Competitiveness Council – 20-21 February 2012
European Commission - MEMO/12/115 17/02/2012
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Brussels, 17 February 2012
The EU Competitiveness Council will meet in Brussels on Monday 20 and Tuesday 21 February, chaired by Ole Sohn, Danish Minister for Business and Growth and Morten Østergaard, Danish Minister for Science, Innovation and Higher Education. The European Commission will be represented by Vice-President Antonio Tajani, responsible for Industry and Entrepreneurship, Commissioner Michel Barnier, responsible for the Internal Market and Services, Commissioner Máire Geoghegan-Quinn, responsible for Research and Innovation, and Commissioner Androulla Vassiliou, responsible for Education, Culture, Multilingualism and Youth.
Monday, 20 February
Revision of the European rules on public procurement: Proposal for a Directive on Public Procurement
As part of the Single Market Act (IP/11/469) tabled on 13 April 2011, the European Commission presented on 20 December 2011 its legislative proposals (IP/11/1580) on modernising the EU framework for public procurement. The objective is to put in place more flexible and simpler instruments for the conclusion of public contracts and to ensure the optimal use of public funds in order to foster growth and job creation, thereby contributing to achieving the objectives of the Europe 2020 strategy. The efficiency of public tendering has become a priority for all Member States in view of the current budgetary constraints.
The Competitiveness Council will have a first orientation debate on two important issues: the conditions of access to the competitive procedure with negotiation and the services which should benefit from a lighter regime under the new rules. The Commissioner Barnier believes a final agreement on these important files can be reached before the end of 2012.
Reporting of payments to governments on a country and project basis by the extractive and forestry sectors
In order to increase transparency of payments made by the extractive and logging industries to governments all over the world, the Commission has proposed to introduce a system of Country-by-Country Reporting (CBCR). This has been done as part of the "socially responsible business" package (IP/11/1238), adopted on 25 October 2011.This system would apply to EU privately-owned large companies or companies listed in the EU that are active in the oil, gas, mining or logging sectors. CBCR is a different concept from regular financial reporting as it presents financial information for every country that a company operates in rather than a single set of information at a global level. Reporting taxes, royalties and bonuses that a multinational pays to a host government will show a company's financial impact in host countries. This more transparent approach would promote more sustainable businesses. In order to cover the various types of companies active in these industries under the CBCR system, the Commission proposed to revise both the Transparency Directive (2004/109/EC) to cover listed companies and the Accounting Directives (78/660/EEC and 83/349/EEC) to cover large non-listed companies.
Commissioner Barnier welcomes the Danish Presidency's determination to reach a political agreement on adoption of this proposal. At the Council, Member States are expected to agree on a general approach as a basis for starting negotiations with the European Parliament.
Proposals for a Regulation on European Venture Capital Funds and for a Regulation on European Social Entrepreneurship Funds
The Commission adopted proposals on European venture capital funds and social entrepreneurship funds in December 2011 (IP/11/1513). Both proposals relate to private financing. Venture capital funds are essential to providing such finance to innovative businesses across the EU, yet European venture capital funds are smaller and less effective than those in other key markets, such as the US. The proposal on venture capital funds tackles these problems head on through a new European brand for the funds and a passport for raising funds across the whole EU. This should support growth in the EU by improving the range and depth of financing available to small businesses during their crucial early phases of development.
Twinned with this is the proposal on social entrepreneurship funds. Social businesses are a particular type of small enterprise that has been emerging, that combines business techniques with social goals. These businesses typically have a primary focus on social goals, such as supporting marginalised or disadvantaged groups by providing them with innovative services or offering them employment opportunities. Such businesses can face specific difficulties in accessing finance. The EU proposal on social entrepreneurship funds tackles this by following the approach for the venture capital funds, creating a new EU-wide brand for funds that provide investments to social businesses, and new opportunities for fundraising. The goal is to help ensuring the effective growth and development of a EU-wide social business sector.
Considerable progress has been made on both proposals in the Council working groups and the Danish Presidency expects to complete the technical work in the coming weeks. The Presidency has underlined the vital importance of moving forward quickly on these proposals, envisaging adoption at first reading preferably during the course of its mandate, and the Commission strongly supports this.
