European Union 1999

Yearbook 1999

European Union. Here are some of the events in the EU that got the most attention during the year.

Asbestos in all forms will be banned throughout the EU as of January 1, 2005. The last permitted asbestos species, chrysotile asbestos, was banned by the EU Commission in 1999. In nine of the EU’s fifteen member states, including Sweden, the use of the carcinogenic chrysotile asbestos already banned.

Asylum policy. In 2004, the EU will have a common asylum and refugee policy. Over the next five years, the Union will prepare legislation for a common asylum procedure and a uniform status for those granted asylum. A country’s decision to grant refugee asylum should apply throughout the EU. Refugee policy must be based on the Geneva Convention for the Protection of Refugees and Asylum Seekers. The decision on a common asylum policy is a direct consequence of the so-called Schengen agreement, which means that all people in the EU can move freely between the member states. According to AbbreviationFinder, EUB means European Union Bank.

Budget. In the summer of 1999, the EU’s fifteen heads of government agreed on a joint budget for the years 2000–06. The settlement, the so-called Agenda 2000, means that the EU’s total budget will reach an average of SEK 795 billion. per year. This is slightly more than Sweden wished for, but at the same time less than what the European Commission had proposed. The new budget package means that Sweden’s membership fee to the EU amounts to around SEK 22 billion. per year up to 2006. In addition to the membership fee, there are costs incurred for the current fifteen EU countries when new member states join the Union sometime after 2003.

In 2000, almost half of the budget, just over SEK 353 billion, goes to agriculture. The regional policy, including the structural funds, has been allocated 277 billion. Research and other Community policies receive SEK 51 billion, and SEK 39 billion. goes to external measures such as assistance. The EU administration costs over SEK 39 billion in 2000, and the cost of enlargement with new members from Eastern and Central Europe is budgeted at just under SEK 30 billion. The new budget package also represents a number of changes in EU agricultural policy.

Chocolate. After 25 years of discussion, EU countries have agreed on the content of chocolate. The candy may contain no more than 5% fat that is not cocoa fat in order to be sold as chocolate. Discussions began when Britain and Ireland became members. The proportion of cocoa fat in British and Irish chocolate is very limited and was not allowed to be sold as chocolate in the rest of the EU. This also applies to Swedish chocolate where most of the fat consists of cheaper vegetable fat. The compromise means that Swedish chocolate with a maximum of 5% other fat can now be sold as chocolate throughout the EU.

Economical crime. EU police cooperation, Europol, will be given increased powers to investigate suspicions of money laundering and other financial crime in the Union. Investigators should, after a decision in court, be able to request confidential information from banks about financial transactions as well as information about ownership in companies. Investigators should also be able to request that auditors’ privacy be revoked. The Union will also strengthen the fight against serious organized crime. A network between national prosecutors will be established, Eurojust. The network will coordinate the national prosecutor authorities.

Electronic Commerce. The EU has agreed on a legislative package for electronic commerce on the Internet. The package includes, among other things, that digital signatures should apply when purchasing over the Internet. Previously, only handwritten signatures were approved. Rules have also been agreed on how electronic contracts should be concluded and conditions for how electronic advertising should be handled. Private consumers who shop via the Internet should also have the right to complain about the product in their own country and not in the country of sale. The rules provide a first legal framework for the growing e-commerce in the EU.

The electricity market in the EU was opened to free competition in February. For ten years, the member states had negotiated a common market for energy as well. However, deregulation does not mean that competition will be completely free. The liberalization of the market will take place gradually. The first step means that at least 26% of the electricity market will be exposed to competition. Large industries that consume more than 40,000 megawatt hours of electricity per year can now choose their own electricity supplier. In 2003, 30% of the market will be open to free competition.

Several EU countries, including Sweden, Finland and the UK, had already liberalized their power markets when the new EU directive came into force. In practice, therefore, almost 60% of EU electricity markets are exposed to competition.

Electricity prices have fallen sharply since the market liberalization began in the early 1990s. Both households and industries have received cheaper electricity. Most of the price of households has fallen in Greece, while Dutch households have had unchanged prices.

