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Midday Express: Action on financial mismanagement

Midday Express

I. Résultats de la Commission du 9 juillet 2003 - Outcome of Commission meeting of 9 July 2003

· Commission takes action on financial mismanagement in Eurostat

Over the past few weeks the European Commission has conducted its own internal investigations into the Statistical Office of the European Communities, Eurostat. The preliminary results of these analyses clearly point towards the existence of systemic management weaknesses and irregularities within Eurostat. With all due respect to the independent and on-going proceedings of the European Anti-Fraud Office (OLAF), the Commission believes these concerns have to be dealt with immediately. Therefore the Commission has agreed on a series of measures which are designed to address the most pressing problems. ·

· Initiative for Growth : boosting investment in Trans European Networks and major R&D projects

The European Commission has outlined its comprehensive package of financial and regulatory measures to boost investment in Trans European Networks (TENs) and major Research and Development (R&D) projects : the Initiative for Growth. The obstacles to more private sector investment in these two areas are multiple and complex. They can only be overcome if EU Member States take the long-term view and develop credible policies to overcome the regulatory and technical obstacles that hinder an acceleration of investment in these fields. Governments are invited to review their revenue and expenditure plans, to redirect their public expenditure towards growth-enhancing investment and to seek a higher leverage from private investment. EU funding has to become more focused on high priority projects and the European Investment Bank (EIB) has to provide support with the necessary instruments to accompany this effort. The "Initiative for Growth" follows on the Thessaloniki European Council conclusions and builds on the preparatory work carried out by the Commission since the Spring Council in these respective areas. More detailed proposals in cooperation with the EIB will be tabled in time for the October European Council. The Italian Presidency has made it a priority to coordinate the various Council formations involved and to generate the necessary political support that is crucial for this important initiative to deliver tangible results.

· Free movement of capital : Commission requests Spain and Italy to change laws on investment in energy companies

The European Commission has decided to send Spain and Italy formal requests to comply with Community law with regard to the legislation that limits the voting rights on investment in the energy sector by state-owned companies. The Commission is concerned that certain provisions of the Spanish and the Italian laws in question constitute unjustified restriction on the free movement of capital in violation of EU Treaty rules (Article 56). The Commission's requests are in the form of reasoned opinions, the second stage in the infringement procedure laid down in Article 226 of the EC Treaty. Should the authorities of the Member States concerned not take satisfactory steps to comply within two months of receiving the reasoned opinion, the Commission may decide to refer the cases to the EU's Court of Justice.

· Pensions taxation : Commission decides to refer Denmark to Court over discrimination and to open infringement procedures against the UK and Ireland

The European Commission has decided to refer Denmark to the Court of Justice because pension contributions paid to non-Danish funds are not tax deductible while contributions paid to domestic funds are. The Commission considers that Danish legislation in this respect is contrary to the principles of freedom to provide services (Article 49 of the EC Treaty) and the free movement of workers and capital (Articles 39 and 56 of the EC Treaty). Denmark has not amended its legislation despite a formal request from the Commission to do so in February 2003 (see IP/03/179). The Commission has also expressed its serious concerns as to the compatibility with EU law of the tax legislation of the United Kingdom and Ireland regarding pension contributions. It has therefore decided to issue formal requests to the UK and Ireland for information concerning their legislation and practice. These requests take the form of so-called 'letters of formal notice', the first stage of formal infringement procedures under Article 226 of the EC Treaty. They will have two months to reply.

· Taxation : Germany and Austria must end discrimination against foreign investment funds ; Commission seeks information from France

The European Commission has decided to send official requests to Germany and Austria to put an end to discriminatory tax treatment of foreign investment funds that makes it more difficult for foreign funds to market their services in these two countries. The Commission considers that certain tax provisions in the two countries violate EC Treaty rules on free movement of services and capital (Articles 49 and 56). In particular, in Germany only half the profits from domestic investment funds are taxable whereas all the profits from non-domestic investment funds are taxable. Also in Austria, profits from domestic investment funds are taxed less than profits from foreign funds. In both cases the formal requests take the form of reasoned opinions, the second stage of the infringement procedure provided for in Article 226 of the EC Treaty. In the absence of a satisfactory response within two months, the Commission may decide to refer the cases to the Court of Justice. The Commission has also decided to send a formal request for information to France concerning tax allowances that are available on income from shares issued in France but not elsewhere. This request takes the form of a letter of formal notice, the first stage of infringement procedures under Article 226 of the EC Treaty.

