European Parliamentary Research Service Blog

Written by Marcin Grajewski,

Towards European recovery: How big and how quick a rebound will we see in 2021

The Covid‑19 pandemic has hit the global economy hard and its future is difficult to predict. Although the development of vaccines and proposed policy responses offer hope for the world to return to a stronger performance, economic rules may have to be modified. These were the main conclusions of a joint conference organised online by the European Parliamentary Research Service and the International Monetary Fund on 8 December 2020. The European Union has so far managed to avoid any devastating economic outcome thanks to robust policy responses, but the outlook is extremely uncertain. It is certainly not the time for fiscal austerity, but rather fiscal stimuli are needed to lift the economy from the doldrums, especially now that the threat of inflation seems to have disappeared from the horizon. The event, entitled ‘Towards European recovery: How big and how quick a rebound will we see in 2021’ was organised as a result of increasingly solid ties between the EPRS and the IMF and was led by the IMFs new Director of the European Department, Alfred Kammer and European Parliament Vice-President Pedro Silva Pereira (S&D, Portugal).

Opening the event, Parliament’s Vice-President Pedro Silva Pereira said the relations between the IMF and the European Union are improving on the whole, leaving behind some disputes between them on how to resolve the financial crisis, and the Greek crisis in particular, following the credit crunch in 2008‑2009. ‘Differences between our institutions did not last very long. Progressive convergence pave the way for the improvement in our relationship, this discussion is part of this cooperation,’ he said. Vice-President Silva Pereira stressed that any government aid must be designed in such a way as to reach the real economy. There are reasons for optimism: ‘There is hope of vaccination, we have had a presidential elections in the US, there is prospect of ending absurd trade wars, which are damaging our economies’, referring to Democrat Joe Biden’s election victory over Donald Trump, whose trade policy was volatile.

In his presentation, Director of IMF’s European Department, Alfred Kammer stressed that the pandemic has dealt a severe blow to Europe’s lives and economic activity, but thanks to a strong policy response – both at national and EU level – more devastating outcomes have been avoided. Economic activity is forecast to rebound in 2021, but the outlook is very uncertain. While recent news on vaccine development is promising, the strength of the near-term recovery will crucially depend on the impact of containment strategies, on people’s behaviour, and the degree of policy support. It is therefore paramount that supportive policies remain in place for some time, including those to limit a cascade of job destruction, bankruptcies, and bank closures. Alfred Kammer also stressed that the crisis represents an opportunity to address challenges that pre-date the crisis, such as inequality and low productivity through investment in green and digital transformations.

Cinzia Alcidi, Director of Research and Head of the Economic Policy Unit at the Centre for European Policy Studies (CEPS) in Brussels, and a research fellow at the LUISS School of European Political Economy, pointed to difficulties in combatting Covid‑19, because the pandemic affected countries and different economic sectors in a different manner and to a different degree. She added that, even with a vaccine in place, certain sectors will be in a bad shape for years to come. Before the situation stabilises, Europe will face repeated peaks and troughs in economic activity, possibly according to the intensity of the pandemic.

Iain Begg, Professorial Research Fellow at the European Institute of the London School of Economics and Political Science, concurred, saying ‘this disparity should alarm us enormously’. He pointed out how difficult it is make predictions, as we do not know with which assumptions to start. Iain Begg warned against dangerous political implications, namely the election of populists, if current government mishandle efforts to fight the disease. He stressed that differing abilities to absorb EU cohesion money among the EU countries aggravated the situation.

Finally, Jacob Funk Kirkegaard, senior fellow at the American think tank the German Marshall Fund and a senior fellow with another such institution, the Peterson Institute for International Economics, warned that the pandemic risks creating a lasting shift in consumer preferences, which will harm certain economic sectors. Even once the Covid‑19 virus is defeated, there may be less appetite in the future for use of civic aviation or going to the cinema or restaurants. He added that the Stability and Growth Pact, a set of rules underpinning the euro, remains, rightly, suspended. The crisis provides a good opportunity to reform the Pact. ‘The risk is doing too little rather than too much,’ he said. At some point, government should shift financial aid from providing immediate help to the business community to implementing structural reforms.

Alfred Kammer concluded the event, noting that the EU’s recovery fund, agreed in July 2020 and involving joint issuance of debt, provides a considerable opportunity to stimulate both the economy and the EU project as a whole.

Written by Suzana Anghel and Ralf Drachenberg,

© Adobe Stock

On Thursday 10 and Friday 11 December 2020, the European Council agreed on clarifications to the rule-of-law conditionality mechanism, which pave the way for the adoption of the Multiannual Financial Framework and the Next Generation EU recovery fund. The language used by EU leaders in their conclusions satisfied all actors involved, and avoided triggering renegotiation of the compromise reached between the co-legislators on the proposed regulation on rule-of-law conditionality. EU leaders also achieved a significant breakthrough in combating climate change, by committing to a binding EU reduction in greenhouse gas emissions of at least 55 % by 2030. Moreover, the European Council discussed the development, purchase and the EU-wide distribution of effective vaccines against Covid-19 and stressed the need to take forward proposals for a health union. EU leaders also agreed to step up the fight against radicalisation, terrorism and violent extremism. On external relations issues, they committed to develop a new agenda for the Mediterranean, agreed to expand restrictive measures in response to Turkey’s illegal drilling activities in the eastern Mediterranean and requested that the European Commission explore ways of preventing energy imports from nuclear facilities in breach of EU safety standards in third countries.

EU leaders paid tribute to the late President of France, Valéry Giscard d’Estaing, who initiated the 1974 decision to establish the ‘European Council‘. They also appointed Frank Elderson to the European Central Bank’s executive board, replacing Yves Mersch, whose term in office expired on 14 December 2020. The Euro Summit welcomed the Eurogroup’s agreement on the reform of the European Stability Mechanism (ESM), requested a work plan to complete the Banking Union, and called for rapid progress on the action plan on the Capital Markets Union.

1. European Council meeting

Table 1 – New European Council commitments and requests with a specific time schedule

Policy area Action Actor Schedule Climate change Put forward a legislative proposal for an EU green bond standard Commission June 2021 Climate change Update EU’s nationally determined contribution and submit to the UNFCCC Member States End of 2020 Eastern Mediterranean Submit a report on the situation in the eastern Mediterranean and EU-Turkey political and economic relations for consideration High Representative and the Commission

European Council March 2021 at the latest Coronavirus pandemic

The European Council welcomed the coordination efforts at EU level, in particular on lifting restrictions on cross-border tourism. It invited the Commission to propose a common framework for rapid antigen tests and for the mutual recognition of test results. EU leaders supported a similar coordinated approach for vaccination certificates. Preparations for the timely deployment and distribution of vaccines were highlighted as essential. EU leaders also stressed the importance of increasing resilience in the area of health by taking forward the proposals on a Health Union, for which German Chancellor Angela Merkel expressed support. EU leaders underlined that vaccination should be treated as a global public good and that the EU would contribute to the international response, including through the COVAX facility, to guarantee affordable and fair access to vaccines for all. A possible international treaty on pandemics within the World Health Organization framework should aim to reinforce international cooperation. The next meeting of EU leaders will be a special European Council on Health and on European security and defence, in February 2021.

Main message of the Parliament’s President: President David Sassoli stressed that coordinated efforts were key to addressing the crisis, increasing health systems’ resilience and improving pandemic preparedness.

Multiannual Financial Framework (MFF) / Next Generation EU (NGEU)

On 10 December, EU leaders agreed on an interpretative declaration, in the form of European Council conclusions, detailing their common view regarding the rule-of-law conditionality mechanism. This allowed Poland and Hungary to lift their veto, thereby clearing the way for the adoption of the overall package of measures making up the 2021‑27 MFF, including the NGEU. EU leaders had already agreed in principle on rule-of-law conditionality, as part of their July 2020 political agreement on the 2021‑27 MFF and NGEU, but the use of vague language at the time required them to return to this issue, and set out their views in greater detail to reach consensus.

The main innovation in the conclusions concerns a provision on the timing of the European Commission’s implementation of the new rule-of-law mechanism. The adoption of the Commission’s guidelines for the application of the regulation could be delayed, should an ‘action for annulment be introduced with regard to the Regulation’ before the Court of Justice of the European Union (CJEU). However, it is unusual that, prior to such a court case even being brought, the Commission would explicitly acknowledge that it would wait for the result before finalising its guidelines, causing confusion among experts and practitioners alike. The European Commission President, Ursula von der Leyen, clarified that, provided the overall package of measures linked to the 2021‑27 MFF is adopted in the coming weeks, the rule-of-law mechanism would apply from 1 January 2021. While acknowledging that the finalisation of the guidelines would require some time, she stressed that the Commission will look, from day one, at potential cases of breaches of the rule of law and deal with them appropriately once the CJEU has delivered its ruling. The European Council therefore only introduced a possible delay in the application of the mechanism, rather than actually changing or deleting it.

