“Brussels Bulletin”
Agenda item 5 is the “Brussels Bulletin”. I hand over to Ian Duncan so that he can give us his report.
This “Brussels Bulletin” is slightly longer than usual, as it covers the period from around the last time that we met, at the back end of May, through to last week.
There are a couple of things to which it is worth drawing the committee’s attention. A tradition has begun whereby each year President Barroso sets out his assessment of the state of the union, as it is called. President Barroso’s address contained a couple of issues that are worth flagging up, the first of which was his idea that there should be a youth package. There is a lot of concern that a whole generation is being lost, primarily as a result of the financial crisis and its implications across the EU. President Barroso is looking to prioritise issues that are targeted at that generation, so that it does not get lost. That is one thing to follow up on.
In the section on developments in the euro zone, I stopped after reaching point (vii). I could have got to point (xvii), as there have been so many developments in the euro zone. One thing that is coming up is that the Prime Minister of Italy has called for a unity summit to try to encourage the European ideal of working together. Over the summer, there seems to have been a greater schism in the EU regarding the haves and have-nots, or the indebted and the debt holders. Prime Minister Monti is trying to move back to the traditional model of Europe pulling together in the same direction, and that could be interesting. Much of that is stemming from Germany’s concerns and lukewarm appreciation of some of the banking and financial reforms, primarily because it holds the money—which is why it is less inclined to want this.
The banking union will also be important. The UK would sit outwith the proposed banking union, but a number of the proposals would read across from within the euro zone to those countries outwith it, which include the UK, Denmark and some of the smaller countries.
Other items more or less follow up on some of the committee’s initiatives. You will see that the energy efficiency directive has moved towards conclusion. You might remember from when we last spoke about this that it is the only part of the broad energy package that is not binding. The target of 20 per cent energy savings is not a binding target. An explanation has been given of how that target will be met without recourse to the law. That is worth having a wee look at, because I think that it does not stack up. That is my guess, but who knows? It might work.
Something for Hanzala Malik’s attention is the section on the smart cities initiative—there is quite a bit of material on that. There is a real attempt to push that forward and get some money behind it, which is worth exploring.
I am happy to answer questions on any of the other material in the bulletin. The “Other News” section contains quite a lot of information, covering everything from mackerel right the way through. If members have any questions, I will be happy to follow that up.
It is quite a detailed bulletin. I am looking for information on two issues, one of which is water management. Scottish Water has struggled to pick up the EU’s challenges on modernisation, water delivery, and repairing and replacing old structures. How well are we coping with that? Are we up to speed with the EU in that area or are we lagging behind?
The second issue is the smart cities initiative. The convener’s visits would be very useful and help us with smart cities. Perhaps you will be able to assist us directly with that. Going back to water management, I am keen to see where we are. We do not want to find that we are not keeping up with current EU legislation.
I can answer that. On water management, there is what is being called a blueprint—as a pun, in fact—which looks at managing Europe’s waters for almost the next generation. At the moment, that is still in its early days. The proposals, which will not emerge until November, will cover a broad range of issues from smart metering inside homes, to flood management, to drought in some of the southern member states, and so forth. It will be a comprehensive document.
The committee might want to take an active interest in the issue, or it might wish to refer it to the Rural Affairs, Climate Change and Environment Committee to take forward as a priority. It will be worth while monitoring what is going on and, once the blueprint is published, simply asking Scottish Water for its views on what the proposals mean for it. At that stage, Scottish Water will be in a better position to answer us.
09:45
Historically, we have faced challenges in that area. I am keen to ensure that, when the proposals are published, we are ahead of the game, if possible. We need to be able to assist Scottish Water in facing some of the challenges. I wonder whether Scottish Water might highlight some of the challenges early before the proposals go to print so that we can consider how to provide support, assist with those challenges and cushion Scottish Water from the effects.
There are two ways to approach the matter. We can write to Scottish Water now and bring it in to give evidence if we feel that it is ready to do that. However, Scottish Water might be disinclined to do that because that would pre-empt the proposals, although there is no harm in writing to Scottish Water. Alternatively, we could write to the Scottish Government, which will have something to say on the issue. The Scottish Government will be one of the players in the UK negotiating position, so the first step might be to write to it to find out where it stands on the issue. Thereafter, we can follow up with Scottish Water when we have a clear idea of where the Scottish Government stands. However, we can do both—if you wish to bring in Scottish Water, there is no difficulty in doing that.
