporting and verification procedures for small emitters.
____________________
* Commission Regulation (EU) No 601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas emissions pursuant to Directive 2003/87/EC of the European Parliament and of the Council. (OJ L 181, 12.7.2012, p. 30).’
Amendment 119
Proposal for a directive
Article 1 – point 13
Directive 2003/87/EC
Article 15 – paragraphs 4 and 5
(13)   In Article 15, the fifth subparagraph is replaced by the following:
(13)   In Article 15, the fourth and fifth paragraphs are replaced by the following:
'The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this directive by laying down detailed arrangements for the verification of emission reports based on the principles set out in Annex V and for the accreditation and supervision of verifiers. It shall specify conditions for the accreditation and withdrawal of accreditation, for mutual recognition and peer evaluation of accreditation bodies, as appropriate.'
Amendment 120
Proposal for a directive
Article 1 – point 13 a (new)
Directive 2003/87/EC
Article 16 – paragraph 7
(13a)  In Article 16, paragraph 7 is replaced by the following:
7.  When requests such as those referred to in paragraph 5 are addressed to the Commission, the Commission shall inform the other Member States through their representatives on the Committee referred to in Article 23(1) in accordance with the Committee’s Rules of Procedure.
7.  When requests such as those referred to in paragraph 5 are addressed to the Commission, the Commission shall inform the other Member States through their representatives on the Committee referred to in Article 30c(1) in accordance with the Committee’s Rules of Procedure.
Amendment 121
Proposal for a directive
Article 1 – point 14
Directive 2003/87/EC
Article 16 – paragraph 12
12.  Where appropriate, detailed rules shall be established in respect of the procedures referred to in this Article. Those implementing acts shall be adopted in accordance with the procedure referred to in Article 22a.
12.  Where appropriate, detailed rules shall be established in respect of the procedures referred to in this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 30c(2).
Amendment 122
Proposal for a directive
Article 1 – point 15
Directive 2003/87/EC
Article 19 – paragraph 3
(15)  In Article 19(3), the third sentence is replaced by the following:
(15)  In Article 19, paragraph 3 is replaced by the following:
'It shall also include provisions to put into effect rules on the mutual recognition of allowances in agreements to link emission trading systems. The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'3 The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for the establishment of a standardised and secure system of registries in the form of standardised electronic databases containing common data elements to track the issue, holding, transfer and cancellation of allowances, to provide for public access and confidentiality, as appropriate, and to ensure that there are no transfers which are incompatible with the obligations resulting from the Kyoto Protocol. Those delegated acts shall also include provisions concerning the use and identification of CERs and ERUs in the EU ETS and the monitoring of the level of such use. Those acts shall also include provisions to put into effect rules on the mutual recognition of allowances in agreements to link emission trading systems.'
Amendment 123
Proposal for a directive
Article 1 – point 15 a (new)
Directive 2003/87/EC
Article 21 – paragraph 1
(15a)  In Article 21, paragraph 1 is replaced by the following:
'1. Each year the Member States shall submit to the Commission a report on the application of this Directive. That report shall pay particular attention to the arrangements for the allocation of allowances, the operation of registries, the application of the implementing measures on monitoring and reporting, verification and accreditation and issues relating to compliance with this Directive and on the fiscal treatment of allowances, if any. The first report shall be sent to the Commission by 30 June 2005. The report shall be drawn up on the basis of a questionnaire or outline drafted by the Commission in accordance with the procedure laid down in Article 6 of Directive 91/692/EEC. The questionnaire or outline shall be sent to Member States at least six months before the deadline for the submission of the first report.
'1. Each year the Member States shall submit to the Commission a report on the application of this Directive. That report shall pay particular attention to the arrangements for the allocation of allowances, financial measures pursuant to Article 10a(6), the operation of registries, the application of the implementing measures on monitoring and reporting, verification and accreditation and issues relating to compliance with this Directive and on the fiscal treatment of allowances, if any. The first report shall be sent to the Commission by 30 June 2005. The report shall be drawn up on the basis of a questionnaire or outline drafted by the Commission in accordance with the procedure laid down in Article 6 of Directive 91/692/EEC. The questionnaire or outline shall be sent to Member States at least six months before the deadline for the submission of the first report.'
Amendment 124
Proposal for a directive
Article 1 – point 15 b (new)
Directive 2003/87/EC
Article 21 – paragraph 2 a (new)
(15b)  In Article 21, the following paragraph is inserted:
'2a. The report shall, using data provided through the cooperation referred to in Article 18b, include a list of operators subject to the requirements of this Directive who have not opened a registry account.'
Amendment 125
Proposal for a directive
Article 1 – point 15 c (new)
Directive 2003/87/EC
Article 21 – paragraph 3 a (new)
(15c)  In Article 21 the following paragraph is added:
'3a. In case of a reasonable suspicion of irregularities or a failure by a Member State to report in accordance with paragraph 1, the Commission may undertake an independent investigation, where necessary assisted by a contracted third party. The Member State shall provide all information and access necessary for the investigation, including access to installations. The Commission shall publish a report on the investigation.'
Amendment 126
Proposal for a directive
Article 1 – point 16
Directive 2003/87/EC
Article 22 – paragraph 2
The Commission shall be empowered to adopt a delegated act in accordance with Article 23.
The Commission is empowered to adopt delegated acts in accordance with Article 30b to amend this Directive by laying down non-essential elements of the Annexes to this Directive, with the exception of Annexes I, IIa and IIb.
Amendment 127
Proposal for a directive
Article 1 – point 17
Directive 2003/87/EC
Article 22a – title
(17)  The following Article 22a is inserted:
(17)  The following Article is inserted:
'Article 22a
'Article 30c
Committee procedure'
Committee procedure'
Amendment 128
Proposal for a directive
Article 1 – point 18
Directive 2003/87/EC
Article 23 – title
‘Article 23
‘Article 30b
Exercise of the delegation’
Exercise of the delegation’
Amendment 129
Proposal for a directive
Article 1 – point 19 – point a
Directive 2003/87/EC
Article 24 – paragraph 1 – subparagraph 1
From 2008, Member States may apply emission allowance trading in accordance with this Directive to activities and to greenhouse gases which are not listed in Annex I, taking into account all relevant criteria, in particular the effects on the internal market, potential distortions of competition, the environmental integrity of the Community scheme and the reliability of the planned monitoring and reporting system, provided that inclusion of such activities and greenhouse gases is approved by the Commission.
From 2008, Member States may apply emission allowance trading in accordance with this Directive to activities and to greenhouse gases which are not listed in Annex I, taking into account all relevant criteria, in particular the effects on the internal market, potential distortions of competition, the environmental integrity of the EU ETS and the reliability of the planned monitoring and reporting system, provided that inclusion of such activities and such greenhouse gases is approved by the Commission. Any such unilateral inclusion shall be proposed and approved no later than 18 months before the start of a new trading period in the EU ETS.
Amendment 130
Proposal for a directive
Article 1 – point 19 – point a
Directive 2003/87/EC
Article 24 – paragraph 1 – subparagraph 2
In accordance with delegated acts which the Commission shall be empowered to adopt in accordance with Article 23, if the inclusion refers to activities and greenhouse gases which are not listed in Annex I
The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for approval of the inclusion of the activities and greenhouse gases referred to in the first subparagraph in the emission allowance trading scheme if that inclusion refers to activities and greenhouse gases which are not listed in Annex I.
Amendment 131
Proposal for a directive
Article 1 – point 19 – point b
Directive 2003/87/EC
Article 24 – paragraph 3
(b)  the second subparagraph of paragraph 3 is replaced by the following:
(b)  paragraph 3 is replaced by the following:
'The Commission shall be empowered to adopt delegated acts for such a regulation for the monitoring and reporting of emissions and activity data in accordance with Article 23.';
'3. The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down detailed arrangements for the monitoring of, and reporting on, related to activities, installations and greenhouse gases which are not listed as a combination in Annex I, if that monitoring and reporting can be carried out with sufficient accuracy.';
Amendment 132
Proposal for a directive
Article 1 – point 20 – point a
Directive 2003/87/EC
Article 24a – paragraph 1 – subparagraphs 1 and 2
(a)  the second subparagraph of paragraph 1 is replaced by the following:
(a)  in paragraph 1, the first and second subparagraphs are replaced by the following:
'Such measures shall be consistent with acts adopted pursuant to Article 11b(7). The Commission shall be empowered to adopt a delegated act in accordance with Article 23.';
'1. The Commission is empowered to adopt delegated acts in accordance with Article 30b to supplement this Directive by laying down, in addition to the inclusions provided for in Article 24, detailed arrangements for issuing of allowances or credits in respect of projects administered by Member States that reduce greenhouse gas emissions not covered by the EU ETS.'
Amendment 133
Proposal for a directive
Article 1 – point 22
Directive 2003/87/EC
Article 25a – paragraph 1
1.  Where a third country adopts measures for reducing the climate change impact of flights departing from that country which land in the Community, the Commission, after consulting with that third country, and with Member States within the Committee referred to in Article 23(1), shall consider options available in order to provide for optimal interaction between the Community scheme and that country’s measures.
1.  Where a third country adopts measures for reducing the climate change impact of flights departing from that country which land in the Union, the Commission, after consulting with that third country, and with Member States within the Committee referred to in Article 30c(1), shall consider options available in order to provide for optimal interaction between the EU ETS and that third country’s measures.
Where necessary, the Commission may adopt amendments to provide for flights arriving from the third country concerned to be excluded from the aviation activities listed in Annex I or to provide for any other amendments to the aviation activities listed in Annex I which are required by an agreement pursuant to the fourth subparagraph. The Commission shall be empowered to adopt such amendments in accordance with Article 23.
Where necessary, the Commission may submit a legislative proposal to the European Parliament and Council to provide for flights arriving from the third country concerned to be excluded from the aviation activities listed in Annex I or to provide for any other amendments to the aviation activities listed in Annex I which are required by such agreement.
Amendment 134
Proposal for a directive
Article 1 – point 22 a (new)
Directive 2003/87/EC
Article 27 – paragraph 1
(22a)  In Article 27, paragraph 1 is replaced by the following:
'1. Following consultation with the operator, Member States may exclude from the Community scheme installations which have reported to the competent authority emissions of less than 25 000 tonnes of carbon dioxide equivalent and, where they carry out combustion activities, have a rated thermal input below 35 MW excluding emissions from biomass, in each of the three years preceding the notification under point (a), and which are subject to measures that will achieve an equivalent contribution to emission reductions, if the Member State concerned complies with the following conditions:
'1. Following consultation with the operator and upon the operator’s agreement, Member States may exclude from the EU ETS installations operated by an SME which have reported to the competent authority emissions of less than 50 000 tonnes of carbon dioxide equivalent, excluding emissions from biomass, in each of the three years preceding the notification under point (a), and which are subject to measures that will achieve an equivalent contribution to emission reductions, if the Member State concerned complies with the following conditions:
(a)  it notifies the Commission of each such installation, specifying the equivalent measures applying to that installation that will achieve an equivalent contribution to emission reductions that are in place, before the list of installations pursuant to Article 11(1) has to be submitted and at the latest when this list is submitted to the Commission;
(a)  it notifies the Commission of each such installation, specifying the equivalent measures applying to that installation that will achieve an equivalent contribution to emission reductions that are in place and specifying how those measures would not result in higher compliance costs for such installations, before the list of installations pursuant to Article 11(1) has to be submitted and at the latest when this list is submitted to the Commission;
(b)  it confirms that monitoring arrangements are in place to assess whether any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year. Member States may allow simplified monitoring, reporting and verification measures for installations with average annual verified emissions between 2008 and 2010 which are below 5 000 tonnes a year, in accordance with Article 14;
(b)  it confirms that monitoring arrangements are in place to assess whether any installation emits 50 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year. Member States, following an operator’s request, shall allow simplified monitoring, reporting and verification measures for installations with average annual verified emissions between 2008 and 2010 which are below 5 000 tonnes a year, in accordance with Article 14;
(c)  it confirms that if any installation emits 25 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year or the measures applying to that installation that will achieve an equivalent contribution to emission reductions are no longer in place, the installation will be reintroduced into the Community scheme;
(c)  it confirms that if any installation emits 50 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year or the measures applying to that installation that will achieve an equivalent contribution to emission reductions are no longer in place, the installation will be reintroduced into the EU ETS;
(d)  it publishes the information referred to in points (a), (b) and (c) for public comment.
(d)  it makes the information referred to in points (a), (b) and (c) available to the public.
Hospitals may also be excluded if they undertake equivalent measures. '
Hospitals may also be excluded if they undertake equivalent measures.'
Amendment 135
Proposal for a directive
Article 1 – point 22 b (new)
Directive 2003/87/EC
Article 27 a (new)
(22b)  The following Article is inserted:
'Article 27a
Exclusion of small installations not subject to equivalent measures
1.  Following consultation with the operator, Member States may exclude from the EU ETS installations which have reported to the competent authority emissions of less than 5 000 tonnes of carbon dioxide equivalent, excluding emissions from biomass, in each of the three years preceding the notification under point (a), if the Member State concerned complies with the following conditions:
(a)  it notifies the Commission of each such installation before the list of installations pursuant to Article 11(1) is to be submitted or at the latest when that list is submitted to the Commission;
(b)  it confirms that monitoring arrangements are in place to assess whether any installation emits 5 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year;
(c)  it confirms that if any installation emits 5 000 tonnes or more of carbon dioxide equivalent, excluding emissions from biomass, in any one calendar year the installation will be reintroduced into the EU ETS, unless Article 27 is applicable;
(d)  it makes the information referred to in points (a), (b) and (c) available to the public.
2.  When an installation is reintroduced into the EU ETS pursuant to paragraph 1(c), any allowances issued pursuant to Article 10a shall be granted starting with the year of the reintroduction. Allowances issued to such installations shall be deducted from the quantity to be auctioned pursuant to Article 10(2) by the Member State in which the installation is situated.'
Amendment 136
Proposal for a directive
Article 1 – point 22 c (new)
Directive 2003/87/EC
Article 29
(22c)  Article 29 is amended as follows:
‘Report to ensure the better functioning of the carbon market
‘Report to ensure the better functioning of the carbon market
If, on the basis of regular reports referred to in Article 10(5), the Commission has evidence that the carbon market is not functioning properly, it shall submit a report to the European Parliament and to the Council. The report may be accompanied, if appropriate, by proposals aiming at increasing transparency of the carbon market and addressing measures to improve its functioning.’
If, on the basis of regular reports referred to in Article 10(5), the Commission has evidence that the carbon market is not functioning properly, it shall submit a report to the European Parliament and to the Council. The report shall include a section dedicated to the interaction between the EU ETS and other Union and national climate and energy policies, as regards the volumes of emissions reductions, the cost effectiveness of such policies, and their impact on demand for EU ETS allowances. The report may be accompanied, if appropriate, by legislative proposals aiming at increasing transparency of the EU ETS and addressing the capacity to contribute to the Union's 2030 and 2050 climate and energy goals and addressing measures to improve its functioning, including measures to account for the impact of complementary Union-wide energy and climate policies on the supply-demand balance of the EU ETS.'
Amendment 137
Proposal for a directive
Article 1 – point 22 d (new)
Directive 2003/87/EC
Article 30 a (new)
(22d)  The following Article is inserted:
'Article 30a
Adjustments upon global stocktake under the UNFCCC and the Paris Agreement
Within six months of the facilitative dialogue under the UNFCCC in 2018 the Commission shall publish a communication assessing the consistency of the Union’s climate change legislation with the Paris Agreement goals. In particular, the communication shall examine the role and adequacy of the EU ETS in meeting the Paris Agreement goals.
Within six months of the global stocktake in 2023 and subsequent global stocktakes thereafter, the Commission shall submit a report assessing the need to adjust the Union’s climate action accordingly.
The report shall consider adjustments to the EU ETS within the context of global mitigation efforts and efforts undertaken by other major economies. In particular, the report shall assess the need for stricter emissions reductions, the need to adjust the carbon leakage provisions, and whether or not additional policy measures and tools are needed to meet the greenhouse gas commitments of the Union and Member States.
The report shall take into account the risk of carbon leakage, the competitiveness of European industries, investments within the Union and the Union’s industrialisation policy.
The report shall be accompanied by a legislative proposal, if appropriate, and in such a case the Commission shall in parallel publish a full impact assessment.'
Amendment 138
Proposal for a directive
Article 1 – point 22 e (new)
Directive 2003/87/EC
Annex I – paragraph 3
(22e)   Annex I(3) is replaced by the following:
'3. When the total rated thermal input of an installation is calculated in order to decide upon its inclusion in the Community scheme, the rated thermal inputs of all technical units which are part of it, in which fuels are combusted within the installation, are added together. These units could include all types of boilers, burners, turbines, heaters, furnaces, incinerators, calciners, kilns, ovens, dryers, engines, fuel cells, chemical looping combustion units, flares, and thermal or catalytic post-combustion units. Units with a rated thermal input under 3 MW and units which use exclusively biomass shall not be taken into account for the purposes of this calculation. “Units using exclusively biomass” includes units which use fossil fuels only during start-up or shut-down of the unit.
'3. When the total rated thermal input of an installation is calculated in order to decide upon its inclusion in the EU ETS, the rated thermal inputs of all technical units which are part of it, in which fuels are combusted within the installation, are added together. Those units could include all types of boilers, burners, turbines, heaters, furnaces, incinerators, calciners, kilns, ovens, dryers, engines, fuel cells, chemical looping combustion units, flares, and thermal or catalytic post-combustion units. Units with a rated thermal input under 3 MW, back-up and emergency units used solely to generate electricity for on-site consumption in the event of a power cut and units which use exclusively biomass shall not be taken into account for the purposes of this calculation. “Units using exclusively biomass” includes units which use fossil fuels only during start-up or shut-down of the unit.'
Amendment 139
Proposal for a directive
Article 1 a (new)
Decision (EU) 2015/1814
Article 1 – paragraph 5 – subparagraphs 1 a and 1 b (new)
Article 1a
Amendments to Decision (EU) 2015/1814
Decision (EU) 2015/1814 is amended as follows:
In Article 1(5), the following subparagraphs are added to the first subparagraph:
‘By way of derogation, up until the review period referred to in Article 3, the percentages referred to in this subparagraph shall be doubled. The review shall consider doubling the intake rate until market balance is restored.
In addition, the review shall introduce a cap on the MSR and, if appropriate, the review shall be accompanied by a legislative proposal.’

(1) The matter was referred back for interinstitutional negotiations to the committee responsible pursuant to Rule 59(4), fourth subparagraph (A8-0003/2017).


2016 Report on Albania
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European Parliament resolution of 15 February 2017 on the 2016 Commission Report on Albania (2016/2312(INI))
P8_TA(2017)0036A8-0023/2017

The European Parliament,

–  having regard to the Stabilisation and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Albania, of the other part,

–  having regard to the Presidency conclusions of the Thessaloniki European Council of 19-20 June 2003 concerning the prospect of the Western Balkan countries joining the EU,

–  having regard to the European Council decision of 26-27 June 2014 to grant the status of candidate country for EU membership to Albania and to the Council conclusions of 15 December 2015,

–  having regard to the Presidency conclusions of 13 December 2016,

–  having regard to the eighth meeting of the Stabilisation and Association Council between Albania and the EU, held in Brussels on 8 September 2016,

–  having regard to the Final Declaration by the Chair of the Paris Western Balkans Summit of 4 July 2016, and to the recommendations of the Civil Society Organisations for the Paris Summit 2016,

–  having regard to the Commission communication of 9 November 2016 entitled ‘2016 Communication on EU Enlargement Policy’ (COM(2016)0715), accompanied by the Commission staff working document entitled ‘Albania 2016 Report’ (SWD(2016)0364),

–  having regard to the Joint Conclusions of the sixth High-Level Dialogue on the Key Priorities adopted in Tirana on 30 March 2016,

–  having regard to the OSCE/ODIHR final reports concerning the 2013 parliamentary elections and the 2015 local elections,

–  having regard to the OCSE report ‘Monitoring of Administrative Trials 2015’,

–  having regard to the recommendations adopted at the 11th meeting of the EU-Albania Stabilisation and Association Parliamentary Committee (SAPC), held in Brussels on 7-8 November 2016,

–  having regard to its previous resolutions on Albania,

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on Foreign Affairs (A8-0023/2017),

A.  whereas Albania has made progress towards meeting the political criteria for membership and steady progress in the five key priorities for the opening of accession negotiations; whereas further implementation of, inter alia, the judicial reform package, electoral reform and the so-called decriminalisation law are indispensable in strengthening citizens’ trust in their public institutions and political representatives;

B.  whereas challenges still persist and need to be addressed swiftly and efficiently in a spirit of dialogue, cooperation and compromise between government and opposition, in order to ensure further progress on Albania’s path to EU accession;

C.  whereas constructive and sustainable political dialogue between political forces on EU-related reforms is essential for making further progress in the EU accession process;

D.  whereas there is a political consensus and wide public support for the EU accession process in Albania;

E.  whereas accession negotiations are a powerful incentive for adopting and implementing accession-related reforms;

F.  whereas judicial reform remains key for moving forward with Albania’s EU accession process;

G.  whereas presidential and parliamentary elections will take place in Albania in 2017;

H.  whereas the protection of religious freedom, cultural heritage, the rights of minorities and the administration of property are among the fundamental values of the European Union;

I.  whereas the EU has highlighted the need to strengthen economic governance, the rule of law and public administration capacities in all of the Western Balkan countries;

J.  whereas the Albanian authorities have a positive approach to regional cooperation to promote the development of infrastructure, measures to combat terrorism, trade and youth mobility;

1.  Welcomes Albania’s continuous progress on EU-related reforms, in particular the consensual adoption in July 2016 of constitutional amendments paving the way for a deep and comprehensive judicial reform; stresses that not only consistent adoption but also full and timely implementation of reforms on all five key priorities and sustained political commitment are essential in order to further advance the EU accession process; encourages Albania to establish a solid track record with regard to such reforms;

2.  Welcomes the Commission’s recommendation for opening accession negotiations with Albania; fully supports Albania’s accession to the EU, and calls for the accession negotiations to be opened as soon as there is credible and sustainable progress in the implementation of comprehensive judicial reform and the fight against organised crime and corruption, in order to keep the reform momentum; expects Albania to consolidate the progress achieved and to maintain the pace of progress on implementation of all key priorities;

3.  Reiterates that a constructive dialogue, sustainable political cooperation, mutual trust and a willingness to compromise are crucial for the success of the reforms and for the entire EU accession process; welcomes, in this regard, the adoption of the legislation for the exclusion of criminal offenders from public office; calls on all political parties to make further efforts to establish a genuine political dialogue and achieve constructive cooperation;

4.  Commends the consensual adoption of the constitutional amendments for judicial reform and the adoption of laws on the institutional reorganisation of the judiciary, the prosecution office and the Constitutional Court; calls for the swift adoption and credible implementation of all relevant accompanying laws and bylaws, in particular the law on the re-evaluation (vetting) of judges, prosecutors and legal advisors and the package of draft laws needed for the implementation of the reform of the justice system; notes the ruling by the Constitutional Court on the constitutionality of the vetting law following a positive opinion from the Venice Commission; reiterates that a comprehensive judicial reform is a major demand by Albania’s citizens for re-establishing trust in their political representatives and public institutions, and that the credibility and effectiveness of the overall reform process, including the fight against corruption and organised crime, depend on the success of the vetting process and the implementation of the judicial reform; recalls that adopting and implementing such a reform is instrumental in the fight against corruption, and is essential to the entrenchment of the rule of law and for enhancing the enforcement of fundamental rights in the country, also with a view to increasing trust in the judicial system among all citizens;

5.  Welcomes the new justice reform strategy for 2017-2020 and its action plan aimed at achieving greater professionalism, efficiency and independence of the judicial system, including the courts system and the re-evaluation of all members of the judiciary, as well as the increased budgetary means for implementation; regrets that the administration of justice continues to be slow and inefficient; notes the lack of progress in the filling of vacancies at the High Court and the administrative courts and the effective use of the unified case management system; calls for any shortcomings in the functioning of the judicial system to be further addressed, including lack of independence from political influence and other branches of power, selective justice, limited accountability, ineffective oversight mechanisms, corruption, and the overall length of judicial proceedings and enforcement; regrets political interference in investigations and court cases, and therefore calls for the independence of the judiciary to be strengthened in practice; calls for further engagement in the area of administrative justice, addressing issues such effective access to the courts and allocating resources to enable the courts to work efficiently; reiterates that reform of the criminal justice system should aim at holding offenders accountable and promoting their rehabilitation and reintegration, while ensuring protection of the rights of victims and witnesses of crime;

6.  Calls on the Ad Hoc Parliamentary Committee on Electoral Reform to finalise swiftly its review of the electoral code while addressing all previous OSCE/ODIHR recommendations and strengthening the transparency of party financing and the integrity of the electoral process; calls on the competent authorities to ensure implementation in due time before the upcoming parliamentary elections of June 2017, as well as the independence and depoliticisation of the electoral administration; recalls that all political parties are responsible for ensuring that democratic elections are conducted in compliance with international standards; calls on the authorities to encourage civil society organisations (CSOs) to actively participate in the overview of the whole electoral process; recalls that free and fair elections are crucial to further advancement of the EU accession process; stresses the need to address concerns related to political party financing and an accountable audit system;

7.  Calls on Albania’s political parties to respect both the spirit and the letter of the law on the exclusion of criminal offenders from public office when drawing up their candidate lists for the next elections; calls for the full implementation of this law;

8.  Encourages the Albanian authorities to take measures to facilitate the possibility for Albania citizens residing abroad to vote in Albanian elections outside the country;

9.  Welcomes the improved transparency and inclusivity of parliamentary activities, but calls for parliamentary capacities to be enhanced in order to monitor the implementation of reforms and their compliance with EU standards, and to make better use of the various oversight mechanisms and institutions in order to hold the government to account; calls for the parliamentary code of ethics to be approved and for the rules of procedure to reflect the law on the role of parliament in the EU integration process; offers to explore means of closer cooperation with the Parliament of Albania within the framework of the European Parliament support programme for parliaments of the enlargement countries, in order to enhance its capacity to produce quality legislation in line with the EU acquis and exercise its oversight role in the implementation of reforms;

