Preparation for the Competitiveness Council of Ministers, Brussels, 05/06 March 2009

MEMO/09/93

Brussels,4 March 2009

Preparation for the Competitiveness Council of Ministers, Brussels, 05/06 March 2009

The EU Competitiveness Council will meet in Brussels on Thursday 05 and Friday 06 March under the chairmanship ofMartin Říman, Minister for Trade and Industry.The European Commission will be represented by Vice President Günter Verheugen, responsible for Enterprise and Industry, Commissioner Charlie McCreevy, responsible for the Internal Market and Services, Janez Potocnik, Commissioner responsible for Science and Research and Commissioner Meglena Kuneva for Consumer Safety.

3.Follow-up to the Single Market Review (OD)

Ministers will adopt conclusions on the Commission's progress report on the Single Market Review (see IP/08/2000), which outlines a series of measures that have already been taken or are in the pipeline that will help create the conditions to relaunch the European economy. For example, stronger contractual rights, the removal of unjustified obstacles to cross-border buying, the introduction of effective redress when things go wrong and the availability of clearer and better information for citizens about their single market rights are among the initiatives which are underway. Safer financial products - bank accounts, savings, investment products and payments – were also prioritised in 2008. For companies, and particularly small and medium-sized enterprises (SMEs), single market policy has prioritised lower costs and administrative burdens, simpler company rules and better access to markets in other Member States. The Commission has also tabled a proposal for a simple, single company statute. SMEs will soon be able to obtain payments from their debtors more promptly, use electronic procedures instead of paperwork and deal with administrative formalities through one contact point

4. Lisbon Strategy Key Issues Paper (TvL AT)

On 28 January 2009, the Commission adopted Lisbon Strategy recommendations and country chapters to build a lasting recovery (see IP/09/146). These will help ensure the European Economic Recovery Plan (see IP/08/1771) is implemented in a way that builds for the future as well as responding to the economic crisis. The country chapters analyse progress in each MemberState in implementing the Growth and Jobs Strategy, taking account of the crisis. They include proposals for formal recommendations for endorsement by the Spring European Council. The same day, the Commission has also adopted reports on the overall implementation of the Lisbon Strategy in the macro and micro-economic and employment fields.

Ministers will discuss the Key Issues Paper and related Council conclusions. The Key Issues Paper is the annual contribution of the Competitiveness Council to the Spring European Council.

This year’s Key Issues Paper will focus on the following issues:

removing barriers and achieving a fully operational and modern internal market. This is the fundamental basis of the European Union and a major source of economic growth and jobs.
reducing administrative burdens .
improving framework conditions for industry with special focus on SMEs andinnovation (see below),
Enhancing the level and the quality of investment into knowledge and
the external dimension of competitiveness.

5. Crisis in the automotive industry (TvL)

The automotive sector with its 12 million jobs depending on this strategic industry has been hit particularly hard by the current economic crisis with new registrations down by 20% and gloomy expectations for 2009. Due to its close links to other sectors and the wide spread of supply industry and vehicle trade, the negative economic effects reaches out to millions of employees in all Member States. To support this vital industry in getting over its current challenges, the European Commission communication of 25th of February called for a combination of short-term and long-term concerted actions (see IP/09/318). To counteract the serious decline in demand and output, the Commission proposes measures to improve the availability of credit, European-wide guidelines for car scrapping schemes and a clear set of rules for granting of state aid to companies whose difficulties do not pre-date the crisis. The Commission is working to ensure that the industry will remain competitive in the long term, by boosting investment in Green cars and providing social support.

The aim is for the Competitiveness Council to adopt Council conclusions on the automotive industry. The Council is also likely to have a broader debate on the state of the European automotive industry.

6. Progress Report on Better Regulation (TvL)

The strategic review on Better Regulation in the European Union tabled by the European Commission on 28th of January, shows that better regulation is a core component of Europe's response to the economic and financial crisis. The review shows that citizens and companies, in particular small and medium sized enterprises (SMEs), already benefit from simplified measures and savings in administrative costs. Thanks to radical simplification some 1,300acts, representing around 10% of the acquis or 7800 pages of the Official Journal, have been proposed for removal so far. The administrative burden reduction measures already presented (or foreseen) represent possible savings in excess of €30billion. The Commission's leadership on administrative burdens has inspired most Member States, and 21 of them have put in place ambitious national programmes to reduce administrative burdens. Finally the Commission will continue to improve the quality of all new legislation it produces by further upgrading the quality of its impact assessments(see IP/09/131).

