The Week in Europe 24-30/04/03

EU news in brief

Romano Prodi welcomes agreement on new cabinet of Palestinian Authority

On 23 April, the President of the European Commission, Romano Prodi, gave the following reaction to the announcement of a breakthrough in talks on a new cabinet of the Palestinian Authority (PA) : "I very much welcome the news concerning the agreement on the composition of the new PA cabinet. We now look forward to its early presentation to the Palestinian Legislative Council in the hope that it can gain parliamentary confirmation and take up its duties as soon as possible. This marks a major step forward for the PA as it pursues the reforms necessary to build an administration that will provide the foundations of a viable Palestinian State. The Commission now expects the Road Map to peace, as agreed last December by the Quartet of the EU, the US, the UN and Russia, to be presented to partners in Israel and the PA so that they start implementing it without delay. The people of Israel and the Palestinian Territories have already waited too long for peace : there is no more time to lose."

Pan-European Interchange of Data between Administrations: six Accession Countries join the Programme

Slovenia, Poland, Czech Republic, Malta, Estonia, and Cyprus have signed Memoranda of understanding (MoU) with the European Commission, formalising their participation in the IDA Programme. The MoUs allow the six EU Accession Countries to join the pan-European electronic infrastructure that the EU institutions and Member States use to exchange data for the purposes of applying EU law, enforcing single market rules, and supplying e-government services across borders to citizens and businesses. For a full description of IDA actions, see http://europa.eu.int/ISPO/ida/jsps/index.jsp?fuseAction=home

[Background paper IP/03/565]

ECHO preparatory mission to Iraq

A preparatory team from the European Commission's Humanitarian Aid Office (ECHO) will travel to Baghdad early next week with a view to assess the humanitarian situation and examine the possibility of opening an ECHO office in the city as soon as possible. The mission will include meetings with operational partners (UN, Red Cross and European NGOs) and visits to ECHO-funded projects. The team will also be making arrangements for the trip of Commissioner Poul Nielson to the region, scheduled for the beginning of May. ECHO has provided €157 million in humanitarian aid to the people of Iraq over the last decade and a further €100 million has been allocated, of which €22.5 million is already being deployed, in response to needs arising from the war. Assistance funded by ECHO since the conflict began on 20 March includes food and other vital supplies for hospitals, mobile water distribution and support in repairing water and sanitation systems.

European Commission proposes to relax the application of the slot allocation rules because of the war in Iraq and the outbreak of SARS

The European Commission today proposed to modify EU rules on airport slot allocation by introducing a derogation from the normal slot usage requirements for the current summer scheduling season. This aims to enable air carriers to adjust capacity in view of falling demand caused by the war in Iraq and the recent outbreak of the Severe Acute Respiratory Syndrome (SARS) in Southeast Asia. A similar measure was adopted after the tragic events of 11 September 2001, when a sharp fall in demand had forced air carriers to reduce their services significantly. Without this measure, air carriers would have to continue to operate their uneconomical air services to secure their current slots at congested airports in the EU.

[Background paper IP/03/572]

Enlargement news

Weaving a new future the textile industry and enlargement

The textile and clothing sector represents some 15% of manufacturing employment in Poland, a quarter in Lithuania, and nearly 40% in Turkey. And its importance for the new member states and candidate countries was at the heart of discussions at a recent European Commission conference in Brussels on the future of the textile and clothing industry in an enlarged Europe.

Action is required to support the competitiveness of the sector in both the existing and future member states. So EU policy in areas as diverse as trade, economic affairs, structural policies and chemicals needs to be adjusted appropriately, because of the impact they have on the textile and clothing sector, say the conference conclusions.

In many of the new member states, support will be needed for the inevitable intense restructuring and modernisation following accession. Although the only EU legislation specifically directed at textiles and clothing is the directive on textile names, many other more general regulations apply to the sector: 75 relating just to employment and social issues; many in the environment sector notably the directive on integrated pollution prevention and control; and the still-developing EU rules on chemicals. As a result, some new member states will face serious difficulties in meeting the costs of bringing their legislation in line with the EU rules on environmental protection and health and safety; and investment in transport infrastructure will be needed so that companies in the sector can shift their goods across distances and remain competitive.

