The Week in Europe 12-19/11/02

10.12.2002 | Euroskop

The Week in Europe 12-19/11/02

EU news in brief

Statement of Commissioner Verheugen about the UN Plan for Cyprus

"The Commission welcomes and supports the efforts of the good offices and the personal involvement of the UNSG Kofi Annan to solve the Cyprus problem. The presentation by the UN Secretary General of a proposal for a comprehensive settlement is a courageous and important step to which the European Union should lend its full support. The Commission hopes that it will contribute to bridge the gaps between the two communities and lead to a settlement before the Copenhagen Summit. The European Union has repeatedly expressed its preference for a reunited Cyprus to join the European Union on the basis of a comprehensive settlement, and urged the leaders of the Greek Cypriot and Turkish Cypriot communities to seize the opportunity and reach an agreement before the end of the accession negotiations this year. The European Union has also stated that it will accommodate such a comprehensive settlement in the Treaty of Accession in line with the principles on which the European Union is founded. We are now indeed entering a decisive phase as the accession negotiations are coming to an end. Cyprus is among the ten countries for which the conclusion of the negotiations is recommended. The key reference for the EU in relation to the decision on Cyprus' accession are the conclusions of the Helsinki European Council in 1999. All efforts should be undertaken to make use of the very limited time left and to bring the process to a positive outcome so that the accession negotiations would indeed have served as a catalyst for a settlement."

European Commission reports improved performance in EU labour markets despite economic slowdown

The European Commission agreed a report on Member States' employment performance in 2001. It acknowledges positive results so far in creating new jobs and switching to job-friendly policies in spite of a more difficult economic environment. But the Commission also calls on governments, business and trade unions to maintain commitment to labour market reforms. The package now goes to the EU's Council of Ministers.

European Commissioner for Employment and Social Affairs, Anna Diamantopoulou said: "The very impressive performance of 2000, when we had the best employment situation for many years, was a difficult act to follow in 2001 but EU labour markets are still improving. They have so far withstood the economic downturn because Member States have launched, and stuck to, ambitious reforms. If all stakeholders keep their end of the bargain, the EU has a good chance of overcoming cyclical downturns without again paying a high price in terms of unemployment."

The report can be found at:

http://europa.eu.int/comm/employment_social/news/2002/nov/jer2002_en.html

[Background paper IP/02/1653]

Commission Autumn Economic Forecasts 2002-2004 for the euro area and the European Union

After the decline in economic activity in the last quarter of last year, the recovery in the euro area and the EU started in the first quarter of this year, but failed to accelerate subsequently. Investment continued to contract and private consumption was weak as uncertainty increased, preventing the promising pick-up in international trade to spill over to domestic demand. The recovery is much slower than anticipated and the average growth rate in the euro area is estimated to be 0.8 % in 2002 and is forecast at only 1.8 % in 2003. Only from the second half of that year is growth expected to gain momentum, if confidence returns, oil prices ease and stock markets remain stable. Nevertheless, the rise in the unemployment rate is limited and temporary, but the fall in the inflation rate is slow. Due to deterioration in the economic situation and an easing of budgetary policy, the general government deficit is expected to widen to 2.3 % of GDP in 2002 in the euro area (to 1.9% of GDP in the EU), with not much improvement expected in the following year.

[Background paper IP/02/1659]

Commission Autumn Economic Forecasts 2002-2004 for the Candidate Countries

Candidate countries have, on average, sustained solid growth despite the worsened international economic climate. Economic growth has only slightly slowed down during 2002. Due to strong domestic demand, most candidate countries showed resilience and the extent of the slowdown remained limited. In the current year, growth should amount to 2.1% for the ten acceding economies and 2.9% for all candidate countries. This represents a slight downward revision from the Spring forecast. An expected return to normal external and domestic developments should allow to reach average growth of close to and beyond 4% in 2003 and 2004. Lower international commodity prices and weaker growth have contributed to a further fall in inflation in 2002. The expected further slowdown of inflation in 2003 and 2004 will be mainly the result of policy efforts to reduce inflation in the high-inflation countries Romania and Turkey. Over the forecasting period, employment losses due to continued enterprise restructuring should be progressively compensated by higher employment creation and should lead to a slightly improved overall labour market situation up to 2004. The acceleration of export demand in 2003 and 2004 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.

[Background paper IP/02/1658]

Solidarity Fund: Council and Parliament back Commission plans to grant EUR 728 million to German, Austrian, Czech and French regions hit by floods

The European Parliament and Council of Ministers endorsed European Commission proposals to grant € 728 million to help alleviate damage caused by this summers heavy floods. This first-ever use of the newly created European Union Solidarity Fund will, once formally adopted, free up € 444 million for Germany, € 134 million for Austria, € 129 million for the Czech Republic and € 21 million for France. The Solidarity Fund was set up in the space of just three months to allow for rapid financial assistance in the event of a major disaster. It can be used, among other things, to restore vital infrastructure and clean up affected regions. This provisional agreement by the Council and Parliament, in their role as Budgetary Authority, should allow the Commission to begin payments before the end of the year. For further details, see IP/02/1662.

