State Aid: New Procedural Rule from the European Court of Justice
The European Commission suspected Italy of granting financial support to domestic ferry services in excess of the net additional cost of providing “services of general economic interest”. The Commission therefore opened an investigation under Article 88(2) and (3) EC, on the basis that this was “new” unauthorised aid, with the result that further aid payments had to be suspended until the end of the investigation. Italy claimed that the financial support was “existing” or authorised aid, and so the correct procedure should have been under Article 88(1) EC, under which there could be no suspension of the aid until the end of the investigation. The European Court of Justice (ECJ) annulled the Commission’s decision insofar as it provisionally suspended the aid because it had not discussed the matter with Italy before opening the investigation. The ECJ has thus sought to prevent precipitous action on the part of the Commission, but this new requirement could also be exploited by Member States to delay investigations.
Internal Market: European Parliament Rejects Opt-Out in Working Time Directive
In its first reading of a Commission proposal, the European Parliament has voted for a removal of the “opt-out” provision from the working time rules. According to this provision, European Union (EU) Member States can allow common agreements between employees and their employers to disregard the Directive’s maximum working time of 48 hours per week. Subject to reinforced safeguards against employer pressure, the Commission had proposed to keep the provision in the amended directive. The United Kingdom, which is the Member State with the most extensive application of the opt-out, now relies on a divided European Council to block the amendment.
Internal Market: European Parliament Votes on the Cross-Border Mergers Directive
The European Parliament has approved, with amendments, the proposed Tenth Company Law Directive on cross-border mergers of limited liability companies. The Directive sets up a simple legal framework that allows cross-border mergers of companies with share capital within the EU. The Directive would cover all limited liability companies, with the exception of undertakings for collective investment in transferable securities. With regard to cooperative companies, given the very diverse types of cooperatives in the EU, Member States would be permitted to exclude them from taking part in cross-border mergers for a limited period of five years, subject to the control of the European Commission. The proposed Directive provides that schemes for employee participation in companies’ decision-making bodies should apply to cross-border mergers where at least one of the merging companies is operating under an employee participation system. Employee participation in the newly created company will be subject to negotiations based on the model of the European Company Statute.
European Court of Justice: Greece Wins Another Battle in Feta War
The Advocate General of the European Court of Justice (ECJ) proposed that the actions brought by Germany and Denmark against registration of the name “Feta” as a protected designation of origin (PDO) should be dismissed. Germany and Denmark are seeking the annulment of a 2002 Commission Regulation, which entered the designation “Feta” in the register of PDOs. Germany and Denmark argued that the term feta should be classified as generic, in which case registration would be prohibited. However, the Advocate General considered that the name “feta” is not generic, but meets the requirements to be regarded as a traditional name, which can be assimilated to a designation of origin, warranting protection throughout the EU.
Trade: EU – Russia Partnership
The EU-Russia Summit in Moscow on 10 May 2005 resulted in the adoption of a single package of “road maps” for the creation of four “Common Spaces” in the areas of (i) Economic Co-operation, (ii) Freedom, Security and Justice, (iii) External Security and (iv) Research and Education. Within the Common Economic Space the parties will work on approximation of laws and introduction of international standards. Special attention will be given to the improvement of the investment climate, competition-based public procurement, enforcement of intellectual property rights, competition and simplification of customs procedures. Concrete action plans have been adopted for the telecommunications and transport, energy and space sectors and environmental protection. It is likely that EU support of Russia’s World Trade Organisation (WTO) accession will depend on the progress in EU-Russia relations pursuant to the Partnership and Cooperation Agreement and this new initiative on the four “Common Spaces”.
Trade: Progress on Agricultural Talks Adds Momentum to Doha Round
At the Mini-Ministerial meeting of 30 World Trade Organisation (WTO) members in Paris on 3-4 May 2005 the EU’s proposal for reducing import tariffs on agricultural products attracted broad backing, unblocking negotiations on agricultural trade. The proposed formula provides a basis for converting import tariffs into a common measure of Ad Valorem Equivalents. The latter has held up talks on agricultural trade, which has discouraged developing countries from making concessions on services and industrial tariffs. The new momentum injected into trade talks by this breakthrough has increased optimism for a successful outcome for the WTO Ministerial Meeting in Hong Kong in December 2005. There is a view that the latter is the real deadline for Doha given that the United States (US) Congress will have greater power to undo any final agreement after July 2007 when the so-called ‘fast-track’ negotiating authority of President Bush expires.
NEXT WEEK’S EVENTS
Monday 16 May – Friday 20 May 2005
No meetings scheduled for next week
COURT OF JUSTICE
There will be no sitting of the Court of Justice during the week from 16 May to 20 May 2005
COURT OF FIRST INSTANCE
There will be no sitting of the Court of First Instance during the week from 16 May to 20 May 2005
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