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Press Release Archive for February 2013
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President Barroso welcomes Council agreement on Youth Guarantee (28 February 2013)

European Commission President José-Manuel Barroso has welcomed the political agreement reached on the proposed Youth Guarantee Recommendation at the EU's Council of Employment and Social Affairs Ministers on 28th February. Under the Youth Guarantee Member States should put in place measures to ensure that young people up to age 25 receive a good quality offer of employment, continued education, an apprenticeship or a traineeship within four months of leaving school or becoming unemployed.

Speaking in Dublin today, President Barroso commented "Too many young Europeans are asking if they will ever find a job or have the same quality of life as their parents. They need answers from us. That is why, for the past two years, the European Commission pushed the urgent need to tackle youth unemployment to the top of Europe's political agenda. 6 billion euros have been earmarked for the Youth Employment Initiative to help the young unemployed.  Now, with the Youth Guarantee, young people have a real chance of a better future. I call on Member States to translate this agreement into concrete action as swiftly as possible."

The agreement was also welcomed by European Commissioner for Employment, Social Affairs and Inclusion László Andor, who said "Given the record numbers of young jobless, I am very pleased that the Council has approved the Youth Guarantee proposal so quickly. It is crucially important that Member States urgently put in place measures to make the Youth Guarantee a reality and so to urgently get young people into work. EU funds can help but they also need to invest their own money to avoid higher costs in the future."

The Recommendation, proposed by the Commission on 5th December 2012 as part of the Youth Employment Package, gives Member States a clear benchmark and precise guidelines for establishing their own Youth Guarantee scheme on the basis of six axes:

  1. establishing strong partnerships with all stakeholders
  2. ensuring early intervention and activation to avoid young people becoming or remaining NEETs (not in employment, education or training)
  3. taking supportive measures that will enable labour market integration
  4. making full use of EU funding to that end
  5. assessing and continuously improving the Youth Guarantee and
  6. implementing the scheme rapidly.

The Commission is ready and willing to make available substantial financial contributions from the European Social Fund and other EU structural funds. At the same time, the Commission confirmed in the 2013 Annual Growth Survey adopted in late 2012 that Youth Guarantee schemes are key measures that should be prioritised within growth-friendly fiscal consolidation. For the Commission, investment in Youth Guarantee schemes is crucial expenditure if the EU wants to preserve its future growth potential.

Establishing schemes similar to the Youth Guarantee have already proven effective in a number of countries, in particular Austria and Finland. In Finland, a review of a youth guarantee-type scheme that operated there showed an acceleration in the drawing up of personalised plans for young people as well as a reduction in unemployment since the scheme's introduction. Austria  also has youth guarantee type measures and at the same time one of the lowest youth unemployment rates in Europe. one of the lowest youth unemployment rates in Europe.

Implementing the Youth Guarantee requires Member States to establish strong partnerships with schools and universities, training providers, employment services, social partners, career guidance providers, youth support services and youth organisations to ensure early intervention and action. Member States can make full use of the European Social Fund and other structural funds, and will be required to assess and continuously improve their Youth Guarantee schemes. Furthermore, on 7-8 February 2013 the European Council decided to create a Youth Employment Initiative setting aside €6 billion for the period 2014-2020 to be allocated to regions where youth unemployment exceeds 25%.. These funds will be available to implement the Youth Guarantee.

The numbers of unemployed young people on the EU labour market are unacceptable – 5.7 million in the EU in December i.e. 23.4% of the workforce under 25. In in Greece and Spain the figure is over 55%. The figure for young people aged 15-24 not in employment, education or training is 7.5 million. Young people are the most vulnerable in the European labour market, and increasingly run the risk of being marginalised. This has immediate consequences for the people concerned and for our economies, but also medium and long-term implications for society as a whole, with an increased risk of future unemployment, poverty and health problems.

The economic cost of not integrating young people into the labour market is enormous - over €150 billion per year, or 1.2% of EU GDP according to a study by the European Foundation for the Improvement of Living and Working Conditions (Eurofound). Some countries, such as Bulgaria, Cyprus, Greece, Hungary, Ireland, Italy, Latvia and Poland, are paying 2% or more of their GDP to cover the costs of NEETs. Avoiding these economic costs now and in the future outweighs by far the fiscal costs of the Youth Guarantee.

For more information:

Press release: IP/12/1311: Youth employment: Commission proposes package of measures (5 December 2012)

Youth Employment Page 

László Andor's website 

Follow László Andor on Twitter 

Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion 

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Equal Pay Day: Women in Europe work 59 days ‘for free’ (28 February 2013)

16.2 per cent: that’s the size of the gender pay gap, or the average difference between women and men’s hourly earnings across the EU. Ireland (13.9 per cent), while better than the EU average, is still behind nine of the 27 EU countries. This is according to latest figures released by the European Commission to coincide with Equal Pay Day. The EU-wide event marks the extra number of days that women would need to work to match the amount earned by men: currently 59 days, meaning this year the day falls on 28 February.

"European Equal Pay Day reminds us of the unequal pay conditions women still face in the labour market. While the pay gap has declined in the recent years, there’s no reason to celebrate. The pay gap is still very wide and much of the change has come from a decline in men’s earnings rather than an increase for women”, said Vice-President Viviane Reding, the EU's Justice Commissioner. "The principle of equal pay for equal work has been enshrined in the EU Treaties since 1957. It is high time that it is put in practice everywhere. We need to work together to deliver results not only on Equal Pay Day, but on all 365 days of the year!"

Gender pay gap statistics

Source: Eurostat 2010 (except for Greece: 2008)

Table showing gender pay gap statistics in the EU 

The report shows that the gap varies significantly between countries in the EU, from below 10 per cent in Slovenia, Poland, Italy, Malta, Luxembourg and Romania to above 20 per cent in Finland, Greece, Germany, Austria, Czech Republic and Estonia.

The figures confirm a slight downward trend in the gender pay gap from 17 per cent or higher in previous years. But at 16.2 per cent, the playing field is still far from level, with women consistently earning less than their male counterparts for work of equal value. The slight decline can also be partly explained by the impact of the economic downturn on many sectors traditionally dominated by male workers (such as construction or engineering), rather than improvements in pay and working conditions for women. At the same time, the proportion of men working part-time or in less well-paid jobs has increased in recent years.

Background

To help tackle the pay gap, the Commission has launched the “Equality Pays Off” initiative to make companies more aware of the business case for gender equality and equal pay. Given the challenge of ageing populations and increasing skill shortages, the initiative aims to support companies to better access the untapped female talent pool to secure future business success. It will offer a platform for business to exchange of good practice in attracting, retaining and developing top talent and reducing the gender pay gap.

One of the events under the initiative is a "Business Forum" to be held in Brussels on 21 March 2013. 150 companies from all over Europe will come together to exchange experience in fostering gender equality, in particular tackling the causes of the gender pay gap.

The Commission is also currently preparing a report on the application in practice of the Equal Pay Directive  across the EU. The report will include an overview of  landmark EU case-law on equal pay. It will also look at guidance on gender-neutral job evaluation and job classification systems. The report is scheduled for adoption in summer 2013.

For more information

Homepage of Vice-President Viviane Reding 

European Commission – Gender pay gap

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Irish project to help mothers and babies gets €6 million EU funding (28 February 2013)

A project led by University College Cork (UCC) with a Cork based SME partner Metabolomic Diagnostics Ltd. has secured €6 million for their research into combatting pre-eclampsia, a life-threatening pregnancy complication. The condition, whereby high blood pressure arises in the second half of pregnancy, accounts for up to one-quarter of maternal deaths in Europe and more than 500,000 infant deaths annually worldwide. Ultimately, the project will help to improve the outcome of pregnancy for both mothers and babies.

The IMPROvED project (IMproved PRegnancy Outcomes by Early Detection) is one of 26 research projects focussing on rare diseases that the European Commission today, on Rare Disease Day 2013, announced will receive funding worth a total of €144 million. The projects will help improve the lives of some of the 30 million Europeans suffering from a rare disease.

Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science said: "Most rare diseases affect children and most of them are devastating genetic disorders resulting in greatly reduced quality of life and premature death. We hope that these new research projects will bring patients, their families and health professionals closer to a cure and support them in their daily battle with disease."

Click here to listen to Commissioner Geoghegan-Quinn explain more.

To date, no clinically useful screening test exists for pre-eclampsia and, as a result, clinicians are unable to offer targeted surveillance or known/emerging preventative strategies for the many suffers of this rare disease.  The project aims to develop an early pregnancy screening test which will identify patients at risk and allow timely intervention to reduce the life-threatening complications of the disease.

Professor Louise Kenny, the project coordinator in UCC said "We are delighted to receive €6 million EU funding for this project as pre-eclampsia affects almost one in 20 first time mothers and globally causes approximately 70,000 maternal deaths each year". 

The Irish Centre for Fetal and Neonatal Translational Research in UCC where this research will be carried out, is among the seven research centres the Irish Government announced earlier this week it has committed €200 million to over the next six years.

Mr Charles Garvey from Metabolomic Diagnostics said "We believe that an early pregnancy-screening test can make a major contribution to maternal safety and this project, once completed, will help accelerate its adoption".

The 26 selected projects bring together over 300 participants from 29 countries in Europe and beyond, including teams from leading academic institutions, SMEs and patients' groups. The goal is to pool resources and work beyond borders, to get a better understanding of rare diseases and find adequate treatments.

The 26 new projects cover a broad spectrum of rare diseases such as cardiovascular, metabolic and immunological disorders. They will aim at:

  • developing substances that may become new or improved therapies for patients;
  • understanding better the diseases' origins and mechanisms;
  • better diagnosing rare diseases; and
  • improving the management of rare diseases in hospital and healthcare settings.

Teams will work on varied challenges, including: a new 'bioartificial' liver support system to treat acute liver failure; powerful data processing operations to develop novel diagnostic tools, biomarkers and screening strategies for therapeutic agents against rare kidney diseases; and the clinical development of a drug to treat alkaptonuria, a genetic disorder which leads to a severe and early-onset form of arthritis, heart disease and disability for which there is currently no effective treatment.

Many of the new projects will contribute to the International Rare Diseases Research Consortium (IRDiRC), the biggest collective rare diseases research effort world-wide. Initiated by the European Commission, together with national and international partners, its key objective is to deliver, by 2020, 200 new therapies for rare diseases and the means to diagnose most of them. The new projects will bring the number of EU-funded collaborative research projects related to rare diseases to close to 100 over the last six years. Altogether, they represent an investment of almost 500 million euro.

To view all the projects, please see MEMO/13/148 and visit the website.

Background:

A disease or disorder is defined as rare in Europe when it affects not more than 1 in every 2 000 persons. Yet, because there are so many different rare diseases – between 6 000 and 8 000 – taken altogether they affect a significant share of the population. In the EU, as many as 30 million people suffer from a rare disease, many of them are children. Most rare diseases have genetic origins whilst others are the result of infections, allergies and environmental causes. They are usually chronically debilitating or even life-threatening.

More information

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Youth unemployment a priority for Barroso (28 February 2013)

“Here in Ireland, and all around Europe, too many young people are asking if they will ever find a job or have the same quality of life as their parents.”

European Commission President, José Manuel Barroso was speaking at an IBEC conference in Dublin this morning.

As he did so, EU ministers meeting in Brussels are discussing the Commission’s proposal for a “Youth Guarantee”. The Guarantee would see governments committing themselves to give every young European a job, further education, or work-focused training at the latest four months after becoming unemployed.

“Ministers are discussing our proposal in Brussels today,” he said. “ I call on them to reach an ambitious decision, to restore a sense of hope among our young people..”

The Commission regularly expresses concerns over the skills mis-match in the EU labour market. Here President Barroso underlines that there are simultaneously high levels of unemployment and high levels of skill shortages, including in Ireland.

The full text of President Barroso's address to the IBEC Conference is reproduced below.

 

Address by José Manuel Durão Barroso, President of the European Commission, to the IBEC Conference, Dublin 28 February 2013

"LET'S CHOOSE GROWTH"

  
Taoiseach,

Distinguished guests,


I would like to thank the President and the CEO of IBEC, Paul Rellis and Danny McCoy, for inviting me to join you today.  It is a pleasure to speak to such a top-notch group of business leaders from Ireland and across the EU.

The financial and economic crisis has fundamentally changed the parameters within which both business and politics are done.  Instinctively we know this – but have we changed the way that we work to reflect this new reality?  Is Europe ready to embrace the competitiveness challenge?  To continue and deepen the reforms that have recently begun? Or do some people still think we will "get back to normal" once the crisis has passed? 

My theme today is that we must "choose growth" – and we must urgently and actively adapt our policies and attitudes to deliver it.  We are all part of making this choice – politicians, businesspeople, trade unionists and the public. 

This morning I want to outline some of the growth enhancing policies being developed at EU level and to urge you to support them.

Over the past four years a concerted effort has been made by EU Member States to consolidate national budgets and to implement structural reforms.  We see in Spain, here in Ireland, and in Portugal, the progress that can be made when the political will of governments and the determination of the population come together to build a better future.

The EU has provided crucial financial support for programme countries and put in place a range of new instruments to underpin our common currency, the euro.

Measures to promote growth and get the most out of our single market have been given priority.  European spending has been re-oriented towards growth-releasing investment.  And the governance of the euro area has been strengthened to ensure better economic and fiscal coordination.

As a result the markets are today more stable and there are signs that confidence is starting to return.  But there are unacceptably high rates of unemployment in many Member States, and growth rates remain very depressed.  As the European Commission's Winter Economic Forecasts published last week show, getting and keeping Europe on the path to sustained economic growth remains a formidable challenge.

The world is changing.  New competitors have emerged, bringing new challenges but also new opportunities.  Europe urgently needs to learn to perform better if we are to compete effectively with them.

And Europe is facing its own systemic issues: an ageing population, increasing energy costs, the impact of climate change, and now also systemic unemployment.

The economic crisis was triggered by events in the financial markets. But it exposed two very fundamental problems.  The first, a generalised loss of external competitiveness.  The second, latent internal competitive imbalances that left the European Union, and the euro area in particular, vulnerable to asymmetric economic shocks. 

On the surface, Europe's aggregate and average performance looked pretty good right up until the crisis.  In more or less the decade up to 2008 European GDP growth outstripped that of the US and we created 3 million more jobs.  And still today there are 5 EU Member States in the top 8 of the Global Competitiveness Index.

But under the surface lurks very uneven performance from one Member State to another.  We have to go down to 22nd place in the Competitiveness Index to reach the 10th EU Member State, and the 15th is in 41st place.

These relative positions reflect the differences which exist inside the European Union as well as our comparative performance against global competitors.  For example looking at productivity levels, the very best Member States are twice as productive as the worst. 

This has an impact on relative standards of living, since high productivity levels mean that, even with high wages and other costs, unit costs can be kept at a competitive level.  We therefore see that over the last decade those Member States who allowed wages to rise faster than productivity have experienced an average loss of around 30% compared to the most competitive.

Before the crisis there was a collective failure to address these emerging competitiveness gaps, even among those Member States who shared a common currency. The European mechanisms in place to correct the problems were sometimes ignored, sometimes deliberately circumvented.  

