European Economic Forecast Autumn 2010
30 November 2010 - The European Commission's autumn forecast foresees a continuation of the economic recovery currently underway in the EU. GDP is projected to grow by around 1¾% in 2010-11 and by around 2% in 2012.
See below table showing the main economic indicators for Ireland.
A better than expected performance so far this year underpins the significant upward revision to annual growth in 2010 compared to the spring forecast.
However, amid a softening global environment and the onset of fiscal consolidation, activity is expected to moderate towards the end of the year and in 2011, but to pick up again in 2012 on the back of strengthening private demand.
European Commissioner for Economic and Monetary Affairs, Olli Rehn said: "The economic recovery has taken hold. I am encouraged by the prospect that employment is finally set to improve next year in Europe. Public deficits are starting to decline thanks to the consolidation measures taken and to the resumption of growth. However, this recovery is uneven, and many Member States are going through a difficult period of adjustment. A determined continuation of fiscal consolidation and frontloaded policies to enhance growth, are essential to set the sound basis for sustainable growth and jobs. The turbulence in sovereign debt markets underlines the need for robust policy action."
A more detailed report is available here.
Antitrust: Commission probes allegations of antitrust violations by Google
30 November 2010 - The European Commission has decided to open an antitrust investigation into allegations that Google Inc. has abused a dominant position in online search, in violation of European Union rules (Article 102 TFEU).
The opening of formal proceedings follows complaints by search service providers about unfavourable treatment of their services in Google's unpaid and sponsored search results coupled with an alleged preferential placement of Google's own services.
This initiation of proceedings does not imply that the Commission has proof of any infringements. It only signifies that the Commission will conduct an in-depth investigation of the case as a matter of priority.
Google's internet search engine provides for two types of results when people are searching for information. These are unpaid search results, which are sometimes also referred to as "natural", "organic" or "algorithmic" search results, and third party advertisements shown at the top and at the right hand side of Google's search results page (so-called paid search results or sponsored links).
The Commission will investigate whether Google has abused a dominant market position in online search by allegedly lowering the ranking of unpaid search results of competing services which are specialised in providing users with specific online content such as price comparisons (so-called vertical search services) and by according preferential placement to the results of its own vertical search services in order to shut out competing services. The Commission will also look into allegations that Google lowered the 'Quality Score' for sponsored links of competing vertical search services. The Quality Score is one of the factors that determine the price paid to Google by advertisers.
The Commission's probe will additionally focus on allegations that Google imposes exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their web sites, as well as on computer and software vendors, with the aim of shutting out competing search tools. Finally, it will investigate suspected restrictions on the portability of online advertising campaign data to competing online advertising platforms.
What is the legal base for the decision?
The legal base of this procedural step is Article 11(6) of Council Regulation No 1/2003 and article 2(1) of Commission Regulation No 773/2004.
Article 11(6) of Regulation No 1/2003 provides that the initiation of proceedings relieves the competition authorities of the Member States of their authority to apply the competition rules laid down in Articles 101 and 102 of the Treaty.
Article 2 of Regulation No 773/2004 provides that the Commission can initiate proceedings with a view to adopting at a later stage a decision on substance according to Articles 7-10 of Regulation No 1/2003.
The Commission has informed the company about this decision. The Competition Authorities of the Member States have also been informed.
There is no legal deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case and the extent to which the undertakings concerned co-operate with the Commission.
 The Quality Score influences the likelihood of an ad to be displayed by Google and its ranking. If two advertisers are using the same key words, the site which has a lower Quality Score will have to offer a higher price to rank at the same place.
 An online advertising platform is a virtual marketplace that brings together advertisers and publishers offering advertising space on the internet
Climate Change: EU wants to see legally binding agreement
30 November 2010 - The European Commission said today that this week's UN climate change conference in Cancún (Mexico) should work towards a legally binding agreement.
Key parts of the current agreement on climate change, known as the Kyoto Protocol, expire after 2012 and there is also need for urgent action on the ground. Last year's international agreement at Copenhagen recognised the need to keep global temperatures below 2°C pre-industrial levels but several large countries are still reluctant to sign up to a binding framework.
The EU, the world's leading aid donor, will give a full report in Cancún on its delivery of 'fast start' funding to support developing countries. Support to developing countries' efforts to stop climate change is a key part of negotiations.
In 2010 the EU mobilised 'fast start' funding of €2.2 billion. This forms part of the EU's overall commitment made last year to provide €7.2 billion over the period 2010-2012.
Connie Hedegaard, European Commissioner for Climate Action, said: "The EU is ready to agree on an ambitious global climate framework in Cancún but regrettably some other major economies are not. Cancún can nevertheless take the world a significant step forward by agreeing on a balanced set of decisions covering many key issues. It is crucial that Cancún delivers this progress, otherwise the UN climate change process risks losing momentum and relevance, and so far no one has been able to point to an alternative forum that can deliver more. Therefore Cancún must deliver progress on substance, and it can, if all Parties show political will."
Towards a post-2012 global climate framework
The 29 November-10 December conference in Cancún will see the continuation of UN negotiations aimed at drawing up a global regime to combat climate change for the period after 2012, when key provisions of the Kyoto Protocol will expire.
For the EU, the ultimate objective of the UN process must be to establish an ambitious, comprehensive and legally binding global framework that engages all countries in combating climate change.
This framework should build on the Kyoto Protocol and the Copenhagen Accord, which was reached at last year's UN climate conference and has been endorsed by 140 countries including the EU and its Member States. The Copenhagen Accord recognises the need to keep global warming below 2°C compared to the pre-industrial temperature.
The EU's preference is for the future global climate framework to take the form of a single, new legally binding instrument which includes the essential elements of the Kyoto Protocol. However, the EU is willing to consider a second commitment period of the Kyoto Protocol on condition that this forms part of a wider global agreement which engages all major economies in climate action and that the environmental integrity of the Protocol is improved.
For the EU it is important that Cancún becomes a significant step that paves the way for establishing a global and comprehensive legally binding framework as soon as possible.
The conference should deliver progress by producing a balanced package of decisions which capture the progress achieved in the negotiations so far and lay down major elements of the 'architecture' of the future global climate regime. The Cancún decisions should also make it possible to launch immediate action on the ground to combat climate change, especially in developing countries.
The scope of the package of decisions has yet to be agreed. The specific issues that the EU wants to see addressed in a balanced Cancún package include:
- 'Anchoring' in the UN process of the emission pledges made under the Copenhagen Accord
- Transparency rules (MRV)
- Reform and expansion of carbon market mechanisms
- A mechanism to reduce tropical deforestation
- Forest management accounting rules for developed countries
- Adaptation to climate change
- Governance of the future Copenhagen Green Climate Fund
- Technology cooperation
- Capacity-building for developing countries
- Emissions from international aviation and maritime transport.
Fast start funding
In 2010 the EU has mobilised 'fast start' funding of €2.2 billion to support developing countries' efforts to adapt to and mitigate climate change. This forms part of the EU's overall commitment under the Copenhagen Accord to provide €7.2 billion over the period 2010-2012.
Fast start funding complements the significant climate support that the EU, as the world's largest aid donor, already provides to developing countries through its Official Development Assistance (ODA). In 2008, for example, the EU delivered US$ 5.1 billion for climate mitigation in developing countries through its ODA, or 60% of global ODA provided for this purpose.
To ensure full transparency in the implementation of its fast start commitment, the EU will present a comprehensive report on its progress in Cancún at a public side event open to all Parties and stakeholders. It will also provide annual reports in future.
Questions and Answers on the Cancún climate conference
DG CLIMA Cancún web pages
Views sought on protection for retail customers in the financial services
26 November 2010 - The European Commission services have today launched a consultation on the 'packaged retail investment products' (PRIPs) initiative, which aims at raising standards of protection for retail customers.
