Brussels Brief - April 7, 2006
April 7, 2006
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KEY DEVELOPMENTS
Trade: Launch of South Eastern Europe Free Trade Agreement Negotiations
Michal Cieplinski
Countries of South Eastern Europe (Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Romania, Serbia and Montenegro and Kosovo) have launched negotiations to consolidate the region’s 31 bilateral free trade agreements into one single Regional Free Trade Agreement (FTA). The framework for the FTA will be the existing Central European Free Trade Agreement, which is to be simultaneously enlarged and adapted. The aim is to conclude negotiations by the end of 2006. The European Union, the most important trading partner for South Eastern Europe, has welcomed these negotiations and offered strong political and technical support.
Internal Market: Commission’s Amended Proposal for the Services Directive
Maria Scimemi
The European Commission has modified its proposal for the Services Directive following the European Parliament’s first reading in February 2006 and discussions in the Council. The Directive aims at setting up a system which, by freeing up cross-border trade and investment in services, would lead to increased competition, allowing consumers wider benefits. To this end, service providers will be allowed to complete administrative formalities electronically and simpler notifications will be required. Requirements such as the need for a business to be established in a Member State and “economic needs tests” will be removed, and a list of other restrictions will undergo a transparent process of mutual evaluation. In line with the Parliament’s amendments, the proposal does not deal with the posting of workers or with health services. The amended proposal will now be submitted to the Council for debate and vote.
Internal Market: French Authorisation Procedure for Foreign Investments Scrutinised by the Commission
Patrice Corbiau
The European Commission has sent a letter of formal notice to France concerning the provisions of a 2005 Decree which created an authorisation procedure for foreign investments in certain sectors, where the investments could affect public policy, public security or national defence. After informal dialogue the Commission has expressed its concern that some of these provisions could act as a disincentive to investment from other Member States, contrary to EU Treaty rules on the free movement of capital and the right of establishment. In particular, France is asked to clarify why companies established in the EU but under the control of third-country investors should be submitted to the more stringent procedure applicable to third-country companies. France has now two months to send its reply, based on which the Commission will decide whether or not to issue a formal request to the French Government to amend the legislation.
Internal Market: Consultation on Reducing Barriers to EU Internal Trade in Defence Material
Frank Schoneveld
The European Commission has opened consultations on the free circulation within the EU of defence-related products and technology. The Commission seeks comments from industry and other stakeholders on options to reduce obstacles in intra-EU trade for defence material, so as to make European defence industries more efficient and technologically more competitive. Any new regime should reduce administrative obstacles to EU internal trade in defence material yet continue to provide proper security conditions. Comments should be submitted by 30 June 2006.
Internal Market: Commission Inquiry into Sports Betting Services
Yannis Virvilis
Following a number of complaints by service providers, the European Commission has decided to send official requests for information to seven Member States. These requests concern the compatibility of national legislation restricting the supply of sports betting services with the freedom to provide services as stipulated in the EC Treaty. This is usually the first administrative step undertaken by the Commission before opening an infringement procedure against a Member State. The complaints concern restrictions on the provision of sports betting services including the requirement for a State concession or licence. The Commission emphasises that the procedure will not touch upon the existence of monopolies or upon national lotteries, issues which are very sensitive in some Member States.
Public Procurement: Commission Takes Legal Action Against Spain
Andrea Hamilton
The European Commission has taken legal action against Spain for infringing EU public procurement law in three cases. First, the Commission has challenged a Spanish law for the land-and-town planning of the Valencia Community. Spain enacted this law following a Commission challenge to an earlier law, but the Commission remains unconvinced that it is consistent with EU law. The second case involves the Commission’s challenge to Spanish computer supply contracts that require, inter alia, Intel-branded microprocessors, alleging that such requirements are discriminatory. Finally, in the third case, the Commission initiated the second stage of infringement proceedings against Spain regarding the award of school bus services in Valencia, citing, inter alia, concerns over equal treatment and proportionality.
Energy: Commission Action Against Member States for Not Opening Energy Markets
Lara Kuehl
The European Commission has sent letters of formal notice to 17 Member States for failure to transpose EU gas and electricity directives properly. The directives are aimed at creating a competitive European energy market. During its examination of the conformity of national legislation, the Commission found a number of problems, including the lack of legal unbundling, the lack of free choice of supplier for customers, discriminatory third-party access to networks and insufficiently transparent tariffs. The Commission was also concerned that the continued existence of regulated prices makes it difficult for new companies to break into the energy markets. The Commission has said it expects political support from Member States after the unanimous backing for the birth of a common EU energy policy expressed at the March 2006 EU summit.
State Aid: Greece has Still Not Recovered Illegal Aid Granted to Olympic Airlines
Philip Torbøl
The European Commission has opened a new infringement procedure against Greece for failure to comply with a 2005 judgment of the European Court of Justice (ECJ). Last year, the ECJ ordered Greece to recover EUR 161 million of illegal subsidies granted to Olympic Airways in accordance with a 2002 decision of the European Commission (see Brussels Brief of 20 May 2005). The aid had been granted between 1998 and 2002 in the context of a restructuring plan for Olympic Airways, following which the recovery of the aid had been compromised through a transfer of assets from Olympic Airways to a new company called Olympic Airlines. In a separate procedure, Olympic Airlines has since been ordered to repay EUR 540 million of illegal State aid to the Greek Government.
Mergers: Commission Approves Acquisition of Volkswagen Bordnetze by Sumitomo Electrical Industries
Geert Dierickx
The European Commission has cleared the proposed acquisition of Volkswagen Bordnetze by the Japanese company Sumitomo Electrical Industries. Both companies produce and supply wire harnesses, which are electronic-electrical distribution systems installed in motor vehicles. Through this merger, Sumitomo Electrical Industries wishes to expand its presence in Europe. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area since there are only limited overlaps between both companies, who will still continue to face strong competition from other automotive component manufacturers.
Monday 10 April – Friday 14 April 2006
COUNCIL MEETINGS
General Affairs and External Relations (with Development Cooperation Ministers) Council (10 – 11 April 2006)
COURT OF JUSTICE
Judgments
Judicial vacation of the Court of Justice from 10 April to 23 April 2006 inclusive
COURT OF FIRST INSTANCE
Judicial vacation of the Court of First Instance from 10 April to 23 April 2006 inclusive
