COUNCIL OF THE EUROPEAN UNION,update

 

Press material Monday, 13 May 2024

● Council of the EU   13/05/2024 14:31 | Press release | Macroeconomic dialogue with the social partners on 13 May 2024   The Council presidency, the European Central Bank and the European Commission met European social partners today to discuss recent developments of the economic situation, as well as a thematic topic chosen by the presidency: “strengthening the economic base: challenges and opportunities. European households and businesses have faced various economic challenges over the last couple of years, deteriorating European competitiveness and increasing the gap with major global players. It’s clear that urgent action is needed, where we focus on sustainable solutions to build a resilient and competitive economy for the future. A competitive single market is, after all, the pride of our Union. We need to ensure its successfulness by deepening its function both in theory and in practice. This will require our political courage, with tackling the productivity growth gap at the heart of its action. The Macroeconomic Dialogue at the political level has laid a fruitful foundation for the work ahead. For the next legislature it will be crucial to prioritise measures that enhance productivity across industries, starting with skills and knowledge sharing to bridge the knowledge gap. By fostering innovation, investing in skills development, improving our market attractiveness, facilitating green and digital transition in both public and private sectors, the EU can reposition itself as a global leader. Vincent Van Peteghem, Deputy Prime Minister and Minister of Finance of Belgium, which currently holds the presidency of the Council While economic growth is set to improve this year and next, our future growth is limited by labour and skills shortages as well as subdued investment. This highlights the importance of working together to boost the EU’s competitiveness and resilience, and of promoting innovation and industry. While the single market is one of Europe’s greatest achievements, it remains fragmented as a result of diverse tax rules, different regulatory and supervisory approaches, and insufficient spending on common priorities. For example: if Europe is to create and retain innovation, we must make access to risk capital as easy as it is in the United States. The next steps to take for deepening the single market will be complex and require political courage. They also need to be fair for all Member States, regions and workers. We have done a lot over the past years to secure the EU’s continued prosperity, but there is still work to do. The report by Enrico Letta, as well as the forthcoming one from Mario Draghi, bring a sense of urgency as well as specific proposals to build on. They set the scene for the next institutional mandate, so that we can look forward to the next five years with renewed ambition and working closely with social partners. Valdis Dombrovskis, Executive Vice-President, European Commission The macroeconomic dialogue discussion today was most useful and timely. Ministers are already fully engaged in planning for budgets for 2025 so it was great to have the opportunity to hear directly from the social partners. The euro area economy has been resilient despite multiple challenges. In particular, the labour market has been a real source of strength so it was opportune to hear the perspectives from both employee groups and employers. We have made huge progress in bringing down inflation and there are good prospects for growth picking-up in the second half of the year but we also need to bring borrowing levels down further. The special focus on competitiveness and ways to bridge the knowledge gap is particularly welcome and timely as the Eurogroup is also actively engaged in looking at these issues as part of its work on euro area competitiveness. Paschal Donohoe, President of the Eurogroup Shaping our economic and monetary policy to deliver quality jobs requires decisive action to channel and mobilise investment. To address the defining challenges of our time, the EU