Financial services EMU at 10 Interview Uncertainty hangs over Eurozone’s economic governance MEP Toine Manders on energy UCITS Page 4 advances after all Page 8 market package Page 20 EUROPOLITIcs

The European affairs daily Wednesday 16 April 2008 N° 3511 36th year

Focus Communication Commission to launch action Mandelson plan on audiovisual media warns against By Célia Sampol This reinforcement will take place through confronting China an increase in the scope of events followed The European Commission will launch as well as the number of languages available. EU Trade Commissioner Peter Mandel- an action plan on audiovisual media, the A personalised service for television channels son has warned against a direct confron- first source of information for Europe’s adult and journalists will be offered on demand, tation with China over Tibet. Mandelson, population. The goal who said he was expecting calls for a is to help the media trade boycott as the Beijing Olympic provide more infor- Games come closer, called for realism, mation to citizens on 15 April in London, before the China- on the Union and to Britain Business Council, an organisation develop a European which helps British companies establish political sphere. a presence in China. It is from this point “We can and should insist on our of view that EU values and our concerns. But we Institutional Rela- must also not lose sight of the fact tions Commissioner that we are bound to work with Margot Wallström China, to live alongside China, to will present, on 25 help China succeed,” he said. “I say April, a communi- this because some appear to assume cation titled ‘Com- © EPA that a course of direct confrontations municating Europe The goal is to help the media provide more information to citizens on the Union in connection with the Olympics and through audiovisual media’. The draft docu- and programmes suitable for different groups Tibet serves our interests, and indeed ment that Europolitics has procured proposes (regional press, specialised press, NGOs and Tibet’s,” he added. He nevertheless launching a three-stage process. The first researchers) are planned. acknowledged that “modern China point consists of facilitating the coverage of Still on this point, the role of the audiovi- presents us with a dilemma. Our con- EU news by broadcasters. The EU executive sual library is expected to be reinforced as cerns, our protest must go hand in is therefore counting on increasing the con- well as the centralised access point for all hand with a strategy for ensuring that tent of the free inter-institutional information audiovisual material produced by the Com- China continues to look outwards, to service Europe by Satellite (EbS), going so far mission. Finally, an agenda of upcoming pursue internationalism”. as to “double its capacity”. This tool, which in events, localised in a sort of ‘one stop shop’, Commenting on the predictable calls particular provides pictures of EU events and will give access to background documents, for a boycott against China, Mandel- live coverage of press conferences, will have to videos and figures allowing journalists to son stressed that he would not sup- be developed with an eye toward 2009, which prepare their reports. port them as they would only hurt the will see “the coming into force of the Lisbon interests of ordinary European and Treaty, the creation of a president of the EU Reinforced support for Euronews Chinese citizens. Council, the European elections and greater The second point of the action plan application of the co-decision procedure”. consists of pro- (continued on page 9)

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EUROPOLITICS N° 3511 Wednesday 16 April 2008 

Contents N° 3511 Top Stories Financial services EMU at 10 Interview Uncertainty hangs over Eurozone’s economic governance MEP Toine Manders on energy UCITS Page 4 advances after all Page 8 market package Page 20

Financial services, banks, Economic & monetary affairs, Climate change/Kyoto Protocol: insurance taxation Clean Development Mechanism Financial services: Uncertainty EMU at 10: Eurozone’s economic passes 1,000th project milestone ...... 13 hangs over UCITS...... 4 governance advances after all...... 8 Defence & security Business & competitiveness Institutions Weapons of mass destruction: EU Textile industry: Commission to Communication: Commission to supports IAEA and WHO on probe Itema’s buy of BarcoVision...... 4 launch action plan on audiovisual media 1 nuclear and biological security...... 13 European Research Area: Research EU budget: Annual surplus ministers launch ‘Ljubljana process’...... 5 continues to fall ...... 9 In Brief NGOs: Havel’s foundation Sugar talks authorised...... 14 Social affairs gets Barroso’s support...... 9 Switzerland in the SIS...... 14 Informal Health Council: Cancer, European ombudsman Frattini to join Berlusconi’s cabinet...... 14 cross-border care, alcohol and 2007 complaints particularly Customs Union turns 40...... 14 antibiotics on agenda ...... 5 concern transparency...... 10 Major economies to meet Multilingualism: Commission drafting on energy and climate...... 14 strategy to promote linguistic diversity...... 6 Trade policy Merkel discusses treaty in Dublin...... 14 EU/Montenegro/WTO: EU gives Classical swine fever in Slovakia...... 14 Sectoral policies boost to Podgorica’s WTO accession.....11 Energy: Piebalgs stresses nuclear Open forum in low-carbon economy...... 6 External relations The fate of Yahoo! also concerns Fisheries Council: Revision of cod EU/Serbia: Signing of SAA could tip Europeans...... 15 quotas will depend on ICES data...... 6 balance in favour of pro-EU forces...... 11 Fisheries Council: Prospective IUU EU/Serbia: Deputy Premier Djelic EU Agenda...... 16 regulation deemed too complex...... 7 vows to sign stabilisation pact...... 12 Regional policy: Good marks for EU EU/US: Open Sky II: Ownership Interview Solidarity Fund...... 7 will be toughest nut to crack...... 12 MEP Toine Manders: Running out of time on energy market package...... 20

Europolitics is published in French under the name Europolitique. ISSN 1811-4121

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Financial services Uncertainty hangs over UCITS

By Ruth Milligan regime and bring these currently non-har- Financial Instruments Directive). This direc- monised funds under one set of EU-wide tive approaches financial market regulation The European Commission admitted, on regulations. Exactly how wide to spread the from a principle-based viewpoint. Instead of 14 April, that the future of a proposed new net has not been decided but likely contend- examining every type of product and decid- regime for retail investment funds is hang- ers for inclusion are private equity, open- ing whether it should be in or out of the rules, ing in the balance – with Internal Market ended real estate funds and funds of hedge ie whether it can or cannot be distributed as Commissioner Charlie McCreevy still funds. a pan-European product, MiFID sets out a “making up his mind finally” on the best The advantage to any product of being in series of standard tests: if a product passes way forward. UCITS is the passporting regime – so that if a these tests, it qualifies for inclusion. UCITS, The Commission had been due to publish product is given recognition in one member on the other hand, works from the opposite a draft version of a new UCITS (Undertak- state, it can be sold throughout the Union. stance and must stipulate in advance which ings for Collective Investment in Transfer- However, hand-in-hand with this comes the products it covers. The problem then arises able Securities) Directive at the end of April. highly controversial management passport. with how to fit the two together. Jean-Pierre However, McCreevy’s spokesperson, Oliver This would allow fund managers themselves Casey raises just such a question in a recent Drewes, said on 14 April that the commis- to conduct business in all the member states, paper published by the Brussels think tank sioner “might first have to consider consult- no matter where they were based, without CEPS (Centre for European Policy Stud- ing some advisory bodies” as “there are too the necessity of setting up branch offices. It ies). Commenting in The Times, Casey many uncertainties at this stage”. In short, is estimated that this could save €1 million writes that this ex-ante approach has led to he continued, “the situation is wide open”. per year for the average asset management “pressure on the Commission to shoe-horn However, one thing is clear: publication by company. Some member states – such as various alternative investment products into the late April deadline “is very very unlikely”. France, the Netherlands, the UK and Ger- UCITS”. However, he continues, the process There are even signs that the whole project many – are all for this. Others, including Ire- by which eligible assets are defined under might be shelved. The shock news comes land and Luxembourg, argue that it would UCITS is “outdated and unsustainable”. just a week after the Commission hosted a lead to a dangerous lack of local regulatory In a world where new products are coming high-level open meeting to thrash out ideas oversight. This may well be the issue cur- onto the market every day, industry cannot on what shape the new regime should take. rently putting a spanner in the UCITS pro- wait for the legislative process to catch up. The proposed changes to the UCITS posals, since some see an extended UCITS Indeed, underlying all of the Commission’s rules have been under discussion for the without such a passport as lacking the tools recent financial services legislation has been past five years, with a green paper in 2005, needed to deliver full benefits. the principle-based approach – a shift away a white paper in 2006 and a number of spe- from the type of legislation favoured when cific expert group reports. The proliferation UCITS v MiFID – culture clash UCITS was conceived. Ironically, the suc- of new types of financial products and the Another problem faced by the proponents cess of UCITS may be compounding the market pressure to distribute these to retail of extending the UCITS family is how this problem as no-one would want to funda- investors are behind the moves for revisions would fit with another piece of major finan- mentally alter a regime which has become which would extend the scope of the UCITS cial market regulation, MiFID (Markets in such a world-recognised brand. n

