Focus
Plenary Session
Institutions - 02-07-2010 - 13:16
- Financial regulation, SWIFT, rights for boat, bus and coach passengers on agenda
- Iceland's EU future and EU diplomatic corps also being discussed
The Session lasts from Monday 5 July to Thursday 8 July
New steps to curb outlandish bonuses for bankers and regulate Europe's financial markets were decided by MEPs when they meet for their monthly sitting in Strasbourg, France. Also on the agenda is a new SWIFT data protection deal and rights for boat, bus and coach travellers which could bring them into line with air passengers. Industrial emissions, Iceland's EU aspirations and the future of the European External Action Service also featured during the sitting.
All the latest articles and selected press releases from the session can be found here during the week.
Sommaire du dossier :
Parliamentary Session 5-8 July 
Interview with Emilie Turunen: Fighting youth unemployment 
Making transport smarter 
Opening of Strasbourg plenary session 
More rights for boat passengers but negotiations continue on bus passenger rights 
Parliament set to vote on new Swift agreement after privacy safeguards installed 
Debate with Spain's Zapatero draws curtain on Madrid's EU Presidency - MEPs debate Belgian EU Presidency in-tray
MEPs call for ban on food from cloned animals 
MEPs back root-and-branch reform of financial supervision 
European Parliament ushers in a new era for bankers' bonuses 
MEPs vote to cut illegal timber out of the EU market 
Stricter rules on industrial emissions 
MEPs back Iceland's EU membership bid 
Diplomatic service: EU to become "a global player instead of payer" 
EU diplomatic service: Parliament gives go-ahead to Madrid deal 
Parliament gives green light for SWIFT II
REF.: 20100625FCS76850
Parliamentary Session 5-8 July
- Financial regulation, SWIFT, rights for boat, bus and coach passengers on agenda
- Iceland's EU future and EU diplomatic corps also being discussed
Financial regulation, SWFT and industrial emissions feature this week
New steps to curb outlandish bonuses for bankers and regulate Europe's financial markets will be discussed by MEPs when they meet for their monthly sitting in Strasbourg, France. Also on the agenda is a new SWIFT data protection deal and rights for boat, bus and coach travellers which could bring them into line with air passengers. All the latest articles and selected press releases from the session can be found here during the week.
EP at the forefront in capping bank bonuses
The text of the EU directive on bank capital requirements and bonuses, as agreed between Council and the EP negotiating team, will be discussed by the full Parliament in Strasbourg on Tuesday and put to a vote on Wednesday.
Time to step up a gear on financial supervision
On Tuesday MEPs will discuss the question of EU-level supervision of financial organisations as well as the powers the EU supervisory bodies should have. The vote to adopt Parliament's position on this package may take place on Wednesday.
New SWIFT deal, with European data scheme on the way
Four months after Parliament rejected the SWIFT agreement on bank data transfers to the USA, MEPs will be asked to approve a fresh version of the accord, after safeguards were negotiated with the Council and the USA.
Rights for boat, bus and coach passengers
Boat travellers are set to gain new rights similar to those laid down in the EU air passenger rights charter, provided an agreement with Council is confirmed by Parliament next week. The new legislation covers compensation for delays and cancellations, payments in the event of accidents and assistance for disabled passengers.
Cloned animal meat off the menu?
Meat and dairy products from cloned animals and their descendants could be banned under new EU legislation on novel foods, if Parliament backs amendments proposed by its Environment Committee.
Fresh curbs on industrial emissions
MEPs are set to approve stringent updated rules on industrial air pollution, with strict limits for nitrous oxides, sulphur dioxides and dust particles, which are particularly harmful to health and the environment.
MEPs set to back Iceland's EU membership bid
The recent decision by EU leaders to open membership talks with Iceland will be the subject of a debate with Council and Commission, followed by a vote on a resolution.
EU diplomatic service: MEPs to vote on deal
The deal struck by Parliament's negotiators on the operation of the European External Action Service will be put to the vote in the Foreign Affairs Committee on Tuesday and then in the full Parliament on Thursday.
Cutting illegal timber out of the EU market
Consumers currently have only limited assurances that the furniture they buy is not made from illegally-harvested timber. New EU legislation would outlaw such timber and punish unscrupulous dealers.
Oil exploration and extraction: risks, liability and prevention
Following the environmental disaster in the Gulf of Mexico, MEPs will discuss the hazards of oil exploration and extraction with the Council and Commission.
Interview with Emilie Turunen: Fighting youth unemployment
- In some European countries youth unemployment is 40%
- Young people often last to get hired or locked out of job market
On Monday Danish MEP Emilie Turunen (Greens/EFA) will present her report on youth unemployment
The economic crisis has hit young people hard and youth unemployment is a very serious problem in many European countries. The unemployment rate for young people is twice as high as the overall unemployment rate. On Monday Danish MEP Emilie Turunen (Greens/EFA) will present her report, which comes with specific proposals on how to fight youth unemployment in the EU.
Why is youth employment so high today? What kind of barriers are young people facing during the crisis?
We know from earlier crises that young people are hit harder because they are newcomers; this means they are the last ones to be hired and in many cases also the first ones to be fired. We know that many young people, especially in the South of Europe, are on short-term contracts, which means that they are easy to fire and get rid of during the crisis.
Secondly, if companies don’t hire new staff (due to the crises), all the young people who just graduated have no place to go. We saw something similar in the 80´s, when we almost lost a generation to long-term unemployment. I am very afraid that we are repeating the same mistake today. Every employer says: it is difficult to hire newcomers because they have no experience. Employers want people who can just jump into the work and get started. So that’s a barrier that we need to tackle.
Many young people end up in underpaid traineeships with less social security – are internships starting to replace real jobs?
It’s a fact! The number of internships has gone up and up in countries like France and Germany, while in the same period of time, the number of jobs has gone down. So there is a good indication that internships are actually replacing real jobs. And it’s not just a few, it’s millions.
It’s absolutely crucial to ensure that internships are educational; they should not replace real jobs. In the report we ask for a ´European quality charter on internships´. There needs to be a contract with the education place which ensures that internships are done during your education, not once it is completed, should not last longer than six months and must not replace real jobs. We have made some suggestions on what we want in this quality charter.
What could be the long term social effects of youth unemployment for the young individuals themselves and for society as a whole?
It can not be underestimated how much it affects you to be unemployed. It’s like getting the message from society: we don’t need you. I have read a lot of good studies about this…one of them compares the young generation of the 80´s with the current generation and concludes that unemployment today has been turned inwards.
This means you don’t blame politicians or society for not creating jobs - you blame yourself. So you start questioning: am I really good enough? It becomes an individual crisis not a collective crisis.
