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MEMO/03/179

Brussels, 19th September 2003

Preparation of the Competitiveness Council of Ministers, Brussels, 22nd September 2003

The EU's Council of Ministers responsible for competitiveness will meet in Brussels on Monday 22nd September at 10am under the chairmanship of the Italian Minister for European Affairs, Rocco Buttiglione, and the Italian Minister for Education, Universities and Research, Letizia Moratti. The European Commission will be represented by Internal Market and Taxation Commissioner Frits Bolkestein, Justice and Home Affairs Commissioner Antonio Vitorino, Enterprise and Information Society Commissioner Erkki Liikanen and Research Commissioner Philippe Busquin.

Internal Market Strategy (JT)

Ministers are expected to agree conclusions on the Commission's Internal Market Strategy (see IP/03/645 and MEMO/03/100), which was presented by the Commission at the May 19th Competitiveness Council.

Mr Bolkestein will tell the Council that comprehensive and speedy implementation of the Strategy is essential to stimulate once again the process of economic integration within the Internal Market that has already brought Europe 2.5 million jobs and €877 billion euros of extra prosperity since the 1992 watershed (see IP/03/7 and MEMO/03/2).

He will express the Commission's concern that important indicators concerning the functioning of the Internal Market are starting to "flash red" for example, growth in intra-Community trade has slowed to a crawl over the last few years, a very disappointing picture on foreign direct investment, and price convergence within the EU stalling since 1999. All this points to structural rigidities in the functioning of the EU's product and capital markets. The Internal Market Strategy tackles a large number of these obstacles in order to facilitate trading in goods and services.

Mr Bolkestein will also point out again to Ministers that, if the Internal Market is to reach its potential, Member States must honour the commitments made by Heads of State and Government at successive European Councils to implement on time the EU laws they have themselves adopted. He will indicate that there is little chance of the Competitiveness Council succeeding in getting more attention paid to Competitiveness by other Council formations if it neither adopts important proposals that are on its own table, nor implements conscientiously the laws it does manage to adopt.

The latest figures show that in July 2003 only two Member States, Denmark and Spain, met the European Council's target, an implementation deficit - the percentage of Directives that are not implemented in national law in due time - of 1.5% or less. The EU average has moved up to 2.8%, the worst score since 2000 (for more details see IP/03/1272).

Community Patent (JT)

The Presidency will present a progress report on the proposed Community Patent Regulation. The Council reached a common political approach on this at the March Council (see MEMO/03/47) and a Council working group continues to work on detailed issues, notably translations.

Mr Bolkestein will urge the Council to agree all remaining issues without delay, given the importance of the Community Patent for European competitiveness, so as to allow adoption of the Community Patent Regulation itself before the end of 2003.

The Community Patent will give inventors the option of obtaining a single patent legally valid throughout the European Union, thereby lessening the burden on business and encouraging innovation by making it cheaper to obtain a patent and providing increased legal certainty. At the moment, patent protection in just eight European countries costs some €50,000, around five times as much as in the US or Japan. The Community Patent, on the basis of the common political approach agreed in March, would halve these costs to some €25,000 for a patent valid in 25 Member States.

Action Plan on company law and corporate governance (JT)

Commissioner Bolkestein will present the Commission's Action Plan on company law and corporate governance (see IP/03/716 and MEMO/03/112).

The Action Plan aims to strengthen shareholders rights, reinforce protection for employees and creditors and increase the efficiency and competitiveness of business. It is based on a comprehensive and prioritised set of proposals for action, covering several years, and devotes special attention to a series of corporate governance initiatives aiming at boosting confidence on capital markets.

The Council is expected to adopt conclusions expressing support for the Commission's Action Plan.

The right of citizens of the Union and their family members to move and reside freely within the territory of the Member States (PP)

The Council is expected to reach a political agreement regarding a Commission modified proposal for a Directive on the right of citizens of the EU and their family to freely move and reside within the territory of the Union.

