The Week in Europe 22-28/04/02

EU news in brief

Commission adopts proposal to combat Cybercrime

The European Commission has adopted a proposal for a Council Framework Decision on "Attacks against information systems". It addresses the new most significant forms of criminal activity against information systems, such as hacking, viruses and denial of service attacks. This Framework Decision seeks to approximate criminal law across the EU to ensure that Europe's law enforcement and judicial authorities can take action against this new form of crime. It also aims to encourage and promote information security. Further information:

http://europa.eu.int/information_society/topics/telecoms/internet/crime/index_en.htm

http://europa.eu.int/comm/dgs/justice_home/index_en.htm

[Background paper IP/02/602]

Growth promoting hormones pose health risk to consumers, confirms EU Scientific Committee

The EU Scientific Committee on Veterinary Measures relating to Public Health (SCVPH) confirmed that the use of hormones as growth promoters for cattle poses a potential health risk to consumers, following a review of 17 studies and other recent scientific data. Publishing its third opinion on the risks to human health from hormone residues in beef products, the SCVPH found no reason to change its previous opinions of 1999 and 2000. The final opinion of the SCVPH "Review of previous SCVPH opinions of 30 April 1999 and 3 May 2000 on the potential risks to human health from hormones residues in bovine meat and meat products" is available on the Internet at:

http://europa.eu.int/comm/food/fs/sc/scv/outcome_en.html

For further background information on the "hormone case", go to:

http://europa.eu.int/comm/food/fs/him/him_index_en.html

[Background paper IP/02/604]

Eurobarometer 56: Full results of Autumn 2001 poll

Full results of the Autumn 2001 Eurobarometer opinion survey (Eurobarometer 56) have been published. The survey, one of two carried out each year, asks numerous questions about the attitudes and opinions of EU citizens on a wide range of issues relating to the European Union and its policies, and on their lifestyles and outlook. Eurobarometer surveys have been carried out since 1973. Regular Spring and Autumn surveys are carried out every year, as well as various other polls and studies. Fieldwork for this survey was carried out in October-November 2001. A few initial findings of this survey (responses to seven key questions) were published in December 2001 (see IP/01/1829). This survey, along with an archive of other Eurobarometer surveys, can be found on line at the following address:

http://www.europa.eu.int/comm/public_opinion

[Background paper IP/02/603]

Statement of Günter Verheugen after the elections in Hungary

The Hungarian citizens once again expressed their commitment to democracy, as shown by the high rate of turn out. This is particularly rejoicing and shows the vitality of the Hungarian democracy. Despite its far reaching transition and reform process, which has often difficult consequences for some parts of the population as in other central and eastern European countries, Hungary rejected the temptation of extremist, xenophobic, anti-European and anti-democratic forces already in the first round. I congratulate the winners, I look forward to collaborating with them, I know them already very well and I am confident that Hungary will proceed with determination in its preparation towards accession to the EU.

[Full statement IP/02/600]

The 2002 Broad Economic Policy Guidelines

The European Commission adopted its recommendation for the 2002 Broad Economic Policy Guidelines (BEPGs) of the Member States and the European Union. Covering both macroeconomic and structural policies, the BEPGs are at the centre of the EU economic policy co-ordination process. With the 2002 BEPG's, the EU enhances its integrated economic policy strategy. In order to achieve its ambitious economic objectives, the 2002 BEPGs urge Member States to step up the pace of economic reform. Action is recommended to concentrate on four areas: 1) safeguarding macro-economic stability; 2) raising labour force participation and employment as well as addressing persistent unemployment; 3) strengthening conditions for high productivity growth; and 4) promoting sustainable development in the interest of current and future generations. Full document available on:

http://europa.eu.int/comm/economy_finance/publications/broadeconomypolicyguidelines_en.htm

[Background paper IP/02/609]

