‘KEY FACTS ABOUT THE EUROPEAN UNION AND BISCAY IN 2013’
ANNUAL REPORT_english version_December 2013
KEY FACTS about the EU and Biscay in 2013:
On 1 July 2013, Croatia became the 28th EU member State
The Multiannual Financial Framework 2014-2020 was approved: first budget cut in the EU history
The Spanish banks bailout with funds from the European Stability Mechanism (ESM) finalizes: 41.3 billion euro
The EU Economic Governance progresses with the ‘Two-Pack’: surveillance on National Budgets in the Eurozone for 2014
The future European Banking Union: agreements on the Single Mechanisms of Supervision and Resolution
The ECB reduces the interest rates to historic minimums (0.25%)
Historic sanction (1.712 billion euro) to financial entities for manipulation of reference rates and distortion of free competition
Legislative proposals to strengthen the protection of mortgage debtors and air passengers
The ‘European Professional Card’, key initiative to improve the mobility of European qualified professionals
European recognitions to entities in Biscay: Biscaytik, Achucarro Center of Neuroscience and Getxo
EU Cofinance to High Speed Train in Biscay
KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
I. PROGRESSES IN THE EUROPEAN PROJECT ...... 1
I. 1. CROATIA, NEW EU MEMBER STATE AND LATVIA, NEW STATE IN THE MONETARY UNION IN 2014 ...... 1 I. 2. ANNUAL REPORT ON FUTURE EU ENLARGEMENTS ...... 6 I. 3. APPROVAL OF THE MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020 ...... 8 I. 4. EUROZONE CRISIS: CYPRUS RESCUE AND CONCLUSION OF THE ASSISTANCE PROGRAMMES FOR SPAIN AND IRELAND ...... 11 I. 5. ECONOMIC GOVERNANCE – ‘2013 EUROPEAN SEMESTER’: ‘IN-DEPTH REVIEWS’ AND ‘COUNTRY SPECIFIC RECOMMENDATIONS’, AND NEW ‘2014 EUROPEAN SEMESTER’ ...... 14 I.6. ECONOMIC GOVERNANCE – ‘TWO-PACK’: EXAMINATION OF 2014 NATIONAL BUDGETS ... 18
II. GENERAL AFFAIRS ON ECONOMIC ISSUES ...... 21
II.1. COHESION AMONG EUROPEAN REGIONS - RANKING GDP per capita ...... 21 II.2. ECB: REDUCTIONS ON THE INTEREST RATES TO EASE CREDIT ...... 26 II.3. BANKING UNION: ADVANCES IN THE SINGLE SUPERVISORY AND RESOLUTION MECHANISMS ...... 27 II.4. FINANCIAL MARKETS: PROPOSAL OF DIRECTIVE ABOUT A FINANCIAL TRANSACTION TAX ...... 29 II.5. BANKS: NEW DIRECTIVE ON BANKERS’ BONUSES AND HIGHER REQUIREMENT OF QUALITY CAPITAL ...... 31 II.6. COMPETITION: SANCTIONS FOR ILLEGAL BEHAVIOURS TO MICROSOFT AND BANKS ..... 32 II.7. INVESTIGATION OF ILLEGAL STATE AIDS: FORD, TDT OPERATORS AND TAX SCHEME FOR ACQUISITION OF SHARES IN FOREIGN COMPANIES ...... 34 II.8. INVESTIGATION ON THE CONCESSIONS OF REGULAR LINES OF BUSES IN SPAIN ...... 36
III. GENERAL AFFAIRS AFFECTING THE CITIZENS ...... 37
III.1. EUROPEAN YEAR OF CITIZENS - 2013 ...... 37 III.2. EUROPEAN ROAD SAFETY DAY, DEDICATED TO REDUCING PEDESTRIAN FATALITIES IN URBAN AREAS ...... 39 III.3. PROPOSAL OF DIRECTIVE TO PROTECT MORTGAGE DEBTORS AND SENTENCE OF THE COURT OF JUSTICES AGAINST THE SPANISH MORTGAGE LAW ...... 40
KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
III.4. INITIATIVE TO REINFORCE THE COOPERATION BETWEEN THE EUROPEAN PUBLIC EMPLOYMENT SERVICES ...... 42 III.5. REGULATORY PROPOSAL TO STRENGTHEN EUROPEAN AIR PASSANGERS’ RIGHTS .... 43 III.6. NEW LEGAL PROPOSAL ABOUT TOBACCO: MORE PROTECTION OF PUBLIC HEALTH ..... 45 III.7. THE EUROPEAN PROFESSIONAL CARD ...... 46 III.8. EUROPEAN INITIATIVE TO UPGRADE KEY SEAPORTS ...... 47 III.9. MUTUAL RECOGNITION OF PROTECTION MEASURES IN CIVIL MATTERS: STRENGTHENING THE PROTECTION OF VICTIMS OF VIOLENCE ...... 49
IV. BISCAY AND THE EUROPEAN UNION IN 2013 ...... 50
IV.1. SCHOLARSHIPS OF THE DIPUTACIÓN FORAL DE BIZKAIA TO TAKE EUROPEAN STUDIES ...... 50 IV.2. ‘EUROPEAN CITIZEN AWARD 2013’ FOR MORTGAGE AFFECTED PEOPLE PLATFORM AND EUSKALTZAINDIA ...... 52 IV.3. EUROPEAN RECOGNITIONS: BISCAYTIK, ACHUCARRO BASQUE CENTRE FOR NEUROSCIENCE AND GETXO ...... 53 IV.4. EIB: LOAN FOR THE BASQUE GOVERNMENT AND IBERDROLA ...... 55 IV.5. EUROPEAN COMMISSION: DECISION ON THE TAX BENEFITS TO THE SPANISH SHIPYARDS ...... 56 IV.6. BASQUE TAX HOLIDAYS: COMPLIANCE WITH THE REPAYMENT OF THE AIDS...... 59 IV.7. FISHING LIMITS FOR ANCHOVY IN THE BAY OF BISCAY FOR THE 2013/14 FISHING SEASON ...... 61 IV.8. EUROPEAN COFINANCE OF THE HIGH SPEED TRAIN IN BISCAY ...... 62 IV.9. THE EUROPEAN COMMISSION REQUIRES SPAIN TO AMMEND INHERITANCE AND GIFT TAX RULES IN ALAVA AND BISCAY ...... 63
KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
I. PROGRESSES IN THE EUROPEAN PROJECT
I. 1. CROATIA, NEW EU MEMBER STATE AND LATVIA, NEW STATE IN THE MONETARY UNION IN 2014
The Union reached its current size of 28 member countries with the accession of a new one on 1 July 2013. Croatia is, since then, the 28th Member State and the second ex Yugoslav republic (after Slovenia) in the group. It had applied for its joining to the EU in 2003 and started negotiations in 2005. The official name of the country is Hrvalska and the abbreviation that will appear in all the European statistics, HR.
The Accession Treaty establishes some transitional periods. Croatia will maintain some lower rates in special taxes on cigarettes until the end of 2017 and its fishermen will continue using some nets which are considered illegal in the rest of the EU until June 2014.
It is also remarkable the possibility that the former 27 Member States might establish restrictions during a maximum period of seven years referring Croatian citizens, in a similar regimen to that applied to Romania and Bulgaria.
Twenty years after reaching its Independence following the tragic Balkans war, Croatia was joining the Community project, which the EU celebrated as a new proof of its ideology of peace and stability in the continent, and even more if it is foreseen the possibility that, in the coming years, Croatia might share a negotiation table with its old enemy, Serbia, current candidate to the Accession.
On the other hand, it is foreseen that Croatia might form part of the Shengen Area in 2015 and might substitute its national currency, the kuna, for the euro, as soon as its Economy comply with the compulsory criteria on inflation and interest rate control, and stability on public accounts and exchange rates.
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http://europa.eu/youreurope/citizens/work/abroad/work-permits/index_en.htm http://ec.europa.eu/social/main.jsp?catId=466&langId=en
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EU and Croatia flags wave in Zagreb.
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KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
Nationals of Croatia Your right to work as an employee in another EU country may be restricted by transitional arrangements until 30 June 2020. You will need a work permit to work in these countries: Austria Greece Slovenia Belgium Italy Spain Cyprus Luxembourg UK France Malta
Germany Netherlands
Working in Croatia Your right to work as an employee in Croatia may be restricted by transitional arrangements. You may need a work permit if you are from one of these countries: Austria Greece Slovenia Belgium Italy Spain Cyprus Luxembourg UK France Malta
Germany Netherlands
Despite being an historical step for the country, the general image of the crisis within the continent and the deep economical problems in the country (Croatia is in recession since 2009, and its unemployment rate is over 20%), have greatly weaken the support to the Accession. Eight years ago, when negotiations were starting, 80% of Croatians wanted to form part of the EU, and nowadays these citizens just account for the 61%. And what seems more discouraging it is that only the 21% of Croatians having the right to vote participated in the elections to the European Parliament held in Croatia in April.
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KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
Croatian becomes a new official language, bringing the total to 24, and the Enlargement has also meant some significant changes within the EU institutions.
