Commissioner Věra Jourová: EU law needs to keep up with digital development
The European Union needs to keep up in terms of digital development, and its approach to corporate law needs to be updated accordingly, EU Commissioner Věra Jourová said on Monday. Jourová is attending the Justice Ministry's conference on the subject in Tallinn on Sept. 4 and 5.
Speaking at a conference arranged by the Estonian Ministry of Justice on corporate law and governance, EU commissioner Věra Jourová stressed the significance of digital integration and harmonization for the competitiveness of the European economy.
The speed of economic development across the globe is defined by the developments in the digital sector, Jourová told ERR News in an interview on Monday. The EU needs to keep up, and its best way to do this is by facilitating business and getting rid of as many borders and obstacles as possible.
Jourová pointed out in her speech at the conference that some of the EU's corporate legislation dated back to the 1960s, and was outdated. New legislation was needed for the digitization of elementary processes, such as establishing a business online.
While a specific proposal for a new form of European company failed — a single-member corporation with just one shareholder — a new package as discussed at the conference covers the existing legal forms of companies, including e.g. the private limited corporation.
ERR News: You mentioned in your opening remarks that the belief in tangible things, such as things written down on paper, is slowing the economy down. Compared globally, where does the EU stand?
Věra Jourová: We need to match the speed of the world's development, and the way [to do this] is by being better at all things digital. That's why we are preparing the package for corporate law and its digitization, because we need to be better in the global competition in many spheres.
One of the problems of Europe is that we don't have a Google or Facebook of our own. Our economy is dispersed and fragmented; 99 percent of our companies are small and medium-size. That's why we need to create better conditions for the small and medium-size businesses, to be able to compete with the giants.
You made a reference to employees' rights as well. Another aspect is that there are always plenty of other legal systems, interest groups, and other areas that are affected in the EU.
There are the notaries, for instance. They're very nervous about corporate law going digital. They say that the potential for abuse is great, because if a company isn't registered on paper and they don't see the person registering it, then the possibility is just too great.
My point — and I will fight for this — is that we should look at those who want to register companies as honest people, and in case of doubt let's invite them and check them and ask them what the purpose is of registering the company. We can always do that.
Former President of Estonia Toomas Hendrik Ilves has said on many occasions that switching to digital systems and the enforced transparency they bring has done a lot for business in Estonia, reduced corruption and made it more effective. Are you hoping for a similar result at the EU level?
I fully agree, because it is reducing corruption and increasing trust, and that's exactly what's done in Estonia, and what I would like to see in other member states as well. And one of the ways to do this, the tangible ways, is access to BRIS [the EU's Business Registers Interconnection System; ed.]. We can use technologies better to be more transparent.
Some of the main points of this conference include establishing a company online, making business information available online, and improving companies' mobility across borders. How many EU members already have systems for this in place?
I think only 17 member states have online registration. We want everyone to have it, and this was already [part of] the Proposal for a Directive on single-member private limited liability companies, a piece of legislation that I inherited from my predecessor. And it didn't work! I was never able to promote this to be adopted, because there were always those voices who said that this online registration could be abused.
In this proposal, there was online registration plus registering the company for one euro. I liked this proposal, because I myself started a business at a very difficult time in my life. I invested all my money and even had to borrow money just to establish the company. And the state didn't make it easy.
I think it's a very pragmatic thing, enabling the people to [go into business]. It's in the interest of the European economy and societies, and especially in [the digital field], we rely so much on start-ups, new brains, new creativity. You asked about global competition: this is the only instrument we have to foster it.
The single-member company didn't fly, and I'll try to do it now.
You've mentioned that the attitude towards digital solutions is an issue. You have at least 27 governments and parliaments to reckon with trying to implement these changes. What are the major obstacles there?
To remove the borders. The borders in people's thinking. Digital itself is a roof, under which we have 28 separate rooms and in each of those rooms there are different rules. That's strange; we need to open the doors between those rooms.
We see a lot of positive things, but sometimes also negative things. [There's also the aspect] of criminal justice. You know the criminals use this roof for anything you can imagine, but law enforcement bodies are reacting from those small rooms; they can't cross the borders. The same in consumer protection.
Whatever we do in the digital sphere and with new legislation, we want to remove the barriers while keeping the local specificities, because the member states insist on them. It's a Rubik's Cube, really.
Estonia often boasts how its paperless economy is saving it 2 percent of its gross domestic product per year. Do you expect a similarly beneficial effect on the EU's economy?
Yes. I would also like to see EU funds invested better in member states — in every member state there is some amount [of money] from the EU spent on creating the data highway and the roads between offices and for the creation [of a system] of once-only data provision, not to be annoyed again and again [by authorities asking for personal details].
Europe has invested billions of euros in this. And we can see how it works in Estonia, where less money achieved more. And I would like member states to follow the Estonian way. Already in July I asked [Minister of Justice Urmas Reinsalu (IRL)] to give a presentation to the other ministers on how the e-justice portal in Estonia works, how the prosecutor's office works, and so on.
The ministers were astonished, and they will want to follow the example. Member states are more or less advanced here. But there is work to do everywhere to get to the Estonian level.
As a person who doesn't like technology, I'm always nervous coming here [laughs] and that it will show that I'm not fit for the 21st century. But I'm always positively surprised that these technologies help people to have a high-quality life here.
Věra Jourová (*1964) is a Czech politician and former minister and the European Union's Commissioner for Justice, Consumers and Gender Equality. Jourová is attending the Estonian EU presidency's conference on corporate law taking place in Tallinn on Sept. 4 and 5.
Editor: Aili Vahtla