EU in Asia Pages 14-19 EUROPOLITIcs

The European affairs daily Friday 18 September 2009 N° 3820 37th year

Focus Agriculture Obama scraps Commission presents mini-package of missile shield measures to cope with dairy crisis

By Brian Beary in Washington By Luc Vernet Article 186 of the Single Common Market Organisation, which will allow it to react Proof that the privileged relationship Agriculture Commissioner Mariann more speedily, under its own authority, Washington had with Eastern or ‘new’ Fischer Boel presented to the Euro- during times of market disturbance. In Europe is over is in. On 17 Septem- pean Parliament, on 17 September in general, explained the commissioner, ber, US President Barack Obama Strasbourg, a mini-package of measures Article 186 will offer the possibility of put- announced he was scrapping a major straight out of her July report on coping ting temporary measures in place almost policy priority of his predecessor, with the dairy crisis. The commissioner immediately to stimulate demand and/or George Bush: the deployment of ten reiterated that “the question of a freeze in limit milk marketing. missile interceptors in and a milk quotas has been definitively ruled out The Commission intends to present, radar system in the Czech Republic. and there is no question of reactivating the in the coming weeks, a change in the The project had caused deep divisions use of market instruments from the past, rules for national aid to the advantage of in Europe, with Russia staunchly which have proven to be costly and inef- all agricultural operators due to their dif- opposed and many others also fective”. She was alluding to the requests ficulty obtaining credit as a result of the considering it a bad idea. by a number of member states, particu- ongoing financial crisis. This proposal will Obama justified the reversal, saying larly France and Germany, for an increase raise the national aid ceiling from €7,500 the latest US intelligence showed the in management aid (public intervention, to €15,000 until the end of 2010 for all threat of an intercontinental missile export refunds). operators faced with the credit crunch. attack from Iran - the main motivator The Commission will first extend to the The EU executive also plans to change for the project - had diminished. Iran dairy sector the provisions contained in the operation of (continued on page 6) was more advanced in developing short and medium-range missiles, he said. US Defence Secretary Robert Gates Milk strike The movement began in France and - who proposed the Polish-Czech proj- More than 40,000 European farmers quickly spread to . Calls for ect to Bush in December 2006 - said are participating in the European milk a strike or spontaneous actions have mobile, sea-based rather than fixed strike, announced officials of the Euro- since been heard in Germany, Austria, missile interceptors were better suited pean Milk Board (EMB), on 16 Sep- Spain, Northern Italy, Luxembourg, to tackling the current missile threat. tember in . “Despair is push- the Netherlands and Switzerland, Gates added that “delays in the Czech ing more and more producers to join according to the EMB. and Polish ratification process” were the movement,” said EMB President The agricultural association Via Campe- a factor in the U-turn. The US was not Romuald Schaber at a press confer- sina is pressing for the convening of scrapping missile defence in Europe per ence. He hopes that the Commission a special summit of EU heads of state se, he insisted, adding consultations had and political leaders will take inspira- and government on the milk crisis. The begun with “allies, starting with Poland tion from the “concrete proposals” heads of state were already holding an and the Czech Republic,” to place some drawn up by the organisation, which extraordinary summit on the economic interceptors on land by 2015. represents 100,000 milk producers. crisis, on 17 September in Brussels.

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Contents N° 3820 Top Stories

EU in Asia Pages 14-19 Financial services, banks, Enlargement Insight: EU in Asia insurance EU/Albania: Rehn urges Berisha Economic giant, political dwarf...... 14 G20: Commission: Employment to continue reforms towards EU...... 9 Union? What Union?...... 16 and bonuses key issues in Pittsburgh...... 4 In quest of an Asia-Pacific strategy...... 17 Financial supervision: EU executive Trade policy ASEM process has long way to go...... 18 set to release “detailed proposals”...... 4 EU/G20/Trade: Doha talks in Interview with Park Sung Hoon, Geneva leave Europeans disappointed ..... 9 professor of economics at Korea Business & competitiveness EU/US: Mounting concern University: “EU must do Telecommunications: EU exec adopts over planned ten dollar tourist tax...... 10 more in Asia”...... 19 guidelines for public funding of broadband networks...... 5 In Brief BusinessEurope counts on Barroso...... 11 Jurisprudence: Financial markets Sectoral policies Eurozone external trade Court clarifies concept of ‘insider Agriculture: Commission presents surplus at 12.6 bn euro...... 11 dealing’...... 20 mini-package of measures to cope Ireland links national with dairy crisis...... 1 qualifications to EQF...... 11 Energy efficiency: Ecodesign Probe into financing of EP buildings...... 11 moves to computers and monitors...... 6 EP on access to SWIFT data...... 11 Energy: Parliament calls EIB loan for social housing in France...... 11 again for increased security...... 7 ETUC wants “guarantees” Agriculture: Breeders remain hostile from Barroso ...... 12 to new rules on animal transport...... 7 EIB energy loan in Italy...... 12 Dragados cleared to buy Pol-Aqua...... 12 Institutions 2010 budget: Commission EU Agenda...... 13 critical of some of Council’s cuts ...... 8 Commission/Parliament: Socialists under pressure to support Barroso?...... 8

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G20 Commission: Employment and bonuses key issues in Pittsburgh

By Sarah Collins to be agreed by EU leaders at the Council, (€3.4 trillion), but said that they would “put says that the G20 should commit to “bind- in place credible exit strategies”. The draft The has said the ing rules for financial institutions on variable Council conclusions say that exit strategies employment crisis and bankers’ bonuses remunerations backed up by the threat of “must be agreed now and implemented in should be the main priorities of G20 leaders sanctions at the national level”. Sources at a coordinated manner as soon as recovery meeting in Pittsburgh, on 24 and 25 Sep- the Council said that while the language takes hold, taking into account the specific tember. The EU executive’s key messages of the document could change during the situations of individual G20 members”. to the G20 summit also include the need to dinner meeting, the substance was likely to The EU’s fiscal stimulus amounts to 2.5% formulate exit strategies, a conclusion of the remain intact. of the bloc’s GDP, or around €300 billion, Doha round of international trade talks and a “[Pay] is a key issue to ensure not just but the Commission says it goes up to 5% deal on financing climate change. Commis- that we have smoothly operating finan- when automatic stabilisers (unemployment sion President José Manuel Barroso met the cial markets, but markets that are based and social benefits) are taken into account. 27 EU heads of state and government at an on ethical principles. We need both ele- However, the latest economic forecast extraordinary European Council in Brussels, ments in place if we are to ensure sus- from the EU executive, while more upbeat late on 17 September, and was scheduled to tainable confidence for the future,” the than previous reports, predicts a 4% contrac- flesh out the details of the executive’s position Commission said, on 17 September. tion in growth across the bloc this year. The next week before travelling to Pittsburgh. A Commission is saying that while Europe spokesman for the Commission said ahead of EXIT STRATEGIES may be on the way out of the recession, it the Council meeting, “This is the moment Talks on exit strategies will also be central is still unsure how long the positive signals for the EU to prepare its position”. to the meeting, although they will be dis- will last. “We are still fully involved in the He said the EU must “exert pressure” on cussed in more detail at next month’s infor- economic recovery process,” the spokesman its G20 partners to implement all agreements mal gathering of EU finance ministers in said. “There’s no reason to be complacent made during the last summit in April, “and Göteborg. At the last G20 meeting in April, at this stage. The situation is still fragile, this of course includes the question of pay”. A world leaders committed to a global stimu- and we are particularly concerned about draft communiqué, seen by Europolitics and lus package worth a total of US$5 trillion employment.” n

Financial supervision EU executive set to release “detailed proposals”

By Sarah Collins A Barroso cabinet official told Europol- accounting standards and cracking down itics they would be released on 23 Sep- on tax havens (see Europolitics 3729). They The European Commission is ready to tember unless a decision was taken to also agreed to work together through the release “detailed proposals” on a new finan- change that. revamped Financial Stability Board (for- cial architecture next week, ahead of the The structure of the new system is based merly the Financial Stability Forum) and G20 summit, on 24 and 25 September. on details set out in a report by former the IMF to monitor cross-border crises. According to a Commission spokesman, International Monetary Fund Managing In May, the Commission released a the plans are on the table for the creation of Director Jacques de Larosière in February, communication (COM(2009) 252) setting a macroeconomic European Systemic Risk who has admitted that he went as far as he out how the de Larosière recommenda- Council, or Board (ESRC), to monitor could go in giving the EU-level authorities tions were to be implemented into a two- system-wide risks, and a trio of European binding powers without having to revisit tier system of governance, with the Euro- Supervisory Authorities (ESA), which will the EU treaties. pean Central Bank-led ESRC – without coordinate data from national authorities An industry source told Europolitics that binding powers – watching out for future and broker disputes between cross-border although the proposals would contain “no crises, and a European System of Finan- banks. He said ahead of the extraordinary real surprises” – the de Larosière structure cial Supervision, a network containing the European Council, which is to prepare a has been fleshed out in various communi- ESAs, which have statutory powers, on the European position for the G20 meeting, cations since February – it is still unclear microeconomic level (3761). “The European Commission will have on exactly how they will be presented. In June, EU leaders signed up to the its agenda next week, before the Pittsburgh At an April G20 meeting in London, Commission’s initial plans, although UK summit, certain detailed proposals for a new world leaders vowed to “extend regulation Premier Gordon Brown managed to secure financial supervisory structure at European and oversight to all systemically important a provision stating that the new authorities level. The Commission does expect the EU financial institutions, instruments and mar- would not have the power to order EU gov- as a whole to continue to exert pressure to kets” – specifically by strengthening pru- ernments to bail out ailing banks (3777). make sure that proposals agreed at the G20 dential regulation on hedge funds, capital The 23 September legislative proposals will in London are fully implemented”. requirements, pay, credit rating agencies, need to take this into account. n www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3820 Friday 18 September 2009 