COUNCIL OF MINISTERS
With the incorporation of the Croatian representatives, who are allocated a total vote of 7 in the Council of the EU, the qualified majority for votes in this institution is set at 260 votes in favour of the act out of a total of 352, cast by at least 15 member states out of 28 where the Council acts on the basis of a Commission proposal. Where the Council does not act on the basis of a proposal, the qualified majority threshold is the same with the difference that the votes in favour shall be cast by at least 19 out of 28 (two-third of the member states).
EURPEAN COMMISS With the incorporation of a Croatian commissioner, the Commission is now composed of 28 members. Neven Mimica is the new responsible for the community policy of consumers’ protections, as from 1 July 2013 until 31 October 2014, when the whole Commission should be renewed (Mr Mimica assumed part of the competences that had been under the responsibility of the Maltese commissioner Borg)
EUROPEAN PARLIAMENT With the incorporation of 12 Croatian members of the EP, the European Parliament is now composed of 766 members. These new EPM, directly elected by the Croatian citizens, are attached to the European People’s Party (5), to the Group of the Socialists (5), to the Group of European United Left (1) and to the European Conservatives and Reformists Group (1).
COURT OF JUSTICE The Court of Justice includes now a Croatian judge, so they are already 28 members. Siniša Rodin has a Doctorate degree in Law and is a Lecturer at the Faculty of Law at the University of Zagreb, and he is also Jean Monnet Professor since 2006; he was member of the Croatian team in charge of the negotiations of the country’s Accession to the Union.
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KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
On the other hand, on the 9 July, the ministers of Economy of the Twenty Eight took the official decision about the entrance of Latvia in the European Monetary Union the 1st January 2014, which will make the Baltic republic to become the 18th Member State to adopt the euro.
The ministers also established the fixed and irrevocable Exchange rate of the Latvian currency towards the European one, 0.702804 lats per euro, which is the current central Exchange rate of the lats in the EU Monetary Mechanism.
Latvian prime minister, Vladis Dombrovskis, said the Ecofin’s decision was ‘positive’ for Latvia, as it will ease its economical development in several ways, through the foreseeable reduction in the interest rates, and because it will help the country to reduce the costs of exchange of lats into euros in a very small but quite open Economy, in which around the 70% of the external trade is implemented in Euros.
He also expressed his confidence that this step might encourage more foreign investments, in the same way it happened in Estonia when this country adopted the Euro in 2011. Despite of government’s declarations to support the joining to the Eurozone, citizens do not show any enthusiasm as, according to the last surveys published, just around 22% of Latvians support the Euro. http://www.eurozone.europa.eu/
http://ec.europa.eu/economy_finance/articles/euro/2013-07-10-latvia-will-join-the-euro- area_en.htm
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I. 2. ANNUAL REPORT ON FUTURE EU ENLARGEMENTS
On the 16 October, the European Commission presented its annual report about future Enlargements: the five candidate countries (Turkey, Serbia, Montenegro, Macedonia and Iceland) and the three potential candidates (Albania, Bosnia and Kosovo).
They were specifically remarkable the recommendation to give the status of candidate country to Albania and the request (for the fifth consecutive time) to initiate negotiations with the Former Yugoslavian Republic of Macedonia.
It was also analyzed the decision taken by the Icelandic government to suspend the negotiations of Accession, and because although it maintains its official status of candidate country and the Commission pointed out the high level of fulfillment of conditions, Iceland decided to stop the procedure of Accession until making a consultation to the population through a referendum.
Referring Turkey, the Commission welcomed the decision taken by the member States to open a new chapter of negotiations after years of paralysis, but it also remembered the brutal repression of the protests held in Istanbul during the summer in 2013. These facts ‘provoked a serious concern and pointed out the necessity of the European Union as the anchor of reforms’.
Although the evaluation included other praises towards the reform of justice and the effort to find a definite solution for the Kurdistan question, the Turkish government made a negative lecture of the report. ‘Europe is moving more and more away from Turkey’, said the minister in charge with the relations with Europe, Egemen Bagis, and added that ‘the interest of the Turkish people towards the Accession is decreasing more every day’.
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Referring the whole Western Balkans, the Commission pointed out that the EU is the destiny of the 60% of this region’s Exports, which increases the interest from both parties. But it also underlined that there are still important obstacles to tackle, including the lack of a real market Economy in the area. And, besides, the risks of fraud and corruption are very high. The Rule of Law requires ‘significant improvements’
The most hopeful part of the report refers to the European commitment towards the promotion of peace in the zone. The Commission underlined the role of this European perspective in the historical agreement of understanding signed by Serbia and Kosovo.
The European government also encouraged to strengthen the democratic institutions and to adopt steadier measures to protect the vulnerable groups. ‘It has been a good year for the Enlargement’ said in a press conference the commissioner responsible for it, Stefan Fülle, although ‘the longings for expansion are nowadays more limited’. http://ec.europa.eu/enlargement/countries/strategy-and-progress-report/index_en.htm http://ec.europa.eu/enlargement/index_en.htm
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I. 3. APPROVAL OF THE MULTIANNUAL FINANCIAL FRAMEWORK 2014-2020
In February, the EU leaders reached an agreement on the Multiannual Financial Framework, MFF, for the period 2014-2020, which established that the Community budget for this new cycle of seven years will amount to 960 billion euro in ‘commitment appropriations’ (ceiling of expense) and to 908 billion in ‘payment appropriations’ (effective expense).
These figures represented the first budgetary cut in the Union’s history and a significant reduction regarding the Commission’s initial proposal, which had planned a global sum of 1.08 trillion euro.
However, on the 13rd March, this political agreement was rejected by the plenary session of the European Parliament, by a wide majority of 506 MEP. The Parliament proposed a series of conditions in order to give its final support to the project:
A more flexible financial framework, so that the unused resources could be transferred from one year to another, and between different categories of expense,
A reduction of the difference between payments and financial commitments in the budget, in order to avoid its effect on the following budgetary periods,
The creation of new ‘own resources’ that might substitute progressively the current system mainly based on the national contributions proportionate to the Gross National Income, of each country,
A clause to review the MFF in two or three years at the latest, allowing the European Parliament to evaluate it considering a possible improvement in the economical situation
Negotiations between both institutions, Council and Parliament, resulted in an agreement the 27th June, which was confirmed on the plenary session of the Parliament in July.
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On the 19th November the final vote was held in the Parliament. By a wide majority, the MEP gave their support to the new MFF as they considered that their requirements had been fulfilled, including the flexibility, the revision in 2016, and a new contribution to the 2013 budget in order to avoid the start of the 2014 budget in the red. They also obtained the commitment from the member States in order to create a group of experts that might analyze the possible reform of the income system of the EU budget so that its dependence from the national contributions might be reduced.
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http://europa.eu/rapid/press-release_MEMO-13-1004_en.htm http://ec.europa.eu/budget/mff/index_en.cfm http://www.europarl.europa.eu/news/en/news- room/content/20131118IPR25541/html/European-Parliament-approves- EU%E2%80%99s-long-term-budget-%28MFF%29-2014-2020 http://www.europarl.europa.eu/news/en/news- room/content/20131118IPR25540/html/Parliament-approves-EU%E2%80%99s-2014- budget-and-plugs-2013-payment-gaps
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I. 4. EUROZONE CRISIS: CYPRUS RESCUE AND CONCLUSION OF THE ASSISTANCE PROGRAMMES FOR SPAIN AND IRELAND
CYPRUS: 10 billion euro and penalization for savers
On the 25th March, the Eurozone countries and Cyprus reached an agreement to save the Mediterranean country from the bankruptcy, this situation being provoked by the over dimension of the financial sector in the country (it represented the 550% of the GDP) and, also, because of the impact of the agreed restructuring on the Greek Debt.
On the 3rd April, it was closed a preliminary agreement between the ‘Troika’ (composed of representatives of the European Commission, the European Central Bank and the International Monetary Fund) and Nicosia, which meant a bailout for Cyprus of 10 billion euro (the IMF would provide the 10%), at an interest rate between 2.5 and 2.7%, and within a period of 22 years.
In return for the rescue, Nicosia promised to restructure its major financial entity and to liquidate the second bank in the country, imposing severe penalizations to shareholders, creditors and depositors with more than 100.000 euro in their accounts. It was also imposed a regime of limitations to the movement of capitals, with restrictions to the outflow of money from the country. Cypriot banks closed during more than ten days. The rescue plan also foresaw hard measures of cuts, reforms and privatizations, aimed to allow the return of Cyprus to what Brussels calls the ‘path of sustainable growth’.
The Eurozone had to rectify its previous proposal, as firstly it has planned a penalization for all the deposits, included those bellow 100.000 euro (it had been planned a fee over 6% for these small savers), which violated the provisions included in a Community Regulation from 2008 that establishes the guarantee of all the ‘small deposits’.
Cyprus became an ‘experiment’, as for the first time, citizens having their savings deposited in financial entities had to pay for the rescue.
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SPAIN: Conclusion of the Banks rescue
All along 2013, the ‘Troika’ carried out several inspections over the Spanish Banks rescue, with intense schedules of meetings with different responsible persons in the Bank of Spain, ministry of Economy and Spanish financial entities.
On the 14th November, the Eurogroup announced its decision of not extending the Spanish bank rescue and to close it, therefore, on the 31st December.
In total, Spain has used 41.3 billion euro out of the 100 available in the credit line. It is a loan at an interest rate of 0.5% with an average maturity of 12.5 years, and which was accompanied by a strict conditionality expressed in the ‘Memorandum of Understanding’.