10.  Notes the efforts towards a more citizen-friendly public administration and steady progress in the implementation of public administration reform and the public financial management reform; calls for further progress in strengthening the application of the Civil Service Law and the Code of Administrative Procedure, in order to improve recruitment and promotion procedures on the basis of merit and performance, and enhance institutional and human resource capacities, with a view to consolidating the achievements made towards ensuring a more efficient, depoliticised, transparent and professional public administration, which would also enable the efficient conduct of EU accession negotiations; calls for enhancing the authority, autonomy, efficiency and resources of human rights structures, including the office of the Ombudsman; commends the National Council for European Integration on its initiatives to enhance the capacities of the public administration and civil society in monitoring the implementation of accession-related reforms; stresses the need to safeguard the independence of regulatory and oversight bodies;

11.  Takes note of the implementation of the territorial reform; stresses that substantial efforts are needed to increase the financial and administrative capacity of the newly created local government units;

12.  Welcomes the adoption of key pieces of anti-corruption legislation, including on the protection of whistleblowers; continues to be concerned, however, that corruption remains high and prevalent in many areas and continues to pose a serious problem, eroding people’s trust in public institutions; is concerned that key anti-corruption institutions continue to be subject to political interference and have limited administrative capacities; notes that poor interinstitutional cooperation and exchange of information continue to hamper proactive investigation and the effective prosecution of corruption; stresses the need for a more adequate legal framework for conflicts of interest, the regulation of lobbying and better interinstitutional cooperation, especially between police and prosecution services, in order to improve the track record on investigation, prosecution and conviction, including in high-level cases;

13.  Welcomes the continued implementation of the strategy and action plan on the fight against organised crime and intensified international police cooperation; calls also for organised crime networks to be dismantled and for the number of final convictions in organised crime cases to be increased, by enhancing cooperation between international organisations, police and prosecution services and by strengthening institutional and operational capacities; is concerned that the track record of freezing and confiscating illegally acquired assets remains very low, and calls for an increase in capacity and greater use of financial investigations to improve the track record in these areas; notes that despite an upward trend in investigating cases involving money laundering the number of final convictions remain limited;

14.  Calls, while welcoming the recent operations against cannabis plantations, for the stepping-up measures to eradicate drug cultivation, production and trafficking in Albania and related networks of organised crime, including by strengthening international and regional cooperation; notes, however, that police and prosecutors fail to identify the criminal networks behind drug cultivation;

15.  Calls for intensified efforts to tackle uncontrolled proliferation of illicit trafficking in arms, including by stepping up cooperation with the EU to that effect, as well as by destroying the remaining stockpile of small arms and light weapons and improving the condition of storage facilities; is concerned at the very high rate of firearm killings in Albania;

16.  Calls for the strengthening of the government’s capacity to search, seize and confiscate the proceeds of cybercrime and prevent money laundering on the internet;

17.  Encourages Albania to further improve its legal framework for determining international protection status for refugees; commends the efforts of the Albanian police to step up information sharing with Frontex, and calls for a further strengthening of cooperation between the EU and Albania in order to protect refugees’ rights in line with international standards and EU fundamental values; expresses its concern at the recent rise in cases of human trafficking; calls for the stepping-up of efforts to prevent human trafficking, paying particular attention to the main victims of such trafficking, notably unaccompanied minors, women and girls;

18.  Expresses its concern about the excessively large prison population and (reports of) the inadequacy of medical care in places of detention, as well as the maltreatment of suspects at police stations; recommends revision of the punitive approach, reclassification of criminal offences and greater resort to alternatives to imprisonment;

19.  Notes the improving EU-related cooperation between state institutions and CSOs, including the participation of CSOs in meetings of the National Council on European Integration (NCEI); notes that an empowered civil society is a crucial component of any democratic system; stresses, therefore, the need for even closer coordination at all levels of government, including at local level, with CSOs; welcomes in this regard the establishment of the National Council for Civil Society (NCCS); calls for the effective implementation of the right to information and public consultation and for better regulation of the fiscal framework affecting CSOs;

20.  Recalls, among the key priorities, the need to reinforce the protection of human rights, minority rights and anti-discrimination policies, including by strengthening their enforcement; urges the competent authorities to continue improving the climate of inclusion and tolerance for all minorities in the country in line with European minority protection standards, including by enhancing the role of the State Committee on Minorities; welcomes the initial steps aimed at improving the legal framework for the protection of minorities, and calls on Albania to adopt the framework law on the protection of minorities and to ratify the European Charter for Regional and Minority Languages; notes the broad consultation process involving independent institutions, minorities associations and civil society; underlines the need to improve living conditions for Roma, Egyptians and other ethnic minorities; calls for concrete actions such as the civic registration (birth certificates and IDs) of Roma and Egyptians, calls for continued efforts in improving their access to employment and all public and social services, education, health, social housing and legal aid; is concerned that, despite improvements, the inclusion of Roma children in the education system remains the lowest in the region;

21.  Commends the efforts of the Ombudsman’s office to improve the human rights legislation, especially in the framework of the reform of the judiciary; welcomes active promotion of the rights of vulnerable groups and the principles of human dignity, freedom, equality and the rule of law; regrets that the work of the Ombudsman’s office continued to be limited by lack of funding and personnel at his central and local offices; calls for enhancement of the authority, autonomy, efficiency and resources of his office;

22.  Continues to be concerned about discrimination against and lack of appropriate measures for the protection of women and girls belonging to disadvantaged and marginalised groups, as well as the high number of cases of domestic violence against women and girls; stresses the need for additional efforts in order to develop a track record of anti-discrimination cases; calls on the competent authorities to continue with awareness-raising and prevention regarding domestic violence, and to improve support for its victims; reiterates its call for the full implementation of the Council of Europe Convention on preventing and combating violence against women and domestic violence (the Istanbul Convention); urges the authorities to tackle gender-based stereotypical preconceptions through systematic education, public debate and government measures;

23.  Calls for better institutional mechanisms to protect the rights of the child and to prevent child labour;

24.  Notes that further efforts are needed to protect the rights of all minorities in Albania, through the full implementation of the relevant legislation; recommends that the rights of people with Bulgarian ethnicity in the Prespa, Golo Brdo and Gora regions be enshrined in law and ensured in practice;

25.  Welcomes the improvement of the protection of the rights of LGBTI people and the adoption of the National Action Plan for LGBTI people 2016-2020, and encourages the government to continue to further implement measures of the programme and further consolidate the government’s cooperation with LGBTI civil society organisations; encourages, furthermore, the government and lawmakers to ensure that gender recognition conditions will meet the standards set in Recommendation CM/Rec(2010)5 by the Committee of Ministers of the Council of Europe to member states on measures to combat discrimination on grounds of sexual orientation or gender identity;

26.  Regrets that the competent authorities have so far failed to conduct an effective criminal investigation into the loss of life in the demonstration of 21 January 2011; invites the authorities to proceed without undue delay to deliver justice for the victims of the events of that day;

27.  Commends religious tolerance and good cooperation among religious communities; encourages the competent authorities and religious communities to cooperate in preserving and fostering religious harmony in line with the Constitution; considers it essential to prevent Islamic radicalisation through a targeted approach by intelligence services, law enforcement authorities and judicial institutions, including through the disengagement and reintegration of returning foreign fighters, to counter violent extremism in cooperation with CSOs and religious communities, and to intensify regional and international cooperation in this area; commends the country’s comprehensive legal framework for the prevention and fight against the financing of terrorism; urges that all measures should ensure in all circumstances respect for human rights and fundamental freedoms according to international standards; stresses the importance of special education programmes for the prevention of radicalisation, as well as for the rehabilitation and social reintegration of the individuals concerned;

28.  Regrets that limited progress was made in the area of freedom of the media last year; reiterates the critical importance of professional and independent private and public service media; is concerned about political influence in the media and widespread self-censorship among journalists; notes the slow implementation of the law on audiovisual media and the delays in filling vacancies in the Audiovisual Media Authority (AMA); calls for measures to raise the professional and ethical standards of and prevalence of regular work contracts for journalists, to enhance the transparency of government advertising in the media, and to ensure the independence, impartiality and accountability of the regulatory authority and the public broadcaster, especially with a view to the upcoming parliamentary elections; reiterates the need to finalise and adopt the internal statutes of the public service broadcaster RTSH and to finalise the digital broadcasting switchover process;

29.  Welcomes the improvements in fiscal consolidation and the higher scores as regards doing business and efforts to fight the informal economy; notes, however, that continuing shortcomings in the rule of law and a cumbersome regulatory environment deter investment; is concerned that migrant remittances constitute an important driver of domestic demand; urges the competent authorities to take measures for improved enforcement of contracts and better tax collection, and to continue implementing the judicial reform in order to improve the business environment; is concerned at the high levels of direct procurement and non-competitive bidding and the awarding of long- term outsourcing and PPP contracts having a questionable impact with regard to the public interest;

30.  Recommends the authorities to speed up the construction of major infrastructure projects such as the rail link and modern highway between Tirana and Skopje as part of Corridor VIII;

31.  Notes with concern the limited nature of the administrative capacities for enforcement of environmental law, as well as the poor waste management and water management, often resulting in environmental crime that threatens Albania’s economic resources and constitutes a barrier to a resource-efficient economy; underlines the need to improve the quality of environmental impact assessments, as well as to guarantee public participation and consultation of civil society in relevant projects; stresses the crucial importance of meeting climate change objectives without negatively impacting on biodiversity, the landscape, water resources, flora and fauna, and affected local populations; is deeply concerned about the fact that, according to the Commission, 44 of 71 hydropower plant projects are under construction in protected areas;

32.  Highlights that the environmental impact of hydropower plants is often not properly assessed to ensure compliance with international standards and relevant EU nature legislation; advises the government to consider the establishment of a Vjosa National Park along the whole length of the river and to abandon plans for new hydropower plants along the Vjosa river and its tributaries; urges further alignment with EU legislation in the field of energy, particularly on the adoption of a national energy strategy, in order to increase energy independence and efficiency; welcomes the 2015-2020 national action plan for renewable energy sources (RESs);

33.  Notes that the enforcement of property rights has still to be effectively ensured; urges action to complete the process of property registration, restitution and compensation and update and effectively implement the 2012-2020 strategy on property rights; further urges the authorities to develop a roadmap setting out clear responsibilities and deadlines in this regard, and to conduct a public information campaign in order to inform former owners about their rights and duties concerning property restitution; calls for greater transparency, legal certainty and equality of treatment as regards the law on compensation for property confiscated during the communist period; calls for the appointment of a national coordinator for property rights and for acceleration of the process of property registration and mapping, including property digitalisation;

34.  Stresses the importance of research in the process of revealing crimes committed by the former communist regime, as well as the moral, political and legal responsibility of the state institutions in this process; calls on the authorities to draw up suitable legislative measures to help the rehabilitation of victims, including the compensation of individuals and their families, and to revoke all politically motivated court decisions that are still in force; urges the state institutions to investigate and bring to justice the perpetrators of crimes against humanity under the communist dictatorship;

35.  Notes that addressing the communist past is of key importance in terms of confronting human rights abuses and obtaining truth and justice for victims; welcomes the law establishing an authority for the opening of the Sigurimi records; welcomes the survey published by the OSCE Presence and the German Embassy on knowledge and public perceptions of the communist past in Albania and future expectations; considers that these efforts will help create dialogue about the past and build expectations for the future;

36.  Emphasises the importance of strengthening social dialogue, the involvement of CSOs, the capacities of social partners, and enforcement mechanisms for social rights; urges the government to modernise the education system with a view to building a more inclusive society, reducing inequalities and discrimination and better equipping young people with skills and knowledge; emphasises the importance of support under the Instrument for Pre-Accession Assistance (IPA) for education, employment and social policies;

37.  Calls on the Albanian authorities to strengthen their policies towards people with disabilities, who continue to face difficulties in accessing education, employment, healthcare, social services and decision-making, including obstacles preventing them from freely exercising the right to vote;

38.  Notes with concern that the number of asylum applications lodged by Albanians in EU Member States that have been deemed unfounded has increased again; urges the government to take immediate and determined action to address this phenomenon and to intensify awareness-raising, socio-economic support and prevention efforts in this regard, as well as to address push factors linked to unemployment and structural shortcomings in social protection, education and health policies; stresses the need to provide sufficient human resources to the Directorate-General for Borders and Migration and the Border Police, as well as to improve relevant interinstitutional cooperation in order to better counter irregular migration;

39.  Commends Albania on its continued full alignment with relevant EU declarations and Council conclusions, thereby demonstrating its clear commitment to European integration and solidarity; stresses the importance and necessity of the continued constructive contribution of Albania to political stability in the region;

40.  Welcomes the decision by the Albanian authorities to align the country’s foreign policy with Council Decision (CFSP) 2016/1671, renewing the restrictive EU measures against Russia;

41.  Underlines the importance of ensuring good neighbourly relations, which remain essential as an integral part of the enlargement process as well as of the Stabilisation and Association Process conditionality; welcomes Albania’s constructive and proactive role in promoting regional cooperation and good neighbourly relations with other enlargement countries and neighbouring EU Member States; welcomes the participation of Albania in the Western Balkans Six initiative;

42.  Commends both Albania and Serbia on their continued commitment to improving bilateral relations and strengthening regional cooperation at political and societal level, for example through the Regional Youth Cooperation Office (RYCO) headquartered in Tirana; encourages both countries to continue their good cooperation in order to promote reconciliation in the region, particularly through programmes for young people, such as those available in the framework of the Positive Agenda for the Youth in the Western Balkans;

43.  Notes the recent frictions in relations between Albania and Greece, and recommends that both sides abstain from actions or statements that could have a negative impact on relations;

44.  Reiterates its request that the Commission include in its reports information on IPA support for Albania and the effectiveness of the measures implemented, in particular the IPA support allocated for implementation of the key priorities and relevant projects;

45.  Instructs its President to forward this resolution to the Council, the Commission and the Government and Parliament of Albania.


2016 Report on Bosnia and Herzegovina
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European Parliament resolution of 15 February 2017 on the 2016 Commission Report on Bosnia and Herzegovina (2016/2313(INI))
P8_TA(2017)0037A8-0026/2017

The European Parliament,

–  having regard to the Stabilisation and Association Agreement (SAA) between the European Communities and their Member States, of the one part, and Bosnia and Herzegovina (BiH), of the other part,

–  having regard to the Protocol on the Adaptation of the SAA between the European Communities and its Member States, on the one part, and BiH, on the other part, to take into account the accession of the Republic of Croatia to the European Union, which was initialled on 18 July 2016, and signed on 15 December 2016,

–  having regard to BiH’s application for membership of the European Union on 15 February 2016,

–  having regard to the European Council conclusions of 19-20 June 2003 on the Western Balkans and to the annex thereto entitled ‘The Thessaloniki Agenda for the Western Balkans: moving towards European integration’,

–  having regard to the Council conclusions of 20 September 2016 on the application of BiH for membership of the EU,

–  having regard to the EU Presidency conclusions of 13 December 2016,

–  having regard to the first meeting of the EU-BiH Stabilisation and Association Parliamentary Committee (SAPC) held in Sarajevo on 5-6 November 2015 and the first meetings of the Stabilisation and Association Council (SAC) and the Stabilisation and Association Committee between BiH and the EU held on 11 and 17 December 2015 respectively,

–  having regard to the Final Declaration by the Chair of the Paris Western Balkans Summit of 4 July 2016 and to the Recommendations of the Civil Society Organisations for the Paris Summit 2016,

–  having regard to the joint statement of 1 August 2016 by the Vice-President/High Representative (VP/HR) and the Commissioner for European Neighbourhood Policy and Enlargement Negotiations on Bosnia and Herzegovina’s authorities’ agreement on key measures on the country’s EU path,

–  having regard to the joint statement of 17 September 2016 by the VP/HR and the Commissioner for European Neighbourhood Policy and Enlargement Negotiations following the decision of the BiH Constitutional Court regarding the Republika Srpska (RS) day,

–  having regard to the Commission Communication of 9 November 2016 entitled ‘2016 Communication on EU Enlargement Policy’ (COM(2016)0715), accompanied by the Commission Staff Working Document entitled ‘Bosnia and Herzegovina 2016 Report’ (SWD(2016)0365),

–  having regard to the Special Report of the European Court of Auditors entitled ‘EU pre-accession assistance for strengthening administrative capacity in the Western Balkans: A meta-audit’(1),

–  having regard to the Fiftieth Report to the UN Security Council of the High Representative for Implementation of the Peace Agreement on Bosnia and Herzegovina(2),

–  having regard to the Statement from November 2016 on behalf of the European Union and its Member States by H.E. Mr. João Vale de Almeida, Head of the Delegation of the European Union to the United Nations, at the Security Council Debate on ‘The situation in Bosnia and Herzegovina’,

–  having regard to the Reform Agenda for BiH 2015-2018 adopted in July 2015 and to the Coordination Mechanism adopted by the Council of Ministers of BiH and the governments of the Federation of BiH and the RS on 23 August 2016,

–  having regard to its previous resolutions on the country,

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on Foreign Affairs (A8-0026/2017),

A.  whereas the EU remains committed to BiH’s EU perspective, to its territorial integrity, sovereignty and unity; whereas progress has been achieved on the EU integration path; whereas the Council asked the Commission to prepare its opinion on BiH’s application for membership;

B.  whereas on 9 December 2016, in Sarajevo, the Commissioner for European Neighbourhood Policy and Enlargement Negotiations delivered the questionnaire to the BiH authorities;

C.  whereas the suspension of the Autonomous Trade Measures will be lifted once the Protocol on the Adaptation of the SAA has been signed and provisionally applied;

D.  whereas, with the Reform Agenda for BiH 2013-2018, the authorities at all levels recognised the urgent need to initiate a process of rehabilitating and modernising the economy with a view to creating new jobs and fostering sustainable, efficient, socially just and steady economic growth; whereas BiH has demonstrated commitment and readiness to embark on further socio-economic reforms necessary to reduce youth unemployment, which is still at far too high a rate;

E.  whereas an independent, functional and stable judiciary is important in guaranteeing the rule of law and progress on the path to EU accession;

F.  whereas challenges remain in relation to the sustainability of the reconciliation process; whereas progress in the EU accession process will facilitate further reconciliation;

G.  whereas BiH has still not implemented the rulings of the European Court of Human Rights (ECHR) in the Sejdić-Finci, Zornić and Pilav cases;

H.  whereas corruption, including at the highest level, continues to be widespread;

I.  whereas there are still 74 000 internally displaced persons and a significant number of refugees from BiH in neighbouring countries, across the whole of Europe and worldwide, as well as 6 808 missing persons;

J.  whereas education is essential to creating and promoting a tolerant and inclusive society as well as fostering cultural, religious and ethnic understanding in the country;

K.  whereas BiH is a signatory to the Convention on Environmental Impact Assessment in a Transboundary Context (Espoo, 1991);

L.  whereas (potential) candidate countries are judged on their own merits, and whereas the speed and quality of the necessary reforms determines the timetable for accession;

1.  Welcomes the consideration of BiH’s EU membership application by the Council and the handing in of the questionnaire and looks forward to the Commission’s opinion on the merits of the application for membership; calls on competent BiH authorities at all levels to commit actively to this process and to cooperate and coordinate in participating in the Commission’s Opinion process by providing a single and coherent set of replies to the Commission’s inquiries; points out that this exercise will also serve as a proof of state functionality; reiterates that the EU accession process is inclusive and involves all stakeholders;

2.  Appreciates and welcomes the role of the tripartite Presidency as playing an important role in creating the incentive for all other institutional actors on all levels to engage in efforts to fulfil their respective roles in the overall process of the country’s approximation to the EU;

3.  Welcomes the progress made on the implementation of the 2015-2018 Reform Agenda, as well as the country’s determination to pursue further institutional and socio-economic reforms; recalls that the renewed EU approach towards BiH has been triggered by the difficult socio-economic situation and the increasing dissatisfaction among citizens; notes that the situation has somewhat improved, but stresses that harmonised and effective implementation of the Reform Agenda in line with the action plan is needed to achieve real change across the country and make tangible improvements to the lives of all BiH citizens;

4.  Calls for the momentum of the reform to be maintained in order to transform BiH into a fully effective, inclusive and functional state based on the rule of law, guaranteeing equality and democratic representation of all its constituent peoples and citizens; regrets that common reform efforts often continue to be hampered by ethnic and political divisions, caused by deeply‑rooted disintegrative tendencies hindering normal democratic development, and through the further politicisation of public administrations; stresses also that BiH will not be a successful candidate for EU membership until the appropriate institutional conditions have been established; urges all political leaders to work on introducing the necessary changes, including the reform of electoral law, also taking into account the principles expressed in its previous resolutions, including the principles of federalism, decentralisation and legitimate representation, so as to guarantee that all citizens can stand as candidates, be eligible to be elected, and serve at all political levels, on equal grounds; considers it essential to maintain consensus on EU integration and to make progress in a concerted manner on the rule of law, including the fight against corruption and organised crime, the reform of the judiciary and public administration; highlights equally the need for a continued and effective focus on social and economic reforms, which should remain a priority;

5.  Welcomes the agreement on setting up a coordination mechanism for EU matters aimed at improving functionality and efficiency in the accession process, including in relation to EU financial assistance, and enabling better interaction with the EU; calls for its swift implementation; calls, moreover, for effective cooperation and communication between all levels of government and with the EU in order to facilitate the alignment and implementation of the acquis, and to provide satisfactory replies to the Commission’s inquiries throughout the Opinion process; deems it unacceptable that the Government of the RS is trying to establish parallel channels of communication by adopting provisions on direct reporting to the Commission; calls for the role and capacities of the Directorate for European Integration to be further enhanced with a view to assuming its coordinating functions in full within the implementation of the SAA and, overall, in the accession process;

6.  Expresses satisfaction about the signature of the Protocol on SAA adaptation that has been provisionally applied as of 1 February 2017, automatically reinstating the autonomous trade measures that had been suspended as of 1 January 2016; looks forward to a rapid and smooth ratification of the Protocol;

7.  Regrets that the Rules of Procedure (RoP) of the SAPC have still not been adopted, due to the attempts to introduce ethnic blocking into the SAPC’s RoP, as a consequence of which BiH has remained the only enlargement country where such a body could not be properly constituted; urges the presiding bodies of the BiH Parliament to find, without delay, a solution in order to meet the requirements of the EU’s institutional and legal framework and to provide meaningful parliamentary oversight of the accession process; recalls that the SAA requires the adoption of the RoP and failure to do so is in direct breach of SAA implementation;

8.  Welcomes some improvements of electoral legislation in line with OSCE-ODIHR recommendations; notes that the local elections of 2 October 2016 have been conducted broadly in an orderly manner; regrets that after six years, the citizens of Mostar still cannot exercise their democratic rights to elect their local representatives owing to continued disagreements between political leaders; urges the swift implementation of the Constitutional Court ruling on Mostar by amending electoral legislation and the city’s Statute; strongly condemns the unacceptable violence against electoral officials in Stolac and calls on the competent authorities to resolve the situation by respecting the rule of law, including the investigation of all acts of violence and electoral irregularities as well as the prosecution of the perpetrators; notes the annulment of elections in Stolac by the BiH Central Electoral Commission and calls for re-elections to be conducted under democratic standards, in a peaceful manner and an atmosphere of tolerance;

9.  Regrets that the declared political commitment to combat corruption did not translate into tangible results; underlines that there is no track record of high‑profile cases and that the legal and institutional framework for combating systemic corruption such as in relation to political party finance, public procurement, conflicts of interest, and assets declaration is weak and inadequate; acknowledges progress in adopting anti-corruption action plans and setting up corruption prevention bodies at various levels of governance and calls for the consistent and swift implementation of these decisions; notes with concern that fragmentation and weak inter-agency cooperation hamper the effectiveness of anti-corruption measures; calls for greater professional specialisation within the police and the judiciary by means of appropriate coordination channels; stresses the need to establish a track record of effective scrutiny of political party and electoral campaign financing, to develop transparent employment procedures in the broader public sector, as well as to eliminate corruption in the public procurement cycle;

10.  Stresses that the results of the 2013 census are an important basis for providing an adequate response to the Commission questionnaire and are essential for effective socio-economic planning; welcomes the final assessment made by the International Monitoring Operation concluding that the census in BiH was as a whole conducted in compliance with international standards; regrets that the RS refused to acknowledge the census results as legitimate, and that the RS authorities published their own results, different to those confirmed by the BiH Agency for Statistics; urges the RS authorities to reconsider their approach; calls on the BiH statistical agencies to make significant progress in this crucial field and to align their statistics and methodologies with Eurostat standards;

11.  Recalls that a professional, effective and merit-based public administration is the backbone of the integration process for any country that aspires to become an EU member; is concerned about the continued fragmentation and politicisation of public administration, which hampers institutional and legislative reforms and makes the delivery of public services to citizens cumbersome and expensive; calls, as a matter of urgency, for a more harmonised approach to policy development and coordination between all levels of government, the depolitisation of public administration and of the public sector, better medium-term planning and for a clear strategy on public financial management;

12.  Reiterates its concern about the continued fragmentation into four different legal systems; stresses the need to address swiftly any outstanding shortcomings of the judiciary, to strengthen judicial efficiency and independence, including through the depolitisation of the judiciary, to fight corruption in the judiciary and to implement adequate procedures for the execution of court decisions; urges the rapid adoption of the action plan for the implementation of the 2014-2018 justice sector reform; calls for full implementation of the laws on the protection of children and effective access to justice for children; welcomes the adoption of the law on free legal aid at state level and the introduction by the High Judicial and Prosecutorial Council of guidelines on the prevention of conflicts of interest, the drafting of integrity plans and disciplinary measures;

