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With 28 EU member states and 4 countries associated with the European Free Trade Association, Europe’s internal market constitutes the world’s largest economy: 7 percent of the world’s population generate a GDP of $18 trillion, a fifth of the world gross product and, counted as a single market, the largest overall GDP. The EU-28 is the world’s largest importer of goods and services. Germany, an economic superpower in its own right, has since its reunification increasingly become the driver of growth in the EU economy, paving the way for Berlin’s political leadership.
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For US companies investing in the EU still is a story of tremendous success. Such economic achievements, however, are often dependent on a company’s understanding of how to shape and navigate the regulatory framework of its market. Hence, investment, acquisition and market entry each require a high level of strategic political planning.
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Unveiling the European perspective
on current issues of transatlantic affairs.

Data Privacy

The standardization of legislation will set at tight framework for all data processing businesses operating in Europe

Data Privacy

Due to the memory of its own history, Germany has always placed an emphasis on data privacy – but the global mass surveillance disclosures have increased the profile of this issue even more. Correspondingly, the negotiations of the General Data Protection Regulation, which is designed to standardize legislation in the EU, are almost exclusively driven by German policy makers within the European Commission, European Parliament and Council of Ministers.

Although the standardization of data protection legislation is at the forefront of the EU’s agenda, the parliament, commission and member states have thus far failed to agree on a proposal. While many of the member states’ representatives in the council of ministers seem to acknowledge the perspective of businesses, a majority in the parliament wants to establish a tight framework for the commercial use of private data. Its current draft implements the principle of ‘prohibition of conditional permission’, prohibiting any company that processes data of European customers to collect, process and use the data of a person if the person has not given informed and explicit consent.

Regardless of whether or not parliament or council succeed, however, the process is an indication of a political tendency, highlighting that data processing corporations operating in Europe will face much stricter legislation, effectively threatening their operations in the long-term.

Energy

Unstable regulatory frameworks between the government-funded transition to renewables and the Ukraine crisis

Energy

As with environment protection, Germany sees itself as pioneer in the area of energy policy. With the “Energiewende” (energy transition) Germany wants to shift its energy production and consumption away from nuclear energy and fossil fuels towards renewable sources of energy (55-60% in 2035, 80% in 2050).

While the sources of energy produced and used are decided upon by the individual EU member states, the EU itself is very active in the area of energy consumption and energy security. A new energy efficiency target of 30% by 2030 has just been announced (complementing the old goal of 20% until 2020). In response to the Ukraine crisis, the EU has published an energy security strategy. In addition to saving energy, the focus is placed on increasing energy production and diversifying supplier countries and transit routes.

Healthcare

Tackling the regulatory firewalls in European healthcare regulation

Healthcare

The healthcare industry faces an immense number of regulatory challenges in the European Union. Lengthy market authorization, individual price negotiations, reimbursement according to expert society’s treatment guidelines – all multiplied by 28 member states.

Finding a way to tackle such regulatory firewalls requires an in-depth understanding of the framework defining modern healthcare policies. On the one hand, cuts in public spending demand politically creative solutions for regulating the industry. On the other hand, patients and the public at large expect high quality, state of the art medical treatment. This quandary opens opportunities for healthcare companies to take part in the debate on how to achieve an innovative, patient-centric and yet affordable healthcare system.

Intellectual Property

The clash of judicial systems with today’s digital realities

Intellectual Property

In contrast to the US, European copyright systems are still oriented towards outdated analogue models and suffer from inflexible standards. While the main policy initiatives for regulating copyright systems take place on the national level, the EU is attempting to resolve the ongoing gridlock surrounding the issue of how to adjust the European copyright systems to the digital age. Recently the EU Commission launched a public consultation, asking stakeholders for their opinion on changing the EU’s copyright framework.

Despite – or because of – a remarkable number of more than 11,000 submissions, politicians struggle to find a starting point in the discussion between internet users appearing to violate copyrights unwittingly and corporations advocating for the traditional legal system. The political system in the EU leading market in Germany has especially suffered from this irreconcilable debate, bringing reform efforts on the EU level to a standstill.

Transportation

The EU’s struggle to overcome the lack of funding for infrastructure financing

Transportation

In times of budget cuts and debt reduction policies, EU members struggle to bridge the funding gap for critical transportation infrastructure. The German government wants to tackle the problem by introducing a toll for passenger cars that targets foreign drivers in particular. The proposal faces heavy criticism both within Germany and in the EU.

This has sparked a general debate about a harmonized, EU-wide approach for overcoming the lack of funding that the new EU Commission has to deal with. The concept of user financing and the further development of public-private partnerships will play a central role in addition to the perpetual battle over budgetary resources. It is, therefore, now the time to enter the discussion and help shaping the financing paradigms for tomorrow’s infrastructure.

Chemicals

Strict regulation and ongoing social disputes demand improved advocacy, networking and dialogue capabilities

Chemicals

The European market for industrial chemical products is characterized by a high degree of regulation on the European level as well as on the national level. However, Europe remains a vital market for chemicals of all kinds.

In order to maintain or enable market access, it is particularly essential to closely monitor and counter activities of all relevant environmental NGOs. Many of these politically influential organizations constantly seek to further restrict existing regulation and hinder innovations, which from their point of view might have negative effects on the environment. To give an example: Due to public pressure, the German government recently announced that there will be no hydraulic fracturing for economic purposes in Germany in the near future.

Finance

European control mechanisms for fiscal stability set tight frameworks for banks and traders

Finance

During times of crisis, the impact of government authorities on financial markets tends to increase. When the worldwide financial crisis evolved into a euro crisis on the continent, the EU responded accordingly: Instead of forcing hard hit countries like Greece to leave the single currency, the German and French governments decided to push for further integration of the EU’s financial market – and, with it, enhanced regulatory supervision.

Enforced control mechanisms and the empowerment of the European Central Bank as guarantor of financial stability provide today’s framework for financial services. In this regard, a discussed financial transaction tax – supported by an increasing number of member states and projected to be implemented in 2016 – should force banks and traders to take over costs of the past crisis.

Enviroment

High priority of environmental protection leads to extensive regulation in the EU

Environment

The European Union, and Germany in particular, sees itself as a driving force in international environmental policy. Almost all environmental sectors are regulated by EU legislation. This very extensive regulation covers areas such as water, air, soil and noise pollution, energy consumption, chemical use and waste management.

The high priority placed on environmental protection is illustrated by the current Environmental Action Plan that calls for a minimum of a 20% share of the total EU budget to be devoted to climate change mitigation and adaptation. Companies from all different kind of industries are affected by these regulations. Due to Germany’s ambition to play a leading role in this policy area, companies should focus not only on Brussels, but also on Berlin in order to shape EU environmental legislation.

Gambling

The re-regulation of the German gambling and betting market provokes the EU’s intervention

Gambling

The European market for gambling, slot machines and sports betting is highly profitable, but also highly regulated in the different EU member states. The German market is currently being re-regulated with legislative initiatives on the federal as well as on the state level. Sports betting companies will have to compete for a very limited number of licenses in order to offer their services in Germany. Gambling and slot machine providers face much stricter restrictions on their business.

While the adoption is currently pending between the responsible ministries, it is very unlikely to withstand the review of the European institutions. Potentially, the EU Commission will intervene and challenge Germany’s legislation with infringement proceedings. This pressure from Brussels opens room for new negotiations in Germany.

In-depth insights into European politics just around the corner.

Contact our Washington office:

IK

Insaf Seemann, Vice President North America iseemann@miller-meier.com
M + 1 202 704 9435
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