Brussels Brief - July 1, 2005
July 1, 2005
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KEY DEVELOPMENTS
Consumer Protection: Council Votes Against Lifting of GMO “Safeguard” Bans
Philip Bentley QC
For the first time ever in the so-called “regulatory comitology procedure”, the European Union (EU) Council has voted by qualified majority against a Commission proposal on Genetically Modified Organisms (GMOs). (In all the earlier cases the Council has simply failed to act, thereby giving the Commission the right to adopt its own proposal.) The case in question concerns the eight marketing bans adopted by different individual EU Member States between 1998 and 2000 pursuant to the “safeguard” clause in Directive 90/220/EEC. After the reinforcement of the regulatory framework for GMO marketing, notably with the adoption of Directive 2001/18/EC in place of Directive 90/220/EC, the Commission set in motion the procedures to have the bans lifted. The European Food Safety Authority reviewed the matter and concluded that the new information submitted by the Member States did not invalidate the original risk assessments made for the GMOs in question. The Commission therefore put a proposal to the Regulatory Committee requesting the Member States concerned to lift their bans. Since the Regulatory Committee failed to reach a qualified majority either in favour or against the Commission’s proposal, the proposal was submitted to the Member States in the EU Council. The Council rejected the Commission’s proposal by a qualified majority. As a result, the Commission has three options: to re-submit its existing proposal, to submit an amended proposal, or to present a legislative proposal on the basis of the Treaty. This is an unprecedented development upon which the Commission’s Environment Directorate will reflect hard before moving to the next step.
Trade: Council Adopts New Generalised System of Preferences (GSP)
Philip Torbøl
On 27 June 2005, the Council adopted the long awaited new GSP Regulation. The adoption follows an agreement between the EU and China to limit Chinese textile imports into the EU, a limitation which many Member States had been pressuring for and to which the GSP issue had been linked politically. Imports from beneficiary countries which, in a given sector, account for more than 15 per cent of EU imports from all GSP countries will be "graduated" and lose their preferential treatment. In the case of textiles the "graduation threshold" is set at 12.5 per cent. Many Member States had insisted that this threshold be lowered. A compromise was reached to keep the 12.5 per cent threshold but to consider fabrics and garments as two separate product groups. This means that Indian garments will continue benefiting from the preferential tariff while Indian fabrics will be graduated out.
State Aid: Commission Opens Investigation into Aid to Poczta Polska
Mélanie Bruneau
The European Commission has opened a formal investigation into public support for Poland’s universal postal service provider, Poczta Polska. The investigation concerns the aid that Polish authorities intend to grant to Poczta Polska, both to compensate for losses incurred in providing the universal postal service and also for investments exclusively related to the provision of such service. According to Competition Commissioner Neelie Kroes, in order to be compatible with EU rules, the proposed aid must be limited to the additional costs resulting from the provision of the universal postal service and must not constitute a cross-subsidy of Poczta Polska’s competitive activities. The Commission doubts that Poczta Polska has properly applied the cost allocation principles in evaluating the universal postal service’s cost. It also doubts that this assessment will prevent over-compensation for the universal postal service, which could be used to finance Poczta Polska’s competitive activities. The Commission’s formal investigation will allow Poland and third parties to submit their comments so as to verify these points.
Mergers: Commission Clears Strabag Takeover of Parts of Walter Bau
Yannis Virvilis
The European Commission has cleared the acquisition of parts of Walter Bau AG by Strabag. Strabag is an Austrian construction company operating worldwide especially in building and civil engineering. Walter Bau is a bankrupt German construction company. The operation consists of Strabag taking over parts of Walter Bau’s business, including several building and civil engineering projects. The Commission has found that although the two parties are among the biggest players in Germany, the operation would not create any competition concerns as Strabag will only acquire a small fraction of Walter Bau’s construction contracts. In Austria, the market share increment will be very small, as Walter Bau has only small scale operations there. It has to be emphasised that the Commission has agreed to refer part of the transaction, namely the acquisition of the Hamburg asphalt operations, to the BundesKartellamt (the German Federal Cartel Office), as this market was found to have all the features of a distinct market that does not constitute a substantial part of the common market.
Aviation: EU-China Summit and “Open Skies” Discussions
Frank Schoneveld
During the EU-China Aviation Summit, the Vice President of the European Commission will discuss the next stage in the proposed “Open Skies” Agreement between China and the European Union. The proposed Agreement will provide legal recognition for the existing bilateral air services agreements between the EU Member States and China, since the European Court has ruled that it is the EU, and not the Member States, which has the power to enter into air services agreements. It is expected the new agreement with China will also include a process of gradual market opening, regulatory alignment and technical and industrial co-operation. At the same time, during the Aviation Summit on 30 June – 1 July 2005, the EU and China will explore market opportunities, infrastructure plans, safety and security, and air traffic management.
Telecommunications: Telecoms Ministers Focus on World Summit
Nicola Chesaites
In preparation for the second phase of the World Summit on the Information Society, EU telecommunications ministers and Information Society Commissioner Viviane Reding have met to discuss the EU's negotiating priorities. The first phase of the Summit took place in Geneva in December 2003, and had as its objective "to develop and foster a clear statement of political will and take concrete steps to establish the foundations for an Information Society for all, reflecting all the different interests at stake". Phase Two, which will take place in Tunis on 16-18 November 2005, will focus on monitoring and evaluating the progress of feasible actions laid out in the Geneva Plan, and will also look at a concrete set of goals. The EU's agenda is to reach agreement in the fields of internet governance and financing mechanisms to bridge the digital divide. On internet governance, the EU is trying to reach agreement on the internationalisation of the functions presently grouped in the Internet Corporation for Assigned Names and Numbers, namely management of the internet’s base sources, the domain name system and IP and root server addresses. On financing, the EU is ready to increase its aid budget to 0.56 per cent of GDP by 2010 which could lead to an additional EUR 20 million for investment in line with UN Millennium goals.
NEXT WEEK’S EVENTS
Monday 4 July – Friday 8 July 2005
No Council meetings scheduled for next week
COUNCIL MEETINGS
COURT OF JUSTICE
Judgments
Agriculture
C-5/03 Greece v Commission
Approximation of laws
C-418/02 Praktiker Bau- und Heimwerkermärkte
C-353/03 Nestlé
Environment and consumers
C-364/03 Commission v Greece
C-214/04 Commission v Italy
External relations
C-374/03 Gürol
C-373/03 Aydinli
C-383/03 Dogan
Free movement of capital
C-376/03 D.
Law governing the institutions
C-208/03 P Le Pen v Parliament
Social policy
C-147/03 Commission v Austria
Social security for migrant workers
C-153/03 Weide (épouse Schwarz)
C-227/03 van Pommeren-Bourgondiën
Opinions
Environment and consumers
C-26/04 Commission v Spain
Freedom of establishment
C-411/03 SEVIC Systems
Freedom to provide services
C-514/03 Commission v Spain
COURT OF FIRST INSTANCE
Judgments
Company law
T-148/04 TQ3 Travel Solutions Belgium v Commission
Intellectual property
T-385/03 Miles International v OHMI - Biker Miles (Biker Miles)
Staff Regulations of Officials
T-387/02 Schmidt-Brown v Commission
T-9/04 Marcuccio v Commission
