The European Commission has launched a public consultation inviting Member States and other stakeholders to provide their views and comments on the existing EU State aid rules on public support for the deployment of broadband networks. The public consultation is part of an overall evaluation by the Commission of the relevant rules with a view to assess whether they are still fit purpose or whether they will need to be updated in light of recent technological and market developments. All interested parties can respond to the public consultation until 5 January 2021.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: ”Europe’s digital transformation depends on high quality networks. These are crucial for connecting the regions in the European Union, and contribute to a more competitive and sustainable social market economy. The public consultation will help the Commission assess whether the existing State aid rules on public support for the deployment of broadband networks are still fit for purpose and are equipped to meet the challenges of Europe’s digital future”.
The 2013 Broadband State aid Guidelines enable Member States to provide support for the deployment of broadband networks, subject to certain conditions. In particular, they allow for public investments where a market failure exists and where these investments bring a significant improvement to the market in terms of service availability, capacity, speeds and competition (step change). This ensures that public interventions focus on areas that would otherwise be left behind due to the absence of commercial interest to invest and that support “state of the art” technologies. At the same time, the Guidelines also aim at protecting private investments by providing that no public intervention can take place where private operators have invested or credibly plan to invest and fostering fair competition through competitive selection procedures, technological neutrality and open access requirements for the benefit of all European citizens and businesses.
Separately, the General Block Exemption Regulation (“GBER”) exempts Member States from having to notify aid measures supporting the deployment of broadband networks in areas where no infrastructure of the same category exists or is credibly planned in the near future, provided that certain conditions are met.
Since the adoption of the Broadband State Guidelines in 2013 and of the relevant GBER rules in 2014, broadband technologies have significantly improved and users’ needs have increased, requiring larger bandwidth as well as an improvement of the networks in terms of other parameters such as latency, availability and reliability.
The purpose of the public consultation is to assess whether the Broadband State aid  Guidelines and the relevant GBER provisions have met their objectives, what effect they have had on the market and on competition, and whether they need to be updated in light of recent technological and market developments and the new EU digital policy goals.  In the consultation, the Commission aims at assessing the effectiveness, efficiency, coherence, relevance and EU added value of the existing rules, in line with the Better Regulation requirements.
All details about the public consultation are available online.
Next steps
The consultation will be open until 5 January 2021.
The consultation is part of an overall evaluation by the Commission of the Broadband State aid Guidelines and the relevant provisions of the GBER, which will be carried out under the Commission’s Better Regulation rules. In addition to the public consultation, the evaluation will involve internal analyses by the Commission as well as the conclusions of a study prepared by an external consultant. The Commission will summarise the results of the exercise in a Staff Working Document, which will be made public. The evaluation will provide the basis for a future Commission decision on whether an update of the current rules is necessary.
Background
Under the Better Regulation Guidelines, the Commission evaluates if specific laws, policies and spending activities are fit for purpose and have delivered, at minimum cost, the desired changes to European businesses and citizens. The evaluation findings help the Commission decide whether EU actions should be continued or changed.
The existing 2013 Broadband State Aid Guidelines allow for public investments where a market failure exists and where these investments bring a significant improvement (step change). This is also subject to certain other parameters to protect competition and private investment incentives.
Between 2014 and 2019, Member States spent approximately €30 billion in public funding, in compliance with EU State aid rules, to fill investment gaps in broadband infrastructure deployment and to reach the objectives set out for 2020 by the Digital Agenda for Europe. As a result and according to the Digital Economy and Society Index, by mid-2019, already 86% of households in Europe had access to fast broadband of at least 30 megabits per second (Mbps) download speed, and 30% benefited from Gigabit connectivity.
Building on the EU’s existing 2020 broadband targets, the Commission has identified in its Gigabit Society Communication the connectivity needs to be achieved by 2025 to build a European Gigabit society, where very high capacity networks enable the widespread use and development of products, services and applications in the Digital Single Market. The identified connectivity needs are: (i) all European households should have access to internet connectivity offering download speeds of at least 100 Mbps, upgradable to Gigabit speed, (ii) all main socio-economic drivers such as schools, transport hubs and main providers of public services as well as digitally intensive enterprises should have access to internet Gigabit connectivity with download and upload speeds of at least 1 Gbps; (iii) uninterrupted 5G coverage for all urban areas and all major terrestrial transport paths should be ensured.
In February 2020, the Commission published the EU digital priorities among which the Communication on Shaping Europe’s Digital Future and recalled that connectivity to achieve the EU 2025 objectives remains the most fundamental building block of the digital transformation of Europe.
Compliments of the European Commission.
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The European Commission today published a proposal for a Council and European Parliament regulation to scrap duties on certain imports to the EU. In return, the United States will reduce its duties on certain EU exports to the U.S. market. This will put into effect the agreement announced by the EU and the U.S. on 21 August 2020. These tariff reductions between the EU and the U.S. will increase access to both EU and U.S. markets by around €200 million per year.
Executive Vice-President Valdis Dombrovskis said: “The EU and the U.S. share the most important economic partnership in the world, with trade in goods and services worth over €1.3 trillion annually. This deal provides both sides with a true win-win outcome, helping us to strengthen our partnership even further. Lowering tariffs on both sides improves access for our exporters and reduces the cost of imported goods. Those are both critically important factors in this time of coronavirus-related economic crisis. From the EU side, we view this agreement as an important step towards improving our relationship and resolving outstanding disputes. We remain eager to deepen transatlantic cooperation wherever possible as we firmly believe that, when it comes to truly global challenges, the chances of achieving successful global outcomes are improved if the European Union and United States work together.”
Once approved in line with the relevant procedures on either side of the Atlantic, the agreement will entail the reduction of U.S. tariffs on EU exports worth some $160 million a year. This includes prepared meals, crystal glassware, surface preparations, propellant powders, lighters and lighter parts. On its side, the EU will eliminate tariffs on imports of U.S. live and frozen lobster products. U.S. exports of these products to the EU are worth some $111 million.
Both sides will eliminate those tariffs on a most-favored nation (MFN) basis, i.e. for any partner, in line with the existing multilateral commitments. The measures will apply with retroactive effect as of 1 August 2020.
Compliments of the European Commission.
The post EU Commission adopts proposal to make EU-U.S. agreement on tariffs effective first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

