OECD Economic Surveys: European Union 2018

Annex. Progress in main structural reforms

Abstract

This annex reviews action taken on recommendations from previous Surveys since the June 2016 European Union Survey.

 

Main recommendations	Action taken since the previous Survey (2016)
A. Developing market-based financing alternatives for firms
Ease the regulatory treatment of simple, transparent and standardised securitisation to unlock lending to small and medium-sized enterprises.	The amended Capital Requirements Regulation, reflecting the adoption of the new securitisation framework, was published in the EU Official Journal on 28 December 2017. Work is ongoing on the adaptation of Solvency II implementing measures, with a view that, like the STS package, they enter into application on 1 January 2019.
Collect and share internationally comparable credit information on smaller firms.	No regulatory action taken. In the context of the Capital Markets Union (CMU), the Commission issued a staff working document with best practices on SME advisory support. In the context of the CMU Mid-term Review, the political conclusions reached in July 2017 agreed that enhancing the cost-effective availability of SMEs' information should be pursued initially by building on voluntary initiatives by the private sector and, should this approach fail to deliver its expected benefits, through other means that would have the potential to be more effective.
Lower capital requirements for long-term and infrastructure investment.	The European Commission has adopted an amendment of the Solvency II Delegated Act lowering capital requirements for investments in qualifying infrastructure corporates. In a previous amendment the capital charges for investments in qualifying infrastructure projects had already been reduced.. As far as banking regulation is concerned, the Commission in its proposal to amend the CRD, adopted in 2016, has included a more risk-sensitive treatment of infrastructure projects fulfilling a set of requirements able to reduce their riskiness.
Lower the regulatory barriers in corporate bond markets by addressing issues in securities ownership and harmonising insolvency proceedings.	With regard to securities ownership, the Commission held a public consultation on third party effects of transactions in securities and claims. Regarding the harmonisation of insolvency proceedings, the Commission proposed, in November 2016, a Directive for preventive restructuring frameworks, second chance and measures to increase the efficiency of restructuring, insolvency and discharge procedures. The Commission consulted publicly on measures to enhance the protection of secured creditors. The Commission services are undertaking a benchmarking of national loan enforcement and insolvency regimes from a bank creditor perspective.
B. Enhancing labour market mobility and integration
Reduce the administrative burden associated with recognition of professional qualifications by using electronic procedures such as the European Professional Card.	In 2017, the European Commission presented a communication on reform recommendations for regulation in professional services addressed to each Member State, a proposal on a proportionality test before adoption of new regulation of professions, and a proposal for a European services e-card simplifying administrative formalities required to provide services in another Member State.
Legislate effective portability of supplementary pension rights.	Member States have been transposing Directive 2014/50/EU on minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights, to meet the deadline of 21st May 2018.
Simplify the eligibility requirements and procedures of the Blue Card scheme to make it more attractive to non-EU high-skilled labour migrants than existing schemes.	In June 2016, the Commission proposed a revision of the Blue Card Directive in order to make it a truly EU-wide scheme with more harmonised conditions, procedures and rights and where parallel national schemes would not be allowed. Moreover rights of Blue Card holders would be reinforced in terms of labour market access, intra-EU mobility, family reunification and access to EU long-term residence status.
Strengthen joint protection of external borders.	The European Border and Coast Guard has been established in October 2016.
Speed up administrative decisions on asylum applications and ease labour market access for recognized refugees.	In July 2016, the Commission presented a second package of legislative proposals to complete the reform of the Common European Asylum System (CEAS). The proposal for an Asylum Procedure Regulation simplifies, streamlines and consolidates procedural arrangements and provides for short but reasonable time limits throughout the procedure to ensure fast but high quality decisions. The proposal for a recast Reception Conditions Directive ensures that asylum seekers are given effective access to the labour market within 6 months from the application for international protection was lodged. The proposal for a Qualification Regulation sets uniform standards for recognising persons in need of protection and rights granted to beneficiaries of international protection, and clarifies employment related equal treatment rights.
C. Connecting network sectors would foster internal market and green growth
Improve the quality of impact assessment of legislative proposals, notably amendments, and the quality of ex post evaluation of policies.	An interinstitutional agreement adopted in 2016 expands the commitment to impact assessment also to the legislators where appropriate for their substantive amendments and includes a commitment by all three institutions to appropriate reporting, monitoring and evaluation requirements. The Better Regulation Guidelines and the underlying toolbox were updated and strengthened in July 2017. All the steps undertaken since 2016 in the Better regulation agenda are reported in the Communication "Completing the Better Regulation Agenda: Better solutions for better results" .
