General report on the activities of the European Union 2010.
Date: 2012-02-02
Institutions: Directorate-General for Communication
Subjects: EU activity, European Union, activity report

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doi:10.2775/59174

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 GENERAL REPORT 
ON THE ACTIVITIES
OF THE EUROPEAN UNION
2010

EUROPEAN COMMISSION

 
 
 
 
 
 
 
 
 
 
 
 
The European Union

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General Report on the Activities of the European Union — 2010
European Commission 

Directorate-General for Communication 

Publications 

1049 Brussels

BELGIUM 

The General Report on the Activities of the European Union — 2010 

was adopted by the European Commission on 16 February 2011 under 

reference number SEC(2011) 189.

http://europa.eu/generalreport/en/welcome.htm

Cover illustration: © Corbis 

2011 — 136 pp. —  21 × 29.7 cm

ISBN 978-92-79-17464-3

doi:10.2775/59174 

Luxembourg: Publications Office of the European Union, 2011

© European Union, 2011

Reproduction is authorised provided the source is acknowledged. For any use 

or reproduction of individual photos, permission must be sought directly from 

the copyright holders.

Printed in Belgium

PRINTED ON ELEMENTAL CHLORINE-FREE BLEACHED PAPER (ECF)

Price (excluding VAT) in Luxembourg: EUR 7 

 GENERAL REPORT 
ON THE ACTIVITIES
OF THE EUROPEAN UNION
2010

  CO N T E N T S

FOREWORD  

1 

 DRIVING TOWARDS RECOVERY  

ECONOMIC RECOVERY AND STRENGTHENED GOVERNANCE  
SUPPORTING MEMBER STATES IN NEED 
STRENGTHENED ECONOMIC GOVERNANCE 

FINANCE AND COMPETITION AT THE SERVICE OF CITIZENS  
THE NEW FINANCIAL SUPERVISION ARCHITECTURE 
REFORMS TO FINANCIAL REGULATION 
COMPETITION POLIC Y SHAPING RESPONSES 

GLOBAL RECOVERY AND INTERNATIONAL COOPERATION  

THE EUROPE 2020 STRATEGY — 
SMART, SUSTAINABLE AND INCLUSIVE GROWTH  
UNLEASHING EUROPE’S POTENTIAL  THE SEVEN FLAGSHIPS 
RELAUNCHING THE SINGLE MARKET 

2 

 A CITIZENS’ AGENDA: PUTTING PEOPLE 
AT THE HEART OF EUROPEAN ACTION 

AN AREA OF FREEDOM, SECURIT Y AND JUSTICE FOR CITIZENS 
BUILDING A CITIZENS’ EUROPE: JUSTICE, FUNDAMENTAL RIGHTS AND CITIZENSHIP 
HOME AFFAIRS: AN OPEN AND SECURE EUROPE 

INVOLVING CITIZENS AND EASING EVERYDAY CONCERNS 
SERVICES 
HEALTH AND CONSUMERS 
BENEFITING FROM A FAIR MARKET 
SOCIAL RIGHTS 

EDUCATION AND CULTURE 
CIVIL PROTECTION 

PASSENGERS’ RIGHTS AND TRANSPORT 

3  ENERGY, CLIMATE AND ENVIRONMENT 

ENERGY  
ENERGY INFRASTRUCTURE 
ENERGY EFFICIENC Y 
RENEWABLE ENERGY SOURCES AND TECHNOLOGIES 
NUCLEAR ENERGY 
INTERNATIONAL RELATIONS AND SECURITY OF ENERGY SUPPLY 
AN EFFICIENT MARKET 

CLIMATE ACTION  
FROM COPENHAGEN TO CANCÚN 
THE CANCÚN OUTCOME 

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ENVIRONMENT  
BIODIVERSITY 
ENVIRONMENTAL SUSTAINABILITY 
SUSTAINABLE USE OF NATURAL RESOURCES AND SEAS 

4  THE EU IN THE WORLD 

PROMOTING MULTILATERAL GOVERNANCE  

STRENGTHENING STRATEGIC ALLIANCES 

PROMOTING PEACE, SECURIT Y AND HUMAN RIGHTS 

TRADE — DOING BUSINESS AROUND THE WORLD 

ENLARGEMENT 

EUROPEAN NEIGHBOURHOOD POLIC Y 

RESPONDING TO HUMANITARIAN CRISES 

DEVELOPMENT COOPERATION  

5 

 MAKING THE EU MORE DEMOCRATIC, 
EFFICIENT AND ACCOUNTABLE 

IMPLEMENTATION OF THE LISBON TREAT Y  

THE EU INSTITUTIONS  
THE EUROPEAN PARLIAMENT 
PROJECT EUROPE 2030  
THE EUROPEAN COUNCIL  
THE COUNCIL   
THE EUROPEAN COMMISSION  
THE NATIONAL PARLIAMENTS  
THE COURT OF JUSTICE OF THE EUROPEAN UNION  
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE  
THE COMMITTEE OF THE REGIONS 
THE EUROPEAN OMBUDSMAN  
OTHER INSTITUTIONS  
AGENCIES 

EFFICIENC Y AND TRANSPARENC Y 
SMART REGULATION  
MANAGING THE QUALITY OF LEGISLATION THROUGHOUT THE POLIC Y C YCLE  
IMPROVING THE IMPLEMENTATION OF EU LEGISLATION  
PROTECTION OF THE EU’S FINANCIAL INTERESTS AND FIGHT AGAINST FRAUD  
MORE TRANSPARENC Y 

THE EU BUDGET 2011 

CHRONOLOGY 

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G E N E R A L R E P O RT 2010   |   CO N T E N TS 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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F O R E W O R D

I  will  remember  2010  as  one  of  the  most  eventful  years  in  the  history  of  the 

European Union.

The  year  was  dominated  by  the  sovereign  debt  crisis  aff ecting  the  euro  area. 

At  times,  it  was  diffi  cult  to  see  what  would  happen  next.  At  times,  we  were 

stretched to our limits. At times, we had to take exceptional measures. That we 

weathered  the  storm  is  a  testament  to  the  determination  and  solidarity  that 

exists in the European Union.

The sovereign debt crisis has shown that we are more interdependent than ever 

before. A problem in one country can quickly become a problem for everyone. 

And  the  response  of  one  government  has  a  direct  bearing  on  the  options  for 

other governments, whether in or outside the euro area. That is why we have 

reacted with a strong determination to deliver fi scal consolidation, not as an end 

in itself, but as a means of securing our future growth, jobs and prosperity. We 

are learning from the mistakes of the past by introducing decisions that alter the 

way we all behave in the future. 

In  2010,  we  approved  the  fi nancial  programmes  for  Greece  and  Ireland  and 

guaranteed the stability of the euro. The agreement on a safety net of €750 billion 

in  May  and  the  commitment  to  a  permanent  crisis  fund  from  2013  were  the 

crucial steps to provide the stability needed.

It  has  led  to  the  commitment  from  all  27  Member  States  that  we  must  not  fi nd 

ourselves in this situation again. That is why the Commission has presented legislative 

proposals for a new economic governance approach. I hope that our monetary union 

will soon be complemented with the long overdue economic union.

We  have  also  brought  eff ective  supervision  and  regulation  to  our  fi nancial 

markets.  One  year  ago,  few  would  have  believed  that  we  would  have  a  new 

system  of  supervision  for  our  fi nancial  markets  in  place  from  1  January  2011. 

I strongly believe this is one of the best examples of how Europe can show it is 

delivering change. 

As we look forward to the year ahead, it is clear that 2011 will defi ne the sort of 

Europe that emerges in the future.

Building the economic recovery will be just as important in the next 12 months. Fiscal 

consolidation, structural reforms and growth-related reforms must be the priority. 

A central part of our new approach will be the new European semester, which 

combines  tighter  fi scal  rules,  by  reinforcing  the  Stability  and  Growth  Pact, 

with  eff ective  economic  coordination.  This,  together  with  adoption  of  the 

Commission’s proposals on economic governance, before the summer, will be a 

quantum leap in terms of how we deal with economic issues in Europe. 

From energy to innovation, from the digital agenda to education, from industry 

to  the  environment,  we  need  to  stimulate  growth  in  Europe’s  new  economy. 

We cannot go back to the imbalances that existed before the crisis. Only through 

new forms of growth will we see a return of confi dence and the creation of new 

jobs. The Commission will make proposals in every one of these areas so that 

we have a medium-term strategy to back up our short-term crisis management.

4

 
 
During the last 12 months, we have kicked off  the debate on how Europe can 

best invest its resources. I want to see the European Union concentrate on action 

that  helps  our  economies  grow  and  stimulates  jobs.  We  need  to  invest  our 

money where we get most value for it. And we should invest it where it leverages 

growth and delivers on our European agenda. The quality of expenditure should 

be the yardstick for us all.

My approach is that the European Union must provide value added and deliver real 

benefi ts to its citizens. We need to increase the benefi ts for citizens and businesses 

that are brought from the single market. We need to protect consumers better and 

make sure that companies are able to compete fairly across borders. 

Europe must also have a single market of citizens’ rights and values. A fundamental 

dimension  of  our  Europe  is  building  an  area  of  freedom,  security  and  justice. 

We are working hard to implement the Stockholm action plan. We will make a 

real push on asylum and legal and illegal migration. 

How Europe can better project itself politically and economically in the world 

has never been more important. As the strategic partnerships of the 21st century 

emerge, Europe should seize the chance to defi ne its future. I am impatient to 

see the Union play the role in global aff airs that matches its economic weight. 

Our partners are watching and are expecting us to engage as Europe, not just 

as  27  individual  countries. The  establishment  of  the  European  External  Action 

Service  is  a  major  step  forward  in  bringing  coherence  to  our  external  action. 

From  the  G20  to  the  development  agenda  for  the  millennium  development 

goals, I am proud to say the Commission is now contributing to a much more 

assertive role of the European Union. 

The  year  2010  has  been  about  delivering  policies  that  make  a  diff erence 

to  our  citizens.  To  achieve  that,  we  have  introduced  important  changes  to 

the  way  our  institutions  work.  I  have  had  the  privilege  to  lead  a  new  team  of 

Commissioners. It has been a tough fi rst year, but I’m proud of the central role 

that  the  Commission  has  played  in  steering  the  European  Union  through  the 

economic crisis and designing the policy response. The Commission’s proposals 

have set the agenda and provided the basis for the European Council to take the 

main strategic decisions. The European Council has now become an institution 

in  its  own  right  with  a  permanent  President. This  is  a  welcome  development 

that provides stability and consistency to the representation of the 27 Member 

States. With a reinvigorated European Parliament that has new responsibilities, 

we have the stable institutional framework for the next few years that is essential 

if the European Union is to emerge stronger from this crisis.

The 2010 General Report gives a detailed overview of the activities of the European 

Union over the last year. I hope it stimulates more debate on the work that we do. 

José Manuel Barroso

5

G E N E R A L R E P O RT 2010   |   F O R E W O R D 

CHAPTER 1
DRIVING TOWARDS RECOVERY

 
The challenges that emerged to the EU’s economic 

stability throughout the year were addressed with 

determination by the EU institutions. 

The EU resolutely tackled the immediate threats 

to the public finances of Greece and Ireland, 

and to the stability of the euro. 

In order to respond to the many challenges arising 

throughout the year the EU acted quickly and 

decisively to enhance short-term stabilisation. 

It then embarked on a far-reaching exercise of medium-

term fiscal consolidation and reform of budgetary and 

economic surveillance.

The rapid design and implementation of first an 

emergency loan facility to Greece and then additional 

temporary financial support mechanisms for the euro 

area as a whole allowed Greece to begin repairing its 

domestic finances. Later in the year, the same prompt 

response made it possible to contain the risks posed by 

Ireland’s acute economic difficulties. Steps were taken 

to provide a permanent European Stability Mechanism 

to come into effect as from 2013.

In parallel, new controls were introduced for the 

financial system, designed to prevent the recurrence 

of the problems that provoked the crisis of the 

last two years. Meanwhile, the EU worked with 

international partners to seek common action on 

issues in global economic governance that can 

reinforce growth and stability, promote trade and 

ensure a level playing-field.

EU leaders agreed at the June European Council 

on the European Commission’s proposal for a 

10-year programme for switching to high, 

sustainable growth. This Europe 2020 strategy (1), 

based on the political guidelines that President 

Barroso outlined for the new Commission in late 2009, 

will maximise the EU’s assets, in particular the single 

market, and equip it for success in a rapidly changing 

world. It envisages full engagement of the Member 

States and identifies specific areas of action to turn 

ambition into achievement.

Linked to the Europe 2020 strategy, the EU approach 

to trade, enterprise, competition and the single market 

is being fine-tuned and updated. The full range of 

policies — from employment to environment, from 

citizens’ rights to cohesion — are being refocused to 

ensure that the benefits are felt right across the EU.

E C O N O M I C  R E C O V E R Y  A N D  S T R E N G T H E N E D  G O V E R N A N C E

As the events of the year so graphically demonstrated, what happens 
in one Member State may affect all the others. Restoring the EU as 
a  whole  to  economic  equilibrium  meant  supporting  the  Member 
States  most  in  need.  The  EU’s  principle  of  solidarity  took  a  very 
tangible form as joint action brought stability to national finances 
through  providing  access  to  credit.  In  response  to  the  challenges 
faced by Greece, and to safeguard financial stability in the euro area 
as a whole, the EU rapidly set up temporary mechanisms to supply 
necessary  lending,  combined  with  strict  policy  conditions  to  put 
economies  back  on  a  sound  footing.  It  thus  bolstered  confidence 
in euro-area public finances and in the credibility of the currency. 
It  also  promoted  responsibility,  particularly  among  the  Member 
States concerned by mounting debt, which took their own vigorous 
action to consolidate public finances.

The  events  —  and  the  proposed  solutions  —  also  generated  an  increased 

consensus  among  Member  States  and  EU  institutions.  It  became  evident  that 

assuring the future for the EU and its citizens depended on Member States getting 

a  fi rmer  grasp  on  the  way  that  they  run  their  national  economies.  As  a  result, 

the  EU  took  steps  to  strengthen  and  modernise  economic  governance  within 

the euro area and the wider EU by boosting coordination of fi scal and structural 

policies  and  reforms,  including  new  attention  to  monitoring  competitiveness. 

A task force chaired by Herman Van Rompuy, President of the European Council, 

made a number of recommendations calling for stricter adherence to the rules 

of the Stability and Growth Pact and fi scal prudence. The EU also acted to tighten 

up  the  rules  governing  the  EU’s  economic  and  monetary  union,  including 

through enhanced surveillance of national budget plans, and a strengthening of 

sanctions against Member States that pursue irresponsible fi scal policies. 

8

‘The European Commission’s top 
priorities right now — economic 
governance, the single market, 
innovation, industrial policy, jobs.’ 
José Manuel Barroso, 14 October

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German Chancellor Angela Merkel (right) 
and French President Nicolas Sarkozy 
(left) accompany Georgios Papandreou, 
Prime Minister of Greece, which was the fi rst 
Member State to benefi t from EU assistance.

 
 
SUPPORTING MEMBER STATES IN NEED
The  EU  took  measures  to  secure  fi nancial  stability,  fi rst  through  conditional 

fi nancial  assistance  to  Greece  and  then  through  the  mechanisms  for  the  euro 

area and the EU as a whole. In May, specifi c access to temporary fi nancing was 

provided  for  Greece,  which  was  unable  to  raise  money  on  fi nancial  markets 

at  aff ordable  rates  because  of  investors’  fears  that  the  country  might  default. 

The deal (2), in which Member States (together with the International Monetary 

Fund (IMF) and the European Central Bank (ECB)) made available €110 billion, 

was based on strict conditions, a comprehensive and ambitious programme of 

structural  reforms,  and  continuous  monitoring.  The  package  protects  Greece 

from the need to raise money on the markets for up to two years, after which it is 

expected to return to market fi nancing.

The  EU  moved  with  great  speed,  delivering  fi nancial  support  in  the  form  of  a 

guarantee within 10 days of the request. The rapid provision of this assistance 

was  all  the  more  remarkable  in  view  of  the  fact  that  the  EU  treaties  did  not 

provide explicitly for instruments to deal with such an extraordinary situation. 

Euro-area  leaders  had  to  establish  a  fi nancial  rescue  mechanism  on  the  spot 

that  fully  respected  both  EU  and  Member  State  law.  The  Commission  played 

a  prominent  role  in  the  conception  and  adoption  of  the  package,  pooled  the 

bilateral  contributions  into  one  common  loan  and  negotiated  the  conditions 

with the Greek authorities.

‘Our determination is clear. The Heads of 
State or Government of the euro area 
stand ready to do whatever is required 
to ensure the stability of the euro area as 
a whole.’ Herman Van Rompuy, Brussels, 
16 December

HOW THE EU HELPED GREECE 
AND IRELAND

In May, €110 billion was made available 
to Greece by the EU and the IMF.

In December, €85 billion was made 
available to Ireland by the EU, 
euro-area Member States, 
the United Kingdom, Sweden and 
Denmark, the IMF and the Irish Treasury 
and national pension reserve funds.

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Concerted EU action made it possible 
to contain the risks posed by acute 
economic diffi  culties in Ireland, 
where austerity measures provoked 
widespread public protest.

Then, in response to wider concerns about contagion in the euro area, a further 

and  even  more  ambitious  common  eff ort  by  all  EU  institutions  and  Member 

States created — during the weekend of 7 to 9 May — two temporary support 

mechanisms  for  Member  States.  A  total  of  €500  billion  was  made  available, 

consisting  of  a  €60  billion  stabilisation  mechanism  for  all  Member  States, 

administered  by  the  Commission  —  the  European  Financial  Stabilisation 

Mechanism  (EFSM)  —  and  an  intergovernmental  facility  of  €440  billion  for 

euro-area  Member  States  —  the  European  Financial  Stability  Facility  (EFSF) 

—  administered  by  a  specially  created  vehicle (3).  A  further  €250  billion  from 

the  IMF  supplemented  the  sum.  This  unprecedented  three-year  stabilisation 

programme, with access subject to strict conditions, guarantees highly eff ective 

temporary support to euro-area countries experiencing soaring bond yields.

9

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

 
 
 
THE DETAILS OF THE 
NEW TEMPORARY MECHANISMS

The European Financial Stabilisation 
Mechanism (EFSM) consists of a maximum 
of €60 billion and is run by the European 
Commission, making use of the EU budget 
to raise money on the fi nancial markets 
and on-lend the proceeds to a benefi ciary 
Member State. The European Financial 
Stability Facility (EFSF) can provide up 
to €440 billion to help any euro-area 
country at risk of defaulting on its public 
debt. It is a special-purpose vehicle that 
will issue its own debt in order to provide 
loans in the event that a euro-area 
country is faced with serious fi nancial 
diffi  culties. The facility’s debt will be 
guaranteed by members of the euro area, 
as well as by Sweden and Poland, which 
volunteered to take part.

In  late  November,  the  Irish  government  requested  fi nancial  assistance  as  the 

country  ran  into  new  diffi  culties  in  fi nancing  its  borrowing.  After  intensive 

coordination, the Council, the Commission and the ECB agreed that providing 

assistance  to  Ireland  was  warranted  to  safeguard  fi nancial  stability  in  the  EU 

and  in  the  euro  area.  They  off ered  support  under  the  EFSM  and  EFSF  —  the 

fi rst time the new scheme was used. Finance ministers formalised the loan and 

the  conditions  attached  to  it  in  early  December (4). The  loans  will  be  provided 

on  the  basis  of  a  programme  negotiated  with  the  Irish  authorities  by  the 

European  Commission  and  the  IMF,  in  liaison  with  the  ECB.  The  three-pillar 

programme  foresees:  an  overhaul  of  the  Irish  banking  system;  restoration  of 

fi scal  sustainability,  including  correction  of  the  country’s  excessive  defi cit  by 

2015; and structural reforms to enhance growth. European assistance (including 

bilateral loans) amounts to €45 billion of the €85 billion package.

The  ECB  maintained  its  key  policy  interest  rates  at  historically  low  levels 

throughout  the  year,  alongside  some  non-standard  measures  to  ensure  an 

effi  cient  transmission  of  the  very  low  interest  rates  to  the  economy  and, 

ultimately,  to  prices.  A  securities  market  programme  enabled  it  to  purchase 

euro-area  public  and  private  bonds,  and  to  ensure  depth  and  liquidity  in 

dysfunctional  segments  in  the  government  bond  market  so  as  to  restore  the 

proper functioning of the monetary policy transmission mechanism.

INFLATION AND INTEREST RATES 

Key interest rate on money loaned 
by the European Central Bank

Infl ation rate

% 

6

5

4

3

2

1

0

– 1

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Sources: European Commission/ECB. 

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ECB President Jean-Claude Trichet 
repeatedly stressed the ability of the 
euro to surmount the turbulence and 
pursued a policy of keeping interest rates 
at historically low levels. 

10

 
 
 
 
At the same time, several countries started to implement consolidation measures 

to  reduce  budget  defi cits  and  restore  fi scal  sustainability  within  the  common 

framework  provided  by  the  EU’s  Stability  and  Growth  Pact. The  solidarity  that 

the  EU  expresses  with  Member  States  must  be  matched  by  their  exercise  of 

responsibility. The strict conditionality written into the stabilisation mechanisms 

created during the year presupposes that benefi ciary states play their role fully 

in  containing  public  spending  and  introducing  reforms  that  will  bring  their 

fi nances back into balance.

The  October  European  Council  agreed  that  Member  States  should  establish 

THE PROPOSED TREAT Y CHANGE

a  permanent  mechanism  for  crisis  resolution  to  safeguard  the  fi nancial 

stability  of  the  euro  area  as  a  whole.  The  President  of  the  European  Council 

consulted  with  the  members  of  the  European  Council  on  a  limited  treaty 

change. The result was agreement at the December European Council that the 

treaty  should  be  amended  to  allow  for  the  creation  of  the  European  Stability 

Mechanism (ESM). The aim is for the ESM to replace the EFSF and the EFSM in 

2013. It will be activated by mutual agreement of the euro-area Member States 

in situations where the stability of the euro area as a whole is at risk.

GROWTH AND CRISIS 
Growth in GDP, real annual change (%) 
2011–12 are forecasts

The following paragraph shall be 
added to Article 136 of the Treaty on 
the Functioning of the European Union: 
‘3. The Member States whose 
currency is the euro may establish a 
stability mechanism to be activated if 
indispensable to safeguard the stability 
of the euro area as a whole. The granting 
of any required fi nancial assistance under 
the mechanism will be made subject to 
strict conditionality.’

China

USA
EU
Japan

10

5

0

-5

-10

2000

2002

2004

2006

2008

2010

2012

Source: European Commission.

11

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

THE EURO  A SOUND VALUE AMID 
TURBULENCE

STRENGTHENED ECONOMIC GOVERNANCE
The  crisis  revealed  a  lack  of  respect  for  rules  on  budgetary  discipline,  and 

The fundamentals of the euro are strong. 
It brings low infl ation, a balanced current 
account, and underpins respectable 
economic growth — and it is the 
currency of reserve for large parts of the 
world. The euro withstood the pressures 
that it came under during the year, 
despite some volatility in its exchange 
rate. There was no crisis of the euro. 
The diffi  culties arose from individual 
Member States in the euro area that did 
not keep their public fi nances in order or 
improve their competitiveness.

inability to ensure that Member States follow sound economic policies oriented 

towards  competitiveness.  Over  the  course  of  the  year,  the  Parliament,  Council 

and Commission worked together on the construction of a new architecture to 

remedy these damaging defi ciencies. They agreed on the principle of creating:

(cid:23)a  stronger  surveillance  regime,  stricter  and  broader,  covering  budgetary, 

macroeconomic and structural policies and competitiveness gaps. The regime will 

refl ect the interdependence that is central to the European economy. A scoreboard 

of  indicators  is  envisaged  to  ensure  early  identifi cation  of  large  and  increasing 

divergences, which will trigger recommendations for corrective action — backed 

by eff ective enforcement mechanisms. The new arrangements will promote the 

structural reforms, innovation and trade that can put Europe back on track in terms 

of sustainable and balanced growth, and create the jobs for the future.

Estonia joins the euro

The continued appeal of the euro was demonstrated when Estonia won the right to become a member of the euro area. Its 
request to join the single currency was accepted by the EU in June in order for it to become the 17th member of the club 
in January 2011. Estonia has a healthy economy and thereby fulfi ls the criteria for euro-area membership. It has managed 
to keep infl ation and interest rates low. The country recorded a budget defi cit of 1.7 % of GDP last year, well below the EU’s 
3 % limit. Government debt was also low — just 7.2 % of GDP. The economy is highly fl exible and, while not immune to the 
crisis, has shown its ability to operate and adjust under a fi xed exchange rate for close to two decades.

(cid:23)a peer review of draft national budgets — known as the European semester, 

since it will take place in the fi rst half of every year. As from 2011, Member States 

will present their stability and convergence programmes to the Commission in 

order to verify that they conform to the rules of the Stability and Growth Pact. 

To assure the quality of the necessary data, new powers have been agreed to 

allow verifi cation of Member States’ statistics. The review will also take account 

of plans to boost competitiveness and introduce necessary structural reforms. 

The  result  will  be  an  enhancement  of  economic  transparency  and  a  more 

joined-up approach to budgeting, which will also be an asset for Member States 

as they plan, discuss and adopt their national budgets. In practice, the European 

semester will align the processes under the Stability and Growth Pact and the 

broad economic policy guidelines. It will cover fi scal discipline, macroeconomic 

stability and policies to foster growth in line with the Europe 2020 strategy.

(cid:23)a reinforcement of the key rules of economic and monetary union — notably 

tightening up the Stability and Growth Pact, placing new emphasis on prudent 

fi scal  policy-making  in  the  medium-term,  and  a  stronger  focus  on  keeping 

debt  under  control.  Sanctions  are  envisaged  for  Member  States  with  fi scal 

policies that are not consistent with the European dimension. The European 

Parliament too called for priority to debt surveillance in a May resolution on 

the long-term sustainability of public fi nances.

Estonian Finance Minister Jürgen Ligi 
holds a symbolic euro coin during 
a ceremony in Brussels.

12

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Legislating for better economic governance

In September the Commission delivered a comprehensive package of legislative 
measures to reinforce economic governance in the EU and the euro area. It aims at 
broader and enhanced surveillance of fi scal policies, as well as of macroeconomic 
policies and structural reforms. It also provides new enforcement mechanisms 
for non-compliant Member States.

Four of the six proposals deal with fi scal issues, including a wide-ranging reform of 
the Stability and Growth Pact, so that sanctions will be the normal consequence 
for  countries  in  breach  of  their  commitments.  Two  other  regulations  aim  at 
detecting and addressing emerging macroeconomic imbalances within the EU 
and the euro area.

(cid:23)A regulation reinforcing the preventive role of the Stability and Growth Pact (5), 
to ensure that Member States follow prudent fi scal policies in good times to 
build up the necessary savings for bad times. Monitoring of public fi nances 
will be based on prudent fi scal policy-making, and the Commission can issue 
a warning in case of signifi cant deviations.

(cid:23)A  regulation  boosting  the  corrective  role  of  the  Pact (6)  so  that  debt 
developments  will  be  followed  more  closely,  and  the  excessive  defi cit 
procedure can be invoked in the case of deviations. Member States whose debt 
exceeds 60 % of GDP should take steps to reduce it at a satisfactory pace. The 
regulation defi nes a debt-to-GDP ratio above 60 % as suffi  ciently diminishing 
if  its  distance  with  respect  to  the  60 %  has  reduced  over  the  previous  three 
years at a rate of the order of 1/20th per year. An excessive defi cit procedure 
can be opened in the case of deviations.

(cid:23)A regulation on eff ective enforcement of budgetary surveillance in the euro 
area (7), backing up the changes in the Pact with a new set of gradual fi nancial 
sanctions  for  euro-area  Member  States.  In  preventive  measures,  an  interest-
bearing  deposit  should  be  the  consequence  of  signifi cant  deviations  from 
prudent  fi scal  policy-making.  In  the  corrective  part,  a  non-interest-bearing 
deposit amounting to 0.2 % of GDP would apply upon a decision to place a 
country in excessive defi cit. This would be converted into a fi ne in the event 
of non-compliance with the recommendation to correct the excessive defi cit. 
To  ensure  enforcement,  a  ‘reverse  voting  mechanism’  will  be  employed 
for  imposing  sanctions:  this  means  that  the  Commission’s  proposal  for  a 
sanction  will  be  considered  adopted  unless  the  Council  turns  it  down  by 
qualifi ed majority.

(cid:23)A  directive  on  requirements  for  the  budgetary  framework  of  the  Member 
States (8)  will  ensure  that  the  objectives  of  the  Pact  are  refl ected  in  national 
budgetary  frameworks  (including  accounting  systems,  statistics,  forecasting 
practices, fi scal rules, budgetary procedures and fi scal relations with local or 
regional authorities). While taking account of Member States’ specifi c needs 
and preferences, the directive sets out requirements that national budgetary 
frameworks should respect so as to ensure minimum quality and consistency 
with the EU rules.

(cid:23)A  regulation  on  the  prevention  and  correction  of  macroeconomic 
imbalances (9),  introducing  the  excessive  imbalance  procedure  as  a  new 
element of the EU’s economic surveillance framework. This regular assessment 
of  the  risks  of  imbalances  will  permit  the  Commission  to  launch  in-depth 
reviews for Member States at risk. For Member States with severe imbalances 
or imbalances that put at risk the functioning of EMU, the Council may adopt 
recommendations  and  open  an  excessive  imbalance  procedure.  A  Member 
State would then have to present a corrective action plan that will be vetted 
by the Council, which will set deadlines for corrective action. Repeated failure 
to take corrective action will expose a euro-area Member State to sanctions.

13

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

(cid:23)A regulation on enforcement measures to correct excessive macroeconomic 
imbalances  in  the  euro  area (10),  under  which  a  euro-area  Member  State 
repeatedly  failing  to  act  on  Council  recommendations  to  address  excessive 
imbalances will have to pay a yearly fi ne equal to 0.1 % of its GDP. The fi ne can 
be  prevented  only  by  a  qualifi ed  majority  vote  (‘reverse  voting’,  see  above), 
with only euro-area Member States voting.

How the European semester will operate

In  the  new  peer  review  of  draft  national  budgets,  Member  States  and  the 
Commission will look at macro-fi nancial performance as well as where the EU 
stands in relation to the fi ve targets set in the Europe 2020 strategy: increasing 
employment; increasing research; cutting greenhouse gas emissions; improving 
education levels; and promoting social inclusion. 

The  fi rst  European  semester  will  start  in  January  2011.  It  brings  together  the 
fi scal  discipline  of  the  Stability  and  Growth  Pact,  the  structural  reforms  of  the 
Europe 2020 strategy, and a new mechanism to prevent macro-imbalances. The 
semester aims at prior policy guidance and preventive budgetary surveillance, 
at a time when these matter most: budgetary policy will be discussed at EU level 
before budgets are agreed at national level.

The cycle will start in January with an ‘annual growth survey’ prepared by the 
Commission,  reviewing  economic  challenges. This  report  will  be  discussed  by 
the  European  Council  in  early  spring,  which  will  identify  the  main  economic 
challenges  facing  the  EU  and  give  strategic  advice  on  policies  for  the  EU  and 
the  euro  area.  Taking  this  guidance  into  account,  the  Member  States  will 
present their medium-term budgetary strategies in their national stability and 
convergence programmes. At the same time, they will draw up national reform 
programmes setting out the action to be undertaken to strengthen their policies 
in areas such as employment and social inclusion. All these programmes will be 
issued simultaneously in April.

The Commission will then evaluate the policies set out by Member States in their 
programmes, and — should these not be suffi  cient — recommend the Council to 
issue country-specifi c policy guidance. Each July, the European Council and the 
Council will provide policy advice before Member States fi nalise their budgets for 
the following year. An essential aspect of the semester is that governments look 
at their own national reforms in related policy fi elds. In backing the semester, 
Member States have indicated that they are prepared to take ownership of this 
indispensable ingredient for success.

Meanwhile,  making  use  of  the  existing  rules,  the  Commission  maintained  its 

routine  surveillance  of  Member  States’  fi nances.  During  2010,  the  excessive 

defi cit procedure was initiated in 24 countries in breach of the rules, requiring 

them to correct their excessive defi cit situation.

Budgetary expansion played a crucial role in maintaining an acceptable level of 

economic  activity  and  growth.  However,  in  order  to  make  full  use  of  Europe’s 

competitive  advantage,  it  is  crucial  that  Member  States  now  implement 

structural reforms to support private demand and innovative growth.

14

‘The work on the Stability Pact is 
not simply about being punitive to 
Member States or about rectifying past 
mistakes ... We must not lose sight of the 
wider challenge of improving Europe’s 
structural and sustainable growth rate 
and its general economic performance. 
This was the focus of the Europe 2020 
strategy ... The answer to those who fear 
that fi scal retrenchment will cut economic 
growth rates is to focus better on the 
underlying structural factors that hinder 
our economic performance and to remedy 
them.’ Herman Van Rompuy, speaking in 
the European Parliament, 24 November

How EU emergency measures averted collapse

In 2009 the EU-27 countries put 9.3 % of their gross domestic product on the line 
to save the banking system from failure during the fi nancial crisis.

Throughout  the  year,  the  Commission  continued  to  authorise  national  state 
aids to banks, wherever it judged that the measure was an appropriate remedy 
to  a  serious  disturbance  in  the  national  economy.  This  temporary  support  to 
banks  allows  them  to  ensure  adequate  levels  of  lending  to  companies  in  the 
real economy and helps stabilise fi nancial markets by restoring confi dence. The 
conditions attached ensure, at the same time, that competition is not distorted.

Altogether,  between  October  2008  and  July  2010  the  Commission  approved 
Member State crisis measures for the banking sector with an overall maximum 
volume  of  €4 589  billion.  Guarantee  schemes  and  ad  hoc  interventions 
account  for  over  three  quarters  of  this  volume,  amounting  to  €3 485  billion. 
Between August 2008 and July 2010 the Commission approved recapitalisation 
measures  for  a  volume  of  €546  billion.  For  the  same  period  the  Commission 
approved  impaired  assets  interventions  and  liquidity  measures  amounting 
to  €558 billion.

The exceptional state aid framework adopted at the beginning of the crisis, to 

ease  some  of  the  strains  on  the  real  economy,  was  extended  for  another  year 

by  a  Commission  decision  in  December,  with  new  conditions  attached.  Once 

growth  takes  hold,  exit  strategies  are  to  be  put  in  place  so  that  all  Member 

States reduce support — although in a diff erentiated manner that refl ects their 

varying economic and fi scal circumstances. It was recognised that Member State 

economies are not going to recover their dynamism or competitive edge if they 

rely  excessively  on  backing  from  their  governments. The  agreement  is  that  as 

from 2011, when the economic recovery is expected to have gained momentum, 

fi scal  stance  across  all  Member  States  will  become  more  restrictive,  so  as  to 

promote sustainable growth.

For  the  fi nancial  sector,  the  gradual  disengagement  from  state  support  has 

already started. The process will occur through the tightening of conditions for 

new government guarantees from July 2010 through a fee increase, and through 

a closer scrutiny of the viability of heavy guarantee users. As of 1 January 2011, 

every bank in the EU having recourse to state support in the form of capital or 

impaired asset measures will have to submit a restructuring plan.

15

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

F I N A N C E A N D CO M P E T I T I O N AT T H E  S E R V I C E O F C I T I Z E N S

The  economic  crisis  revealed  significant  gaps  in  the  regulatory 
and  supervisory  framework  of  the  financial  sector.  Profound  and 
comprehensive  reforms  have  been  put  in  place,  to  ensure  that 
the financial sector is a reliable partner in the future growth of EU 
prosperity — and to protect the citizens and businesses that have 
put their trust in banks.

If the EU is to remain competitive it must champion a strong fi nancial sector, a 

sector in which banks, not taxpayers, pay up front to cover the costs of their own 

risks  of  failure.  Sound  government  fi nances  and  responsible  fi nancial  markets 

give the confi dence and economic strength for sustainable growth.

The  most  fundamental  change  is  the  creation  of  a  new  supervisory  structure, 

comprising  three  EU  authorities  with  binding  powers  over  the  EU’s  fi nancial 

sector,  and  the  creation  of  a  European  Systemic  Risk  Board (11).  In  restoring 

troubled banks to health, the EU has conducted tests on their ability to withstand 

future shocks. And in its competition policy the EU has struck a careful balance in 

permitting state aid, under tight conditions, to support recovery while ensuring 

that the market is not distorted.

THE NEW FINANCIAL SUPERVISION ARCHITECTURE
Financial  supervision  took  on  a  genuinely  European  dimension  during  the 

year,  to  match  the  reality  that  fi nancial  companies  and  markets  operate 

mostly  at  a  European  level.  The  reform  of  fi nancial  supervision  is  unique  to 

Europe  —  nowhere  else  in  the  world  has  such  a  supervisory  framework  been 

created. The new framework, adopted in November, strengthens fi nancial sector 

supervision  and  reduces  risks,  making  Europe  a  safer  place  economically  and 

more attractive to investors.

For fi nancial markets to have the confi dence and trust of the public and investors, 

supervisory authorities need suffi  cient information and the power to act early 

when a problem arises. So the EU designed and agreed on a common approach 

that  provides  joined-up  and  consistent  oversight  of  fi nancial  companies 

across borders.

Tough new powers have been vested in new EU-level authorities. A consensus 

was reached on a European supervisory structure that responds to the interests 

of  Member  States  and  the  European  Union  —  and  above  all  to  the  needs  of 

European  citizens,  consumers  and  investors.  The  new  authorities  can  settle 

disputes  among  national  fi nancial  supervisors  and  ban  over-risky  fi nancial 

products  and  activities.  And  if  national  supervisors  fail  to  act,  then  the  new 

authorities may also impose decisions directly on fi nancial institutions so as to 

remedy breaches of EU law. Attention will be focused on weak spots in fi nancial 

markets, and country-by-country reporting will be introduced.

16

Within the new structure:

(cid:23)Three  European  supervisors  have  been  set  up  for  the  banking  sector,  the 

insurance  sector,  and  securities  trading,  respectively. These  micro-economic 

surveillance bodies replace the EU’s current system of consultative committees 

and will have the powers necessary to ensure sound oversight across Europe, 

including of large, cross-border banking groups. They will adhere to a single 

rulebook,  solving  disagreements  between  national  supervisors,  monitoring 

the correct application of EU law and intervening in emergency situations.

(cid:23)A  completely  new  macro-fi nancial  surveillance  body  was  established  to 

monitor  threats  to  fi nancial  stability.  This  so-called  European  Systemic  Risk 

Board is to be chaired by the President of the ECB. It will continuously monitor 

threats  to  the  EU  economy  and  off er  macro-prudential  oversight  of  the 

fi nancial system, something that had been lacking under the old system.

REFORMS TO FINANCIAL REGULATION
Reform  of  the  fi nancial  sector  was  required  to  ensure  institutions  are  not 

EUROPEANS CONTINUE TO OFFER 
THEIR SUPPORT 

only  well  supervised  but  also  thoroughly  regulated.  The  fi nancial  crisis 

demonstrated how a lack of eff ective regulation created incentives for fi nancial 

institutions to pursue excessive risk-taking in order to achieve short-term gains. 

The  interconnection  among  fi nancial  institutions  led  to  systemic  eff ects  with 

serious consequences for the entire sector. The situation was aggravated by the 

absence  of  regulation  which  would  make  possible  the  orderly  winding  up  of 

banks without endangering fi nancial stability.

Measures  adopted  to  boost  regulation  and  responsibility  within  the  fi nancial 

Europeans continue to support economic 
coordination between Member States, 
and 7 of every 10 respondents see 
stricter policing of the fi nancial industry 
as the best way of avoiding a further 
crisis. These were two of the fi ndings of 
a second European Parliament survey 
on the economic crisis, carried out 
by TNS Sofres between August and 
September 2010.

services sector included:

(cid:23)a  directive  to  regulate  the  activities  of  alternative 

investment  fund 

managers (12):  hedge  funds  and  private  equity  will  no  longer  operate  in  a 

regulatory  void  outside  the  scope  of  supervisors.  The  new  rules  allow  the 

marketing of funds, but subject to strict requirements, with close monitoring 

and supervising of risk.

(cid:23)new  requirements  for  the  over-the-counter  derivatives  market (13)  to  avoid 

damaging speculation — requiring use of central clearing, logging of trades, 

and  controls  on  short-selling.  A  taskforce  is  looking  at  the  eff ects  of  naked 

credit default swaps on sovereign debt.

17

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

The  Commission  also  initiated  a  wide  range  of  actions  to  keep  up  the 

momentum of fi nancial sector reform and to widen its scope. These proposals 

and consultations include:

(cid:23)a Commission action plan (14) so that banks in diffi  culty can either be returned 

to  health  without  state  support,  or  allowed  to  fail  without  damaging  the 

banking system as a whole. The mechanisms will be funded through levies or 

taxes on fi nancial institutions. During the fi nancial crisis, governments in the 

EU provided public support to fi nancial institutions amounting to 16.5 % of EU 

GDP. The support was necessary to ensure the stability of the fi nancial system, 

but it imposed a heavy burden on public budgets.

(cid:23)a  consultation  on  credit  rating  agencies,  to  re-examine  the  regulatory 

framework in the light of concerns that fi nancial institutions and institutional 

investors may be relying too heavily on external ratings and do not carry out 

suffi  cient internal credit risk assessments, which may lead to volatile markets 

and instability of the fi nancial system.

(cid:23)a  consultation  on  packaged  retail  investment  products,  aimed  at  raising 

standards  of  protection  for  customers  and  outlining  possible  measures  for 

improving  the  transparency  and  comparability  of  investment  products  and 

ensuring that eff ective rules always govern sales.

(cid:23)a  consultation (15)  on  countercyclical  capital  buff ers  for  banks,  to  ease 

fl uctuations  in  the  fi nancial  system,  by  ensuring  that  banks  could  draw  on 

reserves accumulated in economically good times so as to continue lending 

when economic conditions worsen. 

(cid:23)a  proposal  for  a  thorough  revision  of  the  deposit  guarantee  schemes  and 

investors’  compensation,  as  well  as  a  reorientation  of  insurance  guarantee 

schemes in order to increase protection of investors and savers. 

LIMITING BANKERS’ BONUSES

A  central  principle  of  the  EU’s  reform  of  the  fi nancial  system  was  to  get  more 

Under new rules agreed in December (17), 
bankers will receive a maximum of a 
quarter of their bonuses in immediate 
cash payouts, with the remainder deferred 
or held in shares for a minimum of three 
years. The rules also provide for national 
regulators to rescind bonuses paid 
to senior managers whose risks were 
discovered to have produced losses at 
fi nancial companies. The rules also seek a 
direct link between fi xed salary and pay.

capital  and  capital  of  better  quality  into  the  system.  Strengthening  capital 

requirements  should  ensure  that  a  fi rm  has  adequately  addressed  the  risks 

associated with its trading book so that it refl ects potential losses. The reform 

also  seeks  to  ensure  minimum  liquidity  standards,  eff ective  leverage  ratios, 

capital sanctions for banks with irresponsible remuneration policies, and proper 

capital requirements for the complex fi nancial instruments that contributed to 

the  fi nancial  crisis.  Reforms  to  capital  requirements  are  not  limited  to  Europe. 

Within  the  Basel  Committee  on  Banking  Supervision,  the  European  Union  is 

negotiating with international partners. These reforms are being implemented 

in the EU through amendments (16) to the capital requirements directive.

Overall,  these  measures  help  to  keep  EU  markets  attractive,  and  to  ensure 

that  the  European  economy  has  the  means  to  promote  growth.  But  fi nancial 

regulation is also about improving the daily life of European citizens, simplifying 

their everyday lives and bringing them the transparency and security that they 

should expect from Europe. 

18

COMPETITION POLIC Y SHAPING RESPONSES

Competition policy, and in particular the coherent and predictable enforcement 

of  state  aid  rules,  played  an  important  role  in  the  response  to  the  crisis. 

Extraordinary  rescue  measures  adopted  at  the  beginning  of  the  crisis  proved 

successful as they were capable of restoring fi nancial stability and of supporting 

economic recovery. State aid policy has helped shape governments’ responses 

to the crisis and also prevented a meltdown of the fi nancial system. This avoided 

subsidy  races  between  Member  States,  reduced  distortions  of  competition 

and limited the incentives for excessive risk-taking. The Commission decisions 

facilitated  access  to  credit  and  provided  a  mechanism  for  the  coordination  of 

Member States’ bailouts of fi nancial institutions.

