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 State of the Union 2011 Address

President Barroso addressing the European Parliament on 28 SeptemberCommission President José Manuel Barroso sets out an EU strategy for sustainable growth and jobs in his annual State of the Union speech yesterday to the European Parliament.

“We are now facing the greatest challenge our Union has ever known throughout its history,” he said, referring to the continuing economic crisis.

The EU must renew itself by becoming more competitive, living within its means, taming “irresponsible” financial markets, addressing economic imbalances and addressing the pressures of globalisation.

Above all, more political will and leadership is needed to rebuild confidence and trust – among its citizens and in the financial markets."

 Financial Transaction Tax: Making the financial sector pay its fair share

Press conference by European Taxation Commissioner Algirdas Šemeta on the adoption by the EC of a proposal to set up a financial transaction tax in the EU-27This week the European Commission presented a proposal for a financial transaction tax in the 27 member States of the European Union.

The tax would be levied on all transactions on financial instruments between financial institutions when at least one party to the transaction is located in the EU.

The exchange of shares and bonds would be taxed at a rate of 0.1% and derivative contracts, at a rate of 0.01%. This could approximately raise €57 billion every year. The Commission has proposed that the tax should come into effect from 1st January 2014.

 Working time: Commission requests Ireland and Greece to comply with the EU rules on limits to working time in public health services

Health professionalsThe European Commission has requested Ireland and Greece to ensure full compliance with the EU rules on limits to working time for doctors in public health services. The request takes the form of a 'reasoned opinion' under EU infringement procedures. Ireland and Greece now have two months to inform the Commission of measures they have taken to bring their legislation into line with EU law. Otherwise, the Commission may decide to refer Ireland and Greece to the EU's Court of Justice.

In Ireland's case, national law provides for limits to doctors’ working time, but in practice public hospitals often do not apply the rules to doctors in training or other non-consultant hospital doctors. There are still numerous cases where junior doctors are regularly obliged to work continuous 36-hour shifts, to work over 100 hour in a single week and 70-75 hours per week on average, and to continue working without adequate breaks for rest or sleep.

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 Irish fishing opportunities - Atlantic and North Sea

Fishing trawlerThe European Commission this week presented its first proposal for 2012 fishing opportunities for certain stocks in the Atlantic and the North Sea. Based on scientific advice the total allowable catch (TAC) for 9 stocks (certain stocks of cod, anglerfish, herring, haddock, hake, sole, megrim and Norway lobster) could be increased.

For cod in the West of Scotland, the Irish Sea and the Kattegat, the Commission proposes that no fishing takes place in 2012, given the poor state of these stocks. Also the Commission proposes a TAC reduction for 53 further stocks. The proposed changes would amount to an overall reduction in TACs (by weight) of 11% compared to 2011. The Commission's goal is to set TACs at science-based levels which help recover the stocks and make fisheries sustainable in the long term.

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 Old Mayo railway line bags top EU tourism prize

View of Mulranny, © copyright Mulranny 2011Mayo's Great Western Greenway has just been designated one of the great cycle trails of Europe. Together with twenty-one destinations from across Europe the Great Western Greenway, Co Mayo, received the 2011 EDEN Award for exemplary regeneration and promotion of their declining physical sites.

From abandoned mines and disused factories to derelict railways and overgrown farmsteads, these neglected sites once played a key role in European history. Through well-considered sustainable regeneration people can rediscover the past and learn about traditional ways of life.

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 Irish college student wins EU Contest for Young Scientists

Alexander AminiLast Tuesday in Finland Alexander Amini from Dublin was awarded the highest accolade at the 23rd European Union Contest for Young Scientists. The 15 year old Castlenock College student won the prize in computing with his Tennis Sensor Data Analysis project.

The prize winning science project was in the top three selected by an international jury from among the 87 projects from 37 countries. The other two projects are from Switzerland and Lithuania. The prize winners - all under the age of 21 years - will share prize money totalling € 51,500.

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 Strong demand for EU € 4 billion 15yr bond in support of Ireland and Portugal

Last Friday, the European Union (EU) placed a € 4 billion bond with 15 years maturity, notifying strong investors' demand for this benchmark bond. The operation took place under the European Financial Stabilisation Mechanism (EFSM) and was carried out by the European Commission on behalf of the EU. From the proceeds Ireland and Portugal will receive € 2 billion each as further loans as part of their financial assistance packages, in line with the overall funding requirements.

