Brussels calling, Belgian EU Presidency, Business Newsletter, 20/09/2010, Issue 3

8/8/2019 Brussels calling, Belgian EU Presidency, Business Newsletter, 20/09/2010, Issue 3

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Belgian EU Presidency Business Newsletter

Brussels calling

20/09/2010 Issue 3

European leadership in a multipolar world: awake-up call!

The lack of a common European strate-gy towards global developments has

hampered the EU to fully exercise itseconomic and potential political weight

on the international scene. Therefore,

we should welcome Herman VanRompuys initiative to strengthen theEUs relations with its strategic partners,

especially the emerging powers.

Although current world players mighthave different views on what the world

should be, economically spoken, they become more and

more interdependent. All of them are facing the same glo-bal challenges, for example, climate change, security of

energy supply and financial stability. If Europe wants to playan important role in a multipolar world, it should develop

sine die a clear and sound strategy towards other worldplayers. In this respect, strategic partnerships are key.

The Copenhague United Nations Climate Change Conferen-

ce showed once more that speaking with one voice is theonly option for the EU. We Europeans should learn from

this, if we want to count in a globalized world. Furthermore,the economic dimension of EU foreign policy should be ad-

dressed urgently. Strengthening partnerships with the Uni-ted States, Russia, India, Japan, Brazil and, especially China

will generate enormous economic returns for the EU interms of jobs and growth. It is essential to target these mar-kets by pursuing an ambitious international trade policy and

by establishing an economic division in the European Exter-nal Action Service. The latter should provide foreign com-

mercial services in key embassies and work closely with busi-ness, especially to promote European industries and servi-

ces and to assist foreign investors in finding European part-ners. Moreover, the EU should give strategic bilateral dia-

logues a more coherent negotiating structure. The upco-ming EU Business Summits with Asia (October 4), China

(October 6) and India (December 10), organized in theframework of the Belgian Presidency, are a unique opportu-

nity to develop strategic partnerships with these players.

Economic and Financial Affairs (ECOFIN)Council & Eurogroup meeting (September 7,2010)

On September 7, the Economic and Financial Affairs Council(ECOFIN) and the Eurogroup assembled in Brussels for their

monthly meeting. The day before, on September 6, the

Finance Ministers attended a meeting of the Task Force on

economic governance chaired by the President of theEuropean Council, Herman Van Rompuy.

The Task Force held a discussion on which kind ofsanctionscould be imposed on a member state that does not

comply with the criteria set out in the Stability and

Economic and Financial Affairs

Editorial

BrusselsCalling - 1 -

CONTENTS Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Economic and Financial Affairs . . . . . . . . . . . . . . . . . . . . . . . 1

Foreign Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Events & meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

In the spotlight State of the Union . . . . . . . . . . . . . . . . . 5

General Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

In the spotlight Herman Van Rompuy at FEB . . . . . . . . 7

European Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Pension conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Links . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Team presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Diane Struyven,Director of the European

Department of the FEB


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Growth Pact (SGP) or in the excessive imba-

lance procedure. The latter is a series of recom-mendations that can be made based on a range

of key indicators regarding competitiveness.Thedebate was focused specifically on getting a clear

view on what could and could not be achieved

within the legal framework of the Lisbon Trea-

ty. A first conclusion was that, in terms of enfor-cement mechanisms, it would be legally possibleto financially sanction Eurogroup members,

whereas this would not be the case for non-mem-bers. Secondly, making the allocation of EU sub-

sidies conditional on the state of public financescould be possible as well. In addition, Eurogroup mem-

bers could also develop new sanctions. In order to lead tomore automaticity, this might

sometimes involve a reversedvoting procedure. This means

that, unless blocked by aqualified majority, sanctions

would be approved. Thirdly,as stated in the Lisbon Treaty,

setting minimum qualityrequirements for national

budgetary frameworks couldbe a possibility as well. Afourth and final conclusion of

the discussion was that, sincedebt and deficit are equal cri-

teria in the SGP, another possibility would be to initiate an

excessive deficit procedure for countries with a debtratio of over 60% of which the national debt does notdecrease quickly enough.

In the next few weeks, the Task Force will focus on the

concretization of the agreements already rea-ched to facilitate stronger economic coordina-

tion in the EU. The results of this will be includedin the final report of the Task Force which will

be presented to the European Council onOctober 28-29. On September 16, at an informal

meeting of the European Council, Herman VanRompuy has again briefed EU leaders on the

progress of the Task Force. In a reaction, all theHeads of State or Government said they want tocontinue the work and to keep the momentum.

Regarding the ECOFIN Council itself, the main

result was the endorsement of the introductionof the so-called European semester as from 2011 (see

boxed text). In order to reinforce the implementation ofthe EUs SGP, the European semester is aimed specifically

at improving economic policy coordination, strengthen-ing budgetary discipline, growth and macroeconomic

stability. As specific sanctions for countries ignoring the

Councils and Commissions advice are still to be discussed,

the Commission will present a proposal for quasi-automa-tic sanctions on September 29. The creation of the Euro-

pean semester is one of the first concrete results of thework of the Task Force on economic governance chaired

by Herman Van Rompuy agreed upon by the Council.

