Ministers poked several holes in the proposal for EU Inc – an EU-wide business entity – during a Council meeting in Brussels on Thursday.
The Commission pitched the EU Inc project in March, arguing it would make life easier for European startups. Ursula von der Leyen has repeatedly positioned the project as a centrepiece of the EU’s drive to speed up its sluggish economy.
But as MEPs and capitals started digging into the details, several key points stood out even though the proposal’s core idea is widely popular.
Ministers pointed to issues that had already arisen as friction points in prior talks between technical experts: feared effects on workers’ rights, possibly insufficient checks to prevent criminals from abusing the new corporate entity, and rehashed insolvency provisions.
Worried workers
The question of exactly how EU Inc will impact employees’ rights, which differ widely across EU countries, has moved to the centre of early talks about the project.
While the Commission insists, correctly, that the proposal does not set out labour law, it does determine which country’s law should apply.
Unions fear the exact details could lead to such rights being bypassed, a fear that some ministers share.
“There are ways of circumventing these provisions that are mandatory in many member states, and that is not acceptable,” Anna Sporrer, the Austrian justice minister, said on Thursday. She mentioned that Vienna was working on a “solution” to this together with other capitals.
Berlin’s and Ljubljana’s ministers voiced similar concerns.
Not too fast
The Commission pitched the new company entity with two clear headline numbers.
Founders should be able to set up EU Inc’s within 48 hours and for less than €100. But these appealing numbers have also raised eyebrows in some capitals, sparking fears that they could ease the way for fraud and money laundering.
“We do believe that there is a risk of fraud and that we should go for a short deadline of 15 days that can be extended if there is a need for further inquiries,” the French representative at Thursday’s meeting said.
Several people eyed critically planned provisions on a sped-up insolvency procedure for innovative companies, with Romania registering “serious reservations”.
National experts had earlier eyed these critically because they seemed close to the rules the Commission had proposed in a separate earlier insolvency proposal, which capitals had killed off then.
Thursday’s meeting could give the signal for experts to do the same again this time around, though Michael McGrath, the EU justice commissioner, tried to defend his position by arguing the proposed rules were, in fact, different to the ones proposed previously.
Is it all sound?
Underlying the debate are fundamental questions of whether the Council will accept the Commission’s legal route for the EU Inc proposal, which allows for establishing a regulation without agreement from all capitals.
While McGrath reiterated twice that the Commission’s legal experts deemed this route appropriate, some capitals still didn’t seem to regard the question as settled.
Written input from the Council’s own legal experts on the question would be “indispensable”, said Austria’s Sporrer, who argued for a fundamental rewrite.
Finland and Czechia also insisted on a “sound” legal basis.
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Source:
www.euractiv.com
