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Brussels, 26th November 2003

Preparation of the Competitiveness Council of Ministers, Brussels, 27th November 2003 Internal Market, Competition and Enterprise issues

The EU's Council of Ministers responsible for competitiveness will continue its meeting in Brussels on Thursday 27th November at 10.00 am under the chairmanship of the Italian Minister for European Affairs, Rocco Buttiglione, the Italian Minister for Industry, Antonio Marzano 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, Competition Commissioner Mario Monti, Enterprise and Information Society Commissioner Erkki Liikanen and Research Commissioner Philippe Busquin.

Takeover bids (JT)

A compromise text presented by the Italian Presidency will be on the Council's table.

Under the proposed compromise, Member States would be able to opt out from the key provisions of the proposed Directive concerning the requirement for management to consult shareholders before applying defensive measures (Article 9) and/or the provisions for voting caps to be neutralised in a post-bid vote by a general assembly of shareholders to amend the company's statutes (the so-called breakthrough provisions Article 11). In Member States which did not apply these Articles, individual companies would be allowed to opt in but could again opt out when faced with a bidder which did not apply the same provisions.

Commissioner Bolkestein, while expressing appreciation of the efforts the Italian Presidency has made, will point out that this would mean less harmonisation than the Council agreed under the previous proposal on takeovers, before the European Parliament rejected it after a tied vote in July 2001.

This solution is not acceptable to the Commission. It would fall a long way short of ensuring that the future of a company is decided by those who own it the shareholders. It would send a negative message to the markets and might even make takeovers more difficult than they already are. Rather than opening the way to a more level playing field, the current compromise text could well preserve existing protectionist measures. Mr Bolkestein will express the hope that the EU can do better, even if more time is needed. The Commission will therefore continue to defend its original proposal (see IP/02/1402 and MEMO/02/201).

In order for the Directive to be adopted without the Commission's support, unanimity in the Council would be required.

Community Patent (JT)

The Council will seek to reach a political agreement on the proposed Community Patent Regulation. Following agreement on a broad political approach at the March Council (see MEMO/03/47), discussions on the implementation of the political approach in the Regulation are now well advanced. However, formal adoption of the Regulation at this Council will not be possible, because the Council intends to re-consult the Parliament on the basis of a political agreement.

The only major issue on which the Member States still have divergent views is on translations of claims in particular the length of the period under which the translations can be filed and the effect of the translations (legal or merely informative). Mr Bolkestein will urge Member States to reach a compromise which will safeguard both the unity and affordability of the Community Patent.

The Council will also discuss amendments to the European Patent Convention, which are necessary in order to accommodate the Community Patent. It aims to reach a political agreement. This would allow the Administrative Council of the European Patent Organisation to call for a diplomatic conference to revise the European Patent Convention, to be held in autumn 2004.

Community Trade Mark (JT)

The Council is expected to adopt a political agreement on a proposed Regulation modifying existing procedures for the granting of Community Trade Marks (CTMs) by the Office for Harmonisation in the Internal Market (OHIM) in Alicante (see IP/03/77). Community Trade Marks are valid EU-wide on the basis of a single application to the OHIM.

The new proposal would abolish the system of searches. That system was intended to help applicants for CTMs to monitor effectively the possible existence of prior conflicting rights, but in practice has not proved satisfactory. Moreover, the Regulation would amend the regime for professional representation before the OHIM to bring it fully into line with the principles of freedom of establishment and freedom to provide services.

Furthermore, the proposed Regulation would expand the system to include instruments allowing the Boards of Appeal to improve further the way they function. The Regulation would also make other procedural changes aimed at making the system simpler and more efficient, without affecting its substance or the rights of the parties involved.

Professional qualifications (JT)

On the proposal for a Directive concerning the recognition of professional qualifications (see IP/02/393, MEMO/02/52) the Italian Presidency will present a progress report on negotiations at working group level. The proposal still awaits its first reading in Parliament, expected for December 2003 at the earliest.

The Commission regards it as essential that the proposed Directive is adopted in a form which achieves a real simplification of the recognition regimes, in particular with regard to conditions for cross-frontier service provision.

The proposal would replace fifteen existing Directives with one simpler one. It would introduce more automatic recognition of qualifications.

It would allow professionals to provide temporary and occasional services between Member States without having to undergo any recognition procedure in the host Member State, but with the guarantee of full information to those receiving their services. Member States would also be required to be more pro-active in exchanging information to support the system.

Motor insurance (JT)

The Council aims to reach political agreement on the proposed Fifth Motor Insurance Directive, covering civil liability (see IP/02/838 and MEMO/02/133). The proposal aims to update the existing Motor Insurance Directives, especially the minimum amount of insurance cover, and to extend to any motor accident the procedures set up in the Fourth Motor Insurance Directive for an efficient and quick settlement of accidents taking place outside the victim's Member State of residence.

