The essence of the EU’s internal market

What is the essence of the internal market, often (aspirationally) called the single market in English (although this distinction not made in all of the official languages of the European Union)?

Social market economy

Among the aims of the European Union we find “a highly competitive social market economy” in Article 3(3) of the Treaty on European Union (TEU):

3.   The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.

Free movement x 4

Instead of being confined to the national markets, the factors of production are supposed to move without obstacles in the internal market. Article 26(2) of the Treaty on the Functioning of the European Union (TFEU) expresses the goal in the form of four - not only one - freedoms of movement, also known as the four freedoms:

2.   The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

Non-discrimination

Non-discrimination on the grounds of nationality is central to the tearing down of obstacles in the union generally and the internal market specifically. From Article 18 TFEU:

Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.

CJEU

These basic principles, other treaty provisions and the rest of the EU legislation (acquis) have been brought to life by the Court of Justice of the European Union (CJEU).

EEA

The European Economic Area (EEA) extends the internal markets to three of the four EFTA states: Iceland, Liechtenstein and Norway. Switzerland, the fourth member of the European Free Trade Area (EFTA), has more limited access to the internal market based on bilateral agreements with the EU.

Brexit

According to Eurostat the population of the internal market was 515,640,100 at the beginning of 2016 (EU + EEA). If Brexit means that the population of the whole United Kingdom (about 65 million) leaves the internal market (not only the EU, but the EEA as well), about 450 million would remain, somewhat smaller than the combined 480,516,824 population (2016 estimate) of the less integrated North American Free Trade Agreement (NAFTA) countries Canada, Mexico and the USA.

 

Summary

The aim of the internal market, which consists of 31 countries with a total population of 515 million, is a highly competitive social market economy by the free movement of goods, persons, services and capital and the prohibition of all discrimination on grounds of nationality.

Ralf Grahn

EU and Switzerland disagree on relationship

As we saw in the previous blog entries 'EU relations with Switzerland: End of the road for bilateral model' (30 December 2010) and 'EU conclusions regarding Switzerland' (31 December 2010), the General Affairs Council (GAC) gave the impression that the European Union is fed up with the administration of 179 bilateral agreements with EFTA country Switzerland:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


Swiss approach

The official approach of Switzerland is in marked contrast with the EU aspirations. I quote the second paragraph of the ”Welcome!” page of the Integration Office, adding only boldface:

Switzerland's policy towards Europe is based on bilateral negotiations. Cooperation takes the form of bilateral agreements between Switzerland and the EU in specific areas. Beginning with the Free Trade Agreement of 1972 a whole series of bilateral agreements have been concluded step by step, notably in bilateral negotiation rounds I and II. As well as creating the conditions for mutual access to each other's markets, these agreements serve as the basis for close cooperation in areas including research, security, asylum policy, culture and the environment. This bilateral approach has been the foundation stone for Switzerland's policy of openness and cooperation with its European neighbours. The process has been endorsed by the people in a number of referenda.

It is hard to miss five ”bilateral” in a fairly short paragraph.

On the same web page there is a link to the 14 December 2010 statement of the Integration Office about the GAC conclusions.

The statement noted that the EU Council expressed criticism of several aspects of the relations. The Integration Office responded to the criticism:

 The present bilateral agreements with the EU are working well. Although specific matters relating to the application of these agreements are often discussed, given the intensity of the bilateral relations between Switzerland and the EU, this is normal. Switzerland criticises for example the fact that Swiss employers are required to contribute to the holiday pay funds of various EU member states, even though they already pay these contributions in Switzerland. Problems concerning interpretation of agreements can as a rule be discussed between the States concerned or within the framework of the Mixed Committee.

 In our view, the accompanying measures on the free movement of persons are overall in conformity with the Agreement on the Free Movement of Persons (FZA) and constitute appropriate measures to protect employees. Switzerland is not the only country to have insisted on such measures. A number of EU member states have also introduced such measures on the basis of a corresponding EU directive (concerning the posting of workers). Experience has shown that the accompanying measures are necessary to protect wages and working conditions in Switzerland. In this context for example, checks carried out by labour inspectors revealed breaches in one fifth of cases.

The free movement of persons has been a major factor in intensifying the bilateral relations between Switzerland and the EU. Today, over one million EU citizens live in Switzerland and over 200,000 people from the EU cross the border every day to work into Switzerland. Between 2006 and 2008, the number of cross-border services provided in Switzerland rose by around 25 percent. The EU benefits greatly from its free movement agreement with Switzerland.

 In previous discussions, Switzerland has put forward constructive proposals on specific cantonal tax regimes. However, these proposals were rejected by at least one EU member state. Switzerland has demonstrated a constructive approach to other areas of tax policy by considering, for example, a possible revision of the bilateral agreement on the taxation of savings income, and has even expressed its willingness, under certain conditions, to enter into a dialogue with the EU on the code of conduct on corporate taxation.

 Swiss regional policy is designed to promote innovation and increase value added in the rural and mountainous regions of the country. Tax concessions at federal level have only a marginal effect and are only provided for structurally weak regions. Only 10 percent of the Swiss population live in those regions where such tax concessions can be granted. Swiss regional policy measures are not anti-competitive.

 Switzerland has been supporting Central and Eastern European countries since the beginning of the 1990s within the framework of its assistance to countries in transition. It has continued this policy since 2007 by granting a contribution to reduce social and economic disparities in the enlarged EU and, in 2010, the scope of the contribution was extended to include Romania and Bulgaria. The Federal Council will decide at an appropriate time and in the context of the country's overall relations with the EU whether to maintain this support. In making this decision, the Federal Council will take past experience of the enlargement contribution into consideration as well as the needs of the recipient states.

 On 18 August 2010, the Federal Council set up an informal Swiss/EU working group with a remit to discuss with the European Commission the possible horizontal institutional provisions of future agreements between Switzerland and the EU. The working group is looking at the possibility of dynamically adjusting the agreements to comply with new EU legislation, how to ensure the coherent application and consistent interpretation of future agreements, and the development of an effective dispute procedure. We share these aims with the EU. Any solution must respect the sovereignty of both parties and the efficient operation of their institutions.

On 18 August 2010 at a special meeting dedicated to EU matters, the Federal Council decided that Switzerland would continue to conduct its relations with the EU on the basis of bilateral sector agreements. The Federal Council considers that the bilateral way is currently the most suitable way to ensure the necessary convergence of Switzerland's and the EU's respective interests.

The statement of the Integration Office reflects the views expressed by the Swiss Federal Council (government), summarised in English on the web page Report on the Evaluation of Switzerland's European Policy. On the web page there is a link to a nine page summary (in English):

An overview of the Federal Council’s Report on the Evaluation of Switzerland’s European Policy (published 17 September 2010)

For the full report of about a hundred pages you have to opt for one of the official languages of Switzerland, German, French or Italian:

Bericht des Bundesrates über die Evaluation der schweizerischen Europapolitik

Rapport du Conseil fédéral sur l’évaluation de la politique européenne de la Suisse

Rapporto del Consiglio federale sulla valutazione della politica europea svizzera


Bargaining

On the face of it, we get the impression that the EU and Switzerland disagree about the very nature of their future relationship. Switzerland does not even promise to pay anything for its access to the internal market by promoting social and economic cohesion.

