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EU Whistleblower Directive – Germany, France, Netherlands and others must stop blocking progress

The proposed EU Whistleblower Protection Directive is supposed to have the last trilogue negotiation, between the European Commission, Council and Parliament on the 4th of March. However, progress on the file is currently being blocked by Austria, France, Germany, Italy and the Netherlands, which threatens to derail the entire process.

Benedek Jávor, Greens/EFA spokesperson on transparency and democracy, comments:

“It’s sad to see countries like the Netherlands, Austria and France claiming to support whistleblowers at home while blocking progress at the EU-level in Brussels. The Social Democrats appear Janus-faced on the Directive with their MEPs supporting external reporting for whistleblowers, but their Justice Minister in Germany, Katarina Barley, appears to be trying to undermine the purpose of the Directive by forcing potential whistleblowers to first report wrong-doing within their own organisation. This would mean individuals will feel less able to speak out against their own employers. 

“Whistleblowers need to be able to come forward to the media and other external trusted actors, otherwise they will not feel safe or protected. It’s time for all the countries blocking whistleblower protection to see that the winds have changed and that the freedom for individuals to expose corruption, wrong doing and illegality is essential to a healthy democracy.”

Can the EU do more for a healthy media sector?

On 23rd January we organised a conference together with Fondation Euractiv about the media sector. What can the EU do to support independent journalists? What is a role of the media sector in a democracy? Can we do more to help the innovation of the media?

Healthy democracies need a healthy media sector. Yet, faced with multiple attacks and challenges, notably technological and financial, the sector needs a coordinated response. This conference gathered 80+ participants from EU Digital and Media sector. Media independence for quality debates: This first exchange was focused on media independence and freedom of the press in Europe, moderated by Stephen Boucher, with MEP and Benedek Jávor (Greens/EFA), RSF, and other high-level speakers from the media, foundations and NGOs. Keynote speech: Digital Commissioner Mariya Gabriel What can the EU do for the media sector’s sustainability: This second panel was moderated by Christophe Leclercq and bring together key MEPs, notably Maria Joao Rodrigues (S&D), academics, industry representatives, foundations and NGOs.

Corporate Europe Observatory report on Council lobbying

Today, a new report from Corporate Europe Observatory: “Captured states: when EU governments are a channel for corporate interests” reveals that the complex and opaque nature of decisions made in the Council of Ministers often benefits corporate interests over those of citizens.

The report comes nearly a week after the European Parliament voted to improve its own transparency standards around lobbying. Since November 2014, the European Commission has displayed information about the lobby meetings of Commissioners and high level officials on the Transparency Register. The Greens/EFA group are calling for similar rules to be adopted by the permanent representations of national governments to the EU and for more transparency around Council meetings.

Benedek Jávor, transparency spokesperson for the Greens/EFA group in the European Parliament comments:

“Today’s report from Corporate Europe Observatory shows that decisions between EU governments may be made under the influence of lobbyists and not in the interest of people. Too often the EU gets a bad rap for decisions being made behind closed doors with lobbyists holding too much sway over what is decided in Brussels. However, often what happens in Brussels, doesn’t start in Brussels, it comes from the secretive interactions between big business and national governments. What is in the interest of large corporations is not always in the interest of European citizens, which is why we need transparency around the lobbying of EU governments, both in Brussels and in the national capitals.”

More:
Read The report by Corporate Europe Observatory

The #TruthNeedsFriends Campaign

People who expose the truth nowadays are harassed, demoted, fired, or sued by employers who are desperate to silence them. Also known as “whistleblowers”, these people speak up to defend our rights, but when they say something their bosses don’t like, they suffer fierce retaliation.

The good news is that all of this could soon become a thing of the past: The European Union is on the verge of adopting a new law that would protect people who tell the truth and punish the bullies that are trying to shut them up.

But we need to make sure that the law is done right! People who tell the truth shouldn’t be punished. So please join our campaign and put pressure on your government – because the #TruthNeedsFriends.

About the #TruthNeedsFriends Campaign

We have a massive opportunity to end the fear, silence, loneliness and bullying that some people suffer from just for telling the truth. The European Union should soon adopt new legislation that will change the lives of people who reveal the truth about illegalities, corrupt practices and other dodgy dealings – otherwise known as whistleblowers

The first of its kind, the new European Whistleblower Directive would oblige all 27* EU governments to introduce minimum standards of protection for truth-tellers.

