06/09/2010 • Issue 2

Belgian EU Presidency Business Newsletter

Brussels calling
CONTENTS

Editorial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4th EU-Brazil Business Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Eurogroup meeting & Economic and Financial
Affairs Council (July) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Informal Competitiveness Council . . . . . . . . . . . . . . . . . . . . 3
Events & meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
In the spotlight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General Affairs Council . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
UN Climate Change Conference in Bonn. . . . . . . . . . . . . . . . . . 9
Informal Transport, Telecommunications & Energy Council . . 9
Economic and Financial Affairs Council & Eurogroup
meeting (September) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Editorial
Economic governance at the heart of an idea which is now beginning to dawn to EU member
the debate states;
The recent crisis has revealed failures in • Reduces the divergences in competitiveness between the
the current economic governance of the member states. Experience shows that sound budgetary
EU, especially in the fields of budgetary policies are necessary, but not sufficient to boost com-
and macroeconomic surveillance. petitiveness. The current imbalances are a major concern,
in particular in the euro area. Therefore, the EU should
This has to change. What Europe needs set up a strong macroeconomic country surveillance sys-
to ensure its future economic and finan- tem, which on the one hand, identifies potentially harm-
cial stability is fiscal discipline, combined ful imbalances by way of prevention, and on the other
with a strong coordination of economic hand, provides for an enforceable corrective mechanism;
Diane Struyven, • Reinforces the ability of the EU to react timely and effec-
Director of the European
policies in the member states. This is
Department of the FEB key for the competitiveness of our tively when a crisis occurs.
enterprises. Hence, the business world
calls for a new economic governance structure that: Sound economic governance for Europe and a ‘real’ imple-
mentation of the EU 2020 strategy constitute the recipe
• Strengthens the Stability and Growth Pact – a Pact capa- for a swift and sustainable recovery. There is a sense of
ble of deploying effective measures, both in terms of urgency. In this perspective, the fact that on September 2,
prevention, compliance and enforcement. With regard to representatives of the European Commission, the
enforcement, adequate reporting and reliable statistics European Parliament and the Council reached a political
on public finances are a conditio sine qua non. More agreement on the EU’s state-of-the-art financial supervision
attention should also be paid to the public debt level, package, is a first success of the Belgian Presidency.

Eurogroup meeting & Economic and Financial

Affairs Council (July 12-13, 2010)
On July 12-13, the Economic and Financial Affairs Council note of the Belgian Presidency’s work programme on eco-
(ECOFIN) met in Brussels under the presidency of Didier nomic and financial affairs for the duration of its 6-month
Reynders, Belgian Minister of Finance and Institutional term. During its term in office, the Presidency will oversee
Reforms. On July 12, the members of the Eurogroup assem- the implementation of initiatives launched in the context of
bled and on July 13, the Ministers of Economy and Finance the Europe 2020 strategy for jobs and growth. Additional-
of all EU member states met. The Council started by taking ly, further measures to revitalize the European single mar-

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 Background information
ket will be examined. Since the financial sector is still struggling with the current
economic situation, extra measures to consolidate public finances and to guar- New Broad Economic Policy
antee financial stability will also be adopted under of the Belgian Presidency. Guidelines (‘Integrated
Guidelines’), adopted by the
On July 12, in the margin of the ECOFIN Council, Ministers from the euro area Council of the EU on 13 July 2010
member states, together with Olli Rehn, Commissioner for Economic and 1• ensuring the quality and the sustai-
Monetary Affairs, and Jean-Claude Trichet, Governor of the European Central nability of public finances;
Bank, held a meeting of the Eurogroup. High on the agenda was the European 2• addressing macroeconomic imba-
Financial Stability Fund (EFSF). The start-up of this new entity was attributed to lances;
the German Finance Agency which is responsible for managing the country’s 3• reducing imbalances in the euro area;
debt. The European Investment Bank on the other hand, will offer legal and
4• optimising support for research,
administrative support to the Fund. Concerning the rescue fund for Greece,
development and innovation,
Slovakia is, at this moment, the only member of the Eurogroup not to participate strengthening the knowledge
in the financing of it. An invitation by Eurogroup President Jean-Claude Juncker triangle and unleashing the potential
on August 11 to join the operation was rejected by the new Slovak Parliament. In of the digital economy;
a reaction, Olli Rehn said “the vote will not have any negative implication for the 5• improving resource efficiency and
disbursement of the instalments of the loan”. reducing greenhouse gases;
6• improving the business and consu-
In the light of the measures to mer environment and modernising
consolidate public finances, the the industrial base in order to ensure
Greek government was hailed by the full functioning of the internal
both Jean-Claude Juncker and Olli market;
Rehn for the way in which it has 7• increasing labour market participa-
already been able to implement its tion and reducing structural unem-
unprecedented structural adjust- ployment;
ment programme. Due to its good 8• developing a skilled workforce res-
results, the ECOFIN Council is likely ponding to labour market needs,
to approve the payment of a second promoting job quality and lifelong
loan tranche of 6,5 billion EUR to Greece at its next meeting on September 7. learning;
9• improving the performance of edu-
In order to monitor intra-euro area competitiveness imbalances, Spain and cation and training systems at all
Finland were subjected to a peer review. Even though the situation in these levels and increasing participation in
two countries is very different, they both face challenges in the fields of growth, tertiary education;
productivity, wage policy and market functioning. Regarding Spain, Olli Rehn 10• promoting social inclusion and
said that the reform efforts are both demanding and ambitious and that they combating poverty.
are going in the right direction. About the Finnish economy, the Commissioner
said that even though it is not facing any immediate threats in terms of compe-
titiveness, it faces medium-term challenges as its ageing population will increasingly weigh on public finances.