For society it’s a huge challenge. It is extremely expensive to have so many unemployed people. It is a lack of human resources, lack of human capital, lack of skills, lack of the people who are to build our future welfare societies. So I think we are putting our economies at risk by not doing enough about youth unemployment.
But with the current budget cuts in many countries - is it realistic to hope that governments will spend even more on youth policies?
Unfortunately not. Not when I take a look at government decisions. Our group's vision of crisis management is not mainstream in Europe for the moment. In general the member states have chosen the German path of budget-cutting, which I am afraid will result in a double dip. We will descend into recession, unemployment will go up and we will kill the small growth that was just about to start. Of course we should bring down public deficits, but the question is how quickly and by which means.
What are the two most important things that can be done at EU level to help youngsters?
One thing is the European quality charter on internships, which will ensure that if practical experience is to be built into the education systems, it must be under certain conditions. There is nothing to regulate internships today, so young people are trapped between being students and being on the labour market, meaning they are not covered by anything. That is why we want to present the European quality charter.
Secondly, we propose the introduction of a European youth guarantee, which will ensure that young persons are not unemployed for longer than four months. After four months they should be offered training, education, up-skilling or a real job. That is a very ambitious target, but the Council decided some years ago on this goal, and they should retake it. I think sitting on the couch for too long is very dangerous.
Further information :
Making transport smarter
Driver using GPS
Tired of spending your precious holiday time in traffic jams, worrying whether you will catch that ferry to your favourite sun drenched island? If only your navigation device was as accurate as advertised, you would have a thing or two less on your mind. Yet intelligent transport systems don't just help travellers plan their journeys more efficiently, they also make travel safer and greener. Monday 5 July MEPs look into how to make these systems understand each other.
Although systems for air, rail, river and maritime transport also exists, MEPs will look only at road transport Monday.
So what is ITS? It is things like your average GPS device, dynamic traffic management which analyses traffic data from various sources to set speed limits on highways and smooth the traffic flow. It can also give parking guidance and information and includes "e-Call" technology, which will alert the emergency services automatically of road accidents by the end of 2012.
There are a number of advantages to ITS. It should make passenger and freight transport more efficient, i.e. faster, by providing data on the best routes and manage the road network so that the flow of traffic is smooth.
It should also make transport safer and more secure by helping drivers, who are at least partly responsible for 80% of accidents, to react the right way in dangerous situations.
It could also make transport greener and healthier by easing congestion and jams through a more efficient implementation of the polluter-pays principle, thereby reducing air and noise pollution.
One of the main problems at present is that different systems with different specifications are being developed by different countries and different companies.
The solution, reached by EU ministers and endorsed by Parliament's Transport Committee would require new systems, to be deployed by 2013, to be compatible with existing national ones.
Danish Liberal Anne Jensen aid in her report: "the voluntary approach on ITS has not worked and a minimum level of standardisation is required if users are to be able to use ITS systems during journeys."
Further information :
Opening of Strasbourg plenary session
People walking along the corridor outside the plenary chamber
Parliament's President Jerzy Buzek opened the Strasbourg plenary session by voicing sorrow at the recent floods in Romania, Asturias in Spain and other parts of Europe. He also condemned recent attacks on the Baha'i community in Iran and the ongoing use of the death penalty there, including for minors. Lastly, he highlighted the 10th anniversary of the death of Polish wartime resistance fighter Jan Karski, in 1942 the first person to report on the extermination of Jews in Nazi-occupied Europe.
Further information :
More rights for boat passengers but negotiations continue on bus passenger rights
- Boat passengers get more rights
- Compensation of up to 25% of ticket price for delays
A passenger takes a nap in the flight departures area of Dublin Airport. ©BELGA_PressAssociation_Niall Carson
Boat passengers will have more rights as of 2012, thanks to a regulation approved by the European Parliament on Tuesday. The new rules provide for assistance and compensation in cases of delays, as well as free assistance to disabled passengers. The EP is pushing for similar rights for bus and coach passengers but this has still to be negotiated with the Member States.
Delays or cancellations of boat trips
Under the new rules, when a regular passenger boat or ferry service is cancelled or over 90 minutes late in departing, the passengers will have the right to be rerouted (in order to reach the destination earlier) or to receive back the ticket cost and not to travel (or else to return to the initial port of departure at the company's cost). This will not apply in the case of weather delays or other conditions outside the operator's control. Passengers must also be given snacks or meals, wherever possible.
In addition, regardless of whether they choose to travel or not, the passengers will be entitled to compensation of 25% of the ticket price for:
- journeys scheduled to last up to 4 hours which are delayed at arrival for at least an hour;
- journeys scheduled to last 4 to 8 hours which are delayed at arrival for at least two hours;
- journeys scheduled to last 8 to 24 hours which are delayed at arrival for at least three hours;
- journeys scheduled to last over 24 hours which are delayed at arrival for at least six hours.
If the delay is over double these minimum times, passengers will be entitled to compensation of half the ticket price.
The compensation will have to be paid in money if the passenger demands it. Additionally, if because of the delay passengers have to stay overnight before completing their journey, the operator will have to pay for their hotel expenses up to €80 per night (for not more than 3 nights).
Rights of people with disabilities or reduced mobility
The regulation states that disability may not be used as a reason for denying a passenger the right to board. Free assistance must be provided to disabled people in ports, on condition that the carrier or the port operator is notified when the reservation is made or at least 48 hours before boarding. This will also apply to cruise passengers.
These rules will enter into force in 2012. All passenger boats carrying over 12 passengers come under the rules, with some exceptions such as for excursion and sightseeing tours. Boat passengers will have more rights than currently stipulated under EU law for air passengers, as in the latter case there is no compensation for flight delays (only for cancellations).
Bus travel: negotiations ongoing
The EP has also adopted amendments to a draft regulation stipulating bus and coach passenger rights, such as ticket cost reimbursement or rerouting in case of delays in departure of more that two hours, as well as compensation of up to €1800 for lost or damaged baggage. Meanwhile, in the event of a passenger's death in a bus or coach accident, the amount of compensation should not be limited, argue MEPs. They also insist on free assistance or compensation if a bus breakdown delays arrival at the destination. Free assistance for disabled passengers must also be provided, they say.
MEPs want the regulation to apply not only to long-distance but also to regional bus transport. As negotiations with the Council have not been completed, a conciliation procedure is likely.
Further information :
Parliament set to vote on new Swift agreement after privacy safeguards installed
- End in sight to data sharing controversy
- MEPs win twin track privacy safeguards
Privacy and data protection lies at the heart of the Swift controversy
A new version of the controversial Swift data sharing agreement between Europe and the US could be voted through by MEPs this week after Members insisted that privacy safeguards were installed. Four months ago they rejected the previous accord negotiated by the European Commission over concerns about what the US would do with people's data. The Civil Liberties Committee has already backed "Swift II". The full House will have their say on Thursday 8 July.
