The Week in Europe 12-18/02/03

The Week in Europe 12-18/02/03

EU news in brief

Commission puts in place final piece of new framework for electronic communications

The European Commission identified 18 markets in the electronic communications sector that national regulators will have to investigate in order to decide whether these markets continue to justify sector specific regulation. The list of the markets is a key element of the new regulatory framework for electronic communications in Europe. By listing the markets where the Commission considers that regulation may be justified, the recommendation seeks to roll back regulation where it is no longer required and provides greater legal certainty for suppliers of communications networks and services.

European Commissioners Liikanen and Monti said: "This Recommendation is a key building block of a stable and forward-looking technology-neutral regulatory framework based on competition law concepts. Our joint initiative will promote consumer benefits and provide a clear perspective of decreasing regulation." [Background paper IP/03/221]

The eEurope 2002 Action Plan has been a success in bringing Europe on-line

The eEurope 2002 Action Plan, designed to bring Europe online as fast as possible, has been a major success, according to the Commission's eEurope 2002 Final Report. The eEurope 2002 Action Plan was launched at the European Council at Feira in June 2000. The report shows that the number of households connected has more than doubled and nearly all schools and businesses are now online. Europe now has the world's fastest research network. Thanks to the political momentum generated by the Action Plan, a new and modern legal framework for electronic communication services and e-commerce was adopted at European level and will enter into force this summer. Erkki Liikanen, European Commissioner responsible for Enterprise and Information Society said: "Greater connectivity and investment in information and communications technologies are the main building blocks for improved productivity in Europe, if coupled with reorganisation of processes in business and administration and an emphasis on skills. The targets set by eEurope have been essential to help Europe on the way to meet the Lisbon target of becoming more competitive by 2010. Now we must look ahead and focus on how broadband may be made generally available to Europeans so that the speed of change can increase." The Communication and other relevant documents are available at:

http://europa.eu.int/information_society/eeurope/news_library/index_en.htm

[Background paper IP/03/220]

Commission presents its proposal to adapt the financial framework for enlargement

On 11 February the Commission agreed its proposal for adapting the financial perspective for 2004-2006 to meet the demands of enlargement. The proposal sets in motion the process of incorporating the 10 new Member States into the EU budget within the limits of the financial perspective for the 6 candidate countries agreed in Berlin in 1999. The Council and Parliament will have to set the framework for the next three budgets on the basis of this proposal.

Michaele Schreyer, the Commissioner for Budgets, made the point that "the proposal meets the expectations of both the old and the new Member States, reflecting the decisions taken in Copenhagen. It remains within the ceilings set in 1999 in Berlin. At the same time all the new Member States will be net beneficiaries from the day they join."

[Background paper IP/03/217]

Social Policy Agenda is on track, says European Commission

The Commission's third annual progress report on the EU's Social Policy Agenda of 2000 shows that the agenda is still on schedule and that it has helped to make EU labour markets more employment-friendly with 2.5 million new jobs created in 2001-2002. But it also shows that the EU cannot be complacent and must step up the rhythm of reform if, as the Lisbon summit has set out, 15 million more new jobs are to be created between now and 2010. The Commission particularly criticises Member States for failing to set national employment targets. The report also calls for action to reduce unemployment rates which, nudged by the economic downturn, have crept up to 7.8% in the EU, and 8.5% in the eurozone. The report adds that labour market weaknesses are partly responsible for keeping people in social exclusion and poverty. Latest income data show that 15% of the EU population are a poverty risk, and 9% are at persistent risk of poverty. However, the report underlines that 40% of the EU population would have been at risk of poverty if welfare transfers were to be taken out of the calculation. It also points forward to the midterm review of the Social Policy Agenda later this year, which will stress the need for 'better jobs', both through productivity gains and by attracting more people into work. It is estimated that if the EU gave the equivalent of one extra year of education and training to everyone, it would increase overall EU productivity by about 5% immediately and an additional 5% in the long run. By the same token, good health boosts productivity: healthy workers earn 15-30% more than workers in poor health. [Background paper IP/03/228]

Eurostat news releases

Social protection in Europe in 2000: Share of social protection in GDP highest in Sweden, France and Germany

Per capita expenditure: between 60% and 150% of the EU average, depending on Member State.

