Brussels, 04/10/2000 (Agence Europe) - This Wednesday the European Commission adopted its communication on the European Union's oil supply which will be submitted to the European Council next 13 and 14 October. Talking on the guidelines defined by the European Commissioner for Energy, Loyola de Palacio, is its note to the college of Commissioner at the start of September (see EUROPE/Documents N° 2205), the Commission is proposing a five point strategy, by placing the emphasis on better coordination between Member States, or a partial "Communitarisation" of energy policies so as to avoid the "present cacophony", according to Mrs de Palacio's expression. "The issues of oil supply cannot be dealt with individually: Europe must do more to coordinate and develop an overall strategy". Announced the Commission President, Romano Prodi.
In line with this, the Commission is proposing to Communitarise part of the Member States oil reserves and to create a mechanism enabling to stabilise VAT receipts in case of significant fluctuations in the price of oil. These measures "are not the panacea", admitted Mrs de Palacio before the press, but they "constitute paths for thought" while awaiting concrete proposals.
The five Commission proposals are as follows:
1. More open relations with oil-producing countries, which implies: a) "to organise an open and ongoing dialogue with producer countries, and in particular with OPEC, to make for maximum market transparency and to help establish stable prices. This added, Loyola de Palacio, "alongside producers and consumers, in the 7th international Energy Forum which will be held in Riyadh on 16 and 17 November 2000; b) to increase co-operation with Russia, in particular over the rehabilitation of production and transport installations for oil and gas, notably in the framework on the technical assistance programme to neighbouring countries of the Caspian sea, Inogate.
2. Improving market mechanisms, by: a) "prompting producer countries, the operators of the markets and the industry to improve indicators of price-fixing, in particular around an overall index reflecting the market; b) in cooperation with Member States, to tighten control of competition rules both in the oil product distribution sector and in respect of contingency measures taken by Member States to lessen the impact of the recent price increases in certain sectors of activity, c) to seek means of intervention to limit price volatility, in order to combat speculation.
3. Increasing the consistency of national policies and strengthening a common approach of the taxation on fuels, by: a) discouraging "resisting the temptation to offset oil price rises by cutting taxes and aiming to harmonise excise duties between Member States, in particular by raising minimum rates", b) exploiting "the possibility of linking the alignment of fuel taxes with the higher rates, with a Community mechanism to stabilise VAT revenue in the event of major fluctuations in oil prices", c) looking at ways of increasing strategic oil stocks by bringing their use into the Community framework. Commissioner de Palacio also raised the possibility of presenting a Directive that would put part of the strategic reserves under Community control.
4. A more diversified and more economic energy policy, which implies: a) strengthening the supply security. The Commission will present a Green Paper on the security of EU energy supplies, including an overall strategy to strengthen the security of supply, b) to strengthen energy saving, to also ensure respect for the environmental objectives set at Kyoto. "The European Commission will present the European Council of Gothenburg with a plan to save energy and to diversify energy sources, with an emphasis on energy efficiency, in particular in buildings", she announced, c) to increase research efforts, supporting the development of a new generation of vehicles and of substitute fuels.
5. The ambition of an alternative common transport policy. The Commission will submit a White Paper on a sustainable common transport policy, which will aim in particular: a) to redress the balance between modes of transport: "making rail and short sea shipping genuine economically viable alternatives", b) to give priority to the restructuring of the road haulage industry, through social rather than fiscal measures, c) to develop systems of combined transport and to rationalise the use of the private car.