Brussels Bulletin No. 519: 14 October 2016

NATIONAL PARLIAMENT OFFICE

HOUSE OF COMMONS

BRUSSELS BULLETIN NO. 519

14 October 2016

Contents Page

EUROPEAN COUNCIL ...... 2 EP DISCUSSES PREPARATIONS FOR NEXT MEETING OF EU HEADS OF STATE AND GOVERNMENT ...... 2 EU40 ...... 5 YOUNG MEMBERS OF PARLIAMENT FORUM TAKES PLACE IN BRUSSELS ...... 5 EMPLOYMENT LAW ...... 9 MEPS AND MPS DISCUSS THE DRAFT POSTING OF WORKERS DIRECTIVE ...... 9 OTHER NEWS ...... 13 UPDATE ON TTIP PROGRESS ...... 13 MEETING DISCUSSES GREECE ...... 13 FINANCIAL TRANSACTION TAX NEARS AGREEMENT ...... 13 COMPROMISE POSITION ON PORTS REGULATION SIGNED OFF BY MEPS ...... 14 EP’S BUDG COMMITTEE AGREES RESOLUTION ON 2017 EU BUDGET ...... 14 MARTIN MCGUINNESS TALKS BREXIT IN BRUSSELS ...... 14 GIBRALTAR’S CHIEF MINISTER CALLS FOR A SPECIAL ARRANGEMENT IN ANY UK-EU DEAL ...... 15 EUROPEAN COURT OF AUDITORS CLEARS 2015 EU ACCOUNTS ...... 15 CALENDAR ...... 16 SLOVAK PRESIDENCY: FORTHCOMING COUNCIL MEETINGS (JULY TO DECEMBER 2016) ...... 16 SLOVAK PRESIDENCY: FORTHCOMING INTER-PARLIAMENTARY MEETINGS IN BRATISLAVA (JULY-DECEMBER 2016) ...... 16 FORTHCOMING INTER-PARLIAMENTARY COMMITTEE MEETINGS (ICMS) IN THE EUROPEAN PARLIAMENT16

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Brussels Bulletin No. 519: 14 October 2016

European Council EP discusses preparations for next meeting of EU Heads of State and Government On Wednesday 5 October, at the EP’s plenary session in Strasbourg, MEPs discussed preparations for the next European Council meeting, scheduled to take place in Brussels on 20- 21 October. The exchange of views was held with representation from the Slovak Council Presidency and officials from the European Commission.

Opening remarks Ivan Korčok, Slovak State Secretary from the Ministry of Foreign and European Affairs, began by outlining the ambitions of the summit and noted that there would be three main items on the agenda: migration; trade; and relations with Russia.

On migration, Korčok stated that the Council meeting would be focused on preventing a return to uncontrolled flows of migrants into the EU, reducing the overall number of migrants making perilous journeys from their respective homelands and strengthening the external border of the Union through securing a durable migration settlement with partner countries. Korčok outlined a twin-track approach to the issue: the first component being to better protect the Union’s external borders through the soon-to-be launched European Border and Coast Guard (EBCG) and the second being to proactively engage with international partners on the root causes behind heightened migration flows. Linked to this, Korčok also said that the Council meeting would provide an opportunity to review implementation to date of the EU-Turkey Agreement.

On trade, Korčok said that there would be a broad political discussion on the future of the EU’s trade policy. Stressing the importance of international trade to future Union prosperity, Korčok emphasised that the EU needed to better use trade as a means of strengthening Europe’s global influence, while also reflecting upon public concerns that had arisen around potential deals with various international partners. Noting that a decision would soon be made on whether to grant “Market Economy Status” to China, Korčok said that the Council meeting would also review the current state of play of the EU-US Transatlantic Trade and Investment Partnership (TTIP) and the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

Lastly, Korčok simply noted that the final item on the European Council agenda would be a strategic political debate on relations with Russia.

Commission President, Jean-Claude Juncker, then followed by expressing his wish for the initiatives outlined in his recent State of the Union address to be adopted by the co-legislators as soon as was reasonably possible.1 He said that his speech had been welcomed by the 27 EU Heads of State and Government that attended the recent informal summit in Bratislava and he outlined his hope that this positive reaction would pave the way for constructive talks at the upcoming European Council meeting. On this note, Juncker said that a roadmap had been adopted by the 27 national representations present in Bratislava, however, he argued that it fell short of his own personal expectations. Juncker reminded MEPs that the Commission’s Work Programme for 2017 had to be agreed upon by the three institutions before the end of 2016. He also emphasised his desire for action to be taken on the programme and, in particular, proposals relating to the completion of a Digital Single Market (DSM) with clear rules and regulations linked to telecommunications and copyright reform.

1 Further details relating to State of the Union 2016 can be found here - http://ec.europa.eu/priorities/state-union-2016_en ______Track national parliament scrutiny at www.ipex.eu 2 Brussels Bulletin No. 519: 14 October 2016

Juncker continued by noting that the “quasi European Council” meeting in Bratislava had agreed that the EU would continue to apply decisions already taken on migration. Specifically, regarding a move to a post-Dublin asylum system, he stated that the EU would need to see if it could reconcile different viewpoints, cautioning against the idea of “flexible solidarity” on the issue. Linked to this, Juncker made reference to the EBCG and highlighted the €108 million of financial assistance that the Commission had given to Bulgaria to help the country strengthen its own borders. For Juncker, both of these actions demonstrated how seriously the Commission took ongoing action in the field of migration. Juncker also touched upon the EU-Turkey Agreement and argued that the accord was “working well” to reduce the flow of migrants entering the EU. Juncker, nonetheless, emphasised that the EU needed to continue playing its part in tackling the root causes of migration flows and he pointed towards investment in Africa as an example of EU projects boosting economic development and prosperity beyond European borders.

