NEWSLETTER 18 – 22/01/2010

TABLE OF CONTENTS

EU / FINANCIAL SERVICES ..................................................................................... 2

Czech Republic should apply IORP Directive - ECJ....................................................... 2
EU to export supervision rules to Balkans and Turkey ................................................... 3
EU / TAXATION ......................................................................................................... 4
Political agreement on directive to improve tax recovery................................................ 4
EU / HEALTH ............................................................................................................. 5
John Dalli has proved himself ........................................................................................ 5
EU / SOCIAL .............................................................................................................. 6
Construction workers in Lithuania to receive help from EU Globalisation Fund.............. 6
ECONOMY ................................................................................................................. 7
Economists predicting jobless recovery ......................................................................... 7
Survey reveals lack of coordination in regional recovery plans ...................................... 9
United Kingdom wants clear objectives for strong and balanced growth ...................... 10
OTHER NEWS AND EVENTS ................................................................................. 11
EU launches 2010 European Year: Stop poverty now!................................................. 11
The Spanish EU Presidency ........................................................................................ 12
EU / COURT OF JUSTICE....................................................................................... 13
Calendar of the Court of Justice................................................................................... 13
THE ANALYSIS IN DEPTH...................................................................................... 14
The Spanish EU Presidency ........................................................................................ 14

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EU / FINANCIAL SERVICES
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Czech Republic should apply IORP Directive - ECJ

The European Court of Justice (ECJ) has ruled the Czech Republic has acted in breach of European law by
failing to implement the Institution for Occupational Retirement Provision (IORP) Directive, even though the
country does not actually have any IORPs.

The judgment issued yesterday on case C-
343/08 stated the Czech Republic had failed
to fulfil obligations regarding the directive,
and had partially failed to transpose the
required legislation within the prescribed
timeframe. The only penalty being imposed
on the Czech government is legal costs but
the ECJ made its judgment as it felt it was
necessary to establish the base rules on
complying with the directive. More
specifically, the ECJ said it recognised the
Czech Republic believes it would be “obliged
to change the fundamental principles of its
national social security system” if it were to
allow the use of IORPS”. However, the
Directive does not actually order countries to
introduce any such changes or allow IORPs
to establish themselves in a territory, said the
ECJ, merely to make sure the EC Directive
has been enacted as required under Article
22(1). This article provides that: “Member
states shall bring into force the laws,
regulations, and administrative provisions
necessary to comply with this Directive
before 23 December 2005.” But the Czech
Republic did not do so, and proceedings
against the member state began in 2006. The
Czech government responded at the time by
arguing there was no reason for it to
implement the IORP Directive as there were
no IORPs and “neither the political will nor
sufficient economic potential to introduce an
occupational retirement scheme”. It also
argued that Article 9 of the Directive would
require it to create a national register of
institutions or authorize them, yet the
government could not do so as acting on this
would “require the adoption of corresponding
legislation”. The ECJ answered this retort by
noting that the Czech Republic is not unable
to amend or introduce legislation but is
simply unwilling to do so at this time, even
though officials had agreed they would
introduce a second pillar into the national
retirement pension system back in 1993,
prior to the adoption of the IORP Directive.
On this issue, the Czech Republic conceded
in an ECJ hearing “a second pillar could be
introduced in the future if the political will to
do so were to emerge”. The Czech Republic

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national pension system is currently made up voluntary plans, which do not have any link to
of the first pillar state provision and third pillar employer-based pension provision.
(IPE.com, 18/01/10)

EU to export supervision rules to Balkans and Turkey

The European Commission and the European Central Bank (ECB) yesterday (19 January) agreed on a two-
year programme of €2.65 million to boost macro- and micro-prudential supervision in the Western Balkans
and Turkey.

A hundred and fifty supervisors from standards". The agreement would help the
countries waiting for accession to the EU are countries involved to "keep their EU
to receive training on the bloc's existing and integration processes on track," Olli Rehn,
pending rules on financial supervision as a commissioner for enlargement, added in a
result of the crisis, according to a statement statement. According to the ECB, key
from the ECB yesterday (19 January). The organisations in the regulatory and
beneficiaries of the funds will be the central supervisory field, such as the Basel
banks and supervisory authorities in Croatia, Committee on Banking Supervision, the
the Former Yugoslav Republic of Macedonia, Committee of European Banking Supervisors
Albania, Bosnia and Herzegovina, and the Financial Stability Institute, will
Montenegro, Turkey, Serbia and Kosovo. present the latest developments in financial
Thescheme will also involve organisations supervision to banks in the region. The
that have participated in EU and global European Commission and the European
decision-making on post-crisis financial Parliament will contribute their views on
supervision. An ECB spokesperson said the policy issues. The ECB did not stipulate
programme aims "to strengthen the medium- exactly what would be expected of the banks
term resilience to financial stress of EU in the training process, but an ECB
candidate and potential candidate countries, spokesperson told EurActiv that the challenge
by supporting the adjustment of banking and will be to ensure that the beneficiary countries
financial supervision in line with the most "take ownership of the objectives".
recently agreed international and EU (Euractiv.com, 20/01/10)