Textile industry Commission to probe Itema’s buy of BarcoVision

By Eric van Puyvelde winders, which are machines used to of sensors purchased by other winder pro- stock yarn before it is woven or knitted. ducers. The Commission’s in-depth inves- The proposed acquisition of Belgian BarcoVision is one of the two main com- tigation will therefore in particular focus on company BarcoVision, manufacturer panies currently producing sensors for ascertaining whether the new entity would of electronic control systems for textile winders, an essential device for ensuring have an incentive to negatively influence machinery, by the Italian textile machine textile quality. The company also produc- the availability of sensors. manufacturer Itema poses competition es software systems specifically designed “Sensors are a key component of tex- problems due to the vertical relationship for the textile industry. tile machines and are essential to ensure which exists between the parties. The The Commission’s preliminary investiga- the quality of textiles sold throughout the European Commission therefore opened tion revealed that BarcoVision has a strong world,” commented EU Competition an in-depth investigation into the transac- position as a supplier of sensors for winders. Commissioner Neelie Kroes. “It is there- tion, on 14 April, under the EU’s merger In view of Itema’s position on the market fore important for European consumers regulation. for winders, the Commission has serious that the Commission checks that access to Itema is one of the three main compa- concerns that the proposed transaction these sensors will not be negatively affected nies supplying textile mill owners with might increase the cost or affect the quality by this merger.” n www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3511 Wednesday 16 April 2008 

European Research Area Research ministers launch ‘Ljubljana process’

By Radek Honzak objectives of ERA, including its links to the engaged, proved most difficult. That is why Lisbon strategy objectives as well as the most ministers called for an “improved political The EU’s ministers responsible for research important features of the project (ie the free management”. They also agreed on several held an informal Competitiveness Council movement of researchers and knowledge, management methods which should help meeting in Brdo, Slovenia, on 15 April, with EU-wide cooperation and EU-level initia- ERA, under the heading of a new ‘Ljubljana one goal in mind – to overcome their dif- tives). They stressed that the common vision process’. Improved cooperation will be ferences over the creation of the European should be upgraded as soon as possible with crucial if ERA is to get off the ground. For Research Area and to finally kickstart the a view to framing policy and action plans example, member states have shown much project. Slovenian Minister of Higher Edu- to put it into practice. In the afternoon ses- reluctance to form international consortia cation and Research Mojca Kucler Dolinar sion, the ministers took on the issue of ‘ERA needed to develop 35 research infrastruc- has set two dominant topics for the session, governance’. The question of what role tures, which are to form the cornerstone of each divided into several parts. EU member states, associated countries, ERA (see Europolitics 3174). EU members The morning meeting was dedicated to parliaments and regions should have, and cite legal difficulties regarding liability, taxa- the ‘ERA vision’. Ministers discussed the how the principal stakeholders should be tion or staffing as the main obstacles (3448). The discussion was based on the outcome An “internal market for research” regional research policies and activities. of the consultations on the European Com- The Commission defines ERA as an The Commission should unveil specific mission’s green paper on ERA. The con- “internal market for research,” ie an plans for the development of ERA this sultation drew 685 replies and the results, area with free circulation of researchers, year, with one legislative proposal to published on 2 April, clearly show the differ- technology and knowledge. The broad create a legal framework for the con- ences between the views of member states concept, originally launched by previ- struction and operation of new EU-wide and stakeholders. n ous Research Commissioner Philippe research infrastructures. The creation Busquin, is based on the idea of effec- of ERA is formally listed as one of EU’s The results of the public consultation on tive EU-level coordination of national and goals in the Lisbon Treaty. ERA are available at www.europolitics.info > Search > 223709

Informal Health Council Cancer, cross-border care, alcohol and antibiotics on agenda

By Nathalie Vandystadt The 27 ministers are expected to focus above all, the proposal for a directive on on the areas and activities where EU cross-border health care. The EU’s health ministers will meet support represents “important added During her hearing by the European in Brdo, Slovenia, on 17 and 18 April, value”: screening for early diagnosis, Parliament, Vassiliou made a commit- for an informal meeting focused on the access to treatment and palliative care ment to present in June a proposal on fight against cancer. The Slovenian EU and investments in research. patients’ rights in terms of cross-border Presidency aims to launch common The results of their meeting will be care and access to health care in the EU actions at European and national level drafted into conclusions to be submitted (3501, 3453 and 3438). Her predeces- to “bring the disease under control” (see to the Health and Employment Council sor, Markos Kyprianou, did not succeed Europolitics 3467). on 9 and 10 June in Luxembourg. in tabling a proposal on this controver- Some 3.2 million new cases of cancer In 2009, the European Commission sial issue. This time, DG Employment are detected in Europe every year, with plans to propose an action plan for the is officially involved because Vassiliou’s breast, prostate, lung and colon cancer EU based on these priorities. proposal will form part of a ‘social pack- being the most frequent. The number of age’ to be launched in collaboration cancer deaths is expected to rise signifi- ‘Social package’ with Employment and Social Affairs cantly by 2015. “But the burden of cancer For her first meeting with the EU Commissioner Vladimír Špidla. does not affect different parts of the Union health ministers, Commissioner Vas- This week’s informal Council will also in the same way,” noted recently the new siliou will meet representatives of the discuss the EU strategy to reduce alco- EU Health Commissioner, Androulla troika – Germany, Portugal and Slovenia hol-related harm. The priority is to build Vassiliou (Cyprus). She mentioned the – and participate in a separate meeting capacities for implementing prevention case of cervical cancer, which is four with Slovenian Minister Zofija Mazej programmes and policies at European, times more frequent in Bulgaria than in Kukovic. national, regional and local levels. Finland and almost five times more likely The commissioner is expected to The ministers will also discuss antimi- to be fatal in Lithuania than in Italy, discuss the work programme running crobial resistance due to excessive use of according to statistics. until the end of her term of office and, antibiotics in the EU. n

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Multilingualism Commission drafting strategy to promote linguistic diversity

By Eric van Puyvelde The consultation was carried out online - The costs related to working in 23 offi- between September and November 2007 cial languages (1% of the budget) are worth A new European strategy to promote and gathered around 2,500 opinions from paying. multilingualism will be presented by the individuals, businesses, expert organisations The policy document, to be adopted by European Commission in September. It and policy makers from 58 countries1. the Commission in September, will exam- will focus on the role that multilingualism Most respondents shared the views that: ine and define the role of languages in the plays in social integration, its importance in - Languages must be learnt at an early age EU, which has around 60 different mother legal and educational systems and the sup- and, if possible, in the country of the new tongues. For Leonard Orban, “multilingual- port which new technologies can bring to language ism is a cross-cutting policy, involving people it. According to the spokesperson for Multi- - More should be done for regional lan- at every level of society. It is my intention to lingualism Commissioner Leonard Orban, guages and the linguistic diversity of the EU be the catalyst of this policy”. n it will be based on the results of a consul- is an asset to be safeguarded tation launched at the end of 2007, which - The media should promote an intercul- (1) The results of the consultation are were examined during a public hearing on tural society model, focusing on tolerance, available at ec.europa.eu/dgs/education_ 15 April in Brussels. not on confrontation culture/consult/index_en.html

Energy Piebalgs stresses nuclear in low-carbon economy

By Dafydd ab Iago safety and security of nuclear installations as France’s Permanent Representative to the well as the treatment of nuclear waste. “New EU, Pierre Sellal. Discussing new nuclear Speaking at the opening session, on 15 nuclear power plants must be built and power plants, Suez CEO Gérard Mestrallet April, of the European Nuclear Assembly1 existing ones have their operational lifetime stressed the need for long-term planning. “A 2008, organised by the industry association extended in order ensure that 2030 electric- nuclear project covers a period of almost a FORATOM, Energy Commissioner Andris ity supply goals are met,” said Piebalgs. The century – it takes ten years to build a plant, Piebalgs underlined the role of nuclear commissioner noted that in order to make the plant operates for 60 years and the energy in “the transition towards a low the necessary investments to replace ageing decommissioning phase takes 20 years,” said carbon economy”. Piebalgs told an audience power plants in the EU, the European Com- Mestrallet. ENA 2008 ends on 16 April with of some 180 policy makers, industry experts mission is currently examining issues related debates on issues such as financing nuclear and stakeholders that whilst nuclear energy to licensing, financing and different nuclear investments, tackling the nuclear skills short- makes an “important contribution” in the liability regimes. “Trends for the past three age and reconciling economic growth with a fight against climate change, and for greater years are on track, but we need to increase low-carbon economy. n security of energy supply, EU member states speed,” he said. The conference had a strong must strengthen cooperation as regards contingent of French speakers, including (1) ENA: www.ena2008.org

