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Home , Andrew McDowell, Brian Leddin, Cathal Berry, Francis Noel Duffy, Marian Harkin, Neale Richmond

Issue 15 | Autumn 2020

Ireland navigates COVID-19 and US Presidential election – what the outcome means for Irish business A profile of Commissioner for Financial Services Mairead McGuinness Alastair Blair of Accenture becomes Ibec President In this issue…

From the editor...... 3 COVID-19...... 5 Future EU-UK relations...... 7 Ireland – new committees...... 11 General EU affairs...... 12 Global Trade and International Affairs...... 16 Ibec Member in Focus – Accenture...... 18 Profiles – Commissioner for Financial Services Mairead McGuinness and Commissioner for Trade Valdis Dombrovskis...... 19 EU Member States Overview...... 22 Sectoral Update...... 24 From our Policy Desks...... 26 Ibec Europe Events and Activities...... 27

2 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 From the Editor

Pat Ivory Director of EU & International Affairs Phone: +353 1 605 15 71 Email: [email protected]

Europe deals with COVID-19 while preparing for end of Brexit transition period and Joe Biden is elected U.S. President Welcome to the fifteenth edition of Ibec Europe & standards), fisheries, and governance, including dispute Global Focus. As we publish this edition, Ireland, settlement mechanisms, persist, with the necessary along with most of Europe, is in a Level 5 ‘lockdown’ compromises still to emerge to enable a deal to be in response to a second wave of COVID-19, with reached. We examine the challenges of the Internal business and society facing restrictions similar to those Market Bill and how it impacts on the Northern experienced earlier this year. While the restrictions Ireland Protocol. Lastly, we provide a trade and appear to be lowering cases of the virus, business – in customs to do list to get your business Brexit ready. particular retail and hospitality - face into an uncertain On general EU Affairs, we analyse the European Christmas trading period. The announcement of Commission’s ‘State of the Union’ and the progress on developing and producing vaccines for Commission’s 2021 Work Programme. Commission COVID-19 provides some positive news as we look President von der Leyen’s speech formed the basis of forward to 2021. this programme’s agenda, focusing on green, digital, While the world grapples with the second wave, the health and economy related proposals. We discuss the outcome of the U.S. Presidential election, held on 3 two October European Council meetings. The first November, has become clear. Former Vice-President covering COVID-19, the single market, industrial and 2020 Democratic nominee Joe Biden defeated policy, and the digital transition. The second including incumbent Republican U.S. President Donald the progression of the second wave of COVID-19, Trump and in an historic victory, won more than 270 future relations with the UK, climate change, foreign electoral votes and 78.8 million of the popular vote. affairs, and relations with Africa. Biden was a success story for the Democrats in an On Global Trade and International Affairs, we otherwise mixed election in which they, after losing delve into U.S. affairs and their Presidential election several seats held a reduced majority in the House of which has material implications for both U.S. trade Representatives and failed to win the Senate. In this policy and the future of global rules-based trading issue, we outline the significant features of the election systems. We look at the international trade position and look at what the outcome might mean for the of President-Elect Biden and what it is likely to mean EU-U.S. relationship, Ireland and Brexit. for the world, and the impact of the Schrems II ruling As the end of the Brexit transition period approaches, on EU-U.S. relations. We examine WTO concerns we take stock of the EU-UK negotiations. At the such as the Airbus-Boeing dispute which the EU has time of writing, the talks continue to progress without identified as crucial to resolve to improve the trading interruption. The omnipresent areas of disagreement, relationship with the U.S., and the contested WTO the level playing field (subsidy rules and regulatory Director General competition. As the end of the Brexit transition period approaches, we take stock of the EU-UK negotiations. The omnipresent areas of disagreement persist

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 3 From the Editor

In our Member in Focus piece, we profile Accenture medtech provides an update on the progress of the Country Managing Director (Ireland), Alastair Blair, Medical Device Regulation (MDR) and tell us of as he steps into the role of the new Ibec President as the opportunities presented by virtual audits. In our business navigates the dual challenges of COVID-19 policy update in this issue we look at Budget 2021, and Brexit. the largest in the history of the Irish State, totalling €17.75 billion; a scale appropriate given the challenges In this edition, we also profile the new Irish and uncertainty Brexit and COVID-19 present us Commissioner Mairead McGuinness who has been with going into 2021. appointed the Commissioner for Financial Stability, Financial Services and the and Finally, in our events section we look back on the series her agenda for this institutional cycle. McGuinness, of Brexit webinars and technical sessions we have previously Vice President of the , recently held in order to help our members prepare is Ireland’s second female Commissioner, and for all outcomes at the end of this year. Engagements her inclusion will bring the number of female have included webinars with Minister for Foreign Commissioners in the College to 13. We also look Affairs , the Department of Business, at Executive Vice President Valdis Dombrovskis Enterprise and Innovation, the Department for who becomes the new Trade Commissioner and the Transport, the Revenue Commissioners. Among our priorities of his Trade agenda. other high-profile engagements this quarter have been the Ibec-CBI Joint Business Council annual conference In our overview of the latest developments in member at which Mairead McGuinness, Commissioner for states, we look at where Angela Merkel, Financial Stability, Financial Services and Capital Chancellor since 2005, is due to depart her role in Markets Union gave one of her first addresses in her 2021 and we highlight the possible candidates for new role. We also cover a webinar with Executive a successor. We also look at Italy, where in a recent Vice-President of the and referendum the size of the Parliament and Senate has Commissioner for Competition been significantly reduced and at , where a and President of the and Minister for new government has been formally appointed with Finance . new Prime Minister taking office just in advance of a new COVID-19 ‘lockdown’. As always, we hope you enjoy this issue of Ibec Europe & Global Focus and we look forward to We hear from the Ibec sector representing the engaging with you further on any of the issues medtech industry in Ireland, who tell us of the featured here. In the meantime, we hope you are challenges COVID-19 has presented for them. Irish keeping safe and well. If you want to pick up on any of these items, don’t hesitate to contact any member of the team.

Neil Willoughby Austin Dowling Jennifer Wallace Andra Bodoni Senior Executive European Affairs Executive, Trade & Office & Events European Affairs Executive International Affairs Manager +32 2 740 14 33 +32 2 740 14 34 + 353 1 605 1526 +32 2 740 14 30

[email protected] [email protected] [email protected] [email protected]

4 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 COVID-19

COVID-19

Ireland and Europe Germany At the end of October Germany closed many return to lockdown as bars, restaurants and non-essential businesses nationwide, including many retail businesses, cases increase gyms and cultural venues. Contact between Ireland and other EU member states once again households will be limited. Hairdressers are face challenging choices brought on by the permitted to remain open, and schools and growth in cases of COVID-19 in October. nurseries will also remain open.

The decision by the Irish government to place The plan at present is for the measures to run the country under Level 5 COVID-19 restrictions until the end of November with a review in the was followed, at the end of October, by other middle of the month. member states including France and Germany which have both entered into lockdowns similar Under the new restrictions, companies with up to the ones seen across the EU in March. This to 50 employees will receive aid of up to 75% of time, however, more activities will be maintained, their sales revenue for the same month in 2019. including schools as well as many factories, €10 billion is being made available to fund this. construction and manufacturing businesses. 70% of the month’s taking in 2019 will be made available for larger companies. In Ireland, Ibec called on all societal stakeholders including the business community to abide by and engage in full with the Level 5 protocols. Ibec has noted that while more activities are open in Ireland than in the lockdown in March, it is important that remote working is maximised to facilitate their continuation.

Ibec called the Level 5 restrictions an inevitability given the much-publicised growth of cases and predicted hospital capacity constraint while noting that the absence of a clear articulation of the suppression goal in contrast to mitigation or even elimination strategies based on explicit cost benefit analysis remains striking. France In the circumstances where many businesses and workers will lose their livelihoods it is At the end of October, a nationwide lockdown positive to see the extension of the safeguard was also announced in France with many of financial supports, such as the Employment non-essential businesses closed, including Wage Subsidy Scheme and the Pandemic hospitality, while schools, public services and Unemployment Payment. factories remain open.

