Subsidiarity test of the Commission's proposal for a regulation on the 28th order's corporate framework "EU Inc.

Rashid Farivar (SD)

Madam Speaker! We are debating the Committee on Civil Affairs' report on the subsidiarity test of the Commission's proposal for a regulation on the 28th order's corporate framework, which the Commission has chosen to call EU Inc.

I would like to emphasize initially that the purpose of this debate is not to make a complete assessment of the content of the regulation itself. The issue today is different, namely whether the proposal should be handled at the national level or at the EU level. This is what the subsidiarity principle is about.

We in the Sweden Democrats support the committee's assessment that the proposal does not conflict with the subsidiarity principle. Therefore, I move for the rejection of the reservation as well as the special opinion submitted by the Social Democrats, the Left Party, and the Green Party.

Madam Speaker! The Sweden Democrats have in many contexts been critical of a development where more and more power is shifted from the member states to Brussels. We believe that decisions should be made as close to the citizens as possible and that the EU should focus on issues where cooperation at a European level actually adds value.

We also have significant objections to several parts of the current proposal. The Government points out, for example, risks linked to the misuse of the new corporate form, doubts regarding the proposed insolvency rules, and the harmonization of the taxation of employee options that is proposed. These are issues that will need to be scrutinized very carefully during the continued negotiations. These objections are, however, primarily objections to the content of the proposal, not to its compatibility with the subsidiarity principle.

The Commission's starting point is that companies wishing to operate across national borders today face a fragmented regulatory framework with 27 different national systems and a large number of different corporate forms. The purpose of the proposal is to create a voluntary corporate form that can be used in the internal market and be recognized in all Member States.

Just the cross-border dimension is central. The question is fundamentally about the functioning of the internal market. It is difficult to see how individual member states could, on their own, create a common European regulatory framework that is automatically recognized throughout the union. If the goal is to create such a common corporate form, coordination at the EU level is required, and this is also the conclusion that the majority of the committee reaches.

Madam Speaker! In their special statement, the Social Democrats, the Left Party, and the Green Party argue that the proposal goes further than is necessary and that several parts lack sufficient connection to the functioning of the internal market.

I understand that these parts raise questions. The Government also expresses doubts regarding some of them. The subsidiarity test, however, is not about whether each individual article is perfectly designed or whether the Riksdag should ultimately support the regulation in its entirety. The question is whether the objectives of the proposal can be better achieved at the Union level than by the member states individually.

When it comes to the creation of a common corporate form for cross-border entrepreneurship, the answer is, in our assessment, yes to this. We therefore share the committee's conclusion that the proposal does not contravene the subsidiarity principle.

It does not mean that Sweden should accept every part of the regulation uncritically. On the contrary, if there are reasons to monitor the substantive issues, the government shall do so during the continued negotiations. But that is a different discussion than the one we are having today.

Madam Speaker! Against this background, I move for approval of the committee's proposal for a decision and rejection of the reservation and the special opinion.

Madam Speaker! My speech is essentially concluded, but since I have a few minutes left, I would like to take the opportunity to share some personal reflections.

Just over half a year ago, I announced publicly that I will not stand for re-election to any political positions after this parliamentary term. When the parliamentary term ends, I will therefore leave politics to devote more time to my family and return to a life outside the political arena. It also means that this speech will be my last from this beautiful rostrum.

Sweden is the land of opportunity. It is a fantastic country for those who want to develop and succeed and are prepared to make an effort. That is how I have viewed Sweden ever since I came here as an international student in the autumn of 2005.

I am deeply grateful for my more than twenty years in the Kingdom of Sweden, and especially for the time here in the Swedish Riksdag and for the trust I have received to represent the Swedish people – that which the Speaker Andreas Norlén rightly often describes as the finest assignment one can receive in our country.

During my four years in the Riksdag, I have had the privilege of serving the realm and the Swedish people. I have had the opportunity to get to know countless wonderful people, debate important social issues, develop as a human being, and take part in experiences that I will carry with me for the rest of my life. I have also had the joy of becoming a father for the third time during this period, which is naturally among the greatest things that have happened to me.