The new issuance is the first EU bond with a maturity of longer than 10 years. This maturity extension to 15 years is expected to enhance debt sustainability and to improve the liquidity outlook for both countries.

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News in brief
 European Day of Languages: English studied as a foreign language by 95% of pupils at upper secondary level in the EU27 in 2009

According to Eurostat figures published earlier this week to mark European Day of Languages, 82% of pupils at primary and lower secondary level and 95% of those in upper secondary level were studying English as a foreign language in the EU in 2009. The second most commonly studied foreign language at primary and lower secondary level was French (16% of pupils), followed by German (9%) and Spanish (6%), while at upper secondary level it was German (27%), followed by French (26%) and Spanish (19%).

In Ireland the most commonly studied foreign languages at lower secondary level were French (19%) and German (6%). French (58%) and German (16%) were also the most commonly studied languages at upper secondary level.

 European Commission sets the rules for allocation of free emissions allowances to airlines

AirplaneThe European Commission this week took an important step for the aviation industry to join other economic sectors in the fight against climate change. Aviation will become part of the EU's emissions trading system (EU ETS) from 2012.

The European Commission published the benchmark values which will be used to allocate greenhouse gas emission allowances free of charge to more than 900 aircraft operators.

 The Single Market through the eyes of the people: a snapshot of citizens' and businesses' views and concerns

European citizens are, in general, satisfied with the possibilities that the Single Market offers in terms of a bigger choice of products (74% for EU as a whole and 75% for Ireland), more jobs (52% for EU as a whole and 64% for Ireland) and fair competition (47% for EU as a whole and 59% for Ireland).

On the other hand, the Single Market is perceived as only benefiting big companies (62% for EU as a whole but 44% for Ireland), worsening working conditions (51% for EU as a whole and 39% for Ireland) and not benefiting poor and disadvantaged people (53% for EU as a whole and 39% for Ireland). 28% of those interviewed are considering working abroad in the future.

These are some of the key results in the latest Eurobarometer survey on the Single Market. They also show that many Europeans are not aware of the Single Market and its benefits (35% for EU as a whole but 43% for Ireland).


Today (Thursday 29) - Friday 30 September: Competitiveness Council, Brussels

Friday 30 September: Letterkenny Europe Direct Centre - Volunteer Information Stands and lunch

Monday 3 October: Eurogroup, Brussels

Monday 3 October: Employment, Social, Health & Consumer Affairs Council, Luxembourg

Monday 3 to Sunday 9 October: European SME week 2011

Tuesday 4 October: Economic & Financial Affairs Council, Luxembourg

Thursday 6 October at 9 a.m.: Interview on World View with President Barroso. Citizens can submit questions to President Barroso up to 5 October. He will answer them in a live interview, which will be broadcast on World View and Euronews TV.

Thursday 6 October: Ireland Wales Programme Annual Event 2011: Cross-border Partnerships: Connecting Regions & People, Dublin 

Monday 17 to Tuesday 18 October: European Council, Brussels

Public consultations
 Public consultation on strengthening EU measures to reduce emissions of fluorinated gases

The European Commission launched on 26 September a public consultation on strengthening EU measures to reduce emissions of fluorinated gases, a group of industrial gases which are extremely powerful contributors to global warming.

A Commission review, which was also adopted on 26 September, concluded that the EU's existing Regulation on fluorinated gases ('F-gases') is having a significant impact but that, without further measures, F-gas emissions are expected to remain at today's levels in the long term. The review identifies wide scope for further cost-effective emission reductions, mainly due to the growing feasibility of replacing F-gases in several sectors with alternatives that make less or no contribution to climate change. Potentially the EU could eliminate up to two thirds of today's fluorinated gas emissions by 2030, it finds.

The consultation runs until 19 December 2011 and is addressed to all interested stakeholders.

 Photography competition for primary schools

To coincide with the European Year of Active Ageing and Solidarity between Generations 2012 the European Commission Representation in Ireland has launched a photography competition for primary schools. Pupils from Third, Fourth, Fifth or Sixth class are asked to take a photograph which captures the theme of the European Year 2012.

12 winning entries will be selected for publication in a 2012 wall calendar. The top three photographers will each receive a digital camera and the overall winner will also receive a camera for his or her school.

To enter pupils should complete the online entry form at and upload their photo.

