Learn about the latest policy developments with this monthly alert from our team in Brussels. For real-time updates, follow us on Twitter: @MSL_Brussels

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Less is more in the new EU Commission’s work programme
INSIGHTS BRUSSELS
A regular alert on key EU policy developments
Issue 24 | February 2015

2. Less is more in the new EU Commission’s work programme 3
The top ten priorities until 2019 4
#DigitalAgenda @full speed 5
2015: a critical year for the energy union 7
Towards a healthier Europe? 9
Financial services’ “sticks and carrots” to support EU economy 13
Boosting EU trade policy negotiations with more transparancy 16
Contents
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3. Less is more in the new EU Commission’s
work programme
For Winston Churchill...
Leonardo Sforza
Managing Director
MSLGROUP Brussels
...“Politics is the ability to foretell what is going to
happen tomorrow, next week, next month and next
year. And to have the ability afterwards to explain
why it didn’t happen.” If this is still true in national
politics, it is even more so at the EU level given
the complexity of the decision making process and
the difference or even divergence of views that
result from 28 Member States and EU decision
makers needing to take decisions and translate
these decisions into effective action. European
Commission President Juncker and his team are
introducing three compelling changes in Brussels
that may reduce the risk of policy irrelevance,
overpromise and under-delivery.
The first change concerns the substantial
reshuffling of the new EU power map which results
in a more political and higher profile executive
body, strongly influenced by a multi-partisan pro-
European political coalition established after the
European Parliament election in May.
The second change leads to refocus EU activities
on ten key priority areas (see box on next page)
where the institutions can demonstrate a real added
value and deliver better results than actions taken in
the same area by national and regional authorities
acting alone.
The third change concerns the Commission’s
engagement to monitor quality and ensure
transparency of the law-making process from
conception to enforcement, with a much bolder
emphasis on stakeholder consultation, ex-ante
and ex-post evaluation of legislation and thorough
assessment of the likely impact of legislation before
a proposal is put forward.
The substantial reduction of the number of new
legislative proposals presented in the 2015 work
programme, and the withdrawal of about 80 pending
proposals that the Commission does not consider
worthyoffurthereffortintermsoftimeandresources,
are the most tangible signs of the new EC mantra at
work. Another important political sign, in relation
to greater transparency, is the public release of the
negotiation mandates and related documentation
referred to in the EU-US the Transatlantic Trade and
Investment Partnership agreement.
In this edition of our policy brief we outline some of
the key regulatory and policy developments that we
can expect in 2015 in five important policy areas: the
digital agenda, energy, financial services, healthcare
and external trade.
Stakeholder scrutiny and pro-active contribution is
crucial to ensuring that the expectations generated
by these changes are satisfied. And stakeholder
contribution – particularly when fact-based and far
removed from rhetoric – is now genuinely in demand
from EU policy makers themselves. Let’s not miss
this opportunity.
Leonardo Sforza, Brussels, February 2015
3

4. Top ten priorities of European Commission
President Juncker through 2019
1. A new boost for jobs, growth and
investment: by improving the investment
environment and mobilising €300 billion in public
and private investment in the real economy during
the next 3 years. Specific attention will be paid to
improving the quality and results of the law-making
process, reducing administrative burdens and
enhancing regulatory simplification.
2. A connected digital single market:
leveraging the potential of the market in terms
of job creation and growth, and establishing a
legislative framework to create the digital single
market during the next 6 months.
3. A resilient Energy Union with a forward-
looking climate change policy: by enhancing
renewable energy and energy efficiency and
reducing the EU’s dependence on third countries.
4. A deeper and fairer internal market to
strengthen industrial base: to bring industry’s
weight in the EU’s GDP back to 20% and ensure
that the EU maintains its leadership in strategic
sectors such as automotive, engineering, etc.
• A Single Supervisory Mechanism and a Single
Resolution Mechanism with a Single Resolution
Fund will be built up to boost investments.
• Free movement of capital will be developed.
• The Posting of Workers Directive will be reinforced
(on 13 May 2014, the Council adopted new
measures to better enforce EU rules on the posting
of workers).
• To combat tax fraud: Juncker supports a Common
Consolidated Corporate Tax Base Directive.
5. Adeeperandfairereconomicandmonetary
union: through the effective implementation of the
“six-pack” for macroeconomic surveillance and the
“two-pack” legislation for increased transparency
on Member States’ budgetary decisions.