Also on July 12, the Task Force on economic governance chaired by Herman Van Rompuy, President of the European
Council, met for the third time since its establishment at the European Council of March 25-26. With the aim of impro-
ving the economic governance of the EU, the Council agreed on measures presented by the Task Force to reinforce
the Stability and Growth Pact (SGP) and to improve macroeconomic surveillance. In order to strengthen the SGP,
more attention has to be given to monitoring the evolution of public debt levels and measures to reduce them. In this
perspective, the ‘European semester’, an initiative due to start in 2011, will allow the EU to exercise greater control
over member states’ budgetary politics. The introduction of the European semester will require member states to pre-
sent their national budgets as well as their adjustment and reform programmes in execution of the Europe 2020 strategy
to the European Commission for review and possible adjustment based upon the Commission’s advice. The adoption of
preventive sanctions was also discussed in the Task Force. These sanctions should deter countries of not complying with
the budgetary guidelines as set out in the SGP. As to improve macroeconomic surveillance, consensus was reached on
the creation of a scoreboard to monitor competitiveness.

A day later, on July 13, the ECOFIN Council formally decided to allow Estonia to become the 17th member state to
adopt the euro. The Baltic state will introduce the single currency as of January 1 next year, giving the country 6
months to prepare for the changeover. In the light of this, the Council set a fixed conversion rate for the Estonian kroon
against the euro: 15,6466 Estonian kroonid to one euro This represents the current value of the Estonian currency in the
EU’s exchange rate mechanism (ERM II).

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Contrary to the Estonian success story, excessive deficit
procedures were opened for Bulgaria, Denmark, Cyprus
and Finland. The Council issued recommendations on the
measures to be taken in order to reduce the countries’
deficits back below the threshold of 3% of gross domestic
product (GDP). Including these four new countries, 24 out
of 27 EU member states are
now subject to an excessive
deficit procedure. This should
of course be seen in the con-
text of the current global
financial crisis.
With regard to the intentions
to reform financial supervi-
sion in the EU, the Council
has set out political guide-
lines for further negotiations
with the European Parlia-
ment. Concretely, these
negotiations will be about
the creation of a European Systemic Risk Board (ESRB)
which will exercise efficient macro-prudential oversight of
the financial system, and about the establishment of a
European Banking Authority (EBA), a European Insu-
rance and Occupational Pensions Authority (EIOPA) and
a European Securities and Markets Authority (ESMA)
for micro-prudential oversight. On September 2, all three
sides of the EU triangle – the Council of the EU, the Euro-
pean Commission and the European Parliament – finally
Informal Competitiveness Council (July 14-16, 2010)
On July 14-16, the Competitiveness Council met informally
in Brussels, first in its industry configuration (July 14-15)
and then in its research configuration (July 15-16). In ad-
dition, the Belgian Presidency decided to schedule a joint
informal Council meeting where both EU industry and Re-
search Ministers were present. In the margin of these offi-
cial meetings, the Belgian Federal Public Service (FPS)
Economy, Essenscia (representing Belgian chemicals and
life sciences industries) and Cefic (European Chemical In-
dustry Council) organized a conference on July 14 titled
“The chemical industry: the roots for sustainable
growth in Europe”.
During the Industry Council on July 14-15, the overarching
theme concerned the transition path towards a green
and competitive European economy in a globalized
world. Two main topics were discussed in this perspective:
the EU’s new industrial policy and an innovation policy tai-
lored to small and medium enterprises (SMEs).
came to an agreement on this package. On September 7,
Finance Ministers should formally approve the creation of
these new bodies at the ECOFIN Council and on Septem-
ber 20-23, the package should receive the green light at
the Parliament’s plenary session. As a result, the ESRB and
the three micro-prudential supervisory authorities are
expected to be operational as of January 1, 2011.
In relation to the Europe 2020 strategy, the Council adopt-
ed ‘Integrated Guidelines’ for structural reforms and eco-
nomic policies to be carried out over the next few years.
Progress towards the goals of the Europe 2020 strategy
at both the EU and member state level, will annually be
assessed by the European Council. The assessment will
focus primarily on overall financial stability as well as on
macroeconomic indicators and structural and competitive-
ness developments.
Finally, the Council adopted a directive aimed at simplify-
ing electronic invoicing of value-added taxes (VAT).
Under this new directive, tax authorities have to regard
e-invoices as equal to paper invoices. The directive also
obliges authorities to remove all legal obstacles to the
transmission and storage of e-invoices. If obstacles to
e-invoices were to be removed completely, the Commis-
sion has calculated that the annual cost savings for
businesses could amount to 18 billion EUR. This topic was
one of the demands of the Federation of Enterprises in
Belgium (FEB) towards the Belgian Presidency. 
A first number of sessions dealt with the future of EU
industrial policy. The flagship initiative ‘Industrial policy in
the era of globalisation’, enshrined in the Europe 2020
strategy, will form the basis of a modernized European
industrial policy aiming at facilitating the green transfor-
mation of European industry. This new industrial policy will
first of all have to take into account the complex nature of
the secondary sector nowadays: industrial sectors can no
longer be thought of as homogenous or national; they
now are at the centre of increasingly interlinked global
value chains which transcend traditional geographical and
sectoral borders. Sectoral policies are therefore likely to
have effects in other sectors as well. In addition, other
European policies (e.g. in the fields of environment, ener-
gy, transport, ...) increasingly affect industrial competitive-
ness, therefore requiring coordination. Secondly, the future
European industrial policy will have to address the chal-
lenges raised by the transition to a low-carbon economy
by stimulating initiatives in the fields of eco-efficiency and
BrusselsCalling - 3 -
green sectors. A balance will have to be struck between
sustainable development and external competitiveness. In EVENTS&MEETINGS
this context, innovation will be key in Europe’s ability to
6-9/09/2010 Plenary session of the European Strasbourg
establish itself in these growth markets. A third aspect Parliament
which needs to be taken into consideration is the need
6-7/09/2010 Informal Transport, Telecommuni- Brussels
for greater flexibility in response to structural changes cations & Energy Council – “Fuel-
ling a secure, low-carbon and affor-
which are taking place at an ever higher pace. A fourth
dable energy future for Europe”
element which was discussed by EU Industry Ministers
6/09/2010 Meeting of Herman Van Rompuy’s Brussels
was the issue of resource-intensive industries. On the Task Force on economic governance
one hand, the future competitiveness of these industries
7/09/2010 Informal Economic and Financial Af- Brussels
affects many third sectors to which they supply. On the fairs Council & Eurogroup meeting
other hand, their own competitiveness depends on fac-
7/09/2010 FEB lunch debate with Herman FEB premises,
tors over which policymakers have only limited control Van Rompuy, President of the Ravensteinstraat
European Council 4, Brussels
(e.g. worldwide demand, price evolutions, access to mar-
kets, ...). In addition, the EU is facing increased competi- 10-11/09/2010 Informal Foreign Affairs Council Brussels
tion for resources from emerging economies such as 12/09/2010 Foreign Affairs Council Brussels
China. In this respect, the Walloon Economy Minister,
12/09/2010 General Affairs Council Brussels
Jean-Claude Marcourt, argued in favour of a stronger
14/09/2010 Workshop (organized by the Brussels
presence of the EU in Africa. Fifth, future industrial poli- Belgian Presidency) – “Towards a
cy should foster the integration of SMEs in global supply regulatory framework for the
traceability of nanomaterials”
chains and clus-
ters. Studies have 15-16/09/2010 Informal Transport, Telecommunica- Antwerp
tions & Energy Council – Transport
demonstrated the
link between the 16/09/2010 Informal European Council Brussels
international 20-23/09/2010 Plenary session of the European Strasbourg
reach of SMEs Parliament
and their compe- 21/09/2010 Third newsletter ‘Brussels Calling’
titiveness. Last,
27-29/09/2010 ICT 2010 conference (organized by Brussels Expo,
ministers the Belgian Presidency) – Confe- Brussels
acknowledged rence on latest ICT trends & EU
priorities for ICT R&D funding
the need for an
integrated multi-level governance model for the future 28-29/09/2010 Ministerial conference – “Promo- La Hulpe
ting green employment : a major
European industrial policy. The growing internationalisa- and indispensable driver behind
tion of the economy has spurred the development of a successful transition towards a
competitive low carbon and green
close links between economies at the regional, national, economy”
European and international levels. In the light of the
29/09/2010 FEB lunch debate with Karel De FEB premises,
above considerations, the EU’s industrial policy is most li- Gucht, European Commissioner Ravensteinstraat
kely to evolve towards a distinction between generic and for Trade 4, Brussels
targeted policies (i.e. targeted to specific types of com-
4/10/2010 Asia Europe Business Forum Egmont Palace,
panies or particular value chain links), replacing the cur- (AEBF) Brussels
rent framework of horizontal and vertical policies.
6/10/2010 EU-China Business Summit Egmont Palace,
Brussels
During another series of talks between EU Industry
28/10/2010 FEB lunch debate with Connie FEB premises,
Ministers, it was discussed how innovation within SMEs Hedegaard, European Ravensteinstraat
Commissioner for Climate Action 4, Brussels
could be promoted. As SMEs are of paramount impor-
tance to the EU economy, they have a central role to play 10/12/2010 EU-India Business Summit Egmont Palace,
in Europe’s transition towards a green and competitive Brussels

