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EU Update

EU Update. Dr Leonard Mizzi Director General Malta Business Bureau Brussels. WHAT IS THE MALTA BUSINESS BUREAU?. INITIALLY OFFICE OF MALTA CHAMBER OF COMMERCE AND ENTEPRISE AND MALTA FEDERATION OF INDUSTRY IN BRUSSELS SET UP IN OCTOBER 1996

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EU Update

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  1. EU Update Dr Leonard Mizzi Director General Malta Business Bureau Brussels

  2. WHAT IS THE MALTA BUSINESS BUREAU? • INITIALLY OFFICE OF MALTA CHAMBER OF COMMERCE AND ENTEPRISE AND MALTA FEDERATION OF INDUSTRY IN BRUSSELS • SET UP IN OCTOBER 1996 • INCLUSION OF MALTA HOTELS AND RESTAURANTS ASSOCIATION IN 2004 • POSSIBLE INCLUSION IN 2006 – MEA AND GRTU

  3. MALTA BUSINESS BUREAU-contd • 1996-1998 – MALTA’S EU APPLICATION FROZEN • 1998-2002 – ACCESSION NEGOTIATIONS • 2002-3 – EU REFERENDUM • 2004-5 – MALTA’S ACCESSION AND POST-ACCESSION PHASE • 6 MAY 2005 CONFERENCE –QUO VADIS?

  4. MALTA BUSINESS BUREAU - contd • REPRESENTATION OFFICE TO UNICE AND EUROCHAMBRES AND SINCE 2005 TO HOTREC • EU LOBBYING AND ADVOCACY • MONTHLY NEWSLETTERS - 2 • ORGANISATION OF FAMILIARISATION VISITS TO BRUSSELS • EU INFORMATION MEETINGS IN MALTA - 15 per annum • POLICY POSITIONS - 3-5 per annum • WEBSITE AND MEDIA

  5. ISSUES OF TOPICAL INTEREST AT A EU LEVEL TODAY • EU CONSTITUTION • FUTURE FINANCIAL PERSPECTIVES • A YEAR SINCE EU ENLARGEMENT _ WHERE IS THE EU HEADING? WHAT ARE THE LIMITS OF THE EU? Romania, Bulgaria, Turkey, Croatia, Other Balkan countries, Ukraine? • SERVICES DIRECTIVE • NEW COMMISSION AND NEW EUROPEAN PARLIAMENT - INTERPLAY OF ROLES?

  6. OTHER TOPICS -contd • RENEWED LISBON STRATEGY • EU-US RELATIONS – TRANS-ATLANTIC BUSINESS dialogue • HK MINISTERIAL CONFERENCE IN DEC 2005 – WTO • EURO-MEDITERRANEAN AND NEW NEIGHBOURHOOD POLICY • HOW TO DEAL WITH GLOBALISATION? IN PARTICULAR CHINA AND INDIA?

  7. SOCIAL AFFAIRS FRONT • WORKING TIME DIRECTIVE – OPT OUT AND REFERENCE PERIOD TO CALCULATE MAXIMUM WEEKLY WORKING WEEK • INTEGRATED GUIDELINES – EMPLOYMENT POLICIES; NEW FORMS OF WORK ORGANISATION; flexi-security • EDUCATION AND TRAINING DUE TO RESTRUCTURING • ECONOMIC MIGRATION AND THE CHALLENGES OF DEMOGRAPHICS • GENDER EQUALITY • SOCIAL DIALOGUE

  8. INDUSTRIAL AFFAIRS • REACH (chemicals policy) • CLIMATE CHANGE • CII – COMPUTER IMPLEMENTED INVENTIONS • RENEWABLE ENERGY • TRANSPORT POLICY –TENs; PORT SERVICES; • STATE AIDS – low cost airlines and Reform of State aid

  9. ECONOMIC AND FINANCIAL AFFAIRS • REFORM OF THE STABILITY AND GROWTH PACT • TAXATION – should one move to a harmonised tax system? VAT/Corporate Tax • ROLE OF THE EUROPEAN CENTRAL BANK • THE EURO (AND THE US DOLLAR) • FINANCING OF DEVELOPMENT AID –levy on air tickets (how to fund development aid?) • FINANCIAL SERVICES • SAVINGS TAX DIRECTIVE

