Committee on the Internal Market and Consumer Protection Ordinary meeting
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IMCO European Parliament
Follow its sittingsRegina Doherty
Impco's responsibility is to ensure that, from a single market perspective, we get this right. Thank you, Chair.
Christian Doleschal
Thanks, Regina. And now we'll give the floor to them. We start with Pierre.
Thank you.
Pierre Jouvet
You, Chairman. As you've noticed, I'll be speaking French. I'd like to start by thanking the rapporteur for her draft opinion on a text that has been put forward at a decisive moment for the European Union. The competitiveness fund we'll be talking about today represents more than €4 billion of investment through to 2035. Obviously, a very large sum, commensurate with the challenge faced, as I set out in the Draghi reports.
We are faced with growing international competition, persistent strategic dependencies, and distortions within the internal market. So we've come to a turning point from both an economic and industrial point of view. The €409,000,000,000 fund could, as I said, represent a turning point, enabling us to move towards a more ambitious European industrial policy and better focus on the needs of small and medium-sized businesses. We agree with the diagnosis. Improved competitiveness is necessary, but we shouldn't just be talking about means.
We also have to ensure that we chart a new political course to give greater certainty to our businesses. For the S and D group, competitiveness can't just be boiled down to cutting costs and deregulation at the expense of the quality of our standards. As we know, Europe is not taking part in a race to the bottom. Our competitive edge is widely recognized and must be further honed, while at the same time becoming fairer and more sustainable in the face of world competition. Improved competitiveness must bring about genuine improvements in our citizens' lives.
It should enable us to set out an effective new strategy and promote sustainable development. It's based on people, their skills, innovation, and support for innovative industries. The fund must be channeled into responsible and sustainable growth. We are in favor of a clear commitment to Made in Europe to strengthen our industrial base and reduce dependencies, which are a major barrier to investment. These funds must provide European businesses and citizens with genuine advantages.
It's not just a business plan. It should help all businesses without discriminating between businesses of different sizes. That's important. It must be fair and genuinely accessible, in particular, as the reporter said, to SMEs, which are, as we've heard, the beating heart of the European economy. We are in favor of genuine simplification for beneficiaries, but this simplification must strengthen legal certainty rather than simply serve as a way of circumventing European rules.
Governance of the fund must guarantee equal treatment, democratic scrutiny, and effective assessment of its impact. Flexibility is, of course, necessary in times of crisis. At the same time, it must be accompanied by safeguards to ensure that our economic players have genuine long-term prospects and visibility. In conclusion, competitiveness is not an aim in itself if it is not backed up by tools to give us healthy growth. We are living on a planet that we are destroying.
Our workers are exhausted. We have to try to change that. We have to create new prospects for Europe, create quality jobs, make our industry greener, and strengthen our sovereignty. We are willing to work with the other groups to ensure that we have an effective instrument enhancing fair and sustainable European competitiveness.
Mister Kobin from BFE.
Tomáš Kubín
Thank you, Cheryl, for speaking the Czech language. So, straight up.
So, to the point, I think that we have to introduce mechanisms that will ensure geographical balance because otherwise there will be more gaps in terms of competitiveness among member states. Applicants from better-developed economies have advantages to get money, not only those who are excellent in business, but also those who have the skills to be able to apply for funds. So, apart from the fund, it should be designed for companies that have less experience with governance and management of funds. So, if we do not introduce a national envelope, the fund could increase gaps and differences. Also, we have to introduce clear criteria because otherwise, there is a risk that bigger corporations will get most of the fund and not smaller companies and startups. And the Court of Auditors highlighted in its report that the fund is not clear enough with respect to goals, targets, and responsibility.
So the fund should contribute to the added value of the European Union, which we so need for the next framework, which is not properly defined. The added value, according to the court, can be measured only if it is clearly defined. And last but not least, if we wish the fund to contribute to competitiveness, it must reflect the real needs of companies. That means it must be transparent in its procedures to minimize administrative burden, with a focus on small enterprises. And also, it should introduce minimum limits to involve small businesses, regardless of whether the fund includes such specific activities for small businesses or not.
Christian Doleschal
Thank you, and I'm looking forward to cooperating with you.
The question is: is someone from the ECR? No. Then we go to the renewal for Mr. Mine chef.
Nikola Minchev
Thank you very much, Chair. I'm speaking on behalf of our shadow, Morten Lokegaard. From a so dear chair, dear colleagues, from a Renew Europe perspective, the European Competitiveness Fund will only succeed if it actually changes how companies experience Europe. Today, access to EU funding is too slow, too complex, and too fragmented. For startups and SMEs, the main barrier is not ambition; it's administration.
Our amendments, therefore, focus on one core objective: turning the ECF into a fast, digital, and business-ready instrument. First, the implementation of the once-only principle. Companies should never be asked to submit the same information twice. The fund must actively use existing data from national registries and EU systems. If Europe already has the data, businesses should not bear the administrative burden.
Secondly, speed must become a legal reality, not a political slogan. For high-impact programs, especially for startups and SMEs, funding decisions must happen within clear and binding deadlines. In global tech competition, timing is decisive. Third, we need a genuinely digital access model. Integration with the European Digital Identity and the future Business Wallet can transform how companies interact with EU funding, from static portals to seamless, secure, and reusable interfaces.
Fourth, access must be designed around the users. A dedicated startup gateway would give young companies a single entry point to funding, advisory services, and investors, instead of forcing them to navigate institutional complexity. Here also comes the design of the 28th regime. Taken together, these changes are not technical tweaks. They are about credibility.
If the ECF is to strengthen European competitiveness, it must be faster than our bureaucracy, simpler than our current programs, and designed for companies, not administrations. Thank you.
Christian Doleschal
Thank you very much. And now, we come to Madame Giese from the Greens.
Alexandra Geese
Thank you very much, Chair. And Madame Reporter, first of all, thanks a lot for the draft report. Our group approaches the European Competitors Fund in a very constructive spirit because we believe it can really make an important contribution to rebuilding a competitive economy in Europe. We see this as a chance. I think we also need other instruments because, as the public consultation by the Commission shows, one of the reasons we have a lack of innovation and competitiveness is widespread underinvestment.
And that is particularly true for the digital window and digital sovereignty. So, first of all, we will focus on the sovereignty aspect. We know that there are a number of choke points where our companies are highly dependent, and our whole economy is highly dependent on foreign-controlled infrastructures. Just to mention the cloud market, for example, enterprise software, social networks, and marketplaces, we all have gatekeepers that our companies depend on and that are not in our hands. And therefore, the ECF must explicitly strengthen European tax sovereignty across the entire digital ecosystem, which includes not only physical infrastructure, but also services, platforms of all kinds, and obviously, software, applications, and artificial intelligence.
Secondly, we clearly have to prioritize investment in European-owned and European-governed digital capacities across the value chain, and also make sure that if we invest European taxpayers' money in start-ups and scale-ups, they have the possibility to find all the capital they need in Europe and cannot just exit to the U.S. S, taking that money away. Secondly, competitiveness must deepen and not fragment the single market, but a competitive Europe is not one that cuts environmental or social standards; it's one that leverages them as innovation drivers. I think the BALANCE Act is to bring that together with simplification, which really makes access for European organizations and businesses to European funds a lot easier. And I look forward to working with the other shadows on that.