Remote working is to be encouraged where possible and the nationwide restrictions are to apply into December. A review will be taken in 15 days.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 5 COVID-19

of work as thousands of businesses close. Retailers without a developed online offering are particularly exposed.

Retail Ireland Director Arnold Dillon said, ‘It is crucial that these measures work and we are in a place to reopen retail in advance of Christmas. We simply cannot contemplate serious rolling restrictions into the future’. An all-island approach The Ibec-CBI Northern Ireland Joint Business Council (JBC), the voice of business across the island of Ireland, has said the combination of the ongoing COVID-19 challenge on the island and Brexit has demonstrated the growing importance for substantive all-island collaboration to address the collective challenges our economies face.

Such cross-border collaboration will be Uncertain Christmas trading imperative in efforts in overcoming and recovering from COVID-19. It is vital that inadequate period coordination on COVID-19 across the island Echoing the concerns of other Ibec sectors, doesn’t constrain the options available in both Retail Ireland called the restrictions in Ireland jurisdictions to ultimately combat the virus. a serious blow to the many ‘non-essential’ retailers that would have to close. Many of Ibec CEO Danny McCoy said ‘The creation of these businesses were relying on the run up to a new Shared Island Unit in the Department Christmas to make up for the significant losses of An and the announcement in incurred earlier in the year. Budget 2021 of all-island initiatives in areas such as research, education and infrastructure There is very real concern that many vulnerable investment gives a positive signal to business to retail businesses will not survive the COVID-19 look to investing in their own all-island business pandemic. The group called for a clear and development ambitions. In the short-term we comprehensive strategy for the unwinding of must do much more collectively across our these restrictions. Many retailers are facing shared island to tackle COVID-19 and business a deeply uncertain Christmas trading period will play its part in supporting that stronger with tens of thousands of retail workers out collaboration’.

6 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Future EU-UK relations

Future EU-UK relations

Intensified negotiations progress as deadline for agreement looms On 15-16 October, EU leaders met and took mechanisms, persist. While the UK indicated stock of progress in EU-UK future relationship some progress, the EU did not. On 7 November, negotiations following the ninth, and final, formal Commission President and round of talks. Despite Brexit being restricted to UK Prime Minister Boris Johnson held their most an item for discussion, expectations had risen recent call to take stock of progress, reiterating the following renewed political impetus in the weeks messaging of their chief negotiations earlier in the previous characterised by regular dialogue week and agreeing to remain in personal contact between European Commission President Ursula as the talks move forward. The positive signals von der Leyen and Council President Charles presented by both parties in advance of the “tunnel” Michel, and UK Prime Minister Boris Johnson, their demonstrates that compromise is attainable. While first official engagements since 15 June. the continuation of negotiations is positive, at the time of writing the EU and UK are approaching In its conclusions, the European Council invited their third absolute deadline of mid-November, to continue negotiations and called following the previous end of September and end of on the UK to compromise. Against the backdrop October. It is understood that an agreement must of the passing of the UK’s unilateral deadline for an be reached in the next days to ensure sufficient time agreement to be reached and in response to the for approval, ratification, and implementation of an EU not publicly signalling flexibility in its position, agreement by the UK and EU.. the UK elected to temporarily suspend negotiations early in the week beginning 19 October. In tandem, more significant progress has been made on the implementation of the Withdrawal Agreement, Despite the setback in talks, the first formal break including the Protocol on Ireland / Northern Ireland. in talks since they began in March, the parties On 19 October, the EU and the UK each presented a reached an agreement to continue negotiations positive outlook, recognising a marked improvement without interruption to dialogue between chief in discussions due to enhanced political steer and negotiators Michel Barnier and David Frost. Since commitment on both sides following the most 22 October, the EU and UK have been engaged in recent meeting of the overarching EU-UK Joint continuous, intensified negotiations, on all topics Committee. In context, Commission Vice-President concurrently with limited public iteration and political comment, termed a “tunnel”. Šefčovič balanced his positivity by reiterating the EU’s standing concerns regarding the UK’s general Crucially, the renewed talks commenced following preparedness, as well as underlining the lack of a demonstration of a spirit of compromise by both progress on the decisions to be taken by the Joint sides. The EU agreed to directly compare legal texts Committee, including EU presence in NI for customs and compile a master consolidated text following checks, criteria for goods to be considered ‘not at sustained opposition in favour of ensuring equal risk’ of moving into the EU and the exemption of progress on all items to avoid narrowing talks to only agricultural subsidies from state aid rules. Following the most politically sensitive items. In return, the UK the meeting of the Specialised Committee on the expressly agreed to the long-iterated EU principle of Protocol on 5 November, the UK presented several “nothing is agreed until everything is agreed”. positive updates, noting that the sides have agreed to an intensified process towards resolving the At the time of writing, the technical talks continue outstanding issues. to progress without interruption, alternating weekly between Brussels and London. On 4 November, At the time of writing, the Joint Committee the chief negotiators noted during the first break in had planned to next meet in the second half of talks, that the omnipresent areas of disagreement, November, or when the EU and the UK have the level playing field (subsidy rules and regulatory reached an agreement in principle on the future standards), fisheries, and the governance of relationship to ensure it is in place in advance of 1 the agreement, including dispute settlement January 2021.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 7 Future EU-UK relations

The challenges of the Internal Market Bill

The EU-UK negotiations have been How the bill impacts the complicated further by the publication Northern Ireland Protocol of the UK Internal Market Bill in September. The Bill overrides parts Part 5 of the bill impacts on the NI Protocol in of the Northern Ireland (NI) protocol substantial ways through provisions that have a direct through Article 5 on customs and consequence for the movement of goods between Great Britain (GB) and NI. Firstly, clause 40 of the the movement of goods and Article Bill notes that the UK authorities implementing the 10 on State aid. The Withdrawal Protocol should show ‘special regard’ for NI’s ‘integral Agreement is affected under Article 4 place in the UK internal market’. This wording is open on implementation and application and to interpretation and could lead to the UK government breaching the NI Protocol. As we know, the NI remains Article 5 on good faith. According to a de facto member of the EU’s single market and this the UK government, the UK internal means that GB goods entering the NI market must market (UKIM) legislation is primarily meet certain standards and abide by the procedures in about securing market place to protect the single market. access across the UK Secondly, on access into GB for NI goods and the after they leave the EU promise of ‘unfetted access’, clause 42 provides by guarding against the UK government with the power to disapply the emergence of or modify UK paperwork requirements for barriers to trade goods moving NI–GB. This clause disapplies previously agreed rules relating to the between different movement of goods in the Protocol. Finally, parts of the UK. on State Aid, clause 43 of the Bill proposes powers for the UK government to legislate for UK-wide subsidy control. The concern here is that the clause would allow the UK to apply state aid law according to the UK rather than the EU’s interpretation as required in NI by the NI Protocol.

Michel Barnier, Head of Task Force for Relations with the ’

8 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Future EU-UK relations

State of play it would blatantly violate the NI Protocol as it would allow the UK authorities to disregard the legal effect The Bill has passed through the House of Commons of the Protocol’s substantive provisions under the with a majority of 77 votes. Members of Parliament Withdrawal Agreement. did not approve any opposition amendments, but the government introduced a change that would give MP’s US response a vote before any treaty-breaking clauses are triggered. On 30 September, the bill arrived at the House of Lords. On 21 October, the Lords voted by a majority of 226 to On 15 September, senior congressmen wrote to Boris indicate its likely rejection of the Internal Market Bill Johnson to reiterate there will be no US-UK trade deal provisions to override the Good Friday Agreement and if the legislation to override the EU-UK Withdrawal international law. Furthermore, on 9 November, they Agreement is not removed. Additionally, the US Speaker voted by significant margins to remove clause 42 and 44. of the House, Nancy Pelosi, has also stated there will Detailed examination of the text and further scrutiny be “absolutely no chance” of a US-UK trade agreement takes place throughout November. passing the US Congress if Brexit undermines the Good Friday Agreement. Finally, on 17 October, Presidential candidate Joe Biden shared the same sentiments in a EU response campaign statement.

