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Telecoms package

member states and ep rapporteurs reach compromise

The latest three-way meeting on the tele-coms package was a success. Ambassadors from the EU member states all approved, on 29 April, a compromise from the EU’s Czech Presidency and the European Parlia-ment’s rapporteurs that was tied up the night before and rephrased ex-Amendment 138 on internet users’ rights. The compromise paves the way for adopting this reform, scheduled for 2010, on regulating telecoms in the EU towards more competition. It must still be voted on by MEPs in the plenary session of 4-7 May in Strasbourg.

The compromise, which should unblock the telecoms package, removes the need for a “prior decision from the judicial authori-ties” to be able to restrict the basic rights of those who use electronic communications networks. The measures on access to com-munications networks or their use must respect the basic rights of internet users, like the right to privacy, freedom of expression and access to information. But a big differ-ence compared with the original version of Amendment 138 of the EP (now 46) is that the compromise stipulates the right of inter-net users “to a judgement by an indepen-dent and impartial court”. A judicial deci-sion would therefore no longer be needed beforehand.

According to our sources, it would there-fore be up to member states to decide on measures that prevent citizens exercising their basic rights. The Greens are said to oppose the new text.

The amendment would be included in an article, as wanted by MEPs. It would be linked to a recital “recognising that the internet is essential for education, exercis-ing one’s freedom of expression and access to information”. Therefore, the explana-tion of the article continues, “any restriction imposed on exercising basic rights must con-form with the European convention protect-ing human rights and basic freedoms”. The Commission will also be asked to launch “a broad public consultation” on these issues.

FRANCEThe original amendment caused prob-

lems for France in particular as it is in the midst of debating a controversial draft law against illegal downloading. It was to be reviewed by the National Assembly – fol-lowing one rejection – on the evening of 29 April. The law foresees creating an indepen-dent administrative authority (therefore not judicial) responsible for sending warnings to internet users who download works ille-gally, or even cutting off their connection in the case of repeat offenders. The adop-tion of ex-Amendment 138 as is by the EP’s Industry Committee, on 21 April, rekindled the debate between the compatibility of EU decisions and the draft French law. In the wake of the European vote, the cabinet of French Culture Minister Christine Alba-nel confirmed, however, that “legally, this amendment will not prevent France from adopting its draft law because suspending home internet access after several warnings is not a restriction of fundamental rights”. n

By Nathalie Vandystadt

Focus

TheEuropeanaffairsdaily Thursday30April2009N°374437thyear

By eric van puyvelde

spanish support for Barroso and almunia

SpanishPrimeMinisterJoseLuisRodri-guez Zapatero voiced “very firm” sup-port,on29April, forJoséManuelBar-roso to serve a second term as headof the European Commission. “This issupport thatwon’tchange,”hetold thepress,standingalongsideBarroso,aftertheir meeting in Brussels. The SpanishsupportforBarrosoisnotnewbutthispubliccommentatsuchahighlevelisakeyelement,onlyweeksawayfromtheEuropeanCouncil,on18-19June,whenthe heads of state and government areexpectedtostatetheirpreferencesonthenextCommissionpresident.BarrosohasthebackingofGermany,theUnitedKing-domandinprincipleFrance,butalsohasanumberofdetractors.Zapatero also paid tribute to JoaquinAlmunia.Hesaidhewas“verysatisfied”withboth theresponsibilityassignedtothe Spanish commissioner – economicandmonetaryaffairs–andwithAlmuniahimself.JoaquinAlmuniaisnotexpectedto be called back to Madrid, but if hisappointment in Brussels is renewed,Spain would like to obtain a key post.Competition has been discussed butZapaterowouldapparentlybepleasedtoseehimkeephispresentportfolio.

FiVe years aFTer: WhiTher eNlargemeNT? pages 19-29

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contents N° �744Top stories

Business & competitivenessTelecoms package: Member states and EP rapporteurs reach compromise .........1State aid: Commission adopts simplification measures ..........................4SMEs: Eurochambres and UEAPME want better impact assessment ................... 4Company law: Commission seeks to eliminate ‘take money and run’ culture .... 5

Financial services, banks, insuranceFinancial markets: EU to regulate hedge fund managers ..............................5

sectoral policiesTransport: Parliament proposes urban mobility action plan .....................6Cyprus: ECJ upholds right to return of land in north of island .............6Environment: Seven priorities for saving biodiversity ..............................7

social affairsMexican flu: Transport ministers ponder coordinated response ..................7Labour Day: Business and unions unite in call for crisis action .......8Social policy: Ageing to cost EU extra 4.75% by 2060 .........................9Social policy: Europe marks day of intergenerational solidarity .................9Working Time Directive: Business organisations worried about calculation of on-call time ...................10

institutionsEuropean elections: EPP reiterates faith in market economy .......................102010 EU budget: Priority given to anti-crisis measures ...........................11

external relationsEnergy: Moldova to join Energy Community of SE Europe ....................12Copenhagen climate treaty: No one matching EU’s emission reduction targets for 2020 ....................12EU/Russia: Fisheries cooperation agreement now official .........................13Eastern Partnership: Euronest launch set for September 2009 .............13EU/Japan: Union’s external trade deficit shrinks ...............................13

in BriefState aid for Fiat authorised .................14Czech aid for ‘green’ public transport cleared ...................................14Clearance for British fiscal scheme ......14Commission extends probe into Lufthansa-Brussels Airlines deal ...........14Inquiry into aid to Hungarian fertiliser producer .................................14Polish airport aid approved ...................14 eu agenda ..........................................15

insightFive years after: Whither enlargement?Prospects gloomy for future expansion ....19Previous waves leave questionable legacy ...................................................20Western Balkans: Risk of instability .....21The state of play ....................................23Interview with MEP Libor Roucek, vice-chair of the EP’s Foreign Affairs Committee: Western Balkans should not fall victim to Wall Street bankers .28Interview with MEP Elmar Brok, member of the Christian Democratic Union (CDU): We will not make any exceptions, including for Iceland .........29

insightJurisprudenceWorking conditions: Advocate-general reinforces rights of pregnant workers ....30

FiVe years aFTer: WhiTher eNlargemeNT? pages 19-29

4 Thursday30April2009 N°3744EUROPOLITIcs

Sold by subscription only © reproduction strictly prohibited in any languagewww.europolitics.info

Eurochambres, the European Asso-ciation of Chambers of Commerce and Industry, and UEAPME, the Eu-ropean Association of Craft, Small and Medium-sized Enterprises, launched an appeal, on 28 April, to the European Commission, the Parliament and the Council to improve the assessment of costs and benefits of EU policies for SMEs.

In a letter addressed to the Czech EU Presidency, Eurochambres and UEAPME underlined that the ‘think

small first’ principle, a key recommen-dation of the Small Business Act, should be applied systematically in all institu-tions throughout the cycle of European legislative negotiations.

The two organisations think that the current crisis has made this change all the more necessary.

“FINGERS OF ONE HAND”The SMEs believe their needs are not

“adequately weighed up in the design and negotiation of new EU policy. This perception is reinforced by the fact that the total number of impact assessments

carried out by the Parliament and Coun-cil can still be counted on the fingers of one hand,” said Ben Butters, director of European affairs at Eurochambres.

Eurochambres represents some 20 million companies in Europe – 96% of them are SMEs - with members from 45 countries and a European network of 2,000 local and regional chambers.

UEAPME is a European social partner. It has 83 member organisations that

represent crafts and small and medium-sized enterprises throughout Europe cov-ering more than 12 million companies with 55 million employees. n

With the aim of simplifying and speed-ing up state aid decisions, the European Commission adopted a communica-tion on a simplified procedure and best practices code, on 29 April.

The two texts propose that the member states increase their contacts prior to notification of aid measures so as to eliminate potential problems early in the process, and include a set of improved planning tools to tackle both difficult and straightforward cases.

These initiatives will not apply to mea-sures notified by the member states in the framework of the current economic and financial crisis, for which specific ad hoc internal procedures have been put in place to enable the Commission to react extremely quickly.

StRAIGHtFORwARD CASESThe set of simplification measures is

meant to facilitate and simultaneously speed up the handling of different cat-egories of state aid procedures: straight-forward measures notified to the Com-mission, complex cases raising novel issues and complaints.

The simplified procedure has the goal of improving the treatment of straight-forward cases, like those clearly in line with existing horizontal instruments or established decision making practice. The Commission intends to ensure that clearly compatible aid gets approved

within one month from complete notification by the member states.

The communication includes an illus-trative list of aid measures, including certain schemes for SMEs, environmen-tal aid, innovation aid and rescue and restructuring aid, which are in principle suitable for simplified treatment.

This new procedure should not only be quicker, but also more transparent, notes the Commission: interested parties will gain a new opportunity to comment

on the proposed state aid measure, as a summary of the measures notified by the member states under the simplified pro-cedure will be published in advance on the Commission’s website.

BESt pRACtICES CODEThe best practices code details how

state aid procedures should be carried out in practice, in particular as regards their duration, transparency and predict-ability.

The code includes a certain number of voluntary arrangements between the Commission and member states to

achieve more streamlined and predict-able procedures, at each step of a state aid investigation.

It will apply to all cases not covered by the general block exemption regulation or subject to the notice on the simplified procedure.

The code is based on a joint com-mitment of the Commission and the member states.

On the one hand, the Commission will offer pre-notification contacts on a more regular basis, to enhance the qual-ity and completeness of notifications. A mutually agreed timeframe will be set for particularly novel, complex or urgent cases. The Commission will also endea-vour to group its requests for informa-tion. On the other hand, member states are invited to answer more swiftly and completely case-related requests made by the Commission. To this effect, the code also proposes rigorous enforcement of existing procedural means to encour-age member states to react promptly and keep the procedures moving.

The best practices code also aims at improving the procedure for dealing with complaints, including indicative deadlines and better information of complainants. n

The best practices code and the communication are available at www.europolitics.info > Search = 248973

By Floriane pellegrin

sTaTe aid

commission adopts simplification measures

smes

eurochambres and ueapme want better impact assessment

This new procedure should not only be quicker, but also more transparent, notes the EU executive



�

The European Commission proposed a new directive on alternative investment fund managers, on 29 April, that will see those operating funds over a certain thresh-old subject to registration and oversight by national authorities.

The proposed directive was promised as part of the EU’s response to the financial crisis last year, and covers hedge funds, pri-vate equity and all funds based in the EU but not yet part of the UCITS Directive (undertakings for collective investment in transferable securities, which allow funds registered in one member state to operate in all 27). Hedge funds and private equity, as well as other alternative investment vehi-cles like real estate funds, have so far been classified as non-UCITS funds.

Currently, alternative investments are subject to various national rules. The Com-mission estimates that the alternative invest-ment sector held around €2 trillion in assets at the end of 2008. Most hedge funds that are marketed within the EU are based and registered in the UK.

The Commission says that although alter-native investments were not the cause of the current financial crisis, they have contrib-uted to turbulence on markets because of the level of risk inherent in their activities. However, the debate and ensuing proposals have polarised opinion, not least within the College of Commissioners itself, which even

on 27 April had not decided the thresholds above which the rules would apply.

tICkEt tO RIDEA draft proposal seen by Europolitics ear-

lier this week put the hedge fund threshold at €250 million, which Internal Market Commissioner Charlie McCreevy said would have captured 36% of hedge fund managers and 96% of net assets.

Under the final proposal, all hedge funds above €100 million in value and all private equity funds of €500 million or more not using leverage - those that do not borrow to finance their investments - will have to regis-ter with the member state in which they are based. They will also have to report on their activities, their structure and hold a minimum level of capital. McCreevy says that under the amended threshold, 48% of managers holding 98% of assets will now be covered.

Once they comply with all the rules, the managers of the registered funds will be given a ‘passport’ to market their products in all 27 member states - once they notify each country concerned. This is what McCreevy called the “carrot,” which is offset by the “stick” of having to regulate.

Non-EU funds will be able to operate within the Union after three years, as long as their home country regulators impose rules equivalent to those in operation in the EU - and they subscribe to the code laid down by the International Organisation of Securities Commissions (IOSCO).

Many commentators suggest that the funds rather than the managers should be regulated, with the Party of European Socialists coming out ahead of the release of the directive saying the proposal was full of “loopholes” and that non-EU managers would effectively be given free reign to market their funds in the EU. The Socialists also fear that large funds could break up into smaller ones for regulatory purposes to avoid the €100 million thresh-old. However, McCreevy was realistic about the outcome, saying it was “appropriate”. “It would be impossible to have supervisors regu-lating the day-to-day activities [of the funds],” he told journalists, on 29 April. “It would be a very effective way of killing off the whole industry.” Reaction to the news was swift from the EPP-ED group, with French deputy Jean-Paul Gauzès commenting that the proposals may not have gone far enough. “We consider that the proposal is a good step in the right direction but perhaps not enough,” he said in a statement.

NExt StEpSThe proposal will now be passed to Par-

liament and Council in the co-decision procedure, but because of the upcoming elections, it will not be discussed until next year. McCreevy estimates that by mid-2010 it could be approved. After giving member states two years to transpose the new rules, it could come into force in late 2012. It would mean that non-EU fund managers would not come under its scope until 2015. n

The European Commission issued, on 29 April, two non-binding recommendations on pay to combat what Internal Market Commissioner Charlie McCreevy called “perverse incentives” in the way bankers and top company executives have been rewarded. The Commission is suggesting that member states limit or ban severance pay for directors (the so-called ‘golden para-chute’), and link pay and bonuses to long-term performance rather than share options. For ‘risk-taking staff’ of financial institutions, bonuses should continue to be based on per-

formance but should be adjusted to take into account the cost of risk, capital and liquidity, and banks should be able to claim or ‘claw back’ bonuses already paid and based on unsound data. The Commission can not go as far as to prescribe more specific pay levels, as this would infringe national social and labour laws, which are the preserve of member states under EU rules. The recom-mendations will come into force from the end of 2009 and cover - for directors’ pay - only listed companies (those that trade on EU-regulated markets) and for risk-taking staff, all financial institutions, including pen-sion funds and insurance firms. McCreevy

said he also intends to announce changes to the new Capital Requirements Direc-tive in June to force financial institutions to implement prudent pay schemes. The pro-posed directive (COD/2008/019) is still in the co-decision process and is due for a ple-nary vote in Parliament, on 6 May. The two recommendations were released as part of a financial services package that included a proposal for a directive on alternative invest-ment fund managers and a communication on packaged retail investment products. n

Further information is available at www.europolitics.info > Search = 249001

compaNy laW

commission seeks to eliminate ‘take money and run’ cultureBy sarah colins

By sarah collins

FiNaNcial markeTs

eu to regulate hedge fund managers

� Thursday30April2009 N°3744EUROPOLITIcs


TraNsporT

parliament proposes urban mobility action plan

Subsidiarity must prevail, but the Euro-pean Commission has a role to play in promoting improved urban mobility. This is what the European Parliament intended by adopting, during its plenary session on 23 April in Strasbourg, a reso-lution on an urban mobility action plan. In this instance, the Parliament replaces the Commission since it is the one that should have published this action plan at the end of 2008. But the reluctance of cer-tain member states - led by Germany - put the case on ice.