However, and despite the closure of the assistance program, the Eurogroup might still develop supervision activities over the Spanish Economy until recovering the 75% of the credit, being expected two inspections per year as from 2014.
According to the experts’ opinion, the Spanish banks will still have to face difficult challenges, as default is about 13% and it will go on its increase while there is no growth in the Economy, and there are still doubts on the real situation of the sector awaiting the new ‘stress test’ on the banks that will be implemented by the ECB in 2014. It is also an unknown question the effect of the enormous sum of public Debt that Spanish banks accumulate in their Balance sheet (it almost accounts for 10% of their assets, around 300 billion euro). Although admitting the improvement in the Spanish banks, the European institutions pointed out the risk of possible new turbulences, and showed their disposition to offer additional supports to Spain through other available mechanisms within the European Mechanism of Stability.
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IRELAND: Closure of the rescue
The Eurogroup also announced in November that Ireland finalized its assistance program. Unlike the Spanish rescue, the Irish one affected the whole Economy and the attached conditions referred to all the different economical aspects; in the Spanish case, the requirements were much more focused on the banking system, although in the end they also forced the labour and retirement pensions’ reforms and a strict control over the public deficit.
http://www.esm.europa.eu/
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I. 5. ECONOMIC GOVERNANCE – ‘2013 EUROPEAN SEMESTER’: ‘IN-DEPTH REVIEWS’ AND ‘COUNTRY SPECIFIC RECOMMENDATIONS’, AND NEW ‘2014 EUROPEAN SEMESTER’
According to the foreseeable Schedule in the ‘2013 European Semester’, the European Commission published two relevant reports about the Spanish Economy: the ‘In- Depth Review about Macroeconomic Imbalances’ and the ‘Specific Recommendations’.
On the 10 April, the Commission published the ‘In-Depth Reviews’ on Fourteen countries, as they had been required in the ‘Macroeconomic Imbalance Procedure’.
Brussels pointed out then that Spain was, with Slovenia (a firm candidate to ask for a rescue because of the ‘substantial risks’ in its financial sector), one of the countries with the highest economic imbalances. Although the Commission showed a reasonable satisfaction with the austerity efforts implemented in Spain, it also showed its displeasure with the rhythm in the progress of reforms. In the words of the commissioner for Economy, Olli Rehn, ‘the reform agenda is unfulfilled, and even some reforms that have been adopted have not show their effects because of the delay in their activation’.
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Brussels’ recommendations covered a wide range of measures, which had to be analyzed in the Stability and Reform Programs: a new increase of taxes, new adjusts in the retirement pensions system and in the labor reform, and new measures to fight the multimillionaire energetic deficit.
In the labor field, the Commission required to make the unfair dismissal cheaper and a boost to the active policies of employment. Referring the retirement pensions, its recommendation was to progress towards a lower connection between the pensions and the inflation rate, through the introduction of correction factors like the change in GDP and the number of contributors and pensioners. Referring taxes, the Commission suggested the reduction of the number of products with a reduced VAT rate, or the increase of these rates.
On the 29 May, the Commission published its ‘Specific Recommendations’ for each Member State, after having analyzed the National Reform Programs and the Stability or Convergence Programs (these recommendations were approved afterwards by the European Council in June).
Brussels published its decision to give more time to six Member States in order to comply with the commitments to reduce the public Deficit.
In the Spanish case, the Commission extended the period to give an end to the situation of an excessive deficit by two years. Spain should bring its general public deficit below 3% of GDP in 2016, being the previous targets 6.5% in 2013, 4.2% in 2014 and a final 2.8% in 2016.
The evaluation of the Spanish Reform Program concluded that, although the direction was correct, ‘it is urgent to adopt and put into practice effectively the pending reforms following a schedule’. Brussels insisted on the acceleration of the retirement pensions’ reform, the deepening of labor reform and the approval of the VAT and special fuel taxes increase.
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The Commission decided not to open a sanctioning procedure against Spain, which was candidate to it for its ‘serious Macroeconomic Imbalances’, situation that might have led to a stronger surveillance on the economic policy and possible sanctions. http://ec.europa.eu/economy_finance/eu/countries/index_en.htm http://ec.europa.eu/europe2020/making-it-happen/country-specific- recommendations/index_en.htm
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On the 13rd November, the new cycle of the ‘2014 European Semester’ started coinciding with the publishing of the two required reports:
the ‘Annual Growth Survey 2014’ http://ec.europa.eu/europe2020/pdf/2014/ags2014_en.pdf
the ‘Alert Mechanism Report on Macroeconomic Imbalances 2014’, which required, in this occasion the elaboration of Sixteen ‘In-depth Reviews’ (two more countries than in 2013, when the EU had one Member State less) http://ec.europa.eu/europe2020/pdf/2014/amr2014_en.pdf
Spain was again in the list of countries that suffer major Macroeconomic Imbalances, that justify the elaboration of a deeper analysis that might determine their causes, their evolution and their impact in the rest of countries. Reiterating the conclusions included in the ‘In-depth Reviews’ published in April, Brussels pointed out that two countries were the weakest part of the chain: Spain and Slovenia. According to the report, the Spanish Macroeconomic Imbalances are focused in the progress of six of the eleven macroeconomic indicators which are analyzed: Net International Investment Position, Real Effective Exchange Rate, Export Market Shares, Private Sector Debt, General Government Sector Debt and Unemployment Rate.
http://ec.europa.eu/europe2020/making-it-happen/annual-growth-surveys/index_en.htm
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I.6. ECONOMIC GOVERNANCE – ‘TWO-PACK’: EXAMINATION OF 2014 NATIONAL BUDGETS
The European Commission, the European Parliament and the Council of the EU reached on 20 February a definite agreement on the legislation known as the ‘Two- Pack’, composed of two Community Regulations that plan the reinforcement of the European institutions’ competences in the budgetary surveillance of the Eurozone countries.
According to these new laws, the States should send to the Commission their draft budgets before being approved by the Parliaments in each country, so that if Brussels detects a ‘severe non-compliance’ with the obligations under the Stability and Growth Pact (public Deficit over 3% of GDP and Debt over 60%), it could ask the Member State concerned to submit a revised plan. And if the State did not comply with this requirement, the Commission might notify this circumstance to the Eurogroup, which might start a discussion about it.
http://europa.eu/rapid/press-release_MEMO-13-457_en.htm http://ec.europa.eu/economy_finance/economic_governance/sgp/budgetary_plans/index _en.htm
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The legislative pack on budgetary surveillance entered into force 30 May and was put into practice for the first time with the elaboration of the 2014 draft budgets in the Eurozone countries. The Commission published its assessments on 15th November.
In the Spanish case, the European Commission said that the budget submitted for 2014 did not guarantee the compliance of the objective to reduce the deficit to 5.8% of GDP, and therefore, it asked the Government of Mariano Rajoy to adopt additional cuts. The Spanish ministry of Economy, Luis de Guindos, tried to minimize the Community reject, maintaining that the divergences between Brussels and Madrid were minimum, and that the Spanish government would not introduce substantial
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modifications in its 2014 budget. As 2015 and 2016 are concerned, Brussels reported that the government ‘had not yet specified the measures needed to adjust the deficit in line with the objectives fixed by the EU’ (4.2% and 2.8% respectively). ‘And what is remarkable, in 2015 the possible expiration of those temporary measures adopted in the previous years (notably the Personal Income Tax increase) might increase the breach regarding the objective’.
After the Eurogroup meeting held on 22nd November, the commissioner of Economy, Olli Rehn, explained that the adjustment for the 2014 Spanish Budget, which according to his team might vary between 1 and 5 billion euro, should finally be set in 2.5 billion ‘through deep measures, specific and with full contents, based in the National Reform Program’
http://ec.europa.eu/economy_finance/economic_governance/sgp/pdf/dbp/en_2013-11- 15_co_es.pdf
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II. GENERAL AFFAIRS ON ECONOMIC ISSUES
II.1. COHESION AMONG EUROPEAN REGIONS - RANKING GDP per capita
Cohesion among European regions, measured through the GDP per capita, continues to show significant differences: - The regions leading the ranking (London, Luxembourg and Brussels) double, and even triple, the EU average, - The most disadvantaged regions are located in Bulgaria and Romania (they just reach the 30% of the EU average), - Euskadi – Basque Country is situated over the average (index 132 over the average EU-27= 100), and occupies the 31st position among the 270 regions.