Following the publication of the Bill, Vice-President Maroš Šefčovič called for an extraordinary meeting of the EU-UK Joint Committee to request the UK government to elaborate on its intentions and to respond to the EU’s serious concerns. Šefčovič outlined that, if adopted, it would result in an “extremely serious” violation of the Withdrawal Agreement and of international law. On 1 October, the European Commission commenced infringement proceedings against the UK, and invited them to reply within a month. This followed the UK’s failure to withdraw the measures as requested by the EU. Commission President Von der Leyen stated that if the bill was implemented,

David Frost, Chief Negotiator of Task Force Europe

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 9 Future EU-UK relations

Trade and Customs to do list 1. Brexit impact assessment on your business • Review your supply chain to understand the potential impact of tariffs, customs formalities, and transport logistics. • Consider the cashflow implications of import duties, VAT and excise on goods imported from the UK (excluding Northern Ireland). • Assess contracts terms with your UK suppliers and customers.

2. Economic Operator Registration and Identification (EORI) number • To continue to trade goods between the ROI and GB, you must apply for this number with Revenue via Revenue’s Online Service (ROS).

3. Trading products of animal origin • Register to access the online TRACES system with the Department of Agriculture, Food and Marine. • From 1 January 2021, official import controls (documentary, identity and physical) will apply to animals and goods coming from GB into Ireland regardless of whether there is an EU/UK trade deal.

4. Understand what is needed to fulfil a customs declaration • Consult here for what is involved in the customs export procedures. • Consult here for what is involved in the customs import procedures.

5. Decide who will do your customs declaration • The option is either to train someone within your own company to fill out and lodge the forms or hire a customs agent to act on your behalf when liaising with customs.

6. Identify the Customs CN code of every product you are trading • Consult TARIC to classify goods to the appropriate code needed to import or export goods.

7. Identify any customs authorisations or simplifications that work for your business model and understand the approval process for same. • Examples include customs warehousing, inward processing relief and transit.

8. Understand your obligations under the UK authorities: different facilitations and Brexit arrangements are envisaged by HMRC.

9. Understand your obligations under the Irish (EU) customs authorities - contact the Irish Revenue Commissioners with any Brexit related queries by emailing [email protected].

10 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Ireland - Oireachtas

Ireland New Oireachtas EU Affairs and Foreign Affairs committees formed

Following the establishment of the new government, the cross-party committees have been formed. Oireachtas committees, composed of TDs and Senators, scrutinise legislation relevant to the committee’s subject area and shadow the work of the relevant Department. Two of these committees are particularly relevant to Ibec’s EU and International engagement and influence, the EU Affairs and Foreign Affairs and Defence committees.

The membership of both committees has been established and features several experienced names with former Minister for Foreign Affairs of chairing the Foreign Affairs committee and former Minister for Education Joe McHugh chairing the EU Affairs committee. Former MEP and now Independent TD, , has secured a position on the EU Affairs committee. Also notable is the presence of former Brexit spokespeople for Fianna Fáil and Fine Gael; Senator and TD, respectively.

Former Minister for Public Expenditure and Leader of the is also a member of the select committee on EU Affairs while former Tánaiste Michael McDowell and former Minister for Employment Affairs and Social Protection round out the EU Affairs joint-committee. Oireachtas committee Committee on Foreign Affairs on Affairs and Defence The committee considers EU developments and The committee shadows the work of the initiatives which affect Ireland and scrutinises Department of Foreign Affairs and Department of EU legislation and proposals. It holds the Irish Defence government to account as regards Ireland’s relations with the EU and engages with the EU Select Committee (TDs) institutions to monitor and influence the political Charles Flanagan (Fine Gael) (Chair) and strategic direction of the EU (Independent) John Brady (Sinn Féin) Select Committee (TDs) Sorce Clarke (Sinn Féin) Joe McHugh (Fine Gael) (Chair) (Fianna Fáil) John Brady (Sinn Féin) Garry Gannon (Social Democrats) (Fianna Fáil) James Lawless (Fianna Fáil) () (Green Party) Marian Harkin (Independent) (Fine Gael) Seán Haughey (Fianna Fáil) Brendan Howlin (Labour Party) Senators who, like the above TDs, are members Neale Richmond (Fine Gael) of the joint-committee Ruairí Ó Murchú (Sinn Féin) (Fianna Fáil) Gerard P. Craughwell (Independent) Senators who, like the above TDs, are members Joe O’ Reilly (Fine Gael) of the joint-committee (Fianna Fáil) Lisa Chambers (Fianna Fáil) Niall Ó Donnghaile (Sinn Féin) Regina Doherty (Fine Gael) Sharon Keogan (Independent) Vincent P. Martin (Green Party) Michael McDowell (Independent)

Ibec Europe & Global Focus | Issue 14 | Summer 2020 11 General EU Affairs

General EU Affairs State of the Union European Commission ‘State of the Union’ and Work Programme looks ahead to 2021: President of the European Commission Ursula von der Leyen addresses Europe’s future at a time of crisis.

On 16 September, President of the European In her address, titled, ‘Building the world we want Commission Ursula von der Leyen presented her to live in: A Union of vitality in a world of fragility’, first ever ‘State of the Union’ before the European von der Leyen praised the resilience and sacrifices Parliament, marking one year of policy-making at her of Europeans in the face of the COVID-19 crisis and Commission. outlined how the European Commission intends to shape the EU’s future and recovery. The von der Leyen speech ultimately formed the basis of the agenda of initiatives detailed in the European Commisson’s 2021 Work Programme; an agenda focusing, much like von der Leyen’s speech, on green, digital, health and economy related proposals. Von der Leyen’s full speech can be read here below are the highlights in the major COMMISSION WORK policy areas, matched PROGRAMME2021 with the list of relevant A Union of vitality in a world of fragility initiatives from the Commission’s 2021 Work Programme.

EN

Ursula von der Leyen, President of the European Commission

12 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 General EU Affairs

Health • Sustainable corporate governance (Q2 2021) • Establishment of an EU green bond standard (Q2 On Health, von der Leyen outlined that the European 2021) Commission intends to build a European Health Union (EU4Health) which will reinforce the European • Anti-money laundering legislative package (Q1 Centre for Disease Control and European Medicines 2021) State of the Union Agency. The Conference on the Future of Europe • Towards the future generalised scheme of will include a discussion on enhanced health preferences legal framework granting trade competencies for the Commission. The Commission advantages to developing countries (Q2 2021) is to create a European agency for advanced medical and disease research. • Instrument to deter and counteract coercive actions by third countries (Q4 2021) Planned legislative initiatives in this area according to the Commission Work Programme • Revision of the bank crisis management and 2021 include: deposit insurance framework (Q4 2021) • Proposal to establish a European biomedical • Revision of the tobacco taxation Directive (Q3 research and development agency (Q4 2021) 2021) • A European health data space (Q4 2021) • Amendment of the Directive on general arrangements for excise duties (Q4 2021) Economy Green Deal On Economy, the European Commission has proposed a directive on minimum wages, with limited On the Green Deal, the headline announcement of member state support and opposition from European von der Leyen’s ‘State of the Union’ was that the business who favour a Council recommendation. The European Commission proposes that 2030 climate European Commission will propose a new strategy targets move to at least 55%. Furthermore, 37% of for Schengen (Q2 2021), update the industry strategy NextGenerationEU funding will be spent on the Green and competition policy framework in the first half Deal, while 30% will be raised through green bonds. of 2021 and present its own proposal on digital The Commission will also make further proposals taxation, should OECD talks fall apart. regarding the carbon border adjustment mechanism to motivate EU importers to reduce emissions According to the Commission’s 2021 Work Programme, planned legislative initiatives The Commission intends to overhaul all relevant include: climate and energy legislation to align with the newly proposed target to reduce emissions • Deepening the Capital Markets Union including by at least 55% by 2030 via the “Fit for 55 an Investment protection and facilitation Package”, including legislative initiatives for framework (Q2 2021) • A revision of the EU Emissions Trading • Revision of prudential rules for insurance and System (ETS), including maritime, aviation and reinsurance companies (Solvency II) (Q3 2021) CORSIA as well as a proposal for ETS as own • A revision of the Markets in Financial Instruments resource(Q2 2021) Directive and Regulation (Q4 2021) • Carbon Border Adjustment Mechanism (CBAM) and a proposal for the CBAM as an ‘own resource’ (Q2 2021) As well as numerous initiatives, non-legislative initiatives and REFITS across the policy areas of Transport and Energy, the detail of which can be found here.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 13 General EU Affairs