Fisheries Council Revision of cod quotas will depend on ICES data

By Anne Eckstein April (see Europolitics 3502). Some member Any decision on this point will need to be states (Spain, Sweden, the United Kingdom, ready to enter into force on 1 January 2009. The revision of fishing quotas, anticipated Denmark and France) asked for the Celtic according to the reconstitution plan for cod, Sea to be kept outside of this plan. Barnier Red tuna will depend on the spring report by the Inter- recalled that the December 2007 agreement Commissioner Borg insisted upon the national Council for the Exploration of the on quotas anticipated its revision in spring urgent need to implement the common Sea (ICES), indicated Fisheries Commis- 2008 according to scientific data on the state deployment plan for the control of red tuna sioner Joe Borg to the ministers during the of cod stocks in the North Sea and the Eng- fishing in the Mediterranean, launched by Fisheries Council of 14 April. He was reply- lish Channel. “We have supplied scientific the European Commission on 14 March, in ing to a question by French Fisheries Min- data which should normally make it possible order to avoid exceeding the quotas recorded ister Michel Barnier on raising quotas for to consider a re-evaluation, at least partially, in 2007. He also announced that, by the end French fishermen. The Council proceeded of this cod quota,” he indicated. These data, of April, the EU executive will present pro- to initially sound everybody out with regard of which the Commission “took note,” will, posals for the transfer of unused quotas in to the proposal for a revised plan for the like that of ICES, serve to define a proposal 2007 to the 2008 quotas of Cyprus, Malta, reconstitution of cod stocks, adopted on 2 which it will present to the Council by June. Spain, Portugal and Greece. n www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3511 Wednesday 16 April 2008 

Fisheries Council Prospective IUU regulation deemed too complex

By Anne Eckstein by Regulation EC 2847/1993 instituting a single mechanism, admitted that it should control system applicable to the Common be possible to simplify the procedures. The EU’s fisheries ministers, meeting Fisheries Policy. They consider that the With regard to developing countries, he in Luxembourg on 14 April to discuss new provisions must be harmonised with recalled that not only will there be provi- the proposal for a regulation relating to existing regulations, to avoid incoherence sions to help them but furthermore the the fight against illegal, undeclared and and/or duplication. For Cyprus, Estonia, system will only enter into force one year unregulated (IUU) fishing, consider it Denmark, Latvia and Bulgaria, the new after the adoption of the regulation, which to be “too complicated”. This was their provisions should only apply to third coun- provides the operators and administrations verdict when asked by experts from the tries. Apparently, only Spain agrees with concerned with an adaptation period. Council – currently working on the pro- the European Commission on its proposal Lastly, the issue of sanctions is giving posal – for a political approach on three for a single system. rise to nationalistic feelings among “politically difficult” points: the field The EU27 are clearly more united member states: they recall that it is a ques- of application, the certification mecha- with regard to the proposed certification tion of national competence. However, nism and sanctions. They now know that measures and procedures: too complex Poland, France and Sweden are calling all member states have difficulties, on and too taxing on an administrative level, for a “catalogue” of “infringements” to be varying levels, with these three questions. explained the Netherlands, Belgium, drawn up. As for Joe Borg, he insists upon With regard to the field of application, Cyprus, Finland, Denmark and Sweden. the need for a harmonised mechanism namely if the regulation should apply to Furthermore, Portugal and Italy believe and “effective and sufficiently dissuasive” ships flying the Community flag and ships that, given the complexity of the system, measures, which are clearly distinct from from third countries or just to the latter, it is necessary to assist third countries and operational costs. Much work remains to seven countries (United Kingdom, Bel- developing countries in particular, both be done in order to convince member gium, France, Sweden, Ireland, Italy and in terms of certification and the imple- states on this point. Germany) consider that the Community mentation of traceability measures. Fish- The Slovenian EU Presidency hopes to fleet is already sufficiently controlled by eries Commissioner Joe Borg took note be able to conclude a political agreement the legislation in force and in particular and, while insisting upon the need for a during the June Council. n

Regional policy Good marks for EU Solidarity Fund

By Isabelle Smets low and that the fund is working effi- nations given for rejection of applications ciently. The requirements imposed on concerning regional disasters. The EU’s Solidarity Fund, created in beneficiaries are less complex than for The Commission is seizing this oppor- 2002 to provide financial assistance to other EU funds and applications are not tunity to point out that its proposed revi- member states that are affected by natural put through superfluous administrative sion of the Solidarity Fund regulation – disasters (floods, forest fires, etc), is work- held up in Council for the last three years ing quite well. The EU Court of Auditors, – introduces simpler and clearer criteria which published a special report on the The only negative point for granting aid. fund on 15 April1, has no fundamental made by the Court of It agrees that the concept of regional complaints about its working. Auditors is the lack of disaster is defined rather vaguely in the Its audit – based on an analysis of all the regulation and that the conditions for applications submitted to the fund from speed in aid payment acceptance of an application are difficult its inception until end 2006 – aimed to to meet. assess its speed, effectiveness and flexibil- The member states and the Commis- ity. The only negative point made by the phases. Nor does the Court of Auditors sion invest “considerable time and energy” Court of Auditors is the lack of speed in find fault with the flexibility the fund must in drawing up and assessing applications aid payment (generally a little over a year show in processing applications. related to less extensive regional disasters, between the disaster and the fund’s inter- So all is well, particularly because all the which are then often rejected. The Com- vention). The European Commission’s applicants surveyed for the audit expressed mission concludes that this situation justi- response is that the fund was not set up satisfaction with the Solidarity Fund. fies the proposed reform. n to provide a rapid response. It is meant to In spite of this praise, the Commission refinance the emergency spending already calls for a revision of the fund’s working, (1) Special Report 3/2008, ‘The European incurred by the member states. as it has done since 2005. Union Solidarity Fund: how rapid, The Court of Auditors goes on to note Indeed, the Court of Auditors identifies efficient and flexible is it?’, is available at that the costs of managing the fund are a few cases of lack of clarity in the expla- www.europolitics.info > Search > 223702

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EMU at 10 Eurozone’s economic governance advances after all

By Christophe Garach made for the eurozone under the revised in turn at meetings of the international Lisbon strategy as regards implementa- financial institutions). It has been observed on more than one tion of the reforms that still need to be Juncker was ironical towards the member occasion that the coordination of economic undertaken. states that do not want to play the game and policies in the eurozone remains the key was very forthcoming on possible improve- weakness of the Economic and Monetary Failure ments to governance of the eurozone. Today’s Union (EMU). But when it comes time to But respect for such declarations often scant results naturally have to be encouraged, take stock, it becomes clear that substantial hangs on a thread. The Berlin Agreement of but the Eurogroup president did not linger progress has been made over the last decade. April 2007 (in which the Eurogroup coun- on the question, concentrating instead on Jean-Claude Juncker, the guest of honour at tries agreed to achieve balanced budgets no the (rare) new tools the Lisbon Treaty will a forum celebrating the 10th anniversary of make available to the member states and the Economic and Monetary Union1, went the Commission: creation of a stable presi- to great lengths to demonstrate that in spite The coordination of dency of the Eurogroup (which will be able of the ambient scepticism over the euro economic policies is not a to take more autonomous decisions in rela- and the member states’ recognised lack tion to Ecofin – see special issue on the new of will, the overall picture is “satisfactory,” ‘diktat’ Treaty of Lisbon) and the possibility for the even though he personally seemed a bit Commission to put out public warnings to disappointed. a member state (without endorsement from later than 2010) has already fallen apart since Ecofin) “whose budget policy is faulty”. “Greater verbal discipline” France and Italy will not be able to meet But there is still a big difference between a Analysed and criticised, the coordi- their commitments before 2012 at best. Yet, public warning and really taking measures nation of economic policies is based Jean-Claude Juncker is sticking to his guns. against recalcitrant member states. n on the treaty and the revised Stability The organisation of an ex ante budget orien- Pact, but also has its origins in a Euro- tation debate, put in place for the first time The 1997 resolution is available at pean Council resolution of 13 Decem- in 2007 in the Eurogroup, represents a first www.europolitics.info > Search > 223683 ber 1997, noted Juncker (see box). That step. Of course, Juncker admitted his “fail- (1) On 15 April in Brussels, organised by the reference document shaped governance ure”: the harmonisation of budget calen- European Economic and Social Committee. in the eurozone which, since it was not dars he defends has been postponed indefi- binding, was translated into ‘flexible nitely for lack of consensus but the debate governance’ guided by peer pressure. is continuing, as seen in Brdo, Slovenia (see While this governance is anything but Europolitics 3205). The objective is to allow Guidelines set in 1997 a ‘diktat’, “no country can simply do greater economic convergence and to “keep Adopted in 1997 by the European whatever it likes,” said Juncker. And some from getting rich at the expense of Council, the resolution creating a it is precisely within the Eurogroup their neighbours”. framework for the coordination of eco- that this spirit of common responsibil- Another subject of satisfaction for Juncker nomic policies laid down 12 principles ity was born, even if it has often been is the improved and ever greater visibility of divided into two chapters (coordina- flouted by the member states on differ- the eurozone in the international financial tion and exchange rate policy). In the ent occasions (particularly on exchange institutions. The latest example came at the first case, the states agreed to “close policy or budget orientation). Juncker recent G7 meeting in Washington (3510). monitoring of macroeconomic devel- nonetheless noted that the Eurogroup The ministers modified their joint declara- opments [...] to ensure sustained has managed to “impose greater verbal tion, “under European influence,” to express convergence” and “monitoring of discipline through the establishment more concern over the excessive volatility of structural policies [...] insofar as they of common reference terms” following exchange rates. affect the chances of achieving sus- a period of extreme cacophony. This tained non-inflationary growth”. On wording is not new: in Manchester in “Laughing stock of the world” exchange policy, the resolution states 2006, the Eurogroup ministers agreed The minister from Luxembourg never- that “in exceptional circumstances, not to take measures (especially tax theless recognises that the next challenge for example in the case of a clear mis- measures) to cushion the spectacular to be met will be to introduce single alignment,” the Council may “formu- increase in oil prices. More recently, the representation in the International Mon- late general orientations for exchange eurozone also adopted a joint resolution etary Fund. “We are the laughing stock rate policy in relation to non-EC cur- on measures to be taken to cope with of the world,” and the situation is “abso- rencies in accordance with Article price hikes (to avoid boomerang effects, lutely ridiculous,” continued the Euro- 109(2) of the Treaty”. These general cautious management of taxation and group president (depending on the sub- orientations should always respect administered prices, etc). More gener- ject being addressed and the posts held, the independence of the Central Bank. ally, specific recommendations are now several Europeans must take the floor www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3511 Wednesday 16 April 2008 

