Two EU agencies are about to find themselves without a home. Eoin O'Shea explains the process for location selection for EU agencies and the benefits for the winning member state.
One of the positive fall outs from Brexit for two lucky remaining EU countries will be the fact that two EU Agencies currently based in London, the European Medicines Agency and the European Banking Authority, will be on the move.
The decision as to the new location for the agencies will be decided by way of a secret ballot of ministers from the member states, each of whom will have an equal voting say. The decision will be made in November.
The 44 EU Agencies are to the EU what quangos are to member states. They are established by law to do a defined job. The European Medicines Agency, for example, allows drug companies to apply centrally for a marketing license for new drugs in the EU rather than having to apply separately to each EU country. The European Banking Authority makes binding technical standards, working towards the creation of a single rule book for financial services activities in the EU. If EU agencies did not exist, their functions would have to be replicated on a national level in each of the EU member states. The existence of the agencies saves money at a national level. Post-Brexit, the UK will need to establish a number of bodies to replicate the work these EU agencies do.
The decision on where to place the agencies has had an interesting history. For example, the first two EU agencies, EUROFOUND (which researches quality of life issues) and CEDEFOP (European Centre for the Development of Vocational Training), were established in the 1970s, in Dublin and Berlin respectively. CEDEFOP is now in Greece, reportedly having been ‘swapped’ by Germany in return for Greece’s vote for the siting of the European Central Bank in Frankfurt. In 2004, when a number of new agencies were being created, a last minute decision of the EU heads of state meant that the European Food Safety Authority’s site was moved at the stroke of a pen from Helsinki, Finland to Parma, Italy, arising from an intervention at the meeting by Italian Prime Minister Berlusconi. He explained that Finland didn’t have a sufficient connection with food and that Italy was a better location. The political decision was made that Finland would get the ‘next’ big EU agency, which turned out to be the European Chemicals Agency.
This time around, there is a defined process for the selection of the locations for the Medicines Agency and the Banking Authority. Member states interesting in hosting the agencies have to submit a detailed bid by 31 July. The bids will be assessed by the European Commission according to a number of criteria, including business continuity, adequate air links to other EU capitals, schools for children of agency employees, and employment opportunities for spouses/partners of agency employees. The bids have to include an actual proposed location for the agency, and explain what financial benefits, e.g. free rent, are being offered by the member state for employees. Following the EU Commission’s assessment of the bids, countries will have the opportunity to make a presentation to their fellow member states.
Each of the agencies would be a big prize for a member state and Ireland has made strong bids for both agencies. The Medicines Agency employs 890 people, carries a budget of €300 million, uses 27,000 square metres of office space and generates a requirement for 30,000 annual hotel bed nights a year. The equivalent numbers for the Banking Authority are 189 employees, a €36 million budget, 2,345 square metres of space and 9,000 hotel stays. There is anecdotal evidence that the presence of the European Medicines Agency attracts additional foreign direct investment in the pharma sphere.
The end game will be a secret ballot voting process among member states in November. Each member state will have the same number of votes. According my sources, there is no clear front runners yet and it’s all to play for.
Come on, you boys in green.
Eoin O’Shea FCA is a practising barrister, specialising in commercial and tax law. He is a former member of the European Court of Auditors and was responsible for the audits of EU agencies.