September 07, the Commission, trade unions, chambers of commerce and employers’ organisations are renewing their cooperation to enhance the integration of migrants and refugees into the labour market. In a joint statement released today, they highlight areas for future focus, and express interest in cooperating further in the area of labour migration under the European Partnership on Integration launched in 2017. The signatories reaffirm the importance of a multi-stakeholder approach for early integration into the labour market benefitting both refugees and the economy and society at large.
Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “The European Pillar of Social Rights makes no distinction where people come from. Regardless of gender, racial or ethnic origin, religion or belief, disability, age or sexual orientation, everyone has the right to equal treatment and opportunities regarding employment. Helping refugees integrate into the labour market by upskilling and by accessing quality jobs is paramount for their dignity, and it is paramount for Europe’s social cohesion.”
Commissioner for Home Affairs, Ylva Johansson, said: “Better using the skills and potential of refugees and migrants makes our labour markets more inclusive and contribute to the prosperity and cohesion of European society. The past months have shown that migrant workers and entrepreneurs have skills and talents that contribute to the recovery of Europe’s economy. Today, we are renewing our commitment to support employers’ organisations, trade unions and chambers of commerce in their engagement with refugees and we are open to expanding our cooperation further, for instance on labour migration.”
Since the launch of the European Partnership on Integration 3 years ago, the Commission has financed projects implemented by social and economic partners’ organisations to promote the integration of refugees into the labour market. Examples include the Labour-INT project, supporting the integration of refugees from arrival up to the workplace, through skills assessment, training and job placement in Italy, Germany and Belgium; or the European Refugees Integration Action Scheme operating in Bulgaria, Greece, Italy and Spain. Social and economic partners have also put in place initiatives in 20 Member States, such as the fachkraeftepotenzial platform launched by the Austrian Federal Economic Chamber and providing information to companies wishing to hire refugees.
Building on these achievements, the signatories agreed to focus future efforts on 3 areas: linking up stakeholders across economy and society for labour market integration; supporting entrepreneurship; and facilitating the identification, assessment and validation of skills.
In parallel, the Commission and the social and economic partners will aim to explore how to extend their dialogue and future cooperation to the area of labour migration in line with the objectives of the new European Skills Agenda and the upcoming New Pact on Migration and Asylum. This could focus on how to improve labour migration channels to meet Europe’s changing needs.
Background
Through the European Partnership on Integration signed on 20 December 2017, the Commission and social and economic partners have been joining forces to promote the integration of refugees into the labour market. The objectives of the Partnership are to enhance the early integration of refugees into the labour market, ensure that integration benefits refugees as well as the economy and society at large, and promote a multi-stakeholder approach (involving public authorities, employment services, social and economic partners, business organisations, chambers of commerce and industry, skilled crafts chambers, companies and workers, public services’ employers, education and training providers and civil society organisations).
Compliments of the European Commission.
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It is increasingly likely that, unless things change, on 1 January 2021, we will have a no deal Brexit. The only agreement between the EU and the UK would then be the already ratified Withdrawal Agreement.
There are only 50 working days left in which to make a broader agreement. The consequences of a failure to do so for Ireland will be as profound, and even as  long lasting, that those of Covid 19.
A failure to reach an EU/UK Agreement would mean a deep rift between the UK and Ireland.
It would mean heightened tensions within Northern Ireland (NI), disruptions to century’s old business relations, and a succession of high profile and prolonged court cases between the EU and the UK dragging on for years.
Issues, on which agreement could easily have been settled in amicable give and take negotiations, will be used as hostages or for leverage on other issues. The economic and political damage would be incalculable.
We must do everything we can to avoid this.
Changing the EU Trade Commissioner in such circumstances would be dangerous.  Trying to change horses in mid stream is always difficult. But attempting to do so at the height of a flood, in high winds, would be even more so.
The EU would lose an exceptionally competent Trade Commissioner when he was never more needed. An Irishman would no longer hold the Trade portfolio. The independence of the European commission, a vital ingredient in the EU’s success would have been compromised…a huge loss for all smaller EU states.
According to Michel Barnier, the EU/UK talks, which ended last week, seemed at times to be going “backwards rather than forwards”.
The impasse has been reached for three reasons.
The meaning of sovereignty
Firstly, the two sides have set themselves incompatible objectives.
The EU side wants a “wide ranging economic partnership” between the UK and the EU with” a level playing field for open and fair competition”. The UK also agreed to this objective in the joint political declaration made with the EU at the time of the Withdrawal Agreement.
Since it agreed to this, the UK has had a General Election, and it has changed its mind. Now it is insisting, in the uncompromising words of it chief negotiator, on “sovereign control over our laws, our borders, and our waters”.