Upon the initiative of rapporteur Gilles Savary (PES, France), MEPs therefore took over. As required by the principle of subsidiarity, their action plan does not sug-gest anything that is binding for the local authorities.

“It is out of the question,” said Savary, “for Europe to consider deciding upon any-thing in terms of urban transport instead of the local authorities. [...] There is no way

of deciding that a commune, municipal-ity or urban area should introduce a ‘30 zone’ or favour rail”. What MEPs want is to offer cities the means of undertaking responsible political mobility - for them to have the necessary information, be able to rely on the experiences of others and be financially assisted.

A MOtIVAtIONAL ROLEHere, the role of the Commission is a

motivational one. For example: the Par-liament recommends the adoption of a transport plan in agglomerations of more than 100,000 inhabitants and proposes, in order to motivate towns to submit to the exercise, that all Community financing in terms of urban transport should depend on the existence of such plans.

It also calls on the Commission to publish a compendium of applicable regulatory provisions, proposes immedi-ately launching a programme to improve statistics and databases on urban mobil-ity, opening an internet portal in order

to facilitate the exchange of experiences and the distribution of information, and considering setting up a European obser-vatory for urban mobility. It proposes installing a new generation of the CIVI-TAS programme, which helps cities to promote sustainable urban transport. And, of course, calls for a suitable finan-cial framework. With, for the 2014-2020 period, an EU financial instrument specifically dedicated to urban mobility.

AND NOw?There is clearly no guarantee that the

Parliament’s appeal will be heard. The entire process aims to encourage the Commission to act.

As Gilles Savary said, Commissioner Antonio Tajani must be able to return to the Commission and say “I believe we must do something because we have the legitimacy to do so”. The interested party replied: “This is a sign that I must listen, and I hope to be able to give Savary a positive reply during the next legislature”. n

cyprus

ecJ upholds right to return of land in north of island

A Cypriot national whose family was forced to leave the north of the island at the time of its partition, and had to aban-don land it rightfully owned there, has won its claim before the Court of Justice of the European Communities. The court recognised, in a ruling handed down on 28 April1, the right to the return of land situated in the north of the island.

The case pitted a Cypriot national, Meletis Apostolides, against a British couple, the Orams, who bought the land from a third party in order to build a holi-day home on it. In 2005, a court in Nico-sia ordered the Orams to vacate the land and to pay various sums. According to the Cypriot court, Apostolides is the rightful owner of the land. The first judgement, given in default of appearance, was con-firmed by another judgement ruling on an appeal brought by the Orams.

To have the judgement enforced, Apostolides turned to the British courts.

Initially, a ruling was issued in favour of the Orams, holding that EU legislation did not apply to the Turkish Republic of Northern Cyprus (recognised only by Ankara). Subsequently, the Court of Appeal in the UK submitted several ques-tions to the Court of Justice concerning the interpretation and application of the Brussels I Regulation2.

The EU court concluded that the sus-pension of Community law in the north-ern part of the island, provided for in the Act of Accession of Cyprus, does not preclude the application of the Brussels I Regulation to a judgement which is given by a Cypriot court sitting in the govern-ment-controlled area, but concerns land situated in the northern area. It also held that the relevant provision of the Brussels I Regulation relates to the international jurisdiction of the member states and not to their domestic jurisdiction.

On the enforceability of the judgements concerned, the court notes that the fact that Apostolides might encounter difficul-

ties in having the judgements enforced cannot deprive them of their enforceabil-ity. The situation therefore does not pre-vent the courts of another member state from declaring such judgements enforce-able. The recognition or enforcement of judgements by the Cypriot court conse-quently cannot be refused by the United Kingdom.

This ruling could set a precedent for hundreds of British nationals who have bought land in the Turkish Republic of Northern Cyprus.

The question of land is one of the most sensitive issues in the negotiations on reunification of the island, currently being led by Greek Cypriot President Demetris Christofias and Turkish Cypriot leader Mehmet Ali Talat. n

(1) Case C-420/07 (2) Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters

By isabelle smets

By anne Fekete



7

eNViroNmeNT

seven priorities for saving biodiversity

The European Union is still a long way from achieving its objective of halt-ing biodiversity loss by 2010. At the con-ference on this subject, on 27 and 28 April in Athens, the European Commis-sion pointed out that saving biodiversity means saving life itself and that this chal-lenge requires as great an effort as climate change.

“Biodiversity [...] is the basis of our eco-nomic and social well-being. This is not widely enough recognised and valued,” commented Environment Commissioner Stavros Dimas.

He added that biodiversity loss poses a threat every bit as worrying as climate change, to which it is closely tied.

The conference, which focused on the causes and ways of reversing the trend, identified seven priorities for action.1. Better communication on biodi-versity, why it matters and the con-sequences of biodiversity loss. Sound

ecosystems provide tangible benefits for the economic, social and cultural well-being of all.

2. Biodiversity research as a priority: The experts noted the need to move from protection of particular species to protec-tion of ecosystems. That means strength-ening research on the state of biodiver-sity, current trends and the functioning of ecosystems.3. A fully-functioning network of pro-tected areas: Consolidation of the Natura 2000 network is one of the great successes of EU policy but it is urgent to complete the terrestrial part of the net-

work by 2010 and the marine part soon afterwards.4. Protection of ‘ordinary’ biodiver-sity in Europe: Biodiversity policy must cover both protection of the resilience and vitality of all ecosystems and high nature value protected areas.5. Protection of global biodiversity: Europe’s ‘biodiversity footprint’ in the rest of the world is large and is growing. The experts mention global deforesta-tion as an example, noting that it must be stopped by 2030. It is urgent, they add, to take measures to reduce the negative impact of European patterns of consumption on global biodiversity.6. Integration of biodiversity into other policy areas: Research is needed to iden-tify areas where greater account needs to be taken of biodiversity loss.7. Funding: In spite of a number of exist-ing possibilities, the funds allocated to biodiversity protection are largely insuf-ficient, note the experts, who call for an increase in credits. n

mexicaN Flu

Transport ministers ponder coordinated response

Mexican flu - or “new flu virus” as the European Commission wants to call the sickness - continues to spread in Europe, with confirmed cases in Spain, the United Kingdom, Germany and Austria. Ahead of an extraordinary meeting of ministers responsible for health, on 30 April in Lux-embourg, Health Commissioner Androulla Vassiliou met representatives from the Euro-pean pharmaceutical industry in Brussels. According to her spokesperson, it was an opportunity to take stock of the situation on the availability of anti-viral medication and distribution and production capabilities.

The virus was also up for discussion at the informal Council of Transport Ministers that was held on 29 April in Litomerice in the Czech Republic. The meeting, which was originally supposed to focus solely on intelligent transport systems, saw a change to its agenda in order to address the ques-tion of the sickness being spread by trans-port. Air transport is the most likely carrier

to spread the sickness to Europe. But while several member states have discouraged travel to areas of risk, no European measure

has been taken at this stage (only Commis-sioner Vassiliou, “in a personal capacity,” has discouraged travel to areas of risk).

The situation could change since France was due to raise the possibility at Litomerice of suspending EU flights to Mexico. Other delegations, however, think this would be disproportionate at this stage. The Association of European Airlines (AEA) also called, on 29 April, for a “coordinated European response” in order to avoid a patchwork of national rules and recommendations. But what-ever the scenario (simple pieces of advice for travellers or more), no formal deci-

sion ought to be taken before the Health Council, on 30 April.

wHAt ABOUt MARItIME tRANSpORt?Like air transport, it is a carrier for spread-

ing the sickness to Europe. But the risks are a lot easier to control given the time of crossing. The fastest container ships take a week to reach Europe from the United States and Canada and two weeks for most ships coming from Mexico. In other words, this is longer than the incubation period for the sickness. If the sickness develops, it will therefore happen on board the ships and first aid should be provided at sea. In any event, EU legislation obliges the captain to submit a maritime health declaration to the port authorities upon the ship’s arrival in a Com-munity port (Directive 2002/9/EC regard-ing the declaratory formalities applicable to ships entering and/or leaving member states’ ports). Directive 2002/59/EC on monitoring ships allows port authorities to know exactly where the boats are coming from and their last ports of call. n

“Biodiversity [...] is the basis of our economic and social well-being.

This is not widely enough recognised and valued”

Air transport is the most likely carrier to spread the

sickness to Europe

By anne eckstein

By isabelle smets

� Thursday30April2009 N°3744EUROPOLITIcs


On the eve of 1 May Labour Day, which was born in the late 19th century out of a struggle by workers for better working conditions and which is a public holiday

in the best part of the European Union, Europolitics put three questions to the European Trade Union Confederation (ETUC) and the EU’s the biggest busi-ness lobby, BusinessEurope, on how they think the financial crisis is being tackled

and what the authorities should do to stop the loss of jobs and address bankruptcies. The two organisations agree that more action is needed.

By marianne slegers

laBour day

Business and unions unite in call for crisis action

According to BusinessEurope Economics Director Marc Stocker, “transitions on the labour markets” should be facilitated by investing in the “employabilty of workers”. Is there enough coordination of recovery measures in Europe?BusinessEurope has supported the actions of the member states and the Commission since the outbreak of the financial crisis. However, we clearly believe that more will be needed. The recent forecasts of the IMF are disturbing: the EU economy will contract by 4% this year, which is significantly worse than the 2.8% decline predicted in the US.Europe should do more to restore credit channels and fix financial sector problems. Governments and the European Investment Bank (EIB) should take a more active role in solving the credit crisis by offering new risk-sharing guarantees to restore companies’ access to finance or to re-launch trade financing. Coordinating national initiatives is the EU’s main contribution to solving this crisis. The Commission must develop appropriate monitoring tools to see how member states are progressing and enforce EU state aid and competition rules with vigour.Is more regulation of the financial markets necessary?There has been a systemic failure of financial markets, which has created immense disruption to the European and global economy. To ensure that such crises cannot be repeated in the future, we need a reinforced framework that is able to more effectively regu-late and supervise financial markets. In the EU, the de Larosière report on banking supervision and regulation brings forward sen-sible proposals, which are broadly endorsed by the European busi-ness community. The Council must set a timetable for the tran-sition towards a more effective oversight structure and we hope that a consensus on this issue will be reached during the June EU summit. In these discussions, decision makers will have to strike a good balance between the need to prevent excessive risk taking in the future while not strangling the future financing of entrepre-neurship, SMEs, whose research and innovation activities entail economic risks but are of greater benefit to society.Should workers be subject to more regulation?It is important to bear in mind that many countries have already taken measures to address the social consequences of the crisis, for example regarding flexible working time or the unemployment ben-efit systems. What is important in times of crisis is to facilitate tran-sitions on the labour markets, notably by investing in the employ-ability of workers. Higher investments in education and training are also crucial in view of the next economic upswing. In addition, it is essential to ensure that the initiatives taken to alleviate the con-sequences of the crisis also respond to the middle-term challenges facing Europe. Hence the need to push forward with flexicurity.

ETUC’s Economic Advisor Ronald Janssen is of the opinion that by strengthening the rights of workers, the European economy will start growing again.

Is there enough coordination of recovery measures in Europe?No, there is insufficient coordination in the EU when it comes to the recovery plans. The Commission has indicated certain areas for measures but when you look at the national recovery plans, you can see that the measures are very diverse and go into all kinds of directions so in practice there is not much noticeable of European coordination. Another big problem is that not all member states have the same financial means. For example, the Eastern European countries have much more problems with finding money with acceptable interests. It is no surprise that not many recovery measures have been taken in that part of the EU. The same goes for Italy and Greece. In fact, there is only one country that has made a big plan to tackle the economic crisis and that is Germany. The long and the short of it is that there should be more European coordina-tion and solidarity.Is more regulation of the financial markets necessary?Yes, we certainly think that the deregulation of the financial market has led to the mess of the financial crisis. Financial institutions should fall under more and better regulation. As well, there should be more rules for the capital ratios of the banks and thirdly the bonus system for managers has to change too. The de Larosière report on banking supervision and regulation was disappointing and a missed chance. The report has made no recommendation to create a European supervision body for the banking sector, which should have been the case.Should workers be subject to more regulation?We think that the failure of the financial sector is only the tip of the iceberg. Over the past ten years, workers’ rights have been eroded. Their position is weakened; they face less job security, less protection, there is less collective bargaining. Inequalities within society have been growing. Nowadays we can speak of a low wage-high debts economy. But there is a certain limit to how much debt society can shoulder. There is a point where the soap bubble will burst. The financial crisis is only the facade, behind it we can find a social recession in which the position of employees is weakened. More regula-tion will help to improve their position on the market. This will eventually mean growth for the European economy and will bring about a more balanced market. n



9

The first European Day of Solidarity between Generations was held on 29 April, one year to the day after the con-ference on Intergenerational Solidarity for Cohesive and Sustainable Societies, held in Brdo, Slovenia.

The European day was organised at the initiative of civil society associations.

The European Commission adopted for the occasion a policy communica-tion on dealing with the impact of an ageing population in the Union.

Marjeta Cotman, then Slovenian min-

ister for labour, family and social affairs, launched the idea of a day devoted to solidarity between generations at the Brdo conference, on 28-29 April 2008.

pUBLIC AttENtIONThe idea was to draw public attention

to the necessity of reinforcing relations between the elderly and young people in the context of the ageing of the population.

Vladimír Spidla, commissioner for employment, social affairs and equal opportunities, welcomed this first Euro-pean day as “an excellent opportunity

to raise awareness of what older people have to offer”.

In connection with the European day, the Commission carried out a flash Eurobarometer survey on European citizens’ views on the issue.

The majority of Europeans generally have a positive image of the elderly and 49% believe governments should make more money available for pensions and care for the elderly. n

The flash Eurobarometer survey is available at ec.europa.eu/public_opinion/index_en.htm

A report released by the European Com-mission, on 29 April, has found that member states will be paying an extra 4.75% of GDP in 2060 to deal with the effects of an older popu-lation. From 2015, deaths will outnumber births in the EU, and by 2060, the over-65 age group will make up 30% of the total popula-tion, which will remain at around 500 million (today, over-65s number around 17%). The ‘very old’ population (over 80s) will treble, to 12%. The EU’s problems will be com-pounded by a shrinking work force, which Commission experts say will lead to lower

growth rates - the only way to maintain GDP levels being to increase the productivity of the existing workforce. The EU currently spends around 23% of its GDP on ageing - that is, on pensions, health care, long-term care, educa-tion and unemployment benefits. Pensions are to see the largest rise from now until 2060 if there are no policy changes, increasing by 2.4% of GDP across member states. Health care and long-term care (increasingly neces-sary for the rising 80+ population) will go up by 1.5% and 1.1% of GDP, respectively, and education and unemployment benefits will go down. Luxembourg is to see the largest rise in public spending as a result of the ageing

crisis, while Poland will be the least affected. The findings form the basis of a Commission communication on ageing, also issued on 29 April, which implores member states to take advantage of a “window of opportunity” to implement pensions and health care reform before the current generation retires. The report will be endorsed by the Ecofin Coun-cil, on 5 May, and will feed into updated rec-ommendations the Commission is to give five member states in excessive deficit procedure (see Europolitics 3743). n

The communication is available at www.europolitics.info > Search = 249007

By sarah collins

By Floriane pellegrin

social policy

ageing to cost eu extra 4.7�% by 20�0

social policy

europe marks day of intergenerational solidarity



WorkiNg Time direcTiVe

Business organisations worried about calculation of on-call time

European business organisations are urging the EU executive to take action after the revision of the Working Time Directive failed miserably, on 27 April (see Europoli-tics 3743). The umbrella organisation Busi-nessEurope, representing over 20 million companies, has called upon the European Commission to come forward with a practi-cal solution for calculating on-call time. It says that the fact that inactive on-call time will now continue to be regarded as work-ing time is “costly for business and for public services, in particular health care”.

