The Week in Europe 08-14/12/00

The Week in Europe 08-14/12/00

Brief news on enlargement

Nice summit agrees reforms to prepare for enlargement

Treaty reforms to pave the way for enlargement of the EU were agreed at the nice summit on 7-9 December. The European Council, which brought together the heads of state or government of the 15 Member States, decided on institutional changes in three main areas. First, qualified majority voting in the Council of Ministers will be extended to 35 more areas. These include trade in some services, aspects of asylum and immigration policy, regulation of the European Court of Justice, and decisions on senior appointments (such as President of the Commission). However, decisions on most issues will continue to require unanimity, including taxation, social security and aspects of the latter related to border controls. Second, the number of votes for each EU country will be changed and take account of new members. The total number will rise from 87 now (15 Member States) to up to 342 (with 27 Member States). The UK, Germany, France and Italy would have 29 votes each, followed by Spain and Poland (27 each). The total needed for a qualified majority would increase from 62 to 255, and for a blocking minority from 26 to 88. Third, the Commission will be composed of one member from each country, up to 27. Other areas of reform include the Treaty allowing groups of countries to work together more closely on common goals (enhanced cooperation), with provisions to stop the risk of fragmentation. The Treaty changes are subject to ratification by each Member State. Further areas identified for future discussion include the closer definition of the competences of the EU and Member States, and the role of national parliaments. Another Inter-Governmental Conference is scheduled for 2004. The European Council reaffirmed the political priority it places on enlargement and the aim of being able to welcome new Member States from the end of 2002. It welcomed the stepping-up of accession negotiations and backed the strategy put forward by the Commission. The Gothenburg Summit on 15-16 June 2001 will review progress and, with the December 2001 meeting, provide guidance for completing the process successfully. The heads of state or government from the candidate countries met their counterparts from the Member States in Nice. In addition to the institutional reforms and enlargement, the Charter of Fundamental Rights was proclaimed jointly by the Commission, Council and Parliament. The European Council undertook its usual review of progress across EU policy areas, too. These included the common European security and defence policy, on which it asked for decisions to make the system operational to be taken as soon as possible in 2001. The summit approved the European Social Agenda, with its priorities for the next five years, and agreed a way forward for a proposal for a European company statute. Economic and employment policies were reviewed, ahead of the Stockholm summit in March, the first regular spring European Council devoted to economic and social matters. The decision was also taken to move gradually towards holding European Council meetings in Brussels. The meeting called for a European Food Safety Agency to be established by 2002, and noted measures taken recently to combat BSE. It regretted the lack of progress on international talks on climate change. Finally, discussion of foreign affairs concentrated on the Mediterranean, the western Balkans and development policy. The draft Treaty of Nice will is available at

http://europa.eu.int/comm/nice_council/index_en.htm where the Conclusions of the European Council can also be found.

Limited progress, says Prodi

The hard-won conclusion of the Nice summit, complex and lengthy, was an achievement in itself, Commission President Romano Prodi said on 12 December. He recognised many positive steps, such as the endorsement of the enlargement strategy, but regretted that the defence of immediate interests had detracted from a long-term vision for Europe. The final aim of the Nice summit was, and remains, the reunification of Europe, Prodi told MEPs in Strasbourg. Looking further ahead, he said that the Commission would put forward proposals to feed into discussions on further improving the institutions and decision-making, as agreed in Nice. Whatever its shortcomings, the summit had been a step in the right direction, for making Europe into a wide area of peace, stability and greater economic potential.

[Background text: SPEECH/00/499]

A click closer for '.eu' websites

The '.eu' domain name on the Internet came a step closer on 12 December, when a registry to run the system was proposed by the Commission. The plan involves creating the framework in EU law for the registry, along with the necessary policy measures. The Commission would be responsible for policies to deal with speculative and abusive registrations of names and for procedures to resolve disputes. Other specific issues, dealing with second-level domains (such as '.press.eu' '.event.eu'), for example, could be handled by the registry itself. The Commission is in regular contact with ICANN, the global body that regulates Internet naming policy, to ensure that the '.eu' top-level domain can come into being once the registry is in place. The move would enable more Internet names to be registered and encourage use of the '.eu' suffix to designate European organisations, Commissioner Erkki Liikanen said. [Background text: IP/00/1444]

