‘In Brussels, no one can hear you scream’: The Dutch Parliament trying to keep up with EU affairs

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A well-known quote from the Danish political TV series ‘Borgen’ reads: ‘In Brussels, no one can hear you scream’ – referring to the idea that Brussels is primarily a place you send your political opponents off to. In recent weeks, a different meaning emerged in The Hague: no one in Brussels hears Dutch MPs scream.

Last week, the Parliamentary Standing Committee on European Affairs (‘EUZA’) held a debate with Foreign Affairs Minister Hoekstra about the EU intelligence supply. The central question was how the House of Representatives can improve its knowledge and information position on decision-making processes in Brussels. Yesterday, MP Koekoek (Volt) submitted a motion to that effect, requesting the government to explore the possibilities of introducing an EU monitor through which members of parliament could follow legislation and policy developments. Would that suffice to strengthen the influence of the Dutch House of Representatives on European policy?

The diagnosis

Several experts shared their views on the matter in recent weeks.

The need for this discussion was addressed, for example, by a recent report by the International Research and Policy Evaluation (IOB) Directorate: the independent evaluation agency of the Ministry of Foreign Affairs. IOB concluded that the European ambitions of the Rutte IV Cabinet are infeasible because the Dutch civil service doesn’t have sufficient EU knowledge and “manpower”.

MEP and former Dutch MP Malik Azmani (VVD – Liberal Conservatives) shared a contribution via LinkedIn. In his blogpost, Azmani places the ball mainly in the court of the House of Representatives, and concludes that the House itself can improve and coordinate its information position and influence over EU processes. For example, he proposes to follow Germany’s example and place more ears and eyes in the European Parliament. According to Azmani, this can be done by increasing the number of official representatives, but also by intensifying contact between MEPs and MPs.

Prior to the debate, Mendeltje van Keulen, lecturer in Europe at the Haagse Hogeschool, spoke to the EUZA committee about her vision on the provision of information, and wrote a column on news website Brusselse Nieuwe. Van Keulen’s recommendation: start the dialogue between new and older/former politicians, civil servants, and other experts. There is room for improvement in retaining institutional memory of how European decision-making works. The lack of insight into how things work in Brussels is not at all entirely new.

The IOB, Azmani, and Van Keulen thus identify several roadblocks that stand in the way of optimal influence by the House, including a knowledge deficit in ministries, an information deficit in the House, and a lack of institutional memory. The result is that Dutch MPs are unable to make their voices heard sufficiently in the development of European policy.

Timing

Where does the House of Representatives itself think the problem lies? Last year, the MP Kamminga (VVD), took analyzed problems encountered by the parliamentary committees in the European dimension of their work. She found that the House is in need of i) better insight into how opportunities for influence can be effectively exploited; and ii) more knowledge about what information is most useful for MPs to be able to effectively carry out their work.

According to MPs Sjoerdsma (D66 – Social Liberals), Amhaouch (CDA – Christian Democrats), and Kamminga herself, the House already has a reasonably clear picture of what is going on, but there is more to be gained from understanding the preliminary stages of decision-making and legislation: what is being prepared at any given time in terms of new or to-be-revised policy? This information would enable MPs to time their influence better.

Minister Hoekstra made a series of pledges to this effect during the debate, including the promise to:

  • inform the House explicitly and proactively in annotated agendas and reports of EU Councils on major and politically sensitive issues;
  • proactively offer technical briefings on legislative files where the subject matter lends itself to this
  • provide feedback on the progress of non-papers in the report of EU Councils;
  • emphasize the importance of the European force field to the Cabinet and in Cabinet letters.

Loud enough?

Time will tell to what extent an extensive EU monitor and Minister Hoekstra’s pledges will have the desired effect. Ultimately, successful EU-influencing by the House relies on commitment and attention to the process. Commitment requires an above-average interest in the EU, investment of time, and work capacity. Elements that are strongly intertwined, and at the same time sparsely distributed in the Lower House. VVD, D66, CDA, Volt, and one-man-group Omtzigt were present at the debate: a chorus of just five voices. Will Brussels hear them scream?

Digital Services Act (‘DSA’) and Digital Markets Act (‘DMA’) – the home stretch!

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On January 1, France took over the presidency of the European Union from Slovenia. Until June 30 this year, the Élysée Palace takes lead in guiding European policy, and one of France’s priorities is to conclude negotiations on the Digital Services Act (“DSA”) and Digital Markets Act (“DMA”).

On December 15, 2020, the European Commission presented the DSA and DMA, and there has been considerable progress over the past year. Last Tuesday, trilogue negotiations between the European Parliament, European Commission and the Council of the European Union (‘Council’) on the DMA began. The negotiators would like to conclude these as early as March 29. So far, we see that the Parliament is most ambitious to curb the power of big tech companies, where the Council has stayed closer to the Commission’s original text proposal. The same is true for the DSA.

This blogpost provides a brief insight into what has happened so far, and looks ahead to the final phase of the legislative process

Route The Hague – Paris

More than a year and a half ago (May 2019), we first wrote about the Dutch ambitions in terms of digital platform regulation here. On May 17, 2019, then State Secretary for Economic Affairs, Mona Keijzer, proposed several measures to be able to intervene at the European level in competition issues.

Keijzer found support from the French, among other Member States, resulting in joint positions on the subject: a modest novelty. Historically, Paris and The Hague have difficulties finding each other on important European issues, but Brexit has forced the Netherlands to seek new allies. In addition, both countries are often at the forefront when it comes to regulating the digital platform economy. On behalf of the Netherlands, the new Minister of Economic Affairs Micky Adriaansens (VVD), who took office this week, now seems to be the designated Minister to represent the Dutch DMA and DSA position – although Hans Vijlbrief, State Secretary for Competition, might also be eligible to take on the DMA dossier. A decision on this will reportedly be made next week. In any case, both can make good use of the ‘French-Dutch axis’ that has been created around the theme of tech regulation.