The competitiveness challenge is rapidly becoming the most urgent problem European countries face today. 

Not because competitiveness is an end in itself.  But because it is the means to drive prosperity, to sustain European living standards, European values, our societies, our natural environment.  Interestingly it is precisely those European countries with the most effective social protection systems that remain among the most successful and competitive economies in the world.

Ladies and gentlemen

Europe faces a moment of truth.  Either we recognise that "business as usual" will consign us to a gradual decline, to the second rank of the new global order. Or we take the bold and ambitious course of growth.

The European Commission has tabled a clear strategy for sustainable, smart and inclusive growth. Our policy was endorsed by all 27 Member States – and now needs to be implemented. 

By setting common goals, our agenda for growth, the Europe 2020 strategy seeks to support reform, inspire confidence and restore investment - and it needs your support.

We are working closely with Business Europe as well as the other social partners, since the active involvement of the private sector is essential. 

This is a transformative agenda, which gears up all available tools to promote Europe's future and lasting competitiveness.

Tools such as trade policy.  Access to our single market is a coveted prize for our international partners.  Negotiating with one voice on behalf of the EU, the European Commission is opening up considerable opportunities for European business in return.

We have concluded a number of agreements with partners such as South Korea and Singapore. We should soon finalise a deal with Canada. We are about to start negotiating with Japan and are looking at a deeper relationship with China.

And under the Irish Presidency we hope to be able to start negotiating a deep and comprehensive new trade agreement with the US which could bring us an increase of 1% of EU GDP. 

The single market remains Europe's greatest asset when it comes to competitiveness.  It allows European businesses the scope to grow to a size where they can become world leaders.  Many of you in this audience have built your businesses through access to European markets.  Much of the inward investment Ireland has enjoyed is due to that access.

But there is also more to be had from our single market.  That is why the European Commission has presented two packages of proposals to tackle some of the remaining barriers to doing business across the EU.  Barriers to entrepreneurship such as punitive insolvency regimes. Restrictions to e-commerce such as difficulties in cross-border card payments or divergent copyright rules.

And, given the real difficulty that entrepreneurs and businesses have to obtain the financing they need to expand their businesses, the urgent need to develop alternative sources of long term funding which deal with Europe's over-reliance on bank lending.

Despite all the advances of the single market, today we continue to have 27 mini-markets in certain key infrastructures. We have therefore prioritised measures to complete the opening up of core network industries such as rail and energy. 

Ireland is a case in point.  A few years ago who would have thought that an island could be exporting electricity?  Thanks to an EU funded interconnector [a 300 million euro loan from the European Investment Bank and a 100 million euro grant from the European Union budget] Ireland's new renewable energy sources can be developed and sold into the UK market.

The Commission will not only be keeping the pressure up for agreement on all these single market measures, but we will pay particular attention to the effective implementation of the reforms on the ground.

Because we are very aware that how regulation is designed and implemented has a direct impact on competitiveness.  I know this is a topic on which IBEC has strong views and that many of you are critical of what you see as "Brussels red tape". Things are changing.  We are pursuing a policy of "smart regulation".  Regulation only where needed and regulation that must reach its intended objectives and deliver sustainable prosperity without strangling economic operators, in particular SMEs.

The European Commission is taking action. We have reduced red tape – we have exceeded the target of 25% promised by the end of 2012. That means 40 billion euros of savings.

We are rigorous in our impact assessments, estimating costs and benefits.  We have put in place a micro and SME test with a presumption they should be excluded from legislation. 

We are launching fitness checks to screen the body of existing law to see where the overall regulatory burden at EU and national levels could be reduced by eliminating overlapping and unnecessary requirements.

European competitiveness also depends on Europe's people and societal well-being. 

Profound reform has a clear and immediate social impact.  Whilst society as a whole will benefit, it is not an option that some sectors of the population alone bear the brunt of the change whilst others cream off the profits. 

Here in Ireland, and all around Europe, too many young people are asking if they will ever find a job or have the same quality of life as their parents.

We need to give these young people a better prospect. That is why in the recent budget negotiations the Commission fought to secure a large increase in funding for youth. Under the Erasmus programme more students will benefit from mobility opportunities. And a new Youth Employment Initiative will provide 6 billion euro in much-needed support for young people in regions with youth unemployment rates above 25%. 

The Commission has proposed a Youth Guarantee under which every young European should be guaranteed a job, further education, or work-focussed training at the latest four months after becoming unemployed. 

Ministers are discussing our proposal in Brussels today.  I call on them to reach an ambitious decision, to restore a sense of hope among our young people. 

The sad fact is that we simultaneously have high levels of unemployment and skill shortages. The shortfall in ICT professionals could reach 700 000 by 2015.  Opportunities exist and we must train our young people to fill them.

We need Irish and Europe businesspeople to help us identify and fill the skills gap in this and other sectors.  You are key players in helping ensure that both vocational training and more academic education are effectively meeting labour market needs.

Next week the European Commission will launch the Grand Coalition for Digital Jobs.  Working in partnership with business, industry associations, and Member States, we are already collecting pledges on new jobs, internships, training places, start-up funding, and free online university courses. 

Ladies and gentlemen,

Through European trade policy, the single market, European social policy, and smart regulation, the European Commission is gearing up all the tools at its disposal to drive competitiveness.

Yet Europe's ability to meet the competitiveness challenge, to choose growth, will increasingly depend on actions by Member States rather than on regulation from Brussels.

Reforms in areas such as labour markets, pensions, public administration and education to name but a few.  Areas where specific solutions are needed, reflecting the diversity of Member States' particular circumstances, social models, traditions, risks and opportunities.

Reforms that touch daily local life.  For example, to make the local service sector more competitive.  Here in Dublin, we see the wider benefits that the liberalisation of the taxi sector has brought. 

These are things that should not be regulated from Brussels.  But since they make a real difference to the relative economic well-being of a Member State, they are increasingly matters of common concern, especially in the context of a shared currency.

So there is a role for the European level to work in close cooperation and partnership with Member States to identify growth-boosting reforms that are specific and right for each country. 

And to ensure that the complacency and imbalances of the past do not re-emerge.

Europe is on the way towards such a new model through our enhanced system of economic governance, with its country-specific recommendations and specific surveillance mechanisms for macro-economic and fiscal policy.

We are building a stronger base than ever for sustaining European competitiveness and avoiding the mistakes of the past.

For Europeans, competitiveness can never be just about reducing the costs of products and services. It requires careful balancing within a complex mosaic of economic, social and political factors.  It means hard work and often results in profound change. That is why it is an inherently political responsibility.

So an increased pooling of economic policy-making needs to be matched by an increase in democracy and accountability.

For this reason the blueprint for the deepening of economic and monetary union that the European Commission presented last year identifies the need to move towards political union.

Because a choice for growth cannot be imposed from Brussels.  Being competitive requires a constant effort, it involves active choices by business, government at all levels, and ultimately by citizens.  As I said a moment ago, this agenda needs your support.  You can take the opportunities I have outlined and grow your businesses. 

But I would ask you also to speak out for Europe.  Confidence is returning to Ireland and to Europe.  You can be part of creating that positive, growth enhancing climate.

I hope that together, we will take the right decision.  I hope that Europeans will choose growth.

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Youth unemployment a priority for Barroso (27 February 2013)

“Here in Ireland, and all around Europe, too many young people are asking if they will ever find a job or have the same quality of life as their parents.”

European Commission President, JM Barroso will speak at an IBEC conference in Dublin early tomorrow morning.

As he does so, EU ministers meeting in Brussels will be discussing the Commission’s proposal for a “Youth Guarantee”. The Guarantee would see governments committing themselves to give every young European a job, further education, or work-focused training at the latest four months after becoming unemployed.

“Ministers are discussing our proposal in Brussels today,” he will say. “I call on them to reach an ambitious decision, to restore a sense of hope among our young people.”

The Commission regularly expresses concerns over the skills mis-match in the EU labour market. Here President Barroso underlines that there are simultaneously high levels of unemployment and high levels of skill shortages, including in Ireland.

MORE

“…Profound reform has a clear and immediate social impact.  Whilst society as a whole will benefit, it is not an option that some sectors of the population alone bear the brunt of the change whilst others cream off the profits. 

Here in Ireland, and all around Europe, too many young people are asking if they will ever find a job or have the same quality of life as their parents.

We need to give these young people a better prospect. That is why in the recent budget negotiations the Commission fought to secure a large increase in funding for youth. Under the Erasmus programme more students will benefit from mobility opportunities. And a new Youth Employment Initiative will provide 6 billion euro in much-needed support for young people in regions with youth unemployment rates above 25%. 

The Commission has proposed a Youth Guarantee under which every young European should be guaranteed a job, further education, or work-focussed training at the latest four months after becoming unemployed. 

Ministers are discussing our proposal in Brussels today.  I call on them to reach an ambitious decision, to restore a sense of hope among our young people. 

The sad fact is that we simultaneously have high levels of unemployment and skill shortages. The shortfall in ICT professionals could reach 700 000 by 2015.  Opportunities exist and we must train our young people to fill them…"

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EU Commission prohibits Ryanair's takeover of Aer Lingus (27 February 2013)

The European Commission has prohibited the proposed takeover of the Irish flag carrier Aer Lingus by the low-cost airline Ryanair. The acquisition would have combined the two leading airlines operating from Ireland. The Commission concluded that the merger would have harmed consumers by creating a monopoly or a dominant position on 46 routes where, currently, Aer Lingus and Ryanair compete vigorously against each other.

This would have reduced choice and, most likely, would have led to price increases for consumers travelling on these routes. During the investigation, Ryanair offered remedies. The Commission assessed them thoroughly and carried out several market tests. However the remedies proposed fell short of addressing the competition concerns raised by the Commission.

Commission Vice President in charge of competition policy Joaquín Almunia said: "The Commission's decision protects more than 11 million Irish and European passengers who travel each year to and from Dublin, Cork, Knock and Shannon. For them, the acquisition of Aer Lingus by Ryanair would have most likely led to higher fares. During the procedure, Ryanair had many opportunities to offer remedies and to improve them. However, those proposals were simply inadequate to solve the very serious competition problems which this acquisition would have created on no less than 46 routes."

Ryanair and Aer Lingus are by far the most important carriers operating out of Ireland. They compete directly on 46 routes. It was the third time that the proposed acquisition of Aer Lingus by Ryanair was notified to the Commission. In 2007 the Commission prohibited Ryanair's first attempt to acquire Aer Lingus (see IP/07/893) and this decision was upheld by the EU General Court (MEMO/10/300). In 2009, the second notification by Ryanair was withdrawn.

The Commission took into account the changes in market circumstances since 2007, for example the fact that the market positions of Ryanair and Aer Lingus have become even stronger, with their combined market shares going up from 80% in 2007 to 87% in 2012 for short-haul flights out of Dublin. The number of routes to and from Ireland operated in competition by Ryanair and Aer Lingus has increased from 35 in 2007 to 46 in 2012.

The combination of Ryanair and Aer Lingus would have led to very high market shares on all of these 46 routes:

  • On 28 routes the proposed merger would have created an outright monopoly.
  • On 11 further routes, the only alleged competitive constraint to the merged entity would have come from charter airlines. However, this constraint would have remained weak because charter airlines have a very different business model.
  • Finally, on 7 routes Ryanair and Aer Lingus operate alongside other scheduled carriers. In addition to their very high market shares Ryanair and Aer Lingus are very close competitors - if not each other's closest competitors – on these routes. The reason is that the business model of competing scheduled operators tends to focus on bringing connecting passengers to their own network hubs - typical examples are British Airways (to London Heathrow), Lufthansa (to Frankfurt) and Air France (to Paris Charles de Gaulle) – as opposed to the point-to-point connections that Ryanair and Aer Lingus offer.

The proposed merger would therefore have removed the currently vibrant competition between Ryanair and Aer Lingus on all these routes where their activities overlap.

Moreover, the Commission's investigation confirmed the existence of high barriers to entry stemming, in particular, from Ryanair's and Aer Lingus' strong market positions in Ireland. The market investigation showed that there was no prospect that any new carrier would enter the Irish market after the merger, in particular by the creation of a base at the relevant Irish airports, and challenge the new entity on a sufficient scale.

In short, customers' travelling options would have been substantially reduced and it is unlikely that competitors would have been able to sufficiently constrain the merged entity in its market behaviour. Higher prices for passengers would have been the likely outcome.

Remedies proposed by Ryanair

Ryanair offered several sets of remedies during the procedure. The final remedy package consisted mainly of the divestiture of Aer Lingus' operations on 43 overlap routes to Flybe and the cession of take-off and landing slots to IAG/British Airways at London airports, so that IAG/British Airways would operate on 3 routes (Dublin-London, Shannon-London, and Cork-London). Flybe and IAG committed to operate the routes for 3 years. Additional slot divestitures on London-Ireland routes were also offered.

However, the Commission's investigation demonstrated that these remedies were insufficient to ensure that customers would not be harmed, taking into account the scope and magnitude of the competition concerns raised by the proposed transaction on the 46 routes. In particular, the Commission found that Flybe was not a suitable purchaser capable of competing sufficiently with the Ryanair/Aer Lingus merged entity. The investigation also showed that IAG/British Airways would not constrain the merged entity to a sufficient degree and would have little incentive to stay on the routes beyond a 3 year period. In addition, the Commission could not conclude with the requisite degree of certainty that the proposed commitments could actually be put in place in a timely manner. Nor was it certain that they would work in practice and for a sustained period of time.

During the investigation, the Commission gathered views from a large number of market participants in Ireland and internationally, including competitors, customers, travel agents, consumer associations, public authorities and airport operators. The Commission carried out such market tests on Ryanair's successive remedy proposals three times.

Background

The deal was notified to the Commission for regulatory clearance under the European Union's Merger Regulation on 24 July 2012. On 29 August 2012, the Commission started an in-depth investigation (see IP/12/921). The deadline for a decision was extended to assess the remedies submitted on 7 December 2012. The parties were warned in the Statement of Objections sent in November 2012 that the merger raised serious concerns and could be prohibited.

Since 2004, the Commission has examined 15 mergers and several alliances in the air transport sector. This decision is the third prohibition. The first prohibition related to the initial attempt by Ryanair to acquire Aer Lingus in 2007. The second prohibition decision was about the proposed acquisition by Olympic Air of Aegean Airlines in 2011 (see IP/11/68). All the prohibition decisions were related to transactions involving two airlines having large bases at the same "home" airport.

When assessing airline mergers, the Commission first analyses the effects of the proposed transaction on the routes on which both companies operate. In addition, the Commission takes into account whether the merger would affect the possibility of one airline to discipline the other one by entering a certain route at any given moment. Both questions require particular attention when the merging airlines have large bases at the same "home" airport.

Companies and products

Ryanair is a low-fares carrier operating point-to-point scheduled air services essentially in Europe. The company has a fleet of 305 aircraft and 51 bases across Europe, with the most important bases being London Stansted, Brussels Charleroi, Milan Bergamo, and Dublin. In the IATA summer season 2012, Ryanair operated in particular 62 short-haul routes ex Dublin.