The Commission presented this proposal on 23rd May 2001. It aims at recasting the existing body of legislation in the field of free movement and residence into one legislative instrument. Moreover, the proposal makes the right to move and reside more transparent, more user-friendly and easier to apply across the Union. The basic concept of the proposal is that Union citizens should be able to move between Member States on similar terms as nationals of a Member State moving around or changing their place of residence in their own country.

The main content of the new measures proposed is as follows:

  • to simplify the conditions and administrative formalities associated with the exercise, by citizens of the Union and members of their families, of the right of free movement and residence in the Member States;

  • the proposal brings an important innovation by introducing a permanent right of residence after four years of uninterrupted residence in the host Member State;

  • the proposal also defines more clearly the situation of family members and makes it easier for them to exercise their right of free movement and residence.

  • the proposal further restricts the scope for refusing or terminating residence on grounds of public policy, public security and public health.

In February 2003, the European Parliament adopted its legislative resolution demanding some amendments to the proposal. The EP broadly supported the Commission proposal, but asked to extend the notion of family members and to have recognition of same-sex spouses and unmarried partners by all Member States. The majority of the amendments were integrated into the Commission modified proposal adopted on 11 April 2003 (COM (2003) 199 final).

The main issues on the table of Council's discussions are:

  • notion of family member: several delegations are in favour of maintaining a more traditional notion of family members and are opposed to extending this to unmarried partners;

  • conditions and formalities linked with the right of residence: many Member States consider that a simple declaration is not sufficient;

  • non-EU family members: the main difficulties encountered here concern the extension of the right of residence with no formalities to six months;

  • expulsion: several delegations oppose the original text of the Commission which forbids expulsion for permanent residents.

  • students: some delegations want to reduce students' rights, notably concerning family reunification and acquisition of right of permanent residence.

Directive on Pedestrian Protection (PH)

The Council is expected to reach a political agreement regarding the Commission proposal for a Directive on pedestrian protection, as amended after the European Parliament's resolution in first reading.

8,000 pedestrians and cyclists are killed and a further 300,000 injured in the EU each year in road accidents. The proposed Directive on pedestrian protection aims to mitigate the severity of injuries to pedestrians in the event of a collision with a motor vehicle. The proposal lays down the basic requirements in the form of various tests and limit values to be fulfilled in the design of the frontal structures of motor vehicles with regard to pedestrian protection.

Under the proposal, motor vehicles will have to pass a number of tests. In a first phase, starting in 2005, new types of vehicles must comply with two tests concerning protection against head injuries and leg injuries. These tests are based on the recommendations of the Commission's Joint Research Centre. In a second phase, starting in 2010, four tests of increased severity will be required for new types of vehicles, two tests concerning head injuries and two concerning leg injuries. These tests are based on the recommendations of the European Enhanced Vehicle Safety Committee (“EEVC”). Within five years from the start of the second phase, all new vehicles will have to comply with these test requirements.

In the light of technological development in this area it is foreseen that alternative measures to the requirements laid down in the proposal might be developed, possibly including active safety measures (i.e. measures aiming at avoiding the accident altogether).

Article 5 of the proposal provides that a feasibility assessment will be carried out by 1 July 2004 concerning the proposed technical test provisions for the second phase (EEVC tests) and other measures which potentially may have at least equal protective effects. Should the feasibility assessment show that these alternative measures have at least equal protective effects the Commission will consider relevant proposals to amend the Directive.

The proposed measures will be completed with detailed prescriptions to be set out in a Commission decision.

    Background

During 2001 the Commission successfully concluded negotiations with the associations representing the European, Japanese and Korean automobile manufacturers (ACEA, JAMA and KAMA), concerning a commitment by the industry to introduce measures to increase pedestrian protection.

The commitment included a series of tests aimed at improving the frontal structures of motor vehicles so as to reduce injuries to pedestrians, as well as a number of additional active and passive safety measures conducive to enhanced pedestrian protection. In its Communication of 11 July 2001(1), the Commission presented the commitment undertaken by ACEA relating to pedestrian protection and announced that after consulting the European Parliament and the Council it would decide whether to accept the industry commitment by means of a recommendation or to propose legislation based on the content of the industry commitment.

