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MEMO/04/58

Brussels, 12th March 2004

Results of the Competitiveness Council of Ministers, Brussels, 11th March 2004 Internal Market, Enterprise and Consumer Protection issues

Community Patent (JT)

The Council failed to reach agreement on the proposed Regulation creating a Community Patent, despite the agreement on the broad outlines reached by the same Council in March 2003 (see MEMO/03/47). The main sticking point was how infringements of patents which might arise as a result of mistranslations should be treated. In the absence of agreement, the Presidency concluded that it would reflect on how to proceed further.

Speaking after the Council, Commissioner Bolkestein said "I am disappointed that more than two years after the deadline set by the Lisbon European Council, and a whole year after the Council agreed the main principles, today's Council has still proved incapable of agreeing this crucially important initiative. European industry desperately needs access to pan-European patent protection at reasonable cost with minimum red-tape and maximum legal certainty.

"The Lisbon Summit itself identified the Community Patent as a vital measure for boosting Europe's competitiveness by encouraging innovation. The failure to agree on the Community Patent I am afraid undermines the credibility of the whole enterprise to make Europe the most competitive economy in the world by 2010.

"It is a mystery to me how Ministers at the so-called "Competitiveness Council" can keep a straight face when they adopt conclusions for the Spring European Council on making Europe more competitive and yet in the next breath backtrack on the political agreement already reached on the main principles of the Community Patent in March of last year. I must stress that this is despite the very courageous and determined efforts by the Tánaiste Mary Harney to broker a compromise.

"I can only hope that one day the vested, protectionist interests that stand in the way of agreement on this vital measure will be sidelined by the over-riding importance and interests of European manufacturing industry and Europe's competitiveness. That day has not yet come."

Proposed Directive on Services (JT)

Commissioner Bolkestein presented the Commission's proposal for a Directive to create a real Internal Market in services by cutting administrative burdens and excessive red tape at national level that can currently prevent businesses from offering their services across borders or from opening premises in other Member States (see IP/04/37 and MEMO/04/3). Having taken note of the presentation, the Council stressed the importance of the proposed Directive to which it will give high priority with a view to a speedy progress.

In addition to its consideration of the Services Directive, the Council adopted conclusions on business-related services recognising their crucial role in the European economy and the contribution they can make to boosting productivity and creating new jobs. It welcomed the Commission's Communication from last December and the creation of a European Forum on business-related to services which will contribute to the preparation by the Commission of an Action Plan in this area early in 2005.

Proposed Directive on Enforcement of Intellectual Property Rights (JT)

The Council took note of information from the Presidency that the European Parliament voted on 9 March 2004 amendments to the proposal for a Directive on measures and procedures to ensure the enforcement of intellectual property rights (see IP/04/316). The Council will adopt the Directive as amended by Parliament in the next few weeks. The Council welcomed the step forward which this first-reading agreement represents in the fight against piracy and counterfeiting and underlined that the new Directive will constitute a key element of the EU legal framework in the area of intellectual property rights and in the Internal Market at large.

Contribution to the Spring European Council (PS)

The Council adopted its contribution to the Spring European Council, which will review progress on the Lisbon strategy of economic, social and environmental renewal. This was the last contribution from a sectoral Council to the Summit. Council highlighted the importance on strengthening competitiveness within Europe, the role which the Competition Council should play in that process and the priority which they hope will be attached to competitiveness in the next European Commission.

Among the issues stressed in the Contribution were:

    the need to pursue an integrated approach to ensure coherence across all Community activities which would impact business and industry;

    the importance of impact assessment;

    the need for further simplification of Community and national legislation on the basis of the rolling simplification programme launched by the Commission in 2003

The Council set itself deadlines for agreement by the end of 2004 on the proposals on the mutual recognition of professional qualifications and on unfair commercial practices and attached priority to making progress on the proposed Services Directive. It also called once again on Member States to improve their performance in relation to the transposition and effective implementation of internal market legislation.

The Contribution also highlighted the importance of meeting industrial challenges and supporting entrepreneurship, as well as continuing analysis of the risks of de-industrialisation and de-localisation and the challenges facing sectors with a strong research base, such as pharmaceuticals. Meeting these challenges means reducing Europe's productivity gap and supporting the uptake of information and communication technologies (ICTs). It also means supporting the development of new technologies and industries, for example in the environmental field.

Finally, the Council recognised the importance of progressing towards the 3% of GDP investment target for research and promoting innovation, including through practical action for example on researcher mobility, career structures and promoting research excellence and through the development of technology platforms.

Commissioner Liikanen said "The Competitiveness Council has identified key challenges which Europe must address if it is serious about putting competitiveness centre stage. We this focused contribution should help to identify priorities at the upcoming Spring Summit, but we will now need action from both Council and the Member States to show that they are willing and able to live up to these recommendations."

Stimulating entrepreneurship (PS)

The Council adopted Conclusions welcoming the Commission's Action: The European Agenda for Enterpreneurship" as well as the progress achieved in implementing the European Charter for small enterprises. It identified a range of issues which now need to be taken forward, in particular helping to change attitudes to entrepreneurship through education and training, as well as ensuring that businesses can access the skills base they need to help them to grow; improving the flow of finance for small and medium sized businesses and seeing further progress in the overall regulatory environment.

REACH (PS)

The Council heard a Report from the Presidency on the initial progress made in reviewing the proposals for modernisation of the EU's chemicals legislation and looked forward to a substantive debate at the next Competitiveness Council.

Shipbuilding (Temporary Defence Mechanism) (PS)

The Council adopted by a qualified majority the proposal for a Council Regulation concerning a one year prolongation of the Temporary Defensive Mechanism (TDM) in favour of European shipbuilders facing unfair competition from Korean companies.

Background: unfair Korean shipbuilding practices led to a request for dispute settlement at the WTO since an amicable agreement with South Korea was not possible. In order to grant temporary relief to EU shipbuilders, a temporary defensive mechanism was brought into force in June 2002 under which aid to EU shipbuilders up to 6% of the contract value could be authorised for certain market segments and until 31 March 2004. The extension of this mechanism until March 2005 is justified because no solution has been found so far bilaterally or at WTO level.

Pharmaceuticals Package (PS)

The Council adopted as an "A point" (i.e. without discussion) the Regulation and two Directives making up the package updating the Community framework for pharmaceuticals and adapting it in the light of enlargement. This package was agreed by the European Parliament in second reading last December. Its formal signature and publication in the official journal will follow in the next few weeks. The Member States will have eighteen months to adapt their national frameworks.

Good progress on consumer protection enforcement cooperation (TM)

Health and Consumer Protection Commissioner David Byrne welcomed the considerable progress ministers made discussing the Commission proposal for a regulation on cooperation between national authorities responsible for the enforcement of consumer protection laws (see IP/03/1067). In the light of the discussion in the Council and taking account of the progress which has been achieved in the European Parliament, there is a realistic chance for a rapid adoption of the regulation.

Cross-border problems are growing as rogue traders adapt to new technologies and opportunities. The aim of the proposed regulation is to enable national public authorities to exchange information and cooperate with counterparts in other Member States as easily and seamlessly as with other authorities in their own country. The regulation will guarantee that each Member State effectively enforces EU law in its territory on behalf of all European consumers. Once it enters into force, unscrupulous traders will no longer be able to evade consumer protection authorities by targeting consumers living in other EU countries. Commissioner David Byrne said: "We need to ensure that consumers are properly protected from fake lotteries, scams, fake or misleading advertising and spam and other rogue practices, and we need to respond to their complaints. A robust system of effective co-operation is an essential tool for the challenges ahead arising from new technologies and growing integration."


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