  10. RENEWED LISBON STRATEGY • WHAT IS THE LISBON STRATEGY? • WHY IS THERE THE NEED FOR A RENEWED STRATEGY? • WHAT WAS DECIDED IN MARCH 2005? • INTEGRATED GUIDELINES APRIL 2005 • NATIONAL REFORM PROGRAMMES - AUTUMN 2005

  11. MARCH 2005 CONCLUSIONS • REFOCUS PRIORITIES ON GROWTH AND EMPLOYMENT • THE THREE STRANDS OF THE RELAUNCH : • KNOWLEDGE AND INNOVATION • AN ATTRACTIVE AREA IN WHICH TO INVEST AND WORK • SOCIAL COHESION

  12. LISBON STRATEGYINTEGRATED GUIDELINES • MACROECONOMIC GUIDELINES • Secure economic stability • Safeguard economic sustainability • Promote efficient allocation of resources • Cohesion – Macroeconomic and structural policies • WAGES/Productivity • Dynamic and well-functioning EMU

  13. Microeconomic guidelines • EXTEND AND DEEPEN INTERNAL MARKET – IS THE INTERNAL MARKET PROJECT COMPLETED? Goods yes, services no • ENSURE OPEN AND COMPETITIVE MARKETS – utilities (gas and electricity – telecoms yes) • CREATE A MORE ATTRACTIVE BUSINESS ENVIRONMENT – better regulation/administrative simplification/Charter for Small Enterprise • ENTREPRENEURIAL CULTURE:RISK TAKING (EU-US difference) – Venture capital • CROSS BORDER PROJECTS AND TRANS-EUROPEAN NETWORKS • INCREASE AND IMPROVE INVESTMENT IN R&D • SUSTAINABLE DEVELOPMENT STRATEGY • STRONG INDUSTRIAL BASE – DEBATE ON DE-INDUSTRIALISATION AND SECTOR APPROACH TO CHAMPIONS

  14. EMPLOYMENT GUIDELINES • FULL EMPLOYMENT • LIFECYCLE APPROACH TO WORK • INCLUSIVE LABOUR MARKET, ESPECIALLY FOR MARGINALISED GROUPS • INVESTMENT IN HUMAN CAPITAL • ADAPTATION OF EDUCATION AND TRAINING SYSTEMS

  15. ECONOMIC GOVERNANCE • NEW PARTNERSHIP WITH MEMBER STATES • SIMPLIFICATION IN TERMS OF POLICY SETTING AND REPORTING WITHIN A SINGLE NATIONAL PROGRAMME • THREE YEAR CYCLE – 2005-2008 • ECONOMIC, SOCIAL AND ENVIRONMENTAL - EQUAL RELEVANCE?

  16. Economic Governance - contd • MEMBER STATES SHOULD WORK ON A FORWARD LOOKING AGENDA – a 3 year strategy TO DELIVER GROWTH AND JOBS • OWN NEEDS AND SPECIFIC SITUATION ANALYSIS • LINK TARGETS WITH BUDGETARY RESOURCES – FUTURE FINANCIAL PERSPECTIVES 2007-2013 • ROLE OF SOCIAL PARTNERS AND NATIONAL PARLIAMENT • ANNUAL PROGRESS REPORT – END JANUARY 2006 • EUROPEAN COUNCIL MARCH 2006

  17. ECONOMIC GOVERNANCE - contd • FOSTER PUBLIC DEBATE ON THE IMPLEMENTATION OF THE LISBON STRATEGY • RELEVANCE FOR ECONOMY • RELEVANCE FOR REGIONS • RELEVANCE FOR FIRMS • RELEVANCE FOR SOCIAL PARTNERS • CHAMBERS OF COMMERCE

  18. EU CONSTITUTION – as at June 6th • RATIFIED BY 10 MEMBER STATES • REJECTED BY 2 MEMBER STATES • STILL TO BE RATIFIED BY 13 STATES • QUO VADIS? • DECISION TO BE TAKEN BY HEADS OF STATE AND GOVERNMENT THIS WEEK AT EUROPEAN COUNCIL • VARIOUS OPTIONS POSSIBLE • WHAT IF PROCESS IS HALTED?