The endorsement of the agreement reached on Septem-ber 2 by the EU triangle the Council of the EU, the Eu-ropean Commission and the European Parliament to

reform financial supervision in the EU undoubtedly isanother key point decided upon during last weeks

ECOFIN Council meeting. The establishment of four newsupervisory bodies is the first important decision under

the Belgian Presidency of the EU. According to InternalMarket Commissioner Michel Barnier this is a crucial

milestone. The agreement, sets out the establishment ofa European Systemic Risk Board (ESRB) for macro-pru-

dential supervision and three European SupervisoryAuthorities (ESAs) for micro-prudential supervision (seeboxed text). The supervisory bodies, which will be farmore important than originally foreseen, will have the po-

wer to suspend trading of certain products under certaincircumstances. The deal was not struck easily however.

On the one hand, the European

Parliament feared that if tooweak, the bodies would not have

the power to act effectively. Themember states on the other hand,

feared losing sovereignty in one

of the core policy areas for anational government. In the end,much to the frustration of MEPs,

the member states obtained theright to appeal the decisions of

the new bodies. In addition, directoversight of companies is still left

with national supervisors. The newbodies can only coordinate actions. As a result, even

though being an important step in redefining financialsupervision in the EU, there is some doubt as to how

effective these bodies will actually be. On September 20-23, at the Parliaments plenary session, the establishmentof the ESRB and the three ESAs should receive a final go-

ahead. The new bodies are expected to be operational

The European semester will consist ofa six-month cycle which will startevery year in March. The semester will start with the presentation of aCommission report analyzing each member states economy. Based onthis report, the European Council will identify member states maineconomic challenges, and strategic policy advice will be given. Afterhaving received the advice, in April, member states will then review

their medium-term budgetary strategies and lay out national reformprogrammes. In June and July, before national budgets are being finali-zed, the Council will again assist member states by giving policy advice.

The European semester


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(Informal) Foreign Affairs Council (September10-11, 2010)

Under the chairmanship of Belgian Minis-

ter of Foreign Affairs Steven Vanackere, onthe first day exceptionally replacing High

Representative of the EU for ForeignAffairs and Security Policy Catherine

Ashton, the Foreign Affairs Council met inBrussels on September 10-11. The overar-

ching theme of the Council meeting onSeptember 10 was trade, whereas other

topics relating to the EUs external relationswere discussed under the presidency of

Catherine Ashton on September 11.

First of all, ministers voted on the adoption ofa decision authorizing the signature of a free

trade agreement (FTA) with South Korea.The FTA would cover goods, services, intellec-

tual property, public procurement, non-tariffbarriers and a dispute settlement mechanism.

However, Italy initially put its veto out of fearsfor the impact of the deal on its car industry,

as of January 1, 2011. According to a revision clause,

the effectiveness of the supervisory system shall beassessed after a few years and reinforced if necessary.

The Finance Ministers also discussed the possible imposi-

tion of a levy on banks to offset future bail-out opera-

tions of banks and financial institutions. Following thedestabilizing effects of such bail-outs in the past fewyears had on public finances, several member states

already imposed some kind of bank levy or are in theprocess of doing so. As differences in levies between dif-

ferent member states can create competitive distortionswithin the EU single market, the Commission urges the

EU to adopt measures to avoid these. It became clearthat reaching a consensus regarding a bank levy is

becoming more and more likely. However, memberstates are still hugely divided over whether to gather tax

revenues in one common pot a resolution fund or to

return it to national governments. This issue shall be dis-cussed more concretely on October 1 in Brussels at the

next ECOFIN Council.

A tax on financial transactions was the second type oflevy to be discussed at the ECOFIN Council. On this

topic, Didier Reynders, Belgian Finance Minister and cur-rently holding the Presidency of the ECOFIN Council,

said that it was a very complex matter about whichmember states reached no unanimity. Former defenders

of the tax Germany, Austria and France all made con-

siderably less efforts to back the idea. French FinanceMinister, Christine Lagarde, scaled down French supportfor the idea by saying: the financial transactions tax wasn't discussed very much. To me it seems somewhat redundant

if we have the bank levy. In addition, widespread concerns over banks relocating outside the EU further underminedthe idea of a tax on financial transactions. Just as the bank levy, this issue will be further discussed on October 1.

At the Eurogroup meeting, Finance Ministers took note of the progress made by the Greek government regarding

the implementation of measures to reduce its government deficit. Finally, the Council approved a second tranche ofthe EU loan to Greece.

Foreign Affairs

The European SystemicRisk Board (ESRB)The ESRB will be responsiblefor macro-prudential oversightof the EUs financial system. Itwill be chaired by the Presi-

dent of the European CentralBank (ECB), currently Jean-Claude Juncker, the ECB Vice-President, the 27 EU centralbank governors, a Commissionmember and the chairs of thethree ESAs. In addition, a re-presentative from the nationalsupervisory authority of eachEU country and the Presidentof Economic and FinancialCommittee may attend ESRBmeetings but they have novoting rights. Concretely, theESRBs work will focus ondecreasing systemic risks andmaking sure the financial sec-tor contributes sufficiently tothe development of the realeconomy. The Boards objec-tives include tackling fragmen-tation of nationally based riskanalyses, improving early war-

ning mechanisms and translatingrisk assessments into action bythe competent authorities.

European SupervisoryAuthorities (ESAs)

To provide micro-prudentialoversight at European level, aEuropean Banking Authority(EBA), a European Insuranceand Occupational PensionsAuthority (EIOPA) and aEuropean Securities andMarkets Authority (ESMA) willbe established. All three super-visory bodies will have theauthority to overrule theirnational counterparts when the

latter act in breach of EU law,when two or more nationalsupervisors disagree or whenmember states call an emer-gency. Member states will havethe possibility to appeal thedecisions of the ESAs however.The EBA will be based inLondon, the EIOPA in Frankfurtand the ESMA in Paris.