Swift is a Belgian clearing house, through which 80% of the world's overseas financial transactions pass. The previous US Administration had tried to gain access to this data under anti-terror legislation.
The man who guided the revised Swift agreement through Parliament, German Liberal Alexander Alvaro, said, ahead of the vote, "the agreement caters for both security and privacy concerns. It will ensure that terrorist financing can be traced back to its sources but it will not affect day-to-day bank transfers of EU citizens".
The main problem from Parliament's point of view was the bulk transfer of European data to the US authorities. In the end all parties accepted Parliament's demand for a legally binding twin track approach as a solution:
Twin track approach to guarantee privacy
Track I: In the short-term, data transfers will continue, but European officials will monitor and be able to block the extraction of data on US soil.
Track II: In the mid-term, the European institutions will put in place the legal and technical framework for the extraction of data on EU soil, thus precluding the need for bulk data transfers to the US.
In addition, Europol will check that every data request from the US is justified by a counter-terrorism need. It will be able to block data transfers.
Balancing freedom and security
Mr Alvaro told us that "the final agreement proves that in the end even goals which the Commission and Council regard as impossible can be achieved. The cooperation between the institutions in the beginning was anything but perfect. The final agreement marks a first step for future collaboration, but further improvement will be necessary".
He added, "obviously, the line has to be drawn where one of these goals is endangered. However, as with this agreement, it is possible to ensure that both freedom and security concerns are respected, without having to trade-off either side. Though my bottom line is that, if there are any doubts, freedom must come first."
Debate with Spain's Zapatero draws curtain on Madrid's EU Presidency
- Economic issues dominate last 6 months
- Zapatero defends record - cites action on Europe 2020 jobs and growth strategy
Spain's Prime Minister José Luis Rodríguez Zapatero at the European Parliament in Strasbourg, Tuesday 6 July
Spain's Prime Minister José Luis Rodríguez Zapatero told MEPs Tuesday that new steps to regulate financial markets, agreement on the EU diplomatic service and the Swift data deal were the high points of Madrid's outgoing EU Presidency. A subsequent debate with MEPs saw broad - though not uncritical - satisfaction with Spanish leadership over the last six months. Members of the smaller groups were more critical however.
Mr Zapatero told the European Parliament that he and his government had put in place some financial regulation supervision, helped Greece out of the debt crisis and pushed forward with the Europe 20/20 jobs and growth strategy during the last six months. He also pointed to reforms of the Stability and Growth pact as key achievements.
He also welcomed the deal on the setting up of the External Action Service - the nascent European diplomatic corps. "We need a more and more united external policy, with more common spaces, with a more united voice of the EU. We have worked to strengthen the presence of Europe in the world" he told the House.
Referring the stalled EU-US Summit which the White House had pulled out of, he said that the Swift data sharing agreement with the US had shown the strenght of the relationship.
Jose Manuel Barroso, the head of the EU's executive, the European Commission, said that "the Spanish presidency has coincided with a time of a deep transition with the entry into force of a new treaty and also with a critical moment for the European economy".
Some generally positive assessments...
Joseph Daul, the leader of the centre right European People's Party, noted that there was "a new institutional context" with the Lisbon Treaty and difficulties due to the economic crisis. He also mentioned the creation of the External Action Service.
On the cancelled EU-US summit he called it a "lost opportunity" and called for the relaunching of the transatlantic relationship. In particular he stressed the mutual economic benefits of cooperation between Europe and the US to build economic growth and employment.
The leader of the Socialists and Democrats Martin Schulz commented that "the Spanish Presidency has some considerable successes to its name". In particular he mentioned the EU's External Action Service - "many colleagues in this house worked on it, but in the end on the day it was the presidency that made considerable contribution. This also goes for the SWIFT agreement. The most important recent steps are in financial market regulation - hope that we reach compromise. What we need are world-wide rules and what we can do in Europe is to start with them here."
Other more mitigated judgements...
Alexander Graf Lambsdorff for the Liberals said "we are not disappointed by the Presidency as such but rather by the member states". We achieved agreement for the capital provisions but the question of regulating hedge funds did not happen. Supervision on national level has failed. We should not stand in the way of an EU supervisory body, because "the taxpayers will not save the banks again".
Daniel Cohn-Bendit of the Greens /EFA bloc told the House "I want to express my surprise: it seems as we are all happy, but it is a facade. Nobody here has seen the progress you speak about. We decided on 2020 agenda but not a single penny put up to support it. If we can not get the economy started, then you can say anything you like, but it will not have any effect".
Timothy Kirkhope of the Europe of Conservatives and Reformists was scathing: "The Spanish Presidency has been virtually invisible. With a budget deficit of over 11%, perhaps it felt a good reason to avoid international scrutiny. With a large deficit and a timid reform plan for their own economy, they were in no position to offer Europe leadership or to set an example".
Willy Meyer of the leftist (GUE/NGL) said that "the key point is - is there strength enough to change this economic policy? If we do not change our economic policy, every rotating Council Presidency is doomed to failure".
For the Europe of Freedom and Democracy group Marta Andreasen told Mr Zapatero that "the Spanish Presidency was run in the same way you govern Spain - with your back to your citizens". She brought up the case of British residents in Spain who face demolition and confiscation of their houses due to alleged abuses of planning regulations.
Further information :
MEPs debate Belgian EU Presidency in-tray
- Economy and jobs key
- Industry and innovation also mentioned
Belgium's PM Yves Leterme
As Spain departs, now Belgium steps into the cockpit of the EU Presidency for the next half year. Their job will be to chair meetings of Ministers from all 27 EU countries in areas such as transport, the economy and the environment. A debate Wednesday saw Belgian PM Yves Leterme tell MEPs that the economy and fighting unemployment would be among his priorities. Many MEPs stressed the importance of getting to grips with Europe's economy and rules governing its financial markets.
Mr Leterme also mentioned environmental "green" jobs and immigration, asylum and the recognition of Court decisions as being among his priorities. Supporting industry and research and innovation would also be key.
For the European Commission its head José Manuel Barroso welcomed the priorities and underlined that he would also like to focus on the EU's internal market and commercial policy. "History shows that it is at the moment of crisis that Europe usually shows that it can overcome its difficulties" he said.
Economic growth and regulating the financial sector were the main priorities according to Joseph Daul, the leader of the Parliament's largest bloc - the centre right European People's Party. Mr Daul also stressed the importance of countries recognising judicial decisions that are taken in other member states.
For the Socialists and Democrats Martin Schulz called for "more regulation to reduce the social gap in Europe", pointing out that the banking sector must also be involved in paying for the crisis. He also wanted the EU to clarify what he called its ambivalence towards Turkey's EU membership aspirations.
