The Week in Europe 6-11/11/02
EU news in brief
Open sky agreements: Commission welcomes European Court of Justice ruling
The Commission welcomed the ruling of the European Court of Justice in the so-called "open skies" cases, which address the legality of bilateral agreements concluded between eight EC Member States and the United States. "Today's judgement is a major step towards developing a new coherent and dynamic European policy for international aviation. In most sectors of the economy, Europe speaks with one voice in international negotiations and takes a leading role in shaping events. Until now, aviation has been excluded from this approach as Member States have pursued their own individual agendas. From now on, it is clear from the Court's ruling that we will all have to work together in Europe to identify and pursue our objectives jointly. The Commission stands ready to play its part," said Loyola de Palacio, Vice-President in charge of transport and energy.
[Background paper IP/02/1609]
Commission establishes new administration offices to increase its internal efficiency and reallocate resources to core tasks
The Commission approved the establishment of three new Offices aimed at rationalising the day-to-day management of administrative and support services, particularly those that are currently carried out by the Directorate General for Personnel and Administration. In transferring part of the tasks to three Offices, one for the payment of all Commission staff entitlements, the other two for the management of Commission infrastructure in Brussels and Luxembourg, the Commission is seeking to increase the effectiveness of the delivery of these services to the benefit of staff. The new Offices, due to begin work in January, will lead once fully operational and after the end of the transition phase - to annual savings on overall operating costs of up to € 12 million, roughly 14% of the current cost of providing these services. These efficiency gains could increase further if the other EU institutions agreed to pool their responsibilities in these fields. The adopted decision follows exhaustive consultations with the Commission staff unions.
[Background paper IP/02/1622]
Commission indicator forecasts euro area quarterly GDP growth of 0.2 to 0.5% for 3rd and 4th quarter of 2002
The indicator-based model for quarterly GDP growth for the euro area, developed by the European Commission's Directorate General for Economic and Financial Affairs, forecasts a range of 0.2% to 0.5% for GDP growth in the third quarter of 2002 compared to the previous quarter. For the fourth quarter of 2002, quarter on quarter growth is forecast to be in the same range. No significant change in the indicators used in the model has been recorded since last month. Hence, this forecast is unchanged compared to the forecast released on 10 October 2002. The model is described in detail in DG ECOFIN's Economic Paper No. 154, June 2001, to be found on DG ECOFIN's website:
http://europa.eu.int/comm/economy_finance/publications/economic_papers/economicpapers154_en.htm
Previous releases of the indicator-based model forecasts can be found on:
http://europa.eu.int/comm/economy_finance/indicators/euroareagdp_en.htm
[Background paper IP/02/1628]
Commissioner Fischler visits Czech Republic
With the enlargement negotiations approaching the finishing line and following the Brussels Summit, Commissioner Fischler's visit was planned to serve as an excellent opportunity to touch base on the state of play of the enlargement negotiations on agriculture and on the preparations in the Czech Republic. "I intend to use this trip to reinforce support for the EU accession of the Czech Republic. I want to inform, to explain and to discuss in order to address the concerns and fears of the Czech people. Let there be no doubt. Being in the EU is far better for the Czech rural sector, and offers a far more stable and secure future, than staying out. I am also looking forward to meet my colleagues from all candidate countries to discuss the latest developments regarding the enlargement negotiations", Mr Fischler commented before the trip.
[Background paper IP/02/1617]
Television broadcasters are devoting an average of 62% of their transmission time to European works, and steadily improving the "quotas" provided for in the "television without frontiers" Directive
The European Commission adopted a Communication on the implementation in 1999 and 2000 of Articles 4 and 5 of the "television without frontiers" Directive to promote the broadcasting of European works, including those of independent producers. The average broadcasting time for European works was 60.7% in 1999 and 62.2% in 2000 for the fifteen Member States. The average broadcasting time for independent producers' works, especially recent ones, was 37.5% in 1999 and 40.5% in 2000, i.e. well above the threshold of 10% laid down by the Directive.
