Week in Europe 1-7/10/03

EU news in brief

Historical event has begun

The Italian EU Presidency launched the new Intergovernmental Conference (IGC) on 4 October. The aim is to improve the transparency and efficiency of the enlarged Union by giving it a new Constitutional Treaty. The IGC is scheduled to conclude with a last meeting session on 12-13 December 2003, giving the Union a new Treaty of Rome.

It is the first opportunity for the EU-25 to test their ability to work together. There are a number of sticking points in this debate, including:

The number of Commissioners the Convention proposed the reduction of voting Commissioners to 15 from the current 20, while it would allow for the creation of 15 non-voting Commissioners.

Weighted votes in the Council the Convention would simplify the system of qualified majority voting proposed by the Nice Treaty, by defining qualified majority as the majority of Member States representatives and 60 per cent of the EU population.

Foreign minister the new position of foreign minister would be created to conduct the EU's common foreign and defence policy, combining the current roles of foreign policy high representative and the external relations commissioners (with financial resources). The new foreign minister would be a member of the Commission but would be answerable to the Member States.

Council presidency the Convention draft proposes an end to the rotating EU presidency and the creation of the post of a 'permanent' Council President, to be appointed for a period of 2,5 years, which mandate could be extended to five years. The foreign minister would chair the Foreign Ministers' Council; finance ministers would elect their own chairman and teams of countries would share the chair of other sectoral ministerial councils.

Security and defence policy the Constitution draft contains a solidarity clause calling for mutual assistance in case of a terrorist attack. The draft gives the opportunity to those states that wish to move toward a closer cooperation, the option to do so.

Reference to God Some Member States, including Poland, Spain and Italy are pressing for a reference to Europe's Christian heritage in the new Constitution. Other strictly secular countries, such as France, oppose this idea. For more information see www.euractiv.com.

Road Safety: a new push through new technologies

The Commission has adopted the eSafety Communication, laying down a set of measures for supporting the industry in developing safer and more intelligent vehicles and enabling their rapid introduction into the market. The goal is halving the number of road deaths in Europe by 2010. To achieve it, the European Commission proposes the broad deployment of advanced information and communication technologies (ICT) in cars. The general framework for Community actions regarding road safety had been presented in a recently adopted Road Safety Action Programme. The adopted eSafety Communication is based on extensive consultations with industry and other players. It builds on the Action Programme by bringing forward many detailed actions to improve the use of ICT in vehicles. These measures will potentially affect all types of vehicles in the future and are important for all road users. More information: http://europa.eu.int/information_society/programmes/esafety/index_en.htm

[Background paper IP/03/1301]

One Billion Euro for the success of Information and Communication Technologies in Europe

The Union's priority for R&D in Information Society Technologies (IST) aims to bring technologies closer to people, ensuring that all Europe's citizens and businesses can, and actually do benefit from technological advance. As a result of the first IST Call for Proposals under the sixth Framework Programme, the Commission's Information Society Directorate-General will be launching 236 new IST projects to the tune of 1 billion Euro of Community funding. This represents the largest award of its kind in the history of the Framework Programme. For further information see: http://www.cordis.lu/ist

[Background paper IP/03/1298]

Commission adopts a communication on the role of eGovernment for Europe's future

26 September: The Commission today adopted a communication signalling the importance of eGovernment as a means of achieving world-class public administration in Europe. As part of the Lisbon strategy, eGovernment is seen as providing a major economic boost by providing new and better services for all citizens and companies of Europe. The Communication calls upon Member States to express their political commitment to co-operation at European level spanning both the private and public sector, to accelerate the take-up and development of eGovernment. It presents a set of actions that reinforce the eGovernment priorities currently being addressed within the eEurope 2005 Action Plan. Further information about the EU communication on eGovernment, is published at:

http://europa.eu.int/information_society/eeurope/2005/all_about/egovernment/index_en.htm

[Background paper IP/03/1300]

Financial reporting: Commission adopts Regulation endorsing International Accounting Standards

The European Commission has adopted a Regulation endorsing International Accounting Standards (IASs), including related interpretations (SICs), and therefore confirming the requirement for their compulsory use from 2005 under the terms of the general IAS Regulation adopted by the European Parliament and the Council in 2002 (see IP/02/827, IP/01/200, MEMO/01/40). The Commission's adoption of this implementing Regulation follows the Accounting Regulatory Committee's unanimous endorsement of IASs in July. It includes all existing IASs and SICs, except for IASs 32 and 39 and related SICs 5, 16 and 17. IAS 32 and 39, which deal with the accounting and disclosure of financial instruments, are not included because they are currently in the process of being revised by the International Accounting Standards Board (IASB), in co-operation with European accounting experts.

