Brussels calling, Belgian EU Presidency, Business Newsletter, 06/09/2010, Issue 2

8/8/2019 Brussels calling, Belgian EU Presidency, Business Newsletter, 06/09/2010, Issue 2

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Belgian EU Presidency Business Newsletter

Brussels calling

06/09/2010 Issue 2

Economic governance at the heart ofthe debate

The recent crisis has revealed failures in

the current economic governance ofthe

EU, especially in the fields of budgetary

and macroeconomic surveillance.

This has to change. What Europe needs

to ensure its future economic and fi nan-cial stability is fiscal discipline, combined

with a strong coordination of eco nomic

policies in the member states. This is

key for the competitiveness of our

enterprises. Hence, the business world

calls for a new economic governance structure that:

Strengthens the Stability and Growth Pact a Pact capa-

ble of deploying effective measures, both in terms of

prevention, compliance and enforcement. With regard to

enforcement, adequate reporting and reliable statistics

on public finances are a conditio sine qua non. More

attention should also be paid to the public debt level,

an idea which is now beginning to dawn to EU member

states;

Reduces the divergences in competitiveness between the

member states. Experience shows that sound budgetary

policies are necessary, but not sufficient to boost com-

petitiveness. The current imbalances are a major concern,

in particular in the euro area. Therefore, the EU should

set up a strong macroeconomic country surveillance sys-

tem, which on the one hand, identifies potentially harm-ful imbalances by way of prevention, and on the other

hand, provides for an enforceable corrective mechanism;

Reinforces the ability of the EU to react timely and effec-

tively when a crisis occurs.

Sound economic governance for Europe and a real imple-

mentation of the EU 2020 strategy constitute the recipe

for a swift and sustainable recovery. There is a sense of

urgency. In this perspective, the fact that on September 2,

representatives of the European Commission, the

European Parliament and the Council reached a political

agreement on the EUs state-of-the-art financial supervisionpackage, is a first success of the Belgian Presidency.

On July 12-13, the Economic and Financial Affairs Council

(ECOFIN) met in Brussels under the presidency of Didier

Reynders, Belgian Minister of Finance and InstitutionalReforms. On July 12, the members of the Eurogroup assem-

bled and on July 13, the Ministers of Economy and Finance

of all EU member states met. The Council started by taking

note of the Belgian Presidencys work programme on eco-

nomic and financial affairs for the duration of its 6-month

term. During its term in office, the Presidency will overseethe implementation of initiatives launched in the context of

the Europe 2020 strategy for jobs and growth. Additional-

ly, further measures to revitalize the European single mar-

Eurogroup meeting & Economic and FinancialAffairs Council (July 12-13, 2010)

Editorial

BrusselsCalling - 1 -

CONTENTS Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Eurogroup meeting & Economic and Financial

Affairs Council (July) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Informal Competitiveness Council . . . . . . . . . . . . . . . . . . . . 3

Events & meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

In the spotlight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4th EU-Brazil Business Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

General Affairs Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

UN Climate Change Conference in Bonn. . . . . . . . . . . . . . . . . . 9

Informal Transport,Telecommunications & Energy Council . . 9

Economic and Financial Affairs Council & Eurogroup

meeting (September) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Diane Struyven,Director of the European

Department of the FEB


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ket will be examined. Since the financial sector is still struggling with the current

economic situation, extra measures to consolidate public finances and to guar-

antee financial stability will also be adopted under of the Belgian Presidency.

On July 12, in the margin of the ECOFIN Council, Ministers from the euro area

member states, together with Olli Rehn, Commissioner for Economic and

Monetary Affairs, and Jean-Claude Trichet, Governor of the European Central

Bank, held a meeting of the Eurogroup. High on the agenda was the European

Financial Stability Fund (EFSF). The start-up of this new entity was attributed to

the German Finance Agency which is responsible for managing the countrys

debt. The European Investment Bank on the other hand, will offer legal and

administrative support to the Fund. Concerning the rescue fund for Greece,

Slovakia is, at this moment, the only member of the Eurogroup not to participate

in the financing of it. An invitation by Eurogroup President Jean-Claude Juncker

on August 11 to join the operation was rejected by the new Slovak Parliament. In

a reaction, Olli Rehn said the vote will not have any negative implication for the

disbursement of the instalments of the loan.

In the light of the measures toconsolidate public finances, the

Greek government was hailed by

both Jean-Claude Juncker and Olli

Rehn for the way in which it has

already been able to implement its

unprecedented structural adjust-

ment programme. Due to its good

results, the ECOFIN Council is likely

to approve the payment ofa second

loan tranche of 6,5 billion EUR to Greece at its next meeting on September 7.

In order to monitor intra-euro area competitiveness imbalances, Spain and

Finland were subjected to a peer review. Even though the situation in these

two countries is very different, they both face challenges in the fields of growth,

productivity, wage policy and market functioning. Regarding Spain, Olli Rehn

said that the reform efforts are both demanding and ambitious and that they

are going in the right direction. About the Finnish economy, the Commissioner

said that even though it is not facing any immediate threats in terms of compe-

titiveness, it faces medium-term challenges as its ageing population will increasingly weigh on public finances.