New EU supervisory bodies


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notably the small-car segment in which Italian car manu-

facturer Fiat is positioned. The FTA would among otherthings imply significantly easier access of South Korean

cars to the EU market. The Italian authorities were askingfor a delay in the entry into force of the agreement to

allow Italian car manufacturers to prepare for strongercompetition. Currently, the text foresees the elimination

of EU import barriers to South Korean cars over a periodof 3 years for high- and medium-powered vehicles andover 5 years for small cars.

Following Italys veto, the Belgian Presidency continuedconsultations over the weekend in the hope that a politi-cal agreement on the FTA could be found on September

13 during the General Affairs Council. When it turned outthat Italy needed more time

to consider the issue, anextraordinary Foreign

Affairs Council was held onSeptember 16, where the

knot was finally cut underpressure of other member

states which were strongly infavour of the deal. The com-

promise now foresees in aprovisional entry into force

of the FTA as of July 2011, 6months later than initially

planned. The text will nowbe forwarded to the European Parliament which also hasto give its consent, given the new legislative powers it

acquired under the Lisbon Treaty. Negotiations with theParliament should take place before the end of the month

and would cover among other things a regional safequardclause, enabling special protection for European firms in

regions with high unemployment rates. After the signa-ture of the deal together with South Korea, which is now

foreseen for October 6 in the margin of the Asia-EuropeMeeting (ASEM), all EU member states will also have to

ratify the text. The Council formulated a number of condi-tions, notably the adoption of a regulation implementing

a bilateral safeguard clause, the demand that new tradebenefits accorded by South Korea to the United States

would also be extended to the EU, and the requirementthat South Korean CO2 emission regulations would not

impose an unfair burden on EU exporters. Negotiationson a EU South Korea FTA took off on October 15, 2009.

Two-way trade between the EU and South Korea wasworth approximately 62 billion EUR in 2009, and South

Korea is the EUs 8th most important trading partner.

A second point of discussion was the question how a new

momentum could be given to the process of establishingEconomic Partnership Agreements (EPAs) with African,Carribean and Pacific (ACP) countries. EPAs, a key ele-

ment of the Cotonou Agreement which was signed by the

EU and ACP countries in 2000, replace the non-reciprocal

preferential trade agreements which were in placebetween the EU and ACP countries up to 2008.

Negotiations on the establishment of comprehensive

EPAs have been difficult as they require ACP countries toopen their markets to EU exports as well. Out of eightEPAs, currently only six have been signed, and of those

six only one is finalized (with CARIFORUM, i.e. a number

EVENTS&MEETINGS

19-21/09/2010 Informal Agriculture and FisheriesCouncil - Agriculture

La Hulpe

20-23/09/2010 Plenary session of the EuropeanParliament

Strasbourg

23-24/09/2010 Informal meeting of EU DefenceMinisters Ghent

27/09/2010 Agriculture and Fisheries Council Brussels

27-30/09/2010 The EUROFI Financial Forum 2010 Optimizing EU financial reformsfor achieving resilience, growth andcompetitiveness

Flagey Center,Brussels

27-29/09/2010 ICT 2010 conference (organizedwith the support of the BelgianPresidency) Conference on latestICT trends & EU priorities for ICTR&D funding

Brussels Expo,Brussels

28-29/09/2010 Ministerial conference Promoting green employment :

a major and indispensable driverbehind a successful transitiontowards a competitive low carbonand green economy

La Hulpe

29/09/2010 FEB lunch debate with Karel DeGucht, European Commissioner forTrade

FEB premises,Ravensteinstraat4, Brussels

29/09-1/10/2010 Conference (organized with thesupport of the Belgian Presidency) World class clusters to re-launchEuropean industry

Charlemagnebuilding (Euro-pean Commis-sion), Brussels

29-30/09/2010 Informal Competitiveness Council Internal Market

Brussels

30/09-1/10/2010 Informal Economic and FinancialAffairs (ECOFIN) Council Brussels

30/09/2010 4brabant.eu High-level networ-king event for entrepreneurs andgovernment officials

CinquantenairePark, Brussels

4/10/2010 Asia Europe Business Forum(AEBF)

Egmont Palace,Brussels

4/10/2010 Fourth newsletter Brussels calling

4-5/10/2010 Conference (organized with thesupport of the Belgian Presidency) Flexicurity to the benefit of wor-kers: making transitions pay

Ghent

6/10/2010 EU-China Business SummitEU-

India Business Summit

Egmont Palace,

Brussels

28/10/2010 FEB lunch debate with ConnieHedegaard, EuropeanCommissioner for Climate Action

FEB premises,Ravensteinstraat4, Brussels

10/12/2010 EU-India Business Summit Egmont Palace,Brussels


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of small Carribean states). Together with the European Commission, mini-

sters therefore reflected on ways to accelerate the process.

Third, the Council asked European Commissioner for Trade Karel De Gucht

to prepare a scheme to grant trade preferences to Pakistan following thefloods which hit the country last month. The scheme, meant to help the

economic recovery of Pakistan on medium term and complementing short-

term humanitarian aid, was endorsed by the European Council on Septem-ber 16. The arrangement, which would mainly benefit Pakistani textileproducts and could be worth up to 230 million EUR, would require awai-

ver from the World Trade Organiza-

tion (WTO). However, such a waiver is

expected to be challenged by Chinaand India that might claim similar trade

concessions under the WTOs most-favoured-nation (MFN) principle.