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EU / TAXATION
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Political agreement on directive to improve tax recovery

The excellent café partaken of by European finance ministers on Tuesday 19 January allowed tribute to be
paid to the commissioners who attended their last Ecofin Council session. It is, however, still far too soon
to get the champagne out over the dossier on good budget governance as a unanimous political agreement
still seems a long way off. Progress has nonetheless been made with the political agreement on the
directive to improve national procedures of tax collection.

“We have reached an agreement on general
guidelines for the draft directive on tax
collection”, said Elena Salgado, the president-
in-office of the Ecofin Council. In her view, the
agreement will extend the scope of the current
directive and facilitate recovery procedures
through the creation of a “central office” in each
member state. The agreement became possible
after the last British reserve had been lifted. In a
report on implementation of the directive
concerned (2008/55/EC), the European
Commission had noted such a large gap
between the amounts for which assistance is
requested and the sums effectively collected
that the overall recovery rate relating to
crossborder requests by member states is
currently only 5%. “The work is not yet over”,
warned Ms Salgado, saying it is necessary to
move forward on other aspects of the dossier
during the next Ecofin Council. There seems to
be a shared resolve to take the matter forward
and to complete it before the end of the first half
of 2010. Taxation Commissioner László Kovács
evoked two positive elements in the
discussions: - the dossier would no longer be a
comprehensive legislative package as
requested by Austria and Luxembourg; - and
the agreement on the draft directive revising the
rules of tax collection. “One cannot, in a world
changed in this way, have tolerance,
complacency within the EU. Proposals on the
table are desirable for all except Austria and
Luxembourg”, deplored the French finance
minister, Christine Lagarde. Pleased that these
two countries had agreed to “cut up the
package” on good tax governance, she played
down the agreement on the recovery directive,
describing it as the “least controversial” text
among those on the table. Keen on a dossier in
the form of a package, the United Kingdom
takes the view that the EU “cannot place itself
in a situation where third countries block
progress on the automatic exchange of
information”. Luxembourg Finance Minister Luc
Frieden, for his part, said the threefold objective
of his country was to: - ensure the single market
works as it should; - find the best way to tax
income (automatic exchange of information or

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withholding?); - and allow the EU to keep namely generalisation of OECD norms on the
competitive financial services on its territory. He exchange of tax information on request.
challenged the resolve of other delegations to (Ed Agence Europe, 20/01/10)
go further than what the G20 has decided,

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EU / HEALTH
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John Dalli has proved himself

The commissioner-designate for health and consumer protection, whose portfolio will now also include policy
on medicine, was completely successful in his three hour hearing on Thursday 14 January at the environment
and public health committee (which was joined for this occasion by members of other committees). His slogan
was: “Patients and consumers first”. He also expressed a desire to promote consultation and displayed a
commitment to take a tough line, which pleased MEPs, particularly German Social Democrat, Dagmar Roth
Behrendt, who repeatedly applauded him, as observed at the end of the hearing by the president of the
environment committee, German Social Democrat, Jo Leinen.

Questioned by German Christian Democrat, that this would involve making a clearer
Peter Liese about possible changes and distinction between information and publicity,
additions to the pharmaceutical package, John and pointing out the necessity of consulting
Dalli said that he hoped to advance as rapidly professionals. In reply to the British
as possible on the two non-controversial parts Conservative, Marina Yannakoudakis, on the
of the package (pharmaco-vigilance and balance between patient needs and those of
counterfeit medical products) and then re- industry, he said that “giving priority to patients
assess the third part, focusing on patient does not mean ruling out a strong commitment
information, in an effort to “strengthen the to the pharmaceutical industry remaining
patient perspective in the proposal”. In competitive and profitable”. He agreed with
response to another question, he explained British Labour Party member, Glenis Willmott,

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in affirming that priority must be given to health.
He also said that it was possible to find a
solution “benefiting both parties”. He sought to
gain the support of MEPs and patient
organisations, which he believed must be
sufficiently supported through novel ways of
financing. Bulgarian liberal, Antonyia
Parvanova, raised the question of counterfeit
medicines and online medical sales. On the
first point, Dalli explained that counterfeit
products are “not only a danger to consumers
but also to innovation”. On the second point he
said he wished to “work hard to ensure that the
same controls applied to on and off-line sales”.
Cross-border healthcare: Dalli gave his
approval to Radvilé Morkunaité-Mikuléniné
(EPP, Latvia) and said that the directive on
patient rights in cross-border healthcare, which
is currently blocked at the Council, must go
forward. He said he wished to “work with the
Spanish Presidency and Council to forge a
solution”. In a reply to Dagmar Roth-Behrendt,
Dalli explained that he would be firm with the
Council and underlined his previous experience
as a Maltese minister, who had often been
criticised because of his tough line, particularly
when this involved getting reforms through.
(Ed Agence Europe, 19/01/10)

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EU / SOCIAL
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Construction workers in Lithuania to receive help from EU Globalisation Fund

The European Commission has on January 18, 2010 approved an application from Lithuania for assistance
under the Globalisation Adjustment Fund (EGF).