6. A reasonable and balanced free trade
agreement with the United States: with the
objective to mutually recognise product standards
without sacrificing safety and protection standards
and cultural diversity.
7. An area of Justice and Fundamental
Rights based on mutual trust: with the
objective of finalising the accession of the EU to
the ECHR, avoiding any discrimination, protecting
personal privacy and fighting cybercrime (i.e. EU
Cybersecurity Strategy).
8. Towards a new policy on migration: with
the objective of creating a European common policy
on migration and a common asylum procedure.
9. Europe as a stronger global actor: with the
aim of enhancing EU-bloc foreign policy role under
the leadership of High Representative Federica
Mogherini. Member States should also co-operate
in defence procurement, avoiding individual
national interventions and expenditures. Further
enlargement of the EU to new candidate countries
is not envisaged during the Commission’s term of
office.
10. A Union of democratic change: with the
objective of enhancing a political dialogue with
other institutions, national Parliaments and
stakeholders.
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5. #DigitalAgenda @ full speed
The digital economy is growing at seven times
the rate of the economy, but this development
is currently held back by a patchy pan-European
regulatory environment. Reform of the regulatory
framework related to the digital agenda has emerged
asoneofthemainsectorialpolicyprioritiesfortheEU
in 2015, aimed at increasing broadband investment
and maximising the digital sector’s contribution to
Europe’s economic recovery. Two Commissioners
are in charge of digital issues: Vice-President Andrus
Ansip from Estonia and Commissioner Günther
Oettinger from Germany.
In 2015, the European Commission will bring
all ongoing inter-institutional negotiations on
proposals under one “umbrella” strategy. These
include the common European data protection
reform, the Regulation on a Connected Continent
and new initiatives to ensure the effectiveness of the
Digital Single Market. The strategy will also include
methodology to monitor progress made by each
Member State.
Towards a digital
market strategy
In its 2015 work programme the European
Commission announced that it will present next
May its new strategy for the digital single market,
encompassing a wide range of legislative and
non-legislative policy initiatives. It is expected
that the first public consultation on the digital
market strategy will be organised in early 2015,
along with a Digital stakeholder forum on
24 February. The European Commission will
then present its strategy in May, prior to a first
roundtable discussion with Member States during
the informal Competitiveness Council scheduled
for 28 May and the digital conference on 17 June.
The European Commission will present its strategy in May
Connected continent
The “Connected Continent” proposal presented
in 2013 originally contained twelve chapters but
has been whittled down to two – roaming and net
neutrality – by Member States as they struggled
to bridge deep divisions among themselves. The
European Commission will push to make progress
on this package.
As regards roaming, several Member States
resisted an agreement in the past, arguing that
they wanted to wait for the European Union body
that brings together national telecoms regulators
(BEREC) to issue an opinion on the concrete
elimination of roaming fees. One of the main
issues in this dossier is identifying a solution to
the wholesale prices charged between operators.
The Latvian EU Presidency already suggested
postponing the abolition of roaming charges until
at least 2018.
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6. #DigitalAgenda @ full speed
As regards net neutrality and the issue of
preventing internet providers from charging
websites for better connections, the European
Council is still divided between countries that
want strong net neutrality rules and countries that
want to allow telecom companies flexibility in
price discrimination.
Data protection
In 2012 the Commission proposed major reform
of the EU legal framework on the protection of
personal data. The package is now under inter-
institutional negotiation but issues surrounding
informed consent for the use of data, sanctions,
privacy by design and red tape remain sources
of friction between Parliament and EU Member
States represented at the Council of the European
Union. Serious differences between the European
Parliament and the 28 Member States cast doubts
over whether the new rules can be agreed before
the end of the year.
Platform neutrality
In its upcoming strategy, the European
Commission is expected to tackle the issue of
platform neutrality – particularly discrimination
in referencing in search engines, access to
online shopping platforms and products linked
to applications on smartphones. In a letter to
the European Commission in December, the
governments of Germany and France voice strong
supportoftheinitiativeandcallontheCommission
to prioritise the topic.
Protection of online shoppers -
cyber security
The European Commission has anticipated the
introduction of legislative proposals to improve
the protection of online shoppers. It will also
introduce new measures to reinforce cyber
security in the EU.
Towards a copyright
reform
In October 2014 Günther Oettinger, the new
Commissioner for Digital Economy and Society,
announced a comprehensive revision of European
copyright law. The aim of the reform will be to
adapt rules dating back to 2001 to the digital era.
The reform is expected to be presented by next
summer.