Audiovisual media the first year. The goal remains to increase video production. A budget of €1.8 mil- (continued from page 1) the information on the EU for citizens and lion has been reserved for this purpose to make their broadcast free of charge. The and the audiovisual service will be reor- moting the broadcasting of EU content by points of view of other member states could ganised with the goal of producing better supporting radio and television networks. be introduced, for example, in a national quality video reports in all EU languages The Commission will continue to support report on the Union. In the same think- and in different formats. DG Commu- the network of European radio stations ing, the Commission will continue its aid nications, moreover, will put in place a EURANET, launched in December 2007 to Euronews and ensure that the service strategy to maximise the tools offering with the participation of 16 radio stations in Arabic can begin in July 2008. The EU video and sound on demand. from 13 member states. Over five years, it executive currently subsidises this channel, This communication falls under the will receive €5.8 million per year to pro- owned by a consortium of European and white paper for the European communi- duce and broadcast 4,221 hours of EU North African broadcasters, by €10.8 mil- cation policy and the Commission’s Plan programmes annually, with total indepen- lion per year. Arabic will become the eighth D (for ‘Democracy, Dialogue, Debate’). dence. The number of languages could be language, which should double Euronews’ A strategy for the internet was presented in increased. The institution would like to do global audience to 400 million homes. December 2007. n the same for television channels in 2009- Finally, the Commission intends to 2010 with an associated internet portal. The improve its own audiovisual material. The communication is available at operation cost is estimated at €8 million for This will take place through greater www.europolitics.info > Search > 223677

EU budget Annual surplus continues to fall

By Eric van Puyvelde ference between all EU budget revenue the past years. Crucial to the level of the and spending – amounted to only just surplus is the implementation of voted For six years, the EU’s annual budget over 1% (€1,529 million) of the total budget payments as they make up most surplus has continued to fall, decreasing €113.846 billion agreed spending for of the EU’s spending. from a peak of €15.003 million in 2001 2007. Even though the year 2007 was the to €1.529 million in 2007. To explain this situation, EU Budget first year of a new financial framework, Therefore, last year, member states’ Commissioner Dalia Grybauskaite notes the implementation rate of payments contributions almost exactly matched that “effective forward planning, less red still reached 99%, contributing, among the agreed spending for the year, says the tape and good budgetary management other things, to a record low surplus. European Commission which adopted, made it easier to get new programmes The surplus is returned to member on 15 April, its decision establishing this rolling faster in 2007, helping member states, on the basis of gross national surplus. states direct EU cash to where agreed income (GNI). This surplus fell by 90% from 2000 needs lie”. These repayments span from €300 and by 17% from 2006. It is also the effect of the financial million for Germany to €2 million for The end-of-year surplus – ie the dif- management reforms introduced over Estonia. n

NGOs Havel’s foundation gets Barroso’s support

By Radek Honzak this foundation will bring together represen- EFDP are former Commission President tatives from across Europe’s political and Jacques Delors and Vice-President Etienne Not many European NGOs can boast an civil society to increase our involvement Davignon, German ex-President Richard open endorsement from European Commis- in countries where democracy is absent or von Weizsäcker, as well as former Dutch sion President José Manuel Barroso – unless under threat,” said Havel, who will chair the and Danish Foreign Ministers Bernard Bot it is an organisation founded by Vaclav Council of Patrons of EFDP. “From China and Uffe Ellemann-Jensen. Havel. The former Czech president was in and Belarus to Burma and Zimbabwe, Euro- The EFDP will include 15 European civil Brussels on 15 April to launch a new ‘Euro- peans – at the national and EU level – have society organisations focusing on democ- pean Foundation for Democracy through a duty to support those striving for human racy assistance. It will be chaired by Simon Partnership’ (EFDP). The NGO will, in rights and civic freedoms,” he added. Panek, director of the Czech People in Need Havel’s words, “work to ensure that democ- The Czech ex-president was joined at the Foundation, Roel von Meijenfeldt, execu- racy assistance becomes a permanent part launch by Barroso and former Mozambique tive director of the Netherlands Institute for of the Union’s foreign policy,” and should President Joaquim Chissano. The NGO, Multiparty Democracy (NIMD) and Profes- complement existing EU programmes. however, has received high-level support sor Joao Carlos Espada of the Portuguese “Democracy is the EU’s raison d’être, and from more luminaries. Other patrons of the Catholic University. n

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European ombudsman 2007 complaints particularly concern transparency

By Célia Sampol sit the competitive exams), the European Parliament following a complaint from Parliament, the European Anti-Fraud a Maltese journalist asking for access to The European Ombudsman, Nikiforos Office and the Council. information concerning the details of Diamandouros, received 3,211 new com- Another precision: 28% of investigations allowances paid to five MEPs. Finally, the plaints from citizens in 2007 and a “record concerned the “lack of transparency,” then EP responded that it would publish expla- number” of investigations were brought to injustice and the abuse of power, unsatis- nations and amounts for fixed allowances completion. This is what Diamandouros factory procedures, the avoidable delay in received by the members on its web site stressed, on 15 April in Brussels, during payment for EU projects and discrimina- but that it was not useful to give details the presentation of his annual report. tion. Germany is the country which pro- of how each MEP spent the money. Dia- The number of complaints received duces the most complaints, against Spain mandouros is awaiting the complainant’s decreased in comparison to 2006 (3,830). the previous year. Diamandouros is not response to decide. Nonetheless, in relative terms, more surprised: his services have particularly “admissible” complaints were recorded, focused their awareness policy on this Revision of status which meant that the ombudsman had country. Germany is, furthermore, the The Parliament has just pushed back to open a larger number of investigations largest member state and has no national the vote on the report on the ombuds- (641 against 582 the previous year). Among ombudsman. It is followed in 2007 by man’s status, particularly due to a contro- them, 348 were closed, which constitutes Spain, France and Poland. versial point on the ombudsman’s access an increase of 40% in comparison to 2006. Diamandouros, moreover, points out to the institutions’ ‘sensitive’ documents. Out of this total, 64% concerned the that 129 cases could have been resolved Questioned on this matter by Europoli- European Commission. Each year, this by the institutions. In cases where poor tics, Diamandouros responded that the institution is top of the list because it takes administration was serious but reversible, report had obtained unanimity in the the most decisions and has a direct impact the ombudsman sent a draft recommen- Constitutional Affairs Committee and for citizens. It is followed by the European dation to the institution. He wrote eight of that he hoped that this compromise was Personnel Selection Office (this figure is these in 2007. The best-known case was adopted soon because “I find it fair” normal given that 60,000 people per year a recommendation sent to the European (see Europolitics 3491). n

