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Sunday, July 13, 2008

Economy in May, 2008

In this edition:
  1. London clears way for temporary workers' rights
  2. Mixed reactions to proposed EU farm sector reform
  3. Gaz de France targeted in EU antitrust probe
  4. Spotlight turns to gas in EU energy battle
  5. After 'peak oil', world now faces 'peak water'
My comment: These articles are very interesting ones, all of them. Especially the second and the last! I think all the 5 give very good idea of the state of European politics today. Not very good state, unfortunately. But that's what happens when people loose their goal... My comments are below...

London clears way for temporary workers' rights

21 May 2008

Social partners and the UK Government have reached an agreement to grant equal treatment to workers employed via temporary work agencies, clearing the way for an EU directive on the issue, which could be launched as early as next June.

The agreement reached among British employers' confederation CBI and the country's Trade Union Confederation (TUC) concerns the following points:

  • After 12 weeks in any given job, agency workers will be entitled to treatment equal to permanent workers'.
  • Concretely this means that at least the basic working and employment conditions should be the same as if the workers had been recruited directly by the company they are working for to occupy the same job.
  • Equal treatment does not cover occupational social security schemes.

Both sides agree that the deal achieves fairer treatment for agency workers while not removing the flexibility that agency work can offer both employers and workers.

The UK governement will start a consultation with social partners on implementing measures, such as dispute resolution mechanisms, sectoral agreements and anti-avoidance measures.

My comment: Notice how equal treatment doesn't cover social security schemes. Then what exactly is the benefit? They take you, use you and then throw you out. Just maybe now, they are going to pay you more. I can't say I'm delighted by this, but this is a step in the right direction. And maybe now, UK conservatives will finally figure out how cheap exactly is the Eastern European work force they so generously used and abused.

Mixed reactions to proposed EU farm sector reform

21 May 2008

Fewer production-linked payments, more monies for rural development and a scrapping of a requirement to keep a certain percentage of land out of production are part of the Commission's plans to make the EU's agricultural regime more responsive to market forces.

In addition to cuts in intervention prices for several sectors, the reforms also featured a shift or so-called 'modulation' in monies from the first "pillar" of the CAP (direct aids and market support) to its "second pillar", rural development. This measure was presented as an instrument to "green" the CAP, which accounts for over 40% of the EU budget.

The proposed reforms are "all about freeing our farmers to meet growing demand and respond quickly to what the market is telling them," EU Agriculture and Rural Development Commissioner Mariann Fischer Boel said in a 20 May press statement announcing the plans.

Dubbed the 'Health Check', the proposals build on an earlier Commission communication published on 20 November 2007 and are part of an ongoing process to modernise and simplify the EU's agricultural regime, which has been heavily criticised for creating harmful distortions in European and global agricultural markets.

A further decoupling of production from payments is introduced as a main feature of the proposals, although suckler cow, goat and sheep premia will continue to benefit from exemptions. In parallel, 8% of current direct aid to farmers should be 'modulated', or shifted, towards the EU's rural development budget by 2012.

"Funding obtained this way could be used by member states to reinforce programmes in the fields of climate change, renewable energy, water management and biodiversity," according to the Commission.

Meanwhile 'cross compliance' obligations, under which farmers who do not adhere to environmental guidelines risk reductions to subsidies, should be simplified, the EU executive said.

Existing intervention mechanisms, whereby public funds are used to buy up any surplus production, should also be eliminated or reduced for a number of products, notably durum wheat, rice and pig meat, according to the proposal.

In addition, existing requirements to keep 10% of arable land out of production - the so-called 'set-aside' - should be abolished. Likewise milk quotas are to be phased out by 2015, following several years of continued quota increases in order to ensure milk producers a 'soft landing'.

The reform plans, to be discussed by the EU's agriculture ministers (who hope to reach a deal before the end of the year), are being put forward in a context of surging global food prices (EurActiv 20/05/08).

The Greens/EFA Group, on the other hand, slammed the Health Check as "weak", labelling it "the wrong therapy".

"The scandalous imbalance in public support at the disadvantage of the vast majority of European farmers persists" and the dossier should be treated under the codecision procedure in order to give Parliament a greater say, the Greens said in a statement. Currently, Parliament only has a consultative role, with the Commission and member states having the final say.

My comment: CAP is the greatest non-sense I've heard. I'm not particular fan of free markets for several reasons, mostly because they can lead to global crisis in case of regional disaster-for example if all the corn is made in Brazil and something happen to Brazil, the whole world is staying without corn. Sure, corn isn't essential, but it's obvious some regions are better for farming than others and if a country isn't self-sustainable, it can be used in very ugly ways against it. But also, I don't like 40% for agriculture. I want a high-tech Europe. I think farming should be supported but only as subsidies for production and limited ones. And also that individual countries should be supported to be self-sustainable but that is the maximum support they should get. If they want to export, let them do it on their own expense. This isn't to hurt farming, but instead to give money to all farmers, not only to French ones.

But I must say I'm strongly against the removing of the 10% non-arable land limit. That means decreasing the biodiversity and basically, turning all of France into farms. I'm glad at least the quotas are about to be off. It was high time!

