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Brussels, 28th February 2003

Preparation of the Competitiveness Council of Ministers, Brussels, 3rd March 2003

The EU's Competitiveness Council takes place in Brussels on Monday 3 March 2003 at 10.00 am in the Justus Lipsius building of the Council. At this Council meeting, the Commission will be represented by Internal Market Commissioner Frits Bolkestein, Research Commissioner Philippe Busquin and Enterprise Commissioner Erkki Liikanen. On behalf of the Greek Presidency, the Council will be chaired by Apostolos Tsohatzopoulos, the Minister of Development.

Preparation of the Spring European Council (FF/JT)

The Council will endorse the Report of the Competitiveness Council to the Spring European Council. This report has been drafted by the Presidency and covers the three sections of the Competitiveness Council (Internal Market, Industry and Research). With reference to research (chapter "Building the European Knowledge-based Economy"), the Report stresses the need for increased co-ordination between Member States to create the European Research Area (ERA), a true internal market for science and knowledge.

The open method of co-ordination should firstly be applied to a number of research-related areas, such as the objective, endorsed by the March 2002 Barcelona European Council, of raising European research spending to 3% of EU average gross domestic product (GDP), up from the current 1,9%. The Council supports the Commission's efforts to help meet the 3% objective, and invites the Commission to present an Action Plan on the 3% objective. The Action Plan is due in a few weeks time.

For his part, Internal Market Commissioner Frits Bolkestein will emphasise the need to close the gap between the good intentions expressed by the European Council in Lisbon three years ago and the adoption and implementation in practice of the necessary economic reforms. He will make particular reference to the proposals on takeovers and the Community Patent (see below) where decisive political action is needed.

Simplifying and reducing the volume of existing legislation (JT)

Mr Bolkestein will present the Commission's recently adopted Communication (IP/03/214). This is a practical follow-up to last year's Action Plan on Better Regulation aiming to reduce the Community acquis by at least 25% by 2005. It shows that the Commission has heeded calls not to limit simplification to the "easy" measures, but includes issues such as health and safety, social security rules, and environmental protection.

Community Patent (JT)

The Council will seek to agree on the main outlines of the proposed Community Patent, including a system of jurisdiction whereby a Community Court would rule on disputes (see MEMO/02/255, MEMO/01/451, IP/00/714 and MEMO/00/41). The Community Patent would give inventors the option of obtaining a single patent legally valid throughout the European Union at a fraction of the existing cost of doing so. 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, if agreed on the basis of the current compromise text, would halve these costs to some €25,000 for 25 Member States rather than just eight still more than the US or Japan but very much better than the current situation. The adoption of the Community Patent was identified as a top priority by the March 2000 Lisbon European Council because of its potential to boost innovation and competitiveness.

Mr Bolkestein will stress that this is "make or break time" and that the Commission may withdraw its proposal if agreement cannot be reached by the Spring European Council. The Commission is determined that companies using the Community Patent should not have to run the risk of potential legal action before national courts in each and every Member State. This could not only lead to divergent legal interpretations of disputed patents but also give rise to massive inconvenience and legal expenses for Community Patent holders. The Commission is determined to ensure that the Community Patent will be useful to business, offering both low costs and legal certainty.

The Council has already reached broad agreement last year on the basis for compromise on other aspects such as languages, cost and the central role of Munich-based European Patent Office (EPO established under the 1972 European Patent Convention) (see MEMO/02/99). The jurisdiction is the last and decisive piece of the puzzle.

Takeover bids (JT)

The Council is due to review progress on the new proposal and exchange views on this issue. The Commission adopted a new proposal for a Directive on takeover bids on 2 October 2002 (see IP/02/1402 and MEMO/02/201). The proposal was identified as a priority by the March 2000 Lisbon European Council in view of its potential benefits in terms of facilitating restructuring and so boosting competitiveness. It would in particular offer European firms greater legal certainty for cross-border takeover bids and protect the interests of minority shareholders where control of a company changes hands.

The proposal is based on the principle that the future of the company should be decided by its owners the shareholders - and not by its managers. It would also inter alia introduce:

  • a common definition of the "equitable price" in a mandatory bid

  • a squeeze-out right enabling a majority shareholder to require the remaining minority shareholders to sell him their securities

  • a sell-out right enabling minority shareholders to require the majority shareholder to buy their securities following a takeover bid

  • greater transparency concerning companies' capital structure and control and the defensive mechanisms they have put in place

  • a break-through rule whereby structural defensive measures were neutralised following a successful takeover bid.

Mr Bolkestein will emphasise the need for all parties to work together to reach agreement on this proposal. The Commission is ready to examine all ideas which can help the early adoption of this proposal, for example with a single reading by the EU's Council of Ministers and the European Parliament.

Enforcement of Intellectual Property Rights (JT)

Mr Bolkestein will present the Commission's recently adopted proposal (IP/03/144 and MEMO/03/20). The objectives of the proposal are to harmonise national laws on the means of enforcing intellectual property rights and to establish a general framework for the exchange of information between the responsible national authorities. The proposed Directive would ensure a level playing field for right holders in the EU, reinforce measures against offenders and thus act as a deterrent to those engaged in counterfeiting and piracy. The proposal complements a recently adopted proposal to improve the existing Regulation on seizures by customs of counterfeit goods entering the EU from third countries (IP/03/75).

