April 2019

EIB to implement up to 75% of InvestEU funds
The EIB has agreed, on a preliminary basis, to continue its partnership with the InvestEU programme which will draw upon the resources of the EU’s next budget, the 2021-27 multi-annual financial framework. Agreement was reached between the Council, European Parliament and European Commission which would see 75% of the InvestEU programme implemented through the EIB in the form of loans and guarantees as well as technical support provided to projects where necessary. The foundation of the plan is a €38 billion guarantee from the EU budget which the Commission predicts will leverage another €650 billion of private-sector investment in projects across a number of policy areas.

European Defence Fund targets joint research and innovation across EU border
The European Commission has launched two major work programmes under its European Defence Fund initiative which aim to kick-start coordinated industrial innovation and activity across Europe’s defence sector. The European Defence Agency will implement the funding, €25 million of which has been set aside for ‘Preparatory action on Defence research’ whilst almost €500 million will target the overall ‘European Defence Industrial Development Programme’ for the last two remaining years (2019 and 2020) of the current EU budgetary period. In contrast to previous funding, these work programmes will be awarded to projects carried out jointly by Member States rather than simply going to projects in individual countries.

EU to modernise law on consumer protection
The EU is modernising and reinforcing its consumer protection laws. EU Member States have approved a deal reached between the Romanian EU Presidency and the European Parliament on a draft directive which amends four existing EU directives protecting consumers' interests.

The directive covers a wide range of topics. It amends the unfair commercial practices directive, the consumer rights directive, the unfair contract terms directive and the price indication directive. Together with a proposal on representative actions for the protection of the collective interests of consumers, it is part of the 'New Deal for Consumers' launched by the Commission in 2017.

The new consumer protection law will apply in full to the UK and will be incorporated into domestic law over the next two years.

March 2019

Chinese FDI in EU drops again, UK maintains lead over other Member States

According to a report from a German thinktank, the MERICS Institute, Chinese Foreign Direct Investment (FDI) in the EU has dropped again in 2018 to €17.3 billion, 40% lower than in 2017. This trend is in line with Chinese FDI falling around the world as the Chinese government has continued to increase capital controls and heighten regulatory scrutiny of foreign exchange transactions. The UK still continued to receive the highest share of Chinese FDI in Europe with over €4 billion in 2018 however this represented a drop against other Northwest Europe economies such as Sweden and Luxembourg.

Invitation to make recommendations on new Industrial Modernisation Observatory
The European Commission is to establish a new Industrial Modernisation Observatory which will work to improve the monitoring of industrial modernisation and advanced technologies throughout Europe. The outputs from the project will include improved statistics and key performance indicators relating to the modernisation of industrial processes and practices, in-depth reporting on technological trends across countries and sectors and information on how to access technology centres and innovation hubs. Firms and individuals working in digital and industry clusters are invited to take part in a survey to make recommendations on further competences for the observatory. The deadline is 1 March 2019.

EU budgetary support for investment takes step further towards finalisation
The Council has announced it has agreed its position on a draft text which will bring 14 different programmes and instruments supporting investment under one banner in the next EU budgetary period from 2021. The text forms the Council’s position vis-à-vis the European Parliament in forthcoming negotiations on a final draft however it is clear that the Council supports reforming the way in which projects are signed off by the EIB and creating a ‘one stop shop’ for project promoters seeking funding.

Member States reiterate support for more efficient innovation funding
At a recent meeting of EU economy and business ministers, Member States have reaffirmed their support for the new European Innovation Council and its funding programmes aimed at facilitating the entry to market of cutting edge innovations. At the same time however ministers were keen to point out that this should not overlap with either InvestEU or VentureEU projects and should only be provided for so-called ‘non-bankable’ projects that are deemed too high a risk for investment from commercial sources.

February 2019

BT granted license to operate in China
The British telecommunications company, BT (formerly British Telecom), has become the first ‘Western’ telecommunications company to obtain a license to operate within China. The license, granted at the end of January, allows BT to provide telecommunications services (principally internet) to domestic consumers throughout China as well as provide invoices denominated in Chinese Yuan, critical for successful take up.

Leading economic commentators predict smaller economy in case of ‘hard Brexit’
A joint report by the Institute for Fiscal Studies (IFS) and Institute for Government (IfG) finds that the economic impact of a so-called ‘hard Brexit’ of the UK leaving the EU at the end of March would result in a smaller UK economy in the short and possibly medium-term. The report looks ahead to when the Chancellor will have to publish the results of the HM Treasury’s 2019 Spending Review which has so far been delayed in the run-up to the UK’s exit from the EU. The report’s authors point out that any future spending plans come on the back of a sustained period of government funding cuts which could suggest at least a continued level of funding in the short-term. They also say that a “disorderly Brexit” would mean lower economic growth in the short and long-run however it is not clear that this translates into immediate cuts to Government funding. Download the report in full.

