The Week in Europe 24/02-02/03/01

09.03.2001 | Euroskop

EU news in brief

Foot-and-mouth ban extended

A ban on UK exports of live animals, meat, milk and related products to other parts of the EU is being extended to 9 March. The decision, taken in response to outbreaks of foot-and-mouth disease in the UK, was backed by the EU's Standing Veterinary Committee (SVC) on 27 February. The situation was also reviewed by the Agriculture Council on 26-27 February. The Commission and other Member States welcomed the measures taken by the UK, and the close cooperation between their services. They said they were ready to help the UK authorities to combat the disease; controlling and eradicating it is an absolute priority. The SVC called for improved disease awareness on the part of all relevant parties. The Commission will continue to monitor the situation closely, working with UK officials. [Background text: IP/01/269]

Personnel reforms unveiled

The Commission put forward its new personnel policy on 28 February. The emphasis is on quality, responsibility and good management, Commissioner Neil Kinnock explained. He said success depended on investing in the Commission's greatest asset - the capable and committed people working for it. The plans would remove artificial career barriers, increase training requirements and opportunities, and strengthen the role of managers in assessing and guiding staff and dealing with underperformance. Decisions about promotion would balance performance and seniority, and staff would be helped to manage their careers more effectively. Previous commitments on pay and pensions would be honoured, allowances streamlined and the pay system modernised. Independent analysis showed the proposals were comparable to other international organisations that employed mainly expatriate staff, Kinnock said. The plans will now go for negotiation with staff representatives. [Background text: IP/01/283]

EU opens market to poorest

The world's 48 poorest countries will be able to export goods to the EU without quotas or duties, under plans approved by the Council on 26 February. It makes the EU the first major trading power to commit itself to opening its market fully to least-developed countries. The elimination of duties and quotas takes effect on 5 March. Full liberalisation for three products -rice, sugar and bananas - will be phased in over the next five to eight years. To compensate, duty-free quotas will be created for rice and sugar, based on the highest level of exports in the 1990s, plus 15% each year. The only exception is for weapons, which are not covered by the policy. The decision sent a signal to the rest of the world that the EU was serious about having the most disadvantaged countries share in the fruits of trade liberalisation, said Commissioner Pascal Lamy. [Background text: IP/01/261]

Freer labour market by 2005

A strategy to open up labour markets in Europe by 2005 was set out on 28 February. The Commission is backing this target with a two-stage policy to make it easier for people to move for work within the EU, and to raise skill levels. The first stage will address the main barriers to mobility. These include problems with the wider recognition of qualifications and skills, social security and pension systems, and accessing information on jobs and training available throughout Europe. Stage two will set up a High-level Skills and Mobility Taskforce, led by business representatives, to address key problems, such as the skills gap in information and communications technology, and to encourage good practice. The Commission intends to put forward an action plan to the European Council next spring, on the basis of the Taskforce's report. Commissioner Anna Diamantopoulou said new pan-European labour markets were emerging, driven by technological change and globalisation, but faced many barriers. Removing them was an opportunity for individuals and business alike. The strategy has been prepared for the Stockholm European Council, which takes place on 23-24 March.[Background text: IP/01/276]

· Simpler EU rules on recognition of professional qualifications were adopted on 26 February. [Background text: IP/01/253]

Rapid reaction scheme agreed

The EU will soon be able to tackle civilian crises in other countries more quickly through a rapid reaction mechanism, after adoption of a Regulation on 26 February. Commissioner Chris Patten said the system would enable the EU to mobilise resources within hours or days rather than weeks or months, in support of civilian experts. Interventions under this mechanism are aimed at preserving or re-establishing the civic structures needed for political, social and economic stability, in crisis situations. Humanitarian aid focuses on the individual, seeking to preserve life and relieve suffering. The scope of the mechanism draws on existing Community instruments covering human rights work, election monitoring, institution-building, mediation and police training, for example. It has a budget of euro 20 million for 2001. IP/01/255

· Patten visited Skopje to join a summit on regional cooperation in SE Europe on 23 February. [Background text: IP/01/247]

'Protect kids more against web'

The Commission is calling for more action to protect young people from harmful material on the Internet, television and other media. Many operators have introduced codes of conduct, but consumers have not been sufficiently involved, it notes in a study of how 1998 guidelines have been implemented. These called for self-regulation within national frameworks, now mostly in place. Another gap is in the classification of videogames. Many Internet service providers use codes of conduct, with hotlines for complaints about harmful or illegal content. However, a global strategy is needed because many sex sites, and others with content damaging to children, are based outside the EU. The industry is developing rating and filtering systems, and most broadcasters already use warning signals.IP/01/273

· An international campaign against child sex tourism has won a euro 1 million EU grant. [Background text: IP/01/246]

The Nice Treaty was signed on 26 February. It will become law after ratification by all Member States.

US Secretary of State Colin Powell visited the Commission for discussions on 27 February. [Background text: IP/01/267]

The updated economic stability programmes of Luxembourg, Spain, Belgium and Portugal have been assessed by the Commission. [Background text: IP/01/274, IP/01/272, IP/01/271 & IP/01/275]

Freer trade with Mexico will follow the entry into force on 1 March of an agreement on services, along with preferential arrangements on public procurement, investment and intellectual property. [Background text: IP/01/266]

Enlargement news

More Views From Industry On What Accession Requires

UNICE (Union of Industrial and Employers' Confederations of Europe), is currently finalising a detailed update of its position on the environment chapter of the negotiations. UNICE says that since the Swedish Presidency is aiming to make real progress on the chapter on environmental policy with the most advanced candidate countries in the first half of 2001 (it is already open with Poland, Hungary, Czech Republic, Cyprus, Slovenia, Lithuania, Estonia and Latvia), "the environmental aspects of UNICE's position on enlargement (October 2000) are currently further elaborated, to influence the accession negotiations this spring, notably by defining what requests for transitional measures in the field of environmental policy are acceptable, negotiable or unacceptable to business".