Telecommunications EU exec adopts guidelines for public funding of broadband networks

By Eric van Puyvelde The guidelines explain how public The guidelines nonetheless provide funds can be channelled for the deploy- that when state aid is granted to private The European Commission aims to ment of basic broadband and NGA net- operators, it must strengthen compe- encourage rapid and widespread deploy- works to areas where private operators tition by requiring the beneficiary to ment of broadband telecommunications do not invest. grant open access to the publicly funded networks while safeguarding market They make a distinction between com- network for third-party operators. n dynamics and competition in a sector petitive areas (‘black’ areas), where no that is fully liberalised. Accordingly, on state aid is necessary, and unprofitable The guidelines are available at 17 September, it presented guidelines or underserved areas (‘white’ and ‘grey’ www.europolitics.info > Search = 256785 on the application of EC Treaty state aid areas), where state aid may be justified if rules to the public funding of broadband certain conditions are met. networks. This distinction is also adapted to the Operators and the public authorities case of NGA networks (which are just thus have a clear and foreseeable frame- starting to be developed) by requiring Background work for accelerating and extending the member states to take into account not On 12 June 2009, the Commission deployment of broadband networks. only existing NGA infrastructures but presented a revised draft recom- The guidelines also contain specific pro- also concrete investment plans by tele- mendation on mechanisms designed visions on the deployment of next-genera- coms operators for the deployment of to spread the risk of investments tion access (NGA) networks, which allow such networks in the near future. among investors and operators who public support to promote investment in seek access to NGA networks. This this strategic sector without creating undue Safeguards proposal is part of the European distortions of competition. The guidelines provide for a number of broadband strategy, which the March The Commission explains that, during essential safeguards (detailed mapping, European Council asked the Com- the past five years, it adopted more than 40 open tenders, open access obligation or mission to develop by end 2009 (see individual state aid decisions in this sector, technological neutrality and claw-back Europolitics 3772). thus developing a coherent and consistent mechanisms) as a way of stimulating Investments in broadband networks practice with regard to state support. competition and avoiding the crowding also form an essential part of the The new guidelines build on this expe- out of private investment. European economic recovery plan, rience and on the public consultations Although investments for high speed a sector to which the Commission launched in May and June 2008, on and very high speed broadband networks assigns a budget of 1.02 billion euro which the Commission received around should primarily be driven by private under the European Agricultural 100 comments from the member states, operators, state aid can play a key role Fund for Rural Development (EAFRD) operators and civil society. All these to extend broadband coverage to areas for the development of broadband opinions supported the publication of where market operators have no plans to internet connections in rural areas. guidelines, it adds. invest.

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Dairy crisis support for milk distribution in schools. sion intends to explore the possibility (continued from page 1) For the longer term, the commissioner of providing a legal framework for con- suggests the establishment of a working tractual relations between milk farmers quota buying-up schemes by member group bringing together the Commis- and the dairy industry to better balance states in order to release funds for restruc- supply and demand while safeguarding turing programmes. It proposes that quan- fair competition. tities of milk placed in the national reserve The Commission is Fischer Boel also announced that a should no longer count as part of the considering a legal report on the dairy sector supply chain national quota when calculating a possible framework for contractual would be presented before the end of overrun. In other words, this is equivalent the year. She nonetheless added that to a reduction of the national quota. In the relations between milk “further work will be needed”. “We also event of an overrun, the share of the super- farmers and the dairy have to examine whether the establish- levy corresponding to the national reserve industry ment of a futures market in Europe would be used by the member states to would help make price setting in the finance restructuring. dairy sector more transparent,” she said. The Commission will also propose shortly sion and the member states to examine The commissioner stressed the need to to the Management Committee to include ways of establishing more balanced rela- develop good practices on production milk-based beverages in the programme of tions in the dairy sector. The Commis- and innovation plans across Europe. n

Energy efficiency Ecodesign moves to computers and monitors

By Dafydd ab Iago tops, laptops, thin clients and workstations provided by the industry so far is imma- (but not servers) does not include require- ture and insufficient,” said Toulouse. He The ecodesign process’ consultation ments on ‘embodied’ energy used to make argues it is not clear which companies forum will turn to personal computers, the product, chemical content and recy- would sign up. The monitoring scheme, monitors and displays (on 9 October) as clability (this also true of the regulation too, is rudimentary, with no sanctions for well as imaging equipment and complex for monitors). The draft regulation should non-compliance. Toulouse further criti- set-top boxes (on 12 October)1. The process make Energy Star 4.0 requirements man- cises another draft voluntary initiative on should impose Energy Star requirements datory in 2011. Energy Star 5.0 require- complex set-top boxes as non-transparent as mandatory for computers and monitors. ments (adopted recently) would become on reporting and lacking in ambition. n Imaging equipment, such as photocopiers, the new mandatory level in 2013 (2014 for printers and faxes, face new EU standards thin clients and workstations). (1) Following consultation and studies, the as do complex set-top boxes. With a lower energy saving potential Commission, under the Ecodesign Directive Edouard Toulouse from the environ- and complex product group, the Commis- (2005/32/EC), proposes draft regulations for mentalist organisation ECOS is disap- sion is also only proposing a voluntary ini- adoption by a qualified majority of member state pointed. The proposed regulation for desk- tiative for imaging equipment. “The draft experts in the Ecodesign Regulatory Committee.

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Energy Parliament calls again for increased security

By Dafydd ab Iago accept a Hungarian-inspired clause call- Eastern countries. This should be based on ing on the Commission to take “immedi- genuine technology transfer and capacity- Energy Commissioner , ate action against hostile takeover moves by building aimed at local companies and civil just back from a visit to Baku, Azerbaijan, non-transparent foreign entities in the EU society2. faced a series of familiar requests and state- energy market and to apply strictly the EU Addressing MEPs, Piebalgs combined ments from MEPs over the issue of energy rules on competition”. The resolution cites issues of security of supply with sustainabil- security1. During a 90-minute plenary debate, Russian Surgutneftegaz’s recent acquisition ity and competition. He told MEPs that on 17 September, MEPs expanded at length of a stake in the Hungarian energy com- Nabucco should be supplying gas to Europe on the issue with traditional concerns over pany MOL. The resolution also calls on the from 2014. The July signing of an intergov- the increasing dependence of the EU on Commission to investigate the activities of ernmental agreement on the Nabucco pipe- Russian gas and threats to the EU-favoured “non-transparent” foreign entities, such as line, linking gas fields in source countries gas pipeline Nabucco. Piebalgs also used the CENTREX that recently took a 20% stake Azerbaijan, Turkmenistan and Iraq, was opportunity to speak of a new idea: Desertec. in Austria’s Baumgarten gas trading and welcomed by MEPs, especially in the “con- This project aims at using the Sahara’s storage facility. text of becoming less dependent on Russian vast potential for solar energy, whether via As for garnering the solar potential of the supplies”. Still, MEPs stress the importance photovoltaics or concentrated solar energy. Sahara, the Parliament calls on the Council of a general regime to govern the develop- and the Commission to cooperate with the ment of the gas corridor linking the EU to Suspicious Russian takeovers EU countries of the Mediterranean region new sources in the Middle East and the Cas- MEPs also approved a resolution on and North Africa. MEPs welcome recent pian region that are independent of any one energy security. The text calls for traditional progress made by the Desertec industrial company or pipeline. n desirables, such as Europe speaking with initiative aimed at developing solar energy one voice, developing gas storage, better in the region. MEPs want the EU to adopt (1) Parliament previously adopted a resolution, on dialogue and improving interconnections a coherent approach to the Desertec project 26 September 2007, entitled ‘Towards a common and diversification of supply. New and more as well as make an active contribution to the European foreign policy on energy’ detailed issues, though, appear. MEPs thus development of North African and Middle (2) See www.desertec.org