That is a good idea—we should contact the Scottish Government in the first instance to ensure that we can support Scottish Water. It has had serious challenges historically. I hope that we are in a better position than we have been historically to support Scottish Water. We need to be more focused in what we do.
Do members agree that we should write to the Scottish Government on that?
Members indicated agreement.
I apologise for arriving late, convener.
The point about banking reform attracted my attention, and members will understand why when I explain my concern. The “Brussels Bulletin” contains a comment from President Barroso, who has said:
“In the future, bankers’ losses should no longer become the people’s debt, putting into doubt the financial stability of whole countries.”
I welcome that, and I am sure that all committee members would agree with it. However, I have a concern about the pace at which the proposals are being put to the Council of Ministers. The bulletin states:
“The Commission has asked the Council and the Parliament”—
that is, the European Parliament—
“to consider and adopt the proposals as quickly as possible, allowing the changes to come into force by 1 January 2013. The Commission foresees a phase-in period to last until 1 January 2014, when all banks would be covered by the mechanism. EU leaders are expected to formally adopt the plan at their December 2012 Council.”
That concerns me, because the European Parliament would have the right to express only a non-binding opinion on the package, although the bulletin points out that
“The Parliament has demanded co-decision powers with the Council”.
Any democratic body would back the European Parliament on that.
As members know, in the chamber and elsewhere, I have discussed the question of the Parliament doing an urgent inquiry on the euro, given the Scottish Government’s proposals to have a referendum. Those points underline the urgency of the need to have such an inquiry.
I have been doing some homework on the issue. I have a paper from the European Commission’s directorate-general for economic and financial affairs, dated 17 September 2012, that refers to those countries that are to become new members of the euro area. For example, Latvia has become a member of the European Union and it must join the euro by 1 January 2014; Romania is compelled to join by 1 January 2015. Other countries that have joined the European Union
“do not currently have a target date for adoption of the euro.”
If Scotland goes ahead and agrees that we will become an independent state—and that has to be a realistic possibility—the fact is that Scotland would become a new member state, according to the papers that I have read. That means that we would become part of the euro, which would mean that we would come under the banking union reform. For me, that presents some difficulties because I think that the people of Scotland should be able to understand and fully comprehend everything that is in the banking union reforms.
As it stands, the proposals say that the European Central Bank would have the powers to close banks within member states. I can just see the Royal Bank of Scotland and all the other banks across Scotland leaping up in surprise and horror at some of those proposals, although some people might welcome them.
However, I return to my point about what is in the paper that we have received today. My proposal, which I put to the convener, is not reflected in our work programme paper, which talks about examining Scotland’s relationships with the European Union come the Government’s publication of the white paper. I seek an urgent inquiry into the euro and our position in relation to it, and the situation with regard to membership of the European Union and what the impact would be on the people of Scotland. I do not want the answer just for me or for the Parliament; I want an answer for the people of Scotland.
The Government has the right to get its legislative advice from its legal advisers. I know that that matter is in court today. I believe that this Parliament and the people of Scotland have the right to take independent legal advice and opinion and to get witnesses here. I know that my proposal, which I put to you, convener, and to the committee, is not reflected in the work programme, but I repeat—
It is.
No, it is not—examine the words carefully. The paper talks specifically about relations with the European Union. It does not talk about the euro and talks only about considering it, so I think—
Okay, Helen.
This underlines the fact that the situation is now urgent. The phase-in period will last until 1 January 2014, which will not give us time if we follow the proposal in our paper.
Ian Duncan will answer the first part of your question. We will take up the second part in private session, because it pertains to the work programme.
So you want to keep it secret again. You want to gag me again in public. That is what you want to do, convener.
Helen, if—
The matter is important, but you want to gag—
Helen, if you had been—
You are very secretive about this—
If you had been here at the start of the meeting when the committee agreed—
When our gate outside breaks for the 999th time, I cannot get into the Parliament’s car park and I cannot help it if I am not here at the start of the meeting. That is not my fault; that is the Parliament’s responsibility.
The committee agreed to take agenda item 6 in private.
Yes, but this is not about that item, because my proposal is not reflected in the paper. I am talking about a proposal that I am putting to you now, which needs to be regarded as urgent.