The Commissioner already revealed that the EU is
planning to introduce copyright levies on the use of
copyright-protected works on the internet. These
levies have been suggested in such a way that
companies would have to pay for the online use
of works regardless of whether their headquarters
are located within the EU. In Germany, copyright
rules already require search engines and content
aggregators to pay publishers in order to display
snippets of their content in certain circumstances.
Another anticipated issue concerns the removal
of restrictions on access to digital content, and
particularly to stop blocking online consumers
based on their location or residence. The
Commission intends to remove unjustified curbs
on transfer and access to digital assets. Debate on
this critical issue already promises to be intense.
2015 EU DIGITAL AGENDA
Early 2015: Consultation on upcoming strategy
for the digital market (Brussels)
February: #Digital4EU stakeholder forum
May: Presentation of the strategy for the digital
market (Brussels)
28 May: Meeting of EU ministers in charge of
Digital (Brussels)
17 June: Digital conference (Brussels)
Summer: Presentation of the copyright reform
6

7. 2015: a critical year for the energy union
The European institutions will focus on two topical
projects in 2015: the release of the European
Commission’s much-awaited strategy on the energy
union and preparation for the United Nations Climate
Change Conference in Paris in December.
Towards a strategy for
the energy union
On 25 February the European Commission will
unveil its draft strategy for the energy union, which
has been highly anticipated by energy circles in
Brussels. Over half of the EU’s Commissioners are
involved in the elaboration of this strategy, including
Commissioners for energy and climate, internal
market, competition, the digital agenda, regional
policy, research and the High Representative for
foreign affairs.
TheEnergyUnionisexpectedtobestructuredaround
five pillars: (1) security of supply, (2) completion of
the internal energy market, (3) demand moderation,
(4) decarbonisation of the EU energy mix and (5)
research and innovation. The strategy is expected
to include 42 diplomatic, political and legislative
measures in the energy domain, and encapsulates
the various initiatives previously discussed separately
or in subgroups.
In particular, the European Commission will put
forward options for the common purchasing of gas
and initiatives to increase the diversification of gas
supply routes by targeting Norway, North Africa
and the USA. It will also put forward measures to
Energy policy is emerging as one of the most critical priorities for the new EU leadership and is gaining
political relevance. Two Commissioners share responsibility for energy during the upcoming legislative
period: Miguel Arias Cañete (Spain) and Maroš Šefcovic (Slovakia).
legally require gas suppliers to build up reserves.
Additionally, the Commission may propose revision
of some directives, including those on carbon
capture and storage, energy efficiency, renewable
energy and fuel quality. These revisions, however,
will not likely outline the objectives and timeline of
such reviews. This strategy is of utmost importance
to energy stakeholders in Brussels, as it will set
the tone and perspective for the next five years of
EU energy policy. The uncertainty over oil prices in
the short and long term has already reshaped the
debate and forced policymakers to reconsider their
original energy strategies, which were based on the
assumption of higher oil prices. As gas contracts are
linked to the price of oil, renewable energy producers
are apprehensive of increased competition from
electricity generated by gas-fired power stations.
Some Member States are considering a reduction
or removal of their subsidies for fossil fuel
infrastructure. This stance has been backed by the
European Commissioner for Energy, who has called
for a reallocation of these subsidies for renewable
energy projects.
The rotating presidency of the European Council will
be held by Latvia through June 2015. This presidency
has organised a high-level ministerial conference in
Riga on 6 February to discuss concrete objectives
and a timeline for implementing an Energy Union.
Industry representatives and stakeholders will
have the opportunity at the conference to debate
and reach an agreement on the future of European
energy policy.
7

8. Throughout 2015 and in particular during the
second half of the year, the European Commission
and energy stakeholders will be busy with the
preparation of the December Climate Change
Conference in Paris. In its programme for 2015,
the European Commission announced that it
will issue a Communication entitled ‘The Road
to Paris’, which “will set out the EU’s vision and
expectations in the run-up to the United Nations
Framework Convention on Climate Change
(UNFCCC) Conference of the Parties in Paris
at the end of 2015 and will begin to table the
legislative proposals to implement the 2030
Climate and Energy package.”