The leader of the Liberals Guy Verhofstadt called for a "bank stress test", a stronger growth and stability pact and more regulation and supervision of financial products and banks.
For the Greens/EFA Rebecca Harms suggested that financial supervision could help restore people's confidence in the EU but that the Union must look beyond this to for example social issues.
The speaker on behalf of the leftist GUE/NGL, Patrick Le Hyaric, welcomed the Belgian Presidency goals such as sustainable growth, fighting poverty and protecting the environment but none of this will take place "unless people's purchasing power is increased" he said.
Derk Jan Eppink of the Europe of Conservatives and Reformists noted that maybe we do not need more Europe in the sense of more money from the EU but more reforms, a stable euro and better use of the available sources.
The head of the Europe on Freedom and Democracy Nigel Farage thinks Yves Leterme has no legitimacy as he is leader of a caretaker government. "The extraordinary irony is that a country that is on the verge of breaking into two is telling 26 other member states for the next six months what they should be doing."
Further information :
MEPs call for ban on food from cloned animals
- MEPs demand a moratorium on foods using nanotechnology
- At present no EU rules to specifically allow or ban dairy products and meat from cloned animals
Clone mates of Dolly the sheep in a Scottish pasture
MEPs renewed their appeal for a ban on food from cloned animals when they voted on novel foods legislation on Wednesday. They also demanded a moratorium on foods using nanotechnology until potential health risks can be ruled out.
Novel foods - those from new production processes or those traditionally consumed only outside the EU - have been regulated since 1997. The European Parliament voted today to back a new streamlined authorisation procedure, with risk assessment to be carried out by the European Food Safety Authority. However, MEPs highlighted specific concerns about the use of cloned animals and nanotechnology for food.
No food from cloned animals
Currently, there are no EU rules to specifically allow or ban dairy products and meat from cloned animals. The Commission and Council wish to have these products regulated under novel foods rules but MEPs voted today to exclude them from those rules. They called instead for new EU legislation to be proposed to expressly prohibit foods from cloned animals and their descendants, with a moratorium on their sale in the meantime.
European Parliament novel foods rapporteur and Dutch MEP Kartika Liotard (GUE/NGL) commented:
"A clear majority in the European Parliament supports ethical objections to the industrial production of cloned meat for food. Cloned animals suffer disproportionately highly from illnesses, malformations and premature death. MEPs have been calling for proper regulation for years: it's high time the Commission listened to the European Parliament and citizens on this issue."
Moratorium on nanomaterials
The European Parliament agreed that nano-sized ingredients and food from nanotech processes should be subject to novel foods regulations. They furthermore called for a moratorium until specifically-designed risk assessment of nanotechnology processes or nano-ingredients can prove them to be safe, expressing concerns that nanotechnology is already being used in food and food packaging. Any approved nano-ingredients should be mentioned on food labels.
Food from GM-fed animals
A majority of MEPs rejected an amendment calling for compulsory labelling of food products that derive from animals raised on genetically-modified feed.
Next steps
If Council does not accept this second-reading position of the Parliament, an agreement will be sought through the conciliation procedure.
MEPs back root-and-branch reform of financial supervision
- Call for total reform of current financial system
- MEPs demand end to taxpayer bailouts
The MEPs who guided the measures through Parliament at a press conference in Strasbourg after the crucial votes. Wednesday 7 July, 2010 (R-L) Goulard, Skinner, Giegold, Garcia-Margallo y Marfil, Sánchez Presedo
With an overwhelming majority, the European Parliament on Wednesday sent a strong message to EU Member States that the only option for effective financial supervision is one based on a thorough reform of the current system, with the establishment of European authorities capable of taking effective action to avert crises and avoid taxpayer bailouts.
By adopting amendments to the legislation but deferring the final vote on the legislative resolution, the EP has given its negotiators the backing of the full Parliament and has also left the door open for a few more weeks for an agreement to be reached at first reading with the Council after the summer break. In a separate declaration, Parliament's main political groups clearly indicated that the ball is now firmly in the Council's court to come forward with a position acceptable to all sides.
Ready to negotiate ... for a good deal
The declaration states that Parliament is willing to negotiate but is united in its view that the European authorities must be equipped with sufficient powers to prevent future crises and strengthen the single market.
This gesture is a final endeavour on the part of the EP rapporteurs to help the new Belgian Presidency to move the Member States to a more satisfactory position, the declaration adds.
Effective supervisory authorities …
Parliament voted to give a number of powers to the three European supervisory authorities (ESAs) which will be charged with controlling practices in the banking, securities and markets, and insurance sectors respectively.
The ESAs would be able to issue decisions directly to a financial institution such as a bank, where the national supervisor has not been able to change some of its practices that are considered unsound. They would also have the power to settle disputes between national supervisors and to supervise important cross-border financial institutions by acting through the national supervisors.
By their vote, MEPs also mandate the rapporteurs to push for a stability fund linked to each of the three financial sectors mentioned above so as to avoid taxpayers having to pick up the bills for future financial crises. They also state that ESAs should work to strengthen the European system of national deposit guarantee schemes. Finally the ESAs would also be able to temporarily prohibit or restrict certain types of financial activities that could undermine the proper functioning of the financial system.
... all based in one place
To ease interaction between the ESAs, Parliament is calling for them to be established in Frankfurt rather than having them spread around the EU. At the same time, it will be possible to have various representations of the ESAs in the most important financial centres of the EU.
European Systemic Risk Board (ESRB): explaining risk faster and better
The amendments adopted seek to ensure that the aim assigned by the Commission to the ESRB - that of monitoring the build-up of risk in the EU economy - is carried out better, more clearly, and can thus be acted upon faster.
MEPs also want to make risk levels more easily identifiable. They say the ESRB should develop a common set of indicators to permit uniform ratings of the riskiness of specific cross-border financial institutions and make it easier to identify the types of risks embedded in them.
To improve overall risk awareness, Parliament calls for the ESRB to establish colour-coded grades to reflect different risk levels. When the ESRB then makes warnings or recommendations on risk build-up it would use the colour-grade to indicate the level of risk. The European Parliament would have the power to summon the addressees of the ESRB's recommendations to explain the actions they have taken to take into account the ESRB's comments.
To enhance the ESRB's visibility and credibility, MEPs say it must be chaired by the ECB President. Parliament also voted to widen the ESRB board membership to include academics.
Next steps
Parliament's positions on all these issues were embodied in its votes on a package of reports, all of which were approved by overwhelming majorities. The texts adopted will serve as a mandate, backed by the plenary, for the EP's negotiators to continue talks with the Council in view of reaching an agreement in the very near future, possibly just after the summer recess.
