Archive pour la catégorie ‘Economy - Finances’

The European Parliament regulates home loans

Lundi 30 janvier 2012

The new regulations of the Internal Market Committee seeks to better protect the borrower.

To this end, the committee amended a draft directive which aims to curb irresponsible mortgage borrowing, and also tighten up the supervision of lenders, whilst respecting existing lending practices in EU Member States.

The Internal Market and Consumer Protection Committee’s opinion on the Commission proposal concerns consumer information requirements such as advertising and pre-contractual information. Other aspects, such as calculating annual charges and authorising and supervising credit intermediaries, will be handled by the Economic and Monetary Affairs Committee.

In 2008, outstanding residential mortgage lending in the EU27 represented about 50% of EU GDP. Household debts, of which mortgage debt is the largest component, accounted for some 70% of euro area households’ total financial liabilities at the end of 2008, says the committee’s report.

Borrower’s right to information

The choice of a mortgage is affected by many factors besides the borrower’s ability to repay the loan. These include the information provided by lenders, the borrower’s financial literacy, conflicts of interest and irresponsible behaviour by certain market players.

MEPs therefore backed a Commission proposal to ensure that mortgage lending is governed by general rules on marketing and advertising, and which would require prospective lenders to make available information such as annual percentage rates and total costs of credit before the borrower signs the contract.

This information should be tailored to the borrower’s knowledge of and previous experience with lending practices, and should enable him or her to take a reasoned decision on whether he or she wishes to conclude the credit agreement. The information on the proposed mortgage agreement should be always made available on paper, another durable medium or in electronic form, adds the text.

MEPs also amended the text to say that a warning that the buyer could lose the property if he or she defaults on the mortgage commitments should appear in the standard information provided, rather than in advertising, because a full explanation of this risk would be too long and too costly for smaller advertisers to provide, and requiring it would therefore hand a an unfair competitive advantage to larger ones.

Dispute resolution

To put borrowers and lenders on a more equal footing, the proposed legislation would require Member states to establish out-of-court redress bodies to resolve disputes. An amendment inserted by the committee would align the dispute resolution mechanism with the EU consumer credit directive, to prevent the proliferation of similar, but differing, rules.

Next steps

The proposed directive now goes to the Economic and Monetary Affairs Committee, which will endeavour to take account of the Internal Market Committee’s opinion, but reserves its right to a final say on those parts of the directive that fall within its sphere of competence.

The Economic and Monetary Affairs Committee will vote its amendments to the text on 28 or 29 February.

Cohesion spending increase

Vendredi 27 janvier 2012

The budgetary constraints currently faced by Member States mean that the EU’s structural funds are an ever more valuable source of growth-enhancing investment especially in the regions that need it most.

The effective use of these funds gathered pace in 2011, with payments to Member States from last year’s cohesion policy budget hitting a record €32.9 billion, an 8% increase on the €30.5 billion paid out in 2010. This higher payment rate from the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund for 2011 also reflects the fact that we are well into the second half of the 2007-2013 financial framework, which is when most invoices are submitted. EU structural funds in 2011 helped to further the Single Market through investments in a broad range of strategic and growth-enhancing areas, including broadband connections, research and development infrastructure, innovation projects, new Small- and Medium Sized Enterprises (SMEs) and education.

In addition, the European Commission has taken measures to prioritise growth-enhancing investments. For example, temporary “top-up” payments worth €374 million were made in 2011 to Greece and Romania, following the entry into force of new rules to support the economies of Member States experiencing difficulties in terms of financial stability.

In Greece, a total of €11.5 billion will be invested in around 180 priority projects, leading to the creation of between 90,000 and 108,000 jobs.

For Italy, an action plan for the southern or Mezzogiorno regions will enable €3.1 billion of EU and national funding to be invested rapidly in regional projects in education and school infrastructure, broadband, railways and supporting SMEs. This is the result of a reprogramming of funds, in cooperation with the national and regional authorities, to trigger much-needed growth in crucial sectors.

The Commission has also called on Member States to use €22bn of European Social Fund money not yet committed to projects to improve job opportunities for young people. Today one in five youngsters looking for work cannot find a job. The new ‘Youth Opportunities Initiative’ is pleading for Member State to work on preventing early school leaving; helping youngsters develop skills relevant to the labour market; ensuring work experience and on-the-job training and helping young people find a first good job. The European Commission has also set out concrete actions to be financed directly by EU funds.


