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Public economic support in the EU: State aid and special economic zones

06-02-2020

State aid can be defined as an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. State aid can take several forms, such as public subsidies, tax relief, or the purchasing of goods and services on preferential terms. While the European Union (EU) competition rules consider State aid to be incompatible with the internal market, they allow such aid when it promotes general economic development, for example, when tackling the challenges ...

State aid can be defined as an advantage given by a government that may provide a company with an unfair competitive edge over its commercial rivals. State aid can take several forms, such as public subsidies, tax relief, or the purchasing of goods and services on preferential terms. While the European Union (EU) competition rules consider State aid to be incompatible with the internal market, they allow such aid when it promotes general economic development, for example, when tackling the challenges of global competition, the ongoing financial crisis, the digital revolution, and demographic change. To this end, all EU Member States provide some public economic support, for instance, to the coal mining sector, banks, or the digital economy. To contribute to regional development and to increase competitiveness, some Member States have created special economic zones (SEZs), which offer an attractive combination of tax-and-tariff incentives, streamlined customs procedures, less laws, provision of infrastructure, and creation of business clusters. The European Commission is currently evaluating the State aid modernisation (SAM) package and some of its related laws, as these will expire by the end of 2020. The European Parliament takes a two fold stance towards public economic support in the EU. On the one hand, Parliament stresses that State aid should support ecological transformation and foster the development of services, knowledge, and infrastructure rather than providing support to specific companies. On the other hand, it calls on the Commission to ensure that State aid is reduced in the long term, given its distortive effects on the internal market. While the temporary State aid offered to the financial sector to stabilise the EU financial system might have been necessary, Parliament calls on the Commission to scrutinise and eventually remove this aid. Parliament, inter alia, also calls on the Member States to abandon unfair competition practices based on unjustified tax incentives and to adopt appropriate rules in the Council.

European Institute of Innovation and Technology (EIT): Regulation and new strategic innovation agenda

17-12-2019

On 11 July 2019, the Commission presented its new legislative package on the European Institute of Innovation and Technology. The package consists of a recast of the current regulation and the new strategic innovation agenda. Created in 2008 at the start of the seventh EU research and development framework programme, the EIT is dedicated to increasing competitiveness, sustainable economic growth and job creation by promoting knowledge triangle activities (higher education, research and innovation ...

On 11 July 2019, the Commission presented its new legislative package on the European Institute of Innovation and Technology. The package consists of a recast of the current regulation and the new strategic innovation agenda. Created in 2008 at the start of the seventh EU research and development framework programme, the EIT is dedicated to increasing competitiveness, sustainable economic growth and job creation by promoting knowledge triangle activities (higher education, research and innovation). It operates through eight 'knowledge and innovation communities' that address specific societal challenges, such as digitalisation, urban mobility, climate and raw materials and is part of Horizon 2020. First edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

Hearings of the Commissioners-designate: Thierry Breton - Internal Market

11-11-2019

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication ...

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication skills'. At the end of the hearings process, Parliament votes on the proposed Commission as a bloc, and under the Treaties may only reject the entire College of Commissioners, rather than individual candidates. The Briefing provides an overview of key issues in the portfolio areas, as well as Parliament's activity in the last term in that field. It also includes a brief introduction to the candidate.

Hearings of the Commissioners-designate: Sylvie Goulard - Internal Market

26-09-2019

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication ...

This briefing is one in a set looking at the Commissioners-designate and their portfolios as put forward by Commission President-elect Ursula von der Leyen. Each candidate faces a three-hour public hearing, organised by one or more parliamentary committees. After that process, those committees will judge the candidates' suitability for the role based on 'their general competence, European commitment and personal independence', as well as their 'knowledge of their prospective portfolio and their communication skills'. At the end of the hearings process, Parliament votes on the proposed Commission as a bloc, and under the Treaties may only reject the entire College of Commissioners, rather than individual candidates. The Briefing provides an overview of key issues in the portfolio areas, as well as Parliament's activity in the last term in that field. It also includes a brief introduction to the candidate.

Horizon Europe: Framework programme for research and innovation 2021–2027

15-05-2019

In June 2018, the European Commission proposed a total budget allocation of €100 billion to finance science, research and innovation projects during the 2021-2027 period, of which the vast majority, €94.1 billion in current prices, would be allocated to the Horizon Europe framework programme. The main aims are to strengthen science and technology, to foster industrial competiveness, and to implement the sustainable development goals in the EU. Horizon Europe would introduce new features such as the ...