[Background paper IP/02/1632]
Internal Market has brought big gains in last ten years, but more needed, say citizens and companies
European citizens and businesses recognise that the Internal Market without frontiers has brought them significant benefits since it began on 31 December 1992, but would like to see more and quicker progress, according to surveys undertaken for the latest Internal Market Scoreboard (see IP/02/1644). For example, 80% of citizens feel that the Internal Market has increased the choice of products available, three-quarters welcome the increased competition which the Internal Market has introduced in many areas and two-thirds say it has made it easier to travel to other Member States. Four times as many businesses (46%) see a positive impact on their company as perceive a negative one (11%). Companies from smaller Member States, especially Ireland and Greece, are generally more positive than those from larger Member States; of the latter UK companies are the least enthusiastic and Italian companies the most. Exporting companies are more positive than non-exporters but an overwhelming 84% of all companies think that improving the functioning of the Internal Market should be a key priority for the EU. Citizens in France and Luxembourg come out top of the class in knowing their Internal Market rights. The surveys were based on replies from 7,500 citizens and 5,900 businesses in all 15 Member States. More information on the surveys of citizens and businesses can be found in the full text of the Internal Market Scoreboard No. 11. Detailed statistical background tables are available on the Commission website at:
http://europa.eu.int/comm/internal_market/en/update/score/index.htm
[Background paper MEMO/02/231]
"Research 2002": the biggest-ever conference on science and technology opens in Brussels
European Research Commissioner Philippe Busquin and Belgian Prime Minister Guy Verhofstadt opened the "Research 2002" conference on 11 November in Brussels. The gathering marks the start of the €17,5 billion 6th EU Research Framework Programme (FP6 2003-2006): the first calls for proposals will be published shortly. With 9,000 participants "Research 2002" is the biggest event of this kind ever organised in Europe. Commissioner Busquin said: "I invite European scientific and business community to join EU institutions and Member States in making the Framework Programme a success, to foster the creation of the European Research Area, an internal market for knowledge and science." Prime Minister Verhofstadt added: "The creation of a genuine European Research Area is of the utmost importance to determine the kind of Europe and the kind of world we may expect in the twenty-first century." For further information please visit:
http://europa.eu.int/comm/research/conferences/2002/
[Background paper IP/02/1646]
Commissioner Nielson visits the Czech Republic
The European Commissioner in charge of Development and Humanitarian Aid, Mr Poul Nielson, starts a 2-day trip (11-12 November) to the Czech Republic. The overriding objective of this visit is to raise awareness of development and humanitarian issues linked to enlargement and discuss these questions with the Czech authorities and civil society. Mr Nielson met with Prime Minister Vladimir Spidla, other government Ministers, Parliamentarians, academic and civil society. Mr Nielson stated, "I aim to inform the government and general public about what the Commission and the EU are doing in the area of development co-operation and humanitarian aid. Once the Czech Republic and other candidate countries become EU members, they will become part of a group that provides over 50% of global development assistance to the developing world. This aspect of enlargement has been largely overlooked in the public debate." A full version of the document can be found on the following website:
http://europa.eu.int/comm/development/index_en.htm
Eurostat news releases
September 2002: euro-zone unemployment stable at 8.3%; EU15 steady at 7.6%
Euro-zone seasonallyadjusted unemployment stood at 8.3% in September 2002, unchanged compared to August, Eurostat reports. It was 8.0% in September 2001. The EU15 unemployment rate was 7.6% in September, unchanged compared to August. It was 7.3% in September 2001. In September 2002, lowest rates were registered in Luxembourg (2.5%), the Netherlands (2.9% in August), Austria (4.2%), Denmark (4.3% in August), Ireland (4.5%) and Portugal (4.7%). Spain's 11.2% remained the EU's highest rate.
[Background paper STAT/02/130]
Enlargement news
The race to Copenhagen…
The Danish Presidency of the European Union is moving the enlargement process forward as fast as it can in the countdown to the Copenhagen summit. There are only a "few outstanding negotiation issues" for the ten candidate countries slated to complete accession negotiations there. But, as Anders Fogh Rasmussen told the European Parliament on November 6, the candidates should not wait too long before signing up to deals. "The enlargement has by no means been secured. We still face a formidable task, and have only limited time", he said. Success will require "a great deal of effort and compromise", he insisted.
The chapters on agriculture, budgetary provisions and the catch-all "other" chapter all remain open with all the candidates. Meanwhile, country-specific issues also remain: competition policy with Poland (focusing on adaptations to state aid in the steel sector) and Hungary (where state aid is the key issue), transport with the Czech Republic (disputes over cabotage rights still need resolving), and taxation and customs union with Malta (which has unresolved demands on VAT rates). The chapter on institutions is still open with the Czech Republic and Hungary too (because of their wishes for a revision of seat allocations in the European Parliament) and with Latvia (which wants additional vote allocations in the Council).