Patent Package: Information from the Presidency
As part of the Single Market Act (IP/11/469) tabled on 13 April 2011, the European Commission presented two legislative proposals (IP/11/470) under the enhanced cooperation procedure to reduce the post-grant costs of patents in Europe by up to 80%. Once in place, they will allow any company or individual to protect their inventions through a single European patent which would be valid in 25 Member States. The draft regulations lay down the terms and conditions for obtaining unitary patent protection, its legal effects and the applicable translation arrangements.
In December 2011, the Polish Presidency reached an agreement with the European Parliament on the draft regulations that was endorsed by the Competitiveness Council. The European Parliament however considers the two strands of the reform of the European patent system (unitary patent protection and the creation of a Unified Patent Court) as a package and postponed the adoption of its final reports until consensus is reached on the Unified Patent Court.
Currently, patent litigation in Europe is fragmented and expensive: national patent courts only decide on the validity of European patents with respect to the national territory, thus a patent owner needs to launch court proceedings in a number of different courts in order to enforce his/her European patent on the same invention throughout Europe. This creates unnecessary costs as well as legal uncertainty for business. The Member States have decided to set up a Unified Patent Court through an international agreement.
At the Competitiveness Council in December 2011, the Polish Presidency presented a compromise package on a number of outstanding, politically sensitive issues including the seat of the future Unified Patent Court, the principles of financing, the language of proceedings, the transitional period and the revision clause. An overall compromise however could not be achieved as governments remained split on the location of the seat of the central division of the Court. The European Council of 30 January agreed to find a solution on the last remaining issue by June 2012.
Commissioner Barnier calls for the earliest possible agreement so that new sources of growth for the European economy can be delivered through substantially reducing the costs and complexity of the European patent system. Any solution needs to be in the interest of the users of the patent system.
Europe 2020 – Orientation debate
On 23 November 2011, the Commission presented its second Annual Growth Survey (AGS), establishing five political priorities, both at European and national levels, for encouraging growth in Europe, related to:
The Competitiveness Council will contribute to the AGS through a political discussion, in line with the conclusions of the European Council of 30 January, which emphasised the need for strong growth supporting policies, related in particular to fighting youth unemployment, strengthening the Single Market and SME finance.
On this occasion, Vice-President Tajani will stress the importance of rapid growth-enhancing measures, in particular by improving the business environment, by facilitating access to finance, especially for SMEs, as well as tapping the full potential of the Digital Single market.
The aim of these discussions is to feed into and prepare the European Council for its conclusions on the Annual Growth Survey on 1-2 March 2012.
Tuesday, 21 February
European Earth Monitoring Programme (GMES) and its operations (from 2014 onwards)
The European Commission has proposed to finance the GMES programme (Global Monitoring for Environment and Security) for the period 2014-2020 outside the EU financial framework, for which an estimated budget of € 5.8 bn is deemed necessary.
The Commission proposed to set up a specific GMES fund similar to the model chosen for the European Development Fund, with financial contributions from all 27 EU Member States based on their gross national income (GNI). This will require an agreement between the EU Member States meeting within the Council. The programme will be coordinated by the Commission and its financial management could be delegated to the Global Navigation Satellite System Agency (GSA).
Vice President Tajani will underline the Commission's strong and resolute commitment to the future of GMES as well as encouraging in-depth discussions on the Commission's proposal.
The Competitiveness Council will have an exchange of views on the Commission proposal and the future of the GMES programme.
Europe 2020 - Annual Growth Survey
The Commission will underline the key role research and innovation will play to help improve Europe's competitiveness in the face of stronger global competition. The 2012 Annual Growth Survey underlines the need to protect expenditure on research, education and innovation because they provide the launch-pad for future growth and prosperity. Equally important, however, is the need to increase the efficiency and impact of this expenditure.
EU-level measures include the commitments of the Innovation Union, which were strongly supported by the European Council of February 2011. Good progress was made in 2011 on improving conditions for innovation, including the Commission's proposals on standardisation, EU public procurement law, venture capital and a unified patent. The European Council of January 2012 set clear deadlines for adoption of these proposals in 2012. It will review progress and set further orientations on innovation at its March meeting. The Commission's future research programme, Horizon 2020, will contribute to the implementation of many of the Innovation Union commitments as it brings together all existing EU research and innovation funding programmes, providing support in a seamless way from idea to market.