Discussion is likely focus on minimum insurance amounts for personal injuries and damage to property, where the Commission has already indicated its willingness to accept amendments made by the European Parliament (see IP/03/1437) and is open to further compromise, provide the minimum amounts fixed are binding.

Protection for pedestrians and cyclists will also be discussed. Again Mr Bolkestein will signal the Commission's openness to compromise in order to facilitate political agreement.

Review of the Merger Regulation (AT)

Ministers are expected to reach a political agreement on the Commission's proposal for a modified Merger Regulation.

The Commission on 11 December 2002 adopted a package of reforms on the way it examines mergers and acquisitions comprising:

  • a proposal to revise the Merger Regulation,

  • a draft Notice containing guidelines on the appraisal of horizontal mergers (i.e. mergers between direct competitors),

  • a draft set of best practices on the conduct of merger investigations and,

  • a number of measures relating to the staffing and resources of DG Competition.

For more information on the reform package see IP/02/1856 and Merger Review section on DG Competition's website :

Only the proposal to revise the Merger Regulation needs to be adopted by the Council. The other aspects of the reform package are either in place (e.g. appointment of a Chief Competition Economist, creation of a Scrutiny Panel) or are being finalised.

The revised Merger Regulation is expected to come into force in May 2004 at the same time as the EU takes in up to 10 new Member States.

The Merger Regulation came into force on 21 September 1990 and was amended once by the Council of Ministers in 1997 with effect on 1 March 1998. In the present revision, the Commission is proposing, among other things, that more mergers and acquisitions benefit from the one-stop shop review provided by the Commission and, therefore, to tackle the problem of multiple filings with national competition authorities.

It proposes to clarify the substantive test used to assess mergers, so as to make clear that it enables it to deal with the full range and complexity of competition problems that mergers can give rise to. It also proposes to introduce a degree of flexibility with regard to the timeframe for merger investigations while retaining its predictability and tightness.

European Competitiveness (PH)

The Council is expected to adopt conclusions on “The contribution of industrial policy to European competitiveness”.

Commissioner Liikanen will present a series of initiatives all related to competitiveness:

  • the Communication on “Some Key Issues in Europe's Competitiveness Towards an Integrated Approach” (see IP/03/1568),

  • the Competitiveness report 2003,

  • the Enterprise Scoreboard 2003,

  • the Innovation Scoreboard 2003,

  • the Communication on “The future of the textile and clothing sector in the enlarged European Union ” (see IP/03/1463),

  • the Communication on “A Coherent Framework for Aerospace A Response to the STAR 21 Report” (see IP/03/1396),

  • the Communication on LeaderSHIP 2015 which presents the Commission's position on the different issues raised by the report of the LeaderSHIP 2015 High Level Advisory Group and future work. The key areas which are addressed are:

    • establishing a Level Playing Field in World Shipbuilding

    • improving Research, Development and Innovation Investment

    • developing Advanced Financing and Guarantee Schemes

    • promoting Safer and More Environment-Friendly Ships

    • a European Approach to Naval Shipbuilding Needs

    • protection of Intellectual Property Rights (IPR)

    • securing the Access to a Skilled Workforce

    • building a Sustainable Industry Structure


  • the results of the consultation on the Green paper on “Entrepreneurship in Europe”.

Machine directive Intermediary report (PH)

The Presidency will present a progress report to the Council. In 2000, the Commission issued proposals to streamline and clarify the 1998 New Approach Machinery Directive which ensures the free movement of machinery within the EU and lays down essential health, safety and consumer protection requirements.

The 2000 proposal aims to increase legal certainty by clarifying the Directive's scope and meaning (better definition of concepts and relation with other Directives) and to ensure a high level of health protection and consumer safety (strengthening market surveillance).

Chemicals legislation (PH)

The Council is expected to address the state of play on REACH (Proposal for a Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals).

The Competitiveness Council on 10 November 2003 already held a public debate on REACH (see MEMO/03/226 and MEMO/03/222).

Background: Under the proposed new system called REACH (Registration, Evaluation and Authorisation of CHemicals), enterprises that manufacture or import more than one tonne of a chemical substance per year would be required to register it in a central database. The aims of the proposed new Regulation are to improve the protection of human health and the environment while maintaining the competitiveness and enhancing the innovative capability of the EU chemicals industry. REACH would furthermore give greater responsibility to industry to manage the risks from chemicals and to provide safety information on the substances. This information would be passed down the chain of production. The proposal has been drafted in close consultation with all interested parties, including via an Internet consultation. This has allowed the Commission to propose a streamlined and cost-effective system (see IP/03/1477).

Sustainable tourism (PH)

This is an information point by the Commission based on written information. On 21st November 2003, The Commission adopted a Communication on “Basic orientations for the sustainability of European tourism. This Communication highlights the economic, social and environmental sustainability challenges facing European tourism and proposes policy measures accordingly (see IP/03/1585).

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