In the EU, the share of social protection expenditure in GDP fell from 27.5% in 1999 to 27.3% in 2000. It has been falling steadily since 1996, when it was 28.4%.

The relative importance of social protection varies considerably from one Member State to another. In 2000, the lowest shares of GDP attributable to social protection were in Ireland (14.1%) and Spain (20.1%). The figure was highest in Sweden (32.3%), France (29.7%) and Germany (29.5%). Per capita expenditure also varies noticeably from one country to another when expressed in PPS (purchasing power standards). In 2000, it was 60% of the EU average in Spain and Portugal, but 150% in Luxembourg and 125% in Denmark.

To some extent, these differences reflect differences in living standards, but they are also indicative of the diversity of national social protection systems and of the demographic, economic, social and institutional structures specific to each country.

[Background paper STAT/03/17]

Enlargement news

The new financial framework for a bigger EU

The European Commission made its proposals last week for how the EU's financial perspective for 2004-2006 should be adapted to meet the demands of enlargement. This is the start of the formal process of incorporating the ten new member states into the EU budget for the period - which was originally designed, at the Berlin summit in 1999, for six new member states.

The budget for the EU25 will no longer distinguish between old and new member states. The 2004 budget will commit 1.12% of gross national product, or €115 billion (of which €111 billion is expected to be actually paid out in 2004). Ceilings will rise, in line with the Copenhagen summit agreements, gradually for agriculture and the Structural Funds, and immediately for internal policies (including a new facility for better controls at external borders, and provision for nuclear safety) and administration. The proposal includes compensatory payments for the acceding countries in the form of a temporary flat-rate cash-flow facility (€1.41 billion in 2004, shrinking to €1.04 billion in 2006, to ensure that the new member states are no worse off than before accession. Cyprus could see an addition €67 million in 2004, rising to €138 million in 2006, if a political solution is found.

For the detailed figures, see the tables available at http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/217|0|RAPID&lg=EN&display=

Businessmen should be able to benefit from a bigger EU

"For you as business leaders, the EU expansion means a new, enlarged Europe with 455 million consumers, the biggest single market in the world. At the end of the day, there will be no borders, no tariffs, no obstacles to trade and investments, just one single Europe", Franz Fischler, European Commissioner for Agriculture, Rural Development and Fisheries told a conference of the semi-conductor industry in Austria last week.

The enlarged common market will lead to more competition and mobility. Productivity will rise and costs will fall - which will lead to further economic growth, he predicted. It was no surprise, he remarked, that high-technology industry "is already heavily involved in candidate countries", given that "we will be faced with 100 million additional consumers with increasing purchasing power, a growing market for consumer goods stuffed with the electronic equipment you are producing and promoting."

And the single market and the Euro are key factors for successful European integration - and "the Euro will not stop within the borders of the existing EU: enlargement will bring it to the new member countries, once they have passed the economic tests", he pointed out.

The free movement of goods and workers that enlargement will bring, the right of establishment and freedom to provide services, and the totally liberalised movement of capital "will lead to more mobility in Europe. Capital will move to the east and foreign direct investment in the EU's new member states will increase significantly", the Commissioner predicted.

Fischler also pointed out that the EU is significantly assisting the accession countries to cope with the challenges of transformation. "The EU spends more money on the candidate countries than the U.S. Marshal Plan for Europe was worth after World War Two", he claimed.

