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INSIGHTS BRUSSELS
A regular update on key EU policy developments
Issue 28 – September 2016
Brexit and beyond
The legislative pipeline for financial services, energy and digital
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Brexit 	3
Where do we go from here?	 3
Financial Services	5
A rich but shaky legislative pipeline 	 5
Energy 	 10
Towards a redesigned European energy framework	 10
Digital 	 15
Towards a Digital Single Market by end of 2017	 15
2
Brexit
Few material changes have taken place in Brussels or Lon-
don since 52% of Brits voted to leave the European Union on
23 June. But behind the scenes, perceptions are shifting and
a world of uncertainty lies ahead of us. It has become clear
that the political leadership that raised the Brexit question did
not plan for the eventuality of the vote to leave the EU. The
complacency of David Cameron’s government is all the more
surprising given that, in the informed judgement of the Eu-
ropean Union Committee of the House of Lords, “withdrawal
from the EU is arguably the most complex, demanding and
important administrative and diplomatic task that the Gov-
ernment has undertaken since the Second World War”. The
select committee is now quite rightly pushing for Parliament
to have the right to scrutinise the withdrawal negotiations
and the future of the relationship between the UK and the EU.
The most visible and remarkable post-Brexit changes regard
the reshaping of the political power map. Firstly, the result
was swiftly followed in Westminster by the replacement of
UK Prime Minister David Cameron with Theresa May and
a subsequent cabinet reshuffle which saw the PM appoint
a brand new team, including new dedicated ministers for
international trade and managing Brexit, arch-Eurosceptics
David Davis MP and Dr Liam Fox MP. Prime Minister May
is however expected to drive the Brexit process directly by
chairing a special cabinet committee that brings together
Davis, Fox and new Foreign Secretary Boris Johnson MP.
Secondly, the UK’s Commissioner for Financial Services
Lord Hill resigned in the wake of the referendum result. Hill
will be replaced, subject to European Parliament endorse-
ment expected in September, by Sir Julian King, the former
Where do
we go from here?
3
British Ambassador to France. Sir Julian will be in charge of
the implementation of the European Agenda on Security. The
decision to place King in this position has been well received
as a move that plays to the UK’s strengths and elevates the
counter-terrorist agenda to a single Commissioner’s portfolio.
Thirdly, the UK has withdrawn from its duty at the helm of the
rotating presidency of the Council of the EU, which had been
scheduled for the second half of 2017. This responsibility will
now be taken on by Estonia. Finally, both the Council and the
Commission, in a typical Brussels intra-institutional power
struggle for leadership of the process, have each appointed
a chief negotiator. Didier Seeuws, a respected Belgian diplo-
mat and former Chief of Staff to previous Council President
Hermann Van Rompuy, takes on the mantle for the Council,
while the Commission has appointed Michel Barnier, a sea-
soned pro-European French politician and former minister,
who proved his capacity to negotiate with the British during
his tenure as European Commissioner for the Internal Market
and Financial Services.
Even before the formal withdrawal process has begun, the
less visible side of the Brexit story in Brussels is manifesting
itself in the gradual marginalization of British influence on a
number of pending policy decisions in the EU decision-mak-
ing process.
Before any action is taken, May’s government must first agree
on how to face this withdrawal procedure; when to trigger the
formal notification required by EU law, and indeed on which
goals to strive for. Beyond the legal and institutional scrutiny
of the decoupling process, different interpretations are being
elaborated on the steps to be taken and on the substance of
what the UK could and should put up for discussion as it
tries to redefine the nature and scope of its relations with the
EU. The creativity and skill of specialist EU lawyers will cer-
tainly be able to find plausible legal answers on how best to
frame any political decision that emerges, but legalism won’t
be a substitute for well-informed, thoughtful and transparent
political choices, ideally preceded by thorough parliamentary
scrutiny. The outcome of this process, whatever it may be,
will have to be negotiated by the European Council with the
material input of the Commission, be approved by a qualified
majority of EU member states in the Council of Ministers and
finally be backed by the European Parliament. Pre-existing
scenarios for EU-third party bi-lateral cooperation range from
the Swiss model, focusing on selected policy areas, to the
Turkish custom-specific model or the more comprehensive
free-trade Canadian model that has still to come into force. Ex-
amples of a more multilateral cooperation framework include
the case of EFTA countries within the European Economic
Area, which extends the EU internal market and several other
policy programmes to Norway, Iceland and Lichtenstein. The
default option of market access to EU countries would be to
fall back on World Trade Organisation rules. Some options,
such as UK accession to the EFTA-EEA agreement may be
less cumbersome to finalise, but all will come at a cost and
none of them can replicate the more favourable pre-Brexit
conditions.
The EU leadership in Brussels may be willing to afford the
UK some patience as the country gathers itself before launch-
ing into the formal procedure of withdrawal, but Brussels is
unlikely to accommodate a filibustering agenda that allows
the UK to cherry-pick the most favourable mutual recognition
rules and principles purely in its own interests, potentially
jeopardising the EU’s core principles.
Commission President Juncker’s State of the Union speech
on 14 September and the parliament debate that follows are
likely to publicly uncover the first real insights into the lines
that these two institutions intend to pursue going forward.
Two days later, on 16 September, the meeting of the other 27
Heads of State and Government in Bratislava will complete
the picture with preliminary national perspectives, and will
hopefully see the beginnings of a sorely needed common di-
rection on EU focus and approach.
There is general consensus that the EU cannot continue busi-
ness as usual by simply acknowledging the reduction of its
members. That said, there is little appetite for upheaval after
the clamour of recent months, and a busy agenda of national
elections in 2017 precludes a Copernican revision of the EU’s
workings in the short term. Although the administration of
Brexit will remain centre stage in Brussels for the foreseeable
future, the UK remains in the EU with all rights and obliga-
tions until the “divorce” is made official, at the current rate
not earlier than 2019. Even so, the most resounding signal
that the EU is continuing to fully apply its rule book, is given
by the 13bn euro tax bill just adopted by the Commission de-
claring unlawful the Irish “sweetheart” tax regime granted to
Apple. The decision opens the way to further investigations
on the alleged practices of Apple and other companies by Eu-
ropean and US tax authorities, while reinforcing the principle
that any national tax ruling allocating profits to an entity that
exists only on paper is a form of illegal subsidy. Moreover,
there are a number of new legislative proposals underway,
many crucial regulatory decisions to be taken and several
hundred executory acts to be finalised as part of the EU’s
day-to-day business. From energy to financial services and
the digital world, in the following pages we provide an update
on the most relevant legislative initiatives in the pipeline. We
remain available to support organisations in understanding
and navigating the Brussels arena and the interplay with rel-
evant national policy landscapes.
Leonardo Sforza
Managing Director, Head of
EU Affairs
4
Financial Services
The policy area for which Brexit presents the greatest chal-
lenges is Financial Services, where London’s €106tn volume
of business in trading and clearing euros only takes place
due to the City being in the EU. This will be one of the most
controversial elements of the negotiations between the EU
and the UK. The City is unlikely to safeguard its current
status without the UK making concessions in other areas of
interest for the EU such as the maintenance of the freedom
of movement and establishment for EU citizens.
The Capital Markets Union (CMU) Action Plan, presented
last year by the European Commission, outlines 33 new
measures deemed necessary to establish the building
blocks for an integrated capital market across the European
Union by 2019. The first progress report on CMU released
earlier this year does not take account of the new situation
emerging following the UK referendum and will require
re-assessment by the Commission.
A rich but shaky
legislative pipeline
5
1 Hill, J., 2016. Speech by Commissioner Jonathan Hill at the European
Parliament on the Capital Markets Union. European Commission. Available at:
http://europa.eu/rapid/press-release_speech-16-2529_en.htm
2 See the remarks by Vice-President Dombrovskis at the Atlantic Council.
Available at: http://europa.eu/rapid/press-release_speech-16-2574_en.htm
Ongoing consultations
Capital Markets Union: action on a potential
EU personal pension framework
27 July - 31 October
The consultation invites interested parties to provide
information on their experience using personal pen-
sion schemes and seeks the views of professionals
working in the pensions industry on the possibility
of offering more simple, affordable and transparent
personal pension products. The consultation will
enable the Commission to get a better view on what
can be done at EU level to support a wider choice of
personal benefit tools at retirement across borders.
Review of the EU macro-prudential framework
1 August-24 October
The framework under consultation consists of the
European Systemic Risk Board (ESRB) Regulations,
the Capital Requirements Directive IV (CRD IV),
the Capital Requirements Regulation (CRR) and
the Single Supervisory Mechanism (SSM). The
consultation focuses on refining the scope of
existing macro-prudential instruments (such as
capital buffers) and making the rules more consistent
with one another, as well as examining the role
and organisational structure of the ESRB and its
relationship with the European Central Bank.
Main barriers to the cross-borders distribution
of investment funds across the EU
2 June-2 October
The aim of the consultation is to define how best to
strengthen the single market passport for cross-bor-
der investment funds. The consultation seeks feed-
back from the public, including fund managers, in-
vestors and consumer groups, as well as from those
who market and sell these funds, in order to gain a
fuller picture of the remaining barriers to cross-bor-
der distribution (such as marketing rules, administra-
tive arrangements by host countries, regulatory fees
and notification rules).
Evaluation of the financial conglomerate
directive
9 June - 20 September
The consultation will gather evidence on whether the
Directive on the supplementary supervision of credit
institutions, insurance undertakings and investment
firms in a financial conglomerate, known as FICOD,
first adopted in 2002, is proportionate and fit for pur-
pose in its current form and delivering as expected.
>
>
>
>
There has been much speculation about how Brexit affects
Financial Services legislation for the EU, and specifically the
future of the Capital Markets Union, a pet project of the for-
mer British Commissioner Jonathan Hill. In his final speech,
however, Lord Hill was resolute, “It’s absolutely essential for
the European Union to continue diversifying the funding
sources for its economy, particularly with London outside
the EU,” urging the EU to stick with it, “to keep hammering
away at the barriers to free movement of capital for the years
ahead.”1
Despite the new challenging situation surrounding Brex-
it and the diverging views of other key Member States on
several technical aspects of CMU priorities, Commission
Vice-President Valdis Dombrovkis2, who has taken over re-
sponsibility for the Financial Services portfolio seems com-
mitted to pursuing the work initiated by Lord Hill in this area,
but the pace and scope of future work is unlikely to remain
as initially planned.
The launch of four new public consultations presents
a good opportunity for business and stakeholders to
make known their views and perspectives on future EU
initiatives in financial services, as outlined in the box to
the right.
Proposals to be Adopted
> Revised directive on “Institutions for
Occupational Retirement Provision” (IORP II)
The proposed revision of the IORP II directive was presented
by the European Commission in March 2014, mainly focus-
ing on the governance and transparency of the activities of
occupational pension institutions.
According to the rapporteur in the European Parliament,
Brian Hayes (EPP, Ireland), the final text will be voted on at
the plenary session in October 2016. EU member states will
have 24 months after the entry into force of the Directive to
transpose it into national legislation.
Timeline
March 2014: 	 Commission proposal
30 June 2016: 	 Council Agreement
October 2016: 	 Adoption in EP Plenary
2018: 	 Deadline for transposition in national law
6
> Regulation on a European framework for
Simple, Transparent and Standardised (STS)
Securitisation and a revision of the capital
calibrations for banks
With a view to opening up investment opportunities to a
wider set of non-bank investors, the Commission in Septem-
ber 2015 presented a proposal for the creation of a new regu-
latory framework to relaunch markets for STS securitisations
and for the revision of capital calibration for banks. The pro-
posals were agreed by the Council in December 2015 and are
currently awaiting the opinion of the European Parliament.
Following a Public Hearing on the regulation in the European
Parliament on 13 June, the rapporteur Paul Tang, (S&D, Neth-
erlands) expressed his concern that the examination of the
proposal by the Council was being rushed. In his draft report
he follows the proposal of NGO Finance Watch that at least
20% of the risk should be kept on the balance sheet of the is-
suer (the Commission proposal foresees only 5%). This pro-
posed higher threshold clearly divides the political groups,
with rapporteurs from GUE/NGL and Greens/EFA supporting
the proposal, while ECR and ALDE clearly oppose it.
Both pieces of legislation are provisionally scheduled to be
debated in ECON Committee on 9 November and in plenary
on 13 December for 1st reading/single reading.
Once a political agreement is reached between the co-legis-
lators, the Commission has announced its intention to also
revise capital charges for investments in STS securitisations
under Solvency II.
> Regulation on the modernisation of the
Prospectus Directive
In November 2015, the European Commission issued a pro-
posal to modernise the Prospectus Directive, aiming to reduce
the costs for smaller companies accessing the capital mar-
kets. The European Parliament’s Committee on Economic and
Monetary Affairs (ECON) published its draft report in March
2016. Rapporteur Petr Jezek (ALDE, CZ) and the ECON com-
mittee endorsed its draft negotiating position on 13 July, to
be submitted to plenary. The Member States agreed on their
general approach in the ECOFIN council meeting on 17 June.
