24 April Industry Council

Date: 01/05/1997

INDUSTRY ministers agreed in principle to give the European Commission greater powers to vet large cross-border mergers and joint ventures in the EU. The UK, the last country holding out against a compromise package of measures, dropped its opposition at the meeting. Changes to the current merger regulation rules will allow the Commission to scrutinise a fresh category of mergers. At the moment, the Commission can investigate all cases where the world-wide turnover of the companies involved exceeds 5 billion ecu and where at least two of the companies have a turnover in the EU of more than 250 million ecu. A new category of deals will be added where at least three EU merger regulators must be notified about a case and where the firms' combined world-wide turnover is more than 2.5 billion ecu. In addition, the companies must have a combined turnover of at least 100 million ecu in a minimum of three EU countries, with two of the companies having a turnover of at least 25 million ecu in each of the three. Competition Commissioner Karel van Miert said the changes would add around ten cases a year to the 125 mergers dealt with annually. This new arrangement is a second-best solution for the Commission, which originally called for thresholds to be cut.

COMMISSION proposals to clear around 1.5 billion ecu in aid to shipyards in Germany, Greece, and Spain received the necessary qualified majority support from ministers, despite opposition from the three Nordic countries. Ministers also decided the EU should continue its general shipbuilding aid regime for a further year or until the US agrees to take part in a global accord on cutting aid in the sector.

MONITORING of the effects of past aid allocations to the steel industry found no causes for concern, Van Miert reported. But the Commissioner took a tougher line on overall levels of support after the Commission's fifth survey of state aid, covering 1993 and 1994, showed that the trend towards lower payments had halted and that there was a worrying increase in one-off aid payments to individual firms. Van Miert said the Commission would move to shake up state aid procedures under the Luxembourg presidency of the EU in the second half of this year. Ministers called on the Commission to report on how far structural policies and regional aid were causing companies to move within the Union.

MINISTERS agreed to hold an annual debate on competitiveness based on regular reports from the Commission, national governments, international organisations and industry, These bench-marking exercises are aimed at gauging the impact and effectiveness of specific Commission actions.

INFORMATION and communication technology industries are facing increased global competition and, as a result, the EU needs to focus on key policies such as research and development, standardisation, the internal market, support for small and medium-sized businesses, education and training, and access to global markets. Ministers called on the Commission to continue analysing the state of the industry and to come up with ideas for further action.