These protections would include penalties for people that retaliate against whistleblowers or try to shut them up; an obligation for public and private bodies to set up channels for receiving reports and to keep the identity of the whistleblower confidential; and legal shields for whistleblowers so that, if for example they breach a confidentiality agreement, they would not be held liable for it.

A law like this could eventually overturn the strong social norm that we learn as we get older: If you want to stay out of trouble, keep your head down and your mouth shut. But this social norm is what allows people with no shame to “get away with it”: whether it be marketing horse meat as beef, sexually abusing the people you’re supposed to protect, or spying on everyone in the world.

Punishing people who tell the truth is not only unfair, it’s a perversion of the values that we were all brought up with as children. We cannot allow the corrupt – desperate to cover their tracks – to starting firing, demoting, harassing or suing the only person who cared enough to tell the uncomfortable truth.

We want a world in which the truth has nothing to fear.

So far, the European Parliament has been the strongest in defending the right to the truth. Now, the Parliament has to negotiate with the European Commission and the Council (where all the EU governments are represented) in order to draft the final version of the much-awaited whistleblower protection law. It’s a race against time to get it adopted before the upcoming European Parliament elections.

Unfortunately, not all governments are fully convinced about the possibility of allowing people like us, or your colleagues or family members, to break the silence. And that’s why we’re launching the #TruthNeedsFriends campaign.

The #TruthNeedsFriends campaign seeks to motivate people to stand up to the bullies of the adult world who seek to hide the truth. By sharing the video and tagging our government representatives on social media, we are letting them know that we want to defend the truth and to protect the people who speak up.

The future of whistleblowers across Europe is hanging in the balance – which is why the truth really needs a lot of friends right now. Friends like you!

Find out more about our work on whistleblowers here:

 

 

 

Forests at the heart of Sustainable Development

Join us for a high-level conference on Forests at the heart of Sustainable Development this Thursday, the 7th of February 2019, 9.00 – 12.30, European Parliament room A1G-3

organized by the Food and Agriculture Organization of the United Nation (FAO) and myself, together with MEPs Heidi Hautala (Greens/EFA); José Inácio Faria (EPP); Sirpa Pietikäinen (EPP) and Jo Leinen (S&D) with input of the IUCN, FERN, WWF, the World Bank and others. Programme available here.

 

The global goals for sustainable development to combat hunger, to stabilize our climate, to ensure a decent life for all. So much talk about it. But how to deliver on them?

Our answer is: Do protect the forests.

The aim of our event is to demonstrate how import forest are in the struggle to achieve SDGs and to show the other side of the coin: how deforestation jeopardizes all the benefits, including efforts to improve governance, accountability and equality.

We come together not just to pile up an amount of concern, but we address the core issues and take a close look at the possible ways forward, see how both the obvious and the more hidden deforestation risks to SDGs could be tackled.

Welcome coffee available at 8.30. Keynote speeches from Karmenu Vella, European Commissioner for Environment, Maritime Affairs and Fisheries and Maria Helena Semedo, FAO Deputy Director-General for Climate and Natural Resources and video message from Phil Hogan, European Commissioner for Agriculture and Rural Development.

Light lunch to be served at 12.30. Detailed programme below.

The event will be webstreamed.

 

MEPs vote for new rules on lobbying in major victory for transparency

The European Parliament has just voted for binding rules for more transparency around MEPs’ meetings with lobbyists and seized the opportunity to the amended Rules of Procedure through the “Corbett Report”. The report calls for stricter rules around rapporteurs and other MEPs in other official positions to disclose their meetings with interest representatives on the Transparency Register. Benedek Jávor and the Greens/EFA group has been calling for these actions for years. Mr. Jávor believes that all lobby meetings are need to be published in a searchable database to ensure the transparency and the integrity of the legislative procedures.  He has been disclosing his lobby meetings on his website, which is available here.

The Parliament also voted in favour of stricter use of MEPs’ General Expenditure Allowance (GEA). Mr. Jávor is publishing regularly his expenditures which you can see here.

In an extremely unusual steps the Hungarian Fidesz MEP Mr. József Szájer of EPP group had pushed through a secret ballot on the new transparency rules. They tried to hide their opinion, but an overwhelming majority of MEPs 380 votes in favour of more transparency.

transparency

Hungary is a new tax haven according to a new report

A new research commissioned by the Greens/EFA Group in the European Parliament shows that many companies do not pay much tax in many EU countries – in absolute values or in comparison to nominal rates or to some other countries.