13.  Calls for the overall efficiency of the judiciary to be enhanced, the transparency and objectivity of the process of selecting new judges and prosecutors to be increased, as well for the accountability and integrity mechanisms in the judiciary to be strengthened; underlines the need to reinforce mechanisms for the prevention of conflicts of interests and for establishing mechanisms for the transparency of financial reports and asset declarations in the judiciary; notes the important role of the Structured Dialogue on Justice in addressing the shortcomings in the BiH judiciary; calls for a legislative solution which would allow for tracking the efficiency of the handling of cases throughout the territory of BiH;

14.  Regrets that a high number of constitutional court decisions are not being implemented, including the decision concerning the respect of the basic democratic rights of the citizens of Mostar to vote in local elections; calls for prompt implementation of all these decisions; highlights, in particular, the constitutional court decision on the RS day, which was contested in the referendum held on 25 September 2016; considers this as a serious violation of the Dayton Peace Agreement and an attack on the judiciary and the rule of law; stresses the need for dialogue rather than unilateral initiatives; emphasises that nationalistic and populist rhetoric and actions are serious obstacles for development and that respect for the rule of law and the country’s constitutional framework is of paramount importance in advancing on the EU path and in order to preserve peace and stability in BiH;

15.  Strongly condemns the Law on Order in RS which is still in force and undermines the fundamental democratic rights of the freedom of assembly, freedom of association and freedom of the media, as well as the provision on the death penalty in the RS; urges the full implementation of the Freedom of Access to Information Act; urges the authorities to swiftly implement the Additional Protocol to the Council of Europe Convention on Cybercrime, concerning the criminalisation of acts of a racist and xenophobic nature committed through computer systems;

16.  Urges leaders on all sides to refrain from divisive, nationalist and secessionist rhetoric that polarises society as well as from actions that represent a challenge to the cohesion, sovereignty and integrity of the country; urges instead that they engage seriously in reforms that will improve the socio-economic situation of all BiH citizens, create a democratic, inclusive and functioning state and move the country closer towards the EU;

17.  Emphasises the importance of the recent decision of the Constitutional Court on the principle of constituent status and the equality of its three constitutive peoples to elect their own legitimate political representatives based on legitimate and proportional representation in the House of People of the Parliament of the Federation of Bosnia and Herzegovina;

18.  Notes satisfactory cooperation on war crimes cases with the International Criminal Tribunal for the former Yugoslavia (ICTY) and encourages more regional cooperation with regard to processing war crimes cases; expresses concern that different legal standards are applied when processing war crimes cases; welcomes the fact that the backlog of domestic war crimes cases is being tackled and that some further progress has been achieved in the successful prosecution of war crimes involving sexual violence; welcomes the agreement between the EU Delegation and the BiH Ministry of Finance and Treasury to finance the activities of the prosecutors’ offices and the courts in BiH in relation to the processing of war crimes;

19.  Strongly condemns the decision of the RS National Assembly in October 2016 to express appreciation to former leaders of the RS convicted of war crimes; calls, as a matter of urgency, for respect for the victims of war crimes and for reconciliation to be promoted; reminds all political leaders and institutions in BiH of their responsibility to assess war-time events objectively, in the interests of truth and reconciliation, and to avoid misuse of the judiciary for political purposes;

20.  Commends the progress made in relation to the prosecution of war crimes involving sexual violence and urges the competent authorities to enhance further access to justice for victims of conflict-related sexual violence, including by making available free legal aid, strengthening psychosocial and health services, as well as better compensation and follow-up; calls for guarantees that the rights to reparation of such victims are recognised in a consistent manner;

21.  Notes some progress with regard to refugees and internally displaced persons, who were displaced as a result of the Bosnian war, in terms of the repossession of property and occupancy rights as well as the reconstruction of houses; calls on the competent authorities to facilitate their sustainable return, access to healthcare, employment, social protection and education and to devote further attention to compensation for damage to property which cannot be returned;

22.  Is concerned about the persistently high number of persons missing as a result of the war; calls on the competent authorities to address more forcefully the issue of their unresolved fate, including by intensifying cooperation between the two entities; stresses that solving this issue is of paramount importance for reconciliation and stability in the region;

23.  Expresses its concern about the state of the health system in BiH, one of the systems most subject to corruption in the country; calls on the authorities to be vigilant in preventing discrimination in access to medical care;

24.  Notes some progress in fighting organised crime; is concerned, however, about the absence of a consistent approach in tackling organised crime owing to the numerous action plans by the various law enforcement agencies at different levels; highlights the need to strengthen further the framework for inter-agency cooperation; welcomes joint investigations, but calls for more coordinated operations and a better exchange of information; calls for the enhancement of the capacities of law enforcement bodies, including on counter-terrorism; calls on the competent authorities to take measures to combat the financing of terrorism and money laundering and to enhance the capacity for conducting financial investigations; welcomes the signing of the operational and strategic cooperation agreement with Europol aimed at combating cross-border criminality by, inter alia, exchanging information and jointly planning operational activities; encourages the conclusion of a cooperation agreement with Eurojust as well;

25.  Underlines the need to improve the fight against human trafficking; calls on the Federation entity to make swift changes to the criminal code that would ban all forms of human trafficking, 80 % of whose victims are women and girls;

26.  Calls for the strengthening of mechanisms for collecting, sharing and analysing data on migration as statistics show an increasing trend of people coming to BiH from the high-migratory-risk countries; calls on the competent authorities to process all refugees and migrants applying for asylum or transiting through its territory in accordance with international and EU law as well as to develop further the regulatory framework on migration and asylum, to enhance inter-institutional coordination and to build the necessary capacities; calls on the Commission to continue work on migration‑related issues with all countries of the Western Balkans in order to make sure that European and international norms and standards are observed;

27.  Points out that the polarisation of the country, in combination with the deterioration of the socio-economic situation, especially for young people, increases the danger of spreading radicalism; calls, as a matter of urgency, for the boosting of efforts to combat radicalisation and further measures to identify, prevent and disrupt the flow of foreign fighters as well as channels of untraceable money intended for further radicalisation, including through close cooperation with the relevant services of the Member States and countries in the region, as well as by enforcing the relevant laws; calls for better coordination between security and intelligence services and the police; encourages the decisive resolution and sanctioning of cases of hate speech and transmitting extremist ideologies through the social media; calls for the swift introduction of programmes on deradicalisation and preventing youth radicalisation in cooperation with civil society through comprehensive human rights education in order to help deconstruct narratives on radicalisation and to build social cohesion amongst children and youth; encourages, in this respect, greater youth participation in the democratic political process; urges the competent authorities to combat religious extremism; notes with concern the existence of radicalised communities across the country and highlights the important role of religious leaders, teachers and overall of the education system in this respect; stresses further the need to provide tools for reintegration and rehabilitation into society and the upgrading and enhancement of deradicalisation tools;

28.  Notes the active engagement of the Joint Parliamentary Committee for Security and Defence in ensuring democratic control over the armed forces of BiH; notes with concern the large stockpiles of unregistered firearms and ammunition held illegally by the population and urges the total eradication of these weapons; is equally concerned by the presence of inadequately stored, large stockpiles of ammunition and weapons under the responsibility of the armed forces; underscores the importance of tackling arms trafficking and calls for the strengthening of cooperation between the EU and BiH to this effect; urges a comprehensive approach to address the remaining challenges of clearing the country of mines by 2019;

29.  Deems it essential to enhance public participation in decision-making and to engage citizens, including young people, more effectively in the EU accession process; reiterates its calls for transparent and inclusive public consultation mechanisms with civil society organisations (CSOs) to be implemented at all levels of government as well as to introduce transparent and non-discriminatory procedures for allocating public funding to CSOs; notes that civil society is fragmented, institutionally and financially weak, which has an impact on its sustainability and independence; calls for further EU support, better cooperation mechanisms between government and CSOs, including the development of a strategic framework for cooperation, as well as more concrete involvement of civil CSOs in the EU accession process; condemns repeated smear campaigns and violent attacks on CSO representatives and human rights defenders;

30.  Underlines the need for a substantial improvement in the strategic, legal, institutional and policy frameworks on the observance of human rights; calls for the adoption of a countrywide strategy on human rights and non-discrimination and for further measures to ensure the effective implementation of the international human rights instruments signed and ratified by BiH; calls for the swift adoption of the law on the reform of the BiH Ombudsman; calls for adherence to the recommendations of the International Coordinating Committee and Venice Commission when adopting it; is concerned that the Ombudsman’s Office is not functioning properly, mainly due to a lack of adequate human resources and serious financial constraints; calls on BiH authorities at federal level and in the RS to facilitate the work of the Human Rights Ombudsman;

31.  Is concerned about continued discrimination against persons with disabilities in the fields of employment, education and access to health care; calls for the adoption of a single national action plan on the rights of persons with disabilities; calls for the development of a comprehensive and integrated strategy on the social inclusion and representation of the Roma community; calls for better targeting of social assistance in order to reach the most vulnerable populations; welcomes the fact that some governments and parliaments have begun discussing LGBTI rights and drawing up specific measures for their protection; calls for the safety and right of assembly of LGBTI groups to be guaranteed; welcomes changes to the BiH anti-discrimination law extending the listed grounds for discrimination to include age, disability, sexual orientation and gender identity; calls for its proper enforcement; welcomes the introduction of the prohibition of hate crimes in amendments to the Criminal Code of the Federation of BiH; encourages the inclusion of courses on hate crimes into the curricula and training programmes of police officers, prosecutors and judges and calls for improved cooperation between police and judicial bodies in prosecuting hate crime cases; urges again the repeal of the provision on the death penalty in the RS entity’s Constitution;

32.  Calls for efforts to strengthen further child protection systems in order to prevent and address violence against and the abuse, neglect and exploitation of children; recommends an increased allocation of resources for prevention and the further enhancement of community-government coordination in protecting children; calls for the implementation of the BiH Action Plan on Children 2015-18;

33.  Notes that the legal framework for the protection of minorities is largely in place and in line with the Council of Europe Framework Convention for the Protection of National Minorities; welcomes the reactivation of the Federation entity Council of National Minorities in BiH; is concerned that due to a continued lack of coordination between the state and the entities, existing laws are not being implemented and the state-level strategic platform on national minorities has not yet been adopted; regrets that national minorities continue to have a low presence and participation in political and public debates and in the media;

34.  Calls for further efforts to promote gender equality and increase the participation of women in political and public life and employment, to improve their socio-economic situation and to strengthen women’s rights on the whole; notes that legal provisions instituting equality between women and men are broadly in place, but that their implementation continues to be ineffective; notes with concern that there is still maternity-related discrimination in employment and that entities and cantons have no harmonised legislation on maternity and parental leave; highlights, furthermore, that the existing active labour market measures aimed at supporting the employment of the long-term unemployed and vulnerable groups, such as persons with disabilities, are not being effectively implemented; underlines the importance of enhancing the completion rate of primary and secondary schools by girls, particularly from the Roma community;

35.  Highlights the importance of the effective implementation of the legislation on the prevention of and protection from gender-based violence in accordance with the international conventions dealing with the prevention of and protection from domestic violence that BiH has signed and ratified; welcomes the commitment of the competent authorities to implement the Istanbul Convention of the Council of Europe on preventing and combating violence against women and domestic violence; calls for the harmonisation of legislation and public policies with this convention; calls for women survivors of violence to be informed about the available forms of support and assistance, the establishment of crisis centres for victims of rape or other forms of sexual violence; is concerned about the absence of systematic recording of gender-based violence;

36.  Deplores the fact that BiH is still in breach of the European Convention on Human Rights through not implementing the rulings of the European Court of Human Rights (ECHR) in the Sejdić-Finci, Zornić and Pilav cases; calls firmly and as a matter of urgency, for progress to be made in this regard in order to advance the country’s EU perspective; stresses that the implementation of these rulings would contribute to the establishment of a democratic and well-functioning society in which equal rights for all are guaranteed; reiterates that failing to implement these rulings permits the overt discrimination of citizens in BiH and is incompatible with EU values;

37.  Is concerned about cases of political pressure and the intimidation of journalists, including physical and verbal attacks, also those perpetrated by high-level officials or former officials, as well as about the lack of transparency in media ownership; is also concerned about the use of civil libel suits against critical media outlets and journalists; emphasises the need to investigate attacks against journalists and ensure proper judicial follow-up; calls on the authorities to condemn unequivocally all attacks against journalists and media outlets and to ensure that such cases are fully investigated and those responsible brought to justice; calls for further measures necessary to guarantee full respect of the freedom of expression, of the press and of access to information both online and offline; calls on the BiH authorities to undertake urgent measures to save the public service media from collapse; calls on the competent authorities to ensure the independence and financial stability of the three public service broadcasters as well as the political, operational and financial independence and transparency of the Communications Regulatory Authority; calls on the competent authorities to guarantee media pluralism and ensure broadcasting in all official languages of BiH; calls for the finalisation of the digital switchover and the setting up of a broadband strategy;

38.  Remains concerned by continued fragmentation, segregation, inefficiency and complexity in the education system; calls for the adoption of a countrywide common core curriculum that will contribute to the cohesion of the country; calls for better coordination between the different levels of education governance in order to promote an inclusive and non-discriminatory education system and to foster cooperation across cultural, religious and ethnic lines; calls on the authorities to promote the principles of tolerance, dialogue and intercultural understanding among the different ethnic groups; urges the adoption of concrete measures to improve the efficiency of the education system and to eliminate segregating practices, while guaranteeing the right to equal education opportunities in all official languages of BiH; continues to be concerned about the high proportion of early leavers from education and training and the persistently high school-drop-out rates of Roma pupils; regrets the slow progress in addressing and resolving the issue of ‘two schools under one roof’, mono-ethnic schools and other forms of segregation and discrimination in schools;

39.  Welcomes the measures to modernise labour legislation, to improve the business environment and to address weaknesses in the financial sector within the framework of the Reform Agenda; notes positively also the increase in registered employment and the steps taken to strengthen economic policy coordination; welcomes the 3-year Extended Fund Facility programme agreed with the IMF, which is expected to improve the business climate further, to reduce the size of the government and to safeguard the financial sector; continues to regret the absence of a unified single economic area, which hampers the business environment, foreign direct investments and SMEs; calls for these issues to be addressed through harmonised and coordinated country-wide industrial and SME policies; calls, as a matter of urgency, for the competent authorities to outline coordinated measures with a view to strengthening the rule of law, simplifying contract enforcement procedures and combating corruption in the economy;

40.  Welcomes the slight reduction in unemployment; remains concerned, however, that unemployment continues to be largely of a structural nature and that youth unemployment continues to be high, resulting in very high levels of brain drain; encourages BiH to participate actively in various programmes designed for young people in the region, such as those in the framework of the Positive Agenda for the Youth in the Western Balkans or Regional Youth Cooperation Office (RYCO); calls on the competent authorities to further strengthen existing laws and to introduce active labour market policies targeting in particular young people, women, vulnerable groups, including the Roma, and the long-term unemployed, as well as reinforcing the capacities of the employment services;

41.  Regrets that the labour laws in both entities were adopted by means of the urgent procedure and without proper dialogue with the social partners; notes that labour and trade union rights are still limited and stresses the importance of further enhancing and harmonising these laws across the country; recalls that BiH has signed a number of ILO Conventions, which, inter alia, recognise the principles of social dialogue and the importance of cooperation with social partners; stresses the importance of further enhancing and harmonising health and safety laws across the country; highlights also the need to reform and harmonise the fragmented social protection systems, to promote social cohesion and ensure social protection for the most vulnerable;

42.  Notes that some progress has been achieved in further aligning policies and legislation in the area of environmental protection; calls for significant efforts in relation to the proper and systematic implementation and enforcement of existing legislation; stresses the need to adopt a countrywide strategy for the approximation of environmental acquis, to enhance the legal framework and to strengthen administrative and monitoring capacities; points out that the legislation regulating access to environmental information and public participation in decision-making processes must be brought in line with the acquis; calls, as a matter of urgency, for alignment with the EU acquis in the field of nature protection; underlines that the planning and construction of hydropower plants and projects must comply with international and EU environmental legislation; urges that hydropower projects not be realised in protected natural environments and that they are not harmful to nature; stresses the need for public participation in and the consultation of civil society on relevant projects; expresses concern about the lack of progress in solving the problem of excessive and transboundary environmental pollution caused by the operations of the refinery in Bosanski Brod;

43.  Highlights that agreed EU priority electricity and gas transmission interconnection projects with neighbouring countries have been held up due to lack of political agreement on a countrywide energy strategy; urges, in this connection, the adoption of a countrywide energy strategy as well as the adoption of a legal framework for gas in compliance with the Third Energy Package, so that European Energy Community sanctions can be lifted; urges that a law on natural gas be passed with a view to increasing the security of supply; urges the authorities to ensure alignment with EU and international standards and policy objectives in the field of energy and climate change;

44.  Notes the country’s infrastructural deficiencies and advocates continuing investment in projects that improve transport links both within BiH and with neighbouring countries; encourages the full participation of BiH in the implementation of the EU’s connectivity agenda; commends the adoption of the countrywide Framework Transport Strategy for the period 2015-2030 in July 2016; underlines that this would enable BiH to access Instrument for Pre-accession Assistance (IPA) II funding; calls on the authorities to align the legal framework on transport with the relevant EU legislation, to create functional transport chains, remove the bottlenecks on corridor Vc, as well as to observe tendering rules and the principle of transparency in the selection of contractors, in order to prevent abuse and corruption;

45.  Welcomes BiH’s continued constructive and pro-active role in promoting bilateral and regional cooperation; calls for further efforts to resolve outstanding bilateral issues, including border demarcation with Serbia and Croatia and cases of cross-border pollution; commends BiH for further increasing the rate of its alignment with relevant EU statements and decisions under the Common Foreign and Security Policy (CFSP) from 62 % to 77 %; regrets the decision by BiH authorities not to back EU restrictive measures against Russia, following the latter’s illegal annexation of Crimea; reminds BiH of the need for a unified foreign policy and that foreign policy alignment is an essential part of EU membership; considers it important to coordinate BiH foreign policy with EU foreign policy and that the EU remains actively engaged in preserving safety and security in BiH; welcomes the continued presence of Operation Althea, which retains the capability to contribute to the BiH authorities’ deterrence capacity if the situation so requires, while focusing on capacity building and training; welcomes equally the prolongation of EUFOR’s mandate in November 2016 for another year by the UN Security Council;

46.  Instructs its President to forward this resolution to the VP/HR, the Council, the Commission, the Presidency of BiH, the Council of Ministers of BiH, the Parliamentary Assembly of BiH, the governments and parliaments of the Federation of BiH and the RS entities and of the Brčko District, and the governments of the 10 cantons.

(1) ECA 2016 No. 21.
(2) S/2016/911.


European Semester for Economic Policy Coordination: Annual Growth Survey 2017
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European Parliament resolution of 15 February 2017 on the European Semester for economic policy coordination: Annual Growth Survey 2017 (2016/2306(INI))
P8_TA(2017)0038A8-0039/2017

The European Parliament,

–  having regard to the Treaty on the Functioning of the European Union (TFEU), and in particular Articles 121(2), 126, 136, and to Protocol No 12 on the excessive deficit procedure,

–  having regard to Protocol No 1 on the role of National Parliaments in the European Union,

–   having regard to Protocol No 2 on the application of the principles of subsidiarity and proportionality,

–  having regard to the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union,

–  having regard to Regulation (EU) No 1175/2011 of the European Parliament and of the Council of 16 November 2011 amending Council Regulation (EC) No 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies(1),

–  having regard to Council Directive 2011/85/EU of 8 November 2011 on requirements for budgetary frameworks of the Member States(2),

–  having regard to Regulation (EU) No 1174/2011 of the European Parliament and of the Council of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area(3),

–  having regard to Council Regulation (EU) No 1177/2011 of 8 November 2011 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure(4),

–  having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances(5),

–  having regard to Regulation (EU) No 1173/2011 of the European Parliament and of the Council of 16 November 2011 on the effective enforcement of budgetary surveillance in the euro area(6),

–  having regard to Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area(7),

–  having regard to Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability(8),

–  having regard to the Council conclusions on the Annual Growth Survey 2016 of 15 January 2016,

–  having regard to the Council conclusions on the Fiscal Sustainability Report 2015 of 8 March 2016,

–  having regard to the European Council conclusions of 17-18 March 2016,

–  having regard to the Euro group Statement of 9 September 2016 on common principles for improving expenditure allocation,

–  having regard to the ECB Annual Report 2015,

–  having regard to the European Commission’s Autumn 2016 European Economic Forecast of 9 November 2016,

–  having regard to the Commission communication of 13 January 2015 entitled ‘Making the best use of the flexibility within the existing rules of the Stability and Growth Pact’ (COM(2015)0012),

–  having regard to the Communication of the Commission of 16 November 2016 on the ‘Annual Growth Survey 2017’ (COM(2016)0725),

–  having regard to the Communication of the Commission of 16 November 2016 on the recommendation for a Council Recommendation on the economic policy of the euro area (COM(2016)0726),

–  having regard to the Communication of the Commission of 16 November 2016 ‘Towards a positive fiscal stance for the Euro Area"‘ (COM(2016)0727),

–  having regard to the report from the Commission of 16 November 2016 on the ‘Alert Mechanism Report 2017’ (COM(2016)0728),

–  having regard to the debate with national Parliaments in the context of the 2017 edition of the European Parliamentary Week,

–  having regard to the Report on completing Europe’s economic and monetary union (‘Five Presidents’ Report’),

–  having regard to the Commission communication of 21 October 2015 on steps towards Completing Economic and Monetary Union (COM(2015)0600),

–  having regard to its resolution of 24 June 2015 on the review of the economic governance framework: stocktaking and challenges(9),

–  having regard to the Eurofound’s European Restructuring Monitor annual report 2015,

–  having regard to the G20 Leader’s Communiqué delivered at the Hangzhou Summit of 4-5 September 2016,

–  having regard to the Statement of the President of the ECB at the 34th meeting of the International Monetary and Financial Committee on 7 October 2016,

–  having regard to the COP21 agreement adopted at the Paris Climate Conference on 12 December 2015,

–  having regard to the resolution of the Committee of the Regions on the 2016 European Semester and in view of the 2017 Annual Growth Survey (12 October 2016),

–  having regard to the Annual Report on European SME’s 2015/2016,

–  having regard to the report from the Commission to the European Parliament and the Council dated 26 August 2016 on the implementation of Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (COM(2016)0534),

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on Economic and Monetary Affairs and the opinions of the Committee on Budgets, the Committee on the Environment, Public Health and Food Safety and the Committee on Regional Development (A8-0039/2017),

A.  whereas the European Union’s economy is slowly recovering and growing at a moderate pace, albeit unevenly across Member States;

B.  whereas real GDP growth in 2016 is projected by the Commission at 1,8 % for the EU and at 1,7 % for the euro area, and in 2017 at 1,6 % and 1,7 %, respectively, and the government debt is set to stand at 86,0 % in the EU and 91,6 % in the euro area in 2016; whereas the euro area deficit is set to stand at 1,7 % GDP in 2016, 1,5 % in 2017 and 2018;

C.  whereas consumer spending is the current key driver of growth and is expected to remain as such in 2017; whereas, however, Europe still faces an important ‘investment gap’ where investment remains well below pre-crisis levels;

D.  whereas the employment rate in the EU is growing, although unevenly and at an insufficient pace, reducing unemployment in the euro area to 10,1 % in 2016, but not enough to significantly curb youth and long-term unemployment;

E.  whereas this recovery in the labour markets, and growth, is different between the Member States and remains fragile, and whereas there is a need to promote upward convergence in the EU;

F.  whereas growth has to an important degree relied upon unconventional monetary policies, which cannot last forever; whereas this supports the call for a three-pronged policy approach of growth-friendly investment, sustainable structural reforms and responsible public finances through a consistent implementation of the Stability and Growth (SGP) pact across Member States, with full respect of its existing flexibility clauses:

G.  whereas some Member States still carry a very high private and public debt, exceeding 60 % of GDP threshold as set within the SGP;

H.  whereas the Commission’s assessments of the draft budgetary plans (DBPs) for 2017 of euro area Member States finds that no DBP for 2017 has been found in particularly serious non-compliance with the requirements of the SGP, but that, in several cases however, the planned fiscal adjustments fall short, or risk doing so, of what is required by the SGP;

I.  whereas the Commission’s assessments on the euro area Member State’s Draft Budgetary Plan for 2017 finds that only nine Member States are compliant with the requirements under the SGP;

J.  whereas the long-term sustainability of public finances of EU Member States is a matter of concern for intergenerational fairness;

K.  whereas the size of government debt can be affected both by contingent and implicit liabilities;

L.  whereas some Member States record very high current account surpluses and European macroimbalances are still large;

M.  whereas the EU requires important additional private and public investment efforts, in particular in education, research, ICT and innovation, as well as new jobs, business and companies, in order to materialise its growth potential and to close the current ‘investment gap’ where investment remains below pre-crisis level; whereas this requires, in particular, an improved regulatory environment;

N.  whereas the high level of non-performing loans remains a serious challenge in a number of Member States; whereas credit growth is recovering gradually but it is still below pre-crisis levels;

O.  whereas in order to improve the EU’s insufficient level of global competitiveness and increase its economic growth, a better implementation of the new policy mix, intelligent structural reforms in the Member States, and the completion of the single market are necessary;

P.  whereas economies with more punitive bankruptcy regimes forego the potential growth in value added and employment which calls for the full implementation of the Small Business Act second chance principle by all Member States;

Q.  whereas European competitiveness also depends heavily on non-prices elements related to innovation, technology and organisational capabilities, rather than solely on prices, costs and wages;

R.  whereas the late payments directive 2011/7/EU was designed to help companies that are facing high costs or even bankruptcies due to late payments by private and public companies; whereas the external ex-post evaluation revealed that public entities in more than half of all Member States are not yet respecting the 30-day payment limit imposed by law; whereas the report has identified that Member States under adjustment programmes have difficulties applying the directive where prompt payment of current invoices has to be balanced against accumulated debt repayment;

