The Week in Europe 10-16/12/02

The Week in Europe 10-16/12/02

EU news in brief

2002 review of the EU economy: documenting the need for more economic reforms

Three years of buoyant growth in the euro area up until 2000 gave way to a period of sluggish growth since 2001. According to Pedro Solbes, EU Commissioner for economic and monetary affairs, "there are various explanations for the persistence of the slowdown, but the solution is common: action to strengthen the resilience, internal dynamism and thus the growth potential of the European economy. Macroeconomic stability has to be preserved while the growing delivery gap in the implementation of announced economic reforms needs to be addressed." In addition to analysing the macro-economic developments in the euro area, the 2002 EU Review provides an in-depth analysis on: (1) the record of and benefits from structural reforms; (2) the benefits from and pace of bond market integration; (3) the economic and financial impact of ageing; and (4) the process of convergence for the Accession Countries. For more details see

http://europa.eu.int/comm/economy_finance/publications/the_eu_economy_review_en.htm

[Background paper IP/02/1831]

Commission adopts new proposals to reform European Governance

The Commission adopted on Wednesday a broad set of measures with a view to improving the decision-making in the European Union within existing Treaties. At the same time the Commission presented a report concerning progress achieved on this area since July 2001 when the White Paper for European Governance was issued. Taking into account the recently decided measures on "Better Regulation" the Commission has now fulfilled most part of its commitments undertaken in the White Paper (IP/01/1096 July 25th 2001). The report and all related documents are available on

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

[Background paper IP/02/1865]

Commission proposes significant reductions in fishing catches to fend off moratorium on cod fisheries in 2003

The European Commission is proposing significant cuts in catches in its proposals for next year for a number of important EU white fish stocks, in particular cod, haddock and whiting which are caught together. These reductions, which must be accompanied by a system to control fishing effort on the fisheries concerned, are crucial if a moratorium on fishing for a number of cod stocks is to be averted. Total Allowable Catches (TACs) are based on the latest advice from independent scientists. In this case, the advice was to close targeted cod fisheries in the North Sea, Irish Sea, west of Scotland and Skagerrak as these cod stocks are on the edge of collapse. In order to assure some continuity of economic activity in the fisheries concerned, the Commission proposes TACs consistent with a significantly reduced risk to the main threatened stocks. However, scientific evidence shows that to be effective these conservation measures must be accompanied by effort restrictions and appropriate control measures. In the absence of agreement at the December (16-19) Council meeting on fishing effort controls to ensure compliance with low catch limits, the Commission will have no option but to withdraw its TAC proposals for the species concerned and to propose instead closure of the relevant fisheries. The Commission also proposes substantial reductions in TACs for other stocks for which the lowest possible level of fishing has been advised as well as for stocks which are outside safe biological limits. For these stocks, the Commission intends to propose recovery plans. This proposal does not include TACs for a group of stocks which the EU co-manages with Norway, pending an agreement with that countryFull details of the state of the stocks can be found at http://www.ices.dk/.

[Background paper IP/02/1843]

EU citizens' awareness of enlargement improving, but knowledge gaps remain

Public awareness of enlargement has increased across the 15 European Union Member States since September, according to a new Flash Eurobarometer survey. The poll, which questioned more than 15,000 people between November 11 and 20, found an overwhelming majority of EU citizens support the enlargement process and recognise the practical benefits it will bring. Knowledge about which countries are candidates for accession and the timetable has also picked up, but remains at low a level. There has also been a slight increase in concern about the potential negative effects of enlargement on social welfare and decision-making.

The full report of both this and the September survey can be found on the website of the Public Opinion Sector of the Commission at

http://europa.eu.int/comm/public_opinion

[Background paper IP/02/1864]

Pensions : first Commission evaluation of national strategies for adequate and sustainable pensions

Anna Diamantopoulou, European Commissioner for Employment and Social Affairs, will next week seek the Commission's agreement to the first ever comprehensive, political analysis of EU pension systems and their ability to face the challenge of demographic ageing. This review of pensions in the Member States, which takes the form of a draft joint report of the Commission and of the Council, will show that all EU countries have, to a greater or lesser degree, launched reforms designed to ensure adequate incomes to older people in the future without jeopardising sound public finances and without overburdening future generations. However, the Commission's conclusion will be that most Member States still have to make further reform efforts in order to guarantee adequate and sustainable pensions in an ageing society. Once adopted jointly by the Commission and Council, the draft report is scheduled to go forward to the 2003 Spring summit of EU leaders in Brussels. Today, there are four people of working age for each person over 65 years in the EU. In 2050, it will only be two. In most Member States, pensions expenditure is expected to rise significantly from about 2015 onwards, giving rise to concern about the capacity of future pensions to ensure decent living standards for the retired and financial sustainability of pension systems. Projecting on the basis of legislation in force in 2000, public expenditure on pensions in EU15 is set to rise from 10.4% of GDP in 2000 to 13.3% in 2050.