Leading by example, the EU is currently
discussing a policy framework which includes
setting itself a 2030 emissions reduction
target of 40% below 1990 levels, with
renewables targets representing at least 27%
of the European energy mix by 2030. Industry
representatives in Brussels, responding
shortly after the informal agreement on the
proposal in October 2014, made no secret of
their discontent. Two major pan-European
business organisations (BusinessEurope
and Eurochambres) hold that such an
approach would be detrimental to the
competitiveness of the European industry
andshouldratherfavourmorecost-effective
solutions to reduce emissions. NGOs and
environmentalists also argued that the
targets are “desperately inadequate and
ineffective – Europe has lost all credibility
with respect to its ambitions on energy
and climate policy.”
Energy and Environment ministers will
further discuss the 2030 energy/climate
framework at an informal meeting on
14-16 April in Riga under the leadership
of the Latvian Presidency. Based on
these talks, the European Commission
will come forward with a more formal
legislative proposal during the first
semester of the year. The framework
will then have to go through the full
co-decision procedure involving the
8
Parliament and Council. As the process is likely to
take 12 to 18 months, there is only a slight chance
that the framework will be finalised before the Paris
Conference in December.
Besides these two major energy dossiers, the
European Commission will continue its policy
debates on the reform of the European Emissions
Trading System (EU ETS), the deployment and
funding of Trans-European energy infrastructures,
the uptake of Carbon Capture and Storage (CSS)
technologies and the negotiation of international
partnerships in the field of energy.
2015 EU ENERGY MILESTONES
6 February: High Level ministerial and
stakeholder conference on Energy Union (Riga)
12 February: EU Heads of State and
Government meeting (Brussels)
25 February: Presentation of the Strategy for
the Energy Union (Brussels)
5 March: EU Energy Ministers meeting
(Brussels)
19 March: EU Heads of State and Government
meeting (Brussels)
Spring: New Energy Charter with Central and
Eastern European Countries (Brussels)
14-16 April: Informal meeting of EU Energy
Ministers (Riga)
8 June: EU Energy Ministers meeting (Brussels)
25 June: EU Heads of State and Government
meeting (Brussels)
30 November – 11 December: United Nations
Climate Change Conference (Paris)
Towards a global agreement on climate change

9. Looking at the 2015 Work Programme, it is the
internal market aspect that seems to prevail this
year. Meanwhile EU financial resources will be made
available throughout the year to support leading-
edge health care projects of EU interest.
2015 health programme
The EU Health Programme (2014-2020) is the main
instrument managed by the European Commission
(total budget of € 449.4 million) to implement EU
health strategy. The EU Health Programme aims at
supporting co-operation projects at the EU level,
actions jointly undertaken by Member State health
authorities, the functioning of nongovernmental
bodies and co-operation with international
organisations.
It is implemented by annual work plans, setting out
each year priority areas and the activities which can
be co-financed under the programme. Programming
and implementation are conducted through calls for
grants and tenders regularly published in the EU
official journal.
Participation is open to a wide range of organisations,
including research institutes and universities, public
authorities, NGOs and businesses.
This year’s plan is expected to be released later
during the first semester of the year.
Medical devices
In 2015 the EU institutions will try to finalise the
agreement on a new legal framework for medical
devices and in-vitro diagnostic medical devices. The
proposals govern the placing on the market and
the monitoring of health products for internal and
external use, such as pregnancy tests, pacemakers
and HIV blood tests. The proposals aim to ensure that
patients, consumers and healthcare professionals
can benefit from safer, effective and innovative
medical devices and thereby reduce the risk of
future health threats, such as those associated with
PIP breast implants.
The European Parliament adopted its position in
April 2014 and gave a negotiating mandate to the
two rapporteurs (Glenis Willmott (S&D, UK) and
Peter Liese (EPP, DE)) last November. The Council,
however, is finding it difficult to reach agreement.
Currently, many stumbling blocks remain despite
almost two years of discussions between the national
governments. The Member States do not agree on
the question of reprocessing single-use devices.
Some Member States have called for an EU system,
while others say it is a national competence. Germany
hopes that reprocessing will be allowed in certain
specific cases (e.g., in hospitals) established by
national law. France, meanwhile, prefers to maintain
a total ban. Another problem is the supervision
of devices before/after they are placed on the
market, as well as the costs that should be assumed
by competent authorities, notified bodies and
Towards a healthier Europe?
Whiletheorganisationanddeliveryofhealthcareistheresponsibilityofeachcountry,theEUcomplements
and adds value to national policies by addressing common challenges and sharing best practices and by
ensuring a level playing field in terms of market access for the industry and product safety for European
citizens.
9

10. manufacturers. The matter of the field of application
for the new legislation also remains unresolved:
should cosmetic products and tinted contact lenses
be considered medical devices even though their
main objective is not considered health-improving?