Brussels at Full Steam Ahead

After the publication of the DMA and DSA in December 2020, the Council proceeded quickly, and began tinkering and negotiating the proposals in Council’s Working Group in January 2021. At the EU Competition Council on May 27, the first progress could already be validated by the responsible Ministers. In the months that followed, work was continued by the Council’s preparatory groups, and on 25 November the Competitiveness Council reached an agreement on the Council’s “general approach”. Including the following changes:

DMA

  • A shortening of deadlines for the designation of platforms with a gatekeeper function and tightening of the definition criteria;
  • Adjustment of the structure and scope of the obligations (Art. 5 and 6) in several areas. For example, end users should be able to unsubscribe from core platform services more easily;
  • For the sake of harmonization, it is confirmed that only the Commission may enforce, but Member States may authorize their competition authorities to investigate possible non-compliance and to transmit their findings to the Commission.

DSA

  • Adds additional obligations for online marketplaces and search engines, and stricter rules for very large online platforms;
  • The text allows national authorities to give digital platforms direct orders regarding illegal online content and obliges platforms to keep authorities informed of their actions (“feedback obligation”);
  • In terms of enforcement, it retains the country-of-origin principle but at the same time grants exclusive enforcement powers to the Commission, allowing it to tackle systemic infringements by very large online platforms and search engines.

The European Parliament began their scrutiny a bit later, due to a competence fight between different Parliamentary committees. It finally cut the knot in April: the IMCO (internal market) committee was put in charge of both DMA and DSA. ECON (economic affairs) and ITRE (industry) were designated as “co-responsible,” and were even given “additional opportunities” for a say in the final Parliament position.

German MEP Andreas Schwab (EPP) was put in charge of writing the DMA report from IMCO, and Danish Christel Schaldemose (S&D) that on DSA. Based on their draft reports, other MEPs submitted thousands of amendments, between which compromises were sought from September onwards. On December 15, there could be a plenary vote on the DMA position of the EP. There was more disagreement on the DSA, and it will follow later this month. Key EP positions on the DMA and DSA include:

DMA

  • Quantitative criterion of market capitalization to designate ‘gatekeepers’ is increased from 60 to 80 billion;
  • Additional requirements on use of data for targeted or micro-targeted advertising and interoperability of services;
  • Provides for restrictions on “killer acquisitions”: in cases of systematic non-compliance, the Commission can prohibit digital gatekeepers from making acquisitions that harm emerging competition.

DSA

  • Certain exemptions from DSA obligations for micro and small businesses;
  • Greater protection of minors for direct marketing and targeted advertising for commercial purposes;
  • Online platforms should be prohibited from using deceptive or nudging techniques to influence users’ behavior through “dark patterns”

The Home Stretch?

Last Tuesday, the trilogue negotiations on the DMA began, with the aim of agreeing on a final text. The Parliament, through rapporteur Schwab and his “shadow rapporteurs” will defend its position, and the French Presidency will do the same for the Council. Commissioners Vestager and Breton, and (senior) Commission officials, are acting on behalf of the Commission as an ‘honest broker’ in these negotiations. In recent months a ‘DMA task force’ has been set up for that purpose, consisting of officials from DG COMP and DG CNECT. They have also held numerous discussions with interested companies, NGOs, governments and citizens, and must steer the discussions between Parliament and Council at a technical level.

The negotiators are aiming for an agreement by the end of March, in order to be ready before the French presidential elections. It is doubtful whether this will be possible, given the differences in insight that still need to be bridged between Parliament and Council.

Public Matters advises companies and other organizations that are active in the tech sector, or that are indirectly / directly affected by the impact that the DSA and DMA will have. Check out this page for more information.

Trade associations going digital: research into online advocacy in times of COVID

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Trade associations are the voice of thousands of Dutch companies in the political arena in The Hague. Where traditional media is an often used tool to make the voice of the association’s members heard, Public Matters was curious to see to which extent trade associations use social media in their lobbying. After all, many social media channels enable users to reach specific target audiences. Politicians are very active on the various social media platforms and often use this tool to put issues on the political agenda, or to gather input from the field.

Public Matters looked into the social media activity of 50 Dutch trade associations from the 18 largest economic sectors, including hospitality and mobility. How do these sectors and their individual sector organizations use Twitter, Facebook, Instagram and LinkedIn? And what opportunities do these platforms offer to influence policy? Two fixed moments in 2019 and 2020 (before and during the corona crisis) were taken as a starting point, to determine a correlation between COVID developments and the use of social media.

This article focused on Twitter, as it is the most widely used social platform used as a lobbying tool. In addition, of all the social media platforms, trade associations are most active on Twitter. At the end of the article, a brief overview of the activity of trade associations on LinkedIn, Instagram and Facebook is included.

Research method

To determine how influential trade associations are, we conducted an analysis in which trade associations were divided into four profiles in their use of social media. These are:

1. The inactive profile: the trade association has an account but uses it only sporadically or not at all.

2. The observing profile: The trade association uses social media mainly to follow news and to stay informed of developments in the sector, and sometimes to retweet or share messages from other organizations.

3. The professional profile: The trade association shares a lot of news about the sector and its own activities, such as working visits and conferences, but also shares news items and messages from politicians and ministers.

4. The influencer profile: The trade association is very active on social media and not only shares messages about its own work and the sector, but proactively puts issues and standpoints on the agenda and subsequently engages in online debate with politicians, ministers and key opinion leaders.

 

Besides the classification into four profiles, the influence score was also measured. This involved looking at the reach of the average tweet based on the number of reactions, likes and retweets. The higher the score, the more dialogue on the subject there is among followers, and the greater the influence on the network via Twitter’s algorithm. The score ranges from 0 (no influence) to 200 (maximum influence). The influence score of the average industry organization is 19.8 (measured mid 2021).

Capturing the voice of the members in one Tweet

Many trade associations use Twitter as an additional channel to communicate with their members, as the tool is more flexible compared to traditional newsletters. The goal of their social media messaging often is to inform members and other stakeholders in the sector. However, it also offers the opportunity to influence the political and public debate. In fact, Twitter is mainly used to share news and political decisions. The platform is frequently used by politicians, ministers, journalists and key opinion leaders. In general, Twitter can be seen as a platform where opinions are shared as well as shaped.