Agriculture Breeders remain hostile to new rules on animal transport

By Luc Vernet improving the welfare of animals, the new For their part, the organisations campaign- rules on transportation time - a maximum of ing for animal welfare, like Eurogroup for “Clearly unacceptable” is the term used nine hours to slaughterhouses and cycles of Animals, consider it necessary to finally by EU professional agricultural organisa- settle the question of transportation time. “It tions and negotiators to describe the draft is the Loch Ness Monster of animal welfare regulation being drawn up by the European The truck load density policy; it is absolutely essential for the legis- Commission on animal welfare during criteria for cattle would lation to be implemented today,” insists one transportation. They are once again trying to result in a significant of its representatives in Brussels. “There is a prevent its publication. increase in transport costs simple means of implementing it by equip- The reinforcement of animal welfare ping trucks with GPS systems,” he indicates, standards as envisaged by the Commission stressing the “common interest [of his organ- would have “disastrous” consequences on isation] with hauliers”. It is in the interest of the whole of the European meat sector, nine hours and then 20 hours in a row for the professionals who respect the legislation both from an economic and social point other reasons of movement - are just a source to see to it that the law is respected by all, he of view, consider the sector’s professional of needless complications. All the more so as pleads. organisations. The truck load density crite- modifications associated with the legislation ria for cattle, anticipated by the services of set up in 2005 have already cost more than Animal Welfare Intergroup Health Commissioner , €1.5 billion alone in terms of truck compli- British ecologist Caroline Lucas (Greens- would result in a significant increase in ance and a similar amount in administrative EFA) was appointed, on 16 September, as transport costs. Similarly, obligations relat- costs. Professionals are therefore campaign- president of the ’s ing to the structure of trailers and their ven- ing for any new initiatives in this area to be Animal Welfare Intergroup. She will carry tilation would oblige professionals to invest postponed in order to allow sufficient time out this role during the first half of the legis- more than €200 million in their adaptation, for the recently adopted legislation to be set lature with the objective that the intergroup for the pig sector alone. Lastly, on a more up and for a real economic impact study to “continues to be the champion of animal general level, the sector fears that instead of be undertaken on an EU scale by 2011. protection in Europe”. n

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2010 budget Commission critical of some of Council’s cuts

By Célia Sampol in Strasbourg general cuts that fail to take account of three institutions”. An additional €2.4 each one’s particular needs. He there- billion from the 2010 budget is needed The Swedish EU Presidency presented fore hopes that Parliament will take a to finance energy projects for the most the EU’s 2010 draft budget to MEPs at different tack at its first reading in late part and, under the deal worked out by the European Parliament’s plenary ses- October. the Council and the EP, this amount sion in Strasbourg, on 15 September. The Commission has proposed an must be assured by a “compensation The new budget commissioner used the amending letter to update needs under mechanism” to be defined during the opportunity to criticise the deep cuts Heading 4. It is seeking another €95 mil- autumn dialogue under second reading. made in Council at first reading, on 10 lion in commitment appropriations (€60 July. million in payment appropriations) for Savings at Parliament The member states tabled a draft aid to the Palestinian Authority and the The rapporteur-general for the 2010 budget of some €137.944 billion in budget, László Surján (EPP, Hungary), commitment appropriations, ie €612.90 Algirdas Semeta hopes noted that the EU is currently plagued million less than the preliminary draft by a milk crisis and is nowhere near full budget (PDB) presented by the Commis- Parliament will take a employment. Its researchers are also sion, on 30 April. For payment appropri- different tack at first emigrating and differences between ations, they are seeking €120.521 billion, reading regions are increasing. In this context, or €1.795 billion less than the PDB. It is he hopes that “the crisis will enable us normal at this stage of the negotiations to get our house in order and present a for the Council to lower the executive’s city of Gaza, and €50 million (commit- budget that is more comprehensible to preliminary figures since Parliament ment) and 20 million (payment) to help citizens”. raises the amounts at its first reading. Yet the developing countries fight climate The rapporteur for the EP budget, the new Budget Commissioner, Lithu- change. Under Heading 5 (administra- Vladimír Manka (S&D, Slovakia), anian national Algirdas Semeta, who tive spending), the EU executive also explained that the Committee on Bud- replaced Dalia Grybauskaité (elected proposed a “modest increase of only gets had agreed to reduce the institu- president of Lithuania), did not mince 0.9% compared with 2009,” but the tion’s budget to less than 20% of the total his words in the chamber. Council nevertheless cut the Commis- of Heading 5. Savings measures are pro- While recognising that the Council’s sion’s budget, regretted Semeta, who posed: the Strasbourg buildings would cuts “are less drastic than in previ- hopes to see Parliament restore the no longer be guarded between plenary ous years,” he regretted the cuts made initial amounts. sessions (savings of €2 million a year) in Headings 1a (competitiveness), 1b The commission also pointed out that and part of the translation budget would (cohesion) and 4 (the EU as a global the second stage of financing the €5 be placed in reserve and only released partner), “which are a negative signal billion European economic recovery if the institutions prove that they have for growth, employment and accession plan will have to be agreed in Novem- tried to use existing resources (savings of aid”. The EU agencies are also “hit” by ber through “close collaboration by the €11 million). n

Commission/Parliament Socialists under pressure to support Barroso?

By Célia Sampol in Strasbourg to 785. A recalculation would thus reveal votes to be controversial. In fact, accord- that the majority obtained by Barroso during ing to internal sources, the Czech and The absolute majority obtained by José his investiture of 22 July 2004 was 413 votes Slovak Socialist delegations, which Manuel Barroso, on 16 September in Stras- in favour, 251 against and 44 abstentions, ie comprise seven and five elected MEPs, bourg, remains inferior to that of 2004. Espe- 46 votes more than the absolute majority at respectively (twelve in total), were, the cially because, according to internal sources, the time (732 divided by two plus one: 367). day before the vote, under pressure from the Slovak and Czech delegations from the Whereas today, Barroso has 382 votes in their government, via telephone, to vote Socialist group have been under pressure to favour, 219 against and 117 abstentions, ie in favour of Barroso. However, it remains vote for the president of the Commission. only 13 votes more than the current absolute difficult to refer to these countries with- Contrary to what was indicated in our edi- majority (736 divided by two plus one: 369). out naming the twenty-one Spaniards tion dated 17 September (3819), the Euro- His mandate has therefore been renewed and the seven Portuguese from the pean Parliament had 732 - rather than 785 with far less support than five years earlier. group, who also voted for Barroso, con- - MEPs in July 2004. It was only in 2007, fol- This argument is strengthened by the forming to the line of their respective lowing the accession of Romania and Bul- fact that some MEPs from the Socialist prime ministers (six Portuguese, in fact, garia, that this figure temporarily increased group consider these additional thirteen because Ana Gomes refused). n www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3820 Friday 18 September 2009 

EU/Albania Rehn urges Berisha to continue reforms towards EU

By Fabrice Randoux ment are important elements in achieving Union is the greatest and most important our common objective of bringing Albania objective of my cabinet,” declared Beri- Enlargement Commissioner closer to Europe,” writes Rehn in a letter of sha, while presenting his government’s called on Albanian Prime Minister Sali Beri- congratulation to Berisha. programme to the deputies. sha, invested on 17 September by the coun- Berisha, 65, chair of the Democratic Party, Albania officially submitted its applica- try’s parliament resulting from the elections of and the ministers in his cabinet, received the tion to join the EU on 28 April. Rehn had 28 June, to continue the “European agenda of support of 74 MPs out of the 140 seated at the considered this application submission to reforms”. “It is up to Albania to demonstrate Albanian parliament, a vote boycotted by the be premature, calling on Tirana to instead its capacity to move towards the next step in Socialists. The latter are making their partici- focus on implementing the Stabilisa- EU integration, particularly by improving pation in the work of the Albanian parliament tion and Association Agreement, which the rule of law and reinforcing democratic conditional upon the opening of parliamen- entered into force on 1 April. The Swed- institutions. Assuring the independence of tary questions on the results of the elections ish EU Presidency still needs to propose to justice, strengthening administrative capacity of 28 June, which they believe to be marred the Council that the application be trans- and continuing the proper implementation by manipulation. mitted to the Commission in order that it of the Stabilisation and Association Agree- “Albania’s integration into the European may issue its opinion. n

