Outlook – Philanthropy and Germany’s Presidency of the Council of the EU 1st July – 31 December 2020
The German EU Presidency kicks off on Wednesday, 1stJuly 2020. It ends on 31 December 2020 and is the first Presidency of the EU-Presidency-Trio: Germany – Portugal – Slovenia. These three Presidencies have agreed on a 18 months programme. During the period of the German EU Presidency, Germany will chair all meetings of the Council and all preparatory bodies such as committees and working groups.
The German Presidency outline
The EU is living through a challenging post-COVID-19 emergency situation when Germany takes over the EU Presidency. The programme for Germany’s Presidency of the Council of the EU will therefore focus directly on overcoming the COVID-19 pandemic by strengthening the resilience of Europe’ society, economy and political system after a worrisome period over the last 4 months of lack of solidarity between EU Member States.
The programme of the German EU Presidency is focussing on the following areas:
A very illustrative introduction to the outline of the German Presidency can be found in this publication from “Erste Lesung”.
What is in it for donors and foundations?
For donors and foundations across Europe this programme offers hooks related to their respective missions (i.e. climate,social resilience), and it provides opportunities to shape financial instruments as part of the Multiannual Financial Framework(MFF) that the philanthropy and social investing sector could apply to incentivise social investments at new levels.
In addition the German Presidency will provide space to discuss the rule of law approach in the EU, which is fundamental to maintain our political system. Furthermore the German Presidency will start the Conference on the Future of Europe, a citizens’ dialogue that should allow citizens to shape the future of their EU.
Finally the overall context of the COVID-19 revival phase sets the tone in the political debate for collaboration and complementary actionof different actors such as philanthropy – private resources for public good – and public funding. We expect that this will pave the ground for a constructive policy debate with the EU about improving the enabling environment for philanthropy across Europe along the lines of the European Philanthropy Manifesto.
Here are the areas that DAFNE and EFC want to develop further under the German EU Presidency 2020:
1. Single Market for Philanthropy
It is the aim of the Presidency Trio to fully restore the Single Market to its functioning before COVID-19, removing the remaining unjustified barriers, including in services, and ensuring the effective and fair implementation, application and enforcement of Single Market rules. We believe that this context is an opportunity to work towards a Single Market for Philanthropy, which includes a better recognition of philanthropy in EU legislation as well as at national level, supports cross-border philanthropy across the EU, and decreases today’s barriers for philanthropy in order to leverage the impact of donors’ and foundations’ spending of private resources for public good. Our expectation is to have at the end of the German Presidency clarity about how and by when we could achieve cross-border philanthropy across the EU.
2. Simple Taxation
It is the European Commission´s ambition to advance “An economy that works for people” and its 2020 Work Programmeannounced that it: “will present a Communication on Business Taxation for the 21st century, focusing on the taxation aspects relevant in the Single Market. This will be complemented by an Action Plan to Fight Tax Evasion and make taxation simple and easy.” The German presidency took on to move towards simpler taxation. We have as Philanthropy Advocacy welcomed this clear commitment to remove tax obstacles in the single market and asked to remove tax obstacles to cross-border philanthropy in this context. Tax effective cross-border philanthropy is still very difficult due to the various different, unclear or uncertain approaches for the comparability test. Action is needed at EU level to work towards a simpler and more modern non –discriminatory tax environment for philanthropic action that would help public benefit organisations and donors to support the public good.
3. Multiannual Financial Framework (MFF)
The European Commission has proposed an ambitious MFF for 2021 – 2017 and linked to it an additional recovery fund for 2021 – 2024 called “Next Generation EU”. Reaching an agreement among Member States on the distribution of the money is a key priority of the German Presidency.