Also on July 12, the Task Force on economic governance chaired by Herman Van Rompuy, President of the European

Council, met for the third time since its establishment at the European Council of March 25-26. With the aim ofimpro-

ving the economic governance of the EU, the Council agreed on measures presented by the Task Force to reinforcethe Stability and Growth Pact (SGP) and to improve macroeconomic surveillance. In order to strengthen the SGP,

more attention has to be given to monitoring the evolution of public debt levels and measures to reduce them. In this

perspective, the European semester, an initiative due to start in 2011, will allow the EU to exercise greater control

over member states budgetary politics. The introduction of the European semester will require member states to pre-

sent their national budgets as well as their adjustment and reform programmes in execution of the Europe 2020 strategy

to the European Commission for review and possible adjustment based upon the Commissions advice. The adoption of

preventive sanctions was also discussed in the Task Force. These sanctions should deter countries of not complying with

the budgetary guidelines as set out in the SGP. As to improve macroeconomic surveillance, consensus was reached on

the creation of a scoreboard to monitor competitiveness.

A day later, on July 13, the ECOFIN Council formally decided to allowEstonia

to become the 17th member state toadopt the euro. The Baltic state will introduce the single currency as of January 1 next year, giving the country 6

months to prepare for the changeover. In the light of this, the Council set a fixed conversion rate for the Estonian kroon

against the euro: 15,6466 Estonian kroonid to one euro This represents the current value of the Estonian currency in the

EUs exchange rate mechanism (ERM II).

New Broad Economic PolicyGuidelines (IntegratedGuidelines), adopted by theCouncil of the EU on 13 July 2010

1 ensuring the quality and the sustai-nability of public finances;

2 addressing macroeconomic imba-lances;

3 reducing imbalances in the euro area;

4 optimising support for research,development and innovation,strengthening the knowledgetriangle and unleashing the potentialof the digital economy;

5 improving resource efficiency andreducing greenhouse gases;

6 improving the business and consu-

mer environment and modernisingthe industrial base in order to ensure

the full functioning of the internalmarket;

7 increasing labour market participa-tion and reducing structural unem-ployment;

8 developing a skilled workforce res-ponding to labour market needs,promoting job quality and lifelonglearning;

9 improving the performance of edu-cation and training systems at alllevels and increasing participation intertiary education;

10 promoting social inclusion andcombating poverty.

Background information


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Contrary to the Estonian success story, excessive deficit

procedures were opened for Bulgaria, Denmark, Cyprus

and Finland. The Council issued recommendations on the

measures to be taken in order to reduce the countries

deficits back below the threshold of 3% of gross domestic

product (GDP). Including these four new countries, 24 out

of 27 EU member states are

now subject to an excessive

deficit procedure. This should

of course be seen in the con-

text of the current global

financial crisis.

With regard to the intentions

to reform financial supervi-

sion in the EU, the Council

has set out political guide-

lines for further negotiations

with the European Parlia-ment. Concretely, these

negotiations will be about

the creation of a European Systemic Risk Board (ESRB)

which will exercise efficient macro-prudential oversight of

the financial system, and about the establishment of a

European Banking Authority (EBA), a European Insu-

rance and Occupational Pensions Authority (EIOPA) and

a European Securities and Markets Authority (ESMA)

for micro-prudential oversight. On September 2, all three

sides of the EU triangle the Council of the EU, the Eu ro-

pean Commission and the European Parliament finally

came to an agreement on this package. On September 7,

Finance Ministers should formally approve the creation of

these new bodies at the ECOFIN Council and on Septem-

ber 20-23, the package should receive the green light at

the Parliaments plenary session. As a result, the ESRB and

the three micro-prudential supervisory authorities are

expected to be operational as of January 1, 2011.

In relation to the Europe 2020 strategy, the Council adopt-

ed Integrated Guidelines for structural reforms and eco-

nomic policies to be carried out over the next few years.

Progress towards the goals of the Europe 2020 strategy

at both the EU and member state level, will annually be

assessed by the European Council. The assessment will

focus primarily on overall financial stability as well as on

macroeconomic indicators and structural and competitive-

ness developments.

Finally, the Council adopted a directive aimed at simplify-ing electronic invoicing of value-added taxes (VAT).

Under this new directive, tax authorities have to regard

e-invoices as equal to paper invoices. The directive also

obliges authorities to remove all legal obstacles to the

transmission and storage of e-invoices. If obstacles to

e-invoices were to be removed completely, the Commis-

sion has calculated that the annual cost savings for

businesses could amount to 18 billion EUR. This topic was

one of the demands of the Federation of Enterprises in

Belgium (FEB) towards the Belgian Presidency.

Informal Competitiveness Council (July 14-16, 2010)

On July 14-16, the Competitiveness Council met informally

in Brussels, first in its industry configuration (July 14-15)

and then in its research configuration (July 15-16). In ad-

dition, the Belgian Presidency decided to schedule a joint

informal Council meeting where both EU industry and Re-search Ministers were present. In the margin of these offi-

cial meetings, the Belgian Federal Public Service (FPS)

Economy, Essenscia (representing Belgian chemicals and

life sciences industries) and Cefic (Eu ropean Chemical In -

dustry Council) organized a conference on July 14 titled

The chemical industry: the roots for sustainable

growth in Europe.

During the Industry Council on July 14-15, the overarching

theme concerned the transition path towards a green

and competitive European economy in a globalized

world. Two main topics were discussed in this perspective:

the EUs new industrial policy and an innovation policy tai-

lored to small and medium enterprises (SMEs).

