Implementing EU waste legislation for green growth

As European society has grown wealthier it has created more and more rubbish. Each year in the European Union alone we throw away 3 billion tonnes of waste - some 90 million tonnes of it hazardous. This amounts to about 6 tonnes of solid waste for every man, woman and child, according to Eurostat statistics. It is clear that treating and disposing of all this material - without harming the environment - becomes a major headache.

Between 1990 and 1995, the amount of waste generated in Europe increased by 10%, according to the Organisation for Economic Cooperation and Development (OECD). Most of what we throw away is either burnt in incinerators, or dumped into landfill sites (67%). But both these methods create environmental damage. Landfilling not only takes up more and more valuable land space, it also causes air, water and soil pollution, discharging carbon dioxide (CO2) and methane (CH4) into the atmosphere and chemicals and pesticides into the earth and groundwater. This, in turn, is harmful to human health, as well as to plants and animals.

By 2020, the OECD estimates, we could be generating 45% more waste than we did in 1995. Obviously we must reverse this trend if we are to avoid being submerged in rubbish. But the picture is not all gloomy. The EU's Sixth Environment Action Programme identifies waste prevention and management as one of four top priorities. Its primary objective is to decouple waste generation from economic activity, so that EU growth will no longer lead to more and more rubbish, and there are signs that this is beginning to happen. In Germany and the Netherlands, for example, municipal waste generation fell during the 1990s.

The EU is aiming for a significant cut in the amount of rubbish generated, through new waste prevention initiatives, better use of resources, and encouraging a shift to more sustainable consumption patterns.

The European Union's approach to waste management is based on three principles:

Waste prevention:  This is a key factor in any waste management strategy. If we can reduce the amount of waste generated in the first place and reduce its hazardousness by reducing the presence of dangerous substances in products, then disposing of it will automatically become simpler. Waste prevention is closely linked with improving manufacturing methods and influencing consumers to demand greener products and less packaging.

Recycling and reuse: If waste cannot be prevented, as many of the materials as possible should be recovered, preferably by recycling. The European Commission has defined several specific 'waste streams' for priority attention, the aim being to reduce their overall environmental impact. This includes packaging waste, end-of-life vehicles, batteries, electrical and electronic waste. EU directives now require Member States to introduce legislation on waste collection, reuse, recycling and disposal of these waste streams. Several EU countries are already managing to recycle over 50% of packaging waste.

Improving final disposal and monitoring: Where possible, waste that cannot be recycled or reused should be safely incinerated, with landfill only used as a last resort. Both these methods need close monitoring because of their potential for causing severe environmental damage. The EU has recently approved a directive setting strict guidelines for landfill management. It bans certain types of waste, such as used tyres, and sets targets for reducing quantities of biodegradable rubbish. Another recent directive lays down tough limits on emission levels from incinerators. The Union also wants to reduce emissions of dioxins and acid gases such as nitrogen oxides (NOx), sulphur dioxides (SO2), and hydrogen chlorides (HCL), which can be harmful to human health.

Implementing EU waste legislation for green growth

Towards a one stop shop for cross-border VAT compliance

European Commission. Common rules are proposed for the one stop shop which will be in place as of 2015. It will first apply to telecommunications, broadcasting and electronic services and could be extended to other sectors in the future.

Article 397 of Council Directive 2006/112/EC1 (hereinafter “the VAT Directive”) provides that “the Council, acting unanimously on a proposal from the Commission, shall adopt the measures necessary to implement this Directive”.

On that basis, the Council adopted Council Regulation (EU) No 282/20112, which provides binding rules on the application of certain provisions of the VAT Directive and – inter alia – gave legal certainty to a number of non-binding guidelines agreed by the VAT Committee since 1977.

Large elements of Regulation No 282/2011 are composed of provisions which relate to the adoption of Directive 2008/8/EC3. Article 5 of that Directive contains legal changes concerning the special schemes for telecommunications, broadcasting or electronic services supplied to non-taxable persons by suppliers not established in the Member State of taxation.