Timeline
September 2015: Commission proposal
December 2015: 	Council agreement
November 2016: 	Adoption in EP Committee
December 2016: 	 EP Plenary Meeting for 1st/single reading
Under the new regulations proposed by the Commission,
issuers would no longer be obliged to create prospectuses
for issuances of less than €500.000, a threshold that Mem-
ber states could raise to €10 million. Where the Commission
want to limit this possibility purely to national issuances, the
Council’s proposal does not foresee this restriction, whereas
the European Parliament wants to limit it to €5 million.
In addition, the Commission’s proposal and the positions of
the European Parliament and the Council are still divergent
on the exact definition of who can make use of a lighter ver-
sion of prospectus, the EU Growth Prospectus and on the
exact qualification of risk factors.
After a formal approval of the negotiating mandate in EP ple-
nary, scheduled for 13 September 2016, the interinstitutional
negotiations can start. The Slovak Presidency aims to reach
a political agreement between the institutions before the end
of the 2016.
> Regulation on the Reform of Money Market
Funds
The commission adopted a proposal for a regulatory frame-
work for Money Market Funds (MMFs) in September 2013.
These funds serve as an important source of short-term fi-
nancing for financial institutions, business and governments,
but are also vulnerable to investor “runs” on redemptions
and have given rise to the misperception that their returns
are guaranteed. The proposed regulatory framework should
allow them to better withstand redemption pressures in
stressed market conditions, while ensuring that they remain
a secure tool for European companies to manage their finances.
After years of discussion, on 17 June 2016 the EU finance
	
Timeline
November 2015: 		 Commission proposal
17 June 2016 :		 negotiating mandate agreed at ECO		
		 FIN Council
13 September 2016: negotiating mandate agreed in 		
		 EP plenary
Autumn 2016: 		 start of inter-institutional 			
		negotiations
End 2016: 		 target date from Slovak Presidency 		
		 for Political agreement	
2017: 		 Entry into force of Regulation
2018: 		 Application of Regulation and dead		
		 line for transposition of elements in 		
		 national law
7
Timeline
September 2013: 	 Legislative Proposal published
April 2015: 		 negotiating mandate agreed in
		 EP plenary
May 2015: 		 Opening inter-institutional
		negotiations
June 2016: 		 Council position
Autumn 2016 : 		 expected start of the Trilogue
		negotiations
End 2016:		 target Slovak Presidency for political 	
		 agreement Council – European
		Parliament	
ministers reached an agreement on the negotiating mandate
for the Council, paving the way for trilogues with the Europe-
an Parliament to start shortly. The European Parliament has
been ready for talks since April 2015.
The discussions between the three institutions centre around
the issues of Constant Net Asset Value funds (CNAVs) and
the creation of a new type of money market fund, the Low
Volatility Net Asset Value Money Market Fund (LVNAV).
For CNAVs, the Commission wants to introduce a minimum
reserve of 3% of total assets in own funds. Both the Euro-
pean Parliament and the Council disagree with this, favour-
ing instead liquidity fees or redemption gates to be applied
only in times of stress. The Council is pushing in favour of
CNAVs which invest 99.5% of their assets in public securi-
ties, whereas MEPs are pushing for 80% of CNAVs assets to
be invested in public securities of EU countries.
With regard to LVNAVs, the EP wants to introduce a “sunset
clause” thereby forcing LVNAVs to be converted into Variable
Net Asset Value Funds (VNAVs) after five years.
After lengthy internal discussions whereby the UK, Ireland
and Luxembourg argued for less restrictive liquidity require-
ments on one side and France and Germany argued for more
regulation, the Council reached a compromise on a weekly
liquidity requirement of 30% for CNAVs and LVNAVs and of
15% for VNAVs, of which 15% may be made up of public se-
curities, going further than the original Commission proposal
which foresaw 20%.
The Slovak presidency aims to reach a political agreement
between the European Parliament and the Council before the
end of the year.
> Delegated Act on Key Information Documents
(KID) on Investment Products
On 30 June 2016, the Commission adopted a delegated act
with new rules specifying regulatory technical standards
on the content of methodology of the KID which must be
supplied, from 2017 onwards, to consumers wishing to in-
vest in a retail financial products. This delegated legislation
follows from the regulation adopted in November 2014 on
Packaged Retail and Insurance-based Investment Products
(PRIIPs). The Council and the European Parliament have
two months to object. Ten member states (including Germa-
ny and France) had asked for a longer implementation time
for industry and also inside the European Parliament there
is strong resistance to the current provisions of the delegat-
ed act, with the EPP, ALDE, ECR and Greens/EFA groups
threathening to table a motion of objection in the Septem-
ber plenary, which, if adopted, would even threaten the entry
into force » by « with the EPP, ALDE, ECR and Greens/EFA
groups having tabled a motion of objection, which, if adopted
in the September plenary, would even threaten the entry into
force of the PRIIPs regulation by January 2017.
> Enhanced Cooperation on a Financial
Transaction Tax (FTT)
Negotiations between the finance ministers of the 10 coun-
tries participating in the enhanced cooperation, are making
very slow progress. On 16 June 2016, the ministers decided
to set up two task forces to look into two controversial issues
still open in preparation of their next September meeting.
The first task force, which will be presided by Italy will look
into the possible impact of the tax on derivative products of
sovereign financing, a main concern of Belgium. The sec-
ond task force, led by Germany, will look at the implemen-
tation costs versus the anticipated revenue from the future
tax, which in particular Slovakia and Slovenia are sensitive
to. This new delay means that the self-imposed deadline for
political agreement by June 2016 was missed once again.
> Proposal on a Common Consolidated
Corporate Tax Base
On the basis of the public consultation in January 2016 on
the relaunch of the Common Consolidated Corporate Tax
Base, the Commission is expected to outline its legislative
proposal in the fourth quarter of 2016.
> Regulation amending European venture
capital funds (EuVECA) and European Social
Entrepreneurship Funds (EuSEF) regulations
Following the public consultation that closed in January
2016, the European Commission on 14 July 2016 published a
proposal for a Regulation amending the existing Regulations
on EuVECA and EuSEF, dating from 2013. The purpose is to
respond to problems encountered by the industry through the
application of the existing Regulations. The new Regulation
8
seeks to abolish the practice of member states levying charg-
es when a fund is registered. Also the definition of SME in
which a fund must invest 70% of the capital subscribed in
order to obtain the European Passport is relaxed. The pro-
posal will now be submitted to the European Parliament and
the Council. The first meeting of the Member States on the
topic of tax incentives for venture capital and business angels
is scheduled for Autumn 2016, to allow for an exchange of
views on best practices, on the basis of a study launched by
the Commission in January.
Banking
Union
CapitalMarketsUnion
Financial
Services
Timeline
2016 2017
Q3 Q4 Q1 Q2 Q3 Q4
PROPOSAL ON REDUCTION
OF FINANCIAL RISKS *
DIRECTIVE ON IORP II
REGULATION ON REFORM OF
MONEY MARKET FUNDS
REGULATION ON
PROSPECTUS
REGULATION ON STS
SECURISATION FRAMEWORK
PROPOSAL ON COMMON
CONSOLIDATED TAX BASE*
REGULATION amending
EuVECA and EuSEF
REGULATIONS
PROPOSAL ON
EU MACRO PRUDENTIAL
FRAMEWORK *
PROPOSAL ON
EU PERSONAL PENSION
FRAMEWORK *
PROPOSAL ON CROSS
BORDER DISTRIBUTION OF
INVESTMENT FUNDS *
EVALUATION FINANCIAL
CONGLOMERATE DIRECTIVE
* Nature of exact act not yet determined
REGULATION ON EUROPEAN
DEPOSIT INSURANCE
SCHEME (EDIS)
Commission
proposal
Council
agreement
EP
Committee
Position
EP
Plenary
Position
EP
Committee
Position
Adoption
Adoption
Trilogue negotations
Council exploring
possible use of
Intergovernmental
Agreement
Council
Position
EP Plenary
Position
Implementation
Implementation
Council
Position
Council
Position
EP
Position
Adoption
Adoption
Trilogue
negotations
Trilogue
negotations
Implementation
Implementation
Results Public
Consultation
EP
Committee
Position
EP
Committee
Position
Potential
Commission
proposal
Potential
Commission
proposal
Potential
Commission
proposal
Potential
Commission
proposal
Commission
proposal
Commission
proposal
Public
consultation
Public
consultation
Public
consultation
Public
consultation
Council
Position
Council
Position
Results
Results
Results
Results
EP Plenary
Position
Trilogue
negotations
EP Plenary
Position
FTT
FINANCIAL TRANSACTION
TAX (enhanced cooperation)
Setting up 2
Ministrial Working
Groups
Possible
Agreement
9
In the coming months, the European Commission will pres-
ent several major legislative proposals for the energy sector,
in order to give life to its five-pillar energy strategy present-
ed in 2015: realize an integrated internal energy market,
reduce Europe’s climate impact, improve energy efficiency,
strengthen security of supply and support innovation. To
fulfil these goals, the EU institutions will work on revising
the Emission Trading System, as well as the existing energy
efficiency and renewable energy directives. The EU legisla-
tors will also focus on a new set of measures for Europe’s se-
curity of supply, focusing on intergovernmental agreements
for gas companies and on a heating and cooling strategy, as
well as on liquefied natural gas. Key future policy develop-
ments are outlined below.
The uncertainty thrown up by Brexit is reflected in the fact
that private investors will likely hold back on large energy
projects until they have assurances about the environment
they will be operating in. By way of example, the UK has
Energy
already seen a 20% decline in value of infrastructure con-
tracts for July compared with the previous month. Leaving
the single market could also open the UK to new import
taxes, adding cost to equipment such as foundations for
offshore wind farms or parts for nuclear plants. There are
some silver linings for the UK energy sector though. Brex-
it would eliminate the EU’s trade duties on Chinese solar
equipment imports, making cheap panels more accessible
to UK users. The UK unshackling itself from Brussels might
also mean companies and investors are granted more free-
dom to access local public subsidies, or pursue energy pro-
jects such as for shale gas which are currently submitted to
EU environmental assessment. Meanwhile, in the legisla-
tive landscape, the Commission’s climate policy - the blue-
print for sharing out the 40% by 2030 greenhouse gas target
among the 28 member states – is now likely to be postponed,
along with inter-institutional negotiations on the emissions
trading system.
Towards a redesigned
European energy
framework
10
An integrated internal energy
market
> Directive on an Electricity Market Design
In the second half of 2016 the European Commission is
expected to present a draft directive on Electricity Market
design to improve the full integration of new market players,
focusing particularly on renewables. The aim is to allow the
electricity market to manage large-scale cross-border flows
and greater volumes of intermittent electricity from renew-
able sources.
Ahead of the formal presentation by the Commission, the
Energy Ministers within the Council of the EU and the Eu-
ropean Parliament have already shared their preliminary
views. The Ministers indicated in April that a stronger con-
nection with neighbouring countries would allow Member
States to better share capacities in renewable energies,
while increasing the security of supply and ensuring a sit-
uation of fair competition for all producers. The European
Parliament presented an own-initiative report on this issue
in June, the adoption of which is expected in September.
MEPs indicate that the redesign must be guided by mar-
ket-oriented and long-term measures to ensure that the
supply of electricity is balanced against distortions and to
better integrate renewables in the market.
> Proposals for a new Renewable Energy Package
Building on the agreed target of 27% renewable energy in
the EU energy mix by 2030, the European Commission in-
tends in 2016 to put forward a new renewable energy pack-
age, comprising a new renewable energy directive for 2030
and a proposal on bioenergy sustainability. The package
is expected to progressively harmonise national support
schemes for renewables, with the objective of addressing
market distortions and avoid overcompensation.
Stakeholders and citizens were consulted in the first months
of 2016 on an updated EU policy on sustainable bioener-
gy for the period 2020-2030. Concerns among respondents
were raised regarding the sustainability impacts and com-
petition for resources caused by the increasing reliance on
bioenergy production and use. According to the items put
forward in this consultation, the Commission’s upcoming
proposal may address several sustainability risks, including
lifecycle greenhouse gas emissions from bioenergy produc-
tion and use, impacts on the carbon stock of forests and
other ecosystems, impacts on biodiversity, soil, water and
emissions to the air, as well as impacts on competition for
the use of biomass between different sectors (energy, indus-
trial uses, food). The full results of the consultation are ex-
pected to be published soon.