1.  Welcomes the Commission’s Annual Growth Survey 2017 reaffirming the strategy of a virtuous triangle of private and public investment, socially balanced structural reforms and responsible public finances, and calls for a better implementation of this policy mix; agrees that faster progress on the adoption of reforms, in line with the country-specific recommendations, is needed to deliver on growth and jobs, in order to support the economic recovery; deplores, therefore, the very low implementation rate of country-specific recommendations, which declined from 11 % in 2012 to only 4 % in 2015; stresses that Member States will need to step up their efforts to reform if they want to return to growth and create jobs; supports the Commission in its priority of boosting jobs, growth and investment for the Union;

2.  Observes the current excessive reliance on the monetary policy of the European Central Bank and notes that monetary policy alone is insufficient to stimulate growth when investments and sustainable structural reforms are lacking;

3.  Agrees with the Commission that the euro area would need to rely increasingly on domestic demand; considers that stronger domestic demand would be better for the euro area’s sustainable growth;

4.  Notes that growth in 2016 is continuing at a positive moderate pace, surpassing the pre-crisis level, but that the modest growth must be seen in the perspective of an extraordinary monetary policy and that it remains weak and uneven between Member States; notes with concern that GDP and productivity growth rates remain below full potential, and that there is therefore no time for complacency, and that this moderate recovery requires relentless efforts if it is to achieve greater resilience through higher growth and employment;

5.  Notes that the referendum in the United Kingdom has created uncertainties for the European economy and the financial markets; notes that the outcome of the recent presidential election in the United States of America has created political uncertainty that is expected to affect the European economy, not the least regarding international trade relations;

6.  Notes with concerns the backlash against globalization and the rise of protectionism;

7.  Finds that while unemployment is, on average, gradually decreasing, and that activity rates are growing, structural challenges persist in many Member States; notes that the rates of long-term and youth unemployment remain high; underlines that inclusive labour market reforms, with full respect for the social dialogue, are necessary in the Member States concerned if these structural deficiencies are to be addressed;

8.  Stresses that the investment rate in the EU, and in the euro area, is still far below pre-crisis levels; believes that this ‘investment gap’ needs to be filled in by private and public investments, and underlines that only targeted investment can bring about visible results in a short timeframe and at an appropriate scale; agrees with the Commission that the low funding cost environment supports frontloading investments, in particular in infrastructure;

Investment

9.  Agrees with the Commission that access to finance and the strengthening of the single market are crucial for businesses to innovate and grow; stresses that new capital and liquidity requirements, albeit necessary to enhance the resilience of the banking sector, should not undermine banks’ ability to lend to the real economy; believes more efforts should be done to boost SME access to finance; calls on the Commission, therefore, to step up its efforts to improve the financing environment;

10.  Stresses that private and public investments in human capital and infrastructure are of the utmost importance; considers that there is a strong need to facilitate investment in areas such as education, innovation and research and development, which are crucial factors for a more competitive European economy;

11.  Welcomes the Commission’s proposal to extend the duration, and double the amount, of the European Fund for Strategic Investments (EFSI); stresses that geographical and sectorial coverage must be improved significantly if the objectives set out in the regulation are to be achieved; stresses that EFSI should also attract finance for projects with a cross-border dimension, balanced across the Union; stresses the importance of better coordination between the Member States, the Commission and the European Investment Advisory Hub;

12.  Calls on the Member States and the Commission to speed up and maximise the use of European Structural and Investment Funds (ESIF) in order to take advantage of all internal growth drivers and to promote upward convergence;

13.  Notes that a credible financial system and its institutions are crucial for attracting investment and growth in the European economy; stresses that safety and stability in the current financial system has increased compared to pre-crisis level; notes, this notwithstanding, that some pressing challenges remain unaddressed, such as the stock of nonperforming loans (NPLs) accumulated during the financial crisis;

14.  Stresses that a fully functioning Capital Markets Union (CMU) can, in a longer perspective, provide alternative financing to SMEs, complementing that of the banking sector, and bring about more diversified sources of financing for the economy in general; calls on the Commission to accelerate its work on the CMU with a view to creating a more efficient allocation of capital throughout the EU, improving the depth of EU capital markets, increasing diversification for investors, stimulating long-term investment and making full use of the EU’s innovative financial instruments designed to support access to capital markets for SMEs; stresses that the completion of the CMU should not undermine the achievements obtained so far, but should strive to be of ultimate benefit to the European citizens;

15.  Stresses that increased financing of investments is needed; calls for a well-functioning financial system where increased stability and existing cross-border institutions can facilitate liquidity and market making, especially for SMEs; notes as well, in this regard, that high-growth companies have issues with access to finance; calls for the Commission to identify and implement projects that support and attract market-based investment for such companies; underlines that reforms regarding banking structure must not hamper liquidity making;

16.  Encourages a thorough, step-by-step completion of the Banking Union and the development of the CMU, with the aim of increasing resilience in the banking sector, contributing to financial stability, creating a stable environment for investment and growth, and avoiding fragmentation of the euro area financial market; stresses, in this context, the principle of liability, and underlines that moral hazard must be avoided, in particular in order to protect citizens; urges respect for the existing common rules;

17.  Highlights that public and private investment is crucial to allow for the transition towards a low-carbon and circular economy; recalls the commitments of the European Union, particularly in the Paris Agreement, to finance the deployment of clean technologies, the scaling-up of renewable energies and energy efficiency, and the overall reduction of greenhouse gas emissions;

18.  Emphasises that reliable investment requires a stable regulatory environment that allows for a return on investment; considers that predictable rules, efficient and transparent public administrations, effective legal systems, a level playing field and a reduced administrative burden are crucial factors for attracting investment; stresses that 40 % of the country-specific recommendations for 2016 address obstacles to investment which the local and regional authorities can help to remove; calls, furthermore, on the Commission to take the necessary action on the basis of the ‘Call for evidence: EU Regulatory Framework for Financial Services’, to reduce red tape, simplify regulation and improve the financing environment;

19.  Recognises the untapped potential for productivity growth and investment that could be reaped if single market rules were fully enforced, and the product and services markets were better integrated; recalls the importance of country-specific recommendations in pointing out key areas for actions in Member States;

20.  Agrees with the Commission that the benefits of trade are not always recognised in the public debate, and stresses that international trade can be a significant source of jobs for Europeans and a crucial contribution for growth; reiterates that more than 30 million jobs are now supported by exports from the EU; underlines that international trade agreements should not undermine European regulatory, social and environmental standards, but rather strengthen global standards;

21.  Notes with concern that the EU share of global foreign direct investments flows have fallen significantly since the crisis; calls on the Commission and the Member States to step up efforts to improve the business environment for investments, inter alia by fully implementing and enforcing EU Single Market legislation; agrees that faster progress on the adoption of sustainable structural reforms, in line with the country-specific recommendations, is needed to enhance the EU’s competitiveness, to promote a favourable environment for businesses (especially SMEs) and investment, and to deliver on growth and jobs, as well as to foster upward convergence between Member States;

22.  Insists on the need to safeguard the long-term investment capacities of financial institutions, the profitability of low-risk savings, and of long-term pension products, in order not to jeopardise the sustainability of savings and pensions provisions of European citizens;

23.  Stresses that sustainable structural reforms need to be complemented by longer-term investment in education, research, innovation and human capital, notably education and training aimed at providing new skills and knowledge; believes that partnerships between policy-makers, legislators, researchers, producers and innovators can also be considered as tools to promote investment, deliver smart and sustainable growth, and complement investment programmes;

Structural reforms

24.  Agrees that sustainable structural reforms in product and service markets, as well as in inclusive labour, health, housing and pension markets, remain a priority in the Member States in order efficiently to support the recovery, to tackle high unemployment, to boost competitiveness, fair competition and growth potential, and to improve the efficiency of research and innovation systems, without watering down worker’s rights, consumer protection or environmental standards;

25.  Considers that well-functioning and productive labour markets, combined with an adequate level of social protection and dialogue, have proven to be quicker to recover from the economic downturn; calls on Member States to reduce segmentation of the labour markets, increase labour market participation and upgrade skills, including by means of a stronger focus on training and lifelong learning to enhance employability and productivity; observes that some Member States still have a considerable need for reform if they are to make their labour markets more resilient and inclusive;

26.  Underlines the importance of launching or continuing the implementation of coherent and sustainable structural reforms for stability in the medium and long terms; stresses that the EU and its Member States cannot compete on general or labour costs alone, but need to invest more in research, innovation and development, education and skills, and resource efficiency, at both national and European level;

27.  Is concerned about the effects of demographic developments on public finances and sustainable growth, conditioned by, inter alia, low birth rates, ageing societies and emigration; points in particular to the impact of ageing populations on pension and healthcare systems in the EU; notes that, owing to different demographic structures, the effects of these developments will vary across Member States, but warns that the already foreseeable funding costs will have a significant impact on public finances;

28.  Recalls that an important factor for ensuring the sustainability of pension systems is to achieve and maintain a high employment rate; points as well, in this context, to the importance of using migrants’ skills in better ways in order to adapt to labour market needs;

29.  Notes that the Member States currently spend 5-11 % of their respective GDPs on healthcare, a share that is expected to increase considerably in the coming decades as a result of demographic changes; urges the Commission to focus efforts on cost-effective spending on high-quality healthcare, and on universal access thereto, through cooperation and sharing of best practices at EU level and by addressing the sustainability of quality healthcare systems in country-specific recommendations;

30.  Invites the Commission to publish regular fiscal sustainability assessments for each Member State, taking into account all country-specific factors, such as demographical developments, and contingent, implicit and other off-budget obligations that affect the sustainability of public finances; recommends that these reports be part of the annual country reports; suggests that the Commission develop an indicator to assess the effect of public finances and annual budgets on future generations, taking into account future liabilities and implicit budgetary obligations; agrees that the administrative burden for these assessments should be kept limited;

31.  Welcomes the fact that, on average, youth unemployment is declining, although it is still too high; notes that stark differences remain across the Member States that call for continued reforms to facilitate the entry of young people into the labour market, thereby ensuring intergenerational fairness; emphasises, in this regard, the importance of the Youth Guarantee, and calls for continued EU funding for this crucial programme; agrees with the Commission that more action is needed from the Member States to fight youth unemployment, particularly in enhancing the effectiveness of the Youth Guarantee;

32.  Stresses the importance of responsible and growth-friendly wage developments, providing a good standard of living, in line with productivity, taking account of competitiveness, and the importance of an effective social dialogue for a well-functioning social market economy;

33.  Agrees that taxation must support investments and job creation; calls for reforms in taxation with a view to tackling the high tax burden on labour in Europe, improving tax collection, combating tax avoidance and tax evasion, and making tax systems simpler, fairer and more efficient; highlights the need for better coordination of administrative practices in the field of taxation; calls for further transparency among the Member States in the field of corporate taxation;

Fiscal responsibility and structure of public finances

34.  Notes that the Commission considers that fiscal sustainability remains a priority, and that challenges have receded since the peak of the crisis and they may not be a major source of risks for the euro area as a whole in the short term;

35.  Notes as well that the Commission considers that challenges persist, and that legacies inherited from the crisis, as well as structural deficiencies, remain and need to be addressed if long-term risks are to be avoided;

36.  Underlines the fact that all Member States are obliged to comply with the SGP, with full respect of its existing flexibility clauses; points, in this regard, also to the importance of the Treaty on Stability, Coordination and Governance (TSCG), and urges the Commission to submit a comprehensive assessment of its experience in implementing it, as a basis for the necessary steps to be taken in accordance with the TEU and the TFEU with the aim of incorporating the substance of this Treaty into the legal framework of the EU;

37.  Notes that while six Member States continue to be under the Excessive Deficit Procedure (EDP), there is a decrease of the average public deficit level, which is expected to have remained below 2 % in 2016 and to continue to fall in the coming years, and that only two Member States are expected to remain under the EDP in 2017; notes that, in several cases, the large increase in debt in the recent past is also the result of bank recapitalisation and low growth; underlines that when interest rates begin to rise again, difficulties in improving public finances could increase;

38.  Emphasises the Commission’s role as guardian of the treaties; underlines the necessity for an objective and transparent evaluation of the application and enforcement of commonly agreed legislation;

39.  Insists that there should be no differentiated treatment between Member States; notes that only a fiscal policy that respects and follows Union law will lead to credibility and trust between Member States, and serve as a cornerstone for the completion of EMU and the trust of the financial markets;

40.  Invites the Commission and the Council to be as specific as possible when addressing fiscal recommendations under the preventive and corrective arm of the SGP in order to increase transparency and enforceability of the recommendations; underlines the need to include in the recommendations, under the preventive arm, both the target date of the country-specific medium-term-objective and the fiscal adjustment required to achieve or remain at it;

41.  Considers that macroeconomic imbalances inside Member States should be addressed in line with the Macroeconomic Imbalance Procedure (MIP) through efforts involving all Member States, building on relevant reforms and investments; stresses that each Member State must deliver on its individual responsibilities in this context; notes that high current account surpluses imply the possibility of greater domestic demand; stresses that high public and private debt levels represent a significant vulnerability, and that responsible fiscal policies and higher growth are needed to reduce them faster;

42.  Notes that, while public finances have improved over the recent years, following the assessment of the 2017 DBPs, eight Member States are considered to be at risk of non-compliance; considers that the agreed fiscal adjustment paths need to be adhered to;

43.  Welcomes the reduction in average public deficits and debts, but agrees that aggregate pictures hide significant disparities across the Member States; stresses that aggregate pictures should always be looked at in conjunction with the examination of individual budgets, and underlines the need for sound fiscal policies in anticipation of rising interest rates; considers that upward convergence, in particular between euro area Member States, needs to be achieved;

Fiscal stance for the euro area

44.  Notes that according to the Commission’s 2016 autumn economic forecast, the fiscal stance in the euro area moved from restrictive towards neutral in 2015 and is expected to be mildly expansionary over the forecast horizon; notes, furthermore, the Commission’s consideration that a full delivery of the fiscal requirements contained in the country-specific recommendations of the Council would lead, on aggregate, to a modestly restrictive fiscal stance for the euro area as a whole in 2017 and 2018, and the Commission’s calls for a positive expansionary fiscal stance though recognising the economic and legal constraints for this;

45.  Considers the Commission’s communication on a positive fiscal stance an important development; welcomes the communication’s intention to contribute to the better coordinating economic policies in the euro area and to highlight the opportunities for fiscal stimulus in Member States having room for this; stresses that fiscal requirements are based on commonly agreed fiscal rules; recalls that the Member States are obliged to comply with the SGP, regardless of aggregate recommendations; notes that there are divergent views regarding the potential, and level, of an aggregate fiscal stance target; welcomes the ongoing work of the independent European Fiscal Board on this matter;

46.  Takes the view that improving the structure of public budgets is one of the key levers to ensure compliance with EU fiscal rules, and to allow for the financing of indispensable expenditure, for the building of buffers for unforeseen needs and growth-enhancing investments and, lastly, for the financing of less essential spending, as well as to contribute to a more efficient and responsible use of public funds; recalls that the composition of national budgets is decided at national level taking into account country-specific recommendations;

47.  Notes that the debate on a smart allocation of public spending and policy priorities is regularly taking place on the EU budget, and that such a critical assessment is also indispensable for national budgets to improve the quality of public budgets in the medium-term and long-term and avoid linear budget cuts;

48.  Welcomes the ongoing review of public spending, and encourages the Member States to assess critically the quality and composition of their budgets; supports efforts towards improving the quality and efficiency of public expenditure; including by shifting unproductive expenses towards growth-enhancing investments;

49.  Believes the EU budget could help relieve the strain on national budgets by collecting own resources instead of relying extensively on national contributions;

50.  Welcomes the thematic discussions undertaken and best practice standards adopted by the Eurogroup, such as on expenditure reviews, during the 2016 Semester Cycle; Invites the Commission and the Eurogroup to make them more effective and transparent;

51.  Invites the Commission and the Council to formulate the country-specific recommendations in a way that makes progress measurable, in particular for cases where the policy recommendation repeatedly targets the same policy area and/or where the nature of the reform requires implementation beyond one Semester cycle;

Coordination of national policies and democratic accountability

52.  Highlights the importance of national parliaments debating country reports, country-specific recommendations, national reform programmes and stability programmes, and to act on them more than hitherto;

53.  Believes that better implementation of country-specific recommendations requires clearly articulated priorities at European level and genuine public debate at national, regional and local levels, leading to greater ownership; calls on the Member States to involve local and regional authorities in a structured manner, in view of the impact and challenges felt within Member States also at sub-national level, in order to improve the implementation of country-specific recommendations;

54.  Urges the Commission to launch negotiations on an interinstitutional agreement on economic governance; insists that this IIA should ensure that, within the framework of the Treaties, the structure of the European Semester allows for meaningful and regular parliamentary scrutiny of the process, in particular as regards the Annual Growth Survey priorities and the euro area recommendations;

Sectorial contributions to the 2017 AGS Report

Budgets

55.  Considers that the EU budget could provide added value for investment and structural reforms in Member States if greater synergy between existing instruments and linkage with Member States’ budgets is introduced; believes, therefore, that the Annual Growth Survey (AGS), as an important policy document which provides basic content for national reform programmes, country-specific recommendations (CSRs) and implementation plans, should serve as a guideline for Member States and for the preparation of national budgets, with a view to introducing joint solutions that are visible in national budgets and are linked to the EU budget;

56.  Recalls that improving the systems for collecting VAT and customs duties should be of highest priority for all Member States; welcomes the Commission’s proposal for establishing an EU blacklist of tax havens, which should be enforced by criminal sanctions in order to deal with multinationals that evade taxes;

Environment, Public Health and Food Safety

57.  Stresses that an improved and more efficient use of resources, reducing foreign energy dependence and introducing sustainable production, based on better design requirements for products and more sustainable consumption patterns, involves promoting entrepreneurship and job creation, implementing international targets and the Union’s environmental objectives effectively and diversifying revenue sources, in a context of fiscal responsibility and economic competitiveness; considers that the European Semester should also incorporate reporting on energy efficiency and interconnectivity on the basis of targets set at EU level;

o
o   o

58.  Instructs its President to forward this resolution to the Council and the Commission, and to the governments of the Member States, the national parliaments and the European Central Bank.

(1) OJ L 306, 23.11.2011, p. 12.
(2) OJ L 306, 23.11.2011, p. 41.
(3) OJ L 306, 23.11.2011, p. 8.
(4) OJ L 306, 23.11.2011, p. 33.
(5) OJ L 306, 23.11.2011, p. 25.
(6) OJ L 306, 23.11.2011, p. 1.
(7) OJ L 140, 27.5.2013, p. 11.
(8) OJ L 140, 27.5.2013, p. 1.
(9) OJ C 407, 4.11.2016, p. 86.


European Semester for Economic Policy Coordination: employment and social aspects in the Annual Growth Survey 2017
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European Parliament resolution of 15 February 2017 on the European Semester for economic policy coordination: Employment and Social Aspects in the Annual Growth Survey 2017 (2016/2307(INI))
P8_TA(2017)0039A8-0037/2017

The European Parliament,

–  having regard to Article 5 of the Treaty on European Union (TEU),

–  having regard to Articles 9, 145, 148, 152, 153 and 174 of the Treaty on the Functioning of the European Union (TFEU),

–  having regard to Article 349 TFEU on a specific statute for the outermost regions,

–  having regard to the Interinstitutional Agreement of 13 April 2016 between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making,

–  having regard to the Charter of Fundamental Rights of the European Union, and in particular to its Title IV (Solidarity),

–  having regard to the UN Convention on the Rights of Persons with Disabilities,

–  having regard to ILO Convention 102 on minimum standards for social security, and ILO Recommendation 202 on Social Protection Floors,

–  having regard to the Revised European Social Charter,

–  having regard to Sustainable Development Goal 1 (‘End poverty in all its forms everywhere’), and in particular to Target 3 (‘Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable’),

–  having regard to Commission recommendation 2013/112/EU of 20 February 2013 entitled ‘Investing in children: breaking the cycle of disadvantage’,

–  having regard to the Commission communication of 16 November 2016 entitled ‘Annual Growth Survey 2017’ (COM(2016)0725),

–  having regard to the Commission recommendation of 16 November 2016 for a Council recommendation on the economic policy of the euro area (COM(2016)0726),

–  having regard to the Commission communication of 16 November 2016 entitled ‘Towards a positive fiscal stance for the euro area’ (COM(2016)0727),

–  having regard to the Commission report of 16 November 2016 entitled ‘Alert Mechanism Report 2017’ (COM(2016)0728),

–  having regard to the draft Joint Employment Report from the Commission and the Council of 16 November 2016 accompanying the communication from the Commission on the Annual Growth Survey 2017 (COM(2016)0729),

–  having regard to the Commission communication of 16 November 2016 entitled ‘2017 Draft Budgetary Plans: Overall Assessment’ (COM(2016)0730),

–  having regard to the Commission communication of 1 June 2016 entitled ‘Europe investing again – Taking stock of the Investment Plan for Europe and next steps’ (COM(2016)0359),

–  having regard to the Commission communication of 22 November 2016 entitled ‘Europe’s next leaders: the Start-up and Scale-up Initiative’ (COM(2016)0733),

–  having regard to the Commission communication of 14 September 2016 entitled ‘Strengthening European Investments for jobs and growth: Towards a second phase of the European Fund for Strategic Investments and a new European External Investment Plan’ (COM(2016)0581),

–  having regard to the Commission communication of 4 October 2016 entitled ‘The Youth Guarantee and Youth Employment Initiative three years on’ (COM(2016)0646),

–  having regard to the Commission proposal of 14 September 2016 for a Council regulation amending Regulation (EU, Euratom) No 1311/2013 laying down the multiannual financial framework for the years 2014-2020 (COM(2016)0604),

–  having regard to the Commission communication of 14 September 2016 entitled ‘Mid-term review/revision of the multiannual financial framework 2014-2020 – An EU budget focused on results’ (COM(2016)0603),

–  having regard to the Commission communication of 10 June 2016 entitled ‘A new skills agenda for Europe – Working together to strengthen human capital, employability and competitiveness’ (COM(2016)0381),

–  having regard to the Commission communication of 2 June 2016 entitled ‘A European agenda for the collaborative economy’ (COM(2016)0356),

–  having regard to the Commission communication of 8 March 2016 launching a consultation on a European Pillar of Social Rights (COM(2016)0127) and its annexes,

–  having regard to the Commission proposal of 26 November 2015 for a Regulation of the European Parliament and of the Council on the establishment of the Structural Reform Support Programme for the period 2017 to 2020 and amending Regulations (EU) No 1303/2013 and (EU) No 1305/2013 (COM(2015)0701),

–  having regard to the Commission communication of 21 October 2015 on steps towards completing Economic and Monetary Union (COM(2015)0600),

–  having regard to the Commission proposal of 15 February 2016 for a Council decision on guidelines for the employment policies of the Member States (COM(2016)0071), and to Parliament’s position thereon of 15 September 2016(1),

–  having regard to the Commission communication of 13 January 2015 entitled ‘Making the best use of the flexibility within the existing rules of the Stability and Growth Pact’ (COM(2015)0012),

–  having regard to the Commission communication of 26 November 2014 entitled ‘An Investment Plan for Europe’ (COM(2014)0903),

–  having regard to the Commission communication of 2 October 2013 entitled ‘Strengthening the social dimension of the Economic and Monetary Union’ (COM(2013)0690),

–  having regard to the Commission communication of 20 February 2013 entitled ‘Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020’ (COM(2013)0083),

–  having regard to the Commission communication of 18 April 2012 entitled ‘Towards a job-rich recovery’ (COM(2012)0173),

–  having regard to the Commission communication of 20 December 2011 entitled ‘Youth Opportunities Initiative’ (COM(2011)0933),

–  having regard to the Commission communication of 16 December 2010 entitled ‘The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion’ (COM(2010)0758), and to Parliament’s resolution thereon of 15 November 2011(2),

–  having regard to the Commission communication of 3 March 2010 entitled ‘Europe 2020: A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

–  having regard to the Commission recommendation 2008/867/EC of 3 October 2008 on the active inclusion of people excluded from the labour market(3),

–  having regard to the Five Presidents’ Report of 22 June 2015 on ‘Completing the Economic and Monetary Union’,

–  having regard to the Council conclusions on the promotion of the social economy as a key driver of economic and social development in Europe (13414/2015),

–  having regard to its resolution of 26 October 2016 on ‘The European Semester for economic policy coordination: implementation of 2016 priorities’(4),

–  having regard to its resolution of 5 July 2016 on ‘Refugees: social inclusion and integration into the labour market’(5),

–  having regard to its resolution of 25 February 2016 on ‘The European Semester for economic policy coordination: Employment and Social Aspects in the Annual Growth Survey 2016’(6),

–  having regard to the opinion of the Committee on Employment and Social Affairs of 24 September 2015 on the European Semester for economic policy coordination: implementation of the priorities for 2015,

–  having regard to its resolution of 11 March 2015 on the European Semester for economic policy coordination: Employment and Social Aspects in the Annual Growth Survey 2015(7),

–  having regard to its position of 2 February 2016 on the proposal for a decision of the European Parliament and of the Council on establishing a European Platform to enhance cooperation in the prevention and deterrence of undeclared work(8),

–  having regard to its resolution of 24 November 2015 on reducing inequalities with a special focus on child poverty(9),

–  having regard to its resolution of 28 October 2015 on cohesion policy and the review of the Europe 2020 strategy(10),

–  having regard to question for oral answer O-000121/2015 – B8-1102/2015 to the Council and to its related resolution of 29 October 2015 on a Council recommendation on the integration of the long-term unemployed into the labour market(11),

–  having regard to its resolution of 10 September 2015 on ‘Creating a competitive EU labour market for the 21st century: matching skills and qualifications with demand and job opportunities, as a way to recover from the crisis’(12),

–  having regard to its resolution of 10 September 2015 on Social Entrepreneurship and Social Innovation in combating unemployment(13),

–  having regard to its resolution of 25 November 2014 on employment and social aspects of the Europe 2020 strategy(14),

–  having regard to its resolution of 17 July 2014 on youth employment(15),

–  having regard to its resolution of 15 April 2014 entitled ‘How can the European Union contribute to creating a hospitable environment for enterprises, businesses and start-ups to create jobs?’(16),