Competitiveness and Entrepreneurship (PH)

The Commission will present recent findings in competitiveness and entrepreneurship deriving from the following recent documents:

  • the Green paper on entrepreneurship,

  • the Communication "Thinking small in an enlarging Europe" that introduces the SME package and the 2003 implementation report on the European Charter for small enterprises as well as

  • the Communication on "Industrial Policy in an enlarged Europe".

The Green paper on entrepreneurship published last January stresses that Europe needs to produce more entrepreneurs and to get more entrepreneurs to grow their businesses. In the EU, proportionately fewer citizens are involved in new entrepreneurial ventures than in America and their businesses do not grow so as much as those in the US. The Green paper aims at stimulating debate on the future agenda for entrepreneurship in order to enhance efforts to foster entrepreneurship in Europe. Entrepreneurial initiative and risk-taking should be encouraged in the first place to boost job creation and growth. Besides wealth and jobs, entrepreneurship brings benefits to society, such as availability of a wide variety of products and services. It can also be a keystone in building social cohesion when access to entrepreneurship is made easier for economically disadvantaged groups or regions (see IP/03/87).

The Communication "Thinking small in an enlarging Europe" presenting the SME package's main findings and the 2003 implementation report on the European Charter for small enterprises (part of this package) adopted last January underline the need to improve small business policy across Europe. One of the key findings is that EU Member States and candidate countries need to "listen better to small businesses": consultation of small businesses remains low in both policy and law-making. Europe therefore urgently needs to give small businesses the opportunity to voice their views (see IP/03/98) as recommended in the Charter. Progress to implement the Charter last year is encouraging, but not enough: there is a need to accelerate progress, to further exchange good practice and to focus on strategic areas such as education for entrepreneurship and cutting red tape. In the candidate countries the main challenge is to build an entrepreneurial culture.

The European Charter for small enterprises was created as an instrument to improve the environment for small businesses, based on the open method of co-ordination and the exchange of best practices.

Last December, the Commission adopted the Communication "Industrial Policy in an enlarged Europe" giving its approach on the improvement of EU industry's competitiveness. The communication sets out the industrial policy challenges that Europe must take up now if it is to deliver on European citizens' rising environmental, employment, social and public health expectations. How can the three pillars of sustainability (economic, social and environmental) be developed in a balanced way, to ensure that, in the global context, European competitiveness is increased and economic growth is stimulated ? While industrial policy is a horizontal policy addressing general framework conditions, the Communication stresses the importance that the horizontal approach has a sectoral application, taking the specific needs and characteristics of individual sectors into account. With this Communication, the Commission has launched a pan-European debate on how best to enhance industry's vibrancy, dynamism, and world-wide competitiveness, it invited contributions from all stakeholders to this debate (see IP/02/1884).

The Commission presentation will be followed by a public debate by the Ministers based on a questionnaire prepared by the Presidency. The questions proposed by the Presidency to guide the public debate focus on the above three topics. Commission will react at the end of Ministers' interventions.

The Council is expected to adopt Council conclusions on the "Promotion of entrepreneurship and small firms" without discussion.

Chemicals legislation package (PH)

The Commission will give a short update on the state of preparation of the chemicals legislation package. The point is also included in the agenda of the Environment Council on 4 March.

Green Paper on European Space Policy (FF)

European Research Commissioner Philippe Busquin will present the Green Paper on European Space Policy (COM(2003)17 final), as adopted by the Commission on 21 January 2003.

The Paper, prepared by the Commission in co-operation with the European Space Agency (ESA), looks into Europe's strengths and weaknesses in this sector. The report lays the foundation for broad consultation, to be held from 22 January to 30 May 2003, and tackles key issues such as the EU's independent access to space, scientific excellence in this field, and the industrial and technological base. The Paper also looks into relevant markets, human resources, the legal and institutional framework, international co-operation, and environmental and security issues.

The Paper attempts to launch a debate with all parties - national and international organisations, the EU space industry and users, scientific community and citizens. The consultation will help shape an EU response to competitiveness and security challenges concerning space, to be detailed in a forthcoming White Paper due out later this year. As part of the consultation, the Commission has organised a launch event on 6 March in Brussels followed by a series of workshops running until June.

International Thermonuclear Experimental Reactor (ITER) (FF)

In anticipation of a full progress report to be presented at the forthcoming Competitiveness Council on 12/13 May, Commissioner Busquin will present the preliminary status of the ongoing negotiations on the ITER (International Thermonuclear Experimental Reactor) nuclear fusion energy research project. The People's Republic of China's entry into negotiations marked a significant progress. The Commission also welcomes the USA's return to the negotiating table. They had abandoned ITER in 1998.

ITER partners include the European Union, Japan, Russia, Canada, the United States and China. 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.

Participants will have to identify the ITER site from among the four current candidate sites: Canada, Japan, France and Spain. Further details on the most important questions relating to the ITER Negotiations will appear in a Communication that the Commission will present to the Council at its meeting on 12 May 2003. A consensus on a draft international agreement to fulfil the ITER, including the site and the cost-sharing scheme between partners, is envisaged for the end of 2003.


The Portuguese delegation will present to the Council the third "EUREKA meets Asia" event, to be held in Macao in May. The event aims to strengthen the relationship between European and Asian, and particularly Chinese, businesses.

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