               23.8.2018

               EN

               Official Journal of the European Union

               C 298/140

      P8_TA(2017)0100
      Inquiry into emission measurements in the automotive sector
      European Parliament recommendation of 4 April 2017 to the Council and the Commission following the inquiry into emission measurements in the automotive sector (2016/2908(RSP))
      (2018/C 298/19)

         The European Parliament,

                  —

                  having regard to Article 226 of the Treaty on the Functioning of the European Union (TFEU),

                  —

                  having regard to Decision 95/167/EC, Euratom, ECSC of the European Parliament, the Council and the Commission of 19 April 1995 on the detailed provisions governing the exercise of the European Parliament’s right of inquiry (1),

                  —

                  having regard to its Decision (EU) 2016/34 of 17 December 2015 on setting up a Committee of Inquiry into emission measurements in the automotive sector, its powers, numerical strength and term of office (2),

                  —

                  having regard to Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (3),

                  —

                  having regard to Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (4),

                  —

                  having regard to Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner air for Europe (5),

                  —

                  having regard to its resolution of 27 October 2015 on emission measurements in the automotive sector (6),

                  —

                  having regard to its resolution of 13 September 2016 on the inquiry into emission measurements in the automotive sector (7) (based on interim report A8-0246/2016),

                  —

                  having regard to the final report of the Committee of Inquiry into Emission Measurements in the Automotive Sector (A8-0049/2017),

                  —

                  having regard to the draft recommendation of the Committee of Inquiry into Emission Measurements in the Automotive Sector,

                  —

                  having regard to Rule 198(12) of its Rules of Procedure,

                  A.

                  whereas Article 226 TFEU provides a legal basis for the establishment by the European Parliament of a temporary Committee of Inquiry to investigate alleged contraventions or maladministration in the implementation of Union law, without prejudice to the jurisdiction of national or Union courts, and whereas this constitutes an important element of the Parliament’s supervisory powers;

                  B.

                  whereas, on the basis of a proposal by the Conference of Presidents, Parliament decided on 17 December 2015 to set up a Committee of Inquiry to investigate the alleged failures in the application of Union law in relation to emission measurements in the automotive sector, and that the Committee would make any recommendations it deemed necessary on that matter;

                  C.

                  whereas the Committee of Inquiry started its work on 2 March 2016 and adopted its final report on 28 February 2017, setting out the methodology and the conclusions of its investigation;

                  D.

                  whereas the market share of diesel-powered passenger cars has grown in the European Union over recent decades to a level where these vehicles now represent more than half of new cars sold in almost every Member State; whereas this sustained growth in market share of diesel vehicles has also come about as a result of the EU climate policy, as diesel technology has an advantage over petrol engines when it comes to CO2 emissions; whereas, at the combustion stage, diesel engines, in comparison with petrol engines, produce far more pollutants, other than CO2, which are significantly and directly harmful to public health, such as NOx, SOx and particulate matter; whereas mitigation technologies for these pollutants exist and are deployed in the market;

                  E.

                  whereas current technology exists to meet the Euro 6 NOx standards for diesel vehicles, including with regard to real driving conditions and without having a negative impact on CO2 emissions;

                  F.

                  whereas best practices from the USA, with stricter emissions standards which apply for gasoline and diesel vehicles alike, and stricter enforcement policies, offer a standard to which the EU should aspire;

                  G.

                  whereas the protection of public health and the environment should be a shared societal concern and responsibility, in which all stakeholders, including the automobile sector, have an important role to play;

                  1.

                  Instructs its President to take the necessary measures to make public the final report of the Committee of Inquiry, in accordance with Rule 198(11) of its Rules of Procedure and Article 4(2) of Decision 95/167/EC, Euratom, ECSC;

                  2.

                  Calls on the Council and the Commission to ensure that the conclusions of, and the recommendations arising from, the inquiry are acted upon in practice, in accordance with Decision 95/167/EC, Euratom, ECSC;

                  3.

                  Calls on the Commission to submit to Parliament within 18 months of the adoption of this recommendation, and regularly thereafter, a comprehensive report on the action taken by the Commission and the Member States on the conclusions and recommendations of the Committee of Inquiry;

                  4.

                  Invites its President to instruct the Committee on the Environment, Public Health and Food Safety, the Committee on Industry, Research and Energy, the Committee on the Internal Market and Consumer Protection, and the Committee on Transport and Tourism to monitor the action taken on the conclusions and recommendations of the Committee of Inquiry, in accordance with Rule 198(13) of its Rules of Procedure;

                  5.

                  Invites its President to instruct the Committee on Constitutional Affairs to act upon the recommendations of the Committee of Inquiry as regards the limitations of Parliament’s right of inquiry;

            Laboratory tests and real-world emissions

                  6.

                  Calls on the Commission to change its internal structure in such a way that, under the principle of collective responsibility, the portfolio of one single Commissioner (and Directorate-General) includes at the same time the responsibility for air quality legislation and for policies addressing the sources of pollutant emissions; calls for an increase in the human and technical resources dedicated to vehicles, vehicle systems and emission control technologies in the Commission, and for the Joint Research Centre (JRC) to further improve in-house technical expertise;

                  7.

                  Calls on the Commission, to this end, to change its internal structure and amend its division of responsibilities so that all the legislative responsibilities currently held by the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) in the area of vehicle emissions are transferred to the responsibility of the Directorate-General for Environment (DG ENV);

                  8.

                  Calls on the Commission to ensure that there are adequate human resources and technical expertise and the appropriate level of autonomy in the JRC, including measures to keep relevant experience with vehicle and emissions technology and vehicle testing in the organisation; notes that the JRC may have additional verification responsibilities for requirements in the context of the proposal for a new market surveillance and type approval regulation;

                  9.

                  Calls for all JRC test results to be made available in full and in a non-anonymised format to the public through a database; calls, furthermore, for the JRC Vehicle Emissions Laboratory (VELA) to report to a supervisory board which includes representatives of the Member States and organisations for environmental and health protection;

                  10.