Lastly, on trade, Juncker stressed that developing further-reaching deals with international partners was essential to future EU prosperity. Speaking of these benefits, Juncker highlighted how the EU’s free trade deal with South Korea had created over 200,000 jobs; something that he hoped could be replicated in further deals with other trading partners.2 Juncker emphasised the importance of ensuring the CETA deal with Canada entered into force and he spoke of his ongoing negotiations with the Canadian Government to finalise a package that could meet the concerns of Member States. Juncker also spoke of the need to secure consensus among European countries on trade protection instruments and acknowledged a division of opinions that existed between different Member States. It was important, for Juncker that progress be made in all of these fields at the upcoming European Council session.

Debate Although not on the agenda for the upcoming European Council session, Brexit featured prominently in the contribution from (EPP, Germany). Weber acknowledged that, while Theresa May had now provided European decision-makers with a degree of clarity regarding the timing of her intention to trigger Britain’s formal withdrawal process, further clarity was now required from the European institutions themselves. Weber emphasised the inviolability of the EU’s four freedoms and he also criticised the arrogance of the UK Government in recent weeks for its assumption that it would be able to “cherry pick” which parts of EU membership it wanted to keep with little regard for where the European institutions’ collective red lines may be. With respect to Russia, Weber argued that appeasement of Vladimir Putin from international actors had failed and he called on the European Council to take a tougher stance against Moscow by questioning future programmes of cooperation, such as the Nord Stream 2 Pipeline. Gianni Pittella (S&D, ) bemoaned the Bratislava summit as another wasted opportunity for Europe, while also commenting that Theresa May couldn’t have started her relationship with European institutions on a worse note. Indeed, Pittella claimed that the PM had announced her immediate intention for the UK to stop complying with any facets of EU law through her declaration of introducing a Great Repeal Bill designed to end UK legal compatibility with the European Communities Act 1972.

2 Full details of the EU-South Korea Free Trade Agreement can be found here - http://ec.europa.eu/trade/policy/countries-and-regions/countries/south-korea/ ______Track national parliament scrutiny at www.ipex.eu

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Syed Kamall (ECR, UK) took issue with Pittella’s comments on the UK Government’s intentions regarding a future repeal of EU legislation, however, he did agree that the recent informal summit in Bratislava had been a wasted opportunity for the EU to show that it was focused on providing real solutions to the concerns of its citizens. Kamall claimed that the Bratislava meeting showed that EU leaders were simply intent on ploughing on with the same policies that had so far failed to deliver; a case of “unsuccessful business as usual.” He also expressed his hope that the Council meeting would result in action on a more rigorous migration policy, further reduction in red tape and a display of fortitude against Russia. Guy Verhofstadt (ALDE, Belgium) urged the forthcoming Council meeting to take decisive action in Syria as, for him, this would be the most effective means of tackling the migration crisis at source. Another priority, for him, was the continuing problems in the European financial sector. He contended that these challenges demonstrated the need for a fully-fledged Banking Union and for stronger mechanisms of economic governance across Europe. Finally, on Brexit, Verhofstadt (who was recently appointed the EP’s lead negotiator in negotiations with the UK) said that the Council should discuss and respond to Theresa May’s announcement that Article 50 would be triggered by the end of March 2017. For him, the EU needed to convey four key messages: that there could be no pre-negotiations; that Article 50 talks had to be completed by the next European elections in May 2019; that the new relationship between the UK and the EU ought to be a close one (not least for the 48% of Brits who had voted to remain); and that the relationship could not, under any circumstances, include a derogation from the EU’s four fundamental freedoms.

Gabrielle Zimmer (GUE/NGL, Germany) said that the EU was simply facing its latest in a long list of crises that currently included migration, Brexit and social disharmony across Europe. She said that next year’s 60th anniversary of the Treaty of Rome entering into force should act as a real litmus test for where the EU could finally begin to deliver against the challenges faced by EU citizens in all 28 Member States. Philippe Lamberts (Greens/EFA, Belgium) criticised the rise of populism across Europe and suggested that those people supporting such forces were wrong if they thought that short-term fixes to long-term problems were realistic. He also claimed that completing the internal market should be the EU’s pressing economic priority and not, instead, that of completing separate trade deals with the US and Canada. David Borelli (EFDD, Italy) warned that continued mishandling of the migration crisis had the potential to be terminally destructive for the EU. He said that leaders had to show courage, balance and speed in handing the situation and that, if they didn’t, then collective citizens’ concerns would simply continue to rise. Lastly, Marine Le Pen (ENF, France) claimed that EU leaders were out of touch with their populations and “totally disconnected” from reality. She cited the EU’s desire to impose migration quotas on independent, sovereign Member States as the latest example of Brussels not being able to take “no” for an answer. Le Pen outlined her hope that France would not only hold its own referendum on refugee quotas in the near future, but also seize the opportunity to carry out a Brexit of its own.