The consultation outlines possible measures for improving the transparency and comparability of investment products and ensuring effective rules always govern the sales of the products. It also addresses inconsistencies in the standards that apply to different products and industry sectors.
The replies will serve as an input for the Commission when developing legislative proposals on transparency and sales for the products.
To accompany the consultation the Commission is also publishing two studies.
The first identifies some of the costs of possible changes to sales rules for the industry, and can be found here.
The second focuses on decision making by retail investors, and shows some of the factors that hinder effective decision making and that simplifying and standardising product information can significantly improve investment decisions. The study can be found here .
Interested parties are invited to send their comments to the Commission by the 31 January 2011.
The consultation paper is available at: http://ec.europa.eu/internal_market/consultations/2010/prips_en.htm
Ireland signs up to Bonn Agreement to protect our coastlines
26 November 2010 - At a meeting in Dublin on 24 November 2010, ministers and senior government officials from all coastal states around the Greater North Sea and from the European Commission adopted the Bonn Agreement Action Plan, an international Agreement for regional cooperation in dealing with pollution by oil and other harmful substances.
The North Sea States are: Belgium, Denmark, France, Germany, Ireland, the Netherlands, Norway, Sweden, and the United Kingdom of Great Britain and Northern Ireland.
The meeting also welcomed the accession of Ireland to the Bonn Agreement, and a realignment of national zones of responsibility following which the size of the Bonn Agreement maritime area has more than doubled, now comprising about 1,586,000 km2.
The European Commission was represented at the meeting by Mrs Kristalina Georgieva, European Commissioner for International Co-operation Humanitarian Aid and Crisis Response, who welcomed the Action Plan saying: ”The experience gained and results achieved over the last 40 years have to be acknowledged but they also have to pave the way to achieving further goals and vision of the Bonn Agreement. It is therefore very timely that the Bonn Agreement engages to further enhance cooperation through the newly adopted Bonn Agreement Action Plan, strengthening not only response, but also adequate prevention and preparedness actions.”
Mr Noel Dempsey, the Irish Minister for Transport hosting the meeting said:” Ireland joined the Bonn Agreement as a Contracting Party earlier this year. We fully recognise the need to work together to prevent pollution, to be prepared and respond when any accident happens. International technical cooperation in this area is essential.”
Alongside the Action Plan ministers also adopted the Dublin Declaration, a political statement reaffirming the goals which have been pursued over the last successful 40 years of cooperation, and setting out ambitious commitments for the years to come.
See here for more information about the Bonn Agreement.
VAT: Commission refers Ireland to EU Court over reduced VAT rate for horses and greyhounds
24 November 2010 - The European Commission has today decided to refer Ireland to the EU's Court of Justice over its application of a 4.8% reduced VAT rate for supplies of horses and greyhounds. This reduced rate is not in line with the provisions of the VAT Directive , and could cause a distortion of competition within the EU. The Commission had sent a reasoned opinion – the second stage of an infringement procedure - to Ireland in June 2010. As it failed to comply with EU law, the Commission has today decided to take Ireland to the Court.
Annex III of the VAT Directive sets out a list of goods to which Member States may apply a reduced VAT rate. This list must be strictly interpreted and applied, in order to ensure fair competition within the EU.
One exception is that VAT exemptions or reduced rates which were being applied by Member States on 1 January 1991 can continue to be applied, even if they are not now eligible under Annex III. This is on the condition that they have been adopted for clearly defined social reasons and to the benefit of the final consumer.
In view of this exception, Ireland continued to apply a reduced VAT rate of 4.8% for the supply and hire of live horses, for the supply of greyhounds and for the sale of stud services. The Commission considers that there is no clearly defined social reason for allowing such a reduced rate, nor does the final consumer seem to be benefiting from the measure. Therefore, Ireland's application of a reduced VAT rate for horses and greyhounds is not in compliance with EU law.
For the press releases issued on infringement proceedings in the area of taxation or customs see:
For the most up-to-date general information on the infringement proceedings initiated against Member States, see: http://ec.europa.eu/community_law/index_en.htm
See here for more information on EU infringement procedures.
Beware of Bad Cyber-Santa this Christmas!
24 November 2010 - Are you buying your presents from websites this Christmas? Beware of crooks online who use the internet to cheat the unwary and could spoil your visit from Santa.
That's the message from the European Consumer Centre in Ireland in their new radio campaign showing you how to shop safe online this Christmas by following a few simple tips.
A recent survey on online shopping shows that 4 out of every 5 European consumers plan to buy as much as or more than last year on the internet. And in Ireland, consumers intend to spend over a third of their Christmas budget on items from online stores.*
But some of the sites you can see online are not what they seem. They may look real but in fact are scams set up to take your hard-earned cash and will never send you any of those gifts you ordered.
Everyone is watching the pennies more than ever right now but we all still want to find the perfect Christmas gift at the right price. Shopping online can offer significant savings, choice and value for money from the comfort of your own home, but there are dangers so it is important to be aware of the risks and follow a few simple tips.
1. Do your homework and know who you are dealing with
- Try to shop on a familiar or recommended site and make sure you have the name and full contact details, including postal address, of the web trader so you know who you are dealing with. It is the trader’s legal obligation to provide these details. Never rely on just an email address or a post office box.
- Beware of sites that have only recently been set up. Fraudulent sites come and go very quickly. Often they are only recently registered but may claim to have been round for a while. Use the Howard Online Shopping Assistant tool on www.eccireland.ie to find out when, and where, the site was registered and other background information.
- Always check out unfamiliar sellers and websites first before going ahead with a transaction. A simple internet search should reveal any negative feedback about the trader left by other consumers.
2. Use safe payment options
- Never send cash or use a money-wiring service because you’ll have no recourse if something goes wrong. Be wary of sites which insist on such payment methods or who pass on additional costs to the consumer because they have used a more secure method of payment, such as a credit card.
- Keep a record of your transaction and check your card statements after you make your purchase to ensure that no additional monies were removed from your card. Inform your credit card company immediately of any discrepancies.
- Make sure you use a secure web site to enter credit card information. Look for a padlock symbol in the bottom right of the browser window and for the website address to begin with ‘https://’
3. Know your rights
- Check out the terms and conditions before placing an order, in particular, the trader’s returns and cancellation policies.
- Remember if you buy goods on the internet from a European website, you still have the same rights as if you were shopping on the high street, in relation to faulty or poorly described goods. In addition, you are entitled to a seven working-day 'cooling off' period.
According to Caroline Curneen, spokesperson at ECC Ireland, “'Consumers are under increased pressure to cut spending this Christmas and this can make them vulnerable to online scams. ECC Ireland wants consumers to put safe online shopping at the top of their shopping list. Our campaign seeks to increase awareness and ensure that consumers are armed with the knowledge to shop safely online this Christmas.”
Notes: *Deloitte Christmas Spending Survey 2010: A changed Irish consumer emerges.
Environment: European Commission closes case against Ireland and urges Ireland to comply with ruling on septic tanks and EU legislation on industrial pollution
24 November 2010 - The European Commission today:
- closed a non-communication case against Ireland on the absence of certain access to justice rules;
- asked Ireland to comply with a 2009 European Court of Justice ruling on septic tanks; and
- urged Ireland to comply with an EU Directive designed to prevent industrial pollution.
See below for details:
Environment: Commission closes case on access to justice against Ireland
Following action by the Irish authorities, the European Commission, on a recommendation by Environment Commissioner Janez Potočnik, is closing a non-communication case on absence of certain access to justice rules.
The case being closed concerns a 16 July 2009 ruling of the European Court of Justice in which the Court found that Ireland had failed to transpose into national law changes to the Environmental Impact Assessment Directive (85/337/EEC), including provisions on public participation in the decision-making process and access to justice.
Amongst other matters, the lack of transposition related to a requirement that information on review procedures should be made available to the public and that access to the Irish courts should not be prohibitively expensive for citizens and NGOs.