The Commission will now make a proposal to redundant in 128 small and medium-sized
the European Parliament and the Council to enterprises in the country. The Lithuanian
mobilise the budgetary resources. The funding application relates to 1,612 redundancies in
will help 806 workers in the buildings 128 small and medium-sized enterprises
construction sector back into employment. The operating in the construction sector – one of the
application – for assistance amounting to first sectors to be affected by the economic and
€1,118,893 – concerns workers made financial crisis. It is expected that about half the

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redundant workers will take up the offers of
assistance made possible thanks to support
from the EGF. During the first and second
quarters of 2009, the volume of construction
activity in Lithuania decreased by 42.81 % and
48.04 % respectively, compared with the same
quarters in 2008, with the redundancies as a
consequence of this sudden slow-down.These
redundancies have a serious impact in the
country since unemployment in Lithuania is
amongst the highest in the EU, and has risen
sharply since the start of the economic and
financial crisis. The construction industry has
been especially badly affected, losing around
10% of its jobs in Lithuania in 2008 alone. The
package of EGF assistance for the construction
workers who have lost their jobs will help 806 of
the most disadvantaged back into employment
by offering them employment incentives, career
guidance and retraining. The total estimated
cost of the package is almost €1,721,374, of
which the European Union has been asked to
provide EGF assistance of €1,118,893.
(Ec.europa.eu, 19/01/10)

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ECONOMY
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Economists predicting jobless recovery

Europe may return to modest growth in 2010 but economists are warning that unemployment will remain high
amid fears that recovery will be painfully weak.

At a conference in Brussels yesterday (14 economist at the OECD, predicted "continued

January), analysts forecast another tough year but very slow recovery" in the OECD area. He
ahead, adding that the risk of a W-style or said the situation in Europe was less
"double dip" recovery could not be ruled encouraging than in the US, where
out. The event, hosted by the European Policy unemployment is close to its peak. However, he
Centre EPC, focused on growth and jobs but said there were some tentative signs that
economists made it clear that rising GDP would confidence had been restored to the markets,
be no guarantee of improved employment evidenced by healthier securities and corporate
numbers. Jørgen Elmeskov, deputy chief bonds markets, which are making it easier for

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larger companies to raise capital. World trade economist at the EPC, said there was "little
was also rebounding, driven by strong scope for optimism" on the job creation front.
performances in the so-called 'BRIC' countries Unemployment, he noted, tends to lag behind
– Brazil, Russia, India and China – all of which economic growth. He also highlighted
had implemented effective policies for dealing disparities across Europe in how badly the jobs
with the crisis. "In particular, the policy-induced market was hit by declining GDP. Spain, he
recovery in China has been amazing and we're said, had seen its GDP fall in line with the EU
forecasting growth above 10%," said average while its unemployment rate had
Elmeskov. He said house prices could also soared and was headed for 20% – double the
bottoming out in a number of countries, but European average. Looking at the longer-term
added that there is a "nagging doubt" about prospects for Europe's labour market, he said
whether property values have truly hit the employment might not pick up if sluggish
bottom, warning there could be a second leg of growth hovers around the 1.5% mark. "We are
price drops. Shaky financial institutions and moving out of the crisis, not into recovery but
burgeoning government debt stand out as stagnation. Will we ever get back to where
major threats to recovery, according to European economies were before the crisis?
economists. Governments must walk a fiscal It's highly doubtful. Labour markets will be
tightrope in trying to cut spending as this can affected long term," Zuleeg said. Demographics
have spill-over effects in the real economy – and the need to tackle climate change will also
discouraging consumer spending and hitting serve to exacerbate the problem, he added.
business confidence. Fabian Zuleeg, chief (Euractiv.com, 15/01/10)

