Stockholm, 23/03/2001 (Agence Europe) - During the first day of the European Council of 23 and 24 March, The EU Heads of State and Government meeting in Stockholm under the presidency of Göran Persson finally granted very little time to the central theme of this spring summit, the first devoted to following up the European Council of Lisbon on 23 and 24 March 2000. After the meeting with European Parliament President Nicole Fontaine, a brief exchange of views was held on the BSE crises and foot-and-mouth. They then had hardly more than one hour to discuss economic reform and liberalisation of markets, before meeting Russian President Vladimir Putin (see other articles) and to begin, in the afternoon, the social/employment section of the Lisbon strategy. The economy and finance ministers, who took part in all the working sessions, managed to clear the obstacles on the issue of integration of financial markets (see other article) and, during a separate working lunch, they discussed the economic situation in Europe and in the world. At the end of the afternoon, participants at the summit met Macedonian President Boris Trajkovski.
After the turn in the debate on energy market liberalisation, one can expect, on Saturday, that the Presidency Conclusions will not contain close target dates.
The Finance and/or Economy Ministers, who took part at all the Summit's sittings, came to brief the press on the unfolding of work. Thus, Laurent Fabius told the press he was struck by the quite general determination to affirm that, compared to the instability in the world, Europe can give a realistic and optimistic message. It was along these lines, he said, that President Jacques Chirac, Prime Minister Lionel Jospin, Portuguese Prime Minister Antonio Guterres, President of the European Commission Romano Prodi and others, expressed themselves. Mr Jospin affirmed that Europe is the "main area of stability and growth in the world" and that "we, Europeans, have kept on course" despite the "international uncertainties" that crop up regularly each year: the Asian crisis in 1997, the Russian crisis in 1998, the Brazilian crisis in 1999, the oil crisis in 2000 and, this year, the difficulties that the US is experiencing".
Regarding one of the main themes dealt with during the morning, the liberalisation of the energy market (and of the postal services), Mr Jospin said that the liberalisation of network industries is not an end in itself and "cannot replace the economic model of Europe". This process must be "gradual, controlled and socially acceptable", he stressed, adding: "We took this question of rate into account for tax harmonisation. Minimum taxation on savings will not come about before 2009 in the de Feira scenario. Why double standards? We are therefore opposed to the hasty fixing of total liberalisation dates, concerning the electricity and gas markets in particular. We therefore propose that the Council should, at this stage, note the Commission's proposal and refer examination of it to the Council". The examples of "failures in the distribution of electricity in California and the rail transport safety problems in certain European countries have shown there cannot be liberalisation without regulation", he remarked. Furthermore, Mr Jospin felt that the conclusions of the Stockholm Summit should make explicit reference to the rapid implementation of the Nice Declaration on general interest services, "through the question of public financing of these services, which require specific treatment regarding State aid regimes, and the evaluation of services provided to users". "The European Council should call on the Commission for "proposals on these two levels", he added.
German Finance Minister Hans Eichel told the press that Germany is in favour of rapidly opening the energy markets up to competition, but that we were confronted by a "hard position" from France, that will not change before the next elections. Also, Germany does not wish to have trouble with France, he noted, echoing the remarks made by Chancellor Schröder at the end of the Informal Franco-German Summit last Tuesday (see EUROPE of 23 March, p.12).
In his speech, Mr Jospin made it clear that the Broad Economic Policy Guidelines "could no doubt be even more precise concerning the euro zone" and that the document prepared by the Presidency "is a good working base for their development" (he regretted, however, their discretion on taxation harmonisation, mainly savings tax and energy tax). Speaking before the press, Mr Fabius noted for his part that, from now on, the BEPGs will be developed in the context of guidelines fixed upstream by the European Council. He felt that the Heads of State and Government, in Stockholm, had endorsed three broad guidelines: - the safeguarding in the EU of growth "equal or above its potential", thanks to an adequate policy-mix; - the development of growth potential; - responses to the challenge raised by the ageing population (a theme discussed during the afternoon work session).
Mr Fabius also pointed out that several participants had cited the Galileo affair and that Romano Prodi had taken stock of the situation, "a positive point in his view" (we recall that the Commission found a solution to the problem of private sector funding, which should allow German resistance to be overcome, according to Mr Prodi who considers that British and Dutch reticence is "more political than economic"). France is in favour of Galileo. Public funding is also needed and "we are ready to assure it", added Mr Fabius.
Others Heads of Government (like Tony Blair and José Maria Aznar) insisted, on the other hand, on early liberalisation of the energy markets, and the British Prime Minister mainly stressed the priority that his country grants to integration of the financial markets.
Commission shows more moderate confidence on evolution of growth
On Friday, the Commission expressed relative confidence further to the fall in the euro compared to the dollar and the fall in some marketable securities, recorded on Thursday on the European markets (see EUROPE of 23d March). Commissioner Pedro Solbes, responsible for economic and monetary affairs, admitted for the first time that the slowdown in the world economy cold has a certain impact on the European economy, though he restated his confidence in the fundamentals of an economy "protected by the euro". He told the press that growth will not be far from 3% for the year 2001. He specified that Europe remains a safe haven at world level, although one must acknowledge the excessive volatility of certain stock markets. The Commission, however, considers that the slowdown in the US and Japanese economies will be partially offset by consumer confidence. Commissioner Frits Bolkestein, responsible for the internal market, was critical of Europe's delay in liberalisation of the energy markets, as well as the postal services and transport. He deplored the "paradoxical nature of a situation where the dollar is doing well while the US economy is slowing down". He attributed the weakness of the euro to the "psychological consequence of the vague image that Europe gives itself". He hammered home:
"Enough of this rhetoric, the Member States must carry out the promises made in Lisbon and open up the markets - mainly the postal market which, if things do not change, is destined to remain as it is for thirty years, from 1989 to 2009". He also expressed regret that progress has not been made on the Community patent. "The Member States have not lived up to their promises. We must now make haste", he concluded.