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EU40 Young Members of Parliament Forum takes place in Brussels On Tuesday 11-Wednesday 12 October, the “Young Members of Parliament Forum 2016” took place at the EP in Brussels. Organised by EU40, the network of young Members of the , the Conference brought together 45 Members aged 40 and below from the national Parliaments of 15 Member States.3 The overall theme of this year’s Forum was “The EU’s Transatlantic Cooperation in light of Brexit” with Trade, Security and Defence and Data Protection being at the centre of the discussion. The Forum comprised individual briefing sessions with a range of high-ranking EU decision-makers and, in light of these, Members also tabled a Joint Resolution, which, in due course, will be published and sent to the three main European institutions to help shape their respective legislative agendas over the coming 12 months. No UK MPs attended the Conference.

Tuesday 11 October The Conference was opened by EP President, , who welcomed the EU40 initiative as the “optimum forum” for the young generation of European policy-makers to make their voices heard. He said that to dismiss the concerns of Europe’s youth was “irresponsible” and he suggested that never before had it been more important to “bring young people on board” with what the EU was trying to do. With respect to Brexit, Schulz acknowledged that the EU would unquestionably be weaker without the UK’s membership. The Union was losing a G7 country, Europe’s second-biggest economy, a nuclear power and a nation whose language “we all now got used to working in”. Schulz noted, however, that, while the EU would lose some of its influence due to Brexit, the UK would also be adversely affected. He argued that the UK was where it was in today’s world largely due to its membership of the EU. Schulz said that being part of the world’s biggest single trading bloc and having access to 500 million consumers had helped put the “great” in “Great Britain” over recent years. Schulz was clear: the British people had spoken and the result of the Referendum ought to be respected. He voiced his opinion that the British Government was “in no way prepared” for the outcome of the vote and said that there were now innumerable complications that had to be dealt with. For Schulz, the EU had been as flexible as it possibly could by offering former Prime Minister, David Cameron, a bespoke deal on continued British EU membership in February and, therefore, dismissed the notion that “Brussels” had been “harsh” on the UK at any time during recent months. He said that, in fact, it was the British electorate that had been “harsh” in rejecting this settlement in June and noted that this should not be forgotten in the complex negotiations that were to come. Schulz said that, with respect to transatlantic relations, it was unclear quite what impact Brexit would have on the completed Comprehensive Economic Trade Agreement (CETA) with Canada and ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations with the US. He did, however, suggest that cultivating a strong relationship with the EU could well focus American minds more than maintaining an historical connection with the UK. For Schulz, the EU would endure under any circumstances. The future for the UK, however, was less clear.

Following the address from President Schulz, a further exchange of views took place between MEP political group leaders, Manfred Weber (EPP, Germany) and Gianni Pittella (S&D, Italy). Weber began by noting that the February settlement offered to David Cameron was both “fair and far-reaching”. In his view, the deal highlighted the extent to which other EU Member

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States had wanted the UK to stay and he argued that, any suggestions to the contrary, were simply unfair. Weber acknowledged that, since June, the EU institutions had been “more proactive” in seeking a swift triggering of Article 50. This was, however, not a means of “punishing” the UK, but simply respecting the will of the British electorate. Weber warned, however, that “cherry-picking for the Brits” was now over and that, linked to this, there would be no deviation from the EU’s four fundamental freedoms throughout the negotiations to come. Weber also argued that support for Union membership had actually increased in many Member States since the British vote, as it became clearer how “complex” a process leaving the EU really was. He said that, while other countries had been “put off” the idea of replicating their own Brexit, leading EU decision-makers still had a responsibility to show the added value that EU membership brought. Pittella went further than Weber in his criticism of Brexit and said that we were now looking at a “dis-united United Kingdom”. He cited both a “disaffected” Northern Ireland and, in particular, a Scotland “really wanting independence” as two component countries that were exploring “other paths”. Pittella voiced his hope for mutually- beneficial withdrawal discussions but emphasised his belief that EU negotiators would not, under any circumstances, compromise on the Union’s four principle freedoms. Pittella also suggested that two central reasons for the Brexit vote were, firstly, people making the “mistake” of voting with their stomach and not their head and, secondly, that those in decision- making roles had failed to “translate” the benefits of globalisation to citizens across the EU.

After the exchange of views, young MPs heard from Cecilia Malmström (EU Commissioner for Trade) on the potential benefits that her policy portfolio could deliver in a Transatlantic setting. Malmström began by underlining the value of trade and emphasised that its need, in light of current political crises, had never been greater. When considering Brexit, Malmström said that it was important for the EU to appear “outward-looking” and “global” in the business it did with international partners. She acknowledged that coordinating trade policy on behalf of 28 Member States brought complications, but cited both the CETA deal with Canada and ongoing TTIP negotiations with the US as proof of the progress made by EU countries in this field. Malmström noted that the CETA deal had now been agreed between EU and Canadian negotiators and stated that, all being well, this would be confirmed by EU Trade Ministers at a Council meeting in Brussels on 18 October. It was her understanding that, subsequent to this, the agreement would be formally signed and adopted during a state visit to Brussels by Canadian Prime Minister, Justin Trudeau, on 27 October. On TTIP, Malmström said that plenty of progress had been made, but admitted that a deal would not now be completed before the end of 2016. She acknowledged that the negotiations faced a number of current challenges, but said that talks had “only” been taking place for three years; two full years short of the “average” length of time it had taken to agree other, smaller, international trade agreements in recent years. Malmström paid tribute to the transparency of ongoing TTIP talks and emphasised that the websites of both the Commission and US Trade Representation contained “extensive” information relating to the talks.4 At this stage, she could not speculate on the precise impact that Brexit would have on either trade deal.