Effective tax rates (ETRs) estimated from companies’ balance sheet data are useful indicators for the tax system. To estimate the ETRs of multinational enterprises (MNEs), the research used unconsolidated data of MNEs from Orbis, the imperfect (so these ETRs should not be used as the only evidence for decisions), but best available company-level data for the EU. It analyses ETRs and nominal rates for the period from 2011 to 2015 for EU countries.

Hungary has the second lowest effective tax rate in the European Union (7.5%), which basically makes it a tax haven within the EU. This is clear part of Orbán’s policy as he favours international investors and multinational corporations and he wants to make Hungary attractive only with low taxation and low wages of workers.

Calculator - tax © Werbefabrik - Pixabay

 

 

 

 

 

The research shows that the effective tax rates in the European Union are much lower than nominal tax rates. ETRs and nominal rates are positively related, but for the EU countries less so. At the country level, the correlation between ETRs and nominal rates for the 63 countries is 0.63, while it is almost a half of that, 0.33, for EU countries only. In addition, most countries appear to tax MNEs regressively: the larger the MNE, the lower the effective tax rate.

According to the available data, MNEs can expect to pay anything between 6% and 30% (and as little as 2% or as much as 49% in the most extreme cases) of their profit in taxes. Luxembourg has the lowest ETR (2.2%) and Norway the highest ETR (48.7%) among the 63 countries in the final sample. In the EU, in addition to Luxembourg, the lowest ETRs are to be found in Hungary (7.5%), Bulgaria (9.5%), Cyprus (9.6%) as well as in the Netherlands (10.4%) and Latvia (10.6%). Within the EU, Italy and Greece have the highest ETR (30.4% and 28.4% respectively), with the third and fourth highest being Spain and Slovakia (21.8% and 20.2% respectively). The remaining 18 EU countries (out of 28 current EU member states) have ETRs between 12% and 20%. Some of the biggest EU economies are within this range, including the United Kingdom (14.9%), France (16.7%) and Germany (19.6%). The unweighted average of 28 EU countries’ ETRs of 15% (in contrast the statutory rate average is 23%) is lower than the other countries’ average ETR of 22% within the sample of 63 countries (in contrast their statutory rate average is 24%). The five countries with the highest ETRs (as well as some of the highest statutory tax rates) are all non-EU member states: Peru, Columbia, Pakistan, Argentina and Norway.

ETRs are lower than nominal rates in most countries, in particular for some EU countries. A case in point is, again, Luxembourg (2.2% vs 29.1%), but the nominal rate is not very illuminating in terms of providing information about the tax burden that MNEs face in many other EU countries. Indeed, nine out of ten countries with the highest percentage point differences between the two rates are EU members: Luxembourg, Belgium, Malta, France, the Netherlands, Austria, Hungary, Finland and Sweden. In addition, Germany, the biggest EU economy, has one of the highest percentage point differences (19.6% vs 29.5%). On the other hand, some countries exhibit ETRs comparable to their nominal rates, including Ukraine (ETR of 20.2% vs nominal rate of 20.2%), Bulgaria (9.5% vs 10%), or Slovakia (20.2% vs 21%). The fact that ETRs are mostly lower than statutory rates is natural given by tax holiday and other tax provisions that make the ETRs lower than nominal rates and, interestingly, the results reveal how big the differences are across countries. In addition, most countries appear to tax MNEs regressively: the larger the MNE, the lower the ETR. For most countries, there is a negative relationship between size and ETR as measured by a correlation coefficient between the size of MNEs by total assets and their ETRs. Overall, there are some tentative conclusions about a race to the bottom in ETRs from the evidence that has been presented. These include that some EU countries do not seem to tax MNEs much and these EU countries cannot lower their rates much lower since they are already close to the bottom. These results are based on the best available, but imperfect company-level data, and therefore we call for better data, for example, in the form of MNEs’ public country-by-country reporting data.

In the past years, the EU has proposed key reforms to reduce the tax avoidance of big multinational companies in Europe – such as public Country-by-Country Reporting and Common Consolidated Corporate Tax Base – but these are blocked in Council by the member states. The Greens/EFA group in the European Parliament calls on the EU member states to end this blockade and approve the necessary reforms without any further delay.In the view of extremely low corporate tax rates in some EU member states, the European Commission should make a proposal to introduce minimum effective corporate tax rates in the EU to stop the existing race to the bottom and end the unhealthy tax competition in the European Union.

The European Commission should also be ready to use the article 116 of the Treaty on Functioning of the European to propose legislation in this respect.