As ever, the matter of secondary legislation and the
inclusion of the European Parliament in the scrutiny
thereof remain open.
The European Commission and the European
Parliament are both hoping that the Latvian
Presidency will manage by June to agree on a
general approach for the EU Council that would allow
the three-way talks to reach a final decision backed
by support from the other two EU institutions. If
agreement is reached before the summer the new
rules may come into effect as of 2018.
Transparency
This year’s Commission Work Programme includes
a list of 80 pending proposals due to be withdrawn.
One of these proposals is aimed at regulating the
transparency of measures related to the price of
medical products for human use and their inclusion
in the scope of public health insurance systems.
The reason behind the withdrawal of the directive is
the lack of any foreseeable agreement; the Member
States oppose the proposal, believing it interferes
too much with their national sovereignty regarding
price-setting systems.
Stakeholders’ open
consultations
Stakeholders’ open consultations are becoming an
integral part of the EU decision making process. As
regards Health policy, there will be a consultation
during the second semester of 2015 on the revision
of guidelines for orphan medicinal products. Orphan
medicinal products are intended for the diagnosis,
prevention or treatment of life-threatening or
very serious rare diseases or medical conditions
that affect no more than 5 in 10,000 people in the
European Union. The legislation aims at providing
incentives for the development of orphan and other
medicinal products for rare disorders. Currently,
companies with an orphan designation for a
medicinal product benefit from incentives such as
fee waivers, a 10-year post-authorisation market
exclusivity period for designated products; scientific
assistance for marketing authorisation; and the
possibility of Community marketing authorisation.
The consultation will look into aspects of the
application procedure of orphan medicinal products.
10

11. 11
During the 2nd semester the European
Commission will also launch a consultation on
pharmaceuticals in the environment. The issue of
effects of pharmaceuticals in the environment was
heavily debated within the European institutions
with reference to substances that represent a
pollution risk to surface waters in Europe. In its
draft text the Commission included a provision
on Environmental Quality Standards (EQS) for 3
pharmaceutical substances (hormonal preparations
17alphaethinylestradiol and 17beta-estradiol and
the painkiller Diclofenac), thereby including these
substances in the sustainability target in terms of the
ecological, chemical and quantitative “good status”
for European water. In the final text adopted as law,
pharmaceuticals were only included in a “watch list”
of emerging pollutants that may one day be placed
on the priority list.
Better use of antibiotics -
The Horizon Prize
The European Commission is launching a € 1 million
prize to address the issue of unnecessary use of
antibiotics, which is contributing to the growing
problem of antibiotic resistance. The challenge is
to develop a rapid test that will allow healthcare
providers to differentiate at the point of care patients
with upper respiratory tract infections that require
antibiotics from those that can be treated safely
without antibiotics.
The test will need to be inexpensive, rapid, easy-to-
use for healthcare providers and non- or minimally
invasive for patients. By putting a stop to the needless
prescription of antibiotics, the aim is to prevent the
side effects associated with unnecessary treatment,
eliminate the cost of prescribing antibiotics and,
most importantly, decrease the development of
resistant bacteria.
The rules of the competition will specify the targets
that need to be met but will not prescribe the
methodology or any technical details of the test.
Applicants will therefore have total freedom to come
up with the most promising and effective solution –
whether they be an established scientist in the field
or an innovative newcomer. The competition will be
launched in February 2015 and will run through the
end of 2016.

12. 12
Internal market and
digital health solutions
Placing the Health Commissioner on the
Commission Project Teams of Jobs, Growth,
Investment and Competitiveness and Digital
Single Market (alongside the Better Regulation
and Inter-Institutional Affairs, Budget and Human
Resources teams) strengthens the new approach
of increasing focus on the internal market
factors and growth potential within the health
sectors. The new Health Commissioner, Vytenis
Andriukaitis, is promoting “a new boost for
Health in Europe” to stimulate investments in
health. He argues that health policies can make
a significant contribution to Europe’s economic
recovery, with the Commission supporting
national health systems to become more
efficient and innovative so that they can provide
equitable healthcare to all citizens while also
remaining financially sustainable. In future,
regulatory changes related to medicines and
pharmaceutical products will be developed
jointly by Health Commissioner Andriukaitis
and Elzbieta Bienkowska, Commissioner for
theInternalMarket,Industry,Entrepreneurship
and SME portfolio.