Ireland has since adopted and notified new legislation under which, in future disputes concerning environmental impact assessment, an unsuccessful environmental litigant will generally not be required to pay the costs of the other side. The Commission is therefore closing the case.
The dispute related solely to an absence of measures and the Commission will now look at whether the Irish legislation fully meets the requirements of the Directive.
Environment: Commission asks Ireland to comply with Court ruling on septic tanks
The European Commission is urging Ireland to comply with a 2009 European Court of Justice ruling on septic tanks. The Commission is concerned that a year after the Court ruling, no legal measures have been adopted to ensure that septic tanks are subject to adequate checks and inspections to protect human health and the environment. On a recommendation by Environment Commissioner Janez Potočnik, a letter of formal notice under ongoing infringement proceedings is therefore sent.
If Ireland fails to act, the Commission could refer the case back to the Court and request financial penalties.
In October 2009, the European Court of Justice ruled that Ireland was failing to comply with the EU Waste Framework Directive 2006/12/EC (except in County Cavan). The case concerned domestic waste water disposed of in the countryside through septic tanks and other individual waste water treatment systems. EU law stipulates that the necessary measures must be taken to ensure that waste is recovered or disposed of without endangering human health, and without using processes or methods which could harm the environment.
Discharges from septic tanks, of which there are over 400,000 in Ireland, have contributed to the micro-biological pollution of groundwater and nutrient pollution of surface waters. Human health is at risk because pathogens can enter drinking water sources via septic tanks that are poorly designed or badly maintained, and Irish legislation still lacks provisions for systematic periodic checks and inspections. As Ireland is still in the process of preparing new measures, the Commission is urging the country to comply with the court ruling of 2009.
If the appropriate action is not taken by the Irish authorities, the Commission may decide to refer the case back to Court and request financial penalties.
Environment - Industrial emissions: Commission urges Ireland to comply with EU legislation
The European Commission is urging Ireland to comply with a law designed to prevent industrial pollution as a number of its agricultural installations still do not meet the requirements of the Directive. On the recommendation of Environment Commissioner Janez Potočnik, the Commission is sending Ireland a reasoned opinion. It has two months to respond.
The infringement concern the EU Directive on Integrated Pollution Prevention and Control (IPPC), which aims to prevent and control industrial emissions to air, water, and soil.
Under European law, industrial and agricultural activities with a high pollution potential must be licensed. The Directive required Member States by 30 October 2007 to issue new permits or reconsider and – where necessary – update existing permits for all industrial installations that were in operation before 30 October 1999.
According to the latest information received from Ireland, at least 26 pig and poultry rearing installations still lack appropriate permits for their operation.
Although the Irish authorities have assured the Commission that that all large pig and poultry rearing installations will operate on the basis of appropriate permits, the Commission is not satisfied with the pace of the permitting process. It is therefore sending a reasoned opinion.
Ireland has two months to comply with the request. Failing this, the Commission may refer the case to the European Court of Justice.
Directive 2008/1/EC concerning integrated pollution prevention and control provides an EU-wide standard for licensing industrial and agricultural activities with a high pollution potential. Permits can only be issued if certain environmental conditions are met, so that the companies themselves bear responsibility for preventing and reducing any pollution they may cause. Permitting ensures that the most appropriate pollution-prevention measures are used, and that waste is recycled or disposed of in the least polluting way possible.
The Commission has taken 7 Member States to Court for infringements of the IPPC Directive (see IP/09/1649 and IP/10/1412).
For current statistics on infringements in general, see:
For more details on infringement procedures in general, see MEMO/10/605
Statement by EU Commissioner for Economic and Monetary Affairs Olli Rehn on the Irish 4-year recovery plan
24 November 2010 - I welcome the continued commitment of the Irish authorities to reducing the deficit to below 3% by 2014. The four-year fiscal plan is an important contribution to the stabilisation of Irish public finances.
"The plan strikes a good balance of durable expenditure and revenue measures, with due regard to protecting the least well off. A 2011 budget involving a consolidation effort of €6 bn, would be appropriate, as it would strike a balance between allowing the nascent recovery to strengthen and addressing budgetary challenges in a timely fashion.
I welcome the structural reform commitments included in the plan. These policies encourage exports and a recovery of domestic demand. Implementation of the reforms will thus contribute to the authorities' ambitious fiscal adjustment strategy and a return to fiscal sustainability.
The plan is a sound basis for the negotiations on the fiscal and structural reforms of the policy programme underlying the international financial assistance that Ireland has requested to the EU and the IMF."
Text of Olli Rehn speech in Strasbourg yesterday
23 November 2010 - Remarks particularly pertaining to Ireland:
"...The reappearance of tensions in the European sovereign debt markets in the recent weeks underlines the urgency of restoring trust in our public finances. The most tested country is now Ireland.
Yesterday, the Ecofin Council welcomed the request of the Irish Government for financial assistance from the EU. Ministers concur with the Commission and the ECB that providing assistance to Ireland is warranted to safeguard financial stability in the EU and in the euro area.
"In the context of a joint programme EU/IMF, the financial assistance package to the Irish state should be financed from the European financial stabilisation mechanism (EFSM) and the European financial stability facility (EFSF), supplemented by bilateral loans to be negotiated by EU Member States. The United Kingdom and Sweden have already indicated today that they stand ready to consider a bilateral loan.
EU and euro-area financial support will be provided under a strong policy programme which will be negotiated with the Irish authorities by the Commission and the IMF, in liaison with the ECB. The programme will address the fiscal challenges of the Irish economy in a decisive manner. It will build on the fiscal adjustment and structural reforms that will be put forward by the Irish authorities in their four-year fiscal plan next week, providing the details of the Government's commitment to achieve fiscal consolidation of EUR 6 be in 2011, leading to a 3% deficit by 2014.
The programme will also include a contingency capital fund for potential future capital needs of the banking sector. By building on the measures already taken by Ireland to address stress in its banking sector, a comprehensive range of measures – including deleveraging and restructuring – will contribute to ensuring that the banking system performs its role in the functioning of the economy.
Yesterday's decisions are a critical step forward in the joint efforts to stabilise the Irish economy and safeguard financial stability in Europe.
The technical talks on an EU-IMF programme are now well under their way. The negotiations can be concluded by the end of November.
After approval by the Irish Government, the programme will be endorsed by the ECOFIN Council and the Eurogroup, in line with national procedures, on the basis of a Commission and ECB assessment."
See here for the full text of the Commissioner's speech.
Statement by the Eurogroup and ECOFIN Ministers on the request of the Irish Government for financial assistance from the European Union and euro-area Member States.
22 November 2010 - Ministers welcome the request of the Irish Government for financial assistance from the European Union and euro-area Member States. Ministers concur with the Commission and the ECB that providing assistance to Ireland is warranted to safeguard financial stability in the EU and in the euro area.
In the context of a joint programme EU/IMF, the financial assistance package to the Irish State should be financed form the European financial stabilisation mechanism (EFSM) and the European financial stability facility (EFSF), possibly supplemented by bilateral loans to be negotiated by EU Member States. The United Kingdom and Sweden have already indicated today that they stand ready to consider a bilateral loan.
EU and euro-area financial support will be provided under a strong policy programme which will be negotiated with the Irish authorities by the Commission and the IMF, in liaison with the ECB.
The programme will address the fiscal challenges of the Irish economy in a decisive manner. It will build on the fiscal adjustment and structural reforms that will be put forward by the Irish authorities in their Four Year Budgetary Strategy next week. This strategy will provide the details of the Government's commitment to achieve fiscal consolidation of EUR 6bn in 2011 as part of a strategy leading to a 3% of GDP deficit by 2014, implying an overall consolidation of 15 bn in the 4 year strategy, which contains an annual review. Given the strong fundamentals of the Irish economy, decisive implementation of the programme should allow a return to a robust and sustainable growth, safeguarding the economic and social cohesion.