This formula fails to take account of the fact that any Agreement the UK might make with the EU (or with anyone else) on standards for goods, services or food stuffs necessarily involves a diminution of sovereign control.
Even being in the World Trade Organisation (WTO) involves accepting its rulings which are a diminution of “sovereign control”. This is why Donald Trump does not like the WTO and is trying to undermine it.
The Withdrawal Agreement from the EU (WA), which the UK has already ratified, also involves a diminution of sovereign control by Westminster over the laws that will apply in Northern Ireland (NI) and thus within the UK.
The WA obliges the UK to apply EU laws on tariffs and standards to goods entering NI from Britain, ie. going from one part of the UK to another.
This obligation is one of the reasons given by a group of UK parliamentarians, including Ian Duncan Smith, David Trimble, Bill Cash, Owen Patterson and Sammy Wilson, for wanting the UK to withdraw from the Withdrawal Agreement, even though most of them voted for it last year!
Sovereignty is a metaphysical concept, not a practical policy.
Attempting to apply it literally would make structured, and predictable, international cooperation between states impossible. That is not understood by many in the UK Conservative Party.
The method of negotiation
The second difficulty is one of negotiating method. The legal and political timetables do not gel.
The UK wants to discuss the legal texts of a possible Free Trade Agreement first, and leave the controversial issues, like level playing field competition and fisheries, over until the endgame in October.
The EU side wants serious engagement to start on these controversial issues straight away.
Any resolution of these controversial issues will require complex legal drafting, which cannot be left to the last minute. After all, these legal texts will have to be approved by The EU and UK Parliaments before the end of this year.
There can be no ambiguities or late night sloppy drafting.
The problem is that the UK negotiator cannot yet get instructions, on the compromises he might make, from Boris Johnson. Boris Johnson is preoccupied instead with Covid 19, and with keeping the likes of Ian Duncan Smith and Co. onside.  He is a last minute type of guy.
Trade relations with other blocs
The Third difficulty is that of making provision for with the Trade Agreements the UK wants to make in future with other countries like the US, Japan and New Zealand. Freedom to make such deals was presented to UK voters as one of the benefits of Brexit.
The underlying problem here is that the UK government has yet to make up its mind on whether it will continue with the EU’s strict precautionary policy on food safety, or adopt the more permissive approach favoured by the US.
Similar policy choices will have to be made by the UK on chemicals, energy efficiency displays, and geographical indicators.
The more the UK diverges from existing EU standards on these issues, the more intrusive will have to be the controls on goods coming into Northern Ireland from Britain, and the more acute will be the distress in Unionist circles in NI.
Issues that are uncontroversial in themselves will assume vast symbolic significance, and threaten the peace of our island.
The UK is likely be forced to make side deals with the US on issues like hormone treated beef, GMOs and chlorinated chicken. The US questions the scientific basis for the existing EU restrictions, and has won a WTO case on beef on that basis.  It would probably win on chlorinated chicken too.
If the UK conceded to the US on hormones and chlorination, this would create control problems at the border between the UK and the EU, wherever that border is in Ireland.
Either UK officials would enforce EU rules on hormones and chlorination on entry of beef or chicken to this island, or there would be a huge international court case.
All this shows that, in the absence of some sort of Partnership Agreement between the EU and the UK, relations could spiral out of control.
Ireland, and the EU, needs its best team on the pitch to ensure that this does not happen!
Compliments of John Bruton, former Fine Gael politician and Taoiseach and Ambassador of the European Union to the United States | This article was first published in The Irish Farmers Journal.
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The European Commission has today launched a public consultation on its future Action Plan on Organic Farming. This sector will play an important role in achieving the European Green Deal ambition, and reaching the objectives set out in the Farm to Fork and Biodiversity Strategies. It is a priority for the Commission to ensure that the organic farming sector has the right tools in place as well as a well-functioning and consensual legal framework which is key to achieving the objective of 25% of agricultural land dedicated to organic farming. While the new organic regulation provides a solid basis, secondary legislation still to be adopted needs to be equally resilient. At the request of Member States, the European Parliament, third countries, and other stakeholders, the Commission has therefore proposed today as well to postpone the entry into force of the new organic legislation by one year, from 1 January 2021 to 1 January 2022.
Agriculture and rural development Commissioner Janusz Wojciechowski said: “The Farm to Fork and Biodiversity strategies set ambitious targets for the agricultural sector to ensure it is Green Deal-ready. Organic farming will be a key ally in the transition that we are leading towards a more sustainable food system and a better protection of our biodiversity. The Commission will support the organic sector towards the achievement of the 25% target of agricultural land under organic farming by 2030 with the appropriate policy and legal framework. ”
The future Organic Farming Action Plan, due for adoption early in 2021, will be an important instrument to accompany the future growth of the sector. The Commission’s Farm to Fork and Biodiversity Strategies include the target of reaching 25% of agricultural land under organic farming by 2030. To help reach this target, the European Commission is putting in place and making use of key tools:

An Action Plan for Organic Farming, which will be instrumental in helping boost the sector, both at demand and supply level. It will be organised around three key angles: stimulating demand for organic products while maintaining consumer trust; encouraging the increase of the organic farming area in the EU; and, enhancing the role of organic production in the fight against climate change and biodiversity loss, including in sustainable resource management. The public consultation launched today aims at gathering feedback on the draft plan from citizens, national authorities and relevant stakeholders. The questionnaire will be online for a period of 12 weeks, until 27 November

The new organic legislation, which will reflect the changing nature of this rapidly growing sector. The new rules are designed to guarantee fair competition for farmers while preventing fraud and maintaining consumer trust. To ensure a smooth transition between the current and future legislation and to allow the industry and Member States to be fully ready to implement the new rules, the Commission has proposed to postpone by one year its entry into force. The postponement was originally requested by Member States, the European Parliament, third countries, and other stakeholders due to the complexity and importance of the secondary legislation under preparation. As a result of the coronavirus crisis, work on the secondary legislation has slowed down. The postponement will allow sufficient time for the necessary extensive consultations and legislative scrutiny.

The EU agri-food promotion policy, which supports the European agricultural sector by promoting its quality features on the internal market and in third countries. For the year 2021, the Commission plans to allocate a specific budget of €40 million to organic farming under the promotion policy. This budget will co-finance promotion actions and information campaigns on the EU organic sector, raising awareness about its qualities and aiming at stimulating demand.

In addition to these key tools, the current and future Common Agricultural Policy (CAP) will continue to support the further development of organic farming in the EU. For instance, measures under the rural development programmes offer support to farmers who wish to convert to organic farming as well as maintaining this type of agriculture.
Background
Organic farming aims to produce food using natural substances and processes, leading to an agricultural method with limited environmental impact. It encourages the use of farm-derived renewable resources, the enhancement of biological cycles within the farming system, the maintenance of biodiversity, the preservation of regional ecological balances, the maintenance and increase of soil fertility, and the responsible use and proper care of water. Additionally, organic farming rules encourage a high standard of animal welfare and require farmers to meet the specific behavioural needs of animals.
On 20 May 2020, the Commission adopted its Farm to Fork and Biodiversity Strategies. In line with the European Green Deal, they propose ambitious EU actions and commitments to halt biodiversity loss in Europe and worldwide and transform our food systems into global standards for competitive sustainability, the protection of human and planetary health, as well as the livelihoods of all actors in the food value chain.
Compliments of the European Commission.
The post European Green Deal: EU Commission prepares new initiatives to boost the organic farming sector first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The Commission has today adopted a proposal for a Council Recommendation to ensure that any measures taken by Member States that restrict free movement due to the coronavirus pandemic are coordinated and clearly communicated at the EU level.
The Commission’s proposal sets out four key areas where Member States should work closer together:

Common criteria and thresholds for Member States when deciding whether to introduce travel restrictions;
Mapping of common criteria using an agreed colour code;

A common framework for measures applied to travellers from high-risk areas;
Clear and timely information to the public about any restrictions