Aer Lingus is an Irish-based carrier. It offers essentially point-to-point scheduled air transport services. Aer Lingus is based principally at Dublin Airport wherefrom it operates a substantial portion of its scheduled flights. In the summer season 2012, Air Lingus (including Aer Arann) operated 66 short-haul routes ex Dublin. Aer Lingus is not a member of any airline alliance and develops a concept of “open network architecture”, whereby its neutrality allows it to partner across alliances and offer connectivity through major hubs to worldwide destinations in addition to carrying point-to-point traffic.
Ryanair’s minority shareholding in Aer Lingus represents 29.8% of Aer Lingus’ total issued share capital and makes Ryanair the largest shareholder in Aer Lingus. This shareholding is currently under review by the UK Competition Commission. The Irish Government is the next largest shareholder with a stake of around 25.1%.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involvingcompanies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. >From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). There are currently two other on-going phase II investigations. The first one examines the proposed combination of Munksjö and the European label and processing business of Ahlstrom, in the paper industry (see IP/12/1338), with a deadline on 16 May 2013. The second phase II investigation concerns Syniverse's project to acquire rival Mach in the data house clearing sector (see IP/12/1439), with a deadline on 30 May 2013.

More information on the case is available at:
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6663
See also MEMO/13/144: Commission prohibits Ryanair's proposed takeover of Aer Lingus – frequently asked questions

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Almost two in five children are at risk of poverty in Ireland (27 Februray 2013)

According to data compiled by the EU’s statistics agency Eurostat, 38 per cent of Ireland’s under-18s are more at risk of one of three forms of poverty or social exclusion – that is living in homes with an income of less than 60 per cent of the national median, where their parents cannot afford to pay rent, mortgage or utility bills on time or where adults have paid work for less than 20 per cent of their available time. Only children in Bulgaria (52 per cent), Romania (49 per cent), Latvia (44 per cent) and Hungary (40 per cent) are more likely to be exposed to any of these types of poverty.

The Eurostat figures for Ireland relate to 2010 and may have worsened since then due to the ongoing impact of the economic crisis. The figures for the other EU countries relate to a year later, 2011, and show that children in the Scandinavian countries of Finland, Sweden and Denmark were the least likely to face poverty, at 16 per cent each, followed by Slovenia (17 per cent), the Netherlands (18 per cent) and Austria (19 per cent). The EU average is 27 per cent.

The European Commission has called for EU countries to spend more on early education and pre-school care to help “break the cycle of disadvantage”. In new recommendations proposed on 20 February, the Commission urges member states to channel more of their budgets into high-quality, accessible and inclusive pre-schooling as “the best way for ensuring that children achieve better and earn more later in life”. The recommendations form part of the 'Social Investment Package for Growth and Cohesion' aimed at improving economic growth through social policy.

The figures come from a report published by Eurostat and are based on data from the EU statistics on Income and Living Conditions (EU-SILC) survey - the EU reference source for comparative statistics on income distribution, poverty and living conditions. The report looks at several factors affecting child poverty, such as the composition of the household in which the children live and the labour market situation of their parents.

The full Eurostat press release is available here.

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Better protection of workers against exposure to hazardous chemicals (26 February 2013)

The European Commission has proposed to better protect workers from risks linked to exposure to chemicals at the workplace. Every day millions of EU workers are potentially exposed to hazardous chemicals in a wide range of employment sectors including manufacturing and service industries, agriculture, health care and education.

The Commission has therefore proposed to amend five existing EU health and safety Directives on protection of workers from exposure to harmful chemicals to align them with the latest rules on classification, labelling and packaging of chemicals.

The proposal would ensure that manufacturers and suppliers of chemical substances and mixtures would have to provide harmonised labelling information on hazard classification, alerting the user to the presence of hazardous chemicals, the need to avoid exposure and the associated risks. Employers use this information when carrying out workplace risk assessments. This allows employers to put in place appropriate risk management measures to protect workers' health and safety, such as process enclosure, ventilation systems and the use of personal protective equipment.

The proposal has been the subject of two rounds of consultation of employer and trade union representatives at EU level as well as discussions in the Advisory Committee on Safety and Health at Work (ACSHW). It now goes to the European Parliament and the EU's Council of Ministers for adoption.

Background

The classification, labelling and packaging of substances and mixtures regulation, Regulation (EC) 1272/2008, implements the United Nations Globally Harmonised System for the harmonised classification of hazardous chemicals. It foresees the information to users about the related health hazards by means of harmonised communication elements, like pictograms and hazard and precautionary statements on packaging labels, and safety data sheets. It entered into force in January 2009.

The five Occupational Safety and Health Directives that would be amended by this proposal (92/58/EEC , 92/85/EEC, 94/33/EC, 98/24/EC  and 2004/37/EC ) all currently refer to existing EU chemical classification and labelling legislation that will be repealed on 1 June 2015.

For more information

see EU Regulation (EC) 1272/2008

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The future evolution of the Economic and Monetary Union (25 February 2013)

In an address to a Meeting of Chairpersons of EU Finance Committees in Dublin on Monday (25 February), European Commission Vice-President Olli Rehn responsible for Economic and Monetary Affairs and the Euro said: "The challenges ahead of us will not be resolved without hard work and serious efforts. There is no time for complacency. In the end, what we want to achieve with all of this is a competitive and inclusive economy that enables us to achieve sustainable growth and job creation, while maintaining our social model and ensuring a sustained rise in welfare. This requires an institutional set-up that supports these objectives. That's why rebuilding of the EMU is essential for our long-term welfare and for the sake of sustainable growth and job creation."

See below for the full text of Vice President Rehn's address.

Honourable Minister, Members of Parliament,

Ladies and Gentlemen,

Thank you for the invitation to this meeting of chairpersons of Finance Committees. The theme of this discussion is to look forward. However, seeing this meeting is taking place here in Ireland, I first of all want to underline the great efforts that have been taken in this country throughout the crisis. Thanks to the unforeseen measures and dedication of the Irish people, Ireland will in the end of this year be able to exit the programme and fully return to the markets. The hard work has paid off.

Let me give you an overview of where we stand at the moment in the European economy on the basis of the Winter Economic Forecast, published by the Commission on Friday. The forecast shows signs of improving sentiments on the financial markets. Reforms are starting to pay off, the deficits are declining and Europe will gradually return to growth. However, current hard data was disappointing, in particular GDP in the fourth quarter. The recession has deepened at the end of last year. Compared to the previous quarter, GDP shrunk by 0.5% in the EU and 0.6% in the euro area (in Q4 2012).

On this basis, this year we will see overall zero growth of GDP in the EU, although this hides that the quarterly developments are likely to look more dynamic over the course of the year. As the recovery begins to take hold more firmly in 2014, growth in the EU should amount to 1.6%. Inflation is expected to fall below 2% this year and decline further to 1½ % in the next. The major risk to the forecast would be to lower our guard on the necessary reforms to bring back growth and stable jobs.

Europe has made progress with the necessary fiscal consolidation. For 2012, we expect the headline deficit to have declined to 3.8% in the EU and 3.5% in the euro area. In the euro area, this reflects a fiscal consolidation effort of about 1½% of GDP. Given the progress made, on the basis of 2013 budgets we expect further measures of about ¾ % of GDP in the EU and the euro area that should bring the deficit below 3% of GDP this year in the euro area.

The unemployment rate in the EU amounted to 10.5% in the EU and 11.4% on the euro area in 2012. These figures unfortunately mask large differences between Member States.

This reflects the large adjustment challenges that some Member States are still facing – despite the significant progress made. The rebalancing process after the credit-fuelled boom has progressed, but we should be clear that it will continue to weigh considerably on growth and public finances for some time to come, especially in some countries.

Ladies and Gentlemen,

The forecast makes it clear that the work is not finished yet, we have great challenges ahead of us. The debate on the future of the EMU cannot be limited to institutional issues, but we must focus on growth, job creation and competitiveness of European industry at least with the same vigour and energy. We face three over-arching challenges.

First, we need to find a solution to the challenge of sustainable growth. Second, we need to continue with on-going efforts to meet the challenge of fiscal sustainability. Third, we have to meet the challenge of rebuilding the Economic and Monetary Union.

The first challenge, sustainable growth and job creation, calls for us to reverse the trend of European losses in global competitiveness.

Most of all, Europe needs more entrepreneurs and businesses that are hungry and able to grow. This implies tackling bottlenecks to growth by creating an entrepreneur-friendly business environment with better access to finance and leaner and more efficient business administration.

We need to focus on boosting productive investment – both public and private. Public banks such as the European Investment Bank have an important role to play here. The increase in the EIB's capital and thus lending capacity agreed last year is a very concrete example of this.

At the same time, we must not forget that private investment is the prime driver of growth and jobs. To unblock private investment, we must complete the repair of the financial sector to restore the flow of credit to households and business. It is not about "bailing out bankers". It is about letting credit flow to create growth and jobs. Public and private investments are not contradictory, both are crucial to restore growth.

We must also look beyond our borders for growth, by embracing a forward-looking and proactive trade policy. In Europe, about 30 million jobs, or more than 10 % of the total workforce, depend on sales to the rest of the world. The decision last week by the US and the EU to initiate procedures to launch negotiations on a ground-breaking, comprehensive and deep free trade agreement – the Transatlantic Trade and Investment Partnership – is of enormous importance in this respect.

Successfully facing the sustainable growth challenge is critical if we are to raise living standards and service the debts that we hand down to future generations. With the future in mind, growth must indeed be sustainable, not only in economic terms but also in terms of its impact on the environment and climate. Green growth has great potential both in environmental and economic terms and needs to remain a top priority.

The second challenge, fiscal sustainability, requires staying the course of reform and consistent fiscal consolidation. Public debt in the EU has risen from around 60% of GDP before the crisis to around 90% of GDP now. On the basis of extensive economic research, we know that when public debt rises above 90% it tends to have a negative impact on economic dynamism, which translates into low growth for many years.

Nevertheless, public finances in the EU are gradually improving thanks to, on the one hand, enhanced EU governance tools, and on the other hand, determined effort by governments. This is mirrored by an increase in markets' confidence in the actions being taken by EU governments.

The situation does, however, vary substantially among Member States, which is why we apply a differentiated approach to consolidation, taking into account the specific challenges of each and every Member State when determining the structural fiscal adjustment effort needed. If growth deteriorates in an unexpected manner, a country may receive extra time to correct its excessive deficit, provided it has delivered the agreed structural fiscal effort and does the necessary structural reforms to underpin medium-term stability and growth.

Finally, our third challenge is rebuilding the Economic and Monetary Union. Last November the Commission put forward a Blueprint which presents the economic rationale to bring about the completion of EMU and outlines a roadmap with short-, medium- and long term actions to that end. It balances increased responsibility and increased solidarity. It also indicates the possible need for Treaty changes as far as deeper integration is concerned.

Throughout the measures proposed, ensuring democratic legitimacy is at centre stage. As representatives of national parliaments, you all know very well that parliaments are where legitimacy and accountability of policy decisions vis-à-vis the citizen are realised. It is to you that citizens turn for answers. This great responsibility requires finding the best way forward through an open debate and discussion.

The blueprint builds on the Community method. By allowing non euro area participation in the new arrangements whenever possible, ensures convergence between current and future euro area Member States.

For the short term (6 to 18 months), we envisage proposals within the current Treaties, starting with the banking union. The agreement on the Single Supervisory Mechanism reached in December was an important step. But we must also develop a European Resolution Mechanism. A resolution fund should build on contributions from the financial industry.

Also, we will come with proposals for increased prior coordination of major economic reforms. Due to our close economic integration, reforms in one country will often have spill-overs on other Member States.

We will also need to strengthen economic policy coordination and secure stronger ownership of reforms through contractual arrangements aiming to facilitate the implementation of structural reforms. They will define the more detailed measures to which the Member States commit themselves and which can be coupled with financial support.

In the medium-term (18 months to 5 years), we envisage further integration involving Treaty changes. Our guiding principle is that any steps towards increased solidarity and mutualisation of risk would have to be combined with increased responsibility; that is, with further sharing of budgetary sovereignty and deeper integration of decision-making.

Ladies and Gentlemen,

Let me conclude. The challenges ahead of us will not be resolved without hard work and serious efforts. There is no time for complacency. In the end, what we want to achieve with all of this is a competitive and inclusive economy that enables us to achieve sustainable growth and job creation, while maintaining our social model and ensuring a sustained rise in welfare. This requires an institutional set-up that supports these objectives. That's why rebuilding of the EMU is essential for our long-term welfare and for the sake of sustainable growth and job creation.

But we cannot get lost in institutional arm-wrenching, neither at national or European level. In looking to the future the over-arching objectives need to be at centre stage. Through hard work and team play I am confident that we can meet the challenges and achieve these objectives.

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Exposure to second-hand smoke reduced, but still too high, says Commission report (22 February 2013)

Protection from passive smoking has improved considerably in the EU, according to a report published by the Commission today. In 2012, 28% of Europeans were exposed to second-hand smoke in bars – down from 46% in 2009. At 8%, although slightly up from 2009, exposure to second-hand smoke in Ireland remains among the lowest in the EU, behind only Sweden (3%) and the UK (6%). The report also revealed a slight fall in Irish smokers, from 31% in 2009 to 28% in 2012.

Tonio Borg, European Commissioner for Health and Consumer Policy, said: "The report published today shows that member states have made steady progress in protecting their citizens from second-hand smoke. Exposure to smoking, however, still varies widely across the EU and there is a long way to go to make "Smoke Free Europe" a reality. I urge all countries to step up their efforts to enforce legislation, commend those who have adopted ambitious smoke free laws, and urge the others to follow-suit".

Second-hand smoke is the smoke breathed in from other people's cigarettes and a recognised cause of disease, disability and death in the EU. According to conservative estimates[1], more than 70 000 adults in the EU died from exposure to tobacco smoke in 2002, many of them non-smokers or employees exposed to passive smoking in their workplaces.

The report draws on data compiled by each of the 27 EU member countries, following the 2009 Recommendation on Smoke-free Environments which called upon governments to introduce measures to protect against exposure to second-hand smoke by November 2012. In 2004, Ireland was the first country in Europe to impose an outright ban on smoking in the workplace (with the effect of banning smoking in pubs and restaurants).

The report also dispels fears about smoking bans being bad for business, with various studies showing that the economic impact has been limited (neutral or even positive over time). It also illustrates wide variations across the EU in terms of both the scope and enforcement of smoke-free legislation.

Other key findings:

  • All EU member states report that they have adopted measures to protect citizens against exposure to tobacco smoke.
  • National measures differ considerably in extent and scope. About half of the member states have adopted or strengthened their smoke-free legislation since 2009. Many also started earlier.
  • Enforcement seems to be a problem in some Member States. Complex legislation (i.e. legislation with exemptions) is found to be particularly difficult to enforce.
  • The actual exposure rates for EU citizens dropped overall from 2009 to 2012 (e.g. for citizens visiting drinking places the exposure rate dropped from 46% to 28%). There are however very significant differences between Member States.
  • Belgium, Spain and Poland are examples of countries where the adoption of comprehensive legislation led to very significant drops in exposure rates within a short period of time.
  • The positive health effects of smoke-free legislation are immediate and include a reduction in the incidence of heart attacks and improvements in respiratory health.
  • Public support for smoke-free legislation is very high in Europe. A 2009 survey showed that a majority of Europeans are supportive. This is also supported by national surveys which reveal that support increased after introduction of effective measures. Overall, 83% of Irish smokers reported that the smoke-free law was a “good” or “very good” thing.

