01.08.2016 | KPMG Law Insights

New Science Council at EU Commission as of fall

Dear Readers,

“Everything is new in May” – this proverb can be applied almost one-to-one to the draft bill on the Modernization of Public Procurement Law recently published by the Federal Ministry of Economics and Technology.

Another new development is an advance by the EU Commission in the area of EU state aid law: With a total of seven current individual case decisions, the Commission is providing general guidance on the EU state aid exemption of government support measures that have a purely local impact and no intergovernmental significance.

Also important are the innovations in the cooperation of the higher education ministers of the Bologna states: In Yerevan, the government representatives agreed on a new work program that should lead to the strengthening of the quality and relevance of higher education as well as to higher employability of graduates.

Finally, there is also news to report in the field of science: Starting in fall 2015, the EU Commission will be assisted by an advisory team of seven scientists to ensure closer links between science and politics in the future.

We wish you interesting reading! Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer Dr. Anke Empting

Lawyer Attorney

The EU Commission has recently implemented a new system of scientific advice. In the future, an advisory team of seven scientists will ensure that the state of the art in science is taken into account in political decisions. To this end, scientists are to draw on the expertise of national academies such as the Leopoldina in Germany, among others, and commission the necessary research services themselves on controversial issues.

This newly launched science advisory service is intended to reinforce the importance of science and research in the day-to-day work of the EU Commission. The post of Chief Scientific Advisor to the EU Commission, which was created in January 2012, had already been abolished by the newly elected Commission President Jean-Claude Juncker in November 2014. Since then, there has been a lack of institutionalized science advice to the EU Commission – which has repeatedly provoked vociferous criticism from the scientific community. The science body will initially be provided with a budget of six million euros.

The new body is to report to the EU Commissioner for Research, Science and Innovation. Here it is occasionally asked whether this is intended to weaken the weight of science for the practice of the EU Commission through the back door. This is because the former Chief Advisor to the EU Commission had to report directly to the Commission President, and the EU Commissioner for Research, Science and Innovation is considered to have less influence.

In addition, the scientists are not supposed to be EU employees. This is to ensure their independence. However, this raises the question of whether the committee members will have enough time at all for the new activity in addition to their possible other tasks. Also open is whether the panel’s reports will be made public. This was not the case with the former chief advisor and was heavily criticized at the time.


The actual “non-negotiable

It is said that culture is the nucleus of resistance to the TTIP free trade agreement, but the consequences of this agreement for the education system have so far only been mentioned in passing. Recently, the German Rectors’ Conference (HRK) demanded that the European Commission completely exclude the education sector from the agreement. Reason: Education is not a commodity, but part of the public service. Education has long been traded at German universities. Thus, there is the guiding principle of the entrepreneurial university, as also presented by the HRK.

The HRK further argues that education in Europe has always been viewed in an idealistic light and not, as in the U.S. for example, as a private investment in the labor force, which is true in tendency, even if the EU itself has been instrumental in driving the convergence of economics and education in recent years.

The European Commission reportedly wants to exclude the education sector from the negotiations, but not put it on the negative list. Only that would make it “non-negotiable.” The European Parliament will vote in mid-June on a resolution to make the exclusion mandatory. While the commissioners do not have to abide by the vote, since an agreement must be rubber-stamped by Parliament, the resolution does carry weight.

Whether such an agreement will lower thresholds, and if so, by how much, is impossible to assess at this time. The 1995 GATS agreement has already opened up the education sector relatively widely to private providers, and further liberalization seems obvious. Although the number of American higher education institutions in Europe is manageable, Americans have long shown an interest in gaining a stronger foothold on European soil with private educational offerings, especially in the area of continuing education, and more recently with well-marketable online seminars.

As a result, critics see TTIP as the next target in the transformation of education into the education world market, which already turns over some $2 trillion annually. Further returns will be tempting if the state’s dominance can be broken and international education companies can pave the way through relaxed requirements. If you want to take it to the extreme, this could cover Europe with professional and for-profit offerings and award academic degrees at will, which unfortunately would have nothing to do with comprehensive and purpose-free education. Such companies do indeed exist. But the key question of how strongly they would still be bound by government quality standards after the free trade agreement is the subject of extremely controversial debate.

TTIP gives foreign universities a free hand in Europe

State universities will probably remain unaffected by the agreement, but will come under competitive pressure from private providers. The German Rectors’ Conference does not consider this a bad thing in principle, but it is concerned that TTIP, unlike the free trade agreement with Canada (CETA), does not in any way require branches of foreign universities to comply with national rules.

Private universities and the private-public mixed sector are disproportionately more affected by TTIP, thus also private educational offerings of public universities such as MBAs or state subsidies for private universities. Since German universities have received more financial support from business, the line between private and public has become quite blurred.

The state Department of Education insists on state sovereignty in admissions matters. However, it is unclear whether quality standards can be regulated down to the last detail at all. One need only look at the English education system, which has been liberalized to death, and in which education and economic benefit have been linked many times, to remain on guard oneself.

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