However, BusinessEurope is “pleased” that the opt-out is retained. “This is impor-tant in contributing to the competitiveness of the European economy. It allows workers to work overtime in order to improve their earnings.”

The European Centre of Employers and Enterprises providing Public services (CEEP) is urging the Commission to draft a new legislative proposal “finally taking into

account the constraints of services around the clock by making a clear reference to the inactive on-call time category”. According to the CEEP, “Indeed, only the ability not to count the inactive part of on-call time as working time can guarantee the effective provision of key services of general interest all over Europe”.

Eurochambres, the association of Euro-pean chambers of commerce and industry, was “very disappointed” that no deal has been struck. They blame the European Parliament for the failure. “This is predomi-nantly due the Parliament’s intransigent opposition to the ‘opt-out’, which has been taken up in a majority of member states.” Eurochambres says that the fact that the cur-rent directive will stay in place will “inevita-bly lead to further infringement cases by the European Court of Justice and thus prolong the damaging legal uncertainty in many member states”. Eurochambres has always been an advocate of the use of the opt-out (enabling workers to work more than 48 hours a week). Deleting this would be par-

ticularly counter-productive in the light of the economic crisis, the association argues.

UEAPME, the European craft and SME employers’ organisation, “regretted” the failure to reach a compromise. According to the organisation, “clear, simple and flex-ible rules on the organisation of working time are fundamental for small businesses to ensure their competitiveness on the market, all the more so during the present downturn”. UEAPME believes that the Council’s compromise was “ignored and destroyed by the Parliament”. However, the organisation thinks that “not having a deal is perhaps better than having a bad deal in this case”. From its point of view, the directive as amended by the Parliament would have been of “no use to anyone, since it left no room for manoeuvre whatso-ever on on-call time, on rest periods and on the possibility to opt out”. UEAPME says that the “ball is now firmly in the Commis-sion’s court,” which should start out from the Council compromise and “fully take into account SMEs’ needs”. n

europeaN elecTioNs

epp reiterates faith in market economy

In a prelude to the congress that will launch its campaign for the European Par-liament elections, the European People’s Party (EPP) placed at the top of its priori-ties – owing to the crisis – its faith in the social market economy as the way to create “prosperity for everyone”.

Growth and employment are not under-estimated, ranking in the EPP’s ten pri-orities for 2009-2014 right after defence of the European Union’s “values” and ahead of security concerns (energy, climate and food), protection against terrorism and a Community immigration policy.

However, the centre-right MEPs who make up the EU’s biggest political family, meeting for ‘study days’ on 28 and 29 April in Warsaw, put the spotlight on the market economy. EPP President Wilfried Martens pointed out that the market economy is “the basic principle of Christian Democracy” and underpins resolution of the crisis. The former Belgian prime minister regretted the emer-

gence of a “mentality of maximum profit with minimum effort,” which runs counter to the EPP’s “values”. Polish Finance Minis-ter Jacek Rostowski was more controversial, mentioning the crisis of capitalism and stat-ing that “capitalism during a time of crisis is better than socialism in ordinary times”. Former Polish Prime Minister Jerzy Buzek, who appears to be the lead candidate (just ahead of Italy’s Mario Mauro) in the race for the European Parliament presidency, urged the EP to cooperate closely with the European Commission and the Council to “restore confidence in markets” by combat-ing abuse, ie through better regulation.

The study days (Europolitics will be back with details on the event) were followed by the arrival, on the evening of 29 April, of no fewer than 17 heads of state and government at the Culture and Science Centre in the Polish capital. The EPP also expected more than 2,000 participants from throughout the EU for the official launch of its election campaign. With 7 June only 40 days away, the European elections are still getting little

coverage in the national media. The kick-off given on 29 and 30 April by this pan-Euro-pean congress that resembled an American convention was aimed at rousing a lifeless election campaign.

FEw ILLUSIONSThe EPP’s leaders have few illusions as to

the prospects for a more stimulating citizens’ debate but in confidence state that they con-sider the outcome of the 7 June elections cer-tain. Even if participation is low, they expect a victory by the centre-right parties, which will hold on to their number one ranking in terms of seats in the European Parliament in spite of a foreseeable fall-off. The fact that these parties are in office today in 19 of the 27 member states had created concerns over a possible resentment by voters because of the economic crisis, but internal studies together with a number of polls restore their confidence. n

The Warsaw conclusions are available at www.europolitics.info > Search = 248947

By marianne slegers

By pierre lemoine in Warsaw



11

The biggest share of funds anticipated in the European Union’s 2010 budget - 45% - will be channelled into measures to fight the effects of the economic and financial crisis, with a rather marked increase in areas such as research, energy and political cohesion. Measures to stimulate growth and employment will increase by 3.2% compared with 2009, but all headings in the budget will see a rise, underlined the European Commis-sion, which presented the preliminary draft budget, on 29 April.

The budget will reach a total of €138.6 billion in commitments (1.18% of the Union’s gross national income - GNI) and €122.3 billion in payments (1.04% of GNI). By comparison, the 2009 budget, as adopted in December 2008, reached €133.8 bn in commit-ments (1.03 % of GNI) and €116.1 bn in payments (0.89% of GNI).

INtERNAL pOLICIESFor the Commission, expenditure in

projects intended to save and create jobs, help companies and restore com-petitiveness will be the EU’s top priority (total of €62 bn). Increased funding com-pared with 2009 will therefore be pro-vided, in particular for trans-European transport and energy networks (+12.7%, totalling €1.08bn), the competitiveness

and innovation programme (+3.3%, totalling €0.5 bn), combating poverty and social exclusion (nearly €20 mil-lion) and the satellite navigation project Galileo (+8%, totalling €0.9 bn).

Of the €62bn set for jobs and competi-tiveness, €49 bn will go towards cohe-sion in the EU. For the first time ever, the EU12 will receive the biggest share of the EU’s Cohesion and Structural Funds (52%).

Support for agriculture in these regions will also grow, making a real impact with the EU12 now receiving nearly 20% - €11 bn - in agricultural sup-port. Funding for natural resources in the EU27 stands at €59 bn and, as part of this, spending for environment and rural development will grow by nearly 2.5%, to almost €15 bn.

A first injection of €2.6 bn was already allocated in 2009 for the European eco-nomic recovery plan, for which €5 bn from the EU budget was anticipated during its adoption, at the end of 2008,

for energy, broadband infrastructures and rural areas. A further €2.4 bn will be added to the 2010 budget, the source of the funds being decided later on in the 2010 budget procedure.

The part of the budget to receive the biggest boost in spending will be projects to fight crime, terrorism and manage migration flows, increasing by 13.5%, to almost €1 bn.

ExtERNAL pOLICIES The EU’s aid to developing countries

channelled through the Development Cooperation Instrument will increase by 1.7%, reaching €2.4 bn.

Pre-accession assistance (IPA) will increase by nearly 5%, to €1.6 bn.

Funding for the EU’s Common For-eign and Security Policy (CSFP) will rise by 16%, to €282 million.

The last part of the €1 bn Food Aid Facility will also be financed in the 2010 budget (€170 mn).

Lastly, administrative expenditure for all EU institutions will grow mod-erately by 2.1%, with the European Commission’s own expenditure increas-ing by less than 1% (0.9%) at €3.6 bn, underlined the Commission.

After having been adopted by the Ecofin Council, the EU budget will be decided on during the European Parliament’s plenary session, on 14-17 December. n

By eric van puyvelde

2010 eu BudgeT

priority given to anti-crisis measures

Measures to stimulate growth and employment

will increase by 3.2% compared with 2009, but all headings in the budget

will see a rise



eNergy

moldova to join energy community of se europe

Troubled former Soviet republic Mol-dova is completing negotiations for entry into the Energy Community. Top officials from the republic and from the European Commission, on 29 April, signed a one-page accession memorandum declaring that the negotiating process has been completed. This memorandum and annex containing a draft decision will now be presented for approval to the current parties to the Energy Community Treaty and to the EU member states. A formal decision on the country’s accession bid is expected before the end of the year, in June for the contracting par-ties of the Energy Community. Following the ratification process, Moldova would probably join in the course of 2010.

The Energy Community Treaty foresees the implementation of EU energy legisla-tion and entered into force on 1 July 2006. Moldova, since November 2006 an observer to the Energy Community, will commit to implementing most parts of the EU legis-

lation related to energy and environment within a defined timeframe. Negotiations have focused on in-depth revision of the country’s electricity and gas laws. The draft legislation is soon to be finalised and pre-sented to the parliament in Chisinau for adoption.

“Moldova voluntarily agrees to imple-ment the electricity Directive 2003/54 and the respective gas Directive 2003/55 already by end of December 2009. This will be an important challenge for the newly elected parliament,” said Slavtcho Neykov, direc-tor of the Energy Community Secretariat. Neykov admitted that the proposed dead-lines for implementation of EU legislation by Moldova are “indeed ambitious”. He, nonetheless, is encouraged by the political will of the country’s government.

UkRAINE NOt FINISHEDNegotiations with Ukraine, which started

at the same time as Moldova, are still con-tinuing. Georgia may apply for accession to the Energy Community, perhaps as soon as

May. The negotiation process fixes dead-lines for implementation of the relevant EU legislation covered by the treaty. Parties to the treaty, notably Albania, Bosnia and Herzegovina, Croatia, Macedonia, Mon-tenegro, Serbia and Kosovo, have a legal obligation to follow its requirements. Some 15 items of EU legislation are concerned, in the areas of electricity, gas, environment, renewable energy and security of supply.

Moldova was one of the countries most severely affected by the cut in gas supplies in January 2009. The EU’s Gas Coordina-tion Group noted that Moldova possessed zero gas reserves and little or no sources of alternative gas or energy supplies. This led, on 12 January, to the Commission activat-ing the Community Mechanism for Civil Protection, at Moldova’s request, with Austria, notably providing large capacity heaters and electrical generators. Joining the Energy Community will eventually allow Moldova to attune its energy mar-kets to EU norms and structures improving security of supply. n

copeNhageN climaTe TreaTy

No one matching eu’s emission reduction targets for 2020

The EU continues to stand alone in push-ing for an ambitious 20% cut in greenhouse gas emissions by 2020 over 1990 levels. No other industrialised nation is willing to match that figure yet, it emerged at the Major Economies Forum in Washington, on 27-28 April, where the new United Nations climate treaty - due to be agreed in Copenhagen, in December 2009 - domi-nated the talks. Nevertheless, the head of the European Commission delegation said he was “very encouraged” afterward, especially by the change in the US position, declaring “we’re back in business”.

Joao Vale de Almeda, chef de cabinet to Commission President José Manuel Bar-roso, told Europolitics he had not expected to see concrete figures floated at the forum as the negotiating would take place in the UN. But he admitted “sometimes we feel a bit lonely” that no one else has equalled the EU’s commitments. Probed on whether the EU would push China to cap its emissions,

de Almeda would only say “we cannot expect China to do as much as we are doing”.

EU, US RESpECt pOSItIONS US top negotiator, Climate Change

Envoy Todd Stern, confirmed the US target for 2020 would be less ambitious than the EU’s, between -15% and -20% on 2005 levels, which translates to returning to 1990 levels or going about 5% under. The gap with the EU, he said, was “big, medium or small” depending on the base-line year used, with 2005 favouring the US and 1990 favouring the EU. Stern thought it “highly unrealistic” the EU would lower its target to get an international agreement. Indeed, the Commission’s de Almeda con-firmed that the EU planned to raise the bar - from 20% to 30% - if developed countries make a comparable commitment. The US “respects our position,” he said. “We now must respect the capacity of the US to come to a stable, formal position” and “allow time for the debate to develop in the US”. Congress is currently drafting com-

prehensive climate change legislation.Attending the forum were senior officials

and ministers from 16 major economies responsible for 80% of global emissions plus Denmark, the EU and the UN. The event was kicked off with a speech from US Secretary of State Hillary Clinton, while President Barack Obama met each head of delegation at the White House later on 27 April. President Obama’s top Science Policy Advisor, John Holdren, as well as representa-tives of Mexico and South Africa were the keynote speakers at a session on the science of climate change, while US Energy Secre-tary Steven Chu, Australia and India spoke at an energy efficiency session.

Stern said they did not have time to discuss financing as everyone wanted to talk about mid-term targets. Nor did they talk about capping emissions for developing countries like China. “I came out a bit more optimistic than I went in,” he said, noting how countries departed from prepared remarks and “got into a genuine dialogue”. The next meeting of the forum will take place in Paris in May. n

By dafydd ab iago

By Brian Beary in Washington



1�

Between 2000 and 2008, EU exports of goods to Japan fell in value, from €45 billion to €42 billion, while EU imports from Japan decreased by nearly a fifth, from €92 bn to €75 bn.

As a result, the EU deficit in trade with Japan was reduced from €47 bn in 2000 to €32 bn in 2008.

This is revealed in data published by Eurostat on the occasion of the EU-Japan summit, to be held on 4 May in Prague.

The share of Japan in the EU’s total

external trade in goods has fallen signifi-cantly between 2000 and 2008. In 2008, Japan accounted for 3% of EU exports and 5% of EU imports, and was the EU’s sixth most important trading partner.

Among the member states, Germany (€12.8 bn or 30% of the total) was by far the largest exporter to Japan in 2008, fol-lowed by France (13%), the United King-dom (11%) and Italy (10%). Germany (€17.4 bn or 23%) was also the largest importer, followed by the Netherlands (15%), the United Kingdom (13%) and Belgium (11%).

A third of EU exports to Japan in 2008

were machinery and vehicles, a quarter were other manufactured articles and a fifth were chemicals, while machin-ery and vehicles accounted for nearly three quarters of imports and other manufactured articles for almost a fifth.

