The Council examined draft conclusions prepared by the presidency for the spring meeting of the European Council, to be held in Brussels on 19 and 20 March.

The European Council is due to focus on:

the economic and financial situation; energy and climate change; Eastern partnership; the Treaty of Lisbon.

As concerns the economic and financial situation, it will examine progress achieved in ensuring greater stability and better supervision and transparency in financial markets, implementation of the European economic recovery plan approved in December, the way forward for the EU's Lisbon strategy for growth and jobs, the functioning of the EU's internal market and preparations for the G20 summit in London on 2 April.

On energy and climate change, it is due to discuss means of ensuring the EU's energy security in the medium and longer term, as well as preparations for the UN climate change conference in Copenhagen in December.

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In the presence of the Czech Deputy Prime Minister Alexandr Vondra, whose country currently holds the Presidency of the Council, MEPs discussed the preparations for the forthcoming European Council of 19 and 20 March 2009 devoted to the financial crisis, energy security and climate change.

Council : stressing the need for strong institutions in times of economic and financial crisis, the President of the Council recalled that a wide range of measures had already been made in particular to restore the credit flows to the economy. He felt however that the EU should continue its efforts to swiftly adopt legislation such as the Solvency II Directive (on insurance) or the UCITS Directive (the funds). He also stressed the need for Member States to give clear commitment to sound public finances in accordance with the Stability and Growth Pact.

In order to maximize synergies, the President stressed that the recovery packages implemented by each Member State should be implemented in a coordinated manner at European level. Recalling the urgency of structural reforms, he noted that opportunities for the Union to mitigate the social impact of the crisis would be discussed, while rejecting the use of protectionism to preserve jobs.

Energy security would be another priority for the Summit as would the development of guidelines for the Copenhagen conference on climate change climate, with the aim of reaching a comprehensive agreement in December, and lastly the launch of a partnership with the Eastern European countries.

Commission : the President of the Commission recalled that the recovery plan agreed by EU Ministers in December 2008 provides an unprecedented budget stimulus, equivalent to 3.3% of GDP. However, the European Council aims to make further progress in the following areas: (i) financial market reform; (ii) investing in the real economy; (iii) supporting employment; (iv) and working through the G-20 forum to strengthen the international financial architecture.

The priorities expressed by the different political groups can be summarised as follows:

the President of the EPP Group focused on four key words to solve the economic crisis - strength, unity, efficiency and solidarity - whilst reiterating his commitment to an regulated market economy; the PES Group called for further concrete actions from the EU as well as increased solidarity. Stressing that taxpayers should not be the only ones to bear the consequences of the crisis, he stressed the need for transparency and oversight in the financial sector, calling for action against tax havens; the leader of the ALDE group said that unemployment was a priority issue for the Parliament. He asked Member States to commit resources to address the crisis and expressed concern that the stimulus package was insufficient; whilst welcoming the Commission's initiative to clean up the banking system, the representative of the UEN Group stressed the need to support SMEs and to protect European consumers and European manufactured products; the Greens/EFA stressed that the Lisbon strategy had not achieved its objectives. It recalled that requests already made by the Parliament to the Commission to ensure financial market stability had not been followed up. As regards climate change, the Group deplored the gap between the declared ambitions and actions; the representative of the GUE/NGL Group called for the EU to sanction businesses that relocate; the IND/DEM Group challenged the legitimacy of the EU to act in the financial field and objected to the idea of the oldest Member States paying for the hardest hit eastern European countries; lastly, the member who spoke on behalf of the NI Group hoped that Member States were opposed to protectionism and urged them to act against excessive regulation.

Debate in Parliament

The Council adopted a key issues paper outlining the main policy objectives to be set for 2009 as concerns economic and financial affairs (Ecofin) which will be submitted at the spring meeting of the European Council (see document 6784/1/09 REV 1 ).