Using Twitter as a lobbying tool

Following this, Twitter is an excellent platform to amplify the voice of members. 149 out 150 members of parliament who are active on Twitter, as well as ministers and their online spokespersons, use the medium to gather input for political decision-making and to gauge the sentiment on policy proposals among the wider public. If a trade association succeeds in generating ample visible support for its plans through Twitter, it can use this support to influence political debates. Some examples of how this can be achieved:

  • Call on members to follow, like, and share all sector channels and messages on social media. The power lies in the amount of interaction with a post or tweet. The more interaction, the higher Twitter’s algorithm will push the tweet in the timeline of followers. Also, make sure that the relevant decision-makers follow your trade association by following, liking, and retweeting posts yourself.
  • Share links to social media channels and news in newsletters, on your website and in WhatsApp groups with members.
  • Draw up a Twitter plan for members: which policymakers or key opinion leaders should they follow, like, tag, or address? When should they post? What language and tone of voice do they use? What are the do’s and don’ts? And what hashtags do they use to make a topic uniformly trending?
  • Actively Tweet during political debates (i.e. about the input of the sector organization or the results of the debate). You can also address members of parliament by tagging them. This way you can share successes, and you can influence the (online) debate.

Twitter used mainly as a ‘professional’ profile

Our analysis shows that many trade associations use Twitter as a ‘professional’ profile. The Twitter accounts provide policymakers and members with a good insight into the activities of the association or into the trends within the sector. If associations have the right followers, Twitter offers an extra tool to inform external stakeholders about the association’s activities. This often means that messages from the association’s own website or other media are ‘pushed’ via the Twitter channel.

Twitter rarely used for political lobbying

It is striking that trade associations only sporadically use their Twitter channel for political lobbying or to really enter a discussion and gather information (the ‘pull’ variant, reaching out to the target group). Yet Twitter is the medium where industry organizations, politicians, and other stakeholders can communicate freely. And in addition to this, Twitter offers the possibility to communicate the concerns or wishes of an organization transparently and publicly to politicians. Unlike individual companies for whom social media is more linked to marketing and corporate communications, trade associations have more leeway to communicate publicly on behalf of their members. And in some cases they need to show members that they are publicly promoting their interests.

Corona crisis generates ‘professional’ and ‘influencer’ profiles

However, the analysis also shows that since the emergence of COVID-19, several trade associations several trade associations with “inactive, observer or professional” profiles started showing characteristics of an “influencer” profile. The hospitality industry is a good example of this. During the corona crisis, they adopted an increasingly activist tone in their social media communications and proactively called on government ministers not to implement the proposed corona measures. Often supported by hundreds of reactions, likes and retweets from the sector. Unfortunately in this specific case, this was no guaranteed success.

Trade associations from the sports, healthcare, and mobility sectors are also increasingly using Twitter to address the adverse effects of corona measures. Several examples:

The fitness sector

From March to June 2020, the branch organization NL Actief (branch association of recognized sports and exercise companies) used Twitter to plead for the reopening of gyms as quickly as possible. They did this with the help of influencers in the field of sports and healthcare such as Arie Boomsma ( a well-known Dutch sporter) who were visible both online on social media and TV programs such as Op1 and Jinek (Dutch current affairs programs). Such offline moments were also widely shared online, such as a BNR news radio fragment in which NL Actief’s director Ronald Wouters argued in favor of accelerated opening. Spreading such lobby messages from more traditional channels to social media such as Twitter can generate a lot of likes and shares and thus strengthen the lobby message’s credibility and impact.

As the crisis continued, it became increasingly clear that COVID-19 patients with an unhealthy weight were at greater risk of a more serious course of the disease. NL Actief responded cleverly to this on Twitter. In addition to the branch association’s logical plea on Twitter for an extensive support package for fitness entrepreneurs, studies were also shared on the platform that showed that one out of three people have started exercising for health reasons in recent years. Calls by State Secretary Blokhuis (Ministry of Health, Welfare and Sport), Minister de Jonge (Ministry of Health, Welfare and Sport), and Intensive Care specialist Diederik Gommers to pursue a healthy lifestyle were also widely shared by NL Actief. In addition, the trade association cleverly capitalized on the worldwide social media campaign #letsmoveforabetterworld and created unity among its followers by using the hashtag #samensterk.

  • The gyms were eventually completely closed from the start of the first lockdown (15 March 2020) until 1 July 2020, although the original plan was to keep the gyms closed until 1 September 2020. On 15 October 2020, the Netherlands entered the second lockdown period. As late as 15 December 2020 the closing of gyms followed, which was two months later than during the first lockdown period.

The mobility sector
In 2020, trade associations from the transport sector, including KNV and the Mobility Alliance, pleaded on Twitter for the expansion of transport capacity and the financial compensation for cancelled trips, and supported this with research. For example, a Roland Berger report in May 2020 entitled “Long-term impact of COVID-19 on mobility” (commissioned by the Mobility Alliance) showed that a rapid return of the (old) mobility problems was imminent if transport capacity was not expanded. The conclusions of the study were widely shared on Twitter by the Mobility Alliance, as was the live recording of the presentation of the study in Nieuwspoort (meeting center) in the presence of the then Minister Van Nieuwenhuizen (Ministry of Infrastructure and Water Management). Later that year, Van Nieuwenhuizen announced increased investment in infrastructure in the coming years. On the relationship between corona and mobility, she said: ‘If the economy picks up and traffic increases again, there are so many reasons you can see that mobility will increase and investments are needed.’ With this, she supported the call of the Mobility Alliance.

Specifically, there was a great deal of media attention in 2020 regarding the continued financial support of healthcare-related transport. This media attention and the urgent letter the KNV sent to the minister on this subject were Twitter messages with a lot of likes.

  • After KNV’s letter, Minister De Jonge (Health) wrote to the House of Representatives: “The starting point is to offer turnover guarantees for the period up to 1 June for the healthcare transport sector. This also answers the call of the sector to pay care providers for non-delivered trips and to reimburse additional costs as a result of complying with corona protocols.”
  • Transport capacity has been scaled up and down by the Cabinet in 2020, depending on other COVID-measures. In addition, the sector has been compensated several times by means of the availability payment, the last of which has been extended until September 2022.

Culture sector
In the cultural sector, no (new) trade associations seem to have emerged during the corona crisis to promote interests of artists online. A large trade association from the cultural sector, the Federation of Employers’ Associations in Culture (representing the performing arts, museums, libraries, centers for the arts, venues and orchestras) does not have a Twitter page. The trade association Cultuurconnectie (representing cultural education, amateur art and community college work) retweeted news about artists in financial difficulties and reduced income, but did not start an online campaign. The “Taskforce Cultuur” (an ad hoc cooperation between various cultural umbrella organizations, established at the beginning of the corona crisis) also does not have a Twitter page.