EU support for Cyprus donors' conference

The European Union has come out with a strong statement of support for the United Nations proposal for an International Donors' Conference on Cyprus, which would be held soon after the signature of the political agreement and the unification of Cyprus. Substantial economic funds are required for the implementation of the comprehensive settlement of the Cyprus problem, if the UN Secretary General's proposals and deadlines for agreement are followed, the EU Presidency recognised in a formal declaration on behalf of the EU last week. "The objective of this conference would be to examine ways for the international community to support the costs linked to the political settlement and the reconciliation of the two communities in Cyprus." This "is of great significance to all Cypriots, thus deserving strong political and material support from the international community", underlined the EU in its statement. The European Commission has already announced its readiness to organise such a conference, and now the EU "has noted the wider support expressed for this proposal and calls on the international community and all international financial organisations to back this project and contribute to its goals, which will be to the benefit of all Cypriots and will help bring peace, security and stability to Cyprus and in the region as a whole." The declaration was also officially endorsed by the acceding states - including Cyprus.

Transported to a wider Europe

Enlargement was one of the areas that the European Parliament focused on in its debate in Strasbourg last week on the future of European transport policy. The resolution voted by the Parliament "urges the European Commission to submit a communication on the transport situation in the applicant countries, the level of sustainability, the incorporation of the acquis communautaire and the effects this has had, including specific proposals to deal with them before 2004". It also expressed support for the Commission's objective of maintaining the railways' share of goods traffic in central and eastern European countries at a high level, and called on the Commission "to present a workable plan" to this end. And it reminded the Commission of "the urgent need to introduce rules, controls and up-to-date penalties to prevent the use of transport by Mafia groups organising illegal immigration". In addition it demanded accelerated development and improvement of high-capacity north-south and east-west rail corridors and inter-modal inland terminals in accordance, "in order to support the revitalisation of the railways within the European Union and promote links with the applicant countries and the Europe-Mediterranean free trade area". It pointed out that the large number of different rail gauges currently used in the EU will be further increased by enlargement (notably with the Baltic countries, which use the wider Russian gauge), and called on the EU "to promote EU-wide harmonisation of gauges".

Mayors must play their role in enlargement

"In this time of great changes our eyes are fixed on the future", said Romano Prodi, President of the European Commission, last week, when he met mayors of capitals of member states and candidate countries who were invited to the EU's Committee of the Regions in Brussels. The mayors' presence at the meeting "foreshadows popular endorsement of enlargement in the member states and candidate countries", suggested the Commission President. "The mayors present here today and the members of the Committee all have a heavy responsibility: it is up to them to inform our fellow citizens, discuss the issues with them and galvanise them in the realisation of this age-old European dream", he urged - reminding them "what a wager this seemed a few short years ago - and yet we are now in the last stages of unifying the entire continent." He pointed out that the annual policy strategy agreed between the principal EU institutions will focus in 2004 on enlargement. "The enlargement process must be consolidated as regards the ten countries due to join next year and the negotiations must be continued with the other candidate countries", insisted Prodi.

Patten response on Latvia's Ventspils request

European External Relations Commissioner Chris Patten has replied to Latvia's request for EU assistance on Russia's oil export policy. Latvia's minister of foreign affairs Sandra Kalniete wrote to Patten last month urging attention to Russia's restriction of oil transit by pipeline to the Latvian port of Ventspils. She suggested that the security of energy supplies in the Baltic Sea region and the EU could be under threat as a result. The Commissioner's response expresses pleasure that Latvia, as a future member state of the European Union, is prepared to become actively involved in solving EU issues. He noted also that Latvia, as one of Russia's neighbours, can make a significant contribution to the promotion of a dialogue on energy between the EU and Russia. The European Commission has said it will consider the issue of the restriction of oil flow through Ventspils at the next subcommittee meeting on energy of the EU-Russian Partnership and Co-operation Agreement. It says it is ready to work with the Latvian authorities to resolve the problems related to oil transit.

Informační centrum Evropské unie při Delegaci Evropské komise v České republice

European Union Information Centre of the Delegation of the European Commission to the Czech Republic

Rytířská 31, 110 00 Praha 1, Česká republika

Tel.: (+420) 221 610 142 Fax: (+420) 221 610 144

e-mail: info@iceu.czhttp://www.evropska-unie.cz