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Also in a separate move MEPs backed action to avert future crisis
Tighter coordination and planning to avoid future banking crises
A special system should be set up to ensure that crises are resolved earlier and to avoid rushed, weekend bank bailouts costing the taxpayer hundreds of billions of euros, says the European Parliament in a resolution passed on Wednesday. The growing size, complexity and interconnectedness of banks means that such a system must be established at European level.
In the resolution, drafted by Portuguese MEP Elisa Ferreira (European People's Party) and adopted by a show of hands, MEPs urge the European Commission to submit by the end of the year one or more draft laws relating to the management of cross-border crises in the banking sector. In particular they call for an EU crisis-management framework, an EU financial stability fund and a resolution unit within the European Banking Authority to deal with insolvencies of cross-border systemic banks.
"Risks cannot and should not be eliminated from the market but we do require regulation which will make risks more transparent and prevent the emergence of bubbles," said Ms Ferreira in a debate on Tuesday. "It is not our job to prevent banks going bankrupt but it is our job to ensure that the way in which they are liquidated or reorganised is done in an orderly fashion, and also to limit collateral effects elsewhere in the system to ensure that it is not the taxpayer who picks up the tab".
EU crisis management framework
The crisis management framework proposed in the resolution would, in the event of a crisis, preserve financial stability, minimise the cost to taxpayers, preserve basic banking services and protect depositors. It would also encourage banking sector players to act more responsibly.
The proposed framework would provide a common minimum set of rules, foster the convergence of national resolution and insolvency laws, and ultimately establish an EU resolution and insolvency regime. It would grant more crisis management powers to supervisory authorities, including the powers to wind up a bank or impose a total or partial sale. Considerable coordination powers would be vested in the nascent European Banking Authority (EBA).
A "Risk Dashboard", based on a set of indicators to be designed by the Commission, is also proposed, with a view to rating the risk levels of individual banks and providing early warning of possible instability. Each bank would be required to have its own "resolution plan" which would detail the steps to be taken should it run into difficulties, so as to avoid rushed decisions.
Financial stability fund and resolution unit
Furthermore, the framework would include an EU financial stability fund to preserve banking stability in difficult times, and also a resolution unit within the EBA in charge of restructuring cross-border systemic banks which run into difficulties.
Next steps
On Tuesday, Michel Barnier, European Commissioner in charge of financial services, welcomed the Parliament's suggestions as a "very credible toolbox" and assured MEPs that the Commission would reflect these suggestions in the consultation paper it is to launch in October as well as in the legislation to be submitted next year.
According to the EC Treaty and the Parliament's Rules of procedure, MEPs have a right to request the Commission to submit any appropriate proposal for the adoption of a new law. To this end they have to adopt a resolution which must be backed by a majority of MEPs. At the same time, they may set a date by which such a proposal should be submitted. Should the Commission decide not to follow this recommendation, it has to give its reasons.
Further information :
- Background note on Parliament's position on financial supervision
- Profile of rapporteur José-Manuel Garcia Margallo Y Marfil
- Rapporteur Sven Giegold
- Rapporteur Peter Skinner
- Rapporteur Sylvie Goulard
- Rapporteur Ramon Tremosa i Balcells
- Rapporteur Antolin Sanchez Presedo
- Adopted text (click on 7 July)
- Rapporteur Elisa Ferreira
European Parliament ushers in a new era for bankers' bonuses
- Some of the strictest rules in the world on bankers' bonuses approved
- Tougher treatment for bailed out banks
Upfront cash bonuses will be capped at 30% of the total bonus
MEPs on Wednesday approved some of the strictest rules in the world on bankers' bonuses. Caps will be imposed on upfront cash bonuses and at least half of any bonus will have to be paid in contingent capital and shares. MEPs also toughened rules on the capital reserves that banks must hold to guard against any risks from their trading activities and from their exposure to highly complex securities.
"Two years on from the global financial crisis, these tough new rules on bonuses will transform the bonus culture and end incentives for excessive risk-taking. A high-risk and short-term bonus culture wrought havoc with the global economy and taxpayers paid the price. Since banks have failed to reform we are now doing the job for them", said British MEP Arlene McCarthy (S&D).
A different bonus culture
Upfront cash bonuses will be capped at 30% of the total bonus and to 20% for particularly large bonuses. Between 40 and 60% of any bonus must be deferred for at least three years and can be recovered if investments do not perform as expected. Moreover at least 50% of the total bonus would be paid as "contingent capital" (funds to be called upon first in case of bank difficulties) and shares.
Bonuses will also have to be capped as a proportion of salary. Each bank will have to establish limits on bonuses related to salaries, on the basis of EU wide guidelines, to help bring down the overall, disproportionate, role played by bonuses in the financial sector.
Finally, bonus-like pensions will also be covered. Exceptional pension payments must be held back in instruments such as contingent capital that link their final value to the overall strength of the bank. This will avoid situations, similar to those experienced recently, in which some bankers retired with substantial pensions unaffected by the crisis their bank was facing.
Tougher treatment for bailed out banks
The law will introduce special measures for bailed out banks and it will restrain the overall amounts paid in bonuses, encouraging bankers to prioritise a stronger capital base and loans to the real economy rather than their own pay and perks. In particular, the rules provide that no bonuses should be paid to the directors of an institution unless this is duly justified.
Capital requirements for stable banks
Two other key issues covered by the new legislation are: stricter capital rules on bank trading activities and higher standards for re-securitisations. New capital rules for re-securitisations and the trading book will ensure banks properly cover the risks they are running on their trading activity, including for types of investments such as mortgage-backed securities that were central to the crisis. Studies show that the rules are expected to lead to banks having to hold three to four times more capital against their trading risk than they do at present.
Next steps
Following the plenary vote, Council will now rubber-stamp the deal, possibly on 13 July. The rules on bonus provisions will then take effect in January 2011 and those on capital requirements provisions no later than 31 December 2011.
Pay principles for all listed companies
Separately, in a non-legislative resolution drafted by Saïd El Khadraoui (S&D, BE), Parliament calls for remuneration policy principles to be extended to cover all companies listed on stock exchanges. It proposes that listed companies be required to explain their remuneration policies if their directors' pay is deemed not to follow certain principles aimed at removing incentives to take excessive risk or to take decisions based on short-term considerations. The resolution also proposes that shareholders be given greater control over the directors of a listed company.
Finally, 'golden parachutes' handed to directors in cases of early termination should be limited to the equivalent of two years of the fixed component of the director's pay and severance pay should be banned in cases of non-performance or early departure, says the resolution, which was adopted by 594 votes to 24 with 35 abstentions.
