The Week in Europe 02-08/07/03

EU news in brief

Italian Presidency begins

This is likely to be Italy's last rotating Presidency of the EU if the Member States adopt the Constitution, proposed by the European Convention, which proposes replacing the six-month presidency with a permanent president of the European Parliament. Under the current rules, Italy's next presidency in the enlarged Union of 25 Member States would be in 12.5 years.

Italy has set the following priorities:

· rebuilding EU-US relations after the fall-out over Iraq;

· opening an Intergovernmental Conference to negotiate the EU's new Constitution in mid-October;

· launching "Action for Growth", a programme to boost big infrastructure programmes in Europe finance by the European Investment Bank ("Tremonti plan" or "new deal");

· adopting new measures to combat illegal immigration and people trafficking, including building protection centres for immigrants outside EU territory;

· deepening co-operation the enlarged Unions's neighbours, notably the Middle East, North Africa, Russia, Ukraine, Belarus and Moldova.

For more information see:

http://www.ueitalia2003.it/EN/

Wider Europe : Commission to strengthen cross-border cooperation with new neighbours

The European Commission has proposed significant steps to improve the EU's interventions at its external borders after enlargement. This will significantly boost cooperation over 10,000 km of the EU's borders with Russia, Ukraine, Belarus and Moldova, the Western Balkans and in the Mediterranean. Between 2004 and 2006, existing instruments for cross-border cooperation such as INTERREG, PHARE-CBC, TACIS-CBC, CARDS and MEDA will be better coordinated through the creation of "Neighbourhood programmes" to be launched in 2004. This represents a major step towards a better implementation of joint projects on the external borders of the EU as the Commission foresees that €955 million could be reallocated for this purpose. For the period after 2007, the Commission highlights a number of options including the creation of a single New Neighbourhood Instrument in the next financial perspectives.

Council, Commission and European Parliament meet in Strasbourg on the 2004 budget procedure

Budgetary Trilogue: Commissioner Schreyer meets today with a delegation from the European Parliament's budgets committee chaired by Mr Wynn, and with the Council, represented by under-secretary Magri. The second regular trilogue meeting is part of the 2004 budget procedure and prepares the forthcoming conciliation taking place before the Council's first reading of the 2004 draft budget at the ECOFIN meeting on 16 July. Agricultural expenditure, international fisheries agreements and CFSP funding are major subjects on the agenda but discussions cover also administrative expenditure, adjustments for enlargement and the mobilisation of the emergency aid reserve.

Commission welcomes Parliament's Vote on Revision of Packaging and Packaging Waste Directive

The European Commission welcomes today's positive vote of the European Parliament on the revision of Directive 94/62/EC on Packaging and Packaging Waste. The revision more than doubles the minimum recycling targets. The key open question for conciliation is now the deadline by which the new targets must be reached.

The Packaging and Packaging Waste Directive has made the collection and recycling of packaging waste a normal activity in all EU Member States, and increasingly also in the Acceding States. In this way, the Directive has helped to reduce environmental impacts and to strengthen the Internal Market for packaging and packaging waste.

[Background paper IP/03/936]

Aflatoxins : Commission imposes special conditions for import of Brazil nuts in shell from Brazil

Following findings of high levels of aflatoxins, the European Commission decided today to impose special conditions for the import of Brazil nuts in shell originating from Brazil. Aflatoxins are carcinogenic substances produced by fungi which contaminate the nuts. Levels of more than 100 times the legal maximum level were found in Brazil nuts in shell from Brazil. In addition, an inspection by the Commission's Food and Veterinary Office in January/February 2003 revealed shortcomings in the production chain and control systems intended to prevent aflatoxin contamination in Brazil nuts intended for export to the EU. The special conditions agreed today include certification of all consignments by the Brazilian competent authorities and an additional control at import by the competent authority of the importing EU Member State. In addition, only designated points of entry may be used to import Brazil nuts and there are strict conditions for sending back non-complying consignments to the country of origin. In addition to reporting risks through the usual Rapid Alert System for Food and Feed, Member States will be required to make quarterly reports of the analytical results of their controls on imported Brazil nuts. The above measures will be reviewed in May 2004. The measures were decided in agreement with the Standing Committee for the Food Chain and Animal Health, consisting of representatives of the EU Member States.

