European and External Relations Committee

Meeting date: Thursday, October 4, 2012

Official Report 449KB pdf

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“Brussels Bulletin”

We move on to agenda item 4—the “Brussels Bulletin”, which, as you know, Ian Duncan expertly puts together. In some cases, things change within hours, so I will hand over to him to give us an insight into the most recent edition.

Thank you very much, convener. I will touch on just a few things in this month’s bulletin.

Members will have discovered that every bulletin now has a section on developments in the euro zone, which is usually by far and away the most significant part of the bulletin. One of the bigger issues, which I am sure that members will be aware of from the news, is the manner by which Europe’s banks are to be recapitalised. A big victory in the summer council meeting was the decision that the new bail-out funds would be able to assist banks directly rather than the money having to be fed through the national exchequers. It now seems that three countries are claiming that they did not really mean that, and that such an arrangement would apply only to future problems and not to the current bank problems, which seems a little disingenuous. That will remain a highly significant sticking point until it is resolved.

There are a few other points to touch on. A think tank in Brussels has produced a report that is extremely interesting in light of our engagement with languages. I just want to draw the committee’s attention to a couple of points that it makes. First, only two countries in the EU do not have compulsory language training in primary school—the UK and Ireland. Secondly, in the German-speaking province in Belgium, foreign-language training begins at the age of three. That is a reminder of just how far some countries go to ensure that their children are well equipped for the future. The final point that is worth noting is that English accounts for 73 per cent of all the foreign language learning in Europe, which is a reminder in the other direction.

At our previous meeting we spoke a little about the water blueprint and what it would mean. I had a chat with a few people in Brussels about that last week. The plan is not to create new legislation but to ensure that the current legislation works well. People are anticipating not new law but the refinement of existing law. Hanzala Malik, who is not here, had asked about the water framework directive. That will be looked at again; there are still some rough edges. A bigger concern of the Commission is that the member states have not implemented a number of obligations, or have not implemented obligations particularly well. The intention is to horizon scan, ascertain where implementation has not worked and address deficiencies.

I am happy to take questions on anything in the bulletin.

In the “What’s happening?” section on page 2, in relation to the financial transaction tax you said that some countries

“disagree on whether the proceeds from such a tax should be fed directly into the EU budget (thereby reducing the contributions of certain member states).”

I do not understand how such a reduction would happen.

I am happy to help. As the EU institutions begin to discuss the next budget and how it will be funded, they are keen to look at own-resource funding—that is, the money that comes directly into the EU from its own taxation. Imagine that the EU sets a budget of, for example, £100 billion for a particular area of own resources. If much of that can be raised through its own tax, it means that member states’ contributions will be less.

As you will recall from previous discussions, a financial transaction tax would be—broadly—a tax on London and probably on Edinburgh. Some 70 per cent of the tax could well be paid by Britain, which is not that popular—although it is very popular elsewhere.

However, that will not affect us, because we are not in the euro zone.

That is right, but there is a read-across, which is one of the issues. The financial transaction tax is one that people are trying to move across, because if most transactions are done in London the tax will not raise much—

So people want to get transactions to Frankfurt, or somewhere like that.

There is an ambition—

Is this another move to use Frankfurt rather than London as a financial centre?

The financial transaction tax has become a hardy perennial, because it is being discussed a lot, but another of the issues being discussed is the ambition to ensure that transactions are done in euros. That would immediately penalise London. There have been other discussions about ensuring that transactions are fed through institutions in the euro zone. There are lots of attempts to ensure that the euro benefits.

France is keen to drive the issue forward and secure agreement through enhanced co-operation, which allows a smaller number of member states to reach agreement. The idea is—

It requires nine, does it not?

Yes, that is right. Others may join in later. However, France has not secured support for that yet, which is interesting, because one might have anticipated that France would have lined up the ducks before setting sail. That has not happened. It will be interesting to see where the issue goes. Currently, the transaction tax is more an academic discussion; there is no meeting of minds in the Council.