Gaz de France targeted in EU antitrust probe

23 May 2008

EU regulators launched a formal investigation against GDF on Thursday (22 May) just as Brussels and Paris are engaged in intense negotiations over the liberalisation of energy markets.

In a statement, the European Commission's competition department said it suspects the state-owned gas company of abusing its dominant market position by restricting access to the downstream gas supply market in France.

The case, which is open-ended, was opened following inspections carried out in 2006 at GDF premises, the Commission indicated (EurActiv 29/06/06).

Under particular scrutiny are "a combination of long-term reservation of transport capacity and a network of import agreements" that the Commission believes are stifling competition.

EU regulators also suspect GDF of engaging in chronic "underinvestment in import infrastructure capacity" in order to keep a stronghold on its home market and prevent new competitors from entering.

The Commission's investigation comes as a time when Paris and Brussels are engaged in an intense battle over energy liberalisation. France is resisting the EU executive's proposal, presented in September last year, because it would force gas and electricity firms such as GDF to break-up their energy supply and transmission businesses, a process known as 'ownership unbundling'.

The battle shifted to the gas sector earlier this week when the European Parliament’s Industry Committee (ITRE) examined a proposal for the gas sector on Monday (EurActiv 20/05/08).

In a surprise move, MEPs rejected the Commission’s unbundling plans but showed more interest in a compromise text, tabled a few days earlier by the Commission, which sought to allay French and German concerns. source

My comment: I'm kind of sick talking about this so I won't say much. I just think France and Germany should understand it's not all about them anymore and that the interests of EU can sometimes require some efforts from their sides.

Spotlight turns to gas in EU energy battle

20 May 2008

The battle over energy liberalisation shifted to the gas sector yesterday (19 May) when Parliament's industry committee threw its weight behind France and Germany in their bid to prevent the forced break-up of large integrated gas groups.

MEPs on the Parliament's industry committee voted on Monday (19 May) to reject a proposed gas directive that would force groups such as Gaz de France and RWE Gas in Germany to sell off their pipelines and storage assets in a bid to force more competition onto EU markets.

The vote represents a victory for France, Germany and six other member states which have together proposed an alternative to the Commission's controversial proposal to break up energy utilities, a process known as 'ownership unbundling'.

The committee backed a compromise text similar to the Franco-German alternative on Monday but it remains to be seen whether the full Assembly will back it again in a plenary vote scheduled on 16-19 June.

Speaking after the vote, Angelika Niebler (EPP-ED, Germany), chairwoman of the Parliament's industry committee, expressed her satisfaction with the outcome. "I am happy because we have a third-way option," she said, according to Bloomberg.

Monday's vote also indicates that a broader compromise package will eventually need to be found for both gas and electricity as the Parliament appears to be heavily divided over the issue.

Indeed, in a vote on electricity earlier in May, MEPs on the industry committee decided on that occasion to back the Commission's proposals to break up energy firms (EurActiv 07/05/08).

But faced with strong resistance from France and Germany, the Commission last week tabled a compromise proposalword for the gas sector only, saying it would seek a solution for electricity at a later stage (EurActiv 16/05/08).

It is this compromise proposal that the industry committee supported in its vote on Monday, although it left some of the details for decision later.


My comment: Same as above, I'm so sick of this games. I want to see Europe act as a whole. Finally!

After 'peak oil', world now faces 'peak water'

27 May 2008

The challenge posed by current high oil prices is nothing compared to what lies ahead amid dwindling supply and growing demand for a far more basic commodity - water, warns a Massachusetts Institute of Technology (MIT) professor.

"We once assumed that water is free, air is free and power is cheap. The latter is clearly no longer true and we are increasingly realising the truth about water," arguedexternal MIT Sloan School of Management Professor Sarah Slaughter in a May 2008 paper.

Whereas oil prices are breaking all time records, leading many families to face budget challenges, "few have to drive to survive," while water is "absolutely critical for personal and public health, which is why governments have always subsidised its cost," explained Slaughter.

She notes that people in the developed world are taking free quality water for granted. According to her, consumers do not recognise the "enormous expense" to the public sector of building, maintaining and operating water systems and only directly pay "a fraction of the real cost of the clean drinking water" coming out of their taps.

Some 97% of world's water resources are in the oceans, but for it to be used for drinking or agriculture the salt must be removed, which in turn requires a lot of energy.

Meanwhile, the price of water is increasing.

The solution to the looming water crisis could, according to her, be provided by innovative companies who seize water as "the next opportunity for smart innovation". She cited a particular ultraviolet treatment technology already being used to deliver clean drinking water to various communities.

As for the EU, water crept up the bloc's political agenda last summer following the serious drought that swept across Europe. The event forced the Europan Commission to react and publish a CommunicationPdf external on water scarcity and drought, which proposes higher water prices to deter overuse. source

My comment: Electricity, water, air. Now that the prices of electricity and the water are going up, I'm starting to worry about the last component- the air. Is it going to become non-free also? Or is this the price behind Global Warming? I'm just wondering...

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