The European foundation sector has attacked the decision to drop the European Foundation Statute (EFS) from the European Commission’s 2015 Work Programme.

The EFS proposal, which establishes a constitution for a pan-European foundation (FE) operating across borders to support general interest causes, is one of 80 proposals that have been withdrawn from the Commission’s legislative agenda, published in mid-December.

The withdrawal is permanent unless the Commission wishes to reopen the file.

It can publish a new proposal or review the matter if it believes the political context has turned in a more favourable direction.

Gerry Salole, chief executive of the European Foundation Centre (EFC), which represents 200 foundations across Europe and has advocated an EFS for several years, warned that foundations would continue to hold the Commission to account in finding solutions to serving the public interest across borders.

He said: “This decision sends a signal that goes completely against the concept of building a citizen-led Europe. If EU institutions together cannot uphold a Regulation that facilitates public interest work by and for the citizens, they will have to find other avenues, with the sector, to address the issue.”

If enacted, the EFS would remove the requirement for foundations operating in different jurisdictions to set up separate legal entities in each country, if they chose to do so instead via an FE.

There would be a single set of rules for FEs, helping to reduce the costs and uncertainty involved in cross-border activities.

However, the EFS would not replace existing national laws, but would be optional and complementary.

In a statement, the EFC said: “The majority of member states are supportive of the policy objectives of the EFS initiative, even though member states could not see eye-to-eye on the EFS proposal itself.

“The EFC believes the decision has more to do with the mechanics of policy negotiations (unanimity requirement) than with the policy proposal itself – its actual objectives and value.”

Eight member states reportedly rejected the proposal tabled by the Italian EU presidency in November: Austria, Denmark, Estonia, Germany, the Netherlands, Portugal, Slovakia and the UK. 

Some of these wished to see further changes in the EFS text, and three of the 28 member states said they doubted the value of an EFS per se.

The EFC said: “Given the somewhat secretive character of the negotiations, it is difficult to assess which aspects of the text specific countries wished to alter, and which concrete proposals they put forward to do so.

“Such questions should be addressed by way of negotiations, finding a compromise between the parties to achieve a common objective – i.e. facilitating cross-border philanthropic work in the public interest in Europe.”

The EFC outlined several options to move forward.

It highlighted the meeting of the European Parliament Legal Affairs Committee on 1 December, which discussed the EFS, the first time the newly-elected European Parliament (EP) had addressed the matter.

The EFC said: “Overall, EP representatives from the various political groups who took the floor supported the EFS initiative, and wished to ensure its adoption.  

“While some MEPs questioned the ‘secrecy’ of the negotiations at the Council and asked for clarification regarding the reasons put forward by a minority of member states to reject the proposal, they also believed there is still room for discussion.”

The EFC said the enhanced cooperation procedure – where nine member states can choose to agree a piece of legislation between them – had also been suggested as another possible legal avenue.

It said: “The EP has a consultative role in this specific field but cannot ‘co-decide’ with the Council.

“However, it can give its opinion, and had already done so in 2013 in favour of the initiative.”

Meanwhile, once the EP has voted on the Commission’s new work programme in January, the EFC will – along with the Commission – assess whether other legislative options are possible technically and politically at the EU level. 

If not, the EFC said it would have to review national regimes and their cross-border-friendly (or unfriendly) character, pushing for changes where needed.

Alongside this, the EFC will continue working to facilitate tax-effective cross-border giving, monitoring the implementation of the European Court of Justice rulings on non-discrimination.

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