  19. Key Sections of EU Constitution • TITLE I - DEFINITION AND OBJECTIVES OF THE UNION • TITLE II - FUNDAMENTAL RIGHTS AND CITIZENSHIP OF THE UNION • TITLE III - UNION COMPETENCES • TITLE IV - THE UNION'S INSTITUTIONS AND BODIES • CHAPTER I - THE INSTITUTIONAL FRAMEWORK • CHAPTER II - THE OTHER UNION INSTITUTIONS AND ADVISORY BODIES • TITLE V - EXERCISE OF UNION COMPETENCE • CHAPTER I - COMMON PROVISIONS • CHAPTER II - SPECIFIC PROVISIONS • CHAPTER III - ENHANCED COOPERATION • TITLE VI - THE DEMOCRATIC LIFE OF THE UNION • TITLE VII - THE UNION'S FINANCES • TITLE VIII - THE UNION AND ITS NEIGHBOURS • TITLE IX - UNION MEMBERSHIP

  20. MAIN PROVISIONS • CHARTER FOR FUNDAMENTAL RIGHTS • CLARIFICATION OF ROLES OF PARLIAMENT, COUNCIL AND COMMISSION • COMMISSION – LEGISLATIVE INITIATIVE, EXECUTIVE FUNCTION AND REPRESENTATION ABROAD • CO-DECISION -95 per cent of all laws (Parliament and Council) • Union Minister of Foreign Affairs

  21. MAIN PROVISIONS - contd • MAXIMUM NO OF SEATS IN EP – 750 from current 732 • MINIMUM – 6 and MAXIMUM – 96 (to be decided before European Elections 2009) • UNTIL 2014 – ONE COMMISSIONER PER MEMBER STATE – is this feasible? THEN 2/3RDS OF NUMBER OF MEMBER STATES • DOUBLE MAJORITY OF MEMBER STATES AND PEOPLE – 55 per cent of Member States representing 65 per cent of population is QUALIFIED MAJORITY • EXTENSION OF QUALIFIED MAJORITY AND CO-DECISION • UNANIMITY IS STILL REQUIRED IN: • Taxation • Own resources and financial perspectives – UK rebate included • Parts of social security • Parts of foreign and security policy

  22. Conclusion • Is this Constitutional Treaty a better document than previous Treaties? • WHY DID THE FRENCH AND DUTCH SAY NO? WERE ISSUES NATIONAL OR EUROPEAN? • UNEMPLOYMENT AND DE-LOCALISATION • SERVICES DIRECTIVE • A STRONG EURO AND A PERCEIVED LOWER LIVING STANDARDS • PROTEST VOTE AGAINST NATIONAL GOVERNMENTS • FEAR ABOUT EU ENLARGEMENT, especially from CEECs –POLISH PLUMBERS AND CONSTRUCTION WORKERS; FARMING THREATS • ULTRA-LIBERALISM?????????? • Anti-Social Europe???????

  23. WHAT DO YOU THINK ABOUT THE CONSTITUTION • WHERE SHOULD THE EU BE HEADING? Widening versus Deepening? • SHOULD VETO RIGHTS BE MAINTAINED, say on taxation???? SHOULD THERE BE A HARMONISED TAX OR NOT? • IS EUROPE DISCONNECTED FROM WHAT CITIZENS AND BUSINESSES WANT? • ARE THE INTERESTS OF THE FOUNDING MEMBERS SAFEGUARDED? • What’s in it for business and Chambers of Commerce?

  24. FUTURE FINANCIAL PERSPECTIVES 2007-2013 • The debate on the EU's revenue and expenditure ceilings for the period 2007-2013 (the 'financial perspective') has turned out to be a major battle between the Commission and the 'net contributors' to the EU budget. The Commission has asked for a multi-annual budget of nearly 1000 billion euros (1.14% of EU GNI)  between 2007-2013, but six member states want to 'cap' the EU's expenditures to 1% GNI. Another difficult issue is the possible replacement of the UK 'rebate' by a generalised correction mechanism.