At the end of 2011, the average payment rate for all three funds (European Regional Development Fund, European Social Fund and Cohesion Fund) in the EU was 33.4% of the amounts allocated for the 2007-2013 period. These rates vary significantly between countries, from 16.5% to 48.3%; while the analysis per fund reveals that the ERDF payments increased by 55% year-on-year from 22.3% at end 2010 to 34.3% at end 2011. For ESF, the payment rate has increased by 52%, from 23.25% at end 2010 to 35.43% at end 2011 (total advanced and interim payments). There are still differences between countries that vary from18.68% to 60.43%, but in all member states an improvement can be noticed.

Bill Gates calls for maintaining the budget for development aid

Mercredi 25 janvier 2012

Bill Gates calls for holding 0.7% of gross national income the budget of development aid for the next programming.

Mr Gates stressed that he cites the EU approach to development as an example when urging Chinese leaders or the US Congress to step up their development aid to the same level.

“Whether you like it or not, you are the leader in development aid and it is very unlikely we can do without this example if Europe does not continue its upward push. This is particularly important as you are looking at your 7-year budget. I know you have some difficult trade-offs to make because of the economic situation, but the money you devote to development will have a huge impact in the world”, said Mr Gates.

Speaking as co-chair of Bill & Melinda Gates Foundation, Mr Gates offered “living proof” that development aid “works” to save lives in the world’s poorest countries. “I think this picture is more beautiful than any European anthem”, he said, presenting a graph showing that child deaths have fallen from 20 million to under 8 million in the past 50 years.

Mr Gates also noted that vaccines are an inexpensive way to save millions of lives, citing a 99% reduction in polio cases since 1988.

MEPs were almost unanimous in their praise of this presentation, although some criticized the Gates Foundation’s links to Monsanto, a biotech company that is trying to introduce hybrid seeds in Africa.

Catherine Grèze (Greens, FR), asked “we know that the majority of African countries are against GMOs. Is it true that one of the objectives of research centre financed by foundation is to pave the way to change the laws so that cotton GMOs can be introduced in Kenya, even knowing that one of the major concerns of developing countries is losing control of their own seeds?”

Mr Gates replied that Monsanto was currently working on a project to develop royalty-free drought resistant maize, and that since all African leaders are certainly against starvation and malnutrition, it was about time that they looked into new tools. “Seeds that are dramatically more drought resistant will benefit thousands of lives”, he insisted.

Parliament’s President Martin Schulz said he was “deeply impressed and fascinated” by the work of the Gates Foundation and stressed that EU has a moral duty to show international solidarity, given that it accounts 8% of the global population, but 30% of global wealth.

“We have to deliver on our promises if we do not want to risk our credibility and I hope that, irrespective of political colours in this house, Parliament will stand shoulder to shoulder with the aims of Gates Foundation”, said Mr Schulz.

The European Economic and Social Committee wishes an integration of energy policies.

Mardi 24 janvier 2012

The EU advisory body has today championed the idea of setting up a European Energy Community (EEC), creating an EU-wide internal energy market and shaping a common, strategic approach to energy issues.

The idea was first mooted by Jacques Delors, a former European Commission President. The Committee is very much behind the proposal and has expanded on it in its own-initiative opinion entitled Involving civil society in the establishment of a future European Energy Community adopted at today’s plenary session.

Concerned about the dismal progress being made in completing an internal market for electricity and gas, the EESC bleakly pointed out that only 10% of electricity transited between countries, consumers were unable to choose an operator established abroad possibly offering more attractive terms, energy poverty was increasing, network planning was largely a national business, and the EU did not negotiate with supplier countries as a single bloc, putting member states and the EU at a disadvantage.

In a bid to build an integrated EU energy market, the EESC stressed the importance of a joint approach to energy production, transmission and consumption, and said Member States should act “responsibly” in this field. It vented its frustration with some countries’ unilateral decisions on energy choices, saying that “in a spirit of solidarity and efficiency” such decisions should have been taken “by common accord at EU level” instead. It also warned against prematurely ditching any low-emission energy source as that might jeopardise the EU’s energy policy objectives.