[Background paper IP/02/1686]

Enlargement news

Commission proposes roadmaps to help Bulgaria and Romania on their way to EU membership

As it had proposed on 9 October in its Strategy Paper and as requested by the European Council in Brussels on 24-25 October, the European Commission presented roadmaps for Bulgaria and Romania to support the efforts of these two candidate countries to achieve their objective of joining the European Union in 2007. The purpose of the roadmaps is to indicate the main steps that they need to take to be ready for membership. They identify in detail the tasks ahead, with a particular emphasis on administrative and judicial capacity necessary to implement the acquis and on economic reform. To support these efforts, the Commission is also proposing a considerable progressive increase in the European Union's financial assistance. The roadmaps will be submitted to the Council of Ministers and to the European Council in Copenhagen on 12-13 December.

[Background paper IP/02/1667]

Copenhagen summit agenda focuses on enlargement

The EU Presidency has drafted an agenda for the Copenhagen summit that focuses primarily on EU enlargement, and on the functioning of the Council in an enlarged EU. But it will also hear a progress report on work in the European Convention from its President, Valéry Giscard d'Estaing, and an exposé by the President of the European Parliament, Pat Cox.

As the Presidency expresses it, "In accordance with the Brussels European Council Conclusions the European Council [in Copenhagen] is expected to take the necessary decisions and conclude the accession negotiations with the ten candidate states identified at the October European Council with a view to signing the Accession Treaty in Athens in April 2003; to take the necessary decisions concerning first of all detailed roadmaps, including timetables, and increased pre-accession assistance in order to advance the accession process with Bulgaria and Romania; [and] to decide on the next stage of Turkey's candidature."

The summit will also be presented with an initial report from the Presidency on two of the delicate issues still to be decided about how the EU Council of Ministers will function after enlargement. One outstanding question is how to organise the six-monthly rotating Presidency of the Union - in other words, when should new member states first take on the challenge of chairing EU affairs for the first time.

The other question is the use of languages in an enlarged Union: the Presidency is working on options that could provide practical solutions for this new challenge - with up to nine more working languages to be added to the current EU's 11 languages - without endangering basic principles such as equality of treatment and the opportunity for all to speak in their own language at certain Council meetings and to see documents in their own language. For translating, options under study include limiting the number of languages for internal administrative documents, and limiting the documents to be translated into all languages. But the biggest challenge is interpretation. Each EU Council of Ministers preparatory meeting costs some 20,000 per day for interpretation with just eleven languages, and will cost nearly twice that with nine more languages. There is also the issue of finding enough rooms and interpreters. So options are under study for cutting the demand for interpretation, and possibly even charging national delegations for some interpreting services.

The Copenhagen summit will start on the evening of 12 December, and, says the Presidency, "If the expected decisions on enlargement materialise, a dinner will be held for the EU Member States and Candidate Countries upon conclusion of the meeting on 13 December. However, the Presidency is prepared to continue the meeting into the weekend if that should prove necessary in order to achieve the results aimed for." The draft timetable allows just one hour - at 17.00-18.00 on December 13 - for a meeting between the European Council and the Candidate Countries with which negotiations have been completed.

Turkey aims for EU accession

EU-Turkey relations will survive even if the EU does not set a date at the Copenhagen summit for the opening of accession negotiations with Ankara, according to Recep Tayyip Erdogan, head of the Islamic Justice and Development Party (AK) that won the Turkish elections earlier this month. AK representatives are organising a series of diplomatic visits to European capitals to put the case for Turkey's accession to the EU.

The reflections about Turkey's EU application have continued, with senior EU figures reasserting that Turkey's position as a candidate is an established part of EU policy. Javier Solana, EU High Representative for the Common Foreign and Security Policy, visited Ankara on 14 November, in response to an invitation of the new elected leaders, and met the AK Party leader Recep Tayyip Erdogan and his main advisors, as well as representatives of the current administration.

But European Peoples' Party President Wilfried Martens last week left open the view of his grouping on Turkey's status, with a declaration that "this is a very delicate and central issue which will be intensively discussed by our government and party leaders at our EPP Summit in Copenhagen on 12 December next". He declined to indicate how he thought the EPP leaders would finally decide.

On the future for Turkey's relations with NATO following the election, Lord George Robertson, secretary general of NATO, said the Islamic nature of the new regime was not an issue: the new government had to govern for the whole people, and had already renewed the nation's commitment to NATO and EU membership.