The programme will also include a fund for potential future capital needs of the banking sector. By building on the measures already taken by Ireland to address stress in its banking sector, a comprehensive range of measures – including deleveraging and restructuring of the banking sector – will contribute to ensuring that the banking system performs its role in the functioning of the economy.
After approval by the Irish Government, the programme will be endorsed by the ECOFIN Council and the Eurogroup, in line with national procedures, on the basis of a Commission and EC assessment.
Commission outlines blueprint for forward-looking Common Agricultural Policy after 2013
18 November 2010 - The European Commission has today published a Communication on "the Common Agricultural Policy (CAP) towards 2020 – Meeting the food, natural resources and territorial challenges of the future".
The reform aims at making the European agriculture sector more dynamic, competitive, and effective in responding to the Europe 2020 vision of stimulating sustainable growth, smart growth and inclusive growth. The paper outlines three options for further reform.
Following discussion of these ideas, the Commission will present formal legislative proposals in mid-2011.
Outlining the Communication today, EU Agriculture and Rural Development Commissioner Dacian Cioloş underlined the importance of making the CAP “greener, fairer, more efficient and more effective”. He continued: “The CAP is not just for farmers, it is for all EU citizens – as consumers and taxpayers. It is therefore important that we design our policy in a way which is more understandable to the general public and which makes clear the public benefits that farmers provide to society as a whole. European agriculture needs to be not only economically competitive, but also environmentally competitive.”
Earlier in the year, the Commission held a public debate and a major conference on the future of the CAP. The vast majority of contributions identified 3 principal objectives from the CAP:
Viable food production (the provision of safe and sufficient food supplies, in the context of growing global demand, economic crisis and much greater market volatility to contribute to food security);
Sustainable management of natural resources and climate action (farmers often have to put environmental considerations ahead of economic considerations – but such costs are not rewarded by the market);
Maintaining the territorial balance and diversity of rural areas (agriculture remains a major economic and social driving force in rural areas, and an important factor in maintaining a living countryside)
This Communication looks at the future instruments that might be suitable for best achieving these objectives. For direct payments, the Communication outlines the importance of a redistribution, redesign and better targeting of the support, based on objective and equitable criteria,easy to understand by the taxpayer.
These criteria should be both economic (noting the “income support” element of direct payments) and environmental (reflecting the public goods provided by farmers), with support better targeted towards active farmers. A more equitable distribution of funds should be organised in an economically and politically feasible way with a transition to avoid major disruption.
One approach could be to provide a basic income support payment (which might be uniform per region – but not flat-rate across the EU, based on new criteria, and capped at a certain level); plus a compulsory environmental payment for additional actions (annually) which go beyond the basic cross-compliance rules (such as green cover, crop rotation, permanent pasture, or ecological set-aside); plus a payment for specific natural constraints (defined at EU level) and complementing amounts paid via Rural Development measures); plus a limited “coupled” payment option for particularly sensitive types of farming (similar to the current option introduced [under Article 68] in the CAP Health Check). A simple, specific support scheme should enhance the competitiveness of small farms, cut the red tape and contribute to the vitality of rural areas.
On market measures, such as public intervention and private storage aid, there may be some scope for streamlining and simplifying measures, and possibly introducing new elements with regard to improving the functioning of the food chain.
Although these mechanisms were the traditional tools of the CAP, subsequent reforms have enhanced the market orientation of EU agriculture and reduced these to safety net measures - to the extent that public stocks have virtually been eliminated. Whereas market measures accounted for 92% of CAP spending as recently as 1991, just 7% of the CAP budget was spent on them in 2009.
Rural Development policy has allowed enhancing the economic, environmental and social sustainability of the farming sector and rural areas, but there are strong calls to fully integrate environmental, climate change and innovation considerations into all programmes in a horizontal way. Attention is drawn to the importance of direct sales and local markets, and the specific needs of young farmers and new entrants.
The LEADER approach will be further integrated. In order to be more effective, a move towards a more outcome-based approach is floated, perhaps with quantified targets. One new element in future rural development policy should be a risk management toolkit to help deal better with market uncertainties and income volatility.
Options should be open to member states to address production and income risks, ranging from a new WTO-compatible income stabilisation tool, to strengthened support to insurance instruments and mutual funds. As with direct payments, there should be a new allocation of the funds based on objective criteria, while limiting significant disruption from the current system.
The Communication outlines 3 options for the future direction of the CAP, in order to address these major challenges – 1) adjusting most pressing shortcomings in the CAP through gradual changes; 2) making the CAP greener, fairer, more efficient, and more effective; and 3) moving away from income support and market measures and focusing on environmental and climate change objectives.
In all 3 options, the Commission foresees the maintenance of the current system of 2 Pillars – a 1st Pillar (covering direct payments and market measures, where rules are clearly defined at EU level) and a 2nd Pillar (comprising multi-annual rural development measures, where the framework of options is set at EU level, but the final choice of schemes is left to member states or regions under joint management).
Another common element to all 3 options is the idea that the future system of direct payments cannot be based on historical reference periods, but should be linked to objective criteria. “The current system provides different rules for the EU-15 and the EU-12, which cannot be continued after 2013”, Commissioner Cioloş insisted today. More objective criteria are also need for Rural Development allocations.
Commission appeals to 14 Member States, including Ireland, to activate missing children hotline 116 000
17 November 2010 - The European Commission today made a final call to 14 EU Member States to make the Europe-wide 116 000 hotline for missing children operational as soon as possible.
The hotline provides a single number for missing children and their parents to call for help anywhere in the EU. Having the same hotline will help children and parents in trouble get help when away from home, such as during family holidays.
Ireland is one of 14 countries without an assigned EU hotline number (see table below for full list). If countries persist in failing to assign and operate the hotline, the Commission wants to look at legislative measures to make sure they are put it in place.
In a report adopted today, the Commission takes stock of the situation in the Member States, proposes common minimum quality requirements for the service throughout the EU and gives Member States a last chance to make the hotline operational before considering legislative measures.
"The disappearance of a child is always a tragedy and in some cases their life may even be at risk. The 116 000 number offers help, support and a potential lifeline for missing children and their parents," said Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship. "Every child and every parent should remember just one number instead of 27 national ones. Citizens should also expect that their requests are treated in a similar way no matter where in Europe they call the 116 hotline. I call on Member States to make every effort to implement the hotline swiftly to put children’s safety and security first."
Vice-President Neelie Kroes, EU Commissioner for the Digital Agenda, added "A missing child is a traumatic experience – we have a duty to provide the simplest and most effective means to help parents and children in such a situation. This is what 116 000 is about: just one short phone number you can call, whatever European country you find yourself in. So those Member States lagging behind have to get their act together to make the 116 000 number operational throughout the EU."
In 2007, the EU already put in place rules (Commission Decision 2007/116/EC ) to ensure that the 116 000 number is reserved everywhere in the EU for hotlines to report missing children and offer guidance and support to their families. With the adoption of new EU telecoms rules in November 2009, EU Member States are obliged to make every effort to ensure that the 116 000 hotline is activated by 25 May 2011 (MEMO/09/491, IP/09/1812).
Today, the 116 000 hotline is fully implemented in only 12 Member States (the first country to make the number functioning was Portugal in 2007) and still has to be made fully operational in Austria, Bulgaria, Cyprus, the Czech Republic, Estonia, Finland, Germany, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovenia and Sweden. It is currently only partially operational in the United Kingdom.
Today's report is the Commission's last call to Member States to implement the missing children hotline as a matter of priority. It also indentifies obstacles in implementing the hotline and provides practical solutions to governments that have not yet made the number operational.
The two main obstacles to full implementation identified by the Commission are the lack of information provided to the public and operators about the existence of the hotline, and cost – both in running and calling the 116 000 number. To tackle these problems, the Commission identifies examples of good practices from the experience of those countries where the hotline is operational. Some examples include:
Multilingual service provision: in Romania, the service is also available in French, English and Spanish. In Greece the service is also available in English.