Spring 2002: Economic Forecasts 2001 - 2003

The euro area economy contracted in the last quarter of 2001, but a gradual recovery is shaping up as confidence returns, depleted inventories are rebuilt and international trade picks up. Private consumption holds the key for the recovery gaining momentum in the first half of the year. Euro area growth is expected to accelerate in the second half and reach output potential in the fourth quarter of 2002. An average growth of close to 3.0% is forecast for next year. Despite a temporary rise in unemployment in 2002, employment creation will continue and 1.8 million new jobs are expected to be created in the euro area over the next two years. In 2003 the average unemployment rate is expected to fall below its 2001 rate. Inflation is expected to fall during the second quarter of 2002 and average inflation is expected to be close to 2.0% for both this year and next. The general government deficit in the euro area is expected to widen for two consecutive years, for cyclical reasons, reaching 1.4% of GDP in 2002. However, the underlying structural balance is not expected to deteriorate in 2002 as Member States are committed to realise government accounts close to balance or in surplus from 2003 or 2004. More detailed information on the forecasts is available in European Economy, published on the internet at:

http://europa.eu.int/comm/economy_finance/publications/european_economy/forecasts_en.htm

[Background paper IP/02/610]

Economic forecasts for the Candidate Countries (2001-2003), Spring 2002

As a result of the worsened international economic climate, economic growth slowed down in the candidate countries at the end of 2001. Nevertheless, due to strong domestic demand, most candidate countries showed resilience and the extent of the slowdown remained limited, in line with our Autumn 2001 forecast. The weak economic development in the second half of 2001 weighs heavily on the average growth rate in the current year, despite the accelerating recovery. An expected return to normal external and domestic developments should make it possible to reach 4% average growth in 2003. Lower international commodity prices have contributed to an inflation reduction in 2001. The expected further slowdown of average inflation over the forecasting period is mainly the result of policy efforts to reduce inflation in the high-inflation countries Romania and Turkey. Continued enterprise restructuring and higher productivity growth resulted in net employment losses and a higher unemployment rate in 2001. Over the forecasting period, employment losses should be progressively compensated by higher employment creation and should lead to a slightly improved overall labour market situation in 2003. Despite weaker demand for exports and strong domestic demand, external deficits declined slightly in 2001, due to more favourable terms of trade. The acceleration of export demand in 2002 and 2003 should prevent a significant deterioration of external balances, even with strong domestic demand. General government deficits remain relatively high as the combined result of lower growth and counter-cyclical fiscal policies in some countries in the early years, and high transition-related expenditures over the whole forecasting period. Full document available on:

http://europa.eu.int/comm/economy_finance/publications/supplement_c_en.htm

[Background paper IP/02/611]

Company law: expert group launches online consultation on possible reforms

The High Level Group of Company Law Experts set up by the European Commission has launched consultations on possible reforms to company law in Europe. The issues covered include both general themes and the following seven specific issues: corporate governance; shareholder information, communication and decision-making; alternatives to capital formation and maintenance rules; the functioning of groups of companies; corporate restructuring and mobility; a European Private Company; and co-operatives and other forms of enterprise. The deadline for comments is 21 June 2002. Responses to the consultation will be taken into account in the Group's final report later this year. This report is due to suggest specific priorities and measures for reforming company law. Copies of the consultation paper are available at:

http://europa.eu.int/comm/internal_market/en/company/company/modern/index.htm

[Background paper IP/02/625]

Eurostat news releases

Revised estimates for 2001 - EU15 real agricultural income up by 3.3%

EU15 real agricultural income per worker increased by 3.3% in 2001, according to revised estimates published by Eurostat, Statistical Office of the European Communities in Luxembourg. Euro-zone agricultural income per worker rose by 3.0%. The increase in the level of EU15 real agricultural income per worker was due to an increase in real agricultural income (+1.2%), on the one hand, and to the continued reduction in the volume of agricultural labour input (-2.0%), on the other. Agricultural income was above the levels of 2000 in all Member States except Luxembourg (-0.6%). The strongest growth rates were observed in Denmark (+12.3%), Portugal (+11.8%), Austria (+10.9%), Germany (+9.9%), Ireland (+7.8%) and Belgium (+5.3%).