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REGIONS’ RANKING (EU-27) - GDP per inhabitant (EU-27= 100) (PPS) - 270 regions (territorial units NUTS II) RANKING – 2010 2007 2008 2009 2010 1 UKI1:Inner London 323 325 332 328 2 LU00:Luxembourg 274 263 255 266 3 BE10:Rég. Bruxelles / Brussels Gewest 220 217 224 223 4 DE60:Hamburg 186 200 196 203 5 FR10:Île de France 175 175 177 180 6 NL11:Groningen 162 193 173 180 7 SK01:Bratislavský kraj 160 167 177 176 8 CZ01:Praha 177 175 176 172 9 SE11:Stockholm 171 169 171 168 10 AT13:Wien 160 161 163 165 11 DE21:Oberbayern 165 156 158 163 12 UKM5:North Eastern Scotland 152 155 156 162 13 DE71:Darmstadt 155 161 159 161 14 DE50:Bremen 157 160 149 158 15 DK01:Hovedstaden 145 147 148 157 ………………. …… …… …… …… ………………. …… …… …… …… 31 ES21:País Vasco 136 134 134 132 ………………. …… …… …… …… ………………. …… …… …… …… 256 HU33:Dél-Alföld 41 43 43 42 257 PL31:Lubelskie 37 39 41 42 258 PL32:Podkarpackie 37 39 41 42 259 RO11:Nord-Vest 40 42 43 42 260 HU32:Észak-Alföld 39 40 42 41 261 HU31:Észak-Magyarország 39 40 40 40 262 RO31:Sud - Muntenia 34 39 40 39 263 RO22:Sud-Est 34 37 38 38 264 BG33:Severoiztochen 34 37 36 36 265 BG34:Yugoiztochen 33 36 36 36 266 RO41:Sud-Vest Oltenia 33 35 36 36 267 BG42:Yuzhen tsentralen 29 30 30 30 268 BG32:Severen tsentralen 28 30 29 29 269 RO21:Nord-Est 26 29 30 29 270 BG31:Severozapaden 27 28 27 26 Source: EUROSTAT, own elaboration
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2007
350 323
300 274
250 220 200
150 136
100
50 28 27 26
0 Inner London Luxembourg Région de Bruxelles EUSKADI-PAÍS Severen tsentralen Severozapaden (BG) Nord-Est (RO) VASCO (BG)
2010
350 328
300 266
250 223
200
150 132
100
50 29 29 26
0 Inner London Luxembourg Région de Bruxelles EUSKADI-PAÍS Severen tsentralen Nord-Est (RO) Severozapaden (BG) VASCO (BG)
Source: EUROSTAT, own elaboration
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In the Spanish ranking of Autonomous Communities, the Basque Country is the region with the highest level of GDP per capita, despite the reduction regarding its position in 2007. Madrid and Navarra follow it in the ranking, with indexes 129 and 126. Only seven Autonomous Communities out of the Seventeen are over the index 100 (the three ones mentioned above together with La Rioja, Aragón, Cataluña and Baleares).
REGIONS’ RANKING – SPANISH AUTONOMOUS COMMUNITIES 2007-2010- GDP per capita (UE-27= 100) (PPS)
2007 2008 2009 2010 ES11:Galicia 88 92 92 90 ES12:Principado de Asturias 97 97 95 93 ES13:Cantabria 105 100 100 97 ES21:País Vasco 136 134 134 132 ES22:Comunidad Foral de Navarra 131 130 129 126 ES23:La Rioja 112 114 112 110 ES24:Aragón 114 115 113 111 ES30:Comunidad de Madrid 136 134 136 129 ES41:Castilla y León 101 98 98 96 ES42:Castilla-la Mancha 82 85 83 79 ES43:Extremadura 72 71 72 69 ES51:Cataluña 123 120 120 116 ES52:Comunidad Valenciana 95 94 91 88 ES53:Illes Balears 113 111 110 105 ES61:Andalucía 81 80 79 75 ES62:Región de Murcia 87 88 86 83 ES63:Ciudad Autónoma de Ceuta (ES) 96 91 94 88 ES64:Ciudad Autónoma de Melilla (ES) 94 85 86 80 ES70:Canarias (ES) 92 89 88 85 Source: EUROSTAT, own elaboration
- Extremadura, Andalucía and Castilla-La Mancha are the Communities with the lowest GDP pc in the country, and the three of them have seen it being reduced in relation with the 2007 level. The Canary Islands, Murcia and Valencia are, also, regions that show significant low levels and reductions in comparison with 2007.
- Only Galicia shows an improvement in its position, as it passes from an index 88 in 2007 to an index 90 in 2010.
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2007
160 136 136 140 131
120
100 82 81 80 72
60
40
20
0 MADRID EUSKADI- PAÍS VASCO NAVARRA CASTILLA-LA MANCHA ANDALUCÍA EXTREMADURA
2010
140 132 129 126 120
100 79 75 80 69
60
40
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0 EUSKADI- PAÍS VASCO MADRID NAVARRA CASTILLA-LA MANCHA ANDALUCÍA EXTREMADURA
Source: EUROSTAT, own elaboration
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II.2. ECB: REDUCTIONS ON THE INTEREST RATES TO EASE CREDIT
The ECB Governing Council decided in May and November the reduction of the interest rates in a quarter-point in both occasions, leading them to 0.5% in May and 0.25% in November, which were two historic minimums since the euro’s birth in 1999.
The decision taken in November was a significant surprise for analysts and investors, and was interpreted as a clear reaction towards the recovering in the Eurozone, which is being so slow and showing many uncertainties and risks. Inflation in October had been 0.7%, the lowest rate in four years and far below the ECB target (2%), and although the president of the Bank, Mario Draghi, admitted his expectations of low levels of inflation in the coming times, he dismiss the idea that Europe might suffer a situation of deflation, with a generalized and long-term decrease in the level of prices.
In both occasions, the ECB also decided to lower the interest rate on the ‘marginal lending facility’ (emergency loans for a term of 24 hours); in May it was lowered by half a point to 1% and, in November by a quarter point to 0.75%.
However, the ECB decided to maintain unchanged the 0% rate on the ‘deposit facility’ (interest remunerated by the ECB to the money that is deposited by the banks in the Eurozone), although Draghi assured, both in May and November, that the ECB was technically ready to change it into a negative sign, which would represent a cost for those banks that might decide leaving their excess of liquidity in the Central Bank. This would be, indeed, a form of pressure to banks, so that they might choose other options, more profitable, by giving credits to companies and citizens.
http://www.ecb.int/ecb/html/crisis.en.html http://www.ecb.europa.eu/press/pressconf/2013/html/index.en.html
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II.3. BANKING UNION: ADVANCES IN THE SINGLE SUPERVISORY AND RESOLUTION MECHANISMS
All along 2013, the EU has made important progresses referring the Banking Union project:
The Single Supervisory Mechanism in the Eurozone (SSM)
The European Parliament plenary session approved on 12 September the rules that will enable the European Central Bank to exercise the role of common supervisor of the banking sector within the Eurozone.
After months of negotiations, the Parliament imposed its requirements so that the Central Bank will act in a particularly transparent manner, as the initiative means a significant transfer of competences in the field of banking supervision from the States to the ECB, and for that reason it should important to maximize the measures of democratic control over the new supervisor.
This requirement means that the European Parliament will have a wide and deep access to the information related to this new ECB activity, as this institution will have to publish information about agreements and operative decisions, and will have to send quarterly reports to the EP, Commission and Council of the EU, about the progresses achieved in the operative implementation of the banking supervision system. The agreement makes it clear, in this context, that there should a specific division, within the ECB, between the staff dedicated to the monetary policy and that working in the banking supervision.
The ECB will assume these new responsibilities in September 2014. It will then start a direct supervision work over the biggest banks in the Eurozone, those banks having assets of more than 30 billion euro or constituting, at least, 20% of their home country’s GDP or which have requested or received public financial assistance from the European Stability Mechanism (ESM). It will supervise, in this way, about 130 entities out of the 6.000 that currently exist in the Eurozone, which, approximately, accumulate the 85% of the total assets in the banking sector within the Eurozone (according with the estimations given by the
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Spanish government, 95% of the Spanish banks will be under the ECB control). Before this date, it will carry out an examination of the quality of the assets in the hands of the main banks in the Eurozone through a new ‘stress test’. The Mechanism, which will be compulsory for the Member States belonging to the European Monetary Union, will be open to all the Community countries.
The Single Resolution Mechanism in the Eurozone (SRM)
In December, the Eurozone ministers of Economy reached a draft agreement over the European Mechanism that will be in charge of deciding about the closure and liquidation of banking entities.
This agreement conferred the Commission a secondary role in the decision making; it will have to give its consent, but the entity that will firstly take the decision will be a new board composed of governmental representative persons. And referring the financing of liquidations, just at the end of the process, in 2026, there will be a common fund that will support the rescue of banks. Until then, each country will have to finance the bankruptcies in their financial systems.
http://europa.eu/rapid/press-release_MEMO-13-780_en.htm?locale=en http://europa.eu/rapid/press-release_MEMO-13-675_en.htm?locale=en
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II.4. FINANCIAL MARKETS: PROPOSAL OF DIRECTIVE ABOUT A FINANCIAL TRANSACTION TAX
The European Commission presented in February a draft Directive about the implementation of a Tax on Financial Transactions (FTT) that Eleven Member States, through the procedure of ‘enhanced cooperation’ among Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain, a group of countries that, as a whole, account for 90% of the Eurozone GDP.
The proposal maintains the approach foreseen in the 2011 original proposal: a 0.1% tax rate for the trading in shares and bonds, and 0.01% for other deals, like those with financial derivatives. And, in the same way it was planned in the original proposal, the most frequent financial activities for citizens and business (ex. credits, payments, Mortgages loans, deposits, etc.) are excluded in the tax..
The Directive plans to follow the ‘principle of establishment’, which means that the tax will be applicable if one party to the transaction is established the territory of the FTT jurisdiction, regardless of the place where the transaction is being held.
And, as an added safeguard against possible non-payments of the tax, the proposal considers the ‘principle of issuance’, which means that all financial instruments that are issued in any of the Eleven member States will be levied when they are exchanged, even if those who decide the transaction might not be established in the FTT zone.