In view of the ongoing financial and economic crisis, the European Council is expected to:

take stock of progress achieved in ensuring greater stability and better supervision and transparency of financial markets, and will consider further measures as necessary, particularly in the light of Commission analysis and proposals based on the recommendations of a high-level reflection group chaired by Jacques de Larosiere; assess implementation of the European economic recovery plan that it approved in December; reiterate the commitment of member states to return to sustainable budgetary positions as soon as possible; emphasise the increased importance of making renewed progress in implementing the EU's Lisbon strategy on growth and jobs; underscore the determination of member states to adhere to the principles of the EU's single market; establish the EU's position with regard to the G-20 summit to be held in London on 2 April 2009.

The Council held a policy debate on the current financial and economic crisis and adopted key messages in the fields of employment and social policy, intended to be reflected in the Spring European Council Conclusions. The Employment, Social Policy, Health and Consumer Affairs Council submits the following key messages to the Spring European Council:

(1) Employment and social policies in times of economic crisis :

the economic and financial crisis is hitting hard and calls for urgent action: timely, temporary, targeted measures are necessary to stimulate employment and to prevent and limit job losses and social impacts; building on solidarity and allowing social protection systems to fully play their role as automatic stabiliser is key to restoring and strengthening confidence and helping pave the way for recovery. Particular attention should be given to the most vulnerable and to new risks of exclusion; enhanced coordination between economic, employment and social policies, taking into account the territorial dimension, is necessary; the crisis calls for close monitoring of both employment and social trends; direct responses to the crisis should be coherent with longer-term objectives and sound public finances; the reforms and policy mix needed to meet the long-term economic, financial, employment and social and environmental challenges of the EU should be more coherent and mutually reinforcing.

(2) Preventing and tackling unemployment while keeping labour market reforms on track :

supporting access to employment and easing transitions within and into the labour market in order to shorten any spell of unemployment and to increase participation of both women and men. The common principles of flexicurity provide, in this context, useful guidance to further modernise labour markets; reinforcing access to training and active labour market measures for the unemployed, workers at risk of dismissal and other vulnerable groups. Investment to sustain open, efficient and high-quality education and training systems should help enhance skills and competences that are necessary for the future; improving anticipation and matching of skills with labour market needs so as to facilitate transitions towards new business activities generating labour demand; supporting employment and job creation through measures to stabilise the economy, promote the transition towards a low carbon economy and strengthen investment in research and development as well as in fast-growing sectors; avoiding measures that induce premature withdrawal from the labour force , such as early retirement schemes or age barriers to training opportunities, so that participation in the labour market is retained and increased.

(3) Strengthened commitment to the social inclusion and social protection objectives :

pursuing poverty reduction and social cohesion, through reinforced comprehensive strategies to combat and prevent poverty and social exclusion of children, the emergence of new groups at risk of exclusion such as the young, and new risk situations, including over-indebtedness; sustained efforts should tackle homelessness , address the multiple disadvantages facing the Roma people and their vulnerability to social exclusion, and promote the social inclusion of migrants; addressing long term adequacy and sustainability of pension systems through appropriate reforms, including inter alia the achievement of the Lisbon target of 50% employment rate of older workers and the improvement of the position of low wage earners also in the economic downturn; improving efficiency of healthcare systems and reducing health inequalities through increased attention to primary care, prevention, promotion, quality and safety, better coordination and effective use of resources including e-health; delivering quality of long-term care , to ensure healthy and dignified ageing, creating a solid financing basis, improving care coordination, including coordination between health and social care services, and ensuring the availability of skilled human resources; taking various actions to support people’s income and to mitigate the direct impacts of the financial crisis on households and individuals, while investing in social and health infrastructure; monitoring of social impacts of the economic crisis and of policy measures taken or planned to cushion or limit these impacts; the essential role of the Social Open Method of Coordination could be further enhanced by mainstreaming social considerations in other policy areas through the strengthening of the social dimension of impact assessments, by devoting increased attention to the quality and continuity of stakeholder involvement and by evidence-based national target-setting, while the decision on setting national quantified targets and their definition remains a core responsibility of the Member States.

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The Council adopted a “key issues paper” on competitiveness as well as conclusions on the review of the single market, in preparation for the next Spring European Summit.

