Committee on Employment and Social Affairs Ordinary meeting

15 July 2026

EMPL European Parliament

Follow its sittings
00:59 - 03:00
Speaker 1
Okay, colleagues.  Welcome back, and we continue our meeting with a very important item, namely this year's employment guidelines.  And we are very happy to have Mr. Mario Nava, Director-General for Employment, Social Affairs and Inclusion at the European Commission, here to present them for us.  This year, the guidelines have been substantially updated, both in the recitals and in the guidelines themselves.  And as you might know, the design and the adoption of the employment guidelines is part of the yearly European Semester process. 

We have already discussed them to a certain extent with some members at our regular economic dialogue that we jointly organized with the ECON Committee on 23rd of June in the presence of Executive Vice-President Dombrovskis.  This year, the guidelines are also important as they will guide the design of the country-specific recommendations of 26 and 27 that in turn will be the policy framework, as I have been told, for the design and implementation priorities of the 2028-2034 EU budget and particularly for those of the national and regional partnership plans.  So there are many links here that have a big importance for our committee.  So therefore, Mr. Nava, we are particularly interested in questions such as how you work to ensure that the employment guidelines are taken up in the country-specific recommendations, how consistency is ensured between, for example, the guidelines and the NRPPs or the country-specific recommendations and NRPPs, and how are the country-specific outcomes of the two-stage analysis of the social convergence framework integrated in this whole process.  So I will start by giving the floor to Mr. Nava for his presentation. 

So please, the floor is yours. 
03:00 - 03:51
Speaker 4
Thank you very much, and thank you for the invitation to present the employment guidelines.  Let me be very clear from the very beginning.  The employment guideline is not the sexiest piece of paper that the Commission produces.  However, it's extremely important.  So the reading of it is fundamental if you want to understand later on when we come to the country-specific recommendations. 

And I was extremely happy that the questions of our chair, of your chair, Li Anderson, is around that, because this is what we need to understand, that the employment guidelines are the basis, the ground, the fundament on which the country-specific recommendations are built. 
03:47 - 06:39
Speaker 6
Now, two things in order to understand where we are.  The employment guidelines have a cycle: one year is a reconduction and one year is a change.  This year, in doing the, we did the change.  And on the change, we have not only done the change with respect to substance, and I will get to that in a second, but also we have done the change in respect to structure and to language.  The text is much shorter. 

We have eliminated what we estimated to be, the text is about 40% shorter, so we have eliminated lots of repetitions.  What are the changes in substance?  The big three changes in substance are the one, two, three first square here.  So there are the new elements on job quality, which are in line with the quality job roadmap and the job quality act that will come out at the end of the year.  There is the human capital recommendation reflected. 

As you remember, that is with the Union of Skills we have had in the new Council recommendation on human capital adopted March last year.  And then there is the alignment of the messages with the anti-poverty strategy.  And then as a horizontal thing, we have reinforced the wording on housing and affordability.  And a number of countries have got recommendations on housing and their affordability because that has become a fundamental element of the, let's say, well-being of the citizens.  The employment guidelines, as you know, they are eight, and we take care of those that goes from five to eight, and the one to four have to do with fiscal issues. 

So the four, the four employment guidelines are very simple as a logic.  The first one has to do with labour demand, you see there on the right.  The second with labour supply.  The third on functioning of the labour market, so the matching between demand and supply.  And the fourth one with promoting equal opportunities for all, so inclusiveness of the, of the labour market. 

So on the first one, boosting the demand for labour, what the employment guideline say is, first of all, the promotion of a sustainable social market economy in light of the 2030 employment target.  As you know, we are not that far on the 2030 employment target.  We are 76.1% for the EU average.  We have eight countries who are above the 78, the 78%.  There is still a little bit of step to make. 

06:39 - 15:03

Mario Nava

The employment guideline talks about the innovation-led growth and the productivity growth. It links to the discussion that you have found in the Draghi report in particular. And then it talks about well-designed hiring and transition incentives, upskilling and reskilling measures, which as you know is the part which is financed by the European Social Fund. So it looks at that area. It also looked at the short-term work schemes, the reallocation of labour and of workers from one to the other sector.

There's a major change in the working life of each and everybody of us, and in particular of the future generation, which is the likelihood to change job. In the past, the previous generation had on average two jobs for a career. Now the career is longer, it's not anymore 30 years, it's likely to be 40, 45 years of a career.

To be clear, a person born in 2000 that enters the labor market today in 2026 is very likely to work until 2070, 2072. That means about 45 years of career. And during those 45 years, this person is likely to change job six or seven times, depending from the country, the place where it is. So the reallocation of labor will be a big issue. Equally will be the issue of keeping labor very attractive and therefore the issue of the taxation shift from labor, out of labor towards other sources.

And then of course collective bargaining, wage setting. Is important to understand that in a labor market like the one we have now, which is relatively tight, where unemployment is at its lowest ever, the labor demand plays a big, big role in attracting people to the labor market. You will hear from us talking a lot about activation, attracting people to the labor market. And there issues like taxation, wage setting and all of that, they do play a crucial, they do play a crucial, a very crucial role. Then the, sorry, the reference, there is a reference which is introduced to growing security and defense needs as part of the sectors which are likely to take more job, to produce more job creation and therefore take more job workers in the future.

And then of course job quality in line with the opinion of the EMCO committee and the opinion of the EPSCO of June 2025 on what is job quality. So this is for the labor demand, fundamental part of the labor market equation. Then when we come to labor supply, on the labor supply is how to prepare workers for the labor market. We have first of all the educational challenges, which include the decline of the educational performance that has been observed post-COVID, which include of course the complex equation of teachers and attractiveness of teaching professions, and which include of course the necessity in a labor market where people change job most often to do regular upskilling and reskilling. And someone uses the term of open-ended employment.

I think is a term that more and more you will find in the economic literature and probably you will find also in the policy papers because this is very much what it is and we believe this is quite essential in the whole organization of the work. So that's for the twin transition. Then for the labor supply and for facilitation of young people entering the market, which as you know is a great debate under artificial intelligence, what we are looking at is at the removal of barriers, making sure that those who want to enter do not face barrier, but also making sure that the labor supply, so the workers, are well prepared to enter. There are a number of novelties on this side of the labor supplies that you'd expect.

The novelties have to do with the need for having greater strategic autonomy and technological sovereignty. The novelties have to do with the link to the human capital recommendation, and the novelties have to do with the link between skill acquisition and job quality. These are the new part and this I think is the probably the way that most facilitate the reading. And then when we come to the matching, so once we have done the labor demand and the labor supply, we come to the matching. I think the crucial point here in guideline seven on the matching is your second bullet point, which is preventing segmentation in labor market.

That means we don't want to see two-tier or even three-tier labor market. All workers in the labor market are similar, are identical. We don't want to see undeclared work or bogus self-employment. I think this is pretty crucial, in particular in those labor markets which are growing or which have seasonal peaks or which have different reasons to be booming. And for that, clearly the social dialogue, collective bargaining, insistence on minimum conditions of wage, of course, but not only of wage, is quite essential.

The other essential part of the labor market, of the matching, is of course the activation policies, in particular for the underrepresented groups in the labor market. The prime-age male, they all work, but underrepresented groups, which for example are women, young people, people coming from a migrant background, people with a disability, all of that is clearly something that needs to be taken care by the activation policies and by the PES. Finally, updated language on job quality, again a link to the progress we have made on OSH, workplace well-being, optimal working times. And to conclude, the last guideline is the one on promoting equal opportunities for all, fostering social inclusion. Is a guideline which is, I would say, horizontal.

It makes clear that the inclusive labor market applies to essentially all sectors. There are obviously some very successful examples in some sector, facilitated also by AI, by digitalization, by other instruments. And the question is to make sure that this happens all over. And equally, therefore, promoting equal opportunities, you have something on making sure the member states ensure that everyone has access to essential services of good quality, adequate and affordable sustainable housing, preventive healthcare. Novelties, and I truly conclude on that, novelties are in line with the new anti-poverty strategy, of course, with the take-up of social protection, which is an issue to which we dedicate lots of attention.

And as I said at the beginning, housing, transport poverty, and resilience. So this is in 11 minutes what you find in the employment guidelines. I of course invite you to have a read to the employment guidelines because they are fundamental to understand the CSR. Thank you.

15:03 - 19:30

Li Andersson

Thank you very much, Mario, for this introduction. So we then move on to the rapporteur and the shadows. And since this file was allocated to me as rapporteur, I will say a few remarks in that capacity, and then I will give the floor to the shadows present. So at risk of repetition once again, even though these guidelines have been important previously as they set out the common priorities for national employment and social policies, they will have a more significant role in the future as it's the framework on which the country-specific recommendations are based.

And the country-specific recommendations in their turn is the policy framework through which the national and regional partnership plans will be assessed. So they will have a direct impact by providing the framework for the negotiations between the Member States and the Commission with regards to the allocation of social funding and also the reforms. The joint employment report also contains an analysis of potential risk to upward social convergence in Member States in line with the social convergence framework. And I think this is very important to our committee because this is the concrete way in which the European Pillar of Social Rights is incorporated into the Semester. And to strengthen the social dimension, we would also need to have a strong link between the country-specific recommendations and the analysis on the risks of upward social convergence, so to have a strong link there because without it, the framework around both policy reforms and access to funding risks severing the link to a social Europe and the objectives enshrined in the European Pillar of Social Rights and its relevant frameworks.

I do also have to say, speaking as, you know, as we are all representatives of the European Parliament, that I think the employment guidelines is also an example of the democratic deficit that are linked to the Semester process as formally the Parliament has only a consent role regarding the guidelines, not a specific influence on the country-specific recommendations. So our goal should be to be on equal footing with Council. And as a step in that direction, of course, also to get Council to incorporate some of our suggestions when we have finalized our work. So I therefore hope we can find common proposals and priorities on this file. And also important to point out is that we are not starting from scratch.