Targeted training is organised for operators in Hungary, Spain and Romania where staff are usually social workers and psychologists. Hotline operators receive training on procedural rules and how to respond to calls, coping with the caller's emotions such as anger and panic.
Cooperation agreements between service providers and national enforcement and/or judiciary authorities can make the case handling more efficient. Such agreements exist in Belgium, Spain, France, Portugal and Romania.
The Commission proposes using these best practices to work out a set of common minimum standards that would guarantee a high-quality service throughout the EU, so that parents and children can count on the same assistance, no matter where they are.
The Commission will also organise high-level meetings with all stakeholders every year until the hotline is operational in all 27 EU countries. The meetings will raise awareness, allow exchanges of best practice and identify practical tools to ensure the hotline is operational and offers a high-quality service. These meetings will be held around 25 May every year to mark International Missing Children’s Day and to express solidarity with missing children and their families.
On 15 February 2007, the Commission adopted a Decision requiring Member States to reserve the 116 000 number for child hotlines across the EU (IP/07/188). The Commission has repeatedly urged Member States to make this number operational as soon as possible (IP/08/1129).
Under the revised telecoms rules agreed in 2009 (see MEMO/09/513), and in particular Article 27a of the Universal Service Directive (Directive 2009/136/EC ) Member States are required, no later than 25 May 2011, to "make every effort to ensure that citizens have access to a service operating a hotline to report cases of missing children. The hotline shall be available on the number 116 000." The same Directive also requires Member States to "ensure that citizens are adequately informed of the existence and use of services provided under the 116 numbering range, in particular through initiatives specifically targeting persons travelling between Member States."
For more information
Justice and Home Affairs Newsroom: http://ec.europa.eu/justice/news/intro/news_intro_en.htm
Missing Children Europe: http://www.missingchildreneurope.eu/
Homepage of Viviane Reding, Vice-President and EU Commissioner for Justice, Fundamental Rights and Citizenship: http://ec.europa.eu/commission_2010-2014/reding/index_en.htm
Homepage of Neelie Kroes, Vice-President and Commissioner for Digital Agenda: http://ec.europa.eu/commission_2010-2014/kroes/index_en.htm
Statement by President Barroso on Ireland
17 November 2010 - "…I would really like to welcome the conclusions that have been reached in the ECOFIN Council.
The Irish Prime Minister, Brian Cowen has set out the current situation. The Irish Government is indeed making enormous efforts. I feel confident that the four-year fiscal plan of the Irish Government will be presented soon and next year's budget will prove that 2014 target date for correcting excessive deficit is firm and credible."
"The Eurogroup yesterday indeed welcomed the determination of the Irish authorities to stick to the Council recommendations.
But Ireland is addressing a very specific problem as far as the banking sector is concerned. This must be done speedily and decisively to pave the way of full confidence to be restored.
In this context, the Irish authorities are committed to working with the Commission, ECB and IMF, to determine the best way to deal with market risks, especially as regards the banking sector.
That was the message we've got … in the Eurogroup. And indeed I welcome the clear will of the Eurogroup to take determined and coordinated action to safeguard the financial stability of the euro area. We have the necessary financial backstops to do so.
Following the decision at the last European Council it is also important to reiterate our determination to achieve this goal. So let's see what are the conclusions of the technical work that is taking place."
Ireland's European Year for Combating Poverty and Social Inclusion
17 November 2010 - Barbara Nolan, Head of Representation in Ireland, got a chance to meet all the national partners in the Ireland's European Year for Combating Poverty and Social Inclusion this week. The Year's closing event - a national conference which drew together all the partners, national and local - took place in Dublin in the presence of the government Minister for Community, Equality and Gaeltacht Affairs, Pat Carey TD.
The event was also a chance for Barbara to present the prizes to the winners of the European Year Journalist Award. The winners are Irish Times journalist Conor Lally who won the print category and Bill Hughes and Bernadine Carraher (pictured) of Mind the Gap films who won the audio visual category. Both will now proceed to the European level of the competition where they will represent Ireland and be in with a chance of winning €4,500.
Ms Nolan highly commended this year’s entrants: “The calibre of entries received for this award was fantastic, in most instances the articles provided a voice for the voiceless and discussed topics that are not always popular or easy to discuss. It can be difficult to address the issues of poverty and social inclusion in the media. The issues involved are multifaceted and complex, with those at the frontline often unwilling to talk or share their experiences, due to the stigma attached by the general public.”
She added, "Mind the Gap films and Conor Lally both found interesting and compelling ways to highlight social issues within Irish society and they are worthy entries to the European level of the competition and we wish them continued success. It’s very fitting that we mark the end of the European Year for Combating Poverty and Social exclusion in Ireland by acknowledging the work of some of Ireland’s finest journalists and thank them for helping to raise awareness and to broaden our understanding of these issues.”
Each year, the European Union selects a theme of general interest aimed at raising public awareness and drawing national governments' attention to the related issues. Combating Poverty and Social Exclusion was chosen as the focus of the 2010 European Year to mark the 10-year Anniversary of the Lisbon Council when Heads of State and government committed to taking steps to make a decisive impact on the levels of poverty.
For further details see www.eapn.ie
Ireland's industrial production up strongly month on month
12 November 2010 - While industrial production in the euro area fell by 0.9% in September 2010 compared with August, Ireland bucked the trend by showing the highest month on month rise by going up 7.9%. Ireland also showed the fifth highest rise year on year (September 09 / September 10).
In September 2010 compared with August 2010, production of non-durable consumer goods fell by 0.6% in the euro area and by 0.3% in the EU27. Production of energy declined by 0.9% and 0.7% respectively. Intermediate goods decreased by 1.3% in the euro area and by 0.7% in the EU27. Capital goods dropped by 1.3% and 0.8% respectively. Durable consumer goods fell by 3.0% in the euro area and by 2.5% in the EU27.
Among the Member States for which data are available, industrial production rose in ten, fell in ten and remained stable in France. The highest increases were registered in Ireland (+7.9%), Estonia (+3.6%) and Denmark (+2.7%), and the most significant decreases in Malta (-5.6%), Greece (-5.4%) and Portugal (-4.7%).
In September 2010 compared with September 2009, production of capital goods grew by 7.5% in the euro area and by 8.7% in the EU27. Intermediate goods increased by 6.8% and 7.5% respectively. Production of energy rose by 1.8% in the euro area and by 0.8% in the EU27. Non-durable consumer goods gained 1.6% and 2.5% respectively. Durable consumer goods fell by 0.2% in the euro area, but increased by 2.2% in the EU27.
Industrial production rose in all Member States for which data are available, except Greece (-7.6%), Portugal (-2.4%) and Spain (-1.4%). The highest increases were registered in Estonia (+31.1%), Latvia (+19.0%), the Czech Republic (+12.2%), Poland (+12.1%) and Ireland (+10.9%).
See here for the full Eurostat press release, including tables.
State aid: Commission approves prolongation of the Irish guarantee scheme for credit institutions
10 November 2010 - The European Commission has approved until 30 June 2011 the prolongation of guarantees for credit institutions in Ireland, covering also certain short-term liabilities (see IP/10/1154).
The Commission considers the extension of the measures to be in line with its guidance on support measures for banks during the financial crisis (see IP/08/1495 and IP/08/1901). The extended measures are well targeted, proportionate and limited in time and scope.
The Commission, therefore, concluded that the guarantees are an adequate means to remedy a serious disturbance in the Irish economy and is as such compatible with Article 107(3)(b) of the EU Treaty.
Climate change: CO2 emissions from new cars see biggest ever fall in 2009
10 November 2010 - Average CO2 emissions from new cars sold in the EU dropped by 5% last year, the biggest annual fall ever recorded, a report published today by the European Commission shows.