I caution you again, Helen, that the work programme is a private document. Any breach of that confidentiality is a breach of the code of conduct under section—
But my proposal is not in the work programme, so we are not talking about the work programme; we are talking about a proposal that I am putting to you.
You are talking about something that should be scheduled in the work programme. We have to have this conversation under the agenda item on the work programme.
So you are gagging me again.
The committee agreed at the beginning of the meeting to discuss its work programme in private, which is the normal and natural protocol of the committee structure in the Parliament. All the decisions on the work programme will be published.
Only matters that are commercial or sensitive for an individual should be discussed in private in this Parliament. That is in the standing orders of the Parliament. There is nothing commercially sensitive and nothing relating to an individual to be discussed in the work programme.
The protocol of the Parliament is that if a committee—
There is no protocol covering that.
If a committee agrees—
There is a standing order that dictates—
Helen! Desist, please.
The committee agreed at the beginning of the meeting to take that agenda item in private, which we will continue to do for today. Okay? I am going to move on.
Ian, can you answer Helen Eadie’s earlier points?
Yes. Helen, you are right to draw the committee’s attention to the speed with which the banking reform proposal will be taken forward. The idea that the changes will be in force by 1 January leaves almost no time for any serious debate in the European Parliament. You are correct to point out that the European Parliament has no codecision powers here, and you will also be aware that, whenever money is discussed, the Council does not like the Parliament to be too heavily involved because the Parliament has clear and different views on how money should be spent.
That said, there are a number of implications for countries outwith the euro zone, including the UK and Denmark, which will have to take decisions. There is no doubt that, once what is proposed is in force, its implications for the European Union—rather than just the euro zone—will be serious, so I suspect that during the next period the UK will be diligent in trying to ensure that nothing comes forward that will harm banking in the UK, and other member states will take the same position.
Curiously enough, it is not those outwith the euro zone that are likely to slow things down, but Germany. Although the European Central Bank board voted to bring forward the proposal, the vote was not unanimous, and the one dissenting voice was Germany’s. Given that Germany seems to be the biggest player in terms of finance, I find it difficult to believe that the proposal could move forward quickly without it. If Germany is not keen to move it forward in the given timescale, it will not happen. I do not believe that it will happen within the timescale unless Germany accepts it.
You are right—Barroso was clever in saying that the whole point of the proposal is to try to stop the crises that the world has gone through, with banks more or less being bailed out by the public purse. His ambitions are populist and will be popular, but whether the details of the proposals that come forward will be acceptable remains to be seen. I have some doubts.
Going back to the previous issue, I ask Ian Duncan whether the document on water management will include the EU water framework directive, which is important to Scotland. I am confused about that. The directive is important in relation to the whisky industry and extractions from rivers, and also in relation to tourism and the angling industry.
The water framework directive came into force in 2000, I think. There are a number of macro documents that cover both freshwater and salt water. The purpose behind the blueprint, as it is called, is to try to move that on to the next stage, so it is likely that those issues will be examined as part of a broader change. When the EU announces grand initiatives, it is never clear whether it plans to make grand laws to back them up, whether it intends to revise current laws or whether it just intends to encourage good practice. At present, I think that it is hedging its bets and saying that all those things are possible, but it has not said which are likely to be taken forward.
My hunch from earlier discussions with some people in Brussels is that the work will take such a long time that we will have ample opportunities to ensure that issues of concern to Scotland, including anglers, the whisky industry and so on, are addressed.
The EU wants to get this right. It also wants to ensure that the money works well so that subsidies, which in the past have been seen as ultimately harmful to the environment, are anchored into doing good. It might well be that anglers benefit from some of the work that is done in the area. We will know a lot more in November, but I will be in Brussels next week and I will have another dig around to see what I can find out. I will bring some more material back to the committee.
I have a further point on that. In rural Scotland, a great many people have private water supplies. Reading the bulletin, it is almost as if there is a move to put everybody on the mains, which would cost a staggering amount of money. It is worth making the point that, although the number might not be huge in percentage terms, there are a lot of private water supplies in rural Scotland.