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EU/Montenegro/WTO EU gives boost to Podgorica’s WTO accession

By Sébastien Falletti to Podgorica’s accession to the Geneva-based the process of bilateral negotiations launched organisation on 15 April. David O’Sullivan, in 2005. “Montenegro has made remarkable The EU has given a strong boost to Monte- the director-general of the Commission’s progress. Today’s signature is an important negro’s accession to the World Trade Organi- Directorate General for Trade and Montene- milestone in Montenegro’s WTO acces- sation, as the European Commission became grin Vice-Prime Minister Gordana Djurovic sion process,” said EU Trade Commissioner the first WTO member to give its go-ahead signed a bilateral agreement that completes Peter Mandelson. The sides have reached agreement on tariffs for trade in goods and its member states and Montenegro on 15 on the reciprocal opening of their respective Background October 2007. Pending the completion of services markets. These commitments will be Bilateral trade commitments between the the ratification process by the member included in the future Protocol of Accession EU and Montenegro are already embod- states, an interim agreement has been of Montenegro to the WTO. However, Pod- ied in the Stabilisation and Association applicable since 1 January 2008 allowing gorica still needs to conclude its negotiations Agreement (SAA), which was signed for the early implementation of trade and with the remaining WTO members before between the European Community and trade-related provisions of the SAA. its accession can be endorsed by a WTO multilateral working group in Geneva. n

EU/Serbia Signing of SAA could tip balance in favour of pro-EU forces

By Joanna Sopinska cratic Party of Serbia (DSS), which opposes to start a dialogue with Pristina – a move relations with the EU unless it withdraws its highly opposed by the radicals, the diplomat The signing of the Stabilisation and Asso- support for Kosovo’s independence declared said. “We are also open to discuss with the ciation Agreement (SAA) would not only on 17 February, is expected to receive 12- EU a modus operandi for the EULEX mis- facilitate the electoral victory of pro-Euro- 13% of the votes. The post-Milosevic Social- sion to replace UNMIK forces in mid-June,” pean forces in Serbia, but could also help the ist Party of Serbia (SPS) can count on 7% when Kosovo’s constitution is due to enter whole Western Balkan region, in particular and the liberal G17-Plus is forecast to win into force, he added, suggesting that the vic- Kosovo, to achieve stability and irreversibly 4% (the threshold is 5%). “The signing of tory of pro-EU forces is the key to a new, more turn towards the West, a Serbian high-level the SAA could tip the balance in favour of stable phase of relations between Serbia and diplomat has told Europolitics. The victory the pro-European forces,” the diplomat said. Kosovo. A new government, led by Tadic’s of radicals in the forthcoming early elec- An opinion poll made on 7 April showed that Democrats, would be in favour of opening tions, on 11 May, would reduce virtually to 45% of Serbia’s citizens are inclined to vote a new round of direct talks with Kosovo on, zero the chances that the four war criminals for those forces that can secure the signature inter alia, the status of north Kosovo, which still at large, including Ratko Mladic, would of the SAA. Moreover, the SAA also matters is predominantly inhabited by Serbs. The be transferred to The Hague. Moreover, a for those 57% who described themselves as radicals are in favour of the ethnic partition defeat of the pro-EU forces would make any undecided. of Kosovo. It is one of the options, “but not sort of cooperation between Serbia and the During such tightly-contested elections, the only one,” the diplomat said. EULEX mission even more unlikely than the EU’s support is even more crucial than now, the diplomat underlined. it was before the presidential elections held Dutch play into radicals’ hands Less than a month before one of the most in Serbia in February this year, the diplo- By blocking the signature of the SAA, the important parliamentary elections in Serbia mat underlined. The support for Kosovo’s Dutch play into the radicals’ hands, he said. after the fall of Slobodan Milosevic in Sep- independence by the majority of the EU The deputy leader of the SRS, Tomislav tember 2000, Serbia’s pro-European forces, member states has significantly changed Nikolic, and his allies are openly opposed led by President Boris Tadic, have launched the situation, he said. The citizens of Serbia to the extradition of Mladic and three other an intensive diplomatic offensive in the EU should now see it clearly that despite the indictees to the International Criminal Tri- and the US (see page 12) in order to receive recognition of Kosovo, the EU continues bunal for the former Yugoslavia (ICTY). tangible support. On 11 May, the main battle to support their country’s membership bid. Only the signing of the SAA could guarantee will be fought in Serbia between Tadic’s pro- There is a growing feeling among the Serbs that Serbia would continue its efforts to arrest European Democratic Party (DS) and the that the EU prefers closer ties with the Alba- Mladic, he explained. The defeat of the radi- Serbian Radical Party (SRS), which prefers nians to better relations with their country, cals would also increase the stability of the closer ties with Russia to deeper relations he explained. whole Western Balkan region. Nikolic can with the EU. The opinion polls show that easily destabilise the neighbouring countries the vote will be very tight, with both blocks The Kosovo factor by inflaming tensions along ethnic lines, in likely to win 36-37% of the votes. Outgoing The pro-EU forces are firmly opposed to particular in Bosnia and Herzegovina, he Prime Minister Vojislav Kostunica’s Demo- the recognition of Kosovo, but they are ready concluded. n

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EU/Serbia Deputy Premier Djelic vows to sign stabilisation pact

By Brian Beary in Washington May, which could determine whether the 17 February and claimed that “European country assumes a pro-EU or Euroscep- foreign ministers tell us ‘I did not want to “The pen is in my bag,” Serbia’s Deputy tic orientation. While the pro-EU Djelic [recognise Kosovo]. I had to’” because of Prime Minister Bozidar Djelic told Europol- claimed “there is no race to sign” the SAA, Washington’s actions. Acknowledging that itics on 14 April when asked if he was ready in reality most observers believe he wants to countries representing 60% of the world’s to sign a Stabilisation and Association Agree- sign it just before the elections to woo voters GDP now recognise Kosovo as a sovereign ment (SAA) with the EU. Djelic said the away from his anti-EU political opponents. country, he stressed how only Senegal in Serbian government had, on 9 December Serbia’s Prime Minister, Vojislav Kostu- Africa, Peru in Latin America and Afghan- 2007, authorised him to sign it and that if the nica, who is from a different party to Djelic, istan, Turkey, Malaysia and Japan in Asia EU approved the SAA when foreign minis- recently urged Serbia not to sign the SAA, have done so. ters discussed the issue on 28-29 April he claiming the accord gave international rec- The SAA would be an important first step would sign. However, he thought it unlikely ognition to Kosovo’s secession from Serbia, on the path to EU membership for Serbia. the EU would give its blessing then as the which Belgrade opposes. But Djelic denied Djelic said he would also push for EU can- Netherlands would block it on the grounds that signing the SAA would do this and didate status for Serbia, visa-free travel to that Belgrade had not yet handed over Ratko stressed how an agreement would be good the EU and greater EU funding. He noted Mladic, the indicted ex-Bosnian Serb mili- for the Serbian economy. how Belgrade’s neighbours Greece and tary leader, to the International Criminal Bulgaria – which are EU member states Tribunal for the former Yugoslavia in The SERBS UNIFIED ON KOSOVO – currently received €5.6 billion and €1.6 Hague. “We will do everything we can Despite his pro-EU leanings, Djelic billion a year, respectively, from the Union but please do not block an entire country insisted “Serbia will never recognise the while Serbia only got €200 million. Djelic because we have not found him,” he urged. independence of Kosovo. You will not find said 2012-2014 was his target date for EU Djelic’s pledge, made at a talk at Johns any politician of stature who will accept accession and predicted “the true test of Hopkins University in Washington, comes that”. He slammed the US for espous- whether we join is whether we have organ- as Serbs prepare to vote in tightly-contested ing a “one-sided policy” by recognising ised crime and corruption under control,” parliamentary and local elections on 11 Kosovo’s declaration of independence of adding “this is fair”. n

