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6 30 May 2013 NEWS EUROPEAN PARLIAMENT Spending MEPs ‘wasted €5m in interpretation funds’ Report calls for greater sharing of resources English the dominant language in plenaries Toby Vogel tobyvogel@economist.com Adraft report from the European Parliament’s budgetarycontrol committee has criticised MEPs for requesting – but not using – interpretation services worth €5.5 million last year, 12% of the Parliament’s entire annual budget for interpretation. The report calls for a comprehensive review of how the sharing of interpretation resources across the EU’s institutions could produce cost savings, and asks the European Court of Auditors to issue by next March a report on interpretation and translation costs in the Parliament, the European Commission and the Council of Ministers. The report has no legal force, but is a signal that the Parliament is looking for additional savings in budgets for language services. The Parliament’s budget has earmarked €53m for direct interpretation costs. The committee had a first discussion of the report, drafted by Esther de Lange, a centre-right Dutch MEP, on Monday (27 May), and MEPs are today (30 May) debating new restrictions on the sale and marketing of cigarettes, as concerns grow louder about their impact on the economy. Linda McAvan, a British centre-left MEP who is guiding the legislation through the European Parliament, wants the rules to go further than the European Commission proposal by banning the use of branded logos on packs and forbidding internet sales. But amendments proposed by centre-right MEPs, particularly those from eastern and southern Europe, and inspired in part by fears about the economic impacts in a time of recession, MEPs have until today (30 May) to propose changes. The report is scheduled to be put to a vote on 17 June in the committee and in September in the plenary. The €5.5m waste from unused interpretation services – up from €4.4m in 2011 – nearly cancelled out the savings of €6.8m that were made last year through new policies, such as the more even scheduling of committee meetings through the week. The report notes a “growing trend in late cancellations” and asks the Parliament’s administrative leadership, the bureau, to provide the budgetary-control committee with a detailed analysis of the issue. In its request for investigation by the European Court of Auditors, the report urges an assessment of whether the EU institutions have adequate procedures to ensure that services provided meet the needs identified and are MEPS REJECT CROATIA’S COURT CANDIDATE The European Parliament’s budgetarycontrol committee on Monday (27 May) rejected Croatia’s candidate for a seat on the European Court of Auditors in Luxembourg. Neven Mates, a senior adviser to the governor of Croatia’s central bank since July 2009, left MEPs dissatisfied during his HEALTH Tobacco Economic concerns grow over tobacco restrictions Dave Keating davekeating@economist.com nomination hearing when he gave a legalistic reply to questions about whether he would withdraw his candidacy if the Parliament failed to endorse him. The Parliament’s position is not binding on the Council of Ministers, which appoints the member states’ representatives at the Court. could gut the measure. Many of these amendments echo concerns raised by member states. Earlier this month (17 May), the agriculture ministers of Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia adopted a joint declaration criticising the Commission’s proposal to revise the tobacco products directive, claiming it would harm economies and hurt thousands of families that depend on tobacco cultivation or marketing for their living. They argued that the proposed requirement for 75% of cigarette packs to be covered by graphic pictorial warnings would harm brand-owners and increase counterfeiting, depriving national coffers EP provided at the lowest possible cost. It suggests that the Court should report every year as part of the annual discharge procedure, in which MEPs approve the spending of the EU’s bodies. English-speaking plenaries The report includes a breakdown of the languages spoken in plenary between September 2009 and February 2013, providing evidence that English – spoken during 29.1% of the total speaking time – has become the Parliament’s de facto working language. It is followed by German (13.6%), French (9.5%), Italian (8.5%), Polish (7.7%) and Spanish (5.8%). Eight of the EU’s 23 official languages were used less than 1% of the time – Danish, Bulgarian, Lithuanian, Slovene, Gaelic, Latvian, Maltese and Estonian. Croatian becomes the EU’s 24th official language – See page 20 of funds that would flow instead into the black market. Any such measures could be entertained only if the EU established “support instruments for producers which would compensate for losses incurred due to the implementation of the directive”, they said. Athanasios Tsaftaris, Greece’s agriculture minister, told his counterparts at the agriculture council on 13 May that the Commission’s proposal to ban flavourings in cigarettes would be devastating for Greek families who earn a living from growing Burley flavouring for cigarettes. Spain, Italy and Cyprus are sympathetic to the Greek objection. The issue may be raised in today’s