However, 'Can't live with them, can't live without them' practically forces the European Union and Switzerland to find an accommodation they can both claim as a victory with regard to new EU acquis.

That still leaves different taxation issues and assorted other matters to be hammered out.



Ralf Grahn



P.S. The European Citizen noticed that the president of the European People's Party Wilfried Martens chose to defend the media law of the Hungarian EPP member party Fidesz. I would hope for the EPP to start putting the founding values of the European Union and the fundamental rights of EU citizens above the media models of Orbán and Berlusconi.

EU conclusions regarding Switzerland

Through legislation and jurisprudence the body of European Union law is in constant movement, but with Switzerland each relevant change has to be negotiated separately and every one of the 179 bilateral treaties administered. This is more cumbersome than the European Union is willing to accept for the future: EU relations with Switzerland: End of the road for bilateral model (30 December 2010).

Publicly, the the European Union has described its aims in vague terms, and voters in Switzerland have earlier rejected EU membership and even joining the European Economic Area (EEA). Surrounded by EU member states, Switzerland needs smooth relations, but until now only the piecemeal approach embodied by the concept ”bilateral” has been able to satisfy sovereignist electors.

There are, perhaps, many ways to skin a cat, but it becomes more complicated if you have to get the agreement not only of the cat, but of all (Swiss) felines.

In states affected by referendumitis anything can happen, so do not count your blessings until the referendum results are in.


Specific conclusions


After the general remarks in yesterday's blog entry, the main purpose of this blog post is to present the specific conclusions of the EU General Affairs Council (GAC) with regard to EFTA country Switzerland:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010

There are a number of issues the GAC wanted to comment on, and the EU seems set to drive a bargain (paragraphs 37 to 50):

SWISS CONFEDERATION

37. Relations between the EU and Switzerland are good, intensive and broad. Situated in the very heart of the European territory, Switzerland is one of the EU's major trading and investment partners and EU and Swiss economies are closely interlinked. In the past two years, relations have intensified even further.

38. In this context, the Council welcomes in particular the full participation of Switzerland in the Schengen area, as well as the extension of the Free Movement of Persons Agreement to Bulgaria and Romania. It congratulates Switzerland on the breakthrough of the Gotthard base tunnel, an important step in the realization of this impressive infrastructure project, which will contribute significantly to the development of efficient and environmentally sustainable transport in Europe.

39. The Council welcomes the existing cooperation with Switzerland in the area of Common Foreign and Security Policy, in particular in civilian crisis management operations, and stands ready to further strengthen cooperation in this area. It pays careful attention to the Swiss interest in holding a formal political dialogue and wishes to express its similar aim to augment our cooperation and explore together the appropriate format.

40. EU-Switzerland relations include a contribution to reduce economic and social disparities in the EU. The EU believes that such support contributes to enriching overall relations between the parties and reinforces mutual solidarity. The Council is therefore confident that Switzerland's contribution will continue in the future, on the basis of the review of the existing mechanisms.

41. Following Switzerland’s rejection of the EEA in 1992, the EU and Switzerland decided to deepen their relations through the conclusion of agreements in chosen sectors. The Council takes note of the European Policy Report of the Swiss Federal Council of September 2010, reaffirming this choice.

42. The Council notes that this sectorial approach has allowed closer cooperation in a few areas of mutual interest but has turned in the course of the years into a highly complex set of multiple agreements. Due to a lack of efficient arrangements for the take-over of new EU acquis including ECJ case-law, and for ensuring the supervision and enforcement of the existing agreements, this approach does not ensure the necessary homogeneity in the parts of the internal market and of the EU policies in which Switzerland participates. This has resulted in legal uncertainty for authorities, operators and individual citizens.

43. In this context, the Council is concerned by an incoherent application of certain agreements and the introduction by Switzerland of subsequent legislative measures and practices incompatible with those agreements, in particular the Agreement on the Free Movement of Persons. The Council calls upon Switzerland to abrogate such restrictions (for instance, the obligation in force in Switzerland to provide prior notification with an 8-day waiting period) and to refrain from adopting new measures incompatible with the Agreement.

44. The Council remains very concerned regarding certain cantonal company tax regimes of Switzerland creating an unacceptable distortion of competition, and reaffirms its position on this matter. It regrets that the lengthy dialogue on this issue has not yet led to an abolition of the state aid aspects of these regimes. The Council reiterates its call on Switzerland to abolish these tax incentives and to avoid taking internal measures, such as certain aspects of the New Swiss Regional Policy, which would be incompatible with the Agreement and may have the effect of distorting competition between EU border regions and Switzerland. Other difficulties in the implementation of Protocol II of the Free Trade Agreement and in the application of the Agreement on Trade in Agricultural Products remain a matter of concern.

45. With regard to harmful business tax practices, the Council encourages Switzerland to continue discussions with the EU on the application of the principles and criteria of the EU Code of Conduct on business taxation.

46. Concerning the taxation of savings, the Council welcomes the readiness of Switzerland to consider an extension of the scope of the savings taxation agreement, once the EU has finalised its work on the revision of the savings taxation directive.

47. Regarding cooperation and information exchange in tax matters and the fight against fraud and evasion in tax matters, the Council welcomes the commitment taken by Switzerland in spring 2009 to implement OECD standards on transparency and tax information exchange. It expects a quick and consistent implementation of these standards in the relationship between Switzerland and the EU and all its Member States.

48. In full respect of the Swiss sovereignty and choices, the Council has come to the conclusion that while the present system of bilateral agreements has worked well in the past, the key challenge for the coming years will be to go beyond that system, which has become complex and unwieldy to manage and has clearly reached its limits. As a consequence, horizontal issues related to the dynamic adaptation of agreements to the evolving acquis, the homogeneous interpretation of the agreements, an independent surveillance and judicial enforcement mechanisms and a dispute settlement mechanism need to be reflected in EU-Switzerland agreements.

49. In addition to making the existing agreements more efficient and solving the outstanding problems in their implementation, the Council recognises that cooperation should be developed in certain areas of mutual interest. However, as regards agreements providing for Switzerland’s participation in individual sectors of the internal market and policies of the EU (a status normally only granted to members of the European Economic Area (EEA)), the Council recalls its conclusions of 2008, that the requirement of a homogeneous and simultaneous application and interpretation of the evolving acquis - an indispensable prerequisite for a functioning internal market - has to be ensured as well as supervision, enforcement and conflict resolution mechanisms. In this context, the Council welcomes the setting-up of an informal Working Group of the Commission and Swiss authorities.