–  having regard to its resolution of 19 February 2009 on ‘Social Economy’(17),

–  having regard to the concluding observations of the UN Committee on the Rights of Persons with Disabilities on the initial report of the European Union (September 2015),

–  having regard to the European Court of Auditors’ Special Report No 3/2015 on ‘The EU Youth Guarantee: first steps taken but implementation risks ahead’(18),

–  having regard to the document ‘Employment and Social Developments in Europe – Quarterly Review – Autumn 2016’ of 11 October 2016,

–  having regard to Eurofound the fifth and sixth editions of the European Working Conditions Surveys (2010 and 2015)(19),

–  having regard to the OECD document ‘Employment Outlook 2016’ of 7 July 2016,

–  having regard to the OECD working paper of 9 December 2014 on ‘Trends in Income Inequality and its Impact on Economic Growth’,

–  having regard to the Social Protection Committee’s report ’Adequate social protection for long-term care needs in an ageing society’ of 10 October 2014,

–  having regard to the Commission’s roadmap and consultation addressing the challenges of work-life balance faced by working families,

–  having regard to the meetings of 3 October and 8 November 2016 in the framework of the structured dialogue on the suspension of funds for Portugal and Spain,

–  having regard to the debate with representatives of national parliaments on the priorities of the 2017 European Semester,

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on Employment and Social Affairs and the opinions of the Committee on Budgets and the Committee on Culture and Education (A8-0037/2017),

A.  whereas unemployment in the EU has been slowly decreasing since the second half of 2013, 8 million new jobs have been created since 2013, and unemployment stood at 8,6 % in September 2016, reaching its lowest level since 2009; whereas, however, the proportion of young people not in employment, education or training (NEETs) remains high and represents 14,8 % of those aged between 15 and 29(20)(21); whereas although unemployment is falling on the aggregate level, it is regrettably still very high in some Member States; whereas according to the Commission the rate of in-work poverty remains high;

B.  whereas employment rates are generally lower among women, and in 2015, the employment rate for men aged 20–64 stood at 75,9 % in the EU-28, as compared with 64,3 % for women; whereas the gender gap in access to employment remains one of the main barriers for achieving gender equality, and urgent efforts are needed to narrow the gap in the employment rate between men and women;

C.  whereas if the current trends are reinforced with adequate public policies, the Europe 2020 employment rate target of 75 % could in fact be reached;

D.  whereas the youth unemployment rate stands at 18,6 % in the EU and 21,0 % in the euro area; whereas 4,2 million young people are unemployed, including 2,9 million in the euro area; whereas the level of youth unemployment remains markedly higher than at its low point in 2008, which recalls that implementation and full use of the youth employment initiative (YEI) by the Member States should be a priority; whereas low wages, sometimes below the poverty level, unpaid internships, lack of quality training and lack of rights at work unfortunately remain characteristics of youth employment;

E.  whereas NEETs are estimated to cost the EU EUR 153 billion (1,21 % of GDP) a year, in benefits and foregone earnings and taxes, while the total estimated cost of establishing Youth Guarantee schemes in the euro area would be EUR 21 billion a year, or 0,22 % of GDP;

F.  whereas the number of NEETs, recorded in 2015, will continue to decline; whereas 6,6 million young people between the ages of 15 and 24 are still in this situation, a figure equivalent to 12 % of this age group;

G.  whereas the primary responsibility for tackling youth unemployment rests with the Member States in terms of developing and implementing labour market regulatory frameworks, education and training systems and active labour market policies;

H.  whereas people with disabilities continue to be significantly excluded from the labour market, with very little improvement over the past decade, in part due to a lack of investment in appropriate support measures; stresses that this often leads to poverty and social exclusion and therefore negatively impacts on the Europe 2020 target;

I.  whereas structural challenges in the labour market such as low participation, as well as skills and qualification mismatches, remain a concern in many Member States;

J.  whereas the long-term unemployment rate (referring to unemployment of more than one year) fell by an annual rate of 0,7 % up to the first quarter of 2016, to 4,2 % of the labour force; whereas the very long-term unemployment rate (referring to unemployment of more than two years) fell to 2,6 % of the labour force; whereas nevertheless the number of long-term unemployed remains high, at around 10 million; whereas long-term unemployment is particularly a problem for younger and older jobseekers, with 30 % of those aged between 15 and 24 and 64 % of those aged between 55 and 64 year being jobseekers for more than one year; whereas many older workers who are inactive are not included in unemployment statistics; whereas the level of unemployment and its social consequences vary between European countries and whereas it is essential to take into account specific microeconomic circumstances;

K.  whereas the Europe 2020 strategy aims at reducing poverty by lifting at least 20 million people out of the risk of poverty or social exclusion by 2020; whereas this objective is far from being achieved and therefore more efforts are needed; whereas there were in 2015 119 million people at risk of poverty or social exclusion, around 3,5 million less than in 2014; whereas in 2012 32,2 million persons with disabilities were in this situation in the EU; whereas in 2013 26,5 million children in the EU-28 were at risk of falling into poverty or social exclusion; whereas high levels of inequality reduce the output of the economy and the potential for sustainable growth;

L.  whereas the accompaniment of the long-term unemployed is crucial, since otherwise this situation will begin to affect their self-confidence, wellbeing and future development, putting them at risk of poverty and social exclusion and jeopardising the sustainability of national social security systems, as well as the European social model;

M.  whereas the weakening of social dialogue has a negative impact on workers’ rights, on the purchasing power of EU citizens and on growth;

N.  whereas there are a number of positive developments in the EU, signalling the resilience and recovery of the European economy;

O.  whereas the social economy, which represents 2 million enterprises employing more than 14,5 million people in the Union, has been an important sector, contributing to Europe’s resilience and economic recovery;

P.  whereas growth in most Member States remains low, the EU growth rate for 2016 having even declined to stabilise at 2 %, despite positive temporary aspects showing therefore that the EU can do more to boost the economic and social recovery so as to make it more sustainable in the medium term;

Q.  whereas as the Commission has stated(22), employment and social divergences within and between Member States persist and social developments still point to further divergence across the EU, hindering growth, employment and cohesion; whereas societies which are characterised by a high level of equality and investment in people do better in terms of growth and employment resilience;

R.  whereas undeclared work is still a reality which has serious budgetary implications, leading to loss of tax revenues and social security contributions, as well as having negative effects on employment, productivity, the quality of work and the development of skills;

S.  whereas the outermost regions (ORs) face huge difficulties related to their particular specificities, which limit their potential for growth and development; whereas unemployment, youth unemployment and long-term unemployment in these regions are among the highest in the EU, in many cases exceeding 30 %;

T.  whereas the European Fund for Strategic Investments (EFSI) has already approved 69 projects in 18 countries and signed 56 operations, and this is expected to result in more than EUR 22 billion in investment and to involve around 71 000 SMEs;

U.  whereas in many Member States the working-age population and the labour force are continuing to shrink; whereas women’s participation in the labour market is an opportunity for Member States to cope with this issue and reinforce the labour force in EU; whereas the ongoing arrival of refugees and asylum seekers could also help to reinforce the labour force;

V.  whereas the EU is facing demographic challenges that are not only related to the ageing population and the falling birth rate, but also include other elements such as depopulation;

W.  whereas the gender pay gap currently stands at 16 % and the gender pension gap at 38 %, exposing women to a higher risk of poverty or social exclusion as they age;

X.  whereas the provision and management of social security systems are a Member State competence which the Union coordinates but does not harmonise;

Y.  whereas the healthy life expectancy rate for women has been receding, from 62,6 in 2010 to 61,5 in 2013 with a slight increase in 2014 and has been stagnating for men at 61,4;

1.  Welcomes the fact that in the Annual Growth Survey 2017 emphasis is placed on the importance of ensuring social fairness as a means of stimulating more inclusive growth, as well as on creating quality and inclusive employment and enhancing skills and on the need to strengthen competitiveness, innovation and productivity; calls on the Commission to ensure that the country-specific recommendations (CSRs) relating to labour market reforms also stress the importance of active labour market policies and promote workers’ rights and the protection of workers;

2.  Welcomes the progress towards achieving a balance between the economic and social dimensions of the European Semester process, the Commission having met some of Parliament’s requests; stresses, however, that more effort is needed to improve the political visibility and impact of the scoreboard of key employment and social indicators; welcomes the Commission proposal for amending Regulation (EU) No 99/2013 of the European Parliament and of the Council on the European statistical programme 2013-17, by extending it to 2018-2020 and including new social indicators to present employment and social data connected to the evolution of the macroeconomic data, so that the analysis presents a comprehensive picture of the interconnection and impacts of different policy choices; stresses that employment indicators should be put on an equal footing with the economic indicators, thus allowing them to trigger in-depth analyses and corrective action in the relevant Member States;

3.  Highlights that the European Semester cycle still lacks a child-centred approach, which would include commitment to children’s rights, mainstreaming of combating child poverty, and wellbeing objectives across all relevant policy areas of policymaking; stresses that a strategic approach with clear objectives and targets is necessary to break the cycle of disadvantage;

4.  Calls for programmes offering support and opportunities as part of an integrated European plan to invest in early childhood and combat child poverty, including the creation of a Child Guarantee aimed at fully implementing the Commission recommendation ‘Investing in Children’, which will ensure that every child in Europe at risk of poverty (including refugees) has access to free healthcare, free education, free childcare, decent housing and adequate nutrition;

5.  Stresses that investment in social development contributes to economic growth and convergence; takes note of recent studies by the OECD(23) and the IMF(24) that underline that social inequalities in Europe hamper economic recovery; calls for stronger efforts to combat poverty and rising inequality, and, where needed, for greater investment in social infrastructure and support for those hit hardest by the economic crisis; calls on the Commission to ensure that the CSRs include a specific focus on combating inequalities;

6.  Calls on the Commission and the Council to improve the strategy for an overarching gender equality objective; supports the use of the Commission’s annual gender equality reports in the context of the European Semester to enhance gender mainstreaming; calls on the Member States to incorporate the gender dimension and the principle of equality between women and men in their National Reform Programmes and stability and convergence programmes, by setting targets and defining measures that address persisting gender gaps; calls on the Commission to continue to provide CSRs with regard to improved childcare services and long-term care that can have a positive impact on the labour market participation of women; reiterates its call on the Commission and the Member States to consider using gender-disaggregated data where appropriate in the European Semester monitoring process; suggests involving the European Institute for Gender Equality more closely in the European Semester;

7.  Highlights that public and private debt is too high in some Member States and that this hampers investment, economic growth and employment;

8.  Is of the opinion that the data included in the Employment and Social Scoreboard is useful, but is not enough to assess the evolution of the employment and social situation in the EU; calls on the Commission and the Member States to complement the Scoreboard with data on the quality of employment and on poverty, with especial emphasis on multidimensional child poverty;

9.  Calls on the Commission to define and quantify its concept of social fairness, taking into account both employment and social policies, to be achieved through the 2016 Annual Growth Survey and the European Semester;

10.  Calls on the Member States and the Commission to speed up the implementation of all programmes which can boost the creation of decent, quality, long-term employment for all categories of the population, and particularly young people; stresses that youth unemployment remains at 18,6 %, despite the slight decrease in unemployment in the EU; calls on the Member States to ensure a more proactive follow-up of the programme managing authorities;

11.  Underlines that the implementation of the Youth Guarantee should be strengthened at national, regional and local level and prolonged until at least 2020 with the active participation of the social partners and strengthened public services, and stresses its importance for school-to-work transitions; urges the Commission to carry out impact studies with a view to determining precisely what results have been achieved so far and to take additional measures, and to take into account the awaited audit by the Court of Auditors and the sharing of best practices and the organisation of workshops which bring together all the actors concerned and are designed to make this instrument more effective; highlights that Member States should ensure that the Youth Guarantee is fully accessible, including to vulnerable persons and persons with disabilities; stresses that this is not the case in all Member States, and calls on Member States to remedy this situation as soon as possible, as it runs counter to the UN Convention on the Rights of Persons with Disabilities (CRPD); emphasises the need to ensure that the Youth Guarantee reaches young people facing multiple exclusions and extreme poverty; points out that special attention should be paid to young women and girls, who could face gender-related barriers; calls on the Commission and the Member States to provide adequate funding for the Youth Guarantee in order to ensure that it is implemented properly in all Member States and to help even more young people;

12.  Notes the adoption of EUR 500 million in commitment appropriations for the YEI for 2017; stresses that this amount is not sufficient and needs to be increased and secured in the current MFF; notes also, however, that an agreement on appropriate additional financing for the YEI to cover the remainder of the current MFF period must be reached in the context of the mid-term revision;

13.  Highlights the potential of the cultural and creative industries (CCIs) regarding youth employment; stresses that further promotion of, and investment in, the cultural and creative sector may contribute substantially to investment, growth, innovation and employment; calls on the Commission to therefore consider the special opportunities offered by all cultural and creative sectors (CCSs), including NGOs and small associations, for example in the framework of the YEI;

14.  Underlines that insufficient investment in the public education system may undermine Europe’s competitive position and the employability of its workforce; stresses the need to invest in people as early as possible in the life cycle in order to reduce inequality and foster social inclusion at a young age; also stresses the need to fight stereotypes from the youngest age in schools, by promoting gender equality at all levels of education;

15.  Calls on the Member States to introduce policies to implement and monitor more inclusive forms of social protection systems and income support, in order to ensure that these systems offer a decent standard of living for the unemployed and those at risk of poverty and social exclusion, and provide access to education, training and opportunities to enter the labour market;

16.  Welcomes the increase in the employment rate; notes, however that the rising employment rate in Member States has been accompanied by the growing emergence of atypical and non-formal forms of employment, zero-hours contracts included; highlights that sustainability and quality of employment created should be a priority; is highly concerned that high unemployment continues, especially in countries still suffering from the crisis; recognises the phenomenon of in-work poverty as a consequence of deteriorating wage and working conditions, which must be addressed as part of any actions in favour of employment and social protection; encourages the Member States to make further efforts, as well as to remain open towards new solutions and approaches in order to reach the Europe 2020 employment rate target of 75 %, including by focusing on groups that have the lowest labour market participation such as women, older workers, low-skilled workers and persons with disabilities; calls on the Member States to increase their offer in terms of lifelong learning and effective upskilling;

17.  Considers that migration could play an important role, including through education schemes, complemented with efficient public expenditure, with a view to making high-quality social and environmentally sustainable investments with the aim of integrating workers into the labour market and reducing unemployment;

18.  Recognises that women continue to be under-represented in the labour market; calls, therefore, on the Commission and the Member States to put in place proactive policies and appropriate investment intended and designed to promote women’s participation in the labour market; emphasises that a better work-life balance is essential for increasing the participation of women in the labour market; points out in this regard that flexible working arrangements, such as telework, flexitime and reduced working hours can play an important role according to the Commission; shares the view with the Commission that the provision of paid maternity, paternity and parental leave in Member States tends to boost female labour market participation; also calls on the Member States to set appropriate policies to support women and men entering, returning to, staying in and advancing in the labour market after periods of family and care-related types of leave, with sustainable and quality employment; deplores gender inequalities in terms of the employment rate and the pay and pensions gender gap; calls for policies encouraging and supporting women to build a career in entrepreneurship, facilitating access to finance and business opportunities and offering tailor-made training;

19.  Recognises, however, that employment support and measures to improve active labour market participation need to be part of a broader rights-centred approach to tackling social exclusion and poverty, which takes into consideration children and families and their specific needs;

20.  Calls on the Member States to exchange best practice and to consider new innovative ways of developing an adaptable and flexible labour market to meet the challenges of a global economy while ensuring high labour standards for all workers;

21.  Welcomes the reminder to Member States that welfare systems need to be anchored in strong social standards, and that promoting work-life balance and addressing discrimination contribute not just to social fairness but also to growth; underlines that parents’ reintegration into the labour market should be supported by creating the conditions for a quality and inclusive employment and working environment, enabling parents to balance their work and parenting roles;

22.  Recognises that alongside job creation, the integration of long-term unemployed individuals into quality employment through individually tailored measures, in particular through active employment policies, is a key factor for fighting their poverty and social exclusion if sufficient decent work is available; points out that emphasis should be put on improved measures aimed at the creation of decent jobs; stresses that integrating those furthest from the labour market has a double effect, benefiting the individual as well as stabilising social security systems and supporting the economy; considers it necessary to take account of the social situation of these citizens and their specific needs, and to better monitor at European level the policies implemented at national level;

23.  Highlights the importance of skills and competences acquired in non-formal and informal learning environments and their validation and certification, and of access to life-long learning, as well as of the commitments and benchmarks of the Strategic Framework on Education and Training 2020; calls on the Commission and the Member States to build systems of recognition of non-formal and informal competences; calls further on the Member States to implement policies ensuring not only access to quality, inclusive education and training at an affordable cost, but also the implementation of the lifelong learning framework approach in the direction of a flexible education path that will foster equity and social cohesion and allow employment opportunities for everyone;

24.  Calls for the establishment and development of partnerships between employers, social partners, public and private employment services, public authorities, social services and education and training institutions in order to provide the tools needed to better respond to the needs of the labour market and prevent long-term unemployment; recalls that personalised and individualised follow-up, capable of delivering effective responses for the long-term unemployed, is indispensable;

25.  Regrets the continuing low rates of public investment, as such investment can be an important trigger for job creation; stresses that EFSI has not developed sufficient investment in social infrastructure and that this is a lost opportunity that must be urgently addressed;

26.  Calls for policies that respect and promote collective bargaining and its coverage in order to reach as many workers as possible while at the same time also aiming at better wage floors in the form of minimum wages set at decent levels and with the involvement of social partners, all this with a view to ending the competitive wage race to the bottom, supporting aggregate demand and economic recovery, reducing wage inequalities and fighting in-work poverty;

27.  Calls on the Member States to ensure that people on temporary or part-time contracts or who are self-employed enjoy equal treatment, also regarding dismissal and pay and have adequate social protection and access to training, and that framework conditions are set to enable them to make a career; calls on the Member States to implement the framework agreements on part-time work and fixed-term employment and to effectively enforce the directive establishing a general framework for equal treatment in employment and occupation;

28.  Calls on the Commission and the Member States to take adequate measures to help refugees settle and integrate, as well as ensuring that public services are sufficiently resourced and that there is early anticipation of the requirements to facilitate their integration;

29.  Deplores the fact that the percentage of people at risk of poverty and social exclusion remains high; points out that high levels of inequality and poverty affect social cohesion while hindering social and political stability; regrets that policies to address this efficiently lack the necessary ambition to have sufficient economic leverage; requests Member States to accelerate their actions towards the achievement of the Europe 2020 target to reduce the number of persons at risk of poverty by 20 million; calls on the Commission and the Member States to make the reduction of inequality a priority; calls for better support and recognition of the work of NGOs, anti-poverty organisations and organisations of people experiencing poverty, encouraging their participation in the exchange of good practices;

30.  Expresses its concern at the low labour market participation rate of ethnic minorities, in particular the Roma community; calls for the proper implementation of Directive 2000/78/EC; stresses the need to foster the role played by specialist NGOs in promoting their participation in the labour market and supporting not only the enrolment of children in education but also avoiding early school leaving, in order to break the circle of poverty;

31.  Considers that it is important to close the investment gap in order to create sustainable growth while not risking the economic and social sustainability of Member States; stresses, in this regard, the emergence of guaranteeing the consolidation of public finances, which is essential for continuing to provide the European social model that characterises the EU;

32.  Regrets that the Commission’s latest recommendations ignored Parliament’s request to strengthen the application of Article 349 TFEU, namely by adopting differentiated measures and programmes to reduce asymmetries, as well as to maximise social cohesion in the EU; urges the Member States, in this context, to establish specific investment programmes for their subregions where unemployment rates exceed 30 %; reiterates its call on the Commission to assist Member States and European regions, particularly outermost regions, in the design and funding of the investment programmes under the MFF;

33.  Recognises the continued fragile situation on the European labour market, which is unable to solve the still high unemployment rates, on the one hand, while on the other companies are demanding a skilled and suitable labour force; calls on the Commission to promote, at Member State level, forms of cooperation involving governments, enterprises, including social economy enterprises, educational institutions, individualised support services, civil society and the social partners, on the basis of exchange of best practices and with a view to adapting the education and training systems of the Member States in order to combat skills mismatch, so as to meet labour market needs;

34.  Stresses that education is a fundamental right that should be guaranteed to all children, and that disparities in the availability and quality of education should be addressed in order to strengthen schooling for all and reduce early school leaving; stresses that matching skills and qualifications with demand and job opportunities is supportive to creating an inclusive EU labour market; believes that guidance and counselling which address individual needs and focus on the evaluation and expansion of individual skills must be a core element of education and skills policies from an early stage on, in every person’s education; calls on Member States to better align education and training with labour market needs across the EU underlines the importance of evaluating the different employment situations in the Member States in order to ensure their specificity and peculiarities;

35.  Recognises that advances in new technologies and the digitisation of European industry present significant challenges for the EU; stresses that the productive models of the EU and of the Member States, supported by their educational models, have to be directed towards high-productivity sectors, in particular those related to ICTs and digitisation, in order to improve the EU’s competitiveness at global level;

36.  Underlines that insufficient and inadequately focused investment in education in digital skills, programming and STEM subjects (science, technology, engineering and mathematics) included, is undermining Europe’s competitive position, the availability of a skilled workforce and the employability of the workforce; takes the view that better skills matching and improved mutual recognition of qualifications will be beneficial for overcoming the gap in terms of skills shortages and mismatches on the European labour market and for jobseekers, especially young people; calls on the Member States to prioritise comprehensive training in digital skills, programming and skills that are highly sought after by employers for all, while at the same time maintaining high standards in traditional education, and to take into account the shift towards the digital economy in the context of upskilling and retraining, which should not be limited to knowledge from the user’s perspective;

37.  Notes that an increased effort is required in many Member States to educate the workforce, including adult education and vocational training opportunities; highlights the importance of lifelong learning, including for older workers, in order to adapt competences to the needs of the employment market; calls for an increase in the promotion targeted at women and girls of STEM subjects, in order to address existing education stereotypes and combat the long-term gender employment, pay and pensions gaps;

38.  Acknowledges the value of new technologies and the importance of digital literacy for the individual’s personal life and successful labour market integration; suggests, therefore, that Member States enhance their investment in better ICT infrastructure and connectivity in educational institutions and develop effective strategies to harness the potential of ICTs in supporting informal learning by adults, and to improve their formal and non-formal education opportunities;

39.  Welcomes the contribution of Erasmus+ in fostering mobility and cultural exchanges across the EU and with third countries; calls for better promotion and use of the European tools for transparency, mobility and recognition of skills and qualifications, with a view to facilitating mobility as regards learning and working; reaffirms the need to ensure mobility opportunities for vocational training, disadvantaged young people and people suffering from different forms of discrimination;

40.  Welcomes the new policy and investment framework provided by the Paris agreement, which will contribute to the creation of new employment opportunities in the low-carbon and low-emission sectors;

41.  Calls on the Commission to stress the importance of mitigating the obstacles and barriers, both physical and digital, that are still faced by people with disabilities in the Member States;

42.  Welcomes the explicit mention of childcare, housing, healthcare and education in relation to improving access to quality services;

43.  Recalls that free movement of workers is a fundamental principle of the Treaty; welcomes the fact that in the Annual Growth Survey 2017 emphasis is placed on the importance of ensuring social fairness through a fair collaboration between the various institutions of the Member States; calls, therefore, on the Member states to provide labour inspectorates or other relevant bodies with adequate resources, and also to improve cross-border cooperation between inspection services and the electronic exchange of information and data, in order to improve the efficiency of the controls intended to combat and prevent social fraud and undeclared work;

44.  Underlines the need to boost domestic demand by promoting public and private investment and promoting socially and economically balanced structural reforms that aim to reduce inequalities and promote quality and sustainable employment, sustainable growth and social investment and responsible fiscal consolidation, thus reinforcing a favourable path towards an environment of greater cohesion and upward social convergence for business and public services; stresses the important role of investment in human capital as a common strategy; also stresses the need to reorientate the Union’s economic policies towards a social market economy;

45.  Calls on the Commission and the Member States to take suitable measures to guarantee to digital workers the same rights and level of social protection as exist for similar workers in the sector concerned;

46.  Notes that micro-enterprises and small and medium-sized enterprises (MSMEs), which represent more than 90 % of all businesses in Europe and are the engine of the European economy, as well as health and social services and social and solidarity enterprises, contribute effectively to sustainable and inclusive development and the creation of quality employment; calls on the Commission and the Member States to give greater consideration to the interests of MSMEs in the policy-making process by applying the SME test all along the legislative process, in accordance with the ‘Think small first principle’, and to promote existing forms of financial support for micro-enterprises, such as the Employment and Social Innovation (EaSI) programme; considers it of utmost importance to reduce the administrative burden on such companies and to eliminate unnecessary legislation while not undermining labour and social rights; stresses the need to facilitate a second chance for entrepreneurs who in their first attempt failed in a non-fraudulent way and had respected employees’ rights;

47.  Highlights that social entrepreneurship is a growing field that can boost the economy while simultaneously alleviating deprivation, social exclusion and other societal problems; therefore considers that entrepreneurship education should include a social dimension and should address matters such as fair trade, social enterprises, and alternative business models, including cooperatives, with a view to achieving a more social, inclusive and sustainable economy;

48.  Urges the Commission and the Council to explore how to increase productivity by investing in human capital, taking into account that the most competent, well-integrated and fulfilled workers are those that can best address the demands and challenges facing enterprises and services;

49.  Encourages the Member States to focus on the status of self-employed entrepreneurs, in order to ensure that they have adequate social protection as regards sickness, accident and unemployment insurance and pension rights;

50.  Recalls the importance of implementing a true culture of entrepreneurship, which stimulates young people from an early age; calls, therefore, on the Member States to adapt their education and training programmes in line with this principle; alerts Member States to the importance of creating incentives for entrepreneurship, in particular through the implementation of fiscal rules and reduction of administrative burdens; calls on the Commission, in close cooperation with the Member States, to take measures to provide better information on all European funds and programmes having the potential to boost entrepreneurship, investment and access to finance, such as Erasmus for Young Entrepreneurs;