But we should not forget that one of our competitiveness factors is the high quality of life that citizens experience in Europe, for example, with a higher life expectancy than in the U.S. S. From our perspective, it's also important that the ECF supports micro companies, SMEs, and social enterprises in becoming more sustainable, as well as improving their ability to benefit from the EU single market. And thirdly, if we wish to achieve digital leadership for the European Union, the ECF must support interoperability, open standards, open specifications, and open source solutions, which are really our chance as a European network of enterprises to stand up to the competition. We will also table amendments that ensure the ECF contributes to open ecosystems to reduce vendor lock-ins, enhance cybersecurity transparency, and foster SME participation, strengthening in this way the innovation capacity across the single market.
And obviously, if public money funds digital infrastructure, it must also generate public value. So, I look forward to working constructively with the rapporteur for this opinion to ensure that the ECF becomes an efficient instrument for the single market and consumers. Thank you very much.
Christian Doleschal
Thanks a lot. And I will give the floor to the Commission, Ms. Skonjesna, head of the Growth Unit. There's the floor.
Speaker 9
Thank you, Chair. Thank you, rapporteur, honorable members. Thank you. I would like to thank the INCO committee for the draft opinion on the European Competitiveness Fund and welcome your emphasis on SMEs, on crowding in private capital, on the single market, and resilience. Indeed, raising European competitiveness has become a top priority, a competitiveness that encompasses innovation, our capacity as the European Union to deliver productivity growth, higher living standards, as well as resilience and investment, in particular in critical sectors, digital and green growth. And, of course, this is where your Competitiveness Fund will support the best quality projects to help us achieve those aims.
I would like to echo what the rapporteur and honorable members said on SMEs. For us, it's not a bad, arbitrary line and technical tweak. Indeed, we have to deliver on the much-needed simplification for SMEs. This is our ambition: by bringing the 14 programs together, one single rule book, and one single gateway where everyone can access information about funding opportunities. This is also where we want the European Competitiveness Fund to provide a user-centric experience targeting our SMEs and their masses.
This was said with the beating heart of our economy to ensure that they are best equipped to benefit from the program. And these are the elements that we see will help in that: the simplification, the single rule book, and the single gateway. One place to find information to navigate the European funding project advisory is by helping SMEs and companies prepare their projects, ensuring that we have project pipelines across the European Union, and also providing support on the ground. Our EU for Business network offers business advisory, partnership, and capacity-building services for SMEs.
This is a message from the interpreters. I would be grateful if the speaker would slow down. She's speaking far too quickly from a written text. Would somebody ask her to slow down, please?
This fund will also include dedicated activities and calls for SMEs, as well as small meetups to allow them to innovate, grow, and scale up. And lastly, your emphasis on crowding in private capital here as well. We are the European Competitiveness Fund. We'll use the capacity of our investment instruments to ensure that we crowd in and facilitate access for SMEs across the European Union. Thank you.
Christian Doleschal
Thanks a lot. Yes. Thank you all for the constructive exchange today. The discussion has provided important insights and helped clarify key aspects of the proposal. And now we make a short break because, oh, we go back to the rapporteur.
Kafir, very.
Regina Doherty
Thanks, Cher, and thanks to everybody for sharing their views. I think it's great to hear everybody's ideas and see the cooperation. And I know we're all committed to working for the single market to make sure that we use this particular opportunity to unlock all the issues that we know are causing people such difficulty in creating and scaling up businesses across Europe. Look forward to working with everybody.
Christian Doleschal
Thanks a lot. And now, a short break? Yes. And now we'll make a short break until 10:00. Yes.
Dear colleagues, good morning. The weather is fine, and we will start directly with our vote. We will vote on the draft opinion for the CULT committee on its own-initiative report called "Impact of Social Media and the Online Environment on Young People." The vote in the CALD Committee is expected to take place on the 4th or 5th of May. We have 274 amendments tabled, and 10 compromise amendments have been drafted.
And now I will give the floor to the rapporteur who will represent it for Mr. Saliba.
Alex Agius Saliba
Thanks a lot, sir. I'm not the rapporteur. Here I am replacing Laura Ballerin, who right now is on maternity leave, and therefore, I will be reading a statement on her behalf. First of all, Laura would like to thank the SND staff, the secretary of VIMCO, her team, and all the shadows for the good collaboration, good work, and dialogue on this very important file. She is very happy with the outcome of this report, as it puts forward the main priorities of our Imco committee regarding the protection of minors online, aligning this text with the yearly report voted last November.
The main points for the EMCO committee introduced in this opinion include, first of all, a call for the establishment of a harmonized European digital age limit of 16 years, under which access to online social media platforms should not be allowed unless parents or guardians authorize it. A call for the same age to apply to video sharing platforms and AI companions, which present risks to minors. The report also calls for a harmonized European digital age limit of 13 years, under which no minor can have access to social media platforms. The acknowledgment that some member states have taken important action on age assurance mechanisms, and the call for a European approach to an age verification solution. Also, the call on the commission to strengthen the protection of minors online through the upcoming Digital Fairness Act.
The call to the commission is to strengthen the legal framework to comprehensively address influencer marketing and to consider introducing personal liability for senior management in cases of serious and persistent non-compliance. The welcome to the Commission's announcement about the creation of a group of experts for the protection of minors online, the urgent need to ensure effective and coherent implementation, enforcement, and consistency of your legislation with a special focus on the protection of minors online, the encouragement to the Commission to propose a CPC regulation review and bestow the Commission with centralized investigative and enforcement powers across the EU in cases of widespread infringement of EU consumer laws, a signal on the lack of comprehensive legislation regarding video games, and also urging the Commission to prohibit elements such as loot boxes and other randomized content in games that are intended for minors. Calls on the commission also to address the risks linked to in-app currencies, microtransactions, pay-to-progress, and pay-to-win mechanisms that are accessible to minors. I hope that this text will be supported today by all the political groups and that we can still work on this very crucial issue of protecting our minors online.
Thanks a lot.
Christian Doleschal
Thank you. Thank you very much. And now, we will proceed to the vote. We have to make a test vote. Are you happy that it's 16 degrees today?
When you are happy, you have to vote in favor.
It's bad news. Could it be? So.
Let's go out on this sunny morning. Pablo is not happy.
You change. He's used to 36. That's fine.
Okay.
Christian Doleschal
Okay. Most are happy. And now we start with compromise amendment one. Who is in favor? Who is against it?
Abstention, then adopted. We will compromise on amendment eight. Who is in favor? Against? Abstention.
Adopted. Now, we come to compromise amendment nine. Who is in favor? Against. Abstention.
Adopted. And then we go to compromise amendment 3. Who is in favor? Against. Abstention.
Adopted. And now, we go to compromise amendment 2 on the next slide. Who is in favor? Against. Abstention.
Adopted. Now, we come to compromise amendment 5. Who is in favor? Who's against it? Abstention.
Adopted. Now, we go to compromise amendment 7. Who is in favor? Against. Abstention is adopted.
Then we come to compromise amendment 4. Who is in favor? Against. Abstention is adopted. Then we go to compromise Amendment 6.
Who is in favor? Against. Abstention is adopted. Then, we come to compromise amendment 10. Page 14.
Who is in favor? Against. Abstention is adopted. And now, we come to the final vote. We make a roll call vote.
Who is in favor? We call it the roll-call vote. Perfectly. Finished. I have a large majority.
Thank you very much for this vote. Very quick and easy.
Very quick. So, was the prognosis of Andre Ashwa correct?
Perfectly.
Christian Doleschal
But we were prepared.