must equip itself with a permanent investment instrument that measures up. Working people are facing a social justice emergency in which their real incomes have fallen while corporate profits have soared. To restore trust in the European project, our institutions must tax excess wealth and windfall profits. There can also be no more blank cheques to corporations and strong social conditionality is needed to make sure every cent of public money is leveraged to maintain and create quality jobs. Esther Lynch, General Secretary of the European Trade Union Confederation (ETUC) 2023 was the seventh time in the last ten years that US growth has exceeded that in the EU. Strengthening Europe’s competitiveness must be at the forefront of the next political cycle, with a reboot of European policies vital to tackling structural weaknesses. Only through strengthening its economy and improving its attractiveness as an investment location will the EU be able to play a strong role in a changing world and to achieve its environmental and social goals in the coming years. Markus J. Beyrer, Director General of BusinessEurope European productivity growth has remained subdued, and, since the sovereign debt crisis, public investment has been weaker compared with the US. To address our competitiveness and productivity gap, the Single Market must respond to labour and skills shortages in all enterprises of services of general interest, which currently prevent them from fully engaging in their transformation and modernisation. We need to ensure that future legislation supports SGIs and provides clear instructions and guidance to help them understand new regulatory requirements, making it easier for them to operate within the Single Market. Public investment plays a pivotal role in our quest to improve productivity gains. It's crucial that the new economic governance lives up to its promise of balancing debt sustainability, investments, and structural reforms. We urge member states to ensure they include well-designed and well-planned public investments in their medium-term fiscal structural plans to address, despite the pressure of higher interest rates, the consequences of demographic ageing in Europe. Valeria Ronzitti, General Secretary of SGI Europe The latest SME barometer provides a quite negative outlook for small companies. Investments are still mainly on hold due to high interest rates, and increasing wages create a further pressure on profitability in the labour-intensive sectors. Next to these direct cost factors, SMEs face stagnating productivity due to administrative and regulatory demands and ineffective public administration. To incentivise investments in R&D and skills development, SMEs need time for training and innovating by reducing administrative and reporting burdens. Moreover, sufficient programs to support innovation must be offered at national and regional level. Finally, SMEs must have better access to finance for riskier projects and their green investments. Véronique Willems, SMEunited Secretary General An outstanding question of strengthening our economies and ensuring their sustainability is to tackle the EU-wide phenomenon of ageing population. It is evident that an urgent policy intervention is needed to realign current demographic trends. Accordingly, addressing demographic challenges is one of the priorities of the Hungarian presidency also with a view to strengthen the productivity and the competitiveness of the European Union. Gábor Szőcs, Deputy State Secretary for Macroeconomic and European Affairs of Hungary - (incoming Hungarian presidency of the Council: July-December 2024) Security will be an overarching theme of the 2025 Polish presidency. This means not only financing of the EU strengthened defence capabilities, but also the completion of the EU single market that constitutes the foundation of our economic security and long-term competitiveness. Andrzej Domański, Minister of Finance of Poland - (future Polish presidency of the Council: January-June 2025) The next macroeconomic dialogue will be organised under the Hungarian presidency of the Council.

