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MEMO/05/360

Brussels, 10 October 2005

Preparation of the Competitiveness Council of Ministers, Luxembourg, 11th October 2005 –

(Gregor Kreuzhuber Oliver Drewes Antonia Mochan Jonathan Todd)

The EU Competitiveness Council will meet in Luxembourg on Tuesday 11th October at 10.00 under the chairmanship of, the Alan Johnson, United Kingdom Secretary of State for Trade and Industry and Lord Sainsbury of Turville, Parliamentary Under-Secretary of State for Science and Innovation. The European Commission will be represented by Vice President Günter Verheugen, responsible for Enterprise and Industry, Neelie Kroes, Commissioner for Competition, Charlie McCreevy, Commissioner for the Internal Market and Services and Janez Potočnik, Commissioner for Science and Research.

Implementation of Legislation – Internal Market Scoreboard

Commissioner McCreevy will present the overall positive overall result in July’s Internal Market Scoreboard (see IP/05/961). At 1.9%, the transposition deficit - the average percentage of Internal Market Directives in force that have not been written into national law - for all 25 Member States is the second lowest since monitoring began in the early 1990’s, and 11 out of 25 Member States have reached the target of 1.5% transposition deficit. The new Member States have produced a particularly impressive performance, on average better than the EU-15 Member States, despite having had to absorb the whole EU ‘acquis’ in a short timeframe. Some Member States still lag behind on transposition and some also still incorrectly apply Internal Market rules - only four Member States have managed to reduce the number of their infringement cases. In order to resolve Internal Market problems, Commissioner McCreevy will recommend use of the SOLVIT network and, in the future, the Internal Market Information system (IMI), which the Commission is developing in close co-operation with Member States.Commissioner McCreevy will inform Member States that, in addition to the annual Scoreboard in July, the Commission is planning a ‘mini Scoreboard’ around February every year which will produce results for the Spring European Council so that Member States can see how they are performing.

Better Regulation

The Commission has launched a broad better regulation initiative designed to cut-red tape, to tackle excessive regulation and to help to strike the right balance between costs and benefits of legislation. “Better regulation” forms an integral part of European Commission’s “Partnership for Growth and Jobs. Improving the quality of regulation can significantly spur growth in the EU economy and business. Vice President Verheugen will report on the progress which has been made so far to advance this priority.

On 27 September the Commission announced the results of a major screening exercise. After screening 183 proposals for EU laws pending at the European Parliament and Council, the Commission has decided to scrap more than a third (68) Some of the proposals were inconsistent with the objectives of the new Partnership for Growth and Jobs (Lisbon) or did not meet better regulation standards. Others were not advancing in the legislative process, or were simply outdated. This exercise demonstrates the Commission’s determination to ensure that the quality of legislation in Europe promotes the objectives of the Partnership for Growth and Jobs. Vice President Verheugen will inform Ministers about the next steps in better regulation which will now focus on simplifying and updating the existing 80.000 page body of EU legislation. The Commission will launch a new phase including a work programme end of October 2005. The Commission has asked Member States, business and citizens to tell it where red-tape and over-regulation can be cut. An internet consultation on this will run until the end of December. The Commission cannot achieve better regulation on its own. This is why Member States will present their initiatives promoting Better Regulation, as required under their “Lisbon National Reform Programmes”.

REACH

On 29 October 2003, the European Commission adopted a proposal for a new EU regulatory framework for chemicals. 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. The Council will hold a policy debate on the Registration regime including the information to be submitted at registration, and multiple registrants for a single substance: One Substance One Registration (OSOR). The Presidency aims at making progress in view of reaching a political agreement in the November Competitiveness Council.

7th Framework Programme for Research

The Council will continue its discussion of the Commission’s proposals for a 7th Framework programme with a policy debate. In order to organise the debate, the Presidency has proposed 3 main areas for discussion:

“Ideas” programme – the European Research Council

“Capacities” programme

Evaluation and monitoring

Commissioner Potočnik will also take the opportunity to present the Commission’s proposals for Specific Programmes that were adopted on 21 September (see IP/05/1171).

Any other business

(a) State Aid action Plan and Innovation

At the request of the UK Presidency, Competition Commissioner Neelie Kroes will present the State Aid Action Plan adopted by the Commission in June 2005 (see IP/05/680). This plan outlines the guiding principles for a comprehensive reform of state aid rules and procedures over the next five years. In particular, the Commission intends to use the EC Treaty’s state aid rules to encourage Member States to contribute to the Lisbon Strategy by focussing aid on improving the competitiveness of EU industry and creating sustainable jobs, on ensuring social and regional cohesion and improving public services. The Commission also aims to rationalise and streamline procedures, so that the rules are clearer and less aid has to be notified, and to accelerate decision-making.

Commissioner Kroes will also present the Communication on State Aid for Innovation (see IP/05/1169). The suggested improvements include rules for aid that funds innovation, criteria to help public authorities to target aid more effectively, clarifying the rules to increase legal certainty and simplification of the regulatory framework. The proposals for innovation aid cover six broad areas: innovative start-ups; risk capital; the integration of innovation into existing rules on state aid for research and development (R&D); innovation intermediaries; training and mobility between university research personnel and SMEs; and poles of excellence for projects of common European interest.

(b) European Enterprise Awards

Vice President Verheugen will present a new competition that will be publicly launched by the European Commission November 2005. The European Enterprise Awards aim to raise awareness of enterprise activities and celebrate entrepreneurial success. The awards will recognise excellence in promoting entrepreneurial spirit, encouraging enterprise in disadvantaged areas, reducing red tape, improving enterprise education, and promoting sustainable business practices.

(c) Commission Communication on Industrial Policy

Last week the Commission launched a new, more integrated industrial policy to create better framework conditions for European manufacturing industries in the coming years. Vice President Verheugen will present the new policy to Ministers. The new EU industrial policy will complement work at Member State level to support a strong and dynamic industrial base. It includes seven new cross-sectoral initiatives – on competitiveness, energy and the environment, on intellectual property rights, on better regulation, on industrial research and innovation, on market access, on skills, and on managing structural change - which will benefit a wide range of industry sectors. In addition, it includes forward seven new initiatives targeted at specific sectors, such as pharmaceuticals, defense and information and communication technologies. There is a focus on investment in skills and equipping people for change. This industrial policy aims to support adaptability and structural change to boost the competitiveness of EU manufacturing, especially in the light of increasingly strong competition from China and Asia. This is an important step in the delivery of the new Lisbon “Partnership for Growth and Jobs”.

(d) Life Sciences and Biotechnology

Mr Verheugen will inform the Council about the third progress report: “Report from the Commission to the European Parliament, to the Council and to the European Economic and Social Committee; Life Sciences and Biotechnology – A strategy for Europe – Third progress report and future orientations” and about the Commission’s intention to make a mid-term review of the life sciences and biotechnology strategy and its action plan in 2006-2007.


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