We are prepared. So, dear colleagues, we will come to our next topic on the agenda: the interim report in view of the consent procedure on a broad package of agreements to consolidate, deepen, and expand the bilateral relationship with the Swiss Confederation. AFET is a responsible committee, and IMCO is providing an opinion under rule 511. The rapporteur is Mr. Andreas Schrad. The deadline for tabling amendments is March 17, and the vote in IMCO is scheduled for June 2.
Rapporteur, you have the floor for a maximum of five minutes.
Andreas Schwab
Thank you very much, Chair. Colleagues, the European Union and Switzerland have talked for many years about how their existing relationship should be deepened. During the corona crisis, we realized that citizens, particularly those in border areas, are severely impacted by unresolved legal issues. And citizens in Switzerland should not be worse off than they are elsewhere. So, the Confederation has used the services of the Federal Council.
There have been long negotiations, and now we have a new package of bilateral agreements that will be signed on Monday in Brussels to continue this close collaboration. The goal is clear. Relations with Switzerland, Swiss partial participation in the internal market: we want to continue those, give legal certainty, and continue to work together as like-minded partners. In a world that is now in turmoil, it is very necessary that we work together. What's important?
There are four points, and they all relate to the European internal market, so it's very important that we discuss these matters here in this committee. A new way of settling disputes. There is a dispute settlement body, which can be called in when bilateral agreements are questioned. There is to be more clarity with regard to state aid so that companies in Switzerland are refused or allowed state aid in the same way as in the European Union, to make competition fair. Furthermore, it should be possible for EU citizens to work in Switzerland if there are vacancies available.
And.
Andreas Schwab
Fourthly, when it comes to the free movement of persons, people who have worked in Switzerland should be allowed to continue to reside there if they meet the conditions. These rights and duties make it clear that what we have here is not an à la carte menu. We need a balanced framework. The topics that I've addressed have to be solved in a way that is fair to both sides. A Swiss contribution to the Cohesion Fund will make it possible to ensure solidarity between the 27 member states and the Swiss Confederation.
It's also important that we have a dynamic framework in the future because when a country joins the European Union, they have to comply with all 20 AKI. Now, this agreement was signed at a moment in time, but it has not been changed since. There has been a need to adapt. Differences have to be settled. So, we need to do all of that, and it's a very positive thing.
And it will mean that the delegation for relations with Switzerland will play a greater role in the future because the Swiss Confederation will involve its parliament more in these talks. That's all I can say at the moment, Chair. I think we have found a balance between rights and duties. We have improved things for border regions and created the potential for growth. And this is all of direct benefit to citizens.
I therefore think that Parliament can sign this agreement despite the fact that, in some areas, there is a need for more discussion, such as having to announce workers four days in advance and the integrity of the internal markets. It's important to have a reliable relationship with our neighbors. I look forward to the discussion. Thank you.
Thank you.
You. And you're right on time.
Rosman from S&D.
Thank you.
Elisabeth Grossmann
Colleagues, first and foremost, I would like to thank the rapporteur, Andreas, for all of the work that has been done and the balanced approach. Relations between the European Union and Switzerland have grown very close over time, and they are very important for the functioning of the internal market, particularly in times of global turmoil. It's important to be able to work together on the basis of clear rules, and in order to do that, we need a stable legal framework which creates trust and stability. And as far as Imco is concerned, I think it is to be welcomed, and this is, after all, the goal of this cooperation. It's important to deepen it. This is not about new relationships.
It is about anchoring existing structures and ensuring predictability, and what is key is that the participants should have clear rules and make a contribution based on the benefits that they draw. And it's very important that high social standards should be preserved. They should not come under pressure. I will therefore be tabling some targeted amendments on that subject. It is also important, and you mentioned this, to have dynamic alignment, market surveillance, and a functioning dispute settlement mechanism.
If the implementation of these things is delayed, it leads to legal uncertainty, a distortion of competition, and disadvantages, particularly for SMEs. That is why we need clear competencies, good implementation, and enforcement, even if compensatory measures are necessary. We always need clear rules on competition and state aid, and that need has been taken into account. And consumer rights have to be enforceable too.
Elisabeth Grossmann
We can achieve that through having the right mechanisms. Looking to the future is very important. We have to ensure that the internal market in the digital area can continue to develop in a dynamic way, and the European Union is increasingly tabling international standards. Our deeper cooperation with Switzerland should not only reflect the current legal situation but also make continuous alignment possible, and I am pleased to say that has been addressed. And this will ensure that new requirements with regard to digital products compliance assessments do not become additional hurdles distorting competition or creating regulatory gaps.
So, thank you once again for this balanced report. Market access can't be a one-way street. I look forward to our continuing conversations. Thank you.
You.
Ernő Schaller-Baross
Thank you, rapporteur. I'll now switch to English.
Rapporteur. First of all, I would like to congratulate Mr. Schwab on his draft opinion. I believe the draft person has delivered a true piece of work that clearly reflects the importance of EU-Switzerland relations for the European Union. As shadow rapporteur for the Patriots, I would like to underline that mobility between the EU and Switzerland has genuine internal market relevance, particularly in regions where cross-border work and service provision are part of everyday economic life. In this context, ensuring legal certainty for employers, workers, and consumers is highly important.
For a group, improved predictability in the recognition of professional qualifications is essential. We stress that clear, predefined procedures are indispensable to facilitate cross-border service provision and to support small- and medium-sized enterprises that rely on skilled labor. I would also highlight that conformity assessment recognition is a core instrument of the Internet market. They reduce technical barriers, prevent duplication of testing and certification, and are particularly critical for the competitiveness of SMEs, which cannot absorb repeated certification costs. Finally, in agreement with the report, I believe that strengthened market surveillance cooperation within the mutual recognition framework must be emphasized.
Effective cooperation is indispensable to ensure product safety and to avoid internal market fragmentation that would reintroduce de facto barriers to trade. While some issues, like market surveillance and state aid, could perhaps be further elaborated, I believe that Mr. Schwab's opinion covers the key internal market aspects. The direction is right, and we stand ready to cooperate fully. Thank you for your attention.
Christian Doleschal
Thanks a lot. Now I will have a look to see if Mr. Mueller is here or if someone can replace him. No? Then we go to the renewal to miss Henriksen.
Anna-Maja Henriksson
Yes. Thank you, Chair, and dear colleagues. I speak on behalf of our news reporter, Veronika Ostrinola. First, I would like to thank Andreas for a solid draft opinion. It rightly emphasizes the central importance of the single market, the free movement of persons, and the specific relevance of cross-border regions.
For the new Europe, these elements are fundamental not only for workers but also for SMEs and local businesses that depend on legal certainty and predictable rules. This package contributes to strengthening the EU's economic resilience at a time of geopolitical uncertainty, and we welcome the approach of dynamic regulatory alignment. From our perspective, however, it is equally important that the framework is future-proof. The internal market today is increasingly digital. I, therefore, intend to table amendments that underline the need for coherence with EU digital legislation and stronger cooperation in the digital economy.
In addition, we welcome the inclusion of health cooperation in the broader package. Health policy has clear internal market implications, particularly in relation to product safety, supply chains, and crisis preparedness. And I will therefore table targeted amendments in this area as well, with a strong emphasis on the medical workforce. Overall, Renew Europe supports this balanced and rules-based package, and we look forward to constructive cooperation on this file. Thank you.
