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Many, mainly small to mid-sized EU countries, are sceptical of the Single Market Emergency Instrument (SMEI) meant to help the bloc secure essential supply chains in times of crises.
The instrument was proposed in September, so many member states have yet to formulate a definite position. However, multiple EU sources confirmed to EURACTIV that up to 20 member states were sceptical of the European Commission’s proposal.
Already at the end of September, a lot of EU member state ministers had voiced concerns in their initial reactions, worrying that the Commission may have overreached in its ambition and that a crisis was difficult to define.
A recent position paper by Luxembourg, seen by EURACTIV, harshly criticised the Commission’s proposal, putting into question its relevance, its added value, and even the legal basis for the regulation.
“The provisions of the proposal seem to explicitly authorise – and even invite – the member states to introduce Single Market barriers during times of crisis,” the Luxembourgish position paper said.
“Its provisions would flaw the fundamental freedoms of the [EU] Treaty by adding additional derogations,” the paper added.
This casts doubt on the Commission’s central argument, which claimed that the purpose of the regulation was exactly the opposite, namely to ensure a functioning Single Market even during emergencies.
Not all member states were as harsh as Luxembourg in their evaluation, however. Some governments agree with the idea behind the SMEI but worry about the administrative burden it could impose on businesses.
“We absolutely support the direction of the concept,” the Irish minister of state for trade promotion, Dara Calleary, said in a meeting with journalists last week.
“But as in any negotiation at the EU level, we will have input into that discussion reflecting the interests of an open economy and small country like ourselves,” he added.
More specifically, the Irish department of enterprise, trade and employment told EURACTIV: “While seeking to ensure the Single Market functions well during a crisis, we must be wary of unintended consequences that may damage the competitiveness of the Market.”
Discussions among member states are still at the very beginning. Over the coming months, the instrument that many see as a brainchild of large member states like France, can expect a lot of criticism from small EU countries, afraid of new trade barriers.
Next week, member state negotiators will sit down to discuss the legal basis of the regulation.
How much does the EU value education? Around 5%, apparently. On average, one-twentieth of the EU’s economic output is invested in education. And this figure has been remarkably steady over time. In 1995, the EU average was at 4.9% of GDP and since then, the figure moved between 4.7% and 5.1% of GDP.
In the meantime, however, the importance of education has only increased if there is any truth to the chatter about the knowledge-based economy.
Companies are calling for more coding and engineering skills and every politician likes to wax on about the importance of education. However, EU member states do not seem to be putting the money where their mouth is.
Comparing the different member states and the types of education spending, as the chart below does, some more observations can be made.
For example, Nordic countries are among the biggest spenders on education, especially Iceland and Sweden, mainly driven by a big amount of money going towards pre-primary and primary education.
Ireland, on the other hand, looks like the lowest spender, but part of the picture might be exaggerated as the Irish GDP is highly distorted due to its unusually high level of foreign investments. It is also notable that countries that were repeatedly forced by EU rules to cut down government expenditure like Italy, Greece, and Spain can be found at the rear end of the distribution regarding education spending.
Finally, a piece of half-serious advice in case you were planning to have a child and were wondering which country values education most: Move to Sweden for the first years of its life, on to Belgium for its secondary education, and then let it study in Finland.
EU Auditors criticise Commission for failing at gender mainstreaming of EU budget. In a report about how the European Commission integrates its horizontal policy priorities (climate and biodiversity, sustainable development goals (SDGs), gender equality, digital transformation) into its spending programmes, the European Court of Auditors found that the Commission largely fails to integrate gender equality and the SDGs in its most important spending programmes. Already a year earlier, the EU’s audit body criticised the Commission for not including gender analysis or gender-specific objectives in its spending programmes. The climate and biodiversity objectives, however, seem to be better integrated into the Commission’s programme.
Parliament adopts directive against distortive foreign subsidies. On 10 November, EU lawmakers adopted new rules to ensure foreign subsidies granted by non-EU countries do not distort the internal market. The aim of the regulation is to ensure fair competition between firms operating in the EU. Under the new regulation, the EU Commission will be able to investigate and apply redressing measures if foreign subsidies are found to be distortive. The Council is expected to adopt the directive on 28 November.