So I think we should strive to add priorities that are based on priority topics we already have worked on and are currently working on in this mandate. And I also think there is a real need for this, as the proposal also actually now removes many crucial parts from the previous guidelines that touch especially on structural conditions around employment, consideration around the digital and green transition, as well as large parts related to the need to foster quality jobs and social dialogue. So I would propose that we commonly together elaborate especially on priorities that we have already jointly identified: the just transition, a skills agenda that recognize structural barriers people face in participation, our existing and joint call for the right to training that is cost-free for workers during working hours, providing adequate safeguards for AI and algorithmic management, not just for platform workers but for all, subcontracting chains, psychosocial risks, fair mobility, and the statement we already have agreed upon in the anti-poverty strategy. So I also want to underline in the end that the major changes in the guidelines are not additions but actually true also to what is not anymore present. So I also encourage everyone to read the proposal and the key part, the annex, side-by-side with those from the last year to grasp the differences, as there has been a great deal of deletions, as was mentioned by Mr. Nava, 40%.

And I do think we can make good work as committee also in finding consensus and examples of what we can bring in here from work that we have already done together to make the guidelines better. So I look forward to collaborating on this and to hear the remarks from my colleagues, starting with Mr. Falcă, shadow rapporteur from the EPP.

19:30 - 22:04

Gheorghe Falcă

Thank you, chair. I will speak in Romanian. Mulțumesc pentru explicațiile detaliate și, dragi colegi, doresc să spun că pentru grupul PPE orientările pentru politicile de ocupare a forței de muncă trebuie să pornească de la o realitate simplă: Europa nu duce lipsă de oameni și nici de talente.

Problema este că prea des competențele disponibile nu ajung acolo unde există cerere. Avem milioane de locuri de muncă neocupate în timp ce prea mulți tineri întâmpină dificultăți în tranziția de la educație la piața muncii. Avem întreprinderi care nu găsesc competențe de care au nevoie și lucrători care au calificările nu sunt recunoscute atât de rapid în momentul în care se deplasează dintr-un stat în altul. De aceea pentru PPE investiția în capitalul uman este de fapt o investiție în competitivitatea europeană. Trebuie să creăm locuri de muncă de calitate pentru investiții, inovare și o economie competitivă.

De aceea în același timp trebuie să construim o legătură mult mai eficientă între educație, formare și nevoia reală a economiei. Am lucrat 15 ani într-o primărie, am dezvoltat economia acelui oraș și greu mi-a fost să conving sistemul educațional astfel încât să schimbe modul în care pregătesc competențele pentru noile economii. De aceea avem nevoie de competențe pentru economia de astăzi și pentru cea de mâine, de la digitalizare, inteligență artificială la industrie, transporturi, energie și apărare. În aceste competențe trebuie să poată, iar aceste competențe trebuie să poată circula. Portabilitatea competențelor și recunoașterea mai rapidă a calificărilor sunt esențiale pentru o piață unică funcțională.

Un lucrător calificat într-un stat membru trebuie să-și poată valorifica competențele și într-un alt stat fără bariere administrative. Aștept cu nerăbdare planurile naționale și regionale unde să includem exact creșterea competențelor forței de muncă. Europa nu-și poate permite o piață unică în care capitalul și serviciile circulă mai ușor decât competențele oamenilor. Trebuie să investim în oameni, să conectăm mai bine cererea cu oferta și să transformăm competențele europenilor în locuri de muncă de calitate, cu productivitate și competitivitate. Mulțumesc.

22:04 - 22:08

Li Andersson

Thank you very much and from the S&D Mrs. Dobrev.

22:08 - 25:16

Klára Dobrev

Yes, thank you very much chair, dear colleagues, as this is the first discussion about the employment guidelines let me allow that in the name of the S&D just to talk about some guidelines which are going to lead us during the negotiations. Because I think there is a fundamental misunderstanding now in the parliament, especially the parties on the right, they believe that the purpose of the European employment policy is to provide cheap and absolutely unprotective labor to the big business. That the purpose of European economic policy is simply competitiveness in itself for its own sake. But that's not true. I mean this is the way how we make the rich richer and the poor poorer.

I think our European model is absolutely different. We have our European social model. We have the model where Europeans work in order to have dignity, to have security, to have hope for the future. And I think our politicians and our political parties and our all our policies have to protect this kind of European social model where employment policy and economic policy are the tools, where competitiveness, innovation are tools and not the final goal.

The final goal is the dignity, security of European people and the hope for the future. So that's why when we talk about the employment guidelines, then yes, the European Pillar of Social Rights should be a compass all the way along and not weakening it. And I really truly believe that Europe will not be competitive by simply weakening the social rights, the labor rights, lowering the social standards or even treating environmental protection as a burden. That's not the way how we will be competitive, not at all. And this kind of difference that competitiveness and social protection are opposite side, this is I think a very bad road to go.

Mainly because what we are talking about it's not simply about employment policy, about economic policy, it's about our democracy. Because whether you accept it on the right or not, but European democracy depends on social progress. And if we weaken this social progress, then we'll be in really big trouble. So dear colleagues on the right, especially EPP, when you put corporate interests before people, when you simply take the Christmas wish list of big corporations and transfer them to pieces of legislation, then you are weakening the democracy. So that's why this is going to be the guiding principle of the S&D.

We will not allow it. Thank you very much.

25:16 - 25:19

Li Andersson

Thank you very much. And from the Patriots, Mrs. Destée.

25:19 - 27:33

Mélanie Disdier

Oui Madame la Présidente, chers collègues, Monsieur le Directeur Nava, l'emploi et la dynamique du marché du travail sont, il est vrai, intimement liés au fonctionnement du marché commun. Ils sont à la fois le cœur battant de l'économie européenne et la base fondamentale pour garantir le niveau de vie des Européens, tant via les salaires versés que par les politiques de solidarité qui s'y appuient. Cependant, comme à son habitude, la Commission nous vend ses bonnes intentions pour mieux nous faire avaler une pilule toujours plus amère. Ainsi, la Commission nous ressort son éternel baratin pro-immigration en appelant à attirer des talents et des compétences provenant des pays tiers. En 2026, elle n'a donc toujours rien compris et pas compris la leçon.

Les Européens veulent stopper l'immigration massive qui arrive chez eux. Mais dans sa tour d'argent, Madame von der Leyen fait la sourde oreille et continue à foncer droit dans le mur. Plutôt que d'investir dans l'innovation technologique pour améliorer notre productivité, certains ici préfèrent conserver des méthodes préhistoriques et se lancer dans l'esclavage moderne en important de la main-d'œuvre étrangère à bas coût. De plus, dans ses lignes directrices, la Commission propose entre autres de repousser l'âge du départ à la retraite. Outre le fait qu'il ne s'agit absolument pas d'une compétence européenne, je mets au défi Mesdames von der Leyen et Mizzatou d'assumer leur politique face aux ouvriers et de leur expliquer qu'ils vont travailler jusqu'à 64 et même 67 ans.

Ce serait un bon exercice pour celles qui cherchent à promouvoir constamment le dialogue social. La Commission cherche aussi à s'immiscer dans la politique fiscale des États membres. Elle veut abaisser la fiscalité sur le travail, très bien. Mais évidemment, ce n'est pas gratuit et elle demande pour compenser de mettre en place des taxes pour l'écologie. Les travailleurs seront donc ravis d'avoir une augmentation de leur salaire net qui servira à payer leur essence à 3 euros le litre.

Je vous remercie.

27:33 - 27:40

Thank you. And next I have Mrs. Macconi representing the shadow rapporteur from the ECR. Please.

27:40 - 29:36

Lara Magoni

Grazie. Leggerò il contributo della collega Elena Donazzan. Grazie presidente e grazie alla Commissione per la presentazione delle linee guida per l'occupazione. Come gruppo ECR siamo a favore dell'attenzione al lavoro di qualità indicata nella Quality Jobs Roadmap, scusate. Tuttavia evidenziamo come l'attuazione di questa strategia debba avvenire sempre nel rispetto del principio di sussidiarietà.

Sosteniamo inoltre l'investimento nel capitale umano e nelle competenze perché è la vera leva per la competitività, per l'autonomia strategica dell'Unione e per rispondere concretamente al disallineamento tra domanda e offerta di lavoro che colpisce le nostre imprese. In questo senso la raccomandazione sul capitale umano va nella direzione giusta purché resti uno strumento di orientamento e non un obbligo calato dall'alto. Quanto alla lotta alla povertà, per il nostro gruppo l'occupazione di qualità resta l'unico percorso strutturale e duraturo verso la stabilità economica delle famiglie, non sussidi a pioggia ma lavoro vero, stabile e dignitoso. Infine sulle politiche di social housing condividiamo l'obiettivo di un'edilizia abitativa accessibile, in particolare per i giovani e le famiglie, ma ricordiamo che le politiche abitative sono e devono restare competenza nazionale e locale. Confidiamo quindi in un confronto costruttivo con la Commissione per far sì che le politiche occupazionali vadano di pari passo con le esigenze del mondo produttivo e con l'evoluzione tecnologica in atto, così da garantire ai cittadini occupazione di qualità e al tempo stesso sostenere la competitività delle nostre imprese.

Grazie.

29:36 - 29:50

Li Andersson

All right, since I have no shadow rapporteurs from the Renew or the Greens here, I will now give the floor back to the Commission. So Mr. Nava and then Mr. Jutte, however you want to divide the time between yourself, around five minutes.

29:50 - 31:26

Mario Nava

Okay. Thank you very much. I take maybe the last two. The very last one on subsidiarity, that's for sure. This is well understood.

As you said, this is grounded in the treaty and we are not here to change the treaty competencies. It's called recommendation exactly because it's a recommendation and not un obbligo calato dall'alto. So I think on this we completely agree and I'm very happy to see the coincidence on the three levels which is human capital, lavoro as a fight to poverty, just to give you a number, about 80% of the people at risk of poverty is because they don't have work, and then social housing which is becoming a social issue. Et à la collègue des Patriotes sur la question de baratin pro-immigration, honnêtement je ne fais pas de baratin, ça fait 32 ans que je suis là, je ne fais pas de baratin, certainement pas pro-immigration massive, c'est pas ça que je dis. Je dis tout simplement que évidemment il y a des politiques d'activation pour le marché du travail qui sont très importantes pour faire en sorte que le marché du travail ait toutes les compétences et toutes les forces qui sont nécessaires.

Donc je crois que là vraiment on est sur une analyse assez technique du marché du travail qui respecte les compétences de tous les États membres.