At the detailed level, the main EU exports to Japan were motor cars and parts, medicine and pork, while the main imports were motor cars and parts, printers and digital cameras. n

Detailed tables are available at www.europolitics.info > Search = 248950

A joint assembly of members of the European Parliament and MPs from six former Soviet republics, Euronest, will soon become a reality. The centre-right EPP-ED group that launched the idea confirmed, on 29 April in Warsaw, that the assembly would be put in place in September 2009.

Euronest is meant to “accompany at par-liamentary level” the Eastern Partnership decided at the December 2008 European Council as a means of developing closer relations with Armenia, Azerbaijan, Geor-gia, Moldova, Ukraine and “democratic

forces” in Belarus. Its functioning will be similar to that of the Euromed (Mediter-ranean rim countries) and Eurolat (Latin America) assemblies. The principle of Euronest, explained Jacek Saryusz-Wolski, chair of the EP’s Foreign Affairs Commit-tee, in an interview with Europolitics1, was approved in January 2009 by the EP’s Con-ference of Presidents. In Warsaw, where the EPP was holding a congress in the run-up to the European elections, some were furious over the Czech EU Presidency’s difficulties solemnising the official launch of the East-ern Partnership, on 7 May in Prague. The “Czech mess” makes a terrible impression,

pointed out EPP officials. Parliamentary Group Chairman Joseph Daul made a point of telling the press that “it is not by chance that the EPP selected Warsaw” to launch its election campaign and send out a message, namely “the great importance we attach to the reunification of Europe as we celebrate this week the fifth anniversary of the historic enlargement of the Union to the Central and Eastern European countries”. n

The working paper on the Eastern Partnership is available at www.europolitics.info > Search = 248991 (1) www.europolitics.info > Search = 239265

Initialled in 2006, the EU-Russia agree-ment on cooperation in fisheries and the conservation of marine resources in the Baltic Sea was finally made official, on 28 April in Brussels. It was signed by Fisheries Commissioner Joe Borg and representa-tives of the Russian Federation. The agree-ment entered into force on 29 April and will cover an initial period of six years.

Following the EU’s enlargement, in 2004, the International Baltic Sea Fisher-ies Commission shrank to only two mem-bers, the EU and Russia. A new framework

for cooperation in the region became necessary as a result.

The agreement aims to guarantee the conservation and sustainable exploita-tion and management of fish stocks in the Baltic Sea. Vessels from the EU and Russia will be mutually authorised to fish in the Baltic in the other party’s exclusive economic zone (EEZ). The agreement establishes joint manage-ment measures for straddling stocks on the basis of the scientific advice of the International Council for Exploration of the Sea (ICES), while allowing each to adopt autonomous management mea-

sures for non-straddling stocks in their waters. These may include TACs (total allowable catches) and reciprocal quota swaps. The agreement covers long-term management plans, restrictions on fishing effort and technical measures, such as vessel licensing, compliance with fisheries regulations, control and enforcement (including inspections by the other party in their respective EEZ) and scientific cooperation. A joint Baltic Sea fisheries committee will be estab-lished to achieve the objectives of the agreement and will meet at least once a year. n

By anne eckstein

By pierre lemoine

eurostat data

eu/russia

Fisheries cooperation agreement now official

easTerN parTNership

euronest launch set for september 2009

eu/JapaN

union’s external trade deficit shrinks



in Briefstate aid for Fiat authorisedThe European Commission authorised, on 29 April, regional state aid of €46 million for an investment project by automobile manufacturer Fiat in Sicily. The total investment project amounts to €319 million, intended to extend the existing Fiat plant in Termini Imerese in order to change the production process and to diversify its production. It will allow Fiat to produce a new passenger car under the Lancia brand, which is to replace the existing small Ypsilon. The investment is expected to maintain existing jobs in the region.

polish airport aid approvedThe European Commission approved, on 29 April, public funding of PLN650 million (€147.5 million) for the regional airport of Rzeszów Jasionka in Poland. The objective is to build a new terminal, an apron area and taxiways. The funding itself comes from the Subcarpathia (Podkarpackie) region, the European Regional Development Fund and the Cohesion Fund. The Commission has also accepted that public property - such as land, buildings and airport equipment - will be transferred to the new airport operator.

czech aid for ‘green’ public transport clearedThe European Commission gave the green light, on 29 April, to a Czech state aid scheme amounting to CZK75 million (approximately €2.8 million), aimed at promoting ‘green’ transport in the region of Severovýchod. The objective is to construct and upgrade - between 2009 and 2014 - refuelling stations (biodiesels, natural gas, electricity and hydrogen) for public transport operators.

inquiry into aid to hungarian fertiliser producer The European Commission opened, on 29 April, an in-depth inquiry into aid granted by the Hungarian authorities, but not notified to the Commission, in favour of Hungarian fertiliser producer Péti Nitrogénművek. This concerns guarantees on an investment loan of €52 million and debt amounting to HUF10 billion, both provided by the 100% state-owned Hungarian Development Bank. The Commission concluded that these measures could constitute state aid. Furthermore, it has serious concerns as regards their compatibility with the 2004 Community guidelines on state aid for rescuing and restructuring operations.

clearance for British fiscal schemeThe European Commission approved, on 29 April, three fiscal measures by the United Kingdom (Enterprise Investment Scheme-EIS, Venture Capital Trust-VCT and Corporate Venturing Scheme-CVS) that are part of measures adopted by the United Kingdom to make it easier for SMEs to have access to financing and to provide tax incentives to private and commercial investors in order to encourage them to invest in unlisted SMEs. Given that all the requirements of the Community’s guidelines on risk investment in SMEs have been met since the United Kingdom changed these measures, the Commission considers that the aid is compatible with the rules on state aid aimed at helping the development of certain economic activities.

commission extends probe into lufthansa-Brussels airlines dealThe European Commission delayed, until 1 July, its investigation into Luf-thansa’s planned purchase of Brussels Airlines. The German company submit-ted new proposals aiming to allay the Commission’s fears of a possible mo-nopoly on some routes between Belgium and Germany and between Belgium and Switzerland. To recall, Lufthansa plans to buy its Belgian competitor in two stages, firstly by taking a 45% stake in the hold-ing company and then having an option to buy the remaining 55% as of 2011.



1�

eu agendaThursday �0 aprileuropeaN parliameNTparliameNTary commiTTees commiTTee oN iNTerNaTioNal Trade 9:00 - 11:30, Brussels, ASP 5G3• State of Play of ongoing International Trade Negotiations - Discussion with Catherine Ashton, Commissioner for Trade

commiTTee oN Fisheries 9:00 - 12:30, Brussels, PHS 1A2• Presentation by Fokion Fotiadis, Director-General DG MARE, of the Communication from the Commission of 8 April 2009 on a strategy for the sustainable development of aquaculture and the Green Paper of 21 April 2009 on the reform of the CFP

commiTTee oN legal aFFairs 9:30 - 12:30, Brussels, PHS 7C050• Request for defence of the immunity of Aldo Patriciello (EPP-ED, IT) (IMM) - Vote on report by Aloyzas Sakalas (PES, LT)• Request for the defence of the immunity of Umberto Bossi (IMM) - Vote on report by Klaus-Heiner Lehne (EPP-ED, DE)• Presentation of a study by Karel Van Hulle, Internal Market and Services, European Commission: “Compensation of victims of cross-border road traffic accidents in the EU: Comparison of national practices, analysis of problems and evaluation of options for improving the position of cross-border victims”• Discussion with Wubbo de Boer, President of the Office for Harmonization in the Internal Market

commiTTee oN coNsTiTuTioNal aFFairs 9:00 - 12:30, Brussels, PHS 3C50• The Balance Sheet of the Legislature - Discussion with Margot Wallström, Vice President of the European Commission,

responsible for Constitutional Affairs• Democracy in Europe - Discussion with Professor Dimitris Tsatsos, former MEP

commiTTee oN WomeN’s righTs aNd geNder equaliTy 9:00 - 11:00, Bruxelles, ASP 3G2• The role of women in Turkey in social, economic and political life (See Public Hearings)

commiTTee oN peTiTioNs 15:00 - 18:30, Brussels, ASP 3G3

puBlic heariNgs WomeN iN Turkey9:00 - 11:00, Brussels, ASP 3G2The Women’s Rights committee is organising a public hearing on “The role of women in Turkey in social, economic and political life”. Among the participants: Nimet Cubukçu, State Minister of Women’s and Children’s Affairs, Yakin Ertürk, UN Special Rapporteur on Violence Women and Professor at the Middle East Technical University, Ankara, Yessim Arat, Professor of Political Science and International Relations, Bogaziçi University, Istanbul, Nebahat Akkoç, President of KA-MER and Emine Bozkurt (PES, NL), EP rapporteur on Women’s rights in Turkey. The meeting will be chaired by Anna Záborská (EPP-ED, SK).Contact: Nora Chaal: (32-2) 28 31151 (BXL), (32) 498.983.402, [email protected]

couNcil oF miNisTersmeeTiNg oF The poliTical aNd securiTy commiTTee (psc)Brussels

iNFormal meeTiNg oF TraNsporT miNisTers28-30 April, Litomerice - Czech Republic

icT Brokerage eVeNT 200929-30 April, Brno, Czech Republic

meeTiNg oF direcTors oF archiVes oF The miNisTries oF ForeigN aFFairs oF The eu aNd europeaN iNsTiTuTioNs29-30 April, Prague

meeTiNg oF The homeopaThic mediciNal producTs WorkiNg group29-30 April, Prague

meeTiNg oF NaTioNal drug coordiNaTors FolloWed By a coNFereNce oF NaTioNal experTs oN meThampheTamiNe29-30 April, Prague

gala eVeNiNg: europeaN iNVeNTor oF The year28-30 April, PragueOrganiser: European Commission and the European Patent Office Contact: Ing. Josef Dvornák, Industrial Property Office - [email protected]

europeaN paTeNT Forum28-30 April, PragueOrganiser: European Commission and the European Patent Office Contact: Ing. Josef Dvornák, Industrial Property Office - [email protected]

Forum oN social policy aNd migraTioN iN The europeaN uNioN27-30 April, PragueOrganiser: Caritas Czech Republic Contact: Ing. Mgr. Oldrich Haicman, Caritas Czech Republic - [email protected]

a. eupaN: humaN resources WorkiNg groupB. eupaN: coNFereNce oN social dialogue26-30 April, Prague

1� Thursday30April2009 N°3744EUROPOLITIcs


europeaN commissioNTraVel aNd VisiTsn Mrs Margot Wallström participates in exchange of views with the members of the EP Constitutional Affairs Committeen Ms Catherine Ashton addresses the Committee on International Trade (INTA) (EP)n Mr Andris Piebalgs takes part in the EU – Russia Permanent Partnership Council meeting (Moscow)n Mr Louis Michel participates in the European Union’s Political and Security Committee (PSC) (Brussels)n Mrs Mariann Fischer Boel receives representatives of the European Milk Boardn Mrs Mariann Fischer Boel receives Mr Robert Guicherd, President, and a delegation of CIUS (Committee of Industrial Users of Sugar) n Mrs Benita Ferrero-Waldner visits Qatar (30-01)n Mr Vladimír Špidla attends the vernissage of Czech art exhibition (BERL)n Ms Meglena Kuneva delivers a speech “Consumers in recession” at a conference hosted by the European Policy Centre (Brussels)n Mrs Androulla Vassiliou in the United States (30-01): has bilateral meetings with Congress people and Senators; meets US Trade Representative (USTR) Ambassador Ron Kirk; attends working dinner at the residence of the Head of EU’s Delegation in the USA, Mr John Bruton (30). Attends lunch conference with Chief Executive Officer of American Association for retired people (AARD), Mr Barry RAND; meets Mr Tom Vilsack, Secretary of the US Department of Agriculture (USDA)

courT oF JusTiceFirst Chamber9:30n Judgement C-494/06 P Commission v Italy and Wam. State aid. Appeal against the judgment of the Court of First Instance (Second Chamber) of 6 September 2006 Italian Republic and Wam v Commission (Joined Cases T-304/04 and T-316/04) whereby the Court annulled Commission Decision 2006/177/EC of 19 May 2004 on

State aid No C 4/2003 (ex NN 102/2002) implemented by Italy for Wam SpA (OJ 2006 L 63, p. 11). Advocate General: Sharpston.

n Opinion C-534/07 P Prym and Prym Consumer v Commission. Competition. APPEAL brought against the judgment of the Court of First Instance (Second Chamber) of 12 September 2007 in Case T-30/05 Prym and Prym Consumer v Commission, in which the Court fixed the amount of the fine imposed on the applicants by Article 2 of Commission Decision C(2004) 4221 final of 26 October 2004 relating to a procedure for the application of Article 81 EC (Case COMP/F-1/38.338-PO/Needles) at EUR 27 million - Agreement, decision or concerted practice in the market for haberdashery (needles). Advocate General: Mengozzi.

n Opinion C-103/08 Gottwald. Principles of Community law. Reference for a preliminary ruling - Unabhängiger Verwaltungssenat des Landes Vorarlberg (Austria) - Interpretation of Article 12 of the EC Treaty - Discrimination on grounds of nationality - National legislation under which a toll disc made available free of charge to disabled persons is granted only to persons resident or ordinarily resident in national territory. Advocate General: Mazák.

n Hearing C-247/08 Gaz de France - Berliner Investissement. Free movement of capital. Reference for a preliminary ruling - Finanzgericht Köln (Germany) - Interpretation of Articles 43 EC, 48 EC, 56(1) EC and 58(1)(a) and (3) EC, and Article 2(a) and paragraph (f) of the Annex to Council Directive 90/435/EEC of 23 July 1990 on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States (OJ 1990 L 225, p. 6) - Concept of ‘company of a Member State’ - Refusal, in the Member State of the subsidiary, to grant an exemption from withholding tax to a parent company taking the legal form of a ‘société par actions simplifiée’ in French law, since that form of company does not, at the material time, appear on the list in the annex to the directive.

Second Chamber9:30n Judgement C-75/08 Mellor. Environment

and consumers. Interpretation of Article 4 of Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment (OJ 1985 L 175, p. 40) - Obligation to make available to the public reasons for a decision not to subject a project falling within the classes listed in Annex II to the directive to an assessment. Advocate General: Kokott. n Judgement C-531/07 Fachverband der Buch- und Medienwirtschaft. Free movement of goods. Reference for a preliminary ruling - Oberster Gerichtshof (Austria) - Interpretation of Articles 3(1) EC, 10 EC, 28 EC, 30 EC, 81 EC and 151 EC - National legislation requiring importers of German language books to fix a retail sales price which cannot be lower than that fixed for the country of origin. Advocate General: Trstenjak.

n Opinion C-301/07 PAGO International. Intellectual property. Interpretation of Article 9(1)(c) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) - Rights of the proprietor of a trade mark having a reputation in the Community - Trade mark having a reputation only in one Member State - Protection of the trade mark in the whole of the Community or only in one Member State. Advocate General: Sharpston.