51.  Stresses the leverage effect of the EU budget on national budgets; stresses the complementary role played by the EU budget in achieving the Union’s goals under the social policies charted in the Annual Growth Survey 2017, aiming at the creation of more and better jobs throughout the EU;

52.  Is concerned with the delay in implementing the operational programmes during the current programming period; notes the fact that by September 2016 only 65 % of competent national authorities had been designated, and calls on the Member States to make more active use of the European Structural and Investment Funds (ESIFs) and the YEI to address employment and social priorities and support the implementation of the CSRs that address, in particular and in an inclusive manner, social and employment matters; however, at the same time underlines that these funds should not be used solely to implement the CSRs, since this could potentially lead to other important investment areas being left out; highlights that further efforts should be made to simplify procedures, notably in the case of horizontal and sectorial financial rules, and to remove barriers for civil society to accessing funds;

53.  Notes that economic growth in the EU and the euro area remains modest; stresses that investment is needed in research, innovation, and education; notes that the 2017 EU budget allocates EUR 21 312,2 million in commitment appropriations for competitiveness, growth and jobs, through programmes such as Horizon 2020, COSME, and Erasmus+;

54.  Highlights that European funds and programmes such as Erasmus for Entrepreneurs, the European Employment Services (EURES), the programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME), the programme for Employment and Social Innovation (EaSI) and the European Fund for Strategic Investments (EFSI), include the potential to facilitate access to financing and boost investment and, therefore, entrepreneurship; recalls the importance of the partnership principle, the principle of additionality, the bottom-up approach, adequate resource allocation, and a good balance between reporting duties and data collection from those profiting from the funds; calls on the Commission to ensure the close monitoring of the use of EU funds to improve effectiveness; Calls on the Commission to provide CSRs on the implementation of EU funds, in order to increase the coverage and effectiveness of social and active labour market policies at national level;

55.  Welcomes the allocation in 2017 of an additional EUR 500 million on top of the draft budget for the YEI and of EUR 200 million to boost key initiatives for growth and job creation; recalls the need to make better use of the available funds and initiatives related to education and training, culture, sport and youth, and to enhance their investment in these sectors where necessary, especially with regard to thematic areas with direct relevance to the Europe 2020 strategy, such as early school leaving (ESL), higher education, youth employment, vocational education and training (VET), lifelong learning and mobility, in order to build resilience and reduce unemployment, especially amongst the young and the most vulnerable groups, prevent radicalisation and ensure long-term social inclusion;

56.  Welcomes the proposal from the Commission to extend EFSI and double its amount to reach EUR 630 billion by 2022, while at the same time improving geographical and sectorial coverage; notes that EFSI has so far not been particularly successful in improving social and economic convergence between Member States and their regions within the Union, or in targeting social infrastructure; recalls that most projects are being approved in the economically more healthy regions of western Europe, thus deepening the investment gap between Member States and reinforcing European imbalances; asks the Commission to help the weaker regions with the application process, but not to modify the basic premise of selecting projects solely on the basis of their quality; calls urgently on the Commission to support social enterprises and SMEs in being able to access the EFSI; calls on the Commission and the European Investment Bank to take additional and proactive steps to ensure that all Member States and sectors are being appropriately targeted with a view to accessing EFSI, in particular those contributing directly to tackling poverty and social exclusion; stresses the need to reinforce administrative capabilities such as the Advisory Hub; regrets that there is no available data on the jobs that are expected to be created as result of EFSI investments; calls on the Commission to monitor and control investments under the EFSI and measure their economic and social impact, and to ensure that EFSI does not duplicate existing financial programmes or substitute direct public spending; reiterates its call for investment in human and social capital in areas such as healthcare, childcare and affordable housing;

57.  Points out that the outermost regions are facing a series of structural constraints, the permanence and combination of which severely restrain their development; calls on the Commission to bolster the application of Article 349 TFEU;

58.  Stresses the need for the Commission and the Member States to reach a stronger commitment to apply Article 174 of the TFEU; emphasises that greater territorial cohesion implies greater economic and social cohesion, and therefore calls for strategic investment in the regions concerned, in particular in broadband, with a view to making them more competitive, improving their industry and territorial structure and, ultimately, stabilising their population;

59.  Invites the Commission and the Member States to involve all levels of government and relevant stakeholders in the identification of obstacles to investment, focusing on the those regions and sectors most in need as well as making available adequate instruments bringing together public and private financing;

60.  Calls on the Commission to introduce policies designed to combat demographic decline and the dispersion of the population; stresses that EU cohesion policy should prioritise attention for regions suffering demographic decline;

61.  Highlights that universal access to public, solidarity-based and adequate retirement and old-age pensions must be granted to all; acknowledges the challenges faced by Member States to strengthen the sustainability of pension systems, but stresses the importance of safeguarding solidarity in pension systems by strengthening the revenue side without necessarily increasing the retirement age; underlines the importance of public and occupational pension systems which provide an adequate retirement income well above the poverty threshold and allow pensioners to maintain their standard of living; believes that the best way to ensure sustainable, safe and adequate pensions for women and men is to increase the overall employment rate and quality jobs across all ages, improve working and employment conditions and commit the necessary supplementary public spending; believes that pension system reforms should focus among other aspects on the effective retirement age and reflect labour market trends, birth rates, the health and wealth situation, working conditions and the economic dependency ratio; considers that these reforms must also take account of the situation of millions of workers in Europe, particularly women, young people and the self-employed, suffering insecure, atypical employment, periods of involuntary unemployment and reduced working time;

62.  Points out to the Member States, in view of the ageing of Europe’s citizens and its impact in terms of increasing informal and formal care needs, the need to invest in public health promotion and disease prevention while ensuring and improving the sustainability, safety, adequacy and effectiveness of social protection systems and the provision of quality long-term social services over the coming decades; encourages the Member States, therefore, to develop strategies to ensure adequate funding, staffing and development for those systems and services and to extend the coverage of social security systems for the benefit of society and the individual; in particular, urges the Commission, Member States and social partners to:

   encourage higher employment rates for all age groups;
   work to reduce gender segregation and the gender pay gap;
   adapt labour markets for older workers through age-friendly working conditions enabling them to work up to statutory retirement age;
   combat age stereotypes in labour markets;
   ensure a life-cycle and preventive approach to occupational health and safety;
   focus on work-life balance for persons with care responsibilities, through appropriate care-and-leave schemes and by supporting informal carers;
   support and inform employers, especially SMEs, on how work environments can be improved to allow workers of all ages to stay productive;
   support public employment services to enable them to provide meaningful assistance to older jobseekers;
   invest in and promote lifelong learning for workers of all ages, both inside and outside the workplace, and develop systems for skills validation and certification;
   help older workers to remain active longer and prepare for retirement through employee-driven flexible working conditions allowing them to reduce their working time during the transition between work and retirement;

63.  Underlines the need for the Commission to monitor developments in homelessness and housing exclusion, in addition to the evolution of house prices in the Member States; calls for urgent action to address rising levels of homelessness and housing exclusion in many Member States; is concerned at the potential social consequences of the high volume of non-performing loans on banks’ balance sheets, and especially at the Commission’s statement that sale to non-bank specialised institutions should be encouraged, which could lead to waves of evictions; encourages Member States, the Commission and the EIB to make use of EFSI for social infrastructure, including implementation of the right to adequate and affordable housing for all;

64.  Notes with concern that in some Member States wages are insufficient to ensure a decent life, thus transforming workers into ‘working poor’ and discouraging the unemployed from returning to the labour market; in this regard, supports boosting collective bargaining;

65.  Encourages the Member States to implement the necessary measures for the social inclusion of refugees, as well as of people of ethnic minority or immigrant origin;

66.  Welcomes the fact that in the Annual Growth Survey 2017 emphasis is placed on the need to promote tax and benefit reforms aimed at improving work incentives and making work pay, as tax systems can also contribute to combating income inequalities and poverty, as well as increasing competitiveness at a global level; calls on the Member States to gradually shift taxes from labour to other sources;

67.  Calls for reforms in health and long-term care systems to focus on the development of health prevention and promotion, the maintenance of quality universally accessible healthcare services, and the reduction of inequalities in access to healthcare services;

68.  Calls on the Commission and the Member States to work together on removing the obstacles to labour mobility, ensuring that EU mobile workers are treated equally with non-mobile workers;

69.  Calls on the Member States to increase the coverage, efficiency and effectiveness of active and sustainable labour market policies, in close cooperation with social partners; welcomes the call made in the AGS 2017 for more efforts to develop measures aimed at supporting labour market inclusion for disadvantaged groups, in particular persons with disabilities, in view of the long-term positive economic and social impact;

70.  Calls on the Member States to set ambitious social standards based on their own CSRs, in line with their national competence and financial and fiscal situation, especially by introducing adequate minimum income schemes across the whole lifespan where such schemes do not exist, and by closing the gaps in adequate minimum income schemes created by insufficient coverage or non-take-up;

71.  Welcomes the Commission’s initiative as regards launching consultations on the setting- up of a European pillar of social rights; considers that this initiative should be able to stimulate the development of more flexible skills and competences, lifelong learning actions and active support for quality employment;

72.  Reiterates the request made to the Commission in the latest opinion prepared by the Committee on Employment and Social Affairs for the Committee on Economic and Monetary Affairs to consider the introduction of a procedure for social imbalances in the design of CSRs, in order to avoid a race to the bottom, in terms of standards based on the effective use of social and employment indicators in the framework of macroeconomic surveillance;

73.  Calls on Member States to place greater emphasis on breaking the poverty cycle and promoting equality; calls on the Commission to make stronger recommendations to Member States regarding social inclusion and protection, also looking beyond the labour force, and in particular on investing in children;

74.  Welcomes the involvement in the European Semester process of the social partners, the national parliaments and other relevant stakeholders from civil society; reiterates that social dialogue and dialogue with civil society are key to achieving sustained change for the benefit of all, and are essential for enhancing the effectiveness and adequacy of European and national policies, and must therefore be pursued in all phases of the Semester; highlights the need to make involvement more effective by ensuring useful timing, access to documents, and dialogue with interlocutors at the appropriate level;

75.  Recalls the various requests for an agenda in which the position of Parliament is strengthened and taken into account before the Council takes a decision; calls, furthermore, for the Committee on Employment and Social Affairs to be placed on an equal footing, considering their specific competences, with the Committee on Economic and Monetary Affairs whenever Parliament is called to give its opinion at the various stages of the European Semester;

76.  Considers that a EU social convention should be convened in which representatives of the social partners, the national governments and parliaments and the EU institutions discuss the future and structure of the European social model, with public participation;

77.  Calls once more for the role of the EPSCO Council in the European Semester to be strengthened;

78.  Instructs its President to forward this resolution to the Council and the Commission.

(1) Texts adopted, P8_TA(2016)0355.
(2) OJ C 153 E, 31.5.2013, p. 57.
(3) OJ L 307, 18.11.2008, p. 11.
(4) Texts adopted, P8_TA(2016)0416.
(5) Texts adopted, P8_TA(2016)0297.
(6) Texts adopted, P8_TA(2016)0059.
(7) OJ C 316, 30.8.2016, p. 83.
(8) Texts adopted, P8_TA(2016)0033.
(9) Texts adopted, P8_TA(2015)0401.
(10) Texts adopted, P8_TA(2015)0384.
(11) Texts adopted, P8_TA(2015)0389.
(12) Texts adopted, P8_TA(2015)0321.
(13) Texts adopted, P8_TA(2015)0320.
(14) OJ C 289, 9.8.2016, p. 19.
(15) OJ C 224, 21.6.2016, p. 19.
(16) Texts adopted, P7_TA(2014)0394.
(17) OJ C 76 E, 25.3.2010, p. 16.
(18) http://www.eca.europa.eu/Lists/ECADocuments/SR15_03/SR15_03_EN.pdf
(19) http://www.eurofound.europa.eu/european-working-conditions-surveys-ewcs
(20) https://www.eurofound.europa.eu/young-people-and-neets-1
(21) See Eurofound report on youth unemployment.
(22) Joint employment report 2016, p. 2.
(23) OECD report: ‘In it together: why less inequality benefits all’, 2015.
(24) IMF report: ‘Causes and consequences of income inequality’, June 2015.


Single Market Governance within the European Semester 2017
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European Parliament resolution of 15 February 2017 on the Annual Report on the Single Market Governance within the European Semester 2017 (2016/2248(INI))
P8_TA(2017)0040A8-0016/2017

The European Parliament,

–   having regard to its resolution of 25 February 2016 on Single Market governance within the European Semester 2016(1), and to the Commission’s follow-up thereon adopted on 27 April 2016,

–  having regard to its resolution of 11 March 2015 on Single Market governance within the European Semester 2015(2), and to the Commission’s follow-up thereon adopted on 3 June 2015,

–  having regard to its resolution of 25 February 2014 on Single Market governance within the European Semester 2014(3), and to the Commission’s follow-up thereon adopted on 28 May 2014,

–  having regard to its resolution of 7 February 2013 with recommendations to the Commission on the governance of the Single Market(4), and to the Commission’s follow-up thereon adopted on 8 May 2013,

–  having regard to its resolution of 26 May 2016 on the Single Market Strategy(5),

–  having regard to its resolution of 26 May 2016 on non-tariff barriers in the single market(6),

–  having regard to the Commission communication of 26 November 2015 on the Annual Growth Survey 2016 – Strengthening the recovery and fostering convergence (COM(2015)0690),

–  having regard to the Commission communication of 16 November 2016 on the Annual Growth Survey 2017 (COM(2016)0725),

–  having regard to the Commission communication of 28 October 2015 on ‘Upgrading the Single Market: more opportunities for people and business’ (COM(2015)0550) and the report on ‘Single Market Integration and Competitiveness in the EU and its Member States’ (SWD(2015)0203),

–  having regard to the Commission communication of 6 May 2015 on ‘A Digital Single Market Strategy for Europe’ (COM(2015)0192),

–  having regard to the Commission communication of 8 June 2012 on ‘Better Governance for the Single Market’ (COM(2012)0259),

–  having regard to the Commission communication of 8 June 2012 on the implementation of the Services Directive (COM(2012)0261), as updated in October 2015,

–  having regard to the study of September 2014 entitled ‘The Cost of Non-Europe in the Single Market’ commissioned by the Committee on Internal Market and Consumer Protection,

–  having regard to the Commission communication of 21 October 2015 on steps towards completing Economic and Monetary Union (COM(2015)0600),

–  having regard to the study of September 2014 entitled ‘Indicators for Measuring the Performance of the Single Market – Building the Single Market Pillar of the European Semester’ commissioned by the Committee on Internal Market and Consumer Protection,

–  having regard to the study of September 2014 entitled ‘Contribution of the Internal Market and Consumer Protection to Growth’ commissioned by the Committee on Internal Market and Consumer Protection,

–  having regard to the July 2016 edition of the online Single Market Scoreboard,

–  having regard to the European Council conclusions of 17-18 March 2016,

–  having regard to the European Council conclusions of 28 June 2016,

–  having regard to Protocol No 1 on the role of National Parliaments in the European Union,

–  having regard to Protocol No 2 on the application of the principles of subsidiarity and proportionality,

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on the Internal Market and Consumer Protection (A8-0016/2017),

A.  whereas delivering a deeper and fairer single market will be instrumental in creating new jobs, promoting productivity and ensuring an attractive climate for investment and innovation, as well as a consumer-friendly environment;

B.  whereas this requires a renewed focus across Europe, including the timely completion and implementation of different single market strategies, in particular the Digital Single Market strategy;

C.  whereas this renewed focus must also include the implications of Brexit, inter alia for the free movement of goods and services, the right of establishment, the customs union and the internal market acquis in general;

D.  whereas, following the economic crisis which began in 2008, the EU is still having to face a period of stagnation with sluggish economic recovery, high rates of unemployment and social vulnerabilities; whereas, on a more positive note, the motto of the Annual Growth Survey (AGS) for 2016 was ‘strengthening recovery and fostering convergence’;

E.  whereas the AGS 2017 recalls the need to achieve an inclusive economic recovery which takes the social dimension of the single market into account, and whereas the AGS 2017 also emphasises the need for Europe to invest strongly in its young people and jobseekers, as well as in its start-ups and SMEs;

F.  whereas, despite economic recovery, unemployment remains far too high in many parts of Europe, and whereas the prolonged period of high unemployment is taking its social toll on many Member States;

G.  whereas the European Semester aims to increase the coordination of economic and fiscal policies across the EU in order to enhance stability, promote growth and employment and strengthen competitiveness in line with the objectives of social fairness and protection of the most vulnerable in society; whereas this aim has not been achieved;

H.  whereas the single market is one of the cornerstones of the EU and one of its major achievements; whereas for the European Semester to successfully foster economic growth and stabilise economies, it must equally encompass the single market and policies aimed at its completion;

Strengthening the single market pillar of the European Semester

1.  Reiterates that the single market is one of the foundations of the EU and is the backbone of Member States’ economies and of the European project as a whole; notes that the single market remains fragmented and insufficiently implemented and has great potential for growth, innovation and jobs; stresses that for the EU to successfully strengthen its recovery, foster convergence and support investments in its young people and jobseekers, as well as in start-ups and SMEs, the single market plays an essential role; calls on the Commission to ensure the completion of all dimensions of the single market, including goods, services, capital, labour, energy, transport, and in the digital sector;

2.  Reiterates its call for the creation of a strong single market pillar with a social dimension within the European Semester, with a system of regular monitoring and identification of the country-specific barriers to the single market, which have tended to be introduced lately with a greater impact, frequency and scope in Member States; calls for an in-depth evaluation of single market integration and internal competitiveness; insists that the evaluation of the state of single market integration should become an integral part of the economic governance framework;

3.  Recalls that the European Semester was introduced in 2010 with the aim of ensuring that Member States discuss their economic and budgetary plans with their EU partners at specific times throughout the year, allowing them to comment on each other's plans and monitor progress collectively; stresses the importance of maintaining a focus on social performance as well as the promotion of upward economic and social convergence;

4.  Stresses that the single market pillar within the European Semester should serve to identify the key areas, as regards all dimensions of the single market, for the creation of growth and jobs; stresses, furthermore, that it should also serve as a benchmark for commitment to structural reform in Member States;

5.  Highlights that the single market pillar within the European Semester would allow a regular evaluation of the governance of the single market through systematic checks of national legislation and data analytics tools for detecting non-compliance, improving the monitoring of the single market legislation, enabling the institutions with the necessary information to redesign, implement, apply and enforce the single market regulatory framework and delivering concrete results to the citizens;

6.  Welcomes the Commission’s efforts to ensure that the benefits of globalisation and technological change are distributed fairly across different groups of society, in particular among young people; calls for awareness to be raised at all levels about the impact of policies and reforms on income distribution, guaranteeing equality, fairness and inclusiveness;

7.  Believes that, with regard to national measures or implementation, early intervention may be more effective and better results achieved than through infringement procedures; stresses, nevertheless, that if the early intervention proceedings do not give results, the Commission must use all available measures, including infringement procedures, to ensure full implementation of legislation on the single market;

8.  Reiterates its call on the Commission to take full account of the key growth and job-creation areas for building an EU single market fit for the 21st century, as previously identified by the Commission and further specified in the study of September 2014 entitled ‘The Cost of Non-Europe in the Single Market’ and including services, the Digital Single Market and in particular e-commerce, the consumer acquis, public procurement and concessions and the free movement of goods;

9.  Urges the Commission to carry out systematic monitoring of implementation and enforcement of the single market rules through the country-specific recommendations (CSRs), in particular where those rules make a contribution to structural reforms, and recalls in this context the importance of the new approach taken by the Commission, which emphasises social fairness; invites the Commission to report to Parliament on the progress made by Member States in the implementation of the CSRs related to the functioning of the single market and integration of products, goods and services markets, as part of the Annual Growth Survey package;

10.  Recalls that the overall implementation of the key reforms outlined in the CSRs is still disappointing in some areas and varies across countries; calls on the Member States to speed up progress on the adoption of reforms in line with the CSRs, together with appropriate sequencing and implementation, in order to raise growth potential and foster economic, social and territorial cohesion;

11.  Believes that the ownership of the CSRs by national parliaments needs to be strengthened; encourages the Member States to provide for the possibility of the Commission presenting the CSRs in the national parliaments; calls, furthermore, on the Member States to implement the CSRs; reiterates its request that the Commission report to the competent committee of Parliament on the measures taken to ensure progress in the implementation of the CSRs and the progress achieved thus far;

12.  Invites the Competitiveness Council to take an active role in the monitoring of the implementation of CSRs by Member States as well as in the process of formulating those recommendations;

13.  Highlights that among the goals of the Investment Plan for Europe are removing unnecessary barriers, increasing innovation and deepening the single market while fostering investments in human capital and social infrastructure;

14.  Stresses that improving the investment environment means strengthening the single market by providing greater regulatory predictability and by reinforcing the level playing field in the EU and removing unnecessary barriers to investment both from within and outside the EU; recalls that sustainable investments require a solid and predictable business environment; notes that several work strands have been launched at EU level, as laid out in the Single Market Strategy, the Energy Union and the Digital Single Market, and considers that this EU effort needs to be accompanied by an effort at national level;

15.  Recalls that the new set of recommendations for the euro area include reforms aimed at ensuring open and competitive product and services markets; recalls also that national and trans-border innovation and competition is key to a functioning single market and believes that European legislation should seek to ensure this;

16.  Supports the Commission’s call on Member States to redouble their efforts on the three elements of the triangle of economic policy, and in so doing, put the focus on social fairness in order to deliver more inclusive growth;

17.  Shares the Commission’s view that convergence efforts compatible with the single market must be based on best practices on lifelong learning strategies, effective policies to help the unemployed re-enter the labour market, modern and inclusive social protection and education systems;

Tapping the potential of the single market in key growth areas

18.  Stresses that, despite the abolition of tariff barriers in the single market, a vast number of various unnecessary non-tariff barriers (NTBs) still exist; highlights that strengthening the single market requires urgent action at both EU and national level in order to address those unnecessary NTBs in a way which is compatible with the promotion of social, consumer and environmental standards, in order to generate more competition and create growth and jobs; emphasises that protectionism and discriminatory measures by Member States should not be tolerated; recalls its request that the Commission present in 2016 a comprehensive overview of NTBs in the single market and an analysis of the means for tackling them, making a clear distinction between an NTB and regulations for implementing a legitimate public policy objective of a Member State in a proportionate manner, including an ambitious proposal to eliminate these NTBs as soon as possible in order to unleash the still untapped potential of the single market;

19.  Highlights that barriers related to the free provision of services are of particular concern as they hamper, above all, the cross-border activity of small and medium-sized enterprises, which are a driving force of development of the EU economy; points out that disproportionate administrative requirements, inspections and sanctions can lead to the reversal of single market achievements;

20.  Emphasises the Single Market Strategy and its targeted actions, which should be aimed at creating opportunities for consumers, professionals and businesses, especially for SMEs, encouraging and enabling the modernisation and innovation that Europe needs, and ensuring practical delivery that benefits consumers and businesses in their daily lives; urges the Commission and the Member States to ensure the best possible conditions for the collaborative economy to develop and thrive; underlines that the collaborative economy holds enormous potential in terms of growth and consumer choice;

21.  Calls on the Member States to introduce reforms and policies to facilitate the diffusion of new technologies to ensure that their benefits can spill over a wider range of firms; calls on the Commission to promptly present the concrete proposals, referred to in the AGS 2017, linked to the enforcement of single market rules as well as measures in the area of business services, including facilitating their cross-border provision and the creation of a simple, modern and fraud-proof VAT system;

22.  Welcomes the Commission’s announcement in the AGS 2017 of the ongoing work on a single EU authorisation framework that would directly apply to large projects with a cross-border dimension or major investment platforms that involve national co-financing;

23.  Calls on the Commission to ensure that the EU public procurement rules are implemented in a timely manner, in particular the deployment of e-procurement and the new provisions encouraging the division of contracts into lots, which is essential to foster innovation and competition and to support SMEs in procurement markets;

24.  Emphasises, in respect of the single market in services, that there is a clear need to improve the cross-border provision of services while maintaining the high quality of these services; takes note of the Commission proposal for a European services card and for a harmonised notification form; encourages the Commission to review market developments and, if necessary, take action in connection with insurance requirements for business and construction service providers;

25.  Notes that more than 5 500 professions across Europe require specific qualifications or a specific title, and welcomes, in this context, the mutual evaluation of regulated professions conducted by the Commission with the Member States;

26.  Calls on the Commission to act strongly against protectionism by Member States; considers that Member States should refrain from discriminatory measures, such as trade and tax laws that only affect certain sectors or business models that distort competition, making it difficult for foreign businesses to establish themselves in a given Member State, which constitutes a clear breach of internal market principles;

27.  Anticipates, in respect of the single market in goods, a Commission proposal for a revision of the Mutual Recognition Regulation which should ensure that companies have an effective right to free circulation within the EU of products that are lawfully marketed in a Member State; emphasises that the principle of mutual recognition is not applied and respected properly by Member States, which often makes companies focus on overcoming the difficulties connected to the lack of implementation instead of conducting business;

28.  Calls on the Commission to press forward with its vision for a single and coherent European Standardisation System that adapts to the changing environment, supports multiple policies and brings benefits to consumers and businesses; highlights that European standards are frequently adopted worldwide, not only bringing the benefits of interoperability and safety, cost reductions and easier integration of companies into the value chain and trade, but also empowering industry through internationalisation;

29.  Takes the view that advancing the Digital Single Market is crucial to stimulating growth, creating quality jobs, promoting necessary innovation in the EU market, keeping the European economy globally competitive and bringing benefits to both businesses and consumers; calls on the Member States to fully cooperate in implementing the Digital Single Market;

Strengthening the governance of the single market

30.  Reiterates its call on the Commission to improve governance of the single market by developing a set of analytical tools including social indicators to more properly measure its performance within the framework of the single market pillar of the European Semester; believes that such an analytical tool could provide useful input for the CSRs, the AGS, the European Council’s guidance to Member States and the national action plans aimed at implementing the single market guidelines;

31.  Calls for the framework for single market governance to be enforced and for the monitoring and assessment of the correct, timely and effective implementation and application of single market rules to be strengthened; calls on the Member States to enhance their performance in the use of the single market governance tools and to better use the Single Market Scoreboard data available for each Member State as well as their evolution in terms of policy performance;

32.  Is still of the opinion that there is a need to define an integrated measurement system, combining different methodologies such as composite indicators, a systematic set of indicators and sectorial tools, so as to measure the performance of the single market for the purpose of embedding it in the European Semester; calls on the Commission, in order both to measure and to provide an impetus for deepening the single market in key priority areas, to consider a headline indicator and a target for this indicator as regards single market integration;

33.  Reiterates its call on the Commission to introduce, where justified, quantitative targets for the reduction of unnecessary administrative burdens at European level; asks that these quantitative targets be considered in the Commission’s new initiative on reducing administrative burdens;

34.  Believes that Member States have to step up their efforts to modernise their public administrations by providing more, and better accessible, digital services for citizens and businesses, and to facilitate cross-border cooperation and interoperability of public administrations;

35.  Calls on the Commission to precede each legislative initiative with a thorough impact assessment which takes into account the consequences of the act for the business environment in all Member States and to carefully assess the right balance between costs and objectives of the project for the EU as a whole;

36.  Calls on the Commission to rigorously pursue its actions in the area of smart enforcement and a culture of compliance, so as to remedy the situation whereby not all the opportunities that the single market offers on paper are a reality today because EU law has not been fully implemented and enforced;

37.  Calls on the Commission to strengthen the market surveillance mechanism to detect unsafe and non-compliant products and to remove them from the single market; calls again for the immediate adoption of the Product Safety and Market Surveillance Package by the Council;

38.  Welcomes and eagerly anticipates the Commission initiative to create a Single Digital Gateway to build on and improve existing tools and services, such as the Points of Single Contact, the Product Contact Points, the Product Contact Points for Construction, the Your Europe portal and SOLVIT, in a user-friendly way for the benefit of both citizens and businesses;

39.  Acknowledges the positive role of the ‘EU Sweeps’ actions, launched by the Commission to enhance enforcement through coordinated control actions to identify breaches of consumer law in the online environment;

40.  Recognises the importance of better regulation principles and the REFIT initiative, ensuring more coherence in current and future legislation while preserving the regulatory sovereignty and the need for regulatory security and predictability;

41.  Stresses the importance of the Commission's help and cooperation with Member States in the field of better transposition, implementation and application of single market legislation; stresses, in this context, the need for further actions at national level, including with a view to reducing administrative burdens and avoiding adding additional requirements when transposing directives into national law (‘gold-plating’), such as tax barriers to cross-border investment;

42.  Stresses that the single market should continue to work for all actors – EU citizens, in particular students, professionals and entrepreneurs, especially SMEs – in all Member States, which should remain in permanent dialogue and should be committed to assessing what works and what does not, and in what way single market policy should be developed in the future; highlights, in this context, the role of the Single Market Forum organised annually by the Commission in cooperation with local partners such as national authorities, civil society stakeholders, social partners, chambers of commerce and business associations;

o
o   o

43.  Instructs its President to forward this resolution to the Commission, the Council, the European Council and the governments and parliaments of the Member States.