50. Furthermore, the Council reiterates its conclusion of 2008 that in assessing the balance of interests in concluding additional agreements, it will have in mind the need to ensure parallel progress in all areas of cooperation, including those areas, which cause difficulties to EU companies and citizens.

As we see, EU-Swiss relations are more complex than with the EEA EFTA states Iceland, Liechtenstein and Norway, although in matters of taxation the ambitions of the European Union are expressed in practically identical terms with regard to Liechtenstein and Switzerland.

Salud, amor y dinero in 2011 to all my readers!



Ralf Grahn



P.S. If you are active in social media, you should know something about the legal issues involved. One place to look is the Social Media Recht Blog, written (in German) by the attorney Nina Diercks.

EU relations with Switzerland: End of the road for bilateral model

The blog post 'Liechtenstein under EU pressure on taxation' (28 December 2010) only scratched the surface, but let us go into more depth regarding taxation issues when readers and I feel like it.

Instead, we turn to Switzerland, the only European Free Trade Association (EFTA) country not to have joined the internal market through the European Economic Area (EEA).

The General Affairs Council (GAC) recently outlined the relations with the four EFTA countries:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


Financial contributions

There is a marked contrast between the EU's appreciaiton of the financial contributions by the the three EEA EFTA states Iceland, Liechtenstein and Norway and the expectations regarding Switzerland (paragraph 2):

2. The Council appreciates the financial contributions of the EFTA countries to the economic and social cohesion in the European Economic Area (EEA). Norway, Liechtenstein and Iceland (the "EEA EFTA States") recently committed themselves to a substantial increase of their continued contributions. The EU is looking forward to a constructive dialogue with Switzerland on the review of the current mechanism, expiring in June 2012. The Council hopes that a mutually acceptable solution will be found with the aim of reducing economic and social disparities in the EU.

End of the road for bilateral model

The EU Treaties Office Database records 179 agreements between the European Union and Switzerland.

It would be an exaggeration to say that the model of bilateral treaties is ”kaputt”, but according to the EU the system has reached the end of the road (paragraph 6):

6. Since Switzerland is not a member of the European Economic Area, it has chosen to take a sector-based approach to its agreements in view of a possible long-term rapprochement with the EU. In full respect of the Swiss sovereignty and choices, the Council has come to the conclusion that while the present system of bilateral agreements has worked well in the past, the challenge of the coming years will be to go beyond this complex system, which is creating legal uncertainty and has become unwieldy to manage and has clearly reached its limits. In order to create a sound basis for future relations, mutually acceptable solutions to a number of horizontal issues, set out below, will need to be found.

EU acquis

The European Union wants to guarantee a more level playing-field between businesses through the scope and implementation of the EU acquis (paragraph 7):

7. Though EU relations with the EFTA countries were extended over the years to many areas not covered by the internal market, these relations are mainly based on the progressive integration of the EFTA countries' economies into the EU internal market. In view of the need for a level playing field for all economic operators of the parties concerned and the continued development of internal market relevant acquis, the EU and the EFTA States should ensure homogeneity in the implementation of the acquis and the good functioning of the institutions.

The observations concern all the EFTA countries, but the procedures with the EEA members are more streamlined than with regard to Switzerland.

We look at specific remarks about Switzerland in a later blog post.



Ralf Grahn



P.S. Social Europe Journal (SEJ) is an important forum for political cross-border discussion, as presented by themselves: Debating politics in Europe and beyond. - Not to miss, if you are interested in EU level politics.

What does the Earl of Dartmouth know about the EU?

The latest blog entry in the series asked 'What does the EU want from Liechtenstein?' (25 December 2010).

Now we may ask what the Earl of Dartmouth knows about the EU.

On 14 December 2010 William (The Earl of) Dartmouth, member of the European Parliament (MEP), presented a question for a written answer to the Commission (E-010415/2010):

Does the EU have a trade agreement or agreements with Liechtenstein? If so, what is/are the principal terms?

Trade

In the context of the European Union and its common commercial policy, trade is usually understood as relations with third countries. (Cf. Articles 206-207 TFEU)


Liechtenstein

However, Liechtenstein has joined the internal market through the European Economic Area (EEA) together with Iceland and Norway.

In addition to my series of blog posts, the EU relations with Liechtenstein are outlined in the recent GAC conclusions:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


INTA

The Committee on International Trade (INTA) of the European Parliament is presented as responsible for:

matters relating to the establishment and implementation of the Union's common commercial policy and its external economic relations, in particular:

1.    financial, economic and trade relations with third countries and regional organisations;

2.    measures of technical harmonisation or standardisation in fields covered by instruments of international law;

3.    relations with the relevant international organisations and with organisations promoting regional economic and commercial integration outside the Union;

4.    relations with the WTO, including its parliamentary dimension.
 
The committee liaises with the relevant interparliamentary and ad hoc delegations for the economic and trade aspects of relations with third countries.

The Earl of Dartmouth

William (The Earl of) Dartmouth is a member of the EP Committee on International Trade, where he represents the Europe of Freedom and Democracy (EFD) group, an assortment of nine nationalist parties. He was elected an MEP as a candidate for the United Kingdom Independence Party (UKIP).


The question

I would expect MEPs in general and members of the expert Committee on International Trade in particular to know that Liechtenstein has joined the internal market through the EEA (in 1994).

I would not employ the term 'trade' regarding Liechtenstein in the way we do when speaking about economic relations with third countries (outside the single market).

The international agreements between the European Union and any country are just a few mouseclicks away at the Treaties Office database.

Therefore the parliamentary question about one or more EU trade agreements with Liechtenstein makes me wonder if it is is based on ignorance or laziness, or if there are profound reasons for such a query I have failed to understand.

I hope that William (The Earl of) Dartmouth would be kind enough to explain how his parliamentary question makes sense.



Ralf Grahn

P.S. What a sad Christmas AFP reports from Minsk: Belarussian police launched sweeping raids on opposition homes and offices as part of its crackdown on protests following Alexander Lukashenko's reelection, rights groups said.

What does the EU want from Liechtenstein?

Our latest blog entry on EU-Lichtenstein relations looked at what the web pages of the European External Action Service (EEAS) and the EU delegation to Switzerland and Liechtenstein offer interested citizens: 'EU communication on EEA and EFTA member Liechtenstein' (24 December 2010), with links to earlier blog posts.

We return to the conclusions from the General Affairs Council (GAC) of the European Union:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


Conclusions specific to Liechtenstein


In this blog entry we present the GAC conclusions specific to Liechtenstein (points 17 to 24):

PRINCIPALITY OF LIECHTENSTEIN

17. Given its limited human resources, the swiftness shown by Liechtenstein in most areas in adopting European Union legislation and regularly updating its legislation in accordance with the evolving EU acquis is to be commended. The Council welcomes the positive report of the government of Liechtenstein published on the occasion of the 15th anniversary of membership in the EEA.