The results of the complementary consultation on a renewa-
ble energy directive for the period after 2020 show that there
is a need for a stable and predictable EU legal framework for
renewable energy policies, as well as strong support for ad-
ditional EU action on empowering energy consumers, by al-
lowing them to produce and store their own renewable heat
and electricity and participate in all relevant energy markets
and projects in a non-discriminatory and simple way. Final-
ly, there is a broad consensus on the need to decarbonise
the heating and cooling sector, as well as to increase renew-
able energy use in the transport sector.
Furthermore, on 23 June, the Parliament maintained high
ambitions on renewable energy goals by adopting a resolu-
tion which plans to set the goal of 30% of renewable con-
sumption in the energy mix as the minimum objective for
2030.
Both consultations and this resolution will feed the decision-
making process which will result in the presentation of the
package by the end of 2016.
Climate action
> Directive on EU Emissions Trading System
The European Parliament and the Council of the EU are cur-
rently discussing a proposal presented in July 2015 by the
Commission to revise the EU Emissions Trading system for
the period after 2020. The proposal intends to increase the
pace of emissions cuts after 2020 by reducing the overall
number of emission allowances at an annual rate of 2.2%
from 2021 onwards, instead of 1.74% currently. This shall
result in an automatic increase of carbon costs, impacting
energy intensive industries in particular.
Timeline
September: 	 adoption of the EP own-initiative report
End 2016 : 	 Directive proposal by the Commission
Early 2017: 	 Expected EP Committee position
Mid 2017: 	 Expected Council position
End 2017: 	 Expected formal adoption
	
Timeline
September: 	 Publication of the results of the renewable 	
	 energy directive consultation.
End 2016 : 	 Renewable Energy Package proposal by 		
	 the Commission
Early 2017: 	 Expected EP Committee position
Mid 2017: 	 Expected Council position
End 2017: 	 Expected adoption of package
11
In the Council, the proposal was addressed at working
party level under the Dutch Presidency (from January to
July), and Environment Ministers held a policy debate on
the proposal on 20 June 2016. They underlined the impor-
tance of flexibility so that the EU can adapt its level of am-
bition under the dynamic ambition mechanisms of the Paris
Agreement. Discussions will continue under the Slovak
Presidency which started on 1 July. Within the Parliament,
the draft report of the environment committee (ENVI) was
presented at the end of May. In line with the dynamic nature
of the Paris Agreement, the draft report proposes a review
clause for the linear reduction factor, which could lead to a
revision following the first global stocktake in 2023. It calls
on the Commission to consider the impact of overlapping
EU climate and energy policies, and proposes to place al-
lowances in the Market Stability Reserve (MSR) in case of
the closure of power plants.
The Environment (ENVI) and Industry, Research and Ener-
gy (ITRE) committees, both in charge of this dossier, will
discuss the amendments on the draft report from September
for a vote expected in October (ITRE) and December 2016
(ENVI).
Energy efficiency
> Directive on Energy Efficiency
In 2016 the Commission intends to reap the full potential of
energy efficiency by putting forward a new energy efficien-
cy directive. The proposal, to be presented at the end of the
year, will align the regulatory framework to the indicative
EU-level target of at least 27% energy efficiency by 2030.
It will also include provisions for large companies to carry
out regular energy audits. Without waiting for the propos-
al to be presented, the European Commission has already
announced that it will be reviewed a second time by 2020
with the objective of upping the EU target to 30% energy
efficiency by 2030.
The results of a public consultation on this issue held by
the Commission at the beginning of 2016 show that stake-
holders agree that the energy efficiency directive of 2012
established a comprehensive framework for the EU. The
majority also believes that the Energy Efficiency Obligation
Schemes set by the directive are an effective instrument
to achieve energy savings. However, participants indicat-
ed that the present framework remains complex, and that
Member States require additional guidance.
On 23 June, the Parliament adopted a resolution on “energy
efficiency”. It stresses the need for the full implementation
of the existing EU legislation for the EU to meet its energy
efficiency target by 2020 (an increase of 20% by 2020), while
calling for a binding target of at least 30% of renewables in
the EU energy mix by 2030. This recommendation will feed
into the legislative proposal that the Commission is expect-
ed to present this autumn.
> Directive on Energy Labelling
In July 2015, the European Commission proposed a revi-
sion of the energy labelling directive, including provisions
for a single energy labelling scale from ‘A to G’ and a digital
database for new energy efficient products. For producers,
the new measures imply that they will have to sell their new
products with the new scale and register their products in a
database accessible to Member State authorities to facilitate
compliance checks.
The legislative work is now ongoing under the co-decision
procedure between the European Parliament and the Coun-
cil of the European Union. In plenary session on 6 July, the
European Parliament adopted its report with amendments
to the draft Regulation setting a revised framework for the
energy efficiency labelling system introduced in 1995. The
Parliament backs the reintroduction, in the course of the
next five years, of the system labelling energy efficiency
from A to G to replace the current A+, A++, A+++ etc. sys-
tem. These rescaled labels should be introduced within a
timescale of between 21 months and 6 years, depending on
product type, following entry into force of the new Regu-
lation. Negotiations within the Council of the EU will take
place in the coming months under the Slovak Presidency,
with adoption expected in 2017.
	
Timeline
September: 	 Consideration of amendments in the 		
	 environment and industry committees 		
	 of the Parliament.
October : 	 ITRE Committee position
December: 	 ENVI Committee position
Early 2017: 	 Trilogue negotiations
End 2017:	 Expected adoption
Timeline
Autumn: 	 Commission directive proposal
Early 2017 : 	 Expected EP committee position
Mid 2017: 	 Expected Council position
End 2017:	 Vote in plenary session and expected adoption
Timeline
End 2016: 	 Council position
Early 2017: 	 Trilogue negotiations
2017:	 Expected formal adoption
2018: 	 Deadline for transposition
12
Security of Supply
On the 16 of February, the European Commission presented
its ‘’Winter Package’’, also known as the ‘’Security of Gas
Supply Package’’. It contains several measures aimed at im-
proving the resilience of the EU to breaks in gas supply, as
certain countries and regions of the European neighbour-
hood remain instable, for example Ukraine. Two legislative
proposals, as well as two strategies for Liquefied Natural
Gas (LNG) and for heating and cooling, are part of this strat-
egy.
> Regulation on Security of Gas supply
With its Security of Gas Supply Package presented last
winter, the Commission’s goal is to lessen Europe’s vulnera-
bility and dependence on its neighbours by diversifying its
sources of supply. To this end, it includes two legislative
proposals: a revision of the Regulation on the security of
gas supply, and a decision on Intergovernmental Agree-
ments (IGAs) in energy.
These proposals aim to increase solidarity between Mem-
ber States in case of serious crises, by guaranteeing that
they provide energy for homes and essential services, such
as health care. They also seek to move from a national to
a regional approach for the design of security of supply
measures, while improving transparency of gas markets,
especially regarding the conclusion of relevant contracts
between gas companies. According to Energy Commis-
sioner Miguel Arias Canete, the Commission and Member
States will have to be notified of any trade contract of more
than one year’s duration and involving a market share that
is significant to security of supply. Indeed, the Commission
is proposing to create a mechanism for obligatory pre-con-
sultation by Member States before such agreements are
signed. In June, the European energy ministers reached a
compromise on this mechanism, agreeing that the ex-ante
assessment by the Commission of IGAs will apply only to
gas agreements and will take no more than between six and
twelve weeks. This agreement on the general approach will
allow the Council to start negotiations with the European
Parliament with a view to the final adoption of the proposal
in 2017. Within the Parliament, the industry and research
committee is expected to present its draft report on the Reg-
ulation concerning measures to safeguard the security of
gas supply in the coming months.
> Strategy for Liquefied Natural Gas and Gas
Storage (LNG)
A strategy on improving access to Liquefied Natural Gas
(LNG) and the use of gas storage is also part of the Security
of Gas Supply Package. The strategy seeks to present how
the EU should exploit the LNG global market and reduce
regional disparities in terms of access to this alternative
source, notably by reducing the dependency of the Baltic
states on Russia. Strategic infrastructure will be built in var-
ious regions, such as South-Eastern Europe and the Baltic
Sea area. On 13 July, the European energy ministers reached
a consensus on the future key role of LNG, agreeing that the
EU must continue with the construction of infrastructure
and interconnections, particularly the north-south link and
the development of several LNG terminals in Greece and
Croatia, as well as the development of links between LNG
capacity in Spain and the main energy corridors.
> Strategy for heating and cooling
Heating and cooling accounts for around half of the EU’s
energy use and is expected to remain the largest energy de-
mand driver in the long term. While uncertainties remain as
regards the role of heating and cooling in meeting the 2030
targets, the heating or cooling market is also fragmented
and no single market has so far emerged either nationally or
EU-wide. Instead, heat markets are local and are composed
of many different technologies and economic players.
In this context, the European Commission released in early
2016 a Strategy for heating and cooling (within its “Winter
Package” for the security of supply) to drive the transforma-
tion of the sector, maximise the use of potentials and de-
ploy solutions for demand reduction. It gives guidance to
allow driving actions by stakeholders and Member States
on areas where better synergies between current EU instru-
ments could be exploited or where EU and national regula-
tory frameworks would need to be complemented.
On the 12 July 2016, the European Parliament adopted a
resolution in which it states that heating and cooling sys-
tems must be modernised to make more use of renewable
energy and new technologies. The Parliament calls on the
Commission to do more to raise awareness among consum-
ers of the often low performance of their installed heating
systems and to increase the modernisation rate of existing
heating and cooling systems. MEPs also encourage mem-
ber states to put in place tax and financial mechanisms for
the development and use of urban heating and cooling sys-
tems. The Commission should also better integrate smart
	
Timeline
End 2016: 	 Slovak presidency to encourage preliminary
	 Trilogue negotiations.
Early 2017:	 Expected EP position
Mid 2017: 	 Expected Council position	
End 2017:	 Expected adoption of both legislative 		
	proposals.
13
Ongoing consultations
Consultation regarding the 2009 Directive
imposing an obligation on Member States to
maintain minimum stocks of crude oil and/or
petroleum products.
27 July - 31 October
The 2009 directive imposes an obligation on Member
States to maintain stocks of crude oil and/or petro-
leum products. With this consultation, the European
Commission is collecting views and suggestions
from stakeholders and citizens in the context of the
current evaluation of the directive. The general ob-
jectives of the evaluation are to assess how the Oil
Stocks Directive has been implemented in the Mem-
ber States and how it is functioning in practice, and
to identify possible problems and areas for improve-
ment or simplification.
Consultation on the development of network
codes and guidelines for 2017 and beyond.
18 July – 14 October
The objective of this consultation is to consult
stakeholders on the priorities for the development of
network codes and guidelines for 2017 and beyond.
The European Commission has to establish in
accordance with its “Electricity Regulation” and its
“Gas Regulation” an annual priority list identifying
the areas to be included in the development of
network codes.
>
>
technologies in relevant energy union initiatives to ensure
real interconnectivity of smart appliances, connected homes
and smart buildings with smart grids, MEPs say. Although
the strategy does not announce any new legislative propos-
als, it presents some steps that the European Commission
may consider in the process of revising existing energy leg-
islation.
Research and Innovation
> Strategy on research, innovation and
competitiveness
The European Commission is planning to develop a com-
prehensive research, innovation and competitiveness strat-
egy for the Energy Union, as the fifth pillar of the Energy
Union. It held a public consultation from March to May in
order to gather stakeholders’ views on how to achieve the
EU’s energy and climate targets, as well as sector-specific
research, development and innovation goals needed for the
EU transformation. The findings, scheduled to be released
by 30 September, will feed into the integrated Research, In-
novation and Competitiveness strategy to be presented at
the end of 2016. This strategy will provide recommenda-
tions on how to reduce EU’s emissions and use of energy,
while maintaining the competitiveness of economic sectors
including energy and transport but also industry, agricul-
ture, bioeconomy and construction.
The European Commission has also launched two public
consultations regarding energy issues, allowing the stake-
holders to make their voice heard.
InternalEnergy
Market
Energyefficiency
&climate
Supply
Security
Energy
Timeline
2016 2017
Q3 Q4 Q1 Q2 Q3 Q4
DIRECTIVE FOR AN
ELECTRICITY MARKET
DESIGN
DIRECTIVE FOR A REVISED
EU EMISSION TRADING
SYSTEM
LEGISLATIVE PROPOSAL
ON BIOENERGY
SUSTAINABILITY
DIRECTIVE ON ENERGY
LABELLING
DECISION ON IGAS
DIRECTIVE ON RENEWABLE
ENERGY
DIRECTIVE FOR ENERGY
EFFICIENCY
REGULATION ON SECURITY
OF GAS SUPPLY
EP Committee
preliminary position
EP Committee
Position
EP Plenary
Position
EP Plenary
Position
Consultation results
Commission
Proposal
Commission
Proposal
Preliminary inter-institutional
negotiations
Commission
Proposal
Commission
Proposal
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
National transposition
National transposition
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
14
In the second half of 2016, the European institutions will
enter the final stretch; releasing, adopting or making signifi-
cant progress in the negotiations over the remaining legisla-
tive proposals completing the Digital Single Market. While
some major proposals, such as the Regulation on geoblock-
ing or the cross-border portability of online content, are
about to enter the decisive phase of trilogue negotiations,
Digital
the European Commission will also present its long-await-
ed proposal on copyright reform in September, adapting
intellectual property rules to the ever-evolving online en-
vironment. European stakeholders are expected to actively
contribute to the debate given the many financial, legal and
cultural interests at stake.