                  Calls on the co-legislators, in the context of the ongoing revision of Regulation (EC) No 715/2007, to ensure that the measures under Articles 5(3) and 14, which are designed to supplement or amend certain non-essential elements of the legislative act, are adopted by delegated acts, in order to ensure appropriate scrutiny by Parliament and the Council, while at the same time reducing the possibility of undue delays in the adoption of those measures; strongly opposes the choice whereby those measures are adopted by implementing acts;

                  11.

                  Calls for the swift adoption of the 3rd and 4th real driving emissions (RDE) packages to complete the regulatory framework for the new type-approval procedure, and for the swift application of this framework; recalls that, in order for RDE tests to be effective in reducing the discrepancies between the emissions measured in the laboratory and on the road, the specifications of the test and evaluation procedures should be set out very carefully and should cover a wide range of driving conditions, including temperature, engine load, vehicle speed, altitude, type of road and other parameters that can be found when driving in the Union;

                  12.

                  Takes note of the action for annulment against the 2nd RDE package initiated by several EU cities on the grounds that by introducing new increased thresholds for NOx emissions, the Commission Regulation alters an essential element of a basic act, thereby infringing an essential procedural requirement, as well as the provisions of the Air Quality Directive 2008/50/EC as regards the limitation of the maximum nitrogen emission levels for diesel vehicles;

                  13.

                  Urges the Commission to review in 2017 the conformity factor for RDE tests of NOx emissions, as provided for by the 2nd RDE package; calls on the Commission to further revise the conformity factor annually, in line with technological developments, so as to bring it down to 1 by 2021 at the latest;

                  14.

                  Calls on the Commission to review the applicable Union law in order to ascertain whether the placing on the market of other vehicle systems, or of other products, could be dependent on inadequate test procedures, as in the case of vehicle emissions, or in other areas where market surveillance efforts are similarly lacking, and to come forward with appropriate legislative proposals to ensure the enforcement of internal market standards;

                  15.

                  Calls on the Commission to come forward with proposals to introduce environmental inspections at EU level to monitor compliance with environmental product standards, emission limits relating to operating permits and EU environmental law in general;

                  16.

                  Calls on the Commission to continue its work on improving PEMS performance in order to improve their accuracy and reduce their error margin; considers that for particulate matter PEMS technology should be able to account for particles whose size is smaller than 23 nanometres and that are the most dangerous to public health;

                  17.

                  Considers that the horizontal rules on the creation and operation of Commission expert groups adopted by the Commission on 30 May 2016 are an improvement over the older rules, for example as regards the requirement for meaningful and complete minutes of meetings; calls on the Commission to review those rules in order to strengthen the provisions on the balanced composition of expert groups; calls on the Commission to enforce the (updated) horizontal rules strictly and immediately, and to prepare a report to Parliament and the Council evaluating their implementation;

                  18.

                  Calls for lists of participants and minutes of the meetings of comitology committees such as the Technical Committee on Motor Vehicles (TCMV) and Commission expert groups such as the Motor Vehicles Working Group or the Real Driving Emissions — Light-Duty Vehicles (RDE-LDV) group to be made available to the public;

                  19.

                  Urges the Member States to ensure more transparency in access to documents of the TCMV meetings for their national parliaments;

                  20.

                  Calls on the Commission to substantially alter the existing policies of archiving and storing information, and to ensure that notes, inter-services communications, drafts and unofficial exchanges within the Commission, the Member States, the Council and their representatives will be archived by default; deplores the gaps in public records that have resulted from a far too narrow scope of documents primed for archiving, which requires active intervention in order for documents to be archived;

            Defeat devices

                  21.

                  Considers that although the RDE procedure will minimise the risk of defeat device use, it will not completely prevent potential recourse to illegal practices; recommends therefore that, in line with the approach of the US authorities, a degree of unpredictability is built into the type-approval and in-service conformity testing in order to prevent any outstanding loopholes from being exploited and to ensure compliance throughout the lifecycle of a vehicle; welcomes, in this respect, the Testing Protocol for Defeat Devices included in the ‘Guidance on the evaluation of auxiliary emission strategies and the presence of defeat devices’ adopted by the Commission on 26 January 2017 and applicable to vehicles already on the market; expects the Member States’ national authorities to swiftly apply this protocol in their market surveillance activities and to conduct the recommended testing of vehicles under non-predictable variations of the standard testing conditions, such as ambient temperature, speed pattern, vehicle load and test duration, which may include ‘surprise testing’;

                  22.

                  Notes with concern that the official testing of CO2 emissions and fuel consumption of vehicles will still be limited to a laboratory test procedure (WLTP), which means that the illegal use of defeat devices continues to be possible and may remain undetected; urges the Commission and the Member States to establish remote fleet monitoring schemes — making use of roadside remote sensing equipment and/or on-board sensors — to screen the environmental performance of the in-service fleet and to detect possible illegal practices that might lead to continued discrepancies between the performance on paper and in the real world;

                  23.

                  Calls on the Commission to further analyse the reasons why the stricter defeat device provisions present in the legislation on heavy-duty vehicles were not included in the legislation on light-duty vehicles;

                  24.

                  Calls on the Commission to conduct an internal review to verify the claim that the JRC’s research findings and concerns discussed among the Commission’s services with regard to possible illegal practices by manufacturers never reached the higher levels of the hierarchy; calls on the Commission to report its conclusions to Parliament;

                  25.

                  Believes that a clear reporting mechanism within the Commission should be put in place to ensure that when non-compliances are identified by the JRC, they are reported to all relevant levels within the hierarchy of the Commission;

                  26.

                  Calls on the Commission to mandate the JRC to further investigate, together with the national authorities and independent research institutes, the suspicious emissions behaviour of several cars observed in August 2016;

                  27.

                  Calls on the Member States to require car manufacturers, in the context of the recently introduced obligation for car manufacturers to disclose their base and auxiliary emission strategies, to explain any irrational emissions behaviour of vehicles observed in testing and to demonstrate the need to apply the exemptions set out in Article 5(2) of Regulation (EC) No 715/2007; calls on the Member States to share the results of their investigations and the technical test data with the Commission and Parliament;

                  28.

