The Week in Europe 18-24/03/02

29.03.2002 | Euroskop

EU news in brief

Recognition of qualifications: six Member States to be referred to Court

The European Commission has decided to refer six Member States to the Court of Justice for failure to comply with Community legislation on the recognition of qualifications and the right of establishment. The case against Germany concerns the non-conformity of its legislation on the use of academic titles obtained in another Member State. Cases are to be brought against France, Spain and Italy for failure to implement aspects of European legislation on the mutual recognition of qualifications in certain professional fields. Lastly, cases are to be brought against Luxembourg and the Netherlands for failure to notify the Commission of national measures to transpose Directive 98/5/EC on the right of establishment of lawyers. The details of infringement proceedings currently before the Court against all Member States are available on the Europa site:

http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm

[Background paper IP/02/427]

Insurance: Commission welcomes Council Common Position on proposed Insurance Mediation Directive

The European Commission has welcomed the unanimous adoption by the Council of a Common Position on the proposed Directive on insurance mediation, a key element in improving the internal market in retail insurance services. The Common Position preserves the main features of the Commission's proposal presented in September 2000 (see IP 00/1048) and takes account of amendments approved by the European Parliament in its first reading. The proposal will now return to the Parliament for its second reading. Once adopted, the proposed Directive, which is a priority measure under the Financial Services Action Plan (see IP/00/556), will replace a 1977 Directive and thus become the only binding Community instrument for insurance intermediaries.

[Background paper IP/02/305]

Commission calls for protection of temporary agency workers and for steps to help develop the sector

The Commission adopted a draft EU law designed to provide a minimum EU-wide level of protection to temporary agency workers and to help the agency work sector to develop as a flexible option for employers and workers. This proposal follows the final break-down of negotiations, after 12 months, between the EU-level social partners on temporary agency work. The draft directive establishes the principle of non-discrimination, including for pay, between temporary agency workers and comparable workers in the user undertaking to which the temporary agency worker has been assigned. The principle applies when the worker has completed [6 weeks] with the same user undertaking. The principle of non-discrimination is already present in the national laws of 11 Member States. Exceptions from this principle are possible where objective reasons exist, in particular where temporary agency workers are offered permanent contracts with their agency and are paid even on those days on which they are not assigned to a user undertaking. An exception is also possible where collective agreements stipulate the working conditions of temporary workers and provide an adequate level of protection. [Background paper IP/02/441]

Commission Staff Economic Paper on "EMU and the euro the first 10 years"

EMU and the euro will face a number of challenges in the future. Common challenges suggested by economists can be grouped as follows : (1) fiscal policy making, (2) monetary policy making, (3) the euro area being a non-optimal currency area and (4) the political legitimacy of EMU. The Staff Paper issued by the Directorate-General for Economic and Financial Affairs examines the major lessons for EMU from the history of monetary unions and evaluates how EMU can respond to these standard challenges. Two basic conclusions emerge. First, the euro area is organised as a centralised monetary union, an institutional set-up that facilitates endurance. Second, policy makers within EMU are and will be involved in a process of policy learning. This process of learning by doing increases the long term viability of EMU. Full paper available at:

http://europa.eu.int/comm/economy_finance/publications/economic_papers/economicpapers165_en.htm

Commission Staff Economic Paper on "Deposit insurance and international bank deposits"

This Staff Paper issued by the Directorate-General for Economic and Financial Affairs examines how international depositors respond to national deposit insurance policies. Countries with explicit deposit insurance are found to be relatively attractive to international non-bank depositors. Deposit schemes characterised by co-insurance, a private administration, and a low deposit insurance premium appear to be particularly favoured by these depositors. The sensitivity of non-bank deposits to deposit insurance policies opens up the possibility of international regulatory competition in this area. The EU directive on deposit insurance imposes minimum standards on national deposit insurance policies. This directive, however, is silent on several important features of deposit insurance such as the level of the deposit insurance premium. Hence, it may not preclude regulatory competition in Europe. Full paper available on the web at:

http://europa.eu.int/comm/economy_finance/publications/economic_papers/economicpapers164_en.htm

Disability : Non Discrimination + Positive Action = Equality

At her address to the Spanish Presidency Conference on "Non Discrimination + Positive Action = Equality" in Madrid, European Commissioner for Employment and Social Affairs Anna Diamantopoulou stressed : "We know that up to 37 million Europeans, at any point in time, are affected by some form of disability. From mild, to severe, to multiple disabilities. Physical, mental or sensory. And the numbers are growing. As people live longer. As people survive disases and accidents that were once fatal. Leaving many with disabilities. The challenge now is to deliver, not just life, but quality of life, opportunity and inclusion. This diversity must be reflected in our policies, measures and actions. And we must be aware of the multiple discriminations and barriers that people with disabilities can face. Women with disabilities can face the barrier of sexism like all women. Disabled migrant workers can also face racism like all migrant workers. Just as older people come up against age discrimination. Obstacles are often cumulative, too. With health problems linked to isolation, unemployment and poverty."