Negotiations have started within the European Council. By July 2020, a political agreement is expected, allowing the European Council to adopt the revised MFF in December 2020, upon receiving consent by the European Parliament. The implementation of the MFF is due to start in January 2021. The MFF reflects the priorities of EU institutions and delimits the entry points available to European philanthropy, ranging from foundations as co-granters, co-investors, re-granters or beneficiaries from EU funds.
a. European Values Fund
As part of the revised MFF, the Commission proposes a decrease of 20% in the Values Fund as compared to its 2018 proposal. We call for an increase of the Values Fund as to strengthen philanthropy and wider civil society in protecting and promoting the European values during and beyond the COVID-19 recovery phase.
Within the MFF, the Commission proposes a strengthened InvestEU, almost doubling its size as well as adding a fifth window to its scope, the Strategic Investment Facility. The German presidency should promote a strong role for philanthropy in the InvestEU programme and encourage the development of financial instruments that will make it attractive for philanthropic actors to engage in impact investing sector and mission-related investments.
c. Recovery – Next Generation EU
The additional fund linked to the MFF, Next Generation EU, seeks to support EU Member States through the COVID-19 pandemic and the ensuing economic and political consequences. Knowing that 650 of the total 750 billion euros goes directly to EU member states, the German presidency will need to be clear about its intention to include civil society and philanthropic organisations in crisis in the recovery plans.
4. Rule of law
Strengthening the rule of law is a priority of the German Presidency. Therefore, Germany intends to double its efforts during the EU Presidency with a view to ensuring adherence to common rules enshrined in the Art.2 of the EU Treaty while launching a new mechanism whereby all members will undergo a rule of law peer review.
This new procedure will be based on the first annual Rule of Law Report, to be presented by the Commission in September and to which PA Secretariat has contributed with rule of law specific comments and concerns but also with a view to ensure that the rule of law report also covers a review of civic freedoms and civil society space on not only rule of law in a strict sense. A deficit in civil freedoms often is a first step towards rule of law issues and the rule of law review should hence flag where EU and national legislation impacting the philanthropy sector is potentially compatible with fundamental rights and European values.
The German Government also supports the activities of the Commission and the European Parliament in connection with the Article 7 procedures they have initiated against Poland and Hungary. Moreover, in the context of negotiations on the Multiannual Financial Framework, the German Government is campaigning for the introduction of rule of law conditionality for the disbursement of EU funds.
The measures adopted by several governments since the beginning of 2019 as well as the recent development linked to the Covid-19 crisis are particularly affecting civic freedoms and operating space for civil society organisations, including philanthropic organisations.
5. Conference on the Future of Europe
The Conference on the Future of Europe has not officially been presented as a priority of the upcoming German presidency. However, on 18 June, the plenary of the European Parliament called on the Conference to be launched in the Autumn 2020 and urged the Council of the European Union to agree on a common position. Progress in this regard has been made and ambassadors agreed on a common position on the planned Conference on the Future of Europe without any changes to the text on 24 June.
This makes the German Presidency central to starting preparations for the Conference and potentially responsible for its opening. As stated by the Government, there might be some adjustments need to be done in the light of the current crisis and the treaty changes are still on the table.
Philanthropy Advocacy is of the opinion that a strong and successful and participatory Conference is of outmost importance for the wider civil society, including philanthropic organisations with the view to implement the civil dialogue enshrined in the Article 11 of Treaty on the EU. Including citizens as well as organised civil society organisations, be it NGOs or foundations is essential for the true bottom-up exercise where European citizens are listened to and their voices contribute to the debates on the future of Europe.
6. Fight against money laundering and terrorism financing
The fight against money laundering and terrorism financing will also be on the agenda of the German Presidency. As representatives of the philanthropy sector we clearly support the important fight against money laundering and terrorism financingbut legitimate philanthropic and civil society work must not be unduly hampered! Increasing evidence and the outcomes of the National and Supranational Risk Assessments show that the risk related to Not for Profit Organisations is lower than in previous years. EU policy must in any case employ a risk- based and proportionate approach towards the NPO sector,without imposing general measures that may restrict or hamper the public benefit activities of organisations within the EU or beyond.
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