Brussels, 24/05/2006 (Agence Europe) - Under the chairmanship of the Austrian ministers for the economy, Martin Bartenstein, education, science and culture, Elisabeth Gehrer and transport, Hubert Gorbach, the Competitiveness Council, meeting in Brussels on 29 and 30 May, will deal with cross-cutting questions related to the internal market on Monday, and "research" issues on Tuesday.
Services directive: On Monday, the Austrian Presidency will do all it can to ensure that the ministers reach a political agreement on the proposed directive on services in the internal market. Discussions will start over held in lunch, after which they will be public and may continue until late in the evening. Further to the last meeting of 24 May, which was held at ambassadors of the Member States level (Coreper), the Presidency will make a few changes to its compromise proposal, which it will submit to the delegations by the end of the week. The ministers will be asked to take position on the most political point of the legislative proposal, which are the delimitation of its scope of application and the provisions governing the cross-border provision of services. Berlin's attitude- which commentators believe may be behind the Parliamentary compromise- will be decisive, according to a Community source. On Wednesday, Coreper carried out "just one tour de table", during which the delegations had the opportunity to reiterate their position on the central point of the proposal, according to an expert close to the dossier. "A good majority of Member States believe that this compromise goes in the right direction", stated a Community source. "Germany appealed to the Member States for their support to the compromise", on the basis of the vote of the European Parliament and largely taken up by the Commission in its modified proposal, the source went on to explain, adding that no delegation had opposed the compromise.
The elements of the scope of application to be put to the ministers relate to notary services, social services and audiovisual services. France is a staunch defender of excluding notaries from the directive, but several delegations would be opposed to a derogation in principle for this profession. Earlier in the week, Germany is said to have made a proposal to clarify the exclusion of social services by dint of specific criteria. A reference to the recent Commission communication on social services of general interest, which uses criteria to define social services, may help to clarify the situation (see EUROPE 9180).
The Member States are set to enshrine the principle of freedom to provide services as per the Parliamentary compromise, and which will govern the cross-border provision of services. Questions remain on the scope of the derogation to the principle applied to services of general economic interest (SGEI). Basically, will the list of SGEI excluded from the principle of freedom to provide services be indicative or exhaustive? Furthermore, the creation of a public European register to list national restrictions on services provided by a company established in another Member State is featured clearly among the proposals of the Presidency. On Wednesday, the delegations "broadly supported" this idea, according to a Community source. The negotiations will continue to rally any delegations which see it as the source of an increased administrative burden and an instrument of control in the hands of the Commission.
If the ministers take leave of each other on Monday close to agreement but not quite able to achieve it, the Presidency may convene one further Competitiveness Council at the end of June.
The "services" directive aims to open up the internal market for services, whilst preserving the European social model, as called for by the European Council. In February, the EP voted on a compromise at first reading, which reduces the scope of application of the proposal and removes the principle of country of origin (see EUROPE 9133). In early April, the Commission presented a modified proposal taking up the main thrust of the Parliamentary compromise (see EUROPE 9167). At their meeting in Graz, the ministers marked their agreement on keeping the new structure of the directive (see EUROPE 9178). Since then, Coreper met on 12 and 17 May to prepare for the Council of 29 May (see EUROPE 9192 and 9196).
Consumer credit contracts: the "consumers" plank of the session will mainly be given over to an exploratory debate on the proposal aiming to modify directive 93/13/EC on consumer credit contracts, in order to create the conditions of a genuine internal market. The objective of this proposal is to guarantee a high level of consumer protection and to clarify European legislation by remodelling the three existing directives (87/102/EC, 90/88/EC and 98/8/EC). It is worth noting that the highly controversial proposed directive, which was presented in September 2002 to create a framework for consumer credit within the internal market by dint of new common rules and replace the completely outdated 1987 directive (87/102/EEC), met with the strong opposition of the European Parliament, which disapproved of the total harmonisation of national legislations. Two amended proposals by the Commission followed: one presented in November 2004 (EUROPE 8821), the other in October 2005 (EUROPE 9045), to make the final changes. The proposal on the table respects two principles: total harmonisation is the only way of establishing a genuine internal market for consumer credit, whilst guaranteeing a high degree of consumer protection, but flexibility must be ensured in the implementation of a number of proposals, whilst taking account of both the heterogeneity of the national markets and the national legislations, and of the objective of better regulation. For this reason, the text includes certain harmonised provisions, others which come under mutual recognition, and still others which remain under national competency. In order to facilitate the follow-up of work within the working group at the Council, the Austrian Presidency will call upon ministers to speak on three points: 1) the approach of the European Commission, based on the complete harmonisation of the legislations, combined with a mutual recognition clause; 2) the provisions on paying credit back early, given the diversity of existing mechanisms within the various Member States (some of them provide for specific obligations for the credit institutions, and others do not, which is why the Commission is proposing fines to be levied on borrowers who paid their credit back earlier than agreed, leaving a certain amount of flexibility for the Member States); 3) provisions allowing comparisons of credit contract offered in the various Member States, providing that these are concluded under the national rules applicable to contracts.