EU/G20/Trade Doha talks in Geneva leave Europeans disappointed

By Fabrice Randoux achieved between now and the end of the Africa) to take part in ‘sectoral agreements’, year,” stressed the same European source, which, on a voluntary basis, are aimed at The Europeans remain disappointed for whom the support of the Americans still completely eliminating tariffs in the 14 after the resumption of talks on the Doha remains “too unclear”. industrial sectors (chemical products, phar- round of international trade talks, which The Doha negotiations, which are to maceuticals or cars). But the took place among chief negotiators, on 14- lower thousands of tariffs and reduce has not spelt out the concessions (agricul- 15 September in Geneva, in the wake of agricultural subsidies in rich countries, tural, for example) that they could make in the New Delhi ministerial meeting, at the have for years come up against North- exchange. start of September (see Europolitics 3810). South confrontations on agriculture and Moreover, President Barack Obama “There wasn’t any breakthrough, just industrial issues. The last ministerial will have to sell any agreement to a Con- some progress on the timetable,” said meeting, in July 2008, failed in particu- gress that is less favourable to free trade one European source. The chief negotia- lar because of opposition between India than before, which leaves the Europeans tors will as of now meet once a month in and the United States on a special safe- sceptical about the chances of an agree- Geneva, with the possibility of a ministe- guard mechanism aimed at protecting ment before the mid-term congressional rial level session “just before or just after” citizens in developing countries in the elections, in November 2010. the World Trade Organisation ministerial case of a sharp increase in the import at the end of November, which will not be flows of some agricultural products. Tensions devoted to Doha. While the new Indian government An increase in trade tensions between The Europeans are also hoping to have is showing a desire to move forward, Beijing and Washington, following a rise a proper discussion at the G20 in Pitts- the Obama administration’s position in customs duties by the United States on burgh, on 24 and 25 September, and not remains unclear. In New Delhi, Trade Chinese tyres, on 11 September, could make do once again with setting the goal of Representative Ron Kirk avoided choos- complicate matters. “It’s an area of con- an agreement in 2010. In the conclusions ing 2010 as a deadline for concluding an cern,” said WTO head . “This that were to be adopted at the preparatory agreement, deeming that it will be “the type of situation increases the risk of a spiral dinner of European leaders, on 17 Septem- contents that will fuel the process and of reprisals,” he added. He recalled that the ber, the EU is calling for the adoption at not a deadline”. two countries were members of the G20, the G20 “of a realistic and ambitious road Under pressure from their lobby groups which was committed to not resorting to map” to reach “an ambitious and balanced (agricultural, industrial and services), the restrictive trade measures during the crisis. conclusion to the negotiations in 2010”. United States is asking developing coun- In a report published on 14 September, tries for more market access than what the WTO said that G20 governments have American doubts was in the complex package on ‘modali- “refrained in recent months from resorting “A strong political commitment is ties’ (calculations of reductions in custom too often” to protectionist measures, but needed that results at a technical level in duties and subsidies) of July 2008. In noted some “slippage,” citing in particu- something of substance, with a timetable particular, they want the large emerging lar non-tariff measures or increased use of that allows the first concrete results to be countries (India, , Brazil and South trade defence mechanisms. n

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EU/US Mounting concern over planned ten dollar tourist tax

By Brian Beary in Washington Disney and Marriott, which make billions states - Bulgaria, Cyprus, Greece, Poland of dollars in profits, he added. An equivalent and Romania - meanwhile have to pay As US lawmakers edge towards enacting bill is being pushed by Democrat Congress- US$131 to enter the US, even for tour- a bill requiring Europeans travelling to man Bill Delahunt (Massachusetts) in the ism, as they are not yet on the VWP. The the United States under the Visa Waiver House, where the Democrats have a major- Commission and member states in ques- Programme (VWP) to pay a US$10 fee, ity of nearly eighty. If that passes, US Presi- tion are working with Washington to end there is growing exasperation among EU dent Barack Obama - himself a Democrat this anomaly and have all EU27 on the diplomats. The European Commission, - is unlikely to veto it despite the diplomatic programme. US citizens travelling to any backed by several member states, is assess- tensions it will cause. EU member state do not need a visa. In ing if the US$10 fee is tantamount to a Diplomats are worried about the growing the case of Greece, it is expected to be visa. If it decides it is, this will spell trouble risk of the entire transatlantic visa waiver added by the end of 2009 as its visa refusal for EU-US relations because the EU will regime unravelling. The EU Ambassador in rate is well under the required 3% thresh- feel obliged to adopt reciprocal measures Washington, John Bruton, in an irate press old. Cyprus should follow soon after, in retaliation. The Commission is already release, noted how the number of European once it begins issuing biometric passports under pressure on this score since January travellers to the US - 13 million in 2008 - and concludes the necessary data sharing 2009 when the US introduced its Elec- is already decreasing, in part because of the agreements with the US. tronic System of Travel Authorisation recession but also because Europeans are For Bulgaria, Poland and Romania, the (ESTA), which makes all VWP travellers deterred by long waiting periods at US bor- path to VWP is trickier. Their visa refusal apply online for a permit to travel. ders. After the 11 September 2001 terrorist rates - although declining - are still over 10% The US$10 fee idea came not from the attacks, the US began fingerprinting and so they are unlikely to be added until 2011 US administration but from the US Con- photographing every visa waiver traveller at the earliest. The latest visa refusal rates gress, in particular the Democrats, who have upon arrival. This has caused considerable are due to be published by the US State solid majorities in the House and Senate. A ill-feeling as some travellers feel they are Department in October 2009. Senate bill was passed by 79-19 votes, on 9 being treated like criminals. In addition, civil But while the visa refusal obstacle may September. South Carolina Senator Jim liberties groups constantly protest about the soon be cleared, another one may then DeMint, one of the 19 Republicans to vote growing list of passenger personal data the emerge. The US Senate is considering against, wrote an opinion editorial in The US administration obliges airlines to provide a bill from Diane Feinstein (Democrat, Washington Post newspaper recently, heap- them with before travelling. California) that would refuse countries ing scorn on the bill, which establishes a entry to the VWP if over than 2% of their fund and non-profit corporation supposedly ONGOING VISA WAIVER EFFORTS citizens overstay their visit while in the to encourage tourism. “Imagine: ‘Come to The US$10 fee would most likely be US. That 2% threshold would also apply America so we can tax you at the airport!’” collected from travellers when they apply to existing VWP countries, so it is plau- wrote DeMint. Foreign travellers would be online for their ESTA, the latter usually sible - though not that likely - that EU subsidising the advertising campaigns of being granted within a couple of min- member states will be removed from, the US travel industry, including firms like utes. The citizens of five EU member rather than added to, the VWP. n

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In Brief

BusinessEurope counts on Barroso Ireland links national EP on access to SWIFT data BusinessEurope, the Confederation qualifications to EQF In a resolution adopted in plenary, on 17 of European Business, congratulated Ireland is the first member state to link its September (and not on 16 September President José Manuel Barroso on his national qualifications to the European as initially planned), the European successful nomination to head the EU Qualifications Framework (EQF) for Parliament laid down its conditions executive for another term, and said, on lifelong learning, which aims to improve for the conclusion of a new interim 16 September, that it counts on him to the transparency of qualifications and agreement with the United States on work on a fresh vision for EU policies. make it easier for people to study or work access to data held by the SWIFT “BusinessEurope expects from the new in another EU country. The EQF is a banking network. MEPs note that data Commission an unwavering commitment new European tool that should make it must only be provided for the purpose to open market principles and to pushing easier to understand and compare the of combating terrorism (see Europolitics forward the reforms needed to create different national qualification systems 3819). The GUE-NGL group did not more growth and jobs in Europe”. The and their levels. The member states are back the resolution tabled jointly by the confederation highlighted its six priorities taking part in this voluntary scheme to EPP, S&D and ALDE, arguing that the for action: fixing the financial system and link their national qualifications levels to guarantees for respect for fundamental restoring credit flows, attract investment the EQF and have committed themselves rights and protection of personal data and innovation in Europe, developing to do so by 2010. Ireland, however, were insufficient. In a press release, a viable exit strategy to excessive public has already finalised its referencing Marie-Christine Vergiat (GUE-NGL, deficits, boosting skills and human report, which explains how national France) regrets that a majority of MEPs capital, bolstering open trade and fighting qualifications levels are linked to the voted against her group’s amendment climate change. EQF. requiring suspension of the agreement with the United States if this country Eurozone external trade surplus at Probe into financing of EP fails to respect fundamental rights or to 12.6 bn euro buildings protect personal data. According to estimates published on 17 The European Ombudsman, P. September by Eurostat, the eurozone Nikiforos Diamandouros, has issued EIB loan for social housing in trade balance with the rest of the world, two recommendations to the European France in July 2009, gave a €12.6 billion surplus Parliament and the European Anti- The European Investment Bank (EIB) (compared with -€3.5 bn in July 2008 Fraud Office (OLAF) concerning the and the BPCE (the central body of the and +€5.4 bn in June 2009). The July financing of EP buildings in Brussels, new French banking group resulting 2009 extra-EU trade balance was a €0.7 following complaints from a journalist. from the merger between the Groupe bn surplus (compared with -€22.4 bn in In the first, he calls on the EP to clarify Banque Populaire and the Groupe Caisse July 2008 and -€4.6 bn in June 2009). its statements concerning the legal d’Epargne) signed, on 11 September, The EU trade surplus fell with the framework for the financing of the Willy a protocol anticipating a €125 million USA (+€15.9 bn in January-June 2009, Brandt and József Antall buildings and loan to the Caisses d’Epargne for social compared with +€32.7 bn in January- asks it to give access to the report of housing. This agreement is part of the June 2008) and Switzerland (+€6.4 bn the consulting firm, the call for tender France Logement Social programme compared with +€9.6 bn). The EU trade and the list of banks contacted by the launched in 2007, to which the EIB had deficit decreased with China (-€65.3 bn developer. In the second, he calls on decided to grant a budget of €500 million. compared with -€72.6 bn), Russia (-€20.6 OLAF to reconsider its investigation On this date, out of a first installment bn compared with -€38.1 bn), Norway concerning the procurement procedure of €250 million, €125 million had been (-€16.8 bn compared with -€26 bn) and for services associated with the financing made available to the Caisses d’Epargne. (-€10.8 bn compared with -€17.9 of the acquisition of the Altiero Spinelli In particular, the operation aims to bn). building. Further information is available respond to the financing requirements of at www.ombudsman.europa.eu social housing bodies.