Fourth Chamber9:30n Judgement Joined Cases C-393/07, C-9/08 Italy v Parliament. Law governing the institutions. Application for annulment of Decision P6_TA-PROV(2007)0209 of the European Parliament of 24 May 2007 concerning the verification of Beniamino Donnici’s credentials [2007/2121/(REG)], notified on 28 May 2007 - Members of the European Parliament - Verification of credentials - Appointment of a Member due to the withdrawal of candidates. Advocate General: Poiares Maduro.

n Judgement C-497/06 P CAS Succhi di Frutta v Commission. External relations. Appeal against the judgment of the Court of First Instance (Second Chamber) delivered on 13 September 2006 in Case T-226/01 CAS Succhi di Frutta SpA v Commission, whereby the Court dismissed



17

an application for compensation for the damage allegedly caused by Commission Decisions C (96) 1916 of 22 July 1996 and C (96) 2208 of 6 September 1996, adopted in the context of Commission Regulation (EC) No 228/96 of 7 February 1996 on the supply of fruit juice and fruit jams intended for the people of Armenia and Azerbaijan (OJ 1996 L 30, p. 18). Advocate General : Trstenjak.

n Hearing C-101/08 Audiolux and Others. Approximation of laws. Reference for a preliminary ruling - Cour de cassation (Grand Duchy of Luxembourg) - Interpretation of (1) Articles 20 and 42 of the Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies ... in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ 1977 L 26, p. 1), (2) the Commission Recommendation of 25 July 1977 concerning a European code of conduct relating to transactions in transferable securities (OJ 1977 L 212 p. 37), (3) Council Directive 79/279/EEC of 5 March 1979 coordinating the conditions for the admission of securities to official stock exchange listing (OJ 1979 L 66, p. 21) and (4) Article 3(1)(a) of Directive 2004/25/EC of 21 April 2004 on takeover bids (OJ 2004 L 142, p. 12) - Is there, in Community law, a general principle of the equality of shareholders? - If so, what is the scope ratione materiae and ratione temporis of that principle?

Fifth Chamber9:30n Judgement C-27/08 BIOS Naturprodukte. Approximation of laws. Reference for a preliminary ruling - Bundesverwaltungsgericht (Germany) - Interpretation of Article 1(2) of Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use (OJ 2001 L 311, p. 67), as amended by Directive 2004/27/EC of the European Parliament and of the Council of 31 March 2004 amending Directive 2001/83/EC on the Community code relating to medicinal products for human use (OJ 2004 L 136, p. 34) - Definition of

medicinal product - Product containing a substance having a therapeutic effect in high doses, while capable of being harmful in lower doses, like the dose recommended by the manufacturer - Incense extract (Boswellia). Advocate General: Trstenjak.

Sixth Chamber9:30n Hearing C-481/07 P SELEX Sistemi Integrati v Commission. Competition. Appeal against the order of the Court of First Instance (Second Chamber) of 29 August 2007 in Case T-186/05 SELEX Sistemi Integrati SpA v Commission, by which the Court of First Instance dismissed as in part manifestly inadmissible and in part manifestly without foundation in law the claim for damages for the loss purportedly suffered by the appellant as a result of the Commission’s decision of 12 February 2004 rejecting the appellant’s complaint relating to an alleged infringement by Eurocontrol of the EC Treaty provisions on competition.

Eighth Chamber9:30n Judgement C-256/08 Commission v United Kingdom. Area of Freedom, Security and Justice. Failure of a Member State to fulfil obligations - Failure to adopt, within the prescribed period, the provisions necessary to comply with Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted (OJ 2004 L 304, p. 12). Advocate General: Bot.

n Judgement C-132/08 Lidl Magyarország. Free movement of capital. Reference for a preliminary ruling - Fovarosi Bíróság - Interpretation of Article 30 EC, of Article 8 of Directive 1999/5/EC of the European Parliament and of the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity (OJ 1999 L 91, p. 10) and of Articles 2(e) and (f), 6(1) and 8(2) of Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety (OJ 2002 L 11, p. 4) - National legislation requiring importers of radio equipment

using frequency bands whose use is not harmonised throughout the Community and bearing the CE mark to issue a declaration of conformity in accordance with the provisions of national law, even if the equipment at issue is accompanied by a declaration of conformity issued by the producer established ion another Member State. Advocate General: Sharpston.

courT oF FirsT iNsTaNceFifth Chamber15:00n Hearing T-386/07 Peek & Cloppenburg v OHMI - Redfil (Agile). Intellectual property. Community trade mark - Action for annulment by the proprietor of the Community and national word marks ‘Aygill’s’, for goods in Classes 3, 6, 8, 9, 11, 14, 16, 18, 20, 21, 24, 25, 26, 27 and 28, of Decision R 1324/2006 2, of 26 July 2007 of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (OHIM), annulling the Opposition Division’s decision refusing, in opposition proceedings brought by the applicant, registration of the figurative trade mark ‘Agile’ for goods in Classes 18, 25 and 28.

Seventh Chamber9:30n Hearing T-341/07 Sison v Council. Common foreign and security policy. First, an application for annulment in part of Council Decision of 28 June 2007 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Decisions 2006/379/EC and 2006/1008/EC (OJ 2007 L 169, p. 58) and, second, an application for damages to obtain compensation for the damage allegedly suffered by the applicant as a result of the adoption of the contested decision.

Eighth Chamber9:30n Judgement T-281/06 Spain v Commission. Agriculture. Partial annulment of Commission Decision 2006/554/EC of 27 July 2006 excluding from Community financing certain expenditure incurred



by the Member States under under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) (notified under document number C(2006) 3331) in so far as it excludes certain expenditure incurred by Spain.

n Judgement T-12/03 Itochu v Commission. Competition. The text is not available in Englishn Judgment T-13/03 Nintendo and Nintendo of Europe v Commission. Competition. Cancellation or, in the alternative, reduction of the fine imposed on the applicants by Article 3 of the Commission’s decision of 30 October 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega - Nintendo doc. C(2002) 4072) concerning a complex of agreements and concerted practices on the market for Nintendo consoles and cartridges for video games compatible with the Nintendo console designed to limit parallel exports of those consoles and cartridges.

n Judgement T-18/03 CD-Contact Data v Commission. Competition. Annulment of the Commission’s decision of 30 October 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega - Nintendo Omega - Nintendo doc. C(2002) 4072) concerning a complex of agreements and concerted practices on the market for Nintendo consoles and cartridges for video games compatible with the Nintendo console designed to limit parallel exports of those consoles and cartridges

n Hearing Joined Cases T-5/08, T-6/08, T-7/08 Nestlé v OHMI - Master Beverage Industries (Golden Eagle). Intellectual property. Community trade mark - Action for annulment brought by the proprietor of the international verbal mark ‘Red Cup’ and the national verbal mark ‘Gold Blend’, and of Community, international and national figurative marks representing a

cup for, inter alia, coffee, against Decision R 563/2006-2 of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (OHIM) of 1 October 2007 dismissing the appeal brought against the decision of the Opposition Division rejecting the opposition lodged by the applicant against registration of the figurative mark ‘Golden Eagle’ for goods in class 30

ecoNomic aNd social commiTTeeBrussels, at the EESC n Participation of Mr Sarró at a Conference on fisheries agreements with third countries, organised by the LDRAC (NAT)

coNFereNces aNd semiNars30 April, Brusselsn RUR@CT, European Regions for Rural Innovation: proposals for the territorial cohesionSubject: Gathering 50 European Regions from 15 Member States whose aim is the operational transfer of good practices for the rural innovation, RUR@CT will present its strategic proposals for the territorial cohesion, and its tools for the transfer of good practices.Organiser: RUR@CTFurther Information: www.ruract.euVenue: Representation of the Free State of Bavaria, Rue Wiertz 77, Brussels, 11:00-12:30

30 April, Brusselsn RUR@CT ‘sharing to make progress together’Subject: ‘Partnership forum’ for the launching of the first transfers of good practices and the presentation of RUR@CT toolsOrganisers: RUR@CTFurther Information: www.ruract.euVenue: Antenne interrégionale Auvergne Centre Limousin, Rue de la loi 67, Brussels, 14:00-18:00.

upcoming conferences18-22 May, Brucharestn Central & SouthEast European Financial Forum - 6th editionSubject: Top businessmen, bankers, ministers, governors of the Central Banks from the region, meet at the Forum to ind realistic solutions for the economic crisisOrganisers: Forum InvestContact: [email protected] - Tel: +4 021 311 56 11Venue: Radisson SAS Hotel, Palace of the Parliamentwww.foruminvest.ro

19 May, Brusselsn Smart Grids - From Policy to ImplementationSubject: The Conference will: provide an overview of drivers for smart grids, network development; focus on such specific topics as investments, new services expected for DSOs, active grid management, smart metering and regulation; point the way forwardOrganisers: EURELECTRICContact: Emily O’Leary: Tel: +32 2 515 10 62, [email protected]: Radission SAS Royal Hotelwww.eurelectric.org/ 23 June, Brusselsn Climate change: keys to a concerted policy shift European Policy SummitSubject: Session I: Can a green business revolution bring us out of recession?Session II: What can be asked of emerging economies?Session III: The EU, U.S. and China: Shared or competing interests?Organisers: Friends of EuropeContact: +32 (0)2 737 9150 or [email protected]: Charlemagne Building, European Commission, Brusselswww.friendsofeurope.org



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Five years after the EU’s historic May 2004 ‘big bang’ enlargement, which brought ten new member states into the Union, and over two years after the January 2007 accession of Bulgaria and Romania, there is little enthu-siasm in most European capitals for letting new countries join any time soon. Croatia is the one exception. A fairly broad consen-sus exists that this country of 4.5 million should be admitted to the EU in the near future, most probably in 2011 - although a more realistic date would be 2012, in light of Zagreb’s still unresolved border dispute with neighbouring Slovenia. The spat between the two countries started in 1991, when they declared independence from Yugosla-via. It has seriously hampered Croatia’s EU bid, leaving a question mark over the coun-try’s ambitious plan to wrap up accession negotiations by the end of 2009.

As for the other Balkan countries, the prospects of EU accession are more remote. According to experts, the current member states’ fierce opposition to the Union’s fur-ther enlargement means that the countries of the Western Balkans may have to wait at least three or even five years before acces-sion. They estimate that overall it could take more than ten years for the six countries of the region - Albania, Bosnia, Kosovo, Mace-donia, Montenegro and Serbia - to become fully-fledged EU members.

Probably the most complex case is that of Turkey, which alongside Croatia has been in accession negotiations with the Union since October 2005. Ankara’s membership bid is currently in a form of ‘suspended animation’, with roughly one third of the negotiating chapters being frozen over the long-standing ‘Cyprus issue’ or blocked by member states for various political reasons. Meanwhile, the leaders of the two most pow-erful member states - France and Germany - remain publicly opposed to Turkey joining the Union, advocating instead a ‘privileged partnership’. Experts say that Turkey’s entry into the EU is far from certain. If at all, it will take far more than ten years.

Also in the queue are Iceland and the

northern part of Cyprus, which is a case in its own right. Both could join the EU before Croatia, if the stars allow. For the Turkish Republic of Northern Cyprus, which is recognised internationally only by Turkey, reunification with the Greek Cypriot side is the key to full EU membership. Although Cyprus as a whole was admitted to the EU in May 2004, the acquis communautaire remains ‘suspended’ in the north of the island.

Iceland needs to build a national consen-

sus on its EU membership bid. Once that’s achieved, this island nation could join the Union in a few years.

All in all, the EU’s enlargement is now an issue simmering on the back burner. It does not appear to have sufficient sup-port among either the leaders or the broad public.

The articles that follow examine the main causes of this growing ‘enlargement fatigue’ and include projections regarding the EU’s future expansion. n

By Joanna sopinska

prospects gloomy for future expansion

Five years after: Whither enlargement?

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The EU’s enlargement policy has arrived at a crossroads following the failure to achieve full ratification of the Lisbon Treaty and after the eruption of what is seen by experts as the worst

financial crisis in EU history. These two problems have triggered calls in certain member states for the Union’s expansion to be put on hold. Experts argue, how-ever, that the current strong opposition towards enlargement has its roots else-where, namely in the bad legacy of the last expansion rounds of 2004 and 2007. The EU’s continuing difficulties with its new member states, Bulgaria and Roma-nia in particular, are having a knock-on effect on its enlargement policy. Germany – once a strong supporter of expansion backed by France and the majority of the other old member states – says that the EU has not yet digested its last enlargement and therefore is not ready for the next one. Berlin argues that first a phase of internal consolidation is needed, meaning ratification of the Lisbon Treaty, before any new country, except for Croatia, can join the club.

“The enlargement of the EU from 15

to 27 members within a few years […] has required great efforts. As a result, the CDU prefers a phase of consolida-tion, during which a consolidation of the European Union’s values and insti-tutions should take priority over further EU enlargement,” German Chancellor

Angela Merkel’s CDU party said in its manifesto for the June European Parlia-ment elections. “The only exception to the rule can be for Croatia,” the docu-ment added.

UNDIGEStED SHOCk“Enlargement fatigue comes from

the 2004-2007 enlargement rather than anything else,” Piotr Maciej Kaczynski, fellow researcher at the Centre for Euro-pean Policy Studies (CEPS), said in an interview with Europolitics. “The cur-rent economic downturn and the delay in the ratification of the Lisbon Treaty only create further negative sentiments towards future enlargement,” he added. “The reason for this is that the 2004 and 2007 enlargements were a shock to the system. Not so much to the institutions, which have accommodated quite well to the change, but rather to the deci-sion makers in the old member states,”

Kaczynski explained. “The old member states realised that their own inter-ests have been threatened by the fifth enlargement round,” which has brought twelve new policy makers with differ-ent agendas to the EU table, Vessela Tcherneva, head of the Sofia office and

policy fellow of the Euro-pean Council on For-eign Relations (ECFR) argued in an interview with Europolitics. The old member states were also confronted with pressure from the newcomers to shift their policies towards a not always desired more liberal approach, with the Services Directive at the forefront. “Now we have many more liberal governments, which are pushing their agenda in the Council. We did not have that some ten years ago,” Kaczynski said. “On the foreign policy front, we have now a com-pletely different sensitiv-ity towards Russia and Eastern Europe brought by the new member states

than in the past,” he added. The scale of political challenges is so immense that although it has been five years since the ‘big bang’ enlargement, the EU seems to still struggle to fully digest it.

UNDONE HOMEwORkExperts also point to another aspect

– the undone homework. The new member states did not deliver on their promises and commitments after being admitted to the EU, exacerbating fears of further enlargement, according to Kaczynski and Tcherneva. “Bulgaria and Romania go beyond the digesting problem the EU is having with the 2004 enlargement round. Especially Bul-garia,” said Kaczynski. “The accession of Bulgaria is perceived as an example of a mistaken enlargement policy,” he added.