The rhythm of negotiations has accelerated, with sessions taking place almost daily with individual candidate countries. Work is underway within the EU Council of Ministers to prepare for negotiations on competition with Poland, agriculture with Hungary, Slovenia and Slovakia, and financial and budgetary provisions with Cyprus, Malta, Hungary, Poland, Slovakia, Latvia, Estonia, Lithuania, the Czech Republic and Slovenia. Preparations are in hand too for negotiations within the "other" chapter with all ten, covering subjects such as the European Development Fund, the EU research fund for coal and steel, and safeguard measures.
The Presidency is also planning for the Copenhagen follow-up. Even if accession negotiations are completed with ten candidates during the Danish EU Presidency, it points out, three candidate countries will still remain, "and the process will therefore continue". That is why the Copenhagen summit in December will have to decide on a package for Romania and Bulgaria, with detailed road maps, including timetables, and increased pre-accession assistance, in order to advance their accession process. And EU leaders in Copenhagen will also have to decide on the next stage of Turkey's candidature.
Meanwhile, the EU and Romania also closed negotiations on November 7 on two chapters: telecommunications and information technology, and customs union.
Parliament looks back to summit and forward to enlargement
The European Parliament debated the Brussels summit and the prospects for enlargement during its plenary session last week.
By a large majority it adopted a resolution approving the outcome of the summit - and particularly the principle that the new member states will not find themselves in a less favourable financial situation than before accession. It also wanted to ensure that it has some involvement in the operation of the safeguard provisions that EU leaders have agreed to put in place when new the members join.
The Parliament resolution also renews the call to Greek Cypriot and Turkish Cypriot communities to reach an agreement on a comprehensive settlement over the coming weeks, and also urges the Presidency, in co-ordination with the United Nations, to new efforts to secure a positive outcome of the talks on a settlement on Cyprus, so as to allow the accession of a reunited Cyprus.
Meanwhile, European Enlargement Commissioner Günter Verheugen has been reassuring the European Parliament that enlargement is now firmly on track. He told the Parliament's foreign affairs committee last week that, with the last two major obstacles overcome - the Irish referendum and the Brussels European Council - "the political momentum for enlargement is so strong that nothing can delay it now", he said. "The final stage of the negotiations will be difficult, but we can wind matters up and achieve a precision landing in Copenhagen", he predicted. In addition, he pointed out, "In Copenhagen we will discuss the next pre-accession phase for Turkey. Everything will depend on the new government's programme".
At the end of its debate, the foreign affairs committee finalised its draft of the European Parliament report on enlargement, which will be on the agenda for the special "enlargement" plenary session of the European Parliament in Strasbourg on November 18-20. The draft calls on the Copenhagen European Council to fix a date for the accession of the first ten applicant countries at the start of 2004 or "not later than 1 March 2004". And it urges the EU member states to show generosity in the negotiations with the candidates on agriculture, particularly on agricultural quotas, so as not to penalise them for the temporary drop in production levels during their decade of transition.
Danish prime minister Anders Fogh Rasmussen told the Parliament during the debate: "The enlargement is, for better or worse, rooted in our common history, and it will have a decisive impact on the lives and opportunities of our descendants". He issued a formal thank-you "for the clear and strong voice of support from the Parliament."
He also insisted that although the EU was now finalising its detailed negotiating positions in the wake of the Brussels summit, the candidate countries. "will not have to face a fait accompli. We meet them with an offer of concrete negotiations. We meet them with a call to make the final, decisive effort."
Eu auditors probe enlargement spending
Slow implementation has been a characteristic of the EU's pre-accession instruments, according to the European Court of Auditors, which published its 2001 Annual Report on the general budget of the European Union last week. Payments to candidate countries under SAPARD amounted to only 9.2% of available appropriations, while disbursem*nts to final beneficiaries amounted to just 1 million, 0.1% of available funds.
Payment appropriations for the financial year were utilised at a high rate for the PHARE programme as such, it says, but "for the new instruments, the amounts paid out were very low. For Sapard programme commitments contracted at the end of 2000, 30.5 million, or 9.2% of the appropriations entered in 2001, and 6.5% of available appropriations were paid out in the form of advances to the administrations of the candidate states, which transferred 1 million to final beneficiaries". Since these commitments had thus hardly been used by the end of 2001, there is a risk that the extended deadline for payments will not be met, the Court's report warns.
