02/03/2022
EU Insight, 11 February 2022
Brussels, 11 February 2022
PROPOSED EUROPEAN CHIPS ACT TO REINFORCE SEMICONDUCTOR SUPPLY CHAIN
The European Commission presented a proposal for a European Chips Act Regulation to face recent global semiconductor shortages and strengthen Europe’s technological leadership in the sector – with a view to improve Europe’s competitiveness, resilience, and to contribute to the green and digital transition. To these ends, the Commission proposed a pooling of resources between Member States, as well as third countries, and a Chips Fund framework to attract investments and enhance production capacities. Moreover, the Commission presented an accompanying Communication that will allow a coordination mechanism between Member States and the Commission to monitor the supply of semiconductors to commence immediately. The proposal will now undergo the ordinary legislative procedure.
EU ECONOMY PROJECTED TO GROW AMID RISING INFLATION AND SUPPLY STRAINS
The European Commission published its Winter 2022 Economic Forecast. The Forecast expects that the strain on the economy caused by the current wave of infections will be short-lived, and that EU economic activity will regain traction as supply bottlenecks ease and inflationary pressures are expected to moderate. Indeed, the EU economy is projected to grow by 4% in 2022 and 2,8% in 2023. Moreover, the inflation outlook was revised upwards, as inflation in the euro area is expected to peak at 4,8% in Q1 2022 before eventually declining to 1,7% in 2023. However, the Commission warned that uncertainty and risks to growth and inflation outlook remain high.
COMMISSION EXTENDS EQUIVALENCE FOR UK CENTRAL COUNTERPARTIES UNTIL 2025
The Commission published its decision to extend the UK central counterparties’ (CCPs) equivalence until June 2025. The three-year extension stems from the acknowledgement of the persisting heavy reliance of EU market actors on UK clearing infrastructure and the need to allow for extra time to review the EU central clearing framework to build domestic capacity and strengthen supervision. The Commission also published a targeted consultation on the EU central clearing framework as well as a call for evidence on ways to expand central clearing activities in the EU and improve the attractiveness of EU CCPs. The consultation will remain open until 8 March.
NEW RULES FOR DESIGN, PRODUCTION AND DISPOSAL OF BATTERIES ONE STEP CLOSER
The European Parliament’s Committee on Environment, Public Health and Food Safety adopted its position on the proposed rules to govern the battery product life cycle. The new rules would introduce a new category of batteries for “light means of transport” and a requirement for batteries used in appliances to be designed for easy and safe removal and replacement. MEPs also called for more ambitious waste collection targets and want the battery industry to perform value chain due diligence to address risks around handling raw materials. The report is expected to be adopted by the Plenary in March, following which interinstitutional negotiations will begin.
EUROPEAN COHESION POLICY DECREASES REGIONAL DESPARITIES
The European Commission published its 8th Report on Economic, Social and Territorial Cohesion. The report highlights, amongst under things, the impact of the coronavirus pandemic at regional level as well as the outcomes of the EU’s Cohesion policy. In particular, the Commission found that disparities between European Member States have been decreasing as a consequence of European intervention. However, employment rates and fiscal consolidation are still not back to pre-crisis levels of 2008 along with economic stagnation and decline in middle-income regions. Yet, overall, cohesion policy resulted in a more balanced and sustainable growth with long term benefits.
COMING UP NEXT WEEK
- 13-14 February: Informal meeting of trade ministers. On the agenda: current issues and main priorities of trade policy.
- 14-15 February: Informal meeting of ministers for work, employment and social affairs. On the agenda: Impact of climate change and digitalisation on the labour market.
- 14-17 February: European Parliament Plenary session. On the agenda: EU-Russia relations, the Rule of Law and the consequences of the ECJ ruling, harmonised EU approach to travel measures.
- 15 February: College of Commissioners meeting. On the agenda: Defence package, Space package.
- 16 February: Informal meeting of European ministers responsible for Space.
- 17-18 February: European Union – African Union summit. On the agenda: Africa-Europe Investment Package, Peace and Security Architecture.
Karl Isaksson, Managing Partner Brussels, Kreab
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Kreab • Tel: +32 2 737 6900 • karl.isaksson@kreab.com • www.kreab.com/brussels • Twitter: @KreabEU.