                  Calls on the Commission to strictly monitor the enforcement by Member States of the exemptions to the use of defeat devices; welcomes, in this respect, the methodology for the technical evaluation of auxiliary emission strategies included in the Commission Guidance of 26 January 2017; calls on the Commission to launch infringements procedures as appropriate;

            Type-approval and in-service conformity

                  29.

                  Calls, in the interests of consumer and environmental protection, for the swift adoption of the proposal for a Regulation on the approval and market surveillance of motor vehicles and their trailers (2016/0014(COD)) (8), replacing the current framework directive on type approval, and for its entry into force no later than 2020; considers the preservation of the level of ambition of the original Commission proposal, in particular as regards the introduction of EU oversight of the system, to be the bare minimum required to improve the EU system; considers, furthermore, that a more comprehensive and coordinated system of type approval and market surveillance, involving EU oversight, joint audits and cooperation with and between national authorities, should be the objective to be achieved during the interinstitutional negotiations on the dossier;

                  30.

                  Considers that only stronger oversight at EU level can ensure that the EU legislation on vehicles is properly enforced and market surveillance activities in the EU are carried out in an efficient and effective manner; calls on the Commission to ensure the full and homogeneous implementation of the new type-approval and market surveillance framework, and to coordinate the work of national type-approval and market surveillance authorities and arbitrate in the event of disagreements;

                  31.

                  Calls for a drastic strengthening of market surveillance, on the basis of clearly defined rules and a clearer distribution of responsibilities in the new EU type-approval framework, in order to set up an improved, effective and functional system;

                  32.

                  Believes that EU oversight within the new framework for EU type approval should entail retesting, on an adequate scale, vehicles, systems, components and separate technical units already made available on the market in order to verify that they conform to the type approvals and to applicable legislation, using a wide range of tests on the basis of statistically relevant samples, and initiating corrective measures, including vehicle recalls, type-approval withdrawals and administrative fines; considers the JRC’s expertise instrumental in this task;

                  33.

                  Calls on the Commission and the Member States to assess the US practice of random off-production-line and in-service testing and to draw the necessary conclusions with regard to improving their market surveillance activities;

                  34.

                  Suggests that in the case of passenger vehicles, random market surveillance tests, including with unspecified test protocols, should be performed on at least 20o% of the new models put on the Union market each year as well as on a representative quantity of older models to verify whether the vehicles comply with the Union safety and environmental legislation on the road; believes that in choosing the vehicles to be tested at Union level, substantiated complaints should be followed up and third-party testing, remote sensing data, reports from periodic technical inspections and other information should be taken into account;

                  35.

                  Points out the need for systematic enforcement of conformity of production and in-use conformity of vehicles by the national authorities responsible, further coordinated and supervised at EU level; believes that the conformity of production and in-use conformity testing should be carried out by a technical service different from the one responsible for the type approval of the car in question and that in-house technical services should be excluded from performing the emissions test for type-approval purposes; urges the Member States to clarify once and for all which authority is in charge of market surveillance in their territory, to ensure this authority is aware of its responsibilities and to notify the Commission accordingly; believes that much closer cooperation and information-sharing between Member States’ market surveillance authorities and the Commission, including on national market surveillance plans, will enhance the overall quality of market surveillance in the EU and enable the Commission to identify weaknesses in national market surveillance systems;

                  36.

                  Believes that greater coordination and discussion between type-approval authorities and the Commission, in the form of a forum chaired by the Commission, will contribute to the promotion of good practices aimed at ensuring effective and harmonised implementation of the type-approval and market surveillance regulation;

                  37.

                  Believes that the possibility of an independent full review of type-approval results, including data from coast down tests, will improve the effectiveness of the framework, and that the relevant data should be accessible to relevant parties;

                  38.

                  Calls for proper and independent financing of type approval, market surveillance and activities of technical services, for instance through the establishment of a fee structure, through Member States’ national budgets, or through a combination of both methods; believes that type-approval authorities should be made responsible for checking the commercial and economic relations existing between car manufacturers and suppliers on the one hand and technical services on the other hand in order to prevent conflicts of interest;

                  39.

                  Draws attention to the US type-approval system — whereby fees collected from manufacturers to cover the cost of certification and compliance programmes are sent to the US Treasury, and the US Congress in turn allocates funds to the Environmental Protection Agency (EPA) to implement its programmes — as a paradigm that may be useful for improving the independence of the EU system;

                  40.

                  Calls for the swift adoption, implementation and application of the 4th RDE package, regulating the use of PEMS for in-service conformity checks and for third-party testing; calls on the Commission to introduce a mandate for the JRC to conduct emission tests with PEMS as part of the in-service conformity checks at European level in the context of the new type-approval framework;

                  41.

                  Calls on the co-legislators to establish, in the upcoming regulation on the approval and market surveillance of motor vehicles, an EU-wide remote sensing network to monitor the real world emissions of the car fleet and to identify excessively polluting vehicles in order to target in-service conformity checks and to trace cars that might be illegally modified with hardware (e.g. exhaust gas recirculation (EGR) switch-off plates, diesel particulate filter (DPF) or selective catalytic reduction (SCR) removal) or software (illegal chip tuning) modifications;

                  42.

                  Calls on the Commission to make use of its delegated powers set out in Article 17 of Directive 2014/45/EU on periodic roadworthiness tests for motor vehicles and their trailers so as to update the test methods for the periodic technical inspection of cars in order to measure the NOx emissions of cars;

                  43.

                  Believes that type-approval authorities, market surveillance authorities and technical services should carry out their duties; considers that they should therefore improve their level of competence significantly and continuously, and to that end calls for the establishment of regular, independent audits of their capabilities;

                  44.

                  Calls on the Commission to look into the possibility of making it mandatory for manufacturers to notify the Commission of their choice of technical service, so as to ensure that the Commission is fully aware of the situation;

                  45.

                  Calls on the Member States to require car manufacturers to disclose and justify their emissions strategies to type-approval authorities, such as is the case for heavy-duty vehicles;

                  46.