Digital With non-legislative initiatives planned for: • Updating the new industrial strategy for On Digital, von der Leyen outlined that 20% of Europe(Q22021) Next Generation EU funding will be invested in making the next ten years Europe’s ‘Digital • Action plan on synergies between civil, defence Decade’ as well as the following commitments; and space industries (Q1 2021) • The Commission is to propose a European e-identity which can be used, for example, to pay International Relations taxes or shop online On international relations, von der Leyen stated that • The European Commission will propose a new the EU will remain a defender of multilateralism and law on the supervision and control of personal will remain committed to the UN, WHO and WTO, data in relation to AI while advocating for their reform • As part of its agenda for rural areas, the In relation to talks on the future relationship with the Commission will lay out its priority for greater UK, the European Parliament will have the final say broadband infrastructure, provide funding for 5G on ratification of any potential deal. Von der Leyen and 6G, invest in supercomputer technology and spoke of how difficult the talks have been and said develop a European Cloud. ‘the EU will never backtrack on the Good Friday Agreement’ and that ‘trust is the foundation of any According to its 2021 Work Programme, the strong partnership. Commission is proposing a roadmap with goals for 2030 (Q1 2021), for connectivity, skills and digital On the EU-US relationship, von der Leyen stated that public services, based on the following principles: the whatever the outcome of the November Presidential right to privacy and connectivity, freedom of speech, election, the EU remains ready to cooperate, free flow of data and cybersecurity. including on taxation. This includes legislative initiatives for: According to its 2021 Work Programme, the European Commission is planning several • A Data package including a Data Act and Review non-legislative initiatives in this area including: of the Database Directive (Q3 2021) • A Joint Communication on strengthening the • A digital levy and a proposal for a digital levy as EU’s contribution to rules-based multilateralism, an own resource (Q2 2021) focussing on the WHO and WTO (Q2 2021) • A trusted and secure European e-ID (Q1 2021) • Communication on global approach to research, • Improving working conditions for platform innovation, education and youth (Q2 2021) workers (Q1/Q4 2021) • A follow-up to the White Paper on foreign subsidies including legislative initiatives for ‘levelling the playing field’ and public procurement (Q2 2021) • New design requirements and consumer rights for electronics (Q4 2021)

14 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 General EU Affairs

European Council

• European Council, 15-16 October Later in October the European Council met both in person and online to discuss several pressing issues including the progression of the second wave of COVID-19, future relations with the UK, climate change, foreign affairs and relations with Africa. On the progress of the COVID-19 pandemic, Council agreed to continue to coordinate their approach to the restriction of free movement in the EU and on the matters of quarantine regulations, cross-border contact tracing, testing strategies, joint assessment of testing methods and the temporary restriction on non- essential travel into the EU. Council discussed a strategy for the rollout of a COVID-19 vaccine, encouraging cooperation at a global level. Charles Michel, President of the European Council On Future EU-UK relations, European Council ‘noted with concern’ that progress on the • Special European Council, 1-2 key issues of interest to the Union was still October not sufficient and called on the UK to make the necessary moves to make an agreement In their first in-person meeting since the historic possible. As regards the Internal Market Bill agreement on the Recovery Fund and MFF in tabled by the UK government, the European July, EU leaders discussed the EU’s economic Council recalled that the withdrawal agreement base, addressing COVID-19, the single market, and its protocols must be fully implemented in industrial policy, and the digital transition. a timely manner. Council noted the importance Against the backdrop of the continuing impact of work on preparedness and readiness at all of COVID-19, the European Council focussed levels and for all outcomes, including that of no on the goals of returning to a fully functioning agreement. They also invited the Commission to single market as soon as possible, making the consider unilateral and time-limited contingency EU’s industries more competitive globally and measures in the EU’s interest. accelerating the digital transition. On climate change, Council discussed the In relation to the single market, leaders agreed emissions reduction target of at least 55% by on a call for the stricter implementation and 2030, and the actions required to achieve that enforcement, the removal of unjustified barriers, ambition. Council asked the Commission to the update of the competition framework, and conduct in-depth consultations in member states. greater investment in education, training and skills. On EU-Africa relations, to help address the On industrial policy, the European Council invited impact of the COVID-19 pandemic, the European the Commission to identify and act on strategic Council is committed to furthering international dependencies, notably the health sector. EU debt relief for African countries within the relevant leaders also called for the digital transition to be multilateral frameworks. EU leaders are also accelerated through an EU Digital Compass to committed to strengthening EU support to health set out concrete ambitions for 2030 as well as systems and the reinforcement of partners’ earmarking 20% of the Recovery and Resilience preparedness and response capacity. The Facility funds for digital projects. Council noted that the EU intends to expand its partnership with Africa in the areas of the digital and knowledge economy, renewable energy, transport, health and agri-food systems.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 15 Global Trade & International Affairs

US update

Joe Biden, President-elect of the United States Donald Trump, President of the United States

The outcome of the November 3 elections has material seats, as the next President can cast a tie-breaking vote. implications for both U.S. trade policy and the future of Senate control is vital as the party in power determines global rules-based trading systems. which bills reach the floor and which of the President’s Record Voting turnout nominees receive confirmation votes. Americans turned out to vote in record numbers, Biden and his International Trade surpassing all presidential elections since 1908. More position than 100 million Americans voted early either by post or in person, equivalent to almost 73 percent of the entire Biden is in stark contrast to Trump on numerous issues, 2016 vote. As a result, the final outcome was delayed including his approach to international trade policy. with mail-in ballots being accepted and counted after the Contrary to Trump, Biden is a supporter of trade polling day. However, it was clear early on that the blue liberalisation and a critic of Trump’s tariffs, stating that wave of Democrat votes that many pollsters predicted, the U.S. should take the lead on creating global trade rules did not materialise, and Trump and the Republican party and lowering barriers to global trade. However, Biden’s performed surprisingly better than expected. campaign claimed he would prioritise domestic economic stimulus before new trade deals. It is believed a Biden Biden to Victory administration would continue to pursue similar issues to the current administration such as on China and, the On 7 November, the Associated Press, the gold standard WTO dispute settlement body, etc. but with a change of for election calls, called the election for former Vice- style over substance in terms of tactics and tone. However, President and 2020 Democratic nominee, Joe Biden on a positive note, Biden has emphasised the importance with victories in both the popular vote and the electoral of working with allied nations to resolve these issues college. Biden, who in an historic achievement won over 78.8 million votes. In another historic accomplishment, At a US Chamber of Commerce event in September, his running mate, Kamala Harris, became the first Mr Biden’s top foreign policy adviser, Antony Blinken, woman and the first black and Asian American to be outlined that Mr Biden would end the U.S. trade war with elected vice president. At the time of writing, Trump the EU and seek to jointly work towards a fair approach to continues to refuse to concede and is attempting to international trade and investment. discredit the integrity of the election and argue without EU-US relations evidence that the results will be overturned. The latest challenge to EU- U.S. relations is the Schrems Chambers of Congress elections II ruling. This decision may negatively impact the $7.1 Americans also elected members to the two chambers of trillion transatlantic economic relationship. On 16 July, Congress, the main law-making body of the U.S. On the the ECJ invalidated the EU-U.S. Privacy Shield for data House of Representatives elections, Democrats held their transfers based on a fundamental clash between EU majority but lost a number of seats. Elected to a two- privacy law and U.S. surveillance law. The ruling did not year term, the representatives introduce bills and seat on receive a lot of negative reaction as both the EU and U.S. committees, among other responsibilities. -try to manage the process and find a solution as quickly as possible. At a recent BusinessEurope meeting, an EU In the Senate, lead with 50 seats to the official outlined that there is a need to be pragmatic and Democrats 48 with the latter gaining fewer seats than recognise that the EU and U.S. have different systems of predicted. Senate control will be decided by the two data protection but common underlying values. Ibec along second round run of votes in Georgia determining which with other national confederation of industries wrote to party has a majority on 5 January. Either party needs to their respective government to urge them to fight for free achieve 51 seats to guarantee control. However, the party data flows at the EU Council meeting that took place on of the winning Presidential candidate only needs 50 15-16 October where digital trade was discussed.