But the candidate countries will have to make efforts of their own to improve their labour productivity, and to obtain the capital investment to do so, particularly from foreign investment, the conference noted. Companies there should reduce their reliance on outward processing transactions, and shift their focus increasingly towards high added-value products, design and quality. Currently, companies in the candidate countries often lack the information and knowledge to compete on the global market, and are handicapped by the fact that few of them cover the whole production cycle. Even in such a traditional industry, innovation and research has to be encouraged, and supply chains rationalised which means involving the distribution sector, and particularly the large retailers, in the debate.

The textiles sector in the candidate countries fears it will be particularly hard hit by the impending abolition of EU quantitative restrictions in 2005 - and in particular the challenge from China; it risks being overwhelmed with low-cost imported products in direct competition with domestic production. Some relocation of production facilities to the Mediterranean and former Soviet Union countries is already taking place, and this trend is likely to continue for low value-added products. At the same time, access to non-EU markets for products from the enlarged EU should be pursued, notably reduction of tariffs and elimination of non-tariff barriers, argued industry representatives at the conference.

EU-Poland trade in this sector is already liberalised, noted Elzbieta Sankowska of the Polish Federation of Apparel and Textiles. But she recognised the need to adapt the Polish industry to function in the single market, and to retain its place in the Polish economy, to which it contributes 3.6% of total production value, with a thousand companies employing more than 50 staff, even after heavy restructuring and employment decline in the 1990s.

Already the textile and clothing sector across Europe is taking advantage of the Phare business support programme in its "Perfectlink" project, conducted jointly with the leather sector. And Patrick Hennessy, the director responsible for textiles in the European Commission, told the meeting that change in the sector is vital, and that "the commitment of enterprises is essential if enlargement is to be a success".

The subject remains under review. Later this year the Commission plans to launch a major study on the impact of enlargement on the textiles and clothing sector in the candidate countries, to help public authorities and stakeholders anticipate difficulties and work on policy responses.

Food safety in the enlargement spotlight

It will be a significant challenge for accession countries to adopt EU food safety rules, according to the European Commission, in a briefing last week from the office of David Byrne, European Commissioner for Health and Consumer Protection. From the outset, the EU made clear that food safety was an element of the enlargement process where no risks will be taken that might lead to lower food safety standards or to any threat to consumers. The new member states all recognised that compliance with the acquis on food safety was essential, and they have already signed up in the Accession Treaty to abide by the extensive rules in this area. But the acquis covers many legislative acts, often of wide scope, and very demanding in terms of transposition, implementation and enforcement.

If the agreed food safety standards are not met before accession, the provisions of the Accession Treaty for a complementary safeguard clause will be brought into play. Where negotiation commitments are not met and where this is causing an imminent risk for the functioning of the internal market, this new clause can be invoked for up to three years after accession even longer if relevant commitments have not been fulfilled. "The EU will not compromise its standards", insist Byrne's officials.

The accession negotiations on free movement of goods dealt with food legislation - the general rules for hygiene and control, food labelling, food additives, food packaging and genetically modified foods. And the negotiations on agriculture covered veterinary and phytosanitary issues, and animal nutrition. The veterinary legislation includes animal health, animal welfare, animal identification and registration, internal market control systems, external border controls and public health requirements for animal products establishments. The phytosanitary legislation includes plant health (such matters as harmful organisms, pesticides), seeds and propagating material, and plant hygiene. And animal feed legislation includes the safety of feed materials and additives, labelling, contaminants in feed, controls and inspections.

Now the focus is on ensuring that the acquis is fully transposed into the national legislation of each new member state and that administrative structures and procedures are strengthened and reformed in good time prior to accession. The key food safety issues include the capacity of the new member states to implement EU controls for trade inside the EU and for imports from outside the EU.

