House of Lords - European Union - Twenty-Third Report

Select Committee on European Union Twenty-Third Report

CHAPTER 4: The details of the Annual Policy Strategy priorities

17. The Commission says that "[p]romoting sustainable economic and social reform in Europe under the renewed Lisbon Strategy for growth and jobs will continue to be at the heart of the Commission's political agenda."[15] The Lisbon Strategy, agreed in 2000 and refreshed in 2005, aims to make the European Union the most competitive economy in the world and to achieve full employment by 2010. Competitiveness will be crucial to the EU's prosperity, so we encourage the Commission to keep up the momentum on the Lisbon Strategy.[16]

18. The Commission's Annual Policy Strategy makes three references to the current global financial situation, saying: "The impact of the global financial turbulence on the real economy and the hike in raw material prices will require the EU to deepen its structural reforms at both EU and national level"; "The Commission will actively engage in the response to the global financial turbulence, which will require long-term adjustments in the regulatory and supervisory environment for financial services"; and "The current financial turmoil calls for a coordinated EU response, including a stronger presence of the Commission in international financial institutions."[17]

19. The Commissioner told us that the Finance Ministers of the G7 and Commissioner Almunia (Commissioner for Economic and Monetary Affairs) had reaffirmed their support for the International Monetary Fund to work closely with other international bodies, especially the Financial Stability Forum.[18] They expressed their support for the Commission becoming an observer of the Financial Stability Forum, because of the overlap between the Forum's work and the work programme endorsed by the ECOFIN Council, and so that it could act as a co-ordinator between the G7 and the EU in this area (pp 14-15). The Commission's position was that it wanted observer status, and was "looking for support from the Member States for that" (Q 48). The Commissioner pointed out that the Commission has observer status in the Basel Committee on Banking Supervision (p 15), and also that the Commission could not act beyond the competences granted to it in the Treaties, including in its work in international financial institutions (Q 53).

20. The Minister for Europe commented that "[i]n terms of the role of Europe in these international debates and international institutions … there is a role for the Commission, although the exact shape and nature of that role is open to conjecture and continued discussion" (Q 18). There will need to be careful consideration and case-by-case justification of any enhanced Commission role in international financial institutions.

21. The Annual Policy Strategy states that the Commission will assist the European Institute for Innovation and Technology (EIT) in its first year of full operation.[19] The EIT was set up by Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008. Its aim is to encourage and facilitate networking and cooperation between universities, research and business communities working in fields that are considered to represent "strategic long-term challenges for innovation in Europe", such as climate change.[20] We look forward to seeing detail in the Annual Legislative and Work Programme about the ways in which the Commission will assist the EIT. Given the importance placed by the Commission on "Putting the Citizen First", we stress to the Government and the Commission the importance of ensuring the involvement of the private sector, most notably at the local level.[21] It is important that the EIT maintains and develops local projects and thereby helps Europe become more understood by local communities.

22. The Minister told us: "[t]he purpose of the European Institute, in my understanding, is to be a European hub of innovation, it is not to create a research and development monster and it is not to suck up capacity and expertise that already exists in other European capitals, and … in different regions and towns and cities throughout the European Union" (Q 9). We urge the Government to seek to ensure that this purpose is followed in the development of the EIT.

23. We note that the Annual Policy Strategy forecasts a 2009 Communication on sectoral social dialogue and its contribution to the Lisbon Strategy.[22] Sectoral social dialogue is dialogue between employers and employees on a sector-by-sector basis. We are grateful for the Commission's clarification of the background to this proposal and welcome it on that basis (p 18).

"Climate Change and Sustainable Europe"

24. 2009 will be an important year for climate change work, including the finalisation of the 2008 climate change and energy package with a view to formulating a robust EU position at the Copenhagen climate change talks (December 2009).[23] The Minister told us that the conversation on climate change and energy was "pretty lively" in some capitals. The issue of "carbon leakage" was important. This refers to the transfer of investment opportunities to countries "with a less rigorous climate change regime", with the effect of increasing emissions in the destination countries. He concluded, "Her Majesty's Government is very strongly of the view that the solution to this is not a carbon tariff or a protectionist tariff of any sort, because it is pretty dangerous if the international message is that the only way you can do the right thing on climate change is by virtue of a new round of tariffs, and it would lead very quickly to retaliatory measures" (Q 17). We agree that the EU must not attempt to tackle the climate change challenge by applying protectionist measures.