Fight against terrorism: more security in EU air transport

Loyola de Palacio, European Commission Vice-President in charge of transport and energy welcomed the final adoption of the proposal on aviation security, a key initial piece of EU legislation. The purpose of the new rules is to guarantee throughout the European Union the provision of a high level of security in civil aviation through harmonised mandatory common rules for civil aviation security. Loyola de Palacio explained "The security of European citizens must be guaranteed: only the uniform, effective application of these measures will enable all Europeans to continue to have confidence in EU skies and airports." stated Loyola de Palacio. "We must now implement quickly this Regulation, and, if necessary, to complete it for incorporating swiftly any new international agreement on security" she added.

[Background paper IP/02/1879]

Enlargement news

Enlargement becomes a reality

"An unprecedented and historic milestone" in overcoming "the legacy of conflict and division in Europe". That is how the 15 EU member states greeted the conclusion of accession negotiations on December 13 with ten new member states. Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia are now firmly scheduled to join on 1 May 2004. "The comprehensive and balanced outcome provides a solid basis for the smooth integration of ten new Member States", announced this Copenhagen European Council - just nine years after the previous Copenhagen Council set out its now famous criteria for admitting new members.

The outcome was certainly not guaranteed. Early in the Council meeting, the EU member states agreed they would back the improved terms that the Danish Presidency had worked out with the candidates over the preceding week - but they made clear the limits of generosity had been reached. Anders Fogh Rasmussen, the Danish prime minister, who chaired the Council, warned the candidates that any of them that could not reach an agreement in Copenhagen faced the "most probable scenario" that their accession would be postponed until 2007.

Such suggestions were dismissed as blackmail by some of the tough-talking candidates. The idea of deferring enlargement is "a political fiction", said Michael Tober, the Polish government spokesman, as the negotiations continued. "It's terms, not timing, that's under discussion." And the Czech chief negotiator, Pavel Telicka, insisted that acceptable results, and not a Danish timetable, would define when the Czech talks would finish.

The Council was punctuated throughout the day by repeated bilateral negotiating sessions in which the Danish Presidency and the European Commission thrashed out the final terms with each of the ten. The meeting overran its provisional timetable - principally in finding a satisfactory compromise with Poland. And at the eleventh hour - metaphorically, and, almost, literally - on Friday the thirteenth, each candidate country finally indicated it was ready to sign up to what it had negotiated.

The deal allows for enlargement, but prudent enlargement, the conclusions stress. The EU can take on new members "while safeguarding the effective functioning of the enlarged Union. The agreement reached will provide the acceding states with the necessary transitional arrangements to cope successfully with all obligations of membership... [and] ensures the continued functioning of the internal market as well as the various EU policies, without prejudging future reform."

The enlargement will be carefully managed: monitoring acceding member states' commitments right up to the time they join "will give further guidance" to them and "the necessary assurance to current Member States"; safeguard clauses have been inserted into the deal to cater for any unforeseen developments during the first three years after accession; and there is a commitment to surveillance of economic, budgetary and structural policies in the candidates.

After all the efforts of the last few years - and all the tensions of the last few months - there was a palpable air of relief on all sides that agreement had been reached. During the traditional "family photograph" at the end of the Council - which now needs a wide-angle lens, since it comprises the key political figures from 28 countries - Rasmussen very untraditionally made a short speech, which offered to the candidates a welcome to the "European family". Equally untraditionally, his remarks were greeted by a spontaneous round of applause from Europe's political leaders on his flanks. It was a mixture of satisfaction and relief.

What the deal amounts to

The important thing is that ten further countries are to join the EU on 1 May 2004, rather than the details of the agreement. But because the intensive negotiations over recent weeks have thrown the spotlight on some of the issues - and notably the financial aspects - it is worth summarising the outline terms for accession. The results took as their starting point what the EU offered after the Brussels summit in October, when it accepted some phasing in of direct payments to farmers, and agreed on a budgetary compensation system so that no new member state would find itself worse off in budgetary terms in the years just after accession than in 2003.

Since the Brussels summit, the Danish Presidency had sweetened the offer. The new member states would be allowed to top up direct payments to their farmers, even using some EU money for the purpose, and they would be granted additional money for meeting Schengen requirements - such as border control. Denmark won support from other member states for this package at the opening dinner of the Copenhagen summit, on December 12. During the final negotiations on December 13, some additional elements were agreed - principally further flexibility on topping up, and still more money for Schengen preparations. In addition, a solution was found to Poland's concerns on budgetary management in the first years after accession: in the early years of accession it will be allowed to draw on a cashflow facility worth up to € 1 billion; this is not new money, but early release of money that Poland would otherwise have obtained later in its membership.

The financial terms - which cost EU enlargement at nearly Euro 41 billion in 2004-2006, well within the ceiling established by the EU under its 1999 Berlin Agreement - are summarised as follows in the Copenhagen summit conclusions.