Regulation No 282/2011 currently does not provide for any implementing measure related to those provisions which will come into force as of 2015. Therefore it is necessary to adapt that Regulation in order to establish binding rules on the application of the respective provisions of the VAT Directive.

These measures should be adopted by Council as soon as possible and in any case by the middle of 2012, in order to enable the Commission and the Member States to agree on the functional and technical specifications of the IT systems that need to be built for the implementation of these special schemes.

The proposed measures only relate to those aspects (definitions, scope of the schemes, reporting obligations, identification, exclusion, VAT returns, currency, payments, records) for which a common understanding is needed before designing the IT systems. Other measures, notably relating to the determination of the location of the customer, will be proposed by the Commission at a later stage. 

Only Section 2 of Chapter XI of Regulation No 282/2011 needs to be amended.

Proposal for a COUNCIL REGULATION amending Implementing Regulation (EU) No 282/2011 as regards the special schemes for non-established taxable persons supplying telecommunications services, broadcasting services or electronic services to non-taxable persons x

Growing the EU’s online economy

European Commission.11/01/2012. Proposals to encourage more online commerce would make it easier to shop on the Internet across the EU – contributing to economic growth and job creation.

Electronic commerce offers many potential benefits for consumers and businesses: lower prices, increased access to goods, development of innovative services and creation of new jobs.

Online purchases account for about 3% of all retail business in the EU, but many barriers remain to the further development of a seamless Internet marketplace across its 27 member countries.

For example, the rules governing online sales are often ignored or unclear, sites do not provide enough information for consumers, and it can be difficult to compare prices.

Such problems can turn consumers away from shopping online, despite the potential savings (currently estimated at around €11.7bn annually for purchases of goods). More people could benefit if there were a safer, more open Internet marketplace.

The Commission is proposing 16 measures  aiming to double online retail sales by 2015 by providing better protection for consumers, more information and a wider range of choices.

The new proposals would:

make it easier to buy products and services online (including music and films)

ensure more efficient, affordable delivery of products across Europe

require online sellers to provide more information about their products and prices

help develop high-speed Internet services and better communications infrastructure, so more people enjoy access, especially in rural and remote areas

provide consumers with better information and protection against abuses on the Internet.

Businesses would also benefit from the measures, encouraging them to invest in online sales and services. For example, the proposals aim to prevent illegal downloading of copyrighted content (such as films and music) and establish a clear legal framework for doing business online.

The proposals complement the EU’s electronic commerce law, which sets out common rules for cross-border online sales.

Growing the EU’s online economy

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Beyond Keynesianism: global infrastructure investments in times of crisis

As the world recovers only slowly from the 2008 financial crisis and Europe is facing a looming debt crisis, concerns have increased that the "new normal" -- a period of high unemployment, low returns on investment, high risks, and low growth -- may become protracted in advanced economies. If growth remains weak, unemployment rates and debt levels will be slow to recede. Consequently, the global recovery may continue to be fragile for years to come. What the world needs now is a growth-lifting strategy. 

This strategy could take the form of a global infrastructure initiative. Since debt levels are high, governments in the United States and Europe could increase demand and support growth through investments in bottleneck-releasing infrastructure projects that are self-financing. An infrastructure initiative should, however, go beyond the borders of advanced countries and include developing countries. Economic and social returns to infrastructure investments tend to be high in developing countries, which have become increasingly important drivers of global growth.  At the same time, infrastructure investments require capital goods, most of which are produced in high-income countries. Scaling up infrastructure investment in developing countries could therefore help generate a virtuous cycle in support of a global recovery.