25. We asked the Commissioner about EU action on high prices for fuel and for food. She told us that "[t]hese matters are at the top of the political agenda in all the Member States right now … it is extremely important" (Q 51). She indicated that discussions at the June European Council had shown "the importance of finding the right balance" between "responding quickly to a genuine problem", and "acknowledging the deeper challenge of adjusting to new realities for the long term". She added that Commission action in the area of energy prices would include a package of measures to help fishermen face the need to restructure, and proposals on emergency and commercial oil stocks. The Commission and the French Presidency (which runs from 1 July 2008 to 31 December 2008) will report on the feasibility and impact of "measures to smooth the effects of the sudden price increases" to the October 2008 European Council, and the Commission will report to the European Council on food and oil price developments in Europe and internationally in December 2008 (p 16). We note the Commission's efforts in this area, and urge the Commission, in their forthcoming work, to take into account changing views regarding the use of biofuels.

26. The Commissioner made the connection between high energy prices, energy security and climate change. Agreeing the proposed EU policy on climate change and renewables would lead to reduced oil and gas consumption, and therefore increased energy security. She said that it was important to promote competition in energy markets, enhance dialogue with oil exporting countries, and improve the conditions for investment in oil exploration, production and refining. The Commission is working on the external aspects of energy security for a discussion at the December European Council (p 16). We note that energy security is also a priority of the French Presidency (see QQ 36, 51). This is exactly the sort of issue that the Commission needs to prioritise: where Member States are stronger together, and where it really matters to citizens. We encourage the Commission's efforts in this area and note the legislative initiatives it has undertaken to tackle climate change, and to reduce CO₂ emissions and dependence on oil by promoting the use of renewable sources of energy.[24]

27. We will take a close interest in the Commission's work on climate change in 2008 and 2009. Our Internal Market Sub-Committee, Sub-Committee B, is conducting an inquiry into the EU's renewable energy target. Our Environment and Agriculture Sub-Committee, Sub-Committee D, is undertaking a short inquiry into the Commission's proposal for a revised EU Emissions Trading Scheme. Sub-Committee B will follow carefully the proposals to reduce greenhouse gas emissions from freight transport, including emissions from ships, included in the Annual Policy Strategy. It will also monitor the development of the Energy Policy for Europe which will lead to a new Energy Action Plan for the years 2010-2014.[25]

28. The Commission expects, in 2009, to implement the results of agreement planned for late 2008 on the "Health Check" of the Common Agricultural Policy (CAP).[26] The CAP "Health Check" is a mid-term review of the Common Agricultural Policy. On the basis of experience since the 2003 reform of the CAP, the Commission has proposed a number of changes that are intended to improve the 2003 reform Regulation without proposing more fundamental reform. The Minister, commenting on the CAP, told us: "the health check is important in terms of looking to simplify the single payment scheme and other farming and agricultural reforms, and it is also important, secondly, to have a conversation about the longer term. But we are very firm that the health check should not be used to set a longer term strategy on agricultural reform which is limited in its ambition. It has to be a wholesale reform of the Common Agricultural Policy … There can be in a health check specific improvements but it is not a replacement for a wider reform of the Common Agricultural Policy … I know there is a temptation in some European capitals for that to happen" (Q 17). We support the Government in this long-term ambition for fundamental CAP reform, and we urge the Commission to ensure that the Health Check agreement is implemented promptly and effectively in the course of 2009.

29. The Commission says in the Annual Policy Strategy that "[w]ork on the quality of agricultural products will continue", and Sub-Committee D is likely to take a strong interest in the Green Paper and Communication on Agricultural Product Quality that the Commission forecasts.[27] We consider that the Commission's work on agricultural product quality must assist, rather than impede, progress towards improving the market orientation of the Common Agricultural Policy.

30. The Commission includes in its list of key actions an action plan to develop a European Marine Observation and Data Network.[28] The Network will seek to be a "source of primary and processed data that can serve both public institutions, including their researchers, and commercial providers".[29] A European Marine Observation and Data Network could be crucial in delivering an integrated marine policy and the Commission should concentrate on its careful design in order to ensure efficacy and avoid duplication of Member States' efforts.

31. The Annual Policy Strategy says that in 2009 the Commission will submit a proposal on the reform of the Common Market Organisation (CMO) for fisheries and aquaculture products.[30] The CMO regulates aspects of the market by applying marketing standards, rules on consumer information, rules on Producer Organisations, and provisions relating to prices, intervention and tariffs. The Commission explained that the CMO is currently undergoing a comprehensive evaluation which may result in proposals for its reform (p 17). The Government "firmly supports further reform, which is long overdue" (p 12).