Please read the competition guidelines on the competition website before you begin. If you have any other questions, you can also contact us at

The deadline for receipt of entries is 5 p.m. on Monday 21st November 2011.

Spotlight on:
 EU Economic governance Six Pack - what is it – what's next?

View of European Parliament sessionIn September 2010 the Commission presented six legislative proposals on economic governance (the so-called Six-Pack). In order for it to come into force, the pack must be agreed by 1) the European Parliament, and 2) EU governments, meeting in Council.

The European Parliament yesterday (Wednesday) gave its final agreement and voted to adopt the package.

The Council is expected to give its agreement on 4 October 2011 allowing entry into force by end-2011-beginning of 2012 – and ensuring that the next European Semester of economic policy coordination gets underway with a more solid legal base (see MEMO/11/364).

The legislative package contains the most comprehensive reinforcement of economic governance in the EU and the euro area since the launch of the Economic and Monetary Union.

Broader and enhanced surveillance of fiscal policies, but also macroeconomic policies and structural reforms were proposed. New enforcement mechanisms are laid down for non-compliant euro area Member States.


The package has two main objectives:

1. Stronger preventive and corrective action to ensure fiscal sustainability

2. Reducing macro-economic imbalances and promoting competitiveness through preventive and corrective action.


1. Stronger preventive and corrective action to ensure fiscal sustainability

Member States must regard their fiscal policies as a matter of common concern and avoid excessive deficits.  These rules are enshrined in the Treaties and detailed in the Stability and Growth Pact (SGP). The preventive arm of the SGP (based on Article 121 of the Treaty) aims to provide guidance ex ante to ensure that fiscal policy making is consistent with fiscal sustainability. To this effect, each year Member States set out in their budgetary plans the measures needed to achieve their medium-term budgetary objectives (MTO) in their Stability or Convergence Programmes (SCP).

The new governance system introduces changes in 3 key areas:

Stronger preventive arm

- Stricter rules: Progress towards the MTO will be assessed also on the basis of expenditure developments. Expenditure growth should be linked to the mid-term GDP growth rate, so that any extra expenditure is financed by either expenditure cuts or an increase in revenue.

- Better enforcement: Failure to respect the agreed principles will make the concerned Member State liable to a warning from the Commission. Following the warning, the Commission may draft a recommendation to the Member State to take corrective action. The recommendation will be adopted by the Council by qualified majority voting.  If the Member State does not take appropriate action within the deadline specified in this Council recommendation, the Commission will immediately recommend to the Council that it adopts a decision establishing that no effective action has been taken qualified majority. If the Council does not adopt the decision and the Member State concerned persists in failing to take appropriate action, one month later the decision will be considered again and will be adopted unless a simple majority of Member States vote against it (the so-called reverse simple majority voting procedure).

For euro area Member States, the recommendation will be backed by an enforcement mechanism (based on Article 136 of the Treaty) in the form of an interest-bearing deposit amounting to 0.2% of GDP. For euro area Member States which misrepresent deficit and debt data relevant to the SGP, an additional fine of up to 0.2% of GDP can be imposed.  At the same time, the professional independence of national statistical authorities is reinforced.

Excessive Deficit Procedure

The Excessive Deficit Procedure (EDP) implements the obligations in the Treaty for Member States to keep deficits below 3% of GDP and government debt below or sufficiently declining towards 60% of GDP. The high debt-to-GDP ratios reached in many Member States already before the crisis, and the related sovereign debt problems in some, show that the existing EDP was not effective in curbing debt developments.

The Commission has proposed giving teeth to the corrective part of the SGP through a numerical benchmark for debt reduction and stepping up financial sanctions for euro area Member States. The two key changes concerning the EDP are:

- Stricter rules: it will be possible to open an EDP on the basis of the debt criterion. Member States with government debt ratios in excess of 60% of GDP should reduce this ratio in line with a numerical benchmark, which implies a decline of the amount by which their debt exceeds the threshold at a rate in the order of 1/20th per year over three years. If they do not, they could be placed in EDP depending on the assessment of all relevant factors and taking in particular into account the influence of the cycle on the pace of debt reduction.

- Better enforcement: a non-interest-bearing deposit of 0.2% of GDP may be requested from a euro area country that is placed in EDP. On a recommendation by the Commission, a decision to impose this sanction will be adopted by the Council unless a qualified majority of Member states vote against it (the so-called reverse qualified majority voting procedure). In case of non-compliance with the initial recommendation for corrective action, this non-interest-bearing deposit will be converted into a fine. The fine will be increased in case of repeated non-respect of the recommendations.