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The proposal has to be discussed by the Member States and, although all of them will take part in the debate, only the ones that participate in the enhanced cooperation will have the right to vote, and should endorse it by unanimity before its coming into force.
http://ec.europa.eu/taxation_customs/taxation/other_taxes/financial_sector/index_en.ht m
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II.5. BANKS: NEW DIRECTIVE ON BANKERS’ BONUSES AND HIGHER REQUIREMENT OF QUALITY CAPITAL
The European Parliament approved on 16th April a Directive that will impose limits to the bankers’ bonuses and a higher requirement of quality capital.
According to the new law, bonuses paid to executives in the European banks could not exceed their fixed annual salary.
Only if shareholders approve it, the bonus could reach the double of the salary; in this case, the total remuneration received by the manager will rise to a maximum of the triple of his fixed salary. This authorization will need the vote of at least 66% of shareholders owing half the shares represented.
On the other hand, EU banks will be required to increase their highest-quality capital, in order to avoid the repetition of the financial crisis with banks lacking enough quality capital to face the deep deterioration of their assets.
It is, indeed, the ‘translation’ into the Community Law of the international pack of regulations on bank capital, known as ‘Basilea III’, which will come into force 1 January 2014.
‘For the first time in the history of the EU financial regulation, we are setting a cap to the bankers’ bonuses’ said the European Parliament representative Othmar Karas. ‘The objective, beyond ethic considerations, is to put a limit to the variable salaries that have been paid in an unjustified manner’, pointed out Michel Barnier, commissioner responsible of Internal Market.
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II.6. COMPETITION: SANCTIONS FOR ILLEGAL BEHAVIOURS TO MICROSOFT AND BANKS
In March, the European Commission imposed a new sanction to Microsoft of 561 million euro for not having complied with its commitments to allow users to choose easily a browser in the Windows 7 version.
Brussels pointed out that the American giant had not fulfill the agreement reached in 2009 through which it planned to offer, in its operating system, a screen to choose an internet browser different from its Explorer until 2014. Specifically, Microsoft did not comply with this commitment in its Service Pack 1 version of Windows 7 between May 2011 and July 2012, and that, according to Brussels, made it impossible to 15 million users to have a clear option to choose a browser.
As information sources in the Commission explained, the commitment was legally binding as it was the way that the Community executive accepted to close its investigation on the competition problems derived from the selling of Internet Explorer together with its operating system Windows, which dominates the personal computers’ market.
They also highlighted that it was the first decision taken by the Commission to sanction a company for not fulfilling its legal binding commitments agreed in the field of free competition.
http://europa.eu/rapid/search- result.htm?query=45&locale=en&page=1&sort=eventDate&direction=DESC http://europa.eu/rapid/press-release_IP-13-196_en.htm
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In the beginning of December, the Commission fined six international financial entities a record sanction of 1.71 billion euro for manipulation of some interest rates for their own good.`
The commissioner responsible for Competition, Joaquín Almunia, announced then the biggest sanction ever decided by the EU to a cartel and that it was also, the first sanction to the European banking sector for anti-competition practices.
The sanctioned Banks were Deutsche Bank (725,4 million), Société Générale (445.9 million), Royal Bank of Scotland (391 million), JP Morgan (79.9 million) y Citigroup (70 million), together with the broker RP Martin (247.000 euro). Other two entities, the British bank Barclays and the Swiss group UBS, also participated in the manipulation, but avoided their respective sanctions, thanks to their collaboration with the investigation.
Brussels accused them of acting, between September 2005 and May 2008, as a cartel that distorted, for their benefit, the rates of interest of some determined derivative products which were linked to some reference index like the Euribor, which are applied to millions of mortgages, savings and companies.
‘Those people affected are thousands of clients, millions of persons whose credits or mortgages are linked to theses indexes’, said Almunia in his appearance. ‘What seems to be so shocking about these scandals, it is not only the interest rates manipulation but also the collusion between banks who are supposed to be competing with each other’, he underlined. http://europa.eu/rapid/press-release_IP-13-1208_en.htm
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II.7. INVESTIGATION OF ILLEGAL STATE AIDS: FORD, TDT OPERATORS AND TAX SCHEME FOR ACQUISITION OF SHARES IN FOREIGN COMPANIES
All along 2013, the Commission carried out several important initiatives referring the surveillance of ‘State Aids’:
In May, the Community executive opened a formal investigation on the Spanish plans to grant public financing to the FORD group for an investment project in the Valencia region in order to examine if they were in line with EU state aid rules.
In 2012, Spain notified plans to offer FORD a € 25.2 million direct grant for the production of a new model of Ford Transit Conect in Almussafes (Valencia), an area with high unemployment and a low level of GDP eligible for regional aid.
In these kind of aids, with ‘regional purpose’, the Commission has to open an investigation when the favored projects exceed certain market shares and capacity increase thresholds, to avoid undue distortions of competition in markets that are struggling with overcapacity or low growth. The Commission's preliminary investigation revealed that the project might exceed the authorized 5% increase in production capacity on a market in decline. At this stage, the Commission will now investigate these aspects further to determine whether the relevant thresholds are met. It will have to perform an in-depth assessment in order to ascertain whether state aid is necessary for realizing the investment project and whether the benefits of the aid for regional development outweigh the distortion of competition that it creates. http://europa.eu/rapid/press-release_IP-13-432_en.htm
In June, the Commission concluded that a Spanish €260 million scheme to finance the digitization and extension of the terrestrial television network in remote areas of Spain was incompatible with EU State aid rules. According to Brussels, these measures favored the terrestrial digital technology to the detriment of others and operators of terrestrial platforms received a selective advantage over their competitors using other technologies. and therefore the Commission asked them to pay the money back to the Spanish taxpayers.
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Following a complaint from a satellite platform operator, the Commission opened in 2010 an in-depth investigation into the public financing of the DTT infrastructure, which found that, indeed, the measure exclusively funded the digitization of terrestrial transmission technology. By contrast, alternative transmission platforms like satellite, cable or the internet could not effectively benefit from those subsidies although they would have been available and suitable to cover the territory.
http://europa.eu/rapid/press-release_IP-13-566_en.htm
In July, the Commission opened an in-depth investigation to verify whether the new interpretation of a Spanish scheme allowing tax deductions, in the Corporate Tax provisions, in connection with the acquisition of shareholdings in non-Spanish companies is in line with EU state aid rules, as it gave the beneficiaries a selective economic advantage over their competitors performing domestic acquisitions.
In 2011, the Commission had already concluded that this tax scheme amounted to illegal aid and Spain committed then not to apply it on new beneficiaries. However, in March 2012 the new government adopted a new binding administrative interpretation that allowed, retroactively, tax deductions not only for direct acquisitions but for indirect ones as well. At this new stage, the Commission considers that the amended scheme may again involve illegal state aids.
If the Commission finds that the amended scheme is incompatible with state aid rules, Spain may need to recover the aid already granted from the beneficiaries. Therefore, Brussels has ordered Spain to stop applying the new administrative interpretation until the Commission has taken a final decision on its compatibility.
http://europa.eu/rapid/press-release_IP-13-701_en.htm
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II.8. INVESTIGATION ON THE CONCESSIONS OF REGULAR LINES OF BUSES IN SPAIN
In July, the European Commission opened an investigation against the system that distributes the concessions of regular lines of buses in Spain, as it had already warned that several national laws impose barriers to the entry of new bidders and violate, therefore, the Community legislation on Right of Establishment, equal treatment and non discrimination.
Brussels questioned one law that gives preference to those outgoing bidders in the processes of allocation of new concessions and, also, the extensions of 25 years assigned in some regions (Cataluña, Madrid, Canarias, Murcia, Galicia, La Rioja, Valencia and Castilla-León).
The investigation was started because of the complaints of the group GLOBALIA, whose transports company had already stopped several tenders convoked by the Spanish ministry of Infrastructures before the Courts of Justice.
The right of preference and the extents are measures that benefit, as a general rule, those oldest groups with higher experience in the sector of regular transport of road transport travelers. These companies felt very discouraged towards the Community decision, and pointed out that ‘the Commission is asking the government to act retroactively over past decisions, which might affect the juridical security of the Spanish transport model and the companies’ financial commitments for the purchase of fleet and for the develop of new technologies.
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III. GENERAL AFFAIRS AFFECTING THE CITIZENS
III.1. EUROPEAN YEAR OF CITIZENS - 2013
The European Union declared 2013 as the ‘European Year of Citizens’, also celebrating the 20th anniversary of the ‘Citizenship of the Union`, a concept that was created in the Treaty of Maastricht in 1993.
Viviane Reding, commissioner responsible for Justice, said, at the ceremony of inauguration of the Year in January, that ‘we need the direct participation of the citizens in the construction of a stronger and more political Union’.
She added that ‘it is for that reason that 2013 is the European Year of Citizens, a year dedicated to you and to your rights for being Europeans. The Citizenship of the Union is more than a concept. It is a specific reality that gives tangible benefits to citizens. The European Commission wants to contribute to the citizens’ knowledge on how they can directly benefit from their rights and to listen their points of view regarding the future direction of Europe. The European citizens must have the possibility to express their worries and prepare the path for the European elections. It is the time that we all assume our common future’.
