EU TRANSPORT MINISTERS FOCUS ON TRAN-EUROPEAN

C O N F I D E N T I A L SECTION 01 OF 02 LJUBLJANA 000208

DEPT FOR EUR/NCE and EEB/TRA

SIPDIS

E.O. 12958: DECL: 05/11/2018
TAGS: ECON ELTN EAIR EWWT SENV PGOV EUN SI
SUBJECT: EU TRANSPORT MINISTERS FOCUS ON TRAN-EUROPEAN
TRANSPORT NETWORK AND THE ENVIRONMENTAL ISSUES


Classified By: CDA Maryruth Coleman for reason 1.4 (b)
and (d).

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


1. (U) At their May 6 informal meeting, EU transport
ministers examined the status of the trans-European
transport network (TEN-T) and discussed measures
needed to reduce carbon emissions by 20 percent by

2020. At a related press conference, Slovene Minister
of Transport and Transport Council president Radovan
Zerjav reaffirmed the EUQs commitment to the TEN-T
despite its history of funding shortages and delays in
implementation. EU Transport Commissioner Jacques
Barrot outlined a five-point plan for moving toward an
EU-wide sustainable transport network by
"internalizing" the cost of pollution. End Summary.

What is TEN-T?
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2. (U) In 1996, the EU established TEN-T to coordinate the
construction and integration of road and rail systems
throughout the EU community. The goal was to reinforce the
concept of a single market with free movement of passengers
and goods, strengthen economic ties between member states,
and increase overall competitiveness in the EU both by
lowering the cost and increasing the efficiency of EU
transportation systems. Faced with fourteen networks of
national road and railways, TEN-T was established to define
common guidelines for future infrastructure development and
a series of priority projects. It also established
financial instruments to encourage member states to
implement those projects. In 2004 TEN-T revised its
guidelines, in anticipation of EU enlargement, and
increased the number of priority projects from fourteen to
thirty. Of the thirty projects, eighteen concern railway
developments, ten involve highways, and two are inland
waterway and shipping projects. Because TEN-T relies only
on strongly suggested guidelines and financial incentives,
it has been plagued with delays and financing difficulties.
Each member state is expected to finance its own
infrastructure project within its planned budget, but there
is no cross-border planning entity to insure that projects
are developed or integrated in a coordinated manner.

Where Do Things Stand?
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3. (U) At the informal transport ministerial press
conference, EU Transport Commissioner Jacques Barrot said
one-third of TEN-TQs priority projects are now complete,
one-third should be completed by 2013, and the remaining
third is expected to be done by 2020. He acknowledged the
programQs problems, noting that the ministers had focused
their informal ministerial discussions on eliminating
bottlenecks and cross-border issues. He urged member
states to reaffirm their commitment to financing
transportation infrastructure development in general and
TEN-T priority projects in particular. According to
Barrot, the EU currently only spends an average 0.5 percent
GDP on infrastructure, down from a previous level (and TEN-
T goal) of 1.5 percent. He said member states must raise
the average to 1 percent if Europe is to meet the
transportation challenges facing it. Slovene Transport
Minister Radovan Zerjav unveiled a Loan Guarantee
Instrument for Trans-European Transport Network Projects
(LGTT),a new financial instrument set up and developed
jointly by the European Commission (EC) and the European
Investment Bank (EIB),aimed at increasing the involvement
of the private sector in financing TEN-T projects.

Transport Ministers and Commission: Reduce Transport's
Impact on Climate
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4. (U) Barrot also told the press that the EU needed to
tie together its TEN-T goals with the EUQs climate change
program. He noted that the Commission is developing a
model for identifying the pollution costs of
transportation, then QinternalizingQ those costs and
passing the Qreal costsQ on to the emitters. He said the
Commission will present its findings on June 17. Barrot
concluded by outlining five factors that the member states
must keep in mind as the EU develops a comprehensive
sustainable transport strategy:


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- All modes of transport should be covered; for example,
air transport emissions costs could be addressed by
the Emission Trading Scheme (ETS),while maritime
emissions could go through the International Maritime
Organization (IMO).
- Considering that 90 percent of external costs are due
to road traffic, member states should focus on
significant improvement in road development.
- Member states should have the freedom to adjust and
calculate tolls according to the amount of pollution
and congestion each vehicle causes. He stated this
would give businesses incentives for choosing better
routes and avoiding peak traffic times.
- All member states should commit a percentage of
transport revenues to a fund for sustainable
transport.
- New measures should work to reduce noise pollution,
traffic congestion and CO2 emissions. Since trucks
are responsible for 30 percent of the CO2 emitted,
member states should quickly find a way to address
this mode in particular.

General Support for Taxing Polluters
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5. (C) Diplomatic Advisor Giuseppe Cassini, head of the
Italian Transport Ministry delegation to the informal
meetings, told Emboff on May 9 that there was broad support
for internalizing the cost of pollution and taxing heavy
emitters, and that he considered the plan a QrevolutionQ in
transport. He noted that French Minister of State
Dominique Bussereau took a particularly strong lead role in
support of the plan, whereas Spanish Secretary General for
Transport Fernando Palao was reluctant to support this
measure.

A Skeptical Press
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6. (SBU) The press seemed to receive Barrot's and
Zerjav's presentation with skepticism. French and
Slovene journalists questioned the CommissionQs
ability to get member states to spend more money or
avoid further delays due to lack of funding. Barrot
and Zerjav acknowledged these as legitimate concerns,
but suggested that delays could be remedied partially
by the new LGTT financing mechanism. Barrot stressed
that it is the duty of member states to do all they
can to work on TEN-T goals to reduce the environmental
impact of transport since infrastructure planning
plays a part in the EU climate and energy package.

Comment
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7. (SBU) While the TEN-T program is ambitious, its
reliance on member states for funding has
resulted in delays of some projects for more
than ten years. Designing new financial
instruments that encourage the involvement of
the private sector may be a solution to allow,
with incentives, individual member state to
support the major cross border integration work
needed to set up a seamless, efficient EU-wide
transportation network. If the EU climate and
energy package forces member states to address
transportation more comprehensively, TEN-T
could progress more rapidly. The greening of
the EU transportation sector will depend on
both commitment of principle and money by the
member states.

COLEMAN