Following this address, MPs heard from Dr Jamie Shea (Deputy Assistant Secretary-General for Emerging Security Challenges, NATO). Shea’s over-arching view on Brexit was that the decision taken in June by the UK electorate would make both Britain and the EU weaker and “potentially” less secure. He did, however, add that the likelihood of this happening depended

4 Details of the Commission’s TTIP webpage can be found here - http://ec.europa.eu/trade/policy/in- focus/ttip/ and details of the US Trade Representation’s TTIP webpage can be found here - https://ustr.gov/ttip ______Track national parliament scrutiny at www.ipex.eu 6 Brussels Bulletin No. 519: 14 October 2016

a lot on future NATO evolution and its relationship with both the UK and those remaining Member States that either were already NATO members or happened to join the bloc in the years to come. Shea outlined his belief that the UK would continue to be a strong component part of many NATO operations and he went further by suggesting that the UK was NATO’s “gold standard” EU member. He said that in terms of military contributions and through meeting the NATO commitment of spending 2% of national GDP on defence, the UK had proved itself to be a “strong team player” when it came to safeguarding collective security. Furthermore, in the years to come, British “might and influence” would be important components of a successful strategy in managing Russia and countering extremism across Europe. Shea closed by noting that, while the UK had been the most sceptical Member State when it came to pooling EU defence resources, its commitment to NATO could not be called into question. For him, Britain would continue to “lead from the front” within the NATO family for many years to come.

Wednesday 12 October On Wednesday, Members held briefing sessions with both the US Ambassador to the , Anthony Gardner, and Canada’s Ambassador to the EU, Daniel Costello. Gardner began by underlining his belief in the “power” of a strong EU/US relationship. He said that in a number of fields - including trade, development, climate action and security - the two parties together could play a leading role in the creation and maintenance of a more stable, more prosperous and more democratic western world. Gardner added that he was “feeling good” about current Transatlantic relations and he outlined sanctions against Russia, the Paris Agreement on Climate Change and the recent establishment of the EU-US Privacy Shield arrangement as just three examples for his optimism. On trade, Gardner acknowledged that TTIP faced challenges “on both sides of the Pond”, but he was steadfast in his belief that progress was being made. On Brexit, Gardner said that the US was keeping a “very close eye” on how future EU relations with the UK developed. His view was that the US administration had spoken out “appropriately” in the run up to June’s vote but that now the will of the British electorate had to be respected. Gardner outlined the US hope that the UK would remain “tightly integrated” with its European neighbours on a raft of policy portfolios and he warned against the “march towards a hard Brexit”. Gardner also cited recent “un-Japanese” Japanese warnings on their potential reaction to Brexit as another clear example of how Britain’s international partners were keeping a watching brief. Gardner said that US officials were very interested to see what deal the UK struck with the EU and that, only after leaving, could Washington and London begin to negotiate future bilateral relations. He drew a subtle, yet substantial, difference between “discussion and negotiation”, however, and suggested that “it would be natural” for some elementary talks between the two countries to take place between now and Britain formally leaving the EU. On the prospect of a bilateral US/UK trade deal being struck in due course, Gardner said that both countries were “philosophically linked” and that, in many ways, negotiations on that potential deal would be “easier” than they had been with TTIP to date. Costello began by noting that, while not an EU Member State, Canada was one of the Union’s closest strategic partners. He said that the two parties shared many of the same roots, values, and ambitions for the future. To this end, Costello could not see a better way of strengthening this link than by the ratification of the CETA trade deal. In his view, the benefits were clear: not only would the Agreement boost the value of EU/Canada trade by 20%, but it would also create up to 11.5 million jobs on both sides of the Atlantic. Furthermore, in the fields of energy, climate change and respect for international law, Costello said that the EU had, in Canada, its closest partner. Specifically on Brexit, Costello noted that Canada was ______Track national parliament scrutiny at www.ipex.eu

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“standing and waiting” to see how Britain’s withdrawal negotiations with the EU developed before making any “substantive call” on how his country and the UK would develop their own bilateral ties. For him, it was still unclear precisely what Brexit meant and, until this became more explicit, Canada would continue to treat Britain as a fully-fledged EU Member State. Costello did, however, add that, due to close links in “history and heritage, language and law”, he very much believed that Canada would want to have the closest possible ties with the UK in the years to come.

Conclusion Following the conclusion of these sessions, MEP Victor Negrescu (S&D, Romania), in his capacity as Chairperson of the EU40 Board, thanked national delegations for their participation and presented a final text of the Forum’s Resolution. In due course, this would be published and sent to leaders of the three main EU institutions with the ambition of shaping their legislative work over the coming 12 months. Negrescu said that it was his hope that the EU40 Young Members of Parliament Forum - now in only its second year - would become an annual event and voiced an intention to hold the next edition of the Conference in autumn 2017.

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Employment Law MEPs and MPs discuss the draft Posting of Workers Directive On Wednesday 12 October, the EP’s Committee on Employment and Social Affairs (EMPL) held an Interparliamentary Committee Meeting on a targeted revision of the rules on the Posting of Workers. The meeting was attended by both EMPL MEPs and national Parliamentarians. There was no representation from the House of Commons or House of Lords.