16 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Global Trade & International Affairs

WTO Update

Airbus-Boeing agricultural and industrial products imported from the U.S., thereby strictly mirroring the countermeasures imposed Resolving the Airbus-Boeing dispute and the removal of by the U.S.. The EU has identified resolving this dispute tariffs imposed on goods by the US and EU remains a key as crucial to improving the trading relationship with the priority for Ibec and its impacted sectors. On 13 October, U.S. Further to this dispute, President Trump has placed the WTO ruled that the EU could impose tariffs on U.S. additional tariffs on EU steel, and threatened to target the goods worth €3.4 billion to retaliate against U.S. subsidies European car industry. to Boeing. The European Commission already completed On the broader trade agreement front, the two sides differ its consultation on the planned countermeasures and in their negotiating objectives with the EU seeking a free published the preliminary list of U.S. products, from trade deal in industrial goods while the U.S. want any trade aircrafts to chemicals and agri-food products last year. deal to include agriculture. Nevertheless, there are ongoing European sources state that theis award does not include negotiations on improving product conformity checks. $4.2 billion of tariffs against the U.S. which remains from an earlier case, providing the EU with $8.2 billion to retaliate. However, the U.S. claim this previous award is WTO Director General no longer valid, and the WTO has declined to become involved in this particular issue. competition

The EU position on the Airbus-Boeing dispute remains On 28 October, Nigeria’s Ngozi Okonjo-Iweala was the same. The EU, with the support of business, prefer named as the consensus DG candidate. However, the U.S. a negotiated settlement, and discussions continue with opposes this decision and continues to support South the U.S. Trade Representative, Robert Lighthizer. Korea’s Yoo Myung-hee, the other remaining candidate Moreover, in response to the WTO award, Commissioner to advance to the final round of the competition.Nigeria’s Dombrovskis stated, “if the US is not withdrawing their Ngozi Okonjo-Iweala would be the first female and tariffs, we have no choice but to then introduce our tariffs”. African to be director general in the WTO’s twenty-five- Lighthizer has said they are “waiting for a response year history. from the EU to a recent U.S. proposal and will intensify our ongoing negotiations with the EU to restore fair Okonjo-Iweala is considered an WTO outsider as she competition and a level playing field to this sector”. never held a position with the WTO and labels herself as a reformer. She has vowed to find a solution for the However, on 10 November, the EU launched Appellate Body and support Aid-for-Trade initiatives countermeasures since the U.S. has not yet provided the to assist least developed countries in the trading system. basis for a negotiated settlement, which would include an In contrast, Yoo is an WTO insider having led Korea’s immediate removal of U.S. tariffs on EU exports in the WTO affairs in the Korean Ministry of Trade. Some of Airbus WTO case. They include additional tariffs of 15% her priorities include completing the WTO e-commerce on aircraft as well as additional tariffs of 25% on a range of agreement by next summer and reform and resumption of the dispute settlement system and the Appellate Body. As WTO members were unable to select a leader by consensus, qualified majority voting may be held which would be a first for the WTO. Consultations aimed at achieving consensus will take place before then. The U.S.’ refusal to back her during the informal heads-of- delegation meeting, convened to announce the candidate most likely to achieve consensus, suggests the U.S. intends to block Okonjo-Iweala’s appointment at the General Council. However, this meeting, which was scheduled to take place on the 9 November, was postponed. Ambassador David Walker, the chair of the General Council, noted that during this time he would continue undertaking consultations with delegations.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 17 Ibec members in focus

Ibec Member in Focus Accenture’s Alastair Blair steps into role as new Ibec President as business navigates dual crises of COVID-19 and Brexit

Accenture is a leader in the professional services industry and is active in 120 countries. Accenture provides a broad range of services in the areas of strategy, consulting, interactive, technology and operations. The company has 506,000 employees across the world. Accenture is a key player in the ecosystem of technology services and its current clients include 91 of the Fortune Global 100 and more than three-quarters of the Fortune Global 500.

Though incoming Ibec Presidents have in the past been inaugurated at landmark President’s dinners, the realities of the COVID-19 pandemic this year pushed the ceremony online. Distinguished guests included An Taoiseach Micheál Martin and members of the Ibec board and national council.

In his address, Blair remarked on how the COVID-19 pandemic accelerated trends in our use of technology and highlighted the pressing need to avoid a ‘Digital Divide’ in Alastair Blair, Country Managing Director (Ireland) for Accenture Ireland, a situation wherein ‘without access to technology and skills, there will be those “with” and those “without”’. On 24 September, Alastair Blair, Country Managing Touching on the many social challenges facing Ireland, Director (Ireland) for Ibec member Accenture, took on the Blair singled out skills as central to the country’s economic role of Ibec President for 2020-2021. recovery.

Blair, who succeeds outgoing Ibec President Pat McCann, Blair noted that Brexit has created ‘great uncertainty about (CEO of Dalata Hotels), has worked with Accenture since how we will trade and live alongside our nearest neighbour 1987 and has been a member of the Ibec Board since 2015. and friend’ and reminded those watching the Broadcast that ‘the impact on businesses, big and small, of a “no-deal” Addressing members, stakeholders and media at Ibec’s first outcome would be substantial’. Despite the challenges ahead ever virtual President’s Broadcast, Blair highlighted the for Ireland, Blair noted that we are ‘embarking on a new and leadership role Ibec had played throughout the initial stages exciting chapter for our “shared island” agenda’. of the COVID-19 lockdown from mid-March of this year to developing a framework for living with - the crisis with Ibec CEO Danny McCoy, speaking at the Ibec President’s the Reboot and Reimagine campaign. Broadcast, a special virtual event to Ibec members, welcomed the incoming President, saying: ‘Alastair is a Blair is a noted leader in Irish business, having developed recognised leader in the field of European business and his vast knowledge and experience in business strategy and experience and insights will no doubt support our efforts driving organisational change through innovation and over the coming year to help navigate the economy through agility from his work with organisations throughout the UK, the dual threats of Brexit and COVID-19’. Ireland, the Middle East and the EU. Blair, who graduated from Trinity College with a degree in Electronic Engineering, has held numerous senior roles in Accenture with a focus on the financial services sector and is a board member of Business to Arts, chairs the Agri-Food Inclusion as well as the Diversity Council and Worker of the Future Leaders Group for Business in the Community Ireland.