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In Brief

ETUC wants “guarantees” from EIB energy loan in Italy Dragados cleared to buy Pol-Aqua Barroso The European Investment Bank (EIB) The European Commission granted Now that the reappointment of José and Centrobanca (UBI Banca Group) clearance, on 17 September, to Manuel Barroso as president of the signed a €200 million framework loan, the acquisition of sole control of European Commission is official, the on 17 September, for financing energy Przedsiebiorstwo Robót Inzynieryjnych European Trade Union Confederation efficiency and renewable energy projects. Pol-Aqua S.A. of Poland by Dragados SA (ETUC) wants to see a “clear The loan will primarily be used for of Spain. Pol-Aqua provides construction commitment and guarantees on social small and mid-sized projects but also for services, in particular engineering, waste issues” from him. According to the bigger schemes. In addition to energy treatment, roads and pipelines. Dragados ETUC, “In a period of social insecurity efficiency projects, hydroelectric, wind, is active in construction, dredging, civil that is expected to continue at least photovoltaic and biomass plants will engineering and concessions related to until 2010, social guarantees are more also be eligible. Centrobanca will be roads and railways. necessary than ever”. The confederation responsible for identifying projects, which wants to take him up, in particular, on his will then be submitted to the EIB for recent declarations on “new rules on the approval. implementation of the Posted Workers Directive or even as revision if necessary”.

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EU Agenda

Friday 18 September (Organisation for Economic Cooperation Upcomings and Development) Development Assistance European conferences 19 September, Bydgoszcz (Poland) Parliament Economic and International seminar on ‘Diverse cities, The President’s diary creative cities’ Oswiecim, Poland Social Committee Subject: The concept of creative city n 19:00-19:30: Participation in the 18-19 September, Sofia (Bulgaria) celebrates cultural diversity through the conference ‘1939-1989: Time of guilt and n Public hearing of the Single Market promotion of local heritage. It is based on hope’ Observatory on ‘Bulgaria in the the idea that culture can play an important European Single Market - Civil society role in urban renewal and improvement of findings’, organised in cooperation with daily life. the Economic and Social Council of Organisers: Congress of Local and Regional Council of the Republic of Bulgaria. With the Authorities of Europe and the City of participation of Totyu Mladenov, Bulgarian Bydgoszcz Ministers minister for labour and social policy, and Contact: Tel: +33(0)3.90.21.50.86 Political and Security Committee Lalko Dulevski, president of the Economic – [email protected] (PSC) and Social Council of Bulgaria Venue: Ignacy Jan Paderewski Pomeranian Brussels Philharmonic ul. Andrzeja Szwalbego 6 Brussels, at the EESC - 85-080 Bydgoszcz (Poland) Ministerial conference on the EU n Press conference following the visit to Strategy for the Baltic Sea Region China of President Sepi 25 September, 12:30, Brussels 17-18 September, Stockholm Promoting early language learning: technical press briefing Saturday 19 Subject: With its Europe-wide information European campaign together with various events September being held in key countries, the European Commission wants to put the spotlight on Commission early language learning. The campaign is Travel and visits European mainly directed towards parents. n Participation of Joaquín Almunia in the The spokesperson of will Foro Nueva Economia in Madrid Commission introduce the campaign and a scientific n Speech by Joaquín Almunia ‘EU and Travel and visits expert on the subject of early language G20 strategies for a sustainable recovery’ n José Manuel Durão Barroso visits Ireland learning is expected to be present. at the 4th conference on macroeconomics n Margot Wallström in Budapest: press Organisers: ICWE and the European (Funadación Rafaël del Pino) conference with the editors, within the Commission n Janez Potocnik at the Info Day on MTV campaign against climate change: Contact: Juliane Walter, Tel.: +49 (0)30 the ‘Africa Call’ for research proposals ‘Play to Stop’; speaks at youth forum about 310 18 18-0, [email protected] (Borschette Bldg) climate change (Millenaris Theatre); ‘Play Venue: European Commission, Press n Karel De Gucht receives Etienne to Stop’ MTV concert within the energy Room, Berlaymont (BERL -1) Davignon, former and climate change campaign (Millenaris www.icwe.net n Karel De Gucht receives Eckard Theatre) Deutchser, chair of the OECD

Sold by subscription only © reproduction strictly prohibited in any language www.europolitics.info 14 Insight Friday 18 September 2009 N° 3820 EUROPOLITICS

Insight EU in Asia

Economic giant, political dwarf

By Sébastien Falletti in Seoul opportunities in the fastest growing eco- it is usually ranked number two, behind nomic region in the world. Still, many China. When it comes to investment, The EU has become a key trading European citizens and workers perceive the EU is often the first source of foreign partner of the Asia-Pacific region, but it Asia rather as a threat than an opportu- capital, like in . This ‘surge’ struggles to turn this economic leverage nity. Transforming its growing economic is explained by two factors, according to into political clout. Like never before presence in Asia into tangible political Park Sung-Hoon, professor of economics in history, European and Asian econo- influence remains a key challenge for at Korea University. First, the 2004 and mies have become intertwined over the EU policy makers for the next decade. 2007 enlargements of the EU, which last decade. In 2007, Asian member have mechanically increased the size of countries of ASEM (Asia-Europe Meet- Success stories the EU economy. Secondly, a strategy ing) accounted for 32% of EU exports Contrary to widespread belief, ‘Europe of diversification of exports destinations and absorbed 18% of European exports, Inc’ is doing well in Asia and has been followed by many Asian countries that according to Eurostat. While products expanding its positions and market have tried to reduce their reliance on ‘Made in China’ have been flooding shares over the last decade. During that the US market. shops on the Old Continent over the last period, the EU has overtaken the US in However, the competitiveness and decade, consumers in emerging Asia are terms of trade volume and investment high quality of European products is increasingly attracted to expensive Euro- in most countries of the Asia-Pacific also a key rationale behind this success pean items. The EU’s large firms as well region. Europe has become the first story. Europe is synonymous with high as many SMEs are seizing new business trading partner of Beijing and elsewhere standards for Asian firms and consumers.