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Survey reveals lack of coordination in regional recovery plans
While almost all regional authorities introduced measures to combat the crisis-led recession, there was
little coordination, leading some to feel they were isolated, a survey of EU regions and cities found in late
2009.
The survey, conducted by the
Monitoring Platform on behalf of the Committee
of the Regions (CoR), investigated how the
European Economic Recovery Plan (EERP) is
being implemented on the ground, as perceived
by the EU local and regional authorities. CoR
officials were quick to stress that while the
survey – featuring responses from over 70 EU
regions and cities - should not be seen
to give the overall EU picture,
findings nevertheless shed light onto main
trends reflecting the current difficulties faced by
regions and cities. Overall, it seems that local
and regional authorities have been able to
access EU 'crisis' money quickly,
structural funds in an "accelerated way" as part
of the EERP. Indeed, almost all the authorities
who responded to the survey (85%) said they
had introduced their own anti-crisis measures,
usually to combat rising unemployment through
increased social welfare spending and support
for SMEs. The European Social Fund (ESF)
and the European Regional Development Fund
(ERDF) were the main vehicles for taking these
steps. However, despite these remedial steps,
there is a clear sense that there is little or no
18 – 22/01/2010
coordination between regions, that they "remain
Lisbon
on their own," in the words of one Lisbon
Monitoring Platform team member . "They feel
they're alone," he said, especially when faced
with particular problems that go beyond their
competences – with the failure of the banking
system and the inability of SMEs to access
credit singled out as areas where coordinated
efforts would have provided an added value.
Without concerted action, the general EERP
its
policies do not adapt well to specific situations
and communicating measures to the citizens is
more difficult, authorities said. In a nutshell, the
survey reveals that citizens do not know about
the EERP measures, or when they are aware of
using
its existence, they do not see them on the
ground. This is not a specific shortcoming of the
EERP, rather confirmation of an existing
problem, providing further evidence of the same
flaw outlined in the review of the Lisbon
Strategy: a lack of multi-level governance, said
the expert. Perceptions of the economic and
employment outlook for 2010 in European
regions are very pessimistic, the survey findings
conclude.
(Euractiv.com, 19/01/10)
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United Kingdom wants clear objectives for strong and balanced growth

Brussels, 21/01/2010 (Agence Europe) - Presenting the British contribution to the debate on the EU 2020
strategy, British Prime Minister Gordon Brown called for a pact between member states to reinvigorate the
European economy and generate strong, sustainable and balanced growth.

The UK considers this will require a coordinated financial services sector, which calls for greater
regulation. In all these areas, implementation of
policy response focused around six key
priorities: - reduction in public deficit without these priorities should be accompanied by

compromising economic recovery, and public increased political ownership of economic

investment must be directed to areas that
improve productivity; - the creation of new jobs
and new skills for the workforce to meet the
challenges of the new economy, which requires
reforms. This will require the establishment of
clear and measurable objectives (member
states should be publicly benchmarked against
their progress towards these objectives), and

investment in training and education; - there the organisation of greater coordination of

must be support for growth in the innovative existing instruments. According to the United

industries of the future, which requires national Kingdom, an annual summit of EU27 leaders
should be organised to set up priority reforms
policies in favour of the green economy, the
and measure progress (the Spring European
digital industry, life sciences, etc; - European
businesses must be supported to take Council is currently dedicated to this task). The

advantage of the single market, which requires EU budget (“radical reform” is recommended)

a reduction in administrative charges; - the and the European Investment Bank (by its

global market must be opened up to trade and lending facility) should also be harnessed to

investment, between the EU and its main support the agreed objectives.

partners in a multilateral and bilateral context; -

(Ed Agence Europe, 22/01/10)
and Europe must have a robust and competitive

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OTHER NEWS AND EVENTS

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EU launches 2010 European Year: Stop poverty now!

The European Commission and the Spanish Presidency of the EU has on 21 January 2010 launched the 2010
European Year for Combating Poverty and Social Exclusion.

Under the slogan “Stop Poverty Now!”, the
campaign aims to put the fight against poverty –
which directly affects one in six Europeans –
centre stage across the EU during 2010.
European Commission President José Manuel
Durão Barroso and Spanish Prime Minister José
Luis Rodríguez Zapatero will inaugurate the
Year at a launch event to be held tomorrow in
Madrid. "Combating poverty and social
exclusion is an integral part of getting out of the
crisis. It is too often the vulnerable in society
who end up being hardest hit by the impacts of
a recession. That is why the European Year
2010 should act as a catalyst to raise
awareness and build momentum for a more
inclusive society which is part and parcel of the
EU’s future 2020 strategy that I have proposed"
said Commission President José Manuel Durão
Barroso (see speech). Vladimír Špidla,
Commissioner for Employment, Social Affairs
and Equal Opportunities added: “One in six
people in Europe face a daily struggle to make
ends meet, but poverty can also affect the rest
of us – and our societies as a whole. While most
of the tools for tackling poverty are at national
level, three-quarters of Europeans also expect
the EU to help. The European Year puts this
issue at the top of the agenda so that Europe as
a whole can join forces to fight poverty and
social exclusion." (see speech) Almost 80
million Europeans – or 17% of people across
the EU – currently live below the poverty
threshold. This alarming fact has found a strong
echo in public opinion, according to a recent
Eurobarometer survey on attitudes to poverty.
The vast majority of Europeans (73%) consider
poverty to be a widespread problem in their
country, with 89% calling for urgent action by
their government to tackle the problem. While
most people consider their national government
as primarily responsible, 74% also expect the
EU to play an important role. The 2010
European Year aims to raise greater awareness
of the causes and consequences of poverty in
Europe, both among key players such as
governments and social partners and among
the public at large. It also aims to mobilise these
different partners in the fight against poverty;