                  Calls on the Member States to analyse whether ‘standard’ solutions proposed by the manufacturer for repairing the vehicles equipped with fraudulent systems actually comply with the emissions regulations, and calls for random checks to be carried out on new vehicles which have been repaired;

            Enforcement and penalties

                  47.

                  Calls for stricter and more effective enforcement of vehicle emission rules in the EU; proposes that the governance structure on car emissions be reformed without delay and brought into line with the other transport sectors;

                  48.

                  Recalls that emission measurement rules are set to achieve better air quality, which has not previously been achieved owing in part to weak law enforcement and in part to manipulation by certain car manufacturers; considers that the relevant authorities should take into consideration car emissions and data on air quality development to assess whether the intended goal has been reached;

                  49.

                  Suggests establishing a standing international cooperation framework on emissions with a view to allowing authorities to exchange information and conduct joint surveillance actions; such actions are already in place for other products within the EU;

                  50.

                  Urges the Commission to launch infringement procedures against Member States that have not put in place effective market surveillance and a national system of penalties for infringements of EU law as required by the existing legislation;

                  51.

                  Suggests that the Commission should be empowered to impose on vehicle manufacturers effective, proportionate and dissuasive administrative fines and to order remedial and corrective actions where non-compliance of their vehicles is established; considers that the possible sanctions should include type-approval withdrawal and the establishment of EU-wide recall programmes;

                  52.

                  Believes that the resources levied by these fines imposed on vehicle manufacturers, the resources deriving from infringement procedures launched on Member States for failing to respect the EU legislation on emissions, and the excess emissions premiums for new passenger cars (budget line 711) should be used as assigned revenue for specific EU projects or programmes in the field of air quality and environmental protection, and should not decrease the Member States’ gross national income contributions to the EU budget; calls for the necessary provisions to be included in the relevant Union legislation to this effect; suggests that the resources from the fines could also be used in part by the Member States for purposes of redress to persons negatively affected by the infringement, and other such activities to the benefit of consumers;

                  53.

                  Calls on the Member States to ensure that the provisions on penalties applicable for infringement by manufacturers of the provisions of Regulation (EC) No 715/2007 are effective, proportionate and dissuasive, and are communicated swiftly to the Commission;

                  54.

                  Calls on the Member States to apply more vigorous measures in the wake of the emissions cheating scandal; calls on the Member States and their type-approval authorities to examine the information on base and auxiliary emission control strategies — to be disclosed by the car manufacturers — for type-approved Euro 5 and Euro 6 cars displaying irrational emissions behaviour during testing programmes, and to check their conformity with the Commission’s interpretation guidelines on the defeat device provisions; calls on the Member States to apply the available sanctions in the event of non-conformity, including mandatory recall programmes and the withdrawal of type approvals; calls on the Commission to ensure a coordinated approach on recall programmes across the EU;

                  55.

                  Calls on the Member States and the Commission to clarify to the vehicle owners affected whether or not the vehicles involved have to be repaired, and the legal consequences ensuing from the repairs as regards compliance with emissions legislation, obligations concerning the technical inspection of vehicles, taxation, and the consequences of a potential reclassification of the vehicle, etc.;

                  56.

                  Notes that it is difficult to gather information on penalties in the Member States owing to the lack of statistics at national level; calls on the Commission and the Member States to gather regular statistics on this;

                  57.

                  Calls on the Member States and the Commission to reinforce European implementation mechanisms such as the European Union Network for the Implementation and Enforcement of Environmental Law (IMPEL);

            Consumer rights

                  58.

                  Considers that EU consumers affected by the dieselgate scandal should be adequately and financially compensated by the car manufacturers involved, and that the recall programmes, which have been only partially implemented, should not be viewed as a sufficient form of reparation;

                  59.

                  Calls on the Commission, to this end, to put forward a legislative proposal for the establishment of a collective redress system in order to create a harmonised system for EU consumers, thus eliminating the current situation in which consumers lack protection in most Member States; calls on the Commission to assess existing systems within and outside the EU with a view to identifying best practices in this field and to include them in its legislative proposal;

                  60.

                  Considers that if a vehicle type approval is withdrawn on account of non-compliance, the owner of an affected vehicle should be fully compensated for the purchase of this vehicle;

                  61.

                  Considers that consumers should be entitled to adequate compensation where it is shown that the original performance of the vehicle (e.g. in terms of fuel consumption performance, efficiency, durability of components, emissions, etc.) is negatively impacted by any necessary technical repairs or modulations implemented under a manufacturer vehicle recall programme;

                  62.

                  Calls on the Member States to ensure that consumers are provided with detailed and comprehensible information on the modifications made during recall programmes and maintenance checks in order to improve transparency for consumers and trust in the car market;

                  63.

                  Deplores the fact that European consumers are treated worse than US consumers; notes, in addition, that affected consumers often receive vague and incomplete information about the vehicles involved, the obligations to repair the vehicle and the consequences of doing so;

                  64.

                  Deplores the fact that the EU does not have a uniform, harmonised system under which joint actions may be taken by consumers to enforce their rights, and acknowledges that today in many Member States no option exists for consumers to take part in such actions;

                  65.

                  Stresses that after recalls vehicles must conform to the legal requirements set out in EU legislation; also points out that other forms of reparation besides recall programmes should be considered; to this end, calls on the Commission to assess the EU rules in force on consumer protection and make proposals as appropriate;

                  66.

                  Emphasises the importance of providing consumers with realistic, accurate and robust information on their cars’ fuel consumption and air pollutant emissions in order to raise consumers’ awareness and to support them in making an informed car purchase decision; calls for a revision of the Car Labelling Directive (1999/94/EC), which should include consideration for making information on other air pollutant emissions such as NOx and particulate matter mandatory in addition to information on fuel use and CO2;

                  67.

                  Asks the Commission and the Member States to take all necessary measures to ensure that consumers are compensated fairly and adequately, preferably through mechanisms of collective redress;

            Clean vehicles

                  68.

                  Calls on the Commission and the competent authorities in the Member States to fully engage in and implement a low-emission mobility strategy;

                  69.