· Telecom regulators must ensure that new operators can install equipment at local exchanges, according to a review of telecom liberalisation in the Member States, published on 7 December. It also highlights other areas of competition that need to be addressed, as well as substantial progress in the market. [Background text: IP/00/1424]

Nielson visits Yugoslavia

Commissioner Poul Nielson visits Serbia, Kosovo and Montenegro on 11-15 December, for meetings with political leaders and international agencies. He said it was important to consolidate the shift seen in relations with the Federal Republic of Yugoslavia since the fall of the Milosevic regime. One aim was to prepare the way for even closer cooperation, he added. The Commission announced a 200m euro(CZK 6916.4m) emergency aid package for Serbia in October. It includes support for energy supplies, medicine and foodstuffs, as well as continued humanitarian aid for refugees and displaced people.

[Background text: IP/00/1430]

ICI fined 10m euro over price plan

The Commission has reimposed a 10m euro (CZK 345.82m) fine on ICI for unfairly using discounts to prevent competition in sales of soda ash, which is used to make glass. ICI, along with Belgian company Solvay, operated a two-tier pricing system that offered top-up supplies at substantial and secret discounts (almost half-price in some cases). It was made clear that this offer depended on customers taking most, if not all, of their core tonnage from the dominant producer at the normal price. Customers might otherwise have bought the additional soda ash from a rival supplier, which, to compete effectively, would have had to offer very large discounts on the entire sales volume (rather than just the 'top slice'). The European Court of Justice in April annulled fines imposed in 1990 for these serious infringements of EU competition law, for purely procedural reasons. [Background text: IP/00/1449]

Tonic for EU drug companies?

The 'competitiveness gap' of the EU drug industry compared to its US rivals came under discussion on 11 December in Brussels. A meeting of stakeholders, including policy-makers, industry heads and politicians, examined this problem, drawing on a report written by a team of experts. Key themes were the impact of the single market on pharmaceuticals, and effects of the structure of markets in the EU. The influence of biotechnology in medicine, and interactions between industry and academia were also discussed.

The report, Global competitiveness in pharmaceuticals, a European perspective is at

http://pharmacos.eudra.org/pharmacos/docs.htm#news [Background text: IP/00/1437]

Mandatory seatbelts proposed

The use of seatbelts would be compulsory for all vehicle users, wherever fitted and throughout the EU, under a Directive proposed on 11 December. It would also require the provision and use of child seats or other restraints for children. These changes, which are part of a strategy to cut road deaths and injuries by spreading best practice, would end the exemptions currently used in some EU countries. Research has shown that travellers benefit most from other safety measures, such as airbags and stronger truck cabs, if they are wearing seatbelts.

[Background text: IP/00/1440]

Chernobyl nuclear power station is due to close on 15 December. A $585m Euratom loan has been approved to help finance two replacement units.

[Background text: IP/00/1458]

High standards for blood and blood products, with rigorous safety rules, would apply throughout the EU under a proposal made on 13 December.

[Background text: IP/00/1455]

Loans to help small businesses in the Central and Eastern European candidate countries will be supported by a 134m euro (CZK 4634m) EU scheme [Background text: IP/00/1436]

Aker Maritime is limiting its stake in Kvaerner to 17.8%. Having opened an inquiry under EU rules, the Commission will now take no further action.

[Background text: IP/00/1445]

Diary Dates

European Parliament session 11-14 December Strasbourg

Health Council 14 December Brussels

Fisheries Council 14-15 December Brussels

EU-US summit 18 December Washington

Environment Council 18-19 December Brussels

EU-Canada summit 19 December Ottawa

Agriculture Council 19-20 December Brussels

Transport Council 20-21 December Brussels

Enlargement news

Summit provides words and deeds for enlargement

By agreeing - at last - on a Treaty of Nice, the EU member states removed the last formal obstacle to moving ahead with the EU enlargement process. The agreement on a treaty came late, and its details lack much of what had been hoped for by the Presidency, the Commission, and the Parliament. But in the view of nearly everyone, it is enough to allow enlargement to go ahead.