Commissioner for Health and Food Safety, Stella Kyriakides, said: “Today we propose to our Member States a well-coordinated, predictable and transparent approach to travel restrictions where these are needed, always placing the protection of public health first. We must avoid further disruption of already fragile economies and additional uncertainty for citizens who have made huge sacrifices. They expect this from us after so many months living with COVID-19.”
Commissioner for Justice, Didier Reynders, said: “Our right to move freely in the EU has been heavily impacted by the pandemic. For the many citizens who rely on frictionless travel every day, the cacophony of national rules in the EU is overwhelming. We want to simplify things. We are proposing straightforward criteria, applicable without discrimination, which are easy to follow by Member States and allow to inform Europeans properly.”
Commissioner for Home Affairs, Ylva Johansson, said: “Since March, the Commission has developed and delivered a solid foundation of internal and external border control recommendations for Member States to follow. Today’s measures builds on this track record so that we can fully benefit from our Schengen area. That is why we want a clear ‘green, orange, red’ system and not a kaleidoscope of individual measures”.
Common criteria
There is currently a wide discrepancy between national criteria for introducing measures that restrict free movement in the European Union. The Commission is proposing that each Member State takes into account the following criteria when putting in place any restrictive measures:

The total number of newly notified COVID-19 cases per 100 000 people in a given area in a 14-day period;
The percentage of positive tests from all COVID-19 tests carried out in given area during a seven-day period;
The number of COVID-19 tests carried out per 100 000 people in a given area during a seven-day period.

Member States should provide this data on a weekly basis to the European Centre for Disease Prevention and Control. Member States should also provide this data at the regional level to ensure that any measures can be targeted to those regions where they are strictly necessary.
On the basis that the Member State of departure has a weekly testing rate of more than 250 per 100 000 people, the Commission is proposing that Member States should not restrict free movement of people travelling from another Member State where:

The total number of newly notified COVID-19 cases in a given area is equal to less than 50 per 100 000 people during a 14-day period, OR,
The percentage of positive tests from all COVID-19 tests in a given area is less than 3%.

A common colour code
Based on the data provided by Member States, the Commission proposes that the European Centre for Disease Prevention and Control publishes a map of EU and EEA countries, updated weekly, with a common colour code to support Member States and travellers. The Commission proposes the following:

Green for an area where the total number of newly notified COVID-19 cases is less than 25 during a 14-day period AND the percentage of positive tests from all COVID-19 tests is less than 3%;

Orange for an area where the total number of newly notified COVID-19 cases is less than 50 during a 14-day period BUT the percentage of positive tests from all COVID-19 tests is 3% or more OR the total number of newly notified COVID-19 cases is between 25 and 150 BUT the percentage of positive tests from all COVID-19 tests is less than 3%;

Red for an area where the total number of newly notified COVID-19 cases is more than 50 during a 14-day period AND the percentage of positive tests from all COVID-19 tests is 3% or more OR the total number of newly notified COVID-19 cases is more than 150 per 100 000 people during a 14-day period;

Grey if there is insufficient information available to assess the criteria proposed by the Commission OR the number of COVID-19 tests carried out per 100 000 people is less than 250.

A common approach for travellers from high-risk areas
The Commission proposes a common approach amongst Member States when dealing with travellers coming from ‘high-risk’ zones. Member States should not refuse the entry of persons travelling from other Member States. Member States that introduce restrictions to free movement based on their own decision-making processes, could require:

persons travelling from an area classified as ‘red’ or ‘grey’ to either undergo quarantine OR undergo a COVID-19 test after arrival – COVID-19 testing being the preferred option;*