31:26 - 33:18

Jeroen Rutte

Yes, Madam Chair, let me then also go back to a number of the questions you asked and that also directly or indirectly came up from the members. Let me first underline that the Parliament has in different ways a very, very important role for the employment guidelines. It is not only the input here today and over previous years, but it is also the normative setting in which context the employment guidelines have developed over time. Your role in making an agreement on the minimum wage directive, on pay transparency, on platform work, and also of course on the European Pillar of Social Rights itself. All this sets a normative framework that feeds into the employment guidelines, feeds into the analysis that follows from that through the joint employment report, through the country reports, and through the social convergence framework.

And from those documents, we take the most important priorities which are then translated into country-specific recommendations. And to give you an example, for example, on the question of the chair related to the social convergence framework, if you take this year, the CSRs and you look at job quality, you have for Italy, Bulgaria, Romania, also for other countries it plays an important role. It directly is translated then into the country-specific recommendations and thereby of course may also play an important role in the choices member states make for future reforms and future investments. I think, Madam Chair, at that point we have the bulk of the remarks, I believe.

33:18 - 33:32

Thank you very much. I then ask if there are any other members who wish to take the floor at this point. Yes, sorry, we will start with Mr. Oliveira.

33:32 - 35:23

João Oliveira

Obrigado, presidente. Quero começar muito sinteticamente por dizer que, naturalmente, quando discutimos orientações para as políticas de emprego, essa discussão não deve ser feita de forma neutra. Ela deve ter um propósito, e o propósito deve ser o da melhoria das condições de vida, o da melhoria das condições de trabalho, o da melhoria da proteção social nas diversas circunstâncias em que o acesso ao emprego não é garantido de forma estável, mas com trabalho precário e temporário. É preciso assegurar políticas orientadas para o aumento dos salários e a melhoria da qualidade do emprego. Ora, essa discussão, para além das proclamações que possam ser feitas, tem que ser feita de forma a que as orientações batam certo com as decisões.

Aquilo que nós temos visto em vários países da União Europeia mais recentemente são alterações à legislação laboral no sentido da degradação das condições de trabalho. Vimo-lo na Grécia, vimo-lo aqui na Bélgica, vimo-lo na Itália. Em Portugal, o governo também tentou, apesar de ter sido derrotado nessas intenções. E, portanto, é indispensável que se clarifique o sentido relativamente à legislação laboral que é coincidente com a proclamação da ideia da melhoria das condições de vida e trabalho. Duas referências muito concretas a propósito da ligação com o quadro financeiro plurianual: qual é a articulação que estas orientações assumem relativamente à lógica de desembolso dos fundos pelas reformas?

E a última, em função das recomendações específicas por país resultado do Semestre Europeu, que em relação ao emprego, particularmente em relação a Portugal, apontam no sentido contrário ao dos interesses dos trabalhadores, gostávamos de saber o que é que vai ser feito dessas recomendações específicas por país, se elas são tomadas como referência ou se pura e simplesmente são abandonadas.

35:23 - 35:29

Li Andersson

Thank you. And next speaker, Mr. Ondruš.

35:29 - 38:02

Branislav Ondruš

Thank you, Madam Chair. Yeah, as a former State Secretary for Labor and Social Affairs, I would discuss this issue very long time. However, I just would like to thank for intervention of João Oliveira and Klára Dobrev because I could undersign these two interventions. Very important messages has been delivered by their interventions. And since taking into consideration the time limit, I would like just to turn the attention of the Commission to the issue of low-skilled people.

Because in general, there is paid big attention to retraining, requalification, to delivery of a better education and better training to the people in order to improve their skills. However, still in the society, there is and always there will be a group of people who naturally have the limits regarding to the level of education they are able to reach. And therefore, it is also important to create fair jobs for low-skilled people, for those people who simply are not able to graduate at universities. For example, we in Slovakia focus on integration of Roma women who are very good people ready for work in personal care. So, and personal care is something what doesn't need university degree education.

And therefore, according to our experience, the Roma women were integrated to the labor market through the personal, through the provision of personal care very successfully. So, just want to finalize with the call, definitely I will table some amendments or some proposal to the report. But I want to say that focus just on high skills and high training, etc., etc., risk that some people will be left behind. And we need to take into consideration that labor market must to create jobs, opportunities also for low or middle-skilled people. Thanks.

38:02 - 38:11

Thank you. I have no further requests for the floor at this point. So I will give the floor back to Mr. Nava and Mr. Jutte for your final remarks.

38:11 - 39:08

Mario Nava

Thank you very much. No, indeed, I mean, when we speak about upskilling and reskilling, it's horizontal at all level of skills. So even if you are low skills, in your low skills you can have a little bit of upskilling, while recognizing that there may be a gap. There are number of jobs which are available. I myself in my office, I have received people, representative of people and of workers who wanted to have basic upskilling and reskilling or basic education matters of six, nine weeks or maximum three, four months of training in order to access that.

So I think the point is absolutely well taken. And you will find in particular, I would say, in the guideline eight, which is about inclusiveness, you will find lots of reference to that. Jeroen.

39:08 - 40:18

Jeroen Rutte

Let me then focus on the observations of honorable member Oliveira. Clearly, improving working conditions and quality jobs is very much at the core. And why is this beyond making people happy with better jobs?

It is also good not only for social outcomes but for our competitiveness. We see that overall productivity increases. We see that in a context of labor shortages, we attract people into the labor market. And I want to pull this also larger. The treaty is very clear and I think everybody in the house shares this.

Treaty Article 3 refers to the social market economy. But the social market economy must also be competitive. And it is in that broad framework of being both social and competitive that we conduct the European Semester. We come to country-specific recommendations on the basis of fact and analysis in this time of alternative fact. And on that basis, we're also going to be inspired in our engagement with Member States for the national regional partnership plans.

Thank you.

40:18 - 45:07

Li Andersson

Thank you very much. And so I want to thank all the colleagues and of course also Mr. Nava and Mr. Jutte for being here and for this interesting exchange. Of course, our goal in Parliament is now to make sure that our amendments will find their way into the final guidelines because there is also nothing stopping the Council from incorporating them. And through that, the future country-specific recommendations and then also in the NRP plans. As regards to the next steps on the file, I would like to invite the shadow rapporteurs and colleagues to send their amendments by the 1st of September at the latest and only in English due to the short time available, unfortunately.

So that was for the procedure. Thank you very much. So, the next item on the agenda is the European Court of Auditors' special report on cohesion policy support for youth employment. This is a report we as EMPL Committee have asked for and therefore I would like to thank the European Court of Auditors for taking up our suggestions. Alright.

Good so we could continue. So, coming back to the report, as was mentioned this is something we have requested, and as was also mentioned I would like to start by thanking the European Court of Auditors for taking up our suggestion. The report is highly relevant and can also help us in scrutinizing the respective policies in the member states and to shape our decision as the co-legislator, especially for the negotiations on the MFF. The report shows that while youth unemployment is decreasing as is the overall unemployment, youth unemployment is still too high. I would like to start by inviting Mr. Manfredi Salvaggi from the European Court of Auditors responsible for this special report to present his findings and suggestions on how to better ensure lasting employment for young people.

So starting Mr. Salvaggi by giving you the floor for around eight minutes for the presentation. Thank you.

45:07 - 52:56

Carlo Alberto Manfredi Selvaggi

Thank you very much. Dear chair, honorable members of the European Parliament, ladies and gentlemen, it is a great honor for me to be presenting to this EMPL committee our latest report on cohesion policy support for youth employment. Across the European Union, 4.7 million young people are unemployed. That represent almost 12% of the EU labor force aged between 15 and 29. Despite recent improvements, young people are still twice as likely to be unemployed as the overall workforce and many struggle to gain a lasting foothold in the labor market.

Since 2014, the EU has invested around 25 billion euro through cohesion policy to specifically support youth employment. This is a major investment and an important one because early job instability can have long-term consequences for careers, incomes and social inclusion. It also matters for cohesion because persistent difficulty in entering stable employment can deepen economic and territorial disparities across the EU. In some regions, this is also closely linked to demographic pressure, weaker labor market dynamics and the sense among younger generations that opportunity is unevenly distributed. For that reason, youth employment is not simply one policy objective among many.

It is also a practical test of whether public action is helping to connect people, skills, services and investment in a way that strengthens the resilience of regions and support upward convergence across the EU. This is why we examined how effectively EU cohesion policy was supporting the sustainable integration of young people into the workforce. Employment policy is primarily a responsibility of the member states. The EU does not design labor market measures itself. Instead, the Commission supports national measures by setting a strategic framework, in particular through the Youth Guarantee and European Semester and by providing substantial financial support.

Our audit focused on how the current framework, the funding provided, and the monitoring arrangements are working together in practice. To do so, we reviewed the EU approach as a whole and carried out detailed fieldwork in Germany, Spain, and Italy. These three Member States do not represent the whole Union, but they did give us concrete evidence of how different types of support were designed and implemented, and where the main strengths and weaknesses could be observed in practice. What did we find? The Commission had actively supported Member States through strategies, guidance, and funding.

The Youth Guarantee, the European Semester, and cohesion policy funding kept youth employment high on the EU policy agenda. Specific programs under the European Social Fund and the Youth Employment Initiative strengthened the focus on youth employment, while REACT-EU played an important role during the COVID-19 crisis. Support continues today under the European Social Fund Plus. However, we identified three main weaknesses. The first concerns information on results over time.

While short-term outcomes are monitored, the Commission has limited insight into how EU-funded measures perform beyond the first few months. Information on whether young people remain in work in the medium term is only partially available and is not fully integrated into cohesion policy monitoring. This limits our collective ability to compare measures, understand what delivers lasting value, and improve future support on the basis of evidence. Secondly, hiring incentives absorb a large share of EU funding, but in the cases we examined, they were often too broad and not sufficiently targeted. They were generally not linked to compulsory on-the-job training, even though training can improve young people's employability and help to address labor market needs, particularly in sectors facing skills shortages.

The audit also found that where young people left subsidized jobs early, national authorities did not have effective tools to understand the reasons why. And beyond that, the report points to a broader issue of efficiency. When incentives are not sufficiently focused on those who face greater difficulty in finding work, there is a greater risk of public money supporting recruitment decisions that would have been made even without the subsidy. This does not mean that hiring incentives have no role. They can be useful, especially in downturns or in situations where rapid support for labor demand is needed.

