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Sunday, September 21, 2008

September economics news,2008

In today's edition:
  1. Pension crisis looms as over-65s to double by 2060
  2. SMEs hit out at cost of EU food labelling proposals
  3. IEA urges EU to fully liberalise energy markets
  4. Bulgaria starts work on second nuclear plant
  5. Study: New EU members work above European average

Pension crisis looms as over-65s to double by 2060

27 August 2008

From 2015 onwards, deaths would outnumber births in the EU so that, by 2060, one in three Europeans will be aged over 65, putting a huge burden on the economy and public finances, the Commission warned yesterday (26 August).

With people living longer and "persistently low" fertility rates across Europe, natural population growth would simply stop as of 2015 and, as of 2035, net migration flows would be insufficient to counterbalance the negative natural change, a report by the EU's statistical office Eurostat predicts.

Based on current trends, today's ratio of four working-age people per pensioner would be reduced to just two within the next fifty years, creating a real pensions 'timebomb' on the continent, the report underlines.

The situation would be worst in Bulgaria, the Czech Republic, Latvia, Lithuania, Poland, Romania, Slovenia and Slovakia, where emigration means there could be as few as 1.5 working age people per pensioner.

The blow would be softened slightly in countries like Denmark, Ireland, Cyprus, Luxembourg and the United Kingdom, where population growth is likely to be stronger, notably thanks to higher levels of immigration, which have bolstered workforces and fertility rates.

According to the forecasts, the UK would become the bloc's largest member in terms of population, with 77 million inhabitants, compared to 61 million nowadays. Germany, which is currently the most populated EU nation, would see its population decline from 82 to 79 million by as early as 2035 and sink to just 70.7 million by 2060.

While expressing caution over the accuracy of these projections, the European Commission expressed concern regarding the burden that the ageing process will place on the economy and the budget.

Immigration could also provide solutions, as seen in the UK, but many European countries are sceptical about opening the doors to foreign workers. source

My comment: Since this news isn't really news and there are demographic crisis in most European countries I have a suggestion. If the EU start serious funding of birthing mothers and mothers of children under say 12 that go to school, I'm sure the problem will be solved in no time. I don't mind sacrificing for the cause of young and flourishing EU. Just show me the money, and I'm on for at least 2 children. Yeah, the money and the health care. And also please develop work from home for working women like me. Let's make a campaign "More Europeans for Europe" (which is reference to the campaign of radio Vitosha "More Bulgarians for Bulgaria").

SMEs hit out at cost of EU food labelling proposals

29 August 2008

A public hearing in the European Parliament on 28 August 2008 saw food industry stakeholders hit out against Commission proposals on nutrition labelling, which they say are overly complex and will push up costs for small businesses.

The hearing, carried out under the auspices of German Conservative MEP and rapporteur on the 'Food Information to Consumers' dossier Dr. Renate Sommer, was lively, incorporating a wide range of stakeholders.

The main issues discussed were:

  • The coexistence of national and EU food labelling systems as outlined in the Commission proposal;
  • compulsory vs. optional information on food packets;
  • legibility of information, including font size (Commission proposed a 3mm minimum) and contrast;
  • country of origin labelling, simplification of nutritional information, and;
  • the so-called 'traffic-light systemexternal ' of colour-coded guideline daily amounts.

Nina-Alexandra von Radowitz of EuroCommerce was particularly critical of the proposal, claiming that "it does not simplify the labelling information on food packets". She disagreed with the 3mm minimum font size, saying it would pose problems on multilingual labels.

Angelika Mrohs of the Confederation of the food and drink industries of the EU (CIAA) said food labelling would not substitute education because "it is about information, not judgement". She doubts that the Commission's proposal will achieve its stated goal of simplification. The CIAA, she said, favoured the deletion of national schemes and is in favour of full harmonisation at EU level. The CIAA further believes the "proposals are too detailed to be practical".