(1) Texts adopted, P8_TA(2016)0060.
(2) OJ C 316, 30.8.2016, p. 98.
(3) Texts adopted, P7_TA(2014)0130.
(4) OJ C 24, 22.1.2016, p. 75.
(5) Texts adopted, P8_TA(2016)0237.
(6) Texts adopted, P8_TA(2016)0236.


Banking Union – Annual Report 2016
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European Parliament resolution of 15 February 2017 on Banking Union – Annual Report 2016 (2016/2247(INI))
P8_TA(2017)0041A8-0019/2017

The European Parliament,

–  having regard to the Commission Action plan on a Capital Markets Union of 30 September 2015 (COM(2015)0468),

–  having regard to its resolution of 19 January 2016 on ‘Stocktaking and challenges of the EU Financial Services Regulation: impact and the way forward towards a more efficient and effective EU framework for Financial Regulation and a Capital Markets Union’(1),

–  having regard to the Euro Area Summit Statement of 29 June 2012, in which the participants stated their intention ‘to break the vicious circle between banks and sovereigns’(2),

–  having regard to the European Systemic Risk Board’s first EU Shadow Banking Monitor of July 2016,

–  having regard to the 2016 International Monetary Fund (IMF) Global Financial Stability Report,

–  having regard to the results of the stress tests conducted by the European Banking Authority (EBA) and published on 29 July 2016,

–  having regard to the results of the EBA CRD IV-CRR / Basel III monitoring exercise based on December 2015 data and released in September 2016,

–  having regard to the ECOFIN Council conclusions of 17 June 2016 on a roadmap to complete the Banking Union,

–  having regard to the Commission communication of 24 November 2015 entitled ‘Towards the completion of the Banking Union’ (COM(2015)0587),

–  having regard to Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions(3) (SSM Regulation),

–  having regard to Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities(4) (SSM Framework Regulation),

–  having regard to the SSM statement on its supervisory priorities for 2016,

–  having regard to the ECB Annual Report on supervisory activities 2015, published in March 2016(5),

–  having regard to European Court of Auditors Special Report 29/2016 on the Single Supervisory Mechanism(6),

–  having regard to the EBA report of July 2016 on the dynamics and drivers of non-performing exposures in the EU banking sector,

–  having regard to the European Systemic Risk Board report on the regulatory treatment of sovereign exposures of March 2015,

–  having regard to the approval by the ECB Governing Council on 4 October 2016 of principles increasing transparency in developing ECB regulations on European statistics, and taking into account the transparency practices of the European Parliament, the Council and the Commission,

–  having regard to the consultation held by the ECB on its draft guidance to banks of September 2016 on non-performing loans,

–  having regard to the ECB Guide on options and discretions available in Union law,

–  having regard to Regulation (EU) 2016/445 of the European Central Bank of 14 March 2016 on the exercise of options and discretions available in Union law(7),

–  having regard to the ongoing discussions within the Basel Committee, and in particular to the consultative document of March 2016 on ‘Reducing variation in credit risk-weighted assets – constraints on the use of internal model approaches’,

–  having regard to the EBA report of 3 August 2016 on the leverage ratio requirements under Article 511 of the Capital Requirements Regulation (CRR) (EBA-Op-2016-13),

–  having regard to the ECOFIN Council conclusions of 12 July 2016 on finalising the post-crisis Basel reforms,

–  having regard to its resolution of 12 April 2016 on the EU role in the framework of international financial, monetary and regulatory institutions and bodies(8),

–  having regard to its resolution of 23 November 2016 on the finalisation of Basel III(9),

–  having regard to the Commission’s ongoing work on the review of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012(10) (CRR), in particular as regards the review of Pillar 2 and the treatment of national options and discretions,

–  having regard to Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council(11) (BRRD),

–  having regard to Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010(12) (SRM Regulation),

–  having regard to the 2015 annual report of the Single Resolution Board (SRB) of July 2016,

–  having regard to the Commission communication on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘Banking Communication’)(13),

–  having regard to Commission Delegated Regulation (EU) 2016/1450 of 23 May 2016 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities(14),

–  having regard to the Commission report of 28 July 2016 on an assessment of the remuneration rules under Directive 2013/36/EU and Regulation (EU) No 575/2013 (COM(2016)0510),

–  having regard to the Financial Stability Board (FSB) Total Loss-Absorbing Capacity (TLAC) term sheet of November 2015,

–  having regard to the Bank for International Settlements (BIS) Working Paper No 558 of April 2016 on ‘Why bank capital matters for monetary policy’,

–  having regard to the EBA’s interim report of 19 July 2016 on the implementation and design of the MREL framework,

–  having regard to the Commission’s supplementary analytical report of October 2016 on the effects of the proposal for a European Deposit Insurance Scheme (EDIS),

–  having regard to the EBA’s final report of 14 December 2016 on the implementation and design of the MREL framework,

–  having regard to the Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund, and in particular Article 16 thereof,

–  having regard to the Memorandum of Understanding of 22 December 2015 between the Single Resolution Board and the European Central Bank in respect of cooperation and information exchange,

–  having regard to Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes(15) (DGSD),

–  having regard to the Commission proposal of 24 November 2015 for a regulation of the European Parliament and of the Council amending Regulation (EU) No 806/2014 in order to establish a European Deposit Insurance Scheme (COM(2015)0586),

–  having regard to the various EBA guidelines issued under the Deposit Guarantee Scheme Directive, in particular the final reports on guidelines on cooperation agreements between deposit guarantee schemes of February 2016 and on guidelines on stress tests of deposit guarantee schemes of May 2016,

–  having regard to the statement of the Eurogroup and the ECOFIN Ministers of 18 December 2013 on the SRM backstop,

–  having regard to the Council statement of 8 December 2015 on Banking Union and bridge financing arrangements for the Single Resolution Fund,

–  having regard to Protocol No 1 on the role of national parliaments in the European Union,

–  having regard to Protocol No 2 on the application of the principles of subsidiarity and proportionality,

–  having regard to Rule 52 of its Rules of Procedure,

–  having regard to the report of the Committee on Economic and Monetary Affairs (A8-0019/2017),

A.  whereas the establishment of the Banking Union (BU) is an indispensable component of a monetary union and a fundamental building block of a genuine Economic and Monetary Union (EMU); whereas further efforts are needed as the Banking Union remains incomplete as long as it lacks a fiscal backstop and a third pillar, this being a European approach to deposit re-/insurance which is currently being debated at committee level; whereas a completed Banking Union will be an important contribution to breaking the sovereign-risk nexus;

B.  whereas the European Central Bank (ECB) might on specific occasions suffer from conflict of interests due to its dual responsibility as both a monetary policy authority and a banking supervisor;

C.  whereas the capital and liquidity ratios of EU banks have in general steadily improved over the last years; whereas risks to financial stability nevertheless remain; whereas the current situation calls for caution when introducing extensive regulatory changes, especially with regard to the financing environment for the real economy;

D.  whereas a proper clean-up of bank balance sheets after the crisis has been delayed and this continues to hamper economic growth;

E.  whereas it is not the role of the European institutions to ensure the profitability of the banking sector;

F.  whereas the objective of the new resolution regime that entered into force in January 2016 is to bring about a change of paradigm from bailout to bail-in; whereas market participants still need to adapt to the new system;

G.  whereas participation in the Banking Union is open to Member States that have not yet adopted the euro;

H.  whereas all Member States that have adopted the euro make up the Banking Union; whereas the euro is the currency of the European Union; whereas all Member States, with the exception of those having a derogation, are committed to joining the euro and therefore to joining the Banking Union;

I.  whereas transparency and accountability of the Commission vis-à-vis the European Parliament are key principles; whereas this implies proper follow-up of Parliament’s recommendations by the Commission and proper assessment and monitoring of this follow-up by Parliament;

J.  whereas our work on the Capital Markets Union (CMU) should not reduce the pressure for completion of our work on the Banking Union, which remains a pre-requirement for financial stability in the bank-reliant landscape of the European Union;

K.  whereas recent data show that the estimated value of all non-performing loans (NPLs) in the euro area is EUR 1 132 billion(16);

Supervision

1.  Is concerned at the high level of NPLs, as, according to ECB data, by April 2016 banks in the euro area held EUR 1 014 billion in such loans; considers that reducing this level is crucial; welcomes the efforts already being made to reduce the level of NPLs in some Member States; notes, however, that until now the issue has mainly been addressed at national level; considers that the problem needs to be solved as soon as possible, but acknowledges that a definitive solution will take time; considers that any suggested solution should take into account the source of NPLs, the impact on banks’ lending capacity to the real economy, and the need for the development of a primary and secondary market for NPLs, possibly in the form of safe and transparent securitisation, that involves both Union and national levels; recommends that the Commission assists Member States in, among others, the establishment of dedicated asset management companies (or ‘bad banks’) and enhanced supervision; reiterates in this context the importance of the ability to sell off NPLs in order to free up capital, which is especially important for bank lending to SMEs; welcomes the ECB’s consultation on a draft guidance to banks on NPLs as a first step, but believes that more substantial progress has to be made; welcomes the Commission’s proposal on insolvency and restructuring including early restructuring and second chance, in the framework of the CMU; calls on Member States, pending its adoption and in order to complement it, to improve their relevant legislation, especially with regard to the length of recovery procedures, the functioning of judicial systems, and more generally their legal framework concerning the restructuring of debt, and to implement necessary sustainable structural reforms aimed at economic recovery in order to tackle NPLs; notes that, according to the Bank for International Settlements, some euro area banks weakened their capital bases by paying substantial dividends, sometimes exceeding the level of retained earnings, throughout the crisis years; considers that the capital position of banks can be strengthened by reducing dividend payments and raising fresh equity;

2.  Encourages all Member States that have not yet adopted the euro to take all necessary steps to do so, or to join the BU, in order to progressively align the BU with the entire internal market;

3.  Is concerned at the lingering instability of the banking landscape in Europe, as underlined inter alia in the 2016 IMF Global Financial Stability Report, which states that Europe would, even under a cyclical recovery, still have a high proportion of weak and challenged banks; notes the low profitability of a number of institutions in the euro area; points out that explanations for this situation include among others the stock of NPLs, the interest rate environment, and possible demand-side issues; endorses the call made by the IMF for fundamental changes in both bank business models and system structure in order to ensure a healthy European banking system;

4.  Considers that there are risks associated with sovereign debt; notes as well that in some Member States financial institutions have over-invested in bonds issued by their own government, leading to excessive ‘home bias’ while one of the main objectives of the BU is to break the bank-sovereign-risk nexus; notes that an appropriate prudential treatment of sovereign debt might create incentives for banks to better manage their sovereign exposures; notes, however, that government bonds play a critical role as a source of high-quality, liquid collateral and in the conduct of monetary policy, and that modifying their prudential treatment, especially if no phasing-in approach is envisaged, could have a significant effect on both the financial sector and the public sector, and that this necessitates a careful consideration of the pros and cons of a revision of the current framework before any proposal is made; takes note of the various policy options set out in the report of the High Level Working Group on the prudential treatment of sovereign exposures discussed at the informal ECOFIN meeting of 22 April 2016; considers that the EU regulatory framework should be consistent with the international standard; awaits, therefore the results, of the FSB’s work on sovereign debt with great interest in order to guide future decisions; considers that the European framework should enable market discipline in delivering sustainable policies and providing high- quality and liquid assets for the financial sector and safe liabilities for governments; stresses that, in parallel with the reflections on sovereign debt, reflection should take place on convergence on a wider range of economic issues, on state aid rules and on risks such as misconduct, including financial crime;

5.  Considers it essential for depositors, investors and supervisors to address the excessive variability in risk weights applied to risk-weighted assets of the same class across institutions; recalls that the current rules governing the use of internal models provide a significant level of flexibility for banks and add a layer of modelling risk from the supervisory perspective; welcomes in this respect the work undertaken by the EBA to harmonise key assumptions and parameters, the divergence of which has been identified as one of the main drivers of variability, as well as the work done in ECB banking supervision within the ECB’s Targeted Review of Internal Models (TRIM) project, in order to assess and confirm the adequacy and appropriateness of internal models; encourages further progress on these workstreams; awaits the outcome of the work done internationally to streamline resort to internal models in the case of operational risk and lending to corporates, other financial institutions, specialised finance and equities banks, in order to re-establish the credibility of internal models and ensure that they focus on the areas where they deliver added value; also welcomes the introduction of a leverage ratio to act as a robust backstop, in particular for global systemically important institutions (G-SIIs); stresses the need for a more risk-sensitive standard approach in order to ensure respect of the ‘same risks, same rules’ principle; calls on financial supervisors to allow new internal models only if they do not lead to unjustified significantly lower risk weights; reiterates the conclusions of its resolution of 23 November 2016 on the finalisation of Basel III; in particular, recalls that the regulatory changes planned should not result in overall increases in capital requirements or harm the ability of banks to finance the real economy, in particular SMEs; stresses that the international work should respect the proportionality principle; recalls the importance of not unduly penalising the EU banking model and of avoiding discrimination between EU and international banks; calls on the Commission to ensure that European specificities are considered when developing new international standards in this area, and to take duly into account the proportionality principle and the existence of different banking models when assessing the impact of future legislation implementing internationally agreed standards;

6.  Stresses that reliable access to finance and the sound allocation of capital in Europe’s bank-based financing model depend heavily on robust balance sheets and proper capitalisation, the restoration of which after the financial crises was not and is not uniformly assured across the Union, thus hampering economic growth;

7.  Underlines that the European banking sector plays a key role in financing the European economy and that this is supported by a strong supervision system; welcomes, therefore, the intention of the Commission to maintain the SME Supporting Factor in the upcoming revision of CRD/CRR and to extend it beyond its current threshold;

8.  Points out that guidance provided by international fora should be followed to the greatest extent possible in order to avoid the risk of regulatory fragmentation with regard to the regulation and supervision of large, internationally active banks, without this either preventing a critical approach when needed or precluding targeted departures from international standards when and where the characteristics of the European system are not sufficiently taken into account; recalls the conclusions of its resolution of 12 April 2016 on the EU role in the framework of international financial, monetary and regulatory institutions and bodies; in particular, stresses the importance of the role of the Commission, the ECB and the EBA in terms of engaging in the work of the BCBS and providing Parliament and the Council with transparent and comprehensive updates on the state of play of the BCBS discussions; considers that the EU should work on having an appropriate representation in the BCBS, notably for the euro area; calls for a stronger visibility of this role during ECOFIN meetings, as well as enhanced accountability to Parliament’s Committee on Economic and Monetary Affairs; underlines that the BCBS and other fora should help promote a level playing field at the global level by mitigating – rather than exacerbating – the differences between jurisdictions;

9.  Points to the risks, including systemic risks, of a rapidly growing shadow banking sector, as shown by the 2016 EU Shadow Banking Monitor; insists that any action on the regulation of the banking sector must be accompanied by appropriate regulation of the shadow banking sector; calls, therefore, for coordinated action in order to ensure fair competition and financial stability;

10.  Underlines the need for a comprehensive view of the cumulative impact of the different changes in the regulatory environment, whether they concern supervision, loss absorption, resolution or accounting standards;

11.  Stresses that national options and discretions may hinder the creation of a level playing field between Member States and the comparability of the financial reporting by banks to the public; is pleased with the opportunity offered by the newly proposed amendment to the CRR to close or restrict the use of some of them at Union level in order to address existing barriers and segmentation, and to keep only those that are strictly necessary because of the diversity of banking models; urges that this opportunity be fully exploited; welcomes the ECB guidance and regulation harmonising the exercise of some of the national options and discretions within the BU; recalls, however, that when conducting work on the reduction of options and discretions the ECB shall remain within the limits of its mandate; stresses that working towards the deepening of the single rulebook is crucial, and underlines the need to streamline the current overlapping and intertwining of existing, amended and new legislation; calls on the ECB to make fully public the Supervisory Manual laying down common processes, procedures and methods for conducting a euro area-wide supervisory review process;

12.  Stresses that there has been a natural learning phenomenon for all the members of the Supervisory Board since the creation of the SSM, dealing with a variety of different business models and entities of different sizes, and that this needs to be supported and accelerated;

13.  Notes the clarifications with regard to the objectives of Pillar 2 and its place within the stacking order of capital requirements proposed in the amendments to the Capital Requirements Directive (CRD); notes that the use of capital guidance is said to balance financial stability concerns with the need to leave scope for supervisory judgement and case-by-case analyses; encourages the ECB to clarify the criteria that underline the Pillar 2 guidance; recalls that this guidance does not constrain the Maximum Distributable Amount (MDA) and therefore should not be disclosed; believes that the use of capital guidance should not result in a demonstrable reduction of Pillar 2 requirements; considers that more supervisory convergence is needed concerning the composition of own funds to cover Pillar 2 requirements and guidance; is pleased, therefore, that the issue is addressed in the proposed amendment to the CRD;

14.  Stresses the risks stemming from the holding of level 3 assets, including derivatives, and in particular from the difficulty of their valuation; notes that these risks should be reduced and that this calls for a progressive reduction of the holdings of these assets; calls on the SSM to make this issue one of its supervisory priorities, and to organise, jointly with the EBA, a quantitative stress test on it;

15.  Reiterates the need to ensure higher transparency on the full set of supervisory practices, in particular in the SREP cycle; asks the ECB to publish performance indicators and metrics in order to demonstrate supervisory effectiveness and enhance its external accountability; reiterates its call for more transparency with regard to Pillar 2 decisions and justifications; calls on the ECB to publish Joint Supervisory Standards;

16.  Notes the risks stemming from ‘too-big-to-fail’, too-interconnected-to-fail and too-complex-to-resolve financial institutions; notes that a set of policy measures designed at international level to address these risks have been agreed (notably TLAC, central clearing of derivatives, and capital and leverage ratio add-on for globally systemic banks); is committed to working swiftly on the corresponding legislative proposals for their implementation in the Union, thus reducing further the risks stemming from the too-big-to-fail issue; recalls the words of Mark Carney, Chair of the FSB, to the effect that agreement on proposals for a common international standard on total loss-absorbing capacity for G-SIBs represents a watershed in putting an end to too-big-to-fail banks; also notes that an effective bail-in mechanism and the application of an appropriate level of MREL are an important part of the regulatory measures for addressing this issue and enabling globally systemic banks to be resolved without recourse to public subsidy and without disruption to the wider financial system;

17.  Highlights the limitations of the current stress test methodology; welcomes, therefore, the EBA’s and ECB’s efforts to pursue improvements to the stress testing framework; believes, however, that more should be done to better reflect the possibility and reality of real crisis situations by, inter alia, better incorporating more dynamic elements, such as contagion effects, in the methodology; considers that the lack of transparency characterising the ECB’s own stress tests imply uncertainty in supervisory practices; calls on the ECB to publish the results of its stress test exercise to foster market confidence;

18.  Considers that when a national competent authority (NCA) rejects the demand to take into account specific circumstances in the stress test exercise, this should be communicated to the EBA and the SSM so as to ensure a level playing field;

19.  Welcomes the progress made to prepare for allowing some delegation in the area of fit and proper decisions; points out, nevertheless, that a change in the regulations is needed to allow more and easier delegation of decision-making on certain routine issues, from the Supervisory Board to relevant officials; would welcome such a change, which would contribute to making the ECB’s banking supervision more efficient and effective; calls on the ECB to specify tasks and legal framework for the delegation of decision-making;

20.  Takes note of the report of the European Court of Auditors (ECA) on the functioning of the SSM; takes note of the findings concerning the insufficient level of staffing; calls on NCAs and Member States to fully provide the ECB with the necessary human resources and economic data enabling it to do its job, in particular as regards on-site inspections; calls on the ECB to amend the SSM Framework Regulation in order to formalise commitments by participating NCAs and to implement a risk-based methodology to determine the target number of staff and the composition of skills for Joint Supervisory Teams; takes the view that more involvement of ECB personnel and less reliance on staff from NCAs would improve the independence of supervision, together with the use of staff from the competent authority of one Member State to supervise an institution from another Member State, which also contributes to effectively addressing the risk of supervisory forbearance; welcomes the ECB’s cooperation with the European Parliament on staff working conditions; calls on the ECB to promote a good working environment that fosters professional cohesion within it; recalls the potential conflict of interest between supervisory tasks and responsibility for monetary policy, and the need for a clear separation between both sets of functions; calls on the ECB to perform a risk analysis on possible conflicts of interest and to envisage separate reporting lines where specific supervisory resources are concerned; believes that, while the separation of monetary policy and supervision is a central principle, it should not preclude cost savings enabled by the sharing of services, provided such services are non-critical in terms of policymaking and proper guarantees are established; calls on the ECB to hold public consultations when drafting quasi-legislative measures in order to enhance its accountability;

21.  Underlines that the creation of the SSM has been accompanied by an increase of influence for the European Union on the international stage compared to the pre-existing situation;

22.  Underlines that the separation of the supervisory tasks from monetary policy functions should enable the SSM to take an independent position on all relevant matters, including on potential effects of ECB interest rate targets on the financial position of supervised banks;

23.  Shares the opinion of the ECA that an audit gap has emerged since the establishment of the SSM; is concerned that owing to limitations imposed by the ECB on the ECA’s access to documents, important areas are left unaudited; urges the ECB to fully cooperate with the ECA to enable it to exercise its mandate and thereby enhance accountability;

24.  Recalls the need to find, in regulation as well as in the exercise of supervision, a balance between the need for proportionality and the need for a consistent approach; notes, in this respect, the changes proposed regarding reporting and remuneration requirements in the Commission proposal amending Directive 2013/36/EU; calls on the Commission to prioritise work on a ‘small banking box’, and to extend it to an assessment of the feasibility of a future regulatory framework consisting of less complex and more appropriate and proportional prudential rules specific to different types of banking model; points out that all banks should be subject to an appropriate level of supervision; recalls that appropriate supervision is key to monitoring all risks whatever the size of the banks; respects the division of roles and competences between the SRB, the EBA and other authorities within the European System of Financial Supervision, while underlining the importance of effective cooperation; sees the need to overcome the proliferation of overlapping reporting requirements and national interpretations of European laws in a common market; supports the streamlining efforts made to date, such as the idea behind the European Reporting Framework (ERF), and encourages further efforts in this direction to avoid double reporting and unnecessary additional costs of regulation; calls on the Commission to address the issue in due course, in line with its conclusions from the call for evidence, for instance through a proposal for a common unitary and consolidated supervisory reporting procedure; calls as well for the timely announcement of ad hoc and permanent reporting requirements so as to ensure high data quality and planning security;

25.  Underlines that the safety and soundness of a bank cannot be captured by a point-in-time assessment of its balance sheet alone, as they are ensured through dynamic interactions between the bank and the markets, and affected by various elements in the entire economy; underlines, therefore, that a sound framework for financial stability and growth should be comprehensive and balanced so as to cover dynamic supervisory practices and not focus merely on static regulation with mainly quantitative aspects;