The  Commission  has  also  explicitly  tackled  moral  hazard.  This  arises  when  a 

company believes it can behave irresponsibly with impunity, convinced that it 

will be protected from failure because its collapse would provoke unacceptably 

wide repercussions for society. It is for this reason that the Commission ensured 

that aid was not granted as a mere gift to failing businesses, but that all bailouts 

come  with  conditions  —  a  prerequisite  for  a  return  to  normal  functioning  of 

the  market.  Following  the  initial  rescue  stage,  aid  notifi ed  to  the  Commission 

was  cleared  on  the  express  condition  that  the  restructuring  plans  or  viability 

reviews of banks receiving aid were to be approved by the Commission. There 

were  often  requirements  attached  to  these  restructuring  plans,  for  example 

regarding  divestitures  or  behaviour  on  the  market  post-restructuring.  Loans 

and guarantees were granted on the same terms and on the basis of the same 

European-wide rules. The EU economy and EU taxpayers are better off  as a result. 

The measures helped fi nancial institutions regain viability. The Commission also 

adjusted  its  rules  on  state  guarantees  to  the  banking  sector  so  as  to  signal  to 

banks that they have to get ready for a disengagement from exceptional crisis-

related state support.

As from the start of 2011, new measures extend the requirement for restructuring 

plans to every bank in the EU having recourse to state support in the form of 

capital or impaired asset measures, and a new state aid framework for rescue and 

restructuring of banks is under development, to be followed by a review of the 

general rescue and restructuring guidelines for fi rms in diffi  culty.

Tangible competition measures for recovery

(cid:23)Maintaining a level-playing fi eld across Europe — such as ensuring that aid to the automotive sector does not impose 

any conditions on location

(cid:23)Preventing  bankruptcies  through  the  temporary  framework  allowing  Member  States  to  provide  access  to  fi nance  to 
viable fi rms, prolonged for 2011 with limited scope, stricter conditions and a focus on small and medium-sized enterprises 
(SMEs)

(cid:23)Support for ‘smart investments’ — such as through the ‘State aid broadband guidelines’ — to help economic recovery in 

the short run and bring long-term benefi ts for European competitiveness.

19

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Competition  encourages  companies  to  adapt  their  business  strategies, 

to  innovate  and  to  create  better  products  and  services.  In  turn,  this  leads  to 

providing  consumers  with  more  choice,  better  quality  and  lower  prices.  The 

application  of  an  EU-wide  competition  policy  ensures  that  no  matter  where 

businesses  are  located,  they  have  access  to  the  same  opportunities  across 

Europe. Competition policy drives innovation and growth by keeping markets 

open and competitive, so that businesses have the opportunity to prosper and 

consumers can reap the benefi ts.

To  ensure  that  consumers  have  more  choice  and  can  benefi t  from  more 

advantageous  prices,  the  Commission  adopted  a  regulation  that  exempts  a 

wide range of agreements between manufacturers and distributors for the sale 

of products and services (18). Companies with a modest presence on the market 

remain free to decide how their products are distributed as long as they avoid 

behaviour  obviously  harmful  for  consumers  and  competition,  such  as  price 

fi xing. Together  with  the  accompanying  guidelines (19),  the  regulation  aims  at 

promoting  Internet  distribution,  entitling  approved  distributors  to  sell  on  the 

Internet without limitation on quantities, customers’ location or prices.

In the energy sector, modifi cation of the environmental guidelines on state aid 

is  intended  to  help  the  emissions  trading  system  become  a  tool  for  low-cost 

compliance  and  an  incentive  for  investments  in  low-carbon  technologies. 

The regulation on state aid in the coal sector (20) — where Member States need 

to  be  able  to  continue  support  to  the  industry  as  long  as  coal  maintains  its 

major role in energy production in Europe — aims to assure fair competition by 

authorising aid for closure and for inherited costs.

The Commission intervened to ensure that planned national aids to the automotive 

sector respected state aid and single market rules. And it decided to end certain 

special provisions introduced during the crisis to allow Member States to provide 

emergency access to fi nance to prevent businesses from going bankrupt.

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The car industry remains an important 
sector in the EU economy.

20

 
 
G LO B A L  R E C O V E R Y  A N D  I N T E R N AT I O N A L  C O O P E R AT I O N

The EU operates in a globalised world. One of the EU’s main functions 
in this wider context is to shape global responses in the interest of its 
Member States and citizens. Economic downturns in the past have led 
to vicious circles of protectionism, subsidy races and worse. Getting the 
world economy back on track towards growth and prosperity requires 
global  leadership  and  multilateral  action.  In  this,  the  EU  cannot  act 
alone, and cannot build a regulatory reform agenda in isolation.

The  EU  took  a  leading  role  in  promoting  international  responses  to  the 

crisis.  It  was  prominent  in  discussions  within  the  G20,  the  premier  forum 

for  international  economic  cooperation,  where  the  EU  is  represented  by 

Commission  President  José  Manuel  Barroso  and  European  Council  President 

Herman Van Rompuy. At successive meetings the EU argued for global eff orts 

to fi ll in the gaps in fi nancial regulation and supervision at international level. 

It took a leading role in promoting new rules on bank capital. It kept up pressure 

for  eff ective  action  to  plug  defi cits  and  reduce  debt  while  stimulating  growth 

prospects.  And  it  pushed  strongly  for  a  global  agreement  on  bank  levies  and 

taxes.  Moreover,  in  order  to  ensure  that  trade  could  continue  to  play  its  role 

in economic recovery, the European Union played a pivotal role in monitoring 

major economies’ compliance with their commitment, made at the G20, not to 

introduce new barriers to free trade.

The most important event of 2010 in this respect was the G20 summit in Seoul 

in November, where the EU made progress in promoting joint action to boost 

global growth and jobs. A ‘Seoul action plan’ (21) commits the G20 further to global 

action for balanced growth, and is a clear recognition of joint responsibility under 

which all major economies have agreed to do their part to achieve rebalancing 

to tackle imbalances. The EU method of using indicators to trigger an assessment 

of  macroeconomic  imbalances  and  their  root  causes  was  backed  by  the  G20 

leaders. The  EU  also  helped  to  build  a  consensus  on  cooperative  solutions  to 

tensions on currency issues and trade. Leaders agreed to move to more market-

based exchange rates and enhance exchange rate fl exibility to refl ect underlying 

economic  fundamentals  and  refrain  from  competitive  devaluations  —  as  EU 

leaders had called for in advance of the summit. By endorsing the Basel III reform, 

the G20 also kept up the momentum for global fi nancial regulatory reform, a key 

priority for the EU. 

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The leaders of Germany, France,  
Italy, and the United Kingdom, 
together with European Council President 
Herman Van Rompuy and European 
Commission President José Manuel Barroso, 
take part in the G8 summit in Canada 
in June, along with the leaders of the 
United States, Canada, Japan and Russia.

21

G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

 
 
 
 
 
 
BASEL III

The  EU  secured  a  valuable  commitment  at  the  G20  summit  in  Seoul  to  fi ght 

Basel III is a comprehensive set of reform 
measures developed by the Basel 
Committee on Banking Supervision to 
strengthen the regulation, supervision 
and risk management of the banking 
sector. It aims to improve the banking 
sector’s ability to absorb shocks, refi ne 
risk management and governance, 
and strengthen banks’ transparency. 
It targets regulation both at the level of 
individual banks and system-wide across 
the sector. The Basel III reforms are part 
of the global initiatives to strengthen 
the fi nancial regulatory system that 
have been endorsed by G20 leaders, and 
implementation is envisaged in 2012.

protectionism  in  all  its  forms.  The  Commission  also  produced  a  series  of 

protectionist reports naming and shaming off enders, as part of a concerted eff ort 

to keep economies open and prevent intensifi cation of the eff ects of the crisis. 

The ‘Trade, growth and world aff airs’ communication (22) in November set out an 

assertive trade policy agenda for the next fi ve years, as the external plank of the 

EU’s bid to revitalise Europe’s economy, complementing major initiatives during 

the year on the internal market and on industry and innovation. It proposes a 

strategy to reduce trade barriers, to open global markets and to get a fair deal 

for European businesses. The overall aim is to ensure the benefi ts of trade reach 

European citizens — in the form of stronger economic growth, more jobs and 

increased consumer choice at lower prices.

T H E  E U R O P E 2020 S T R AT E G Y  
S M A R T, S U S TA I N A B L E  A N D   I N C LU S I V E  G R O W T H

Sound public finances, tighter financial supervision and open world 
markets are means to an end: growth for jobs in the EU. The structural 
measures  under  the  Europe  2020  strategy  tackle  the  underlying 
causes of the crisis. They are part of the EU’s comprehensive strategy 
to create a more sustainable and dynamic growth path delivering 
high  levels  of  employment,  productivity  and  social  cohesion. 
The goal is smart growth, sustainable growth, inclusive growth.

To  counter  the  risks  from  strained  public  finances,  dented 
business  confidence  and  the  threat  of  unemployment,  the  EU 
proposed a series of actions over the course of 2010 to invigorate 
the  economy,  to  unlock  the  EU’s  growth  potential,  stimulate 
investment and upgrade skills. The EU put emphasis on low energy 
use,  low  carbon  emissions,  up-skilling  its  population,  seizing  the 
potential  of  a  digital  single  market,  research  and  development 
and  advanced  technology.  This  is  the  way  Europe  will  boost  its 
competitiveness and productivity, and promote social cohesion and 
economic convergence. 

Smart, sustainable and inclusive growth is the aim of the Europe 2020 strategy. 

Smart growth refers to fostering knowledge, innovation, education and the digital 

society.  Sustainable  growth  means  making  production  more  resource  effi  cient 

while boosting competitiveness. And inclusive growth targets raising participation 

in the labour market, increasing the acquisition of skills and tackling poverty. 

European Commission President José 
Manuel Barroso launched the Europe 2020 
strategy for smart, sustainable and inclusive 
growth, in March. 

22

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The  Europe  2020  strategy  provides  a  coherent  framework  for  the  Union  to 

mobilise  all  its  instruments  and  policies  to  secure  the  structural  reforms  that 

Europe needs. It sets fi ve specifi c targets to be achieved by 2020. It encourages 

closer  engagement  of  Member  States  in  delivering,  since  ownership  is  crucial 

to  the  success  of  the  strategy. The  specifi c  targets  are  amplifi ed  by  a  series  of 

fl agship initiatives, and by integrated guidelines for economic and employment 

policies (23). The strategy is complemented by the EU’s continued development 

of  the  single  market  and  the  pursuit  of  smarter  regulation  and  a  stimulating 

environment for competition. But equally important is the goal of creating an 

ever-more inclusive society, which is why social cohesion and social inclusion are 

STABILISING UNEMPLOYMENT LEVELS 
ACROSS THE EU 
Unemployment (%) in the 27 EU countries
2010–12 are forecasts 

10

8

6

0

2000 

2002 

2004 

2006 

2008 

2010 

2012 

at the heart of the Europe 2020 strategy.

Source: European Commission. 

The fi ve specifi c targets of the Europe 2020 strategy: concrete objectives

(cid:23)Raising the employment rate for women and men aged 20–64 to 75 %, with 
more young, older and low-skilled workers in jobs, and better integration of 
legal migrants.

(cid:23)Improving  the  conditions  for  research  and  development  so  as  to  raise 
investment levels to 3 % of GDP, and stimulating R & D and innovation with 
new indicators.

(cid:23)Cutting  greenhouse  gas  emissions  by  20 %  compared  with  1990  levels  — 
at  the  same  time  maintaining  the  EU’s  conditional  commitment  to  a  30 % 
emissions reduction by 2020; raising the share of renewables in fi nal energy 
consumption to 20 %; and moving towards a 20 % increase in energy effi  ciency.

(cid:23)Improving education levels, by reducing school dropout rates below 10 % and 
increasing  to  40 %  the  proportion  of  30-  to  34-year-olds  with  tertiary  or 
equivalent qualifi cations.

(cid:23)Promoting  social  inclusion,  through  reducing  poverty,  and  lifting  at  least 

20 million people out of the risk of poverty and exclusion.

UNLEASHING EUROPE’S POTENTIAL  THE SEVEN FLAGSHIPS
The fi rst fl agship to be unveiled, in May, was the digital agenda for Europe (24) 

— Europe’s strategy for a fl ourishing digital economy by 2020. This is a sector 

THE SEVEN FLAGSHIPS OF 
THE EUROPE 2020 STRATEGY

(cid:23)The digital agenda for Europe

that can deliver smart growth. Half of European productivity growth over the last 

(cid:23)The innovation union

15 years was driven by information and communication technologies. This trend 

is set to intensify. The digital agenda will deliver a single digital market worth 

4 % of EU GDP by 2020.

The 100 actions of the digital agenda aim to spread the benefi ts of the digital 

revolution.  It  will  promote  a  digital  single  market,  extend  Internet  access, 

help  make  devices  and  applications  more  interoperable,  boost  trust  in  the 

Internet by enhancing security and protecting privacy for citizens and businesses 

and leveraging investment in ICT research and innovation.

(cid:23)Youth on the move

(cid:23)Resource effi  ciency 

(cid:23) An industrial policy for 
the globalisation era

(cid:23)An agenda for new skills and jobs

(cid:23) The European Platform against Poverty 

and Social Exclusion

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Training in digital literacy skills is central 
to the Europe 2020 strategy.

The Commission has launched a public consultation on how best to unlock the 

full potential of Europe’s cultural and creative industries. It is already focusing on 

improving access to fi nance, especially for small businesses, to enable the sector 

to fl ourish and to contribute to sustainable and inclusive growth. Improvements 

in mutual recognition of how to deal with material whose potential right-holders 

are unknown — orphan works — will ease cross-border online accessibility and 

make Europe’s cultural and intellectual heritage more widely available. Clearer 

rules  on  collective  rights  management  will  provide  a  stable  framework  to 

increase  cross-border  services  and  encourage  off ers  for  an  online  audiovisual 

market.  Online  distribution  of  audiovisual  works  and  other  creative  content  is 

to be stimulated.

Investment  in  next-generation  fi bre  broadband  network  is  being  promoted, 

particularly through bringing new clarity to the industry on competition rules. 

Complementary measures (25) refl ect the commitments in the digital agenda to 

provide every European with access to basic broadband by 2013 and fast and 

ultra-fast broadband by 2020. Other components of the digital agenda include 

enhancing digital literacy skills and promoting broader inclusion — overcoming 

the ‘digital divide’ so that background or lack of skills do not limit participation. 

In  December  the  Commission  launched  its  eGovernment  action  plan  for 

better online services to citizens and businesses. It will help the EU achieve the 

commitment in the digital agenda to deliver innovative online public services 

and increase the take-up of these services.

Other  fl agship  initiatives  emerged  later  in  the  year,  all  linked  to  the  idea  of 

boosting wealth and jobs while protecting the environment and making the EU 

more inclusive.

24

 
 
 
 
 
 
 
Europe’s innovation performance needs to be improved along the whole supply 

chain, from research to retail, notably through innovation partnerships. This is 

SUCCESSES IN EUROPEAN 
RESEARCH SUPPORT

why  the  Commission  proposed  —  and  the  European  Council  endorsed  —  an 

innovation  union (26).  This  is  the  fi rst  comprehensive  strategy  for  innovation. 

It aims to improve conditions and access to funding for research and innovation 

in  Europe,  to  ensure  that  innovative  ideas  can  be  turned  into  products  and 

services  that  create  growth  and  jobs.  It  focuses  on  areas  of  major  concern  for 

citizens, such as climate change, energy effi  ciency and healthy living. It looks at 

innovation not only in terms of technology, but also in relation to the business 

models,  design,  branding  and  services  that  add  value  for  users.  Furthermore, 

the fl agship includes public sector and social innovation as well as commercial 

innovation, aiming to involve all actors and all regions in the innovation cycle. 

The  objective  is  that  Europe  should  be  a  world-class  science  performer,  with 

close public and private sector cooperation. Attention is also focused on helping 

ideas to get quickly to market, by removing bottlenecks like expensive patenting, 

market fragmentation, slow standard-setting and skill shortages. Achieving the 

target of investing 3 % of EU GDP in R & D by 2020 could create 3.7 million jobs 

and  increase  annual  GDP  by  €795  billion  by  2025.  This  would  mean  Europe 

would require at least 1 million more researchers in the next decade.

In December the Marie Curie Actions 
programme funded its 50 000th 
researcher since its 1996 launch. 
To achieve an innovative union, 
Europe needs world-class researchers who 
are able to tackle both current and future 
challenges, and the EU is committed 
to inspiring, motivating, training and 
retaining them. By supporting the 
mobility of researchers across a wide 
range of disciplines, both in industry 
and academia, the Marie Curie Actions 
contribute to the European Union’s 
objective of creating a strong labour 
market for highly skilled, creative and 
entrepreneurial researchers.

Within  the  innovation  strategy,  European  innovation  partnerships  will  bring 

RESEARCH FUNDING

In 2010, the EU launched the fi rst 
joint programming initiative, 
on neurodegenerative diseases 
— such as Alzheimer’s disease. 
European countries choosing to 
participate in a joint programming 
initiative pool their resources and 
coordinate their eff orts to increase the 
effi  ciency of public research funding 
and avoid duplication of eff orts. 
They draft a strategic research agenda and 
an implementation plan to give a joint 
response to a shared challenge.

together  European,  national  and  regional,  public  and  private  actors  behind 

well-defi ned  goals  in  areas  which  combine  tackling  societal  challenges  with 

potential  for  Europe  to  become  a  world  leader.  The  Commission  will  provide 

seed funding to attract further fi nance. Further down the line, as from 2011, pilot 

partnerships will be launched on active and healthy ageing, energy, ‘smart’ cities 

and  mobility,  water  effi  ciency,  non-energy  raw  materials  and  sustainable  and 

productive agriculture. 

The strategy is fl anked and reinforced by input from other EU policies. Competition 

policy will support initiatives that drive innovation and growth by ensuring a level 

playing fi eld exists between companies and allowing them to compete based on 

their merits. Under its research programmes, the Commission will invest some 

€500 million in exploratory research in future and emerging technologies, and 

will urge Member States to do the same. The European Institute for Innovation 

and Technology launched its fi rst three knowledge and innovation communities 

in  June.  These  stimulate  innovation  and  entrepreneurship  in  climate  change 

mitigation and adaptation, sustainable energy, and the future information and 

communication  society. The  seventh  framework  programme  for  research  and 

technological  development  will  play  its  part:  the  indicative  budget  for  2010 

is over €6 billion, which will fund thousands of projects and create more than 

165 000 jobs. The Commission also developed new joint research programming 

initiatives in agriculture, food security and climate change; cultural heritage and 

global change; and a healthy diet for a healthy life.

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G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

THE BOLOGNA PROCESS

Youth on the move (27), launched in September, brings together EU and national 

This joint initiative by more than 
40 countries, aims to create a European 
higher education area in which students 
can choose from a wide and transparent 
range of high-quality courses and benefi t 
from smooth recognition procedures.

INDUSTRIAL POLIC Y HELPING 
SMALLER FIRMS

The Commission helped over 100 000 
businesses to secure a loan or a 
venture capital investment through its 
enterprise and innovation programme. 
Altogether the EU set aside more than 
€1.1 billion to ease access to loans and 
equity fi nance for smaller fi rms.

measures  to  improve  employment  prospects  for  young  people,  students  and 

trainees. It aims at raising the quality of all levels of education and training, and 

off ering more opportunities to young people to study and train abroad. It will 

provide greater mobility for participants in university and research programmes, 

promote entrepreneurship among young professionals, and boost recognition of 

informal learning. Actions include an improved European job portal, more help 

for  public  employment  services  to  support  young  people,  and  a  pilot  project 

that allows young entrepreneurs to spend up to six months with an experienced 

entrepreneur in a smaller fi rm in another EU Member State.

The European Union has already agreed extra budget provision from 2011 for a 

pilot scheme to help young people seize the opportunities in the wider EU labour 

market, and to help companies fi nd qualifi ed workers. And the new European 

Progress  Microfi nance  Facility  will  make  it  easier  for  young  entrepreneurs  to 

access  credit. The  Commission  has  called  on  Member  States  to  strongly  resist 

cuts to education budgets as part of austerity measures in response to the crisis.

In  June,  the  Commission  proposed  a  10-year  vision  for  improving  vocational 

education  and  training,  and  new  education  targets  were  endorsed  by  the 

European Council. The European higher education area was launched in March, 

which aims to make European higher education more compatible, comparable, 

competitive and attractive.

The ‘Youth on the move’ initiative also looks at policies which could cushion the 

impact  of  the  crisis  on  young  people. These  include  making  easier  transitions 

from education and training to work, and better links between policy priorities 

and EU funds, especially the European Social Fund. It also envisaged increased 

direct support to innovative projects through Progress, the lifelong learning and 

‘Youth in action’ programmes.

In  October  the  Commission  insisted,  in  its  communication  ‘An  integrated 

industrial  policy  for  the  globalisation  era’ (28),  that  industry  must  be  placed 

centre  stage  if  Europe  is  to  remain  a  global  economic  leader.  This  fl agship 

initiative sets out a strategy that aims to boost growth and jobs by maintaining 

and supporting a strong, diversifi ed and competitive industrial base in Europe 

off ering well-paid jobs while becoming less carbon intensive.

Against  the  background  of  intensifying  globalisation,  this  new  approach 

discards the obsolete concept of national sectors and industries in favour of a 

coordinated European policy response. This requires a vision of the whole value 

chain,  from  infrastructure  and  raw  materials  to  after-sales  service.  It  places 

the  creation  and  growth  of  small  and  medium-sized  enterprises  at  the  core 

of  industrial  policy,  and  seizes  the  transition  to  a  sustainable  economy  as  an 

opportunity to strengthen competitiveness.

26

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Small and medium-sized enterprises 
are at the heart of the EU’s recovery. 
Here apprentices learn new skills at 
a college in the United Kingdom.

Altogether the EU set aside more than €1.1 billion to ease access to loans and 

equity  fi nance  for  smaller  fi rms,  especially  new  and  young  fi rms  and  people 

wanting  to  start  their  own  business.  The  European  Investment  Bank  also 

provided special assistance to smaller fi rms, with accelerated delivery of loans to 

them resulting in almost full utilisation of the €30 billion allocation for 2008–11. 

The focus is on clean transport, renewable energy and related research.

There  were  striking  developments  in  numerous  industrial  sectors  in  the  EU  in 

2010. The Commission proposed (29) initiatives to promote the competitiveness 

of  tourism,  and  its  development  and  international  visibility.  The  Commission 

proposed in April 2010 a shift in policy on vehicle manufacturing, to encourage 

the  development  and  eventual  widespread  use  of  clean  and  energy  effi  cient 

vehicles. The  chemical  industry  moved  towards  further  competitiveness,  with 

the submission to the European Chemicals Agency of 24 675 registrations of the 

most widely used or most dangerous chemicals by the deadline of 30 November.

UNEMPLOYED IN THE EU COUNTRIES
Unemployment rate (%) 

2009

2010

2011 forecast

20

15

10

5

0

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EXPORTS

An  agenda  for  new  skills  and  jobs  will  boost  inclusive  growth  by  raising  the 

The ‘Enterprise Europe’ network gives 
Europe’s smaller fi rms easier access 
to export markets. With 589 partner 
organisations covering 47 countries, 
it is extending its reach, particularly into 
Asia: it now has 15 contact points in China 
and South Korea, with additional contact 
points planned in China and Japan.

employment rate with more and better jobs. It aims to help people of all ages 

anticipate  and  manage  change  through  equipping  them  with  the  right  skills 

and  competences.  Its  scope  also  includes  modernisation  of  labour  markets 

and  welfare  systems  and  aims  to  ensure  that  the  benefi ts  of  growth  reach  all 

parts of the EU. Among the specifi c mechanisms envisaged are labour market 

reforms  to  improve  fl exicurity,  a  single  contract  instead  of  diff erent  models 

of  temporary  and  permanent  contracts,  new  impetus  to  lifelong  learning, 

additional incentives for fi rms to invest in training, and better foresight on future 

skills  needs.  It  proposes  a  shared  interface  —  European  skills,  competences 

and occupations classifi cation — to bring more closely together the worlds of 

employment, education and training.

The  European  Platform  against  Poverty  and  Social  Exclusion  was  launched 

in December. It will promote innovation in social policy to fi nd smart solutions 

in  post-crisis  Europe,  especially  in  terms  of  more  eff ective  and  effi  cient  social 

support. It urges making the best use of all EU funds, in particular the European 

Social Fund, to support social inclusion objectives, and it proposes social policy 

as a priority for future EU funding. It aims to make social protection and services 

more eff ective and responsive to new social needs. And it will bring on board a 

wider range of partners to fi ght exclusion.

The 2010 European Year for Combating Poverty and Social Exclusion

With  a  total  budget  of  €17  million  (complemented  by  at  least  €9  million  of 
national  co-fi nancing),  the  European  Year  for  Combating  Poverty  and  Social 
Exclusion  supported  more  than  700  projects  across  29  countries. The  political 
momentum generated paved the way for the agreement by EU leaders on the 
fi rst-ever poverty reduction target within the Europe 2020 strategy. The events 
included  a  Europe-wide  competition  for  journalists  reporting  on  issues  linked 
to  the  year’s  themes,  and  national  initiatives  ranging  from  broadcasts,  on 
Ireland’s biggest radio station, of stories of people living in poverty, to helping 
60 communities in the Netherlands to develop integrated strategies for tackling 
social exclusion, and from German help for disadvantaged people with a migrant 
background  to  integrate  in  society  through  local  volunteering,  to  training  job 
centre staff  in Denmark so they can deal better with the specifi c needs of people 
with mental disabilities seeking work.

28

Regional policy

Under cohesion policy, €93 billion (27 % of EU funding earmarked for 2007–13) 
has  already  been  allocated  to  projects  for  investment  in  jobs  and  growth  in 
Europe, with progress in key sectors such as R & D and innovation particularly 
advanced,  and  positive  results  from  the  training  and  up-skilling  off ered  by 
the  European  Social  Fund  to  job-seekers.  Through  the  European  Regional 
Development Fund, the European Social Fund and the Cohesion Fund, the EU 
will invest €347 billion in 2007–13 in the 27 Member States.

EU  cohesion  policy  contributed  to  growth  and  prosperity  and  to  promoting 
balanced  development  across  the  Union,  both  through  direct  investments 
and indirect trade benefi ts. It also helped to cushion the impact of the crisis on 
workers  and  small  businesses. The  Commission  urged (30)  aligning  it  still  more 
closely  to  the  Europe  2020  strategy,  to  help  address  new  challenges  arising 
from the substantial economic and social developments over recent years. The 
recommendations covered stricter conditions, greater incentives and increased 
focus on results.

At a regional level, citizens benefi ted from action such as the development of 
the EU strategy for the Danube region, presented in December, which seeks to 
improve  environmental  conditions  and  develop  the  huge  economic  potential 
of  the  region  and  to  overcome  the  social  and  infrastructure  disparities  that 
still persist from the region’s divided past. The strategy will help eradicate this 
unequal legacy, boosting opportunities for its citizens through enhanced trade, 
transport  and  energy  networks,  promoting  innovation  in  smaller  fi rms,  and 
through cultural and educational activities.

The  resource  effi  ciency  fl agship  will  not  be  launched  until  early  in  2011, 

GREEN SECTOR EMPLOYMENT

but related actions are already under way. For example, sustainable transport is 

being pursued through: earlier funding of the trans-European transport network; 

faster  reform  of  the  single  European  sky;  implementation  of  the  European 

maritime  transport  space  without  barriers,  to  promote  transport  by  sea; 

improved  global  competitiveness  through  higher  productivity;  and  simplifi ed 

access  to  structural  funding.  A  number  of  these  issues  will  be  dealt  with  in 

more detail in Chapter 2. The Council welcomed the resource effi  ciency fl agship 

initiative in December (31) and, in particular, progress towards a sustainable life-

cycle approach, the blend of measures that will be needed to make European 

material use more sustainable.

Green industries already directly employ 
around 3.4 million people and account 
for around 2.2 % of Europe’s GDP. Each 
direct job in Europe’s eco-industries 
creates between 1.3 and 1.9 indirect jobs. 
The global market for environmental 
technologies is forecast to grow around 
10 % annually in future. Some 3 million 
more green EU jobs could be created.

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Maintenance of photovoltaic cells at the 
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G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

 
 
 
 
 
 
RELAUNCHING THE SINGLE MARKET
Improving  the  single  market  is  a  pillar  of  the  Europe  2020  strategy  and  a 

prerequisite  for  its  success.  In  October  the  Commission  set  out  its  plans (32)  to 

strengthen  the  single  market  with  measures  to  boost  growth  and  enhance 

citizens’  rights. To  boost  growth,  competitiveness  and  social  progress,  it  made 

proposals  to  make  the  single  market  work  better,  and  make  life  easier  for 

companies, consumers and workers. The Single Market Act is a comprehensive 

two-year plan for 2011–12 designed to relaunch growth and create jobs in the 

EU. It contains 50 initiatives relating to economics, governance and the general 

public. Key priorities include: 

(cid:23)For  businesses:  Gaining  access  to  fi nance  can  be  diffi  cult  for  SMEs. 

The Commission plans to make proposals increasing the visibility of Europe’s 

smallest businesses and easing their access to lists for capital markets. These 

proposals will also reduce costs for SMEs by simplifying accounting rules and 

improving their access to public procurement contracts. The Commission will 

look at introducing a common tax base for businesses operating cross-border, 

leading to further cost savings.

THE SINGLE MARKET AWARD

(cid:23)For  businesses:  Europe  has  enormous  potential  for  developing  social 

In December the 2010 Single Market 
Award went to the Austrian NGO 
‘Grenzoff ensive’. This prize highlights 
the importance of free movement 
principles underpinning the EU single 
market. Grenzoff ensive won for its work 
in minimising administrative obstacles 
for workers and small and medium-sized 
enterprises working across borders in 
the neighbouring regions of Bavaria 
(Germany), Upper Austria, and Southern 
Bohemia (Czech Republic).

entrepreneurship.  In  recent  years,  many  initiatives  have  been  taken  by 

individuals, foundations and companies to improve access to food, housing, 

healthcare,  jobs  and  banking  services  for  those  in  need.  To  foster  more 

cross-border action, the Commission will propose European statutes for such 

organisations  to  serve  and  promote  the  social  economy.  The  Commission 

will  also  encourage  longer  term  investments,  including  ethical  investments, 

exploring options for a specifi c labelling regime.

(cid:23)For  consumers:  Today,  the  online  market  is  seriously  underperforming. 

That is why the Commission will propose rules in 2011 aimed at ensuring that 

creators  and  artists  can  sell  their  work  throughout  Europe  with  a  one-stop 

shop for authorisation allowing them to reap the rewards of their work. Full 

implementation of the services directive and updated rules for e-commerce 

will also make a diff erence.

(cid:23)For employees: 4 600 professions are regulated diff erently in Member States. 

A  thorough  revision  of  the  professional  qualifi cations  directive  is  therefore 

overdue.  The  Commission  believes  introduction  of  professional  ID  cards  or 

cartes professionnelles would reduce remaining red tape.

The  Commission’s  initiative  for  a  Single  Market  Act  follows  the  delivery  in 

May,  by  former  Internal  Market  and  Competition  Commissioner  Mario  Monti, 

of  a  report  on  how  the  EU  should  relaunch  and  complete  the  single  market, 

which had been requested in October 2009 by Commission President Barroso. 

The June European Council welcomed the report. A European Parliament report 

on  delivering  a  single  market  to  consumers  and  citizens  was  adopted  at  the 

May plenary (33).

30

In December the Council endorsed (34) the approach — in particular, the focus on 

business and citizens’ concerns that prevent them from taking full benefi t of the 

advantages of the single market. It welcomed the Commission’s communication, 

and underlined that the single market should focus on boosting competitiveness 

and  smart,  sustainable  and  inclusive  growth,  as  well  as  on  restoring  and 

strengthening the confi dence of citizens and consumers, by putting them at the 

heart of the single market, and the confi dence of businesses in their access to 

the single market.

There  is  no  single  solution  to  creating  an  EU  that  is  fi t  for  success  in  the 

21st  century.  Reinforcing  fi scal  and  fi nancial  stability  is  vital,  and  so  too  is  the 

vision  in  the  Europe  2020  strategy.  But  success  comes  from  mobilising  all  the 

EU’s  many  assets  and  facets  to  build  a  new  and  sustainable  form  of  growth. 

The EU deployed with renewed vigour and precision its policies on the single 

market,  competition  and  cohesion.  It  helped  Member  States  outside  the 

euro  area  (Latvia,  Hungary  and  Romania)  with  balance  of  payments  support. 

And  it  developed  and  exploited  new  forms  of  cooperation  among  the  EU 

institutions.  The  year  2010  saw  the  EU  act  with  new  coherence  to  provide  a 

genuinely comprehensive approach.

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Mr Mario Monti, former Internal Market 
and Competition Commissioner.

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G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

 
 
EU instruments are already having a positive impact

The European Globalisation Adjustment Fund, which supports workers dismissed 
as a result of globalisation and the economic crisis, granted €52.3 million in 2009 
to  help  some  11 000  workers  in  eight  countries.  Payments  were  approved  to 
Ireland,  Spain,  Denmark,  the  Netherlands  and  Portugal,  and  access  rules  were 
eased. The fund co-fi nances job-search assistance, training and retraining, and 
support for business creation. It has a high success rate in helping fi nd new jobs.

The  European  Progress  Microfi nance  Facility (35),  agreed  in  March,  is  helping 
people to stay in jobs or to get new ones. It provides loans to people who have 
lost their jobs and want to start their own small business, but who do not have 
conventional  credit  records.  Its  starting  budget  is  €100  million,  which  could 
leverage  more  than  €500  million  in  cooperation  with  international  fi nancial 
institutions such as the European Investment Bank.

The prospects of combating late payment in commercial transactions improved 
when  the  European  Parliament  voted  in  October  in  favour  of  a  new  directive 
that will give better protection to creditors, particularly the many small fi rms that 
depend on prompt payment to safeguard their cashfl ow. Public authorities will 
have to pay within 30 days, or else pay an interest rate of 8 % — resulting in an 
extra €180 billion of liquidity being available to businesses.

To  ease  access  to  fi nance  for  small  businesses,  the  EU  deployed  its  enterprise 
and innovation programme, and its SME Finance Forum brought together banks, 
business organisations and other interested parties to discuss how the fl ow of 
fi nance to businesses can be improved.

Rules  governing  the  structural  and  cohesion  funds  were  simplifi ed  in  June, 
facilitating access to funding — particularly valuable at a time when pressure on 
public budgets makes it more diffi  cult for governments and regions to provide 
matching  funding.  Speeding  up  project  implementation  on  the  ground  by 
reducing red tape also helps national and regional economies to recover.

32

ENDNOTES

(1)  Commission communication — Europe 2020 — A strategy for smart, sustainable and 

(19)  Guidelines on vertical restraints (OJ C 130, 19.5.2010).

inclusive growth (COM(2010) 2020).

(2)  Statement of the Heads of State or Government of the euro area (PCE 86/10 of 7 May 
2010) (http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/
ec/114296.pdf ).

(3)  Extraordinary Economic and Financial Aff airs Council conclusions, 9/10 May 

2010 (http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/
ecofi n/114324.pdf ).

(4)  6/7 December Eurogroup/Ecofi n Council.

(5)  Commission communication — Reinforcing economic policy coordination 

(COM(2010) 250).

(6)  Proposal for a regulation on speeding up and clarifying the implementation of the 

excessive defi cit procedure (COM(2010) 522).

(7)  Proposal for a regulation on the eff ective enforcement of budgetary surveillance in the 

euro area (COM(2010) 524).

(8)  Proposal for a directive on requirements for budgetary frameworks of the Member 

States (COM(2010) 523).

(20)  Proposal for a regulation on state aid to facilitate the closure of uncompetitive coal 

mines (COM(2010) 372).

(21)  Multi-year action plan on development (http://www.g20.utoronto.ca/2010/

g20seoul-development.pdf ).

(22)  Commission communication — Trade, growth and world aff airs — Trade policy as a 

core component of the EU’s 2020 strategy (COM(2010) 612).

(23)  Council Decision 2010/707/EU on guidelines for the employment policies of the 

Member States (OJ L 308, 24.11.2010).

(24)  Commission communication — A digital agenda for Europe (COM(2010) 245).

(25)  Commission Recommendation 2010/572/EU on regulated access to Next Generation 

Access Networks (NGA) (OJ L 251, 25.9.2010).
Proposal for a decision establishing the fi rst radio spectrum policy programme 
(COM(2010) 471).
Commission communication — European broadband: Investing in digitally driven 
growth (COM(2010) 472).

(26)  Commission communication — Europe 2020 fl agship initiative — Innovation union 

(9)  Proposal for a regulation on prevention and correction of macroeconomic imbalances 

(COM(2010) 546).

(COM(2010) 527).

(10)  Proposal for a regulation on enforcement measures to correct excessive 

macroeconomic imbalances in the euro area (COM(2010) 525).

(11)  Proposal for a regulation on Community macro prudential oversight of the fi nancial 

system and establishing a European Systemic Risk Board (COM(2009) 499).

(12)  Directive on alternative investment funds managers (AIFM), voted through by the 

EP on 11 November, awaiting Council adoption.

(13)  Proposal for a regulation on OTC derivatives, central counterparties and trade 

repositories (COM(2010) 484).

(14)  Commission communication — An EU framework for crisis management in the 

(27)  Commission communication — Youth on the move — An initiative to unleash the 

potential of young people to achieve smart, sustainable and inclusive growth in the 
European Union (COM(2010) 477).

(28)  Commission communication — An integrated industrial policy for the globalisation 

era — Putting competitiveness and sustainability at centre stage (COM(2010) 614).

(29)  Commission communication — Europe, the world’s No 1 tourist destination — 

A new political framework for tourism in Europe (COM(2010) 352).

(30)  Commission’s fi fth report on economic, social and territorial cohesion, 10 November, 

(http://ec.europa.eu/regional_policy/cohesion_report).

(31)  20 December Environment Council conclusions.

fi nancial sector (COM(2010) 579).

(32)  Commission communication — Towards a Single Market Act (COM(2010) 608).

(15)  http://ec.europa.eu/internal_market/bank/regcapital/index_en.htm

(33)  European Parliament report of 3 May 2010 on delivering a single market to 

(16)  http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/304&format=HT

ML&aged=0&language=EN&guiLanguage=en

(17)  Committee of European Banking Supervisors, 10 December.

(18)  Commission Regulation (EU) No 330/2010 on the application of Article 101(3) of the 

Treaty on the Functioning of the European Union to categories of vertical agreements 
and concerted practices (OJ L 102, 23.4.2010).

consumers and citizens (http://www.europarl.europa.eu/sides/
getDoc.do?language=EN&reference=A7-0132/2010).

(34)  http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/118409.pdf

(35)  Decision 283/2010/EU establishing a European Progress Microfi nance Facility for 

employment and social inclusion (OJ L 87, 7.4.2010).

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G E N E R A L R E P O RT 2010   |   D R I V I N G TO WA R D S R E CO V E RY

CHAPTER 2
A CITIZENS’ AGENDA: 
PUTTING PEOPLE AT THE HEART 
OF EUROPEAN ACTION

The aim of the Commission’s Europe 2020 strategy for 

growth and jobs, adopted in March 2010, is ultimately to 

benefit European citizens. The Treaty of Lisbon, in force 

since December 2009, had already signalled this shift. 

The interests of the citizen and the democratic legitimacy 

of the Union have been enhanced through the increased 

role of the European Parliament as co-legislator in 

most areas and the greater involvement of national 

parliaments, making the EU more accountable for its 

actions. Secondly, the introduction of qualified majority 

voting in the Council for most policy areas will streamline 

decision-making. And finally, judicial review will be 

improved as the Court of Justice of the European Union is 

now assuming judicial oversight of all aspects of freedom 

security and justice, while the Charter of Fundamental 

Rights becomes legally binding on the EU.

By paving the way for making the EU more efficient, 

democratic and accountable, the treaty gives 

additional attention to the interests of the citizens 

of the EU, placing them more firmly than ever at the 

centre of the EU’s activities and goals. The citizens’ 

initiative is an obvious example of this new focus.

At the start of the Commission’s mandate earlier in the 

year, President Barroso created two new portfolios: 

one explicitly dedicated to justice, fundamental 

rights and citizenship, which he entrusted to 

one of his Vice-Presidents — a clear policy signal 

recognising the key importance of EU action in this 

area. The other portfolio, home affairs, includes 

the important and delicate task of ensuring that all 

activities necessary and beneficial to the economic, 

cultural and social growth of the EU may develop in 

a lawful and secure environment. It also covers all 

activities related to the management of migratory 

flows, protection to people fleeing from persecution 

and the controls at the external borders.

One of the most prominent aspects of the new focus 

on citizens is to make benefits more tangible in the 

area of freedom, security and justice. Actions in this 

area are embodied in the Stockholm programme, 

which places the main focus on the interests and needs 

of citizens and addresses the necessity of ensuring 

respect for fundamental freedoms and integrity while 

guaranteeing security. Substantial progress was made 

over the course of the year in bringing the programme 

to fruition and to first concrete results.

The EU continues to meet people’s concerns and 

interests through measures across a wide range of 

policy fields affecting their daily life, from health and 

education to culture and transport, and from consumer 

rights to civil protection.

A N A R E A O F F R E E D O M, S E C U R I T Y A N D J U S T I C E F O R C I T I Z E N S

In  December  2009,  the  European  Council  adopted  the ‘Stockholm 
programme — An open and secure Europe serving and protecting 
the citizens’ (1). It covers actions in the areas of fundamental rights, 
civil and criminal justice, consumer rights and citizenship, security, 
asylum,  immigration  and  border  management.  It  also  sets  the 
political  guidelines  for  further  developing  the  area  of  freedom, 
security and justice over the next five years. In April, the Commission 
adopted an action plan (2) to turn the concept into reality, translating 
the political guidance provided by the European Council and by the 
European Parliament (3) into concrete actions with a clear timetable 
and deliverables.

Under  the  Commission’s  action  plan,  the  main  thrust  of  the  European  Union’s 

action  in  this  fi eld  in  the  coming  years  will  be  to  make  real  progress  towards 

a  Europe  where  people  can  live,  work  and  travel  in  security,  confi dent  that 

their  rights  are  fully  respected.  As  regards  fundamental  rights  and  justice,  the 

Commission’s action plan includes the following proposals:

(cid:23)improving  data  protection  for  citizens  in  all  EU  policies  —  including  law 

enforcement  and  crime  prevention  —  and  in  relations  with  international 

partners, notably with the USA; the 1995 EU data protection directive will be 

modernised to respond to new technological challenges;

(cid:23)strengthening  the  rights  of  suspects  and  accused  persons  in  criminal 

proceedings  to  have  a  fair  trial  with  proposals  on  informing  them  about 

charges, providing legal advice, communicating with relatives and ensuring 

special safeguards for vulnerable persons;

(cid:23)cutting red tape for citizens and businesses by ensuring that judicial decisions 

and  civil  documents  are  recognised  across  borders  without  cumbersome 

procedures or excessive costs;

(cid:23)simplifying  the  cross-border  recovery  of  debt  and  alternative  dispute 

resolution; today companies only recover 37 % of cross-border debts;

(cid:23)boosting  online  commerce  by  off ering  companies  an  optional  European 

contract law: in 2008 only 7 % of transactions on the Internet in Europe were 

cross-border;

(cid:23)increasing  protection  for  citizens  travelling  outside  their  home  countries  in 

the EU when they book a holiday package or fi le a claim after a road accident. 

For travel outside the EU, citizens will have better consular protection.

To  ensure  European  citizens’  security  and  a  better  management  of  migration 

fl ows, the Stockholm action plan foresees the following proposals:

(cid:23)defi ning  a  comprehensive  EU  internal  security  strategy  targeting  the  most 

urgent security threats facing Europe;

(cid:23)negotiating  a  long-term  agreement  with  the  USA  on  the  processing  and 

transfer  of  fi nancial  messaging  data  for  the  purpose  of  fi ghting  terrorism 

(Terrorism Financing Tracking Programme — TFTP);

(cid:23)looking at an EU approach for the use of passenger name record (EU-PNR) 

data  for  law  enforcement  purposes  and  creating  a  European  framework  for 

the communication of PNR data to non-EU countries;

36

(cid:23)protecting European citizens from cybercrime by criminalising identity theft 

as well as malicious software that is used to attack information systems;

(cid:23)reinforcing  border  security  by  setting  up  an  entry/exit  system,  facilitating 

non-EU country nationals’ travel through a ‘registered traveller programme’ 

and  looking  at  a  European  approach  for  a  European  electronic  system  for 

travel authorisation (EU ESTA);

(cid:23)evaluating and, if necessary, amending the data retention directive;

(cid:23)clearing  the  conditions  of  entry  and  residence  of  non-EU  nationals  for 

purposes of seasonal employment and intra-corporate transfers, introducing 

a  common  EU  asylum  system  and  fostering  solidarity  between  Member 

States;

(cid:23)protecting  children  from  sexual  exploitation  and  child  pornography,  in 

particular in view of the development of the Internet and the facilitation of 

international travel;

(cid:23)fi ghting modern slavery more eff ectively by enhancing the criminalisation of 

traffi  ckers and strengthening the protection for victims of traffi  cking in human 

beings;

(cid:23)ensuring that crime does not pay and depriving criminals of the assets they 

have acquired through more eff ective asset confi scation.