[Background paper STAT/02/49]

Social protection - Expenditure on pensions accounted for 12.7% of the EU's GDP in 1999 - Old-age pensions make up three-quarters of the value of all pensions

According to a report published by Eurostat, expenditure on pensions in the EU, which constitutes almost half of all expenditure on social protection, was 12.7% of GDP in 1999. This share has varied very little since 1993, when it accounted for 12.9% of GDP. Pensions are the biggest item of social protection expenditure in all EU Member States except Ireland, Denmark and Sweden. In 1999, they constituted more than 60% of that expenditure in Italy, and between 50% and 52% in Greece, Spain, Luxembourg, the Netherlands, Austria and Portugal. In that year, old-age pensions accounted for more than three-quarters of all pensions in the EU, the remainder comprising disability pensions (9.9%), survivors' pensions (9,7%) and other types of pension (5.1%).

[Background paper STAT/02/50]

Enlargement news

Enlargement driving EU thinking on the wider Europe

Over the coming months the EU is aiming to create a more consistent framework for its relations with the countries just beyond the fringe of the current enlargement exercise. The General Affairs Council held what EU Council President Josep Piqué described as "an interesting and wide debate" on the subject when it met in Luxembourg on April 15-16. The issue for the Council is how to deal in the future with Moldova, Belarus, Ukraine, and Russia now that EU enlargement is bringing much closer the day when these countries will be direct EU neighbours. The European Commission and High Representative Javier Solana will prepare contributions to the thinking during the second half of 2002 on the possibilities for strengthening these relations.

Other meetings in the margins of the General Affairs Council examined specific aspects of the same challenge. The agenda of the Co-operation Council with Russia on April 16 included discussion of trade, where expectations are high, since more than a third of Russia's exports are to the EU, a figure expected to increase to around 50 % after EU enlargement, and Kaliningrad, which will be encircled by EU member states after enlargement. Piqué said on Kaliningrad "We're really making progress," and a special meeting of the EU-Russia Co-operation Committee is to be held in Kaliningrad in mid-May, with the hope of presenting some concrete results at the May 29 EU-Russia summit in Moscow. European External Relations Commissioner Chris Patten also described progress as "very good". The EU recognised, he said, the concerns of the Governor of Kaliningrad over access and visas and wanted to find "the most suitable solution without driving a coach and horses through the Schengen Agreement". EU justice and home affairs ministers will look at transit and visas at their Council meeting in April. "It is a real challenge and there are real problems because of enlargement, and we want to tackle them as successfully and comprehensively as possible," said Mr Patten.

Moldovan Prime Minister Vasile Tarlev headed his delegation at the Co-operation Council between the European Union and Moldova on April 16 in Luxembourg - a long meeting, as EU Council President Josep Piqué remarked after the meeting, running to an unusual two hours, but justified by the importance that Moldova will increasingly have as a neighbour of the enlarged European Union. In addition to the opportunities for closer links on trade and other forms of co-operation, the EU is concerned about remedying weaknesses in law and order that have created opportunities for crime and trafficking in a sensitive border area of what will be the enlarged EU.

Enlargement progress "reasonable", says General Affairs Council

"We have done reasonably well with enlargement," said EU Council President Josep Piqué at the end of the April 15 General Affairs Council in Luxembourg. Foreign affairs ministers conducted a review of progress with enlargement, with presentations by the Presidency and by European Enlargement Commissioner Günter Verheugen. The Council formally "welcomed progress achieved in the accession negotiations", and restated its determination to move ahead in line with the Nice road map for opening negotiating chapters, and the end-2002 timetable for concluding accession negotiations agreed by the European Council in Göteborg and Laeken. Because the Council can only move as fast as the EU's internal preparations allow it, it also recalled that, "in order to stick to the road map established at Nice, it is essential to establish EU Common Positions in the relevant remaining negotiating chapters" - that is, the tough financial chapters of agriculture, regional policy and budgets. And, as Mr Piqué remarked after the meeting, "We expect this week to receive more draft common positions" from the Commission. The Council also adopted without discussion a decision that should help improve trade arrangements for processed agricultural products with Hungary. The decision was the formalisation of an EU position in further talks to be pursued in the EU-Hungary Association Council.