Towards a Digital
Single Market by
end of 2017
15
E-Commerce and Online Services
> Regulation on phasing out Geo-blocking
According to the European Commission, only 37% of web-
sites allow consumers to make online purchases in another
Member State than their own. The European Commission
considers this “geo-blocking” practice to be unjustified
because it fragments the internal market, preventing con-
sumers from buying products that are only available out-
side of their own Member State. In an effort to address
these shortcomings, the European Commission presented
in May this year a proposal for a Regulation to phase out
unfair geo-blocking, introducing the “same place, same ser-
vice, same conditions” principle: it will oblige traders to sell
under the same conditions as in their home countries, with-
out discrimination on access to prices, sales or payment
conditions. The new rules will apply to all European and
foreign companies operating in the European market.
The European Parliament is currently elaborating its po-
sition on the dossier within its Internal Market Committee
under the leadership of the rapporteur Róża Maria Gräfin
von Thun und Hohenstein (EPP, Poland). MEPs have al-
ready said in a resolution that geo-blocking was unjustified
and that the practice should stop. While the Parliament is
likely to support the Commission pro-consumer approach,
the Council of Ministers is expected to adopt a stronger
pro-business stance on the dossier, as the sensitive issue
of phasing out geo-blocking impacts the business model of
many online service providers. The Slovak Presidency of
the Council stated that it will try to reach a common posi-
tion on the proposal by the end of the year before starting
the negotiations with the Parliament. The adoption of the
Regulation is therefore not expected before Spring 2017.
> Regulation on Cross-border Portability of
Online Content Services
Films, music or e-books purchased in one EU country are
not systematically accessible when people travel to other
Member States, for example on holidays or a business
trip. Considering this as an obstacle to free movement of
goods, the European Commission presented a proposal for
a Regulation to allow cross-border portability of online con-
tent services in December last year. In practice, the Regu-
lation will enable consumers with subscriptions to online
content to access it when they are temporarily in another
EU country.
The European Parliament and the Council of Ministers al-
ready adopted their position on the proposal and will start
inter-institutional negotiations in September with a view
to reaching an agreement by the end of the year. The ne-
gotiations are not expected to be difficult, as the European
Parliament and the Council share the same approach on the
sensitive notion of “temporary presence” in another Mem-
ber State. Some Members of the European Parliament advo-
cated for a strict definition to a certain number of days, but
both the Parliament and the Council agreed to not define
the notion of temporary period abroad and call for “compul-
sory and effective” controls. They also both propose a strict
definition of the country of residence and call on service
providers to carry out checks on the basis of a range of cri-
teria, such as the invoice address, bank account, payment
of local taxes or samples of the IP address. They eventually
explain that the new obligations applicable to service pro-
viders should not lead to increased administration costs and
that the principle of territoriality must continue to prevail.
> Proposal on copyright enforcement
On 21 September, the Commission is expected to present a
legislative proposal on the enforcement of the legal frame-
work of intellectual property rights (IPR). The proposal in-
tends to review the functioning of the previous Directive
on the enforcement of intellectual property rights (IPRED),
aiming to adapt its provisions to the ever-evolving online
environment and to propose corrective measures. Among
the concrete actions envisaged, the European Commission
has already asserted that it will focus on commercial-scale
infringements to strengthen the protection of all IPR. In
this respect, the European Commission intends to adopt
a ‘fol­low the money’ approach aimed at depriving infring-
ers of revenue flows. In particular, it will suggest that all
websites hosting videos such as YouTube, Dailymotion and
Facebook, seek to conclude, in good faith, agreements with
the rights holders that reflect the economic use value of the
	
Timeline
November: 	 expected Council position on the proposal
End 2016: 	 expected Parliament position on the proposal
Early 2017: 	 expected start of the Trilogue negotiations
Spring 2017:	 expected agreement on the regulation
Mid 2017: 	 expected formal adoption of the regulation
July 2018: 	 expected entry into force of the regulation
	
Timeline
September: 	 start of the Trilogue negotiations
End 2016 : 	 expected agreement on the decision
Early 2017: 	 expected formal adoption of the decision
Mid 2017: 	 expected start for the implementation of 		
	 the regulation
16
protected work in question. According to preliminary drafts,
the Commission will also put forward measures to strength-
en the online rights of newspaper publishers by providing
them with the possibility of seeking financial compensation
from search engines and Internet Platforms such as Google
News.
The European Commission is close to releasing its propos-
al. A public consultation on this issue was opened during
the first half of 2016. On 21 June 2016, the Commission
held a further ‘Intellectual Property Rights Enforcement
Conference’ where key European and international decision
makers gathered to review the progress made in disrupting
IP infringing activities at the source and ensuring supply
chain integrity. All these inputs will help the European
Commission complement its proposal before presenting it
to the European Parliament and the Council of the European
Union in a normal co-decision procedure which is expected
to span the duration of 2017.
> Directive on Audiovisual Media Services
The European Commission in May proposed an update to
EU audiovisual rules to make them more flexible on adver-
tising time, to protect children and to subject subscription
video services to demands on the promotion of European
works. In terms of advertising, the Commission is propos-
ing that programs can be interrupted by adverts every 20
minutes, instead of the current 30 minutes. It also allows TV
chains to extend the length of advertising spots by applying
the current 20% threshold from 7am to 11pm. Product place-
ment and promotion will also be authorized, in an effort to
“create a level playing field with the US”. As regards the
promotion of European content, the Commission’s proposal
imposes video on demand services (VOD) such as Netflix or
Amazon Prime to broadcast at least 20% of European con-
tent. The Commission also empowers the Member States
where such VOD services are available, to require such
companies to make a financial contribution to local cinema.
While the European Parliament is just starting to construct
its position on the dossier, EU culture ministers held a first
debate on the proposal where they mostly welcomed the
Commission’s approach on audiovisual media services.
The main difficulties for the coming months are expected to
be around quotas for European works. While Finland, Den-
mark and Sweden wondered whether it was worth putting
in place quotas for European works on video on demand
services, France, which applies a 60% quota inside its bor-
ders, took the view that the Commission proposal did not go
far enough. This issue will have to be resolved before reach-
ing a common position on the proposal either by the end of
this year, or early 2017. Interinstitutional negotiations will
then start thereafter for a potential final adoption in mid-
2017.
Networks and Cybersecurity
> Decision on the 700MHz Band
Back in February 2016, the European Commission released
a proposal for a decision to coordinate the so-called radio
spectrum which allocates the use of the Ultra High Fre-
quency (UHF) 700 MHz band. The band is currently used
by terrestrial broadcasting and mobile networks, and will be
fundamental in coming years for the development of many
new technologies requiring radio spectrum allocation (such
as the Internet of Things, the cloud systems, the digitali-
sation of industrial sectors or e-government). However, the
national management of the spectrum has resulted in very
different conditions between individual Member States. In
	
Timeline
September: 	 expected Commission proposal
Mid 2017: 	 expected Parliament and Council positions 	
	 on the proposal
Fall 2017:	 expected start of the Trilogue negotiations
End 2017: 	 expected agreement on the directive
	
Timeline
Early 2017 : 	expected Parliament and Council positions 	
	 on the proposal
Spring 2017: 	expected start of the Trilogue negotiations
Mid 2017:	 expected agreement on the directive
Fall 2017: 	 expected formal adoption of the directive
Fall 2018: 	 deadline for the implementation of the 		
	directive
	
Timeline
September: 	 start of the Trilogue negotiations
End 2016 : 	 expected agreement on the decision
Early 2017: 	 expected formal adoption of the decision
2022: 	 expected deadline for the allocation of 		
	 694-790 MHz to mobile services
2030: 	 expected deadline for the allocation of 		
	 470-694 MHz to TV broadcasters
17
order to allocate the UHF band in a harmonised manner,
the Commission proposed to reorganise its allocation by
dividing it into two parts: the upper part of the spectrum
(694-790 MHz) will be devoted from 2020 or 2022 exclusive-
ly to mobile operators, including new technologies, while
audiovisual services and TV broadcasters will be moved to
the lower part (470-694 MHz) until 2030.
In September, the draft decision will be subject to inter-in-
stitutional negotiations between the European Parliament
and the Council of Ministers. The European Parliament
supports the proposal in a recent draft report prepared by
Patrizia Toia (S&D, Italy), in which it suggests only minor
changes to the timeline of implementation. The Council of
Ministers also accepts the essence of the Commission’s pro-
posal but is vying for greater flexibility: the Member States
will have a maximum of two years to allocate the upper part
of the spectrum (694-790 MHz) to mobile services and they
will have until 2018, rather than 2017, to adopt national
roadmaps. The negotiations are expected to be completed
by the end of year.
> Regulation on cross-border Parcel Delivery
In May, the European Commission presented a proposal for
a Regulation to increase price transparency and regulato-
ry oversight of cross-border parcel delivery services so that
consumers and retailers can benefit from more affordable
deliveries and convenient return options even to and from
peripheral regions. The Commission justifies its proposal
on the premise that almost 4 billion parcels are ordered on-
line every year in the EU, but very few citizens order parcels
from other Member States, as the costs are broadly consid-
ered too expensive.
The proposal intends to give national postal regulators
the data they need to monitor cross-border markets and
check the affordability and cost-orientation of prices. It
will also encourage competition by requiring transparent
and non-discriminatory third-party access to cross-border
parcel delivery services and infrastructure. As part of the
measures enclosed in its proposal, the Commission will
also publish publicly listed prices of universal service pro-
viders to increase peer competition and tariff transparency.
The Commission plans to take stock of progress made in
2019 and assess if further measures are necessary.
The European Parliament and the Council of the Europe-
an Union are just starting to develop their internal position
before entering into inter-institutional negotiations. Within
the European Parliament, the file has been assigned to the
Committee on Transport and Tourism (TRAN) and the ap-
pointment of a rapporteur is pending. The 28 responsible
EU Ministers will discuss the proposal at their next Telecom
Council meeting on 2 December.
> Directive on e-privacy
Following the formal adoption of the Data Protection Reform
in April, the Commission intends to present a proposal for
directive to reform privacy rules online in November. Its aim
will be to align with the recent data protection reform, and
will focus more on enhancing security and confidentiality of
electronic communications, in particular regarding cookies,
traffic and location data.
With a view to complement its legislative proposal before
presenting it this autumn, the European Commission held a
public consultation from April to July to seek stakeholders’
views on the possible changes to the existing legal frame-
work to make sure it is up to date with the new challenges
of the digital arena. Stakeholders and telecom groups have
already expressed their concerns about the revision of the
current directive, which could increase Regulation of their
sector while not imposing similar rules on big internet com-
panies.
> Revision of the Telecoms Package
The Commission announced it will present its proposals
for a revision of the ‘telecoms’ package in November this
year. While provisions on roaming charges and net neutral-
ity were set out in last year’s package, the European Com-
mission plans to revise the telecom regulatory framework
by tackling the issue of the wholesale market mechanism
for roaming, introducing investment incentives in ultrafast
broadband and ensuring openness of the telecom market to
new market entrants.
	
Timeline
Early 2017: 	 expected Parliament and Council positions 	
	 on the proposal
Spring 2017: expected start of the Trilogue negotiations
Mid 2017:	 expected agreement on the regulation
Fall 2017: 	 expected formal adoption and entry into 		
	 force of the regulation
2019: 	 progress report on the implementation of 		
	 the regulation
	
Timeline
November: 	 expected Commission proposal
Mid 2017: 	 expected Parliament and Council positions 	
	 on the proposal
Fall 2017:	 expected start of the Trilogue negotiations
End 2017: 	 expected agreement on the directive
18
Timeline
November: 	 expected Commission proposal
Mid 2017: 	 expected Parliament and Council positions 	
	 on the proposal
Fall 2017:	 expected start of the Trilogue negotiations
End 2017: 	 expected agreement on the directive
The European Commission completed two public consul-
tations last year on broadband needs and the review of the
current telecoms framework. It covered all three main pillars
of the current framework, namely the network pillar, with
the aim of ensuring a consistent regulatory framework that
is supportive of infrastructure investments in both fixed and
wireless networks; the service pillar, with the aim of ensur-
ing a modernised regulatory regime for electronic commu-
nication services and the governance pillar, with the aim of
ensuring that markets are regulated in a consistent manner
across the EU.