Although the financial crisis of 2008 officially came to an end in the United States in June 20092, its repercussions continue to be felt across the globe. In many advanced economies, industrial production lingers below pre-crisis levels. Unemployment remains stubbornly high and balance sheets of governments, European financial institutions and U.S. households continue to be weak. In continental Europe’s highly-indebted economies, a crisis of confidence has led to plummeting stock markets and widening spreads. Signs of vulnerability are also surging in emerging market economies. The anxiety over a weak global growth outlook is rising. World growth is expected to slow down from 4 percent in 2010 to around 2.5 percent through 2012, as growth in advanced economies is projected to contract (World Bank 2012). The combination of excess capacity, low returns on investment, high risks and lower growth in advanced economies has been referred to as the ―new normal.‖3 If this ―new normal‖ becomes entrenched, several advanced countries may face a lost decade4—with negative consequences for the entire world.

What the world needs now is a growth lifting strategy. With a looming public debt crisis in Europe and high public debt levels in the U.S., the private sector should ideally become the driver of growth; however, as long as excess capacity persists and investment risks remain high, private sector investment is likely to remain subdued. In order to reduce debt levels, many governments have turned their attention to implementing austerity measures and structural reforms, but austerity measures bear the danger of further weakening growth and worsening unemployment. Structural reforms, while key to boosting growth in the medium term, will only gain traction once demand increases. This raises the question of how governments can support demand and employment without adding further to debt levels in the medium run. Investments in green technology, education, and infrastructure come to mind. Under current economic circumstances, however, investing in bottleneck-releasing infrastructure projects that are self-financing may be the best option. Infrastructure investments create jobs in sectors such as construction and manufacturing, which have been hit hard by the crisis, while also enhancing countries’ future competitiveness and growth. In addition, countries could explore innovative financing mechanisms to bring in the private sector and minimize the impact of these investments on the public debt burden.

Any growth lifting strategy would need to encompass developing countries which have become increasingly important drivers of global economic growth. Opportunities for investing in bottleneck-releasing infrastructure are limited in advanced economies, which on average tend to already have rather well developed infrastructure. As discussed below, infrastructure needs in developing countries are large and lack of infrastructure is often a key bottleneck to growth. Since infrastructure projects require capital goods, many of which are produced in advanced economies, infrastructure investments in developing countries would also support the manufacturing sector in advanced economies. In addition, as growth in developing countries is lifted, their demand for products produced in advanced economies would increase further, possibly triggering a virtuous circle of mutually reinforcing growth.

In the aftermath of the recent crisis, several economists and politicians have expressed skepticism that Keynesian-type stimulus really works. A global infrastructure investment initiative, which scales up bottleneck-releasing infrastructure projects in advanced as well as developing countries, would go beyond the traditional Keynesianism stimulus along several key dimensions. First, instead of increasing government spending in times of crisis ―by digging a hole and filling a hole,‖ it emphasizes that any growth-lifting solution should focus on implementing bottleneck-releasing investments which will not only increase demand in the short-term but also raise longer term growth prospects. Second, the traditional Keynesian stimulus directs spending toward the domestic economy, while this proposal recommends a globally coordinated investment initiative. Finally, a global infrastructure initiative would not necessarily be financed through additional government spending. The government could, however, use existing financial resources, technical assistance and improvements in policies and the institutional environment to make infrastructure projects more attractive for private investors.

World Bank. Author: Lin, Justin Yifu ; Doemeland, Doerte. Document Date: 2012/01/01.Document Type: Policy Research Working Paper.Report Number:WPS5940

Beyond Keynesianism: global infrastructure investments in times of crisis x

Strong Demand for EIB’s First Benchmark Transaction of 2012

Release date: 06 January 2012 Reference: 2012-002-EN. On Thursday 5th January 2011, the European Investment Bank launched its first benchmark transaction of 2012 with a new 3-year Sterling benchmark maturing in January 2015. The new bond provides a current coupon 3-year presence and fills a gap in the GBP benchmark curve between the September 2014 and July 2015 issues. The issue was priced at a spread of 160bps over the UKT 4.75% due September 2015.