economy. Although many SMEs are involved in some form

of innovation in the broadest sense (i.e. not only regarding
the development of technologies, but also concerning
production processes, business models or organisational
setups), SME-specific obstacles to innovation continue
to exist. These include access to adequate funding, the
commercialization of research and development (R&D)
efforts, access to skills, fragmentation of markets, the
functioning of European venture capital markets and mar-

BrusselsCalling - 4 -
 In the spotlight
ket access barriers. Increased inclusion of SMEs in industrial clusters can address
many of these obstacles and foster the transfer and dissemination of technology
• EUROPEAN TAX REVISITED
and knowledge. Ministers examined how the ‘think small first’ principle could
In an interview published in the August 9
be put into practice into the different innovation programmes and instruments at
edition of the Financial Times Deutschland
the EU level. The mid-term review of the Small Business Act (foreseen for this
newspaper, Commissioner for Financial
year’s fall) offers an important opportunity in this respect. One of the activities of Programming and Budget, Janusz
the Belgian Presidency in this context is the search for an agreement with the Lewandowski, flew a balloon on a
European Parliament and the European Commission concerning the late European tax in the discussions about the
payments directive. According to the current proposal on the negotiating table, European Commission’s budget review.
member states shall ensure that the period for payment fixed in the contract This budget review was agreed in 2006 to
shall not exceed 60 days for companies and 30 days for public authorities, unless avoid an impasse in the then 2007-2013
certain conditions, which are still financial perspectives negotiations. Cash-
being discussed, have been satisfied. strapped member states have recently
A political agreement on the late pay- been asking the Commission to come up
with ways to cut their national contribu-
ments dossier might be found during
tions which make up around 75% of the
the Competitiveness Council of
total EU budget. Hence Mr. Lewandowski’s
October 11-12.
tentative proposal to introduce some kind
of EU tax to replace member states’ con-
The Competitiveness Council also met tributions and strengthen the EU’s own
in its research configuration on July resources. Among the options considered
15-16. Research Ministers discussed are a tax on the financial sector (most
ways to simplify the EU’s instru- popular), on air transport, on carbon emis-
ments aimed at stimulating research and innovation, in the first place with sions trading revenues, or a direct EU levy
regard to the 7th Framework Programme for Research and Technological on national taxpayers (least popular). The
Development (FP7). The main challenge will be to strike a adequate balance idea of a European tax is not new but
between trust and control. Despite simplification measures which have already highly controversial as it touches directly
upon member states’ sovereignty. The
been introduced, further efforts are required. With many specific programmes,
United Kingdom, France and Germany
initiatives and instruments, participation in FP7 remains administratively complex
have already strongly rejected Mr. Lewan-
and cumbersome, in particular for interested parties with limited resources such
dowski’s suggestion. Belgium, Poland,
as SMEs. The process of simplification of administrative procedures and financial Austria and Spain however, have backed
controls must thus be continued, especially in view of the preparation of the 8th the idea of an EU tax. Commissioner
Framework Programme which will take effect as of 2014. After receiving an oral Lewandowski is expected to formally pre-
presentation on the work of a technical seminar on simplification, which was held
on July 14 in the presence of representatives of the European Commission, the
European Parliament and the European Court of Auditors, Research Ministers
had an exchange of views on several themes. These included ways to reduce the
administrative burden by a possible shift to results-based funding and a
methodology to evaluate those results in view of financial support, the simplifica-
tion of the EU research funding landscape, and the timing of proposed simplifi-
cation measures. In September, European Commissioner for Research, Innovation
and Sciences, Máire Geoghegan-Quinn, will present a plan for research and
sent the budget review and his proposals
innovation which is expected to address simplification, and during the at the end of September. Discussions
Competitiveness Council of October 11-12, ministers will adopt Council conclu- about the 2014-2020 financial perspectives
sions on the simplification of EU research and innovation programmes. will most likely take off mid-2011.

The Belgian Presidency has also put research and development (R&D) and
innovation at the top of its agenda. The transformation of research results into
innovative solutions is often insufficient, as are the interactions between research and market demands. If the EU is to
maintain a prominent role in today’s globalized economy, an integrated political approach towards research and industrial
innovation is essential. This justified a joint meeting between Research and Industry Ministers on July 15. The meeting
was chaired by Jean-Claude Marcourt, Walloon Economy Minister, and Benoît Cerexhe, Minister of the Brussels Capital
region in charge of research.

A first topic on the agenda were the gaps in the financing of R&D and innovation. Although the Europe 2020 strategy
has established the headline target of achieving the investment of 3% of the EU’s gross domestic product in R&D (for
which – in contrast to the Lisbon Strategy – an output-oriented progress indicator will be developed), the private sector