Confronted with an international financial crisis and an exceptionally strong economic downturn, the European Union and Member States are showing their determination to act in a concerted, ambitious and comprehensive manner in order to restore confidence and the growth path, as demonstrated by the European Economic Recovery Plan agreed by the European Council in December 2008.

In this context, the European Union and Member States should take short-term measures in response to their specific circumstances and reflecting their different scope for action within a common and co-ordinated framework. The short-term measures should improve the economic conditions for business and should also be in line with the medium- and long-term objectives of the Lisbon Strategy. They should also contribute to the creation of more jobs.

In order to boost confidence among citizens and businesses, a clear commitment in the spirit of joint ownership to continue implementing Lisbon structural reforms beyond 2010 is necessary.

Rapid and determined actions are needed to respond to the economic downturn, in particular on the following five axes :

(1) Removing barriers and achieving a fully operational and modern internal market :

achieve an open, flexible and fully functioning internal market by removing existing barriers to fundamental freedoms and avoiding the creation of new ones; strengthen competition throughout the economy and in particular in the European Union network industries (in particular energy, transport and telecommunications); implement the Services Directive by the December-2009 deadline; boost the performance of the internal market in retailing by focussing on eliminating factors that make business-to-consumers cross-border transactions more difficult; five years after launching the fifth enlargement, eliminate remaining transitional arrangements which create market distortions, as soon as possible and in accordance with the Treaties.

(2) Putting into effect the Action Programme on reduction of administrative burden on businesses : the Council calls upon the Commission to continue giving priority to making new simplification proposals. Rapid adoption by the Council and the European Parliament of more than fifty simplification proposals that are still pending is a priority.

The Council calls for this work to progress quickly and for enhanced Community efforts from all Community institutions to guarantee achieving the agreed 25% reduction of administrative burdens arising from EU legislation with the aim of some impacts felt by business by 2010, and impacts across all key sectors by 2012 at the latest. It recalls the need to address regularly and effectively the assessment of administrative burdens in the Commission’s impact assessments for new proposals, in particular for SMEs.

(3) Improving the framework conditions for industry, with special focus on innovation and SME competitiveness :

ensure an easy and timely access to finance for businesses, especially SMEs. There is a need for increased and more effective funding for investment and infrastructure, both in response to the short-term economic crisis and in order to increase medium- and long-term productivity; reduce the energy dependency of the European Union, enhancing measures for improving energy efficiency and embarking on a cost-effective emissions-reduction strategy using appropriate economic incentives; the Commission is called upon to: (i) move forward with its initiatives on Green Cars, European Energy-efficient Buildings, and Factories for the Future before mid-2009; (ii) present possible options how to encourage in a coordinated manner European car-fleet renewal in order to reduce CO2 emissions and fuel consumption and to increase safety; the Commission and Member States should work together in conjunction with businesses to promote the availability and quality of skilled workers and vocational education and training , including training for entrepreneurship, technical education and natural sciences; encourage systematically all forms of innovation : (i) the output of the research and innovation process should better respond to market and to user needs; (ii) efforts should be pursued with a view to achieving excellent, world-class European clusters; (iii) EU efforts to create a Community patent and a Patent Litigation System must be intensified; (iv) implementation of the Commission's Industrial Property Rights Strategy should be pursued; the adoption of an ambitious European Innovation Plan in 2009 that encompasses the main technologies of the future, including, inter alia, space technologies and technologies relevant to sustainable development; in parallel to the development of the GNSS (EGNOS and GALILEO systems) and GMES programmes, the European efforts for developing adequate EU instruments and funding schemes for space related research and for the operations of sustainable space-based applications, as well as the improvement of regulatory framework, have to be pursued; the specific research and innovation needs, constraints and opportunities of different types of SMEs need to be better targeted; work with a view to extending broadband networks should be promoted both at Member State and at European Union level.

