European Union: Competitiveness, the Lisbon Agenda and the UK Presidency of the EU

The United Kingdom assumed the presidency of the European Union from 1 July 2005 taking over from Luxembourg who have held it for the first half of the year. The stated aim of both is to provide continuity throughout the year and across both presidencies. With that in mind, both Luxembourg and the UK launched a joint programme at the end of 2004. This programme in fact reflects key priorities for the 2004-06 period that have already been agreed on by the Heads of State at the European Council in 2003. As such, it will be a priority for both to work closely with the European Parliament, Commission and Member States to deliver on this programme.

By far the most important challenge for the UK presidency and the EU at large, is to start delivering on the Lisbon Agenda. This has so far failed to deliver the jobs and economic growth for the Eurozone that it was brought in to achieve and as such, a concerted effort is to be made to increase the competitiveness and economic conditions required to fulfil its aims. Therefore, a number of areas have been highlighted as priorities for 2005 including:

The focus in this important area will be to pursue the integrated competitiveness approach that forms part of the Lisbon Agenda, in particular focusing on fostering innovation and competitiveness. Reviewing and simplifying existing EU legislation and using alternatives to regulation will all be considered with the view to strengthening competitiveness.

Particular focus will centre on the following:

Considerable progress will be sought in this area which was started by the Irish presidency in 2004. The UK presidency will centre around:

• The full implementation of the Better Regulation Action Plan¹ and assessment of areas where further work is needed;
• A review of existing legislation with a view to simplification;
• Strengthening the competitiveness dimension of impact assessments to ensure that the potential impact of new legislation is fully and transparently analysed;
• The economic implications of regulations which will be continually analysed as will the regulatory framework to achieve the goals of economic reform and growth; and
• Compliance with Community law which will be a priority to fully realise the common market.

A variety of proposals are likely to be launched in this area. These include a multi annual programme for competitiveness of enterprises and improving the competitive state of the pharmaceutical industry.

The focus of attention here is exploring a solution to the Community patent will be a priority and looking to finalise an agreement on the patentability of computer implemented inventions.

The focus of attention here is to promote the increased investment into research and development and innovation. Also, the development of human resources in science and technology in order to move towards the Barcelona objective² will be the key aims in regards to research.

The goal here is to develop and extend the internal market with a view to optimising the free movement of goods, services, persons and capital. This will contribute to strengthening competition and boost innovation, enterprise and growth. In particular the target areas will be:

• Here the UK presidency will look to make progress on the Financial Services Action Plan ("FSAP") which has been ongoing since 1999. This includes the Directives for cross border mergers of companies with share capital and the transfer of the registered office of limited companies.
• In non-FSAP initiatives work will continue on the proposed reinsurance Directive, the codification of nonlife insurance legislation, the Solvency II Directive and the Third Money Laundering Directive. All of which are to make significant progress throughout the year.

Tax

Again with an eye on competitiveness and the internal market the following areas will be looked at:

With respect to the internal energy market, work on the regulation for access to gas networks will be finalised. In addition, dealing with security of electricity supply should also be concluded including negotiating a mandate on exchanges in electricity with Russia. As such, the EURussia Energy Dialogue will be re-invigorated to achieve this aim.

• On land transport the presidencies will give due attention to the promotion of road safety and forward the Directive proposal from the Commission of charging HGV’s for using certain infrastructures (the ‘Eurovignette’ Directive);
• On aviation, work will start on new legislation proposals for slot allocations and complete, as necessary, the work of the Council on the Commission proposal for air traffic controller licensing; and
• On maritime transport attention will be paid to safety, particularly port state control and the Flag State initiative.

In respect of chemicals and the REACH³ regulation, the UK will be making a major effort to effect a political agreement by the end of 2005. The latter half of 2005 will see the first reading of the regulation in the European Parliament and the likelihood of major amendments to the original propos al, not least of which is the joint Hungarian-UK "One Substance, One Registration" ("OSOR") solution to the high cost the regulation is likely to inflict on small and medium sized enterprises.

Attention in this area will focus on seeking an agreement to the proposal to establish a Community programme for employment and social solidarity. To this end a thorough examination of a variety of draft regulations that seek to amend existing legislation will be considered.

In addition, on working conditions, agreement will be sought on a Directive to amend Directive 2003/88 on working time and to solve the problems created by the SIMAR and Jaegar judgments. Settlement will also be sought on the Temporary Agency Work Directive.

Thus, it can be seen that the Presidency of the EU at the time the UK assumes the role will be a crucial one. Of course reaching agreements on the various terms of the Directives and Regulations set out above will be crucial. But it will also be crucial because of the fallout created by the rejection of the EU Constitution by both France and Holland, meaning it will be up to the UK as President to formulate a solution as to where the EU heads next.

Aaron McGarry is a trainee solicitor in Mayer, Brown, Rowe & Maw's Brussels office

Copyright © 2007, Mayer, Brown, Rowe & Maw LLP. and/or Mayer Brown International LLP. This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

Mayer Brown is a combination of two limited liability partnerships: one named Mayer Brown LLP, established in Illinois, USA; and one named Mayer Brown International LLP, incorporated in England.