Both the European Parliament and the Council have welcomed the main elements of the industry commitment as regards the measures for improving the design of car fronts. However, the Council(2) in its conclusions of 26 November 2001 made its acceptance of the commitment conditional to specific conditions including, inter alia, Member States' involvement in the commitment's implementation and deferral of the adoption of Daytime Running Lights (DRL) measures.

The European Parliament, in its resolution of 13 June 2002(3), asked for a “framework” Directive laying down the application dates, the goals to be achieved and the method to monitor their application. In view of the Council's unanimous backing of the industry commitments and the European Parliament's support of its contents, but at the same time its request for a “framework” Directive in this area, the Commission adopted a proposal for a Directive on pedestrian protection, which is aimed at providing a framework to ensure the legal certainty of the industry commitment.

Chemicals legislation results of the public consultation (PH)

The Commission will inform Ministers on the results of the internet consultation on the new chemicals strategy (REACH) and will update them on the progress made so far with developing the revision of the chemicals legislation. See MEMO/03/103 and IP/03/646.

G10 Medicines European-based pharmaceutical industry (PH)

The Council is expected to adopt conclusions on the Commission's communication on G10 Medicines which was adopted on 1st July 2003 prior to the G10 Medecines Conference organised by the Italian Presidency in Rome on 10/11 July (see IP/03/924). The Commission will give a short introduction which will be followed by an exchange of views. The Health Council will discuss their own, but compatible, response to the G10 initiative later during the Italian Presidency.

The G10 Council Conclusions which are expected to be adopted reflect the main competitiveness and research-related aspects of the Communication. In particular, they:

  • recognise the vital role played by the pharmaceutical industry in the industrial, health and biotechnology sectors;

  • underline the need to reinforce competitiveness of the industry (including the generic and non-prescription sectors) throughout Europe;

  • highlight the need to integrate public/private research and between Member States.

  • support the proposed benchmarking exercise;

  • invite Member States to consider the Commission proposals concerning introduction of more price competition and access to the market; and

  • invites the Commission to launch an EU-wide reflection on different approaches to pricing and reimbursement taking full account of national competence.

The Commission will report regularly to the Council on implementation progress. Long-term success of G10 will depend on both the Commission and Member States working to take forward proposed actions in the context of achieving public health objectives.

    Background

The G10 Medicines Group was set up by Commissioners Liikanen and Byrne, in March 2001, to examine ways of improving the competitiveness of the European-based pharmaceutical industry within the context of achieving high level public health and social policy goals. The membership consisted of Ministers from France, Germany, Portugal, Sweden and the United Kingdom, industry representation of the innovative sector (EFPIA and GSK), generic producers (EGA) and the self medication sector (AESGP), representatives of the mutualities (AIM) and patient research (Picker Institute). The Group produced a report in May 2002 making a number of recommendations. The G10 Communication represents the Commission's political response to this report. For more information on the G10 Communication, please see:

http://pharmacos.eudra.org/F3/g10/g10home.htm.

Biotechnology - Implementation of Strategy + Roadmap (PH)

The Commission will remind Ministers of the results of the first annual report on the Strategy on Life Sciences and Biotechnology (see IP/03/313 and MEMO/03/103) and highlight the need for action by the Member States to implement major parts of the Strategy. The Commission will provide an update of developments during the year and will ask Ministers to indicate actions at national level, which should then be covered in the next Commission report. The Council is expected to adopt Conclusions.

    Background

In its first progress report since adopting the EU strategy on life sciences and biotechnology in 2002, the European Commission indicates that the risk of diverging policies in Member States could seriously hamper the effectiveness and consistency of the EU strategy in this field. While progress has been made in some areas, such as the adoption of the EU 6th Research Framework Programme and the EU regulatory framework for GMOs, others are suffering from serious delays. For instance, Member States are slow in transposing biotechnology patents legislation. Delays increase the risk of failing to meet in the area of life sciences and biotechnology the March 2000 Lisbon European Council objectives, for Europe to become the most competitive and dynamic knowledge-based economy in the world. Decisive action and concrete commitments are urgent: these include in particular more research and financial resources, and completing the system for the protection of intellectual property rights.