On the other hand, private online actions by artists were (more) successful. In September 2020, a well-known Dutch comedian Peter Pannekoek called on the Dutch people on TV to go to the theatre again. Peter Pannekoek’s appeal received a great deal of support on social media. Dutch celebrities and theatre producers broadly shared the appeal. The hashtag #reddecultuur (save culture) also went viral on Twitter. An appeal to Minister Van Engelshoven (Ministry of Education, Culture and Science ) to offer more room for customized work was signed by dozens of cabaret artists.

  • Van Engelshoven was heavily criticized, especially at the start of the corona crisis, for her limited efforts for the culture sector. In an AD article (daily Dutch news paper) at the end of 2020, Van Engelshoven said: “I think that criticism has now has faded. All in all, the cabinet is putting 1.6 billion euros into the sector. It is good that the cultural sector stood up for their interests so passionately. The blow they have received is also very great.”

Most influential branches
Although some trade associations started using Twitter (much) more in 2020 and have often even shifted from an ‘inactive’ profile in 2019 to a ‘professional’ profile, this increase is not immediately reflected in the top 10 trade associations with the highest influence score. There, the traditional and larger trade associations generally continue to dominate (both in the pre-coronagraph 2019 and in 2020). This is probably because these trade associations already had their communication budgets, resources, FTEs and online knowledge in order, and could therefore build on their existing online communication strategy that were proven to be effective in previous years. Associations who stand out are the new entries in the top 10 in 2020: Koninklijke Horeca Nederland (hospitality) and Koninklijke Metaalunie (industry), undoubtedly riding the wave of COVID.

Overview sectors

In total, Public Matters surveyed 50 trade associations from 18 sectors. The influence scores per sector are detailed below. Although to some extent the same conclusion can be drawn as with individual trade associations (sectors that did well in 2019 will also generally do well in 2020), we do see a number of striking developments. In ‘corona year’ 2020, VNO-NCW’s influence on Twitter as a spokesperson for the business community increases compared to the other sectors. In addition, the influence of the hospitality sector increases from 7.3 in 2019 to 22.9 in 2020, and the health sector and the sports sector also substantially increased.

It is also noteworthy that the influence of the cultural sector slightly dropped in 2020. As described above, trade associations from the cultural sector were also remarkably quiet online in 2020.

NOTE: All data in the tables are not a total overview of the scores throughout the year, but have been compiled on the basis of two months per year (May and November 2019 and May and November 2020).

Activity on LinkedIn, Facebook and Instagram

LinkedIn
: Most trade associations post on LinkedIn on a weekly basis, ranging from “in-house” coverage of, for example, the search for new employees, to sharing photos from a work visit, or publishing their own facts and figures about the industry. Two of the 50 trade associations in our sample are not active on LinkedIn.

Instagram: Only 18 out of 50 associations surveyed make use of this medium. In addition, with an average of 180 posts per profile and 1900 followers Instagram can hardly be called an active medium.

Facebook: Although 130 members of parliament have a Facebook account, only half of the trade associations surveyed have an account.

Want to know more?

Would you like to know more about the use of social media within your trade association? Or are you interested in the underlying data? Please contact Machteld van Weede or Nick Spier (Public Matters).

The Member State Effect

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In the book The Brussels Effect, Anu Bradford well explains how EU regulation is transmitted to both market participants and regulators outside the EU. Take for example the EU Emissions Trading System (ETS), which served as a model for countries like Korea and China. However, this ‘defining position’ is challenged by a fast-changing world. Developments in digitalization and green energy are of such a pace that the traditional way of establishing European regulation can be too slow or even unfeasible. Take for example the legal and political limitations of the EU competences or the time-intensive negotiations between member states and institutions.

To counter these limitations and secure a leading position, member states often decide to unilaterally develop national regulation instead of waiting for a comprehensive European framework. In effect, they may inspire other EU member states and countries outside the block to also follow a national approach (see examples below). This evolving process, in which an EU member state decides to regulate a certain policy area on the national level and inspire other regulatory jurisdictions to follow suit, is what I refer to as the ‘the Member State Effect’.

The Member State Effect in practice

Two examples of the Member State Effect can be found in the areas of mandatory corporate due diligence and (green) hydrogen. In the case of due diligence, France created momentum across Europe by adopting the ‘Loi de Vigilance’ in 2017, which requires all large French companies to draw up and publish a due diligence plan to prevent human rights violations and damages to the environment in their production chains. Recently, Germany decided to follow France’s example by implementing the ‘Supply Chain Due Diligence Act’ and the Netherlands and Denmark are considering to also take a national approach if the EU-track progresses insufficiently in the months to come. In 2020 the European Commission announced to develop a legislative initiative on human rights and environmental due diligence obligations for EU companies but failed to deliver on their initial deadline of early 2021.

In the case of hydrogen, a similar policy development can be observed, although the process is in an earlier stage. Member states are calling upon the European Commission to come up with a regulatory framework for hydrogen while they are speeding up their national plans for a hydrogen economy. For example, Germany launched the H2 Global initiative to build an international market for green hydrogen with an investment of €900 million and France announced to invest in two large green hydrogen production facilities as part of their €30 billion plan to “re-industrialise” the country. Countries like the Netherlands are following these announcements with great interest and it serves – at least – as a form of inspiration to also develop national (supportive) policies and not fall behind. Looking at the policy challenges and divergent (geopolitical) interests of member states in the area of hydrogen, it seems likely that more member states will decide to take a national approach and not await comprehensive and harmonized European regulation.

Consequences for the regulatory landscape

The decision of a member state to choose national regulation over EU regulation can have various justifiable reasons. However, it leads to greater fragmentation of the European regulatory landscape and reduces the chances of effective EU policy since multiple member states have already introduced their own (except if one member state’s policy has been leading in the drafting of the other national policies). This is worrisome because tackling climate change and enhancing the free movement of goods and services call for an internationally coordinated and comprehensive approach from governments.

