1 Decision making and agricultural markets Role of Member States, After 2013 perspectives Gödöllő, 28 June 2010 László Sárecz

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Decision making and Decision making and agricultural marketsagricultural markets

Role of Member States, Role of Member States,

After 2013 perspectivesAfter 2013 perspectives

Gödöllő, 28 June 2010

László Sárecz

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•Decision Making

•European Structure

•Cases

•After 2013

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Define what you talk about !

What is a decision? - Choice of one or more alternatives

Our grandfathers: 10 things

Nowadays: 10,000 things

Different dimensions, different habits, different opportunities : what I know nothing of, „does not exist” – saved the pain of thinking!

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Shall I watch the late night show with David Letterman and pack an XXL bottle of Coke with chocolate chip cookies then the next day go on for a massive diet…

….or shall I just go to bed at 22.00 after a veggie dinner at 18.00?

IT IS ALL UP TO US! - Buy or not buy

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What you desire to have will be realised, produced etc.. The more there is to choose from the more complicated the relations become. WHY AM I SAYING THIS?

The European Union is a club in which to make decisions acceptable to everybody.

1957: 6 Member States

2007: 27 Member States

2020: 33 Member States or 34… or 35??

The more interests we have the more complicated it becomes to decide in a fair way. Only higher levels see through the issues – a reason for a change (Lisbon Treaty) – ultimately competitiveness counts, borders are disappearing

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Passing a legal act in the Council and the Commission

Council legislation Legislation in the Commission

COM

Council

legislation

ECOSOC/CR

EP

Council Legislation

COM

Committees

legislation

Council?

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Preparation of a legal act

COM exclusively during the whole proc. If MS initiative: convince COM Expert groups and committees: interest groups

and their experts, experts from MS – consultation, lobbying

Unit, Directorate, Inter-service, Commissioners (Wednesdays SMV, balance MS interests) to participate in preparation

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Actors of different levels

MS representatives and experts COM reps, COM experts, „legal service” Chairman, General Secretariat Auxiliary staff: interpreters (mind the

available time and be sensible!)

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Council legislation/ Working Parties

COM submits proposal to Presidency MS MS experts Technical and political questions No formal voting, wording shows whether for

or against Informal consultations between MS and

between MS and COM (telephone, exchange of letters)

The meeting (asking for the floor, tour de table, „voting”)

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COREPER II,I, SCA

Prepare Councils COREPER I: (veterinary and phytosanitary,

fisheries, internal market, environment etc) Dept. Head of Perm.Rep. - Mertens Group

COREPER II: - Foreign Affairs Council and Finance – More political, Head of Perm Rep. - Antici Group

SCA: Agri spokesman or attaché COM experts – trying to explain and balance Substantial issues, major details, debate – informal

talks and trade offs – „I have this what do YOU have” type reasoniong

A point. Or B point – back to WG or WP, indicative voting or False B if there is hope for compromise – few MS affected only

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The Council

Debate on most important issues only (political, financial questions)

Voting: QMV, weighting of votes Approves, rejects – back to WP Modify COM prop only with unanimity COM may withdraw anytime

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Council legislation

COM Working Party

Coreper II, I, SCA

Council

ECOSOC

COR

EP

MSs

Interest Groups

International organisations

3rd parties

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The Council and the EP

Consultation procedure: used to be the most common in CAP – minimal EP role, only opinion

Co-decision: Veterinary, Food security – after 1 Nov 2009 in all CAP areas (Lisbon Treaty)

NO Legislation without EP – better control of „citizens”

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The European Parliament

President, Vice-President Parties: 8 political directions, no nations Committees: „Rapporteur” and „shadow

rapporteurs” Plenary sessions - debates Strong influence of Permreps and

interest groups lobbying Cooperation of MS and MPs

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CO – DECISION !

proposal Council

ECOSOCCOR

CP

EP

supportsReject with absolute

majority of MPs Proposal for modification

COM

legislation Council

EP

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„Conciliation” if no compromise

Supports EP modification

proposals (QMV)

legislation

Rejects prop.