Christian Doleschal
Thanks a lot. And now, I ask a question. Is there anyone from the Greens, the Left, or the ESN who wants to join in? No? Then, we give the floor directly to the commissions.
Mister von Lingen has the floor.
Speaker 24
Thank you very much, Mr. Chairman, honorable members. We very much welcome the draft opinion that Mr. Schwab has prepared, as well as the interventions today. I think they identify the key aspects of the package and also the purpose of this broad package of agreements. And central to this package is the internal market, and that's why I would like to highlight a few elements here that we think are particularly important to have in mind. Because the internal market is actually one of the specificities of this relationship with Switzerland.
It wasn't at the beginning. We started in 1972 with a classical trade agreement. But over the years, and as Switzerland rejected joining the European Economic Area in 1992, we have developed bilateral agreements which give partial access to the internal market. As it was done incrementally, it was not done perfectly. So, we had to modernize these agreements exactly as members explained today to make them future-proof and ensure that, at all times, we have a level playing field and legal certainty.
And as the internal market is really a key to Europe's competitiveness, resilience, and also prosperity, it's important that if we extend the internal market, we ensure that everybody who participates in this market abides by the same rules. It's true for the 27 member states. It should also be for all those third countries that participate, whether it be Switzerland, and it has also been the case for the past 30 years with the EEA. So, what is key to ensure that we follow the principle of same market, same rules? First, institutional provisions.
And here, some concepts are very important, and they're rightly identified in the opinion. Dynamic alignment: same rules over time. Uniform interpretation: the same rules are interpreted in the same way. Dispute settlement so that we can resolve issues of difference in interpretation or application, with a role for the Court of Justice when we're interpreting the very same rules, and proportionate compensatory measures in case there's a breach of one of these rules, which means that the balance of these agreements has been affected. But these compensatory measures, I think, are also recognized, need to be proportionate, and they will also be supervised by an arbitral tribunal.
These institutional provisions are also accompanied by participation in decision shaping. So, we'll also be able to hear the voice from Switzerland. There will also be a possibility for Switzerland to participate in agencies and to be connected to IT systems, and they will also make a commensurate financial contribution as members do through the EU budget and the EA states do today. The second element is also the flanking policy, accompanying it to ensure that there really is a level playing field. And here, I would like to refer to state aid in air and land transport, but also in the electricity agreement, environmental rules in the electricity agreement, competition rules, consumer protection rules, and the air transport agreement.
A third element, which is important when we're talking about the internal market and making sure it functions well, is a contribution to cohesion. A properly functioning market cannot work when different countries are at different levels. And the leveling up has really been a key element to make sure that the internal market can work. And this time, we will have an agreement that will ensure a regular and fair contribution by Switzerland to the European Union's cohesion. What is also important here in this context is that we should look, of course, at the pure internal market agreements.
This is the MRA. When it comes to transport, it's air transport, land transport, electricity, but also the importance of the free movement of persons. It's not only about the citizens, but also the service providers, the posted workers, and the professionals who work on both sides of the border. And here also, it is very important that they abide by the same rules. Finally, a point that was made quite clearly is the importance of the balance of rights and obligations within each of the agreements, but also overall in the package.
This package is a wide but balanced package. And it is proposed to the council and to the parliament as a package. So, finally, one last point: we also look forward to having a more structured parliamentary cooperation with the creation of a joint parliamentary committee. We look forward to engaging with you, and we think it's particularly timely that the parliament is engaging in this discussion now on its interim report, as the Swiss parliament itself will start its work, hopefully very soon, over the next month. Thank you very much.
Christian Doleschal
Thanks a lot. And now I will give the floor to the rapporteur, Mr. Schwab.
Andreas Schwab
Thank you very much, sir. Chairman. I'm very grateful to all my colleagues, and especially to Mr. Lingen from the European Commission, who has been following this dossier for years now. He has also been experiencing some ups and downs in these discussions.
And therefore, I think, first of all, we are all very glad that we may come here to a first conclusion. Having said that, Mister Chairman, that doesn't mean that everything looks perfectly pretty. Because, as my colleagues in their contributions—Miss Grossman, but also Miss Ericsson, Mister Schaller—have already mentioned, for sure, we could shed some light on very specific questions that still can be discussed. And I won't dwell on this now because I think it will take too much time. But I think, objectively, there are a lot of discussions that we can have that also touch a bit on the basics of the European Union and its rulebook itself. But as a conclusion, we can say this is a very good takeover and cooperation that we can have here. Therefore, we should give this package our full support, noting that there will be lots of work in the future to make sure that Switzerland and the European Union work closer together.
Electricity and health have been mentioned. There will be plenty of other issues that will come up. But with this rule book here, with that bilateral agreement package number three, we can focus on the key questions. We can take the issues upfront, and that's what we need in these difficult times. And therefore, I would like to thank all my colleagues, waiting for their amendments, and then for a final discussion and their vote here in committee.
Thank you very much.
Christian Doleschal
Thank you very much, dear colleagues, representatives of the Commission. Thank you all for your valuable contributions and for the thoughtful exchange of views today. I would also like to thank the Rapporteur and the Shadow Rapporteur for their efforts in preparing the groundwork for Parliament positions. With that, I conclude this agenda item and formally close the discussion. Thank you very much.
And now we will come to our next topic on the agenda: mapping the funding gaps in market surveillance and customs informants' perspective of the new MFF. It is my pleasure to welcome our speakers today and to thank you for joining us to present the findings of your study from the perspective of the new MFF. As indicated, the presentation will first outline the main conclusion and recommendation of the study. Following this, the floor will be opened to members for questions and comments. And now I give the floor to our speakers, Professor D'Angelo and Professor Tovo from the University of Bologna.
You have up to 10 minutes.
Speaker 26
Okay. Thank you. Thank you, Mr. Chairman. Thanks to all the Inco members for being here. Today, we would like to share with you an overview of the study we delivered on the mapping of funding gaps in the market surveillance and customs enforcement authorities.
Well, this study has been conducted by the University of Bologna. Next slide, please. Next slide, please. Okay. Thank you.
This study has been conducted by the University of Bologna. And here, in this slide, is the overview of our study and the research aims. So, we would like to review the existing EU and national financing arrangements in order to identify structural imbalances and particularly operational challenges that are currently present for the market surveillance authorities and customs authorities. This would allow us to assess and identify some policy options for complementary funding mechanisms, particularly in light of the proposal of the new MFF. So, some details on the scope and the matter.
So, we investigated five member states, particularly Italy, France, Spain, Poland, and the Netherlands. And with the rationales, there are reasons behind these choices for volume in imports and for the geographical co-location of the countries. We conducted mainly test research, and we also asked for clarification from the market surveillance authorities and customs authorities. Next slide, please. Let's start with the state of the art.
What is the state of the art in the member states? Next, please. Okay. Okay. We identified some structural imbalances, and the starting point is the institutional framework.
It is a very decentralized institutional framework. As we all know, the market surveillance authorities and the customs authorities are national authorities, very often embedded in the public administration, in huge public administrations of member states. They are national bodies, essentially, but they have to perform tasks of enforcement of the EU law. So, the keyword, particularly for the market surveillance authority, is fragmentation. The scenario is very much fragmented within the EU countries for market surveillance authorities.
There is limited integration. We hope that this is going to change, particularly in the customs field, with the forthcoming EU customs agents. Let's move on to the existing funding models. So the bulk of the funding of the customs authorities and market surveillance authority is national. These authorities are essentially nationally funded for the running operational costs, and the criteria for the allocation of budgets to these authorities are essentially linked to the number.