18 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Profile

Profile: Commissioner Mairead McGuinness

Commissioner for Financial Stability, Financial Mairead McGuinness Services and the Capital Markets Union following successfully appointed her hearing on 2 October by the Economic and Monetary Affairs Committee (ECON) of the Commissioner for European Parliament. McGuinness was approved alongside Executive Vice President of the Financial Stability, European Commission Valdis Dombrovskis who Financial Services and the has been assigned the responsibilities of the Trade portfolio. Capital Markets Union McGuinness’s appointment as Commissioner Mairead McGuinness (Fine Gael/European came following the resignation of Commissioner People’s Party), formerly First Vice-President for Trade, , in August. The President of of the European Parliament and Irish MEP for the European Commission Ursula von der Leyen Midlands-Northwest, has commenced a new role asked the Irish government to nominate one male as Commissioner for Financial Stability, Financial and one female replacement. McGuinness’ name Services and the Capital Markets Union in the von was put forward with that of Andrew McDowell, der Leyen cabinet. former Vice-President of the . On 7 October, Mairead McGuinness was McGuinness is a graduate of the BSc in successfully Agricultural Economics, UCD, and was a approved noted researcher, presenter and journalist as in Ireland before moving into politics. Before her appointment as Commissioner, McGuinness had been one of Ireland’s most high-profile representatives at an EU-level. In the European Parliament, McGuinness represented the Midlands- Northwest constituency, and previously East constituency of Ireland. In 2019, the most recent election to the European Parliament, McGuinness secured the highest first preference vote of any candidate in Ireland at 134,630 votes. At the time of her nomination for Commissioner, McGuinness, in her fourth term as MEP since 2004, was also halfway through her second term as Vice-President of the European Parliament.

McGuinness joins the European Commission with responsibility for

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 19 Profile

Financial Services, Stability and Capital Markets In her Mission Letter to McGuinness, President of Union, a different portfolio from Hogan, with the European Commission Ursula von der Leyen Executive Vice-President, Valdis Dombrovskis tasked McGuinness with: of nominated as Commissioner for Trade. McGuinness is the second female • The completion of the Banking Union, finalising Commissioner successfully nominated by the common backstop to the Single Resolution Ireland and her inclusion will bring the number Fund and agreeing on a European Deposit of female Commissioners in the current College of Insurance Scheme. Commissioners to 13. • Preserving and improving financial stability, protecting savers and investors and ensuring the In her hearing before ECON, Mairead McGuinness flow of capital to where it is needed. showed her 16 years’ EU experience and answered questions from all EU political groupings on a number of items relating to her new portfolio • To speed up the work on the Capital Markets including Capital Markets Union, Banking Union, Union to diversify sources of finance for Deposit Insurance, Brexit and Digital taxation. companies. • On Brexit and financial services, McGuinness • To further develop the green financing strategy noted the EU needs to be prudent in its approach supporting the implementation of the European to using the services of the City of London, as it is Green Deal. not yet known how much the UK will diverge and deregulate. She said that the EU needs to avoid • To put forward a FinTech Strategy to support being overly dependent on a third country for a new digital technologies in the EU’s financial strong financial system and that a resilient EU system. financial system is important. • To continue to develop a new, comprehensive • On Capital Markets Union, McGuinness approach to fighting money laundering and the favours positive, incremental progress rather financing of terrorist activities. than stop-start action and highlighted the • To find a common approach with Member importance of funding the transition to a more States on cryptocurrencies to ensure the EU sustainable economy. understands how to make the most of the • On SME and COVID-19 recovery funding, opportunities they create and address the new McGuinness said that we must develop SME risks they may pose. funds and help stimulate private funds. She said • To develop proposals to ensure the EU is more member states have a key role through their resilient to extraterritorial sanctions by third public banks and that the key must be providing countries. SMEs with liquidity now for survival and later to enable their recovery. Further details of McGuinness’ responsibilities, team and career can be accessed here. • On the subject of digital taxation, McGuinness noted work is ongoing at OECD level. She said On 20 October, the freshly confirmed the Commission agrees with this process and Commissioner McGuinness joined a major event that if it doesn’t deliver, then the Commission will organised by the Ibec-CBI Joint Business Council present proposals. entitled ‘Business on a Connected Island’ as one of her first engagements as Commissioner. She • On the EU banking architecture, McGuinness delivered a keynote address where she spoke said the completion of the Banking Union of her ‘cautious optimism’ that a deal could be would be prioritised during her term, and the reached between the EU and UK, while noting specificities of the EU banking market would that whatever agreement is reached business have to be considered when applying new global will face many challenges in adjusting to a new banking standards under Basel IV. trading relationship with the UK outside the EU and • On Anti-Money Laundering, McGuinness beyond the transition period. emphasised her commitment to stronger architecture underpinned by better co-ordination between national supervisors and centralisation of information at EU level.

20 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Profile

Profile: Commissioner for Trade Valdis Dombrovskis

agenda for the trade portfolio with WTO reform, EU trade defence, sustainability and US and China relations high on the list. Issues raised by MEPs on the INTA included the Mercosur agreement, greening of trade policy, the EU-China Comprehensive Agreement on Investment, the Carbon adjustment mechanism and SMEs.

On 7 October, the nomination of Dombrovskis as Trade Commissioner was officially approved by the plenary vote of the European Parliament by 515 votes in favour to 110 votes against and 70 abstentions. The European Council will formally approve the nomination by written procedure. As Executive Vice President and Commissioner for Trade Dombrovskis will serve in the von der Leyen College until the end of this institutional cycle in 2024. Trade announcements In his hearing before the European Parliament, Dombrovskis announced that the Commission had Valdis Dombrovskis, Executive Vice-President of the launched a WTO Trade and Climate Initiative, focusing European Commission and Commissioner for Trade on green goods and services to reactivate the negotiations on the Environmental Goods Agreement and to expand Valdis Dombrovskis, Executive the Agreement to services. Additionally, Commissioner Vice-President of the European Dombrovskis stated that to protect companies, strategic Commission, is appointed Trade interests and ensure a level playing field, he will launch anti-coercion mechanism in 2021. This enforcement tool Commissioner will counter “coercive” actions by China or the U.S., who had threatened the EU in the past with imposing trade Two-term Commission Valdis Dombrovskis has been restrictions or new tariffs against European carmakers appointed Commissioner for Trade in the von der Leyen and other products. Finally, Commissioner Dombrovskis Commission. Dombrovskis previously held the portfolio announced the Access2Markets portal. This will be a one- of the Financial Stability, Financial Services and the stop-shop, in all EU languages, to help SMEs navigate the Capital Markets Union, and will remain the Executive world of international trade. Vice-President for An Economy that Works for People. His selection keeps the trade portfolio under the control of Access2Markets portal the centre-right European People’s Party. Prior to joining Merging two existing portals, the Market Access Data Base the Commission, he served three consecutive terms as and the Trade Helpdesk, the new portal contains information the Latvian Prime Minister, meaning he was the longest about tariffs, customs, product rules and more, all tailored to serving elected head of government in Latvia’s history. the needs of small and medium-sized firms. It also includes a Valdis Dombrovskis hearing Rules of Origin self-assessment tool, the ROSA. It is hoped that the new portal will not only make information more On 2 October, Executive Vice President Dombrovskis accessible, but also easier to understand, contributing to the hearing to become Trade Commissioner was held in use of the EU’s trade agreements. For the first time, the portal the Committee on International Trade (INTA ) at the includes more substantiated information on trade in services. European Parliament. His opening remarks outlined his The portal is accessible here.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 21 EU Member States Overview