A first number of sessions dealt with the future of EU

industrial policy. The flagship initiative Industrial policy in

the era of globalisation, enshrined in the Europe 2020

strategy, will form the basis of a modernized European

industrial policy aiming at facilitating the green transfor-mation of European industry. This new industrial policy will

first of all have to take into account the complex nature of

the secondary sector nowadays: industrial sectors can no

longer be thought of as homogenous or national; they

now are at the centre ofincreasingly interlinked global

value chains which transcend traditional geographical and

sectoral borders. Sectoral policies are therefore likely to

have effects in other sectors as well. In addition, other

European policies (e.g. in the fields of environment, ener-

gy, transport, ...) increasingly affect industrial competitive-

ness, therefore requiring coordination. Secondly, the future

European industrial policy will have to address the chal-

lenges raised by the transition to a low-carbon economy

by stimulating initiatives in the fields of eco-efficiency and


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green sectors. A balance will have to be struck between

sustainable development and external competitiveness. In

this context, innovation will be key in Europes ability to

establish itself in these growth markets. A third aspect

which needs to be taken into consideration is the need

for greater flexibility in response to structural changes

which are taking place at an ever higher pace. A fourth

element which was discussed by EU Industry Ministers

was the issue ofresource-intensive industries. On the

one hand, the future competitiveness of these industries

affects many third sectors to which they supply. On the

other hand, their own competitiveness depends on fac-

tors over which policymakers have only limited control

(e.g. worldwide demand, price evolutions, access to mar-

kets, ...). In addition, the EU is facing increased competi-

tion for resources from emerging economies such as

China. In this respect, the Walloon Economy Minister,

Jean-Claude Marcourt, argued in favour of a stronger

presence of the EU in Africa. Fifth, future industrial poli-cy should foster the integration of SMEs in global supply

chains and clus-

ters. Studies have

demonstrated the

link between the

international

reach of SMEs

and their compe-

titiveness. Last,

ministers

acknowledged

the need for an

integrated multi-level governance model for the future

European industrial policy. The growing internationalisa-

tion of the economy has spurred the development of

close links between economies at the regional, national,

European and international levels. In the light of the

above considerations, the EUs industrial policy is most li-

kely to evolve towards a distinction between generic and

targeted policies (i.e. targeted to specific types of com-

panies or particular value chain links), replacing the cur-

rent framework of horizontal and vertical policies.

During another series of talks between EU Industry

Ministers, it was discussed how innovation within SMEs

could be promoted. As SMEs are of paramount impor-

tance to the EU economy, they have a central role to play

in Europes transition towards a green and competitive

economy. Although many SMEs are involved in some form

of innovation in the broadest sense (i.e. not only regarding

the development of technologies, but also concerning

production processes, business models or organisational

setups), SME-specific obstacles to innovation continue

to exist. These include access to adequate funding, thecommercialization of research and development (R&D)

efforts, access to skills, fragmentation of markets, the

functioning of European venture capital markets and mar-

EVENTS&MEETINGS

6-9/09/2010 Plenary session of the EuropeanParliament

Strasbourg

6-7/09/2010 Informal Transport, Telecommuni-cations & Energy Council Fuel-ling a secure, low-carbon and affor-

dable energy future for Europe

Brussels

6/09/2010 Meeting of Herman Van RompuysTask Force on economic governance

Brussels

7/09/2010 Informal Economic and Financial Af-fairs Council & Eurogroup meeting

Brussels

7/09/2010 FEB lunch debate with HermanVan Rompuy, President of theEuropean Council

FEB premises,Ravensteinstraat4, Brussels

10-11/09/2010 Informal Foreign Affairs Council Brussels

12/09/2010 Foreign Affairs Council Brussels

12/09/2010 General Affairs Council Brussels

14/09/2010 Workshop (organized by theBelgian Presidency) Towards aregulatory framework for thetraceability of nanomaterials

Brussels

15-16/09/2010 Informal Transport, Tele communica-tions & Energy Council Transport

Antwerp

16/09/2010 Informal European Council Brussels

20-23/09/2010 Plenary session of the EuropeanParliament

Strasbourg

21/09/2010 Third newsletter Brussels Calling

27-29/09/2010 ICT 2010 conference (organized bythe Belgian Presidency) Confe-rence on latest ICT trends & EU

priorities for ICT R&D funding

Brussels Expo,Brussels

28-29/09/2010 Ministerial conference Promo-ting green employment : a majorand indispensable driver behinda successful transition towards acompetitive low carbon and greeneconomy

La Hulpe

29/09/2010 FEB lunch debate with Karel DeGucht, European Commissionerfor Trade


4/10/2010 Asia Europe Business Forum(AEBF)

Egmont Palace,Brussels

6/10/2010 EU-China Business Summit Egmont Palace,

Brussels

28/10/2010 FEB lunch debate with ConnieHedegaard, EuropeanCommissioner for Climate Action


10/12/2010 EU-India Business Summit Egmont Palace,Brussels


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ket access barriers. Increased inclusion of SMEs in industrial clusters can address

many of these obstacles and foster the transfer and dissemination of technology

and knowledge. Ministers examined how the think small first principle could

be put into practice into the different innovation programmes and instruments at

the EU level. The mid-term review of the Small Business Act (foreseen for this

years fall) offers an important opportunity in this respect. One of the activities of

the Belgian Presidency in this context is the search for an agreement with the

European Parliament and the European Commission concerning the late

payments directive. According to the current proposal on the negotiating table,

member states shall ensure that the period for payment fixed in the contract

shall not exceed 60 days for companies and 30 days for public authorities, unless

certain conditions, which are still

being discussed, have been satisfied.

A political agreement on the late pay-

ments dossier might be found during

the Competitiveness Council of

October 11-12.