32. We have considered whether the fisheries and aquaculture CMO reform initiative might provide an opportunity to make further progress on eco-labelling of fisheries products. The Government agreed that "[r]eform will also be an opportunity for a greater focus on the consumption end of the fisheries marketing chain, linked to the promotion of fish as a healthy food source … eco-labelling will be a key element of this". The Government "fully supports the principle of improving consumer information to assist purchasing decisions" (p 12). The Commissioner told us that the Commission plans to put forward a proposal for a new "Public/Private Partnership" in early 2009, "to stimulate the creation of a sector-driven European standard for both wild fisheries products and aquaculture", which would "produce the minimum EU requirements for Eco-labels" and "provide the minimum principles for certification and accreditation which would remain Member State competence". EU legislation may or may not be needed, and stakeholders will be invited to participate. "The aim is to have a scheme based on a real partnership with industry and civil society which will be responsive and easily adaptable to the needs of the industry (from fishermen to retailers) but take account of civil society aspirations" (p 17). We support and encourage Commission initiatives to ensure that fisheries policy reflects the potential contribution that consumers can make in determining the sustainability or otherwise of EU fisheries, predominantly through clear, accurate and intelligible information provision.

"Making a Reality of the Common Immigration Policy"

33. Home affairs, particularly border management and immigration, continue to be high priorities for the Commission, and are one of France's top priorities for its Presidency.[31] The Government, in its Explanatory Memorandum, concurs with the Commission that "implementing the Global Approach to Migration remains a priority".[32] The EU's Global Approach to Migration was agreed by the European Council in December 2005, and brings together migration, external relations and development policy to address migration in an integrated, comprehensive and balanced way in partnership with third countries. The Commissioner told us that the idea of an immigration pact would be "part of the agenda where we now have to co-ordinate with the French Presidency" (Q 47). Some of the initiatives promoted by the Commission, such as EUROSUR and the entry/exit system, have significant legal, social, financial and human rights implications.[33] These implications need to be analysed and published for consultation before any legislative proposal is brought forward, along with the Commission's other impact assessment work focussing on the technical feasibility of these initiatives. Consideration is also needed as to whether any legislative proposals will meet the subsidiarity test and respect the proportionality principle.

"Putting the Citizen First"

34. The Commission says that in 2009, specific attention will be given to combating the risk of terrorist attacks in areas such as chemical, biological, nuclear and radiological threats.[34] We endorse the shift of focus to specific threats, which is entirely reasonable after much effort was concentrated on achieving further convergence on criminal law aspects which assist the fight against terrorism.[35]

35. While some measures, such as the work on consular protection, may enhance citizens' rights, there is no strong focus on fundamental rights in the Annual Policy Strategy.[36] While the protection of fundamental rights, as an aim in itself, is not the focus of the work of the EU (particularly given the role of the Council of Europe in this area) fundamental rights should have a more evident role in shaping policy. We would expect the Annual Policy Strategy, in discussing policies in areas affecting security and fundamental rights—such as immigration and criminal justice—to flag up human rights concerns and engage in a preliminary discussion of issues raised.

36. When asked which of the Commission's priorities the Government considered most important, the Minister told us that one of the top three would be "a watching brief on justice and home affairs" (Q 3). When asked whether the "area of freedom, security and justice" was a priority for the Commission, the Minister replied that the contents of the Annual Policy Strategy were "a reflection of a degree of vigilance by Her Majesty's Government which is continually arguing the case for mutual recognition rather than harmonisation". He agreed that "[o]n the issue of fundamental freedoms and justice and home affairs … the Annual Policy Strategy is relatively light", and he said that this was "largely because much of the work is contained in the five-year Hague Programme[37] of work, so most of the justice and home affairs issues are on-going as part of the four previous annual policy strategies" (Q 25). Civil and criminal justice do not receive much attention in the Annual Policy Strategy.[38] The Commission seems to envisage implementing what it can of the existing Hague Programme in 2009. The discussion of the successor of the Hague Programme is likely to provide a focus for a greater engagement with priority-setting in this area.

37. In written evidence, the Commission gave us more detail on its plans in the areas of civil and criminal justice (see pp 17-18): given the problems encountered in the implementation of the criminal justice aspects of the Hague Programme[39], we would have welcomed more detail in the Annual Policy Strategy as to which aspects of the Hague Programme would be focussed upon. While multiannual frameworks are important in the area of justice and home affairs, we would in future expect to see discussion in the Annual Policy Strategy, drawing on the multiannual framework, of the intended focus of the Commission's efforts in this field during the following year. We look forward to seeing more detail in the Annual Legislative and Work Programme on the Commission's proposals for improving access to justice.