As a first step towards a European Energy Community, the EESC endorsed the idea of creating regional energy blocs within which countries and operators would coordinate their key decisions on energy mix and network development. “Not only would this generate considerable economies of scale and industrial development linked to new energy sources,” said Pierre Jean Coulon (France, Workers Group), rapporteur of the opinion. “It would also lead to a gradual integration of hitherto separate markets and cause prices to align.”

As budgets are squeezed and the development of new energy sources becomes ever more expensive, it was crucial to pool national resources and channel them towards projects that are in keeping with the EU’s objectives, said the EESC. It also favoured using bonds to finance these projects.

The EESC backed Mr Delors’ idea of creating “a European gas purchasing group” to strengthen the bargaining power of Member States and companies. It suggested establishing a common supply structure for gas and other fuels that would ensure consistency in negotiations and contribute to reducing prices. The EESC was adamant that the European Commission was best placed to negotiate energy agreements with third countries on behalf of Member States, should they have an impact on several EU countries. The Commission should also be allowed to ensure national energy deals with third countries are in line with EU internal market rules and security of supply’s objectives before they enter into force, said the Committee.

Given the all-encompassing impact of energy decisions, the public could not be left out of the debate, said the EESC. It thus proposed setting up a European civil society forum tasked with monitoring energy issues. The forum would work closely with European institutions and establish dialogue mechanisms with civil society representatives in Member States. “Energy policy is an area where winning public acceptance is of crucial importance and that can only be achieved through fair and transparent information,” said Mr Coulon.

The European Commission calls for fiscal discipline still.

Lundi 23 janvier 2012

For the second consecutive year, Brussels urges Member States the utmost restraint.

Today, EU financial programming and budget Commissioner Janusz Lewandowski sent a letter to the heads of all EU institutions stating that numerous Member States are operating cuts in their administrative expenditure due to the current economic and financial crisis. “Therefore, adds Commissioner Lewandowski, it is of the utmost importance to continue to demonstrate that the EU institutions are acting responsibly in the current climate of austerity”.

The Commission wants to lead by example: in 2013, it intends to reduce the number of posts in its establishment plans by 1%, as the first step towards a 5% staff reduction over the next five years. This is in line with its proposal for the 2014-2020 Multiannual Financial Framework (MFF) calling for a cut across all EU institutions.

In 2012, the Commission voluntarily froze its own administrative expenditure, i.e. a 0.0% nominal increase compared to the 2011 budget. This was achieved by significantly reducing expenditure linked to buildings, information and communication technology, studies, publications, missions, conferences and meetings.

- During the first months of each year the European Commission establishes the draft EU budget based on estimates of expenditure sent by all EU institutions.
- Article 314 of the Lisbon Treaty states that “the Commission shall consolidate these estimates in a draft budget which may contain different estimates”.
- Last February (2011), Commissioner Lewandowski issued a similar letter to the heads of all EU institutions urging them to cut expenditures in such areas as IT, publications, travel…
Administrative expenditure (functioning costs of the EU institutions) represents about 5.8% of the total EU budget.
- In 2012, the European Commission froze its administrative expenditure due to the current economic and financial crisis.
- Within the 5.8% of administrative expenditure the Commission’s share is about 40% as compared to other EU institutions. Therefore, the overall evolution of administrative expenditure depends also on budgetary requirements from other EU institutions.

The European Commission launches public debate on corporate restructuring.

Mardi 17 janvier 2012

European Commission launches until March 30, a major campaign of public consultation and a Green Paper on the subject.

The aim is to identify successful practices and policies in the field of restructuring and adapting to change. The results will feed into the upcoming employment package and should help to improve further cooperation between workers and employers’ representatives, government, local and regional authorities and the EU institutions. The consultation will also help identify specific restructuring measures that could help deal with employment and social challenges, and help European companies improve competitiveness through innovation and a fast, but smooth adaptation to change.