The Competitiveness Council also metin its research configuration on July

15-16. Research Ministers discussed

ways to simplify the EUs instru-

ments aimed at stimulating research and innovation , in the first place with

regard to the 7th Framework Programme for Research and Technological

Development (FP7). The main challenge will be to strike a adequate balance

between trust and control. Despite simplification measures which have already

been introduced, further efforts are required. With many specific programmes,

initiatives and instruments, participation in FP7 remains administratively complex

and cumbersome, in particular for interested parties with limited resources such

as SMEs. The process of simplification of administrative procedures and financial

controls must thus be continued, especially in view of the preparation of the 8th

Framework Programme which will take effect as of 2014. After receiving an oral

presentation on the work of a technical seminar on simplification, which was held

on July 14 in the presence of representatives of the European Commission, the

European Parliament and the European Court of Auditors, Research Ministers

had an exchange of views on several themes. These included ways to reduce the

administrative burden by a possible shift to results-based funding and a

methodology to evaluate those results in view of financial support, the simplifica-

tion of the EU research funding landscape, and the timing of proposed simplifi-

cation measures. In September, European Commissioner for Research, Innovation

and Sciences, Mire Geoghegan-Quinn, will present a plan for research and

innovation which is expected to address simplification, and during theCompetitiveness Council of October 11-12, ministers will adopt Council conclu-

sions on the simplification of EU research and innovation programmes.

The Belgian Presidency has also put research and development (R&D) and

innovation at the top of its agenda. The transformation of research results into

innovative solutions is often insufficient, as are the interactions between research and market demands. If the EU is to

maintain a prominent role in todays globalized economy, an integrated political approach towards research and industrial

innovation is essential. This justified ajoint meeting between Research and Industry Ministers on July 15. The meeting

was chaired by Jean-Claude Marcourt, Walloon Economy Minister, and Benot Cerexhe, Minister of the Brussels Capital

region in charge of research.

A first topic on the agenda were the gaps in the financing of R&D and innovation. Although the Europe 2020 strategy

has established the headline target of achieving the investment of 3% of the EUs gross domestic product in R&D (for

which in contrast to the Lisbon Strategy an output-oriented progress indicator will be developed), the private sector


EUROPEAN TAX REVISITED

In an interview published in the August 9

edition of the Financial Times Deutschland

newspaper, Commissioner for Financial

Programming and Budget, Janusz

Lewandowski, flew a balloon on a

European taxin the discussions about the

European Commissions budget review.

This budget review was agreed in 2006 to

avoid an impasse in the then 2007-2013

financial perspectives negotiations. Cash-

strapped member states have recently

been asking the Commission to come up

with ways to cut their national contribu-

tions which make up around 75% of the

total EU budget. Hence Mr. Lewandowskis

tentative proposal to introduce some kind

of EU tax to replace member states con-

tributions and strengthen the EUs ownresources. Among the options considered

are a tax on the financial sector (most

popular), on air transport, on carbon emis-

sions trading revenues, or a direct EU levy

on national taxpayers (least popular). The

idea of a European tax is not new but

highly controversial as it touches directly

upon member states sovereignty. The

United Kingdom, France and Germany

have already strongly rejected Mr. Lewan-

dowskis suggestion. Belgium, Poland,

Austria and Spain however, have backedthe idea of an EU tax. Commissioner

Lewandowski is expected to formally pre-

sent the budget review and his proposals

at the end of September. Discussions

about the 2014-2020 financial perspectives

will most likely take off mid-2011.

In the spotlight


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still faces important bottlenecks in this respect. These

include the continued lack of an affordable EU patent,

and insufficient financing, especially for SMEs, both at EU

and national level. But not only the level of funding poses

an issue, also the coordination of financial instruments

for innovation at EU and member state level should be

improved. A second topic which was debated by Industry

and Research Ministers was the encouragement ofnet-

works, partnerships and clusters to create a robust

knowledge triangle (between education, research and

innovation) and to increase the EUs innovative potential

and capacity. Again, the inclusion of SMEs was stressed.

In this respect, the Innovation Union flagship initiative in

the Europe 2020 strategy proposes to launch European

Innovation Partnerships and knowledge partnerships

aimed at developing solutions to societal challenges.

Ministers discussed key success factors for these partner-

ships and ways to make them as inclusive as possible. The

Belgian Presidency also supported the creation of a per-manent European programme to raise awareness of inno-

vation. Thirdly, governance of research and innovation poli-

cies were discussed. An integrated approach, involving a

coordinated division of labour between different stake-

holders at the European, national and regional levels, in

line with the subsidiarity principle, is necessary. In addition,

horizontal coordination between different EU policies

should be

enhanced.

In the margin of the

Competitiveness

Council, the Belgian

Ministry of Econo-

my and chemicals

sector federations

Essenscia (which is

a member of the Federation of Enterprises in Belgium

(FEB)) and Cefic (at European level) organized a confe-

rence at the BASF premises in Antwerp to frame the

future role of the chemicals industry within the Europe

2020 strategy for smart, sustainable and inclusive growth.

The event was attended by more than 120 high-level

representatives from the private and the public sector,

and participants included Antonio Tajani, European

Commissioner for Industry and Entrepreneurship, and

Vincent Van Quickenborne, Belgian Minister of Enterprise

and Administrative Simplification. At the end of the con-

ference, conclusions were adopted featuring a number of

concrete recommendations addressed to the

Competitiveness Council. These included first of all a

realistic climate change policy that refrains from unilateral

commitments, avoids carbon leakage and is based on

fair burden-sharing between industry, transport and

households. Second, a more effective innovation policy is

asked for. The chemicals sector clearly counts on a break-

through in the contentious EU patent dossier. The latter

matter is a top priority for the FEB as well. Finally, the

need for an integrated and horizontal industrial policyand for progress in international trade negotiations in the

framework of the World Trade Organization are stressed.

The European chemicals sector specifically asks the Eu-

ropean Commission to convince emerging markets such

as Brazil, China and India to subscribe to a sectoral

agreement under which countries with a significant

chemicals sector would abolish all import restrictions

on chemical products. The chemicals industry in Europe

employs more than 1,2 million people and represents

30% of turnover in the global chemicals sector, making it

of strategic importance to the EU economy.