                  Calls on the Commission and the Member States to assess the effectiveness of current Low Emission Zones in cities, taking into account the failure of Euro standards for light-duty vehicles to reflect real world emissions, and to examine the benefit of introducing a label or standard for Ultra-Low-Emission Vehicles (ULEVs) that meet the emission limit values in real driving conditions;

                  70.

                  Calls on the Commission and the co-legislators to follow a more integrated approach in their policies to improve the environmental performance of cars, in order to ensure progress on both the decarbonisation and air quality objectives, such as by fostering the electrification or transition to alternative motorisations of the car fleet;

                  71.

                  Calls on the Commission, to that end, to review the Clean Power for Transport Directive (2014/94/EU) and to come forward with a draft regulation on CO2 standards for the car fleets coming onto the market from 2025 onwards, with the inclusion of Zero-Emission Vehicles (ZEV) and ULEV mandates that impose a stepwise increasing share of zero- and ultra-low-emission vehicles in the total fleet with the aim of phasing out new CO2-emitting cars by 2035;

                  72.

                  Calls on the Commission and the Member States to foster green public procurement policies through the purchasing of ZEVs and ULEVs by public authorities for their own fleets or for (semi-)public car-sharing programmes;

                  73.

                  Calls on the Commission to review the emissions limits set out in Annex I to Regulation (EC) No 715/2007 with a view to improving air quality in the Union and to achieving the Union ambient air quality limits as well as the WHO recommended levels, and to come forward by 2025 at the latest with proposals, as appropriate, for new technology-neutral Euro 7 emission limits applicable for all M1 and N1 vehicles placed on the Union market;

                  74.

                  Asks the Commission to consider the review of the Environmental Liability Directive (2004/35/EC) to include environmental damage caused by air pollution owing to car manufacturers violating the EU’s car emissions legislation; believes that if car manufacturers could be held financially liable for remedying the environmental damage they cause, an increased level of prevention and precaution might be expected;

                  75.

                  Calls on the Commission to work with the Member States to ensure that no ordinary worker from the automotive sector suffers as a result of the emissions scandal; to this end, Member States and car manufacturers should coordinate and promote vocational training plans to ensure that ordinary workers whose employment situation has been negatively affected by the emissions scandal be given all necessary protection and training opportunities to ensure that their skill set can be used, for example for sustainable modes of transport;

            Powers and limitations of the committee of inquiry

                  76.

                  Urges the Council and the Commission to engage in the timely conclusion of the negotiations on Parliament’s proposal for a Regulation of the European Parliament on the detailed provisions governing the exercise of Parliament’s right of inquiry and repealing Decision 95/167/EC, Euratom, ECSC;

                  77.

                  Considers it vital for exercise of democratic control over the executive that Parliament be empowered with powers of inquiry that match those of national parliaments of the EU; believes that in order to exercise this role of democratic oversight Parliament must have the power to summon and compel witnesses to appear and to compel the production of documents; believes that in order for these rights to be exercised the Member States must agree to implement sanctions against individuals for failure to appear or produce documents in line with national law governing national parliamentary inquiries; reiterates Parliament’s support for the position outlined in the 2012 report on this issue;

                  78.

                  Considers that the powers of Parliament’s committees of inquiry should be better aligned with those of the national parliaments, in particular to ensure the effective summoning and participation of individuals and the application of sanctions in the event of refusal to cooperate; calls on the Commission and the Member States to support the related provisions in Parliament’s current proposal;

                  79.

                  Calls on the Commission to revise as a matter of urgency the Code of Conduct for Commissioners so as to include provisions on the accountability of former Commissioners within the scope of an investigation by a committee of inquiry into policy-making and legislation that took place during their term in office;

                  80.

                  Asks the Commission to use the time frame between the plenary decision to set up a committee of inquiry and the actual start of its work to prepare an initial set of documents which relate to the mandate of the committee of inquiry so that the delivery of information can be quicker, thus facilitating the work of the committee of inquiry from the start; considers with this in mind that the rules on archiving and transmitting documents in the Commission should be reviewed and improved in order to facilitate future queries;

                  81.

                  Suggests that a single contact point for relations with Parliament’s committees of inquiry be set up in the Commission, in particular when several Directorates-General are concerned, with a view to facilitating the flow of information on the one hand and building on the good practices achieved so far on the other;

                  82.

                  Notes that in several recent committees of inquiry and special committees, the Commission and the Council have in some cases failed to provide the documents requested and in other cases provided the requested documents only after long delays; considers that there must be an accountability mechanism introduced in order to ensure the immediate and guaranteed transfer of documents to Parliament that the committee of inquiry or special committee requests and is entitled to access;

                  83.

                  Calls on the Commission to improve its capacities to handle document requests from committees of inquiry as well as from journalists and citizens under respective applicable document access rules, in a timely manner and with an acceptable level of quality; urges the Commission to release these documents in their native format and refrain from time-consuming and potentially content-altering format changes and format conversions; further instructs the Commission to make sure that information that is stored in a machine-readable format, e.g. a database, is also released in a machine-readable format;

                  84.

                  Notes that it is the responsibility of the committee of inquiry to make any determinations as to whether information within the scope of a request is relevant for the work of the committee; notes that this task should not be pre-empted by the recipient of such a document request; instructs the Commission to properly reflect this responsibility in its guidelines on access to documents requests;

                  85.

                  Urges the Member States to respect their legal obligations towards committees of inquiry as laid down in Decision 95/167/EC, Euratom, ECSC, and specifically Article 3 thereof; also calls on them, given the significant delays in response rates encountered, to assist committees of inquiry in a manner respectful of the principle of sincere cooperation as laid down in Article 4(3) TFEU;

                  86.

                  Calls on those Member States that have undertaken national investigations on pollutant emissions from passenger cars to convey to the Commission and Parliament without delay the full data sets and results from their investigations;

                  87.

                  Considers that the first part of the committee’s mandate should be devoted to the collection and analysis of written evidence before the start of the public hearings; deems it useful to build in a ‘cooling-off’ period between the end of the hearings and the drafting of the final report so that the collection of evidence can be completed, properly analysed and included fully in the report;

                  88.