26.  Draws attention to the division of responsibilities between the ECB and the EBA; stresses that the ECB should not become the de facto standard-setter for non-SSM banks;

27.  Notes that on 18 May 2016 the ECB Council adopted the regulation on the collection of granular credit and credit risk data (AnaCredit); calls on the ECB to allow national central banks as much leeway as possible when implementing AnaCredit;

28.  Calls on the ECB not to begin work on any further stages of AnaCredit until after a public consultation exercise has been carried out, with the full involvement of the European Parliament and with particular account being taken of the proportionality principle;

29.  Reiterates its stressing of the importance of strong and well-functioning IT systems corresponding to the needs of the supervisory functions of the SSM and security concerns; regrets recent reports of persisting weaknesses in the IT system;

30.  Welcomes the establishment of National Systemic Risk Boards, but stresses that the establishment of the Banking Union reinforces the need to strengthen macro-prudential policy at the European level in order to properly address potential cross-border spillovers of systemic risk; encourages the Commission to propose a coherent and effective macroprudential supervision in its overall review of the macroprudential framework in 2017; calls on the Commission to be especially ambitious in order to enhance the ESRB’s institutional and analytical capacity to assess risks and vulnerabilities in and beyond the banking sector and to intervene accordingly; considers that borrowing based instruments (such as LTVs and DSTIs) should be embedded in European legislation so as to ensure harmonisation in the use of these additional types of macroprudential instruments; highlights the need to reduce the institutional complexity and lengthy process in the interaction between ESRB, ECB/SSM and national authorities, and between competent and designated national authorities, in the field of macroprudential supervision; welcomes, in this regard, the progress already made on cross-border coordination by the ESRB recommendation on voluntary reciprocity; reiterates its call for the clarification of the linkages between the macroprudential framework and existing microprudential tools, in order to ensure effective interaction of macroprudential and microprudential policy instruments; expresses concern about the vulnerabilities in the real estate sector identified by the ESRB; notes that the EBA is still to deliver RTSs on the condition of capital requirements for mortgage exposure under Articles 124(4)(b) and 164(6) CRR; notes that only a small number of SSM members have activated or plan to activate general systemic risk buffers and a counter-cyclical capital buffer until now; notes that the ECB has so far not fully exercised its macroeconomic supervisory powers by fostering the adoption of macroprudential supervisory instruments by national authorities;

31.  Highlights that the outcome of the referendum on the UK’s membership of the EU requires an assessment of the whole European System of Financial Supervision (ESFS), including the voting modalities inside the ESAs, in particular of the double majority mechanism provided for in Article 44(1) of the EBA regulation; emphasises that possible negotiations following the referendum should not lead to an unlevel playing field between EU and non-EU financial institutions, and should not be used to promote deregulation in the financial sector;

32.  Welcomes the excellent work of the Joint Supervisory Teams (JSTs), which are a good example of European cooperation and knowledge-building; points out that the proposed future use of a rotating system in the organisation of JSTs should guarantee objective supervision while taking into consideration the lengthy process of knowledge-building in this very complex field of expertise;

33.  Welcomes the fact that the Banking Union has widely eliminated the home-host issue in supervision, by the establishment of a single supervisor and the greatly improved exchange of relevant information between supervisory authorities, enabling a more holistic supervision of cross-border banking groups; stresses that, owing to the current incomplete state of the Banking Union, the CRR review on liquidity and capital waivers needs to appropriately take into account consumer protection concerns in host countries;

34.  Welcomes the ECB initiative to oblige supervised banks to report significant cyber-attacks under a real-time alert service, as well as the SSM on-site inspections to supervise cyber-security; calls for the establishment of a legal framework which facilitates the exchange of sensitive information relevant to preventing cyberattacks between banks;

35.  Stresses the crucial role of cybersecurity for banking services and the need to incentivise financial institutions to be very ambitious in protecting consumer data and guaranteeing cybersecurity;

36.  Notes that the SSM has been assigned the task of European banking supervision for the purpose of ensuring compliance with EU prudential rules and of ensuring financial stability, while other supervisory tasks having clear European spillovers have remained in the hand of domestic supervisors; stresses, in this regard, that the SSM should have monitoring powers concerning Anti-Money Laundering (AML) activities of national banking supervisors; emphasises that the EBA should also be assigned additional powers in the field of AML, including the powers to carry out on-site assessments of Member States’ competent authorities, to require the production of any information that is relevant to assessing compliance, to issue recommendations for remedial action, to make those recommendations public, and to take measures that are necessary to ensure that the recommendations are effectively implemented;

37.  Reiterates its call on the EBA to enforce and enhance the consumer protection framework for banking services in line with its mandate, complementing the SSM’s prudential supervision;

Resolution

38.  Recalls the need to adhere to state aid rules when dealing with future banking crises, and that the exception of extraordinary public support must be both precautionary and temporary in nature and cannot be used to offset losses that an institution has incurred or is likely to incur in the near future; calls for the definition of efficient procedures between the SRB and the Commission for decision-making in the event of a resolution, especially concerning the timeframe; takes the view that the flexibility embedded within the current framework should be clarified, and recalls that it should be better exploited in order to address specific situations, without hindering genuine resolution of banks which are insolvent, in particular in the case of preventive and alternative measures involving the use of DGS funds provided for in the Deposit Guarantee Schemes Directive (DGSD) Article 11(3) and (6); calls on the Commission, therefore, to reconsider its interpretation of the relevant state aid rules in an effort to guarantee that the preventive and alternative measures provided for by the European legislator in the DGSD can actually be implemented; notes that specific situations have been treated differently without clear justification; reminds the Commission that a report assessing the continuing need for allowing precautionary recapitalisations and the conditionality attached to such measures was due by 31 December 2015; calls on the Commission to submit such a report as soon as possible;

39.  Invites the Commission to assess, in the light of experience and within the framework of the review of Regulation (EU) No 806/2014, whether the SRB and the national resolution authorities are equipped with sufficient early intervention powers and sufficient early intervention instruments to prevent disruptive outflows of banks’ capital and loss-absorbing capacity during a crisis;

40.  Underlines the importance of clarifying practical issues which are directly affecting resolution, such as the reliance on service providers which provide critical services, for example in the case of outsourced IT services;

41.  Notes the Commission proposals introducing into Pillar 1 a minimum total loss absorbing capacity (TLAC) for global systemically important banks, in line with international standards; takes note of the differences between TLAC and MREL; stresses, however, that both standards share the same objective, namely to make sure that banks have enough regulatory capital and loss-absorbing liabilities to make bail-in an effective instrument in resolution without causing financial instability and without public money being needed, thereby avoiding the socialisation of private risks; concludes, therefore, that a holistic approach to loss absorption can be reached by combining the two, building on TLAC as transposed in the current Commission proposal as the minimum standard, subject to the agreement to be reached by the co-legislators; highlights that due consideration should be given to retaining the two criteria of size and risk-weighted assets, and notes the interconnection between the risk-weighted asset criteria underlying the TLAC standard and the ongoing work in the EU and at the BCBS on internal models and on the finalisation of the Basel III framework; stresses that proper attention should be paid, in calibrating and/or phasing in new MREL requirements, to the need to create a market for MREL-eligible liabilities; highlights the importance of maintaining discretion for the resolution authority when setting MREL, and of making sure that banks hold sufficient subordinated and bail-inable debt; emphasises that market disclosure should be made in an appropriate manner in order to avoid investor misinterpretation of the MREL requirements;

42.  Draws attention to the importance of clarifying in legislation the stacking order between MREL-eligible CET1 and capital buffers; stresses the need to adopt legislation with the purpose of clarifying the responsibilities and powers of, respectively, resolution authorities and competent authorities, concerning early intervention measures to be taken in cases of breaches of MREL requirements; notes the Commission proposal for the introduction of the MREL guidance; reiterates that the calibration of MREL should in all cases be closely linked to and justified by the resolution strategy of the bank at issue;

43.  Draws attention to the importance of clarifying in legislation that MREL-eligible CET1 is on top of capital buffers, so as to prevent double counting of capital;

44.  Stresses that it is crucial to harmonise the hierarchy of claims in bank insolvency across Member States, in order to make the implementation of the BRRD more consistent and effective and to provide certainty to cross-border investors; welcomes, therefore, the Commission’s proposal to go further in the harmonisation of the hierarchy of claims; notes that better harmonisation of the regular insolvency regime and of its hierarchy of claims will also be essential, both, in the case of banks, to avoid discrepancies with the bank resolution regime, and, in the case of companies, to provide additional clarity and certainty to cross-border investors and contribute to addressing the issue of NPLs; welcomes the fact that the BRRD has brought an important change in the hierarchy of insolvency, giving priority to insured deposits, so that they rank senior to all capital instruments, loss-absorbing capacity, other senior debt and uninsured deposits; calls on the SRB to present the results of the resolvability assessments for G-SIBs and other banks, including the proposed measures to overcome impediments to resolution;

45.  Notes the range of legal options available to ensure the subordination of TLAC-eligible debt; points out that none is preferred by the FSB; is of the view that the approach adopted should first and foremost strike a balance between flexibility, effectiveness, legal certainty and the ability of the market to absorb any new class of debt;

46.  Calls for a reflection on the possible negative impact on the real economy from the revision of the Basel rules, the introduction of MREL requirements, the introduction of TLAC and IFRS 9; calls for any solution aimed at smoothing the impacts;

47.  Recalls that the newly introduced resolution regime has resulted in some instruments offered to investors, in particular retail investors, involving a higher risk of loss than under the previous regime; further recalls that bail-inable instruments should only be sold in the first place to appropriate investors who can absorb potential losses without being threatened in their own sound financial standing; therefore urges the Commission to foster the implementation of relevant existing legislation, and calls on the ESAs to contribute strongly to the detection of mis-selling practices;

48.  Warns that the BRRD requirement of contractual recognition for bail-in powers on liabilities governed by non-EU legislation is proving cumbersome to implement; considers this issue an immediate concern; notes the right introduced by the proposed amendments to the BRRD for competent authorities to waive this requirement; considers that this approach allows for flexibility and for a case-by-case assessment of the liabilities concerned; calls on the Commission and the resolution authorities to ensure that the conditions for granting exemptions and the subsequent actual decisions on exemptions do not endanger banks’ resolvability;

49.  Points out that swift and effective exchange of information between supervision and resolution authorities is paramount in order to ensure smooth crisis management; welcomes the conclusion of a memorandum of understanding (MoU) between the ECB and the SRM in respect of cooperation and information exchange; calls on the ECB to specify in the MoU the communication procedures between joint supervisory teams and internal resolution teams; recommends that the attendance of the ECB as a permanent observer at the SRB Plenary and Executive Sessions be made fully reciprocal by allowing a representative of the SRB to attend the Supervisory Board of the ECB, also as a permanent observer;

50.  Takes note of the double role of the Board members of the SRB, who are at the same time members of an executive body with decision-making roles and senior managers accountable in that capacity to the Chair of the Board, and considers that an evaluation of this structure should be undertaken before the end of the current mandate;

51.  Recalls that the substance of the Intergovernmental Agreement on the Single Resolution Fund (SRF) is to be ultimately incorporated into the Union legal framework; calls on the Commission to reflect on ways of doing so; stresses that the upcoming incorporation of the fiscal compact into EU law could provide a useful template;

52.  Calls for the ex ante contributions to the SRF to be calculated in a strongly transparent manner, with efforts to harmonise information on calculation outcomes and improve the understanding of the calculation methodology; calls on the Commission to carry out the review of the calculation of the contributions to the SRF provided for in recital 27 of delegated Regulation (EU) 2015/63 with the utmost care, and in particular to examine the adequacy of the risk factor in order to ensure that the risk profile of less complex institutions is properly taken into account;

53.  Takes note of the statement of the Finance Ministers of 8 December 2015 on the system of bridge financing arrangements for the SRF; notes, in this respect, that 15 out of 19 euro area Member States have already signed a harmonised Loan Facility Agreement with the SRB; recalls that these individual credit lines will only be available as a last resort; is of the opinion that this solution is not sufficient to overcome the bank‑sovereign vicious circle and end taxpayer-funded bailouts; calls for rapid progress in the work by the Council and the Commission on a common fiscal backstop for the SRF, the ultimate liability for the financing of which should rest with the banking sector and which should be fiscally neutral over the medium term, as agreed within the agreement on the SRF and confirmed by the European Council in June 2016;

Deposit insurance

54.  Reiterates its call for a third pillar in order to complete the Banking Union; recalls that the protection of deposits is a common concern for all EU citizens; is currently debating the proposal on EDIS at committee level;

55.  Stresses that the introduction of the EDIS and discussions on this project should not lead to a weakening of the efforts towards improving the implementation of the DGSD; welcomes the work done recently by the EBA to promote convergence in this field; welcomes the fact that all Member States have transposed the BRRD; reminds all Member States of the obligation to apply and correctly implement the BRRD and the DGSD;

56.  Recalls that the role of the Commission is to guarantee a level playing field across the EU and that it should avoid any fragmentation within the internal market;

o
o   o

57.  Instructs its President to forward this resolution to the Council, the Commission, the ECB, the SRB, the national parliaments, and the competent authorities as defined in point 40 of Article 4(1) of Regulation (EU) No 575/2013.

(1) Texts adopted, P8_TA(2016)0006.
(2) http://www.consilium.europa.eu/en/european-council/pdf/20120629-euro-area-summit-statement-en_pdf
(3) OJ L 287, 29.10.2013, p. 63.
(4) OJ L 141, 14.5.2014, p. 1.
(5) https://www.bankingsupervision.europa.eu/ecb/pub/pdf/ssmar2015.en.pdf
(6) ‘Single Supervisory Mechanism – Good start but further improvements needed’, http://www.eca.europa.eu/Lists/ECADocuments/SR16_29/SR_SSM_EN.pdf
(7) OJ L 78, 24.3.2016, p. 60.
(8) Texts adopted, P8_TA(2016)0108.
(9) Texts adopted, P8_TA(2016)0439.
(10) OJ L 176, 27.6.2013, p. 1.
(11) OJ L 173, 12.6.2014, p. 190.
(12) OJ L 225, 30.7.2014, p. 1.
(13) OJ C 216, 30.7.2013, p. 1.
(14) OJ L 237, 3.9.2016, p. 1.
(15) OJ L 173, 12.6.2014, p. 149.
(16) 2017 independent Annual Growth Survey 5th Report, 23 November 2016.


Biological low-risk pesticides
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European Parliament resolution of 15 February 2017 on low-risk pesticides of biological origin (2016/2903(RSP))
P8_TA(2017)0042B8-0140/2017

The European Parliament,

–  having regard to Regulation (EC) No 1107/2009 of the European Parliament and of the Council of 21 October 2009 concerning the placing of plant protection products on the market and repealing Council Directives 79/117/EEC and 91/414/EEC(1), in particular Articles 22 and 47, Article 66(2) and Annex II, point 5 thereof,

–  having regard to Directive 2009/128/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for Community action to achieve the sustainable use of pesticides(2), in particular Articles 12 and 14 thereof,

–  having regard to the draft Commission regulation amending Regulation (EC) No 1107/2009 of the European Parliament and of the Council concerning the placing of plant protection products on the market as regards the criteria for the approval of low- risk active substances (D046260/01),

–  having regard to its resolution of 7 June 2016 on technological solutions for sustainable agriculture in the EU(3),

–  having regard to its resolution of 7 June 2016 on enhancing innovation and economic development in future European farm management(4),

–  having regard to the ‘Implementation Plan on increasing low-risk plant protection product availability and accelerating integrated pest management implementation in Member States’, developed by the Expert Group on Sustainable Plant Protection and endorsed by the Council on 28 June 2016,

–  having regard to the Commission’s Action Plan against the rising threats from Antimicrobial Resistance (COM(2011)0748) and to the upcoming Antimicrobial Resistance (AMR) Action Plan to be launched by the Commission in 2017,

–  having regard to the question to the Commission on biological low-risk pesticides (O-000147/2016 – B8-1821/2016),

–  having regard to the motion for a resolution of the Committee on the Environment, Public Health and Food Safety,

–  having regard to Rules 128(5) and 123(2) of its Rules of Procedure,

A.  whereas the use of conventional plant protection products is increasingly subject to public debate, due to the potential risks they pose to human health, animals and the environment;

B.  whereas the number of active substances available on the EU market used for plant protection is decreasing; whereas EU farmers continue to require a variety of crop protection tools;

C.  whereas it is important to promote the development of alternative procedures or techniques to reduce dependence on conventional pesticides;

D.  whereas preventing food waste is a priority in the EU, and access to appropriate plant protection solutions is essential to preventing damage caused by pests and diseases that results in food waste; whereas, according to the FAO, 20 % of fruit and vegetable production in Europe is lost in the fields(5);

E.  whereas it is still possible to find undesirable pesticide residues in soil, water and the environment in general, and even a certain percentage of agricultural products of plant or animal origin may contain pesticide residues above the maximum residue levels for pesticides;

F.  whereas Regulation (EC) No 1107/2009 defines criteria to identify low-risk substances that apply independently of the origin of the substance, and whereas low-risk pesticides could be of biological as well as of synthetic origin;

G.  whereas pesticides of biological origin are generally understood to be plant protection products based on microorganisms, botanicals, bio-derived chemicals or semiochemicals (such as pheromones and various essential oils) and their by-products; whereas the present regulatory framework for plant protection products(6) does not legally differentiate between biological and synthetic chemical plant protection products;

H.  whereas recent scientific studies show that sublethal exposure to certain herbicides may cause negative changes in antibiotic susceptibility in bacteria(7) and that a combination of high use of herbicides and antibiotics in proximity to farm animals and insects could drive greater use of antibiotics by possibly compromising the therapeutic effects of the same;

I.  whereas low-risk plant protection products of biological origin may constitute a viable alternative to conventional plant protection products, for both conventional and organic farmers, and contribute to a more sustainable agriculture; whereas some plant protection products of biological origin possess new modes of action, which could be beneficial with a view to evolving resistance to conventional plant protection products, and could limit the impact on non-target organisms; whereas low-risk plant protection products of biological origin should be one of the preferred options for non-professional users and for home gardening, together with other non-chemical control or prevention methods;

J.  whereas, in order to adequately meet food and feed needs, the use of plant protection products is necessary, and whereas the precautionary principle(8) is applied in the procedure for authorising such products and their active substances;

K.  whereas the long approval and registration process before commercialisation of low-risk pesticides of biological origin represents an important economic barrier to manufacturers;

L.  whereas Integrated Pest Management implementation is mandatory in the Union in accordance with Directive 2009/128/EC; whereas Member States and local authorities should place more emphasis on the sustainable use of pesticides, including low-risk plant protection alternatives;

M.  whereas under Regulation (EC) No 1107/2009, active substances are approved at Union level, while the authorisation of plant protection products containing those active substances lies within the remit of the Member States;

N.  whereas Article 22 of Regulation (EC) No 1107/2009 allows active substances to be approved as low-risk active substances where they fulfil the general approval criteria and the specific low-risk criteria specified in Annex II, point 5; whereas Article 47 of Regulation (EC) No 1107/2009 provides that plant protection products that contain only low-risk active substances, that do not contain any substance of concern, that do not require specific risk mitigation measures, and that are sufficiently effective, shall be authorised as low-risk plant protection products;

O.  whereas at present, only seven active substances classified as ‘low-risk’ – whereof six are active substances of biological origin – are approved in the Union; whereas the Commission prioritises the evaluation of presumed low-risk active substances in its renewal programme;

P.  whereas products containing low-risk active substances of biological origin have been refused authorisation by a certain number of Member States owing to their perceived lower efficacy as compared to synthetic chemical pesticides, without any regard to the ongoing innovation in the sector for low-risk pesticides of biological origin, without considering the resource efficiency benefits for organic farming, and without considering agricultural, health and environmental costs of certain other plant protection products;

Q.  whereas the current regulatory framework provides certain incentives for low-risk active substances and low-risk plant protection products, namely a longer first approval period for low-risk active substances of 15 years in accordance with Article 22 of Regulation (EC) No 1107/2009, and a shorter timeframe of 120 days for the authorisation of low-risk plant protection products in accordance with Article 47 of Regulation (EC) No 1107/2009; whereas, however, these regulatory incentives only apply at the end of the approval procedure, once an active substance is classified as low-risk;

R.  whereas Article 12 of Directive 2009/128/EC provides that the use of pesticides shall be minimised or prohibited in certain specific areas, such as areas used by the general public and protected areas; whereas, in such cases, appropriate risk management measures shall be taken, and the use of low-risk plant protection products and biological control measures shall be considered in the first place; whereas some Member States have, for a long time now, prohibited the use of pesticides in these specific areas;

S.  whereas the Commission has submitted to the Standing Committee on Plants, Animals, Food and Feed (PAFF Committee) a draft regulation amending Regulation (EC) No 1107/2009 as regards the criteria for the approval of low-risk active substances; whereas this draft provides an assumption of low-risk status for active substances that are micro-organisms;

General considerations

1.  Stresses the need to increase the availability of low-risk pesticides, including low-risk plant protection products of biological origin in the Union, without further delay;

2.  Stresses that farmers need to have a bigger toolbox at hand to protect their crops and to decide which measure will best and most sustainably protect their crops; encourages, therefore, wider use of different tools, including low-risk pesticides of biological origin, following the principles of integrated pest management;

3.  Stresses the need to increase the availability of a pest management toolbox for organic farming that complies with the requirements of both organic farming and resource efficiency;

4.  Emphasises that consumers’ demand for safe food that is both affordable and produced in a sustainable way must be satisfied;

5.  Underlines that, in order to promote the development and use of new low-risk plant protection products of biological origin, the evaluation of their efficacy and risks, and of their capacity to respond to the environmental, health-related and economic needs of agriculture, should be designed in a way to provide farmers with an appropriate level of plant protection;

6.  Underlines the importance of a public debate about the availability of alternatives to conventional plant protection products and about making a wider choice of substances available to farmers and growers, including low-risk plant protection products of biological origin and other biological control measures, in order to find the solutions that are most viable in environmental, health and economic terms; stresses the necessity to educate on the need to ensure sustainability of crop protection; encourages further research and innovation on low-risk plant protection products of biological origin;

7.  Welcomes the ‘Implementation Plan on increasing low-risk plant protection product availability and accelerating integrated pest management implementation in Member States’, as endorsed by the Council; calls on the Member States, the Commission and the European and Mediterranean Plant Protection Organisation (EPPO) to follow up on the implementation of this plan;

Immediate action

8.  Calls for the swift adoption of the draft regulation amending Regulation (EC) No 1107/2009 as regards the criteria for the approval of low-risk active substances that the Commission has submitted to the PAFF Committee; calls on the Commission continuously to update the criteria in line with the most up-to-date scientific knowledge;

9.  Calls on the Commission and the Member States to accelerate the evaluation, authorisation, registration and monitoring of the use of low-risk plant protection products of biological origin while maintaining risk assessment at a high level;

10.  Invites the Member States to include the use of low-risk pesticides of biological origin in their national action plans on the protection of the environment and of human health;

11.  Encourages the Member States to exchange information and good practices deriving from the results of research into pest control, enabling the provision of alternative solutions that are viable in environmental, health and economic terms;

12.  Calls on the Commission to identify low-risk substances already on the market;

Revision of plant protection product legislation

13.  Welcomes the 2016 Commission REFIT initiative to carry out an evaluation of Regulation (EC) No 1107/2009; stresses that this REFIT initiative must not lead to the lowering of health, food safety and environmental protection standards; is concerned that the general revision of the entire Regulation (EC) No 1107/2009 in connection with this REFIT initiative could take several years;

14.  Stresses the need to revise Regulation (EC) No 1107/2009 in order to foster the development, authorisation and placing on the EU market of low-risk pesticides of biological origin; is concerned that the current authorisation process for placing plant protection products on the market is sub-optimal for low-risk pesticides of biological origin; points out that the current registration process for low-risk basic substances sometimes, in practice, acts as a kind of patent, making it difficult to use a product based on the same substance which is not registered in another Member State;

15.  Calls on the Commission to submit, before the end of 2018, a specific legislative proposal amending Regulation (EC) No 1107/2009, outside of the general revision in connection with the REFIT initiative, with a view to establishing a fast-track evaluation, authorisation and registration process for low-risk pesticides of biological origin;

16.  Highlights the need for a definition, in Regulation (EC) No 1107/2009, of ‘plant protection product of biological origin’ that covers plant protection products the active substance of which is a microorganism or a molecule existing in nature, either obtained from a natural process or synthesised as identical to the natural molecule, as distinct from plant protection products the active substance of which is a synthetic molecule not existing in nature, irrespective of the method of production;

17.  Calls on the Commission, in its report on the evaluation of National Action Plans required under Article 4 of Directive 2009/128/EC establishing a framework for Community action to achieve the sustainable use of pesticides, to identify gaps in the implementation of the Directive by Member States and to include robust recommendations to Member States to take immediate action in order to reduce the risk and impact of pesticide use on human health and the environment and to develop and introduce alternative approaches or techniques with the aim of reducing dependency on the use of pesticides;

o
o   o

18.  Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

(1) OJ L 309, 24.11.2009, p. 1.
(2) OJ L 309, 24.11.2009, p. 71.
(3) Texts adopted, P8_TA(2016)0251.
(4) Texts adopted, P8_TA(2016)0252.
(5) FAO (2011) ‘Global food losses and food waste’.
(6) The concept of ‘pesticides’ also covers biocidal products to which this resolution does not apply.
(7) e.g. Kurenbach, B., Marjoshi, D., Amábile-Cuevas, C.F., Ferguson, G.C., Godsoe, W., Gibson, P. and Heinemann, J.A., 2015, ‘Sublethal exposure to commercial formulations of the herbicides dicamba, 2,4-dichlorophenoxyacetic acid, and glyphosate cause changes in antibiotic susceptibility in Escherichia coli and Salmonella enterica serovar Typhimurium’, mBio 6(2):e00009-15. doi:10.1128/mBio.00009-15.
(8) Article 1(4) of Regulation (EC) No 1107/2009.

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