National budgetary frameworks

The reform of the SGP is complemented by a new directive on national budgetary frameworks. It is increasingly clear that the structures and processes in place in the Member States which determine how fiscal policy is undertaken are key to the fiscal decisions taken. Setting minimum requirements for their quality and for consistency with the common fiscal framework of the EU, the Directive will trigger a substantial improvement of the budgetary decisions of those Member States where institutional weaknesses have interfered with their ability to ensure effective economic governance.

The key features are:

- Enhanced reliability: Member States should ensure that their fiscal frameworks, are in line with minimum quality standards and cover all administrative levels (national, regional and local), allowing for  more clarity and peer pressure.

- Consistency with the SGP: National fiscal planning should adopt a multi-annual perspective, so as to achieve the MTO. Numerical fiscal rules should also promote compliance with the reference values for the deficit and debt in the Treaty.

- Greater transparency: Member States must guarantee the transparency of the budget process by providing the relevant information on existing extra-budgetary bodies and funds, tax expenditures and contingent liabilities with potentially large impacts on public budgets, for example government guarantees.

Member States bring their fiscal frameworks in line with the requirements set by the directive by 2013. However, euro area Member States have committed to achieve this objective already in 2012.

2. Reducing macro-economic imbalances and promoting competitiveness through preventive and corrective action.

Over the past decade, Member States have made divergent economic choices, leading to competitiveness gaps and to major macroeconomic imbalances within the EU. A new surveillance and enforcement mechanism will be set up to identify and correct such issues much earlier called the Excessive Imbalance Procedure (EIP) based on Article 121.6 of the Treaty. It will rely on the following main elements:

- An early warning system: an alert system is established based on an economic reading of a scoreboard consisting of a set of indicators covering the major sources of macro-economic imbalances. The composition of the scoreboard indicators may evolve over time.  The aim of the scoreboard is to trigger in-depth studies which will do deep dive analyses to determine whether the potential imbalances identified in the early-warning system are benign or problematic. The Commission can organise missions, with the ECB if appropriate, to conduct the in-depth reviews which shall be made public.

- Preventive and corrective action: The new procedure allows the Commission and the Council to adopt preventive recommendations under article 121.2 of the Treaty at an early stage before the imbalances become large. In more serious cases, there is also a corrective arm where an excessive imbalance procedure can be opened for a Member State. In this case, the Member State concerned will have to submit a corrective action plan with a clear roadmap and deadlines for implementing corrective action. Surveillance will be stepped up by the Commission on the basis of regular progress reports submitted by the Member States concerned.
- Rigorous enforcement: A new enforcement regime is established for euro area countries. It consists of a two-step approach whereby an interest-bearing deposit can be imposed after one failure to comply with the recommended corrective action. After a second compliance failure, this interest-bearing deposit can be converted into a fine (up to 0.1% of GDP).  Sanctions can also be imposed for failing twice to submit a sufficient corrective action plan. The decision-making process in the new regulations is streamlined by prescribing the use of reverse qualified majority voting to take all the relevant decisions leading up to sanctions. This semi-automatic decision-making procedure makes it very difficult for Member States to form a blocking majority.

Next steps: Final agreement on the legislation by Council and Parliament will allow the procedure to be applied in time for the next European Semester (beginning in January 2012). The Commission aims at finalising the scoreboard design in the coming weeks following the scoreboard adoption process outlined in the new legislation.

Whilst EIP surveillance under normal circumstances will follow the European semester timetable, in case of emergency, a special clause in the legislation means the procedure can be activated at any moment allowing immediate intervention in countries where imbalances are more serious.

Throughout the "six-pack", the European Parliament is given a key role in ensuring transparency, promoting accountability and monitoring enforcement at key decision-making stages through an innovative process of economic dialogue.

The Economic and Monetary Affairs Committee of Parliament will be able to invite the President of the Council, the President of the Eurogroup, the President of the European Council and the Commission to present, report and explain their decisions in the SGP and in the Regulations on macro-economic imbalances.

It will pay particular attention to occasions where the Council rejects Commission recommendations. It can also give the opportunity to an individual Member State which has fallen foul of the rules to be heard by the Committee.