The Commission today also adopted detailed rules to harmonise the monitoring of CO2 emissions from cars across the EU.
Climate Action Commissioner Connie Hedegaard said: "Reducing CO2 emissions from road transport remains a major challenge for the years to come. The latest data shows however that the car industry is on track to achieve the 2015 target and several major manufacturers may be able to do so well in advance. When the targets were set, industry feared that they would be impossible to reach in time. I am glad that in reality EU legislation on reducing CO2 emissions is proving an effective driver of innovation, keeping the EU industry at the front-edge of competitiveness."
1. Annual monitoring report
The Commission report summarising data on emissions from new passenger cars for the monitoring year 2009 shows a 5.1% drop in average CO2 emissions against the previous year - the largest annual fall since the monitoring scheme began in 2000.
Moreover a slight decrease in the power, engine capacity and weight of cars, seen for the first time in 2008, accelerated last year. This was due to a combination of the economic crisis, the scrappage schemes introduced in some Member States and increased demand for and development of more fuel-efficient vehicles.
The EU CO2 emissions target of 130g CO2/km that is to be met in 2012 by the average 65% lowest emitting cars was reached last year. Considering the average fuel efficiency improvements achieved over the past seven years, several large volume manufacturers are expected to reach the 2015 target a few years in advance if this trend continues.
2. Monitoring rules
The Commission has also adopted detailed rules and guidance to harmonise the EU scheme for monitoring CO2 emissions from cars and ensure its correct functioning. This forms part of the implementation of the Regulation on CO2 from cars. The rules include instructions to Member States, and provide car industry with a time table for the delivery of data.
The 130 grams per kilometre (g/km) CO2 limit for new cars registered in the EU will be phased in gradually. In 2012 the average emission target covers emissions from the 65% lowest emitting cars. From 2015 all cars are included in the calculation of the average.
Road transport generates about one fifth of all CO2 emissions in the EU, with cars being responsible for more than half of overall transport emissions. CO2 emissions from road transport rose by 29% between 1990 and 2007, notably due to increases both in the number of vehicles on the roads as well as in distances driven annually.
Climate change: http://ec.europa.eu/climateaction/eu_action/index_en.htm
Emissions from cars: http://ec.europa.eu/clima/policies/vehicules/index_en.htm
See also IP/10/1491
 Regulation (EC) No 443/2009
Address by Commissioner Olli Rehn to the Institute of International and European Affairs
9 November 2010 - See below for the full text of Commissioner Rehn's keynote address to the Institute of International and European Affairs on Economic Governance in the EU.
Reinforcing EU economic governance: relevance for Ireland
Ladies and Gentlemen,
Let me first thank you for the invitation to discuss the reinforcement of EU economic governance with you today. During my visit in Dublin I have already met with the political leaders, social partners and the Central Bank and have listened to their views. I am honoured to round off my visit here by extending the dialogue to the civil society through the Institute of International and European Affairs.
This visit to Dublin is very important for me. Of course I meet Finance Minister Brian Lenihan regularly in Brussels and spend a lot of time talking to Irish colleagues over the phone. But I thought it important to meet here, to listen to the views of political leaders and social partners on tackling Ireland's economic and social challenges. I also want to use the opportunity to explain how the Commission supports the Irish economy and Irish citizens to face the current economic challenges.
On a personal note, I want to say that for a Finn it is particularly easy and natural to associate with the Irish people. We both have a similar history; we became independent almost exactly at the same time; we are both Republics with a capital R; and we are both staunch and smart proponents of small states' rights and the Community method in the European Union.
Ladies and Gentlemen,
As we all are painfully aware, Ireland has suffered a sharp fall in economic output over the last three years and is now undergoing an important structural adjustment.
The Irish economy became over-reliant on construction and an oversized financial sector. The fall-off in activity hit the labour market hard. The knock-on effects on other parts of the economy have also been felt, and the scale of the crisis in Ireland has left no one untouched.
We all know that adjustment takes time. It also takes determined and sometimes painful decisions: it requires political courage and political and social dialogue.
It is by now clear that much of the economic instability in Europe is not only due to budgetary indiscipline. In the run-up to the crisis many unsustainable imbalances emerged in the private sector as well.
In the case of Ireland in particular, we need to recall that sovereign debt has not been at the origin of the crisis. Rather, private debt has become public debt. The financial sector has misallocated resources in the economy and then stopped working. It needs reform.
Indeed, earlier and better surveillance of these imbalances right across the EU could have helped to avoid the worst excesses. However, many of the private sector imbalances, such as excessive credit growth and large current account imbalances, were not at the core of the scrutiny framework used under the EU's existing surveillance arrangements.
The Stability and Growth Pact was created to ensure that no country would pursue fiscal policy that would endanger the financial and economic stability of the other member states and the euro area as a whole. It has not done that, mainly for two reasons.
First, because it was not applied as rigorously as intended. Second, because the Stability and Growth Pact was not broad enough in scope, as it left non-fiscal economic imbalances outside the scope of surveillance. Ireland and Spain are unfortunate examples of this.
It is indeed important to keep in mind why we have undertaken the exercise of reinforcing economic governance. It is because our policy framework failed to prevent unsustainable fiscal and economic developments in many member states, with devastating consequences for their economies, and the risk of a financial and economic meltdown of the euro area as a whole. Containing the crisis has been a huge and politically delicate challenge, which has required extraordinary actions by the EU, its member states, the ECB and the IMF.
The reform of EU economic governance must address these shortcomings. But new rules alone will not be enough. At the same time, the Member State governments must commit to prudent fiscal policy making – and accept that if they deviate from such path, there will be consequences. This is necessary, if we are serious about containing the risks to financial and economic stability in the euro area – and we are very serious about this.
Reform of economic governance is also a priority on the international scene, notably in the G20 context.
Let me next explain the core elements of our proposals. I will then try to put them into the Irish context.
First, we propose to reinforce the Stability and Growth Pact. We want to introduce a concept of "prudent fiscal policy making" to make the adjustment towards a medium term budget objective more operational and binding. Debt sustainability will be monitored more closely by setting a numerical benchmark for a satisfactory pace of debt reduction.
This means that Member States should not increase government expenditure at a rate that exceeds a cautious assumption about their medium-term growth potential, unless they introduce revenue policy measures that would fund it. And any unexpected revenue surprises would automatically be allocated to debt reduction.
Second element of our proposal is to broaden economic surveillance to identify and redress macroeconomic imbalances and divergences in competitiveness.
The countries with the largest current account deficits and credit growth prior to the crisis have had the worst falls in economic activity and the sharpest budgetary deterioration. To rectify this deficiency in the surveillance framework, and supplement the existing budgetary surveillance framework, the second pillar of the Commission's reform package aims to prevent and correct harmful macroeconomic imbalances that could work against the proper functioning of EMU, or damage economic activity in a Member State itself.
This will be based on a scoreboard of economic and financial indicators. When unsustainable developments are identified, we will carry out in-depth country analysis and issue country-specific recommendations. This work should of course be closely intertwined with the work of the European Systemic Risk Board which will start work next January.
Third, we need to effectively enforce economic surveillance through the use of appropriate incentives and sanctions to strengthen the credibility of the EU fiscal framework. These would kick in at an earlier stage and be gradually tightened, unless corrective action is taken by the member state concerned. Very importantly, we also want to make the consequences of bad behaviour more automatic – i.e. semi-automatic – and thus less subject to political deliberation.
In principle, there would be an alternative to policy action based on clear rules. It is market discipline. Unfortunately, market discipline alone is not very effective, and can come at very high costs. As we have seen, markets typically have not restrained excessive borrowing by the governments or the private sectors until it has been too late. And when the markets have reacted, the reaction may have been excessive.