eGovernment Ministerial Conference of July 7-8 : Reinforcing political commitment

More than 1000 people will participate in an eGovernement Ministerial Conference and Exhibition, to be held in Como on July 7-8. 31 Ministers from European Union countries as well as from future Member States, EFTA and other countries, have confirmed their participation. Mr. Erkki Liikanen, European Commissioner for Information Society and Enterprise, will attend the event together with Mr. Lucio Stanca, Italian Minister for Innovation and Technologies. Industry is also very much involved in this top-level meeting on eGovernment policy and practices, with several CEOs attending the Conference as speakers. In the context of the eEurope Action Plan, key European players will discuss how advanced technology can be further used to help provide more inclusive and personalised services and increase the productivity of public administrations. The main themes to be discussed include the impact of eGovernment on European competitiveness, building a more productive and transparent public sector, and how this “citizen-centric”, one-stop-shop approach helps not only the people dealing with administrations, but also the efficiency of administrations themselves. The most outstanding examples of best practice in this field will receive the “eEurope Award for Innovation in eGovernment” and a meeting of the Ministers present is expected to lead to a Ministerial Declaration. Special arrangements apply for Press Accreditation to this event. For more information see

http://www.e-govconference2003.org/en/n05_hp.php

[Background paper IP/03/943]

Foreign ownership and corporate income taxation : an empirical evaluation

A new study carried out by economists in the European Commission's Directorate General of Economic and Financial Affairs points that economic integration in Europe has not led to a 'race to the bottom' regarding corporate income taxes. This paper documents trends in the foreign ownership of companies in Europe and it examines whether foreign ownership has exerted a positive influence on corporate income tax levels. Using company-level data, we document that the foreign ownership share in Europe stood at around 21.5 percent in the year 2000. The estimation suggests that a one percentage point increase in foreign ownership increases the average corporate income tax rate between a half and one percent. Further international economic integration is likely to lead to higher foreign ownership shares with a concomitant positive influence on corporate taxation levels. Full document available on :

http://europa.eu.int/comm/economy_finance/publications/economic_papers/economicpapers185_en.htm

German Bundestag has ratified EU Accession Treaty

On 3 July, members of the lower house of the German parliament backed the EU's enlargement with 575 votes in favour, only one against and four abstentions. German Foreign Minister Joschka Fischer stated that enlargement was a "crucial step for the reunification of Europe". He underlined that the EU was an answer to "Europe's national and nationalistic confrontations".

Wolfgang Schäuble, vice-chairman of the opposition CDU/CSU party, urged the German government to negotiate an abolition of the disputed Benes decrees with the Czech Republic. The Benes decrees served as a legal basis to expel the ethnic Sudeten Germans out of Czekoslovakia in the aftermath of the second world war.

The Accession Treaty must still be passed by the upper house of the German parliament, the Bundesrat.

The Danish Parliament was the first among the 15 EU Member States to ratify the Accession Treaty on 4 June.

Enlargement news

EU Cohesion Policy in the Czech Republic: negotiations on the 2004-2006 programmes will start on 3 July in Prague

The European Commission today announced the launching of the first round of negotiations with the Czech Republic on future regional development programmes. Negotiations have started on 3 July in Prague with the Czech Republic. They are dedicated to the Community Support Framework (CSF) and related Operational Programmes (OP) for the period 2004-2006. In a letter of 25 June, addressed to Pavel Nemec, Czech Minister for Regional Development, Michel Barnier, Commissioner responsible for regional policy set out the Commission's position on how Structural Funds and the Cohesion Fund should be used in the Czech Republic. At beginning of March 2003, the Czech Republic submitted to the Commission its National Development Plan 2000-2006 and a first group of Operational Programmes and for Prague two Single Programming Documents. A second group of Operational Programmes was submitted in April.