Fourth, Karel De Gucht addressed the

Council on the creation of a Europeaninternational investment policy, andministers held an exchange of views on

the matter. The Lisbon Treaty grants theEU exclusive competence in the field of foreign direct investment (FDI). On

July 7, the European Commission issued a communication on the topic. Itthen also launched a proposal for a regulation establishing transitional

arrangements for bilateral investment agreements between member statesand third countries. The Commissions communication addressed matterslike the definition of FDI, selection criteria for prospective partners, stan-

dards for future investment agreements and dispute settlement.

Fifth, ministers decided to start FTA negotiations with Malaysia and startdiscussions with China on the protection of so-called geographic indica-

tions (GIs, i.e. a type of intellectual property relating to products from aregion in a particular country e.g. Parma ham, Roquefort cheese).

Over the last couple of weeks, Trade Commissioner De Gucht travelled

around the world to visit other important trade partners of the EU. At theend of August, he attended the Economic Ministers Meeting of ASEAN

(Association of Southeast Asian Nations) where he announced together withhis Asian counterparts that an EU-ASEAN Summit, meant to raise aware-

ness about business and investment opportunities in the two regions,

would be held in 2011. In the past, the EU has been trying to conclude anFTA with ASEAN, but when those negotiations were put on hold in 2009, itswitched to parallel bilateral strategies. Commissioner De Gucht also trav-

elled to Brazil and Argentina on September 13-16 to explore with his South-American colleagues how ongoing negotiations for an FTA between the EU

and MERCOSUR could be advanced. These negotiations with the Latin-American trade bloc, which currently includes Brazil, Argentina, Paraguay

and Uruguay, have been suspended since October 2004, but have recentlybeen relaunched at the Latin America & Carribean Summit in Madrid in May2010. A first negotiating round took place in Buenos Aires in June 2010 and

the next one will be held in Brussels in October 2010. (For further details,please refer to the second issue of the Brussels calling newsletter.)

On September 11, the Foreign Affairs Council started with a working

breakfast together with the four candidate member states Turkey, the


European Commission PresidentBarroso gives first State of theUnion at European Parliament

On September 7, European CommissionPresident Jos Manuel Barroso delivered thefirst State of the Union address during aplenary session of the European Parliamentin Strasbourg. He looked back on the waythe EU handled the economic and financialcrisis over the last year and concluded thatthanks to determined action and theupcoming reforms in the fields of economicgovernance and financial supervision, theEUs economic outlook looks better todaythan one year ago. The President then setout the Commissions working programme

for the coming 12 months. Main challengesfor the Union according to J. M. Barrosoinclude: dealing with the economic crisis and gov-

ernance;

restoring growth for jobs by implementingthe Europe 2020 strategy;

building an area of freedom, justice andsecurity;

starting negotiations on a modern EUbudget;

pulling the EUs weight in the world.

The Commissions President said that themonetary union now needs to be matchedby an economic union, and that he wants to

have a reformed financial sector in place bythe end of 2011 (several legislative initiativesare still in the pipeline). Regarding competi-tiveness, he stated that stimulating innova-tion (including a breakthrough in the EUpatent dossier) and the cutting of red tapewill be a top priority. Also remarkable werehis intention to create 3 million green jobsby 2020 and his proposal to issue EU pro-ject bonds to finance large infrastructureprojects, needed particularly in the sphereof energy. This is Europes moment of

truth, J. M. Barroso said. We either swimtogether, or sink separately.

In the spotlight


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Former Yugoslav Republic (FYR) of Macedonia, Croatia and

Iceland. Under the presidency of Catherine Ashton, EU Fo-reign Ministers discussed the renewed Middle East peace

talks and the European External Action Service (EEAS)which was formally established last month and for which

recruiting is now ongoing. The first appointments for topEEAS positions were made public on September 15. High

Representative Ashton briefed the Council of her recenttrip to China and stressed the importance of strong bilate-ral relationships with the country. In a letter of September

3, she called upon EU Foreign Affairs Ministers to adoptmore coherent positions towards China. Current bilateral

issues between the EU and China include Chinas refusal toparticipate in new economic sanctions against Iran, and the

arms embargo which European countries imposed onChina after the 1989 Tiananmen bloodbath.

Turkey, a candidate for EU membership since 2005, was

discussed as an emerging strategic partner, given itsgrowing influence in the world. Ministers exchanged views

on how the EU could cooperate more effectively with

Turkey in the field of its Common Foreign and SecurityPolicy (CFSP). Turkeys Foreign Minister Ahmet Davutogluhowever stressed at the meeting that Turkey would never

accept any alternative to the accession process. Morenews about EU-Turkey relations can be found in the

General Affairs article in this newsletter.

General Affairs Council (September 13,2010)On September 13, the General Affairs Council convenedunder the presidency of Steven Vanackere, Belgian Mi-

nister of Foreign Affairs and Institutional Reforms. EUForeign Affairs Minis-

ters were charged withthe preparation of the

work of the European

Council which tookplace on September

16 (see article Euro-

pean Summit in thisnewsletter), and it took

note of the draft annotated agenda for the European

Council of October 28-29. The latter European Council isexpected to have four main points on the agenda:

the discussion of the final report of the Task Force oneconomic governance (chaired by European Council

President Herman Van Rompuy), as well as the state ofplay in financial services regulation and the introduction

of levies and taxes on financial institutions; the preparation of the EUs position for the G20 Summit

in Seoul (South Korea) on November 11-12; the preparation of the United Nations Climate Change

Conference in Cancn (Mexico) from November 29 untilDecember 10;

the definition of the EUs core political messages in viewof the bilateral Summit with the United States sched-

uled for November 20.