                  Considers that the 12-month time limit on committees of inquiry is arbitrary and often insufficient; believes that the members of the inquiry committee are best placed to determine whether an inquiry should be extended and, if so, for what period;

                  89.

                  Notes that Rule 198 of Parliament’s Rules of Procedure should define more clearly when the duration of a committee of inquiry should start; suggests that there should be sufficient flexibility to ensure that there is enough time for the investigations; calls for the work of the committee of inquiry to start only once the requested documents have been received from the EU institutions;

                  90.

                  Considers that an interim report should not necessarily be included in future mandates in order not to pre-empt the final conclusions of the inquiry;

                  91.

                  Considers that in the future committees of inquiry should be organised differently in order to ensure greater efficiency and effectiveness in organising and conducting the committees’ work, in particular during the public hearings;

                  92.

                  Underlines that Parliament’s internal administrative rules are aligned to the established practice of standing committees and as such are often not suited to the ad-hoc and temporary nature of a committee of inquiry, which operates under more unusual circumstances, with a very specific scope and during a limited time frame; considers, therefore, that the development of a defined set of rules relating to the effective functioning of committees of inquiry in regard to the conducting of hearings and missions, for example, in a way that guarantees fair political representation, would increase efficiency; considers that there is a risk that financial constraints may prevent committees of inquiry from hearing all the experts deemed necessary for the committee to perform its duty; considers that internal authorisation deadlines for hearings and missions should be made more flexible;

                  93.

                  Considers that committees of inquiry should have prioritised access and dedicated resources within the relevant Parliament services to enable the latter to deal in particular with requests for studies, briefings, etc., within the time frame allowed by the rules;

                  94.

                  Notes that the current rules on accessing classified and other confidential information made available by the Council, the Commission or the Member States to Parliament in the context of an inquiry do not provide full legal clarity but are generally interpreted as excluding accredited parliamentary assistants (APAs) from consulting and analysing non-classified ‘other confidential information’ in a secure reading room; notes that a number of Members have found that this rule stands in the way of effective and thorough consultation of such documents within the limited time available to committees of inquiry, and that the TAX2 Committee (Special Committee on Tax Rulings and Other Measures Similar in Nature or Effect), during which access was temporarily and exceptionally granted to APAs, was able to make use of these resources in a more comprehensive and effective manner; calls, therefore, for the introduction of a clearly worded provision guaranteeing the right of access to documents for APAs on the basis of the ‘need to know’ principle, in their support role for Members, in a renegotiated Interinstitutional Agreement; urges the relevant bodies to expedite the renegotiation of this point so as not to hamper the effectiveness and efficiency of future and ongoing parliamentary inquiries;

            o
      o o

                  95.

                  Instructs its President to forward this recommendation and the final report of the Committee of Inquiry to the Council and the Commission and to the parliaments of the Member States.

         (1)  OJ L 113, 19.5.1995, p. 1.

         (2)  OJ L 10, 15.1.2016, p. 13.

         (3)  OJ L 171, 29.6.2007, p. 1.

         (4)  OJ L 263, 9.10.2007, p. 1.

         (5)  OJ L 152, 11.6.2008, p. 1.

         (6)  Texts adopted, P8_TA(2015)0375.

         (7)  Texts adopted, P8_TA(2016)0322.

         (8)  See also texts adopted of 4.4.2017, P8_TA(2017)0097.


title: Council Recommendation of 14 May 2018 on the economic policy of the euro area

text:
               25.5.2018

               EN

               Official Journal of the European Union

               C 179/1

         COUNCIL RECOMMENDATION
   of 14 May 2018
   on the economic policy of the euro area
   (2018/C 179/01)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 136 in conjunction with Article 121(2) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               The economic expansion in the euro area continues and has become increasingly broad-based across countries. The recovery is increasingly driven by domestic demand, with private consumption as the key driver of growth and investment picking up. Employment continued to increase throughout 2016 and the first half of 2017. The unemployment rate has seen a significant reduction, though it is still higher than in 2008. The recovery in the euro area is nonetheless characterised by subdued core inflation and wage growth, a large current-account surplus and persistently low – though improving – investment ratios. In particular, subdued wage growth appears to be due to remaining labour-market slack in some economies, low-inflation expectations feeding into wage negotiations and low productivity growth. Real household income has increased, but remains below 2008 levels in many countries. Divergences across euro-area Member States in terms of gross domestic product (GDP) per capita and unemployment rates persist. The rates of long-term unemployment and youth unemployment are still high, while poverty, social exclusion and inequality remain a serious concern in several Member States.

               (2)

               Overall, on the basis of the reading of the economic indicators for the euro area, there appears to be a case for further supporting demand, investment and wage growth without incurring the risk of triggering inflationary pressures, while fostering internal and external rebalancing and economic and social convergence and increasing potential growth. At the same time, as stated in the Alert Mechanism Report adopted by the Commission on 22 November 2017, signs of newly emerging imbalances – in the housing market in some Member States, for example – need to be closely monitored.

               (3)

               Significant imbalances persist in the euro area. While much progress has been achieved among net-debtor countries in correcting their external imbalances, large current-account surpluses remain in some creditor countries, reflecting an overall shortfall in aggregate demand. These generated a surplus for the euro area of 3,3 % of GDP in 2016, projected to decline to 2,9 % of GDP in 2019. The net international investment positions of the most indebted Member States have been improving at a slow pace, and sustained rebalancing efforts are still needed. Countries that had large current-account deficits for a long time still have large negative net international investment positions that are generally coupled with large stocks of private or government debt and constitute a vulnerability. At the same time, efforts are also needed in countries with large current-account surpluses to support domestic demand and potential growth and thereby the rebalancing of the euro area.

               (4)

               Wage growth and job creation contribute to the economic recovery in the euro area by supporting aggregate demand, reduce inequalities and help to ensure high standards of living in the area. Efficient wage-setting mechanisms should ensure that wages are differentiated depending on country, sector-specific conditions and taking due account of changes in productivity. The following would help accelerate the rebalancing process in the euro area: implementing structural reforms that increase productivity and improving the quality and composition of public expenditure with a view to supporting investments in all countries; promoting wage growth in a manner that respects the role of social partners; and stronger demand dynamics in net-creditor countries and implementing measures that contain growth in unit labour costs and aim to improve their competitiveness in net-debtor countries.