Thank you.

Will the vote in the Catalan Parliament come after the Catalan parliamentary elections on 25 November? I am trying to get a sense of the chronology.

I think that the referendum will come after the general election.

My attention was drawn to the comment on page 8 about the new study on public procurement. May we have more information about what that means for the Scottish Government’s proposed legislation on procurement? Could there be interaction between those two pieces of work, to everyone’s benefit?

I am also interested in the 4G roll-out in the UK. Is there a European perspective on how member states approach the issue? It is crucial in the context of inclusion and many other issues that the Parliament has discussed, and I would be interested in hearing about the European dimension if that is possible.

10:15

Absolutely. The European Parliament’s Committee on Regional Development has published a comprehensive study as part of the continuing European drive for public procurement to achieve greater conformity across the member states. We can provide more information on that—that would not be difficult at all. As the minister said earlier, we are moving towards the endgame for the cohesion structural funds budget allocation. That will be resolved very soon, and we can provide more information on that.

The same is true of the 4G issue. There will be a European dimension to it in how other member states are rolling it out and how we can compare across member states. We may be able to seek information on that. I am loth always to point the committee to the Scottish Parliament information centre, but SPICe can perhaps help us to gather some more information and we can report back at a future meeting.

Just over two weeks ago, I went to the European Parliament’s premises at the Tun for a seminar on public procurement. It was attended principally by solicitors, but local government officials and councillors who are involved in procurement were also there. One of the key speakers was Catherine Stihler, and there were other speakers from the world of solicitors. We were told that here will be two key votes: one will be on 8 October—just next week—and the other will be on 12 December. The big concern was expressed that there is no certainty across all the EU member states about the social policy aspect of procurement.

I, personally, have been delighted that article 19 of the procurement directive helps supported businesses such as Remploy factories to have legally protected, reserved aspects of their contracts. However, it seems that all of that is now up for debate. Catherine Stihler told us that there are something like 1,017 amendments that put in jeopardy that aspect of the directive. I do not know the prognosis for the outcome of that debate—I missed that bit of the discussion—but real anxiety and worry was expressed about that. The Hungarian Government and others have moved to the right, and whether they want to preserve the social policy that we want in procurement is unknown at this stage.

That is a relevant point. Given that the Scottish Government is introducing legislation on public procurement and we all have a focus on the social policy element, would it be appropriate for the committee to ensure that the study is brought to the attention of the Scottish Government? I do not doubt that the Government already has it but we could make sure, emphasising the risk of the social policy aspect being placed in jeopardy and asking the Scottish Government to recognise that. That would inform our conversations on the issue.

Yes, absolutely. Helen Eadie is right. The committee in the European Parliament will make its decision next week and the plenary debate will take place before the end of the year. Between those two points, we can get a broader sense of the amendments, some of which are quite controversial. You are right to suggest that one big question is the definition of what constitutes a social issue. Some countries have a very narrow definition while others have a more expansive definition. Some of that will be resolved through the amendment process, and we will have a better idea of the position after next week.

If members are content to move on, the only issue that I want to raise, which is not in the “Brussels Bulletin” but which is topical, is whether there has been any EU discussion on last night’s developments between Syria and Turkey given Turkey’s position in Europe.

I read about that in a newspaper this morning—I am afraid that I have not done any research other than that. I am, however, aware that the EU has been very active regarding Syria, both at a parliamentary level and within the European Council. You will know that the high representative for foreign affairs, Catherine Ashton, has been to Syria on several occasions to try to assist. I suspect that the recent incendiary developments will be discussed significantly throughout the various offices in Europe, and I am happy to report back on those developments at the committee’s next meeting.

Is the committee content to bring the “Brussels Bulletin” to the attention of the relevant committees?

Members indicated agreement.

Thank you, Ian.

We previously agreed to take agenda item 5 in private.

10:20 Meeting continued in private until 10:29.