BrusselsCalling - 5 -
still faces important bottlenecks in this respect. These
include the continued lack of an affordable EU patent,
and insufficient financing, especially for SMEs, both at EU
and national level. But not only the level of funding poses
an issue, also the coordination of financial instruments
for innovation at EU and member state level should be
improved. A second topic which was debated by Industry
and Research Ministers was the encouragement of net-
works, partnerships and clusters to create a robust
knowledge triangle (between education, research and
innovation) and to increase the EU’s innovative potential
and capacity. Again, the inclusion of SMEs was stressed.
In this respect, the ‘Innovation Union’ flagship initiative in
the Europe 2020 strategy proposes to launch European
Innovation Partnerships and knowledge partnerships
aimed at developing solutions to societal challenges.
Ministers discussed key success factors for these partner-
ships and ways to make them as inclusive as possible. The
Belgian Presidency also supported the creation of a per-
manent European programme to raise awareness of inno-
vation. Thirdly, governance of research and innovation poli-
cies were discussed. An integrated approach, involving a
coordinated ‘division of labour’ between different stake-
holders at the European, national and regional levels, in
line with the subsidiarity principle, is necessary. In addition,
horizontal coordination between different EU policies
should be
enhanced.
In the margin of the
Competitiveness
Council, the Belgian
Ministry of Econo-
my and chemicals
sector federations
Essenscia (which is
a member of the Federation of Enterprises in Belgium
(FEB)) and Cefic (at European level) organized a confe-
rence at the BASF premises in Antwerp to frame the
4th EU-Brazil Business Summit (July 14, 2010)
On July 14, the 4th EU-Brazil Business Summit took place
in Brasília (Brazil). More than 100 participants, representing
European and Brazilian business and public authorities, were
present. The European delegation was led by Mr. Jorge
Rocha de Matos, President of the Associaçáo Industrial Por-
tuguesa (AIP), on behalf of BUSINESSEUROPE, and on be-
half of the Federation of Enterprises in Belgium (FEB), by Mr.
Pierre Alain De Smedt, Vice-President of FEB and chairman
of FEBIAC (the Belgian automotive sector federation, which
is a member of the FEB). Brazilian business was represented
by Mr. Robson Andrade, President of the Confederação
future role of the chemicals industry within the Europe
2020 strategy for smart, sustainable and inclusive growth.
The event was attended by more than 120 high-level
representatives from the private and the public sector,
and participants included Antonio Tajani, European
Commissioner for Industry and Entrepreneurship, and
Vincent Van Quickenborne, Belgian Minister of Enterprise
and Administrative Simplification. At the end of the con-
ference, conclusions were adopted featuring a number of
concrete recommendations addressed to the
Competitiveness Council. These included first of all a
realistic climate change policy that refrains from unilateral
commitments, avoids carbon leakage and is based on
fair burden-sharing between industry, transport and
households. Second, a more effective innovation policy is
asked for. The chemicals sector clearly counts on a break-
through in the contentious EU patent dossier. The latter
matter is a top priority for the FEB as well. Finally, the
need for an integrated and horizontal industrial policy
and for progress in international trade negotiations in the
framework of the World Trade Organization are stressed.
The European chemicals sector specifically asks the Eu-
ropean Commission to convince emerging markets such
as Brazil, China and India to subscribe to a sectoral
agreement under which countries with a significant
chemicals sector would abolish all import restrictions
on chemical products. The chemicals industry in Europe
employs more than 1,2 million people and represents
30% of turnover in the global chemicals sector, making it
of strategic importance to the EU economy.
During the upcoming Competitiveness Council of 11-12
October, the European Commission will present its com-
munication on the Europe 2020 flagship initiative ‘Inno-
vation Union’, and during the Competitiveness Council of
25-26 October on the flagship initiative ‘Industrial policy
in the era of globalisation’. Moreover, the European
Council of 16-17 December will be dedicated to the to-
pic of research, development and innovation. 
Nacional de Indústria (CNI). Over the last couple of years,
Brazil has developed into an important economic partner
of the EU in terms of trade and foreign direct investment
(FDI), and with its major emerging economy, Brazil’s impor-
tance is expected only to increase. In the EU, the country is
considered to be one of the best examples of how to marry
economic development, social progress and stability.
Several sessions were organized on various topics: the role
of emerging economies in the post-crisis global economic
context, regulatory and tax barriers to FDI, energy and cli-
BrusselsCalling - 6 -
mate change. Probably the most important point on the
agenda were the EU-MERCOSUR trade negotiations.
These negotiations with the Latin-American trade bloc,
which currently includes Brazil, Argentina, Paraguay and
Uruguay, have been suspended since October 2004, but
have recently been relaunched at the Latin America &
Carribean Summit in Madrid in May 2010. A first meeting
with chief negotiators took place in Buenos Aires (Argen-
tina) in July 2010. The aim is to arrive at a comprehensive
agreement, which would not only include goods, but also
cover services, investment, public procurement, sustainable
development, intellectual property rights, competition poli-
cies, a special agreement on sanitary and phytosanitary
standards and a binding dispute settlement mechanism.
Despite these high ambitions, a number of contentious
issues remain. For example, Venezuelan membership of
MERCOSUR has still not yet been approved by the
Congress of Paraguay, and the MERCOSUR customs union
is not yet completely effective. Furthermore, as the free
trade agreement (FTA) with the EU would be MERCOSUR’s
first agreement with a developed region, there is some
reluctance to offer the EU a full tariff liberalisation across the
board. The EU on the other hand is also facing protectionist
stances, mainly from agricultural interest groups.
Supported by a dozen of member states that criticized the
European Commission for its decision to resume negotia-
tions after 6 years of standstill, they fear that the FTA would
have devastating effects on European agricultural employ-
ment, especially in the meat sector. The European
Parliament was also very critical of the resumption of the
talks during its plenary session in Strasbourg in the begin-
ning of July. Members of the European Parliament (MEPs)
denounced the lack of coherence between the EU’s trade
policy and its agricultural policy, the latter imposing strict
traceability, sanitary and animal welfare requirements which
cannot be fulfilled by MERCOSUR member countries. In