But the audit suggests that their value is greater when they are more clearly focused, when they are linked to skills development, and when they include safeguards that promote retention after the subsidy ends. The third weakness concerns young people not in employment, education, or training who are inactive, that is, those who are not working and who are not actively seeking work. Inactive young people are often those for whom labor market measures alone are not enough, because the obstacles they face may also involve education, health, transport, local services, or social support.

Reaching them therefore requires not just funding, but coordination, persistence and a sharper understanding of where vulnerability is concentrated. Overall, the total number of unemployed and inactive young people in the EU has fallen in recent years, but the fall in the number of inactive young people has been much smaller. In Germany and Spain, their numbers have even increased. While the current EU framework requires targeted outreach, inactive young people remain the hardest group to reach. To address these issues, we have made three recommendations to the Commission.

Firstly, to strengthen monitoring and evaluation so that future choices can rely more firmly on evidence of lasting results. Secondly, to improve the design and targeting of hiring incentives so that they are more effective, better focused on results over time and less exposed to the risk of inefficient spending. And thirdly, to provide more focused support for inactive young people, including through stronger outreach to those least likely to be reached by standard measures. Thank you for your attention. I would be more than happy to answer any questions you might have.

52:56 - 53:17

Li Andersson

Thank you very much, Mr. Selvaggi, for the presentation and we then come to the questions and answers sessions with the first round of group representatives starting with Mrs. Princi from the EPP. Yes.

53:17 - 55:20

Giusi Princi

Grazie. Grazie Presidente. Intanto ringrazio e mi complimento con il dottor Selvaggi e con la Corte dei Conti europea per questa importante e significativa relazione. Tra le espressioni utilizzate ce n'è una sulla quale vorrei soffermarmi, quella di inserimento sostenibile. Da donna di scuola considero un percorso educativo realmente efficace quando consente a un giovane di diventare autonomo, di riconoscere le proprie capacità e di continuare a crescere nel tempo.

E credo che lo stesso principio debba valere per il lavoro. Per un giovane il primo impiego è importante, ma rappresenta solo l'inizio e non il compimento di un percorso professionale. E lo so bene perché vengo dalla Calabria, una terra in cui la condizione dei giovani si intreccia profondamente con quella del territorio, come avviene anche in molte altre regioni europee. Perché quando un giovane non riesce a valorizzare le proprie competenze, a perdere non è solo lui ma anche il tessuto territoriale in termini di capitale umano e competitività. E questo è ancora più vero per i giovani NEET, soprattutto gli inattivi, perché l'esclusione dal mercato del lavoro spesso inizia quando mancano orientamento, accompagnamento e un raccordo efficace tra formazione e mondo produttivo.

Vorrei pertanto chiedere al giudice Selvaggi, alla luce delle vostre verifiche, quali elementi dovrebbero consentirci di definire e misurare concretamente l'inserimento sostenibile affinché le future politiche europee per l'occupazione giovanile siano valutate non soltanto per l'ingresso nel mercato del lavoro che riescono a produrre, ma anche per la loro capacità di consolidare percorsi professionali e di generare valore duraturo nei territori. Grazie.

55:20 - 55:46

Li Andersson

Thank you very much. I have no speaker from the S&D present. Is Mrs. De La Pisa Carrión speaking for the Patriots on this point? No. Yes.

We are still in EU-INK on the youth unemployment. No. Okay, good. Then we have Mrs. Gemma from the ECR.

55:46 - 57:50

Chiara Gemma

Grazie Presidente, grazie Dottor Selvaggi per la sua puntuale relazione che ci ricorda come il successo delle politiche europee per l'occupazione giovanile non può essere misurato soltanto dal numero di giovani che trovano un'occupazione, ma dalla capacità di accompagnarli verso un'integrazione stabile e duratura nel mercato del lavoro. Da questo punto di vista la Corte evidenzia un cambiamento importante. Oggi la sfida non riguarda soltanto la riduzione della disoccupazione giovanile, ma anche la crescente presenza di giovani che rimangono completamente fuori dal mercato del lavoro, dall'istruzione e dalla formazione. È un fenomeno che richiede un cambio di prospettiva. Se vogliamo che le future politiche europee siano realmente efficaci, non basta finanziare gli strumenti esistenti.

Occorre comprendere meglio le caratteristiche di questi giovani, rafforzare la capacità dei servizi pubblici di raggiungerli e sviluppare interventi più mirati, in grado di favorire un'integrazione realmente sostenibile nel mercato del lavoro. Vorrei quindi rivolgerle una domanda. La relazione mostra che la composizione della popolazione NEET è sicuramente cambiata, con i giovani inattivi che rappresentano ormai una quota sempre più ampia del gruppo di riferimento. Perché questi giovani sono più difficili da raggiungere? Cosa si intende concretamente per integrazione sostenibile nel mercato del lavoro in relazione ai NEET inattivi?

Quali implicazioni dovrebbe avere questo cambiamento per la progettazione delle future misure europee a sostegno dell'occupazione giovanile? Grazie e mi scuso per la voce.

57:50 - 57:55

Li Andersson

No problem at all. And then from Renew, Mr. Petrov.

57:55 - 59:51

Hristo Petrov

Thank you Chair. Señor Selvaggi, thank you for your work on this special report and for your presentation today on its main findings. I'm the rapporteur for an implementation report on the Youth Guarantee and I believe we share the same conclusion: while significant efforts have been made to promote youth employment, considerable work remains to be done to achieve our objectives. Your report highlights that 25 billion from the Cohesion Fund has been mobilized since 2014 to tackle youth unemployment, and this is a substantial investment. However, the key issue is the sustainable integration of young people into the labor market, and it's not only about funding but about using it effectively.

My first question concerns hiring incentives and the deadweight effect you identified, where funding supports jobs that would have existed anyway. In my report, I recommend ex-ante and ex-post evaluations to ensure these incentives create opportunities for young people who would not otherwise access employment. Could you elaborate on the methodology for assessing these hiring incentives and identifying those that are poorly targeted? And my second question concerns the most vulnerable groups, particularly inactive NEETs, who face multiple barriers to employment. Our recommendations adopted today call for combining active labor market policies with social services, such as support in accessing housing and transport.

Have you found examples of such integrated approaches in the programs you audited? And if so, did they improve outreach and outcomes for inactive NEETs? Thank you.

59:51 - 59:55

Li Andersson

Thank you. And then Mrs. De La Pisa Carrión, please.

59:55 - 01:01:52

Margarita de la Pisa Carrión

Perdone, que llevamos un día donde todas las comisiones se han juntado. Vengo de España, un país donde la tasa de paro juvenil entre 15 y 24 años se situó en torno al 23%. Es decir, bastantes puntos por encima del 15% que es la media europea. El empleo se genera de dos maneras: o bien por parte de las empresas, lo que es el empleo por cuenta ajena. Aquí, ¿cómo afecta la dificultad que están teniendo las empresas en muchos sentidos, no?, como es el precio de la energía, como es la alta burocracia, como es las cargas cada vez más grandes para las mismas, ¿no?

También incluso las cargas laborales o la incertidumbre o la inseguridad jurídica que también a veces tiene que ver con lo que es el entorno laboral y de contratación. Primera pregunta. Y segundo, por otro, la otra forma de generar empleo es el autoempleo. Pero vemos muchas veces como las cargas que también deben enfrentarse quienes quieren emprender o darse de alta son desproporcionadas cuando todavía hay la incertidumbre de no haber generado actividad. ¿Cómo afecta esto al empleo juvenil, ¿no?

Entendemos que si el autoempleo es difícil en cualquier franja de edad, todavía más si no hay experiencia y la juventud se tiene que enfrentar a un conocimiento o a una dificultad añadida, ¿no?, que como no tiene la madurez puede todavía hacérsele más difícil, ¿no? Tardan en encontrar y en conseguir ingresos, ven antes que tienen que anticipar inversión. ¿Cómo se puede desatascar esta situación para que en caso de que no haya empleo por cuenta ajena puedan incentivarse, ¿no?, lo que es el autoempleo. Gracias.

01:01:52 - 01:02:00

Li Andersson

Thank you very much, and from the S&D, Mr. Arvanitis.

01:02:00 - 01:03:36

Konstantinos Arvanitis

Σας ευχαριστώ. Από την Ελλάδα είμαι, έχουμε μία εικόνα, δηλαδή σε μας η ανεργία στους νέους μέχρι 29 ετών ανέρχεται περίπου στο 16,5%. Όχι καλό νούμερο. Δηλαδή απ' τα χειρότερα στην Ευρωπαϊκή Ένωση. Η έκθεση επιβεβαιώνει κάτι που όλοι μας και οι άνθρωποι γνωρίζουν ήδη πολύ καλά πως μια επιδοτούμενη πρόσληψη δεν ισοδυναμεί αυτομάτως με σταθερή και αξιοπρεπή εργασία.

Και είναι ένα εργαλείο καλό για τους εργοδότες, αλλά δεν ξέρω αν είναι καλό για τους εργαζόμενους. Θα σας πω την εμπειρία μου. Ήμουν αρκετά χρόνια άμισθος πρόεδρος σε θεραπευτικές κοινότητες για χρήστες τοξικοουσιών. Χρησιμοποιήσαμε προγράμματα της Ευρωπαϊκής Ένωσης και πάνω που είχαμε εκπαιδεύσει και είχαμε έτοιμο προσωπικό, έπρεπε να φύγουν αυτοί για να 'ρθουν κάποιοι άλλοι. Αυτό δεν βοηθούσε ούτε την εργασία τη δουλειά, δηλαδή την παροχή υπηρεσιών, ούτε εξυπηρετούσε την αξία των 25 δισεκατομμυρίων ευρώ που έχει η Ευρωπαϊκή Ένωση για την αξιοποίηση γνώσης, πόρων και δράσης.

Σαν να κάνουμε δηλαδή τους ανθρώπους αναλώσιμους με ευρωπαϊκά κονδύλια. Επ' αυτού, επειδή οι άλλοι με καλύψατε σε πολλά πράγματα, θα ήθελα σας παρακαλώ πώς μπορούμε να δημιουργήσουμε συνθήκες μόνιμης και σταθερής εργασίας αφού εμείς επενδύσαμε στους νέους εργαζόμενους με χρήμα επιδότησης. Ευχαριστώ πολύ.

