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Europe Daily Bulletin No. 8595
THE DAY IN POLITICS / (eu) eu/igc/conclave

Stability pact crisis erupts in Naples: according to European Commission, lessons should be learned for economic governance - Ana Palacio forcefully puts Spain's case of huge disappointment at "unbalanced" proposal from Italian presidency on majority at Council -(presidency expected to give some "clues" at insitutional discussion on Saturday

Naples, 28/11/2003 (Agence Europe) - The Italian Presidency would have liked to avoid it but what had been expected, happened: anger from some Member States for the indulgence shown by the Ecofin Council for Germany and France despite their shortcomings of discipline on the Stability Pact, which rubbed off during the work of the Intergovernmental Conference meeting for a conclave for Foreign Ministers from the enlarged Union (including three candidate countries) on 28 November in Naples, in the presence of Michel Barnier and Antonio Vitorino. Dutch Secretary of State arrived in Naples before his Minister, who had stirred up a hornets' nest, by demanding to speak before the work had begun. He also asked, just when the Union was preparing to provide itself with new rules, about the decision by majority voting at the Ecofin Council to bypass the rules of the Stability Pact. Other delegations joined in with the Dutch delegation (with Spain's Ana Palacio underlining that there was not a direct link between the Pact and the IGC, but that this posed a problem of credibility). The Minister for Foreign Affairs Franco Frattini wanted to concentrate the work on revision of the treaty and indicated that the Stability Pact could be tackled later during the Ministers' working lunch. This dinner was essentially focused on defence problems, a discussion in which France, Germany and the United Kingdom are expected to make a contribution by suggesting the ways for structured cooperation and permanent planning, following their meeting on Wednesday evening in Berlin. The spokesperson for Michel Barnier the Commissioner for Institutional Affairs, Stefan de Rynck said that events over recent days involving the Stability Pact ought to encourage lessons to be learned for the future, particularly concerning economic governance. According to the European Commission, the spokesperson pointed out that the results of the European Convention on economic governance were hardly satisfactory.

The Italian Presidency had planned for the conclave to deal with just inter-institutional issues on Saturday morning, issues that were covered in the comprehensive document presented this week to Member States: Council of Ministers groupings, Presidency of the Council of Ministers, Minister of Foreign Affairs. But the Spanish Minister of Foreign Affairs Ana Palacio was keen to discuss, on Friday morning, before the conclave, other problems and her "disappointment" and "surprise" that the Presidency had not come up with any suggestions for taking into account the serious problems Spain had referred to regarding double majority at the Council (majority of States, 60% of the population) decided by the European Convention. (Her Polish counterpart also repeated this concern). During the session, Ms Palacio repeated to the press that the Italian document was "unacceptable" and "unbalanced". She particularly disliked the Presidency's having presented amendments to take into account the wishes of other Member States, whereas they did not think it useful to propose alternatives to the Convention proposal on vote weighting at the Council, a very crucial question for Spain (but not only for them, she added). Franco Frattini replied that their discussions with other Member States had not produced any need to amend the Convention proposal. Frattini also indicated that the Presidency would be presenting on Saturday in Naples, "possibilities for reflection" on weight voting at the Council (the idea was launched for bringing this up from 60% of the population to 66% and that Silvio Berlusconi, on a visit to Poland, raised the possibility of extending Provisions from Nice a little beyond 2009). Spain's position was constructive and conciliatory, assured ms Palacio, who hoped that a solution would be found and promised that "Spain would fight to have a Treaty of Rome".

On Friday morning, the conclave examined the Presidency's proposals on: Union values, minority rights, gender equality, the primacy of Union law, the jurisdictional control of legal acts adopted by the European Council (an innovation that is particularly welcomed by one of the two EP representatives at the IGC, Elmar Brok, who was in Rome); modification of the statute of the European System of Central Banks and of the European Central Bank and appointment of the members of the ECB Executive Board (see below); the "Lamfalussy" procedure; the simplified procedure for amending the statutes of the European Investment Bank; and provisions proper to the countries of the euro zone. After this round the table discussion, Franco Frattini expressed the view that the appreciation of Member States was on the whole positive and said that the Presidency will endeavour (mainly at Portugal's request) to ensure that the principle of equality between Member States is reflected more in the texts. On the subject of the preamble, several delegations (Greece, France, Belgium, Denmark) reaffirmed their opposition to a reference to Christian heritage).

The Italian proposals are "in part really intelligent", the Austrian Foreign Minister Benita Ferrero-Waldner told the press, while mitigating her praise by saying: "unfortunately", there is no significant improvement of proposals on the composition of the Commission, a "very, very important matter" for Austria. It is important that the question of rotating presidencies should be "anchored in the Treaty", she also insisted, recalling that Austria will be presiding the EU Council during the first half of 2006. Ms Ferrero-Waldner is "very pleased" with the formulation on the Foreign Minister. She said that they want a minister, not a bureaucrat, and the "title is there". She again insisted on a problem that is dear to Austria and on which the Convention has reached an "absolutely insufficient, fragmentary" result, while Vienna wants clarity and transparency.

Friday's working lunch was on the justice and home affairs chapters, while the sitting, which began late on Friday afternoon was on all the other chapters concerning Union policies (social policy, tax provisions, cohesion, transport, research, energy, health, sport, tourism), but also on the Constitution's simplified revision procedure proposed by the Presidency.

The simplified revision proposal mainly pleases the European Commission, it was confirmed by Spokesperson Stefaan de Rynck when speaking to the press (while the Austrian Foreign Minister, Benita Ferrero Waldner, told the press this suggestion seemed to be "problematical"). Other suggestions made by the Presidency which, the Commission believes, are a move forward, are that concerning the Foreign Minster and that aimed at introducing qualified majority vote in some cases in CFSP. The latter, remarked Michel Barnier, according to his spokesperson, is "quite audacious". Commissioner Barnier, however, deplored the fact that the Presidency's document had taken steps backward compared to the draft Convention, mainly on security and defence matters ("structured cooperation is being denatured"), justice and home affairs (we are "touching the balance established by the Conventon") or State aid (the new Article 56 could open the door to excessive "flexibility" toward the regions affected by geographical or demographical problems).

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