A greater say for Europe’s citizens: the citizens’ initiative

This innovation was introduced by the Lisbon Treaty. When a suffi  cient number 
of  citizens  share  a  view  —  indicated  by  a  minimum  of  1  million  signatures 
—  the  citizens’  initiative  enables  them  to  invite  the  Commission  to  make 
legislative proposals in fi elds where the treaty assigns competences to the EU.

Given the unique opportunity that this new instrument off ers to bring the Union 
closer to citizens, and following an extensive public consultation at the start of 
the year, the Commission proposed rules to set up the instrument so that citizens 
could start benefi ting from this new right as soon as possible.

In December, the European Parliament and the Council reached an agreement 
on these rules (4) which will make sure that citizens’ initiatives are representative 
of  an  EU  interest  while  ensuring  that  the  instrument  remains  easy  to  use  by 
citizens.  Statements  of  support  from  citizens  have  to  be  collected  within  one 
year from the date of registration of the proposed initiative. This new tool should 
help promote increased cross-border debate about EU policies.

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The citizens’ initiative: under the provisions 
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new rights to seek a voice in EU policies. 

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G E N E R A L R E P O RT 2010   |   A C I T I Z E N S’ AG E N DA: P U T T I N G P E O P L E AT T H E H E A RT  O F  E U R O P E A N AC T I O N 

 
 
 
 
 
 
BUILDING A CITIZENS’ EUROPE: 
JUSTICE, FUNDAMENTAL RIGHTS AND CITIZENSHIP

Justice
On  the  basis  of  the  Stockholm  action  plan,  the  Commission  launched  an 

ambitious agenda of justice reforms, covering both civil and criminal law matters.

In  civil  matters,  the  Commission  proposed  a  new  legal  framework  for  cross-

border divorce cases. The new framework (called the Rome III regulation) allows 

couples  from  two  diff erent  EU  countries,  those  living  in  diff erent  countries  or 

living together in a country other than their own to choose with a new degree 

of legal certainty the law applicable to divorce and legal separation. There are 

around 16 million such international couples in the EU. As the Rome III regulation 

was  blocked  in  the  Council  given  that  not  all  Member  States  were  willing  to 

participate, the Commission made, in March, for the fi rst time in the history of 

the Union, use of the so-called enhanced cooperation procedure. This procedure, 

put in place by the Treaty of Amsterdam, allows the Commission to move ahead 

on  an  issue  with  a  smaller  group  of  Member  States  under  the  condition  that 

this enhanced cooperation remains open for all Member States to join. Both the 

European  Parliament  and  Council  agreed  to  the  use  of  enhanced  cooperation 

in this case and, by the end of the year, 14 Member States had decided to join 

the new rules for cross-border divorces. This served as a precedent for the later 

Commission proposal to make use of enhanced cooperation with regard to the 

Union patent.

In  June,  the  Court  of  Justice  clarifi ed  certain  rules  concerning  the  recognition 

and  enforcement  of  judgments  requiring  the  return  of  a  child  who  has  been 

wrongfully  removed.  This  is  an  application  of  the  regulation  concerning 

jurisdiction and the recognition and enforcement of judgments in matrimonial 

matters and matters of parental responsibility (5).

On 1 July, the Commission put the issue of a European contract law high on the 

agenda, by means of a Green Paper, by establishing an Expert Group on Contract 

Law  and  by  bringing  together  a  sounding  board  of  business  organisations, 

consumer organisations and legal professionals to discuss this issue. Its aim is, 

among  others,  to  create  a  European  regime  for  certain  contracts  (a  so-called 

‘28th regime’) which could be chosen by contracting parties for their transactions 

within  the  EU’s  single  market. The  Commission  wants,  in  particular,  small  and 

medium-sized companies to off er their products and services to consumers in 

other countries without having to become an expert in the national contract law 

systems of all other 26 Member States. With the Green Paper, the Commission 

launched  a  public  consultation  which  was  due  to  end  in  January  2011. 

Legislative proposals are planned for later in the year.

38

In  August,  the  Commission  called  for  saving  time  and  money  in  cross-border 

legal disputes through mediation: the potential of existing EU rules on mediation 

in cross-border legal disputes is eff ective only if put in place by Member States 

at national level. Member States have until May 2011 to implement the directive 

on mediation agreed in 2008.

In  December,  the  Commission  proposed  new  measures  for  cutting  costs  and 

A NEW LEGAL WEBSITE FOR ALL

In July, the Commission launched an 
e-justice portal (6), which is a focal point 
for citizens and legal practitioners, 
designed to ease access to justice and 
help anyone seeking advice on 
cross-border legal problems, 
whether in civil or in criminal matters.

red tape for citizens and businesses in recognising court rulings and civil status 

documents.  The  objectives  are  to  eliminate  the  legal  costs  (which  average 

€2 000)  currently  required  —  usually  as  a  pure  formality  —  to  have  a  legal 

judgment  recognised  in  another  EU  country,  and  to  make  sure  that  public 

documents — such as a contract or deed to a property — circulate without the 

need for additional procedures. The proposed initiatives will reduce bureaucracy, 

saving money for businesses and consumers, while reinforcing the single market 

and  making  life  easier  for  people  living  and  working  in  other  EU  countries. 

The  Commission  sought  solutions  to  ease  cross-border  transactions,  with  a 

Green  Paper  on  policy  options  for  progress  towards  a  European  contract  law 

for consumers and businesses, and tackled tax obstacles for citizens operating 

across borders.

In  criminal  matters,  the  Commission’s  priority  was  to  strengthen  the  rights  to 

a  fair  trial  in  the  EU.  The  Commission  proposed,  in  March,  new  legislation  to 

help  people  anywhere  in  the  EU  when  they  cannot  understand  the  language 

of the criminal proceedings they are involved in. This obliges Member States to 

provide suspects or accused persons with interpretation and translation services 

for essential documents. The Commission also proposed, in July, legislation on 

the  right  to  information,  basically  suggesting  an  indicative  model  of  a  letter 

of  rights  listing  basic  rights  of  suspects  and  accused  persons  during  criminal 

proceedings.  As  more  Europeans  travel,  study  and  work  outside  their  home 

country,  assuring  such  rights  across  the  EU  helps  build  mutual  trust  between 

judges and citizens, and fosters the implementation of the principle of mutual 

recognition of judicial decisions in criminal matters. As a result, the chances are 

improved for successful application of EU mutual recognition-based measures 

to fi ght crime — such as the European Arrest Warrant. The European Parliament 

and Council agreed to the directive on the right to interpretation and translation 

in  October,  and  the  Council  politically  endorsed  the  directive  on  the  right  to 

information in December.

39

G E N E R A L R E P O RT 2010   |   A C I T I Z E N S’ AG E N DA: P U T T I N G P E O P L E AT T H E H E A RT  O F  E U R O P E A N AC T I O N 

In July, the Commission launched a public consultation on how to improve the 

rights of victims in criminal proceedings to inform proposals to be made in 2011. 

Cooperation  between  Member  States’  judicial  authorities  is  key  to  the  eff ective 

fi ght  against  cross-border  crime.  Eurojust  and  the  European  judicial  network  in 

criminal  matters  have  constantly  contributed  to  establishing  direct  contacts 

between national judges and to coordinating investigation in cross-border crimes.

Fundamental rights
The Treaty of Lisbon makes the Charter of Fundamental Rights of the European 

Union  (drawn  up  in  1999–2000  by  a  Convention)  legally  binding  and  gives  it 

the same legal status as the EU treaties. The charter demands respect fi rst of all 

by the EU institutions when they make laws or decisions. This is why the new 

College of Commissioners, when taking its oath before the Court of Justice on 

3 May 2010, did so not only on the treaties, but also on the charter. In addition, 

the Commission adopted, in October, a strategy to ensure that all new measures 

proposed  by  the  Commission  or  by  other  institutions  will  have  to  be  checked 

against  a ‘fundamental  rights  checklist’,  so  that  they  are  compatible  with  the 

charter.  Furthermore,  citizens  should  be  made  aware  of  the  circumstances  in 

which they may invoke the charter, which fi rst of all applies to the EU institutions 

and to the Member States only when they implement EU law. The charter thus 

complements,  but  does  not  replace,  national  constitutional  orders  with  their 

own systems of fundamental rights protection.

To  complete  the  system  of  fundamental  rights  protection  in  the  EU,  the  Lisbon 

Treaty also requires the EU to join the Council of Europe’s European Convention 

for  the  Protection  of  Human  Rights  and  Fundamental  Freedoms.  On  7  July,  on 

the basis of a mandate from the Council, the Commission initiated negotiations 

with the Council of Europe for this purpose. Ensuring an effi  cient integration of 

the  Union’s  legal  system  of  fundamental  rights  protection  into  the  Council  of 

Europe’s system, while preserving the autonomy of the Union’s legal order, is the 

key  negotiation  objective.  Upon  successful  conclusion  of  these  negotiations  by 

the Council, and ratifi cation by the European Parliament, the 27 EU Member States 

and  the  20  further  Member  States  of  the  Council  of  Europe,  individuals  will  be 

allowed to bring complaints — after they have exhausted domestic remedies — 

at  the  European  Court  of  Human  Rights  in  Strasbourg  about  alleged  violations 

of  fundamental  rights  by  the  EU.  In  addition,  the  EU  will  have  an  EU  judge 

representing the Union’s own legal order at the European Court of Human Rights.

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Viviane Reding, Commission Vice-President 
responsible for justice, fundamental rights 
and citizenship, at a press conference 
in September.

40

 
 
Two fundamental rights featured prominently on the EU’s agenda throughout the 

year: privacy and data protection (Articles 7 and 8 of the charter). In November, 

the Commission set out a strategy on how to protect individuals’ data in all policy 

areas,  including  law  enforcement,  while  reducing  red  tape  for  business  and 

guaranteeing the free circulation of data within the EU. It proposed modernising 

the EU framework for data protection through strengthening individuals’ rights, 

enhancing  the  single  market  dimension,  revising  data  protection  rules  in  the 

area  of  police  and  criminal  justice,  ensuring  high  levels  of  protection  for  data 

transferred  outside  the  EU,  and  more  eff ective  enforcement  of  the  rules.  The 

Commission also obtained a mandate from the Council to start negotiations on 

a  personal  data  protection  agreement  between  the  European  Union  and  the 

United States concerning cooperation to fi ght terrorism or crime. The aim is to 

ensure a high level of protection of all types of personal data when transferred 

and processed for law enforcement purposes as part of transatlantic cooperation.

Equality and non-discrimination continued to play an important role in the EU’s 

fundamental rights agenda in 2010. In January, the Court of Justice confi rmed, 

with  regard  to  a  German  employment  law,  the  existence  of  the  principle  of 

non-discrimination  on  grounds  of  age  and  the  role  of  national  courts  in  its 

application (7). In a later judgment, the Court applied this principle, considering 

that depriving a worker of a severance allowance because he or she may draw an 

old age pension constitutes discrimination on grounds of age (8).

In  March,  the  Commission  adopted  a  women’s  charter  to  outline  the  political 

priority given to the fundamental rights of gender equality in the work of the 

new  Commission.  On  this  basis,  the  Commission  adopted  a  fi ve-year  strategy 

for promoting gender equality in September. This strategy aims in particular to 

make better use of women’s potential, thereby contributing to the EU’s overall 

economic  and  social  goals.  Objectives  range  from  getting  more  women  into 

supervisory  boards  of  publicly  listed  companies  to  tackling  gender-based 

violence.

In November, the Commission presented a 10-year strategy on disability, with 

the purpose of making Europe more accessible and barrier free. Standardisation 

and public procurement are key instruments which the Commission will use for 

this purpose over the next years. The Commission will also explore the feasibility 

of a European accessibility act.

41

G E N E R A L R E P O RT 2010   |   A C I T I Z E N S’ AG E N DA: P U T T I N G P E O P L E AT T H E H E A RT  O F  E U R O P E A N AC T I O N 

The challenges of the social and economic integration of Roma — Europe’s largest 

ethnic  minority  —  as  well  as  related  free  movement  issues  were  of  particular 

concern for the EU in 2010. The Commission had put the issue on the agenda 

on 7 April with its communication ‘The social and economic integration of the 

Roma in Europe’ (9). Thereafter, the removal of Roma from France in summer 2010 

prompted several reactions and interventions from the Commission in August, 

September and October. The issue was intensely debated at a European Council 

in  September  and  at  the  European  Parliament.  As  a  result,  France  as  well  as 

other Member States adapted their national legislation to the requirements of 

the EU’s free movement directive of 2004. The Commission set up a Roma task 

force which has the mandate to analyse to what extent EU and national funds are 

being eff ectively used for projects helping the social and economic integration 

of Roma both in countries of origin and in host countries. First fi ndings of the 

Roma  task  force  in  December  show  that  an  EU  strategy  for  a  more  targeted 

funding  of  Roma  integration  by  all  Member  States  is  needed.  Such  a  strategy 

has therefore been included in the Commission’s work programme for the fi rst 

semester of 2011.

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The situation of Roma in their countries of 
origin as well as in several host countries 
across the EU hit the headlines in 2010. 
Here, a group of Roma attend an annual 
festival in Costesti, Romania.

Following the 2006 communication ‘Towards an EU strategy on the rights of the 

child’ (10), the 116000 hotline was set up for missing children and their parents 

to  call  for  help  wherever  they  are  in  the  EU.  Three  years  after  adoption,  the 

hotline is functioning in 13 Member States. The European Commission adopted 

in November a communication aiming to off er practical help to the remaining 

14  EU  countries  that  have  not  yet  implemented  the  hotline,  while  ensuring  a 

high quality of service throughout the EU.

42

 
 
 
 
 
 
The EU citizenship report identifi ed 
gaps between rules and reality: citizens 
still face obstacles in their daily lives, 
particularly in cross-border situations. 
The problems frequently encountered 
include cumbersome administration 
when registering a car bought in 
another Member State, complex rules on 
reimbursement for healthcare obtained 
in other countries, or diffi  culties in 
securing consular services from another 
Member State when in a country where 
their home Member State does not have 
representation.

Citizens
In  October,  the  Commission  published  a  25-point  plan  to  bring  concrete 

benefi ts  to  EU  citizens  on  the  move.  The ‘EU  citizenship  report’,  adopted  on 

27  October,  aims  at  enhancing  mobility  by  removing  the  barriers  citizens  still 

face when exercising their right of moving to a Member State other than their 

own, to study or work, set up a business, start a family or retire. The Court has, 

in particular, ruled that citizens are entitled to reside in another Member State 

purely as citizens of the Union (11), thus recognising EU citizenship as a source of 

free movement rights.

The Commission is acting to ensure these rights are fully respected. These rights 

are equally important when citizens travel, marry, buy or inherit property, vote, 

receive  medical  treatment  or  just  shop  online  from  companies  established  in 

other Member States.

The proposed 25 concrete measures which the Commission plans to take over the 

next three years will make life easier for EU citizens when exercising their rights 

in  another  EU  country.  The  measures  will  simplify  formalities  and  conditions 

for  citizens  to  enjoy  their  rights.  They  range  from  updating  rules  protecting 

holidaymakers  from  bankruptcy  of  their  travel  provider  during  their  holiday, 

to reinforcing the right to consular protection for EU citizens abroad, and from 

helping consumers get redress if they have problems with a trader, to making it 

simpler and quicker for people working in another EU country to transfer their 

social security rights. Car owners will benefi t from simplifi ed paperwork for the 

registration of cars bought in another EU country, and smaller fi rms from simpler 

accounting rules.

As  to  European  citizenship,  the  Court  of  Justice  stated  that  withdrawal  of 

naturalisation obtained by deception could result in the loss of citizenship of the 

Union. However, the withdrawal decision would have to respect the principle of 

proportionality (12).

Citizens getting increasingly mobile between EU countries

Around 12 million European citizens live in a diff erent EU country to that in which 
they  were  born.  Many  more  have  cross-border  experiences  when  travelling, 
studying or working, possibly getting married or divorced, buying or inheriting 
property, voting, receiving medical treatment or just shopping online. There are 
16 million marriages with a cross-border dimension. Some 2 million European 
students have studied in another Member State since the launch of the Erasmus 
programme. As a result, many are keen to use their rights as European citizens. 
Too many, however, are still prevented from doing so. It should also be noted that 
an additional 30 million EU citizens live permanently in a non-EU country, but 
only in three countries (China, Russia and the United States) are all 27 Member 
States represented.

43

G E N E R A L R E P O RT 2010   |   A C I T I Z E N S’ AG E N DA: P U T T I N G P E O P L E AT T H E H E A RT  O F  E U R O P E A N AC T I O N 

HOME AFFAIRS: AN OPEN AND SECURE EUROPE
Policies  in  this  area  promote  a  stable,  lawful  and  secure  environment  where 

everyone should feel safe, and where we join forces to address organised and 

cross-border crime and terrorism — an area without internal borders where EU 

citizens and non-EU nationals may enter, move, live and work.

A MORE SECURE EUROPEAN UNION

After taking stock in a communication 
in July of the achievements and 
challenges in EU counterterrorism policy, 
the Commission set out an internal 
security strategy in November. It identifi es 
fi ve priority areas where the EU can bring 
real added value: serious and organised 
crime; terrorism; cybercrime; border 
management; and natural and man-made 
disasters. The strategy establishes a new 
joint approach to responding to security 
threats and challenges. It covers 2011–14, 
and envisages action based on solid 
evidence and appreciation of threats and 
risks, while respecting fundamental rights 
and protection of personal data. 

Security
In order to become eff ective, the Europe 2020 strategy needs to be deployed in 

a secure and lawful environment. The Commission has evaluated its tools and 

instruments to ensure the right balance between security and rights of citizens. 

It  has  taken  initiatives  to  increase  the  security  of  all  EU  citizens  —  notably  in 

preventing terrorism and organised crime.

The European Network and Information Security Agency was also modifi ed to 

increase European cross-border capability to prevent, detect and better respond 

to network and information security incidents.

A  long-term  agreement  was  negotiated  with  the  USA  on  the  processing  and 

transfer of fi nancial data for the purpose of fi ghting terrorism (the TFTP agreement 

— see box), and entered into force in August. A proposal for a regulation laying 

down common rules to limit access to some chemicals that can be misused as 

precursors to produce home-made explosives was tabled in September.

 The EU–US Terrorist Finance Tracking Programme 

This agreement on the transfer of fi nancial messaging data from Europe allows 
targeted  searches  for  counterterrorism  investigations  under  the  US  Terrorist 
Finance Tracking Programme (TFTP). It was reached after diffi  cult negotiations to 
ensure an adequate level of protection of Europeans’ data. Under the terms of the 
agreement (13), Europol verifi es all US requests before any data is transferred and 
an independent EU scrutiniser is posted in Washington to monitor compliance 
with  the  agreement’s  strict  requirements  whenever  US  offi  cials  look  at  this 
information.  The  functioning  will  be  regularly  reviewed,  starting  in  February 
2011, and the Commission will report on the outcome to the European Parliament 
and Council. The Commission started work in November on the creation of an 
equivalent European system, which will eventually allow extraction of data on 
EU soil, thus ending the transfer of bulk data to the USA.

In  the  fi ght  against  terrorism,  the  Court  of  Justice  specifi ed  the  scope  of  the 

Council  regulation.  It  imposed  the  freezing  of  funds  and  other  economic 

resources of persons associated with Usama bin Laden, the Al-Qaeda network 

or the Taliban (14). It notably stated that the freezing of funds does not apply to 

certain social security benefi ts paid to their spouses (15).

It  also  stated  that  the  Council  decisions  which 

included  the  DHKP-C 

(the Revolutionary People’s Liberation Party-Front in Turkey) on lists relating to 

measures for combating terrorism before June 2007, adopted in breach of basic 

procedural safeguards, cannot form any part of the basis for criminal proceedings 

against members of that organisation who are not on those lists (16).

44

The General Court annulled certain Council measures ordering the freezing of 

funds of Stichting Al-Aqsa with a view to combating terrorism (17).

A communication adopted in July on information exchange in the area of justice, 

freedom  and  security  set  out  the  principles  underpinning  the  development 

of  future  internal  security  initiatives.  It  also  proposed  a  European  Information 

Exchange  Model,  to  bring  clarity  to  European  citizens  concerned  about  data 

sharing by public authorities.

A  communication  on  a  strategy  for  transferring  passenger  name  records 

(PNR)  to  other  countries  was  approved  in  September.  PNR  data  have  proven 

to  be  an  important  tool  in  the  fi ght  against  serious  transnational  crime  and 

terrorism  but,  at  the  same  time,  they  raise  important  issues  about  protection 

of  personal  data.  The  Commission  communication  focused  on  protecting 

passengers’  personal  data  and  the  mechanics  of  data  transfer.  It  also  stressed 

the importance of sharing analytical information obtained from PNR with police 

and  judicial  authorities  within  the  EU,  as  a  contribution  to  European  citizens’ 

security. The communication was accompanied by three negotiation mandates 

for agreements with Australia, Canada and the USA, which were adopted by the 

Council in December.

The  use  of  airport  body  scanners  was  assessed,  and  the  Commission  urged 

common  standards  for  their  operation  as  well  as  full  respect  of  fundamental 

rights (notably human dignity and privacy) if Member States opt to deploy them. 

In response to new threats to civil aviation, an ad hoc High-Level Working Group 

co-chaired  by  the  Commission  and  the  Belgian  Presidency  explored  possible 

enhancements  of  security  systems  for  cargo  and  mail. This  was  done  in  close 

cooperation with Member States and operators, based on common threat and 

risk assessments and better integration with intelligence. This group’s report with 

recommendations for further actions was endorsed by the Council in December.

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Steps were taken towards a stronger legal framework with tougher penalties to 

counter traffi  cking in human beings and child sexual abuse, sexual exploitation 

and child pornography. Following proposals from the Commission adopted in 

March, the European Parliament and Council agreed on the text of a directive 

on  the  fi ght  against  traffi  cking  in  human  beings,  including  minimum  rules 

concerning  the  defi nition  of  criminal  off ences,  the  level  of  sanctions  and 

protection  of  victims (18).  Once  adopted,  the  new  rules  will  strengthen  crime 

prevention and the protection of victims of traffi  cking. Moreover, in December, 

the  Commission  appointed  a  European  anti-traffi  cking  coordinator  who  will 

have  a  central  role  in  coordinating  all  aspects  of  policies  against  this  crime. 

The coordinator will also help elaborate existing and new EU policies relevant 

to  the  fi ght  against  traffi  cking  and  provide  overall  strategic  policy  orientation 

for  the  EU’s  external  policy  in  this  fi eld.  Finally,  the  Commission  launched  a 

new  website (19)  dedicated  to  the  fi ght  against  traffi  cking  in  human  beings. 

This website should become a one-stop shop at EU level for practitioners and 

the  public  interested  in  knowing  more  about  traffi  cking  and  how  it  is  being 

addressed within the EU.

Stricter  rules  were  proposed  in  May  to  protect  European  citizens  from  attacks 

against  information  systems  and  cybercrime.  Under  the  proposed  rules, 

the  perpetrators  of  cyber  attacks  and  the  producers  of  related  and  malicious 

software  could  be  prosecuted,  and  would  face  heavier  criminal  sanctions. 

Member  States  would  also  be  obliged  to  quickly  respond  to  urgent  requests 

for  help  in  the  case  of  cyber  attacks,  rendering  European  justice  and  police 

cooperation  in  this  area  more  eff ective.  Europol,  the  European  Police  Offi  ce, 

became  an  EU  agency  at  the  start  of  the  year.  The  Commission  initiated  a 

refl ection  on  its  future  regime  under  the  Treaty  of  Lisbon,  backed  up  with  a 

December  communication  on  the  procedures  for  democratic  scrutiny  over 

Europol’s  activities,  paving  the  way  for  a  more  robust  parliamentary  control 

system  over  them.  The  communication  supports  the  idea  of  creating  a  joint 

body  through  which  the  European  Parliament  and  national  parliaments  can 

exercise control over Europol. It also proposes ways to increase transparency in 

Europol’s work.

Openness
The  European  Union 

is  constantly  seeking  the  right  balance  between 

maintaining secure borders and remaining open to legitimate access by people 

from other countries — a balance which is forged in its policies on migration, 

visas and asylum.

In the area of migration, the goal is a policy which — as foreseen in the Europe 

2020  strategy  —  clears  the  way  for  legal  immigration,  which  is  an  asset  for  a 

sustainable economic recovery and, at the same time, addresses illegal migration. 

Priority  is  being  given  to  consolidating  a  genuine  common  immigration  and 

asylum  policy.  It  includes  new  and  fl exible  admission  systems  for  labour 

immigration  and  initiatives  to  support  integration  of  immigrants.  It  aims  for 

progress in building a common European asylum system based on solidarity and 

the respect for fundamental rights.

46

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The EU is building a Europe that is open 
and secure at the same time. Here, a 
cybercrime police unit in Lille monitors 
the Internet to track down fraudulent use, 
scams and identity theft.

 
 
 
 
 
 
In  line  with  the  Lisbon  Treaty’s  new  legal  base  for  support  measures  for 

the  integration  of  legally  residing  non-EU  nationals,  the  Council  in  June 

endorsed  support  for  Member  States’  policies  through  knowledge  exchange 

and  improved  coordination.  It  announced  a  new  European  agenda  on 

integration. The EU is moving towards a new and fl exible admission system for 

economic immigration.

In  July,  a  proposal  on  seasonal  workers  from  beyond  the  EU  was  made  to 

establish a simple and fast-track common EU-wide admissions system. The aim is 

to protect this particularly vulnerable group with a secure legal status to prevent 

exploitation and to protect health and safety. At the same time, a proposal on 

intra-corporate transferees aimed to make it easier for multinational companies 

to  temporarily  transfer  non-EU  skilled  workers  into  branches  or  subsidiaries 

within the EU. In May, a four-year action plan was proposed on unaccompanied 

minors. It covers prevention, regional protection, reception and identifi cation of 

durable solutions. It takes account of the interests of the child and the Charter 

of Fundamental Rights as well as the UN Convention on the Rights of the Child. 

The Council endorsed the approach in June.

New  requirements  —  and  a  budget  —  were  agreed  for  completing  the 

Schengen Information System. This system aims to ensure a high level of control 

and security at the Union’s external borders, as well as to assist cooperation on 

law  enforcement.  The  Visa  Information  System  for  the  exchange  of  visa  data 

among  Member  States  also  progressed,  and  from  2011  onwards  will  help  in 

implementing the Schengen common visa policy, as well as preventing terrorism 

and other internal security threats.

Work on a common European asylum system continued. It involved the formal 

establishment  of  the  European  Asylum  Support  Offi  ce  in  Malta  in  November, 

and further negotiations on modifi ed legislation as well as a joint resettlement 

scheme.  The  European  Asylum  Support  Offi  ce  will  enhance  solidarity  among 

Member  States  and  help  them  in  fulfi lling  their  European  and  international 

obligations  in  this  fi eld.  It  will  develop  practical  cooperation  among  Member 

States on asylum, by facilitating exchange of information on countries of origin, 

by  providing  them  with  support  for  translation  and  interpretation,  training  of 

asylum  offi  cials  and  assisting  in  the  relocation  of  recognised  refugees.  It  will 

also support Member States under ‘particular pressure’, in particular through the 

establishment  of  an  early  warning  system,  and  coordinating  teams  of  experts 

to assist EU countries in managing asylum applications and in putting in place 

appropriate reception facilities. Finally, it will collect and enhance the exchange 

of  information  on  best  practices,  drawing  up  an  annual  report  on  the  asylum 

situation in the EU and adopting technical documents, such as guidelines and 

operating manuals.

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The EU aims to ensure a high level of control 
and security at its external borders. Border 
guards — such as here on the Bulgarian–
Turkish border — use sophisticated 
equipment and intelligence to prevent 
illegal traffi  c.

A modifi ed legal framework was proposed for the border operations coordination 

agency,  Frontex,  to  strengthen  its  operational  capabilities  and  to  reinforce 

consideration  of  fundamental  rights  (with  particular  emphasis  on  return 

operations).  New  rules  on  sea  border  and  rescue  operations  were  agreed  to 

ensure that measures taken in the context of sea border surveillance operations 

coordinated by Frontex fully respect fundamental rights and non-refoulement 

— the principle of international law that protects refugees from being returned 

to places where their lives or freedoms could be threatened.

Frontex  Rapid  Border  Intervention  Teams  were  activated  for  the  fi rst  time 

when  Greece  requested  operational  assistance  in  responding  to  urgent  and 

exceptional  pressure  at  points  along  its  external  borders  in  October,  as  large 

numbers of non-EU nationals tried to enter illegally.

The  European  Parliament  and  Council  agreed  on  the  necessary  amendments 

to  a  2003  directive  which  governs  the  status  of  non-EU  nationals  who  are 

long-term  residents,  refugees  and  benefi ciaries  of  subsidiary  protection  but 

not  currently  entitled  to  long-term  resident  status.  With  these  amendments, 

refugees  and  benefi ciaries  of  subsidiary  protection  will  be  able  to  acquire 

long-term resident status in the Member States of the EU on a similar basis to 

other non-EU nationals who have lived legally in the EU for more than fi ve years. 

The new rules will enable benefi ciaries of international protection who become 

long-term residents to take up residence in a Member State other than that in 

which they are recognised. Under certain conditions, they would enjoy equality 

of treatment with citizens of the EU Member State in which they reside in a wide 

range of economic and social areas, including education and access to the labour 

market and social security benefi ts. Furthermore, the new rules also strengthen 

safeguards against refoulement (expulsion).

The  Court  of  Justice  stipulated  the  circumstances  under  which  a  person 

could lose refugee status. In June, it also  specifi ed the conditions in which an 

application for refugee status made by a displaced Palestinian in a Member State 

must be examined (20).

Close  analysis  of  national  conditions  in  Albania  and  Bosnia  and  Herzegovina 

led  to  a  decision  to  lift  the  short-stay  visa  obligation  on  citizens  of  these 

two  countries.  The  Visa  Code  which  became  applicable  in  April  harmonised 

procedures  and  enhanced  transparency  for  the  more  than  10  million  people 

who apply for Schengen visas every year. Good progress was recorded towards 

full  visa  reciprocity  with  non-EU  countries,  including  visa  waiver  agreements 

with Brazil and Schengen visa-free status for Taiwan.

48

 
 
 
I N V O LV I N G   C I T I Z E N S   A N D   E A S I N G   E V E R Y DAY   C O N C E R N S

Citizens  have  obtained  new  benefits  across  a  wide  range  of  the 
activities  where  the  EU  has  influence.  They  enjoy  increasing 
opportunities  for  access  to  and  involvement  in  the  way  the  EU 
operates.  From  cheaper  mobile  phone  calls  to  easier  switching 
between  energy  providers  or  better  protection  while  travelling, 
and from safer products to healthier food, the EU has maintained 
and  continually  developed  its  interventions  on  behalf  of  citizens. 
Competition  policy  has  helped  create  market  dynamics  that  are 
favourable  to  consumers,  the  rights  of  workers  and  spouses  have 
been  enhanced  by  social  policy,  and  responses  to  fires  and  flood 
damage  have  been  upgraded  by  legislation,  cooperation  and 
coordination at EU level.

SERVICES

Telecoms
Mobile  phone  users  benefi ted  from  further  EU-imposed  price  cuts  and 

guarantees  (see  box),  and  more  are  under  consideration:  the  Commission 

concluded  in  June  that  competition  is  still  not  providing  suffi  cient  choice  to 

consumers. A revised telecom regulatory framework included the establishment 

of  the  Body  of  European  Regulators  for  Electronic  Communications.  This  will 

improve the consistency of the EU regulatory framework for telecoms, thereby 

improving conditions for citizens as consumers.

A COMMON CHARGER 
FOR MOBILE PHONES

Mobile phones are fi ne — until the 
battery goes fl at and you do not have your 
charger with you. No calls. No access to 
your data or your contacts. Then a frantic 
search for a compatible charger starts. 
But that will soon be a problem of 
the past. Thanks to pressure from the 
Commission, 13 of the leading phone 
makers have agreed on a harmonised 
system for data-enabled phones sold in 
the EU. All these phones can be charged 
with a simple micro-USB plug. The result 
for the environment is less electrical 
waste. Common sense, rather than new 
legislation, has led to this achievement.

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Lower roaming tariff s in the EU protect 
consumers from bill-shocks.

Roaming — a big win for citizens

From 1 July 2010, new caps on travellers’ data-roaming limits came into eff ect. 
In addition, maximum wholesale prices for data roaming have fallen from €1 to 
80 cent per megabyte. The maximum price for making a roaming call has been 
cut to 39 cent per minute (excluding VAT), from the pre-July 2010 cost of 43 cent, 
while  receiving  a  call  will  cost  a  maximum  of  15  cent  per  minute  (excluding 
VAT), instead of 19 cent. Since 2005, costs have been cut by as much as 70 % for 
citizens  making  calls  on  their  mobile  phones  while  in  another  Member  State. 
A text message between EU Member States costs 60 % less than it did in 2005. 
On  8  December,  the  European  Commission  launched  a  public  consultation 
to  seek  the  views  of  consumers,  businesses,  telecom  operators  and  public 
authorities on the EU mobile phone roaming market.

In  June,  the  Court  of  Justice  confi rmed  the  validity  of  the  so-called  roaming 
regulation (21).  It  lays  down  maximum  charges  for  calls  made  and  received  by 
users outside their own network (22).

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The electricity market has been reviewed 
in order to enable consumers to avail 
themselves of better tools to assess prices 
and services. Here, an electricity pylon 
carrying high-voltage lines.

Financial services
Beyond the repair work to the fi nancial sector (see Chapter 1), the interests of the 

citizen were directly addressed. In March, the Commission promoted dialogue 

with banking and consumer associations on transparency on bank fees (which 

led to the launch of an industry-led bank fees initiative in November). This was 

designed to lead to a code of conduct. A new section on fi nancial literacy was 

launched  in  April  on  Dolceta,  the  online  consumer  education  tool,  covering 

spending, saving and investing, borrowing, and protecting or insuring.

The Commission sponsored online consumer education on fi nancial literacy in 

April and May and, in July, set up a Financial Services User Group to strengthen 

the  representation  of  consumers,  retail  investors  and  other  users  of  fi nancial 

services  at  EU  level.  This  group  is  also  to  advise  the  Commission  on  issues 

aff ecting users of fi nancial services such as retail banking, mortgage credit and 

insurance. The Commission sought solutions to ease cross-border transactions, 

with a Green Paper on policy options for progress towards a European contract 

law  for  consumers  and  businesses,  and  tackled  tax  obstacles  for  citizens 

operating across borders.

Energy
The  Commission  reviewed  how  electricity  markets  are  performing  for  retail 

consumers. The aim is to enable consumers to exercise choice in the market place, 

by  giving  them  tools  to  assess  prices  and  services.  Working  with  consumers, 

regulators and industry, the Commission also put forward recommendations for 

making energy bills clear, concise and comparable.

Services and services of general interest
Services  of  general  interest  also  fall  within  the  scope  of  EU  rules.  Guidance 

was  updated  at  the  end  of  October  on  the  application  of  state  aid,  public 

procurement  and  internal  market  rules  to  services  of  general  economic 

interest  and,  in  particular,  to  social  services  of  general  interest.  At  the  same 

time, the Commission published its second biennial report on social services of 

general interest. 

In  June,  the  Commission  consulted  on  the  implementation  process  for  the 

services directive, which came into eff ect at the end of December 2009.

50

 
HEALTH AND CONSUMERS
The Commission reinforced its capacity to determine where the single market 

was not working for consumers. It identifi ed continuing problems in cross-border 

e-commerce  and  in  national  enforcement  regimes  for  consumer  protection. 

It also pinpointed the main consumer markets underperforming for consumers. 

It  highlighted  obstacles  in  the  retail  electricity  market  to  eff ective  consumer 

choice  and  switching  providers.  Performance  was  reviewed  for  the  European 

Consumer  Centres  network,  which  handles  60 000  complaints  per  year,  and  a 

mid-term evaluation of the consumer policy strategy 2007–13 was concluded. 

This will feed into the design of the strategy post-2013.

In the area of retail fi nancial services, a dialogue between banking and consumer 

associations on transparency and comparability led to the formal launch of an 

industry-led  bank  fees  initiative  in  November. This  was  designed  to  lead  to  a 

code of conduct.

In January, the Court of Justice stated  that  allowing  customers to  take part in 

a lottery free of charge following a certain number of purchases can, in certain 

specifi c  circumstances,  constitute  an  unfair  commercial  practice,  prohibited 

by  the  European  unfair  commercial  practices  directive.  In  the  context  of  a 

preliminary ruling concerning the directive on the protection of consumers in 

respect of distance contracts (23), the Court ruled that consumers should not be 

charged delivery costs if they withdraw from a distance contract. In such a case, 

only the cost of returning the goods may be charged to the consumer (24).

Product safety
Product  safety  was  kept  under  review  with 

impact  assessments  and 

consultations  on  the  2001  general  product  safety  directive  and  the  1987 

directive  on  food  imitating  products.  New  requirements  were  also  considered 

for bathing articles for children and for childproof locking devices for windows 

and balcony doors (25). International cooperation led to a trilateral meeting with 

the Chinese and US authorities. New guidelines for the EU’s rapid information 

system on hazardous products came into eff ect in January, clarifying procedures 

and tightening up risk assessment. Action was maintained against hazards from 

materials  and  products  as  diverse  as  dimethylfumarate  and  novelty  cigarette 

lighters. Rules for plastic materials in contact with food were updated.

Food safety
EU  measures  to  control  BSE  (the  so-called  ‘mad  cow’  disease)  —  including 

the  minimum  age  limit  for  testing  cattle  for  the  disease  —  were  further 

reviewed. An initiative to review meat inspections systems was launched with 

scientifi c input from the European Food Safety Authority (EFSA) on criteria and 

methodology. In November, more than €250 million was earmarked to support 

programmes  to  eradicate,  control  and  monitor  animal  diseases  in  2011.  New 

limits  were  set  and  new  checks  were  run  on  contaminants  and  residues  of 

veterinary drugs and pesticides. New approvals were given to active substances 

included  in  plant  protection  products,  and  new  obligations  were  imposed  on 

manufacturers.  The  list  of  currently  authorised  food  additives  was  reviewed, 

and the fi rst EU list for approved fl avourings was created — for smoke fl avours. 

Controls  were  tightened  up  on  imports  of  certain  feed  and  food  of  non-

animal origin.

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In  October,  the  European  Parliament  reiterated  its  commitment  to  preventing 

the  sale  of  meat  and  milk  from  cloned  animals  in  the  EU.  This  followed  the 

Commission’s  publication  of  a  report  on  cloning  which  advocates  a  fi ve-year 

moratorium on the sale of food from cloned animals and on the use of cloning 

for food production purposes. The European Parliament and Council are set to 

enter into conciliation negotiations to try and fi nd an agreement on proposed 

updates to ‘novel foods’ rules.

Refl ecting the central importance of food quality for every farmer and consumer, 

the Commission adopted a string of proposals in December. These encourage 

diversifi cation  of  agricultural  production,  ensure  fair  competition  and  help 

farmers  to  communicate  better  the  qualities  of  their  products.  This  so-called 

‘quality package’ makes it easier for consumers to use and understand EU quality 

schemes, such as the ‘protected designation of origin, protected geographical 

indication’  and  ‘traditional  speciality  guaranteed’.  These  measures  also  help 

improve voluntary certifi cation schemes for agricultural products and foodstuff s 

through best practice guidelines.

The  Commission  has  improved  food  labelling.  It  has  worked  in  collaboration 

with the European Parliament and Council to advance the ‘food information to 

consumers’ proposal, to enable consumers to make informed choices, taking into 

account  nutrition  and  dietary  advice.  New  EU  rules  on  organic  food  labelling, 

including the requirement to display the new EU organic logo, entered into force 

in July. From the start of the year, food in the EU became safer thanks to more 

controls and fewer and less harmful residues — owing in part to the withdrawal 

from the market of harmful pesticides, and in part to the strengthening of the 

Union’s border control activity.

To  protect  citizens  against  misleading  health  claims  on  food,  the  Commission 

is working to establish lists of permitted health claims, based on the scientifi c 

assessment of EFSA and following authorisation procedures at EU level. In 2010, 

three  health  claims  were  authorised  and  15  were  rejected.  At  the  end  of  the 

process, only substantiated health claims will be permitted on the EU market. 

Initiatives  (non-regulatory)  are  also  under  way  to  encourage  stakeholders  to 

continue eff orts in the reformulation of food products with respect to nutrients 

that may increase the risk of chronic diseases.

Genetically modified foods
In July, the Commission adopted a proposal setting out a new fl exible approach 

on  GMO  cultivation,  which  takes  into  consideration  Member  State  desires, 

but also retains the basis of solid science for any GMO authorisation. According 

to this proposal, cultivation decisions lie with Member States, while authorisation 

decisions remain at EU level. In November, the Commission services fi nalised a 

draft  regulation  referred  to  as  a ‘technical  solution  for  the  low-level  presence 

of non-authorised GM material in feed’ or ‘LLP’. This proposal will provide legal 

certainty  to  feed  operators  importing  feed  material  from  third  countries  by 

harmonising offi  cial control of GMOs for which an application is pending in the 

EU, or for which an EU authorisation has expired.

52

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The EU has improved food labelling to 
enable consumers to make informed 
choices. The new compulsory EU organic 
logo entered into force in July. 

 
 
 
The  Commission  also  prepared  a  report  on  the  socioeconomic  implications 

CLASSIFYING PLANTS

of  GMO  cultivation,  based  on  contributions  from  24  Member  States. 

The development of guidelines for the environmental risk assessment of GMOs 

was based on an update to the EFSA guidance published in November. External 

evaluations  of  GMO  legislation  as  regards  cultivation  and  food  and  feed  have 

been carried out. These may be followed by an impact analysis of possible policy 

changes  by  mid-2012. The  Commission  adopted  a  decision  authorising  a  GM 

potato  for  cultivation.  Other  decisions  on  food  and  feed  uses  are  still  under 

examination. The  guidelines  for  the  risk  assessment  of  GM  food  and  feed  are 

being fi nalised after consultations with Member States, EFSA and stakeholders.

Medical products and services
As  to  free  circulation  of  medical  services  in  the  internal  market,  the  Court  of 

Justice  judged  that  public  authorities  may  off er  fi nancial  incentives  to  induce 

doctors  to  prescribe  cheaper  medicinal  products,  provided  notably  that  the 

incentive scheme is based on non-discriminatory objective criteria (26). The Court 

also  specifi ed  the  conditions  in  which  demographic  and  geographical  limits 

can be set by the competent authorities of a Member State for the opening of 

new pharmacies, in order to ensure adequate pharmaceutical services (27). And it 

ruled that where unscheduled hospital care is administered during a temporary 

stay in a Member State other than the Member State of affi  liation, the latter is not 

required to reimburse the patient as regards costs which, in the State where the 

care was administered, fall to the patient to pay (28).

Quality and safety of substances of human origin for medical use
On tissues and cells of human origin, the EU has advanced towards a consistent 

level of competence and performance of inspections and control measures, with 

new  guidelines  on  the  training  and  qualifi cation  of  offi  cials.  In  July,  new  rules 

were  adopted  on  standards  of  quality  and  safety  of  human  organs  intended 

for  transplantation,  covering  procurement  and  transplantation  activities, 

traceability, reporting of adverse reactions and safe transportation.

Action against counterfeiting
EU customs authorities seized large quantities of drug precursors — legitimate 

goods used by the perfume industry but illicitly deviated for the manufacture 

of synthetic drugs such as ecstasy — including 240 tonnes of acetic anhydride, 

the  main  heroin  precursor.  They  also  intercepted  118  million  fake  products, 

including  many  presenting  potential  danger  to  citizens  —  from  cigarettes  to 

shampoos, and medicines to household appliances.

Action against smoking
The  Commission  launched  a  public  consultation  with  a  view  to  reviewing  the 

2001  rules  on  tobacco  products  to  respond  to  health  risks  and  to  overcome 

persistent  diff erences  between  Member  States’  provisions  on  manufacture, 

presentation and sale of tobacco products. The phasing out of direct subsidies 

for tobacco also began this year.