During the upcoming Competitiveness Council of 11-12

October, the European Commission will present its com-

munication on the Europe 2020 flagship initiative Inno-

vation Union, and during the Competitiveness Council of

25-26 October on the flagship initiative Industrial policy

in the era of globalisation. Moreover, the European

Council of 16-17 December will be dedicated to the to-

pic of research, development and innovation.

On July 14, the 4th EU-Brazil Business Summit took place

in Braslia (Brazil). More than 100 participants, representing

European and Brazilian business and public authorities, were

present. The European delegation was led by Mr. Jorge

Rocha de Matos, President of the Associao Industrial Por-

tuguesa (AIP), on behalf of BUSINESSEUROPE, and on be-

half of the Federation of Enterprises in Belgium (FEB), by Mr.

Pierre Alain De Smedt, Vice-President of FEB and chairman

of FEBIAC (the Belgian automotive sector federation, which

is a member of the FEB). Brazilian business was represented

by Mr. Robson Andrade, President of the Confederao

Nacional de Indstria (CNI). Over the last couple of years,

Brazil has developed into an important economic partner

of the EU in terms of trade and foreign direct investment

(FDI), and with its major emerging economy, Brazils impor-

tance is expected only to increase. In the EU, the country is

considered to be one of the best examples of how to marry

economic development, social progress and stability.

Several sessions were organized on various topics: the role

of emerging economies in the post-crisis global economic

context, regulatory and tax barriers to FDI, energy and cli-

4th EU-Brazil Business Summit (July 14, 2010)


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mate change. Probably the most important point on the

agenda were the EU-MERCOSUR trade negotiations.

These negotiations with the Latin-American trade bloc,

which currently includes Brazil, Argentina, Paraguay and

Uruguay, have been suspended since October 2004, but

have recently been relaunched at the Latin America &

Carribean Summit in Madrid in May 2010. A first meeting

with chief negotiators took place in Buenos Aires (Argen-

tina) in July 2010. The aim is to arrive at a comprehensive

agreement, which would not only include goods, but also

cover services, investment, public procurement, sustainable

development, intellectual property rights, competition poli-

cies, a special agreement on sanitary and phytosanitary

standards and a binding dispute settlement mechanism.

Despite these high ambitions, a number ofcontentious

issues remain. For example, Venezuelan membership of

MERCOSUR has still not yet been approved by the

Congress of Paraguay, and the MERCOSUR customs union

is not yet completely effective. Furthermore, as the freetrade agreement (FTA) with the EU would be MERCOSURs

first agreement with a developed region, there is some

reluctance to offer the EU a full tariff liberalisation across the

board. The EU on the other hand is also facing protectionist

stances, mainly from agricultural interest groups.

Supported by a dozen of member states that criticized the

European Commission for its decision to resume negotia-

tions after 6 years of standstill, they fear that the FTA would

have devastating effects on European agricultural employ-

ment, especially in the meat sector. The European

Parliament was also very critical of the resumption of the

talks during its plenary session in Strasbourg in the begin-

ning of July. Members of the European Parliament (MEPs)

denounced the lack of coherence between the EUs trade

policy and its agricultural policy, the latter imposing strict

traceability, sanitary and animal welfare requirements which

cannot be fulfilled by MERCOSUR member countries. In

response, Trade Commissioner Karel De Gucht said that the

EUs agricultural offer to MERCOSUR would be determined

together with Commissioner for Agriculture and Rural

Development, Dacian Ciolo. The next EU-MERCOSUR

negotiation round will be held in October 2010.

At the end of the Business Summit, BUSINESSEUROPE

and CNI adopted aJoint Declaration, in which the

parties confirmed their commitment to the EU-Brazil

Strategic Partnership which was concluded in 2007.

With regard to the macroeconomic context, they

expressed their support for their governments efforts

to stabilize financial markets and mitigate the negative

effects of the crisis on output and employment. At the

same time, they urged public authorities to increase

coordination and cooperation in the field of current eco-

nomic problems, to support multilateral initiatives beingtaken by the G20 and to fight protectionism.

With regard to trade, the Declaration welcomed the

relaunch of the negotiations between the EU and

MERCOSUR to conclude an FTA. It was stressed that the

EU and MERCOSUR should now soon conclude an ambi-

tious and balanced FTA, and that defensive considerations

in agriculture should not be exaggerated. In addition, the

EU and Brazil should consider the conclusion of the Doha

Round of the World Trade Organization (WTO) as a top

priority for 2011. A new multilateral trade deal should

create new opportunities in agricultural and non-agricul-tural market access and improve trade rules concerning

dumping and subsidies. Furthermore, the Joint Decla-

ration acknowledged the important role investment plays

in bilateral economic relations between the EU and Brazil.

However, in order to realize the full potential of FDI, the

regulatory and tax environment should be improved in

Brazil as well as in the EU. In this respect, the establish-

ment of the Brazil-EU Investment & Tax Council in June

2010, which has already identified a number of tax barriers

to FDI in Brazil, was warmly welcomed. The EU should

also pay more attention to competitiveness aspects when

preparing and implementing European legislation and

raise awareness about new legislation and regulation.

Finally, with regard to climate change, Brazil and the EU

should work together to ensure that in Cancn progress

is made towards a comprehensive and balanced interna-

tional agreement. In order to facilitate the transition to a

low-carbon economy, regulatory environments should be

made favourable to the development of green technolo-

gies, especially regarding intellectual property rights and

stable financing. European and Brazilian business clearly

opposed the introduction ofborder tax adjustmentmeasures to offset the costs of unilateral climate change

mitigation policies.