18. In the period 2008 to 2010, relations between the EU and Liechtenstein have substantially intensified and were marked by positive developments in a number of areas.

19. The Council welcomes the solidarity with the EU shown by the people of Liechtenstein when committing to continue and increase their contribution to the reduction of social and economic disparities in the EEA for the period 2009-2014.

20. Preparations for the association of Liechtenstein to the Schengen acquis are well advanced on both sides. The Council is looking forward to a rapid entry of Liechtenstein into the Schengen area.

21. With regard to cooperation and information exchange in tax matters and the fight against fraud and tax evasion and any other illegal activity to the detriment of the financial interests of the parties, the Council welcomes the commitments taken by the Principality to implement OECD standards on transparency and on tax information exchange and to fight against fraud, and calls on Liechtenstein to continue its efforts in this area. The Council expects a quick and consistent implementation of these commitments in the relationship between Liechtenstein and the EU and all its Member States.

22. Concerning the taxation of savings, the Council welcomes the openness of Liechtenstein to launch negotiations on a revision of the savings taxation agreement to reflect the evolution of the corresponding EU acquis, once the EU has agreed the final text for its review of the savings taxation directive.

23. Considering that the EFTA Surveillance Authority has taken in recent years several decisions relating to state aid granted by Liechtenstein, the Council reiterates its recommendation of 2008 that Liechtenstein assesses all measures applied to industry, services and trade with respect to the definition of state aid provided for in the EEA Agreement, particularly in finance. The Council welcomes the intention of Liechtenstein to reform its tax legislation and looks forward to a reform compatible with state aid legislation. The Council will closely follow the implementation of this reform.

24. With regard to harmful tax practices, the Council encourages the Principality to continue discussions with the EU on the application of the principles and criteria of the EU Code of Conduct on business taxation.

Sticking points

I would have hoped for more information on the web pages of the EU delegation (and links on the EEAS country page) about the entry of Liechtenstein into the Schengen area, as well as quality information about the EU's aims regarding more controversial issues, such as cooperation against fraud and tax evasion, the revision of the savings tax agreement, state aid reform and curtailing harmful tax practices.

In questions such as these the European Union needs to take a more open attitude towards specifying the problems (as it sees them), defining its objectives and publishing reports on progress (or lack of it) in negotiations.

We can also hope for the EU's counterparts to present their positions and arguments transparently, in this case the Principality of Liechtenstein.



Ralf Grahn



P.S. The joint statement by EU High Representative Catherine Ashton and US Secretary of State Hillary Clinton on the post-Presidential elections situation in Belarus (23 December 2010) is an important first call for the respect of democratic principles and human rights in Belarus, after the bankruptcy of the policy of 'constructive engagement' with the last dictator of Europe.

EU communication on EEA and EFTA member Liechtenstein

Our first look at Liechtenstein was the blog post 'EU relations with Liechtenstein (general conclusions)' (22 December 2010), presenting the general remarks including Liechtenstein, but addressed at the EEA or EFTA states as a whole. Then we changed to a Liechtensteinian perspective in 'Principality of Liechtenstein views the European Union' (23 December 2010).

This blog entry tries to look at what a European citizen readily finds about the relations with Liechtenstein on the websites of the EU institutions.

In the background we have the conclusions from the General Affairs Council (GAC):

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


EU materials (EEAS)

Naturally we have to test the newly launched European External Action Service (EEAS) and its recently designed web pages. What can we say about the communication efforts?

I am happy to see that the country page for the Principality of Liechtenstein on the European External Action Service (EEAS) website offers a succinct text about relevant topics. It manges to cram a lot of information and even some forward-looking elements into ten short lines, with links to other pages.

The news links have been updated with the GAC conclusions. There are also 'related links' to websites specific to Liechtenstein (relations).

Among the links in the text, one leads to a page on the European Economic Area (EEA), with a basic description and links to the latest news.

Another text link leads to a fairly comprehensive summary about the Schengen area and cooperation, but not updated since 3 August 2009.

There is also a link to the 2004 agreement with Liechtenstein on taxation of savings.


Liechtenstein treaties

The EU Treaties Office database offers 67 treaties between the European Union and Liechtenstein. Regarding Schengen and the free movement of persons some agreements are not yet in force.


EU delegation to Switzerland and Liechtenstein

Although general news on the front page are posted in English, the web page of the EU delegation for Switzerland and Liechtenstein you land on is in German: Delegation für die Schweiz und Liechtenstein.

In addition to German there are pages in French and Italian, but mainly for Switzerland where these are official languages.

You can find a link to the GAC conclusions on relations with the EFTA members, but only if you look for older news (where the language changes to German). I would expect the EU representations to post these conclusions visibly and permanently on the front page in Iceland, Norway and Switzerland-Liechtenstein.

There is a thematic page (in German): Das Fürstentum Liechtenstein und die EU. The page includes a link to the Europe Day celebration speech by the head of government, Dr Klaus Tschütscher, in Vaduz (11 May 2010).

On the Liechtenstein page I would have hoped for more information about how Schengen implementation advances as well as current aims of the European Union and issues in other policy areas.

Ideally, the new text should offer quality information on the issues the GAC conclusions dealt with in general and sometimes vague terms.



Ralf Grahn



P.S. While the EU institutions still seem to be sleepwalking, Jean Quatremer on Coulisses de Bruxelles takes a stand against the actions by the Fidesz government in Hungary to quell free speech and fundamental freedoms.

Prime minister Viktor Orbán is one of the vice-presidents of the European People's party, so the EPP has a special responsibility to act quickly and decisively to safeguard the founding values of the European Union and protect its own image.

Principality of Liechtenstein views the European Union

Recently the General Affairs Council (GAC) of the European Union adopted conclusions about the relations between the EU and the four EFTA countries: the three members of the European Economic Area (EEA) Iceland, Liechtenstein and Norway, as well as fourth EFTA member Switzerland, which remains outside the EEA:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010

We took a first look at Liechtenstein in the blog post 'EU relations with Liechtenstein (general conclusions)' (22 December 2010), presenting the general remarks including Liechtenstein, but addressed at the EEA or EFTA states.

Since Liechtenstein and its relations with the European Union are not widely known, we are going to look at some materials about and from this fascinating Principality.


Liechtenstein background

Here is a link to the Wikipedia article about the Principality of Liechtenstein (German: Fürstentum Liechtenstein), a country with more registered companies than citizens.

Digital Liechtenstein offers you added opportunities to look at interesting topics in English, German, French or Chinese.


EEA Fact Sheet

The EEA Coordination Unit offers readers a recently updated brochure in English: European Economic Area (EEA) Fact Sheet (November 2010; 12 pages).


EEA population

A brochure detail: On the authority of the CIA World Factbook the brochure starts by stating that the EEA is a single market of about 496 million consumers (as per July 2010).

Why not check the facts instead?