response, Trade Commissioner Karel De Gucht said that the
EU’s agricultural offer to MERCOSUR would be determined
together with Commissioner for Agriculture and Rural
Development, Dacian Cioloş. The next EU-MERCOSUR
negotiation round will be held in October 2010.
At the end of the Business Summit, BUSINESSEUROPE
and CNI adopted a Joint Declaration, in which the
parties confirmed their commitment to the EU-Brazil
Strategic Partnership which was concluded in 2007.
With regard to the macroeconomic context, they
expressed their support for their governments’ efforts
to stabilize financial markets and mitigate the negative
effects of the crisis on output and employment. At the
same time, they urged public authorities to increase
coordination and cooperation in the field of current eco-
nomic problems, to support multilateral initiatives being
taken by the G20 and to fight protectionism.
With regard to trade, the Declaration welcomed the
relaunch of the negotiations between the EU and
MERCOSUR to conclude an FTA. It was stressed that the
EU and MERCOSUR should now soon conclude an ambi-
tious and balanced FTA, and that defensive considerations
in agriculture should not be exaggerated. In addition, the
EU and Brazil should consider the conclusion of the Doha
Round of the World Trade Organization (WTO) as a top
priority for 2011. A new multilateral trade deal should
create new opportunities in agricultural and non-agricul-
tural market access and improve trade rules concerning
dumping and subsidies. Furthermore, the Joint Decla-
ration acknowledged the important role investment plays
in bilateral economic relations between the EU and Brazil.
However, in order to realize the full potential of FDI, the
regulatory and tax environment should be improved in
Brazil as well as in the EU. In this respect, the establish-
ment of the Brazil-EU Investment & Tax Council in June
2010, which has already identified a number of tax barriers
to FDI in Brazil, was warmly welcomed. The EU should
also pay more attention to competitiveness aspects when
preparing and implementing European legislation and
raise awareness about new legislation and regulation.
Finally, with regard to climate change, Brazil and the EU
should work together to ensure that in Cancún progress
is made towards a comprehensive and balanced interna-
tional agreement. In order to facilitate the transition to a
low-carbon economy, regulatory environments should be
made favourable to the development of green technolo-
gies, especially regarding intellectual property rights and
stable financing. European and Brazilian business clearly
opposed the introduction of border tax adjustment
measures to offset the costs of unilateral climate change
mitigation policies.
Final speeches of the 4th EU-Brazil Business Summit
were given by José Manuel Barroso (President of the
European Commission), Herman Van Rompuy (President
of the European Council) and Mr. Luiz Inácio Lula da Silva
(President of Brazil). In his address, Mr. Van Rompuy
praised the commitment of European and Brazilian busi-
ness to ambitious and balanced solutions in terms of
climate change, and mentioned his agreement with Mr.
Lula da Silva to work closely together in view of the
upcoming Cancún Summit. 
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 General Affairs Council (July 26, 2010)
On July 26, the first General Affairs Council under the
Belgian Presidency took place in Brussels. The meeting was
chaired by Steven Vanackere, Belgian Minister of Foreign
Affairs and Institutional Reforms. Main points on the agenda
were a presentation of the priorities of the Belgian Presi-
dency, the approval of a negotiating framework for the EU
accession of Iceland, the establishment of the European
External Action Service (EEAS), and the preparation of the
next European Council on September 16.
First, in the field of enlargement, the Council approved a
general position as well as a framework for negotiations
with regard to Iceland’s application for EU membership,
which was received in July 2009 after the country was
severely hit by the economic and financial crisis. During the
latest European Council in June 2010, it was decided that
accession negotiations could be opened because Iceland
met all the political
membership crite-
ria. During its ple-
nary session in July,
the European
Parliament also
gave the green light
to start membership
talks. Accession
negotiations at mi-
nisterial level were
formally opened at an intergovernmental conference
between the EU and Iceland in Brussels on July 27. In
November the European Commission will start to assess the
extent to which Iceland is ready to start negotiations in spe-
cific areas, a process known as ‘screening’, which will proba-
bly last until mid-2011. In the build-up to its membership,
the country will have to adopt the EU’s so-called ‘acquis
communautaire’ integrally. Although Iceland is already a
member of the European Economic Area (EEA) and signato-
ry of the Schengen Agreement, negotiations are not ex-
pected to be smooth, especially not regarding fisheries. In
view of accession, significant efforts will also be needed in
the fields of agriculture and rural development, environ-
ment, the free circulation of capital and financial services.
Furthermore, the Icesave dispute with the United Kingdom
and the Netherlands, over the compensation of British and
Dutch savings deposits which were lost in the collapse of
Iceland’s second largest bank Landsbanki, persists (although
some consider it a bilateral issue). And in addition, Iceland’s
population, which will have the final say over accession in a
referendum, is increasingly sceptical about future EU mem-
bership.
Second, the Council also took a significant step forward in
the EEAS dossier: it adopted a decision establishing the
organisation and functioning of the new European diploma-
tic service to be led by Catherine Ashton, the EU’s High
Representative for Foreign Affairs and Security Policy. The
objective of the EEAS is to make the EU’s external action
more coherent and efficient and to increase the EU’s influ-
ence in the world. Earlier in July, the European Parliament,
during its plenary session, had already voted in favour of the
establishment of the EEAS, following the political agree-
ment which was reached in Madrid between the Parliament,
the Council and the Commission on June 21. The EEAS is
expected to start functioning as of December 1, one year
after the entry into force of the Lisbon Treaty. It will consist,
on the one hand, of a central administration located in
Brussels and, on the other hand, EU delegations to third
countries and international organizations. Personnel will be
hired from the European Commission, the General
Secretariat of the Council and from the diplomatic services
of the member states.
Third, the Council adopted a regulation aimed at improving
the quality and reliability of statistical data used under
the EU’s excessive deficit procedure (i.e. the procedure by
which the Council, after an assessment of the European
Commission, decides whether an excessive deficit in a mem-
ber state’s national budget exists). The new regulation also
strengthens the role of Eurostat in cases where significant