Absolutely. That is the sort of thing that allows the Scottish Parliament to show itself at its strongest—it is able to articulate views that the Commission might not hear from other sources. I will do some more digging next week and bring back some more material, and we will have time to decide whether the committee wishes to seek to lead, or whether it should be the Rural Affairs, Climate Change and Environment Committee, which might be doing some work on this already. I cannot remember.
10:00
Thank you.
As a point of information, Jamie, our colleague Stewart Maxwell is one of the Parliament’s representatives to the Committee of the Regions. There was an extensive debate on water management at its previous meeting—or possibly the one before that—because the proposals were quite detrimental to water-rich countries like Scotland. Perhaps you could have a conversation with our colleague about his experience there and what conditions the Committee of the Regions managed to secure.
A couple of words seem to be missing from the third last paragraph of the article on banking union. Surely it should say, “It remains to be seen how the proposals will impact”.
There are some words missing because sometimes we do not do as much proofreading as we should do. We will add the words before the bulletin goes public.
I have a point of clarification. President Barroso said in his address that
“further political and institutional integration”
would be required. Would treaty change be required for banking union to go ahead? I am not expecting to get an answer today, but I would like a wee bit more information. The bulletin says that non-euro countries could join on a voluntary basis. Are there any further details on that? The bulletin also contains the statement that the UK
“would be expected to work in ‘close co-operation’ with the ECB.”
Could we have a wee bit more about what co-operation exists between the UK banking system and the euro zone, and what the expected co-operation would be?
I will take those points in order. Banking union can be achieved without treaty change, but treaty change is being discussed for other reasons in terms of the broader financial set-up. Banking union can go forward without that change but it is likely to be part of a bigger adjustment to financial management within the EU.
Denmark is exploring non-euro zone members joining on a voluntary basis. The idea is that the country would be entirely compliant with the code and allow the ECB oversight of its banks, despite the fact that it does not use the euro as its currency. That is entirely possible but, as I understand it, the UK is not pursuing that route.
The UK authorities are keen to work closely with the euro zone to stop banking union having a detrimental impact on the UK banking sector. It is almost about getting close to the euro zone to stop it doing stuff, rather than to help it to do stuff. Things will become a little clearer soon. The UK Government is expected to publish some material on all this. The timetable is quite swift and I will be able to give the committee some more information when I come back from Brussels.
The “Brussels Bulletin” is very useful. I admit that this is the first time that I have seen it and I think that it would be of interest to many members in the Parliament. I have never seen it at the Public Audit Committee.
It is sent to all the committees.
I am just admitting that I have never seen it. It looks really useful because it provides a snapshot of everything that is going on in Europe.
My attention was drawn to page 4 and the paragraph about treaty change that my colleague Clare Adamson mentioned. President Barroso is
“calling for a treaty change to transfer national competences—such as budgets—to European institutions”.
It is early days, but I can imagine what the response to that might be. We will watch that with interest as the idea develops.
Another subject that interests me is not so contentious. It is broadband and it is on page 10 of the “Brussels Bulletin”. If we talk about business connectivity and the digital revolution, we should put our arguments and differences over Europe to one side—that is one area in which we should take a common approach.
All the EU member states have different policies on the digital agenda that give them an advantage or disadvantage. I hope that members in Scotland and across the European Union agree on the need for some kind of commonality on digital capability throughout the EU to ensure that there is a level playing field for digital business.
The notion of competence with regard to the budget is very serious. A member state’s budget is the most precious thing that it has, and the idea that it might give that budget to the EU for a wee look before it is published would be extremely controversial.
In my heart of hearts, I cannot believe that the EU could do that—or if it could, I cannot believe that any member state would be bound by it. If the Commission officials said, “You cannot do it in that way,” I would have thought that the member state officials would say, “Really? I think we can,” and they would. That would defeat the point of doing it in the first instance. If that is done through a treaty change, there are sanctions that can be applied.
I know that Jamie McGrigor has been talking about broadband connectivity in the Highlands and Islands. A big issue is that some of the providers are keen to connect up the cheaper bits of Europe—if I can put it that way; areas that are less expensive to connect—but they are far less inclined to connect up some of the more upland and distant areas. Where they are keen to do that, they are also keen to charge a lot of money.
It will be interesting to see what happens. This is an area in which the EU could be at its strongest: it could make providers behave in an appropriate manner and stop them trying to penalise people on the basis of where they live instead of enabling all to access the internet without ridiculous costs.