No. No. Please stop the slides. Our national bodies. We do have some institutional and indirect funding of these customs authorities.
We do have, as we may know, the percentage of retained customs duty. 25% of the customs duties collected by the customs authority is retained by the member states. We also have a limited direct EU contribution in the current MFF. There are some programs funding measures for customs activities and market surveillance activities. We have a single market program.
We have a customs program. We have a custom control equipment instruments program. However, there are some structural imbalances, context-driven structural imbalances, because we identified three major operational challenges for customs authorities and marked surveillance authorities. The first one, as is well known by this European Parliament and particularly by this commission, is the steep rise in e-commerce, especially in B2C e-commerce. There is a huge amount of low-value parcels shipped from outside the EU within the internal market directly to final consumers.
And this is a huge volume and number of small value parcels, very difficult. It put a burden on the shoulders of the customs authorities and market surveillance authorities. In this graph taken from a European Commissioner's report, we identified this steep rise. It is very well known. It is without doubt a reality, a historical reality.
Then, we identified two more operational challenges linked to legal measures, we may say. The first is the CBAM, which stands, of course, for Carbon Border Adjustment Mechanism. This put another layer of workload on customs authorities and market-based authorities, even though with the omnibus regulation, the introduction of CBAM and the full introduction of CBAM has been delayed and postponed. The third operational challenge identified is connected to the EU restrictive measures with the Russian Federation and Belarus. This essentially is also a trade ban with these countries.
And, of course, this put another layer of workload on customs authorities and market surveillance authorities. Next, please. What's the outcome of this sketched scenario? The outcome is very clear. There are funding gaps.
There is a misalignment between the existing funding arrangement and the current actual operational challenges for the customs authorities and the market surveillance authorities. They do have stable resources, but they are facing increasingly heavy workloads. So, the funding gaps are context-driven. It is not clear because there is no EU benchmark. There is a lack of an EU benchmark for the performance of customs authorities and market surveillance authorities, but it is quite clear that this scenario will lead to a deterioration of the enforcement performance of customs authorities and market surveillance authorities, with all the dangerous consequences we have for the internal market and so on.
Another funding gap currently exists for the union's IT infrastructure, which remains undeveloped so far. So we do call for complementary funding mechanisms for market surveillance authorities and customs authorities. And next, please. And what are the perspectives? We sketched out some perspectives based on the proposals of the new MFF and then advanced some new ideas for funding the customs authorities and market surveillance authorities.
Next, please. So let's move to the indirect contribution in the proposed MFF by the European Commission. Well, the European Commission proposed a reduction in the percentage of retained customs duty collected by the customs authority of the member states. So, the commission proposed lowering this percentage from the current 25% to 10%. This proposal has already been rejected in the past.
So, we do believe it is not likely that the consortium can approve this reduction. However, we consider that this reduction will not affect the funding of customs authorities because it is very likely that, if this is accepted by the member states, they will offset this reduction in the funding of customs authorities. Then, let's move to the removal of the customs duty exemption. The commission proposed removing the low-value exemption for customs duties. Low value is considered the parcel with a value below €115. This would have some consequences for the funding because it may slightly increase the funding of customs authorities.
But on the other hand, it will put another layer of workload on the customs authorities. Then the third measure is the €3 temporary customs duty for low-value parcels below €150. It is very important to consider that this measure is legally distinct from the union handling fee. I'll catch it later in my presentation. And the economic impact of this measure, which is going to be introduced as of July 1, 2026.
So, it is not clear to identify. This is for the indirect contribution. Next, please. Okay. Let's move now to the direct contribution.
So, also, according to the European Commission proposals, there is a substantial increase in the direct contribution for the Single Market Program and the Customs Program. The commission estimates a doubling in the amount for the customs-related activities and the master and market surveillance authorities' activities. We reshuffled the numbers in the proposal. And in this graph, you can see two figures. First, the bar chart is taken from the report by the European Commission.
And while in the second chart with the accurate, we put some, to our opinion, more accurate numbers and figures. And even with these figures, it is quite clear there is a substantial increase, essentially from EUR 4,000,000,000 in the current MFF. The overall amount will be increased to EUR 6,000,000,000. But it is not possible to have a very accurate estimation because of the reshuffling and the merging of some programs in the new multi-annual financial framework. Well, next, please.
Apart from this, we advanced two other ideas for finding the customs authorities and market surveillance authorities. Customs authorities may be funded perhaps by fees charged by customs and by market surveillance. This model is particularly relevant and feasible, according to us, for the market surveillance authorities. There are some fields of EU law, like the EU food law, where this model is already in place, and it seems that it works correctly, but it is not in place for the general market surveillance authorities. Then, for customs authorities, this measure is not plainly feasible.
Some member states considered a handling fee for compensation of the customs control activities on a small value parcel. This measure has been introduced in some countries, like Romania and Italy. But in Italy, so far, this measure is de facto suspended. And because it is considered superseded by the recent decision on the €3 customs duty starting from July 1, according to the council initiative. Next, please.
The other idea we advanced is that financial penalties charged by customs authorities and by market surveillance authorities can be earmarked directly for the budget of these authorities. And, of course, this depends very much on national law because we know the national procedural autonomy as a general principle of EU law, but this will be a good measure, in our opinion. And we also advanced the idea that, in the end. For violation of EU restrictive measures enforced with the Russian Federation and Belarus, the case may be referred to the customs authorities and marked for surveillance authorities for their work. Yeah.
Yes. So I proceed immediately to the conclusion. Next, please. Last final slide. Policy recommendation. We advanced the sum of the policy recommendation.
According to us, the EU direct contribution for customs authorities and market surveillance authorities should be consolidated and particularly targeted to fund the Union IT infrastructure. So, it is very much needed for the integration of the customs union and for the smooth functioning of the customs union. So the financing arrangement should remain coherent with the EU customs objective, and the funding of the customs authority should remain stable, with fair financing for the actual tasks of the customs authority and market surveillance authorities. So, the removal of duty exemption and the introduction of handling fees should not be offset by the net reduction in retained customs duty by member states, as I brought here. Service fees and handling fees are, in principle, in our opinion, legitimate; I stress, in principle, but it should be considered how they are actually crafted in international law and perhaps in EU law.
In our opinion, there are some other ideas for funding that can be explored, like the fees or penalties that should be earmarked for the budget of customs authorities and market surveillance authorities. Overall, and proceeding to the conclusion, we believe that the most effective response to the evolving challenges for customs authorities and market surveillance authorities is a mix of national budgetary allocation and EU contribution. So we do stress, we do call for a complementary measure, complementary funding of these authorities. So, I stop here. I thank you again for your attention.
And, of course, we remain open to any questions or requests for clarification. Me, together with my colleagues Carlo Tova and Martina Minardi from the University of Bologna. Thank you so much, Mr. President.
Christian Doleschal
Thank you very much for this interesting overview, and I now give the floor to our members. And we start with Miss Gappiny.
Thank you.
You. I will speak Romanian.
Okay. Okay.
Maria Grapini
Thank you very much for this overview. I'm a rapporteur for customs. We often talk about the way to apply the new customs regulation. You know that EUCA is going to be set up, the new customs authority. We have had multiple shadow meetings, and we've had three trial meetings so far.