According to Eurostat we have the following population figures for 2010:

EU 27 501090520
Iceland 317630
Liechtenstein 35894
Norway 4858199

This adds up to an internal market of about 506 million people. If we equate inhabitant with consumer (as I suppose the intention has been), the population of the European Economic Area exceeds the number in the folder by ten million.


EEA Coordination Unit

There is an explanatory web page in English about the EEA Coordination Unit, with a link to the active pages in German of Stabsstelle EWR.


Embassy of Liechtenstein in Brussels

Another important player is the Embassy of Liechtenstein in Brussels. It serves as a mission to the European Union and handles EEA and EFTA affairs (besides functioning as the Embassy to Belgium).


Detailed EEA report

There is a fresh government position paper, with a detailed evaluation of Liechtenstein's 15 years in the European Economic Area (23 March 2010), in German:

Bericht und Antrag der Regierung an den Landtag des Fürstentums Liechtenstein betreffend 15 Jahre Mitgliedschaft des Fürstentums Liechtenstein im Europäischen Wirtschaftsraum (EWR) Nr. 17/2010 (306 pages)

In a nutshell, the report depicted the 15 year EEA membership as a Liechtensteinian success story.

On 21 April 2010 the Liechtenstein Parliament (Landtag) took notice of the annual report of the EEA/EFTA parliamentary delegation as well as the EEA report from the government (Jahresbericht 2009 der Delegation für die EWR/EFTA-Parlamentarierkomitees Information; 15 Jahre Mitgliedschaft des Fürstentums Liechtenstein im Europäischen Wirtschaftsraum (EWR), (Nr. 17/2010) Landtagsprotokolle 21 April 2010).

The discussion gave me the impression that the positive assessment of EEA membership is shared by the Landtag, even if coordination with neighbouring Switzerland outside the European Economic Area requires constant attention.

***

The next blog post in this series is going to change perspective, from the Liechtensteinian viewpoint to EU materials and resources.



Ralf Grahn



P.S. Mathew Lowry wrote a timely blog post called 'Censoring Hungarian blogs during the Hungarian EU Presidency' spreading the word about the ignominious media law and the Twitter Hashatag #NoToHuEU.

The presidencies of the Council of the European Union were supposed to be about team spirit and presidency trios. It worked during the Belgian presidency @EuTrioBe on Twitter. Why did the government of Hungary discard this manifestation of European team spirit? I hope that the hashtag #EuTrioHu will keep the idea alive, despite the nationalistic Twitter address @HU_Presidency by a government badly discredited even before the presidency starts.

EU view of EFTA and EEA country Iceland (not excluding controversy)

Iceland has been getting a lot of attention in Brussels lately. The EU Commission presented its progress report and conclusions regarding the process of Iceland to become a member of the European Union:

Grahnlaw Suomi Finland: EU enlargement: Iceland (20 December 2010)

The General Affairs Council (GAC) adopted conclusions on enlargement, including Iceland, on 14 December 2010:

Grahnlaw: EU Council on enlargement: Iceland (20 December 2010)

But the same day, the General Affairs Council also adopted conclusions about the relations between the European Union and the members of the European Free Trade Association (EFTA), as described on Grahnblawg (in Swedish): EU-relationerna med Norge (19 December 2010).

Naturally Iceland, an EFTA member and a participant in the European Economic Area (EEA) was dealt with in these GAC conclusions as well:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010


EEA remarks

The Council was satisfied with the contributions from Iceland, Liechtenstein and especially Norway to poorer EU member states (point 2):

The Council appreciates the financial contributions of the EFTA countries to the economic and social cohesion in the European Economic Area (EEA). Norway, Liechtenstein and Iceland (the "EEA EFTA States") recently committed themselves to a substantial increase of their continued contributions.

In practice the EEA states pay for access to the internal market, although it differs somewhat from the membership contributions from EU countries.

The Council was happy to note the excellent transposition record of the EEA EFTA states (point 3):

Iceland, Liechtenstein and Norway are integrated in the internal market through the EEA Agreement of 1994. This Agreement functions properly so long as all Contracting Parties incorporate the full body of the relevant EU acquis relating to the internal market into their national law. The Council welcomes that the EEA countries have demonstrated an excellent record of proper and regular incorporation of the acquis into their own legislation and encourages them to maintain this good record to ensure the continued homogeneity of the internal market.

The GAC remarks about homogenous implementation of EU law and the smooth functioning of the special institutions are directed at all EFTA countries (point 7):

Though EU relations with the EFTA countries were extended over the years to many areas not covered by the internal market, these relations are mainly based on the progressive integration of the EFTA countries' economies into the EU internal market. In view of the need for a level playing field for all economic operators of the parties concerned and the continued development of internal market relevant acquis, the EU and the EFTA States should ensure homogeneity in the implementation of the acquis and the good functioning of the institutions.

Icelandic accession negotiations

Officially, Iceland conducts negotiations to become a member of the European Union, which puts it in a different category from the other EEA states, Liechtenstein and Norway, with the remaining EFTA member, non-EEA Switzerland even farther apart. The GAC stated the position of Iceland (point 5):

The Council welcomes the opening, in July 2010, of accession negotiations with Iceland, which conserves its status as EEA EFTA State while negotiations are ongoing.

Specifically Iceland

The GAC conclusions contained a number of points specifically related to the EU's relationship with Iceland (10-16):

ICELAND

10. The Council welcomes the launching of accession negotiations with Iceland in July 2010, takes note of the findings presented by the Commission on 9 November 2010 to the Council and the European Parliament in its Progress Report on Iceland and refers to the Council conclusions on enlargement - Iceland - to be adopted by the General Affairs Council on 14 December 2010.

11. The opening of an EU delegation in Reykjavik in 2010 will contribute to the rapprochement of Iceland and the EU in this dynamic phase of relations.

12. The Council appreciates the solidarity shown by the Icelandic people when committing to renew their contribution to the reduction of social and economic disparities in the EEA for the period 2009-2014.

13. While accession negotiations are ongoing, the EEA Agreement remains the key contractual basis for EU-Iceland relations. In the past two years, Iceland continued to be an active and constructive partner in that framework as well as in the Schengen area, with a good record of implementation of the evolving EU acquis. The Council encourages Iceland to maintain the same good record also in the future.

14. The Council welcomes the good cooperation with Iceland in many areas of common interest, in particular on environmental and energy issues, as well as in the field of Common Foreign and Security Policy, with Iceland frequently supporting EU declarations and voting together with the EU in the UN. The Council is looking forward to further strengthening cooperation with Iceland on issues such as Arctic policy, the Northern Dimension, fisheries, renewable energy and climate change.

15. Regarding fisheries, the Council continues to call for a constructive approach of all Coastal States (EU, Norway, Faeroe Islands and Iceland) on the joint management of mackerel fisheries, and encourages Iceland to resume negotiations on this issue, in particular as regards a reasonable long term sustainable quota sharing arrangement, taking into account the track records of all relevant actors.