New member states "will be net contributors in first year"

On an optimistic estimate, new EU member states could obtain about three quarters of the EU resources available for them after accession, according to a new study from the Vienna Institute for International Economic Studies, WIIW. "The EU enlargement process: current state of play and stumbling blocks" assesses the likely balance between transfers from and contributions to the EU budget by the new members of the EU in the first three years after enlargement. Their net financial position will depend on their success in turning available resources into disbursed transfers, the study says. Its less optimistic projection is that rate would be 50%, reflecting the rates of the worst performing EU members in receiving transfers from EU structural funds. And its worst-case scenario suggests a success rate of only 30% - based on disappointing experiences with pre-accession aid in some candidate countries. Even in the best-case scenarios, the first year of membership would most likely see the new members assuming a net contributor position, to the tune of € 400 million to € 1.8 billion, the study says. In the worst-case scenario, the loss could be €3 billion. But in all three scenarios, the estimated net financial position will improve considerably in the second and third years of membership. However, the study concedes that a purely mathematical approach is not sufficient to make a full assessment of advantages and disadvantages: "Possible non-enlargement would entail considerable costs for the ten applicant countries in terms of the opportunities they would lose of achieving higher GDP growth rates," it adds.

Another warning from Poland

Speaking at the Madariaga European Foundation on 16 April, Poland's former chief negotiator, Jacek Saryusz-Wolski, warned that "the danger for delay still looms" over the accession negotiations. He listed as the key risk areas possible hitches in the final stages of negotiations now the difficult chapters are under discussion, non-ratification of the Treaty of Nice, and the possibility that debates in the EU's Convention on the future of Europe could lead to additional procedural delays. But, he went on, "delay could increase negative public opinion towards EU membership, as could a reticent EU during negotiations". Faced with growing EU scepticism in Poland, Saryusz-Wolski urged the EU to "lend a helping hand" in the final lap of negotiations, for the benefit of all.

Negotiations on institutions and regional policy

The following chapters were closed in the negotiation round on 22 April:

· Bulgaria: Economic and Monetary Union; Social Policy and Employment; Institutions (chapters closed in total: 17);

· Czech Republic: Regional Policy and Structural Instruments (chapters closed in total: 25);

· Estonia: None (chapters closed in total: 24);

· Latvia: Telecommunications and Information Technologies (chapters closed in total: 24);

· Lithuania: Cooperation in the Fields of Justice and Home Affairs; Institutions (chapters closed in total: 26);

· Malta: None (chapters closed in total: 21);

· Poland: Institutions (chapters closed in total: 23);

· Slovakia: Institutions (chapters closed in total: 24);

· Slovenia: None (chapters closed in total: 26).

The negotiations with remaining three candidate countries held on 19 April, closed the following chapters:

· Cyprus: Taxation; Regional Policy and Structural Instruments; Institutions (chapters closed in total: 27)

· Hungary: Institutions (chapters closed in total: 24)

· Romania: Social Policy and Employment; Institutions (chapters closed in total: 11).

The Czech Republic and Hungary refused to close their negotiations on institutions. Both countries insist on 22 seats in the European Parliament, the same as Belgium, Portugal and Greece, because they have populations of similar size. The Nice Treaty, which is the basis for the division of power in an enlarged EU, gives them only 20 seats each.

For the same reason, Malta wants 6 seats in the European Parliament, the same as Luxembourg. The Treaty gives Malta 5 seats. Malta has not yet opened negotiations on institutions.

Slovenia was not keen to close negotiations on the institutions chapter, requesting more information from the EU on how the seats in the European Parliament and the votes in the Council will be distributed if only 10 candidate countries join the EU in the first wave of enlargement. The Nice Treaty distributes the seats and the votes among the current 15 and the future 12 Member States. However, Bulgaria and Romania are not expected to join in the first wave. [Source: www.euractiv.com]

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