Health Commissioner Andriukaitis will also
work closely with Vice-President Ansip
(responsible for the Digital Single Market)
and Commissioner Oettinger (responsible
for Digital Economy & Society) to support
the further deployment of eHealth across
Europe.
Many potential hurdles to eHealth can only
be tackled at the national and regional
levels (e.g., reimbursement issues) but
co-ordination at the EU level helps ensure
a coherent approach. Patient safety, the
involvement of health professionals and
mutually comprehensible terminology
are areas in which EU co-ordination is
seen as particularly useful. Projects
related to eHealth can be co-financed
by the EU under several programmes,
such as the EU Health Programme.
The next meeting of the EU eHealth
Network will take place in Riga on 12
May, during the Latvian presidency.
2015 EU HEALTH MILESTONES
1st semester 2015: Annual Work Plan 2015 for
the EU Health Programme
1st semester 2015: Public consultation on
the Concept paper on Delegated Regulation on
Good Manufacturing Practice for investigational
medicinal products
February 2015: Launch of a €1 million prize
addressing the issue of the unnecessary use of
antibiotics
2nd semester 2015: Stakeholder consultation
on Revised EC guidelines on aspects of the
application of Regulation EC 141/2000 on orphan
medicinal products
2nd semester 2015: Stakeholder consultation
on the Strategy on pharmaceuticals in the
environment
2nd semester 2015: stakeholder consultation
on Scientific advice of EMA on the impact of
public health and animal health of the use of
antibiotics in animals
12 May 2015: eHealth Network meeting in Riga,
Latvia.
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13. The development of a Capital Markets Union
(CMU) by 2019 is mainly focused on growing and
diversifying the funding capacity of the European
economy and reducing the cost of raising capital for
companies. It constitutes a flagship priority project
of the Commission’s 2015 Working Programme
and will consists of an action plan for improving the
financing of the economy through more efficient
market-based instruments. Jonathan Hill, the
British-born Commissioner for Financial Stability,
Financial Services and Capital Markets Union, will
launch a broad consultation process on such plan by
the end of February and subsequently finalise the
plan by next summer.
Towards a capital
market union
The European Commission recently kicked off its
flagship project to create a Capital Markets Union
(CMU) for all 28 EU Member States with operational
orientations due to be revealed on 18 February and
submittedtoawideconsultationamongstakeholders
on concrete areas for action. CMU is designed to help
businesses tap into diverse sources of capital from
anywhere in the EU and offer investors and savers
additional opportunities to put their money to work.
It aims to create a single market for capital for all 28
Member States by removing barriers to cross-border
investment and lower costs of funding within the EU.
According to Commissioner Hill, “One of the key
challenges Europe faces is to get investment flowing
to support jobs and growth. A true single market
for capital in all 28 Member States would help
support that goal by linking savers and investors
with businesses, big and small, that want to grow.
It would also help broaden sources of funding,
complementing the important contribution already
made to our economy by the banking system. We
need to identify the barriers that are stopping capital
from flowing and work out how to knock them down
one by one. That will be the purpose of the Green
Paper we will launch in a few weeks’ time.” Based on
the feedback it receives, the Commission will unveil
an Action Plan on the CMU during third quarter of
2015.
The College of European Commissioners has
recently agreed that the forthcoming consultative
papershouldbuildontheshort-termprioritiessetout
in the Investment Plan for Europe – such as reviving
the markets for high quality securitisation and
simplifying the Prospectus Directive by consulting
on how those priorities should be implemented. In
addition, the Green Paper should seek views on how
to address, in the medium term, the deep seated
barriers, which go beyond financial market issues, to
integrated capital markets. In the longer term, if and
when the capital markets will become increasingly
integrated, the Commission may also consider the
possibility of expanding the role of the European
supervisory authorities.
Financial services’ “sticks and carrots” to
support the EU economy
13

14. 14
Banking union and
supervision
A single rulebook for the resolution of banks and
large investment firms in the EU Member States
came into force on 1 January 2015. The rules
harmonise and improve the tools for dealing with
bank crises across the EU and ensure that, in case
of failure, banks’ shareholders and creditors, rather
than taxpayers, will bear their share of the costs
through a “bail-in” mechanism.
Governance and supervision are also key issues
with respect to non-banking entities. Throughout
2015, the regulatory framework will be further
strengthened by a proposal on crisis management
and resolution of systemic non-banking entities such
as central counterparties (CCPs), central securities
depositories (CSDs), insurance companies, hedge
funds, etc. The Commission will begin preparatory
work on ways in which the single market for retail
financial services can deliver more benefits to
consumers through increased choice, competition,
and transparency.