To celebrate the ‘European Year of Citizens 2013’, many events, conferences and seminars were organized all over the Union, at a national, regional and local level. Besides, the Commission reinforced the visibility of the multilingual internet websites ‘Europe Direct’ and ‘Your Europe’ as the key elements of the information system about the EU citizens’ rights, and also the visibility of the problem solving tools, like SOLVIT, so EU citizens could use them in a better manner and defend their rights in a better way.
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http://europa.eu/citizens-2013/en/home
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III.2. EUROPEAN ROAD SAFETY DAY, DEDICATED TO REDUCING PEDESTRIAN FATALITIES IN URBAN AREAS
The ‘European Day on Road Safety’ was celebrated 6 May, as a contribution of the European Commission to the World Week of the United Nations for the Road Safety, and whose main subject, this year, was the ‘pedestrian road safety’.
70% of pedestrians that are victims of accidents die in urban areas and among the risks that threaten pedestrians and cyclists in urban zones it should be underlined de lack of separate lanes, the high speed of vehicles and the risky behaviors of road users.
The Commission is working in several measures specifically linked to the vulnerable road users’ safety and to the road safety in urban areas. Among these measures are: The new proposed EU rules for the design of truck cabins, which will help to save the lives of 300 to 500 vulnerable road users such as pedestrians or cyclists every year, The up-coming Urban Mobility Package with provisions for planning safe and sustainable urban transport, The CIVITAS initiative, in which cities test innovative measures for more sustainable urban mobility, Works on the further deployment of modern technologies and in-vehicle safety systems such as pedestrian detection or emergency braking systems, The new initiative on serious road traffic injuries, Awareness raising actions e.g. via the Road Safety Charter.
http://europa.eu/rapid/press-release_IP-13-403_en.htm http://europa.eu/rapid/press-release_IP-13-236_en.htm
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III.3. PROPOSAL OF DIRECTIVE TO PROTECT MORTGAGE DEBTORS AND SENTENCE OF THE COURT OF JUSTICES AGAINST THE SPANISH MORTGAGE LAW
The European Parliament approved in September a proposal of Directive that will regulate the EU mortgage market, and that will increase protection and security for people that contract these kind of credits.
Once it comes into force, it is foreseen that consumers will dispose of a seven days period of reflection before signing the mortgage or, in other case, the same period to change their minds.
Before signing any contract, the consumer will receive, in paper or in electronic format, clear and comprehensible general information about the credit contracts, so that he can know the total cost and the financial consequences in the long term. In the same way, banks and intermediate will have to offer the consumer personalized information to compare de available credits in the market.
The new law will require a ‘reasonable resistance’ before implementing evictions, will limit the charges for nonpayment, will impede the member States to oppose to the assignment in payment (giving the house in return of the cancellation of the debt) when agreed between the parties, and will impose the effort to look for the best price for the selling of the properties under evictions. http://www.europarl.europa.eu/news/en/news- room/content/20130906IPR18832/html/Parliament-outlines-rules-to-limit-risks-for-home- buyers
On the other hand, the EU Court of Justice issued on 14 March a sentence about the conformity of the Spanish mortgage law with the European legislation on consumers’ protection.
The Court answered to the question posed by a judge in Barcelona referring to the Spanish law that establishes that if a mortgage person does not pay any monthly payment the bank could implement an eviction through an accelerated process,
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although if the debtor considers that the contract he signed contains abusive clauses he could seize to another process called ‘declarative’, which resolution takes a longer time.
The question referred to the specific case that if this declarative process is initiated, then it is very probable that the mortgage might be executed before the judicial decision, so it might be possible that despite a final favorable verdict for the debtor (that might confirm the existence of an abusive contract), this person might have lost his house and just have the option to claim for a compensation.
The European court assessed in its sentence that, indeed, the mortgage law is contradictory with a 1993 Directive on abusive clauses contained in those contracts celebrated with consumers, because it does not allow the Spanish judges to adopt preventive measures, as it might be the eviction stoppage. The judge in charge of a declarative process should be able to adopt preventive actions, as it could be the cancellation of the eviction, ‘in order to guarantee the complete effectiveness of his final decision’.
It means, therefore, that every citizen having a mortgage can stop a proceedings aimed to expel him from his home if he considers that the mortgage contains abusive conditions. In other words, it means a wider protection for consumers against possible abuses in mortgages and the avoidance of the loss of their homes before being able to demand the financial entity that granted them the credit with bad practices.
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III.4. INITIATIVE TO REINFORCE THE COOPERATION BETWEEN THE EUROPEAN PUBLIC EMPLOYMENT SERVICES
Member States’ Public Employment Services (PES) have a crucial role to play in helping the 26 million unemployed in Europe to get a job. This is why the European Commission proposed in June a Decision to help public employment services to maximize their effectiveness through closer cooperation to better address the needs of the unemployed and businesses.
The Commission wants to create a platform for comparing the performance of public employment services according to some reference indexes, identify best practices and fostering mutual learning.
The network will also provide support for the practical implementation by Member States of employment policies. A notable example is implementation of the ‘Youth Guarantee’, which calls on Member States to ensure that young people are offered a job, further education, an apprenticeship or a traineeship within four months of becoming unemployed or leaving school. It should be implemented from 2014. http://europa.eu/rapid/press-release_IP-13-544_en.htm
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III.5. REGULATORY PROPOSAL TO STRENGTHEN EUROPEAN AIR PASSANGERS’ RIGHTS
The European Commission presented in March a proposal of measures to ensure that air passengers have new and better rights to information, care and re-routing when they are stranded at the airport.
The proposal updates passenger rights in four key areas:
1. Clarifying ‘Grey Areas’, derived from vagueness and incoherence in law (rights to information on delayed or cancelled flights; rights in relation to long delays; rights to re- routing and rights on connecting flights),
2. New Rights: in the case of rescheduling; misspelt names; mishandled baggage,
3. Enforcement, Complaint-Procedures and Sanctioning: strengthening oversight of air carriers; as well as for complaint handling and enforcing individual rights,
4. Changes on disproportionate financial burdens for air companies: limits to assistance to passengers as the provision of accommodation will be limited to three nights in exceptional circumstances (under current rules, air carriers must provide assistance for an indefinite period of time), limits for ‘regional operations’ as the proposal lifts the obligation to provide accommodation to passengers (flights of less than 250 km and with aircraft with less than 80 seats), and the elimination of restrictions in the air carriers’ right to seek compensation from responsible third parties.
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http://europa.eu/rapid/press-release_IP-13-219_en.htm
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III.6. NEW LEGAL PROPOSAL ABOUT TOBACCO: MORE PROTECTION OF PUBLIC HEALTH
The European Parliament passed in October a draft Directive, which is an update of the current law, in force since 2001, with the objectives of improving the protection of public health and reducing the consumption of tobacco among young people.
The main contents in the new proposal are the following:
- Increase of health warnings, so that they will cover 65% of the area of the pack (currently they cover at least 30% of the area of the front of the pack and 40% of the back),
- Prohibition of flavored cigarettes (use of additives and scents, like vanilla or strawberry, which would make them more attractive). Manufacturers will dispose of a period of three years to stop using these additives, although this transitional period will extend to eight years for menthol cigarettes,
- Ban on packs of fewer than 20 cigarettes,
- Ban on the use of products that imitate the tobacco, as they are especially attractive for young people and familiarize them with the habit of smoking.
Following the EU ordinary legislative procedure, the proposal should be ratified by the Council of ministers. As of its formal approval by both institutions, Parliament and Council, member States will dispose of a year and a half to introduce the Directive’s content into their national legislation. http://www.europarl.europa.eu/pdfs/news/expert/infopress/20131004IPR21539/2013100 4IPR21539_en.pdf http://www.europarl.europa.eu/oeil/popups/summary.do?id=1316840&t=d&l=en
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III.7. THE EUROPEAN PROFESSIONAL CARD
In November, the Council of the EU and the European Parliament approved the text that modifies the Directive on the Recognition of Professional Qualifications, which is in force since 2005 and coordinates the recognition of about 4.700 regulated professions in the EU, grouped in 800 general categories.
Its main novelty is the creation of the so-called ‘European Professional Card’, which will prove the education to develop a professional activity in any Union’s country, and reduce, therefore, the waiting periods that exist in some member States delaying the recognition of professionals coming from other member States.
The Card, which will adopt the format of an electronic professional certificate, will have to be issued by the member States on request of those persons that, having a diploma that demonstrates their professional qualification, ask for it. It will be, therefore, the home country the one that will receive the applications and the one responsible for the arrangements of the certificate, instead of the host country, as at present.
The ‘Professional Card’ will become a very useful tool to facilitate the mutual recognition of the qualifications existing in the EU and, therefore, to improve the mobility of qualified workers within the European territory. It will be the European Commission the responsible for selecting those professions that will benefit from the Card, among those that show their interest and those with a significant level of mobility.
Apart from the Card, the modification of the Community legislation will represent the development of new ‘Common Training Frameworks’, which are based on a whole of knowledge, skills and competences or standardized training tests. The qualifications obtained within these frameworks will be automatically recognized by all member States. http://www.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2011 /0435%28COD%29
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III.8. EUROPEAN INITIATIVE TO UPGRADE KEY SEAPORTS
In May the Commission implemented a Plan of modernization of the 319 European seaports considered ‘essential’, included the Port of Bilbao, with the objective of helping port operators upgrade their services and facilities as well as giving them more financial autonomy.
