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EU Competitiveness Council

Volume 559: debated on Wednesday 27 February 2013

The EU Competitiveness Council took place in Brussels on 18 and 19 February 2013. Shan Morgan, Deputy Permanent Representative to the EU represented the UK for research items on 18 February, and I represented the UK for internal market and industry items on 19 February. A summary of those discussions follows.

For research items, discussion focused on the 2013 annual growth survey and Commission recommendations on open access to scientific information.

On the former, Research Ministers debated the Commission’s annual growth survey (AGS), one of a series of debates in sectoral Councils that will feed into a presidency report to the spring European Council. Commissioner Geoghegan-Quinn (Research and Innovation) argued that growth-friendly fiscal consolidation, which maintained or increased the share of public investment in research, education and energy, was essential and that national research funding could also be delivered more effectively. Member states broadly welcomed the AGS. The UK noted the importance of ensuring that the wider regulatory environment was conducive to innovative activity, and the need for a state aids framework for research and innovation that recognised the increased risks and costs associated with these activities (without undermining the internal market).

On the latter, the Commissioner emphasised the importance of open access as a principle, noting that she felt that national approaches were too fragmented and that this was holding European researchers and industry back. Member states were united in agreement on the importance of open access to research publications, although there were clear differences in respect of levels of implementation.

Under AOB, delegations received a short presentation on the biennial report of the high-level group on joint programming and Commissioner Oettinger (Energy) then provided a brief update on the international thermonuclear experimental reactor (ITER) fusion programme.

There was a lunch-time discussion of the role of the research system and the research community in supporting smart specialisation led by Professor Mark Ferguson (Director-General, Science Foundation Ireland).

The main internal market and industry issues discussed on 19 February were: the registration, evaluation and authorisation of chemicals (REACH), the entrepreneurship action plan and the European semester. A number of AOB points were also covered. Outside the Chamber, there was a lunch discussion on state aid modernisation and the signing of the unified patent court agreement.

Council began with a policy debate on the review of REACH, the EU’s regulation on chemicals and their safe use. I and many member states intervened to stress the importance of adapting the system for small and medium-sized enterprises (SMEs), and the importance of reducing fees and cost-sharing. I also highlighted a number of examples where REACH had negatively impacted UK business. In addition to the review of REACH, the Council also discussed an accompanying paper on nanotechnologies. There was general support for the Commission’s approach to handle nanotechnologies within the REACH framework, although some countries suggested there might be a need for a separate regulatory structure in future. In line with several member states, I supported the Commission, stressing the importance of a risk-based approach.

The next substantive item concerned the entrepreneurship action plan. Shan Morgan took the seat for this item. Generally, member states welcomed the action plan, with many stressing in particular the importance of access to finance and encouraging a more entrepreneurial spirit within Europe. The UK agreed with the initiatives presented, particularly those relating to access to finance and digital services, but highlighted that most activity in this sphere was for member states to undertake with the Commission’s role being to support and share best practice.

The lunch discussion focused on state aid modernisation. The discussion focused on the question of regional aid and on the Commission’s proposal for a ban on aid to large enterprises in certain disadvantaged areas (“c” areas) in particular. Most member states, including myself, argued that a ban was unnecessary and would damage member states’ ability to promote growth. The Commission (Almunia) responded that he would no longer pursue a ban but that new compatibility conditions would have to be rigorously enforced if this aid was to be allowed to continue. I also expressed concern that the state aid approval process was too slow, unnecessarily delaying much needed Government interventions.

Following lunch I, along with another 23 states, signed the unified patent court agreement. This international agreement is the final piece of the patent package agreed by the contracting states, and will come into force once ratified by at least 13 states.

The final substantive agenda item was a discussion on the European semester, including the annual growth survey. Again, Shan Morgan took the UK seat. There was a full round-table on the subject with most member states (including the UK) focusing on the need for improved governance of the single market, the full implementation of the services directive and improved access to finance. The UK highlighted the creation of a single market centre in the UK to tackle problems here, and also suggested the Commission define a proportionality test to ensure that implementation of the services directive was more uniform across the EU.

Several AOB items were discussed at the Council. The first concerned the European steel industry, an item requested by the Belgian delegation. Several member states intervened to stress the need for, and importance of, a native steel industry in Europe—with some going as far as suggesting state aid rules could be relaxed in this area. This suggestion was strongly countered by other member states. I intervened to stress that restructuring in the industry should be industry-led, and any role of Government should be in stimulating demand.

The next AOB point was an item on the tobacco regulation, as requested by the Polish delegation. Some states were concerned that the proposal, to be discussed by Health Ministers, did not take sufficient account of the negative impacts on competitiveness. The UK did not intervene.

The final morning AOB concerned general product safety. Some member states expressed concern about the introduction of a provision regarding product origin marking, while others came out in support of the Commission’s addition. Again, the UK did not intervene.

The first afternoon AOB item concerned the Commission’s missions for growth initiative, where Commissioner Tajani described the trade/industry missions that he had recently undertaken. In this context, he had invited hundreds of EU companies to meet with presidents/senior Ministers of third countries and had signed 56 “non-binding” memorandums of understanding (MoU) on topics such as tourism, raw materials, space and SME co-operation. The UK called for the process to be more transparent, and that Council be informed before trade missions occur and before MoUs are signed.

The final AOB item, and final item of the day, concerned the union customs code. The UK did not intervene on this information item.