EUROZONE LEADERS DISCUSS ECONOMIC REFORM
The eurozone Heads of State and Government are meeting in Brussels for an extraordinary meeting to formally confirm their agreement to an international aid package of € 110,000 million for Greece for the period 2010-2012. The eurozone leaders will also discuss urgent reforms to the economic governance of the eurozone. The Greek emergency has brought the issue of economic reform to the fore, but opinions differ widely as to the changes to the design of the monetary union that are needed. A proposal by the European Commission, backed by Angela Merkel, Germany’s chancellor, suggested that countries that fail to correct excessive budget deficits should be punished with the suspension of EU structural aid funds. The Commission is expected to unveil further proposals next week, including more rigorous scrutiny by eurozone states of each other’s annual budgets and the creation of a financial crisis resolution mechanism.
TRADE NEGOTIATIONS WITH MERCOSUR RELAUNCHED
The European Commission has announced its decision to re-launch the negotiations on an Association Agreement with Mercosur (Argentina, Brazil, Paraguay and Uruguay), which would yield major economic benefits for both sides. The EU began free trade negotiations with Mercosur in 1995, but these were suspended in 2004 without an agreement. Mercosur is a large market with a large growth potential and it is an important trading partner for the EU. Any future free-trade agreement would give EU exporters, investors and services providers improved access to this market, with a potential increase of around €4.5 billion of exports per year. The EU will strive for full liberalisation for trade in goods covering all major industrial sectors, as well as major liberalisation of service sectors. The EU will also put on the negotiating table issues relating to public procurement, intellectual property, geographical indications and provisions on sustainable development.
FINANCIAL SERVICES POLICY
Internal Market Commissioner Michel Barnier addressed the European Parliament’s Economic and Monetary Affairs Committee this week to present his priorities for financial services in 2010. His first priority will be to reconcile the positions of the European Parliament and the Council on a more effective supervision system of the financial sector, in order to position the EU as a model of regulation. On Credit Rating Agencies he reaffirmed his will to examine the possibility to have an independent European agency. The Commission will propose before summer a general text on Derivatives which will search to standardise derivatives trade repositories, so the whole sector would be supervised, and hopes for an agreement on the Alternative Investment Fund Managers Directive. Mr Barnier also asked for a broad consultation on the Capital Requirements Directive IV to be carried out so as to assess impact of the regulation and to find ways of calibrating the measures over time.
ENERGY PRIORITIES FOR COMMISSIONER OETTINGER
At an exchange of views with the European Parliament’s Committee on Industry, Research and Energy, Commissioner Günther Oettinger has outlined the forthcoming initiatives in the energy policy area. He referred to the key issues of infrastructure, the transition to a low carbon economy, the security of energy supply and the diversification of energy sources. Mr Oettinger mentioned in particular an Energy Action Plan 2011-2020, a comprehensive policy framework to ensure that the EU meets its 2020 objectives. With his services, he will work on a decarbonisation roadmap to 2050 to reduce dependence on fossil fuels, by increasing energy efficiency and the use of renewable energy. In this context an Energy Efficiency Strategy will be adopted by the end of 2010, or in early 2011. Mr Oettinger stressed the importance of enforcing the existing legislation to achieve an internal market in energy. He also underlined the need to focus research efforts into energy efficiency, nuclear safety and the long term storage of nuclear waste.
COMING UP NEXT WEEK
· 10 May: Foreign Affairs Council, Brussels. Agenda: piracy off Somalia, nuclear non-proliferation, preparation of the June EU Summit.
· 10-11 May: Parliamentary Committee meetings, Brussels. Agenda: financial supervision, 2010 budget and 2011 budget, internet governance.
Please note that due to the Ascension public holiday, the EU Insight will not be published next week. The next issue will be published on 21 May 2010.
Karl Isaksson, Managing Partner Brussels, Kreab Gavin Anderson
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