Restructuring is part of business life and one of the important ways of helping a company stay competitive. The economic and financial crisis has put an extra strain on business: from 2002 to 2010, over 11,000 cases of restructuring were recorded by the European Restructuring Monitor, with a ratio of almost two jobs lost for every one created (1.8:1). Between 2008/2010, this ratio has increased to 2.5:1. Many companies and their workers have developed innovative arrangements to limit job losses. Here, social partners have played a key role. These initiatives have varied from working hours, to more social dialogue, to adjustment measures or the intervention of public employment services. However, these may be less effective in a context of persistently weak demand.

László Andor, EU Commissioner for Employment, Social Affairs and Inclusion presented the new Green Paper saying: ‘To be able to react better in the future, we have to understand the reasons behind the success of some measures in some countries, or sectors during the crisis. We have to look at how measures, like for example short-time work, can be used to deal with the challenges we are likely to face in the coming period”. He added “We also want to see how we can best anticipate the employment and skills needs of the future, especially in the light of new challenges and growing social inequalities across Member States. And last, but not least, we want to see how the social impact of restructuring can be limited.’

The Commissioner also stressed how the EU stands ready to help and support Member States through the cohesion policy in particular the European Social Fund as well as the European Globalisation Adjustment Fund.

Content of the Green Paper:
The Green Paper includes several questions. In particular, it addresses the following issues:

- Lessons from the crisis – are existing policy measures and practices adequate? What are the success factors and future challenges? How have short time working schemes functioned during the crisis and how have they coped with a persistently weak demand?
- Economic and industrial adjustment – what are the relevant framework conditions and existing good practices on access to finance, to accompany structural adjustment?
- Adaptability of business and employability of workers – an anticipative approach best? Is there a possible need to update existing guidelines on restructuring and the means to ensure their implementation?
- Creating synergies in the process of industrial change – how to improve the synergies between companies, local authorities and other local actors? How to develop training as a permanent feature of human resources management?
- Role of regional and local authorities – how to encourage a supporting role of public authorities taking into account different national traditions?
- Impact of restructuring operations - what can be done by companies and employees to minimise the employment and social impact of restructuring operations and what role can public policies play in facilitating these changes?

The Green Paper is supported by the staff working document “Restructuring in Europe 2011″ Restructuring in Europe 2011, which draws on the main lessons learned in recent years on anticipation and management of change and restructuring.

The consultation period will run until 30 March 2012. During this period, anyone with an interest in the subject can submit their views via email or by post.

Restructuring has been raised by the European Commission in its industrial policy flagship of October 2010, the flagship initiative ‘An Agenda for new skills and jobs’, as well as the Single Market Act. The Commission wishes to renew the debate on restructuring in the light of the lessons learned from recent experience.

The outcome of this consultation will feed into the upcoming employment package and the revived flexicurity agenda. It could lead to a renewed debate at EU level on a possible new framework for restructuring.

EIB Group Key Figures Strategy Structure Corporate Responsibility Partners Jobs Procurement FAQ Contact Pim Van Ballekom appointed as new EIB Vice-President

Lundi 16 janvier 2012

Pim Van Ballekom (55) has been appointed Vice-President and member of the Management Committee of the European Investment Bank (EIB) by the Bank’s Board of Governors, consisting of the 27 European Union Finance Ministers.

The appointment takes immediate effect. Van Ballekom is the first Dutch Vice-President since 2000 and the fourth Dutch Vice-President since the Bank was founded in 1958.

Until his appointment at the EIB Van Ballekom was Head of International Public Affairs at APG Pension Group. Prior to this he was Dutch member of the Board of Directors of the EIB and the European Bank for Reconstruction and Development (EBRD), Financial Counsellor and Head of the Financial Section at the Permanent Representation of the Netherlands to the EU, (Deputy) Head of Cabinet for Frits Bolkestein, European Commissioner for Internal Market, Taxation and Customs Union, and has had various positions within the Ministry of Finance.

The EIB is the European Union’s financing institution. Its purpose is to promote the EU’s objectives by providing long-term finance in support of viable investment projects. In the Netherlands, the EIB provides funding for amongst others large infrastructure projects and SME’s through local banks, and is prepared to support a broad range of projects, such as research and development.

The employment is created thanks to SMEs

Lundi 16 janvier 2012

Between 2002 and 2010, 85% of new jobs were created in SMEs.