The full report available here

Of funds and values: Conditionality in EU cohesion policy

Günther Oettinger, Member of the European Commission in charge of Budget and Human Resources, speaks at a conference on the Multiannual Financial Framework (MFF) in Brussels, 8 January 2018. [© European Union , 2018 / Source: EC - Audiovisual Service]
Günther Oettinger, Member of the European Commission in charge of Budget and Human Resources, speaks at a conference on the Multiannual Financial Framework (MFF) in Brussels, 8 January 2018. [© European Union , 2018 / Source: EC – Audiovisual Service]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As the EU’s multi-annual budget is being negotiated, the amounts and efficiency of spending matter but also priorities and European values when disbursing programmes. Smarter conditionality is needed, triggering less political backlash, and, where needed, direct payment to beneficiaries, argue Benedek Jávor and Laszlo Andor.

Benedek Jávor is a Member of the European Parliament in the Greens/EFA Group and Laszlo Andor, Senior Fellow at FEPS, is the former EU Commissioner for Employment, Social Affairs and Inclusion. Both are from Hungary.

The draft MFF proposed by the European Commission includes new tools for addressing the systemic misuse of EU funds. This is a major step forward, as the Commission does not only acknowledge the problem that EU funds can become more likely targets of fraud and corruption than national budgets in some countries, but also that what we are seeing today is a systemic problem.

We fully share the Commission’s analysis and agree that the situation is grave: state-level fraud is organized by political actors. That results in a waste of EU resources but inevitably undermines democracy, the public interest, and the rule of law, as well as the principles of partnership and planning inherent to the policies. We see that government actors use European funds to enrich their political or business affiliates with the ostensible goal to strengthen their power regardless of the financial and moral cost. A black book could be filled with cases representing a variety of countries and various political families, although close observers would agree that the current Hungarian practice is in the class of its own.
While we are deeply concerned, we also believe that the discussions have so far not explored all options and there is a high risk of launching a mechanism with serious flaws by 1. reliance on a political decision as a trigger of sanctions (i.e. to establish that country X violated the rule of law), and 2. threatening to cut country X off entirely from EU funds once the trigger is pulled. In our view, the triggering of sanctions needs to be objective and transparent which requires a solid set of indicators and benchmarks and that the sanction must be well targeted to hit the perpetrator of fund abuse rather than the innocent hostages.
The Commission proposal to suspend payments and commitments comes from a good intention. If triggered, this would prohibit entering into new commitments until the Member State in question returns to the expected path of European values. However, experience shows that abusive governments do not respond to such threats. In fact, they are likely to turn these to their own advantage by showing the EU as a biased body which blackmails and punishes the non-abiding Member States. If the EU withholds all the funds from the Member States, it can be easily interpreted as blackmail with a high risk of backfiring politically.
The EU must show that it regards only the best interest of the citizens when acting on sanctioning a Member State; taking those funds into its own hands and distributing them in the Member States according to the original goals would be the way to do that. In other words, our proposal is that the Commission in such cases should suspend shared management. This way the EU’s actions cannot be regarded as blackmail while it could avoid the corrupt allocation channels and financing of oligarchs close to governments.
Direct management solutions could be also introduced in a gradual and proportional manner: first, only those payments could come under direct control of the Commission, where they have already rejected payments as a consequence of irregularities or detected fraud. As a next step, in case of systemic problems in operative programmes or the complete management system and democratic control mechanisms in a Member State, direct or indirect management could be introduced in a more comprehensive in the case of serious and systemic breaches. Alternatively, a third type of management method: “assisted management” could be invented by planting EU experts in national agencies without completely sidelining them. This could be either requested by the Member State or, above a certain threshold (frequency of errors, suspensions and OLAF investigations), assisted management could be launched by the Commission as well.
Cohesion policy and EU funds are not “gifts” for Member States, but indispensable parts of a balanced and fair functioning economic governance and single market in Europe. Thus, complete withdrawal of funds should remain a  “nuclear option”. On the other hand, systemic corruption can lead to a situation where EU funds simply do not fulfill their original goal of improving competitiveness, developing infrastructure and investing in human capital or better governance. In those cases, the solution shouldn’t be to punish societies of the affected Member States but to repair the management system in a way which is able to efficiently prevent systemic misuse of funds by national political or management systems.
Choosing the best way forward is by no means easy, especially on such a highly politicised instrument. Pro-European forces in the European Parliament and elsewhere should be united and turn up their efforts in defense of EU values and resources. However, this should not only translate into taking a strong stand against populism, but also defending the rights and opportunities of the victims of misbehaving governments, which often can be found among the citizens of the Member State in question.