16. The Council welcomes Iceland's continued commitment to move toward economic stabilization and to address all issues deriving from the 2008 banking collapse. In this context, the Council recalls the need for Iceland to address existing obligations, such as those identified by the EFTA Surveillance Authority under the EEA Agreement, as well as weaknesses in the area of financial services, identified in the Opinion of the Commission on Iceland's application for EU-membership.

”Mackerel War”

As we saw, the last two points referred to controversial issues. In point 15 the GAC called for the resumption of negotiations in the ”Mackerel War”. Se for instance:

FISHupdate.com: Iceland and Faroes set to announce new mackerel quotas (20 December 2010)

FISHupdate.com: Lochhead comments on Iceland's 'irresponsible' mackerel quota action (20 December 2010)

BBC Scotland: Scottish fishermen condemn Iceland mackerel quota move (18 December 2010)

Fishnewseu.com: Iceland warns that Norway and EU will overfish mackerel next year (20 December 2010)

Icelandic Ministry of Fisheries and Agriculture, press release: Decision on Iceland's Share in Mackerel Fisheries in 2011 (20 December 2010)


Icesave / Landsbanki

The catastrophic fallout from the Icelandic banking collapse has haunted the people of Iceland and its government, but also relations with the Netherlands and the United Kingdom (point 16). See for instance:

Reuters: Iceland finance minister presents new Icesave bill to parliament (16 December 2010)

Eygló Svala Arnarsdóttir in Iceland Review Online: Icesave: Not my headache (ESA) (17 December 2010)

Bloomberg: Grimsson Says He'll Decide by February on Icesave Referendum (20 December 2010)



Ralf Grahn



P.S. In the blog post Not losing sight of the basics, Mathew Lowry calls on the EU institutions to do some serious work on Europa and other websites to serve a huge array of audiences. Read the discussion as well.

Can’t live with them, can’t live without them: European Union and Switzerland

The relations between landlocked Switzerland and the surrounding European Union are special in many respects. Trade, transport, free movement including migration and cross-border work, banking (secrecy) and tax (evasion) are highly visible ingredients. Here are a few background notes in the form of earlier blog posts and an evaluation of what the EU institutions currently offer interested businesses and citizens.

Grahnlaw blog posts

Internal market: Switzerland at the heart of Europe? (2 February 2010)

Switzerland is a member of the European Free Trade Association (EFTA): EFTA member Switzerland outside EEA and EU (3 February 2010).

Switzerland has previously rejected membership in the European Union (EU) as well as in the European Economic Area (EEA), which extends the internal market to Iceland, Liechtenstein and Norway. Switzerland has concluded a host of bilateral agreements with the EU: EU and Switzerland: Bilateral treaties and challenges (5 February 2010).

Tax matters for Switzerland and the European Union (6 February 2010)

Hot tax row between Germany and Switzerland (7 February 2010)

EU against tax fraud (8 February 2010)

EEAS

Switzerland is not found among the top items on the front page of the European External Action Service (EEAS) this morning.

The EEAS pages are clear and easy to navigate. It is easy to find the country page for Switzerland, with a few basic facts and links to further sources.

The EU delegation for Switzerland and Liechtenstein in Bern offers additional information about the bilateral relations, in German, French and Italian.

The central EEAS pages are short on information about the important Schengen agreement, implemented since December 2008 (admittedly home affairs). They are also vague with regard to political perspectives and aspirations for the future relationship generally, although there are links to two presidential public appearances during the last months, one by Herman Van Rompuy and the latest one by José Manuel Barroso.

Bilateral treaties

Formally, the Treaties Office of the EU today lists 179 bilateral treaties with Switzerland, although in current discussions about 120 treaties is often mentioned as the existing (real) number.

If we look at fresh Council document references, matters concerning Schengen implementation seem to be the run of the mill cooperation issues between EU and Swiss officials (as well as with those from Iceland, Norway and Liechtenstein).

More informative from a general point of view is the European Parliament resolution of 7 September 2010 on EEA-Switzerland: Obstacles with regard to the full implementation of the internal market P7_TA-PROV(2010)0300. It is based on an own-initiative report, procedure file INI/2009/2176.

Comment

My search was not exhaustive or methodical enough to unearth everything, but an attempt to find materials readily available to assess were the relations are heading. Despite the Barroso and Van Rompuy speeches I did not go into in this blog post, with regard to my objective the European Parliament came out on top, because it actually discusses problems and challenges from an important and a fairly broad perspective: trade and the free movement of services and persons (internal market).


Ralf Grahn


P.S. Presseurop is an important resource for people interested in European affairs. It presents itself in the following manner:

Presseurop.eu is a Paris based news website publishing a daily selection of articles chosen from more than 200 international news titles, then translated into ten languages - English, German, French, Spanish, Romanian, Italian, Portuguese, Dutch, Polish and Czech.

The multilingual blog aggregator Bloggingportal.eu brings European online discussions to a screen in front of you, from 675 EU related blogs. A few more voluntary editors are needed for tagging and selecting posts from the listed Euroblogs.

EFTA member Switzerland outside EEA and EU

The relationship between Switzerland and the European Union is of interest to governments, businesses and residents, including expats.


Yesterday, in the Grahnlaw blog post Internal market: Switzerland at the heart of Europe? we highlighted the briefing paper commissioned by the European Parliament on the complex relationship between the European Union and Switzerland with regard to the internal market:



Christa Tobler, Jeroen Hardenbol & Balázs Mellár: Internal Market beyond the EU: EEA and Switzerland (PE 429.993; January 2010; 65 pages).

In this blog post we present references to some basic materials on Switzerland’s relations with the rest of Europe.



Switzerland is a member of the European Free Trade Association (EFTA), together with Iceland, Liechtenstein and Norway. However, unlike the three others, Switzerland is not a part of the European Economic Area (EEA).



For a fairly updated general presentation of EFTA, see This is EFTA 2009 (January 2009; 36 pages).



The latest annual update is the 48th Annual Report of the European Free Trade Association 2008 (March 2009; 52 pages).



In English and with further links, the Swiss State Secretariat for Economic Affairs SECO offers general information about EFTA, the European Policy of Switzerland and Bilateral Agreements Switzerland – European Union.



Through the web page Bilateral agreements Switzerland-EU you can access a brochure from August 2009 with further information: Bilateral agreements Switzerland-EU (44 pages)



There is also a page with links to Other files Switzerland-EU.




For a more political Swiss view on why Switzerland remains outside both the European Union (EU) and the European Economic Area (EEA), you can read the article by Werner Wüthrich: The Future Belongs to Lean Organizations like EFTA (Current Concerns No 1, January 2010).




Ralf Grahn







P.S. Sooner or later, I believe, the European Union has to become more openly and directly party political in order to be understood and approved by EU citizens.

