The Week in Europe 19/05 01/06/01

EU news in brief

Internal Market: Scoreboard reveals mixed performance by Member States

The latest issue of the Internal Market Scoreboard, published by the European Commission on 28 May, reveals that the EU's average implementation deficit for Internal Market Directives has shrunk to 2.5% - down from 3% only six months ago. However, only three Member States (Sweden, Denmark and Finland) meet the European Council's 98.5% implementation target set at Stockholm. Since the last Scoreboard in November 2000, Portugal and Luxembourg have made great strides, both moving up four places in the overall rankings. Sweden ranks first and has been able to cut its already low deficit in half, to 0.5%. The worrying news is that Austria and the UK, whose deficits were already among the highest, are backsliding. The Scoreboard also reviews environmental Directives, where the average deficit is an alarmingly high 7.1%. The number of alleged infringements of Internal Market rules keeps growing and is now at nearly 1,800, up by 7% since last November. The Scoreboard also contains the results of a survey of prices for consumer electronics and fresh foods, which show that large price differences continue to exist across Member States.

Price comparisons are good indicators of economic integration and market performance. Competitive and efficient markets, where goods are traded freely, maintain downward pressure on prices. Consumers therefore have a keen interest in a well functioning Internal Market. In the context of the Single Market Scoreboard, the Internal Market Strategy (see IP/01/564) and the monitoring of product market performance, the European Commission has conducted an exercise to monitor and benchmark the size and causes of price differences. Two surveys were conducted - on consumer electronics and fresh food. The results show that large price differences continue to exist across Member States for these product types. The findings of these surveys are featured in the eighth edition of the Single Market Scoreboard .

[Background paper IP/01/750]

The text of the latest Scoreboard is available from the Europa Website:

http://europa.eu.int/comm/internal_market

Commission launches broad debate on agriculture and food

Commissioner for Agriculture, Rural Development and Fisheries, Franz Fischler met representatives of Swedish consumers, the farming sector, food industry, retailers and the academic world in Stockholm for a round table discussion on "agriculture and food" in Sweden and Europe. Stockholm hosts the first such round table, of which others will follow elsewhere in Europe.The broad debate on the future of agriculture and food in Europe was initiated earlier this year jointly by Commissioner Fischler and David Byrne, Commissioner for Health and Consumer Protection. "This round table is the starting point for a broad debate in the member states with all those directly involved on what our society expects from the agricultural sector and from the food we eat. We cannot leave this discussion to politicians and experts. Our aim must be transparency, quality and safety and a farm sector in tune with the environment and animal welfare. It is time to ask ourselves if the farm policy in place fully meets the objectives we all agree upon. This debate provided valuable input for the review of the Common Agricultural Policy (CAP) next year, for ideas to develop a even more sustainable farm and food sector in the future", he said. The Commissioners will also participate in an internet chat on 6 June 2001 (http://europa.eu.int/comm/chat/fischler-byrne/index_en.htm).

[Background paper IP/01/751]

Commission welcomes Environment Agency report

European Environment Commissioner Margot Wallström has welcomed the timely report on environmental signals published by the European Environment Agency (EEA). She said : "This type of report fits well into the Commission's vision, underlined by the Sixth Environmental Action Programme, of creating a solid knowledge base for future environment policy. The Action Programme calls for regular environmental information to be made available to a wide audience. As well as this report, integration indicators, headline environmental indicators and indicators for sustainable development will also be published. The report confirms a number of worrying trends - climate change, transport, waste, and the decoupling of resource use and growth - which form the basis for the priorities chosen in the Action Programme and the Strategy for Sustainable Development. At the same time it is encouraging to see some positive results in some areas, for example in water and air quality and increased use of renewable energies. Also, we see the first signs that integration of environmental concerns pays off : in an area like agriculture for instance, more and more farmers are moving towards environmentally friendly farming." The full text of the report is available on the EEA's web side at :

http://reports.eea.eu.int/signals-2001/index_html

President Prodi and Prime Minister Verhofstadt launch debate on Brussels, a capital for Europe

In the first event of its kind, the President of the European Commission and the Prime Minister of Belgium are to host two brainstorming sessions with noted intellectuals from across Europe, to discuss the future shape and character of Brussels as Europe's capital. The first session (30th May 2001) considered what the ingredients of a capital for Europe should be. The second session (19th September 2001), will reflect on how Brussels can express these aspirations.

The initiative follows the Nice summit, which strengthened the role the city of Brussels plays in the life of the European Union, by agreeing that in future it would be the regular home of European Council meetings. The intention is to reflect on how Brussels can provide a common area in which citizens of all countries feel equally represented.

[Background paper IP/01/756]

Financial services: Commission proposes Directive on insider dealing and market manipulation

The European Commission has presented a proposal for a Directive on insider dealing and market manipulation ("market abuse"). The proposal would increase standards for market integrity in the securities field throughout the EU. It is based on the principles of transparency and equal treatment of market participants and would require closer cooperation and a higher degree of exchange of information between national competent authorities than currently exists. The proposal would reduce potential inconsistencies, confusion and loopholes by establishing a basic framework for the allocation of responsibilities, enforcement and cooperation within the Community. The initiative is one of the centre pieces of the Financial Services Action Plan, and the drive to create an integrated services market by 2003. It is one of the first two proposals for Directives under the new "Lamfalussy" Stockholm format distinguishing framework principles from implementing technical details (see also IP/01/759 on prospectuses). The Commission intends to adopt technical measures to complement the framework principles established by the Directive after consulting Member States' representatives in a Securities Committee. [Background paper IP/01/758]

Commission unveils next steps towards European Research Area

The European Commission passed another milestone in the creation of a European Research Area with the approval of five new research programme proposals and a new plan to support networks of national research programmes. The EUR 17,5 billion Research Framework Programme for 2002-2006 is now on schedule for operational launch in the second half of 2002. Present proposals set out a clearer picture of the organisation, working arrangements and priorities proposed for this new 4-year programme. They also outline new methods of funding research. The European Research area was proposed by the Commission on 18 January 2000 (see IP/00/52) and guidelines on how to make a reality of the European Research Area were adopted by the Commission on 4 October 2000 (see IP/00/1117). The new Research Framework Programme implementing the European Research Area was adopted on 21 February 2001 (see IP/01/240). Now, the five so-called specific programmes giving more detail on where and how the proposed budget of this framework programme will be spent have been adopted. For a detailed breakdown of the individual budgets for all five specific programmes see MEMO/01/206.