The Commission registered some 
2 800 new plant varieties in the common 
catalogues. Currently, therefore, around 
19 700 varieties of agricultural crops 
and 17 300 varieties of vegetable 
crops can be marketed throughout 
the EU. The Commission fi nalised the 
‘conservation material’ package of 
legislation on less stringent requirements 
for marketing of seed for the purposes 
of conservation of genetic resources and 
natural environment.

In 2010, the applications for protection of 
plant variety intellectual rights increased 
slightly, with some 17 500 plant varieties 
currently protected. In order to solve issues 
related to farm use of protected plant 
varieties, a stakeholders’ working group 
developed ideas for future solutions.

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Polish customs offi  cers inspect a car 
fi lled with cigarettes on the border with 
Kaliningrad Oblast, Russia. EU customs 
and tax offi  cials fi ght smuggling that can 
undermine its citizens’ health as well as 
the EU’s excise revenues.

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BENEFITING FROM A FAIR MARKET
Citizens have benefi ted from the operation of EU competition policy. The Commission 

has  vigorously  enforced  competition  rules,  through  its  actions  to  combat  cartels 

and  other  anticompetitive  practices,  as  well  through  its  merger  control  activity. 

In  particular,  the  Commission  has  agreed  sanctions  against  a  number  of  large 

cartels, which are the most harmful type of competition law infringement.

Tackling anticompetitive behaviour

In  2010,  the  Commission  fi ned  17  bathroom  equipment  manufacturers  €622  million  for  coordinating  price  increases 
for baths, sinks and taps for 12 years in six countries covering 240 million people. Not only will this cartel have harmed 
businesses  in  the  construction  and  plumbing  sectors,  but  a  large  number  of  consumers  will  also  have  been  aff ected. 
Eleven  air  cargo  carriers  were  also  fi ned  a  total  of  €799  million  for  coordinating  surcharges  for  fuel  and  security  over 
a six-year period. Such collusive behaviour harms European businesses and consumers. In June, the Commission fi ned 
17 producers of prestressing steel a total of €458 million for operating a price-fi xing and market-sharing cartel between 
1984 and 2002. The infringement covered all but three of the then Member States and therefore was of importance for 
nearly the entire European construction market. In December, the Commission fi ned six producers of liquid crystal display 
(LCD) panels a total of €648 million for operating a cartel which harmed European buyers of television sets, computer 
monitors  and  electronic  notebooks,  a  key  component  of  which  is  a  LCD  panel.  Exposing  and  putting  a  stop  to  such 
cartels gives competitors and customers the chance to innovate and grow. It also provides consumers with wider choice, 
better quality and more competitive prices.

Besides cartels, the Commission fi ned the professional association of pharmacists 

in France €5 million for opposing forms of group structuring that would allow 

foreign  companies  operating  in  the  sector  of  laboratory  analysis  to  reduce 

costs,  improve  the  quality  of  tests  and  ultimately  compete  eff ectively  with 

those already established in France. Prices of clinical laboratory tests in France 

are some of the highest in the EU. In the decision, the Commission invoked for 

the  fi rst  time  a  rule  whereby  members  of  an  association  of  undertakings  that 

has  infringed  competition  law  may  be  held  liable  if  the  association  itself  has 

insuffi  cient funds to pay the fi ne.   

In 2010, the Court of Justice and the General Court both issued several rulings in 

the fi eld of competition law.

The  Court  of  Justice  confi rmed  a  judgment  of  the  General  Court  stating  that 

internal  company  communications  with  in-house  lawyers  are  not  covered 

by  legal  professional  privilege,  having  regard  to  in-house  lawyers’  economic 

dependence and the close ties that they have with their employers, as well as 

the fact that they do not enjoy the same level of professional independence as 

external lawyers (29). 

Moreover, the Court of Justice decided on the extent to which the Commission 

is  bound  by  the  principle  of  proportionality  when  accepting  commitments 

off ered  by  undertakings  which  are  being  investigated  under  Articles  101  and 

102 TFEU. It also gave guidance on the procedural rights enjoyed by third party 

undertakings directly aff ected in their interests by these ‘commitment decisions’ 

adopted pursuant to Article 9 of Regulation (EC) No 1/2003 (30). In the same way, 

the General Court confi rmed that the Commission enjoys a margin of discretion 

when fi xing the level of the fi nes imposed in the case of an infringement of the 

competition rules (31).

54

In  addition,  the  Court  of  Justice  upheld  the  €12.6  million  fi ne  imposed  on 

Deutsche  Telekom  for  abuse  of  its  dominant  position  in  the  fi xed  telephony 

markets in Germany (32).

In  July,  the  General  Court  essentially  upheld  the  decision  of  the  Commission 

fi nding  that  AstraZeneca  abused  its  dominant  position  by  preventing  the 

marketing  of  generic  products  replicating  their  anti-ulcer  product,  Losec. 

The Court slightly reduced the fi ne payable by AstraZeneca to €52.5 million (33).

The  General  Court  also  upheld  the  validity  of  the  prohibition  of  Ryanair’s 

takeover  of  Aer  Lingus (34)  and  the  lawfulness  of  the  Commission  decision  of 

7 January 2004 authorising, subject to the sale of assets, the purchase of Vivendi 

Universal Publishing by Lagardère.

The  Commission  has  also  paid  particular  attention  to  fostering  competition 

in  key  sectors  of  the  economy.  Notable  examples  include  the  air  transport 

sector, where the Commission expressed concerns that a planned joint venture 

between  British  Airways,  American  Airlines  and  Iberia  may  be  in  breach  of  EU 

antitrust  rules  and  may  harm  consumers.  In  response  to  these  concerns,  the 

companies provided commitments that will facilitate the entry and expansion 

of  competitors  on  key  transatlantic  air  routes.  The  commitments  will  ensure 

competition on these routes, resulting in an adequate choice of fl ights, quality 

of service and ticket price for consumers. This will also allow the airlines to put in 

place the transatlantic alliance that they have long aspired to. In the same fi eld, 

the Commission also approved the British Airways–Iberia merger on the grounds 

that it will lead to a stronger European air transport industry without harming 

competition.

In  four  cases  against  leading  energy  companies  in  Germany,  France,  Italy  and 

Sweden, the Commission opened up energy markets to more competition, with 

positive eff ects on more than 100 million customers (see Chapter 3).

In  February,  Microsoft  started  to  distribute  a  browser  choice  screen  to  its 

Windows users, off ering them an unbiased choice between web browsers, in line 

with a decision taken by the Commission in 2009. As a consequence, there is now 

more choice and competition in the browser market.

The  Commission  also  undertook  an  in-depth  investigation  of  the  planned 

acquisition  by  Unilever  of  the  Sara  Lee  body  and  laundry  care  business  with 

a  view  to  ensuring  that  the  merger  would  not  lead  to  increased  prices  for 

consumers.  To  obtain  the  Commission’s  approval  of  the  acquisition,  Unilever 

committed to divesting Sara Lee’s Sanex brand and related business in Europe. 

This clear and workable remedy was deemed suffi  cient to restore competition to 

all markets where the Commission had concerns.

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In  the  fi nancial  sector,  the  Commission  has  accepted  commitments  off ered 

by  Visa  Europe  to  cut  signifi cantly  its  multilateral  interchange  fees  (MIFs)  for 

debit  card  payments. The  MIF  is  a  bank-to-bank  fee  for  card  payments  that  is 

collectively  fi xed  by  Visa  Europe’s  member  banks,  but  is  ultimately  paid  by 

consumers.  Visa  Europe  also  committed  to  maintain  and  further  develop 

measures  which  will  increase  transparency  and  competition  in  the  payment 

cards  markets.  Lower  interbank  fees  will  trigger  real  benefi ts  for  merchants 

and consumers whilst more transparent rules will also improve competition in 

the card markets.

SOCIAL RIGHTS

Parental rights
In  July,  the  Court  of  Justice  ruled  that  workers  given  leave  from  work  or 

transferred  to  another  job  because  of  pregnancy  are  entitled  to  their  basic 

monthly  pay  and  the  supplementary  allowances  and  supplements  attached 

to their occupational status. It also stated that employed fathers are entitled to 

parental leave, irrespective of the professional status of their child’s mother (35).

The  European  Commission  said  it  would  work  on  a  balanced  compromise  to 

advance  mothers’  rights,  following  a  European  Parliament  vote  in  October  to 

increase the minimum period of maternity leave to full pay for 20 weeks — more 

than the 14 to 18 weeks proposed by the Commission.

A  directive  proposed  by  the  Commission  to  improve  the  social  protection  of 

self-employed  workers  and  remove  disincentives  to  female  entrepreneurship 

was  agreed  by  the  European  Parliament  in  May  and  the  Council  in  June. 

The  new  directive,  which  entered  into  force  on  4  August,  ensures  that  self-

employed women, assisting spouses and life partners of self-employed workers 

are  granted  a  suffi  cient  maternity  allowance  and  a  leave  period  of  at  least 

14 weeks should they choose to take it. This is the fi rst time a maternity allowance 

has been granted to self-employed workers at EU level. Assistant spouses and life 

partners of self-employed workers will have the right to social security coverage 

(i.e. such as pensions) on an equal basis to that of formal self-employed workers, 

if  the  Member  State  off ers  such  protection.  This  will  help  provide  a  stronger 

social safety net and prevent women from falling into poverty. Member States 

may  decide  whether  the  maternity  allowance  and  social  protection  rights  are 

granted  on  a  mandatory  or  voluntary  basis,  i.e.  upon  request.  Member  States 

have two years to introduce the legislation into their national laws.

Workers’ rights
Workers  received  further  protection  when,  in  March,  the  EU  employment  and 

social aff airs ministers adopted a directive to prevent injuries and infections to 

healthcare workers from sharp objects such as needle sticks — one of the most 

serious health and safety threats in European workplaces and estimated to cause 

1 million injuries each year.

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EU  research  programmes  are  helping  citizens  by  devising  solutions  to  social 

issues in Europe. Two issues were examined in major EU conferences in 2010 — 

diff erent types of inequalities and their role in poverty in Europe, and religion 

and tolerance and their impact on European cohesion.

The  Commission  issued  a  Green  Paper  in  July  launching  discussions  on  the 

future of pensions in the face of demographic change. The aim of the paper is to 

ensure that the EU puts the right measures in place to support Member States 

in their diffi  cult task of providing their citizens with adequate, sustainable and 

safe pensions — both now and in the future. The design of pension systems is 

largely the responsibility of Member States, but the regulatory framework at EU 

level covers some important aspects, such as cross-border coordination of social 

security  pensions,  the  internal  market  for  funded  occupational  schemes  and 

standards on prudential rules, guarantees in case of the insolvency of enterprises 

and  anti-discrimination.  In  November,  EU  ministers  approved  a  report  on 

the subject (36).

Mobility
In May, new rules came into force on social security coordination, aimed at making 

life easier for Europeans on the move — whether for work or as pensioners, job 

seekers  or  tourists. The  result  is  stronger  guarantees  that  rights  in  the  area  of 

sickness insurance, pensions, unemployment and family benefi ts are preserved 

when  moving  within  Europe.  Information  must  be  provided  actively  and 

delivered rapidly by the social security institutions in Member States. More up-

to-date procedures will lead to quicker and simpler services for citizens, cutting 

red tape and reducing the administrative burden for public services, including 

through a new information network for exchange of social security information 

and faster access to more benefi ts for more people.

Inclusivity
The year 2010 was the European Year for Combating Poverty and Social Exclusion. 

Launched in Madrid in January, the initiative aimed to raise awareness of poverty 

in Europe, its causes and potential solutions. It included a series of headline events 

at  EU  level  and  over  1 000  projects  at  national  level. The  European  Parliament 

adopted  a  report ‘on  the  role  of  minimum  income  in  combating  poverty  and 

promoting an inclusive society in Europe’ in June. A European Platform against 

Poverty and Social Exclusion was also launched.

The  Europe  2020  initiative  on  poverty  reduction  (see  Chapter  1)  sets  out  how 

to ensure that the benefi ts of growth and jobs are widely shared so that those 

experiencing poverty can take an active part in society. It will notably build on 

the  lessons  of  the  European Year  for  Combating  Poverty  and  Social  Exclusion. 

In June, employment and social aff airs ministers agreed to set a target of lifting 

at least 20 million out of poverty or exclusion over the next 10 years.

Other achievements on societal issues included an April report on EU funding 

for  the  integration  of  Roma,  and  the  launch  of  the  high-level  Roma  task  force 

in  September  to  improve  how  EU  funds  are  spent  to  help  them.  There  was 

also  dialogue  with  churches,  religious  communities  and  philosophical  non-

confessional organisations.

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Ethics remain at the heart of scientifi c and 
technological progress in the EU.

Ethics
Refl ection was pursued on ethics in science and new technologies in the European 

group of the same name. In March, the group adopted a fi ve-year report on its 

activities, summarising the issues covered by its opinions, the role of ethics in the 

EU policy frame following the adoption of the Lisbon Treaty and the issues that 

deserve further analysis at EU level. Also in March, the EC International Dialogue 

on Bioethics took place, with Member States, representatives of the European 

Parliament,  international  organisations  including  the  Council  of  Europe,  the 

World Health Organisation (WHO) and Unesco, and non-EU countries, including 

Argentina, Australia, Brazil, Canada, China, Egypt, India, Indonesia, Japan, Mexico, 

the Philippines, Russia, South Africa and the United States.

In  parallel,  the  Commission  published  newsletters  on  bioethics  and  reports 

on  the  group’s  meetings  and  activities,  and  set  up  a  web  portal  on  ethics. 

The EC Inter-service Group on Ethics and EU Policies met three times, to discuss 

synthetic biology, biosecurity, biotechnology and ICT.

EDUCATION AND CULTURE
In March, ministers from 46 European countries launched the European higher 

education  area,  under  the  Bologna  process.  It  aims  to  make  European  higher 

education more compatible, comparable, competitive and attractive.

In  April,  the  Court  of  Justice  stated  that  European  Union  law  precludes,  in 

principle, a limitation on enrolment by non-resident students in certain university 

courses in the public health fi eld, except when such a limitation is proved to be 

justifi ed with regard to the protection of public health (37).

The  Commission  proposed  a  European  heritage  label (38)  to  celebrate  and 

symbolise European integration, ideals and history. In September, it published 

a communication on support for the digitalisation of European cinema. It also 

published a report in July on the implementation of the European agenda for 

culture,  and  a  recommendation  on  mobility  for  artists.  The  Council  adopted 

conclusions on European fi lm heritage (39), including the challenges of the digital 

era, covering the transition from analogue to digital and the link between fi lm 

funding policies and fi lm heritage.

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In  November,  the  Commission  assessed  the  new  provisions  on  sport  in  the 

Treaty of Lisbon. The Commission is already promoting social inclusion and other 

objectives  through  sport  with  funding  from  EU  programmes  and  Structural 

Funds.  For  instance,  it  supports  30  European  networks  involving  250  partner 

organisations to promote sport for health, education and training, sport for the 

disabled, gender equality, the fi ght against doping and volunteering. 

In  the  year  of  the  25th  anniversary  of  the  European  Capitals  of  Culture,  Pécs 

(Hungary), Essen for the Ruhr (Germany) and Istanbul (Turkey) were the chosen 

cities  in  2010.  The  Council  designated  Umeå  (Sweden)  and  Riga  (Latvia)  as 

capitals for 2014 and Mons (Belgium) for 2015, alongside a Czech city still to be 

formally designated.

Parliament awarded this year’s LUX Cinema Prize to Die Fremde, by Feo Aladağ of 

Germany, the fi rst woman ever to compete for the prize. The fi lm highlights the 

problem of ‘honour killings’ by depicting the drama of a Turkish family living in 

Germany. The two other shortlisted fi nalists were Akadimia Platonos by Filippos 

Tsitos (Greece and Germany) and Illégal by Olivier Masset-Depasse (Belgium).

An array of EU prizes awarded in the fi eld of culture

These  prizes  include  the  European  Border  Breakers  Awards  (for  contemporary 
music) in January, the European Talent Prize (for fi lm writing) in May, the Prize 
for Cultural Heritage/Europa Nostra Awards in June and the Prize for Literature 
in November, which went to 11 new and emerging authors selected by national 
juries from 11 countries (Belgium, Cyprus, Denmark, Estonia, Finland, Germany, 
Luxembourg,  Romania,  Slovenia,  Spain  and  the  former  Yugoslav  Republic  of 
Macedonia). Europe’s digital library, Europeana, now gives online access to over 
14 million examples of Europe’s cultural heritage — books, maps, photographs, 
paintings, fi lm and music clips — to anyone in the world; launched in 2008 with 
2 million objects, it has greatly exceeded the initial target for 2010 of 10 million 
objects. Three fi lms co-funded by the European Union’s MEDIA programme were 
among those honoured at the closing ceremony of the International Rome Film 
Festival on 5 November.

The opening event of ‘Ruhr 2010’, 
‘Engel über Zollverein’, in Essen, Germany,  
one of the European Union’s Capitals of 
Culture for 2010.  

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The EU’s civil protection mechanism was 
called into action to help protect parts of 
Hungary when toxic red mud leaked from 
an industrial dam. 

Figures released in June showed that almost 200 000 higher education students 

benefi ted from the Erasmus programme of student exchanges in the 2008/09 

academic  year  —  bringing  the  total  benefi ciaries  since  the  scheme  started  in 

1987 to over 2 million.

CIVIL PROTECTION
The  EU’s  civil  protection  mechanism  for  crisis  and  disaster  management  was 

brought into play to cope with fl oods in the spring in Poland, the Czech Republic 

and Germany. In May, Poland requested the activation of the mechanism and, 

in  response,  14  teams  with  high-capacity  pumps  from  other  Member  States 

and  one  EU-fi nanced  pump  run  by  the  three  Baltic  States  helped  lower  water 

levels. In light of a growing incidence of natural disasters, the EU refl ected on 

how  to  reinforce  its  disaster  response  capacity,  and  stepped  up  the  analytical 

and  coordination  capacity  of  its  monitoring  and  information  centre. The  new 

internal security strategy aims to bring the new joint approach to bear on natural 

disasters too — whether earthquakes or forest fi res, fl ooding or severe snowfalls, 

or crises precipitated by terrorist or cyber attacks on critical infrastructure, energy 

shortages, health pandemics, major ICT breakdowns or industrial accidents.

PASSENGERS’ RIGHTS AND TRANSPORT

Moving around easily — and safely — is important for EU citizens, as is being 

able to transport the goods and services that they want.

To  evaluate  whether  further  measures  may  be  necessary,  the  Commission 

reviewed  how  air  carriers  apply  EU  law  and  how  national  authorities  ensure 

the  enforcement  of  air  passenger  rights.  In  December,  a  new  regulation  for 

passenger rights in maritime and inland waterway transport was adopted and 

a  general  agreement  was  reached  on  another  regulation  for  bus  and  coach 

passengers.  This  was  achieved  in  conciliation  between  the  Parliament  and 

Council. An information campaign to raise citizens’ awareness of their rights as 

passengers  in  both  air  and  rail  transport  was  launched  during  the  summer  in 

response to the fi ndings of the Eurobarometer of 2009, which identifi ed room for 

improvement on passenger awareness.

60

 
 
 
 
 
Air
On  air  passenger  rights,  the  Court  of  Justice  confi rmed  that  the  liability  of  air 

carriers for destruction, loss, damage or delay of baggage, which is governed by 

the  Montreal  Convention (40),  is  limited  to  €1 134,  including  both  material  and 

non-material damages (41).

In the air, in addition to action to ease travel in the aftermath of the Icelandic 

volcano  eruption,  safe  and  secure  travel  was  reinforced  through  regular 

updating  of  the  list  of  banned  airlines.  A  June  stakeholder  hearing  was  held 

on  air  passenger  rights.  Major  steps  were  made  towards  a  single  European 

sky, which will cut costs and delays for European passengers, and at the same 

time  help  to  reduce  emissions.  Future  challenges  for  aviation  in  Europe  were 

discussed at the fi rst-ever meeting of the Aviation Platform in October, set up to 

give strategic advice on the basis for a sustainable future for air transport and a 

competitive future for the European aviation industry.

A European action plan to strengthen air cargo security was agreed in December 

following proposals by the Commission, after the discovery of explosive devices 

in air cargo originating in Yemen. The action plan will allow a joint EU approach 

to the emergency security measures put in place by several Member States to 

address the new threat to civil aviation.

FLYING THROUGH THE ASH!

What was done to keep disruption 
to a minimum and help EU citizens 
after the volcano erupted in Iceland? 
The Commission acted quickly to protect 
air passengers following the eruption 
of Eyjafj allajökull. In close coordination 
and constant dialogue with airlines and 
authorities, it assured uniform application 
of EU rules protecting air passenger 
rights. It coordinated changes in air 
traffi  c management procedures, set up a 
permanent European crisis cell and made 
proposals to ease the impact on the air 
transport industry. In particular, it worked 
on speeding up the reform of the single 
European sky, to optimise European 
airspace. It also generated strategies to 
minimise damage for future similar events, 
including a plan for coordinated use of 
transport modes to ensure that people 
and goods can move around.

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EU legislation has given passengers faced 
with delays in its territory strengthened 
rights to food, accommodation and 
compensation when carriers — in the air, 
by bus or by rail — are at fault.

Road
Eff orts  were  stepped  up  on  road  safety  (on  top  of  the  40 %  reduction  in  road 

fatalities  achieved  in  Europe  in  recent  years),  and  on  increasing  road  security 

(with a recommendation on eCall). The Commission adopted ambitious plans to 

halve the number of road deaths in Europe by 2020 starting in 2010. These plans 

build  on  the  results  of  the  road  safety  action  programme  2001–10,  which  has 

been credited with saving 78 000 lives. In December, the Council reached political 

agreement  on  cross-border  exchange  of  information  on  a  number  of  traffi  c 

off ences that jeopardise road safety. This directive aims to enable identifi cation 

of drivers who commit off ences in a Member State other than that where their 

vehicle is registered. Sanctions can therefore be enforced across borders.

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A German Intercity-Express (ICE) 
alongside a Eurostar at St Pancras 
International Station in London, in October. 
Further measures are being taken to turn the 
single European railway area into reality.  

Citizens  also  stand  to  benefi t  —  through  cleaner  air  and  the  opportunity  to 

drive quieter and more fuel-effi  cient vehicles — from EU policies with a strong 

entrepreneurial  character.  The  EU’s  green  cars  initiative  is  fostering  Europe’s 

leadership in clean and energy-effi  cient vehicle technologies, while in April the 

Commission presented a new action plan covering continued vehicle emission 

reductions,  support  for  research  and  innovation  and  for  common  standards 

and safety requirements, and proposals for demand-side incentives. To avoid a 

fragmented market, European standardisation bodies are developing a common 

charging system for electric cars, scooters and bicycles.

Rail
The EU also took further steps towards a single European railway area. This will 

result in better rail services for passengers and freight in the future. Rail freight in 

Europe was given a boost with new rules designed to foster the development of 

a high-quality rail infrastructure management at international level. These rules 

were published in October in the Offi  cial Journal of the European Union, making 

it mandatory to create a European rail network for competitive freight based on 

international freight corridors. This will help to reinforce cooperation between 

infrastructure  managers  and  make  rail  freight  services  more  competitive  and 

attractive.

Further  construction  of  the  trans-European  transport  network  was  promoted 

by  improving  the  information  fl ow  between  Member  States,  the  EU  and 

investors. Nine new strategic corridors for rail freight were designated. In June, 

the Commission took legal action against 13 Member States for failing to fully 

implement the fi rst railway package.

Sea
The Commission adopted new rules to enhance and improve the performance 

of  technical  inspections  of  ships,  including  a  set  of  regulations  ensuring 

transparency  and  public  information  on  the  safety  records  of  shipping 

companies, fl ag states and ship risk profi les (42). The rules will introduce, from the 

beginning  of  2011,  a  new  online  register  that  will ‘name  and  shame’  shipping 

companies  that  are  performing  poorly  on  vital  safety  inspections,  as  well  as 

identifying  those  with  strong  safety  records.  Companies  and  states  which 

show  up  as  poorly  performing  will  be  subject  to  more  intensive,  coordinated 

inspections in EU ports, while customers will be able to choose their shipping 

companies in full knowledge of their safety record.

62

 
 
 
 
 
 
At  the  same  time,  the  European  Maritime  Safety  Agency  continued  the 

development  of  advanced  maritime  information  tools,  like  SafeSeaNet  —  the 

EU maritime traffi  c surveillance system — or Thetis — the EU port state control 

information  database.  These  new  tools  represent  a  decisive  step  forward 

in  maritime  safety  policy,  and  are  at  the  core  of  a  pan-European  system  of 

monitoring, coordination and analysis that will allow for a more eff ective use of 

resources in all EU Member States.

The mandate of the European Maritime Safety Agency was modifi ed in September 

so that it is able to face the challenges inherent in today’s world. A social agenda 

for  maritime  transport  was  prepared  for  2011;  it  comprises  actions  to  strike  a 

fair  balance  between  adequate  employment  conditions  for  seafarers  and  the 

competitiveness  of  the  industry,  and  EU  enforcement  of  related  international 

conventions.

In October, the Council adopted a regulation enhancing rights of ship passengers, 

with  particular  attention  to  passengers  with  disabilities  or  reduced  mobility. 

The  regulation  provides  for  compensation  and  assistance  when  a  journey  is 

cancelled or delayed. It also ensures non-discrimination against and appropriate 

assistance for disabled passengers.

ENDNOTES

(1)  Presidency conclusions of the European Council, 11 December 2009 

(25)  Directive 2001/95/EC on general product safety (OJ L 11, 15.1.2002). 

(http://www.consilium.europa.eu/uedocs/cmsUpload/st00006.en09.pdf ).

(2)  Commission communication — Delivering an area of freedom, security and justice for 
Europe’s citizens — Action plan implementing the Stockholm programme (COM(2010) 
171).

(3)  Resolution of the European Parliament of 23 November 2010.

(4)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1720&format=HTML

Council Directive 87/357/EEC concerning products which, appearing to be other than 
they are, endanger the health or safety of consumers (OJ L 192, 11.7.1987).
Commission Decision 2010/11/EU on the safety requirements to be met by European 
standards for consumer-mounted childproof locking devices for windows and balcony 
doors (OJ L 4, 8.1.2010).
In May, the Commission asked the European Standardisation Committee to develop 
European safety standards for these products. 

&aged=0&language=EN&guiLanguage=en

(26)  Court of Justice ruling of 22.4.2010 in Case C-62/09 Association of the British 

(5)  Court of Justice ruling of 1.7.2010 in Case C-211/10 PPU Povse.

Pharmaceutical Industry.

(6)  https://e-justice.europa.eu 

(7)  Court of Justice ruling of 19.1.2010 in Case C-555/07 Kücükdeveci.

(8)  Court of Justice ruling of 12.10.2010 in Case C-499/08 Ingeniørforeningen i Danmark.

(9)    Commission communication — The social and economic integration of the Roma in 

Europe (COM(2010) 133).

(10)   Commission communication — Towards an EU strategy on the rights of the child 

(COM(2006) 367).

(11)  Article 21(1) TFEU specifi es that this right may be subject to certain limitations and 

conditions. 

(12)  Court of Justice ruling of 2.3.2010 in Case C-135/08 Rottmann. 

(13)  http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2010:195:SOM:EN:HTML

(14)  Council Regulation (EC) No 881/2002 imposing certain specifi c restrictive measures 
directed against certain persons and entities associated with Usama bin Laden, the 
Al-Qaida network and the Taliban (OJ L 139, 29.5.2002).

(15)  Court of Justice ruling of 29.4.2010 in Case C-340/08 M and Others. 

(16)  Court of Justice ruling of 29.6.2010 in Case C-550/09 E and F.

(17)  General Court ruling of 9.9.2010 in Case T-348/07 Al-Aqsa v Council.

(27)  Court of Justice ruling of 1.6.2010 in Joined Cases C-570/07 and C-571/07 Blanco Pérez 

and Chao Gómez.

(28)  Court of Justice ruling of 15.6.2010 in Case C-211/08 Commission v Spain.

(29)  Court of Justice ruling of 14.9.2010 in Case C-550/07 P Akzo Nobel Chemicals and Akcros 

Chemicals v Commission.

(30)  Court of Justice ruling of 29.6.2010 in Case C-441/07 P Alrosa.

(31)  General Court ruling of 9.9.2010 in Case T-155/06 Tomra Systems and Others v 

Commission.

(32)  Court of Justice ruling of 14.10.2010 in Case C-280/08 P Deutsche Telekom v Commission.

(33)  General Court ruling of 1.7.2010 in Case T-321/05 AstraZeneca v Commission.

(34)  General Court rulings of 6.7.2010 in Case T-342/07 Ryanair v Commission and in Case 

T-411/07 Aer Lingus Group v Commission.

(35)  Court of Justice rulings of 1.7.2010 in Case C-194/08 Gassmayr and in Case C-471/08 

Parviainen.

(36)  Economic and Financial Aff airs Council conclusions, 17 November 2010

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/lsa/117761.pdf).

(37)  Court of Justice ruling of 13.4.2010 in Case C-73/08 Bressol and Others.

(38)  Proposal for a decision establishing a European Union action for the European 

(18)  Brussels, 24 November 2010, 16913/10, PRESSE 321.

heritage label (COM( 2010) 76).

(19)  http://ec.europa.eu/anti-traffi  cking

(20)  Court of Justice ruling of 17.6.2010 in Case C-31/09 Bolbol. 

(21)  Regulation (EC) No 717/2007 on roaming on public mobile telephone networks within 

the Community (OJ L 171, 29.6.2007).

(22)  Court of Justice ruling of 8.6.2010 in Case C-58/08 Vodafone and Others.

(23)  Directive 97/7/EC on the protection of consumers in respect of distance contracts 

(OJ L 144, 4.6.1997).

(24)  Court of Justice ruling of 15.4.2010 in Case C-511/08 Heinrich Heine. 

(39)  Education, Youth, Culture and Sport Council conclusions, 18 and 19 November 2010

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/educ/117799.pdf).

(40)  Convention for the Unifi cation of Certain Rules for International Carriage by Air, 

concluded in Montreal on 28 May 1999.

(41)  Court of Justice ruling of 6.5.2010 in Case C-63/09 Walz.

(42)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1115&format=HTML

&aged=0&language=EN&guiLanguage=en
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/401&format=HT
ML&aged=1&language=EN&guiLanguage=en

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CHAPTER 3
ENERGY, CLIMATE 
AND ENVIRONMENT

The European Union played a pioneering role during 

2010 to ensure security of supply of energy for 

Europe, to tackle climate change at global level and 

to protect the environment for future generations. 

EU energy policy aims to create a competitive internal 

energy market offering quality service at low prices. 

The three priorities are developing renewable energy 

sources, reducing dependence on imported fuels, 

and energy efficiency — doing more with a lower 

consumption of energy.

The EU leads the world in tackling climate change. 

At home it has pioneered practical action to cap 

emissions and introduced the first major emissions 

trading system on the planet. In international 

negotiations, it has maintained its targets for 2020 

and beyond to reduce greenhouse gas emissions. 

Furthermore, it has promoted links with other carbon 

trading systems with the ultimate aim of building an 

international carbon trading market. The emissions 

reduction targets that the EU has taken on will drive 

modernisation of the EU economy as well as help 

combat climate change.

Across the spectrum of problems related to waste, 

pollution, air and water quality, as well as in strategic 

issues like biodiversity, the EU has demonstrated its 

determination to make the European economy more 

environmentally friendly.

These efforts are integral to the Europe 2020 

strategy, with its focus on smart, sustainable and 

inclusive growth. It is a strategic objective of the 

strategy to reinforce EU leadership in global moves 

to cut greenhouse gas emissions, through political 

pressure and innovation in low-carbon technologies. 

So too is the full deployment of EU research strengths 

in a shift towards a greener and more socially 

responsive economy. The benefits extend to citizens 

across the Member States, too — such as through 

the development of advanced combustion engines 

that reduce fuel consumption, or farming methods 

that provide high-quality food while preserving 

the countryside.

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Electricity power station. 
Ensuring Europe’s energy supply.

E N E R G Y

Europe  needs  a  secure  supply  of  energy  at  affordable  prices  in 
order  to  maintain  standards  of  living.  EU  policy  aims  to  create  a 
competitive  internal  energy  market  that  offers  quality  service  at 
low  prices.  Specific  goals  include  developing  low-carbon  energy 
sources and reducing dependence on imported fuels. Underpinning 
those  goals  is  the  objective  of  increasing  economic  activity  while 
decreasing consumption of energy.

The  EU  is  acting  to  complete  the  internal  market  for  energy,  to  build  and 

interconnect  energy  grids,  and  to  ensure  energy  security,  including  across 

borders. It is doing for energy what has already been done for other services in 

the single market, from air travel to mobile phones: real choice for consumers in 

one European marketplace. The aim is a genuine energy community in Europe, 

where frontiers are irrelevant for pipelines or power cables, and where there is an 

infrastructure for solar and wind energy. Charging electric car batteries needs to 

be as natural as fi lling up the petrol tank.

In  November  the  Commission  presented  ‘Energy  2020  —  A  strategy  for 

competitive, sustainable and secure energy’ (1), defi ning the EU’s energy policy 

for the next 10 years. The strategy identifi ed actions to save energy, achieve a 

market with competitive prices and security of supply. It envisages investment 

incentives  for  householders  and  local  entities  for  energy-saving  measures. 

It encourages the public sector to take energy effi  ciency into consideration when 

buying works, services or products. And it promotes certifi cation schemes in the 

industrial sector to promote investment in technology which uses less energy.

The strategy sets a target date of 2015 for completing the internal energy market, 

and outlines a new approach to the way the EU plans to fi nance and implement 

energy  infrastructure  investment.  It  is  estimated  that  over  the  next  10  years, 

overall energy infrastructure investments of €1 trillion will be needed in the EU. 

It  also  envisages  a  set  of  initiatives  to  strengthen  research  and  technological 

development  in  energy,  and  to  strengthen  the  EU’s  ability  to  negotiate  with 

international partners. The fi rst European Council of 2011 will be dedicated to 

Europe’s future energy challenge.

66

 
 
 
 
 
 
 
 
Safety  in  energy  provision  also  forced  itself  on  to  the  agenda.  In  the  wake  of 

the Gulf of Mexico disaster, the European Union and individual Member States 

off ered  additional  equipment  to  help  contain  the  oil  spill.  Furthermore,  the 

Commission  published  a  communication  on  safety  of  off shore  oil  and  gas 

activities (2) in order to minimise the risk of a similar disaster occurring. The aim is 

to ensure uniformly high safety standards and clear liabilities in off shore drilling 

operations across the EU, as well as environmental protection and emergency 

preparedness and response. This was the fi rst time comprehensive EU legislation 

on oil and gas off shore installations had been envisaged. The new EU standards 

considered will include common criteria for granting drilling permits, controls of 

the installations, and safety control mechanisms. They not only seek the highest 

safety standards in European waters, but also aim at promoting them in adjacent 

regions and worldwide.

ENERGY INFRASTRUCTURE
Energy infrastructures are the vascular system of a modern economy. The ageing 

system  in  Europe  is  unfi t  to  support  the  transition  to  a  low-carbon  resource-

effi  cient  energy  production  system.  The  lack  of  interconnection  between 

national energy markets makes it diffi  cult to realise a real single energy market 

that ensures fair competition and lower prices. For this reason, modernising the 

energy  infrastructure  system  was  high  on  the  EU’s  agenda  throughout  2010. 

In  November,  the  Commission  adopted  energy  infrastructure  priorities  for  the 

next two decades (3). It identifi ed EU priority corridors for power grids and gas 

pipelines, to serve as a basis for future permit granting and fi nancing decisions 

on  EU  projects.  Infrastructure  is  recognised  as  an  essential  factor  in  achieving 

EU  energy  plans,  in  everything  from  the  completion  of  the  internal  market  to 

competitiveness  and  better  service  to  consumers,  from  energy  solidarity  to 

meeting  climate  and  renewable  energy  targets,  and  from  energy  effi  ciency 

to  security  of  supply,  both  internally  and  externally.  The  Commission  also 

incorporated ideas on how to harmonise investment rules in the EU and attract 

private fi nancing.

Preparations  were  facilitated  by  a  review  in  July  of  the  implementation  of 

trans-European  energy  networks  during  2007–09.  These  were  established  to 

support completion of the internal energy market, to reduce isolation of remote 

regions, to secure and diversify energy supplies, and to contribute to sustainable 

development  and  environmental  protection.  More  generally,  the  Commission 

looked  into  ways  of  improving  regulatory  coordination  and  cooperation 

across borders.

To  improve  transparency  and  enable  adequate  analysis  of  the  EU’s  energy 

system, a new regulation adopted in June sets up the monitoring of investment 

projects in a wide range of production, transmission and storage infrastructure 

for oil (including biofuels), gas, electricity and carbon dioxide.

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G E N E R A L R E P O RT 2010   |   E N E R G Y, C L I M AT E A N D E N V I R O N M E N T

ENERGY EFFICIENC Y
There was new impetus for energy effi  ciency, based on setting national targets 

consistent with the European headline target of a 20 % increase. Energy labelling 

was  extended  from  household  appliances  to  all  energy-related  products (4). 

The  fi rst  delegated  regulations  establishing  requirements  for  the  energy 

labelling of four household energy-related products were adopted (5).

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Modernisation of the Romanian Parliament, 
one of the biggest buildings in the world, 
has included a new lighting system in 
which more than 31 000 lamps received 
energy-effi  cient light bulbs, leading to 
major savings in energy. 

As part of the implementation of the 2009 ecodesign directive, the Commission 

adopted  requirements  for  priority  products  that  have  an  impact  on  energy 

consumption,  such  as  industrial  fans  and  domestic  dishwashing  machines. 

Work continued to create future requirements for more than 20 product groups. 

The EU also agreed new rules in May on the energy performance of buildings (6), 

strengthening  and  extending  the  current  rules  and  reducing  diff erences 

between Member States’ control mechanisms on energy needs for devices such 

as space and hot-water heating, cooling, ventilation and lighting.

ELENA FACILIT Y

Energy effi  ciency was successfully promoted at local level, too. In April the EU’s 

In order to enable committed cities and 
regions to unlock local and regional 
sustainable energy investments, 
the ELENA technical assistance facility, 
launched in 2009, in cooperation with 
the EIB, is likely to mobilise investments 
in excess of €1.3 billion, as a result 
of €17.5 million provided so far in 
technical assistance grants. In Barcelona, 
a contribution of €2 million is mobilising 
investment of €500 million; in Milan, 
€2 million should mobilise €90 million; in 
Purmerend in the Netherlands, an ELENA 
contribution of €1.7 million is leading to 
investment of €98 million. And in Paris, 
€1.3 million should mobilise €180 million.

GreenLight and GreenBuilding awards were presented to towns and buildings 

that  achieve  high  energy  savings.  One  of  the  12  award  winners  in  the  2010 

edition of the GreenLight programme was Dagda Town Council in Latvia, which 

reduced its energy consumption in lighting by 85 % after joining the initiative 

in 2007. In the GreenBuilding category, two of the best refurbishment projects, 

an offi  ce building in Austria and a secondary school in Germany, have achieved 

energy savings of over 80 %. More than 700 participants all over Europe take part 

in these initiatives, saving over 500 GWh each year.

In May 2010, a further 500 cities pledged to reduce their carbon dioxide emissions 

by more than 20 % by 2020. By signing the Covenant of Mayors, they committed 

themselves to save energy, foster renewable energy and raise awareness among 

their  citizens,  through  development  and  implementation  of  their  sustainable 

energy action plans.

68

 
 
 
 
 
 
The  Covenant  of  Mayors  is  a  Commission  initiative,  supported  both  by  the 

European Parliament and the Committee of the Regions. The city of Heidelberg 

for example has reduced its carbon dioxide emissions from public buildings by 

nearly  40 %  through  energy  monitoring  stations  and  the ‘energy  teams’  in  the 

THE TWENTIES PROJECT

city’s  schools. The  city  of  Riga  utilises  the  methane  gas  produced  in  the  city’s 

waste  tip  to  produce  electricity,  and  Antwerp  uses  a  refurbished  industrial 

warehouse as a showcase for sustainable building and a demonstration centre 

for  citizens.  So  far,  over  2 100  cities  in  36  countries  have  joined  the  initiative, 

supported  by  over  100  regions,  provinces  and  networks,  representing  over 

125 million citizens.

RENEWABLE ENERGY SOURCES AND TECHNOLOGIES
The  EU  has  set  out  over  the  past  two  years  a  comprehensive  policy  and  legal 

framework  for  the  development  of  renewable  energy,  as  required  by  the 

renewable energy directive that entered into force in 2009. Member States drew 

up national renewable energy action plans in 2010 which provide a stable policy 

framework for investors for the next decade. These plans confi rmed the potential 

for renewable energy use in the EU and the overall ability of the EU to reach or 

even slightly exceed the 20 % target by 2020.

Renewables are already having an impact in the EU’s energy mix. They accounted 

for 62 % of the new electricity generation capacity installed in the EU in 2009 (7) 

— up from 57 % in 2008. For the second year running, wind energy accounted 

for the largest share of the new capacity: 10.2 GWh out of the 27.5 GWh built, 

representing 38 % of output. In absolute terms, renewables produced 19.9 % of 

Europe’s electricity consumption in 2009.

The €60 million Twenties renewable 
energy research project is the largest 
ever funded by the EU, with a European 
Commission contribution of €32 million. 
Some 26 companies and institutions 
across 11 Member States are working to 
integrate wind energy into the electricity 
grid. Over the course of three years it 
will explore ways of removing barriers 
to bringing wind energy — generated 
both onshore and off shore — into the 
electricity system.

EFFORT SHARING TO REDUCE EMISSIONS

Targets agreed between all EU countries 
to reduce their greenhouse gas emissions, 
in order for the EU to obtain a total 
reduction of 10 %. This is for the sectors 
not covered by the EU Emissions Trading 
System (EU ETS). Less wealthy countries 
can reduce less than the richest one, 
but they still have a binding limit and 
must make a reduction eff ort.

In  the  fi eld  of  renewable  energy  research,  four  European  industrial  initiatives 

2020 EMISSIONS COMPARED WITH 2005 %.

were 

launched  under  the  strategic  energy  technology  plan  (SET-Plan). 

These  fi rst  initiatives  cover  wind  energy,  solar  energy,  electricity  grids  and 

carbon  capture  and  storage.  The  public  and  private  sector  are  engaged  in 

accelerating the development of low-carbon technologies and have agreed to 

support  technology  roadmaps  for  2010–20,  including  action  plans  to  develop 

the technologies and improve their competitiveness.

In 2010, operations started under the European energy programme for recovery, 

launched in 2009 as a response to the economic and fi nancial crisis in Europe. 

This  stimulates  diversifi cation  of  energy  supply,  the  operation  of  the  internal 

energy market and the reduction of greenhouse gas emissions. It provides loans, 

guarantees  and  equity  to  projects  in  energy  effi  ciency  and  renewable  energy 

sources conducted by local governments, provinces, municipalities and private 

entities acting on behalf of public entities. As soon as the break-even point is 

achieved on each project, the loan is repaid into the fund.

EU-27
Bulgaria
Romania 
Latvia
Lithuania
Poland
Slovakia
Estonia
Hungary
Czech Republic
Malta
Slovenia
Portugal
Greece
Cyprus
Spain
Italy
France
Germany
Belgium
United Kingdom
Finland
Austria
Netherlands
Sweden
Luxembourg
Ireland
Denmark

 –20  –15  –10  –5 

0 

5 

10 

15 

20

Source: European Commission.

69

G E N E R A L R E P O RT 2010   |   E N E R G Y, C L I M AT E A N D E N V I R O N M E N T

Total fi nance of €3 980 million supports three sub-programmes: €2 365 million to 

gas and electricity infrastructure projects; €565 million to off shore wind electricity 

projects; and €1 050 million to carbon capture and storage projects. Benefi ciaries 

had received €900 million by the end of the year. As project developers start to 

purchase building materials and construction works, the programme is already 

accelerating  infrastructure  investments,  and  attracting  co-fi nancers  to  make 

investment commitments. Unspent funds at the end of the year will be devoted 

to  energy  effi  ciency  projects.  In  October,  the  Parliament  and  Council  reached 

an agreement to reallocate €146 million of funds left uncommitted under the 

programme  to  an  innovative  fi nancial  instrument  for  energy  effi  ciency  and 

renewable energy initiatives.