38. The Minister, giving evidence before the Irish referendum, considered that the Commission's work in the area of freedom, security and justice during 2009 would be significantly affected by the entry into force of the Lisbon Treaty. He thought that there would not be a substantial number of new justice and home affairs proposals brought forward in the first few months after the Treaty's implementation, as the new architecture bedded down (Q 25). He considered that "a lot of the energy and time over the next few years on justice and home affairs issues will be about taking existing policies from Pillar Three governance and transposing them into the Community framework." The transposition of 82 Third Pillar measures into Community measures was "the substantial job that has to be completed over the next few years" (Q 26) and it would "limit the scope for additional initiatives in this field for some time to come" (p 10). The UK would have the right to choose whether to participate in (or opt in to) each of those measures as they were transposed.

39. Clearly, the Irish "no" will have an impact on work in the area of criminal justice in 2009. Transposing existing Third Pillar measures into Community legislation cannot be undertaken unless or until the Lisbon Treaty is ratified by all 27 Member States. We therefore encourage the Commission to press on in 2009 with initiatives envisaged under the Hague Programme and to work with the Council and the European Parliament to conclude measures currently under negotiation, such as the proposal on the application of the principle of mutual recognition to supervision orders in pre-trial procedures in the Member States.

"Europe as a World Partner"

40. The Commission's fifth priority is "consolidating the role of Europe as a global partner" (Q 34).[40] The Commission states in the Annual Policy Strategy that "[e]nergy security, climate change and migration will remain important guiding themes in external policy".[41] We note that these themes have been endorsed in European Council conclusions.

41. The Commission says that in 2009, the European Neighbourhood Policy will focus on full implementation of the twelve European Neighbourhood Policy Action Plans.[42] The European Neighbourhood Policy was developed in 2004, with the objective of avoiding the emergence of new dividing lines between the enlarged EU and its neighbours, and instead strengthening the prosperity, stability and security of all states concerned. The central element of the European Neighbourhood Policy is the bilateral European Neighbourhood Policy Action Plans, agreed between the EU and each partner. These set out an agenda of political and economic reforms with short and medium-term priorities. We have some doubts about whether the "full implementation of the twelve action plans" in 2009 is a realistic ambition, but we encourage the Commission to make all possible progress.[43]

42. With regard to enlargement, the Commissioner told us that the Commission has "no intention" of changing its "very clear and strong commitments" towards Croatia and Turkey (Q 52) in the light of the Irish referendum.[44] She discussed the need to explain the "overwhelming" benefits of enlargement and how enlargement "has helped both development in the countries where [migrants] have come from and the countries in which they very often work", and added that thus far "[w]e have not been able to explain well enough the benefits of enlargement" (Q 60). We welcome the Commission's continuing commitment to accession negotiations and the Copenhagen criteria.

43. Our Foreign Affairs, Defence and Development Policy Sub-Committee, Sub-Committee C, is conducting an inquiry into the European Security Strategy, adopted in 2003. There is no reference to the 2003 Strategy in the Annual Policy Strategy (nor to the security-development nexus[45]—see QQ 63-4). According to the Commission, this is because an improved and complemented European Security Strategy is scheduled for adoption at the end of 2008 (p 18); we hope it subsequently becomes a priority for the Commission.

15 Annual Policy Strategy p 4 Back

16 See European Union Committee, 28th Report (2005-06): A European Strategy for Jobs and Growth (HL 137). Back

17 Annual Policy Strategy pp 4, 6 Back

18 The Financial Stability Forum was convened in April 1999 to promote international financial stability through information exchange and international co-operation in financial supervision and surveillance. Membership includes senior representatives of national financial authorities (e.g. central banks, supervisory authorities and treasury departments), international financial institutions, international regulatory and supervisory groupings, committees of central bank experts and the European Central Bank. Back

19 Annual Policy Strategy p 4; see European Union Committee, 25th Report (2006-07): Proposal to establish the European Institute of Technology (HL 130). Back

20 Recital 7 of the adopted Regulation (294/2008) Back

21 The private sector is important in the context of the EIT because one of its stated priorities is to transfer knowledge to the business context, as well as to support the creation of start-ups, spin-offs and small and medium-sized enterprises (SMEs). In our Report on the proposal (European Union Committee, 25th Report (2006-07): Proposal to establish the European Institute of Technology (HL 130)), we took the view that "the only way to assess effectively whether or not the EIT is successfully achieving the objectives for which it is intended will be to look closely at the business impact of its activities at local level". Back

22 Annual Policy Strategy p 14 Back

23 Annual Policy Strategy p 5 Back

24 Sub-Committee B is conducting an inquiry into the EU's 20% renewable energy target; a report will be published in the autumn of 2008. Back

25 Annual Policy Strategy pp 5, 15 Back

26 COM(2008) 306, 20 May 2008. The package of documents and further information can be found at http://ec.europa.eu/agriculture/healthcheck/index_en.htm. Back