A system of more than 50 border inspection posts are being set up everywhere the new member states have external borders with non-EU countries - notably, the eastern frontier with Russia, Belarus, Ukraine. The posts require buildings, equipment and staff able to meet the EU's minimum standards. It will be their role to carry out the crucial checks - documentary, identity and physical on all animals and animal products destined for the EU, because once inside the single market, these imports can, in principle, circulate freely without further check. So the EU is insisting that no compromise on facilities or procedures is possible for these. In only one case has a transitional period been agreed, and that is for the temporary border between Hungary and Romania. And the Commission is now carefully monitoring preparations, and has made clear it will approve only those posts that are fully ready at accession. A first draft list of posts to be approved will be drawn up in September 2003.

The acceding states also have to bring food processing establishments up to EU standards. For establishments that have no transitional periods and do not fulfil EU legislation, the Treaty is clear. If they do not comply with EU standards by the time of accession, they will be closed down. A small number of transitional arrangements were agreed, but only where there are guarantees that there will be no increased risk to public, animal or plant health in the EU. Products coming from establishments in transition must stay on the domestic market of the new member states and cannot be sold within the EU, so they will have to be clearly marked.

Agreed transitional periods for food establishments:

· Poland: 332 meat establishments (until December 2007), 113 milk establishments (until December 2006), 40 fish establishments (3 years);

· Czech Republic: 44 meat establishments, 1 egg establishment, 7 fish establishments (until December 2006);

· Hungary: 44 red meat establishments (until December 2006);

· Latvia: 29 fish processing establishments (until January 2005), 77 meat establishments (until January 2006), 11 milk processing establishments (until January 2005);

· Lithuania: 14 meat establishments, 5 fish establishments and 1 milk establishment (until January 2007);

· Slovakia: 1 meat and 1 fish establishment (December 2006).

New member states must also comply with EU rules regarding BSE: at present all countries are testing for BSE, but Bulgaria, Estonia, Latvia and Lithuania are not yet carrying out the wide-scale BSE testing that is required in EU legislation.

The Commission's Food and Veterinary Office is now conducting detailed assessments of progress in implementing EU law. For 2003 they will mainly concentrate on the ten countries that are joining the EU in 2004, with 4-5 inspections each, covering five broad areas:

· Live animals and food of animal origin, including establishments

· Import controls including border inspection posts

· Transmissible Spongiform Encephalopathies and feedingstuffs

· General food hygiene controls

· Plant health

EU funding for Czech rail upgrade

Construction works on the Czech rail line between Záboří nad Labem and Přelouč started on April 23. The project, co-financed by the European Union's ISPA programme, is another link in the Trans-European transport corridor linking Berlin and Vienna to Istanbul, Constanta and Thessaloniki, via Prague and Brno. The track is being realigned and new bridges are being built to allow speeds of 160 km/h, and station facilities and soundproofing are being improved at Záborí and Recany. The EU is meeting half the approximately €60 million total cost. The project should be completed by September 2004. ISPA co-financed the upgrading of another part of line through the Czech Republic last year, between Ústí nad Orlicí and Česká Třebová. The project will cut journey times, increase safety and reliability, and better enhance passenger services. Since 2000 the ISPA Programme has allocated €350 million to support major transport and environmental infrastructure works projects in the Czech Republic. Total EU funding approved for the Czech Republic for ISPA, the Sapard agriculture programme, and Phare now totals €1.45 billion.

Verheugen reflects on Iraq and enlargement

"If we are riven by internal divisions on foreign and security policy issues, then we run the very serious risk of badly damaging not just the enlarged EU but also trans-Atlantic relations. That would not be in America's or Europe's interests", said European Enlargement Commissioner Günter Verheugen, when he was in Lithuania last week. Setting the trans-Atlantic links in context, he pointed out that many future member states have close ties with the USA: "Hundred of thousands of Lithuanians are living in the USA as a result of the Soviet-occupation. Lithuanians retain strong memories of the solidarity America showed during the Cold War. And during this time there was always a Lithuanian Embassy in America. The USA fully supported you when applying for NATO membership. Let us also not forget that America's roots are in Europe", he said. He urged Europeans to capitalise on all that, and to develop "a clear foreign and security policy and become a player in its own right". Just as we need the USA, so it needs the EU as a serious and equal partner.