In practical terms, the poor perfor-mance of the 2004-2007 newcomers has

By Joanna sopinska

previous waves leave questionable legacy

the EU wants Croatia to modernise its shipbuilding sector

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Those opposed to a pause in enlarge-ment warn that it could slow down reforms or even lead to serious political and social instability in the Western Bal-kans. “Instability is still hanging in the air there. The EU tends to forget it because the Serbs, the Croats and others haven’t been shooting at each other for a couple of years now,” Vessela Tcherneva, head of the Sofia office and policy fellow of the European Council on Foreign Relations (ECFR) argued in an interview with Europolitics. She warned that “putting enlargement off the EU agenda would be a bad choice” as most of the Western Balkan countries “have no future without the EU or outside the club”. “They are weak states with fragile political structures and not functional economies. They are not ethnically homogenous. The main factor which prevents them from falling apart and keeps them alive is the Euro-pean perspective,” Tcherneva argued.

The majority of the member states, however, turn a deaf ear to these argu-ments, giving priority instead to their own problems caused by the global financial crisis. Faced with an unprece-dented economic slowdown, with falling industrial output and rising unemploy-ment, they are a lot less generous and ready for new sacrifices than they were some five years ago, when the economic situation was relatively good. Exacer-bated by the financial crisis, old fears of a massive influx of migrants from the new member states as well as delocali-sation and transfer of jobs to countries with cheaper labour cost play an impor-tant role here. Already following the 2004 enlargement wave, many people in the older EU member states believed that the ‘big bang’ expansion will trig-ger an exodus of jobs from the West to the lower-paid East. According to a 2006 Eurobarometer poll, three-quarters of EU citizens thought that enlargement speeded up the transfer of jobs to coun-

tries with cheaper labour. Yet, according to the European Restructuring Monitor, an official survey, only 8% of EU jobs lost to restructuring between 2003 and 2006 involved offshoring.

OLD FEARSNow, the same anxiety is felt among

member states with regard to the poten-tial expansion of the EU towards the Western Balkans. The low level of living standards with extremely low GDP and sky-high unemployment rates in most of the countries in the region is additionally aggravating the fears. With the exception of Croatia (55), all the Western Balkan countries aspiring for EU membership are below 50% of the EU27’s GDP per capita level, at PPP in 2007: Alba-nia (22), Bosnia and Herzegovina (26), Macedonia (26), Montenegro (25) and Serbia (including Kosovo - 35). In addi-tion, the countries in question are all now facing the biggest economic crisis since the fall of Yugoslavia in 1991 due

By Joanna sopinska

Western Balkans: risk of instability

prompted the EU to adopt a tougher negotiating stance towards the aspiring countries. Unlike in the case of Poland, the EU is pushing Croatia to modernise its shipbuilding sector before accession.

To avoid making the same mistake as in the case of Bulgaria, the EU is strongly insisting on Zagreb to reform its judicial and police systems as well as to enhance the fight against organised crime and corruption before entering the EU. Badly affected by the ‘Cyprus issue,’ which had not been resolved before the 2004 enlargement, the EU is reluctant to let Croatia and Macedo-nia move to the next stage of integration before solving their bilateral rows with neighbouring countries, Slovenia and Greece, respectively.

pOSItIVE BALANCE SHEEtMeanwhile, the enlargements of 2004

and 2007 qualify in economic terms as a ‘major success’ and a ‘win-win situation’ for both the new and the old member states and the EU as a whole, according

to the European Commission’s enlarge-ment anniversary report, issued on 20 February. The report gives a very posi-tive overall assessment of the last two waves of enlargement. According to the document, the 2004-2007 expan-sion “greatly boosted the economies and improved living standards in the new member states”. Income per capita in the twelve countries rose, according to the report, from 40% of the fifteen old member states’ average in 1999 to 52% in 2008. It is also estimated that enlarge-ment boosted economic growth in the new member states by about 1.75 per-centage points per year over 2000-2008. Economic progress achieved by the new member states, accompanied by reforms in the rule of law and justice areas, brought in turn benefits to the old mem-bers through new export and investment opportunities. The fifteen old member states currently sell 7.5% of their exports to the new member states, up from 4.75% a decade ago. The document points to the fact that new investment

opportunities created by the last two waves of enlargement helped enterprises in the old member states to strengthen their global competitiveness and safe-guard jobs at home. It emphasises that, contrary to some somber predictions, incoming workers from the new member states “have helped meet labour market demands and reduce bottlenecks” in the old member states, “without creat-ing major labour market disturbances”. Since 2004, until the current financial crisis truly broke out, there was a robust 1.5% annual growth in employment in the new member states – which went alongside continuous job creation in old member states, about 1% per year.

However, the economic achieve-ments of the 2004-2007 enlargements go largely unnoticed in the old member states. Even though German exporters have flourished by selling to the new member states, 63% of Germans, accord-ing to an Eurobarometer survey, think that enlargement is making Europe as a whole less prosperous. n



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to the recession in their export markets, including the EU (the EU is the region’s largest export market) and falling sources of finance. The Zagreb Economic Insti-tute forecasts a 1.4% GDP decline for 2009 in Croatia, with recovery and growth of 2.3% likely in 2010. According to the Skopje Council on Foreign Eco-nomic Relations’ report issued in March 2009, unemployment in Macedonia stands at 33% and in Bosnia and Kosovo at 40%. The same document argues that unemploy-ment region-wide will further increase due to the continuing fall in trade and declining foreign investment.

kEEp DOORS OpENExperts warn that such a bad eco-

nomic situation in the Western Balkan countries, accompanied by a slowdown in European integration, could bring serious social and political instability to the region. “The region can become a very difficult place” if EU enlargement is put on hold, Tcherneva argued.

“Isolation, economic difficulties, including decline of remittances and investment - all these circumstances, accompanied by the lack of EU per-spective, could lead to a return of strong populist, nationalist regimes and bring as a result long-term instability to the region, which was in fact very close to normalisation,” she said. “We are start-ing to feel this new atmosphere in the Balkans with the Greek-Macedonian name dispute, with Slovenian-Croatian border row and with the fact that Serbia still talks about Kosovo as if it was part of its territory,” Tcherneva added, conclud-ing that for its own good, as much as for the Balkans, the EU must therefore keep its doors open.

According to the annual Failed States

Index (2008) of the Foreign Policy (FP) and The Fund for Peace, only two out of six countries (Kosovo is not included in the index) aspiring for EU membership, namely Croatia and Montenegro, are

with a score below 60 points in a group of a fairly stable countries. The other four countries were assessed as being much less stable, with Bosnia seen as a country “in danger”.’

The ranking of the states is based on the total scores of 12 indicators, such as extensive corruption and criminal behaviour, inability to collect taxes or otherwise draw on citizen support, large-

scale involuntary dislocation of the population, or sharp economic decline.

For each indica-tor, the ratings are placed on a scale of zero to ten, with zero being the lowest inten-sity (most stable) and ten being the highest intensity (least stable).

The total score is the sum of the 12 indicators and is on a scale of 0–120. Countries that have scores lower than 30 are categorised as ‘most stable’,

while countries that score over 90 are considered as ‘critical’. The scores between these two extremes indicate that a state is ‘in danger’, ‘borderline’ or ‘stable’. n

Social indicators Economic indicators political indicators Violation of human rights

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177 Norway 2.0 1.6 1.0 1.1 2.0 1.8 1.0 1.3 1.5 1.0 1.0 1.5 16.8

156 Slovenia 4.0 1.7 3.4 3.5 5.2 3.0 3.2 3.5 3.5 3.0 1.1 2.0 37.1

135 Montenegro 5.4 4.1 6.1 2.5 4.3 4.0 4.3 3.6 5.6 4.6 6.0 5.3 55.8

131 Bulgaria 5.1 4.1 4.0 5.7 6.0 4.3 5.4 4.6 4.7 5.2 3.9 5.5 58.5

129 Croatia 5.1 6.3 5.7 5.0 5.5 5.3 4.4 4.1 4.5 3.9 3.9 5.7 59.4

128 Romania 5.3 3.5 5.2 5.2 6.1 5.2 5.9 5.2 4.8 3.4 4.7 5.4 59.9

112 Albania 6.2 2.7 5.4 7.5 6.1 6.3 7.2 5.9 5.4 5.5 5.7 5.8 69.7

95 FYROM 5.4 4.6 7.4 7.0 7.4 6.0 7.6 5.1 5.3 5.8 6.6 6.4 74.6

70 Serbia 6.0 7.3 7.9 5.5 7.5 6.5 7.4 5.0 6.1 6.3 8.0 6.6 80.1

54 Bosnia 6.1 8.0 8.5 6.0 7.2 5.5 7.9 5.4 5.3 7.3 8.6 8.5 84.3

the situation is stable but tense in Mitrovica, kosovo

© N

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CROAtIACroatia is the clear

front-runner in the EU’s current enlarge-ment process. Zagreb

opened its membership talks in October 2005 and is likely to be able to conclude them by the end of 2009. However, for that to happen, the country must still address a number of outstanding issues. Some of these fall within the realm of competi-tion policy (restructuring of shipyards), while others belong to the justice and home affairs area, such as the country’s cooperation with the International Crimi-nal Tribunal for the former Yugoslavia (ICTY). Croatia’s 18-year-old border dis-pute with Slovenia also requires immedi-ate resolution. Failure by Zagreb to settle these outstanding issues would jeopardise the country’s ambitious end-2009 EU accession target.

Restructuring of shipyards: According to a source from the European Commis-sion, “some progress has been made over the last months in the field of competi-tion, including the restructuring of ship-yards”. In order to open talk in this area, Zagreb has to “adopt individual restructur-ing plans for each shipyard in difficulty”. Each such plan “must then be adopted by the Commission”. “We are now approach-ing the final stage of the discussions” on the restructuring process, says an internal EU document on the current state of play obtained by Europolitics. It says that agree-ment has been reached on all but two of the “cornerstones,” namely the dates associated with this restructuring process, the own contributions and the compen-satory measures. Agreement has yet to be reached on the “change of activity as capacity reduction requested by Croatia and the Croatian insistence on following a different privatisation model for the yard of Uljanik that EU Competition Com-missioner Neelie Kroes does not accept”. “The Commission is currently waiting for the Croatian authorities to confirm if it is possible for them to follow the same priva-tisation model for Uljanik as for the other yards,” the document says.

Croatia has a total of six shipyards, five

of which have been loss-making for years despite receiving large amounts of state subsidies, totalling HRK400 million a year. Only one shipyard, Uljanik, which is located in the northern Adriatic town of Pula, has been profitable. In spite of that, the government in Zagreb has been post-poning the introduction of restructuring measures, such as immediate privatisation, mostly out of fear of social unrest, as the shipyards employ some 15,000 people.

In order to keep accession negotiations on track, Croatia had to eventually move forward with privatisation. To this end, the government has decided to sell each ship-yard, except for Uljanik, for a token of one kuna (US$0.188). But it said that buyers will be required to assume a certain part of the restructuring costs, covering gov-ernment subsidies, investments in envi-ronmental protection and modernisation of technology, as well as the possible costs of providing for redundant labour, and the costs of cutting down production capac-

ity. The Commission insists that 50% of the restructuring costs should be covered by the company itself and its strategic partner.

Previous plans, which were turned down by EU officials last year, envisaged restruc-turing through modernisation before the sale.

ICTY cooperation: Last year’s mafia-style killings of 26-year-old Ivana Hodak, the daughter of a well-known Croat lawyer, as well as Ivo Pukanic and Niko Franjic, prominent members of Croatia’s media community, have cast doubts on the quality of reforms in the justice and home affairs area. The Commission and the member states have both been espe-cially sensitive about this field due to their experiences with Bulgaria, which after its accession in 2007 was hit by a wave of mafia-style killings. Sofia’s inability to stop the contract killings has elicited strong criticism from the EU and made it more vigilant towards the newcomers, includ-

By Joanna sopinska

The chaptersTodate,Zagrebhasopened22outof33chapters subject to accession negotia-tions.Sevenchaptershavealreadybeenprovisionallyclosed.Twelveotherchap-ters areundernegotiation in theCoun-cil.Ninechaptersarestill tobeopened(justice, freedomandsecurity; taxation;capital; environment; regional policy;CFSP; food safety; fisheries and agri-culture),while threearebeingpreparedfor closing (trans-European networks,customs and company law). However,elevenchaptersawaitingeitheropeningorclosingarebeingblockedbySloveniaover the two countries’ border dispute.TheCommission’sroadmaponthecon-clusion of accession talks with Croatiaforesees the closure of nine additionalchapterstothethreealreadyunderdis-cussionintheCouncilduringtheCzechEU Presidency’s term of office (by theendofJune).AccordingtoanEUinter-nal document seen by Europolitics, atleasttwoofthesechapterswilllikelynotbeclosed.Due to thedelay in reforms,Croatiawill not be able toprovisionally

conclude negotiations on transport andservices,thedocumentsays.An application for membership is sub-mitted by an applicant country to thePresidencyoftheEU,whichinduetimeforwards it to the Council. The CouncilthenaskstheCommissionforarecom-mendation. In order to prepare sucha recommendation, the Commissionsendsaquestionnaire,includingnumer-ous, mostly technical, questions to theapplicant country. After receiving theanswers,itassessestheapplicant’spre-paredness for being granted candidatestatus. The opinion of the Commissionanalysesthecountry’sapplicationonthebasisofitscapacitytomeetthecriteriasetbytheCopenhagenEuropeanCoun-cilof1993andtheconditionssetforthestabilisationandassociationprocessfortheWesternBalkans.AfterreceivingtheCommission’s opinion, the Council, byconsensus, decides on the application.In the case of Macedonia, which wasgranted candidate status in December2005,thewholeprocesstookoneandahalfyears.

The state of play



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ing Croatia. “We do not want to repeat the same mistake,” say EU officials, comment-ing on the need for thorough reforms in Croatia.

In order to address the EU’s concerns, the government in Zagreb has stepped up the implementation of relevant judicial and police reforms in order to strengthen its fight against organised crime and cor-ruption. The acceleration of work resulted in a positive benchmark report for the chapter on justice and fundamental rights that was put on the Council’s agenda in December 2008. However, the opening of talks in this area has been put on hold due

to Croatia’s lack of full cooperation with the ICTY on the case of Croat General Ante Gotovina – who is being tried for war crimes committed against Serbs during Zagreb’s 1995 offensive to recapture lands previously taken by rebel Serbs. According to an EU document obtained by Europoli-tics, the Netherlands, the UK, Belgium, Finland and Denmark are determined to maintain their reserves on the chapter until after Zagreb proves that it fully coop-erates with the Hague tribunal. Based on his ongoing consultations with the Croa-tian government, the ICTY’s Chief Pros-ecutor, Serge Brammertz, is due to issue

a report this summer assessing Zagreb’s progress in cooperation on the Gotovina case.

Border dispute with Slovenia: Along-side the above issues of concern, Zagreb has to immediately settle its border dispute with Slovenia in order for it to be able to wrap up its EU accession talks by the end of this year. In 2008, Ljubljana resorted to an unprecedented move and vetoed progress in Croatia’s accession talks (11 chapters have been blocked from either opening or closing). The row centres on a stretch of coastline in the Piran Bay, and the two sides have been unable to hammer



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out any sort of a compromise. Faced with this impasse, the Commission has offered to mediate. However, the prospects for a lasting solution appear remote, given the profound differences between the two sides.