This figure is considerably higher than the 67%-share of SMEs in total employment. During this period, net employment in the EU’s business economy rose substantially, by an average of 1.1 million new jobs each year. These are the main results of a study on the essential contribution of SMEs on job creation presented by the European Commission today.

With 1% annually, the employment growth for SMEs was higher than for large enterprises with 0.5%. A clear exception is the trade sector, in which employment in SMEs increased by 0.7% annually, compared to 2.2% in large enterprises. This is due to the strong increase of large trade enterprises, in particular in sales, maintenance and repair of motor vehicles.

Within the SME size-class, micro firms (less than 10 employees) are responsible with 58% for the highest proportion of total net employment growth in the business economy.

Secondly new firms (younger than five years) are responsible for an overwhelming majority of the new jobs. New enterprises operating in business services create more than a quarter (27%) of the new jobs, while the new firms in transport and communication contribute least (6%).

Main effects of the crisis: smaller enterprises report negative impacts more often
According to the results of the survey, the economic crisis has left its mark on enterprises from all size-classes, with micro firms being particularly vulnerable. As a result of the 2009/2010 economic crisis the number of jobs in the SME-sector has on average decreased by 2.4% annually, as against 0.95% annually in the large enterprises sector. Employment developments are still negative in 2010, but expectations for 2011 were improving at the time the survey was held. The share of firms that expected to lay off employees in 2011 was smaller than the share of firms that actually laid off employees in 2010.

Besides the employment effects, by far the most important negative effect of the crisis on firms is the overall decline of total demand for their products and services (mentioned by 62% of companies), followed by the increase in customer payment terms (mentioned by 48% of firms) and finally the shortage of working capital, which affected 31% of the respondents.

Innovativeness is a weapon against the crisis
Innovation seems to have a positive effect: innovative enterprises, as well as enterprises from more innovative countries, more often report employment growth and have higher employment growth rates.

The survey underlines that innovative SMEs or companies operating in more innovative economies suffered less from the economic crisis. For example, while the decline in overall demand is mentioned by 70% of enterprises in countries that are considered modest innovators2, the corresponding figure is 45% for countries which are innovation leaders.

Job quality in SMEs
The study distinguishes two broad dimensions of the job quality: employment quality and work quality. On average it is true that jobs in small enterprises are less productive, less remunerated, and less unionised than jobs in large enterprises. However, microenterprises report that they have a competitive advantage over their competitors as far as ’soft’ aspects of the human resource aspects of an enterprise are concerned: working climate, work-life balance, working-time arrangements.

The study is part of the SME Performance Review project and based on a survey of enterprises conducted at the end of 2010 and covering the 27 EU member states and 10 other countries participating in the Entrepreneurship and Innovation Programme, namely Albania, Croatia, the Former Yugoslav Republic of Macedonia, Iceland, Israel, Liechtenstein, Montenegro, Norway, Serbia, and Turkey.

Waste: factor of growth and deficit reduction

Vendredi 13 janvier 2012

According a study, compliance with European standards of waste would permit 72 million savings and the creation of 400,000 jobs.

Illegal waste operations in Member States are causing missed opportunities for economic growth, but stronger national inspections and better knowledge about waste management would bring major improvements.

Improved implementation leads to significant benefits
The study gives an in-depth analysis of the effects of better implementation and enforcement and shows that benefits would be significant. It analysed a number of case studies in Cyprus, Germany, Ireland, Italy and the Netherlands to demonstrate economic, financial and social benefits to Member States.

The EU’s waste management and recycling sector is very dynamic, but still offers economic opportunities with vast potential for expansion. In 2008, its €145 billion turnover represented around 1% of the EU’s GDP and 2 million jobs. Compliance with EU policy would help create a sector with 2.4 million jobs and a total annual turnover of €187 billion.

The underlying problem is that too many prices do not reflect the true cost of disposal of goods – if they did, this would help prevent waste in the first place. In addition, many Member States still lack adequate infrastructure for separate collection, recycling and recovery. An absence of systematic control and enforcement mechanisms is another hindrance, coupled with a lack of reliable data on waste management.