While claiming ‘victory’ after this agreement, Hungarian Prime Minister Viktor Orbán said that this debate was not only about the MFF, but also about defining where the centre of power in the EU lies, arguing that ‘the European Council conclusions are the strongest possible instrument in the European Union’, even stronger than regulations. He maintains this view, although the CJEU had already clarified – in ruling on a previous action brought before it by Hungary and Slovakia concerning measures addressing the migration crisis – that European Council conclusions are not legally binding.[i]

Main message of the Parliament’s President: David Sassoli called on EU leaders ‘to be consistent with the spirit and letter of the compromise reached’ by the co-legislators. Initial reactions from Members stressed that the proposed regulation remained unchanged and that a political declaration from the European Council was not legally binding, whereas the proposed rule of law regulation would be. Critical voices also questioned the legal basis on which the Commission could decide not to apply a law once it had entered into force.

Climate

On the eve of the fifth anniversary of the Paris Agreement on climate change, the European Council agreed to reduce greenhouse gas emissions by at least 55 % by 2030, as compared to 1990 levels. EU leaders invited the co-legislators – Council and European Parliament – to include this target in the forthcoming European Climate Law. The Parliament has already adopted a more ambitious reduction target of 60 %, which it will continue to support during the legislative process.

EU Member States should meet the 2030 target collectively and not individually, a confirmation of a change in policy initiated at the 15‑16 October 2020 European Council. Solidarity, fairness and inclusiveness are at the centre of the agreement, as requested by several Member States, including Poland and Hungary, who asked for reassurance that ‘key decisions will be taken by unanimity’. The agreement allows Member States to meet the goal of achieving carbon neutrality by 2050. The EU’s capacity to act as a credible global player on fighting climate change is also strengthened. President Charles Michel stressed the EU’s leadership position, whilst President von der Leyen welcomed a ‘great way to celebrate the first anniversary of our EU green deal’. She also underlined that the agreement gives ‘certainty to investors, to business, to public authorities and to citizens’.

The European Commission is expected to assess, across economic sectors, how the 2030 target can best be met and was encouraged to focus on the Emissions Trading System (ETS), thereby addressing ‘distributional concerns and energy poverty’. In response to Member States’ concerns, the European Council agreed that forthcoming legislation will address imbalances deriving from contributions made to the Modernisation Fund. EU leaders will consider this matter again, as well as the future Effort-sharing Regulation, at a later date. Member States are expected to update their nationally determined contributions in accordance with the 2030 target and submit them to the United Nations Framework Convention on Climate Change (UNFCC) secretariat by the end of 2020. EU efforts regarding the protection of biodiversity are also expected to be stepped up in view of the 2021 Conference of the Parties to the Convention on Biological Diversity.

Main message of Parliament’s President: Mr Sassoli stressed the EU’s ‘political and moral responsibility’ to deliver on the Paris Agreement. The ambitious 2030 target ‘to be set by the co-legislators’ and the Green Deal as a ‘new growth strategy’ will allow climate neutrality to be achieved.

Internal security

As flagged up in the EPRS outlook, EU leaders reiterated their condemnation of recent terrorist attacks, and pledged unity in the fight against radicalisation, terrorism and violent extremism. They welcomed the Commission’s new EU agenda on counter-terrorism and the adoption of the Council declaration on fighting anti-Semitism. EU Heads of State or Government called for the fight against the dissemination of terrorist content online to be enhanced, in relation to which a political agreement has been found between co-legislators on the corresponding proposal. To ensure the proper functioning of the Schengen area, agreed measures should be fully implemented, and police and judicial cooperation and coordination strengthened. EU leaders invited the co-legislators to swiftly move forward on the proposal on the strengthening of Europol’s mandate.

Main message of the Parliament’s President: For President Sassoli, a strengthened Schengen area, in which national police forces and judicial authorities cooperate in a frictionless manner, should be the cornerstone of the EU’s joint security action to fight crime and terrorism.

External relations EU-US relations

As expected, EU leaders considered relations with the United States of America and expressed readiness ‘to discuss shared priorities with the new President of the United States’. President Michel spoke of the US as a ‘friend and an ally’, and called for an ambitious transatlantic agenda.

EU-UK negotiations

While the issue was not discussed, President von der Leyen updated EU leaders on the negotiations on an EU-United Kingdom trade agreement, with positions remaining far apart, notably on level playing field provisions and on fisheries. The Commission has adopted contingency measures for a no-deal scenario, to ensure basic reciprocal fishing access in 2021, and air and road connectivity for six months. In a joint statement on 13 December 2020, the Commission’s President and the UK’s Prime Minister agreed to continue talks towards reaching an agreement.

Main message of the Parliament’s President: David Sassoli underlined that democratic scrutiny of an agreement remains essential, and that the necessary time should be made available for the Parliament to carry out its democratic mandate, before deciding on giving its consent to any agreement.

Southern Neighbourhood

A quarter of a century after launching the Barcelona Process, the European Council reaffirmed the EU’s commitment to stability and prosperity in its southern neighbourhood. It called for a new agenda for the Mediterranean, covering a wide range of issues.

Eastern Mediterranean

EU leaders noted that, ‘regrettably’, Turkey had continued its ‘unilateral actions and provocations’ in the eastern Mediterranean without demonstrating commitment to ‘sustained de-escalation’. The European Council invited the Council to adopt ‘additional listings’, based on the 11 November 2019 Council Decision on restrictive measures in view of Turkey’s unauthorised drilling activities, the extension of which is to be considered by March 2021; they also asked the High Representative to organise a multilateral conference on the eastern Mediterranean. Chancellor Merkel stressed that the EU hoped for ‘more constructive’ cooperation with Turkey but that, in light of developments, this was not possible for now. She stressed that there was a ‘certain strategic dependence’ between EU Member States which are also members of the North Atlantic Treaty Organization (NATO) on one hand, and Turkey on the other, underlining that a debate on armaments cooperation should be held within NATO.

Main message of the Parliament’s President: President Sassoli reminded EU leaders that Parliament condemned Turkey’s illegal actions in Varosha and that all tools available to the EU, including economic sanctions, must be used to send ‘a credible signal’ and to show solidarity with Cyprus.

2. Euro Summit

The Euro Summit on 11 December, with all 27 Member States participating, welcomed the Eurogroup’s agreement on the reform of the European Stability Mechanism (ESM). Most significant is the early introduction of a common backstop to the Single Resolution Fund (SRF) in the form of a credit line from the ESM. EU leaders invited the Eurogroup to create a ‘stepwise and time-bound’ work plan to complete the banking union and called for rapid progress on the Commission’s renewed action plan for a Capital Markets Union. The next Euro Summit, in June 2021, will discuss the economic challenges ensuing from the Covid‑19 pandemic.

Read this briefing on ‘Outcome of the meetings of EU leaders on 10 and 11 December 2020‘ in the Think Tank pages of the European Parliament.

Written by Alessandro D’alfonso,

© Thomas Reimer / Adobe Stock

During the December part-session, Parliament is due to vote on giving consent to the Council Regulation that establishes the EU’s next multiannual financial framework (MFF). Parliament consent requires a majority of its component Members (353 votes). On 14 December, its Committee on Budgets voted to recommend granting consent, following intense negotiations with the Council, which have secured additional resources for a number of flagship EU programmes together with a number of other improvements strongly advocated by Parliament.

European Commission proposal

The current MFF is in the form of a Council Regulation, which sets the distribution of EU budgetary resources between policy priorities for seven years until 31 December 2020. In May 2018, the European Commission put forward proposals for the future of EU finances, including the 2021-2027 MFF and the own resources system to finance it. Negotiations in the Council, where unanimity is required on the MFF Regulation, have proved lengthy. In May 2020, the Commission tabled revised proposals for a lower MFF worth €1 100 billion (2018 prices) and its financing, together with a proposal for a €750 billion recovery instrument, Next Generation EU (NGEU), in response to the severe impact of the coronavirus pandemic. NGEU aims to reinforce EU budgetary instruments in the first years of the next MFF, through funds borrowed on the capital markets.

European Council

Figure 1 – 2021-2027 MFF by heading

The July 2020 European Council meeting reached political agreement on a €1 074.3 billion MFF combined with the €750 billion NGEU. Many analysts deemed the total package momentous, notably for the launch of the unprecedented recovery instrument. However, the size of the 2021-2027 MFF agreed by the European Council represents a decrease in resources when compared to the current MFF (excluding the United Kingdom but including the currently off-budget European Development Fund). The new MFF is structured in seven policy areas or ‘headings’ (see Figure 1). As compared to the Commission proposal of May 2020, resources for funds with geographically pre-allocated expenditure such as cohesion policy and agriculture have been increased (by 2.2 % and 0.9 %). ‘Migration and Border Management’ and ‘Security and Defence’, the two headings affected by the largest relative cuts, have higher allocations than in 2014-2020, but significantly lower than in the Commission proposals and in Parliament’s position of November 2018. The same applies to instruments considered to be investments in EU common goods, such as Horizon Europe and Erasmus+. As for special instruments outside the MFF ceilings to address unexpected events, their amounts for 2021-2027 were set at €20.1 billion, including a reserve to tackle the impact of Brexit.