Completion and
implementation of the
financial regulatory
framework
Throughout 2015, the Commission will also focus
on the enforcement and implementation of the
complex regulatory framework (already agreed)
spanning from new capital adequacy to solvency and
updated rules for markets in financial instruments.
There are over 400 delegated and implementing
acts yet to be adopted to translate EU regulation
into daily market practices. These kinds of post-
secondary rules are used to specify the details of
technical and operational issues, after the general
act is adopted, and are prepared by the European
Commission with the support and agreement of
national technical experts in the field.
In this respect, on 16 December 2014 the European
Banking Authority (EBA) adopted the final
guidelines on the criteria for determining conditions
of application of the revised Capital Requirement
Directive (CRD IV) in relation to the assessment
of other systemically important institutions. The
guidelines establish a scoring process for assessing
systemic importance based on evaluating an
institution’s size, importance, complexity, cross-
border activity and interconnectedness.
The Commission also adopted its first “equivalence”
decision for credit risk weighting by establishing a list
of third countries whose supervisory and regulatory
arrangements would be considered by the EU as
equivalent.
Building a deeper and
fairer internal market
An important aspect due to be addressed by this
year’s Commission Working Programme regards
new draft legislation to toughen regulation of
clearinghouses in a bid to prevent financial turmoil.
Tougher safeguards are needed to calm concerns
that might be triggered across the global financial
system by the collapse of a clearinghouse company.
In addition to the clearinghouse rules, Commissioner
Hill is assessing the need to boost measures covering
other financial industries, beyond banks, in order to
prevent firms being too-big-to-fail.
Another important challenge for 2015 refers to
the development of an EU framework for high-
quality securitisation. In this context, on 14 October
2014 the EBA published a discussion paper on
simple, standard and transparent securitisations,
in response to the European Commission’s call for
an investigation of the potential ways and merits of
promoting a safe and stable securitisation market.
EBA aims to shape a new class of prudentially sound
securitisation products that may become subject to
specific regulatory recognition, and intends to use
the three pillars (simplicity, standardisation and
transparency) as protection measures to ensure that
risks in securitisations unrelated to an underlying
exposure are adequately mitigated. The consultation
closed on 14 January 2015 and EBA is expected to
submit its final technical advice to the EU on this
matter during the second quarter of the year.

15. 15
Pension funds
Revision of the first pan-European regulatory
framework put in place by the 2003 Directive on the
Institutions for Occupational Retirements Provisions
(IORP) is one issue inherited from the previous
legislature that is due to be tackled in 2015. Last
December the Council agreed its negotiating
stance on a draft Directive aimed at facilitating the
development of occupational retirement savings and
better protecting pension scheme members and
beneficiaries in Europe (“IORP II”). The new draft
legislation is intended to improve the governance
and transparency of pension funds and facilitate
cross-border activity. The European Parliament
recently appointed Irish MEP Brian Hayes as
rapporteur for this long-awaited revision, which
is likely to continue for another year. Meanwhile
the European Commissioner may also reconsider
the scope of the legislative revision by exploring
opportunities to develop a completely new
regulatory regime.
In relation to the good news for EU pension
schemes, it is worth recalling the European
Commission’s recommendation from early
in 2015 to grant pension funds a two-year
exemption from central clearing requirements
for their over-the-counter (OTC) derivative
transactions. Under current arrangements,
pension schemes – which encompass all
categories of pension funds – would have to
source cash for central clearing. This further
exemption would not exclude the need to find
technical solutions towards central clearing
for their derivatives transactions, as is the
case for other financial institutions.
In many Member States, pension schemes
use OTC derivative transactions (i.e.,
derivatives that trade through a dealer
network rather than through a centralised
exchange) to hedge long-term interest
rate and inflation risks. Pension schemes,
however, do not generally hold cash, but
rather invest in higher-yielding and longer-
term assets such as bonds to enhance
returns for pensioners. A requirement to
source cash for central clearing would
require very far-reaching and costly
changes to this business model and may
ultimately reduce pensioners’ retirement
income.
2015 EU FINANCIAL MILESTONES
February: launching of a green paper on
Commission’s plans to set up the CMU.
17 February 2015: next ECOFIN meeting
19-29 March 2015: European Council meeting
3rd quarter of 2015: the Commission will unveil
an Action Plan on the CMU.
June 2015: approval by the EP of the investment
plan for Europe aimed at mobilizing private
financing in the context of the CMU.
