COUNCIL OF THE EUROPEAN UNION,update

 

Press material Tuesday 6 February 2024

● Council of the EU   06/02/2024 09:57 | Press release | Gigabit infrastructure act: Council and Parliament strike a deal for faster deployment of high-speed networks in the EU   To accelerate the deployment of gigabit network infrastructure across Europe, the Council presidency and European Parliament’s negotiators reached a provisional agreement today on a proposal to replace the 2014 broadband cost-reducing directive (BCRD) by the gigabit infrastructure act (GIA). GIA is an essential piece of legislation to achieve Europe’s connectivity objectives and targets, as set out in the EU’s digital compass for this decade, and to deploy the next generation electronic communications networks in the EU. "In Europe, the roll-out of fibre and 5G could be a lot easier with less administration. We are tackling that administrative burden through the so-called Gigabit Infrastructure Act. We have struck a preliminary agreement with the European Parliament now. This would allow European citizens to surf faster using fibre or 5G." Petra de Sutter, Belgian deputy prime and minister of public enterprises, public administration, post and telecommunication "With the conclusion of the trilogue, Belgium demonstrates its firm commitment to fast and optimal internet access for all. By unifying the network across the whole territory, we are building bridges into a wider European ecosystem, demonstrating our interest in Europe-wide harmonisation. This initiative will not only promote fast connectivity for our fellow citizens, but also economies of scale for the operators and businesses involved." Mathieu Michel, Belgian Secretary of State for digitisation, administrative simplification, privacy protection and building regulation Main objectives of the new legislation The new law aims to lower the unnecessarily high costs of the electronic communication infrastructure deployment, partially caused by the permit-granting procedures before deploying or upgrading the networks. These procedures are still complex, sometimes lengthy, and different across member states. The regulation also aims to speed up the deployment of the networks, provide legal certainty and transparency for all economic actors involved, and provide for more efficient planning and deployment processes for operators of public electronic communications networks. This law of minimum harmonisation nature also addresses deployment and access to in-building physical infrastructure. It is expected to facilitate cross-border applications and to allow stakeholders, electronic communications operators, equipment manufacturers or civil engineering companies, to achieve better economies of scale. The co-legislators’ amendments The provisional agreement maintains the general thrust of the Commission proposal. However, the co-legislators amended parts of the proposal, mainly regarding the following aspects: a mandatory conciliation mechanism between public sector bodies and telecom operators was introduced as an intermediate step to facilitate the permit-granting procedure an exception for a transitional period for smaller municipalities was included, as well as specific provisions to promote connectivity in rural and remote areas the factors when calculating fair and reasonable conditions for access were clarified a specific provision to address the presence of intermediaries between landowners and infrastructure operators was introduced specific provisions were agreed on a voluntary ‘fibre-ready’ label for buildings several carve-outs for critical national infrastructure were included in the text. Finally, given that the current retail price for regulated intra-EU communications will expire on 14 May 2024, the provisional agreement provides for the continuation of consumer protection, especially for vulnerable users, by extending the price caps, which are €0,19 per minute for calls and €0,06 per SMS message at present. The provisional agreement ensures overall that member states have a wide autonomy in issuing stricter and more detailed rules on several important elements of this new regulation. The new law will apply 18 months after its entry into force with some specific provisions applying at a later stage. Next steps Following today’s provisional agreement, technical work by experts of both institutions will continue with a view to submitting a compromise text to the co-legislators for endorsement. From the Council side, the Belgian presidency aims to present the text to member states’ representatives (Coreper) for approval as soon as possible. Following its approval, the draft legislative act will be submitted to a legal/linguistic review before being formally adopted by both institutions, published in the EU’s Official Journal, and entering into force 20 days after this publication. Background information The broadband cost reduction directive (BCRD, 2014/61/EU), currently in force, aimed to facilitate the roll-out of high-speed electronic communications networks by lowering the costs of deployment with a set of harmonised measures. The digital targets, on which BCRD was based, have either been reached or become obsolete since 2014. For example, though the ratio of European households having access to a 30 Mbps internet network has risen from 58,1% in 2013 to 90,1% in 2021, this speed is not any more future proof, given the increased need of businesses and citizens to access networks with much higher capacity. Beside the advances in the digital technologies since 2014, other factors have made the revision of the BCRD necessary as well. Low returns on equity and high investment costs that prevail in the telecom industry have started to derail the progress to reach the 2030 digital targets laid down in the Digital Decade Policy Programme. The Commission estimates that the investment gap between the present level and what would be necessary to reach these connectivity targets, is around EUR 65 billion annually. On 23 February 2023, the Commission submitted a proposal on measures to reduce the cost of deploying gigabit electronic communications networks and repealing Directive 2014/61/EU (gigabit infrastructure act). On 3 June 2023, the Telecommunications Council took note of a progress report and on 5 December 2023, reached a general approach on this file. Gigabit infrastructure act: Council adopts position for faster deployment of high-speed networks in the EU (press release, 5 December 2023) Gigabit infrastructure act, Council’s progress report, 3 June 2023 Gigabit infrastructure act, Commission proposal, 23 February 2023 Broadband cost reduction directive (BCRD), 23 May 2014