French EU Presidency spokesperson Roseline Lecourt confirmed her country's support for the initiative and said there would be a clearer indication of what the Council's position is by the time of the Health and Consumer Affairs Council on 15/16 December 2008. She does not consider the tasks of Parliament and Council to be very easy regarding this issue. source

My comment: I also prefer a common EU scheme for labelling, but I'm definitely pro-labelling. I hate how SMEs try to avoid not only cost but also responsibility, because if they don't have to write out anything in their products, no one will hold them responsible for the ingredients that aren't supposed to be there or that are simply not there. Think on that!

IEA urges EU to fully liberalise energy markets

5 September 2008

The Paris-based International Energy Agency (IEA) has published its first review of EU energy policy, endorsing controversial Commission plans to break up European energy giants and calling for greater cross-border trade in renewable energy among other recommendations.

In a visit to Brussels yesterday (4 September), IEA Executive Director Nobuo Tanaka praised the EU's climate and energy package, proposed by the Commission on 23 January, but warned that "EU policy is less consistent" in the field of energy market liberalisation.

Tanaka expressed concern about some EU member states' "resistance" to full ownership unbundling, meaning the separation of large energy firms' production and supply infrastructures. Brussels initially proposed far-reaching plans on electricity and gas market liberalisation in September 2007, but watered down the proposal under pressure from a group of member states led by France and Germany.

Any alternative to full unbundling is a "second-best solution", Tanaka said in a thinly veiled reference to the compromise deal brokered by energy ministers in June (EurActiv 09/06/08).

The IEA representative also criticised restrictions on trade in renewable energy certificates between EU member states, as this "will unnecessarily increase the cost of achieving the target for renewable energy," he said. The trading push is likely to be abandoned in favour of 'flexible' mechanisms, such as joint renewable energy projects between member states.

On the issue of energy security, Tanaka called for greater "dialogue" with supplier countries and urged the EU to "provide attractive conditions for internal investment in energy infrastructure". External energy relations are "perhaps the weakest" aspect of the EU's energy policy, he said, reflecting a long-standing criticism that EU member states pursue their own national interests with respect to supplier countries rather than speaking with 'one voice' on behalf of Europe.

While Tanaka did not specifically mention Russia, Europe's relations with its most important oil and gas supplier have been strained recently following the 'August war' in Georgia. There are concerns that the Georgia crisis, as well as proposals to insert a 'Gazprom clause' for reciprocal rules in energy market investments between the EU and Russia, will impact negatively on the bloc's energy security.

The need for more investment in 'clean' technologies such as carbon capture and storage (CCS) was also highlighted by Tanaka, who called on EU member states and the private sector to cough up the necessary funds. source

My comment: Yeah, very good review of what have to be done. In case any one of us didn't know it already. I put it here because it really is a good review.

Bulgaria starts work on second nuclear plant

3 September 2008

Today's first step in the construction of the country's second nuclear power plant in Belene could help Bulgaria to regain a strategic position as an electricity exporter to Southeastern Europe, writes EurActiv's partner in Bulgaria Dnevnik.

Bulgaria has been heavily reliant on nuclear energy since the 1980s, when the Soviet-built Kozloduy nuclear power plant became operational. But, under pressure from the EU during accession negotiations, the country agreed to close down four units of the plant – a commitment which still has to be finalised and for which Bulgaria is still seeking EU compensation (EurActiv 22/04/08). Before units four and five were shut down, Kozloduy produced 44% of the country's electricity, 20% of which was exported. This gave Bulgaria a strategic position in the region, which it has now lost. In this context, the Belene project has become a priority.

After years of setbacks, Bulgarian Prime Minister Sergei Stanishev turned the first sod of the 2,000 megawatt Belene plant on 3 September.

The new plant, which is only Bulgaria's second and comes 20 years after the construction of the first in Kozloduy, is expected to become operational in 2013-2014, at an estimated cost of €4 billion. But the plant is expected to bring electricity prices down, because the cost of producing 1kw of electricity at the Belene NPP is as low as 3.7 eurocents.