ENERGY RECOVERY PROGRAMME 

The  European  Commission  continued  developing  its  support  mechanisms  for 

The EU funded 44 projects in the gas 
and electricity sectors with more than 
€2 billion during the year, and off shore 
wind projects of around €565 million.

the  commercial  demonstration  of  carbon  capture  and  storage  (CCS)  to  verify 

the effi  cacy of this potentially vital climate change mitigation tool. CCS has the 

potential to contribute both to the EU’s climate goals and to its security of energy 
supply. It is the only technology available for signifi cantly cutting CO2 emissions 
from fossil-fuelled power stations and large stationary industrial applications. In 
the EU the CO2 emissions avoided through CCS in 2030 could account for some 
15 %  of  the  reductions  required.  In  addition,  CCS  could  signifi cantly  reduce 

climate change mitigation costs. A decision laying down criteria and measures 

for  the  fi nancing  of  large-scale  CCS  projects,  as  well  as  innovative  renewable 

energy  technologies,  under  the  emissions  trading  system  was  adopted  in 

2010  and  followed  up  with  a  call  for  proposals (8).  At  least  eight  major  CCS 

demonstration projects could be fi nanced by this scheme, with the fi rst projects 

awarded funding in 2012. The CCS project network, a tool for supporting early 

large-scale demonstration of CCS technologies, was launched. This is the world’s 

fi rst network to foster knowledge sharing and raise public understanding of the 
role of CCS in cutting CO2 emissions.

EMISSIONS ARE TRADED MORE 
Volume in greenhouse gas emissions traded under the EU’s Emission Trading System

Million tonnes of CO2 

600

500

400

300

200

100

0
Jan 05

Jan 06

Jan 07

Jan 08

Jan 09

Jan 10

Jan 11

Source: European Commission.

70

 
NUCLEAR ENERGY
Nuclear  energy  is  increasingly  perceived  as  an  important  part  of  a  balanced 

energy  mix  as  it  substantially  contributes  to  low-carbon  energy  generation  in 

the EU and to achieving EU energy policy objectives for 2020 and 2050. The EU 

cannot prescribe the choice of the national energy mix, but it does have the task 

of supporting at European level research and safety. Member States have a total 

of 143 nuclear power plants, and more are taking steps to launch, relaunch or 

further develop nuclear energy. Nuclear safety attracts public attention, and a 

solid legal framework and a deeply rooted nuclear safety culture are becoming 

even more important. Consequently, in November the Commission proposed (9) 

safety  standards  for  fi nal  disposal  of  fuel  and  radioactive  waste  from  nuclear 

power  plants.  Member  States  are  asked  to  present  national  programmes, 

indicating  when,  where  and  how  they  will  construct  and  manage  fi nal 

repositories aimed at guaranteeing the highest safety standards. The directive 

makes internationally agreed safety standards legally binding and enforceable 

in the European Union.

INTERNATIONAL RELATIONS AND SECURIT Y OF ENERGY SUPPLY
A  new  regulation  on  the  security  of  gas  supply (10)  in  the  EU  reduced  the  EU’s 

vulnerability  to  future  disruptions.  Member  States  now  have  to  comply  with 

infrastructure  and  supply  standards,  and  to  establish  preventive  action  plans 

and  emergency  plans. The  proposal  was  prompted  by  the  2008  and  2009  gas 

crises, when supplies of Russian gas through Ukraine to the EU were disrupted 

by disputes between Moscow and Kiev. In September the European Parliament 

approved the new regulation on the security of gas supply, a major step forward 

towards a real European common energy policy that will also reduce vulnerability 

to future gas supply disruptions in crisis situations.

With both energy consumption and dependency on oil and gas imports growing 

and  supplies  becoming  scarcer,  the  risk  of  supply  failure  is  rising.  Securing 

European energy supplies is therefore high on the EU’s agenda. In addition to 

promoting energy effi  ciency to get the most out of supplies, the EU promotes 

a broad mix of energy sources, as well as diversity in suppliers, transport routes 

and transport mechanisms. Safeguard mechanisms increasingly secure energy 

supply for European citizens and industries. And reliable partnerships are built 

WHAT T YPE OF FUELS
DO WE USE IN THE EU? 
Share of fuels used to make energy in 
the 27 EU countries, 2008

Renewables
8.40 %

Nuclear
13.50 %

Solid fuels
17.10 %

Gas
24.50 %

Source: European Commission.

Oil
36.50 %

with  supplier,  transit  and  consumer  countries,  reducing  the  risks  of  Europe’s 

energy dependency. Member States must keep emergency stocks of gas and oil 

and ensure investments in electricity networks, while a coordination mechanism 

WHERE DOES THE GAS COME FROM? 
Sources of the natural gas used in the 
27 EU countries, 2007

now helps Member States react uniformly and immediately in an emergency.

Security  of  energy  supplies  was  pursued  through  domestic  legislation  and  by 

developing new cooperation and supply routes through international dialogue. 

The  10th  anniversary  of  the  EU–Russia  Energy  Dialogue (11)  provided  an 

opportunity to enhance and update cooperation with the EU’s most important 

energy supplier. The EU–Russia early warning mechanism agreed in November 

2009  was  successfully  used  for  the  fi rst  time  during  the  June  gas  transit  crisis 

with Belarus.

Libya
1.90 %

Nigeria
2.60 %

Algeria
9.70 %

Norway
18.90 %

Qatar
1.50 %

Egypt
1.10 %

Trininad and Tobago
1.10 %

Other 
0.40 %

EU
production
38.00 %

Source: European Commission.

Russia
24.70 %

71

G E N E R A L R E P O RT 2010   |   E N E R G Y, C L I M AT E A N D E N V I R O N M E N T

The  seventh  ministerial-level  meeting  of  the  Energy  Dialogue  between  the 

EU  and  the  Organisation  of  the  Petroleum  Exporting  Countries (12)  underlined 

the  role  that  the  dialogue  has  been  playing  in  facilitating  constructive 

exchanges  between  the  parties  to  help  restore  stability  to  the  markets,  in 

the  interests  of  producers  and  consumers  alike.  In  the  framework  of  the 

Cooperation  Agreement  of  the  EU  with  the  Gulf  Cooperation  Council,  energy 

has  a  preponderant  role  in  particular  on  natural  gas  trade  between  the  two 

regions,  energy  effi  ciency,  renewable  energy  sources  and  carbon  capture  and 

storage  policies  and  technologies. The  EU  also  pursued  negotiations  with  the 

countries  of  the  Maghreb  on  integration  of  energy  markets  —  with  a  view  to 

subsequent links with the EU. Eff orts to diversify sources of supply also included 

signature of a memorandum of understanding on energy cooperation with Iraq, 

implementation of cooperation with existing suppliers and transit countries such 

as OPEC or countries in the central Asia/Black Sea area, and work in support of 

priority infrastructure projects such as the Southern Corridor. The EU supported 

further market integration with willing countries in the framework of the Energy 

Community Treaty, of which Moldova became a full member; Ukraine was in the 

process  of  ratifying  its  accession  protocol;  and Turkey  continued  negotiations 

on its accession.

The  Commission  paid  particular  attention 

to  supporting 

low-carbon 

development 

in  bilateral  relations  and  through  multilateral  channels. 

With  China,  for  example,  relations 

intensifi ed  signifi cantly,  focusing  on 

supporting China’s low-carbon activities, as well as on promoting a level playing 

fi eld for energy cooperation and transparent and stable market conditions in the 

Chinese energy sector.

Low-carbon technology is also one of the main topics addressed by the recently 

established EU–US Energy Council. Energy is an important component of EU–US 

dialogue,  because  it  impacts  foreign,  economic  and  development  policies. 

By  working  together  on  energy,  mutual  security  and  prosperity  are  increased, 

stable,  reliable  and  transparent  global  energy  markets  are  underpinned, 

and  regulatory  regimes  and  research  programmes  are  coordinated  to  speed 

the  deployment  of  tomorrow’s  clean  and  effi  cient  energy  technologies. 

The  cooperation  supports  economic  growth  and  job  creation,  and  advances 

climate change goals.

AN EFFICIENT MARKET
The  EU  also  acted  to  ensure  that  the  energy  market  functioned  effi  ciently. 

EU rules aim at increasing the capacity and transparency of gas and electricity 

markets. A properly functioning, well regulated, transparent and interconnected 

market with market price signals is crucial for ensuring competition and security 

of supply. An effi  cient and fully functional EU single market in energy will give 

consumers a choice between diff erent companies supplying gas and electricity 

at  reasonable  prices,  and  it  will  make  the  market  accessible  for  all  suppliers, 

especially the smallest and those investing in renewable energies. It could also 

help the EU to recover from the economic crisis.

72

In  July  the  Commission  requested  that  Poland  refrain  from  violating  EU  rules 

on  the  internal  gas  market.  Infringements  included  obliging  gas  importers  to 

store a certain percentage of gas in Poland, and the lack of access to the Yamal 

pipeline. The arrangements were adapted in line with EU law, and in November 

the  Commission  approved  the  new  approach.  In  June  the  Commission  sent 

35  separate  requests  to  20  Member  States  to  implement  and  apply  in  full 

various aspects of EU legislation to create a single market for gas and electricity. 

In  May  commitments  made  by  E.On,  in  response  to  Commission  pressure, 

helped open up the German energy market.

Making  markets  function  effi  ciently  means  taking  account  of  consumer 

interests,  and  in  December  the  Council  adopted  conclusions  on  an  ‘Energy 

policy  for  consumers’ (13),  dealing  with  aspects  related  to  consumer  rights  and 

the protection of vulnerable customers, and taking into account contributions 

from the informal meeting of energy ministers held in September.

The  year  2010  was  one  of  preparation  for  the  establishment  of  a  European 

Agency  for  Cooperation  of  Energy  Regulators  —  a  strong  agency  capable  of 

facing  the  multiple  challenges  of  regulating  the  European  energy  market. 

It held its constituent meetings in the fi rst half of 2010, and selected Ljubljana 

as its seat.

C L I M AT E  AC T I O N

The  EU’s  commitments  to  climate  action  —  already  adopted  well 
in  advance  of  the  UN  Climate  Change  Conference  in  Copenhagen 
at  the  end  of  2009  —  were  implemented  throughout  2010,  in  the 
framework of its climate and energy package. The EU is championing 
the global efforts to implement ambitious, legally binding climate 
action — and is ready to move further.

In  January  the  EU  formally  associated  itself  with  the  Copenhagen  Accord  that 

was negotiated at the end of the UN Climate Change Conference in December 

2009. As agreed under the accord, Europe also formally notifi ed its greenhouse 

gas emissions reduction targets for 2020 — a unilateral cut of 20 % below 1990 

levels and an off er to scale this up to 30 % if other major economies commit to 

undertake their fair share of a global eff ort.

In  line  with  its  commitments,  the  EU  made  further  progress  towards  meeting 

CLIMATE ACTION TARGETS

its  Kyoto  Protocol  emission  targets  for  2012. The  European  Union  is  ahead  of 

schedule in its promise to cut emissions. The Commission’s assessment is that 

both the EU-15, the group of ‘older’ Member States, and the 10 ‘new’ Member 

States  which  have  reduction  targets  under  the  Kyoto  Protocol  will  meet  their 

commitments.

The EU’s 20-20-20 targets for the year 
2020, proposed in 2007 and agreed in 
2008, signify a 20 % cut in greenhouse 
gas emissions from 1990 levels, a 20 % 
share for renewable energy and a 20 % 
reduction in energy use against projected 
levels through a major improvement in 
energy effi  ciency. 

73

G E N E R A L R E P O RT 2010   |   E N E R G Y, C L I M AT E A N D E N V I R O N M E N T

The  cornerstone  of  EU  climate  policy,  the  emissions  trading  system  (ETS), 

continued to evolve as preparations were made for the revised scheme that will 

take eff ect from 2013. New technical rules were decided, including the cap on 

emission allowances for 2013 (14) and rules for the auctioning of allowances (15), 

which  will  become  the  main  method  of  allocation  from  2013.  In  addition,  the 

Commission  submitted  proposals  for  performance  benchmarks  for  allocating 

free  allowances  to  specifi c  industry  sectors (16);  and  for  a  ban  on  the  use  of 

international  credits  from  certain  industrial  gas  projects  post-2012 (17),  which 

are  a  number  of  concerns.  Meanwhile,  emissions  from  the  roughly  11 000 

installations currently covered by the ETS have been falling: fi gures relating to 

2009 (18)  showed  an  11.6 %  drop  from  a  year  earlier (19).  And,  in  an  important 

ruling, the General Court dismissed an action brought by a company challenging 

the validity of the emissions trading directive (20), which was adopted in order 
to  promote  reductions  of  greenhouse  gas  emissions,  in  particular  CO2,  based 
on the Union’s obligations under the United Nations Framework Convention on 

Climate Change and the Kyoto Protocol (21).

The  EU  also  continued  preparations  for  aviation’s  entry  into  the  scheme (22); 

from 1 January 2012 emissions from aircraft that fl y in and out of airports in the 

EU  will  be  included. The  Commission  also  approved  a  tool (23)  to  estimate  fuel 

consumption by small aircraft operators, allowing operators with few fl ights or 

low  emissions  to  use  simplifi ed  monitoring  procedures.  At  international  level, 

the EU was instrumental in securing recognition that actions can be taken now 

to  reduce  aviation’s  greenhouse  gas  impacts,  and  international  agreement 

was reached that global greenhouse gas emissions from the sector should be 

reduced from 2020.

Moves  were  also  made  to  impose  limits  on  CO2  emissions  from  vans. 
The  European  Parliament,  Council  and  Commission  reached  an  informal 

agreement  on  legislation  in  December  which  was  rapidly  endorsed  by  EU 

environment  ministers.  A  discussion  was  launched  on  possible  further  moves 

to reduce EU emissions. The Commission presented an analysis (25) of the costs, 

benefi ts  and  options  for  moving  beyond  a  20 %  reduction  by  2020  once  the 

conditions are met. The assessment found that the recession has considerably 

reduced the cost of meeting the 20 % target but that it also means the carbon 

price is likely to stay low for years to come, reducing the stimulus for low-carbon 

innovation. The extra ‘cost’ is an investment that will pay dividends — in terms 

of  strengthening  Europe’s  innovation  and  competitiveness,  safeguarding  jobs, 

reducing  the  energy  import  bill  and  boosting  energy  security,  and  cutting  air 

pollution and its cost. The October Environment Council asked the Commission 

to elaborate further on the options.

The  refl ections  on  future  emission  reductions  extend  way  beyond  2020. 

The  EU’s  long-term  target  is  to  reduce  its  emissions  by  80–95 %  below  1990 

levels  by  2050.  In  this  context  a  public  consultation  was  held  to  help  prepare 

a  roadmap,  to  be  issued  in  early  2011  as  part  of  the  Europe  2020  resource 

effi  ciency  fl agship  initiative,  for  completing  the  transition  to  a  low-carbon 

economy by 2050. A separate public consultation examined whether emissions 

and  removals  from  the  atmosphere  of  carbon  dioxide  and  other  greenhouse 

gases related to land use, land-use change and forestry should be covered by 

the EU’s reduction target. 

74

NER300: FUNDING INNOVATIVE LOW
CARBON TECHNOLOGIES 

The ETS will benefi t from a new 
EU fi nancing instrument known as 
NER300 (24), the programme will provide 
substantial fi nancial support for at least 
eight projects using carbon capture 
and storage technologies and at least 
34 projects involving renewable energy 
technologies. The funding will come from 
the sale of 300 million EU ETS allowances 
(rights to emit 1 tonne of carbon 
dioxide) which at current prices could 
raise approximately €4.5 billion. NER300 
aim is to drive low-carbon economic 
development in Europe, creating new 
‘green’ jobs and contributing to the 
achievement of the EU’s climate change 
goals. The European Investment Bank is 
collaborating with the Commission in 
implementation of the programme.

FROM COPENHAGEN TO CANCÚN
International  negotiations  aimed  at  establishing  a  global  climate  agreement 

INTERNATIONAL PROGRESS 
SINCE COPENHAGEN 

under UN auspices continued during 2010. For the EU the priority in the early part 

of the year was to reinvigorate the negotiations after the disappointing outcome 

of the Copenhagen conference in December 2009. The Copenhagen Accord did, 

however, endorse the objective of keeping the increase in global temperatures 

below 2 °C above the pre-industrial level. The EU remains convinced that the only 

eff ective way to secure this objective is through a comprehensive legally binding 

global  agreement,  and  during  the  year  it  helped  build  pressure  accordingly. 

A Commission communication (26) in March proposed: swift EU implementation 

of  the  Copenhagen  Accord,  in  particular  the  ‘fast-start’  fi nancial  assistance 

pledged  to  developing  countries;  taking  a  stepwise  approach  to  reaching  a 

global  agreement;  demonstrating  EU  leadership  by  taking  tangible  action  to 

become the most climate friendly region of the world as part of the Europe 2020 

strategy;  and  stepping  up  EU  outreach  to  partners  around  the  world  to  build 

confi dence that a global deal under UN auspices remains possible.

The  EU  worked  throughout  the  year  to  make  the  Cancún  Climate  Change 

Conference in November and December 2010 a further milestone on the road 

towards a legally binding international agreement. Negotiators met in Bonn in 

August, but with fewer results than had been hoped for. The fi nal preparatory 

session for Cancún, in Tianjin, China, in early October, reached a broad consensus 

that Cancún should deliver a balanced package of decisions.

Industrialised and developing countries 
accepted for the fi rst time that they share 
a joint responsibility for keeping global 
warming below 2 °C. Since December 
2009 almost 140 countries, responsible 
for more than 80 % of global emissions, 
have associated themselves with the 
Copenhagen Accord, while over 75 have 
outlined targets or actions to limit or 
reduce their emissions. The Copenhagen 
Accord commits the industrialised world 
to provide substantial fi nancial assistance 
for developing countries to combat 
climate change: nearly US$30 billion in 
so-called ‘fast-start’ fi nance for 2010–12; 
and US$ 100 billion a year by 2020. 
The EU and its Member States started to 
implement their commitment to provide 
€7.2 billion over 2010–12.

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The EU worked throughout the year to 
make the UN Climate Change Conference 
in Cancún in November and December 
a further milestone on the road towards 
an international legal agreement. 

The October Environment Council (27) and European Council (28) set out the EU’s 

position for Cancún. Among other things, the Environment Council confi rmed 

the  EU’s  stepwise  approach,  set  out  the  EU  position  on  a  global  scheme  for 

reducing  emissions  from  tropical  deforestation  and  on  fast-start  and  long-

term fi nancing for developing countries. It also addressed EU expectations for 

strengthening the transparency of country actions on emissions and fi nance for 

improving carbon markets. The European Council underlined the importance of 

delivering  a  signifi cant  intermediate  step,  building  on  the  Kyoto  Protocol  and 

paving the way towards a global and comprehensive legally binding framework. 

It also confi rmed the EU’s willingness to consider a second commitment period 

under the Kyoto Protocol provided Europe’s conditions were met. 

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PROTECTING THE FORESTS

The Paris–Oslo process on reducing 
emissions from deforestation and forest 
degradation in developing countries was 
formally launched at the end of May.

The December Economic and Financial Aff airs Council (29) endorsed a report on 

the EU’s progress in mobilising the €7.2 billion of fast-start funding it has pledged 

over 2010–12. This report was presented in Cancún, and the EU is committed to 

continuing to report transparently on implementation of its fast-start fi nancing 

pledge on an annual basis.

THE CANCÚN OUTCOME
The  EU  delegation  went  to  Cancún  to  obtain  a  substantial  package  of  action-

oriented decisions and keep the international climate change negotiations on 

track. The conference held from 29 November to 10 December achieved these 

goals by producing the Cancún agreements. The EU welcomed the agreements 

as  an  important  step  towards  a  global  framework  for  climate  action.  Europe 

succeeded  in  speaking  with  one  voice  and  helped  to  deliver  the  successful 

outcome. The Commission acted in close contact with the Council and with the 

support of the European Parliament.

The EU supports action both in Europe and 
worldwide, in a bid to halt biodiversity loss 
and devastation like this burnt-out sector of 
the Jamanxim National Forest at an illegal 
settlement in northern Brazil.

The Cancún agreements build on the decisions taken in Copenhagen and 
set out processes for further progress. Key elements include:

(cid:23)acknowledgement for the fi rst time in a UN document that global warming 
must be kept below 2 °C compared to the pre-industrial temperature, and 
establishment of a process to defi ne a date for global emissions to peak 
and a global emissions reduction goal for 2050;

(cid:23)anchoring the emission pledges of developed and developing countries 
in the UN process, and helping clarify them; the text also recognises that 
overall mitigation eff orts need to be scaled up in order to stay within the 
2 °C ceiling;

(cid:23)agreement to launch a process to strengthen the transparency of actions 
to  reduce  or  limit  emissions  through  better  monitoring,  reporting  and 
verifi cation so that overall progress can be tracked more eff ectively;

(cid:23)confi rmation  of  the  goal  that  developed  countries  will  mobilise 
US$100  billion  in  climate  funding  for  developing  countries  annually  by 
2020, and establishment of a Green Climate Fund through which much of 
the funding will be channelled;

(cid:23)agreement on the Cancún adaptation framework, to enhance action on 

adaptation to climate change;

(cid:23)launch of a ‘REDD+’ mechanism enabling action to reduce emissions from 

deforestation and forest degradation in developing countries;

(cid:23)establishment  of  a  technology  mechanism  to  enhance  cooperation  in 

technology development and transfer. 

76

 
 
 
 
 
 
E N V I R O N M E N T

The  20th  century  provided  phenomenal  growth  for  Europe: 
a fourfold growth in population accompanied by a 40-fold growth 
in  economic  output.  But  it  was  highly  resource-intensive:  use  of 
fossil fuels increased 16 times, fishing catches 35 times, water use 
9 times and carbon emissions 17 times.

BIODIVERSIT Y
The EU Heads of State or Government adopted a new 2050 vision for biodiversity, 

along with a headline target that includes halting biodiversity loss by 2020 and 

maximising  the  restoration  of  biodiversity (30). The  EU  has  committed  itself  to 

protecting, valuing and restoring biodiversity and its ecosystem services, since 

they  are  essential  to  human  well-being  and  economic  prosperity.  The  aim 

is  to  integrate  biodiversity  concerns  into  all  relevant  policy  areas  —  notably 

agriculture, fi sheries, development and research, so that these sectors proactively 

contribute  to  the  achievement  of  biodiversity  objectives.  The  commitment 

has  already  produced  action.  New  EU  tools  were  unveiled  in  June  to  step 

up  the  fi ght  against  biodiversity  loss,  including  a  web  portal (31)  centralising 

information about European biodiversity, and a ‘biodiversity baseline’ that off ers 

a  comprehensive  overview  of  the  current  state  of  biodiversity,  to  help  policy-

makers monitor progress in halting biodiversity loss. In October the Commission 

adopted  a  communication  on  integrating  biodiversity  and  nature  protection 

into  port  development,  accompanied  by  environmental  guidelines  for  ports. 

The  communication  in  November  on  the  future  of  the  common  agricultural 

policy (32)  also  looked  towards  ‘greening’  farm  policy,  and  sustainability  was 

one of the principal focuses of the preparations for the upcoming reform of the 

common fi sheries policy (33).

GREEN WEEK 2010

In June, more than 3 000 participants 
from institutions, business and industry, 
non-governmental organisations, public 
authorities, the scientifi c community and 
academia attended the EU’s Green Week 
2010 in Brussels, Europe’s largest annual 
conference on the environment. The year’s 
theme, ‘Biodiversity our lifeline’, refl ected 
the International Year of Biodiversity and 
concentrated on the variety of species and 
ecosystems that make up the web of life 
on the planet, and on the indispensable 
services provided by nature, including 
climate regulation. It showcased that 
investment in nature is a part of the 
solution, contributing to job provision and 
business opportunities.

Also, 2010 was the UN International Year of Biodiversity, and the EU welcomed 

COMBATING BIODIVERSIT Y LOSS

the agreement it had promoted, at the 10th meeting of the Conference of the 

Parties  to  the  Convention  on  Biological  Diversity,  in  Nagoya  in  October,  on  a 

global  strategy  to  combat  biodiversity  loss,  the  mobilisation  of  the  necessary 

resources to implement it, and the creation of a protocol on access to and benefi t 

sharing of genetic resources.

Attention  to  biodiversity  also  extends  to  reconciling  its  demands  with  other 

objectives of EU policy. For instance, poorly sited or designed wind farms can 

have  a  negative  impact  on  vulnerable  species  and  habitats.  So  the  European 

Commission published guidelines (34) for wind energy development in protected 

natural areas.

The EU has long been the world’s leading 
fi nancial donor in the battle against 
biodiversity loss. Since 2002 it has 
contributed almost €9 billion. It has the 
largest number of protected areas in the 
world — 26 000 of them, covering 18 % of 
its land area.

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2010 EU ECOLABEL

The winners of the 2010 EU Ecolabel 
Communication Awards, announced in 
October, were Portuguese hotel Jardim 
Atlântico, based in Madeira, Paris-
based Arjowiggins Graphic, a leading 
manufacturer of recycled paper, and 
the Sara Lee Corporation, which has 
its international headquarters in the 
Netherlands. The award recognises 
exceptional promotional activities 
to increase public awareness of 
the EU Ecolabel — the EU’s label 
for environmentally friendly goods 
and services, which encourages the 
production and consumption of green 
products and services. Today, almost 
25 000 products and services carry the 
label’s signature Flower label.

ENVIRONMENTAL SUSTAINABILIT Y
Sustainability  featured  high  on  the  EU  agenda  all  year  as  a  central  element  in 

Europe 2020. It is a consideration that permeates nearly all aspects of life, and EU 

actions have consequently ranged widely.

One  priority  has  been  to  protect  the  environment  from  damage  caused  by 

waste  and  hazardous  materials  or  emissions.  Work  progressed  on  recasts  of 

the  waste  electric  and  electronic  equipment  directive (35)  and  the  directive  to 

restrict  hazardous  substances (36)  —  such  as  lead,  mercury  or  cadmium  —  in 

such  equipment. The  scope  of  the  rules  was  also  widened,  to  eliminate  as  far 

as  possible  the  use  of  hazardous  substances,  and  to  counter  the  fast-growing 

volume  of  this  type  of  waste,  which  has  adverse  environmental  and  health 

consequences if not properly treated and disposed of.

Clearer  rules  and  cleaner  air  are  among  the  aims  of  the  industrial  emissions 

directive,  approved  in  November (37).  Stricter  limits  will  apply  for  air  pollution, 

although  with  some  fl exibility  on  deadlines  for  power  plants  or  special  cases. 

The directive updates and merges seven pieces of existing legislation, including 

directives on large combustion plants and integrated pollution prevention and 

control, and covers around 52 000 industrial and agricultural installations with a 

high pollution potential, from refi neries to pig farms.

Other actions have focused on preserving the natural environment. The illegal 

timber  regulation (38)  controls  imports,  with  the  aim  of  preventing  the  sale 

of  illegal  timber,  or  products  made  with  such  timber,  on  the  EU  market. 

Illegal  logging  causes  serious  environmental  damage  and  undermines  the 

eff orts of those who are trying to manage forests responsibly. At the same time 

the legislation helps in combating climate change.

HYFLEET:CUTE

The agreement on the biofuel and bioliquids sustainability scheme, as part of the 

The fl agship hydrogen bus demonstration 
project HyFLEET:CUTE, supported by 
EU research funding, was successfully 
completed: 2.6 million kilometres 
travelled, 500 tonnes of hydrogen 
produced, 170 000 hours of operation, 
an extremely high level of reliability 
and 8 million passengers transported in 
public service.

2009 renewable energy directive, ensured that fi nancial support and counting 

towards  national  renewable  targets  are  only  possible  for  biofuels  meeting 

sustainability  criteria.  This  scheme  is  the  fi rst  legally  binding  set  of  biofuel 

sustainability  criteria  in  the  world,  and  is  likely  to  be  a  pathfi nder. To  make  it 

fully  eff ective,  certifi cation  schemes  operated  by  industry,  governments  and 

NGOs  are  needed,  and  the  Commission  outlined  a  system (39)  for  recognising 

sustainable biofuels that help deliver substantial reductions in greenhouse gas 

emissions and do not come from forests, wetlands or nature protection areas. 

The Commission also made recommendations on criteria for national schemes 

on  sustainability  of  solid  biomass  and  biogas  used  in  electricity,  heating  and 

cooling, so as to promote an eff ective internal market for biomass.

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EU research funding supported 
the HyFLEET:CUTE project. 

78

 
 
 
 
The  EU  also  updated  the  rules  on  seeds  and  propagating  material,  in  relation 

ENCOURAGING CITIES TO GO GREEN

to the preservation of plant genetic resources and initiated evaluations of the 

Community  regimes  on  plant  variety  rights  and  on  plant  health.  And  in  July 

€250 million was allocated to 210 new projects under the LIFE+ programme (40), 

the  European  fund  for  the  environment;  the  projects  advance  nature 

conservation, environmental policy, and information and communication.

The EU is constantly seeking the best balance between preserving the natural 

environment and ensuring growth and prosperity. For instance, the Commission 

proposed new ways of dealing with the continuing diverse views in Europe on 

controlling the cultivation of genetically modifi ed organisms (41).

Protection  for  inhabitants  of  the  natural  environment  has  also  been  the  focus 

of  EU  attention.  New  rules (42)  require  travellers  who  purchase  seal  products 

outside  Europe  to  present  a  special  declaration  to  the  customs  authorities  on 

their return home, attesting that they come only from Inuit hunting. An animal 

testing  directive (43)  to  reduce  tests  and  provide  better  protection  of  animals 

used  for  research  was  adopted,  updating  the  1986  rules:  it  allows  medical 

experiments  with  animals  only  if  there  are  no  alternatives;  and  all  institutions 

conducting research with animals need to fulfi l strict criteria and allow regular 

outside controls.

In October Vitoria-Gasteiz was named 
as the European Green Capital for 2012, 
and Nantes for 2013. They were chosen 
from the shortlist of fi nalists that also 
featured Barcelona, Malmö, Nuremberg 
and Reykjavík, themselves selected 
from 17 candidate cities. Cities are 
evaluated against environmental criteria 
including the local contribution to the 
fi ght against climate change, transport 
facilities, green urban areas, sustainable 
land use, nature and biodiversity, 
local air quality, noise pollution, waste 
production and management, water 
consumption, wastewater treatment 
and the environmental management of 
the municipality. 

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The European Green Capital 2011 award 
was launched in Hamburg at one of the 
city’s energy-effi  cient buildings. 

SUSTAINABLE USE OF NATURAL RESOURCES AND SEAS
Sustainability  is  also  at  the  heart  of  EU  thinking  as  it  prepares  to  change 

its  fi sheries  policy.  The  recognition  that  a  signifi cant  number  of  stocks  are 

overfi shed  is  driving  reform  that  will  make  the  policy  simpler  and  greener.  It 

will  push  the  fi shing  industry  to  take  more  responsibility  and  become  more 

involved in decision-making and implementation, eliminating overcapacity and 

discards, and putting the fi sh stocks and ecosystem fi rst. To make this a global 

reality,  the  EU  now  includes  sustainable  fi sheries  commitments  in  all  EU  free 

trade agreements.

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High on the risk-list for exhaustion and depredation are natural resources and 

seas.  A  new  Commission  strategy (44)  announced  in  May  aims  to  improve  the 

management  of  biowaste  in  the  EU  and  tap  into  its  signifi cant  environmental 

and  economic  benefi ts.  And  in  September (45)  the  Commission  set  out  criteria 

for  a  ‘good  environmental  status’  for  Europe’s  seas,  to  help  Member  States 

develop  coordinated  marine  strategies  within  each  regional  sea.  Good 

environmental  status  means  that  the  overall  environment  in  marine  waters 

provides ecologically diverse and dynamic oceans and seas which are healthy 

and productive. The defi nition of the criteria is a requirement under the marine 

strategy framework directive, which aims to achieve good environmental status 

in all EU marine waters by 2020. The defi nition focuses on biological diversity, 

fi sh population, eutrophication, contaminants, litter and noise. 

THE THIRD EUROPEAN MARITIME DAY

The  EU’s  integrated  maritime  policy (46)  has  also  promoted  Member  States’ 

More than 1 600 maritime actors came 
from all around Europe to Gijón (Spain) 
for this event, including representatives of 
maritime industries, science communities, 
environmental NGOs, recreational 
users of the sea as well as national and 
regional authorities.

use  of  the  sea  and  coasts  that  respects  the  marine  environment,  and  a  cross-

sectoral  strategy  is  being  constructed  for  sustainable  growth  of  maritime 

sectors and coastal regions. The June European Council gave additional impetus 

to  the  development  of  strategies  at  the  level  of  sea  basins,  and  in  October 

the  Commission  set  out  options  for  a  common  approach  to  maritime  spatial 

planning across the EU, as well as an initiative to develop marine knowledge as 

an adjunct to the Europe 2020 strategy (47) in September. In November, the EU 

launched its fi rst Atlas of the seas (48).

Policy has also been defi ned in the EU maritime transport strategy until 2018 (49), 

to  boost  eff orts  to  improve  the  environmental  record  of  maritime  transport 

through prevention of accidents, reduction of atmospheric emissions, controls 

on ballast water treatment, and ship recycling. The long-term objective is ‘zero-

waste, zero emissions’ for maritime transport.

Fisheries are among the richest natural resources of the seas, and in January a 

new system (50) to better control fi sheries and fi ght against illegal fi shing entered 

into force. This provides the EU and its Member States with new tools to combat 

unscrupulous operators and to protect the livelihoods of honest fi shermen who 

would  otherwise  be  exposed  to  unfair  competition.  Because  off enders  are  no 

longer  allowed  to  avoid  detection  and  punishment,  a  culture  of  compliance 

is  being  promoted  throughout  the  fi sheries  sector.  In  June,  a  regulation  on 

the  conservation  and  sustainable  exploitation  of  fi sheries  resources  in  the 

Mediterranean entered into force.

The  October  Fisheries  Council  reached  a  political  agreement  on  fi shing 

opportunities  for  2011  in  the  Baltic  Sea,  and  the  November  Fisheries  Council 

obtained  a  political  agreement  on  a  regulation  fi xing  for  2011  and  2012  the 

fi shing opportunities for EU vessels for certain deep-sea stocks, and prepared to 

set EU/Norway annual total allowable catches for 2011. The December Fisheries 

Council  reached  agreement  for  fi shing  opportunities  for  2011  in  the  Atlantic, 

North Sea and Black Sea. On the international stage, the EU worked to obtain 

a ban on trade in bluefi n tuna, presenting a fi rm position at the meeting of the 

International Commission for the Conservation of Atlantic Tunas in November.

80

In addition to the pressure it exerted at international level to increase protection 

for  Atlantic  bluefi n  tuna,  the  Commission,  the  Community  Fisheries  Control 

Agency  and  the  Member  States  implemented  a  new  control  and  inspection 

programme and a comprehensive plan to prevent overfi shing. Vessel-by-vessel 

and  day-by-day  monitoring  of  quota  consumption  has  been  conducted,  the 

permitted fi shing season was closed early, and EU fi shing capacity was further 

reduced.

The recognition that land is a fi nite natural resource also prompted EU action on 

sustainability  in  everything  from  agriculture  to  transport  and  energy.  Funding 

from the CAP health check and other monies within the CAP have helped bolster 

Member States’ rural development programmes for addressing the challenges 

facing European farmers, such as taking account of biodiversity. 

The blueprint for a forward-looking common agricultural policy (51), released in 

November, also makes sustainability a central priority — alongside viable food 

production  and  balanced  territorial  development.  It  aims  to  make  European 

agriculture  not  only  economically  competitive,  but  also  environmentally 

competitive. A public debate and a major conference on the future of the CAP 

during  the  year  identifi ed  sustainable  management  of  natural  resources  and 

climate action as one of the three principal objectives. Modifi ed criteria for direct 

payments  should  include  environmental  considerations,  refl ecting  the  public 

goods provided by farmers, it concluded.

Sustainable transport has been advanced by projects ranging from networks to 

advanced research. For example, there is an untapped potential for increasing 

low-carbon  mobility  which  can  be  unlocked  if  €5.5  billion  of  European  funds 

earmarked  for  railways  for  the  years  2007–13  are  fully  used.  Moreover,  the 

adoption at the end of the year of the regulation (52) related to a European rail 

network for competitive freight made it possible to promote improved use of the 

existing rail transport infrastructure, thus improving the effi  ciency and attraction 

of rail freight transport.

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Freight trains stand at a depot in Mannheim, 
Germany.

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Keeping traffi  c moving and keeping 
pollution down are among the goals of the 
Eurovignette, the road charging system 
that links road transport with its impact 
on the environment. 

The  Eurovignette  directive  was  revived (53)  by  adapting  vehicle  tax  rates  and 

road  user  charges  to  infl ation,  and  providing  additional  links  between  road 

transport  and  its  impact  on  the  environment:  Member  State  governments 

reached a political agreement on 15 October to allow the levying of tolls that 

factor in the cost of air and noise pollution and take account of road congestion. 

The  Council  also  adopted  a  directive (54)  laying  down  the  framework  for  the 

deployment  of  intelligent  transport  systems,  which  increase  effi  ciency  and 

reduce environmental impact.

The seventh framework programme for research

As a whole, the seventh framework programme for research (FP7) supported over 
120 projects in 2010 in the fi eld of environment, energy and biotechnologies, 
with  up  to  €450  million.  The  range  is  clearly  illustrated  by  this  selection  of 
projects and initiatives that started in 2010:

Marina  Platform  —  Marine  Renewable 
(EU contribution €8.7 million)

Integrated  Application  Platform 

Silicon Light — Improved material quality and light trapping in thin fi lm silicon 
solar cells (EU contribution €5.8 million)

Eurobioref — European multilevel integrated biorefi nery design for sustainable 
biomass processing (EU contribution €23.1 million)

ICAP — Innovative CO2 capture (EU contribution €4.3 million)

GHG  Europe  —  Greenhouse  gas  management  in  European  land  use  systems 
(estimated EC contribution €6 648 704)

STEP — Status and trends of European pollinators (estimated EU contribution 
€3 499 995).

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ENDNOTES

(1)  Commission communication — Energy 2020 — A strategy for competitive, sustainable 

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/113591.pdf).

and secure energy (COM(2010) 639).

(31)  http://biodiversity.europa.eu/

(2)  Commission communication — Facing the challenge of the safety of off shore oil and 

gas activities (COM(2010) 560).

(3)  Commission communication — Energy infrastructure priorities for 2020 and beyond 

— A blueprint for an integrated European energy network (COM(2010) 677).

(4)  Directive 2010/30/EU on the indication by labelling and standard product information 

of the consumption of energy and other resources by energy-related products 
(OJ L 153, 18.6.2010).

(5)  Delegated Regulations (EU) Nos 1059/2010, 1060/2010, 1061/2010 and 1062/2010 
with regard to energy labelling of household dishwashers, household refrigerating 
appliances, household washing machines and televisions (OJ L 314, 30.11.2010). 

(6)  Directive 2010/31/EU on the energy performance of buildings (OJ L 153, 18.6.2010).

(7)  Renewable energy snapshots 2010 report published by the European Commission’s 

Joint Research Centre on 5 July 2010 (http://re.jrc.ec.europa.eu/refsys/).

(32)  Commission communication — The CAP towards 2020: Meeting the food, natural 

resources and territorial challenges of the future (COM(2010) 672).

(33)  http://ec.europa.eu/fi sheries/reform/index_en.htm: ‘We have also started a broader 
assessment of the impact of the reform, which will be carried out according to 
the Commission’s methodology for impact assessments. We will develop diff erent 
scenarios for the future policy to evaluate the outcomes of diff erent choices. 
We will focus in particular on the environmental, the economic and the social 
aspects in this impact assessment. This analysis will be used in preparation of the 
legal proposals for the reformed policy. According to our planning, the impact 
assessment should be fi nalised in autumn 2010.’ (http://ec.europa.eu/fi sheries/reform/
sec(2010)0428_en.pdf )

(34)  http://ec.europa.eu/environment/nature/natura2000/management/docs/Wind_farms.pdf

(35)  Directive 2002/96/EC on waste electrical and electronic equipment (WEE) (OJ L 37, 

(8)  The so-called New Entrants Reserve, or NER300, consists of 300 million EU emissions 

13.2.2003).

allowances.

(36)  Directive 2002/95/EC on the restriction of the use of certain hazardous substances in 

(9)  Proposal for a directive on the management of spent fuel and radioactive waste 

electrical and electronic equipment (OJ L 37, 13.2.2003).

(COM(2010) 618).

(37)  Council approval, 8 November 2010 (http://www.consilium.europa.eu/uedocs/

(10)  Regulation (EU) No 994/2010 concerning measures to safeguard security of gas supply 

cms_data/docs/pressdata/en/envir/117566.pdf ).

(OJ L 295, 12.11.2010).

(38)  Regulation (EU) No 995/2010 laying down the obligations of operators who place 

(11)  http://ec.europa.eu/energy/international/events/2010_11_22_eu_russia_anniversary_

timber and timber products on the market (OJ L 295, 12.11.2010).

en.htm

(39)  Commission documents — system for certifying sustainable biofuels

(12)  http://ec.europa.eu/energy/international/organisations/opec_en.htm

(http://ec.europa.eu/energy/renewables/biofuels/sustainability_criteria_en.htm).

(13)  An energy policy for consumers: Council conclusions, 29 October 2010 (http://register.

(40)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1002&format=HTML

consilium.europa.eu/pdf/en/10/st15/st15697.en10.pdf ).

&aged=0&language=EN&guiLanguage=en

(14)  Commission Decision 2010/634/EU adjusting the Union-wide quantity of allowances 

(41)  Commission communication on the freedom for Member States to decide on the 

to be issued under the Union scheme for 2013 (OJ L 279, 23.10.2010).

cultivation of genetically modifi ed crops (COM(2010) 380).

(15)  Commission Regulation (EU) No 1031/2010 on the timing, administration and other 
aspects of auctioning of greenhouse gas emission allowances (OJ L 302 18.11.2010).

(16)  http://ec.europa.eu/clima/policies/ets/benchmarking_en.htm

(17)  http://ec.europa.eu/commission_2010-2014/hedegaard/docs/proposal_restrictions_

fi nal.pdf

(42)  Regulation (EC) No 1007/2009 on trade in seal products (OJ L 286, 31.10.2009).

(43)  Directive 2010/63/EU on the protection of animals used for scientifi c purposes 

(OJ L 276, 20.10.2010).

(44)  Commission communication on future steps in biowaste management in the 

European Union (COM(2010) 235).

(18)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/576&language=EN

(45)  Commission Decision 2010/477/EU on criteria and methodological standards on good  

(19)  Commission report — Progress towards achieving the Kyoto objectives (COM(2010) 569).

environmental status of marine waters (OJ L 232, 2.9.2010).

(20)  Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance 

(46)  Proposal for a regulation establishing a programme to support the further 

trading within the Community (OJ L 275, 25.10.2003).

development of an integrated maritime policy (COM(2010) 494).

(21)  General Court ruling of 2.3.2010 in Case T-16/04 Arcelor v Parliament and Council.

(47) 

Ibid.

(22)  Commission Decision 2009/339/EC as regards the inclusion of monitoring and 

reporting guidelines for emissions and tonne-kilometre data from aviation activities 
(OJ L 103, 23.4.2009).

(23)  http://www.eurocontrol.int/environment/public/standard_page/small_emitters.html

(24)  http://ec.europa.eu/clima/funding/ner300/index_en.htm 

(25)  Commission communication — Analysis of options to move beyond 20 % greenhouse 
gas emission reductions and assessing the risk of carbon leakage (COM(2010) 265).

(48)  http://ec.europa.eu/maritimeaff airs/atlas/index_en.htm

(49)  Commission communication — Strategic goals and recommendations for the EU’s 

maritime transport policy until 2018 (COM(2009) 8).

(50)  Commission Regulation (EC) No 1010/2009 laying down detailed rules for the 

implementation of Council Regulation (EC) No 1005/2008 establishing a Community 
system to prevent, deter and eliminate illegal, unreported and unregulated fi shing 
(OJ L 280, 27.10.2009).

(26)  Commission communication — International climate policy post-Copenhagen: Acting 

(51)  Commission communication — The CAP towards 2020: Meeting the food, natural 

now to reinvigorate global action on climate change (COM(2010) 86). 

resources and territorial challenges of the future (COM(2010) 672).

(27)  Environment Council conclusions, 14 October 2010 (http://www.consilium.europa.eu/

(52)  Regulation (EU) No 913/2010 concerning a European rail network for competitive 

uedocs/cms_data/docs/pressdata/en/envir/117096.pdf ).

freight (OJ L 276, 20.10.2010).

(28)  Presidency conclusions of the European Council, 28/29 October 2010 (http://www.

consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/117496.pdf ).

(29)  Economic and Financial Aff airs Council conclusions, 17 November 2010 (http://www.
consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ecofi n/117790.pdf ).