Further information

Full Report (including comparative charts and graphs for different countries)

More information on smoke-free legislation in the EU 

Commissioner Borg's website

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Winter forecast 2012-14: Gradually overcoming headwinds (22 February 2013)

While financial market conditions in the EU have improved substantially since last summer, economic activity was disappointing in the second half of 2012. However, leading indicators suggest that GDP in the EU is now bottoming out and we expect economic activity to gradually accelerate. The pick-up in growth will initially be driven by increasing external demand. Domestic investment and consumption are projected to recover later in the year, and by 2014 domestic demand is expected to take over as the main driver of strengthening GDP growth.

The weakness of economic activity towards the end of 2012 implies a low starting point for the current year. Combined with a more gradual return of growth than earlier expected, this leads to a projection of low annual GDP growth in 2013 of 0.1% in the EU and a contraction of -0.3% in the euro area. Quarterly GDP developments are somewhat more dynamic than the annual figures suggest, and GDP in the fourth quarter of 2013 is forecast to be 1.0% above the level reached in the last quarter of 2012 in the EU, and 0.7% in the euro area.

The contrast between the improved financial market situation and the muted macroeconomic prospects for 2013 is to a large extent due to the balance-sheet adjustment process, which continues to weigh on short-term growth. As this process advances, it will also strengthen the basis for growth in 2014, which is projected at 1.6% in the EU and 1.4% in the euro area.

Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro said: "The ongoing rebalancing of the European economy is continuing to weigh on growth in the short term. The current situation can be summarised like this: we have disappointing hard data from the end of last year, some more encouraging soft data in the recent past, and growing investor confidence in the future. The decisive policy action undertaken recently is paving the way for a return to recovery. We must stay the course of reform and avoid any loss of momentum, which could undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation."

The headlines for Ireland are: Growth stronger than expected; Domestic demand first signs of revival; Positive signs from the financial markets; Mixed export performance; Subdued labour market and inflation; Strong fiscal outturn, Improved prospects.

The full report on Ireland is available here .

Winter 2013 economic forecasts for Ireland

Further information:

Full Brussels press release

Winter Forecast 2013 - full report

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Enhanced safety of offshore gas and oil production (21 February 2013)

Today, the European Parliament and the Council reached a political agreement on the Commission's legislative proposal on the safety of oil and gas operations in the EU. It includes, amongst others, rules with regard to safety controls, environmental protection and public participation.

In the aftermath of the "Deepwater Horizon" accident in the US Gulf of Mexico in May 2010 the Commission reviewed the existing Member States' safety frameworks for offshore operations and proposed new legislation to guarantee that the world's highest safety, health and environmental standards apply everywhere in the EU.

Günther Oettinger, EU Commissioner for Energy said: "I welcome this major step enhancing the safety of offshore oil and gas production in the EU. Past accidents have shown the devastating consequences when things go badly wrong offshore. Recent 'near-misses' in EU waters reminded us of the need for a stringent safety regime. These rules will make sure that the highest safety standards already mostly in place in some Member States will be followed at every oil and gas platform across Europe. Furthermore, the new law will ensure that we react effectively and promptly in the event of an accident and minimise the possible damage to the environment and the livelihoods of coastal communities."

The main elements of the agreed directive are the following:

  • Licensing. The Directive introduces clear rules for effective prevention and response of a major accident. The licensing authority in the Member States will have to make sure that only operators with proven technical and financial capacities necessary to ensure the safety of offshore activities and environmental protection are allowed to explore for, and produce oil and gas in EU waters. Public participation is foreseen prior to the start of exploratory drilling campaigns in previously undrilled areas.
  • Independent national competent authorities responsible for the safety of installations will verify the provisions for safety, environmental protection and emergency preparedness of rigs and platforms and the operations conducted on them. If companies do not respect the minimum standards, Member States will take enforcement actions and/or impose penalties; ultimately, operators will have to stop the drilling or production operations.
  • Obligatory ex ante emergency planning. Companies will have to prepare a report on major hazards for their installation, containing an individual risk assessment and risk control measures and an emergency response plan before exploration or production begins. These plans will need to be submitted to national authorities who will give a go-ahead.
  • Independent verifiers. Technical solutions presented by the operator need to be verified by an independent third party prior to and periodically after the installation is taken into operation.
  • Transparency. Comparable information will be made available to citizens about the standards of performance of the industry and the activities of the national competent authorities. This will be published on their websites. The confidentiality of whistle-blowers will be protected. Operators registered in Member States will be requested to submit reports of major accidents in which they have been involved overseas to enable key safety lessons to be studied.
  • Emergency Response. Companies will prepare emergency response plans based on their rig or platform risk assessments and keep resources at hand to be able to put them into operation when necessary. Member States will likewise take full account of these plans when they compile national emergency plans. The plans will be periodically tested by the industry and national authorities.
  • Liabilities. Oil and gas companies will be fully liable for environmental damages caused to the protected marine species and natural habitats. For damage to waters, the geographical zone will be extended to cover all EU marine waters including the exclusive economic zone (about 370 km from the coast) and the continental shelf where the coastal Member State exercises jurisdiction. For water damage, the present EU legal framework for environmental liability is restricted to territorial waters (about 22 km offshore).
  • EU Offshore Authorities Group. Offshore inspectors of Member States will work together to ensure effective sharing of best practices and contribute to developing and improving safety standards.
  • International. The Commission will work with its international partners to promote the implementation of the highest safety standards across the world. Operators working in the EU will be expected to demonstrate they apply the same policies for preventing major accidents overseas as they apply in their EU operations.

The European Parliament and Council are expected to formally approve the legislation in the coming months.
 
More information on the website of the Commission:
http://ec.europa.eu/energy/oil/offshore/standards_en.htm

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EU Commission increases pressure on Ireland to enforce group housing of sows (21 February 2013)

Today, the European Commission, via a letter of formal notice, called on Ireland to take action to address deficiencies in the implementation of EU legislation concerning the group housing of sows.

The political decision to switch from individual sow stalls to group housing was taken in 2001. Member States have had twelve years to ensure a smooth transition to the new system and to implement the rules. However, so far, and despite repeated calls by the Commission, Ireland has failed to adequately comply with EU law.

In order to improve their welfare EU legislation requires that, as from 1 January 2013, pregnant sows are kept in groups instead of individual stalls during part of their pregnancy.

Member States who do not fulfil their legal obligations in this area undermine animal welfare and cause market distortions to the detriment of businesses that have invested for complying with this requirement.

Following the step taken today by the Commission, Ireland has two months to respond to the letter of formal notice. If it fails to react in a satisfactory manner, the Commission will send a "Reasoned Opinion" requesting that they take the necessary measures to comply with EU law within two months.

The letter of formal notice was also sent to Belgium, Cyprus, Denmark, France, Germany, Greece, Poland and Portugal as those countries also have deficiencies in the implementation of the concerned EU legislation.

Further information

Full text of the EU legislation: Directive 2008/120/EC

Information on Animal Welfare – sow stalls 

Information on infringement procedures

On the general infringement procedure: MEMO/12/12

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Commission urges greater spending on early childhood education and care (20 February 2013)

The European Commission has called for EU countries to spend more on early education and pre-school care to help “break the cycle of disadvantage”. In new recommendations proposed today, the Commission urges member states to channel more of their budgets into high-quality, accessible and inclusive pre-schooling as “the best way for ensuring that children achieve better and earn more later in life”. The recommendations form part of the ‘Social Investment Package for Growth and Cohesion' aimed at improving economic growth through social policy.

There is a large divergence between EU countries in terms of investment and participation in pre-primary education. For instance, enrolment in education at the age of four is 100% in France, while only slightly over 50% in Greece. At just under 70%, Ireland sits below average among countries in the Organisation for Economic Co-operation and Development (OECD) (see table 1 below). While there has been a trend among EU member states and OECD countries in general to increase enrolment in early education between 2005 and 2010 (such as Finland, Denmark, Germany, Slovenia, Estonia, Austria and Poland) there has been a worrying decline in some member states (Greece, Czech Republic and Italy).

The new Social Investment Package calls on EU countries to prioritise social investment and increase the effectiveness of their social protection systems. Stemming from a context where many countries are dealing with similar problems - rising poverty and inequality, ageing populations and soaring unemployment rates while at the same time having to make cuts in public spending – the package urges more targeted social spending, focused on policies which yield “high returns” throughout people's lifetimes, such as childcare, education, training, active labour market policies, housing support and accessible health services.

“Social investment is key if we want to emerge from the crisis stronger, more cohesive and more competitive. Within existing budget constraints, member states need to shift their focus to investment in human capital and social cohesion. Social investment today helps to prevent member states having to pay a much higher financial and social bill tomorrow" declared László Andor, EU Commissioner for Employment, Social Affairs and Social Inclusion.

In addition to the recommendations for breaking the cycle of disadvantage in childhood, the package also set out plans for dealing with care for an increasingly ageing society, confronting homelessness and improving healthcare. It offers guidance to member states on how best to harness EU funding support, notably from the European Social Fund, to implement the outlined objectives.

The Commission aims to secure implementation by using employment and poverty targets in the Europe 2020 strategy and will closely monitor the performance in individual countries through European Semester programme of greater economic policy co-ordination, formulating country-specific recommendations where necessary.

Background

The Social Investment Package is based on an analysis of data (e.g. the 2012 Employment and Social Developments in Europe Review – see IP/5/13) and existing good practices which demonstrate that Member States with a firm commitment to social investment – that is, benefits and services that strengthen people's skills and capabilities – have lower rates of people at risk of poverty or social exclusion, higher educational attainment, higher employment, lower deficits and higher GDP per capita.

The Social Investment Package consists of a Communication setting out the policy framework, concrete actions to be taken by Member States and the Commission and guidance on the use of EU funds to support reforms. It is accompanied by:

  • A Commission Recommendation on 'Investing in Children: breaking the cycle of disadvantage' containing an integrated policy framework to improve children's opportunities
  • A Staff Working Document (SWD) containing evidence on demographic and social trends and the role of social policies in responding to the social, economic and macro-economic challenges the EU is facing
  • A Staff Working Document following up on the 2008 Commission Recommendation on Active Inclusion for people excluded from the labour market
  • The 3rd Biennial Report on Social Services of General Interest to help public authorities and stakeholders understand and implement the revised EU rules on social services
  • A Staff Working Document on Long Term Care, presenting challenges and policy options;
  • A Staff Working Document on confronting homelessness, explaining the situation of homelessness in the European Union and possible strategies to consider;
  • A Staff Working Document on Investing in Health, containing strategies to improve the efficiency and effectiveness of health systems and discussing how health can contribute to social inclusion; and
  • A Staff Working Document outlining how the European Social Fund will contribute to implementing the Social Investment Package.

The Social Investment Package builds upon the European Platform against Poverty and Social Exclusion and complements other recent Commission initiatives to address Europe's social and economic challenges, namely the Employment Package, Youth Employment Package and the White Paper on Pensions. These initiatives have given Member States additional guidance on national reforms needed to honour commitments to the agreed Europe 2020 targets.

Table 1: Enrolment rates at the age of four in education (2005 and 2010)

Table showing enrolment rates at age of 4 in education

 

For more information

MEMO/13/117: Social investment: Commission urges Member States to focus on growth and social cohesion – frequently asked questions

MEMO/13/118: Social investment: Commission urges Member States to focus on growth and social cohesion – social situation in Member States

News item on DG Employment website

László Andor's website 

Follow László Andor on Twitter 

Subscribe to the European Commission's free e-mail newsletter on employment, social affairs and inclusion

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EU Commission approves Risk Equalisation Scheme for health insurers (20 February 2013)

The European Commission has approved under EU State aid rules the state compensations to be granted through the new risk equalisation scheme (RES) for the provision of private medical insurance in Ireland for the period 2013 to 2015. The objective of the scheme is to promote intergenerational solidarity by ensuring better risk sharing between health insurers in the Irish PMI market. The Commission has found that the RES is in line with EU rules on services of general economic interest (SGEI).

Commission Vice-President in charge of competition policy Joaquín Almunia said: "The risk equalisation scheme, which aims to ensure solidarity between generations, is a pillar of Ireland's health policy. The Commission's decision, which is consistent with its previous decisions concerning the Irish system, finds that the aid to insurers is both justified and proportionate in light of the public service obligations they fulfil."
The RES concerns the private medical insurance (PMI) market, which is subject to special regulation in Ireland. Almost half of the population in Ireland has voluntary health insurance in the form of PMI cover, as a complement to the public health system.

PMI operates on the basis of a set of public service obligations:

  • insurers are obliged to accept any applicant who wishes to conclude an insurance contract regardless of age or health status (open enrolment);
  • they cannot terminate a policy contract against the will of the insured person (lifetime cover);
  • they must apply the same premium for a given level of cover regardless of the risk (age, health status) presented by the insured (community rating);
  • and policies must offer a minimum benefit level prescribed by law.

As a result of these obligations, insurers cannot risk-rate their policies. This can result in imbalances on the market if their risk profiles are different.

In the current context of the Irish PMI market, due to its worse-than-average risk profile, the state owned Voluntary Health Insurance Board (VHI) is expected to be a net beneficiary of the RES, while its competitors (i.e. Laya, Aviva, GloHealth) are expected to be net contributors. It is important to note that, on the other hand, net contributors, as a consequence of having a greater proportion of younger and healthier people, enjoy lower claims costs.

The Commission assessed the RES under the EU Framework for State aid in the form of public service compensation adopted in 2012. In particular, the Commission is satisfied that the RES constitutes necessary and proportionate compensation to insurers for discharging their public service obligations. The RES replaces the temporary tax and levy scheme, which was put in place in 2009 and expired at the end of 2012. 

Background

The purpose of the RES is to allow better risk sharing between insurers, by compensating insurers with a worse-than-average risk profile in their portfolio of insured persons. It is designed to partially compensate for the higher costs of insuring an older and less healthy person. The RES operates on the one hand by levying a charge on insurers based on the number of insured persons, and on the other hand by compensating insurers on behalf of each insured person falling into certain specific categories. As a consequence, the scheme decreases the incentive for insurers to avoid the "high risk" section of the population and cherry-pick the "low risk" section of the population. Ireland has put in place mechanisms to ensure that insurers do not receive any overcompensation.

The RES replaces the previous schemes from 2003 and 2009. As in its previous decisions on the risk equalisation scheme of 2003 (see IP/03/677) and the interim tax and levy scheme of 2009 (see IP/09/961) the Commission recognised that due to its importance in the overall health system and, in particular, the special obligations it is subject to, the provision of PMI qualifies as a service of general economic interest (SGEI).