competitiveness council. Change of emphasis Tonio Borg, the European commissioner for health, said this week he is concerned that economic concerns are starting to dominate the debate. CITIZENS Complaints Ombudsman praises EU progress on transparency Toby Vogel tobyvogel@economist.com In his last annual report as European Ombudsman, Nikiforos Diamandouros has hailed positive changes in the European Union’s administration over the ten years he has been in office. But he warned that the fiscal crisis could negatively affect relations between citizens and the EU institutions. Diamandouros presented the annual report for 2012 to the European Parliament’s petitions committee on Tuesday (28 May). He noted that the number of complaints about a lack of transparency had dropped by 36% last year. “The European institutions have worked a lot to improve their transparency,” he said. “This is a key issue for the citizens.” The European Ombudsman deals with complaints about alleged maladministration by EU institutions. Of the 2,442 complaints received during 2012, only 740 were within the mandate of the ombudsman. Of these, a record 465 led to investigations – an increase of 18% over the previous year. The ombudsman found maladministration in 56 cases and made critical remarks in 47 cases. The highest number of investigations concerned Spain (340), Germany (273), Poland (235) and Belgium (182). However, the EU’s small member states – Lux- “This is a predominantly health matter. I have no problem discussing it elsewhere as well, but the main decisions should be taken in the health council,” he said. “I do not exclude that if we reach our target of reducing the number of smokers by 2% over the next five years there would be some economic consequences, but at the same time there would be positive ones which I think would be even more.” Other member states, including France, Belgium, Finland, Ireland and the UK, have been strongly supportive of the Commission’s proposal. Some of them want the EU to go further. The Irish government announced on Tuesday (28 May) that it will enact a ban on brand logos on cigarette packs – the first EU country to do so. The positions of Germany and Italy are not yet clear. Borg is to visit Berlin and Rome in the coming weeks. McAvan said she believes embourg, Cyprus and Malta – led in cases per capita. Of the investigations, 53% concerned the European Commission, 17% the European Personnel Selection Office, 13% the EU’s agencies, and 5% the European Parliament. The overwhelming majority of complaints – 85.3% – were brought by private citizens. The report says that 69% of cases were completed within one year of their receipt. Commenting on a drop in the number of complaints for the fourth year in a row, Diamandouros attributed this to improved information about the scope and limits of the office’s competences. At the same time, the number of cases resolved in favour of the complainants was the highest in the last decade. Diamandouros said that this tendency suggested that “more and more citizens addressing the ombudsman do it for the right reasons”. A review conducted by his office last year found that EU institutions complied with the ombudsman’s recommendations in four out of five cases. Three MEPs and three officials from outside the European Parliament are standing to succeed Diamandouros. The petitions committee will hold hearings with the candidates on 18 June, and the plenary is scheduled to elect the new ombudsman at its July session in Strasbourg (1-4 July). Mates worked for the International Monetary Fund (IMF) in Washington, DC, for 17 years; his last IMF post was as head of its office in Moscow in 2004-09. For the previous 15 years, he held various roles at the Institute of Economics in Zagreb – an independent government institution – including as chief of the monetarypolicy division. Mates’s nomination was rejected by 16 votes to 11, while that of George Pufan, Romania’s candidate for its seat on the Court, was narrowly approved, by 14 votes to 13 (see page 23). The two nominations will now go to a plenary session. Toby Vogel the economic objections being used by MEPs and member states are coming from the tobacco lobby. “There are exaggerations that are being put out there,” she said. “We have to set the economic costs against the health costs of smoking.” The Irish presidency of the Council of Ministers is hoping to secure a general agreement between member states at the health council on 21 June, but if no agreement can be reached an additional health council may be scheduled for October. The Parliament’s environment committee will vote on 10 June, with a plenary vote envisaged in September. On Wednesday (5 June), the Commission will try to allay fears that plans for large pictorial health warnings would increase cigarette counterfeiting. It will adopt a package of measures to strengthen protections against cigarette smuggling on the EU's eastern border. IN BRIEF Afghanistan mission On Monday (27 May), member states prolonged the EU police mission in Afghanistan (EUPOL Afghanistan) until 31 December 2014. A budget of €108 million was allocated for the additional period, which runs from 1 June. Maritime labour deal Member states and MEPs reached a deal yesterday (29 May) on new labour standards for ships sailing under EU