Ambitious policy measures like the Fit for 55 package* can counter the policy fragmentation and put the EU back in the driver’s seat. It harmonizes a large number of existing regulations and contain a much needed catch-up in the field of sustainable technologies. In the upcoming period, it will be interesting to see to which extent the EU is able to push through European-wide initiatives like the Fit for 55 package as a better alternative to national policy initiatives.

Influence and manage the Member State Effect

The Member State Effect shows that international companies and NGOs should not only pay attention to the EU dimension but also to progressive countries. Being aware of the policy developments on both level allows you to manage and influence policy fragmentation by engaging with policy makers in a country that considers to introduce national policy.

 

*Package of proposals to make the EU’s climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030.

Photo “European Union Flags 2” by Thijs ter Haar

A conversation with Dominik Meier (top lobbyist in Berlin): about the German elections

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Europe is currently not only waiting for the formation process in the Netherlands, but is also watching what is happening in Germany with great interest. To look back on the Bundestag elections and look ahead to a new government, Public Matters spoke with Dominik Meier, managing partner at Miller & Meier, a public affairs and lobby consulting firm in Berlin. This week Public Matters is visiting Berlin, on the occasion of Public Matters’ 20th anniversary. All the more reason to reflect on the developments in public affairs and politics in Germany.

 

Elections

Meier describes how the floods of July 14 and 15 put climate change high on the political agenda. Yet it did not help the Grünen to the chancellorship. In the end, Olaf Scholz and his SPD rose above both the Grünen and the CDU/CSU. The focus on the ‘puppets’ was possibly even stronger in Germany than it was in the Netherlands. Meier therefore attributes the SPD’s victory to the professionalism of SPD leader Scholz and ‘mistakes’ in his opponents’ campaigns; to inaccuracies in Annalena Baerbock’s CV and a smiling Armin Laschet during a press conference on the floods in North Rhine-Westphalia. None of the three was very popular, but Scholz was given the benefit of the doubt, partly because of his role as Vice-Chancellor and minister of Finance in cabinet Merkel IV.

 

“The traditional people’s parties no longer exist” says Meier, reflecting on the fragmentation of the political landscape in his country. As in the Netherlands, a coalition must now be formed with several parties from the political center, where previously two parties could achieve a majority. This has implications for public affairs: increased diversity of political stakeholders creates a need for advice on forming strategic alliances and broad stakeholder approaches. There are simply more stakeholders involved in decision-making. The ‘traditional’ form of lobbying, where much depends on personal contacts, has had its day. According to Meier, this fits in with society’s need for more transparent politics and decision-making.

 

Societal role of the business community

Combating climate change is the main challenge of the next German government. After closing the nuclear power plants, the government must now start the ‘coal exit’; it was previously agreed that this must be done before 2038. The transition to a sustainable and circular economy must be made together with German industry. At the same time, an explosive increase in energy prices must be prevented so that the economy continues to run. In short, the parallels with Dutch public affairs issues are easy to recognize.

 

When asked whether much will change in the labor market under the leadership of a social democrat, Meier replies that this is unlikely. The choice for Scholz is a choice for continuity; Germans do not like change. Yet this change is needed in a number of policy areas. A Ministry for Digitalization, for instance, should increase the competitiveness of the digital economy by tackling challenges such as the rollout of the 5G network, the FDP proposed earlier.

 

To meet social and political challenges, the business community must position itself well. Meier underlines that portraying the role of business in society is becoming increasingly important for public affairs professionals. Communication with politics and society is essential: “social media are increasingly playing a role in and are more important than ever in the interaction between politics, society and business”, Meier said.

 

European Union

The dossiers at the European level remain largely stagnant as long as the formation process is underway – after all, Merkel’s cabinet is outgoing, leaving important policy measures on climate, digitalization and taxation to a new government. Broadly speaking, more continuity can be expected on European foreign policy. Scholz is in favor of more fiscal intertwining of EU member states. However, cooperation with the FDP probably means restraint in the areas of taxation and debt sharing, a position that is well received by the Dutch, Meier knows. Government participation of the Grünen means a more ambitious climate policy. For the French presidency of the EU, which starts in January, the political support of the Germans is necessary to make an impact on issues such as EU integration and climate change. A successful formation process is therefore important for progress on European policy dossiers.

 

The formation process

Meanwhile, this formation process has already begun. Here the FDP and the Grünen play a major role; they act as a block and have already entered pre-coalition talks with the SPD. Meier considers this coalition, the ‘traffic light’ coalition, the most likely. The chaotic situation within the CDU/CSU, with Laschet recently hinting at resigning, makes a ’Jamaica’ coalition unlikely. In doing so, Meier says that the CDU/CSU is “the loser” of the elections and therefore they need to work on a new narrative. For the voter, it is currently difficult to recognize which issue the CDU/CSU ‘owns’ according to Meier: “because if you choose climate policy, you vote for the Grünen, if you are for free trade, you vote for the liberals, and for anti-migration for the AfD.”

Photo by Noppasin Wongchum

Machiavelli kicks off with Marijnissen and Jetten

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Tuesday morning, the Machiavelli Foundation kicked off the parliamentary year with its traditional breakfast meeting in Nieuwspoort. This time with SP-leader Lilian Marijnissen (Socialist Party) and acting D66-president Rob Jetten (Liberal Democrats). In their preview of the political season, both politicians focused mainly on the here and now: the awkward formation and the willingness of political parties to take responsibility for it.

In order to achieve ambitious climate targets without increasing inequality in society, the next cabinet will have to break with its current line and adopt a more active stance, according to Jetten: “This formation shows once again that if you remain stuck in your political blockades, nothing at all will happen in this country.” A continuation of the current coalition is therefore not desirable, according to Jetten, especially when it comes to medical-ethical issues. According to Marijnissen, sustainable change requires a break with neoliberalism and Prime Minister Rutte’s management style.

After the first reflections, Jetten discussed the HJ Schoo lecture by party leader Kaag. He had not expected to see such pronounced headlines the morning after. During her speech, Kaag merely distanced herself from the current administrative culture and the political games in The Hague. The proverbial ball for the cabinet formation now lies with Rutte. Whether the next cabinet will be a majority or minority cabinet, in both cases the cabinet must gather support from the House of Representatives.