In line with the jurisprudence of the EU Courts, notably the Altmark judgment (case C-280/00), the Commission concluded that the RES constitutes State aid. The Commission also found that the RES satisfies the conditions laid down in the 2012 EU Framework on State aid in the form of public service compensation. It is therefore compatible with the internal market under Article 106(2) TFEU

The non-confidential version of the decision will be made available under the case number SA.34515 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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Horse meat: Commission adopts control plan to tackle food labelling fraud (19 February 2013)

The European Commission has today adopted a coordinated EU control and testing plan to investigate fraudulent practices and enhance consumer confidence following the recent mislabelling of beef products containing horse meat.

Controls (to be financed at a rate of 75% by the EU) will start immediately across member states. The two-pronged programme, to run initially for one month with the possibility of extension for a further two months, introduces:

  1. Controls to detect the presence of unlabelled horse meat in food: the plan introduces controls, mainly at retail level, of foods destined for the final consumer and marketed as containing beef to detect the presence of unlabelled horse meat (indicative total number of 2250 samples across the Union ranging from 10 to 150 per member state). Under EU rules, labelling of foods which suggest only the presence of beef meat where in fact other types of meat may be present, is misleading and in breach of legislation. In the same way, labelling of foods which contain horsemeat, but where this is not mentioned in the list of ingredients, also breaches EU rules on food labelling. 
  2. Testing to detect possible residues of phenylbutazone in horse meat: the plan introduces the testing of 1 sample for every 50 tonnes of horse. Each member state will carry out a minimum of 5 tests. Phenylbutazone is a veterinary medicinal product whose use in food producing animals, including horses, is illegal. The plan provides for regular reporting of the results of the controls to the Commission, such as information on sampling, type of analysis and follow-up controls. Where findings test positive for residues in phenylbutazone in horse meat, information on the country where the animals concerned were certified for slaughter will also be included in the report. Member states have to submit their first report on 15 April 2013, unless testing proves positive, in which case, member states must report the findings immediately. All this information will be included in the Rapid Alert System for Food and Feed (RASFF) so as it can be used immediately by authorities in the member states.

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EU Commission welcomes the latest measures on septic tanks (19 February 2013)

The Commission welcomes the adoption of the National Inspection Plan by the EPA earlier this year.  These measures relate to rulings by the European Court of Justice that Ireland was in breach of EU waste legislation in relation to septic tanks and imposing fines.

The Commission notes that the recent measures will mean Ireland meets the requirements of the Court of Justice judgments and the fines will stop.

The number of septic tanks (close to 500,000 households) in Ireland may cause significant harm to the environment and put human health at risk by polluting surface waters, groundwater and drinking water sources. The Commission trusts that the new system as established by the 2012 legislation and the National Inspection Plan will allow the risk to be properly addressed.

 

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EU Internal Market Scoreboard: Ireland tops the table (19 February 2013)

Despite challenging times, Ireland ranks top in the EU for getting Internal Market Directives into national law. According to a report out today, Ireland is an example of best practice for other Member States to follow.

The latest EU Commission "Internal Market Scoreboard" shows which countries are actually getting EU Directives onto the national statute book and which ones are lagging behind. Ireland comes out top, with a score of 0.0%meaning Ireland has managed to transpose all internal market directives on time.

The EU average "transposition deficit" – the percentage of Internal Market Directives that have not been transposed into national law – has gone from 6.3% in 1997 to a record new level of 0.6% today. However, Ireland's record, at 0.0%, is second to none, meaning that it has transposed all directives in due time.

Internal market directives include such things as measures to simplify paperwork for exports and imports around the EU, common standards of health and safety for consumer goods, a level playing field for e-commerce and many more.

Full tables:  http://ec.europa.eu/internal_market/score/index_en.htm

MORE

Despite the challenging times, Member States have performed better than ever in transposing EU rules into national law on time according to the European Commission's Internal Market Scoreboard published today. The Single Market has a key role to play in bringing Europe out of economic stagnation. But it does not deliver benefits automatically: timely transposition of legislation is a necessary condition for achieving the policy objectives set out in the directives.

The Internal Market Scoreboard was first published fifteen years ago, and today's edition shows great improvements by Member States. The EU average transposition deficit – the percentage of Internal Market Directives that have not been transposed into national law in time – has decreased from 6.3% in 1997 to a record new level of 0.6%, i.e. below the 1% target agreed by the European Heads of State and Government in 2007 and close to the 0.5% deficit proposed in the Single Market Act in April 2011.

"I welcome this new record achieved by the Member States and I am happy with the dynamism and strong commitment they have shown to making enforcement work on the ground. This is the best result ever." said Internal Market Commissioner Michel Barnier.

Table: average transposition deficit

Table: average transposition deficit

In this edition, the best performers are Ireland, Malta, Estonia and Sweden, who managed to implement into their national legislation the highest number of directives. Member States have also succeeded in reducing the total number of incorrectly transposed directives (compliance deficit has fallen further from 0.7% to 0.6%). However, they have increased the number of directives for which transposition is overdue by two years or more.

With regard to the application of EU law, the number of infringements is continuing to decrease, very likely due to the introduction of mechanisms to solve problems of non-compliance with EU law earlier in the process. Compared to November 2007, the number of open infringements is down by 38%. Italy accounts for the highest number of infringement proceedings launched by the Commission, followed by Spain and Greece. The majority of cases continue to be mainly in the areas of taxation and the environment.

When all enforcement indicators are taken into account (see details in the Internal Market Enforcement Table below), Romania, Estonia, Cyprus, the Czech Republic and Lithuania are the best overall performers.

Implementation of Internal Market Directives

  • Ireland is the best transposition performer: it has transposed all directives in due time and has reached a 0.0% deficit. But especially impressive is the improvement of Italy, which has decreased its transposition deficit from 2.4% six months ago to 0.8% today. Romania has also reduced its transposition deficit remarkably from 1.1% to 0.4%. All three Member States share their best practices in this edition of the Internal Market Scoreboard. 
  • The EU average transposition deficit has decreased further from 0.9% to 0.6% over the last six months and the number of Member States achieving the 1% target went up from sixteen to twenty-three.
  • In total, twelve Member States achieved or equalled their best result on the transposition deficit since 1997: the Czech Republic, Estonia, Ireland, Greece, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Slovakia and Sweden, with Italy and Luxembourg falling for the first time under the 1% threshold. This illustrates the high priority given by Member States to timely transposition even in the context of the current economic crisis.
  • Today Member States take on average nine and a half months to transpose EU directives after the transposition deadline has expired. With regard to directives more than two years beyond their transposition deadline (listed in the report), only five Member States did not meet the 'zero tolerance' target.

Infringements

  • The EU average number of open infringement proceedings continues at 31 cases per Member State. Italy accounts for the highest number of infringement proceedings – ten times more than Lithuania, the Member State with the lowest number of cases - followed by Spain and Greece. 
  • Despite this, these Member States have improved over a longer-term perspective: since they joined the EU-Pilot system, the number of cases has decreased by 47% for Italy, 39% for Spain and 25% for Greece. 
  • Environment and taxation account for 45% of all infringement proceedings.
  • The average duration of open infringement proceedings ranges from ten months (Luxembourg) to three years (Sweden).
  • After the Court of Justice establishes a breach of EU legislation, Member States are required to take immediate action to comply with its ruling. Nevertheless, a lot of cases take considerable time – on average more than 17.4 months – to be resolved. For Spain, Ireland and France the period is almost two years. The Communication on Better Governance for the Single Market (see IP/12/587), calls on Member States to speed up the process for complying with judgments of the Court of Justice in the identified key sectors, i.e. achieving full compliance within 12 months on average.

More information

Internal Market Scoreboard website

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Employment Commissioner Andor in Dublin: "Looking Forward: Social Investment as a way out of the crisis" (15 February 2013)

“Social policies need to be a trampoline and not a fishtrap: once in, never out.”  So said EU Employment, Social Affairs and Inclusion Commissioner László ANDOR in Dublin today. He was speaking at the Eurofound Foundation Forum in Dublin Castle where he outlined the Commission’s new Social Investment Package to be presented on 20 February which will call for greater focus on social investment in the national reform programmes of all Member States as part of the European Semester.

Looking Forward: Social Investment as a way out of the crisis


Address by László ANDOR, European Commissioner responsible for Employment, Social Affairs and Inclusion to the Eurofound Forum Social and Employment Policies for a Fair and Competitive Europe

Dublin, 15 February 2013
 
Ladies and Gentlemen,

It is my pleasure to be with you in Dublin today.

I would like to begin by thanking Eurofound for this invitation to address the Foundation Forum on Social and Employment Policies for a Fair and Competitive Europe.

While emerging from the crisis as a stronger and more stable Union is our common goal, we need to ensure that when growth picks up, this growth creates jobs and is inclusive.

But still now we are facing a social emergency in certain parts of the EU, as also President Barroso put it in last year's State of the Union address.

The crisis has led to growing risks of poverty and social exclusion.  Since 2008 the number of people at risk of poverty and social exclusion has increased in 18 out of 26 Member States.

Not only do these trends run counter to European values of fairness and dignity for all, they also pose a threat to our societies, as poverty and social exclusion bring with them significant costs which are not only economic but also social, as the excellent recent Eurofound Quality of Life Survey has pointed out.

The title of my intervention is 'social investment as a way out of the crisis'. But I do not intend to make such a lofty promise here today. What I do intend to communicate is that by investing in our citizens – to develop their skills and capabilities and ensure their adequate livelihoods -  we will be better equipped to emerge out of the crisis stronger, more cohesive, and more competitive in the long run.

This is especially true as we are heading towards a situation of structural labour market shortages. With increased ageing and decreasing fertility, we will soon need all available hands on deck to sustain our budgets and preserve our quality of living.

This is why the Commission will be presenting in 5 days from now the Social Investment Package.

This Package is grounded on the idea that social policies should empower people from an early age, strengthen their capabilities to adapt to risks such as changing career patterns, new working conditions or an ageing population and enhance their opportunities to participate in society across the life course.

Furthermore, it recognises that social policies can yield significant returns over time and represent an investment for growth that is inclusive as well as smart and sustainable.

The Package will call for a strengthened focus on social investments in the context of fiscal consolidation without forgetting about the social protection and stabilisation functions of social policies. Well-designed reforms should enable people to contribute to the economy and to participate in society thereby helping to tackle the social consequences of the crisis and to achieve the objectives of the Europe 2020 Strategy.
The Package will do this by presenting an integrated policy framework that makes the case for an increase in the sustainability and adequacy of social systems through simplification and better targeting.

The fact that some countries have better social outcomes than others while having similar budgets shows there is room for improved efficiency in social policy spending. The package will give clear guidance on how to achieve this.

Improving people's opportunities to integrate in society and the labour market by strengthening their skills and capacities is key. In this sense, social policies need to be a trampoline and not a fishtrap: once in, never out. The Package will therefore outline that support systems need to be targeted, enabling, activating and in principle temporary.

In the past, we have often focused on groups rather than individuals when designing our social policies. The package will give a new direction and stress the importance of a needs-based, individualised approach. Social systems should respond to people's needs at the moments needed. This already starts at young age, and continues throughout life. Think about it: the adequacy of future pensions depends on the human capital of those who are today children.

Preventing and preparing people against life's risks reduces the future need for higher social spending to repair after hardship has happened.

The Commission expect Member States to report on the enhanced focus on social investment in their national reform programmes as part of the European  Semester.

The Commission will monitor progress in these reforms and where relevant propose country specific recommendation in this area.

The Commission will also guide Member States in making the best use of the EU funds, notably the ESF, for supporting social investment.

Furthermore, the Social Investment Package will serve to inform our current discussions on strengthening the social dimension of a genuine Economic and Monetary Union.

Social dimension of the EMU

Ladies and gentlemen,

If the crisis has taught us anything, it is the extent to which Member States' economies are dependent on each other. Increasingly, employment and social policies, and the attendant challenges faced by Member States are a matter of common concern, especially in the Euro zone.

All these aspects represent a strong argument for a social dimension of the EMU to be developed without further delay.

In December, the European Council mandated the President of the Commission and of the European Council to develop proposals and a roadmap for ex-ante coordination of major economic reforms, as well as for solidarity mechanisms to enhance these efforts.

At the same time, the European Council has mandated both Presidents to present measures to develop the social dimension of the EMU, including social dialogue.

In my view, the social dimension of a genuine EMU must be adequately reflected in the EMU’s rules and governance mechanisms, to ensure that economic efficiency and social equity are pursued simultaneously.

The proper functioning of the EMU requires that Member States work together to restore socio-economic convergence, address employment and social imbalances that risk affecting the EMU as a whole, and set up solidarity mechanisms to support Member States in addressing those imbalances.

The monetary union must be able to collectively address the key employment and social problems facing it.

This requires that fiscal objectives are reconciled with employment and social ones. In practice, this also means that fiscal coordination should be supported by fiscal transfers, if these are needed to enable Member States to undertake structural reforms that will help restore growth and jobs.

While the economic crisis has been a stress-test to the EMU, the way we reform the EMU is now a test for the entire EU integration.

A genuine Economic and Monetary Union will mean coordinating reform and investment in the Member States by strengthening a common strategy for growth and jobs and acting on macro-economic imbalances as well as on key employment and social problems.

If the Member States agree to pool more financial, budget and economic sovereignty and want this process to be legitimate in the eyes of the citizens, employment and social problems will need to be addressed. This calls for an improved framework for coordination of employment and social policies.

To ensure that employment and social policies are sufficiently able to deal with the challenges at hand, we need stronger policy benchmarks, for instance on the quality of active labour market policies or on the coverage of life-long learning. The Youth Guarantee also represents a policy benchmark.

Putting such policies in place is a structural reform, which should be supported, if needed, from an EMU fiscal capacity, such as the Convergence and Competitiveness Instrument which the Commission proposed in its Blueprint for a deep and genuine EMU last November.

Policy benchmarks or eventually minimum social standards or national floors should also be envisaged in areas such as social dialogue or minimum wages.

In these areas, policy benchmarks or standards would not require much public investment to implement, but they would provide a clear social underpinning to the way the EMU works. Crucially, they would represent a safeguard that employment and social outcomes are not simply treated as residual variables in the process of macroeconomic adjustment.

Conclusion

Ladies and Gentlemen,

Thank you for again inviting me to take part in this Forum at such a crucial moment in the European year. We are currently preparing for the third European Semester and the forthcoming meeting of Ministers for Employment and Social Affairs on 28 February will be particularly important. Not only do we expect the Ministers to adopt there the youth guarantee, one of the most concrete measures to help the growing group of young people neither in employment education or training. The Ministers will also be discussing the social dimension of the Economic and Monetary Union.

This will be an important step in the development of proposals that the President of the Commission, in close cooperation with the President of the European Council, will present to the June European Council.
I hope today's conference is thought-provoking and informative.

Thank you

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Member States endorse Commission plans to tackle food labelling fraud (15 February 2013)

EU member states have approved the immediate launch of a plan announced earlier in the week (Wednesday 13 February) by Health and Consumer Policy Commissioner Tonio Borg to address the ongoing issue of the mislabelling of meat. In an extraordinary meeting of the EU Standing Committee on the Food Chain and Animal Health (SCOFCAH) held in Brussels today, food safety experts from across Europe endorsed the Commission’s proposals for large-scale testing of beef products to check if they contain horse DNA.