And we've discussed financing on many occasions because we may draft perfect customs regulations. But without the infrastructure that you have mentioned, which is needed at the over 2,000 customs points in the EU, we won't be able to control it. So, we've started from the idea of having a new customs regulation, especially for the purpose of better controlling entries into the single market, to protect consumers and producers from unfair competition. We've often mentioned the handling fee that is to be levied on small parcels. And here, we have a dispute with the budget committee because our position is that if we burden customs authorities with further controls, my political group believes that this handling fee should go to the budget of the customs authority and not to the general budget so that we can strengthen customs authorities.
From two points of view, we need to have the capacity to analyze the content of the product and not only the quantity. We're interested in quality as well. We have the market share agreement. We have further agreements with India and so forth. So these amounts collected should go to financing infrastructure, and we must admit that we have a deficit in the training of customs workers.
And I can say that from my own personal experience. I have private business experience. All the more so, since this regulation, as you have said, brings a larger workload, we need to have infrastructure, but also well-trained staff who know how to apply the common procedures. It will apply to all 2,000 border crossing points or customs points. So, any entry at a customs point will be deemed an entry into the single market.
And we have also reflected on what to do if a country has no interest in carrying out the controls and simply lets these products flow into the market. Do we have a braking system to be able to put pressure on the market or on the member state that allows these products to enter the single market uncontrollably? Yes. We want direct and indirect financing. But if we increase the workload of customs, I think the money should go to customs.
Elisabeth Grossmann
Yeah. Thank you.
You, Mr. Chairman. In recent weeks or days, we've seen very serious cases involving types of food that are defective and also toys that have caused grave harm. And my question, therefore, is this: How could we improve the structures in such a way that these cases would be prevented?
Pablo Arias Echeverría
Thank you, Chair. I'm going to speak in Spanish.
First of all, I'd like to thank our experts. He's done an excellent job. And what he said covers many of my questions, but I still have some doubts. So, we talked about funding and financing, of course. But financing, of course, has to be secured.
We need some money for that. And clearly, the question of staff is very important when it comes to implementing this plan, which is crucial for this reform process. We also have to bear in mind the fact that what we need are effective controls on what is coming in. More than 4,600,000,000 packages coming in below this threshold of €50, and they're not covered. And it would be impossible to cover them, fully understand what is coming in, or address those packages with other standards without endangering our own producers, factories, or indeed consumers.
So, within the financing as well as the proposed increase in the budget, I understand there is a roadmap, but I'm sure you have more information about the following points. First of all, the technology which should be used here, as Miss Rappiny said, is for training and education of staff so as to ensure that they can use this technology efficiently, enabling them to monitor what is coming across our borders. At the same time, we also have to establish what is legal and what is acceptable. We can't always identify it. So, if you could perhaps expand on that issue: resources, personnel or staff, financing, to ensure that the packages can be checked.
Obviously, you can't check all packages, but it's important that we are able to check a large number of packages, which would dissuade people from sending in noncompliant merchandise that might pose a safety issue for our consumers, as well as a problem in terms of competitiveness for our businesses. Thank you.
Speaker 26
Thank you. Thank you for the questions. Very interesting. Of course, these questions are very interconnected, and they highlight some issues. I'll start with Mrs. Rappini's questions.
Yeah. Of course, training of the functionaries, the customs officers, is critical to the smooth and proper functioning of the customs authorities. It is a huge problem and perhaps a historical moment, a historical problem. Over the last 20 or 30 years, we considered customs just a formality because there were no customs duties or very low customs duties due to globalization and the free market. And so the customer is just for monitoring, but not for lemming, not for safety, and so on; for checking, for inspecting parcels to guarantee safety, and so on.
Nowadays, you stress the very important topics, which is the training. And we do believe that training should be a matter of the European Union, founded by the European Union with the programs within the budget of the European Union, because this is a form of direct and EU-wide investment. As you mentioned correctly, in my opinion, the approach to the law, to the practice of law, to the interpretation of law, and to the practice of conducting controls should ideally be the same, or more or less the same, all across the EU. This is a country, and this is a problem in the EU. As you may know, the European Union is a Europe-wide customs union, but this is considered overall in some other parts of the world as not a fully completed union because several differences do exist right now in the European customs union.
And these differences are not just legally crafted; for example, sanctions for infringements of EU customs law are different across Member States, but these differences are very much connected to the actual performance of customs control and the actual attitude toward customs controls. So I stress the importance of your point about training, common training for customs officers. And there is a passage in our studies where we also identified this field of study. And, of course, I think this training is also funding the common training, building up a common attitude towards customs control, which is also the answer to the other questions. Of course, there is no clear-cut answer to your questions.
How can we stop these very dangerous goods from entering? I think we may, and so I also merge the questions from the last member of parliament. I think technology will help us. We can rely on technology. We, technology of today, have passed a common position on user access to social media and so on.
I think the technology and the risk analysis through developed technologies can be very useful in this way. Also, a wise use of new technology like AI can be very useful in combating these kinds of problems we have with the huge amounts of uncontrolled low-value parts of the ship from outside the EU within the EU internal market. So, to come to the last question, the key concept is investing in technology and training for a wise, safe, and correct use of technology. I would also like to stress that the current Union Customs Code expressly states that customs controls should be performed according to risk analysis. So risk analysis conducted by technologies, particularly data analysis, should be clear and intensified.
In our opinion, particular attention should be paid to this kind of investment in the EU budget. Thank you. Carlo, would you like to add something?
Speaker 32
If I may jump in on the specific issue of the legal qualification of the union handling fee that you raised. Actually, there is also a reference to this in our study. At present, I mean, I'm speaking of the union handling fee that should enter into force on the first of November 2026 in the framework of the Union Council's code reform. So, at present, it seems to us that this fee, the union handling fee, is legally qualified by the council as a traditional own resource. So that goes exactly in the direction you were pointing out.
So it will then be allocated to the budget, to the union budget, and only 25% of the retained own resource will be transferred to the national budget. Only a portion of this will then be allocated to the customs authorities. So, this is obviously a decision for the Council to take under Article 311 of the Treaty on the Functioning, but you will be consulted as the European Parliament. So, you will have a say in this. It is not legally mandatory, let's say, under EU law, that this union handling fee should be qualified as a traditional own resource.
Other fees collected by market surveillance authorities under EU regulations are retained within the budget of those authorities. So, it's also an issue that you can tackle within the framework of the new own resource decision within the next MFF.
Pablo Arias Echeverría
I would like to ask you two additional things. So, first of all, interoperability, technological interoperability. As you said, this is an important European issue. We decentralized rather than centralized. Some years ago, it was fashionable to decentralize these things, but we're moving back towards centralization now.
I think it is of essential importance. There will be enormous quantities of data using this technology, and we have to ensure that we can use this effectively with a customs-relevant format. When it comes to funding, we also have to bear in mind how it will be worked out. So, I understand that this is a study which the commission asked for. It's not the commission explaining the ins and outs of the incident study.
Unfortunately, we haven't received the commission. I'd like to have heard what the commission had to say about it. So, we could have learned a lot from what the commission has to say about it. They could have set out their arguments regarding what was said in the report. So I'd have liked to have heard that in the debate.
Speaker 26
I think this is a question for the European Commission. Yeah. That is not for us. However, this is a very important topic because we highlighted the importance of funding here. They highlight the importance of funding IT infrastructures.
Then we highlight the importance of a correct, safe, and legally sound management of the data. We all agree that data are the future. The management of data is critical to the European Customs Union. However, that is in detail, and the details should be crafted and implemented. And the actual managing of this European customs data hub should be crafted.