The General Affairs Council continued its meeting with

the adoption of, among other things, a regulation on thecreation of a European rail network of international

freight corridors. In addition, several amendments to theEUs general budget for 2010 were approved. One of

these adjustments enables the EU to foresee financial

resources for the recently established European ExternalAction Service (EEAS). Furthermore, a political agreement

was reached on a draft regulation updating EU rules ontextile labelling. The Councils position on this draft leg-

islation will now be forwarded to the European Parliamentfor a second reading. Then the Council also adopted its

first-reading position on a draft directive on patientsrights in cross-border healthcare. The position first of all

clarifies to what extent patients receiving healthcare inanother member state can be reimbursed for the services.

It also stipulates that member states may limit reimburse-ment of cross-border healthcare in case of overriding rea-

sons of general interest (e.g. the undermining of thefinancial balance of a social security system). The Coun-cils position on the matter will now be forwarded to the

European Parliament for a second reading.

Recent events in Kosovo-Serbia relations were also

briefly discussed. After a ruling at Serbias request of theInternational Court of Justice (ICJ) in The Hague which

stated that international law was not violated by Kosovossecession from Serbia in February 2008, Serbia decided

General Affairs


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to take the matter to the United Nations (UN). On Sep-tember 9, the EU and Serbia passed a compromise reso-

lution during the UN General Assembly, after SerbianPresident Boris Tadic agreed to drop a condemnation of

Kosovos declaration of independence from the resolu-tion. Although President Tadic stressed that the resolu-

tion in no way implied Serbian recognition of Kosovos

independence, the text opens newavenues for reconciliation between Serbiaand Kosovo, with the EU playing the role

of mediator in view of a European futurefor both nations. Currently 22 out of 27 EU

member states recognize Kosovo as anindependent state. Spain, Romania,

Greece, Slovakia and Cyprus have not rec-ognized Kosovo until now.

In response to this positive signal from Serbia, EU

Foreign Affairs Ministers agreed that Serbias applica-tion for EU membership should be pushed forward. Inname of the Council, Belgian Minister Steven Vanackere

said that at the General Affairs Council of October 25, hewould ask his European homologues to forward Serbias

application for EU membership to the EuropeanCommission, which would then have a mandate to start

assessing the countrys readiness to start EU accessionnegotiations. Serbia applied for EU membership in

December 2009. However, several EU member states arestill opposed to pursue Serbias membership application

due to insufficient efforts of Serbia to arrest war criminal

Ratko Mladic.

Regarding Turkey, the Council took note of the positiveoutcome of the Turkish constitutional reform referen-

dum which took place on September 12. According toTurkish Prime Minister Recep Tayyip Erdogan, the

reforms are simply whatis required to meet EUmembership criteria.

In name of the Council,Belgian Foreign Affairs

Minister StevenVanackere welcomed

the outcome of thereferendum and urged

the Turkish authoritiesto now get on with the implementation of the new con-

stitutions provisions. European Parliament PresidentJerzy Buzek and European Commissioner for Enlarge-

ment tefan Fle conveyed a similar message and askedfor further and deeper reforms. At the end of the year,

the European Commission will publish the latest pro-gress report on Turkeys accession process. Turkey

obtained the status of candidate EU member state in2005, but the pace of negotiations has been very slow.

Despite the EUs commitment, France and Germanyamong other member states are known to oppose fullTurkish membership.

Informal Transport, Telecommunications and Energy (TTE)Council (September 15-16, 2010)

On September 15-16, an informal Transport Council was held. EU Transport

Ministers exchanged views on the integration of waterborne transport intothe EU transport and logistics chain. Location of the two-day political

meeting was the city of Antwerp, hosting one of the largest ports in Europeand even worldwide. The opening address on September 15 was given by

Belgian State Secretary for Mobility Etienne Schouppe in the presence ofSiim Kallas, European Commissioner for Transport.

Sustainable economic growth relies on sustainable mobility and efficient

intra-EU transport and logistics networks. The Belgian Presidency is con-vinced that co-modality (i.e. the combination of several transport modes in

an optimal way) is a key principle in this field. However, the opportunitiesoffered by some transport modes, such as intra-EU short sea shipping (SSS)and inland waterway transport (IWT), which are characterized by a huge

amount of unused transport capacity, have not yet been fully exploited. One

of the reasons for this is the absence of a level playing field between differ-ent transport modes. More specifically, the impediments to the full integra-tion of SSS and IWT into EU transport and logistical chains need to be

removed. Ministers thus discussed which EU policy measures could con-

Transport

Herman Van Rompuy at FEB

On September 7, the Federation of Enterpri-ses in Belgium (FEB) organized at its premisesin Brussels a lunch debate with guest speak-er Herman Van Rompuy, President of theEuropean Council. Before an audience of

more than 100 participants, he reflected on

the economic and financial crisis of the lastyear and stated that in the field of crisis ma-

nagement, EU leaders delivered on what theyhad to do. H. Van Rompuy elaborated on thepending reinforcement of the Stability and

Growth Pact (SGP) and the establishment ofthe European Financial Stability Fund (EFSF)

In the spotlight


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tribute towards enhancing the competitiveness of EU waterborne trans-

port compared to other transport modes.