flags. The rules implement the international Maritime Labour Convention. Bee risk identified A report released by the European Food Safety Authority (EFSA) on Monday identified a possible risk to bees from seed treatment pesticide Fipronil. Three other pesticides used for seed treatment were temporarily banned last month after an EFSA report in January identified a possible risk. German chemical company BASF, which makes Fipronil, said the EFSA report is inconclusive. Olive oil ban withdrawn The European Commission last week (23 May) withdrew a proposal for new rules to strengthen the olive oil sector after concerns were raised over a provision that would ban refillable olive oil containers in restaurants. The proposal had already been approved by member states. Dacian Cioloş, the European commissioner for agriculture, said he would revisit the proposal after consulting with restaurant owners and consumer groups. See page 9 Iceland’s government The composition of Iceland’s new centre-right coalition government was revealed on Thursday (23 May). The party that won the 28 April election, the Independence Party, has five seats. The government will, though, be headed by the leader of the Progressive Party, Sigmundur Davíð Gunnlaugsson. Progressives will also hold two the posts that are pivotal in relations with the EU, foreign affairs and fisheries. Access to lawyers MEPs, the European Commission and Ireland have agreed that anyone facing criminal proceedings in the EU should have the right to consult a lawyer. The agreement on Tuesday (28 May) is a breakthrough in negotiations on EUwide minimal procedural standards on the rights of suspects in criminal cases. It requires the formal approval of MEPs and member states.
30 May 2013 7 ANALYSIS Trade Long walk towards monetary union A swift, drastic clean-up of Europe’s banking system is needed more than ever. COMMENT 12 Commissioner takes tough line with China Dumping of solar panels ‘part of a wider problem’ Andrew Gardner andrewgardner@economist.com Karel De Gucht, the European commissioner for trade, declared this week that the European Union’s biggestever anti-dumping case was part of a “fundamental debate” about trading relations with China. In a thinly-veined warning to Germany, he said “if we in the EU do not stand together on this, then we will lose”. His comments, made at an event organised by European Voice on Tuesday (28 May), were targeted at member states that have criticised the Commission’s plans to impose temporary, six-month punitive tariffs on Chinese producers of solar panels. Germany’s economics minister, Philipp Rösler, said on 19 May that punitive tariffs would be “a grave mistake”. The UK’s minister for climate action, Greg Barker, said this Monday (27 May) that he had written to his EU counterparts to urge them to oppose levies. His ministry said that restrictions on Chinese imports would put “the growth of the low-carbon market across Europe at risk”. The Commission must formally announce its decision by 6 June, nine months into an investigation that will last 15 months. Europe’s imports of Chinese solar panels amounted to €21 billion in 2011, making it by far the biggest trade-defence case that the Commission has ever handled. According to EU trade rules, a decision on whether to impose tariffs during the course of an investigation is for the Commission to make. When the investigation is completed, five-year tariffs The increasingly rancorous debate about the European Commission’s plan to impose punitive tariffs on Chinese producers of solar panels has largely overshadowed the start of a process that Commission officials say could become a steppingstone to a free-trade deal with China. On Thursday (23 May), the Commission sent EU member states the details of the mandate that it would like to be given for negotiations with China on an investment agreement. The draft of the mandate has been in the works since February 2012, when EU and Chinese leaders gave can be imposed, but by member states rather than by the Commission. Debating the theme “Is the EU still a force for open markets?”, De Gucht told his audience: “What’s wrong about this, I believe, is that member states, already in this stage of the discussion, they want to have a predominant influence on what is happening. I think that this is completely contrary to their own interests.” He continued: “We all know that China is trying to influence and scare off member states. I think that this not a good habit...but the best protection for the member states is to say that this is the competence of the European Commission.” The proposal, which was EU takes a step towards investment agreement with China their go-ahead for the project. This would be the first stand-alone investment agreement since the European Union gained the power in 2009 to negotiate investment agreements on behalf of member states. EU officials say that the negotiations would follow two tracks. The more important would address the “huge” problem of access to the “long list of closed sectors” in the Chinese economy, or to sectors that are open, but with conditions attached. The other track would look at the protection of investments. The Commission said first circulated within the EU’s institutions in April, has come under attack chiefly from ministers in