The orderbook was opened on Thursday at 9:00am UK time with a minimum deal size of GBP 300 million and price guidance of UKT 4T 15 +160bps area. The issue saw strong support from the outset, with orders growing to GBP 350 million by 11:00am. The book closed at 12:30pm London time, reaching in excess of GBP 450 million. It allowed EIB to price an upsized deal of GBP 450 million at the final spread of UKT 4T 15 +160bps, in line with original price guidance. The size achieved exceeds that achieved with new GBP fixed rate benchmark lines in 2011.

With 55 investors taking part, the issue attracted very broad interest. The transaction received a strong response from the UK real money community, taking 88% of the deal. In Europe ex-UK, French insurers and Swiss private banks were the most significant investors.

Composition of demand for the issue:

By Geographical Region	By Investor Type
UK - 88%	Fund Managers – 69%
France - 5%	Banks – 21%
Switzerland - 4%	Insurance – 7%
Middle East – 2%	Central Banks / Official Institutions - 2%
Other – 1%	Other – 1%

Eila Kreivi, Director and Head of Capital Markets at the EIB, said: “EIB’s first benchmark transaction of 2012 has been well received.  This sterling issue was in good size - larger than for our new GBP lines in 2011, and well diversified – with a particularly large number of investors participating.”

Adrien de Naurois, Director on Deutsche Bank's SSA Syndicate desk said: "The EIB has again shown great initiative and leadership in responding to investor appetite and identifying the best possible execution window for a new benchmark - quite an accomplishment in these volatile markets."

Lars Humble, Executive Director, SSA Syndicate Manager at Goldman Sachs said: “A great result for EIB’s first new fixed rate benchmark line of 2012. Against an extremely volatile market backdrop, EIB again proved its attraction to a wide range of investors; particularly pleasing was the take up from UK real money accounts, with around 50 separate tickets in the book.”

Kerr Finlayson, Director on HSBC's SSA Syndicate desk said: “A strong start to the year for EIB with their first benchmark of 2012. The decision to issue a new 3-year bond proved to be the right one, as the bulk of demand for AAA assets in the Sterling market has been focused at the front end of the curve so far this year. The orderbook was dominated by UK real money investors, highlighting EIB's status as an investment of choice in difficult times.”

Damien Carde, Managing Director, Head of FBG EMEA at RBS said: "EIB has issued with great success the first GBP supranational transaction of the year, highlighting its ongoing presence and strong understanding of the Sterling market".

For further information please contact:

Richard Teichmeister: +352 4379 86206 / Thomas Schröder: +352 4379 86214

Issue Amount	GBP 450 million
Pricing Date	5th January 2012
Payment Date	12th January 2012
Maturity Date	22nd January 2015
Annual Coupon	2.25% annual
Re-offer Spread	+160bps over UKT 4.75% due September 2015
Listing	Luxembourg Stock Exchange’s Regulated Market
Joint Lead Managers	DB / GSI / HSBC / RBS

Background information:

EIB in the Sterling market

The EIB has been an active participant in the Sterling market since 1977. It established a position as the leading Sterling issuer alongside the UK government, and holds the largest share of the Barclays Sterling non-Gilt Index (currently the EIB has a weighting of 8.6% in the Index). Its provision of a comprehensive and liquid yield curve, reaching out to 2054, is indicative of the Bank’s status and strategic approach. The Bank has a GBP dealer group, designed to develop a pricing policy aimed at providing a high degree of transparency and consistency.

EIB’s GBP (and EUR) are eligible collateral at the Bank of England and EIB GBP bonds are eligible instruments for sterling liquidity buffer purposes following FSA rules for UK banks.

Last year, the EIB was the largest issuer in the (non-asset-backed) Sterling non-Gilt market with a share of over 8%, raising GBP 6.8 billion.

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2011 the EIB raised EUR 76 billion. In 2012 the Bank plans to raise EUR 60 billion.