The revision of the ‘telecoms’ package may be the last leg-
islative item out of an agenda of 16 identified actions in the
Commission Digital Single Market strategy. Its adoption is
not expected before the end of 2017.
Cross-BorderE-commerceNetworks&Infrastructures
Digital
Single Market
Timeline
2016 2017
Q3 Q4 Q1 Q2 Q3 Q4
REGULATION PHASING OUT
GEO-BLOCKING
DECISION ON THE
700MHZ BAND
REGULATION ON CROSS-
BORDER PORTABILITY OF
ONLINE CONTENT
PROPOSALS TO REVIEW
THE TELECOM PACKAGE
PROPOSAL TO REFORM
THE COPYRIGHT REGIME
REGULATION ON CROSS-
BORDER PARCEL DELIVERY
DIRECTIVE ON
AUDIOVISUAL MEDIA
SERVICES DIRECTIVE
DIRECTIVE ON E-PRIVACY
EP Committee
Position
Commission
Proposal
Commission
Proposal
Commission
Proposal
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
National
Transposition
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
Council
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
EP Committee
Position
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
Adoption
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
EP Plenary
Position
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Trilogue
negotiations
Implementation
Implementation
Implementation
Implementation
19
I
N
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ruSsels
IGHTSB
ruSsels
I
N
SIGHTSB
ruSsels
I
N
SIGHTSB
ruSsels
I
N
SIGH
Leonardo Sforza
leonardo.sforza@mslgroup.com
Olivier Hinnekens
olivier.hinnekens@mslgroup.com
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romain.seignovert@mslgroup.com
Alastair Bealby
alastair.bealby@mslgroup.com
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Insights Brussels - Brexit and Beyond

  • 1. I N SIGHTSB ruSsels I N SIGHTSB ruSsels I N SIGHTSB ruSsels I N SIGHTSB ruSsels INSIGHTS BRUSSELS A regular update on key EU policy developments Issue 28 – September 2016 Brexit and beyond The legislative pipeline for financial services, energy and digital
  • 2. I N SIGHTSB ruSsels I N SIGHTSB ruSsels Brexit 3 Where do we go from here? 3 Financial Services 5 A rich but shaky legislative pipeline 5 Energy 10 Towards a redesigned European energy framework 10 Digital 15 Towards a Digital Single Market by end of 2017 15 2
  • 3. Brexit Few material changes have taken place in Brussels or Lon- don since 52% of Brits voted to leave the European Union on 23 June. But behind the scenes, perceptions are shifting and a world of uncertainty lies ahead of us. It has become clear that the political leadership that raised the Brexit question did not plan for the eventuality of the vote to leave the EU. The complacency of David Cameron’s government is all the more surprising given that, in the informed judgement of the Eu- ropean Union Committee of the House of Lords, “withdrawal from the EU is arguably the most complex, demanding and important administrative and diplomatic task that the Gov- ernment has undertaken since the Second World War”. The select committee is now quite rightly pushing for Parliament to have the right to scrutinise the withdrawal negotiations and the future of the relationship between the UK and the EU. The most visible and remarkable post-Brexit changes regard the reshaping of the political power map. Firstly, the result was swiftly followed in Westminster by the replacement of UK Prime Minister David Cameron with Theresa May and a subsequent cabinet reshuffle which saw the PM appoint a brand new team, including new dedicated ministers for international trade and managing Brexit, arch-Eurosceptics David Davis MP and Dr Liam Fox MP. Prime Minister May is however expected to drive the Brexit process directly by chairing a special cabinet committee that brings together Davis, Fox and new Foreign Secretary Boris Johnson MP. Secondly, the UK’s Commissioner for Financial Services Lord Hill resigned in the wake of the referendum result. Hill will be replaced, subject to European Parliament endorse- ment expected in September, by Sir Julian King, the former Where do we go from here? 3
  • 4. British Ambassador to France. Sir Julian will be in charge of the implementation of the European Agenda on Security. The decision to place King in this position has been well received as a move that plays to the UK’s strengths and elevates the counter-terrorist agenda to a single Commissioner’s portfolio. Thirdly, the UK has withdrawn from its duty at the helm of the rotating presidency of the Council of the EU, which had been scheduled for the second half of 2017. This responsibility will now be taken on by Estonia. Finally, both the Council and the Commission, in a typical Brussels intra-institutional power struggle for leadership of the process, have each appointed a chief negotiator. Didier Seeuws, a respected Belgian diplo- mat and former Chief of Staff to previous Council President Hermann Van Rompuy, takes on the mantle for the Council, while the Commission has appointed Michel Barnier, a sea- soned pro-European French politician and former minister, who proved his capacity to negotiate with the British during his tenure as European Commissioner for the Internal Market and Financial Services. Even before the formal withdrawal process has begun, the less visible side of the Brexit story in Brussels is manifesting itself in the gradual marginalization of British influence on a number of pending policy decisions in the EU decision-mak- ing process. Before any action is taken, May’s government must first agree on how to face this withdrawal procedure; when to trigger the formal notification required by EU law, and indeed on which goals to strive for. Beyond the legal and institutional scrutiny of the decoupling process, different interpretations are being elaborated on the steps to be taken and on the substance of what the UK could and should put up for discussion as it tries to redefine the nature and scope of its relations with the EU. The creativity and skill of specialist EU lawyers will cer- tainly be able to find plausible legal answers on how best to frame any political decision that emerges, but legalism won’t be a substitute for well-informed, thoughtful and transparent political choices, ideally preceded by thorough parliamentary scrutiny. The outcome of this process, whatever it may be, will have to be negotiated by the European Council with the material input of the Commission, be approved by a qualified majority of EU member states in the Council of Ministers and finally be backed by the European Parliament. Pre-existing scenarios for EU-third party bi-lateral cooperation range from the Swiss model, focusing on selected policy areas, to the Turkish custom-specific model or the more comprehensive free-trade Canadian model that has still to come into force. Ex- amples of a more multilateral cooperation framework include the case of EFTA countries within the European Economic Area, which extends the EU internal market and several other policy programmes to Norway, Iceland and Lichtenstein. The default option of market access to EU countries would be to fall back on World Trade Organisation rules. Some options, such as UK accession to the EFTA-EEA agreement may be less cumbersome to finalise, but all will come at a cost and none of them can replicate the more favourable pre-Brexit conditions. The EU leadership in Brussels may be willing to afford the UK some patience as the country gathers itself before launch- ing into the formal procedure of withdrawal, but Brussels is unlikely to accommodate a filibustering agenda that allows the UK to cherry-pick the most favourable mutual recognition rules and principles purely in its own interests, potentially jeopardising the EU’s core principles. Commission President Juncker’s State of the Union speech on 14 September and the parliament debate that follows are likely to publicly uncover the first real insights into the lines that these two institutions intend to pursue going forward. Two days later, on 16 September, the meeting of the other 27 Heads of State and Government in Bratislava will complete the picture with preliminary national perspectives, and will hopefully see the beginnings of a sorely needed common di- rection on EU focus and approach. There is general consensus that the EU cannot continue busi- ness as usual by simply acknowledging the reduction of its members. That said, there is little appetite for upheaval after the clamour of recent months, and a busy agenda of national elections in 2017 precludes a Copernican revision of the EU’s workings in the short term. Although the administration of Brexit will remain centre stage in Brussels for the foreseeable future, the UK remains in the EU with all rights and obliga- tions until the “divorce” is made official, at the current rate not earlier than 2019. Even so, the most resounding signal that the EU is continuing to fully apply its rule book, is given by the 13bn euro tax bill just adopted by the Commission de- claring unlawful the Irish “sweetheart” tax regime granted to Apple. The decision opens the way to further investigations on the alleged practices of Apple and other companies by Eu- ropean and US tax authorities, while reinforcing the principle that any national tax ruling allocating profits to an entity that exists only on paper is a form of illegal subsidy. Moreover, there are a number of new legislative proposals underway, many crucial regulatory decisions to be taken and several hundred executory acts to be finalised as part of the EU’s day-to-day business. From energy to financial services and the digital world, in the following pages we provide an update on the most relevant legislative initiatives in the pipeline. We remain available to support organisations in understanding and navigating the Brussels arena and the interplay with rel- evant national policy landscapes. Leonardo Sforza Managing Director, Head of EU Affairs 4
  • 5. Financial Services The policy area for which Brexit presents the greatest chal- lenges is Financial Services, where London’s €106tn volume of business in trading and clearing euros only takes place due to the City being in the EU. This will be one of the most controversial elements of the negotiations between the EU and the UK. The City is unlikely to safeguard its current status without the UK making concessions in other areas of interest for the EU such as the maintenance of the freedom of movement and establishment for EU citizens. The Capital Markets Union (CMU) Action Plan, presented last year by the European Commission, outlines 33 new measures deemed necessary to establish the building blocks for an integrated capital market across the European Union by 2019. The first progress report on CMU released earlier this year does not take account of the new situation emerging following the UK referendum and will require re-assessment by the Commission. A rich but shaky legislative pipeline 5
  • 6. 1 Hill, J., 2016. Speech by Commissioner Jonathan Hill at the European Parliament on the Capital Markets Union. European Commission. Available at: http://europa.eu/rapid/press-release_speech-16-2529_en.htm 2 See the remarks by Vice-President Dombrovskis at the Atlantic Council. Available at: http://europa.eu/rapid/press-release_speech-16-2574_en.htm Ongoing consultations Capital Markets Union: action on a potential EU personal pension framework 27 July - 31 October The consultation invites interested parties to provide information on their experience using personal pen- sion schemes and seeks the views of professionals working in the pensions industry on the possibility of offering more simple, affordable and transparent personal pension products. The consultation will enable the Commission to get a better view on what can be done at EU level to support a wider choice of personal benefit tools at retirement across borders. Review of the EU macro-prudential framework 1 August-24 October The framework under consultation consists of the European Systemic Risk Board (ESRB) Regulations, the Capital Requirements Directive IV (CRD IV), the Capital Requirements Regulation (CRR) and the Single Supervisory Mechanism (SSM). The consultation focuses on refining the scope of existing macro-prudential instruments (such as capital buffers) and making the rules more consistent with one another, as well as examining the role and organisational structure of the ESRB and its relationship with the European Central Bank. Main barriers to the cross-borders distribution of investment funds across the EU 2 June-2 October The aim of the consultation is to define how best to strengthen the single market passport for cross-bor- der investment funds. The consultation seeks feed- back from the public, including fund managers, in- vestors and consumer groups, as well as from those who market and sell these funds, in order to gain a fuller picture of the remaining barriers to cross-bor- der distribution (such as marketing rules, administra- tive arrangements by host countries, regulatory fees and notification rules). Evaluation of the financial conglomerate directive 9 June - 20 September The consultation will gather evidence on whether the Directive on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate, known as FICOD, first adopted in 2002, is proportionate and fit for pur- pose in its current form and delivering as expected. > > > > There has been much speculation about how Brexit affects Financial Services legislation for the EU, and specifically the future of the Capital Markets Union, a pet project of the for- mer British Commissioner Jonathan Hill. In his final speech, however, Lord Hill was resolute, “It’s absolutely essential for the European Union to continue diversifying the funding sources for its economy, particularly with London outside the EU,” urging the EU to stick with it, “to keep hammering away at the barriers to free movement of capital for the years ahead.”1 Despite the new challenging situation surrounding Brex- it and the diverging views of other key Member States on several technical aspects of CMU priorities, Commission Vice-President Valdis Dombrovkis2, who has taken over re- sponsibility for the Financial Services portfolio seems com- mitted to pursuing the work initiated by Lord Hill in this area, but the pace and scope of future work is unlikely to remain as initially planned. The launch of four new public consultations presents a good opportunity for business and stakeholders to make known their views and perspectives on future EU initiatives in financial services, as outlined in the box to the right. Proposals to be Adopted > Revised directive on “Institutions for Occupational Retirement Provision” (IORP II) The proposed revision of the IORP II directive was presented by the European Commission in March 2014, mainly focus- ing on the governance and transparency of the activities of occupational pension institutions. According to the rapporteur in the European Parliament, Brian Hayes (EPP, Ireland), the final text will be voted on at the plenary session in October 2016. EU member states will have 24 months after the entry into force of the Directive to transpose it into national legislation. Timeline March 2014: Commission proposal 30 June 2016: Council Agreement October 2016: Adoption in EP Plenary 2018: Deadline for transposition in national law 6
