02/06/2020
COMMISSION PROPOSES €750BN RECOVERY INSTRUMENT ON TOP OF €1.1TN MFF 2021-2027
The European Commission presented its proposals for a revised EU budget (MFF) for 2021-2027 and for a recovery instrument called Next Generation EU. Together, both proposals will bring the total financial firepower of the EU budget to €1.85 trillion (€1.1tn from the MFF and €750bn from the recovery instrument, out of which €500bn is in grants and €250bn in loans). The proposal on Next Generation EU builds on the Franco-German initiative, which called for a €500bn fund to be financed by EU borrowing in the markets and proposed several new sources of revenue. The Commission called for an agreement on the proposals among EU leaders by July.
GREEN AND DIGITAL REMAIN TOP PRIORITIES IN AMENDED COMMISSION WORK PROGRAMME
The Commission published its amended 2020 work programme, following changing priorities due to the COVID-19 crisis. Overall, the Commission maintains its central commitment to a twin transition of sustainability and digitalisation. Initiatives which are deemed vital for the economic recovery will maintain their original timelines, while others will be delayed to allow time for stakeholder input and Commission preparation. Additionally, the Commission announced that it will launch a Fit-for-Future platform in coming weeks, which aims to simplify and modernise EU legislation in the COVID-19 context. Lastly, the Commission will extend ongoing consultations by six weeks while consultations on future initiatives will not be launched immediately unless justified.
SUSTAINABLE TAXONOMY A STEP CLOSER TO OF FORMAL ADOPTION
The European Parliament’s Economic and Monetary Affairs (ECON), and Environment, Public Health and Food Safety (ENVI) committees formally adopted the final Taxonomy Regulation with 96 votes in favour, 29 against, and 7 abstentions. The joint committee vote was an exceptional procedure due to the fact the Council introduced small changes after the political agreement in December 2019 and post lawyer-linguist review. Since the Council adopted the final text last month, the last remaining step for the file is a plenary vote by the Parliament, which is expected to be adopted without issue in June.
VIRTUAL EU-JAPAN SUMMIT FOCUSES ON COORDINATED RESPONSE TO COVID-19
This week, the EU and Japan held a virtual Summit at leaders’ level. Unsurprisingly, the international response to the COVID-19 outbreak dominated the agenda. Overall, both sides emphasised their determination to adjust their economic responses using all relevant policy tools, including digital tools, as well as the need for coordination at international level. They also underlined the importance of keeping the trading system open and of making global supply chains more resilient. Finally, the EU and Japan committed to promote further international discussion and elaboration on “Data Free Flow with Trust” (DFFT) with a view to facilitate safe and secure cross-border data flows.
RELIEF MEASURES FOR AVIATION AND RAILWAYS ENTER INTO FORCE
The Council adopted a temporary amendment to the rules on air services to support airlines and airports in the face of a sharp drop in air traffic due to the COVID-19 pandemic. The Council also adopted an extension to the transposition deadline for the rail safety and interoperability directives of the fourth railway package to give the rail industry and authorities flexibility and legal certainty in the current circumstances. Both legal acts, which have already entered into force, are part of the transport emergency package presented by the Commission on 29 April.
COMING UP NEXT WEEK
Karl Isaksson, Managing Partner Brussels, Kreab