Identifier
Created
Classification
Origin
08LJUBLJANA142
2008-03-26 15:35:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Ljubljana
Cable title:  

EU COUNCIL CONCLUSIONS - LISBON STRATEGY, CLIMATE AND

Tags:  ECON EINV ETRD PREL PGOV SENV ENRG EUN SI 
pdf how-to read a cable
VZCZCXYZ0005
RR RUEHWEB

DE RUEHLJ #0142/01 0861535
ZNR UUUUU ZZH
R 261535Z MAR 08
FM AMEMBASSY LJUBLJANA
TO RUEHC/SECSTATE WASHDC 6552
INFO RUEHBS/USEU BRUSSELS
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/USDOC WASHDC
UNCLAS LJUBLJANA 000142 

SIPDIS

DEPT FOR EUR/NCE
VIENNA FOR CQUINLIVAN
TREASURY FOR VIMAL ATUKORALA

SENSITIVE
SIPDIS


E.O. 12958: N/A
TAGS: ECON EINV ETRD PREL PGOV SENV ENRG EUN SI
SUBJECT: EU COUNCIL CONCLUSIONS - LISBON STRATEGY, CLIMATE AND
FINANCIAL STABILITY

REF: A. BRUSSELS 392

Summary
-------

UNCLAS LJUBLJANA 000142

SIPDIS

DEPT FOR EUR/NCE
VIENNA FOR CQUINLIVAN
TREASURY FOR VIMAL ATUKORALA

SENSITIVE
SIPDIS


E.O. 12958: N/A
TAGS: ECON EINV ETRD PREL PGOV SENV ENRG EUN SI
SUBJECT: EU COUNCIL CONCLUSIONS - LISBON STRATEGY, CLIMATE AND
FINANCIAL STABILITY

REF: A. BRUSSELS 392

Summary
--------------


1. (U) The March 13-14 European Council resulted in the launch of
the second cycle of the renewed Lisbon Strategy for Growth and Jobs,
ratification of the EU's climate and energy package, and proposals
to create greater stability in the financial markets. Slovenian
Prime Minister and EU Council President Janez Jansa and EU
Commission President Jose Manuel Barroso both emphasized at a press
conference following the Summit that the goals of economic growth,
social improvements, and fighting climate change are all
interconnected. The majority of the discussions during the summit
focused on climate and energy objectives. Jansa and Barroso were
optimistic that the climate and energy package goals were ambitious
but achievable.


2. (U) In the opening press conference of the summit on March 13,
Barroso emphasized that the EU "passed the test of reality," showed
that the first cycle of the Lisbon Strategy worked, "kept the line"
and moved forward on its commitments for economic growth and energy
policies. In his closing statement on March 14, when asked about
Slovenia's handling of the summit, Barroso stated that success rests
on outcomes. On that basis, he said Slovenia ran a "successful and
professional presidency," bringing about "real results" on tough
subjects like establishing timelines and principles for the climate
and energy package, and establishing a unified approach to
stabilizing financial markets. The Council's most important
political decision during the traditionally economic Spring summit
was to approve the principle of a "Union for the Mediterranean."
(Ref A) End Summary.

The Lisbon Strategy - Next Steps
--------------


3. (U) At the opening press conference on March 13, Jansa described
the 2005-2008 cycle of the renewed Lisbon strategy as a success,

resulting in a halving of public deficits and the creation of 6.5
million jobs across the EU. He went on to say that the 2008-2010
cycle will focus on implementation. The Council reconfirmed the
four priority areas from the first cycle but asked the EU for
synergies among them to be exploited. Jansa listed the Lisbon
Strategy priorities areas as:
- investing in knowledge and innovation. Future growth for the EU
requires innovation and investment in research and development.
- unlocking business potential, especially for small and
medium-sized enterprises (SMEs). The EU needs to enact better
regulations to reduce bureaucratic burdens on SMEs and improve the
competitiveness of SMEs.
- investing in people and modernizing labor markets. The EU needs
to strengthen the knowledge triangle of
"research-innovation-education" in order to foster a
"knowledge-based economy." It needs to decrease student drop-out
rates and facilitate higher levels of education for its citizens.
In realizing these goals, Jansa emphasized:
- the role of local and regional involvement in delivering growth
and jobs;

- the need for economic, social and territorial cohesion in Lisbon
Strategy objectives;

- the importance of macro-economic stability in addressing
longer-term challenges ahead; and

- the importance of the social dimension and the need to integrate
economic, employment and social policies.