  • 7. > Regulation on a European framework for Simple, Transparent and Standardised (STS) Securitisation and a revision of the capital calibrations for banks With a view to opening up investment opportunities to a wider set of non-bank investors, the Commission in Septem- ber 2015 presented a proposal for the creation of a new regu- latory framework to relaunch markets for STS securitisations and for the revision of capital calibration for banks. The pro- posals were agreed by the Council in December 2015 and are currently awaiting the opinion of the European Parliament. Following a Public Hearing on the regulation in the European Parliament on 13 June, the rapporteur Paul Tang, (S&D, Neth- erlands) expressed his concern that the examination of the proposal by the Council was being rushed. In his draft report he follows the proposal of NGO Finance Watch that at least 20% of the risk should be kept on the balance sheet of the is- suer (the Commission proposal foresees only 5%). This pro- posed higher threshold clearly divides the political groups, with rapporteurs from GUE/NGL and Greens/EFA supporting the proposal, while ECR and ALDE clearly oppose it. Both pieces of legislation are provisionally scheduled to be debated in ECON Committee on 9 November and in plenary on 13 December for 1st reading/single reading. Once a political agreement is reached between the co-legis- lators, the Commission has announced its intention to also revise capital charges for investments in STS securitisations under Solvency II. > Regulation on the modernisation of the Prospectus Directive In November 2015, the European Commission issued a pro- posal to modernise the Prospectus Directive, aiming to reduce the costs for smaller companies accessing the capital mar- kets. The European Parliament’s Committee on Economic and Monetary Affairs (ECON) published its draft report in March 2016. Rapporteur Petr Jezek (ALDE, CZ) and the ECON com- mittee endorsed its draft negotiating position on 13 July, to be submitted to plenary. The Member States agreed on their general approach in the ECOFIN council meeting on 17 June. Timeline September 2015: Commission proposal December 2015: Council agreement November 2016: Adoption in EP Committee December 2016: EP Plenary Meeting for 1st/single reading Under the new regulations proposed by the Commission, issuers would no longer be obliged to create prospectuses for issuances of less than €500.000, a threshold that Mem- ber states could raise to €10 million. Where the Commission want to limit this possibility purely to national issuances, the Council’s proposal does not foresee this restriction, whereas the European Parliament wants to limit it to €5 million. In addition, the Commission’s proposal and the positions of the European Parliament and the Council are still divergent on the exact definition of who can make use of a lighter ver- sion of prospectus, the EU Growth Prospectus and on the exact qualification of risk factors. After a formal approval of the negotiating mandate in EP ple- nary, scheduled for 13 September 2016, the interinstitutional negotiations can start. The Slovak Presidency aims to reach a political agreement between the institutions before the end of the 2016. > Regulation on the Reform of Money Market Funds The commission adopted a proposal for a regulatory frame- work for Money Market Funds (MMFs) in September 2013. These funds serve as an important source of short-term fi- nancing for financial institutions, business and governments, but are also vulnerable to investor “runs” on redemptions and have given rise to the misperception that their returns are guaranteed. The proposed regulatory framework should allow them to better withstand redemption pressures in stressed market conditions, while ensuring that they remain a secure tool for European companies to manage their finances. After years of discussion, on 17 June 2016 the EU finance Timeline November 2015: Commission proposal 17 June 2016 : negotiating mandate agreed at ECO FIN Council 13 September 2016: negotiating mandate agreed in EP plenary Autumn 2016: start of inter-institutional negotiations End 2016: target date from Slovak Presidency for Political agreement 2017: Entry into force of Regulation 2018: Application of Regulation and dead line for transposition of elements in national law 7
  • 8. Timeline September 2013: Legislative Proposal published April 2015: negotiating mandate agreed in EP plenary May 2015: Opening inter-institutional negotiations June 2016: Council position Autumn 2016 : expected start of the Trilogue negotiations End 2016: target Slovak Presidency for political agreement Council – European Parliament ministers reached an agreement on the negotiating mandate for the Council, paving the way for trilogues with the Europe- an Parliament to start shortly. The European Parliament has been ready for talks since April 2015. The discussions between the three institutions centre around the issues of Constant Net Asset Value funds (CNAVs) and the creation of a new type of money market fund, the Low Volatility Net Asset Value Money Market Fund (LVNAV). For CNAVs, the Commission wants to introduce a minimum reserve of 3% of total assets in own funds. Both the Euro- pean Parliament and the Council disagree with this, favour- ing instead liquidity fees or redemption gates to be applied only in times of stress. The Council is pushing in favour of CNAVs which invest 99.5% of their assets in public securi- ties, whereas MEPs are pushing for 80% of CNAVs assets to be invested in public securities of EU countries. With regard to LVNAVs, the EP wants to introduce a “sunset clause” thereby forcing LVNAVs to be converted into Variable Net Asset Value Funds (VNAVs) after five years. After lengthy internal discussions whereby the UK, Ireland and Luxembourg argued for less restrictive liquidity require- ments on one side and France and Germany argued for more regulation, the Council reached a compromise on a weekly liquidity requirement of 30% for CNAVs and LVNAVs and of 15% for VNAVs, of which 15% may be made up of public se- curities, going further than the original Commission proposal which foresaw 20%. The Slovak presidency aims to reach a political agreement between the European Parliament and the Council before the end of the year. > Delegated Act on Key Information Documents (KID) on Investment Products On 30 June 2016, the Commission adopted a delegated act with new rules specifying regulatory technical standards on the content of methodology of the KID which must be supplied, from 2017 onwards, to consumers wishing to in- vest in a retail financial products. This delegated legislation follows from the regulation adopted in November 2014 on Packaged Retail and Insurance-based Investment Products (PRIIPs). The Council and the European Parliament have two months to object. Ten member states (including Germa- ny and France) had asked for a longer implementation time for industry and also inside the European Parliament there is strong resistance to the current provisions of the delegat- ed act, with the EPP, ALDE, ECR and Greens/EFA groups threathening to table a motion of objection in the Septem- ber plenary, which, if adopted, would even threaten the entry into force » by « with the EPP, ALDE, ECR and Greens/EFA groups having tabled a motion of objection, which, if adopted in the September plenary, would even threaten the entry into force of the PRIIPs regulation by January 2017. > Enhanced Cooperation on a Financial Transaction Tax (FTT) Negotiations between the finance ministers of the 10 coun- tries participating in the enhanced cooperation, are making very slow progress. On 16 June 2016, the ministers decided to set up two task forces to look into two controversial issues still open in preparation of their next September meeting. The first task force, which will be presided by Italy will look into the possible impact of the tax on derivative products of sovereign financing, a main concern of Belgium. The sec- ond task force, led by Germany, will look at the implemen- tation costs versus the anticipated revenue from the future tax, which in particular Slovakia and Slovenia are sensitive to. This new delay means that the self-imposed deadline for political agreement by June 2016 was missed once again. > Proposal on a Common Consolidated Corporate Tax Base On the basis of the public consultation in January 2016 on the relaunch of the Common Consolidated Corporate Tax Base, the Commission is expected to outline its legislative proposal in the fourth quarter of 2016. > Regulation amending European venture capital funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) regulations Following the public consultation that closed in January 2016, the European Commission on 14 July 2016 published a proposal for a Regulation amending the existing Regulations on EuVECA and EuSEF, dating from 2013. The purpose is to respond to problems encountered by the industry through the application of the existing Regulations. The new Regulation 8
  • 9. seeks to abolish the practice of member states levying charg- es when a fund is registered. Also the definition of SME in which a fund must invest 70% of the capital subscribed in order to obtain the European Passport is relaxed. The pro- posal will now be submitted to the European Parliament and the Council. The first meeting of the Member States on the topic of tax incentives for venture capital and business angels is scheduled for Autumn 2016, to allow for an exchange of views on best practices, on the basis of a study launched by the Commission in January. Banking Union CapitalMarketsUnion Financial Services Timeline 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 PROPOSAL ON REDUCTION OF FINANCIAL RISKS * DIRECTIVE ON IORP II REGULATION ON REFORM OF MONEY MARKET FUNDS REGULATION ON PROSPECTUS REGULATION ON STS SECURISATION FRAMEWORK PROPOSAL ON COMMON CONSOLIDATED TAX BASE* REGULATION amending EuVECA and EuSEF REGULATIONS PROPOSAL ON EU MACRO PRUDENTIAL FRAMEWORK * PROPOSAL ON EU PERSONAL PENSION FRAMEWORK * PROPOSAL ON CROSS BORDER DISTRIBUTION OF INVESTMENT FUNDS * EVALUATION FINANCIAL CONGLOMERATE DIRECTIVE * Nature of exact act not yet determined REGULATION ON EUROPEAN DEPOSIT INSURANCE SCHEME (EDIS) Commission proposal Council agreement EP Committee Position EP Plenary Position EP Committee Position Adoption Adoption Trilogue negotations Council exploring possible use of Intergovernmental Agreement Council Position EP Plenary Position Implementation Implementation Council Position Council Position EP Position Adoption Adoption Trilogue negotations Trilogue negotations Implementation Implementation Results Public Consultation EP Committee Position EP Committee Position Potential Commission proposal Potential Commission proposal Potential Commission proposal Potential Commission proposal Commission proposal Commission proposal Public consultation Public consultation Public consultation Public consultation Council Position Council Position Results Results Results Results EP Plenary Position Trilogue negotations EP Plenary Position FTT FINANCIAL TRANSACTION TAX (enhanced cooperation) Setting up 2 Ministrial Working Groups Possible Agreement 9
  • 10. In the coming months, the European Commission will pres- ent several major legislative proposals for the energy sector, in order to give life to its five-pillar energy strategy present- ed in 2015: realize an integrated internal energy market, reduce Europe’s climate impact, improve energy efficiency, strengthen security of supply and support innovation. To fulfil these goals, the EU institutions will work on revising the Emission Trading System, as well as the existing energy efficiency and renewable energy directives. The EU legisla- tors will also focus on a new set of measures for Europe’s se- curity of supply, focusing on intergovernmental agreements for gas companies and on a heating and cooling strategy, as well as on liquefied natural gas. Key future policy develop- ments are outlined below. The uncertainty thrown up by Brexit is reflected in the fact that private investors will likely hold back on large energy projects until they have assurances about the environment they will be operating in. By way of example, the UK has Energy already seen a 20% decline in value of infrastructure con- tracts for July compared with the previous month. Leaving the single market could also open the UK to new import taxes, adding cost to equipment such as foundations for offshore wind farms or parts for nuclear plants. There are some silver linings for the UK energy sector though. Brex- it would eliminate the EU’s trade duties on Chinese solar equipment imports, making cheap panels more accessible to UK users. The UK unshackling itself from Brussels might also mean companies and investors are granted more free- dom to access local public subsidies, or pursue energy pro- jects such as for shale gas which are currently submitted to EU environmental assessment. Meanwhile, in the legisla- tive landscape, the Commission’s climate policy - the blue- print for sharing out the 40% by 2030 greenhouse gas target among the 28 member states – is now likely to be postponed, along with inter-institutional negotiations on the emissions trading system. Towards a redesigned European energy framework 10
  • 11. An integrated internal energy market > Directive on an Electricity Market Design In the second half of 2016 the European Commission is expected to present a draft directive on Electricity Market design to improve the full integration of new market players, focusing particularly on renewables. The aim is to allow the electricity market to manage large-scale cross-border flows and greater volumes of intermittent electricity from renew- able sources. Ahead of the formal presentation by the Commission, the Energy Ministers within the Council of the EU and the Eu- ropean Parliament have already shared their preliminary views. The Ministers indicated in April that a stronger con- nection with neighbouring countries would allow Member States to better share capacities in renewable energies, while increasing the security of supply and ensuring a sit- uation of fair competition for all producers. The European Parliament presented an own-initiative report on this issue in June, the adoption of which is expected in September. MEPs indicate that the redesign must be guided by mar- ket-oriented and long-term measures to ensure that the supply of electricity is balanced against distortions and to better integrate renewables in the market. > Proposals for a new Renewable Energy Package Building on the agreed target of 27% renewable energy in the EU energy mix by 2030, the European Commission in- tends in 2016 to put forward a new renewable energy pack- age, comprising a new renewable energy directive for 2030 and a proposal on bioenergy sustainability. The package is expected to progressively harmonise national support schemes for renewables, with the objective of addressing market distortions and avoid overcompensation. Stakeholders and citizens were consulted in the first months of 2016 on an updated EU policy on sustainable bioener- gy for the period 2020-2030. Concerns among respondents were raised regarding the sustainability impacts and com- petition for resources caused by the increasing reliance on bioenergy production and use. According to the items put forward in this consultation, the Commission’s upcoming proposal may address several sustainability risks, including lifecycle greenhouse gas emissions from bioenergy produc- tion and use, impacts on the carbon stock of forests and other ecosystems, impacts on biodiversity, soil, water and emissions to the air, as well as impacts on competition for the use of biomass between different sectors (energy, indus- trial uses, food). The full results of the consultation are ex- pected to be published soon. The results of the complementary consultation on a renewa- ble energy directive for the period after 2020 show that there is a need for a stable and predictable EU legal framework for renewable energy policies, as well as strong support for ad- ditional EU action on empowering energy consumers, by al- lowing them to produce and store their own renewable heat and electricity and participate in all relevant energy markets and projects in a non-discriminatory and simple way. Final- ly, there is a broad consensus on the need to decarbonise the heating and cooling sector, as well as to increase renew- able energy use in the transport sector. Furthermore, on 23 June, the Parliament maintained high ambitions on renewable energy goals by adopting a resolu- tion which plans to set the goal of 30% of renewable con- sumption in the energy mix as the minimum objective for 2030. Both consultations and this resolution will feed the decision- making process which will result in the presentation of the package by the end of 2016. Climate action > Directive on EU Emissions Trading System The European Parliament and the Council of the EU are cur- rently discussing a proposal presented in July 2015 by the Commission to revise the EU Emissions Trading system for the period after 2020. The proposal intends to increase the pace of emissions cuts after 2020 by reducing the overall number of emission allowances at an annual rate of 2.2% from 2021 onwards, instead of 1.74% currently. This shall result in an automatic increase of carbon costs, impacting energy intensive industries in particular. Timeline September: adoption of the EP own-initiative report End 2016 : Directive proposal by the Commission Early 2017: Expected EP Committee position Mid 2017: Expected Council position End 2017: Expected formal adoption Timeline September: Publication of the results of the renewable energy directive consultation. End 2016 : Renewable Energy Package proposal by the Commission Early 2017: Expected EP Committee position Mid 2017: Expected Council position End 2017: Expected adoption of package 11