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Contrary to the US, the EU has kept a such as that of China, to pursue an effec- the EU and the US in the region. Wash- strong industrial base and is still a leader tive divide and rule strategy against the ington is capable of defending both its in several sectors, such as machinery or EU. political and business interests in a cen- chemicals. In order to catch up with the Each member state naturally stresses tralised manner. Moreover, the key role developed world, Asian firms have been its specificity in order to win contracts, America plays in Asian security provides eager to equip their factories with the investment and eventually jobs, instead an immense advantage when it comes most advanced European machinery, of promoting Europe as a whole. Most to pushing the interests of its firms. This although they often negotiate important Asian business people think first of Ger- explains why Beijing accepted to hold a transfers of technology. For example, many, the UK or France rather than high level economic dialogue with the Korea Aerospace Industries is currently the EU. “The single market is not com- US well before the EU, although the developing a military transport helicopter pleted yet. When it comes to the criti- latter is a bigger economic partner. in joint venture with the French subsid- cal field of investment promotion, the Pressure is thus mounting on EU iary of EADS, Eurocopter. Both compa- leaders, who are threatened by an Asian nies hope to jointly sell the helicopter on political backlash at home. While large the global market from 2012 onwards. Most Asian business European firms are making hefty profits EVOLUTION OF THE EU'S TRADE BALANCE WITH ASIAN ASEM COUNTRIES Meanwhile, the newly enriched Asian people think first of in booming Asia, a majority of citizens consumers are keen to buy European(Mio euro)Germany, the UK or believes that the emergence of China is items, which they see as trendy and putting their jobs at risk. They are urging fashionable. French and Italian luxury France rather than policy makers to take a tougher line , Trade with the World European Union, Trade with ... Asian Asem Countries brands are expanding aggressively their the EU against emerging Asia, stressing the lack operations in the region despite the Share of of protection ofShare the ofEU market. Yearly % Yearly % Imports + Yearly % Yearly % Imports + Year Imports Exports economicBalance downturn and the numerousYear Imports total EU Exports Meanwhile,total China’s EU newBalance assertiveness change change Exports change change Exports cases of piracy and counterfeiting. Driv- national channel prevailsimports in Asia,” Yeo increasingly frustratesexports the Commission 2003 935.270 869.236 ing a German-66.034 car is the 1.804.506 best way to assert 2003 Lay 288.047 Hwee, director of the30,80 EU Centre155.238 in and its services,17,86 including-132.808 DG Trade, 443.285 2004 1.027.522 9,9 952.954 your9,6 economic-74.568 success 1.980.477 in the streets 2004 of , 323.403 told12,3 Europolitics31,47. 173.039 which11,5 have engaged18,16 in a-150.363 major rethink 496.442 2005 1.179.569 14,8 1.052.720 10,5Seoul, where-126.849 featuring 2.232.289 the EU flag 2005 on The 362.754 lack of political12,2 unity30,75 is the weak186.423- of their7,7 policy of17,71 openness.-176.331 Having given 549.176 2006 1.351.745 14,6 1.159.276 10,1the car plate-192.468 is seen 2.511.021as ultimate ‘chic’. 2006 est 417.573 point of the15,1 EU in a30,89 region where208.902 up its12,1 dream of18,02 forging -208.671 a special part 626.474- 2007 1.426.008 5,5 1.239.919 Although7,0 -186.089 Hollywood 2.665.926 dominates 2007 the regional 459.400 integration 10,0 remains32,22 very 228.315 low nership9,3 with Beijing,18,41 the-231.085 Commission 687.715 , international movie market, Europe has and national sovereignty is still the is now ready play tough. But its efforts 6m 2007 692.642 601.010 a competitive-91.632 advantage 1.293.652 when it 6mcomes 2007 golden 220.798 rule. Governments31,88 struggle110.579 to are likely to be18,40 curtailed -110.219by the division 331.377 6m 2008 767.495 10,8 647.429 to7,7 culture,-120.065 tourism and 1.414.924 food, which 6m play 2008 understand 223.914 the 1,4EU’s policy29,17 making118.875 and among7,5 member18,36 states, which-105.039 have too 342.789 Average an essential role in Asian cultures.Average are confused by the number of European many business interests at stake in China annual 11,1 9,3 10,2 annual interlocutors 12,4 they have to face. This to seriously10,1 antagonise the leadership 11,6in growth growth Rivalry factor increases further the gap between Beijing. n However, despite these numerous suc- European Union, Tradecess with stories, the World and being the wealthiest EU tradeEuropean with Asian Union, ASEM countries Trade with ... Asian Asem Countries market in the world, the EU struggles to 1.600.000 500.000 increase its leverage over Asian govern- 1.400.000 ments when it comes to tackling non- 400.000 tariff trade barriers or other discrimina- 1.200.000 tion. Despite having an integrated trade 300.000 1.000.000 policy pursued by the Commission, Europe is often thought of as divided in 200.000 800.000 Asia. Member states compete with each other, pushing their own national busi- 600.000 100.000 ness interests first. This happens at the 400.000 expense of a strong European leverage, complains the Commission. Rivalries 200.000 between EU chambers of commerce -100.000 and national chambers of commerce are another symbol of Europe’s fragile unity -200.000 -200.000 in the field of business. Hence, in South Korea, a key national chamber of com- -400.000 -300.000 2003 2004 2005merce claims 2006 it was not consulted 2007 by the Commission before the launch of the 2003 2004 2005 2006 2007 free trade agreement negotiations with Imports ExportsSeoul. ThisBalance situation allows the most Imports Exports Balance powerful and skilful Asian governments, World excluding Intra-EU trade and European Union: 27 members. ASIAN ASEM Sold by subscription only © reproduction strictly prohibited in any language www.europolitics.info COUNTRIES: Brunei, China, Indonesia, Japan, Korea, Malaysia, Source: EUROSTAT (Comext, Statistical regime 4) 1 DG TRADE 10-sept-08 16 Insight Friday 18 September 2009 N° 3820 EUROPOLITICS

Union? What Union?

By Sébastien Falletti in Seoul the written press remains very limited. people,” said Yeo Lay-hwee, director of Hence, the EU is ranked only between the EU Centre in Singapore. She also If the EU remains a mystery to many the fourth and sixth most important stresses the lack of personnel with genu- European citizens, it does not come foreign partners by the public in Hong ine Asia experience in Europe. as a surprise that it is barely known in Kong, Singapore, Japan, South Korea While Italian, French or German Asia. “The EU is something far, not and Thailand. representatives sell Europe’s goods, like America. I do not really have a pre- It lags far behind the US. This survey delicacies or know-how, the EU is seen cise image of it but it seems a peaceful highlights the gap between the percep- merely as a bureaucratic and ‘faceless’ union,” said Jo Ah-young, a 20-year-old tion and the economic reality since the institution. student in Seoul. “If you want to promote Europe here This reaction encapsulates how the it is actually more effective to organise a majority of the people living in the most “The EU’s invisibility cocktail offering the most tasty EU agri- populated continent of the globe per- raises questions about its cultural products than a conference on ceives the 27-member bloc: a distant and ability to implement an the single market. But it is not easy to harmless entity that raises some kind of convince the headquarters in Brussels sympathy. effective communication of this,” a Commission source posted in While young Asian consumers, espe- strategy” Asia-Pacific told Europolitics. cially female, are attracted to European In order to bridge the gap, the Com- brands and goods as well as the Old mission is opening new EU centres in RANK OF ASIAN ASEM COUNTRIES IN EUROPEAN UNION TRADE Continent’s slow-paced lifestyle, Europe key universities in Singapore, South is never seen as a political actor. Despite EU has become the(2007) second largest eco- Korea, Taiwan and Australia. These the ambition of the European Commis- nomic partner after China in most of institutions are supposed to strengthen sion,European it is not Union, seen asImports a player from either ... Asian in Asemthese Countries countries, overtakingEuropean the Union, US Exports(see theto ... expertise Asian Asem about Countries the EU among the the region or on the global stage. separate article). Yet, the public does not educated population, reaching out Share of Share of “PerceptionsSITC of Rev.3 the EU as a political perceive this growing presence.SITC Rev.3 beyond the academic communities. Mio euro total EU % Mio euro total EU % Balance Product Groups Product Groups actor that is growing in importance, as a importsThe EU’s invisibility in the Asia- Seminars, workshopsexports and conferences champion of environmental causes and Pacific region raises questions about aim at raising the EU knowledge of busi- internationalTOTAL human rights and as459.400 a lead - the 32,22 ability 100,0 of the bloc TOTAL to design and ness people228.315 and 18,41 policy makers.100,0 -231.085 ing developmentAgricultural products aid donor remain16.151 very implement17,23 3,5 an effectiveAgricultural communica products - However,11.052 critics15,20 stress 4,8 their limited-5.099 much inEnergy the shadow of public attention,”4.410 tion1,33 strategy.1,0 While theEnergy Delegations of impact,1.638 since they2,62 fail to reach0,7 a larger-2.772 concludedNon-agricultural Professor raw materials Martin Holland 1.015 the1,11 Commission0,2 haveNon-agricultural limited commu raw materials- audience. 2.366 “You 2,78need to educate1,0 teach1.351- from theOffice/telecom. University Equipment of Canterbury,42.965 who nication77,14 resources,9,4 theOffice/telecom. member Equipment states ers in 4.679high school,”20,26 stresses2,0 Park -38.286Sung coordinatedPower/non-electrical a study on mach. the EU’s 31.600image are39,72 often business6,9 competitors,Power/non-electrical pushing mach. Hoon,41.122 professor 22,08 at Korea 18,0University.9.522 “ in the Asia-PacificTransport equipment region in 2007.37.233 their41,89 national8,1 economicTransport interest equipment first In most28.081 secondary16,97 schools,12,3 the-9.153 EU The Chemicals research, funded by the 24.399 Com - and21,54 doing little5,3 to raiseChemicals Europe’s visibil- is invisible,”28.279 Martin14,96 Holland’s12,4 study3.880 mission,Textiles shows and clothing that the EU is 44.587 almost ity.56,41 In Seoul,9,7 several Textilesembassies and clothing do not revealed,4.216 stressing 12,51 the need1,8 to “focus-40.371 on invisibleIron onand steel TV - the most influential13.482 even33,07 raise the2,9 EU flag.Iron “There and steel is no con- the next6.622 generation 19,08 of the 2,9Asian general-6.860 media - in Asia, and that its presence in certedShare by products effort in to EU 27explain Total Trade the excluding EU Intra-EUto Asian trade. public”. n EU trade with Asian ASEM countries EU Trade with ... Asian Asem Countries Agricultural Non-agricultural Office/telecom. Power/non- Transport Textiles and products Energy raw materials Equipment electrical mach. equipment Chemicals clothing Iron and steel

50.000 44.587 42.965 41.122 37.233 40.000 31.600 28.081 28.279 30.000 24.399 16.151 20.000 13.482 11.052 9.522 6.622 10.000 4.410 4.679 3.880 4.216 1.638 1.015 2.366 1.351 0

