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Brussels, 11 July 2006

President Barroso calls on G8 to lay the foundations for a stable energy future and makes new aid proposal for Africa

Speaking at a press conference in Brussels today, European Commission President Barroso called on G8 leaders to go the extra mile to agree a common set of energy security principles to lay the foundations for a stable energy future. One of the key tests for G8 leaders in St. Petersburg will be to agree on a common set of energy security principles, covering all actors in the energy chain from producing to consuming and transit countries. For the European Commission, the other main priority is for G8 leaders to step up the pace in delivering on the landmark pledges on Africa at Gleneagles last year. The EU is determined to keep Africa at the centre of the political stage. In a letter to President Putin, President Barroso has today announced that, not only is the EU is on track to deliver its Gleneagles pledge to double aid by 2010, it is already planning to go further with an ambitious proposal to set up a €3 billion fund to promote good governance, a critical element in effective aid spending.

President Barroso said, “There are two key messages I will take to the G8 table in St. Petersburg. On energy, we need to create the right climate for both investment and supplies to flow freely. The G8 must agree a set of principles which will lay the foundations for a reliable, affordable and sustainable energy system. Our second priority is to keep Africa centre stage. With the commitments made at Gleneagles, there is real hope that African poverty could be ended. But all G8 partners must step up delivery to make a lasting difference. And we need to move further and faster. Money alone is not enough, sound governance goes to the heart of sustainable African development. With this ambitious proposal for a €3 billion governance fund, the EU is making a significant shift in development policy to reinforce the Gleneagles goals.”

Background: The G8 summit and key issues

The G8 Summit is a meeting of the world’s leading industrialised countries – France, the United States, the United Kingdom, Russia, Germany, Japan, Italy and Canada. The European Commission President participates as a full G8 Member, both in the annual summits and in the preparations through his “Sherpa”.

The Russian G8 Presidency has made energy security, infectious diseases, education the three key issues for this year’s G8 Summit which will take place in St. Petersburg from July 15-17.

Energy security

The current situation

The world has entered into a new energy era dominated by rising demand and high, volatile oil and gas prices. The figures speak for themselves: gas and oil prices have nearly doubled in Europe in the last two years. Europe’s import dependency is forecast to rise to 70% by 2030. There is underinvestment along the entire global energy chain - over €16 trillion is needed over the next 20 years to meet expected energy demand and replace aging infrastructure. And our climate is getting warmer.

What the EC wants from the G8:

The key test for G8 leaders meeting in St. Petersburg in July will be to:

• Agree a set of global energy security principles which will cover all the actors in the energy chain, from consumer, to producer and transit countries. The framework must commit G8 leaders to:

• A market based system at the heart of the new framework must be a fundamental commitment to open, transparent, competitive, energy markets, as the best guarantee for an efficient, functioning global energy system, and the key to global energy security.

• Diversification of supply and demand of energy source, of country of origin, of transportation and means of transport. That includes changing the energy mix, including nuclear power where appropriate. There must be a clear commitment to accelerate the transition to a low carbon economy, to promote the large scale use of renewable energy and to strengthen investment in innovative energy technologies.

• Energy Efficiency A commitment to promote energy efficiency, as the more affordable environmentally responsible option to meet the growing energy demand.

• Climate change It is vital that G8 leaders recommit themselves to deliver on the commitments made in Gleneagles to meet the objectives of reducing green house gas emissions, improving the global environment and enhancing energy security and cutting air pollution.

Follow up to Gleneagles – Africa

The three main pledges made at Gleneagles in 2005 related to debt relief, aid and trade. G8 leaders agreed to: full debt cancellation for 18 African countries; a $50bn (£28.8bn) boost to aid to developing countries; on trade there was a commitment to work towards cutting subsidies and tariffs. African leaders committed to democracy and good governance as part of the deal.

Last year the European Union took important commitments in the run up to the G8 Summit in Gleneagles. This enabled Europe to play a leading role in aid and trade by providing 80% of the $ 50 billion of aid by 2010, half of which should go to Africa , by pushing for and getting a development package at the Hong Kong Ministerial in December, including a €2 billion pledge of aid for trade.

• On aid financing, Europe is delivering. It has not just met its commitment to reach aid worth 0.39% of GNI by 2006; as the Commission has reported, it will probably pass this mark and deliver aid worth 0.42% of GNI this year.

  • On governance: Not only is the EU on track to deliver its Gleneagles pledge to double aid by 2010, it is already planning to go further with an ambitious proposal for supporting African governance by setting aside an incentive envelope of about €3 billion, to supplement initial country allocations. For ACP countries, part of the 10th EDF (about €3 billion out of a total of €22.7 billion) will be set aside in an incentive envelope. An assessment on both the governance situation and the relevance, ambition and credibility of government's commitments for reform, will play a key role in deciding how to distribute this incentive envelope that will supplement the initial allocations per country.

• On trade, as the Commission has recently reported, the recent revision of the Commission’s preferential trade scheme, the Generalised System of Preferences, has extended the scheme to 300 additional products - mostly in the agriculture and fishery sectors. A new GSP Plus arrangement has been established targeted at especially vulnerable countries that have ratified and effectively implemented key international conventions related to sustainable development. Currently it ensures duty free treatment in 91% of tariff lines and therefore represents an extremely generous level of access. This is on top of the Everything But Arms arrangements that provide duty free access for nearly all goods from Least Developed Countries.

• But more must be done. Hence the importance and urgency of reaching a balanced and ambitious outcome to the Doha trade round which will benefit development. That is what the Commission is working towards in the coming days and weeks.

On Fighting infectious diseases and Education:

The current situation

Major diseases such as HIV/AIDS, tuberculosis, malaria, and measles continue to exact a heavy toll on economies and societies around the world, particularly in developing countries. And although progress has been made towards reaching the UN Millennium Goal of providing free and compulsory primary education for all children by the target date of 2015, still over 100 million children are out of school, including 59 million girls.

What the EC wants from the G8:

• In the discussions on both education and infectious diseases, the EC priority has been to push a strong development agenda:, by stepping up the fight against diseases like AIDS, tuberculosis and malaria which have such a disproportionate and deadly impact on Africa; and by endorsing new forms of education co-operation between and among developing and developed countries.

• Given the EC’s responsibilities in the prevention and management of avian flu, the EC has also pushed G8 leaders go further in terms of their international co-ordination and co-operation on avian and pandemic influenza prevention and management.

• On education, it is vital that the G8 keeps up the momentum given at Gleneagles regarding the focus on Africa and its commitments to the Education-for-All-Fast Track Initiative, to accelerate progress towards the Millennium Development Goals.

• The EC is also keen to share with the G8 its extensive experience of transnational education co-operation between 25 to 45 European countries, to improve international mobility and promote lifelong learning, by offering models which have been successfully developed such as Erasmus, the Bologna Process and the forthcoming European Qualifications Network as a G8 model to improve international mobility as well as social cohesion.

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