The Week in Europe 05-11/03/03

13.03.2003 | Euroskop

The Week in Europe 05-11/03/03

EU news in brief

Statement by Romano Prodi on the outcome of the referendum in Malta

On 9 March, Romano Prodi, President of the European Commission, reacted as follows to the results of the referendum in Malta on its membership for the European Union : "I welcome with special satisfaction the decision of the people of Malta confirming their entry into the European Union. This vote is a positive signal for the ratification process of this enlargement. This is a historic choice which will have a lasting impact for the future of Malta for generations to come. This is a choice for stability and growth, as well as for the peaceful reunification of Europe and the European people. Malta will participate with equal rights and equal obligations in European decision-making. The European Union is a Union of minorities, where no country has a majority. The Union is a unique case in world history in terms of respecting the rights of all its members, irrespective of whether they are big or small. To the Maltese I say «We welcome you wholeheartedly. We are very much looking forward to your concrete contributions to our common development».

Political and resource framework for 2004: the Commission's Annual Policy Strategy for the year of accession

The Commission adopted its Annual Policy Strategy Decision for 2004. This sets out a clear political and resource framework for 2004 that will guide the preparation of the Preliminary Draft Budget and operational planning. The central political priority is the start of the enlarged Union's work. The two connected priorities are stability and sustainable growth. All three priorities provide continuity with the Commission's priorities for 2003.

Presenting the political aspects, President Romano Prodi commented :

"Agreeing and making a success of enlargement has been my priority since I became Commission President. Today we have set out important measures to prepare for the new Member States to join the European Union next May. In our Annual Policy Strategy, we have identified our political priorities for 2004, which we will follow through in planning and resource allocations. These are to: Manage the accession process correctly; Develop stability at the borders of the European Union and beyond; Ensure the foundations are in place for sustainable growth. I look forward to discussing these political priorities with Parliament and Council."

[Background paper IP/03/321]

The Commission prepares Union finances beyond 2006

The internal roadmap for preparing the Union's financial framework after 2006 has received the Commission's approval. The roadmap sets out a timetable and internal arrangements for the preparatory work, centred on working groups chaired by Commissioners on the policy themes of peace (Mr Lamy), freedom and European citizenship (Mr Byrne), freedom and sustainable prosperity (Mr Monti), solidarity (Mr Barnier), administration (Mr Kinnock) and resources (Mrs Schreyer). The reflection will cover the expenditure and financing side of the budget. The Commission plans to present a Communication to the budgetary authority on the broad orientations for the next financial framework by the end of 2003 and to present by mid-2004 the legislative proposals covering policy changes relating both to expenditure and revenue aspects.

[Background paper IP/03/326]

Commission indicator forecasts euro area quarterly GDP growth of -0.1 to 0.3% for 1st quarter and 0.2 to 0.5% for 2nd quarter of 2003

The indicator-based model for quarterly GDP growth for the euro area developed by the European Commission's Directorate General for Economic and Financial Affairs, forecasts a range of -0.1 to 0.3% for GDP growth in the first quarter of 2003. Weak private consumption, contracting activity in the construction sector and a bleak international environment account for this forecast. For the second quarter of 2003, the model suggests growth in the range of 0.2% to 0.5%. The latter estimate is the result of a relative stabilisation of the indicators used in the model. However, these forecasts are surrounded by an unusual degree of uncertainty related to the war fears in the Middle East. Previous releases of the indicator-based model forecasts can be found on:

http://europa.eu.int/comm/economy_finance/indicators/euroareagdp_en.htm

[Background paper IP/03/331]

Energy: issues, options and technologies - a survey of public opinion in Europe

European Research Commissioner Philippe Busquin presented the findings of the EUROBAROMETER survey on "Energy: Issues, options and technologies". The survey is based on interviews with some 16 000 citizens from the 15 EU Member States. How do European citizens imagine energy in the future? What are the priorities, individual preferences and patterns of energy use? Most Europeans are aware of the growing energy needs of their countries. They also recognise the EU is critically dependent on external energy supply. But they are not inclined to change their energy consumption patterns. They therefore call for further research into new energy sources, such as nuclear fusion, and for the development of new energy-saving technologies. For further information please visit:

http://europa.eu.int/comm/research/energy/index_en.html

[Background paper IP/03/336]

Preliminary result of the budget year 2002 : important reimbursements to the member states

About € 7 billion have been left over from the budget exercise 2002, resulting in a reduction of the financing by Member States of around € 6 billion compared to the 2003 EU budget as adopted last December. This preliminary result can be announced very early thanks to the Commission's automatic accounting system, which allows consolidation of results from different spending departments. Budget Commissioner Michaele Schreyer will present this still preliminary figure to the ECOFIN meeting : "This money will reduce the Member States' contributions to the 2003 budget and thus alleviate the national budgets in these economically difficult times. Finance Ministers should receive it as good news."