European Parliament position

Strong advocate of a robust MFF, the Parliament has been ready to negotiate with the Council on the 2021-2027 MFF since November 2018. It confirmed and updated its negotiating mandate in October 2019. Following the July 2020 European Council meeting, Parliament welcomed the creation of a recovery instrument to kick-start the economy, as proposed by Parliament in May 2020. However, it criticised various aspects of the political agreement on the MFF, expressing its readiness to enter negotiations immediately. On that basis, Parliament fast-tracked its legislative opinion on the own resources decision, adopted in September 2020, to enable the Council to ensure the timely launch of NGEU, while engaging in ten weeks of intense negotiations with the Council, with a view to improving the European Council’s settlement on the MFF. On 10 November 2020, Parliament’s negotiating team and the Council Presidency reached a compromise on the next MFF that now needs final confirmation by both institutions. The compromise includes various changes strongly advocated by Parliament that are to be incorporated into the MFF Regulation and in other texts of the broader package on EU finances, such as the interinstitutional agreement (IIA) on budgetary matters.

Reinforcements to flagship programmes and increased flexibility

Figure 2 – Agreed reinforcements by instrument

During the years 2022-2027, the overall level of MFF resources will gradually increase to €1 085.3 billion for commitments and €1 072.06 billion for payments (2018 prices), thanks to a new article negotiated by Parliament that introduces annual upward adjustments of the relevant ceilings. The financing of this €11 billion reinforcement will be linked to revenue stemming from competition fines, in line with Parliament’s long-standing call for such revenue to finance the EU budget. The top-ups will go to seven flagship programmes providing EU common goods, such as research, health, Erasmus+ and border management, based on an allocation key set in the new Annex II. Some of these programmes as well as two other instruments and Frontex (the Border and Coast Guard Agency) will receive a further €4 billion from the re-use of de-committed funds for research (another recurrent demand from Parliament), reflows from predecessor instruments and unused margins (see Figure 2). In addition, Parliament ensured a €1 billion increase for the Flexibility Instrument, and had limitations to its use removed from the Regulation.

Interinstitutional agreement (IIA) on budgetary matters

For NGEU, the IIA ensures greater involvement of the budgetary authority in its governance, while an annex establishes a roadmap for the introduction of new EU own resources to repay it. Cooperation arrangements are set for the adoption of future MFFs. The tracking methodology for climate mainstreaming will be enhanced, and the institutions will introduce corrective measures in case of insufficient progress towards the 30 % climate spending objective. Methodologies for a biodiversity spending target (7.5 % in 2024 and 10 % from 2026) and to measure the gender impact of expenditure are to be developed.

Delayed referral from the Council

Parliament was ready to tackle the consent procedure as a matter of urgency at its November II part-session, with a view to ensuring the timely launch of the new MFF. However, the Council delayed the referral of the Regulation because Hungary and Poland decided to withhold their support to the new MFF, being unhappy with the result of the parallel negotiations on a mechanism protecting the EU budget in case of ‘rule of law’ deficiencies in Member States. The European Council of 10-11 December 2020 solved the deadlock in the Council and the unmodified MFF Regulation was referred to Parliament. On 14 December, Parliament’s Committee on Budgets voted 30 to 2, with 4 abstentions, to recommend that plenary grant consent.

Consent: 2018/0166(APP); Committee responsible: BUDG; Rapporteurs: Jan Olbrycht (EPP, Poland) and Margarida Marques (S&D, Portugal).

Read this ‘at a glance’ on ‘Parliament’s consent to the 2021-2027 MFF‘ in the Think Tank pages of the European Parliament.

Written by Joanna Apap,

A visit to the Jean Monnet House is to immerse yourself in the location where the idea of a united Europe took its first steps. It was here where the founding text of European integration, the Declaration of 9 May 1950 by Robert Schuman (then French Minister for Foreign Affairs), was written. Although temporarily closed to visitors due to Covid‑19, the Jean Monnet House continues to encourage European citizens to discover Europe’s history and the life and work of the man called the ‘architect of a united Europe’, by providing access to exhibitions, news, and teaching materials for schools on the Jean Monnet House website.

As the owner of the Jean Monnet House, the European Parliament launched the EP Network of Political Houses and Foundations of Great Europeans in November 2017. The network aims to develop a broader family of the houses and foundations of leading figures who have made a significant contribution to the process of European integration since 1945, in order to federate them and engage in common projects. It also allows the Parliament to draw upon their knowledge and expertise, notably in providing another avenue for interaction with people throughout Europe, and helping the houses and foundations to develop closer links to the work of the Parliament.

Inspired by the project to unite the peoples of Europe, convinced that working together was the only way to ensure lasting peace, Jean Monnet employed pragmatic methods to highlight Europeans’ common interests. His house in Houjarray showcases the legacy he left for all European citizens, and traces the history of a united Europe to the present day. Once the house reopens, you can book a visit or educational workshop via this link: http://jean-monnet-house.booking.europarl.europa.eu/

Written by Damiano Scordamaglia,

© Martin / Adobe Stock

As it has done every year since 1983, the EU selects a specific topic on which to raise awareness and encourage public debate throughout the year. 2021 is to be the European Year of Rail. A wide range of events will be organised to highlight rail’s challenges and opportunities and its contribution to a greener environment. During the December plenary session, Parliament is expected to vote on a legislative proposal on this topic, to promote rail as a sustainable, innovative and safe mode of transport.

Background

In December 2019, the European Commission adopted a new development strategy, the Green Deal, to answer environmental challenges and address climate change. It aims to achieve climate neutrality by 2050 and a more resource-efficient economy. To achieve this, it will be necessary to reduce transport emissions by 90 % by that date. Rail is an environmentally friendly transport mode in terms of CO2 emissions and energy efficiency, and during the coronavirus pandemic, it played a key role in transporting passengers and essential goods. Over time, however, its modal share has decreased for freight and stagnated for passengers. The European Year of Rail aims to give the rail sector additional support and increase its attractiveness.

European Commission proposal

On 4 March 2020, the Commission adopted a proposal for a decision to designate 2021 European Year of Rail (EYR) to promote this transport mode and boost its share of passengers and goods. With dedicated events, debates and promotional activities, the EYR is also intended to highlight rail’s contribution to EU cohesion, the economy and industry. Among other topics, it will cover those related to regional development, industrial competitiveness, sustainable tourism, employment, innovation, education, youth and culture, not forgetting improving accessibility for persons with disabilities and reduced mobility. With an estimated budget allocation of €8 million, the EYR will rely on national coordinators and an EU steering group. The EYR will coincide with the international arts festival Europalia, whose 2021 edition will be devoted to rail’s influence on the arts and its contribution to social, economic and industrial change.

European Parliament position

During the presentation of the draft report to Parliament’s Committee on Transport and Tourism (TRAN) in June 2020, the rapporteur underlined EYR benefits such as giving visibility to rail as an attractive and sustainable transport mode. In its report adopted on 12 October 2020, the Committee advocated for EYR to inform passengers better on their rights and increase support for regional cross-border rail connections. It called for action to promote completion of the trans-European transport network (TEN-T). It also endorsed recommendations made by the Committee on Regional Development aimed at improving accessibility for the elderly, disadvantaged groups and to promote night trains. On 24 June 2020, Council agreed a common position for a negotiating mandate on the proposal. It asked the Commission to consider launching a feasibility study on an EU label to promote goods transported by rail. On 12 November 2020, despite budget uncertainties, a provisional agreement was reached, endorsed by the Council’s Permanent Representatives Committee on 18 November and approved by TRAN on 1 December. Parliament is expected to vote on the proposal during the December plenary session.

First-reading report: 2020/0035(COD); Committee responsible: TRAN; Rapporteur: Anna Deparnay-Grunenberg (Greens/EFA, Germany). For further information see our ‘At a Glance‘ note of November 2020.

Read this ‘at a glance’ on ‘2021 the European year of rail‘ in the Think Tank pages of the European Parliament.

Written by Gianluca Quaglio with Samuel Gregory-Manning,

© Metamorworks / Adobe Stock

Regenerative medicine (RM) is an interdisciplinary field that applies engineering and life science techniques to restore tissues and organs damaged by age, disease or trauma, as well as those with congenital defects. Promising data indicate that RM could be used across a wide array of organ systems and contexts, including surface wounds, cardiovascular diseases and traumas and treatments for certain types of cancer.

A key principle of RM is the delivery of therapeutic cells that directly contribute to the structure and function of new tissues, which are either autologous (derived from the same individual) or allogeneic (derived from different individuals of the same species). Numerous RM strategies are employed, including the use of materials and newly generated cells to take the place of missing tissue, replace its structure and function, or contribute to tissue healing. The body’s innate healing capabilities may also be used to promote regeneration. These strategies can be divided into four broad categories: 1) Recapitulating organ and tissue structure; 2) Integrating grafts with the host via vascularisation and innervation; 3) Altering the host environment through cell infusions or modulating the immune system; 4) Exploiting existing and new cell sources.

Potential impacts and developments

Recapitulating organ and tissue structure. Tissue and organ architecture is intrinsically connected with their function, therefore the ability to recreate their structure is essential to successfully regenerate the development of (recapitulate) healthy tissue. One such strategy is to decellularise organs, which involves the removal of immunogenic cells and molecules without losing structural and mechanical properties, and to recellularise them before transplantation. This approach has been used in animal models of liver, lung, kidney and other organ diseases. Decellularised tissues, without recellularisation, have been used to repair large muscular defects in humans.