Phthalates. The EU has banned phthalates in plastic and bit toys for children under the age of three. Phthalates can cause kidney and liver damage and can be released when children suck on soft plastic toys. Toys that are not intended for chewing should be labeled with a warning text if they contain the harmful substance.

Dyes. The European Commission has decided that Sweden does not have the right to retain the law restricting the use of azo dyes and sweeteners cyclamate in food. The law includes to protect allergy sufferers, but the Commission believes that they are too far-reaching to achieve its purpose.

Negotiations on new members. The EU has decided to start membership negotiations with six new countries Romania, Slovakia, Latvia, Lithuania, Bulgaria and Malta. Negotiations are already underway with Estonia, Poland, the Czech Republic, Hungary, Slovenia and Cyprus. Turkey has also been approved as a candidate country. However, before negotiations on membership can begin with Turkey, the country must meet demands for better respect for democracy and human rights. In addition, the disputes with Greece in the Aegean must be resolved. If the conflicts are unresolved in 2004, the EU considers that they should proceed to the International Court of Justice in The Hague.

BSE (mad cow disease). The export ban on British beef was lifted on 1 August. The ban was introduced three years ago following suspicions of a link between the mad cow disease and Creutzfeldt-Jakob disease. However, France and Germany refused to lift the import ban, causing a bitter dispute between the British, French and German governments.

Hormone War. On June 15, the European Commission stopped all imports of American meat. The reason for the import ban was that a sample check found residues of growth hormones in guaranteed hormone-free meat. In the EU, since 1988 there has been a ban on hormone treatment of animals to promote growth. The growth hormone 17-beta-estradiol, found in the American meat, is suspected to have tumor-inducing and tumor-stimulating effects. The United States claims that there is no scientific evidence that hormone therapy poses a threat to public health. The US considers that the EU is in breach of the rules on free trade and has notified the Union to the WTO. The organization gave the US the right and allowed the US to impose penalties on imported goods from the EU. The UN World Health Organization WHO has approved growth hormones.

Transparency in EU institutions is gradually improving. The Council of Ministers has established a register of its actions on the Internet. However, the documents cannot be read on the Internet but must be ordered. The register is also not complete but only contains documents from 1999.

Agricultural Reform. When EU leaders approved the new budget package for the period 2000-06, they also agreed to reform agricultural policy. The reform is the most far-reaching since the CAP was established in 1960. The aim is to gradually reduce agriculture’s share of the EU budget. The idea is also to lower consumer prices for different foods. The reform means that the guarantee prices to the farmers are lowered and that the direct income support to farmers is changed. For dairy products, guarantee prices are reduced by 15%. The reduction will be in three steps from 2006. For cereals, guarantee prices will also be reduced by 15%, but in two steps in 2000 and 2001. Guarantee prices for beef will be reduced by 20% in three steps.

Farmers’ income will be supported through a series of direct payments. For every tonne of milk that a farmer produces, about SEK 155 is paid. For oilseeds and grain, direct income support amounts to SEK 594. per ton. For grandmothers, the support amounts to SEK 1800. per animal, for bulls SEK 1,890. and for studs 2,700 SEK. The slaughter premium for suckler and dairy cows, heifers, bulls and cattle has been set at SEK 720/animal.

Trucks must comply with stricter exhaust emission regulations from 2000. Emission requirements will be tightened by 30% for all new trucks. The sharpening basically covers all emissions, especially carbon monoxide, unburned hydrocarbons and nitric oxide. From 2005, the requirements for additional emissions of solid particles have been further tightened. All new trucks must then be fitted with particle traps and should lead to a reduction of particle emissions by 85-90% compared to today’s levels. In 2008, all new trucks must be equipped with exhaust gas cleaning corresponding to the catalysts of passenger cars.

