Vulcan View: The latest EU developments 7 October – 11 October

Ireland’s infrastructure deficit: Less bureaucracy, more solutions

In an environment where maintaining competitiveness is paramount to economic success, Ireland is suffering from a chronic infrastructure deficit. This is attributed to inadequate investment, short-term planning and a lack of ambition. In July 2024, the National Competitiveness and Productivity Council launched a report on Ireland’s Competitiveness Challenge. The report highlighted that the global competition to attract Foreign Direct Investment is intensifying. The report also specified the key challenges facing Ireland in relation to attracting FDI. These include:

• The limited progress on infrastructure development.
• A skills deficit.
• The increased cost of doing business.
• Increased subsidies being offered to businesses in other countries.

Multinationals have expressed dissatisfaction with Ireland’s slow response in addressing infrastructure needs in housing, energy, water and transport. If the government does not tackle these shortfalls swiftly, it will become increasingly difficult to attract FDI. For example, the Shannon to Dublin water pipeline has been in motion since 2011 but has yet to advance to a planning application. The provision of large amounts of water is crucial to modern biotech manufacturing facilities. Therefore, this must be prioritised to continue Ireland’s success in attracting biopharma to the country. Although Ireland’s corporation tax rate was attractive in the past, it no longer holds the same appeal. Multinationals are now focusing heavily on energy and water infrastructure.

Department of Infrastructure Proposal

In a bid to rectify the infrastructure deficiencies, Taoiseach Simon Harris gave life to the idea of a Department of Infrastructure at the MacGill Summer School in July. The department would be responsible for the delivery of major projects in crucial areas such as energy, water, healthcare and housing. The Taoiseach argued that the establishment of a sole department to deliver Ireland’s ever-growing infrastructural needs would increase efficiency and accelerate the delivery of large-scale projects. On paper, the idea seems like a cure-all opportunity. However, the establishment of a new department will simply increase officialdom and bureaucracy.

In practice, a new departmental approach to infrastructure may complicate matters. Bureaucratic hurdles can impede progress and slow down decision-making rather than increase efficiency. This is an additional burden that Ireland’s already challenged system could do without. Furthermore, the process of organising a new department necessitates a significant time investment when Ireland requires immediate solutions to infrastructural deficits. Rather than the establishment of a Department of Infrastructure, the government should focus on a complete overhaul of the current planning system and develop a fresh infrastructure and delivery strategy.

Planning and Development Bill

On a constructive note, the landmark Planning and Development Bill 2023 was approved by the Houses of the Oireachtas on 9^th October 2024. The bill will update and rationalise the planning system, providing more clarity, consistency and certainty. Subsequently, An Bord Pleanála will undergo a major reorganisation. Urban Development Zones will allow for a plan-led approach to development and improvements will be made to the judicial review process. Darragh O’Brien TD, welcomed the development, stating that the bill is a “pivotal moment for Government … to ensure we have a planning system that is fit for purpose”.

Raffaele Fitto: von der Leyen’s controversial pick for Vice-President

When European Commission President Ursula von der Leyen announced the names of the future Vice-Presidents of the Commission, one nomination sparked concern in Brussels. Italy’s Raffaele Fitto was nominated as Executive Vice-President for Cohesion and Reforms. If confirmed by the European Parliament, Fitto would become the first politician from a far-right party to serve as Vice-President of the European Commission.

A lawyer by education, Fitto began his political career at twenty. Over the years, he has held various roles at all levels of Italian politics, and his trajectory has been marked by shifts between political parties. Initially a member of Italy’s Christian Democrats, he joined Berlusconi’s Forza Italia in 2001, and later aligned with Fratelli d’Italia, led by current Italian Prime Minister Giorgia Meloni. Despite this, Fitto is seen as having a more moderate profile than Meloni.

His future role

Fitto, who served as an MEP and is the current Italian Minister of European Affairs is widely recognized for his expertise in cohesion policies and his leadership in Italy’s implementation of the COVID-19 recovery plan. In his mission letter, von der Leyen tasked Fitto with ensuring the EU maintains its long-term reforms and investments. He would also oversee the implementation of the NextGenerationEU fund, a responsibility aligned with his current role as national minister.

Additionally, Fitto will be responsible for enhancing the competitiveness, resilience, and sustainability of the European agricultural sector—a challenging task following months of protests by farmers across Europe. One of his most ambitious objectives is to design a new cohesion and growth policy, which will require collaboration with national, regional, and local authorities to ensure successful implementation. However, how he will accomplish this remains uncertain, particularly in light of the European Commission’s plans to overhaul the structure of the EU Budget.

His nomination, coupled with his reputation as a more centrist figure compared to his ECR colleagues, should be seen as part of Meloni’s strategy to rebuild relations with Commission President Ursula von der Leyen, especially after the Italian Prime Minister did not support von der Leyen’s re-election. Furthermore, his appointment as Executive Vice-President may be viewed as an effort by von der Leyen to repair the strained relationship between the two leaders.

Conclusion

In conclusion, Raffaele Fitto’s nomination as Executive Vice-President is a significant moment in EU politics, as he would be the first politician from a far-right party to hold such a high-ranking position within the Commission.  Moreover, Fitto’s moderate reputation, extensive experience in Italian and European politics, and expertise in cohesion policies position him as a potentially effective bridge between Italy’s current government and EU leadership. His success will depend on his ability to navigate complex policy challenges, particularly in areas such as agricultural reform and the implementation of new cohesion strategies.

The European Commission proposes New Digital Passports and ID Cards

Currently, EU and non-EU citizens are checked upon crossing the EU’s external borders, with 600 million crossings recorded in 2023 alone. In response, the European Commission has proposed the digitalisation of passport and identity cards for individuals entering or exiting the Schengen area. The objective is to enhance the efficiency of border controls, ensuring a seamless and secure travel experience.

To achieve this, the Commission has put forward a common framework for the use of digital travel credentials and proposed a new ‘EU Digital Travel’ app. Digital travel credentials comprise a digital replica of the data stored on passports and identity cards, mirroring the information contained in the chip of the passport or ID card. This data can be stored on a mobile phone in the new EU Digital Travel application. Passengers can opt to use this completely voluntarily and free of charge.

The EU Digital Travel app will be accessible to all EU and non-EU citizens holding a biometric passport and travelling to or from the Schengen Area. By downloading the app, travellers will be able to create digital travel credentials and submit documents to border authorities in advance, speeding up checks at the border.

Border authorities will undergo comprehensive training on data security and data protection rules prior to accessing any data. If the Council of the EU and the European Parliament agree on the proposals the EU Digital Travel app will be developed.

Benefits from such a scheme include increased security, as it will be harder to use fake documents or pass through Schengen borders undetected. Improved efficiency at borders, smoother and faster border crossings, and reduced administrative burdens for EU citizens.

In conclusion, the European Commission’s proposal to digitalise travel credentials and introduce the EU Digital Travel application marks a significant step towards modernising border management. By streamlining the process for both EU and non-EU travellers, the initiative aims to enhance security, reduce wait times, and create a more efficient and seamless travel experience across the Schengen Area. Once approved, this voluntary, secure, and innovative system will have the potential to improve the efficiency of border controls in the European Union.

Compliments of Vulcan Consulting – a member of the EACCNY