Background On 8 March 2016, the Commission came with a proposal to amend the 1996 Directive on the posting of workers in the framework of the provision of services. The aim of the new proposal is to address unfair practices and promote the principle that the same work at the same place should be remunerated in the same manner. 14 Chambers from 11 different Member States issued Reasoned Opinions on the proposals; enough to trigger the “Yellow Card” procedure.5 On 20 July, the Commission concluded that the proposal did not breach the subsidiarity principle and it therefore decided to maintain the proposal unchanged. It is now up to Member States and the EP to reach agreement on the dossier. The EMPL Committee has appointed Elisabeth Morin-Chartier (EPP, France) and (S&D, the ) as co-rapporteurs on the file. A first discussion would take place on 8 November, with the draft report expected to be presented on 29 November before a vote in the new year. The EP’s Policy Department for Economic and Scientific Policy has also produced a study on the Directive, following a request from the EMPL Committee.6

Opening remarks Thomas Händel (GUE/NGL, Germany), Chair of the EMPL Committee, opened the meeting. In his view, the posting of workers was one of the key issues facing the EU and this remained unchanged since the UK’s referendum on EU membership.

Presentation of the proposal Before recalling the key points of the Commission’s proposal, Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Labour Mobility, began by noting that she had previously discussed the draft Directive with MEPs (both in plenary and in Committee), and with MPs (both bilaterally and at the July meeting of COSAC Chairs in Bratislava). That said, she thought it was beneficial for MEPs and MPs to discuss such an important dossier together. She then went on to outline the key points of the proposal: • the same rules on remuneration would apply for the same work at the same location. Posted workers were not second-class workers, and, for Thyssen, this was a matter of dignity. The Commission proposed to substitute "minimum rates of pay" in the existing Directive by the broader, more general concept of "remuneration", which would also include bonuses and allowances;

5 The Bulgarian National Assembly, Croatian Parliament, Czech Senate, Czech Chamber of Deputies, Danish Parliament, Estonian Parliament, Hungarian National Assembly, Latvian Saeima, Lithuanian Seimas, Polish Senate, Polish Sejm, Romanian Senate, Romanian Chamber of Deputies and Slovak Parliament issued Reasoned Opinions. 6 The study is available at http://www.europarl.europa.eu/RegData/etudes/STUD/2016/579001/IPOL_STU(2016)579001_EN.pdf ______Track national parliament scrutiny at www.ipex.eu

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• workers posted for longer than 24 months would become subject to the labour law of the host country. This would align the Directive to the provisions of the Regulation on social security coordination; • rules applying to temporary agency work would also become applicable to cross-border temporary agency work; and • it would be possible for Member States to provide better protection for posted workers in sub-contracting chains. Thyssen emphasised that the Commission was not proposing to widen the scope of the Directive to workers in the international road transport sector, noting that the Directive already applied to them. She said that she was aware of particular challenges in the application and enforcement of rules, and that the Commission planned to come forward with a tailored provision in the context of the Road Transport Package.

Thyssen then turned to the issue of subsidiarity and the “yellow card”. She said that the Commission had engaged with national Parliaments and taken the opinions raised seriously. The arguments put forward had been carefully considered, but the Commission’s analysis had led it to maintain the proposal. The Commission Communication of 20 July and bilateral replies to Parliaments explained the reasons why: (1) posting was, by definition, of a cross-border nature; and the EU was the best placed to act; (2) rules on remuneration remained a Member State competence. The proposal fully respected this; it did not seek to harmonise wages but to ensure that mandatory rules on remuneration in Member States would apply to local workers and posted workers alike; and (3) concern that the proposal would restrict freedom to provide services by diminishing the competitive advantage of lower-wage countries was not linked to the principle of subsidiarity.

First reactions by Ľuboš Blaha, Chair of the European Affairs Committee of the National Council of the Slovak Republic; and Elisabeth Morin-Chartier (EPP, France) and Agnes Jongerius (S&D, the Netherlands), EMPL co-rapporteurs on the file Blaha said that, as a “radical socialist”, he was happy that the Commissioner was trying to do her best for a social Europe. However, he also came from a poor country, which was in a different situation than, for example, Belgium or Germany. In Slovakia, a typical worker earned €500 per month; in Belgium a typical worker earned €5000 per month. Although Blaha agreed “philosophically” with the proposal, in his view the consequences would be positive for some countries (the richer, more Western countries) and negative for others (the poorer and Eastern countries). This was the reason why Slovakia had issued a Reasoned Opinion. He called for a greater fight against exploitation and misuse of the labour market. In conclusion, Blaha said he was not a fan of the “yellow card” system, but he did note that, to date, three had been issued. With all three, the Commission maintained that the subsidiarity principle had not been breached, but this was the first time that the Commission were going ahead with the proposal unamended.

Elisabeth Morin-Chartier (EPP, France) welcomed the meeting as an opportunity to learn more about the views from across Member States, as well as a forum to share information. She called for a balanced solution, where posted workers, local workers and businesses could all benefit. For Agnes Jongerius (S&D, the Netherlands), it was important that the meeting did not focus on the Reasoned Opinions and the arguments behind them. The Commission had responded to the “yellow card” and it was now for the EP to work towards a common position. Jongerius said that she was working towards a strong majority in favour of the proposal; both in the EP and across Europe. In her view, the proposal was an important one because it

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concerned social Europe. She called for legal changes to ensure that the Directive was not working as a “lowest common denominator” or a “race to the bottom”. Jongerius disagreed that the Directive was a split between East and West, and said that to end the divide between rich and poor, it was necessary to end the current unequal treatment of workers.

Reactions by national Parliamentarians and MEPs - exchange of views The subsequent debate saw comments from both those in favour of and those against the proposal, reflecting the Reasoned Opinions issued.