[Background paper IP/03/338]

Market abuse: Commission publishes three working documents concerning the first implementing measures for Market Abuse Directive

The European Commission's services are making public three working documents related to the Directive 2003/6/EC on insider dealing and market manipulation (market abuse) (see IP/02/1789). These working documents have been drawn up following advice given to the Commission by the Committee of European Securities Regulators (CESR) at the end of 2002 after an extensive consultation process. These working documents are being published on the European Commission's website

http://europa.eu.int/comm/internal_market/en/finances/mobil/market-abuse_en.htm to continue the open and transparent regulatory process for drawing up technical implementing measures. This is the first time the Commission has published such working documents as part of the procedures agreed to implement the March 2001 Stockholm European Council Resolution to improve decision-making concerning securities markets (the so-called "Lamfalussy process" see IP/02/195).

Commission publishes updated set of Structural Indicators ahead of the Spring European Council

The European Commission has published the updated set of Structural Indicators which support the assessment of progress within the Lisbon strategy of economic, social and environmental renewal. The provisional set of indicators was published alongside the Commission's Spring Report last January in a Commission Staff Paper. They included for the first time coverage of the future Member States and candidate countries. These data have in the meantime been confirmed and completed, allowing for gaps in the data to be filled and in some cases additional years to be covered. The new data reflect the situation on 17 February 2003. The Structural Indicators are also updated on line on a regular basis throughout the year. The European Council will meet on 21 March to assess the progress made towards the goals set out in the strategy agreed at the Lisbon Council in March 2000 to make Europe the most competitive economy in the world by 2010. Its work draws on the Commission's Spring Report. Further information concerning the Lisbon Strategy, as well as copies of the Spring Report and the updated Indicators Annex can be found on:

http://europa.eu.int/comm/lisbon_strategy/index_en.html

The complete set of Structural Indicators including time series is available on the Eurostat Structural Indicators website:

http://europa.eu.int/comm/eurostat/structuralindicators

Commission launches debate on the future of textiles trade

On 5-6 May 2003, EU Trade Commissioner Pascal Lamy will host a major conference in Brussels on "The Future of Textiles and Clothing Trade after 2005". In preparation, the European Commission has launched an open consultation on the future of textiles trade policy. Through a dedicated internet forum, interested parties from all over the world can submit their ideas and contributions on trade in textile policies. "In less than two years we shall see the elimination of quota restrictions which have been a feature of world trade in textiles for 40 years. The time is ripe for a fresh, open and thorough analysis of all aspects of textiles trade and we want to hear the views from all interested parties so that we can draw the right conclusions", said Pascal Lamy. Website page dedicated to the conference:

http://europa.eu.int/comm/trade/goods/textile/index_en.htm [Background paper IP/03/353]

Eurostat news releases

First estimates for the fourth quarter of 2002 Euro-zone and EU15 GDP up by 0.2%; +1.3% and +1.4% respectively compared to the fourth quarter of 2001

Euro-zone and EU15 GDP both grew by 0.2% during the fourth quarter of 2002, compared to the previous quarter, according to first estimates out from Eurostat. These results follow an increase of 0.4% in both zones in the third quarter of 2002.

Compared to the fourth quarter of 2001, GDP grew by 1.3% in the euro-zone and by 1.4% in the EU15, after increases of 0.9% and 1.1% respectively in the previous quarter.

Over the whole year 2002, GDP grew by 0.8% in the euro-zone and by 0.9% in the EU15, compared to +1.4% and +1.5% respectively for the year 2001.

[Background paper STAT/03/28]

Enlargement news

Safe food and support for rural life should be EU priorities, say citizens of future member states

Safe, healthy food and support for improving rural life got top priority from citizens in future member states when asked about the way the EU should use its agricultural policy in a recent Eurobarometer poll. 88% of them consider that the Common Agricultural Policy (CAP) should be used to achieve these ends. A clear majority (67%) favours the direction that the CAP is taking, with less subsidy for agricultural products and more funds for the development and protection of the rural economy together with direct support to farmers. The survey also shows that most citizens in the future member states expect that the CAP will be favourable for farmers, for consumers, for the food industry, and for the environment in the countryside as well. Comparing the results of this survey with a similar one taken in the EU last year reveals that citizens in both current and future EU member states give broadly similar support to most of the CAP's objectives. For the full report, please go to:

http://europa.eu.int/comm/agriculture/survey/cc/index_en.htm

[Background paper IP/03/333]

Maltese people say yes

Malta, the smallest of the new member states, was also the first to vote "yes" to EU accession. In a closely-fought contest, with 92.5% of the electorate going to the polls, 52.8% of the population voted on Saturday positively in answer to the question, "Do you agree that Malta should become a member of the European Union in the enlargement that is to take place on 1 May 2004?". 45.7% said they did not agree, while 1,5% of votes cast were invalid.