During a first session on September 16, the topic of a blue belt for compet-itive waterborne transport in the internal market figured on the agenda. The

blue belt is defined as the sea area surrounding the EU complemented byinland waterways which should enable waterborne transport without barriers.

The streamlining and integration of maritime transport according to theblue belt concept requires integrated maritime transport surveillance tools

and the development of technological e-maritime services and applications,based on electronic data on ships, cargo, routes, crew, passengers and other

aspects of water-based transport.

A second session, chaired by Flemish Mobility Minister Hilde Crevits, dealtwith the role of ports in the full integration of waterborne transport in logis-tical chains. Ports play an interface function as they link transcontinental

transport with inland regions on the one hand, and connect waterbornetransport with landborne transport modes such as road or rail haulage on the

other hand. Therefore ports are essential to the seamless integration ofwaterborne transport in European distribu-

tion chains. EU Transport Ministers discussedthe integration of SSS into land-based transport networks. More specifically, they

exchanged views on the idea of uniform intra-EU cross-modal transport documentation and asingle multimodal liability regime, and on which measures could strengthen ports as nodal

points and enhance further integration of SSS with land-based transport modes. Such initia-tives would ensure the rapid transit of goods.

The adoption of a reviewed Eurovignette directive would be an important step towards

creating a level playing field between waterborne transport and landborne transport modes,such as road transport. However, the proposal for a review of the Euro vignette directive,

one of the priority dossiers of the Belgian Presidency, was not discussed during the informalTransport Council in Antwerp. The Eurovignette directive (adopted in 1999 and amended in 2006) harmonized levy systems

applicable to heavy goods vehicles (> 3,5 tonnes) across the EU in order to pay for the costs relating to the construction,

maintenance and operation of road infrastructures. In July 2008, the European Commission proposed a new amendingdirective which would among other things allow member states to internalize external costs related to pollution and con-

gestion as well, following common rules. This proposal is now still on the negotiating table. Currently, the most important

obstacles to an agreement are the question which external costs the new Eurovignette directive would exactly cover (with con-

gestion costs as the most contentious element), the allocation of revenues (to the sustainable development of transport or tocentral budgets), and the geographical coverage of the new directive (all European highways or only trans-European trans-

port networks). At the beginning of the Belgian Presidency in July, an exchange of views was held on the directive proposalwhich showed that member states were highly divided over the issue. Discussions were now resumed on September 10

and lasted until September 13. It is unlikely that the Council will reach a common position during the Transport Council ofOctober 15. Instead, the Belgian Presidency is expected to come with a progress report on the matter. The dossier will figure

on the agenda of the Transport Council of December 2-3.

created following the Greek debt crisis. ThePresident stated that softening the SGP in2005 had been a mistake and that strongeconomic growth up to 2008 had served as asleeping pill for policymakers. Furthermore,during the economic boom before the start ofthe crisis, expansionary macroeconomic poli-cies had been implemented in a discretionary

manner, while unhealthy imbalances in mem-ber states balances of payments and in com-petitiveness continued to grow. Concerningcurrent budgetary problems, H. Van Rompuynoted that many governments are taking boldand difficult decisions to address them, asmajor challenges like ageing and decliningcompetitiveness remain. He concluded: TheEU can play a steering, coordinating and

even coercive role, but at the end of the dayit is up to the member states to take andimplement the necessary decisions.

Informal European Council (September 16, 2010)

On September 16, an informal meeting of the EuropeanCouncil was organized in Brussels. Two main topics were onthe agenda: first of all, the EUs relations with its strategic

partners (notably the emerging powers in Southeast Asia),

and secondly, an oral report by European Council President

Herman Van Rompuy on the progress of the Task Force on

economic governance he chairs. The Summit was some-what overshadowed by the current row between France andthe European Commission concerning the expulsion ofRoma by the French authorities.

European Summit


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After a meeting with European Parliament President JerzyBuzek, EU Heads of State or Government, accompanied

by their Ministers of Foreign Affairs, held an exchange ofviews on how to give a new momentum to the EUs

external relations with its strategic partners. Currently,the EU has nine strategic partners: the

United States, Canada, Japan, Brazil,

Russia, India, China, South Africa andMexico. However, a coordinated Eu-ropean foreign policy strategy is often

still lacking. Herman Van Rompuy stat-ed that with its weight of 500 million

people and 22% of world GDP, the EUis punching below its weight. In a

world that is changing fast, commonchallenges need to be jointly addres-sed by EU member states in an effec-

tive and coordinated way. President

Herman Van Rompuy made it clear thathe wants the European Council to playa major role in this field, in terms of providing guidance

and defining the EUs strategic objectives and interests.The new European External Action Service (EEAS),

created by the Lisbon Treaty, will play an important in-strumental role in this respect. Herman Van Rompuy made

it clear he saw the European Council of September 16as the beginning of a process in which foreign policy

would increasingly be present on the European Councilsagenda in the future. Future EU external relations should

be based on the principle of reciprocity, i.e. mutualinterests.

