European Scrutiny Committee Meeting Summary: 20 November 2013

This week the Committee considered the following documents:

Financial services: benchmarks (Reasoned Opinion)
The Committee returned to a draft Regulation on indices used as benchmarks in financial instrument and financial contracts, having now had a response from the Government about its efforts to secure a better impact assessment from the Commission and its analysis of the subsidiarity concerns that the Government touched on in its EM.  We report that, while being a strong proponent of benchmark reform and believing that there is scope for action at EU level, the Government expresses a view that this proposal is too broad in scope, imposes too great a burden and inappropriately requires authorisation and supervision of benchmarks produced by national statistics authorities by the European Securities and Markets Authority.  We agree that there are grounds for subsidiarity concerns and so recommend that a Reasoned Opinion be debated in European Committee B.  We continue to hold the document under scrutiny while awaiting the Minister’s further response to substantive points.

Aviation and the EU Emissions Trading System
In 2008, the EU sought to extend its Emissions Trading System (ETS) to include aviation by requiring aircraft operators to monitor and report each calendar year on their emissions, and to surrender the corresponding number of carbon allowances and project credits.  With significant progress having been made in the International Civil Aviation Organisation (ICAO) towards the global regulation of aviation emissions, a Decision was adopted in April 2013 to suspend, for one year, these obligations on flights between the European Economic Area (EEA) and third countries, in order to encourage further negotiations.  The ICAO has now agreed that global measures should come into force in 2020, and the current proposal would further amend the EU ETS between 2014 and 2020 so as to re-impose monitoring and reporting obligations on international flights departing or arriving at EEA airports, but to confine these to that proportion of the flight which occurs within EEA airspace. As the proposal is both technically complex and has potentially tricky political implications, the Committee has decided to recommend it for debate in European Committee A.

Safety of Nuclear Installations
We are recommending a debate in European Committee A on a draft Council Directive dealing with the safety of nuclear installations. This is formal proposal, which follows a draft which the Committee considered in July of this year, the ostensible aim of which was to increase regulatory effectiveness and transparency and to improve safety in the wake of the Fukushima accident.  We report the Government’s concerns over what appear to be the unacceptable constraints this would place on Members States in an area of considerable political and environmental importance, and note that the Commission impact assessment fails to demonstrate the alleged benefits of the proposed changes. We therefore feel this would be an appropriate time for the House to consider the issues raised.

EU support to governance in the DRC
The Court of Auditors’ Report concludes that, while EU support is set in a generally sound cooperation strategy and addresses the main needs, and has achieved some results, progress has been slow, uneven and limited.  Continuing uncertainty about the EU’s capacity to undertake this sort of work in one of the most fragile states in the world; continuing differences in view between the Commission and the Court, and the Commission and the Minister; and uncertainty as to the Government’s view about the value of applying "conditionality" in such work, give rise to questions. We feel a debate in European Committee would enable Members to address these issues with the Government.

European External Action Service
The Minister’s positions on aspects of the EU High Representative’s review of the EEAS are clear.  But it is far from clear to what extent they are shared by other Member States.  The Conclusions that will be adopted by the 17 December General Affairs Council will thus be crucial.  So, in advance of that Council, we recommend that the HR’s review be debated on the floor of the House, so the Minister can outline for the House what elements he will be seeking to have included in, and excluded from, the Conclusions to be adopted then.

Other documents reported
We are also reporting on documents relating to:

• Business, Innovation and Skills: Establishing a European Research Area; Opening up education; Accession of the Yemen to the WTO; EU Consumer Programme; Euratom Research and Training Programme;
• Foreign and Commonwealth Office: EU-Kosovo cooperation;
• HM Treasury: EU Budgets;
• HM Revenue and Customs: customs and taxation;
• Home Office: Repeal of EU funding instrument to enhance protection against terrorist and other security-related incidents;
• Justice: EU accession to the ECHR; 
• Transport: alternative fuels; ports.

The Committee’s report will be available on the Committee's publications webpages next week.

The Committee’s Twenty-second Report will soon be published, covering: the role of national parliaments and subsidiarity; Protecting the EU’s financial interests; Economic and Monetary Union (EMU); the Tobacco Products Directive; EU Foreign, Defence and Security Policy ; a “Europe for Citizens” Programme 2014–20; implementation of EU commitments on reducing greenhouse gas emissions; long-term energy infrastructure for Europe and beyond; EU enlargement strategy: EU’s Common Security and Defence Policy; political dialogue and cooperation between the EU and Central America; reform of the EU’s staff regulations; the EU and the Horn of Africa; Financial services: shadow banking; protecting the EU’s financial interests; European Investigation Order; European Investment Bank; statistics (draft Regulation); statistics (draft Regulation and Central Bank Opinion); civil aviation safety.