Summary of Opinions Adopted 513Th Plenary Session

European Economic and Social Committee

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Brussels, 5 February 2016

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Contents:

1.FINANCIAL INSTRUMENTS / TAXATION

2.ENERGY

The plenary session of 20 and 21 January 2016 was attended by Kacem Afaya, Deputy Secretary General of the General Union of Tunisian Workers (UGTT), AhmedbenTaharGalai, Vice-President of the Tunisian League of Human Rights (LTDH) and SlimGhorbel, member of the board of the Tunisian Industrial, Commercial and Handicrafts Union (UTICA).

The following opinions were adopted:

1. FINANCIAL INSTRUMENTS / TAXATION

• Legal framework for securitisation

Rapporteur:Daniel Mareels (Employers' Group – BE)

Reference:COM(2015) 473 final and COM(2015) 472 final

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Key points:

The EESC:

• welcomes the proposals to establish a system of "simple, transparent and standardised" securitisation (STS securitisations) and to amend the framework in respect of prudential requirements for credit institutions and investment firms;
• calls for action on this in the short term that should enable significant additional resources to be generated for bank funding. That is very important, for SMEs and households in particular;
• feels that bank funding and market-based funding should be considered complementary rather than competing and developed hand in hand;
• wants the rules to be sufficiently broad and the STS criteria to be realistic and feasible for all banks, both the large banks and the small local banks, which are involved in issuing bank loans;
• wants securitisation to be equally attractive to investors. There should be clarity as to the risk involved and who bears that risk, taking account of the whole chain from the issuer to the investor;
• feels that the important thing now is that the mistakes of the past are not repeated;
• concurs with the view that small investors and consumers should not have access to securitisation due to the complexity and risk involved. The Committee calls for a formal prohibition to be explicitly included in the texts.

Contact:Siegfried Jantscher

(Tel.: 003225468287 – email: )

1. ENERGY

• Framework for energy efficiency labelling

Rapporteur:Emilio Fatovic (Workers - IT)

Reference:COM(2015) 341 final

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Key points:

The EESC supports the Commission's proposal as it addresses the main problems relating to current legislation, including effective enforcement, efficient market monitoring and the right of consumers to receive clear, comprehensible and comparable information. In the Committee's view, it was the right choice to use a regulation instead of a directive as the legislative instrument. The EESC also agrees with the proposal to set up a product database and to revert to the previous A-G energy scale. The EESC has also presented the following key recommendations:

• Introduce stricter controls on products on sale to check that the characteristics of the product actually correspond to those shown on the label
• Include other information of relevance to consumers in the new label, such as the minimum life-expectancy of products and the energy consumption of the product in the course of its lifecycle
• Introduce a common Europe-wide system of penalties
• Take action to prevent any additional costs under the new labelling system from being automatically passed on to retailers or end users
• Regulate online marketplaces, where the most serious infringements of the obligation to display energy labels occur
• Regulate the marketing of "reprocessed" energy products in order to avoid legal loopholes and to promote greater integration between strategies on energy efficiency and on the circular economy
• Pay particular attention to products imported from third countries, in order to protect European products from possible forms of unfair competition or fraud
• Organised civil society should work alongside national governments in order to launch more effective and widespread information and awareness-raising activities that also include retailers
• The period at the end of the transition period should be extended to 30 days, in order to allow enough time to switch permanently to products labelled under the new system.
• Adopt a more prudent and measured approach to delegated acts
• A mid-term impact assessment should be carried out during the period of eight years allocated for reviewing the framework for labelling
• The automatic rescaling of products should take place as and when necessary in the light of actual technological developments; rescaling should only occur when products in energy class A represent at least 20% of the market.

Contact:Andrei Popescu

(Tel.: 00 32 2 546 9186 - e-mail: )

• Launching the public consultation process on a new energy market design

Rapporteur: Lutz Ribbe (Various Interests - DE)

Reference:COM(2015) 340 final

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Key points:

The EESC recognises the importance of a new energy market design for achieving the ambitious climate-related policy goals of the European Union, most notably the expansion of renewable energy. The Committee acknowledges that many of the measures proposed by the European Commission in its Communication, such as the establishment of intraday markets or the removal of market-distorting national regulations, are steps in the right direction. However, the EESC would like the Commission to be more ambitious.

The EESC emphasises that the energy system is fundamentally a matter for the whole of society, whose governance and evolution requires a careful balance between markets and regulation.

The EESC points out that the current system provides neither options that afford the required flexibility (storage; demand management; co-generation) to market participants nor the necessary power distribution infrastructure. In addition, consumers lack access to information about and resources for emerging opportunities in self-generation, self-consumption and marketing of their own electricity.

The EESC highlights the importance of "getting the prices right". At the moment, (too low) prices fail to provide sufficient incentives to invest in low-carbon technology and infrastructures. The low prices are partly shaped by subsidies, regulations and power plants that have been paid off. The EESC asks the Commission to promote greater price transparency, ensure that externalities (e.g. carbon emissions) are fully priced in and existing price regulation through the state abolished, and adjust its own subsidy system.

The EESC draws attention to the major challenges but also the significant opportunities involved in transforming a centralised, fossil fuels based energy system into a decentralised renewables-dominated system involving a wide range of new market players (municipalities, intermediaries, energy-related services, and more). To this end, it is crucial that infrastructure and grid, regulations, and other market participants (such as distribution systems operators) enable local and decentralised power generation and the direct marketing of so produced energy without even going through an exchange or traders.

Contact:Kristian Krieger

(Tel.: 003225468921 - e-mail: )

• Delivering a New Deal for Energy Consumers

Rapporteur:Lutz Ribbe (Various Interests - DE)

Reference:COM(2015) 339 final

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Key points:

The EESC – in line with the Commission's communication and Energy Union programme – emphasises the changing, increasingly central and proactive role of consumers on energy markets. It welcomes many of the provisions included in the "New deal for energy consumers" communication. However, it also identifies a number of areas that the Commission should revisit in their future work on energy consumers.

While recognising a changing role of consumers, the Commission's communication leaves important questions unanswered. In order to identify and address these questions, the EESC asks the Commission to produce a systematic analysis of the obstacles consumers face in actively engaging with energy markets.

The EESC highlights the need to enable consumers to become active participants in the market. This requires that consumers have access to key technology, such as smart meters. Smart meters should therefore be understood and financed as part of grid development.

The EESC also deems it important that new incentive schemes are developed that reward self-consumption, direct supply, storage of surplus energy and demand management.

The EESC also points out that the concept of self-supply and self-production is not adequately defined in the Commission's communication, reflecting a limited understanding of the "prosumer approach". Self-production and -self-supply must be interpreted much more broadly than simply self-produced and self-consumed electricity from an individual private generator behind the meter.

Contact:Kristian Krieger

(Tel.: 003225468921 - e-mail: )

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