Report highlights mixed reception to Chinese Belt & Road Initiative in Europe
A report by the Brussels-based Bruegel think tank has highlighted the mixed sentiments in Europe towards the Chinese ‘Belt & Road Initiative’ (B&R) of investment. The report, which makes use of the widely known GDELT project database, explored the perception of the B&R initiative by analysing text of millions of news articles from across the world and assessing the degree of positive or negative sentiment contained within. Overall the initiative is seen in a positive light, however researchers found significant evidence that the initiative, when viewed in conjunction with discussion on trade, was perceived negatively. The authors’ next steps are to investigate whether these perceptions match trade and economic performance in countries around the world.

January 2019

More detail released on state aid post-Brexit in case of ‘no deal’
The Government has laid a Statutory Instrument (SI) intended to integrate much of the existing EU legislation on state aid into domestic law before the UK leaves the EU. The SI, laid on 21 January sets out the responsibilities and functioning of the Competition Markets Authority (CMA) as the domestic state aid regulator post-Brexit as well as the circumstances under which aid may be granted. The draft SI also incorporates existing legislation establishing ‘Assisted Areas’ across the UK which are eligible for more intensive, public economic development funding, several of which are in the East of England. If enacted this legislation should provide confidence that such projects may continue to benefit from existing funding, at least until the end of current funding programmes. Moreover, details published on suggest that exempted aid granted before EU exit will continue to be exempt without requiring re-approval by the CMA. 

EU’s own auditors call for better justification for use of EFSI funds
The European Fund for Strategic Investments (EFSI), set up at the beginning of the current mandate of the European Commission in 2014, has been the subject of scrutiny by the EU’s own auditors, the European Court of Auditors (ECA). In a recent report the ECA acknowledges the successes of the EFSI in providing over €65.5 billion of finance from 2014 to end of July 2018. However, auditors also raised concerns over lending facilitated by the EFSI programme in higher-risk projects which was lower than predicted by the European Investment Bank in terms of value even as the number of such projects supported has increased four-fold. Moreover, the report raises concerns that whilst many of the projects can be seen as having provided ‘additionality’ that this did not necessarily mean they could not have been financed by private sources, albeit at greater cost and involving potentially shorter payback periods.

EU politicians call for enhanced investment in regions through the InvestEU programme
Members of the European Parliament have passed a Commission proposal on an ‘InvestEU’ programme for 2021-27 back to the Parliamentary committees responsible after adding a raft of proposed amendments. Amongst the changes demanded by European lawmakers, are a series of demands that national and regional authorities be allowed to supplement the EU budgetary guarantee to be extended through the InvestEU programme in order to facilitate greater volumes of finance in economic development projects. Having voted on the proposal in mid-January the Budgets and the Economic and Financial Affairs Committees will look again at the proposed legislation before putting back to a full plenary vote and possible negotiations with the European Council.

FDI screening back on the menu for EU parliamentarians in February
An EU legislative proposal to introduce an EU-level framework for the screening of will pass to a debate and a vote at the next meeting of MEPs in Strasbourg on 13-14 February. The proposal, which seeks to put in place a high-level (non-mandatory) framework of screening legislation for Foreign Direct Investment (FDI) was proposed by the European Commission which is seeking to counteract perceived threats to security from investments made in the EU which can be traced back to political decision-makers in countries around the world.

Government writes to East of England LEPs to confirm interim international trade support
The Ministry of Housing, Communities and Local Government has written to ESIF (European Structural Investment Fund) sub-committees to inform them of arrangements to provide SME trade support from 1st July 2019. The current agreement with trade support provider, Exemplas, is set to be completed on 30 June 2019 however the procurement of further support has been delayed. In order to prevent any gap in service the Department for International Trade has announced that it will provide further match funding for existing contracts which, in the East of England, means funding will be offered to Exemplas to continue existing work until 31 March 2020.

Government publishes guide on Intellectual Property Rights post-Brexit
The guide offers information on the future of intellectual property (IP) laws following the decision that the UK will leave the European Union (EU). The guide outlines how the UK’s Intellectual Property Office (IPO) will continue to support a domestic framework on maintenance and enforcement of IP rights in the event of a no-deal Brexit. Specific guidance has also been produced on trademark laws, patents, copyright and exhaustion of intellectual property.

Following the closure of the European Partnership at the end of March 2019, this website is no longer active and will not be updated. However, it will be kept live for a period of time as an archive resource.