Conciliation Committee (25-25 members)

CouncilCouncil

(QMV), EP (SMV)

No compromise

rejection

Compromiselegislation

COM

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Comitology (Commission legislation)

Council legislation gives the authorisation and stipulates the type of procedure

The goal: exectution of details Representation of MSs in Committees (different

rules) Standing and ad hoc Committees Reconcile position of Committee with COM Council rare, NO EP, ECOSOC, COREPER Informal influence of Council on comitology

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Committee types

Council Decision 1999/468/EK

Types (not anymore in Lisbon Treaty)

a) Advisory (I)

b) Management (II) – MARKETS

c) Regulatory (III)

d) Safeguard – (rare)

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Advisory (I)

Only consultation COM obliged to inform Committee Tobacco harmonisation – + role of

health related issues not under CAP in the first place – WHO FCTC !

MS comments taken on board in the interest of implementation

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Management (II.)

COMLegislation

Committee

Council

rejects (QMV)

modifies (QMV)

No decision, support

No QMV, or support

rejects (QMV)

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Management (II)

Committee votes against proposal with QMV, back to Council, if no opinion (no QMV for or against), or QMV the legislation will be published

Voting as in Council Typical procedure for market

management (every week/other week/month) – export subsidies, intervention measures etc.

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Regulatory III.

QMV for the passing of COM draft legislation proposal

If no QMV then Council Marked influence of MSs Typical in the case of veterinary and

phytosanitary issues and food security ( aspects are inter-related and influence market heavily – eg. Production costs for poultry enriched cages, world market competitiveness!)

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Legal acts in the Council and Commission

Council act authorises COM to work out the DETAILS (always attention to details!!!)

„Soft” interpretations in practice It is rather a compromised relation that

strict subordination – the end result has to function in practice – e.g. wine regulations in 479 and 555/2008

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Representative experts of MS administration

Representation of the country and not him/herself

Within limits of speaking note – often quick tel. Consultations in unexpected situations

Reservations, scrutiny Minutes of the Meeting (MS may ask

certain items to be included in writing) Compose a report in 24 hrs

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Reservations and scrutiny

Never to be used arbitrarily for tactical reasons!

„waiting reservation” „substantial reservation” „linguistic scrutiny/reservation” „parliamentary scrutiny” „Scrutiny”

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Reasons for interest groups

Decision makers often cut off from reality Addiction to Information COM is rather isolated and overloaded and needs

compromise already in the 1st phase thus to save time

EP limited awareness and expertise, and drive to meet electors’ demand

Legitimacy: consider the democratic deficit in the light of international competitiveness and growth – pressing WTO rules

To lobby for targeted „coupled” subsidies

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Interest groups

Horizontal or vertical?

• Multinational companies in different sectors, or umbrella organisations like COPA-COGECA

• Ad hoc coalitions to be more efficient and easier for the COM to counsult

• Sometimes expensive membership, but good provision with information

• Role of AMCHAM, Permrep colleagues etc.

…Under Construction…

Comitology after Lisbon (Management Committee)

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New TreatyTreaty of Lisbon amended existing Treaties,

entered into force 1.12.2009

Treaty establishing the European Community (EC Treaty) =>Treaty on the functioning of the European Union (TFEU)Treaty on European Union: same name (TEU)

Introduced new system of Commission powers (previously Article 202 of the EC Treaty), split into:

- delegated powers (Article 290 of TFEU) - implementing powers (Article 291 of TFEU);

The Comitology system under Council Decision 1999/468 will be changed, still applicable in the transitory period.

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Delegated powers A 290 TFUE

Article 290

1. A legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act.

The objectives, content, scope and duration of the delegation of power shall be explicitly defined in the legislative acts. The essential elements of an area shall be reserved for the legislative act and accordingly shall not be the subject of a delegation of power.

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Article 290

Legislative acts shall explicitly lay down the conditions to which the delegation is subject; these conditions may be as follows:

(a) the European Parliament or the Council may decide to revokethe delegation;

(b) the delegated act may enter into force only if no objection has been expressed by the European Parliament or the Council within a period set by the legislative act.

For the purposes of (a) and (b), the European Parliament shall act by a majority of its component members, and the Council by a qualified majority.

3. The adjective ‘delegated’ shall be inserted in the title of delegated acts.

Delegated powers A 290 TFUE

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What does this mean?

The legislative act must precisely indicate the limits of the delegation. No comitology, but the Commission intends systematically to consult experts from the national authorities.

The Council and the Parliament maintain the control on the Commission by revocation or opposition.

Article 290 of TFEU is immediately operational. However, the existing legislation needs to be amended to take into account the new system.