Heralding this future of active citizens are the bilingual mirror blogs by a French PES activist: Eurosocialist in English and Eurosocialiste in French. Her motto is: A socialist view on Europe, a European view on socialism.

Eurosocialist/Eurosocialiste are listed among 522 great Euroblogs (at the latest count) on growing multilingual Bloggingportal.eu, your useful one-stop-shop for fact, opinion and gossip on European affairs, i.a. politics, more than thirty policy areas, communication, economics, finance, business, civil society and law.

At the same time Euroblogs are an agreeable way to brush up one’s skills in foreign languages.

If you are interested in the EU or the euroblogosphere, you can also subscribe to the RSS feed for new blog posts appearing on Bloggingportal.eu.

By the way, I also discuss European issues in Finnish on Eurooppaoikeus and in Swedish on Grahnblawg.

Internal market: Switzerland at the heart of Europe?

German government frets over morality of paying tax informer, reports Deutsche Welle (2 February 2010). Should Germany pay 2.5 million euros to buy stolen bank data of 1,500 people suspected of tax evasion?



Geographically Switzerland is at the heart of Europe, with four EU neighbours even the European Union, but the Swiss Confederation of 7.7 million inhabitants is an exception in its relations with the European Union. It is an EFTA member, but (formally) not even a part of the European Economic Area (EEA). The news item above reminded us of long-standing unresolved issues between the Swiss and the EU member states.



The European Parliament has commissioned a study on the complex bilateral relationship between the European Union and Switzerland with regard to the internal market:

Christa Tobler, Jeroen Hardenbol & Balázs Mellár: Internal Market beyond the EU: EEA and Switzerland (PE 429.993; January 2010; 65 pages).



In this post we are content to indicate the contents, but I expect to return to the issues in blog posts on my euroblogs in English, Finnish and Swedish:


CONTENTS
Contents 3

EXECUTIVE SUMMARY 6

1. INTRODUCTION 8

2. EU RELATIONS WITH SWITZERLAND AND THE EEA STATES 10
2.1. Relevant agreements and the existing legal framework between Switzerland and the EU 10
2.2. EU-EEA relations 12

3. THE FUNCTIONING OF AN EXTENDED INTERNAL MARKET WITH SWITZERLAND 15
3.1. The material scope of bilateral law 15
3.1.1. Free movement of goods 15
3.1.2. Free movement of persons 16
3.1.3. Free movement of services 17
3.1.4. Free movement of capital 17
3.2. The temporal scope of bilateral law 18
3.2.1. The status of primary and secondary law 18
3.2.2. Temporal limits in relation to the interpretation of bilateral law 19
3.2.3. Entry into force of the Agreement on the free movement of persons in relation to the EU Member States that joined the Union in 2004 and 2007 21
3.3. The substantive meaning of free movement 22
3.3.1. General remarks 22
3.3.2. Free movement of goods under the FTA 22
3.3.3. Free movement of persons and services under the FMPA 24
3.4. Enforcement 29

4. THE FUNCTIONING OF AN EXTENDED INTERNAL MARKET WITH THE EEA STATES 30

5. AN EXTENDED INTERNAL MARKET – CHALLENGES AND FUTURE PROSPECTS 32
5.1. The EEA and Switzerland: Two different models of integration 32
5.2. The future EU relations with Switzerland 32
5.2.1. Challenges 32
5.2.2. An outlook on Swiss-EU policy 36
5.3. The future EU relations with the EEA States 39
5.3.1. Challenges 39

6. CONCLUSIONS 41
6.1. The EU and Switzerland: A legal framework of bilateral agreements 41
6.2. The EU and the EEA EFTA Countries: A dynamic system of EU law incorporation 42
6.3. The impact of the Lisbon Treaty 43

7. RECOMMENDATIONS 44

BIBLIOGRAPHY 46

Annexes 49
Annex I. List of Interviewees 49
Annex II: Selected publications by Prof. Dr. Christa Tobler 50
Annex III. Overview of EU - Swiss bilateral agreements 52
Annex IV. Comparison between EU law, EEA law and bilateral law 53
Annex V: The Internal Market charts 54





Ralf Grahn







P.S. Cross-border communication is a necessity in the European Union and beyond, with scrutiny by active citizens. At the same time Euroblogs are an agreeable way to brush up one’s skills in foreign languages.

European Union Law in English and its sister blog in Bulgarian are written by the lawyer Vihar Georgiev, who serves his readers with quick updates on new legal acts, decisions and other developments in EU law.

European Union Law is listed among 522 (at the latest count) great Euroblogs on growing multilingual Bloggingportal.eu, your useful one-stop-shop for fact, opinion and gossip on European affairs, i.a. politics, more than thirty policy areas, communication, economics, finance, business, civil society and law.

If you are interested in the EU or the euroblogosphere, you can also subscribe to the RSS feed for new blog posts appearing on Bloggingportal.eu.

By the way, I also discuss European issues in Finnish on Eurooppaoikeus and in Swedish on Grahnblawg.

EU State Aid Scoreboard December 2009

Two previous blog posts presented the Lisbon Treaty provisions on state aid: State aid in EU Lisbon Treaty: Prohibition and derogations (12 December 2009) and State aid in EU Lisbon Treaty: Procedures and legislation (13 December 2009).

The financial meltdown and the economic recession led to massive monetary and budgetary counter-measures. Protectionist urges, such as the use of the doping of state aid, sorely tested the EU Commission’s mandate to maintain fair competition in the internal market.

We now turn to the Commission’s take on factual developments and administrative reforms during this difficult phase. The Commission published a report a few days ago:



Report from the Commission: State Aid Scoreboard ─ Report on State aid granted by the EU Member States ─ Autumn 2009 Update; Brussels, 7.12.2009 COM (2009) 661 final (15 pages).


The summary report focuses on key facts, conclusions, trends and patterns with regard to State aid granted by EU member states in 2008, as well as key policy developments in the context of state aid control. The report is available in English, French and German.


Financial crisis


The Commission notes that the overall level of State aid almost quintupled in 2008 compared to 2007, from less than 0.5 per cent to 2.2 per cent of GDP, almost exclusively as a result of crisis aid to the financial sector.

Crisis aid to the real economy is not covered by the report. It started to be implemented by member states only in 2009 through the Temporary Framework (consolidated version OJEU 7.4.2009 C 83; as further amended by OJEU 31.10.2009 C 261/2).

The Commission’s self-assessment is optimistic:

“The EuropeanCommission's State aid policy was one of the key factors ensuring that this – overall successful – rescue process has been achieved in a coordinated way. It allowed swift implementation of unprecedented support measures and ensured at the same time that the Single Market was kept intact.”

The Commission supports its conclusion by distinguishing between the long term trend to reduce state aid (goal of “less and better targeted aid”) and the sudden surge, caused by crisis measures.