  25. FINANCIAL PERSPECTIVES • WHO ARE THE SIX NET CONTRIBUTORS? France Netherlands Austria Sweden Germany and UK ROLE OF THE EUROPEAN PARLIAMENT: The Parliament's temporary committee on the financial perspective adopted its report on 11 May 2005 insisting that spending over the next financial perspective should be limited to 1.07% of EU gross national income.

  26. FINANCIAL PERSPECTIVES • LEGISLATIVE PROPOSALS WERE READY IN JULY 2004 • DECISION TO BE TAKEN THIS WEEK? • IF NOT – major delays in disbursements of funds post 2006 due to UK/Austria stance • COMPLICATED BY EU CONSTITUTION _ WHAT IS THE FRANCO-GERMAN DUO SAYING • ELECTIONS IN GERMANY IN SEPTEMBER 2005

  27. FINANCIAL PERSPECTIVES – main highlights • More targeted on EU‘s strategic priorities – Lisbon and Goteborg • More concentrated on least favoured areas – Objective 1 as at 7th April 2005 • Latvia – 43 Luxembourg – 223 (EU25-100) • More decentralised – simpler, more transparent and more efficient implementation

  28. FINANCIAL PERSPECTIVES - contd • CONVERGENCE OBJECTIVE – ERDF, ESF AND COHESION FUNDING 79 per cent • REGIONAL COMPETITIVENESS AND EMPLOYMENT – ERDF and ESF 17 per cent • EUROPEAN TERRITORIAL CO-OPERATION - ERDF 4 per cent

  29. FINANCIAL PERSPECTIVES • CONVERGENCE OBJECTIVE: • < 75 per cent of GDP (67 per cent) • Cohesion Fund – 90 per cent of EU average • Statistical effect regions – 8 per cent • 0.5 per cent to outmost regions • Corporate Taxation and Future Financial Perspectives?

  30. FINANCIAL PERSPECTIVES - Conclusion • Luxembourg’s new negotiating box – 19 May less money for LISBON AGENDA • CAP – no flexibility? • Is the UK’s rebate still justified? UK does not benefit from CAP – compared to France and Germany – and Regional Funds; • Large gaps in enlarged EU

  31. THE SERVICES DIRECTIVE • The objective of the Services proposal, adopted by the Commission in January 2004, is to achieve a genuine Internal Market in services by removing legal and administrative barriers to the development of service activities between Member States. The proposed Directive would guarantee service providers more legal certainty if they want to exercise two fundamental freedoms (freedom of establishment and freedom to provide services) enshrined in the EC Treaty. This would make it easier for businesses to provide and use cross-border services in the EU, thus increasing cross-border competition in service markets, bringing down prices and improving quality and choice for consumers. The Directive will also strengthen the rights of users of services, for instance by enshrining the right of non-discrimination.

  32. SERVICES DIRECTIVE - contd • Today we operate in an Internal Market with 28 different sets of legislation – EU25 plus EEA3 – ICELAND, NORWAY AND LIECHTENSTEIN • Services sector accounts to 70 per cent of GDP as manufacturing shrinks • 96 per cent of net job creation originates from the services sector • Reduction of existing barriers by more than 50 per cent • Reduction of prices that will benefit suppliers and consumers

  33. SERVICES DIRECTIVE/Benefits for Service Providers and Consumers SERVICE PROVIDERS • Accelerate authorisation process for EU companies • Opportunity to test a market without the establishment burden CONSUMERS • Larger choice of service • Enhanced quality and better information

  34. Misconceptions • The Directive leads to social dumping: The Directive foresees a general derogation from the COO principle for all matters covered by the posting of workers directive. The host country is in charge of controlling compliance with the posting of workers directive. Need for clear definition of notion of establishment to avoid « shell companies » or « mail box firms »

  35. MISCONCEPTIONS-contd • The proposed Directive would lead to a race to the bottom of public health, safety and environmental standards. The proposed directive already provides in derogations from the COO principle for a range of safeguards regarding public order, public safety or public health

  36. MISCONCEPTIONS (3) • It would lead to the privatisation of public services. The Directive merely intends to facilitate and simplify the development of service activities in those areas which are already open to competition. It is up to MS to decide the areas which would/would not be open to competition

  37. MISCONCEPTIONS (4) • It would lead to legal uncertainty and legal dumping: National penal laws always prevail. Problem relates to contract law.