For more information on the referendum timetable, see

http://europa.eu.int/comm/enlargement/negotiations/accession_process.htm

Cautious optimism from Verheugen

Addressing UK members of parliament last week, European Enlargement Commissioner Günter Verheugen carefully balanced his views of the impending enlargement between optimism and realism. "Assuming the ratification goes as planned", and that "everything goes well", he said, in less than 14 months ten new members will enter the EU". But he insisted that it was no time for Europe to drop its guard over the challenges it now faces on the eve of enlargement.

There was no doubt in Verheugen's mind about what had been achieved so far: "The reforms of the societies in Central and Eastern Europe have been impressive. The peoples in those countries have embarked on a unique transformation. Modern democracies based on rule of law and modern administrations have been built…. Bankrupt centrally planned economies have been restructured into competitive market economies. Over a relatively short time span most of the future Member State had mastered this process to such an extent that their integration into the European Union is possible."

And, by way of reassurance, he emphasised the meticulous nature of the mechanisms set up for enlargement: they safeguard "a smooth phasing in of the new member states into the policy areas that make up the EU"; they take account of "the constraints they have in meeting the investment-heavy legislation, be it in environment or energy"; they provide for "a substantive and increasing transfer of funds from the old members to the new, a transfer that will make the Marshall plan look modest"; but at the same time the Accession Treaty also "meets perceived and real concerns in the present member states, be it the consequences for the labour market or safeguards in respect of food safety."

But he recognised the difficulties that had arisen in getting so far: "I must admit that there were times when we all despaired" - even if "through determined action and a strong political will we did get through." And he openly admitted that even if the process is well on track, "there is no room for slippage" - spelling out, as he did so, the monitoring exercise the Commission is already conducting to make sure the new member states are in shape to join by next year.

He also saw the exercise as a continuing - and challenging - process. "Peace, security and prosperity is unfortunately not something that will come about by itself", he said. "There is no alternative in order to create peace and stability in this large area of Europe but to extend the structures of European integration towards the East, the Northeast and the Southeast. This is what the enlargement of the EU is all about."

Verheugen was broadly confident about the prospects for positive votes in national referendums in the candidate countries: "Support for enlargement is stable and increasing in the candidate countries. Overall there are support levels at around 60% or above. In Poland for instance the support is close to 70%." But he was cautious here too: "Although this looks reassuring, we should not take it for granted. Last week's rather heated dialogue on the approach towards Iraq resulted in a drop in the support in Poland", he noted. And as far as ratification of enlargement in the present member states was concerned, he said, "I don't foresee any major problems". But, he acknowledged, "there could be some difficult discussions during the parliamentary ratification". There has been very little public debate on enlargement in the present member states, he said, anticipating fears being raised about immigration, criminality, jobs going east, and costs.

Getting Europe into shape for the year of accession…

A clear strategy for 2004 - "the year of accession" - was agreed last week by the European Commission. Its "Annual Policy Strategy Decision for 2004" sets out a political and financial planning framework for 2004, hinged on the work of an enlarged Union. This strategy will now have to be discussed with the European Parliament and the Council of Ministers.

European Commission President Romano Prodi said: "We have set out important measures to prepare for the new member states to join the European Union next May". He highlighted plans to "manage the accession process correctly, develop stability at the borders of the European Union and beyond, and to ensure the foundations are in place for sustainable growth".

For Budget Commissioner Michaele Schreyer, the strategy "provides an excellent framework for the preparation of the Preliminary Draft Budget". She described it as an important step towards a fully-fledged budget for 25 member states. And she marked out clearly the Commission's specific needs: "We will be asking for 780 posts to manage the accession process, in addition to the 500 auxiliary posts granted for 2003", she said. The need arises because from 1 May 2004 onwards the new member states will participate in all EU-funded programmes, and the implementation of the entire acquis communautaire must be ensured. "These are the challenges awaiting the EU in 2004 and this is our central priority. Resources necessarily follow priorities", the Commissioner insisted.

For the central "accession" priority of the strategy, additional financial resources will be required not only to finance the extension of EU programmes to the enlarged Union, but also to finance specific transitional measures agreed at the Copenhagen European Council, including the Schengen evaluation mechanism, support for nuclear safety in the new member states, and continued support to reinforce their administrative and institutional capacity. It will also mean increasing funding for Turkey, Romania and Bulgaria over the period 2004-2006.