Meetings Monday, 13 May 2024

● Council of the EU   13/05/2024 10:43 | Meetings | Economic and Financial Affairs Council, 14 May 2024   Background brief - Economic and Financial Affairs Council, 13 May 2024

Press material Monday, 13 May 2024

● Council of the EU   13/05/2024 10:23 | Press release | Heavy-duty vehicles: Council signs off on stricter CO2 emission standards   The Council today formally adopted the regulation on CO2 emission standards for heavy-duty vehicles, amending and strengthening the existing EU rules. The updated rules will further reduce CO2 emissions from road transport and will introduce new targets for 2030, 2035 and 2040.  More robust standards for CO2 emissions will help increase the share of zero-emission vehicles in the heavy-duty vehicle fleet across the EU, while ensuring that innovation in and the competitiveness of the sector are preserved and enhanced. Broader scope Under the revised rules, the scope of the existing regulation will be expanded to make almost all new heavy-duty vehicles with certified CO2 emissions – including smaller trucks, urban buses, coaches and trailers – subject to emission reduction targets. New emission reduction targets The new rules maintain the existing 2025 target currently set at a 15% emissions reduction for heavy lorries weighing over 16t. In line with the EU’s climate objectives for 2030 and beyond, the regulation further establishes the following new targets: a 45% emissions reduction from 2030 (increased from 30%) a 65% emissions reduction from 2035 a 90% emissions reduction from 2040 These targets will apply to medium lorries, heavy trucks weighing over 7.5t and coaches, as well as to corresponding vocational vehicles from 2035 onwards. Zero-emission target for urban buses The new rules introduce a 100% zero-emission target for new urban buses by 2035, with an intermediate target of 90% for this category by 2030. Inter-urban buses will be exempt from this target, as they will be regarded as coaches for the purposes of measuring emissions reduction. Next steps The regulation will now be signed and published in the Official Journal of the EU. It will enter into force 20 days after its publication. The effectiveness and impact of the amended regulation will be reviewed by the Commission in 2027.  Among other things, the Commission will also have to evaluate the possibility of developing a common methodology for the assessment and reporting of the full lifecycle CO2 emissions of new heavy-duty vehicles. Background The heavy-duty vehicle sector is responsible for over 25% of greenhouse gas emissions from road transport in the EU. CO2 emission standards for certain heavy-duty vehicles were set for the first time in 2019, with targets for 2025 to 2029 and for 2030 onwards, with provision for a review of the regulation by 2022. On 14 February 2023, the Commission submitted a proposal for a revision of the CO2 emission standards for heavy-duty vehicles. This revision is an integral part of the Fit for 55 legislative package. The updated rules contribute to the EU’s aim of reducing its net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, and to achieve climate neutrality by 2050. Regulation on strengthening CO2 emission standards for heavy-duty vehicles Voting results Heavy-duty vehicles: Council and Parliament reach a deal to lower CO2 emissions from trucks, buses and trailers (press release, 18 January 2024) Clean and sustainable mobility (background information)

Press material Monday, 13 May 2024

● Council of the EU   13/05/2024 15:01 | Press release | Ukraine and Moldova: Council approves the renewal of EU’s autonomous trade measures   The Council approved today the suspension of import duties and quotas on Ukrainian and Moldovan exports to the EU for another year. This renewal reaffirms the EU’s unwavering political and economic support for Ukraine, after two years of Russia’s unprovoked and unjustified military aggression, and at the same time reinforces the protection of EU farmers as regards certain sensitive agricultural products. Ukraine The EU’s autonomous trade measures for Ukraine will apply from 6 June 2024 until 5 June 2025 and concern the continued suspension of all outstanding customs duties and quotas under Title IV of the EU-Ukraine Association Agreement (DCFTA). The Regulation will also include two safeguard mechanisms to protect the EU market: a strengthened version of the existing safeguard mechanism, which will apply on the basis of regular monitoring, allowing the Commission to impose any measure provided that specific conditions are met; a new, automatic safeguard mechanism which will oblige the Commission to reintroduce quotas if imports of poultry, eggs, sugar, oats, maize, groats and honey exceed the arithmetic mean of quantities imported in the second half of 2021, in 2022 and in 2023. Moldova The EU’s autonomous trade measures for Moldova will apply from 25 July 2024 to 24 July 2025. They take the form of a temporary suspension of all outstanding customs duties and quotas under Title V of the Association Agreement. They also reinforce the protection for sensitive agricultural products, by beefing up the safeguard mechanism already included in the current Regulation.  Background On 31 January 2024, the European Commission proposed to extend the suspension of import duties and quotas on all imports from Ukraine and Moldova to the EU for another year. The proposal was presented in the context of Russia’s continuing war of aggression against Ukraine and the consequent ongoing impact on Moldova, the resulting need to continue to support Ukraine and Moldova economically, and considering that Ukraine and Moldova were granted EU candidate status in June 2022 and accession negotiations were opened in December 2023. Regulation on temporary trade-liberalisation measures - Ukraine (agreed at first reading) Ukraine: Council and Parliament reach a deal to renew EU’s autonomous trade measures (press release, 20 March 2024) Ukraine: Council adopts renewal of temporary trade liberalisation and other trade concessions (press release, 25 May 2023) EU response to Russia's invasion of Ukraine (background information) EU-Ukraine Deep and Comprehensive Free Trade Area, European Commission Regulation on temporary trade-liberalisation measures - Moldova (agreed at first reading)