What often happens is that the EU starts by saying, “Wouldn’t it be nice if all the businesses behaved properly?”, and spends a wee bit of time poking back and forth to try to get businesses to do that, until it eventually discovers that they will not and it moves from a voluntary code of practice to some sort of control. This issue may well go through the same cycle. The EU is currently at the stage of poking businesses and saying, “Behave,” and it may well end up by saying, “If you do not behave, there will be sanctions against you.”
I certainly recognise that. It is quite evident, looking back on my role as convener of the cross-party group on digital participation, that in member state countries—and the UK is no different—the big commercial companies invest where the greatest return is. That is just the way that it is, and it is up to national Government to reach the parts that others have failed to reach.
That seems to be the pattern not only in Scotland and the UK, but throughout Europe. From my experience I would flag the digital agenda up as another area on which some common ground can be reached in the European Union. That will allow us to achieve a level playing field, not only for rural communities in Europe but among the partners themselves, to make Europe a truly connected digital state. That is a revolutionary comment.
That experience is very welcome in the committee.
That is one area about which I absolutely agree with Willie Coffey. Billions of pounds have been set aside in the European Union’s budget to try to achieve the better digital economy that we all want to be part of. Willie Coffey can rest assured that I for one would stand shoulder to shoulder with him on that specific aspect, because he is so right to say that we should reach the parts that others do not reach.
Not that we are advertising anything.
I have a couple of points on the “Brussels Bulletin”. The first relates to the wee section on framework programme 7 funding and the call for proposals that has gone out. To tie into Hanzala Malik’s interest in smart cities and the Committee of the Regions plenary sessions that I mentioned, can we get a wee update on where we are with that and how we are managing to reach the people who we should be reaching?
The other point relates to the Roma issue, about which I have grave concerns. I noticed the weekend before last the coverage of the rise of the far right in Greece and the racist attacks that have been taking place against people. If we go down the route of relocating people and calling people illegal, it will add to the negative culture that I feel is brewing. During financial crises and recessions, people who are different or poorer or vulnerable are often targeted. I am extremely concerned about what is happening. I suggest that we raise the point with the Equal Opportunities Committee, because I am worried that something is brewing that we do not want to allow to get out of hand. We have seen some evidence of that in Glasgow and Edinburgh, with far-right groups wanting to march and spread their horrible culture of hatred of people of different nationalities and creeds. I hope that the committee will agree to my suggestion.
I agree with what you say—you make a sound point. The only concern that I have is that, from what I read, I think that the Equal Opportunities Committee has completed its inquiry on the issue and is at the point of agreeing a draft report, so we might be too late to influence what it says. However, your point is still valid. I hope that, regardless of whether the detail of what you are saying is in the committee’s final report, the spirit of what you are saying is.
That was helpful.
I absolutely agree. It would be useful to send the Equal Opportunities Committee’s work—even if it has reached a later stage—to the key players in Brussels, to give them an understanding of the Scottish experience.
The Roma issue remains extremely controversial. It is a major media issue in France, which is why there is so much active interest in it. It will be interesting to see whether there is an EU-wide summit on the issue. France is keen to achieve that, but I am not sure that there is an appetite for it across all member states. We must bear it in mind that the EU Council presidency is in the hands of the Cypriots—for whom the issue might well not be a major one—and that it would be their responsibility to schedule such an event. That is not to say that it will not happen. It is an issue to keep an eye on. We can certainly refer it on—that is not difficult to do. In addition, we should encourage the Equal Opportunities Committee to keep a very close eye on what is happening. If it has no time in its agenda to consider the issue, it could refer it back to the Parliament, as per the European strategy.
In relation to FP7, the call for proposals has just been launched, so it may be a little while before we know who is feeding into it, but we might want to ensure that the Government is publicising it. FP7 is the father—the predecessor—of horizon 2020, so we might want to ensure that the Government is advertising what is the final call for proposals as widely as it can.
Yes, that would be helpful.
That concludes our consideration of the “Brussels Bulletin”. We had lots of interesting comments. I thank Ian Duncan very much.
Are we content to send the “Brussels Bulletin” to the relevant committees?
Members indicated agreement.
We previously agreed to take agenda item 6 in private, so I thank members of the public for their attendance.
10:13
Meeting continued in private until 11:06.