[Background paper IP/03/1297]

Loyola de Palacio stresses importance of single market for ensuring EU's energy supply

Responding to questions on the recent blackout in Italy, Loyola de Palacio, European Commission Vice-President in charge of energy and transport, pointed out that the legislative package on the European single market in energy, adopted in July 2003, was specifically designed to prevent such situations: "by creating a single market we will interlink the whole of the EU's territory and end the isolation currently suffered by a number of countries," she explained. "Our electricity network is suffering chronic congestion in several regions of the Union, bottlenecks are becoming increasingly worrying and some parts of the European Union are still poorly connected, if not completely isolated. Our need for energy is growing and we are increasingly dependent on external sources of energy, especially for gas; it is time we gave a truly European dimension to the Union's energy infrastructure," she said. "That is precisely the point of creating the single market, in which every component is not just important but essential: opening-up and integration to increase service quality and competitiveness; regulation of public service obligations and security of supply to guarantee the requisite investment; interconnection and creation of infrastructure of European importance to allow trade and to open up Europe's isolated regions," the Commissioner explained. For more information see:

http://europa.eu.int/comm/energy/electricity/index_en.htm

[Background paper IP/03/1302]

New rules for car sales and servicing

On 1 October, a major part of the new EU rules on motor vehicle distribution that entered into force on 1 October 2002 will become effective. On 1 October 2003 the transitional period for all contracts that expired after 1 October 2002 ends. After a further transitional period, on 1 October 2005, the so-called location clause will be abolished, finally making the new rules fully effective. The new rules that will become effective as of 1 October 2003 open the way to new distribution techniques, such as Internet sales and multi-branding introducing more competition between different retail channels. The new rules also tear down residual barriers to cross-border purchases and allow dealers to place advertisements or mail shots throughout the single market. Car owners will have a wider choice of after sales service providers be it through authorised repair shops or fully independent repair shops. No repair shop may be prevented from servicing several brands and repair shops will no longer be obliged to operate a dealership as well.

[Background paper IP/03/1318]

Commission outlines road map for European Initiative for Growth

The European Initiative for Growth considered by the European Council in Thessaloniki has slowly but steadily climbed to the top of the political agenda across Member States. Since its initial outline last July the Commission has made quick progress on a series of policy and legislative proposals in the fields of Trans European Networks (TENs) and European Research, Development and Innovation. The Commission is now proposing a detailed road map for action and a series of recommendations to the October European Council. The European Initiative for Growth aims to mobilise investment in two key areas of the Lisbon agenda: networks and knowledge. More has to be done in the short term, from now until 2010, and more has to be done beyond that date. Unlike previous attempts it presents an integrated approach of policies, delivery mechanisms and institutional arrangements to ensure implementation within a tight time period. The timing of the launch of the Initiative is aimed at sending a powerful signal of strong economic governance and of confidence in the potential of the European economy. A signal in support of key structural reforms that must be accelerated in the framework of the Lisbon agenda. The European Council of December 16-17 will examine the European Initiative for Growth and its complete list of proposals for action.

[Background paper IP/03/1321]

Commission takes decision on reorganisation of Eurostat

In line with the undertaking given by Mr Prodi on 25 September before the European Parliament, the Commission om 1 October adopted a new organisation chart for Eurostat. The reorganisation derives from the strategy proposed for Eurostat by Commissioner Solbes on 23 July and reflects the conclusions and recommendations set out in the reports by the Internal Audit Service and the Task Force on Eurostat. The aim is to rise to the dual challenge of ensuring the continued operation of Eurostat in accordance with its mission statement and its work programme and implementing and following up certain measures contained in various audit reports on the financial management of Eurostat. Other measures to be put together in an action plan for 2004 are currently being prepared and will be presented before the end of the year. The reorganisation is to take effect on 1 November 2003.

[Background paper IP/03/1320]

Eurostat news releases

Flash estimate - September 2003 Euro-zone inflation estimated at 2.1%

Euro-zone1 annual inflation2 is expected to be 2.1% in September 2003 according to a flash estimate issued today by Eurostat - the Statistical Office of the European Communities in Luxembourg. It was 2.1% in August 2003.