Ladies and Gentlemen,
I welcome the Irish government's announcement last Thursday of a multi-annual consolidation strategy that confirmed the commitment to bringing the deficit below 3% of the GDP by 2014. I look forward to the greater degree of detail of consolidation measures which the government intends to provide shortly. These medium-term budgetary objectives and their concrete implementation with expenditure ceilings should become a permanent feature of fiscal policy making in Ireland.
There are clear social and economic benefits to better medium-term planning. Detail on the scale of future fiscal plans gives the private sector more information to make investment decisions. It allows public spending bodies to make better plans, as they can be more certain of future funding. Greater clarity boosts the credibility of the fiscal stance.
Ireland kept debt levels well below the 60% of GDP threshold in the first ten years of EMU. This provided some room for manoeuvre at the beginning of the crisis. By contrast, some other Member States ended a long period of benign economic conditions with much higher levels of government debt. This has contributed to the perception of vulnerability since then.
The most pertinent novelty of our new proposals on economic governance from the Irish perspective is their focus on addressing cumulative and detrimental macroeconomic imbalances.
The huge growth in private sector credit and house prices in Ireland would have required pre-emptive and preventive policy action. As we have witnessed, the unwinding of these imbalances has brought an additional burden of adjustment both here in Ireland and elsewhere.
Earlier recommendations by the EU to curb these imbalances could have helped to reduce the worst of the excesses before they occurred. Not only that, it would have called for large financial and budgetary buffers to deal with the fall-off in construction-related activity when it occurred.
Ladies and Gentlemen,
Before concluding, let me recall one central feature of the Irish economy: the economic dynamism and relevance of the private sector. In the case of Ireland the principal economic driver continues to be the private sector, particularly exports.
The contribution of the private sector to the Irish GDP is no less than 77.5% (or 124 billion euros) in 2009. Ireland has strong economic fundamentals which have delivered economic successes. Taking the necessary structural measures to support fiscal adjustments will pay off in the medium and long term for both sustainable growth and job creation.
Ladies and Gentlemen,
I believe that the Irish and the Finns share a rather similar proverb that was used back home during the 1990s recession which hit Finland particularly hard. "Even the longest night will be followed by a new dawn", the Finnish Prime Minister Esko Aho used to say at the time. I'm told that the Irish version says "the darkest hour is just before the dawn".
It might feel a small consolation at times like these, but I have no doubt that Ireland too will overcome this crisis. You are smart and stubborn people. Time and again you have proved you can overcome adversity. And this time you do not face the challenges alone. Europe stands by you.
Thank you for your attention, and I am ready to take your questions.
Climate change: Commission launches major investment programme for innovative low-carbon technologies
9 November 2010 - The European Commission launched today the first call for proposals for the world’s largest programme of investment in low carbon and renewable energy demonstration projects.
The initiative, known as NER300, will provide substantial financial support for at least eight projects involving carbon capture and storage (CCS) technologies and at least 34 projects involving innovative renewable energy technologies.
The aim is to drive low carbon economic development in Europe, creating new 'green' jobs and contributing to the achievement of the EU's ambitious climate change goals.
The European Investment Bank (EIB) is collaborating with the Commission in the implementation of the programme. Companies interested in making proposals have 3 months to submit bids at national level.
Climate Action Commissioner Connie Hedegaard said: "The NER300 is a good example that together, EU 27 can do more than we can individually. Through using revenues from selling of CO2 allowances, around €4.5 billion will be available for innovative renewable energy technologies and CCS. With project sponsors and Member States contributions this will sum up to €9 billion. This can give a needed boost for keeping EU in the frontrunner position when it comes to climate friendly technologies. Europe has the know-how, the ability and the ambition to lead the world in developing the technologies required to tackle climate change. The NER300 initiative will act as a catalyst for the demonstration of new low carbon technologies on a commercial scale. These and other green technologies are an increasingly important source of future economic growth and jobs. They will also help us meet our ambitious climate targets for 2020 and beyond”
EIB President Philippe Maystadt added: "The EIB is fully committed to helping European Union Member States meet their 2020 climate and energy objectives. We are therefore offering our financial and technical expertise in support of implementation of the NER300 initiative.”
Today's first call for proposals signals the start of implementation of the NER300 initiative. The initiative is so named because it will be funded from the sale of 300 million emission allowances in the New Entrants Reserve (NER) of the EU Emissions Trading System (ETS). At current market prices for emission allowances, the initiative is worth around €4.5 billion, making it the biggest such programme in the world.
Funding is targeted to demonstration projects involving CCS and innovative renewable energy technologies. At least one project, and a maximum of three, will be funded per Member State. Further details of the types of technologies to be funded are given in the Annex.
The programme will leverage investments of more than €9 billion as the NER300 initiative will fund up to 50% of the construction and operation costs of the CCS and renewables projects. Project sponsors and Member States will provide the rest of the funding. NER300 funding can be combined with financing from other EU instruments, including the Structural and Cohesion Funds and the European Energy Programme for Recovery (EEPR).
Under the NER300 decision, the EIB is responsible for selling the 300 million allowances and managing and disbursing the proceeds. While details, including the starting date of the sales, are not fixed yet, it is expected that all NER300 allowances will be sold before the start of the third trading period of the EU ETS in January 2013.
The EIB will also undertake detailed financial and technical due diligence of project proposals before making recommendations in the form of a ranking of project proposals to the Commission. The Commission will take the final decision on which projects to co-finance after consulting Member States.
Questions and answers on NER300: see MEMO/10/549
NER300 website: http://ec.europa.eu/clima/funding/ner300/index_en.htm
CCS demonstration project categories
Eight CCS projects will receive financing:
- a minimum of one and maximum of three in the following categories: pre-combustion, post-combustion, oxy-fuel and industrial applications.
- Minimum of three projects using saline aquifers for CO2 storage and minimum of three using depleted hydrocarbon reservoirs.
- Power stations taking part in CCS projects must have a generation capacity of at least 250 MW, and be designed to capture at least 85% of their CO2 emissions.
Innovative renewable energy technology project categories
The 34 renewable energy projects to be financed comprise the following:
- Bio-energy 9
- Concentrated solar power 5
- Solar photovoltaic 3
- Wind 6
- Geothermal 4
- Ocean (wave and tidal power, ocean thermal energy conversion) 3
- Hydro-electric 1
- Distributed renewables management (Smart Grids) 3
Application procedure for funding
The first call for proposals includes detailed information on the application procedure. A seminar for potential project sponsors will be hosted by the Commission and the date will be confirmed shortly.
Project proposals, sponsored either by a single operator or a consortium, must be submitted to the Member State where the project is to take place. An initial eligibility assessment will be undertaken by Member States within three months of the call for proposals. Member States must pre-select and submit eligible applications to the EIB within six months of the call.
Commission welcomes the renewed commitment by Irish authorities to put public finances on a sustainable path
4 November 2010 - The Commission takes note of the "information note on the economic and budgetary outlook for 2011-14" published today by the Irish Department of Finance.
The European Commissioner for Economic and Monetary Affairs, Olli Rehn, said: "I welcome the continued commitment to reducing the deficit to below 3% by 2014. This provides an important anchor for financial markets and also underlines the Irish authorities' commitment to putting public debt on a sustainable downward path in the near future. Difficult but necessary policy choices are still to be made as regards the measures needed to reach this objective. In this context, a 2011 budget involving a consolidation effort of €6 billion, as indicated in the note, would be appropriate, as it would strike a balance between allowing the recovery to strengthen and addressing budgetary challenges in a timely and frontloaded fashion."
The Commission also welcomes the authorities' intention to accompany their budgetary plan by ambitious structural reforms. Indeed strong growth and employment enhancing reforms are needed to properly underpin the authorities' fiscal adjustment strategy.
The concrete measures supporting the fiscal consolidation should limit the negative impact on growth, private sector employment and financial stability.