(4) Enhancing the level and the quality of investment into knowledge and research :

higher, more effective and efficient investments in education , re-emphasising the continuing relevance of the Barcelona 3% overall RTD investment target for the European Union; European cooperation within the "knowledge triangle" needs to be developed by encouraging universities, research institutes and industry to step up their cooperation, including the optimal use of intellectual property. The European Institute for Innovation and Technology (EIT) is expected to play an important role in this context; the role of frontier-research needs to be reinforced and the five current European Research Area (ERA) initiatives (research infrastructures, joint programming, researchers’ partnership, international science and technology cooperation and knowledge-sharing) should be further developed in governance and implementation; develop excellent research infrastructures throughout Europe on a voluntary basis and in full respect of the subsidiarity principle; implement the European partnership in the area of international scientific and technological cooperation with third countries ; career perspectives and mobility of researchers should be enhanced; the regional research and innovation capacity needs to be broadened through concrete investment measures, in close coordination with innovation-cluster policy. It is also important to allocate an appropriate share of the Structural Funds for R&D and innovation-related investments; the evaluation and monitoring of R&D and innovation activities need to be strengthened at appropriate levels.

(5) External Dimension of Competitiveness : avoiding the trap of protectionism and overregulation, Europe needs to take full advantage of the new realities of the emerging international economic system, diversify relations and develop new opportunities for mutually beneficial partnerships around the globe.

Achieving an ambitious, balanced and comprehensive result in the negotiations on the Doha Round with all WTO members should be a priority. Relations with the BRIC economies ( Brazil , Russia, India and China ) and other important actors should be intensified. The EU neighbourhood policy offers important economic potential. The opportunities for strengthening the transatlantic partnership need to be explored at the highest political level and the potential for bilateral Free Trade Agreements should be energetically exploited.

Lastly, the European Union should aim at creating progressively the future fair and integrated global carbon market and avoid increase of heterogeneity of climate policies around the globe by ensuring an ambitious and comprehensive deal on climate change at Copenhagen.

The Council examined an annotated draft agenda prepared by the presidency for the spring meeting of the European Council, to be held in Brussels on 19 and 20 March 2009. The European Council is due to focus on the following issues:

the economic and financial situation; energy and climate change; external relations, in particular the Eastern Partnership; the Treaty of Lisbon.

As concerns the economic and financial situation , it will focus on progress achieved in ensuring greater stability and better supervision and transparency in financial markets, implementation of the European economic recovery plan approved in December, progress on the Lisbon strategy for growth and jobs, the functioning of the EU's internal market and preparations for the G20 summit in London on 2 April.

On energy and climate change , it is due to discuss means of ensuring the EU's energy security in the medium and longer term, as well as preparations for the UN climate change conference in Copenhagen in December.

The annotated draft agenda will serve as the basis for draft European Council conclusions to be prepared by the presidency and submitted to the Permanent Representatives Committee. The draft conclusions will draw on the work of the Council configurations involved, as well as the outcome of an informal meeting of heads of state and government in Brussels on 1 March.

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The Council:

reviewed implementation of the European economic recovery plan approved by the European Council in December in response to the global financial crisis and economic slowdown; held an exchange of views on the financial aspects of proposals aimed at providing additional support, under the European economic recovery plan, to investments in the field of energy and infrastructure, including broadband internet and rural development.

At its spring meeting, on 19 and 20 March, the European Council will assess how well the recovery plan has been implemented.

As regards additional investment in the field of energy , a number of delegations raised concerns relating to the financing of projects and asked the Commission to review its proposal. The president of the Council indicated that views expressed will be taken into account when the General Affairs and External Relations Council discusses the issue on 23 February, with a view to reaching an agreement with the European Parliament and the Commission before the European Council meeting.

The Council also held an exchange of views on the main messages to be conveyed to the spring meeting of the European Council as regards economic and financial affairs , on the basis of an outline key issues paper produced by the presidency. It requested the Economic and Financial Committee to prepare the key issues paper for adoption at the Council's meeting on 10 March.

The presidency paper presents an outline of the main issues for consideration, setting out the following themes:

2009: a year of economic recession and uncertainties; financial markets: resuming stability and modernizing rules; real economy: facilitating swift and steady recovery; economic and monetary union: fostering success in turbulent times.

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