Commissioner Borg said : "I welcome the swift approval by the Member States of the plan I tabled two days ago and I call on them to keep up the pressure in their efforts to identify a clear picture and a sequence of events. Consumers expect the EU, national authorities and all those involved in the food chain to provide all the reassurance needed as regards what they have on their plates.”

The initial one-month testing plan is to start immediately and may be extended for another two months. It introduces a coordinated two-pronged meat control and testing plan across member states to tackle the horsemeat crisis which includes:

  1. Controls, mainly at retail level, of foods destined for the final consumer and marketed as containing beef to detect the presence of unlabelled horse meat (indicative total number of 2250 samples across the Union ranging from 10 to 150 per Member State). Under current EU rules, the labelling of foods which only suggest the presence of beef meat where other species of meat are may actually be present, is misleading and in breach of legislation. In the same way, labelling of foods containing horsemeat is not in line with the EU food labelling legislation, if the presence of horse meat is not mentioned in the list of ingredients. 
  2. Testing of 1 sample for every 50 tons of horse meat for the presence of possible residues of phenylbutazone in horse meat: Each member state will carry out a minimum of 5 tests. Phenylbutazone is a veterinary medicinal product whose use in food producing animals, including horses, is illegal.

The EU will part finance the testing programme, with the results reported to the European Commission which will collate them in the EU's Rapid Alert System for Food and Feed (RASFF) so that they can be immediately used by member states.

More information: http://ec.europa.eu/food/food/rapidalert/index_en.htm

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Commission to launch bioeconomy observatory (14 February 2013)

The European Commission will establish an observatory to map progress and measure the impact of the development of the European Union's bioeconomy, European Commissioner for Research, Innovation and Science Máire Geoghegan-Quinn announced today.

The observatory will gather data to follow the evolution of markets, to map EU, national and regional bioeconomy policies, research and innovation capacities, and the scale of related public and private investments. The observatory will be coordinated by the Joint Research Centre, the Commission's in-house science service.

Commissioner Geoghegan-Quinn said: "It's now one year since we launched our bioeconomy strategy. We are now seeing Member States seize the opportunity offered by the transition to a post-petroleum economy based on smart use of resources from land and sea. It's essential that they do because it will be good for our environment, our food and energy security, and for Europe's competitiveness in the future. This observatory will help keep the momentum going."

The observatory, which is a three year project, will start in March 2013 with the aim of making the data it will collect publicly available through a dedicated web portal in 2014. In this way, the observatory will support the regional and national bioeconomy strategies now being developed by EU Member States.

As well as providing data on the size of the bioeconomy and its constituent sectors the observatory should track a number of performance measures, including economic and employment indicators, innovation indicators, and measures of productivity, social wellbeing and environmental quality. It will also provide a "technology watch” and “policy watch”, to follow the development of science and technology as well of policies related to the bioeconomy.

Already the bioeconomy in Europe is worth an estimated €2 trillion and 22 million jobs. The Commission is considering a new public-private partnership on bio-based industries to accelerate the development of the sector. A decision is expected in June 2013.

The Commissioner made the announcement at a bioeconomy conference in Dublin organised by the Irish Presidency of the Council of the European Union.

Background

The term "Bioeconomy" means an economy based on a smart use of biological and renewable resources from the land and sea, as inputs to food and feed, industrial and energy production. It also covers the use of biowaste, and of bio-based processes for sustainable industries.

The EU Bioeconomy Strategy, adopted on 13 February 2012, has three main pillars:

  1. Investment in research, innovation and skills for the bioeconomy. This should include EU funding, national funding, private investment and enhancing synergies with other policy initiatives.
  2. Development of markets and competitiveness in bioeconomy sectors by a sustainable intensification of primary production, conversion of waste streams into value-added products, as well as mutual learning mechanisms for improved production and resource efficiency. As an example, food waste costs the European taxpayer between €55 and €90 per tonne to dispose of, and produces 170 million tonnes of CO. This waste could be transformed into bio-energy or other bio-based products, creating jobs and growth.
  3. Reinforced policy coordination and stakeholder engagement, through the creation of a Bioeconomy Panel, a Bioeconomy Observatory and regular Stakeholder Conferences.

The strategy seeks synergies and complementarities with other policy areas, instruments and funding sources which share and address the same objectives, such as the Cohesion Funds, the Common Agricultural and Fisheries Policies (CAP and CFP), the Integrated Maritime Policy (IMP), environmental, industrial, employment, energy and health policies.

The strategy is one of the operational proposals under the Innovation Union and Resource–efficient Europe flagships of the Europe 2020 strategy. The need to increase public funding for bioeconomy research and innovation has been recognised under the Commission's future research programme Horizon 2020: €4.7 billion has been proposed for the Challenge “Food security, sustainable agriculture, marine and maritime research, and the bioeconomy”, with complementary funding in other areas of Horizon 2020.

Further information

For further information IP/12/124: Commission proposes strategy for sustainable bioeconomy in Europe

Horizon 2020 

Innovation Union 

Resource-efficient Europe 

Europe 2020 

Joint Research Centre

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Financial Transaction Tax: EU Commission sets out the details (14 February 2013)

The details of the Financial Transaction Tax (FTT) to be implemented under enhanced cooperation have been set out in a proposal adopted by the Commission today. As requested by the 11 Member States[1] that will proceed with this tax, the proposed Directive mirrors the scope and objectives of the original FTT proposal put forward by the Commission in September 2011.

The approach of taxing all transactions with an established link to the FTT-zone is maintained, as are the rates of 0.1% for shares and bonds and 0.01% for derivatives.

When applied by the 11 Member States, this Financial Transaction Tax is expected to deliver revenues of 30-35 billion euros a year.

There are certain limited changes in today's FTT proposal compared to the original one, to take into account the fact that the tax will be implemented on a smaller geographical scale than originally foreseen. These changes are mainly to ensure legal clarity and to reinforce anti-avoidance and anti-abuse provisions.

Algirdas Šemeta, Commissioner responsible for Taxation, said: "With today's proposal, everything is in place to enable a common Financial Transaction Tax to be become a reality in the EU. On the table is an unquestionably fair and technically sound tax, which will strengthen our Single Market and temper irresponsible trading. Eleven Member States called for this proposal, so that they can proceed with the FTT through enhanced cooperation. I now call on those same Member States to push ahead with ambition – to drive, decide and deliver on the world's first regional FTT."

Today's proposal follows EU Finance Ministers' agreement last month to allow the 11 Member States to move ahead with an FTT under enhanced cooperation.

There are 3 core objectives to the FTT. First, it will strengthen the Single Market by reducing the number of divergent national approaches to financial transaction taxation. Secondly, it will ensure that the financial sector makes a fair and substantial contribution to public revenues. Finally, the FTT will support regulatory measures in encouraging the financial sector to engage in more responsible activities, geared towards the real economy.
 
As in the original proposal, the FTT will have low rates, a wide base and safety nets against the relocation of the financial sector. As before, the "residence principle" will apply. This means that the tax will be due if any party to the transaction is established in a participating Member State, regardless of where the transaction takes place. This is the case both if a financial institution engaged in the transaction is, itself, established in the FTT-zone, or if it is acting on behalf of a party established in that jurisdiction.

As a further safeguard against avoidance of the tax, today's proposal also adds the "issuance principle". This means that financial instruments issued in the 11 Member States will be taxed when traded, even if those trading them are not established within the FTT-zone. Furthermore, explicit anti-abuse provisions are now included.

As in the original proposal, the FTT will not apply to day-to-day financial activities of citizens and businesses (e.g. loans, payments, insurance, deposits etc.), in order to protect the real economy. Nor will it apply to the traditional investment banking activities in the context of the raising of capital or to financial transactions carried out as part restructuring operations.

The proposal also ring-fences refinancing activities, monetary policy and public debt management. Therefore, transactions with central banks and the ECB, with the European Financial Stability Facility and the European Stability Mechanism, and transactions with the European Union will be exempted from the tax.

Next Steps

The proposed Directive will now be discussed by Member States, with a view to its implementation under enhanced cooperation. All 27 Member States may participate in the discussions on this proposal. However, only the Member States participating in enhanced cooperation will have a vote, and they must agree unanimously before it can be implemented. The European Parliament will also be consulted.

Background

In September 2011, the Commission tabled a proposal for a common system of financial transactions tax, with the objectives of securing a coherent approach to taxing this sector in the Single Market, ensuring a fair contribution from the financial sector to public finances, and contributing to more efficiency and welfare enhancing financial sector trading.

Following intense discussions on this file, there was consensus at the ECOFIN meetings in summer 2012 that unanimity between the 27 Member States would not be reached within a reasonable period. Nonetheless, a number of Member States expressed a strong willingness to go ahead with the FTT. Therefore, in autumn 2012, 11 Member States wrote to the Commission, officially requesting enhanced cooperation on the financial transaction tax to be authorised, on the basis of the Commission's 2011 proposal.

The Commission carefully assessed these requests against the criteria for enhanced cooperation in the Treaties. In particular, it was established that enhanced cooperation on the FTT would not have a negative impact on the Single Market or on obligations, rights and competences of non-participating Member States. On the basis of that assessment, in October 2012, the Commission proposed a Decision to allow enhanced cooperation on the FTT. This was backed by the European Parliament in December and agreed by European Finance Ministers at the ECOFIN in January 2013.
 
Once the green light for enhanced cooperation had been given, the Commission could proceed with the detailed proposal on the FTT to be applied by the 11 Member States, which it has presented today.

Further information

For more information, see:

Financial Transaction Tax through Enhanced Cooperation: Questions and Answers

Full text of the proposal 

Commissioner Šemeta's website

_______________________________

[ 1] France, Germany, Belgium, Austria, Slovenia, Portugal, Greece, Slovakia, Italy, Spain, Estonia

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Irish energy consumption down by 12% between 2008 and 2011 (13 February 2013)

Energy consumption in Ireland decreased by 12 per cent between 2008 and 2011. This is the second largest drop in the EU according to figures issued today by Eurostat, the statistical office of the European Union. The figures also show that Ireland is one of the most energy dependent countries in the EU with almost 89 per cent imports.

The Irish figures are in line with the EU as a whole where the economic slowdown observed since the beginning of the financial crisis is also visible in the evolution of energy consumption. Gross inland energy consumption1 in the EU27 fell from a level of 1,800 million tonnes of oil equivalent2 (toe) in 2008, to 1,700 mn toe in 2009, increased to 1,760 mn toe in 2010 and then fell again to 1,700 mn toe in 2011. Between 2008 and 2011, energy consumption in the EU27 has decreased by 6%.

The energy dependence rate3, defined as net imports divided by gross consumption, and which shows the extent to which a country is dependent on energy imports, was 54% in the EU27 in 2011, nearly stable since 2008.

Denmark, Estonia, Romania and the Czech Republic – least dependent on energy imports

The five largest energy consumers in 2011 in the EU27 were Germany (316 mn toe, -7.7% compared with 2008), France (260 mn toe, -4.6%), the United Kingdom (199 mn toe, -9.4%), Italy (173 mn toe, -4.8%) and Spain (129 mn toe, -9.4%), which together accounted for nearly two thirds of total EU27 consumption.

Twenty-three Member States registered decreases in their energy consumption between 2008 and 2011, and four increases. The largest falls were recorded in Lithuania (-24.5%), Ireland and Greece ( both -12.3%) and the highest increases in Malta (+16.9%) and Estonia (+4.8%).

In 2011, the least dependent Member States on energy imports were Estonia (12%), Romania (21%) and the Czech Republic (29%). Denmark (-9%) was a net exporter of energy and therefore had a negative dependence rate. The highest energy dependence rates were registered in Malta (101%), Luxembourg (97%) and Cyprus (93%).

Energy consumption and dependence rates 

 

Gross inland energy consumption1, in million toe2

Energy dependence rate3, 2011 (%)

2008

2009

2010

2011

% change 2011/2008

EU27

1 801.0

1 702.0

1 759.4

1 698.1

-5.7

53.8

Belgium

59.6

58.1

61.5

59.7

0.1

72.9

Bulgaria

20.1

17.6

17.9

19.3

-4.1

36.6

Czech Republic

45.3

42.3

44.8

43.8

-3.3

28.6

Denmark

20.2

19.3

20.3

19.0

-6.0

-8.5

Germany

342.9

326.4

336.1

316.3

-7.7

61.1

Estonia

5.9

5.3

6.1

6.2

4.8

11.7

Ireland

15.8

14.7

15.0

13.9

-12.3

88.9

Greece

31.8

30.7

28.8

27.9

-12.3

65.3

Spain

141.9

130.4

130.0

128.5

-9.4

76.4

France

271.8

259.9

267.5

259.3

-4.6

48.9

Italy

181.7

170.0

175.5

172.9

-4.8

81.3

Cyprus

2.9

2.8

2.7

2.7

-7.0

92.6

Latvia

4.6

4.3

4.5

4.2

-7.6

59.0

Lithuania

9.4

8.5

6.9

7.1

-24.5

81.8

Luxembourg

4.6

4.4

4.7

4.6

-1.4

97.4

Hungary

26.8

25.4

26.0

25.2

-5.9

52.0

Malta

1.0

0.8

1.0

1.1

16.9

100.6

Netherlands

83.9

81.6

87.0

81.3

-3.1

30.4

Austria

34.3

32.7

35.0

34.0

-1.1

69.3

Poland

99.0

95.3

101.8

102.2

3.2

33.6

Portugal

25.2

24.9

24.4

23.9

-5.2

77.4

Romania

40.5

35.5

35.7

36.3

-10.2

21.3

Slovenia

7.8

7.1

7.2

7.3

-6.4

48.4

Slovakia

18.4

16.8

17.9

17.4

-5.4

64.2

Finland

36.3

34.4

37.4

35.7

-1.6

53.8

Sweden

50.0

45.7

51.5

49.5

-0.9

36.8

United Kingdom

219.3

207.0

212.2

198.8

-9.4

36.0

 1. Gross inland energy consumption is defined as primary production plus imports, recovered products and stock change, less exports and fuel supply to maritime bunkers (for seagoing ships of all flags). It therefore reflects the energy necessary to satisfy inland consumption within the limits of national territory.

 2. A tonne of oil equivalent (toe) is a standardised unit defined on the basis of one tonne of oil having a net calorific value of 41.868 Gigajoules. It is a convenient common measure used to sum up the different fuels, based on their energy content. Thus, for example, one GJ of nuclear power will be equivalent to 0.024 tonnes of oil, and one tonne of high grade coal contains the same amount of energy as 0.7 tonnes of oil. Lower grades will contain less energy.

 3. The energy dependence rate is defined as net imports (imports minus exports) divided by gross consumption, expressed as a percentage. Gross consumption is equal to gross inland consumption plus the fuel (oil) supplied to international marine bunkers. A negative dependency rate indicates a net exporter of energy. A value greater than 100% occurs when net imports exceed gross consumption. In this case, energy products are placed in stocks and not used in the year of import.