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Implementing acts A 291 TFUE

Article 291

1. Member States shall adopt all measures of national law necessary to implement legally binding Union acts.

2. Where uniform conditions for implementing legally binding Union acts are needed, those acts shall confer implementing powers on the Commission, or, in duly justified specific cases and in the cases provided for in Articles 24 and 26 of the Treaty on European Union, on the Council.

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Article 291

3. For the purposes of paragraph 2, the European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall lay down in advance the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers.

4. The word ‘implementing’ shall be inserted in the title of implementing acts.

Implementing acts A 291 TFUE

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State of play

9 March 2010: the Commission adopted a Proposal for a Regulation on new comitology.

The draft is subject to negotiations between the institutions.

Regulation is scheduled for entering into force in October 2010. Date of adoption will depend on the discussion in the Parliament and the Council.

The committee will be informed before entry into force of the Regulation once the negotiations are concluded.

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Delegated or Implementing

Contentdelegated: quasi legislative (amend or supplement)

Vs.

implementing (executive)

Proceduredelegated: Commission + scrutiny by EP and

Council

Vs.

implementing: Commission with MS committee

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Example

Council Regulation 1234/2007 would be now « basic act »

Commission Regulations:

1272/2009 (public intervention)

1173/2009 (designation of intervention centres)

1249/96 (cereal sector import duties)

must be examined to check if their provisions would qualify as implementing or delegated.

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27 July 2006: COM puts forward proposal in MC introducing new parameters (relative weight or hl weight) for maize intervention with the reason of quality assurance and preservation

HU objected – 90% of maize production affected + HU gave 85% of Community maize intervention that year 18 October 2006: COM passed EC Regulation 1572/2006 (in force from 1 Nov)

The maize - case

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Hungarian Considerations in making a court case:

• EU Court usually in favour of COM (defence of Community Policies)

• No direct economic advantage – we only had a good harvest

• Are we professional enough to step against COM? • First own initiative and it is an abolition straight

away!• 60 days…

The maize intervention case

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Our reasons:Article 230 of TEULack of authority for COMBreaching of procedural rules (justification, procedures)Breach of trust, Legal security, proportionality Misuse of authority from COM – real reason is the large intervention stock and not the worry about quality !• Fast procedure was requested!!


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Partial abolition:Can this be separated from the rest of the Regulation?

COM: Cannot be separated because decreasing humidity is linked to increasing relative weight

HU: Can be separated because objectively it does not alter the essence of the Regulation

Court on preamble: quality criteria and relative weight do not go together hence can be separated; COM also refers to it in its case material as „quality standard”


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Breach of trust, legal security, proportionality: HU: COM changed parameters just before the intervention

period and could not be foreseen by the producer who had already made investments, the new parameter is not used in Europe, producers do not know which seed to use

COM: goal is to stop deterioration of quality and preserve sale chances, only so can price niveau be secured, there is a demand for maize, 12 days suffice, 2005/06 was not to be foreseen for intervention

Court: Accepted Hungarian reasoning (like it did in the Crispoltoni case earlier), The position of the COM is not well founded, and it failed to meet its obligation to provide reasons for early force. It cannot be addressed properly afterwards therefore it has to be abolished.


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Lack of authorityHU: Not an adequately accurate parameterRelative weight is not a question of qualityNo such European standards exist

COMCom may do it as delegated power from CouncilIt is relevant in an effort to improve qualityIt is a usually applied methodMaize nutritional value depend on relative weight

Court: Role of COM is to follow up on market changes, COM case rejected


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Misuse of authorityHU: Real goal was to reduce intervention stocks

COM: disagrees and said that relative weight influence quality

Court: COM did not support with sufficient evidence its allegations and found itself in contradiction on several occasions. The regulation is based on an obvious error concerning proper consideration therefore it is not necessary to carry out an in-depth analysis on misuse of authority and the non-compliance with procedural details: The new parameter has to be abolished retroactively!


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The „Rozé case” 2009

Early 2009: EU COM drafted a proposal to authorise mixing red and white wines to obtain rosé wines, which was not the practice in the EU so far.

Problem: The International Wine Organisation (OIV) authorises mixing red and white wines and is done elsewhere in the world

Market facts:Rose wines 10% of world consumption, but the demand is steadily growing. (Formerly these wines were regarded low class)

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Market facts:France is the biggest producer followed by Italy Spain, USA. Also an important issue for Hungary.