(30)  Presidency conclusions of the European Council, 25/26 March 2010 

(53)  Transport, Telecommunications and Energy Council — Political agreement, 

15 October 2010 (http://register.consilium.europa.eu/pdf/en/10/st15/st15147.en10.pdf).

(54)  Directive 2010/40/EU on the framework for the deployment of intelligent transport 

systems in the fi eld of road transport and for interfaces with other modes of transport 
(OJ L 207, 6.8.2010).

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CHAPTER 4
THE EU IN THE WORLD

The Lisbon Treaty confers a new coherence on the EU’s 

external relations. A new High Representative and Vice-

President of the Commission was given responsibility 

for the foreign policy of the Union. In this role, 

Catherine Ashton chairs the Foreign Affairs Council 

and heads the new diplomatic service. This gives the 

Union the capacity to speak with one voice as well 

as the practical means to project its values better at 

global level: respect for human rights and democracy, 

cooperation to address common challenges and a 

commitment to multilateralism. Added to its strengths 

— as the world’s biggest trader and biggest donor 

of aid, with a dense web of political and cultural 

connections and with a major international currency 

— the EU has improved its potential to become a 

key player on the world stage commensurate with 

its economic weight. Its new capacity for integrated 

engagement was demonstrated throughout the 

year, with its constructive responses to need in 

situations as diverse as Haiti, the occupied Palestinian 

territory or Darfur.

The creation of the European External Action 

Service, with the Union’s delegations throughout the 

world, provides the backbone for new momentum 

to the Union’s external relations. The European 

Council in September instituted the new approach, 

in which EU and national instruments and policies are 

mobilised in support of the Union’s strategic interests. 

Also, a new form of leadership in international 

summits has been established with the President of 

the European Commission and the President of the 

European Council working in tandem.

The EU supports multilateral approaches, maintains 

close links with its strategic partners and strives for 

deeper bilateral relations and regional dialogues 

around the world. The EU projected its Europe 

2020 recovery and growth strategy into the 

global market place, including through the G20. 

It addressed the challenges of energy geopolitics. 

It pursued the international development agenda 

and demonstrated in concrete actions its solidarity 

with the most vulnerable in the world.

P R O M O T I N G  M U LT I L AT E R A L  G O V E R N A N C E

In  pursuing  its  goals  in  a  worldwide  context,  the  EU  supports 
multilateral  institutions  to  protect  the  global  common  good  and 
develop peace and prosperity worldwide. 

In line with its engagement in support of an eff ective multilateral system, the 

EU  has  worked  through  the  United  Nations  to  promote  peace,  development 

and human rights, as well as to tackle new global challenges. The EU welcomed 

the agreement in June on modifi cations to the UN’s structure and composition, 

including the creation of a single entity responsible for gender issues, and the 

review  of  the  work  of  the  Peacebuilding  Commission.  In  other  international 

organisations  such  as  the  International  Monetary  Fund,  the  World  Bank,  the 

World  Trade  Organisation,  the  Organisation  for  Economic  Cooperation  and 

Development,  the  Food  and  Agriculture  Organisation  and  the  United  Nations 

Environment Programme, the EU has worked to promote multilateral approaches.

Accession  negotiations  with  the  European  Convention  on  Human  Rights  and 

Fundamental Freedoms were started by the Commission in July (see Chapter 2), 

and  an  EU  Delegation  to  the  Council  of  Europe  was  set  up  in  Strasbourg  in 

October  —  an  indication  of  deepening  relations.  In  December,  the  EU  played 

an  active  role  in  the  organisation  and  preparation  of  the  fi rst  summit  of  the 

Organisation for Security and Cooperation in Europe in 11 years, in Astana, under 

Kazakh chairmanship.

THE EU AT THE HEART OF THE G20

The  EU  played  an  active  role  in  major  international  forums,  including  the  UN 

The EU is a prominent force in the G20 
leaders’ process, which was launched on 
a European initiative, when President 
Barroso and President Sarkozy visited the 
USA in 2008. It is today the primary forum 
for international economic coordination. 
It grew out of the G8, comprising Canada, 
France, Germany, Italy, Japan, Russia, the 
United Kingdom and the United States 
and at which the EU is also represented. 
The G20 brings together 19 countries plus 
the EU (the G8, plus Argentina, Australia, 
Brazil, China, India, Indonesia, Mexico, 
Saudi Arabia, South Africa, South Korea 
and Turkey).

Human Rights Council and the UN General Assembly in September. The European 

Union was well represented in high-level meetings with world leaders, and with 

key countries and regional groupings. This refl ected its commitment to achieving 

the millennium development goals as well as to using multilateralism to tackle 

the global challenges of development, peace and security, humanitarian crises 

and climate action.

In  support  of  the  UN,  the  EU  implemented  new  UN  Security  Council  sanctions 

in Somalia, Eritrea and Iran. The Commission also continued to represent the EU 

in  the  Kimberley  Process,  the  UN-backed  75-country  intergovernmental  body 

for the prevention of trade in confl ict diamonds. Supporting and indeed going 

beyond the UN resolution aimed at restraining Iran’s nuclear ambitions, the EU 

imposed  further  sanctions  in  July,  covering  trade,  fi nancial  services,  energy, 

transport, visas and asset freezes wherever a connection with Iran’s nuclear and 

ballistic programme exists (1). At the same time — crucially — the EU continued to 

lead eff orts to fi nd a negotiated agreement. The EU’s High Representative acted 

as negotiator on behalf of the so-called E3+3 group of China, France, Germany, 

Russia, the United Kingdom and the United States.

86

A more eff  ective, coherent and visible EU foreign policy 

With the implementation of the Lisbon Treaty, the new High Representative of the Union for Foreign Aff airs and Security 
Policy  brings  together  what  were  previously  three  distinct  jobs:  the  High  Representative  at  the  Council,  the  External 
Relations Commissioner at the Commission and — as did the rotating Presidency of the Council — chairing the meetings 
of EU foreign, development and defence ministers. As a Vice-President of the Commission, the High Representative helps 
to ensure consistency across the spectrum of EU external relations — and especially between political objectives and the 
EU’s distinct spending and assistance programmes.

The new European External Action Service was forged during the year (2), and came into existence formally on 1 December. 
It unites the foreign policy capacities of the Commission with those of the Council and is supplemented with diplomats 
from the Member States, signifi cantly reinforcing the EU’s ability to play its international role. It is developing a highly 
skilled and fully integrated civil service at headquarters, and provides, for the fi rst time, diplomatic representation of the EU 
itself in scores of countries around the world. The incorporation of Member State diplomats, with their experience of their 
own foreign services, brings valuable new synergies. The fi rst senior appointments to the service and to key diplomatic 
posts — including from Member States — were made during the autumn.

S T R E N G T H E N I N G   S T R AT E G I C  A L L I A N C E S

As  the  strategic  partnerships  of  the  21st  century  emerge  and  the 
new  world  politics  take  shape,  Europe  is  seizing  the  chance  to 
contribute  to  shaping  the  globalised  world. The  relationships  the 
EU  builds  with  strategic  partners  are  crucial  in  this  respect. To  be 
effective on the international stage, the EU needs strong alliances. 
To help it achieve its goals it maintains close relations with a number 
of  leading  countries  that  it  considers  strategic.  There  were  major 
developments in many of these relations in 2010.

The United States continues to be the EU’s closest and most important partner. 

The conclusions of the EU–US Summit in Lisbon in November (3) — the fi rst since 

the entry into force of the Treaty of Lisbon — reaffi  rmed the close partnership. 

The  EU  and  the  USA  not  only  share  the  same  values,  interests  and  objectives; 

together, they produce almost half of the world’s GDP. The transatlantic economic 

partnership  worth  more  than  €3 000  billion  is  a  driver  of  global  economic 

prosperity and represents the largest, most integrated and far-sighted economic 

relationship in the world. The EU and the USA together provide approximately 

80 %  of  offi  cial  development  assistance  worldwide.  During  the  year  they 

cooperated eff ectively on foreign policy issues, including the Middle East peace 

process,  Afghanistan  and  Pakistan,  non-proliferation  and  regional  confl icts. 

Regular dialogue on foreign policy takes place between EU High Representative 

Catherine Ashton and US Secretary of State Hillary Clinton. 

AN EFFECTIVE EUUS PARTNERSHIP

The November summit focused on three 
areas of cooperation of vital interest to 
the combined 800 million citizens the two 
sides represent: growth and jobs; climate 
change and international development; 
and strengthening the security of citizens. 
The summit rejected protectionism and 
endorsed the concept of robust and 
transparent greenhouse gas emissions 
reduction commitments by major 
economies. It pledged to strengthen 
cooperation on the millennium 
development goals, and agreed on a more 
comprehensive and strategic approach 
to major international security issues. 
A joint working group on cybersecurity 
and cybercrime was established.

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Regular dialogue on foreign policy takes 
place between EU High Representative 
Catherine Ashton and US Secretary of 
State Hillary Clinton.  

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Russian President Dmitri Medvedev, 
European Council President Herman Van 
Rompuy and European Commission 
President José Manuel Barroso at the 
EU–Russia Summit in Brussels. 

In addition, a further open skies aviation agreement (4) was reached during the 

year, worth up to €12 billion in economic benefi ts and creating 80 000 new jobs, 

and deepening cooperation in aviation security, safety, competition and ease of 

travel. The agreement includes a novel article on the importance of high labour 

standards in the airline industry, and underscores the importance of transatlantic 

cooperation on aviation environmental matters.

With  Russia,  the  dialogue  was  maintained  through  numerous  channels. 

The EU–Russia Summit in Rostov-on-Don in June launched the partnership for 

modernisation (5), aimed at promoting reform, boosting economic progress and 

raising competitiveness. This builds on results achieved so far in the context of 

the four common spaces (economic space, space of freedom, security and justice, 

space  of  external  security,  space  of  research  and  education,  including  cultural 

aspects), and brings a new urgency and result-oriented focus. Negotiations for 

a  successor  to  the  current  partnership  and  cooperation  agreement  continued 

throughout  the  year.  Human  rights  consultations  between  the  EU  and  Russia 

were  held  twice  in  Brussels,  in  April  and  November.  European  Parliament 

President Jerzy Buzek visited Moscow in June, while direct contact between the 

Members of the European Parliament and their Russian counterparts continued 

via the meetings of the EU–Russia Parliamentary Cooperation Committee.

The  entry  into  force  of  the  Lisbon  Treaty  also  opened  a  new  chapter  in  the 

relations  between  the  EU  and  China,  enabling  the  EU  to  demonstrate  a  more 

coherent approach. The joint summit in October was approached by both sides 

in a spirit of reciprocity and mutual benefi t. There was a shared interest to work 

together  in  strengthening  bilateral  relations  through  political  dialogue,  trade 

and investment. Mutual interest also prevailed in addressing global challenges, 

notably the fi nancial and economic crisis and climate change and energy, in the 

run-up to the G20 Summit in Seoul in November and the Climate Change Summit 

in Cancún in December. An EU–China clean energy centre was opened in Beijing.

88

 
 
 
 
The  range  and  intensity  of  EU  relations  with  its  key  partners  can  also  be 

gauged from a sample of the contacts during the year. A summit with Canada 

in  May (6)  rejected  protectionism,  and  took  stock  of  progress  in  negotiating 

an  ambitious  comprehensive  economic  and  trade  agreement  that  will  give  a 

new  impetus  to  trade,  investment,  innovation  and  job  creation. The  EU–India 

Summit in Brussels in December emphasised the fi ght against terrorism (where 

an agreement between Europol and India is being negotiated, including a set 

of concrete measures), crisis management, maritime security, non-proliferation, 

peacebuilding and peacekeeping, as well as economic governance and regional 

issues  within  the  south  Asian  region.  Both  sides  also  committed  to  increased 

cooperation  in  trade,  with  substantial  progress  made  towards  the  signature 

of  a  free  trade  agreement,  and  in  energy  and  climate  change.  The  summit 

recognised the importance of a migration dialogue within the broader context 

of EU–India cooperation.

A summit with Japan in April (7) reaffi  rmed a shared commitment to combating 

climate  change  and  to  preserving  biodiversity,  and  reached  common 

understandings  on  regional  issues  including  North  Korea.  In  May,  the  EU  and 

South  Korea  signed  a  new  framework  agreement  for  bilateral  relations,  an 

expression  of  common  values  and  a  basis  for  strengthened  cooperation 

and  dialogue  across  human  rights,  non-proliferation  of  weapons  of  mass 

destruction, counterterrorism, climate change and security of energy supply (8). 

The  bi-regional  strategic  partnership  with  Latin  America  and  the  Caribbean 

was strengthened at a summit in Madrid in May (9), deepening political dialogue 

and  regional  integration,  promoting  social  cohesion  and  intensifying  bilateral 

relations between individual countries from both regions (see page 95). It notably 

included the conclusion of the fi rst region-to-region association agreement of 

the EU (with Central America), a trade agreement with Colombia and Peru, and 

the  relaunching  of  the  negotiations  in  view  of  an  association  agreement  with 

Mercosur. The Latin American Investment Facility and the EU–LAC Foundation 

were also launched.

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President of the European Council Herman 
Van Rompuy, President of Brazil Luiz Inacio 
Lula da Silva and President of the European 
Commission José Manuel Barroso at the 
EU–Brazil Summit in Brasilia.

An  EU–Brazil  Summit  took  place  in  Brasilia  in  July,  confi rming  the  solidity  of 

the  bilateral  relationship (10).  It  explored  climate  change  and  the  international 

economic and fi nancial crisis, as well as the G20 process. Civil aviation agreements 

were  signed,  and  a  triangular  cooperation  initiative  with  Mozambique  was 

launched in the fi eld of bioenergy. An EU–Mexico Summit in May approved a 

new  step  in  the  strategic  partnership (11),  enhancing  collaboration  at  bilateral 

and multilateral levels, including a focus on sectoral dialogues on security and 

law enforcement.

The  EU’s  international  engagement  led  it  to  conclude  agreements  in  areas  of 

importance  to  citizens  at  home  and  around  the  world,  notably  in  transport 

and  in  science  and  research.  It  reached  aviation  agreements,  leading  to 

more  fl ights  for  passengers,  higher  safety  standards  and  increased  business 

opportunities.  In  addition  to  the  bilateral  open  skies  agreement  with  the  USA 

and  the  safety  agreement  with  Brazil  (see  page  88  and  preceding  paragraph), 

the  EU  and  Vietnam  signed  an  agreement  in  October  which  will  remove 

nationality restrictions in bilateral air services (12). Air safety and protection of the 

environment around the world were given a boost by cooperation at UN level 

through the International Civil Aviation Organisation.

A  transport  and  logistics  partnership  was  implemented  in  the  Northern 

Dimension  area,  and  a  regulatory  framework  developed  for  the  trans-

Mediterranean  transport  network.  The  Commission  helped  to 

improve 

international  rail  standards  and  promote  alignment  with  EU  norms  through 

its  increased  engagement  with  international  rail  organisations  extending  into 

Russia, north Africa and Asia. Progress towards high-quality shipping worldwide 

was  assisted  by  EU  involvement  in  international  maritime  negotiations,  and 

pilot  schemes  for  the  EU’s  short  sea  shipping  strategy  are  strengthening  links 

between  the  EU  and  its  close  trading  partners,  improving  maritime  links  and 

integration  into  door-to-door  logistics  chains.  A  conference  on  international 

shipping policies in Copenhagen in June brought together participants from the 

EU, Asia and North America.

90

 
 
Research  cooperation  extended  across  environmental  research  (such  as  the 

Soiltrec project with China and other countries to counter threats to soils from 

climate  change  and  other  pressures),  health  research  (in  the  International 

Cancer  Genome  Consortium),  engagement  in  the  geopolitical  forecasting 

exercise  ‘Global  Europe  in  2030–50’,  assessing  the  security  of  energy  supply 

and  the  EU–China  Science  and  Technology  Week  in  Shanghai.  In  the  area  of 

food safety, the Commission has also coordinated Member States’ input at the 

Offi  ce  International  des  Epizooties,  within  the  committees  of  the World Trade 

Organisation and — in relation to animal welfare — with the Council of Europe.

P R O M O T I N G  P E AC E,  S E C U R I T Y  A N D H U M A N R I G H T S

Because its own origins and evolution are based on the establishment 
of  peace  and  security,  the  EU  remains  committed  to  promoting 
these  conditions  beyond  its  borders  too.  Economic,  political  and 
social development around the world — and human rights too — 
depend on peace and security.

The EU has continued its engagement in confl ict resolution and state-building 

processes  in  Afghanistan  and  Pakistan,  not  only  for  the  benefi t  of  local 

populations, but for Europeans too. It has worked to stabilise Afghanistan, with 

European  soldiers,  police,  judges  and  other  civilian  personnel  on  the  ground. 

They all contribute to building the institutions that improve the prospects of the 

state to function independently, and to establishing sustainable livelihoods that 

will allow communities to thrive beyond confl ict and the drug trade. In Pakistan, 

which faces multiple challenges, including political, economic and institutional 

ones, the EU has deepened its engagement, as confi rmed by the EU–Pakistan 

Summit  in  June.  And  after  the  August  fl oods,  it  agreed  a  comprehensive 

package (13)  of  humanitarian  and  development  assistance,  civilian  protection 

and  reconstruction  and  economic  recovery  through  EU  trade  instruments, 

in close coordination with other international actors (see page 95).

The  fi ght  against  piracy  off   the  coast  of  Somalia  is  an  example  of  the  EU 

combining its external relations instruments. The EU naval operation Atalanta (14) 

is complemented by eff orts to boost the coastal states’ capacity to try pirates. 

Maritime  surveillance  is  being  strengthened  through  reinforced  partnership 

with regional states (15). Aid to support Somali governance sits alongside funding 

for  African  peacekeepers  in  Somalia,  and  an  EU  mission  is  up  and  running  in 

Uganda for training Somali security forces.

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The EU was well represented at the 2010 
Shanghai World Expo.  It shared its pavilion 
with Belgium, the country that held the six-
month rotating Presidency of the Council in 
the second half of the year.

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An EU commando boarding team on 
an anti-piracy mission off  the coast 
of Somalia arrests suspected pirates. 

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EU SECURIT Y AND DEFENCE ACTIONS AROUND THE WORLD
Missions and operations in 2010 under the European security and defence policy

EUPM
Bosnia and Herzegovina, 
since 2003, 
mission strength: 275

EUFOR Althea
Bosnia and Herzegovina, 
since 2004, 
troop strength: 1 481

EUBAM
Molodova and Ukraine
mission strength: 200

EULEX Kosovo
since 2008, 
mission strength: 2 807

EUPOL COPPS
Palestinian territories, 
since 2006, mission strength: 80

EU SSR Guinea-Bissau
2008–10

EUBAM Rafah
Palestinian territories, since 
2005, mission strength: 21

EUSEC RD Congo
since 2005, 
mission strength: 47

EUPOL RD Congo
since 2007, 
mission strength: 49

Civilian missions
Military operations

EUMM Georgia
since 2008, 
mission strength: 410

EUPOL Afghanistan
police mission since 2007, 
mission strength: 479

EUJUST LEX
Iraq/Brussels, since 2005, 
mission strength: 62

EU NAVFOR Atalanta 
since 2008, 
troop strength: 1 337

EUTM SOMALIA 
since 2010, 
troop strength: 43

Source: Council of the European Union

To  help Yemen  tackle  its  multiple  security,  economic  and  political  challenges, 

the  EU  developed  an  approach  combining  actions  by  the  EU  and  its  Member 

States with key international partners, in counterterrorism, humanitarian relief 

and support for economic and political reforms. The EU also established a full 

delegation there in January.

The  EU  was  actively  involved  in  reducing  tensions  and  fostering  the  peace 

process  in  the  Middle  East.  It  vigorously  supported  the  US-led  eff orts  for 

successful  negotiations  via  multilevel  talks.  It  continued  to  off er  political  and 

fi nancial  support  to  Palestinian  Prime  Minister  Fayyad’s  state  building  plan  of 

August  2009.  It  insisted  that  for  peace  to  be  sustainable,  a  durable  solution  is 

needed for Gaza, that settlements are illegal under international law, and that 

there should be a complete stop to all violence. High Representative Catherine 

Ashton  repeatedly  visited  Gaza  on  her  trips  to  the  Middle  East.  In  Ramallah 

she met Prime Minister Fayyad, who also came to Brussels, where he appeared 

before the European Parliament and met President Barroso as well as speaking 

at the European Development Days in December.

92

Human rights are high on the agenda of all the EU’s external relations contacts. 

This  is  refl ected  in  the  prominence  they  are  given  in  political  dialogues  with 

non-EU  countries,  throughout  the  EU’s  development  assistance  programmes 

and in the EU’s multilateral engagements. The EU’s commitment to human rights 

has  been  further  strengthened  by  the Treaty  of  Lisbon,  which  also  paved  the 

way  for  the  EU  to  accede  to  the  European  Convention  on  Human  Rights  and 

consolidates human rights, democracy and the rule of law among key objectives 

of the EU’s external policies.

Investing in peace

Through the EU’s Instrument for Stability, confl ict prevention interventions were 
launched  in  support  of  peace  and  reconciliation  processes  and  stabilisation 
measures  in  Bangladesh,  Belarus,  Ecuador,  Georgia,  Honduras,  Indonesia, 
Kyrgyzstan,  Lebanon,  Mauritania,  Nagorno-Karabakh,  the  Philippines,  Senegal, 
Sudan  and Thailand.  Altogether  the  EU  launched  27  fast-track  crisis  response 
programmes in 2010, with commitments of €140 million — including €25 million 
for Haiti and €33 million in Pakistan. In addition, it mobilised €20 million to fund 
the  EU  Peacebuilding  Partnership,  which  enhances  the  crisis  preparedness 
capacities of civil society and regional and international partners, and another 
€62 million to address long-term security threats.

The  promotion  of  democracy  and  respect  for  human  rights  were  supported 

through  election  observation  missions  during  the  year,  particularly  in  Africa, 

in Burundi, Côte d’Ivoire, Ethiopia, Guinea, Sudan, Tanzania and Togo. Under the 

authority of chief observers from the European Parliament, over 800 observers 

from  all  Member  States  staff ed  these  missions,  representing  one  of  the  most 

tangible  and  visible  contributions  to  EU  foreign  policy,  and  bringing  together 

Member  States,  Parliament  and  the  Commission  in  a  shared  endeavour  to 

promote democracy and human rights across the globe.

Advancing democratic elections

The executive and legislative elections in Sudan in April marked a crucial step in 
the comprehensive peace agreement which aims to bring decades of civil war to 
an end. The EU election observation mission comprised 147 accredited observers 
from 25 EU Member States. The mission’s recommendations included the need 
for  a  comprehensive,  transparent  and  accurate  voter  registration  exercise  and 
improved voter identifi cation. The value of the mission is likely to be seen in the 
referendum planned for 2011.

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EU observers check out a polling station 
during the presidential elections in Sudan 
— one of the many similar missions the EU 
conducted during the year.

Smaller election assessment teams were also sent to Iraq, and to Afghanistan, to 

witness  the  electoral  process  and  to  make  recommendations.  Although  these 

operations  are  more  limited,  since  they  do  not  involve  full  observation,  they 

demonstrated  the  merits  of  this  approach  in  security-compromised  contexts. 

Expert  missions  were  also  sent  to  Haiti,  Kosovo  (16),  Nicaragua,  Niger,  Rwanda 

and the Solomon Islands.

PARLIAMENT UPHOLDS 
FREEDOM OF THOUGHT

EU eff orts to promote the ratifi cation and implementation of the International 

Criminal  Court  Rome  Statute  were  particularly  successful,  with  Bangladesh, 

Moldova,  Seychelles  and  St  Lucia  completing  the  process  during  the  year. 

The  EU  provided  €4m  to  civil  society  organisations  that  raise  awareness  and 

promote ratifi cation of the Rome Statute.

As  part  of  its  action  to  recognise  human  rights  defenders  and  involve  them 

in  shaping  EU  human  rights  policy,  EU  missions  were  tasked  with  organising 

annual meetings with human rights defenders and their organisations, adopting 

local strategies and nominating EU liaison offi  cers as contact points.

A  toolkit (17)  to  promote  and  protect  the  enjoyment  of  all  human  rights  by 

lesbian,  gay,  bisexual  and  transgender  people  was  adopted (18).  It  prioritises 

decriminalisation,  equality  and  non-discrimination,  as  well  as  support  and 

protection for people defending these rights.

More  than  40  dialogues  and  consultations  specifi cally  on  human  rights  took 

place  with  countries  across  the  world,  including  the  fi rst  with  Indonesia  and 

Mexico. The achievements of the EU–China human rights dialogue and EU–Russia 

human rights consultations were reviewed. To maximise the involvement of civil 

society, seminars were organised in parallel with offi  cial human rights dialogues, 

including a civil society seminar on women’s rights in June, where representatives 

from all central Asian states came to Brussels to discuss human rights issues as 

they aff ect women in the region. The annual EU–NGO Forum took place in July, 

where some 150 representatives of international human rights groups discussed 

the fi ght against the death penalty, protection of economic, social and cultural 

rights and EU relations with regional human rights organisations.

Cuban dissident Guillermo Fariñas was 
the winner of the 2010 Sakharov Prize 
for Freedom of Thought. The award 
recognised his non-violent opposition to 
and denunciation of the Castro regime, 
as a symbol of the struggle against the 
imprisonment of political opponents.

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When the European Parliament awarded 
the 2010 Sakharov Prize to Cuban dissident 
Guillermo Fariñas, an empty chair dressed 
with a Cuban fl ag had to stand in for his 
presence. The Cuban government refused 
him permission to travel to receive the prize.

94

 
 
 
 
 
 
 
 
 
 
DEFENDING DEFENDERS OF HUMAN 
RIGHTS

The latest fi gures for the European 
Instrument for Democracy and Human 
Rights show that in 2010 it committed 
€150 million in co-funding for some 550 
new human rights projects in about 100 
countries, implemented mainly by civil 
society organisations.

The  Commission  adopted  a  strategy  for  2011–13  focused  on  strengthening 

the  role  of  civil  society  in  promoting  human  rights  and  democratic  reform. 

It emphasises the fi ght against the death penalty, torture, children and armed 

confl ict and violence against women and girls, as well as promoting the rights 

of the child.

T R A D E     D O I N G  B U S I N E S S  A R O U N D  T H E W O R L D

As the world’s biggest trading bloc, the EU depends on and vigorously 
defends  open  trade. The World Trade  Organisation  (WTO)  and  the 
multilateral trading system are the focus for EU trade policy. The EU 
believes that a system of global rules is the best way to ensure that 
trade  between  countries  is  fair  and  that  prosperity  can  be  widely 
shared.  The  Commission  set  out  a  renewed,  more  assertive  trade 
policy  in  November (19). The  new  policy  builds  on  a  heavy  agenda 
of multilateral and bilateral trade talks, but adapts the approach to 
better defend European interests, while also promoting European 
values  and  objectives. Trade  is  part  of  Europe’s  recovery  plan  and 
therefore  an  integral  part  of  the  Europe  2020  strategy.  Indeed 
economic  growth  and  recovery  depend  on  open,  integrated  and 
fair  markets.  During  the  year,  the  EU  created  new  opportunities 
abroad and ensured rules governing trade were strengthened and 
respected, making sure that trade takes place on fair terms.

The EU places a particular emphasis on developing new relationships with key 

trading partners, including the USA, China, Russia and Japan, where the biggest 

EVOLUTION OF WORLD TRADE IN VOLUME 
from Jan. 2007 to Sept. 2010, 2000 = 100 (CPB)

trade  challenges  are  often  about  red  tape  beyond  the  borders,  rather  than 

the  traditional  lowering  of  tariff s  at  the  frontier. To  make  life  easier  for  honest 

traders  while  keeping  security  standards  high,  the  EU  improved  its  customs 

cooperation  with  strategic  partners.  With  the  United  States,  it  sought  mutual 

recognition  of  customs  security  standards  —  to  avoid  imposing  excessive 

administrative burdens on legitimate business — and it opposed the imposition 

of  scanning  of  all  exports. The  meeting  of  the Transatlantic  Economic  Council 

with  the  United  States  on  17  December  took  concrete  steps  to  promote  a 

forward-looking  business  environment  that  reduces  regulatory  barriers  and 

%

180

160

140

120

100

2007

2008

2009

2010

2011

encourages  innovation,  shared  standards  and  high-tech  business.  Delegates 

Source: CPB Netherlands Bureau for Economic Policy Analysis

agreed on a common approach regarding electronic health record systems, and 

to focus attention on access to raw materials, eco-friendly products, innovation 

policy, nanotechnologies, green procurement and social innovation. They also 

launched a joint website against counterfeiting.

95

G E N E R A L R E P O RT 2010   |   T H E E U I N T H E W O R L D

The EU and Japan agreed on mutual recognition of customs security standards. 

With China, the EU has worked to strengthen customs enforcement of intellectual 

property  right  protection.  And  the  EU–China  high-level  economic  and  trade 

dialogue took place on 21 December.

Doing business with South Korea

The signature of the EU–South Korea free trade agreement, initialled in October 
2009,  took  place  at  the  EU–South  Korea  Summit  in  October,  confi rming  the 
prospects for major trade developments. South Korea is already the EU’s eighth 
largest  trade  partner,  while  the  EU  has  become  the  second  largest  export 
destination  for  South  Korea.  The  agreement  provides  for  the  progressive 
liberalisation of trade in goods and services, and for rules on competition and 
state  aid,  intellectual  property  and  public  procurement.  To  tackle  non-tariff  
obstacles to trade, it includes specifi c provisions on electronics, motor vehicles 
and vehicle parts, pharmaceuticals, medical devices and chemicals. It will bring 
major benefi ts to economic operators and to consumers, as well as sending a 
strong message that trade liberalisation is a key element for the recovery of the 
world economy.

Negotiations for a bilateral free trade agreement were launched with Singapore 

in March, and with Malaysia at the EU–Asia Summit (ASEM) in October. An April 

summit  with  Japan  agreed  to  mechanisms  for  strengthening  economic  and 

trade ties, setting up a high-level group to report back to next year’s summit on 

ways of intensifying the relationship.

The  EU  and  Russia  concluded  their  bilateral  talks  on  Russia’s  accession  to  the 

WTO in November. And progress in negotiations on free trade agreements with 

Canada and Ukraine held out the prospect of signifi cant shifts in the global trade 

landscape  and  of  new  trade  opportunities  for  EU  businesses  and  investors  in 

these growing markets. Signifi cant progress was also made in the negotiations 

with India, with both sides agreeing on the broad contours of a fi nal package 

at the EU–India Summit on 10 December. It was agreed that both sides would 

dedicate all eff orts necessary to conclude the negotiations as rapidly as possible.

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European Commission President 
José Manuel Barroso delivered a keynote 
address in Beijing in April. He stressed 
the shared interest of the EU and China 
in tackling global challenges such 
as the fi nancial and economic crisis, 
climate change and energy.

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Flags from Vietnam, Australia and Thailand, 
among many others, fl ew outside the EU 
headquarters in Brussels in October when 
leaders from Asian and European countries 
gathered there to attend the 
ASEM Summit.

96

 
 
 
 
 
 
 
 
 
 
At  the  EU  summit  with  Latin  America  and  the  Caribbean  in  May  (see  page 

89),  a  new  chapter  was  opened  in  trading  relationships.  This  included  a 

comprehensive region-to-region association agreement encompassing political 

dialogue,  cooperation  and  trade,  and  a  trade  agreement  with  Colombia  and 

Peru.  EU  and  Mercosur  leaders  also  agreed  to  relaunch  negotiations  on  an 

EU–Mercosur  association  agreement  covering  political,  cooperation  and  trade 

matters. At the same time, the EU’s longest running trade dispute — on bananas, 

and the level of the EU tariff  and preferences accorded to African, Caribbean and 

Pacifi c (ACP) countries — was solved in a way which is fair to producers in Latin 

America and in the ACP. A deal was signed with Latin American countries and 

with the United States. The European Parliament is set to ratify the deal in the 

fi rst quarter of 2011.

The  EU  continued  to  address  competition  distortions  in  international  trade 

via the use of its trade defence instruments (anti-dumping, anti-subsidies and 

safeguards), in full compliance with WTO rules. Sixteen new cases were opened 

and seven defi nitive measures imposed in the fi rst 10 months of 2010. Despite 

the  global  economic  downturn,  trade  defence  measures  in  2009  aff ected 

only  around  0.5 %  of  trade.  During  the  year  the WTO  issued  its  rulings  on  the 

dispute  between  the  EU  and  the  United  States  over  subsidies  to  Airbus  and 

Boeing.  A WTO  ruling  in  June  criticised  some  of  the  low-interest  government 

loans to Airbus. The EU appealed the ruling in July, while continuing to seek a 

negotiated settlement.

The Commission also made proposals in the area of foreign direct investment 

(a  new  area  of  EU  competence  following  the  entry  into  force  of  the Treaty  of 

Lisbon), setting out how investment can be used to boost competitiveness and 

trade and lead to growth and jobs (20). In October, to give a much needed boost 

to  the  recovery,  the  EU  called  on  its  major  trading  partners  to  remove  more 

than 330 protectionist barriers and restrictive measures put in place during the 

economic crisis, and which, contrary to the G20 commitment reiterated at the 

G20 Summits in Toronto (June 2010) and Seoul (November 2010), have not been 

removed despite signs of economic recovery.

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The EU’s longest running trade dispute 
on bananas was solved and a deal signed 
with Latin American countries and the 
United States.

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G E N E R A L R E P O RT 2010   |   T H E E U I N T H E W O R L D

 
 
 
 
A  deal  was  agreed  on  an  anti-counterfeiting  trade  agreement,  which  helps 

to  tighten  up  enforcement  by  developed  countries,  limiting  the  market  for 

counterfeit  goods  and  strengthening  protection  for  copyright  and  trade-

marked  EU  goods  and  products  with  EU  geographical  indications.  Overall  the 

EU continued to promote access to markets for EU goods and services through 

its local market access teams and, where necessary, through actions in the WTO.

Lifting restrictions on imports into Malaysia

Malaysia 
lifted  cumbersome  testing  requirements  on  cheese  from  EU 
Member States in March. The measure, in force since 2008, implied that every 
consignment  had  to  be  accompanied  by  a  health  certifi cate  and  a  certifi cate 
of analysis proving the absence of listeria in a probe of 25g. Malaysia claimed 
this to be an important and legitimate safeguard measure. The EU cited its own 
stringent rules and control measures and international standards development 
for listeria testing in 2009, and successfully argued that the Malaysian controls 
were  disproportionate.  The  result  not  only  promotes  and  simplifi es  trade  — 
it  also  restores  dynamism  to  EU  trade  which  was  already  worth  €3  million  in 
2008 alone.

Trade also plays a vital role in development and recovery. Better market access for 

Pakistani products was proposed by the Commission as part of the EU response 

to  the  fl oods  that  hit  the  country  in  August. The  aim  was  to  build  confi dence 

among  investors  and  assist  in  restoring  the  economy.  When  approved,  the 

proposed preferences would liberalise almost 30 % of Pakistan’s exports to the 

EU — or €900 million of current trade.

WHERE DOES THE EU IMPORT FROM? 
Share of imports into the EU, 
Jan. to Oct. 2010

WHERE DOES THE EU EXPORT TO? 
Share of exports from the EU, 
Jan. to Oct. 2010

Other
41.11 %

Turkey
2.83 %

USA
11.43 %

Other
48.52 %

USA
18.15 %

China
18.93 %

Russia
10.37 %

Japan
4.39 %

Norway
5.22 %

Switzerland
5.71 %

Turkey
4.49 %

Norway
3.10 %

Japan
3.27 %

China
8.34 %

Russia
6.35 %

Switzerland
7.78 %

Source: European Commission.

Source: European Commission.

98

E N L A R G E M E N T

Accession negotiations with Croatia and Turkey continued in 2010, 
and new negotiations were opened with Iceland. The enlargement 
process  has  delivered  benefits  for  Europe  in  the  widest  sense, 
including  more  security  and  prosperity  for  the  Union  as  well  as 
incentives for reform in countries seeking to become EU members. 
It  also  supported  EU  policies  in  energy,  transport,  environment, 
climate  change  and  the  security  of  citizens.  At  the  same  time,  it 
consolidated contacts between people: notably, citizens of Albania 
and Bosnia and Herzegovina were granted visa-free travel to the EU 
as  of  15  December,  matching  the  facilitations  from  which  citizens 
of  the  former  Yugoslav  Republic  of  Macedonia,  Montenegro  and 
Serbia benefited — also for the first time — throughout 2010.

CANDIDATE AND POTENTIAL CANDIDATE COUNTRIES 

1

2

A

B

C

3

4

D

5

Candidate countries:
1. Iceland 
2. Croatia
3. Montenegro
4. The former Yugoslav Republic of Macedonia 
5. Turkey

Source: European Commission.

Potential candidate countries:
A. Bosnia and Herzegovina 
B. Serbia
C. Kosovo (*)
D. Albania

(*) Under UNSCR 1244/1999

Reforms continued in all the enlargement countries, though at an uneven pace. 

These  related  to  democracy  and  human  rights,  economic  management  and 

alignment of national legislation with EU standards and legislation. Challenges 

remained, notably in relation to good governance, rule of law and freedom of 

expression.  Full  cooperation  with  the  International  Criminal  Tribunal  for  the 

former  Yugoslavia  (ICTY)  remains  a  condition  for  the  accession  process  for 

several countries, and bilateral issues also hampered progress.

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G E N E R A L R E P O RT 2010   |   T H E E U I N T H E W O R L D

Progress  was  made  in  regional  cooperation  in  the Western  Balkans  and  regional 

ownership strengthened. Work moved ahead on the Energy Community, the Central 

European  Free  Trade  Agreement  (CEFTA)  and  the  South-east  Europe  Transport 

Observatory; the Regional School of Public Health Administration in Montenegro, 

fi nanced by the EU, was opened. A revised memorandum of understanding was 

signed for regional cooperation against organised crime and serious crime in the 

Western Balkans. Regional cooperation was held back on some issues, however, by 

diff erences over the status of Kosovo. The European perspective for the Western 

Balkans was again clearly confi rmed at the EU–Western Balkans high-level meeting 

in Sarajevo in June.

Among  the  candidate  countries,  Croatia  further  improved  its  ability  to  take  on 

the  obligations  of  membership,  and  preparations  for  meeting  EU  requirements 

progressed  well.  Thirty-four  of  the  35  accession  negotiation  chapters  have  been 

opened, and 28 are provisionally closed. Negotiations should be concluded once 

Croatia has met outstanding requirements in the fi elds of judiciary and fundamental 

rights, the fi ght against corruption, competition policy, public administration reform, 

support  for  minorities  and  refugee  return.  Croatia’s  relations  with  neighbouring 

countries, in particular with Serbia and Slovenia, have gained new impetus.

Turkey  amended  its  constitution:  reforms  to  its  political  and  legal  system 

address  some  priority  actions  in  its  judiciary  and  fundamental  rights.  But 

implementation  of  these  decisions  is  needed,  in  particular  to  assure  freedom 

of expression in practice. Accession negotiations advanced, albeit rather slowly. 

The  current  stage  requires Turkey  to  step  up  its  eff orts,  notably  in  complying 

with its obligation of full non-discriminatory implementation of the Additional 

Protocol  to  the  Association  Agreement.  There  was  no  progress  towards 

normalisation  of  bilateral  relations  with  the  Republic  of  Cyprus. Turkey’s  more 

active foreign policy in its wider neighbourhood is an asset for the EU, provided it 

is developed as a complement to Turkey’s accession process and in coordination 

with the EU.

In  the  former  Yugoslav  Republic  of  Macedonia,  progress  was  uneven,  with 

further  eff orts  needed  on  independence  of  the  judiciary,  the  fi ght  against 

corruption,  reform  of  public  administration  and  freedom  of  expression  in 

the  media.  Political  dialogue  also  needs  to  be  strengthened.  In  its  November 

progress  report,  the  Commission  reiterated  its  recommendation  on  opening 

accession negotiations. A solution to the name issue remains essential.

ICELAND NEGOTIATES 
ACCESSION TO THE UNION

Based on a positive Commission opinion on 
Iceland’s application for EU membership (21), 
in June the European Council decided to 
open accession negotiations; these were 
launched in July at a fi rst Intergovernmental 
Conference. In November, the process of 
‘screening’ the country’s legislation for 
compatibility with the EU began.

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 Iceland meets the political criteria for EU 
membership and, despite being hit hard 
by the banking crises, it is well prepared to 
undertake the measures needed to meet the 
requirements for EU membership.

100

 
 
 
 
 
 
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Croatia achieved good overall progress 
in numerous fi elds and negotiations 
have entered their fi nal phase. 

MONTENEGRO: A NEW CANDIDATE 
FOR EU MEMBERSHIP 

The December European Council endorsed 
the European Commission’s November 
recommendation that Montenegro should 
be granted candidate status.

Accession negotiations will be opened 
once the country has achieved the 
necessary degree of compliance with 
the membership criteria. During the 
year, Montenegro made progress on the 
political criteria, the legal framework and 
administrative and institutional capacity. 
But increased awareness and sensitivity of 
the administration, police and the judiciary 
towards applying EU standards are needed. 
Also, the, rule of law, in particular in the 
fi ght against corruption and organised 
crime, remains a serious challenge.

Among the potential candidate countries, Albania established a constitutional 

and  legislative  framework,  but  shortcomings  remain.  These  relate  to:  the 

eff ectiveness  and  stability  of  Albania’s  democratic 

institutions,  notably 

parliament; continued politicisation of public administration; pending judiciary 

reform;  enforcement  of  rule  of  law,  notably  in  the  fi ght  against  corruption 

and  organised  crime;  and  implementation  of  legislation  on  human  rights. 

The  Commission  opinion,  issued  in  November,  on  the  country’s  membership 

application recommended that negotiations should be opened once the country 

has achieved the necessary degree of compliance with the membership criteria.

The October general elections in Bosnia and Herzegovina were generally in line 

with international standards, but the country must still amend its constitution 

to  remove  incompatibilities  with  the  European  Convention  on  Human  Rights. 

Only limited progress in judiciary and public administration reform and in tackling 

corruption was achieved, but conditions for refugees and returnees and regional 

cooperation  improved.  Very  little  progress  was  made  towards  meeting  the 

remaining requirements for the closure of the Offi  ce of the High Representative.

The  interim  agreement  between  Serbia  and  the  EU  entered  into  force  on 

1 February 2010, with the ratifi cation process of the Stabilisation and Association 

Agreement  starting  in  June.  Serbia  has  continued  to  implement  its  reform 

agenda but additional eff orts are required in the areas of rule of law and public 

administration reform. In October, the Council asked the Commission to prepare 

an opinion on the country’s membership application. An EU–Serbia agreement 

on macro-fi nancial assistance was signed in July 2010. Despite the cooperation 

with the ICTY, the two remaining fugitives — Ratko Mladić and Goran Hadžić — 

remained at large.

Kosovo made good progress on initiatives identifi ed in the Commission’s 2009 

communication  on  Kosovo (22).  Stabilisation  and  Association  Process  dialogue 

meetings were held, the fi rst cross-border cooperation programmes for Kosovo 

were  presented  in  December  and  expert  missions  assessed  Kosovo’s  capacity 

in  the  areas  of  trade  and  reintegration.  Important  challenges  remain,  notably 

in  public  administration,  the  judiciary  and  the  fi ght  against  organised  crime 

and  corruption.  Following  the  advisory  opinion  from  the  International  Court 

of Justice that Kosovo’s unilateral declaration of independence did not violate 

international law or UN Security Council Resolution 1244/1999, the UN General 

Assembly adopted a resolution, co-sponsored by Serbia and the EU, welcoming 

the readiness of the EU to facilitate dialogue between Belgrade and Pristina. The 

mandate of the EU Rule of Law Mission in Kosovo (EULEX) was extended until 

June 2012.

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E U R O P E A N N E I G H B O U R H O O D P O L I C Y

Europe’s  foreign  policy  is  both  global  and  specifically  local. 
Consequently,  the  EU  has  invested  heavily,  in  2010  as  in  previous 
years, in helping the countries in its own neighbourhood to resolve 
their problems and to become closer partners.

A report (23) on the countries to the immediate east and south showed how the 

European  neighbourhood  policy  is  promoting  mutual  understanding  through 

its  people-to-people  contacts  and  through  business,  civil  society  and  cultural 

ties.  Despite  a  sometimes  diffi  cult  context  in  these  regions,  the  EU  has  been 

able to establish a partnership for reform with its neighbours since the launch 

of  the  policy  in  2004.  Tangible  results  have  benefi ted  both  partner  countries 

and the EU, even if implementation has sometimes lagged behind policy design 

and legislation.