Press material Tuesday 6 February 2024

● Council of the EU   06/02/2024 00:40 | Press release | Ukraine Facility: Council and Parliament agree on new support mechanism for Ukraine   Today, the Council and Parliament reached a provisional agreement on setting up a new single dedicated instrument to support Ukraine's recovery, reconstruction and modernisation, while supporting its efforts to carry out reforms as part of its accession path to the EU. The Ukraine Facility will have a total budget of €50 billion. The Ukraine Facility will pool the EU’s budget support to Ukraine into one single instrument, providing coherent, predictable and flexible support for the period 2024-2027 to Ukraine, adapted to the unprecedented challenges of supporting a country at war. "The EU is prepared to support Ukraine as long as needed. The Ukraine Facility will allow us to channel consistent and predictable support to Ukraine to help its people rebuild their country in the midst of the unprecedented challenges brought by Russia’s war of aggression. At the same time the support will help Ukraine take forward the reforms and modernisation efforts needed for it to advance on its path towards future EU membership." Vincent van Peteghem, Belgian Minister of Finance A structure in three pillars The Ukraine Facility will be structured in three pillars: pillar I: The government of Ukraine will prepare a 'Ukraine Plan', setting out its intentions for the recovery, reconstruction and modernisation of the country and the reforms it plans to undertake as part of its EU accession process. Financial support in the form of grants and loans to the state of Ukraine would be provided based on the implementation of the Ukraine Plan, which will be underpinned by a set of conditions and a timeline for disbursements pillar II: Under the Ukraine investment Framework, the EU will provide support in the form of budgetary guarantees and a blend of grants and loans from public and private institutions. A Ukraine Guarantee would cover the risks of loans, guarantees, capital market instruments and other forms of funding supporting the objectives of the Facility pillar III: Union accession assistance and other supporting measures helping Ukraine align with EU laws and carrying out structural reforms on its path to future EU membership Financing aspects The total budget of €50 billion for the Ukraine Facility will be split between €33 billion in loans in €17 billion in grants. Grants will be mobilised through a new special instrument, proposed in the context of the Multiannual Financial Framework (MFF) mid-term review. The loans will be guaranteed through the own resources headroom, similar to the current financing under the Macro Financial Assistance 'Plus' (MFA+). Ukraine may request, as part of the Ukraine Plan, a pre-financing payment of an amount of up to 7% of Facility. A significant share of the investment part of the Ukraine Plan and the Ukraine investment Framework will be earmarked for green investments and a part in the Ukraine investment Framework will be reserved for SMEs. The Plan will also be geared towards supporting national authorities. The text provides for possible bridge financing in order to make sure that funds reach Ukraine as soon as possible. There will be some flexibility regarding in the budget management given that Ukraine is a country at war. A precondition for the support to Ukraine under the Facility will be that Ukraine continues to uphold and respect effective democratic mechanisms, including a multi-party parliamentary system, and the rule of law, and to guarantee respect for human rights, including the rights of persons belonging to minorities. Furthermore, the regulation will ensure that the Ukrainian Parliament and civil society organisations in Ukraine are duly informed and consulted on the design and implementation of the Ukraine Plan. A Ukraine Facility Dialogue will give the opportunity for the European Parliament to invite the Commission to discuss at least every four months the implementation of the Plan. In order to evaluate the implementation of the plan, the regulation will include a scoreboard that will help to easily monitor progress of various qualitative and quantitative steps, including an overview of the social, economic and environmental elements in the Ukraine Plan. Next steps Building on the success of this provisional agreement, negotiators will now continue working on the broader revision of the multiannual financial framework (MFF) 2021-2027, which the Ukraine Facility and the Strategic Technologies for Europe Platform (STEP) are part of, in view of reaching an agreement as swiftly as possible. The provisional agreement is subject to approval by the Council and Parliament before the text can go through the formal adoption procedure. Once adopted it will be published in the EU’s Official Journal and enter into force on the next day. The regulation will apply immediately after entry into force. Background On 20 June 2023, the Commission adopted a proposal for the revision of the multiannual financial framework (MFF) 2021-2027, together with two proposals for regulations setting up a Ukraine Facility and a Strategic Technologies for Europe Platform (STEP). Council’s partial negotiating mandate on the Ukraine Facility The EU long-term budget (background information) EU solidarity with Ukraine (background information)