Another approach for recapitulating organs is the fabrication of scaffolds. They can be made from naturally derived materials or from synthetic polymers. For example, hydrogels are composed largely of water and are often used as scaffolds due to their compositional similarity to tissue. These biodegradable polymers enable gradual replacement of the scaffold by the cells from the graft and the host. In addition to providing mechanical support to the forming tissue, some synthetic scaffolds can provide instructive signals to nearby cells. Furthermore, scaffolds specifically tailored to patients can be fabricated by using computed tomography and magnetic resonance imaging, to create 3D images of replacement tissues based on the patient’s body. Although the mechanical functions of synthetic scaffolds are extremely useful for building tissues, they can have severe side effects, such as inflammation, scarring and infection. Self-assembly is another line of recapitulating organ and tissue research, in which new tissues are engineered without a scaffold. This involves the use of cell sheet technology, in which successive sheets of cells are added to a special substrate, which allows cell-to-cell adhesion and signalling. This self-assembly of organ components could be especially powerful for the construction of organs with complex structures, such as lung alveoli and kidney nephrons.

Integrating grafts with the host via vascularisation and innervation. To vascularise engineered tissues, the body’s own processes can be exploited by introducing growth factors that trigger the development of new blood vessels. Growth factor proteins can stimulate cellular processes including cell proliferation, migration and differentiation during development and tissue healing. Several growth factors have been identified, although their use is limited by their effectiveness, depending on their method of delivery and their short half-life in vivo. Using a sequence of growth factors to initiate and then promote the maturation of newly formed vessels can yield more functional networks by mimicking natural development. Another approach to promote graft vascularisation is to prevascularise the graft or target site before implantation. Endothelial cells are a flat cell type that forms a sheet, the endothelium, lining all blood vessels. Endothelial cells and their progenitors can self-organise into vascular networks when transplanted on an appropriate scaffold. Combining endothelial cells with tissue-specific cells on a scaffold pre-transplantation can yield tissues that are better vascularised and possess tissue-specific function.

Innervation by the host is also necessary to achieve proper function and full integration of engineered tissues, and may be induced by growth factors. Hydrogels patterned with channels loaded with growth factors and extracellular components can be used to guide nerve growth following implantation, and have been employed to regenerate nerves.

Altering the host environment through cell infusion or modulating the immune system. Therapeutic responses can be induced by indirect means, such as through the secretion of growth factors and interaction with host cells, without the need for consistently transplanting a substantial number of cells into the host. Such examples include the infusion of human umbilical cord blood cells to aid in stroke recovery by stimulating blood vessel growth. This approach is limited however, as cells delivered by this method are often rapidly cleared by the body. However, disguising them from the immune system by encapsulation in hydrogel or coating them with targeting antibodies and peptides can increase residency time at the target site.

The immune system plays a major role in tissue regeneration and can either impair or contribute to the healing process. Engineering the immune system has shown promise in increasing the tolerance to grafts derived from non-host sources, for example by manipulating the responses of immune cells, such as regulatory T cells (cells integral to the immune response). Meanwhile, cellular immunotherapies have potential in tackling cancer: T cells can be removed from the body, modified in the laboratory and then returned to the body with newly acquired cancer-fighting capabilities. Reprogramming macrophages (cells involved in the detection, phagocytosis and destruction of bacteria and other harmful organisms), another cellular component of the immune system, is also a possibility in the fight against infectious diseases, for example tuberculosis, caused by Mycobacterium tuberculosis. An existing vaccine has proven to be ineffective and the use of antibiotics has led to resistant strains, however a study indicates promise for an alternative vaccine by reprogramming macrophages in the body to recognise and protect against Mycobacterium tuberculosis.

Exploitation of existing and new cell sources. All cells with specialised functions are generated from stem cells. They represent potentially inexhaustible sources of cells and research is approaching the clinical use stage. Human embryonic stem cells (hESCs) are pluripotent and have already been used in several clinical trials. Induced pluripotent stem cells (iPSCs) are formed from differentiated somatic cells, such as blood or skin cells, that have been induced to be pluripotent (through exposure to a suitable set of transcription factors). They possess the ability to differentiate into any other type of cell found in the human body. The discovery of iPSCs in 2006 opened up a vast array of possibilities. For example, an interesting new method is xeno-organogenesis, for the generation of transplantable human organs grown from pluripotent stem cells with the help of specially adapted animal embryos.

Anticipatory policy-making

Stem cells and tissue-engineered products are mentioned in EU legal acts on advanced therapy medicinal products (ATMP). The EU legal frame for ATMP is based on Regulation 1394/2007 and Directive 2001/83 relating to medicinal products for human use. Within the European Medicines Agency, the Committee for Advanced Therapies (CAT), evaluates the quality, safety and efficacy of ATMPs for final approval by the Committee for Medicinal Products for Human Use (CHMP).

Regenerative medicine presents several challenges to policy-makers. Firstly, the use of human stem cells poses ethical considerations, regarding both hESCs and iPSCs. While methods using the latter help alleviate the ethical dilemmas posed by the former, iPSCs raise their own set of concerns around their unlimited potential; the pluripotency of iPSCs afford the possibility of use for human cloning, and the development of human germ cells or embryos. Another area of ethical debate is xeno-organogenesis, where human pluripotent stem cells are used in animal embryos. An additional particular hurdle to policy related to RM is the emergence of a flourishing market in unproven ‘stem cell’ treatments, in the absence of rigorous scientific evidence. Ethical alarms have been raised over patient safety, as well as the potential negative impact that these practices may have on the development of effective therapies – if many marketed treatments are unsafe or useless – leading to loss of public and investor faith.

Read this ‘at a glance’ on ‘What if we could renew all our cells?‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘What if we could renew all our cells?’ on YouTube.

Written by Clare Ferguson,

© European Union 2020 – Source : EP/Christian CREUTZ

The agreement reached in the European Council meeting of 10‑11 December, which should unblock the adoption of the 2021-2027 Multiannual Financial Framework (MFF) agreed last month, means that budgetary issues are likely to be the focus of this session. (Although the agenda will only formally change when the session opens.) The relevant committees are expected to meet on Monday evening, to consider the draft MFF Regulation, the accompanying draft interinstitutional agreement on budgetary discipline, and the proposed regulation on ‘rule of law’ conditionality. The plenary would then vote on the package later that week. Parliament obtained certain improvements to the political compromise reached in July in the European Council, and is keen to see these reflected in the plans for next year’s spending. As the year ends, the 2021 budgetary procedure should thus also be a key item on the session agenda, once Parliament’s Committee on Budgets considers the Commission’s revised draft budget.

Whatever the final decision concerning the EU’s finances for the coming years, farmers and people in rural areas need to know that the funding on which they depend will not be cut at the end of the year. Parliament is therefore set to debate and vote on transitional rules for support from the common agricultural policy (CAP), extending current EU farm policy until the new CAP framework is in place at the end of 2022. This longer transition period, based on a Parliament proposal, should ensure more certainty for farming communities and allow greater focus on environment and climate measures. In the meantime, due to the need to increase EU payment appropriations in line with updated forecasts of expenditure and other adjustments to expenditure and revenue, Parliament is also to vote on Draft Amending Budget No 10/2020 during this plenary session. The limited expenditure adjustments proposed would allow an increase in payment appropriations of €1 569.3 million for the European Agriculture Guarantee Fund and for certain decentralised agencies.

Confirming the compromise agreement reached on the MFF and the considerable funding measures already agreed to combat the coronavirus crisis, Members are also expected to vote on an additional package, REACT‑EU. This is intended to mobilise €47.5 billion, offering Member States the flexibility to use EU funds to address the challenges faced by the sectors hardest hit by the pandemic, such as health care, tourism and culture. The funding should support social cohesion and climate objectives, with a particular focus on helping young people into work.

The salience of the debate on the rule of law attests to the fact that European citizens have shown increasing irritation regarding fraudulent use of EU funding in recent years. In response, the EU is setting up a new European Public Prosecutor’s Office to provide an independent and decentralised EU office that can investigate, prosecute and bring crimes, such as fraud, corruption or cross-border VAT fraud, to judgment. However, this means that the relationship between the EPPO and the European Anti-fraud Office (OLAF) needs to be carefully codified in the rules of both organisations, based on principles of close cooperation, information exchange, complementarity and non-duplication. Members are expected to debate and vote on final adoption of the compromise text during this session.

Members are also expected to give their opinion, in a secret vote, on the nomination of Marek Opioła as the Polish member of the Court of Auditors to replace Janusz Wojciechowski, now EU Commissioner for agriculture. While Parliament’s decision is not legally binding, the Budgetary Control Committee nevertheless examines each candidate on their ability to perform their duties in complete independence and in the general interest of the EU. The publicity surrounding these hearings and the questionnaire answered by the candidates therefore make it difficult (but not impossible) for the Council to over-ride any negative opinion delivered by Parliament.

The coronavirus pandemic is thought to have exacerbated the rise of authoritarianism worldwide. It is fitting therefore that the Sakharov Prize, which draws attention to the situation of those who resist the repression of human rights and fundamental freedoms, will be awarded in a formal ceremony on Wednesday morning. This year, the prize goes to the democratic opposition in Belarus, represented by the Coordination Council for its peaceful role in opposing the falsification of the August 2020 elections.