In his letter Michel Barnier wrote: "The Plan represents a good basis for the negotiations that lie ahead. It is very important that the European programmes in the Czech Republic are a success. It therefore is all the more important that we reach an early agreement so that implementation on the ground can begin as soon as possible taking into account that eligibility of expenditure under these programmes starts on 1 January 2004".

During the negotiations, the Commission will seek to ensure a high level of coordination between the Cohesion Fund and Operational Programmes and Single Programming Documents. For more information, please consult following website:

http://europa.eu.int/comm/regional_policy/index_en.htm

[Background paper IP/03/937]

Applications pour in from acceding states for EU jobs

More than 37,000 applications have been received for the first round of recruitment of permanent EU officials from the ten future member states. The job opportunities were published in May, and by the closing date of June 24 the number of applications reached 37,908. For the positions as assistant administrators, most applications came from Poland - nearly 8,000, followed by Hungary (around 5,000), the Czech Republic and Slovakia (around 3,000). The majority opted for the competition for European public administration; economics was the second most popular choice, followed by law, and auditing.

More than 5,000 applied for posts of assistant translators, with the number of applications roughly proportional to the size of the populations. And more than 7,000 applied for positions of secretaries - with the national breakdown again roughly in line with population size.

The details of the number of applications are as follows:

Announcing the figures, the Commission attributed the "significant amount of interest on behalf of the accession countries' citizens" to "the successful political completion of the enlargement negotiations as well as the positive outcome of the different referenda in the accession countries". These are all entry-level positions, requiring no previous work experience. Further competitions for more senior posts will be launched at a later date. And there are already some staff from the acceding states working in temporary auxiliary positions. See http://europa.eu.int/epso for details of careers in the EU Institutions.

Better transport links urged to new member states

A high-level group of experts proposed last week that priorities should be shifted in the trans-European transport network - and one of its key findings is that links to the future member states should receive more attention and more funding. "The economic catching-up of numerous regions, in particular in the future new Member States, will depend on good access to the major European axes, efficient interconnections, and in particular good cross-border connections", the report says. The conclusions, handed over to European Commission Vice-President Loyola de Palacio on June 30, urge that by 2010, work should start on the selected links to the new member states in central and eastern Europe and beyond, with a target completion date of 2020.

The list includes eliminating bottlenecks on the Rhine-Main-Danube (including the Vienna-Bratislava section, and bottlenecks in Bulgaria and Romania), creating "motorways of the sea" from the Baltic Sea to western Europe, and linking the western Mediterranean with Malta), rail links between Lyon-Trieste and Koper-Ljubljana-Budapest, from the Greek/Bulgarian border running through Sofia-Budapest-Vienna-Prague-Nürnberg, from Gdansk-Warsaw to Brno-Zilina, and from Paris-Strasbourg-Stuttgart to Vienna-Bratislava, and motorways from the Greek/Bulgarian border linking Sofia, Nadlac, Budapest and Constanta, and on the Gdansk-Katowice-Brno/Zilina-Vienna route.

Further projects selected with a longer term time horizon include the Rail Baltica project to link Helsinki-Tallinn-Riga-Kaunas-Warsaw, a dedicated freight railway line Gdansk-Bydgoszcz-Katowice-Zwardon. Further down the list of priorities come multimodal logistic centres in Slawkow (Poland) with connections to the Russian gauge rail network, a Bari-Durres-Sofia-Varna/Bourgas rail link to the Black Sea, improving port and road access at Limassol, Larnaka, Valletta and Marsaxlokk, a Dresden/Nürnberg-Prague-Linz motorway, a Prague/Linz rail link, a motorway linking Zilina-Bratislava-Vienna, a Maribor-Graz rail link, and a motorway linking Ljubljana-Maribor-Pince-Zamardi-Budapest.

