MERKEL GIVES PREVIEW OF PRIORITY ISSUES FOR MARCH

UNCLAS SECTION 01 OF 02 BERLIN 000447

SIPDIS

USTR FOR MMOWREY

E.O. 12958: N/A
TAGS: ECON ETRD EU GM
SUBJECT: MERKEL GIVES PREVIEW OF PRIORITY ISSUES FOR MARCH
8-9 EU COUNCIL SUMMIT IN GERMAN PARLIAMENT ADDRESS



1. Summary: German Chancellor Angela Merkel, who currently
holds the presidency of the European Council, addressed the
German Bundestag on March 1 in a policy speech about her
priorities for the March 8-9 EU Council Meeting in Brussels.
Major themes are the promotion of economic growth, a
successful completion of the Doha Round, deepening
transatlantic economic cooperation, energy and climate
change. End summary.

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Economic Reform / Lisbon Strategy
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2. Chancellor Merkel emphasized the traditional focus of the
EU's spring summit on economic issues. Only if the EU is
economically successful would it be able to maintain the
European way of life and promote it around the world. "The
world will not wait for Europe" in the face of increasing
competition from other emerging regions in a globalizing
economy, Merkel said. Increasing competitiveness, creating
jobs and guarding social cohesion throughout the continent
are all equally important, interdependent aims in this
context, she emphasized. The intrinsic aim of the reforms is
therefore to protect the European social model as "there can
be no solidarity without growth". The complete
implementation of the EU's economic reform program under the
Lisbon Strategy is an important step to encourage the
continuation of the increased economic growth and job
creation seen across the EU in 2006. Merkel also noted the
goal of reducing the administrative burden attributed to the
EU's regulations by 25 percent over the next four years.

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Trade - Doha Round and Transatlantic Economic Partnership
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3. Merkel emphasized that Germany would work hard for a
successful completion of the Doha round and for continued
trade liberalization. A successful Doha round helps Germany,
as the world's number one exporting country in goods, to find
new business opportunities. It would also help developing
countries gain access to markets in developed countries.


4. Merkel stressed her desire for an intensified
transatlantic economic partnership and explicitly referred to
it as complementary, and not competing with Doha. The
priority areas for facilitating further cooperation are norms
and industrial standards, protection of intellectual property
rights and financial regulations. The Chancellor expressed
her hope that an agreement in these areas would unleash the
energies and creativity needed to compete with emerging
economic powers through a unified European approach. As a
next step, Germany planned to pursue the initiative within
the G-8 process and at the US - EU summit at the end of April.

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Energy and Climate Change
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5. Regarding energy as a key resource for economic growth,
Merkel said the EU needs affordable energy from sources that
are reliable and sustainable. The EU faces the critical
challenge in the next decade of combining ecological
improvements with economic progress in a way that realizes
emission reductions that are key to Germany's climate
protection strategy. Merkel stressed both the importance of
climate protection and the task it represents, pointing out
that Kyoto requires emission reductions of 8% below 1990
levels within 20 years, while the EU is about to adopt the
goal of an additional 12% reduction between 2012 and 2020.
She commended the EU Commission's proposal to reduce
emissions below Kyoto targets and pledged German support. On
the controversial subject of car emissions she pointed out
that the government supports the emission restrictions for
cars but specified this must be accomplished through a
reduction of "average-fleet emissions", not only from
emissions restrictions on bigger cars. All manufacturers
would have to undertake such efforts.


6. Merkel highlighted carbon capture and sequestration
technology (CCS) as an example of both the technological
potential and challenge in the years ahead. She lauded
Swedish energy company Vattenfall for building Germany's
first coal fired test plant employing CCS technology in
Brandenburg, but cautioned that there remained a number of
technical problems that needed to be solved in order to make
the technology market viable by 2020. In addition, Merkel
praised the role of the EU in promoting wind energy and
called it a huge success in the development of renewable
energy sources. Germany's global market share of 60% in this
technology will send a signal to emerging economic powers to
also invest in this form of renewable energy. Merkel said
the adoption of an Energy Action Plan by the EU Council would
position the EU well for the upcoming energy talks at the
US-EU summit and the EU-Russia meeting.
KOENIG