01:03:36 - 01:03:43

Thank you very much, and from the S&D, Mrs. Vind.

01:03:43 - 01:05:26

Marianne Vind

Thank you, chair. Jeg vil gerne tale dansk.

Mens arbejdsgiverne de mangler arbejdskraft, er der stadig alt for mange unge mennesker, der ikke har et arbejde. Rapporten viser godt nok, at ungdomsarbejdsløsheden er faldet markant, og det er godt. Men i 2022 var hele 4,7 procent af de unge europæere stadig arbejdsløse. Det er helt afgørende, at unge får en god start på arbejdslivet. Det er det første job, og det handler ikke kun om løn.

Det handler også om at få en chance, lære noget, få kollegaer og mærke, at der er brug for en. Begynder man derimod sit arbejdsliv med en lang periode uden et arbejde, kan det få konsekvenser i mange år. Jo længere tid man står uden for arbejdsmarkedet, jo sværere bliver det at komme ind. Derfor skal vi gribe de unge tidligt. Og vi skal tilbyde dem indsatser, der fører til varig beskæftigelse.

Det er især noget af det, jeg gerne vil tage med fra jeres rapport. Vi skal ikke bare måle, hvor mange unge der deltager i en ordning eller får et job i nogle måneder. Vi skal se på, om de er i arbejde på den lange bane. EU's midler skal bruges på det, der giver de bedste og mest varige resultater. Mit spørgsmål er derfor: Hvad er det vigtigste, vi og Kommissionen kan gøre for at sikre mere målrettede indsatser og varige resultater uden at svække medlemsstaternes ansvar?

Tak.

01:05:26 - 01:05:45

Thank you very much. This was the round of group representatives. So, Mr. Salvaggi, I will give the floor back to you for answers and comments to the points raised, please.

01:05:45 - 01:12:44

Carlo Alberto Manfredi Selvaggi

Thank you very much, Chair, and thank you to all members for their interesting questions. I will start with the sustainable integration, the definition in the in the report. And the first thing we have to underline is that sustainable integration goes beyond initial job entry and encompasses three main aspects: stability and duration of employment, quality of job matches and career progression, and employability aligned with labor market needs. So the point in the in the report is that it's important not only the numbers of employee, the new workers, but it's important the stability of their job, that it creates the conditions for the long-lasting duration of their their job as well. The audit also found that this concept was not clearly defined or operationalized in most audit programs.

And this is important because we consider that the monitoring of the results and the outcomes foreseen in the in the EU-funded programs are limited to a small a few months after the entry in the labor market. And we need to to have the results in a long period, 12, 18, and possibly 24 months.

And this is very important because we know that the phenomenon of NEET persons who are not in employment, education or training has been declined, but inactive NEETs, who are those who are not seeking for work or training, are in comparison of the total NEET even increased in some countries like Germany and Spain. And so this is my answer to all the questions regarding the NEET and the inactive NEET. It's the most important to outreach these persons and it's not only a problem of providing funds. It's a more general problem because the inactive NEETs are facing against a lot of problems like social barriers, health problems, and the outreach them involves a multidisciplinary solution. I can take an example from my last latest audition in the TRAN committee when I presented my work regarding the sustainable commuting around urban areas.

And we saw that the peripheral areas and people and young people who live in that area are facing against problems to reach the wide pool of jobs. So outreach young people, inactive young people, means to solve the problem even the transport problem. Regarding hiring incentives, we know that in some period, and we examined the pandemic period, the COVID-19 period, or even in a period of downturns, hiring incentives could be a good solution because the hirings make a high number of new employee. But hiring incentives alone, without matches with the labor market needs or without a focus in targeting in that incentives, could make higher the risk of deadweight, which are the jobs that would have been created anyway without examine the skills of the young people who are involved in that programs. Of course, it's important to have a framework regarding the creation of new jobs.

In Spain, in particular, we examined the situation and this solution relies on hiring incentives and job retention. Job retention is another good solution to make the labor stable in a long-lasting period. Regarding the self-employment, we didn't examine properly in the report the self-employment, but it's a good point and we could examine in one of our next reports.

How can we make stable and long-lasting the the new the new jobs? This is the point of the report. This is the real point of the of the report. And we can say we need first of all most indicators of long-lasting results, not only limited in the few months, the first few months after the job the job entry. And linked to this is the the implementation of the indicator, for example, in the Youth Guarantee, because we don't want, and it's very clear in the report, to increase the administrative burden of Member States, but we need to have, and the Commission and the Parliament as well needs to have the results on a long-lasting period.

I hope that more or less I answered to all the questions.

01:12:44 - 01:12:54

Li Andersson

Thank you very much. And I then ask if there are any other members who wish to take the floor during catch-the-eye. I have Mr. Oliveira. Please.

01:12:54 - 01:14:48

João Oliveira

Obrigado, Presidente. Quero começar por saudar o senhor Salvage e o Tribunal de Contas Europeu sobre este relatório relativo à política de coesão e às medidas de apoio ao emprego dos jovens. O relatório diz-nos que estes subsídios à contratação de jovens nem sempre foram concebidos para garantir empregos sustentáveis para os jovens e que, em alguns casos, eles são manifestamente ineficientes em consequência de um efeito de inércia e de um efeito de deslocação, sendo o efeito de inércia identificado como as circunstâncias em que aqueles postos de trabalho que são subsidiados existiriam ou manter-se-iam mesmo sem esse apoio dos fundos europeus e, no caso do efeito de deslocação, aquelas situações em que os subsídios acabam por induzir entre as entidades patronais a contratar uns trabalhadores em vez de outros em função dessa subsidiação dos fundos europeus. Ambas as conclusões apontam num sentido de uma utilização destes fundos europeus mais a favor das entidades patronais que acabam por encontrar forma de ter postos de trabalho subsidiados por fundos europeus do que propriamente a favor dos jovens trabalhadores que, naturalmente, terminados esses subsídios, acabam por não ver mantidos os postos de trabalho. A pergunta que eu queria colocar é se nas diferentes nos diferentes regimes que avaliaram nos diferentes países que são avaliados neste estudo, se encontraram alguma linha de saída para estes problemas ou se estes problemas são efetivamente comuns a este tipo de utilização dos fundos europeus na prática para subsidiar as entidades empregadoras e não garantir o emprego aos jovens trabalhadores.

01:14:48 - 01:14:54

Li Andersson

Thank you very much. And also Mr. Petrov asked for the floor. So please.

01:14:54 - 01:16:02

Hristo Petrov

Thank you. Thank you, Chair. And regarding the monitoring framework and indicators, this issue is also central to to our report. If we don't know the outcome of our public policies, we cannot adjust or improve them. We can see from the Youth Guarantee's monitoring framework that there are gaps in the collection of data for follow-up indicators, which is even absent in some Member States.

The monitoring framework also lacks qualitative indicators that would provide a different perspective on the sustainable integration of young people into employment. So my question is directed at the Commission representative. Does the Commission engage in dialogue with Member States to strengthen data collection regarding the outcomes and monitoring of public policies relating to youth employment? And do you think this aspect could be improved within the framework of the next MFF, in particular to break down data on employment policies by age group? Thank you.

01:16:02 - 01:16:17

Li Andersson

Thank you very much. So I will first give the floor to Mr. Salvaggi for final remarks to these questions, and then we have a representative from the Commission here, so I will give the floor to Mr. Nerlich after that. So Mr. Salvaggi, please.

01:16:17 - 01:19:41

Carlo Alberto Manfredi Selvaggi

Thank you for these more questions. For hiring incentives, I can repeat that hiring incentives are useful because they can produce quick employment effects, especially during downturns, but when used alone and without safeguards, they often result in short-term jobs. This is the problem. They do not ensure skill development or retention after subsidies end. And we need, and all we are saying the same thing, that the new jobs are long-lasting jobs, not quick jobs or early jobs.

Because another problem regarding the hiring incentives used alone is the risk of deadweight I mentioned before. That this risk is that the finance could provide money and finance jobs only for jobs that would have been created anyway, so there is not efficient spending of the EU money. This is how can we use the hiring incentives without this risk? With monitoring of the results, as I said before, but targeting these incentives, matching with labor market needs, and with the creation of a clear link between the needs of the labor market and the employers and the incentives to hiring much more young people is possible. The indicator of the results is another very important point, and we clearly underlined in the report that the actual and the indicator that we have and that we could have in the proposed post-2027 framework includes an output indicator and a result indicator for youth employment, but the result indicator does not include a long-term perspective.

This is the point. And so, as it stands, this means that the future MFF framework would still not show whether EU-funded measures have durable effects beyond the short term. But on the other side, I have to underline what I said before, that we don't want, as European Court of Auditors, to increase the administrative burden of Member States. And so we suggest, and this is very clear in our recommendation, recommendation one for all, that we can better use of indicators that already exist, for example under Youth Guarantee framework.

01:19:41 - 01:20:08

But for sure, to have indicator on the results after important period, more or less 12, 18 months, is very important to have policies that rely on effective results. Thank you.

01:20:08 - 01:20:15

Thank you very much. And then the European Commission representative, Mr. Christoph Nerlich, for two minutes.

01:20:15 - 01:23:45

Christoph Nerlich

Thank you very much, Chair, honorable members, Mr. Sarvaggi. The European Commission welcomes the report. The report recognizes the significant progress made in reducing youth unemployment across the EU and confirms that the Commission is using its available policy and funding tools appropriately to support the Member States. This has helped to reduce the youth employment rate for the age bracket 15 to 29 years from around 20% in 2013 to lower than 12% in 2025. The Commission also welcomes the Court's acknowledgment of the impact of the Youth Guarantee and the reinforced Youth Guarantee, which have supported around 63 million young people to go into employment, education, apprenticeship, or training.

And in addition, the report also recognizes the effective mobilization of cohesion policy instruments, notably the Youth Employment Initiative and the European Social Fund. But of course, as was already highlighted here in the room, and you, Madam Chair, you underlined it, youth unemployment remains roughly double that of general unemployment, so clearly work remains to be done. So the Commission welcomes the Court's recommendation, or recommendations, and has accepted all three of them to further improve our support to Member States. We will continue supporting Member States in pursuing the sustainable labor market integration of young people, including through the design of effective hiring incentives and the exchange of good practices, notably on outreach measures. And I just wanted to highlight also that as regards hiring incentives and as the member of the Court correctly stated, they can be useful if well-designed.