-10.000 -5.099 -2.772 -9.153 -6.860 -20.000

-30.000

-40.000 -38.286 -40.371 -50.000

Imports Exports Balance

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8 Source: EUROSTAT (Comext, Statistical regime 4) DG TRADE Agricultural prod.: food&live animals incl.fish, beverages&tobacco, hides, skins&furskins, raw, oil seeds&oleaginous fruits, natural rubber..., cork&wood, silk, cotton, jute&other textile bast fibres..., veget.textile fibres (other than 10-sept-08 cotton)..., wool, crude animal&vegetable materials, oil, fat Energy: mineral fuels etc Manuf.products: chemicals, basic manuf.excl.non-ferrous met, machines, transport equip, misc.manuf. EUROPOLITICS N° 3820 Friday 18 September 2009 Insight 17

In quest of an Asia-Pacific strategy

By Sébastien Falletti in Seoul grammes in Asia can achieve their full ness, which comes on top of a growing potential,” said a communication. number of economic frictions, pres- Despite being the most dynamic eco- Against this backdrop, several Euro- ents a major challenge to the EU. To nomic area in the world, the Asia-Pacific pean commissioners have tried to give quote a recent report by the European region remains the weak point of the more teeth to the Union’s Asia policies. Council for Foreign Relations (ECFR), EU’s still nascent foreign policy. The Commissioner Chris Patten, in charge the EU has lost the upper hand and is 27-member bloc, ambitious to become a of external relations during the Prodi struggling to increase its leverage over global power, still struggles to be recog- Commission (1999-2004), had first- China. Moreover, the ‘China obses- nised as a serious player in a region that hand experience of East Asia, in sharp sion’ of many European policy makers is expected to play a central role during contrast with most of the members of prevents the EU from developing a the 21 century. Until recently, historic the college. The former British governor comprehensive Asian strategy. and geographic factors have led Europe of Hong Kong naturally pushed for more Recent efforts to strengthen relations to focus most of its attention on the US, European engagement in the region. with India, Pakistan or Indonesia could its Southern and Eastern neighbours as “I believe that Asia always deserves to allow the EU to gain more influence in well as its former colonies in Africa. In be high on Europe’s agenda,” argued the region and thereby counterbalance contrast, Asia-Pacific is a remote and Patten. In 2003, he presented the first the importance of China. Forging closer fairly unknown region in the eyes of most strategy dedicated to South-East Asia ties with the ASEAN states is also an of Europe’s policy makers and the public and beefed up the network of EC del- essential element of the European strat- at large. “It is time for the EU to review egations in the region, including the egy, since the EU sees the South-East its overall strategy towards Asia and make opening of an office in Singapore. Asian bloc as a sister organisation that it more focused,” said Yeo Lay Hwee, fosters regional integration. However, the director of the EU Centre in Singapore. China factor divergences over the ongoing trade nego- Under the leadership of President José tiations or Burma (Myanmar) show the Modest growth Manuel Barroso, EU Trade Commissioner limitations of this relationship. During It was only in 1994 when the EU out- was the first to turn Asia into a trip in 2007, President Barroso has lined its first comprehensive Asia strategy, a top priority in the Commission. He argued also rediscovered Japan as a key partner, at a time when the emerging ‘Asian tigers’ that the EU’s trade policy should focus first sharing the same democratic and envi- made it increasingly difficult for Europe on gaining new market access in fast growing ronmental values as the EU in a region to turn a blind eye on the economic and Asian economies. Meanwhile, he promised that is increasingly unstable. However, political prospects of the most populated his Asian partners to keep the EU market the prospects for deepening bilateral continent. Fifteen years later, the EU is open by resisting protectionist tendencies. economic ties with Tokyo are rather dim. still in search of a comprehensive and Suddenly, China topped the agenda of the effective strategy to assert itself in East commissioner, who paid regular visits to Security gap Asia. In 1996, Europe and Asia launched Beijing with the hope of striking a grand The successful completion, in 2006, the ASEM (Asia-Europe Meeting) pro- bargain that would benefit both Chinese of the EU-led monitoring mission in cess that has dramatically increased the and European firms and consumers. Mean- Aceh, Indonesia, was a breakthrough, level of intercontinental relations (see while, the British commissioner launched since for the first time the European separate article), but the Far East remains three ambitious free trade negotiations with bloc got involved in Asian security, a peripheral. Only China has emerged as some of the most dynamic economies in field traditionally dominated by the US. a top policy priority for experts of the Asia, namely, South Korea, the ASEAN and The EU’s participation in the ASEAN region in Brussels. India. Today, only a deal with Seoul seems regional forum (ARF), which is the key The 1994 Asia strategy was updated in feasible in the foreseeable future. However, annual rendez vous in the field of Asian 2001 to take into account the political if the EU signs in the coming months, as security, is another sign of Europe’s and economic developments, including expected, an agreement with South Korea, determination to be involved, although the Asian economic crisis. But the Euro- it could overtake the US, which is still strug- many critics argue that it does not have pean Commission acknowledged that gling to ratify the free trade agreement it had the resources to match its ambitions. In only little progress had been achieved. concluded in 2007 with Asia’s fourth largest 2010, the EU hopes to sign a treaty of “There has been a modest growth in our economy. amity and cooperation (TAC) with the development and economic coopera- The emergence of China as a super- bloc. Its ultimate goal is to participate tion. But much remains to be done, for power has been increasingly influenc- in the East Asian summit, launched in example in deepening and broadening ing the EU’s approach to Asia over the 2005. The EU is banging on the door our political dialogue, in enhancing our last five years. The Commission and of this new forum, which gathers lead- bilateral trade and investment relations the member states have been eager to ers from ASEAN countries, China, and strengthening our cooperation in the enhance their ‘strategic partnership’ Japan, South Korea, India, Australia and WTO, and in ensuring that our aid pro- with Beijing. But China’s new assertive- New Zealand. n

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ASEM process has long way to go

By Sébastien Falletti in Seoul 2006, which represent more than half of the of the process prevents leaders and minis- world’s GDP, demonstrates the potentials of ters from taking binding decisions and the Thirteen years after its launch, the informal the process. summits’ joint declarations often resemble process of dialogue within the Asia-Europe “When the EU and Asia work together they a catalogue of good intentions with few Meeting (ASEM) is still in its infancy and can influence the global agenda,” stresses a tangible results. has produced only few tangible results. European Commission official. Hence, the At the numerous thematic ministerial In 1996 in Bangkok, the EU took a deci- latest ASEM summit, held in October in meetings taking place all the year round, sive step in order to catch up in Asia with Beijing, gave a global push in favour of a attendance is often limited and participa- the dominant influence of the US, which coordinated and ambitious response to the tion rarely goes beyond exchanging ideas. has been playing a central role in the region global economic and financial crisis at a crit- Sensitive issues, such as Burma (Myanmar), since World War Two. In the Thai capital, ical time, when the outgoing Bush adminis- human rights or the environment are often EU leaders held their first summit meeting tration in the US was reluctant to take con- put on the back burner in order to avoid with their Asian counterparts, launching the crete steps. In 1998, in the aftermath of the open confrontation, say several NGOs. ASEM process. It mirrored the US-led Asia- Asian crisis, EU leaders came to the rescue This situation is expected to last, since nei- Pacific Economic Cooperation (APEC), of their counterparts, pledging to maintain ther the European member states nor their with the objective of asserting European their economic commitment during the Asian counterparts are willing to transform economic interests in this fast developing London summit. At the grass root level, the ASEM into a more formal forum with a region of the world. With a summit held Singapore-based Asia-Europe Foundation secretariat. In Beijing, leaders have agreed every two years, alternatively in Asia or in (ASEF) plays an active role in promoting to raise the visibility of the ASEM process Europe, the ASEM process has led to a academic and people-to-people exchanges that remains very low among citizens, but significant upgrade of intercontinental rela- between the two continents. no decisive steps were taken (such as the tions, providing an opportunity to discuss setting up of secretariat). The partners will regional and global issues at the highest “Talk shop” assess the progress achieved during their level. ASEM’s enlargement to more than 40 ASEM “is essentially a talk shop,” accord- next summit, scheduled for the second half members, including India and Pakistan in ing to a diplomat. The informal nature of 2010 in Brussels. n

EUROPOLITICS Dossiers and Special Editions

SPECIAL DOSSIERS „ Washingtonians Europeans should know, 3727, 02/04/09 „ Europe of research: Broken promises, 3815, 11/09/2009 „ Airbus A400M, 3722, 26/03/09 „ EU Court of First Instance at 20, 3810, 04/09/2009 „ Solana, 3717, 19/03/09 „ EU-US financial regulations, 3805, 28/08/2009 „ European Parliament 2009-2014: Parliamentary committees, SPECIAL EDITIONS 3801, 27/07/2009 „ Swedish Presidency: Bends ahead, 3785, 02/07/09 „ Security of energy supply, 3794, 15/07/2009 „ Super Parliament 2009-2014, 3782, 29/06/09 „ Commission: Member states preparing to nominate candidates, „ European elections 2009, 3749, 08/05/09 3790, 09/07/2009 „ Czech EU Presidency, 3665, 04/01/09 „ EU-US food safety disputes : 3781, 26/06/09 „ EU Security and Defense Policy, 3630, 03/11/08 „ Aviation: The answers to climate change, 3773, 16/06/09 „ French EU Presidency: New horizons, 3562, 01/07/08 „ Three heads for Europe, 3767, 08/06/09 „ European Parliament of Enterprises, supplement, 14/10/08 „ Atalanta, 3761, 28/05/09 „ European Parliament turns 50: Anniversary special, 3494, 19/03/08 „ Competition policy, 3758, 22/09/2009 „ Slovenian EU Presidency, 3441, 04/01/08 „ Third energy liberalisation package, 3748, 07/05/09 „ Europe facing climate change: 3423, 30/11/07 „ Five years after: Whither enlargement?, 3744, 30/04/09 „ Lisbon Treaty: Here is what changes: 3407, 07/11/07 „ 15 years of the Committee of the Regions, 3738, 22/04/09 „ Tomorrow’s Europe: 1957-2007 - What’s next?: 3270, 19/03/07

www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language EUROPOLITICS N° 3820 Friday 18 September 2009 Insight 19