Final speeches of the 4th EU-Brazil Business Summit

were given by Jos Manuel Barroso (President of the

European Commission), Herman Van Rompuy (President

of the European Council) and Mr. Luiz Incio Lula da Silva

(President of Brazil). In his address, Mr. Van Rompuy

praised the commitment of European and Brazilian busi-

ness to ambitious and balanced solutions in terms of

climate change, and mentioned his agreement with Mr.

Lula da Silva to work closely together in view of the

upcoming Cancn Summit.


8/12

On July 26, the first General Affairs Council under the

Belgian Presidency took place in Brussels. The meeting was

chaired by Steven Vanackere, Belgian Minister of Foreign

Affairs and Institutional Reforms. Main points on the agenda

were a presentation of the priorities of the Belgian Presi-

dency, the approval of a negotiating framework for the EU

accession of Iceland, the establishment of the European

External Action Service (EEAS), and the preparation of the

next European Council on September 16.

First, in the field ofenlargement, the Council approved a

general position as well as a framework for negotiations

with regard to Icelands application for EU membership,

which was received in July 2009 after the country was

severely hit by the economic and financial crisis. During the

latest European Council in June 2010, it was decided thataccession negotiations could be opened because Iceland

met all the political

membership crite-

ria. During its ple-

nary session in July,

the European

Parliament also

gave the green light

to start membership

talks. Accession

negotiations at mi-

nisterial level were

formally opened at an intergovernmental conference

between the EU and Iceland in Brussels on July 27. In

November the European Commission will start to assess the

extent to which Iceland is ready to start negotiations in spe-

cific areas, a process known as screening, which will proba-

bly last until mid-2011. In the build-up to its membership,

the country will have to adopt the EUs so-called acquis

communautaire integrally. Although Iceland is already a

member of the European Economic Area (EEA) and signato-

ry of the Schengen Agreement, negotiations are not ex-

pected to be smooth, especially not regarding fisheries. Inview of accession, significant efforts will also be needed in

the fields of agriculture and rural development, environ-

ment, the free circulation of capital and financial services.

Furthermore, the Icesave dispute with the United Kingdom

and the Netherlands, over the compensation of British and

Dutch savings deposits which were lost in the collapse of

Icelands second largest bank Landsbanki, persists (although

some consider it a bilateral issue). And in addition, Icelands

population, which will have the final say over accession in a

referendum, is increasingly sceptical about future EU mem-

bership.

Second, the Council also took a significant step forward in

the EEAS dossier: it adopted a decision establishing the

organisation and functioning of the new European diploma-

tic service to be led by Catherine Ashton, the EUs High

Representative for Foreign Affairs and Security Policy. The

objective of the EEAS is to make the EUs external action

more coherent and efficient and to increase the EUs influ-

ence in the world. Earlier in July, the European Parliament,

during its plenary session, had already voted in favour of the

establishment of the EEAS, following the political agree-

ment which was reached in Madrid between the Parliament,

the Council and the Commission on June 21. The EEAS is

expected to start functioning as of December 1, one year

after the entry into force of the Lisbon Treaty. It will consist,

on the one hand, of a central administration located in

Brussels and, on the other hand, EU delegations to third

countries and international organizations. Personnel will be

hired from the European Commission, the GeneralSecretariat of the Council and from the diplomatic services

of the member states.

Third, the Council adopted a regulation aimed at improving

the quality and reliability of statistical data used under

the EUs excessive deficit procedure (i.e. the procedure by

which the Council, after an assessment of the European

Commission, decides whether an excessive deficit in a mem-

ber states national budget exists). The new regulation also

strengthens the role ofEurostat in cases where significant

problems have been identified in relation to the quality of

the data, as was the case for Greece.

Finally, the General Affairs Council took stock of the follow-

up to be given to the meeting of the European Council of

June 17 in the fields of the implementation of the Europe

2020 strategy, economic governance, financial services, the

G20 and climate change. It also examined the draft agenda

for the next European Council which will be held on

September 16 and is expected to focus on the work of the

economic governance Task Force led by European Council

President Herman Van Rompuy and on the EUs relations

with strategic partners. With regard to the latter agendapoint, a particular emphasis will be put on relations with

emerging Asian powers, given the upcoming bilateral sum-

mits which will be held in autumn. An overview of the

Business Summits which will be held in parallel can be found

in the Events & meetings section in this newsletter.

General Affairs Council (July 26, 2010)



9/12

On August 2-6, 1656 delegates from 175 countries repre-

sented in the United Nations Framework Convention on

Climate Change (UNFCCC) met in Bonn for the

next to last negotiating session to prepare theCancn Conference which will be held in Mexico

from November 29 through December 10. As

was the case in previous sessions, negotiations

followed two parallel tracks. On the one hand,

the continuation of the Kyoto Protocol was dis-

cussed during the 13th session of the Ad Hoc

Working Group on Further Commitments for

Annex I Parties under the Kyoto Protocol

(AWG-KP 13). On the other hand, for the 11th

time, negotiations, intended to establish a global agree-

ment into which all the members of the UNFCCC would

enter, were held during the Ad Hoc Working Group on

Long-term Cooperative Action under the UN Framework

Convention on Climate Change (AWG-LCA 11).

As for the AWG-KP, talks on further commitments regarding

emission reductions for the period beyond 2012 by the 37

countries that have ratified the Kyoto Protocol where at the

center of everyones attention. Even though no fundamental

issues were resolved, good progress was made with regard

to the inclusion of new gases and new quantified aggre-

gate commitments. In addition, a legal issues group was

established to discuss legal requirements needed to avoid agap between the present and the next Kyoto commitment

period. The discussions in Bonn resulted in a more simple

text than before. This implies that the Bonn text can serve

as a starting point for real negotiations during the next

preparatory UN Climate Change Conference which will take

place from October 4-9 in the Chinese city ofTianjin.