María del Rocío De Frutos Madrazo (Committee on Employment and Social Security, Spanish Congress of Deputies) said that Spain was in favour of both the original Directive and its revision; indeed, Spain already guaranteed a minimum wage to posted workers. Carla Barros (Committee on Labour and Social Security, Portugal) noted that Portugal was fourth on the list of countries posting workers abroad. In her view, action on the issue could only be carried out on a European level, and she called for the involvement of trade unions and employer organisations. Frank Köhler (Committee on Social Affairs and Employment, Dutch Senate) said the proposal was a step in the right direction, but he expressed concern over social security legislation. Jeroen Lenaers MEP (EPP, the Netherlands) also supported the proposal. Anoushka Schut-Welkzijn (Committee on Social Affairs and Employment, Dutch House of Representatives) said the proposal was a priority for the Dutch House of Representatives. Although the House was in favour of the proposal, she noted that any objections should not be taken lightly. Guillaume Balas MEP (S&D, France) said it was important to move forward. The current situation saw a brain drain in Latvia, Polish workers being replaced by non-EU workers, and workers in Western Europe fearing for their jobs. Whilst the proposal was not perfect and required amendment, it was crucial not to stop halfway. Ali Esbati (Committee on the Labour Market, Sweden) noted that the proposal would relieve downward pressure on wages and job security and foster competition based on other things; for him, this was a small step in the right direction. José Mª Barrios Tejero (Committee on Employment and Social Security, Spain) said that the objective was laudable. It was a significant challenge, but unfair practices had to be challenged. Finn Sørensen (Committee on European Affairs, Danish Folketing) said the Commission had not understood the situation in Denmark. The principle of equal pay for equal work already existed and applied to posted workers. The proposed Directive would open the door to wage competition. He described the Commission proposal as a “retrograde step” as it created a lack of clarity.

Vitālijs Orlovs (Committee on Social and Employment Matters, Latvian Saeima) criticised the social dumping rhetoric, which he said put blame on the people of Eastern Europe. He called for the implementation of existing legislation rather than an amending Directive. In his view, this proposal was a striking example of overregulation. Several others called for full implementation of the 2014 Enforcement Directive and time to assess whether it was fit for purpose, including Michaela Šojdrová MEP (EPP, Czech Republic), Ádám Kósa MEP (EPP, Hungary) and Jiří Šesták (Committee on Education, Science, Culture, Human Rights and Petitions, Czech Senate. István Hollik (Committee on European Affairs, Hungarian National Assembly) said that Hungary was not in favour of the proposal. He noted that salary levels were hugely disparate across Member States, a situation that proved favourable to western countries. Mečislovas Zasčiurinskas (Committee on European Affairs, Lithuanian Seimas) echoed these remarks, noting that the Lithuanian Parliament also did not support the Commission’s proposal. Jan Mosiński (Committee on European Union Affairs, Polish Sejm) ______Track national parliament scrutiny at www.ipex.eu

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said that the Commission had used the consultation on social security as the basis to amend the Directive on the posting of workers and that there had not been an EU-wide consultation on remuneration. In his view, the Commission was seeking to create a “new wall” in Europe; the prosperous countries of the west were trying to wall themselves off from the less wealthy countries of the east. Dorin Silviu Petrea (Committee on European Affairs, Romanian Chamber of Deputies) also felt that the Commission was creating an artificial border between western countries and eastern countries. Czesław Hoc (ECR, Poland) noted that 14 Chambers from 11 Member States had issued a Reasoned Opinion; instead of stopping and offering an alternative or seeking a compromise, the Commission had ignored those Member States. For him, that did not contribute to solidarity across Europe, and he further stated that the proposal would destabilise Europe. Helena Langšádlová (Vice-Chair, Committee on European Affairs, Czech Chamber of Deputies) said that the answers to the Reasoned Opinion from the Commission did not address the substance of the arguments. In her view, that approach was unfortunate and created a degree of mistrust.

Martina Dlabajová MEP (ALDE, Czech Republic) wondered if the “yellow card” was a useful tool. She also expressed difficulties over the term remuneration as opposed to pay. Finally, she said that it was still not clear which sectors would be affected by the Directive. Anthea McIntyre MEP (ECR, UK) noted that posted workers accounted for less than 1% of the EU workforce. She said that the Directive could be used to advance the cause of equal pay for all work everywhere, something she warned against. Gilles Savary (Committee on European Affairs, French National Assembly) noted that some French Presidential Candidates were advocating a ban on posted workers. In his opinion, it was not the normal posting of workers that had created the problems but the exploitation of workers. Nikolaos Manios (Chair, Standing Committee on Social Affairs, Greek Parliament) focused his remarks on the social rights of workers in the EU. He noted that the level of social protection of workers was not the same amongst Member States, and that this was unfair. He called for action to tackle social dumping, close legal loopholes, and to create a minimum single wage at EU level. Danuta Jazłowiecka MEP (EPP, Poland) said the Commission had not recognised the magnitude of the problem of social dumping. It was unfair that such a small group of workers was being accused of creating turmoil in labour markets, and he noted that posted workers were becoming easy targets for populists.

Concluding remarks In conclusion, Thyssen said that the EU required a much more “social face”. The Commission wanted to construct a social economy, but also advance on social progress, and she stressed that the two were not mutually exclusive. The question of posted workers was a “major challenge”. Thyssen said that the Commission would be conducting a review of the “social acquis” in the Union, looking at issues such as labour law and social law and the way it was applied across the EU. Jongerious called for the Enforcement Directive to be transposed in all Member States. She noted that she and Morin-Chartier had written to the Slovak Presidency, calling on those countries who had not transposed the Enforcement Directive to fully implement it.

