DUTCH PRESIDENCY AMBITIONS FOR COMPETITIVENESS

UNCLAS SECTION 01 OF 02 THE HAGUE 002581

SIPDIS

E.O. 12958: N/A
TAGS: ECON NL EUN
SUBJECT: DUTCH PRESIDENCY AMBITIONS FOR COMPETITIVENESS
COUNCIL


This cable is unclassified but sensitive; not for internet
distribution.

Summary
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1. Dutch Economic Ministry officials staffing the
Competitiveness Council hope to use the Dutch term in the
chair of the Council to make serious progress towards
reinvigorating the European economy. They acknowledge that
past meetings of the Council -- derided by their own minister
in June as a "dead horse in the path of progress" -- have
been dominated by secondary issues and have therefore failed
to engage ministerial-level attention from key EU countries.
The November Council agenda will reflect the Dutch hope to
rectify that problem with a thorough discussion of the Wim
Kok report on the EU's Lisbon agenda as well as concrete
progress on three efforts to improve the regulatory
environment -- business impact assessments for new
regulations, an effort to simplify the existing body of EU
rules, and an improved methodology for assessing the
administrative burden of EU regulations. The Dutch have been
working with both the Irish and with staff from subsequent EU
presidencies to improve the effectiveness of the Council in
contributing to improved European economic growth. End
summary


2. Emboffs met with Remco Zeeuw, Unit Manager of the
European Integration and Strategy Department of the Ministry
of Economic Affairs, and Sander Kes, Senior Policy Advisor in
the same office, on October 5 to discuss the Competitiveness
Council and Minister of Economic Affairs Brinkhorst,s
ambitions for it. Zeeuw and Kes are the officials at the
Ministry who prepare the &dossier8 for the Council meetings
and accompany the Minister to them.

Key role of the Council for Dutch presidency priorities
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3. Success at the Council is key for several top priorities
for the Dutch presidency. Laying the basis for the March
2005 mid-term review of the Lisbon Agenda (five years into
the ten year program) is one. The Dutch, along with a number
of other observers we have talked to, believe that the
economic structural reforms necessary for achieving the
Lisbon Agenda goals (centrally, Europe becoming the most
productive economy by 2010) have not been implemented.
Zeeuw, perhaps over-stating a bit, said &everybody agrees8
on what needs to be done, but impediments at the national
level prevent progress. Most of the reforms identified have
not been in the power of the EU to undertake. The Dutch will
seek both to identify more that the EU can, in fact, do
itself, and to find a way for the process to encourage more
national action. A preliminary discussion with Wim Kok, who
is chairing a report from a high-level committee as part of
the preparation for the mid-term review, was held at the
September 24 Council, and his final report will be delivered
to the November European Council.


4. Also important for Council action are three efforts to
deregulate the European economy. The Competitiveness Council
has been trying to assert its authority through use of
assessments of the impact on European business
competitiveness of regulatory proposals from other Councils
(this has been most prominent in the review process of the
Environment Council,s REACH chemical regulation proposal).
The Irish and Dutch have cooperated in a year-long program to
simplify existing EU regulations, where member states have
come up with a list of 300 suggestions now being winnowed
down to a do-able twenty or thirty. Finally, the Dutch push
is to introduce an agreed methodology to measure the
administrative burden of regulations, existing or proposed.


5. Put more broadly, though, the Dutch believe that the
central European economic problem ) slow growth ) will find
its solution mainly in the areas that are the principal
responsibility of the Competitiveness Council, not in Ecofin,
the Eurogroup or the European Central Bank (though, of
course, there is overlap especially with Ecofin).

Dutch view: the Council was not operating well
-------------- --


6. Dutch Economics Minister Jan Laurens Brinkhorst has not
hidden his low opinion of how well the Competitiveness
Council has operated: at a Conference Board-organized
Productivity, Innovation and Value Creation conference in
Amsterdam early in the Dutch presidency, he said the Council
was a &dead horse in the path of progress.8 He has
repeated such criticisms ) in slightly different terms ) on
other occasions. Zeeuw and Kees said that other Ministers
agreed, and that this was visible through their failure to
attend Council meetings consistently. Meetings were boring
and concerned with unimportant things (Zeeuw used the
proposed regulation on sales promotions ) currently on the
Council agendas ) as an example).


7. The Dutch have tried to upgrade the content of the
agendas, limit discussion items that actually need
ministerial attention, and refer less important issues to
junior minister or civil servant levels, in order to give the
Council meetings the status they should have. They regard
regular attendance by certain key industry/economic affairs
ministers (UK, France, Germany, Poland were mentioned) as a
measure of their success. Brinkhorst has organized informal
dinners preceding the Council meetings in order to &improve
the atmosphere8 and give an &esprit de corps.8


8. The campaign to upgrade the Council is a long-term
project, consciously undertaken in cooperation with the
preceding Irish presidency and the succeeding Luxembourg and
UK presidencies. Zeeuw said he has even talked with his
counterparts in Austria and Finland, future presidencies,
about it. All of these countries share the same view as the
Dutch, he said, and seek to &create coherence8 in the way
the Council addresses Europe,s central economic problems.
(&Coherence8, he noted in an aside, was not the Greek or
Italian emphasis for the Council.)

Comment
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9. A more effective Competitiveness Council, focusing on
more competition for European business (especially needed,
said our interlocutors, to improve European service
industries, who ignore innovation potential because they are
not pressed by competition),less burdensome regulation, and
greater transparency and input from business, would be of
obvious benefit to US objectives. Many US problems with
market access in Europe derive from an inward-looking
Commission, immune to concerns about costs. Ministers on the
Council, and the officials staffing the working parties
supporting the Council, should frequently be receptive
audiences for communicating US concerns.
SOBEL