Harmonise the rules for online purchases and reduce unjustified geographical discrimination of consumers.	At the end of 2017, political agreements has been reached on a) new legislation to address unjustified geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment in the internal market and b) a legislative proposal on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight, respectively. In May 2016, the Commission presented a legislative proposal to strengthen enforcement of consumer rights and guidance to clarify, among others, what qualifies as an unfair commercial practice in the digital world. In October 2017, the Commission presented an amended proposal concerning contracts for the online and other distance sales of goods.
Harmonise, taking into account the specificities of each member state, national regulations and technical specifications in network sectors, with the target of transferring decision powers in technical matters to a single EU regulator.	The proposal of September 2016 for the European Electronic Communications Code (EECC) sets EU-wide common rules and objectives on how the telecom industry should be regulated. It applies to providers of networks and/or services and defines how they can be regulated by national regulators. It vests the Body of European Regulators of Electronic Communications (BEREC) with a limited number of decision-making powers. The accompanying proposal for a revised BEREC Regulation aims at making the governance structure of BEREC simpler and more efficient The role of the European Railway Agency in authorisation of rolling stock for operations was strengthened. The technical pillar of the 4th Railway Package, adopted in April 2016, aims at improving interoperability between national railroad networks and at cutting red tape for operations beyond one single Member State. Political agreement on the opening of domestic railway markets is emerging. In the inland navigation sector, waterways of European dimension, i.e. serving cross-border traffic needs, are part of the TEN-T core network corridors. The adoption of Directive (EU) 2016/1629) on technical standards of inland navigation vessels strengthens the Single Market, enhancing safety and performance of the inland waterways fleet. For road transport, the market for intra-EU freight has been entirely opened to competition. The Commission has made proposals to further reduce market access barriers and to harmonise technical and social standards. Political agreement on these proposals is pending. For energy, the measures proposed by the Commission in the 'Clean Energy for All Europeans' package of 30 November 2016 will constitute a significant step towards the creation of the Energy Union. The package included eight different legislative proposals covering energy efficiency, energy performance in buildings, renewable energy, governance, electricity market design (the Electricity Directive, Electricity Regulation, and Risk-Preparedness Regulation) and rules for the regulatory agency, ACER. The proposed Renewable Energy Directive, together with the proposals on the new electricity Market Design, will set a regulatory framework that allows a level playing field for all technologies without jeopardising the EU's climate and energy targets. With respect to ACER, the proposal would strengthen its powers for those cross-border issues which require a coordinated regional decision, thereby contributing to faster and more effective decision-making on cross-border issues. National regulators, deciding within ACER on those issues, would remain fully involved in the process.
Prioritise the Trans-European transport and energy network projects to support the completion of the Single Market.	Four bottlenecks on TEN-T core network corridors have been removed in 2016, with additional 11, 25 and 53 expected in 2017, 2018 and 2019. The EU average for the completion of the TEN-T rail core network is 60% (2014). The EU average for the completion of the TEN-T road core network is 74% (2014). In November 2017, the Commission published a Communication on strengthening Europe's energy networks and published the third list of Projects of Community Interest (PCI)'s. Since 2013, the TEN-E policy framework will have seen approximately 30 energy infrastructure projects of common interest (PCIs) completed or being in operation by the end of 2018. Another 47 important projects are scheduled to be completed around 2020 out of a total of 173.
To ensure a functioning EU carbon market, reform the ETS by reducing the emissions cap and introducing a reserve of allowances to smooth market fluctuations.	The Market Stability Reserve (MSR), established at the end of 2015 by EU legislation to tackle the persisting surplus of allowances on the EU carbon market, will operate as of 1 January 2019. In addition, the EU has revised the EU ETS and corresponding legislation for the period after 2021 with a view to implementing its commitment of reducing emissions by at least 40% by 2030 in the context of the Paris Agreement. Besides the adjustment of the cap, the revised EU ETS legislation foresees further measures to strengthen the EU carbon market and to enhance support for innovation and the modernisation of energy systems, in particular in lower income EU Member States. With regard to a stronger carbon market, it has in particular been agreed to temporarily double the feeding rate for the MSR (from 12% to 24%) to restore the demand-supply balance on the market at a faster pace and to invalidate a certain amount of allowances held in the MSR as from 2023.