[Full speech SPECH/02/122]

Commission adopts new strategy for health and safety at work.

The Commission has adopted a new strategy for health and safety at work for the period 2002-2006. The purpose of the plans is to modernise EU health and safety policy and rules to cover new types of workplace risk, such as bullying and violence at work and stress-related conditions. The strategy also seeks to consolidate a culture of risk prevention at work.

Anna Diamantopoulou, European Commissioner for employment and social affairs, said : 'EU health and safety strategy must move with the times. EU accident and death rates are still unacceptable. In addition, new types of work have created new types of workplace risk, such as stress-related conditions caused by the ever-faster pace of work. These new conditions must be addressed now and as far as possible anticipated and prevented at the workplace.' For the full text of the new strategy, please see :

http://europa.eu.int/comm/employment_social/general/index_en.htm

[Background paper IP/02/459]

Eurostat news releases

February 2002 - Euro-zone annual inflation down to 2.4% ; EU15 down to 2.3%

Euro-zone annual inflation fell from 2.7% in January to 2.4% in February 2002, Eurostat reports . A year earlier the rate was 2.3%. EU15 annual inflation decreased from 2.5% in January to 2.3% in February 2002. A year earlier the rate was 2.1%. In February, highest annual rates were in Ireland (4.9%), the Netherlands (4.5%) and Greece (3.8%) ; lowest rates were in Austria (1.7%), Germany (1.8%) and Luxembourg (2.2%). Compared with January 2002, annual inflation fell in eleven Member States and rose in three. Compared with February 2001, the biggest relative falls were in Portugal (4.9% to 3.3%), Germany (2.5% to 1.8%) and Luxembourg (2.9% to 2.2%) ; the biggest relative rises were in Italy and Sweden (1.5% to 2.7% both) and France (1.4% to 2.3%

[Background paper STAT/02/34]

Euro-zone in 2001 - Government deficit at 1.3% of GDP and public debt at 69.1% of GDP

According to Eurostat, in 2001, the government balance of the euro-zone and the EU15 were in deficit, while the debt ratio to GDP continued to improve. For the euro-zone, the government balance moved from a surplus of 0.2% of GDP in 2000 to a deficit of 1.3% in 2001, and for the EU15 from a 1.1% surplus in 2000 to a 0.6% deficit in 2001. Nevertheless, several countries continued to register a surplus. In 2001, the largest government surpluses relative to GDP were in Luxembourg (5.0%), Finland (4.9%), and Sweden (4.7%), while the largest government deficits were recorded by Germany (-2.7%), Portugal (-2.2%), France and Italy (-1.4% each). Government debt ratio to GDP decreased in the euro-zone from 69.5% in 2000 to 69.1% in 2001, and in the EU15 from 63.9% to 63.0%. The ratio was reduced in all Member States in 2001 compared to 2000, apart from in Portugal and Sweden, where the debt rose from 53.4% to 55.6% and from 55.3% to 56.0% respectively.

[Background paper STAT/02/35]

Enlargement news

Candidate countries' farmers better off in EU, says Commission study

A study published by the European Commission concludes that membership of the European Union will significantly improve the prospects for farmers in the candidate countries, without creating major market imbalances for an enlarged Union. Four different policy scenarios ("no enlargement", "introduction of the Common Agricultural Policy (CAP) without direct payments", "CAP with direct payments", and "Candidate Country Negotiating Position") have been considered. The simulation shows that even under the most pessimistic restructuring scenarios, EU accession will have positive effects on the income of farmers in the candidate countries. The report also underscores the Commission's view that immediately paying 100% of direct payments would create significant social distortions and inequalities and would hamper the necessary restructuring, given that farmers' income in the candidate countries could more than double (for details see tables in the Background paper). The study underscores that these positive effects of EU membership can only be reaped if the necessary restructuring to meet EU production standards will be made. The full study is available on DG Agriculture's website:

http://europa.eu.int/comm/agriculture/publi/reports/ceecimpact/index_en.htm

[Background paper IP/02/428]

First Eurobarometer report on candidate countries published

The full results of the first Eurobarometer opinion survey carried out in the 13 candidate countries for EU membership are published by the European Commission. This survey was conducted in October 2001 among more than 12 000 citizens from the 13 candidate countries. The wide range of subjects covered includes satisfaction with life, economic prospects, national pride and European identity, language skills, media habits and lifestyle issues as well as the EU enlargement process itself. Around 50 different questions were asked, many of them directly comparable with the standard Eurobarometer which has existed for the current EU countries for many years. The full report is available on the internet, including easy-to-read tables and graphs, and annexes with country-by-country figures. Some initial results of this survey were published in December 2001. Full details of this survey and other Eurobarometer reports are available on the Internet at the following address:

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

[Background paper IP/02/426]

Enlargement: Fischler's gives CEEC farm ministers "10 good reasons" for Commission proposal

Speaking to the Farm Ministers of the EU-15 and the 13 candidate countries , Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries called on both sides to be realistic as regards negotiating objectives. "In particular the candidate countries should shape their negotiating approach in a realistic way. It is of crucial importance that you do not raise false expectations amongst farmers. To insist on 100% direct payments and make this point over and over again will not be a winning strategy. Look at the whole package, which is much broader. I think it's time to start stressing the positives. It is clear that the negotiating margins are narrow. This has been understood in some countries, whereas I am concerned about the confrontational statements I hear from others," he said. He presented "10 good reasons" for the Commission enlargement strategy (see IP/02/176), which foresees massive rural development support, while phasing in direct payments over ten years. "A new study (see IP/02/428) clearly shows that the integration of the new Member States in the Common Agricultural Policy (CAP) is very likely to become a success story. The income situation of the farmers in the new Member States will improve significantly, " he stressed.

[Background paper IP/02/434]

Günter Verheugen welcomes provisional closure of negotiations on free movement of capital with Poland

EU-Enlargement Commissioner Günter Verheugen welcomed the provisional closure of 2 negotiating chapters with Poland: Taxation and Free Movement of Capital. This was achieved during the accession conference.

«In particular, the provisional closure of the negotiations with Poland on free movement of capital represents a breakthrough. This chapter, which includes sensitive questions such as purchase of land and secondary residences, has been the most difficult - politically and psychologically in the negotiations with Poland so far. The European Union made great efforts to accomodate Poland's particular needs. This proves that the Union takes the sensitivities and particular concerns of the different candidate countries seriously. I am confident that on both negotiating chapters closed on 22 March, i.e. free movement of capital as well as taxation, Poland will fully implement what was agreed».

Lisbon strategy" discussed by current future member states

Heads of state and government and foreign and finance ministers from the EU came together with their counterparts from the thirteen candidate countries at the European Council in Barcelona on Friday March 15th. They discussed the Lisbon Strategy and its implementation - highlighting it as an incentive for candidate countries to adopt and implement key economic, social and environmental objectives and as a two-way learning process.

Highlighting the parallels between the Lisbon agenda and the structural reform process being carried out in candidate countries, European Economic and Monetary Affairs Commissioner Pedro Solbes told the meeting between ministers of economy and finance of the current and future member states that many candidate countries "are, by now, ten-year veterans of structural reforms aimed at the transition to a market economy and accession to the EU".

European parliament debates enlargement

The European Parliament gave broad support to the approach being taken to enlargement by the European Commission and by the Spanish Presidency in its debate on the subject on March 13.

European Enlargement Commissioner Günter Verheugen urged a channelling of EU energies into making a success of the impending final stages of negotiations. "What we have to do now is harness the political momentum that has been created in order to solve the most difficult issues in the enlargement negotiations", he said.

All the negotiating chapters that are still open with the ten leading candidate countries can be largely or completely closed during the Spanish presidency, except for those that have a bearing on finance, and institutional questions, he predicted. For Bulgaria and Romania, the Commission aim is to start work by the end of the year on all negotiating chapters that have not yet been touched.

He said the Commission would present "in the weeks to come" draft common negotiating positions for the agriculture, regional policy, budget and institutional chapters. By the time the European Council meets in Seville, in June, a common EU negotiating position will have to be worked out for the agricultural policy, the structural policy, budget and institutional chapters. The Commission's January proposals for a common financial framework were aimed at ensuring consistency between the negotiations on agricultural policy, structural policy and the budget chapter within a clearly defined framework, he said. Now, in preparing the draft common negotiating positions, the Commission will be guided by certain key principles, said Verheugen. These are:

· The overall upper limits on spending set in Berlin in 1999 have to be respected;

· New member states will take part in all fields of common policy, albeit in some cases only after agreed transition periods;

· After accession, the new member states should not be financially worse off than before;

· The proposals should not prejudice the future shape of EU policy or pre-empt the next Financial Perspective for the period after 2006.

Verheugen stressed that the Commission thinking was carefully focused: "This is essentially a structural aid package because that is where the need is greatest. The amounts proposed for structural, cohesion and rural development measures account for some 76% of total resources. An increase in resources is proposed only for the cohesion funds but not for the structural funds. The main focus will therefore be on projects in the environment and transport infrastructure fields, which is where the candidate countries' greatest need lies. More needs to be done as regards rural development".