These details should be crafted by a decision of the European Commission. So here, again, I think this is the way forward. We all agree it is an avoidable path to be followed, but the details are not clear so far. And so, we have to wait and make some considerations about the official position of the European Commission. Thank you.
Anyhow, you stressed the very important topics about the future of the European customs union and the reliance on data and risk analysis conducted to go out to the data.
That's correct. Yes.
Christian Doleschal
Yes. Thank you once again to our speakers and experts for the presentation and for addressing members' questions. With that, I close this discussion and move on to our next topic on the agenda. We go to the digital omnibus. And it's a pleasure to welcome our speakers today, including Ms.
Godas Giotiti. We have a real expert from Visionary Analytics in Ljubljana. And I will now give the floor to you for a maximum of ten minutes.
Speaker 34
Thank you so much, Mr. Chairman. As I was introduced, my name is Golas Gatita. I'm a senior researcher at Visionary Analytics, and I'm here to present the study that we did. I'm not sure if the slides will be visible in a second or not. Alright.
Thank you so much. So indeed, the study was conducted about digital omnibus. The package was released in November, and you can see the full name of the study. Let me get into it. So, next slide, please.
Or not. Yes. So, very briefly, why does this initiative, the digital omnibus package, matter? As you are aware, I think the very widely cited Drager report from 2024 called for increased competitiveness, and the digital omnibus is one of the answers from the commission towards that. It was released in November, as mentioned, together with the data union strategy and the European Business Wallet proposal, among other documents that were published that day.
I think in total, around 9 documents and 2,000 pages, so a lot. The same day, we also saw the launch of the digital fitness check that's still ongoing, and the goal of the digital fitness check is to stress check the whole digital legislation, while the digital omnibus and other initiatives touch upon specific parts of it. It is still open until March 11 this year. What we saw following that were more initiatives and proposals announced in January 2026, for example, the cybersecurity package, among others. Next slide, please. Very briefly, the digital omnibus is not a uniform piece of a uniform initiative.
It comprises two main proposals. The first one is the digital omnibus regulation proposal, also called the general proposal for shorter, and the second one is the digital omnibus on artificial intelligence, or AI, specifically targeting the AI Act. The general proposal affects a broader range of legislative acts, including most notably the General Data Protection Regulation, so all data protection regulations for institutions, the Data Act, as well as other cybersecurity-related laws, as mentioned on the slide, while the digital omnibus on AI only tackles specifically the AI Act. What we also saw among the proposed amendments to the already mentioned legislation were some proposals for appeals, including the Open Data Directive, Free Flow of Non-Personal Data Regulation, as well as Platform to Business Regulation. Next slide, please.
Well, the next question after "What is the digital omnibus?" is why it exists and what it aims to do. So, very briefly, we categorized four broad areas of problems that the digital omnibus regulation proposal aims to address. The first one is the high administrative burden reported by many different types of businesses in their day-to-day compliance and reporting activities. As related to that, the fragmentation or overlaps across the EU digital rule book have evolved significantly over the last decade or so, and that contributes to the high amount of red tape. What we also saw are the frictions in the data economy side as one of the crucial reasons, and that's where, spoiler alert, the Data Act consolidation comes into play to try to address some of these problems that stem from the wide amount of digital data-related loss.
And last but not least is the issue of cookie fatigue that stems from the consent rules in the GDPR as well as the ePrivacy Directive, and how they are rather fragmented currently. So, yes. Please. Next slide. How does the digital omnibus aim to address these problems?
So, there are a lot of things on the slide, but the most important thing we see is operational streamlining as one of the main problems and the main tool used to address the high amount of administrative burden for businesses. One of the main amendments to tackle that is the establishment of the EU single entry point for cybersecurity-related incident reporting, which I will also address a little bit later, as well as some of the procedural tweaks related to the GDPR. In relation to that, we also see some consolidation and bringing together of data-related rules under the Data Act, and there are a lot of things being put together in line in order to repeal the Data Governance Act, the ODD, and the Free Flow of Non-Personal Data Regulation that I mentioned earlier, in order to put all of those rules under one main act, and also to address the frictions in the data economy that I already mentioned. And that's where we also see the repeal of the platform-to-business regulation coming into play, since it's cited as overlapping currently with the newer Digital Services Act as well as the Digital Markets Act.
Last but not least, as mentioned, cookie fatigue has been, I think, a widespread issue cited over the years since the GDPR came into play. And how the digital omnibus aims to address that is to merge some of the rules from the ePrivacy Regulation into the GDPR, most notably related to device access and cookies. So, yes, let's go to the next slide. Now, coming back to the digital omnibus on AI. So, there are three problems that we looked into.
The first issue is the unworkable timelines due to missing standards and guidance, specifically relating to high-risk AI systems and products. Some of the obligations are due to come into effect this year, August 2, while the standards or guidance that would help comply with these requirements are not there yet, and the commission acknowledges that. Some of the stakeholders also reported that the current version of the AI Act places a disproportionate burden on smaller businesses, as well as what we see is the issue of institutional bottlenecks. So a lot of the enforcement of the AI Act is placed on the member states and the national regulatory authorities, meaning that many bottlenecks are happening there, and the Digital Omnibus aims to address that. Next slide, please. Yes, ours.
So, the natural question is how. So the timeline issue, as mentioned, the commission proposes to postpone some of the timelines, mostly related to the high-risk AI obligations, as well as connect them to the availability of standards and guidance that they promise to release, and then give transition periods in order for the businesses to be able to comply with them. The second issue is the disproportionate burden on smaller businesses. We see a lot of proposed simplified procedures, including, for example, extending some of the simplifications that are already in the AI Act for SMEs to small med caps, as well as, for example, softening AI literacy duties or removing the public registration requirement for high-risk systems and their exemption. Among others, there's a lot in there. Last but not least, the institutional enforcement issues, some of them are being solved or proposed to be solved through centralizing them at the EU level, most notably expanding the AI office's capabilities to supervise more complex AI systems, for example, the general purpose AI models or models developed by the very large online platforms and search engines, since they tend to have cross-country and cross-border effects.
So, bringing them together under one EU institution, as well as, for example, the establishment of the AI EU-level AI sandbox. So, yes, there is more on that as well in the study. Next slide, please. What is broadly supported? So, by different stakeholders, administrative simplification, such as the already mentioned single entry point, is generally supported.
Among others, also the repeal of the platform for business regulation. We also see widespread support for targeted SME and small mid-cap measures. As I mentioned already, among others, easier access to sandboxes and real-world testing for AI-related companies is part of the improvements proposed in the Data Act consolidation. For example, the removal of the smart contract requirement is currently under Data Act Article 26. On the other hand, next slide, please. There is a lot of criticism as well coming towards the proposal.
So, very broadly, for both proposals, a lot of criticism goes towards the evidence base. So they held their consultations with no full impact assessment. There are also questions about limited transparency and accountability, as well as the more strategic-level reliance on a single competitiveness narrative while ignoring the broader geopolitical context. It's also unclear from the evidence base whether the administrative reductions and SME support would actually achieve those goals in real, practical circumstances. And a lot of the experts are also questioning the point of improving legal clarity while bringing in more initiatives.