Meanwhile, the latest report on Turkey from the Organisation for Economic Co-operation and Development stresses that regulatory reform is essential for the successful stabilisation of the country's economy. Backed by strong political leadership, it can provide the basis for a possible agenda for good governance and sustainable economic growth, says OECD. But it warns that the transition to a market economy is still far from complete.

The report lists plenty of positive points in banking, fiscal management, monetary policy, quality regulation, public administration, competition policy, and energy and telecommunications: "Momentum for reform has been boosted by the political drive for accession to the European Union", it says. However, it also points out that privatisation has slowed, the state enterprise sector remains very large and suffering from low productivity, and the government still interferes extensively in price setting. "Delays and failures in regulatory reform have incurred some heavy costs", says OECD. In terms of regulatory governance, local government remains inefficient, undermining efforts to raise regulatory quality, and the implementation and enforcement of reforms remain inadequate.

Outline deal reached on Kaliningrad

The EU-Russia summit in Brussels on November 11 reached an agreement on the transit of people and goods across Lithuania, between the Russian region of Kaliningrad and the rest of the Russian Federation. Under the deal, from July 1 next year Russians wishing to travel by land between Kaliningrad and the rest of the Federation will be able to do so without obtaining the visas that Lithuania will introduce from that date as part of its own EU accession preparations.

Instead, they will need a Facilitated Transit Document, which will be valid for multiple entries and for all forms of land transit, or a Facilitated Rail Transit Document, which will be valid only for a single return journey by rail, without stops in Lithuania. Both will be made available at low cost or free.

The EU said after the meeting that the agreement paves the way for greater co-operation in a number of other areas, notably in the area of justice and home affairs, where the Russian Federation and the EU have agreed to launch negotiations on a bilateral readmission agreement. External Relations Commissioner Chris Patten said, "I am very pleased that we have reached an agreement on transit travel with Kaliningrad. We have been discussing this issue for over two and a half years. It has been a tough and important negotiation. The result is good for everyone concerned and clears away a problem created by enlargement in a way which in my judgement meets the requirements of Lithuania and of the Russian Federation."

Media quality at stake in Eastern Europe

A European Parliament hearing on the role of the media in the candidate countries and the Balkans last week focused on the importance of journalistic ethics and professionalism, and the problem of media concentration. Oliver Money-Kyrle, Project Director of the International Federation of Journalists, said that media standards in the candidate and Stability Pact countries remained poor. There was a lack of independence, ethical standards were low and investigative journalism was weak. In addition, journalists lacked proper training. Ferenc Miszlivetz, Jean Monnet Professor at Daniel Berzsenyi College, Hungary, also stressed the need for higher quality journalism and the training of journalists, as he claimed public broadcasting was failing to serve the public and had lost credibility. Mark Thompson, former programme director for the Balkans for the International Crisis Group, called for greater EU pressure to support media pluralism and for a directive on media pluralism to be drawn up. Freimut Duve, the formal representative on freedom of the press of the Organisation for Security and Co-operation in Europe, said the problem of media concentration was not limited just to the candidate countries, but was an issue the EU had still to deal with among its current member states.

Funding for administrative preparations for enlargement during 2003

The European Commission announced plans last week to allow the 2003 EU budget to provide the necessary resources for the administrative preparations for enlargement. The Preliminary Draft Supplementary and Amending Budget it has adopted will implement a proposal from the European Parliament to "front-load" some administrative expenditure initially planned for 2003 to be budgeted this year. This will provide the necessary finance for additional posts in next year's budget. For the Commission, this means there will be no further budgetary obstacle to appointing 500 temporary staff, largely from the candidate countries, to help with the preparations for enlargement. Once adopted, the proposal would also make money available from the 2002 budget to pay for the publication of secondary EU law in the candidate countries' languages, rather than financing these actions from the 2003 budget, as initially foreseen. The Parliament and Council must now approve the Amending Budget in their role as Budgetary Authority by early December 2002.

Schreyer warns against confusion on enlargement costs

The notion of the costs of enlargement in public debate "is often nebulous", European Budget Commissioner Michaele Schreyer said in a recent speech in Vienna For the EU15, she insisted, the costs in 2006 will be less than 0.06% of each country's GNP. On agriculture, the farmers in the new member states will receive from the beginning the same market related subsidies as the farmers in the EU-15, and for the support of development in rural areas the EU will offer even higher support than in the EU-15. And in addition to the direct payments that will be gradually phased in, the new member states will also participate in the Structural funds. But the new member states will have to pay into the EU budget, she pointed out. And they will have to do this at standard EU levels - which means that Poland or Estonia have to pay almost the same part of their VAT revenue and the same share of their GNP as France, Austria or Greece. And they also have to finance the UK rebate, as this is part of the acquis.