Commissioner Rehn is looking forward to discussing further details of the Irish Government's four-year budgetary plan in his visit to Ireland early next week. During his stay in Dublin, he will also discuss the economic situation and the challenges to the Irish economy and citizens with representatives of Irish political parties, the social partners and the Central Bank.
European Commission proposes to ban phosphates in laundry detergents
5 November 2010 - The European Commission is today proposing to ban the use of phosphates and phosphorous compounds in laundry detergents.
Phosphates from detergents are one of the main sources of 'red tides' and 'green tides' of algae bloom and seriously affect water quality, both in rivers and at sea. Getting rid of phosphates is difficult – they have to be removed in waste-water treatment plants at huge expense.
An EU Regulation would mark the end of voluntary or ineffective measures by some countries, with neighbouring countries having to suffer the consequences.
European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship said: 'Our proposal to ban phosphates in laundry detergents will give European citizens better water quality in their lakes, rivers and marine waters while keeping European companies at the forefront of this sector. The Commission will keep under review industry's progress in the development of viable alternatives for automatic dishwasher detergents through innovation.'
The draft Regulation does not affect detergents for automatic dishwashers or those used by professionals as technically and economically feasible alternatives are not yet available throughout the EU.
However, Member States can regulate the phosphate content of these detergents in specific circumstances.
Eutrophication of European waters
When excessively discharged into water, phosphates, like nitrates, can raise the amount of nutrients to an unsustainable level, eventually causing algae to grow at the expense of other aquatic life. This phenomenon is known as 'eutrophication' or, more commonly, 'red tides' or 'green tides'. The main sources of discharge of phosphates into surface waters are agriculture and sewage with detergents coming in third position.
Phosphates are primarily used in detergents to ensure efficient cleaning in hard water. Phosphates originating from detergents and discharged into waste water have to be removed through costly chemical or biological processes at waste water treatment plants. Not all treatment plants in the EU are equipped with the necessary technology to carry this out.
A European problem
The draft Regulation aims at harmonising measures across EU Member States. It is in the interest of the European Union and of its neighbouring countries that EU water quality is as high as possible and that eutrophication is avoided. Some EU Member States already have national restrictions in place with divergent limit values while others rely on the voluntary action of detergent manufacturers. In some regions measures taken by individual countries are not sufficient to maintain water quality at acceptable levels. This is the case of the Danube River and the Baltic Sea, estimated to have 16% and 24% respectively of their phosphates load stemming from detergents.
Cost-efficient alternatives to phosphates are available for laundry detergents. For automatic dishwasher detergents or professional detergents more research and innovation is still needed to develop adequate alternatives to phosphates without reducing the efficacy of detergents. This represents an opportunity for industry.
Phosphates and other phosphorous compounds to be limited by 2013
Some alternatives to phosphates also contain phosphorous, albeit in a different chemical form, which can potentially create environmental problems when used in higher concentrations. Consequently, the Regulation proposes a phosphorous content limit of 0.5 % of the total weight of the product in all laundry detergents on the EU market. This will apply as of 1st of January 2013, to allow detergent manufacturers to minimise the costs of modifying the composition of laundry detergents in a normal product life cycle.
The proposal foresees the need to re-assess the situation regarding automatic dishwasher detergents by 31 December 2014.
The proposal would benefit not only waste water treatment plants, with reduced costs for phosphate removal, but also consumers who pay for waste water treatment, and ultimately the environment.
According to Article 16 of Regulation (EC) No 648/2004 on detergents, the European Commission had to submit a report on the use of phosphates in detergents and to present, where justified, a legislative proposal with the view of their gradual phase-out or restriction to certain applications. On the basis of the report issued in 2007 [COM(2007) 234], complemented by a detailed analysis of various possible options for changes, it has been concluded that a European limit of phosphates and others phosphorous compounds in household laundry detergent will reduce the contribution of phosphates from detergents to eutrophication in EU waters and will reduce the cost of phosphorous removal in waste water treatment plants. Imposing such a limit in other types of detergents such as dishwasher detergents or professional detergents was identified as premature due to the lack of technically and economically viable alternatives.
Commission Report on phosphates in detergents
Further information on detergents at:
Financial services: The European Commission consults on further policy in the field of credit rating agencies
5 November 2010 - As part of its further work in creating a sounder financial system, the Commission services have launched today a broad consultation on credit rating agencies (CRAs). Whilst credit rating agencies are important actors in the financial markets, recent developments during the euro debt crisis have shown that there may be a need to re-examine certain aspects of the current regulatory framework.
There are growing concerns that financial institutions and institutional investors may be relying too much on external ratings and do not carry out sufficient internal credit risk assessments, which may lead to volatile markets and instability of the financial system.
The purpose of this consultation is to open a wider debate and get input from all stakeholders in order to calibrate the scope and ambition of any possible future legislative initiative in the field of credit rating agencies. These issues are similar to those raised at a global level in the recent Financial Stability Report. The deadline for replies is 7 January 2011.
Internal Market and Services Commissioner Michel Barnier said: "We need to learn all the lessons of the crisis. We have already Introduced EU-wide rules for better supervision and increased transparency in the credit rating market. This was an important first step. But we need to think about step two: the role of ratings themselves and the impact they can have on markets. Today, we are launching a consultation where we ask all the questions that need to be asked. The feedback we get will help us determine what further action is needed."
On 7 December 2010, a new EU regulatory framework applicable to the credit rating sector will come into force. New rules will require credit rating agencies to comply with rules of conduct in order to minimise potential for conflicts of interest, ensure higher quality ratings and greater transparency of ratings and the rating process.
However, learning lessons from the recent euro debt crisis, some issues related to credit rating agencies still need to be sorted out. The consultation launched today asks a whole series of questions to gather views from all stakeholders on possible initiatives to strengthen the regulatory framework further for credit rating agencies.
Questions asked include:
- Overreliance: the recent euro debt crisis has renewed concerns that financial institutions and institutional investors may be relying too much on external credit ratings. The question should be asked as to whether it is right that European and national legislation refers to credit ratings, thus giving them a very important role, and whether alternatives could exist. The Commission therefore asks which measures could reduce this possible overreliance and increase disclosure by issuers of structured finance instruments in order to allow investors to carry out their own additional due diligence on a well-informed basis;
- Improving sovereign debt rating: sovereign debt ratings play a crucial role for the rated countries, since a downgrading has the immediate effect of making a country's borrowing more expensive. Given the importance of these ratings, it is essential that ratings of this asset class are timely and transparent. While the EU regulatory framework for credit ratings already contains measures on disclosure and transparency that apply to sovereign debt ratings, further measures could be considered to improve transparency, monitoring, methodology and the process of sovereign debt ratings in EU;
- Competition: Only a handful of big firms make up the CRA sector. There are high barriers to entry. Concerns have been expressed that the rating of large multinationals and structured finance products is concentrated in the hands of only a few CRAs. This lack of competition could negatively impact the quality of credit ratings. The Commission asks what options exist to increase diversity in this sector;
- Liability: the rules on whether and under which conditions civil liability claims by investors against credit rating agencies are possible currently vary greatly between Member States. It is possible that these differences could result in CRAs or issuers shopping around, choosing jurisdictions under which civil liability is less likely. The Commission asks whether there is a need to consider introducing a civil liability regime in the EU regulatory framework for CRAs;
- Conflicts of interest: The "issuer-pays" model raises questions of conflict of interest. This model is when issuers solicit and pay for the ratings of their own debt instruments. This model is the prevailing model among CRAs. As rating agencies have a financial interest in generating business from the issuers that seek the rating, this could lead to assigning higher ratings than warranted in order to encourage the issuer to more business with them in future for example. It may also lead to practices of "rating shopping", which is when an issuer chooses a CRA on the basis of its likely rating. The Commission asks what evidence there is for such practices and whether alternative models would be possible.
On the basis of the replies to the consultation, the Commission will decide on the need for any measures in 2011.