Inflation to peak at end of year, according to EU Commission. According to the Commission’s Autumn Economic Forecast published on Friday (11 November), annual inflation is projected at 9.3% in the EU and 8.5% in the euro area at the end of 2022, while it is expected to decline to 7% and 6.1% respectively in 2023. Growth is also set to contract at the end of the year mainly due to high energy prices and lower households’ purchasing power, pushing many EU countries into recession.
MEPs urge Commission to revise MFF as soon as possible. The current long-term budget has already been “pushed to its limits” two years after its adoption, according to MEPs from the committee on budgets, due to the war in Ukraine and other crises. In a resolution adopted on Thursday (17 November), MEPs called for a revision of the budget, with more flexibility and new funding, and a common crisis instrument. The Commission is expected to present a review of the EU budget in the second quarter of 2023.
Hungary’s remedial measures to unblock EU funds not adequate, MEPs say. EU lawmakers called on the Commission to “keep the [conditionality mechanism] proposal on the table” ahead of the evaluation of Hungary’s proposed measures to address rule of law concerns in the country expected next week. The Commission proposed to freeze €7.5 billion of EU funds back in September due to corruption and public procurement concerns. While Hungary is “going in the right direction”, the 17 remedial measures proposed by Hungary would not “erase completely the risks affecting the European budget,” the MEPs rapporteurs for the conditionality mechanism said on Thursday (17 November).
Hunt to present bill for Truss government’s economic experiment. Chaos caused by former chancellor Kwasi Kwarteng’s short-lived mini-budget featuring £40 billion worth of tax cuts and spending increases has damaged the UK’s reputation, Bank of England Governor Andrew Bailey told MPs on Wednesday, with new Chancellor Jeremy Hunt expected to announce a series of major tax increases alongside spending cuts. Read more.
Ireland moves to reign in gambling industry. Widespread bans will be introduced on gambling advertisements, with violations incurring possible prison sentences, following new legislation approved by the Irish government on Tuesday. Read more.
Dialogue needed on gender pay gap says Dutch social affairs minister. More dialogue is required in order to discuss the inequality between men and women in the labour force, Social Affairs and Employment Minister Karien van Gennip wrote in a letter to the House of Representatives. Read more.
Fearing crisis, Croatian employers urge government to scrap new tax plans. Croatia’s employers’ association, HUP, has urged the government to scrap plans for a windfall tax, saying that an economic crisis and recession are already looming, judging by signals from other markets. Read more.
Belgium to have largest budget deficit in eurozone, says EC. According to the European Commission, Belgium will have the largest budget deficit in the eurozone over the next two years. Read more.
Spain requests third tranche of Recovery and Resilience Facility. The government formally requested a third disbursement of the Recovery and Resilience Facility, worth €6 billion, making Spain the first member state to do so. Read more.
Spain to maintain tax on energy companies and banks despite ECB warning. The Spanish government will not modify the structure of the future taxes on large energy companies and banks despite the European Central Bank (ECB) warning that this could distort EU competition. Read more.
Against “polycrisis”: Economist and blogger Noah Smith lays out his argument for why he thinks the world is not in a “polycrisis”, as many commentators call the current situation. Instead of a set of mutually reinforcing crises, Smith thinks that the societal reaction to one crisis can often help tackle another one as well.
Inflation Explorer: Journalist Simon Schmid has programmed a dashboard that allows you to graphically explore how a variety of different products contribute to inflation and how they compare across European countries.
Give your ideas some legs: The positive effect of walking on creative thinking: Out of ideas? Go take a walk! In a series of experiments, Stanford researchers Marily Oppezzo and Daniel L. Schwarty found that people are more creative after a walk. This even works when done indoors on a treadmill, although outside walks seem to give a bigger creativity boost.
Consumers should not foot the bill for bad financial advice: In this opinion piece for EURACTIV, Monique Goyens of the European Consumer Organisation BEUC argues that the EU Commission should ban sales commissions that financial advisers receive when they sell financial products as this distorts incentives and leaves retail investors worse off.
Boric is trapped on trade: Writing for FP, Patricia Garip explains the Chilean president Gabriel Boric’s dilemma on trade. Signing trade agreements could provide the resource-rich country with a lot of income that could also be used for redistributive purposes, but as a former activist from the political left, he would snub his political base by doing so.
Luca Bertuzzi, Silvia Ellena and Jonathan Packroff contributed to the reporting.
[Edited by Zoran Radosavljevic]