Germany

Merkel steers Germany through COVID-19 pandemic in last months as Chancellor as cabinet colleagues consider successors As the German Presidency of the Council of the EU steers the bloc through a difficult autumn and winter battling COVID-19, successors are lining up to replace Chancellor Angela Merkel, in office since 2005 and now in the final months of her tenure in Germany’s top position. The Christian Democratic Union (CDU), the party of Chancellor Merkel, is set to elect a new leader on 4 Giuseppe Conte, Prime Minister of Italy December following the resignation of Annegret Kramp- Karrenbauer, elected to the position in 2018 in expectation Italy of taking on the Chancellorship after Merkel steps down in 2021. Whoever is elected leader at the CDU’s one-day Congress in Stuttgart in December is most likely to be the Italy downsizes Parliament party’s nomination for the role of Chancellor. In September, Italy voted in a national referendum to cut The Christian Social Union (CSU), sister party of the number of representatives in its Parliament by a third. the CDU, are also expected to nominate a candidate, About 70% of the Italian voting population cast their ballot potentially their party leader Markus Söder, Minister in favour of downsizing both the national Parliament and President of Bavaria. Senate. In August, coalition partners of the CDU/CSU, the Social The referendum was pushed by the Five Star Movement Democratic Party (SPD) nominated party and will see the Italian Parliament’s seats shrink from , Germany’s Federal 634 to 400 and total number of MPs and Senators shrink Minister of Finance and Vice from 945 to 600. Chancellor, to succeed Merkel as Those who endorse the change argue it will save Italy, one Chancellor following the federal of the worst impacted economies from COVID-19, €1bn elections in 2021. over the next decade. Those against, however, say this is an Should any of Merkel’s grand overestimated saving which will weaken the Parliament’s coalition partners fare poorly in authority. 2021, the idea of the Greens – The change in seat numbers, already approved by currently led jointly by Parliament, will take effect in 2023. Annalena Baerbock and Robert Habeck - Regional elections were held at the same time allying with her party as the referendum for the -election of 1000 and securing the mayors and 7 regional governors. The outcome role of Chancellor of the election saw far-right groups fail to is also a possibility. meet expectations and centrist parties hold their ground in some of Italy’s most hotly contested regions, including Tuscany.

Angela Merkel, Chancellor of Germany 22 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 EU Member States Overview

Belgium

Cross-party coalition ends 16-month wait for new government in Belgium Alexander de Croo of Flanders’ Open Vld (aligned with Renew Europe) assumed the role of Prime Minister on 1 October. De Croo heads a seven-party coalition government which inherits power from the cabinet of outgoing Prime Minister Sophie Wilmès (Reformist Movement, also aligned with Renew Europe) which had been governing in a caretaker capacity since the inconclusive outcome of the 2019 federal elections. Governing alongside de Croo will be seven Deputy Prime Ministers, one from each of the coalition parties, including former Prime Minister Sophie Wilmès for the French- Alexander de Croo, speaking liberal Reformist Movement, both the Flemish Prime Minister of Belgium and French speaking Green parties, CD&V (the Christian Democrats), as well as the French and Flemish speaking Socialist party. The new cabinet also has seven Ministers and five Secretaries of State and a Commissioner for fighting COVID-19. Each of the seven Deputy Prime Ministers also has a senior Ministerial portfolio with Sophie Wilmès taking on Foreign Affairs, European Affairs and Trade. Christian Democrat Vincent Van Peteghem takes on Finance while Socialist Pierre-Yves Dermagne takes on Economy and Employment. The crucial role of Health Minister amid the COVID-19 pandemic is assumed by Franck Vandenbroucke of the Flemish Socialists, who has experience as Minister for Foreign Affairs, Social Affairs, Employment and Pensions in four previous federal cabinets.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 23 Sectoral Highlights

A global player: The Irish Medtech industry innovates solutions in a time of crisis

• The Irish medtech sector is For the Irish Medtech Association, the regulatory agenda has always been towards the very top of our recognised as a top 5 global broader strategic priorities. The medical technology medtech hub. industry welcomes the postponement of the Date of Application of the Medical Devices Regulation • The sector has over 2017/745 (MDR) by one year to May 2021. The 450 Date of Application of 2017/746 (IVDR) remains May companies of which 60% 2022. However, the transitional periods for both Regulations have been widely considered to be are indigenous, with annual extremely ambitious, ever since they were crafted exports of €12.6bn. and the EU has been struggling to rapidly put in place all the regulatory infrastructure that needs to • 9 of the world’s top 10 be built in order for medical technology companies companies are located here. to comply. The time remaining for the IVDR transition is • 68% of medtech companies particularly concerning. In vitro diagnostic tests (IVDs) are critical in the screening, diagnosis, in Ireland have R&D activity, prediction and monitoring of medical conditions in with an €800 million Europe, including infectious, rare or genetic diseases and physiological conditions. The role of diagnostics spend on R&D annually. in the COVID-19 pandemic, where tests represent an indispensable part in managing the acute crisis • The sector is the biggest and in supporting effective exit strategies, is a prime employer of medtech example of how critical these devices are. professionals, per capita, in Unfortunately, the circumstances of the COVID-19 outbreak have put the IVDR implementation process Europe with 40,000 working de facto on hold, as the European Commission and in the sector. Member States, as well as manufacturers, needed to redirect significant resources towards managing the • The sector makes a big COVID-19 crisis. This has essentially stalled the work required to move forward with IVDR implementation. impact globally with more The IVD industry, therefore, urges the European than 80% of the worlds Commission, Member States and the European stents, 75% of the worlds Parliament to enact substantive solutions to make the IVDR workable starting with communication of orthopaedic knees and 40% a clear, updated IVDR implementation plan from the of the worlds contact lenses Commission and Competent Authorities as soon as possible, enabling all stakeholders to plan in a manufactured here. predictable way.

24 Ibec Europe & Global Focus | Issue 15 | Autumn 2020 Sectoral Highlights

With the one-year postponement of the Date related products. Adoption of this approach requires of Application of MDR, this additional time broad support from all EU member states. allows for the new regulatory system to be fully operational, however, one critical element for Virtual audits would aid manufacturers in their device manufacturers is to be able to proceed with efforts to providing sustaining and breakthrough Notified Body audits in a timely manner as a step technologies, devices, and solutions to their patients to obtain CE marking under the MDR or IVDR. This while demonstrating compliance to the new Medical is rapidly becoming a matter of serious concern as Device/IVDR Regulations. With proper guidelines COVID-19 related travel restrictions and quarantine and a clear risk-based approach, virtual auditing can orders around the world, make it neither possible happen in a way that maintains patient safety and nor safe for Notified Body audits to happen on-site device performance, allowing for safe, efficient and in the foreseeable future. Many manufacturers with innovative devices to reach in a sufficient quantity scheduled MDR/ IVDR Notified Body site audits have the user and patient to support uninterrupted had these cancelled or postponed. treatment and support.

However, ‘virtual’ audits present a technologically Looking ahead and in anticipation of potential further viable alternative to physical audits for the medtech pandemics, or even specific critical geopolitical industry. Unless ‘virtual’ audits are permitted situations, the medical technology industry would under the Regulations, there is a high risk that strongly encourage allowing ‘virtual audits’ when innovative products needed in the EU will not make necessary and consider them as a tool to overcome it to market. Technologies that have been safely challenges linked to the CE marking procedure when performing in the market for many years, are at risk on-site audits cannot be performed. The longer- of being withdrawn because auditors are currently term workability of the new regulatory framework required to be on site for (re-) certification purposes. will depend on alignment with the new and more progressive auditing realities being adopted in other Therefore, the Irish Medtech Association, in highly regulated sectors within the EU. conjunction with MedTech Europe, urge the European Commission to publish guidance clarifying that in place of physical ‘on-site’ audits, Notified Bodies may conduct audits under the new Medical Device and In Vitro Diagnostic Medical Device Regulations in a ‘virtual’ mode by using all available technological solutions and following a risk-based approach. The scope of these ‘virtual’ audits should be for all products and not only limited to COVID-19