For the ISPA programme, the Commission made payments amounting to 25.3 million relating to the commitments for the financial year, and 177.9 million for those still outstanding at the end of 2000, representing 58.1 % of the appropriations provided. "The Commission greatly overestimated the beneficiaries' absorption capacity and did not base its budget estimates on a realistic assessment of the Annual Report concerning the financial year 2001", says the report.
Unrealistic disbursem*nt schedules were included in the general budget of the European Union for the new pre-accession instruments, the report concludes. "This has led to persistently low use and significant cancellations of payment appropriations in two successive years. This is particularly true for Sapard, the implementation of which, in 2001, principally involved the setting up of the management and control systems in the candidate countries and their review by the Commission. Two years after the start of the programme, payments to final beneficiaries were made in only two countries and amounted to 0.1% of the total available funds. In one of these countries (Bulgaria), the Commission did not take action following the lower than expected and decreasing rates of implementation."
It recommends that the Commission analyse the reasons for the slow rate of implementation. It should also provide guidance in order to diminish the risk of further delays and similar situations arising in other candidate countries. The report also highlighted what it called "shortcomings in the Commission's methodology for approving national management of Sapard".
The Commission's reply to Court's findings noted that the budgets for pre-accession aid are based on an assessment of the needs of the candidate countries. "They are drawn up in response to calls by the European Council, notably the Berlin summit, and the wishes expressed by the Council and the European Parliament for there to be significant sums available to the candidate countries from an early date so that this would not act as a brake on them carrying out all the necessary activities in order to achieve accession." The utilisation of appropriations was high since a good number of the budgeted activities took place as planned, it added.
On Sapard, the Commission said it was being implemented on a fully decentralised basis and so payments by the Commission require candidate countries to set up administrative structures capable of ensuring the sound financial management of Community funds. The five countries that had put these structures in place by the end of 2001 represented less than one quarter of the overall SAPARD allocation. An additional factor for low budget execution was the Commission practice of limiting payments on account to only half of the legal maximum, the Commission points out.
And moreover, payments to final beneficiaries are only possible when the latter have incurred eligible expenditure. "This inevitably occurs often months after the project has been approved, as is the case in member states".
On some of the broader issues raised in the Court's report, the Commission also pointed out that enlargement holds no particular perils for budgetary management. It will not change the order of magnitude of the Community budget, and the adoption of systems of audit and financial control in any case constitute a chapter of the accession negotiations. The reform of the Commission will take full effect before the enlargement, enabling the Commission to manage the arrival of the new member states efficiently. There will be further support for institution-building before enlargement and the Commission will monitor the preparations of the candidate states to manage EU funds in 2003, and report six months before enlargement, the Commission said in a statement.
More money for nuclear safety in candidate countries
The European Commission agreed last week to seek a higher borrowing ceiling for Euratom lending for nuclear safety and decommissioning of installations in candidate countries. The proposal is to increase the ceiling from 4,000 million to 6,000 million. The scope of Euratom lending was extended in 1994 to allow loans to projects that contribute to improving the degree of safety and efficiency of nuclear power stations which exist or are under construction in specified non-member countries, including the candidate countries. The Commission is also proposing modifications in the eligibility criteria, particularly in the framework of the enlargement process. It wants to ensure that candidate countries have the same access to the facility when they become member states, and to ensure that there is no discrimination in the way these issues are addressed within the enlarged European Union. The proposals will now be examined by the EU Council of Ministers and the European Parliament.
Vital statistics on the candidate countries...
English is the foreign language which is studied most in all the candidate countries, except for Romania, where it is French. Slovenia and the Czech Republic have the highest research expenditures as a percentage of GDP - but it is still well below the EU average. And the highest number of persons killed in road accidents is found in Latvia and the lowest in Malta.
These are some of the statistics to be found in a new edition of the yearbook on Candidate and South East European countries, published by Eurostat, the Statistical Office of the European Communities in Luxembourg. This 257-page volume contains detailed statistical tables covering population, education, research and development, social indicators, the labour force, national accounts, finance, agriculture, energy, industry and construction, retail trade and tourism, transport and communications, external trade and the environment. It also contains a new chapter on regional statistics.
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