Will work resume when old guard lose their jobs?

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Series Details Vol.12, No.12, 30.3.06
Publication Date 30/03/2006
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Date: 30/03/06

Last week 25 of Europe's most powerful people got together for nearly a whole day to discuss such pressing issues of state as the length of time needed to register a new business or how much of Europe's energy supply should come from agricultural.

Meanwhile on the streets of Paris riot police battled with students over an economic reform designed to lower France's high level of youth employment. It was ostensibly the sort of measure that EU leaders were supposed to be debating as part of their discussions on boosting competitiveness, economic growth and job creation. But the concerns of the real world or even of the realm of day-to-day politics seemed strangely absent from the summit's talks.

Over recent years the spring summit with its focus on economic issues and the Lisbon Agenda in particular has tended to be a stocktaking exercise with few new initiatives to speak of.

Even so, the main achievement of last week's meeting was managing to avoid a row among EU leaders over economic patriotism.

The summit avoided descending into mutual recrimination thanks to the intrusion of Italian electoral politics into the meeting.

The Dutch had been due to co-sign a letter by Italian Finance Minister Giuliano Tremonti condemning economic patriotism. But Prime Minister Jan Peter Balkenende pulled out, not wanting to be seen collaborating with Silvio Berlusconi's government after an Italian minister likened Dutch euthanasia laws to Adolf Hitler's ideas.

On other areas too, leaders ducked a full-on argument about the merits of open markets versus protectionism with only the Dutch (with some support from the UK and some Central and Eastern European countries) calling on the European Commission to present a more ambitious version of the services directive than the one agreed by the European Parliament in February.

Speaking at the post-summit press conference, Austrian Chancellor and European Council President Wolfgang Sch�ssel claimed that in ten years' time the summit would be remembered for launching work on a common EU energy strategy.

European Commission President Jos�anuel Barroso defended himself against allegations that the Commission lacked ambition and was only presenting ideas it knew member states would wear in advance. He made no apologies for his approach, saying he preferred to see leaders backing most of his proposals rather than being out on his own with a set of plans no-one else agreed with.

He pointed out that EU leaders had endorsed 20 of the 30 or so points of the Commission's energy Green Paper.

But Barroso failed to win support for key elements of the Green Paper such as setting up a European-wide regulator or moving to an EU system for energy stocks management. German Chancellor Angela Merkel's opposition to a new EU regulator ensured the idea failed to make it into the summit conclusions.

Yet the lack of real concrete progress at the summit, even on the energy issue, begs the question of whether the Commission can find a new sense of purpose and direction.

The reality is that the EU, while not in complete paralysis following the rejection of the EU constitution by French and Dutch voters, finds itself in a crisis of confidence. Avoiding rows about economic patriotism is taken as a success simply because a full debate about the direction of EU economic policy would only produce divisions and ill feeling.

While the Union finds itself becalmed, that period will not last forever. Over the next 12 months there will be a change of political leadership in many key EU capitals which could help the Union regain its lost momentum.

Already in April, Italian voters look set to replace Berlusconi with a centre-left coalition under Romano Prodi, who, although he has his faults, cares about the EU and knows how it works. Jacques Chirac, who provided the closest thing to entertainment at the summit by storming out when a countryman addressed EU leaders in English, will be gone next year with either Nicolas Sarkozy or a Socialist - perhaps S�l� Royal - taking his place.

Both Prodi and Sarkozy have plans to restart their countries' poor economic performance, address the lack of growth and lost competitiveness.

While this summit was ostensibly about growth and employment, the real stimuli the EU needs may not come until some of the summit's participants are looking for new jobs themselves.

Energy - what was agreed

  • Adoption of priorities action plan at 2007 spring summit
  • Regular strategic energy review to Council
  • Completion of internal energy market (opening of market for all consumers by mid-2007 while accepting special circumstances for some small and isolated member states)
  • Develop priority interconnection plan (including contributions towards 10% target of interconnections)
  • Increasing diversification through development of infrastructure
  • Identify priorities for upgrading and construction of new infrastructure for security of energy supply
  • Work on a single European grid
  • Enhance co-operation between regulators and system operators
  • Increase transparency on oil and gas markets
  • Promote energy research funding
  • Develop energy efficiency action plan for aim of saving 20% of energy by 2020
  • Develop long-term renewable energy roadmap (target share of energy 12% by 2010, 15% by 2015, use of biofuels 8%)
  • Promote biomass use
  • Renew efforts on energy efficiency (action plan by mid-2006)
  • Review emissions trading scheme
  • Develop common EU external energy policy
  • Spread internal market through energy community treaty for south-east Europe
  • Develop common approach to external crises
  • Develop new and improve existing energy dialogues with major producing and consuming countries
  • Work on integrated framework for EU-Russia energy relations (aim for ratification by Russia of Energy Charter and conclusion of transit protocol)

Energy - what was NOT agreed

  • European regulator
  • European Centre for Energy Networks
  • Call for more effective unbundling

Economic reforms - what was agreed

  • Company start-ups: member states should establish by 2007 a one-stop shop for setting up a company quickly and simply. Average time to set up a business should be reduced to one week. Recruitment of a first employee should not involve more than one public administration point
  • Youth employment: early school leaving to be reduced to 10% by 2010. At least 85% of 22-year olds should have completed upper secondary education. By end-2007 every young person who has left school and is unemployed should be offered a job, apprenticeship, additional training or other employability measures within six months and within four months by 2010
  • European Institute for Technology (EIT): "Council recognises that an EIT will be an important step to fill gap between higher education, research and innovation." The European Research Council should have a guiding role. Proposal by mid-June
  • REACH directive: aim of final agreement by year-end
  • European Pact for gender equality adopted
  • Services directive: Commission to present proposal based "largely" on Parliament's first reading
  • Roaming charges: Council "notes importance for competitiveness of roaming charges"Company start-ups: member states should establish by 2007 a one-stop shop for setting up a company quickly and simply. Average time to set up a business should be reduced to one week. Recruitment of a first employee should not involve more than one public administration point
  • Youth employment: early school leaving to be reduced to 10% by 2010. At least 85% of 22-year olds should have completed upper secondary education. By end-2007 every young person who has left school and is unemployed should be offered a job, apprenticeship, additional training or other employability measures within six months and within four months by 2010
  • European Institute for Technology (EIT): "Council recognises that an EIT will be an important step to fill gap between higher education, research and innovation." The European Research Council should have a guiding role. Proposal by mid-June
  • REACH directive: aim of final agreement by year-end
  • European Pact for gender equality adopted
  • Services directive: Commission to present proposal based "largely" on Parliament's first reading
  • Roaming charges: Council "notes importance for competitiveness of roaming charges"

Article reviews the 2006 Spring European Council, taking place in Brussels, 23-24 March 2006. Author suggests that leaders were doing everything to avoid an open row over economic patriotism. Article lists details on the items agreed including in the field of energy policy.

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