Commission report on consequences of enlargement for smaller firms

A new study for the Commission suggests that the macroeconomic consequences of enlargement for the EU will be moderate, but positive, adding about 0.2% to overall GDP growth. The economic environment for smaller firms will slightly improve, it says, but the consequences will vary from sector to sector: the EU is at risk in sectors with high labour intensity, but has advantages in business and financial services, while candidate countries are likely to benefit in terms of their tourism and transportation services sectors, the study suggests.

Overall, the impact of enlargement on smaller firms will not be significantly different from the general impact of wider global changes. In many sectors, the impact of enlargement will be restricted to regions close to the potential new EU member states. The study for the Commission looks at the expected impact on smaller firms in the EU from accession of the Czech Republic, Cyprus, Estonia, Hungary, Poland and Slovenia. It focuses particularly on two regions which border on future member states (north-eastern Austria and Bavaria) and two that do not (Catalonia and Scotland). According to the study, while at first glance the competitive situation of producers in the accession countries might look more favourable than in Bavaria because wages are still lower, "this view conceals a complex and diverse competitiveness situation in accession countries". Some industrial sectors in accession countries could be more competitive compared to Bavarian SMEs, especially in wage-intensive areas. However, in higher-technology production, the competitive situation of producers in accession countries will be less favourable because lower wage levels only partly compensate for lower productivity levels in accession countries, which are due to a lack of modern technology and machinery, and even to lack of skilled personnel and inferior product quality. In addition, the study suggests, the unfinished process of corporate restructuring in the accession countries reduces competitiveness.

Some smaller firms in border regions might lose competitiveness in the face of increasing wage-based competition from across the border (mainly from the Czech Republic), especially where they serve local markets, such as the construction industry and crafts, local services and tourist facilities. But on the whole, the competitive situation of Bavarian SMEs should be still favourable compared to producers in the accession countries, it concludes.

A bigger EU not cost-free, but manageable, says Commissioner for Budget

"Enlargement will not be cost-free", said Michaele Schreyer, Commissioner for Budget, in a recent talk on financing EU enlargement at the London School of Economics. The new members will all be net beneficiaries, she pointed out: they will receive more out of the EU budget than they will contribute. But although there will be costs, they are containable and have already been factored into EU planning, she insisted. "Expenditure will be negotiated, fixed and there is not the situation of an incalculable risk", she said.

Because of the gap in income between the EU and most of the candidate countries, "many people are concerned about the cost of enlargement for the European Budget", said the Commissioner. But, she pointed out, the ceiling of 1,27% fixed at the Berlin summit in 1999 will remain in force for the financial planning period to 2006. "We have on one sheet of paper fixed amounts that could be used for the enlargement to the Luxembourg group of candidate countries [Poland, Hungary, the Czech Republic, Estonia, Slovenia and Cyprus] once they accede to the Union. And we still have a margin to the overall ceiling for the budget", she said. She admitted that there was a legitimate question over whether the financial arrangements for six "first-wave" countries would also be sufficient for an enlargement to ten or twelve candidate countries. She estimated expenditure for enlargement for 10 countries in 2006 at euro 16-25 billion, compared with the Euro 16 billion estimated in Agenda 2000 (which assumed enlargement in 2002 with just six countries). "The possible increase of expenditure for enlargement would still leave a margin below the maximum EU budget GNP rate of 1,27%", stated the Commissioner. The margin left could then provide a safety net for unforeseen developments, and for expenditure related to the subsequent accession of Bulgaria and Romania. Any increase of the EU budget will be financed through an increase of the GNP call rate on member states, which provides for a balanced increased burden for the member states in terms of share of GNP.

On February 21 the EU's committee of permanent representatives (COREPER - the member state ambassadors to the EU) spent time on enlargement matters, reviewing some linguistic changes to positions agreed, and examining chapters on energy and free movement of goods with Slovenia, competition and free movement of capital with Cyprus, and environment with Latvia. It also looked at the scheduled adoption of the Council Regulation on assistance to Turkey in the framework of the pre-accession strategy, in particular through an Accession Partnership.

Commissioner for Enlargement Günter Verheugen said during his visit to Slovakia last week that the country has successfully made its way back into the possible front runners for EU accession, only two years after being under EU attack for failings in its democracy and minority rights record. Prospects were further improved by the February 23 adoption by the Slovak parliament of long-delayed constitutional legislation crucial to the country's accession bid.

Maj-Inger Klingvall, Swedish minister for development cooperation, migration and asylum policy, told the Swedish Parliament on 23 February that enlargement is one of the main priorities of the Swedish Presidency of the EU, and that: "We are in a position to pave the way for a political breakthrough, even in the more difficult chapters now being negotiated, such as that of free movement of persons". She insisted that each candidate will be judged on its own merits, and that new member states must develop their legal and administrative frameworks for orderly migration, and share in the responsibility of receiving asylum seekers and of giving protection to those in need of protection". She went on to say that while Sweden supports efforts to counter illegal migration, and continues to work on the French initiatives, "We also need to strengthen the preventive side, which often is the most effective. In particular, the strengthening of asylum systems and legal and administrative frameworks for orderly migration in the transit countries of eastern Europe and the Mediterranean region will be far more effective in fighting people smugglers than any effort to further strengthen our own border controls".

Hungary and the Czech Republic have signed trade facilitation agreements with the EU. [Background text: IP/01/254]