Commissioner Geoghegan-Quinn will underline three major ways to enhance growth through research and innovation: (1) the adoption and the implementation of the ERA Framework later this year, (2) better combination of supply-side measures (grants for R&D, human resources training etc) with demand-side measures (procurement, standard-setting etc), and (3) removing bottlenecks hampering the growth of innovative firms.
Strategic Innovation Agenda (SIA) of the European Institute of Innovation and Technology (EIT)
As of 2014 the Commission proposes to bring the EIT under Horizon 2020, while maintaining the flexibility and autonomy that the Institute needs to foster innovation. In a Strategic Innovation Agenda (SIA), presented to the Council by Commissioner Vassiliou, the Commission has put forward the priorities for the EIT's future, based on the experience of its "Knowledge and Innovation Communities" (KICs) and in line with the European Union's objectives for sustainable growth. The SIA focuses on three main areas: consolidation of existing KICs and expansion towards six new ones in areas of high societal relevance (healthy living and active ageing; food for the future; raw materials; added value manufacturing; smart secure societies and urban mobility); outreach and attraction of talent; and simplification and effective monitoring.
The Competitiveness Council will have an exchange of views on the Commission proposal and the future of the EIT.
The Competitiveness Council will address two important elements for the success of Horizon 2020: how to establish the best framework for interdisciplinarity, and how to ensure a more accessible and SME-friendly research and innovation environment.
The Commission will emphasise the need to ensure strong coherence across all the different parts of Horizon 2020, as this is a key to the success of the programme. Commissioner Geoghegan-Quinn will explain that Horizon 2020 takes a broad approach to research and innovation, and promotes joint activities across the different "societal challenges" and other parts. Policies, market and societal objectives should be mutually reinforcing.
To foster SME participation, the Commission will underline the need for a support network offering mentoring and coaching for SME beneficiaries. Such a support service could provide assistance in preparing strategic innovation plans, in supporting IP management, or for establishing commercialisation strategies. In developing the support network, synergies should be sought with established networks and services already established in the regions.
The Commission will stress that completing the European Research Area (ERA) is a crucial component in the Europe 2020 growth and jobs strategy and its Innovation Union Flagship. Commissioner Geoghegan-Quinn will debrief Ministers on the public consultation which highlighted the principal remaining obstacles, including regarding researchers’ careers, mobility, open access to research results, and international relations - that hinder the completion of ERA. The consultation wrap-up event of 30 January gave overwhelming support for the completion of ERA in all its dimensions
Building on this consultation, the Commission intends to bring forward an ERA Framework Communication by the middle of 2012, so that ERA can be completed by 2014, as demanded by the European Council of 4 February 2011.
ERA is a "unified research area" allowing researchers, knowledge and technology to circulate freely, fostering cross-border competition and co-operation between research actors. ERA aims to end the fragmentation of research in Europe by overcoming barriers to cross-border operation and the coordination of national research policies and programmes. Achieving ERA would eliminate the duplication of effort which prevents Europe from achieving its full potential in research and innovation potential and maximising growth and jobs.
More information on wrap-up event:
More information on ERA:
A bio-economy in Europe
Commissioner Geoghegan-Quinn will present the bio-economy strategy and action plan called "Innovating for Sustainable Growth: a Bio-economy for Europe", which the Commission adopted on 13 February. Ministers are expected to discuss the strategy and action plan over lunch.
The Bio-economy Strategy and Action plan will pave the way to a more innovative and resource-efficient society which relies on renewable biological resources not only for food and feedstuffs but also for industrial purposes while protecting the environment. The Strategy aims to deliver the full potential of the bio-economy in Europe and optimise its beneficial impacts through research and innovation on economic growth, the environment and employment.
The Strategy is not a new piece of regulation. It is a strategic document identifying the long term aims and comprising twelve actions to implement. Research and innovation are at the core of the Strategy, which also recommends reinforcing policy coherence and supporting bio-economy markets and EU competitiveness in the sector. The Commission invites Member States to engage in implementing the Strategy.