And this was actually what we had underlined in the reinforced Youth Guarantee. And our meta-analysis that was recently published actually shows that overall the ESF hiring incentives proved to be effective. So this is also important to underline. As regards the question by Mr. Petrov on the indicator framework, so I think it's important to distinguish that there is an indicator framework for the ESF, and this is where the Court identified that there were some indicators, notably on the more sustainable integration, were missing. However, these do exist in the Youth Guarantee indicator framework.

And that indicator framework has been in existence since the inception of the Youth Guarantee over 10 years ago, that has been discussed with Member States and agreed with Member States. And as the honorable member of the Court highlighted, it's a balance between, you know, having the right information at hand but also not over-burdening the system. So I don't think that the indicator framework system is up for change as regards the Youth Guarantee. When it comes to the MFF, the indicator framework has changed, I mean overall for the MFF considerably in the sense that the performance regulation that the Commission put forward has identified, or has simplified and consolidated the number of indicators used across the EU budget. Now the main indicators as regards youth unemployment stay the same, so this is, I would say, more or less what we have currently in the ESF+ regulation.

Thank you very much.

01:23:45 - 01:54:35

Li Andersson

Thank you very much, and thank you to all of the colleagues and representatives from the European Court of Auditors for this exchange, and we of course look forward to the cooperation with you also in the future.

So thank you very much. Um, now I have a question for those that are representing the political groups here in this room because we are ahead of schedule and we also have an extremely tight schedule for the exchange on 28th regime. Do you think it is possible to get those members that are interested in that item and I understand it is specifically you know an item of great interest to get them here for 5:15. So we could start at 5:15 and get more flexibility, more time for the actual debate. I hear no protest but I saw people picking up their phones, so I suggest we aim at starting the exchange on 28th regime at 5:15.

So please inform members that are interested in this specific item.

Okay, we still renew and greens try to get your members and your shadows here but I think we I will start now because as I said I'm worried about the the timing. So dear colleagues, as you know among the legislative files currently discussed in the EMPL committee is also the EMPL opinion to the JURI committee on the commission proposal for the 28th corporate regime or EU Inc. The committee has been working on the opinion for some time and there's already been a number of shadow and technical meetings and as there still is many open questions and also concerns, this is why despite working under extremely tight deadlines we decided to have this exchange of views with experts in the field also for the shadows and the group members to be able to ask questions. And we have invited four experts: Corrado Malberti, notary and chair of the CNUE company law working group, joining us remotely; Marcus Meyer-Erdmann, senior researcher at the European Trade Union Institute; Pedro Oliveira, BusinessEurope director for legal affairs; and Isabelle Schömann, deputy secretary general from ETUC. You will each be given the floor for six minutes for your presentations which will be followed by a brief intervention by Mr. René Repasi, JURI rapporteur, and then we will move on to the Q&A question.

So our first expert is Corrado Malberti, notary and chair of the CNUE company law working group and I will be strict with the speaking time so please limit the intervention to six minutes. Thank you.

01:54:35 - 02:00:07

Corrado Malberti

Thank you very much chairperson, it is a pleasure to be able to participate in this meeting in this hearing before the committee. I will be really fast. Next please. I focus my intervention on the role of preventive control. Why are preventive control important?

Because they ensure the respect of the rule of law in view of protecting the weak parties in business relations. They ensure that the information in business register is reliable. They enhance the mutual trust among the participants in the internal market. Clearly they also increase the level of transparency and prevent abuses. This is for the benefit of all business transaction occurring in the European Union.

This is contrary to the model we have for example in the United States. Next please. Well the current level of preventive control is enshrined in directive 1132 in this article, article 10, article 13c and article 13g.

These are minimum harmonization provisions that are applicable to all limited liability companies in the European Union. They've been finalized, reviewed finally in 2025 with Directive 25 of 2025. And they provide a complete framework to ensure that when you create a company, when you carry out some business transaction, some controls are in place to the benefit of essentially all market participants. On the other hand, the U-Inc proposal only provides a single article to preventive control, Article 14. Next, please.

And the rules that you find in these different set of provisions are quite different. This is the current situation of the acquis. You need to verify the legal capacity, intended as the capacity to act of the person that create a company. You need to verify the object and the name of the company vis-à-vis the national law. You have to carry out a check on the article of association of the company you're creating, if you're modifying the bylaws, and you have to verify that all substantive requirements for the incorporation of the legal entities have been complied with.

Then there are other requirements like compliance with formal requirements and the need to verify that the mandatory minimum content provided by the national law is in place. And then you have AML and tax-related checks. Next, please. On top of this, the directives also provide other controls. This is the current situation still.

And in particular, you will need to verify the correct use of identity identification, the correct use of identification means, in particular according to the eIDAS regulation, and the verification of the correct appointment of director and if the Member States require so, the rules, the correct use of rules on directors' disqualification. Next, please. On the other hand, we should say that the U-Inc only provides very few controls. There is not a real control of the identity. There is just a check on formal requirements, no substantive requirements of the article of association.

There is a check on the mandatory minimum content, but this is limited only to what is said in the annex of the regulation, which is clearly not as broad as what you have in the national law. You will need to check if the name and the object comply not with the entire legal system in which the company will operate, but just with the regulation. And you will have just to check if the parties that will create this legal entity have legal capacity. It is not really clear how you will be able to do that. No check on the fact that the persons have a capacity to act and so to enter in legal relationship, verifying that are sound of mind, for example.

Also, there is a necessity to check that contribution have been provided. Next, please. So, to be really clear, and this is also my last slide, we should say that there are many controls that are missed. And this is important because in some previous meeting regarding the U-Inc that took place in Brussels in the last days, it was said that the controls you have for the U-Inc are the same as you have currently in place for private and public limited liability companies. This is not true.

This is the list of controls that are different, more lenient. And this, I would say, more lenient control will probably result in a vehicle that would be more prone to abuse. And this to the detriment of the internal market.

For this reason, I think it would be important to be sure that a level playing field is ensured between a directive that was approved 2025 and this new proposal for a regulation that in the end try to achieve a goal that is similar to the one that was pursued in the directive of 2025, that of ensuring that companies can operate at the cross-border level safely by providing the minimum set of information that is necessary to engage in cross-border transactions. Thank you very much.

02:00:07 - 02:00:19

Thank you very much, and I then would like to welcome our second expert, Mr. Marcus Meyer Erdmann, who is senior researcher at the European Trade Union Institute, so please, the floor is yours.

02:00:19 - 02:07:06

Marcus Meyer Erdmann

Thank you, Madam Chair, for for the opportunity to speak at this EMPL hearing. There are my slides, thank you. Next slide, please. I am a researcher at the European Trade Union Institute, but I'm also an assistant professor at Erasmus University, and we are researching cross-border company mobility across the EU for the last 25 years. We are mapping those transactions, and based on this, we have written now two policy briefs.

This is the latest one in which I mapped the potential issues regarding this EU Inc proposal based on the Commission's proposal and the central policy changes that I see. Today, I will focus due to the limitation of time on three key issues. Next slide, please. And the first one is the scope. Now, the Draghi and Letta reports, they had very clear objectives, and I think they are they are just, namely to focus on innovative startups and scale-ups to be fostered in the European Union.

I think no one from either business side, I'm not speaking for BusinessEurope, but we will hear from my colleague in a in a moment, to the trade unions, no one is against innovative ideas in Europe, and they will help the internal market. However, we already have a broad framework on cross-border company mobility that is already being used by multinational corporations. If we are looking at cross-border company mobility, 99% of transactions nowadays are done by these corporations, and there is already a legal framework in place. Initial report initial proposals were also to limit it to startups and scale-ups. However, now the Commission proposal is without any limitation in scope.

And therefore, this draft regulation is open to all companies and therefore also corporate structures that we are mapping in our research. And therefore, what I'm what I'm going to show as as risk is based on this research. We already see that there are good transactions taking place of genuine economic activity, but there's also abusive practices that we are already mapping across the EU. And this tool will, next to the SE, which is already in place and which is being used already for corporate circumvention of of labor rights, this will be even even more so the case because we have right now around 5,000 SEs in Europe. The estimates from the Commission are up to 300,000 EU Inc companies by 2030.

Therefore, the scope is therefore also creating a much larger scale for potential abuse. There's also sectors with higher risk of abuse. I don't have time to go into details, but there are certain sectors where we see a lot more letterbox companies being registered and being then used for practices that are not, you know, innovative startup practices that are to be welcomed.

Also, if this is really going to be for startups and scale-ups as claimed by the European Commission, then there should be clear definitions and legal certainty for all parties involved. And particularly Article 4, paragraph 2 of the Commission proposal is problematic when it comes to labor and social security rights because this proposal by the Commission is unclear by saying matters that are not covered by this regulation or the articles of association shall be governed by national law in which the EU Inc has its registered office. And this will not only lead to potential circumvention of social rights, individual workers' rights or collective rights, say an EU Inc being registered in Ireland then could apply Irish labor law to someone working here in Belgium, but also an Italian company, for instance, would all of a sudden be faced with, say, Irish labor law if they have registered their company in the past there. And therefore this then also introduces into the Italian system 27 other legal frameworks when it comes to labor and social rights. So it goes both ways, that there is no legal certainty for any party involved and therefore this needs to be fixed when it comes to individual and collective labor rights.

Next slide, please. And the main point that I would like to focus on is employee participation. This proposal is not new. This is the third time and this is the third time that we have the topic of employee participation, which is one of the key issues at stake. And the Commission proposal only links it to the registered office, which would mean that, and I will have at the next slide a map of Europe which will show that, we have 18 different EU systems with employee participation and a company could choose an employee participation-free country for registration but fully operating in another EU member state and thereby circumventing employee participation rules.