FORMER YUGOSLAV REpUBLIC OF MACEDONIA

Alongside Croatia and Turkey, Macedo-nia is the third country to have achieved offi-

cial candidate status. However, the start of its formal membership negotiations is being informally held up by neighbouring Greece, due to the two countries’ long-running dispute over Macedonia’s name. Athens insists that the name Macedonia, which Skopje wants to adopt to replace the temporary international name of former Yugoslav Republic of Macedonia, belongs uniquely to its own northern province. Skopje rejects this view. In their quest for a compromise, the two countries have been conducting negotiations under the auspices of the United Nations. However, no breakthrough has been achieved up to now. The sides have until the autumn to reach a deal. In early November, the European Commission is scheduled to present its annual report on Macedonia’s EU reform progress, including a recom-mendation on opening accession talks. The document is expected to assess whether Macedonia has “good relations” with all its neighbours, including Greece, and evaluate whether the country has duly met the eight benchmarks established last year for opening negotiations.

In January 2008, the Commission pre-sented a set of conditions, which the coun-try has to meet before accession talks could start. The benchmarks cover such areas as political dialogue, implementation of police laws, fight against corruption, judi-ciary and public administration reform and measures to boost employment and business. Following the June 2008 parlia-mentary elections, which were seriously disrupted by violent incidents, the Com-mission added to the list of eight conditions a request for appropriate measures to be taken by Skopje to investigate all electoral irregularities and prevent their occurrence in the future. The recent presidential and municipal elections held in April were regarded by the Commission as a litmus

test for Macedonia’s ability to align with this particular benchmark. The comments issued by the EU executive after the vote were fairly positive, praising the country for the “overall satisfactory conduct” of the elec-tions. The Commission made it clear, how-ever, that in order to get fully ready to open accession talks, Macedonia still needs to “deliver results on judicial reform, the fight against corruption and reform of the civil service”.

MONtENEGROMontenegro – an

integral part of Serbia until June 2006

– hopes to be the next Western Balkan country after Croatia and Macedonia to obtain EU candidate status. Its official application for EU membership, submit-ted to the Council in December 2008, has recently been transferred to the European Commission, with a request for an opin-ion on Montenegro’s readiness to obtain candidate status. A decision to this end came after Germany and the Netherlands, under pressure from majority of member states, lifted their veto. Unlike Finland, Estonia, Greece, Slovakia, Romania, Cyprus, Spain, Luxembourg, the UK and Austria, which spoke in favour of moving to the next stage, Berlin and the Hague insisted on Montenegro’s application pro-cess to be put on hold. They argued that a request for an opinion is a political rather a purely technical step, especially in the context of the upcoming European Par-liament elections, in June. Meanwhile, other member states and the Commission were of the opinion that a political debate on Montenegro’s membership applica-tion should start after rather than before a formal opinion on the matter is issued. On average, the Commission needs 12 to 18 months to prepare such a document.

ALBANIATo avoid being

left behind, Albania decided to submit its application for EU

membership at the end of April. How-ever, the request has received rather a cold welcome, as it was put forward against the Commission’s recommenda-tion. Enlargement Commissioner Olli Rehn has publicly suggested that Tirana “should not rush” and should submit its

application only after the general elec-tions in June. Hoping for an increase in popularity ahead of the vote, the govern-ment in Tirana decided otherwise. Given these circumstances, it is rather unlikely that Albania’s application process will be moved forward before the June elections. The EU on many occasions has said that holding a fair and transparent vote is a cru-cial condition for a positive assessment of Tirana’s application at this stage.

Furthermore, the request would need to be endorsed by all member states, includ-ing Germany and the Netherlands – main opponents of further EU enlargement. Although the decision to proceed with the application does not formally require unanimity among the member states, the Czech Presidency and then Sweden, which is taking over the EU helm as of 1 July, are expected to seek consensus on the issue in the Council following the prec-edent set in the case of Montenegro (see above). Hence Tirana may need to wait for a green light from the member states even longer than Podgorica. Should the elections not be conducted according to

procedural rulesAn application for membership issubmitted by an applicant countrytothePresidencyoftheEU,whichindue time forwards it to theCouncil.The Council then asks the Commis-sionforarecommendation.Inorderto prepare such a recommendation,the Commission sends a question-naire, including numerous, mostlytechnical,questions to theapplicantcountry.Afterreceivingtheanswers,itassessestheapplicant’sprepared-ness for being granted candidatestatus. The opinion of the Commis-sion analyses the country’s applica-tion on the basis of its capacity tomeet the criteria set by the Copen-hagen European Council of 1993andtheconditionsset for thestabi-lisation and association process forthe Western Balkans. After receiv-ing the Commission’s opinion, theCouncil, by consensus, decides ontheapplication.InthecaseofMace-donia,whichwasgranted candidatestatus inDecember2005,thewholeprocesstookoneandahalfyears.



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international standards, the process could get blocked for a long time.

SERBIAUnlike Montenegro

and Albania (ratifica-tion process of the SAA with Montene-

gro is pending, SAA with Albania entered into force on 1 April 2009), Serbia has not achieved much progress over the recent months in its stabilisation and associa-tion process, which serves as the gateway to EU membership negotiations. Due to Belgrade’s failure to fully cooperate with the ICTY, the launch of the ratification process in the EU of the stabilisation and association agreement (SAA), signed in April 2008, has been put on hold indefi-nitely. Although the Serbian govern-ment started to unilaterally implement the accord as of 1 February 2009, the country has been de facto blocked from moving forward on its integration path. Without the SAA being unfrozen by the EU, there is no point for Serbia to put forward its request for candidate status. If submitted, the application would hardly stand a chance of being endorsed by the member states. According to the EU rules of procedure, a track record of successful implementation of the SAA is required for any Western Balkan country to move to the next stage in the integration process. Belgrade is therefore intensively trying to improve its cooperation with the ICTY, including stepping up efforts to arrest the remaining fugitives at large, Ratko Mladic and Goran Hadzic. Their arrest and trans-fer to The Hague is a sine qua non con-dition set by the Netherlands for its veto on the implementation of the SAA to be lifted. The issue has been under consulta-tion between Serbia and the ICTY’s Chief Prosecutor, Serge Brammertz, who is due to present his report to the UN Security Council in June. The document, assess-ing Belgrade’s progress in cooperation with the tribunal, is expected to be taken into account by the EU while deciding whether to start implementing the interim trade agreement with Serbia and possibly also to unfroze the SAA ratification process (the interim agreement – the trade part of the SAA - is being implemented until the SAA enters into force).

Meanwhile, Belgrade says it intends to apply for EU membership immediately

after the SAA is unblocked, possibly in the second half of 2009.

kOSOVOPristina has not

made much progress towards EU member-ship since it declared

independence from Serbia, on 17 Feb-ruary 2008. Although almost a year ago the European Council recalled the EU’s ‘willingness to assist the economic and political development of Kosovo through a clear European perspective, in line with the European perspective of the region, the new-born country remains de facto blocked from moving forward in its inte-gration process. This paradoxical situa-tion is the result of the Union’s internal division. Five out of the 27 member states have refused to recognise Kosovo’s inde-pendence and have been objecting to any decisions that could legitimate its new status. Kosovo therefore remains in limbo, with the application of Community instru-ments, such as a visa policy, being frozen indefinitely. Some sort of a breakthrough is expected in the autumn of this year, when the Commission is due to present a ‘study’ on how Kosovo’s political and social-eco-nomic development can be furthered and how the country could and should prog-ress, together with the rest of the region, along the stabilisation and association process. However, the low-profile status of this document suggests that no much progress should be expected after its pub-lication. It is hardly likely that any of the five countries opposed to Kosovo’s inde-pendence will change their mind in the near future, leaving Kosovo somewhere in between an international protectorate and an independent state.

BOSNIA AND HERzEGOVINADue to its strong

internal political divi-sions, Bosnia’s progress towards EU member-ship has been stalled

for years now. The requirements set in 2008 for ending the international protec-torate in the country have not yet been met. Despite signing the SAA with the EU, in June 2008, the country has no chance to progress in the near future on its integration process. Before applying for EU membership, Sarajevo has to deliver

on EU-related reforms and on the bench-marks for closing the Office of High Rep-resentative (OHR), paving the way for the EU to reinforce its presence in the coun-try. Last November, the EU member states had expressed their readiness to “step up” the bloc’s role in Bosnia and to work on progressively achieving a “transition from the OHR to a stronger European Union presence” by mid-2009. It is foreseen that the OHR will be replaced by the “rein-forced EU Special Representative (EUSR) office” supported by the European Com-mission Delegation to Bosnia, according to an internal Commission document seen by Europolitics. The office would comprise around 80 people located in the main office in Sarajevo, with a small pres-ence in Banja Luka and in Brussels. The document to be submitted to the member states in the coming weeks suggests that the EUSR office and the EC Delega-tion in Sarajevo would “remain distinct institutions, but work as a team”.

However, due to the high level of ten-sions between Bosnian leaders following the filing of criminal charges against Bos-nian Serb Prime Minister Milorad Dodik in February and the lack of progress on the issue of state property (one of the bench-marks for closing the OHR), it is not clear when the transfer of power could take place in Bosnia. There is also the ques-tion whether after taking over the super-vision in Bosnia the EUSR should retain the plenipotentiary ‘Bonn powers’ of the OHR that have been the international community’s primary tool to overcome obstruction.

tURkEYOver three years after

the start of its accession talks, Turkey remains at the early stages of

the process due to its slow progress in reforms. The snail’s pace of talks has been especially evident since the beginning of 2009. Preoccupied with the local elections held at the end of March, the government in Ankara has made hardly any progress in implementing the required EU-related reforms. As a result, no new chapter has been opened or closed since December 2008 and it is still not certain if any prog-ress at all would be possible by the end of the Czech EU Presidency. The adoption of laws necessary for two chapters to be



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opened in the first half of 2009 - on social policy and employment (Chapter 19) and taxation (16) – remains blocked in the par-liament. To move forward in talks, Turkey has to adopt unpopular and politically as well as socially painful reforms, includ-ing a new law on trade unions (19) and an action plan on substantially reducing the discriminatory taxation of alcoholic products, imported tobacco and imported cigarettes (16). “It is technically possible that Turkey will fulfil these conditions in due time,” an EU official told Europoli-tics. “In practice, however, only little time has been left before the accession confer-ence, scheduled for 26 June,” he added. Two other chapters are ‘technically’ ready for opening: energy (15) and education and culture (26). However, both areas have been blocked by Cyprus for certain political reasons.

The current stalemate does not augur well for the second half of 2009 either. Four other chapters (public procurement; competition; food safety, veterinary and phytosanitary policy; and environment) identified by the Commission as ready for opening provided Ankara meets certain conditions are also in a limbo. “No prog-ress has been made by Turkey on those areas over recent months,” the EU official said.

Since the start of accession talks, in October 2005, Turkey has opened ten chapters and managed to provisionally close only one out of 33 areas subject to negotiation.

ICELANDAlongside Albania

and Serbia, Iceland is also mulling over applying for EU mem-

bership in the near future. This island state of 300,000 people has never formally knocked on the EU’s doors, mainly over fears that accession would negatively affect its prosperous fisheries sector. It was enough for the Icelanders that as a member of the European Economic Area since 1994 their country has been allowed to fully participle in the EU single market without being a member. Iceland is also a member of the Schengen border-free zone.

The debate over the country’s EU acces-sion has taken on a new dimension after the eruption of the global financial crisis,

in October 2008, which has thrown Ice-land into one of the worst economic reces-sions in its modern history. These new circumstances have prompted the politi-cal leaders to reconsider EU membership as one of the options to drag the country out from its current financial difficulties. According to experts, accession to the EU and the subsequent adoption of the euro could bring Iceland back on a stable eco-nomic track. However, the public and the political elite remain divided over the issue.

Following the early elections of 25 April, Iceland is now widely expected to make a swift application for EU mem-bership. The newly elected government coalition of Social Democrats and Left-Greens, headed by the Europhile Johanna Sigurdardottir, holds an absolute majority in parliament. Sigurdardottir has said that she wanted to begin the EU application process “within weeks” of the election. She said she was confident that her coun-try, whose currency lost nearly 44% of its value last year, could adopt the euro within for years as Iceland meets 70%-75% of the EU criteria. The Left-Green movement remains opposed, primarily to protect the country’s fisheries sector. However, the leader of the Left-Greens, Steingrimur Sigfusson, has recognised the urgency to discuss the issue.

SpECIAL CASE: NORtHERN pARt OF CYpRUS

Although Cyprus as a whole was admit-ted to the EU in May 2004, the acquis com-

munautaire remains ‘suspended’ in the northern part of the island, which is controlled by the Turkish Cypriot com-munity. The suspension, which has been in effect for five years, could only end if the two parts of the island manage to reunify after almost 35 years of division. Since last November, the Greek leader, Dimitris Christofias, and his Turkish Cypriot counterpart, Mehmet Ali Talat, have been carrying out reunification talks. Despite holding some 30 meetings to date, they are far from a final agree-ment. During the ongoing first phase of discussions, the leaders will try to reach consensus on six main issues: gover-nance and power sharing; property; EU matters; economic matters; security and

guarantees; and territory. The items on which no agreement could be reached during this first round of talks will be the subject of a cross chapter give-and-take in the endgame of the negotiations. To date, the leaders have managed to con-clude discussions on three issues: gover-nance and power sharing, property, and EU matters. On 6 April, they launched negotiations on economic matters, to be followed later on by talks on security and guarantees and territory.

Whereas some progress has been made on the chapters on governance and power sharing as well as EU mat-ters, “fundamental disagreement persists on property,” an internal EU document obtained by Europolitics says. It also emphasises the fact that “there are dif-ferent perceptions among the leaders as to the way the united Cyprus will come into existence”. The Greek Cypriot side considers the future settlement as a kind of constitutional reform of the existing Republic of Cyprus, which will just be federalised. The Turkish side, on the contrary, considers the future united Cyprus as a new entity created by two founding states. In addition, Turkish Cypriots seek a looser federation with more decision making power going to constituent states, to prevent domina-tion by the majority Greek Cypriots, while the latter want a stronger federal government to ensure a well-function-ing state and prevent any deal leading to permanent partition.