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Other News

Update on TTIP progress The 15th round of TTIP talks took place in New York between 3 and 7 October. Following the talks, Ignacio Garcia Bercero, the EU’s Chief Negotiator for TTIP, gave a press conference. Bercero said that the 15th round had focused on consolidating texts and removing differences in the existing proposals. He noted that there had been significant progress made in a number of areas. The next meeting of EU Trade Ministers was scheduled for 11 November, but before that the European Council summit of 20-21 October would also be an opportunity for Heads of State and Government to discuss trade issues.7 EU Trade Ministers concluded at their September meeting that an agreement by the end of 2016 was unrealistic. It is understood that talks will be pursued until January 2017, after which a “natural pause” would occur as the Obama administration leaves the White House. Obama’s successor would most likely require several months to put a team of negotiators in place, and there has been speculation that the talks would be most likely to resume in late 2017.

Eurogroup meeting discusses Greece On Monday 10 October, Eurozone Finance Ministers met to discuss Greece, long-term healthcare and care (as one of the thematic discussions on growth and jobs), and current fiscal issues.8 The Eurogroup agreed that the implementation of 15 “milestones” by Greece as part of its economic adjustment programme allowed the European Stability Mechanism (ESM) to approve €1.1 billion for Greece's debt servicing.

Financial Transaction Tax nears agreement On Monday 10 October, following the first day of the October ECOFIN Council, , European Commissioner for Economic and Financial Affairs, Taxation and Customs, tweeted that:

...the ten participating Member States have tonight made excellent progress on the Financial Transaction Tax and agreed on the four basic features which will form the backbone of the tax. A final agreement has never been closer. My services, together with the technical group of the participating countries, will now draft a legal text on which we’ll be seeking political agreement over the next weeks.

The Financial Transaction Tax (FTT) was originally proposed by the Commission in September 2011. In mid-2012, EU Finance Ministers concluded that there would be unanimous agreement between Member States, but a group of 11 countries (Austria, Belgium, Estonia, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia, and Spain) decided to go ahead with the FTT. Following agreement from the EP and Council for this to happen, in February 2013 the Commission came forward with a proposal for “enhanced cooperation” between the 11 Member States. The proposal mirrored the scope and objectives of the original FTT proposal. Since then, discussions have been ongoing, and in December 2015, 10 of the 11 issued a statement on the FTT, with Estonia not signing. The statement noted that the 10 countries had reached agreement on what features the tax should have, but also noted that discussions would continue over the coming months to finalise the details.

7 The full remarks are available at http://trade.ec.europa.eu/doclib/press/index.cfm?id=1553 8 See Council press release at http://www.consilium.europa.eu/en/meetings/eurogroup/2016/10/10/ ______Track national parliament scrutiny at www.ipex.eu

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Brussels Bulletin No. 519: 14 October 2016

Compromise position on Ports Regulation signed off by MEPs On Tuesday 11 October, MEPs on the EP’s Transport and Tourism Committee (TRAN) approved the agreement reached between EP and Council negotiators on the Port Services Regulation. 38 MEPs voted in favour, with 8 against and 1 abstention. The informal agreement between the EP and Council was reached on 27 June, under the Dutch Presidency.9 The final stage of the process is approval by Member States.

EP’s BUDG Committee agrees resolution on 2017 EU budget On Tuesday 11 October, the EP’s Committee on Budgets (BUDG) voted on a resolution setting out its position on the 2017 EU budget.10 The Committee had previously agreed on its amendments to the Commission’s proposed budget for next year at the end of September.11 The draft resolution was approved by 29 votes to 7, with 1 abstention. The whole plenary is expected to vote on the Committee’s position on Wednesday 26 October in Strasbourg, after which talks with the Council will begin.

Martin McGuinness talks Brexit in Brussels On Tuesday 11 October, Northern Ireland Deputy First Minister Martin McGuinness travelled to Brussels to discuss the result of the UK referendum on EU membership. As well as meeting with Manfred Weber (EPP Group Leader), Gianni Pittella (S&D Group Leader) and Guy Verhofstadt (ALDE Group Leader and Chief EP Negotiator), McGuinness held a political discussion on Brexit. He began by stating that Sinn Féin was exorcised by what the UK Government had done. In his view, calling the referendum had been a huge mistake and the result had created a damaging situation. He said that the United Kingdom was far from united, as had been shown by Northern Ireland and Scotland voting to remain. Turning specifically to Northern Ireland, McGuinness said that the Good Friday Agreement had been about ending divisions, but that Brexit was a “hammer blow” to the reconciliation work done. There would be political, social and economic implications for the whole island of Ireland. UK PM Theresa May had been clear that the UK was facing a hard Brexit, and this would most likely mean a hard UK-Ireland border. In McGuinness’ view, this could encourage armed groups. He noted that he and Northern Ireland First Minister Arlene Foster had written to Theresa May following the referendum result, outlining areas of concern including a hard border. McGuinness also welcomed a recent statement from DUP MP Sir Jeffrey Donaldson calling for the island of Ireland to be treated as a special case. McGuinness then answered questions from those in attendance. In response to a question about EU funding, McGuinness said that the EU had played a massive role in assisting the peace process and he was concerned about losing support. He noted that Northern Ireland was still a society recovering from conflict. Answering a question on the Commission’s Northern Ireland Task Force, McGuinness said that officials from Northern Ireland met regularly with the Commission’s Task Force but that its work was now in doubt. Matt Carthy MEP (GUE/NGL, Ireland) said that he had noticed an increased understanding of the situation for the island of Ireland in the EU institutions since the referendum result. The issues that had been mentioned before the Scottish independence referendum were the same, with the addition of the border issue and the fact that