  38. MISCONCEPTIONS (5) • Undermining of professional qualifications: It excludes regulated professions covered by mutual recognition of qualifications.

  39. MISCONCEPTIONS (6) • Dismantling of health and social security systems: It is the responsibility of Member States to decide whether private operators may provide services funded by the social security system. The proposed directive should ensure compatibility with Regulation 1408/71 on co-ordination of social security systems

  40. MISCONCEPTIONS (7) • COO principle would lead to the introduction of uncontrolled providers: Need for adequate supervision; Sector-specific harmonisation risks taking too much time – we are not dealing with goods but with services.

  41. MISCONCEPTIONS (8) • COO is a dangerous precedent: It applied for Free Movement of Goods for a long time plus It has been adopted for: • Television sans Frontieres Directive • E-Commerce Directive • Electronic Signatures • Data Protection

  42. MISCONCEPTIONS (9) • It covers ALL services: It is important to distinguish between: • Services excluded from the Scope of the Directive; • Services excluded from COO principle, and • Services covered by COO principle – business-to-business relations.

  43. WHAT NEXT? COMMISSION HAS NO INTENTION TO WITHDRAW PROPOSAL CURRENTLY AT EP – major changes expected to COO and sectors excluded March Competitiveness Council - The Presidency welcomed the clear statement that no new proposal would be presented by the Commission. They endorsed the suggestion that health and social services of general interest be excluded from the proposal. They agreed that the current text needed to be modified if it was to be adopted. Need for a constructive debate – very difficult post Referendum result in France Risk for renewed Lisbon strategy and lack of completion of Internal Market

  44. OVERALL CONCLUSION • EU 25 – soon to be 27 countries – is at the crossroads – Very difficult circumstances post Referenda results in France and NL • Financial Perspectives – Critical moment of truth • Future enlargement ? Romania and Bulgaria – despite them having signed Accession Treaty ? Turkey – Opening of accession negotiations in early October ? Croatia and the Balkans ? Ukraine

  45. CONCLUSION - cont • TENSE RELATIONSHIP BETWEEN COMMISSION AND EP –FALLOUT OF BUTTIGLIONE – WTD AND SERVICES • ROLE OF THE EU ON THE INTERNATIONAL SCENE – political and economic – WEAKENED? • UK Presidency – post 1 July – What role? • Tension between old and new member states? • Is the new Commission delivering – Major critique is the COMMUNICATING EUROPE strategy WHICH IS A KEY OBJECTIVE OF THE BARROSO COMMISSION • WHOSE ROLE IS COMMUNICATING EUROPE???

  46. CONCLUSIONS - contd • WHAT ROLE FOR CHAMBERS OF COMMERCE? ARE THE CHAMBERS ENGAGED IN THE DEBATE AT A NATIONAL/REGIONAL LEVEL? WHAT FORM OF LINKS EXIST WITH ENTERPRISES ON MAJOR DOSSIERS? REACH /SERVICES/CLIMATE CHANGE/CONSTITUTION/BETTER REGULATION/WTO LINKS with EUROCHAMBRES IN EU POLICY ELABORATION

  47. CONCLUSION DEBATE? How do you perceive EU enlargement? Positive, Negative, Neutral, Still too early to say?

  48. CONTACT DETAILS: Dr. Leonard Mizzi DIRECTOR GENERAL MALTA BUSINESS BUREAU AVENUE D’AUDERGHEM, 289 B-1040 BRUSSELS BELGIUM Tel: 003225026091 EMAIL: lmizzi@mbb.org.mt www.mbb.org.mt

  49. INFORMATION Do not hesitate to contact us for any EU updating you/your Chamber might require on a periodic basis. Those interested can also subscribe to our Monthly Briefing Newsletters

  50. Q&A QUESTION AND ANSWER SESSION THANKS FOR YOUR ATTENTION

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