The Czech Presidency prepared a Progress Report on Better Regulation, which is on the Council’s agenda on the 5th March 2009, and it takes stock of recent progress in Better Regulation. The report also sets out the Czech Presidency’s viewson how the Better Regulation policies can be developed further in the EU.The Presidency will prepare a set of draft Council Conclusions for the meeting of the Competitiveness Council on 28th /29th May 2009.

MEETING ON FRIDAY 6 MARCH 2009 (9:30)

RESEARCH

7.Contributing to the Lisbon strategy - Ljubljana process (CR)

The "Ljubljana process" Council conclusions of 30 May 2008 called for the development of a shared vision of the European Research Area by the end of 2008. At December 2008 Competitiveness Council, the Council has adopted the shared vision 2020 for the European Research Area that aims to establish the "Fifth Freedom", the freedom of circulation of knowledge and to provide attractive conditions for researchers be able to move seamlessly across Member States.

Ministers of Research will exchange views on the contribution of research to economic recovery and on the priorities for the development of the European Research Area, in the framework of the discussion on the Key Issues Paper of the Competitiveness Council to the Spring Council.

8.European Research Infrastructures - Europe at the rapidly evolving forefront of science and technology (CR)

Europe's research infrastructures help us push the boundaries of knowledge and technology, but they are increasingly large, complex and expensive. They increasingly require a joint effort by several EU countries. Ministers of Research will exchange views with the Commission on how infrastructures contribute to promote collaboration within the knowledge triangle; on how the construction of infrastructures can support the corresponding industry sector in the context of the Recovery Plan,; and on the policy measures needed to ensure optimal distribution throughout the EU.

The exchange of views will touch on the 44 major research infrastructures to be set up within the EU (see IP/08/1913) in fields from energy and environmental sciences to physics and engineering, which are identified in the revised roadmap of the European Strategy Forum for Research Infrastructures (ESFRI) adopted in December, which it will touch on the proposed regulation establishing a European legal framework for European Research Infrastructures (see IP/08/1142) adopted by the European Commission on 16 July 2009 which will make it easier to set up European Research Infrastructures, such as observatories for environmental sciences, data banks in genomics or state of the art large super computers.

AOB

(a) Five years after Prague : impact of enlargement in the European economies (Information from the Presidency)

Five years of an enlarged EU has brought lasting benefits and left Europe better placed to tackle the current crisis, concluded the Communication and Report five years after the biggest enlargement ever of the European Union (see IP/09/300). Economically, enlargement has led to increased living standards in the new Member States, while creating export and investment opportunities for the old ones. It has also helped consolidate democracy, stability and security on our continent. An enlarged EU carries more weight when addressing issues of global importance be it climate change or the world economy and its governance. Five years on the EU is not only bigger, it is also stronger, more dynamic and culturally richer.

(b)Transatlantic Economic Dialogue (TEC) (TvL)

The TEC provides the US and the EU with a high-level mechanism to push forward technical negotiations and to identify new areas for regulatory cooperation. Vice President Verheugen will inform Minsters of progress made to date (see TEC).

The TEC has been placed on the Council agenda at the request of the Commission.The objective at the Council meeting is to inform Member States about the state of preparation for the next TEC meeting and to encourage them to remind the US Administration of the importance of the TEC as a tool for advancing EU-US economic integration.

Today's circumstances make the TEC more important than ever. The current economic crisis demands even closer contact between the two motors of the world economy. The Commission is currently developing a possible medium-term programme for economic cooperation with the U.S., which seeks to spell out an ambitious vision of what we want to achieve with our U.S. partners between now and 2013 and to be discussed with the US once the U.S. government has confirmed its intention to continue the TEC process.

The 2009 EU-U.S. Summit could then formally endorse the medium-term work programme.

(c)Implementation of the Small Business Act (SBA) (TvL)

In the current economic crisis, the speedy implementation of the SBA is of utmost importance. Whilst the Commission is progressing well in implementing the legislative and policy actions of the SBA (e.g. SME Test, e-invoicing Directive) there is much less information available on the Member States’ progress (see SBA site) Furthermore, some Member States have asked for guidance on whether they should focus on implementing the short-term measures included in the SBA Action Plan and Recovery Plan or on implementing the whole of the SBA. In addition to addressing these issues, the Commission also needs to clarify how it sees the monitoring and reporting of progress on MemberStates’ and Commission’s actions.