In June 2018, the European Commission proposed a total budget allocation of €100 billion to finance science, research and innovation projects during the 2021-2027 period, of which the vast majority, €94.1 billion in current prices, would be allocated to the Horizon Europe framework programme. The main aims are to strengthen science and technology, to foster industrial competiveness, and to implement the sustainable development goals in the EU. Horizon Europe would introduce new features such as the European Innovation Council, missions to promote research results, and new forms of partnerships. Horizon Europe also aims at reducing administrative burdens and promoting the concept of open science. More operational synergies are expected through better linkage with other EU programmes, such as cohesion policy (e.g. the European Social Fund), the new Digital Europe programme, and the new European Defence Fund. In March 2019, after several trilogue meetings, Parliament and Council reached a partial agreement. This agreement covers the content, but not, among other things, the budgetary issues, which will be discussed following the negotiations on the EU’s 2021-2027 long-term budget. Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

Horizon Europe – Specific programme: Implementing the framework programme

15-05-2019

In June 2018, the European Commission proposed a total budget allocation of €100 billion to finance science, research and innovation projects during the 2021-2027 period, of which the vast majority, €94.1 billion in current prices, would be allocated to the Horizon Europe framework programme. The main aims are to strengthen science and technology, to foster industrial competiveness, and to implement the sustainable development goals in the EU. Horizon Europe would introduce new features such as the ...

In June 2018, the European Commission proposed a total budget allocation of €100 billion to finance science, research and innovation projects during the 2021-2027 period, of which the vast majority, €94.1 billion in current prices, would be allocated to the Horizon Europe framework programme. The main aims are to strengthen science and technology, to foster industrial competiveness, and to implement the sustainable development goals in the EU. Horizon Europe would introduce new features such as the European Innovation Council, missions to promote research results, and new forms of partnerships. While the proposal for the framework programme sets out the general and specific objective of Horizon Europe as well as the structure and the broad lines of the activities to be carried out, the specific programme aims to define the operational objectives and activities, especially for missions, the European Research Council, the European Innovation Council, work programmes, and the committee procedure. In April 2019, after several trilogue meetings, Parliament and Council reached a partial agreement, covering the specific programme’s content. It does not however address budgetary issues, pending negotiations on the EU’s overall 2021-2027 long-term budget. Parliament thus adopted its first-reading position on 17 April 2019, and it is expected that further trilogue negotiations will take place in the new term.

EU space programme

15-05-2019

In June 2018, the European Commission proposed a total budget allocation of €16 billion to finance space activities during the 2021-2027 period. The bulk of this, €9.7 billion in current prices, would be allocated to Galileo and EGNOS, the EU's global and regional satellite navigation systems, €5.8 billion would be allocated to Copernicus, the EU's Earth Observation programme, and €500 million would be earmarked for security, such as the Space and Situational Awareness (SSA) programme and the new ...

In June 2018, the European Commission proposed a total budget allocation of €16 billion to finance space activities during the 2021-2027 period. The bulk of this, €9.7 billion in current prices, would be allocated to Galileo and EGNOS, the EU's global and regional satellite navigation systems, €5.8 billion would be allocated to Copernicus, the EU's Earth Observation programme, and €500 million would be earmarked for security, such as the Space and Situational Awareness (SSA) programme and the new Governmental Satellite Communication initiative (GOVSATCOM) to support border protection, civil protection and humanitarian interventions, for instance. The main aims of the new space programme are to secure EU leadership in space activities, foster innovative industries, safeguard autonomous access to space and simplify governance. The space programme would upgrade the European Global Navigation Satellite Systems (GNSS) Agency by expanding its tasks and transforming it into the new EU Agency for the Space Programme. In April 2019, after several trilogue meetings, Parliament and Council reached a partial agreement on the programme, covering the content, but not, among other things, budgetary issues. Parliament adopted its position at first reading in April. Further discussions on the outstanding issues can be expected once Council reaches agreement on the overall multiannual budget. Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

European Defence Fund: Multiannual financial framework 2021-2027

15-05-2019

In June 2018, the European Commission presented a legislative proposal on a European Defence Fund, including a budget allocation of €13 billion in current prices for the 2021-2027 period. The proposal aims to streamline and simplify the current legislation by integrating the Preparatory Action on Defence Research (research window) and the European Defence Industrial Development Programme (as one part of the capability window) into a single fund. The main aims of the fund are to foster the competitiveness ...