INVESTING FOR THE FUTURE

Particular  progress  was  recorded  with  Morocco,  including  an  EU–Morocco 

By December 2010, just 30 months 
after its inception, the Neighbourhood 
Investment Facility had provided a total 
of €280 million in grants, mobilising a 
total of €12 billion in funds from European 
fi nancial institutions. This money 
leveraged operations worth more than 
€7.3 billion, including investments in the 
fi eld of renewable energies, such as a 
200MW wind farm in the Gulf of El Zayt in 
Egypt and a wastewater treatment plant 
in Lebanon.

Summit  in  Granada  in  March  —  the  fi rst  such  summit  with  a  Mediterranean 

country  —  and  an  agreement  on  the  country’s  participation  in  selected  EU 

programmes  and  agencies.  Negotiations  were  completed  for  liberalisation 

of  trade  in  agricultural  products,  and  talks  are  under  way  on  liberalisation  of 

trade  in  services  and  investment.  Tunisia,  too,  has  discussed  liberalisation  of 

trade in services and investment, and has shown interest, along with Egypt and 

Jordan,  in  seeking  advanced  status  in  relations  with  the  EU.  Algeria  agreed  to 

set up a sub-committee on political dialogue, security and human rights. And a 

framework agreement under negotiation with Libya, where the EU decided to 

open an offi  ce, will pave the way for long-term cooperation and dialogue.

Association  agreements  are  under  negotiation  with  Armenia,  Azerbaijan, 

Georgia, Moldova and Ukraine, with parallel negotiations for a trade agreement 

well advanced with Ukraine, and in a preparatory phase for others. Preparations 

were  launched  for  new  institution-building  activities  designed  to  help  these 

countries  in  negotiating  and  implementing  the  agreements.  New  specialised 

sub-committees were created to strengthen EU bilateral relations with Armenia, 

Azerbaijan and Georgia. The dialogue with partners on human rights was also 

strengthened.  Visa  facilitation  and  readmission  agreements  were  signed  with 

Georgia, and preparations for negotiations of similar agreements for Armenia, 

Azerbaijan  and  Belarus  were  launched.  Dialogues  on  visa  liberalisation  are 

ongoing with Moldova, Russia and Ukraine. A joint interim action plan was also 

agreed with Belarus.

Bilateral  action  plans  with  individual  countries  are  complemented  at  regional 

level. The Eastern Partnership came into full operation, with two foreign ministers’ 

meetings (24) which took stock of political achievements and reviewed the work 

programmes,  in  which  more  than  70  activities  are  planned.  An  environmental 

project for the region was launched in March to develop a shared environmental 

information system. With the Lisbon Treaty in force and the European External 

Action Service coming into existence, the new coherence of EU foreign policy-

making now allows the discussion of issues of security and stability within the 

Eastern Partnership.

102

The regional approach in the south was pursued in the framework of the Union 

for the Mediterranean. Despite two postponements of the summit of the Union 

for the Mediterranean which had been due to take place fi rst in June and then 

in November, sectoral ministerial meetings were held on water, tourism, trade, 

labour and employment, economic and fi nancial aff airs and the Facility for Euro-

Mediterranean Investment and Partnership.

R E S P O N D I N G  T O  H U M A N I TA R I A N C R I S E S

Together,  the  European  Commission  and  the  Member  States 
constitute the largest humanitarian aid donor in the world. In the EU, 
humanitarian aid continues to enjoy strong support, as an EU-wide 
survey  confirmed:  eight  out  of  10  EU  citizens  think  it  is  important 
that  the  EU  funds  humanitarian  aid  outside  its  borders (25).  The 
global  humanitarian  context  is  increasingly  marked  by  serious 
natural  disasters  and  diminishing  humanitarian  space  in  many 
crisis  and  conflict  zones.  Governments  and  non-state  actors  often 
disregard even the most basic protection afforded by international 
humanitarian law, further limiting the scope for humanitarian action. 
Meanwhile, the growing impact of climate change led to a sharp rise 
in the numbers of people affected by natural disasters in 2010.

Natural  disasters  presented  huge  challenges  during  the  year.  The  Haiti 

earthquake provoked a swift reaction from the Commission’s humanitarian and 

civil protection services. They sent experts to assess needs and coordinate the 

EU’s  response,  mapped  the  damage  and  allocated  €120  million  in  assistance. 

The  Commission’s  Monitoring  and 

Information  Centre  coordinated  civil 

protection  assistance  from  EU  Member  States,  dispatching  European  rapid 

response  modules  and  awarding  €4.4  million  in  EU  fi nancial  support  for  the 

transport  of  assistance.  High  Representative  Catherine  Ashton  was  able  to 

represent the entire EU at the New York pledging conference in March. She made 

a collective pledge of more than €1 billion.

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EU High Representative Catherine Ashton 
visiting a refugee camp in Haiti, March 2010.

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On 12 January 2010, Haiti was struck 
by the worst earthquake in its history. 
Over the year, the European Union provided 
both humanitarian assistance and 
development aid to help rebuild the country.

In  sub-Saharan  Africa,  the  EU  also  brought  relief  to  victims  of  drought  and 

fl oods,  confl icts,  epidemics  and  food  insecurity.  Sudan  received  €131  million 

to  assist  vulnerable  populations  in  Darfur,  South  Sudan  and  the  transitional 

areas. In the Sahel, funding eased drought and food insecurity. In the Horn of 

Africa, €20 million was provided to counter the eff ects of confl ict and drought. 

In Kenya, the EU funded relief eff orts in the Dadaab camps, the world’s biggest 

refugee camps, and host to an increasing number of Somalis fl eeing confl ict and 

breakdown in law and order in their country.

THE WORST FLOODS 
IN PAKISTAN’S HISTORY 

The  EU’s  civil  protection  mechanism  was  activated 

in  response  to  six 

emergencies  beyond  the  EU.  Disaster  risk  reduction  programmes  were  run  in 

The EU’s humanitarian response to 
Pakistan’s serious monsoon fl oods in 
August was signifi cant. The Commission 
provided a total of €150 million in 
humanitarian assistance, and coordinated 
aid in kind from Member States, making 
use, for the fi rst time, of civilian strategic 
airlift capacity in coordination with the 
EU military staff . 

seven  regions  of  the  world.  Every  €1  spent  on  capacity-building,  training  and 

awareness-raising,  early  warning  systems  and  contingency  planning  is  worth 

€4 spent on humanitarian responses after a disaster has occurred. In October, 

the Commission proposed (26) improved effi  ciency, coherence and visibility of EU 

disaster response.

The EU provided relief to victims of ‘forgotten crises’, including the Lao Hmong 

minority in Thailand, the populations aff ected by internal confl icts in Colombia, 

Mindanao  in  the  Philippines  and  the  north  of Yemen,  the  Sahrawi  refugees  in 

Algeria and the Bhutanese refugees in Nepal.

104

 
 
 
D E V E LO P M E N T   CO O P E R AT I O N 

The  Treaty  of  Lisbon  recognises  development  as  a  policy  in  its 
own right, on an equal footing with other components of the EU’s 
external policy. It puts a new focus on coordinating the Union’s and 
Member  States’  development  policies,  and  on  coherence  between 
development policy and the other EU policies. This coincides with 
a  shift  to  integrate  EU  development  policy  into  the  Europe  2020 
agenda. Moving away from a donor–recipient relationship, the policy 
is one of mutual interest: working in partnership with developing 
countries  to  provide  sustainable  and  inclusive  opportunities  for 
growth  and  poverty  reduction  whilst  at  the  same  time  benefiting 
the EU.

The money provided by the EU remains signifi cant. Together with its Member 

SUSTAINABLE ACCESS TO SAFE WATER

Water and sanitation programmes, which 
help build infrastructure for drinking 
and wastewater systems, and provide 
basic sanitation and hygiene, amount to 
almost €400 million per year. Since 2004, 
more than 31 million people have been 
connected to drinking water and 9 million 
to sanitation facilities.

States, the EU now provides nearly €50 billion of aid a year, a doubling over the 

past 10 years. As the world’s biggest donor, the EU reconfi rmed its commitment 

for  its  aid  to  reach  the  target  of  0.7 %  of  gross  national  income  by  2015. 

Member States, too, agreed to take realistic and verifi able actions for meeting 

their individual commitments.

The  assistance  provided  by  the  EU  is  very  tangible. The  Commission  provides 

over  €600  million  for  food  security  per  year,  giving  people  both  physical  and 

economic access to the basic food they need. In the period 2004–10, 24 million 

people  living  in  extreme  poverty  benefi ted  from  seeds  and  tools,  direct  cash 

transfers and food.

The  €1  billion  EU  Food  Facility  agreed  in  2009  is  on  track  to  providing  a 

fast  and  effi  cient  response  in  tackling  food  insecurity.  More  than  50  million 

people  have  benefi ted,  and  this  is  starting  to  show.  Zimbabwe  is  a  concrete 

example.  There,  26 000  tonnes  of  seeds  and  fertiliser  have  been  distributed 

to  176 000  vulnerable  farmers.  Geographical  monitoring  through  satellite 

observation has also helped ensure eff ective implementation.

In March, the EU gave renewed impetus to food security in developing countries 

with  two  new  policy  frameworks.  One  focuses  on  progress  towards  the 

elimination of poverty and hunger, the other on maximising the eff ectiveness 

of  humanitarian  support  in  crises  where  food  insecurity  threatens  lives. 

The  Commission  promoted  the  vision  of  an  environmentally  friendly  and 

sustainable  agricultural  model,  adapted  to  the  reality  of  developing  countries 

and  markets.  This  enhances  the  productivity  of  smallholder  farmers  and  the 

resilience  of  rural  communities  in  making  food  available,  accessible  and  of 

adequate nutritional quality.

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The €1 billion EU Food Facility agreed in 
2009 enables the EU to respond rapidly to 
problems caused by soaring food prices 
in developing countries.  

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Development  policy  underwent  major  evolutions  during  the  year.  With  only 

fi ve  years  remaining  before  the  2015  deadline  for  achieving  the  millennium 

development  goals,  the  Commission  delivered  a  series  of  proposals  on 

development  and  education (27),  gender (28),  tax (29),  fi nancing,  health (30),  aid 

eff ectiveness (31) and food security (32). Its approach to mobilising more fi nancial 

resources  for  development  was  endorsed  at  the  EU’s  June  summit,  boosting 

EU  preparations  in  the  run-up  to  the  special  UN  review  summit  in  New  York 

in September. 

DEVELOPMENT IS A GLOBAL CONCERN

Changes in global development architecture call for stronger coordination and 

At the G20 Summit in Seoul in 
November, the EU successfully argued 
for development to be included — for 
the fi rst time — on the G20 agenda, 
fi rmly anchored in its growth and 
investment strategy.

increased  synergies  between  all  partners  in  favour  of  poverty  eradication  and 

sustainable  development  of  the  poor.  The  EU  has  accordingly  strengthened 

development dialogues and practical cooperation with major strategic partners. 

Cooperation was relaunched with the USA with a focus on climate change and 

food security, and the fi rst EU–Japan policy dialogue on development was held 

in Tokyo. Trilateral cooperation involving the EU, Brazil and Haiti has been agreed 

and  practical  preparations  have  started.  A  formal  dialogue  process  among  all 

those  involved  in  development  cooperation  was  started  in  March,  to  increase 

involvement of civil society and local authorities.

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The EU has fi nanced programmes to boost 
schooling — such as this project in 
East Timor, where younger schoolchildren 
receive mid-morning meals to encourage 
enrolment and attendance, and to increase 
students’ learning capacity.

A ‘Policy coherence for development’ paper adopted in the spring outlined EU 

responses to the global challenges of trade and fi nance, climate change, global 

food  security,  migration  and  security.  It  proposed  mechanisms  to  ensure  that 

development  objectives  are  taken  into  account  and  reconciled  with  other  EU 

objectives (33).  The  establishment  of  the  European  External  Action  Service  is 

central in reinforcing this policy coherence.

106

 
 
 
 
 
An  October  communication  on  the  future  of  EU–Africa  relations (34)  refl ected 

Africa’s  role  as  a  rapidly  emerging  economic,  commercial  and  political  actor. 

It  identifi ed  a  series  of  strategic  areas  where  the  EU  and  Africa  could  further 

enhance their relations for their mutual benefi t, and suggested concrete steps 

for the coming years. The EU–Africa Summit — the ‘G80’ of today, with around 

1.5 billion people represented at the summit table — took place in Sirte (Libya) 

in November, and set out an action plan for the two continents for the coming 

years  under  the  heading  ‘Growth,  jobs  and  investment’.  The  EU  and  Africa 

agreed to expand their bilateral cooperation in peace and security, democratic 

governance  and  human  rights,  energy,  trade  and  infrastructure,  migration, 

WHO GIVES DEVELOPMENT AID? 
Main donors of offi  cial development aid. 
2010 is a forecast. 

Billion €
80

60

40

20

0

EU

USA

Japan

science  and  technology,  ICT  and  space. They  committed  to  working  together 

2000

2002

2004

2006

2008

2010

Sources: European Commission, OECD/DAC.

more  closely  in  international  forums  to  make  progress  on  challenges  such  as 

climate change and meeting the millennium development goals. Leaders also 

agreed to intensify the political and policy dialogue between both sides. 

At  the  Joint  ACP–EU  Council  in  Ouagadougou  in  June,  signatures  were  put 

to  a  revised  Cotonou  Agreement,  on  which  negotiations  were  brought  to  a 

successful end in March. This agreement addresses the trend towards increased 

regional diff erentiation (35). The new text reaffi  rms the commitment to attaining 

the millennium development goals, and strengthens the links between security 

and development. It recognises the role of the African Union, and confi rms the 

commitment to political dialogue supporting multilateralism.

In September, the European Commission approved the fi rst fi nancing decisions 

PARTNERS IN CRISIS

Between 40 million and 80 million 
people in developing countries will be 
forced into absolute poverty because of 
the crisis. A set of measures was agreed 
with €215 million committed to help 
11 African and two Caribbean countries 
to reduce funding shortfalls in their 
government budgets.

under  the  €264  million  2010  allocation  for  the Vulnerability  FLEX  mechanism 

to help the most vulnerable African, Caribbean and Pacifi c countries cope with 

the  impact  of  the  global  fi nancial  crisis  and  economic  downturn.  It  helped 

19 countries maintain their level of public spending in priority areas, and mitigate 

the social impact of the economic downturn. This short-term instrument, which 

provided €500 million during 2009–10, supported Antigua and Barbuda, Benin, 

Burkina Faso, Burundi, Cape Verde, the Central African Republic, the Democratic 

Republic  of  Congo,  Grenada,  Guinea-Bissau,  Haiti,  Lesotho,  Liberia,  Malawi, 

Samoa, Sierra Leone, Togo, Tonga, Tuvalu and Zimbabwe. This €500 million is in 

addition to the €1 billion Food Facility and the allocation of €200 million under 

the  European  Development  Fund  in  2008  to  help  developing  countries  cope 

with higher food prices. With these targeted mechanisms, the EU was the fi rst to 

act in line with the recommendations from the G20 Summit in London in April 

2009, working for a sustainable and balanced recovery.

Refl ection took place on a new Council decision on relations with the overseas 

countries and territories with constitutional links to EU Member States, to enter 

into force in 2014. Its focus — modernisation, competitiveness and cooperation 

— was refl ected in the annual political forum with these countries and territories, 

in March.

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SUPPORTING PROJECTS IN LATIN 
AMERICA

The Latin America Investment Facility, 
with €125 million of grants to 2013, 
was launched during the EU–LAC Summit 
in May. Its aim is to mobilise additional 
fi nancing for investment projects on 
interconnectivity, energy infrastructure, 
transport, environment, climate change, 
social services infrastructure and private 
sector development, in particular SMEs. 
It combines EU grants with loans from 
multilateral or bilateral public European 
development fi nance institutions and 
regional Latin American development 
banks. The facility is expected to generate 
infrastructure investments of more 
than €3 billion.

Trade  is  a  major  factor  in  the  EU’s  relations  with  developing  countries. 

The EU gives these countries unparalleled preferential access to its markets. This is 

done in part through the General System of Preferences, a trade arrangement 

allowing reduced tariff s for goods from 176 developing countries and territories. 

A public consultation during the year on future adaptations of this system was 

accompanied by a proposal to roll over the current scheme for up to two years 

to allow the European Parliament suffi  cient time to examine the new proposal to 

be tabled by the Commission early in 2011.

The  development  of  economic  partnership  agreements  is  the  cornerstone  of 

the EU’s trade and development partnership with ACP countries. Negotiations 

continued for all the African regions as well as the Pacifi c. They are most advanced 

with the Southern African Development Community. The Commission ensures 

proper implementation of those agreements which have already been fi nalised, 

for example in the Caribbean or Papua New Guinea. For interim agreements that 

have gone beyond initialling or signing, the process is to ensure consistency in 

diff erent trade regimes, and to guarantee EU–ACP trade relations are on sound 

legal ground.

EU  external  assistance  delivers  results  through  cooperation  with 

local 

communities and governments. The Commission strives to make the most effi  cient 

and eff ective use of taxpayers’ money. But in changing times, it is necessary to 

ensure that development policy continues to be eff ective. Accordingly, a further 

consultation was launched in October on how EU development policy should 

adapt and evolve.

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Sub-Saharan Africa continues to be the 
region in the world where the EU has its 
most important humanitarian projects. 
Here, a refugee camp in Burundi.

108

 
 
 
 
 
 
ENDNOTES

(1)  Council decision of 26 July 2010 concerning restrictive measures against Iran 

(19)  Commission communication — Trade, growth and world aff airs: Trade policy as a core 

(2010/413/CFSP) (OJ L 195, 27.7.2010).

component of the EU’s 2020 strategy (COM(2010) 612).

(2)  Council decision establishing the organisation and functioning of the European 

(20)  Commission communication — Towards a comprehensive European international 

External Action Service (2010/427/EU) (OJ L 201, 3.8.2010).

investment policy (COM(2010) 343).

(3)  EU–US Summit joint statement (http://www.consilium.europa.eu/uedocs/cms_data/

(21)  Commission opinion on Iceland’s application for membership of the European Union 

docs/pressdata/EN/foraff /117897.pdf ).

(COM(2010) 62).

(4)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/371 

(22)  Commission communication — Kosovo — Fulfi lling its European Perspective 

(5) 

Joint statement on the Partnership for Modernisation
(http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/er/114747.pdf).

(6)  EU–Canada Summit conclusions (http://www.consilium.europa.eu/uedocs/cms_data/

docs/pressdata/en/er/114195.pdf ).

(7) 

Joint statement following the EU–Japan Summit
(http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/er/114063.pdf).

(COM(2009) 534).

(23)  Commission communication — Taking stock of the European neighbourhood policy 

(COM(2010) 207).

(24) 

In Sopot, Poland, and in Brussels.

(25)  Eurobarometer, August: ‘79 % think it is important that the EU funds humanitarian aid 

outside its borders.’

(8)  Framework agreement between the European Union and its Member States and the 

(26)  Commission communication — Towards a stronger European disaster response: 

Republic of Korea
(http://www.eeas.europa.eu/korea_south/docs/framework_agreement_fi nal_en.pdf ).

The role of civil protection and humanitarian assistance (COM(2010) 600).

(27)  Commission staff  working document — More and better education in developing 

(9)  Fourth EU–Central America Summit joint communiqué 

countries (SEC(2010) 121).

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/er/114558.pdf).

(10)  Fourth EU–Brazil Summit joint statement

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/er/115812.pdf).

(11)  Joint executive plan of the strategic partnership 

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/er/114467.pdf).

(12)  http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1282&format=HTML

&aged=0&language=en 

(13)  Presidency conclusions of the European Council, 12 October 2010 

(http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/116547.pdf).

(14)  http://www.eunavfor.eu/

(28)  Commission staff  working document — EU plan of action on gender equality and 

women’s empowerment in development 2010–15 (SEC(2010) 265).

(29)  Commission communication — Tax and development: Cooperating with developing 

countries on promoting good governance in tax matters (COM(2010) 163).

(30)  Commission communication — The EU role in global health (COM(2010) 128).

(31)  Commission communication — A 12-point EU action plan in support of the 

millennium development goals (COM(2010) 159).

(32)  Commission communication — An EU policy framework to assist developing countries 

in addressing food security challenges (COM(2010) 127).

(33)  Commission staff  working document — Policy coherence for development work 

(15)  Agreed at the Second Ministerial Conference on Piracy in Mauritius, 7 October 2010.

programme 2010–13 (SEC(2010) 421).

(16)  Under UNSCR 1244/1999.

(17)  Council note — Toolkit to promote and protect the enjoyment of all human rights 

by lesbian, gay, bisexual and transgender (LGBT) people, 17 June 2010 (http://www.
consilium.europa.eu/uedocs/cmsUpload/st11179.en10.pdf ).

(18)  Adopted by the Council Working Group on Human Rights on 9 June 2010, and the 

Political and Security Committee on 18 June 2010. 

(34)  Commission communication — The consolidation of EU–Africa relations — 
1.5 billion people, 80 countries, two continents, one future (COM(2010) 634).

(35)  Council decision on the signing, on behalf of the European Union, of the agreement 
amending for the second time the Partnership Agreement between the members of 
the African, Caribbean and Pacifi c Group of States and the European Community and 
its Member States (2010/648/EU) (OJ L 287, 4.11.2010).

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CHAPTER 5
MAKING THE EU MORE DEMOCRATIC, 
EFFICIENT AND ACCOUNTABLE

The Treaty of Lisbon — in force since December 2009 — had 

an immediate impact on the work of the EU institutions in 

2010. The focus of the Treaty of Lisbon is on delivering results 

to EU citizens through more streamlined and democratic 

decision-making. It reinforces the role of the European 

Parliament in shaping Europe. Parliament has new 

co-legislative responsibilities, which has enhanced its capacity 

to make decisions that have an impact on the daily lives, and 

to safeguard the rights of citizens. The Parliament has gained 

co-decision powers for 50 additional fields of legislation, 

giving it equal rights with the Council in agriculture, 

energy security, immigration, justice and home affairs, 

health and Structural Funds. For the EU budget, the treaty 

puts Parliament on an equal footing with the Council in 

deciding all EU expenditure and simplifies the decision-

making procedure. At the same time, the treaty extended the 

use of qualified-majority voting in the Council to new areas, 

ensuring a more efficient decision-making process.

Better policy planning and improved screening of legislation 

is under way. Each institution has been fine-tuning the way 

legislation is prepared to maximise its efficiency and ensure 

the best use of resources. Numerous efforts to simplify 

EU rules and procedures are being undertaken to make 

their operation more transparent, to reduce unnecessary 

administrative burdens and to involve national parliaments 

and stakeholders more closely in the policy-making process.

New legislation is now routinely preceded by assessments 

of socioeconomic and fundamental rights impact as well 

as long-term viability. Existing legislation is checked for 

fitness of purpose. And legislation is introduced or modified 

to make many of the EU’s own operations and those of its 

Member States more efficient — in everything from tax 

collection to transport. Progress has also been made with a 

view to enhancing transparency in fund management and 

working procedures.

I M P L E M E N TAT I O N O F T H E L I S B O N T R E AT Y

The EU governance has further evolved with the coming into force 
on  1  December  2009  of  the  Treaty  of  Lisbon.  This  has  provided 
many  opportunities  for  making  the  EU  more  efficient,  democratic 
and  accountable  —  ranging  from  a  new  degree  of  collaboration 
in  economic  governance  to  closer  cooperation  in  tackling  climate 
change,  energy  security,  justice,  immigration  or  organised  crime. 
Many  of  these  opportunities  were  rapidly  taken  advantage  of 
during the year — as earlier chapters of this report have indicated.

Among the changes introduced by the Treaty of Lisbon, the European Parliament, 

the Council, and the European Commission have retuned the relations between 

themselves  and  with  the  Member  States,  so  that  full  benefi t  can  be  derived 

from the new arrangements under the treaty. With a President of the European 

Council now in place, the role of the six-month rotating Council Presidency has 

been modifi ed. This required a new form of cooperation from Spain, the holder 

of the rotating Presidency in the fi rst half of the year, and from Belgium, which 

followed in the second semester, in the adjustments they made to their working 

methods  to  take  account  of  the  new  arrangements. The  Parliament  exercised 

the  powers  it  acquired  —  notably  on  international  agreements  —  shaping, 

for instance, the fi nal form of the deal that the Council had initially negotiated 

on  transferring  European  fi nancial  data  to  the  United  States  in  the  context  of 

terrorist investigations.

The  new  President  of  the  European  Council,  Herman  Van  Rompuy,  played  a 

key  role  in  discussions  on  a  new  architecture  for  economic  convergence  and 

the Commission made use of its own authorities. For instance the Commission 

proposed mechanisms for strengthened coordination among Member States on 

economic governance, and it reinforced the links with national parliaments — 

to which the Treaty of Lisbon granted additional importance. 

Arrangements for setting the EU budget have also been modifi ed by the Lisbon 

Treaty.  The  Commission  proposed  the  necessary  changes  to  the  fi nancial 

regulation applicable to the Union’s general budget and tabled a proposal for 

the multiannual fi nancial framework regulation and for a new interinstitutional 

agreement on budgetary cooperation, transposing the provisions of the current 

interinstitutional  agreement  on  budgetary  discipline  and  sound  fi nancial 

management, in line with the Lisbon Treaty requirements. 

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President of the European Council, Herman 
Van Rompuy (right), and President of 
the European Commission, José Manuel 
Barroso, now routinely provide joint press 
conferences at the close of European 
Councils, as here in October.

 
 
 
 
The work in creating the European External Action Service (EEAS), which became 

fully active as of 2011 (see Chapter 4, ‘The EU in the world’), also required a new 

fi nancial regulation and staff  rules (1), and new institutional mechanisms, since 

EU  money  that  the  EEAS  spends  must  be  subject  to  the  same  strict  rules  and 

wide-ranging controls that apply to all the institutions. 

The Lisbon Treaty also modifi ed the way the EU reaches decisions on many day-

to-day  issues,  such  as  product  authorisations  or  agricultural  market  regulations. 

The mechanisms have been clarifi ed for delegating powers to the Commission to 

take these decisions, previously the ‘comitology procedure’. In line with the treaty, 

a  distinction  has  been  made  in  the  supervision  mechanisms  for  quasi-legislative 

measures,  which  are  referred  to  as  ‘delegated (2)  acts’,  and  straightforward 

implementing  measures,  or 

‘implementing (3)  acts’.  For  delegated  acts (4), 

the  Commission  is  under  the  control  (ex  post)  of  the  European  Parliament  and 

Council, while for implementing acts, the control is carried out by Member States (5). 

T H E  E U I N S T I T U T I O N S

The  Parliament  has  exercised  its  new  legislative  powers,  and 
had  an  enhanced  say  in  other  areas  —  notably  on  international 
negotiations,  on  the  EU’s  future  financing  arrangements,  and  on 
the EEAS. The rotating Presidency of the Council has had to adapt 
so that it works constructively with a newly empowered Parliament 
and  a  President  of  the  European  Council,  who  has  given  renewed 
impetus to deal brokering. And at the current juncture of economic 
and financial turmoil the new Commission has continued to play an 
invaluable  role  in  fleshing  out  proposals  for  exiting  the  economic 
crisis and promoting growth.

THE EUROPEAN PARLIAMENT
The European Parliament played its now-established role in the hearings for the 

Commissioners-designate of the Barroso II Commission in January — securing the 

replacement of one of the candidates: Bulgaria withdrew its initial candidate for 

Commissioner, and nominated another candidate. Following this, the Parliament 

endorsed the appointment of the new Commission on 9 February by 488 votes 

to 137, with 72 abstentions.

A  resolution  on  the  consequences  for  interinstitutional  decision-making  of  the 

Lisbon  Treaty  was  adopted  in  May.  In  the  same  month,  Parliament  opted  for  a 

pragmatic approach to its future composition to incorporate the additional 18 MEPs 

allowed for by the Lisbon Treaty (6). The necessary minor change to the treaty was 

made in a short Intergovernmental Conference on 23 June. Member States are now 

ratifying this modifi cation so that the new MEPs can take up their functions. 

During  2010,  Parliament  took  several  measures  to  adapt  to  the  Lisbon  Treaty 

and to the evolving interinstitutional context. It updated the rules of procedure 

concerning  parliamentary  questions  and  delegated  powers.  Also,  a  new  special 

committee (‘SURE’) was set up in July with a 12-month mandate, to help defi ne 

Parliament’s  priorities  for  the  post-2013  multiannual  fi nancial  framework. 

The committee will report before the Commission makes its proposals in July 2011.

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The Treaty of Lisbon has reinforced 
the role of the European Parliament 
(President Jerzy Buzek in the photo) 
through new co-legislative responsibilities.

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‘We need more than ever to access 
the collective power of the Union as 
a whole so that we can address the 
central challenges of our time. This is 
our joint responsibility.’ Jerzy Buzek, 
European Council, 16 December

The  European  Parliament  also  further  developed  its  links  with  national 

parliaments,  modifying  its  rules  of  procedure  accordingly  in  June.  Inter-

parliamentary  meetings  throughout  the  year  brought  committees  together 

with their counterparts from national parliaments to discuss the Lisbon Treaty’s 

practical implications for EU policy.

In  October,  Parliament’s  President  Buzek  delivered  a  Presidency  mid-term 

address, identifying eight priority areas where action is needed (fi nancial crisis, 

solidarity,  energy  security  and  environmental  protection,  external  action, 

human  rights,  women’s  rights,  institutional  reform  and  budget),  stressing  the 

need for innovative, non-traditional solutions to face the challenges of the future.

PROJECT EUROPE 2030 
At  the  same  time  as  the  EU  dealt  with  immediate  concerns  of  democratic 

accountability and increased effi  ciency, it also recognised the importance of a 

longer-term perspective. In May, it took delivery of the González report ‘Project 

Europe  2030’,  commissioned  by  the  European  Council  in  2008  to  provide  a 

challenging  vision  of  the  next  20  years.  Under  the  chairmanship  of  former 

Spanish Prime Minister Felipe González, a refl ection group of senior European 

thinkers produced recommendations that ranged from education to energy, and 

from labour market reform to tax coordination. EU leaders at the June summit 

expressed their appreciation for the work, noting that it will ‘provide useful input 

for the European Union’s work in the future’.

THE EUROPEAN COUNCIL 
On the initiative of its President Van Rompuy, the European Council met six times 

during the year. President Van Rompuy has started identifying concrete topics 

well in advance of the European Council meetings in order to allow for better 

preparation for discussions. 

Immediately  after  the  June  EU  summit,  Herman  Van  Rompuy  went  to  the 

European  Parliament  for  a  discussion  with  EP  President  Jerzy  Buzek  and  the 

Conference of Presidents — in what was a fi rst. He also debated the outcome 

of the European Council meeting with the whole Parliament at a special plenary 

session days later, in what has since become a regular post-summit feature.

THE COUNCIL 
The  rotating  Presidency  of  the  Council  has  had  to  adapt  so  that  it  works 

constructively with a newly empowered Parliament and a permanent President 

of the European Council. It was necessary for Spain and Belgium, the holders of 

the  rotating  Presidency,  to  establish  their  roles  in  a  new  institutional  context, 

between the new players — the President of the European Council and the High 

Representative of the Union for Foreign Aff airs and Security Policy — and the 

increase in the European Parliament’s power as full European co-legislator.

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In what is a fi rst in interinstitutional 
cooperation, the President of the European 
Council, Herman Van Rompuy, regularly 
addresses the plenary session of the 
European Parliament after each European 
Council (here at Parliament’s seat in 
Strasbourg). 

 
 
 
 
Council confi gurations

The European Council modifi ed the list of Council confi gurations to refl ect the 
changes made by the Treaty of Lisbon, with a view to incorporating space policy 
in  the ‘Competitiveness  (internal  market,  industry  and  research)’  confi guration 
and  policy  on  sport  in  the  ‘Education,  youth  and  culture’  confi guration. 
Consequently, the names of the Council confi gurations will from now on be as 
follows: 

(cid:23)General aff airs; 

(cid:23)Foreign aff airs; 

(cid:23)Economic and fi nancial aff airs (including the budget);

(cid:23)Justice and home aff airs (including civil protection); 

(cid:23)Employment, social policy, health and consumer aff airs; 

(cid:23)Competitiveness  (internal  market,  industry,  research  and  space,  including 

tourism); 

(cid:23)Transport, telecommunications and energy; 

(cid:23)Agriculture and fi sheries; 

(cid:23)Environment; 

(cid:23)Education, youth, culture and sport (including audiovisual).

THE EUROPEAN COMMISSION
In  2010  the  new  Barroso  II  Commission  formally  took  offi  ce  following  the 

hearings  of  the  Members  of  the  College  by  Parliament  and  its  appointment 

by  the  Council.  In  the  current  context  of  economic  and  fi nancial  turmoil  the 

Commission has continued to play an important role in fl eshing out proposals 

for exiting the economic crisis and promoting growth. At the end of the year it 

adopted proposals which will serve to launch the debate on the future budget 

review, which will condition the way in which the Union revenue will be fi xed. 

Likewise, the Commission has continued to improve the legislative framework 

by  further  working  on  the  simplifi cation  of  existing  legislation  and  making 

signifi cant  progress  in  reducing  administrative  burdens  and  assisting  Member 

States in the transposition of EU law. 

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The European Commission 2010–14 at the 
European Parliament in Strasbourg.

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The President and Members of the European 
Commission take an oath before the 
Court of Justice of the European Union 
on 3 May 2010.

In  May  2010  all  Members  of  the  European  Commission  gave  a  solemn 

undertaking, before the Court of Justice of the European Union, to respect their 

obligations under the EU treaties. Being the fi rst Commission that works under 

the new Treaty of Lisbon, the wording of the solemn undertaking was adapted 

to  the  new  legal  situation  and  included  also  a  reference  to  the  EU  Charter  of 

Fundamental Rights.

In 2010 the Commission again placed great importance on smooth and fruitful 

interinstitutional cooperation. Proof of which is the new framework agreement 

between the Parliament and the Commission (7) which updated and replaced the 

existing agreement from 2005. With the entry into force of the Lisbon Treaty, this 

new agreement is of particular importance, as it defi nes the relations between 

these  two  institutions  after  the  European  Parliament  obtained  strengthened 

powers, especially in the legislative process. 

The new framework agreement between the Parliament 
and the Commission

The agreement sets out rules and a timetable for an intensifi ed and structured 
dialogue  between  the  institutions,  which  allows  Parliament  to  give  important 
input when the Commission is preparing its work programme as its contribution 
to Union programming.

Moreover,  it  confi rms  the  Commission’s  intention  to  conduct  a  review  of  all 
pending  proposals  at  the  beginning  of  the  mandate  of  a  new  Commission, 
so that they can be politically confi rmed or withdrawn, taking due account of 
the opinions expressed by the European Parliament.

It  sets  detailed  rules  for  how  the  Commission  will  inform  Parliament  about 
the  negotiation  and  conclusion  of  international  agreements  and  the  possible 
inclusion of MEPs in the EU delegation as observers in international conferences.

It brings the rules for the protection of confi dential and classifi ed information in 
Parliament up to international standards, making it possible to inform Parliament 
on sensitive subjects — notably international negotiations.

It provides for enhancing the information provided to Parliament in relation to 
the work of national experts advising the Commission.

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The agreement also refl ects the ‘special partnership’ between the Parliament and 

the Commission that President Barroso proposed in late 2009. Even before the 

agreement was concluded, 2010 saw unprecedented cooperation between the 

two institutions — notably through structured dialogue between Commissioners 

and EP committees in the preparation of the Commission work programme for 

2011,  and  through  meetings  between  the  College  of  Commissioners  and  the 

Parliament’s  Conference  of  Committee  Chairs,  and  between  President  Barroso 

and the Conference of Presidents.

Earlier  in  the  year,  President  Barroso  presented  the  Commission  2010  work 

programme  to  the  Parliament  just  six  weeks  after  the  new  Commission 

took  offi  ce (8).  This  introduced  innovations  off ering  the  right  framework  for 

the  institutions  to  build  a  solid  consensus  on  where  Europe  should  focus 

its  attention  —  including  the  fi rst  multiannual  overview  of  possible  future 

initiatives. In line with the principles of smart regulation, all proposals are then 

thoroughly assessed to determine which should go forward, and in what form. 

This is accompanied by a commitment to a constant review of plans year by year, 

a ‘rolling’ approach to enhance the transparency and quality of the Commission’s 

work, while preserving fl exibility to react to unforeseen developments. 

During  the  year,  President  Barroso  regularly  took  part  in  the ‘question  hours’ 

introduced in 2009 in Parliament’s plenary agenda. 

In  September  2010  he  presented  there  the  EU’s  fi rst  ever ‘State  of  the  Union’ 

address (9), which he indicated would be a regular annual occasion to chart the 

EU’s  work  for  the  following  year  and  beyond. This  listed  the  major  upcoming 

challenges: 

(cid:23)dealing with the economic crisis and governance; 

(cid:23)restoring growth for jobs by accelerating the Europe 2020 reform agenda; 

(cid:23)building an area of freedom, justice and security; 

(cid:23)launching negotiations for a modern EU budget; 

(cid:23)ensuring that the EU exerts its infl uence to the full on the global stage.

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The European Commission  and the 
European Parliament have established 
a new partnership through the updated 
framework agreement. Here President 
Barroso addresses the plenary session of the 
European Parliament in Strasbourg. 

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These  political  priorities  are  refl ected  in  the  Commission’s  work  programme 

for  2011 (10),  which  was  presented  to  the  plenary  in  November  by  President 

Barroso. He underlined its innovative institutional features and encouraged the 

Parliament and Council to engage in trilateral discussions on how to implement 

the  treaty  provisions  on  Union  programming.  The  Commission  invited  the 

other institutions to give priority to urgent proposals in fi nancial regulation and 

economic governance. The October European Council agreed on the proposal 

of  the  Commission  to  anticipate  and  ‘fast-track’  the  proposals  on  enhanced 

economic governance.

To  respond  to  the  pressing  demands  in  policy-making  in  energy  security  and 

climate  change,  President  Barroso  appointed  a  commissioner  responsible 

for  climate  action  —  alongside  commissioners  for  environment  and  for 

energy, and created two new directorates-general, one for energy and one for 

climate action. The previous combined portfolio for energy and transport was 

transformed into separate DGs and allocated to separate Commissioners. And to 

better respond to the challenges relating to citizens rights, justice and security a 

similar reorganisation was practised between Commissioners and DGs for justice 

on the one hand and for home aff airs on the other. 

THE NATIONAL PARLIAMENTS
Since the start of its term in 2004, the Barroso I Commission showed the great 

importance  it  placed  on  relations  with  national  parliaments,  by  making  the 

defi nition  and  implementation  of  a  genuine  ‘national  parliaments  approach’ 

one  of  its  key  priorities.  In  2006  it  set  up  a  mechanism  for  political  dialogue 

with  the  national  parliaments,  and  began  forwarding  them  new  legislative 

proposals and consultation documents, as well as responding to parliamentary 

opinions. This  resulted  in  around  500  opinions  from  the  national  parliaments 

during the Barroso I Commission, in addition to around 500 meetings between 

Commissioners and national parliaments.

The  year  2010,  however,  was  the  fi rst  in  which  the  Commission  applied  the 

new  Lisbon Treaty  provisions  on  national  parliaments. The  foundation  laid  by 

the Barroso I Commission meant that the positive evolution of this relationship 

and  the  smooth  implementation  of  the  subsidiarity  control  mechanism  were 

notable successes. 

The Barroso II Commission began work during a particularly important phase in 

its relations with national parliaments. The Lisbon Treaty provides for a signifi cant 

increase of the role of national parliaments at EU level and contains a series of 

new rights and obligations, through which national parliaments are enabled to 

assume this new role. The new powers mainly concern: 

(cid:23)the ‘subsidiarity  control  mechanism’,  also  known  as  the ‘yellow  and  orange 

card procedures’. This gives national parliaments the opportunity to force the 

Commission to review a legislative proposal (yellow card if objecting opinions 

reach a third of votes allocated to national parliaments) and also allows the 

legislator to stop the ordinary legislative procedure (orange card if objecting 

opinions reach a majority of votes allocated to national parliaments).

(cid:23)the revision of the treaties (with, for example, a veto right for a single national 

parliament when it comes to invoking the bridging clause (or passerelle).

(cid:23)the area of freedom, security and justice (right to information) (11).

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The  Commission  conducted  a  stocktaking  of  opinions  received  from  national 

parliaments in 2010, and of Commission replies or reactions, in the context both 

of political dialogue and subsidiarity control. In 2010 more than 80 Commission 

proposals had been sent to national parliaments under the subsidiarity control 

mechanism, and some 217 opinions referring to these documents were received, 

of which only 32 were negative.

A  proposal  that  received  particular  attention  from  national  parliaments,  with 

eight  negative,  but  also  several  positive  opinions,  was  the  seasonal  workers 

directive (12). The thresholds for triggering the yellow or orange card procedure 

were, however, far from being reached. 

Overall,  the  subsidiarity  control  mechanism  is  running  smoothly.  National 

parliaments’ opinions continue to focus on the political content of Commission 

proposals  rather  than  on  subsidiarity  issues.  Since  the  treaty  came  into  force, 

the Conference of Community and European Aff airs Committees of Parliaments 

of  the  European  Union  (COSAC)  has  discontinued  its  organised  subsidiarity 

checks on selected Commission proposals; its place has been taken by national 

parliaments, which are cooperating among themselves on an ad hoc basis.

Political dialogue between the Commission and national parliaments

The Commission’s political dialogue with national parliaments allows a broader, 
more  political  exchange  of  views  —  not  limited  to  legislative  proposals  and 
to  subsidiarity.  Under  the  political  dialogue,  the  number  of  opinions  received 
from national parliaments reached a total of almost 400 in 2010, thus increasing 
by over 55 % compared to the previous year. The advantages are multiple: the 
political dialogue improves the process of policy formulation and helps increase 
the  Commission’s  own  horizontal  understanding  of  national  dynamics  and 
processes  in  that  it  brings  the  EU  closer  to  the  citizens.  In  addition,  national 
parliaments can help the Commission to achieve objectives such as ensuring the 
proper transposition of EU law and a better implementation of EU initiatives.

THE COURT OF JUSTICE OF THE EUROPEAN UNION
The  Court  of  Justice  and  the  General  Court  made  important  rulings  and  took 

on board signifi cant cases that have implications for a wide range of activities 

in the EU. 

Some landmark rulings in diff  erent policy fi elds

(cid:23)As to games of chance, the Court of Justice stated that a Member State 
can, under certain circumstances outlined in the judgment, prohibit the 
operation  of  games  of  chance  on  the  Internet. This  prohibition  may,  on 
account  of  the  specifi c  features  associated  with  the  provision  of  online 
games of chance, be regarded as justifi ed by the objective of combating 
fraud and crime (13).

(cid:23)The objective of combating the dangers of gambling has to be pursued in 

a consistent and systematic manner (14).

(cid:23)The  Court  of  Justice  also  ruled  that  legislation  in  France,  Austria  and 
Ireland  fi xing  minimum  retail  prices  for  cigarettes  infringes  European 
Union law (15). 

(cid:23)In the fi eld of sports, the Court of Justice stated that football clubs may 
seek  compensation  for  the  training  of  young  players  whom  they  have 
trained where those players wish to sign their fi rst professional contract 
with a club in another Member State (16). 

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(cid:23)In the trade fi eld, the Court of Justice ruled that products originating in the 
Palestinian territories do not qualify for preferential customs treatment under 
the EC–Israel Agreement (17). 

(cid:23)The Court of Justice also explained the eff ect of the rules governing recognition 
by the Member States of judgments relating to insolvency proceedings, and 
notably specifi ed that after main insolvency proceedings have been opened 
in a Member State, the competent authorities of another Member State are, 
in principle, required to recognise and enforce all the judgments concerning 
those proceedings (18). 

(cid:23)Furthermore,  the  Court  of  Justice  was  asked  for  the  fi rst  time  to  interpret 
the scope of EU legislation on the protection of biotechnological inventions. 
It  stated  that  a  European  patent  can  only  be  relied  on  in  relation  to  an 
invention which actually performs the function for which it is patented and 
thus ruled that Monsanto cannot prohibit the marketing in the EU of soy meal 
containing, in a residual state, a DNA sequence patented by it (19). 

(cid:23)In the fi eld of trademarks, the Court of Justice ruled that Google did not infringe 
trademark law by allowing advertisers to purchase keywords corresponding 
to their competitors’ trademarks (20).

(cid:23)The  General  Court  delivered  its  fi rst  judgment  on  the  Community  design 
and  annulled  OHIM’s  decision  to  dismiss  an  application  for  a  declaration  of 
invalidity against PepsiCo’s design for the shape of a ‘rapper’ (21).

