Ministers poked holes in the proposal for EU Inc – an EU-wide business entity – during a Council meeting in Brussels on Thursday.
Commission raised EU Inc project in March, arguing that it would make life easier for European startups. Ursula von der Leyen has consistently positioned the project as a central element of the EU’s efforts to speed up its sluggish economy.
But as MEPs and capitals began to dig into the details, some key points stood out even though the core idea of the proposal is widely popular.
Ministers pointed to issues that had already emerged as points of friction in previous talks between technical experts: feared effects on workers’ rights, possibly insufficient controls to prevent criminals from abusing the new corporate entity and reworked bankruptcy provisions.
Concerned workers
The question of how exactly BE Inc will affect the rights of employeeswhich vary widely across EU countries, have moved to the center of early talks about the project.
While the Commission insists, correctly, that the proposal does not determine the labor law, it determines which country’s law should be applied.
unions fear The precise details could lead to such rights being circumvented, a fear shared by some ministers.
“There are ways to circumvent these provisions that are mandatory in many member states and that is not acceptable,” Anna Sporrer, the Austrian justice minister, said on Thursday. She mentioned that Vienna was working on a “solution” together with other capitals.
Ministers from Berlin and Ljubljana expressed similar concerns.
Not too soon
The commission established the new company entity with two clear title numbers.
Founders should be able to create EU Inc’s within 48 hours and for less than €100. But these eye-popping figures have also raised eyebrows in some capitals, sparking fears they could pave the way for fraud and money laundering.
“We believe that there is a risk of fraud and that we should go for a short deadline of 15 days that can be extended if there is a need for further investigations,” the French representative said at Thursday’s meeting.
Some people were critical of planned provisions for an accelerated bankruptcy procedure for innovative companies, with Romania registering “serious reservations”.
National experts had previously viewed these critically because they seemed close to rules the Commission had proposed in a separate earlier bankruptcy proposal, which the capitals then scrapped.
Thursday’s meeting could signal experts to do the same again this time, although Michael McGrath, the EU’s justice commissioner, tried to defend his position by arguing that the proposed rules were, in fact, different from those previously proposed.
Is everything sound?
At the heart of the debate are the fundamental questions of whether the Council will do so I accept the legal path of the Commission for the proposal of BE Inc, which GRANTS for establishing a regulation without agreement from all the capitals.
While McGrath reiterated twice that the Commission’s legal experts considered this route appropriate, some capitals still did not seem to consider the matter settled.
Written input from the Council’s own legal experts on the matter would be “indispensable”, said Austria’s Sporrer, who argued for a fundamental rewrite.
Finland and the Czech Republic also insisted on a “sound” legal basis.
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