If the two leaders manage to reach a settlement it will be subject to separate simultaneous referenda in both com-munities. “In an optimistic scenario, the settlement could enter into force at the end of 2009,” the document says. How-ever, as recent opinion polls show, there is still much scepticism with regard to the settlement process on both sides. A recent poll carried out by the Turk-ish Cypriot CADEM Research Insti-tute asked Turkish Cypriots what their response would be if the 2004 referen-dum was repeated: 54% replied ‘no’ and only 28% said ‘yes.’ In addition, after the victory of the opposition National Unity Party, which favours a two-state solu-tion, in Northern Cyprus’ parliamen-tary elections, held on 19 April, Talat’s reunification efforts were put in jeopardy. n



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Libor Roucek (PES, Czech Republic), one of the strongest supporters of EU enlargement among the members of the European Parliament, argues that despite undergoing serious political and eco-nomic difficulties, the European Union should continue its expansion policy. He is against any break to be taken by the Union, advocating instead the process of enlargement to continue in paral-lel with internal eco-nomic and institutional reforms of the EU.

Do you agree with German Chancellor Angela Merkel that after admitting Croa-tia the EU should take a break in its enlargement?I do not share this opin-ion. There is a so-called unfinished business in the Western Bal-kans. In 2003 in Thessaloniki, the EU made clear its commitment to enlarge towards the Western Balkans. Despite all the difficulties we are having now with the previous enlargements, the Lisbon Treaty and the economic crisis, we should not forget this promise. Of course, it is clear that the countries in question are not ready yet to accede. But we should continue the process. In the past, in a parallel way, the EU was consolidating internally and carried out the enlargement process. In the frame-work of the current serious difficulties, we should take the same approach and continue enlargement.

Do you think that the current eco-nomic crisis and the unfinished institu-tional reform are legitimate reasons for enlargement to be put on hold?We have to do both. We need to have the Lisbon Treaty in place. There is no doubt about that. At the same time, we should continue the enlargement pro-cess. There are negotiations with Croa-tia, where there are certain difficulties

resulting from the border dispute with Slovenia. All the countries have now signed their stabilisation and association agreements, and thus they can move forward in the process. It is clear that countries like the FYROM, Montenegro and Albania want to be admitted in the foreseeable future. Therefore we should make sure not to let down the countries

and their citizens just because we have been undergoing certain economic or political difficulties. The financial crisis, which we are now struggling with, was not caused by Belgrade or Tirana. These countries, as well others in the region, should not fall victim to some bankers on Wall Street.

Do you think that against the backdrop of a worsening economic and political atmosphere in the EU, other countries could follow Germany?I do not think that Germany is against enlargement in principle. Yes, Germany wants the EU to consolidate. And I fully support this approach. The EU needs to strengthen its structures now. That means that we should focus on the ratifi-cation of the Lisbon Treaty. There is no doubt. But at the same time, we should not forget about people in the Western Balkans.

What is the most realistic timeframe for the accession of the Western Balkan countries? Would a decade be enough to get all of them into the club?

It is very difficult to specify the date as it depends mostly on the countries them-selves and on how successful they will be in their reforms. It also depends on the EU member states, of course. It is clear, however, that it will not happen in the next few years as the countries are not ready yet.

There are problems in the Balkans but the question mark is even bigger over Turkey’s European pros-pects. Is Turkey’s accession to the Union still realistic?The accession process is ongoing. It is important, however, to remember that a lot depends on Turkey itself and on how willing it is to implement reforms. Last year, because of the politi-cal upheaval and the elec-tions, the reform process slowed down considerably. In order to speed up the accession process, Turkey

needs to step up the reforms. According to an agreement by all member states, the negotiation with Ankara is an open-ended process, but leading at the same time to full membership.

However, Germany and France propose ‘privileged partnership’ instead of full membership.Upon signing the agreement with Turkey a few years ago, France and Germany accepted that the goal of the process is full membership. It is an open-ended process at the same time, giving both parties the right to decide at the end of talks. Nobody knows whether Turkey will eventually want to enter the EU.

What may be the consequences of a freeze on enlargement in the Western Balkans and Turkey?Like I said, the EU should not slow down its enlargement process. It is in the interest of everybody and would pro-mote stability and prosperity in the EU if all Western Balkan countries join the club. n

By Joanna sopinska

iNTerVieW WiTh mep liBor roucek, Vice-chair oF The ep’s ForeigN aFFairs commiTTee

Western Balkans should not fall victim to Wall street bankers

© P

ERoucek: “we need to have the Lisbon treaty in place”



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Elmar Brok (EPP-ED, Germany), a vig-orous supporter of the ‘big bang’ enlarge-ment of 2004, is now campaigning in favour of a freeze of the EU’s expansion until after the Union finalises its internal reforms. He argues that without the Lisbon Treaty being fully ratified, the EU should not accept any new applications for membership, including from the Western Balkan countries and Iceland, and predicts that many member states are ready to positively respond to Berlin’s call for a total freeze on enlargement.

Could you specify what the CDU means in its manifesto for the June European elections by calling for internal consolida-tion to take priority over further enlargement?It means that before further enlargement, with the exception of Croatia, the EU must become effective. The integration capacity of the European Union must be increased. The present European Union is not able to enlarge because of the danger of overstretching.

Does this mean that there is need for the Lisbon Treaty to be ratified and put into force before any other country aside from Croatia is admitted to the EU?Yes.

What would happen if the Lisbon Treaty is not ratified?Then we should stop to enlarge.

How long such a break should last?Until after the European Union upgrades its integration capacity.

Are you calling for a total freeze?Yes. If the Czech Republic and Ireland do not ratify the Lisbon Treaty, the EU would not be able to take more countries on board.

Does it mean that the EU should not accept any new applications for membership?Yes.

Which countries could follow the CDU’s call for a break in enlargement?There are many countries that could follow, especially if the Lisbon Treaty is not ratified. One of them is France, but also Austria. There are many countries that do not admit it publicly but are in favour of a break.

Aren’t you afraid that a total freeze on enlargement could cause instability in the Western Balkans – a region whose prog-ress depends so much on the European perspective?Most of these countries still need a long time before becoming ready for accession. We can continue negotiating a pre-acces-sion strategy for them so there is no break in the process of their approximation to the EU standards. On the other hand, these countries should address their grief over a break in enlargement to Prague and Dublin. The entry into force of the Lisbon Treaty is a sine qua non condition for the last round of enlargement. Now we still work under conditions set for the fifteen members of the European Union. It is part of the Copenhagen criteria that both the applicant country and the European Union must be ready for further enlarge-ment. The European Union should show the ability to reform before admitting any new members.

What would happen to Iceland if it decided to apply for EU membership before the Lisbon Treaty is successfully ratified?We will not make any exceptions, including for Iceland.

On a more general note, what is the most likely scenario for the Western Balkans? Do you expect all seven countries to be admitted to the EU within the next ten years?It depends on whether they will be able to meet certain conditions during the next years.

The member states will soon start to discuss the next finan-cial perspective. Do you think that the accession of the West-ern Balkan states should be envisaged in this document?I believe it should be taken into account.

Turning to Turkey, the CDU manifesto proposes ‘privileged partnership’ instead of full membership to be offered to Ankara. What added value would such a relationship have

for Turkey and the EU?First of all, Turkey is one of the most impor-tant strategic countries for the EU. So, the EU’s interest in maintaining a close rela-tionship with Turkey is obvious. Secondly, I have my doubts whether Turkey will be able to meet the political and economic conditions for membership, especially in such fields as home affairs, the justice system, freedom of speech and religion. Therefore I believe that Turkey should be offered a Norway-style status. Norway is part of the EU’s internal market and the Schengen zone. Such a status is reachable in a relatively short time. It could bring progress to Turkey and at the same time strengthen its relations with the EU.

But obviously Turkey aspires for full membership. Aren’t you afraid that if not granted such status, Ankara might turn its back on the EU?Turkey does not meet the Copenhagen criteria. That is obvious. The negotiation mandate adopted by the Council says that the aim of the talks is full membership. The same document, however, says that in case of problems in negotiations, full member-ship should be replaced by the highest pos-sible binding agreement between the EU and Turkey. n

By Joanna sopinska

iNTerVieW WiTh mep elmar Brok, memBer oF The chrisTiaN democraTic uNioN (cdu)

We will not make any exceptions, including for iceland

Brok: “turkey should be offered a Norway-style status”

© P

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�0 Thursday30April2009 N°3744EUROPOLITIcs


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A pregnant woman who is dismissed must have the same rights and time period for lodging an appeal as other employees. This is the sense of the opinion issued by the Advocate-General of the Court of Jus-tice of the European Communities, Verica Trstenjak, in a case concerning the protec-tion of employees dismissed during mater-nity leave. Case C-63/08 coincides with the move by the European Parliament’s Com-mittee on Women’s Rights to strengthen protection of pregnant women.

In January 2007, Virginie Pontin, an employee of a company based in Luxem-bourg, was on sick leave when she received a notice of dismissal. A few days later, she received a registered letter stating that she was dismissed without notice for unjusti-fied absence from work of more than three days. She then informed her employer that she was pregnant and that consequently the dismissal was null and void by virtue of the legal protection granted to pregnant women. Pontin received no response. Con-sidering her dismissal unfair, she applied to the labour court, initially for annul-ment of the dismissal and subsequently for compensation from her employer.

The Luxembourg labour code trans-poses Directive 92/85/EC on measures to encourage improvements in the health and safety at work of pregnant workers and workers who have recently given birth or are breastfeeding. However, it imposes strict deadlines for bringing legal proceed-ings: eight days from the date of notice of dismissal to inform the employer of the state of pregnancy when notice precedes the medical determination of pregnancy and 15 days for bringing an action for annulment. Virginie Pontin maintained that the time period was too short consid-ering that the ordinary period for lodging an action for annulment of a dismissal is three months. The labour court turned to the Court of Justice to learn whether Lux-embourg’s law on this point is compatible with Directive 92/85/EC.

Luxembourg’s regulations do not give

pregnant women the possibility to apply for compensation from their employer although other dismissed employees have such a right.

Virginie Pontin argued that this differ-ence of treatment was not justified and that it constitutes gender discrimination in violation of EU law. Luxembourg’s labour court consequently asked the Court of

Justice to rule on the compatibility of this measure with Directive 76/207 banning gender discrimination.

Advocate-General Verica Trstenjak, who presented her opinion in this case on 31 March, first examined whether it is possible to apply for compensation from the standpoint of EU law and then the question of the admissibility and appropriateness of the time periods.

IDENtICAL RIGHt OF AppEALTrstenjak found that the two directives

overlap and that they oblige the member

states to guarantee effective legal protec-tion, accessible to anyone claiming viola-tion of the principle of equal treatment. Since Luxembourg’s law allows action for damages in cases of ordinary dismissal by the employer, the principle of equal treat-ment requires that a pregnant worker who has been dismissed must have the same possibility.

She advises the Court of Justice to rule that gender discrimination in violation of EU law has indeed occurred.

As for the time period of eight days for the employee to notify the employer of her pregnancy, Trstenjak finds that this does not run counter to EU law because it contributes to the protection of preg-nant women and possible successful conclusion of the appeal.

FIFtEEN DAYS: tOO SHORtIn contrast, the advocate-general finds

that the period of 15 days for bringing action is too short to enable the dismissed worker to assess the situation, seek advice and draw up and lodge an appeal, par-ticularly because Luxembourg’s law on protection against dismissal introduces a general time period of three months for bringing such actions.

The advocate-general’s opinion is not binding on the judges hearing the case. n

By sophie mosca

BackgroundEven before Directive 92/85 enteredinto force, the Court of Justice hadheldthatthedismissalofanemployeedue to pregnancy constituted directgender discrimination in violationof Directive 76/207 (in the followingcases:HandelsC-179/88,Habermann-Beltermann C-421/92 and Webb C-32/93). It ruled unlawful the practiceof setting a compensation ceiling andthe absence of interest for the injuryincurredduetothedismissalofapreg-nantwoman(MarschalC-271/91).Thecourtexplainedthattheprohibitionondismissal of pregnant women under

EUlawappliedtobothfixed-termandopen-endedcontracts(JiménezMelgarC-438/99andTeleDanmarkC-109/00).InthePaquaycase(C-460/06),itheldthatEUlawbansnotonlythepracticeof giving notice of dismissal due topregnancy at any time, even after theendof theprotectionperiod, but alsothat of taking preparatory measures,such as recruiting a replacement,beforetheendofthisperiod.Thecourthas also ruled that an employer maynotrefusetohireapregnantwomanonthegroundsthatdoingsowouldresultinafinanciallossduringhermaternityleave(DekkerC-177/88).

WorkiNg coNdiTioNs

advocate-general reinforces rights of pregnant workers

Jurisprudence

She advises the Court of Justice to rule that gender discrimination in violation

of EU law has indeed occurred

EUROPOLITICS

Dossiers and Special Editions

DOSSIERSEU Court of auditors turns 30: 3394, 17/10/07EU-Russia summit: 3400, 25/10/07EU-Africa summit: 3428, 6/12/07Kosovo: 3452 and 3453, 21 and 22/01/08Energy-climate change pakage: 3455, 24/01/08VAT package: 3469, 13/01/08EU-NATO: 3509, 14/04/08EU-Japan: 3515, 22/04/08EUBAM Moldova-Ukraine Mission: 3516, 23/04/08EU Chad-CAR Mission: 3517, 24/04/08EU-US – Climate change: 3524, 7/05/08Return directive: 3531, 19/05/08Brazilian beef breeders planning full return to EU markets: 3532, 20/05/08Remuneration of directors: 3536, 26/05/08EU-Bosnia-Herzegovina – EESC at 50: 3538, 28/05/08REACH: 3540, 30/05/08Irish referendum: 3548, 11/06/08Territorial cooperation: 3552, 17/06/08Back to Nice: 3554, 19/06/08Galileo: 3557, 24/06/08Lamassoure report on citizens’ Europe: 3559, 26/06/08Small Business Act: 3561, 30/06/08Security and defence strategy: 3563, 2/07/08Cyprus reunification process: 3569, 10/07/08Energy liberalisation: 3576, 21/07/08Telecoms package: 3579, 25/07/08Community Fisheries Control Agency: 3580, 28/07/08

Customs Union: 3594, 12/09/08Citizens’ access to law and justice in Europe: 3598, 18/09/08Reform of the Common Fisheries Policy: 3604, 26/09/08Pact on immigration and asylum: 3617, 15/10/08Enlargement report: 3632, 5/11/08Regions and migration: 3645, 26/11/08Poznan conference: 3649, 2/12/08ESDP Mission in Georgia: 3664, 23/12/08EU-US – Barack Obama: Chances and challenges:

3674, 19/01/09The crisis: A test for Europe: 3699, 23/02/09Water, a global challenge : 3712, 12/03/09 European Parliament’s priorities in run-up to elections:

3709, 09/03/09Solana: 3717, 19/03/09Airbus A400M: 3722, 26/03/09

SPECIAL EDITIONSFrench EU Presidency: New horizons: 3562, 01/07/08European Parliament of Enterprises: supplement, 14/10/08European Parliament turns 50 – Anniversary special:

3494, 19/03/08Slovenian EU Presidency: 3441, 04/01/08Europe facing climate change: 3423, 30/11/07Lisbon Treaty: Here is what changes: 3407, 07/11/07Tomorrow’s Europe: 1957-2007 - What’s next?: 3270, 19/03/07

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