In June 2018, the European Commission presented a legislative proposal on a European Defence Fund, including a budget allocation of €13 billion in current prices for the 2021-2027 period. The proposal aims to streamline and simplify the current legislation by integrating the Preparatory Action on Defence Research (research window) and the European Defence Industrial Development Programme (as one part of the capability window) into a single fund. The main aims of the fund are to foster the competitiveness and innovativeness of European defence and to contribute to the EU's strategic autonomy. In this regard, the fund would support collaborative industrial projects; co finance the costs of prototype development; encourage the participation of small and medium-sized enterprises; and promote projects in the framework of permanent structured cooperation. Synergies are expected with other EU initiatives in the field of cybersecurity, maritime transport, border management, Horizon Europe, the space programme and the European Peace Facility. In April 2019, after several trilogue meetings, Parliament and Council reached a partial agreement on the programme, covering the content, but not, among other things, budgetary issues. Parliament adopted its position at first reading in April. Further discussions on the outstanding issues can be expected once Council reaches agreement on the overall multiannual budget. Second edition. The 'EU Legislation in Progress' briefings are updated at key stages throughout the legislative procedure.

Single market information tool (SMIT)

06-05-2019

Competition and consumer protection in the single market are often undermined by price discrimination based on residency. While many market players do not cooperate with the Commission, for instance not disclosing their pricing structure, Member States often do not have the means or the tools to collect and deliver the required information to the Commission. The SMIT proposal would provide the Commission with powers such as to request business-related information (e.g. cost structure or product volumes ...

Competition and consumer protection in the single market are often undermined by price discrimination based on residency. While many market players do not cooperate with the Commission, for instance not disclosing their pricing structure, Member States often do not have the means or the tools to collect and deliver the required information to the Commission. The SMIT proposal would provide the Commission with powers such as to request business-related information (e.g. cost structure or product volumes sold), and to address market failures in a more efficient way. The SMIT, however, has raised some criticism in the Council and EP, inter alia, because of the Commission’s choice of the legal basis for the proposal. Parliament’s Legal Service stated in an opinion that the correct legal basis for the Commission proposal is Article 337 TFEU: a legal basis which gives no legislative role for the EP. On 12 July 2018, the IMCO committee adopted a report which would amend the proposal’s legal basis. The JURI committee subsequently adopted an opinion stating that the Commission proposal goes beyond the powers available under the proposed revised legal basis. The report was initially due to be voted in plenary in October 2018, but was taken off the agenda. As the parliamentary term has concluded, the report has now lapsed. Third edition. The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure. Please note this document has been designed for on-line viewing.

European research area (ERA) – Regional and cross-border perspectives

30-04-2019

The ERA is a coordination system for national research infrastructures, and itself constitutes an infrastructure designed to create a single market for science. The main implementing instrument for the ERA is the European Union (EU) framework programme for research and innovation (R&I), currently Horizon 2020, alongside national roadmaps for implementing the common priorities. While the ERA offers a way to improve joint programming for research and innovation activities, interaction between research ...

The ERA is a coordination system for national research infrastructures, and itself constitutes an infrastructure designed to create a single market for science. The main implementing instrument for the ERA is the European Union (EU) framework programme for research and innovation (R&I), currently Horizon 2020, alongside national roadmaps for implementing the common priorities. While the ERA offers a way to improve joint programming for research and innovation activities, interaction between research infrastructures, the use of public-public partnerships between Member States, the application of smart specialisation strategies (S3) and the mobility of researchers, challenges still remain. The Horizon 2020 focus on excellence as the main criterion for receiving funding – a requirement designed to cement the EU's reputation in science and its global competitiveness – has led to a concentration of funding as well as R&I capacities in some countries and regions, while increasing the (innovation) gap between EU-15 and EU-13 countries. Other main challenges include the absence of a clear, shared definition of the ERA concept, the multiplication of instruments, and the non-use of binding legislation for ERA implementation. One way to improve the ERA and to broaden participation and cohesion without undermining the criterion of excellence might be to enhance the interoperability between funding and programmes and to continue working on making the EU state aid rules more R&I-friendly.

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