Press material Monday 5 February 2024

● Council of the EU   05/02/2024 22:35 | Press release | Environmental, social and governance (ESG) ratings: Council and Parliament reach agreement   The Council and European Parliament today reached a provisional agreement on a proposal for a regulation on environmental, social and governance (ESG) rating activities, which aims to boost investor confidence in sustainable products. ESG ratings provide an opinion on a company’s or a financial instrument’s sustainability profile, by assessing its exposure to sustainability risks and its impact on society and the environment. ESG ratings have an increasingly important impact on the operation of capital markets and on investor trust in sustainable products. "I welcome this agreement. Increasing investor confidence through transparent and regulated ESG ratings can have a significant impact on our transition to a more socially responsible and sustainable future." Vincent Van Peteghem, Belgian Minister of Finance The new rules aim to strengthen the reliability and comparability of ESG ratings by improving the transparency and integrity of the operations of ESG ratings providers and preventing potential conflicts of interests. Under the new rules, ESG rating providers will need to be authorised and supervised by the European Securities and Markets Authority (ESMA) and comply with transparency requirements, in particular with regard to their methodology and sources of information. Main elements of the provisional agreement The Council and the Parliament clarified the circumstances under which ESG ratings fall under the scope of the regulation, providing further details on the applicable exclusions. The agreement also clarifies the territorial scope of the regulation, by setting out what constitutes operating in the EU. The Council and Parliament agreed that if financial market participants or financial advisers disclose ESG ratings as part of their marketing communications, they will include information about the methodologies used in such ESG ratings on their website. This was done through an amendment of the Sustainable Finance Disclosure Regulation. The agreement clarifies that ESG ratings encompass environmental, social and human rights or governance factors. The agreement foresees the possibility to provide separate E, S and G ratings. However, if a single rating is provided, the weighting of the E, S and G factors should be explicit. ESG rating providers established in the EU will need to obtain an authorisation from ESMA. ESG rating providers established outside the EU that wish to operate in the EU will need to obtain an endorsement of their ESG ratings by an EU authorised ESG rating provider, a recognition based on a quantitative criterion or be included in the EU registry of ESG rating providers on the basis of an equivalence decision in relation to the country of its origin and following a dialogue held between ESMA and the relevant third-country competent authority. The Council and Parliament introduced a lighter, temporary and optional registration regime of three years for small undertakings and groups providing ESG ratings. Small ESG rating providers who opt in under the lighter regime will be exempted of paying ESMA supervisory fees. They will have to comply with some general organisational and governance principles, as well as transparency requirements vis-à-vis the public and users. They will also be subject to the powers of ESMA to request information and conduct investigations and on-site inspections. Upon exiting this temporary regime, small ESG rating providers will need to comply with all the provisions outlined in the regulation, including the requirements regarding governance and supervisory fees. For small ESG ratings providers, the agreement also provides that if the conditions are met, ESMA could decide to exempt an ESG rating provider from some of the requirements but only in duly justified cases and based on the nature, scale and complexity of the business of the ESG rating provider and the nature and range of the issuance of ESG ratings. The agreement introduces as a principle a separation of business and activities, with a possibility for ESG ratings providers not to set up a separate legal entity for certain activities, provided that there is a clear separation between activities and that they put in place measures to avoid potential conflicts of interests. However, this derogation would not apply to ESG rating providers that carry out consulting activities, audit activities and credit rating activities. ESG rating providers may nevertheless develop benchmarks if ESMA considers that sufficient measures have been put in place to address conflicts of interests. Next steps The provisional political agreement is subject to approval by the Council and the Parliament before going through the formal adoption procedure. The regulation will start applying 18 months after its entry into force. Background On 13 June 2023, the Commission presented a proposal for a regulation on ESG rating activities. The proposed rules concern the following: authorisation and supervision by ESMA of third-party providers of ESG ratings and scores separation of business for the prevention and management of conflicts of interests proportionate and principle-based organisational requirements, minimum transparency requirements to the public on ratings methodologies and objectives and more granular information to subscribers and rated companies transparency of fees and requirements for fees to be fair, reasonable and non-discriminatory possibility for third-country providers to operate on EU market if equivalence, endorsement or recognition Council’s negotiating mandate Commission proposal on ESG rating activities Capital Markets Union (background information)