9 A note setting out a summary is available here: http://eur-lex.europa.eu/legal- content/EN/TXT/PDF/?uri=CONSIL:ST_10579_2016_REV_1&from=EN 10 The resolution is available at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=- %2f%2fEP%2f%2fNONSGML%2bCOMPARL%2bPE- 589.175%2b02%2bDOC%2bPDF%2bV0%2f%2fEN 11 See Brussels Bulletin No. 518 ______Track national parliament scrutiny at www.ipex.eu 14 Brussels Bulletin No. 519: 14 October 2016

all Northern Irish citizens were entitled to be Irish citizens and therefore EU citizens as well. In his view, the island of Ireland had more to lose from Brexit than Britain. McGuinness concluded by stating that the UK Government would enter upcoming negotiations “without an iota of concern” for the island of Ireland, and he called on the EP to send a clear message recognising the unique situation for Ireland as a whole.

Gibraltar’s Chief Minister calls for a special arrangement in any UK-EU deal On Wednesday 12 October, the Chief Minister of Gibraltar, Fabian Picardo, spoke at event in Brussels organised by communications consultancy APCO and reported on by EU-focused publication Euractiv.12 At the event, Picardo emphasised that 96% of Gibraltarians had voted to remain in the EU in the 23 June referendum, with an 84% turnout. He also noted that in 1972, when Gibraltar negotiated its terms of access with the UK into the EU, a special arrangement was agreed upon whereby Gibraltar did not join the free movement of goods but did apply the other three freedoms. This arrangement still exists today, although Picardo said it could be reconsidered in upcoming negotiations, stating that “when Gibraltar comes to the table through the United Kingdom, what Gibraltar will say is: we accept the four freedoms.” For Picardo, a way forward in future could be a special arrangement, allowing Gibraltar to participate in the freedoms without calling itself a member, similar to Andorra, Liechtenstein, San Marino and other territories. Picardo was also due to appear before the EP’s Constitutional Affairs Committee (AFCO), but this was cancelled at short notice. The session will be re- scheduled.

European Court of Auditors clears 2015 EU accounts On Thursday 13 October, the European Court of Auditors (ECA) signed off the European Union’s 2015 accounts.13 The ECA estimated the level of error of expenditure at 3.8%, compared with 4.4% in 2014. The level of error is not a measure of fraud; rather an estimate of the money that should not have been paid out because it was not used fully in accordance with EU rules. Member States manage 80% of the EU budget, and in 2015 the Commission launched a website providing information about how the EU budget is spent.14

12 The full Euractiv report is available at https://www.euractiv.com/section/uk-europe/news/gibraltar- wants-special-arrangement-in-brexit-treaty/ 13 See Commission press release at http://europa.eu/rapid/press-release_IP-16-3343_en.htm 14 The website is available at http://ec.europa.eu/budget/euprojects/search-projects_en ______Track national parliament scrutiny at www.ipex.eu

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Brussels Bulletin No. 519: 14 October 2016

Calendar Slovak Presidency: forthcoming Council meetings (July to December 2016) 17 October: Environment 17 October: Foreign Affairs Council 18 October: General Affairs Council 20-21 October: European Council 8 November: ECOFIN 11 November: Foreign Affairs Council 14-15 November: Agriculture and Fisheries 14-15 November: Foreign Affairs Council 15-16 November: General Affairs Council 16 November: ECOFIN 21-22 November: Education, Youth, Culture and Sports 28 November: Foreign Affairs Council 28-29 November: Competitiveness 1-2 December: Transport, Telecommunications and Energy 5 December: Transport, Telecommunications and Energy 6 December: ECOFIN 8-9 December: Justice and Home Affairs 8-9 December: Employment, Social Policy, Health and Consumer Affairs 12 December: Foreign Affairs Council 12-13 December: Agriculture and Fisheries 13 December: General Affairs Council 15-16 December: European Council 19 December: Environment

Slovak Presidency: forthcoming inter-parliamentary meetings in Bratislava (July-December 2016)

16-18 October: Inter-parliamentary Conference on Stability, Economic Coordination and Governance in the European Union

13-15 November: COSAC Plenary Meeting

19-20 April: Meeting of the Chairpersons of the Committees on Energy Union

Forthcoming inter-parliamentary Committee meetings (ICMs) in the European Parliament

17 October: Workshop: “Robotics and Artificial Intelligence” (organised by the EP's Legal Affairs Committee)

7-8 November: ICM: “State of play of the Common Foreign and Security Policy” (organised by the EP's Foreign Affairs Committee)

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8 November: ICM: “Towards better spending in shared management: a more cooperative model of parliamentary scrutiny” (organised by the EP's Budgetary Control Committee)

28 November: ICM: “Europol and its parliamentary scrutiny in the framework of the EU Internal Security policies” (organised by the EP’s Civil Liberties, Justice and Home Affairs Committee)

29 November: ICM: “Future institutional evolution of the Union” (organised by the EP’s Constitutional Affairs Committee)

Alison Groves [email protected]; [email protected] Fraser McIntosh [email protected]; [email protected]

House of Commons, UK National Parliament Office, Brussels

00 32 2 284 3703/4656 (Brussels) (#6 24 3703/4656 from Westminster) 00 33 3 88 17 6846/6842 (Strasbourg) (#6 23 6846/6842 from Westminster)

Mobile: 00 32 486 646948 / 0032 486 646949

Website: www.parliament.uk/npo

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