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EU and US to launch negotiations for a Transatlantic Trade Partnership (13 February 2013)

The European Union and the United States have decided to take their economic relationship to a higher level by agreeing to launch negotiations for a comprehensive trade and investment agreement. When negotiations are completed, this EU-US agreement would be the biggest bilateral trade deal ever negotiated – and it could add 0.5% to the EU's annual economic output.

In a joint statement, President of the United States of America Barack Obama, European Commission President José Manuel Barroso and European Council President Herman Van Rompuy stressed that through this negotiation, the United States and the European Union will have the opportunity not only to expand trade and investment across the Atlantic, but also to contribute to the development of global rules that can strengthen the multilateral trading system.

The Transatlantic Trade and Investment Partnership will aim to go beyond the classic approach of removing tariffs and opening markets on investment, services and public procurement. In addition, it will focus on aligning rules and technical product standards which currently form the most important barrier to transatlantic trade. Studies show that the additional cost burden due to such regulatory differences is equivalent to a tariff of more than 10%, and even 20% for some sectors, whereas classic tariffs are at around 4%.

The decision follows last week's discussions between EU Trade Commissioner Karel De Gucht and Unites States Trade Representative Ron Kirk in Washington DC. Chairing the "High Level Working Group on Jobs and Growth", created in November 2011, they finalised a report  recommending the launch of negotiations of a comprehensive trade and investment agreement between the European Union and the United States of America.

Overall economic gains

The transatlantic trade relation is the backbone of the world economy. Together, the European Union and the Unites States account for about half of the world GDP (47%) and one third of global trade flows. Each day goods and services of almost € 2 billion are traded bilaterally, contributing to creating jobs and growth in our economies. Economic ties between our economies are deep and diverse, with aggregate investment stocks in excess of € 2 trillion.

Latest estimates show that a comprehensive and ambitious agreement between the EU and the US could bring overall annual gains of 0.5% increase in GDP for the EU and a 0.4% increase in GDP for the US by 2027. This would be equivalent to €86 billion of added annual income to the EU economy and €65 billion of added annual income for the US economy.

What will this agreement look like?

Negotiations will aim to achieve ambitious outcomes in three broad areas: a) market access; b) regulatory issues and non-tariff barriers; and c) rules, principles, and new modes of cooperation to address shared global trade challenges and opportunities.

A) Market Access

Tariffs: The declared goal of the agreement is to get as close as possible to the removal of all duties on transatlantic trade in industrial and agricultural products, with a special treatment of the most sensitive products.  In general, transatlantic tariff barriers are currently comparatively low, with an average of 5.2% for the EU and 3.5% for the US (WTO estimates). However, given the magnitude of trade between the EU and the US, tariffs still impose costs that are not negligible.

Services: Both sides want to open their services sectors at least as much as they have achieved in other trade agreements to date. At the same time, both sides will seek to open their services markets in new sectors, such as in the transport sector. Both services and investment chapters will also address the sub-federal level of government.

Investment: The aim is to achieve the highest levels of liberalisation and investment protection that both sides have negotiated to date in other trade deals.

Procurement: European companies whose business depends on public procurement represent 25% of GDP and 31 million jobs. Hence, new business opportunities can be created by opening up access to government procurement markets at all levels of government without discrimination for European companies.

B) Regulatory Issues and Non-Tariff Barriers: towards a more integrated transatlantic marketplace

In today's transatlantic trade relationship, the most significant trade barrier is not the tariff paid at the customs, but so-called “behind-the-border” obstacles to trade, such as, for example, different safety or environmental standards for cars. Currently, producers who want to sell their products on both sides of the Atlantic often need to pay and comply with procedures twice to get their products approved. The goal of this trade deal is to reduce unnecessary costs and delays for companies, while maintaining high levels of health, safety, consumer and environmental protection.

In that spirit, both sides intend to align as far as possible or mutually accept their standards and procedures, by negotiating an ambitious agreement on sanitary and phyto-sanitary (health and hygiene standards, for example for food products) as well as technical barriers to trade. In addition, they will work on regulatory compatibility in specific sectors, such as chemical, automotive, pharmaceutical, and other health sectors such as medical appliances. Business communities on both sides have provided guidance on where the most significant barriers lie.

Since not all regulatory divergences can be eliminated in one go, both sides envisage a "living agreement" that allows for progressively greater regulatory convergence over time against defined targets and deadlines.

The regulatory area is where the highest potential benefit lies with these trade negotiations.

C) Addressing Shared Global Trade Challenges and Opportunities in the 21st century

In the light of the size and impact of the transatlantic partnership on global trade flows, the negotiators will address areas that go beyond bilateral trade and also contribute to the strengthening of the multilateral trading system.

Intellectual Property Rights: Both the EU and the United States are committed to maintaining and promoting a high level of intellectual property protection, including enforcement. Given the efficiency of their respective systems, the intention is not to strive towards harmonisation, but to identify a number of specific issues where divergences will be addressed.

Trade and Sustainable Development: Both sides intend to work together on social and environmental aspects of trade and sustainable development, based on what each side has already developed in existing trade agreements.

Other Globally Relevant Challenges and Opportunities: In order to make this a truly “21st century” agreement taking into account the intertwining of economies, both sides are keen to tackle trade-related aspects of customs and trade facilitation, competition and state-owned enterprises, raw materials and energy, small- and medium-sized enterprises and transparency.

On the High-Level Working Group on Jobs and Growth

At the 28 November 2011 EU-US Summit meeting, Leaders established a High-Level Working Group on Jobs and Growth, led by US Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht. The Working Group was tasked to identify policies and measures to increase EU-US trade and investment to support mutually beneficial job creation, economic growth, and international competitiveness. The Presidents of the US and the EU asked the Working Group to work closely with all public and private sector stakeholder groups.

Today's final report is the conclusion of this work. Following up on an interim report of 18 June 2012 , the final report recommends the launch of negotiations of a comprehensive trade and investment agreement. It outlines the joint approach of both sides on the main parameters of such negotiations and spells out where the EU and the US have found common ground and how they intend to tackle the broad range of areas that will form part of the agreement.

Next steps

Both parties will now envisage starting internal procedures leading to the actual launch of negotiations at the earliest possible moment. On the EU side, the European Commission will present draft negotiating directives to Council, on which the latter has to decide. This is scheduled to take place towards the second half of March. The US administration plans to send a notification to Congress triggering a 90-day layover period. Both sides aim to advance fast once negotiations are started.

Further information

Statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso

Final report of the High-Level Working Group on Jobs and Growth

More information on EU-US trade relations

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Safer products for consumers (13 February 2013)

The European Commission proposed today new rules to improve the safety of consumer products circulating in the Single Market and to step-up market surveillance concerning all non-food products, including those imported from 3rd countries. Unsafe products should not reach consumers or other users and their improved identification and traceability will be a key improvement that will help to take them quickly out of the market.

Who will benefit and how?

  • Consumers – Safe and compliant products throughout the EU with an even higher level of protection. This means more consumer confidence in the internal market.
  • Manufacturers/Businesses – More coherent rules across all product sectors. This means lower compliance costs for businesses, especially for small and medium-sized enterprises. Moreover better coordination of product safety checks means eliminating unfair competition from dishonest or rogue operators.

At the moment, Union rules on market surveillance and consumer product safety are fragmented and scattered over several different pieces of legislation, thus creating gaps and overlaps. The legislative proposals that the Commission adopted today will enable better coherence of the rules regulating consumer products identification and traceability and improved coordination of the way authorities check products and enforce product safety rules across the European Union.

European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship, said: "If we want to reap the full economic benefit of the single market, we need a set of high quality rules on the safety of products and an effective, well-coordinated, Union-wide implementation system to back it up. Better coordination of product safety checks, especially at the EU external borders, will eliminate unfair competition from dishonest or criminal rogue operators". Tonio Borg, European Commissioner for Health and Consumer Policy added: "Consumers expect that the products on the European market are safe. Businesses expect to operate under fair trading conditions. Authorities need the right tools to operate in an efficient and effective way. The package of proposals that the Commission adopted today aims at meeting these expectations.  We are convinced that consumers, businesses and national authorities will greatly benefit from clear and consistent rules across the Single Market, more effective market surveillance and improved traceability of products."
 
The key changes of today's package are:

  • Alignment of the general obligations of economic operators to ensure the safety of all consumer products with clearer responsibilities for manufacturers, importers and distributors.
  • More effective tools to enforce safety and other product-related requirements and to take action against dangerous and non-compliant product across all sectors through a single set of coherent rules for market surveillance.
  • Improved traceability of consumer products throughout the supply chain – enabling a swift and effective response to safety problems (e.g. recalls). To do that manufacturers and importers shall ensure that products bear an indication of the country of origin of the product or, where the size or nature of the product does not allow it, that indication is to be provided on the packaging or in a document accompanying the product. For products manufactured in the Union, the indication shall refer to the Union or to a particular Member State. The indication of origin supplements the basic traceability requirements concerning the name and address of the manufacturer. Such information can facilitate the task of market surveillance authorities in tracing the product back to the actual place of manufacture and enable contacts with the authorities of the countries of origin in the framework of bilateral or multilateral cooperation on consumer product safety for appropriate follow up actions
  • Creation of a more cooperative system of market surveillance across the EU.
  • Streamlined procedures for the notification of dangerous products, and synergies between the existing Rapid Alert Information System (RAPEX) and the Information and Communication System for Market Surveillance (ICSMS).

The proposals will now be discussed by the European Parliament and the Council. The new legislation is expected to come into effect in 2015.
 
Background

Within the EU's single market, goods move freely and consumers and businesses can buy and sell products in the 27 EU Member States and the 3 EFTA/European Economic Area countries with a total population of more than 490 million. EU product safety rules and the market surveillance of national authorities that underpins them are the basis for a safe single market.

More information: MEMO/13/93:  Product Safety and Market Surveillance Package 2013 - Questions and answers

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Investing in our future: Good examples of EU funded projects (8 February 2013)

The European Union budget is relatively small (around 1% of EU GDP), but it can make a big difference. Around 94% of the EU budget supports researchers, businesses, farmers, regions, young people and lots more.

People are often unaware of EU projects on the ground and what they do. But look below and you will see some examples of how EU money is supporting great projects. First and foremost, you can see some projects which are taking place right here at home in Ireland. Further down you can check out some important things EU funds are spent on around Europe.

From cancer research to making our cities better places to live, from supporting local farmers to giving the unemployed a chance to re-train – the interactive links will give you more details on each one.

Some examples of Irish led research projects are the following:

  • A Limerick based SME is leading a project which aims to save 1 500 trillion litres water annually, EU-funded researchers developed a smart irrigation system – Funding: EUR 2.23 million. WATERBEE 
  • A Cork based company leads an EU-funded research team developing biofuel made of algae to reduce greenhouse gas emissions – Funding: EUR 1.43 million. MABFUEL 
  • National University of Ireland, Galway led research project is helping scientists assess human impact on cold water corals and fish in the North Atlantic and Mediterranean – Funding: EUR 6.5 million.  CORALFISH 
  • A Dublin based company is leading an EU funded project on the development of drugs for patients after organ transplantation - Funding: EUR 6 million. MABSOT 
  • University College Dublin is leading a project examining whether our knowledge of genetics and individual health markers could help us to design healthier, personalised diets – Funding: EUR 9 million. FOOD4ME 
  • University of Limerick is leading an ambitious EU-funded project working on new tools to identify the symptoms of Alzheimer’s disease much earlier, and to help researchers develop new treatments for cancer – Funding: EUR 4 million.  LANIR 
  • An SME based in Co. Kildare is leading a project to source reliable, clean, renewable energy in the form of wave power – Funding: EUR 5 million.  STANDPOINT 
  • A team of researchers in Waterford Institute of Technology are studying the role of eye nutrition for vision and prevention of blindness – Funding: EUR 1.5 million CREST 

 

An example of an Irish cohesion policy project:

Building peace and develop Northern Ireland's economy: PEACE programme - Funding: EUR 1.3 billion (mainly ERDF)
The launch of the PEACE Programme in 1995 was the direct result of the European Union’s desire to respond positively to new opportunities in the Northern Ireland peace process during the paramilitary ceasefire announcements. Since then the EU has provided additional financial assistance through the PEACE II Programme as well as the current PEACE III (2007-2013), with a total of EUR 1.3 billion mainly from ERDF Funds. At a recent event in Brussels to celebrate the role of the EU funds in building trust within the community, First Minister Peter Robinson said the PEACE programme was a "tangible example" of the EU's contribution to creating peace and reconciliation for which it was recently honoured by the Nobel Peace Prize. PEACE Programme  

 

 An example of an Irish regional policy project:

Letterkenny, Border, Midland and Western Region, Ireland
With the support of the EU, the Business Development Centre (BDC) at the Letterkenny Institute of Technology (LYIT) in Ireland has been extended to form a state-of-the-art incubation, research and enterprise centre named CoLab.  The expanded facility, renamed CoLab, supports 22 businesses and over 58 employees in total. Over 70% of the businesses who now enjoy the support of the centre are exporting their goods or services. Projects such as this are helping the EU to become a smart, sustainable and inclusive economy by 2020, as set out in the EU 2020 growth strategy. Funding: EUR 1.27 million. CoLab

 

More information:

List of almost 500 success stories of European research 

With the yearly RegioStars awards, the European Commission honours Europe’s most innovative and inspiring regional development projects. See here for an extensive overview of projects.

The "Well Spent"-campaign has published a list of "benchmark and inspirational EU cohesion policy projects" that are showing "the way towards a greener Europe and a better World".

Full Press Release 

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Statement by Vice-President Rehn on the conclusion of the ninth review mission to Ireland (7 February 2013)

"I welcome today's successful conclusion of the ninth review mission to Ireland. The mission has found that the programme remains on track and that the budgetary targets for 2012 look set to be comfortably met. The government's strong determination to meet its fiscal targets has been crucial to rebuilding confidence in Ireland's economy. 

"Ireland has made good progress to consolidate its public finances and recover much of the competitiveness that was lost in the boom years. After a deep recession, the Irish economy has been growing since 2011 and we expect its expansion to gradually become more robust later this year and in 2014. Significant progress has also been made in repairing the financial sector, though more needs to be done to enable banks to revive productive lending to the economy. Another key priority is to tackle unemployment, not least by strengthening employment services and accelerating the implementation of key investment projects, including those co-financed by the European Investment Bank. 

Market conditions for Irish bonds have been steadily improving and confidence growing. Ireland is on track to exit from the EU-IMF programme as planned. The Commission stands by Ireland and its people and supports them in this objective. In this context, the major steps taken by the Irish authorities regarding the Promissory Notes should further boost confidence and help to facilitate a successful outcome."

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New EU study urges overhaul of football transfer system (7 February 2013)

A study published today by the European Commission recommends a wholesale reform of the transfer system in European football to correct imbalances and improve fair and balanced competition.

According to the report, the current system mostly benefits the wealthiest clubs, superstar players and their agents. The proposals include limiting ‘inflated’ transfer fees and the introduction of a fair play levy on fees rising above a certain amount, to ensure football remains competitive at all levels and to rein in the rocketing costs of buying players.