According to Marijnissen, Kaag has been too much of a spectator when the discussion about the cause of the many affairs was being held in the House of Representatives; neoliberalism and the administrative culture that stems from it are to blame for this. For the SP, ‘taking responsibility’ means actively taking a stand in that discussion, which means that governing with Rutte is not an option. According to Jetten, this puts the SP out of action and just makes it harder to change the system.

In short, to break the current deadlock in the formation, the current administrative culture must be broken: according to Marijnissen, this is possible without, and according to Jetten also with, Rutte as leader of the VVD (Conservative Liberals).

Public Matters is main sponsor of the Machiavelli Foundation and thus supports the debate on political communication and its impact. Curious about the activities of the Machiavelli Foundation or watch the kick-off of the parliamentary year? Go to www.stichtingmachiavelli.nl for more.

Tech in the House of Representatives: the first 100 days of the Digital Affairs Committee

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A data leak at the Municipal Health Service (GGD), ‘hacking’ into a secret meeting of the Council of Foreign Affairs by tech journalist Daniël Verlaan and MPs who do not know what the acronym ‘GAFA’ stands for: government and tech do not always go hand in hand. In February of this year, presenter Arjen Lubach coined the term ‘digibetocracy’ and made an appeal to politicians: pay more attention to IT knowledge among politicians. In the same month, the Lower House officially decided to set up a Permanent Parliamentary Committee on Digital Affairs (Vaste Kamercommissie Digitale Zaken (DiZa)). Last Saturday, 31 July, 100 days passed since the kick-off meeting of this committee. What has happened so far? Colleagues Tessel Schouwink and Jonathan Provoost look back.

Although the importance of digitisation has been known for years, it was only last year that real action was taken. In February, an amendment by CDA MP Van der Molen was adopted, after which a permanent Lower House committee for Digital Affairs was established. The basic idea was to allow the House to gain more knowledge in the area of digitisation and to be able to monitor potentially impactful developments in this area. In addition, more and more Dutch and European legislation has a digital component. DiZa’s task is to give this component the much-needed attention.

Incorporating and framing

It was not until early June that the official terms of reference of the committee were set: the new committee would like to take the lead in dealing with “digitisation issues that transcend the committee” and will focus, among other things, on putting digitisation trends on the agenda, dealing with digital legislation and acting as a point of contact for both the government and social groups, the business community and science in the area of tech.

This range of tasks still needs to be defined: during the procedural meeting, only 14 agenda items were discussed on average – in stark contrast to the 47 agenda items discussed by the Interior Affairs Committee (BiZa), over 50 by the Economic Affairs and Climate (EZK) and Education, Culture and Science (OCW) committees and over 60 by the Justice and Security Committee (J&V). A comparison with these already established committees provides insight into DiZa’s start-up process. The number of files to be processed is not yet close to that. This is mainly because decisions are constantly being made on which files will be taken over from other committees. In the first procedural meeting, for example, it was decided that a number of subjects from the EZK committee would be moved to DiZa. The most notable of these are the European Digital Service Act and the Digital Market Acts, and the European approach to Artificial Intelligence.

The committee officially has 34 members, but as with other committees, the number of actually active members is lower. In the past 100 days, the committee met five times for a procedural meeting and the average number of committee members present was about six. This is not much less than the procedure meetings of the BiZa (six), J&V (six), OCW (more than seven) and EZK (more than eight) Committees.

Building knowledge

Yet the low attendance is striking when the call for more digital knowledge in the Chamber is considered. The central government report ‘Update Required’, published in 2020, already concluded that many MPs label the subject of ‘digitisation’ as ‘terribly technical’ and ‘complicated’. Of the 34 committee members, only one has a clear background in digitisation: Queeny Rajkowski (Conservative Liberals – VVD) was a city councillor in Utrecht for four years, with digitisation in her portfolio. It is worth noting that people with a background in exact sciences are in the minority in the Chamber at all.

An alternative to a relevant background is that ‘there is enough support for MPs’, according to former SP MP Arda Gerkens. Each member of parliament has a policy officer, who provides substantive support for parliamentary work and does a lot of preparatory work. In addition, the parliamentary organisation itself is working on expanding the number of independent committee advisers. For instance, there is currently a vacancy for an EU advisor for the DiZa. The question remains whether this is sufficient: can a member of parliament without a substantive digital background rely fully on advisers and policy staff?

The ‘Update Required’ report therefore recommends using the government, civil society groups, the business community and scientific institutions as sources of information. The report writes:

“In recent years, the House of Representatives has been offered more and more agendas and monitors from several ministries, advisory councils and knowledge institutes. Yet this does not increase the sense of control. What’s more, the integral consideration of interests is sometimes made more difficult by the volume of information that comes to the House of Representatives and the sometimes technical subject matter.”

Cooperation in this area is still in its infancy, according to the report. Members of parliament do not always receive the right amount of information, and organisations lack a ‘permanent’ point of contact in politics. A lot of relevant knowledge about digitisation is lost or not noticed. DiZa has already received a large number of invitations for introductory talks from companies, institutes and knowledge institutions, such as the Personal Data Authority and the Amsterdam University of Applied Sciences. They have therefore immediately picked up the gauntlet.

Has the call been answered?

The call from society for more knowledge about digitisation among politicians does not seem to have been fully answered in the first 100 days. With DiZa, the House of Representatives has started a good attempt to get a better grip on the digitising world, but where the developments in the field of tech seem to be growing ever faster, there is little time to get going. MPs must be able to find the committee even better given attendance, although this can be explained by a number of things: the large number of small groups (and therefore fewer people), the caretaker state of the cabinet and the relatively short time from the kick-off meeting to the summer recess.

In September, the role of DiZa becomes more clear, and therefore more interesting. First of all, other committees have been thinking about the dossiers they want to hand over, and the outcome of this will be discussed during the procedural meeting of 15 September. In addition, around Budget Day (Prinsjesdag) it will become clear which budgets the committee is allowed to discuss. Will DiZa be able to play a significant role immediately during the first budget discussions after its establishment?

This piece was written by Tessel Schouwink (trainee) and Jonathan Provoost (consultant).

Photo by Pixabay from Pexels

Concerns about healthcare under a new cabinet

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After a turbulent political year, the summer and formation recess has really begun. In the past year, no sector has been in the news as much as the health sector. Whether it was combating the COVID-19 crisis, rising staff shortages, the ageing population, increasing medicine shortages or restrictions on access to new innovations and specialist care.