The Competitiveness Council in March will address the implementation, priorities and reporting with a “tour de table” while a more substantive debate is foreseen at the Competitiveness Council on 28-29 May, with a background document prepared by Presidency and the Commission to guide the discussion, and it will focus on Member States’ actions in the SBA Action Plan and the Recovery Plan.

The Member States endorsed the SBA at the Competitiveness Council on 1 December 2008 and committed themselves to the immediate implementation of an Action Plan of measures aimed at addressing challenges linked to the financial and economic crisis in three key areas: improving access to finance, creating a regulatory environment supportive of SMEs needs and enhancing SMEs’ access to markets.

(f) Internal Market Scoreboard (OD)

Commissioner McCreevy will present to Ministers the results of the latest Internal Market Scoreboard (see IP/09/297). According to the Scoreboard, on average only 1.0% of Internal Market Directives for which the implementation deadline has passed are not currently written into national law. This means that most Member States remain in line with the new 1.0% target agreed by Heads of State. Seventeen Member States are on target, with Denmark and Malta jointly achieving the best result. In total 14 Member States achieved or equalled their best result so far. The Scoreboard both presents the degree of economic integration achieved - illustrating that there is considerable scope for further integration if and when existing barriers are eliminated - and analyses how well Member States apply Internal Market rules in practice. Figures show that the average number of cases of misapplication has risen to 49 per MemberState and that these cases take too long to resolve. To solve their problems in the Internal Market, citizens and businesses are increasingly turning to the EU's problem-solving and advice services rather than formal complaint procedures, as shown by the SOLVIT and Citizens Signpost Service (CSS) annual reports.

(g)Services Directive: state of play of implementation process (OD)

Commissioner McCreevy will inform Ministers about the state of play of the implementation process for the Services Directive and will encourage those Member States that are behind schedule to step up their efforts in order to meet the implementation deadline of 28 December 2009.

The objective of the Services Directive is to achieve a genuine Internal Market in services by removing legal and administrative barriers to the development of service activities between Member States. The Directive will guarantee service providers more legal certainty if they want to exercise two fundamental freedoms (freedom of establishment and freedom to provide services) enshrined in the EC Treaty. This will make it easier for businesses to provide and use cross-border services in the EU, thus increasing cross-border competition in service markets, bringing down prices and improving quality and choice for consumers. The Directive will also strengthen the rights of users of services, for instance by enshrining the right of non-discrimination.

(h) 'Monitoring consumer outcomes in the single market – Second edition of the Consumer Markets Scoreboard'

The main objective of the Consumer Markets Scoreboard is to identify which parts of the internal market are not functioning well for consumers. This communication presents the results of the second edition of the Scoreboard and complements the Commission's broader market monitoring exercise by providing additional information on the malfunctioning of markets from a consumer perspective. Commissioner Kuneva's intervention is aimed at ensuring support for the Consumer Market Scoreboard and its follow-up activities. Member States are requested to collaborate on further development of indicators to measure outcomes for consumers and to collect evidence.

In 2009, effort will be focussed on the development of a regular collection of average prices of comparable consumer goods and services and on the development of harmonised methodology to classify consumer complaints. The Competitiveness Council is expected to endorse the reference to the Consumer Markets Scoreboard in its Conclusions on the Single Market Review

(k)Ex-post Evaluation of FP 6 (CR)

The Commission will inform the Council on the report released on 16February, and prepared by an independent Expert Group which was created to carry out the evaluation of the FP6. The aim of the evaluation was to assess the rationale, implementation and achievements of the FP6. The report's findings were also presented during the EUFORDIA conference that took place on 24-25 February in Prague, and which focused on the development of better methodologies for research impact assessment.

(n)Possible Association of the Russian Federation to the Seventh Research Framework Programme (2007 - 2013): state of play (CR)

The Commission and the Presidency will inform the Council on the state of play of the discussions related to the association of the Russian Federation to the FP7. Last April the Russian Federation requested negotiations on an association to the EC and Euratom parts of FP7. On May 26th, at the first EU-Russia Research Permanent Partnership Council, the EU committed to examine the association request. Association to the FP will be addressed in the context of the New EU-Russia Agreement for which negotiations were launched at the EU-Russia summit of Khanty-Mansiisk.At the Community level, a sectoral Agreement on Scientific & Technological Cooperation between the EC and Russia exists since 1999 and has been regularly renewed.