So therefore the EU Inc is not neutral, it would be to the detriment of employee participation rights. And therefore key safeguards are needed. You can keep the registered office for freedom of establishment of companies fair, but then have a place of employment as special connecting factors. Branches and subsidiaries need to be addressed because we already see that this is being abused by corporations such as Tesla, which are using then the SE to circumvent local laws. And the negotiations for tailor-made solutions was a compromise that is already rooted in the EU acquis, namely in the European Works Councils Directive, in the SE Directive, as well as the company mobility package, where also the business side was happy that it's not a one-size-fits-all, but it's a tailor-made solution for all parties.

Important difference here is, however, a dynamic application because we see this freeze-out effect when it comes to the SE. And a non-regression clause to prevent forum shopping because, again, if the EU Inc is more attractive for circumvention, then it will be used because it's not only innovative startups that are going to use it. Next slide, please, just to show the map. And next slide, please, on ESOPs, just to, I know I'm out of time, the point that ESOPs cannot be a replacement for remuneration because otherwise it would create adverse incentives to use them and not just for attracting talent. Next slide, please.

And lastly, I'm out of time, but I would like to raise the point that this legal basis in itself is also problematic and is creating an issue for both businesses in terms of legal certainty but also workers. And I don't have time to go into details, but I perhaps get some questions on that. Thank you.

02:07:06 - 02:07:15

Li Andersson

Thank you very much. And I then give the floor to the representative of BusinessEurope, Mr. Pedro Oliveira, for the next six minutes.

02:07:15 - 02:13:26

Pedro Oliveira

Thank you, thank you, Madam Chair, and thanks very much for having invited BusinessEurope for this very important debate and timely debate. This is the first big hearing on this topic in the Parliament since the proposal was there, so we're happy to be here. This is a big priority for BusinessEurope, the EU Inc, and for the wider business community.

And this is not only BusinessEurope that is asking for this. This was, as my colleagues were mentioning, mentioned in the Draghi report, the Letta report, the Council conclusions on many on many occasions and this house as well, which has supported and has committed to deliver an instrument. Plus, there is a grassroots movement of around 25,000 companies, most of them small, startups and scale-ups, which have co-signed a petition, the called EU-wing petition, and together with venture capitalists that are really advocating for the need for this in Europe. So, from our perspective, the EU-wing project should be supported if Europe wants to take a definite step towards being more competitive. This is also about the credibility of Europe to do so.

Is the EU-wing going to solve all the problems that businesses are facing in the internal market? And we BusinessEurope have been advocating or and pointing to a lot of them. No, it is not. And we should stop pretending that to that we are going to turn the EU-wing into something that it has not been designed to do. So it is part of the solution.

It is a help way to to for for business, an enabling measure and it's mainly addressing the different 27, let's say, corporate legislations that businesses face when they're setting up their shop. And and this is where the EU-wing can play can play a role, but no, this is not supposed to solve every single problem. And no, this is not an SE. The SE is a completely different instrument. It's an European company form which the EU-wing is not.

So we need to make that distinction because this is not supposed to be mixed up. So is it also an instrument to solve other problems that are being identified, whether in whether we're talking about fraud or money laundering or or many other abuses, circumvention of labor law? I mean, is this the main instrument for the EU? No, it is not. So we should not also use the EU-wing to solve problems that affect all companies and all stakeholders.

This is a company law instrument, an optional instrument that is not going to solve every single problem. So with from these two perspective, it's important that we make these distinctions. Now, from BusinessEurope perspective, to make this right, to make the proposal right, we think that we need to stick as much as possible to the Commission original proposal. We think that the Commission original proposal hits the right notes. It's not perfect.

There are things that need to be improved and, for example, insolvency is one of them where we have quite a few criticism, but the right elements are there. We need to keep this a regulation because this is the best antidote against, let's say, gold-plating and fragmentation of the internal market, which the EU-wing is intended to solve. So we need to to keep this. Needs to be simple and I emphasize the word simple because we have seen the documents coming from this house, the first draft documents, which we think are adding a little bit of complexity that will make this very unattractive to use. Digital by design, relying on once only, which and all of these things are not new.

We have, as my colleague was mentioning, the 2025 directive on company law, which added most of these elements. The creation digitally or simple or recognition of documents. This is all it's already existing in the internal market.

It's just being implemented by Member States right now. We also think that it should be open to all companies, so we are totally against a reduction of the, let's say, of the scope of this. Let's think that a company needs to be reassured that when it chooses a company form, it doesn't come with an expiration date. This is wrong to have an expiration date. But where is the brand of EU-inc if you know if you grow and you become more successful that you have to change legal form?

So this is not valuing the brand, this is not making this system more attractive, and it doesn't give any legal certainty if you have to make changes when you are on the way to success. Then we also like the fact that there is the list of prohibited practices. I think this brings a big added value. And then my colleagues earlier were mentioning about safeguards. And I dedicate just the next minute of my intervention to safeguards.

So I heard the words: it provides little controls and there's only one single article on preventive control. I mean, sometimes I have the impression I didn't read the same text. So it is not true that there is only Article 14. The whole acquis on company law, on anti-money laundering, on tax, on labor, it continues to apply to the EU-inc. So the fact that it's not written in the proposal does not mean that the general EU acquis is not applicable.

So we need to be very clear on this aspect and not try to mislead this reading of the article. We do agree that we need more, we need safeguards, the right safeguards need to be there, but they should not discriminate the EU-inc against other normal companies. So I finish my intervention to say we need to make this right and we are happy to contribute to that endeavor. Thank you very much.

02:13:26 - 02:13:35

Li Andersson

Thank you very much, and I would then like to give the floor to the representative from the ETUC, Mrs. Isabelle Schömann, for the next six minutes.

02:13:35 - 02:19:11

Isabelle Schömann

Yeah, thank you, thank you so much, Ms. President, and thank you for inviting us to this hearing. In a nutshell here, what is very important here is that the EU-inc cannot, cannot be above the legislations and has to comply with the acquis communautaire and of course its whole, the full picture of the acquis communautaire and not just part of those. So the EU-inc should be brought back to what it was at the beginning of the discussions, of course for startup and scale-up, exactly those forms of businesses that for the moment have no access to investment. That's the problem. The problem is certainly not the constituencies of those businesses, the workers, and clearly not should be used to abuse a system in terms of money laundering and of course fiscal evasions.

We know that indeed in the European Union, the way to do business might be abused, 68% of the SE are shelves SE, so it's a business in itself. And I think this is exactly what should be prevented with a new form of business that will clearly be of competition within national system of business possibility to operate. And this has to be taken on board. It's not in creating more competitions within the internal market that we will get more talent here in Europe. On the contrary, it's to provide very good working conditions to those talent.

And it starts with of course the scope, so back to startup and scale-up, and here indeed access to investment in the full respect of workers' rights in the acquis communautaire and of course with the respect of the rules where the workers are their habitual place of employment. So no divisions in terms of a registered seat versus a seat where employer should work but could not profit from the labor protection here.

Safeguards are important. This is what we need to have. The reference to individual rights but of course collective right, it has been mentioned here. The board employee representations is exactly what is at stake. It's not new but it has to be reinforced.

And here as it was mentioned, 18 member states have a form of co-determinations and it is exactly where here the EU Inc should provide a not only a level playing field, so a non-regression clause would be very important in reference to what exists but of course a more favorable clause is very important here to provide what workers need to be part of the governance structure. Digital by default, no need to invent the wheel, in particular if it's to weaken the existing level of protections as it was adopted democratically by this house. And I think this is very important. The same goes for insolvency. Here I would like to make clear that workers are special creditors and in that respect closing a business in 48 hours will not help for those workers to get access to the wages they have worked for and should own.

So here clearly we need to maintain this protection. The European is not here to weaken the level of protections of workers, clearly not. On ESOP, so the stock options, it is very important that we don't mix things and that we are not a kind of alignment of shares with remunerations. A share is not a remuneration, should never be a form of remunerations. And here we clearly need to have a divide whereby those kind of benefits that represent share options are not put in a form of a risk for the workers.

And I just give you, just give you an example of existing practice here that we don't get any further remunerations increase but some of our colleagues are asked to buy shares if they want to have an increase of remunerations. It's not acceptable and this practice should not develop in the European Union. And of course here what we need is to prevent, to prevent here again the issue of money laundering, to prevent the issue of fiscal fraud and social security fraud. So those business who are claiming to be EU Inc should be registered as business and should comply with the business obligations. And here of course we are in line with the notaries to say we need the time to make the preventive checks because when a fraudulent business is operating in the European Union, it's too late.

The damages will be carried by workers and by consumers and this is not what the European Union should provide for. So in a nutshell that's the point, the points that I would like, I wanted to make. And with the last minute of course we need to assess the situation of the legal base. It's nothing new. It is something that the ETUC has already flagged very early in the process.

And of course it's very important to assess the situations in light of this discussions here, potentially not so much with the EMPL committee, we understand it's an issue dealt with by the JURI, the rapporteur, but I think this is something that we should all be well aware of. Thank you so much, back to you.

02:19:11 - 02:19:23

Thank you very much. And then I have, then I will give the floor to the JURI rapporteur for the proposal, Mr. Repasi. Thank you for being here for the next three minutes.

02:19:23 - 02:23:40

René Repasi

Thanks a lot, Madam Chairwoman, for inviting me to EMPL Committee. It's always exciting for an MEP to be for the first time in another committee than the one that you're used to, as we can see how different committees work differently. So thanks a lot for the opportunity and to present some thoughts. We had today the JURI meeting with the consideration of draft report. There the advantage is rapporteur has more minutes than three, so I try to be even more condensed.

But let me in particular start with the very fact that I'm grateful for EMPL to do the work on the opinion and also under such time pressure. It's the rules of procedure that forces us to that sort of schedule. We also tried to accommodate a little bit the situation so that EMPL has a bit more of time to conclude the negotiations with the promise that a report that has found a majority will still be taken into very due consideration. And in that sense, I'm looking forward to receiving the results of the opinion. From JURI's perspective, I think what I would like to add is one thing, namely what we want to create with the EU-INC is a limited liability company form that has the privilege of being quickly established, all digital, once only, within two working days, but most and foremost having automatic access to the entire internal market.

Unlocking the potential of the internal market in particular for innovative companies that ideally become the next unicorns, so they have to grow quickly and become scale-ups. In order to have this, we need a so-called stable connecting factor so that anywhere where you are in the internal market, we can clearly identify to which legal order such corporate form belongs, because otherwise crossing the border means committing suicide from a corporate perspective. And therefore there is no alternative to a place of registration in order to have a stable connecting factor. Markus was already mentioning it in his contribution. But if we are doing so, we must be also aware that that means that the place of the economic activity and the place of the legal registration can be two different countries.