[Background paper IP/01/766]

Commission proposes to prohibit tobacco advertising

The European Commission proposed on 30 May a new Directive on tobacco advertising and sponsorship. The new proposal aims to harmonise existing regulations on tobacco advertising in Member States with a view to fostering the internal market. Most Member States have far-reaching prohibitions of tobacco advertising in place. At the same time the proposals seeks - as foreseen in the EC Treaty - a high standard of health protection for its citizens. The draft Directive will outlaw tobacco advertising in the print media and it will also prohibit advertising of tobacco products in the radio and on the Internet. Equally sponsorship by tobacco companies of events or activities involving or taking place in several Member States will be outlawed.

David Byrne, Commissioner for Health and Consumer Protection said: "Tobacco is a highly addictive product and over 80% of smokers begin before the age of 18 years." He said that tobacco advertising had a role in portraying smoking as a socially acceptable and rewarding experience. "The sad truth is that smoking kills over half a million EU citizens per year, robbing people years of life expectancy. The industry uses advertising and promotion acitvities to recrute new smokers to replace these 'lost " customers."

[Background paper IP/01/767]

Franz Fischler in Ireland : "The future of agriculture is in the hands of consumers"

Speaking at a food conference in Dublin on 31 May, Franz Fischler, European Commissioner for Agriculture, Rural Development and Fisheries, called on the food processors to ensure that any food passing from "stable to table" meets the quality standards consumers nowadays demand. According to Mr Fischler it was not only the Irish beef market that suffered from the BSE crisis, consumer confidence also suffered a blow to consumer confidence. "We must now concentrate our efforts on restoring it. There is no doubt that the future of our food and agricultural policies rests in the hands of the consumers." In response to the demands for a sustainable agricultural system, Commissioner Fischler announced his intention to further strenghten the Rural Development Policy and agri-environmental under the mid-term review of the Common Agricultural Policy (CAP) next year. [Background paper SPEECH/01/254]

Distance Marketing of Financial Services

At the session of the Internal Market Consumer Affairs and Tourism Council the Member States and the Commission were unable to bridge the gap necessary for reaching a political agreement on the proposed Directive on distance marketing of financial services. Despite substantial efforts made on the part of the Presidency, Member States and the Commission to accommodate concerns held by some Member States, some Member States insist on applying their own consumer protection rules against incoming financial services providers pending further harmonisation of legislation to protect the consumer. This approach is at odds with the principle set out in the June 2000 Directive on Electronic Commerce, due to be transposed by the Member States before 17 January 2002.

Preparing consumers for the Euro

Member States presented activities and progress in their respective countries on how consumers are being informed and prepared for the introduction of euro notes and coins on 1 January 2002. The various reports given by Ministers during the session of the Internal Market Consumer Affairs and Tourism Council demonstrate that public awareness and knowledge are increasing, but that a lot of work is still to be done. A number of Member States expressed particular concern about the level of bank charges for cross-border transfers. This concern is shared by the Commission. It will be very hard to explain and justify to consumers that on 1 January 2002 there will be one currency, but the transfer of money from an account in one country to an account in another country is still very high. Ministers called for co-ordinated action to ensure that the level of bank charges are brought down to a level compatible to that of a single payments area.

President Arafat meets President Prodi and Commissioner Patten in Brussels

The President of the Palestinian Authority, Yassar Arafat, met President Prodi and Commissioner Patten in Brussels on 31 May to review the current situation in the Middle East and the role of the EU in supporting efforts to end violence and bring about a resumption of peace talks. Commissioner Patten and Minister for Planning and International Cooperation, Nabeel Shaath, signed a Financing Agreement providing euro 60 million of budgetary aid to the Palestinian Authority. This support will be paid monthly, in six equal instalments. This support is in addition to the previous reimbursable loans provided in December 2000 and January 2001 (euro 57.5 million). The Commission's contribution is part of a wider effort by the international donor community to support the Palestinian Authority and population under the current difficult circumstances.

For further information:

http://europa.eu.int/comm/external_relations/gaza/intro/index.htm[Background text: IP/01/769]

Financial reporting: Commission welcomes adoption of fair value accounting Directive

The European Commission has welcomed adoption on 31 May by the EU's Council of Ministers and the European Parliament of a Directive to modernise EU accounting rules by introducing the "fair value" accounting method. The Directive amends the EU's Accounting Directives to take account of developments in markets (such as widespread use of so called derivatives), business and international accounting standards. It will make it easier for European companies raising capital worldwide to comply with the financial reporting requirements of international capital markets and thus compete on equal terms with non-European competitors. The fact that this Directive has been adopted only 15 months after it was proposed by the Commission (see IP/00/187) highlights the effectiveness of the extremely cooperative and productive approach that the Commission, Parliament and Council have taken to working together on this initiative. The Directive forms part of the Financial Services Action Plan (see IP/00/1269). For further information on the Fair Value Accounting Directive, see the Europa internet site at: http://europa.eu.int/comm/internal_market (look under Accounting).

[Background paper IP/01/770]

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