September 2015: expected functioning of the
investment plan for Europe.
15

16. The European Union is the biggest player on the
global trading scene, ranking first in both inbound
and outbound international investments, and is
the top trading partner for 80 countries. The most
recent estimates for the trade in goods between
the 18 eurozone countries and the rest of the world
showed a €20.0 billion surplus in November 2014,
as compared with a €16.5 bn surplus in November
2013. Trade policy is at the core of EU competences
and broadly focuses on four overall objectives: the
creation of a global system for fair and open trade;
opening up markets with key partner countries
(particularly through negotiating better access and
conditions for trade and investment through free
tradeagreements);ensuringthatothercountriesplay
by the rules (with a focus on reducing counterfeiting
and piracy of European goods); leveraging trade as
a means to promote sustainable development, to
improve working conditions for workers in developing
countries and ensure the highest standards of
health and safety for the products bought and sold
by Europeans. Cecilia Malmström from Sweden
is the European Commissioner for International
Trade and Trade Agreements. The agreement on
a comprehensive EU-US trade and investment
partnership has emerged as the most compelling
– and controversial – external trade issue on the
table of the new Commission. Meanwhile, other
important bi-lateral agreements are subject to
ongoing negotiations, in particular with China for a
comprehensive investment agreement.
Transatlantic Trade and
Investment Partnership
(TTIP)
The Transatlantic Trade and Investment Partnership
(TTIP) is a free trade agreement currently being
negotiated between the European Union and the
United States. It is one of the top ten priorities
of the new Commission in office, reflecting the
importance of EU-US relations and the positive
impact that a new comprehensive agreement can
have for economies on both sides of the Atlantic.
The objective of the agreement is to remove trade
barriers, enhance market access and improve co-
operation in international standards on both sides.
The first working group was set up by EU and US
leaders back in November 2011. Negotiations were
launched two years later, and by early February
2015 eight rounds of bilateral negotiations have
been conducted (held alternatively in Brussels and
Washington DC).
The ongoing negotiations have been heavily debated,
with citizens, NGOs and stakeholders expressing
concerns about the transparency process that would
lead to the adoption of the text and to the investor-
state dispute settlements (ISDS) – i.e., clauses that
grant an investor the right to use dispute settlement
proceedings against a foreign government.
Boosting EU trade policy negotiations
with more transparency
16

17. 17
With respect to the transparency issue, on 25 November
2014 the Commission adopted a communication
outlining actions to be taken to enhance transparency
during negotiations, and on 7 January 2015 eight
papers covering competition, food safety, animal and
plant health, customs issues, technical barriers to
trade, and SMEs were published by the Commission.
DG Trade Commissioner Malmström said that more
information will follow after the end of the eight
rounds of negotiations in February.
With respect to ISDS, it should be borne in mind
that the issue is of extreme importance due to the
consequences these clauses may have on other
agreements. For instance, if there were no ISDS
deal with the US, China would not accept such an
insertion in the investment treaty. In the negotiation
mandate given to the Commission it was made
clear that investment protection and ISDS should
form part of the agreement concluded with the
US only after a number of conditions are met.
Consequently, a decision on whether or not to
include ISDS will have to be taken during the
final phase of the negotiations in agreement
with First Vice-President Timmermans, who will
ensure that ISDS fully complies with the rule of
law, the principle of equality before the law and
the principle of transparency.
The Commission will further consult with
EU stakeholders, Member States and the
European Parliament during the first quarter
of 2015 on the above-mentioned issues, with a
view to developing concrete proposals for the
TTIP negotiations. Until then, no negotiations
are currently being held on this issue.
2015 EU TRANSATLANTIC
MILESTONES
February 2015: 10th round of negotiations of
Trade in Services Agreement with US (TiSA).
April 2015: 9th round of negotiations for the
Transatlantic Trade and Investment partnership
(TTIP).
End of 2015: final agreement for Japan-EU
Economic Partnership Agreement.
First semester of 2016: application of the EU-
Canada trade agreement
17

18. For further information
leonardo sforza
LEONARDO.SFORZA@MSLGROUP.COM
romain seignovert
ROMAIN.SEIGNOVERT@MSLGROUP.COM
astrid burhöi
ASTRID.BURHOI@MSLGROUP.COM
WEB
WWW.MSLGROUP.COM
TWITTER
@MSL_BRUSSELS
Office
SQUARE DE MEEÛS 23, 1000 BRUSSELS, BELGIUM
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