And he made clear that direct agricultural aids cannot be left out of the equation. "No detailed figures were worked out in Berlin as regards direct income support for farmers in the period to 2006. However, in political and legal terms, the position is clear: direct aid is part of the acquis and we have to deal with it." Looking further ahead, the Commissioner anticipated that in late October, the European Council under a Danish presidency will turn its attention to the regular progress reports for 2002 and the Commission's specific recommendations as to the countries with which negotiations should be concluded. "This will clear the way for final stage of negotiations to begin before the European Council meets again in Copenhagen in the middle of December this year."

Candidates encouraged on macroeconomics and financial reform

Candidate countries are succeeding in achieving macroeconomic stabilisation and are making great strides in advancing structural reforms, including in the financial sector, according to a new report from the European Commission. But their capacity to cope with potential future macroeconomic and financial sector challenges must be continuously reinforced and adapted as economic development creates new challenges for macro-economic policies, and as financial sectors - which are still at an early stage of development - mature.

Candidate countries' real convergence with current member states has so far been relatively modest and the performance has been mixed, the report reveals. Average GDP per capita on a purchasing power standards basis for all 13 candidate countries reached only 35.2 % of the EU average in 2000. Legal and institutional convergence and the opening-up of their financial markets to the EU are likely to support strong real convergence, it says. But economic policy will have to ensure that the growth process unfolds smoothly and that excessive growth fluctuations are avoided - in particular overheating, and boom-bust cycles.

A reassessment of the structure and components of budget revenues and expenditures is required to foster strong and sustainable growth. In order to keep the high economic growth sustainable and to preserve financial stability, fiscal policy needs to contain macroeconomic imbalances, in particular current account deficits.

The report also notes that most candidate countries have made substantial progress in the restructuring and privatisation of their banking sectors. But the banking sectors in transition candidate countries are still relatively small, and limited bank intermediation is exacerbated by even less non-bank financial sector development. In addition, there is still a relatively high share of non-performing loans in some countries. External safeguards also need to be enforced in the regulatory, prudential and supervisory framework - where implementation is also still deficient in some areas.

Benes decrees "should be no obstacle"

Discussion of the post-war Czechoslovak Benes decrees has emerged as an additional tension in the enlargement process over recent weeks. The recent call by Hungarian prime minister Viktor Orban for the repeal of those particular decrees which dealt with the expulsion or expropriation of property from some Czechoslovaks, Germans, Hungarians and others in 1946 - provoked the cancellation of a "Visegrad" summit meeting of the prime ministers of Hungary, the Czech Republic, Slovakia and Poland. But the European Commission says the debate is fruitless. "In the Commission's view, the Benes Decrees that concern expropriation are obsolete and no longer effective. We should be working together to return to a more objective stance on this issue and not encumber the enlargement process with issues that belong to the past", said European Enlargement Commissioner Günter Verheugen on March 13. "Our objective now must be to arrive at an understanding that enables all participants to maintain stable and lasting neighbourly relations and to shape the future of Europe." The subject also arose at the EU-Slovakia Association Council in Brussels on March 12 - where Josep Piqué said the only concern was that Slovak law was compatible with EU law. But Slovak foreign minister Eduard Kukan said it was "unfortunate to open the issue in Brussels". Instead of "looking to the past to create obstacles", he said, "we should be looking towards the future". He added that the recent disruption to the co-operation among the Visegrad Four was only a brief interruption. The co-operation "will go on", and was continuing in technical-level talks even at present, he insisted. "This is a temporary problem. Things will be back to normal in a few weeks", he predicted.

Enlargement needed for EEA, too

The need for the 18-member European Economic Area to be enlarged at the same time as the EU was endorsed by the EEA Council when it met in Brussels on March 12. Otherwise there could be a risk of legal uncertainty and distorted trade patterns, it concluded. The EEA, set up in the 1980s to provide a common internal market between the EU and EFTA, has seen three of its largest non-EU members (Austria, Sweden, and Finland) themselves become EU Member States, leaving only Iceland, Norway and Liechtenstein as the non-EU members (Switzerland, the other EFTA country, declined to take part in the EEA). New EU member states are obliged also to apply to join the EEA - although none of them has yet done so, and the mechanisms for such applications are still being created. The EEA Council "underlined the common objective of simultaneous accession of new members to the EU and to the EEA". It also "welcomed the enhanced exchange of information between the EU- and the EEA-EFTA states on important issues in the enlargement negotiations, and the ongoing constructive discussions on the necessary procedures and legal instrument that would be required for EEA enlargement".

Slow start for Convention

The newly-launched Convention on the Future of Europe has still to resolve some operational issues, ranging from rules of procedure to what languages may be used, and whether to represent the candidate countries on the Convention's Presidium. Candidate countries have requested that key documents and summaries of other items be translated into their national languages. Nearly half of the Convention's budget has been allocated to translating and interpreting into the current EU languages.