problems have been identified in relation to the quality of
the data, as was the case for Greece.
Finally, the General Affairs Council took stock of the follow-
up to be given to the meeting of the European Council of
June 17 in the fields of the implementation of the Europe
2020 strategy, economic governance, financial services, the
G20 and climate change. It also examined the draft agenda
for the next European Council which will be held on
September 16 and is expected to focus on the work of the
economic governance Task Force led by European Council
President Herman Van Rompuy and on the EU’s relations
with strategic partners. With regard to the latter agenda
point, a particular emphasis will be put on relations with
emerging Asian powers, given the upcoming bilateral sum-
mits which will be held in autumn. An overview of the
Business Summits which will be held in parallel can be found
in the ‘Events & meetings’ section in this newsletter. 
BrusselsCalling - 8 -
 UN Climate Change Conference in Bonn (August 2-6, 2010)
On August 2-6, 1656 delegates from 175 countries repre-
sented in the United Nations Framework Convention on
Climate Change (UNFCCC) met in Bonn for the
next to last negotiating session to prepare the
Cancún Conference which will be held in Mexico
from November 29 through December 10. As
was the case in previous sessions, negotiations
followed two parallel tracks. On the one hand,
the continuation of the Kyoto Protocol was dis-
cussed during the 13th session of the ‘Ad Hoc
Working Group on Further Commitments for
Annex I Parties under the Kyoto Protocol’
(AWG-KP 13). On the other hand, for the 11th
time, negotiations, intended to establish a global agree-
ment into which all the members of the UNFCCC would
enter, were held during the ‘Ad Hoc Working Group on
Long-term Cooperative Action under the UN Framework
Convention on Climate Change’ (AWG-LCA 11).
As for the AWG-KP, talks on further commitments regarding
emission reductions for the period beyond 2012 by the 37
countries that have ratified the Kyoto Protocol where at the
center of everyone’s attention. Even though no fundamental
issues were resolved, good progress was made with regard
to the inclusion of new gases and new quantified aggre-
gate commitments. In addition, a legal issues group was
established to discuss legal requirements needed to avoid a
‘gap’ between the present and the next Kyoto commitment
period. The discussions in Bonn resulted in a more simple
text than before. This implies that the Bonn text can serve
as a starting point for real negotiations during the next
preparatory UN Climate Change Conference which will take
place from October 4-9 in the Chinese city of Tianjin.
However, negotiations on the second path (AWG-LCA) have
Informal Transport, Telecommunications
& Energy Council (September 6-7, 2010)
On September 6-7, an informal Transport, Telecommunica-
tions & Energy (TTE) Council will be held in Brussels, in the
presence of Günther Oettinger (European Commissioner for
Energy). On September 6, EU Energy Ministers will debate
on the link between energy policy and consumer protec-
tion and on access to affordable energy for all. On Sep-
tember 7, the European energy infrastructure and its
financing will be on the agenda. These sessions will be
chaired by Paul Magnette, Belgian Minister of Climate and
Energy. The question of energy efficiency will be touched
been disappointing. They have not yet arrived at a stage in
which it would be possible to establish an ambitious, inter-
national and legally binding agreement.
Due to amendments made by a several par-
ticipants, the number of options for action
grew considerably. Christina Figueres, the
UNFCCC Executive Secretary, warned that
if the amount of choices is not narrowed
down, achieving the desired outcome in
Cancún will be highly unlikely. In short, the
next AWG-LCA session will be an even
harder nut to crack.
For the EU, the primary objective now is to re-establish the
balance between the two negotiation tracks. Concretely,
this implies that all major greenhouse gas emitting countries
must agree to subject themselves to enforceable, emis-
sions-reducing measures. This counts especially for those
countries that are still not bound by any agreement limiting
their emissions. Nonetheless, in a joint statement on behalf
of the EU and its member states, the European Commission
and Belgium, which currently presides the Council of the
EU, stated that they remain fully engaged in the Kyoto
track, while reiterating their preference for a single legally
binding instrument. The EU also made it clear that the pled-
ges of other parties still lack an acceptable level of ambi-
tion. As a result, a balanced outcome on both tracks has not
yet been achieved. This also implies that a positive outcome
of the Cancún conference is becoming increasingly difficult.
Regarding the Cancún Conference, the Belgian Presidency
will act as coordinator of the joint position of EU Member
States within the Council. The Cancún Conference is one of
the priority meetings on the Belgian Presidency’s agenda. 
upon during a lunch debate in the presence of Freya Van
den Bossche, Flemish Minister in charge of energy.
The sessions on September 6 will deal with the question
how energy policy can be made more consumer-friendly.
Over the past couple of years, electricity and gas markets in
Europe have been liberalized with the aim of improving cus-
tomer service, providing competitive energy prices through
the introduction of competition and allowing for free choice
between energy suppliers. To ensure that all consumers can
BrusselsCalling - 9 -
benefit from these advantages, several consumer-oriented
measures have been introduced in parallel, e.g. in the
framework of the 3rd legislative package of 2009 con-
cerning the internal energy market. These measures aim
at protecting consumers and at spelling out their rights
(e.g. transparent bills, clear information,
right of redress, a 6-week limit when
switching supplier), while energy regula-
tors ensure proper market functioning.
Although significant progress has been
made, according to the Belgian Presi-
dency, gaps between the intentions
and deliverables of EU energy market
legislation remain. Room for improve-
ment therefore continues to exist,
among other matters with regard to so-
called ‘vulnerable’ consumers (i.e. dis-
advantaged groups which have inade-
quate access to affordable energy). As
2010 is the ‘European Year for Combating Poverty and
Social Exclusion’, the Belgian Presidency has decided to
put this issue on the EU’s agenda. The 3rd internal energy
market package asks member states to define the concept
of ‘vulnerable consumer’ and to provide adequate safe-
guards to protect them. Energy Ministers are also expect-
ed to make the link between the promotion of energy
efficiency and savings on the one hand and the reduction
of energy bills on the other hand. It should be noted how-
ever that progress in energy efficiency often requires sig-
nificant investments in new energy infrastructures and
energy saving techniques and technologies which are
passed on to consumers.
In short, during the first session, Energy Ministers will