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promote social integration and inclusion; and
encourage clear commitments on drawing up
EU and national policies to tackle poverty and
social exclusion. The Year's activities will be
largely decentralised, with national programmes
drawn up by each of the 29 countries taking part
(the 27 EU countries plus Norway and Iceland).
A €17 million budget will support awareness-
raising campaigns at European and national
levels and hundreds of national projects linked
to the different national priorities.
(Ec.europa.eu, 21/01/10)

The Spanish EU Presidency

Spain takes on the European Union's six-month rotating presidency at a defining moment for the bloc,
marked by the first steps of the Union's first-ever permanent president and foreign affairs chief and efforts to
lift Europe out of its worst recession in decades.
(Euractiv.com, 15/01/10)

IN DEPTH ANALYSIS BELOW (page 14)

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EU / COURT OF JUSTICE
_______________________________________________________________________________________

Calendar of the Court of Justice

Language
Date Case of the Courtroom
case
Tuesday 19/01/2010 Judgment Social policy DE New Great
09:30 C-555/07 Kücükdeveci Courtroom
Court of Justice - Grand Chamber
Reference for a preliminary ruling – Landesarbeitsgericht Düsseldorf (Germany) – Interpretation of
the principle of non-discrimination on the ground of age, and of Council Directive 2000/78/EC of 27
November 2000 establishing a general framework for equal treatment in employment and occupation
(OJ 2000 L 303, p. 16) – National legislation relating to dismissals establishing notice periods which
increase with length of service but in which any period of employment before the employee reaches
the age of 25 is disregarded
Advocate General : Bot
Thursday 21/01/2010 Opinion Social policy IT Courtroom
09:30 Joined Bruno and Pettini III - Level
cases C- Lotti and Matteucci 6
395/08 Court of Justice - Second Chamber
C-396/08
Reference for a preliminary ruling – Corte d’Appello di Roma (Italy) – Interpretation of Council
Directive 97/81/EC of 15 December 1997 concerning the Framework Agreement on part-time work
concluded by UNICE, CEEP and the ETUC – Annex: Framework agreement on part-time work (OJ
1998 L 14, p. 9) – Part-time workers working some months of the year and resting in the other months
– Exclusion of periods not worked in the calculation of pension rights
Advocate General : Sharpston
Thursday 21/01/2010 Hearing Social policy DE New Great
09:30 C-486/08 Zentralbetriebsrat der Landeskrankenhäuser Tirols Courtroom
Court of Justice - First Chamber
Reference for a preliminary ruling – Landesgericht Innsbruck – Interpretation of Clause 4(1) and (2)
of the Annex to Council Directive 97/81/EC of 15 December 1997 on part-time work concluded by
UNICE, CEEP and the ETUC (OJ 1998 L 14, p. 9), of Clause 4 of the Annex to Council Directive
1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by
ETUC, UNICE and CEEP (OJ 1999 L 175, p. 43), and Article 14(1)(c) of Directive 2006/54/EC of the
European Parliament and of the Council of 5 July 2006 on the implementation of the principle of
equal opportunities and equal treatment of men and women in matters of employment and occupation
(OJ 2006 L 204, p. 23) – National legislation governing workers employed under a private law
contract excluding from its scope certain categories of workers, part-time, casual or those employed
under a fixed-term contract – Disadvantageous provisions foreseen concerning the right to annual
leave, for staff changing from full-time work to part-time work and for staff taking parental leave for
two years – Principal of equal treatment of men and women workers, of part-time and full-time
workers, and of workers employed under a fixed-term contract and workers employed under a contract
of indefinite duration

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THE ANALYSIS IN DEPTH

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The Spanish EU Presidency

Spain takes on the European Union's six-month rotating presidency at a defining moment for the bloc,
marked by the first steps of the Union's first-ever permanent president and foreign affairs chief and efforts to
lift Europe out of its worst recession in decades.