· Industrial property : eight Member States referred to Court for failure to implement Directive on legal protection of biotechnological inventions

The European Commission has decided to refer Germany, Austria, Belgium, France, Italy, Luxembourg, the Netherlands and Sweden to the European Court of Justice, as they have still not implemented Directive 98/44/EC on the legal protection of biotechnological inventions. The Directive should have been written into national law by 30 July 2000. It aims to clarify certain principles of patent law applied to biotechnological inventions whilst ensuring that strict ethical rules are respected. Such clarifications have proved essential in order to fully exploit the medical, environmental and economic potential of biotechnology in line with high ethical standards. Non-implementation of this Directive is putting the European biotechnology sector at a serious disadvantage. Despite the Commission's efforts to co-operate closely with them in order to try and accelerate the implementation procedure, the Member States concerned failed to reply satisfactorily to formal requests - in the form of reasoned opinions - sent by the Commission in December 2002 (see IP/02/1928).

· Rail infrastructure package : Commission sends reasoned opinions to ten Member States

The European Commission is launching legal proceedings against the ten EU countries that have failed to notify the Commission of any transposition of the rail infrastructure package opening the market for international rail freight services. The transposition of this set of three directives into the national legal framework should enable more efficient and on-time cross-border operations needed by rail to compete with road. The Commission will fully play its role in ensuring a European level playing field.

· Ban on certain goods on the A12 Inntal motorway in Austria : Commission pursues infringement proceedings

The European Commission has decided to send Austria a reasoned opinion. Austria is planning to ban heavy goods vehicles carrying certain goods from a section of the A12 motorway from 1 August 2003. The measure breaches the rules on the freedom to provide services and hampers the free movement of goods in the Union. The information provided by the Austrian Government since the Commission opened infringement proceedings on 25 June 2003 is insufficient. The Austrian authorities have ten days to respond. If they do not, or if their reply is unsatisfactory, the Commission could decide to bring the matter before the Court of Justice. · Road safety : Commission refers Austria and Luxembourg to the Court of Justice

The European Commission has sent a formal complaint to the Court of Justice concerning Austria and Luxembourg's failure to transpose EU road safety legislation into national law. The Directive on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Union should have been transposed by 10/8/2002. The Directive aims to improve the safety and environmental performance of heavy commercial vehicles circulating in the Union by supplementing the annual roadworthiness test with random inspections of a representative proportion of the heavy commercial vehicle on Member States' roads each year. Vehicles that prove not to be roadworthy as a result of a random inspection, wherever they are registered may be prohibited from free circulation. It is anticipated that the enforcement of these random inspections will rapidly improve the maintenance condition of the Union's commercial vehicles and commercial vehicles from third countries that transit the Union. II. Other news - Autres nouvelles

Romano Prodi visits Croatia

The President of the European Commission Romano Prodi is visiting Croatia today as part of the Commission's close relationship with this country. During his visit, President Prodi will officially hand over the Questionnaire with more than 2,500 questions necessary for the Commission to prepare an Opinion on Croatia. This follows Croatia's membership application submitted in February 2003 and the subsequent request of the Council to the Commission to prepare an Opinion. President Prodi will encourage the Croatian authorities to proceed with the necessary reforms, including on some political issues, with the full support of the European Commission. As a follow up to the Thessaloniki Summit, the President will also reiterate the European Integration perspective for the other South-eastern European countries. Commission indicator forecasts euro area quarterly GDP growth of 0% to 0.4% for 2nd and 3rd quarter of 2003

The indicator-based model for quarterly GDP growth for the euro area, developed by the European Commission's Directorate General for Economic and Financial Affairs, forecasts a range of 0% to 0.4% for GDP growth in the second quarter of 2003, unchanged compared to last release. Most indicators used in the model for this horizon continue to suggest slow growth, although some recent confidence indicators have shown a slight improvement. For the third quarter of 2003, the model suggests growth in the same 0 to 0.4% range.

First stakeholder conference on European Environment and Health Strategy

On Friday 11 July 2003, at 10.00, European Environment Commissioner Margot Wallström opens the first stakeholder meeting on the new "European Environment and Health Strategy". The Commission adopted its Communication on the new strategy on 11 June 2003 (see IP/03/823). The ultimate goal of the strategy is to reduce diseases linked to environmental factors. The aim is to enable a better understanding of the relationship between environmental factors and adverse health effects, in particular focusing on children's health. In the Communication, the Commission stressed that the "Action Plan 2004-2010", which will be presented as the EU's contribution to the Fourth Ministerial Conference on Environment & Health in Budapest in June 2004, will be developed on the basis of full stakeholder consultation. The Commission will work closely together with a broad range of environment and health experts from the Member States and Acceding Countries, stakeholders, NGO's, international organisations, academia, research, the medical community, professional organisations and industry. Several Working Groups and a Consultative Group on environment and health will be established after the stakeholders conference. The press is invited to attend the conference, which takes place in "Conference Center Albert Borschette", Room OD, Rue Froissart, 36 in 1040 Brussels. website:

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