The project has long received the support of the European Commission, which strongly endorses nuclear as a key technology in efforts to build a low-carbon EU energy system (EurActiv 15/10/07).

The new Bulgarian plant will comprise two third-generation VVER-1000/V-446B reactors of Russian design. The main contractor (with 51%) is Russia's Atomstroyexport in conjunction with France's Areva SA and Germany's Siemens as subcontractors.

For the remaining 49%, Bulgaria's state-owned National Electric Company (NEC) is seeking a European partner. Among those shortlisted are German giant RWE AG and Belgian utility company Electrabel, which may also obtain the deal in a consortium. NEC has also selected French bank BNP Paribas to as lead fundraiser and manager of the project.

While Minister Dimitrov recently said his government would prefer European banks to fund the project, he added that he would not rule out the option of taking advantage of Russia's proposal to provide a loan for Belene from its state budget.

Critics of the project say it will increase the country's energy dependency on Russia. But the Bulgarian government says global energy pressures make the project necessary. Bulgaria also hopes to once again become a leading energy exporter in the Balkan region, which has experienced serious power shortages since the phasing out of units four and five of the Kozloduy NPP on 31 December 2006.

Responding to criticism from environmentalists who claim that Belene is dangerously located in a seismic area, the Bulgarian Academy of Sciences recently stated that the location of the plant and the 30km zone around it are among the seismically safest areas in the country. source

My comment: Yep, finally, they started Belene. All I can say is that this project really is important. Bulgaria has pretty cold winters and pretty hot summers, so no electricity really isn't an option. And since we provide electricity to other Balkan countries, including Greece, no electricity is even worst option for them. Let's hope work gets done this time.

Study: New EU members work above European average

5 September 2008

According to a recent report, a striking gap in working time continues to exist between countries that joined the EU after 2004 and the other 15 members. Among those working longer hours, Bulgaria, Romania and the UK are well ahead of their European neighbours.

The average agreed weekly working time currently stands at 38.6 hours for the whole of the EU, according to Eurofound's European Industrial Relations Observatory (EIRO).

But if one considers the EU 15 alone, rates have fallen to just 37.9 hours – two hours less than the 39.6 hour week put in by workers in the EU's 12 new members.

As for full-time workers, Bulgarians and Romanians emerge as the hardest working, clocking up 41.7 hours per week.

The UK comes a close third, with its citizens working an average of 41.4 hours. This could be a result of the country's opt-out from the EU's 'Working Time Directive' that caps the working week at 48 hours.

Indeed, the opt-out enables British citizens to work for up to 65 hours per week, althouh the Socialist Group in Parliament has vowed to contest this, arguing that it breaks "health and safety law".

Full-time workers in France, Italy and Denmark are those putting in the least hours. Indeed, the French spend just 37.7 hours at work, leaving them the equivalent of a whole afternoon off each week.

France is in fact a record breaker as far as working time reductions are concerned. It has cut weekly working time by four hours over the past nine years, far ahead of Luxembourg (1 hour), the UK (1.1 hours), Portugal (1.2 hours) and Sweden (2.5 hours).

This tendency to work less would appear to contradict EU recommendations to speed up labour market reforms and get people to work longer so as to face up to the pressures of globalisation and deal with the demographic challenges facing the continent.

Nevertheless, even in France - seen as one of the EU's most rigid models and where trade unions have been actively opposing reforms - change does appear to be taking place.

Indeed, in July, the French Senate approved a law to extend the compulsory cap of 35 working hours per week to boost the country's economic competitiveness. source

My comment: Yeah, we work more time but we work less effectively! Is it that hard to understand that without motivation, people can stay at work even 20 hours per day and don't do a thing? Get real, people! The short work-week is a very good idea, don't spoil it. It gives motivation to people to give the best of themselves and it increases effectiveness. And it's no use of working your ass off if you don't have the time to enjoy th money you earned or your familly.

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