A joint debate is planned for Members to discuss the legislation that ensures that Europeans have access to safe drinking water (particularly on tap, rather than in bottles). Parliament is then likely to proceed to the final adoption of the revised Drinking Water Directive and an associated resolution, changes that are a direct result of the European citizens’ initiative ‘Right2Water’. The updated rules address concerns about endocrine disruptors, pharmaceuticals and microplastics by introducing a watch-list mechanism, to begin within one year. However, Parliament is keen to see water quality further improved by integrating measures in policy on agriculture, transport and energy, chemicals and pollutants, and urban wastewater treatment. Another issue that stems from protecting European citizens from pollutants and chemicals, but potentially ranges much wider, is a change in the system of committees for overseeing the Commission’s implementing powers. Following repeated difficulties and controversy with authorising pesticides and genetically modified organisms, the Commission proposed changes in the procedure to encourage Member States to take on greater responsibility for decisions in such cases.

Finally, Members are expected to vote on a provisional agreement on a proposal to designate 2021 as the European Year of Rail. The move reflects the EU’s climate ambition, as rail is a highly energy-efficient transport mode. The year should help to boost passenger and goods traffic by encouraging the development of greater accessibility, cross-border rail connections, and promoting night trains.

Written by Nora Milotay,

© fotomek / Adobe Stock

Traditionally the social economy is considered to be an ever-growing set of private, formally organised enterprises and networks that build on multiple types of resources and cooperation, with local anchorage and democratic and participatory decision-making processes. Its primary aim is not to make profit but to meet the needs of its members and that of the wider society. The social economy is active in an increasing number of sectors, and while some of its actors are small non-profit organisations, others are large organisations with international outreach. It generates 6 to 8 % of the European Union’s gross domestic product (GDP). However, it is a driver not only of economic activity but also of normative values, such as solidarity and inclusion. Since its conception in the 19th century, it has taken on board innovation in social relations and in societal and community spheres, human development targets and socio-political empowerment.

In the first two decades of the 21st century, with new risks and opportunities arising owing to the twin digital and green transformations there is an emerging debate, rethinking economic growth theories with more focus on inclusion and combatting inequality, and exploring the relevance of traditional welfare state models. This debate has intensified in the wake of the 2008 crisis, and now also as a result of the coronavirus pandemic and crisis. The social economy can play a central role in this context. While it has been badly affected by these crises, it also has the potential to mitigate some of the negative impacts. The social economy’s values-based approach to the economy can enable it to generate new elements in the ecosystems in which it exists and be an important ‘engine’ in the immediate recovery and the longer-term possible restructuring of the economy towards more resilience, fairness and sustainability.

For the social economy to be able to reach its full potential across the Member States and help to achieve green and inclusive growth with renewed welfare state models, it needs to be supported simultaneously at all levels. EU action can contribute to this. The main areas of EU intervention are: facilitating access to finance and markets, including the digital single market; creating better framework conditions, including for cooperation and cross-border activity; supporting innovation, including new business models; and developing international relations. The Commission action plan on the social economy expected in 2021 might address many of these issues.

Read the complete briefing on ‘What future for the social economy?‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘What future for the social economy?’ on YouTube.

Written by Vivienne Halleux,

© Narcis / Adobe Stock

Covering nearly one third of the land surface of the globe, forests make a wide range of direct and indirect contributions to human well-being. Home to most of the world’s terrestrial biodiversity, they also play an essential role in climate change mitigation, removing about a quarter of the CO2 that human activities add to the atmosphere. Worldwide, millions of hectares (ha) of forests and other types of vegetation burn every year.

Fire dynamics are shaped by a complex set of factors, including human activity and climate. While a warming and drying climate increases the risk of fires, fires, by releasing greenhouse gases into the atmosphere, contribute in turn to global warming. Forest fires that are not balanced by vegetation regrowth, i.e. fires used in the deforestation process, and fires burning on carbon-rich peatlands are of particular concern. Fires also emit air pollutants, including particulate matter, with adverse impacts on human health. Beyond emissions of particles and gases, forest fires can also affect biodiversity and ecosystem conditions, and damage soils.

The European Union (EU) has committed to protecting the world’s forests under several international agreements and initiatives, including the United Nations (UN) Convention on Biological Diversity and the Paris Agreement on climate change. At EU level, funding is available to support forest fire prevention and restorative measures, as well as research into fire risk management. The Union civil protection mechanism can be called upon for help by any country in the world when national response capacities to fight fires are overwhelmed. Under the European Green Deal, legislative and non-legislative measures are expected in the near future to strengthen forest protection within and outside the EU. The European Parliament recently asked the European Commission to propose an EU legal framework to tackle EU-driven global deforestation, based on mandatory due diligence for companies placing forest- and ecosystem-risk commodities and derived products on the EU market, with penalties in the event of non-compliance.

Global forest distribution, with top 10 countries by reported forest area (as a % of the world’s forests)

Read the complete briefing on ‘Forest fires: Environmental stakes‘ in the Think Tank pages of the European Parliament.

Listen to policy podcast ‘Forest fires: Environmental stakes’ on YouTube.

 

Written by Martin Russell,

© BortN66 / Adobe Stock

Sanctions are a key part of the EU’s human rights toolbox. The EU adopts restrictive measures – mostly in the form of travel bans and asset freezes – against individuals and organisations responsible for some of the worst human rights violations.

Until now, the EU has mostly adopted sanctions targeted at individual countries. Responding to violations from countries not already covered by EU sanctions means adopting a completely new framework for each country. However, the EU is now shifting to a more thematic approach, under which sanctions focus on a particular type of problem rather than a country. For example, the EU already has sanctions on chemical weapons and cyber-attacks that can be flexibly applied to offenders from any country in the world, and it has now added thematic human rights sanctions.

The United States’ 2016 Global Magnitsky Act, named after Sergey Magnitsky, a Russian whistleblower who died in jail after exposing corruption by high-level officials, gives some idea of how future EU human rights sanctions will work. Under the act, the US government has adopted sanctions against over 100 human rights violators from a wide range of countries.

The proposal for the EU’s new sanctions regime was tabled by the Netherlands in 2018. The necessary legislation was adopted by the Council of the EU on 7 December 2020, in time for UN Human Rights Day on 10 December 2020.

Read the complete briefing on ‘EU human rights sanctions: Towards a European Magnitsky Act‘.

Countries that have EU/UN sanctions against them for human rights violations

Written by Magdalena Sapala, Marianna Pari and Nadejda Kresnichka-Nikolchova,

This briefing provides a graphic presentation of the political agreement reached on 10 November 2020 between the Parliament and the Council Presidency, enabling the EU to finance the extraordinary needs in the aftermath of the Covid-19 pandemic. It highlights the improvements that the European Parliament achieved in particular.

Read this briefing on ‘EU financing for 2021-2027: Political agreement on the 2021-2027 Multiannual Financial Framework (MFF), the Next Generation EU (NGEU) recovery instrument and new own resources‘ in the Think Tank pages of the European Parliament.

Written by Suzana Anghel and Ralf Drachenberg,

© Adobe Stock

On 10 and 11 December, EU leaders will meet for their 13th meeting of 2020, bringing to a close a year of exceptionally intensive activity for the European Council. EU Heads of State or Government will address a packed agenda, covering most of 2020’s key issues: the coronavirus pandemic, climate change – notably the new EU greenhouse gas emissions reduction targets for 2030 – and the fight against terrorism, as well as various external relations issues, such as relations with the US and with Turkey. Two crucial issues, which are not on the formal agenda but could dominate discussions, are rule-of-law conditionality for the 2021-27 Multiannual Financial Framework (MFF) and the EU-UK negotiations. EU leaders are also expected to appoint a new member of the European Central Bank’s executive board. The Euro Summit on 11 December will focus on the revision of the European Stability Mechanism (ESM) treaty and on progress towards a banking union.

1. Implementation: Follow-up of previous European Council commitments

As is customary, at the start of the European Council meeting, the President of the European Parliament, David Sassoli, will address the Heads of State or Government. Angela Merkel, the Chancellor of Germany, which currently holds the rotating six-month presidency of the Council of the EU, will provide an overview of progress made in implementing previous European Council conclusions.

2. European Council meeting Coronavirus pandemic

The European Council is expected to assess the overall situation and discuss coordination efforts in response to the Covid-19 pandemic, including on issues such as vaccines, testing and the mutual recognition of test results and vaccinations, as well as the lifting of restrictions. Most recently, at the 15th G20 Leaders’ summit in November 2020, the European Council’s President, Charles Michel, emphasised the EU’s strong commitment to ensuring affordable and fair access to a vaccine for all. In order to prevent future pandemics and provide a more coordinated response, Charles Michel also proposed the creation of an international treaty on pandemics. This would be negotiated among all nations as well as United Nations organizations and agencies, in particular the World Health Organization, which, the President of the European Council stressed, ‘must remain the cornerstone of global coordination against health emergencies’.