However, negotiations on the second path (AWG-LCA) have

been disappointing. They have not yet arrived at a stage in

which it would be possible to establish an ambitious, inter-

national and legally binding agreement.

Due to amendments made by a several par-ticipants, the number of options for action

grew considerably. Christina Figueres, the

UNFCCC Executive Secretary, warned that

if the amount of choices is not narrowed

down, achieving the desired outcome in

Cancn will be highly unlikely. In short, the

next AWG-LCA session will be an even

harder nut to crack.

For the EU, the primary objective now is to re-establish the

balance between the two negotiation tracks. Concretely,

this implies that all major greenhouse gas emitting countries

must agree to subject themselves to enforceable, emis-

sions-reducing measures. This counts especially for those

countries that are still not bound by any agreement limiting

their emissions. Nonetheless, in a joint statement on behalf

of the EU and its member states, the European Commission

and Belgium, which currently presides the Council of the

EU, stated that they remain fully engaged in the Kyoto

track, while reiterating their preference for a single legally

binding instrument. The EU also made it clear that the pled-

ges of other parties still lack an acceptable level of ambi-

tion. As a result, a balanced outcome on both tracks has notyet been achieved. This also implies that a positive outcome

of the Cancn conference is becoming increasingly difficult.

Regarding the Cancn Conference, the Belgian Presidency

will act as coordinator of the joint position of EU Member

States within the Council. The Cancn Conference is one of

the priority meetings on the Belgian Presidencys agenda.


UN Climate Change Conference in Bonn (August 2-6, 2010)

On September 6-7, an informal Transport, Telecommunica-

tions & Energy (TTE) Council will be held in Brussels, in the

presence of Gnther Oettinger (European Commissioner for

Energy). On September 6, EU Energy Ministers will debate

on the link between energy policy and consumer protec-

tion and on access to affordable energy for all. On Sep-

tember 7, the European energy infrastructure and its

financing will be on the agenda. These sessions will be

chaired by Paul Magnette, Belgian Minister of Climate and

Energy. The question ofenergy efficiency will be touched

upon during a lunch debate in the presence of Freya Van

den Bossche, Flemish Minister in charge of energy.

The sessions on September 6 will deal with the question

how energy policy can be made more consumer-friendly.

Over the past couple of years, electricity and gas markets in

Europe have been liberalized with the aim of improving cus-

tomer service, providing competitive energy prices through

the introduction of competition and allowing for free choice

between energy suppliers. To ensure that all consumers can

Informal Transport, Telecommunications& Energy Council (September 6-7, 2010)


10/12

BrusselsCalling

benefit from these advantages, several consumer-oriented

measures have been introduced in parallel, e.g. in the

framework of the 3rd legislative package of 2009 con-

cerning the internal energy market. These measures aim

at protecting consumers and at spelling out their rights

(e.g. transparent bills, clear information,

right of redress, a 6-week limit when

switching supplier), while energy regula-

tors ensure proper market functioning.

Although significant progress has been

made, according to the Belgian Presi-

dency, gaps between the intentions

and deliverables of EU energy market

legislation remain. Room for improve-

ment therefore continues to exist,

among other matters with regard to so-

called vulnerable consumers (i.e. dis-

advantaged groups which have inade-quate access to affordable energy). As

2010 is the European Year for Combating Poverty and

Social Exclusion, the Belgian Presidency has decided to

put this issue on the EUs agenda. The 3rd internal energy

market package asks member states to define the concept

of vulnerable consumer and to provide adequate safe-

guards to protect them. Energy Ministers are also expect-

ed to make the link between the promotion of energy

efficiency and savings on the one hand and the reduction

of energy bills on the other hand. It should be noted how-

ever that progress in energy efficiency often requires sig-

nificant investments in new energy infrastructures and

energy saving techniques and technologies which are

passed on to consumers.

In short, during the first session, Energy Ministers will

thus discuss how the EUs future energy strategy can bet-

ter reflect the needs and interests of consumers, how

consumer rights and supplier obligations can be fully

enforced throughout the EU, and how a coordinated

approach among member states can con-

tribute to tackling the issue of access to

affordable energy for all citizens. Optionsto make the EUs energy policy more con-

sumer-friendly include the tackling of

poor implementation by member states,

the addressing ofpatchy national regula-

tion, the development of a common

methodology to define a measurable indi-

cator providing objective information on

vulnerable consumers, and the implemen-

tation of policies dealing with energy

price rises following large investments in

new technologies and infrastructure. During the TTECouncil of December 2-3, a benchmarking report on

making energy policy more consumer-friendly will be pre-

sented and discussed.

On September 7, the modernization and the integration

of the European energy grid will first of all be discussed.

Energy Ministers will exchange views on the role the EU

can play in simplifying and streamlining planning and

authorization procedures for new

energy infrastructure projects, on

appropriate regulatory and financial

tools to stimulate public and private

sector financing of infrastructure

investments, and on the integration of

increasing shares of variable renewable

energy sources on the grid. The EUs

objectives of competitiveness, sustai-

nability and security of energy supply

can only be attained through a reliable,

integrated and smart energy network,

which requires massive investments

over the coming two decades.However, essential cross-border inter-

connections between national energy grids are often

being blocked by cumbersome authorization procedures

and opposition of local inhabitants, leading to fragmented

energy markets.