The summit broadly endorsed the enlargement strategy proposed by the Commission, and emphasised "the principle of differentiation, based on each candidate country's own merits", and "allowance of scope for catching up". Those countries which are the best prepared will continue to be able to progress more quickly, the summit concluded.

Now, the EU says it will be "in a position to welcome those new member states which are ready as from the end of 2002, in the hope that they will be able to take part in the next European Parliament elections" - which are scheduled for mid-2004.

In a bid to alleviate some of the most acute EU concerns over enlargement, EU leaders in Nice also called on the Commission "to propose a programme for the frontier regions in order to strengthen their economic competitiveness."

Enlargement news in brief from Nice

Prague had its own taste of the Nice summit when about 50 anarchists and anti-globalization protestors occupied the Czech offices of the European Union on Wednesday to protest the EU summit.

According to Estonian foreign minister Toomas Ilves ”Slowing down enlargement, waiting around for some kind of big bang in some distant future, is something which will harm those governments that have taken the political risks to move ahead. The message it would send by slowing down enlargement is that it doesn't really matter, dont reform, it makes no difference, we are going to wait around and eventually you will get in."

The European Conference is going to be kept alive, "as a useful framework for dialogue between the Union's member states and the countries in line for membership", decided EU leaders. But they proposed widening it still further, "so that the countries covered by the stabilisation and association process and the EFTA countries be invited to attend as prospective members".

Improvement of financial control

Co-ordination of EU assistance to supreme audit institutions of the EU candidate countries needs to be improved "to avoid conflicting signals and duplication of work", according to Budget Commissioner Michaele Schreyer.

The Commission sees the decentralised implementation of the pre-accession aid instruments, which require reliable financial control systems, as "a testing phase for the implementation of structural policies after accession".

The subject also features prominently in the enlargement negotiations - in the chapter on financial control. At the same time, since the start of negotiations, co-operation has been extended, through bilateral agreements, to a Contact Group of European Financial Control Organisations bringing together the Commission, the Member States and the candidates, and an information network. As a result, most candidate countries have been able to set out a comprehensive concept of Public Internal Financial Control. Subsequently they have been able to adopt the relevant legislation and rules setting up the structures and laying down procedures of internal control and audit throughout Government.

If a candidate has prepared the conceptual and legislative aspects successfully, and has gone far enough in establishing the necessary institutional framework, the chapter will be provisionally closed and will lead to EU authorisation of fully decentralised implementation of EU aid.

Fischler insists on progress in agriculture

At the top of the current key issues in the agriculture negotiations, ", European Agriculture Commissioner Franz Fischler highlighted, in Denmark on 7 December, the call from all the candidate countries for direct payments. No direct payments are provided for in the period to 2006, he pointed out, and in any case, "immediate and complete application of our direct payment system upon accession would be counterproductive, since it could hamper the reform attempts that are currently being carried out in countries like Poland and Romania". He made clear, however, his belief that "In the long run, it would be unacceptable to have two different agricultural systems: one in the EU and one in the new member states from central and eastern Europe. After the transition period our system will apply in full to the accession countries as well".

Another of the major challenges lies in the many transitional measures requested by candidates, on which he indicated the EU would take a tough line in its negotiations, and would insist - for the veterinary and phyto-sanitary acquis - not only on full transposition into national legislation, but also on the strengthening of administrative structures and procedures. And the third challenge remains in determining how the CAP will be applied in the candidate countries, particularly as regards supply management. The question of which reference period to take for the fixing of quota and production ceilings is yet to be agreed, "but our view is that a recent period is most appropriate".

Representatives of EU bank employees and employers were in Prague last week for a round table with their Czech counterparts on the social dialogue and social affairs. The purpose of this round table is to encourage the dialogue between employers and employees in this EU candidate country.

Enterprise culture in candidate countries is still struggling for recognition, and government officials do not always give enough priority to development of the small and medium-sized sector. This is the conclusion of a European Training Foundation report entitled "Entrepreneurial training for the growth of small and medium-sized enterprises - Lessons from Central and Eastern Europe". It says that after an initial spurt of new business creation in the early 1990s there has been a slow-down in the rate of growth of new businesses in many transition economies. One reason for the slow-down in some countries, the report suggests, is the quality of training entrepreneurs receive.

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