MEPs vote to cut illegal timber out of the EU market
- MEPs green light ban on illegal timber
- Law aims to reduce deforestation
The aim is to cub illegal logging like this seen in Laos. © AFP PHOTO/HOANG DINH Nam/Belga
A ban on the sale of illegally-harvested timber, along with traceability measures and sanctions, has been given the green light by MEPs. The new law aims to reduce illegal deforestation and give consumers better assurances about the products they buy.
After Parliament overwhelmingly approved on Wednesday an agreement reached with Council, Finnish Green MEP Satu Hassi who took over parliamentary responsibility for this legislation from former MEP Caroline Lucas, said:
"EU legislation to ban the sale of illegally-sourced timber represents a major international breakthrough, from the forests around the world that are ravaged by illegal logging to the EU market where timber and wood products are sold. The tough rules agreed would not have been possible without the strong backing of the European Parliament."
Ban on illegally-sourced timber
The new legislation bans illegally-harvested timber or timber products from being placed on the EU market. This will prevent such wood from effectively being laundered once it reaches the EU. Currently, at least 20% of timber and timber products reaching the EU market is estimated to come from illegal sources.
Sanctions and traceability
Member States will be responsible for applying sanctions to operators who break the rules. The legislation sets out guidelines for imposing fines: the environmental damage caused, the value of the timber and lost tax revenue can all be taken into consideration. EU countries can also impose criminal-law penalties on unscrupulous dealers. To ensure traceability, each operator along the supply chain will need to declare from whom they bought timber and to whom they sold it.
Climate protection
Illegal deforestation has devastating effects. On a global level, deforestation as a whole is estimated to contribute 20% of greenhouse gas emissions. Where it occurs, soil degradation, loss of biodiversity and landslides are all potential problems. The plunder of this natural resource also hits forest-dependent peoples and the economies of developing countries.
Next steps
Council has already informally agreed with the terms of this draft legislation but will need to rubber stamp it before it can pass into law. The rules are expected to take effect in late 2012 to allow timber operators time to adapt.
Stricter rules on industrial emissions
- Stricter air pollution limits
- Industrial and agricultural installations with a high pollution potential covered
The latest move updates 7 pieces of legislation © AFP PHOTO JOEL SAGET/Belga
Clearer rules and cleaner air are among the aims of the Industrial Emissions Directive approved by the European Parliament on Wednesday. Stricter limits will apply for air pollution for example, although Member States will have some flexibility to extend deadlines for power plants or waive the rules for other installations in special cases.
The Industrial Emissions Directive aims to improve health and environment protection, while making the rules clearer and easier to implement. It updates and merges seven pieces of existing legislation, including directives on large combustion plants and Integrated Pollution Prevention and Control (IPPC), the latter covering around 52,000 industrial and agricultural installations with a high pollution potential, from refineries to pig farms.
After Parliament overwhelmingly approved an agreement reached with Council, German Liberal MEP Holger Krahmer the MEP responsible for guiding the legislation through Parliament, commented:
"After more than two years of difficult negotiations we have a compromise that will help to improve the implementation of the directive. Compared to the current situation, this offers more clarity and a better chance of a level playing field across Europe on environmental requirements for industrial installations."
Air pollution targets: extra time for some power stations
Nitrogen oxides, sulphur dioxide and dust can be a major health or environmental hazard, contributing for example to cancer, asthma and acid rain. Stricter limits on these emissions will be introduced from 2016. MEPs ultimately agreed that Member States can use ‘transitional national plans’ to allow large combustion plants (including fossil fuel power stations) up to July 2020 to meet the rules. Some older plants may not have to meet the targets, as long as they close by the end of 2023 or 17,500 operating hours after 2016, whichever happens first. Newer power stations must still meet the 2012 deadline that applies to them.
Holger Krahmer added: "It is a European tragedy that a number of outdated coal-fired power plants will be allowed to pollute for another decade. This is also grossly unfair on the Member States who took early action to meet the requirements."
Optimising environmental performance
To receive a permit, installations covered by IPPC rules must apply “best available techniques” (BATs) to optimise their all-round environmental performance. Emissions to air, soil or water, as well as noise and safety are all considered.
Member States will have some leeway to ease the normal rules, as long as a high standard of overall environmental protection is maintained. However, at the insistence of MEPs, it must also be proved that costs would be disproportionate compared to environmental benefits, due to technical reasons or local circumstances. Assessments must be provided to ensure the rules are not being circumvented without good justification.
Next steps
Parliament has given its seal of approval to the second reading agreement that was reached with Council. The Council will also need to officially rubber stamp the text, after which Member States will be required to apply the directive in their national legislation.
MEPs back Iceland's EU membership bid
- MEPs endorse Iceland's EU bid
- Call for halt to all whaling
Icelandic and EU flags flying in Brussels
The prospect of Iceland becoming a new EU Member State is welcomed in a resolution adopted on Wednesday by the European Parliament. The controversy of repayments to British and Dutch governments following the collapse of Icelandic banks needs to be resolved "bilaterally", adds the resolution. Iceland is also asked to cease all whaling.
MEPs endorse the decision by EU leaders on 17 June to open membership talks with Iceland, which submitted its application in July 2009. At the same time, Parliament asks Iceland to cease all whaling which is in contradiction with EU laws. The reservations the country has lodged with the International Whaling Commission should also be dropped, says the resolution, which was adopted by show of hands.
Iceland's accession would allow the EU to play a more active role in the Arctic Region, says the resolution drafted by Cristian Dan Preda (EPP), which underlines the country's "strong democratic culture". Iceland is already part of the Schengen zone and a member of NATO and has had a free-trade agreement with the EU since 1973.
On the Icesave bank issue, MEPs recall that Iceland is obliged to ensure payment of the minimum compensation to Icesave depositors in the United Kingdom and the Netherlands, as the EFTA Surveillance Authority said in its letter of formal notice of 26 May. In a referendum on March 6, Iceland's voters vetoed a repayment plan following the collapse of Icesave.
MEPs also point out that although, as a member of the European Economic Area, Iceland complies with most EU laws (notably single market legislation), it still needs to reform substantially the organisation and functioning of its financial supervisory system - "the key institutional weaknesses of the country's economy" - and the way judges, prosecutors and supreme judicial authorities are appointed.
The policy areas that will have to be fully negotiated with Iceland are agriculture, fisheries, taxation, economic and monetary policy and external relations.
Public support in Iceland for EU membership has declined since summer 2009, points out the resolution. MEPs ask the Icelandic authorities to initiate a public debate to address the concerns of Icelandic citizens regarding EU membership.
MEPs expect that the new EP-Iceland Joint Parliamentary Committee between the EP and the Althingi (Icelandic Parliament) will enhance an existing "fruitful collaboration" between the two sides.
Diplomatic service: EU to become "a global player instead of payer"
- Support from leading MEPs for Service
- Budget, Administration and political control all key issues
External Action debate - (from top left) Elmar Brok MEP, Guy Verhofstadt MEP, EU institutional Commissioner Maroš Šefčovič and High Representative Catherine Ashton. 7 July.