EU/US Open Sky II: Ownership will be toughest nut to crack

By Brian Beary in Washington and Lufthansa-Swiss have now grown bigger EU plans to apply its Emission Trading than United and American because the EU Scheme for fighting global warming to all The EU is starting to push the US to allow has allowed mergers.” The representative arriving and departing flights from 2012 foreign takeovers of US airlines in prepara- suggested the best way to force US regulators – something Washington claims is illegal. tion for the launch of talks, on 15 May, for a to change their protectionist mindset would “If there was a global system from ICAO second ‘Open Sky’ aviation agreement. “We be to present them with a concrete proposal [the International Civil Aviation Organisa- are going to insist on this. It is in the inter- for a merger or takeover. Airline employees tion], that would be best. But we have been ests of aviation as a whole,” Daniel Calleja remain opposed to any change as they fear waiting a long time and there has been no Crespo, the European Commission’s direc- international mergers will reduce their bar- progress,” he said, adding the EU did not tor for air transport, told Europolitics on 14 gaining powers and make it more likely, if a need the consent of other countries to April, while in Washington for meetings global carrier makes job cuts, that US-based move forward. He announced that the EU with top US lawmakers and regulators. employees will be laid off. One workers’ rep- and the US planned to sign an agreement Calleja Crespo met with the most powerful resentative said they did not want to end up in June to introduce mutual recognition US opponent to ownership liberalisation, with the system of Europe, where low-budget of each others’ airworthiness certificates, Congressman Jim Oberstar, chairman of carrier Ryanair has been accused of ‘forum thereby saving airlines duplicative approval the US Congress’ Transportation Commit- shopping’ by basing itself in the country with processes (see Europolitics 3328). Similar tee, and invited him to attend the informal the weakest worker protection regime. agreements with Canada and Brazil were meeting of EU transport ministers in Brdo, Asked about US concerns of growing in the pipeline, he said. Slovenia, on 5-6 May. night-flight restrictions in Europe, the The Open Sky II talks will be launched There are calls from some in the US air- EU’s Calleja Crespo said “ultimately it is in Ljubljana, Slovenia, with a deadline of line industry to scrap the US law that bans the responsibility of the member states and November 2010 for reaching agreement. If foreign nationals acquiring more than 25% local authorities” to introduce such bans they fail to conclude a deal, the EU or an voting shares in a US carrier. “The restric- “after going through an internationally EU member state can suspend the Open tions make no sense in today’s world,” one agreed procedure involving consultation Sky I accord, which entered into force on 30 airline representative said. “Air France-KLM and cost-benefit analysis”. He defended March 2008 (see Europolitics 3498). n www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3511 Wednesday 16 April 2008 13

Climate change/Kyoto Protocol Clean Development Mechanism passes 1,000th project milestone

By Anne Eckstein nism (CDM) has reached its 1,000th proj- With one thousand projects in 49 coun- ect milestone with an energy efficiency tries in just two and half years, the CDM Created in the framework of the Kyoto project in Andhra Pradesh (India), which – through which, in exchange for investing Protocol on the reduction of greenhouse is expected to reduce carbon dioxide emis- in green technologies in developing coun- gases, the Clean Development Mecha- sions by more than 34,000 tonnes annually. tries, developed countries benefit from

CO2 credits – has moved from concept to tion, identical to CDM but aimed at tran- reality. According to Rajesh Kumar Sethi, Background sitional economies) – and the European chair of the UN’s CDM Executive Board, Directive 2004/101/EC (modification of Emission Trading Scheme (ETS). It sets who presented the first report on the CDM Directive 2003/87/EC establishing an out the recognition by the ETS of credits in Bonn on 14 April, to date the mecha- Emission Trading Scheme for greenhouse generated through these mechanisms, nism has generated €135 million “certified gases in the European Community) links broadens the range of options and reduces emission reductions” (CERs – a unite of

the mechanisms of the Kyoto Protocol the cost of measures allowing EU member measure equivalent to one tonne of CO2) project – CDM and JI (Joint Implementa- states to meet their obligations. that the investors can use to solidify their obligations under this protocol. n

Weapons of mass destruction EU supports IAEA and WHO on nuclear and biological security The EU Council adopted, on 14 April, security and control of radioactive mate- with a view to preventing unauthorised a joint action in support of the Interna- rials; and strengthening third countries’ access to and use of such agents and toxins tional Atomic Energy Agency (IAEA) in capabilities for detection and response to for malicious purposes. The projects will the areas of nuclear security and verifica- illicit trafficking in radioactive materials. address the following areas of concern for tion. It ensures continuity of cooperation The EU will contribute €7.7 million to the accidental and deliberate spread of between the EU and the IAEA and builds the implementation of these projects. diseases: the risk of terrorists having access on the work achieved under previous joint The Council also adopted a joint action to dangerous biological pathogens/toxins; actions. in support of the World Health Organisa- the respect of biosafety and biosecurity The EU will support the IAEA’s activi- tion in the area of laboratory biosafety and standards in laboratories; and the preven- ties through projects aimed at: strength- biosecurity. tion of laboratory incidents and accidental ening national legislative and regulatory Under this joint action, the EU will con- releases of dangerous biomaterials due to infrastructures for the implementation of tribute to the implementation of the Bio- inadequate practices in laboratories and international instruments in the areas of logical and Toxin Weapons Convention other facilities. nuclear security and verification; assist- through activities related to the safety and The EU will contribute €2.1 million to ing third countries in strengthening the security of biological agents and toxins, the implementation of these projects. n

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In Brief

Sugar talks authorised of the Commission and a Council Africa, Germany, Australia, Brazil, Canada, The EU Council, on 14 April, authorised decision should be secured, with optional China, the European Commission, South the European Commission to open agreement from the European Parliament Korea, the United States, France, India, negotiations with the ACP (African, after a hearing of the candidate before the Indonesia, Italy, Japan, Mexico, the United Caribbean and Pacific) producer states and competent committee. This procedure has Nations, the United Kingdom, Russia and with India on guaranteed prices applicable just been followed in the case of the new the European Union. (AEC) to cane sugar from these countries in the Health Commissioner, Androula Vassiliou. delivery periods from 1 July 2008 to 30 Her predecessor, Markos Kyprianou, was Merkel discusses treaty in Dublin June 2009 and from 1 July 2009 to 30 appointed Cypriot minister for foreign On 14 April, the German chancellor visited September 2009. Under the sugar protocol affairs. (CSA) Ireland to argue in favour of the Lisbon to the ACP-EC partnership agreement and Treaty. On a whistle-stop trip to Dublin, the EEC-India cane sugar agreement, the Customs Union turns 40 accompanied by ten top leaders of the EU undertakes to purchase and import The European Customs Union will European People’s Party (EPP), Merkel quantities of sugar at guaranteed prices, mark its 40th anniversary on 1 July 2008. demonstrated the need to ratify the new which are negotiated annually. To celebrate this event, the European treaty and the benefits to be gained from Commission has launched a web site it by Europeans. Vis-à-vis the current Switzerland in the SIS dedicated to this topic. The launch economic climate, the EPP leaders took The EU Council adopted, on 14 April, two of the site marks the beginning of a the opportunity to urge the EU to go decisions on Switzerland’s participation in communication campaign to highlight forward in order to take on the challenges the Schengen Information System (SIS). the important but often invisible role of of globalisation. On the fiscal level, EPP Firstly, a decision amending a decision from the Customs Union in protecting citizens Vice-President Enda Kenny welcomed 2000 on the establishment of a financial and facilitating trade. The site is currently the recent adoption of an EPP report regulation governing the budgetary available in English. French, German, reaffirming its support for straightforward aspects of the management of contracts Italian, Spanish, Polish and Hungarian tax competition in the Union. This relating to the system (SISNET) and, versions will also be available soon. See document had provoked embarrassment secondly, a decision amending the financial ec.europa.eu/taxation_customs/40customs/ within the EPP group at the European regulation on covering the installation and index_en.htm Parliament, since the document made no maintenance costs. reference to the Common Consolidated Major economies to meet on Corporate Tax Base (see Europolitics 3447 Frattini to join Berlusconi’s energy and climate and 3457). (CGA) cabinet The third meeting of the world’s major The Italian right, led by Silvio Berlusconi, economies to discuss energy and climate Classical swine fever in Slovakia was victorious in the general elections on change, based on the model of the G8, The European Commission adopted, 13 and 14 April. The 71-year-old leader is being held in Paris from 16 to 18 April. on 14 April, urgent protection measures announced that he would present his The United States decided, in May 2007, to prevent the further spread of classical government later this week, with EU to organise a series of meetings bringing swine fever (CSF) after the detection of Justice Commissioner Franco Frattini as together the countries that are the biggest an outbreak in a pig farm in the Slovakian his foreign affairs minister. Frattini had emitters of greenhouse gases (GHG), with district of Levice over the weekend. No pigs taken leave from 14 March to 15 April to a view to encouraging agreement on a post- or pig products can be transported from and dedicate himself to the election campaign. 2012 scheme that could include a long- to pig farms in Slovakia, nor can they be Questioned on this matter on 15 April term goal. The scheme could also include transported to other member states or third in Brussels, a European Commission medium-term targets defined at national countries. However, derogations on the ban spokesperson said that this would not level and sector-specific approaches to on movement are possible for pigs intended disrupt the institution’s work. If this reducing GHG emissions. Washington for direct slaughter within Slovakia. appointment were confirmed, it would be wishes to reach agreement by the end of necessary to follow the procedure set out 2008. Environment Commissioner Stavros in the treaties for when a commissioner is Dimas is taking part in the discussions, on to be replaced mid-term: a new candidate 17 and 18 April, and will chair the working should be proposed by the member state session, on 17 April, on sectoral approaches. concerned, the agreement of the president The conference will be attended by South www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3511 Wednesday 16 April 2008 15