Four key conclusions
- The study concludes that we need to know more about waste. Better data and systematic monitoring of how the laws work in practice must be made available. There is progress here, with a specific Data Centre on Waste recently set up by Eurostat.
- Better use of the polluter pays principle, and wider use of economic instruments like raising the costs of disposal, could help ensure compliance and provide the necessary financial resources for waste management.
- Inspection and monitoring capabilities need to be strengthened in Member States. This could mean establishing an auditing capacity at EU level and, possibly, common inspection standards.
- One relatively cost-effective option to strengthen implementation monitoring at EU level could be to draw on the expertise and capabilities of the European Environment Agency (EEA). This option would carry lower administrative costs than creating a new agency dedicated to waste.

Next Steps
The study’s conclusions will be discussed and analysed by the Commission. They will serve as grounds for developing a balanced mix of legal and economic instruments as suggested in the Roadmap for a Resource Efficient Europe and the Thematic Strategy on Waste Prevention. These strategies encourage economic and legal incentives such as landfill taxes or bans, extending “producer responsibility” schemes and introducing “pay as you throw” schemes.

The EU’s economy uses 16 tonnes of materials per person per year, of which 6 tonnes becomes waste, half of it going to landfill. Many Member States rely mainly on landfill as the preferred waste management option. This situation persists in spite of existing EU waste legislation and is unsustainable.

The Commission’s Roadmap for Resource Efficiency sets out milestones for ensuring that waste is managed as a resource by 2020 including through the revision of prevention, re-use, recycling, recovery and landfill-diversion targets, and through the development of markets for secondary and recycled materials.

The European Parliament is working on economic governance and budgetary surveillance

Mercredi 11 janvier 2012

Work began this week and could threaten the democratic legitimacy of fiscal policy.

Towards the very end of 2011 the Commission presented two further pieces of legislation to complement the economic governance “six pack”, notably by increasing Commission powers to oversee Eurozone countries’ budgetary policies and tightening such surveillance one notch further for countries receiving bailout funds. Parliament shares decision-making power with the Council for both legislative texts.

This discussion comes as the working group tasked with preparing a first draft of an international agreement to strengthen economic governance in the EU starts work. Elmar Brok (EPP, DE), Roberto Gualtieri (S&D, IT) and Guy Verhofstadt (ALDE, BE), are members of the working group.

Normal legislation, not ad hoc treaties

Jean-Paul Gauzès (EPP, FR), rapporteur for the text on surveillance of “bailout countries” said the two proposals offered an opportunity to impose stronger economic governance without working outside the normal EU arrangements (the “Community method”). “Much of what is proposed in the international treaty can be done through the ’six pack’ and these two texts. We should integrate as much of the international treaty elements as possible into these two new texts”, he said.

This view, echoed by others, builds on the opinion already voiced by the three “drafting working group” MEPs that much in the planned international agreement can in fact be accomplished through normal EU legislation.

Danger of losing democratic legitimacy

Many MEPs also highlighted the danger of entrusting broad surveillance powers to the Commission without also addressing its accountability. “We need to always keep sight of democratic legitimacy when drafting these texts”, Elisa Ferreira (S&D, PT), the second rapporteur said.

Sven Giegold (Greens, DE), argued that if surveillance was to be increased, then the transparency with which the new powers were exercised also needed to be strengthened. “The legislation is useful in that it gives legality to an ongoing situation. However, I still have an issue with giving added surveillance powers to an institution which has already failed in this task”, he added.

Surveillance to promote growth, not just for austerity

The other weakness highlighted by various MEPs was that the proposed legislation was too closely focused on austerity, and not sufficiently on growth.

Ms Ferreira warned that “This proposed legislation and the international treaty risk reducing the focus of the six pack to one only based on imposing austerity”, adding that “it is important to make sure that the detailed monitoring now proposed will not hamper a country’s long term goals”.

Ramon Tremosa i Balcells (ALDE, ES) proposed that together with extra surveillance, cost benefit analyses should be carried out by the Commission to evaluate the usefulness of infrastructural investments, so as to ensure that spending went to projects with potential.

Various other MEPs aired the idea of cutting EU structural funds to excessive deficit countries, but without reaching a verdict on whether this might do more harm than good.

Next steps

The two draft reports amending the Commission proposals will be officially presented by the Economic and Monetary Affairs Committee draftspersons on 28 February.