Spain said it will act in close coordination with EU's agenda, provide its structure and propose
the two following EU presidency compromise solutions. These levers remain
holders Belgium (July-December 2010) and intact under the Lisbon Treaty. An additional
Hungary (January-June 2011). The so- feature introduced under Lisbon is that the
called 'trio of presidencies' have chosen a former administrative structure of the General
common logo to symbolise their partnership Affairs and External Affairs Council (GAERC)
and said they will strive to provide a model for will now be split between a Foreign Affairs
fostering greater consistency in the European Council (FAC) and a General Affairs Council
Union's leadership. The Spanish Presidency (GAC). The former will be chaired by the EU
will be the first to operate under the rules of the High Representative, who could end up being
Lisbon Treaty. This implies that torn between three masters: the president of
Madrid's relationship with the the European Commission, the president of the
new posts created by the text – the EU High European Council and the holder of the
Representative for Foreign Affairs and Security rotating EU presidency. According to Spanish
Policy and the permanent president of the sources, an additional 80 people have been
European Council – could set a precedent for employed by the Spanish Permanent
the future institutional balance of the European Representation to the EU in Brussels to help
architecture. The powers of the Council organise the presidency. In Madrid, a special
presidency are briefly outlined in Article 16 of committee of 40 people has been assembled.
the new Treaty on the European Union Since April 2008 the latter has been led
(paragraph nine) and Article 237 of the Treaty by High Representative for the Spanish EU
on the Functioning of the European Union Presidency Nicolás Martínez-Fresno y Pavia.
(TFEU). Broadly speaking, these powers Additional support and expertise has been
should be regarded as the ability to set the gathered from other relevant ministries. A

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celebrative art installation by Daniel Canogar of the Treaty on the Functioning of the
entitled ‘Traversías’ has been unveiled in the European Union; TFEU); Promoting a new,
lobby of the Council of the European Union to low-carbon energy model to address climate
inaugurate the beginning of the Spanish change, and; Defining the terms of the EU's
presidency. Spain estimates that cost of next long-term budgetary planning period for
holding the presidency will be in the order of 55 2014-2020 (the so-called 'Financial
million euros. Issues: Although Spanish Prime Perspectives'). Re-launching the economy and
Minister José Luis Rodríguez Zapatero creating jobs take centre stage
outlined his country's priorities as early as among Spain's stated objectives. This is a
February 2009, some uncertainty still reigns as crucial task given that the effects of the
to what the main issues on the agenda will financial crisis are now being felt in labour
be. On 8 December 2009, Spanish Secretary markets across Europe. According to Eurostat,
of State for EU Affairs Diego López the unemployment rate across the EU-27
Garrido said his country's presidency increased from 7.5% in November 2008 to
will focus on four main areas: The economy, 9.3% in October 2009 and is expected to break
with the recovery from the economic crisis and the 10% threshold in 2010. The problem is
job creation on top of the agenda; particularly acute in Spain, which has the
Implementing the Lisbon Treaty; highest unemployment rate in the euro zone.
Citizenship, paying particular attention to The average level of unemployment in
gender equality, and; Foreign affairs, the single currency area stood at 9.8% in
helping the EU to become a genuine global October 2009, while it reached 19.3% in Spain.
player. On top of this, four additional priorities According to the Labour Ministry the number of
were submitted to the Spanish parliament by people registered as jobless hit 3.9 million in
the ruling Socialist Party (PSOE), the main December, up 54,657 from the month before.
centre-right opposition People's Party (PP), Indeed, Latvia is the only EU country to
and regional parties from Catalonia record a worse rate than the incoming
(Convergència I Unió) and the Basque Country presidency holder, with 20.9%. In November,
(EAJ-PNV). These are: Strengthening the the European Commission launched a
European area of freedom, security and consultation on the future 'EU 2020' strategy to
justice, giving special attention to fighting make Europe a "smarter, greener social
terrorism and reviewing EU immigration and market" within the next decade. The results of
asylum policies; Strengthening EU the consultation, which closes on 15 January,
policies towards its so-called 'ultra-peripheral' will be presented to EU leaders at their summit
regions: Guadeloupe, French Guyana, in March 2010. Spain will therefore have a
Martinique, Reunion, the Azores, the Canarie prominent role in brokering an agreement
Islands and Madeira (as defined by Article 349 between EU leaders during the meeting. It will