Climate Change

Following an ‘orientation debate’ held in October 2020, the European Council is expected to agree on new EU greenhouse gas emissions reduction targets for 2030. The European Commission has proposed a 55 % reduction in emissions – compared to 1990 levels – as the target for 2030. For its part, the European Parliament supports the position that the EU can only meet its 2050 carbon neutrality goals by reducing emissions by at least 60 % by 2030. Political consensus is still to be found, as some Member States, in particular Poland, continue to express sensitivities on the level of ambition. An agreement on emissions reduction targets would allow Member States to submit their updated nationally determined contributions (NDCs) to the United Nations Framework Convention on Climate Change by the end of 2020.

The EU’s credibility and ability to act as a global leader in the fight against climate change depends on both the level of ambition on emissions reductions and its ability to achieve its own targets. Thus far, the EU has been able to go beyond its own target for 2020, and reduce emissions by 24 % instead of the agreed 20 % target. Climate diplomacy is, as recognised by the European Council, central to the EU’s climate action. Its importance will only grow in the coming years if the US were to re-join the Paris Agreement, in which case a significant part of the future transatlantic agenda could be dedicated to climate change dialogue.

Internal security and the fight against terrorism

The European Council will address security issues, focusing on the fight against terrorism and violent extremism, including online. It will most likely reiterate its condemnation of recent terrorist attacks, affirming its solidarity in the fight against terrorism and upholding the EU’s common values. Discussions among EU leaders will also draw on the 13 November 2020 statement of EU home affairs ministers on the recent terrorist attacks in Europe. In this joint statement, ministers pledged to protect Europe’s societies and its people, to uphold common values and the European way of life and to safeguard our pluralist societies. They recalled that the security structures and legal frameworks in the Member States and at European Union level have been strengthened over the past two decades, but indicated that additional efforts and resources are required to fully implement the legislation adopted.

The day before the European Council, on 9 December, the European Commission adopted a new ‘EU agenda on counter-terrorism’ progress report, and a proposal to strengthen Europol’s mandate. EU Heads of State or Government are expected to call on the Commission to take work forward regarding the new EU agenda on counter-terrorism and ask for the swift adoption of the proposal on preventing the dissemination of terrorist content online. Moreover, in order to improve the proper functioning of the Schengen area, new steps in police cooperation and coordination as well as the reinforcement of external borders are required – as is also the fully effective implementation of previously agreed measures.

With regard to fighting illegal content online, the European Council will most likely welcome the forthcoming Commission proposal for a Digital Services Act expected on 15 December 2020, which aims at reinforcing the responsibilities of online platforms. Regarding the judicial aspects of fighting terrorism, EU Heads of State or Government should draw on the results of the meeting of EU justice ministers of 2 December covering ways to better combat hate speech online and improve digital cooperation in order to better address cross-border digital crime.

Multiannual Financial Framework

EU leaders are also expected to discuss the MFF for the 2021-27 period, notably rule-of-law conditionality, namely the proposed general regime of conditionality for the protection of the Union budget. Following Hungary and Poland’s decision to withhold their consent on the Own Resources Decision, which is a prerequisite for the roll-out of Next Generation EU (NGEU), the EU co-legislators have so far not been able to adopt the overall package of measures linked to the 2021-27 MFF. Hungary and Poland chose to block the adoption of the Own Resources Decision which requires unanimity, while the rule-of-law conditionality regulation, the real subject of their concern, is decided upon by qualified majority voting.

The European Commission is considering different options, in case no agreement can be found on time, such as to move forward with only 25 Member States, or at least adopting the urgently needed recovery fund, aimed at helping Member States deal with the economic effects of the pandemic.

On 26 November, the Prime Ministers of Hungary and Poland issued a joint declaration, in which they reiterated their disagreement with the current compromise between the Council Presidency and the European Parliament on rule-of-law conditionality. They argue that it does not comply with the agreement reached at the July 2020 European Council meeting. They propose to ‘limit the scope of any additional budgetary conditionality to the protection of the financial interests of the Union’, and to discuss in the European Council whether a link between the rule of law and the financial interests of the Union should be established. This ‘elevation’ of issues from the Council to the European Council level would constitute another case of the European Council becoming involved in a legislative process; although Article 15(1) TEU clearly specifies that it ‘shall not exercise legislative functions’. This practice occurs specifically in cases when individual Member States seek to impose consensus as the decision-making method on a sensitive issue, and thus to circumvent qualified majority voting (QMV) in Council, as has previously happened, notably for migration. The European Parliament has repeatedly expressed its discontent with this practice.

Following a discussion with David Sassoli, the European Parliament’s President, Antonio Costa, the Prime Minister of Portugal, and incoming holder of the rotating six-month presidency of the Council of the EU, stressed that it was vital to conclude the MFF discussions at this European Council meeting. Antonio Costa and David Sassoli underlined that the rule-of-law conditionality agreement between Council and Parliament could not be reopened.

External relations EU-UK negotiations

Given the deadlock over recent weeks, the two negotiating teams are currently attempting to iron out a deal as soon as feasibly possible on outstanding issues, notably on the level playing field provisions, governance and fisheries. Whether the result delivers a breakthrough or ‘no deal’, preparations need to be accelerated at EU level. The European Council meeting could in principle sign off a final agreement, although, for now, the topic is not formally on the agenda. In addition, an extra European Parliament plenary session could be scheduled in late December, if necessary, to ratify an agreement.

Eastern Mediterranean and relations with Turkey

The European Council is expected to assess the evolution of the situation in the eastern Mediterranean and consider a new framework for relations with Turkey. Similarly to what happened in October 2020, Turkey is once again de-escalating ahead of a European Council meeting by pulling back its seismic exploration vessel, Oruç Reis. However, this time around, the decision of EU leaders will most probably be based on an assessment of Turkey’s behaviour ‘over a certain period of time’ rather than on one-off actions. The most sensitive aspect for EU leaders to consider is whether to agree to the introduction of sanctions over Turkey’s repeated violations of the Greek and Cypriot maritime zones, a course of action which the European Parliament has supported in a recent resolution. Turkey’s assertive behaviour in the eastern Mediterranean is one of the many issues that have brought EU-Turkey relations to a historic low in recent months.

Southern Neighbourhood

Twenty-five years after the launch of the Barcelona process, EU leaders will consider the Southern Neighbourhood. The new Leaders’ Agenda 2020-2021 first indicated the European Council’s intention to hold a debate on the Southern Neighbourhood, a development later confirmed by the 15-16 October European Council conclusions. This will be the first time in over five years that the European Council will focus on this region, while a joint communication on a renewed partnership is awaited. In her State of Union address, Commission President Ursula von der Leyen confirmed the EU’s commitment to supporting its southern partners in their job creation and economic development efforts.

Other external relations items

The European Council could also touch upon other external relations items, including relations with Africa, following the EU leaders meeting with African Union leaders scheduled for 9 December 2020.

EU-US relations

On 2 December 2020, the European Commission and the High Representative, Josep Borell, published a joint communication on ‘A new EU-US agenda for global change’. The document aims to shape a ‘new forward-looking transatlantic agenda’ for cooperation along four main lines: i) the fight against Covid-19 and the reform of the World Health Organization; ii) climate change; iii) technology, trade and standard setting; and iv) security and defence. On 7 December 2020, the Foreign Affairs Council held an exchange of views on transatlantic relations, and EU leaders are expected to discuss the topic further during their meeting. President Michel, who has spoken in favour of rebuilding ‘strong transatlantic’ ties, has held consultations with his peers on this issue ahead of the European Council meeting.

3. Euro Summit

On 11 December, the Euro Summit will meet for the first time in 2020 in an inclusive format with all EU‑27 leaders (the standard Euro Summit includes only the leaders of the euro-area countries together with the non-euro-area countries that have ratified the Treaty on Stability, Coordination and Governance in the EMU (TSCG)).[i] EU leaders will receive an update on progress towards a banking union from Eurogroup President Paschal Donohoe, and are likely to welcome the agreement reached in the Eurogroup meeting of 30 November on the reform of the European Stability Mechanism (ESM). The latter notably includes the establishment of a line of credit to the Single Resolution Fund by 2022 with a view to further safeguarding financial stability and strengthening the euro area’s resilience. Once signed by Eurogroup members, probably in January, the revised ESM treaty will need to be ratified by national parliaments, which could take up to a year. Paschal Donohoe noted that ‘we want to keep our progress and our momentum going’. This agreement is a significant milestone towards the completion of a banking union. The next steps would be an agreement on the third pillar of a banking union, a European deposit insurance scheme, on which negotiations have been stalled for years.

Read this briefing on ‘Outlook for the meetings of EU leaders on 10-11 December 2020‘ in the Think Tank pages of the European Parliament.

Written by Suzana Anghel, Izabela Bacian, Ralf Drachenberg and Annastiina Papunen,

© Adobe Stock

Established as an informal summit meeting in 1975, the European Council became a formal European Union institution, with a full-time President, in 2009, on the entry into force of the Treaty of Lisbon. It consists of the Heads of State or Government of the 27 EU Member States, the President of the European Council and the President of the European Commission (Article 15(2) of the Treaty on European Union (TEU)). The latter two individuals have no voting rights. Meetings of the European Council are normally also attended by the High Representative of the Union for Foreign Affairs and Security Policy. The President of the European Parliament is ‘invited to speak’ as the first item on the European Council’s agenda, followed by an exchange of views (Article 235(2) of the Treaty on the Functioning of the EU, TFEU). At its formal meetings, normally four per year, the European Council adopts ‘conclusions’ that are aimed at identifying policy priorities and action to be taken by the Union as a whole.