I would like to extend a warm thank you to the Speaker's Presidium, the Chamber Office, and the entire Riksdag Administration for the work you perform every day in the service of democracy. A special thank you I would like to direct to the Speaker, Andreas Norlén, for his great contributions to Sweden's Riksdag, for democracy, and for our country. His commitment, accessibility, and consideration for the members of the Riksdag have been much appreciated.

I have had the privilege of serving in the Committee on Transport, the Committee on Civil Affairs, and the Committee on Environment and Agriculture. I would like to thank all the colleagues I have had the opportunity to collaborate with, get to know, and debate with during these years. I would also like to extend a warm thank you to the committees' offices. Without your expertise, your professionalism, and your efforts, we members would not be able to perform our work in the way we do.

I also want to thank my party, Sverigedemokraterna, our members and our voters for the trust to represent the party in Sweden's Riksdag and for the opportunity to contribute to influencing Sweden's development.

Last but not least, I want to extend my greatest thanks to my wife Ava and our children Felicia, Filip and Saga. Thank you for your patience, your support and your love during these four years – in success and adversity, in joy and worries! I also want to thank my parents who, despite having been several thousand kilometers away in Iran, have always been there with their support and their encouragement.

I leave this fantastic democratic assembly with confidence. Sweden is strong. Our democracy is strong. And in this chamber, today as in the future, there are wise people who will continue to take responsibility for our country.

I wish you all a very pleasant summer and good luck on election day on September 13!

Thank you, Sweden, for the freedom of speech!

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Markus Kallifatides (S)

Madam Speaker! The EU needs better conditions for innovative companies to grow in Europe. Regulatory simplification can be part of improving the conditions, alongside, for example, education policy, research policy, infrastructure policy, trade policy, capital markets policy and industrial policy.

Simplification must, however, not mean weaker responsibility. A European corporate form must be designed so that serious companies benefit while labor law, collective agreements, employee influence, tax control, and crime fighting are strengthened. The decisive dividing line therefore does not run between entrepreneurship and regulation but between serious simplification and irresponsible deregulation.

The proposal on "EU Inc." can only be acceptable if the new corporate form is not used to shift risk from owners to employees, from companies to taxpayers, or from unscrupulous actors to the common good.

But now we are debating the Riksdag's position on whether the European Commission's proposal for a regulation on a 28th corporate law framework is compatible with the EU treaties. According to the Court of Justice of the European Union, the application of Article 114 of the TFEU requires a legislative act to approximate national legislation instead of leaving the various national laws unchanged. It must truly have the purpose of improving the conditions for the establishment and functioning of the internal market. It must contribute to eliminating obstacles to the exercise of the four basic freedoms and to removing distortions of competition.

The Commission argues that the proposal we are now debating does not exceed what is necessary to achieve the proposal's objectives, the principle of proportionality. It is argued that it is targeted because it addresses the areas that the parties involved, particularly companies and founders, have identified as problematic during the consultation. It is argued that the estimated costs for the proposal are proportionate to the objective and that the proposal is expected to bring great benefit to companies, especially for startups and growth companies.

The committee majority emphasizes that the distribution of competences between the EU and the Member States must, of course, be respected. All-too-extensive harmonization of, for example, tax law or individual Member States' labor market models can therefore not be considered, and it is argued that this is also not the purpose of the proposal.

The committee majority therefore considers that there is a strong value in measures at EU level in this case. It is argued that it is not possible for the member states themselves to achieve the objectives of the measure to a sufficient extent at either central level or at regional and local level. Creating a new EU company form can only be done at EU level.

Madam Speaker! That is, of course, the case. But now the question is, partly whether the proposed solution is desirable, and partly whether it is compatible with the EU treaties and the principles of proportionality and subsidiarity.

Like, the committee majority sees the Social Democrats positively on the initiative to simplify for companies to operate across borders and strengthen the internal market. As the commission emphasizes, the EU must focus on strengthening competitiveness, bridging the innovation gap in relation to other large economies, and increasing productivity to drive economic growth. The core of this endeavor is the companies.