  • 12. In the Council, the proposal was addressed at working party level under the Dutch Presidency (from January to July), and Environment Ministers held a policy debate on the proposal on 20 June 2016. They underlined the impor- tance of flexibility so that the EU can adapt its level of am- bition under the dynamic ambition mechanisms of the Paris Agreement. Discussions will continue under the Slovak Presidency which started on 1 July. Within the Parliament, the draft report of the environment committee (ENVI) was presented at the end of May. In line with the dynamic nature of the Paris Agreement, the draft report proposes a review clause for the linear reduction factor, which could lead to a revision following the first global stocktake in 2023. It calls on the Commission to consider the impact of overlapping EU climate and energy policies, and proposes to place al- lowances in the Market Stability Reserve (MSR) in case of the closure of power plants. The Environment (ENVI) and Industry, Research and Ener- gy (ITRE) committees, both in charge of this dossier, will discuss the amendments on the draft report from September for a vote expected in October (ITRE) and December 2016 (ENVI). Energy efficiency > Directive on Energy Efficiency In 2016 the Commission intends to reap the full potential of energy efficiency by putting forward a new energy efficien- cy directive. The proposal, to be presented at the end of the year, will align the regulatory framework to the indicative EU-level target of at least 27% energy efficiency by 2030. It will also include provisions for large companies to carry out regular energy audits. Without waiting for the propos- al to be presented, the European Commission has already announced that it will be reviewed a second time by 2020 with the objective of upping the EU target to 30% energy efficiency by 2030. The results of a public consultation on this issue held by the Commission at the beginning of 2016 show that stake- holders agree that the energy efficiency directive of 2012 established a comprehensive framework for the EU. The majority also believes that the Energy Efficiency Obligation Schemes set by the directive are an effective instrument to achieve energy savings. However, participants indicat- ed that the present framework remains complex, and that Member States require additional guidance. On 23 June, the Parliament adopted a resolution on “energy efficiency”. It stresses the need for the full implementation of the existing EU legislation for the EU to meet its energy efficiency target by 2020 (an increase of 20% by 2020), while calling for a binding target of at least 30% of renewables in the EU energy mix by 2030. This recommendation will feed into the legislative proposal that the Commission is expect- ed to present this autumn. > Directive on Energy Labelling In July 2015, the European Commission proposed a revi- sion of the energy labelling directive, including provisions for a single energy labelling scale from ‘A to G’ and a digital database for new energy efficient products. For producers, the new measures imply that they will have to sell their new products with the new scale and register their products in a database accessible to Member State authorities to facilitate compliance checks. The legislative work is now ongoing under the co-decision procedure between the European Parliament and the Coun- cil of the European Union. In plenary session on 6 July, the European Parliament adopted its report with amendments to the draft Regulation setting a revised framework for the energy efficiency labelling system introduced in 1995. The Parliament backs the reintroduction, in the course of the next five years, of the system labelling energy efficiency from A to G to replace the current A+, A++, A+++ etc. sys- tem. These rescaled labels should be introduced within a timescale of between 21 months and 6 years, depending on product type, following entry into force of the new Regu- lation. Negotiations within the Council of the EU will take place in the coming months under the Slovak Presidency, with adoption expected in 2017. Timeline September: Consideration of amendments in the environment and industry committees of the Parliament. October : ITRE Committee position December: ENVI Committee position Early 2017: Trilogue negotiations End 2017: Expected adoption Timeline Autumn: Commission directive proposal Early 2017 : Expected EP committee position Mid 2017: Expected Council position End 2017: Vote in plenary session and expected adoption Timeline End 2016: Council position Early 2017: Trilogue negotiations 2017: Expected formal adoption 2018: Deadline for transposition 12
  • 13. Security of Supply On the 16 of February, the European Commission presented its ‘’Winter Package’’, also known as the ‘’Security of Gas Supply Package’’. It contains several measures aimed at im- proving the resilience of the EU to breaks in gas supply, as certain countries and regions of the European neighbour- hood remain instable, for example Ukraine. Two legislative proposals, as well as two strategies for Liquefied Natural Gas (LNG) and for heating and cooling, are part of this strat- egy. > Regulation on Security of Gas supply With its Security of Gas Supply Package presented last winter, the Commission’s goal is to lessen Europe’s vulnera- bility and dependence on its neighbours by diversifying its sources of supply. To this end, it includes two legislative proposals: a revision of the Regulation on the security of gas supply, and a decision on Intergovernmental Agree- ments (IGAs) in energy. These proposals aim to increase solidarity between Mem- ber States in case of serious crises, by guaranteeing that they provide energy for homes and essential services, such as health care. They also seek to move from a national to a regional approach for the design of security of supply measures, while improving transparency of gas markets, especially regarding the conclusion of relevant contracts between gas companies. According to Energy Commis- sioner Miguel Arias Canete, the Commission and Member States will have to be notified of any trade contract of more than one year’s duration and involving a market share that is significant to security of supply. Indeed, the Commission is proposing to create a mechanism for obligatory pre-con- sultation by Member States before such agreements are signed. In June, the European energy ministers reached a compromise on this mechanism, agreeing that the ex-ante assessment by the Commission of IGAs will apply only to gas agreements and will take no more than between six and twelve weeks. This agreement on the general approach will allow the Council to start negotiations with the European Parliament with a view to the final adoption of the proposal in 2017. Within the Parliament, the industry and research committee is expected to present its draft report on the Reg- ulation concerning measures to safeguard the security of gas supply in the coming months. > Strategy for Liquefied Natural Gas and Gas Storage (LNG) A strategy on improving access to Liquefied Natural Gas (LNG) and the use of gas storage is also part of the Security of Gas Supply Package. The strategy seeks to present how the EU should exploit the LNG global market and reduce regional disparities in terms of access to this alternative source, notably by reducing the dependency of the Baltic states on Russia. Strategic infrastructure will be built in var- ious regions, such as South-Eastern Europe and the Baltic Sea area. On 13 July, the European energy ministers reached a consensus on the future key role of LNG, agreeing that the EU must continue with the construction of infrastructure and interconnections, particularly the north-south link and the development of several LNG terminals in Greece and Croatia, as well as the development of links between LNG capacity in Spain and the main energy corridors. > Strategy for heating and cooling Heating and cooling accounts for around half of the EU’s energy use and is expected to remain the largest energy de- mand driver in the long term. While uncertainties remain as regards the role of heating and cooling in meeting the 2030 targets, the heating or cooling market is also fragmented and no single market has so far emerged either nationally or EU-wide. Instead, heat markets are local and are composed of many different technologies and economic players. In this context, the European Commission released in early 2016 a Strategy for heating and cooling (within its “Winter Package” for the security of supply) to drive the transforma- tion of the sector, maximise the use of potentials and de- ploy solutions for demand reduction. It gives guidance to allow driving actions by stakeholders and Member States on areas where better synergies between current EU instru- ments could be exploited or where EU and national regula- tory frameworks would need to be complemented. On the 12 July 2016, the European Parliament adopted a resolution in which it states that heating and cooling sys- tems must be modernised to make more use of renewable energy and new technologies. The Parliament calls on the Commission to do more to raise awareness among consum- ers of the often low performance of their installed heating systems and to increase the modernisation rate of existing heating and cooling systems. MEPs also encourage mem- ber states to put in place tax and financial mechanisms for the development and use of urban heating and cooling sys- tems. The Commission should also better integrate smart Timeline End 2016: Slovak presidency to encourage preliminary Trilogue negotiations. Early 2017: Expected EP position Mid 2017: Expected Council position End 2017: Expected adoption of both legislative proposals. 13
  • 14. Ongoing consultations Consultation regarding the 2009 Directive imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products. 27 July - 31 October The 2009 directive imposes an obligation on Member States to maintain stocks of crude oil and/or petro- leum products. With this consultation, the European Commission is collecting views and suggestions from stakeholders and citizens in the context of the current evaluation of the directive. The general ob- jectives of the evaluation are to assess how the Oil Stocks Directive has been implemented in the Mem- ber States and how it is functioning in practice, and to identify possible problems and areas for improve- ment or simplification. Consultation on the development of network codes and guidelines for 2017 and beyond. 18 July – 14 October The objective of this consultation is to consult stakeholders on the priorities for the development of network codes and guidelines for 2017 and beyond. The European Commission has to establish in accordance with its “Electricity Regulation” and its “Gas Regulation” an annual priority list identifying the areas to be included in the development of network codes. > > technologies in relevant energy union initiatives to ensure real interconnectivity of smart appliances, connected homes and smart buildings with smart grids, MEPs say. Although the strategy does not announce any new legislative propos- als, it presents some steps that the European Commission may consider in the process of revising existing energy leg- islation. Research and Innovation > Strategy on research, innovation and competitiveness The European Commission is planning to develop a com- prehensive research, innovation and competitiveness strat- egy for the Energy Union, as the fifth pillar of the Energy Union. It held a public consultation from March to May in order to gather stakeholders’ views on how to achieve the EU’s energy and climate targets, as well as sector-specific research, development and innovation goals needed for the EU transformation. The findings, scheduled to be released by 30 September, will feed into the integrated Research, In- novation and Competitiveness strategy to be presented at the end of 2016. This strategy will provide recommenda- tions on how to reduce EU’s emissions and use of energy, while maintaining the competitiveness of economic sectors including energy and transport but also industry, agricul- ture, bioeconomy and construction. The European Commission has also launched two public consultations regarding energy issues, allowing the stake- holders to make their voice heard. InternalEnergy Market Energyefficiency &climate Supply Security Energy Timeline 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 DIRECTIVE FOR AN ELECTRICITY MARKET DESIGN DIRECTIVE FOR A REVISED EU EMISSION TRADING SYSTEM LEGISLATIVE PROPOSAL ON BIOENERGY SUSTAINABILITY DIRECTIVE ON ENERGY LABELLING DECISION ON IGAS DIRECTIVE ON RENEWABLE ENERGY DIRECTIVE FOR ENERGY EFFICIENCY REGULATION ON SECURITY OF GAS SUPPLY EP Committee preliminary position EP Committee Position EP Plenary Position EP Plenary Position Consultation results Commission Proposal Commission Proposal Preliminary inter-institutional negotiations Commission Proposal Commission Proposal Council Position Council Position Council Position Council Position Council Position Council Position Council Position Council Position EP Committee Position EP Committee Position EP Committee Position EP Committee Position EP Committee Position EP Committee Position Adoption Adoption Adoption Adoption Adoption Adoption Adoption Adoption National transposition National transposition EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations 14
  • 15. In the second half of 2016, the European institutions will enter the final stretch; releasing, adopting or making signifi- cant progress in the negotiations over the remaining legisla- tive proposals completing the Digital Single Market. While some major proposals, such as the Regulation on geoblock- ing or the cross-border portability of online content, are about to enter the decisive phase of trilogue negotiations, Digital the European Commission will also present its long-await- ed proposal on copyright reform in September, adapting intellectual property rules to the ever-evolving online en- vironment. European stakeholders are expected to actively contribute to the debate given the many financial, legal and cultural interests at stake. Towards a Digital Single Market by end of 2017 15