The European Council’s role is to ‘provide the Union with the necessary impetus for its development and define the general political directions and priorities’ (Article 15(1) TEU). It cannot exercise legislative functions. At the beginning of the 2014-2019 and the 2019-2024 institutional cycles, the European Council also adopted an agenda of strategic priorities, designed to guide the work of the European Union over the five-year period.

Reflecting the direction taken by the 2017 Rome Agenda, set out on the occasion of the 60th anniversary of the Rome Treaties, the new 2019-2024 strategic agenda, adopted by the Heads of State or Government at their meeting in June 2019, defines migration and the protection of citizens as the top priorities for action in the forthcoming five years. Next comes the development of a stronger economic base, including the fight against unemployment, followed by climate change and social issues. Finally, it looks to increase the EU’s influence and defend its interests in the world. The four core priorities set out in the 2019-2024 strategic agenda broadly corresponded to the concerns of EU citizens at the time, as reflected in the 2019 standard Eurobarometer.

Read the complete study on ‘Key issues in the European Council: State of play in December 2020‘ in the Think Tank pages of the European Parliament.

The role of the European Council is to ‘provide the Union with the necessary impetus for its development’ and to define its ‘general political directions and priorities’. Since its creation in 1975, the European Council has exercised considerable influence over the development of the European Union, a process enhanced by its designation as a formal institution of the Union under the Lisbon Treaty in 2009.
The European Council Oversight Unit within the European Parliamentary Research Service (EPRS) monitors and analyses the activities, commitments and impact of the European Council, so as to maximise parliamentary understanding of the political dynamics of this important institution.
This EPRS publication, ‘Key issues in the European Council’, which is updated every quarter to coincide with European Council meetings, aims to provide an overview of the institution’s activities on major EU issues. It analyses twelve broad policy areas, explaining the legal and political background, the main priorities and orientations defined by the European Council and the results of its involvement to date, as well as some of the future challenges in each policy field.

Written by Liselotte Jensen,

© Olivier Le Moal / Adobe Stock

The EU’s current greenhouse gas emissions reduction target for 2030, of 40 % compared with 1990 levels, was agreed by the European Council in 2014, along with targets for renewable energy and energy efficiency. Since 2017, the European Parliament has been urging the European Commission to develop a zero-emission long-term 2050 vision for the European Union. Following Parliament’s reiteration of this demand and a similar call from the European Council, in November 2018 the Commission adopted a strategic long-term vision, aiming for climate neutrality by 2050.

Commission President Ursula von der Leyen has committed to this goal with the European Green Deal, proposing to set the EU 2050 climate-neutrality target in legislation by means of a European climate law. As part of the climate-neutrality commitment, the Commission is proposing to review and revise the 2030 greenhouse gas emissions target, to ensure a realistic and feasible trajectory towards 2050. On 17 September 2020, on the basis of a public consultation and an in-depth impact assessment, the Commission adopted a communication on the climate target plan. The climate target plan proposes to increase the 2030 target from a 40 % emissions reduction to a 55 % net emissions reduction, compared with 1990 levels. The communication outlines sectoral targets and approaches, as well as the regulatory revisions and new initiatives needed in the climate and energy policy framework. In the 2021 Commission work programme, the numerous revisions required are presented under the package ‘Fit for 55’.

The 2030 target, embedded in the future climate law, will be subject to interinstitutional negotiations, with Parliament having adopted its position of a higher 60 % emissions reduction target at its October 2020 plenary session. The European Council discussed the climate target plan at its October 2020 meeting, and will revisit it in December with a view to agreeing the 2030 target.

Read the complete briefing on ‘EU climate target plan: Raising the level of ambition for 2030‘ in the Think Tank pages of the European Parliament.

Written by Nicole Scholz,

© jarun011 / Adobe Stock

The coronavirus (Covid-19) pandemic remains a major threat to public health in the European Union (EU). Testing is considered an essential aspect of the response to the pandemic.

There are different types of coronavirus tests, each having its own merits and limitations. The timing of tests is also critical. Among the tests that detect current infection, (rapid) antigen tests have recently come to the fore.

In view of a resurgence of coronavirus cases, the European Commission adopted on 28 October 2020 a recommendation for a common EU testing approach for Covid-19. It addresses key points linked to testing capacities and resources, as well as rapid antigen tests. This was followed on 18 November by a recommendation on the use of rapid antigen tests for the diagnosis of Covid-19, which provides guidance on how to select rapid antigen tests, when they are appropriate and who should perform them. It also calls for validation and mutual recognition of tests and their results.

EU and international public health bodies, including the European Centre for Disease Prevention and Control and the World Health Organization, have given testing recommendations and outlined strategies and objectives.

Several Member States have started to use rapid antigen tests in practice. Testing policies range from testing only people who both have symptoms and also meet specific criteria, to testing anyone with symptoms, to open public testing, including asymptomatic people.

In a September 2020 resolution, the European Parliament called for the adoption and implementation of a common testing strategy under which test results would be recognised in all Member States.

Since the outbreak of the pandemic, coronavirus testing has rapidly evolved and will continue to play an important role. New methods are emerging, including ‘out of the box’ options.

Read the complete briefing on ‘Coronavirus testing: Contributing to efforts to stem the second wave‘ in the Think Tank pages of the European Parliament.

Written by Marcin Grajewski,

© Leigh Prather / Adobe Stock

As the second wave of the coronavirus pandemic appears to be peaking in Europe, governments and citizens are buoyed by the successful human trials of several vaccines which their producers hope to be able to distribute broadly over the coming months. There is a growing expectation that, as these vaccines start to become available to the general public in coming months, daily life may gradually return to normal, or at least to a ‘new normal’, during the course of 2021. Meanwhile, many regions of the world continue in some form of lockdown to stave off the second wave. The political debate on health policy is currently focussed on not only priorities for distributing the vaccine in the advanced economies, such as those of the EU, but on how to make it available to poorer countries too, as scientists underline that the virus knows no borders.

This note offers links to recent commentaries, studies and reports from major international think tanks on pandemic-related issues. Earlier think tank studies on the issue can be found in the ‘What Think Tanks are Thinking’ of 10 November.

Managing the unimaginable
Friends of Europe, December 2020

Meeting the healthcare needs of chronic patients: Lessons to learn from the Covid-19 pandemic
Friends of Europe, November 2020

Covid-19 is ushering in a new era in geopolitics: We must embrace it
Friends of Europe, November 2020

How African tech reinvented universal income to combat Covid-19
Friends of Europe, November 2020

Course aux vaccins contre le Covid-19: Quels enjeux géopolitiques?
Institut des relations internationales et stratégiques, November 2020

Les conséquences économiques du Covid-19 et ses enjeux géopolitiques
Institut des relations internationales et stratégiques, November 2020

Covid-19: Des vaccins sous le sapin?
Institut des relations internationales et stratégiques, November 2020

The scarring effect of Covid-19: Youth unemployment in Europe
Bruegel, November 2020

Grading the big pandemic test
Bruegel, November 2020

Europe is losing competitiveness in global value chains while China surges
Bruegel, November 2020

Covid-19 could leave another generation of young people on the scrapheap
Bruegel, November 2020

Covid-19 révèle la solitude stratégique de l’Europe
Institut français des relations internationales, November 2020

Les opinions publiques européennes à l’égard de la Chine au temps de la Covid-19: Différences et points communs à travers le continent
Institut français des relations internationales, November 2020

French public opinion on China in the age of Covid-19: Political distrust trumps economic opportunities
Institut français des relations internationales, November 2020

A Democratic tour de force: How the Korean State successfully limited the spread of Covid-19
Institut français des relations internationales, November 2020

Europeanising health policy in times of coronationalism
Clingendael, November 2020

The effects of the Covid-19 pandemic on US and European commitment to the multilateral economic order
Instituto Affari Internazionali, November 2020

The Aftermath: American power after Covid-19
Instituto Affari Internazionali, November 2020

Covid-19 and the foreign policy perceptions of US public and elites
Instituto Affari Internazionali, November 2020

The pandemic, digitisation and international trade: New challenges for the G20
Istituto per gli Studi di Politica Internazionale, November 2020

After the pandemic: Global overheating to take centre stage at T20 and G20
Istituto per gli Studi di Politica Internazionale, November 2020

The skill challenges posed by Covid-19
Centre for European Policy Studies, November 2020

The insurance properties of common debt issuance
Centre for European Policy Studies, November 2020

Tracking European solidarity during Covid-19: Lessons from the first wave
European Council on Foreign Relations, November 2020

Bubble trouble: Estonia and the coronavirus crisis
European Council on Foreign Relations, November 2020

Latvia during Covid: How success bred complacency
European Council on Foreign Relations, October 2020

What is the world doing to create a Covid-19 vaccine?
Council on Foreign Relations, November 2020

Home for thanksgiving: How holidays may present a public health threat
Council on Foreign Relations, November 2020

Reflections on the election in pandemic America
Council on Foreign Relations, November 2020