And that normally member states, if they are looking at vulnerable or weaker parties, be it consumers, be it creditors, be it even investors, be it workers and employees, they look at the place of the economic activity. And all those standards would be put into some sort of competition if the relationship to the registered seat is not regulated. And that's what we generally call forum shopping. And if EU-INC is supposed to become a seal of quality, it must make ensure that the competition that we want to trigger with EU-INC is a competition based on merit, the old way of how Europe looks at competition, and not competition on the lowest standard and basically determining the price by the lowest standard that is achievable. Hence, in order to give startups, scale-ups the right highway to come to a proper EU-INC, we need to preserve the stable connecting factor of the registered seat, but we need to address at the place where economic activity is taking place that standards are protected.

Hence, we need to have a connection to the place of employment if we want to deal with the questions of determination. Given the multitude of codetermination and employee participation regimes in Europe, it is only right to then look at second instance at tailor-made solutions with the negotiations procedure where we do have sufficient experience and we should learn from this experience. I think that the suggestion made by Markus Meyer-Ertmann is a good one where also the JURI wants to go into this direction. JURI is a committee full of lawyers that know a lot about law, but not per se a lot what is happening in employment. And that's the reason why we need your expert advice on this matter, how the best would be dealt with in matters of labor law, be it individual or collective or employee participation.

Hence looking forward to the debate within this committee and even more on the final result of the opinion.

02:23:40 - 02:23:57

And then I will give the floor to the experts to answer. And if and hopefully there will be time for a second round where you can reply as part of your final remarks. But I will start with the shadow rapporteur, Mr. Danielsson.

02:23:57 - 02:26:44

Johan Danielsson

Thank you, Chair. And thank you to all the speakers for being with us today. First, perhaps a question to Mr. Malberti from the side of the notary. Because when I looked at the reaction of this proposal for some institution in my my own home country, Sweden, I noticed that the police authority, the tax agency, the public prosecution authority, and the enforcement authority all have warned against the proposal and that it could make it easier for criminal networks to use this as a legal business structure. So from your perspective and in terms of controls that are in place in the proposal from the Commission, do you share this risk assessment?

And if you perhaps could, because you only had six minutes, if you could perhaps further develop what would be your priority in terms of additional controls and checks at the establishment of an EU Inc in order to avoid this? And then to ETUI, several times I've spoken to the Commission and I heard from your presentation that you don't agree, but that the Commission proposal would have no effect whatsoever on national labor law, be it individual or collectively. So I mean, it's clear that you don't share that assessment, but perhaps especially regarding Article 12 also on employment and participation right, if you could be clear what has to be done. Is one is there even an alternative to just take out Article 12 or should it be amended and then more in detail how should it be amended because I think it's important for our discussion in the committee. Then for BusinessEurope, perhaps my I mean if the main objective of the proposal is to get access to the whole internal market, I would assume also for these startups and scaleups to be able to get capital.

Then of course perhaps it's not so important that it's done within 48 hours. I mean all this, it's not like Spotify moved to the US because it took a week to establish a company. So what is the priority in order to achieve the main goal? Because I think then perhaps we can solve some of these peripheral issues. And also with what René said, if in order to get capital EU Inc need to be this seal of quality, I mean the fears that are put in place of member states, if they are correct, let's say that we run the risk that a large majority of the EU Inc companies actually are letterbox companies in construction, wouldn't that also then be a risk of the main objective of the proposal?

Thank you.

02:26:44 - 02:26:49

Thank you very much. And from the EPP, Mr. Radtke.

02:26:49 - 02:29:06

Dennis Radtke

Yes, I'm not the shadow rapporteur, as you might note, Chair, and as Mr. Danielsson knows. Romana Tomc cannot be with us, so she asked me to read it out on her behalf and my personal questions and point of view is for later. Dear colleagues, distinguished guests, today's discussion on the EU Inc is about Europe's global competitiveness. The EPP's priority is clear: we must make it easier for our companies in Europe to grow within the single market instead of losing them to the US or Asia. Of course, we agree that we need safeguards.

This new framework must not become a vehicle for letterbox companies or backdoor to bypass national labor standards. However, we must be pragmatic.

If we overregulate EU Inc, we will kill it before it even starts. If we overload this initiative with excessive administrative burdens and rigid governance structures, no startup will ever use it. If it is not attractive, it is useless. I have two direct questions for our guests. To Mr. Oliveira, what are the absolute red lines for businesses?

Which regulatory or administrative additions would make the EU Inc framework completely unattractive for young enterprises? And to Ms. Schömann and Mr. Meyer-Ertmann, how can we design safeguards in a modern, flexible way that fits the reality of agile tech startups rather than forcing traditional heavy corporate structures onto companies that need speed to survive? Finally, let's not let the perfect be the enemy of the good. We need EU Inc to remain a light, powerful tool for European growth. So far on behalf of Romana Tomc.

02:29:06 - 02:29:16

Thank you very much. And on behalf of Patriots, is it Mrs. De La Pisa Carrión or Mrs.?

02:29:16 - 02:29:20

Li Andersson

We would like both to take the floor. I don't know if.

02:29:20 - 02:29:23

Yes, so one of you in the first round and the other in the second round.

02:29:23 - 02:31:29

Mélanie Disdier

You in the first round and then me.

Madame la Présidente, chers collègues, donc merci tout d'abord aux intervenants pour leur présentation claire et instructive. Ce 28ème régime, c'est le résumé parfait de l'action de l'Union européenne : une idée qui vend le rêve d'une intégration toujours plus poussée et qui se termine finalement en usine à gaz qui risque de créer plus de mal que de bien. Donc je souhaiterais poser quelques questions pour éclairer un petit peu certains sujets puisque ce texte inquiète quand même beaucoup de monde. Donc ma première question s'adressera en priorité à Monsieur Malberti. En tant que représentant des notaires européens, vous savez mieux que nous ici l'importance que votre profession peut avoir dans le contrôle a priori lors de la création d'entreprise.

Vous avez déjà mentionné les problématiques liées au contrôle et je voudrais insister sur le délai accéléré que veut mettre en place la Commission. Pouvez-vous nous dire de manière réaliste combien de temps en moyenne prendrait un bon contrôle pour s'assurer au mieux de l'absence de fraude ? Seconde question s'adresserait principalement à Monsieur Oliveira. Elle concerne l'étendue de l'application du règlement qui permettra à des sociétés déjà implantées de changer de régime juridique pour adopter celui beaucoup plus permissif de société européenne. Ce faisant, ne craignez-vous pas que ce régime, loin de créer un terrain de compétition équitable, mette en place un support de dumping administratif au détriment des PME pour qui ce nouveau régime ne serait pas adapté à leur activité ?

Enfin, toujours à Monsieur Oliveira et lié à ma question précédente concernant les droits sociaux et fiscaux, les entreprises européennes seront toujours soumises aux droits nationaux des États membres de leur choix, notamment en matière sociale et fiscale. Ce faisant, pensez-vous que ce régime ira dans le sens d'une plus grande simplification administrative pour nos entreprises ? Voilà, je vous remercie.

02:31:28 - 02:31:35

Thank you. And the next shadow I have present is Mrs. Franssen-Porentak from the Greens.

02:31:35 - 02:34:26

Kim Van Sparrentak

Thank you very much. And thank you so much for your input. We had a shadow meeting this morning and I think some of the things that we're still unclear about can hopefully now be a bit more clarified. And actually there's for that matter actually one question that I would have for all of you. And that is because we've indeed seen, you know, the proposal in the Draghi report, in the Letta report, the European Commission came forward with it, we had our own INL in the European Parliament.

But in all those different instances, the idea and especially the goal of EU Inc or the 28th regime was different. And it's very difficult for us to negotiate on the basis of a very different goal. So I'm very happy to hear in one, two sentences from all of you, what do you see as the goal of EU Inc? What are we trying to achieve here? That would be really nice and helpful.

Thank you. Because because I have my idea, but curious if you have the same. Then specifically to BusinessEurope. In my view it is important that employee participation rights are not undermined through the EU Inc and that business in Europe gets the necessary legal certainty on what rules need to be applied. So now the way it says it now is that we should follow the rules on employee participation rights of the member state of registered office, but the person next to you already explained that that might lead to a situation where you have 27 different regimes in one member state because of the way that it would work then.

Because for example you would apply then German rules on employee participation in Italy. And my question is, do you have the feeling that you by having it like that give enough legal certainty to companies or do you think that we should in another way make sure that we genuinely make it simple for European businesses? Because right now it sounds a bit nightmarish if you would have all these different systems in one member state. And a last question to is it the SME? Very very fast.

Sorry. How do you see the risk for the abuse of the EU Inc for the circumvention of labor rights, money laundering and criminal activity in high risk sectors and what is the experience from the ground and would the simplified regime be an accelerator for abuse in your view because I think that's the last thing we want. Thank you.

02:34:26 - 02:35:34

Özlem Demirel

Thank you. And then from the Left, Mrs. Demirel.

Yes, thank you chair. I would like to speak in German if someone needs translation. Okay. Ja, danke schön, Frau Vorsitzende, danke für die Anhörung und auch für Ihre Inputs. Ich hätte verschiedene Fragen und ich würde gerne bei Herrn Oliveira anfangen.

Sie haben in Ihrem Input auf die Petition hingewiesen, wo ja eine Art EU Inc gefordert wurde, aber wenn ich diese Petition richtig gelesen habe, wurde diese Petition für Startups und Scaleups ausschließlich gefordert und nicht für alle Unternehmen und der jetzige Vorschlag sieht aber keine Begrenzung der Unternehmen vor. Könnten Sie das bitte bestätigen oder haben Sie eine andere Petition erwähnt? Das Zweite ist, Sie haben richtigerweise gesagt, dass die EU Inc keine SE ist, sondern etwas anderes ist. Ja, wenn ich es richtig verstehe und ich habe mich mit beiden Rechtsformen beschäftigt, geht die EU Inc viel viel weiter als die SE es schon macht. Und Sie haben hier einfach...