MEPs who debated the new EU diplomatic corps - the European External Action Service (EEAS) with High Representative Catherine Ashton told her that the political agreement reached in Madrid is an excellent starting point, protecting the community method and guaranteeing Parliament's political and budgetary powers. Some MEPs have criticised the "ambiguous position" of some Member States over the Service.
The EEAS will allow the EU to become "a global player instead of payer" on the international stage, said Elmar Brok of the European People's Party (EPP) who underlined Parliament's achievements in terms of safeguarding EP powers and defending the Community method.
"We don't want to drive the EU's Foreign Policy but we want to monitor it and want sensible budgetary decisions to be made", recalled Elmar Brok who co-negotiated the Madrid deal with Liberal leader Guy Verhofstadt and Socialist MEP Roberto Gualtieri.
Mr Brok who reminded the House that the origin of the EEAS dates back to the Convention for the European Constitution said that "we have taken an important step towards the setting up of the EEAS with the Madrid agreement, although it is not yet final. Parliament still has to make up its mind on the staff regulation and budgetary issues on which we co-decide with the Council".
"Develop the service as a community institution"
Guy Verhostadt was more straight-forward and said that "the Service has now been established". "Allow me to give one advice", said Verhostadt to Ashton, "develop the service as a community institution. It is only where the Community method is applied that we have had successes such as in the internal market field".
Roberto Gualtieri expressed his satisfaction that to see the EEAS be closely linked to the Community method and democratically controlled.
Catherine Ashton paid tribute to the "constructive engagement of the Parliament and its negotiators whose work has improved the text for the Service decision in many ways".
"We have a good deal on the table. I'm submitting formally to the records of this meeting the two declarations on the political accountability and on the basic organisation of the service", she told MEPs as some of them had doubts as to the legal value of these declarations which form part of the Madrid agreement.
Charles Tannock for the Europe of Conservatives and Reformists said that Mrs Ashton comes out of this prolonged battle over the EEAS composition with some credit. "The British conservatives are reconciled and ready to engage with the service". He also said that national MPs will need to be involved in the scrutiny of the EEAS and the EU defence missions.
"Human rights have been fully taken onboard and I would like to encourage the High Representative to respect the Madrid agreement", said Finnish Green Heidi Hautala who chairs Parliament's sub-committee on human rights.
A lot of MEPs raised during the debate the question of geographical representation. Mrs Ashton told them that they have her support on that issue.
Ambiguous positions of certain governments criticised
Guy Verhofstadt noted that "we have a good result that all institutions can support and be proud of. I say this despite the remarks made by the French Prime Minister, Fillon who said yesterday that the Service can't go beyond certain red lines. I have to say to Mr Fillon: "you're too late!" "What we need is not a 'bataille d'arrière garde' [sic] but to use the service".
On behalf of the S&D group, the Austrian MEP Hannes Swoboda said that the "French government should withdraw its red lines as we have put together a very good draft that our group fully supports".
Mario Mauro (EPP) referred to the "ambiguous positions" of certain governments on the Service, criticising the current visit of the Spanish Foreign Minister, Miguel Angel Moratinos, to Cuba.
Defence structures
Ulrike Lunacek for the Greens/EFA raised the issue of the Common Security and Defence Policy structures inside the EEAS. The following structures will under the direct responsibility of the High Representative: Crisis Management and Planning Directorate (CMPD), Civilian Planning and Conduct Capability (CPCC), Military Staff (EUMS) and Situation Centre (SitCen)). "If you move away from what the Member States want, you will have the support of this House", she told the High Representative.
Catherine Ashton answered saying that "full coordination between all the services of the EEAS, in particular between the CSDP structures and the other relevant services of the Service will be ensured".
Liberal MEP Alexander Graf Lambsdorff also raised the issue of the compatibility of today's declaration with the declaration presented to European Ambassadors to the EU, at their COREPER meetings which said that the specificities of these structures as well as their particular functions, procedures and staffing conditions will be preserved.
GUE/NGL and EFD groups critical of Madrid deal
Willy Meyer of the leftist GUE/NGL bloc announced that his group is not going to vote in favour of the report tomorrow, saying "it is a mistake to link the EEAS to military structures". He also expressed scepticism regarding the lack of prominence given to the development policy.
"I believe that through the Lisbon Treaty, through Mrs Ashton's role, and the External Action Service, the European Union now has all four criteria it needs under international law to declare itself a single nation state, a United States of Europe, and to do so overnight", said David Campbell Bannerman on behalf of the Europe of Freedom and Democracy group.
The Plenary is to vote on the report Thursday 8 July at noon.
Further information :
EU diplomatic service: Parliament gives go-ahead to Madrid deal
Catherine Ashton, EC Vice-President and High Representative of the Union for Foreign Affairs and Security Policy
Two weeks after the Madrid deal on setting up the European External Action Service (EEAS), a package of recommendations on its organisation and working methods was approved by the European Parliament on Thursday. The EEAS is a major new development introduced by the Lisbon Treaty.
Although Parliament was only formally consulted on the organisation and functioning of the EEAS, MEPs negotiated substantial changes to EU High Representative Catherine Ashton's original plans put forward in March. The service's "Community identity" will be strengthened and its political and budgetary accountability to Parliament is ensured, according to Parliament's negotiators, Elmar Brok (EPP, DE), Guy Verhofstadt (ALDE, BE) and Roberto Gualtieri (S&D, IT).
Today's resolution asks the Council to notify Parliament if it intends to depart from the resolution and also asks Council to consult Parliament again if it intends to amend the High Representative's proposal. The resolution was adopted by 549 votes to 78 with 17 abstentions.
The EEAS will help the High Representative (HR) in conducting the EU's foreign policy and ensuring that its external policy is consistent. The HR is also Vice-President of the Commission and President of the Foreign Affairs Council.
Who stands in when the High Representative is absent?
MEPs were reluctant to see civil servants (such as the executive secretary general) deputise for Lady Ashton when briefing Parliament. Instead they have won an undertaking that, where necessary, she will be replaced either by the EU commissioners for enlargement, development or humanitarian aid or by the foreign affairs minister of the country holding the EU presidency.
External co-operation
Control over EU external co-operation programmes (development and neighbourhood policies) will remain the responsibility of the Commission, contrary to Ms Ashton's original proposal, which would have given more power to the EEAS.
Proposals for changes in development policy (European Development Fund and Development Co-operation Instrument) will be prepared jointly by the EEAS and the Commission, under the Commissioner's responsibility, and then jointly submitted for a Commission decision.