thus discuss how the EU’s future energy strategy can bet-
ter reflect the needs and interests of consumers, how
consumer rights and supplier obligations can be fully
enforced throughout the EU, and how a coordinated
approach among member states can con-
tribute to tackling the issue of access to
affordable energy for all citizens. Options
to make the EU’s energy policy more con-
sumer-friendly include the tackling of
poor implementation by member states,
the addressing of patchy national regula-
tion, the development of a common
methodology to define a measurable indi-
cator providing objective information on
vulnerable consumers, and the implemen-
tation of policies dealing with energy
price rises following large investments in
new technologies and infrastructure. During the TTE
Council of December 2-3, a benchmarking report on
making energy policy more consumer-friendly will be pre-
sented and discussed.
On September 7, the modernization and the integration
of the European energy grid will first of all be discussed.
Energy Ministers will exchange views on the role the EU
can play in simplifying and streamlining planning and
authorization procedures for new
energy infrastructure projects, on
appropriate regulatory and financial
tools to stimulate public and private
sector financing of infrastructure
investments, and on the integration of
increasing shares of variable renewable
energy sources on the grid. The EU’s
objectives of competitiveness, sustai-
nability and security of energy supply
can only be attained through a reliable,
integrated and smart energy network,
which requires massive investments
over the coming two decades.
However, essential cross-border inter-
connections between national energy grids are often
being blocked by cumbersome authorization procedures
and opposition of local inhabitants, leading to fragmented
energy markets.
Moreover, the existing policy framework for Trans-European
Energy Networks (TEN-E) is insufficient to address these
challenges and overcome current and future obstacles. In
order to come with a legislative proposal to replace the
existing TEN-E policy and guidelines in 2011, the European
Commission will present in November a communication on
a new energy infrastructure package to the European Parlia-
ment and the Council. This document will be further debat-
ed during the TTE Council of December 2-3.
A second theme on the agenda of EU Energy Ministers on
September 7 will be energy efficiency. One of the headline
targets of the Europe 2020 strategy is to increase energy
efficiency by 20% by the year 2020. However, without fur-
ther action, it seems that this target will
not be met. Ministers will therefore
exchange views on which measures could
be taken to realize this objective. Energy
can be saved at all stages of the energy
chain, i.e. from generation, transmission
and distribution to consumption. As mem-
ber states’ energy mixes and strategies dif-
fer significantly, member states are consid-
ered to be best placed to develop their
own National Energy Efficiency Action
Plans (NEEAPs).
In addition, ministers will discuss the extent to which ener-
gy efficiency should be mainstreamed in other policy areas
(e.g. public procurement). Another issue related to energy
efficiency concerns the financing of energy efficiency
BrusselsCalling - 10 -
investments. The current economic and financial climate
has put funding under significant pressure. Ministers will
thus look into innovative ways to ensure the financing of
necessary investments.
In 2009, the Federation of Enterprises in Belgium (FEB)
commissioned McKinsey & Company, a consultancy, to in-
vestigate “pathways to world-class energy efficiency in Bel-
LINKS
• Website of the Belgian Presidency of the Council of the European Union
http://www.eutrio.be
• Website on the Belgian EU Presidency of the Federation of Enterprises in Belgium (FEB)
http://eupresidency.vbo-feb.be
• Study ‘Pathways to World-Class Energy Efficiency in Belgium’, by McKinsey & Company in cooperation with the
Federation of Enterprises in Belgium (FEB)
http://www.energyefficiency.be/files/EnergyefficiencyinBelgium_fullreport.pdf
Economic and Financial Affairs Council &
Eurogroup meeting (September 6-7, 2010)
Key on the agenda of this week’s Economic and Financial
Affairs (ECOFIN) Council are two taxation topics. First, a
discussion will take place on the possible introduction of a
levy on banks. Second, the introduction of a possible tax
on financial transactions is on the agenda as well. The aim
of such a tax would be to reduce the number of specula-
tive transactions on financial
markets. Those against
argue that taxing transac-
tions could harm the reco-
very of the financial sector
and result into the delocali-
sation of finance activities.
Consequently, the discus-
sion concerning this topic
will concentrate on whether
or not such a tax would be effective or not. In addition, the
payment of a second loan tranche of 6,5 billion EUR to
Greece is most likely to be authorized. In the light of this,
the decision by Slovakia not to participate in the Greek
bail-out operation will be discussed as well. Finally, the
results of July’s stress test exercise, which uncovered 7
out of 91 European banks to be undercapitalized, will be
assessed in order to decide whether or not to repeat the
exercise. The revised guidance, which includes the use of
reverse stress tests and which was published by the
Committee of European Banking Supervisors in August,
gium”. The findings of this study can be accessed online by
following the Internet link provided in the section ‘Links’ in
this newsletter.
The spring 2011 European Council is expected to adopt a
new Energy Action Plan for the period 2011-2020. Discus-
sions in the current Energy Council of September 6-7 will
serve as preparatory work for this new energy strategy. 
will also be discussed. Reverse stress tests are tests in
which banks themselves assess under which circumstances
they would collapse.
In the light of the agreement on the creation of a Euro-
pean Systemic Risk Board (ESRB) for macro-prudential
supervision (ESRB) and three European Supervisory
Authorities (ESAs) for micro-prudential supervision on
September 2, the Ministers of Economy and Finance will
formally allow these new watchdogs to be installed at this
week’s Council. If the European Parliament formally adopts
the new legislation on September 20-23 at its plenary
session, the ESRB, the European Banking Authority (EBA),
the European Insurance and Occupational Pensions
Authority (EIOPA) and the European Securities and Markets
Authority (ESMA) will be up and running according to plan
in January 1, 2011.
Ahead of the ECOFIN Council, the Task Force on economic
governance, chaired by Herman Van Rompuy, President of
the European Council, will gather on September 6. The
Eurogroup will meet on September 7, exceptionally after
the ECOFIN Council, and will discuss the current state of the
Greek economic adjustment programme as well as the
issue of strenghtening the coordination of economic
governance in the eurozone and a new structure for the
Stability and Growth Pact. 
BrusselsCalling - 11 -
TEAM PRESENTATION

