Brussels Brief - April 27, 2007
April 27, 2007
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KEY DEVELOPMENTS
Air Transport: ECJ Rules Dutch – US Aviation Deal Illegal
Mélanie Bruneau
The European Court of Justice (ECJ) has ruled that the transatlantic agreement between the Netherlands and the US violates EU law. The European Commission brought the case before the ECJ in 2004 on the grounds that an EU Member State could not conclude such a bilateral agreement because i) it fell within the exclusive competence of the EU, and ii) it could give national carriers an unfair advantage over other Members States' airlines. The ECJ ruling makes the Netherlands the ninth EU Member State to have its bilateral aviation agreement with the US ruled illegal. The judgment is of political rather than legal consequence because a new EU-US aviation deal, which aims at replacing the patchwork of existing bilateral agreements with the US, is set to be signed at the EU-US summit on 30 April 2007.
External Relations: EU and US Agree to Transatlantic Market Pact
Andrea Hamilton
The US and EU have reportedly agreed to the terms of a transatlantic economic pact that would promote EU-US economic collaboration, with the ultimate goal of creating a transatlantic market without borders. According to media reports, the pact would harmonise key regulatory areas, including intellectual property rights, environmental issues, technical standards and trade security. To effect these objectives, the pact reportedly envisages the creation of common regulatory norms in certain industries, and the creation of new posts focused on transatlantic trade. While the EU Presidency reportedly wants the pact to take effect by 2015, it is expected that certain areas, such as environmental protection and energy, may prove difficult to harmonise. The pact is expected to be signed at the EU-US summit on 30 April 2007.
State Aid: Commission to Draft New Block Exemption Regulation
Jérôme Cloarec
Following the "State Aid Action Plan" adopted in 2005, the European Commission has presented a new block exemption regulation for consultation. The regulation will consolidate the five existing block exemption regulations (aid to small and medium-sized enterprises (SMEs), research and development aid in favour of SMEs, aid for employment, training aid and regional aid) into a single text. Block exemption regulations permit Member States to grant aid in the sectors covered by the regulation without having to first seek the Commission’s approval. The new regulation will also include exemption rules for three other types of aid: environmental aid, aid in the form of risk capital, and research and development aid for large companies. Additionally, specific rules have been added for aid granted in the sectors of agriculture, fisheries and transport. The reform aims to simplify and increase the coherence of the existing rules.
Trade: FTA Negotiations With India, Korea and ASEAN
Morten Nissen
The EU Member States have mandated the European Commission to negotiate a new generation of free trade agreements (FTAs) with India, South Korea and the Association of Southeast Asian Nations (ASEAN). Independent research suggests that the agreements could increase EU exports by more than EUR 40 billion annually by focusing on areas not currently covered by WTO rules such as investment, trade in certain services and the removal of non-tariff barriers. The biggest gains for the EU would include business services to ASEAN, industrial and manufactured goods to India, and business services to Korea. The Commission expects to launch negotiations in the months to come.
External Relations: EU to Start Negotiations for Association Agreement with Andean Community
Sara Bacchio
On 19 April 2007 the EU and the Andean Community announced their intention to start negotiations for an association agreement to boost the partnership between the two regions. The association agreement will be a comprehensive agreement focusing on political, co-operation and trade matters. It will be negotiated on a ‘region-to-region’ basis in order to foster the regional integration process in the Andean Community. The Commission has also adopted an aid package aimed at promoting stability and sustainable development in the Andean Region. The package amounts to approximately EUR 713 million for the period 2007 to 2013. The negotiations are scheduled to start at the next EU-Andean Community Joint Committee which will be held in La Paz at the end of May 2007.
Financial Services: Public Consultations on Facilitating Cross-border Private Placements
Geert Dierickx
The lack of a European private placement regime creates legal uncertainty and materially hinders cross-border business between financial investors. This legal uncertainty also increases the costs of raising money, particularly by inflating legal and advisory fees. In turn, these costs have a negative impact on the returns available to investors. The European Commission is gathering information on the need for and possible design of a European private placement regime. With this call for information, interested parties are invited to express their views and submit relevant evidence related to private placement regimes in EU Member States before 30 June 2007. This consultation will contribute to the Commission's assessment of the need for a European private placement regime scheduled for the end of 2007.
Competition: Commission Initiates Formal Proceedings Against Alleged Car Glass Cartel
Philip Torbøl
The European Commission has sent a Statement of Objections to manufacturers of car glass who are suspected of having allocated customers between them and agreed supply quotas and prices for most of the motor vehicle manufacturers in Europe. Car glass is used in different car parts such as sunroofs, windscreens and other window glasses, and has the particularity that it does not shatter into sharp pieces on impact. Brussels-based manufacturer Glaverbel SA, as well as Britain's Pilkington Group Ltd., have confirmed that they were among the addressees of the Statement of Objections. They now have two months to respond to the allegations against them.
Consumer Protection: Commission Publishes 2006 Annual Report on Dangerous Consumer Products
Abigail Cohen
Article 12 of Directive 2001/95/EC on general product safety imposes an obligation on Member States to notify the European Commission whenever they adopt restrictive measures in relation to the marketing or use of products within their territory. RAPEX is the alert system which facilitates notification in the case of non-food consumer products, except for pharmaceutical and medical devices. The Annual Report found that restrictive measures concerning 924 dangerous products were reported through RAPEX in 2006, representing a 32 per cent annual increase. Following notification, information is shared rapidly among surveillance authorities in 30 European countries. Dangerous products are then banned or their sale is restricted on the market. The increased use of the RAPEX system demonstrates that it is becoming increasingly difficult for manufacturers to conduct a “silent recall” of dangerous products.
Mergers: Commission Publishes Draft Revised Guidelines on Remedies
Yannis Virvilis
The European Commission has published draft new guidelines on remedies in the context of mergers, inviting third parties to make comments. The draft text will replace the current guidelines, which date from 2001. The proposed new guidelines reflect the conclusions drawn by the Commission from its Merger Remedies Study which was published in 2005, recent European Court case law as well as the new Merger Regulation 139/2004. The draft text will also require some amendments to the Implementing Regulation 802/2004, such as the obligation of merging parties to complete a form (“Form RM”), when proposing remedies.
State Aid: Commission Supports Green Electricity in Slovenia Subject to Conditions
Elena Kostadinova
The European Commission has authorised Slovenian tariffs for “green” electricity subject to changes in the financing mechanism. Slovenian network operators have the obligation to purchase electricity produced from renewable energy sources and efficient combined heat and power plants at a price above the market price fixed by the State. The aid thus provided by Slovenia does not exceed the difference between the market price and the production cost for this type of electricity and is in line with EU environmental aid guidelines. However, as part of the scheme, consumers had to pay an additional parafiscal levy on their electricity consumption. According to the Commission this could have led to discrimination against imported “green” electricity. Slovenia has therefore undertaken to finance the scheme through a lump sum based on connection power.
NEXT WEEK’S EVENTS
Monday 30 April – Friday 4 May 2007
COUNCIL MEETINGS
No meetings scheduled for next week
COURT OF JUSTICE
Judgments
Area of Freedom, Security and Justice
C-386/05 Color Drack
Competition
C-369/06 Commission v Austria
Police and judicial cooperation in criminal matters
C-303/05 Advocaten voor de Wereld
Opinions
Customs union
C-62/06 Z.F. Zefeser
Environment and consumers
C-388/05 Commission v Italy
COURT OF FIRST INSTANCE
Judgments
Fisheries policy
T-219/04 Spain v Commission
State aid
T-357/02 Freistaat Sachsen v Commission