EEAS: at least 60% to be EU staff
MEPs have also won an undertaking that at least 60% of EEAS staff will be made up of permanent EU officials. This will guarantee the diplomatic service's Community identity. Officials from national diplomatic services - to constitute one third of the staff when the service has reached full capacity - will be temporary agents for a duration of up to eight years with a possible extension of two years.
Recruitment will be "based on merit whilst ensuring adequate geographical and gender balance", says Mr Brok's report. Measures to correct possible "imbalances" could be taken during the 2013 review of the service. These measures would analogous to the ones taken when new Member States joined the EU in 2004.
On 1 January 2011, a total of 1,525 civil servants from the Commission and the Council's General Secretariat will be transferred to the EEAS and 100 new posts have been created. The total figure is 1625. Recourse to seconded national experts will be limited and these experts will not be counted as staff from Member States (one third of the total).
Headquarters and basic organisation
The EEAS will have its headquarters in Brussels and will be made up of a central administration and the 136 former Commission delegations.
The central administration will be organised in directorates-general comprising geographic desks covering all countries and regions of the world, as well as multilateral desks.
The statement on the service's basic organisation stipulates that there will a human rights structure at headquarters level and locally in the delegations as well as a department assisting the HR in her relations with Parliament. On crisis management and peace-building, the statement says that common security and defence policy (CSDP) structures will be part of the EEAS.
Political and budgetary accountability
The service's political and budgetary accountability to Parliament is guaranteed, with full budget discharge rights over the service.
The operational budget will be the Commission's responsibility. Parliament will receive from the Commission a document clearly accounting for the external action parts of the Commission budget, including the establishment plans of the Union's delegations, as well as the external action expenditure per country and per mission. The EEAS administrative budget will be in a new section X "European External Action service".
Before taking up their posts, EU Special Representatives and Heads of Delegations to countries and organisations which Parliament considers "strategically important" will appear before the Foreign Affairs Committee.
The HR will also seek Parliament's views on key CFSP policy options and MEPs holding institutional roles will have access to confidential documents.
The Foreign Affairs Committee and the Budgets Committee bureaus will have stronger scrutiny rights over CFSP missions financed out of the EU budget.
MEPs also expressed their wish to strengthen ties with national parliaments.
Next steps
Changes to the Financial Regulation, the Staff Regulation and the 2010 budget, on which Parliament has joint decision-making powers with Council, will be put to the vote after the summer recess and after the Council has endorsed Parliament's position on the operation of the service.
One month after the entry-into-force of the EEAS decision, Baroness Ashton is to present to the Commission an estimate of the EEAS revenue and expenditure, with a view to drafting an amending budget.
Parliament gives green light for SWIFT II
raised arm showing a "thumbs up"
The new version of the SWIFT anti-terrorist agreement on bank data transfers to the US was approved by the European Parliament on Thursday. MEPs rejected the agreement in its previous form four months ago but since then have negotiated certain safeguards for Europe's citizens and won an undertaking that the EU will start work in the second half of this year on a European data processing system that precludes the need to transfer data in bulk to the US.
The recommendation that Parliament approve the agreement, drafted by Alexander Alvaro (ALDE, DE), was adopted by 484 votes to 109 with 12 abstentions. The agreement is due to take effect on 1 August this year.
"In February Parliament sent a very clear message. We made it known that the Lisbon Treaty has given us more opportunities and more responsibility", said Mr Alvaro in Tuesday's debate ahead of the vote. "During the negotiations, Parliament was able to make sure that improvements were incorporated into the agreement".
Mr Alvaro also stressed that the agreement will not cover financial transactions between EU states but only those to non-EU countries. Article 4 of the accord rules out transfers of any data relating to the Single Euro Payments Area.
The compromise was backed by the EPP, S&D, ALDE and ECR groups. The Greens/EFA, GUE/NGL and part of EFD opposed it. Two minority opinions were attached to the report (see below).
Elimination of bulk data transfers
The key to the deal for Parliament was the eventual elimination of "bulk" data transfers. In exchange for backing the agreement, MEPs won an undertaking that work on setting up an EU equivalent to the US "Terrorism Finance Tracking Program" (TFTP), which would preclude the need for bulk data transfers, will start within 12 months. Once Europe has a system enabling it to analyse data on its own territory, it need only transfer data relating to a specific terrorist track.
A new role for Europol
Another innovation of the new agreement is that it empowers "Europol", the EU's criminal intelligence agency based in The Hague, to block data transfers to the USA. Europol will have to check that every data transfer request by the US Treasury is justified by counter-terrorism needs and that the volume of data requested is as small as possible.
An EU representative in the USA to monitor data processing
The new version of the agreement also provides that the use of data by the Americans, which must be exclusively for counter-terrorism purposes, is to be supervised by a group of independent inspectors, including someone appointed by the European Commission and the European Parliament. This person will be entitled to request justification before any data is used and to block any searches he or she considers illegitimate.
The agreement prohibits the US TFTP from engaging in "data mining" or any other type of algorithmic or automated profiling or computer filtering. Any searches of SWIFT data will have to be based on existing information showing that the object of the search relates to terrorism or terrorism finance.
Right of redress for European citizens
In February 2010, MEPs demanded that under any new version of the agreement European citizens should be guaranteed the same judicial redress procedures as those applied to data held on the territory of the European Union. The new proposal says this time that US law must provide a right of redress, regardless of nationality.
Data retention and deletion
Extracted data may be retained only for the duration of the specific procedures and investigations for which they are used. Each year, the US Treasury must take stock of any data that have not been extracted, and hence individualised, which will no longer be of use for counter-terrorism purposes, and delete them. Such data must be deleted after five years at the latest.
Two minority opinions
The first of two minority opinions, signed by six MEPs from the GUE/NGL and Greens/EFA groups, says that "The EU-US agreement on TFTP does not meet the guarantees requested by the EP in its previous resolutions", particularly on the transfer of "bulk data". Moreover, "The role of supervision of Europol is unclear and will imply a modification of its mandate and Europol is not a judicial authority". Furthermore, "Such an agreement represents a clear violation of EU legislation on data protection", say the MEPs, adding that the data retention period is "far too long" and that the provisions on data-subject rights "do not at all meet the European criteria".
The second, signed by Gerard Batten (EFD, UK), deems the proposed legislation "democratically illegitimate". Furthermore, says Mr Batten, "the draft Agreement was only made available on 27th May to a restricted number of MEPs" and "this confidential and private financial data belongs to the individual not to the European Union or the Parliament".
Next steps
The agreement is due to enter into force on 1 August 2010, for five years, and will be renewable year-by-year thereafter. However, Europeans and Americans will have to assess how the agreement's safeguards and control systems are functioning, at the latest within six months of its entry into force. The Commission is to start work in the second half of 2010 on the creation of the European TFTP and must publish a progress report within three years.