Open forum The fate of Yahoo! also concerns Europeans

By Spyros Pappas, lawyer and American, seek to ban. On the other the market, such an agreement, irrespective with the Athens and Brussels bars* hand, the combined share of Yahoo! and of the chosen form, would firstly raise a pre- Microsoft is only 25% in this market. A sumption of illegality and would very proba- The public offer made by Microsoft three Microsoft-Yahoo! merger would serve to bly lead to the conclusion that the resulting months ago to buy Yahoo! arouses numer- combine internet traffic and create a viable behaviour is abusive and therefore illegal. In ous concerns from different points of view competitor to Google in online advertis- any case, it is essential, as US Senator Herb which cannot leave Europeans indifferent. ing, whether it is linked to internet users’ Kohl said, that this arrangement is meticu- The usual approach of closed-door nego- searches or not. Microsoft and Yahoo! are lously prepared before its implementation, tiations which surround a company merger small in this market (with combined adver- so that there is no irreparable damage to took on an unexpected dimension with tising revenues of 25% in the USA, and 5% competition. Google’s surprise announcement that it was in Europe). As a result, the two companies • Labelling the deal an ‘outsourc- looking to form an alliance with Yahoo!. would then provide effective competition ing agreement’, rather than what it is, ie Google is the first search engine in the world against Google, to the profit of advertisers, an ‘acquisition’ or an ‘agreement not to and the first beneficiary of revenue from creators of online content, and consumers. compete’ would be pointless, for regula- online advertising. Yahoo! is the sector’s Isn’t it natural that such giants want tors would examine the substance, rather number two. It is to be expected that inter- to exploit online advertising which has than the form, of the deal. An outsourcing net stakeholders are seeking to reposition become the internet’s stimulant? agreement would sideline Yahoo! as a com- themselves given the growing importance All the more reason not to dismiss petitor and allocate approximately 90% of of online advertising1. The economic model the case at hand. Google is already the searches to Google, thus ending any effec- for the web 2.0 – which designates all the dominant search engine. In the mon- tive competition prospects. In this respect, initiatives to allow internet users to interact etisation of searches (sponsored links), it is also worth mentioning that implemen- with each other – is based on this source of Google’s global market share is 75%, and tation in phases through the introduction income which increases 30% per year. constantly growing. According to public of a ‘pilot programme’2 does not make an The war between these colossuses can sources, Google attracts more than 65% otherwise illegal agreement legal. therefore remodel the web. In the interest of searches made by internet users in the • Google cannot orchestrate a merger of European consumers, these develop- USA, and more than 80% in Europe. with Yahoo! through a third party which ments must be followed closely as regards Together, Google and Yahoo! carry out would have the same effect as a merger EU law. Here, I give clear and concise about 90% of web searches. Anti-trust or an outsourcing agreement. As anti- answers to some fundamental questions. laws are there to prevent such an accu- trust Professor Barak Y Orback reportedly How will the EU competition authori- mulation of market power. We need more stated: “Even passive investments would ties see these possible connections? competition, not the contrary. give Google direct interests in Yahoo! and In terms of online advertising, Google Which provisions in these anti-trust raise competition concerns”. is the dominant player. Allowing it to rein- laws would apply here? • Even more significantly, from the per- force that dominance through an agree- A Google-Yahoo! merger would very spective of anti-trust regulators, any deci- ment with its competitor Yahoo! would likely violate Section 7 of the Clayton sion to absorb Yahoo!’s search query share eliminate choice in this market, and choice Act. Likewise, any outsourcing agree- into Google’s advertising platform would is fundamental to ensuring consumer wel- ment would involve Sections 1 and 2 of ensure that no other company could reach fare, innovation and growth. Indeed, indus- the Sherman Act, as well as corresponding the scale necessary to mount a credible try and legal experts agree, on principle, that provisions in EU law – Articles 81 and 82 competitive alternative to Google. n such an agreement would be illegal: . This of the EC Treaty. would be a perfect example of the type of Why would outsourcing be banned? (*) www.pappaslaw.eu agreement which anti-trust laws, both EU • Google should not be allowed to carry (1) Online advertising today represents €25 to out indirectly what it is banned from doing €30 billion per year and should double by 2010. directly. An outsourcing agreement, orches- (2) Yahoo! has announced its intention to trated by Google and Yahoo!, would consist, test an alliance with Google by integrating for example, in paying Yahoo! off so it gives advertisements placed by Google into pages up its advertising business to the profit of its of its search engine on its US site. In this dominant rival. It is what anti-trust laws call agreement, Yahoo! would keep the majority of a ’bare’ agreement not to compete. Nev- Google’s takings and Google would receive the ertheless, it would be a cooperation agree- minority as commission. ment which would most likely lead to coor- This ‘Open forum’ welcomes contributions dinated competitive behaviour between the from all EU professionals who would like to

March 2008, Net Applications Search Engine Share Trend, Top parties. Considering Google’s position in express their opinion on an EU affairs topic.

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EUROPOLITICS N° 3511 Wednesday 16 April 2008 17

EU Agenda

Wednesday 16 April n 15:00 Mr Vladimír Špidla at the European signature of a Memorandum of Understanding on Co-operation in social European Commission fields with Minister Patrus Ananias, Weekly meeting Brazilian Minister of Social Development Parliament Brussels, 9:00 - Photo opportunity The President’s diary n On the agenda: n 16:00 Mr Vladimír Špidla speaks at a 9:15-10:00 Brussels - Directive on advertising and translation roundtable on Globalisation and Social n 9:15 - Meeting with the Prime Minister requirements for certain types of companies Progress at the SIMGLOBE Conference of Iraq followed by a press point - Directive on certain disclosure (Charlemagne) requirements for medium-sized companies n 16:30 Mr Peter Mandelson meets Parliamentary committees and the requirement to establish with Mr Kursad Tuzmen, Turkish Trade Committee on Foreign Affairs consolidated accounts Minister 10:00-11:30 Brussels, PHS 4B001 n 8:00 Mr Andris Piebalgs meets with Mr n Extraordinary joint meeting with the Travel and visits Hussain Ibrahim Saleh Al-Shahristani, ‘Permanent ad hoc Delegation for relations n 12:00 Mr José Manuel Durão Barroso Iraqi Minister of Oil with Iraq’ receives Prime Minister of Iraq Mr Nouri n Discussion with Nouri Al-Maliki, Prime Al Maliki + 12:40 VIP corner Minister of the Republic of Iraq n 16:00 Mr José Manuel Durão Barroso at the Conference Humanistas Court of Justice (Borschette Centre) First Chamber n 17:30 Mr José Manuel Durão Barroso 9:30 Council of at the Conference ‘a social Europe fit for n Hearing C-252/07 Intel Corporation globalisation’ (Charlemagne) Approximation of laws Ministers n 19:00 Mr José Manuel Durão Barroso Interpretation of Articles 4(4)(a) and COREPER I receives Mr Yves Leterme, Prime 5(2) of Directive 89/104/EEC: First Brussels Minister of Kingdom of Belgium Council Directive of 21 December 1988 n 16:00 Mrs Viviane Reding receives Dr. to approximate the laws of the Member COREPER II Elfriede Sole, Hofrätin of the Rundfunk States relating to trade marks (OJ 1989 Brussels und Telekom Regulierungs GmbH L 40, p. 1) - Earlier mark having a Austria reputation - Criteria to be taken into Concert by the Camerata Slovenica n 17:00 Mr Stavros Dimas receives account in order to establish the existence ensemble Mr Reinhard Loske, Minister for of a connection within the meaning of Abbaye Neumünster Cultural Centre, Environment of the Free Hanseatic City Case C-408/01 Adidas-Salomon AG and Luxembourg of Bremen Adidas-Benelux BV Slovenian music creativity will be presented n 15:00 Ms Danuta Hübner receives Mr by the Camerata Slovenica ensemble George Soros Third Chamber which brings together the most important n 14:00 Speech by Mrs Androulla 9:30 Slovenian music interpreters in different Vassiliou at the Alcohol Forum n Hearing C-219/07 Nationale Raad compositions, always tailored to the concert (Borschette Centre) van Dierenkwekers en Liefhebbers and programme. On this occasion, the concert n 12:30 Mr Louis Michel participates Andibel will feature a string sextet (violinists Primož in the breakfast debate organised in the Environment and consumers Novšak and Maja Savnik, viola players Mile framework of the ALDEPAC (Asian Reference for a preliminary ruling Kosi and Mateja Ratajc, cellists Ciril and Liberal and democrats) seminar with - Raad van State van België (Belgium) Igor Škerjanec). In addition to compositions the ‘Council of Asian Liberals and - Interpretation of Article 30 EC and of by Richard Strauss and Tchaikovsky, they Democrats’ (Hôtel SAS) Council Regulation (EC) No 338/97 will perform a string sextet by Uroš Krek, n 15:00 Mr Louis Michel participates in of 9 December 1996 on the protection one of the most important Slovenian the conference (debate) ‘Europe Direct’, of species of wild fauna and flora by composers of the 20th century. ‘The EU, an international peace-keeping regulating trade therein (OJ 1996 L 61, force in the world’ (Braine-le-Comte) p. 1) - National legislation providing a