               (5)

               Consistency and balance in the overall macroeconomic policy mix of the euro area, including monetary, fiscal and structural policies, is crucial to ensure robust and sustainable economic growth. In recent years, monetary policy has resorted to new unconventional tools to achieve the medium-term inflation objective of the European Central Bank, thereby also supporting growth and job creation. The monetary policy stance and economic developments call for a focus on fiscal and structural policies. To support the growth potential of the economies of the euro-area Member States, appropriate fiscal policies and focus on structural reforms are needed.

               (6)

               A strong coordination of national fiscal policies, based on common rules, is essential to arrive at an appropriate aggregate fiscal stance for the euro area and for the proper functioning of the monetary union. The common fiscal rules are geared towards pursuing debt sustainability at the national level, while providing room for macroeconomic stabilisation. The fiscal stances for the Member States and at aggregate level for the euro area have hence to balance the objectives of ensuring the long-term sustainability of national public finances and the short-term macroeconomic stabilisation at country and euro-area level. In the light of the current, broad-based economic growth in the euro area, albeit with the persistence of crisis legacies in some areas, a broadly neutral fiscal stance at aggregate level for the euro area in 2018 still appears to be appropriate. An appropriate differentiation of fiscal efforts across euro-area Member States, taking into account fiscal space and spillovers across countries, is required. At the same time, given the improving economic conditions, there is a need to rebuild fiscal buffers while continuing to strengthen the growth potential of the economies of the euro-area Member States.

               (7)

               A decisive improvement in the composition and management of national budgets, on both the revenue and expenditure sides, including by shifting resources towards tangible and intangible investment, would increase the growth impact of public budgets and raise productivity in the longer term. Improvements in the functioning of national fiscal frameworks and well-managed spending reviews support the pursuit of credible and growth-friendly fiscal policies.

               (8)

               A well-designed structure of taxation is key to promote growth and employment, as well as to contribute to reducing inequalities. Simplifying and modernising tax systems and addressing tax fraud, evasion and avoidance are essential to make tax systems more efficient and fairer. This can free resources for public investment and, inter alia, education and healthcare and contributes to supporting overall investment, quality employment and economic and social convergence. In particular, measures against aggressive tax-planning (ATP) are essential to secure government revenues, impede distortions of competition between firms, preserve social cohesion and fight increasing inequalities. The Common Consolidated Corporate Tax Base (CCCTB) would contribute to the fight against tax avoidance, while improving the Single Market for businesses.

               (9)

               Structural and institutional features of labour and product markets and well-functioning public administrations are important determinants of economic resilience as well as cyclical, real and social convergence across euro-area Member States. Resilient economic structures prevent shocks from having significant and long-lasting effects on income and employment within Member States and across the euro area. In this way, they reduce economic fluctuations and provide a favourable environment for sustainable and inclusive growth. Better coordination of the implementation of structural reforms, in particular those prescribed in the country-specific recommendations, can create positive spillovers in the Member States and strengthen their positive effects.

               (10)

               Well-functioning labour markets and social protection systems are important foundations for inclusive economic growth, for reduced inequality and for the resilience of national economies and the euro area as a whole. With the aim of achieving upward convergence in this regard, the European Pillar of Social Rights, which was proclaimed by the European Parliament, the Council and the Commission on 17 November 2017, sets out 20 key principles, falling into three broad chapters: (i) equal opportunities and access to the labour market; (ii) fair working conditions; and (iii) social protection and inclusion.

               (11)

               Despite progress with reforms to improve the adjustment capacity of labour markets, significant differences persist across the euro area, which continue to challenge the smooth functioning thereof. Well-designed labour-market policies that are fully integrated with social protection systems can support labour-market transitions and reintegration, reduce labour-market segmentation, provide effective automatic stabilisation and promote equal opportunities for all and economic and social convergence. Well-designed working-time arrangements can help mitigate shocks. Effective and timely activation of jobless people who can participate in the labour market can be achieved by providing individualised support for job searching, training and requalification, while protecting those unable to participate. Emerging new forms of employment and new types of contracts bring along challenges related to job security and social protection. Against this background, employment protection legislation needs to provide for fair and decent working conditions for all workers.

               (12)

               Effective social protection systems are crucial to promote inclusive labour markets and ensure adequate income support and appropriate social support through access to quality services. Pension reforms and work-life balance policies are also key to foster labour-market participation. Unnecessary restrictions on job, sectoral and geographical mobility of workers in employment and social protection systems should be lifted.

               (13)

               Access to high-quality education and training is vital to ensure equal opportunities and to address skills mismatches. Adequate investments in human capital through education and training systems that improve lifelong learning and ensure that skills levels match present and future labour-market needs play a key role in improving the economy's adjustment capacity and real convergence in the longer run. Investment in skills can also drive innovation and increase productivity and competitiveness, in addition to ensuring social inclusion and mobility.

               (14)

               Product market reforms that increase competition and reforms that improve the business environment and the quality of institutions (including an effective justice system that facilitates contract enforcements) foster economic resilience in Member States and the euro area as a whole. Further integration in the Single Market has proven to be the major engine of growth and convergence between Member States. The Single Market still holds considerable unexploited potential and significant progress is needed to complete it. Timely implementation and better enforcement of existing legislation are also key to reaping the benefits of the Single Market. The Single Market for services (including financial, digital, energy and transport) is the pending challenge. Attention should nonetheless also be focused on the goods markets to avoid potential market segmentation. The Digital Single Market should contribute to completing the legal environment in order to speed up the digitalisation of economic activities, as this is a necessary step in improving the performance of product markets and global competitiveness. Completing and implementing the various Single Market strategies by 2018 therefore remains the shared objective.