Germany, Europe’s biggest solar market and Europe’s chief exporter to China, and from the UK, a champion of open markets. that most EU member states have indicated that they approve of the mandate as drafted, and said that it could be finalised within a couple of months. It is still, though, looking for a “clear confirmation from the top leadership level” in China that Beijing is interested in a wide-ranging agreement. “There has to be explicit acknowledgement that market access will be taken into account,” an official said. The EU’s bid to open up China’s markets is being launched in a context of testy trade relations complicated by efforts by China to strike trade deals with the US, South Korea and Japan. The conditions that EU and Chinese companies experience on each other’s markets also differs greatly, as an official acknowledged. “Because the China market is so much more closed than the European market, it is clear that there are some additional measures that China will have to make,” he said, noting too that Chinese investors do not complain about the level of protection provided to Chinese investors. Nonetheless, the Commission says that an agreement should be of interest for China, in part because China is turning into a Protectionism allegations Within the solar industry, opponents of retaliatory tariffs base their case on the argument that punitive measures would shrink the solar market and therefore harm the EU’s own interest. However, the Chinese government and media routinely portray this trade-defence measure as protectionism, prompting German Chancellor Angela Merkel to say, after meeting Chinese Premier Li Keqiang on Sunday (26 May), that “protectionism is not the answer to globalisation”. She did not refer to the solar case specifically. “It is interesting that no one is putting into question whether they [Chinese producers] are dumping,” De Gucht said of the Commission’s critics. The Commission is also investigating whether subsidies provided by the Chinese government to the Chinese solar industry amount to an unfair trade practice. But De Gucht placed the case in a wider framework, of overall Chinese industrial policy. “What [this case] is about is whether or not they have to respect a certain number of disciplines, a certain number of rules and conventions that add up to fair competition. It is whether we can accept that they can dump as they wish.” Some in the European solar industry have suggested that dumping is largely a matter of sales of stocks by companies that are collapsing as China’s solar industry consolidates. However, De Gucht indicated that Chinese producers’ practice of selling below cost on foreign markets followed a pattern set by the Chinese government. Dumping, he said, was “happening in a number of industrial sectors and it is very easy to find them: you read the last five-year plan [set by the Chinese government] and you can identify “capital exporter”. Chinese investment in Europe has soared in the past two years and an agreement would provide assurances to China that the EU’s market will remain open in the long term. Much of the benefit for both sides, the Commission says, would come from consolidating the 25 existing bilateral agreements between China and member states, some of which date back to the 1980s. Officials believe talks will strengthen “the voices in the [Chinese] government that are pleading for further liberalisation”. One said that there has been “a STRONG WORDS Karel De Gucht, the European commissioner for trade. JENNIFER JACQUEMART De Gucht: disunited EU will ‘lose’ trade battle with China them, and it is in those sectors that it is happening”. On 15 May, the Commission warned China that it is prepared to impose sanctions on two telecoms equipment-makers, Huawei and ZTE Corp, if the Commission concludes that they received illegal subsidies or dumped their products on the European market. De Gucht, who later indirectly referred to China as “our fiercest competition on almost all our markets”, said: “Member states should realise that when they try to weaken the European Commission, first of all they are weakening themselves.” For more, go to www.europeanvoice.com/ open_markets leap in liberalisation and that has turned out well for China and there is a realisation that continuation is good for them”. A UK government source welcomed the bid to secure an investment agenda, though his comments came before he had seen the mandate. “The EU’s trade relationship with China has been a bit less than the sum of its parts...It has lacked the weight that you get when you are in negotiations with people.” Talks on the investment agreement “will thicken out the relationship, not just the content”. Andrew Gardner
Page 1 and 2: Welcome, Croatia A special report o
Page 3 and 4: NEWS 30 May 2013 3 PARLIAMENT Anti-
Page 5: NEWS SPECIAL 30 May 2013 5 Mind you
Page 9 and 10: COMMENT 30 May 2013 9 On the wrong
Page 11 and 12: COMMENT 30 May 2013 11 Edward Lucas
Page 13 and 14: COMMENT 30 May 2013 13 Europe’s t
Page 15 and 16: 30 May 2013 15 SPECIAL REPORT Croat
Page 17 and 18: CROATIA 30 May 2013 17 REUTERS Gove
Page 19 and 20: CROATIA 30 May 2013 19 Željko Jova
Page 21 and 22: CAREERS 30 May 2013 21 JOBS Commiss
Page 23 and 24: 30 May 2013 23 ENTRE NOUS !Jens Fer

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