Furthermore, the Council will take note of a progress report on work underway dealing with the "consumer protection" plank of the proposal aiming to establish a Community action programme, for 2007-2013, in the fields of health care and consumer protection.
Sustainable development strategy - On the basis of a questionnaire drawn up by the Austrian Presidency, the Council will hold a political debate on the revision of the Union's sustainable development policy adopted at the Gothenburg Summit of 2001. The result of the debates of each configuration of the Council will constitute the basis of the overall revision of this strategy (EUROPE 9090). Of the six questions asked of the Member States in the Austrian Presidency's working document, three are specifically of interest to the Competitiveness Council: - does the revision of the sustainable development strategy take sufficient account of international competition and the risks of delocalisation which face European industry? ; - how can it be ensured that ambitious European standards for sustainable development and the environment are accepted multilaterally and on a large scale, or that the same rules are applied by all ?; - to what extent can a coherent policy provide a response to questions related to eco-efficiency? ; - how can protection against climate change and economic growth be reconciled?
Better regulation - The Council will take note of the state of play with progress made under the Austrian Presidency concerning the "Better Regulation" initiative launched in March 2005 by the Commission and will hold a public debate on this subject. The report presented by the Austrian Presidency will review the progress made in the implementation of the triennial plan to simplify existing legislation, which was adopted by the Commission last October (EUROPE 9056). The report also takes note of the conclusion, last March, of the screening exercise of legislation pending in the inter-institutional canal, an exercise which was kicked off last September (EUROPE 9036) and which led to the withdrawal of no fewer than 67 proposals pending. The Austrian Presidency urges the Commission to repeat this type of operation. Lastly, the Presidency will present a practical guide designed to steer the Council through its analysis of the impact assessments of any new legislative proposal put forward by the Commission.
Research: the ministers will continue the first-reading examination of the draft 7th framework programme for research and development (FPRD) for the period 2007-2013. Further to the adoption of the financial perspectives, they are invited to take position on the new breakdown of the budgetary envelope of 54.7 billion. The preparatory meetings showed that the Member States do not intend to challenge the breakdown proposed by the Commission (see EUROPE 9177 on the result of the informal meeting of Graz) and the adjustments proposed are minimal. This stems largely from sharing out the additional 300 million not yet distributed by the Commission. The Council is also likely to confirm its request to divide the "space and security" theme into two distinct priorities; as a similar request has been made by the Parliament, the Commission is likely to agree to this. France is expected to insist on the allocation, at least in the form of a footnote, of between 500 million and a billion EUR to guarantee the research funding facility to be set up by the EIB. Given the impact of this sum of money on the credits available at the start of the programming, it has been envisaged, in order to overcome certain misgivings, to assess the efficiency of this mechanism at the mid-term revision, before the remaining money is paid. As the envelope for the Euratom programme is largely dictated by international obligations stemming from the experimental thermonuclear fusion reactor project ITER, the ministers will have to approve the sums in question.
The ministers will also seek a common orientation on the participation rules governing the concrete functioning of the framework programme (administrative and financial details and rules on intellectual property, for example). Among the major changes to the Commission's proposal is the replacement of the various models to calculate the indirect costs with a single model allowing the same kind of fixed reimbursement. This proposal, which seemed at first sight to be moving towards the simplification called for by those in charge of projects, has been confronted with serious misgivings on the part of several Member States, the most virulent of them being Belgium. The extremely diverse nature of indirect costs (writing off the costs of using infrastructure, for example) makes them very difficult to assess and the Member States were concerned that they may lose out on a proportion of their refund, compared to the situation previously. The ministers are expected, therefore, to ask the Commission, which may agree to it, to bring in a rate which varies depending on the research activity in question. Removing additional costs previously eligible for reimbursement in their entirety is partly due to this problem with indirect costs. At the same time, the Commission is proposing to make 75% of costs borne by SMEs and public entities under a research project eligible (instead of 50% traditionally, which remains the figure for large companies) and up to 100% for exploratory research projects selected by the future European Research Council.
Under any other business, the Presidency will report back to the ministers on the results of the conference of 19 and 20 April in Graz on the GMES space observation programme for the environment and security. The Commission will take stock of the state of play with the ITER project (see other article) and will present the contents of its recent communication on the modernisation of universities.
European space policy: the Commission will present the Council with a progress report on developments with the European space policy and its roadmap. As the Austrian Presidency does not have sufficient substance to bring the matter before the Space Council, which is co-chaired by the Council of the EU and the European Space Agency (ESA), the fourth meeting of this Council (after the third Space Council held on 28 November 2005) will be held under the German Presidency, in the first half of 2007.
Any other business - The Commission will inform the Council of the competitiveness poles aiming to promote industrial growth and reinforce the regions of Europe. Furthermore, the Austrian Presidency will present the Council with the results of the conference held in Vienna on 30 and 31 March on "REACH at second reading".