The Commission describes its actions to provide guidelines for crisis aid to the banking sector since the autumn of 2008, striving to maintain a level playing-field between member states as well as supported and unsupported banks.

The enormity of the crisis measures as a whole is illustrated by the following quote (page 9):

“The total maximum volume of crisis measures approved by the Commission between October 2008 and October 2009 amounted to around € 3,632 billion, corresponding to 29% of the EU-27 GDP.”

“Less and better targeted aid”


Long term, aid has increasingly been targeted towards less distorting, horizontal objectives, such as research, development and innovation, the environment, small and medium-sized enterprises (SMEs), employment creation, training and regional economic development.



The Commission is already looking ahead, as shown by its Communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules, published OJEU 19.8.2009 C 195.


The Commission offers an overview of the progress since June towards simplification of state aid rules, through less and better targeted state aid; a refined economic approach; more effective procedures, better enforcement, higher predictability and enhanced transparency; a shared responsibility between the Commission and member states.

The Commission has exclusive competence to evaluate all state aid with the treaty. The member states have to give advance notice of all aid measures not covered by the “de minimis” Regulation or a block exemption. The General Block Exemption Regulation (GBER) is of special importance; Commission Regulation (EC) No 800/2008, published OJEU 9.8.2008 L 214/3.

Outside these exemptions, member states notify both general aid schemes and individual (“ad hoc”) aid measures.

The Commission’s state aid control is now based on a "3–stream system": block exemption (and de minimis), standard assessment and detailed assessment.

From September 2009 the Commission introduced a simplified notification procedure, published OEJU 16.6.2009 C 136/3.

There has been clear progress on the recovery of unlawful state aid. The percentage of illegal and incompatible aid still to be recovered fell from 75% at the end of 2004 to around 9% at 30 June 2009.

In the area of cooperation with national authorities, the Commission reminds the readers of its recent Notice on the enforcement of State aid law by national courts, published OJEU 9.4.2009 C 85/1.



Staff working document



The Autumn 2009 State Aid Scoreboard is accompanied by the more detailed Commission Staff Working Document Facts and figures on State aid in the EU Member States SEC (2009) 1638 (78 pages). The working document is available in English.


EFTA


The Commission’s state aid update mentions that the EFTA Surveillance Authority (ESA) publishes an annual scoreboard on the volume of State aid granted in Iceland, Liechtenstein and Norway.



The EFTA Surveillance Authority’s web pages on State aid offer an overview of the state aid rules in the European Economic Area (EEA) and ESA’s role with regard to Iceland, Liechtenstein and Norway. The legal framework, substantive rules, procedural rules and state aid guidelines are presented on separate web pages.

ESA publishes a newsletter State aid e-news with summaries of its activities, decisions and other issues of interest.

The State aid register contains the full text of the state aid decisions adopted by ESA since 2000.

There is a link to the notification portal and the notification forms.

According to the Complaints page, ESA welcomes information from third parties about potential infringements of state aid rules, and there is practical information for interested parties.




Ralf Grahn



P.S. Growing, multilingual Bloggingportal.eu now aggregates 494 euroblogs. Associations, networks, businesses and individual bloggers offer fact, opinion and gossip on EU affairs and European themes at Bloggingportal.eu, our “village well”.

European Union: Modernising the Lugano Convention

The European Community is about to ratify the Convention replacing the Lugano Convention. The Official Journal of the European Union (OJEU) 10.6.2009 L 147 contains the following relevant headlines:





COUNCIL DECISION 2009/430/EC of 27 November 2008 concerning the conclusion of the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.



CONVENTION on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (text).



CORRIGENDA Procès-verbal of rectification to the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, signed at Lugano on 30 October 2007 (Official Journal of the European Union L 339 of 21 December 2007).


***



In the light of the parallelism between the Brussels and the Lugano Convention regimes on jurisdiction and on recognition and enforcement of judgments in civil and commercial matters, the rules of the Lugano Convention are aligned with the rules of Regulation (EC) No 44/2001 in order to achieve the same level of circulation of judgments between the EU Member States and the EFTA States concerned.



Ralf Grahn

European Economic Area (EEA) in practice

The European Economic Area (EEA) extends the four freedoms of the European Community to the EFTA states Iceland, Liechtenstein and Norway, giving them access to an internal market of 30 states and almost 500 million people. Agriculture and fisheries are excluded, but the EFTA EEA countries cooperate in other policy areas as well.

The basic document is the Agreement on the European Economic Area. More information is available on the EFTA web pages about the EEA Agreement.



Quick overviews are offered by a number of EEA fact sheets.


***

Technical adaptation

The European Community (European Union) legislation in the relevant areas is constantly evolving. The purpose of this blog post is limited: to show how “technical” new provisions are adopted by the non-EU members. Article 98 of the EEA Agreement spells out the mechanism for amending the Annexes to the Agreement, as well as the Protocols mentioned:

Article 98

The Annexes to this Agreement and Protocols 1 to 7, 9 to 11, 19 to 27, 30 to 32, 37, 39, 41 and 47, as appropriate, may be amended by a decision of the EEA Joint Committee in accordance with Articles 93 (2), 99, 100, 102 and 103.



***

In practice

The Official Journal of the European Union (OJEU) 28.5.2009 L 130 offers examples of recent Decisions by the EEA Joint Committee, numbers 21 to 39/2009 amending Annexes.


Joint Committee Decision 40/2009 amends Protocol 31 on cooperation in specific fields outside the four freedoms.



Ralf Grahn

EU: Free movement Switzerland (Bulgaria & Romania)

The Swiss Confederation is the one EFTA country, which is not a member of the European Economic Area (EEA) ─ as are Iceland, Liechtenstein and Norway ─ so closer relations with the European Union and its member states have been built gradually on the basis of bilateral (and plurilateral) agreements.

The Wikipedia overview article Switzerland and the European Union (latest update 19 May 2009) describes the Swiss Confederation as a virtual member of the EEA or even the EU. (Despite the so called Guillotine Clause, given the importance of referendums in the Swiss constitutional system, the “even the EU” could be seen as an exaggeration.)




***


Accession and free movement

From the point of view of the European Union, the extension of free movement to Switzerland with regard to the latest EU entrants Bulgaria and Romania is now confirmed by the official publication of the relevant documents.


Council Decision

The first document is the formal Council Decision 2009/392/EC of 27 November 2008 on the conclusion, on behalf of the European Community and its Member States, of a Protocol to the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons regarding the participation, as contracting parties of the Republic of Bulgaria and Romania pursuant to their accession to the European Union, published in the Official Journal of the European Union (OJEU) 20.5.2009 L 124/51.




***

Protocol

The second document is the Protocol to the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons, regarding the participation, as contracting parties of the Republic of Bulgaria and Romania pursuant to their accession to the European Union, published OJEU 20.5.2009 L 124/53.



The Protocol, to be ratified, contains the substantial provisions, including the transitional clauses (limitations).



Ralf Grahn