Presentation of the European Department of the FEB

Diane Struyven
Director of the European Department of the FEB – Permanent Delegate to BUSINESSEUROPE
Tel: +32 (0)2 515 08 34
ds@vbo-feb.be

Michael Voordeckers
Advisor at the European Department of the FEB
Tel: +32 (0)2 515 09 82
mv@vbo-feb.be

Arnaud Thysen
Deputy Advisor at the European Department of the FEB
Tel: +32 (0)2 515 09 31
at@vbo-feb.be

Michiel Humblet
Intern at the European Department of the FEB
Tel: +32 (0)2 515 08 04
Guesteurop@vbo-feb.be

Pieter-Jan Van Steenkiste

Intern at the European Department of the FEB
Tel: +32 (0)2 515 09 84
guesteurop2@vbo-feb.be

FEB – Federation of Enterprises in Belgium

Ravensteinstraat 4 – 1000 Brussels – Tel. 02 515 08 11 – Fax. 02 515 09 15

PUBLISHER: Olivier Joris – Wolvenbergstraat 17 – 1180 Brussels

PUBLICATION MANAGER: Stefan Maes – Tel. 02 515 08 43 – sm@vbo-feb.be
GRAPHIC DESIGN: Vanessa Solymosi, Landmarks – sm@vbo-feb.be
COPYRIGHT: Reproduction with acknowledgement of source is permitted

BrusselsCalling - 12 -