  • 16. E-Commerce and Online Services > Regulation on phasing out Geo-blocking According to the European Commission, only 37% of web- sites allow consumers to make online purchases in another Member State than their own. The European Commission considers this “geo-blocking” practice to be unjustified because it fragments the internal market, preventing con- sumers from buying products that are only available out- side of their own Member State. In an effort to address these shortcomings, the European Commission presented in May this year a proposal for a Regulation to phase out unfair geo-blocking, introducing the “same place, same ser- vice, same conditions” principle: it will oblige traders to sell under the same conditions as in their home countries, with- out discrimination on access to prices, sales or payment conditions. The new rules will apply to all European and foreign companies operating in the European market. The European Parliament is currently elaborating its po- sition on the dossier within its Internal Market Committee under the leadership of the rapporteur Róża Maria Gräfin von Thun und Hohenstein (EPP, Poland). MEPs have al- ready said in a resolution that geo-blocking was unjustified and that the practice should stop. While the Parliament is likely to support the Commission pro-consumer approach, the Council of Ministers is expected to adopt a stronger pro-business stance on the dossier, as the sensitive issue of phasing out geo-blocking impacts the business model of many online service providers. The Slovak Presidency of the Council stated that it will try to reach a common posi- tion on the proposal by the end of the year before starting the negotiations with the Parliament. The adoption of the Regulation is therefore not expected before Spring 2017. > Regulation on Cross-border Portability of Online Content Services Films, music or e-books purchased in one EU country are not systematically accessible when people travel to other Member States, for example on holidays or a business trip. Considering this as an obstacle to free movement of goods, the European Commission presented a proposal for a Regulation to allow cross-border portability of online con- tent services in December last year. In practice, the Regu- lation will enable consumers with subscriptions to online content to access it when they are temporarily in another EU country. The European Parliament and the Council of Ministers al- ready adopted their position on the proposal and will start inter-institutional negotiations in September with a view to reaching an agreement by the end of the year. The ne- gotiations are not expected to be difficult, as the European Parliament and the Council share the same approach on the sensitive notion of “temporary presence” in another Mem- ber State. Some Members of the European Parliament advo- cated for a strict definition to a certain number of days, but both the Parliament and the Council agreed to not define the notion of temporary period abroad and call for “compul- sory and effective” controls. They also both propose a strict definition of the country of residence and call on service providers to carry out checks on the basis of a range of cri- teria, such as the invoice address, bank account, payment of local taxes or samples of the IP address. They eventually explain that the new obligations applicable to service pro- viders should not lead to increased administration costs and that the principle of territoriality must continue to prevail. > Proposal on copyright enforcement On 21 September, the Commission is expected to present a legislative proposal on the enforcement of the legal frame- work of intellectual property rights (IPR). The proposal in- tends to review the functioning of the previous Directive on the enforcement of intellectual property rights (IPRED), aiming to adapt its provisions to the ever-evolving online environment and to propose corrective measures. Among the concrete actions envisaged, the European Commission has already asserted that it will focus on commercial-scale infringements to strengthen the protection of all IPR. In this respect, the European Commission intends to adopt a ‘fol­low the money’ approach aimed at depriving infring- ers of revenue flows. In particular, it will suggest that all websites hosting videos such as YouTube, Dailymotion and Facebook, seek to conclude, in good faith, agreements with the rights holders that reflect the economic use value of the Timeline November: expected Council position on the proposal End 2016: expected Parliament position on the proposal Early 2017: expected start of the Trilogue negotiations Spring 2017: expected agreement on the regulation Mid 2017: expected formal adoption of the regulation July 2018: expected entry into force of the regulation Timeline September: start of the Trilogue negotiations End 2016 : expected agreement on the decision Early 2017: expected formal adoption of the decision Mid 2017: expected start for the implementation of the regulation 16
  • 17. protected work in question. According to preliminary drafts, the Commission will also put forward measures to strength- en the online rights of newspaper publishers by providing them with the possibility of seeking financial compensation from search engines and Internet Platforms such as Google News. The European Commission is close to releasing its propos- al. A public consultation on this issue was opened during the first half of 2016. On 21 June 2016, the Commission held a further ‘Intellectual Property Rights Enforcement Conference’ where key European and international decision makers gathered to review the progress made in disrupting IP infringing activities at the source and ensuring supply chain integrity. All these inputs will help the European Commission complement its proposal before presenting it to the European Parliament and the Council of the European Union in a normal co-decision procedure which is expected to span the duration of 2017. > Directive on Audiovisual Media Services The European Commission in May proposed an update to EU audiovisual rules to make them more flexible on adver- tising time, to protect children and to subject subscription video services to demands on the promotion of European works. In terms of advertising, the Commission is propos- ing that programs can be interrupted by adverts every 20 minutes, instead of the current 30 minutes. It also allows TV chains to extend the length of advertising spots by applying the current 20% threshold from 7am to 11pm. Product place- ment and promotion will also be authorized, in an effort to “create a level playing field with the US”. As regards the promotion of European content, the Commission’s proposal imposes video on demand services (VOD) such as Netflix or Amazon Prime to broadcast at least 20% of European con- tent. The Commission also empowers the Member States where such VOD services are available, to require such companies to make a financial contribution to local cinema. While the European Parliament is just starting to construct its position on the dossier, EU culture ministers held a first debate on the proposal where they mostly welcomed the Commission’s approach on audiovisual media services. The main difficulties for the coming months are expected to be around quotas for European works. While Finland, Den- mark and Sweden wondered whether it was worth putting in place quotas for European works on video on demand services, France, which applies a 60% quota inside its bor- ders, took the view that the Commission proposal did not go far enough. This issue will have to be resolved before reach- ing a common position on the proposal either by the end of this year, or early 2017. Interinstitutional negotiations will then start thereafter for a potential final adoption in mid- 2017. Networks and Cybersecurity > Decision on the 700MHz Band Back in February 2016, the European Commission released a proposal for a decision to coordinate the so-called radio spectrum which allocates the use of the Ultra High Fre- quency (UHF) 700 MHz band. The band is currently used by terrestrial broadcasting and mobile networks, and will be fundamental in coming years for the development of many new technologies requiring radio spectrum allocation (such as the Internet of Things, the cloud systems, the digitali- sation of industrial sectors or e-government). However, the national management of the spectrum has resulted in very different conditions between individual Member States. In Timeline September: expected Commission proposal Mid 2017: expected Parliament and Council positions on the proposal Fall 2017: expected start of the Trilogue negotiations End 2017: expected agreement on the directive Timeline Early 2017 : expected Parliament and Council positions on the proposal Spring 2017: expected start of the Trilogue negotiations Mid 2017: expected agreement on the directive Fall 2017: expected formal adoption of the directive Fall 2018: deadline for the implementation of the directive Timeline September: start of the Trilogue negotiations End 2016 : expected agreement on the decision Early 2017: expected formal adoption of the decision 2022: expected deadline for the allocation of 694-790 MHz to mobile services 2030: expected deadline for the allocation of 470-694 MHz to TV broadcasters 17
  • 18. order to allocate the UHF band in a harmonised manner, the Commission proposed to reorganise its allocation by dividing it into two parts: the upper part of the spectrum (694-790 MHz) will be devoted from 2020 or 2022 exclusive- ly to mobile operators, including new technologies, while audiovisual services and TV broadcasters will be moved to the lower part (470-694 MHz) until 2030. In September, the draft decision will be subject to inter-in- stitutional negotiations between the European Parliament and the Council of Ministers. The European Parliament supports the proposal in a recent draft report prepared by Patrizia Toia (S&D, Italy), in which it suggests only minor changes to the timeline of implementation. The Council of Ministers also accepts the essence of the Commission’s pro- posal but is vying for greater flexibility: the Member States will have a maximum of two years to allocate the upper part of the spectrum (694-790 MHz) to mobile services and they will have until 2018, rather than 2017, to adopt national roadmaps. The negotiations are expected to be completed by the end of year. > Regulation on cross-border Parcel Delivery In May, the European Commission presented a proposal for a Regulation to increase price transparency and regulato- ry oversight of cross-border parcel delivery services so that consumers and retailers can benefit from more affordable deliveries and convenient return options even to and from peripheral regions. The Commission justifies its proposal on the premise that almost 4 billion parcels are ordered on- line every year in the EU, but very few citizens order parcels from other Member States, as the costs are broadly consid- ered too expensive. The proposal intends to give national postal regulators the data they need to monitor cross-border markets and check the affordability and cost-orientation of prices. It will also encourage competition by requiring transparent and non-discriminatory third-party access to cross-border parcel delivery services and infrastructure. As part of the measures enclosed in its proposal, the Commission will also publish publicly listed prices of universal service pro- viders to increase peer competition and tariff transparency. The Commission plans to take stock of progress made in 2019 and assess if further measures are necessary. The European Parliament and the Council of the Europe- an Union are just starting to develop their internal position before entering into inter-institutional negotiations. Within the European Parliament, the file has been assigned to the Committee on Transport and Tourism (TRAN) and the ap- pointment of a rapporteur is pending. The 28 responsible EU Ministers will discuss the proposal at their next Telecom Council meeting on 2 December. > Directive on e-privacy Following the formal adoption of the Data Protection Reform in April, the Commission intends to present a proposal for directive to reform privacy rules online in November. Its aim will be to align with the recent data protection reform, and will focus more on enhancing security and confidentiality of electronic communications, in particular regarding cookies, traffic and location data. With a view to complement its legislative proposal before presenting it this autumn, the European Commission held a public consultation from April to July to seek stakeholders’ views on the possible changes to the existing legal frame- work to make sure it is up to date with the new challenges of the digital arena. Stakeholders and telecom groups have already expressed their concerns about the revision of the current directive, which could increase Regulation of their sector while not imposing similar rules on big internet com- panies. > Revision of the Telecoms Package The Commission announced it will present its proposals for a revision of the ‘telecoms’ package in November this year. While provisions on roaming charges and net neutral- ity were set out in last year’s package, the European Com- mission plans to revise the telecom regulatory framework by tackling the issue of the wholesale market mechanism for roaming, introducing investment incentives in ultrafast broadband and ensuring openness of the telecom market to new market entrants. Timeline Early 2017: expected Parliament and Council positions on the proposal Spring 2017: expected start of the Trilogue negotiations Mid 2017: expected agreement on the regulation Fall 2017: expected formal adoption and entry into force of the regulation 2019: progress report on the implementation of the regulation Timeline November: expected Commission proposal Mid 2017: expected Parliament and Council positions on the proposal Fall 2017: expected start of the Trilogue negotiations End 2017: expected agreement on the directive 18
  • 19. Timeline November: expected Commission proposal Mid 2017: expected Parliament and Council positions on the proposal Fall 2017: expected start of the Trilogue negotiations End 2017: expected agreement on the directive The European Commission completed two public consul- tations last year on broadband needs and the review of the current telecoms framework. It covered all three main pillars of the current framework, namely the network pillar, with the aim of ensuring a consistent regulatory framework that is supportive of infrastructure investments in both fixed and wireless networks; the service pillar, with the aim of ensur- ing a modernised regulatory regime for electronic commu- nication services and the governance pillar, with the aim of ensuring that markets are regulated in a consistent manner across the EU. The revision of the ‘telecoms’ package may be the last leg- islative item out of an agenda of 16 identified actions in the Commission Digital Single Market strategy. Its adoption is not expected before the end of 2017. Cross-BorderE-commerceNetworks&Infrastructures Digital Single Market Timeline 2016 2017 Q3 Q4 Q1 Q2 Q3 Q4 REGULATION PHASING OUT GEO-BLOCKING DECISION ON THE 700MHZ BAND REGULATION ON CROSS- BORDER PORTABILITY OF ONLINE CONTENT PROPOSALS TO REVIEW THE TELECOM PACKAGE PROPOSAL TO REFORM THE COPYRIGHT REGIME REGULATION ON CROSS- BORDER PARCEL DELIVERY DIRECTIVE ON AUDIOVISUAL MEDIA SERVICES DIRECTIVE DIRECTIVE ON E-PRIVACY EP Committee Position Commission Proposal Commission Proposal Commission Proposal Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations National Transposition Council Position Council Position Council Position Council Position Council Position Council Position EP Committee Position EP Committee Position EP Committee Position EP Committee Position EP Committee Position Adoption Adoption Adoption Adoption Adoption Adoption Adoption Adoption EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position EP Plenary Position Trilogue negotiations Trilogue negotiations Trilogue negotiations Trilogue negotiations Implementation Implementation Implementation Implementation 19
  • 20. I N SIGHTSB ruSsels IGHTSB ruSsels I N SIGHTSB ruSsels I N SIGHTSB ruSsels I N SIGH Leonardo Sforza leonardo.sforza@mslgroup.com Olivier Hinnekens olivier.hinnekens@mslgroup.com Romain Seignovert romain.seignovert@mslgroup.com Alastair Bealby alastair.bealby@mslgroup.com François Troussier francois.troussier@mslgroup.com Web WWW.MSLGROUP.COM Twitter @MSL_BRUSSELS Office Square de Meeûs 23, 1000 Brussels, Belgium