Brussels Brief - May 12, 2006
May 12, 2006
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KEY DEVELOPMENTS
Competition: Commission Issues SO in Alleged Gas Insulated Switchgear Cartel
Yannis Virvilis
The European Commission has issued a Statement of Objections (SO) against alleged participants in a cartel in the market for Gas Insulated Switchgear. This SO is based on the results of dawn raids carried out in May 2004 and information supplied pursuant to the Commission’s Leniency Notice. Gas Insulated Switchgear is expensive electrical equipment which controls the flow of energy, and is sold to utility companies both as a distinct product and as part of turnkey power substations. The SO was sent to at least Alstom, Areva, Siemens and ABB. The latter two were also reported as having been the object of the dawn raids.
State Aid: German Guarantee for Baltic Gas Pipeline Project
Elena Kostadinova
Pursuant to EU State aid rules, the European Commission has requested information from the German authorities to verify a guarantee granted by the German Government for a gas pipeline project. The project concerns the construction of a 1,200 km gas pipeline under the Baltic Sea linking Germany and Russia. In order to finance part of the EUR 5 billion project Gazprom could request a loan from Deutsche Bank and the state-owned KfW. The German Government decided last year to guarantee this loan to an amount of up to EUR 1 billion. This guarantee is due to expire at the end of 2006. The German Government is expected to confirm that Gazprom has neither drawn the loan nor taken advantage of the guarantee. If the Commission concludes that the guarantee constitutes State aid, and that it was not granted in conformity with EU State aid rules, it can request the German Government to withdraw it.
Competition: EU Extends Competition Inquiry into Mittal Steel Bid for Arcelor
Geert Dierickx
Mittal Steel, the biggest steelmaker in the world, launched a hostile bid in late January for Arcelor, the second-biggest steelmaker. After Mittal Steel informed the European Commission of its takeover plans for Arcelor, the Commission opened a standard competition inquiry on 10 April 2006. Although the merger would create a steel giant, industry experts say that the two companies have few overlapping businesses that could cause problems for competition regulators. However, Mittal Steel has proposed remedies in order to solve potential problems. The Commission’s inquiry has been extended by two weeks until 7 June 2006, as the regulators looking at the deal need more time.
Enlargement: EU Delays Decision on Bulgaria’s and Romania’s EU Accession
Andrea Hamilton
The European Commission is expected to delay the EU decision as to whether Bulgaria and Romania will join the EU as scheduled. Pursuant to the relevant EU accession treaty, Bulgaria and Romania were set to join the EU on 1 January 2007. The treaty, however, also provided for a one-year delay if the countries fail to meet EU accession requirements. A decision on Bulgaria’s and Romania’s accession date could follow a Commission report on both countries, due on 16 May 2006. Commission officials have indicated, however, that the decision will be delayed until autumn, allowing the countries more time to meet their obligations. While the Commission praised Romania's recent reforms, it has criticised Bulgaria’s judicial reforms and its efforts to fight organised crime and corruption. Recently, Bulgaria arrested a high-ranking official on corruption charges, but denied that the arrest was linked to EU entry.
Environment: European Parliament and EU Council Agree on Batteries Directive
Philip Bentley QC
A Conciliation Procedure has resulted in agreement between the Parliament and the Council on the new Batteries Directive. Member States will have two years to transpose the new provisions into national law. Within four years of such transposition, minimum collection targets of 25 per cent of sales must be achieved, rising to 45 per cent within eight years of transposition. Collected batteries will have to be recycled. The recycling targets are 75 per cent for batteries containing cadmium, 65 per cent for batteries containing lead and 50 per cent for all other batteries. Producers will become financially responsible for the waste management of batteries, although there will be a de minimis exemption for small producers.
Trade: EU-Latin America Summit
Michal Cieplinski
Leaders from the 25 EU Member States and 33 Latin American and Caribbean countries will attend the EU-Latin America Summit in Vienna. After the US, the EU is the largest investor in Latin America, the major aid donor and the region’s major trading partner. Since 1999, the European Commission has successfully negotiated Association Agreements with Mexico and Chile, Political Dialogue and Cooperation Agreements with the Andean Community (Bolivia, Colombia, Ecuador, Peru) and with Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama). Negotiations are also underway on an Association Agreement with Mercosur (Argentina, Brazil, Paraguay and Uruguay). The summit is expected to focus, at this stage, on political declarations.
Education: Modernisation of European Universities
Maria Scimemi
The European Commission has issued a communication responding to the European Council’s informal request to identify areas for action on Universities that could be used to drive forward the Lisbon Strategy’s Growth and Jobs Agenda. To this end, the Commission has identified nine areas where changes should be made, notably mobility, interdisciplinary and autonomy, and has committed to support modernisation through funding programmes for education, research and innovation. The object is to identify and share good practice so as to exploit the substantial reservoir of knowledge and talent.
Aviation: Political Agreement for Extending the EU Single Aviation Market
Patrice Corbiau
A political agreement to create a European Common Aviation Area (ECAA) was signed on 5 May 2006 in Salzburg. The parties are the European Union, eight South-East European countries, Iceland and Norway. The ECAA Agreement is the first comprehensive aviation agreement to be signed since the adoption by the European Council of a roadmap in June 2005, aiming to create a wider Common Aviation Area with neighbouring countries by 2010. The ECAA Agreement’s purpose is to ensure high and uniform safety and security standards across Europe, as well as uniformly applied competition rules and consumer rights. The Agreement also aims to ensure that congestion in the skies will be eliminated by controlling air traffic flows in the most efficient manner. The ECAA Agreement provides new market opportunities for the European aviation industry by creating a single market for aviation consisting of 35 countries and more than 500 million people.
NEXT WEEK’S EVENTS
Monday 15 May – Friday 19 May 2006
COUNCIL MEETINGS
General Affairs and External Relations (with Defence Ministers) Council (15 – 16 May 2006)
Education, Youth and Culture Council (18 – 19 May 2006)
COURT OF JUSTICE
Judgments
Competition
C-397/03 P Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission
Convention on jurisdiction
C-343/04 EZ
Energy policy
C-354/05 Commission v Luxembourg
Environment and consumers
C-221/04 Commission v Spain
C-122/05 Commission v Italy
Freedom to provide services
C-372/04 Watts
Taxation
C-509/04 Magpar VI
Opinions
Agriculture
C-248/04 Koninklijke Coöperatie Cosun
Competition
C-232/05 Commission v France
Customs union
C-68/05 P Koninklijke Coöperatie Cosun v Commission
Environment and consumers
C-244/05 Bund Naturschutz in Bayern and Others
C-32/05 Commission v Luxembourg
Freedom of establishment
C-524/04 Test Claimants in the Thin Cap Group Litigation
Freedom of movement for persons
C-520/04 Turpeinen
Freedom to provide services
C-290/04 FKP Scorpio Konzertproduktionen
Joined Cases C-338/04, C-359/04, C-360/04 Placanica
Social policy
C-17/05 Cadman
COURT OF FIRST INSTANCE
Judgments
No judgments scheduled for next week