(cid:23)On access to documents of the Union institutions, the Court of Justice specifi ed 
the conditions in which a request for access can be rejected, either for reasons 
related to protection of personal data (22) or to the protection of the integrity 
of  the  state  aid  investigations (23)  and  Court  proceedings (24).  On  publication 
of  personal  data,  it  clarifi ed  the  conditions  to  be  respected  when  adopting 
legislation imposing such publication (25).

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The members of the Court of Justice 
in Luxembourg.

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THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE
In the light of the Lisbon Treaty, the role of the European Economic and Social 

Committee  (EESC)  has  also  increased,  through  the  inclusion  of  a  horizontal 

clause on the social impact of European policies, new rules on services of general 

interest,  and  a  stronger  external  role  of  the  EU  in  general.  A  new  Committee 

was  appointed  in  October,  and  elected  its  new  President,  Staff an  Nilsson  of 

Sweden. Its work also focused on the economic and social crisis, on its Europe 

2020  strategy  observatory,  on  participatory  democracy  and  on  the  European 

Integration Forum, co-organised with the European Commission.

The new President of the European 
Economic and Social Committee, 
Staff an Nilsson, addresses a plenary session 
of the Committee in Brussels.

The new President of the Committee of 
Regions, Mercedes Bresso,  pictured during a 
meeting of the Extraordinary Bureau of the 
Committee in Antwerp.

THE COMMITTEE OF THE REGIONS
The Treaty of Lisbon enhanced the powers of the Committee of the Regions by 

giving  it,  for  the  fi rst  time,  the  powers  to  challenge  at  the  Court  of  Justice  of 

the European Union new EU laws it considers to be in breach of the subsidiarity 

principle.  A  new  Committee  was  appointed  in  February,  and  elected  its  new 

President,  Mercedes  Bresso  of  Italy.  During  the  year  it  organised  events  with 

Commission  President  Barroso  and  individual  commissioners,  and  a  start  was 

made to revising the protocol of cooperation with the Commission.

121

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The re-elected European Ombudsman,  
P. Nikiforos Diamandouros, gives 
a news conference to present his annual 
report 2009 at the European Parliament 
in Brussels.

THE EUROPEAN OMBUDSMAN
The Parliament re-elected P. Nikiforos Diamandouros as European Ombudsman 

in January. Complaints he dealt with included access to documents, management 

of  complaints  concerning  infringements  of  EU  law,  staff   matters  and  issues 

relating  to  subsidies  or  service  contracts.  One  special  report  concerning  the 

Commission  was  sent  to  the  European  Parliament  in  2010.  The  Commission 

adopted in June its annual evaluation report on relations with the Ombudsman 

and on the functioning of the internal procedure for replying to the European 

Ombudsman.

OTHER INSTITUTIONS
Other institutions also developed during the year. At the European Central Bank 

(ECB), a new Vice-President was appointed, and the Bank set up a Directorate-

General for Financial Stability. It also made preparations for hosting the secretariat 

of  the  European  Systemic  Risk  Board.  Most  important,  the  ECB  contributed 

to  the  EU  measures  to  stabilise  the  euro,  notably  with  the  securities  market 

programme decided by the ECB’s Governing Council on 10 May. Priorities in the 

European  Court  of  Auditors’  2010  work  programme  included  the  multiannual 

nature of much EU expenditure, including fl at-rate corrections and recoveries, 

innovation and the internal market, human capital, sustainable energy, and the 

Commission’s strategy for simplifying the regulatory framework for business and 

citizens.  It  identifi ed  the  advent  of  a  new  Parliament,  a  new  treaty  and  a  new 

Commission as bringing opportunities for improving the fi nancial management 

of the EU, and it worked during the year to help the principal actors responsible 

for the management and supervision of EU funds to seize these opportunities 

for change.

AGENCIES
Four  new  agencies  were  created  in  the  course  of  the  year  —  the  European 

Asylum Support Offi  ce, the European Banking Authority, the European Securities 

and Markets Authority and the European Insurance and Occupational Pensions 

Authority.  The  Interinstitutional  Working  Group  on  Regulatory  Agencies,  set 

up  in  2009  with  the  aim  to  fi nd  common  ground  between  the  Parliament, 

the Council and the Commission on how to improve agencies’ work, continued 

its  activities  in  2010.  In  May,  it  agreed  a  roadmap  for  the  work  ahead.  In  its 

November  meeting,  the  group  endorsed  the  work  accomplished  so  far  at 

technical level and had a fi rst orientation debate on future work.

122

 
 
 
 
E F F I C I E N C Y   A N D  T R A N S PA R E N C Y

The  EU  has  continued  simplifying  existing  legislation  and  making 
proposals  that  reduce  the  administrative  burden  it  imposes. 
Moreover,  to  ensure  that  new  legislation  and  policies  are  of  the 
highest  standard,  an  impact  assessment  of  all  major  initiatives  is 
systematically carried out. Management and control of EU finances 
and transparency mechanisms have been further improved. 

SMART REGULATION
The Commission’s better regulation agenda has led to signifi cant improvements 

in policy-making at EU and national level. The design of new legislation builds on 

views from stakeholders and evidence gathered through wide consultations and 

subjected  to  an  impact  assessment  process  that  has  been  externally  assessed 

as  eff ectively  raising  the  quality  of  proposals.  In  parallel,  the  Commission  has 

carried  out  a  thorough  simplifi cation  of  existing  legislation  and  has  made 

signifi cant  progress  in  reducing  administrative  burdens  and  assisting  Member 

SIMPLIFYING VAT INVOICING

The Council adopted a directive aimed at 
simplifying VAT invoicing requirements, 
in particular as regards electronic 
invoicing (28). Tax authorities must now 
accept e-invoices under the same 
conditions as paper invoices, and to 
remove legal obstacles to the transmission 
and storage of e-invoices.

States in the transposition of EU law. 

Ensuring  a  high-quality  regulatory  framework (26)  for  citizens  and  businesses 

ANTITRUST PROCEDURES MADE CLEARER

The European Commission has published 
a detailed account of how antitrust 
procedures work in practice in order to 
further enhance the transparency and the 
predictability of Commission proceedings.

is a shared responsibility for all EU institutions and the Member States. Such a 

framework is necessary for achieving the objectives of the Europe 2020 strategy 

for smart, sustainable and inclusive growth (see Chapter 1 for more details).

One of the Commission’s duties is to ensure that policies at EU level are decided 

in a way that is evidence-based and proportionate, transparent and accountable. 

Besides, it has, through its ‘Better regulation’ agenda, made signifi cant changes 

over the last fi ve years: 

(cid:23)public consultations and impact assessment are now the norm for Commission 

initiatives; 

(cid:23)EU rules are being simplifi ed; 

(cid:23)administrative burdens for businesses are being reduced. 

Building on these achievements, the Commission has now taken a further step: 

LESS RED TAPE FOR SHORTSEA SHIPPING 

a communication on smart regulation in the EU was adopted in October, setting 

out  actions  to  further  improve  the  quality  and  relevance  of  EU  legislation (27). 

In particular, the Commission will attach greater importance to the evaluation 

of  existing  legislation  and  policies.  The  resulting  evidence  will  be  put  at  the 

heart  of  the  design  of  new  or  revised  regulation  when  preparing  impact 

assessments. At the same time, the Commission will continue to work with the 

European  Parliament,  the  Council,  the  Member  States  and  other  stakeholders, 

and encourage them to pursue actively the ‘Smart regulation’ agenda. The voice 

of citizens and stakeholders will also be further strengthened by prolonging the 

consultation period from 8 to 12 weeks from 2012 onwards.

Administrative procedures were simplifi ed 
for short-sea shipping, notably the new 
customs regulation and port formalities 
directive, in line with the action plan (29) 
on establishing a European maritime 
transport space without barriers. 
Further elements, including a single 
window for administrative procedures, 
the facilitation of third country calls and 
advanced electronic communication and 
information systems (‘e-Maritime’) are 
being pursued. This would off er potential 
savings of €75 million for the 1.7 million 
vessels that call at the main EU ports 
every year.

123

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MANAGING THE QUALIT Y OF LEGISLATION THROUGHOUT THE POLIC Y C YCLE

Simplification and administrative burden reduction
The  EU  is  attached  to  simplifying  existing  legislation,  and  making  proposals 

that  reduce  the  administrative  burden  it  imposes.  During  the  year,  the 

Commission  made  proposals  that,  if  adopted  by  the  Parliament  and  Council, 

could cut administrative costs by 31 % — way beyond the initially agreed 25 % 

target.  The  Commission  work  programme  for  2010  renewed  the  multiannual 

simplifi cation  rolling  programme  with  a  list  of  46  proposals  for  2010–12, 

ranging across industrial policy, energy and transport, agriculture and fi sheries, 

employment and social aff airs, justice and home aff airs, public health, taxation 

and  statistics. The  Commission  work  programme  for  2011  updated  the  list  of 

simplifi cation initiatives and withdrawn proposals.

IMPROVED TECHNIQUES FOR 
TOURISM STATISTICS 

The  Commission  continued  to  be  supported  by  the  High-Level  Group  of 

Independent  Stakeholders  on  Administrative  Burdens,  chaired  by  Edmund 

Member States will be allowed to use 
estimation techniques instead of surveys 
for compiling tourism statistics. 

EASIER ACCESS TO EU FUNDS

In May, a Commission review of rules for 
access to EU funds resulted in cuts in red 
tape and lower costs for benefi ciaries, 
as well as more scope for combining 
public and private funding for a bigger 
investment impact.

IMPROVING CASH FLOW IN COMMERCIAL 
TRANSACTIONS

The directive on late payments in 
commercial transactions, approved 
in October, improves the cash fl ow of 
European business, and helps eliminate 
barriers to cross-border commercial 
transactions. It aims at establishing, as a 
general rule, a 30-day limit for payment 
of invoices in commercial transactions 
between undertakings. 

Stoiber, the former Minister-President of Bavaria. 

The  Commission  proposed  a  recast  of  the  Brussels  I  regulation  on  jurisdiction 

and  the  recognition  of  enforcement  of  judgments  in  civil  and  commercial 

matters simplifying cross-border litigation and enhancing access to EU courts. 

The proposed new rules will minimise the length and costs of enforcing foreign 

judgments and ensure equal access to courts in the Member States. 

In  April,  the  Commission  adopted  a  communication  with  options  to  simplify 

the  management  of  research  framework  programmes,  to  make  them  more 

transparent and attractive to the best researchers in the world and to the most 

innovative companies, and in particular the smaller ones (30). The Communication 

triggered an intensive debate with the Parliament and Council and with many 

other  stakeholders.  Consensus  is  building  up  on  a  number  of  short-term 

measures that can be implemented by the Commission under the current legal 

and regulatory framework, such as further developing the ‘Research participant’ 

portal, optimising the structure and timing of calls and better adapting the size 

of  consortiums,  introducing  more  fl exibility  for  the  use  of  average  personnel 

costs or for the rules on interest on pre-fi nancing. 

Evaluation of existing legislation and impact assessment
At  the  same  time,  in  2010  the  Commission  started  to  systematically  evaluate 

existing legislation ex post, indicating that all major existing policy instruments, 

whether expenditure programmes or regulatory measures should be evaluated 

on  a  regular  basis.  This  is  essential  to  ensure  that  regulatory  measures  form 

a  coherent  framework  and  deliver  eff ectively  on  their  objectives.  It  began 

reviewing  the  entire  body  of  legislation  in  selected  policy  fi elds  to  identify 

potential overlaps, gaps, inconsistencies and obsolete measures, through ‘fi tness 

checks’. Pilot exercises started in 2010 in environment, transport, employment 

and social aff airs, and industrial policy.

124

To  ensure  that  new  legislation  and  policies  are  of  the  highest  standard,  the 

Commission  has  also  put  in  place  a  wide-ranging  and  ambitious  impact 

assessment system of its major initiatives.

The purpose of this impact assessment system is to prepare evidence for political 

decision-making, and to ensure that all relevant policy options are considered. 

Impact assessment reports are published alongside major proposals to explain 

the justifi cation and evidence-base behind them.

In September, a European Court of Auditors’ report on the Commission’s impact 

assessment system (31) confi rmed that it is of real value to EU decision-makers, 

is eff ective in raising the quality of proposals, and represents international best 

practice in its transparency and its integrated approach.

The  Commission  will  continue  to  strengthen  the  eff ectiveness  of  the  system, 

encouraged  by  the  Court’s  recommendations.  An  important  step  has  already 

been  taken  with  the  publication  on  the  Europa  website  of ‘roadmaps’  for  all 

initiatives  with  signifi cant  impacts,  outlining  what  analysis  has  already  been 

made  and  what  is  planned.  This  has  helped  to  improve  the  transparency  of 

impact  assessment  work  and  facilitate  the  stakeholders’  engagement  at  early 

stages of the policy preparation (32).

A  key  element  of  the  system  is  the  independent  Impact  Assessment  Board, 

which  continued  to  ensure  that  impact  assessments  conform  to  quality  and 

procedure standards. It issued 83 opinions on the quality of Commission impact 

assessments  and  provided  concrete  recommendations  for 

improvement. 

The  board  has  been  recognised  by  the  European  Court  of  Auditors  as  raising 

the quality of impact assessments. In 2010, some 66 impact assessments were 

carried out for major policy initiatives.

IMPROVING THE IMPLEMENTATION OF EU LEGISLATION
Work  continued  on  improving  the  way  that  Member  States  apply  EU  law.  In 

March,  the  Commission  issued  an  evaluation  report  on  the  functioning  of 

‘EU pilot’ — the method introduced to improve responses to citizens and business 

on the application of EU law and to obtain earlier resolution of infringements 

of EU law. For instance, Commission services worked together with Germany to 

ensure that an important construction project did not have a negative impact 

on protected species in the area, and with the United Kingdom to ensure timely 

issue of residence documents for EU citizens and their family members. They also 

worked with Spanish authorities to protect consumers and the designation of 

origin of traditional products. In its report on these activities (33), the Commission 

highlights the full range of recent actions being taken to improve the application 

of EU law.

125

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The  Commission  adopted  a  communication (34)  on  its  policy  to  apply  to  the 

Court  of  Justice  for  the  imposition  of  fi nancial  sanctions  on  Member  States 

for the late transposition of EU directives under Article 260(3) of the Treaty on 

the  Functioning  of  the  European  Union.  In  2010  the  number  of  infringement 

procedures initially launched against Member States for alleged breach in the 

implementation  of  EU  law  amounted  to  1 168  (the  fi gure  represents  the  fi rst 

stage of the procedure when a letter of formal notice is sent according to Article 

258 TFEU). Those policy areas which saw the highest amount of inquiries being 

launched were health and consumer policy, environment, internal market and 

transport, representing over 70 % of the total.

PROTECTION OF THE EU’S FINANCIAL INTERESTS AND FIGHT AGAINST FRAUD
The  Court  of  Auditors’  independent  assessment  for  2009  showed  a  dramatic 

improvement  in  the  management  and  control  of  EU  fi nancial  management 

over previous years. This year, for the fi rst time, the error rate for the budget as 

a whole was below 5 % — a success rate that few national governments could 

boast.  For  Structural  Funds  the  error  rate  more  than  halved  since  2008  and  is 

now close to 5 %. And only 0.2 % of all errors detected imply suspected fraud. 

There is a huge diff erence between irregularities and fraud. Error rates do not 

mean that the amount is lost or wasted. Even when there are errors in fi nancial 

procedures, the money may still have been spent in line with what was intended. 

For example, errors in a tendering procedure for a bridge construction project do 

not mean that the new bridge should be dismantled or that it is of poor quality. 

If errors with fi nancial impact are discovered, undue payments are clawed back 

from the project or country at fault. The report notes that €1.22 billion related 

to irregularities were identifi ed, reported and followed up, but the fi gure does 

not refl ect the situation over a single year. These are irregularities reported by 

Member  States  in  2009,  relating  to  irregularities  which  occurred  over  several 

years, and of this €1.22 billion, €1.09 million involved fraud.

The  EU  exercised  more  effi  cient  control  of  EU  money:  €346.5  million  of  EU 

farm  money  unduly  spent  by  Member  States  was  claimed  back  in  March  as  a 

result of a conformity clearance procedure decision adopted by the European 

Commission,  and  a  further  €265.02  million  in  July.  The  money  had  not  been 

spent  in  compliance  with  EU  rules,  or  had  not  been  adequately  controlled. 

The money returns to the EU budget. 

In  July,  the  Commission  presented  a  refl ection  paper  on  the  reform  of  the 

European Anti-Fraud Offi  ce (OLAF) at the European Parliament, as the basis of an 

interinstitutional dialogue between the Parliament, Council and Commission (35). 

The  outcome  of  this  dialogue  fed  into  a  proposal  which  the  Commission  will 

make in early 2011.

126

In  March,  a  new  system  to  report  corruption  and  fraud  anonymously  via  the 

Internet,  the  Fraud  Notifi cation  System,  made  it  easier  and  more  secure  for 

vigilant citizens and EU civil servants to report suspicious cases to OLAF.

There were also some intense debates over tax evasion during the year. Progress 

on  increased  tax  cooperation  was  made  in  two  areas:  the  Council  reached 

agreement on strengthening mutual assistance between Member States in the 

recovery of taxes (the current recovery ratio is only 5 % of the amounts due) and 

in the assessment and collection of taxes (abolition of bank secrecy in relations 

between tax authorities, eliminating secrecy as grounds for refusal to meet an 

information request). 

In accordance with the G20 guidelines on cooperation with off shore jurisdictions 

against  tax  evasion,  the  Commission  proposed  an  amended  anti-fraud 

agreement  with  Liechtenstein.  This  could  also  serve  as  a  model  for  Monaco, 

Andorra and San Marino and, with respect to Switzerland, as a basis for a new or 

modifi ed agreement, in particular as regards the exchange of information on tax 

matters in line with international standards.

Taking into account the VAT gap varying between €90 billion and €113 billion in 

the period 2000–06, the Commission launched on 1 December a Green Paper on 

the future of VAT so as to have a simpler, more robust and modern VAT system (36).

Finance ministers agreed in June to increase their cooperation against VAT fraud. 

They will do this by creating a permanent anti-fraud network, to be known as 

Eurofi sc.

In  April  a  new  electronic  system  to  monitor  the  movement  of  excise  goods 

—  alcohol,  tobacco  and  energy  products  —  gave  the  EU  new  capacities  for 

combating  fraud.  It  is  estimated  that  about  100  000  traders  dispatch  around 

4.5  million  consignments  of  excise  goods  between  Member  States  each  year. 

The  Excise  Movement  and  Control  System  makes  intra-Community  trade  in 

excise  goods  cheaper  and  simpler  for  operators,  while  also  making  it  quicker 

and easier for Member States to tackle excise fraud. Member State authorities 

and economic operators can join the system progressively until 1 January 2011, 

after which it will be fully applied across Europe. 

127

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BETTER COMMUNICATING EUROPE

Three joint interinstitutional 
communication priorities for 2010 
were: driving the economic recovery 
and mobilising new sources of 
growth; climate action and energy; 
and making the Treaty of Lisbon work 
for citizens. A fi rst report was published, 
under the political declaration of 
‘Communicating Europe in partnership’ 
2008, on cooperation between the 
institutions and Member States in 
communicating on Europe.

A clear writing campaign, launched by 
the Commission in March, encourages the 
writing of shorter, clearer documents with 
less jargon, making them easier to read.

MORE TRANSPARENC Y
A  new  framework  governing  the  creation  and  functioning  of  Commission 

expert groups was adopted with the aim of simplifying and clarifying rules, and 

enhancing  coordination.  In  addition,  in  order  to  improve  transparency,  a  new 

version of the Register of Expert Groups was also set up, providing more accurate 

information on the type of entities listed, the groups’ membership and activities 

carried  out.  And  in  May  the  Parliament  and  Commission  relaunched  work 

towards  a  common  register  and  code  of  conduct  for  lobbyists.  In  October,  an 

ex-Commissioner was required to resign from a UK investment bank’s executive 

board  after  a  European  Commission  ethics  committee  raised  concerns  over 

a possible confl ict of interest — the fi rst time the ethics committee had made 

such a ruling.

In 2010 the European Commission disclosed the identity of those who received 

EU  funds  in  2009  in  policy  areas  including  research,  education  and  culture, 

energy,  transport  and  external  aid.  The  EU’s  online  database  of  benefi ciaries, 

now  containing  more  than  114  000  entries  going  back  to  2007,  has  been 

upgraded to allow more search options. In 2010, for the fi rst time, the database 

provides  information  on  Commission  administrative  expenditure  linked  to 

procurement contracts. Very few public administrations in the world have gone 

so far with fi nancial transparency.

T H E  E U B U D G E T 2011

In  2010  new  procedures  were  applied  for  the  first  time  for  the 
adoption of the EU budget and proposals were also tabled to launch 
the  debate  on  the  future  budget  review,  which  will  condition  the 
way in which the Union revenue will be fixed.

The 2011 budget was approved on 15 December, the fi rst budget under the new 

procedures in place under the Lisbon Treaty. The total budget for 2011 amounts 

to €141.9 billion in commitment appropriations, and €126.5 billion in payment 

appropriations. The Commission tabled a proposal for the revision of its fi nancial 

regulation. Changes, subject to approval by the legislative authority, will simplify 

access  to  EU  funds  by  cutting  red  tape  and  saving  costs  for  EU  benefi ciaries, 

and extend the scope for combining public and private funding to get greater 

investment impact. Cuts in red tape notably concern waiving the obligation to 

pay interest on upfront payments, raising to €50 000 the current €25 000 ceiling 

under which grants can enjoy simpler administrative procedures, and making it 

easier for benefi ciaries to pay project partners.

128

In October the Commission presented the budget review conclusions, with its 

proposals  on  both  expenditure  and  new  revenue  sources  for  the  EU  budget 

post-2013. The main fi ndings are that the current rules for the EU budget make 

it  slow  to  react  to  unforeseen  events  while  too  many  complexities  hinder  its 

effi  ciency  and  transparency. With  public  spending  under  pressure,  it  suggests 

ways to achieve a European budget that is up to the challenges, not necessarily 

through  increased  expenditure,  but  by  focusing  on  the  right  priorities,  added 

value, results and the quality of European spending. On the revenue side, it aims 

to promote a fair and transparent system that is understood by citizens and that 

reduces the EU’s reliance on Member States’ direct contributions by introducing 

new ‘own resources’. Options include: a share of a fi nancial tax; the auctioning of 

EU greenhouse gas emission allowances; an EU charge related to air transport; 

a  separate  EU  VAT  rate;  an  EU  energy  tax;  and  an  EU  corporate  income  tax. 

The  Commission  also  proposed  guaranteeing  EU  bonds  issued  by  project 

promoters to fund big infrastructure projects.

THE EU BUDGET IN 2010 
Sustainable development and innovation at the core 
of the EU budget

WHERE DOES THE MONEY FOR 
THE EU BUDGET COME FROM?  

The EU as a global partner
6 %

Rural development, 
environment, fi sheries
11 %

Total administrative 
expenditure 
6 %

€141.5 billion

Customs duties, 
agricultural duties and 
sugar levies
12 %

Value added 
tax (VAT)-based 
resource
11 %

Cohesion and Competitiveness 
for growth and employment 
45 %

Citizenship, freedom, security and justice
1 %

Agriculture: direct aids and 
market related expenditure 
31 %

Source: European Commission.

Source: European Commission.

Other
1 %

Gross national 
income-based 
resource
76 %

129

G E N E R A L R E P O RT 2010   |   M A K I N G T H E  E U M O R E D E M O C R AT I C, E F F I C I E N T A N D ACCO U N TA B L E

Parliamentary proceedings in 2010

Resolutions and decisions adopted by the European Parliament 

Legislation 

Co-decision

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101

29

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499

(1) In 19 cases the European Parliament amended the Commission proposal.

(2) In 1 case the European Parliament rejected the Commission proposal and in 63 cases it amended the Commission proposal.

(3) In 7 cases the European Parliament amended the Council’s common position. 

130

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ENDNOTES

(1)  Parliament and Council adopted in November the changes to the Staff  Regulations 

(15)  Court of Justice rulings of 4.3.2010 in Case C-197/08 Commission v France, in Case 

and to the fi nancial regulation relating to the EEAS, putting into place the conditions 
under which EU delegations in third countries can use EU funds — Regulations 
(EU, Euratom) No 1080/2010 and (EU, Euratom) No 1081/2010 of the European 
Parliament and of the Council (OJ L 311, 26.11.2010).

(2)  Article 290 of the Treaty on the Functioning of the EU: ‘A legislative act may delegate 
to the Commission the power to adopt non-legislative acts of general application to 
supplement or amend certain non-essential elements of the legislative act’.

C-198/08 Commission v Austria and in Case C-221/08 Commission v Ireland.

(16)  Court of Justice ruling of 16.3.2010 in Case C-325/08 Olympique Lyonnais.

(17)  Court of Justice ruling of 25.2.2010 in Case C-386/08 Brita.

(18)  Court of Justice ruling of 21.1.2010 in Case C-444/07 MG Probud Gdynia.

(19)  Court of Justice ruling of 6.7.2010 in Case C-428/08 Monsanto Technology.

(20)  Court of Justice ruling of 23.3.2010 in Joined Cases C-236/08 to C-238/08 

(3)  Article 291 of the Treaty on the Functioning of the EU:

Google France and Google.

‘1.  Member States shall adopt all measures of national law necessary to implement 

(21)  General Court ruling of 18.3.2010 in Case T-9/07 Grupo Promer Mon Graphic v OHIM.

legally binding Union acts.

2.  Where uniform conditions for implementing legally binding acts are needed, those 

acts shall confer implementing powers on the Commission, or, in duly justifi ed 
specifi c cases and in the cases provided for in Articles 24 and 26 of the Treaty on 
European Union, on the Council.

3.  For the purposes of paragraph 2, the European Parliament and the Council, acting 

by means of regulations in accordance with the ordinary legislative procedure, shall 
lay down in advance the rules and general principles concerning mechanisms for 
control by Member States of the Commission’s exercise of implementing powers.’

(22)  Court of Justice ruling of 29.6.2010 in Case C-28/08 P Commission v Bavarian Lager.

(23)  Court of Justice ruling of 29.6.2010 in Case C-139/07 P Commission v Technische 

Glaswerke Ilmenau.

(24)  Court of Justice ruling of 21.9.2010 in Joined Cases C-514/07 P, C-528/07 P 

and C-532/07 P Sweden and Others v API and Commission.

(25)  Court of Justice ruling of 9.11.2010 in Joined Cases C-92/09 and C-93/09 

Volker und Markus Schecke and Eifert. 

(26)  http://ec.europa.eu/governance/better_regulation/index_en.htm

(4)  Communication from the Commission to the European Parliament and the Council — 
Implementation of Article 290 of the Treaty on the Functioning of the European Union 
(COM(2009) 673 fi nal).

(27)  Commission communication — Smart regulation in the European Union (COM(2010) 

543). 

(28)  Directive 2010/45/EU on the common system of value added tax as regards the rules 

(5)  Commission proposal for a regulation of the European Parliament and the Council 

on invoicing (OJ L 189, 22.7.2010). 

laying down the rules and general principles concerning mechanisms for control by 
Member States of the Commission’s exercise of implementing powers (COM(2010) 83). 
Parliament approved on 16 December.

(6)  Article 14 TEU and Protocol No 36 on transitional provisions.

(7)  OJ L 304, 20.11.2010.

(8)  Commission communication — Commission work programme 2010 — Time to act 

(COM(2010) 135).

(9)  http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/10/411 

(10)  Commission communication — Commission work programme 2011 (COM(2010) 623).

(29)  Commission communication for the establishment of a European maritime transport 

space without barriers (COM(2009) 10 fi nal).

(30)  Commission communication — Simplifying the implementation of the research 

framework programmes (COM(2010) 187).

(31)  Special Report No 3/2010: Impact assessments in the EU institutions: do they support 
decision-making? (http://eca.europa.eu/portal/pls/portal/docs/1/5372733.PDF).

(32)  http://ec.europa.eu/governance/impact/planned_ia/planned_ia_en.htm 

(33)  Annual report on monitoring the application of EU law (COM(2010) 538).

(34)  Commission communication — Implementation of Article 260(3) TFEU (SEC(2010) 

(11)  Article 12 TEU and Article 70 TFEU and Protocol No 1 on the role of national 

1371 fi nal).

parliaments in the European Union.

(12)  Commission proposal for a directive on the conditions of entry and residence of 

third-country nationals for the purposes of seasonal employment (COM(2010) 379).

(13)  Court of Justice rulings of 3.6.2010 in Case C-203/08 Sporting Exchange and in Case 

C-258/08 Ladbrokes Betting & Gaming and Ladbrokes International.

(14)  Court of Justice rulings of 8.9.2010 in Case C-409/06 Winner Wetten, in Joined Cases 

C-316/07, C-358/07 to C-360/07, C-409/07 and C-410/07 Stoß and in Case C-46/08 
Carmen Media Group.

(35)  Commission refl ection paper on the reform of the European Anti-Fraud Offi  ce (OLAF) 

(SEC(2010) 859). 

(36)  Commission Green Paper on the future of VAT (COM(2010) 695).

131

G E N E R A L R E P O RT 2010   |   M A K I N G T H E  E U M O R E D E M O C R AT I C, E F F I C I E N T A N D ACCO U N TA B L E

 
 
 
CHRONOLOGY

The events listed indicate some of the major events from 2010. 

The chronology is not intended to be exhaustive — additional highlights 

are detailed in the report itself.

132

JANUARY

1 
12 

  Spain takes over the rotating Presidency of the 

European Union.

  Earthquake in Haiti. 

Within hours of the disaster the EU provides 

aid for immediate relief activities and sends 

experts to the region. In total, the EU provided 

more than €300 million in humanitarian 

aid and pledged over €1.2 billion for Haiti’s 

reconstruction and long-term development at 

the UN International Donors’ Conference. 

20 
28 

  P. Nikiforos Diamandouros re-elected as 

European Ombudsman. 

  The EU announces new greenhouse gas 

emissions reduction targets for 2020.

FEBRUARY

  The Commission endorses Greece’s plan for 

cutting its budget defi cit.

  The Committee of the Regions takes up a new 

term of offi  ce.

  The European Parliament approves the new 

European Commission ‘Barroso II’ by 488 votes 

to 137 with 72 abstentions.

APRIL

14 

MAY

1 

2 

  The EU gives notice to Greece to remedy its 

excessive defi cit by 2012 and recommends that 

the country bring its economic policies into line 

with the EU’s broad economic policy guidelines.

9 

  An ash cloud over Europe caused by the eruption 

of a volcano in Iceland leads to the closure of 

much of European airspace until 21 April.

An estimated 100 000 fl ights are cancelled, 

leaving around 10 million passengers unable 

to travel. The Commission reminds travellers 

that EU passenger rights continue to apply, and 

sets up a group to help national governments 

coordinate. The crisis accelerates progress 

towards a ‘single European sky’.

  Opening of the World Expo 2010 in Shanghai. 

President Barroso participates in the 

inauguration of the EU pavilion and leads a 

delegation of commissioners meeting with 

Chinese counterparts. The EU–China Science and 

Technology Week is held from 14 to 19 June.

  Euro-area countries and the IMF off er Greece 

€110 billion in emergency loans over three years 

to help the country avoid defaulting on its debt.  

In early 2010, rising government defi cits 

and debt levels spark a crisis of confi dence 

in European sovereign bonds and the euro. 

The market turmoil centres on Greece, 

whose 13.6 % budget defi cit in 2009 was far 

higher than the country had forecast. 

  EU fi nance ministers agree on a €750 billion crisis 

fund to bolster fi nancial markets. 

Consisting mainly of loan guarantees from 

euro-area countries, the fi nancial stabilisation 

mechanism includes a €250 billion contribution 

from the IMF. 

  The EU agrees to grant around 45 000 micro-

loans of up to €25 000 to the unemployed and 

small entrepreneurs. 

The new European Microfi nance Facility has a 

12 

  The Commission proposes a package to 

strengthen the Stability and Growth Pact and 

starting budget of €100 million, to be used over 

extend surveillance.

The proposal sees national budget and policy 

planning being aligned through a ‘European 

semester’, allowing Member States to coordinate 

as they prepare their national budgets and 

reform programmes.

four years (2010–13).

  The target of halting biodiversity loss and 

ecosystem degradation by 2020 is agreed by the 

Council.

  Euro-area leaders agree to create a joint 

fi nancial safety net with the IMF.

Under the agreement, Greece is to receive 

coordinated bilateral loans from other euro-area 

countries as well as funds from the IMF if in 

severe diffi  culty. The move is designed to 

restore confi dence in the euro. 

133

3 
9 

16 

MARCH

8 

15 

25 

 
18 

19 

JUNE

17 

  The Greek government receives €14.5 billion 

from the EU, the fi rst instalment of bilateral 

12 

  The Commission proposes changes to existing 

European rules to improve protection for bank 

loans from 10 euro-area countries.

account holders and retail investors. 

  The Commission adopts a digital agenda for 

Europe — the fi rst of seven fl agship initiatives 

under the Europe 2020 strategy.

  Severe fl oods in Poland.

  Iceland becomes an offi  cial candidate for EU 

membership. 

 The European Council gives the go-ahead to 

Estonia joining the euro area on 1 January 2011.

  The EU adopts the ‘Europe 2020’ strategy, the 

new 10-year plan for spurring growth and 

creating jobs in the EU.

26 

AUGUST

11 

Bank account holders, should their bank fail, 

would receive their money back faster (within 

seven days), increased coverage (up to €100 000) 

and better information on how and when they 

are protected. For investors, the Commission 

proposes faster compensation with higher 

compensation of up to €50 000. 

  The European External Action Service is 

established.

  Pakistan hit by severe fl ooding.

The EU provides €150 million in humanitarian 

aid, while individual Member States provide 

an additional €170 million. Import duties on a 

number of export products from Pakistan are 

also suspended.

30 

  The Commission outlines a toolset to reinforce 

surveillance of fi scal policies, macroeconomic 

policies and structural reforms. 

The ‘European semester’ includes sanctions 

to prevent or correct threats to the fi nancial 

stability of the EU and the euro area. 

JULY

1 

  Belgium takes over the rotating Presidency of 

the European Union.

  New caps on mobile phone roaming charges 

come into eff ect.

  A new logo for all organic EU products comes 

into force.

7 

  The European Parliament approves new capital 

requirements for banks. 

The objective is curbing unsound remuneration 

practices in banks that have led in many cases 

to excessive risk-taking and contributed to 

the fi nancial crisis. Banks must also hold more 

capital to cover their risks.

SEPTEMBER

11 

21 
29 

  Launch of ‘Youth on the move’, a Europe 2020 

fl agship initiative. 

The initiative aims to increase student and 

trainee mobility and raise the quality and 

attractiveness of education and training in 

Europe.

  Gender equality strategy adopted.

  The Commission adopts legislative proposals to 

strengthen and expand tools for coordinating 

economic and fi scal policy. 

The proposals also address macroeconomic 

policies and structural reforms. New 

enforcement mechanisms are foreseen for 

non-compliant Member States. 

134

 
 
 
 
 
OC TOBER

6 

8 

20 

21 
27 

29 

  The Europe 2020 fl agship initiative ‘innovation 

union’ is launched, aiming to speed up the 

development of new products and services.

  A state of emergency is declared in three 

regions of Hungary after toxic sludge from an 

aluminium plant fl oods the area.

  A new Presidency is elected for the 2010–13 

mandate of the European Economic and Social 

Committee.

  The European Parliament honours Guillermo 

Fariñas with the 2010 Sakharov Prize.

  The Commission launches the Single Market Act 

and the Citizenship Report to enhance benefi ts 

of the internal market and remove obstacles 

preventing citizens and businesses from 

exercising their rights.

23 

28 

  The agenda for new skills and jobs is launched 

— a Europe 2020 fl agship initiative to boost 

employment and upgrade skills.

  The EU, ECB and IMF grant Ireland fi nancial 

assistance of €85 billion.

The support comes in response to Ireland’s 

request on 22 November. It is intended to 

safeguard fi nancial stability in the euro area and 

the EU as a whole.  

29 

  29 November to 10 December: 

Cancún Conference on Climate Change.

Negotiations concluded with agreement on key 

issues, including forestry, technology transfer 

and a climate fund to support adaptation and 

mitigation eff orts in the developing world.

DECEMBER

  The Commission launches proposals for new 

industrial policy.

14 

NOVEMBER

9 

  The Commission proposes an assertive trade 

policy agenda for the next fi ve years to help 

revitalise the economy.

12 

  The G20 endorses the Basel III reform.

An EU initiative, this comprehensive set of 

measures aims at strengthening the regulation, 

supervision and risk management of the 

banking sector. It targets regulation, both at the 

level of individual banks and system-wide across 

the sector. 

  A new strategy is launched to secure a 

sustainable EU energy supply.

The Commission plans to propose legislation 

and other measures to cut consumption, 

create a single market by 2015, create a ‘bloc’ 

for bargaining with suppliers, and empower 

consumers.

17 

  The Council and Parliament agree on a 

framework for supervision of the fi nancial 

system and establish the European Systemic 

Risk Board and three new supervisory 

authorities. The new system will be operational 

as from 1 January 2011.

  The Commission proposes enhanced 

cooperation for unitary patent protection in the 

EU. Patents valid in all participating countries 

can be obtained with a single application. 

15 

  The European Parliament approves rules 

regulating credit rating agencies. 

The European Securities and Markets Authority 

will directly supervise agencies. It will be able 

to make dawn raids, impose fi nes and ensure 

agencies evaluate the accuracy of their past 

ratings. It will come into force on approval by 

the Council.

  The European citizens’ initiative is adopted. 

For the fi rst time people can directly suggest 

new EU legislation. If 1 million citizens from at 

least one quarter of Member States join forces, 

they may invite the European Commission to 

draw up legislative proposals in areas where the 

Commission has the power to do so. 

  Launch of the European Platform against 

Poverty and Social Exclusion — a Europe 2020 

fl agship initiative to ensure social and territorial 

cohesion. 

  The European Council agrees on an amendment 

to the treaty to establish a future permanent 

mechanism to safeguard the fi nancial stability 

of the euro area as a whole. 

16 

17 

135

 
 
Getting in touch with the EU

  ONLINE

 Information in all the offi  cial languages of the European Union is available on the Europa website: 

http://europa.eu

  IN PERSON

 All over Europe there are hundreds of local EU information centres. 
 You can fi nd the address of the centre nearest you on the Europe Direct website: 

http://europedirect.europa.eu

  ON THE PHONE OR BY MAIL

 Europe Direct is a service which answers your questions about the European Union. You can contact 
this service by freephone: 00 800 6 7 8 9 10 11 (certain mobile telephone operators do not allow access 
to 00 800 numbers or these calls may be billed), or by payphone from outside the EU: +32 229-99696, 
or by electronic mail via http://europedirect.europa.eu

  READ ABOUT EUROPE

(cid:138)

 Publications about the EU are only a click away on the EU Bookshop website: 
http://bookshop.europa.eu 

You can also obtain information and booklets in English about the European Union from:

EUROPEAN COMMISSION 

REPRESENTATIONS

Representation in Ireland

18 Dawson Street, Dublin 2

IRELAND

Tel. +353 16341111

Internet: http://ec.europa.eu/ireland/

E-mail: eu-ie-info-request@ec.europa.eu

Representation in the United Kingdom

Europe House

32 Smith Square, London SW1P 3EU

UNITED KINGDOM

Tel. +44 2079731992

Internet: http://ec.europa.eu/uk

Representation in Wales

2 Caspian Point, Caspian Way, Cardiff 

CF10 4QQ

UNITED KINGDOM

Tel. +44 2920895020

Internet: http://ec.europa.eu/uk

Representation in Scotland

9 Alva Street, Edinburgh EH2 4PH

UNITED KINGDOM

Tel. +44 1312252058

Internet: http://ec.europa.eu/uk

Representation in Northern Ireland

74–76 Dublin Road, Belfast BT2 7HP

UNITED KINGDOM

Tel. +44 2890240708

Internet: http://ec.europa.eu/uk

Delegations in the United States

2175 K Street, NW

Washington DC 20037

UNITED STATES OF AMERICA

Tel. +202 8629500

222 East 41st Street, 20th fl oor

New York, NY 10017

UNITED STATES OF AMERICA

Tel. +212 3713804

Internet: http://www.eurunion.org

EUROPEAN PARLIAMENT OFFICES

Offi  ce in Ireland

European Union House

43 Molesworth Street, Dublin 2

IRELAND

Tel. +353 16057900

Internet: http://www.europarl.ie

E-mail: epdublin@europarl.europa.eu

United Kingdom Offi  ce

Europe House

32 Smith Square, London SW1P 3EU

UNITED KINGDOM

Tel. +44 2072274300

Internet: http://www.europarl.org.uk

E-mail: eplondon@europarl.europa.eu

Offi  ce in Scotland

The Tun, 4 Jackson’s Entry

Holyrood Road, Edinburgh EH8 8PJ

UNITED KINGDOM

Tel. +44 1315577866

Internet: http://www.europarl.org.uk

E-mail: epedinburgh@europarl.europa.eu

There are European Commission and Parliament 

representations and offi  ces in all the countries of 

the European Union. The European Union also has 

Internet: http://www.eurunion.org

delegations in other parts of the world.

136

 
 
 
 
 
The European Union

0

500 km

Reykjavík

Ísland

Norge

Oslo

Sverige
Stockholm

United Kingdom

Éire
Ireland

Baile Átha Cliath
Dublin

Danmark
København

London

Nederland
Amsterdam

België

Brussel
Bruxelles
Belgique

Berlin

Deutschland

Paris

Luxembourg
Luxembourg

Praha
(cid:253)eská
republika

Suomi
Finland

Helsinki
Helsingfors

Tallinn
Eesti

R(cid:431)ga

Latvija

Lietuva
Vilnius

R.

Minsk

Belarus'

Warszawa

Polska

Kyïv

Ukra(cid:640)na

France

Portugal

Lisboa

Madrid

España

Andorra

Liechtenstein

Wien

Schweiz
Bern

Suisse

Svizzera

Budapest
Magyarország

Moldova
Chi(cid:250)in(cid:259)u

Slovensko

Bratislava

Österreich
Slovenija
Ljubljana

Zagreb
Hrvatska

România

Bucure(cid:250)ti

Monaco

San Marino

Bosna i
Hercegovina

Sarajevo

Beograd

Srbija

Italia
Roma

Città del
Vaticano

Crna
Gora

Podgorica

Priština

Kosovo

* UNSCR 1244

Skopje

(cid:571)(cid:628)(cid:613)(cid:605)(cid:602)(cid:618)(cid:610)(cid:633)
Bulgaria
(cid:587)(cid:616)(cid:622)(cid:610)(cid:633)
Sofia

Tiranë
Shqipëria

P.J.R.M.

(cid:508)(cid:540)(cid:540)(cid:528)(cid:303)(cid:302)
Ellada

(cid:505)(cid:537)(cid:530)(cid:542)(cid:302)(cid:538)
Athinai

Ankara

Türkiye

Rabat

El Maghreb

Alger

El Djazâir

Tunis

Tounis

Malta

Valletta

(cid:512)(cid:554)(cid:652)(cid:545)(cid:544)(cid:546)
Kypros
Kibris

(cid:513)(cid:304)(cid:547)(cid:539)(cid:550)(cid:305)(cid:531)(cid:302)
Lefkosia
Lefkosa

Souriya

Iraq

Libnan

Beyrouth

Dimashq

Member States of the European Union (2011)

Candidate countries

Açores (PT)

Madeira (PT)

Canarias (ES)

Paramaribo

Suriname

Guyane
(FR)

Brasil

Rossija

Moskva

Guadeloupe (FR)

Martinique (FR)

Réunion (FR)

Qazaqstan

Sakartvelo

Tbilisi

Az(cid:1317)rbaycan
Ha(cid:640)astan

Yerevan

(Az(cid:1317)r.)
Iran

General Report on the Activities of the European Union — 2010
European Commission 

Directorate-General for Communication 

Publications 

1049 Brussels

BELGIUM 

The General Report on the Activities of the European Union — 2010 

was adopted by the European Commission on 16 February 2011 under 

reference number SEC(2011) 189.

http://europa.eu/generalreport/en/welcome.htm

Cover illustration: © Corbis 

2011 — 136 pp. —  21 × 29.7 cm

ISBN 978-92-79-17464-3

doi:10.2775/59174 

Luxembourg: Publications Office of the European Union, 2011

© European Union, 2011

Reproduction is authorised provided the source is acknowledged. For any use 

or reproduction of individual photos, permission must be sought directly from 

the copyright holders.

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 GENERAL REPORT 
ON THE ACTIVITIES
OF THE EUROPEAN UNION
2010

EUROPEAN COMMISSION