The relative calm of the summer offers the perfect opportunity to look ahead to the new political year. The formation of a new cabinet and the accompanying coalition agreement are eagerly awaited. In this blog, Mitchell van Bekkum & Maaike van Vliet describe what we can already expect from future healthcare policy.

 

Requests from the field

The coalition formation has been simmering for several months. Organisations try in various ways to influence what will eventually end up in the coalition agreement. Particularly in the healthcare sector, which faces major challenges, there are many parties that have an opinion on healthcare policy. Since the formation of the coalition agreement started, many letters to the formateur, studies, opinion articles and stakeholder coalitions have been published to draw attention to their solutions to these challenges. Although every organisation has a different solution, we can roughly identify three trends:

  • The importance of prevention is underlined by (almost) all healthcare stakeholders. However, they do not always mean the same thing. Some organisations are in favour of a sugar tax or want to stimulate a healthy lifestyle by means of lifestyle interventions. Other parties attach more importance to the development or stimulation of medical interventions that lead to health gains. The question is therefore not if, but what about prevention will be included in the coalition agreement.
  • Much attention is paid to the position and appreciation of the healthcare professional. It is important for medical specialists, nurses and other healthcare employees to have more of a say in the development of healthcare policy. Furthermore, an attractive working environment must be created in which the financial appreciation of employees is improved and lifelong learning is possible. The question is how to finance these wishes.
  • The desire to stimulate innovations and apply them more often is frequently expressed. This concerns more far-reaching digitalisation, such as the transition to hybrid care, the application of eHealth and a secure national system for electronic data exchange. Innovative medicines and aids can also be admitted to the health care package more quickly.

 

Political plans

It is still unclear which parties will actually take their places at the formation table. Yet, based on the programmes of the possible coalition parties VVD (Conservative Liberals), D66 (Liberal Democrats), CDA (Christian Democrats), CU (Social Christian party), PvdA (Labour Party) and/or GroenLinks (Green Party), a cautious prediction can already be made. Do the above wishes correspond to their election programmes?

  • Prevention is found in every election programme, especially when it comes to stimulating a healthy lifestyle. Various parties such as the VVD, D66, CDA, CU and PvdA see a role for health insurers. They can make preventive interventions more attractive by investing or including interventions in the package. VVD and D66 want to remove wrong production incentives in healthcare, taking into account the outcome for the patient. D66, CU, PvdA and GroenLinks support a sugar tax.
  • The possible coalition parties express their appreciation for healthcare employees in their programmes and want to make working in healthcare more attractive by means of more autonomy and opportunities for advancement. Whereas the VVD wants to improve the financial position of healthcare employees by reducing income tax, all other parties want more money for this group on a structural basis.
  • Investment in (digital) innovations is seen by the political parties as a means of supporting healthcare professionals and making healthcare more affordable and efficient. They want to invest in eHealth applications, apps and remote care. D66, CU and GroenLinks aspire to spend 3 per cent of the national income on research and innovations. The VVD, D66 and CDA emphasise the importance of innovative ecosystems and the development of key technologies. The VVD and CU also mention the importance of reliable and safe digital data exchange.

The major challenges in healthcare demand an active attitude from politicians and the healthcare field. It is therefore questionable whether a outline coalition agreement will benefit healthcare. There is a danger that a new cabinet will continue to do the poldering for the next four years, while the willingness of (care) parties can be used to arrive at decisive solutions together.

Wondering how your organisation can take advantage of the opportunities and threats of this formation period? Please contact us. We would be happy to think along with you.

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A new European tech tax – why, how, when?

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In a month’s time, on 9 July, the G20 summit will take place in Venice, where among other things the world’s major economies will discuss a global upgrade of tax rules, with one sector in particular in mind: the tech sector.

In the summer of 2020, EU Member States saw that the economies within the European Single Market would be facing a very difficult time. The COVID pandemic significantly reduced earning capacity, making a comprehensive European recovery plan necessary. To generate the financial resources for this, the Member States decided to call on the European Commission to come up with a plan for a ‘digital levy’. Almost a year later, on 14 July, the Commission intends to publish a proposal: a levy on digital services, which will serve to help getting the Europe’s economies back on their feet. This is a big ambition coming from the Council and the Commission, but how realistic is it? What will such a levy look like, which companies and services will be affected, and how does it relate to the ongoing G20/OECD negotiations that should come to a climax in early July?

 

Scan

As for the exact form of the levy, the Commission is keeping its cards close to its chest. Directorate General TAXUD – responsible for direct taxation – is currently working with preparatory consultations and impact studies. The latest plans show that the Commission is exploring three options:

  • an increase in the corporate tax rate for all companies carrying out certain digital activities in the EU;
  • a tax on revenues from certain digital activities in the EU
  • and/or a tax on digital transactions between companies within the EU.

The first option thus focuses on companies themselves, as regards to the the second it is not clear which digital activities are involved, and the last option would come close to a so-called ‘digital services tax’ (‘DST’): a tax on digital services similar to the ones levied at national level in e.g. France, Italy and Spain.

Judging from the many position papers submitted on this subject, the current patchwork of national variants of a DST is criticised by most companies. Besides the administrative burden, national DSTs still pose the threat of trade tensions (e.g. retaliatory import tariffs from the US). European harmonisation of such taxes can replace the patchwork. However, the majority of the business community would prefer the Commission to abandon its own initiative and focus entirely on a global solution. A European levy is seen as an extra tax anyway, and smaller tech companies fear that the big tech players will pass a European digital levy on to them.

A solution at a global level? The plans for this have been under negotiation at the OECD (Organisation for Economic Cooperation and Development) for some time.

 

What will the OECD do?

In a nutshell, the OECD has a plan with two pillars. Pillar 1 consists of new rules on where to pay tax and a fundamentally new way of sharing tax rights between countries. The goal is ‘that digitally-oriented and consumer-focused multinationals pay tax where they operate sustainably and significantly, even if they don’t have a physical presence in a country.’ In other words, even if a tech company does not have a physical presence in a country, it should pay tax in the country where consumers (e.g. app users) are located. The second pillar provides for the introduction of a global minimum tax. The first pillar really addresses the big tech companies: the new method allows governments to also tax the sale/trade of data (e.g. from consumers).