EU leaders held a discussion about the many upcoming

international meetings: the Asia-Europe meeting (ASEM)on October 5-6, the EU-China Summit on October 6, theG20 Summit in Seoul (South Korea) on November 11-12,

the EU-US Summit on November 20, the United NationsClimate Change Conference in

Cancn (Mexico) from Novem-ber 29 until December 10, and

an EU-India Summit at the end

of the year. They provided inputand strategic guidance on thecommon positions the EU

should take during these events.A debate was held on measures

to improve the effectiveness ofEU external actions, inter alia in

terms of planning, preparationand output of international summits and summits with

partner countries. Regarding the G20 Summit in Seoul,the European Council will continue to stress the impor-

tance of maintaining strong momentum in the area offinancial reform, and send a clear signal on the need toconclude the Doha trade negotiations in the framework of

the World Trade Organization (WTO). In addition, the

French President Nicolas Sarkozy outlined his ideas for the

2011 French Presidency of the G20.

Especially relations with the EUs Asian strategic part-ners received a lot of attention during the European Coun-

cil meeting. Catherine Ashton (HighRepresentative of the EU for Foreign

Affairs and Security Policy) reported onher recent visit to Southeast Asia. With

regard to the upcoming EU-China Sum-mit specifically, the European Council

decided to pursue strategic interestssuch as the promotion of bilateral trade,market access, investment conditions,

the protection of intellectual propertyrights, the opening up of public procure-

ment markets, stronger discipline in thefield of export subsidies and the dialo-

gue on exchange rate policies.

At the occasion of the strategic partnership discussions atthe European Council, BUSINESSEUROPE issued a posi-

tion paper in which it calls for an economic dimension inEU foreign policy to help European business operate and

invest abroad. This could, among other ways, be done bysetting up an economic division in the European External

Action Service (EEAS) which could provide foreign commer-cial services in key embassies and cooperate closely with

business in the preparation of international summits andconferences.

Over lunch, Herman Van Rompuy updated the EU Heads of

State or Government on the work done so far by the Task

Force on economic governance since its establishment inMarch 2010. The Task Force made considerable progress

on a number of points. First, broad agreement now existsto broaden macroeconomic surveillance by not only loo-

king at budget deficits as wasthe case in the past, but also at

the wider macroeconomic pictu-re. This will be done by a regular

assessment based on a score-board with specific indicators

(e.g. with regard to a memberstates competitiveness). When

indicators exceed their normalparameters, an in-depth assess-

ment, as well as an excessiveimbalance procedure might fol-

low. A second success is the agreement over the so-calledEuropean semester, an annual cycle of fiscal, structural

and macroeconomic policy coordination between memberstates that should enable the detection of inconsistenciesand emerging imbalances. Despite this progress, a couple

of issues are still left on the negotiating table: first of all,sanctions by which the Stability and Growth Pact (SGP)



10/12

BrusselsCalling

could be strengthened in case of continued non-compli-

ance of a member state with the Pacts rules, and second-ly, the question whether the SGPs public debt criterion

should already play a role in the preventive arm of theSGP. The discussion on sanctions does not only deal with

the nature of the sanctions, but also with how they wouldbe triggered. With regard to debt, the Task Force is con-

sidering whether an excessive deficit procedure shouldalso be launched for a member state with a budgetarydeficit of less than 3% of gross domestic product (GDP)

but with a public debt level superior to 60% of GDP whichdoes not fall fast enough. The Task Force now still has

more than one month to settle the remaining issues: its

final report is expected to be presented during theEuropean Council of October 28-29.

EU Heads of State or Government also mandated ministers

to agree on a comprehensive package of short, mediumand longer term measures, including in the field of trade,

to support Pakistans recovery after the country wasseverely hit by floods last month.

The next European Councils during the Belgian Presidencywill deal with economic governance and the further prepa-

ration of important international summits (October 28-29)and research, development and innovation (December 16-17). The first European Council of 2011 will be dedicated

to energy policy.

- 10 -

Assuring adequate pensions & social benefitsfor all European citizens (September 6-8, 2010)

On September 6-8, the Belgian Presidency and the BelgianMinistry of Social Security organized a conference titled

Assuring adequate pensions & social benefits for all

European citizens in Lige. On September 6, Belgian

Minister of Pensions Michel Daerden welcomedall delegations. The next day, views were first of

all exchanged on the interim joint report on pen-sions drafted by the Social Protection Commit-

tee (SPC) and theWorking Group on Ageing

Populations and Sustainability (AWG) underthe European Policy Committee (EPC).Subsequently, a panel debate was held with rep-

resentatives from BUSINESSEUROPE and ETUC(European Trade Union Confederation). In the

afternoon, EU Ministers for Social Affairs andSocial Security shared insights on how their respective coun-

tries tried to assure the sustainability and adequacy of

pensions. The day was closed with a discussion on thegreen paper on pensions published by the European

Commission in July 2010. On September 8, the topic of dis-cussion was broadened to social protection systems in

general. Again a panel discussion between European socialpartners and between EU ministers took place. The confer-

ence was concluded by Michel Daerden and by Lszl

Andor, European Commissioner for Employment, Social

Affairs and Inclusion.

Over the last decades, pension system reforms have

emerged as a key issue in most EU member states. Thephenomenon ofageing is the largest challenge in this field

and is the result of three evolutions: an increase in lifeexpectancy, a reduc-

tion of birth ratesand the labour mar-ket exit of the baby

boom generation.

Also labour marketshave evolved fromstable long-term

contract jobs tomore flexible jobs

and from mainlymale employment to higher participation levels of women.