Finally, Jansa invited the European Commission, the Council, and
National Lisbon coordinators to start reflecting on post-2010
objectives in order to maintain and extend the success of the Lisbon
Strategy.

Climate and Energy Policy in Place by 2008
--------------

4. (U) Jansa stressed that climate and energy policy development
was a necessary and integral component of the Lisbon Strategy and
should be addressed in conjunction with the implementation of the
Lisbon strategy. Jansa also emphasized the importance for the EU to
maintain its international leadership on climate change and energy
issues in a safe and sustainable way. Jansa and Barroso highlighted
the need to "deliver" on the targets set by the EU in 2007. The EU
has committed to political agreement on principles by the end of

2008 and to propose an "ambitious, global and comprehensive"
post-2012 agreement on climate change at the UN meeting on climate
change in Copenhagen in 2009. Barroso stated that an international
agreement was the best solution for Europe. However, he explained,
even without an international agreement the EU would move forward
with internal goals.
Economic Concerns Addressed
--------------

5. (U) Jansa told the media that member states held intense
discussions on the economic impact of the climate and energy package
goals. All participants agreed that leadership in fighting climate
change can not come at the expense of economic competitiveness.
Jansa explained that climate change offers both economic challenges
and opportunities for the EU. He went on to say that new
technologies could spur economic growth in Europe. Jansa and
Barroso acknowledged the risk of carbon leakage and assured member
states that measures would be taken to keep industries in Europe.
They explained that any binding directives would include language
safeguarding the economic competitiveness of energy-intensive
companies, in case an international agreement on climate change
goals is not reached.
Energy Security is a Priority
--------------


6. Jansa highlighted the need for enhanced energy security within
the EU and more cooperation between the EU and third countries. He
stressed that the EU and its member states must "speak with one
voice" on energy issues with third parties. Jansa invited the
Council to conduct a comprehensive review of progress in promoting
energy security in light of the Strategic Energy Review to take
place in November 2008. Based on the joint report from High
Representative Javier Solana and the Council on the impact of
climate change on international security, the Council was invited to
provide recommendations by December 2008, at the latest, on how to
intensify cooperation with third countries and regions regarding the
impact of climate change and international security.

Strategy for Stability of Financial Markets Needed
-------------- --------------


7. (U) Jansa said that the EU needs to consider four areas
regarding financial markets: transparency, standards, prudential
framework, and financial management. He explained that the Council
would conduct a major review of progress made at the informal ECOFIN
meeting taking place in Ljubljana April 4-5 and would revisit the
issues, as needed, in Autumn 2008. Jansa presented some of the
Council's key conclusions on financial market stability:

- Prompt and full disclosure of risk by banks and financial
institutions is essential.

- In responding to turmoil, the Council agreed that the primary
responsibility is with the private sector but that authorities in
the EU stand ready to take regulatory and supervisory action where
and when necessary.

- The Council highlighted the need for further strengthening of the
financial stability framework and asked ECOFIN to implement stronger
financial supervision and management of cross-border financial
crisis situations.

- The EU should enhance the role of the IMF in oversight of
macro-financial stability. Also, the EU should work in close
cooperation with its international partners to combat instability in
the financial markets.

- The Council believes that sovereign wealth funds (SWFs) have
played a useful role as capital and liquid providers thus far, but
the Council raised concerns that the new players emerging have
limited transparency -- the goals and objectives of these SWFs and
their non-commercial practices are unclear. The Council called for
an international voluntary code of conduct for SWFs and defining
principles for recipient countries.


Comment
--------------


8. (SBU) The tone of the summit press conferences was upbeat, and
in all the issues discussed, there was a "call to action." Jansa
and Barroso focused on past successes and the need to implement and
"deliver" on political commitments. The Council stressed many times
that there should be an internationally-agreed commitment to


fighting climate change and that the EU would take the lead and
establish internal targets which it would propose for global
consideration. The economic impact of climate change targets was
the most hotly debated, with Germany's Chancellor Angela Merkel
stressing the need to implement targets in a way that avoids harming
energy-intensive industries, such as Germany's auto-making industry.
The concern over carbon leakage loomed large, and Barroso and Jansa
were both adamant that the EU would not work against its own
economic interests in addressing climate change.


9. USEU cleared on this cable.

COLEMAN