The Week in Europe 03/02-09/02/01

13.02.2001 | Euroskop

EU news in brief

Prodi unveils economic agenda for Stockholm summit

Ten strategic priorities could help secure jobs and economic prosperity for the next generation, the Commission suggested on 7 February. Its report proposes the Stockholm European Council on 23-24 March should endorse these areas to follow up the Lisbon summit held a year earlier. That meeting set the aim of working towards full employment by making Europe the most competitive and dynamic knowledge-based economy in the world. The ten priorities include tackling unemployment and social exclusion, labour skills and mobility, economic and financial market reforms, developing the Information Society and promoting better-coordinated research. Commission President Romano Prodi said Europe must not hide behind the positive economic outlook it was enjoying, but use it to make the continent an economic and social model for the world. Important progress has been made since Lisbon in areas such as telecom liberalisation and e-commerce. But delays in public procurement and wider competition in the gas, electricity and postal markets, for example, have proved disappointing. The full Communication is at http://europa.eu.int/comm/stockholm_council/ [Background text: IP/01/170]

· The Commission has proposed ways of strengthening the coordination of economic policy in the euro zone. They involve more robust assessment work and the flagging-up of relevant policy measures.

[Background text: IP/01/169]

BSE safeguards tightened

Three further measures to tighten EU-wide action against mad cow disease (BSE) were agreed by the Commission on 7 February. The first requires the vertebral column to be removed from all cattle over 12 months old. The second will impose on tallow intended for human consumption or used in animal feeds the same heat treatment that is needed for meat and bonemeal. The third authorises the use of some proteins from fish and feathers in animal feed. In addition, a ban on mechanically recovered meat will be extended to all ruminant bones. [Background text: IP/01/174]

E-mail spam priced at 10bn euro

Junk e-mail costs Internet users 10bn euro a year just in connection costs, according to a study released by the Commission on 2 February. This review of 'spam' forms part of continuing efforts to ensure that unsolicited e-mail and the development of e-commerce do not undermine individuals' rights to privacy and data protection. Some countries operate 'opt-out' schemes (eg tick a box if you do not wish to receive unsolicited material), but the study advocates an 'opt-in' approach. This is favoured by industry as it has proved to be more effective; it also tends to boost the confidence of consumers. Commissioner Frits Bolkestein said consumer data from transactions on the web could be sold for large sums, but many people were unaware of its scale and implications. The Commission aims to encourage the development of Internet services without weakening the right to privacy. See

http://europa.eu.int/comm/internal_market/en/media/dataprot/news/index.htm.

[Background text: IP/01/154]

Cod protection rules adopted

Emergency measures to protect spawning cod in the North Sea were adopted by the Commission on 7 February. A Regulation bans fisheries likely to catch cod from a specified area until 30 April, to allow the maximum number of fish to survive and reproduce successfully. Fishing for sandeels and pelagic species will be allowed to continue in this area, subject to technical controls to ensure cod are not endangered. Observers will check catches on board and at ports. The restrictions have been introduced after the Council asked for emergency conservation measures to tackle a severe danger of cod stocks collapsing. The Commission is planning to introduce further technical measures by 1 May to increase the selectivity of fishing gear. A longer-term recovery plan will be put forward in June. [Background text: IP/01/177]

400m euro claw-back on farm aid

The Commission plans to recover 400m euro in agricultural payments made without adequate financial checks or controls. This includes 331m euro spent in Spain, 24m euro in France, 22m euro in Germany, and 18m euro in Italy. The Member States are responsible for virtually all payments made under the common agricultural policy. The EU's clearance of accounts system, under which this latest decision was made on 6 February, requires the Commission to check that the funds are used correctly. Money can be recovered if it has been paid out with insufficient guarantees of legitimacy or where control systems are found to be unreliable. [Background text: IP/01/165]

Closer relations with Iran?

A Communication outlining the scope for closer links with Iran was published on 7 February. It makes the case for developing relations with Iran to support and reinforce the reform process there, explained Commissioner Chris Patten. Such moves would need to proceed gradually and be subjected to continued monitoring of political, economic and social reform, he added. There is also scope for a Trade and Cooperation Agreement, the Commission says, as an appropriate framework for closer ties. Work could concentrate on bilateral contacts in areas of mutual concern (such as drugs and refugees), a readiness to engage in dialogue on the rule of law and human rights, and discussions on foreign and security questions, energy, trade and investment. Member States' relations with Iran have improved in recent years, but the lack of a contractual framework limits the development of cooperation. http://europa.eu.int/comm/external_relations/iran/intro/index.htm.