Moreover, the existing policy framework for Trans-European

Energy Networks (TEN-E) is insufficient to address these

challenges and overcome current and future obstacles. In

order to come with a legislative proposal to replace the

existing TEN-E policy and guidelines in 2011, the European

Commission will present in November a communication on

a new energy infrastructure package to the European Parlia-

ment and the Council. This document will be further debat-

ed during the TTE Council of December 2-3.

A second theme on the agenda of EU Energy Ministers on

September 7 will be energy efficiency. One of the headline

targets of the Europe 2020 strategy is to increase energy

efficiency by 20% by the year 2020. However, without fur-

ther action, it seems that this target will

not be met. Ministers will therefore

exchange views on which measures couldbe taken to realize this objective. Energy

can be saved at all stages of the energy

chain, i.e. from generation, transmission

and distribution to consumption. As mem-

ber states energy mixes and strategies dif-

fer significantly, member states are consid-

ered to be best placed to develop their

own National Energy Efficiency Action

Plans (NEEAPs).

In addition, ministers will discuss the extent to which ener-

gy efficiency should be mainstreamed in other policy areas

(e.g. public procurement). Another issue related to energy

efficiency concerns the financing of energy efficiency

- 10 -


11/12


investments. The current economic and financial climate

has put funding under significant pressure. Ministers will

thus look into innovative ways to ensure the financing of

necessary investments.

In 2009, the Federation of Enterprises in Belgium (FEB)

commissioned McKinsey & Company, a consultancy, to in-

vestigate pathways to world-class energy efficiency in Bel-

gium. The findings of this study can be accessed online by

following the Internet link provided in the section Links in

this newsletter.

The spring 2011 European Council is expected to adopt a

new Energy Action Plan for the period 2011-2020. Discus-

sions in the current Energy Council of September 6-7 will

serve as preparatory work for this new energy strategy.

Key on the agenda of this weeks Economic and Financial

Affairs (ECOFIN) Council are two taxation topics. First, a

discussion will take place on the possible introduction of a

levy on banks. Second, the introduction of a possible tax

on financial transactions is on the agenda as well. The aim

of such a tax would be to reduce the number of specula-

tive transactions on financial

markets. Those against

argue that taxing transac-

tions could harm the reco-

very of the financial sector

and result into the delocali-

sation of finance activities.Consequently, the discus-

sion concerning this topic

will concentrate on whether

or not such a tax would be effective or not. In addition, the

payment of a second loan tranche of 6,5 billion EUR to

Greece is most likely to be authorized. In the light of this,

the decision by Slovakia not to participate in the Greek

bail-out operation will be discussed as well. Finally, the

results of Julys stress test exercise, which uncovered 7

out of 91 European banks to be undercapitalized, will be

assessed in order to decide whether or not to repeat the

exercise. The revised guidance, which includes the use of

reverse stress tests and which was published by the

Committee of European Banking Supervisors in August,

will also be discussed. Reverse stress tests are tests in

which banks themselves assess under which circumstances

they would collapse.

In the light of the agreement on the creation of a Euro-

pean Systemic Risk Board (ESRB) for macro-prudential

supervision (ESRB) and three European Supervisory

Authorities (ESAs) for micro-prudential supervision on

September 2, the Ministers of Economy and Finance will

formally allow these new watchdogs to be installed at this

weeks Council. If the European Parliament formally adopts

the new legislation on September 20-23 at its plenary

session, the ESRB, the European Banking Authority (EBA),the European Insurance and Occupational Pensions

Authority (EIOPA) and the European Securities and Markets

Authority (ESMA) will be up and running according to plan

in January 1, 2011.

Ahead of the ECOFIN Council, the Task Force on economic

governance, chaired by Herman Van Rompuy, President of

the European Council, will gather on September 6. The

Eurogroup will meet on September 7, exceptionally after

the ECOFIN Council, and will discuss the current state of the

Greek economic adjustment programme as well as the

issue ofstrenghtening the coordination of economic

governance in the eurozone and a new structure for the

Stability and Growth Pact.

Website of the Belgian Presidency of the Council of the European Unionhttp://www.eutrio.be

Website on the Belgian EU Presidency of the Federation of Enterprises in Belgium (FEB)http://eupresidency.vbo-feb.be

Study Pathways to World-Class Energy Efficiency in Belgium, by McKinsey & Company in cooperation with theFederation of Enterprises in Belgium (FEB)http://www.energyefficiency.be/files/EnergyefficiencyinBelgium_fullreport.pdf

LINKS

Economic and Financial Affairs Council &Eurogroup meeting (September 6-7, 2010)


12/12

Presentation of the European Department of the FEB

Diane StruyvenDirector of the European Department of the FEB Permanent Delegate to BUSINESSEUROPE

Tel: +32 (0)2 515 08 [email protected]

Michael VoordeckersAdvisor at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

Arnaud ThysenDeputy Advisor at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

Michiel HumbletIntern at the European Department of the FEBTel: +32 (0)2 515 08 [email protected]

Pieter-Jan Van SteenkisteIntern at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

TEAM PRESENTATION

BrusselsCalling -12 -

FEB Federation of Enterprises in Belgium

Ravensteinstraat 4 1000 Brussels Tel. 02 515 08 11 Fax. 02 515 09 15

PUBLISHER: Olivier Joris Wolvenbergstraat 17 1180 Brussels

PUBLICATION MANAGER: Stefan Maes Tel. 02 515 08 43 [email protected]

GRAPHIC DESIGN: Vanessa Solymosi, Landmarks [email protected]

COPYRIGHT: Reproduction with acknowledgement of source is permitted

Brussels calling, Belgian EU Presidency, Business Newsletter, 06/09/2010, Issue 2

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Transcript of Brussels calling, Belgian EU Presidency, Business Newsletter, 06/09/2010, Issue 2