In addition, a new temporary heading for a special lump-sum cash-flow facility for the year 2004 and for temporary budgetary compensation for the years 2004 to 2006 should be created within the Berlin ceilings for enlargement related expenditure:

Keeping up the momentum for Bulgaria and Romania

Bulgaria and Romania were not forgotten at the summit, even though the spotlight was inevitably on the candidates in line to conclude negotiations at Copenhagen. "The successful conclusion of accession negotiations with ten candidates lends new dynamism to the accession of Bulgaria and Romania as part of the same inclusive and irreversible enlargement process", the Council said.

There was a formal welcome for "the important progress achieved by these countries, which is duly reflected in the advanced state of their accession negotiations". And EU leaders said they looked forward to consolidating the results achieved so far, since "the objective is to welcome Bulgaria and Romania as members of the European Union in 2007". So accession negotiations will continue. And Bulgaria and Romania should "seize this opportunity by stepping up their preparation, including fulfilling and implementing the commitments undertaken in the accession negotiations" - particularly in judicial and administrative reform.

The Council confirmed it was determined to help Bulgaria and Romania, and it endorsed the Commission's planned roadmaps and the proposals for a significant increase in pre-accession assistance.

Special provision for Cyprus

Throughout the summit in Copenhagen, intensive discussions were taking place in parallel between the Turkish Cypriot community and the Cypriot Government, in a bid to reach agreement on the settlement proposed by the United Nations secretary general Kofi Annan. These talks did not succeed - but have not been abandoned.

EU leaders said that as the accession negotiations have been completed with Cyprus, Cyprus will in any case be admitted as a new member state to the European Union. At the same time, the European Council "confirms its strong preference for accession to the European Union by a united Cyprus. In this context it welcomes the commitment of the Greek Cypriots and the Turkish Cypriots to continue to negotiate with the objective of concluding a comprehensive settlement of the Cyprus problem by 28 February 2003 on the basis of the UNSG's proposals".

The Council urged the leaders of the Greek Cypriot and Turkish Cypriot communities "to seize this opportunity" and to reach a settlement "in the coming weeks". The EU has already made clear that it will be willing "to accommodate the terms of a settlement in the Treaty of Accession" - and if this happens, the Council will adapt the terms for the accession of Cyprus with regard to the Turkish Cypriot community. In the absence of a settlement, the application of the acquis to the northern part of the island will be suspended until the Council decides otherwise. And in the meantime, EU leaders invite the Commission to consider ways of promoting economic development of the northern part of Cyprus and bringing it closer to the Union.

Turkey wins a date for review

"If the European Council in December 2004, on the basis of a report and a recommendation from the Commission, decides that Turkey fulfils the Copenhagen political criteria, the European Union will open accession negotiations with Turkey without delay".

This was the formulation that EU leaders agreed on in response to Turkey's calls for a date to open membership negotiations. The European Council reasserted that "Turkey is a candidate state destined to join the Union on the basis of the same criteria as applied to the other candidate states".

There were some warm words of encouragement: a strong welcome for "the important steps taken by Turkey towards meeting the Copenhagen criteria, in particular through the recent legislative packages and the subsequent implementation measures which cover a large number of key priorities specified in the Accession Partnership"; and an acknowledgement of "the determination of the new Turkish government to take further steps on the path of reform and urges in particular the government to address swiftly all remaining shortcomings in the field of the political criteria, not only with regard to legislation but also in particular with regard to implementation".

There was also a reminder of the obligations. "The Union recalls that, according to the political criteria decided in Copenhagen in 1993, membership requires that a candidate country has achieved stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities."

And there were some concrete gestures of support. The accession strategy is to be strengthened. The Commission is to propose a revised Accession Partnership and to intensify the screening process of Turkish legislation, to help move towards conformity. The EC-Turkey Customs Union is to be extended and deepened. And the EU is to "significantly increase its pre-accession financial assistance for Turkey" - under the budget heading "pre-accession expenditure" as from 2004.

What happens next ?

The aim now is to complete the drafting of the Accession Treaty so that it can be submitted early in 2003 to the Commission for its opinion and then to the European Parliament for its assent, and to the Council. The schedule envisages signature of the Treaty in Athens on 16 April 2003 by the EU15 and the ten new member states.

The ten acceding states will be able to participate in the 2004 European Parliament elections as members. The Accession Treaty will stipulate that Commissioners from the new member states will join the current Commission as from accession - on 1 May 2004. The newly elected European Parliament would approve a new Commission that should take office on 1 November 2004. On the same date, the provisions contained in the Nice Treaty concerning the Commission and voting in the Council will enter into force.

The new member states will participate fully in the next Intergovernmental Conference. And Bulgaria and Romania will participate as observers.

Meanwhile, new accession partnerships will be prepared for Bulgaria and Romania, and they will aim to complete negotiations so that they can join the EU in 2007.

For Cyprus, the aim is for an internal settlement to be reached by 28 February 2003.

And for Turkey, the European Commission will report on progress towards fulfilling the Copenhagen political criteria, and make a recommendation so that the European Council in December 2004 can decide whether to open accession negotiations without delay.

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