Football clubs spend around €3 billion a year on player transfers but very little of this trickles down to smaller clubs or the amateur game, claims the report. The number of transfers in European football more than tripled in the period 1995-2011, while the amounts spent by clubs on transfer fees increased seven-fold. But most of the big spending is concentrated on a small number of elite clubs which have the largest revenues or are backed by very wealthy investors. The level of redistribution of money in the game, which should compensate for the costs of training young players and developing new talent, is insufficient to allow smaller clubs to develop and to break the stranglehold that the biggest clubs continue to have on the sport.

"The European Commission fully recognises the right of sports authorities to set rules for transfers, but our study shows that the rules as they are do not ensure a fair balance in football or anything approaching a level playing field in League or Cup competitions. We need a transfer system which contributes to the development of all clubs and young players," said Androulla Vassiliou, European Commissioner responsible for sport.

Proposals include:

  • FIFA and national football associations to ensure stronger controls over financial transactions  
  • Introduction of a 'fair-play levy' on transfer fees beyond an amount to be agreed by the sport's governing bodies and clubs to ensure fund redistribution from rich to less wealthy clubs
  • Better publicising of the movement of players to ensure that solidarity compensations are paid to clubs and that the latter are aware of their rights
  • Establish a limit on the number of players per club
  • Regulate the loan transfer mechanism
  • Address issue of 'third-party ownership' where a player is effectively leased to a club by an agent
  • An end to contractual practices which inflate transfer fees, such as where a club extends the protected period during which players cannot be transferred without its consent

The report also calls for full implementation of UEFA's Financial Fair Play rule and stronger 'solidarity mechanisms' to enhance youth development and the protection of minors. The authors of the study urge sports bodies to improve their cooperation with law enforcement authorities to combat money laundering and corruption.

Next steps

The results of the study will be analysed by the EU Expert Group on 'Good Governance in Sport' at its next meeting in April. The group, which is also discussing measures to address match-fixing, is composed of national experts and observers from FIFA, UEFA, the European Professional Football Leagues, European Club Association and the International Federation of Professional Football Players. The group is expected to deliver a report to EU Sport Ministers before the end of the year.

Background

The labour market in football is extremely segmented, with a 'primary market' consisting of a small number of superstar players and a secondary market made up of professional or semi-pro players who do not earn big money and often face difficulties in developing their careers, especially after their playing days come to an end.

In its 2011 Communication 'Developing the European dimension in Sport', the Commission stated that transfers regularly came to public attention because of concerns over their legality and a lack of transparency about the financial flows involved. In January 2012 the Commission launched a study on player transfers with the objective of providing a detailed overview of the economic and legal aspects of transfer systems in team sport in Europe, focusing on football and basketball in particular. The study was carried out by a consortium composed of KEA European Affairs (Belgium) and the Centre for the Law and Economics of Sport at the University of Limoges (France).

The study's publication comes 17 years after the European Court of Justice's Bosman ruling, which led to profound changes in the way professional football is organised in Europe and throughout the world by eliminating obstacles to the free movement of players, and 12 years after an informal agreement between the Commission, FIFA and UEFA which led to revamped transfer rules for professional football.
The European Commission has proposed a sport chapter as part of Erasmus for All, the new EU programme for education, training, youth and sport. The proposed budget for sport is €34 million a year on average between 2014 and 2020. Support will be given to transnational projects aimed at boosting the exchange of know-how and good practices, non-commercial European sport events of major importance and studies and statistical work to strengthen the evidence base for policy-making in sport. The main beneficiaries will be public bodies and civil society organisations active in grass-roots sport. The Commission currently supports a number of preparatory initiatives in the area of sport.  These include five pan-European projects aimed increasing cooperation to address match-fixing.

For more information

Study final report

Executive Summary   

European Commission's sport website 

Androulla Vassiliou's website

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Statement by EC, ECB and IMF on the ninth review mission to Ireland (7 February 2013)

Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Dublin during January 29–February 7, 2013 for the ninth review of the government’s economic programme and met with a range of stakeholders.

Ireland’s strong track record of programme implementation has been maintained, contributing to substantial improvements in market access and conditions for the sovereign and also – albeit more moderately – for the banks. EC/ECB/IMF mission teams continued technical discussions with the authorities on the scope for further improving the sustainability of the well-performing adjustment programme. Mission teams also began discussions on how best to prepare for and support a successful and durable exit from programme financing.

Ireland’s economic recovery is continuing and is expected to gradually gain momentum, with growth forecast to firm to over 1 percent in 2013 and over 2 percent in 2014. The growth of Irish exports is a key driver of the on-going recovery, but is highly dependent on the pace of recovery in trading partners. Net exports are nevertheless supported by a significant reversal of competitiveness losses experienced during the boom period. At the same time, high unemployment and still weak balance sheets continue to weigh on the domestic economy. A timely resolution of banks’ non-performing loans will pave the way for improving the situation in the banking sector, restoring credit supply, reducing uncertainty, and, ultimately, enabling a durable revival in domestic demand.

The government is estimated to have comfortably met the 2012 fiscal targets and it remains committed to a 2013 deficit ceiling of 7.5% of GDP and to correcting the excessive deficit by 2015. Market confidence in Ireland’s continued solid fiscal consolidation is essential for the country’s durable return to market financing, making the strict implementation of Budget 2013 measures essential. In particular, the government’s efforts to ensure stronger management of the health budget, where spending overruns occurred in 2012, must deliver high quality health services while achieving value-for-money more in line with other EU countries. A timely conclusion of the negotiations with public sector unions should allow savings to be achieved while protecting the delivery of core public services.

Unemployment remains stubbornly high, and is increasingly long-term in nature. Reducing it must remain an urgent policy priority. A revival in private sector employment is expected to begin in 2013, but the unemployment rate may decline only gradually, hindered by the prevailing significant skills mismatches among the unemployed. Stepped up efforts to help the long-term unemployed are needed, including redeployments to raise the number of case managers and ensuring their adequate training, mobilising resources for activation through the involvement of the private sector and providing relevant education and training opportunities for the unemployed. Accelerating the implementation of investment projects, including those funded by the European Investment Bank, National Pension Reserve Fund, private investors, and by a portion of state asset sale proceeds could also help to address the unemployment challenge in a timely manner.

Good progress has been made in repairing Ireland's financial sector, which should permit the timely removal of the costly Eligible Liabilities Guarantee scheme, improving banks’ profitability. Nonetheless, decisive actions remain essential to ensure banks’ capacity to lend and support the recovery. The priority in 2013 must be for banks to make demonstrable progress in enhancing asset quality. The management of mortgage and SME loans in arrears needs to be further enhanced to achieve sustainability for households and distressed but viable businesses. Given the scale of mortgage arrears, supervisors should ensure that banks intensify their engagement with customers in order to find durable solutions appropriate to borrowers' circumstances. Timely activation of the new personal insolvency framework will support these efforts.  As a complementary step, greater efforts can be made to pursue legal remedies for unsustainable investment-property related debts. Strengthened progress in resolving SME loan arrears is also important given the key role of this sector in job creation.

Market conditions for Irish bonds continue to improve, with benchmark 8-year yields now below 4.5 percent and recent bond issues attracting broad investor interest. There have also been encouraging improvements in financing conditions for banks and semi-state utilities. The significant yield declines on Irish sovereign debt reflect growing international confidence in Ireland’s robust policy implementation, as well as the euro area leaders' statement on June 29 and the ECB's announcement of Outright Monetary Transactions in early September. But market confidence remains vulnerable given high public and private debts and the mission teams stressed the need for continued strong policy efforts by the Irish authorities in order to lay solid foundations for successful programme exit at end 2013 and a durable return to market financing.

The key objectives of Ireland’s EU-IMF supported programme are to address financial sector weaknesses and put Ireland’s economy on the path of sustainable growth, sound finances and job creation, while protecting the poor and most vulnerable. The programme includes loans from the European Union and EU member states amounting to €45 billion and a €22.5 billion Extended Fund Facility with the IMF. Conclusion of this review would make available a disbursement of €1 billion by the IMF and €1.6 billion by the EFSM/EFSF, with EU member states expected to disburse a further €0.5 billion through bilateral loans. The next review mission is scheduled for April 2013.

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Wanted: Citizen X to take on the Eurotrip Challenge (6 February 2013)

TalkToEU.ie is looking for two teams of two people to take on the Eurotrip Citizen X challenge and race across 5 EU countries over just 6 days.

With Ireland celebrating 40 years membership of the EU, as well as the European Year of Citizens 2013, TalkToEU.ie want to put the EU rights Irish people have as EU citizens to the test.

Both teams will start in the same destination, which will be a yet to be announced city in the EU, and will have to race each other to reach a final destination. The winners must cover 5 countries in just 6 days – no small feat – and, if that wasn't enough, they will also be given 5 unique and challenging tasks, designed to test EU policy around citizenship.

The two lucky winning teams will be asked to share their findings along the way online, by tweeting, facebooking and youtubing each day, talking about the places they visit, the people they meet and how they dealt with the challenges that they faced.

In an added twist this year, the public will vote to decide what tasks they want the two teams to undertake.

As always, TalkToEU are looking for people who are gutsy, opinionated and social media savvy.  If you and a friend think you have what it takes to be Citizen X and take on the Eurotrip challenge, then visit talktoeu.ie/eurotrip to find out more.

Steffen Schulz, Press Officer at the European Commission Representation said: "The aim is to unearth some interesting findings and insights on what it means to be a European citizen. We’re encouraging those interested to visit the website http://www.talktoeu.ie/eurotrip and to get involved. We’re looking for creative entries that stand out from the crowd”.

Eurotrip is organised as part of the "Talk to EU" public information initiative funded by the European Commission. Eurotrip Citizen X is designed to communicate to young Irish people the benefits of EU membership and EU citizenship.

The closing date for entries is March 11th at 5pm. All entrants must be over 18 and free to travel from the 7th of April to the 12th of April.

More on http://www.talktoeu.ie

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Safer Internet Day 2013: "Connect with Respect" (5 February 2013)

Coinciding with Safer Internet Day being celebrated across the globe today, the European Commission has presented results of an initiative undertaken by an industry-led coalition to make the internet a safer and better place for kids.

The coalition commits 31 leading technological and media companies, including the likes of BT, Facebook, Google, Microsoft, Telefónica and Vodafone, to provide wider options for parental control and to strengthen age-appropriate privacy settings.

The initiative seeks to stop children's exposure to harmful material and curtail online bullying. In 2009, the combined efforts of the coalition brought the first ‘report abuse’ button on social networks. The partners are now looking at how to equip all devices (including smart phones, tablets and games consoles) with a similar functionality and parental controls.

European Commission Vice President Neelie Kroes said "I am very happy that these leading companies have responded to the call and worked together across sectors to produce concrete results. Child protection should get Board level attention. More is needed. I look forward to implementation in 2013 and to seeing a new benchmark emerging in the on-line industry: child protection by default.”

Safer Internet Day is one of the most important days in the online safety calendar. Now in its tenth year, Safer Internet Day has grown from its original roots in the EU to cover almost 100 countries today. Safer Internet Day 2013 is all about online rights and responsibilities, to encourage people online of all ages to "Connect with Respect". Events are taking place across the EU and worldwide and, as of 2014, the EU and US will celebrate Safer Internet Day on the same day.

The average age for first going online in Europe is seven. 38% of 9 to 12 year olds who are online say they have a social networking profile, in spite of age restrictions. More than 30% of children who go online do so from a mobile device and 26% via game consoles. 4 in 10 children report having encountered risks online such as cyber-bullying, being exposed to user-generated content promoting anorexia or self-harm or misuse of their personal data.

Useful links

Safer Internet 

Links to company statements and other key documents

Digital Agenda website

Commissioner Neelie Kroes' website

Follow Commissioner Neelie Kroes on Twitter

http://www.saferinternetday.org

Twitter hashtags: #SID2013 and #betterinternet4kids

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Stronger rules against money laundering (5 February 2013)

The Commission has today adopted two proposals to reinforce the EU's existing rules on anti-money laundering and fund transfers. The threats associated with money laundering and terrorist financing are constantly evolving, which requires regular updates of the rules.

In particular, the new Directive:

  • improves clarity and consistency of the rules across the Member States
  • by providing a clear mechanism for identification of beneficial owners. In addition, companies will be required to maintain records as to the identity of those who stand behind the company in reality.
  • by improving clarity and transparency of the rules on customer due diligence in order to have in place adequate controls and procedures, which ensure a better knowledge of customers and a better understanding of the nature of their business. In particular, it is important to make sure that simplified procedures are not wrongly perceived as full exemptions from customer due diligence.
  • and by expanding the provisions dealing with politically exposed persons, (i.e. people who may represent higher risk by virtue of the political positions they hold) to now also include “domestic” (those residing in EU Member States) (in addition to 'foreign') politically exposed persons and those in international organisations. This includes among others head of states, members of government, members of parliaments, judges of supreme courts.
  • extends its scope to address new threats and vulnerabilities 
  • by ensuring for instance a coverage of the gambling sector (the former directive covered only casinos) and by including an explicit reference to tax crimes.
  • promotes high standards for anti-money laundering
  • by going beyond the FATF requirements in bringing within its scope all persons dealing in goods or providing services for cash payment of €7,500 or more, as there have been indications from certain stakeholders that the current €15,000 threshold was not sufficient. Such persons will now be covered by the provisions of the Directive including the need to carry out customer due diligence, maintain records, have internal controls and file suspicious transaction reports. That said, the directive provides for minimum harmonisation and Member States may decide to go below this threshold. 
  • strengthens the cooperation between the different national Financial Intelligence Units (FIUs) whose tasks are to receive, analyse and disseminate to competent authorities reports about suspicions of money laundering or terrorist financing.

Internal Market and Services Commissioner Michel Barnier said: "The Union is at the forefront of international efforts to combat the laundering of the proceeds of crime. Flows of dirty money can damage the stability and reputation of the financial sector, while terrorism shakes the very foundations of our society. In addition to the criminal law approach, a preventive effort via the financial system can help to stop money laundering. Our aim is to propose clear rules that reinforce the vigilance by banks, lawyers, accountants and all other professional concerned."

Home affairs Commissioner Cecilia Malmström said: "Dirty money has no place in our economy, whether it comes from drug deals, the illegal guns trade or trafficking in human beings. We must make sure that organised crime cannot launder its funds through the banking system or the gambling sector. To protect the legal economy, especially in times of crisis, there must be no legal loopholes for organised crime or terrorists to slip through. Our banks should never function as laundromats for mafia money, or enable the funding of terrorism."

Background:

Further to the publication of a revised set of international standards in February 2012 (IP/12/357), the Commission decided to rapidly update the EU legislative framework to incorporate the necessary changes. In parallel, the Commission also undertook a review of the Third Anti-Money Laundering Directive that showed the need to update the existing legislative framework in order to address all identified shortcomings.
The proposed update of the legal rules will have to be adopted by the European Parliament and the Council of Ministers under the ordinary legislative procedure.
 
More information:
http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm

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Last update: 08/03/2013  |Top