Food labeling. Foods containing 1% genetically modified ingredients should now be labeled. The decision was made by the EU in the fall and was immediately criticized by consumer and environmental organizations who argued for a zero limit. Eighteen genetically modified products are currently being used in the EU, while another thirteen are awaiting approval by the member states. The EU has not approved any new genetically modified products since April 1998 due to consumer concerns about the new foods. The European Commission hopes that labeling will stop the concern.

Military cooperation. At the EU summit in the summer of 1999, EU leaders agreed to initiate military cooperation. Thus, for the first time in EU history, the Common Foreign and Security Policy has a defense component. The decision means that the EU will have the capacity to independently intervene militarily, to prevent conflicts and deal with crises. The corresponding functions that currently exist within the Western European Union (WEU) are transferred to the EU at the same time as the WEU defense alliance is wound up. Decisions on defense matters must be taken by unanimity.

VAT. EU finance ministers have agreed that member states can lower VAT on certain labor-intensive services. The reduction is a three-year experiment to increase employment for the low-skilled, but also to counteract black jobs in certain sectors. The agreement means that those countries that wish to reduce VAT for a maximum of two of five different service professions. The services that are relevant for a VAT reduction are cleaning assistance, domestic help, small repairs of eg. shoes and bicycles, renovation of private homes and hairdressers. Today, the VAT on these services must be at least 15% in the EU.

Olaf. In April, the EU was given a new authority, Olaf, to investigate fraud with EU funds and corruption within the EU institutions. Unlike the old Uclaf, the new authority is independent and cannot take orders from the Commission or the Member States. OLAF has far greater powers than the old fraud unit and has the right to conduct investigations in all EU institutions. The findings are valid in the national court. One of Olaf’s tasks in 1999 was to investigate whether the European Commission’s office in Stockholm had paid black salaries.

State aid. The rules for state aid to companies in crisis have been tightened. On the one hand, stricter rules are introduced on how often a company can receive restructuring aid and on the other, which companies can qualify for support. New companies with difficulties can, for example, not get government support. The rules come into force on July 1, 2000.

Structural funds.The distribution of EU structural funds for the period 2000–06 was completed in 1999. In total, member states may share SEK 1 840 billion for structural policy measures. Of this, Sweden receives around SEK 16 billion. This is just over two billion more than in the 1994-99 period. 30% of the money goes to Norrland and parts of northern central Sweden to promote structural adjustment in areas with low standards of living. Parts of central Sweden and southeastern Sweden receive almost SEK 3 billion for restructuring aid in areas that have been seriously affected by industrial decline. 30% of regional aid will be used to combat long-term unemployment. Regions that are no longer eligible for support according to the criteria for the new Structural Fund program may be comforted with a transition grant of just over SEK 400 million.

During the period 1994-99, 25% of the residents in the support areas were one and two of the EU’s structural funds. But from the next period, the European Commission has changed the rules; the proportion of residents who are now eligible for regional aid has been reduced to 19%.

South Africa. After almost four years of negotiations, the EU and South Africa signed a trade and cooperation agreement. The agreement means that the EU and South Africa establish a free trade zone, while the EU continues to provide development support to the country at approximately the same level as today, ie. just over a billion kronor per year. From 2000, the tariffs will be gradually abolished. By 2002, the EU will have phased out customs duties for 95% of South Africa’s exports to the Union, and by 2012, South Africa will phase out customs duties for 86% of EU imports. 40% of South Africa’s exports go to the EU and 33% of its imports come from the Union.

Employment Pact. At the Cologne summit, EU leaders agreed to draw up an employment pact to increase employment in the Union. The pact consists of three parts; guidelines for an active labor market policy, guidelines for liberalization of different markets and a dialogue between the social partners, the European Central Bank, the European Commission and the EU labor and finance ministers. In addition, the European Commission will propose measurable targets for labor market measures. In the spring of 2000, an extra summit will be organized to review the effects of the Pact on employment.

Duty free. Sales of tax-free goods on aircraft, airports and ships within the EU ceased on July 1, 1999, despite strong protests from shipping companies and airlines. However, many airlines and shipping companies continued to sell spirits and cigarettes at the same low prices as before the ban.

European Union 1999

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