EU ACTION IN RESPONSE TO 11 SEPTEMBER
Commission Report: overview of EU action in response to the events of 11 September and assessment of their likely economic impact.
|Document originated:||17 October 2001
|Forwarded to the Council:
||19 October 2001|
|Deposited in Parliament:
||13 November 2001|
|Department:||Foreign and Commonwealth Office
|Basis of consideration:
||EM of 9 January 2002|
|Previous Committee Report:
|Discussed in Council:
||19 October 2001|
|Committee's assessment:||Politically important
|Committee's decision:||Not cleared; further information requested
10.1 The Commission submitted this report for the information
of Heads of State or Government at the Ghent Informal European
Council of 19 October 2001.
10.2 The report notes that the EU acted with speed and
determination in demonstrating its solidarity with the Government
and people of the United States and stressing its support for
the military action taken. Furthermore, all thirteen candidate
countries were quick to lend support to the positions expressed
by the Union. The Commission and the Council rapidly became fully
engaged in a comprehensive set of responses on the diplomatic,
economic, financial, political and security fronts. The full extent
of these actions is set out in a roadmap which was agreed by the
General Affairs Council and is constantly being updated.
10.3 The report lists some of the actions which had been
taken, as of 17 October, examines the implications for priorities
in terms of action and resources, and analyses briefly the impact
of the events on the EU economy, paying specific attention to
four sectors: financial markets, the global insurance and reinsurance
sector, air transport and tourism. We are also reporting today
on a follow-up report on the European tourism sector.
10.4 The Parliamentary Under-Secretary of State (Mr Ben
Bradshaw) notes, in his Explanatory Memorandum of 9 January, that
the range of initiatives surveyed in the report includes:
" agreement on a common approach towards counter-terrorism
by Justice and Home Affairs Ministers;
commissioning reports from EU heads of mission in
third countries on those countries' counter-terrorism performance
commissioning an EU-wide response (to complement national
responses) to the questionnaire on counter-terrorist policy issued
to governments by the UN Counter-Terrorism Committee under Security
Council Resolution 1373;
agreement to strengthen intelligence and police co-operation;
an EU-wide freeze on assets linked to terrorists;
humanitarian assistance to the Afghan people;
efforts to improve trade and co-operation with central
Asian states and with Pakistan;
efforts to boost confidence and stabilise financial
10.5 He adds that the report notes work in progress such
" proposals on EU-wide safety and security
reflecting on how custom controls might be placed
on large cash movements across the Union;
accelerating work on changes to the money-laundering
efforts to increase co-operation on surveillance and
control of communicable diseases in response to the threat from
ensuring that counter-terrorism implications are taken
properly into account in drafting and adopting EU legislation
("terrorism proofing"); and
considering how to tighten security of communications
10.6 On the diplomatic front, the Commission notes that
the EU Troika visited Pakistan, Iran, Saudi Arabia, Egypt, and
Syria as part of a concerted effort by the Union, alongside the
activity of individual Member States, to forge the international
coalition against terrorism. The European Parliament debated the
situation twice and approved the draft Regulation
freezing the assets of organisations and individuals suspected
of supporting or financing terrorism activities within just two
days of its adoption by the Commission.
10.7 The crisis provided a new impetus for dialogue with
the Arab and Islamic worlds. The Commission calls for the EU to
work closely with the United States and insist that the Mitchell
Report is implemented and that a longer- term political perspective
is offered to both parties by resuming negotiations. It goes on
to argue that the crisis provides a further reason to increase
the momentum of the Barcelona Process and to strengthen trade
and co-operation with Pakistan, India, Iran, Saudi Arabia and
the Gulf States. Finally, the Commission says that it believes
that recent events highlight the need to refine the EU's crisis
management procedures. For instance, fuller use should be made
of the Rapid Reaction Mechanism, the aid instrument for funding
urgent non-combat operations.
This should operate with the same speed and flexibility as the
European Community Humanitarian Office does with humanitarian
10.8 Assessing the short-term impact on the economy and
on specific sectors, the Commission notes that before the 11 September
attacks economic growth was slowing sharply owing to higher prices,
falling confidence in the IT and telecoms sectors and a slowdown
in world trade. The attacks made the economic prospects worse
by increasing uncertainty and undermining confidence globally.
It concludes that the conditions exist for a recovery in 2002,
provided that the political situation does not deteriorate further.
Policy responses should be based on the scenario of a recovery
beginning in the second half of 2002, with an annual growth rate
around that achieved in 2001, which it forecasts will be 1.5%.
It recommends action to restore confidence and pursue vigorously
the long-term economic goals of the EU.
10.9 The Commission suggests that the Lisbon Strategy
remains valid and that structural reforms are needed now more
than ever. The Council should accelerate work to achieve agreement
before the Barcelona European Council on the telecoms package,
the Community patent and, in financial services, the Undertakings
for Collective Investment in Transferable Securities (UCITS) Directive,
rules on cross-border payments and the market abuse Directive.
Furthermore, political agreement should be achieved before Barcelona
on the Single European Sky package, the pension funds Directive,
the new framework for trans-European networks, and the proposed
public procurement package.
10.10 The report also calls "for a 'coalition for
development' and for confidence-building progress on EU enlargement
and the launch of a new trade round.".
10.11 It is important that Parliament should be aware
of the action taken by the EU in response to the 11 September
atrocities. The extent of these activities is impressive and it
is unfortunate that we are only now considering this Commission
report. As the Minister comments, it is unusual in that it summarises
what the EU has done across all fields of work.
10.12 At 14 pages the report, which was issued on
17 October, is short by Commission standards and the brief Explanatory
Memorandum on it cannot have taken long to prepare. Yet the Explanatory
Memorandum did not reach this Committee until 9 January 2002.
The Commission's intention was to provide the Council with a timely
account of action taken. We would like to have seen it at the
time that it was really relevant, and must agree with the Minister
that it is now largely of historical interest. As he says, policy
has moved on considerably since the report was prepared.
10.13 We understand that the request for an Explanatory
Memorandum was not sent to the Foreign and Commonwealth Office
in the first instance. This presumably accounts to some extent
for the delay and we ask the Government to take swifter action
in future to resolve any such confusion over allocation of responsibility.
But we also ask for documents on fast-moving events to be transmitted
electronically. In this day and age we should not have had to
wait 27 days for such a perishable document to be deposited.
10.14 We do not clear this document but ask the Minister
if he will take steps to ensure that, in future, the Institutions
transmit urgent documents to the UK for deposit within a few days
see paragraph 19 of this Report. Back
- ; see HC152-vi (2001-02), paragraph 17 (14 November 2001). Back
- ; see HC28-vi (2000-01), paragraph 8 (14 February 2001). Back