Hungary objected to the draft but the COM passed it (Small Member State Problem)

HU contacted the French Agricultural Chamber and alerted FR producers who knew NOTHING about this! (6000 producers in Provence)

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Consequences of COM plan:French Minister of Agriculture wrote official letter to Commissioner Mariann Fischer Boel to abandon idea.

Issue sparked big debate in the EP, French MPs handed over a glass of mix-wine to MF. Boel. France started to look for allies to block COM draft (eg. HU, DE and others)

Problems of differenciating the mix wine under another name finally made the Commission to withdraw its proposal.

Lessons learned: Battle won but the war is not over yet (OIV and WTO problems) but always go to the end to use the existing possibilities, formal and informal to reach your goals!

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Electronic ID of sheep

Original idea born in 2003, consultations began (UK, IE, DE, NL, RO agrees with optional and not compulsory)

Council Regulation 21/2004: Electronic ID in sheep as of 1 jan 2008. (COM review in 2007 – HU to shift 2 yrs on application - 1560/2007, 933/2008 modifying Annex - simpler ISO for tagging)

Lobbying by Sheep organisation of Hungary and of other MS within COPA-COGECA

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Electronic ID of sheep

23 March 2009 AgriCouncil (AOB): HU requests optional electronic ID for lack of technical and financial backgroundCOM: No, but bilateral talks OK to amend Annex and interpret in a favourable way – finally consented exemption of sheep under 6 month with only ear tags. (21 April 2009)1 July 2009: COM presented proposal in SCOFCAH meeting to allow for derogation until end of 2011 – only under 12 months is exempt (CZ, SI, SE, IE, DK, AT, DE, NL, UK)14 July 2009: COM withdrew in next SCOFCAH – legal problems – (6 months - with HU proposal) – old proposal voted!

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Electronic ID of sheep28 July 2009: Discussion in Ministry of AG with professionals

and administration: 1. Continue lobbying for exemption of e-ID under 6 months,2. investigate Article 26 and 31 of Council Reg 1698/2005, 3. 3. Prepare tendering procedures for introduction from 1 Jan

2010Aug, Sept 2009: Ag.Minister letter to 12 supporting MSs, and

explanation requested from COM legal service – Answer: COM cannot modify the integral part of a Council Regulation (6 vs 12 months for breeding animals), therefore the comitology procedure is not applicable in this case – all animals have to be e-identified

20 Nov 2009 Agricouncil: HU, CZ, SK joint proposal with support of BE, BG, DE, RO, IE, PL to go down against IT FR ES and COM: NO QMV for modification – all animals leaving borders must bear tags

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I don’t even know about tomorrow let alone after 2013…

…but apart from joking the following points are worth consideration:

• Sustainable policies

• Water scarcity (Litres of water for producing 1 kg of product – wheat, milk, meat etc)

• Rising demand for food

• GMO as a seriously considerable option

• Changing eating habits (more meat in developing countries

CAP decisions after 2013

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The EU 2020 strategy – Employment, research and innovation, cliamte change and energy, combating poverty, education

• After 2013 a likely shift from direct payments to Rural Development and emphasis on the creation and remuneration of public goods.

• Subsidies will move away from coupling there will be no historical references to unjustly conserve the situation

• Food – energy – environmental sustainability (biodiversity) as central elements to reconcile


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Common Agricultural Policy

• Will it stay common or partly re-nationalised?

• After crisis no more net support from DE – unchanged figures in budget

• Smaller budget for an increasing number of Member States First: how much? Second: for what purpose?

• More efficient policies sucking away resources (Environment R+D+I) to keep in line with global competitors


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Technical progress, globalisation and integration of economic and monetary systems will probably entail more centralised decision making with as much subsidiarity as is necessary to address local and regional issues. – Will „think global and act local” work?

This will further the role of the Commission and present a simplified and coherent decision making structure more transparent for the elector citizens.


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THANK YOU FOR THE ATTENTION THANK YOU FOR THE ATTENTION

László Sárecz

Department of Agricultural Markets

Ministry of Rural Development

[email protected]

Documents

1 Decision making and agricultural markets Role of Member States, After 2013 perspectives Gödöllő, 28 June 2010 László Sárecz