According with Community sources, 74% of the goods entering or leaving Europe go by sea, but one fifth of that amount currently passes through just three ports: Rotterdam, Hamburg and Antwerp. This imbalance results in congestion and extra costs for shippers, transport operators and consumers.
The new proposals presented by the Commission will contribute to develop new short- distance maritime connections, through:
more transparent and open procedures to select the providers of port services with common rules that will prevent possible price abuses by operators with exclusive rights, and the introduction of a ‘port users’ advisory committee’ for a greater customer-focus,
a new focus on EU priority funding on port projects identified in the so- called TEN-T corridor plans (Trans-European Transport Network) and on connections of ports with rail, inland waterways and road, in order to improve the connection to the hinterland,
an extension of the freedom of ports to levy infrastructure charges and a reinforcement of the transparency in the way the charges are set and in the use of public funding.
It is the first Community legislation specific for this sector as, until now, seaports have been covered by the EU general law on freedom of establishment and the rules of competition.
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Although Europe has 1.200 seaports in total, the proposal targets the 319 key ones, which together might create a network of ports capable of supporting the Internal Market.
The proposal must be approved by the European Parliament and member States before being adopted under the ordinary legislative procedure. http://europa.eu/rapid/press-release_IP-13-451_en.htm http://europa.eu/rapid/press-release_MEMO-13-448_en.htm
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III.9. MUTUAL RECOGNITION OF PROTECTION MEASURES IN CIVIL MATTERS: STRENGTHENING THE PROTECTION OF VICTIMS OF VIOLENCE
In June, the EU ministers of Home Affairs and Justice and the European Parliament approved a Regulation on the ‘mutual recognition of protection measures in civil matters’.
With this new law, those persons who are victims of violent situations, like those women suffering a gender-based violence, will increase their level of protection when moving to another EU member State.
The issue is that in some member States protection measures for victims of violence are regulated by civil law while in others it is covered by the criminal law, and until now only protection measures passed by a criminal judge were recognized throughout the EU, which led the victims to a lack of protection when a member Stated applied the civil law.
Women who are victims of gender violence will specially benefit from this new legislation, as their protection is mainly regulated by the civil law. The new Regulation will apply to protection measures ordered on or after 11 January 2015.
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KEY FACTORS ABOUT THE EU AND BISCAY IN 2013
IV. BISCAY AND THE EUROPEAN UNION IN 2013
IV.1. SCHOLARSHIPS OF THE DIPUTACIÓN FORAL DE BIZKAIA TO TAKE EUROPEAN STUDIES
The Decree of the ‘Diputación Foral de Bizkaia’ 138/2013 of the 19th of November 2013 announced, one more year, the scholarships to complete specialization studies on European Affairs during the year 2014-2015.
The grants` target group is graduates, preferably in Economics, Business Administration, Law, Political Science or Sociology, who want to course specialization studies on European Affairs. The studies can be taken at the College of Europe in Bruges, Belgium, or at other renowned European universities.
European Affairs Specialization scholarships were born in 1988 with the signature of the agreement between the ‘Diputación Foral de Bizkaia’ and the College of Europe in Bruges, but now it covers almost all universities existing in the EU. Till now, more than 120 graduates have been awarded with these grants.
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In the same way, the ‘European Political Economy and Finance programme’, designed by the London School of Economics and Political Science for the ‘Diputación Foral de Bizkaia’, was carried out for the seventh consecutive year.
The programme covered a period of three months, from October to December 2013, and counted with the participation of 8 students, who received specialized education in the facilities of the LSE in London.
http://web.bizkaia.net/Ogasuna/europa/estudiar_trabajar.asp?Idioma=IN&Tem_Codigo= 7785&bnetmobile=0&dpto_biz=5&codpath_biz=5|7780|7933|7785
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IV.2. ‘EUROPEAN CITIZEN AWARD 2013’ FOR MORTGAGE AFFECTED PEOPLE PLATFORM AND EUSKALTZAINDIA
European Parliament gave the ‘European Citizen Award 2013’ to the Mortgage Affected people Platform (PAH) and Basque Language Academy (Euskaltzaindia). It is a prize that the European Parliament has awarded since 2008 with the aim of recognize the work of people or organizations that fight for European values promote integration among citizens and member States or help transnational cooperation within the European Union, and also, those ones who promote the Charter of Fundamental Rights of the EU.
The Mortgage Affected people Platform demand the right to a house, the retroactive payment on account and the social rent. To achieve those goals, they made numerous campaigns requiring the end of evictions, putting the blame of abusive mortgages that affected thousands of families in Spain on bad bank praxis.
The Basque Language Academy (Euskaltzaindia) is a cross-border entity that covers all zones and speakers of Basque language (euskera). It was created in 1918-1919 with the aim of promoting euskera all over the world.
The president of the Academy, Andrés Urrutia, pointed out that Basque language unification process and its official recognition were the key factors that made it possible that a minority language was recovering in number of speakers and ways of using it. He also reclaimed a place in Europe for Basque language, a Europe where there was room for euskera and other minority languages of our Andrés Urrutiar receives the award from the hands of Enrique continent. Barón, former president of European Parliament (23/09/ 2013)
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IV.3. EUROPEAN RECOGNITIONS: BISCAYTIK, ACHUCARRO BASQUE CENTRE FOR NEUROSCIENCE AND GETXO
In 2013 various European recognitions were received in Biscay:
The BISCAYTIK foundation, set up by “Diputación Foral de Bizkaia”, obtained the Best Practice Certificate from the European Institute of Public Administration (EIPA).
It is a recognition awarded every two years to the most innovative, effective and efficient European public-sector projects. This year there were highlighted those projects that proposed creative solutions to the crisis.
BiscayTIK is a non-profit public foundation set up by “Diputación Foral de Bizkaia”, with the aim of modernising councils and associations of municipalities by using new technologies, thus making Biscay a model in terms of local public e- Government. Its goals include the promotion of any activities connected to the advancement of knowledge in management practices and technologies related to citizen services by means of the ICT, in order to bring local authorities closer to citizens via the Internet.
The Achucarro Basque Center for Neuroscience was awarded with the HR Excellence in Research recognition of the European Commission.
It is an award that recognizes the commitment of the research centers in Europe in developing good practices in human resources management, in line with ethics and the Code of Conduct for the Recruitment of Researchers.
Until now, 174 centres have been awarded with that logo and six of them are located in Spain.
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Ikerbasque fostered the creation of the Basque center of neuroscience research, named in the memory of Nicolas Achucarro, a pioneer of modern brain research. Achucarro strives to become a model in research of neural circuitries and the development of new strategies for the treatment of brain diseases.
Getxo received the award “European City of Sport 2014” from the European Capitals and Cities of Sport Federation (ACES)
Imanol Landa, major of the city, received in the European Parliament the award that recognizes cities that foster sports culture, together with the representatives of Córdoba, Logroño, Santander and other 16 cities of European Union.
The European City of Sport award is granted to cities that foster the practice of sport among its citizens.
The European Capitals and Cities of Sport Federation awarded every year various cities in different categories: more than 500.000 inhabitants, less than 25.000 inhabitants, or among 25.000 and 500.000 inhabitants.
Imanol Landa received in Brussels the award European City of Sport 2014 for the city of Getxo. (7 November 2013)
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IV.4. EIB: LOAN FOR THE BASQUE GOVERNMENT AND IBERDROLA
On the 28th of June, the European Investment Bank (EIB) and the Basque Institute of Finance signed a loan contract for EUR 150 million, for financing medium and small companies.
Sources of EIB pointed out that the loan contract was not limited to any range of projects. Basque Government said that the loan was like a financial cushion and that it had not to be used in its entirety.
In addition, on the 25th of July the EIB and the electric utility company IBERDROLA signed a loan contract for EUR 200 million in Bilbao.
The loan will support the modernisation of the electricity distribution network throughout Spain, improving its overall reliability and safety. A large number of supply points in the full range of voltages operated by Iberdrola will be connected to the existing network. Furthermore, the programme will comprise the installation of new digital electricity meters in compliance with Spanish legislation, which requires the deployment of digital meters for residential customers by 2018. The investment programme provides for the installation of up to 1.8 million new meters. http://www.eib.europa.eu/projects/regions/european-union/spain/index.htm?lang=-en http://www.eib.europa.eu/infocentre/press/index.htm
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IV.5. EUROPEAN COMMISSION: DECISION ON THE TAX BENEFITS TO THE SPANISH SHIPYARDS
On the 17th of July, the European Commission concluded that the Spanish scheme for the purchase of ships carried out from 2002 to 2011, involving leasing and financing through tax relieves, was illegal because it bestowed an unfair competitive advantage on the Spanish shipyards over their competitors.
This scheme, known as “tax lease” (“Sistema español de arrendamiento fiscal para las empresas navieras”, SEAF), was a complex financial system for the sector set up in 2001 by the government of Jose María Aznar and that was not notified to the Commission before its application for obtaining a prior authorization as it is foreseen in the EU competition law.
After that, the government of Zapatero did not mend it; not even when, as many experts pointed out, in April 2007 the French scheme, very similar to the Spanish one, was partially prohibited. The same sources highlighted that socialist government might try to allege some exceptions to the general rule, such as the serious situation of unemployment some regions were suffering. Neither did the government of Rajoy react in 2012, though the investigation had been opened in 2011.