Where justified, Member States could consider recommending that persons travelling from an area classified as ‘orange’ undergo at least a COVID-19 test prior to departure or upon arrival. Member States could require persons arriving from an area classified as ‘red’, ‘orange’ or ‘grey’ to submit passenger locator forms, notably those arriving by airplane, in accordance with data protection requirements. Travellers with an essential function or need – such as workers exercising critical occupations, frontier and posted workers, students or journalists performing their duties – should not be required to undergo quarantine.
Clear and timely information to the public
The Commission proposes that Member States provide details of upcoming restrictions to free movement or the lifting of travel restrictions to Member States and the Commission on a weekly basis. Changes should be notified a week before entering into force.
Information should also be made available on the ‘Re-open EU‘ web platform, with a link to the weekly-published map by the European Centre for Disease Prevention and Control.
Citizens and businesses need predictability. Member States must make all efforts to minimise the social and economic impact of travel restrictions. This should include the provision of information to the public in in a clear, comprehensive and timely manner.
Background
The right of European citizens to move and reside freely within the European Union is one of the most cherished achievements of the European Union, as well as an important driver of our economy. Any restrictions to the fundamental right of free movement within the EU should only be put in place where strictly necessary and be coordinated, proportionate and non-discriminatory to address public health risks.  To limit the spread of the COVID-19 outbreak, Member States have adopted various measures, some of which have had an impact on free movement. A well-coordinated, predictable and transparent approach to the adoption of restrictions on freedom of movement is necessary to prevent the spread of the virus, safeguard the health of citizens as well as maintain free movement within the Union, under safe conditions. This is important for the millions of citizens who rely on frictionless cross-border travel every day, and crucial for our efforts to start safely re-building the economy.
Next steps
The Commission’s proposal for a Recommendation will be discussed by the Council with the aim of an adoption in the coming weeks.
Compliments of the European Commission.
The post Coronavirus: EU Commission proposes more clarity and predictability of any measures restricting free movement in the European Union first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Governments have taken unprecedented fiscal action in response to the COVID-19 crisis, but countries will need to support economic recovery in the face of significantly increasing fiscal challenges, according a new OECD report.
Tax Policy Reforms 2020 describes the latest tax reforms across OECD countries, as well as in Argentina, China, Indonesia and South Africa. The report identifies major tax policy trends adopted before the COVID-19 crisis and takes stock of the tax and broader fiscal measures introduced by countries in response to the pandemic, from its outbreak to June 2020.
The report shows that while the size of fiscal packages in response to the COVID-19 crisis has varied across countries, most have been significant, and many countries have taken unprecedented action. It also points out that most countries have adopted a phased approach to COVID-19, gradually adapting their fiscal packages as the crisis has unfolded. Initial government responses focused on providing income support to households and liquidity to businesses to help them stay afloat. As the crisis has continued, many countries expanded their initial response packages. The most recent measures and discussions suggest that the recovery phase will be supported by expansionary fiscal policy in a number of countries.
With countries facing such high levels of uncertainty, policy agility will be key and targeted support measures should be maintained as long as needed to avoid scarring effects, according to the report. Once recovery is well underway, governments should shift from crisis management to more structural tax reforms, but they must be careful not to act prematurely as this could jeopardise recovery. “Right now, the focus should be on the economic recovery. Once the recovery is firmly in place, rather than simply returning to business as usual, governments should seize the opportunity to build a greener, more inclusive and more resilient economy,” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. “One path that should be urgently prioritised is environmental tax reform and tax policies to tackle inequalities”.
Rising pressure on public finances as well as increased demands for fairer burden-sharing should also provide new impetus to reach an agreement on digital taxation. “Tax co-operation will be even more important to prevent tax disputes from turning into trade wars, which would harm recovery at a time when the global economy can least afford it,” Mr Saint-Amans said.
Tax Policy Reforms 2020 also provides an overview of the reforms introduced before the COVID-19 crisis. It highlights continuation of a number of trends identified in previous years, including personal income tax reductions for low and middle-income households and the stabilisation of standard value-added tax (VAT) rates observed across many countries. Corporate tax rates have continued to decline, but at a faster pace than in 2019.
Areas where clear progress has been made include reforms to ensure the effective collection of VAT on online sales of goods, services and intangibles, and the adoption of measures in line with the OECD/G20 Base Erosion and Profit Shifting Project to protect corporate tax bases against international tax avoidance. On the other hand, progress on environmentally related taxes has been slow, with reforms being concentrated in a small number of countries and limited in scope.
The report also notes that there has been a marked change in property taxation compared to previous years, with an increase in the number of reforms in that area, generally aimed at raising taxes.
For more information and to access the report, visit www.oecd.org/tax/tax-policy-reforms-26173433.htm.
CONTACTS:

Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration | pascal.saint-amans[at]oecd.org

David Bradbury, Head of the Tax Policy and Statistics Division | david.bradbury[at]oecd.org

Lawrence Speer, in the OECD Media Office | Lawrence.Speer[at]oecd.org

Compliments of the OECD.
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Today, the Commission presents an Action Plan on Critical Raw Materials, the 2020 List of Critical Raw Materials and a foresight study on critical raw materials for strategic technologies and sectors from the 2030 and 2050 perspectives. The Action Plan looks at the current and future challenges and proposes actions to reduce Europe’s dependency on third countries, diversifying supply from both primary and secondary sources and improving resource efficiency and circularity while promoting responsible sourcing worldwide. The actions will foster our transition towards a green and digital economy, and at the same time, bolster Europe’s resilience and open strategic autonomy in key technologies needed for such transition. The List of Critical Raw Materials has been updated to reflect the changed economic importance and supply challenges based on their industrial application. It contains 30 critical raw materials. Lithium, which is essential for a shift to e-mobility, has been added to the list for the first time.
Maroš Šefčovič, Vice-President for Interinstitutional Relations and Foresight said:
” A secure and sustainable supply of raw materials is a prerequisite for a resilient economy. For e-car batteries and energy storage alone, Europe will for instance need up to 18 times more lithium by 2030 and up to 60 times more by 2050. As our foresight shows, we cannot allow to replace current reliance on fossil fuels with dependency on critical raw materials. This has been magnified by the coronavirus disruptions in our strategic value chains. We will therefore build a strong alliance to collectively shift from high dependency to diversified, sustainable and socially-responsible sourcing, circularity and innovation“.
Thierry Breton, Commissioner for Internal Market said: “A number of raw materials are essential for Europe to lead the green and digital transition and remain the world’s first industrial continent. We cannot afford to rely entirely on third countries – for some rare earths even on just one country. By diversifying the supply from third countries and developing the EU’s own capacity for extraction, processing, recycling, refining and separation of rare earths, we can become more resilient and sustainable. Implementing the actions that we propose today will require a concerted effort by industry, civil society, regions and Member States. We encourage the latter to include investments into critical raw materials into their national recovery plans.”
The Action Plan on Critical Raw Materials is aimed to:

develop resilient value chains for EU industrial ecosystems;
reduce dependency on primary critical raw materials through circular use of re-sources, sustainable products and innovation;
strengthen domestic sourcing of raw materials in the EU;
diversify sourcing from third countries and remove distortions to international trade, fully respecting the EU’s international obligations.

To achieve these objectives, today’s Communication outlines ten concrete actions. First, the Commission will in the coming weeks establish a European Raw Materials Alliance.  By bringing together all relevant stakeholders, the alliance will primarily focus on the most pressing needs, namely to increase EU resilience in the rare earth and magnet value chains, as this is vital to most of EU industrial ecosystems, such as renewable energy, defence and space. Later, the alliance could expand to address other critical raw material and base metal needs over time.
To make better use of domestic resources, the Commission will work with Member States and regions to identify mining and processing projects in the EU that can be operational by 2025. A special focus will be on coal-mining regions and other regions in transition, with special attention to expertise and skills relevant for mining, extraction and processing of raw materials.
The Commission will promote the use of its earth-observation programme Copernicus to improve resource exploration, operations and post-closure environmental management. At the same time, Horizon Europe will support research and innovation, especially on new mining and processing technologies, substitution and recycling.
In line with the European Green Deal, other actions will address the circularity and sustainability of the raw materials value chain. The Commission will therefore develop sustainable financing criteria for the mining and extractive sectors by the end of 2021. It will also map the potential of secondary critical raw materials from EU stocks and wastes to identify viable recovery projects by 2022.
The Commission will develop strategic international partnerships to secure the supply of critical raw materials not found in Europe. Pilot partnerships with Canada, interested countries in Africa and the EU’s neighbourhood will start as of 2021. In these and other fora of international cooperation, the Commission will promote sustainable and responsible mining practices and transparency.
Background
The secure supply of raw materials for the EU’s industry is a long-standing issue. The EU has sought ways to address it, from the establishment of the Raw Materials Supply Group in the 1970s to the launch of the Raw Materials Initiative in 2008. This initiative set out a strategy for reducing dependencies for non-energy raw materials for industrial value chains and societal well-being by diversifying sources of primary raw materials from third countries, strengthening domestic sourcing and supporting the supply of secondary raw materials through resource efficiency and circularity.
The European Green Deal and the new EU Industrial Strategy acknowledge that access to resources is a strategic security question for making the green and digital transformations a success. Currently, the coronavirus crisis is leading many parts of the world to look critically at how they organise their supply chains, especially where public safety or strategic sectors are concerned. The Commission’s proposed recovery plan puts an emphasis on building back greener, more digital and more resilient. Therefore, Europe should strive to develop open strategic autonomy and diversify raw materials supply.
Compliments of the European Commission.
The post EU Commission announces actions to make Europe’s raw materials supply more secure and sustainable first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The American economist Frank Knight theorized about the difference between risk and uncertainty in his classic book Risk, Uncertainty and Profit. Risk is “a quantity susceptible of measurement.” A precise outcome may not be known, but the probability of a few that are most likely can be calculated. Uncertainty means there is not enough information to even narrow down the possibilities. When a situation is “not susceptible to measurement” economists call it Knightian uncertainty.
If this sounds familiar, it is because we are living in the most unmeasurable of times. All aspects of life have been disrupted by the simple fact that it is harder to quantify the risk of going to work, shopping for groceries, or having a wedding. Despite necessary optimism, there is great uncertainty about treatments for COVID-19 and a vaccine: when they may be available, how effective they will be, how willing people will be to take them. While it will take years to rebuild the economic devastation and restore jobs and growth, the pandemic will have a lasting impact on how we choose to live our lives. The 1920s economic chaos left many Germans traumatized about inflation to this day; Americans who experienced the Great Depression remained frugal throughout their lives. This pandemic could fundamentally change how we view and manage risk and uncertainty, with lasting consequences on investment decisions, business strategies, government policies, and overall economic productivity.
Individuals may change their risk perceptions permanently after a sharp and sudden loss of income, leading to higher precautionary saving. In the short term, this may mean less debt, but in the long term it could lead to deeper structural changes, such as less willingness to take on a 30-year mortgage. In many countries, home ownership is low because long-term debt is seen more as a risk than an opportunity. Consumption patterns may change if people whose health is at high risk avoid certain activities. Consumers may decide to hold more essential goods in fear of new lockdowns—good news for toilet paper manufacturers, at least! But what about a young woman who has mulled over a transformational business idea night after night at her kitchen table, but whose now-heightened aversion to risk means a business is never started, employees are never hired, and products are never launched? High uncertainty makes it harder still to predict the net impact of so many behavior changes.