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 25

Policy Desks

Budget 2021 Substantial resources available, important to channel appropriately

On 13 September, the Irish Government delivered its 2021 From the international perspective, the Government presented budget. On the basis of two key underlying worst-case scenario a fund of up to €3.4bn to help businesses large and small who assumptions that the UK will exit the EU without a free trade are in financial difficulty as a result of the COVID-19 pandemic agreement in place and that COVID-19 will continue to cause and a possible no-trade deal Brexit. This will be in addition to adverse economic effects throughout 2021, the Government the funding of €350 million for Brexit preparations amongst delivered the largest package in the history of the State. Departments and State Agencies. The precise allocation of the Brexit elements of the Recovery Fund will be based on the nature The total Budget package is €17.75 billion, with over €17 billion of the end of the transition period in addition to the EU’s €5bn in spending and a net tax package of €270 million. In a baseline Brexit Adjustment Reserve which will be divided amongst the EU scenario, the Government expects to spend €109 billion and Member States and sectors worst affected. €88.7 billion respectively in 2021 as compared to €105 billion in spending and €84.2 billion in expenditure in 2020. In addition, the budget showed clear commitment to strengthening the competitiveness of Ireland’s inward and In Ibec’s view, the scale of the budget is appropriate given the outward FDI model. Alongside a reiteration of the longstanding challenges faced by the economy. The package and supports commitment to the 12.5% rate, the Government presented an announced to help business deal with the uncertainties raised by update to Ireland’s corporate tax roadmap. both COVID-19 and Brexit show a scale of ambition and a belief in the business model to deliver a strong recovery from COVID-19 This unprecedented Budget has been achieved through Ibec’s and Brexit. This is appropriate given the magnitude of challenges Reboot and Reimagine campaign, our inputs to the July Stimulus the Irish economy faces. Ultimately, it will also be affordable for plan and a very active pre-Budget lobbying period. The Budget the State. It will, however, mean more difficult conversations is ambitious in providing a strong stimulus for the economy; it ahead about funding new current spending or responding to has a good shape, pushes ahead on the investment agenda and future crises. targeted enterprise supports; and it has lots of scope for further measures as we work through the details with Government on Overall, the three main takeaways for business from the Budget the contingency funds for COVID-19 and Brexit. The next critical announcement were: steps are follow-up engagement to shape specific measures, • The significant funding to protect vulnerable parts of our starting with inputs to the National Economic Plan and work with experience economy the new Commission on Taxation and Social Welfare and through the review of the National Development Plan. • The increase in capital expenditure and focus on re- imagining our economic model • The continued investment in skills and training

26 Ibec Europe & Global Focus | Issue 15 | Autumn 2020

Ibec EU & International events and activities

Ibec EU and International events and activities

Ibec’s Brexit campaign connects members with high-level politicians, experts and technical expertise Our Brexit campaign intensified in the second half In order to provide practical guidance, up-to- of 2020, heightening the awareness of the unique date information and issue-by-issue analysis to issues which will face members at the end of the members, Ibec has developed two policy trackers. transition period against the backdrop of Covid-19 An updated Tracker on the Protocol on Ireland / and to continue to promote the interests and Northern Ireland and a new dedicated Tracker on priorities of Irish business as the UK prepares to the EU-UK Future Relationship. These trackers are leave the EU. continually updated as the issues are progressed to ensure members are kept abreast of the latest Our campaign focusses on three core developments. purposes: 1. To provide technical insights and tangible In addition, Ibec is holding a series of virtual understanding to members. events and briefings to provide practical guidance to members on the range of critical issues for 2. To enable member access to and facilitate business. As part of the programme, Ibec has exchanges with key policy actors and hosted dedicated sessions on customs, trade, stakeholders. and VAT preparations, international data transfers, 3. To facilitate business-to-business exchanges business readiness, the UK landbridge and on shared challenges, solutions and direct routes to the European continent, and the opportunities. all-island economy, among others. In support, the campaign has collaborated closely with key Our central priority, now and over the coming stakeholders and decisionmakers such as the months, is to provide members with clear and Revenue Commissioners, the Department for actionable guidance in preparation for 1 January Transport, the Department for Business, Enterprise 2021 through a comprehensive suite of planning and Innovation, the Data Protection Commission documents, a broad range of technical and and Minister for Foreign Affairs and Minister for political seminars and events and the ongoing Defence, Simon Coveney. insights and expertise available from our specialist staff on our four central themes of trade in goods, To read more about our campaign and to access trade in services, the all-island economy and the our full range of resources please consult our labour market. dedicated Brexit website.

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 27

Ibec EU & International events and activities

Events hosted by Ibec to increase member awareness and engagement with Brexit included;

Ibec webinar with Minister Simon Coveney With less than 100 days until the Brexit transition member organisations on 28 September, affording period ends, Ibec was pleased to welcome businesses the opportunity to outline their priorities Minister for Foreign Affairs and Minister for as the UK prepares to leave the EU. Defence Simon Coveney to a special broadcast to

Ibec webinars on customs and trade with Revenue As part of our Brexit & Future EU campaign, Ibec Division gave a technical briefing to members. On held two dedicated briefings on customs and trade 16 October, Commissioner Gerry Harrahill presented following the end of the Brexit transition period with the preparations businesses need to make to ensure the Revenue Commissioners. On 1 September, that trade can continue to move smoothly between Ray Ryan from the Brexit Unit of the Customs Ireland and Great Britain from January 2021.

28 Ibec Europe & Global Focus | Issue 15 | Autumn 2020

Ibec EU & International events and activities

Ibec webinar on data protection with the Data Protection Commission

Ibec webinar on business readiness with the Department for Business, Enterprise and Innovation

Ibec seminar on Irish marine freight with the Department for Transport and Irish Marine Development Office

Ibec Europe & Global Focus | Issue 15 | Autumn 2020 29 Ibec EU & International events and activities

Danny McCoy, Mairead McGuinness, Margrethe Vestager, Paschal Donohoe, Minister for Finance Ibec CEO Commissioner for Financial Stability, European Commission and President of the Eurogroup Financial Services and Capital Executive Vice President Markets Union Ibec and the CBI hold Joint Ibec in conversation with European Business Council (JBC) event Commission Executive Vice- ‘Business on a Connected Island’ President and Commissioner for with special guest Commissioner Competition Margrethe Vestager for Financial Stability, Financial and Irish Minister for Finance and Services and Capital Markets President of the Eurogroup Paschal Union Mairead McGuinness Donohoe On 20 October, the freshly confirmed Commissioner Ibec held a virtual event with European Commission McGuinness joined the Ibec-CBI Joint Business Executive Vice President Margrethe Vestager and Council ‘Business on a Connected Island’ as one Minister for Finance and President of the Eurogroup of her first ever engagements as Commissioner and Paschal Donohoe, as part of Ibec’s Reboot & delivered a keynote address. Other special guests Reimagine campaign series. at the event moderated by Danny McCoy, Ibec CEO, included RTÉ journalist Tony Connelly and Commissioner Vestager has overall responsibility Katy Hayward, an academic from Queens University, for Competition, a portfolio critical to Ireland and Belfast. our model of substance. Her brief also includes the European approach to data, artificial intelligence, cyber security, digital taxation and rules for digital British Embassy Dublin and Ibec platforms. The event also included a discussion on host joint Brexit Readiness Event the recent decision by the Commission to appeal In early November, as part of our Brexit campaign, the judgement in the Apple State Aid case. Ibec partnered with the British Embassy Dublin to deliver a UK Government Brexit business readiness Participants at the event also included Alastair virtual public event on 2 November. The event Blair, President of Ibec and Managing Director of provided practical information on UK systems and Accenture in Ireland, Jackie King, Executive Director, requirements, processes for goods moving through International Business, Ibec, Senator Regina Doherty, and Danny McCoy, ports, and the UK’s phased controls approach. Ibec CEO.

Members can listen to or watch back Ibec webinars on www.ibec.ie

30 Ibec Europe & Global Focus | Issue 15 | Autumn 2020

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