https://www.euractiv.com/section/economy-jobs/opinion/of-funds-and-values-conditionality-in-eu-cohesion-policy/

A New Ambiton for Water Resources in Europe

Global pressure is mounting around water resources. The World Economic Forum continues to rank water crises as one of the greatest threats to developing and developed states’ economies—let alone their population’s security. The alarm has been raised and Europe has received the message; the European Union must do its part to turn a crisis into an opportunity. This is the underlying message of a Commission that is curently reviewing its directive on drinking water as well as proposing a new regulation on water reuse. It is a message of positive nature though, one that is set against a fragile timeline. The issues are interdisciplinary in a way that they involve experts from a variety of fields coming together to propose cost-effective and sustainable solutions to the use and valuing of water resources across Europe. Not necessarily under a strict hierarchy, the European Union is committed to tackling drinking water quality, water management and infrastructure, energy generation and the water nexus, among others. The situation is as such: urban infrastructure is outdated or deteriorating, the current management tools are inefficient or even wasteful and water consumption in the energy sector, to name a critical area, undermines efforts to move to renewables. The strengthen this image, the McKinsey Global Institute estimates €10,3 trillion is required to invest solely in infrastructure to meet global water demands by 2030. The burden on European states is significant in light of ageing infrastructure and agricultural intensive economies—the solutions will require investment at a time when interest rates are low and consumption ever-growing.

 

PDF version of the issue: A-New-Ambiton-for-Water-Resources-in-Europe-issue-55

Article 7 procedure against the Hungarian government

In September, the European Parliament took the historic step of voting to launch Article 7 procedures against Hungarian government. 448 votes to 197, a large majority in the European Parliament spanning the political spectrum, including the clear majority of EPP as well, approved the proposal. Approval means the European Parliament sees a clear risk of a serious breach of the EU founding values and the Parliament asks the Council to debate the issue. The values identified at risk are judicial independence, freedom of expression, corruption, rights of minorities, and the situation of migrants and refugees are key concerns. Launching Article 7 procedure sent a clear message to Viktor Orbán’s government, that he would no longer be able to disregard EU membership rules without facing the consequences. Although the government presented it as an unfair attack on the Hungarian nation, according to recent polls, the majority of Hungarian citizens are aware that this is a debate about the state of democracy in Hungary, and according to the same poll 51% of Hungarians would have voted in favour of the report

There are still many stages left in article seven procedure, the proposal for a Council decision will now be sent to the EU member states. They may determine the existence of a clear risk of a serious breach of the EU values in Hungary. Afterwards, the European Council may determine, by unanimity and with the Parliament’s consent, the existence in Hungary of a serious and persistent breach of the rule of law, democracy and fundamental rights. A unanimous vote is unlikely to happen because both Poland and Hungary are in similar article 7 situations, and have pledged to vote against the punishment of the other.

Since the vote to trigger Article 7, there have been meetings regarding the next steps. After one such meeting, MEP Judith Sargentini (Greens/EFA, NL) criticized EU countries for stalling the process. She explained that as time is lost, “we see further deterioration of academic freedom and the undermining of judicial independence in Hungary”. The Hungarian government has distributed its assessment of the issues. But, as of now, it is not clear what will happen at the next ministers meeting in December.

The impact the Article 7 vote had on the EPP party is noteworthy because Orbán’s Fidesz party is a part of the European Parliment’s EPP. Benedek Jávor explains that earlier on, Orbán’s goal was to push the whole EPP into a more far-right position. Nevertheless, his allies within the EPP voted in favor of the Sargentini Report meaning, he was unsuccessful. The vote made clear that Orbán’s only allies are Eurosceptic, racist, far-right parties. An EPP summit that took place after the vote sent a unified message to Orbán by adopting a resolution in defence of liberal democracy in the face of rising populism across Europe, that showed Orbán cannot challenge basic EU rules and values.

Benedek Jávor discussed two possible future developments that may take place because of the Article 7 vote. The first is that Orbán will likely attempt to bring Eurosceptic far-right forces together into a political group at the European Parliament. A second possible development is practical sanctions on Hungary, which could happen even without a council decision on the Article 7 procedure. At the next multiannual financial framework, there is a proposed option to freeze payments of EU funds in cases of corruption. Meaning payments from the EU to Hungary could be frozen.