Companies also face a new set of uncertainties. US carmakers have experienced parts shortages because the Mexican state of Chihuahua, where many suppliers are based, has limited factory attendance to 50 percent of employees. Such disruptions may lead manufacturers to diversify their supply chains or keep more inventory on hand. Employee health is another new operational risk. Will companies decide to rely more on automation as a result?
“High uncertainty makes it harder still to predict the net impact of so many behavior changes.”
Changing suppliers, keeping more inventory, and needing to invest in more advanced machinery all bear costs for manufacturers often operating on thin profit margins. But raising prices in a recession is also difficult. For goods deemed “essential,” like medical supplies, countries may change regulations or subsidize domestic production, altering the competitive landscape. Similar to households, companies hit by a sharp drop in revenue may keep higher liquidity buffers. Some changes may be quantifiable once shifts in production stabilize and the impact on earnings becomes clearer, but uncertainty will remain for a long time for many companies.
Market volatility, defaults, and evolving regulation will change the landscape for the financial sector. The extreme swings in market conditions and asset prices seen early in the outbreak will change risk management models, with impacts on liquidity and capital buffers held to manage such risks. Regulations may also change, as policymakers seek to prevent a recurrence of the volatility and reduce the need for central bank interventions to preserve market functioning. Moreover, the recession will increase losses.
Economic policymakers are confronted with an intricate new puzzle: how to finance higher spending demands amid falling revenue and ballooning debt. Without a solution to the health crisis, governments will be dealing with unmeasurable variables in trying to plan the future. Private sector interventions through guarantees or direct ownership may have lasting and hard-to-quantify implications for competition and private risk-taking, beyond the immediate impact on public sector balance sheets
What does all this mean for the IMF? We have been called to action like never before, providing emergency support to a record number of countries within a short time frame. We have introduced new support facilities and expanded the borrowing limits on existing ones.
The IMF faces new operational challenges. Many countries have requested financial assistance to weather this storm. Some have challenging debt loads, where sustainability is hard to measure amid elevated uncertainties about growth and trade prospects. And if some countries do need to renegotiate their debts in a post-COVID world, the private sector will have to play a larger role in providing financing assurances to reduce uncertainty, given its increased importance as a creditor. Our members are also asking for policy advice and for help developing the capacity to cope with this severe shock. We must respond while still largely working remotely and unable to travel. Similar operational restrictions have challenged production of one of our key raw materials: timely and accurate country statistics.
“Market volatility, defaults, and evolving regulation will change the landscape for the financial sector.”
In fact, one of our core functions, economic surveillance, has had to reinvent itself. Going back to Knight’s concepts, much of our work focuses on measuring and addressing quantifiable risks. We use macroeconomic data to create baseline scenarios and estimate their likelihood. Following the global financial crisis, the approach had already been broadened by developing various scenarios and analyzing their probability so as to better understand the risks around numeric forecasts.
The size and simultaneity of the pandemic shock make for extreme Knightian uncertainty and ever-changing landscapes. We have had to become more agile in that regard. When the infection was still a suspicious pneumonia outbreak in China, we reached out to epidemiologists to learn how to combine their forecasting models with ours. New sources of big data were incorporated to understand consumer behavior changes where traditional statistics fell short. Even before the pandemic, we had started using military-style simulations to study escalating trade tensions. The approach has proved helpful as we attempt to quantify new risk.
Some time ago, I came across an article about how a US epidemiologist teamed up with a German reinsurance company to develop pandemic insurance product. They designed health models and early warning systems, estimated the economic impact for vulnerable industries, and determined how to distribute the risk. The policy became available in late 2018, but potential clients found it too expensive for such an unlikely event. When the catastrophe materialized in early 2020, it was too late to buy insurance.
This cautionary tale shows how much we need to improve risk assessment and management. Manufacturers, for example, must strike a balance in their supply chains between just-in-time (cheaper but inflexible) and just-in-case (more resilient but costlier) methods while factoring in trade, logistics, and sanitary conditions. Going back to the old ways seems reckless; erring too much on the resilience side might decrease the productivity of the economic engines.
Finding this new equilibrium between risk and resilience when there is so much uncertainty is a challenge we will face far into the future. It will require effort, patience, and innovative thinking. Fundamentally we will need more global cooperation. Everyone will be safe only when each one is safe. Only by working together will we overcome the massive uncertainty and the economic turmoil caused by this mighty microscopic scourge.
AUTHOR:

Geoffrey Okamoto, the first deputy managing director of the IMF.

Compliments of Finance & Development IMF.
The post IMF | In the COVID-19 world, risk has become riskier first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.