This regular alert covers key policy and regulatory developments related to EU geopolitical risks, including in particular, economic security, Russia's war against Ukraine, health threats, and cyber threats. It does not purport to provide an exhaustive overview of developments.
This regular update expands from the previous Jones Day COVID-19 Key EU Developments – Policy & Regulatory Update (last issue No. 99) and EU Emergency Response Update (last issue No. 115).
LATEST KEY DEVELOPMENTS
Competition & State Aid
- European Court of Auditors releases Special Report on State aid in times of crisis
- European Commission approves further schemes under Temporary Crisis and Transition Framework to support economy in context of Russia's invasion of Ukraine and accelerating green transition and reducing fuel dependencies
Trade / Export Controls
- European Commission publishes Fourth Annual Report on Screening of Foreign Direct Investments
- European Commission releases Fourth Annual Report on Implementation and Enforcement of EU Trade Agreements
Medicines and Medical Devices
- European Commission publishes factsheet "Overcoming the COVID-19 pandemic together and building a Health Union"
- European medicines agency network publishes draft strategy 2028
- EMA announces initiatives to improve efficiency of approval process for new medicines in EU
Cybersecurity, Privacy & Data Protection
- European Commission and EU Member States simulate large-scale cyber-attacks in annual "Blueprint Operational Level Exercise"
- European Commission publishes NIS2 Implementing Regulation on critical entities and networks
COMPETITION & STATE AID | |
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European Court of Auditors releases Special Report on State aid in times of crisis (see here) |
The European Court of Auditors (ECA) released a Special Report on 31 October 2024 on "State aid in times of crisis – Swift reaction but shortcomings in the Commission's monitoring and inconsistencies in the framework to support the EU's industrial policy objectives." Backdrop. In recent years, the European Commission introduced three temporary State aid frameworks. These were intended to enable Member States to support companies affected by (i) the COVID-19 pandemic in 2020, (ii) Russia's invasion of Ukraine in 2022, and (iii) the European Green Deal in 2023 by prolonging certain main features of the Ukraine crisis framework, as well as by introducing new measures (applicable until 31 December 2025) to further accelerate investments in key sectors for the transition towards a net- zero economy. As a result, State aid spending in the EU nearly tripled, from a pre-crisis level of some €120 billion per year to surpassing €320 billion in both 2020 and 2021, and almost €230 billion in 2022. Findings. The Special Report focuses on the Commission's effectiveness in adapting the State aid framework to respond to the above-referred economic disturbances, in addition to assessing the consistency of the State aid framework supporting the European Green Deal and other industrial policy objectives. According to the ECA, in particular: (i) The Commission rapidly adopted the COVID-19 and Ukraine temporary crisis frameworks, which enabled Member States to act promptly by establishing a common framework for national aid measures, providing legal certainty to Member States, and limiting their administrative burden. However, such rapid action also meant that Member States had very limited time to provide feedback to the Commission on these crises frameworks. State aid is also increasingly used to support industrial policy goals such as enhancing the EU's strategic independence and the transition towards a net-zero economy. However, the EU currently has a complex set of State aid rules that are not always consistent or supported by sufficient economic analysis. (ii) On assessing crisis-related State aid, the Commission often lacked details on Member State measures implemented under the temporary crisis frameworks, notably in relation to "umbrella schemes" (e.g., combining several crisis response measures and aid instruments (such as grants, loans, or tax relief)). In particular, the national conditions for granting the umbrella scheme aid were unknown, as support measures underlying such schemes were not assessed or subject to the Commission's approval. (iii) On monitoring of State aid to verify whether Member States were complying with State aid decisions and rules, the Commission has faced significantly higher State aid expenditure since 2020. However, during the crises, the Commission temporarily reduced its periodic monitoring of State aid, resulting in limited coverage of national schemes, before resuming annual monitoring in 2024. Furthermore, when examining the Commission's 2022-2023 monitoring exercise, the ECA considered the Commission's risk assessments as inadequately documented and that these did not allow the ECA to conclude that all potential risks had been systematically identified and evaluated. (iv) On transparency, the ECA's audit visits found that not all Member States reported comprehensive and accurate data on State aid to the Commission. The ECA considers that the Commission currently lacks complete and reliable data on the State aid granted by Member States, including a lack of data on overall amounts of such aid, nor the amounts granted to different economic sectors, including those where the EU is pursuing an active industrial policy (e.g., batteries, hydrogen, semiconductors). Furthermore, the ECA considers that required transparency regarding the beneficiaries of State aid is currently not ensured, due to an inconsistent framework for transparency and with some Member States not meeting their transparency obligations. Recommendations. To address the ECA's concerns, the Special Report provides various recommendations to the Commission, such as:
For the Commission's response to the Special Report, see here. |
European Commission approves further schemes under Temporary Crisis and Transition Framework to support economy in context of Russia's invasion of Ukraine and accelerating green transition and reducing fuel dependencies (see here) |
The Commission approved additional measures under the State aid Temporary Crisis and Transition Framework (TCTF) to support the economy in the context of Russia's invasion of Ukraine and in sectors key to accelerating the green transition and reducing fuel dependencies (as most lately amended on 2 May 2024 and 20 November 2023). Among the most recently approved State aid schemes under the TCTF (up to 4 November 2024):
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