EU Action Plan to boost research efforts in Europe (FF)

On 30th April 2003, the Commission adopted a Communication on “Investing in research: an action plan for Europe” (COM(2003)226) which sets out initiatives to reach the Barcelona ”3% objective”. The Action Plan identifies initiatives required to increase the level of investment in research in the EU from 1.9% to 3% of average Gross Domestic Product (GDP), with two-thirds financed by the private sector.

The Council, at its meeting on 13th May 2003, had a first exchange of views on this Communication.

On 22nd September, the Council may adopt a Council Resolution responding to the Commission's Communication. The Resolution would invite Member States, Acceding countries and the Commission to develop and implement several measures aimed at achieving the 3% objective, through the open method of co-ordination, such as:

  • promoting human resources,

  • developing a European risk capital/venture capital market,

  • improving the environment for the development of new technologies,

  • and intensifying co-operation between industry and public research.

ESA-EU framework agreement (FF)

The Commission's Communication “Towards a European Space Policy (COM(2001)718 final) proposed establishing a formal link through a Framework Agreement between the European Space Agency (ESA) and the EU. At its meeting on 27 March 2002, the Council gave the Commission a mandate to negotiate the framework agreement.

Ministers are expected to adopt the Framework Agreement at the Council on 22nd September. A formal Council decision should follow soon.

The agreement is intended to achieve a “coherent and progressive development of an overall European space policy” and sets out the various fields for co-operation, such as: science, research, technology, Earth observation, navigation, communication by satellite, human space flight and microgravity, launchers and spectrum policy related to space.

Stem cells (FF)

The Council will have a first debate on the Commission's proposal of 9th July 2003 for implementing provisions concerning EU funding for research activities involving the derivation of embryonic stem cells from human supernumerary embryos.

The Council decisions on the specific programmes of the Sixth Framework Programme stipulate that detailed implementation provisions concerning research activities involving the use of human embryonic stem cells which may be funded by the EU will be established by 31st December 2003.

After receiving the European Parliament's opinion, which is expected to be adopted at the EP's plenary session of 17-20th November 2003, the Council will handle this issue at its session on 27th November.

International Thermonuclear Experimental Reactor (ITER) (FF)

Research Commissioner Philippe Busquin will report on the progress achieved since the Council meeting on 13th May 2003 on the ITER file, in particular in view of achieving the objective to host ITER in Europe.

The Commission's Communication (COM(2003) 215 final) addresses major issues such as international organisation, costs and location of the site. Currently four sites have been proposed: one in Canada, one in Japan and two in Europe (Cadarache in France and Vandellós in Spain).

At its meeting on 13th May 2003, Ministers discussed the issue of the European candidate site. A group of experts, chaired by Sir David King, Chief Scientific Advisor to the United Kingdom government, has submitted a report to the Commission examining both European sites, and concluding they are of very high quality. Should a decision not be taken on September 22nd, further discussions will take place at the Council meeting on 27th November 2003. The Commission would then submit to the Council proposals concerning the joint implementation of ITER.

ITER aims to build a new large-scale experimental reactor producing a high level of energy through the fusion of hydrogen nuclei at very high temperature.

ITER partners include the European Union, Japan, Russia, Canada, the United States, the People's Republic of China and South Korea. The EU participates with a total of €750 million, representing the biggest share of the EU's €1.250 billion EURATOM Framework Programme (2003-2006) budget. The programme should create conditions for the construction of the ITER facility over the next few years. Total costs for ITER construction and operation should amount to €10 billion over 30 years.

European Research Council (FF)

Ministers will address the issue of the European Research Council and will discuss a note proposing the creation of a science and research agency on the model of the US National Science Foundation. The note put forward by the French delegation also suggests that the Commission could identify the existing needs concerning fundamental research in Europe.

(1)COM(2001)389 final.

(2)Conclusions of the Internal Market Council of 26.11.2001.

(3)Resolution of 13.06.2002.


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