Interview with Park Sung Hoon, professor of economics at Korea University “EU must do more in Asia”

By Sébastien Falletti in Seoul of interest. I do think the presence, the What should the EU do to increase its involvement of the US in Asia makes a influence? Park Sung Hoon, professor of economics big difference. The EU recognises that the The EU struggles to speak with one voice. at the prestigious Korea University in Seoul, role of the US is too strong here, especially In the field of foreign affairs and security, explains to Europolitics why the EU has in the field of security. Therefore the EU European integration is not yet at the stage such little visibility in Asia despite being of a union. So we have a lot of diverse an economic giant. The dominant role of opinions from different member states the US in regional security is seen as the that cannot be really coordinated by the most important factor. But the scholar European Commission. This is particu- stresses the need for the EU to invest larly true regarding China, where we see more resources in Asian affairs in order to diverging economic and political inter- increase its leverage in the most dynamic ests at play. This is a serious problem. economic region in the world. Moreover, the EU’s complex institutional setup often does not allow for a timely Why does the EU has so little visibility response to an international crisis. The in Asia? EU’s response often arrives too late, and The notion that the EU should its united position is often superficial. be a global actor is very new. Until Do you think the entry into force of the recently, the EU had shown only Lisbon treaty could make a difference? little involvement in global issues It will definitely provide some improve- and Asian affairs. This lack of engage- ment. But whether it will really lead to ment has contributed a lot to the rel- some kind of unified positions remains ative invisibility of the EU in Asian an open question. First, EU member societies. Until the mid-1990s, the states have to think about develop- EU’s external policies were concen- ing coordinated and coherent policies trated on transatlantic relations plus among themselves. Africa and Latin America, where What are the EU’s assets in Asia? many European countries had colonies does not want to intervene more in this The EU is a very important partner, espe- in the past. These traditional relations field. That is probably the reason why Asia- cially in the field of economy. It is essential have shaped EU external policies for a Europe relations have some limitations. for a country like South Korea. If you look long time at the expense of Asia. The But is there a real demand for greater EU at trade and investment figures, you can EU has discovered the value of East influence on the Asian side? see that the EU is now the second largest Asia in the beginning of the 1990s. The The positions and interests of Asian coun- trading partner after China. And China first Asia strategy was adopted in 1994, tries are divergent. There are some nations has emerged quite recently. Only five or therefore EU-Asia relations are only that are strongly welcoming the increasing ten years ago, the EU was ranked third or 15 years old and are still in infancy, in role of the EU. Usually, these countries do fourth in terms of destination for Korean my view. The launch of ASEM [Asia- not have very good experiences with the products. But recently, it has emerged as Europe Meeting], in 1996, has marked US influence in the region, like Malaysia. number two, overtaking the US. When it a very substantial turning point in this is also part of this group, although comes to culture and social cooperation, regard because it was established as a it has improved substantially its rela- most of the Asian countries are also much summit meeting. But still, there is room tions with Washington over the past few more dependent on Europe. In this field, for a lot of improvement, especially years. Hanoi has been traditionally close the EU has a competitive advantage over if you compare with the APEC (Asia to Europe but is now developing a very the US. The activities of the Asia-Europe Pacific Economic Cooperation) process pragmatic economic and foreign policy Foundation (ASEF) are quite influential that includes the US. APEC includes a approach. Indonesia has also become among policy makers and academics. The lot more forums and venues were issues more American friendly recently. China is development of the EU’s ‘soft power’ in Asia are significantly captured, analysed and in a different position, since it is engaged in will increase its visibility. But the activities discussed. The quality of dialogue and a leadership rivalry with Japan and the US. of the Delegation of the Commission are cooperation in the ASEM process is not Beijing wants to emerge as the regional not well represented and visible enough. as substantial. leader. Against this backdrop, China is The EU needs to invest more to increase How would you explain this limitation? Is relatively more prone to have coopera- its visibility. In that sense, the opening there a lack of interest? tion with the EU in order to play Europe of EU centres is a welcome initiative. I do not think it is a matter of strength against America. However, I think that is not enough. n

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Insight Jurisprudence

Financial markets Court clarifies concept of ‘insider dealing’

By Sophie Mosca of privileged information from “using” is taken into account in calculating the such information by buying or selling advantage procured, which is itself taken The mere fact that an individual who the financial instruments to which the into account for imposing the sanction is in possession of privileged information information is related. Insider dealing since the sanction must be proportion- acts with knowledge of the information therefore implies that there has been ate to the gravity of the offence and the is enough to comprise ‘insider dealing’, use of the privileged information. Julian advantage procured. which is condemned by EU law. Kokott proposed to the Court of Justice The directive is not any more precise This is the opinion of Advocate-General to consider that a person who acts as a on arrangements for calculating the Julian Kokott on the concept of insider result of privileged information “uses” advantage. dealing in a case pitting Spector Photo this information and is thus guilty of the against the Belgian Banking, Financial offence of insider dealing. (An excep- Buy-back of own shares and Insurance Commission (CBFA - tion is made for market operators who do The prohibitions contained in the Case C 45/08 Spector Photo Group). In not use potential privileged information directive do not apply to transactions 2006, the Belgian financial market regu- when they execute orders for third parties on own shares carried out in the frame- lator accused Spector of having bought within the framework of their activities). work of buy-back programmes, provided its own shares shortly before the publica- Proving the use of privileged information such transactions are in conformity with tion of its results for the first half of 2003. does not require a deliberate or written the implementing measures foreseen in Since the company had performed well, decision. Regulation 2273/2002. However, since a sharp increase in the Spector share this regulation had not yet entered into price on the stock exchange was foresee- Criteria for sanctions force when the disputed transactions took able. By altering the date of purchase of The directive on insider dealing obliges place, under the softest law principle, the the own shares to place the transaction at the member states to guarantee that, in exception to the prohibition should also a date prior to the disclosure of turnover, case of breach of the prohibitions it lays be applied to Spector and Chris Van Rae- Spector and Chris Van Raemdonck, its down, proportionate and dissuasive sanc- mdonck, provided the conditions of its former general secretary in charge of pur- tions must be applied. The Belgian court application are met (notably the absence chasing, prevented a financial disadvan- wished to know whether, in determining of ex post modification of the purchase tage for the company, argued the CBFA the proportionate nature of a sanction, order as to the number of shares, price before the Hof Van Beroep te Brussel. the advantage procured should be taken and urgency). The CBFA added that the transaction into account and whether the impact of The advocate-general’s opinion is not occurred in the context of a buy-back publication of the privileged information binding on the court. n of own shares under an employee stock on the price of the financial instrument option programme that is not considered has to be demonstrated. The advocate- (1) Directive of 28 January 2003. by the EU directive as banned insider general replied that the directive does not (2) Commission Regulation of 22 December dealing. establish criteria for determining the pro- 2003 implementing Directive 2003/6/EC as The Belgian court asked the EU Court portionate nature of a sanction. On the regards exemptions for buy-back programmes of Justice to provide an interpretation other hand, the change in the share price and stabilisation of financial instruments of Directive 2003/6/EC on insider deal- ing and market manipulation1. The key question submitted was whether insider Background to the president of his trade union dealing is deemed to exist from the mere This case is the first request to the unless there is a close link between the fact that a person in possession of privi- court for an interpretation of the new transmission of such information and leged information has acted with knowl- directive on insider dealing. On the the exercise of his duties (C-384/02 edge of this information. Other questions basis of the earlier Directive 89/592, it Grongaard). Lastly, the court found concerned the elements to be taken into held that a member state could apply that transactions carried out between consideration for determining sanctions stricter sanctions than those laid down the main shareholders and members for this offence. by this directive (C-28/99 Verdonck). It of the board of directors of a com- also found that a trade unionist who sat pany on shares in the company with Privileged information in a board of directors must be consid- the aim of boosting the share price The advocate-general began by noting ered guilty of insider dealing for having were not banned by the 1989 directive that Article 2 of Directive 2003/6/EC communicated privileged information (C-391/04 Georgakis). prohibits anyone who is in possession www.europolitics.info Sold by subscription only © reproduction strictly prohibited in any language