20 September Transport Council

Date: 28/09/00

EU TRANSPORT ministers failed to agree a common strategy to tackle the problems caused by soaring oil prices at an emergency meeting in Luxembourg. The French presidency called the special meeting last week amid a storm of protest against high fuel taxes by lorry drivers and farmers which brought several major European cities to a virtual standstill. France decided to hold the talks in Luxembourg instead of Brussels due to fears that lorry drivers would try to set up new blockades and prevent ministers from attending.

THE purpose of the meeting was to discuss the impact of oil prices, which have soared to their highest levels since the Gulf War, on EU transport policy. After several hours of talks which began late on Wednesday and ended in the early hours of Thursday, ministers agreed to create a European forum where hauliers and government representatives could discuss problems facing the industry. Energy Commissioner Loyola de Palacio said the forum would be established sometime in the next few months. In a speech to the European Parliament's energy committee last week, the Spanish commissioner also stressed the importance of diversifying the Union's energy sources and looking at nuclear and renewable energies as viable alternatives to fossil fuels.

FRANCE failed to convince ministers to sign up to a draft joint declaration which called for the harmonisation of the widely divergent fuel tax policies of the 15 EU member states. A number of ministers criticised Paris for providing tax relief to truckers who blockaded French highways and cities in early September. The protest was followed by similar blockades in neighbouring countries.

Germany and the UK both argued against short-term tax relief, insisting it could cause distortions in the market. This view was echoed by De Palacio, who questioned the usefulness of these kinds of “knee-jerk reactions” to rising fuel prices. German Transport Minister Reinhard Klimmt criticised Paris for ignoring a pledge made this month by EU finance ministers not to lower taxes. “I do not believe it is right to ignore a decision that we took with the agreement of France,” he said after the meeting. De Palacio told ministers that member states had sent the “wrong signal” to OPEC through the tax reductions.

IN A statement released by France after the meeting, Paris called for policies which could ease traffic problems caused by oil price fluctuations in the future. These include finding ways to move more road freight onto rail, ensuring proper social protection for hauliers and encouraging competition officials to investigate cartels in the fuel-distribution sector. Commission anti-trust officials are meeting their national counterparts this week to discuss ways of combating anti-competitive behaviour in the sector. On the tax issue, the statement simply said the matter had been discussed, but it was best left to EU finance ministers to tackle.