[Background text: IP/01/176]

Sustainability ten years after Rio

The Commission has set out four strategic aims for sustainable development, as part of preparations for an international summit next year. Drawing on an assessment of progress since the 1992 Rio 'Earth Summit', a Communication proposes the following objectives: greater global equity; better integration of environment and development at international level; targets to revitalise the Rio process; and more effective action nationally, with stronger international monitoring. It also suggests four substantive areas for the World Summit on Sustainable Development to address: protection of the natural resource base; integration of environmental protection and poverty eradication; sustainable globalisation; and enhancing global governance and participation. Commissioner Margot Wallström said the expectations from the Rio summit had not been met, and it was important for the EU to take a lead in preparing the agenda for the meeting in South Africa, ten years on. A more detailed assessment of the implementation of Agenda 21 in the EU will be followed by consultation with stakeholders. A steering group will be set up to help civil society involvement at EU level. http://europa.eu.int/comm/environment/agend21/index.htm. [Background text: IP/01/167]

EU sets out WTO position

The EU's agenda for international agricultural trade talks were presented to the World Trade Organisation in Geneva on 5 February. The paper constitutes well-timed and constructive input, said Commissioner Franz Fischler, and deals with all the areas of the agricultural negotiations that began last March. It covers market access and tariffs, export competition, reform of domestic support, non-trade concerns, and trade preferences for developing countries (particularly the poorest). The position paper can be found at http://europa.eu.int/comm/agriculture/external/wto/officdoc/index_en.htm .

[Background text: MEMO/01/28]

Consultation on bank capital

Comments on proposed EU bank capital rules are invited from interested parties by the end of May 2001. The revised legislation - on the amount of capital banks must have to cover their risks - will reflect changes to the international framework put forward by the Basel Committee (of the Bank for International Settlements). The consultation focuses on issues where particular EU concerns need to be taken into account. The overall objectives are to ensure European banks and investment companies can respond quickly to market change and operate flexibly, as well as to pay due regard to the financing needs of small businesses. Commissioner Frits Bolkestein said the highest standards of prudential regulation of capital adequacy were essential for both financial stability and the smooth functioning of the internal market in financial services. The paper is at

http://europa.eu.int/comm/internal_market. [Background text: IP/01/160]

Commissioner Chris Patten visits Belgrade on 8 February, as part of an EU ministerial Troika. They will discuss reforms and support for Serbia. [Background text: IP/01/172]

Enlargement news

Persson Takes the Lead on Enlargement

Swedish Prime Minister Göran Persson - and current President of the European Council has invited the prime ministers of EU candidate countries to meet him individually in Stockholm to discuss enlargement. The Prime Minister of the Czech Republic, Milos Zeman, went on February 6. He was followed by Jerzy Buzek of Poland on February 7 and by Dzurinda of Slovakia on February 12.

Meanwhile, Persson commented in Brussels on February 1: "Let us be honest to ourselves and to our partners in the candidate countries: The negotiations will be difficult. No doubt about that. But I am convinced that all parties will make the efforts necessary to reach agreement." He strongly defended adherence to the principle of differentiation: "Each country has to be judged on its own merits. To say anything else is to undermine the credibility of the process itself. It would slow the adjustment efforts in the candidate countries".

And he held out the prospect of defining dates but subject to conditions. "The moment for setting a target date for the conclusions of negotiations with the most advanced is approaching. It should be set when real progress has been achieved and the end of negotiations is more or less in sight." He also rejected any suggestions that the EU was still not prepared for enlargement. "The general framework for enlargement is in place. The financial framework for enlargement was decided in Berlin in the spring of 1999. Then, in Nice last December, we agreed on the necessary institutional for enlargement. That was the task from the very outset. The objective was not to make a major overhaul of the whole architecture. Hence, I cannot share the criticisms of the results in Nice. What was achieved under the French Presidency was clearly in line with this general objective", he insisted.

Cohesion Report focuses on Enlargement

Enlargement features prominently in the European Commission's just-adopted report on economic and social cohesion. The report is likely to open wide the debate on the future of EU regional policy, since, for the first time, the Commission looks ahead to the time when the EU has expanded to 27 members. The report makes clear that major changes are in store for regional policy, and that most of them will stem from enlargement.

With the enlargement of the EU, the economic landscape is set to change significantly. The report points to a doubling of the income gaps between countries and regions: at national level, over one-third of the population would live in countries with an income per head less than 90% of the Community average, against one-sixth at present; and at regional level, the average income per head for the bottom 10% of the population, living in the least prosperous regions in an EU of 27 countries, would be only 31% of the average, against 61% at present.

The real change compared to the EU of today would be the existence of a third group comprising most of the current candidate countries (other than Cyprus, Malta, Slovenia and the Czech Republic, where income per head is around 40% of the Community average). These eight countries account for around 16% of the population of a 27-nation EU, and the prospect of their accession raises questions about resources and allocations. The 0.45% of EU GDP, which is set as the level of financial support that will be available in 2006, is proposed as a benchmark. The report treads very carefully in this respect (this amount should "not necessarily be regarded as a reference point", it stresses).

Targeting of assistance will be a challenge, the report suggests. The economic and social outlook in an expanded EU will require a "massive refocusing of the effort" to achieve a significant catching up within a reasonable period. Questions will have to be answered about how the threshold for eligibility should be set in light of the fact that enlargement will automatically mean a substantial reduction of the average level of per capita GDP in the EU. The full report can be found at: http://www.inforegio.cec.eu.int/wbdoc/docoffic/official/report2/contentpdf_fr.htm

"We have worked hard to ensure enlargement remains at the forefront of the EU's priorities", said UK minister for Europe Keith Vaz, speaking at the Polish embassy in London at the end of January. "Our efforts to ensure Poland and the other central European candidates retake their rightful place at the centre of Europe are clearly bearing fruit", he said. But he also insisted that the UK determination was not uniquely altruistic: "Enlargement is not a favour we are doing for Poland's sake. It has very real benefits both for existing EU members as well as for the candidates", he said.