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list of species which may be held in the n Judgement T-486/04 Michail v Member State concerned, whose effect Commission is to rule out the holding of the species Staff Regulations of Officials - Staff cases Conferences and referred to in Annexes B, C or D to the regulation - Holding authorised in other 9:30 seminars member states whose legislation is in n Hearing Joined Cases T-292/02, T- 16 April, Brussels conformity with the regulation 297/02, T-300/02, T-301/02, T-309/02, n Housing solutions for an ageing T-189/03, T-222/04 Confservizi v population Fourth Chamber Commission Subject: The aim the conference is to 9:30 State aid have a state of the art on the ageing n Hearing C-310/07 Holmqvist Annulment of Article 2 of the and housing needs through European Social policy Commission’s decision (C-27/99 (ex expertise and presentation of innovative Reference for a preliminary ruling - NN 69/99)) of 5 June 2002 declaring practices in the field of housing and Lunds Tingsrätt - Interpretation of Article incompatible with the common market ageing. 8a of Council Directive 80/987/EEC of the aid scheme provided for by Italian Organisers: CECODHAS and Urban 20 October 1980 on the approximation legislation in the form of tax exemptions Housing Intergroup of European of the laws of the member states relating and loans on preferential terms granted to Parliament to the protection of employees in the public service undertakings the majority Contact: CECODHAS secretariat event of the insolvency of their employer shareholdings in which are publicly-owned +32.2.541.05.67 (OJ 1980 L 283, p. 23), as amended by and, alternatively, annulment of Article [email protected] Directive 2002/74/EC of the European 3 of that decision, ordering the Italian Venue: A5G2, Altiero Spinelli, European Parliament and of the Council (OJ authorities to recover the aids granted Parliament, Brussels 2002 L 270, p. 10) - Wage guarantee for a worker employed in a road haulage 16 April, Brussels, 17:30-19:00 undertaking having its head office and n Energy at Stake! only establishment in a member state Economic and Third Liberalisation Package: Scenarios and which carries out deliveries of goods for the Next Decade between the member state of origin and Social Committee Subject: This is the second of three other member states 16-18 April, Lima, Peru debates organised by the European n Fifth meeting of the organised civil Movement International in association society of the EU, Latin America and the with ENEL. These debates aim to Caribbean, as a contribution to the next promote dialogue between stakeholders of Court of First EU-LAC Head of State Summit the world of politics, academia, industry and civil society concerning the future of Instance 16 April, Vienna, Austria the European energy market. First Chamber n 3rd meeting of the EU-Croatia Joint Organisers: European Movement 9:15 Consultative Committee (JCC International n Judgement T-181/05 Citigroup and Contact: Chiara Popplewell Citibank v OHMI - Citi (CITI) [email protected] Intellectual property Venue: Stanhope Hotel, Rue du Community trade mark - Action brought Committee of the Commerce 9, 1000 Brussels by the proprietors of the national and www.europeanmovement.org international word and figurative marks Regions containing the term ‘CITI’ in respect of n The Role of the Family in the services in Class 36 against Decision R Regions: The results of the ‘Family 173/2004-1 of the First Board of Appeal Network’ of the Autonomous Province of the Office for Harmonisation in the of Trento Internal Market (OHIM) of 1 March Room JDE 70 15:00-17:00 2005 annulling in part the decision of the Organiser: Eurorégion Trentino – Tyrol Opposition Division refusing to register du Sud - Tyrol the word and figurative mark ‘CITI’ in To register, contact: M. Rodaro Vittorino respect of services in Class 36 in the E-mail: [email protected] context of the opposition filed by the Tel: +32 743 27 00 To announce your events on these pages, applicants Fax: +32 742 09 80 contact: [email protected]

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20 Wednesday 16 April 2008 N° 3511 EUROPOLITICS

Interview with MEP Toine Manders Running out of time on energy market package

By Dafydd ab Iago plenary. In IMCO, we voted for full then these dominant companies claim unbundling in the gas market. For elec- they do not have spare capacity. This Former lawyer Toine Manders tricity, we mentioned an alternative is just to keep newcomers out. Frankly, (ALDE, Netherlands) is not the only whereby full ownership unbundling I feel that Germany and France want, MEP to say time is running out for this would be obligatory if no functioning once again, to reward those companies Parliament to conclude the European that have misbehaved by giving them Commission’s internal energy market six or more years to adapt. package before election fever sets in. Nonetheless, Manders, a strong voice The rapporteur on the electricity for ownership unbundling in the Inter- market, Eluned Morgan (PES, UK), nal Market Committee (IMCO), still wants the regulatory authorities to hopes for a vote in May in the lead have the power to limit ‘dominant’ Energy Committee (ITRE) and in the companies to 20% of the ‘relevant’ plenary in June. market share via medium-term plans. Do you agree with that? What is your feeling as to the time- I don’t think Mrs Morgan’s solution table for the internal energy market is the panacea to address the problem package? of dominant market players. We have My feeling is that we may not get a an excellent commissioner dealing vote or a clear vote by June. It is a very with competition. If there is abuse of complex issue, there are over 1,000 a dominant position, it is up to Neelie amendments. I have not even seen Kroes and her team to deal with it. © DR a Dutch translation. So most likely Manders: “This is clearly a fight on national lines” The definition of a dominant position this package of reports will have to depends on the market share and has be dealt with under the French Presi- market comes six years after the imple- nothing to do with the number of con- dency. Looking at the timetable, this mentation of this directive. Secondly, sumers. Therefore it should be assessed would bring us up to six months before we ask the Commission to come for- country by country. the next European Parliament elec- ward with the Charter for Consumer tions. To be honest, politicians will be Rights. It was announced last year by Do you see the need for a ‘cannibal thinking about their constituencies. Commissioners Meglena Kuneva and clause’ to prevent companies from Andris Piebalgs, but the work on it non-unbundled markets, such as How do the divisions run when seems to have stopped. As for the recit- France and Germany, competing in discussing the energy market? als, we voted for a collective redress unbundled markets like the UK and This is clearly a fight on national lines. mechanism for consumers, but this is the Netherlands? For instance, you see a lot of German something that should be addressed in I am not particularly in favour of such and French MEPs against unbundling. a separate legislative proposal. a cannibal clause but it may become But the balance of forces is changing. a political reality if France and Ger- Those opposing ownership unbun- Some say unbundling will not lead to many keep pushing for their alterna- dling in the Council no longer have better prices for consumers. How do tive. Those remaining seven countries a blocking minority. And even within you respond to that? opposing the idea of unbundling face Germany, energy giant E.ON has pro- Unbundling is not a goal in itself. I 20 who support it. We cannot let cer- posed to sell off its grid. This undercuts want us to achieve a well functioning tain politicians continue to give domi- the German government’s position and internal market for energy. We also nant market positions to major energy Chancellor Angela Merkel was very need a guarantee for supply. Other companies. The Dutch economy, for annoyed about that. important points include transparent instance, pays millions extra as it is price setting. We need to know exactly not possible to buy energy from other How significant is the IMCO vote, of what we are paying for. We politicians suppliers as well as due to the lack of 9 April, to introduce a further alterna- should not give dominant energy com- competition and interconnection. n tive to ownership unbundling for the panies yet another five or ten years electricity market? to make changes. Energy giants in To be honest, the IMCO opinion is Germany, for instance, say they have (1) The lead committee for the internal not that important1. But it does give “effective” unbundling. But when a energy market package is the Energy an indication what may happen in the third party wants to use their network, Committee (ITRE).

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