On top of that came shifts in family structures and occa-sional economic crises which made it difficult for most

governments to prepare financially for a higher share ofretirees in the overall population in the future.

Anticipating this evolution, the AWG was created in 1999

to assist the EPC in quantifying the long-term sustainabilityof public finances and the economic consequences of age-

Pension conference

Website of the Belgian Presidency of the Council of the European Unionhttp://www.eutrio.be

Website of the Belgian EU Presidency of the Federation of Enterprises in Belgium (FEB)http://eupresidency.vbo-feb.be

LINKS


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ing populations in the EU member states. Together withthe SPC it received a mandate in December 2009 to carry

out an analysis of pension systems in the EU, amongother matters to update the agenda for securing ade-

quate and sustainable pensions in the light of the eco-nomic crisis. An interim version of the joint report was

discussed during a first session of the conference on

September 7. The final version of the joint report isexpected to be adopted in October 2010 and will mostlikely be the subject of European Council conclusions in

December 2010 under the Belgian Presidency. In thereport, a holistic

approach to pen-

sion policy, com-

prising adequacy,sustainability andmodernization, is

called for.

During anothersession on Sep-

tember 7, the Com-missions consul-

tation paper on the

future of pensions was debated. Next to the balance be-

tween pension sustainability and adequacy, the paper seekscontributions on the balance between work and retire-

ment, the facilitation of a longer active life and removal ofobstacles in the field of pension rights for individuals wor-

king in different EU member states. To complement thedebates, Pension Ministers of several member states

presented their national pension systems to each other.

In his concluding remarks for the conference, European

Commissioner Andor first of all addressed the issue offinding an optimum balance between pension sustai-

nability and adequacy. A sound definition ofpension adequacy is also still to be elaborated:

does the term only cover the prevention ofpoverty or also the maintenance of a certain liv-

ing standard? Secondly, he stressed that social

protection is not only about providing replace-ment income and preventing poverty, but alsoconcerns facilitating labour market transitions

and maintaining skills and employability. In thissense, social security is intimately linked with

the concept offlexicurity. About Europeansocial security models, the Commissioner stated

that we have to ask ourselves whether our sys-tems still deliver on adequacy, and if certain promises canno longer be fulfilled, whether individuals then have the

possibility to compensate via other means. New innova-tive solutions need to be looked for. Finally, Lszl Andor

admitted that the recent economic crisis had made theEuropean pension challenge ever the more difficult, espe-

cially with regard to public finances. In order to address

the issue, the Commissioner clearly expressed his prefe-rence for higher employment rates over lower pension

benefits and higher contribution rates. He refuted therumour that the Commission wants to increase the pen-

sion age to 70 years and stressed that this is a matter tobe decided by EU member states themselves. Following

his July green paper, Commissioner Andor called uponall stakeholders to actively contribute to the ongoing

consultation which lasts until November 15.

Also on the topic of pensions, only last month, nine EUmember states (i.e. Bulgaria, the Czech Republic,Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and

Sweden) called upon the European Commission and theEuropean Council to take into account the financial bur-

den of pension system reforms in the calculation ofbudgetary deficits under the Stability and Growth Pact

(SGP) to create a level playing field between countrieswhich already implemented reforms and those who did

not. Germany has already expressed its opposition againstsuch a weakening of the SGP which is currently being

reinforced. Countries that have taken pension systemreform measures are likely to see their budgetary situa-

tion aggravate on the short term, paradoxically increasingtheir chances to be subjected to an excessive deficit pro-

cedure and all its consequences, whereas such reformswould actually imply more sustainable public finances in

the long run.

Despite the limited powers of the EU in the field of pen-sions (and social policy in general), the topic turns up

more and more frequently on the European agenda. OnOctober 29, the European Commission will organize a

high-level conference on its green paper on pensions.

Participants will include delegates from the European

Parliament andCommission, as well as

of member states,international organisa-tions, social partners

(including BUSI-NESSEUROPE), the

academic world andcivil society. On the

agenda will be theadded value of the EU

in the field of pensions(e.g. with regard to the

cross-border portability of complementary pension rights)and the link between pension systems on the one hand

and sound public finances and worker mobility on theother hand. In addition, the year 2012 is likely to be the

European Year of Active Ageing.


12/12

Presentation of the European Department of the FEB

Diane StruyvenDirector of the European Department of the FEB Permanent Delegate to BUSINESSEUROPE

Tel: +32 (0)2 515 08 [email protected]

Michael VoordeckersAdvisor at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

Arnaud ThysenDeputy Advisor at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

Michiel HumbletIntern at the European Department of the FEBTel: +32 (0)2 515 08 [email protected]

Pieter-Jan Van SteenkisteIntern at the European Department of the FEBTel: +32 (0)2 515 09 [email protected]

TEAM PRESENTATION

BrusselsCalling -12 -

FEB Federation of Enterprises in Belgium

Ravensteinstraat 4 1000 Brussels Tel. 02 515 08 11 Fax. 02 515 09 15

PUBLISHER: Olivier Joris Wolvenbergstraat 17 1180 Brussels

PUBLICATION MANAGER: Stefan Maes Tel. 02 515 08 43 [email protected]

GRAPHIC DESIGN: Vanessa Solymosi, Landmarks [email protected]

COPYRIGHT: Reproduction with acknowledgement of source is permitted

FEB member of

Brussels calling, Belgian EU Presidency, Business Newsletter, 20/09/2010, Issue 3

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