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 NEWSLETTER 18 – 22/01/2010

also have to fend off attacks from NGOs, which as a matter of priority. The Spanish
would like to see publication of the government is also expected to help facilitate
consultation's conclusions postponed until the work of former Commissioner Mario Monti,
December 2010, when Belgium will be at the who has been charged by European
EU's helm. Speaking before Spanish Commission President José
ambassadors to EU countries, Zapatero also Manuel Barroso with producing a report on the
stressed how the EU must move towards status of the single market and strategies for
greater economic cooperation. "This is the moving it forward. According to the Italian, the
great goal, the main goal of the European key test for market economies, perhaps even
Union: the reinforcement of the common for democracies, will be whether they can
monetary policy, and strengthening the euro master growing inequalities triggered by
and the economic policy of the 27 EU ungoverned globalisation and aggravated by
members in a more coordinated way, through the crisis. 'Reflection group' on the EU's future.
cooperation," he said. Zapatero is also aiming The Spanish Presidency will also coincide with
to rebalance existing asymmetry in Economic the release in June 2010 of a
and Monetary Union (EMU), which saw the report by a Reflection Group on the future of
EU establish a centralised monetary institution, Europe established by the European Council
the European Central Bank (ECB), but did on 17 December 2007. The so-called 'group of
not give Brussels equal powers to coordinate wise men' is headed by Spain's former
national economic policies. "If the European Socialist Prime Minister Felipe González. The
Union really wants to be a political union, group is responsible for outlining a vision for
which works for its citizens, it has to have a Europe between 2020 and 2030. It is expected
much more solid economic government [...] to consult intensively with the Spanish
with tools," Zapatero told a joint press Presidency given the tight time-frame and the
conference with French President Nicolas shared political and geographical culture of
Sarkozy in April. "I can't see a single market, a those concerned. The importance that
single currency, then not see an economic Zapatero attributes to the insights of these
government with powers, with tools," he said. ‘wise men’ has been testified by the fact that
Diego López Garrido, Spain's secretary of one of his first acts as President of the Council
state for EU affairs, echoed Zapatero when he was to invite them for an informal discussion at
said developing a new system to supervise the Moncloa, the official residence of the
the international financial system is an President of the Government. Zapatero
important goal of the Spanish Presidency. Part exchanged views with the head of the group
of this strategy includes a push for the Felipe González who was accompanied also
implementation of the European Systemic Risk by former Commission President Jacques
Board (ESRB) for macro-prudential supervision Delors and former Spanish Commissioner

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 NEWSLETTER
Pedro Solbes. The men parted with an
agreement to meet again but no concrete
dates were set at this stage, government
sources said. The main issue discussed in the
meeting was the strengthening of economic
governance both in the light of increased
international competition by emerging
international players such as BRICs (Brazil,
Russia, India and China) and the internal
difficulties in Europe to maintain fiscal
discipline for which the Greek case stands as a
vivid reminder. Conservative daily ABC writes
that the Moncloa meeting produced no more
than uninspired and lacklustre statements. The
article states with irony that after having
assumed the EU presidency, Zapatero has
invited González to take advice from him,
something he had not done once in the past
six years of his mandate. The EU's long-
awaited Treaty of Lisbon entered into force on
1 December 2009, but the impact it will have
on the rotating presidencies and the EU's
institutional structure in general is yet to be
clarified. Herman Van Rompuy, the newly-
appointed permanent president of the
European Council, did not in fact chair the
December 2009 summit of EU leaders. He will
therefore intervene for the first time in his new
capacity during an extraordinary summit on the
economic situation in Europe in February
2010. Zapatero and Van Rompuy have tried to
silence the criticisms of those who consider the
positions of president of the Council of the EU
and that of president of the European Council
as antagonistic. They did so by drafting jointly
a letter to a major European newspaper in
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18 – 22/01/2010
which they highlighted their intention to make
Europe stronger and better prepared for the
coming decades focusing on economic
governance, foreign policy and the
environment. Moreover, both the president of
the European Council and the Spanish
Presidency will make use of the General
Affairs Council (GAC) created by splitting the
General Affairs and External Relations Council
(GAERC) into a General Affairs Council (GAC)
and a Foreign Affairs Council (FAC). However,
it is not yet clear who will have the ultimate say
on the GAC's activities – probably the rotating
presidency. Delays are also to be expected on
the part of High Representative for Foreign
Affairs Catherine Ashton, who will also be
European commissioner for external relations.
Although she has already made public
appearances, she will only obtain full
commissioner status once she has been voted
in by the European Parliament, along with the
rest of the Barroso II college of commissioners.
The expected date for this to happen is 1
February 2010. In the meantime, efforts to put
in place the European External Action Service
(EASS) are underway, with the goal of taking
all major decisions by April 2010. According to
some sources, EU leaders would like to put in
place EASS as early as possible before the UK
elections, expected in late spring. During these
defining moments, Spain will therefore be in a
key position to determine how the various
institutions relate to each other under the new
treaty, especially for matters related to the
EU's external representation and deciding the
items on the Council agenda. Nevertheless,
 NEWSLETTER
Spain has been adamant in underlining that its
role in the institutional structure is one of
support and not of competition. Miguel Angel
Moratinos, the Spanish foreign minister,
spelled out this point: "I would like to state it
very clearly: the engagement of the prime
minister of Spain and of the entire Spanish
government is that we have new European
representatives who will lead, give momentum
and steer [the Union] through the first semester
of 2010.” Diego López Garrido referred to the
fact that novelties introduced under the Lisbon
Treaty, such as the so-called 'citizens'
initiative' aimed at triggering a legislative
process based on a million signatures, so far
exist only in theory. Spain aims to set
precedents by developing those tools, he
explained. Spain will also be the first country to
take the EU's helm under the incoming trio of
presidencies, completed by Belgium and
Hungary. The new trio follows on from the
previous French, Czech and Swedish one. The
extent and intensity of the cooperation with the
Belgian and Hungarian Presidencies is likely to
define the format of future trios. In November
2009, two Spanish diplomats were transferred
to the respective Belgian and Hungarian
ministries with the aim of liaising better over
the trio component. The Spanish Presidency
aims to ensure consistency with the Swedish
Presidency and its flagship Stockholm
Programme for freedom, security and justice,
which was launched at the December 2009
European summit. López Garrido said his
country will be pushing for the adoption of
a non-discrimination directive, to fight against
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18 – 22/01/2010
what he described as the worst sin in our
societies – violence against women. "We want
to address gender violence not only from a
national, but from a European perspective," he
said. Zapatero has been at the forefront of
attempts to address the issue of gender
balance, and has done so through eye-
catching measures such as forming a
government in which women outnumber men
nine to eight. Spain is also planning to launch a
European Observatory of Domestic
Violence. The introduction of the Lisbon Treaty
opens up a host of possibilities for increasing
the international stature of the European
Union, and according to preliminary
statements, Spain will throw its weight behind
achieving this goal. Spain will help High
Representative Ashton to shape the structure
of the new European External Action Service
(EEAS), the future European diplomatic corps.
But disagreements have already emerged
regarding the timing and formation of this new
service. Moreover, the rotating presidency has
now been formally stripped of its international
role, since the treaties assign to both Van
Rompuy and Ashton the task of representing
the Union on the world stage. Spanish
Secretary of State López Garrido said the
Spanish government will contribute
to strengthening rather than overshadowing
the standing of the two new EU leaders. This
apparent discretion is at odds with the Spanish
Presidency's stated intention to "enter the
Guinness Book of Records with nine or
10 summits," according to López Garrido. The
Spanish government has on its agenda EU
 NEWSLETTER 18 – 22/01/2010