The new staffing requirements are mainly aimed at reinforcement in 2004 in the fields of regional policy, transport and energy, justice and home affairs and the linguistic services. Altogether, the strategy identifies the need for 1,500 posts within the Commission to support enlargement - but 500 auxiliary posts are already agreed for 2003, and a further 250 posts are being filled by internal reallocation of existing staff.

NB: For details of the financial conclusion of the Copenhagen Council, see

http://europa.eu.int/comm/enlargement/negotiations/chapters/

…and financing the enlarged Union beyond 2006

Strategic thinking on European Union finances beyond 2006 - for an EU with 25 or more members - is also now being developed within the European Commission. Last week an initial framework was agreed by the Commission, with a focus on broad themes rather than specific policies: peace, freedom and European citizenship, freedom and sustainable prosperity, solidarity, administration, and resources. Over the course of the next year the Commission will develop more concrete proposals on expenditure and financing in the future EU financial framework. The planning will also have to take account of the forthcoming Intergovernmental Conference, and to prepare for any future enlargements.

According to European Commission President Romano Prodi: "This work is above all a question of defining the community project for the enlarged and reformed Europe. It aims at preparing the ground for the future development of the EU." And European Budget Commissioner Michaele Schreyer said: "After 2006 the Union will face new challenges. The Union's budget needs to be adequate for our priorities and accepted by the citizens. It should ensure we achieve our goals for external policies, quality of life, enhancing sustainable growth and solidarity".

This broad approach is a response to the complexities of the task. As the Commission pointed out last week, translating the political project of the enlarged EU into financial terms "requires an examination of the nature of the enlarged European Union, its values, its identity, its ambitions, and what policies are needed to deliver the agreed policy goals in particular those requiring public expenditure at the Union level." And this conceptual work needs to start early, because the work that must follow, to agree concrete financing plans among the member states and between the EU institutions, is likely to be more of a challenge than usual. "With 25 member states in the decision-making process, negotiations risk being even more complicated", the Commission remarked.

There is an added incentive to be fully prepared in time, since a number of specific EU programmes due to expire in 2006 will require early decisions on further financing, too: structural actions, research, Trans-European networks, education and training, and culture and media. As Commissioner Schreyer pointed out in late February, when speaking in Finland of the overall timetable: "If the preparations and programming for the new multi-annual programmes, in particular the Structural Funds, are to be completed in time, that is by the beginning of 2007, the necessary legal bases will need to be in place by the beginning of 2006 at the latest. This means that the financial framework in its turn will have to have been adopted preferably in the first half of 2005. It would then be the enlarged Council and the enlarged new elected European Parliament who negotiates and decides with the new enlarged Commission."

EU still supporting Cyprus settlement

"The efforts to reach a settlement on the unification of Cyprus will continue right up to the signing of the Accession Treaty on April 16", said European Enlargement Commissioner Günter Verheugen last week, and "We hope that it will be a united Cyprus that we will welcome as a member". The UN proposal on the table would benefit all Cypriots, he underlined, and would bring peace and stability to Cyprus and the whole region. The failure to reach a settlement "would lead to continued economic decline and isolation for the northern part. We can also expect that the affluent Turkish Cypriots will leave the island. The massive demonstrations we have seen over the last weeks show the concern in the Turkish Cypriot community", said Verheugen: "The parties should therefore seize this unique opportunity. It will not come back". But, he insisted again, "With or without a settlement Cyprus is expected to accede to the EU by 1 May 2004". The Commissioner also reminded Turkey that it would also be "well advised to reflect over the consequence of a non-settlement for its EU aspirations". Without a settlement, the situation could arise after 1 May 2004 where Turkey does not recognise one of the EU member states. "It is difficult to see how it would be possible to start accession negotiations under such circumstances", said Verheugen.

Observers in the European Parliament

The new member state will not be able to send directly elected representatives to the European Parliament until after the European elections of 10-14 June 2004, but Parliament has decided to invite 162 observers from the ten new countries to take part in its work after the Accession Treaty has been signed next month. So temporarily, the number of Members of the European Parliament will rise from 626 to 788, until the June 2004 elections, when most of these observers will likely become full MEPs. As the representatives from the acceding countries will, until 1 May 2004, have a national mandate without formal status within the European Parliament, they will have only limited rights to participate in Parliament's work. They will be able to attend plenary sessions and have a seat in the Chamber, but without the right to speak or vote. However, within Parliamentary committees they will have the right to speak - although again not to vote. They will also be able to submit documents to a parliamentary body in whose work they are taking part through the chairman. The observers from the future Member State will only be able to claim travel expenses actually incurred plus a daily allowance. They will not be able to claim other allowances.