Improving pandemic preparedness: Lessons from Covid-19
Council on Foreign Relations, November 2020

Télétravail: Qu’apporte le nouvel accord conclu par les partenaires sociaux ?
Institute Montaigne, November 2020

Covid-19: La réponse des plateformes en ligne face à l’ultradroite
Fondation pour l’innovation politique, November 2020

Covid, trade, the G20, WTO and Oscar Wilde
European Centre for International Political Economy, November 2020

Six aspects of daily life rapidly changed by Covid-19
Chatham House, November 2020

Why the pandemic and populism still work together
Chatham House, November 2020

Reimagining the global economy for a post-COVID-19 world
Brookings Institution, November 2020

How to address inequality exposed by the Covid-19 pandemic
Brookings Institution, November 2020

Coronavirus pandemic
Fundacion Real Instituto Elcano, November 2020

La crise de la Covid19 pourrait conduire à revoir la place du militaire dans les priorités budgétaires
Groupe de Recherche et d’Information sur la Paix et la Sécurité, November 2015

How to use data for the public interest, even – or especially – in a pandemic
Heinrich Böll Stiftung, November 2020

Government in a pandemic
Cato, November 2020

Protecting democracy and public health from online disinformation
German Marshall Fund, November 2020

A public sector view of tech, inclusion, and participation during the coronavirus
German Marshall Fund, October 2020

Can the EU solve the budget and rule-of-law crisis?
Carnegie Europe, October 2020

Coronavirus tracking apps: Normalizing surveillance during states of emergency
Carnegie Europe, October 2020

Brexit and Covid-19 are a toxic mix
Centre for European Reform, October 2020

The Covid crisis, an opportunity for a ‘new multilateralism’?
Confrontations Europe, October 2020

Recovering from the pandemic: An appraisal of lessons learned
Fondation Européenne d’Etudes Progressistes, October 2020

Covid: Faute d’avoir mis à profit les six derniers mois, l’État sacrifie nos libertés
Institut Thomas More, October 2020

Read this briefing on ‘Coronavirus: The battle continues‘ in the Think Tank pages of the European Parliament.

Written by Jana Titievskaia, Carla Stamegna, Vadim Kononenko, Cecilia Navarra and Klemen Zumer,

© European Union, 2020

The period from the fall of the Berlin Wall to the global financial crisis of 2007 marked an era of fast-growing interdependence between different economies and cultures, brought about by cross-border movements of people, goods, services, capital and data. Far from being the first ‘globalisation’ wave, it is considered to be a period of ‘hyperglobalisation’. The decade which followed the financial crisis of 2007-2008 was marked by a slowdown in global interconnectedness. In 2019, the term ‘slowbalisation’ spread, to signify the waning of globalisation as we know it. For instance, international trade and investment relative to gross domestic product (GDP) started to decline. Supply chains began to contract after years of global outsourcing and offshoring. In terms of international cooperation and multilateralism, the pace of the world’s economic integration waned. For some governments, notably the Trump administration in the United States of America (USA), it is no longer evident that international institutions such as the World Trade Organization or the World Health Organization are fit for purpose. Rising nationalist and populist leaders in several parts of the world began questioning the ideological doxas of globalism and, in some cases, neoliberalism. Nevertheless, globalisation in other areas, such as international data flows, migration and tourism, continued to expand, indicating that perhaps globalisation was merely changing shape. In 2020, the coronavirus pandemic dealt a profound shock to global trade, investment and travel. The disruption to the physical movement of people, goods and services brought about by the pandemic has been so severe that the thesis of ‘slowbalisation’ merits thorough analysis.

Globalisation has been evolving over time, becoming increasingly complex and multi-faceted. In this paper, five pathways of globalisation have been selected to illustrate the contrasting ways in which global integration has been slowing down, accelerating or continuing. Each exhibits a different development pattern:

• Cross-border trade in goods and services slowed in terms of volume and relative to GDP, in spite of record low average tariffs. This slowdown can be traced to variation in supply chains, accounting principles, escalating protectionism, and most recently Covid‑19.
• Global financial openness slowed after the financial crisis in terms of cross-border capital flows and bank lending. However, international regulatory cooperation in the realm of global finance continued to increase, only recently showing a trend towards some reversal.
• Deepening inequality has been a by-product of hyperglobalisation, has continued during the slowbalisation phase, and is likely to continue after Covid‑19. The causes are rooted in government policies affecting income distribution, including taxation and the strength of multinational corporations.
• Globalisation of social interactions, reflected in rates of tourism and migration, did not slow until the sudden arrival of the Covid‑19 pandemic.
• International digital exchanges, measured by cross-border data flows, have continued expanding throughout the ‘slowbalisation’ period. Social distancing and restrictions on international travel are likely to accelerate globalisation in the digital realm.

As a result of the Covid‑19 crisis, the future could be one of patchy globalisation, characterised by more immaterial exchanges, and posing further challenges to the future of global governance and international cooperation. The EU could lead the way towards a more sustainable and considered form of globalisation in each of these realms.

Read the complete ‘in-depth analysis’ on ‘Slowing down or changing track? Understanding the dynamics of ‘Slowbalisation’‘ in the Think Tank pages of the European Parliament.

 

Written by Ivana Katsarova,

The International Day of Persons with Disabilities has been marked every 3 December since 1992 to promote awareness and mobilise support for critical issues relating to the inclusion of persons with disabilities in society and development. According to the United Nations, a billion people in the world, 80 % of them in developing countries, live with disabilities today. Globally, an estimated 46 % of people aged 60 and over are among those with disabilities. Moreover, one in every five women and one in every 10 children are likely to experience disability in their lifetime. In the EU, there are over 70 million people with a disability, roughly equivalent to 17.5 % of the total population. This figure is set to rise rapidly over the next decade, given that the EU population is ageing and that more than a third of those over 75 have a disability. Worryingly, people with disabilities are among the hardest hit by Covid-19.

Read this ‘at a glance’ on ‘Lowering hurdles to sport for persons with disabilities‘ in the Think Tank pages of the European Parliament.

Written by Elena Lazarou and Jana Titievskaia with Cecilia Handeland,

© corund / Adobe Stock

The election of the 46th President of the United States took place on 3 November 2020 amidst the unprecedented scenario of the coronavirus pandemic. Following several days of vote-counting, the democratic candidate, Joe Biden, secured the electoral votes needed to become the next President of the United States. His inauguration will take place on 20 January 2021.

Domestic concerns, most notably the management of the coronavirus crisis and the economy, as well as racial issues, were the most important subjects in determining voter preference. As usual, foreign policy did not rank highly amidst voters’ concerns. However, for the European Union, the impact of the election of Joe Biden on US foreign policy will leave a substantial mark on the future course of transatlantic relations and of global cooperation.

While foreign policy under the forthcoming Biden Administration is expected to depart from some of the key tenets of President Trump’s ‘America First’ foreign policy, experts also point to a high possibility of continuity in areas such as trade and relations with China. However, on climate change, multilateral cooperation and support for NATO, expectations are high regarding a potential return to deep levels of transatlantic consensus and cooperation. Biden’s foreign policy is likely to focus on multilateral cooperation, for example by re-joining the Paris Agreement on climate change and resuming US support for the World Health Organization. The former Vice-President has stated he will likely re-join the Joint Comprehensive Plan of Action (JCPOA, or Iran Nuclear Deal) in time, and pursue an extension of the New Strategic Arms Reduction Treaty (START) with Russia.

Read the complete briefing on ‘US foreign policy after the 2020 Presidential election: Issues for the European Union‘ in the Think Tank pages of the European Parliament.

Written by Vasilis Margaras,

© Brad Pict / Adobe Stock.

The coronavirus pandemic is severely impacting the European population and the economy. Consequently the social and economic impact of the crisis is being felt in all EU regions. Although it is still too early to make concrete predictions about the long-term economic impact, the risks of increased disparities and the unravelling of previous years’ progress are real. Furthermore; the consequences of the Covid‑19 pandemic could well further impede the social, economic and territorial cohesion of the EU, by exacerbating existing divisions between EU regions.

The European Commission has put forward a number of proposals to alleviate the impact of the coronavirus pandemic on EU territories. The European Parliament has been generally supportive of the Commission’s proposals, triggering urgent procedures to approve them swiftly so that EU citizens could benefit immediately. Actions under various EU funds and policy instruments are now geared towards health-related purposes and the rekindling of the economy. In these critical times, cohesion policy is increasingly drawn upon to provide emergency relief and liquidity support to affected small and medium-sized enterprises (SMEs) and companies. Amendments to the regulation governing the European structural and investment (ESI) funds were approved by Parliament to allow flexible use of the funds in addressing the challenges posed by the crisis. A number of additional regulations and policy instruments meanwhile complement the ESI funds in the fight against the pandemic’s negative consequences.

Local and regional authorities are at the forefront of the pandemic, as they are often responsible for providing much of the emergency response. They can use the adopted EU measures to reinforce their coronavirus action and to support their economic sectors.

This briefing is an update of an earlier edition, published in May 2020.

Read the complete briefing on ‘Exceptional coronavirus support measures of benefit to EU regions‘ in the Think Tank pages of the European Parliament.