               (15)

               While the overall robustness of the euro-area banking sector has increased since the crisis and bank lending has started to rise again, vulnerabilities remain and need to be addressed. Banks are confronted with low profitability. The need to adapt banks' business models, the low-interest-rate environment and increasing competition from other forms of finance continue to exert pressure on banks' profitability. Further efforts are therefore needed to ensure their long-term sustainability. Non-performing loan (NPL) ratios have stabilised in nearly all of the more-affected euro-area Member States or are on a declining trend, but progress remains slow and uneven across banks. High NPL ratios hinder banks' ability to lend, the transmission of monetary policy and economic adjustment capacity. They are also a source of vulnerability for the banking system as a whole and need to be addressed at both Union and national levels, as set out in the Action Plan to tackle non-performing loans in Europe, laid down in the Council conclusions of 11 July 2017 (‘Action Plan of July 2017’). As announced in its communication of 11 October 2017 on completing the Banking Union, the Commission is currently working to deliver a comprehensive package of measures to reduce the current stock of NPLs as well as to reduce the risk of future build-up of NPLs.

               (16)

               Strengthening the institutional architecture of the Economic and Monetary Union (EMU) requires, as a matter of priority, the completion of the Banking Union and further progress on the Capital Markets Union. Significant advances have been made with regard to the establishment of the Banking Union, but it remains unfinished. In line with the Roadmap to complete the Banking Union, as set out in the Council conclusions of 17 June 2016 (‘Roadmap of June 2016’), work is set to continue to complete the Banking Union with regard to risk reduction and risk sharing, including a European deposit insurance scheme and making the common backstop for the Single Resolution Fund operational at the latest by the end of the Fund's transitional period as set out in Regulation (EU) No 806/2014 of the European Parliament and of the Council (3). The Commission's communication on completing the Banking Union attempts to set out a path on how an agreement on completing the Banking Union can be achieved. The lack of a common deposit insurance scheme and of a common backstop for the Single Resolution Fund hamper the ability of the Banking Union to sever the link from banks to sovereigns. Efforts to further reduce risk and improve risk management in banks must continue. In this context, swift work towards agreement on the regulatory package proposed by the Commission in November 2016 is crucial, as are further advances in reducing NPLs and work towards progress in risk sharing in line with the Roadmap of June 2016.

               (17)

               The Commission's white paper of 1 March 2017 on the future of Europe outlined possible scenarios for the future of the Union. The Commission further contributed with a series of reflection papers, including one of 31 May 2017 on the deepening of EMU, which built on the Five Presidents' Report of 22 June 2015 entitled ‘Completing Europe's Economic and Monetary Union’ and proposed an overall vision and sequencing of steps for the completion of the EMU architecture. The Commission made additional proposals in autumn 2017.

               (18)

               The Employment Committee and the Social Protection Committee have been consulted on the employment and social aspects of this Recommendation,

         HEREBY RECOMMENDS that, in the period 2018-2019, euro-area Member States take action within the Eurogroup, individually and collectively, to:

               1.

               Pursue policies that support sustainable and inclusive growth and improve resilience, rebalancing and convergence. Make significant progress towards completing the Single Market, particularly in services, including financial, digital, energy and transport, by, inter alia, implementing relevant product market reforms at national level. Given the positive cyclical conditions, all Member States should prioritise reforms that increase productivity and growth potential, improve the institutional and business environment, remove bottlenecks to investment and foster innovation, support the creation of quality jobs and reduce inequality. Member States with current-account deficits or high external debt should, in addition, aim at containing growth in unit labour costs and seek to improve their competitiveness. Member States with large current-account surpluses should, in addition, create the conditions to promote wage growth in a manner that respects the role of social partners and implement as a priority measures that foster investment and support domestic demand and growth potential, thereby also facilitating rebalancing.

               2.

               Deliver the planned broadly neutral overall fiscal stance for the euro area, contributing to a balanced policy mix. Strike an appropriate balance between ensuring the sustainability of public finances, in particular where debt ratios are high, and supporting the economy, while fully respecting the Stability and Growth Pact and taking into account fiscal space and spillovers across Member States. Use the improving economic conditions to rebuild fiscal buffers, while continuing to strengthen economic growth potential. Ensure the effective functioning of national fiscal frameworks. Pursue policies which support investment and improve the quality and composition of public finances, including by making use of spending reviews and adopting growth-friendly and fair tax structures. Take and implement measures to reduce debt bias in taxation and fight aggressive tax-planning to ensure a level playing field, ensure that taxpayers are treated fairly and safeguard public finances and stability within the euro area. This includes continuing work on the CCCTB.

               3.

               Implement reforms that promote the creation of quality jobs, equal opportunities, access to the labour market and fair working conditions, and support social protection and inclusion. Reforms should aim at: (i) reliable labour contracts that provide flexibility and security for employees and employers, combined with adequate support during transitions, while avoiding labour-market segmentation; (ii) quality, efficient and inclusive lifelong education and training systems that aim to match skills with labour-market needs; (iii) effective active labour-market policies that foster labour-market participation; (iv) sustainable and adequate social protection systems that contribute to social inclusion and labour-market integration throughout the life cycle and are responsive to new types of employment and employment relationships; (v) smooth labour mobility across jobs, sectors and locations; (vi) effective social dialogue and wage bargaining at the appropriate level according to national specificities; (vii) shifting taxes away from labour, particularly for low-income earners and second earners.

               4.

               In line with the Roadmap of June 2016, continue work to complete the Banking Union with regard to risk reduction and risk sharing, including a European deposit insurance scheme and making the common backstop for the Single Resolution Fund operational as agreed. Further strengthen the European regulatory and supervisory framework to prevent the accumulation of risks. Take measures to tangibly accelerate reduction of the levels of NPLs on the basis of the Action Plan of July 2017 and promote orderly deleveraging in Member States with large stocks of private debt. Further develop the Capital Markets Union to support growth in the real economy, while safeguarding financial market stability.

               5.

               Make swift progress on completing the EMU, taking into account the Commission initiatives launched in autumn 2017, while fully respecting the Union's internal market and in an open and transparent manner towards non-euro-area Member States.

      Done at Brussels, 14 May 2018.

            For the Council

            The President

         E. ZAHARIEVA

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  OJ L 306, 23.11.2011, p. 25.

      (3)  Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 225, 30.7.2014, p. 1).