[Background paper STAT/03/112]

Enlargement news

Acceding states' flaws "will be solved by accession"

The European Commission's November monitoring reports on the ten countries joining the EU in May 2004 will point up continuing challenges in EU preparations but the problems will be solved before accession takes place, European Enlargement Commissioner Günter Verheugen told the European Parliament foreign affairs committee last week. "Enlargement will be a success", he insisted and, he said, he was convinced more than ever that the EU had timed enlargement exactly right. The reports, which will be presented to the Parliament on 5 November, will show that preparations for accession are proceeding as planned, said the Commissioner.

At this stage, acceding states "still have some work to do", Verheugen recognised. Cyprus will have to sort out problems in the fields of asylum, maritime safety and energy policy. The Czech Republic will have to improve its performance on freedom of movement, some aspects of its agricultural policy, fiscality and financial control. Estonia needs to work on its social policy - labour policies and equal treatment of men and women - and fisheries. Hungary must take further measures on some aspects of its agricultural policy and financial control.

Latvia needs to act in the fields of free movement, notably on the mutual recognition of qualifications in the health sector, animal health, fiscality, automation of customs procedures and financial control. Malta should align its competition and fiscal policies more with EU legislation. Poland still shows shortcomings in the free movement of goods and of services, some aspects of its agricultural policies, fisheries, social policy, culture and audivisual media, customs and financial control. And Slovakia still has problems with the freedom of services, some aspects of its agricultural policy and regional policy.

Verheugen also conceded that police corruption and the trafficking in young girls in the Czech Republic were a continuing problem, and he urged the German and Czech governments to take more vigorous action.

Enlarging Europes transport networks "will boost growth"

Boosting the competitiveness of the enlarged European Union is the underlying motivation for European Commission proposals last week for enlarging Europe's transport networks. It proposed a series of priority projects costing €220 billion including the extension of the major routes to the future member states.

The list includes the rail links from Lyon and Trieste to Koper, Ljubljana, Budapest and the Ukrainian border, from Paris to Vienna and Bratislava, the Athens-Sofia-Budapest-Vienna-Prague-Nurnberg-Dresden route, the "Rail Baltica" line linking Warsaw-Kaunas-Riga-Tallinn, and the Gdansk-Warsaw-Brno-Bratislava route, with branches to Katowice and Zilina and Nove Misto. The motorway from Igoumenitsa and Patra via Athens, with its links to Sofia and Budapest, and branches towards Bucharest and Constanza, is due for completion by 2010, as is the motorway linking Gdansk-Brno-Bratislava-Vienna. And work on the Rhine/Meuse-Main-Danube inland waterway route is also given high priority, including the cross-border section from Vienna to Bratislava, the section between Palkovicovo and Mohŕcs, and dealing with bottlenecks in Romania and Bulgaria. Proposals for "motorways of the sea" include links between the Baltic Sea member states and member states in central Europe, connections from the Adriatic Sea to the Ionian Sea and the Eastern Mediterranean, including Cyprus, and connections from south-west Europe to Malta and south-east Europe.

"The trans-European networks are a motor and precondition for Europe's economic development and cohesion", said European Transport Commissioner Loyola de Palacio. New rules and structures were also proposed to attract more funding to the priority projects.

This "should help to make enlargement a success and provide the Union with a new opportunity to reduce congestion and encourage inter-modality", said de Palacio. The proposal (see IP/03/1322) follows up the report earlier this year by the High-Level Group on the TEN-T chaired by Karel Van Miert, and is part of the European growth initiative designed to mobilise new investment in the trans-European networks and in research, development and innovation in order to boost the competitiveness of the Union.

Strengthening European industry after accession

European industry - and particularly manufacturing industry - "is having to cope with sweeping changes, including the introduction of the euro and enlargement." And it merits fuller support from the European Union so that it prospers after accession, according to a report adopted last week by the European Parliament's industry committee.

The report, on industrial policy in an enlarged Europe, will be debated in plenary session later this month.

"Given the scale of enlargement and the striking difference between the industrial fabric of the EU of 15 Member States and that of the applicant countries, industrial policy must be addressed as a matter of urgency, so that the potential to be derived from expanding the European market to include millions of new consumers, workers and entrepreneurs can be realised to the full, whilst ensuring that the inevitable and necessary adjustments and restructuring are handled to the best possible effect", it says.

The committee input to the discussion also includes a warning about the risks from taking the wrong approach to the challenge: "Strategies for economic development based on the competitive advantage of social dumping, particularly with regard to wages, will prove to be a hindrance for sound economic development".