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EU Competitiveness Council: Post-Council Statement

Volume 603: debated on Tuesday 8 December 2015

My noble Friend the Under-Secretary of State for Business, Innovation and Skills (Baroness Neville-Rolfe) has today made the following statement.

The Competitiveness Council took place in Brussels on 30 November and 1 December. The UK was represented by Shan Morgan, deputy permanent representative to the EU.

Day one started with a “competitiveness check-up”. The presidency updated Council members on the outcomes of the Foreign Affairs Council (trade) on 27 November, where the Commission had said it was ready to use all available tools to tackle issues affecting the steel sector, including trade defence instruments (TDIs), third country dialogue and free trade agreements. The Commission announced that as a follow-up to the emergency steel council, the high-level group on energy intensive industries (EIIs) would be reconstituted and would meet on 18 December. This would be followed in early 2016 by a special stakeholder conference which would discuss the issues facing the steel sector in more detail. On steel the UK noted that it was looking forward to the stakeholder summit and that the recent extraordinary council had demonstrated that the Competitiveness Council was capable to reacting to real world events.

The Commission presented data on competitiveness in the EU, which highlighted that throughout the economic crisis the EU had retained a high share in global markets.

The UK intervened to highlight the productivity gap between the EU and the US which undermined the EU’s ability to compete and grow; this would be helped by removing barriers to trade in services. Other member states intervened to highlight the need to bring down barriers for start-ups and scale-ups and there was widespread support for the competitiveness check-up to remain a standing agenda item for future Competitiveness Councils.

The second item was an exchange of views on the Commission’s single market strategy. The Commission opened the discussion and highlighted the sectoral approach that it was taking on services, with a particular focus on construction and business services. The UK, alongside other likeminded member states, intervened urging the Commission to maintain their level of ambition, specifically on the services passport. The UK also noted the importance of proper enforcement of existing single market rules. One member state intervened to say that the strategy was not as strong as it ought to be on new business models. Several member states talked about the link between the single market and digital single market and the regulatory barriers in the sharing economy. There was one cautionary note from a member state who did not want to see the country of origin principle on services and was also cautious on company law issues. The discussion drew to a close with the Commission saying they were committed to rapid action on the single market, although it must be in conjunction with member states, who needed to redouble their efforts on domestic reform. Member states support for the Commission’s ambitions were a sign that the EU was serious about reform.

The afternoon session began with a presentation by the Commission on the proposal for a system of national competitiveness boards. While a large number of member states welcomed the Competitiveness Council discussing this proposal, there was concern that the boards could duplicate existing arrangements, thereby offering little value and imposing unnecessary cost and bureaucracy.

Three influential member states gave implicit support for the principle, as long as it remained flexible. Two other member states welcomed that the boards were open to all member states. The UK did not intervene. The presidency concluded that while there was broad support for structural reforms, the vast majority of member states had hesitations and doubts as to whether the boards are necessary or useful.

There were no more substantive items discussed on day one. The remaining agenda items were Commission updates to the council on a package to ensure emissions from diesel engines used in light vehicles reflected “real driving emissions” (RDE), proposals adopted by the Commission on the control, purchasing and possession of firearms and the work of the small and medium-sized enterprises envoy network.

Day one ended with a presentation on the priorities of the incoming Netherlands presidency. The Netherlands will prioritise work on the single market, digital single market and better regulation.

Shan Morgan also represented the UK on day two of the Competitiveness Council.

In response to the council conclusions on research integrity, the Commission reported that it would strengthen the European research model grant agreement to embed the principles set out in the conclusions.

The Commission welcomed the council conclusions on gender equality in research and urged member states to implement the measures therein as soon as possible. The UK supported the conclusions, as they highlight the importance of action in this area but do not impose mandatory targets or quotas, which would undermine the merit principle and conflict with the recommendations of the Davies review. The conclusions were accepted unanimously, though some countries commented that they would have preferred them to go further in the direction of legal or financial incentives and targets at EU level.

The UK intervened to support the conclusions on the governance of the European research area and called for the swift implementation of a number of reforms to streamline the reporting lines and governance of a number of committees in this area. These reforms, steered through by the UK co-chair of the European Research Area and Innovation Committee (ERAC), will bring to an end a protracted period of discussion on the subject.

The Commission then gave a presentation on the European fund for strategic investments (EFSI), outlining how it interacts with all other EU financial mechanisms: such as Innovfin—a joint initiative launched by the European Investment Bank—and the SME guarantee. This was followed by a round table discussion, in which the UK supported the principle of deploying innovative finance products to support research and innovation. Most member states commented that there was a need for more information on who received funding and how many research projects were being funded.

The incoming Netherlands presidency then outlined its priorities. It will focus on encouraging the EU and member states to invest more in research and development, creating the framework conditions for innovation and encouraging open science.