Next slide, please. What is related to specific amendments? So, we selected the 10 most discussed amendments, covering both the general proposal of the Omnibus on AI and some of them. To mention very briefly, there is the amended definition of personal data, how it's being proposed to be amended in GDPR, as well as amendments related to data subject access requests, and, for example, the legitimate interest clause to be introduced under GDPR for AI data processing. What is related to the AI Act amendments? The timeline changes are seen as necessary, yet some stakeholders still criticize how they are being done, as well as the changing AI literacy requirements that I briefly mentioned earlier.
Some stakeholders are concerned that bringing them from the company level to the member state level might also increase enforcement and other related issues. There's a lot there. I'm not going to get into them, so let's move on to the next slide. What we call for in our study, given all of this complexity and many points, is a strategic reality check, supported by a lot of expert insights. So what became clear is that simplification alone, the goal of simplification as pushed by the digital omnibus, will not alone shift Europeans' position in the global AI value chain.
While some of the amendments might help towards that, they are not sufficient alone because structural barriers still remain, such as fragmented markets, weak capital markets, and social skills issues, as cited by experts. There is also a problem that the regulatory loosening or simplification might actually benefit dominant and mostly non-EU firms. So that's where the geopolitical context comes into play, and we might actually risk reinforcing external dependencies rather than strengthening digital sovereignty, which is cited as one of the goals of the omnibus. And it's also important to take into consideration that regulation, while seen as an impediment to competitiveness, is also a strategic leverage. So, together with industrial policy, it might actually be very important.
Next slide, please. What we, parliament members, may wish to do very briefly is call for, and ask, the members of parliament to consider separating the procedural simplifications and actual amendments that might help to reduce the administrative burden and compliance from more substantial recalibration, as some of the amendments might do more than just simplify. Also, related to the point on the evidence base, we call for insisting on stronger evidence, for example, on the distributional impact of how the different amendments might impact SMEs versus larger businesses, etc. Also, considering a more staged approach, prioritizing implementation tools and procedural simplifications, as mentioned, versus more substantial legislative recalibration that some of these amendments might fall under, and only doing that where it is actually necessary. And last but not least, take into consideration the broader strategic and geopolitical context, as the digital omnibus is a great opportunity to actually consider those long-term goals and calibrate objectives and actions in the short to medium term accordingly.
Next slide, please. Well, thank you for your attention. My contact details are on the slide, and I remain here for any questions, comments, or doubts you may have. Thank you.
Christian Doleschal
Thank you very much for the interesting overview of this important topic. Are there any comments or questions from the members?
Elisabeth Grossmann
Thank you very much. Thank you for that very comprehensive presentation of the full range of both risks and opportunities. So, you made it clear. We're talking about the digital sovereignty of Europe and the risks posed by a general omnibus, with an effort to target businesses based outside Europe, which would then be able to obtain data from European citizens and users more easily. Could you give us more detailed information about the extent to which we have recommendations to focus on enhancing and strengthening consumer and data protection?
Christian Doleschal
What should we, as MEPs, be particularly wary of and attentive to?
And Pablo. Thank you.
Pablo Arias Echeverría
Thank you very much, sir. I'm going to speak in Spanish. Thank you.
Thank you for the report. It's quite true that one of the important questions we'll have to address during this period of Parliament is the series of omnibuses. We're talking about the digital omnibus, which is divided into two parts. But the part we're talking about here will have a great impact on our work. So, it's important for us to understand in depth what the implications of this are, to ensure whether this is worth doing or not.
I think that in many cases, it is worth doing, but it's important that simplification goes in the right direction: innovation while at the same time securing and maintaining transparency and security, something which has always been an important feature of the digital market in the European Union, and a lot of our current legislation targets that as well. So, I would like to ask what is being planned here and what the commission intends to achieve with this omnibus. This is my first question. Is that the right road forward? Secondly, questions on data protection legislation. This law was quite controversial when it was discussed, and it is one of the more complex pieces of legislation.
So, is there a risk of us ending up in a situation where there's no consensus to move forward? This legislation clearly has shortcomings. There are defects, but I think overall, it has worked pretty effectively. So, we have to see whether that dovetails with this push for simplification and what effects we can expect as implementation is rolled out. So, will simplification lead to us creating new problems?
So that's pretty much what I wanted to ask about. We need guarantees of security for our consumers and companies, our businesses. Clearly, Internet giants have also represented a threat to our market, and they were able to run amok in our markets and do whatever they wanted to some extent. So, we have to ensure that we enable our companies and our businesses to remain competitive and become more competitive. But if we have too much red tape and too many standards with which they have to comply, there's a risk of fragmentation of the market.
There's something else I'm worried about. So, among all those points and issues, including fragmentation, those are the things that bother me most. So, the internal market must be just that when it comes to the digital sector. It must be able to reach its full potential for our businesses, while non-European businesses that want to operate within the market have to comply with our standards. So, let's see.
Let's see if we can achieve what has been presented here. But clearly, this is something we have to explore in greater depth to ensure we don't make any wrong decisions. Thank you very much.
Speaker 34
Thank you so much, honorable members of the European Parliament, for your questions and for your concerns. I hear them. I am here for them. I do have to say that I don't think the study really gives answers to them, or the goal of the study was not to give very clear answers of right or wrong. I was trying to give an overview of what the commission proposes, and I think some of the questions and issues that you raise here are related to, for example, the first speaker's question on the risks of non-EU businesses getting more access to, let's say, data of European citizens. This is a real risk, and some of the questions could be solved or discussed more through discussions with the European Commission directly, since I am aware this should be happening very soon, if not already, since the consultation on the digital omnibus closed last month.
Some of my more personal observations and opinions on the first question: what to be aware of in order to avoid big non-European businesses getting more data from EU citizens? I think some of the amendments related to GDPR and the legitimate interest clause for AI processing could fall under that category, since a lot of the big AI companies are non-European, unfortunately. So, those might be some of the amendments to look out for, among others. On the second broad area of questions, from the second speaker, whether it's the right way forward, I cannot tell you that. I think it's up to you in this case to answer that.
There are a lot of risks related to that, and there are a lot of benefits. So, indeed, some of the amendments are generally supported, and they might actually achieve those goals of simplification and, as a consequence, increased innovation and, let's say, maybe a reduced fragmentation of the internal market that some of the stakeholders are calling for. And I also hear your concern about the GDPR and reopening it, which was already a controversial and long process, and a lot of experts were also talking about that. The digital omnibus shouldn't be, at least, I shall say, the place to reopen the GDPR. And the commission claims that it's not the way, that it's not what's happening here, and we have to believe them.
Some of the procedural tweaks are actually very welcome. I think one of the ones that I mentioned on the slides but didn't say out loud was the alignment of the templates as related to the data protection impact assessment. Right now, there are many different templates, and the Digital Omnibus proposes to unify them. So these amendments are very much welcome, but a lot of stakeholders, as I've expressed in the study, are also wary that this might represent a reopening of GDPR and the related problems that might come with that. So it's both things, everything at once, and indeed, it's a complicated piece of legislation that should be considered carefully going forward.
I don't know if that answers your questions, to be completely honest, but I hope that gives a little bit of insight going forward. So, any other follow-up? I'm here.
Christian Doleschal
No. Thanks a lot for your interesting points in the presentation and also in the answers to the questions. With that, I want to close this discussion, and we will come to the next topic. Any other business? Are there any other businesses?
No? Then, I thank you very much for coming today. Our next meeting is on 23rd and 24th March here in Brussels before the mini plenary sessions. Thanks a lot, and have a good time.
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