Madam Speaker! We do, however, mean that the proposal is not appropriately designed in some parts and that it goes beyond what is necessary to achieve the objective. This concerns, to begin with, the rules on simplified insolvency proceedings for certain companies. These rules should be deleted or fundamentally reworked.

We further note that with the proposal's current design, it will be possible to bypass national labor market models, the position of collective agreements, trade union rights, employee influence in companies, and the autonomy of labor market partners through the choice of corporate form or country of registration.

One can additionally ask what costs might arise if a new corporate form turns out to be an effective tool for economic crime. Such a regulation is far from desirable and can also not be necessary to achieve the stated goals.

We question whether the proposal fully respects the distribution of powers between the EU and the Member States and whether the legal basis referred to by the Commission is sufficient.

Article 114 of the TFEU deals with the possibility of deciding on measures, as I said earlier, for the approximation of the member states' legal systems in order to establish the internal market and make it function. However, the article expressly does not apply to provisions on taxes and charges or provisions on the rights and interests of employees. Despite this, we can observe that the Commission's proposal involves, among other things, full harmonization in the area of tax law – taxation of employee stock options – and that it will become possible to bypass national labor market models.

We mean that the Swedish Riksdag should present our objections to the Commission's proposal in a reasoned opinion to the Presidents of the European Parliament, the Council, and the Commission.

I vote in favor of the reservation.

(Applause)

The speech at riksdagen.se, in Swedish (opens in a new tab)

Ludvig Ceimertz (M)

Madam Speaker! Europe needs more companies that grow, invest, and create jobs. At its core, this is about people who start companies, develop ideas, take risks, and want to grow, not just in Sweden or some other country in Europe, but in the entire European market.

Madam Speaker! All too often we speak of the internal market as if it were already fully implemented and permanent, but the reality looks different. For many companies, an expansion to other member states still involves new regulatory frameworks, new administrative processes, and significant costs. It is a concrete threshold for growth. That is why this proposal, this initiative, and this direction are important.

A common corporate form has the potential to become a real tool for companies that want to grow across borders. It can increase predictability, reduce administrative burdens, and lower the costs of regulatory compliance. It does not only strengthen individual companies, but it strengthens Europe's competitiveness in a time when competition from the USA and China is increasing rapidly.

It is also important to say that this is in no way about replacing national corporate forms, but rather about creating a voluntary alternative that can function smoothly across the entire internal market in the EU.

Madam Speaker! We must remember that today's debate is not primarily about the proposal on EU Inc. but about whether to proceed with the proposal in the subsidiarity review. The question, therefore, is not whether every detail in the proposal is perfect, but whether the goal can be better achieved at the national level or through common European rules.

The answer is actually clear, I believe: A coherent corporate law framework cannot be achieved by the member states individually. Without common rules, we risk even more different regulatory frameworks in the internal market, where companies face different requirements in each country.

The Government agrees with the Commission's assessment that the proposal does not go beyond what is necessary to achieve the objective. The proposal builds upon already established rules and structures within EU company law and entails a gradual further development of the regulatory frameworks that already exist in the internal market.

It is therefore a proportionate proposal that takes its starting point in existing regulations and which aims to simplify, not place additional administrative burdens on companies. We therefore consider that the proposal is compatible with both the subsidiarity principle and the proportionality principle.

Madam Speaker! This does not mean that all parts are problem-free. In the ongoing negotiations, Sweden needs to monitor certain issues, not least when it comes to insolvency law parts and the legal construction in certain provisions. At the same time, it is important to keep the processes separate. The subsidiarity test is about whether the EU should act, while the negotiations are more about what the regulatory framework should look like.

Madam Speaker! In the reservation, the opposition highlights some concern and apprehension – that which is argued against – regarding whether it would affect labor market models and collective agreements, but we can state that it is clear that this is not the purpose of the proposal.

It is about a corporate law structure for companies that voluntarily choose that form, not about regulating the parties in the labor market or replacing national models.

Madam Speaker! Against this background, I move for approval of the Committee on Civil Affairs' proposal for a decision.

(Applause)

In this speech, Rashid Farivar (SD) agreed.

The deliberation was hereby concluded.

(Decisions were made under § 16.)

The speech at riksdagen.se, in Swedish (opens in a new tab)