In accordance with the principle of legal certainty, the Commission will not require the repayment of aid granted between the start of the scheme in 2002 and April 2007, when the Commission publicly declared a similar French scheme incompatible.
According to Brussels, investors, banks and companies that acted as intermediaries in the construction contracts of a total of 273 ships between 2007 and 2011 must repay to the Spanish State the aid granted. Furthermore, Brussels´ decision does not allow the beneficiaries to pass on the repayment obligations to third parties (such as shipyards), even under existing contracts.
In practice, the “tax lease” allowed companies investing in the construction of ships to benefit from enormous tax deductions in the Company tax. That fact attracted not
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only banks and financial entities, but also companies that were not at all related to the sector.
The scheme was a complex leasing chain. Ship-owners, who ordered the ship to a shipyard, sold it to a leasing company when it was still in the construction process. The leasing company signed another leasing contract with an economic interest grouping (AIE in Spanish abbreviation). The AIE was formed by companies created by banks, financial entities or companies from other sectors interested in reducing their tax base in the Corporate Tax. The economic interest grouping financed the acquisition of the ship to the ship-owner and the companies that formed the AIE benefited from the tax reduction thanks to the accelerated amortization of the ship cost. Some experts said that the profitability for the companies of the AIE reached the 15%.
Despite the fact that Spanish Tax Agency is responsible for investigating and checking the declarations of the Company Tax of the companies involved, the aid recovering process must be validated by European Commission. Under no circumstances will that process be interrupted by any possible appeal.
Sector representatives showed their profound concern about the future because, although the investors will be the ones who have to repay the aids and new investors could benefit from the 2012 system, already ratified by the Commission, the repays could dispel new projects.
Initially, this decision of the Commission was taken as the death sentence for the sector’s future, but the lack of a clear assessment of its consequences opened the door for hope. Actually, it seems to be accepted that part of the aids were legal as they had allowed some reductions on prices of ships, which had contributed to the achievement of the objectives of common interest set out in the Guidelines on state aid for maritime transport. http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_21233
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IV.6. BASQUE TAX HOLIDAYS: COMPLIANCE WITH THE REPAYMENT OF THE AIDS
On the 10th of September, the EU Court of Justice held the oral hearing for the case of the Basque tax holidays, in order to start a new procedure to decide about the millionaire fines the Commission imposed to Spain due to the illegal tax exemptions granted to some Basque companies in the nineties. The Court will decide if Spain has to pay the fines that the Commission reclaims and, if this is the case, which will be the amount of money of the fines. The decision, which could be taken in more than a year, will put an end to a decade of disputes.
The so called ‘Basque tax holidays’ include three schemes that were judged in different trials. On this occasion, it is judged the tax credit of 45% for investments in new fixed assets that Basque institutions established in order to foster the creation of companies in Basque Country, and the ‘mini tax holidays’, a gradual reduction of the Tax Base of the Company tax since 1995.
In the procedure initiated in September, the European Commission reclaims to Spain two types of sanctions:
- First sanction amounts to EUR 236 044 for each day of delay in the execution of the Court of Justice´s sentence of 2006, for having allowed aids that are against European Union law.
- Second sanction amounts to EUR 25 817.4 for each day passed from December 2006 to the date of the total repayment of the aids, for not having obliged the companies involved to repay the aids after them being declared illegal.
According to calculations of the experts, sanctions could amount to a total of 64 million euro.
In the hearing of September, the European Commission admitted that most of the aids had already been repaid (a total of 508 million euro), which gave hope to the Basque institutions for the possibility of reducing sanctions, in particular, the first
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one. “It would not been necessary a coercive fine”, said the Commission representative during his speech at Court.
Nevertheless, the European Commission asked for keeping the second sanction because it was precise as a dissuasive measure and because Spain is the second country with more infringements on the decisions of the Commission.
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IV.7. FISHING LIMITS FOR ANCHOVY IN THE BAY OF BISCAY FOR THE 2013/14 FISHING SEASON
The Council of the European Union decided in July that the Total Allowable Catch (TAC) for anchovy in the Bay of Biscay will be of 17 100 tons for the fishing season running from 1 July 2013 until 30 June 2014, which means a reduction of 17 % in respect of the TAC of the previous season. It also decided the allocation between member States involved so as Spain will be allowed to fish 15390 tons and France 1710 tons.
For the proposal to the Council, the Commission took into account the most recent scientific advice available, which establishes that the stock of anchovy in the area ‘is higher than the secure biological limits’. The European Commission said that anchovy is an specie that may suffer big variations from year to year, due to its short period of life and the fact that its growth depends on certain environmental requirements.
In October, the European Commission adopted an increase of the fishing quota of 1646 tons for the fishing season 2013/14, coming from the excess of quota not fished by Spain in the previous season. Therefore, the total amount of the fishing quota for anchovy fixed for the Basque Country in the Bay of Biscay will be of 15226 tons till the end of June 2014.
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IV.8. EUROPEAN COFINANCE OF THE HIGH SPEED TRAIN IN BISCAY
The European Union announced in February its decision to co-finance with over €12 million from the TEN-T Program three Spanish projects forming part of a new high speed rail line in the Basque country in Biscay:
The first sub-section, 4.60 km between Durango and Amorebieta/Etxano, which includes the construction of five viaducts and three tunnels, will receive EU co- financing of just over €4.1 million,
The second sub-section involves a 5 km rail section between Amorebieta and Bernagoitia and concerns the construction of five viaducts and four tunnels, will receive EU support of nearly €3.3 million,
The final project will receive EU co-financing of €4.8 million and includes the construction of one double viaduct, three viaducts and five tunnels on an 8.8 km rail section between Amorebieta and Galdakao.
The three projects are set to be completed by December 2014.
http://tentea.ec.europa.eu/en/ten-t_projects/ten-t_projects_by_country/spain/2011-es-93094-p.htm http://tentea.ec.europa.eu/en/ten-t_projects/ten-t_projects_by_country/spain/2011-es-93101-p.htm http://tentea.ec.europa.eu/en/ten-t_projects/ten-t_projects_by_country/spain/2011-es-93104-p.htm
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IV.9. THE EUROPEAN COMMISSION REQUIRES SPAIN TO AMMEND INHERITANCE AND GIFT TAX RULES IN ALAVA AND BISCAY
In February the European Commission presented a statement announcing that it had sent to Spain a reasoned opinion requiring the modification of the legislation on the Inheritance and Gift Tax legislation of the historic territories of Alava and Biscay, as it considered that they did not respect ‘the free movement of capitals’ in the European Union.
According to Brussels, both regulations give a preferential tax treatment to the public Debt issued by the local Administration (‘Comunidad Autónoma del País Vasco’, the ‘Diputaciones Forales’ and the local entities within the three historic territories), as in these cases, the Tax Base is reduced by 90% in acquisitions by inheritance or legacy. ‘This tax treatment discriminates against investments in public Debt issued by other member States’, denounced the Commission.
BIZKAIA Decreto Foral Normativo 3/1993, de 22 de junio, por el que se aprueba el Texto Refundido de la Norma Foral 2/1989, de 15 de febrero, del Impuesto sobre sucesiones y donaciones (BOB 6 Julio) Artículo 19. Base liquidable. 1. Las adquisiciones por herencia o legado de cualquier tipo de endeudamiento emitido por la Comunidad Autónoma del País Vasco, las Diputaciones Forales o las Entidades Locales Territoriales de los tres Territorios Históricos, gozarán, en su base imponible, de una reducción del 90 por 100, siempre que hubieran permanecido en el patrimonio del causante durante el plazo mínimo de un año inmediatamente anterior a la fecha de devengo del Impuesto. Del mismo porcentaje de reducción gozarán, siempre que se cumpla el requisito de permanencia establecido en el párrafo anterior: a) Las adquisiciones por herencia o legado de títulos o participaciones de Instituciones de Inversión Colectiva que tengan al menos el 90 por 100 de su activo invertido en los valores a los que se refiere el párrafo anterior. b) Las adquisiciones por herencia o legado de títulos representativos del endeudamiento emitido por los Organismos Autónomos de las Entidades Locales de la Comunidad Autónoma del País Vasco, así como por las Sociedades Mercantiles cuyo capital social pertenezca íntegramente a dichas entidades. De idéntico porcentaje de reducción podrán gozar, siempre que se cumpla el requisito de permanencia establecido en el primer párrafo de este apartado, las emisiones de deuda efectuadas por un Consorcio o cualquier otro Ente en el que la participación en el capital social de las Entidades Locales de la Comunidad Autónoma del País Vasco sea mayoritaria, si así lo acuerda, de forma expresa para cada caso, el Consejo de Gobierno de la Diputación Foral de Bizkaia, previa petición al respecto efectuada con anterioridad a la emisión de que se trate.
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The report mentioned the arguments used by the ‘Diputación Foral de Bizkaia’ in April 2012, when this institution, in answer to the Commission, pointed out that, in its opinion, the mentioned law did not represent an infringement of the free movement of capitals.
Reaffirming this disagreement, in February 2013 the ‘Diputación’ assessed again in a press release that it will not modify the Inheritance and Donation Tax until, in the end, the Court of Justice in Luxembourg might decide that this law violates or not the Community law.
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