The OECD negotiations have been going on for years, but there is light at the end of the tunnel. Since January, the Biden administration, through Janet Yellen, US treasury, has been hinting time and again that the US is willing to abandon Trump’s hard line on this issue. The price Europe might pay for this is a deal that it not only taxes the Silicon Valley giants but also European ‘champions’ like Volkswagen.

A preliminary agreement was already reached at the G7 in early June. The focus of the first pillar should be on large multinationals with a profit margin of 10 per cent or more. Those companies would have to pay tax on 20 per cent of the profits they make above the 10 per cent threshold in the countries where they generate the income. This proposal would replace the OECD scope that included only “automated digital services” and “consumer facing businesses” as mentioned above. The thresholds for determining businesses that are the largest and most profitable are not clear yet. The second pillar is the 15 per cent corporate tax rate.

The G20 summit in July must agree to the plans. Countries such as India and China must also agree to the plans. The European Commission said in January that its initiative should not interfere with the G20/OECD negotiations. Benjamin Angel, director of direct taxation at DG TAXUD, stressed that the Commission’s proposal has a “different narrative” from the OECD negotiations, and the Commission maintains that a tax can be designed to be compatible with any outcome of the OECD negotiations.

So a European tax would have to run parallel to the OECD outcome, and see what happens if it is up to the Commission. The Berlaymont sees a window of opportunity….

 

Momentum

The European Parliament is also feeling momentum. An earlier Commission proposal in 2018 was shot down by member states in the Council, to the dismay of an increasingly ambitious Parliament. The need for economic recovery, as well as an increasingly vocal call to crack down on tax havens, gives the Parliament the necessary leeway to push its agenda. The Parliamentary Committee on Fiscal Affairs (FISC), established in 2020 and led by MEP Paul Tang (PvdA/S&D), also took a position on a possible digital tax last April. Rapporteurs Andreas Schwab (CDU/EPP, and also rapporteur for the Digital Markets Act) and Martin Hlavácek (Czech Republic/Renew) wrote in this position that if there is no G20/OECD agreement’, the EU should indeed take the initiative itself. MEP Tang went even further by stating that ‘if not a European digital tax, it should be a variety of national digital taxes. This is the way to put pressure on the international negotiation”.

The theme is also gaining attention in The Hague. Before the general election, the House of Representatives adopted the motion by MP Paternotte, which called on the government to work on a digital services tax at the European level. The election programmes of GroenLinks and PvdA even expressed the wish to introduce a national DST for the Netherlands. For the time being, there is no majority for this.

 

Consequences

The characteristics and preconditions of a digital tax are institutional food for thought for EU junkies: the competence for taxation lies entirely with the Member States themselves – not in Brussels. Any proposal on taxation would therefore requir a unanimous vote in the Council, and it is still unclear whether countries such as Ireland and Luxembourg – which is home to many tech giants with tax breaks – will agree.

The consequences of any European levy will have a significant impact on companies in the tech sector, which are, almost without exception, international players. Regardless of the outcome of the G20, policymakers in Brussels, The Hague and other European capitals will be gearing up for tough political and technical negotiations, and it will become increasingly important for many companies to make themselves heard.

Public Matters advises companies and other organisations that are active in the tech sector, or which are indirectly / directly impacted by a digital tax. Please visit this page for more information.

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Talking about lobbying means talking about more than just regulation

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After a long time, the discussion on lobbying regulations is back on the agenda. The reason for this is the publication and presentation of the OECD report Lobbying in the 21st century (20 May), which was also covered by de Volkskrant in the Netherlands (21 May). That is good news. Unfortunately, the discussion is once again conducted along the lines of ingrained stereotypes.

One such stereotype is embedded in the way the alleged influence of lobbyists is viewed. Angel Gurria, Secretary-General of the OECD, did the same by stating that this influence is “still underestimated”. Without further substantiating very concretely why this is the case. Another stereotype is that only companies and consultants do the lobbying. While NGOs also lobby intensively and professionally. And the number of government lobbyists has increased enormously in recent years.

This discussion should not be based on these stereotypes, but rather on the way in which lobbyists aim to improve policymaking in an appropriate and transparent way. This should also include how the recipients of lobbying – including politicians and civil servants – deal with this themselves and have their own responsibility. As well as how the media report on this. Unfortunately, the discussion about the regulation of lobbying is not sufficiently focused on this.

This is also reflected in the OECD report mentioned above. It compares lobbying laws and regulations in 41 countries. The result is a report full of ‘apples and oranges’. These incomparable quantities stem from the lack of an unambiguous description or definition of what lobbying is. And if you don’t know what you are investigating, you get impure comparisons. Take for example the “lobby register” in the Dutch parliament. If you look closely at the criteria of registration, the way you get in the ‘register’ and the list itself, it becomes clear that this is not a register. It is more like a “database of external Chamber pass holders”. Totally incomparable with a register in Brussels or Washington DC.

Nevertheless, the report also offers useful suggestions that we in the Netherlands should keep in mind. For example, in the area of rules for revolving door politicians. In the Netherlands, a rule (now expired) was once promulgated in which a cooling-off period was stipulated. But there is no sanction for violation. And there are no rules at all for MPs. Not if they become lobbyists themselves or if they have rules for the access privilege that they have as former members. Let alone that we have an organisation in the Netherlands that supervises all this.

Typical in this context is the response in the OECD report to the question of whether tightening lobbying regulations affects the transparency and integrity of public administration. It is precisely the lobbyists who see an improvement with stricter regulations, while about 50% of the politicians surveyed do not.

In short: it is time that we in the Netherlands have a discussion and come up with rules, self-regulation or legislation. These should certainly apply to lobbyists working for companies, governments, NGOs, as consultants and other organisations. Unambiguous rules should also be introduced for (former) politicians, civil servants and journalists. And with that, I hope that this topic will stay on the agenda a bit longer and we can have a fundamental discussion about it. For example, by talking about the value of lobbying for the quality of policymaking, by talking about rules that are understandable, workable and enforceable, and by clearly delineating what it is not about. It is high time to make progress and to arrive at such a discussion without immediately shooting in the instrumental solutions. It is better to have this discussion now than to wait for an incident that will stir up this discussion, with all the consequences this will have for the transparent democracy in which we all want to continue to represent our interests.