The lists were compiled from some 100 projects submitted by member states and acceding countries. All selected projects are on a main trans-European axis of the enlarged Europe. And the group recommended that this initial identification should be completed by a more detailed analysis of traffic flows in a Union of 27 countries, so as to define and continuously refine a core network. The group also regretted what it called "serious under-investment and inadequate EU financial support" for transport networks so far.

Bulgaria closes another chapter

Bulgaria closed the environment chapter in its EU accession negotiations, right at the end of the Greek EU Presidency. Altogether, eight transitional periods were granted by the EU, the longest being up until 2014 for full compliance with EU rules on urban waste water treatment, on landfilling of liquid waste for certain installations, and on the limitation of emissions of certain pollutants into air from large combustion plants. The transitional provisions Bulgaria has been granted are largely comparable to those granted to the ten acceding states in the negotiations they completed last year. This leaves Bulgaria with just five substantive chapters to close (in addition to the "catch-all" chapter of miscellaneous subjects). Three of the chapters have a significant money-related content - regional affairs (which includes arrangements for EU structural and cohesion funding), agriculture (which includes questions of quotas and direct payments to farmers), and financial and budgetary provisions (covering what Bulgaria will have to pay as a member state, and what it may receive from the EU). The two other chapters are justice and home affairs, and competition. Bulgaria is keen to complete all its negotiations during 2004 - which it sees as vital if it is to keep alive its hopes of joining the EU by its target date of 2007.

Slovenia claims it is well on the way to accession

Slovenia says it is in the final stage of the alignment with the acquis and fulfilling the commitments it has undertaken in its accession negotiations, according to the June 2003 report its government has compiled on its progress towards joining the European Union. "Slovenia has already successfully transposed several chapters of the acquis, it has the administrative capacity to implement it, and it meets the criteria for EU membership", says the June report it has just submitted to the European Commission, as its contribution to the final report on the acceding states that the European Commission is due to produce in November. But Slovenia acknowledges that "in the period until the actual accession to the EU there is still work to be done in those areas where, due to the complexity and scope of the acquis involved and its ongoing developing, the alignment process has not been finished yet." The report contains details of acceleration of the handling of court cases (the number of pending court cases of major importance "has followed a constant downward trend ever since 1998" and now shows a decrease of 30% since then), privatisation (the government adopted in January this year a new quarterly time-plan on completing the denationalisation process, which is running close to schedule, and should be completed in the second half of 2004), and legislative and institutional measures aimed at combating corruption, improving public administration, employment policy, social security reform, and ensuring adequate administrative capacity across the full range of the acquis. It also highlights the amendment in February this year to the Slovenian Constitution, which will allow Slovenia to accede to, and subsequently to act within, the EU. And it notes that while economic growth in Slovenia was only slightly higher in 2002 than in 2001, "its structure changed considerably in favour of a higher domestic demand, in particular because of renewed increase in investments, which were largely oriented towards highway construction". Real growth in exports was also high, and Slovenia maintained "a relative stability of its economy". A gradual acceleration of economic growth is expected in 2005-2007 to reach 4.5% in 2007.

What will enlargement mean for defence industries?

The impact of security policy on industry and civil society in the enlarged European Union is under study in the newly-constituted industrial change commission of the European Economic and Social Committee. Part of the objective is to anticipate problems linked with rapid integration of the acceding states into common European security and defence policy structures - and particularly into the internal market of the military equipment industry and related research. The opinion will assess how enlargement can help - or hinder - the achievement of the recognised EU aim of strengthening its industrial potential in this sector. It will look at the transition economies' achievements under the 1990s Konver programme for industrial restructuring and conversion to civilian uses of military industries, and the implications of NATO's enlargement to the east - particularly the effect on the military apparatus and equipment of the new EU member states.