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Digital Divide: From Computer Access to Online Activities–A Micro Data Analysis

This study addresses issues of digital divide among households and individuals by using micro-data analysis of ICT usage patterns.  The analysis includes data from  18 European countries (2008), Korea (2008)  and Canada (2007). Inequalities in computer and Internet use are analysed in a two-step approach. First, the paper tries to better quantify and understand the factors that separate the ‘haves’ and the ‘have-nots’. Second, it tries to explain observed differences in the frequency and type of Internet use as a result of the socio-economic characteristics of households and individuals.

The study applies logistic regression and multi-linear regression models to measure the influence of one variable while controlling for the other variables. In particular, age, gender, educational attainment, employment situation, geographical location, household income and composition are used to explain the observed differences in computer and Internet access and use (first part) and Internet frequency of use, selected Internet activities, and Internet scope of use (second part).

The study proves the feasibility of performing micro data analysis of surveys of ICT usage in  households and by individuals. It shows that:

Low income is the single most important factor for non access to a computer and to the Internet. On average, the odds that a high-income household in Europe has access to a computer and to the  Internet are over 4 times higher than for a low-income household.

The presence of children is the second most important factor for the access to a computer and to  the Internet: on average, the odds for a household with one or more children in Europe are up to 3.9 times higher than for a household without children.

Living in a town in Europe increases the odds to have access to a computer and to the Internet by  over 30% as compared to living in the countryside.

Age and economic inactivity are by far the most important factors for having never used a  computer or the Internet. The odds are over 4 times higher for European inhabitants aged 65-74 years and up to 2.6 times for those out of the labour force. (Low) income, gender (female) and (lack of) children do play a role but their effect is smaller.

Becoming unemployed is the most important factor for stopping using the Internet. The odds that a European inhabitant has not used the Internet over the last 3 months are about 2 times higher if he is unemployed or out of the labour force.

Education is the most important  determinant of the intensity of Internet use. The odds that an individual uses the Internet everyday increases by 2.4 times in Europe and by 3.6 times in Korea if he has a university degree and above.

Being a student is the second most important determinant of the intensity of Internet use – the odds that a student uses the Internet every day are 2 times higher both in Europe and in Korea.

The third factor explaining the intensity of Internet use is income in Europe (the  odds are  over 70% higher for the high-income households) and broadband access in Korea (the odds are  2 times higher for households with a broadband connection).

Young age and higher education are the main determinants for the scope of Internet use in Canada, Europe and Korea.

Montagnier, P. and A. Wirthmann (2011), “Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis”, OECD Digital Economy Papers, No. 189, OECD Publishing.OECD Digital Economy Papers.No. 189

Digital Divide: From Computer Access to Online Activities – A Micro Data Analysis

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Income shocks reduce human capital investments: evidence from five east European Countries

This paper empirically investigates whether households affected by income shocks cope by reducing human capital investments. The analysis uses Crisis Response Surveys conducted in Armenia, Bulgaria, Montenegro, Romania, and Turkey during 2009 and 2010.

A propensity score matching technique is adopted to compare health and education investment decisions among households that were affected by income shocks to the matched comparison group. The authors find that households affected by income shocks reduced some human capital investments. Interestingly, households in these five countries were more likely to adopt health-related coping strategies as opposed to education-related coping strategies.

The results from Armenia, Bulgaria, Montenegro, and Turkey show that households affected by income shocks reduced their visits to doctors and reduced their spending on medicine and medical care significantly more than the matched comparison group. Households affected by income shocks reduced their education investments, but did not adopt harmful education-related coping strategies, such as withdrawing children from schools or moving children from costly private to cheaper public schools.

These findings reveal that long-term and possibly intergenerational household welfare could be affected by short-run income shocks and hence underscore the need for governments to employ mitigation measures.

World Bank.Author: Dasgupta, Basab ; Ajwad, Mohamed Ihsan. Document Date: 2011/12/01.Document Type: Policy Research Working Paper.Report Number:WPS5926.

Income shocks reduce human capital investments: evidence from five east European Countries

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