summits with the US, Russia, Canada, and region. Cuba will also be on the agenda of the
Mediterranean and Latin American countries. Spanish Presidency. Foreign Minister Miguel
Spain has been a proactive force in creating an Ángel Moratinos embarked in a two-day visit
EU Mediterranean dimension through the on 18-20 October 2009. The socialist
Barcelona Process (Euro-Mediterranean government aims to challenge the common
partnership) in 1995 and its successor, the position which was agreed in 1996 on an
Union for the Mediterranean, launched under initiative by then Prime Minister José Maria
the French Presidency in July 2008. Setting up Aznar. This stance is likely to prove more
the secretariat in Barcelona and selecting the divisive than initially expected due to the lack
first projects will be the Spanish Presidency's of improvement in civil liberties since Fidel
main objective, Zapatero said. In January Castro stepped down as Cuban leader in
2010, the Committee of the Regions, a favour of his brother Raul. considerable blow
consultative body, will create a Euro- to these appeasing intentions has been
Mediterranean Regional and Local Assembly inflicted by Cuba itself. Cuban airport
and a closer partnership is likely to emerge authorities refused entry to the country to
with Morocco during a special summit. One of Spanish Socialist MEP Luis Yáñez on 3
the first acts in this respect was the gathering January 2010. The MEP, chairman of the
of the foreign ministers of France, Spain, parliament delegation for relations with
Egypt, Tunis and Jordan on 5 January 2010 to Mercosur, supported dialogue with democratic
find a compromise candidate for the post of dissidents in Cuba. Moratinos defined the act
leader of the secretariat of the Union of the as a mistake, but claimed that this would not
Mediterranean. Jordanian Ahmed Masade hinder the proposed review of the relations
seems to have gathered sufficient consensus between the EU and the Caribbean
to secure the post. The finalisation of this dictatorship: “Isolation, confrontation, the
selection process should take place on the embargo and the blockade [against Cuba]...
12th of January. pain is also keen to has produced no result in 50 years.” elations
strengthen relations between the EU and Latin with the United States and the renewal of a
America, with López Garrido claiming that strategic agreement with Russia are next on
Spain will organise a summit between the EU the Spanish Presidency's list of foreign
and all Latin American countries. This can be priorities, Zapatero said.
considered as a strategic priority (Euractiv.com, 15/01/10)
considering Spain's economic interests in the

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